Layne Christensen (LAYN) 8-K Regulation FD Disclosure

September 2015

LAYNE CHRISTENSEN

D.A. Davidson 14

th

Annual Engineering &

Construction Conference

Exhibit 99.1

Exhibit 99.1

Safe Harbor

2

This

presentation

may

contain

forward-looking

statements

within

the

meaning

of

the

Private

Securities

Litigation

Reform

Act

of

1995.

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,"

"intend,"

"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,

our

ability

to

implement

our

restructuring

plan

for

our

Africa

operations,

the

extent

and

timing

of

a

recovery

in

the

mining

industry,

prevailing

prices

for

various

commodities,

longer

term

weather

patterns,

unanticipated

slowdowns

in

the

our

major

markets,

the

seasonality

of

our

business,

the

availability

of

credit,

the

risks

and

uncertainties

normally

incident

to

our

construction

industries,

the

impact

of

competition,

the

effectiveness

of

operational

changes

expected

to

reduce

operating

expenses

and

increase

efficiency,

productivity

and

profitability,

the

availability

of

equity

or

debt

capital

needed

for

our

business,

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.

Layne Overview

NASDAQ:

LAYN

Headquarters:

The

Woodlands,

Texas

Shares

Outstanding

(1)

:

19.7

million

Stock

price

(2)

:

$7.48

Market

capitalization

(2)

:

$148.0

million

5

business

segments:

Water

Resources

Inliner

Heavy

Civil

Energy

Services

Mineral

Services

130+

years

of

experience

50,000+

wells

installed

3

% Revenues TTM Q2 FY 2016

by Business Segment

Total Revenue: $727.8 million

28.2%

26.3%

27.9%

14.8%

2.8%

Water Resources

Inliner

Heavy Civil

Mineral Services

Energy Services

(1)

As of 8/28/15

(2)

As of 9/8/15

A leading global water management and

services company, providing responsible,

integrated solutions to address the world’s

toughest water, mineral and energy challenges

Solid Credentials

4

Business Platforms

5

WATER

MANAGEMENT,

INFRASTRUCTURE

REHABILITATION &

MAINTENANCE

HEAVY CIVIL

CONSTRUCTION

MINERAL SERVICES

•

Water Sourcing

•

Well & Pump

Maintenance

•

Water Treatment

Technologies

•

Water Transfer

•

Water Storage

•

Cured-In-Place Pipe 

Rehabilitation

•

Treatment Plant

Construction

•

Renewable Energy

•

Sewer Systems

•

Water Supply

•

Intake and Pumping

Structures

•

Water Transmission

& Distribution

•

Exploration Drilling

•

Specialty Drilling

•

Mine Dewatering

•

Borehole Services

Water is a Large and Growing Industry

6

Layne participates in large market segments and holds position of #1 in U.S. water well drilling and #2

in U.S. wastewater pipeline trenchless rehabilitation services

Projected Spend on U.S. Water and Wastewater Infrastructure

US$ billions

(1)

Projected

U.S.

Water

Infrastructure

Needs

(3)

$60

$70

$80

$90

$100

$110

$120

$130

(1)

EPA

(2)

EPA and ASCE

(3)

Marketline

Outlook June 2013

Estimated

U.S.

Spending

Needs

by

Function

(%)

(2)

Wastewater

Water Supply

59%

20%

12%

9%

Transmission

Treatment

Water Storage

Other

75%

17%

8%

Pipes

Treatment

Plants

Stormwater

$36.2

$41.7

$35.0

$39.2

$38.9

YoY Growth

Wastewater

Water Supply

2015

2014

2018

2017

2016

Broad Presence in Water Ecosystem

7

Source: MGI

Resource provision to all sectors

Groundwater well drilling

Multi-purpose dams / reservoirs

Desalination plants

Horizontal collector wells

Availability and utilization monitoring

Irrigation distribution

System development

System rehabilitation 

On-farm use

On-farm, irrigation technology

Water management practices

Treated water distribution

Urban network transmission and distribution

Infrastructure maintenance

Water main pipeline rehabilitation

Water quality and efficiency monitoring

Sanitation services

Wastewater treatment

Sewer network construction

Sewer pipeline rehabilitation

Water reuse and recycling

Injection well drilling

Industrial services

Water treatment

Wastewater treatment

Water reuse and recycling

Quality and efficiency

monitoring technologies

Items in green and bold are current

Layne offerings

Solutions Lifecycle

8

Business Segments

Energy

Services

Water

Resources

Heavy Civil

Inliner

Mineral

Services

Revenues: $205.4

Million

#1: U.S.

water well drilling

Revenues: $203.0

Million

Top 5 in U.S. sewer

repair & construction

Revenues: $191.5

Million

#2: U.S. trenchless          

pipeline rehab

Revenues: $107.9

Million

#3 in Mineral

Exploration

Revenues: $20.1

Million

Serving oil & gas

clients for drilling

and production

•

Supply system

development

•

Sourcing

•

Drilling

•

Repair &

installation

•

Water treatment

•

Water & wastewater

treatment

•

Pipeline installation

•

Intake and pumping

structures

•

Biogas facilities

•

Proprietary cured-

in-place pipe

(CIPP) for pipeline

and infrastructure

rehabilitation

•

All phases of core

drilling and

extracting samples

•

Identifying base and

precious mineral

deposits

•

Mine dewatering and

water management

•

Complete end-

to-end water

management

solutions for      

oil & gas clients

9

Note:  All revenues are for trailing twelve months ended July 31, 2015

Select Customers

Water Resources

10

Pre-Tax Income ($ in Millions)

•

MARKET ENVIRONMENT: Increasing demand driven by

population growth in water-challenged regions, aging water

infrastructure and need for water treatment

•

CORE MARKETS

•

Municipal

•

Industrial

•

Agribusiness

•

GROWTH FOCUS

•

Geographic expansion

•

Water treatment and monitoring

•

Expansion of aftermarket portfolio

$175.9

$196.2

$96.6

$105.7

FY14

FY15

6M'15

6M'16

Revenues ($ in Millions)

$1.0

$14.4

$7.0

$8.3

FY14

FY15

6M'15

6M'16

Inliner

•

MARKET ENVIRONMENT: Significant aging

infrastructure across U.S.; Environmental and water loss

issues and government mandate to address those issues

•

CORE MARKETS

•

Municipalities

•

Utilities

•

GROWTH FOCUS

•

Expanded installation / curing methods

•

Technology to drive productivity

•

11

Pre-Tax Income ($ in Millions)

$148.4

$175.0

$73.3

$89.8

FY14

FY15

6M'15

6M'16

Revenues ($ in Millions)

$17.7

$22.9

$8.6

$10.4

FY14

FY15

6M'15

6M'16

Select Customers

Geographic expansion - West, Northeast and New

England 

Heavy Civil

•

MARKET ENVIRONMENT: Significant pent-up demand for

water infrastructure; Increased demand for water treatment  to

reduce discharge

•

CORE MARKETS

•

Industrial

•

Municipalities

•

Utilities

•

Biogas

•

GROWTH FOCUS

•

Refocus from traditional fixed price contracts to

negotiated or alternative delivery contracts

•

Geographic refocus on areas of traditional strength

•

Enhanced risk management

12

Pre-Tax (Loss) ($ in Millions)

$267.2

$207.0

$102.6

$98.5

FY14

FY15

6M'15

6M'16

Revenues ($ in Millions)

$(7.8)

$(21.5)

$(13.2)

$(2.5)

FY14

FY15

6M'15

6M'16

Select Customers

Energy Services

•

MARKET ENVIRONMENT: Increasing demand for water

management in spite of current commodity price environment

•

CORE MARKETS

•

Upstream oil and gas drilling and production

•

GROWTH FOCUS

•

Increase share and scope with existing customers

•

Exploit water treatment opportunities

•

Permian Basin and Eagle Ford

13

Pre-Tax Loss ($ in Millions)

$6.3

$20.2

$7.5

$7.4

FY14

FY15

6M'15

6M'16

Revenues ($ in Millions)

$(3.2)

$(3.7)

$(1.6)

$(1.8)

(1)

FY14

FY15

6M'15

6M'16

(1) Excludes $4.6 million of impairment charges in Q2 FY 2016

Select Customers

Minerals Services

•

MARKET ENVIRONMENT: Deeply cyclical market;

current soft market conditions and low global demand

although longer-term mining industry fundamentals

remain positive

•

CORE MARKETS

•

Junior mining companies

•

Mining and mineral processing companies

•

GROWTH FOCUS

•

Increase focus on core markets (e.g. North and

South America)

•

Mine water management solutions

•

Technology to drive safety and productivity

14

Pre-Tax Loss

($ in Millions)

$173.0

$120.2

$61.5

$49.1

FY14

FY15

6M'15

6M'16

Revenues ($ in Millions)

$(9.5)

$(14.9)

$(4.9)

$(4.8)

(1)

FY14

FY15

6M'15

6M'16

(1) Excludes $11.7 million of restructuring costs in Q2 FY 2016

Select Customers

Strategic Transformation Underway

15

Strategic

Review

Strategic

Review

Business

Performance

Improvement

Grow

Grow

Q1 FY 2016

Current Focus

FY 2017

•

Sold Geoconstruction

business segment

•

Announced Minerals

Services segment exit

from Africa

•

Significantly improved

balance sheet and

bolstered liquidity

•

Cost efficiencies

•

Procurement savings

•

Enhanced working

capital management

•

Pricing and margin

improvements

Strategic focus to reshape

Layne around our core

offerings and capabilities,

leveraging the 130+ years

of experience to build a

more successful managed

services company

Investment Highlights

16

•

A leading global water management, infrastructure rehabilitation and

mineral services company with 130+ years of experience and a proven

track record of success

•

Leadership positions in large markets with favorable long-term growth

dynamics

•

#1 position in Water Resources

•

#2 position in Inliner

•

#3 position in Mineral Services

•

New management team focused on strategic transformation and value

creation

•

Strategic focus on Layne’s core strengths

•

Business performance improvement initiatives

Appendix

17

Financial Information

18

(in thousands, except per share data)

2015

2014

2015

2014

Revenues

176,317

$                 

184,100

$                  

350,588

$                 

342,745

$                  

Cost of revenues (exclusive of depreciation and amortization,

   and impairment charges shown below)

(151,249)

(155,218)

(294,480)

(293,012)

Selling, general and administrative expenses (exclusive of

   depreciation and amortization shown below)

(28,829)

(26,097)

(58,075)

(57,253)

Depreciation and amortization

(8,254)

(11,437)

(16,989)

(22,256)

Impairment charges

(4,598)

—

(4,598)

—

Restructuring costs

(4,361)

(1,328)

(4,551)

(1,328)

Equity in losses of affiliates

(1,486)

(212)

               ��          

(1,593)

(278)

Gain on extinguishment of debt

—

—

4,236

—

Interest expense

(4,295)

(3,025)

(8,147)

(7,074)

Other income, net

252

751

1,293

611

Loss from continuing operations before income taxes

(26,503)

(12,466)

(32,316)

(37,845)

Income tax benefit (expense)

2,993

(213)

2,232

(1,969)

Net loss from continuing operations

(23,510)

(12,679)

(30,084)

(39,814)

Net income (loss) from discontinued operations

5,356

(42,280)

5,372

(41,897)

Net loss

(18,154)

(54,959)

(24,712)

(81,711)

Net income attributable to noncontrolling interests

-

(69)

-

(1,045)

Net loss attributable to Layne Christensen

(18,154)

$                   

(55,028)

$                  

(24,712)

$                   

(82,756)

$                  

Earnings per share information attributable to Layne Christensen

   shareholders:

Loss per share from continuing operations - basic and diluted

(1.19)

$                       

(0.65)

$                       

(1.53)

$                       

(2.08)

$                       

Earnings (loss) per share from discontinued operations - basic and diluted

0.26

(2.16)

0.27

(2.14)

Loss per share attributable to Layne Christensen - basic and diluted

(0.93)

$                       

(2.81)

$                       

(1.26)

$                       

(4.22)

$                       

Weighted average shares outstanding - basic and dilutive

19,744

19,629

19,690

19,627

(unaudited)

(unaudited)

Three Months

Six Months

Ended July 31,

Ended July 31,

Financial Information, continued

19

(in thousands)

2015

2014

2015

2014

Revenues

Water Resources

53,852

$                   

53,431

$                    

105,667

$                 

96,557

$                    

Inliner

41,790

39,837

89,810

73,320

Heavy Civil

51,195

53,170

98,522

102,588

Mineral Services

25,821

31,971

49,127

61,459

Energy Services

3,620

4,717

7,411

7,545

Other

4,197

4,957

8,450

8,900

Intersegment eliminations

(4,158)

(3,983)

(8,399)

(7,624)

Total revenues

176,317

$                 

184,100

$                  

350,588

$                 

342,745

$                  

Equity in losses of affiliates

Mineral Services

(1,486)

$                     

(212)

$                        

(1,593)

$                     

(278)

$                        

Income (loss) from continuing operations before income

   taxes

Water Resources

4,554

$                      

5,134

$                      

8,338

$                      

6,959

$                      

Inliner

5,040

3,726

10,402

8,569

Heavy Civil

(961)

(4,637)

(2,543)

(13,217)

Mineral Services

(14,137)

(1,144)

(16,458)

(4,943)

Energy Services

(5,416)

(836)

(6,384)

(1,562)

Other

(137)

41

228

161

Unallocated corporate expenses

(11,151)

(11,725)

(21,988)

(26,738)

Gain on extinguishment of debt

—

—

4,236

—

Interest expense

(4,295)

(3,025)

(8,147)

(7,074)

Total loss from continuing operations

   before income taxes

(26,503)

$                  

(12,466)

$                   

(32,316)

$                  

(37,845)

$                   

Three Months

Six Months

Ended July 31,

Ended July 31,

Contacts

Jack Lascar/Ken Dennard

713-529-6600

layn@dennardlascar.com

www.dennardlascar.com

20

Michael J. Caliel, CEO

281-475-2691

Mike.Caliel@layne.com

J. Michael Anderson, CFO

281-475-2691

Michael.Anderson@layne.com