Exhibit 99.1
Team Inc. Reports First Quarter Earnings and Affirms Positive Outlook
ALVIN, Texas--(BUSINESS WIRE)--Sept. 29, 2004--Team Inc. (AMEX:TMI) today
reported net income of $.03 per share (diluted basis) for its first
quarter ending Aug. 31, 2004, significantly lower than the prior year
first quarter.
In the first quarter, Team reported earnings before interest and
taxes (EBIT) of $0.7 million on revenues of $33.2 million, as compared
to EBIT of $2.4 million on revenues of $24.9 million in the prior year
period. Net income for the first quarter was $0.3 million or $.03 per
share (diluted basis), compared to $1.4 million or $.17 per share, for
the same quarter last year.
The company's results were negatively impacted by the very low
level of refinery turnaround activity during the quarter. As reported
previously, due to extraordinarily high refining margins, refinery
turnaround activity was substantially deferred during the quarter.
"While this performance level is certainly below management's plan for
the quarter, we are confident that our competitive position in our
markets has not declined and that we will benefit from this deferred
turnaround activity in future quarters," said Phil Hawk, Team's
chairman and CEO.
FY05 and FY06 Outlook
The company affirmed its positive outlook for the remainder of the
fiscal year. "While forecasting full fiscal year 2005 earnings is
difficult due to the uncertainties inherent with the on-going major
business integration activities, we are maintaining our earnings
outlook of $0.84 to $0.90 per share for the current year ending May
31, 2005. For fiscal year 2006 ending May 31, 2006, and following the
completion of integration activities, we expect our earnings per share
to be in the $1.25 to $1.40 range," said Hawk.
Looking beyond these near-term turnaround timing and integration
issues, the company remains extremely positive about its prospects.
The purchases of the Thermal Solutions and Cooperheat-MQS businesses
nearly double Team's overall revenues to almost $200 million. At the
same time, Team's market leadership in these service lines only
enhances future organic growth potential as the company continues to
capitalize on customer trends to consolidate service purchases with
fewer, larger, more capable service companies.
"We are very optimistic about our business strategy and business
outlook. Once our new inspection and heat treating businesses are
fully integrated, we expect to achieve profit levels comparable to
Team's mechanical service lines. As reflected in our positive earnings
outlook, this business growth at comparable margins will be extremely
leveraging to Team's overall performance. We also remain confident in
our continued organic growth opportunities across all our service
lines," reported Hawk.
"For the remainder of fiscal year 2005, we have a positive outlook
and anticipate improving levels of turnaround activity throughout the
remainder of the year. While we will need to work through challenges
as we integrate the new businesses, we expect Team Cooperheat-MQS, the
new unit for our combined inspection and heat treating services, to
make a meaningful contribution to Team's performance this year," said
Hawk.
Industrial Services
For the quarter, the Industrial Services Business Segment revenues
were $29.8 million, up $7.5 million from the prior year quarter. The
two acquisitions, Thermal Solutions and CH-MQS, contributed $7.3
million in sales during the quarter. Excluding the two acquisitions,
the business segment experienced net growth of $0.2 million reflecting
offsetting trends. The traditional legacy services (on-stream leak
repair, hot tapping, and fugitive emissions monitoring) increased $1.9
million, about 13%, reflecting continued market penetration. However,
this growth was nearly completely offset by declines in
turnaround-related service activities (field machining, bolting, and
field valve repair) that were down $1.9 million, approximately 51%
less than the prior year. A significant portion of the reduced
turnaround activity occurred within Team's Caribbean operations that
had significant activity last year and practically none this year. As
stated earlier, management believes much of this deferred turnaround
activity will occur this fiscal year and will be reflected in our
results later in the year.
Segment operating profit during the quarter was $1.9 million, down
from $3.7 million in the prior year first quarter. The primary causes
of the decline were decreased sales in international operations and an
approximate $0.6 million operating loss related to the two
acquisitions.
Equipment Sales and Rental
The Equipment Sales and Rental Business Segment revenues for the
quarter increased 29% to $3.4 million, based on improved U.S. and
European sales. Operating profit was approximately $160,000, reversing
a year-earlier loss. "Climax is off to improved start this year, with
the outlook for the entire year continuing to be favorable," said
Hawk.
Corporate Expenses
Corporate expenses were $1.4 million for the quarter, up about
$0.2 million from the prior year. This increase is primarily due to
the non-cash charge of $223,000 during the quarter that is related to
the vesting of performance stock options granted previously to Team's
CEO. All performance options related to this 1998 grant have now
vested.
Earnings Conference Call
As previously announced, the Company has scheduled an earnings
conference call for today, Sept. 29th 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, field machining, technical bolting, field valve repair,
NDE inspection and 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. Team's inspection services
also serve the aerospace and automotive industries. Headquartered in
Alvin, Texas, the Company operates in over 50 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
August 31,
-------------------------
2004 2003
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Total Revenues $33,157,000 $24,918,000
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Gross Margin $11,334,000 $10,112,000
Selling General and Administrative Expenses $10,423,000 $7,718,000
Non-cash compensation charge $223,000 $31,000
Other Expense (Income)
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Earnings before interest and taxes $688,000 $2,363,000
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Pre-tax income $434,000 $2,218,000
Income tax expense (benefit) $165,000 $856,000
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Net income $269,000 $1,362,000
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Net income per common share-basic $0.03 $0.18
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Net income per common share-diluted $0.03 $0.17
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Weighted average shares outstanding:
Basic 8,065,000 7,610,000
Diluted 8,905,000 8,250,000
Revenues Comprised of:
Industrial Services $29,790,000 $22,315,000
Equipment sales and rentals 3,367,000 2,603,000
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Total Revenues $33,157,000 $24,918,000
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EBIT, by segment:
Industrial Services $1,925,000 $3,650,000
Equipment sales and rentals 156,000 (95,000)
Corporate (1,393,000) (1,192,000)
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$688,000 $2,363,000
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TEAM INC. AND SUBSIDIARIES
SUMMARY CONSOLIDATED BALANCE SHEET INFORMATION
AUGUST 31 AND MAY 31, 2004
August 31 May 31
2004 2004
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Current Assets $56,781,000 $41,267,000
Net Property, Plant and Equipment $28,047,000 $15,885,000
Other non-current assets $31,173,000 $17,244,000
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Total Assets $116,001,000 $74,396,000
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Current Liabilities $17,857,000 $13,555,000
Long term debt $53,556,000 $17,095,000
Other non-current liabilities and taxes $1,441,000 $1,447,000
Stockholders' equity $43,147,000 $42,299,000
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Total liabilities and Stockholders' Equity $116,001,000 $74,396,000
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CONTACT: Team Inc., Alvin
Philip J. Hawk or Ted W. Owen, 281-331-6154