FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended April 30, 1996.
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 33-48432
LAYNE CHRISTENSEN COMPANY
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation or organization)
48-0920712
(I.R.S. Employer Identification No.)
1900 Shawnee Mission Parkway, Mission Woods, Kansas 66205
(Address of principal executive offices) (Zip Code)
(913) 362-0510
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed
since last report.)
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
There were 8,871,467 shares of common stock, $.01 par value
per share, outstanding on May 17, 1996.
<PAGE>
PART I
ITEM 1. Financial Statements
<TABLE>
LAYNE CHRISTENSEN COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In Thousands of Dollars)
<CAPTION>
ASSETS April 30, January 31,
1996 1996
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 381 $ 382
Customer receivables, less allowance
of $939 and $887, respectively 34,692 33,572
Costs and estimated earnings in
excess of billings on
uncompleted contracts 12,268 9,777
Inventories 16,028 15,495
Deferred income taxes 6,721 7,082
Other 1,961 1,305
Total current assets 72,051 67,613
Property and equipment:
Land 4,718 4,469
Buildings 12,377 12,064
Machinery and equipment 95,136 93,497
112,231 110,030
Less - Accumulated depreciation (64,249) (62,141)
Net property and equipment 47,982 47,889
Other assets:
Investment in foreign affiliates 15,541 14,921
Investment in domestic affiliate 2,027 2,203
Intangible assets, at cost less
accumulated amortization 499 525
Property and equipment held for sale 272 198
Other 1,073 828
Total other assets 19,412 18,675
$ 139,445 $ 134,177
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>
<TABLE>
LAYNE CHRISTENSEN COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS - (Continued)
(In Thousands of Dollars, except per share data)
<CAPTION>
April 30, January 31,
1996 1996
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C>
Current liabilities:
Accounts payable $ 12,581 $ 13,225
Current maturities of long-term debt 107 105
Accrued compensation 7,293 8,869
Accrued insurance expense 5,282 4,936
Accrued integration 2,249 2,703
Other accrued expenses 7,366 7,088
Billings in excess of costs and
estimated earnings on uncompleted contracts 4,300 3,891
Total current liabilities 39,178 40,817
Noncurrent and deferred liabilities:
Long-term debt 33,900 28,428
Deferred income taxes 2,275 2,323
Accrued insurance expense 6,554 6,198
Other 2,070 2,439
Total noncurrent and deferred liabilities 44,799 39,388
Contingencies
Stockholders' equity:
Preferred stock, par value $.01 per
share, 5,000,000 shares authorized,
none issued and outstanding -- --
Common stock, par value $.01 per share,
30,000,000 shares authorized,
8,871,467 and 8,839,845 shares issued
and outstanding, respectively 89 88
Capital in excess of par value 39,293 38,954
Retained earnings 17,273 16,170
Notes receivable from management
stockholders (292) (313)
Unrecognized pension cost (756) (777)
Cumulative translation adjustment (139) (150)
Total stockholders' equity 55,468 53,972
$ 139,445 $ 134,177
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>
<TABLE>
LAYNE CHRISTENSEN COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In Thousands of Dollars, except per share data)
<CAPTION>
Three Months Ended April 30,
1996 1995
<S> <C> <C>
Revenues:
Net service revenues $ 47,256 $ 34,537
Net product sales 6,517 3,022
Total 53,773 37,559
Cost of revenues (exclusive of
depreciation shown below):
Cost of service revenues 34,976 25,155
Cost of product sales 4,727 2,201
Total 39,703 27,356
Gross profit 14,070 10,203
Selling, general and
administrative expenses 9,737 6,818
Depreciation 2,841 1,994
Operating income 1,492 1,391
Other income (expense):
Equity earnings of foreign affiliates 1,102 --
Interest (679) (116)
Other, net 90 (78)
Income before income taxes 2,005 1,197
Income tax expense 902 551
Net income $ 1,103 $ 646
Net income per common and dilutive
equivalent share $ 0.12 $ 0.09
Weighted average number of common
and dilutive equivalent
shares outstanding:
Weighted average shares outstanding 8,845,000 7,307,000
Dilutive stock options 67,000 64,000
8,912,000 7,371,000
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>
<TABLE>
LAYNE CHRISTENSEN COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW
(In Thousands of Dollars)
<CAPTION>
Three Months Ended April 30,
1996 1995
<S> <C> <C>
Cash flow from operating activities:
Net income $ 1,103 $ 646
Adjustments to reconcile net
income to cash from operations:
Depreciation and amortization 2,959 2,031
Deferred income taxes 313 (128)
Equity earnings in foreign affiliates (1,102) --
Dividends received from foreign affiliates 482 --
Gain from disposal of property and equipment (19) (15)
Changes in current assets and liabilities:
Increase in customer receivables (1,120) (1,571)
Increase in cost and estimated
earnings in excess of billings
on uncompleted contracts (2,491) (605)
Increase in inventories (533) (300)
(Increase) decrease in other
current assets (656) 252
Decrease in accounts payable
and accrued expenses (2,050) (5,083)
Increase in billings in excess of
costs and estimated earnings
on uncompleted contracts 409 749
Other, net 209 358
Cash from operating activities (2,496) (3,666)
Cash flow from investing activities:
Proceeds from disposal of property and equipment 179 33
Investment in domestic affiliate 180 --
Additions to property and equipment (3,168) (2,641)
Cash from investing activities (2,809) (2,608)
Cash flow from financing activities:
Net borrowings under revolving facility 5,500 6,000
Repayments of long-term debt (26) --
Payments on notes receivable from
management stockholders 21 22
Debt issuance costs (191) 15
Cash from financing activities 5,304 6,037
Net decrease in cash and cash equivalents (1) (237)
Cash and cash equivalents at
beginning of period 382 579
Cash and cash equivalents at end of period $ 381 $ 342
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>
LAYNE CHRISTENSEN COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Accounting Policies and Basis of Presentation
The consolidated financial statements include the accounts of the
Layne Christensen Company and its subsidiaries (together, the
Company), all of which are wholly-owned. All significant
intercompany transactions have been eliminated. Investments in
affiliates (33% to 50% owned) in which the Company exercises
influence over operating and financial policies are accounted for
on the equity method. The unaudited consolidated financial
statements should be read in conjunction with the consolidated
financial statements of the Company for the year ended January
31, 1996 as filed in its Annual Report on Form 10-K.
The accompanying unaudited consolidated financial statements
include all adjustments (consisting only of normal recurring
accruals) which, in the opinion of management, are necessary for
a fair presentation of financial position, results of operations
and cash flows. Results of operations for interim periods are
not necessarily indicative of results to be expected for a full
year.
Net income per common and dilutive equivalent share was
calculated by dividing net income by the weighted average number
of common and dilutive equivalent shares outstanding. Options to
purchase common stock are included except when their effect is
antidilutive.
The amounts paid for income taxes and interest are as follows (in
thousands of dollars):
Three Months Ended April 30,
1996 1995
Income taxes $171 $ 78
Interest 464 75
During the first quarter of fiscal 1997, the Company issued
31,622 shares of common stock to employees related to fiscal 1996
compensation awards. Total value of this award was approximately
$340,000 which was accrued at January 31, 1996.
Certain amounts for the prior period have been reclassified to
conform with the three months ended April 30, 1996.
2. Inventories
The Company values inventories at the lower of cost (first-in,
first-out) or market (in thousands of dollars):
As of
April 30, January 31,
1996 1996
Raw materials $ 2,280 $ 2,070
Work in process 701 846
Finished products, parts and supplies 13,047 12,579
Total $ 16,028 $ 15,495
<PAGE>
3. Contingencies
The Company provides environmental drilling and consulting
services that are related to the cleanup of hazardous substances,
toxic wastes and other pollutants. Rendering these services
exposes the Company to potential significant liability for claims
related to the costs of environmental remediation and other
damages. The Company has obtained a "claims made" pollution
liability policy limited to $10 million for any individual claim
and $10 million for all claims in the aggregate made under such
policy in any given year. While the Company believes this is a
cost effective level of environmental insurance coverage in light
of the risks associated with its business, no assurance can be
given that the amount and scope of coverage will be adequate.
The Company's former parent, The Marley Company ("Marley"),
maintains insurance reserves for the Company on its financial
statements to cover expected losses under various casualty
insurance policies for occurrences prior to April 30, 1992.
Those reserves were funded through intercompany charges to the
Company, which were calculated on the basis of the estimated
insured losses incurred by the Company. The Company has
indemnified Marley for claims or retroactive insurance premiums
on those policies that exceed the amount of reserves attributable
to the Company's estimated losses through April 30, 1992. The
Company believes that the amount of such reserves will be
sufficient to cover its reasonably anticipated insured losses
under past insurance policies.
The Company is involved in various matters of litigation, claims
and disputes which have arisen in the ordinary course of the
Company's business. While the resolution of any of these matters
may have an impact on the financial results for the period in
which the matter is resolved, the Company believes that the
ultimate disposition of these matters will not, in the aggregate,
have a material adverse effect upon its business or consolidated
financial position.
<PAGE>
ITEM 2. Management's Discussion and Analysis of Results of
Operations and Financial Condition
The following table presents, for the periods indicated, the
percentage relationship which certain items reflected in the
Company's consolidated statements of income bear to revenues and
the percentage increase or decrease in the dollar amount of such
items period to period.
Three Months Period-to-
Ended April 30, Period
1996 1995 Change
Revenues:
Water well drilling 28.1% 34.8% 15.5%
Well and pump repair and maintenance 21.3 26.7 14.3
Mineral exploration drilling 23.9 9.0 281.7
Environmental drilling 10.6 17.5 (13.3)
Specialty contracting and other services 4.0 4.0 42.4
Total service revenues 87.9 92.0 36.8
Product sales 12.1 8.0 115.7
Total revenues 100.0% 100.0% 43.2
Cost of revenues:
Cost of service revenues 74.0% 72.8% 39.0
Cost of product sales 72.5 72.8 114.8
Total cost of revenues 73.8 72.8 45.1
Gross profit 26.2 27.2 37.9
Selling, general and administrative
expenses 18.1 18.2 42.8
Depreciation 5.3 5.3 42.5
Operating income 2.8 3.7 7.3
Other income (expense):
Equity earnings of foreign affiliates 2.0 -- *<F1>
Interest (1.3) (.3) *<F1>
Other, net .2 (.2) *<F1>
Income before income taxes 3.7 3.2 67.5
Income tax expense 1.7 1.5 63.7
Net income 2.0% 1.7% 70.7%
[FN]
<F1>
* Not meaningful.
Results of Operations
In a December 1995 merger transaction, the Company acquired
Christensen Boyles Corporation ("CBC"), a world leader in
providing diamond core drilling services for mineral exploration
and among the largest manufacturers of diamond core bits, core
barrels, drilling rigs and related equipment used by the mining
industry. As a result, the first quarter of fiscal 1997 includes
the results of operations for CBC.
Revenues for the first quarter of fiscal 1997 increased
$16,214,000 or 43.2% to $53,773,000 compared to $37,559,000 for
the first quarter of fiscal 1996. Water well drilling revenues
increased 15.5% to $15,115,000 from $13,083,000 and well and pump
repair and maintenance revenues increased 14.3% to $11,451,000
from $10,017,000 during the quarter compared to the first quarter
of fiscal 1996. These increases are primarily the result of
better weather conditions in California compared to the prior
year and increased demand for the Company's well and pump repair
and maintenance services in the southeast. Mineral
<PAGE>
exploration drilling increased 281.7% to $12,847,000 from
$3,366,000 during the quarter, compared to the first quarter of
fiscal 1996. The increase is the result of the merger with CBC
and continued strong mining demand in Latin America.
Environmental revenues decreased 13.3% to $5,688,000 from
$6,559,000 in the quarter compared to the first quarter of 1996.
The Company believes this decrease is mainly a result of a
continuing soft market for the environmental services offered by
the Company. Product sales increased 115.7% to $6,519,000 from
$3,022,000 as a result of the merger with CBC.
Gross profit for the quarter decreased to 26.2% compared to 27.2%
for the same period last year. The decrease in gross profit as a
percent of revenues is attributable to product mix. In general,
CBC had lower gross profit on its services.
Selling, general and administrative expenses increased to
$9,737,000 compared to $6,818,000 for the same period last year.
These expenses were 18.1% of revenues for the first quarter of
fiscal 1997 compared to 18.2% in the prior year. The increase in
selling, general and administrative expenses is a result of the
merger with CBC.
Depreciation increased to $2,841,000 compared to $1,994,000 for
the same period last year. Depreciation was 5.3% of revenues for
the first quarter of fiscal 1997 compared to 5.3% in the prior
year. The increase in depreciation is primarily a result of the
merger with CBC.
Equity in earnings of foreign affiliates were $1,102,000. These
earnings are a result of the investments in foreign affiliates
acquired in connection with the merger with CBC.
Interest expense increased $563,000 to $679,000 in the first
quarter of fiscal 1997 compared to $116,000 in the first quarter
of fiscal 1996. The increase is primarily a result of the
increased borrowings as a result of the merger with CBC.
Income taxes of $902,000 for the first quarter of fiscal 1997
increased from $551,000 in the same period last year as a result
of higher income before taxes compared to the prior year. The
effective tax rate for the first quarter decreased to 45% from
46% for the same period last year as a result of the merger with
CBC.
At the time of the merger with CBC, the Company accrued certain
costs for the integration of CBC operations. For the first
quarter of fiscal 1997, the Company's integration resulted in a
net cash outflow of $454,000. The Company is proceeding with the
movement of both employees and assets, and will incur additional
cash outflows later in fiscal 1997. The Company's liquidity and
capital resources will not be significantly affected by the
integration outflows.
Changes in Financial Condition
Cash from operations was $(2,496,000) in the first quarter of
fiscal 1997 compared to $(3,666,000) for the same period last
year. The change in cash from operations was primarily a result
of more profitable operations for the quarter compared to the
same period last year. Additions to property and equipment were
$3,168,000 during the quarter. The Company's borrowings under
its revolving credit facility at the end of the period were
$7,500,000.
The Company believes that borrowings from its available credit
agreement and cash from operations will be sufficient for the
Company's seasonal cash requirements and to fund its budgeted
capital expenditures for at least the balance of the fiscal year.
<PAGE>
PART II
ITEM 1 - Legal Proceedings
NONE
ITEM 2 - Changes in Securities
NOT APPLICABLE
ITEM 3 - Defaults Upon Senior Securities
NOT APPLICABLE
ITEM 4 - Submission of Matters to a Vote of Security Holders
NOT APPLICABLE
ITEM 5 - Other Information
NONE
ITEM 6 - Exhibits and Reports on Form 8-K
There were no Reports on Form 8-K filed during the quarter.
The exhibits filed with or incorporated by reference in this
report are listed below:
Exhibit No. Description
3(1) Restated Certificate of Incorporation of Registrant
11(1) Statement re: Computation of Per Share Earnings
27(1) Financial Data Schedule
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
Layne Christensen Company
(Registrant)
DATE: June 10,1996 /s/ A. B. Schmitt
A. B. Schmitt, President
and Chief Executive Officer
DATE: June 10, 1996 /s/ Jerry W. Fanska
Jerry W. Fanska,
Vice President - Finance
and Treasurer
<PAGE>
INDEX TO EXHIBITS
Exhibit
No. Description Page
3(1) Restated Certificate of Incorporation of Registrant 13
11(1) Statement re: Computation of Per Share Earnings 22
27(1) Financial Data Schedule --
EXHIBIT 3(1)
RESTATED
CERTIFICATE OF INCORPORATION
OF
LAYNE CHRISTENSEN COMPANY
The undersigned, being an officer of Layne Christensen
Company (the "Corporation"), a corporation organized and existing
under the laws of the State of Delaware, does hereby certify as
follows:
1. The name of the Corporation is Layne Christensen
Company. The Corporation was originally incorporated under the
name New Layne-Western Company, Inc. The date of filing of its
original Certificate of Incorporation with the Secretary of State
of Delaware was May 19, 1981.
2. This Restated Certificate of Incorporation only
restates and integrates and does not further amend the provisions
of the Corporation's Restated Certificate of Incorporation as
theretofore amended or supplemented and there is no discrepancy
between these provisions and the provisions of the Restated
Certificate of Incorporation.
3. This Restated Certificate of Incorporation has
been duly adopted in accordance with the provisions of Section
245 of the General Corporation Law of the State of Delaware.
4. The text of the certificate of incorporation of
the Corporation, as amended or supplemented, is hereby restated,
in full, to read as follows:
<PAGE>
ARTICLE I
NAME OF THE CORPORATION
The name of the Corporation is:
Layne Christensen Company.
ARTICLE II
REGISTERED AGENT AND REGISTERED OFFICE
The address of its registered office in the State of
Delaware is 1209 Orange Street, in the City of Wilmington, County
of New Castle. The name of its registered agent at such address
is The Corporation Trust Company c/o Corporation Trust Center.
ARTICLE III
PURPOSE OF THE CORPORATION
The nature of the business or purposes to be conducted
or promoted is:
To engage in any lawful act or activity for which
corporations may be organized under the General Corporation Law
of the State of Delaware (the "General Corporation Law").
ARTICLE IV
AUTHORIZED CAPITAL STOCK
The total number of shares of all classes of capital
stock which the Corporation shall have authority to issue is
thirty-five million (35,000,000), consisting of thirty million
(30,000,000) shares of common stock, par value $.01 per share
(hereinafter called the "Common Stock"), and five million
(5,000,000) shares of preferred stock, par value $.01 per share
(hereinafter called the "Preferred Stock.")
The following is a description of each of the classes
of stock of the Corporation and a statement of the powers,
preferences and rights of such stock, and the qualifications,
limitations and restrictions thereof:
A. AUTHORITY OF THE BOARD OF DIRECTORS. The Preferred
Stock may be issued, from time to time, in one or more series,
and each series shall be known and designated by such
designations as may be stated and expressed in a resolution or
resolutions adopted by the Board of Directors of the Corporation
and as shall have been set forth in a certificate
<PAGE>
made, executed, acknowledged, filed and recorded in the manner
required by the laws of the State of Delaware in order to make
the same effective. Each series shall consist of such number of
shares as shall be stated and expressed in such resolution or
resolutions providing for the issue of Preferred Stock of such
series together with such additional number of shares as the
Board of Directors by resolution or resolutions may from time to
time determine to issue as a part of such series. All shares of
any one series of such Preferred Stock shall be alike in every
particular except that shares issued at different times may
accumulate dividends from different dates. The Board of
Directors shall have power and authority to state and determine
in the resolution or resolutions providing for the issue of each
series of Preferred Stock the number of shares of each such
series authorized to be issued, the voting powers (if any) and
the designations, preferences and relative, participating,
optional or other rights appertaining to each such series, and
the qualifications, limitations or restrictions thereof
(including, but not by way of limitation, full power and
authority to determine as to the Preferred Stock of each such
series, the rate or rates of dividends payable thereon, the times
of payment of such dividends, the prices and manner upon which
the same may be redeemed, the amount or amounts payable thereon
in the event of liquidation, dissolution or winding up of the
Corporation or in the event of any merger or consolidation of or
sale of assets by the Corporation, the rights (if any) to convert
the same into, and/or to purchase, stock of any other class or
series, the terms of any sinking fund or redemption or purchase
account (if any) to be provided for shares of such series of the
Preferred Stock, and the voting powers (if any) of the holders of
any series of Preferred Stock generally or with respect to any
particular matter, which may be less than, equal to or greater
than one vote per share, and which may, without limiting the
generality of the foregoing, include the right, voting as a
series by itself or together with the holders of any other series
of Preferred Stock or all series of Preferred Stock as a class,
to elect one or more directors of the Corporation generally or
under such specific circumstances and on such conditions, as
shall be provided in the resolution or resolutions of the Board
of Directors adopted pursuant hereto, including, without
limitation, in the event there shall have been a default in the
payment of dividends on or redemption of any one or more series
of Preferred Stock). The Board of Directors may from time to
time decrease the number of shares of any series of Preferred
Stock (but not below the number thereof then outstanding) by
providing that any unissued shares previously assigned to such
series shall no longer constitute part thereof and may assign
such unissued shares to an existing or newly created series. The
foregoing provisions of this paragraph A with respect to the
creation or issuance of series of Preferred Stock shall be
subject to any additional conditions with respect thereto which
may be contained in any resolutions then in effect which shall
have theretofore been adopted in accordance with the foregoing
provisions of this paragraph A with respect to any then
outstanding series of Preferred Stock.
B. VOTING RIGHTS.
1. Common. Except as may otherwise be required by
law, and subject to the provisions of such resolution or
resolutions as may be adopted by the Board of Directors pursuant
to Paragraph A of this Article IV granting the holders of one
<PAGE>
or more series of Preferred Stock exclusive voting powers with
respect to any matter, each holder of Common Stock shall have one
vote in respect of each share of Common Stock held on all matters
voted upon by the stockholders.
2. Preferred. The Preferred Stock shall have no
voting rights and shall have no rights to receive notice of any
meetings except as required by law or expressly provided in the
resolution establishing any series thereof.
C. TERMS OF COMMON STOCK. The Common stock shall be
subject to the express terms of the Preferred Stock and any
series thereof. Each share of Common Stock shall be equal to
every other share of Common Stock.
After the provisions with respect to preferential dividends
on any series of Preferred Stock (fixed in accordance with the
provisions of Paragraph A of this Article IV), if any, shall have
been satisfied and after the Corporation shall have complied with
all the requirements, if any, with respect to redemption of, or
the setting aside of sums as sinking funds or redemption or
purchase accounts with respect to, any series of Preferred Stock
(fixed in accordance with the provisions of Paragraph A of this
Article IV), and subject further to any other conditions that may
be fixed in accordance with the provisions of Paragraph A of this
Article IV, then, and not otherwise, the holders of Common Stock
shall be entitled to receive such dividends as may be declared
from time to time by the Board of Directors.
In the event of the voluntary or involuntary liquidation,
dissolution or winding-up of the Corporation, after distribution
in full of the preferential amounts, if any (fixed in accordance
with the provisions of Paragraph A of this Article IV), to be
distributed to the holders of Preferred Stock by reason thereof,
the holders of Common Stock shall, subject to the additional
rights, if any (fixed in accordance with the provisions of
Paragraph A of this Article IV), of the holders of any
outstanding shares of Preferred Stock, be entitled to receive all
of the remaining assets of the Corporation, tangible and
intangible, of whatever kind available for distribution to
stockholders ratably in proportion to the number of shares of
Common Stock held by them respectively.
The authorized amount of shares of Common Stock and of
Preferred Stock may, without a class or series vote, be increased
or decreased from time to time by the affirmative vote of the
holders of a majority of the combined voting power of the then-
outstanding shares of capital stock of the Corporation that
pursuant to the Certificate of Incorporation are entitled to vote
generally in the election of directors of the Corporation, voting
together as a single class.
ARTICLE V
CORPORATE EXISTENCE
The Corporation is to have perpetual existence.
<PAGE>
ARTICLE VI
AMENDMENT OF THE BYLAWS
In furtherance and not in limitation of the powers
conferred by statute, the Board of Directors is expressly
authorized to make, alter or repeal the Bylaws of the
Corporation.
ARTICLE VII
DIRECTOR LIABILITY: INDEMNIFICATION
A director of the Corporation shall not be personally
liable to the Corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director, except for
liability (i) for any breach of the director's duty of loyalty to
the Corporation or its stockholders, (ii) for acts or omissions
not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the General
Corporation Law, as the same exists or hereafter may be amended,
or (iv) for any transaction from which the director derived an
improper personal benefit. If the General Corporation Law
hereafter is amended to authorize the further elimination or
limitation of the liability of the directors, then the liability
of a director shall be eliminated or limited to the fullest
extent permitted by the amended General Corporation Law. In
addition to the limitation on personal liability of directors
provided herein, the Corporation shall, to the fullest extent
permitted by the General Corporation Law: (x) indemnify its
officers and directors and (y) advance expenses incurred by such
officers or directors in relation to any action, suit or
proceeding. Any repeal or modification of this paragraph by the
stockholders of the Corporation shall be prospective only and
shall not adversely affect any limitation on the personal
liability or right to indemnification or advancement of expenses
hereunder existing at the time of such repeal or modification.
ARTICLE VIII
MEETINGS OF STOCKHOLDERS
A. Meetings of stockholders may be held within or
without the State of Delaware, as the Bylaws may provide. The
books of the Corporation may be kept (subject to any provision
contained in the statutes) outside the State of Delaware at such
place or places as may be designated from time to time by the
Board of Directors or in the Bylaws of the Corporation.
Elections of directors need not be by written ballot unless the
Bylaws of the Corporation shall so provide.
B. Whenever a compromise or arrangement is proposed
between the Corporation and its creditors or any class of them
and/or between the Corporation and its stockholders or any class
of them, any court of equitable jurisdiction within the State of
Delaware may, on the application in a summary way of the
Corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for the
Corporation under the provisions of Section 291 of the General
Corporation Law or on
<PAGE>
the application of trustees in dissolution or of any receiver or
receivers appointed for the Corporation under the provisions of
Section 279 of the General Corporation Law order a meeting of the
creditors or class of creditors, and/or of the stockholders or
class of stockholders of the Corporation, as the case may be, to
be summoned in such manner as the said court directs. If a
majority in number representing three-fourths in value of the
creditors or class of creditors, and/or of the stockholders or
class of stockholders of the Corporation, as the case may be,
agree to any compromise or arrangement and to any reorganization
of the Corporation as consequence of such compromise or
arrangement, the said compromise or arrangement and the said
reorganization shall, if sanctioned by the court to which the
said application has been made, be binding on all the creditors
or class of creditors, and/or on all the stockholders or class of
stockholders of the Corporation, as the case may be, and also on
the Corporation.
ARTICLE IX
FURTHER AMENDMENTS
Subject to the provisions hereof, the Corporation
reserves the right at any time, and from time to time, to amend,
alter, repeal, or rescind any provision contained herein, in the
manner now or hereafter prescribed by law, and other provisions
authorized by the laws of the State of Delaware at the time in
force may be added or inserted, in the manner now or hereafter
prescribed by law; and all rights, preferences and privileges of
whatsoever nature conferred upon stockholders, directors, or any
other persons whomsoever by and pursuant to this Certificate of
Incorporation in its present form or as hereafter amended are
granted subject to this reservation.
ARTICLE X
CLASSIFIED BOARD
A. Except as may otherwise be provided pursuant to Article
IV hereof with respect to any rights of holders of Preferred
Stock to elect additional directors, the number of directors of
the Corporation shall be not less than one (1) nor more than nine
(9), with the then-authorized number of directors being fixed
from time to time by or pursuant to a resolution passed by the
Board of Directors of the Corporation.
B. The directors of the Corporation (other than any
directors who may be elected by holders of Preferred Stock as
provided for pursuant to Article IV hereof) shall be and are
divided into three classes: Class I, Class II and Class III.
The number of directors in each class shall be as nearly equal as
the then-authorized number of directors constituting the Board of
Directors permits. Each director shall serve for a term ending
on the date of the third annual meeting of stockholders (an
"Annual Meeting") following the Annual Meeting at which such
director was elected; provided, however, that each initial
director in Class I shall serve for a term ending on the date of
the Annual Meeting held in 1993, each initial director in Class
II shall serve for a term ending on the date of the Annual
Meeting held in 1994, and each initial director in Class III
shall serve for a
<PAGE>
term ending on the date of the Annual Meeting held in 1995. Any
director who may be elected by holders of Preferred Stock as
provided for pursuant to Article IV hereof shall serve for a term
ending on the date of the next Annual Meeting following the
Annual Meeting at which such director was elected.
C. In the event of any increase or decrease in the
authorized number of directors:
1. Each director then serving shall nevertheless
continue as a director of the class of which he is a member until
the expiration of his term or his prior death, retirement,
resignation or removal; and
2. Except to the extent that an increase or decrease
in the authorized number of directors occurs in connection with
the rights of holders of Preferred Stock to elect additional
directors, the newly-created or eliminated directorships
resulting from any increase or decrease shall be apportioned by
the Board of Directors among the three classes so as to keep the
number of directors in each class as nearly equal as possible.
D. Notwithstanding the provisions of Paragraphs B and C of
this Article X, each director shall serve until his successor is
elected and qualified or until his death, retirement, resignation
or removal. Except as may otherwise be provided pursuant to
Article IV hereof with respect to any rights of holders of
Preferred Stock, a director may be removed without cause either
by (i) a majority vote of the directors then in office (including
for purposes of calculating the number of directors then in
office the director subject to such removal vote), or (ii) the
affirmative vote of the stockholders holding at least 80% of the
capital stock entitled to vote for the election of directors.
E. Except as may otherwise be provided pursuant to Article
IV hereof with respect to any rights of holders of Preferred
Stock to elect additional directors, should a vacancy in the
Board of Directors occur or be created (whether arising through
death, retirement, resignation or removal or through an increase
in the number of authorized directors), such vacancy shall be
filled by the affirmative vote of a majority of the remaining
directors, even though less than a quorum of the Board of
Directors. A director so elected to fill a vacancy shall serve
for the remainder of the term of the class to which he was
elected.
F. During any period when the holders of any series of
Preferred Stock have the right to elect additional directors as
provided for or fixed pursuant to the provisions of Article IV
hereof, then upon commencement and for the duration of the period
during which such right continues (i) the then otherwise total
and authorized number of directors of the Corporation shall
automatically be increased by such specified number of directors,
and the holders of such Preferred Stock shall be entitled to
elect the additional directors so provided for or fixed pursuant
to said provisions, and (ii) each such additional director shall
serve until such director's successor shall have been duly
elected and qualified, or
<PAGE>
until such director's right to hold such office terminates
pursuant to said provisions, whichever occurs earlier, subject to
his earlier death, disqualification, resignation or removal.
Except as otherwise provided by the Board of Directors in the
resolution or resolutions establishing such series, whenever the
holders of any series of Preferred Stock having such right to
elect additional directors are divested of such right pursuant to
the provisions of such stock, the terms of office of all such
additional directors elected by the holders of such stock, or
elected to fill any vacancies resulting from the death,
resignation, disqualification or removal of such additional
directors, shall forthwith terminate and the total and authorized
number of directors of the Corporation shall be reduced
accordingly.
ARTICLE XI
CERTAIN LIMITATIONS ON POWERS OF STOCKHOLDERS
A. Action shall be taken by the stockholders only at
annual or special meetings of stockholders and stockholders may
not act by written consent.
B. Special meetings of the stockholders of the Corporation
for any purpose or purposes may be called at any time by the
Board of Directors, or by a majority of the members or the Board
of Directors, or by a committee of the Board of Directors which
has been duly designated by the Board of Directors and whose
powers and authority, as provided in a resolution of the Board of
Directors or in the Bylaws of the Corporation, include the power
to call such meetings. Special meetings of stockholders of the
Corporation may not be called by any other person or persons or
entity.
ARTICLE XII
VOTE REQUIRED TO AMEND ARTICLES
The provisions set forth in this Article XII and in
Article X (provisions as to number, classes and removal of
directors) and in Article XI (provisions regarding certain
limitations on powers of stockholders) may not be repealed or
amended in any respect, and no provision imposing cumulative
voting in the election of directors may be added, unless such
action is approved by the affirmative vote of the holders of not
less than 80% of all of the outstanding shares of capital stock
of the Corporation or another corporation entitled to vote
generally in the election of directors.
ARTICLE XIII
EXECUTIVE COMMITTEE
The Board of Directors, pursuant to the Bylaws of the
Corporation or by resolution passed by a majority of the then-
authorized number of directors, may designate any of their number
to constitute an Executive Committee, which Executive Committee,
to the fullest extent permitted by law and provided for in said
resolution or in the Bylaws of the Corporation,
<PAGE>
shall have and may exercise all of the powers of the Board of
Directors in the management of the business and affairs of the
Corporation, and shall have power to authorize the seal of the
Corporation to be affixed to all papers that may require it.
IN WITNESS WHEREOF, Layne Christensen Company has
caused its corporate seal to be hereunto affixed and this
Restated Certificate of Incorporation to be signed by Andrew B.
Schmitt, its President, and attested by Kent B. Magill, its
Secretary, this 2nd day of April, 1996.
LAYNE CHRISTENSEN COMPANY
By: /s/ A. B. Schmitt
Andrew B. Schmitt
President
Attest:
/s/ Kent B. Magill
Kent B. Magill
Secretary
EXHIBIT 11(1)
<TABLE>
LAYNE CHRISTENSEN COMPANY
STATEMENT REGARDING COMPUTATION OF PER SHARE EARNINGS
<CAPTION>
Three Months Ended April 30,
1996 1995
<S> <C> <C>
Computation of Per Share Earnings
(in thousands of dollars,
except per share amounts)
Net income $ 1,103 $ 646
Weighted average common shares outstanding 8,845,000 7,307,000
Dilutive stock options 67,000 64,000
Primary weighted average common
and dilutive equivalent shares outstanding 8,912,000 7,371,000
Additional dilutive stock options 185,000 42,000
Fully diluted weighted average common and
dilutive equivalent shares outstanding 9,097,000 7,413,000
Per share:
Net income - primary $ 0.12 $ 0.09
Net income - fully dilutive $ 0.12 $ 0.09
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEETS AND CONSOLIDATED STATEMENTS OF INCOME AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-31-1997
<PERIOD-END> APR-30-1996
<CASH> 381
<SECURITIES> 0
<RECEIVABLES> 47,899
<ALLOWANCES> 939
<INVENTORY> 16,028
<CURRENT-ASSETS> 72,051
<PP&E> 112,231
<DEPRECIATION> 64,249
<TOTAL-ASSETS> 139,445
<CURRENT-LIABILITIES> 39,178
<BONDS> 34,007
0
0
<COMMON> 89
<OTHER-SE> 55,379
<TOTAL-LIABILITY-AND-EQUITY> 139,445
<SALES> 6,517
<TOTAL-REVENUES> 53,773
<CGS> 39,704
<TOTAL-COSTS> 42,545
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 679
<INCOME-PRETAX> 2,005
<INCOME-TAX> 902
<INCOME-CONTINUING> 1,103
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,103
<EPS-PRIMARY> 0.12
<EPS-DILUTED> 0.12
</TABLE>
