Envirocon experienced a challenging but rewarding year in 2009. Our clients' project needs took us across the country from California and Alaska to New York and South Carolina and many states in between. All three of our service lines, remediation, geotechnical and demolition won and worked-off a variety of exciting projects during the year. We completed our first vibrating beam cut-off wall for a client in Marinette, Wisconsin and received an "exceptional" performance rating from that client. Envirocon also finished hauling over 2 million cubic yards of sediment from the Milltown Clark Fork River Dam Removal, successfully completing the primary work scope on a complex five-year long project.

Our continued focus on safety performance resulted in a Total OSHA Recordable Rate of less than 1.0 while our EMR has dropped to 0.53 for 2010. The reduced EMR rate will translate into further costs savings for our clients. We also launched our Operational Excellence initiative to enhance all aspects of our service delivery including safety to better serve our clients in 2010 and beyond.

A slowing economy impacted environmental budgets in many industrial sectors during 2009. A number of projects were delayed or faced funding reductions. Recently, Envirocon, along with our other Washington companies, is seeing the first signs of economic pickup since the recession began. Business experts such as Bob Doll, Vice Chairman of Blackrock, are predicting modest but positive business growth in 2010. In response, Envirocon is working closely with clients to mitigate cost impacts and to stretch dollars.

Moving into 2010
During 2010 we believe that clients can take advantage of current market conditions and achieve better value in procuring remediation contractors. The improved value opportunities are a result of both downward pricing pressure and increased capacity in the three significant cost areas of construction work: labor, materials, and equipment.

• Labor availability and costs are favorable. With unemployment at 10% craft labor costs have trended downward. Many experienced qualified craft workers are available to complete projects in most areas of the country.
• Material pricing such as aggregate and reagents have softened and availability is much better than two years ago.
• Heavy equipment prices have been heavily discounted over the last several years and Envirocon added over $7 million of equipment to our already significant fleet in 2009. We also have great vendor relations throughout the country to obtain competitive rental equipment pricing. These discounts are passed on in Envirocon's pricing.

Envirocon is positioned to offer our clients enhanced value in providing our remediation, geotechnical and demolition services over the next year. We look forward to providing safe, quality, and cost effective solutions to our clients. We wish everyone a happy and prosperous year in 2010.

Best Regards,

Jack Gilbraith
President/CEO
Envirocon, Inc