Furmanite Corporation Reports 2011 Results

Furmanite Corporation (NYSE: FRM) today reported results for the year ended December 31, 2011. Revenues were $316.2 million compared with $286.0 million for 2010. Net income for 2011 increased to $24.0 million from $9.5 million in 2010. Net income for 2011 was favorably impacted by income tax benefits of $7.7 million related to the net effect of a fourth quarter reversal of valuation allowances on U.S. deferred income taxes as well as $1.2 million associated with the first quarter SLM acquisition. In addition, 2011 net income was unfavorably affected by net-of-tax charges of $0.3 million of restructuring costs and a fourth quarter $0.9 million charge associated with the Company’s decision to exit the heat exchanger business in Germany.

Revenues for the fourth quarter of 2011 were $81.4 million, compared with $75.1 million for the fourth quarter of 2010. Net income for the fourth quarter of 2011 increased to $11.2 million from $3.7 million for the fourth quarter of 2010. Net income for the fourth quarter of 2011 was favorably impacted by a $7.7 million income tax benefit related to the net effect of the reversal of valuation allowances on U.S. deferred income taxes. In addition, 2011 net income was unfavorably impacted by net-of-tax charges of $0.1 million of restructuring charges and the $0.9 million charge in Germany discussed above.

Foreign currency fluctuations favorably impacted the Company’s 2011 revenues, operating income and net income by approximately $9.8 million, $1.2 million and $0.3 million, respectively, for 2011. Foreign currency fluctuations in the fourth quarter of 2011 were insignificant. Earnings per share (diluted) were $0.64 for 2011, compared with 2010 earnings per share (diluted) of $0.26. Earnings per share (diluted) were $0.30 for the fourth quarter of 2011, compared with fourth quarter 2010 earnings per share (diluted) of $0.10.

“Our full year 2011 results indicate good progress in our commitment to transform Furmanite into a world leading and top performing specialty services firm,” said Charles R. Cox, chairman and CEO of Furmanite Corporation. “Revenue growth of nearly 11% and income before income tax growth of 46% in 2011 represents significant improvement over 2010, but still well below our potential. We have improvement opportunities before us in virtually every aspect of our business which are being addressed by our restructuring, culture change and strategic re-direction. We are confident our efforts are on target to deliver significant continued future growth.”

Joseph Milliron, Furmanite President and COO, said: “There is tremendous excitement throughout the Company as we have implemented our values and strategies, and created a new global organizational concept to accelerate growth. We also achieved strong revenue growth with solid sales margins in most regions and good project performance overall. A few underperforming projects and a number of one-time issues, however, created erosion in our delivered margins and operating income for 2011, particularly in the fourth quarter. The underperforming project issue is being addressed by a strong company-wide drive for consistent project execution excellence. Overall, we are pleased with our 2011 results and we continue to stay focused on the action needed to maximize our long-term growth.”

ABOUT FURMANITE CORPORATION

Furmanite Corporation (NYSE: FRM) is a worldwide technical services firm. Headquartered in Dallas, 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 75 offices on six continents. The company recently expanded its global capabilities to deliver specialized solutions for large-scale equipment or operations through the acquisition of Self Leveling Machines International Pty Ltd. and Self Leveling Machines, Inc. (collectively "SLM"), based in Melbourne, Australia, and Houston, Texas. The company’s headquarters will relocate to Houston, Texas in the first quarter of 2012. 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 INCOME STATEMENTS
(in thousands, except per share data)
 
 
  (Unaudited)  
For the Three Months For the Twelve Months
Ended December 31, Ended December 31,
  2011       2010     2011       2010  
 
Revenues $ 81,814 $ 75,070 $ 316,207 $ 285,953
 
Costs and expenses:
Operating costs 58,471 51,296 219,146 194,594
Depreciation and amortization expense 1,951 1,723 8,231 6,490
Selling, general and administrative expense   16,895     17,084     68,379     71,209  
Total costs and expenses   77,317     70,103     295,756     272,293  
 
Operating income 4,497 4,967 20,451 13,660
 
Interest income and other income

(expense), net
(27 ) 15 (126 ) 549
 
Interest expense   (259 )   (223 )   (1,017 )   (943 )
 
Income before income taxes 4,211 4,759 19,308 13,266
 
Income tax expense (benefit)   (7,005 )   1,035     (4,662 )   3,780  
 
Net income $ 11,216   $ 3,724   $ 23,970   $ 9,486  
 
Earnings per common share - Basic $ 0.30   $ 0.10   $ 0.65   $ 0.26  
Earnings per common share - Diluted $ 0.30   $ 0.10   $ 0.64   $ 0.26  
 
FURMANITE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
 
 
December 31, December 31,
2011 2010
 
Cash

$

34,524
$ 37,170
Trade receivables, net 71,508 63,630
Inventories 26,557 24,366
Other current assets   13,171   5,951
Total current assets 145,760 131,117
 
Property and equipment, net 34,060 30,720
Other assets   27,412   20,264
Total assets $ 207,232 $ 182,101
 
Total current liabilities $ 41,999 $ 42,936
Total long-term debt 31,051 30,085
Other liabilities 15,293 10,992
Total stockholders' equity   118,889   98,088
Total liabilities and stockholders' equity $ 207,232 $ 182,101
 
FURMANITE CORPORATION
CONDENSED CONSOLIDATED CASH FLOWS
(in thousands)
 
 
For the Twelve Months Ended

December 31,
  2011       2010  
 
Net income $ 23,970 $ 9,486
 
Depreciation, amortization and other non-cash items 921 7,661
Working capital changes   (17,003 )   (9,311 )
Net cash provided by operating activities 7,888 7,836
 
Capital expenditures (6,450 ) (7,312 )
Acquisition of assets and business (4,073 ) (350 )
Proceeds from sale of assets 137 574
Payments on debt (207 ) (237 )
Proceeds from issuance of debt 78
Issuance of common stock 270 578
Effect of exchange rate changes on cash   (211 )   (114 )
(Decrease) increase in cash and cash equivalents (2,646 ) 1,053
Cash and cash equivalents at beginning of year   37,170     36,117  
Cash and cash equivalents at end of year $ 34,524   $ 37,170  

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