Stock on the Move: Layne Christensen Company (NASDAQ:LAYN)

Layne Christensen Company (NASDAQ:LAYN) reported earnings for the three months ended April 2016 on June 06, 2016. The company earned $-0.45 per share on revenue of $159.74M. Analysts had been modeling earning per share of $-0.31 with $160.24M in revenue.

Layne Christensen Company (NASDAQ:LAYN) announced financial and operating results for the fiscal 2017 first quarter (Q1 FY 2017) ended April 30, 2016.

Highlights

  • Reported net loss from continuing operations for Q1 FY 2017 was ($8.8) million, or ($0.45) per share, compared to ($6.6) million, or ($0.34) per share, for Q1 FY 2016. Q1 FY 2016 results included a $4.2 million gain, or $0.22 per share, on extinguishment of debt.
  • Adjusted EBITDA (a non-GAAP financial measure as defined below) was $4.5 million in Q1 FY 2017 compared to $4.8 million in Q1 FY 2016.
  • Consolidated revenues declined 8% to $159.7 million in Q1 FY 2017 from $174.3 million in Q1 FY 2016, largely related to lower activity levels at Mineral Services and Heavy Civil.  Water Resources produced strong revenue growth while Inliner revenues were relatively flat.
  • Unallocated corporate expenses reflected in our Adjusted EBITDA calculation continued to decline, benefiting from Layne’s overall cost reduction efforts, and were $7.0 million in Q1 FY 2017 compared to $9.5 million in Q1 FY 2016.
  • As of April 30, 2016, cash and cash equivalents were $59.8 million, and total debt was $159.9 million.  Total liquidity, which includes availability under Layne’s credit facility and total cash and cash equivalents, was $126.1 million at April 30, 2016, compared to $131.7 million at January 31, 2016.
  • Total backlog was $316.1 million at April 30, 2016 compared to $346.3 million at January 31, 2016 and $380.4 million at April 30, 2015.   The decrease in backlog was primarily within the Heavy Civil division and related to the continuing strategic shift towards more selective opportunities.

CEO Commentary

Michael J. Caliel, President and Chief Executive Officer of Layne, commented, “Our first quarter results reflect our continued progress on several fronts and the challenges we continue to face in the minerals market.  Notably, Inliner delivered another quarter of strong performance driven by improved margins and Water Resources generated top line growth although margins were impacted by some execution issues, including within the energy business, and increased bad debt expense. We continue to make meaningful progress in transforming our Heavy Civil division where we produced positive Adjusted EBITDA for the first time in more than two years.  The ongoing commodity-related headwinds continue to adversely impact our Mineral Services business although we benefitted from improved profitability of our Latin American affiliates.

Layne Christensen Company earnings per share showed an increasing trend of 16.9% for the current fiscal year. The company’s expected EPS growth rate for next fiscal year is 19%.Analysts project EPS growth over the next 5 years at 3%. It has EPS annual decline over the past 5 fiscal years of -31.2% when sales declined -7.3. It reported -8.4% sales drop, and -33.5% EPS decline in the last quarter.

The stock is trading at $7.17, up 91.2% from 52-week low of $3.75. The stock trades down -31.78% from its peak of $10.51 and % below the consensus price target of $8.94. Its volume clocked up at 0.18 million shares which is higher than the average volume of 0.16 million shares. Its market capitalization currently stands at $140.20M.

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