Attached files
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| 8-K - TEAM INC | v170548_8k.htm |
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NEWS
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TEAM,
INC.
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For
immediate release
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P.
O. Box 123
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contact:
Ted W. Owen
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Alvin,
Texas 77512
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(281)
331-6154
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TEAM, INC. REPORTS 2nd
QUARTER EARNINGS AND AFFIRMS FULL YEAR GUIDANCE
ALVIN, TX, January 5, 2010—-
Team, Inc., (NASDAQ: TISI) today reported net income of $5.8 million ($0.30 per
diluted share) for its second quarter ended November 30, 2009. Results for the
quarter included pre-tax, non-routine legal and accounting costs of $1.2 million
($.04 per diluted share, after tax) related to an ongoing, independent
investigation. Excluding the non-routine costs, net income would have been $6.6
million ($0.34 per diluted share). Revenues for the six months ended November
30, 2009 were $224.2 million and net income for the same period was $7.0 million
($0.36 per diluted share), or $8.4 million ($0.43 per diluted share) excluding
the non-routine charges relating to the investigation. The Company also affirmed
its full year earnings guidance of $0.85 to $1.05 per diluted share (excluding
the effect of the non-routine charges).
“I am
generally pleased with the performance of our business in this weak economic
climate. Our focus has been on managing our costs, maintaining our
profitability, expanding our financial flexibility, and staying well-positioned
for continued long-term business growth,” said Phil Hawk, Team’s Chairman and
CEO.
Second
Quarter Performance
Team’s
revenues during the quarter were $123.3 million, down $25.5 million from the
record setting corresponding prior year quarter. Similarly, revenues for the six
months ended November 30, 2009 were $224.2 million, down $47.9 million from the
prior year. The comparable prior year results represented the best results in
Team history as the effects of the current recession were not felt by Team until
later in the prior fiscal year. The decline in revenues during the current
fiscal year was broad based, affecting nearly all of Team’s geographic regions
and service lines.
Team’s
operating income for the current quarter was $10.3 million, earnings before
income tax was $9.6 million and net income was $5.8 million. These results
include non-routine outside professional costs of $1.2 million related to an
external investigation. Excluding the non-routine costs, operating income would
have been $11.5 million, and net income would have been $6.6 million. Team’s
operating income for the six months ended November 30, 2009 was $12.9 million,
and net income was $7.0 million. Excluding non-routine costs of $2.3 million
for the current six month period, operating income would have been $15.2
million, and net income would have been $8.4 million.
Actions
taken to reduce Team’s overall cost structure and improve efficiency in both its
field service and corporate support activities contributed to the Company’s
performance. SG&A for the current quarter, when adjusted for the
non-routine investigation costs, decreased $3.9 million compared to the prior
year quarter.
As
previously reported, the Audit Committee is conducting an independent
investigation regarding possible violations of the Foreign Corrupt Practices Act
(“FCPA”) in cooperation with the U.S. Department of Justice and the Securities
and Exchange Commission. While the investigation is ongoing, management
continues to believe that any possible violations of the FCPA are limited in
size and scope. The investigation is now expected to be completed during the
first calendar quarter of 2010. The total professional costs associated with
the investigation are now projected to be about $3.0 million.
Team
Affirms Full Year Guidance
Team is
affirming its earnings guidance of $0.85 to $1.05 per fully diluted share for
fiscal year 2010. Such guidance excludes the impact of the non-routine
investigation costs. Earnings guidance is based on the expectation that
revenues in the second half of the year will be approximately 10% higher than in
the first half of the year.
Earnings
Conference Call
In
connection with this earnings release, Team will hold its quarterly conference
call on Wednesday, January 6, 2010 at 8:00 a.m. Central Time (9:00 a.m.
Eastern). The call will be broadcast over the Web and can be accessed on Team’s
Website, www.teamindustrialservices.com.
Individuals wishing to participate in the conference call by phone may call
877-826-1586 and use conference code 26083904.
About
Team, Inc.
Headquartered
in Alvin, Texas, Team Inc. is a leading provider of specialty industrial
services required in maintaining and installing high-temperature and
high-pressure piping systems and vessels that are utilized extensively in the
refining, petrochemical, power, pipeline and other heavy industries. Team
offers these services in over 100 locations throughout the United States,
Angola, Belgium, Canada, Singapore, The Netherlands, Trinidad and Venezuela.
Team’s common stock is traded on the NASDAQ Global Select Market under the
ticker symbol “TISI”.
Certain
forward-looking information contained herein is being provided in accordance
with the provisions of the Private Securities Litigation Reform Act of 1995. We
have made reasonable efforts to ensure that the information, assumptions and
beliefs upon which this forward-looking information is based are current,
reasonable and complete. Such forward-looking statements involve estimates,
assumptions, judgments and uncertainties. There are known and unknown factors
that could cause actual results or outcomes to differ materially from those
addressed in the forward-looking information. Such known factors are detailed in
the Company's Annual Report on Form 10-K for the year ended May 31, 2009 and in
the Company's Quarterly Reports on Form 10-Q as filed with the Securities and
Exchange Commission, and in other reports filed by the Company with the
Securities and Exchange Commission from time to time. Accordingly, there can be
no assurance that the forward-looking information contained herein will occur or
that objectives will be achieved. We assume no obligation to publicly update or
revise any forward-looking statements made today or any other forward-looking
statements made by the company, whether as a result of new information, future
events or otherwise.
TEAM,
INC. AND SUBSIDIARIES
SUMMARY
OF OPERATING RESULTS
(in
thousands, except per share data)
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Three Months Ended
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Six Months Ended
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November 30,
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November 30,
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|||||||||||||||
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2009
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2008
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2009
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2008
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(unaudited)
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(unaudited)
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(unaudited)
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(unaudited)
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Revenues
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$ | 123,292 | $ | 148,752 | $ | 224,229 | $ | 272,090 | ||||||||
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Operating
expenses
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83,844 | 98,667 | 155,347 | 182,896 | ||||||||||||
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Gross
margin
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39,448 | 50,085 | 68,882 | 89,194 | ||||||||||||
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Selling,
general and administrative expenses
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29,403 | 32,132 | 56,432 | 61,790 | ||||||||||||
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Earnings
from unconsolidated affiliates
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232 | 411 | 491 | 675 | ||||||||||||
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Operating
income
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10,277 | 18,364 | 12,941 | 28,079 | ||||||||||||
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Interest
expense, net
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697 | 1,378 | 1,502 | 2,825 | ||||||||||||
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Earnings
before income taxes
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9,580 | 16,986 | 11,439 | 25,254 | ||||||||||||
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Provision
for income taxes
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3,739 | 6,769 | 4,473 | 10,080 | ||||||||||||
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Net
income
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$ | 5,841 | $ | 10,217 | $ | 6,966 | $ | 15,174 | ||||||||
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Earnings
per common share:
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Basic
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$ | 0.31 | $ | 0.54 | $ | 0.37 | $ | 0.81 | ||||||||
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Diluted
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$ | 0.30 | $ | 0.51 | $ | 0.36 | $ | 0.76 | ||||||||
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Weighted
average number of shares outstanding:
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Basic
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18,925 | 18,823 | 18,890 | 18,752 | ||||||||||||
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Diluted
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19,492 | 19,853 | 19,442 | 19,881 | ||||||||||||
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Continuing
operations data:
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Revenues
comprised of:
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TCM
Division
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$ | 71,322 | $ | 76,126 | $ | 128,626 | $ | 141,381 | ||||||||
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TMS
Division
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51,970 | 72,626 | 95,603 | 130,709 | ||||||||||||
| $ | 123,292 | $ | 148,752 | $ | 224,229 | $ | 272,090 | |||||||||
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Gross
margin comprised of:
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TCM
Division
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$ | 22,319 | $ | 23,465 | $ | 38,800 | $ | 43,534 | ||||||||
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TMS
Division
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17,129 | 26,620 | 30,082 | 45,660 | ||||||||||||
| $ | 39,448 | $ | 50,085 | $ | 68,882 | $ | 89,194 | |||||||||
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Operating
income comprised of:
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Industrial
services
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$ | 16,162 | $ | 23,003 | $ | 24,489 | $ | 37,568 | ||||||||
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Earnings
from unconsolidated affiliates
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232 | 411 | 491 | 675 | ||||||||||||
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Non-routine
investigation costs
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(1,204 | ) | - | (2,306 | ) | - | ||||||||||
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Corporate
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(4,913 | ) | (5,050 | ) | (9,733 | ) | (10,164 | ) | ||||||||
| $ | 10,277 | $ | 18,364 | $ | 12,941 | $ | 28,079 | |||||||||
TEAM,
INC. AND SUBSIDIARIES
SUMMARY
CONSOLIDATED BALANCE SHEET INFORMATION
NOVEMBER
30, 2009 AND MAY 31, 2009
(in
thousands)
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November 30,
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May 31,
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2009
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2009
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(unaudited)
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Current
assets
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$ | 150,590 | $ | 156,637 | ||||
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Property,
plant and equipment, net
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58,049 | 59,582 | ||||||
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Other
non-current assets
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62,355 | 59,702 | ||||||
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Total
assets
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$ | 270,994 | $ | 275,921 | ||||
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Current
liabilities
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$ | 38,121 | $ | 46,792 | ||||
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Long
term debt net of current maturities
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67,206 | 76,689 | ||||||
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Other
non-current liabilities
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6,725 | 5,939 | ||||||
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Stockholders'
equity
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158,942 | 146,501 | ||||||
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Total
liabilities and stockholders' equity
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$ | 270,994 | $ | 275,921 | ||||