Exhibit 99.1
Team, Inc. Reports First Quarter Results
ALVIN, Texas--(BUSINESS WIRE)--Oct. 11, 2005--Team, Inc., (AMEX:TMI) today
reported net income of $549 thousand, or $0.06 per diluted share, for its first
quarter ending May 31, 2005. For the corresponding prior year period, Team
earned $269 thousand, or $0.03 per diluted share. For the quarter, Team's
revenues increased 75% to $58.0 million, operating profits improved 187% to $2.0
million, and operating profit margin was 3.4% compared to 2.1% in the prior year
quarter.
For this seasonally weak quarter, significant revenue and profit gains
within both business units were partially offset by significantly higher
corporate costs due in large measure to Sarbanes-Oxley (SOX) compliance
initiatives and audit costs incurred in the first quarter. These SOX and audit
costs, although in line with expectations, were about $900,000 higher than in
the prior first quarter period.
"While the two Gulf Coast hurricanes have created short-term disruptions in
early second quarter activities, we remain comfortable with previously issued
earnings guidance for the year of $1.15 to $1.30 per share," said Phil Hawk,
Team's Chairman and CEO. "We are pleased with our broad-based strong revenue
growth and improvements in job profit margins."
Industrial Services Segment
For the first quarter, Team's Industrial Services segment revenues were
$54.2 million, up 82% from the prior year quarter. Operating income for the
segment increased 135% to $4.5 million. Operating profit percentage for the
segment was 8% versus 6% for last year's first quarter.
First quarter revenues for the TCM Division (Team's NDE inspection and
field heat treating service lines) improved 182% to $29.7 million, reflecting
both the full quarter effect of the Cooperheat MQS business acquisition along
with successful business development initiatives. "We are generally satisfied
with our revenues and job level profit margins, but we remain focused on
bringing our SG&A and indirect costs in better balance with activity levels,"
said Phil Hawk. "We expect to see continued progress throughout this year."
First quarter revenues for the TMS Division (Team's mechanical service
lines of leak repair, hot tapping, fugitive emissions monitoring, field
machining, technical bolting, and field valve repair) were $24.4 million, up 27%
from unusually weak revenues in the prior year quarter. This growth reflects
broad-based growth in every service line and continued outstanding growth in
Canada. "We are pleased with our strong revenue growth and improved job level
profit margins from weak fourth quarter levels," Mr. Hawk stated.
"While Hurricanes Katrina and Rita have caused short-term closures and
associated disruptions for several of our Gulf Coast branches within this
business segment, we remain optimistic. We expect to benefit from stronger
seasonal demand plus continued organic revenue growth that should drive
significantly improved operating results for the remainder of the year," said
Mr. Hawk.
Equipment Sales and Rental Business Segment
The Equipment Sales and Rental (Climax) business segment is off to a good
start for the year. Revenues for the first quarter were $3.7 million and
operating profits were $0.3 million, up 11% and 85%, respectively. "Climax is
well positioned for another record year of double-digit revenue and profit
growth," said Mr. Hawk.
Amendment of Credit Facility
In October 2005, the Company executed an amendment to its senior credit
facility to, among other things, increase the debt to EBITDA covenants for
August 31, 2005 and subsequent quarters. The new maximum ratio is 4.0 to 1 at
August 31, 2005 reducing to 3.0 to 1 by May 31, 2006. The Company is in
compliance with the revised covenants at August 31, 2005.
Earnings Conference Call
In connection with this earnings release, the Company will hold its
quarterly conference call on Wednesday, October 12, 2005 at 9:00 a.m. Central
Time (10:00 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.
About Team, Inc.
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,
-------------------------
2005 2004
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Total revenues $57,884,000 $33,157,000
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Gross margin $18,867,000 $11,334,000
Selling, general and administrative
expenses $16,890,000 $10,423,000
Non-cash compensation charge $4,000 $223,000
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Operating income $1,973,000 $688,000
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Pre-tax income $901,000 $434,000
Income tax expense $352,000 $165,000
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Net income $549,000 $269,000
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Net income per common share-basic $0.07 $0.03
============ ============
Net income per common share-diluted $0.06 $0.03
============ ============
Weighted average shares outstanding:
Basic 8,266,000 8,065,000
Diluted 9,122,000 8,905,000
Revenues comprised of:
Industrial Services
TMS $24,407,000 $19,256,000
TCM 29,745,000 10,534,000
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Total Industrial Services $54,152,000 $29,790,000
Equipment sales and rentals 3,732,000 3,367,000
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Total revenues $57,884,000 $33,157,000
============ ============
Gross margins comprised of:
Industrial Services $17,283,000 $9,991,000
Equipment sales and rentals 1,584,000 1,343,000
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Total gross margin $18,867,000 $11,334,000
============ ============
Operating income, by segment:
Industrial Services $4,520,000 $1,925,000
Equipment sales and rentals 288,000 156,000
Corporate (2,835,000) (1,393,000)
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$1,973,000 $688,000
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TEAM, INC. AND SUBSIDIARIES
SUMMARY CONSOLIDATED BALANCE SHEET INFORMATION
AUGUST 31 AND MAY 31, 2005
August 31 May 31
2005 2005
------------- -------------
Current assets $77,562,000 $81,011,000
Net property, plant and equipment $29,381,000 $28,770,000
Other non-current assets $33,489,000 $33,545,000
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Total assets $140,432,000 $143,326,000
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Current liabilities $27,266,000 $31,922,000
Long term debt $60,043,000 $59,907,000
Other non-current liabilities and taxes $2,807,000 $2,555,000
Stockholders' equity $50,316,000 $48,942,000
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Total liabilities and stockholders'
equity $140,432,000 $143,326,000
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CONTACT: Team, Inc., Alvin
Philip J. Hawk or Ted W. Owen, 281-331-6154