EXHIBIT 99.1
Team Inc. Reports 31% Earnings Growth for Fiscal Year 2004 and
Provides Guidance for Fiscal Year 2005
ALVIN, Texas--(BUSINESS WIRE)--July 14, 2004--Team Inc. (AMEX:TMI)
today reported net income of $0.22 per share (diluted basis) for its
fourth quarter and $0.69 per share (diluted basis) for the fiscal year
ending May 31, 2004. For the corresponding periods in the prior fiscal
year, Team's earnings were $0.17 and $0.53 per share, respectively.
For the full fiscal year, revenues were $107.7 million, up 17%
from the prior year. Net income was $5.8 million ($0.69 per share
fully diluted), up 31%. For the fourth quarter, total revenues
increased 28% to $31.8 million, and net income grew 39% to $1.9
million. "Fiscal year 2004 was a very successful year for Team in a
number of important dimensions. We are pleased with our continued
strong revenue growth across our businesses reflecting the continued
success of our business development strategy. We are also pleased with
the even stronger growth in Team's profits as we continue to
capitalize upon the inherent operating leverage in our business
model," said Phil Hawk, Team's chairman and CEO. "Also, during the
fourth quarter, Team completed its acquisition of Thermal Solutions, a
field heat treating company, which offers additional exciting growth
potential in the coming year," added Hawk.
Industrial Services
For the year, the Industrial Services Business Segment revenues
increased 17% to $94.5 million. Segment operating profit increased 16%
to $14.0 million. Overall, the operating profit margin (Earnings
before interest and taxes, or "EBIT") for the year and for the quarter
was 15%. For the fourth quarter, segment revenues were up 26% to $28.0
million. Operating profit grew 16% to $4.1 million. The revenues for
this segment included $2.5 million of Thermal Solutions revenues
following its acquisition in April 2004. Excluding those revenues, the
organic growth from the remainder of the industrial services business
was 15% and 14% for the quarter and full year, respectively. The
organic growth in the remaining services was broad based, with
double-digit revenue growth in nearly all service lines. As a result
of continued market penetration with multi-service, multi-plant
customer agreements and increased turnaround projects.
With the acquisition of Thermal Solutions during the fourth
quarter, the company has taken steps to align the operations of both
the heat treating and NDT inspection services more closely with Team's
mechanical services. While both services will continue to be delivered
by dedicated service personnel, we are increasing common marketing and
sales activities among all service lines. Also in conjunction with
these efforts, we have renamed our heat treating and inspection
businesses as Team Thermal Solutions and Team Inspection Services,
respectively.
Equipment Sales and Rental
The Equipment Sales and Rental Business Segment (Climax Portable
Machine Tool Company) also had strong results for the year and
quarter. For the year, revenues increased 22% to $13.1 million.
Operating profit was $1.2 million, approximately double last year's
results. Profits for the year included two offsetting items: a
$235,000 gain from the sale of idle real estate and a $245,000 loss
provision associated with special sales tax obligations. For the
quarter, revenues were $3.8 million, up 41%. Operating profits were
$0.6 million versus break-even results in the fourth quarter. The
strong revenue growth was the result of several major special machine
shipments during the second half of the fiscal year. "Climax continues
to pursue these special machine sales opportunities as a supplement to
its standard machine sales and rental offerings. The level of new
special machine project interest remains high going into the current
year," said Phil Hawk.
FY05 Outlook
"Reflecting continued organic growth plus the full year impact of
Thermal Solutions, we anticipate that our total company revenues for
fiscal year 2005 will be in the $120 to $130 million range. From an
earnings perspective, we estimate that full year earnings will be
between $0.84 and $0.90 per share on a fully diluted basis," he said.
Consistent with the earnings guidance provided last year, Team is
not projecting individual quarterly results for investors. During each
conference call, the Company will affirm or adjust its full year
projections as appropriate. A significant portion of Thermal
Solutions' service activity and sales are related to major plant
outages or turnarounds. These outages are concentrated in the fall and
spring calendar quarters, which will modestly shift the seasonality of
Team's overall sales and earnings as a result.
As previously announced, the Company has scheduled an earnings
conference call to discuss these results tomorrow, July 15th 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 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 specialty
industrial services. Team's current industrial service offering
encompasses on-stream leak repair, hot tapping, fugitive emissions
monitoring, NDT inspection, field machining, technical bolting, field
valve repair, and with the acquisition of Thermal Solutions, field
heat treating. All these services are required in maintaining high
temperature, high pressure piping systems and vessels utilized
extensively in the refining, petrochemical, power, pipeline and other
heavy industries. 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".
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 Year Ended
May 31, May 31,
-------------------------------------------------
2004 2003 2004 2003
----------- ----------- ------------ ------------
Total Revenues $31,807,000 $24,931,000 $107,669,000 $91,876,000
=========== =========== ============ ============
Gross Margin $12,402,000 $10,103,000 $42,684,000 $37,192,000
Selling, general and
admin. expenses $9,240,000 $7,579,000 $32,589,000 $29,183,000
Non-cash compensation
charge $250,000 $32,000 $344,000 $115,000
Other expense
(income) $(165,000) $150,000 $10,000 $150,000
----------- ----------- ------------ ------------
Earnings before
interest and taxes $3,077,000 $2,342,000 $9,741,000 $7,744,000
=========== =========== ============ ============
Pre-tax income $2,954,000 $2,194,000 $9,222,000 $7,143,000
Income tax
expense $1,072,000 $843,000 $3,446,000 $2,741,000
----------- ----------- ------------ ------------
Net income $1,882,000 $1,352,000 $5,776,000 $4,402,000
=========== =========== ============ ============
Net income per
common share-basic $0.24 $0.18 $0.75 $0.57
=========== =========== ============ ============
Net income per
common share-diluted $0.22 $0.17 $0.69 $0.53
=========== =========== ============ ============
Weighted average
shares outstanding:
Basic 7,946,000 7,619,000 7,709,000 7,707,000
Diluted 8,752,000 8,146,000 8,429,000 8,369,000
Revenues Comprised of:
Industrial
Services $28,023,000 $22,247,000 $94,546,000 $81,122,000
Equipment
sales and
rentals 3,784,000 2,684,000 13,123,000 10,754,000
----------- ----------- ------------ ------------
Total Revenues $31,807,000 $24,931,000 $107,669,000 $91,876,000
=========== =========== ============ ============
TEAM INC. AND SUBSIDIARIES
SUMMARY CONSOLIDATED BALANCE SHEET INFORMATION
MAY 31, 2004 AND MAY 31, 2003
2004 2003
------------- -------------
Current Assets $41,267,000 $29,417,000
Net Property, Plant and Equipment $15,885,000 $12,268,000
Other non-current assets $17,244,000 $10,539,000
------------- -------------
Total Assets $74,396,000 $52,224,000
============= =============
Current Liabilities $13,555,000 $9,704,000
Long term debt $17,095,000 $9,577,000
Other non-current liabilities and taxes $1,447,000 $1,208,000
Stockholders' equity $42,299,000 $31,735,000
------------- -------------
Total liabilities and Stockholders'
Equity $74,396,000 $52,224,000
============= =============
CONTACT: Team Inc., Alvin
Philip J. Hawk or Ted W. Owen, 281-331-6154