Furmanite Corporation Reports Second Quarter 2012 Results
Revenues of $85.9 million, Operating income $4.8 million, Earnings per share $0.05
HOUSTON, Aug 07, 2012 – Solid Company-wide Performance and Growth Exclusive of Several European Operations Impacted by Unfavorable Market and Economic Conditions
Furmanite Corporation today reported results for the quarter ended June 30, 2012. Revenues increased 3.5% to $85.9 million, compared with $83.0 million for the second quarter of 2011. Gross margin on the $85.9 million revenue was 32.2%. Excluding foreign exchange rate fluctuations, revenues would have increased 6.4% over prior year levels. Operating income for the quarter, including $1.4 million of restructuring and corporate headquarter relocation costs, was $4.8 million. Net income for the quarter of $1.8 million, or $0.05 per diluted share, included a $1.0 million net of tax expense for European restructuring and corporate office relocation costs as well as a $2.7 million income tax provision. The elevated income tax rate, at 59% of pre-tax income, is primarily due to unfavorable, non-cash tax effects related to countries impacted by the restructuring initiatives. The full year effective income tax rate for 2012 is projected to be considerably less than 59%, but well above the Company’s estimated 2013 effective tax rate range of 30% to 35%. This quarter’s effective income tax rate is in contrast with an unusually low 20.5% effective income tax rate for the same period in 2011. While foreign currency fluctuations unfavorably impacted second quarter 2012 revenues by $2.4 million as noted above, they had minimal impact on operating results for the quarter.
“Our revenues and earnings are fully in line with our expectations as we continue to address the unfavorable market conditions in four of the European countries in which we operate. We are pleased with the continuing revenue growth achieved by our other locations this quarter, with 15% improvement in the Americas, 17% in Asia Pacific and nearly 6% growth in all other Europe, Middle East and Africa operations,” said Charles R. Cox, chairman and CEO of Furmanite Corporation. “We did not create the economic conditions in Europe, but dealing effectively with changing global conditions goes with our unique position as the only full-service company in our industry that truly “covers the world.” We are confident that the long term benefit of our global footprint will far outweigh the short term expense of adjustments such as those we are now making in Europe.”
Joseph Milliron, Furmanite President and COO, said: “We are very proud of our global team who have delivered solid results this quarter in virtually all locations other than those which have been heavily impacted by the European economic crisis. This underlying strength around the globe underlines our significant upside potential as we restore these few locations to profitability. As we have proceeded with this process, it has become clear that more aggressive action than previously anticipated will be necessary to get the job done, effectively creating a new paradigm to manage these operations far more efficiently. Our projected restructuring expense, however, is still projected to be within the $2.5 million previously announced and we remain on target to substantially complete the necessary action by the end of September.”
Mr. Cox continued, “While our continued progress this quarter is obscured by several short-term reporting matters, particularly the European situation, it is very clear that our new cultural, organizational and strategic direction is generating a major positive impact throughout our organization which we are confident will continue to drive significant future revenue and earnings growth!”