Furmanite Corporation (NYSE:FRM) today reported results for the
three and twelve months ended December 31, 2014.
Fourth Quarter 2014 Results
Revenues for the three months ended December 31, 2014 were
$133.9 million, an increase of $3.5 million, or 2.7%, over the
$130.4 million reported for the three months ended December 31,
2013. Adjusted operating income for the three months ended December
31, 2014 and 2013 was $8.4 million(A) and $5.2 million,(A)
respectively, excluding $0.8 million and $0.6 million,
respectively, of incremental costs associated with certain
retirement, management transition and integration expenses. Net
income for the 2014 fourth quarter was $4.8 million, or $0.13 per
diluted share, compared to $2.6 million, or $0.07 per diluted
share, in the 2013 fourth quarter.
Twelve Months Ended December 31, 2014 Results
Revenues for the twelve months ended December 31, 2014 were
$529.2 million, an increase of $101.9 million, or 23.8%, over the
$427.3 million reported for the twelve months ended December 31,
2013. Adjusted operating income for the twelve months ended
December 31, 2014 and 2013 was $22.9 million(A) and $25.5
million,(A) respectively, excluding $2.3 million of incremental
costs in the current year and $0.7 million of incremental costs in
the prior year, associated with certain retirement, management
transition and integration expenses. Net income for the twelve
months ended December 31, 2014 was $11.4 million, or $0.30 per
diluted share, compared to $14.0 million, or $0.37 per diluted
share for the twelve months ended December 31, 2013.
Foreign currency had unfavorable impacts on revenues and
operating income of $2.3 million and $0.2 million, respectively,
for the three months ended December 31, 2014 and favorable impacts
on revenues and operating income of $0.4 million and $0.5 million,
respectively, for the twelve months ended December 31, 2014.
Joseph Milliron, CEO and President of Furmanite Corporation
said, “Our fourth quarter performance reflects the initial success
of our initiatives and our strengthened operating foundation from
which we expect to grow. Throughout 2014, we took significant
action to unify Furmanite’s global operations and implement
efficiencies in our internal processes and structure to reduce
costs. Further, we have taken steps to strengthen our ability to
partner with customers earlier and longer in their projects and
throughout the life cycles of their assets, which we believe will
generate further opportunity in our markets. Moving forward, we are
focused on driving high performance and profitable growth across
our global organization, and while challenges remain in our
markets, we are committed to doing what is within our control to
enhance shareholder value.”
Financial Position
As of December 31, 2014, the Company’s cash balance was $33.8
million. The Company’s cash balance, along with the $38.0 million
of availability under its credit facility, provides the Company
liquidity of $71.8 million.
Discontinuing Earnings Guidance
The Company is discontinuing its practice of providing financial
guidance due to a number of factors, including variable industry
dynamics, the impact of foreign exchange, global economic
considerations and other challenges that can impact its forecasting
capabilities. The Company will continue to provide investors with
perspective on its value drivers, its strategic initiatives and
those factors critical to understanding its business and operating
environment to continue to assist in guiding the investment
community on its business outlook and environment.
Conference Call Details
In conjunction with the earnings release, Furmanite Corporation
will host a conference call with, Joseph E. Milliron (Chief
Executive Officer and President) and Robert S. Muff (Chief
Financial Officer and Chief Administration Officer). The call will
begin at 10:00 a.m. (Eastern) / 9:00 a.m. (Central) on Friday,
March 6, 2015.
(A) These items are financial measures not calculated in
accordance with generally accepted accounting principles (“GAAP”)
and exclude the impact of 1) incremental compensation expenses
pursuant to the provisions of a retirement agreement with a Company
executive and 2) direct costs associated with management transition
and integration of the Furmanite Technical Solutions division.
Management believes that results excluding these charges provide
more meaningful and comparable information to analysts and is
useful in comparing the operational trends of Furmanite
Corporation. A reconciliation to the applicable GAAP measure is
included at the end of the press release.
ABOUT FURMANITE CORPORATION
Furmanite Corporation (NYSE:FRM), founded in 1920, is one of the
world’s largest specialty industrial services and specialty
engineering project solutions companies, providing world class
solutions to customer needs through more than 80 offices on six
continents. The Company delivers a wide portfolio of inspection,
mechanical and engineering services which help monitor, maintain,
renew and construct the global energy, industrial and municipal
infrastructures. Furmanite serves a broad range of industry
sectors, including refining, offshore, sub-sea, pipeline, power
generation, chemical, petrochemical, pulp and paper, water
utilities, automotive, mining, marine and steel manufacturing.
World Headquarters and Global Support Operations are located in
Houston, Texas; Rotterdam, Netherlands; Kendal, United Kingdom and
Melbourne, Australia. 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 most
recently in this earnings release and the Company’s Form 10-K as of
December 31, 2013 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 CONSOLIDATED INCOME
STATEMENTS (in thousands, except per share data) (Unaudited)
For the Three Months For the
Twelve Months Ended December 31, Ended December
31, 2014 2013 2014 2013
Revenues $ 133,885 $ 130,357 $ 529,197 $ 427,294 Costs and
expenses: Operating costs 99,499 99,763 397,629 306,042
Depreciation and amortization expense 3,434 3,186 12,579 11,418
Selling, general and administrative expense 23,366 22,757
98,302 85,034 Total costs and expenses 126,299
125,706 508,510 402,494
Operating income 7,586 4,651 20,687 24,800 Interest income and
other income (expense), net 340 (344 ) (92 ) (616 ) Interest
expense (449 ) (408 ) (1,811 ) (1,341 ) Income before income taxes
7,477 3,899 18,784 22,843 Income tax expense (2,707 ) (1,317 )
(7,429 ) (8,816 ) Net income $ 4,770 $ 2,582 $ 11,355
$ 14,027 Earnings per common share - Basic $
0.13 $ 0.07 $ 0.30 $ 0.37 Earnings per common share - Diluted $
0.13 $ 0.07 $ 0.30 $ 0.37 Adjusted diluted earnings per share1 $
0.14 $ 0.08 $ 0.34 $ 0.38 Weighted-average number of common
and common equivalent shares used in computing earnings per common
share: Basic 37,678 37,511 37,631 37,422 Diluted 37,897 37,762
37,867 37,630 EBITDA2 $ 11,360 $ 7,493 $ 33,174 $ 35,602
__________________
1
Adjusted diluted earnings per share presented above is a
non-GAAP financial measurement that excludes the impact of 1)
incremental compensation expenses pursuant to the provisions of a
retirement agreement with a Company executive and 2) direct costs
associated with management transition and integration of the
Furmanite Technical Solutions division. Management believes that
results excluding these charges provide more meaningful and
comparable information to analysts and is useful in comparing the
operational trends of Furmanite Corporation. A reconciliation to
the applicable GAAP measure is included at the end of the press
release. 2 Earnings before interest, taxes, depreciation and
amortization (“EBITDA”) presented above is a non-GAAP financial
measurement. The Company believes that investors and other users of
the financial statements benefit from the presentation of this
non-GAAP measurement because it provides an additional metric to
evaluate the Company’s core operating performance by excluding the
effects of depreciation and amortization expense, interest expense
and income tax expense from net income. A reconciliation of EBITDA
to the most directly comparable GAAP measure is included at the end
of the press release.
FURMANITE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands)
(Unaudited)
December 31, 2014
2013 Cash $ 33,753 $ 33,240 Trade receivables, net
110,219 106,853 Inventories, net 37,383 35,443 Other current assets
21,335 21,159 Total current assets 202,690 196,695
Property and equipment, net 51,930 55,347 Other assets 29,551
33,125 Total assets $ 284,171 $ 285,167 Total
current liabilities $ 56,067 $ 62,523 Total long-term debt 61,853
63,196 Other liabilities 23,787 25,952 Total stockholders’ equity
142,464 133,496 Total liabilities and stockholders’ equity $
284,171 $ 285,167
FURMANITE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in
thousands) (Unaudited)
For the Twelve Months Ended
December 31,
2014 2013 Net income $ 11,355 $ 14,027
Depreciation, amortization and other non-cash items 13,560
17,364 Working capital changes (14,414 ) (13,716 ) Net cash
provided by operating activities 10,501 17,675 Capital
expenditures (8,090 ) (18,392 ) Acquisition of businesses (265 )
(16,695 ) Proceeds from sale of assets 16 30 Payments on debt
(1,012 ) (2,274 ) Proceeds from issuance of debt — 20,000 Debt
issuance costs — (50 ) Excess tax benefits from stock-based
compensation 989 — Issuance of common stock 158 573 Other (250 )
(250 ) Effect of exchange rate changes on cash (1,534 ) (562 )
Increase in cash and cash equivalents 513 55 Cash and cash
equivalents at beginning of period 33,240 33,185 Cash
and cash equivalents at end of period $ 33,753 $ 33,240
FURMANITE CORPORATION BUSINESS
SEGMENT DATA (in thousands) (Unaudited)
TechnicalServices
Engineering & Project
Solutions
Corporate1 Total Three months
ended December 31, 2014 Revenues from external customers $
96,319 $ 37,566 $ —
$
133,885
Operating income (loss)2 $ 11,498 $ 821 $ (4,733 ) $ 7,586
Three months ended December 31, 2013 Revenues from external
customers $ 95,965 $ 34,392 $ — $ 130,357 Operating income (loss)2
$ 8,839 $ (1,808 ) $ (2,380 ) $ 4,651
Twelve months ended
December 31, 2014 Revenues from external customers $ 376,120 $
153,077 $ — $ 529,197 Operating income (loss)2 $ 41,279 $ (391 ) $
(20,201 ) $ 20,687
Twelve months ended December 31,
2013 Revenues from external customers $ 368,587 $ 58,707 $ — $
427,294 Operating income (loss)2 $ 43,822 $ (2,003 ) $ (17,019 ) $
24,800 _______________________________ 1
Corporate represents certain corporate overhead costs, including
executive management, strategic planning, treasury, legal, human
resources, information technology, accounting and risk management,
which are not allocated to reportable segments. 2 The Engineering
& Project Solutions segment includes nil and approximately $0.5
million of direct costs associated with management transition and
integration of the Furmanite Technical Solutions division for the
three and twelve months ended December 31, 2014, respectively, and
approximately $0.6 million and $0.7 million of such costs for the
three and twelve months ended December 31, 2013, respectively.
Corporate includes approximately $0.8 million and $1.7 million of
incremental compensation expenses pursuant to the provisions of a
retirement agreement with a Company executive for the three and
twelve months ended December 31, 2014, respectively.
FURMANITE CORPORATION Reconciliation of Non-GAAP
Financial Measures (in thousands, except per share data)
For the Three Months Ended December 31,
2014 As Reported Reconciling Items 1
Non GAAP Basis Selling, general and administrative expense $
23,366 $ (847 ) $ 22,519 Operating income 7,586 847 8,433 Income
before income taxes 7,477 847 8,324 Income tax expense (2,707 )
(339 ) (3,046 ) Net income $ 4,770 $ 508 $ 5,278 Adjusted diluted
earnings per share $ 0.13 $ 0.01 $ 0.14
For the Three
Months Ended December 31, 2013 As Reported
Reconciling Items 1 Non GAAP Basis Selling,
general and administrative expense $ 22,757 $ (580 ) $ 22,177
Operating income 4,651 580 5,231 Income before income taxes 3,899
580 4,479 Income tax expense (1,317 ) (232 ) (1,549 ) Net income $
2,582 $ 348 $ 2,930 Adjusted diluted earnings per share $ 0.07 $
0.01 $ 0.08
For the Twelve Months Ended December
31, 2014 As Reported Reconciling Items 1
Non GAAP Basis Selling, general and administrative expense $
98,302 $ (2,251 ) $ 96,051 Operating income 20,687 2,251 22,938
Income before income taxes 18,784 2,251 21,035 Income tax expense
(7,429 ) (900 ) (8,329 ) Net income $ 11,355 $ 1,351 $ 12,706
Adjusted diluted earnings per share $ 0.30 $ 0.04 $ 0.34
For the Twelve Months Ended December 31, 2013 As
Reported Reconciling Items 1 Non GAAP
Basis Selling, general and administrative expense $ 85,034 $
(650 ) $ 84,384 Operating income 24,800 650 25,450 Income before
income taxes 22,843 650 23,493 Income tax expense (8,816 ) (260 )
(9,076 ) Net income $ 14,027 $ 390 $ 14,417 Adjusted diluted
earnings per share $ 0.37 $ 0.01 $ 0.38
______________________________ 1 Consists of 1) incremental
compensation expenses pursuant to the provisions of a retirement
agreement with a Company executive and 2) direct management
transition and integration costs of the Furmanite Technical
Solutions division, and the related income tax impacts.
FURMANITE CORPORATION Reconciliation of Non-GAAP
Financial Measures (continued) (in thousands, except per share
data)
For the Three Months
For the Twelve Months Ended December 31, Ended
December 31, 2014 2013 2014 2013
Reconciliation of EBITDA to Net income: EBITDA $
11,360 $ 7,493 $ 33,174 $ 35,602 Less: Depreciation and
amortization expense (3,434 ) (3,186 ) (12,579 ) (11,418 ) Interest
expense (449 ) (408 ) (1,811 ) (1,341 ) Income tax expense (2,707 )
(1,317 ) (7,429 ) (8,816 ) Net income $ 4,770 $ 2,582
$ 11,355 $ 14,027
Furmanite CorporationRobert S. Muff, 713-634-7775Investor
Relationsinvestor@furmanite.com
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