<p>The growth strategy of <strong>Layne Christensen Company</strong>&nbsp;(Nasdaq:<a target="_blank" href="/quotes?symbol=layn">LAYN</a>) is all wet, and that may be a good thing for investors in this century-old Kansas-based drilling and mining company.</p> <p>Wet as in water, which has seen its demand rising in tandem with that for fossil fuels. Management reminded investors in the fiscal 2008 annual report that &ldquo;Layne Christensen continues to be anchored by its water infrastructure division.&rdquo; </p> <p>Layne Christensen operates in four segments: mineral exploration, energy, water resources and a smaller geo construction operation &mdash; the latter helps give projects a solid base. Should Layne post revenue growth at the 20% rate of fiscal 2008, it could be a billion-dollar company next year. Last September, Layne ranked 78th among <em>Fortune</em> magazine&rsquo;s fastest-growing companies.</p> <p>For the three months ended April 30, Layne Christensen&rsquo;s revenue grew 21.3% to $244.5 million, with earnings per share increasing $0.03 to $0.55, in line with expectations. While its three primary business segments had double-digit revenue growth, mineral exploration was the biggest contributor to net income in fiscal 2009&rsquo;s first quarter. </p> <p>But water is where it&rsquo;s at for Layne Christensen, and the prospect of where that will take the stock has whet the appetite of analysts &mdash; at least a little. Four of six analysts surveyed by Thomson Reuters rate Layne a &ldquo;hold,&rdquo; with the others calling it a &ldquo;buy&rdquo; or &ldquo;strong buy.&rdquo; They&rsquo;re apparently thirsting for more from water, which Layne Christensen finds, pipes and treats &mdash; both water and wastewater. </p> <p>Shares of Layne Christensen hit a 52-week high of $59.19 on Oct. 26, but slid as low as $32.08 on March 17, following a December reality check. From Dec. 4, when shares hit an intraday high of $55.28, to its low point, Layne dropped 42%. The stock has since rebounded, closing Friday at $47.01.</p> <p>While Layne Christensen has been churning out strong results for more than four years, in discussing the fiscal third quarter, management was cautious in its expectations for the three months ended Jan. 31. Investors were relieved when those results were posted in April, as the company again delivered year-over-year improvement for the quarter and full year, despite expected weather-related problems. </p> <p>Layne Christensen began life in 1996, but its roots go back to 1882 with what started as Boyles Bros. Drilling Co. Layne Inc. acquired that operation and Christensen Boyles Corp., emerging as one of the world&rsquo;s leading providers of non-oilfield drilling and related services. Operations span four continents &mdash; North and South America, Africa and Australia, with a European presence via an Italian well-drilling subsidiary.</p> <p>On June 2, ahead of the most recent earnings report, shares traded as high as $53.37 before swooning 13% after the results came out. </p> <p>In a June 3 conference call, president and Chief Executive Andy Schmitt gave credit to mining exploration &mdash; which is in demand as gold and copper has hit record prices &mdash; for the quarterly performance. &ldquo;Revenue and earnings were just outstanding, up 38%, 102% respectively. EBITDA &hellip; was 29% as a percentage of revenue versus 22% in the prior year. North America, Australia and West Africa were especially strong and we got up to speed very early in this first quarter. &hellip; And the execution in those field operations was very, very good,&rdquo; he said.</p> <p>What should carry Layne Christensen forward in a shaky economy is order backlog. As of April 30, Schmitt said water infrastructure backlog was $370.7 million, up from the prior year&rsquo;s $336.9 million, and mineral exploration is &ldquo;probably booked for the year.&rdquo;</p> <p>Last October, Layne Christensen had a follow-on stock offering that raised nearly $160 million, which allowed the company to retire more than $100 million in debt and keep $73 million in cash or cash equivalents. Layne has used some of that for three water-related acquisitions.</p> <p>Morgan Joseph analyst Richard Paget maintained a &ldquo;hold&rdquo; on Layne after the June 3 quarterly results were released, but raised earnings estimates, writing: &ldquo;While we continue to believe that Layne Christensen is well-positioned to benefit from long-term drivers in the water industry and high levels of activity in the (mineral exploration) segment, we think full-year expectations are, at present, appropriately reflected in the price of the shares.&rdquo; Paget places EPS estimates for the current fiscal year at $2.45 a share, up from $2.35, and fiscal 2010 at $2.65, up from $2.50.</p> <p>At D.A. Davidson &amp; Co., analyst John Rogers also kept the stock at &ldquo;neutral,&rdquo; but increased his price target to $50 from $45, &ldquo;to incorporate recent trends, including lower water infrastructure margins and greater contributions from the mineral exploration and energy segments.&rdquo; Rogers thinks $100 is possible in five years.</p> <p>Ryan Connors of Boenning &amp; Scattergood, who raised Layne Christensen to &ldquo;market outperform&rdquo; not long after initiating coverage last winter, reiterated his rating this month following the earnings release, but bumped up his price target to $52 from $48. </p> <p>As the world&rsquo;s cravings grow, Layne Christensen could have the tools to meet some of them, and reward investors, too.&nbsp; <br /> &nbsp; <br /> </p>