Layne Christensen Company (Nasdaq:LAYN) ("Layne" or the "Company")
today announced preliminary, unaudited results for the fiscal 2013
fourth quarter ended January 31, 2013 (Q4 FY 2013). Layne expects
to announce full year and Q4 FY 2013 audited results on or about
April 15, 2013.
Q4 FY 2013 Preliminary, Unaudited Results and Other
Highlights:
- Revenues of approximately $230 million.
- Loss from continuing operations, net of income taxes, of
between $23 million and $25 million, or $1.18 to $1.28 per diluted
share.
- Layne noted that it continues to evaluate assets associated
with its strategy to provide global solutions to water, mineral and
energy clients. In that regard, the loss from continuing operations
will include non-cash, pre-tax charges of $6 to $8 million
associated with the write-off of non-core products and technologies
at Water Resources and Energy Services.
- Layne incurred approximately $4 million in severance and other
expenses related to the previously announced corporate
consolidation to The Woodlands, Texas.
- The Company has taken significant steps to address the impact
of these losses, including among others, headcount reductions, a
wage freeze, travel and entertainment restrictions and tighter
limits on capital expenditures. The Company intends to generate
approximately $20 million in the upcoming months with non-strategic
asset sales.
- Company announces a new, $80 million Heavy Civil project and
meaningful progress working through Heavy Civil's legacy
backlog.
"In our Mineral Exploration segment we have been able to
significantly reduce operating costs in response to the moderation
of the global commodity super-cycle that has driven results for the
last several years. In the last few months, many of our customers
have cut back on exploration programs, especially in Australia and
Africa, as they adjust to world economic changes and in some cases
work through the integration of large acquisitions. Our opinion is
that this market will be soft for the first half of FY 2014, but
could begin to rebound in the second half of this year as long as
gold and copper prices remain stable.
Heavy Civil losses were much greater than expected this quarter,
driven by higher than anticipated costs from certain projects in
the Northeast where this region's loss before income taxes was
approximately $3.5 million, with the remainder coming from
continued completion of older projects. We have made meaningful
progress against our stated goal of working through older projects
that do not meet our profitability expectations. At the same
time, we have secured new projects at Heavy Civil with higher
associated margins, including a new, $80 million project in Cudjoe
Key, Florida. Although the completion of legacy projects
continues, the vast majority of Heavy Civil's current backlog
entering FY 2014 reflects projects we expect to complete at
improved margins. Performance and execution will be the keys
for returning this segment to profitability.
Other non-cash costs in the quarter were due to a further
pruning of product lines that do not support our strategy to
address the significant water needs of the U.S. oil and gas
market. We are beginning to negotiate our first sizeable
contracts in the energy sector and are extremely excited about the
potential we see in this market. Our move to The Woodlands,
Texas is progressing as planned and, as a result of previously
announced executive changes, certain severance and other costs were
also incurred in the quarter."
--Rene J. Robichaud, President and Chief Executive
Officer
The loss before income taxes in Q4 FY 2013 is expected to be
between $34 million and $38 million. These losses are expected
to be attributable to, among other things: a) losses at Heavy
Civil, between $10 million and $12 million, as this business
continues to work through several unprofitable contracts that are
experiencing cost overruns; b) aggregate losses of between $13
million and $14 million at Geoconstruction, Water Resources, and
the new Energy Services initiative, including the above-referenced
non-cash, pre-tax charges totaling between $6 million and $8
million; and c) non-recurring severance and other expenses of
approximately $4 million pertaining primarily to the move to The
Woodlands, Texas. The expected loss at Mineral Exploration
will be approximately $1.0 million, as a result of the factors
noted above, ongoing civil unrest in Mali, and increased price
competition from some of the Company's competitors.
These preliminary results could differ materially from the
audited results that will be reported on or about April 15,
2013. The unaudited results presented in this release are
preliminary, and remain subject to regular year-end closing
processes that could result in significant adjustments, including
the assessment of the value of long-lived assets and goodwill,
income tax provisions, evaluation of uncertain tax positions,
evaluation of certain deferred tax assets, final assessment of
legal matters and other significant
estimates.
Layne Christensen Company
Layne is a global solutions provider to the world of essential
natural resources – water, mineral and energy. We offer
innovative, sustainable products and services with an enduring
commitment to safety, excellence, and integrity.
The Layne Christensen Company logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=3466
Forward-Looking Statements
This press release may contain forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Exchange Act of 1934. Such statements may
include, but are not limited to, statements of plans and
objectives, statements of future economic performance and
statements of assumptions underlying such statements, and
statements of management's intentions, hopes, beliefs, expectations
or predictions of the future. Forward-looking statements can
often be identified by the use of forward-looking terminology, such
as "should," "intended," "continue," "believe," "may," "hope,"
"anticipate," "goal," "forecast," "plan," "estimate" and similar
words or phrases. Such statements are based on current expectations
and are subject to certain risks, uncertainties and assumptions,
including but not limited to: the outcome of the ongoing
internal investigation into, among other things, the legality,
under the Foreign Corrupt Practices Act and local laws, of certain
payments to agents and other third parties interacting
with government officials in certain countries in Africa
relating to the payment of taxes, the importing of equipment and
the employment of expatriates (including any government enforcement
action which could arise out of the matters under review or that
the matters under review may have resulted in a higher dollar
amount of payments or may have a greater financial or business
impact than management currently anticipates), prevailing prices
for various commodities, the duration of the current slowdown in
the Mineral Exploration market, unanticipated slowdowns in the
Company's major markets, the availability of credit, the risks and
uncertainties normally incident to the construction industry, the
timing for the completion of the existing unprofitable contracts in
the Heavy Civil division, the ability of the Company to
successfully obtain profitable contracts in the Heavy Civil and
Energy Services divisions, the impact of competition, the
effectiveness of operational changes expected to increase
efficiency and productivity and reduce costs, worldwide economic
and political conditions and foreign currency fluctuations that may
affect worldwide results of operations. Many of the factors that
will determine these items are beyond the Company's ability to
control or predict. Should one or more of these risks or
uncertainties materialize, or should underlying assumptions prove
incorrect, actual results may vary materially and adversely from
those anticipated, estimated or projected. These
forward-looking statements are made as of the date of this filing,
and the Company assumes no obligation to update such
forward-looking statements or to update the reasons why actual
results could differ materially from those anticipated in such
forward-looking statements. For further discussion of these factors
see "Item 1A. Risk Factors" in the Company's most recent Annual
Report on Form 10-K and, to the extent applicable, its Quarterly
Reports on Form 10-Q.
CONTACT: Layne Christensen Company
Jerry W. Fanska
Sr. Vice President Finance
913-677-6858
jerry.fanska@layne.com
Jenny Caulk
Corporate Communications Manager
913-677-6852
jenny.caulk@layne.com
The Equity Group Inc.
Devin Sullivan
Sr. Vice President
212-836-9608
dsullivan@equityny.com
Thomas Mei
Account Executive
212-836-9614
tmei@equityny.com
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