Net income boost as investors vote on Layne closure
Published June 7th, 2018
Layne Christensen shares advanced yesterday after the company reported its second consecutive quarter of positive net income, posting a Q1 net result of $2.9 million, versus a $4 million net loss in Q1 fiscal 2018.
While Layne’s Q4 FY2018 net income was artificially elevated into the black by a $10.4 million tax benefit, noise on the bottom line in Q1 FY2019 included a $4.6 million gain on asset sales – mainly within the water resources division – set against $1.3 million in restructuring expenses associated with the company’s imminent merger with Granite Corporation. The merger will see Layne delisted from Nasdaq following shareholder approval, which is expected to come through on 13 June.
Although revenues in the water resources division fell by 5% in Q1, partly due to office closures, the group’s midstream water business – which only started operations in Q2 FY2018 – contributed $1.3 million of the $12.6 million adjusted group EBITDA number.
[*] Update: Layne shareholders approved the merger on 13 June.