UNITED STATES
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): April 7, 2014
TEAM, Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 001-08604 | 74-1765729 | ||
| (State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
| 13131 Dairy Ashford, Suite 600 Sugar Land, Texas 77478 |
| (Address of Principal Executive Offices and Zip Code) |
Registrant’s telephone number, including area code: (281) 331-6154
Not Applicable
(Former name or former address, if changed since last report)
| Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): |
||
| [ ] | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
| [ ] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
| [ ] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
| [ ] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |
Item 2.02. Results of Operations and Financial Condition.
On April 7, 2014, we disseminated a press release announcing financial results for our third quarter of fiscal year 2014 ended February 28, 2014, and affirming our earnings guidance regarding expected financial performance for our fiscal year ending May 31, 2014. The information in Exhibit 99.1 is being furnished, not filed. By furnishing the information in this Form 8-K and the attached exhibit, we are making no admission as to the materiality of any information in this Form 8-K or the exhibit.
This Form 8-K contains forward looking statements. We based our forward-looking statements on our current expectations, estimates and projections about ourselves and our industry. We caution that these statements are not guarantees of future performance and involve risks, uncertainties and assumptions that we cannot predict. In addition, we based many of these forward-looking statements on assumptions about future events that may prove to be inaccurate. Accordingly, our actual results may differ materially from the future performance that we have expressed or forecast in the forward-looking statements. Differences between actual results and any future performance suggested in these forward-looking statements could result from a variety of factors, including those enumerated in our Forms 10-K and Forms 10-Q as filed with the Securities and Exchange Commission.
Item 9.01. Financial Statements and Exhibits.
(c)
Exhibits. The following exhibit is furnished as part of Items 2.02 and 7.01 of this Current Report on Form 8-K:
Exhibit number
Description
99.1
Team, Inc.'s Press Release issued April 7, 2014
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| TEAM, Inc. |
||
|
Date: April 7, 2014 |
/s/ TED W. OWEN Ted W. Owen Executive Vice President and Chief Financial Officer |
EXHIBIT 99.1
SUGAR LAND, Texas, April 7, 2014 (GLOBE NEWSWIRE) -- Team, Inc. (NYSE:TISI) today announced financial results for its fiscal year 2014 third quarter ending February 28, 2014. Team reported adjusted earnings of $0.01 per diluted share versus an adjusted loss of $0.01 per diluted share in the third quarter of the prior year. Revenues for the third quarter were $163 million compared to revenues of $151 million for the prior year quarter. Adjusted net income attributable to shareholders was $0.2 million, compared to an adjusted net loss available to shareholders of $0.2 million in the prior year quarter. The adjusted income for the current quarter excludes a $1.9 million pre-tax, non-routine charge associated with the Venezuelan currency revaluation announced in Team's press release issued on March 20, 2014. Team's earnings for the quarter as measured under generally accepted accounting principles, which includes this revaluation charge, was a loss of $0.05 per diluted share and a net loss attributable to shareholders of $1.0 million.
For the fiscal year to date, adjusted earnings were $0.86 per diluted share. Year to date revenues were $538 million and adjusted net income available to shareholders was $18.2 million.
"As indicated in our March 20th release, we believe weather-related deferrals and disruptions reduced our revenues by about $6 million and our earnings by $0.10 to $0.12 per share in the third quarter," said Phil Hawk, Team's Chairman and Chief Executive Officer.
Highlights and other financial data for Third Quarter
Fourth Quarter Earnings and Revenue Guidance
On March 20, 2014, Team announced that it expects fourth quarter earnings to be $0.65 to $0.80 per diluted share and fourth quarter revenues to be in the range of $210 million to $225 million; implying full year earnings (adjusted) in the range of $1.50 to $1.65 per diluted share and full year revenues between $750 million to $765 million.
Venezuelan Revaluation
Additionally, Team announced on March 20, 2014, that it has revalued the net assets of its Venezuelan business at the beginning of the third quarter, resulting in a $1.9 million non-routine, non-cash charge ($0.06 per share). Team also advised that additional revaluations are likely in the future as a Venezuelan state-run market based currency exchange has been put in place by the Central Bank of Venezuela.
Earnings Conference Call
In connection with this earnings release, Team will hold its quarterly conference call on Tuesday, April 8, 2014 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.teamindustrialservices.com. Individuals wishing to participate in the conference call by phone may call 866-713-8563 and use conference code 80066122 when prompted.
About Team, Inc.
Headquartered near Houston, Texas, Team, Inc. is a leading provider of specialty industrial services, including inspection and 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 in over 125 locations 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.
| TEAM, INC. AND SUBSIDIARIES | ||||
| SUMMARY OF OPERATING RESULTS | ||||
| (in thousands, except per share data) | ||||
| Three Months Ended | Nine Months Ended | |||
| February 28, | February 28, | |||
| 2014 | 2013 | 2014 | 2013 | |
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | |
| Revenues | $ 163,236 | $ 150,975 | $ 538,040 | $ 513,115 |
| Operating expenses | 121,540 | 112,084 | 382,532 | 362,224 |
| Gross margin | 41,696 | 38,891 | 155,508 | 150,891 |
| SG&A expenses | 40,725 | 38,278 | 125,482 | 115,280 |
| Earnings from unconsolidated affiliates | 29 | (4) | 822 | 862 |
| Gain from revaluation of contingent consideration | -- | -- | 2,138 | -- |
| Operating income | 1,000 | 609 | 32,986 | 36,473 |
| Foreign currency loss | 1,868 | 729 | 2,398 | 917 |
| Interest expense, net | 660 | 743 | 2,079 | 2,019 |
| Earnings (loss) before income taxes | (1,528) | (863) | 28,509 | 33,537 |
| Provision for income taxes | (557) | (319) | 10,406 | 12,409 |
| Net income (loss) | (971) | (544) | 18,103 | 21,128 |
| Less: Income attributable to non-controlling interest | 39 | (9) | 178 | 166 |
| Net income (loss) available to shareholders | $ (1,010) | $ (535) | $ 17,925 | $ 20,962 |
| Earnings (loss) per common share: | ||||
| Basic | $ (0.05) | $ (0.03) | $ 0.88 | $ 1.04 |
| Diluted | $ (0.05) | $ (0.03) | $ 0.84 | $ 0.99 |
| Weighted average number of shares outstanding: | ||||
| Basic | 20,384 | 20,387 | 20,432 | 20,104 |
| Diluted | 21,193 | 21,311 | 21,284 | 21,078 |
| TEAM, INC. AND SUBSIDIARIES | ||||
| ADDITIONAL FINANCIAL INFORMATION | ||||
| (in thousands, except per share data) | ||||
| Three Months Ended | Nine Months Ended | |||
| February 28, | February 28, | |||
| 2014 | 2013 | 2014 | 2013 | |
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | |
| Adjusted Net income: | ||||
| Net income (loss) available to common shareholders | $ (1,010) | $ (535) | $ 17,925 | $ 20,962 |
| Non-routine Venezuela currency devaluation | 1,858 | 597 | 1,858 | 597 |
| Non-routine revaluation of contingent consideration | -- | -- | (2,138) | -- |
| Non-routine severance costs | -- | -- | 742 | -- |
| Tax impact of adjustments | (678) | (221) | (173) | (221) |
| Adjusted Net income (loss) | $ 170 | $ (159) | $ 18,214 | $ 21,338 |
| Adjusted Net income (loss) per common share: | ||||
| Basic | $ 0.01 | $ (0.01) | $ 0.89 | $ 1.06 |
| Diluted | $ 0.01 | $ (0.01) | $ 0.86 | $ 1.01 |
| Adjusted EBITDA: | ||||
| Operating income ("EBIT") | $ 1,000 | $ 609 | $ 32,986 | $ 36,473 |
| Non-routine revaluation of contingent consideration | -- | -- | (2,138) | -- |
| Non-routine severance costs | -- | -- | 742 | -- |
| Adjusted EBIT | 1,000 | 609 | 31,590 | 36,473 |
| Depreciation and amortization | 5,285 | 4,800 | 15,976 | 14,454 |
| Non-cash share-based compensation costs | 995 | 902 | 3,205 | 3,022 |
| Adjusted EBITDA | $ 7,280 | $ 6,311 | $ 50,771 | $ 53,949 |
| Segment Data: | ||||
| Revenues: | ||||
| IHT | $ 85,149 | $ 81,227 | $ 290,409 | $ 272,372 |
| MS | 63,440 | 59,513 | 200,196 | 201,011 |
| Quest | 14,647 | 10,235 | 47,435 | 39,732 |
| $ 163,236 | $ 150,975 | $ 538,040 | $ 513,115 | |
| Adjusted EBIT: | ||||
| IHT | $ 3,783 | $ 4,439 | $ 29,528 | $ 30,411 |
| MS | 2,939 | 3,346 | 17,120 | 21,049 |
| Quest | 1,170 | (62) | 5,986 | 5,944 |
| Corporate and shared support | (6,892) | (7,114) | (21,044) | (20,931) |
| $ 1,000 | $ 609 | $ 31,590 | $ 36,473 | |
| Adjusted EBITDA: | ||||
| IHT | $ 5,719 | $ 6,305 | $ 35,475 | $ 36,115 |
| MS | 4,740 | 5,117 | 22,511 | 26,214 |
| Quest | 2,513 | 976 | 10,019 | 9,137 |
| Corporate and shared support | (5,692) | (6,087) | (17,234) | (17,517) |
| $ 7,280 | $ 6,311 | $ 50,771 | $ 53,949 | |
| Revenues by Service Type: | ||||
| Inspection and assessment | $ 76,752 | $ 71,347 | $ 274,821 | $ 247,664 |
| Turnaround | 48,150 | 41,869 | 144,354 | 157,877 |
| On-stream services | 38,334 | 37,759 | 118,865 | 107,574 |
| $ 163,236 | $ 150,975 | $ 538,040 | $ 513,115 | |
| TEAM, INC. AND SUBSIDIARIES | ||
| SUMMARY CONSOLIDATED BALANCE SHEET INFORMATION | ||
| FEBRUARY 28, 2014 AND MAY 31, 2013 | ||
| (in thousands) | ||
| February 28, | May 31, | |
| 2014 | 2013 | |
| (unaudited) | ||
| Current assets | $ 235,400 | $ 246,918 |
| Property, plant and equipment, net | 85,392 | 74,939 |
| Other non-current assets | 146,705 | 138,346 |
| Total assets | $ 467,497 | $ 460,203 |
| Current liabilities | $ 60,606 | $ 72,804 |
| Long term debt net of current maturities | 83,602 | 72,946 |
| Other non-current liabilities | 20,797 | 22,263 |
| Stockholders' equity | 302,492 | 292,190 |
| Total liabilities and stockholders' equity | $ 467,497 | $ 460,203 |
| TEAM, INC. AND SUBSIDIARIES | ||
| SUMMARY CONSOLIDATED CASH FLOW INFORMATION | ||
| FEBRUARY 28, 2014 AND FEBRUARY 28, 2013 | ||
| (in thousands) | ||
| Nine Months Ended | ||
| February 28, | ||
| 2014 | 2013 | |
| (unaudited) | (unaudited) | |
| Net income | $ 18,103 | $ 21,128 |
| Depreciation, amortization and non-cash share based compensation expense | 19,181 | 17,476 |
| Gain on contingent consideration revaluation | (2,138) | -- |
| Foreign currency loss | 2,398 | 917 |
| Working capital changes | 2,511 | (6,158) |
| Other items affecting operating cash flow | (540) | 4,853 |
| Net cash provided by operating activities | $ 39,515 | $ 38,216 |
| Capital expenditures | (23,758) | (18,803) |
| Cash used for business acquisitions, net | (10,175) | (18,589) |
| Other items affecting investing cash flow | 381 | 1,070 |
| Net cash used in investing activities | ($33,552) | ($36,322) |
| Borrowings of debt, net | 9,800 | 2,400 |
| Purchases of treasury stock | (13,334) | -- |
| Cash associated with share-based payment arrangements, net | 4,165 | 9,727 |
| Net cash provided by financing activities | $631 | $12,127 |
| Effect of exchange rate changes | (1,294) | (76) |
| . | ||
| Change in cash and cash equivalents | $ 5,300 | $ 13,945 |
CONTACT: Ted W. Owen
(281) 331-6154