Exhibit 99.1
Team Inc. Reports Strong Third Quarter Earnings Growth
ALVIN, Texas--(BUSINESS WIRE)--March 17, 2004--Team Inc.
(AMEX:TMI) today reported net income of $0.12 per diluted share for
its third quarter ending Feb. 29, 2004, doubling the $0.06 per share
earned in the prior year third quarter. Year-to-date earnings for Team
were $0.47 per diluted share, up 31% from $0.36 reported for the prior
year.
For the three months ended Feb. 28, 2004, the Company reported 15%
higher revenues of $25.1 million; a 68% increase in earnings before
interest and taxes (EBIT) of $1.7 million; and 82% improved net income
of $1.0 million. For the year to date, Company revenues improved 13%
to $75.9 million. Year-to-date net income was $4.0 million, up 28%
from the prior year.
"We are pleased with our overall performance and remain very
positive about our future prospects," said Phil Hawk, Team's chairman
and CEO. "Our continued double-digit revenue growth and the operating
leverage achieved with that growth, continue to validate our business
strategy and approach. We remain confident that our extensive customer
base, wide geographic distribution, and broad service lines will
provide continuing long-term growth opportunities for Team."
"The outlook for our fiscal year, ending May 31, 2004, is
positive. We are on-track to modestly exceed our previously announced
$100 million revenue projection. As a result of our strong performance
year-to-date and our positive outlook for the fourth quarter, we are
also narrowing our earnings projection to the high end of our previous
earnings guidance. Our revised earnings expectation for our fiscal
year 2004, ending May 31, 2004 is $0.65 to $0.68 per diluted share,"
said Hawk.
Third quarter revenue for Team's Industrial Services business
segment revenue was $20.9 million, up 9% from the prior year quarter.
Operating profit for the segment improved 4% to $2.2 million. Year to
date, revenue for the Industrial Services business segment revenue
improved 13% to $66.5 million, and operating profit improved 17% to
$9.8 million. During the quarter, strong, double-digit growth in
Team's mechanical services (on-stream leak repair, hot tapping,
fugitive emissions monitoring, field machining, bolting, and field
valve repair) more than offset a revenue decline in NDT inspection
services, where the Company continues to struggle with weak demand for
pipeline inspection services. Operating margins for the seasonally
weak third quarter and year-to-date periods were 10% and 15%,
respectively. "While the incremental operating margin was only 4%
during the quarter due to the negative operating leverage in
inspection services, year-to-date incremental operating margins were
in-line with our business model and expectations at approximately
19%." said Hawk. "Our multi-plant, multi-service capability continues
to drive steady market share improvement. We believe all our service
lines have continued attractive growth potential."
Equipment Sales and Rental (Climax) business segment revenue for
the third quarter was $4.2 million, up 59% from the prior year
quarter. Operating profit was $0.9 million, more than triple the prior
year quarter. This record quarterly sales and profit performance by
Climax reflects the shipments of two previously announced major orders
that were received in the first of half of the fiscal year. For the
year to date, segment revenue improved 16% to $9.3 million, and
operating profit was $0.6 million, approximately unchanged from the
prior year. "We are delighted with the third quarter operating
performance of our Equipment Sales and Rental business, which
demonstrates the operating leverage inherent in our business. While
the performance of this business segment will continue to fluctuate
somewhat due to the timing of major orders, we are very encouraged
with its outlook," said Hawk.
In connection with this earnings release, the Company will hold
its quarterly conference call on Thursday, March 18 at 10:00 a.m.
Central Time (11:00 a.m. Eastern). The call will be broadcast over the
Web and can be accessed on Team's Web site,
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. is a professional, full-service provider of specialized
industrial services and portable field-machining tools. Headquartered
in Alvin, Texas, the Company operates in over 40 customer service
locations throughout the United States. The Company also serves the
international market through both its own international subsidiaries
as well as through licensed arrangements in 14 countries. Team Inc.
common stock is traded on the American Stock Exchange under the ticker
symbol "TMI".
Any 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 any 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 any forward-looking
statements contained herein will occur or that objectives will be
achieved.
For additional information, contact Philip J. Hawk or Ted W. Owen
at 281-331-6154.
TEAM INC. AND SUBSIDIARIES
SUMMARY OF OPERATING RESULTS
Three Months Ended Nine Months Ended
February 29 (28), February 29 (28),
------------------------- -------------------------
2004 2003 2004 2003
------------ ------------ ------------ ------------
Total Revenues $25,137,000 $21,777,000 $75,862,000 $66,945,000
============ ============ ============ ============
Gross Margin $9,951,000 $8,451,000 $30,282,000 $27,089,000
Selling, general
and administrative
expenses $8,208,000 $7,402,000 $23,524,000 $21,604,000
Non-cash
compensation
charge $32,000 $31,000 $94,000 $83,000
------------ ------------ ------------ ------------
Earnings before
interest and
taxes $1,711,000 $1,018,000 $6,664,000 $5,402,000
============ ============ ============ ============
Pre-tax income $1,594,000 $879,000 $6,268,000 $4,948,000
Income tax expense $614,000 $341,000 $2,374,000 $1,898,000
------------ ------------ ------------ ------------
Net income $980,000 $538,000 $3,894,000 $3,050,000
============ ============ ============ ============
Net income per
common share-
basic $0.13 $0.07 $0.51 $0.39
============ ============ ============ ============
Net income per
common share-
diluted $0.12 $0.06 $0.47 $0.36
============ ============ ============ ============
Weighted average
shares outstanding:
Basic 7,678,000 7,751,000 7,629,000 7,736,000
Diluted 8,437,000 8,398,000 8,326,000 8,455,000
Revenues, by segment:
Industrial
Services $20,926,000 $19,125,000 $66,523,000 $58,875,000
Equipment
sales and
rentals 4,211,000 2,652,000 9,339,000 8,070,000
------------ ------------ ------------ ------------
Total Revenues $25,137,000 $21,777,000 $75,862,000 $66,945,000
============ ============ ============ ============
EBIT, by segment:
Industrial
Services $2,165,000 $2,091,000 $9,836,000 $8,385,000
Equipment
sales and
rentals 875,000 204,000 581,000 598,000
Corporate (1,329,000) (1,277,000) (3,753,000) (3,581,000)
------------ ------------ ------------ ------------
Total EBIT $1,711,000 $1,018,000 $6,664,000 $5,402,000
============ ============ ============ ============
TEAM INC. AND SUBSIDIARIES
SUMMARY CONSOLIDATED BALANCE SHEET INFORMATION
FEBRUARY 29, 2004 AND MAY 31, 2003
February 29 May 31
2004 2003
----------- -----------
Current Assets $33,045,000 $29,417,000
Net Property, Plant and Equipment $13,375,000 $12,268,000
Other non-current assets $10,345,000 $10,539,000
----------- -----------
Total Assets $56,765,000 $52,224,000
=========== ===========
Current Liabilities $10,343,000 $9,704,000
Long-term debt $9,515,000 $9,577,000
Other non-current liabilities and
taxes $1,039,000 $1,208,000
Stockholders' equity $35,868,000 $31,735,000
----------- -----------
Total Liabilities and Stockholders'
Equity $56,765,000 $52,224,000
=========== ===========
CONTACT: Team Inc., Alvin
Ted W. Owen, 281-331-6154