THE WOODLANDS, Texas, Oct. 23, 2014 (GLOBE NEWSWIRE) -- Layne Christensen Company (Nasdaq:LAYN) ("Layne" or the "Company") today announced guidance for the third quarter ending October 31, 2014 ("Q3 FY 2015"). Layne expects to announce results for Q3 FY 2015 on or about December 10, 2014.
Layne expects to report revenues of between $210 million and $215 million for Q3 FY 2015. The net loss from continuing operations for the quarter is expected to range between $10.8 million and $11.8 million, or $0.55 to $0.60 per diluted share.
The anticipated net loss from continuing operations in Q3 FY 2015 is expected to be primarily attributable to the following:
- Losses of between $3.1 million and $3.5 million at Mineral Services, reflecting the continuing impact of volatile commodity prices, and economic and political unrest on project starts and utilization rates;
- Losses at Heavy Civil of between $3.8 million and $4.3 million, primarily due to the combination of several unprofitable legacy contracts and later contracts producing low margins, as well as recurring general and administrative expenses. The legacy contracts should be substantially complete by the end of FY 2015; and
- Losses at Geoconstruction of between $3.4 million and $3.9 million, due to delays in resolving claims on certain projects.
Layne's Water Resources, Inliner and Energy Services divisions are each expected to operate profitably in Q3 FY 2015. Also contributing positively in Q3 is an expected tax benefit of approximately $4 million from the utilization of certain net operating losses.
David A.B. Brown, President & CEO of Layne, commented, "Despite these anticipated losses, we remain confident in the direction of our business and the progress we are making to improve Layne's operating results. We are especially pleased that our growing Energy Services division is on track to produce its first-ever profitable quarter."
"As expected, losses at Heavy Civil should narrow from Q2 FY 2015. We expect to complete substantially all of the unprofitable projects at Heavy Civil by the end of FY 2015, with losses in the division weighing on our results through Q4 FY 2015. Poor results at Mineral Services will likely persist through the balance of FY 2015 and FY 2016. We continue to seek to manage costs and consolidate locations at Mineral Services, where appropriate, as the mining industry recovers. Looking ahead to Q4 FY 2015, we anticipate consolidated pre-tax results similar to Q3 FY 2015 as we enter our normal seasonal slowdown. Liquidity has improved since the end of Q2 FY 2015. Current domestic cash on hand and availability under the ABL facility is approximately $65 million."
Mr. Brown concluded, "We continue to make progress implementing our previously announced restructuring plan. Layne expects to realize annualized cost savings of between $17 and $22 million. We continue to evaluate each of our divisions and to explore operational enhancements, as well as review under-performing assets and take action where appropriate."
These preliminary results could differ materially from the final results that will be reported on or about December 10, 2014, for Q3 FY 2015 and in April 2015 for Q4 FY 2015. The expected results presented in this release are preliminary, have not been reviewed by our independent registered public accountants and will be dependent on our final results for the balance of October and Q4 FY 2015, and are subject to regular closing processes that could result in significant adjustments.
Layne Christensen Company
Layne is a global water management, construction and drilling company, providing responsible solutions 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.
Forward-Looking Statements
This press release contains 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 include, but are not limited to, our expected consolidated and divisional financial performance for Q3 and Q4 of FY 2015, the expected timeline to complete unprofitable contracts in Heavy Civil and to resolve claims on certain Geoconstruction projects, expected tax benefits from the utilization of certain net operating losses, our expected backlog and the expected timeline and results of our restructuring and cost-reduction programs. Our actual results and performance may materially and adversely differ from those contemplated by the forward-looking statements in this press release for many reasons, many of which are beyond our control, including, but not limited to, the following: we may not timely or effectively implement our restructuring and cost-reduction programs; events may occur during the balance of Q3 and Q4 of FY 2015 that may adversely affect our reported results for those periods; quarter- and fiscal-end closing procedures, and the review and audit of our financial statements by our independent registered public accountants, may result in adjustments that adversely affect our reported results; and assumptions regarding the markets in which we operate, including the extent and timing of a recovery in the mining industry and the seasonality of our business, may prove to be inaccurate. In addition, our business in general is subject to certain risks, uncertainties and assumptions, including, but not limited to, the following: the length of time required to hire a successor chief executive officer and chief financial officer and their future performance; the Company's ability to settle the ongoing investigation by the SEC into the legality, under the Foreign Corrupt Practices Act, of certain payments to agents and other third parties interacting with government officials in certain countries in Africa relating to the payment of taxes and the importing of equipment; prevailing prices for various commodities; unanticipated slowdowns in the Company's major markets; the availability of credit; the risks and uncertainties normally incident to the construction industry; the impact of competition; the effectiveness of operational changes expected to increase efficiency and productivity; worldwide economic and political conditions; and foreign currency fluctuations that may affect worldwide results of operations. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove to be 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 press release, and except as may be required by law, the Company assumes 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.