##### Table of Contents



UNITED
STATES  SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the Quarterly Period Ended September 30, 2007
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission File Number 001-05083
 FURMANITE CORPORATION
  Delaware
(State or other jurisdiction of 
Incorporation or organization)
    
    74-1191271
(I.R.S. Employer Identification No.)2435 North Central Expressway 
Suite 700
Richardson, Texas
(Address of principal executive offices)
    
    75080
(Zip Code)
 (972) 699-4000
 Not Applicable
 þ o
 o þ o
 o þ




---



##### 



FURMANITE CORPORATION AND SUBSIDIARIES
 INDEX
 PageNumberPART I.
    
    Financial Information
    
    3Item 1.
    
    Financial Statements
    
    3Condensed Consolidated Balance Sheets as of September 30, 2007
(unaudited) and December 31, 2006
    
    3Condensed Consolidated Statements of Operations for the three
and nine months ended September 30, 2007 and 2006 (unaudited)
    
    4Condensed Consolidated Statements of Changes in Stockholders
Equity for the nine months ended September 30, 2007 (unaudited)
and the year ended December 31, 2006
    
    5Condensed Consolidated Statements of Cash Flows for the nine
months ended September 30, 2007 and 2006 (unaudited)
    
    6Condensed Consolidated Statements of Comprehensive Income
(Loss) for the three and nine months ended September 30, 2007
and 2006 (unaudited)
    
    7Notes to Condensed Consolidated Financial Statements (unaudited)
    
    8Item 2.
    
    Managements Discussion and Analysis of Financial Condition and
Results of Operations
    
    16Item 3.
    
    Quantitative and Qualitative Disclosure About Market Risk
    
    23Item 4.
    
    Controls and Procedures
    
    23PART II.
    
    Other Information
    
    24Item 1.
    
    Legal Proceedings
    
    24Item 1A.
    
    Risk Factors
    
    24Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    24Item 6.
    
    Exhibits
    
    24Certification of CEO Pursuant to Section 302Certification of CFO Pursuant to Section 302Certification of CEO Pursuant to Section 906Certification of CFO Pursuant to Section 906




---



##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 ITEM 1. Financial Statements
 
 FURMANITE CORPORATION AND SUBSIDIARIES
 CONDENSED CONSOLIDATED BALANCE SHEETS
 (in thousands, except share data)
 September 30,
    
    
    December 31,2007
    
    
    2006(Unaudited)AssetsCurrent assets:Cash and cash equivalents
    
    $
    33,124
    
    
    $
    23,937Accounts receivable, trade (net of allowance for doubtful accounts of $3,900
and $3,341 as of September 30, 2007 and December 31, 2006, respectively)
    
    
    61,737
    
    
    
    59,325Receivable from businesses distributed to common stockholders
    
    
    1,443
    
    
    
    1,443Inventories:Raw materials and supplies
    
    
    13,456
    
    
    
    12,633Work-in-process
    
    
    8,976
    
    
    
    6,970Finished goods
    
    
    1,867
    
    
    
    1,808Prepaid and other current assets
    
    
    3,979
    
    
    
    5,046Total current assets
    
    
    124,582
    
    
    
    111,162Property and equipment
    
    
    59,267
    
    
    
    51,523Less accumulated depreciation and amortization
    
    
    30,083
    
    
    
    25,554Property and equipment, net
    
    
    29,184
    
    
    
    25,969Goodwill
    
    
    13,148
    
    
    
    13,148Other assets
    
    
    7,250
    
    
    
    6,018Total assets
    
    $
    174,164
    
    
    $
    156,297Liabilities and Stockholders EquityCurrent liabilities:Accounts payable
    
    $
    16,718
    
    
    $
    14,702Accrued expenses and other current liabilities
    
    
    27,088
    
    
    
    22,425Accrued income taxes
    
    
    2,901
    
    
    
    2,581Bank overdraft
    
    
    
    
    
    
    1,553Current portion of long-term debt
    
    
    3,142
    
    
    
    787Total current liabilities
    
    
    49,849
    
    
    
    42,048Long-term debt, less current portion
    
    
    43,318
    
    
    
    48,721Pension liability
    
    
    3,166
    
    
    
    3,042Other liabilities
    
    
    2,057
    
    
    
    1,881Stockholders equity:Common stock, no par value; 60,000,000 shares authorized; 39,852,785 and
39,258,025 shares issued as of September 30, 2007 and December 31, 2006, respectively
    
    
    4,631
    
    
    
    4,558Additional paid-in capital
    
    
    127,756
    
    
    
    124,884Retained earnings (accumulated deficit)
    
    
    (44,351
    )
    
    
    (53,438
    )Accumulated other comprehensive income
    
    
    5,932
    
    
    
    2,921Treasury stock
    
    
    (18,194
    )
    
    
    (18,320
    )Total stockholders equity
    
    
    75,774
    
    
    
    60,605Total liabilities and stockholders equity
    
    $
    174,164
    
    
    $
    156,297
  3




---



##### Table of Contents



FURMANITE CORPORATION AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 (in thousands, except share and per share data)
 (Unaudited)
 For the Three Months Ended
    
    
    For the Nine Months EndedSeptember 30,
    
    
    September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Revenues
    
    $
    74,190
    
    
    $
    60,260
    
    
    $
    217,358
    
    
    $
    179,598Costs and expenses:Operating costs
    
    
    47,309
    
    
    
    39,114
    
    
    
    141,995
    
    
    
    116,120Depreciation and amortization
    
    
    1,142
    
    
    
    808
    
    
    
    3,262
    
    
    
    2,661Selling, general and administrative
    
    
    19,925
    
    
    
    22,282
    
    
    
    57,316
    
    
    
    59,395Total costs and expenses
    
    
    68,376
    
    
    
    62,204
    
    
    
    202,573
    
    
    
    178,176Operating income (loss)
    
    
    5,814
    
    
    
    (1,944
    )
    
    
    14,785
    
    
    
    1,422Interest and other income, net
    
    
    248
    
    
    
    243
    
    
    
    624
    
    
    
    655Interest expense
    
    
    (872
    )
    
    
    (955
    )
    
    
    (2,659
    )
    
    
    (1,981
    )Income (loss) before income taxes
    
    
    5,190
    
    
    
    (2,656
    )
    
    
    12,750
    
    
    
    96Income tax expense
    
    
    (1,561
    )
    
    
    (652
    )
    
    
    (3,663
    )
    
    
    (2,684
    )Net income (loss)
    
    $
    3,629
    
    
    $
    (3,308
    )
    
    $
    9,087
    
    
    $
    (2,588
    )Earnings (loss) per common share:Basic
    
    $
    0.10
    
    
    $
    (0.10
    )
    
    $
    0.26
    
    
    $
    (0.08
    )Diluted
    
    $
    0.10
    
    
    $
    (0.10
    )
    
    $
    0.25
    
    
    $
    (0.08
    )Weighted-average number of common and
common equivalent shares used in computing
net income per common share:Basic
    
    
    35,664
    
    
    
    34,801
    
    
    
    35,392
    
    
    
    34,666Diluted
    
    
    36,232
    
    
    
    34,801
    
    
    
    35,890
    
    
    
    34,666
  4




---



##### Table of Contents



FURMANITE CORPORATION AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY
 Nine Months Ended September 30, 2007 (Unaudited) and Year Ended December 31, 2006
 (in thousands, except share data)
 Retained Earnings
    
    Accumulated OtherCommon Shares
    
    
    
    
    
    Additional
    
    (Accumulated
    
    ComprehensiveIssued
    
    Treasury
    
    Common Stock
    
    Paid-In Capital
    
    Deficit)
    
    Income (Loss)
    
    Treasury Stock
    
    TotalBalance at January 1, 2006
    
    
    38,805,695
    
    
    
    4,398,012
    
    
    $
    4,507
    
    
    $
    124,481
    
    
    $
    (50,565
    )
    
    $
    (7,091
    )
    
    $
    (20,028
    )
    
    $
    51,304Staff Accounting Bulletin No. 108
adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    997
    
    
    
    
    
    
    
    
    
    
    
    997Revised Balance at January 1, 2006
    
    
    38,805,695
    
    
    
    4,398,012
    
    
    
    4,507
    
    
    
    124,481
    
    
    
    (49,568
    )
    
    
    (7,091
    )
    
    
    (20,028
    )
    
    
    52,301Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,432
    )
    
    
    
    
    
    
    
    
    
    
    (3,432
    )Stock based compensation
    
    
    452,330
    
    
    
    (321,049
    )
    
    
    51
    
    
    
    403
    
    
    
    
    
    
    
    
    
    
    
    1,708
    
    
    
    2,162Minimum pension liability adjustment
for subsidiary, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,750
    
    
    
    
    
    
    
    2,750Adjustment to initially apply FASB
Statement No. 158, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,129
    
    
    
    
    
    
    
    2,129Adjustment to previously provided tax
exposures related to business
distributed to common
stockholders
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (438
    )
    
    
    
    
    
    
    
    
    
    
    (438
    )Foreign currency translation
adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,133
    
    
    
    
    
    
    
    5,133Balance at December 31, 2006
    
    
    39,258,025
    
    
    
    4,076,963
    
    
    
    4,558
    
    
    
    124,884
    
    
    
    (53,438
    )
    
    
    2,921
    
    
    
    (18,320
    )
    
    
    60,605Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,087
    
    
    
    
    
    
    
    
    
    
    
    9,087Stock-based compensation
    
    
    139,139
    
    
    
    (28,000
    )
    
    
    18
    
    
    
    530
    
    
    
    
    
    
    
    
    
    
    
    126
    
    
    
    674Conversion of convertible debentures
to common stock
    
    
    455,621
    
    
    
    
    
    
    
    55
    
    
    
    2,342
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,397Foreign currency translation
adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,011
    
    
    
    
    
    
    
    3,011Balance at September 30, 2007
    
    
    39,852,785
    
    
    
    4,048,963
    
    
    $
    4,631
    
    
    $
    127,756
    
    
    $
    (44,351
    )
    
    $
    5,932
    
    
    $
    (18,194
    )
    
    $
    75,774
  5




---



##### Table of Contents



FURMANITE CORPORATION AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (in thousands)
 (Unaudited)
 For the Nine MonthsEnded September 30,2007
    
    
    2006Operating activities:Net income (loss)
    
    $
    9,087
    
    
    $
    (2,588
    )Reconciliation of net income to net cash used in operating activities:Depreciation and amortization
    
    
    3,262
    
    
    
    2,661Stock-based compensation expense
    
    
    160
    
    
    
    132Provision for doubtful accounts
    
    
    716
    
    
    
    1,895Deferred income taxes
    
    
    (720
    )
    
    
    79Changes in operating assets and liabilities:Accounts receivable
    
    
    (3,128
    )
    
    
    (10,738
    )Inventories
    
    
    (2,888
    )
    
    
    (3,173
    )Prepaid expenses and other current assets
    
    
    1,067
    
    
    
    (69
    )Accounts payable
    
    
    2,016
    
    
    
    (329
    )Accrued expenses
    
    
    4,663
    
    
    
    4,784Income taxes payable
    
    
    320
    
    
    
    829Other, net
    
    
    1,263
    
    
    
    (756
    )Net cash provided by (used in) operating activities
    
    
    15,818
    
    
    
    (7,273
    )Investing activities:Capital expenditures
    
    
    (5,740
    )
    
    
    (4,019
    )Net cash used in investing activities
    
    
    (5,740
    )
    
    
    (4,019
    )Financing activities:Borrowings
    
    
    
    
    
    
    19,489Payments on debt
    
    
    (589
    )
    
    
    (9,066
    )Issuance of common stock
    
    
    514
    
    
    
    1,003Bank overdraft
    
    
    (1,553
    )
    
    
    Net cash (used in) provided by financing activities
    
    
    (1,628
    )
    
    
    11,426Effect of exchange rate changes on cash
    
    
    737
    
    
    
    286Increase in cash and cash equivalents
    
    
    9,187
    
    
    
    420Cash and cash equivalents at beginning of period
    
    
    23,937
    
    
    
    21,526Cash and cash equivalents at end of period
    
    $
    33,124
    
    
    $
    21,946
  6




---



##### Table of Contents



FURMANITE CORPORATION AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
 (in thousands)
 (Unaudited)
 For the Three Months
    
    
    For the Nine MonthsEnded September 30,
    
    
    Ended September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Net income (loss)
    
    $
    3,629
    
    
    $
    (3,308
    )
    
    $
    9,087
    
    
    $
    (2,588
    )Other comprehensive income (loss):Foreign currency translation adjustments,
net of tax
    
    
    1,836
    
    
    
    (711
    )
    
    
    3,011
    
    
    
    646Total other comprehensive income (loss)
    
    
    1,836
    
    
    
    (711
    )
    
    
    3,011
    
    
    
    646Comprehensive income (loss)
    
    $
    5,465
    
    
    $
    (4,019
    )
    
    $
    12,098
    
    
    $
    (1,942
    )
  7




---



##### Table of Contents



FURMANITE CORPORATION AND SUBSIDIARIES
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 September 30, 2007
 (Unaudited)
 1. General and Summary of Significant Accounting Policies
    Change in Presentation
  8




---



##### Table of Contents



FURMANITE CORPORATION AND SUBSIDIARIES
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 September 30, 2007
 (Unaudited)
  Effect of Adopting New Accounting Pronouncements
 Accounting for Uncertainty in Income Taxes  an interpretation of FASB Statement No. 109
  Accounting
for Income Taxes
  Considering the
Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial
Statements
  9




---



##### Table of Contents



FURMANITE CORPORATION AND SUBSIDIARIES
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 September 30, 2007
 (Unaudited)
 Fair Value Measurement
 The Fair Value Option for Financial Assets and
Financial Liabilities
 2. Earnings Per Share
  For the Three Months
    
    
    For the Nine MonthsEnded September 30,
    
    
    Ended September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Net income (loss)
    
    $
    3,629
    
    
    $
    (3,308
    )
    
    $
    9,087
    
    
    $
    (2,588
    )Basic weighted-average common shares outstanding
    
    
    35,664
    
    
    
    34,801
    
    
    
    35,392
    
    
    
    34,666Dilutive effect of common stock equivalents
    
    
    568
    
    
    
    
    
    
    
    498
    
    
    
    Diluted weighted-average common shares outstanding
    
    
    36,232
    
    
    
    34,801
    
    
    
    35,890
    
    
    
    34,666Income (loss) per share:Basic
    
    $
    0.10
    
    
    $
    (0.10
    )
    
    $
    0.26
    
    
    $
    (0.08
    )Dilutive
    
    $
    0.10
    
    
    $
    (0.10
    )
    
    $
    0.25
    
    
    $
    (0.08
    )
  10




---



##### Table of Contents



FURMANITE CORPORATION AND SUBSIDIARIES
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 September 30, 2007
 (Unaudited)
 3. Accrued Expenses
  September 30,
    
    
    December 31,2007
    
    
    2006Compensation and benefits
    
    $
    10,477
    
    
    $
    7,099Employee expenses, travel and training
    
    
    503
    
    
    
    155Asset and equipment costs of sales
    
    
    1,567
    
    
    
    1,197Value added tax payable
    
    
    1,892
    
    
    
    1,563Taxes other than income
    
    
    1,766
    
    
    
    1,251Interest
    
    
    457
    
    
    
    477Professional, audit and legal fees
    
    
    1,743
    
    
    
    1,743Rent
    
    
    490
    
    
    
    232Other
    
    
    8,193
    
    
    
    8,708$
    27,088
    
    
    $
    22,425
 4. Long-Term Debt
  September 30,
    
    
    December 31,2007
    
    
    2006Borrowings under $50,000 revolving bank facility (the $50.0 million facility)
    
    $
    27,590
    
    
    $
    27,590Borrowings under $15,000 revolving bank facility (the $15.0 million facility)
    
    
    15,000
    
    
    
    15,0008.75% convertible subordinated debentures due in 2008
    
    
    2,603
    
    
    
    5,000Capital leases
    
    
    1,267
    
    
    
    1,918Total long-term debt
    
    
    46,460
    
    
    
    49,508Less current portion of long-term debt
    
    
    3,142
    
    
    
    787$
    43,318
    
    
    $
    48,721
   11




---



##### Table of Contents



FURMANITE CORPORATION AND SUBSIDIARIES
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 September 30, 2007
 (Unaudited)
  5. Retirement Plan
  For the Three Months
    
    
    For the Nine MonthsEnded September 30,
    
    
    Ended September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Service costs
    
    $
    195
    
    
    $
    128
    
    
    $
    513
    
    
    $
    384Interest costs
    
    
    1,170
    
    
    
    888
    
    
    
    3,084
    
    
    
    2,664Expected return on plan assets
    
    
    (1,342
    )
    
    
    (960
    )
    
    
    (3,540
    )
    
    
    (2,880
    )Amortization of prior service cost
    
    
    (34
    )
    
    
    (27
    )
    
    
    (90
    )
    
    
    (81
    )Recognized net loss
    
    
    249
    
    
    
    175
    
    
    
    657
    
    
    
    525Net periodic pension cost
    
    $
    238
    
    
    $
    204
    
    
    $
    624
    
    
    $
    612
 Employers Accounting for Defined Benefit Pension and
Other Post Retirement Plans
  6. Stock-Based Compensation
 Share-Based Payment Accounting for Stock-Based Compensation Accounting for Stock Issued to
Employees
 12




---



##### Table of Contents



FURMANITE CORPORATION AND SUBSIDIARIES
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 September 30, 2007
 (Unaudited)
  7. Financial Instruments
  8. Commitments and Contingencies
    13




---



##### Table of Contents



FURMANITE CORPORATION AND SUBSIDIARIES
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 September 30, 2007
 (Unaudited)
 9. Business Segment Data
   United
    
    
    
    
    
    
    Asia-States
    
    
    Europe
    
    
    Pacific
    
    
    TotalThree Months Ended September 30, 2007:Under pressure services
    
    $
    12,110
    
    
    $
    10,024
    
    
    $
    2,865
    
    
    $
    24,999Turnaround services
    
    
    11,959
    
    
    
    18,633
    
    
    
    4,931
    
    
    
    35,523Other services
    
    
    7,260
    
    
    
    5,827
    
    
    
    581
    
    
    
    13,668Total revenues
    
    $
    31,329
    
    
    $
    34,484
    
    
    $
    8,377
    
    
    $
    74,190Operating income (loss)
    
    $
    (1,451
    )
    
    $
    5,245
    
    
    $
    2,020
    
    
    $
    5,814Three Months Ended September 30, 2006:Under pressure services
    
    $
    11,135
    
    
    $
    7,245
    
    
    $
    1,570
    
    
    $
    19,950Turnaround services
    
    
    6,721
    
    
    
    17,094
    
    
    
    3,503
    
    
    
    27,318Other services
    
    
    6,922
    
    
    
    5,305
    
    
    
    765
    
    
    
    12,992Total revenues
    
    $
    24,778
    
    
    $
    29,644
    
    
    $
    5,838
    
    
    $
    60,260Operating income (loss)
    
    $
    (7,399
    )
    
    $
    4,458
    
    
    $
    997
    
    
    $
    (1,944
    )Nine months Ended September 30, 2007:Under pressure services
    
    $
    36,596
    
    
    $
    25,664
    
    
    $
    6,837
    
    
    $
    69,097Turnaround services
    
    
    40,571
    
    
    
    56,820
    
    
    
    14,494
    
    
    
    111,885Other services
    
    
    19,417
    
    
    
    15,325
    
    
    
    1,634
    
    
    
    36,376Total revenues
    
    $
    96,584
    
    
    $
    97,809
    
    
    $
    22,965
    
    
    $
    217,358Operating income (loss)
    
    $
    (2,284
    )
    
    $
    12,322
    
    
    $
    4,747
    
    
    $
    14,785Nine months Ended September 30, 2006:Under pressure services
    
    $
    31,538
    
    
    $
    21,927
    
    
    $
    4,388
    
    
    $
    57,853Turnaround services
    
    
    27,575
    
    
    
    46,189
    
    
    
    10,131
    
    
    
    83,895Other services
    
    
    20,289
    
    
    
    15,602
    
    
    
    1,959
    
    
    
    37,850Total revenues
    
    $
    79,402
    
    
    $
    83,718
    
    
    $
    16,478
    
    
    $
    179,598Operating income (loss)
    
    $
    (12,764
    )
    
    $
    11,255
    
    
    $
    2,931
    
    
    $
    1,422
 14




---



##### Table of Contents



FURMANITE CORPORATION AND SUBSIDIARIES
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 September 30, 2007
 (Unaudited)
  September 30,
    
    
    December 31,2007
    
    
    2006United States
    
    $
    16,147
    
    
    $
    14,763Europe
    
    
    10,403
    
    
    
    9,624Asia-Pacific
    
    
    2,634
    
    
    
    1,582$
    29,184
    
    
    $
    25,969
 15




---



##### Table of Contents



FURMANITE CORPORATION AND SUBSIDIARIES
 
 Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
   Business Overview
    Financial Overview
  16




---



##### Table of Contents



FURMANITE CORPORATION AND SUBSIDIARIES
 Results of Operations
 For the Three Months
    
    
    For the Nine MonthsEnded September 30,
    
    
    Ended September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006(in thousands, except per share data)Revenues
    
    $
    74,190
    
    
    $
    60,260
    
    
    $
    217,358
    
    
    $
    179,598Costs and expenses:Operating costs
    
    
    47,309
    
    
    
    39,114
    
    
    
    141,995
    
    
    
    116,120Depreciation and amortization
    
    
    1,142
    
    
    
    808
    
    
    
    3,262
    
    
    
    2,661Selling, general and administrative
    
    
    19,925
    
    
    
    22,282
    
    
    
    57,316
    
    
    
    59,395Total costs and expenses
    
    
    68,376
    
    
    
    62,204
    
    
    
    202,573
    
    
    
    178,176Operating income (loss)
    
    
    5,814
    
    
    
    (1,944
    )
    
    
    14,785
    
    
    
    1,422Interest and other income, net
    
    
    248
    
    
    
    243
    
    
    
    624
    
    
    
    655Interest expense
    
    
    (872
    )
    
    
    (955
    )
    
    
    (2,659
    )
    
    
    (1,981
    )Income (loss) before income taxes
    
    
    5,190
    
    
    
    (2,656
    )
    
    
    12,750
    
    
    
    96Income tax expense
    
    
    (1,561
    )
    
    
    (652
    )
    
    
    (3,663
    )
    
    
    (2,684
    )Net income (loss)
    
    $
    3,629
    
    
    $
    (3,308
    )
    
    $
    9,087
    
    
    $
    (2,588
    )Earnings (loss) per share:Basic
    
    $
    0.10
    
    
    $
    (0.10
    )
    
    $
    0.26
    
    
    $
    (0.08
    )Diluted
    
    $
    0.10
    
    
    $
    (0.10
    )
    
    $
    0.25
    
    
    $
    (0.08
    )
 Revenues
   Operating Costs
  17




---



##### Table of Contents



FURMANITE CORPORATION AND SUBSIDIARIES
   Selling, General and Administrative
   Depreciation and Amortization
  Interest Expense
  18




---



##### Table of Contents



FURMANITE CORPORATION AND SUBSIDIARIES
  Income Taxes
 Accounting
for Income Taxes
  Accounting for Uncertainty in Income Taxes  an interpretation of FASB Statement No. 109
 Liquidity and Capital Resources
     19




---



##### Table of Contents



FURMANITE CORPORATION AND SUBSIDIARIES
        20




---



##### Table of Contents



FURMANITE CORPORATION AND SUBSIDIARIES
  Critical Accounting Policies and Estimates
   Accounting for Income Taxes
 New Accounting Pronouncements
 Accounting for Uncertainty in Income Taxes- an
interpretation of FASB Statement No. 109
  Considering the
Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial
Statements
 21




---



##### Table of Contents



FURMANITE CORPORATION AND SUBSIDIARIES
  Fair Value Measurement
 The Fair Value Option for Financial Assets and
Financial Liabilities
 Off-Balance Sheet Transactions
  22




---



##### Table of Contents



FURMANITE CORPORATION AND SUBSIDIARIES
 
 Item 3. Quantitative and Qualitative Disclosures About Market Risk
 i.e.
   
 Item 4. Controls and Procedures
 et seq
  23




---



##### Table of Contents



FURMANITE CORPORATION AND SUBSIDIARIES
 
 Part II  Other Information
 
 Item 1. Legal Proceedings
   
 Item 1A. Risk Factors
  
 Item 4. Submission of Matters to a Vote of Security Holders
  
 Item 6. Exhibits
 3.1
    
    Restated Certificate of Incorporation of the Registrant, dated September 26, 1979,
filed as Exhibit 3.1 of the exhibits to the Registrants Registration Statement on Form
S-16, which exhibit is hereby incorporated by reference.3.2
    
    Certificate of Amendment to the Restated Certificate of Incorporation of the
Registrant, dated April 30, 1981, filed as Exhibit 3.2 of the exhibits to the Registrants
Annual Report on Form 10-K (Form 10-K) for the year ended December 31, 1981, which
exhibit is hereby incorporated by reference.3.3
    
    Certificate of Amendment to the Restated Certificate of Incorporation of the
Registrant, dated May 28, 1985, filed as Exhibit 4.1 of the exhibits to the Registrants
Quarterly Report on Form 10-Q (Form 10-Q) for the quarter ended June 30, 1985, which
exhibit is hereby incorporated by reference.3.4
    
    Certificate of Amendment to the Restated Certificate of Incorporation of the
Registrant, dated September 17, 1985, filed as Exhibit 4.1 of the exhibits to the
Registrants Form 10-Q for the quarter ended September 30, 1985, which exhibit is hereby
incorporated by reference.3.5
    
    Certificate of Amendment to the Restated Certificate of Incorporation of the
Registrant, dated July 10, 1990, filed as Exhibit 3.5 of the exhibits to the Registrants
Form 10-K for the year ended December 31, 1990, which exhibit is hereby incorporated by
reference.
 24




---



##### Table of Contents



FURMANITE CORPORATION AND SUBSIDIARIES
 3.6
    
    Certificate of Amendment to the Restated Certificate of Incorporation of the
Registrant, dated September 21, 1990, filed as Exhibit 3.5 of the exhibits to the
Registrants Form 10-Q for the quarter ended September 30, 1990, which exhibit is hereby
incorporated by reference.3.7
    
    Certificate of Amendment to the Restated Certificate of Incorporation of the
Registrant, dated August 8, 2001, filed as Exhibit 3.1 to the Registrants Current Report
on Form 8-K filed on August 22, 2001, which exhibit is hereby incorporated by reference.3.8
    
    Certificate of Amendment to the Restated Certificate of Incorporation of the
Registrant, dated May 17, 2007, filed as Exhibit 3.2 to the Registrants Current Report on
Form 8-K filed on June 20, 2007, which exhibit is hereby incorporated by reference.3.9
    
    By-laws of the Registrant, as amended and restated June 14, 2007, filed as Exhibit 3.1
to the Registrants Current Report on Form 8-K filed on June 20, 2007, which exhibit is
incorporated by reference.4.1
    
    Certificate of Designation, Preferences and Rights related to the Registrants Series B
Junior Participating Preferred Stock, filed as Exhibit 4.2 to the Registrants Form 10-K
for the year ended December 31, 1998, which exhibit is incorporated herein by reference.4.2
    
    Indenture between Moran Energy Inc. (Moran) and First City National Bank of Houston
(First City), dated January 15, 1984, under which Moran issued the 8 3/4% Convertible
Subordinated Debentures due 2008, filed as Exhibit 4.1 to Morans Registration Statement on
Form S-3 (SEC File No. 2-81227), which exhibit is hereby incorporated by reference.4.3
    
    First Supplemental Indenture between the Registrant and First City, dated as of March
20, 1984, under which the Registrant assumed obligations under the Indenture listed as
Exhibit 4.2 above, filed as Exhibit 4.7 of the Registrants Form 10-K for the year ended
December 31, 1983, which exhibit is hereby incorporated by reference.31.1
    
    Certification of Chief Executive Officer, Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002, dated November 8, 2007.31.2
    
    Certification of Chief Financial Officer, Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002, dated November 8, 2007.32.1
    
    Certification of Chief Executive Officer, Pursuant to Section 906(a) of the
Sarbanes-Oxley Act of 2002, dated November 8, 2007.32.2
    
    Certification of Chief Financial Officer, Pursuant to Section 906(a) of the
Sarbanes-Oxley Act of 2002, dated November 8, 2007.
 Signature
  FURMANITE CORPORATION
(Registrant)/s/  HOWARD C. WADSWORTHHoward C. WadsworthSr. Vice President, Treasurer and
Secretary
(Duly Authorized Officer)  25