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TheStreet Open House

Furmanite Corporation Reports Third Quarter 2012 Results

Stock quotes in this article: FRM

Furmanite Corporation (NYSE: FRM) today reported results for the quarter ended September 30, 2012. Revenues were $75.6 million, compared with a record $78.3 million for the third quarter of 2011. Unfavorable currency effects accounted for $1.3 million of the revenue decrease, but had minimal effect on operating income. The operating loss for the quarter, including $0.2 million of restructuring and corporate headquarters relocation costs, was $0.7 million. Net loss for the quarter was $1.3 million, or $0.03 per diluted share.

“Our earnings for this quarter were poor by any standard, but especially when compared to the excellent third quarter performance last year. While revenue results were close to expectations, this quarter’s reported earnings reflected something of a perfect storm. Many negative issues impacted our earnings, including Gulf Coast weather, project margin shortfalls, a portion of the European restructuring, restructuring related indirect costs and inefficiencies, acquisition timing and assimilation, deferred projects, bad debt provisions, and the final headquarters relocation expense,” said Charles R. Cox, Chairman and CEO of Furmanite Corporation. “Thankfully, we do not anticipate this kind of negative confluence going forward.”

Joseph Milliron, Furmanite President and COO, said, “While this has been an exciting year of transition, change and preparation for the future, we have certainly encountered far more unforeseen short-term issues than expected. In spite of these issues, we are successfully creating our new global organization and making many improvements which will prepare us to grow and execute better than ever before.” Mr. Milliron continued, “We responded immediately to the worsening European economic crisis reality which we encountered early this year, but were not quite able to fully finalize the restructuring costs during this quarter as anticipated. We now expect the remaining $1.9 million of restructuring costs to be absorbed in fourth quarter results.”

ABOUT FURMANITE CORPORATION

Furmanite Corporation (NYSE: FRM) is a worldwide technical services firm. Headquartered in Houston, Texas, Furmanite, one of the world’s largest specialty technical services companies, delivers a broad portfolio of engineering solutions that keep facilities operating, minimizing downtime and maximizing profitability. Furmanite’s diverse, global operations serve a broad array of industry sectors, including offshore drilling operations, pipelines, refineries and power generation facilities, chemical and petrochemical plants, steel mills, automotive manufacturers, pulp and paper mills, food and beverage processing plants, semi-conductor manufacturers and pharmaceutical manufacturers. Furmanite operates more than 70 offices on six continents. For more information, visit www.furmanite.com.

Certain of the Company’s statements in this press release are not purely historical, and as such are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These include statements regarding management’s intentions, plans, beliefs, expectations or projections of the future. Forward-looking statements involve risks and uncertainties, including without limitation, the various risks inherent in the Company’s business, and other risks and uncertainties detailed from time to time in the Company’s periodic reports filed with the Securities and Exchange Commission. One or more of these factors could affect the Company’s business and financial results in future periods, and could cause actual results to differ materially from plans and projections. There can be no assurance that the forward-looking statements made in this document will prove to be accurate, and issuance of such forward-looking statements should not be regarded as a representation by the Company, or any other person, that the objectives and plans of the Company will be achieved. All forward-looking statements made in this press release are based on information presently available to management, and the Company assumes no obligation to update any forward-looking statements.

FURMANITE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)

(Unaudited)

 
 
  For the Three Months   For the Nine Months
Ended September 30, Ended September 30,
  2012       2011     2012       2011  
 
Revenues $ 75,579 $ 78,330 $ 233,289 $ 234,393
 
Costs and expenses:
Operating costs 56,253 53,807 166,931 160,675
Depreciation and amortization expense 2,329 2,207 6,318 6,280
Selling, general and administrative expense   17,725     16,794     56,716     51,484  
Total costs and expenses   76,307     72,808     229,965     218,439  
 
Operating income (loss) (728 ) 5,522 3,324 15,954
 
Interest income and other income

(expense), net

(79 ) (341 ) (279 ) (99 )
 
Interest expense   (230 )   (263 )   (828 )   (758 )
 
Income (loss) before income taxes (1,037 ) 4,918 2,217 15,097
 
Income tax expense   (243 )   (1,336 )   (2,483 )   (2,343 )
 
Net income (loss) $ (1,280 ) $ 3,582   $ (266 ) $ 12,754  
 
Earnings (loss) per common share - Basic $ (0.03 ) $ 0.10   $ (0.01 ) $ 0.34  
Earnings (loss) per common share - Diluted $ (0.03 ) $ 0.10   $ (0.01 ) $ 0.34  
 
 

Weighted average number of common and common equivalent shares used incomputing earnings (loss) per common share:

Basic 37,301 37,107 37,253 37,002
Diluted 37,301 37,284 37,253 37,293
FURMANITE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
 
  (Unaudited)  
September 30, December 31,
  2012   2011
 

Cash

$

33,726

$

34,524

Trade receivables, net 71,548 71,508
Inventories 34,197 26,557
Other current assets   11,521   13,171
Total current assets 150,992 145,760
 
Property and equipment, net 39,650 34,060
Other assets   32,529   27,412
Total assets $ 223,171 $ 207,232
 
Total current liabilities $ 46,427 $ 41,999
Total long-term debt 39,328 31,051
Other liabilities 16,026 15,293
Total stockholders' equity   121,390   118,889
Total liabilities and stockholders' equity $ 223,171 $ 207,232
FURMANITE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
 
For the Nine Months Ended

September 30,

  2012       2011  
 
Net income (loss) $ (266 ) $ 12,754
 
Depreciation, amortization and other non-cash items 10,200 6,238
Working capital changes   256     (13,364 )
Net cash provided by operating activities 10,190 5,628
 
Capital expenditures (6,108 ) (3,915 )
Acquisitions of assets and business, net of cash acquired (11,700 ) (3,815 )
Proceeds from sale of assets 121 131
Proceeds from issuance of debt 39,300
Payments on debt (32,720 ) (85 )
Debt issuance costs (595 )
Issuance of common stock 537 271
Effect of exchange rate changes on cash   177     (287 )
Decrease in cash and cash equivalents (798 ) (2,072 )
Cash and cash equivalents at beginning of period   34,524     37,170  
Cash and cash equivalents at end of period $ 33,726   $ 35,098  




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