Insituform Technologies, Inc. Reports Second Quarter 2011 Results:

Insituform Technologies, Inc. (Nasdaq Global Select Market: INSU) today reported second quarter net income, excluding acquisition-related expenses, of $7.9 million ($0.20 per diluted share) (non-GAAP), representing a 50.1 percent decrease from the second quarter of 2010, when income from continuing operations was $15.8 million ($0.40 per diluted share). Inclusive of approximately $0.3 million in pre-tax acquisition-related expenses, net income for the second quarter of 2011 was $7.6 million, or $0.19 per diluted share. For the first six months of 2011, net income, exclusive of acquisition-related expenses, was $10.9 million (non-GAAP), or $0.27 per diluted share, compared to $24.2 million, or $0.62 per diluted share, in the first six months of 2010. Inclusive of the acquisition related expenses, net income for the first six months of 2011 was $10.6 million, or $0.27 per diluted share.

Joe Burgess, President and Chief Executive Officer, commented, “Our results in the second quarter were within our revised expectations, and we are now focused on delivering much stronger results moving forward. We believe we are in a position to achieve our previously stated full year earnings guidance of $1.30 to $1.40 per diluted share, as a result of a number of important factors. Firstly, the challenges in our North American Sewer Rehabilitation business have been communicated over the first half of this year. We have been focusing on a number of key business initiatives aimed at addressing these challenges and significantly improving our day-to-day execution in this business, including project estimating and bidding, crew management, and project management focus in the context of what we believe will continue to be very challenging market conditions. In addition, contract backlog rebounded nicely during the quarter, and our bid table continues to be fairly robust in the near-term, meaning revenues and productivity should improve significantly in the second half. We also expect growth in our European and Asian sewer rehabilitation businesses, with significant project opportunities in Australia, Malaysia and India. Secondly, we have continued momentum in our Energy and Mining business with growth in backlog at Corrpro and United Pipeline Systems. The market continues to be extremely robust across our Energy and Mining platform, and we are anticipating large project activity in the coming months, particularly in the Middle East and the Gulf of Mexico. Finally, we have taken some important strategic steps forward with the recent acquisition of CRTS, and the recently announced acquisitions of Hockway and Fyfe, which should be completed in the third quarter. These acquisitions position us well in more diversified and growing end markets with significantly higher margins.”

“Our growth strategy has been centered around our longstanding goal to position the Company to deliver consistent premium returns and profitability. We have been diversifying our business into more dynamic and growing global end markets, broadening our product and service offering, and lessening our dependence on municipal contracting. Our recently announced acquisitions are a large part of this strategy, as we are increasing our exposure to specialized proprietary technologies aimed at the robust energy, mining and broader infrastructure services markets. These acquisitions, coupled with our existing portfolio of products and services, accelerate our ability to improve profitability and our financial returns.”

“While our second quarter and first half performance in Energy and Mining was weaker than the same periods in 2010, resulting primarily from temporary softness in our Bayou business, I believe that we are poised for significant growth and improved operating margins in the second half and even more in 2012. Our backlog grew by almost 14 percent from the first quarter of 2011, but this is only part of the story, as we have line of sight on significant projects in the Middle East for both UPS and Corrpro in the near-term. Our visibility on projects that could start in 2012 in the Gulf of Mexico continues to improve as well. We also signed the $48 million CRTS project in Saudi Arabia in early July, and will begin preparation and fabrication work for this project later this year. We also recently announced joint ventures with Wasco Energy in the United States and Asia-Pacific, and with STARC in the Middle East, which will further bolster our growth prospects.”

“Our North American Sewer Rehabilitation operation suffered a significant setback in the first half of 2011 as a result of challenging market conditions, severe weather and performance issues. As we have discussed before, we have experienced significant bidding and project release delays coupled with a continued trend of more smaller diameter and smaller sized projects, all of which have negatively impacted our margins. In the last few months, we have made a number of organizational changes to respond to these issues, and will get this business unit on track to perform at the level we expect. We will be leaner and more disciplined in our estimating, bidding, project management and crew deployment. We expect the second half bid table to be fairly robust, despite the challenges of the competitive marketplace and fiscal constraints on municipal customers. I am confident that we are taking the steps necessary to position this business to achieve the profit and return levels that we have been driving toward in the last few years.”

“Our European Sewer Rehabilitation business continued to make progress as well. For the second quarter, operating income improved nearly 40 percent from the prior year, primarily as a result of top-line growth in the Netherlands and third-party tube sales throughout Europe. We are making solid progress in Europe, despite continued market headwinds in the United Kingdom and France. We are seeing slight improvements in these markets and fairly robust growth in other parts of Europe. Our effort to penetrate the third-party product sales market in Europe is also making strides, and we expect to begin manufacturing glass CIPP liner at our U.K. manufacturing facility in the third quarter.”

“Our Asia Pacific Sewer Rehabilitation results were lower than our expectation in the second quarter as a result of continued project delays in the Indian market. We also continued to experience delays on the final stages of older projects in Delhi. On a positive note, we have been notified we are the low bidder on recent project bids in Delhi valued at approximately $18 million, and we expect that these projects will be awarded in the third quarter and we will begin work in the fourth quarter. We also have significant tenders coming to bid in Malaysia during the third quarter. Our Australian business continues to expand and we anticipate strong results from this business in the second half of the year.”

“Our Water Rehabilitation business continued to lag behind our expectations this quarter as a result of slower than expected bidding activity and poor project performance. This market continues to be very challenging with municipal fiscal constraints. We continue to experience product capability limitations, as well. We are conducting a strategic review to determine the sustainability of this business as a standalone service offering and to determine whether it would be better positioned as an integrated product offering within our sewer rehabilitation business. We expect to conclude this review shortly.”

“It is an exciting time at Insituform, as the business is poised for significant profitable growth. Our North American Sewer Rehabilitation business is getting back on its feet, we are seeing growth in Europe and Asia, and our Energy and Mining business is positioned well for growth in a very robust global energy market. We further believe that our acquisitions of CRTS, Hockway and Fyfe will enable the Company to rapidly progress towards our profit and return goals.”

Energy and Mining Segment

In the second quarter of 2011, our Energy and Mining segment operating income decreased by $4.4 million, or 38.5 percent, compared to the second quarter of 2010. The decrease was primarily due to a temporary lull in large diameter pipe coating projects at Bayou. Gross profit for the second quarter 2011 at Bayou was down approximately $3.6 million from the second quarter 2010. This decrease was partially offset by continued improvements in our industrial linings and cathodic protection businesses. Our gross profit margin decreased to 24.7 percent compared to 28.7 percent in the prior year quarter primarily as a result of changes in the geographic mix of our industrial linings business, which performed more work in South America, where margins are historically lower than other regions due to a larger percentage of non-lining work on projects, and the decrease in volume in our coating operations. The increase in operating expenses for the second quarter of 2011 was due to additional resources to support the expansion of this business, most notably our Middle East expansion efforts. We expect improving global markets will lead to growth within existing geographies as well as new geographies, specifically Asia and the Middle East as evidenced by the recently announced acquisitions within our corrosion engineering and pipe coating businesses, which expand our presence in the Middle East and other key markets.

Contract backlog in our Energy and Mining segment at June 30, 2011 increased $20.5 million, or 13.9 percent, compared to March 31, 2011 and increased $ 7.0 million, or 4.4 percent, compared to June 30, 2010. The increase over the prior year quarter was primarily driven by our industrial linings business, which has experienced strong growth in our South American and Canadian markets, and the inclusion of our newly acquired CRTS business, which added $6.8 million in backlog, partially offset by lower backlog in our pipe coating operation. Since December 31, 2010, all of our businesses have increased backlog levels. We continue to believe that continued strong energy demand and new spending in the sector will result in significant opportunities for our Energy and Mining operation for the foreseeable future.

North American Sewer Rehabilitation Segment

In the second quarter of 2011, our North American Sewer Rehabilitation segment operating income decreased by $9.2 million, or 93.6 percent, compared to the second quarter of 2010. The principal contributors to the 2011 second quarter results were the 12.2 percent decline in revenues due to lower workable backlog as result of project release delays, along with compressed gross margins resulting from poor project performance magnified by a significant shift to small diameter sizes pressuring project management and crew operations. Operating expenses in this segment decreased primarily due to a continued focus on operational efficiencies and resource management. For the first six months of 2011, the results were further impacted by extreme weather conditions during the first quarter.

Contract backlog in our North American Sewer Rehabilitation segment at June 30, 2011 increased $18.0 million, or 12.0 percent, compared to March 31, 2011 and decreased $39.1 million, or 18.9 percent, compared to June 30, 2010. The increase from March 31, 2011 was due to growth of our domestic operations, specifically within the central region of the United States. The decrease from June 30, 2010 was due to weaker market conditions in the eastern and western regions of the United States.

European Sewer Rehabilitation Segment

In the second quarter of 2011, our European Sewer Rehabilitation segment operating income increased by $0.5 million compared to the second quarter of 2010. The increase was primarily due to improved results in our contracting operations in the Netherlands and growth in third-party tube sales. Partially offsetting the 31.1 percent revenue increase were continued challenges in France and the United Kingdom due to continued weaker, although improving, market conditions and delays in customer spending.

Contract backlog in our European Sewer Rehabilitation segment at June 30, 2011 decreased $1.8 million, or 7.5 percent, compared to March 31, 2011 and decreased $0.5 million, or 2.2 percent, compared to June 30, 2010. Backlog remains strong in the Netherlands and most parts of Europe, while the United Kingdom remains weak due to market conditions.

Asia-Pacific Sewer Rehabilitation Segment

In the second quarter of 2011, our Asia-Pacific Sewer Rehabilitation segment operating income decreased by $1.2 million, compared to the second quarter of 2010. The decrease was primarily due to lower revenue in India resulting from continued delays in the completion of older projects which are carrying low gross margins. We also experienced delays in the start of new projects which will carry significantly improved margins. However, we have experienced growth in our Australian and Singaporean operations, partially offsetting the decrease in India.

Contract backlog in our Asia-Pacific Sewer Rehabilitation segment at June 30, 2011 decreased $18.4 million, or 26.8 percent, compared to March 31, 2011 and decreased $25.7 million, or 33.8 percent, compared to June 30, 2010. The decrease was primarily due to a Singapore project that was adjusted downward due to project revisions. Prospects continue to be strong throughout Asia-Pacific, particularly in Australia, Singapore and Malaysia. There are also continued opportunities to grow our third party tube sales throughout Asia.

Water Rehabilitation Segment

In the second quarter of 2011, our Water Rehabilitation segment operating income decreased by $0.6 million compared to the second quarter of 2010. The decrease was primarily due to challenging project conditions and delays. The 32.9 percent increase in revenue was due primarily to record revenue levels from our water operations in Asia. Additionally, our Water Rehabilitation segment was negatively impacted by severe weather in the United States in the first quarter of 2011.

Our Water Rehabilitation segment contract backlog decreased $1.1 million, or 35.5 percent, to $2.0 million at June 30, 2011 compared to March 31, 2011.

As stated earlier, performance in this segment has lagged behind our expectations, and we continue to have market and product challenges. As a result of these challenges, we have been conducting a strategic review to determine the ongoing sustainability of this business as a standalone service offering and whether it is better positioned as an integrated product offering within our sewer rehabilitation business. We anticipate that we will conclude this review shortly.

Cash Flow

Unrestricted cash was slightly higher at June 30, 2011 at $108.0 million compared to the $107.3 million at March 31, 2011 and decreased from $114.8 million at December 31, 2010. We expect to see increased cash flow in the second half of 2011 as earnings grow and we are able to optimize our cash management practices.

Insituform Technologies, Inc. is a worldwide leader in global pipeline protection. Insituform provides proprietary technologies and services for rehabilitating sewer, water and energy and mining piping systems and the corrosion protection of industrial pipelines. More information about Insituform can be found on its internet site at www.insituform.com.

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 news release 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 or 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, 2010, as filed with the Securities and Exchange Commission on February 28, 2011. In light of these risks, uncertainties and assumptions, the forward-looking events 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 news release are qualified by these cautionary statements.

Regulation G Statement

Insituform has presented certain information in this release excluding certain items that impacted income and diluted earnings per share. The (non-GAAP) earnings per share exclude the earnings impact of acquisition-related expenses. Insituform management uses such non-GAAP information internally to evaluate financial performance for its operations, as the Company believes it allows the Company to more accurately compare the Company’s ongoing performance across periods.

Insituform®, the Insituform® logo, InsituMain®, United Pipeline Systems®, Bayou Companies™ and Corrpro® are the registered and unregistered trademarks of Insituform Technologies, Inc. and its affiliates.