MEMPHIS, TENN. - The October merger of Insituform Technol-ogies Inc. and Insituform Mid-America Inc. has created a single leader in the fragmented Insituform no-dig pipe repair business, but it resulted in a loss of nearly $1 million in 1995. ``The merger process was distracting and adversely affected the company's financial performance of the past year,'' said James Krugman, chairman and Jerome Kalishman, vice chairman, in a letter to shareholders in the company's 1995 annual report.
The merged company, Insitu-form Technologies, lost $966,000 in 1995, after a profit of $14.5 million in 1994. Sales increased 22 percent, to $272.2 million, from $223.2 million in 1994. The fiscal year ended Dec. 31.
The Insituform process repairs buried pipe without the need to dig it up. A tube saturated with a liquid thermosetting resin is installed inside the old pipe, then hot water is pumped through, causing the pipe to set into a new rigid pipe.
Memphis-based Insituform Technologies was formed in 1980 to license the technology through most of the United States. In recent years, the company began to buy up licensees. Insituform Mid-America, based in Chester-field, Mo., was its largest licensee, covering 20 states.
The merged company now covers all but eight states. Those states will continue to be served through independent licensees.
The company said it spent $14.5 million on merger and restructuring costs. Also, sales of the Insituform pipe and materials decreased 15 percent, to $18.6 million, from $21.9 million in 1994, mainly because of the loss of outside sales because those customers, former licensees, were acquired by Insituform Technolo-gies.