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Layne Christensen Co  (NAS:LAYN) Piotroski F-Score: 3 (As of Today)

Warning Sign:

Piotroski F-Score of 3 is low, which usually implies poor business operation.

The zones of discrimination were as such:

Good or high score = 7, 8, 9
Bad or low score = 0, 1, 2, 3

Layne Christensen Co has an F-score of 3. It is a bad or low score, which usually implies poor business operation.

NAS:LAYN' s Piotroski F-Score Range Over the Past 10 Years
Min: 1   Max: 9
Current: 3

1
9

During the past 13 years, the highest Piotroski F-Score of Layne Christensen Co was 9. The lowest was 1. And the median was 5.


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

* Premium members only.

Layne Christensen Co Annual Data

Jan08 Jan09 Jan10 Jan11 Jan12 Jan13 Jan14 Jan15 Jan16 Jan17
Piotroski F-Score Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 3.00 2.00 2.00 5.00 3.00

Layne Christensen Co Quarterly Data

Oct12 Jan13 Apr13 Jul13 Oct13 Jan14 Apr14 Jul14 Oct14 Jan15 Apr15 Jul15 Oct15 Jan16 Apr16 Jul16 Oct16 Jan17 Apr17 Jul17
Piotroski F-Score Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 5.00 5.00 3.00 3.00 3.00

Competitive Comparison
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap.

How is the Piotroski F-Score calculated?

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Jul17) TTM:Last Year (Jul16) TTM:
Net Income was -5.043 + -33.08 + -22.9 + -4.906 = $-65.9 Mil.
Cash Flow from Operations was 14.081 + 1.203 + -9.756 + -0.53 = $5.0 Mil.
Revenue was 153.567 + 129.617 + 111.507 + 126.16 = $520.9 Mil.
Gross Profit was 27.622 + 14.235 + 25.224 + 27.291 = $94.4 Mil.
Average Total Assets from the begining of this year (Jul16)
to the end of this year (Jul17) was
(474.357 + 473.491 + 436.151 + 392.715 + 391.426) / 5 = $433.628 Mil.
Total Assets at the begining of this year ({FiscalYear0}) was $474.4 Mil.
Long-Term Debt & Capital Lease Obligation was $164.1 Mil.
Total Current Assets was $195.0 Mil.
Total Current Liabilities was $126.5 Mil.
Total Assets was -3.442 + -16.623 + -8.803 + -5.31 = $-34.2 Mil.

Revenue was 173.179 + 159.243 + 120.646 + 123.635 = $576.7 Mil.
Gross Profit was 30.238 + 26.586 + 23.584 + 23.161 = $103.6 Mil.
Average Total Assets from the begining of last year (Jul15)
to the end of last year (Jul16) was
(514.208 + 518.508 + 488.657 + 483.067 + 474.357) / 5 = $495.7594 Mil.
Total Assets at the begining of last year (Jul15) was $514.2 Mil.
Long-Term Debt & Capital Lease Obligation was $160.6 Mil.
Total Current Assets was $278.1 Mil.
Total Current Liabilities was $147.8 Mil.

Profitability

Question 1. Return on Assets (ROA)

Net income before extraordinary items for the year divided by Total Assets at the beginning of the year.

Score 1 if positive, 0 if negative.

Layne Christensen Co's current Net Income (TTM) was {NetIncome0_f}. ==> Negative ==> Score 0.

Question 2. Cash Flow Return on Assets (CFROA)

Net cash flow from operating activities (operating cash flow) divided by Total Assets at the beginning of the year.

Score 1 if positive, 0 if negative.

Layne Christensen Co's current Cash Flow from Operations (TTM) was 5.0. ==> Positive ==> Score 1.

Question 3. Change in Return on Assets

Compare this year's return on assets (1) to last year's return on assets.

Score 1 if it's higher, 0 if it's lower.

ROA (This Year)=Net Income/Total Assets(Jul16)
=-65.929/474.357
=-0.13898604

ROA (Last Year)=Net Income/Total Assets(Jul15)
=-34.178/514.208
=-0.06646727

Layne Christensen Co's return on assets of this year was -0.13898604. Layne Christensen Co's return on assets of last year was -0.06646727. ==> Last year is higher ==> Score 0.

Question 4. Quality of Earnings (Accrual)

Compare Cash flow return on assets (2) to return on assets (1)

Score 1 if CFROA > ROA, 0 if CFROA <= ROA.

Layne Christensen Co's current Net Income (TTM) was -65.9. Layne Christensen Co's current Cash Flow from Operations (TTM) was 5.0. ==> 5.0 > -65.9 ==> CFROA > ROA ==> Score 1.

Funding

Question 5. Change in Gearing or Leverage

Compare this year's gearing (long-term debt divided by average total assets) to last year's gearing.

Score 0 if this year's gearing is higher, 1 otherwise.

Gearing (This Year: Jul17)=Long-Term Debt & Capital Lease Obligation/Total Assetsfrom Jul16 to Jul17
=164.137/433.628
=0.3785203

Gearing (Last Year: Jul16)=Long-Term Debt & Capital Lease Obligation/Total Assetsfrom Jul15 to Jul16
=160.63/495.7594
=0.32400798

Layne Christensen Co's gearing of this year was 0.3785203. Layne Christensen Co's gearing of last year was 0.32400798. ==> Last year is lower than this year ==> Score 0.

Question 6. Change in Working Capital (Liquidity)

Compare this year's current ratio (current assets divided by current liabilities) to last year's current ratio.

Score 1 if this year's current ratio is higher, 0 if it's lower

Current Ratio (This Year: Jul17)=Total Current Assets/Total Current Liabilities
=195.044/126.499
=1.54186199

Current Ratio (Last Year: Jul16)=Total Current Assets/Total Current Liabilities
=278.099/147.834
=1.88115724

Layne Christensen Co's current ratio of this year was 1.54186199. Layne Christensen Co's current ratio of last year was 1.88115724. ==> Last year's current ratio is higher ==> Score 0.

Question 7. Change in Shares in Issue

Compare the number of shares in issue this year, to the number in issue last year.

Score 0 if there is larger number of shares in issue this year, 1 otherwise.

Layne Christensen Co's number of shares in issue this year was 19.9. Layne Christensen Co's number of shares in issue last year was 19.8. ==> There is larger number of shares in issue this year. ==> Score 0.

Efficiency

Question 8. Change in Gross Margin

Compare this year's gross margin (Gross Profit divided by sales) to last year's.

Score 1 if this year's gross margin is higher, 0 if it's lower.

Gross Margin (This Year: TTM)=Gross Profit/Revenue
=94.372/520.851
=0.18118809

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=103.569/576.703
=0.17958811

Layne Christensen Co's gross margin of this year was 0.18118809. Layne Christensen Co's gross margin of last year was 0.17958811. ==> This year's gross margin is higher. ==> Score 1.

Question 9. Change in asset turnover

Compare this year's asset turnover (total sales for the year divided by total assets at the beginning of the year) to last year's asset turnover ratio.

Score 1 if this year's asset turnover ratio is higher, 0 if it's lower

Asset Turnover (This Year)=Revenue/Total Assets at the Beginning of This Year (Jul16)
=520.851/474.357
=1.09801479

Asset Turnover (Last Year)=Revenue/Total Assets at the Beginning of Last Year (Jul15)
=576.703/514.208
=1.12153642

Layne Christensen Co's asset turnover of this year was 1.09801479. Layne Christensen Co's asset turnover of last year was 1.12153642. ==> Last year's asset turnover is higher ==> Score 0.

Evaluation

Piotroski F-Score= Que. 1+ Que. 2+ Que. 3+Que. 4+Que. 5+Que. 6+Que. 7+Que. 8+Que. 9
=0+1+0+1+0+0+0+1+0
=3

Good or high score = 7, 8, 9
Bad or low score = 0, 1, 2, 3

Layne Christensen Co has an F-score of 3. It is a bad or low score, which usually implies poor business operation.

Explanation

The developer of the system is Joseph D. Piotroski is relatively unknown accounting professor who shuns publicity and rarely gives interviews.

He graduated from the University of Illinois with a B.S. in accounting in 1989, received an M.B.A. from Indiana University in 1994. Five years later, in 1999, after earning a Ph.D. in accounting from the University of Michigan, he became an associate professor of accounting at the University of Chicago.

In 2000, he wrote a research paper called "Value Investing: The Use of Historical Financial Statement Information to Separate Winners from Losers" (pdf).

He wanted to see if he can develop a system (using a simple nine-point scoring system) that can increase the returns of a strategy of investing in low price to book (referred to in the paper as high book to market) value companies.

What he found was something that exceeded his most optimistic expectations.

Buying only those companies that scored highest (8 or 9) on his nine-point scale, or F-Score as he called it, over the 20 year period from 1976 to 1996 led to an average out-performance over the market of 13.4%.

Even more impressive were the results of a strategy of investing in the highest F-Score companies (8 or 9) and shorting companies with the lowest F-Score (0 or 1).

Over the same period from 1976 to 1996 (20 years) this strategy led to an average yearly return of 23%, substantially outperforming the average S&P 500 index return of 15.83% over the same period.


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