Layne Christensen — D.A. Davidson 16th Annual Engineering & Construction Conference 2017
29 slides from Layne Christensen's conference presentation, Sep 20, 2017
Slide 1: D.A. Davidson 16th Annual Engineering & Construction Conference
D.A. Davidson 16th Annual Engineering & Construction Conference September 2017 Exhibit 99.1
Slide 2: Safe harbor
Safe harbor This presentation may contain 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 may include, but are not limited to, statements of plans and objectives, statements of future economic per
Slide 3: Layne overview
Leading water management and services company providing responsible, integrated solutions to address the world’s toughest water, minerals and infrastructure challenges Layne overview (1) As of 9/14/2017 (2) As of 8/25/2017 (per July 31, 2017 10-Q) (3) As of 7/31/2017 NASDAQ: LAYN Share Price(1) $12.
Slide 4: Safety and sustainability are core values
Safety and sustainability are core values “We operate our business in a way that protects and preserves the environment, and we constantly look for ways to use less fuel and water, reduce emissions, recycle waste and otherwise reduce our impacts.” – Michael Caliel, Chief Executive Officer Layne’s on
Slide 5: Investment highlights
Investment highlights Why now 1 2 3 5 What we do Unlocking value Who we are 4 Why water Track record of leadership and innovation in water sector since 1882 Business units with leading positions in attractive growth markets Management team intensely focused on profitability and creating shareholder
Slide 6: Division overview
Division overview (1) Revenues are LTM ending 7/31/17; Backlog as of 7/31/17 Water Resources Revenue: $173M(1) Backlog: $69M(1) Drilling Repair and maintenance Treatment New energy water midstream business Founded 1882 Mineral Services Revenue: $88M(1) Exploratory and mine site drilling Borehole ser
Slide 7: Why a water-focused strategy
Why a water-focused strategy Large portion of the U.S. population lives in areas of water scarcity or economic water shortage Groundwater withdrawals often exceed recharge rates Crisis issues are raising sensitivity to water quality Stressed Water Supplies and Quality Population growth occurring in
Slide 8: Broad portfolio with diverse and growing customer base
Broad portfolio with diverse and growing customer base Revenues by Segment Revenues by End Market Layne revenues for LTM period ending 7/31/2017, excluding revenues from Heavy Civil division which was sold on 4/30/2017 and classified as discontinued operations Water-related services account for over
Slide 9: Large water infrastructure programs
Large water infrastructure programs Future infrastructure investment needs Through 2050, U.S. needs for buried drinking water infrastructure projected to total more than $1.7 trillion(3) $385 billion of investment needed before 2030 to comply with Safe Drinking Water Act(4) $271 billion over the nex
Slide 10: Layne's business units are leaders in their industries
Layne’s business units are leaders in their industries Leading market positions Source: Layne estimates
Slide 11: Inliner Market Dynamics
Inliner Market Dynamics $8+ billion municipal rehabilitation market growing more than 8% per year (1) Regulations mandating customers to rehabilitate 20,000 potential customers with nearly 1 million miles of wastewater pipe (2) Market Position Key Drivers #2 U.S. CIPP competitor Fragmented industry
Slide 12: Consent decree locations map
Consent decree locations map Inliner is well-positioned to capture business in areas with the largest consent decrees and greatest rehabilitation needs Source: EPA; Layne Inliner locations
Slide 13: Impressive track record of growth and profitability
Impressive track record of growth and profitability Inliner’s long history of success ($ millions) ($ millions) Revenues Adjusted EBITDA 14% CAGR 21% CAGR Source: Layne
Slide 14: Mineral Services
Mineral Services S&P Global Market Intelligence Excludes $11.7 million of restructuring costs in FY16 Market Dynamics $5 billion mining capex market in the Americas; down from $10 billion at market peak (1) Commodity prices have improved and customer activity is increasing Market Position Key Driver
Slide 15: Focused strategy on core markets in the Americas
Layne locations Affiliate locations Focused strategy on core markets in the Americas Layne FY17 Revenues by Geography Affiliate FY17 Revenues by Geography Source: Layne Geographic Footprint Mineral Services – where we compete LTM Revenues as of 7/31/17: $88 million LTM Revenues as of 6/30/17: $134 m
Slide 16: Minerals segment – signs of recovery
Minerals segment – signs of recovery Sources: Thomson Reuters – commodity prices through 9/8/2017; S&P Global Market Intelligence
Slide 17: Water Resources Market Dynamics
Water Resources Market Dynamics $11+ billion market growing at greater than GDP growth rates (1) Largely municipal and agricultural customer base Available market of 3+ million existing water wells, growing each year (2) Market Position Key Drivers Market leader Over 130 year operating history Fragm
Slide 18: Factors driving water usage in energy
Factors driving water usage in energy Averages for Reeves County TX, data from Horizontal Wells, DrillingInfo Averages for Reeves County TX, data from Horizontal Completions, FracFocus, DrillingInfo Averages for Reeves County TX, data from FracFocus National Average, data from USGS (BBL/foot) Comple
Slide 19: Permian Basin – an ideal location
Permian Basin – an ideal location Best Producer Economics in North America (1) Over 40% of U.S. Operated Rigs in Permian(2) Water is Difficult to Obtain; Infrastructure is Underdeveloped Platts Analytics – July 2017 with $45/bbl crude oil DrillingInfo Rig Locations – September 2017 IRR (%)
Slide 20: Infrastructure positioned for success
Infrastructure positioned for success Own nearly 1,000 acres near Pecos, TX Water production of 100,000 barrels per day Over 20 miles of 22-inch HDPE pipeline from near Pecos towards Orla Two facilities with 750,000 barrels of storage Strategy to transport from areas of ample water production to are
Slide 21: Management continues to execute its strategy to transform Layne
Management continues to execute its strategy to transform Layne and enhance shareholder value Measurable progress Refine Strategy Improve Profitability Create Value Completed strategic review Clarified water-focused strategy Sold Geoconstruction and Heavy Civil divisions Exited Africa and Australia
Slide 22: Portfolio approach to unlocking value
Portfolio approach to unlocking value Water Focused Strategy Water Resources Inliner Heavy Civil Mineral Services NEAR-TERM LONGER-TERM Assess strategic alternatives Manage costs and position for industry recovery Invest and Grow Layne is investing to grow our most profitable businesses Completed sa
Slide 23: Aggressively managing overhead costs
Aggressively managing overhead costs SG&A costs significantly reduced over last three years Reduced annual overhead cost by more than $25 million through staff reductions, reduced consulting spend, reduced audit costs and other initiatives Further savings expected in FY18 from efficiency gains and s
Slide 24: Capital structure overview
Capital structure overview $34 million in cash at 7/31/17 with no debt maturities until FY19 4.25% Convertible Notes FY19 Maturity 8.00% Convertible Notes FY20 Maturity Revolving Credit Facility FY20 Maturity $100 million facility size $0 funded 4/15/19 maturity; 5/15/18 springing maturity Secured b
Slide 25: Compelling valuation potential
Compelling valuation potential + + + (Dollars in millions)
Slide 26: Investment highlights
Investment highlights Why now 1 2 3 5 What we do Unlocking value Who we are 4 Why water Track record of leadership and innovation in water sector since 1882 Business units with leading positions in attractive growth markets Management team intensely focused on profitability and creating shareholder
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Slide 28: Total Adjusted EBITDA
Total Adjusted EBITDA Use of Non- GAAP Financial Information Layne’s measure of Total Adjusted EBITDA, which may not be comparable to other companies’ measure of Total Adjusted EBITDA, represents net loss before discontinued operations, taxes, interest, depreciation and amortization, gain or loss on
Slide 29: Segment Adjusted EBITDA
Segment Adjusted EBITDA Inliner Source: Layne Mineral Services Water Resources
Layne Christensen — D.A. Davidson 16th Annual Engineering & Construction Conference 2017 on 6ix