Furmanite Corp. (FRM, Financial) filed Quarterly Report for the period ended 2010-03-31.
Furmanite Corp. has a market cap of $163.6 million; its shares were traded at around $4.46 with and P/S ratio of 0.6. FRM is in the portfolios of Chuck Royce of Royce& Associates.
For the three months ended March 31, 2010, consolidated revenues increased by $3.4 million, or 5.4%, to $66.4 million, compared to $63.0 million for the three months ended March 31, 2009. Changes related to foreign currency exchange rates favorably impacted revenues by $3.3 million, of which $1.8 million and $1.5 million were related to favorable impacts from EMEA and Asia-Pacific, respectively. Excluding the foreign currency exchange rate impact, revenues increased by $0.1 million, or 0.1%, for the three months ended March 31, 2010 compared to the same period for the prior year. This $0.1 million increase in revenues consisted of a $1.4 million increase in the United States and a $1.4 million increase in Asia-Pacific, partially offset by a $2.7 million decrease in EMEA. The increase in revenues in the United States was primarily due to increases in underpressure services, which included volume increases in composite repair, leak sealing, and line stopping of approximately 26% when compared to revenues in the same period for the prior year. The increase in revenues in Asia-Pacific was attributable to increases in both underpressure and turnaround services in Australia, which included volume increases in leak sealing, hot tapping and bolting services. The decrease in revenues in EMEA was attributable to volume decreases in underpressure services of approximately 9% and in turnaround services of approximately 7%, which included decreases in hot tapping, heat treating and valve repair services, when compared to revenues in the same period for the prior year.
For the three months ended March 31, 2010, operating costs increased $3.1 million, or 7.2%, to $45.7 million, compared to $42.6 million for the three months ended March 31, 2009. The change related to foreign currency exchange rates unfavorably impacted costs by $2.2 million, of which $1.2 million and $1.0 million were related to unfavorable impacts from EMEA and Asia-Pacific, respectively. Excluding the foreign currency exchange rate impact, operating costs increased $0.9 million, or
In late 2009, the Company undertook a cost reduction initiative to realign selling, general and administrative costs with its current level of operations. The ongoing initiative has initially resulted in additional severance and consolidation costs, but is expected to reduce ongoing expense levels. As a result of the initiative, restructuring costs incurred in the three months ended March 31, 2010, totaled $1.2 million of which $0.2 million and $1.0 million were incurred in the United States and EMEA, respectively. The costs incurred were primarily related to severance and related costs of $0.5 million, lease termination costs of $0.3 million and other restructuring costs of $0.4 million.
For the three months ended March 31, 2010, selling, general and administrative expenses increased $1.3 million, or 7.4%, to $18.8 million compared to $17.5 million for the three months ended March 31, 2009. The portion of the change related to foreign currency exchange rates unfavorably impacted costs by $0.7 million, of which $0.4 million and $0.3 million were related to unfavorable impacts in EMEA and Asia-Pacific, respectively. Excluding the foreign currency exchange rate differences, selling, general and administrative expenses increased $0.6 million, or 3.4%, for the three months ended March 31, 2010, compared to the same period for the prior year. This $0.6 million increase in selling, general and administrative costs consisted of a $0.7 million increase in the United States, partially offset by a $0.1 million decrease in EMEA. The United States increase in selling, general and administrative expenses was primarily related to $0.5 million of costs incurred in connection with the retirement of its former Chairman and Chief Executive Officer during the first quarter of 2010, as well as restructuring charges of $0.2 million when compared to the same period for the prior year. Selling, general and administrative costs in EMEA remained relatively flat when compared to the prior year, as the $1.0 million of restructuring expenses incurred in the three months ended March 31, 2010 was fully offset by reduced selling, general and administrative costs in the quarter resulting from reduced revenues for the period, as well as the beginning effects of reduced ongoing costs as a result of restructuring initiative.
Net cash used in operating activities was $1.9 million for the three months ended March 31, 2010 compared to net cash provided by operating activities of $5.7 million for the three months ended March 31, 2009. The increases in net cash used in operating activities was primarily due to the changes in operating assets and liabilities which were driven by accounts receivable and accounts payable changes that decreased cash flows by $0.7 million for the three months ended March 31, 2010 compared to an increase of approximately $4.7 million in the three months ended March 31, 2009. The slight decrease in the accounts as experienced in the first quarter of 2010 is typical for the Companys first quarter, as working capital tends to build in connection with increased activity in the spring months. The changes experienced in the first quarter of 2009 were a result of a strong fourth quarter of 2008, followed by a significantly lower revenue level in the first quarter of 2009. In addition, the Company paid approximately $1.5 million in the first quarter of 2010 related to an arbitration award settlement.
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Furmanite Corp. has a market cap of $163.6 million; its shares were traded at around $4.46 with and P/S ratio of 0.6. FRM is in the portfolios of Chuck Royce of Royce& Associates.
Highlight of Business Operations:
For the three months ended March 31, 2010, consolidated revenues increased by $3.4 million, or 5.4%, to $66.4 million, compared to $63.0 million for the three months ended March 31, 2009, primarily related to foreign currency exchange rate changes. The Companys net income for the three months ended March 31, 2010 decreased $0.5 million as compared to the three months ended March 31, 2009. The decrease in net income was a direct result of restructuring costs incurred during the quarter in connection with the cost reduction initiative, which was initiated in the fourth quarter of 2009, and undertaken to strategically align the Companys operating, selling, general and administrative costs relative to revenues. These restructuring costs negatively impacted operating income and net income by $1.9 million and $1.6 million, respectively. The negative cost effect of the restructuring was partially offset by operational improvements as the effects of the restructuring began to be realized. In addition, interest income and other income (expense) was favorably impacted based on the Companys reduced exposure to foreign currency exchange rate changes.For the three months ended March 31, 2010, consolidated revenues increased by $3.4 million, or 5.4%, to $66.4 million, compared to $63.0 million for the three months ended March 31, 2009. Changes related to foreign currency exchange rates favorably impacted revenues by $3.3 million, of which $1.8 million and $1.5 million were related to favorable impacts from EMEA and Asia-Pacific, respectively. Excluding the foreign currency exchange rate impact, revenues increased by $0.1 million, or 0.1%, for the three months ended March 31, 2010 compared to the same period for the prior year. This $0.1 million increase in revenues consisted of a $1.4 million increase in the United States and a $1.4 million increase in Asia-Pacific, partially offset by a $2.7 million decrease in EMEA. The increase in revenues in the United States was primarily due to increases in underpressure services, which included volume increases in composite repair, leak sealing, and line stopping of approximately 26% when compared to revenues in the same period for the prior year. The increase in revenues in Asia-Pacific was attributable to increases in both underpressure and turnaround services in Australia, which included volume increases in leak sealing, hot tapping and bolting services. The decrease in revenues in EMEA was attributable to volume decreases in underpressure services of approximately 9% and in turnaround services of approximately 7%, which included decreases in hot tapping, heat treating and valve repair services, when compared to revenues in the same period for the prior year.
For the three months ended March 31, 2010, operating costs increased $3.1 million, or 7.2%, to $45.7 million, compared to $42.6 million for the three months ended March 31, 2009. The change related to foreign currency exchange rates unfavorably impacted costs by $2.2 million, of which $1.2 million and $1.0 million were related to unfavorable impacts from EMEA and Asia-Pacific, respectively. Excluding the foreign currency exchange rate impact, operating costs increased $0.9 million, or
In late 2009, the Company undertook a cost reduction initiative to realign selling, general and administrative costs with its current level of operations. The ongoing initiative has initially resulted in additional severance and consolidation costs, but is expected to reduce ongoing expense levels. As a result of the initiative, restructuring costs incurred in the three months ended March 31, 2010, totaled $1.2 million of which $0.2 million and $1.0 million were incurred in the United States and EMEA, respectively. The costs incurred were primarily related to severance and related costs of $0.5 million, lease termination costs of $0.3 million and other restructuring costs of $0.4 million.
For the three months ended March 31, 2010, selling, general and administrative expenses increased $1.3 million, or 7.4%, to $18.8 million compared to $17.5 million for the three months ended March 31, 2009. The portion of the change related to foreign currency exchange rates unfavorably impacted costs by $0.7 million, of which $0.4 million and $0.3 million were related to unfavorable impacts in EMEA and Asia-Pacific, respectively. Excluding the foreign currency exchange rate differences, selling, general and administrative expenses increased $0.6 million, or 3.4%, for the three months ended March 31, 2010, compared to the same period for the prior year. This $0.6 million increase in selling, general and administrative costs consisted of a $0.7 million increase in the United States, partially offset by a $0.1 million decrease in EMEA. The United States increase in selling, general and administrative expenses was primarily related to $0.5 million of costs incurred in connection with the retirement of its former Chairman and Chief Executive Officer during the first quarter of 2010, as well as restructuring charges of $0.2 million when compared to the same period for the prior year. Selling, general and administrative costs in EMEA remained relatively flat when compared to the prior year, as the $1.0 million of restructuring expenses incurred in the three months ended March 31, 2010 was fully offset by reduced selling, general and administrative costs in the quarter resulting from reduced revenues for the period, as well as the beginning effects of reduced ongoing costs as a result of restructuring initiative.
Net cash used in operating activities was $1.9 million for the three months ended March 31, 2010 compared to net cash provided by operating activities of $5.7 million for the three months ended March 31, 2009. The increases in net cash used in operating activities was primarily due to the changes in operating assets and liabilities which were driven by accounts receivable and accounts payable changes that decreased cash flows by $0.7 million for the three months ended March 31, 2010 compared to an increase of approximately $4.7 million in the three months ended March 31, 2009. The slight decrease in the accounts as experienced in the first quarter of 2010 is typical for the Companys first quarter, as working capital tends to build in connection with increased activity in the spring months. The changes experienced in the first quarter of 2009 were a result of a strong fourth quarter of 2008, followed by a significantly lower revenue level in the first quarter of 2009. In addition, the Company paid approximately $1.5 million in the first quarter of 2010 related to an arbitration award settlement.
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