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Layne Christensen Reports Second Quarter Fiscal 2013 Financial Results

Stocks in this article: LAYN

  • Revenues for Q2 FY2013 were essentially unchanged at $289.6 million.
  • Net loss from continuing operations for Q2 FY2013 was $2.9 million, or $0.15 per share, compared to net income from continuing operations of $10.3 million, or $0.53 per diluted share, last year. Q2 FY2013 included a $7.7 million net non-cash loss on the remeasurement of an equity investment. Excluding this loss, net income from continuing operations for Q2 FY2013 was $4.8 million, or $0.25 per diluted share.
  • During Q2 FY2013, Layne's Energy Division was reclassified as a discontinued operation, resulting in a net loss from discontinued operations of $21.1 million, or $1.08 per share. Included in the net loss is an after tax non-cash loss of $20.0 million to write down the carrying value of the Energy Division assets to the expected selling price, less costs to sell.
  • Net loss for Q2 FY2013, including discontinued operations, was $24.0 million, or $1.23 per share, compared to net income of $10.6 million, or $0.54 per diluted share for Q2 FY2012.
  • Heavy Civil experienced pre-tax losses of $8.8 million, reflecting continued pressure on margins and cost overruns on several difficult contracts.
  • As of July 31, 2012, cash and equivalents were $36.3 million, long-term debt, excluding current maturities, was $109.0 million, and Layne stockholders' equity was $427.3 million ($21.57 per share).

"The non-cash remeasurement of an equity investment masked a second consecutive quarter of profitable continuing operations. Our Water Resources, Inliner, Geoconstruction (before remeasurement charge), and Mineral Exploration Divisions operated profitably. Heavy Civil, however, generated a substantial loss due to reduced actvity levels, cost overruns, and legacy execution issues. We have taken what we believe are the necessary steps to remedy the performance at Heavy Civil as we work through the low margin legacy backlog, begin to realize the benefits of our efforts to procure higher margin projects and decrease our reliance on hard bid municipal work. Our Mineral Exploration business was impacted by a shifting of assets to geographies that we believe offer greater profit potential, a disruption of our West African operations from the Mali unrest and a temporary mine shutdown by one of our affiliate's major clients in Chile as a result of a third party injury. We expect Mineral Exploration's results for FY2013 will be in line with FY2012 results. We are also moving ahead with the sale of Layne's Energy Division, an important step in our plan to focus on creating a new, total water solutions business for the energy sector."

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