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Layne Christensen Reports Fiscal 2013 Fourth Quarter And Year-End Results Of Operations

Stocks in this article: LAYN

Interest expense increased to $4.3 million for FY2013 from $2.4 million last year due primarily to higher borrowing on our revolving credit facilities to fund capital expenditures, acquisitions and working capital needs.

Other income, net of $5.8 million for FY2013 declined from $9.7 million in FY2012, and consisted primarily of a combination of gains on sales of surplus equipment, recognition of the previously deferred gain on the sale of an operating facility in California and an adjustment of the expected earnout liability on a prior acquisition.

An income tax benefit for continuing operations of $8.3 million (an effective rate of 43.1%) was recorded for FY2013, compared to an income tax expense for continuing operations of $9.6 million (on a loss of $43.5 million, producing an effective rate of negative 22.1%). As noted above, there was no tax benefit recorded on the majority of the impairment charges in FY2012, greatly distorting the effective rate.

Summary of Operating Segment Data

The following table summarizes financial information for the Company's operating segments. A discussion of the results of each segment follows the table.

  Three Months Twelve Months
  Ended January 31, Ended January 31,
(in thousands) 2013 2012 2013 2012
Revenues        
Water Resources  $ 64,947  $ 67,460  $ 278,529  $ 274,556
Inliner  31,574  34,501  133,256  132,108
Heavy Civil  58,408  78,525  278,131  343,760
Geoconstruction  29,039  25,011  133,247  89,210
 Water Infrastructure Group  183,968  205,497  823,163  839,634
Mineral Exploration   44,328  65,036  246,582  268,909
Other  1,446  1,391  5,879  4,215
Total revenues  $ 229,742  $ 271,924  $1,075,624  $ 1,112,758
Equity in earnings of affiliates        
Geoconstruction  $ 384  $ 1,184  $ 3,872  $ 3,345
Mineral Exploration   1,119  4,438  16,700  21,302
Total equity in earnings of affiliates  $ 1,503  $ 5,622  $ 20,572  $ 24,647
Income (loss) from continuing operations before income taxes      
Water Resources  $ (4,597)  $ (21,133)  $ 4,426  $ (5,967)
Inliner  2,009  (21,051)  9,936  (13,236)
Heavy Civil  (10,676)  (58,313)  (32,308)  (61,649)
Geoconstruction  (4,100)  3,609  517  12,828
 Water Infrastructure Group  (17,364)  (96,888)  (17,429)  (68,024)
Mineral Exploration   (885)  10,120  45,969  62,259
Other  (4,456)  (2,442)  (7,445)  (4,520)
Unallocated corporate expenses  (12,528)  (8,512)  (36,009)  (30,866)
Interest expense  (1,289)  (596)  (4,309)  (2,357)
Total loss from continuing ops. before income taxes  $ (36,522)  $ (98,318)  $ (19,223)  $ (43,508)
         
         
Water Resources Division Three Months Twelve Months
  Ended January 31, Ended January 31,
(in thousands) 2013 2012 2013 2012
Revenues  $ 64,947  $ 67,460  $ 278,529  $ 274,556
         
(Loss) income before impairments and income taxes  (164)  (4,049)  8,859  11,117
Less: Impairment charges  (4,433)  (17,084)  (4,433)  (17,084)
(Loss) income before income taxes  (4,597)  (21,133)  4,426  (5,967)

The decline in revenues at Water Resources for Q4 FY2013 was primarily due to lower revenues from our specialty drilling operations. The increase in revenues for the year was due mainly to a project beginning in Ethiopia, better performance in the Southeast and Midwest Groups due to drought-related projects, and revenues generated on new contracts.

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