Aegion Corporation Provides Update on Balance Sheet Strength and Cash Management Initiatives

ST. LOUIS, July 02, 2020 (GLOBE NEWSWIRE) -- Aegion Corporation (NASDAQ:AEGN) today provided an update on the Company’s strong balance sheet and liquidity position exiting the second quarter 2020.

Ending global cash balances as of June 30 were more than $85 million, bolstered by success in the quarter managing discretionary spending, strong cash collection performance across the business and reduced working capital requirements, enabling the repayment of more than $40 million of debt in the second quarter. Net debt (total debt less unrestricted cash) as of June 30 was approximately $175 million and is at the lowest level in more than four years. Additionally, the Company announced on April 29, 2020, the successful completion of a credit facility amendment that provided expanded covenant flexibility and increased potential borrowing capacity over the next 12 months by more than $100 million.

As a result of the Company’s strong cash generation and increasing confidence in its ability to weather the impacts and uncertainty from the COVID-19 pandemic, the Company also announced the lifting of temporary salary reductions that were in place during the second quarter of 2020. Aegion implemented a number of cash-reduction initiatives in late March as part of a plan to reduce costs, increase liquidity and improve financial flexibility in response to the COVID-19 crisis. Actions included a temporary cash wage reduction for more than 700 North American salaried employees, ranging from 15% for lower salary bands to 50% for senior leadership and 100% for the Company’s CEO, CFO and General Counsel. The cash savings achieved during the second quarter as a result of the salary reductions were approximately $5 million. Wage reductions were lifted with a reinstatement of salaries to 100% on July 1, 2020.

When reductions were announced, the Company committed to returning the value of reduced wages to employees, with an initial expectation to issue restricted stock unit awards to impacted employees with a vesting period, and related expense amortization schedule, of one year. As a result of success with liquidity improvement initiatives, the Company made the decision to return the value of reduced salary to more than 500 impacted employees, based on salary tiers, through a one-time cash payment, payable in early July. This return of salary resulted in a pre-tax expense in the second quarter of approximately $2.5 million, or approximately $0.06 of EPS. The return of salary to remaining impacted employees, including senior management, will be made via the issuance of restricted stock units with vesting by November 15, 2020.