FRM  Furmanite Corporation

Exchange

NYSE

Sector

Basic Industries

Industry

Engineering & Construction

Market Cap.

212.09M

Vuru Grade

39.67/100

Current Price

$5.58
+0.15 (+2.76%)

Growth Price

$1.85
Overvalued by 66.91%

Stability Price

$0.12
Overvalued by 97.93%

Company Metrics

  • P/E 24.47
  • P/S 0.4
  • P/B 1.42
  • EPS 0.23
  • Cash ROIC 10.14%
  • Cash Ratio 0.21
  • Dividend 0 / 0%
  • Avg. Vol. 92,790.00
  • Shares 55.18M
  • Market Cap. 212.09M

Company Description

Furmanite Corporation, through its subsidiaries, provides technical services in Europe, North America, Latin America, the Middle East, Africa, and the Asia Pacific. It provides on-line repairs of leaks in valves, pipes, and other components of piping systems and related equipment used in flow-process industries; and on-site machining, bolting, valve repair, heat treating, and repair on such system... more


Download 10 Years of Financial Statements:
Income Statement   Balance Sheet   Cash Flow

News

Houston-area midstream merger leads to CEO retirement
Houston Business Journal - Nov 2, 2015
Sugar Land-based midstream company Team Inc. (NYSE: TISI) and Houston-based Furmanite Corp. (NYSE: FRM) have agreed to a $335 million merger that includes stock and debt.
Sugar Land company buys Furmanite in $335 million deal - Chron.com (blog)
Team (TISI) to Acquire Furmanite (FRM) in ~$355M Deal - StreetInsider.com
Furmanite Enters into Definitive Agreement to Sell FTS Division
Business Wire (press release) - Sep 25, 2015
HOUSTON--(BUSINESS WIRE)--Furmanite Corporation (NYSE: FRM) (“Furmanite” or “the Company”) today announced that it has entered into a definitive agreement under which Burrow Global, LLC (“Burrow Global”) will acquire substantially all of the assets ...
Burrow Global, LLC, a Full-Service EPC Firm, Acquires Furmanite Technical ... - PR.com (press release)
Team (TISI) Completes Furmanite Acquisition
StreetInsider.com - Mar 1, 2016
Team, Inc. (NYSE: TISI) announced the successful completion of its merger with Furmanite Corporation, (“Furmanite”). With the closing of the merger transaction, each issued and outstanding share of Furmanite common stock has been converted into the ...
Furmanite Corporation Retains Lazard Freres and Adds Three New Independent ...
Business Wire (press release) - May 7, 2015
HOUSTON--(BUSINESS WIRE)--Furmanite Corporation (“Furmanite” or the “Company”) (NYSE:FRM) today announced that it has reached an agreement with Mustang Capital Management, LLC (“Mustang Capital”) with respect to Furmanite's 2015 Annual ...
Team and Furmanite Announce Approval of Merger by Stockholders of Both Companies
GlobeNewswire (press release) - Feb 25, 2016
SUGAR LAND, Texas and HOUSTON, Feb. 25, 2016 (GLOBE NEWSWIRE) -- Team, Inc. (NYSE:TISI) ("Team") and Furmanite Corporation (NYSE:FRM) ("Furmanite") today announced that stockholders of each of Team and Furmanite overwhelmingly ...
Chairman of embattled energy company steps down
Houston Business Journal - Apr 24, 2015
Update: On April 27, the company postponed its annual meeting to May 7, a one-day extension of the previously announced postponement, to permit Furmanite stockholders to receive a full ten days' notice of the new meeting date.
Furmanite Corporation Chairman Sangwoo “Bill” Ahn to Retire; Annual Meeting ... - Business Wire (press release)
Furmanite Corporation Appoints Kathleen Cochran as Director
Business Wire (press release) - Jul 24, 2014
“On behalf of the Board and management team, we are pleased to welcome Kathy to Furmanite,” said Sangwoo Ahn, Presiding Non-executive Director and Chairman of the Board.
Mustang Capital Announces Proxy Contest at Furmanite Corporation
PR Newswire (press release) - Dec 4, 2014
HOUSTON, Dec. 4, 2014 /PRNewswire/ -- Mustang Capital Management, LLC (together with its director nominees, "Mustang Capital"), a significant stockholder of Furmanite Corporation ("Furmanite" or the "Company") (NYSE: FRM), with beneficial ownership ...
Furmanite Corporation Acquires Self Leveling Machining Technology
Business Wire (press release) - Feb 28, 2011
DALLAS--(BUSINESS WIRE)--Furmanite Corporation (NYSE: FRM) today announced the expansion of its global on-site machining capabilities through the acquisition of Self Leveling Machines Pty Ltd.
Furmanite Corporation Appoints Joseph E. Milliron to Chief Executive Officer
Business Wire (press release) - Nov 7, 2014
HOUSTON--(BUSINESS WIRE)--The Board of Directors (the “Board”) of Furmanite Corporation (the “Company”) (NYSE: FRM) is pleased to announce that Joseph E. Milliron has been named the Company's next Chief Executive Officer (“CEO”), effective ...
Growth Rate Assumed by Market

We did a reverse valuation to calculate the growth rate the market is assuming for FRM to be considered fairly valued at its current market price. It's useful to compare this to the growth rate we're assuming for the Growth Price.

Future Free Cash Flow Growth Rate

This is the annual growth rate we've applied to calculate FRM's Free Cash Flow for the next 10 years. To calculate it, we looked at several time periods of the last 10 years. Feel free to adjust it, but we limit the initial growth rate to 20% and slow it down over the years. Otherwise, long-term sustainability issues come into play.

Discount Rate

The discount rate is the annual rate of return an investor requires to take the risk of investing in a single stock. To account for that risk, this should be above 8-10%, as this is the avg. annual rate of return for the S&P500 over the past 100 years.

$5.58 Current Price

$1.85 Growth Price (DCF)

Overvalued by 66.91%


Growth Rate Assumed by Market: 42.18%


Future Free Cash Flow Growth Rate: 7.8%


Discount Rate: 15.0%


Show Free Cash Flow numbers

$0.12 Stability Price (EPV)

Overvalued by 97.93%


Discount Rate: 15.0%

$0.11 NCA Price

Overvalued by 98.04%

$2.50 Book Price

Overvalued by 55.15%


Inconsistent Cash Return on Invested Capital over the past 5 years

FRM has somewhat efficiently invested its financial resources in buildings, projects, and equipment. However, there has been some inconsistency from year-to-year. Look at reasons for this inconsistency to determine the likelihood of future sustainability.

FRM has created $10.14 of cash for every $100 invested.
Figures in USD. Fiscal year ends in June
20122013201420152016
Free Cash Flow 5.59M -717,000.00 2.41M 8.63M 7.27M
divided by
Invested Capital 148.00M 189.40M 194.35M 34.00M 35.12M
Cash ROIC 3.78% -0.38% 1.24% 25.37% 20.69%

Growing Return on Equity over the past 5 years

FRM has been growing returns with capital that shareholders have invested. This is a positive sign and demonstrates that both the business and management performance are improving over time.

FRM has generated $11.47 of Earnings for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in June
20122013201420152016
Net Income 805,000.00 14.03M 11.36M 5.05M 8.13M
divided by
Stockholders' Equity 119.08M 133.50M 142.46M 29.94M 38.16M
Return on Equity 0.68% 10.51% 7.97% 16.88% 21.30%

Good Business Performance over the past 6 years

It's likely FRM has been unable to maintain profitability in tough economic times, making it a somewhat cyclical business. The other possibility is FRM has expended significant capital on items such as property, plant and equipment in specific years. Look for correlations.

FRM has created positive free cash flow for 7 or 8 of the past 10 years.
Figures in USD. Fiscal year ends in June
201120122013201420152016
Free Cash Flow 1.44M 5.59M -717,000.00 2.41M 8.63M 7.27M

Good Balance Sheet

FRM's Total Assets double Total Liabilities. Its financial position is adequate. Remember to check Shareholders' Equity to see if it's stable or growing. It's one of the best measures of whether a company is creating value for shareholders.
Figures in USD. Fiscal year ends in June
201120122013201420152016
Cash 34.52M 33.19M 33.24M 33.75M 586,000.00 3.44M
Current Assets 145.76M 157.29M 196.70M 202.69M 21.04M 23.11M
Total Assets 207.23M 231.63M 285.17M 284.17M 50.78M 55.24M
Current Liabilities 42.00M 50.44M 62.52M 56.07M 16.19M 16.68M
Total Liabilities 88.34M 112.55M 151.67M 141.71M 20.83M 17.08M
Stockholder' Equity 118.89M 119.08M 133.50M 142.46M 29.94M 38.16M
Current Ratio 3.47 3.12 3.15 3.62 1.30 1.39
TL-to-TA 0.43 0.49 0.53 0.50 0.41 0.31

Consistent Reinvestment of Profits over the past 6 years

FRM has consistently retained profits. This may put FRM in a strong position to invest for the future, by buying new machinery, investing in R&D or a number of other options. By effectively using these earnings, FRM can greatly improve their long-term economic picture.
Figures in USD. Fiscal year ends in June
201120122013201420152016
Retained Earnings 11.60M 12.40M 26.43M 37.78M 454,000.00 8.58M
Retained Earnings Growth - 6.94% 113.10% 42.96% -98.80% 1,790.09%

Highly Competitive Industry over the past 6 years

It's likely that FRM is in an industry with low barriers to entry, spurring high competition. If Gross Margins are at least satisfactory, it's likely FRM invests heavily in R&D and Sales, General & Administrative expenses.

Only $4.58 of every $100 of Revenue have been profit, on average over the past 6 years.
Figures in USD. Fiscal year ends in June
201120122013201420152016
Net Income 23.97M 805,000.00 14.03M 11.36M 5.05M 8.13M
divided by
Revenue 316.21M 326.49M 427.29M 529.20M 91.20M 93.62M
Net Profit Margin 7.58% 0.25% 3.28% 2.15% 5.54% 8.68%

Varying Pricing Power over the past 6 years

FRM has maintained substantial gross margins, suggesting that they have been able to set prices without consideration of the cost of goods sold. However, there is a substantial variation in their Gross Profit Margins from year-to-year, which indicates inconsistent performance. Look at reasons for this inconsistency to determine the likelihood of future sustainability.

$41.92 of every $100 worth of sales have been Gross Profit, on average over the past 6 years.
Figures in USD. Fiscal year ends in June
201120122013201420152016
Gross Profit 316.21M 93.16M 121.25M 131.57M 30.90M 33.59M
divided by
Revenue 316.21M 326.49M 427.29M 529.20M 91.20M 93.62M
Gross Margin 100.00% 28.53% 28.38% 24.86% 33.88% 35.88%

High Capital Intensity over the past 6 years

FRM spends large amounts of capital buying new equipment or investing in new facilities to stay competitive. Over the long term, those costs may have to be fuelled by debt. Look at the growth of Shareholders' Equity to see if this strategy is having a positive or negative impact.

245.63% of Profits are being spent on Capital Expenditures, like Property, Plant, & Equipment, required to run the business.
Figures in USD. Fiscal year ends in June
201120122013201420152016
Capital Expenditure 6.45M 9.29M 18.39M 8.09M 606,000.00 6.42M
divided by
Net Income 23.97M 805,000.00 14.03M 11.36M 5.05M 8.13M
Capital Expenditure Ratio 26.91% 1,153.54% 131.12% 71.25% 11.99% 79.00%

No Dividend History over the past 6 years

FRM has never distributed dividends or has recently suspended their dividend distribution.
Figures in USD. Fiscal year ends in June
201120122013201420152016
Dividend Paid - - - - - -
divided by
Shares Outstanding 37.30M 37.49M 37.63M 37.87M 55.18M 55.18M
Dividend Paid Per Share - - - - - -
Price at Year End 6.31 5.20 10.87 7.77 6.70 5.58
Dividend Yield - - - - - -

No History of Stock Buybacks over the past 6 years

We're neutral on this. It's not necessarily good or bad that FRM hasn't initiated a stock buyback.
Figures in USD. Fiscal year ends in June
201120122013201420152016
Shares Outstanding 37.30M 37.49M 37.63M 37.87M 55.18M 55.18M
Stock Bought Back - -0.53% -0.36% -0.63% -31.38% -
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