Layne Christensen Company has a market cap of $385.9 million; its shares were traded at around $18.04 with a P/E ratio of 21.6 and P/S ratio of 0.3. Layne Christensen Company had an annual average earning growth of 10.3% over the past 10 years.
Highlight of Business Operations:Revenues increased $250,000, or 0.1%, to $289,560,000, for the three months ended July 31, 2012, and $11,982,000 or 2.2%, to $563,003,000 for the six months ended July 31, 2012, as compared to the same periods last year. On a year-to-date basis, revenues increased in all divisions except for Heavy Civil and Water Resources. A further discussion of results of operations by division is presented below.
Cost of revenues increased $1,886,000 or 0.8% to $230,458,000 (79.6% of revenues) and $23,371,000 or 5.5% to $449,774,000 (79.9% of revenues) for the three and six months ended July 31, 2012, compared to $228,572,000 (79.0% of revenues) and $426,403,000 (77.4% of revenues) for the same periods last year. Margin pressures across most divisions, especially those exposed to the municipal sector, and cost overruns in Heavy Civil have increased cost of revenues as a percentage of revenues for the three and six months ended July 31, 2012, and, in addition for the six months, not being able to replace higher margins from the Afghanistan project.
Equity in earnings of affiliates decreased 18.8% to $6,360,000 and increased 12.9% to $14,122,000 for the three and six months ended July 31, 2012, compared to $7,836,000 and $12,505,000 for the same periods last year. The year-to-date increase reflects the impact of an improved minerals exploration market in Latin America, primarily for copper and gold in Chile and Peru as well as good performance on a river crossing project in the Amazon by our Geconstruction affiliate. The decrease for the three months is primarily due to decreased earnings at our affiliate operations in Mineral Exploration due to a temporary mine shutdown by one of our clients and inefficiencies caused by transferring equipment between sites.
Other income, net for the three months ended July 31, 2012, consisted primarily of gains of $863,000 on the sale of equipment, an adjustment of $541,000 for the expected earnout liability on a prior acquisition, and foreign exchange gains of $374,000. Other income, net for the six months ended July 31, 2012, consisted primarily of a combination of gains on equipment sales of $1,210,000, an adjustment of $541,000 for the expected earnout liability on prior acquisition, and foreign exchange gains of $960,000.
The Geoconstruction Division revenues increased $11,897,000 and $16,278,000, respectively, due to Diberil revenues of $5,052,000 and the remaining activity is mostly due to progress on a ground stabilization project in Washington D.C. Income before income taxes was down $7,274,000 and $5,522,000 for the three and six months compared to the prior year due to the non-cash loss of $7,705,000 on the remeasurement of an equity investment during the current quarter, the Diberil results as discussed above, as well as last year s earnings included a dam stabilization project that ended with much better performance than expected. Upfront start-up costs on more recent projects this year also had an adverse impact on income before income taxes.
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