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Furmanite Corporation (NYSE:FRM)

Q3 2008 Earnings Call

November 10, 2008 11 a.m. ET

Executives

John Barnes – CEO

Howard Wadsworth – CFO

Mike Rose – President

Joe Milliron – Chief Operating Officer

Analysts

Matt Duncan – Stevens, Inc.

Steve Ferazani - Sidoti

Craig Swan – Brazos Capital

Operator

Good morning and thank you for joining today’s call. Before I introduce Mr. Barnes, allow me to explain the format of the call. Following the presentation today, we will invite questions from panelists and fund managers. At that time, I will explain the procedure for indicating that you wish to ask a question.

On behalf of Furmanite, we would like to say that certain statements that may be made in the call today may not be purely historical and, as such, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

There can be no assurance that any forward-looking statements made in this call will prove to be accurate and should not be regarded as representation that the objectives and plans of the company will be achieved. Any forward-looking statements made in this call are based on information presently available to management and the company assumes no obligation to update them.

I would like to introduce Mr. John Barnes, CEO of Furmanite Corporation. Mr. Barnes, you may begin.

John Barnes

Thank you, Heather. Good morning ladies and gentlemen, thank you for being with us on our third quarter earning’s release and, again, I have with me this morning Mike Rose, Joe Milliron, and Howard Wadsworth. Each of these gentlemen will be speaking with you in some detail about various aspects of the company.

Let me just make a few brief remarks before we get in to that. The third quarter performance, in my opinion, really does demonstrate the company’s strength. In spite of the impact on revenue as a result of the hurricanes, we delivered a 49% increase in our net income, and Mike and Joe will speak to you quite a bit of detail about that as we go forward.

Year-to-date, the company is on track. We’ve shown a 10% increase in revenues, an 85% increase in net income, and an 81% increase in earnings-per-share. And that’s reflecting the leverage we have been talking to you about for several quarters now with that infrastructure in place.

And as we grow revenues, add more business to this company, we can continue to leverage in, we think, for some time to come, the unusual amount of drop-through that will lead to our earnings, as well as our cash flow.

In spite of the weather we experienced in August and September, we are seeing things return to a normal business activity. Howard will discuss with you what’s going on in the currency of market that I’m sure all of you are aware of in recent weeks and how we see that impacting us in the fourth quarter. But, in spite of that, we are expecting a very good fourth quarter.

The results throughout the year have reflected the company’s ability to leverage new revenue gains in a significant operating income and netting new increases. It’s reflected our ability to manage our markets. We have been expanding within our existing customer base, we have been adding new business, we have also increased exposure in various areas, outlying areas, in where we have traditionally have been on the fringe.

We’ve opened some new frontiers through the course of this year in West Africa and the Middle East and, as you are aware, we have been making a major push into mainland China. We are making more of our services available in all of these locations.

We had indicated to you earlier that historically with all of the various service lines we have in this company, the typical office was primarily reflecting two, three, perhaps four of these services, and a large part of our strategy going forward is to help all of these services throughout all of our offices around the world.

Being close to our customers geographically is very, very important and we’ve made major strides in that this year, we will continue to do that. It’s just as important to be sure we’re staffed to meet these customers’ specific needs, and we’ve spent a lot of time and a lot of focus on that.

Overall condition of the company is very, very strong. We’re generating very strong cash flow this year. We generated plenty of cash flow to handle all of our CapEx, the increased need for working capital as we’ve expanded our business. We’ve generated additional cash flow to make significant debt pay-down and, at the same time, we’ve been building our cash.

Debt is down significantly. Late last year, early this year, $5 million of the old 8.75 debentures were eliminated, and we have actually paid down $7 million of our bank facility; $3 million of that was in the third quarter. Our debt is now down from almost $50 million a little over a year ago, to about $35 million today. Meanwhile, our cash is very strong. It’s actually grown from $31.6 million at the end of last year to $33.7 million this year.

I think this very strong financial condition that we’re finding ourselves in is going to bode very, very well for us over the next year or so as we see the economy tighten up around the world.

We also had an opportunity earlier this year in mid to late summer when we saw a significant drop in LIBOR rates, which is what our bank financing is priced off of, to go ahead and lock in what now looks like some very, very attractive rates for us.

We were allowed to go out as long as nine months, we did that, and we locked those lower rates in through the end of this year and you are seeing that show up in conjunction with the significant debt pay-down for a much, much lower interest cost in our financials than what we were running a year ago.

Basically, all the fundamentals are in place for continued growth. This thing is exactly where we wanted it to be, we have specific plans for dealing with the environment we’re finding ourselves in now and we’ll be talking to you more about that.

Let me go ahead and turn this over to Howard and let him go through the numbers for the quarter of the year-to-date with you.

Howard Wadsworth

Thanks John. We filed our form 10Q this morning so it’s available out there on the internet for all of you to look at to get some things from. Before I talk about the numbers, I want to talk a little bit about the effect of currency.

In the earnings release, we note that the effects of currency and it looks a little strange that a favorable increase on revenues and a small, unfavorable decrease on operating income has a small, favorable increase on net income. But that’s the mix for business in the countries in which we operate. We operate all around the world and the currencies go up and down all the time.

In the third quarter we saw a pretty good decline in the British pound, while the Euro was up slightly, and the Australian dollar was flat, all compared to last year’s rates. In the last several weeks, we have seen further declines in a lot of the currencies.

But we manage our businesses around the world in those local currencies, and we collect revenues in local currency, we pay our people in local currency, we pay our bills in local currency. At the end of the day, currencies to not affect the fundamentals of our business in the long term.

Let me look a little bit at the income statement numbers for you. Revenues for the quarter were $75.9 million, over $1.7 million over last year; $239.5 million for the nine months, up $22.1 million compared to $217.4 million last year. Operating income was $6.6 million for the quarter, compared to $5.8 million last year, and was $22.3 million for the nine months, compared to $14.8 million last year.

Our interest expense was down about a half a million for the quarter, and $1.3 million year-to-date, and John talked about the reasons for that a minute ago.

Our overall effective tax rate was 21% for 2008 year-to-date versus 29% for 2007, and that’s due to a mix of the businesses and the countries in which we operate. We continue to get manifold reductions in taxes by proactively maximizing our foreign deductions.

On the bottom line net income for the quarter was $5.4 million or $0.15 a share, up 49% from $3.6 million or $0.10 a share last year, and $16.8 million or $0.45 a share up 85% from $9.1 million or $0.25 a share for the nine months year-to-date last year.

Looking at the balance sheet, our working capital is significantly strengthened since year end from $77 million to $84 million. As John mentioned, cash has remained constant at around $33 million. We had a net increase of about $3.5 million in inventories due a higher level of business this year than at the end of the year, and we’ve made progress all year long in our DSOs. We’re at mid to low 70s now versus high 70s or low 80s at the end of the year, but we still have aggressive goals to attain.

On CapEx we spent about $5.4 million so far in 2008 and we still expect our CapEx for the year to be in the $8 million to $10 million range. As John said earlier, we paid down over $7 million this year in bank debt, and $3 million of that was in the third quarter and we will continue to use a portion of our strong operating cash flows to pay down that debt over time.

We’ve talked about our ERP system in the past, back in May we turned on the United States. Last quarter, I told you, we had just turned on the UK and Australia. We’ve just now turned on (inaudible) Europe, and we’re on track to turn on Asia around the end of the year. We’re still on time and we’re still on budget.

Now, I’ll turn it over to Mike.

Mike Rose

Thank you, Howard. Good morning. I agree with John that this quarter’s results when compared to last year’s quarter showed that our long-term plan is working with our base of business grown significantly over last year.

The quarter was affected, as John mentioned, with back to back hurricanes, Gustav and Ike. As you probably remember, in late August, it happened late August, early September. As you already know, the southern region of our U.S. operations is the engine. Most of our refiner clients are located in this region and they are all scheduling turnarounds during this August, September timeframe.

The forced shutdowns due to the two hurricanes and the resulting lack of power stretched those shutdowns to an average of 23 days for our clients. With the dislocation of supply beginning to show around the country homeland security insisted that the refineries startup as soon as they could, which forced our clients to eliminate the planned shutdowns for routine maintenance.

We estimate that the result of this was a loss of 7 to $8 million in revenues in the U.S. Our estimates indicate if it would have not been for these two hurricanes to contend with, the quarter for the U.S. would have shown a more representative increase in revenue.

By region this quarter, Furmanite performance looked like this. In the U.S., when compared to third quarter ’07, the U.S. did not meet last year’s results. In fact, they were 2% behind. This is not indicative of the real progress the U.S. has made over the past year.

As I mentioned before, if the southern region was not affected by the back to back acts of God we would have seen, at a minimum, an additional $7 million of revenue. Which, when compared to last year’s same quarter, was translated into a 20% increase. When compared to the first quarter of ’08, where our level of activity is similar to the third quarter, we were on track before the hurricane effect.

Year-to-date. The U.S. is up 11% in revenue, a gain of $11 million, and up close to 300% in operating income, a gain of $5 million in the nine months. In Europe, when we compare the third quarter 2008 with third quarter ’07, Europe’s revenue grew by 8%, and on a year-to-date comparison it shows Europe is up 9% of revenue and up 29% in operating income, a gain of $2.6 million.

Asia Pacific, for the third quarter the Far East was behind last year’s revenue by 3%. The main reason is that in 2007 we had a large offshore hot tapping job, that I believe I mentioned to you at that time. This accounts for most of the disparity of the revenues in a quarter by quarter basis, or comparison.

When we compare year-to-date figures we see growth in revenue’s 11%, however, due to a different mix of services sold that did not include our large scale got tapping work, year-to-date our operating income was 4% behind last year’s results.

When we consolidate the results from all our regions are overall revenue increase was 2% and our operating income increased 13% quarter over quarter. Year-over-year we gained a 10% increase in revenue with a corresponding 51% increase in operating income. Including our estimated hurricane effect upon these numbers I’m confident that if these acts of God had not taken place we would have seen a more substantial year-over-year increase in revenue.

At the first quarter conference call I had indicated that the establishment of China would take some time before we would see the results we are looking for. We are now receiving an increase in inquiries for jobs in Shanghai, which to me is quite encouraging.

However, I hasten to state that we still have a learning curve in front of us to climb before we participate in some large projects. I can say, in spite of that learning curve, we are looking forward to next year, for I believe we will see some real contribution coming from this operation.

In the Middle East we have only one more step to complete before we are fully functional in Saudi Arabia. However, we have captured in Bahrain, which we have had a location for the last year and a half, and (inaudible), hot tapping as well as bolting and on-site machining jobs, place the entire operation in a positive area in both revenue as well as operating income when compared year-over-year.

In the West Africa arena, we have established our operations of Lagos with a satellite office in Port Harcourt. We are fully functional. As in Saudi Arabia we have received several jobs that will cover the costs associated with the establishment of that location. With the government clamping down on the terrorists our clients are beginning to invite us to bid on several hot tapping jobs that will run into next year. So, we’re quite excited about the West Africa operation.

I am looking forward to the fourth quarter. I’m seeing normal activity and I continue to see opportunities going into the new year. As I mentioned in our press release, we’re not seeing at this time a negative impact to our business due to the current economic situation. And, if indeed the economy in the future affects our industry, I believe our customers will turn to high quality, stable, long-term, and reputable vendors, which is an advantage for Furmanite.

Let me state at this point, and we continue to state that we’re not seeing the effects of the economy, but please don’t think that we’re not thinking about or anticipating any effect that may come in the future. If indeed times get tough, or times get tougher, our experience tells us that weak companies will disappear. Furmanite runs a lean shop, we’re prepared if a down turn in activity does come.

We are strong financially, as John has mentioned. And, thus have the capability to take advantage of the opportunities that will present itself due to the shakeout. Therefore, I am also comfortable in stating that in looking ahead I am convinced that Furmanite is on the right track, growing our operating income in a meaningful way. I do not see any slowing down of that trend for this company.

With that, I would like to turn this discussion over to our chief operating officer Joe Milliron. Joe?

Joe Milliron

Thank you, Mike. Good morning ladies and gentlemen. Today I would like to speak to you about our personnel, about our services, and give you a brief operational business update.

Let’s begin with the personnel. As each of you are keenly aware, people are the most important asset of a service company. That brings us to where we stand today with our personnel. At the end of September we have 1,905 fulltime employees, that’s up 140 from the same period last year. During the third quarter we added 43 additional employees. These employees are made up of 23 technicians, 16 salespeople, one design engineer, and then three admin maintenance personnel.

Let’s speak for a moment here about the sales personnel. In order to capture the business opportunities that we’ve spoken to you about in the past, for both the U.S. and around the world, we hired these additional 16 individuals in the third quarter. I’d like to stress the fact that these are additions, these are not replacements, but these are new positions in the organization. The reason we made these is because of the business opportunities that we’ve identified throughout the world.

Continuing our focus on deepening our management bench strength, let’s begin in the U.S. We have made great strides in growing our business here in the U.S. And, Matt Sisson has led the time that has delivered the most substantial growth over the last two and a half years. With such huge opportunities across the U.S. for continued growth, we have tapped Matt to lead the whole country here in the U.S. in the third quarter.

Moving over to Europe, we have been in Europe for many, many years. In Europe we had the same structure being put in place that we have here in the U.S. In Europe, though, we’re called the President, Manager, and Director. We have an extensive search taking place out there which has created highly qualified candidates which we have interviewed and I can tell you we will hire one during the fourth quarter.

Also in Europe, in Germany there’s the third quarter, we were successful in adding a tremendous amount of experience and talent to the organization by placing a new country manager, and also a new sales manager.

Now, moving over to Asia, we’re also seeing strong performance from the new managers that we put in place in Australia and Singapore over the past 24 months.

Let’s move into the services now. I’d like to do a revenue breakdown, and I’ll break it down in turn around services and also under pressure services. The turnaround services for the third quarter were $37.6 million. Compared to last year turnaround services for were $35.5 million.

Turnaround services for the nine months year-to-date ending in September were 127.2 million, compared to the same time period last year of 111.9 million. On the under pressure side, for the third quarter we generated 24.3 million in revenue. For the three months ending last year same time period it was 25 million. Our under pressure for the nine months ending in September is 75.5 million, compared last year to 69.1 million.

Let me explain the third quarter to you. The under pressure services are emergency call out work, which in the quarter, were down compared to last year. These were mostly built around leak sealing, and the leak sealing specifically in our Norwegian country.

That was offset because of the turnarounds that were taking place in that area it was offset with on-site machining in Norway. Our prime contributors to third quarter revenues were leak sealing of 15 million, on-site machining of 14.9 million, and dowels at 11 million.

Now, let me provide you this brief operational business update. Let me again confirm the statement that I made in our earnings call in August that the economic situation has not had any impact on our business to date. So, let me share with you what’s going on in our marketplace.

In Asia, overall there’s been no changes compared to the past. In Australia, our mining, our refining, our power customers continue to be strong there. We continue to focus on our on-site machining, leak sealing, and hot tapping. In Singapore and Malaysia the refining and offshore business has been strong since the third quarter, with our strength being on-site machining, hot tapping, and leak sealing.

Moving into Europe, we have begun to hear certain things about the automotive industry which we’re all aware of. That’s now beginning to impact the steel industry, it is being reported in France to slow down a little bit. Our other industries such as the power, offshore refining, and chemical, we’re not seeing any changes in it.

Here in the U.S., all our industry segments continue to be scheduling and performing their maintenance and repairs. Projects are moving around, but they are not being canceled. Keep in mind that Furmanite’s business is built around maintaining customer’s assets. The need for power will not disappear. The need for gasoline, and home heating oil, and other petroleum based products will continue.

I’ve been in the industrial service business for over 25 years. I’ve been through some ups and downs, but I expect to see same pricing pressures take place on us and also our competitors as we move through this process. The impact I expect to be more difficult on the mom and pops competitors. I’ve already begun to hear stories about the difficulty that their having on financing with the banks and their lines of credit. This could result in a potential reduction of smaller competitors, which would be creating additional opportunities for us here at Furmanite.

I’m looking forward to the fourth quarter and on in to 2009. Now, let me turn it back over to John.

John Barnes

Thank you, gentlemen. As I said, ladies and gentlemen, we’ve had a good quarter, we’ve had a good year and we’re very pleased with our progress. Heather, if you would please, I’d like to go ahead open it up for questions now from our participants.

Question-and-Answer Session

Operator

Thank you, sir. (Operator Instructions). And, your first question comes from the line of Matt Duncan with Stevens Incorporated.

Matt Duncan – Stevens, Inc.

Good morning, guys. The first question I’ve got is just a couple of things on the hurricanes. As I look at your segment revenues, looking at on stream and turnarounds, I guess if I understand you correctly, did the hurricanes impact turnaround work more or on stream work more, or was it about the same?

Joe Milliron

Matt, this is Joe Milliron. I would tell you that the impact took place about the same. In September is when the turnaround begins in the southern division. So, we had an impact both on the turnaround work and also on the under pressure service side.

Matt Duncan – Stevens, Inc.

So, Joe, looking at the fourth quarter then, is the turnaround work now starting to kick in?

Joe Milliron

I could tell you in the fourth quarter, Matt, that the turnaround business was little slower in the gulf coast kicking. Things have now picked up back, basically, to normal operations down there. And, it did not impact are turnaround work in the west coast or in the northeast.

Matt Duncan – Stevens, Inc.

Looking at your U.S. sales and how the hurricanes impacted those, I guess if I’m doing my math right, if I add 7 to 8 million to what your reported U.S. sales were for the quarter, it looks like U.S. revenue growth would’ve been about 20 to 25%, excluding the hurricanes. Does that sound about right, and if so, can that growth rate continue going forward here now that we’re in a little bit more difficult economy?

Mike Rose

Matt, you’re right about the 20% growth increase, and at this point in time with the economy, as we said before, we’re really not seeing the economy at least through this period. So, I would say to you that yes we could see, we’re not seeing any reduction in our targets as far as growth is concerned.

Matt Duncan – Stevens, Inc.

Okay, thanks Mike. And, then looking at the gross margin impact from the hurricanes in the quarter, your gross margin was down quite a bit from the second quarter and year-over-year. Obviously the lower revenue, I would think, probably hurt the gross margin some, but can you speak to how you think the hurricanes impacted your gross margin in the quarter?

Mike Rose

Yes, the hurricanes did impact this, it took us by surprise, and gross margins were reduced. We had some people that were scheduled to do some of these turnarounds, and with the hurricanes coming the way they did, we moved some of those people around within other regions, but not enough. So, the gross margins were affected.

Matt Duncan – Stevens, Inc.

Okay, and then a couple questions about the future and then I’ll jump back in queue. Are you guys seeing any change in demand for your individual services? I guess we’ve heard a lot of chatter about increased turnarounds getting queued up for 2009. Are you guys seeing the same thing? Are you seeing any shift in the demand for your services, now that crack spreads have come in a little bit for the refiners and, I guess, turnaround work might be picking up?

Mike Rose

At this point in time, Matt, we are seeing, especially in the gulf coast, your original question to Joe about turnaround services, they are now scheduled for the first and second quarter of next year. As far as them occurring, whether it’s a slowdown of the economy or not, demand is still there. And, especially with gasoline prices the way they are, it is stretching the refiners. So, the refiner needs to have his maintenance in order to continue operating at full speed.

Matt Duncan – Stevens, Inc

Okay, thanks. And, then looking at currency, maybe Howard, could you talk about how the dollar strengthening my impact your revenues and your earnings going forward here? You give us some color on the third quarter, but maybe if you could talk about what the impact might be on you guys in the fourth quarter, and then early in 2009.

Howard Wadsworth

Well, certainly. In the last couple weeks, as I mentioned, we’ve seen this dollar strengthening in some of the foreign currencies that we have, even further than what it did in the third quarter. So, obviously that’s going to have an impact on us, but you just don’t know on a quarter to quarter basis where it’s going to wind up for the quarter, which countries it’s going to wind up in.

Certainly the pound has come down a lot, euro’s come down a little bit more, but some of the other currencies haven’t done that bad. It’s just going to be a conglomeration of all of the different countries in which we operate. But, certainly the trend would indicate that it’s going to be a downward trend for us.

Matt Duncan – Stevens, Inc

Okay, and the last thing here, and I’ll jump back in queue, it looks like you guys did a very good job of controlling your SG&A expenses this quarter. If I look at those costs as a percent of sales they were down something like 340 basis points year-over-year, and that expense line was down about 3.5 million sequentially.

Obviously, some of that’s going to be due to lower revenue, but I’m just curious, in the face of adding salespeople, how do you think you’re able to keep those SG&A expenses down, and was there anything in particular that you did in this quarter to help keep those costs down?

John Barnes

Matt, as far as the sales are concerned, we’re going to maintain an increase our sales course. To us, sales is the lifeline of the company, and in order for us to maintain our growth goals we need more salespeople. That does not translate into an enormous increase in expense on the G&A side. So, we feel that we can maintain our G&A going forward at the lower numbers.

Matt Duncan – Stevens, Inc

Okay, thanks guys.

Operator

(Operator Instructions) And, your next question comes from the line of Steve Ferazani with Sidoti. Please proceed.

Steve Ferazani - Sidoti

Good morning. I just wanted to follow up first with a last question there, looking at a few of the line items, one being the SG&A, another being depreciation, and the last on the tax rate. Could you give us any idea of run rates moving forward, because all three of those were much lower than certainly I was expecting.

Howard Wadsworth

Well, we don’t forecast run rates on them. As Mike said, we want to keep the SG&A, the S up and the G&A certainly in line. Depreciation is primarily a big factor related to currencies, that’s what a lot of the change that you see in the DD&A in the quarter compared to last year as due to.

But, certainly if continue to add on some CapEx expenditures that will increase that is we go forward. Tax rates, it’s hard to tell because we don’t know where that businesses. If it comes from countries where we have less favorable impact on our foreign taxes from the standpoint of billing out expenses in the United States to the foreign countries, then it will change.

But, as you can see, it’s that substantially lower than it was last year, 21 versus 29%, and that’s the year-to-date rate, and that’s basically what you’ve got to look at.

Steve Ferazani - Sidoti

Explain that depreciation issue a little bit with me. So, that’s the currency impact, so that should come back up or balance up?

Howard Wadsworth

Some of that is the currency, and some of it’s of course that we’re adding on new CapEx as we go. Certainly you’ve got some dropping off, but I think we’re adding faster than what’s dropping off.

Steve Ferazani - Sidoti

Okay. And, then the new operations, Middle East, Africa, which geographical segment are you going to be plugging that into?

John Barnes

At the present time we have that operation in European segments, but as it grows it will become its own operations.

Steve Ferazani - Sidoti

Is that part of the reason why we’re seeing the stronger growth in Europe in the last quarter?

John Barnes

To a certain extent that is part of the reason, but I would say at this point in time because they are both startup companies it has a small effect.

Steve Ferazani - Sidoti

Okay. And, then 7 to $8 million that were delayed, deferred, can we expect a stronger revenue number in Q3 from stuff being pushed right off into Q3? Or, Q4, excuse me.

John Barnes

At this point in time I can’t say that we expect it or don’t, I’m just telling you what happened to us in the third quarter. Certainly we’re out there looking for all businesses and what we get is just what will be offered to us. So, I can’t say to you you’ll see that in either the fourth quarter, or the second, or the first. I just don’t know when our clients will require it.

Steve Ferazani - Sidoti

But, just typically, how does something work if you have a turnaround scheduled, hurricane hits, you have to reschedule it, how does that sort of thing work?

Joe Milliron

Steve, this is Joe. On those hurricanes, when they hit us here, when you look at September, the 20 some days that these plants were down, as a result the reserves went down. Mike stated earlier about the government pushing these refiners to come back online. We did not see, when the fourth quarter started in October, all those turnarounds being pushed into the fourth quarter.

These things get pushed out into the first quarter, second quarter, some of them could even be pushed as far as the third quarter of next year. They get pushed out in time, they don’t disappear because the maintenances needs to be done. They just got to kind of fit them in with their other schedules now.

John Barnes

And, also from a historical point of view, having two hurricanes back to back like that you’re in new territory. So, we really don’t know exactly when they’ll come back on.

Steve Ferazani - Sidoti

Fair enough, I appreciate it guys.

Operator

Your next question comes from the line of Craig Swan with Brazos Capital. Please proceed.

Craig Swan – Brazos Capital

Hi guys, quick question. If you look across your revenue make from your customer standpoint, how much of the revenue is project CapEx versus maintenance CapEx?

Joe Milliron

Craig, I can tell you, again, that project CapEx, specifically in the third quarter, I’ll try to break it down by the different regions, in the U.S. we had hardly any if any project CapEx in the revenue numbers and the third quarter. As we go over to Asia we didn’t have project CapEx there, and I’d say in Europe we had very little. So, I’d say in the third quarter less than 5% was CapEx out there.

Craig Swan – Brazos Capital

And, historically over the past year, what is that makes been? About that, or has it been more like 10%?

Joe Milliron

I’d probably say it wouldn’t be more than 10%, it would be less than 10%.

Craig Swan – Brazos Capital

Okay. All right, thanks guys.

Operator

As there are no more questions in queue at this time, I’d like to turn the call back over to John Barnes for closing remarks.

John Barnes

Ladies and gentlemen, again, we always want to thank you for taking time out of your schedule to spend it with us. We’re very, very pleased with where we are right now. In conclusion I would like to make a couple of comments.

This company is in a very strong position going forward, it’s strong management wise, operations wise, and financially. All the fundamentals are in place for continued growth. As all of you are aware we have announced my retirement at the end of the year.

It’s been an extreme pleasure for me for the last 22 years to spend here leading this company. It could not be in better hands going forward; I have absolute confidence in Mike Rose, and also in Joe. We have spent the last two years in a program of constantly recruiting, and strengthening, and upgrading throughout this company.

And, we’ve seen it in areas, and finance, risk management, cash management, human resources, managers and engineers out in the field and around the world and, in significant upgrading in our technician ranks.

This company is in terrific shape and I’ll say it again, all the fundamentals are in place for continued growth. And, we’re looking forward to the future. Again, thank you very much for being with us today.

Operator

Ladies and gentlemen, thank you for your participation in today’s conference. This concludes the presentation. You may now disconnect. Have a great day.

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Source: Furmanite Corporation Q3 2008 Earnings Call Transcript
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