TEAM, INC. 
By ALVIN, Texas, Jan. 5 /PRNewswire-FirstCall/ -- 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).
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"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)
Three Months Ended Six Months Ended
November 30, November 30,
------------ ------------
2009 2008 2009 2008
---- ---- ---- ----
(unaudited)(unaudited)(unaudited)(unaudited)
Revenues $123,292 $148,752 $224,229 $272,090
Operating expenses 83,844 98,667 155,347 182,896
------ ------ ------- -------
Gross margin 39,448 50,085 68,882 89,194
Selling, general and
administrative expenses 29,403 32,132 56,432 61,790
Earnings from
unconsolidated
affiliates 232 411 491 675
--- --- --- ---
Operating income 10,277 18,364 12,941 28,079
Interest expense, net 697 1,378 1,502 2,825
--- ----- ----- -----
Earnings before income taxes 9,580 16,986 11,439 25,254
Provision for income taxes 3,739 6,769 4,473 10,080
----- ----- ----- ------
Net income $5,841 $10,217 $6,966 $15,174
====== ======= ====== =======
Earnings per common
share:
Basic $0.31 $0.54 $0.37 $0.81
===== ===== ===== =====
Diluted $0.30 $0.51 $0.36 $0.76
===== ===== ===== =====
Weighted average number
of shares outstanding:
Basic 18,925 18,823 18,890 18,752
====== ====== ====== ======
Diluted 19,492 19,853 19,442 19,881
====== ====== ====== ======
Continuing operations data:
Revenues comprised of:
TCM Division $71,322 $76,126 $128,626 $141,381
TMS Division 51,970 72,626 95,603 130,709
------ ------ ------ -------
$123,292 $148,752 $224,229 $272,090
======== ======== ======== ========
Gross margin comprised of:
TCM Division $22,319 $23,465 $38,800 $43,534
TMS Division 17,129 26,620 30,082 45,660
------ ------ ------ ------
$39,448 $50,085 $68,882 $89,194
======= ======= ======= =======
Operating income comprised of:
Industrial services $16,162 $23,003 $24,489 $37,568
Earnings from
unconsolidated
affiliates 232 411 491 675
Non-routine
investigation costs (1,204) - (2,306) -
Corporate (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)
November 30, May 31,
2009 2009
---- ----
(unaudited)
Current assets $150,590 $156,637
Property, plant and equipment, net 58,049 59,582
Other non-current assets 62,355 59,702
-------- --------
Total assets $270,994 $275,921
======== ========
Current liabilities $38,121 $46,792
Long term debt net of current maturities 67,206 76,689
Other non-current liabilities 6,725 5,939
Stockholders' equity 158,942 146,501
-------- --------
Total liabilities and stockholders' equity $270,994 $275,921
======== ========
SOURCE Team, Inc.
