Exhibit 99.1
Team Inc. Reports Third Quarter Earnings Growth: Progress with Acquisition
Integration
ALVIN, Texas--(BUSINESS WIRE)--April 12, 2005--Team Inc., (AMEX:TMI) today
reported net income of $1.3 million ($0.14 per diluted share) for its third
quarter ending February 28, 2005 up 30% from $1.0 million ($0.12 per share)
earned in the prior year third quarter. Year-to-date earnings for Team were $3.0
million ($0.33 per diluted share) compared to $3.9 million ($0.47 per share)
reported for the prior year.
For the three months ended February 28, 2005, the Company reported revenues
more than doubled to $56.3 million and net income grew 30% to $1.3 million.
Team's results for the quarter reflect approximately $800,000 in additional
pre-tax expenses related to specific integration transition activities
($700,000) and Sarbanes-Oxley related documentation and testing activities
($100,000). The net impact of these expenses is approximately $0.06 per share.
The Company also indicated that it expects to incur a similar level of
additional expenses in its fourth quarter: integration activities ($200,000) and
SOX related activities ($500,000).
"We are pleased with our continuing progress regarding both our integration
activities and financial performance," said Phil Hawk, Team's Chairman and CEO.
"Based on the progress, we are maintaining our previously issued FY06 earnings
guidance of $1.25 to $1.40 per share," said Hawk.
Industrial Services Segment
Third quarter revenue for Team's Industrial Services business segment
revenues were $51.7 million, up 147% from the prior year quarter. Operating
income for the segment was $4.8 million, up 124%. Operating profit percentage
for the segment was 9% vs. 10% in last year's prior quarter. Team enjoyed very
significant growth in the quarter in both the Team Mechanical Services group
(TMS) (leak repair, hot tapping, fugitive emissions monitoring, field machining,
bolting, field valve repair) and in the new Team Cooperheat MQS group (TCM)
(inspection and field heat treating services). For the year to date, segment
revenues were nearly $130 million, segment operating profit was $11.8 million
and the operating income percentage was 9%.
TMS revenues for the quarter were $25.3 million, up 39% from the prior
year. This growth reflected outstanding turnaround activity plus a major
international project. For the year to date, TMS revenues were $66.5 million, up
16%.
TCM revenues for the quarter were $26.4 million, eight and an a half times
larger than the prior year quarter reflecting the acquisitions of the Thermal
Solutions and Cooperheat MQS businesses. For the year to date, TCM revenues are
$63.3 million, nearly seven times larger than the prior year.
"Our results for the quarter reflect good performance and progress in a
number of areas as well as a few continuing integration challenges," reported
Phil Hawk. "We are very pleased with our activity growth in both units during
the quarter; we are back on track for 10%+ annual organic growth. We are making
progress with TCM profit margins. Support costs, which reflect some of the
special expenses, mentioned above remain an area of continuing attention,"
reported Hawk.
Equipment Sales and Rental Business Segment
The Equipment Sales and Rental (Climax) business segment posted revenues
for the third quarter and year to date of $4.6 million and $11.4 million, up 10%
and 22% respectively from the prior year results. Operating profits for the same
periods were $0.8 million and $1.1 million respectively. Operating income
percentages were 16% for the quarter and 10% year to date. "Climax had an
excellent quarter; the outlook for the full year remains attractive," said Hawk.
Business Outlook
"We are very encouraged by the near term business outlook for all of our
business segments," reported Hawk. The company expects continued progress in the
current fourth quarter driven by strong revenue growth and additional TCM margin
improvement.
Earnings Conference Call
In connection with this earnings release, the Company will hold its
quarterly conference call on Wednesday, April 13, 2005 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 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. 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 Nine Months Ended
February 28, February 29, February 28, February 29,
------------------------- --------------------------
2005 2004 2005 2004
------------ ------------ ------------- ------------
Total Revenues $56,291,000 $25,137,000 $141,283,000 $75,862,000
============ ============ ============= ============
Gross Margin $19,247,000 $9,951,000 $48,379,000 $30,282,000
Selling, general
and
administrative
expenses $16,374,000 $8,208,000 $41,452,000 $23,524,000
Non-cash
compensation
charge $4,000 $32,000 $232,000 $94,000
------------ ------------ ------------- ------------
Operating
income $2,869,000 $1,711,000 $6,695,000 $6,664,000
Interest expense,
net $906,000 $117,000 $1,964,000 $396,000
------------ ------------ ------------- ------------
Pre-tax income $1,963,000 $1,594,000 $4,731,000 $6,268,000
Income tax
expense $686,000 $614,000 $1,738,000 $2,374,000
------------ ------------ ------------- ------------
Net income $1,277,000 $980,000 $2,993,000 $3,894,000
============ ============ ============= ============
Net income per
common share-
basic $0.16 $0.13 $0.37 $0.51
============ ============ ============= ============
Net income per
common share-
diluted $0.14 $0.12 $0.33 $0.47
============ ============ ============= ============
Weighted average
shares
outstanding:
Basic 8,199,000 7,678,000 8,134,000 7,629,000
Diluted 8,999,000 8,437,000 8,968,000 8,326,000
Revenues
comprised of:
Industrial
Services
Team
Mechnical
Services $25,259,000 $18,130,000 $66,561,000 $57,184,000
Team
Cooperheat-
MQS 26,402,000 2,796,000 63,275,000 9,339,000
------------ ------------ ------------- ------------
Total
Industrial
services $51,661,000 $20,926,000 $129,836,000 $66,523,000
Equipment sales
and rentals 4,630,000 4,211,000 11,447,000 9,339,000
------------ ------------ ------------- ------------
Total Revenues $56,291,000 $25,137,000 $141,283,000 $75,862,000
============ ============ ============= ============
Gross margins
comprised of:
Industrial
Services
Team
Mechnical
Services $9,252,000 $7,057,000 $25,154,000 $23,095,000
Team
Cooperheat-
MQS 7,998,000 815,000 18,503,000 3,024,000
------------ ------------ ------------- ------------
Total
Industrial
services $17,250,000 $7,872,000 $43,657,000 $26,119,000
Equipment sales
and rentals 1,997,000 2,079,000 4,722,000 4,163,000
------------ ------------ ------------- ------------
Total gross
margin $19,247,000 $9,951,000 $48,379,000 $30,282,000
============ ============ ============= ============
Operating income
comprised of:
Segment
operating
income:
Industrial
Services $4,840,000 $2,165,000 $11,821,000 $9,836,000
Equipment
sales and
rentals 752,000 875,000 1,127,000 581,000
------------ ------------ ------------- ------------
5,592,000 3,040,000 12,948,000 10,417,000
Less: corporate
costs (2,723,000) (1,329,000) (6,253,000) (3,753,000)
------------ ------------ ------------- ------------
$2,869,000 $1,711,000 $6,695,000 $6,664,000
============ ============ ============= ============
TEAM INC. AND SUBSIDIARIES
SUMMARY CONSOLIDATED BALANCE SHEET INFORMATION
FEBRUARY 28, 2005 AND MAY 31, 2004
February 28, May 31,
2005 2004
------------- ------------
Current Assets $70,327,000 $41,267,000
Net Property, Plant and Equipment $26,862,000 $15,885,000
Other non-current assets $33,039,000 $17,244,000
------------- ------------
Total Assets $130,228,000 $74,396,000
============= ============
Current Liabilities $24,946,000 $13,555,000
Long term debt $57,019,000 $17,095,000
Other non-current liabilities and taxes $1,467,000 $1,447,000
Stockholders' equity $46,796,000 $42,299,000
------------- ------------
Total liabilities and Stockholders' Equity $130,228,000 $74,396,000
============= ============
CONTACT: Team Inc., Alvin
Philip J. Hawk or Ted W. Owen, 281-331-6154