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.
ENGlobal Announces Agreement to Sell Its Gulf Coast Engineering and In-Plant ...
GlobeNewswire (press release) - Jul 16, 2013
HOUSTON, July 16, 2013 (GLOBE NEWSWIRE) -- ENGlobal Corporation (Nasdaq:ENG), a leading provider of energy-related engineering and automation services, announced today that it has signed a definitive agreement under which ENGlobal's Gulf ...
FURMANITE CORP. (KA5) Is Yet to See Trading Action on Nov 6
HuronReport - Nov 6, 2017
Shares of FURMANITE CORP. (FRA:KA5) closed at 4.86 yesterday. FURMANITE CORP. currently has a total float of shares and on average sees shares exchange hands each day.
Team Inc.
MarketWatch - Oct 20, 2010
Mario Gabelli Buys Kite Pharma Inc, Zimmer Biomet Holdings Inc, O'Reilly Automotive Inc, Sells ... Mario Gabelli Buys Kite Pharma Inc, Zimmer Biomet Holdings Inc, O'Reilly Automotive Inc, Sells Panera Bread Co, VCA Inc, Janus Henderson Group PLC. Nov.
Team Inc. CEO steps down after calls for his ouster
Chron.com - Sep 18, 2017
RELATED: Sugar Land company buys Furmanite in $335 million deal. Owen oversaw Team's growth through acquisitions of Houston companies Furmanite and QualSpec. But Engine criticized Team for allegedly overpaying for both and for failing to efficiently ...
Team Industrial Services Expands Headquarters in Sugar Land
Commercial Property Executive - Nov 28, 2016
The decision to occupy 59,000 square feet of office space at 13131 Dairy Ashford Road comes in correlation with the company's recent acquisition of the Furmanite Corp. “The City of Sugar Land is proud to be the home of Team Industrial's corporate ...
Engine Capital Delivers Letter to Team, Inc. Board of Directors
PR Newswire (press release) - Sep 12, 2017
From a capital allocation perspective, we believe management has overpaid for two acquisitions, Qualspec and Furmanite2. Despite paying a combined $540 million for these two companies, Team's enterprise value has decreased from $900 million on July 6 ...
How to Uncover Institutional Buying
Zacks.com - Aug 20, 2013
One of the best ways to find stocks on the move that are grabbing the attention of investors is to screen for stocks with increasing volume.
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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