EX-99.1 2 a5118670ex991.txt EXHIBIT 99.1 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