 For immediate release | For more information, contact: | |
Investor Relations
(972) 699-4055
Email: investor@furmanite.com
FURMANITE CORPORATION REPORTS SECOND QUARTER RESULTS
Net Income Increased to $3.6 million; Earnings per Share to $0.10
DALLAS, TEXAS(August 6, 2010) – Furmanite Corporation (NYSE: FRM) today reported results for the quarter ended June 30, 2010. Revenues were $77.5 million, compared with $69.7 million for the second quarter 2009. Net income rose to $3.6 million for the quarter, after net-of-tax restructuring costs of $798,000. This compares with net income of $231,000 for the same period in 2009. Foreign currency fluctuations unfavorably impacted the company’s second quarter revenues by approximately $(400,000) but favorably impacted operating income and net income by approximately $234,000 and $107,000, respectively. Earnings per share (diluted) were $0.10 for the second quarter 2010, compared with earnings per share (diluted) of $0.01 for the prior year’s same quarter.
For the six months ended June 30, 2010, Furmanite reported revenues of $143.9 million, compared with $132.7 million for the 2009 period. Net income increased to $4.0 million, after $2.4 million of restructuring costs, net of tax, for the six months ended June 30, 2010, compared with 2009 same period net income of $1.1 million. Revenues, operating income and net income were favorably affected by foreign currency fluctuations by $2.9 million, $464,000 and $153,000, respectively. Earnings per share (diluted) were $0.11 for the six months ended June 30, 2010, compared with $0.03 for the prior year’s same period.
“Furmanite delivered a strong second quarter, and we are pleased with the results. Our performance, in a market that continues to show little improvement, demonstrates the positive impact of lowering our costs and aligning our resources with our business. It also indicates that Furmanite is gaining market share by leveraging our global reach and relationships across a broad array of industries,” said Charles R. Cox, chairman and CEO of Furmanite Corporation.
Mr. Cox continued: “We have substantially completed the initiative announced at year-end 2009 at a cost of $3.4 million, which was consistent with our expectations. We now estimate that total costs for the restructuring of the EMEA Region, announced in May, will be approximately $4.0 million – $592,000 of which was incurred in the second quarter. We had anticipated that the second quarter would absorb more of the total costs; however, more time has been required to satisfy the local regulatory processes. As a result, most of the remaining restructuring costs are expected to be taken in the third and fourth quarters of 2010. Looking ahead, we are confident that Furmanite is on the right track and that we are positioning our operations to take maximum advantage of current opportunities and future improvements in the market.”
Joseph E. Milliron, president and chief operating officer of Furmanite Corporation, said, “The second quarter story is in the numbers: Compared with the same period last year, we have reduced headcount by 190 positions, with 115 of those representing a 19% reduction in sales and administrative personnel and 75 representing a 6% reduction in technicians. Our people are busy; they are motivated and focused on delivering the best customer service in the business. Their strong performance translated into substantially improved results for the second quarter, and their commitment to excellence will continue to drive our 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. For more information, visitwww.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.
1
| FURMANITE CORPORATION | ||||||||||||||||||||||||||||
| CONDENSED CONSOLIDATED INCOME STATEMENTS | ||||||||||||||||||||||||||||
| (In thousands, except per share data) | ||||||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||||
| For the Three Months | For the Six Months | |||||||||||||||||||||||||||
| Ended June 30, | Ended June 30, | |||||||||||||||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||||||||||||||
| Revenues | $ | 77,513 | $ | 69,726 | $ | 143,948 | $ | 132,758 | ||||||||||||||||||||
| Costs and expenses: | ||||||||||||||||||||||||||||
| Operating costs | 51,922 | 47,261 | 97,584 | 89,839 | ||||||||||||||||||||||||
| Depreciation and amortization expense | 1,572 | 1,447 | 3,121 | 2,790 | ||||||||||||||||||||||||
| Selling, general and administrative expense | 18,493 | 20,212 | 37,256 | 37,683 | ||||||||||||||||||||||||
| Total costs and expenses | 71,987 | 68,920 | 137,961 | 130,312 | ||||||||||||||||||||||||
| Operating income | 5,526 | 806 | 5,987 | 2,446 | ||||||||||||||||||||||||
| Interest income and other income (expense), net | (246 | ) | 313 | 96 | 219 | |||||||||||||||||||||||
| Interest expense | (241 | ) | (299 | ) | (482 | ) | (592 | ) | ||||||||||||||||||||
| Income before income taxes | 5,039 | 820 | 5,601 | 2,073 | ||||||||||||||||||||||||
| Income tax expense | (1,479 | ) | (589 | ) | (1,650 | ) | (962 | ) | ||||||||||||||||||||
| Net income | $ | 3,560 | $ | 231 | $ | 3,951 | $ | 1,111 21,868 | ||||||||||||||||||||
| Earnings per common share — Basic | $ | 0.10 | $ | 0.01 | $ | 0.11 | $ | 0.03 | ||||||||||||||||||||
| Earnings per common share — Diluted | $ | 0.10 | $ | 0.01 | $ | 0.11 | $ | 0.03 | ||||||||||||||||||||
2
| FURMANITE CORPORATION | |||||||||||||||||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||
| June 30, | December 31, | ||||||||||||||||||||||
| 2010 | 2009 | ||||||||||||||||||||||
| Cash | $ | 31,837 | $ | 36,117 | |||||||||||||||||||
| Trade receivables, net | 57,936 | 52,021 | |||||||||||||||||||||
| Inventories | 24,820 | 26,827 | |||||||||||||||||||||
| Other current assets | 6,617 | 9,085 | |||||||||||||||||||||
| Total current assets | 121,210 | 124,050 | |||||||||||||||||||||
| Property and equipment, net | 29,473 | 30,168 | |||||||||||||||||||||
| Other assets | 21,145 | 20,771 | |||||||||||||||||||||
| Total assets | $ | 171,828 | $ | 174,989 | |||||||||||||||||||
| Total current liabilities | $ | 40,136 | $ | 44,439 | |||||||||||||||||||
| Total long-term debt | 30,076 | 30,139 | |||||||||||||||||||||
| Other liabilities | 14,260 | 15,081 | |||||||||||||||||||||
| Total stockholders’ equity | 87,356 | 85,330 | |||||||||||||||||||||
| Total liabilities and stockholders’ equity | $ | 171,828 | $ | 174,989 | |||||||||||||||||||
3
| FURMANITE CORPORATION | ||||||||
| CONDENSED CONSOLIDATED CASH FLOWS | ||||||||
| (In thousands) | ||||||||
| (Unaudited) | ||||||||
| For the Six Months Ended | ||||||||
| June 30, | ||||||||
| 2010 | 2009 | |||||||
| Net income | $ | 3,951 | $ | 1,111 | ||||
| Depreciation, amortization and other non-cash items | 4,297 | 2,488 | ||||||
| Working capital changes | (7,729 | ) | 972 | |||||
| Net cash provided by operating activities | 519 | 4,571 | ||||||
| Capital expenditures | (3,451 | ) | (3,018 | ) | ||||
| Payments on debt | (99 | ) | (224 | ) | ||||
| Other, net | (155 | ) | (338 | ) | ||||
| Effect of exchange rate changes on cash | (1,094 | ) | (200 | ) | ||||
| (Decrease) increase in cash and cash equivalents | (4,280 | ) | 791 | |||||
| Cash and cash equivalents at beginning of period | 36,117 | 30,793 | ||||||
| Cash and cash equivalents at end of period | $ | 31,837 | $ | 31,584 | ||||
4