Exhibit 99.1
Team, Inc. Reports Strong Third Quarter Profit Growth
ALVIN, Texas--(BUSINESS WIRE)--April 5, 2006--Team Inc.,
(AMEX:TMI) today reported net income of $2.3 million, or $0.25 per
diluted share, for its third quarter ending February 28, 2006. Income
from continuing operations increased 145% from the corresponding prior
year period in which Team earned $0.9 million, or $0.10 per diluted
share from continuing operations. The prior year's reported results
included $0.04 per share in earnings related to a discontinued
operation that was sold in November 2005. For the quarter, Team's
revenues from continuing operations improved 21% to $62.6 million,
operating income from continuing operations grew 128% to $4.8 million,
and operating profit margin was 8% compared to 4% in the prior year
quarter.
For the year-to-date period, Team's income from continuing
operations was $6.6 million, or $0.72 per diluted share, up 158% from
the corresponding prior year period. Year-to-date revenues increased
42% to $183.8 million, operating income improved 144% to $13.6
million, and operating profit margin was 7% compared to 4% in the
prior year-to-date period. Team acquired the assets of Cooperheat-MQS
during the first quarter of the last fiscal year, affecting the
comparability of some of the year-to-date results.
"We are pleased with our most recent quarter," said Phil Hawk,
Team's Chairman and CEO. "We continue to focus on sustaining our
attractive business growth and realizing our target performance levels
across our entire branch network," said Hawk. "We remain strategically
very well positioned. Consistent execution is the key to our continued
improvement."
Industrial Services Business
For the most recent quarter, Team Industrial Services revenues
were $62.6 million, up 21% from the prior year quarter. Operating
income for those operations were $7.3 million, up $2.4 million or a
50% increase over last year's quarter. Operating profit percentage was
12% versus 9% for last year's third quarter.
Both the TMS and TCM divisions, and nearly all geographic regions
and service lines within these divisions, contributed to Team's
revenue growth during the quarter. TCM Division (Team's NDE inspection
and field heat treating service lines) revenues for the quarter were
$34.0 million, a 29% improvement over the prior year quarter. TMS
Division (Team's mechanical service lines of leak repair, hot tapping,
fugitive emissions monitoring, field machining, technical bolting, and
field valve repair) revenues for the quarter were $28.7 million, up
14% from the prior year quarter. The revenues for all service lines
were ahead of the prior year quarter. Team's revenue growth reflects a
combination of continued market share growth combined with unusually
strong overall market demand for the company's services. This market
demand is a function of increased repair and turnaround activity
driven by continued robust customer profit margins as well as the Gulf
Coast hurricanes. In fact, current overall demand levels in some areas
exceed Team's near term capacity to meet the demand. The company
expects overall market demand to remain above historical levels for at
least several more quarters.
Team Industrial Service operating profits and profit margins
improved nicely from the prior year quarter, but were a little below
the company's internal expectations given the overall activity levels.
"While most branches in both divisions continue to perform
satisfactorily, we remain focused on a small number of underperforming
branches that are diluting our overall results," said Phil Hawk. "We
remain confident that all of our current branches can be profitable
contributors to our network," reported Hawk.
Outlook for the Remainder of FY2006
The company remains comfortable with the previously issued full
year guidance for Fiscal Year 2006 ending May 31, 2006 of $1.15 to
$1.30 per share.
Earnings Conference Call
In connection with this earnings release, the Company will hold
its quarterly conference call on Thursday, April 6, 2006, 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.
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 28, February 28,
------------------------- ---------------------------
2006 2005 2006 2005
------------ ------------ ------------- -------------
Revenues $62,631,000 $51,661,000 $183,828,000 $129,836,000
Operating
expenses 41,582,000 34,411,000 122,095,000 86,179,000
------------ ------------ ------------- -------------
Gross Margin 21,049,000 17,250,000 61,733,000 43,657,000
Selling, general
and
administrative
expenses 16,211,000 15,129,000 48,122,000 37,857,000
Non-cash G&A
compensation
cost - 4,000 9,000 232,000
------------ ------------ ------------- -------------
Operating income
-- continuing
operations 4,838,000 2,117,000 13,602,000 5,568,000
Interest expense,
net 1,083,000 694,000 2,862,000 1,510,000
------------ ------------ ------------- -------------
Earnings from
continuing
operations
before income
taxes 3,755,000 1,423,000 10,740,000 4,058,000
Provision for
income taxes 1,468,000 491,000 4,113,000 1,491,000
------------ ------------ ------------- -------------
Income from
continuing
operations 2,287,000 932,000 6,627,000 2,567,000
------------ ------------ ------------- -------------
Discontinued
operations:
Income (loss)
from
operations of
discontinued
segment - 540,000 (78,000) 673,000
Gain on sale of
segment - - 1,494,000 -
------------ ------------ ------------- -------------
Earnings from
discontinued
operations
before
income taxes - 540,000 1,416,000 673,000
Provision for
income taxes - 195,000 1,410,000 247,000
------------ ------------ ------------- -------------
Income (loss)
from
discontinued
operations - 345,000 6,000 426,000
------------ ------------ ------------- -------------
Net income $2,287,000 $1,277,000 $6,633,000 $2,993,000
============ ============ ============= =============
Earnings per
common share:
Continuing
operations
Basic $0.27 $0.11 $0.79 $0.32
============ ============ ============= =============
Diluted $0.25 $0.10 $0.72 $0.29
============ ============ ============= =============
Discontinued
operations
Basic $- $0.04 $- $0.05
============ ============ ============= =============
Diluted $- $0.04 $- $0.05
============ ============ ============= =============
Net income
Basic $0.27 $0.16 $0.79 $0.37
============ ============ ============= =============
Diluted $0.25 $0.14 $0.72 $0.33
============ ============ ============= =============
Weighted average
number of shares
outstanding:
Basic 8,433,000 8,199,000 8,354,000 8,134,000
============ ============ ============= =============
Diluted 9,282,000 8,999,000 9,184,000 8,968,000
============ ============ ============= =============
Revenues
comprised of:
TMS $28,695,000 $25,259,000 $81,840,000 $66,561,000
TCM 33,936,000 26,402,000 101,988,000 63,275,000
------------ ------------ ------------- -------------
$62,631,000 $51,661,000 $183,828,000 $129,836,000
============ ============ ============= =============
Operating income
-- continuing
operations
comprised of:
Industrial
Services $7,264,000 $4,840,000 $21,223,000 $11,821,000
Corporate
costs (2,426,000) (2,723,000) (7,621,000) (6,253,000)
------------ ------------ ------------- -------------
$4,838,000 $2,117,000 $13,602,000 $5,568,000
============ ============ ============= =============
TEAM, INC. AND SUBSIDIARIES
SUMMARY CONSOLIDATED BALANCE SHEET INFORMATION
FEBRUARY 28, 2006 AND MAY 31, 2005
Feb. 28 May 31
2006 2005
------------- -------------
Cash $3,525,000 $3,993,000
Accounts Receivable $65,425,000 $59,364,000
Other current Assets $14,323,000 $12,168,000
Current assets of discontinued
operations $- $5,486,000
------------- -------------
Current assets $83,273,000 $81,011,000
Net property, plant and equipment $25,755,000 $24,378,000
Non current assets of discontinued
operations $- $7,883,000
Other non-current assets $29,503,000 $30,054,000
------------- -------------
Total assets $138,531,000 $143,326,000
============= =============
Current maturities of long-term debt $5,389,000 $3,835,000
Accounts payable and other current
liabilities $21,289,000 $26,807,000
Current liabilities of discontinued
operations $- $1,281,000
------------- -------------
Total current liabilities $26,678,000 $31,923,000
Long term debt $50,267,000 $59,907,000
Other non-current liabilities and taxes $2,613,000 $2,554,000
Stockholders' equity $58,973,000 $48,942,000
------------- -------------
Total liabilities and stockholders'
equity $138,531,000 $143,326,000
============= =============
CONTACT: Team, Inc., Alvin
Ted W. Owen, 281-331-6154