EXHIBIT 99
NEWS RELEASE
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CONTACTS: LAYNE CHRISTENSEN COMPANY
JERRY W. FANSKA
VICE PRESIDENT FINANCE
913-677-6858
THURSDAY, MAY 29, 2003
LAYNE CHRISTENSEN REPORTS FISCAL 2004 FIRST QUARTER RESULTS
- - NET INCOME FROM CONTINUING OPERATIONS OF $0.05 PER SHARE VERSUS $0.04 PER
SHARE LAST YEAR.
- - MINERAL EXPLORATION MARKET SHOWS SIGNS OF RECOVERY - REVENUE UP 8.9%.
- - COALBED METHANE EXPLORATION AND DEVELOPMENT EFFORTS ARE PROCEEDING AS
PLANNED - GAS PRODUCTION EXPECTED IN SECOND QUARTER.
- - WATER REVENUES DECLINE 5.4% DUE TO WEAKNESS IN MUNICIPAL SECTOR.
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FINANCIAL DATA (a) THREE MONTHS %
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(in 000's, except per share data) 4/30/03 4/30/02 CHANGE
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Net Revenues
--Water Resources $38,769 $40,998 (5.4)
--Mineral Exploration 14,056 12,904 8.9
--Geoconstruction Services 6,131 8,415 (27.1)
--Energy Services and Production 7,391 5,502 34.3
--Products and Other - 365 (100.0)
Gross Profit 18,204 18,860 (2.4)
Net Income from Continuing Operations 619 440 40.7
Dilutive EPS .05 .04 25.0
Weighted Average Shares Outstanding 12,162 12,141 *
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(a) Before discontinued operations and cumulative effect of accounting change
* Not meaningful
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"We are pleased with Layne Christensen's year-over-year improvement in the first
quarter. A weak municipal sector continued to negatively affect our water
business, however, higher prices for precious metals benefited our mineral
exploration activity. On coalbed methane projects, in which Layne Energy is a
working interest partner, we continue to make steady progress."--
ANDREW B. SCHMITT, PRESIDENT AND CHIEF EXECUTIVE OFFICER
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-more-
MISSION WOODS, KANSAS, MAY 29, 2003 - LAYNE CHRISTENSEN COMPANY (NASDAQ: LAYN),
today announced net income from continuing operations for the first quarter
ended April 30, 2003 of $619,000, or $0.05 per diluted share, compared to net
income from continuing operations of $440,000, or $0.04 per diluted share in the
same period last year. Revenues for the three months ended April 30, 2003
decreased $1,837,000, or 2.7%, to $66,347,000 compared to $68,184,000 the same
period last year. The results are before discontinued operations and cumulative
effect of accounting change.
"We are pleased with Layne Christensen's year-over-year improvement in the first
quarter." said Andrew B. Schmitt, President and Chief Executive Officer. "A weak
municipal sector continued to negatively affect our water business, however,
higher prices for precious metals benefited our mineral exploration activity. On
coalbed methane projects in which Layne Energy is a working interest partner, we
continue to make steady progress."
Gross profit as a percentage of revenues was 27.4% for the three months ended
April 30, 2003 compared to 27.7% for the three months ended April 30, 2002. The
decrease in gross profit percentage was primarily attributable to pricing
pressures associated with increased competition in certain markets served by the
Company.
WATER RESOURCES DIVISION
(in thousands)
Three months ended
April 30,
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2003 2002
---- ----
Revenues $38,769 $40,998
Income from continuing operations 5,400 5,958
Water resources revenue decreased 5.4% to $38,769,000 from $40,998,000 for the
three months ended April 30, 2003 and 2002. The decrease in revenue was
primarily attributable to the continued impact of reduced municipal spending and
the resulting competitive pressures in the Company's markets.
Income from continuing operations for the water resources division decreased
9.4% to $5,400,000 for the three months ended April 30, 2003, compared to
$5,958,000 for the three months ended April 30, 2002. The decrease in income
from continuing operations was the result of the impact of competitive pressures
on job margins and start-up expenses related to the Company's groundwater
transfer project in Texas.
MINERAL EXPLORATION DIVISION
(in thousands)
Three months ended
April 30,
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2003 2002
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Revenues $14,056 $12,904
Loss from continuing operations (178) (485)
Mineral exploration revenues increased 8.9% to $14,056,000 from $12,904,000 for
the three months ended April 30, 2003 and 2002. The increase was primarily
attributable to increased exploration activity in North America and West Africa
due to higher precious metal prices, partially offset by downsizing the
Company's operations in Zambia.
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The loss from continuing operations for the mineral exploration division was
$178,000 for the three months ended April 30, 2003, compared to a loss from
continuing operations of $485,000 for the three months ended April 30, 2002. The
reduced loss in the division reflects the increased activity levels noted above
and lower depreciation related to assets fully depreciated in prior periods,
partially offset by increased expenses in Australia to bring equipment into
compliance with recently enacted changes to local transportation requirements.
GEOCONSTRUCTION SERVICES DIVISION
(in thousands)
Three months ended
April 30,
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2003 2002
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Revenues $6,131 $8,415
Income from continuing operations 262 1,341
Geoconstruction services revenues decreased 27.1% to $6,131,000 for the three
months ended April 30, 2003, compared to $8,415,000 for the three months ended
April 30, 2002. The decrease was attributable to delays in commencing work on
certain public sector projects.
The geoconstruction services division had income from continuing operations of
$262,000 for the three months ended April 30, 2003, compared to $1,341,000 for
the three months ended April 30, 2002. The decrease in income from continuing
operations was primarily the result of reduced profit associated with lower
volume.
ENERGY SERVICES AND PRODUCTION DIVISION
(in thousands)
Three months ended
April 30,
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2003 2002
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Revenues $7,391 $5,502
Loss from continuing operations (319) (847)
Energy services revenues increased 34.3% to $7,391,000 for the three months
ended April 30, 2003, compared to revenues of $5,502,000 for the three months
ended April 30, 2002. The increase in revenue was primarily attributable to an
increase in tar sands activity in Canada and increased third-party coalbed
methane exploration drilling in the United States.
The loss from continuing operations for the energy services and production
division was $319,000 for the three months ended April 30, 2003, compared to a
loss from continuing operations of $847,000 for the three months ended April 30,
2002. The continued loss, despite higher revenues, was the result of costs
associated with complications on a drilling project in Canada and a still weak
energy service market in the Gulf of Mexico region.
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OUTLOOK
Looking ahead to the second quarter, Schmitt pointed to several challenges and
opportunities. "We have recently reduced headcount for the second time in the
past six months. This latest reduction will result in second quarter charges for
severance and related benefits that could amount to approximately $1.5 million.
In the second quarter we expect water resources revenues to be down as much as
10%. The issues facing the water industry are how much the municipal sector
spending declines and how long it lasts. The second quarter for our minerals
exploration division, buoyed by increased precious metal pieces, should be
better year-over-year in both revenue and earnings. Baring no further scheduling
delays, our geoconstruction division should have a much improved second quarter
with revenue up potentially 20-25% and profits up approximately 2-3 times from
the first quarter. In our energy division, we hope to have improved results in
both revenue and earnings in the second quarter as we are beginning to see the
first indication of a pickup in service activity in the Gulf of Mexico. We are
also seeing growing demand for coalbed methane and shallow conventional gas
drilling in the United States. The amount of improvement in our minerals,
geoconstruction and energy division results will be key to offsetting severance
related charges and declines in second quarter water activity."
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 are based on current expectations and are subject to
certain risks, uncertainties and assumptions, including, but not limited to,
prevailing prices for various metals and unanticipated slowdowns in the
Company's major markets. Should one or more of these underlying assumptions
prove incorrect, actual results may vary materially from those currently
estimated. These statements are made as of the date of this release, and 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.
Layne Christensen Company provides sophisticated services and related products
for the water, mineral, construction and energy markets.
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LAYNE CHRISTENSEN COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except share and per share data)
Three Months
Ended April 30,
(unaudited)
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2003 2002
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Revenues $ 66,347 $ 68,184
Cost of revenues (exclusive of depreciation shown below) 48,143 49,324
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Gross profit 18,204 18,860
Selling, general and administrative expenses 13,257 13,653
Depreciation and amortization 3,386 3,826
Other income (expense):
Equity in earnings of affiliates 92 272
Interest (559) (601)
Other, net 279 (51)
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Income from continuing operations before income taxes 1,373 1,001
Income tax expense 810 528
Minority interest 56 (33)
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Net income from continuing operations before discontinued
operations and cumulative effect of accounting change 619 440
Loss from discontinued operations, net of income taxes of ($119) -- (189)
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Net income before cumulative effect of accounting change 619 251
Cumulative effect of accounting change, net of income taxes of $5,796 -- (14,429)
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Net income (loss) $ 619 $ (14,178)
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Basic income (loss) per share:
Net income from continuing operations $ 0.05 $ 0.04
Loss from discontinued operations, net of tax -- (0.02)
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Net income before cumulative effect of accounting change 0.05 0.02
Cumulative effect of accounting change, net of tax -- (1.23)
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Net income (loss) per share $ 0.05 $ (1.21)
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Diluted income (loss) per share:
Net income from continuing operations $ 0.05 $ 0.04
Loss from discontinued operations, net of tax -- (0.02)
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Net income before cumulative effect of accounting change 0.05 0.02
Cumulative effect of accounting change, net of tax -- (1.19)
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Net income (loss) per share $ 0.05 $ (1.17)
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Weighted average shares outstanding 11,903,000 11,758,000
Dilutive stock options 259,000 383,000
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12,162,000 12,141,000
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