Furmanite Corporation FRM today reported results for the three and nine months ended September 30, 2015.
Third Quarter 2015 Results
Revenues for the three months ended September 30, 2015 were $97.4 million, an increase of $2.2 million, or 2.4%, from the $95.2 million reported for the three months ended September 30, 2014. Operating income was $3.1 million for the 2015 third quarter, compared to $2.5 million for the same quarter last year. Income from continuing operations was $1.5 million, or $0.04 per diluted share in the 2015 third quarter, compared to $1.2 million, or $0.03 per diluted share, in the 2014 third quarter. Loss from discontinued operations, which reflects the operations and disposal of the Company's former Furmanite Technical Solutions ("FTS") division, was $(1.4) million, or $(0.04) per diluted share, in the 2015 third quarter, compared to $(0.1) million, or less than $(0.01) per diluted share, for the same quarter last year. Net income was $0.2 million, or less than $0.01 per diluted share, in the 2015 third quarter, compared to $1.1 million, or $0.03 per diluted share, for the same quarter last year.
Foreign currency exchange rate changes unfavorably impacted revenues, operating income, income from continuing operations and diluted earnings per share from continuing operations by $5.2 million, $0.3 million, $0.2 million and less than $0.01 per share, respectively, for the three months ended September 30, 2015.
Excluding the foreign currency impacts and certain non-routine items, adjusted operating income for the three months ended September 30, 2015 increased by $0.5 million to $3.8 million(A), compared to $3.3 million(A), for the three months ended September 30, 2014. Adjusted income from continuing operations increased to $1.8 million(A), or $0.05(A) adjusted diluted earnings per share, for the 2015 third quarter, from $1.7 million(A), or $0.04(A) adjusted diluted earnings per share, in the 2014 third quarter.
Nine Months Ended September 30, 2015 Results
Revenues for the nine months ended September 30, 2015 were $296.5 million, a decrease of $10.8 million, or 3.5%, from the $307.3 million reported for the nine months ended September 30, 2014. Operating income was $12.2 million in the nine months ended September 30, 2015, compared to $14.4 million for the same period last year. Income from continuing operations was $5.4 million, or $0.14 per diluted share, compared to $7.4 million, or $0.19 per diluted share, in the nine months ended September 30, 2014. Loss from discontinued operations was $(1.6) million, or $(0.04) per diluted share for the nine months ended September 30, 2015, compared to $(0.9) million, or $(0.02) for the same period last year. Net income was $3.8 million, or $0.10 per diluted share, compared to $6.6 million, or $0.17 per diluted share, in the nine months ended September 30, 2014.
Foreign currency exchange rate changes unfavorably impacted revenues, operating income, income from continuing operations and diluted earnings per share from continuing operations by $15.4 million, $1.2 million, $1.9 million and $0.05 per share, respectively, for the nine months ended September 30, 2015.
Excluding the foreign currency impacts, $2.2 million of incremental costs associated with the Company's 2015 Annual Meeting and certain other non-routine items, adjusted operating income was $15.6 million(A) for the nine months ended September 30, 2015, compared to $15.3 million(A) for the same period in 2014. Adjusted income from continuing operations increased to $8.6 million(A), or $0.23(A) adjusted diluted earnings per share, for the nine months ended September 30, 2015, compared to $8.5 million(A), or $0.22(A) adjusted diluted earnings per share, for the same period in 2014.
Financial Position
As of September 30, 2015, the Company's cash balance was $47.1 million. The Company's cash balance, along with the $73.4 million of availability under its credit facility, provides the Company liquidity of $120.5 million.
Proposed Merger with Team, Inc.
On November 1, 2015, the Company and Team, Inc. TISI ("Team") entered into a definitive merger agreement in which Team will acquire all of the outstanding shares of the Company in a stock-for-stock transaction. The agreement was unanimously approved by the boards of directors of both companies. The transaction is subject to the required approvals of the stockholders of both companies, regulatory approvals and other customary closing conditions. It is anticipated that the closing of the transaction will occur in the first quarter of 2016. In light of the pending transaction with Team, the Company is discontinuing its quarterly conference calls for the investment community.
(A) These items are financial measures not calculated in accordance with generally accepted accounting principles ("GAAP") and exclude the impact of 1) foreign currency exchange rate changes, 2) incremental professional fees and other costs associated with the Company's 2015 Annual Meeting of Stockholders, 3) incremental compensation expenses pursuant to the provisions of a retirement agreement with a Company executive, 4) a non-routine pension curtailment/settlement gain, 5) the write off of debt issuance costs associated with an amendment to the Company's credit facility, 6) non-routine loss contingency and bad debt expenses and 7) a non-routine insurance-related benefit. Management believes that results excluding these impacts provide additional meaningful and comparable information to analysts and is useful in comparing the operational trends of Furmanite Corporation, by excluding the impact of foreign currency exchange rate changes and certain items not representative of core operations. Reconciliations to the applicable GAAP measures are included at the end of the press release.
ABOUT FURMANITE CORPORATION
Furmanite Corporation FRM, founded in 1920, is one of the world's largest specialty industrial services companies, providing world class solutions to customer needs through more than 80 offices on six continents. The Company delivers a wide portfolio of inspection and mechanical services which help monitor, maintain and renew 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.
Forward Looking Statements
This document contains forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Statements identified by words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates," "targets," "projects," "creates" or words of similar meaning generally are intended to identify forward-looking statements. These statements are based upon the current beliefs and expectations of Team's and Furmanite's management and are inherently subject to significant business, economic and competitive risks and uncertainties, many of which are beyond their respective control.
These forward-looking statements are subject to a number of factors, assumptions, risks and uncertainties which could cause Team's, Furmanite's or the combined company's actual results and experience to differ from the anticipated results and expectations expressed in such forward-looking statements, and such differences may be material. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change.
These factors, assumptions, risks and uncertainties include, but are not limited to: (1) Team's or Furmanite's stockholders may fail to approve the transaction, on the expected timeline or at all; (2) conditions to the closing of the merger may not be satisfied, on the expected timeline or at all; (3) the transaction may involve unexpected costs, liabilities or delays; (4) governmental approvals of the transaction may not be obtained on the proposed terms or expected timeframe; (5) the terms of the proposed transaction may need to be modified to satisfy such approvals or conditions; (6) the businesses of Team and Furmanite may not be integrated successfully or the integration may be more difficult, time-consuming or costly than expected; (7) the expected growth opportunities, costs savings or other benefits from the transaction may not be fully realized or may take longer to realize than expected; (8) revenues following the transaction may be lower than expected as a result of losses of customers or other reasons; (9) operating costs, customer loss and business disruption following the transaction, including difficulties in maintaining relationships with employees, may be greater than expected; (10) reputational risks and the reaction of the companies' customers to the transaction; (11) diversion of management time on merger related issues; (12) customer acceptance of the combined company's products and services; (13) the outcome of any legal proceeding relating to the transaction; and (14) any changes in the strategy of Team, Furmanite or the anticipated strategy of the combined company.
Additional factors that could cause Team's and Furmanite's results to differ materially from those described in the forward-looking statements can be found in Team's and Furmanite's reports (such as Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K) filed with the SEC and available at the SEC's website (www.sec.gov). All subsequent written and oral forward-looking statements concerning Team, Furmanite, or the proposed merger or other matters and attributable to Team, Furmanite or any person acting on either of their behalf are expressly qualified in their entirety by the cautionary statements above. Team and Furmanite do not undertake any obligation to update any forward-looking statement, whether written or oral, to reflect circumstances or events that occur after the date the forward-looking statements are made.
Additional Information About the Team/Furmanite Transaction
In connection with the proposed merger, Team intends to file a registration statement on Form S-4, which will include a preliminary prospectus and related materials to register the shares of Team common stock to be issued in the merger, and Team and Furmanite intend to file a joint proxy statement/prospectus and other documents concerning the proposed merger with the SEC. BEFORE MAKING ANY VOTING OR INVESTMENT DECISION, INVESTORS ARE URGED TO CAREFULLY READ THE REGISTRATION STATEMENT, THE JOINT PROXY STATEMENT/PROSPECTUS AND ANY OTHER DOCUMENTS TO BE FILED WITH THE SEC IN CONNECTION WITH THE PROPOSED MERGER OR INCORPORATED BY REFERENCE IN THE REGISTRATION STATEMENT AND JOINT PROXY STATEMENT/PROSPECTUS BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT TEAM, FURMANITE AND THE PROPOSED MERGER.
When available, the joint proxy statement/prospectus will be mailed to stockholders of both Team and Furmanite. Investors will also be able to obtain copies of the registration statement and the joint proxy statement/prospectus and other relevant documents (when they become available) free of charge at the SEC's website (www.sec.gov). In addition, documents filed with the SEC by Team will be available free of charge by contacting Greg L. Boane, Senior Vice President, Chief Financial Officer & Treasurer, Team, Inc., 13131 Dairy Ashford, Sugar Land, Texas 77478, by telephone at (281) 331-6154 or by going to the Team's Investor Relations page on its corporate web site at www.Teaminc.com.
Documents filed with the SEC by Furmanite will be available free of charge from Furmanite by contacting Robert S. Muff, Chief Financial Officer and Chief Administrative Officer, Furmanite Corporation, 10370 Richmond Avenue, Suite 600, Houston, TX 77042, by telephone at (713) 634-7777 or by going to the Furmanite's Investors page on its corporate web site at www.furmanite.com.
The content of the websites referenced above are not deemed to be incorporated by reference into the registration statement or the joint proxy statement/prospectus.
No Offer or Solicitation
This document is for information purposes only and does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval with respect to the proposed merger or otherwise. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended, and no offer to sell or solicitation of an offer to buy shall be made in any jurisdiction in which such offer, solicitation or sale would be unlawful.
Participants in the Solicitation
Team, Furmanite and certain of their directors, executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies from the stockholders of Team and Furmanite in connection with the proposed merger.
Information regarding the persons who may, under the rules of the SEC, be deemed participants in the solicitation of Team and Furmanite security holders in connection with the proposed merger will be set forth in the registration statement and the joint proxy statement/prospectus when filed with the SEC.
Information about the directors and executive officers of Team is included in the proxy statement for its 2015 annual meeting of stockholders, which was filed with the SEC on August 21, 2015. Information about the directors and executive officers of Furmanite is included in the proxy statement for its 2015 annual meeting of stockholders, which was filed with the SEC on June 11, 2015. Copies of the foregoing documents may be obtained as provided above. Additional information regarding the interests of such participants and other persons who may be deemed participants in the transaction will be included in the joint proxy statement/prospectus and the other relevant documents filed with the SEC when they become available.
| FURMANITE CORPORATION | |||||||||||||||||||||
| CONSOLIDATED INCOME STATEMENTS | |||||||||||||||||||||
| (in thousands, except per share data) | |||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||
| For the Three Months | For the Nine Months | ||||||||||||||||||||
| Ended September 30, | Ended September 30, | ||||||||||||||||||||
| 2015 | 2014 | 2015 | 2014 | ||||||||||||||||||
| Revenues | $ | 97,408 | $ | 95,160 | $ | 296,539 | $ | 307,305 | |||||||||||||
| Costs and expenses: | |||||||||||||||||||||
| Operating costs (exclusive of depreciation and amortization) | 71,774 | 68,122 | 212,119 | 217,473 | |||||||||||||||||
| Depreciation and amortization expense | 2,877 | 2,830 | 8,473 | 8,145 | |||||||||||||||||
| Selling, general and administrative expense | 19,621 | 21,757 | 63,742 | 67,266 | |||||||||||||||||
| Total costs and expenses | 94,272 | 92,709 | 284,334 | 292,884 | |||||||||||||||||
| Operating income | 3,136 | 2,451 | 12,205 | 14,421 | |||||||||||||||||
| Interest income and other income (expense), net | 146 | 174 | (932 | ) | (429 | ) | |||||||||||||||
| Interest expense | (345 | ) | (467 | ) | (1,333 | ) | (1,356 | ) | |||||||||||||
| Income from continuing operations before income taxes | 2,937 | 2,158 | 9,940 | 12,636 | |||||||||||||||||
| Income tax expense | (1,418 | ) | (986 | ) | (4,494 | ) | (5,197 | ) | |||||||||||||
| Income from continuing operations | 1,519 | 1,172 | 5,446 | 7,439 | |||||||||||||||||
| Loss from discontinued operations, net of income tax | (1,359 | ) | (110 | ) | (1,598 | ) | (854 | ) | |||||||||||||
| Net Income | $ | 160 | $ | 1,062 | $ | 3,848 | $ | 6,585 | |||||||||||||
| Basic earnings (loss) per common share: | |||||||||||||||||||||
| Continuing operations | $ | 0.04 | $ | 0.03 | $ | 0.14 | $ | 0.20 | |||||||||||||
| Discontinued operations | (0.04 | ) | — | (0.04 | ) | (0.02 | ) | ||||||||||||||
| Net income | $ | — | $ | 0.03 | $ | 0.10 | $ | 0.18 | |||||||||||||
| Diluted earnings (loss) per common share: | |||||||||||||||||||||
| Continuing operations | $ | 0.04 | $ | 0.03 | $ | 0.14 | $ | 0.19 | |||||||||||||
| Discontinued operations | (0.04 | ) | — | (0.04 | ) | (0.02 | ) | ||||||||||||||
| Net income | $ | — | $ | 0.03 | $ | 0.10 | $ | 0.17 | |||||||||||||
| Adjusted diluted earnings (loss) per share1: | |||||||||||||||||||||
| Continuing operations1 | $ | 0.05 | $ | 0.04 | $ | 0.23 | $ | 0.22 | |||||||||||||
| Discontinued operations1 | (0.01 | ) | 0.01 | (0.02 | ) | (0.01 | ) | ||||||||||||||
| Net income1 | $ | 0.04 | $ | 0.05 | $ | 0.21 | $ | 0.21 | |||||||||||||
| Weighted-average number of common and common equivalent shares used in computing earnings (loss) per common share: | |||||||||||||||||||||
| Basic | 37,882 | 37,659 | 37,823 | 37,615 | |||||||||||||||||
| Diluted | 37,979 | 37,905 | 37,981 | 37,856 | |||||||||||||||||
| EBITDA from continuing operations2 | $ | 6,159 | $ | 5,455 | $ | 19,746 | $ | 22,137 | |||||||||||||
| Adjusted EBITDA from continuing operations2 | $ | 6,819 | $ | 6,161 | $ | 24,430 | $ | 23,474 | |||||||||||||
__________________
| 1 | Adjusted diluted earnings (loss) per share presented above are non-GAAP financial measurements that excludes the impact of 1) foreign currency exchange rate changes, 2) incremental professional fees and other costs associated with the Company's 2015 Annual Meeting of Stockholders, 3) incremental compensation expenses pursuant to the provisions of a retirement agreement with a Company executive, 4) a non-routine pension curtailment/settlement gain, 5) the write off of debt issuance costs associated with an amendment to the Company's credit facility, 6) integration, management transition, exit costs and loss on disposal attributable to the FTS division, 7) non-routine loss contingency and bad debt expenses and 8) a non-routine insurance-related benefit. Management believes that results excluding these impacts provide additional meaningful and comparable information to analysts and is useful in comparing the operational trends of Furmanite Corporation, by excluding the impact of foreign currency exchange rate changes and certain expenses not representative of core operations. Reconciliations to the applicable GAAP measures are 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 income from continuing operations. Adjusted EBITDA further excludes 1) foreign currency exchange rate changes, 2) incremental professional fees and other costs associated with the Company's 2015 Annual Meeting of Stockholders, 3) incremental compensation expenses pursuant to the provisions of a retirement agreement with a Company executive, 4) a non-routine pension curtailment/settlement gain, 5) non-routine loss contingency and bad debt expenses and 6) a non-routine insurance-related benefit. Reconciliations of EBITDA and Adjusted EBITDA to the most directly comparable GAAP measures are included at the end of the press release. | ||
| FURMANITE CORPORATION | |||||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||||
| (in thousands) | |||||||||||
| (Unaudited) | |||||||||||
| September 30, | December 31, | ||||||||||
| 2015 | 2014 | ||||||||||
| Cash | $ | 47,130 | $ | 33,753 | |||||||
| Trade receivables, net | 98,427 | 93,115 | |||||||||
| Inventories, net | 43,728 | 36,696 | |||||||||
| Other current assets | 16,411 | 15,260 | |||||||||
| Current assets of discontinued operations | 2,615 | 23,866 | |||||||||
| Total current assets | 208,311 | 202,690 | |||||||||
| Property and equipment, net | 49,748 | 49,855 | |||||||||
| Other assets | 26,375 | 28,303 | |||||||||
| Non-current assets of discontinued operations | 10 | 3,323 | |||||||||
| Total assets | $ | 284,444 | $ | 284,171 | |||||||
| Current liabilities | $ | 44,501 | $ | 46,672 | |||||||
| Current liabilities of discontinued operations | 3,933 | 9,395 | |||||||||
| Total current liabilities | 48,434 | 56,067 | |||||||||
| Total long-term debt | 68,891 | 61,853 | |||||||||
| Other liabilities | 22,163 | 23,787 | |||||||||
| Total stockholders' equity | 144,956 | 142,464 | |||||||||
| Total liabilities and stockholders' equity | $ | 284,444 | $ | 284,171 | |||||||
| FURMANITE CORPORATION | |||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||
| (in thousands) | |||||||||||
| (Unaudited) | |||||||||||
| For the Nine Months Ended | |||||||||||
| September 30, | |||||||||||
| 2015 | 2014 | ||||||||||
| Net income | $ | 3,848 | $ | 6,585 | |||||||
| Loss from discontinued operations | 1,598 | 854 | |||||||||
| Depreciation, amortization and other non-cash items | 9,554 | 10,201 | |||||||||
| Working capital changes | (11,428 | ) | (6,442 | ) | |||||||
| Operating activities of discontinued operations | (28 | ) | 4,745 | ||||||||
| Net cash provided by operating activities | 3,544 | 15,943 | |||||||||
| Capital expenditures | (7,857 | ) | (4,985 | ) | |||||||
| Acquisition of businesses | — | (265 | ) | ||||||||
| Proceeds from sale of assets | 320 | 17 | |||||||||
| Proceeds from sale of FTS | 13,839 | — | |||||||||
| Proceeds from issuance of debt | 44,600 | — | |||||||||
| Payments on debt | (39,056 | ) | (916 | ) | |||||||
| Debt issuance costs | (571 | ) | — | ||||||||
| Issuance of common stock | 65 | 148 | |||||||||
| Other, net | (186 | ) | (401 | ) | |||||||
| Effect of exchange rate changes on cash | (1,321 | ) | (485 | ) | |||||||
| Increase in cash and cash equivalents | 13,377 | 9,056 | |||||||||
| Cash and cash equivalents at beginning of period | 33,753 | 33,240 | |||||||||
| Cash and cash equivalents at end of period | $ | 47,130 | $ | 42,296 | |||||||
| FURMANITE CORPORATION | ||||||||||||||||||||
| BUSINESS SEGMENT DATA | ||||||||||||||||||||
| (in thousands) | ||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| Engineering | ||||||||||||||||||||
| Technical | & Project | |||||||||||||||||||
| Services | Solutions |
Corporate1 |
Total | |||||||||||||||||
| Three months ended September 30, 2015 | ||||||||||||||||||||
| Revenues from external customers | $ | 81,938 | $ | 15,470 | $ | — | $ | 97,408 | ||||||||||||
| Operating income (loss)2 | $ | 6,517 | $ | 963 | $ | (4,344 | ) | $ | 3,136 | |||||||||||
| Three months ended September 30, 2014 | ||||||||||||||||||||
| Revenues from external customers | $ | 85,762 | $ | 9,398 | $ | — | $ | 95,160 | ||||||||||||
| Operating income (loss)2 | $ | 7,832 | $ | 307 | $ | (5,688 | ) | $ | 2,451 | |||||||||||
| Nine months ended September 30, 2015 | ||||||||||||||||||||
| Revenues from external customers | $ | 259,317 | $ | 37,222 | $ | — | $ | 296,539 | ||||||||||||
| Operating income (loss)2 | $ | 28,506 | $ | 1,899 | $ | (18,200 | ) | $ | 12,205 | |||||||||||
| Nine months ended September 30, 2014 | ||||||||||||||||||||
| Revenues from external customers | $ | 279,801 | $ | 27,504 | $ | — | $ | 307,305 | ||||||||||||
| Operating income (loss)2 | $ | 29,781 | $ | 108 | $ | (15,468 | ) | $ | 14,421 | |||||||||||
_______________________________
| 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 | For the three and nine months ended September 30, 2015, Corporate includes nil and approximately $2.2 million, respectively, of incremental professional fees and other costs associated with the Company's 2015 Annual Meeting of Stockholders. For both the three and nine months ended September 30, 2014, Corporate includes approximately $0.9 million of incremental compensation expenses pursuant to the provisions of a retirement agreement with a Company executive. | ||
| FURMANITE CORPORATION | |||||||||||||||||||||
| Reconciliation of Non-GAAP Financial Measures | |||||||||||||||||||||
| (in thousands, except per share data) | |||||||||||||||||||||
| For the Three Months | |||||||||||||||||||||
| Ended September 30, 2015 | |||||||||||||||||||||
| Foreign | Other | ||||||||||||||||||||
| Currency | Reconciling | Non-GAAP | |||||||||||||||||||
| As Reported | Impacts |
Items 1, 2 |
Basis | ||||||||||||||||||
| Revenues | $ | 97,408 | $ | 5,176 | $ | — | $ | 102,584 | |||||||||||||
| Operating costs | 71,774 | 3,781 | — |
75,555 |
|||||||||||||||||
| Depreciation & amortization | 2,877 | 120 | — | 2,997 | |||||||||||||||||
| Selling, general and administrative expense | 19,621 | 926 | (304 | ) |
20,243 |
||||||||||||||||
| Operating income | 3,136 | 349 | 304 | 3,789 | |||||||||||||||||
| Interest income and other income (expense), net | 146 | (113 | ) | — | 33 | ||||||||||||||||
| Interest expense | (345 | ) | — | — | (345 | ) | |||||||||||||||
| Income from continuing operations before income taxes | 2,937 | 236 | 304 | 3,477 | |||||||||||||||||
| Income tax expense | (1,418 | ) | (59 | ) | (175 | ) | (1,652 | ) | |||||||||||||
| Income from continuing operations | 1,519 | 177 | 129 | 1,825 | |||||||||||||||||
| Loss from discontinued operations, net of income tax | (1,359 | ) | — | 917 | (442 | ) | |||||||||||||||
| Net income | $ | 160 | $ | 177 | $ | 1,046 | $ |
1,383 |
|||||||||||||
| Diluted earnings per share - continuing operations | 0.04 | — | 0.01 |
0.05 |
|||||||||||||||||
| Diluted loss per share - discontinued operations | (0.04 | ) | — | 0.03 | (0.01 | ) | |||||||||||||||
| Diluted earnings per share - net income | $ | — | $ | — | $ | 0.04 | $ | 0.04 | |||||||||||||
| For the Three Months | |||||||||||||||||||||
| Ended September 30, 2014 | |||||||||||||||||||||
| Foreign | Other | ||||||||||||||||||||
| Currency | Reconciling | Non-GAAP | |||||||||||||||||||
| As Reported | Impacts |
Items 1, 2 |
Basis | ||||||||||||||||||
| Revenues | $ | 95,160 | $ | — | $ | — | $ | 95,160 | |||||||||||||
| Operating costs | 68,122 | — | — | 68,122 | |||||||||||||||||
| Depreciation & amortization | 2,830 | — | — | 2,830 | |||||||||||||||||
| Selling, general and administrative expense | 21,757 | — | (858 | ) | 20,899 | ||||||||||||||||
| Operating income | 2,451 | — | 858 | 3,309 | |||||||||||||||||
| Interest income and other income (expense), net | 174 | (152 | ) | — | 22 | ||||||||||||||||
| Interest expense | (467 | ) | — | — | (467 | ) | |||||||||||||||
| Income from continuing operations before income taxes | 2,158 | (152 | ) | 858 | 2,864 | ||||||||||||||||
| Income tax expense | (986 | ) | 135 | (343 | ) | (1,194 | ) | ||||||||||||||
| Income from continuing operations | 1,172 | (17 | ) | 515 | 1,670 | ||||||||||||||||
| Income (loss) from discontinued operations, net of income tax | (110 | ) | — | 195 | 85 | ||||||||||||||||
| Net income | $ | 1,062 | $ | (17 | ) | $ | 710 |
$ |
1,755 |
||||||||||||
| Diluted earnings per share - continuing operations | 0.03 | — | 0.01 | 0.04 | |||||||||||||||||
| Diluted earnings per share - discontinued operations | — | — | 0.01 | 0.01 | |||||||||||||||||
| Diluted earnings per share - net income | $ | 0.03 | $ | — | $ | 0.02 | $ | 0.05 | |||||||||||||
_____________________________
| 1 | For the three months ended September 30, 2015, other reconciling items applicable to continuing operations consist of the following non-routine items: loss contingency expense of $0.5 million, bad debt expense of $0.2 million, an insurance-related benefit of $0.4 million and the related tax impacts of $0.2 million. For the three months ended September 30, 2014, other reconciling items applicable to continuing operations consist of incremental compensation expenses pursuant to the provisions of a retirement agreement with a Company executive of $0.9 million and the related tax impact of $0.3 million. | ||
| 2 | For the three months ended September 30, 2015, the reconciling item applicable to discontinued operations consists of exit costs of $1.2 million ($0.7 million net of tax) and the loss on the sale of FTS of $0.4 million ($0.2 million net of tax). For the three months ended September 30, 2014, the reconciling item applicable to discontinued operations consists of direct costs associated with the integration and management transition of the FTS division of $0.3 million ($0.2 million net of tax). | ||
| FURMANITE CORPORATION | |||||||||||||||||||||
| Reconciliation of Non-GAAP Financial Measures (Continued) | |||||||||||||||||||||
| (in thousands, except per share data) | |||||||||||||||||||||
| For the Nine Months | |||||||||||||||||||||
| Ended September 30, 2015 | |||||||||||||||||||||
| Foreign | Other | ||||||||||||||||||||
| Currency | Reconciling | Non-GAAP | |||||||||||||||||||
| As Reported | Impacts |
Items 1, 2 |
Basis | ||||||||||||||||||
| Revenues | $ | 296,539 | $ | 15,427 | $ | — | $ | 311,966 | |||||||||||||
| Operating costs | 212,119 | 11,109 | 332 | 223,560 | |||||||||||||||||
| Depreciation & amortization | 8,473 | 321 | — | 8,794 | |||||||||||||||||
| Selling, general and administrative expense | 63,742 | 2,757 | (2,454 | ) | 64,045 | ||||||||||||||||
| Operating income | 12,205 | 1,240 | 2,122 | 15,567 | |||||||||||||||||
| Interest income and other income (expense), net | (932 | ) | 1,001 | — | 69 | ||||||||||||||||
| Interest expense | (1,333 | ) | — | 149 | (1,184 | ) | |||||||||||||||
| Income from continuing operations before income taxes | 9,940 | 2,241 | 2,271 | 14,452 | |||||||||||||||||
| Income tax expense | (4,494 | ) | (305 | ) | (1,005 | ) | (5,804 | ) | |||||||||||||
| Income from continuing operations | 5,446 | 1,936 | 1,266 | 8,648 | |||||||||||||||||
| Loss from discontinued operations | (1,598 | ) | — | 917 | (681 | ) | |||||||||||||||
| Net income | $ | 3,848 | $ | 1,936 | $ | 2,183 | $ | 7,967 | |||||||||||||
| Diluted earnings per share - continuing operations | 0.14 | 0.05 | 0.04 | 0.23 | |||||||||||||||||
| Diluted loss per share - discontinued operations | (0.04 | ) | — | 0.02 | (0.02 | ) | |||||||||||||||
| Diluted earnings per share - net income | $ | 0.10 | $ | 0.05 | $ | 0.06 | $ | 0.21 | |||||||||||||
| For the Nine Months | |||||||||||||||||||||
| Ended September 30, 2014 | |||||||||||||||||||||
| Foreign | Other | ||||||||||||||||||||
| Currency | Reconciling | Non-GAAP | |||||||||||||||||||
| As Reported | Impacts |
Items 1, 2 |
Basis | ||||||||||||||||||
| Revenues | $ | 307,305 | $ | — | $ | — | $ | 307,305 | |||||||||||||
| Operating costs | 217,473 | — | — | 217,473 | |||||||||||||||||
| Depreciation & amortization | 8,145 | — | — | 8,145 | |||||||||||||||||
| Selling, general and administrative expense | 67,266 | — | (858 | ) | 66,408 | ||||||||||||||||
| Operating income | 14,421 | — | 858 | 15,279 | |||||||||||||||||
| Interest income and other income (expense), net | (429 | ) | 479 | — | 50 | ||||||||||||||||
| Interest expense | (1,356 | ) | — | — | (1,356 | ) | |||||||||||||||
| Income from continuing operations before income taxes | 12,636 | 479 | 858 | 13,973 | |||||||||||||||||
| Income tax (expense) | (5,197 | ) | 22 | (343 | ) | (5,518 | ) | ||||||||||||||
| Income from continuing operations | 7,439 | 501 | 515 | 8,455 | |||||||||||||||||
| Loss from discontinued operations | (854 | ) | — | 327 | (527 | ) | |||||||||||||||
| Net income | $ | 6,585 | $ | 501 | $ | 842 | $ | 7,928 | |||||||||||||
| Diluted earnings per share - continuing operations | 0.19 | 0.01 | 0.02 | 0.22 | |||||||||||||||||
| Diluted loss per share - discontinued operations | (0.02 | ) | — | 0.01 | (0.01 | ) | |||||||||||||||
| Diluted earnings per share - net income | $ | 0.17 | $ | 0.01 | $ | 0.03 | $ | 0.21 | |||||||||||||
______________________________
| 1 | For the nine months ended September 30, 2015, other reconciling items applicable to continuing operations consist of the following non-routine items: a pension curtailment/settlement gain of $0.3 million, incremental professional fees and other costs associated with the Company's 2015 Annual Meeting of Stockholders of $2.2 million, loss contingency expense of $0.5 million, bad debt expense of $0.2 million, an insurance-related benefit of $0.4 million and the related tax impacts of $1.0 million. For the nine months ended September 30, 2014, other reconciling items applicable to continuing operations consist of incremental compensation expenses of $0.9 million pursuant to the provisions of a retirement agreement with a Company executive and the related tax impact of $0.3 million. | ||
| 2 | For the nine months ended September 30, 2015, the reconciling items applicable to discontinued operations consists of exit costs of $1.2 million ($0.7 million net of tax) and the pre-tax loss on the disposition of FTS of $0.4 million ($0.2 million net of tax). For the nine months ended September 30, 2014, the reconciling item applicable to discontinued operations consists of direct costs associated with the integration and management transition of the FTS division of $0.5 million ($0.3 million net of tax). | ||
| FURMANITE CORPORATION | |||||||||||||||||||||
| Reconciliation of Non-GAAP Financial Measures (continued) | |||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||
| For the Three Months | For the Nine Months | ||||||||||||||||||||
| Ended September 30, | Ended September 30, | ||||||||||||||||||||
| 2015 | 2014 | 2015 | 2014 | ||||||||||||||||||
| Reconciliation of EBITDA to Net Income: | |||||||||||||||||||||
| EBITDA | $ | 6,159 | $ | 5,455 | $ | 19,746 | $ | 22,137 | |||||||||||||
| Less: | |||||||||||||||||||||
| Depreciation and amortization expense | (2,877 | ) | (2,830 | ) | (8,473 | ) | (8,145 | ) | |||||||||||||
| Interest expense | (345 | ) | (467 | ) | (1,333 | ) | (1,356 | ) | |||||||||||||
| Income tax expense | (1,418 | ) | (986 | ) | (4,494 | ) | (5,197 | ) | |||||||||||||
| Loss from discontinued operations, net of income tax | (1,359 | ) | (110 | ) | (1,598 | ) | (854 | ) | |||||||||||||
| Net income | $ | 160 | $ | 1,062 | $ | 3,848 | $ | 6,585 | |||||||||||||
| Reconciliation of Adjusted EBITDA to Net income: | |||||||||||||||||||||
| Adjusted EBITDA | $ | 6,819 | $ | 6,161 | $ | 24,430 | $ | 23,474 | |||||||||||||
| Foreign currency impacts | (356 | ) | 152 | (2,562 | ) | (479 | ) | ||||||||||||||
| Pension curtailment/settlement gain | — | — | 332 | — | |||||||||||||||||
| Incremental professional fees and other costs associated with 2015 Annual Meeting of Stockholders | — | — | (2,150 | ) | — | ||||||||||||||||
| Incremental compensation expense pursuant to the provisions of a retirement agreement with a Company executive | — | (858 | ) | — | (858 | ) | |||||||||||||||
| Non-routine bad debt expense | (223 | ) | — | (223 | ) | — | |||||||||||||||
| Non-routine loss contingency expense | (500 | ) | — | (500 | ) | — | |||||||||||||||
| Non-routine insurance-related benefit | 419 | — | 419 | — | |||||||||||||||||
| EBITDA | 6,159 | 5,455 | 19,746 | 22,137 | |||||||||||||||||
| Less: | |||||||||||||||||||||
| Depreciation and amortization expense | (2,877 | ) | (2,830 | ) | (8,473 | ) | (8,145 | ) | |||||||||||||
| Interest expense | (345 | ) | (467 | ) | (1,333 | ) | (1,356 | ) | |||||||||||||
| Income tax expense | (1,418 | ) | (986 | ) | (4,494 | ) | (5,197 | ) | |||||||||||||
| Loss from discontinued operations, net of income tax | (1,359 | ) | (110 | ) | (1,598 | ) | (854 | ) | |||||||||||||
| Net income | $ | 160 | $ | 1,062 | $ | 3,848 | $ | 6,585 | |||||||||||||
View source version on businesswire.com: http://www.businesswire.com/news/home/20151106005377/en/
Furmanite Corporation
Robert S. Muff, 713-634-7775
Investor
Relations
investor@furmanite.com
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