Exhibit 99.1
Team Inc. Reports Results for Fiscal Year 2003 and Provides Guidance
for Fiscal Year 2004
ALVIN, Texas--(BUSINESS WIRE)--July 16, 2003--Team Inc. (AMEX:TMI)
today reported net income of $.17 per share (diluted basis) for its
fourth quarter and $.53 per share (diluted basis) for the fiscal year
ending May 31, 2003. For the corresponding periods in the prior fiscal
year, Team's earnings were $0.16 and $0.48 per share, respectively.
For the full fiscal year, revenues were $91.9 million, up 8% from
the prior year. Net income was $4.4 million ($.53 per share fully
diluted), up 13%. For the fourth quarter, total revenues were $24.9
million, up 1%, and net income was $1.4 million, also up slightly.
Very strong fourth quarter prior year results in both business
segments contributed to the weaker quarterly comparisons versus full
year results. Team's balance sheet also continues to strengthen.
During the year, Team repurchased about 300,000 shares of common stock
and, at the same time, reduced its total debt outstanding by $2.4
million to $11.1 million. Team's total debt to EBITDA ratio is now
about 1.0.
"During FY 2003, Team achieved the highest revenues, net income,
earnings per share, and net income margins since the Company refocused
on the industrial services business more than ten years ago," said
Phil Hawk, Team's chairman and CEO. "While slightly below our long
term 10% target rate, we are satisfied with the 8% overall revenue
growth achieved this year. The past year has been a very difficult one
for Team's customers in most market segments including the refining,
petrochemical, power, and pipeline industries. We are confident that
Team is continuing to gain market share as larger customers aggregate
their industrial services requirements with fewer larger
multi-service, multi-location service providers," said Hawk.
"Team's reported earnings are in line with previously issued
earnings guidance and represent the fourth consecutive year of 'double
digit' earnings growth for the company. As we discussed in the third
quarter conference call, our costs increased ahead of our business
growth in a few areas and, as a result, Team did not achieve the
expected level of profitable operating leverage on the business
growth. Our results in the fourth quarter demonstrate progress in this
area, but we will continue to focus on this issue throughout the
coming year," commented Hawk.
Business Segment Performance
For the year, the Industrial Services Business Segment revenues
increased 9% to $81.1 million. Segment operating profit increased 5%
to $12.0 million. All major service lines except NDT inspection
services experienced attractive growth during the year. NDT inspection
revenues were down slightly due to significantly reduced pipeline and
pulp & paper projects, which were nearly offset by continued growth in
plant inspection services. In the fourth quarter, the field machining
and bolting services revenues were below the prior year due to the
timing of major turnaround activity. "For the upcoming year, we look
forward to continued growth in all services. We also remain very
optimistic about our new service line, Field Valve Repair Services.
This new service line is very complementary and closely related to our
existing service lines and represents an additional market opportunity
of more than $100 million within the U.S. We launched this service
during the fourth quarter and have several significant opportunities
already lined up in the current year," said Hawk.
The Equipment Sales and Rental Business segment (encompassing
Climax Portable Machine Tool Company) grew revenues about 2% for the
year to $10.8 million. The market for capital equipment continues to
be depressed in most of the world markets. Revenue growth in Asia
offset flat to slightly depressed sales in the U.S. and Europe.
Operating profit increased 10% to $603,000. Profit results for both
the current and prior year include a charge for other expenses.
Additionally, fourth quarter FY02 results reflected a very large Navy
sale that was not replicated in the current year. "While we do not see
an appreciably stronger market for the coming year at this point, we
expect ongoing initiatives will lead to continued revenue and profit
growth for Climax," said Hawk.
FY04 Strategy and Outlook
"Despite the difficult market conditions experienced in the past
year, Team management remains enthusiastically committed to its long
term strategy. Refineries, petrochemical companies, power companies,
pipeline companies, and other facilities needing our specialized
maintenance services continue to consolidate their related service
requirements with fewer larger multi-service, multi-location service
companies. Team is very well positioned to continue capitalizing on
this fundamental market trend for many years to come," said Hawk.
"Reflecting continued progress in executing our strategy, we
anticipate that our total company revenues for FY04 will exceed $100
million. From an earnings perspective, we estimate that full year
earnings will be between $0.60 and $0.68 per share on a fully diluted
basis," he said.
As previously announced, the Company has scheduled an earnings
conference call to discuss these results tomorrow, July 17th at 11
a.m. Eastern Daylight Time (10 a.m. CDT). The call will be broadcast
over the web by Vcall and can be accessed on Team's website,
www.teamindustrialservices.com. Individuals wishing to participate in
the conference call by phone can call 1-888-896-0862 and ask to join
the "Team IR" call.
Team Inc. provides an array of specialized industrial services
related to the construction and maintenance of pressurized piping and
process systems. Headquartered in Alvin, Texas, the Company operates
in over 40 customer service locations throughout the United States.
Team also manufactures, sells and rents portable field-machining tools
through its Climax subsidiary. Team Inc. common stock is traded on the
American Stock Exchange under the ticker symbol "TMI".
Certain forward-looking information contained herein is being
provided in accordance with the provisions of the Private Securities
Litigation Reform Act. Such information is subject to certain
assumptions and beliefs based on current information known to the
Company and is subject to factors that could result in actual results
differing materially from those anticipated in the forward-looking
statements contained herein. Such factors include domestic and
international economic activity, interest rates, and market conditions
for the Company's customers, regulatory changes and legal proceedings,
and the Company's successful implementation of its internal operating
plans. Accordingly, there can be no assurance that the forward-looking
statements contained herein will occur or that objectives will be
achieved.
TEAM INC. AND SUBSIDIARIES
SUMMARY OF OPERATING RESULTS
Three Months Ended Fiscal Year Ended
May 31, May 31,
------------------------- -------------------------
2003 2002 2003 2002
------------ ------------ ------------ ------------
Total
Revenues $24,931,000 $24,612,000 $91,876,000 $85,081,000
============ ============ ============ ============
Gross Margin $10,102,000 $10,360,000 $37,192,000 $35,465,000
Selling General and
Administrative
Expenses $7,579,000 $7,630,000 $29,183,000 $27,686,000
Non-cash
compensation
charge $32,000 $368,000 $115,000 $368,000
Other Expense $150,000 $150,000 $173,000
------------ ------------ ------------ ------------
Earnings before
interest and taxes $2,341,000 $2,362,000 $7,744,000 $7,238,000
============ ============ ============ ============
Pre-tax income $2,194,000 $2,190,000 $7,143,000 $6,346,000
Income tax
expense $843,000 $853,000 $2,741,000 $2,437,000
------------ ------------ ------------ ------------
Net income $1,351,000 $1,337,000 $4,402,000 $3,909,000
============ ============ ============ ============
Net income per
common share
-basic $0.18 $0.17 $0.57 $0.51
============ ============ ============ ============
Net income per
common share
-diluted $0.17 $0.16 $0.53 $0.48
============ ============ ============ ============
Weighted average
shares outstanding:
Basic 7,619,000 7,658,000 7,707,000 7,664,000
Diluted 8,146,000 8,352,000 8,369,000 8,229,000
Revenues Comprised of:
Industrial
Services:
Traditional
(a) $15,434,000 $13,904,000 $56,933,000 $51,036,000
New(b) 6,813,000 7,422,000 24,189,000 23,477,000
------------ ------------ ------------ ------------
22,247,000 21,326,000 81,122,000 74,513,000
Equipment
sales and
rentals 2,684,000 3,286,000 10,754,000 10,568,000
------------ ------------ ------------ ------------
Total
Revenues $24,931,000 $24,612,000 $91,876,000 $85,081,000
============ ============ ============ ============
EBIT, by
segment:
Industrial
Services $3,627,000 $3,551,000 $12,012,000 $11,470,000
Equipment
sales and
rentals(c) 4,000 599,000 603,000 547,000
Corporate (1,290,000) (1,788,000) (4,871,000) (4,779,000)
------------ ------------ ------------ ------------
$2,341,000 $2,362,000 $7,744,000 $7,238,000
============ ============ ============ ============
(a) Traditional services include leak repair, hot tapping,
emissions monitoring.
(b) New services include NDT inspection, field machining,
technical bolting and field valve repair. As previously
announced, the distinction between new and traditional
services will be discontinued in Fiscal 2004.
(c) Equipment segment EBIT is net of $150,000 and $173,000 charge
for other expense in 2003 and 2002, respectively.
TEAM INC. AND SUBSIDIARIES
SUMMARY CONSOLIDATED BALANCE SHEET INFORMATION
MAY 31, 2003 and 2002
2003 2002
------------ ------------
Current Assets $29,447,000 $28,073,000
Net Property, Plant and Equipment $12,268,000 $11,937,000
Other non-current assets $10,539,000 $11,179,000
------------ ------------
Total Assets $52,254,000 $51,189,000
============ ============
Current Liabilities $9,734,000 $9,380,000
Long term debt, net of current maturities $9,577,000 $11,978,000
Other non-current liabilities and taxes $1,208,000 $1,649,000
Stockholders' equity $31,735,000 $28,182,000
------------ ------------
Total liabilities and Stockholders' Equity $52,254,000 $51,189,000
============ ============
CONTACT: Team Inc., Alvin
Philip J. Hawk or Ted W. Owen, 281-331-6154