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): August 5, 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: |
||
| [ ] | 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 August 5, 2014, we disseminated a press release announcing our fiscal year 2014 financial results and our earnings expectations regarding expected financial performance for the fiscal year ending May 31, 2015. The information in Exhibit 99.1 is being furnished, not filed, pursuant to Item 2.02 of this Form 8-K. 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 listed in our Annual Reports on Form 10-K and our Quarterly Reports on Form 10-Q as filed with the Securities and Exchange Commission. We assume no obligation to publicly update or revise any forward-looking statements made herein or any other forward-looking statements made by us, whether as new information, future events, or otherwise.
Item 9.01. Financial Statements and Exhibits.
(c)
Exhibits. The following exhibit is furnished as part of Item 2.02 of this Current Report on Form 8-K:
Exhibit number
Description
99.1
Team, Inc.'s Press Release issued August 5, 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: August 5, 2014 |
/s/ TED W. OWEN Ted W. Owen President and Chief Financial Officer |
EXHIBIT 99.1
SUGAR LAND, Texas, Aug. 5, 2014 (GLOBE NEWSWIRE) -- Team, Inc. (NYSE:TISI) today announced financial results for the fiscal year ending May 31, 2014. Team reported earnings, adjusted for non-routine items, of $31.5 million ($1.48 per diluted share), versus adjusted net income of $32.8 million ($1.55 per diluted share) for the prior year. Revenues for the year ended May 31, 2014, were $750 million, a 5% increase compared to revenues of $714 million for the prior year. Fourth quarter revenues and adjusted earnings were $211 million and $13.3 million ($0.63 per diluted share), respectively, compared to $201 million and $11.5 million ($0.54 per share) in last year's fourth quarter. (Adjusted earnings exclude the impact of the Venezuelan currency revaluation discussed below as well as certain other non-routine items specified in the accompanying tables).
Operating results for the fourth quarter were consistent with the Company's pre-announcement in June 2014, except that adjusted earnings per share were slightly higher than pre-announcement results due to a lower effective tax rate for the quarter and for the full fiscal year.
"While fiscal year 2014 was negatively impacted by very difficult weather conditions in the third quarter and project delays throughout the year, especially related to many of Quest's more complex international projects, we are well positioned to take advantage of what we believe will be robust market opportunities in fiscal 2015 and beyond," said Philip J. Hawk, Team's Chairman and CEO.
Fourth Quarter Highlights
Venezuelan Revaluation
In June 2014, Team announced that it incurred an additional $2.1 million currency exchange loss in the fourth quarter associated with a further revaluation of its Venezuelan business due to foreign currency exchange rate devaluations. For the fiscal year, non-routine currency exchange losses associated with Venezuelan revaluations totaled $4 million on a pre-tax basis.
GAAP Earnings
Team's net income available to shareholders reported in accordance with generally accepted accounting principles (including non-routine items) was $29.9 million ($1.40 per diluted share) for fiscal year 2014 as compared to $32.4 million ($1.53 per diluted share) in the prior year. Certain non-routine items have been excluded when arriving at adjusted earnings. A reconciliation of net income, reported in accordance with generally accepted accounting principles, to adjusted net income is contained in the tables below.
FY2015 Earnings Expectations
As disclosed in the June 2014 pre-announcement, the Company has adopted a budget for fiscal year 2015 of $842 million in revenue with planned earnings of $2.00 per share. "We acknowledge that our recent track record in issuing earnings guidance has not been as good as we would like," said Ted W. Owen, Team's President and Chief Financial Officer. "Consequently, we are suspending the issuance of formal guidance until we can demonstrate that we can forecast our results better. Until then, we will report our internal expectations, and discuss our degree of confidence in meeting those internal expectations," said Mr. Owen.
Earnings Conference Call
In connection with this earnings release, Team will hold its quarterly conference call on Wednesday, August 6, 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 800-295-4740 and use conference code 36036155 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 | Twelve Months Ended | |||
| May 31, | May 31, | |||
| 2014 | 2013 | 2014 | 2013 | |
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | |
| Revenues | $ 211,487 | $ 201,196 | $ 749,527 | $ 714,311 |
| Operating expenses | 145,079 | 139,122 | 527,611 | 501,346 |
| Gross margin | 66,408 | 62,074 | 221,916 | 212,965 |
| Selling, general and administrative expenses | 45,973 | 43,075 | 171,455 | 158,355 |
| Earnings from unconsolidated affiliates | -- | 130 | 822 | 992 |
| Gain from revaluation of contingent consideration | -- | -- | 2,138 | -- |
| Operating income | 20,435 | 19,129 | 53,421 | 55,602 |
| Foreign currency loss | 1,787 | 26 | 4,185 | 943 |
| Interest expense, net | 772 | 715 | 2,851 | 2,734 |
| Earnings before income taxes | 17,876 | 18,388 | 46,385 | 51,925 |
| Provision for income taxes | 5,830 | 6,802 | 16,236 | 19,211 |
| Net income | 12,046 | 11,586 | 30,149 | 32,714 |
| Less: Income attributable to non-controlling interest | 116 | 112 | 294 | 278 |
| Net income available to common shareholders | $ 11,930 | $ 11,474 | $ 29,855 | $ 32,436 |
| Earnings per common share: | ||||
| Basic | $ 0.58 | $ 0.56 | $ 1.46 | $ 1.61 |
| Diluted | $ 0.56 | $ 0.54 | $ 1.40 | $ 1.53 |
| Weighted average number of shares outstanding: | ||||
| Basic | 20,462 | 20,498 | 20,439 | 20,203 |
| Diluted | 21,265 | 21,384 | 21,285 | 21,166 |
| TEAM, INC. AND SUBSIDIARIES | |||||||
| ADDITIONAL FINANCIAL INFORMATION | |||||||
| (in thousands, except per share data) | |||||||
| Three Months Ended | Twelve Months Ended | ||||||
| May 31, | May 31, | ||||||
| 2014 | 2013 | 2014 | 2013 | ||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||
| Adjusted Net income: | |||||||
| Net income available to common shareholders | $ 11,930 | $ 11,474 | $ 29,855 | $ 32,436 | |||
| Non-routine Venezuela currency devaluation | 2,104 | -- | 3,962 | 597 | |||
| Non-routine revaluation contingent consideration | -- | -- | (2,138) | -- | |||
| Non-routine severance costs | -- | -- | 742 | -- | |||
| Tax impact of adjustments | (725) | -- | (898) | (221) | |||
| Adjusted Net income | $ 13,309 | $ 11,474 | $ 31,523 | $ 32,812 | |||
| Adjusted Net income per common share: | |||||||
| Basic | $ 0.65 | $ 0.56 | $ 1.54 | $ 1.62 | |||
| Diluted | $ 0.63 | $ 0.54 | $ 1.48 | $ 1.55 | |||
| Adjusted EBITDA: | |||||||
| Operating income ("EBIT") | $ 20,435 | $ 19,129 | $ 53,421 | $ 55,602 | |||
| Non-routine revaluation contingent consideration | -- | -- | (2,138) | -- | |||
| Non-routine severance costs | -- | -- | 742 | -- | |||
| Adjusted EBIT | 20,435 | 19,129 | 52,025 | 55,602 | |||
| Depreciation and amortization | 5,492 | 5,210 | 21,468 | 19,664 | |||
| Non-cash share-based compensation costs | 1,034 | 909 | 4,239 | 3,931 | |||
| Adjusted EBITDA | $ 26,961 | $ 25,248 | $ 77,732 | $ 79,197 | |||
| Segment Data: | |||||||
| Revenues: | |||||||
| IHT | $ 117,850 | $ 108,146 | $ 408,259 | $ 380,518 | |||
| MS | 75,126 | 75,349 | 275,322 | 276,360 | |||
| Quest | 18,511 | 17,701 | 65,946 | 57,433 | |||
| $ 211,487 | $ 201,196 | $ 749,527 | $ 714,311 | ||||
| Adjusted EBIT: | |||||||
| IHT | $ 16,121 | $ 14,896 | $ 45,649 | $ 45,307 | |||
| MS | 9,057 | 8,179 | 26,177 | 29,228 | |||
| Quest | 3,274 | 3,456 | 9,260 | 9,400 | |||
| Corporate and shared support | (8,017) | (7,402) | (29,061) | (28,333) | |||
| $ 20,435 | $ 19,129 | $ 52,025 | $ 55,602 | ||||
| Adjusted EBITDA: | |||||||
| IHT | $ 18,127 | $ 16,865 | $ 53,602 | $ 52,980 | |||
| MS | 10,874 | 10,021 | 33,385 | 36,235 | |||
| Quest | 4,716 | 4,681 | 14,735 | 13,817 | |||
| Corporate and shared support | (6,756) | (6,319) | (23,990) | (23,835) | |||
| $ 26,961 | $ 25,248 | $ 77,732 | $ 79,197 | ||||
| Revenues by Service Type: | |||||||
| Inspection and assessment | $ 109,463 | $ 94,470 | $ 384,284 | $ 338,343 | |||
| Turnaround | 61,429 | 69,042 | 205,783 | 231,916 | |||
| On-stream services | 40,595 | 37,684 | 159,460 | 144,052 | |||
| $ 211,487 | $ 201,196 | $ 749,527 | $ 714,311 | ||||
| TEAM, INC. AND SUBSIDIARIES | ||
| SUMMARY CONSOLIDATED BALANCE SHEET INFORMATION | ||
| May 31, 2014 AND MAY 31, 2013 | ||
| (in thousands) | ||
| May 31, | May 31, | |
| 2014 | 2013 | |
| Current assets | $ 248,814 | $ 246,918 |
| Property, plant and equipment, net | 89,961 | 74,939 |
| Other non-current assets | 146,166 | 138,346 |
| Total assets | $ 484,941 | $ 460,203 |
| Current liabilities | $ 75,143 | $ 72,804 |
| Long term debt net of current maturities | 73,721 | 72,946 |
| Other non-current liabilities | 19,032 | 22,263 |
| Stockholders' equity | 317,045 | 292,190 |
| Total liabilities and stockholders' equity | $ 484,941 | $ 460,203 |
| TEAM, INC. AND SUBSIDIARIES | ||
| SUMMARY CONSOLIDATED CASH FLOW INFORMATION | ||
| May 31, 2014 AND MAY 31, 2013 | ||
| (in thousands) | ||
| Twelve Months Ended | ||
| May 31, | ||
| 2014 | 2013 | |
| Net income | $ 30,149 | $ 32,714 |
| Depreciation, amortization and non-cash share based compensation expense | 25,707 | 23,595 |
| Gain on contingent consideration revaluation | (2,138) | -- |
| Foreign currency loss | 4,185 | 943 |
| Working capital changes | (3,481) | (3,121) |
| Other items affecting operating cash flow | (1,561) | 4,512 |
| Net cash provided by operating activities | $ 52,861 | $ 58,643 |
| Capital expenditures | (33,016) | (26,068) |
| Cash used for business acquisitions, net | (10,175) | (18,589) |
| Other items affecting investing cash flow | 2,582 | 1,758 |
| Net cash used in investing activities | ($40,609) | ($42,899) |
| Borrowings of debt, net | -- | (13,600) |
| Deferred consideration payments | (1,000) | -- |
| Purchases of treasury stock | (13,334) | -- |
| Cash associated with share-based payment arrangements, net | 4,691 | 9,737 |
| Net cash provided by financing activities | ($9,643) | ($3,863) |
| Effect of exchange rate changes | (2,154) | (157) |
| . | ||
| Change in cash and cash equivalents | $ 455 | $ 11,724 |
CONTACT: Ted W. Owen
(281) 331-6154