THE WOODLANDS, Texas,
March 20, 2017 /PRNewswire/ --
Layne Christensen Company (NASDAQ: LAYN) ("Layne" or the
"Company") today announced selected and preliminary financial
information for its fiscal 2017 fourth quarter, which ended
January 31, 2017.
The preliminary results of operations for the fourth quarter of
fiscal 2017 represent the most current information available to
management. The Company's actual results may differ materially from
these preliminary estimates due to adjustments and other
developments that may arise between the date of this press release
and the time that financial results for the fourth quarter are
finalized.
Layne expects to report fiscal 2017 fourth quarter revenues of
between $127 million and $131
million, compared to $159
million in last year's fourth quarter. The year-over-year
decline was mainly due to reduced Water Resources' drilling
activity in the western U.S., stemming largely from significant
precipitation over the course of the past year, and Heavy Civil's
continuing shift towards more selective opportunities.
The Company expects to report fiscal 2017 fourth quarter net
loss from continuing operations before income taxes of between
$(33) million and $(35) million,
compared to a loss of $(11.9) million
in the fourth quarter of fiscal 2016. Included in
the fiscal 2017 year loss is a non-cash charge of
approximately $12 million related to
the cumulative currency translation adjustment in association with
the closure of Layne's African and Australian businesses.
In addition, Layne expects to report Adjusted EBITDA (a
non-GAAP financial measure as defined below) for its fiscal 2017
fourth quarter of between negative $(7)
million and negative $(9)
million compared to positive $3.5
million in the fourth quarter of fiscal 2016. The
year-over-year decline in Adjusted EBITDA was mainly due to higher
costs and margin degradation on six large projects in Water
Resources and three projects in Heavy Civil. As previously
disclosed in a February 9, 2017 press
release, Layne entered into a definitive agreement to sell
substantially all of its Heavy Civil business; management continues
to expect that the Heavy Civil transaction will close in
approximately 50 days.
Layne's Inliner and the Mineral Services segments are expected
to generate Adjusted EBITDA during the fourth quarter of fiscal
2017 consistent with the Company's internal expectations.
Michael J. Caliel, President and
Chief Executive Officer of Layne, commented, "Despite strong
performance at Inliner, we are extremely disappointed with our 2017
fiscal fourth quarter results as a result of the underperformance
in our Water Resources division. Water Resources' margins
were impacted by a combination of execution issues on six
large projects that incurred losses of more than $5 million during the recently-completed fourth
quarter, as well as reduced activity in California.
"We have been proactive in addressing this situation and
are in the midst of significantly enhancing our project management
processes in Water Resources to improve overall risk management and
profitability. These efforts are a continuation of our
business performance initiatives that were initiated in Water
Resources in the middle of fiscal year 2017. Given that a
number of our losses over the course of the year in Water Resources
related to unexpected difficulties in site conditions, we have
changed our policies in order to reduce our contractual exposure to
such risks, especially in our larger drilling and injection well
projects. We have a clear understanding of the issues
impacting Water Resources and more importantly, we believe we have
the experience, track record and know how to fix them."
Use of Non-GAAP Financial Information
We use Adjusted EBITDA to assess performance which is not
defined in generally accepted accounting principles (GAAP). Our
measure of Adjusted EBITDA, which may not be comparable to other
companies' measure of Adjusted EBITDA, represents income or loss
from continuing operations before interest, taxes, depreciation and
amortization, non-cash share-based compensation, equity in earnings
or losses from affiliates, certain non-recurring items such as
impairment charges, restructuring costs, gain on extinguishment of
debt, and certain other gains or losses, plus dividends received
from affiliates. We believe that the presentation of Adjusted
EBITDA included in this report helps us understand and evaluate our
operating performance and trends and provides useful information to
both management and investors. In addition, we use Adjusted EBITDA
as a factor in incentive compensation decisions and our credit
facility agreement uses measures similar to Adjusted EBITDA to
assess compliance with certain covenants. Adjusted EBITDA should be
considered in addition to results prepared in accordance with GAAP,
but should not be considered a substitute for, or superior to, GAAP
results.
The following table reconciles our range of estimated Adjusted
EBITDA for the fourth quarter of fiscal 2017 to our range of
estimated net loss from continuing operations before income taxes
for the same period, which we consider to be the most directly
comparable GAAP financial measure to Adjusted EBITDA.
|
|
Three months
ended
|
(in
millions)
|
|
January 31,
2017
|
January 31,
2016
|
|
|
Range
|
Actual
|
|
|
|
|
|
|
Net loss from
continuing operations before income taxes
|
|
$
(35)
|
-
|
$
(33)
|
$
(11.9)
|
Interest
expense
|
|
4
|
|
4
|
4.7
|
Depreciation and
amortization
|
|
7
|
|
7
|
7.8
|
Restructuring
costs(1)
|
|
14
|
|
14
|
3.6
|
Other (income)
expenses, net
|
|
1
|
|
1
|
(0.7)
|
Adjusted
EBITDA
|
|
$
(9)
|
-
|
$
(7)
|
$
3.5
|
|
|
(1)
|
Restructuring costs
include a $12 million non-cash charge related to the
cumulative currency
translation
|
|
adjustment associated
with the closure of our Australian and African businesses.
|
Conference Call
Layne Christensen will conduct a
conference call at 9:00 AM ET /
8:00 AM CT Tuesday, March 21, 2017,
to discuss these preliminary 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 15 minutes early
to register, download and install any necessary audio software. If
you are unable to listen live, the conference call will be archived
on the website for approximately 90 days. A telephonic replay of
the conference call will be available through March 28, 2017 and may be accessed by calling
1-877-660-6853 (Domestic) or 1-201-612-7415 (International) and
using passcode 13657604#.
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. Such statements are based on current expectations
and are subject to certain risks, uncertainties and assumptions,
including but not limited to: estimates and assumptions regarding
our strategic direction and business strategy, the timely and
effective execution of our turnaround strategy for Water Resources,
any changes in our fiscal 2017 estimated financial results or
year-end adjustments that occur in connection with finalizing our
fiscal 2017 financial statements; the extent and timing of a
recovery in the mining industry, prevailing prices for various
commodities, longer term weather patterns, unanticipated slowdowns
in our major markets, the availability of credit, the risks and
uncertainties normally incident to our construction industries, the
impact of competition, the effect of any deregulation or other
initiatives by the Trump Administration, the effectiveness of
operational changes expected to reduce operating expenses and
increase efficiency, productivity and profitability, the
satisfaction of all of the closing conditions for the sale of our
Heavy Civil business segment in a timely manner, 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. 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, and we assume no obligation to update such
forward-looking statements or to update the reasons why actual
results could differ materially from those anticipated in such
forward-looking statements.
About Layne
Layne is a global solutions provider to the world of essential
natural resources—water, mineral and energy. We offer innovative,
sustainable products and services with an enduring commitment to
safety, excellence and integrity.
Contacts
J. Michael Anderson
Chief Financial Officer
281-475-2694
michael.anderson@layne.com
Dennard Lascar Associates
Jack Lascar
713-529-6600
jlascar@dennardlascar.com
[LAYN-F]
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SOURCE Layne Christensen Company