-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KsD9UYj5u7OI6nXX9PAfGzjc/Rtn7W/XwzgTgtTA/YF9UAKrJ8o2OAjeNk/qS75r 8lKEOhnNnOVDG9p2Hw+XWw== 0000950129-00-001805.txt : 20000413 0000950129-00-001805.hdr.sgml : 20000413 ACCESSION NUMBER: 0000950129-00-001805 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000229 FILED AS OF DATE: 20000412 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TEAM INC CENTRAL INDEX KEY: 0000318833 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MISCELLANEOUS REPAIR SERVICES [7600] IRS NUMBER: 741765729 STATE OF INCORPORATION: TX FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-08604 FILM NUMBER: 599312 BUSINESS ADDRESS: STREET 1: 200 HERMANN DRIVE CITY: ALVIN STATE: TX ZIP: 77056 BUSINESS PHONE: 2813316154 MAIL ADDRESS: STREET 1: 1019 SOUTH HOOD STREET CITY: ALVIN STATE: TX ZIP: 77551 10-Q 1 TEAM, INC. - DATED FEBRUARY 29, 2000 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended FEBRUARY 29, 2000 ------------------- OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period _______________________ to __________________ Commission file number 0-9950 --------- TEAM, INC. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Texas 74-1765729 - ------------------------------- ---------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 200 Hermann Drive, Alvin, Texas 77511 - ---------------------------------------- ---------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (281) 331-6154 ------------------------------ -------------------------------------- Indicate by checkmark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- On April 4, 2000, there were 8,247,254 shares of the Registrant's common stock outstanding. 2 TEAM, INC. INDEX
PART I. FINANCIAL INFORMATION Page No. -------- Item 1. Financial Statements Consolidated Condensed Balance Sheets -- 1 February 29, 2000 (Unaudited) and May 31, 1999 Consolidated Condensed Statements of Operations (Unaudited) -- 2 Three Months Ended February 29, 2000 and February 28, 1999 Nine Months Ended February 29, 2000 and February 28, 1999 Consolidated Condensed Statements of Cash Flows (Unaudited) -- 3 Nine Months Ended February 29, 2000 and February 28 1999 Notes to Unaudited Consolidated Condensed Financial Statements 4 Item 2. Management's Discussion and Analysis 8 of Financial Condition and Results of Operations Item 3. Quantitative and Qualitative Disclosure 9 about Market Risk PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K 10
3 PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS TEAM, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS
FEBRUARY 29, MAY 31, 2000 1999 ------------ ------------ (Unaudited) ASSETS Current Assets: Cash and cash equivalents $ 710,000 $ 1,035,000 Accounts receivable, net of allowance for doubtful accounts of $216,000 and $297,000 12,716,000 10,726,000 Inventories 7,670,000 8,566,000 Income tax receivable 0 87,000 Deferred income taxes 709,000 709,000 Prepaid expenses and other current assets 839,000 512,000 ------------ ------------ Total Current Assets 22,644,000 21,635,000 Property, Plant and Equipment: Land and buildings 10,028,000 9,996,000 Machinery and equipment 17,558,000 17,100,000 ------------ ------------ 27,586,000 27,096,000 Less accumulated depreciation and amortization 14,694,000 13,600,000 ------------ ------------ 12,892,000 13,496,000 Goodwill, net of accumulated amortization of $305,000 and $100,000 10,637,000 10,769,000 Other Assets 2,024,000 1,526,000 Restricted Cash 451,000 451,000 ------------ ------------ Total Assets $ 48,648,000 $ 47,877,000 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Current portion of long-term debt $ 1,627,000 $ 948,000 Accounts payable 1,819,000 1,104,000 Other accrued liabilities 3,045,000 3,735,000 Income taxes payable 415,000 0 ------------ ------------ Total Current Liabilities 6,906,000 5,787,000 Deferred income taxes 228,000 228,000 Long-term Debt and Other Obligations 19,272,000 20,518,000 Stockholders' Equity: Preferred stock, cumulative, par value $100 per share, 500,000 shares authorized, none issued 0 0 Common stock, par value $.30 per share, 30,000,000 shares authorized, 8,256,954 and 8,213,652 shares issued at February 29, 2000 and May 31, 1999, respectively 2,477,000 2,464,000 Additional paid-in capital 32,103,000 32,000,000 Accumulated deficit (12,209,000) (12,972,000) Unearned compensation (32,000) (51,000) Treasury stock at cost, 9,700 shares (97,000) (97,000) ------------ ------------ Total Stockholders' Equity 22,242,000 21,344,000 ------------ ------------ Total Liabilities and Stockholders' Equity $ 48,648,000 $ 47,877,000 ============ ============
See notes to unaudited consolidated condensed financial statements. -1- 4 TEAM, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)
THREE MONTHS ENDED NINE MONTHS ENDED FEBRUARY 29, FEBRUARY 28, FEBRUARY 29, FEBRUARY 28, 2000 1999 2000 1999 ------------ ------------ ------------ ------------ Revenues $16,503,000 $ 14,419,000 $48,250,000 $ 39,679,000 Operating expenses 9,765,000 8,614,000 27,766,000 23,248,000 ----------- ------------ ----------- ------------ Gross Margin 6,738,000 5,805,000 20,484,000 16,431,000 Selling, general and administrative expenses 5,814,000 5,055,000 18,027,000 14,598,000 Severance and other charge 0 1,241,000 0 1,241,000 ----------- ------------ ----------- ------------ Earnings (loss) before interest and taxes 924,000 (491,000) 2,457,000 592,000 Interest 404,000 238,000 1,192,000 543,000 ----------- ------------ ----------- ------------ Earnings (loss) before income taxes 520,000 (729,000) 1,265,000 49,000 Provision (benefit) for income taxes 159,000 (172,000) 502,000 207,000 ----------- ------------ ----------- ------------ Net income (loss) $ 361,000 $ (557,000) $ 763,000 $ (158,000) =========== ============ =========== ============ Net income (loss) per common share: Basic $ 0.04 $ (0.07) $ 0.09 $ (0.02) =========== ============ =========== ============ Diluted $ 0.04 $ (0.07) $ 0.09 $ (0.02) =========== ============ =========== ============ Weighted average number of shares outstanding: Basic 8,247,000 7,540,000 8,235,000 7,413,000 =========== ============ =========== ============ Diluted 8,247,000 7,540,000 8,282,000 7,413,000 =========== ============ =========== ============
See notes to unaudited consolidated condensed financial statements. -2- 5 TEAM, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
NINE MONTHS ENDED FEBRUARY 29, FEBRUARY 28, 2000 1999 ------------ ------------ Cash Flows from Operating Activities: Net income (loss) $ 763,000 $ (158,000) Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 2,222,000 1,692,000 Provision for amount due to former officers 0 816,000 Gain on sale of assets 0 (43,000) Non-current deferred income taxes 0 (250,000) Change in assets and liabilities (Increase) decrease: Accounts receivable (1,990,000) (172,000) Inventories 896,000 519,000 Prepaid expenses and other current assets (327,000) (42,000) Income taxes receivable 87,000 0 Increase (decrease): Accounts payable 715,000 (91,000) Other accrued liabilities (640,000) (861,000) Income taxes payable 415,000 (157,000) ----------- ------------ Net cash provided by operating activities 2,141,000 1,253,000 Cash Flows From Investing Activities: Capital expenditures (1,086,000) (1,982,000) Disposal of property and equipment 49,000 117,000 Other (947,000) (600,000) Acquisition of Climax, net of cash and equivalents acquired 0 (6,987,000) Payments of Climax notes payable at acquisition date 0 (2,893,000) ----------- ------------ Net cash used in investing activities (1,984,000) (12,345,000) Cash Flows From Financing Activities: Payments under debt agreements and other long-term obligations (617,000) (5,553,000) Proceeds from issuance of long-term debt 0 12,137,000 Issuance of common stock 135,000 3,453,000 ----------- ------------ Net cash provided by (used in) financing activities (482,000) 10,037,000 ----------- ------------ Net decrease in cash and cash equivalents (325,000) (1,055,000) Cash and cash equivalents at beginning of year 1,035,000 1,355,000 ----------- ------------ Cash and cash equivalents at end of period $ 710,000 $ 300,000 =========== ============ Supplemental disclosure of cash flow information: Cash paid during the period for interest $ 1,178,000 $ 433,000 =========== ============ Income taxes paid $ 264,000 $ 858,000 =========== ============
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES: In connection with the acquisition of Climax Portable Machine Tools, Inc., effective August 31, 1998, the Company issued 200,000 shares of its common stock with an assigned value of $4.00 per share. During the nine months ended February 28, 1999 the Company received a $35,000 note receivable (in addition to $12,000 cash) in connection with the sale of land. See notes to unaudited consolidated condensed financial statements. -3- 6 TEAM, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS 1. Method of Presentation General The interim financial statements are unaudited, but in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of results for such periods. The consolidated condensed balance sheet at May 31, 1999 is derived from the May 31, 1999 audited consolidated financial statements. The results of operations for any interim period are not necessarily indicative of results for the full year. These financial statements should be read in conjunction with the financial statements and notes thereto contained in the Company's annual report for the fiscal year ended May 31, 1999. New Accounting Standards In June 1998, the Financial Accounting Standards Board (FASB) issued statement of Financial Accounting Standards (SFAS) No. 133, "Accounting for Derivative Instruments and Hedging Activities," which establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities. SFAS No. 133 is effective for all fiscal quarters of fiscal years beginning after June 15, 2000. The Company is currently analyzing this statement to determine the impact on the Company's financial position, results of operations, and cash flows. 2. Dividends No dividends were paid during the first nine months of fiscal 2000 or 1999. Pursuant to the Company's Credit Agreement, the Company may not pay quarterly dividends without the consent of its senior lender. Future dividend payments will depend upon the Company's financial condition and other relevant matters. 3. Long-Term Debt and Other Obligations Long-term obligations consist of:
February 29, May 31, 2000 1999 ------------ ----------- Revolving credit agreement $ 7,690,000 $ 7,470,000 Term notes 10,874,000 11,307,000 Capital lease obligations 166,000 238,000 Agreements with former officers 1,410,000 1,657,000 Deferred compensation 451,000 451,000 Other 308,000 343,000 ----------- ----------- 20,899,000 21,466,000 Less current portion 1,627,000 948,000 ----------- ----------- Total $19,272,000 $20,518,000 =========== ===========
-4- 7 Effective August 26, 1998, the Company entered into a new credit facility with a new primary lender in the amount of $24,000,000. This new facility provides for (i) a $12,500,000 revolving loan, (ii) $9,500,000 in term loans for business acquisitions and (iii) a $2,000,000 mortgage loan to refinance existing real estate indebtedness. Amounts borrowed under the revolving credit loan are due September 30, 2001. Amounts borrowed against the term loans are due in quarterly installments in the amount of $339,000 beginning December 31, 1999, with the remaining principal balance to be paid on the term loans maturity date of September 30, 2003. Amounts borrowed against the mortgage loan are to be repaid in quarterly installments in the amount of $31,000 beginning December 31, 1998, with the remaining principal balance to be paid on the mortgage loan maturity date of September 30, 2008. Amounts outstanding under this facility bear interest at a marginal rate over the LIBOR rate or prime rate. The marginal rate is based on the Company's level of funded debt to cash flow, and ranges from 1.50% to 2.50% over the LIBOR rate and from 0.00% to 0.50% over the prime rate. The effective rate on outstanding borrowings under the new agreement is approximately 8.1%. In October 1998, the Company entered into an interest rate swap transaction on $4,500,000 of the outstanding term loans, exchanging a floating LIBOR rate (5.3% at the time of the swap) for a fixed rate of 5.19%. The maturity of this swap agreement is September 30, 2003. In December 1998, the Company executed two additional swap transactions related to $1,800,000 borrowed against the mortgage loan and to $2,000,000 of the amount outstanding under the revolver. A floating LIBOR rate (5.25% at the time of these swap transactions) was exchanged for fixed rates of 5.24% and 5.19% on the $1,800,000 and $2,000,000 notional amounts, respectively. The maturity of these swap agreements is December 31, 2001. Loans under the Company's bank credit facility are collateralized by substantially all of the assets of the Company. The terms of the agreement require the maintenance of certain financial ratios and limit investments, liens, leases and indebtedness, among other things. At February 29, 2000, the Company was in compliance with all credit facility covenants. 4. Earnings Per Share The following table is a reconciliation of the numerators and denominators of the basic and diluted earnings per share computations:
Three months ended February 29, 2000 Three months ended February 28, 1999 ------------------------------------------ ------------------------------------------- Income Shares Per-Share Income Shares Per-Share (Numerator) (Denominator) Amount (Numerator) (Denominator) Amount ----------- ------------- ---------- ----------- ------------- --------- Basic EPS: Net income $361,000 8,247,000 $0.04 $(557,000) 7,540,000 $(0.07) Effect of Dilutive Securities: Options -- -- -- -- -------- --------- --------- --------- Diluted EPS: Net income $361,000 8,247,000 $0.04 $(557,000) 7,540,000 $(0.07) ======== ========= ========= =========
Nine months ended February 29, 2000 Nine months ended February 28, 1999 --------------------------------------- ----------------------------------------- Income Shares Per-Share Income Shares Per-Share (Numerator) (Denominator) Amount (Numerator) (Denominator) Amount ----------- ------------- --------- ----------- ------------- --------- Basic EPS: Net income $763,000 8,235,000 $0.09 $(158,000) 7,413,000 $(0.02) Effect of Dilutive Securities: Options -- 47,000 -- -- -------- --------- --------- --------- Diluted EPS: Net income $763,000 8,282,000 $0.09 $(158,000) 7,413,000 $(0.02) ======== ========= ========= =========
-5- 8 5. Industry Segment Information The Company adopted SFAS No. 131, "Disclosure about Segments of an Enterprise and Related Information," in fiscal 1999. SFAS No. 131 requires that the Company disclose certain information about its operating segments where operating segments are defined as "components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance." Generally, financial information is required to be reported on the basis that is used internally for evaluating segment performance and deciding how to allocate resources to segments. Pursuant to SFAS No. 131, the Company has two reportable segments: industrial services and equipment sales and rentals. The industrial services segment includes services consisting of leak repair, hot tapping, emissions control monitoring, field machining, and mechanical inspection. The equipment sales and rental segment consists of the Climax business. The Company evaluates performance based on earnings before interest and income taxes. Inter-segment sales from Equipment Sales and Rentals to Industrial Services of $354,000 and $4,000 for the three months ended February 29, 2000 and February 28, 1999 and $453,000 and $271,000 for the nine months ended February 29, 2000 and February 28, 1999 are eliminated in the following schedule. Interest is not allocated to the segments. THREE MONTHS ENDED FEBRUARY 29, 2000
Industrial Equipment Corporate Services Sales& Rentals & Other Total ----------- -------------- ----------- ----------- Revenues $13,806,000 $2,697,000 $ 0 $16,503,000 =========== ========== =========== =========== Earnings before interest & taxes 1,729,000 194,000 (999,000) 924,000 Interest 0 0 404,000 404,000 ----------- ---------- ----------- ----------- Earnings before income taxes 1,729,000 194,000 (1,403,000) 520,000 =========== ========== =========== =========== Depreciation and amortization 435,000 177,000 99,000 711,000 =========== ========== =========== =========== Capital expenditures 397,000 114,000 0 511,000 =========== ========== =========== =========== Identifiable assets $35,940,000 $8,018,000 $ 4,690,000 $48,648,000 =========== ========== =========== ===========
THREE MONTHS ENDED FEBRUARY 28, 1999
Industrial Equipment Corporate Services Sales & Rentals & Other Total ----------- --------------- ----------- ------------ Revenues $11,916,000 $2,503,000 $ 0 $14,419,000 =========== ========== =========== ============ Earnings before interest & taxes 1,435,000 220,000 (2,146,000) (491,000) Interest 0 0 238,000 238,000 ----------- ---------- ----------- ------------ Earnings before income taxes 1,435,000 220,000 (2,384,000) (729,000) =========== ========== =========== ============ Depreciation and amortization 359,000 184,000 109,000 652,000 =========== ========== =========== ============ Capital expenditures 125,000 18,000 49,000 192,000 =========== ========== =========== ============ Identifiable assets $23,792,000 $8,747,000 $ 6,027,000 $38,566,000 =========== ========== =========== ============
-6- 9 NINE MONTHS ENDED FEBRUARY 29, 2000
Industrial Equipment Corporate Services Sales & Rentals & Other Total ----------- --------------- ----------- ----------- Revenues $40,528,000 $7,722,000 $ 0 $48,250,000 =========== ========== =========== =========== Earnings before interest & taxes 4,985,000 350,000 (2,878,000) 2,457,000 Interest 0 0 1,192,000 1,192,000 ----------- ---------- ----------- ----------- Earnings before income taxes 4,985,000 350,000 (4,070,000) 1,265,000 =========== ========== =========== =========== Depreciation and amortization 1,287,000 637,000 298,000 2,222,000 =========== ========== =========== =========== Capital expenditures 808,000 252,000 26,000 1,086,000 =========== ========== =========== =========== Identifiable assets $35,940,000 $8,018,000 $ 4,690,000 $48,648,000 =========== ========== =========== ===========
NINE MONTHS ENDED FEBRUARY 28, 1999
Industrial Equipment Corporate Services Sales & Rentals & Other Total ----------- --------------- ----------- ----------- Revenues $34,921,000 $4,758,000 $ 0 $39,679,000 =========== ========== =========== =========== Earnings before interest & taxes 4,912,000 184,000 (4,504,000) 592,000 Interest 0 0 543,000 543,000 ----------- ---------- ----------- ----------- Earnings before income taxes 4,912,000 184,000 (5,047,000) 49,000 =========== ========== =========== =========== Depreciation and amortization 1,030,000 338,000 324,000 1,692,000 =========== ========== =========== =========== Capital expenditures 1,118,000 64,000 800,000 1,982,000 =========== ========== =========== =========== Identifiable assets $23,792,000 $8,747,000 $ 6,027,000 $38,566,000 =========== ========== =========== ===========
-7- 10 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS THREE MONTHS ENDED FEBRUARY 29, 2000 COMPARED TO THREE MONTHS ENDED FEBRUARY 28, 1999 Revenues for the quarter ended February 29, 2000 were $16.5 million compared to $14.4 million for the corresponding period of the preceding year. $1.7 million of the $2.1 million increase is attributable to the inclusion of X Ray Inspection, Inc., ("XRI"), in Team's operating results for the 2000 period. (XRI was acquired in April 1999 and, consequently, was not included in the third quarter 1999 results). Earnings before interest and taxes, ("EBIT"), were $924 thousand in the 2000 quarter, an increase of $1.4 million from the loss before interest and taxes of $491 thousand reported in the 1999 quarter. The 1999 results reflected a special charge against earnings of $1.2 million for severance and other costs. Without regard to the 1999 special charge, EBIT in the 2000 quarter would have been improved over the 1999 quarter by $174 thousand, which is primarily a result of the inclusion of inspection services in operating results. Interest expense in the 2000 quarter was $404 thousand compared to $238 thousand in the same quarter of 1998. The $166 thousand increase is directly associated with borrowings in connection with the XRI acquisition and increases in interest rates over the past year. Income tax expense in the 2000 quarter reflects the recognition of $150 thousand in tax refunds associated with pre-acquisition periods. NINE MONTHS ENDED FEBRUARY 29, 2000 COMPARED TO NINE MONTHS ENDED FEBRUARY 28, 1999 Revenues for the nine months ended February 29, 2000 of $48.3 million were 21.6% greater than the $39.7 million reported in 1999. The increase is primarily attributable to the inclusion, in 2000, of the operating results of XRI and of Climax Portable Machine Tools, Inc., ("Climax"), which were both acquired in the fiscal year ended May 31, 1999. Operating results for the nine months of 1999 do not include XRI results and Climax results are only included for the six months in the 1999 year-to-date results. As reported in Form 10-Q for the quarter ended August 31, 1999, first quarter revenues and profits of the industrial services segment were negatively impacted by a softening in the market for the Company's traditional services, particularly in the refining and petrochemical industries. The second quarter of 1999 reflected improved trends in market conditions with traditional industrial service revenues increasing by $892 thousand over the first quarter ended August 31, 1999. Third quarter revenues for the industrial services segment were virtually identical to the second quarter. The improvements in the past two quarters have caused industrial service revenues for the nine months ended February 29, 2000 (excluding XRI) to be relatively flat as compared to the same period of 1999. XRI's inspection services contributed $6 million to industrial service revenues in the 2000 period. EBIT for the nine months ended February 29, 2000, was $2.5 million, or $1.9 million more than the same period of 1999. $1.2 million of the improvement was a result of the special charge taken in 1999, as discussed above. XRI results accounted for an increase of $898 thousand and Climax accounted for an increase of $166 thousand. Corporate general and administrative costs were reduced $385 thousand in the 2000 period as compared to 1999, offsetting the impact of the $787 thousand decline in EBIT in traditional industrial services -- which principally occurred in the first quarter ended August 31, 1999. As discussed above, the first quarter decline in industrial services profitability was due to a softening in the market for the Company's traditional services while, at the same time, field based personnel were being added to support new field machining and technical bolting service lines. In August 1999, overall personnel levels were reduced to meet -8- 11 the requirements of existing business conditions, which contributed to the improvement in second and third quarter 2000 results. LIQUIDITY AND CAPITAL RESOURCES At February 29, 2000, the Company's liquid working capital (cash and accounts receivable, less current liabilities) totaled $6.5 million, an increase of approximately $500 thousand since May 31, 1999. The Company utilizes excess operating funds to automatically reduce the amount outstanding under the revolving credit facility. At February 29, 2000, the outstanding balance under the revolving credit facility was $7.7 million and approximately $3.6 million was available to borrow under the facility. In the opinion of management, cash flow from operations, cash balances and available borrowings will be sufficient for the foreseeable future to finance anticipated working capital requirements, capital expenditures and debt service requirements. DISCLOSURE REGARDING FORWARD LOOKING STATEMENTS 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, 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. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK The Company holds certain floating-rate obligations. The exposure of these obligations to increase in short-term interest rates is limited by interest rate swap agreements entered into by the Company. There were no material quantitative or qualitative changes during the first nine months of fiscal 2000 in the Company's market risk sensitive instruments. -9- 12 PART II - OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits (27) Financial Data Schedule (b) Reports on Form 8-K No reports on Form 8-K were filed this quarter. -10- 13 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereto duly authorized. TEAM, INC (Registrant) Date: April 12, 2000 /s/ PHILIP J. HAWK -------------------------------------- Philip J. Hawk Chief Executive Officer and Director /s/ TED W. OWEN -------------------------------------- Ted W. Owen, Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) -11- 14 EXHIBIT INDEX
Exhibit Number Description - ------ ----------- (27) Financial Data Schedule.
EX-27 2 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED FINANCIAL STATEMENTS AND RELATED NOTES OF TEAM, INC. AND SUBSIDIARIES FOR THE NINE MONTHS ENDED FEBRUARY 29, 2000 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 9-MOS FEB-29-2000 FEB-29-2000 710,000 0 12,932,000 216,000 7,670,000 22,644,000 27,586,000 14,694,000 48,648,000 6,906,000 19,272,000 0 0 2,477,000 19,765,000 48,648,000 0 48,250,000 0 27,766,000 18,027,000 0 1,192,000 1,265,000 502,000 763,000 0 0 0 763,000 0.09 0.09 Includes $1,410,000 for compensation accruals of former employees.
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