Exhibit 99.1
NEWS |
TEAM, INC. P. O. Box 123 Alvin, Texas 77512 | For immediate release contact: Ted W. Owen (281) 331-6154 |
TEAM, INC. REPORTS RESULTS FOR THIRD QUARTER AND REVISES FULL YEAR GUIDANCE
ALVIN, TX, March 31, 2009 — Team, Inc., (NASDAQ: TISI) today reported net income of $2.2 million ($0.11 per diluted share) for its third quarter ended February 28, 2009 compared to net income of $2.9 million ($0.15 per diluted share) for the corresponding prior year quarter. For the current quarter, revenues were $104.3 million compared to $108.8 million for the corresponding prior year quarter.
Net income for the nine months ended February 28, 2009 was $17.4 million ($0.88 per diluted share), up $3.1 million or 22% from the corresponding prior year period. Revenues for the same nine month period were $376.4 million, up $41.7 million or 12% from the prior year period.
Third Quarter Performance
As reported above, Team’s overall revenue during the quarter was $104.3 million, down 4% from the corresponding prior year period. Operating profit in the third quarter ended February 28, 2009 was $3.5 million compared to $6.5 million from the corresponding prior year period. The decrease in operating profit during the quarter was primarily due to decreased revenues across both divisions, as well as decreased job margins in the TMS division associated with the mix of projects performed by that division compared to the prior year quarter.
Due to the softening business environment, Team recently took a number of steps to reduce its overall support costs. Team eliminated approximately 60 sales and support positions from both field and corporate groups and is reducing its discretionary spending. Total savings from these actions is expected to be $6 million annually. Severance charges of $0.4 million were incurred in the third quarter in conjunction with the staffing reductions.
Third quarter results also benefited from the recognition of Federal income tax credits of $0.6 million resulting from research and development activities and human resource initiatives.
Full Year Guidance
As a result of continued weakness in customer demand, Team is reducing its revenue guidance for the current fiscal year by an additional $20 million to approximately $500 million. This implies 4th quarter revenue of approximately $120 million, down about 17% from the prior year. Reflecting this lower revenue forecast, Team now projects full year earnings to be in a range between $1.05 to $1.20 per share (on a fully diluted basis). The decrease in customer capital projects, the deferral or reduction in scope of turnaround projects this spring, and pricing pressures from customers are the primary drivers of Team’s reduced revenue expectations.
“The uncertainties facing our end markets have never been greater. However, we are reacting quickly to the rapid and evolving changes in near term demand and are focused on maintaining our overall performance and managing our business in balance with market opportunities,” said Phil Hawk, Team’s Chairman and CEO.
Earnings Conference Call
In connection with this earnings release, Team will hold its quarterly conference call on Wednesday, April 1, 2009 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 confirmation code 24211986 when prompted.
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, Aruba, Belgium, Canada, Singapore, The Netherlands, Trinidad and Venezuela. Listed as #3 on theForbesMagazine list of 200 best small companies, 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 every reasonable effort to ensure that the information, assumptions and beliefs upon which this forward-looking information is based are current, reasonable and complete. However, a variety of factors could cause actual results to differ materially from those anticipated in any forward-looking information. Those factors include domestic and international economic activity, interest rates and market conditions for the Company’s customers and their levels of capital and maintenance expenditures, compliance with regulations and changes to regulations, general liability claims and legal proceedings, competition in the marketplace, ability to hire and retain a skilled technical workforce, availability of attractive acquisitions and unforeseen integration difficulty with future acquisitions, and the Company’s successful implementation of its internal operating plans. 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 | Nine Months Ended | |||||||||||
February 28, 2009 | February 29, 2008 | February 28, 2009 | February 29, 2008 | |||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||
Revenues | $ | 104,266 | $ | 108,823 | $ | 376,356 | $ | 334,621 | ||||
Operating expenses | 74,312 | 75,200 | 257,208 | 226,837 | ||||||||
Gross margin | 29,954 | 33,623 | 119,148 | 107,784 | ||||||||
Selling, general and administrative expenses | 26,643 | 27,118 | 88,433 | 78,955 | ||||||||
Earnings from unconsolidated affiliates | 159 | — | 834 | — | ||||||||
Operating income | 3,470 | 6,505 | 31,549 | 28,829 | ||||||||
Interest expense, net | 1,141 | 1,618 | 3,966 | 5,085 | ||||||||
Earnings before income taxes | 2,329 | 4,887 | 27,583 | 23,744 | ||||||||
Provision for income taxes | 148 | 1,953 | 10,228 | 9,482 | ||||||||
Net income | $ | 2,181 | $ | 2,934 | $ | 17,355 | $ | 14,262 | ||||
Earnings per common share: | ||||||||||||
Basic | $ | 0.12 | $ | 0.16 | $ | 0.92 | $ | 0.79 | ||||
Diluted | $ | 0.11 | $ | 0.15 | $ | 0.88 | $ | 0.73 | ||||
Weighted average number of shares outstanding: | ||||||||||||
Basic | 18,833 | 18,339 | 18,778 | 18,138 | ||||||||
Diluted | 19,637 | 19,816 | 19,821 | 19,649 | ||||||||
Continuing operations data: | ||||||||||||
Revenues comprised of: | ||||||||||||
TCM Division | $ | 56,144 | $ | 59,110 | $ | 197,525 | $ | 192,305 | ||||
TMS Division | 48,122 | 49,713 | 178,831 | 142,316 | ||||||||
$ | 104,266 | $ | 108,823 | $ | 376,356 | $ | 334,621 | |||||
Gross margin comprised of: | ||||||||||||
TCM Division | $ | 14,608 | $ | 15,838 | $ | 58,141 | $ | 56,232 | ||||
TMS Division | 15,346 | 17,785 | 61,007 | 51,552 | ||||||||
$ | 29,954 | $ | 33,623 | $ | 119,148 | $ | 107,784 | |||||
SG&A expenses: | ||||||||||||
Field operations | $ | 21,443 | $ | 22,492 | $ | 73,070 | $ | 66,586 | ||||
Corporate costs | 5,200 | 4,626 | 15,363 | 12,369 | ||||||||
Total SG&A | 26,643 | 27,118 | 88,433 | 78,955 | ||||||||
Earnings from unconsolidated affiliates | 159 | — | 834 | — | ||||||||
Operating income | $ | 3,470 | $ | 6,505 | $ | 31,549 | $ | 28,829 | ||||
TEAM, INC. AND SUBSIDIARIES
SUMMARY CONSOLIDATED BALANCE SHEET INFORMATION
FEBRUARY 28, 2009 AND MAY 31, 2008
(in thousands)
February 28, 2009 | May 31, 2008 | |||||
(unaudited) | ||||||
Current assets | $ | 150,316 | $ | 158,214 | ||
Property, plant and equipment, net | 58,300 | 56,138 | ||||
Other non-current assets | 55,665 | 66,109 | ||||
Total assets | $ | 264,281 | $ | 280,461 | ||
Current liabilities | $ | 47,505 | $ | 56,744 | ||
Long term debt net of current maturities | 81,301 | 96,818 | ||||
Other non-current liabilities | 2,164 | 6,137 | ||||
Stockholders’ equity | 133,311 | 120,762 | ||||
Total liabilities and stockholders’ equity | $ | 264,281 | $ | 280,461 | ||