-----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, SBCjg/rnq1hE/OJVROQsl3ThRKYqNAnq8gIZeACcOxOZ0uIrNMKsH6sIx286vILW ui1BE0o7DBHpNk40tvw9yw== 0001157523-04-008825.txt : 20040929 0001157523-04-008825.hdr.sgml : 20040929 20040929102348 ACCESSION NUMBER: 0001157523-04-008825 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040929 ITEM INFORMATION: Other Events ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20040929 DATE AS OF CHANGE: 20040929 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: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-08604 FILM NUMBER: 041051407 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 8-K 1 a4729966.txt TEAM 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) of THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported: September 29, 2004) TEAM, Inc. - -------------------------------------------------------------------------------- (Exact Name of Registrant as Specified in its Charter) Texas 0-9950 74-1765729 - ---------- ---------- -------------- (State or Other Jurisdiction (Commission File Number) (I.R.S. Employer of Incorporation) Identification No.) 200 Hermann Drive Alvin, Texas 77511 (Address of principal executive offices and zip code) Registrant's telephone number, including area code (281) 331-6154 --------------------------------------------------------------------------- ITEM 8.01 OTHER EVENTS. On September 29, 2004, the Registrant disseminated a Press Release announcing its earnings for the quarter ended August 31, 2004. The information contained in the Press Release dated September 29, 2004 is incorporated herein by reference and attached as Exhibit 99.1 hereto. ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS. (c) Exhibits. 99.1 The Registrant's Press Release dated September 29, 2004. 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 thereunto duly authorized. TEAM, INC. By: /s/ Ted W. Owen ----------------------------- Ted W. Owen Senior Vice President - Finance and Administration Date: September 29, 2004 EX-99.1 2 a4729966ex99.txt EXHIBIT 99.1 PRESS RELEASE Exhibit 99.1 Team Inc. Reports First Quarter Earnings and Affirms Positive Outlook ALVIN, Texas--(BUSINESS WIRE)--Sept. 29, 2004--Team Inc. (AMEX:TMI) today reported net income of $.03 per share (diluted basis) for its first quarter ending Aug. 31, 2004, significantly lower than the prior year first quarter. In the first quarter, Team reported earnings before interest and taxes (EBIT) of $0.7 million on revenues of $33.2 million, as compared to EBIT of $2.4 million on revenues of $24.9 million in the prior year period. Net income for the first quarter was $0.3 million or $.03 per share (diluted basis), compared to $1.4 million or $.17 per share, for the same quarter last year. The company's results were negatively impacted by the very low level of refinery turnaround activity during the quarter. As reported previously, due to extraordinarily high refining margins, refinery turnaround activity was substantially deferred during the quarter. "While this performance level is certainly below management's plan for the quarter, we are confident that our competitive position in our markets has not declined and that we will benefit from this deferred turnaround activity in future quarters," said Phil Hawk, Team's chairman and CEO. FY05 and FY06 Outlook The company affirmed its positive outlook for the remainder of the fiscal year. "While forecasting full fiscal year 2005 earnings is difficult due to the uncertainties inherent with the on-going major business integration activities, we are maintaining our earnings outlook of $0.84 to $0.90 per share for the current year ending May 31, 2005. For fiscal year 2006 ending May 31, 2006, and following the completion of integration activities, we expect our earnings per share to be in the $1.25 to $1.40 range," said Hawk. Looking beyond these near-term turnaround timing and integration issues, the company remains extremely positive about its prospects. The purchases of the Thermal Solutions and Cooperheat-MQS businesses nearly double Team's overall revenues to almost $200 million. At the same time, Team's market leadership in these service lines only enhances future organic growth potential as the company continues to capitalize on customer trends to consolidate service purchases with fewer, larger, more capable service companies. "We are very optimistic about our business strategy and business outlook. Once our new inspection and heat treating businesses are fully integrated, we expect to achieve profit levels comparable to Team's mechanical service lines. As reflected in our positive earnings outlook, this business growth at comparable margins will be extremely leveraging to Team's overall performance. We also remain confident in our continued organic growth opportunities across all our service lines," reported Hawk. "For the remainder of fiscal year 2005, we have a positive outlook and anticipate improving levels of turnaround activity throughout the remainder of the year. While we will need to work through challenges as we integrate the new businesses, we expect Team Cooperheat-MQS, the new unit for our combined inspection and heat treating services, to make a meaningful contribution to Team's performance this year," said Hawk. Industrial Services For the quarter, the Industrial Services Business Segment revenues were $29.8 million, up $7.5 million from the prior year quarter. The two acquisitions, Thermal Solutions and CH-MQS, contributed $7.3 million in sales during the quarter. Excluding the two acquisitions, the business segment experienced net growth of $0.2 million reflecting offsetting trends. The traditional legacy services (on-stream leak repair, hot tapping, and fugitive emissions monitoring) increased $1.9 million, about 13%, reflecting continued market penetration. However, this growth was nearly completely offset by declines in turnaround-related service activities (field machining, bolting, and field valve repair) that were down $1.9 million, approximately 51% less than the prior year. A significant portion of the reduced turnaround activity occurred within Team's Caribbean operations that had significant activity last year and practically none this year. As stated earlier, management believes much of this deferred turnaround activity will occur this fiscal year and will be reflected in our results later in the year. Segment operating profit during the quarter was $1.9 million, down from $3.7 million in the prior year first quarter. The primary causes of the decline were decreased sales in international operations and an approximate $0.6 million operating loss related to the two acquisitions. Equipment Sales and Rental The Equipment Sales and Rental Business Segment revenues for the quarter increased 29% to $3.4 million, based on improved U.S. and European sales. Operating profit was approximately $160,000, reversing a year-earlier loss. "Climax is off to improved start this year, with the outlook for the entire year continuing to be favorable," said Hawk. Corporate Expenses Corporate expenses were $1.4 million for the quarter, up about $0.2 million from the prior year. This increase is primarily due to the non-cash charge of $223,000 during the quarter that is related to the vesting of performance stock options granted previously to Team's CEO. All performance options related to this 1998 grant have now vested. Earnings Conference Call As previously announced, the Company has scheduled an earnings conference call for today, Sept. 29th at 11 a.m. Eastern Daylight Time (10 a.m. CDT). The call will be broadcast over the Web by Vcall and can be accessed on Team's Web site, 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 August 31, ------------------------- 2004 2003 ------------ ------------ Total Revenues $33,157,000 $24,918,000 ============ ============ Gross Margin $11,334,000 $10,112,000 Selling General and Administrative Expenses $10,423,000 $7,718,000 Non-cash compensation charge $223,000 $31,000 Other Expense (Income) ------------ ------------ Earnings before interest and taxes $688,000 $2,363,000 ============ ============ Pre-tax income $434,000 $2,218,000 Income tax expense (benefit) $165,000 $856,000 ------------ ------------ Net income $269,000 $1,362,000 ============ ============ Net income per common share-basic $0.03 $0.18 ============ ============ Net income per common share-diluted $0.03 $0.17 ============ ============ Weighted average shares outstanding: Basic 8,065,000 7,610,000 Diluted 8,905,000 8,250,000 Revenues Comprised of: Industrial Services $29,790,000 $22,315,000 Equipment sales and rentals 3,367,000 2,603,000 ------------ ------------ Total Revenues $33,157,000 $24,918,000 ============ ============ EBIT, by segment: Industrial Services $1,925,000 $3,650,000 Equipment sales and rentals 156,000 (95,000) Corporate (1,393,000) (1,192,000) ------------ ------------ $688,000 $2,363,000 ============ ============ TEAM INC. AND SUBSIDIARIES SUMMARY CONSOLIDATED BALANCE SHEET INFORMATION AUGUST 31 AND MAY 31, 2004 August 31 May 31 2004 2004 ------------- ------------ Current Assets $56,781,000 $41,267,000 Net Property, Plant and Equipment $28,047,000 $15,885,000 Other non-current assets $31,173,000 $17,244,000 ------------- ------------ Total Assets $116,001,000 $74,396,000 ============= ============ Current Liabilities $17,857,000 $13,555,000 Long term debt $53,556,000 $17,095,000 Other non-current liabilities and taxes $1,441,000 $1,447,000 Stockholders' equity $43,147,000 $42,299,000 ------------- ------------ Total liabilities and Stockholders' Equity $116,001,000 $74,396,000 ============= ============ CONTACT: Team Inc., Alvin Philip J. Hawk or Ted W. Owen, 281-331-6154 -----END PRIVACY-ENHANCED MESSAGE-----