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LAYNE CHRISTENSEN REPORTS SECOND QUARTER FISCAL 2014 FINANCIAL RESULTS

Stocks in this article: LAYN

  • Revenues for Q2 FY 2014 declined to $232 million from $288 million in Q2 FY 2013
  • Q2 FY 2014 results were significantly impacted by:
  • Pre-tax losses of $20.5 million at Geoconstruction as result of continued weak demand in the US and South America which included a $14.6 million, non-cash goodwill impairment charge
  • $42.6 million in domestic non-cash tax valuation allowances
  • Including these charges and valuation allowances, net loss from continuing operations for Q2 FY 2014 was $79.9 million, or $4.09 per share, compared to net loss from continuing operations of $3.0 million, or $0.16 per diluted share, in Q2 FY 2013. Excluding the non-cash charges and items, net loss from continuing operations for Q2 FY 2014 was $22.9 million, or $1.17 per diluted share.
  • Inliner, Water Resources, and Mineral Exploration operated profitably in Q2 FY 2014.
  • Heavy Civil's losses in Q2 FY 2014 narrowed to essentially break-even, an improvement from Q4 FY 2013 and Q1 FY 2014.
  • As of July 31, 2013, cash and cash equivalents were $23.3 million, long-term debt, excluding current maturities, was $101.5 million, and equity was $317.0 million ($15.86 per share).

"The $57.3 million of non-cash items recorded during Q2 FY 2014 had a material impact on our results, as did the continued weakness at Geoconstruction along with reduced profits at Mineral Exploration. Although some of our end markets remain challenging, we expect our divisions will improve their performance in the second half of FY 2014 although neither Mineral Exploration or the equity earnings from our affiliates is likely to improve in the short term. We base this belief on the sequential quarterly progress demonstrated at Heavy Civil, Water Resources, and Inliner. We reported essentially break-even results at Heavy Civil for Q2 FY 2014, and we believe that this business has now turned the corner and will return to profitability later in FY 2014. Water Resources returned to profitability from a modest loss in Q1 FY 2014, and Inliner continues to progress towards an eighth consecutive year of record revenue and profits. The outlook at Geoconstruction is improving, with bid-and-proposal activity that we believe will manifest in higher backlog beginning in Q3 FY 2014 and improved division financial results beginning in the following quarter. Despite reasonably strong commodity prices, our mining clients have continued to defer mineral exploration programs. Our Mineral Exploration division continues to operate profitably despite the downturn and we continue to take the necessary steps to maintain division profitability during this period of industry uncertainty. At Energy Services, we now expect to be at a $20 million revenue run rate by Q2 FY 2015 slightly later than we originally forecast but we expect narrower losses for the second half of FY 2014. We have also completed $17.8 million of non-core business divestitures and asset sales this year. Finally, under our One Layne initiative, we are pursuing approximately $1.3 billion of potential projects that leverage and combine the unique skill sets of our division professionals."

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