defa14a04302008.htm
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Insituform Technologies,
Inc.
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On
April 30, 2008, Insituform Technologies, Inc. (the “Company”) issued a press
release announcing that it mailed the following letter from J. Joseph “Joe”
Burgess to its stockholders. A copy of the press release is attached
hereto as Exhibit 99.1.
April 30,
2008
Dear
Fellow Stockholder:
As you
may know, I joined Insituform almost a month ago as your Company’s new President
and Chief Executive Officer. With this letter, I would like to introduce myself
briefly and share with you my thoughts about our business and your Company’s
potential to create significant value going forward. I am
enthusiastic about the opportunities that exist for Insituform and its
stockholders, and confident that you have a superior Board and management team
working on your behalf.
I bring
to Insituform over 20 years of experience in the global water, sewer, energy and
petrochemical industries, during the last five of which I managed water and
waste water operating services businesses at Veolia Water North America, most
recently as President and CEO. Prior to joining Veolia, I was with
Covanta Water for approximately 15 years. During my 20+ year career I
have gained significant experience in the U.S. sewer and water markets, and was
involved with a number of major projects in South America, the Caribbean, Europe
and Asia. As anyone in the industry can tell you, sewer and water
infrastructure in the U.S. is aging and in need of immediate maintenance and
repair—the same is increasingly true on a global level. In fact, over
the next 25 years, the global unmet demand for sewer and water rehabilitation
and infrastructure is conservatively estimated to be more than $22
trillion!
To
capitalize on these opportunities, your management team and Board are
implementing a strategic plan that has begun to deliver positive results for
your Company and its stockholders. This strategic plan reflects my
vision, priorities and objectives for Insituform and is designed to improve our
operational and financial performance and to profitably grow your
Company. Let me share with you what our primary focus will be during
the next 12 to 18 months:
·
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Diversifying Insituform’s
business by exploiting high growth opportunities in the U.S. sewer
rehabilitation market. We are making great strides
expanding our customer base in our North American rehabilitation
business. Our sales force is broadening its focus beyond
traditional urban clients to include new geographies and suburban collar
communities – communities located around our existing urban
clients. To further diversify our customer base and improve
profitability, we are also pursuing more negotiated work and higher margin
industrial work.
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·
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Growing internationally and
expanding into markets where demand is burgeoning and competition is more
limited. We are determined to expand our business into
geographies where current infrastructure does not meet current
needs. For example, as part of a ten-year plan by the City of
Delhi, India to spend approximately $7.5 billion to rehabilitate its sewer
and water systems, Insituform was awarded late last year two sewer
rehabilitation contracts totaling $35.1 million. Together with
our local partners, we are well-positioned to grow rapidly, and I am
confident that by penetrating this and other underserved markets, we can
achieve double-digit international revenue growth. In addition,
we see robust opportunities to expand our United Pipeline Systems® gas and
oil pipeline rehabilitation business throughout the world and anticipate
performing projects on five continents during
2008.
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·
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Continuing to develop products and
services that complement our existing businesses and can be marketed
through Insituform’s global distribution network. We are
constantly working to expand and improve our product
portfolio. For example, through Insituform Blue®, our portfolio
of products for our potable water pipe rehabilitation business, we have
been winning business domestically and internationally. Recent
awards include a $4.25 million project to rehabilitate a century-old water
main line beneath New York City’s Madison Avenue and a $7.7 million
project to rehabilitate a water pipeline under and around Hong Kong’s
Nathan Road. Our I Blue® business has extraordinary growth
prospects and by demonstrating the cost-effective, non-invasive
implementation of our I Blue® products, I believe we can achieve $150
million in business within three to five
years.
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I am
confident that our 2008 performance will reflect a significant improvement over
our 2007 results. As I told analysts and investors on our April
25th
first quarter 2008 earnings conference call, I have reviewed the Company’s 2008
business plan as well as Wall Street’s estimates for this year, and I am
confident that we will comfortably out-perform the $0.54 2008 consensus EPS
estimate. Insituform’s business has real momentum, as evidenced by
the growth in backlog and the series of major contract wins we have announced in
the U.S. and around the world. I am committed to ensuring that your
Company continues to execute on its strategic plan in 2008 and building on this
momentum for years to come.
I joined
Insituform with the strong belief that your board of directors, the rest of the
management team and myself would be a great partnership to bring this Company to
new levels of success. I have great respect for our people at every
level: we have a hard working and talented global workforce of 1,600 strong, an
outstanding and proven management team, and a board that is experienced,
independent and engaged. I share with the Board and your management team a
confidence that Insituform has the right plan and the right team in place to
execute that plan, and that together we can deliver sustainable and profitable
growth and enhanced value to our stockholders.
For all
of these reasons, it is unfortunate that at this critical time for Insituform a
dissident hedge fund, Water Asset Management (WAM), has chosen to wage a costly
and distracting proxy contest at this year’s Annual Meeting. WAM,
which has not put forth any ideas to improve stockholder value, is attempting to
seize control of your Company and pursue a fire-sale of the Company—an
irresponsible proposition in the current economic environment and quite telling
of its self-serving agenda. More importantly, we believe WAM
threatens the future value of your investment.
I am
confident that Insituform is on the right path to a stronger future and
increased value for all Insituform stockholders. I urge you to
support Insituform and vote the WHITE proxy card to elect your Board’s
nominees.
Thank you
for your consideration.
Very
truly yours,
J. Joseph
“Joe” Burgess
President
and Chief Executive Officer
Insituform
Technologies, Inc.
Your
Vote Is Important, No Matter How Many Or How Few Shares You Own.
If you
have questions about how to vote your shares, or need additional assistance,
please contact the firm assisting us in the solicitation of
proxies:
INNISFREE
M&A INCORPORATED
Stockholders
Call Toll-Free: (888) 750-5834
Banks
and Brokers Call Collect: (212) 750-5833
IMPORTANT
We urge
you NOT to sign any Blue proxy card sent to you by Water Asset
Management.
If you
have already done so, you have every legal right to change your vote by using
the
enclosed
WHITE proxy card to vote
TODAY—by
telephone,
by
Internet, or by signing, dating and returning the WHITE proxy card
in the
postage-paid envelope provided.
Additional
Information
Insituform
has filed a definitive proxy statement with the Securities and Exchange
Commission (“SEC”) in connection with its 2008 Annual Meeting. Insituform’s
stockholders are strongly advised to read the definitive proxy statement
carefully, as it contains important information. Free copies of the
definitive proxy statement, and any amendments or supplements thereto, and other
materials filed by Insituform with the SEC will be available free of charge on
the SEC’s website at www.sec.gov, on Insituform’s website at www.insituform.com
under Investors/SEC or by directing requests to Insituform’s proxy solicitor,
Innisfree M&A Incorporated, toll free at (888) 750-5834.
Forward-Looking
Statements
The
Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for
forward-looking statements. The Company makes forward-looking
statements in this document that represent the Company’s beliefs or expectations
about future events or financial performance. These forward-looking
statements are based on information currently available to the Company and on
management’s beliefs, assumptions, estimates and projections and are not
guarantees of future events or results. When used in this document,
the words “anticipate,” “estimate,” “believe,” “plan,” “intend,” “may,” “will”
and similar expressions are intended to identify forward-looking statements, but
are not the exclusive means of identifying such statements. Such
statements are subject to known and unknown risks, uncertainties and
assumptions, including those referred to in the “Risk Factors” section of the
Company’s Annual Report on Form 10-K for the year ended December 31, 2007, as
filed with the Securities and Exchange Commission on March 10,
2008. In light of these risks, uncertainties and assumptions, the
forward-looking events discussed may not occur. In addition, our
actual results may vary materially from those anticipated, estimated, suggested
or projected. Except as required by law, we do not assume a duty to
update forward-looking statements, whether as a result of new information,
future events or otherwise. Investors should, however, review
additional disclosures made by the Company from time to time in its periodic
filings with the Securities and Exchange Commission. Please use
caution and do not place reliance on forward-looking statements. All
forward-looking statements made by the Company in this document are qualified by
these cautionary statements.
Insituform®, the
Insituform®
logo, Insituform Blue®, United Pipeline
Systems® and
Clean Water for the World® are the
registered trademarks of Insituform Technologies, Inc. and its
affiliates.
* * *
Exhibit
99.1
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Press
Release of Insituform Technologies, Inc. dated April 30,
2008.
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