Aegion Corporation (NASDAQ:AEGN) Q1 2018 Earnings Conference Call - Final Transcript
May 03, 2018 • 09:30 am ET
Good morning, and welcome to the Aegion Corporation's First Quarter 2018 Earnings Call. At this time, all participants are in a listen-only mode. (Operator Instructions) And as a reminder, this event is being recorded.
It is my pleasure to turn the call over to your, host Katie Cason, Vice President, Financial Planning and Analysis and Investor Relations.
Katie, you may proceed.
Good morning, and thank you for joining us today. On the line with me are Chuck Gordon, Aegion's President and Chief Executive Officer, and David Morris, Aegion's Executive Vice President and Chief Financial Officer. We posted a presentation that will be referenced during the prepared remarks on AGM's website, aegion.com/investor/webcast. You will find our safe harbor statement in the presentation and in the press release issued yesterday evening.
During this conference call and in the presentation materials, the Company will make forward-looking statements, which are inherently subject to risk and uncertainty. The Company does not assume the duty to update forward-looking statements.
I will now turn the call over to Chuck Gordon.
Thank you, Katie and good morning to everyone joining us on the call today. For those following along with the slides we posted this morning, let's start on Slide 3 of the presentation. Aegion delivered first quarter adjusted EPS of $0.13, which was overall aligned with both The Street and our internal projections. As we said in our call in March, the first quarter is typically a low period for construction activity in many parts of our business due to weather and a slower pace for work (inaudible) from customers at the start of the new fiscal year. Weather conditions were more severe than what we've experienced in recent years and persisted for much of the quarter into early April. This impacted our Infrastructure Solution segment the hardest, specifically our North America CIPP business, where we estimate the negative impact to be approximately $10 million in revenues and more than $3 million in adjusted operating income or $0.08 per share.
Offsetting this impact, we saw favorable results in both our Energy Services and Corrosion Protection segments and benefited from discrete tax items that lowered our adjusted effective tax rate for the quarter, which David will discuss more fully in a few minutes. Our core markets remain intact as well. North America wastewater rehabilitation orders remain strong. And in the broader energy markets, improved oil prices provide additional tailwinds for our linings and coating businesses in Corrosion Protection. We also secured new business in our Energy Services segment, where we are now embedded in 14 of the top 17 refineries in California and Washington. These positive market forces contributed to an 8% year-over-year increase in our contract backlog ending March 31, excluding backlog for the large pipe corrugated installation project, which was substantially completed in 2017.
All in all, I'm pleased with our start for the year and feel good about our position as we head into our seasonally stronger quarters. We remain confident in our outlook for adjusted