EX-99.1 2 exhibit991.htm EXHIBIT 99.1 Exhibit
EXHIBIT 99.1

NEWS


    
TEAM, INC.
For immediate release
13131 Dairy Ashford, Suite 600
Contact: Greg L. Boane (281) 388-5541
Sugar Land, TX 77478
 


SUGAR LAND, TX, May 9, 2016 -- Team, Inc. (NYSE: TISI) today released full financial results for the first quarter ended March 31, 2016. Team reported an adjusted net loss of $0.2 million ($0.01 loss per diluted share) for the current quarter versus adjusted net income of $5.3 million ($0.25 earnings per diluted share) for the prior year quarter. Revenues for the current quarter increased by 30% to $250.9 million compared to revenues of $192.4 million for the prior year quarter. Revenues for the current quarter include $70.3 million related primarily to the recent acquisitions of Qualspec Group and Furmanite. Excluding incremental revenues from acquisitions, current quarter revenues declined by 6% compared to the prior year quarter. (Adjusted earnings in the current quarter exclude certain non-routine items that are not indicative of Team’s ongoing operating activities of $6.2 million (net of tax), or $0.26 per diluted share, as detailed in the accompanying schedule).

“The weak results for the first quarter reflect continued soft market conditions; all business units were impacted by project deferrals and reduced plant turnaround activities versus the prior year quarter. Operating margins declined in the current quarter on reduced activity levels and lower average margin service mix as higher margin advanced and specialty services normally tied to large turnaround projects were lower in the current quarter. We anticipate continued market headwinds across all business units during the remainder of 2016 while our customers’ maintenance and inspection spending levels remain depressed due to generally weak energy sector conditions” said Ted Owen, Team’s President and CEO. “As a result of the soft business environment, we are implementing $20 million of cost reduction initiatives in our legacy businesses that will be fully realized by 2017,” said Mr. Owen. “This is in addition to the merger related synergies we have previously identified of $20-25 million associated with the Furmanite acquisition.”

“Our focus in 2016 is to build the premier global industrial services company in our space. The integration of Furmanite and Qualspec and the implementation of a new ERP platform will provide a stronger, more competitively distinct foundation for our company as our end markets improve,” said Mr. Owen. “Looking beyond the current market headwinds and business integration activities, we remain very optimistic about the earnings and growth potential of our company--capitalizing on the combined strengths of the legacy Team, Qualspec and Furmanite businesses.”

GAAP Earnings

Team’s net income reported in accordance with generally accepted accounting principles (including non-routine items) was a net loss of $6.4 million ($0.27 loss per diluted share) for the current quarter as compared to net income of $3.3 million ($0.15 earnings per diluted share) in the prior year quarter. Certain non-routine items that are not indicative of Team’s ongoing operating activities have been excluded when arriving at adjusted earnings. In the current quarter, the most significant non-routine items pertained to acquisition costs associated with the Furmanite transaction ($6.1 million), professional fees for acquired business

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integration and changing the fiscal year end ($2.2 million) and non-capitalized ERP implementation costs ($1.3 million). Costs associated with the Furmanite transaction include $4.8 million incurred by the legacy Furmanite business primarily associated with change of control and severance payments. A reconciliation of net income (loss), reported in accordance with generally accepted accounting principles, to adjusted net income (loss) is contained in the accompanying schedule.

Earnings Conference Call

In connection with this earnings release, Team will hold its quarterly conference call on Tuesday, May 10, 2016 at 8:00 a.m. Central Time (9:00 a.m. Eastern). The call will be broadcast over the Web and can be accessed on Team’s website, www.teaminc.com. Individuals wishing to participate in the conference call by phone may call 888-699-2378 and use conference code 2591190 when prompted.

About Team, Inc.

Headquartered near Houston, Texas, Team Inc. is a leading provider of specialty industrial services, including inspection, mechanical services and engineering assessment, required in maintaining and installing high-temperature and high-pressure piping systems and vessels that are utilized extensively in the refining, petrochemical, power, pipeline and other heavy industries. Team offers these services across its 220 branch locations and more than 20 countries throughout the world. Team’s common stock is traded on the New York Stock Exchange under the ticker symbol “TISI”.

Certain forward-looking information contained herein is being provided in accordance with the provisions of the Private Securities Litigation Reform Act of 1995.  We have made reasonable efforts to ensure that the information, assumptions and beliefs upon which this forward-looking information is based are current, reasonable and complete. Such forward-looking statements involve estimates, assumptions, judgments and uncertainties. There are known and unknown factors that could cause actual results or outcomes to differ materially from those addressed in the forward-looking information. Such known factors are detailed in the Company's Annual Report on Form 10-K and in the Company's Quarterly Reports on Form 10-Q as filed with the Securities and Exchange Commission, and in other reports filed by the Company with the Securities and Exchange Commission from time to time. Accordingly, there can be no assurance that the forward-looking information contained herein will occur or that objectives will be achieved.  We assume no obligation to publicly update or revise any forward-looking statements made today or any other forward-looking statements made by the Company, whether as a result of new information, future events or otherwise.



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TEAM, INC. AND SUBSIDIARIES
SUMMARY OF OPERATING RESULTS
(in thousands, except per share data)
 
 
 
Three Months Ended
 
 
March 31,
 
 
2016
 
2015
 
 
(unaudited)
 
(unaudited)
Revenues
 
$
250,854

 
$
192,407

Operating expenses
 
184,872

 
138,364

Gross margin
 
65,982

 
54,043

 
 
 
 
 
Selling, general and administrative expenses
 
73,362

 
46,344

Operating income (loss)
 
(7,380
)
 
7,699

 
 
 
 
 
Foreign currency loss
 
38

 
374

Loss on investment in Venezuela
 
—

 
1,177

Other expense / (income), net
 
(10
)
 
2

Interest expense, net
 
2,935

 
567

Earnings (loss) from continuing operations before income taxes
 
(10,343
)
 
5,579

 
 


 


Provision (benefit) for income taxes
 
(3,783
)
 
2,213

Income (loss) from continuing operations
 
(6,560
)
 
3,366

 
 
 
 
 
Income from discontinued operations
 
126

 
—

Net income (loss)
 
(6,434
)
 
3,366

Less: Income attributable to non-controlling interest
 
—

 
60

Net income (loss) available to common shareholders
 
$
(6,434
)
 
$
3,306

 
 
 
 
 
Basic earnings (loss) per share:
 
 
 
 
Continuing operations
 
$
(0.27
)
 
$
0.16

Discontinued operations
 
—

 
—

Net income (loss)
 
$
(0.27
)
 
$
0.16

 
 
 
 
 
Diluted earnings (loss) per share:
 
 
 
 
Continuing operations
 
$
(0.27
)
 
$
0.15

Discontinued operations
 
—

 
—

Net income (loss)
 
$
(0.27
)
 
$
0.15

Weighted average number of shares outstanding:
Basic
 
24,030

 
20,396

Diluted
 
24,030

 
21,592

 
 
 
 
 

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TEAM, INC. AND SUBSIDIARIES
ADDITIONAL FINANCIAL INFORMATION
(in thousands, except per share data)
 
 
 
Three Months Ended
March 31,
 
 
2016
 
2015
 
 
(unaudited)
 
(unaudited)
 
 
 
 
 
Adjusted Net income (loss):
 
 
 
 
Net income (loss) available to common shareholders
 
$
(6,434
)
 
$
3,306

Non-routine acquisition costs (Corporate)
 
6,071

 
—

Non-routine legal fees (Quest)
 
72

 
1,096

Non-routine professional fees (Corporate)
 
2,223

 
—

Non-routine ERP costs (Corporate)
 
1,298

 
—

Non-routine EA asset write-off (Team Furmanite)
 
—

 
383

Non-routine loss on investment in Venezuela
 
—

 
1,177

Non-routine foreign currency loss
 
—

 
673

Tax impact of adjustments
 
(3,445
)
 
(1,321
)
Adjusted Net income (loss)
 
$
(215
)
 
$
5,314

 
 
 
 
 
Adjusted Net income (loss) per common share:
 
 
 
 
Basic
 
$
(0.01
)
 
$
0.26

Diluted
 
$
(0.01
)
 
$
0.25

 
 
 
 
 
Adjusted EBITDA:
 
 
 
 
Operating income (loss) (“EBIT”)
 
$
(7,380
)
 
$
7,699

Non-routine acquisition costs (Corporate)
 
6,071

 
—

Non-routine legal fees (Quest)
 
72

 
1,096

Non-routine professional fees (Corporate)
 
2,223

 
—

Non-routine EA asset write-off (Team Furmanite)
 
—

 
383

Non-routine ERP costs (Corporate)
 
1,298

 
—

Adjusted EBIT
 
2,284

 
9,178

Depreciation and amortization
 
10,023

 
5,690

Non-cash share-based compensation costs
 
1,706

 
1,286

Adjusted EBITDA
 
$
14,013

 
$
16,154

 
 
 
 
 
Segment Data:
 
 
 
 
Revenues:
 
 
 
 
Team QualSpec
 
$
136,262

 
$
107,191

Team Furmanite
 
100,594

 
69,352

Quest
 
13,998

 
15,864

 
 
$
250,854

 
$
192,407

Adjusted EBIT
 
 
 
 
Team QualSpec
 
$
7,944

 
$
10,375

Team Furmanite
 
7,039

 
4,824

Quest
 
(685
)
 
2,359

Corporate and shared support
 
(12,014
)
 
(8,380
)
 
 
$
2,284

 
$
9,178

Adjusted EBITDA
 
 
 
 
Team QualSpec
 
$
12,998

 
$
12,515

Team Furmanite
 
10,363

 
6,669

Quest
 
597

 
3,794

Corporate and shared support
 
(9,945
)
 
(6,824
)
 
 
$
14,013

 
$
16,154


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TEAM, INC. AND SUBSIDIARIES
SUMMARY CONSOLIDATED BALANCE SHEET INFORMATION
MARCH 31, 2016 AND DECEMBER 31, 2015
(in thousands)
 
 
 
 
 
 
 
March 31,
 
December 31,
 
 
2016
 
2015
 
 
(unaudited)
 
 
 
 
 
 
 
Current assets
 
$
509,764

 
$
314,559

 
 
 
 
 
Property, plant and equipment, net
 
201,015

 
124,983

 
 
 
 
 
Other non-current assets
 
469,775

 
359,449

 
 
 
 
 
Total assets
 
$
1,180,554

 
$
798,991

 
 
 
 
 
Current liabilities
 
$
139,954

 
$
92,160

 
 
 
 
 
Long-term debt net of current maturities
 
416,886

 
351,383

 
 
 
 
 
Other non-current liabilities
 
74,530

 
17,302

 
 
 
 
 
Stockholders’ equity
 
549,184

 
338,146

 
 
 
 
 
Total liabilities and stockholders’ equity
 
$
1,180,554

 
$
798,991



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TEAM, INC. AND SUBSIDIARIES
SUMMARY CONSOLIDATED CASH FLOW INFORMATION
MARCH 31, 2016 AND MARCH 31, 2015
(in thousands)
 
 
 
Three Months Ended
 
 
March 31,
 
 
2016
 
2015
 
 
(unaudited)
 
(unaudited)
 
 
 
 
 
Net income (loss)
 
$
(6,434
)
 
$
3,366

 
 
 
 
 
Depreciation, amortization and non-cash share-based compensation expense
 
12,158

 
6,976

 
 
 
 
 
Working capital changes
 
14,737

 
(4,787
)
 
 
 
 
 
Other items affecting operating cash flow
 
1,038

 
4,350

 
 
 
 
 
Net cash provided by operating activities
 
$
21,499

 
$
9,905

 
 
 
 
 
Capital expenditures
 
(11,580
)
 
(7,648
)
 
 
 
 
 
Cash used for business acquisitions, net
 
(33,077
)
 
—

 
 
 
 
 
Proceeds from sale of assets
 
1,232

 
52

 
 
 
 
 
Other items affecting investing cash flow
 
92

 
(519
)
 
 
 
 
 
Net cash used in investing activities
 
$
(43,333
)
 
$
(8,115
)
 
 
 
 
 
Borrowings on debt, net
 
64,950

 
10,670

 
 
 
 
 
Purchase of treasury stock
 
(1,720
)
 
(21,138
)
 
 
 
 
 
Debt issuance costs
 
(380
)
 
—

 
 
 
 
 
Cash associated with share-based payment arrangements, net
 
1,108

 
1,621

 
 
 
 
 
Net cash provided by (used in) financing activities
 
$
63,958

 
$
(8,847
)
 
 
 
 
 
Effect of exchange rate changes
 
1,360

 
(1,925
)
 
 
 
 
 
Change in cash and cash equivalents
 
$
43,484

 
$
(8,982
)
 
 
 
 
 


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