Underground Solutions Inc. (fka UGSI)

[Obamination]

March 10, 2014

Dear UGSI Shareholder,
Underground Solutions closed out 2013 with another year of double-digit growth in both bookings and revenue. Revenue was up 14% over 2012, driven largely by the successful development of our UGSI ChemFeed business (acquired in the third quarter of 2012). Bookings for the entire group increased by 17.5%, and we ended the year with backlog 26% higher than last year. Needless to say, a 26% higher backlog bodes well for 2014. The business remains profitable with strong cash flow.

Significant accomplishments during the year included:

• Another Trenchless Technology Magazine Project of the Year Award for our Fusible PVC™ pipe, this time for pipeline rehabilitation; http://www.undergroundsolutions.com/articles/TT%20Project%20of%20the%20Year%20-%20Rehab%20Winner%20-%2010-13.pdf

• Successful roll-out of our new ServiceGuard® Composite Pipe product, a service line (the pipe that runs from the water main in the street to the meter) offering of a unique, three-layer CPVC/Aluminum/CPVC pipe technology exclusively licensed by UGSI from The Lubrizol Corporation for the United States and Canada; http://www.undergroundsolutions.com/serviceguard.php

• Renewal for a new five-year term of our successful Canadian licensing relationship with Ipex, Inc. and execution of a new three-year license agreement with IPLEX, Inc. covering Australia;

• Completion of a large multi-million dollar electrical conduit project consisting of two separate bundles of Fusible PVC™ directionally drilled under a river – an application that is showing increasing promise;

• Completion of a Fusible PVC™ pipe installation in Maine, meaning that we now have installations in all 50 states, plus Guam and the U.S. Virgin Islands; and

• Issuance by the American Water Works Association (AWWA) of a revised installation standard for PVC pipe that specifically references the use of fused PVC joints as an acceptable joining technique (this last accomplishment actually occurred in early 2014 due to seemingly unending efforts by some of our competitors to block the revised standard).

While we are justifiably proud of our performance in 2013 as we cap-off the third straight year of double-digit growth in both bookings and revenue, our 2013 results did not meet our expectations across the board. In particular, full year results for UGSI Infrastructure (FusiblePVC™ pipe / ServiceGuard® Composite Pipe / Mobile Pipe Lining and Coating) were
disappointing. Revenue declined by approximately 7% for UGSI Infrastructure, as bookings declined by around 2%. These declines resulted from a confluence of events, all of which have
been addressed in shareholder letters issued over the course of 2013.

Bad weather in the first quarter across the United States and Canada impacted construction
activity. As such, pipe shipments were delayed which negatively affected revenue generation as
well as royalty income from Canada. Although we were able to make up a lot of that lost ground
in the second and third quarters, project booking delays in the third and fourth quarters
resulted in a disappointing fourth quarter. On the bright side, projects delayed are not projects
lost and, as we expected, we are still winning the projects . . . just later than originally forecast.
So even though we suffered delays in booking some significant projects in the third and fourth
quarters, we entered 2014 with a backlog for UGSI Infrastructure that was almost 18% higher
than year-end 2013. Despite severe winter weather once again hampering construction activity
across both the U.S. and Canada, we expect UGSI Infrastructure’s first quarter to be much
improved over last year’s first quarter results.

UGSI ChemFeed had an outstanding year, exceeding our expectations. While year-over-year
comparisons are not truly relevant since we only owned this business for five months in 2012, it
is fair to look at improvements in monthly averages. Average monthly revenue more than
doubled in 2013, while average monthly bookings increased by over 50%. It is important to
note, as well, that a significant share of the 2012 bookings consisted of business passed through
from Siemens in connection with the purchase of the UGSI ChemFeed assets. This makes the
increase in 2013’s average monthly bookings all the more impressive. All that being said, we still
have a long way to go to build-out our product lines and make UGSI ChemFeed a more
meaningful player in the water/wastewater treatment equipment space.

Although we fully expect to grow our UGSI infrastructure business organically at double-digit
rates for the foreseeable future – notwithstanding our 2013 results – our opportunity for growth
via acquisitions is focused on the equipment or “solutions” side of the business. As such, we
continue to seek opportunities to grow our equipment and process solutions offering through
acquisitions of existing businesses and interesting technologies . . . provided that we can do so
at a reasonable price with the funds available to us.

Despite generally uncooperative weather across most of the country, we still look forward to
another year of double-digit growth across our entire group.

Thank you for your continued support.

Sincerely,
Andy Seidel
Chairman and Chief Executive Officer