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Layne Christensen Reports Fourth Quarter And Fiscal 2014 Financial Results

Stocks in this article: LAYN

Q4 FY 2014 Overview

  • Revenues of $184.4 million compared to $228.1 million in Q4 FY 2013.
  • Profits at Inliner and Geoconstruction offset by losses at Heavy Civil, Mineral Services, and Water Resources.
  • Geoconstruction backlog rose to $118.0 million at January 31, 2014 from $41.5 million at January 31, 2013; Geoconstruction announced $50 million of new contracts in Q1 FY 2015.
  • Net loss from continuing operations of ($14.3) million, or ($0.73) per share.
  • As of January 31, 2014, cash and cash equivalents were $35.0 million, long-term debt, excluding current maturities, was $108.3 million, and equity was $289.5 million.
 
 "The losses we incurred in FY 2014 reflect the challenging conditions in certain of our end markets, especially Mineral Services and Geoconstruction, substantial non-cash charges, and the impact of weather-induced project delays in late calendar 2013 and early 2014. However, we also believe that we made progress during the year that has positioned each of our divisions to improve their financial performance in FY 2015. Inliner produced its seventh consecutive year of record results in FY 2014, and Water Resources operated profitably. Geoconstruction produced the single-largest turnaround in backlog among our divisions in FY 2014, and also returned to profitability in Q4 FY 2014. Heavy Civil struggled towards the end of the year due, in large part, to severe weather in the northeast U.S., as well as difficulties encountered in completing certain projects. However, losses at this division narrowed substantially from FY 2013. Our Energy Services business continues to ramp up, and we have commercially proven our cradle-to-cradle water management solution, branded ALLclearâ„¢, for oil and gas clients. We expect this business will grow over the next 12 months. Mineral Services was challenged in FY 2014, and it likely will remain so this year. The global slowdown in mining expenditures has reduced demand for exploration and, consequently, led to a decline in rig utilization. Longer-term fundamentals for mining remain positive, especially for gold and industrial metals such as copper and iron ore, which account for the majority of Mineral Services revenues. We will continue to contain costs while the industry recovers. Our One Layne initiative, begun two years ago, has leveraged our capabilities such that we now offer full solutions to our mining, oil and gas, and industrial clients. We are pursuing $229 million of One Layne projects in FY 2015 with expected start dates in the next year. During Q4 FY 2014 we completed a $125 million convertible notes offering, including the full exercise of a $15 million overallotment option. During Q1 FY 2015, we signed a new five-year $135 million senior secured asset-backed revolving credit facility that lowers our borrowing costs and provides the flexibility and structure appropriate for the project-oriented nature of our business. Together, we believe that these financings provide a stable capital base that will allow us to pursue opportunities both here and abroad."  
 
-- Rene J. Robichaud, President and Chief Executive Officer
 
Financial Data Three Months % Twelve Months %
(000's, except per share data) Jan 31, 2014 Jan 31, 2013 Change Jan 31, 2014 Jan 31, 2013 Change
Revenues            
--Water Resources  $ 39,999  $ 49,414 (19.1)  $ 175,875  $ 214,091 (17.9)
--Inliner  36,413  31,574 15.3  148,384  133,256 11.4
--Heavy Civil  53,761  58,408 (8.0)  267,192  278,131 (3.9)
--Geoconstruction  24,214  29,039 (16.6)  87,180  133,247 (34.6)
--Mineral Services  28,634  58,154 (50.8)  172,960  302,119 (42.8)
--Energy Services  1,068  1,450 (26.3)  6,336  5,885 7.7
--Other  4,695  3,874 21.2  19,936  11,509 73.2
--Intersegment Eliminations  (4,424)  (3,805)    (18,580)  (9,112)  
Total revenues  $ 184,360  $ 228,108 (19.2)  $ 859,283  $ 1,069,126 (19.6)
Net loss from continuing operations attributable to Layne Christensen Company  $ (14,268)  $ (22,624) (36.9)  $ (134,437)  $ (12,888) **
Diluted loss per share - continuing operations  $ (0.73)  $ (1.16) (37.3)  $ (6.86)  $ (0.66) **
             
Net loss attributable to Layne Christensen Company  $ (14,268)  $ (24,852) (42.6)  $ (128,639)  $ (36,651) **
Diluted loss per share  $ (0.73)  $ (1.27) (42.9)  $ (6.56)  $ (1.88) **
             
 
Financial Data and Reconciliation to non-GAAP Financial Data Three Months % Twelve Months %
(000's, except per share data) (unaudited) Jan 31, 2014 Jan 31, 2013 Change Jan 31, 2014 Jan 31, 2013 Change
Total Revenues  $ 184,360  $ 228,108 (19.2)  $ 859,283  $ 1,069,126 (19.6)
             
Diluted loss- continuing operations  $ (14,257)  $ (22,585) (36.9)  $ (133,849)  $ (12,260) **
Net income attributable to noncontrolling interests  (11)  (39) (71.8)  (588)  (628) (6.4)
Net loss from continuing operations attributable to Layne Christensen Company  (14,268)  (22,624) **  (134,437)  (12,888) **
Loss on remeasurement of equity investment  --   -- **  --  (7,705) **
Loss on non-cash impairment charges  --   (8,431) **  (14,646)  (8,431) **
Non-cash tax valuation allowances  (2,757)  -- **  (54,379)  -- **
Net (loss) income from continuing operations attributable to Layne Christensen Company excluding loss on above items*  $ (11,511)  $ (14,193) **  $ (65,412)  $ 3,248 **
Diluted loss per share from continuing operations attributable to Layne Christensen shareholders:  $ (0.73)  $ (1.16) (37.3)  $ (6.86)  $ (0.66) **
Diluted loss per share on above items*  $ (0.14)  $ (0.43) **  $ (3.52)  $ (0.83) **
Diluted (loss) income per share - continuing operations excluding loss on above items*  $ (0.59)  $ (0.73) **  $ (3.34)  $ 0.17 **

* We provide non-GAAP net loss from continuing operations and non-GAAP net loss per share amounts in order to provide meaningful supplemental information regarding our operational performance. These supplemental measures exclude non-cash charges related to the goodwill impairment and valuation allowances related to the write-off of prior period deferred income tax assets. Our management uses non-GAAP measures to evaluate the performance of our core businesses and to estimate future core performance. Since management finds this measure to be useful, we believe that our investors benefit from seeing our results through the eyes of management in addition to seeing our GAAP results. Readers are reminded that non-GAAP numbers are merely a supplement to, and not a replacement for, GAAP financial measures. They should be read in conjunction with the GAAP financial measures. It should be noted as well that our non-GAAP information may be different from the non-GAAP information provided by other companies.

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