THE WOODLANDS, Texas,
June 5, 2018 /PRNewswire/
-- Layne Christensen Company (NASDAQ: LAYN) ("Layne" or
the "Company") today announced financial and operating results for
the fiscal 2019 first quarter (Q1 FY 2019) ended April 30, 2018.
Q1 FY 2019 Financial Highlights
- Net income from continuing operations for Q1 FY 2019 was
$2.9 million, or $0.14 per diluted share, compared to net loss of
($4.0) million, or ($0.20) per diluted share, for the fiscal 2018
first quarter (Q1 FY 2018) ended April 30,
2017. Net income for the Q1 FY2019 period included
$4.6 million in gains on asset sales,
primarily within our Water Resources division, as well as
$1.3 million in restructuring
expenses related to our pending merger with Granite Construction
Incorporated.
- Total Adjusted EBITDA (a non-GAAP financial measure as defined
below) increased to $12.6 million in
Q1 FY 2019 compared to $9.0 million
in Q1 FY 2018.
- As of April 30, 2018, cash and
cash equivalents were $17.8 million,
and total debt was $167.0 million.
Total liquidity, which includes availability under Layne's credit
facility and total cash and cash equivalents, was $93.2 million at April 30,
2018, compared to $107.5
million at January 31, 2018.
The decrease in total liquidity is primarily due to seasonal
working capital increases.
- Total backlog was $163.1 million
at April 30, 2018 compared to
$178.6 million at January 31, 2018 and $172.2 million at April
30, 2017.
- On February 13, 2018, Layne
entered into a definitive agreement whereby Granite Construction
Incorporated will acquire all of the outstanding shares of Layne
with each Layne stockholder receiving 0.27 shares of Granite stock
for each share of Layne stock. A special meeting of Layne
shareholders to approve the transaction is scheduled for
June 13, 2018.
CEO Commentary
Michael J. Caliel, President and
Chief Executive Officer of Layne, commented, "Our first quarter
results were improved over the prior year period and in line with
our expectations. We are taking final steps towards a timely
closing of the Granite Construction Incorporated merger
transaction. By merging with Granite, Layne's stockholders are
expected to meaningfully share in the upside opportunities of a
combined company with greater financial resources to invest in
growth initiatives and a more diversified, expanded national
platform of businesses that is expected to be positioned as a
leader across both the transportation and water infrastructure
markets."
LAYNE CHRISTENSEN
COMPANY AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED FINANCIAL DATA
|
|
|
|
Three
Months
|
|
|
Ended April
30,
|
|
|
(unaudited)
|
(in thousands, except
per share data)
|
|
2018
|
|
2017(1)
|
Revenues
|
|
$
|
114,551
|
|
$
|
110,913
|
Cost of revenues
(exclusive of depreciation and amortization, shown below)
|
|
|
(86,026)
|
|
|
(86,250)
|
Selling, general and
administrative expenses (exclusive of depreciation and amortization shown below)
|
|
|
(17,120)
|
|
|
(17,640)
|
Depreciation and
amortization
|
|
|
(6,763)
|
|
|
(6,484)
|
Gain on sale of fixed
assets
|
|
|
4,609
|
|
|
612
|
Equity in earnings of
affiliates
|
|
|
1,714
|
|
|
711
|
Restructuring
costs
|
|
|
(2,806)
|
|
|
(428)
|
Interest
expense
|
|
|
(4,408)
|
|
|
(4,200)
|
Other income
(expense), net
|
|
|
99
|
|
|
(163)
|
Income (loss) from
continuing operations before income taxes
|
|
|
3,850
|
|
|
(2,929)
|
Income tax
expense
|
|
|
(970)
|
|
|
(1,050)
|
Net income (loss)
from continuing operations
|
|
|
2,880
|
|
|
(3,979)
|
Net loss from
discontinued operations, net of tax
|
|
|
(175)
|
|
|
(19,482)
|
Net income
(loss)
|
|
$
|
2,705
|
|
$
|
(23,461)
|
Income (loss) per
share information:
|
|
|
|
|
|
|
Income (loss) per
share from continuing operations - basic
|
|
$
|
0.14
|
|
$
|
(0.20)
|
Loss per share from
discontinued operations - basic
|
|
|
(0.01)
|
|
|
(0.98)
|
Income (loss) per
share - basic
|
|
$
|
0.13
|
|
$
|
(1.18)
|
|
|
|
|
|
|
|
Income (loss) per
share from continuing operations - diluted
|
|
$
|
0.14
|
|
$
|
(0.20)
|
Loss per share from
discontinued operations - diluted
|
|
|
(0.01)
|
|
|
(0.98)
|
Income (loss) per
share - diluted
|
|
$
|
0.13
|
|
$
|
(1.18)
|
Weighted average
shares outstanding - basic
|
|
|
20,122
|
|
|
19,796
|
Weighted average
shares outstanding - dilutive
|
|
|
21,159
|
|
|
19,796
|
|
|
(1)
|
We account for
revenue in accordance with ASC Topic 606, "Revenue from Contracts
with Customers", which we adopted on February 1, 2018. As a result
of the adoption, our prior-period results of operations and backlog
have been recast; the impact to the prior year was not material.
See our Form 10-Q for the three months ended April 30, 2018 for
further details of the impact of the adoption.
|
LAYNE CHRISTENSEN
COMPANY AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED FINANCIAL DATA
|
|
|
|
As of
|
|
|
April 30,
|
|
January
31,
|
(in
thousands)
|
|
2018
|
|
2018
|
|
|
(unaudited)
|
|
(unaudited)
|
Balance Sheet
Data
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
17,805
|
|
$
|
32,041
|
Working
capital
|
|
|
(1,386)
|
|
|
(4,752)
|
Adjusted
working capital (excluding cash and cash equivalents)
|
|
|
(19,191)
|
|
|
(36,793)
|
Total
assets
|
|
|
367,296
|
|
|
368,379
|
Current
maturities of long-term debt
|
|
|
68,036
|
|
|
67,293
|
Total
debt
|
|
|
167,021
|
|
|
166,062
|
Total Layne
Christensen Company equity
|
|
|
59,368
|
|
|
57,462
|
Common shares
issued and outstanding
|
|
|
20,059
|
|
|
19,917
|
Summary of Operating Segment Data
The following are revenues and Adjusted EBITDA for Layne's
operating segments. A discussion of the results for Q1 FY 2019 for
each segment compared to the prior year period follows the
table.
|
|
Three
Months
|
|
|
Ended April
30,
|
(in
thousands)
|
|
2018
|
|
2017(1)
|
Revenues
|
|
|
|
|
|
|
Water
Resources
|
|
$
|
39,777
|
|
$
|
41,890
|
Inliner
|
|
|
48,888
|
|
|
47,067
|
Mineral
Services
|
|
|
25,886
|
|
|
21,956
|
Total
revenues
|
|
$
|
114,551
|
|
$
|
110,913
|
|
|
|
|
|
|
|
Total Adjusted
EBITDA
|
|
|
|
|
|
|
Water
Resources
|
|
$
|
4,469
|
|
$
|
249
|
Inliner
|
|
|
8,155
|
|
|
7,732
|
Mineral
Services
|
|
|
4,811
|
|
|
5,026
|
Unallocated corporate
expenses
|
|
|
(4,804)
|
|
|
(3,960)
|
Total Adjusted
EBITDA
|
|
$
|
12,631
|
|
$
|
9,047
|
|
|
(1)
|
We account for
revenue in accordance with ASC Topic 606, "Revenue from Contracts
with Customers", which we adopted on February 1, 2018. As a result
of the adoption, our prior-period results of operations and backlog
have been recast; the impact to the prior year was not material.
See our Form 10-Q for the three months ended April 30, 2018 for
further details of the impact of the adoption.
|
Water Resources
Revenues for Water Resources decreased 5.0% during Q1 FY 2019
compared to the prior year period primarily due to office closures
during our last fiscal year related to the Water Resources Business
Performance Initiative and lower activity levels in our collector
well business. The decrease was partially offset by revenues from
our Water Midstream business that began operations in Q2 FY
2018.
The increase in Adjusted EBITDA for Q1 FY 2019 primarily
reflects improved project execution, a reduction in general and
administrative costs as a result of the Water Resources Business
Performance Initiative and the contribution of our Water Midstream
business. Our Hermosa pipeline system within our Water Midstream
business generated $1.3 million in
EBITDA in Q1 FY2019, consistent with EBITDA performance in our
fourth quarter of FY2018.
Backlog was $41.4 million at
April 30, 2018 compared to
$47.9 million at January 31, 2018 and $62.3
million at April 30, 2017.
Inliner
Revenues for Inliner increased 3.9% during Q1 FY 2019 compared
to the prior year period primarily due to higher levels of
subcontracted work and increased activity levels for UV liners.
These increases were partially offset by lower activity levels in
the eastern region due to weather delays.
The Q1 FY 2019 increase in Adjusted EBITDA reflects the
increased activity levels discussed above in the current year
quarter compared to the prior year period.
Backlog was $121.7 million at
April 30, 2018 compared to
$130.7 million at January 31, 2018 and $109.9 million at April
30, 2017.
Mineral Services
Revenues for Mineral Services increased by 17.9% for Q1 FY 2019
compared to the prior year period due to increased drilling
activity, primarily in the western U.S. and Brazil.
Adjusted EBITDA decreased slightly compared to Q1 FY 2019
primarily due to lower dividends received from our Latin American
affiliates.
Unallocated Corporate Expenses
Unallocated corporate expenses reflected in Adjusted EBITDA
increased by 21.3% for Q1 FY 2019 compared to the prior year period
due primarily to favorable reserve adjustments during the prior
year period. Unallocated corporate expenses for Q1 FY2019
declined by $0.4 million sequentially
from the fiscal 2018 fourth quarter due to continuing cost
reduction efforts and reduced corporate office headcount.
Use of Non-GAAP Financial Information
Layne's measure of Total Adjusted EBITDA, which may not be
comparable to other companies' measure of Total Adjusted EBITDA,
represents net income (loss) excluding discontinued operations,
taxes, interest, depreciation and amortization, gain or loss on
sale of fixed assets, non-cash equity-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 in understanding and
evaluating Layne's operating performance and trends and may be
useful to investors. Layne management evaluates segment performance
based on the segment's revenues and Adjusted EBITDA, among other
factors. 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 net income (loss) to Total
Adjusted EBITDA:
|
|
Three
Months
|
|
|
Ended April
30,
|
(in
thousands)
|
|
2018
|
|
2017
|
Net income
(loss)
|
|
$
|
2,705
|
|
$
|
(23,461)
|
Items not included in
Total Adjusted EBITDA
|
|
|
|
|
|
|
Net loss from
discontinued operations, net of tax
|
|
|
175
|
|
|
19,482
|
Income tax
expense
|
|
|
970
|
|
|
1,050
|
Interest
expense
|
|
|
4,408
|
|
|
4,200
|
Depreciation expenses
and amortization
|
|
|
6,763
|
|
|
6,484
|
Gain on sale of fixed
assets
|
|
|
(4,609)
|
|
|
(612)
|
Non-cash equity-based
compensation
|
|
|
699
|
|
|
1,019
|
Equity in earnings of
affiliates
|
|
|
(1,714)
|
|
|
(711)
|
Restructuring
costs
|
|
|
2,806
|
|
|
428
|
Other (income)
expense, net
|
|
|
(99)
|
|
|
163
|
Dividends received
from affiliates
|
|
|
527
|
|
|
1,005
|
Total Adjusted
EBITDA
|
|
$
|
12,631
|
|
$
|
9,047
|
Conference Call
Layne Christensen will conduct a
conference call at 9:00 AM ET / 8:00
AM CT on Wednesday, June 6, 2018, 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 10 minutes early to register, download and
install any necessary audio software. If you are unable to
listen live, a telephonic replay of the conference call will be
available through June 20, 2018 and
may be accessed by calling 1-877-660-6853 (Domestic) or
1-201-612-7415 (International) and using passcode 13680391#.
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.
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 that convey the uncertainty of future
events or outcomes. It is uncertain whether any of the events
anticipated by the forward-looking statements will transpire or
occur, or if any of them do, what impact they will have on the
results of operations and financial condition of Layne and Granite
as a combined company or the price of Layne's or Granite's common
stock prior to the proposed merger, or Granite's common stock
following the proposed merger. These forward-looking
statements involve certain risks and uncertainties that could cause
actual results to differ materially from those indicated in such
forward-looking statements, including but not limited to: failure
to obtain stockholder approval in a timely manner or otherwise;
failure to satisfy other closing conditions to the proposed merger;
risks that Layne will not be integrated successfully or that
Granite will not realize estimated cost savings, synergies and
growth or that such benefits may take longer to realize than
expected; failure to realize anticipated benefits from Layne's
operations; risks relating to unanticipated costs of integration;
reductions in customer spending, or a slowdown in customer
payments; unanticipated changes relating to competitive factors in
the industry in which Layne and Granite participate; ability to
hire and retain key personnel; ability to successfully integrate
Layne's businesses; the potential impact of announcement or
consummation of the proposed merger on relationships with third
parties, including customers, employees and competitors; ability to
attract new customers and retain existing customers in the manner
anticipated; reliance on and integration of information technology
systems; changes in legislation or governmental regulations
affecting the companies; international, national or local economic,
social or political conditions that could adversely affect the
companies or their customers; conditions in the credit markets;
risks associated with assumptions the parties make in connection
with the parties' critical accounting estimates and legal
proceedings; estimates and assumptions regarding our strategic
direction and business strategy; the timely and effective execution
of our turnaround strategy for Water Resources; the extent and
timing of a recovery in the mining industry; prevailing prices for
various commodities; the timing and extent of future oil and gas
drilling and production in the Delaware Basin; longer term weather patterns;
unanticipated slowdowns in our major markets, the availability of
credit, the risks and uncertainties normally incident to our
infrastructure services industries, the impact of competition, the
effectiveness of operational changes expected to reduce operating
expenses and increase efficiency, productivity and profitability,
the availability of equity or debt capital needed for our business,
including the refinancing of our existing indebtedness as it
matures, worldwide economic and political conditions and foreign
currency fluctuations that may affect our results of
operations. Additional factors that may cause results to
differ materially from those described in the forward-looking
statements are set forth in our reports and other filings made with
the Securities and Exchange Commission (the "SEC"), which are
available at the SEC's website at www.sec.gov. Many of the factors
that will impact our risk factors are beyond our 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. Neither Layne
nor Granite undertakes any obligation to update any such
forward-looking statements to reflect any new information,
subsequent events or circumstances, or otherwise, except as may be
required by law.
Additional Information and Where to Find It
Granite has filed with the SEC a Registration Statement on Form
S-4, which includes a prospectus with respect to Granite's shares
of common stock to be issued in the proposed merger and a proxy
statement of Layne in connection with the proposed merger between
Granite and Layne (the "Proxy Statement/Prospectus"). The Proxy
Statement/Prospectus was sent or given to the stockholders of Layne
and contains important information about the proposed merger and
related matters. LAYNE'S SECURITY HOLDERS ARE ADVISED TO READ THE
PROXY STATEMENT/PROSPECTUS CAREFULLY BECAUSE IT CONTAINS IMPORTANT
INFORMATION ABOUT THE PROPOSED MERGER. The Proxy
Statement/Prospectus and other relevant materials and any other
documents filed by Layne or Granite with the SEC may be obtained
free of charge at the SEC's website at www.sec.gov. In addition,
security holders will be able to obtain copies of the Proxy
Statement/Prospectus free of charge from Layne or Granite by
contacting either (1) Investor Relations by mail at Layne
Christensen Company, 1800 Hughes Landing Boulevard, Ste 800,
The Woodlands, Texas 77380, Attn:
Investor Relations Department, by telephone at 281-475-2600, or by
going to Layne's Investor Relations page on its corporate website
at www.layne.com or (2) Investor Relations by mail at Granite
Construction Incorporated, 585 West Beach Street, Watsonville, California 95076, Attn: Investor
Relations Department, by telephone at 831-724-1011, or by going to
Granite's Investors page on its corporate website at
www.graniteconstruction.com.
No Offer or Solicitation
The information in this document is for informational purposes
only and is neither an offer to purchase, nor a solicitation of an
offer to sell, subscribe for or buy any securities or the
solicitation of any vote in any jurisdiction pursuant to the
proposed merger or otherwise, nor shall there be any sale, issuance
or transfer of securities in any jurisdiction in contravention of
applicable law. No offer of securities shall be made except by
means of a prospectus meeting the requirements of Section 10 of the
Securities Act of 1933, as amended.
Participants in the Solicitation
Layne and Granite and their respective directors and executive
officers may be deemed to be participants in the solicitation of
proxies from Layne's stockholders in connection with the proposed
merger and may have direct or indirect interests in the proposed
merger. Information about Layne's directors and executive officers
is set forth in its Annual Report on Form 10-K for the fiscal year
ended January 31, 2018, which was
filed with the SEC on April 10, 2018
and amended on April 20, 2018. These
documents are available free of charge at the SEC's website at
www.sec.gov, and from Layne by contacting Investor Relations by
mail at Layne Christensen Company, 1800 Hughes Landing Boulevard,
Ste 800, The Woodlands, Texas
77380, Attn: Investor Relations Department, by telephone at
281-475-2600, or by going to Layne's Investor Relations page on its
corporate website at www.layne.com. Information about Granite's
directors and executive officers is set forth in Granite's Proxy
Statement on Schedule 14A for its 2018 Annual Meeting of
Stockholders, which was filed with the SEC on April 13, 2018, and its Annual Report on Form
10-K for the fiscal year ended December 31,
2017, which was filed with the SEC on February 16, 2018. These documents are available
free of charge at the SEC's website at www.sec.gov, and from
Granite by contacting Investor Relations by mail at Granite
Construction Incorporated, 585 West Beach Street, Watsonville, California 95076, Attn: Investor
Relations Department, by telephone at 831-724-1011, or by going to
Granite's Investors page on its corporate website at
www.graniteconstruction.com. Additional information regarding the
interests of participants in the solicitation of proxies in
connection with the proposed merger is included in the Proxy
Statement/Prospectus that Granite has filed with the SEC.
Contacts
J. Michael Anderson
Chief Financial Officer
281-475-2694
michael.anderson@layne.com
Jack Lascar, Dennard Lascar Investor Relations
713-529-6600
jlascar@dennardlascar.com
[LAYN-F]
View original
content:http://www.prnewswire.com/news-releases/layne-christensen-reports-fiscal-2019-first-quarter-results-300660324.html
SOURCE Layne Christensen Company