Insituform Announces North America Region Management Reorganization

Insituform Technologies Inc. (Nasdaq Global Select Market: INSU) announced Nov. 18 a reorganization of its North America Region (NAR) business unit management that will eliminate layers of management to reduce administrative and overhead costs. The company expects to realize approximately $4.2 million in annual cost-savings from these efforts, according to a press release.

The reorganization plan includes the elimination of 35 management and support staff positions. Approximately half of the positions are located at the Insituform’s headquarters in Chesterfield, Mo., with the remainder located throughout North America. All employees whose jobs are to be eliminated have been notified and will be provided transitional assistance.

“More than a year ago we set aggressive targets to reduce operating costs and administrative overhead. These improvements in our North America management structure are part of that plan and not a response to current economic conditions,” said Insituform president and CEO Joe Burgess. “During the past three quarters we have seen growth in both revenue and income, which we expect will continue. We will couple that growth with continuing overhead cost rationalization.

“The employees who are leaving us are good people who have served Insituform well. We are grateful to them and sorry to see them go, and we will do our best to help them resume their careers elsewhere,” Burgess said.
Under the new NAR organizational structure implemented, managers responsible for each of the four NAR operating regions will report directly to Burgess. The NAR regional managers will have full responsibility for operations, project management, business development and estimating in their areas, and will take over some business and support functions previously managed from the corporate headquarters. The overall result of the reorganization will be a leaner and flatter management structure, with fewer layers of management.

“We have made good progress over the past year in aligning our resources in NAR to the needs of the market, and our crews are now working at capacity and achieving record productivity levels. As we add crews and new business in the months ahead, we will continue to focus on maintaining the leanest and most efficient management structure possible,” Burgess said.

In other Insituform news, the company announced that it has settled its lawsuit against Per Aarsleff A/S, Insituform’s joint partner in Germany and the United Kingdom, as well as a former licensee of Insituform’s CIPP process in northern and eastern Europe, Russia and South Africa. The lawsuit was pending in Memphis, Tenn. In connection with the settlement, Per Aarsleff will pay Insituform $8.5 million in a lump sum.

In June 2005, Insituform filed a lawsuit in U.S. District Court for the Western District of Tennessee against Per Aarsleff and certain of its subsidiaries and affiliates seeking monetary damages for the breach by Per Aarsleff under the license and applied license agreements. Per Aarsleff had made counterclaims against Insituform in the litigation as well. As a result of the settlement, each side has provided general releases to the other and neither side has admitted liability on any claims in this litigation, the release said.
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