THE WOODLANDS, Texas,
June 6, 2016 /PRNewswire/
-- Layne Christensen Company (NASDAQ: LAYN) ("Layne" or
the "Company") today announced financial and operating results for
the fiscal 2017 first quarter (Q1 FY 2017) ended April 30, 2016.
Highlights
- Reported net loss from continuing operations for Q1 FY 2017 was
($8.8) million, or ($0.45) per share, compared to ($6.6) million, or ($0.34) per share, for Q1 FY 2016. Q1 FY 2016
results included a $4.2 million gain,
or $0.22 per share, on extinguishment
of debt.
- Adjusted EBITDA (a non-GAAP financial measure as defined below)
was $4.5 million in Q1 FY 2017
compared to $4.8 million in Q1 FY
2016.
- Consolidated revenues declined 8% to $159.7 million in Q1 FY 2017 from $174.3 million in Q1 FY 2016, largely related to
lower activity levels at Mineral Services and Heavy Civil.
Water Resources produced strong revenue growth while Inliner
revenues were relatively flat.
- Unallocated corporate expenses reflected in our Adjusted EBITDA
calculation continued to decline, benefiting from Layne's overall
cost reduction efforts, and were $7.0
million in Q1 FY 2017 compared to $9.5 million in Q1 FY 2016.
- As of April 30, 2016, cash and
cash equivalents were $59.8 million,
and total debt was $159.9
million. Total liquidity, which includes availability
under Layne's credit facility and total cash and cash equivalents,
was $126.1 million at April 30, 2016, compared to $131.7 million at January
31, 2016.
- Total backlog was $316.1 million
at April 30, 2016 compared to
$346.3 million at January 31, 2016 and $380.4 million at April
30, 2015. The decrease in backlog was primarily
within the Heavy Civil division and related to the continuing
strategic shift towards more selective opportunities.
CEO Commentary
Michael J. Caliel, President and
Chief Executive Officer of Layne, commented, "Our first quarter
results reflect our continued progress on several fronts and the
challenges we continue to face in the minerals market.
Notably, Inliner delivered another quarter of strong performance
driven by improved margins and Water Resources generated top line
growth although margins were impacted by some execution issues,
including within the energy business, and increased bad debt
expense. We continue to make meaningful progress in transforming
our Heavy Civil division where we produced positive Adjusted EBITDA
for the first time in more than two years. The ongoing
commodity-related headwinds continue to adversely impact our
Mineral Services business although we benefitted from improved
profitability of our Latin American affiliates.
"We remain focused on reducing costs and rationalizing our asset
base, where appropriate. As part of our ongoing strategy to
reshape our portfolio, we divested our non-core vibration
technology business during the quarter. In addition, we
continue to implement our company-wide business performance
improvement initiative and have taken our next planned step to
focus on sales and operations efficiency improvements within Water
Resources. Our plan is to take advantage of our water
expertise and realigned Water Resources operating structure to
enhance our work processes and improve job execution while also
reducing our cost structure in order to improve overall
profitability and cash flow. Lastly, we have made significant
progress in reducing our corporate overhead. While clearly
there is more work to be done, we expect our overall financial
performance in fiscal 2017 to show improvement over last fiscal
year and for Layne to be profitable in fiscal year 2018."
LAYNE CHRISTENSEN
COMPANY AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED FINANCIAL DATA
|
|
|
|
Three
Months
|
|
|
Ended April
30,
|
|
|
(unaudited)
|
(in thousands, except
per share data)
|
|
2016
|
|
|
2015
|
Revenues
|
|
$
|
159,739
|
|
|
$
|
174,271
|
Cost of revenues
(exclusive of depreciation and amortization shown below)
|
|
|
(130,369)
|
|
|
|
(143,231)
|
Selling, general and
administrative expenses (exclusive of depreciation and amortization shown below)
|
|
|
(27,250)
|
|
|
|
(29,245)
|
Depreciation and
amortization
|
|
|
(6,428)
|
|
|
|
(8,735)
|
Restructuring
costs
|
|
|
(455)
|
|
|
|
(190)
|
Equity in earnings
(losses) of affiliates
|
|
|
1,269
|
|
|
|
(108)
|
Gain on
extinguishment of debt
|
|
|
—
|
|
|
|
4,236
|
Interest
expense
|
|
|
(4,246)
|
|
|
|
(3,852)
|
Other income,
net
|
|
|
150
|
|
|
|
1,041
|
Loss from continuing
operations before income taxes
|
|
|
(7,590)
|
|
|
|
(5,813)
|
Income tax
expense
|
|
|
(1,213)
|
|
|
|
(761)
|
Net loss from
continuing operations
|
|
|
(8,803)
|
|
|
|
(6,574)
|
Net income from
discontinued operations
|
|
|
—
|
|
|
|
16
|
Net loss
|
|
$
|
(8,803)
|
|
|
$
|
(6,558)
|
Earnings per share
information attributable to Layne Christensen
Company
shareholders:
|
|
|
|
|
|
|
|
Loss per share from
continuing operations - basic and diluted
|
|
$
|
(0.45)
|
|
|
$
|
(0.34)
|
Earnings per share
from discontinued operations - basic and diluted
|
|
|
—
|
|
|
|
0.01
|
Loss per share
attributable to Layne Christensen Company - basic and
diluted
|
|
$
|
(0.45)
|
|
|
$
|
(0.33)
|
Weighted average
shares outstanding - basic and dilutive
|
|
|
19,773
|
|
|
|
19,633
|
|
|
As of
|
|
|
|
April 30,
|
|
|
January
31,
|
|
(in
thousands)
|
|
2016
|
|
|
2016
|
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
Balance Sheet
Data
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
59,849
|
|
|
$
|
65,569
|
|
Working
capital
|
|
|
128,075
|
|
|
|
131,280
|
|
Adjusted Working Capital (excluding cash and cash
equivalents)
|
|
|
68,226
|
|
|
|
65,711
|
|
Total
assets
|
|
|
483,067
|
|
|
|
488,657
|
|
Total
debt
|
|
|
159,862
|
|
|
|
159,074
|
|
Total Layne
Christensen Company equity
|
|
|
122,651
|
|
|
|
128,658
|
|
Common shares
issued and outstanding
|
|
|
19,803
|
|
|
|
19,789
|
|
Summary of Operating Segment Data
The following table summarizes financial information for the
Company's operating segments. A discussion of the results for Q1 FY
2017 for each segment versus Q1 FY 2016 follows the table.
|
|
Three
Months
|
|
|
|
Ended April
30,
|
|
(in
thousands)
|
|
2016
|
|
|
2015
|
|
Revenues
|
|
|
|
|
|
|
|
|
Water
Resources
|
|
$
|
61,950
|
|
|
$
|
58,152
|
|
Inliner
|
|
|
47,534
|
|
|
|
48,020
|
|
Heavy Civil
|
|
|
39,093
|
|
|
|
45,083
|
|
Mineral
Services
|
|
|
11,255
|
|
|
|
23,524
|
|
Intersegment
Eliminations
|
|
|
(93)
|
|
|
|
(508)
|
|
Total
revenues
|
|
$
|
159,739
|
|
|
$
|
174,271
|
|
Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
Water
Resources
|
|
$
|
4,097
|
|
|
$
|
6,573
|
|
Inliner
|
|
|
7,218
|
|
|
|
6,981
|
|
Heavy Civil
|
|
|
131
|
|
|
|
(1,276)
|
|
Mineral
Services
|
|
|
51
|
|
|
|
2,009
|
|
Unallocated corporate
expenses
|
|
|
(7,039)
|
|
|
|
(9,520)
|
|
Total Adjusted
EBITDA
|
|
$
|
4,458
|
|
|
$
|
4,767
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Water
Resources
|
|
|
|
|
|
Three
Months
|
|
|
|
Ended April
30,
|
|
(in
thousands)
|
|
2016
|
|
|
2015
|
|
Revenues
|
|
$
|
61,950
|
|
|
$
|
58,152
|
|
Adjusted
EBITDA
|
|
|
4,097
|
|
|
|
6,573
|
|
Adjusted EBITDA as a
percentage of revenues
|
|
|
6.6
|
%
|
|
|
11.3
|
%
|
For the three months ended April 30,
2016, Water Resources' revenues increased by 7% compared to
the prior year period. The revenue growth was driven mainly by the
increase in repair and installation projects and increased activity
in the injection well market, partially offset by decline in water
management services within the energy sector.
Adjusted EBITDA for the three months ended April 30, 2016 decreased by $2.5 million due primarily to the write-off of
uncollectible accounts receivable amounting to $1.0 million during the current quarter, as well
as operating losses in our water management services within the
energy sector. Additionally, we encountered execution issues
with certain projects and reduced margins on drilling projects in
the western region as a consequence of increased competition.
Backlog was $91.7 million at
April 30, 2016 compared to
$97.6 million at January 31, 2016 and $110.0 million at April
30, 2015.
Inliner
|
|
|
|
|
|
Three
Months
|
|
|
|
Ended April
30,
|
|
(in
thousands)
|
|
2016
|
|
|
2015
|
|
Revenues
|
|
$
|
47,534
|
|
|
$
|
48,020
|
|
Adjusted
EBITDA
|
|
|
7,218
|
|
|
|
6,981
|
|
Adjusted EBITDA as a
percentage of revenues
|
|
|
15.2
|
%
|
|
|
14.5
|
%
|
For the three months ended April 30,
2016, Inliner revenues decreased slightly by 1% versus the
three months ended April 30, 2015,
primarily related to product mix of rehabilitation work.
Adjusted EBITDA for the three months ended April 30, 2016 increased by $0.2 million due primarily to improved project
execution and reduced selling, general and administrative
expenses.
Backlog was $121.8 million at
April 30, 2016 compared to
$113.6 million at January 31, 2016 and $120.1 million at April
30, 2015.
Heavy
Civil
|
|
|
|
|
|
Three
Months
|
|
|
|
Ended April
30,
|
|
(in
thousands)
|
|
2016
|
|
|
2015
|
|
Revenues
|
|
$
|
39,093
|
|
|
$
|
45,083
|
|
Adjusted
EBITDA
|
|
|
131
|
|
|
|
(1,276)
|
|
Adjusted EBITDA as a
percentage of revenues
|
|
|
0.3%
|
|
|
|
(2.8%)
|
|
For the three months ended April 30,
2016, Heavy Civil revenues decreased by 13% versus the three
months ended April 30, 2015 as a
result of our continuing strategic shift towards more selective
opportunities, including negotiated and alternative delivery
contracts and less emphasis on traditional fixed-price
contracts. These negotiated and alternative delivery
contracts are typically lower risk and are contributing to improved
margins. Additionally, delays in the start of certain projects
contributed to reduced revenues during the current quarter.
Adjusted EBITDA of $0.1 million
for the three months ended April 30,
2016 improved relative to the three months ended
April 30, 2015 of ($1.3) million, as a result of continued progress
in completing certain fixed-price troubled contracts and improved
profitability related to the strategic shift towards more selective
opportunities mentioned above.
Backlog was $102.6 million at
April 30, 2016 compared to
$135.1 million at January 31, 2016 and $150.3 million at April
30, 2015.
Mineral
Services
|
|
|
|
|
|
Three
Months
|
|
|
|
Ended April
30,
|
|
(in
thousands)
|
|
2016
|
|
|
2015
|
|
Revenues
|
|
$
|
11,255
|
|
|
$
|
23,524
|
|
Adjusted
EBITDA
|
|
|
51
|
|
|
|
2,009
|
|
Adjusted EBITDA as a
percentage of revenues
|
|
|
0.5
|
%
|
|
|
8.5
|
%
|
Equity in earnings
(losses) of affiliates
|
|
|
1,269
|
|
|
|
(108)
|
|
For the three months ended April 30,
2016, Mineral Services' revenues decreased by 52% versus the
three months ended April 30, 2015
primarily due to lower activity levels as a result of the continued
softness in global commodity prices. Furthermore, our
decision to exit from our operations in Africa and Australia during FY2016 contributed to
approximately $4.0 million in revenue
decline compared to Q1 FY 2015.
Adjusted EBITDA for the three months ended April 30, 2016 decreased by $2.0 million as a consequence of lower activity
levels. Included in these results are wind-down costs of
$1.1 million during the current
quarter related to our exit from Africa and Australia, partially offset by a tax audit
settlement credit of $0.7
million.
Equity in earnings (losses) of affiliates improved during the
three months ended April 30, 2016,
due to improved profitability in our Latin American
affiliates.
Unallocated Corporate Expenses
Unallocated corporate expenses reflected in our Adjusted EBITDA
calculation were $7.0 million for Q1
FY 2017 compared to $9.5 million in
Q1 FY 2016. The improvement was primarily due to reductions
in legal and professional fees, consulting expenses and
compensation expenses.
Use of Non- GAAP Financial Information
We use Adjusted EBITDA to assess performance which is not
defined in generally accepted accounting principles (GAAP).
Adjusted EBITDA represents income or loss from continuing
operations before interest, taxes, depreciation and amortization,
non-cash share-based compensation, equity in earnings or losses
from affiliates, certain non-recurring items such as restructuring
costs, gain on extinguishment of debt, and certain other gains or
losses, plus dividends received from affiliates. We believe that
the presentation of Adjusted EBITDA included in this report helps
us understand and evaluate our core operating performance and
trends and provides useful information to both management and
investors. In addition, we use Adjusted EBITDA as a factor in
incentive compensation decisions and our credit facility agreement
uses measures similar to Adjusted EBITDA to measure compliance with
certain covenants. Adjusted EBITDA should be considered in addition
to results prepared in accordance with GAAP, but should not be
considered a substitute for, or superior to, GAAP results.
The following table reconciles Adjusted EBITDA to income (loss)
from continuing operations before income taxes, which we consider
to be the most directly comparable GAAP financial measure to
Adjusted EBITDA.
Three Months Ended
April 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unallocated
|
|
|
|
|
|
|
|
|
|
|
|
Water
|
|
|
|
|
|
|
Heavy
|
|
|
Mineral
|
|
|
Corporate
|
|
|
Other
Items/
|
|
|
|
|
|
|
(in
thousands)
|
|
Resources
|
|
|
Inliner
|
|
|
Civil
|
|
|
Services
|
|
|
Expenses
|
|
|
Eliminations
|
|
|
|
Total
|
|
Revenues
|
|
$
|
61,950
|
|
|
$
|
47,534
|
|
|
$
|
39,093
|
|
|
$
|
11,255
|
|
|
$
|
—
|
|
|
$
|
(93)
|
|
|
|
$
|
159,739
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations before income taxes
|
|
$
|
300
|
|
|
$
|
5,645
|
|
|
$
|
(782)
|
|
|
$
|
(347)
|
|
|
$
|
(8,160)
|
|
|
$
|
(4,246)
|
|
|
|
$
|
(7,590)
|
|
Interest
expense
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
4,246
|
|
|
|
|
4,246
|
|
Depreciation expense
and amortization
|
|
|
3,153
|
|
|
|
1,254
|
|
|
|
469
|
|
|
|
1,219
|
|
|
|
333
|
|
|
|
—
|
|
|
|
|
6,428
|
|
Non-cash share-based
compensation
|
|
|
204
|
|
|
|
251
|
|
|
|
37
|
|
|
|
49
|
|
|
|
706
|
|
|
|
—
|
|
|
|
|
1,247
|
|
Equity in (earnings)
losses of affiliates
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(1,269)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
(1,269)
|
|
Restructuring
costs
|
|
|
—
|
|
|
|
—
|
|
|
|
391
|
|
|
|
64
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
455
|
|
Other (income)
expense, net
|
|
|
440
|
|
|
|
68
|
|
|
|
16
|
|
|
|
(756)
|
|
|
|
82
|
|
|
|
—
|
|
|
|
|
(150)
|
|
Dividends received
from affiliates
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,091
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
1,091
|
|
Adjusted
EBITDA
|
|
$
|
4,097
|
|
|
$
|
7,218
|
|
|
$
|
131
|
|
|
$
|
51
|
|
|
$
|
(7,039)
|
|
|
$
|
—
|
|
|
|
$
|
4,458
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unallocated
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
April 30, 2015
|
|
Water
|
|
|
|
|
|
|
Heavy
|
|
|
Mineral
|
|
|
Corporate
|
|
|
Other
Items/
|
|
|
|
|
|
|
(in
thousands)
|
|
Resources
|
|
|
Inliner
|
|
|
Civil
|
|
|
Services
|
|
|
Expenses
|
|
|
Eliminations
|
|
|
|
Total
|
|
Revenues
|
|
$
|
58,152
|
|
|
$
|
48,020
|
|
|
$
|
45,083
|
|
|
$
|
23,524
|
|
|
$
|
—
|
|
|
$
|
(508)
|
|
|
|
$
|
174,271
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations before income taxes
|
|
$
|
2,891
|
|
|
$
|
5,242
|
|
|
$
|
(2,023)
|
|
|
$
|
(2,552)
|
|
|
$
|
(9,755)
|
|
|
$
|
384
|
|
|
|
$
|
(5,813)
|
|
Interest
expense
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
3,852
|
|
|
|
|
3,852
|
|
Depreciation expense
and amortization
|
|
|
3,450
|
|
|
|
997
|
|
|
|
695
|
|
|
|
3,101
|
|
|
|
492
|
|
|
|
—
|
|
|
|
|
8,735
|
|
Non-cash share-based
compensation
|
|
|
149
|
|
|
|
539
|
|
|
|
178
|
|
|
|
122
|
|
|
|
621
|
|
|
|
—
|
|
|
|
|
1,609
|
|
Equity in (earnings)
losses of affiliates
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
108
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
108
|
|
Restructuring
costs
|
|
|
63
|
|
|
|
19
|
|
|
|
41
|
|
|
|
21
|
|
|
|
46
|
|
|
|
—
|
|
|
|
|
190
|
|
Gain on
extinguishment of debt
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(4,236)
|
|
|
|
|
(4,236)
|
|
Other (income)
expense, net
|
|
|
20
|
|
|
|
184
|
|
|
|
(167)
|
|
|
|
(154)
|
|
|
|
(924)
|
|
|
|
—
|
|
|
|
|
(1,041)
|
|
Dividends received
from affiliates
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,363
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
1,363
|
|
Adjusted
EBITDA
|
|
$
|
6,573
|
|
|
$
|
6,981
|
|
|
$
|
(1,276)
|
|
|
$
|
2,009
|
|
|
$
|
(9,520)
|
|
|
$
|
—
|
|
|
|
$
|
4,767
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
We also use Adjusted Working Capital, which is not determined in
accordance with GAAP, as an indicator of operating efficiency and
our ability to manage our receivables and inventory. Adjusted
Working Capital excludes cash and cash equivalents from the
traditional measure of working capital.
Conference Call
Layne Christensen will conduct a
conference call at 9:00 AM ET /
8:00 AM CT Tuesday, June 7, 2016, to
discuss these results and related matters. Interested parties may
participate in the call by dialing 1-877-407-0672 (Domestic) or
1-412-902-0003 (International). The conference call will also be
broadcast live via the Investor Relations section of Layne's
website at www.layne.com. To listen to the live call, please go to
the website at least 15 minutes early to register, download and
install any necessary audio software. If you are unable to
listen live, the conference call will be archived on the website
for approximately 90 days. A telephonic replay of the conference
call will be available through June 14,
2016 and may be accessed by calling 1-877-660-6853
(Domestic) or 1-201-612-7415 (International) and using passcode
13637329#.
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," "intend," "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: prevailing prices for various
commodities, unanticipated slowdowns in the Company's major
markets, the availability of credit, the risks and uncertainties
normally incident to the construction industry, the impact of
competition, the effectiveness of operational changes expected to
increase efficiency and productivity, worldwide economic and
political conditions and foreign currency fluctuations that may
affect worldwide results of operations. 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.
About Layne
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.
Contacts
J. Michael Anderson
Chief Financial Officer
281-475-2694
michael.anderson@layne.com
Dennard Lascar Associates
Jack Lascar
713-529-6600
jlascar@dennardlascar.com
[LAYN-F]
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/layne-christensen-reports-first-quarter-fiscal-2017-results-300280412.html
SOURCE Layne Christensen Company