EX-99.2 COND FIN STA 3 i8kproex.txt INSITUFORM EAST, INCORPORATED UNAUDITED PRO FORMA CONDENSED CONSLIDATED FINANCIAL STATEMENTS EXHIBIT INDEX Exhibit Description 99.2 Insituform East, Incorporated Unaudited Pro Forma Condensed Consolidated Financial Statements. EXHIBIT 99.2 INSITUFORM EAST, INCORPORATED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) The following unaudited pro forma condensed consolidated financial statements of Insituform East, Incorporated (the "Company") are derived from the application of pro forma adjustments to our historical consolidated financial statements and give effect to the sale to Insituform Technologies, Inc. ("ITI") of substantially all of the Company's non-real estate assets and on-going business. These statements do not reflect the subsequent sale of substantially all of the Company's real property pursuant to a Contract of Sale dated July 24, 2003. The unaudited pro forma condensed consolidated statements of operations for the fiscal years ended June 30, 2002 and 2001, and the nine months ended March 31, 2003, have been prepared as if the transaction had been completed on July 1, 2000 and reflect the cessation of substantially all of the Company's operations as of that date. These statements do not reflect an estimated gain on the transaction of $4,510,000 (proceeds of $5,500,000 less the net book value of assets sold of $990,000) or estimated transaction expenses of $600,000. The unaudited pro forma condensed consolidated balance sheet as of March 31, 2003 has been prepared as if the transaction had been completed on March 31, 2003. Pro forma adjustments are based upon preliminary estimates, available information and certain assumptions that management deems appropriate. The unaudited pro forma condensed consolidated statements of operations do not purport to be indicative of what our operations would have been had the transaction taken place on the date indicated, nor does the unaudited pro forma condensed consolidated balance sheet purport to be representative of what our financial position would have been had the transaction taken place on the date indicated. These unaudited pro forma condensed consolidated financial statements should be read in conjunction with our audited historical financial statements, and the related notes thereto, as filed with the Securities and Exchange Commission. EXHIBIT 99.2 INSITUFORM EAST, INCORPORATED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS (unaudited) Year Ended June 30, 2002 ------------------------------------------------------------------------------

EXHIBIT 99.2 INSITUFORM EAST, INCORPORATED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (unaudited) Year Ended June 30, 2001 --------------------------------------------------------------------------------------------

EXHIBIT 99.2 INSITUFORM EAST, INCORPORATED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (unaudited) Nine Months Ended March 31, 2003 ------------------------------------------------------------------------------------

EXHIBIT 99.2 INSITUFORM EAST, INCORPORATED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (unaudited) As of March 31, 2003 -----------------------------------------------------------------

EXHIBIT 99.2 INSITUFORM EAST, INCORPORATED NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (1) Pro forma results of operations for the years ended June 30, 2002 and 2001, and the nine months ended March 31, 2003, assume that substantially all operations ceased as of the first day of fiscal year 2001 beginning on July 1, 2000. The only operations remaining during the periods shown are those of TRY TEK Machine Works, Inc. ("TRY TEK"), the Company's wholly-owned subsidiary. TRY TEK was founded in 1985 to custom design and build special machinery, including machinery used to rehabilitate pipelines using cured-in-place pipe processes. TRY TEK is located in Hanover, PA and has four employees. (2) Adjustments to reflect intercompany sales between TRY TEK, the remaining business, and the Disposed Business. (3) Adjustments to facility carrying costs, salaries and other selling, general and administrative costs to reflect estimated costs that continue until remaining assets are liquidated, liabilities are satisfied and the Company is potentially dissolved. Continuing costs are estimated to consist of the following: Years Ended June 30, Nine Months Ended ------------------------------------------- -------------------------

(4) Adjustments to reflect reductions in, or for the nine months ended March 31, 2003, elimination of, interest expense for the periods shown as a result of using transaction proceeds of $3,000,000 to repay Notes Payable to CERBCO, Inc. on July 1, 2000. The adjustments for interest expense were calculated using an average of the prime rate for the respective periods. (5) The Pro Forma Condensed Consolidated Balance Sheet as of March 31, 2003 assumes that the transaction was completed on March 31, 2003. Transaction proceeds of $5,500,000, less $550,000 held in escrow, were received from the sale of certain inventories, equipment and other assets resulting in a gain of $4,510,000 over the net book value of the assets sold. (6) Adjustment to reflect the partial use of transaction proceeds to repay the Notes Payable to CERBCO, Inc. in the amount of $3,000,000 and estimated transaction expenses of $600,000 on March 31, 2003. (7) Adjustment to reflect the transfer to Insituform Technologies, Inc. under a side letter agreement of additional equipment in settlement of accrued and unpaid minimum royalties under sublicense agreements resulting in a gain of $390,000 over the net book value of the assets transferred.

INSITUFORM EAST INC 8-K/A