THE WOODLANDS, Texas,
June 8, 2017 /PRNewswire/
-- Layne Christensen Company (NASDAQ: LAYN) ("Layne" or
the "Company") today announced financial and operating results for
the fiscal 2018 first quarter (Q1 FY 2018) ended April 30, 2017.
Q1 FY 2018 Financial Highlights
- Financial performance in Q1 FY 2018 improved significantly
compared to the prior year period as a result of continuing strong
performance at Inliner, further SG&A cost reductions and a
marked improvement in earnings at Mineral Services.
- The Water Resources segment produced significant sequential
improvement from the fiscal 2017 fourth quarter, generating higher
revenues and positive Adjusted EBITDA.
- On April 30, 2017, Layne sold its
Heavy Civil business receiving cash consideration of $5.8 million, which included an estimate of the
business' working capital at closing. Financial results for
the first quarter reflect the Heavy Civil business as discontinued
operations for both current and historical
periods.
- Reported net loss from continuing operations for Q1 FY 2018 was
($3.4) million, or ($0.17) per share, compared to ($8.0) million, or ($0.41) per share, for the fiscal 2017 first
quarter (Q1 FY 2017). The net loss from discontinued
operations for Q1 FY 2018 was ($19.5)
million, which included ($16.7)
million related to the loss on the sale of the Heavy Civil
business.
- Total Adjusted EBITDA (a non-GAAP financial measure as defined
below) increased to $9.6 million in
Q1 FY 2018 compared to $4.3 million
in Q1 FY 2017.
- Unallocated corporate expenses reflected in Adjusted EBITDA
continued to decline to $4.0 million
in Q1 FY 2018 compared to $7.0
million in Q1 FY 2017.
- As of April 30, 2017, cash and
cash equivalents were $54.6 million,
and total debt was $163.2
million. Total liquidity, which includes availability
under Layne's credit facility and total cash and cash equivalents,
was $121.5 million at April 30, 2017, compared to $141.3 million at January
31, 2017.
- Total backlog was $172.2 million
at April 30, 2017 compared to
$166.6 million at January 31, 2017 and $213.5 million at April
30, 2016.
- Layne announced its new energy infrastructure business and the
construction of a new high-capacity water pipeline and
infrastructure system in the Delaware Basin of West Texas which is expected to begin
generating positive earnings and cash flow in the fiscal 2018 third
quarter.
CEO Commentary
Michael J. Caliel, President and
Chief Executive Officer of Layne, commented, "We are encouraged
with the significant financial improvement we delivered in the
first quarter that was led by continuing strength at Inliner,
further reductions in SG&A costs, and significantly improved
activity and profitability at Mineral Services. Further, the
improvements underway at Water Resources to stem project losses we
incurred in the last half of fiscal year 2017 led to meaningful
sequential improvement for the division.
"The completion of the sale of our Heavy Civil business will
allow us to concentrate on growing our core water infrastructure
businesses, while reducing our overall risk exposure to large
construction projects.
"We are pleased and excited about our new energy infrastructure
business and the construction of our new high-capacity water
pipeline and infrastructure system in the Delaware Basin of West Texas. This
investment is part of our longer-term strategy to leverage our
substantial know-how in providing water infrastructure solutions to
our clients and is expected to build on our core water and energy
expertise, and broaden our diverse water customer base.
"Our objectives for fiscal 2018 are to significantly improve
profitability at Water Resources, leverage our strengths at Inliner
to further grow the business, take advantage of the improved levels
of activity in the Americas for Minerals Services, further reduce
our cost base and significantly grow our energy infrastructure
business. While clearly there is more work to be done, we expect
our overall financial performance in fiscal 2018 to show material
improvement over last fiscal year and are confident that our
efforts will be successful."
LAYNE CHRISTENSEN
COMPANY AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED FINANCIAL DATA
|
|
|
|
Three
Months
|
|
|
|
|
Ended April
30,
|
|
|
|
|
(unaudited)
|
|
|
(in thousands, except
per share data)
|
|
2017
|
|
|
2016
|
|
|
Revenues
|
|
$
|
111,507
|
|
|
$
|
120,646
|
|
|
Cost of revenues
(exclusive of depreciation and amortization charges shown below)
|
|
|
(86,283)
|
|
|
|
(97,062)
|
|
|
Selling, general and
administrative expenses (exclusive of depreciation and amortization charges shown
below)
|
|
|
(17,640)
|
|
|
|
(21,559)
|
|
|
Depreciation and
amortization
|
|
|
(6,484)
|
|
|
|
(5,958)
|
|
|
Gain on sale of fixed
assets
|
|
|
612
|
|
|
|
135
|
|
|
Equity in earnings of
affiliates
|
|
|
711
|
|
|
|
1,269
|
|
|
Restructuring
costs
|
|
|
(428)
|
|
|
|
(64)
|
|
|
Interest
expense
|
|
|
(4,200)
|
|
|
|
(4,246)
|
|
|
Other (expense)
income, net
|
|
|
(163)
|
|
|
|
31
|
|
|
Loss from continuing
operations before income taxes
|
|
|
(2,368)
|
|
|
|
(6,808)
|
|
|
Income tax
expense
|
|
|
(1,050)
|
|
|
|
(1,213)
|
|
|
Net loss from
continuing operations
|
|
|
(3,418)
|
|
|
|
(8,021)
|
|
|
Net loss from
discontinued operations
|
|
|
(19,482)
|
|
|
|
(782)
|
|
|
Net loss
|
|
$
|
(22,900)
|
|
|
$
|
(8,803)
|
|
|
Loss per share
information:
|
|
|
|
|
|
|
|
|
|
Loss per share from
continuing operations - basic and diluted
|
|
$
|
(0.17)
|
|
|
$
|
(0.41)
|
|
|
Loss per share from
discontinued operations - basic and diluted
|
|
|
(0.98)
|
|
|
|
(0.04)
|
|
|
Loss per share - basic
and diluted
|
|
$
|
(1.15)
|
|
|
$
|
(0.45)
|
|
|
Weighted average
shares outstanding - basic and dilutive
|
|
|
19,796
|
|
|
|
19,773
|
|
|
|
|
|
|
As of
|
|
|
|
April 30,
|
|
|
January
31,
|
|
(in
thousands)
|
|
2017
|
|
|
2017
|
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
Balance Sheet
Data
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
54,598
|
|
|
$
|
69,000
|
|
Working
capital
|
|
|
85,777
|
|
|
|
105,545
|
|
Adjusted
Working Capital (excluding cash and cash equivalents)
|
|
|
31,179
|
|
|
|
36,545
|
|
Total
assets
|
|
|
392,715
|
|
|
|
436,151
|
|
Total
debt
|
|
|
163,239
|
|
|
|
162,355
|
|
Total Layne
Christensen Company equity
|
|
|
59,646
|
|
|
|
82,220
|
|
Common shares
issued and outstanding
|
|
|
19,805
|
|
|
|
19,805
|
|
|
|
|
|
|
|
Summary of Operating Segment Data
The following table summarizes financial information for Layne's
operating segments. A discussion of the results for Q1 FY 2018 for
each segment compared to the prior year period follows the
table.
|
|
Three
Months
|
|
|
|
Ended April
30,
|
|
(in
thousands)
|
|
2017
|
|
|
2016
|
|
Revenues
|
|
|
|
|
|
|
|
|
Water
Resources
|
|
$
|
42,143
|
|
|
$
|
61,950
|
|
Inliner
|
|
|
47,408
|
|
|
|
47,534
|
|
Mineral
Services
|
|
|
21,956
|
|
|
|
11,255
|
|
Intersegment
eliminations
|
|
|
—
|
|
|
|
(93)
|
|
Total
revenues
|
|
$
|
111,507
|
|
|
$
|
120,646
|
|
Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
Water
Resources
|
|
$
|
469
|
|
|
$
|
4,097
|
|
Inliner
|
|
|
8,073
|
|
|
|
7,218
|
|
Mineral
Services
|
|
|
5,026
|
|
|
|
51
|
|
Unallocated corporate
expenses
|
|
|
(3,960)
|
|
|
|
(7,039)
|
|
Total Adjusted
EBITDA
|
|
$
|
9,608
|
|
|
$
|
4,327
|
|
|
|
|
|
|
|
|
|
|
Water Resources
|
|
Three
Months
|
|
|
|
Ended April
30,
|
|
(in
thousands)
|
|
2017
|
|
|
2016
|
|
Revenues
|
|
$
|
42,143
|
|
|
$
|
61,950
|
|
Adjusted
EBITDA
|
|
|
469
|
|
|
|
4,097
|
|
Adjusted EBITDA as a
percentage of revenues
|
|
|
1.1
|
%
|
|
|
6.6
|
%
|
Revenues for Water Resources decreased during Q1 FY 2018
primarily due to reduced activity in agricultural drilling projects
in the western U.S. stemming from increased precipitation in the
region.
The decrease in Adjusted EBITDA for the Water Resources segment
for Q1 FY 2018 was primarily due to reduced drilling activity in
the western U.S.
Backlog was $62.3 million at
April 30, 2017 compared to
$49.2 million at January 31, 2017 and $91.7
million at April 30,
2016. Backlog increased from Q4 FY 2017 to Q1 FY 2018 as a
result of increased bookings in both water well drilling and repair
and maintenance work.
Inliner
|
|
Three
Months
|
|
|
|
Ended April
30,
|
|
(in
thousands)
|
|
2017
|
|
|
2016
|
|
Revenues
|
|
$
|
47,408
|
|
|
$
|
47,534
|
|
Adjusted
EBITDA
|
|
|
8,073
|
|
|
|
7,218
|
|
Adjusted EBITDA as a
percentage of revenues
|
|
|
17.0
|
%
|
|
|
15.2
|
%
|
Revenues for Inliner during Q1 FY 2018 were relatively flat as
compared to the prior year period.
The increase in Adjusted EBITDA for the Inliner segment as
compared to the prior year period reflects improved results across
most operating regions. The increase in Adjusted EBITDA for
the Inliner segment as a percentage of revenues was primarily
attributable to a higher mix of self-performed work and increased
crew efficiency in the current quarter compared to the prior year
period.
Backlog was $109.9 million at
April 30, 2017 compared to
$117.4 million at January 31, 2017 and $121.8 million at April
30, 2016.
Mineral Services
|
|
Three
Months
|
|
|
|
Ended April
30,
|
|
(in
thousands)
|
|
2017
|
|
|
2016
|
|
Revenues
|
|
$
|
21,956
|
|
|
$
|
11,255
|
|
Adjusted
EBITDA
|
|
|
5,026
|
|
|
|
51
|
|
Adjusted EBITDA as a
percentage of revenues
|
|
|
22.9
|
%
|
|
|
0.5
|
%
|
Revenues for Mineral Services were almost double the prior year
period due to increased activity in the western U.S., Mexico and Brazil.
The increase in Adjusted EBITDA for the Mineral Services segment
for Q1 FY 2018 was primarily due to significantly increased
activity and profitability in the western U.S. and Mexico, compared to the prior year period.
Unallocated Corporate Expenses
Unallocated corporate expenses reflected in Adjusted EBITDA were
$4.0 million for the Q1 FY 2018,
compared to $7.0 million for the same
period last year. The improvement was primarily due to a reduction
in legal and professional fees, consulting fees and compensation
related expenses.
Use of Non-GAAP Financial Information
Layne defines Total Adjusted EBITDA, a non-GAAP financial
measure, as the total of Adjusted EBITDA for all segments plus
unallocated corporate expenses and other items/eliminations.
Layne's management evaluates segment performance based primarily on
the segment's revenues and Adjusted EBITDA, among other
factors. Layne's measure of segment Adjusted EBITDA, which
may not be comparable to other companies' measure of Adjusted
EBITDA, represents the segment's shares of income or loss from
continuing operations before interest, taxes, depreciation and
amortization, gain on sale of fixed assets, non-cash share-based
compensation, equity in earnings or losses from affiliates, certain
non-recurring items such as restructuring costs, and certain other
gains or losses, plus dividends received from affiliates. Total
Adjusted EBITDA is included as a complement to results provided in
accordance with generally accepted accounting principles (GAAP)
because management believes this non-GAAP financial measure helps
us understand and evaluate our operating performance and trends and
provides useful information to both management and investors.
In addition, we use Total Adjusted EBITDA as a factor in incentive
compensation decisions and our credit facility agreement uses
measures similar to Total Adjusted EBITDA to measure compliance
with certain covenants.
The following table reconciles Total Adjusted EBITDA to income
(loss) from continuing operations before income taxes, which Layne
consider to be the most directly comparable GAAP financial measure
to Total Adjusted EBITDA.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unallocated
|
|
|
|
|
|
|
|
|
|
Three Months Ended
April 30, 2017
|
|
Water
|
|
|
|
|
|
|
Mineral
|
|
|
Corporate
|
|
|
Other
Items/
|
|
|
|
|
|
(in
thousands)
|
|
Resources
|
|
|
Inliner
|
|
|
Services
|
|
|
Expenses
|
|
|
Eliminations
|
|
|
Total
|
|
Revenues
|
|
$
|
42,143
|
|
|
$
|
47,408
|
|
|
$
|
21,956
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
111,507
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income
from continuing operations before income taxes
|
|
$
|
(2,411)
|
|
|
$
|
6,462
|
|
|
$
|
2,820
|
|
|
$
|
(5,039)
|
|
|
$
|
(4,200)
|
|
|
$
|
(2,368)
|
|
Interest
expense
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
4,200
|
|
|
|
4,200
|
|
Depreciation expense
and amortization
|
|
|
3,057
|
|
|
|
1,517
|
|
|
|
1,686
|
|
|
|
224
|
|
|
|
—
|
|
|
|
6,484
|
|
Gain on sale of fixed
assets
|
|
|
(374)
|
|
|
|
—
|
|
|
|
(238)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(612)
|
|
Non-cash equity-based
compensation
|
|
|
85
|
|
|
|
56
|
|
|
|
60
|
|
|
|
818
|
|
|
|
—
|
|
|
|
1,019
|
|
Equity in earnings of
affiliates
|
|
|
—
|
|
|
|
—
|
|
|
|
(711)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(711)
|
|
Restructuring
costs
|
|
|
14
|
|
|
|
3
|
|
|
|
389
|
|
|
|
22
|
|
|
|
—
|
|
|
|
428
|
|
Other expense,
net
|
|
|
98
|
|
|
|
35
|
|
|
|
15
|
|
|
|
15
|
|
|
|
—
|
|
|
|
163
|
|
Dividends received
from affiliates
|
|
|
—
|
|
|
|
—
|
|
|
|
1,005
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,005
|
|
Adjusted
EBITDA
|
|
$
|
469
|
|
|
$
|
8,073
|
|
|
$
|
5,026
|
|
|
$
|
(3,960)
|
|
|
$
|
—
|
|
|
$
|
9,608
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unallocated
|
|
|
|
|
|
|
|
|
|
Three Months Ended
April 30, 2016
|
|
Water
|
|
|
|
|
|
|
Mineral
|
|
|
Corporate
|
|
|
Other
Items/
|
|
|
|
|
|
(in
thousands)
|
|
Resources
|
|
|
Inliner
|
|
|
Services
|
|
|
Expenses
|
|
|
Eliminations
|
|
|
Total
|
|
Revenues
|
|
$
|
61,950
|
|
|
$
|
47,534
|
|
|
$
|
11,255
|
|
|
$
|
—
|
|
|
$
|
(93)
|
|
|
$
|
120,646
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations before income taxes
|
|
$
|
300
|
|
|
$
|
5,645
|
|
|
$
|
(347)
|
|
|
$
|
(8,160)
|
|
|
$
|
(4,246)
|
|
|
$
|
(6,808)
|
|
Interest
expense
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
4,246
|
|
|
|
4,246
|
|
Depreciation expense
and amortization
|
|
|
3,153
|
|
|
|
1,254
|
|
|
|
1,219
|
|
|
|
332
|
|
|
|
—
|
|
|
|
5,958
|
|
Loss (gain) on sale
of fixed assets
|
|
|
359
|
|
|
|
7
|
|
|
|
(499)
|
|
|
|
(2)
|
|
|
|
—
|
|
|
|
(135)
|
|
Non-cash equity-based
compensation
|
|
|
204
|
|
|
|
251
|
|
|
|
49
|
|
|
|
707
|
|
|
|
—
|
|
|
|
1,211
|
|
Equity in earnings of
affiliates
|
|
|
—
|
|
|
|
—
|
|
|
|
(1,269)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(1,269)
|
|
Restructuring
costs
|
|
|
—
|
|
|
|
—
|
|
|
|
64
|
|
|
|
—
|
|
|
|
—
|
|
|
|
64
|
|
Other expense
(income), net
|
|
|
81
|
|
|
|
61
|
|
|
|
(257)
|
|
|
|
84
|
|
|
|
—
|
|
|
|
(31)
|
|
Dividends received
from affiliates
|
|
|
—
|
|
|
|
—
|
|
|
|
1,091
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,091
|
|
Adjusted
EBITDA
|
|
$
|
4,097
|
|
|
$
|
7,218
|
|
|
$
|
51
|
|
|
$
|
(7,039)
|
|
|
$
|
—
|
|
|
$
|
4,327
|
|
Conference Call
Layne Christensen will conduct a
conference call at 9:00 AM ET /
8:00 AM CT Friday, June 9, 2017, 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 16,
2017 and may be accessed by calling 1-877-660-6853
(Domestic) or 1-201-612-7415 (International) and using passcode
13662609#.
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: estimates and assumptions regarding
Layne's strategic direction and business strategy, the timely and
effective execution of Layne's strategy for Water Resources, the
extent and timing of a recovery in the mining industry, prevailing
prices for various commodities, longer term weather patterns,
unanticipated slowdowns in Layne's major markets, the availability
of credit, the risks and uncertainties normally incident to Layne's
industries of operation, the impact of competition, the effect of
any deregulation or other initiatives by the Trump Administration,
the effectiveness of operational changes expected to reduce
operating expenses and increase efficiency, productivity and
profitability, the satisfaction of all of the post-closing
conditions for the sale of Layne's Heavy Civil business in a timely
manner, the availability of equity or debt capital needed for the
business, including the refinancing of Layne's existing
indebtedness as it matures, worldwide economic and political
conditions and foreign currency fluctuations that may affect
Layne's 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 Layne
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 water management, infrastructure services and
drilling company, providing responsible solutions to the world of
essential natural resources—water, minerals 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-fiscal-2018-first-quarter-results-300471379.html
SOURCE Layne Christensen Company