Global Drilling Contractor Layne Christenson Hopeful New CEO Leads to a Better 2015
Layne Christensen has high hopes for Michael J. Caliel, who takes over on Jan. 2 as president and CEO of the U.S.-based global water management, construction and drilling contractor, after a 2014 of tough business breaks.
The former IT sector chief was tapped earlier this month to succeed board Chairman David A.B. Brown, who took those roles temporarily in June, following the sudden resignation of former CEO Rene J. Robichaud in the wake of big bottom-line issues.
According to analysts, Robichaud stepped down in what Layne Christensen called a “transition in leadership,” following second-quarter results showing revenue off 46% in its mineral exploration business, which was racked by global commodity price volatility and down 33% in its heavy-civil project work; the firm noted some troubled projects but did not detail them or identify projects.
Caliel had been, since 2011, president and CEO of the software and industrial automation division of Invensys plc, a U.K.-based IT systems consultant in the global manufacturing and infrastructure sector. Invensys was acquired in January by Schneider Electric, a French-based global energy management firm. Caliel also had held senior roles at Honeywell Inc and ABB Inc.
“Mike is a seasoned operating executive and has a demonstrated ability to strategically manage, grow and optimize complex global organizations," said Brown in a statement. Terming Caliel "an innovative thinker and hands-on manager," Brown said he "also has extensive experience in a variety of industries and end markets relevant to Layne. We are confident that Mike will help guide Layne into the next phase of its growth."
Layne Christensen's third-quarter results, released in mid-December for the period ending Nov. 30, may give the firm's optimism some backing. Total firm revenue rose 10%, to $223 million, with the reported loss narrowed to $4.5 million, or 23 cents per share, down from $15.7 million, or 80 cents per share; heavy-civil and mineral services units still posted revenue declines but narrowed losses.
Brown admitted that problems in the firm's minerals drilling business likely would continue into 2016 but said its water resources, energy services, geoconstruction and liner units performed well.
Layne Christensen also says it is moving forward from an October agreement with the U.S. Securities and Exchange Commission in which the firm agreed to pay about $5.1 million to settle civil charges that, between 2005 and 2010, its operatives in Africa bribed government officials in several countries in exchange for favorable tax treatment, customs clearance and other improper benefits.
The firm, which had self-reported the activities to the government and neither admitted nor denied wrongdoing, agreed to report to the SEC on its compliance progress for two years, company general counsel Steve Crooke told ENR.
The U.S. Justice Dept. announced last summer that it would not file criminal charges against the firm based on its previous cooperation and remedial actions.
Layne Christensen is working for a private client in Mali, among other work in Africa, said Crooke.
However, the firm may be losing a seven-year tax abatement granted by county officials for relocating its corporate base in 2012 to The Woodlands, Texas, from Kansas, according to a Dec. 9 report in The Houston Business Journal.
The report said Layne Christensen has told officials it now cannot meet the agreed-upon employee number that was required to keep the abatement.
The firm ranks at No. 66 on ENR's list of the Top 400 Contractors, with $841.5 million in 2013 revenue.
