1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_________________
FORM 8-K
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
May 23, 1997
TEAM, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Texas 0-9950 74-1765729
- ------------------------ ------------ --------------
(State or other juris- (Commission (IRS Employer
diction of incorporation File No.) Identification No.)
1019 South Hood Street
Alvin, Texas 77511
- -------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (281) 331-6154.
2
Item 2. Acquisition or Disposition of Assets.
Effective May 23, 1997, certain wholly-owned subsidiaries of Registrant sold
substantially all of the assets of the 801 Military Housing Projects to U.S.
National Housing Limited Partnership, an Alaska limited partnership ("Buyer").
The assets sold consist mainly of approximately 300 housing units for military
personnel in Pensacola, Florida, approximately 250 housing units for military
personnel in Fort Bragg, North Carolina, and approximately 150 housing units
for military personnel in Portales, New Mexico. The consideration given by
Buyer consisted of $3,200,000 in immediately available funds and the assumption
of the indebtedness remaining on each of the 801 Military Housing Projects.
The amount of the consideration for the sale of these assets was determined as
a result of arms-length negotiations and agreement between unrelated parties.
Item 7. Financial Statements and Exhibits.
(a) Financial Statements of Business Acquired
Not applicable.
(b) Pro Forma Financial Information
The following unaudited pro forma consolidated financial statements are filed
with this report:
Pro Forma Consolidated Balance Sheet as of February 28, 1997 ... Page F-1
Pro Forma Consolidated Statement of Earnings:
Year Ended May 31, 1996 ............................... Page F-2
Nine Months Ended February 28, 1997 ................... Page F-3
Notes to Pro Forma Consolidated Financial Statements ........... Page F-4
The following unaudited pro forma consolidated statements of earnings for the
year ended May 31, 1996 and the nine months ended February 28, 1997 give effect
to the disposition of substantially all of the assets of the Military Housing
Projects as if the sale and the resulting debt reduction occurred on June 1,
1995 and June 1, 1996, respectively. The following unaudited pro forma
consolidated balance sheet as of February 28, 1997 gives effect to the sale of
substantially all of the assets of the Military Housing Projects as if the sale
and the reduction of debt with the proceeds thereof occurred as of that date.
The pro forma financial information is presented for illustrative purposes and
is not indicative of either a) the results of Registrant's operations which
would have actually been obtained if the disposition had occurred on the dates
indicated, or b) the results of Registrant's operations which will be reported
in the future.
The pro forma statements of earnings do not reflect the anticipated loss on the
sale of the Military Housing Projects. The Company
3
treated the Military Housing Projects as a discontinued operation and,
accordingly, the loss is not part of the pro forma requirements.
(c) Exhibits
2.1 Agreement of Purchase and Sale, dated September 13, 1996, among
Registrant and Ft. Bragg 801, Inc. and Pensacola 801, Inc.
and Portales 801, Inc., collectively as Seller, and U.S.
National Housing, L.L.C. as Purchaser. (Registrant hereby
agrees to furnish supplementally to the Securities and
Exchange Commission upon request a copy of any omitted
Exhibit, all of which are listed on the last page of the
Agreement and Purchase of Sale.)
2.2 Assignment and Assumption Agreement, dated May 8, 1997, between
U.S. National Housing, LLC and U.S. National Housing Limited
Partnership.
2.3 First Amendment to Purchase and Sale Agreement, dated as of
May 8, 1997, among Registrant and Ft. Bragg 801, Inc. and
Pensacola 801, Inc. and Portales 801, Inc. and First American
Capital Corporation, collectively as Seller, and U.S. National
Housing Limited Partnership, as Purchaser.
3
4
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: June 6, 1997 TEAM, INC.
/s/ William A. Ryan
-----------------------------------------
By: William A. Ryan
Chairman of the Board,
Chief Executive Officer and
President
/s/ Margie E. Rogers
-----------------------------------------
By: Margie E. Rogers
Vice President, Treasurer
and Secretary
4
5
TEAM, INC. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED BALANCE SHEET
FEBRUARY 28, 1997
(UNAUDITED)
ASSETS TEAM, INC. PRO-FORMA PRO-FORMA
AND SUBSIDIARIES ADJUSTMENTS CONSOLIDATED
---------------- ----------- ------------
Current Assets:
Cash and cash equivalents 1,301,000 183,000 1,484,000
Receivables 7,742,000 0 7,742,000
Materials and supplies 6,034,000 0 6,034,000
Prepaid expenses & other current assets 750,000 0 750,000
----------- ----------- -----------
Total Current Assets 15,827,000 183,000 16,010,000
Net Assets of Discontinued Operations 2,990,000 (2,990,000) 0
Property, Plant and Equipment
Land and buildings 6,541,000 0 6,541,000
Machinery and equipment 11,505,000 0 11,505,000
----------- ----------- -----------
18,046,000 0 18,046,000
Less accumulated depreciation and amortization 12,231,000 0 12,231,000
----------- ----------- -----------
5,815,000 0 5,815,000
Other Assets 2,315,000 0 2,315,000
----------- ----------- -----------
26,947,000 (2,807,000) 24,140,000
=========== =========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Current portion of long-term debt 1,613,000 (1,294,000) 319,000
Accounts payable 941,000 0 941,000
Other accrued liabilities 2,973,000 137,000 3,110,000
Current income taxes payable 81,000 0 81,000
----------- ----------- -----------
Total Current Liabilities 5,608,000 (1,157,000) 4,451,000
Long-term Debt and Other 9,764,000 (1,650,000) 8,114,000
Stockholders' Equity:
Preferred stock, cumulative, par value $100
per share, 500,000 authorized, none issued 0 0 0
Common stock, par value $.30 per share,
10,000,000 authorized, 5,169,542 shares
issued 1,551,000 0 1,551,000
Additional capital 24,992,000 0 24,992,000
Accumulated deficit (14,871,000) 0 (14,871,000
Treasury stock at cost, 9,700 shares (97,000) 0 (97,000)
----------- ----------- -----------
Total Stockholders' Equity 11,575,000 0 11,575,000
----------- ----------- -----------
26,947,000 (2,807,000) 24,140,000
=========== =========== ===========
See notes to Pro Forma Consolidated Financial Statements
F-1
6
TEAM, INC. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF EARNINGS
YEAR ENDED MAY 31, 1996
(UNAUDITED)
TEAM, INC. MILITARY
AND HOUSING PRO-FORMA PRO-FORMA
SUBSIDIARIES PROJECTS ADJUSTMENTS CONSOLIDATED
------------ ------------- --------------- ----------------
Revenues:
Operating revenue $ 47,449,000 $ $ $ 47,449,000)
Military housing project lease revenue 5,036,000 (5,036,000) 0
------------ ------------ --------------- ----------------
52,485,000 (5,036,000) 0 47,449,000
Operating Costs and Expenses
Operating expenses 25,161,000 25,161,000
Selling, general and administrative expenses 23,446,000 23,446,000
Interest 1,188,000 (252,000) 936,000
Writedown of assets 7,697,000 7,697,000
------------ ------------ --------------- ----------------
57,492,000 0 (252,000) 57,240,000
Military Housing Project Costs and Expenses
Operating expenses 2,198,000 (2,198,000) 0
Selling, general and administrative expenses 289,000 (289,000) 0
Interest 3,359,000 (3,359,000) 0
------------ ------------ --------------- ----------------
5,846,000 (5,846,000) 0 0
Earnings (Loss) from Continuing Operations
Before Income Taxes (10,853,000) 810,000 252,000 (9,791,000)
Provision for Income Taxes (1,575,000) 275,000 86,000 (1,214,000)
Earnings (Loss) from Continuing
------------ ------------ --------------- ----------------
Operations Net of Income Taxes $ (9,278,000) $ 535,000 $ 166,000 $ (8,577,000)
============ ============ =============== ================
Net Earnings (Loss) Per Share:
Earnings (Loss) from Continuing
Operations $ (1.80) $ (1.66)
============ ================
Weighted Average Number of Shares
Outstanding 5,161,000 5,161,000
============ ================
See notes to Pro Forma Consolidated Financial Statements
F-2
7
TEAM, INC. AND SUBSIDIARIES
PROFORMA CONSOLIDATED STATEMENTS OF EARNINGS
NINE MONTHS ENDED FEBRUARY 28, 1997
(UNAUDITED)
TEAM, INC. AND PRO-FORMA PRO-FORMA
SUBSIDIARIES ADJUSTMENTS CONSOLIDATED
------------- -------------- --------------
Revenues $ 32,732,000 $ $ 32,732,000
Operating expenses 18,414,000 18,414,000
Selling, general and administrative expenses 12,652,000 12,652,000
Interest 687,000 (182,000) 505,000
------------- -------------- --------------
Earnings from Continuing Operations Before Income Taxes 979,000 182,000 1,161,000
Provision for Income Taxes 450,000 62,000 512,000
Earnings from Continuing Operations
------------- -------------- --------------
Net of Income Taxes $ 529,000 $ 120,000 $ 649,000
============= ============== ==============
Net Earnings Per Share:
Earnings from Continuing Operations $ 0.10 $ 0.13
============= ==============
Weighted Average Number of Shares Outstanding 5,160,000 5,160,000
============= ==============
See notes to Pro Forma Consolidated Financial Statements
F-3
8
Team, Inc. and Subsidiaries
Notes to Pro Forma Consolidated Financial Statements
For the Year Ended May 31, 1996 and the Nine Months Ended February 28, 1997
(Unaudited)
Balance Sheet
The pro forma adjustments to the consolidated balance sheet as of February 28,
1997 reflect the following:
a) The disposition of substantially all of the assets of the Military
Housing Projects for $3.2 million, the resulting reduction of debt of
$2,944,000, the additional cash of $183,000 and estimated transaction
costs of $137,000.
Income Statement
The pro forma adjustments to the consolidated statements of income reflect the
following:
a) The elimination of the Military Housing Projects' operations for the
year ended May 31, 1996.
b) The decrease in interest expense for the year ended May 31, 1996,
resulting from the debt repayment of $2,944,000 at an interest rate of
8.56%. The decrease in interest expense for the nine months ended
February 28, 1997, resulting from the debt repayment of $2,944,000 at
an interest rate of 8.25%.
c) The tax effect of pro forma adjustments at the Company's statutory
rate.
F-4
9
EXHIBIT INDEX
-------------
2.1 Agreement of Purchase and Sale dated September 13, 1996, among
Registrant, and Ft. Bragg 801, Inc. and Pensacola 801, Inc.
and Portales 801, Inc., collectively as Seller, and U.S.
National Housing, L.L.C. as Purchaser. (Registrant hereby
agrees to furnish supplementally to the Securities and
Exchange Commission upon request a copy of any omitted
Exhibit, all of which are listed on the last page of the
Agreement and Purchase of Sale.)
2.2 Assignment and Assumption Agreement dated May 8, 1997, between
U.S. National Housing, LLC and U.S. National Housing Limited
Partnership.
2.3 First Amendment to Purchase and Sale Agreement, dated as of
May 8, 1997, among Registrant, and Ft. Bragg 801, Inc. and
Pensacola 801, Inc. and Portales 801, Inc. and First American
Capital Corporation, collectively as Seller, and U.S. National
Housing Limited Partnership, as Purchaser.
3