Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Feb. 28, 2014 | Apr. 01, 2014 | |
Document Information [Line Items] | ' | ' |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 28-Feb-14 | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Trading Symbol | 'TISI | ' |
Entity Registrant Name | 'TEAM INC | ' |
Entity Central Index Key | '0000318833 | ' |
Current Fiscal Year End Date | '--05-31 | ' |
Entity Filer Category | 'Accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 20,444,701 |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Feb. 28, 2014 | 31-May-13 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $39,501 | $34,201 |
Receivables, net of allowance of $5,343 and $5,438 | 157,988 | 172,108 |
Inventory | 26,304 | 26,507 |
Deferred income taxes | 4,474 | 5,321 |
Prepaid expenses and other current assets | 7,133 | 8,781 |
Total current assets | 235,400 | 246,918 |
Property, plant and equipment, net | 85,392 | 74,939 |
Assets held for sale | 5,207 | 5,207 |
Intangible assets, net of accumulated amortization of $11,715 and $9,039 | 24,390 | 25,950 |
Goodwill | 114,114 | 103,466 |
Other assets, net | 974 | 2,907 |
Deferred income taxes | 2,020 | 816 |
Total assets | 467,497 | 460,203 |
Current liabilities: | ' | ' |
Accounts payable | 20,419 | 22,411 |
Other accrued liabilities | 39,260 | 49,165 |
Income taxes payable | 516 | 1,228 |
Deferred income taxes | 411 | ' |
Total current liabilities | 60,606 | 72,804 |
Deferred income taxes | 15,408 | 17,166 |
Long-term debt | 83,602 | 72,946 |
Other long-term liabilities | 5,389 | 5,097 |
Total liabilities | 165,005 | 168,013 |
Commitments and contingencies | ' | ' |
Equity: | ' | ' |
Preferred stock, 500,000 shares authorized, none issued | ' | ' |
Common stock, par value $0.30 per share, 60,000,000 and 30,000,000 shares authorized; 20,439,476 and 20,587,808 shares issued | 6,132 | 6,176 |
Additional paid-in capital | 104,322 | 99,278 |
Retained earnings | 190,102 | 184,485 |
Accumulated other comprehensive loss | -3,621 | -1,789 |
Treasury stock at cost, 0 and 89,569 shares | ' | -1,344 |
Total Team shareholders' equity | 296,935 | 286,806 |
Non-controlling interest | 5,557 | 5,384 |
Total equity | 302,492 | 292,190 |
Total liabilities and equity | $467,497 | $460,203 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Parenthetical) (USD $) | Feb. 28, 2014 | 31-May-13 |
In Thousands, except Share data, unless otherwise specified | ||
Receivables, allowance | $5,343 | $5,438 |
Intangible assets, accumulated amortization | $11,715 | $9,039 |
Preferred stock, shares authorized | 500,000 | 500,000 |
Preferred stock, shares issued | ' | ' |
Common stock, par value | $0.30 | $0.30 |
Common stock, shares authorized | 60,000,000 | 30,000,000 |
Common stock, shares issued | 20,439,476 | 20,587,808 |
Treasury stock at cost, shares | 0 | 89,569 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Feb. 28, 2014 | Feb. 28, 2013 | Feb. 28, 2014 | Feb. 28, 2013 |
Revenues | $163,236 | $150,975 | $538,040 | $513,115 |
Operating expenses | 121,540 | 112,084 | 382,532 | 362,224 |
Gross margin | 41,696 | 38,891 | 155,508 | 150,891 |
Selling, general and administrative expenses | 40,725 | 38,278 | 125,482 | 115,280 |
Earnings (loss) from unconsolidated affiliates | 29 | -4 | 822 | 862 |
Gain on revaluation of contingent consideration | ' | ' | 2,138 | ' |
Operating income | 1,000 | 609 | 32,986 | 36,473 |
Interest expense, net | 660 | 743 | 2,079 | 2,019 |
Foreign currency loss | 1,868 | 729 | 2,398 | 917 |
Earnings (loss) before income taxes | -1,528 | -863 | 28,509 | 33,537 |
Less: Provision for income taxes | -557 | -319 | 10,406 | 12,409 |
Net income (loss) | -971 | -544 | 18,103 | 21,128 |
Less: Income (loss) attributable to non-controlling interest | 39 | -9 | 178 | 166 |
Net income (loss) available to Team shareholders | ($1,010) | ($535) | $17,925 | $20,962 |
Net income (loss) per share: Basic | ($0.05) | ($0.03) | $0.88 | $1.04 |
Net income (loss) per share: Diluted | ($0.05) | ($0.03) | $0.84 | $0.99 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Comprehensive Income (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Feb. 28, 2014 | Feb. 28, 2013 | Feb. 28, 2014 | Feb. 28, 2013 |
Net income (loss) | ($971) | ($544) | $18,103 | $21,128 |
Foreign currency translation adjustment | -2,715 | -1,985 | -2,925 | 2,305 |
Foreign currency hedge | -94 | -143 | -856 | -791 |
Tax benefit attributable to other comprehensive income | 1,111 | 594 | 1,944 | 218 |
Total comprehensive income (loss) | -2,669 | -2,078 | 16,266 | 22,860 |
Less: Total comprehensive income (loss) attributable to non-controlling interest | 42 | -14 | 173 | 189 |
Total comprehensive income (loss) available to Team shareholders | ($2,711) | ($2,064) | $16,093 | $22,671 |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statements of Cash Flows (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Feb. 28, 2014 | Feb. 28, 2013 |
Cash flows from operating activities: | ' | ' |
Net income | $18,103 | $21,128 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' |
Earnings from unconsolidated affiliates | -822 | -862 |
Depreciation and amortization | 15,976 | 14,454 |
Amortization of deferred loan costs | 167 | 167 |
Foreign currency loss | 2,398 | 917 |
Deferred income taxes | 192 | 5,475 |
Gain on contingent consideration revaluation | -2,138 | ' |
Write-down on fixed assets | ' | 73 |
Gain on asset sale | -77 | ' |
Non-cash compensation cost | 3,205 | 3,022 |
(Increase) decrease: | ' | ' |
Receivables | 13,431 | 6,675 |
Inventory | 75 | -1,675 |
Prepaid expenses and other current assets | 1,577 | 2,596 |
Increase (decrease): | ' | ' |
Accounts payable | -1,598 | -3,528 |
Other accrued liabilities | -10,505 | -2,796 |
Income taxes | -469 | -7,430 |
Net cash provided by operating activities | 39,515 | 38,216 |
Cash flows from investing activities: | ' | ' |
Capital expenditures | -23,758 | -18,803 |
Business acquisitions, net of cash acquired | -10,175 | -18,589 |
Proceeds from sale of assets | 204 | 15 |
Distributions from joint venture | 174 | 1,000 |
Decrease in other assets, net | 3 | 55 |
Net cash used in investing activities | -33,552 | -36,322 |
Cash flows from financing activities: | ' | ' |
Net borrowings under revolving credit agreement | 9,800 | 2,400 |
Corporate tax effect from share-based payment arrangements | 1,092 | 3,002 |
Issuance of common stock from share-based payment arrangements | 4,765 | 8,242 |
Payments related to withholding tax for share-based payment arrangements | -1,692 | -1,517 |
Payments related to purchase of treasury stock | -13,334 | ' |
Net cash provided by financing activities | 631 | 12,127 |
Effect of exchange rate changes on cash | -1,294 | -76 |
Net increase in cash and cash equivalents | 5,300 | 13,945 |
Cash and cash equivalents at beginning of period | 34,201 | 22,477 |
Cash and cash equivalents at end of period | $39,501 | $36,422 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES | 9 Months Ended | ||||||||||||||||
Feb. 28, 2014 | |||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES | ' | ||||||||||||||||
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES | |||||||||||||||||
Introduction. Unless otherwise indicated, the terms “Team, Inc.,” “Team,” “the Company,” “we,” “our” and “us” are used in this report to refer to Team, Inc., to one or more of our consolidated subsidiaries or to all of them taken as a whole. We are incorporated in the State of Delaware and our company website can be found at www.teamindustrialservices.com. Our corporate headquarters is located at 13131 Dairy Ashford, Suite 600, Sugar Land, Texas, 77478 and our telephone number is (281) 331-6154. Our stock is traded on the New York Stock Exchange (“NYSE”) under the symbol “TISI” and our fiscal year ends on May 31 of each calendar year. | |||||||||||||||||
We are a leading provider of specialty industrial services, including inspection and assessment, required in maintaining high temperature and high pressure piping systems and vessels that are utilized extensively in the refining, petrochemical, power, pipeline and other heavy industries. Through fiscal year 2013, we operated in only one segment—the industrial services segment (see Note 14). Within the industrial services segment, we were organized as two divisions. Our TCM division provided the services of inspection and assessment and field heat treating. Our TMS division provided the mechanical services described below. | |||||||||||||||||
Effective July 1, 2013, we implemented a reorganization of our business divisions to conduct operations in three segments: Inspection and Heat Treating Services (“IHT”) Group, Mechanical Services (“MS”) Group and Quest Integrity (“Quest”) Group. While our services have been realigned in three business groups, we believe our services broadly fall into three different classifications that have unique customer demand drivers: inspection and assessment services, turnaround services, and on-stream services. | |||||||||||||||||
Inspection and assessment services are offered in both the IHT Group and Quest Group. The IHT Group provides basic and advanced non-destructive testing services for the process, pipeline and power sectors, pipeline integrity management services, as well as associated engineering and assessment services. These services can be offered while facilities are running (on-stream), during facility turnarounds or during new construction or expansion activities. The Quest Group provides integrity and reliability management solutions for the process, pipeline and power sectors. These solutions encompass two broadly-defined disciplines: (1) highly specialized in-line inspection services for unpiggable process piping and pipelines using proprietary in-line inspection tools and analytical software; and (2) advanced condition assessment services through a multi-disciplined engineering team. We believe there is a general growth in market demand for inspection and assessment services as improved inspection technologies enable better information about asset reliability to be available to facility owners and operators. | |||||||||||||||||
Turnaround services are offered in both the IHT Group and in the MS Group. These services are project-related and demand is a function of the number and scope of scheduled and unscheduled facility turnarounds as well as new industrial facility construction or expansion. Turnaround services include the field machining, technical bolting, field valve repair, heat exchanger repair, and isolation test plugging services that are part of the MS Group and the field heat treating services that are part of the IHT Group. | |||||||||||||||||
On-stream services are offered by the MS Group and represent the services offered while plants are operating and under pressure. These services include leak repair, fugitive emissions control and hot tapping. We believe demand for on-stream services is a function of the population of the existing infrastructure of operating industrial facilities. | |||||||||||||||||
We offer these services in over 125 locations throughout the world. Our industrial services are available 24 hours a day, 7 days a week, 365 days a year. We market our services to companies in a diverse array of heavy industries which include the petrochemical, refining, power, pipeline, steel, pulp and paper industries, as well as municipalities, shipbuilding, original equipment manufacturers (“OEMs”), distributors, and some of the world’s largest engineering and construction firms. Our services are also provided across a broad geographic reach. | |||||||||||||||||
Basis for presentation. These interim financial statements are unaudited, but in the opinion of our management, reflect all adjustments, consisting of normal recurring adjustments necessary for a fair presentation of results for such periods. The consolidated condensed balance sheet at May 31, 2013 is derived from the May 31, 2013 audited consolidated financial statements. The results of operations for any interim period are not necessarily indicative of results for the full year. These financial statements should be read in conjunction with the financial statements and notes thereto contained in our annual report on Form 10-K for the fiscal year ended May 31, 2013. | |||||||||||||||||
Consolidation. The consolidated financial statements include the accounts of Team, Inc. and our majority-owned subsidiaries where we have control over operating and financial policies. Investments in affiliates in which we have the ability to exert significant influence over operating and financial policies, but where we do not control the operating and financial policies, are accounted for using the equity method. All material intercompany accounts and transactions have been eliminated in consolidation. | |||||||||||||||||
Use of estimates. Our accounting policies conform to Generally Accepted Accounting Principles in the U.S. (“GAAP”). Our most significant accounting policies are described below. The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and judgments that affect our reported financial position and results of operations. We review significant estimates and judgments affecting our consolidated financial statements on a recurring basis and record the effect of any necessary adjustments prior to their publication. Estimates and judgments are based on information available at the time such estimates and judgments are made. Adjustments made with respect to the use of these estimates and judgments often relate to information not previously available. Uncertainties with respect to such estimates and judgments are inherent in the preparation of financial statements. Estimates and judgments are used in, among other things, (1) aspects of revenue recognition, (2) valuation of tangible and intangible assets and subsequent assessments for possible impairment, (3) the fair value of the non-controlling interest in subsidiaries that are not wholly-owned, (4) estimating various factors used to accrue liabilities for workers’ compensation, auto, medical and general liability, (5) establishing an allowance for uncollectible accounts receivable, (6) estimating the useful lives of our assets and (7) assessing future tax exposure and the realization of tax assets. | |||||||||||||||||
Fair value of financial instruments. Our financial instruments consist primarily of cash, cash equivalents, accounts receivable, accounts payable and debt obligations. The carrying amount of cash, cash equivalents, trade accounts receivable and trade accounts payable are representative of their respective fair values due to the short-term maturity of these instruments. The fair value of our banking facility is representative of the carrying value based upon the variable terms and management’s opinion that the current rates available to us with the same maturity and security structure are equivalent to that of the banking facility. | |||||||||||||||||
Cash and cash equivalents. Cash and cash equivalents consist of all demand deposits and funds invested in highly liquid short-term investments with original maturities of three months or less. | |||||||||||||||||
Inventory. Inventory is stated at the lower of cost (first-in, first-out method) or market. Inventory includes material, labor and certain fixed overhead costs. | |||||||||||||||||
Property, plant and equipment. Property, plant and equipment are stated at cost less accumulated depreciation and amortization. Leasehold improvements are amortized over the shorter of their respective useful life or the lease term. Depreciation and amortization of assets are computed by the straight-line method over the following estimated useful lives of the assets: | |||||||||||||||||
Classification | Useful Life | ||||||||||||||||
Buildings | 20-40 years | ||||||||||||||||
Leasehold improvements | 2-15 years | ||||||||||||||||
Machinery and equipment | 2-12 years | ||||||||||||||||
Furniture and fixtures | 2-10 years | ||||||||||||||||
Computers and computer software | 2-5 years | ||||||||||||||||
Automobiles | 2-5 years | ||||||||||||||||
Goodwill, intangible assets, and non-controlling interest. Goodwill represents the excess of costs over fair value of assets of businesses acquired. Goodwill and intangible assets acquired in a purchase business combination and determined to have an indefinite useful life are not amortized, but are instead tested for impairment at least annually in accordance with the provisions of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 350, Intangibles—Goodwill and Other. Intangible assets with estimated useful lives are amortized over their respective estimated useful lives to their estimated residual values and reviewed for impairment in accordance with ASC 350. | |||||||||||||||||
Effective July 1, 2013, we implemented a reorganization of our business divisions and now conduct operations in three segments: IHT Group, MS Group and Quest Group. Each operating segment has goodwill relating to past acquisitions and we now assess goodwill for impairment at the operating segment level. Due to the changes in the underlying assumptions surrounding our goodwill testing, during the first quarter of fiscal year 2014, we performed a quantitative analysis of goodwill to test for impairment. The test for impairment is performed at the reporting unit level which is deemed to be at the operating segment level. The test was a two-step process that involved comparing the estimated fair value of each reporting unit to the reporting unit’s carrying value, including goodwill. If the fair value of a reporting unit exceeded its carrying amount, the goodwill of the reporting unit was not considered impaired; therefore, the second step of the impairment test would not be deemed necessary. If the carrying amount of the reporting unit exceeded its fair value, we would then perform a second step to the goodwill impairment test to measure the amount of goodwill impairment loss to be recorded. | |||||||||||||||||
The fair value of the reporting units at July 1, 2013 were determined using a method based on discounted cash flow models with estimated cash flows based on internal forecasts of revenue and expenses over a four year period plus a terminal value period (the income approach). The income approach estimated fair value by discounting each reporting unit’s estimated future cash flows using a discount rate that approximated our weighted-average cost of capital. The fair value derived from the income approach, in the aggregate, approximated our market capitalization. At July 1, 2013, our market capitalization exceeded the carrying value of our consolidated net assets by approximately $500 million or 170%, and the fair value of each operating segment significantly exceeded their respective carrying amounts as of that date. | |||||||||||||||||
There was $114.1 million and $103.5 million of goodwill at February 28, 2014 and May 31, 2013, respectively. A summary of goodwill is as follows (in thousands): | |||||||||||||||||
Nine Months Ended | |||||||||||||||||
28-Feb-14 | |||||||||||||||||
MS | IHT | Quest | Total | ||||||||||||||
Balance at May 31, 2013 | $ | 19,130 | $ | 53,800 | $ | 30,536 | $ | 103,466 | |||||||||
Acquisitions | — | 11,336 | — | 11,336 | |||||||||||||
Foreign currency adjustments | 611 | (1,448 | ) | 149 | (688 | ) | |||||||||||
Balance at February 28, 2014 | $ | 19,741 | $ | 63,688 | $ | 30,685 | $ | 114,114 | |||||||||
In November 2010, we purchased 95% of Quest Integrity Group, LLC, a leading provider of proprietary in-line inspection and advanced engineering and assessment services. We expect to purchase the remaining 5% interest (the “Non-Controlling Interests”) at the end of fiscal 2015 based upon a valuation methodology as specified in the purchase agreement. | |||||||||||||||||
Information regarding the change in carrying value of the non-controlling interest is set forth below (in thousands): | |||||||||||||||||
Fair value of non-controlling interest at November 3, 2010 | $ | 4,917 | |||||||||||||||
Income attributable to non-controlling interest | 652 | ||||||||||||||||
Other comprehensive income attributable to non-controlling interest | (12 | ) | |||||||||||||||
Carrying value of non-controlling interest at February 28, 2014 | $ | 5,557 | |||||||||||||||
Income taxes. We follow the guidance of the ASC 740, Income Taxes, which requires that we use the asset and liability method of accounting for deferred income taxes and provide deferred income taxes for all significant temporary differences. As part of the process of preparing our consolidated financial statements, we are required to estimate our income taxes in each of the jurisdictions in which we operate. This process involves estimating our actual current tax payable and related tax expense together with assessing temporary differences resulting from differing treatment of certain items, such as depreciation, for tax and accounting purposes. These differences can result in deferred tax assets and liabilities, which are included within our consolidated balance sheets. We must then assess the likelihood that our deferred tax assets will be recovered from future taxable income and, to the extent we believe that it is more likely than not (a likelihood of more than 50%) that some portion or all of the deferred tax assets will not be realized, we must establish a valuation allowance. We consider all available evidence to determine whether, based on the weight of the evidence, a valuation allowance is needed. Evidence used includes information about our current financial position and our results of operations for the current and preceding years, as well as all currently available information about future years, including our anticipated future performance, future reversals of existing taxable temporary differences, and tax planning strategies. | |||||||||||||||||
Workers’ compensation, auto, medical and general liability accruals. In accordance with ASC 450, Contingencies, we record a loss contingency when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. We review our loss contingencies on an ongoing basis to ensure that we have appropriate reserves recorded on our balance sheet. These reserves are based on historical experience with claims incurred but not received, estimates and judgments made by management, applicable insurance coverage for litigation matters, and are adjusted as circumstances warrant. For workers’ compensation, our self-insured retention is $1.0 million and our automobile liability self-insured retention is currently $500,000 per occurrence. For general liability claims we have an effective self-insured retention of $3.0 million per occurrence. For medical claims, our self-insured retention is $175,000 per individual claimant determined on an annual basis. For environmental liability claims, our self-insured retention is $500,000 per occurrence. We maintain insurance for claims that exceed such self-retention limits. The insurance is subject to terms, conditions, limitations and exclusions that may not fully compensate us for all losses. Our estimates and judgments could change based on new information, changes in laws or regulations, changes in management’s plans or intentions, or the outcome of legal proceedings, settlements or other factors. If different estimates and judgments were applied with respect to these matters, it is likely that reserves would be recorded for different amounts. | |||||||||||||||||
Revenue recognition. We determine our revenue recognition guidelines for our operations based on guidance provided in applicable accounting standards and positions adopted by the FASB and the Securities and Exchange Commission (the “SEC”). Most of our projects are short-term in nature and we predominantly derive revenues by providing a variety of industrial services on a time and material basis. For all of these services our revenues are recognized when services are rendered or when product is shipped to the job site and risk of ownership passes to the customer. However, due to various contractual terms with our customers, at the end of any reporting period, there may be earned but unbilled revenue that is accrued to properly match revenues with related costs. At February 28, 2014 and May 31, 2013, the amount of earned but unbilled revenue included in accounts receivable was $28.2 million and $25.5 million, respectively. | |||||||||||||||||
Allowance for doubtful accounts. In the ordinary course of business, a percentage of our accounts receivable are not collected due to billing disputes, customer bankruptcies, dissatisfaction with the services we performed and other various reasons. We establish an allowance to account for those accounts receivable that will eventually be deemed uncollectible. The allowance for doubtful accounts is based on a combination of our historical experience and management’s review of long outstanding accounts receivable. | |||||||||||||||||
Concentration of credit risk. No single customer accounts for more than 10% of consolidated revenues. | |||||||||||||||||
Earnings per share. Basic earnings per share is computed by dividing net income available to Team shareholders by the weighted-average number of shares of common stock outstanding during the year. Diluted earnings per share is computed by dividing net income available to Team shareholders, less income or loss for the period attributable to the non-controlling interest, by the sum of (1) the weighted-average number of shares of common stock, outstanding during the period, (2) the dilutive effect of the assumed exercise of share-based compensation using the treasury stock method and (3) the dilutive effect of the assumed conversion of our non-controlling interest to our common stock (see Note 2). | |||||||||||||||||
Amounts used in basic and diluted earnings per share, for the three and nine months ended February 28, 2014 and 2013, are as follows (in thousands): | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
February 28, | February 28, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||||||||||
Weighted-average number of basic shares outstanding | 20,384 | 20,387 | 20,432 | 20,104 | |||||||||||||
Stock options, stock units and performance awards | 614 | 753 | 643 | 770 | |||||||||||||
Assumed conversion of non-controlling interest | 195 | 171 | 209 | 204 | |||||||||||||
Total shares and dilutive securities | 21,193 | 21,311 | 21,284 | 21,078 | |||||||||||||
There were no stock options outstanding during the three months ended February 28, 2014 and 2013 excluded from the computation of diluted earnings per share because the options’ exercise prices were greater than the average market price of common shares during the periods. There were zero and 1,000 stock options to purchase shares of common stock outstanding during the nine months ended February 28, 2014 and 2013, respectively, excluded from the computation of diluted earnings per share because the options’ exercise prices were greater than the average market price of common shares during the periods. | |||||||||||||||||
Foreign currency. For subsidiaries whose functional currency is not the U.S. Dollar, assets and liabilities are translated at period ending rates of exchange and revenues and expenses are translated at period average exchange rates. Translation adjustments for the asset and liability accounts are included as a separate component of accumulated other comprehensive income in shareholders’ equity. Foreign currency transaction gains and losses are included in our statement of income. Effective December 1, 2009, we began to account for Venezuela as a highly-inflationary economy and the effect of all subsequent currency fluctuations between the Bolivar and the U.S. Dollar are recorded in our statement of income (see Note 16). | |||||||||||||||||
Newly Adopted Accounting Principles | |||||||||||||||||
ASU 2011-04. In May 2011, an update regarding fair value measurement was issued to conform the definition of fair value and common requirements for measurement of and disclosure about fair value under U.S. GAAP and International Financial Reporting Standards. The standard also clarifies the application of existing fair value measurement requirements and expands the disclosure requirements for fair value measurements that are estimated using significant unobservable Level 3 inputs. The standard update is effective for interim and annual periods beginning after December 15, 2011. The adoption of this standard did not have a material impact on our results of operations, financial position or cash flows. | |||||||||||||||||
ASU 2011-05. In June 2011, the FASB issued an update to existing guidance on the presentation of comprehensive income. This update requires the presentation of the components of net income and other comprehensive income either in a single continuous statement or in two separate but consecutive statements. In addition, companies are also required to present reclassification adjustments for items that are reclassified from other comprehensive income to net income on the face of the financial statements. In December 2011, the FASB issued an accounting update to defer the effective date for presentation of reclassification of items out of accumulated other comprehensive income to net income. These updates are effective for fiscal years and interim periods beginning after December 15, 2011 with early adoption permitted. This update was adopted by Team on June 1, 2012. The adoption of this standard did not have a material effect on our results of operations, financial position or cash flows. | |||||||||||||||||
ASU 2011-11. In December 2011, an update was issued related to new disclosures on offsetting assets and liabilities of financial and derivative instruments. The amendments require the disclosure of gross asset and liability amounts, amounts offset on the balance sheet and amounts subject to the offsetting requirements, but not offset on the balance sheet. This standard does not amend the existing guidance on when it is appropriate to offset. The standard update is effective for annual periods beginning after January 1, 2013. The adoption of this standard did not have a material impact on our results of operations, financial position or cash flows. | |||||||||||||||||
ASU 2013-02. In February 2013, an update regarding other comprehensive income was issued to require entities to provide information about the amounts reclassified out of accumulated other comprehensive income by component. In addition, it requires entities to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of other comprehensive income by the respective line items of net income but only if the amount reclassified is required under GAAP to be reclassified to net income in its entirety in the same reporting period. The update is effective for fiscal years beginning after December 15, 2012. This update was adopted by Team on June 1, 2013. The adoption of this update did not have a material impact on our results of operations, financial position or cash flows. |
ACQUISITIONS
ACQUISITIONS | 9 Months Ended |
Feb. 28, 2014 | |
ACQUISITIONS | ' |
2. ACQUISITIONS | |
In July 2013, we purchased a leading provider of industrial rope access services, for a total consideration of approximately $13.8 million including $12.6 million allocated to goodwill and intangible assets. In September 2012, we purchased TCI Services, Inc. (“TCI”), a leading provider of inspection and repair services of above ground storage tanks. The TCI acquisition included total consideration of approximately $21.2 million, including $16.4 million allocated to goodwill and intangible assets. The purchase price included contingent consideration which we revalued during the second quarter of fiscal year 2014, resulting in the recognition of a non-cash gain of $2.1 million. | |
In the fiscal year ended May 31, 2013, we also purchased a specialty remote digital video inspection company in New Zealand for approximately $3.0 million in cash. |
RECEIVABLES
RECEIVABLES | 9 Months Ended | ||||||||
Feb. 28, 2014 | |||||||||
RECEIVABLES | ' | ||||||||
3. RECEIVABLES | |||||||||
A summary of accounts receivable as of February 28, 2014 and May 31, 2013 is as follows (in thousands): | |||||||||
February 28, 2014 | May 31, 2013 | ||||||||
(unaudited) | |||||||||
Trade accounts receivable | $ | 135,145 | $ | 152,030 | |||||
Unbilled revenues | 28,186 | 25,516 | |||||||
Allowance for doubtful accounts | (5,343 | ) | (5,438 | ) | |||||
Total | $ | 157,988 | $ | 172,108 | |||||
INVENTORY
INVENTORY | 9 Months Ended | ||||||||
Feb. 28, 2014 | |||||||||
INVENTORY | ' | ||||||||
4. INVENTORY | |||||||||
A summary of inventory as of February 28, 2014 and May 31, 2013 is as follows (in thousands): | |||||||||
February 28, 2014 | May 31, 2013 | ||||||||
(unaudited) | |||||||||
Raw materials | $ | 3,056 | $ | 3,460 | |||||
Work in progress | 893 | 845 | |||||||
Finished goods | 22,355 | 22,202 | |||||||
Total | $ | 26,304 | $ | 26,507 | |||||
PROPERTY_PLANT_AND_EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT | 9 Months Ended | ||||||||
Feb. 28, 2014 | |||||||||
PROPERTY, PLANT AND EQUIPMENT | ' | ||||||||
5. PROPERTY, PLANT AND EQUIPMENT | |||||||||
A summary of property, plant and equipment as of February 28, 2014 and May 31, 2013 is as follows (in thousands): | |||||||||
February 28, 2014 | May 31, 2013 | ||||||||
(unaudited) | |||||||||
Land | $ | 3,067 | $ | 3,108 | |||||
Buildings and leasehold improvements | 19,345 | 18,445 | |||||||
Machinery and equipment | 148,120 | 137,439 | |||||||
Furniture and fixtures | 4,809 | 4,469 | |||||||
Capitalized ERP system development costs | 2,677 | — | |||||||
Computers and computer software | 9,581 | 8,871 | |||||||
Automobiles | 3,660 | 3,842 | |||||||
Construction in progress | 11,196 | 3,816 | |||||||
Total | 202,455 | 179,990 | |||||||
Accumulated depreciation and amortization | (117,063 | ) | (105,051 | ) | |||||
Property, plant, and equipment, net | $ | 85,392 | $ | 74,939 | |||||
In the second quarter of 2013, we initiated the design and implementation of a new ERP system, which is expected to be fully installed during fiscal year 2016. Total future capital costs associated with the implementation are expected to be in the range of $10 to $12 million over the next two years. | |||||||||
Included in construction in progress are costs of approximately $7.4 million associated with the re-development of Team’s former headquarters in Alvin, Texas as an equipment, training and technical center for operations support. The Alvin project is expected to be completed in the spring of 2014 at a total cost of approximately $9.0 million. |
ASSETS_HELD_FOR_SALE
ASSETS HELD FOR SALE | 9 Months Ended |
Feb. 28, 2014 | |
ASSETS HELD FOR SALE | ' |
6. ASSETS HELD FOR SALE | |
Assets held for sale consists of $5.2 million related to approximately 50 acres of undeveloped land in Pearland, Texas. |
INTANGIBLE_ASSETS
INTANGIBLE ASSETS | 9 Months Ended | ||||||||||||||||||||||||
Feb. 28, 2014 | |||||||||||||||||||||||||
INTANGIBLE ASSETS | ' | ||||||||||||||||||||||||
7. INTANGIBLE ASSETS | |||||||||||||||||||||||||
A summary of intangible assets as of February 28, 2014 and May 31, 2013 is as follows (in thousands): | |||||||||||||||||||||||||
February 28, 2014 | May 31, 2013 | ||||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||||
Gross | Accumulated | Net | Gross | Accumulated | Net | ||||||||||||||||||||
Carrying | Amortization | Carrying | Carrying | Amortization | Carrying | ||||||||||||||||||||
Amount | Amount | Amount | Amount | ||||||||||||||||||||||
Customer relationships | $ | 22,355 | $ | (6,059 | ) | $ | 16,296 | $ | 21,418 | $ | (4,168 | ) | $ | 17,250 | |||||||||||
Non-compete agreements | 3,630 | (3,352 | ) | 278 | 3,701 | (3,232 | ) | 469 | |||||||||||||||||
Trade names | 4,325 | (641 | ) | 3,684 | 4,075 | (424 | ) | 3,651 | |||||||||||||||||
Technology | 5,112 | (1,565 | ) | 3,547 | 5,112 | (1,166 | ) | 3,946 | |||||||||||||||||
Licenses | 683 | (98 | ) | 585 | 683 | (49 | ) | 634 | |||||||||||||||||
Total | $ | 36,105 | $ | (11,715 | ) | $ | 24,390 | $ | 34,989 | $ | (9,039 | ) | $ | 25,950 | |||||||||||
Amortization expense for the three months ended February 28, 2014 and 2013 was $0.9 million and $0.8 million, respectively. Amortization expense for the nine months ended February 28, 2014 and 2013 was $2.8 million and $2.5 million, respectively. |
OTHER_ACCRUED_LIABILITIES
OTHER ACCRUED LIABILITIES | 9 Months Ended | ||||||||
Feb. 28, 2014 | |||||||||
OTHER ACCRUED LIABILITIES | ' | ||||||||
8. OTHER ACCRUED LIABILITIES | |||||||||
A summary of other accrued liabilities as of February 28, 2014 and May 31, 2013 is as follows (in thousands): | |||||||||
February 28, 2014 | May 31, 2013 | ||||||||
(unaudited) | |||||||||
Payroll and other compensation expenses | $ | 22,806 | $ | 32,093 | |||||
Insurance accruals | 5,330 | 5,385 | |||||||
Property, sales and other non-income related taxes | 1,650 | 2,385 | |||||||
Other | 9,474 | 9,302 | |||||||
Total | $ | 39,260 | $ | 49,165 | |||||
LONGTERM_DEBT_DERIVATIVES_AND_
LONG-TERM DEBT, DERIVATIVES AND LETTERS OF CREDIT | 9 Months Ended | ||||||||||||||||||||||||||||||||
Feb. 28, 2014 | |||||||||||||||||||||||||||||||||
LONG-TERM DEBT, DERIVATIVES AND LETTERS OF CREDIT | ' | ||||||||||||||||||||||||||||||||
9. LONG-TERM DEBT, DERIVATIVES AND LETTERS OF CREDIT | |||||||||||||||||||||||||||||||||
Our banking credit facility (“Credit Facility”) with our banking syndicate has borrowing capacity of up to $150 million in multiple currencies, is secured by virtually all of our domestic assets and a majority of the stock of our foreign subsidiaries and matures in July 2016. In connection with a prior renewal of the Credit Facility, we are amortizing $0.8 million of associated debt issuance costs over the life of the Credit Facility. The Credit Facility bears interest based on a variable Eurodollar rate option (LIBOR plus 1.75% margin at February 28, 2014) and has commitment fees of 0.30% on unused borrowing capacity. | |||||||||||||||||||||||||||||||||
In order to secure our casualty insurance programs we are required to post letters of credit generally issued by a bank as collateral. A letter of credit commits the issuer to remit specified amounts to the holder, if the holder demonstrates that we failed to meet our obligations under the letter of credit. If this were to occur, we would be obligated to reimburse the issuer for any payments the issuer was required to remit to the holder of the letter of credit. We were contingently liable for outstanding stand-by letters of credit totaling $13.6 million at February 28, 2014 and $13.1 million at May 31, 2013. Outstanding letters of credit reduce amounts available under our Credit Facility and are considered as having been funded for purposes of calculating our financial covenants under the Credit Facility. | |||||||||||||||||||||||||||||||||
ASC 815, Derivatives and Hedging, established accounting and reporting standards requiring that derivative instruments be recorded at fair value and included in the balance sheet as assets or liabilities. The accounting for changes in the fair value of a derivative instrument depends on the intended use of the derivative and the resulting designation, which is established at the inception date of a derivative. Special accounting for derivatives qualifying as fair value hedges allows derivatives’ gains and losses to offset related results on the hedged item in the statement of income. For derivative instruments designated as cash flow hedges, changes in fair value, to the extent the hedge is effective, are recognized in other comprehensive income until the hedged item is recognized in earnings. Hedge effectiveness is measured at least quarterly based on the relative cumulative changes in fair value between the derivative contract and the hedged item over time. Credit risks related to derivatives include the possibility that the counter-party will not fulfill the terms of the contract. We considered counter-party credit risk to our derivative contracts when valuing our derivative instruments. | |||||||||||||||||||||||||||||||||
Our borrowing of €12.3 million under the Credit Facility serves as an economic hedge of our net investment in our European operations as fluctuations in the fair value of the borrowing attributable to the U.S. Dollar/Euro spot rate will offset translation gains or losses attributable to our investment in our European operations. At February 28, 2014 the €12.3 million borrowing had a U.S. Dollar value of $16.9 million. | |||||||||||||||||||||||||||||||||
For derivative instruments that are designated and qualify as cash flow hedges, the effective portion of the gain or loss on the derivative is reported as a component of other comprehensive income and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. Gains and losses on the derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current earnings. Any ineffectiveness related to our hedges was not material for any of the periods presented. | |||||||||||||||||||||||||||||||||
The amounts recognized in other comprehensive income, and reclassified into income, for the three and nine months ended February 28, 2014 and 2013, are as follows (in thousands): | |||||||||||||||||||||||||||||||||
Gain (Loss) | Gain (Loss) | Gain (Loss) | Gain (Loss) | ||||||||||||||||||||||||||||||
Recognized in | Reclassified from | Recognized in | Reclassified | ||||||||||||||||||||||||||||||
Other | Other | Other | from | ||||||||||||||||||||||||||||||
Comprehensive | Comprehensive | Comprehensive | Other | ||||||||||||||||||||||||||||||
Income | Income to | Income | Comprehensive | ||||||||||||||||||||||||||||||
Earnings | Income to | ||||||||||||||||||||||||||||||||
Earnings | |||||||||||||||||||||||||||||||||
Three Months | Three Months | Nine Months | Nine Months | ||||||||||||||||||||||||||||||
Ended | Ended | Ended | Ended | ||||||||||||||||||||||||||||||
February 28, | February 28, | February 28, | February 28, | ||||||||||||||||||||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||||||
Euro denominated long-term debt | $ | (94 | ) | $ | (143 | ) | $ | — | $ | — | $ | (856 | ) | $ | (791 | ) | $ | — | $ | — | |||||||||||||
The following table presents the fair value totals and balance sheet classification for derivatives designated as hedges under ASC 815 (in thousands): | |||||||||||||||||||||||||||||||||
February 28, 2014 | May 31, 2013 | ||||||||||||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||||||||||||
Classification | Balance Sheet | Fair | Classification | Balance Sheet | Fair | ||||||||||||||||||||||||||||
Location | Value | Location | Value | ||||||||||||||||||||||||||||||
Euro denominated long-term debt | Liability | Long-term debt | $ | 1,148 | Liability | Long-term debt | $ | 2,004 | |||||||||||||||||||||||||
FAIR_VALUE_MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended | ||||||||||||||||
Feb. 28, 2014 | |||||||||||||||||
FAIR VALUE MEASUREMENTS | ' | ||||||||||||||||
10. FAIR VALUE MEASUREMENTS | |||||||||||||||||
Effective June 1, 2008, we adopted the provisions of ASC 820, Fair Value Measurements and Disclosures (“ASC 820”), which among other things, requires enhanced disclosures about assets and liabilities carried at fair value. | |||||||||||||||||
As defined in ASC 820, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. We utilize market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. We primarily apply the market approach for recurring fair value measurements and endeavor to utilize the best information available. Accordingly, we utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. The use of unobservable inputs is intended to allow for fair value determinations in situations in which there is little, if any, market activity for the asset or liability at the measurement date. We are able to classify fair value balances based on the observability of those inputs. ASC 820 establishes a fair value hierarchy such that “Level 1” measurements include unadjusted quoted market prices for identical assets or liabilities in an active market, “Level 2” measurements include quoted market prices for identical assets or liabilities in an active market which have been adjusted for items such as effects of restrictions for transferability and those that are not quoted but are observable through corroboration with observable market data, including quoted market prices for similar assets, and “Level 3” measurements include those that are unobservable and of a highly subjective measure. | |||||||||||||||||
The following table sets forth, by level within the fair value hierarchy, our financial assets and liabilities that are accounted for at fair value on a recurring basis as of February 28, 2014. As required by ASC 820, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement (in thousands): | |||||||||||||||||
February 28, 2014 | |||||||||||||||||
(unaudited) | |||||||||||||||||
Quoted Prices | Significant | Significant | Total | ||||||||||||||
in Active | Other | Unobservable | |||||||||||||||
Markets for | Observable | Inputs (Level 3) | |||||||||||||||
Identical | Inputs (Level 2) | ||||||||||||||||
Items (Level 1) | |||||||||||||||||
Liabilities: | |||||||||||||||||
Contingent consideration | $ | — | $ | — | $ | 2,982 | $ | 2,982 | |||||||||
Euro denominated long-term debt | — | 1,148 | — | 1,148 | |||||||||||||
Total liabilities | $ | — | $ | 1,148 | $ | 2,982 | $ | 4,130 | |||||||||
May 31, 2013 | |||||||||||||||||
Quoted Prices | Significant | Significant | Total | ||||||||||||||
in Active | Other | Unobservable | |||||||||||||||
Markets for | Observable | Inputs (Level 3) | |||||||||||||||
Identical | Inputs (Level 2) | ||||||||||||||||
Items (Level 1) | |||||||||||||||||
Liabilities: | |||||||||||||||||
Contingent consideration | $ | — | $ | — | $ | 2,047 | $ | 2,047 | |||||||||
Euro denominated long-term debt | — | 2,004 | — | 2,004 | |||||||||||||
Total liabilities | $ | — | $ | 2,004 | $ | 2,047 | $ | 4,051 | |||||||||
The fair value of contingent consideration liabilities that was classified as Level 3 in the table above was estimated using a discounted cash flow technique with significant inputs that are not observable in the market and thus represents a Level 3 fair value measurement as defined in ASC 820. The significant inputs in the Level 3 measurement not supported by market activity include a combination of actual cash flows and probability-weighted assessments of expected future cash flows related to the acquired businesses, appropriately discounted considering the uncertainties associated with the obligation, and as calculated in accordance with the terms of the acquisition agreement. |
SHAREBASED_COMPENSATION
SHARE-BASED COMPENSATION | 9 Months Ended | ||||||||||||||||
Feb. 28, 2014 | |||||||||||||||||
SHARE-BASED COMPENSATION | ' | ||||||||||||||||
11. SHARE-BASED COMPENSATION | |||||||||||||||||
We have adopted stock incentive plans and other arrangements pursuant to which our Board of Directors (the “Board”) may grant stock options, restricted stock, stock units, stock appreciation rights, common stock or performance awards to officers, directors and key employees. At February 28, 2014, there were approximately 1.2 million stock options, restricted stock units and performance awards outstanding to officers, directors and key employees. The exercise price, terms and other conditions applicable to each form of share-based compensation under our plans are generally determined by the Compensation Committee of our Board at the time of grant and may vary. | |||||||||||||||||
Our share-based payments consist primarily of stock options, stock units, common stock and performance awards. The governance of our share-based compensation does not directly limit the number of future awards. However, the total number of shares ultimately issued may not exceed the total number of shares cumulatively authorized, which is 7,120,000 at February 28, 2014. Shares issued in connection with our share-based compensation are issued out of authorized but unissued common stock. Compensation expense related to share-based compensation totaled $3.2 million and $3.0 million for the nine months ended February 28, 2014 and 2013, respectively. At February 28, 2014, $9.7 million of unrecognized compensation expense related to share-based compensation is expected to be recognized over a remaining weighted-average period of 2.9 years. The tax benefit derived when share-based awards result in a tax deduction for the company was $1.1 million and $3.0 million for the nine months ended February 28, 2014 and 2013, respectively. | |||||||||||||||||
We determine the fair value of each stock option at the grant date using a Black-Scholes model and recognize the resulting expense of our stock option awards over the period during which an employee is required to provide services in exchange for the awards, usually the vesting period. There was no compensation expense related to stock options for the nine months ended February 28, 2014 and 2013. Our options typically vest in equal annual installments over a four year service period. Expense related to an option grant is recognized on a straight line basis over the specified vesting period for those options. Stock options generally have a ten year term. Transactions involving our stock options during the nine months ended February 28, 2014 and 2013 are summarized below: | |||||||||||||||||
Nine Months Ended | Nine Months Ended | ||||||||||||||||
February 28, 2014 | 28-Feb-13 | ||||||||||||||||
(unaudited) | (unaudited) | ||||||||||||||||
No. of | Weighted | No. of | Weighted | ||||||||||||||
Options | Average | Options | Average | ||||||||||||||
Exercise Price | Exercise Price | ||||||||||||||||
(in thousands) | (in thousands) | ||||||||||||||||
Shares under option, beginning of period | 1,052 | $ | 20.24 | 1,562 | $ | 18.95 | |||||||||||
Changes during the period: | |||||||||||||||||
Granted | — | $ | — | — | $ | — | |||||||||||
Exercised | (195 | ) | $ | 24.48 | (508 | ) | $ | 16.23 | |||||||||
Cancelled | — | $ | — | — | $ | — | |||||||||||
Expired | — | $ | — | — | $ | — | |||||||||||
Shares under option, end of period | 857 | $ | 19.28 | 1,054 | $ | 20.25 | |||||||||||
Exercisable at end of period | 857 | $ | 19.28 | 1,054 | $ | 20.25 | |||||||||||
Options exercisable at February 28, 2014 had a weighted-average remaining contractual life of 2.6 years. For total options outstanding at February 28, 2014, the range of exercise prices and remaining contractual lives are as follows: | |||||||||||||||||
Range of Prices | No. of | Weighted | Weighted | ||||||||||||||
Options | Average | Average | |||||||||||||||
Exercise Price | Remaining | ||||||||||||||||
Life | |||||||||||||||||
(in thousands) | (in years) | ||||||||||||||||
$6.42 to $9.62 | 105 | $ | 9 | 1.2 | |||||||||||||
$9.63 to $12.82 | 152 | $ | 11.11 | 1.9 | |||||||||||||
$12.83 to $16.03 | 264 | $ | 14.51 | 2.3 | |||||||||||||
$16.04 to $32.05 | 336 | $ | 29.94 | 3.6 | |||||||||||||
857 | $ | 19.28 | 2.6 | ||||||||||||||
Performance awards are settled with common stock upon vesting unless it is not legally feasible to issue shares, in which case the value of the award is settled in cash. We determine the fair value of each performance award based on the market price on the date of grant. Performance awards granted to our Chairman of our Board vest over the longer of four years or the achievement of performance goals based upon our future results of operations. Compensation expense related to performance awards totaled $0.4 million for the nine months ended February 28, 2014 and 2013. Transactions involving our performance awards during the nine months ended February 28, 2014 and 2013 are summarized below: | |||||||||||||||||
Nine Months Ended | Nine Months Ended | ||||||||||||||||
February 28, 2014 | February 28, 2013 | ||||||||||||||||
(unaudited) | (unaudited) | ||||||||||||||||
No. of | Weighted | No. of | Weighted | ||||||||||||||
Performance | Average | Performance | Average | ||||||||||||||
Awards | Fair Value | Awards | Fair Value | ||||||||||||||
(in thousands) | (in thousands) | ||||||||||||||||
Performance awards, beginning of period | 57 | $ | 25.45 | 65 | $ | 21.86 | |||||||||||
Changes during the period: | |||||||||||||||||
Granted | 17 | $ | 36.4 | 19 | $ | 32.89 | |||||||||||
Vested and settled | (24 | ) | $ | 22.65 | (27 | ) | $ | 22.04 | |||||||||
Cancelled | — | $ | — | — | $ | — | |||||||||||
Performance awards, end of period | 50 | $ | 30.63 | 57 | $ | 25.45 | |||||||||||
Stock units are settled with common stock upon vesting unless it is not legally feasible to issue shares, in which case the value of the award is settled in cash. We determine the fair value of each stock unit based on the market price on the date of grant. Stock units generally vest in annual installments over four years and the expense associated with the units is recognized over the same vesting period. We also grant common stock to our directors which typically vest immediately. Compensation expense related to stock units and director stock grants totaled $2.8 million for the nine months ended February 28, 2014 and $2.6 for the nine months ended February 28, 2013. Transactions involving our stock units and director stock grants during the nine months ended February 28, 2014 and 2013 are summarized below: | |||||||||||||||||
Nine Months Ended | Nine Months Ended | ||||||||||||||||
February 28, 2014 | February 28, 2013 | ||||||||||||||||
(unaudited) | (unaudited) | ||||||||||||||||
No. of Stock | Weighted | No. of Stock | Weighted | ||||||||||||||
Units | Average | Units | Average | ||||||||||||||
Fair Value | Fair Value | ||||||||||||||||
(in thousands) | (in thousands) | ||||||||||||||||
Stock and stock units, beginning of period | 329 | $ | 26.07 | 342 | $ | 21.73 | |||||||||||
Changes during the period: | |||||||||||||||||
Granted | 136 | $ | 36.71 | 141 | $ | 32.81 | |||||||||||
Vested and settled | (138 | ) | $ | 24.34 | (142 | ) | $ | 22.54 | |||||||||
Cancelled | (16 | ) | $ | 27.94 | (8 | ) | $ | 22.4 | |||||||||
Stock and stock units, end of period | 311 | $ | 31.39 | 333 | $ | 26.07 | |||||||||||
OTHER_COMPREHENSIVE_INCOME
OTHER COMPREHENSIVE INCOME | 9 Months Ended | ||||||||||||||||||||||||||||||||
Feb. 28, 2014 | |||||||||||||||||||||||||||||||||
OTHER COMPREHENSIVE INCOME | ' | ||||||||||||||||||||||||||||||||
12. OTHER COMPREHENSIVE INCOME | |||||||||||||||||||||||||||||||||
A summary of changes in other comprehensive income included within shareholders’ equity is as follows (in thousands): | |||||||||||||||||||||||||||||||||
Nine Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||
28-Feb-14 | 28-Feb-13 | ||||||||||||||||||||||||||||||||
(unaudited) | (unaudited) | ||||||||||||||||||||||||||||||||
Foreign | Foreign | Tax | Total | Foreign | Foreign | Tax | Total | ||||||||||||||||||||||||||
Currency | Currency | Provision | Currency | Currency | Provision | ||||||||||||||||||||||||||||
Translation | Hedge | Translation | Hedge | ||||||||||||||||||||||||||||||
Adjustments | Adjustments | ||||||||||||||||||||||||||||||||
Balance, beginning of period | $ | (3,532 | ) | $ | 2,004 | $ | (261 | ) | $ | (1,789 | ) | $ | (4,593 | ) | $ | 2,678 | $ | (672 | ) | $ | (2,587 | ) | |||||||||||
Other comprehensive income before tax | (2,925 | ) | (856 | ) | 1,944 | (1,837 | ) | 2,305 | (791 | ) | 218 | 1,732 | |||||||||||||||||||||
Non-controlling interest | 5 | — | — | 5 | (23 | ) | — | — | (23 | ) | |||||||||||||||||||||||
Balance, end of period | $ | (6,452 | ) | $ | 1,148 | $ | 1,683 | $ | (3,621 | ) | $ | (2,311 | ) | $ | 1,887 | $ | (454 | ) | $ | (878 | ) | ||||||||||||
The following table represents the related tax effects allocated to each component of other comprehensive income (in thousands): | |||||||||||||||||||||||||||||||||
Nine Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||
28-Feb-14 | February 28, 2013 | ||||||||||||||||||||||||||||||||
(unaudited) | (unaudited) | ||||||||||||||||||||||||||||||||
Gross | Tax | Net | Gross | Tax | Net | ||||||||||||||||||||||||||||
Amount | Effect | Amount | Amount | Effect | Amount | ||||||||||||||||||||||||||||
Foreign currency translation adjustments | $ | (2,925 | ) | $ | 1,617 | $ | (1,308 | ) | $ | 2,305 | $ | (91 | ) | $ | 2,214 | ||||||||||||||||||
Foreign currency hedge | (856 | ) | 327 | (529 | ) | (791 | ) | 309 | (482 | ) | |||||||||||||||||||||||
Total | $ | (3,781 | ) | $ | 1,944 | $ | (1,837 | ) | $ | 1,514 | $ | 218 | $ | 1,732 | |||||||||||||||||||
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Feb. 28, 2014 | |
COMMITMENTS AND CONTINGENCIES | ' |
13. COMMITMENTS AND CONTINGENCIES | |
Con Ed Matter—We have, from time to time, provided temporary leak repair services for the steam operations of Consolidated Edison Company of New York (“Con Ed”) located in New York City. In July 2007, a Con Ed steam main located in midtown Manhattan ruptured causing one death and other injuries and property damage. As of February 28, 2014, ninety-five lawsuits have been filed against Con Ed, the City of New York and Team in the Supreme Courts of New York located in Kings, New York and Bronx County, alleging that our temporary leak repair services may have contributed to the cause of the rupture. The lawsuits seek generally unspecified compensatory damages for personal injury, property damage and business interruption. Additionally, on March 31, 2008, we received a letter from Con Ed alleging that our contract with Con Ed requires us to indemnify and defend Con Ed for additional claims filed against Con Ed as a result of the rupture. Con Ed filed an action to join Team and the City of New York as defendants in all lawsuits filed against Con Ed that did not include Team and the City of New York as direct defendants. We are vigorously defending the lawsuits and Con Ed’s claim for indemnification. We are unable to estimate the amount of liability to us, if any, associated with these lawsuits and the claim for indemnification. We maintain insurance coverage, subject to a deductible limit of $250,000, which we believe should cover these claims. We have not accrued any liability in excess of the deductible limit for the lawsuits. We do not believe the ultimate outcome of these matters will have a material adverse effect on our financial position, results of operations or cash flows. | |
We are involved in various other lawsuits and are subject to various claims and proceedings encountered in the normal conduct of business. In our opinion, any uninsured losses that might arise from these lawsuits and proceedings will not have a materially adverse effect on our consolidated financial statements. |
ENTITY_WIDE_DISCLOSURES
ENTITY WIDE DISCLOSURES | 9 Months Ended | ||||||||||||||||
Feb. 28, 2014 | |||||||||||||||||
ENTITY WIDE DISCLOSURES | ' | ||||||||||||||||
14. ENTITY WIDE DISCLOSURES | |||||||||||||||||
ASC 280, Segment Reporting, requires we disclose certain information about our operating segments where operating segments are defined as “components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance.” Through July 1, 2013, we operated in only one segment—the industrial services segment. Within the industrial services segment, we were organized as two divisions. Our TCM division provided the services of inspection and assessment and field heat treating. Our TMS division provided the services of leak repair, fugitive emissions control, hot tapping, field machining, technical bolting and field valve repair. | |||||||||||||||||
Effective July 1, 2013, we implemented a reorganization of our business divisions to conduct operations in three segments: IHT Group, MS Group and Quest Group. All three operating segments operate under a business segment manager who reports directly to Team’s Chief Executive Officer who operates as the chief operating decision maker. Segment data for our three operating segments are as follows (in thousands): | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
February 28, | February 28, | February 28, | February 28, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||||||||||
Revenues: | |||||||||||||||||
IHT | $ | 85,149 | $ | 81,227 | $ | 290,409 | $ | 272,372 | |||||||||
MS | 63,440 | 59,513 | 200,196 | 201,011 | |||||||||||||
Quest | 14,647 | 10,235 | 47,435 | 39,732 | |||||||||||||
Total | $ | 163,236 | $ | 150,975 | $ | 538,040 | $ | 513,115 | |||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
February 28, | February 28, | February 28, | February 28, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||||||||||
Operating income: | |||||||||||||||||
IHT | $ | 3,783 | $ | 4,439 | $ | 31,666 | $ | 30,411 | |||||||||
MS | 2,939 | 3,346 | 17,120 | 21,049 | |||||||||||||
Quest | 1,170 | (62 | ) | 5,986 | 5,944 | ||||||||||||
Corporate and shared support services | (6,892 | ) | (7,114 | ) | (21,786 | ) | (20,931 | ) | |||||||||
Total | $ | 1,000 | $ | 609 | $ | 32,986 | $ | 36,473 | |||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
February 28, | February 28, | February 28, | February 28, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||||||||||
Capital expenditures: | |||||||||||||||||
IHT | $ | 2,187 | $ | 1,398 | $ | 5,602 | $ | 6,253 | |||||||||
MS | 1,503 | 1,654 | 4,694 | 6,266 | |||||||||||||
Quest | 582 | 2,439 | 3,257 | 3,840 | |||||||||||||
Corporate and shared support services | 5,867 | 658 | 10,205 | 2,444 | |||||||||||||
Total | $ | 10,139 | $ | 6,149 | $ | 23,758 | $ | 18,803 | |||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
February 28, | February 28, | February 28, | February 28, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||||||||||
Depreciation and amortization: | |||||||||||||||||
IHT | $ | 1,936 | $ | 1,866 | $ | 5,947 | $ | 5,704 | |||||||||
MS | 1,801 | 1,771 | 5,391 | 5,165 | |||||||||||||
Quest | 1,343 | 1,038 | 4,033 | 3,193 | |||||||||||||
Corporate and shared support services | 205 | 125 | 605 | 392 | |||||||||||||
Total | $ | 5,285 | $ | 4,800 | $ | 15,976 | $ | 14,454 | |||||||||
Separate measures of Team’s assets by operating segment are not produced or utilized by management to evaluate segment performance. | |||||||||||||||||
Revenues and total assets in the United States and other countries are as follows (in thousands): | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
February 28, | February 28, | February 28, | February 28, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||||||||||
Revenues: | |||||||||||||||||
United States | $ | 120,916 | $ | 116,155 | $ | 382,322 | $ | 366,397 | |||||||||
Canada | 22,267 | 19,946 | 93,621 | 98,647 | |||||||||||||
Europe | 10,448 | 8,220 | 31,079 | 23,586 | |||||||||||||
Other foreign countries | 9,605 | 6,654 | 31,018 | 24,485 | |||||||||||||
Total | $ | 163,236 | $ | 150,975 | $ | 538,040 | $ | 513,115 | |||||||||
February 28, 2014 | May 31, 2013 | ||||||||||||||||
(unaudited) | |||||||||||||||||
Total assets: | |||||||||||||||||
United States | $ | 339,751 | $ | 334,579 | |||||||||||||
Canada | 63,124 | 68,164 | |||||||||||||||
Europe | 39,912 | 35,734 | |||||||||||||||
Other foreign countries | 24,710 | 21,726 | |||||||||||||||
Total | $ | 467,497 | $ | 460,203 | |||||||||||||
UNCONSOLIDATED_SUBSIDIARIES
UNCONSOLIDATED SUBSIDIARIES | 9 Months Ended |
Feb. 28, 2014 | |
UNCONSOLIDATED SUBSIDIARIES | ' |
15. UNCONSOLIDATED SUBSIDIARIES | |
Our earnings from unconsolidated affiliates consisted entirely of our joint venture (50% ownership) to perform non-destructive testing and inspection services in Alaska. At December 31, 2013 the joint venture was dissolved and the net assets were liquidated resulting in no material gain or loss. However, the operations of the joint venture have been continued by our IHT division. Our investment in the net assets of the joint venture, accounted for using the equity method of accounting, was zero at February 28, 2014 and $1.8 million at May 31, 2013. Revenues from the joint venture not reflected in our consolidated revenues were $8.5 million and $11.0 million for the nine months ended February 28, 2014 and 2013, respectively. |
VENEZUELAS_HIGHLY_INFLATIONARY
VENEZUELA'S HIGHLY INFLATIONARY ECONOMY | 9 Months Ended |
Feb. 28, 2014 | |
VENEZUELA'S HIGHLY INFLATIONARY ECONOMY | ' |
16. VENEZUELA’S HIGHLY INFLATIONARY ECONOMY | |
We operate a small service location in Punta Fijo, Venezuela, whose annual revenues have historically been less than one percent of our consolidated revenues for all periods presented. Because of the uncertain political environment in Venezuela, starting in the third quarter of fiscal year 2010, we began to account for Venezuelan operations pursuant to accounting guidance for hyperinflationary economies. Following the designation of the Venezuelan economy as hyperinflationary, we ceased taking the effects of currency fluctuations to accumulated other comprehensive income and began reflecting all effects as a component of other income in our statement of operations. Prior to February 2013, we were using the Venezuelan central bank’s official published rate (5.3 Bolivars per U.S. Dollar) to translate Venezuelan assets into U.S. Dollars as no other legal rate was readily available. In February 2013, the Venezuelan government announced a devaluation in its currency and created a new official exchange rate of 6.3 Bolivars per U.S. Dollar. As a result of the currency devaluation, we recognized a $0.6 million pre-tax foreign currency loss in the third quarter of fiscal year 2013. | |
In the third quarter of fiscal year 2014, we began using an alternative Venezuelan, state-run exchange rate, commonly referred to as SICAD-1, to translate local currency financial statements. We believe using the SICAD-1 rate of 11.8 Bolivars per Dollar is more economically representative of what we might expect to receive in a dividend transaction than the official exchange rate of 6.3 Bolivars per Dollar because any dividend payments that would have been approved by the Central Bank of Venezuela prior to March 2014 would likely have been converted to U.S. Dollars at the SICAD-1 rate. As a result of the revaluation, we recognized a $1.9 million foreign currency loss in the third quarter of fiscal 2014. | |
In March 2014, a market-based, state-run exchange, commonly referred to as SICAD-2, was initiated by the Central Bank of Venezuela. The nascent exchange system reported early exchange rates of about 50 Bolivars per U.S. Dollar. Management is closely monitoring the applicability and viability of this new exchange system. We have not yet determined whether we will utilize SICAD-1 or SICAD-2 exchange rates in the future for translation of local financial statements into U.S. Dollars. | |
At February 28, 2014, after giving effect to the revaluation in the third quarter of fiscal 2014, our Venezuelan subsidiary had net assets of $2.4 million, consisting primarily of Bolivars denominated accounts receivable. If SICAD-2 rates are used to translate local currency financial statements to U.S. Dollars in the future, a further significant revaluation of our net assets in Venezuela can be expected in the fourth quarter of fiscal year 2014. |
REPURCHASE_OF_COMMON_STOCK
REPURCHASE OF COMMON STOCK | 9 Months Ended |
Feb. 28, 2014 | |
REPURCHASE OF COMMON STOCK | ' |
17. REPURCHASE OF COMMON STOCK | |
On October 1, 2013, our Board approved an initial $25 million stock repurchase plan, superseding and replacing our previous stock repurchase plan. During our second quarter, we repurchased 369,900 shares for a total cost of $13.3 million. These shares, along with 89,569 shares purchased in a prior period at a cost of $1.3 million, were retired and are not included in common stock issued and outstanding as of February 28, 2014. The retirement of the shares purchased resulted in a reduction in common stock of $0.1 million, a reduction of $2.2 million to additional paid-in capital, and a $12.3 million reduction in retained earnings. No shares were repurchased in the third quarter. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES (Policies) | 9 Months Ended | ||||||||||||||||
Feb. 28, 2014 | |||||||||||||||||
Basis for Presentation | ' | ||||||||||||||||
Basis for presentation. These interim financial statements are unaudited, but in the opinion of our management, reflect all adjustments, consisting of normal recurring adjustments necessary for a fair presentation of results for such periods. The consolidated condensed balance sheet at May 31, 2013 is derived from the May 31, 2013 audited consolidated financial statements. The results of operations for any interim period are not necessarily indicative of results for the full year. These financial statements should be read in conjunction with the financial statements and notes thereto contained in our annual report on Form 10-K for the fiscal year ended May 31, 2013. | |||||||||||||||||
Consolidation | ' | ||||||||||||||||
Consolidation. The consolidated financial statements include the accounts of Team, Inc. and our majority-owned subsidiaries where we have control over operating and financial policies. Investments in affiliates in which we have the ability to exert significant influence over operating and financial policies, but where we do not control the operating and financial policies, are accounted for using the equity method. All material intercompany accounts and transactions have been eliminated in consolidation. | |||||||||||||||||
Use of Estimates | ' | ||||||||||||||||
Use of estimates. Our accounting policies conform to Generally Accepted Accounting Principles in the U.S. (“GAAP”). Our most significant accounting policies are described below. The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and judgments that affect our reported financial position and results of operations. We review significant estimates and judgments affecting our consolidated financial statements on a recurring basis and record the effect of any necessary adjustments prior to their publication. Estimates and judgments are based on information available at the time such estimates and judgments are made. Adjustments made with respect to the use of these estimates and judgments often relate to information not previously available. Uncertainties with respect to such estimates and judgments are inherent in the preparation of financial statements. Estimates and judgments are used in, among other things, (1) aspects of revenue recognition, (2) valuation of tangible and intangible assets and subsequent assessments for possible impairment, (3) the fair value of the non-controlling interest in subsidiaries that are not wholly-owned, (4) estimating various factors used to accrue liabilities for workers’ compensation, auto, medical and general liability, (5) establishing an allowance for uncollectible accounts receivable, (6) estimating the useful lives of our assets and (7) assessing future tax exposure and the realization of tax assets. | |||||||||||||||||
Fair Value of Financial Instruments | ' | ||||||||||||||||
Fair value of financial instruments. Our financial instruments consist primarily of cash, cash equivalents, accounts receivable, accounts payable and debt obligations. The carrying amount of cash, cash equivalents, trade accounts receivable and trade accounts payable are representative of their respective fair values due to the short-term maturity of these instruments. The fair value of our banking facility is representative of the carrying value based upon the variable terms and management’s opinion that the current rates available to us with the same maturity and security structure are equivalent to that of the banking facility. | |||||||||||||||||
Cash and Cash Equivalents | ' | ||||||||||||||||
Cash and cash equivalents. Cash and cash equivalents consist of all demand deposits and funds invested in highly liquid short-term investments with original maturities of three months or less. | |||||||||||||||||
Inventory | ' | ||||||||||||||||
Inventory. Inventory is stated at the lower of cost (first-in, first-out method) or market. Inventory includes material, labor and certain fixed overhead costs. | |||||||||||||||||
Property, Plant and Equipment | ' | ||||||||||||||||
Property, plant and equipment. Property, plant and equipment are stated at cost less accumulated depreciation and amortization. Leasehold improvements are amortized over the shorter of their respective useful life or the lease term. Depreciation and amortization of assets are computed by the straight-line method over the following estimated useful lives of the assets: | |||||||||||||||||
Classification | Useful Life | ||||||||||||||||
Buildings | 20-40 years | ||||||||||||||||
Leasehold improvements | 2-15 years | ||||||||||||||||
Machinery and equipment | 2-12 years | ||||||||||||||||
Furniture and fixtures | 2-10 years | ||||||||||||||||
Computers and computer software | 2-5 years | ||||||||||||||||
Automobiles | 2-5 years | ||||||||||||||||
Goodwill, Intangible Assets, and Non-Controlling Interest | ' | ||||||||||||||||
Goodwill, intangible assets, and non-controlling interest. Goodwill represents the excess of costs over fair value of assets of businesses acquired. Goodwill and intangible assets acquired in a purchase business combination and determined to have an indefinite useful life are not amortized, but are instead tested for impairment at least annually in accordance with the provisions of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 350, Intangibles—Goodwill and Other. Intangible assets with estimated useful lives are amortized over their respective estimated useful lives to their estimated residual values and reviewed for impairment in accordance with ASC 350. | |||||||||||||||||
Effective July 1, 2013, we implemented a reorganization of our business divisions and now conduct operations in three segments: IHT Group, MS Group and Quest Group. Each operating segment has goodwill relating to past acquisitions and we now assess goodwill for impairment at the operating segment level. Due to the changes in the underlying assumptions surrounding our goodwill testing, during the first quarter of fiscal year 2014, we performed a quantitative analysis of goodwill to test for impairment. The test for impairment is performed at the reporting unit level which is deemed to be at the operating segment level. The test was a two-step process that involved comparing the estimated fair value of each reporting unit to the reporting unit’s carrying value, including goodwill. If the fair value of a reporting unit exceeded its carrying amount, the goodwill of the reporting unit was not considered impaired; therefore, the second step of the impairment test would not be deemed necessary. If the carrying amount of the reporting unit exceeded its fair value, we would then perform a second step to the goodwill impairment test to measure the amount of goodwill impairment loss to be recorded. | |||||||||||||||||
The fair value of the reporting units at July 1, 2013 were determined using a method based on discounted cash flow models with estimated cash flows based on internal forecasts of revenue and expenses over a four year period plus a terminal value period (the income approach). The income approach estimated fair value by discounting each reporting unit’s estimated future cash flows using a discount rate that approximated our weighted-average cost of capital. The fair value derived from the income approach, in the aggregate, approximated our market capitalization. At July 1, 2013, our market capitalization exceeded the carrying value of our consolidated net assets by approximately $500 million or 170%, and the fair value of each operating segment significantly exceeded their respective carrying amounts as of that date. | |||||||||||||||||
There was $114.1 million and $103.5 million of goodwill at February 28, 2014 and May 31, 2013, respectively. A summary of goodwill is as follows (in thousands): | |||||||||||||||||
Nine Months Ended | |||||||||||||||||
28-Feb-14 | |||||||||||||||||
MS | IHT | Quest | Total | ||||||||||||||
Balance at May 31, 2013 | $ | 19,130 | $ | 53,800 | $ | 30,536 | $ | 103,466 | |||||||||
Acquisitions | — | 11,336 | — | 11,336 | |||||||||||||
Foreign currency adjustments | 611 | (1,448 | ) | 149 | (688 | ) | |||||||||||
Balance at February 28, 2014 | $ | 19,741 | $ | 63,688 | $ | 30,685 | $ | 114,114 | |||||||||
In November 2010, we purchased 95% of Quest Integrity Group, LLC, a leading provider of proprietary in-line inspection and advanced engineering and assessment services. We expect to purchase the remaining 5% interest (the “Non-Controlling Interests”) at the end of fiscal 2015 based upon a valuation methodology as specified in the purchase agreement. | |||||||||||||||||
Information regarding the change in carrying value of the non-controlling interest is set forth below (in thousands): | |||||||||||||||||
Fair value of non-controlling interest at November 3, 2010 | $ | 4,917 | |||||||||||||||
Income attributable to non-controlling interest | 652 | ||||||||||||||||
Other comprehensive income attributable to non-controlling interest | (12 | ) | |||||||||||||||
Carrying value of non-controlling interest at February 28, 2014 | $ | 5,557 | |||||||||||||||
Income Taxes | ' | ||||||||||||||||
Income taxes. We follow the guidance of the ASC 740, Income Taxes, which requires that we use the asset and liability method of accounting for deferred income taxes and provide deferred income taxes for all significant temporary differences. As part of the process of preparing our consolidated financial statements, we are required to estimate our income taxes in each of the jurisdictions in which we operate. This process involves estimating our actual current tax payable and related tax expense together with assessing temporary differences resulting from differing treatment of certain items, such as depreciation, for tax and accounting purposes. These differences can result in deferred tax assets and liabilities, which are included within our consolidated balance sheets. We must then assess the likelihood that our deferred tax assets will be recovered from future taxable income and, to the extent we believe that it is more likely than not (a likelihood of more than 50%) that some portion or all of the deferred tax assets will not be realized, we must establish a valuation allowance. We consider all available evidence to determine whether, based on the weight of the evidence, a valuation allowance is needed. Evidence used includes information about our current financial position and our results of operations for the current and preceding years, as well as all currently available information about future years, including our anticipated future performance, future reversals of existing taxable temporary differences, and tax planning strategies. | |||||||||||||||||
Workers' Compensation, Auto, Medical and General Liability Accruals | ' | ||||||||||||||||
Workers’ compensation, auto, medical and general liability accruals. In accordance with ASC 450, Contingencies, we record a loss contingency when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. We review our loss contingencies on an ongoing basis to ensure that we have appropriate reserves recorded on our balance sheet. These reserves are based on historical experience with claims incurred but not received, estimates and judgments made by management, applicable insurance coverage for litigation matters, and are adjusted as circumstances warrant. For workers’ compensation, our self-insured retention is $1.0 million and our automobile liability self-insured retention is currently $500,000 per occurrence. For general liability claims we have an effective self-insured retention of $3.0 million per occurrence. For medical claims, our self-insured retention is $175,000 per individual claimant determined on an annual basis. For environmental liability claims, our self-insured retention is $500,000 per occurrence. We maintain insurance for claims that exceed such self-retention limits. The insurance is subject to terms, conditions, limitations and exclusions that may not fully compensate us for all losses. Our estimates and judgments could change based on new information, changes in laws or regulations, changes in management’s plans or intentions, or the outcome of legal proceedings, settlements or other factors. If different estimates and judgments were applied with respect to these matters, it is likely that reserves would be recorded for different amounts. | |||||||||||||||||
Revenue Recognition | ' | ||||||||||||||||
Revenue recognition. We determine our revenue recognition guidelines for our operations based on guidance provided in applicable accounting standards and positions adopted by the FASB and the Securities and Exchange Commission (the “SEC”). Most of our projects are short-term in nature and we predominantly derive revenues by providing a variety of industrial services on a time and material basis. For all of these services our revenues are recognized when services are rendered or when product is shipped to the job site and risk of ownership passes to the customer. However, due to various contractual terms with our customers, at the end of any reporting period, there may be earned but unbilled revenue that is accrued to properly match revenues with related costs. At February 28, 2014 and May 31, 2013, the amount of earned but unbilled revenue included in accounts receivable was $28.2 million and $25.5 million, respectively. | |||||||||||||||||
Allowance for Doubtful Accounts | ' | ||||||||||||||||
Allowance for doubtful accounts. In the ordinary course of business, a percentage of our accounts receivable are not collected due to billing disputes, customer bankruptcies, dissatisfaction with the services we performed and other various reasons. We establish an allowance to account for those accounts receivable that will eventually be deemed uncollectible. The allowance for doubtful accounts is based on a combination of our historical experience and management’s review of long outstanding accounts receivable. | |||||||||||||||||
Concentration of Credit Risk | ' | ||||||||||||||||
Concentration of credit risk. No single customer accounts for more than 10% of consolidated revenues. | |||||||||||||||||
Earnings per share | ' | ||||||||||||||||
Earnings per share. Basic earnings per share is computed by dividing net income available to Team shareholders by the weighted-average number of shares of common stock outstanding during the year. Diluted earnings per share is computed by dividing net income available to Team shareholders, less income or loss for the period attributable to the non-controlling interest, by the sum of (1) the weighted-average number of shares of common stock, outstanding during the period, (2) the dilutive effect of the assumed exercise of share-based compensation using the treasury stock method and (3) the dilutive effect of the assumed conversion of our non-controlling interest to our common stock (see Note 2). | |||||||||||||||||
Amounts used in basic and diluted earnings per share, for the three and nine months ended February 28, 2014 and 2013, are as follows (in thousands): | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
February 28, | February 28, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||||||||||
Weighted-average number of basic shares outstanding | 20,384 | 20,387 | 20,432 | 20,104 | |||||||||||||
Stock options, stock units and performance awards | 614 | 753 | 643 | 770 | |||||||||||||
Assumed conversion of non-controlling interest | 195 | 171 | 209 | 204 | |||||||||||||
Total shares and dilutive securities | 21,193 | 21,311 | 21,284 | 21,078 | |||||||||||||
There were no stock options outstanding during the three months ended February 28, 2014 and 2013 excluded from the computation of diluted earnings per share because the options’ exercise prices were greater than the average market price of common shares during the periods. There were zero and 1,000 stock options to purchase shares of common stock outstanding during the nine months ended February 28, 2014 and 2013, respectively, excluded from the computation of diluted earnings per share because the options’ exercise prices were greater than the average market price of common shares during the periods. | |||||||||||||||||
Foreign Currency | ' | ||||||||||||||||
Foreign currency. For subsidiaries whose functional currency is not the U.S. Dollar, assets and liabilities are translated at period ending rates of exchange and revenues and expenses are translated at period average exchange rates. Translation adjustments for the asset and liability accounts are included as a separate component of accumulated other comprehensive income in shareholders’ equity. Foreign currency transaction gains and losses are included in our statement of income. Effective December 1, 2009, we began to account for Venezuela as a highly-inflationary economy and the effect of all subsequent currency fluctuations between the Bolivar and the U.S. Dollar are recorded in our statement of income (see Note 16). | |||||||||||||||||
Newly Adopted Accounting Principles | ' | ||||||||||||||||
Newly Adopted Accounting Principles | |||||||||||||||||
ASU 2011-04. In May 2011, an update regarding fair value measurement was issued to conform the definition of fair value and common requirements for measurement of and disclosure about fair value under U.S. GAAP and International Financial Reporting Standards. The standard also clarifies the application of existing fair value measurement requirements and expands the disclosure requirements for fair value measurements that are estimated using significant unobservable Level 3 inputs. The standard update is effective for interim and annual periods beginning after December 15, 2011. The adoption of this standard did not have a material impact on our results of operations, financial position or cash flows. | |||||||||||||||||
ASU 2011-05. In June 2011, the FASB issued an update to existing guidance on the presentation of comprehensive income. This update requires the presentation of the components of net income and other comprehensive income either in a single continuous statement or in two separate but consecutive statements. In addition, companies are also required to present reclassification adjustments for items that are reclassified from other comprehensive income to net income on the face of the financial statements. In December 2011, the FASB issued an accounting update to defer the effective date for presentation of reclassification of items out of accumulated other comprehensive income to net income. These updates are effective for fiscal years and interim periods beginning after December 15, 2011 with early adoption permitted. This update was adopted by Team on June 1, 2012. The adoption of this standard did not have a material effect on our results of operations, financial position or cash flows. | |||||||||||||||||
ASU 2011-11. In December 2011, an update was issued related to new disclosures on offsetting assets and liabilities of financial and derivative instruments. The amendments require the disclosure of gross asset and liability amounts, amounts offset on the balance sheet and amounts subject to the offsetting requirements, but not offset on the balance sheet. This standard does not amend the existing guidance on when it is appropriate to offset. The standard update is effective for annual periods beginning after January 1, 2013. The adoption of this standard did not have a material impact on our results of operations, financial position or cash flows. | |||||||||||||||||
ASU 2013-02. In February 2013, an update regarding other comprehensive income was issued to require entities to provide information about the amounts reclassified out of accumulated other comprehensive income by component. In addition, it requires entities to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of other comprehensive income by the respective line items of net income but only if the amount reclassified is required under GAAP to be reclassified to net income in its entirety in the same reporting period. The update is effective for fiscal years beginning after December 15, 2012. This update was adopted by Team on June 1, 2013. The adoption of this update did not have a material impact on our results of operations, financial position or cash flows. |
PROPERTY_PLANT_AND_EQUIPMENT_T
PROPERTY, PLANT AND EQUIPMENT (Tables) | 9 Months Ended | ||||||||
Feb. 28, 2014 | |||||||||
Property, Plant and Equipment | ' | ||||||||
Depreciation and amortization of assets are computed by the straight-line method over the following estimated useful lives of the assets: | |||||||||
Classification | Useful Life | ||||||||
Buildings | 20-40 years | ||||||||
Leasehold improvements | 2-15 years | ||||||||
Machinery and equipment | 2-12 years | ||||||||
Furniture and fixtures | 2-10 years | ||||||||
Computers and computer software | 2-5 years | ||||||||
Automobiles | 2-5 years | ||||||||
Property, Plant and Equipment | ' | ||||||||
Property, Plant and Equipment | ' | ||||||||
A summary of property, plant and equipment as of February 28, 2014 and May 31, 2013 is as follows (in thousands): | |||||||||
February 28, 2014 | May 31, 2013 | ||||||||
(unaudited) | |||||||||
Land | $ | 3,067 | $ | 3,108 | |||||
Buildings and leasehold improvements | 19,345 | 18,445 | |||||||
Machinery and equipment | 148,120 | 137,439 | |||||||
Furniture and fixtures | 4,809 | 4,469 | |||||||
Capitalized ERP system development costs | 2,677 | — | |||||||
Computers and computer software | 9,581 | 8,871 | |||||||
Automobiles | 3,660 | 3,842 | |||||||
Construction in progress | 11,196 | 3,816 | |||||||
Total | 202,455 | 179,990 | |||||||
Accumulated depreciation and amortization | (117,063 | ) | (105,051 | ) | |||||
Property, plant, and equipment, net | $ | 85,392 | $ | 74,939 | |||||
SUMMARY_OF_SIGNIFICANT_ACCOUNT2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES (Tables) | 9 Months Ended | ||||||||||||||||
Feb. 28, 2014 | |||||||||||||||||
Summary of Goodwill | ' | ||||||||||||||||
A summary of goodwill is as follows (in thousands): | |||||||||||||||||
Nine Months Ended | |||||||||||||||||
28-Feb-14 | |||||||||||||||||
MS | IHT | Quest | Total | ||||||||||||||
Balance at May 31, 2013 | $ | 19,130 | $ | 53,800 | $ | 30,536 | $ | 103,466 | |||||||||
Acquisitions | — | 11,336 | — | 11,336 | |||||||||||||
Foreign currency adjustments | 611 | (1,448 | ) | 149 | (688 | ) | |||||||||||
Balance at February 28, 2014 | $ | 19,741 | $ | 63,688 | $ | 30,685 | $ | 114,114 | |||||||||
Change in Carrying Value of Non-Controlling Interest | ' | ||||||||||||||||
Information regarding the change in carrying value of the non-controlling interest is set forth below (in thousands): | |||||||||||||||||
Fair value of non-controlling interest at November 3, 2010 | $ | 4,917 | |||||||||||||||
Income attributable to non-controlling interest | 652 | ||||||||||||||||
Other comprehensive income attributable to non-controlling interest | (12 | ) | |||||||||||||||
Carrying value of non-controlling interest at February 28, 2014 | $ | 5,557 | |||||||||||||||
Amounts Used In Basic and Diluted Earnings Per Share | ' | ||||||||||||||||
Amounts used in basic and diluted earnings per share, for the three and nine months ended February 28, 2014 and 2013, are as follows (in thousands): | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
February 28, | February 28, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||||||||||
Weighted-average number of basic shares outstanding | 20,384 | 20,387 | 20,432 | 20,104 | |||||||||||||
Stock options, stock units and performance awards | 614 | 753 | 643 | 770 | |||||||||||||
Assumed conversion of non-controlling interest | 195 | 171 | 209 | 204 | |||||||||||||
Total shares and dilutive securities | 21,193 | 21,311 | 21,284 | 21,078 | |||||||||||||
RECEIVABLES_Tables
RECEIVABLES (Tables) | 9 Months Ended | ||||||||
Feb. 28, 2014 | |||||||||
Summary of Accounts Receivable | ' | ||||||||
A summary of accounts receivable as of February 28, 2014 and May 31, 2013 is as follows (in thousands): | |||||||||
February 28, 2014 | May 31, 2013 | ||||||||
(unaudited) | |||||||||
Trade accounts receivable | $ | 135,145 | $ | 152,030 | |||||
Unbilled revenues | 28,186 | 25,516 | |||||||
Allowance for doubtful accounts | (5,343 | ) | (5,438 | ) | |||||
Total | $ | 157,988 | $ | 172,108 | |||||
INVENTORY_Tables
INVENTORY (Tables) | 9 Months Ended | ||||||||
Feb. 28, 2014 | |||||||||
Summary of Inventory | ' | ||||||||
A summary of inventory as of February 28, 2014 and May 31, 2013 is as follows (in thousands): | |||||||||
February 28, 2014 | May 31, 2013 | ||||||||
(unaudited) | |||||||||
Raw materials | $ | 3,056 | $ | 3,460 | |||||
Work in progress | 893 | 845 | |||||||
Finished goods | 22,355 | 22,202 | |||||||
Total | $ | 26,304 | $ | 26,507 | |||||
INTANGIBLE_ASSETS_Tables
INTANGIBLE ASSETS (Tables) | 9 Months Ended | ||||||||||||||||||||||||
Feb. 28, 2014 | |||||||||||||||||||||||||
Summary of Intangible Assets | ' | ||||||||||||||||||||||||
A summary of intangible assets as of February 28, 2014 and May 31, 2013 is as follows (in thousands): | |||||||||||||||||||||||||
February 28, 2014 | May 31, 2013 | ||||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||||
Gross | Accumulated | Net | Gross | Accumulated | Net | ||||||||||||||||||||
Carrying | Amortization | Carrying | Carrying | Amortization | Carrying | ||||||||||||||||||||
Amount | Amount | Amount | Amount | ||||||||||||||||||||||
Customer relationships | $ | 22,355 | $ | (6,059 | ) | $ | 16,296 | $ | 21,418 | $ | (4,168 | ) | $ | 17,250 | |||||||||||
Non-compete agreements | 3,630 | (3,352 | ) | 278 | 3,701 | (3,232 | ) | 469 | |||||||||||||||||
Trade names | 4,325 | (641 | ) | 3,684 | 4,075 | (424 | ) | 3,651 | |||||||||||||||||
Technology | 5,112 | (1,565 | ) | 3,547 | 5,112 | (1,166 | ) | 3,946 | |||||||||||||||||
Licenses | 683 | (98 | ) | 585 | 683 | (49 | ) | 634 | |||||||||||||||||
Total | $ | 36,105 | $ | (11,715 | ) | $ | 24,390 | $ | 34,989 | $ | (9,039 | ) | $ | 25,950 | |||||||||||
OTHER_ACCRUED_LIABILITIES_Tabl
OTHER ACCRUED LIABILITIES (Tables) | 9 Months Ended | ||||||||
Feb. 28, 2014 | |||||||||
Summary of Other Accrued Liabilities | ' | ||||||||
A summary of other accrued liabilities as of February 28, 2014 and May 31, 2013 is as follows (in thousands): | |||||||||
February 28, 2014 | May 31, 2013 | ||||||||
(unaudited) | |||||||||
Payroll and other compensation expenses | $ | 22,806 | $ | 32,093 | |||||
Insurance accruals | 5,330 | 5,385 | |||||||
Property, sales and other non-income related taxes | 1,650 | 2,385 | |||||||
Other | 9,474 | 9,302 | |||||||
Total | $ | 39,260 | $ | 49,165 | |||||
LONGTERM_DEBT_DERIVATIVES_AND_1
LONG-TERM DEBT, DERIVATIVES AND LETTERS OF CREDIT (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||||||
Feb. 28, 2014 | |||||||||||||||||||||||||||||||||
Amounts Recognized In Other Comprehensive Income, and Reclassified Into Income | ' | ||||||||||||||||||||||||||||||||
The amounts recognized in other comprehensive income, and reclassified into income, for the three and nine months ended February 28, 2014 and 2013, are as follows (in thousands): | |||||||||||||||||||||||||||||||||
Gain (Loss) | Gain (Loss) | Gain (Loss) | Gain (Loss) | ||||||||||||||||||||||||||||||
Recognized in | Reclassified from | Recognized in | Reclassified | ||||||||||||||||||||||||||||||
Other | Other | Other | from | ||||||||||||||||||||||||||||||
Comprehensive | Comprehensive | Comprehensive | Other | ||||||||||||||||||||||||||||||
Income | Income to | Income | Comprehensive | ||||||||||||||||||||||||||||||
Earnings | Income to | ||||||||||||||||||||||||||||||||
Earnings | |||||||||||||||||||||||||||||||||
Three Months | Three Months | Nine Months | Nine Months | ||||||||||||||||||||||||||||||
Ended | Ended | Ended | Ended | ||||||||||||||||||||||||||||||
February 28, | February 28, | February 28, | February 28, | ||||||||||||||||||||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||||||
Euro denominated long-term debt | $ | (94 | ) | $ | (143 | ) | $ | — | $ | — | $ | (856 | ) | $ | (791 | ) | $ | — | $ | — | |||||||||||||
Fair Value Totals and Balance Sheet Classification for Derivatives Designated As Hedges | ' | ||||||||||||||||||||||||||||||||
The following table presents the fair value totals and balance sheet classification for derivatives designated as hedges under ASC 815 (in thousands): | |||||||||||||||||||||||||||||||||
February 28, 2014 | May 31, 2013 | ||||||||||||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||||||||||||
Classification | Balance Sheet | Fair | Classification | Balance Sheet | Fair | ||||||||||||||||||||||||||||
Location | Value | Location | Value | ||||||||||||||||||||||||||||||
Euro denominated long-term debt | Liability | Long-term debt | $ | 1,148 | Liability | Long-term debt | $ | 2,004 | |||||||||||||||||||||||||
FAIR_VALUE_MEASUREMENTS_Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended | ||||||||||||||||
Feb. 28, 2014 | |||||||||||||||||
Fair Value of Assets and Liabilities Measured on Recurring Basis | ' | ||||||||||||||||
The following table sets forth, by level within the fair value hierarchy, our financial assets and liabilities that are accounted for at fair value on a recurring basis as of February 28, 2014. As required by ASC 820, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement (in thousands): | |||||||||||||||||
February 28, 2014 | |||||||||||||||||
(unaudited) | |||||||||||||||||
Quoted Prices | Significant | Significant | Total | ||||||||||||||
in Active | Other | Unobservable | |||||||||||||||
Markets for | Observable | Inputs (Level 3) | |||||||||||||||
Identical | Inputs (Level 2) | ||||||||||||||||
Items (Level 1) | |||||||||||||||||
Liabilities: | |||||||||||||||||
Contingent consideration | $ | — | $ | — | $ | 2,982 | $ | 2,982 | |||||||||
Euro denominated long-term debt | — | 1,148 | — | 1,148 | |||||||||||||
Total liabilities | $ | — | $ | 1,148 | $ | 2,982 | $ | 4,130 | |||||||||
May 31, 2013 | |||||||||||||||||
Quoted Prices | Significant | Significant | Total | ||||||||||||||
in Active | Other | Unobservable | |||||||||||||||
Markets for | Observable | Inputs (Level 3) | |||||||||||||||
Identical | Inputs (Level 2) | ||||||||||||||||
Items (Level 1) | |||||||||||||||||
Liabilities: | |||||||||||||||||
Contingent consideration | $ | — | $ | — | $ | 2,047 | $ | 2,047 | |||||||||
Euro denominated long-term debt | — | 2,004 | — | 2,004 | |||||||||||||
Total liabilities | $ | — | $ | 2,004 | $ | 2,047 | $ | 4,051 | |||||||||
SHAREBASED_COMPENSATION_Tables
SHARE-BASED COMPENSATION (Tables) | 9 Months Ended | ||||||||||||||||
Feb. 28, 2014 | |||||||||||||||||
Transactions Involving Stock Options | ' | ||||||||||||||||
Transactions involving our stock options during the nine months ended February 28, 2014 and 2013 are summarized below: | |||||||||||||||||
Nine Months Ended | Nine Months Ended | ||||||||||||||||
February 28, 2014 | 28-Feb-13 | ||||||||||||||||
(unaudited) | (unaudited) | ||||||||||||||||
No. of | Weighted | No. of | Weighted | ||||||||||||||
Options | Average | Options | Average | ||||||||||||||
Exercise Price | Exercise Price | ||||||||||||||||
(in thousands) | (in thousands) | ||||||||||||||||
Shares under option, beginning of period | 1,052 | $ | 20.24 | 1,562 | $ | 18.95 | |||||||||||
Changes during the period: | |||||||||||||||||
Granted | — | $ | — | — | $ | — | |||||||||||
Exercised | (195 | ) | $ | 24.48 | (508 | ) | $ | 16.23 | |||||||||
Cancelled | — | $ | — | — | $ | — | |||||||||||
Expired | — | $ | — | — | $ | — | |||||||||||
Shares under option, end of period | 857 | $ | 19.28 | 1,054 | $ | 20.25 | |||||||||||
Exercisable at end of period | 857 | $ | 19.28 | 1,054 | $ | 20.25 | |||||||||||
Options Outstanding, Range of Exercise Prices and Remaining Contractual Lives | ' | ||||||||||||||||
For total options outstanding at February 28, 2014, the range of exercise prices and remaining contractual lives are as follows: | |||||||||||||||||
Range of Prices | No. of | Weighted | Weighted | ||||||||||||||
Options | Average | Average | |||||||||||||||
Exercise Price | Remaining | ||||||||||||||||
Life | |||||||||||||||||
(in thousands) | (in years) | ||||||||||||||||
$6.42 to $9.62 | 105 | $ | 9 | 1.2 | |||||||||||||
$9.63 to $12.82 | 152 | $ | 11.11 | 1.9 | |||||||||||||
$12.83 to $16.03 | 264 | $ | 14.51 | 2.3 | |||||||||||||
$16.04 to $32.05 | 336 | $ | 29.94 | 3.6 | |||||||||||||
857 | $ | 19.28 | 2.6 | ||||||||||||||
Transactions Involving Performance Awards | ' | ||||||||||||||||
Transactions involving our performance awards during the nine months ended February 28, 2014 and 2013 are summarized below: | |||||||||||||||||
Nine Months Ended | Nine Months Ended | ||||||||||||||||
February 28, 2014 | February 28, 2013 | ||||||||||||||||
(unaudited) | (unaudited) | ||||||||||||||||
No. of | Weighted | No. of | Weighted | ||||||||||||||
Performance | Average | Performance | Average | ||||||||||||||
Awards | Fair Value | Awards | Fair Value | ||||||||||||||
(in thousands) | (in thousands) | ||||||||||||||||
Performance awards, beginning of period | 57 | $ | 25.45 | 65 | $ | 21.86 | |||||||||||
Changes during the period: | |||||||||||||||||
Granted | 17 | $ | 36.4 | 19 | $ | 32.89 | |||||||||||
Vested and settled | (24 | ) | $ | 22.65 | (27 | ) | $ | 22.04 | |||||||||
Cancelled | — | $ | — | — | $ | — | |||||||||||
Performance awards, end of period | 50 | $ | 30.63 | 57 | $ | 25.45 | |||||||||||
Transactions Involving Stock Units and Director Stock Grants | ' | ||||||||||||||||
Transactions involving our stock units and director stock grants during the nine months ended February 28, 2014 and 2013 are summarized below: | |||||||||||||||||
Nine Months Ended | Nine Months Ended | ||||||||||||||||
February 28, 2014 | February 28, 2013 | ||||||||||||||||
(unaudited) | (unaudited) | ||||||||||||||||
No. of Stock | Weighted | No. of Stock | Weighted | ||||||||||||||
Units | Average | Units | Average | ||||||||||||||
Fair Value | Fair Value | ||||||||||||||||
(in thousands) | (in thousands) | ||||||||||||||||
Stock and stock units, beginning of period | 329 | $ | 26.07 | 342 | $ | 21.73 | |||||||||||
Changes during the period: | |||||||||||||||||
Granted | 136 | $ | 36.71 | 141 | $ | 32.81 | |||||||||||
Vested and settled | (138 | ) | $ | 24.34 | (142 | ) | $ | 22.54 | |||||||||
Cancelled | (16 | ) | $ | 27.94 | (8 | ) | $ | 22.4 | |||||||||
Stock and stock units, end of period | 311 | $ | 31.39 | 333 | $ | 26.07 | |||||||||||
OTHER_COMPREHENSIVE_INCOME_Tab
OTHER COMPREHENSIVE INCOME (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||||||
Feb. 28, 2014 | |||||||||||||||||||||||||||||||||
Summary of Changes in Other Comprehensive Income Included Within Shareholders' Equity | ' | ||||||||||||||||||||||||||||||||
A summary of changes in other comprehensive income included within shareholders’ equity is as follows (in thousands): | |||||||||||||||||||||||||||||||||
Nine Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||
28-Feb-14 | 28-Feb-13 | ||||||||||||||||||||||||||||||||
(unaudited) | (unaudited) | ||||||||||||||||||||||||||||||||
Foreign | Foreign | Tax | Total | Foreign | Foreign | Tax | Total | ||||||||||||||||||||||||||
Currency | Currency | Provision | Currency | Currency | Provision | ||||||||||||||||||||||||||||
Translation | Hedge | Translation | Hedge | ||||||||||||||||||||||||||||||
Adjustments | Adjustments | ||||||||||||||||||||||||||||||||
Balance, beginning of period | $ | (3,532 | ) | $ | 2,004 | $ | (261 | ) | $ | (1,789 | ) | $ | (4,593 | ) | $ | 2,678 | $ | (672 | ) | $ | (2,587 | ) | |||||||||||
Other comprehensive income before tax | (2,925 | ) | (856 | ) | 1,944 | (1,837 | ) | 2,305 | (791 | ) | 218 | 1,732 | |||||||||||||||||||||
Non-controlling interest | 5 | — | — | 5 | (23 | ) | — | — | (23 | ) | |||||||||||||||||||||||
Balance, end of period | $ | (6,452 | ) | $ | 1,148 | $ | 1,683 | $ | (3,621 | ) | $ | (2,311 | ) | $ | 1,887 | $ | (454 | ) | $ | (878 | ) | ||||||||||||
Related Tax Effects Allocated to Each Component of Other Comprehensive Income | ' | ||||||||||||||||||||||||||||||||
The following table represents the related tax effects allocated to each component of other comprehensive income (in thousands): | |||||||||||||||||||||||||||||||||
Nine Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||
28-Feb-14 | February 28, 2013 | ||||||||||||||||||||||||||||||||
(unaudited) | (unaudited) | ||||||||||||||||||||||||||||||||
Gross | Tax | Net | Gross | Tax | Net | ||||||||||||||||||||||||||||
Amount | Effect | Amount | Amount | Effect | Amount | ||||||||||||||||||||||||||||
Foreign currency translation adjustments | $ | (2,925 | ) | $ | 1,617 | $ | (1,308 | ) | $ | 2,305 | $ | (91 | ) | $ | 2,214 | ||||||||||||||||||
Foreign currency hedge | (856 | ) | 327 | (529 | ) | (791 | ) | 309 | (482 | ) | |||||||||||||||||||||||
Total | $ | (3,781 | ) | $ | 1,944 | $ | (1,837 | ) | $ | 1,514 | $ | 218 | $ | 1,732 | |||||||||||||||||||
ENTITY_WIDE_DISCLOSURES_Tables
ENTITY WIDE DISCLOSURES (Tables) | 9 Months Ended | ||||||||||||||||
Feb. 28, 2014 | |||||||||||||||||
Segment Data for our Three Operating Segment | ' | ||||||||||||||||
Segment data for our three operating segments are as follows (in thousands): | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
February 28, | February 28, | February 28, | February 28, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||||||||||
Revenues: | |||||||||||||||||
IHT | $ | 85,149 | $ | 81,227 | $ | 290,409 | $ | 272,372 | |||||||||
MS | 63,440 | 59,513 | 200,196 | 201,011 | |||||||||||||
Quest | 14,647 | 10,235 | 47,435 | 39,732 | |||||||||||||
Total | $ | 163,236 | $ | 150,975 | $ | 538,040 | $ | 513,115 | |||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
February 28, | February 28, | February 28, | February 28, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||||||||||
Operating income: | |||||||||||||||||
IHT | $ | 3,783 | $ | 4,439 | $ | 31,666 | $ | 30,411 | |||||||||
MS | 2,939 | 3,346 | 17,120 | 21,049 | |||||||||||||
Quest | 1,170 | (62 | ) | 5,986 | 5,944 | ||||||||||||
Corporate and shared support services | (6,892 | ) | (7,114 | ) | (21,786 | ) | (20,931 | ) | |||||||||
Total | $ | 1,000 | $ | 609 | $ | 32,986 | $ | 36,473 | |||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
February 28, | February 28, | February 28, | February 28, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||||||||||
Capital expenditures: | |||||||||||||||||
IHT | $ | 2,187 | $ | 1,398 | $ | 5,602 | $ | 6,253 | |||||||||
MS | 1,503 | 1,654 | 4,694 | 6,266 | |||||||||||||
Quest | 582 | 2,439 | 3,257 | 3,840 | |||||||||||||
Corporate and shared support services | 5,867 | 658 | 10,205 | 2,444 | |||||||||||||
Total | $ | 10,139 | $ | 6,149 | $ | 23,758 | $ | 18,803 | |||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
February 28, | February 28, | February 28, | February 28, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||||||||||
Depreciation and amortization: | |||||||||||||||||
IHT | $ | 1,936 | $ | 1,866 | $ | 5,947 | $ | 5,704 | |||||||||
MS | 1,801 | 1,771 | 5,391 | 5,165 | |||||||||||||
Quest | 1,343 | 1,038 | 4,033 | 3,193 | |||||||||||||
Corporate and shared support services | 205 | 125 | 605 | 392 | |||||||||||||
Total | $ | 5,285 | $ | 4,800 | $ | 15,976 | $ | 14,454 | |||||||||
Segment Reporting of Revenues and Total Assets | ' | ||||||||||||||||
Revenues and total assets in the United States and other countries are as follows (in thousands): | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
February 28, | February 28, | February 28, | February 28, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||||||||||
Revenues: | |||||||||||||||||
United States | $ | 120,916 | $ | 116,155 | $ | 382,322 | $ | 366,397 | |||||||||
Canada | 22,267 | 19,946 | 93,621 | 98,647 | |||||||||||||
Europe | 10,448 | 8,220 | 31,079 | 23,586 | |||||||||||||
Other foreign countries | 9,605 | 6,654 | 31,018 | 24,485 | |||||||||||||
Total | $ | 163,236 | $ | 150,975 | $ | 538,040 | $ | 513,115 | |||||||||
February 28, 2014 | May 31, 2013 | ||||||||||||||||
(unaudited) | |||||||||||||||||
Total assets: | |||||||||||||||||
United States | $ | 339,751 | $ | 334,579 | |||||||||||||
Canada | 63,124 | 68,164 | |||||||||||||||
Europe | 39,912 | 35,734 | |||||||||||||||
Other foreign countries | 24,710 | 21,726 | |||||||||||||||
Total | $ | 467,497 | $ | 460,203 | |||||||||||||
Estimated_Useful_Lives_of_Asse
Estimated Useful Lives of Assets (Detail) | 9 Months Ended |
Feb. 28, 2014 | |
Buildings | Minimum | ' |
Property, Plant and Equipment [Line Items] | ' |
Estimated useful lives of the assets | '20 years |
Buildings | Maximum | ' |
Property, Plant and Equipment [Line Items] | ' |
Estimated useful lives of the assets | '40 years |
Leasehold improvements | Minimum | ' |
Property, Plant and Equipment [Line Items] | ' |
Estimated useful lives of the assets | '2 years |
Leasehold improvements | Maximum | ' |
Property, Plant and Equipment [Line Items] | ' |
Estimated useful lives of the assets | '15 years |
Machinery and equipment | Minimum | ' |
Property, Plant and Equipment [Line Items] | ' |
Estimated useful lives of the assets | '2 years |
Machinery and equipment | Maximum | ' |
Property, Plant and Equipment [Line Items] | ' |
Estimated useful lives of the assets | '12 years |
Furniture and fixtures | Minimum | ' |
Property, Plant and Equipment [Line Items] | ' |
Estimated useful lives of the assets | '2 years |
Furniture and fixtures | Maximum | ' |
Property, Plant and Equipment [Line Items] | ' |
Estimated useful lives of the assets | '10 years |
Computers and computer software | Minimum | ' |
Property, Plant and Equipment [Line Items] | ' |
Estimated useful lives of the assets | '2 years |
Computers and computer software | Maximum | ' |
Property, Plant and Equipment [Line Items] | ' |
Estimated useful lives of the assets | '5 years |
Automobiles | Minimum | ' |
Property, Plant and Equipment [Line Items] | ' |
Estimated useful lives of the assets | '2 years |
Automobiles | Maximum | ' |
Property, Plant and Equipment [Line Items] | ' |
Estimated useful lives of the assets | '5 years |
Recovered_Sheet1
Summary of Significant Accounting Policies and Practices - Additional Information (Detail) (USD $) | 3 Months Ended | 9 Months Ended | |||||
Feb. 28, 2014 | Feb. 28, 2013 | Feb. 28, 2014 | Feb. 28, 2013 | Jul. 01, 2013 | 31-May-13 | Nov. 03, 2010 | |
Quest Integrity | |||||||
Significant Accounting Policies [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Excess of Market capitalization over carrying value of net assets | ' | ' | ' | ' | $500,000,000 | ' | ' |
Excess of Market capitalization over carrying value of net assets, percentage | ' | ' | ' | ' | 170.00% | ' | ' |
Goodwill | 114,114,000 | ' | 114,114,000 | ' | ' | 103,466,000 | ' |
Purchase percentage of quest | ' | ' | ' | ' | ' | ' | 95.00% |
Remaining purchase consideration based upon future financial performance | ' | ' | ' | ' | ' | ' | 5.00% |
Deferred tax assets recovery from future taxable income percentage | ' | ' | 50.00% | ' | ' | ' | ' |
Workers compensation our self-insured retention | ' | ' | 1,000,000 | ' | ' | ' | ' |
Automobile liability self-insured retention | ' | ' | 500,000 | ' | ' | ' | ' |
General liability claims we have an effective self-insured retention | ' | ' | 3,000,000 | ' | ' | ' | ' |
Medical claims, our self-insured retention | ' | ' | 175,000 | ' | ' | ' | ' |
Environmental liability claims, our self-insured retention | ' | ' | 500,000 | ' | ' | ' | ' |
Amount of earned but unbilled revenue included in accounts receivable | $28,186,000 | ' | $28,186,000 | ' | ' | $25,516,000 | ' |
Single customer accounts consolidated revenue | ' | ' | 10.00% | ' | ' | ' | ' |
Options to purchase shares of common stock excluded from the computation of diluted earnings per share | 0 | 0 | 0 | 1,000 | ' | ' | ' |
Summary_of_Goodwill_Detail
Summary of Goodwill (Detail) (USD $) | 9 Months Ended |
In Thousands, unless otherwise specified | Feb. 28, 2014 |
Goodwill [Line Items] | ' |
Balance at May 31, 2013 | $103,466 |
Acquisitions | 11,336 |
Foreign currency adjustments | -688 |
Balance at February 28, 2014 | 114,114 |
MS Segment | ' |
Goodwill [Line Items] | ' |
Balance at May 31, 2013 | 19,130 |
Foreign currency adjustments | 611 |
Balance at February 28, 2014 | 19,741 |
IHT Segment | ' |
Goodwill [Line Items] | ' |
Balance at May 31, 2013 | 53,800 |
Acquisitions | 11,336 |
Foreign currency adjustments | -1,448 |
Balance at February 28, 2014 | 63,688 |
Quest Segment | ' |
Goodwill [Line Items] | ' |
Balance at May 31, 2013 | 30,536 |
Foreign currency adjustments | 149 |
Balance at February 28, 2014 | $30,685 |
Information_Regarding_Change_i
Information Regarding Change in Carrying Value of Non-Controlling Interest (Detail) (USD $) | 40 Months Ended | |
In Thousands, unless otherwise specified | Feb. 28, 2014 | 31-May-13 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Fair value of non-controlling interest at November 3, 2010 | $4,917 | $5,384 |
Income attributable to non-controlling interest | 652 | ' |
Other comprehensive income attributable to non-controlling interest | -12 | ' |
Carrying value of non-controlling interest at February 28, 2014 | $5,557 | $5,384 |
Amounts_Used_In_Basic_and_Dilu
Amounts Used In Basic and Diluted Earnings Per Share (Detail) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Feb. 28, 2014 | Feb. 28, 2013 | Feb. 28, 2014 | Feb. 28, 2013 |
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ' | ' | ' | ' |
Weighted-average number of basic shares outstanding | 20,384 | 20,387 | 20,432 | 20,104 |
Stock options, stock units and performance awards | 614 | 753 | 643 | 770 |
Assumed conversion of non-controlling interest | 195 | 171 | 209 | 204 |
Total shares and dilutive securities | 21,193 | 21,311 | 21,284 | 21,078 |
Acquisitions_Additional_Inform
Acquisitions - Additional Information (Detail) (USD $) | 9 Months Ended | 1 Months Ended | 12 Months Ended | ||
Feb. 28, 2014 | Jul. 31, 2013 | Nov. 30, 2013 | Sep. 30, 2012 | 31-May-13 | |
Global Ascent, Inc. | TCI Services, Inc. | TCI Services, Inc. | Specialty Remote Digital Video Inspection Company | ||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' |
Business acquisition, purchase price | ' | $13,800,000 | ' | $21,200,000 | $3,000,000 |
Business acquisition, allocated to goodwill and intangible assets | ' | 12,600,000 | ' | 16,400,000 | ' |
Gain on revaluation of contingent consideration | ($2,138,000) | ' | $2,100,000 | ' | ' |
Summary_of_Accounts_Receivable
Summary of Accounts Receivable (Detail) (USD $) | Feb. 28, 2014 | 31-May-13 |
In Thousands, unless otherwise specified | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ' | ' |
Unbilled revenues | $28,186 | $25,516 |
Allowance for doubtful accounts | -5,343 | -5,438 |
Total | 157,988 | 172,108 |
Trade accounts receivable | ' | ' |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ' | ' |
Trade accounts receivable | $135,145 | $152,030 |
Summary_of_Inventory_Detail
Summary of Inventory (Detail) (USD $) | Feb. 28, 2014 | 31-May-13 |
In Thousands, unless otherwise specified | ||
Inventory [Line Items] | ' | ' |
Raw materials | $3,056 | $3,460 |
Work in progress | 893 | 845 |
Finished goods | 22,355 | 22,202 |
Inventory, Net | $26,304 | $26,507 |
Summary_of_Property_Plant_and_
Summary of Property, Plant and Equipment (Detail) (USD $) | Feb. 28, 2014 | 31-May-13 |
In Thousands, unless otherwise specified | ||
Property, Plant and Equipment [Line Items] | ' | ' |
Property, Plant and Equipment, Gross | $202,455 | $179,990 |
Accumulated depreciation and amortization | -117,063 | -105,051 |
Property, plant, and equipment, net | 85,392 | 74,939 |
Land | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property, Plant and Equipment, Gross | 3,067 | 3,108 |
Buildings and leasehold improvements | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property, Plant and Equipment, Gross | 19,345 | 18,445 |
Machinery and equipment | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property, Plant and Equipment, Gross | 148,120 | 137,439 |
Furniture and fixtures | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property, Plant and Equipment, Gross | 4,809 | 4,469 |
Capitalized ERP System Development Costs | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property, Plant and Equipment, Gross | 2,677 | ' |
Computers and computer software | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property, Plant and Equipment, Gross | 9,581 | 8,871 |
Automobiles | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property, Plant and Equipment, Gross | 3,660 | 3,842 |
Construction in progress | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property, Plant and Equipment, Gross | $11,196 | $3,816 |
Property_Plant_and_Equipment_A
Property, Plant and Equipment - Additional Information (Detail) (USD $) | Feb. 28, 2014 | 31-May-13 | Feb. 28, 2014 | Nov. 30, 2013 | Feb. 28, 2014 | Nov. 30, 2013 | Nov. 30, 2013 |
Alvin Texas | Capitalized ERP System Development Costs | Capitalized ERP System Development Costs | Capitalized ERP System Development Costs | Capitalized ERP System Development Costs | |||
Minimum | Maximum | ||||||
Property, Plant and Equipment [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Expected total future capital costs associated with the implementation | ' | ' | ' | ' | ' | $10,000,000 | $12,000,000 |
Project implementation period | ' | ' | ' | '2 years | ' | ' | ' |
Construction in progress, costs | 202,455,000 | 179,990,000 | 7,400,000 | ' | 2,677,000 | ' | ' |
Estimated cost of project | ' | ' | $9,000,000 | ' | ' | ' | ' |
Assets_Held_for_Sale_Additiona
Assets Held for Sale - Additional Information (Detail) (USD $) | Feb. 28, 2014 |
In Millions, unless otherwise specified | acre |
Property, Plant, and Equipment Disclosure [Line Items] | ' |
Land Available for Sale | $5.20 |
Purchase land planned to construct future facilities in area | 50 |
Summary_of_Intangible_Assets_D
Summary of Intangible Assets (Detail) (USD $) | Feb. 28, 2014 | 31-May-13 |
In Thousands, unless otherwise specified | ||
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Gross Carrying Amount | $36,105 | $34,989 |
Accumulated Amortization | -11,715 | -9,039 |
Net Carrying Amount | 24,390 | 25,950 |
Customer relationships | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Gross Carrying Amount | 22,355 | 21,418 |
Accumulated Amortization | -6,059 | -4,168 |
Net Carrying Amount | 16,296 | 17,250 |
Non-compete agreements | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Gross Carrying Amount | 3,630 | 3,701 |
Accumulated Amortization | -3,352 | -3,232 |
Net Carrying Amount | 278 | 469 |
Trade names | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Gross Carrying Amount | 4,325 | 4,075 |
Accumulated Amortization | -641 | -424 |
Net Carrying Amount | 3,684 | 3,651 |
Technology | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Gross Carrying Amount | 5,112 | 5,112 |
Accumulated Amortization | -1,565 | -1,166 |
Net Carrying Amount | 3,547 | 3,946 |
Licenses | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Gross Carrying Amount | 683 | 683 |
Accumulated Amortization | -98 | -49 |
Net Carrying Amount | $585 | $634 |
Intangible_Assets_Additional_I
Intangible Assets - Additional Information (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Feb. 28, 2014 | Feb. 28, 2013 | Feb. 28, 2014 | Feb. 28, 2013 |
Finite-Lived Intangible Assets [Line Items] | ' | ' | ' | ' |
Amortization expense | $0.90 | $0.80 | $2.80 | $2.50 |
Summary_of_Other_Accrued_Liabi
Summary of Other Accrued Liabilities (Detail) (USD $) | Feb. 28, 2014 | 31-May-13 |
In Thousands, unless otherwise specified | ||
Schedule of Accrued Liabilities [Line Items] | ' | ' |
Payroll and other compensation expenses | $22,806 | $32,093 |
Insurance accruals | 5,330 | 5,385 |
Property, sales and other non-income related taxes | 1,650 | 2,385 |
Other | 9,474 | 9,302 |
Total | $39,260 | $49,165 |
Recovered_Sheet2
Long-Term Debt, Derivatives and Letters of Credit - Additional Information (Detail) | 12 Months Ended | 9 Months Ended | 12 Months Ended | ||||
In Millions, unless otherwise specified | 31-May-12 | Feb. 28, 2014 | Feb. 28, 2014 | Feb. 28, 2014 | 31-May-12 | Feb. 28, 2014 | 31-May-13 |
USD ($) | Economic Hedge | Economic Hedge | Eurodollar Libor Rate | Eurodollar Libor Rate | Standby Letters of Credit | Standby Letters of Credit | |
USD ($) | EUR (€) | USD ($) | USD ($) | ||||
Line of Credit Facility [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Borrowing capacity | $150 | ' | ' | ' | ' | ' | ' |
Basis spread on LIBOR Rate | ' | ' | ' | 1.75% | ' | ' | ' |
Maturity period | 'July 2016 | ' | ' | ' | ' | ' | ' |
Debt issuance costs | 0.8 | ' | ' | ' | ' | ' | ' |
Commitment fees on unused borrowing capacity | ' | ' | ' | ' | 0.30% | ' | ' |
Outstanding letter of credit | ' | ' | ' | ' | ' | 13.6 | 13.1 |
Borrowing under credit facility | ' | $16.90 | € 12.30 | ' | ' | ' | ' |
Amounts_Recognized_in_Other_Co
Amounts Recognized in Other Comprehensive Income, and Reclassified into Income (Detail) (Euro denominated long-term debt, USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Feb. 28, 2014 | Feb. 28, 2013 | Feb. 28, 2014 | Feb. 28, 2013 |
Euro denominated long-term debt | ' | ' | ' | ' |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' | ' | ' |
Gain (Loss) Recognized in Other Comprehensive Income | ($94) | ($143) | ($856) | ($791) |
Gain (Loss) Reclassified from Other Comprehensive Income to Earnings | ' | ' | ' | ' |
Fair_Value_Totals_and_Balance_
Fair Value Totals and Balance Sheet Classification for Derivatives Designated as Hedges (Detail) (Long-term Debt, Designated as Hedging Instrument, Euro denominated long-term debt, USD $) | Feb. 28, 2014 | 31-May-13 |
In Thousands, unless otherwise specified | ||
Long-term Debt | Designated as Hedging Instrument | Euro denominated long-term debt | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Fair value liability | $1,148 | $2,004 |
Financial_Assets_and_Liabiliti
Financial Assets and Liabilities that are Accounted For at Fair Value on Recurring Basis (Detail) (Fair Value, Measurements, Recurring, USD $) | Feb. 28, 2014 | 31-May-13 |
In Thousands, unless otherwise specified | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Net liabilities | $4,130 | $4,051 |
Contingent Consideration Liabilities | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Net liabilities | 2,982 | 2,047 |
Euro denominated long-term debt | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Net liabilities | 1,148 | 2,004 |
Significant Other Observable Inputs (Level 2) | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Net liabilities | 1,148 | 2,004 |
Significant Other Observable Inputs (Level 2) | Euro denominated long-term debt | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Net liabilities | 1,148 | 2,004 |
Significant Unobservable Inputs (Level 3) | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Net liabilities | 2,982 | 2,047 |
Significant Unobservable Inputs (Level 3) | Contingent Consideration Liabilities | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Net liabilities | $2,982 | $2,047 |
ShareBased_Compensation_Additi
Share-Based Compensation - Additional Information (Detail) (USD $) | 9 Months Ended | |
In Millions, except Share data, unless otherwise specified | Feb. 28, 2014 | Feb. 28, 2013 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Awards outstanding to officers, directors and key employees | 1,200,000 | ' |
Total number of shares cumulatively authorized to be issued under our stock incentive plans | 7,120,000 | ' |
Share-based compensation | $3.20 | $3 |
Tax benefit related to share-based compensation | 1.1 | 3 |
Unrecognized compensation expense related to share-based compensation | 9.7 | ' |
Remaining weighted-average period | '2 years 10 months 24 days | ' |
Weighted-average remaining contractual life of Options exercisable | '2 years 7 months 6 days | ' |
Stock Options | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Share-based compensation | 0 | 0 |
Award vesting period | '4 years | ' |
Stock option year term | '10 years | ' |
Performance Shares | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Share-based compensation | 0.4 | 0.4 |
Award vesting period | '4 years | ' |
Stock And Stock Units | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Share-based compensation | $2.80 | $2.60 |
Award vesting period | '4 years | ' |
Summary_of_Transactions_Involv
Summary of Transactions Involving Stock Options (Detail) (USD $) | 9 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Feb. 28, 2014 | Feb. 28, 2013 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Shares under option, beginning of period, No. of Options | 1,052 | 1,562 |
Granted, No. of Options | ' | ' |
Exercised, No. of Options | -195 | -508 |
Cancelled, No. of Options | ' | ' |
Expired, No. of Options | ' | ' |
Shares under option, end of period, No. of Options | 857 | 1,054 |
Exercisable at end of period, No. of Options | 857 | 1,054 |
Shares under option, beginning of period, Weighted Average Exercise Price | $20.24 | $18.95 |
Granted, Weighted Average Exercise Price | ' | ' |
Exercised, Weighted Average Exercise Price | $24.48 | $16.23 |
Cancelled, Weighted Average Exercise Price | ' | ' |
Expired, Weighted Average Exercise Price | ' | ' |
Shares under option, end of period, Weighted Average Exercise Price | $19.28 | $20.25 |
Exercisable at end of period, Weighted Average Exercise Price | $19.28 | $20.25 |
Total_Options_Outstanding_Rang
Total Options Outstanding, Range of Exercise Prices and Remaining Contractual Lives (Detail) (USD $) | 6 Months Ended |
In Thousands, except Per Share data, unless otherwise specified | Nov. 30, 2013 |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ' |
No. of Options | 857 |
Weighted Average Exercise Price | $19.28 |
Weighted Average Remaining Life | '2 years 7 months 6 days |
$6.42 to $9.62 | ' |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ' |
Range of Prices, Lower limit | $6.42 |
Range of Prices, Upper limit | $9.62 |
No. of Options | 105 |
Weighted Average Exercise Price | $9 |
Weighted Average Remaining Life | '1 year 2 months 12 days |
$9.63 to $12.82 | ' |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ' |
Range of Prices, Lower limit | $9.63 |
Range of Prices, Upper limit | $12.82 |
No. of Options | 152 |
Weighted Average Exercise Price | $11.11 |
Weighted Average Remaining Life | '1 year 10 months 24 days |
$12.83 to $16.03 | ' |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ' |
Range of Prices, Lower limit | $12.83 |
Range of Prices, Upper limit | $16.03 |
No. of Options | 264 |
Weighted Average Exercise Price | $14.51 |
Weighted Average Remaining Life | '2 years 3 months 18 days |
$16.04 to $32.05 | ' |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ' |
Range of Prices, Lower limit | $16.04 |
Range of Prices, Upper limit | $32.05 |
No. of Options | 336 |
Weighted Average Exercise Price | $29.94 |
Weighted Average Remaining Life | '3 years 7 months 6 days |
Summary_of_Transactions_Involv1
Summary of Transactions Involving Performance Awards (Detail) (Performance Shares, USD $) | 9 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Feb. 28, 2014 | Feb. 28, 2013 |
Performance Shares | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Performance awards, beginning of year, No. of Performance Awards | 57 | 65 |
Granted, No. of Performance Awards | 17 | 19 |
Vested and settled, No. of Performance Awards | -24 | -27 |
Cancelled, No. of Performance Awards | ' | ' |
Performance awards, end of year, No. of Performance Awards | 50 | 57 |
Performance awards, beginning of year, Weighted Average Fair Value | $25.45 | $21.86 |
Granted, Weighted Average Fair Value | $36.40 | $32.89 |
Vested and settled, Weighted Average Fair Value | $22.65 | $22.04 |
Cancelled, Weighted Average Fair Value | ' | ' |
Performance awards, end of year, Weighted Average Fair Value | $30.63 | $25.45 |
Summary_of_Transactions_Involv2
Summary of Transactions Involving Stock Units and Director Stock Grants (Detail) (Stock And Stock Units, USD $) | 9 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Feb. 28, 2014 | Feb. 28, 2013 |
Stock And Stock Units | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Performance awards, beginning of year, No. of Performance Awards | 329 | 342 |
Granted, No. of Stock Units | 136 | 141 |
Vested and settled, No. of Stock Units | -138 | -142 |
Cancelled, No. of Stock Units | -16 | -8 |
Performance awards, end of year, No. of Performance Awards | 311 | 333 |
Performance awards, beginning of year, Weighted Average Fair Value | $26.07 | $21.73 |
Granted, Weighted Average Fair Value | $36.71 | $32.81 |
Vested and settled, Weighted Average Fair Value | $24.34 | $22.54 |
Cancelled, Weighted Average Fair Value | $27.94 | $22.40 |
Performance awards, end of year, Weighted Average Fair Value | $31.39 | $26.07 |
Summary_of_Changes_in_Other_Co
Summary of Changes in Other Comprehensive Income Included Within Shareholders Equity (Detail) (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Feb. 28, 2014 | Feb. 28, 2013 |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ' | ' |
Balance, beginning of period | ($1,789) | ($2,587) |
Other comprehensive income before tax | -1,837 | 1,732 |
Non-controlling interest | 5 | -23 |
Balance, end of period | -3,621 | -878 |
Foreign Currency Translation Adjustments | ' | ' |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ' | ' |
Balance, beginning of period | -3,532 | -4,593 |
Other comprehensive income before tax | -2,925 | 2,305 |
Non-controlling interest | 5 | -23 |
Balance, end of period | -6,452 | -2,311 |
Foreign Currency Hedges | ' | ' |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ' | ' |
Balance, beginning of period | 2,004 | 2,678 |
Other comprehensive income before tax | -856 | -791 |
Balance, end of period | 1,148 | 1,887 |
Tax Provision | ' | ' |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ' | ' |
Balance, beginning of period | -261 | -672 |
Other comprehensive income before tax | 1,944 | 218 |
Balance, end of period | $1,683 | ($454) |
Related_Tax_Effects_Allocated_
Related Tax Effects Allocated to Each Components of Other Comprehensive Income (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Feb. 28, 2014 | Feb. 28, 2013 | Feb. 28, 2014 | Feb. 28, 2013 |
Components Of Other Comprehensive Income Loss [Line Items] | ' | ' | ' | ' |
Foreign currency translation adjustments, Gross Amount | ($2,715) | ($1,985) | ($2,925) | $2,305 |
Foreign currency translation adjustments, Tax Effect | ' | ' | 1,617 | -91 |
Foreign currency translation adjustments, Net Amount | ' | ' | -1,308 | 2,214 |
Foreign currency hedge, Gross Amount | ' | ' | -856 | -791 |
Foreign currency hedge, Tax Effect | ' | ' | 327 | 309 |
Foreign currency hedge, Net Amount | ' | ' | -529 | -482 |
Other Comprehensive Income (Loss), before Tax, Total | ' | ' | -3,781 | 1,514 |
Total other comprehensive income, Tax Affect | 1,111 | 594 | 1,944 | 218 |
Total other comprehensive income, Net Amount | ' | ' | ($1,837) | $1,732 |
Commitments_and_Contingencies_
Commitments and Contingencies - Additional Information (Detail) (USD $) | Feb. 28, 2014 |
Commitments and Contingencies Disclosure [Line Items] | ' |
Insurance coverage subject to deductible limit | $250,000 |
Entity_Wide_Disclosures_Additi
Entity Wide Disclosures - Additional Information (Detail) | 9 Months Ended |
Feb. 28, 2014 | |
Segment | |
Segment Reporting Information [Line Items] | ' |
Number of operating segments | 3 |
Segment_Data_for_our_Three_Ope
Segment Data for our Three Operating Segment (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Feb. 28, 2014 | Feb. 28, 2013 | Feb. 28, 2014 | Feb. 28, 2013 |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Revenues | $163,236 | $150,975 | $538,040 | $513,115 |
Operating income | 1,000 | 609 | 32,986 | 36,473 |
Capital expenditures | 10,139 | 6,149 | 23,758 | 18,803 |
Depreciation and amortization | 5,285 | 4,800 | 15,976 | 14,454 |
Operating Segments | IHT Segment | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Revenues | 85,149 | 81,227 | 290,409 | 272,372 |
Operating income | 3,783 | 4,439 | 31,666 | 30,411 |
Capital expenditures | 2,187 | 1,398 | 5,602 | 6,253 |
Depreciation and amortization | 1,936 | 1,866 | 5,947 | 5,704 |
Operating Segments | MS Segment | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Revenues | 63,440 | 59,513 | 200,196 | 201,011 |
Operating income | 2,939 | 3,346 | 17,120 | 21,049 |
Capital expenditures | 1,503 | 1,654 | 4,694 | 6,266 |
Depreciation and amortization | 1,801 | 1,771 | 5,391 | 5,165 |
Operating Segments | Quest Segment | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Revenues | 14,647 | 10,235 | 47,435 | 39,732 |
Operating income | 1,170 | -62 | 5,986 | 5,944 |
Capital expenditures | 582 | 2,439 | 3,257 | 3,840 |
Depreciation and amortization | 1,343 | 1,038 | 4,033 | 3,193 |
Corporate and shared support services | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Operating income | -6,892 | -7,114 | -21,786 | -20,931 |
Capital expenditures | 5,867 | 658 | 10,205 | 2,444 |
Depreciation and amortization | $205 | $125 | $605 | $392 |
Revenues_and_Total_Assets_in_U
Revenues and Total Assets in United States and Other Countries (Detail) (USD $) | 3 Months Ended | 9 Months Ended | |||
In Thousands, unless otherwise specified | Feb. 28, 2014 | Feb. 28, 2013 | Feb. 28, 2014 | Feb. 28, 2013 | 31-May-13 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' | ' | ' | ' |
Revenues | $163,236 | $150,975 | $538,040 | $513,115 | ' |
Assets | 467,497 | ' | 467,497 | ' | 460,203 |
United States | ' | ' | ' | ' | ' |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' | ' | ' | ' |
Revenues | 120,916 | 116,155 | 382,322 | 366,397 | ' |
Assets | 339,751 | ' | 339,751 | ' | 334,579 |
Canada | ' | ' | ' | ' | ' |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' | ' | ' | ' |
Revenues | 22,267 | 19,946 | 93,621 | 98,647 | ' |
Assets | 63,124 | ' | 63,124 | ' | 68,164 |
Europe | ' | ' | ' | ' | ' |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' | ' | ' | ' |
Revenues | 10,448 | 8,220 | 31,079 | 23,586 | ' |
Assets | 39,912 | ' | 39,912 | ' | 35,734 |
Other Foreign Countries | ' | ' | ' | ' | ' |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' | ' | ' | ' |
Revenues | 9,605 | 6,654 | 31,018 | 24,485 | ' |
Assets | $24,710 | ' | $24,710 | ' | $21,726 |
Unconsolidated_Subsidiaries_Ad
Unconsolidated Subsidiaries - Additional Information (Detail) (USD $) | 9 Months Ended | |||
In Millions, unless otherwise specified | Feb. 28, 2014 | Feb. 28, 2013 | 31-May-13 | 31-May-08 |
Schedule of Equity Method Investments [Line Items] | ' | ' | ' | ' |
Percentage of ownership in joint venture | ' | ' | ' | 50.00% |
Investment in the net assets of the joint venture | $0 | ' | $1.80 | ' |
Equity Method Investment Unconsolidated Subsidiaries Sales Revenues | $8.50 | $11 | ' | ' |
Recovered_Sheet3
Venezuela's Highly Inflationary Economy - Additional Information (Detail) (USD $) | 3 Months Ended | 9 Months Ended | 3 Months Ended | |||||
Feb. 28, 2014 | Feb. 28, 2013 | Feb. 28, 2014 | Feb. 28, 2013 | Jan. 31, 2013 | Mar. 31, 2014 | Feb. 28, 2013 | Feb. 28, 2014 | |
Subsequent Event | Venezuela | Venezuela | ||||||
SICAD-2 | ||||||||
Investment in Country with High Inflationary Economy [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of consolidated revenues from small service location | ' | ' | 1.00% | ' | ' | ' | ' | ' |
Foreign currency exchange rate | ' | 6.3 | ' | 6.3 | 5.3 | 50 | ' | ' |
Recognized losses related to the Venezuelan currency | ($1,868,000) | ($729,000) | ($2,398,000) | ($917,000) | ' | ' | ($600,000) | ' |
Alternative state-run SICAD rate | 11.8 | ' | 11.8 | ' | ' | ' | ' | ' |
Net assets of Venezuelan subsidiary | ' | ' | ' | ' | ' | ' | ' | $2,400,000 |
Repurchase_of_Common_Stock_Add
Repurchase of Common Stock - Additional Information (Detail) (USD $) | 1 Months Ended | 6 Months Ended | 9 Months Ended |
In Millions, except Share data, unless otherwise specified | Oct. 31, 2013 | Nov. 30, 2013 | Feb. 28, 2014 |
Equity, Class of Treasury Stock [Line Items] | ' | ' | ' |
Stock Repurchase Program, Authorized Amount | $25 | ' | ' |
Stock Repurchased and Retired During Period, Shares | ' | 369,900 | 0 |
Stock Repurchased and Retired During Period, Value | ' | ' | 13.3 |
Prior Periods | ' | ' | ' |
Equity, Class of Treasury Stock [Line Items] | ' | ' | ' |
Stock Repurchased and Retired During Period, Shares | ' | ' | 89,569 |
Stock Repurchased and Retired During Period, Value | ' | ' | 1.3 |
Share Repurchase Plan | Common Stock | ' | ' | ' |
Equity, Class of Treasury Stock [Line Items] | ' | ' | ' |
Common stock share purchase, reduction | ' | ' | 0.1 |
Share Repurchase Plan | Additional Paid-in Capital | ' | ' | ' |
Equity, Class of Treasury Stock [Line Items] | ' | ' | ' |
Common stock share purchase, reduction | ' | ' | 2.2 |
Share Repurchase Plan | Retained Earnings | ' | ' | ' |
Equity, Class of Treasury Stock [Line Items] | ' | ' | ' |
Common stock share purchase, reduction | ' | ' | $12.30 |