Corrugated Polyethylene Pipe

Armtec Infrastructure Inc. Reports Results for the Second Quarter 2011

Against goodwill, intangible assets and certain property, plant and equipment.

"In the second quarter of 2011, Armtec's financial results were impacted by the continued margin compression in our ES business related to complex projects that are currently in production.  In addition, the CIA product margins were also well below 2010 levels due to an unfavourable product mix as most parts of the country were impacted by the unusual weather conditions," said Charles M. Phillips, President and Chief Executive Officer.

Summary of Results

was 1.5% ahead of the comparative period in 2010 as a result of the higher backlog coming into 2011.  The increased revenues, however, did not translate into comparable earnings, particularly at the gross margin level.  New ES project activity remained below management's expectations which exacerbated the negative impact on the second quarter results of the Company's ES business.  Many ES projects undertaken in 2010 and progressing into 2011 were booked during the recession when market conditions were very competitive, characterized by excess capacity and lower bidding margins, particularly in the Central and Prairie regions.  Compounding these effects was the fact that many of the larger ES projects were more complex than was customary, negatively impacting margins achieved and overall performance.  The impact of these contracts will diminish as projects are completed and the backlog is rebuilt with more traditional work. Recent ES bid margins have improved slightly and projects are more consistent with Armtec's core production competencies, however, the award of these projects have been delayed in many cases.

In the six months ended was below the $103.7 million achieved in same period of 2010.  CIA revenue and volumes in the majority of the Company's facilities were well below average levels in the first half of 2011 due to poor installation conditions that persisted through most of the second quarter.  The near record precipitation that was experienced in almost every part of the country impacted the shipments of drainage products in many end use markets.  The offsetting revenue gains in the utility end use markets represent a lower contribution to earnings when compared to the core drainage market.  CIA gross margins were compressed as a result of under-utilized capacity, unfavourable product mix, and increased competitive pricing due to the low level of work available.  Conversely, the same period in 2010 represented a buying anomaly due to an unusually strong first half in residential markets, reflecting the impact on buying patterns related to various government programs such as the Harmonized Sales Tax and the wind up of the home renovation credit.  The 2010 results also benefited from the early spring which moved drainage purchases ahead in the procurement cycle.

JM Eagle Start Manufacturing Dual Wall Corrugated Polyethylene Pipe

Combining a corrugated exterior and a smooth interior for maximum hydraulic efficiency in a high-density polyethylene pipe, Eagle Corr PE (Dual Wall) can be used in a variety of gravity flow applications and is especially ideal for storm sewer systems.

"The introduction of Eagle Corr PE (Dual Wall) marks the first step in a major expansion of JM Eagle's line of PE pipe products," said Walter Wang, president and CEO of JM Eagle. "We're extremely proud of the work that went into developing this pipe, and believe it will play an important role as the United States begins to implement the Obama administration's agenda to rebuild the country's crumbling water infrastructure."

Eagle Corr PE (Dual Wall) has a high strength-to-weight ratio, is very flexible and weighs less than traditional products, making it easier to install without sacrificing durability or structural strength. Designed for use in engineered construction, its applications extend from commercial and residential to recreational, irrigation/agricultural and capital improvement projects.

Eagle Corr PE (Dual Wall) can support a load rating of H-25 - with a minimum cover of only 1 foot - but with a conduit design that's also flexible enough to allow for cover heights in excess of 100 feet. Additionally, it has a water-tight bell-and-spigot joint and, like all of JM Eagle's polyethylene pipe products, it provides unmatched resistance to corrosion, abrasion and UV degradation.

"This high-quality product is the result of diligent research and an ongoing commitment to innovation," said Kaushal Rao, director of operations at JM Eagle. "What's more, because the pipe is so easy to transport and install, shipping and labor costs decrease resulting in improved cost-efficiencies for the overall project."

Eagle Corrugated PE is currently manufactured in sizes ranging from 4-inch to 60-inch diameter, and is produced in 20-foot lengths. It also conforms to key industry standards, including ASTM F2306, AASHTO M252, and M294 for pipe and fittings; ASTM F477 for rubber gaskets; ASTM D2312 for water-tight joints; and ASTM D2321 and AASHTO Section 30 for installation.

Sound-Absorbing Molded Parts

The Institute of Aerodynamics and Gas Dynamics at the University of Stuttgart, Germany can now test components for acoustic emissions. This is possible because sound-absorbing molded parts made of Basotect, the melamine resin foam from BASF, have been installed in the institute's laminar wind tunnel.

Urban subsurface drainage

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Annual book of ASTM standards

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HDPE pipe, recommended material specifications and design requirements

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Technical Manual: Plastic Pipe Used in Embankment Dams

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Department Of Defense Index of Specifications and Standards Federal Supply Class Listing (FSC) Part III July 2005

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