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, 2015
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 April 7, 2015, we disseminated a press release announcing financial results for our third quarter of fiscal year 2015 ended February 28, 2015and affirming our expectations regarding financial performance for our 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 April 7, 2015
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, 2015 |
/s/ GREG L. BOANE Greg L. Boane Senior Vice President, Chief Financial Officer |
EXHIBIT 99.1
SUGAR LAND, Texas, April 7, 2015 (GLOBE NEWSWIRE) -- Team, Inc. (NYSE:TISI) today announced financial results for the third quarter ending February 28, 2015 of fiscal year 2015. Team reported adjusted earnings of $2.4 million ($0.11 per diluted share), versus adjusted earnings of $0.2 million ($0.01 per diluted share) for the prior year quarter. Revenues for the current year quarter increased by 7% to $174.6 million compared to revenues of $163.2 million for the prior year quarter. (Adjusted earnings in the current quarter exclude non-routine charges not indicative of Team's ongoing operating activities of $2.1 million (net of tax), or $0.10 per diluted share, related to a loss on Team's Venezuela investment ($0.8 million), legal fees related to defense of a Team patent ($0.7 million), foreign currency losses ($0.4 million) and equipment write-downs ($0.2 million). Adjusted earnings in the prior year quarter exclude $1.2 million (net of tax), or $0.06 per diluted share, of non-routine Venezuela currency revaluation loss).
Year-to-date revenues were $603.3 million, a 12% increase compared to revenues of $538.0 million for the prior year. Year-to-date adjusted earnings were $26.9 million ($1.23 per diluted share), versus adjusted earnings of $18.2 million ($0.86 per diluted share) for the prior year. (Adjusted earnings in the current year exclude $2.2 million (net of tax), or $0.10 per diluted share, as described above).
"We are pleased with our operating performance and progress," said Ted Owen, Team's President and Chief Executive Officer. "We remain on track to achieve our budgeted adjusted earnings of $2.00 per diluted share, which would be a 35% increase in year over year earnings and a record performance for Team."
Highlights
GAAP Earnings
Team's net income available to shareholders reported in accordance with generally accepted accounting principles (including non-routine items) was $0.3 million ($0.01 per diluted share) for the current quarter as compared to a net loss of $1.0 million (loss of $0.05 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.
Earnings Conference Call
In connection with this earnings release, Team will hold its quarterly conference call on Wednesday, April 8, 2015 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 866-270-6057 and use conference code 88003568 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, | |||
| 2015 | 2014 | 2015 | 2014 | |
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | |
| Revenues | $ 174,589 | $ 163,236 | $ 603,329 | $ 538,040 |
| Operating expenses | 127,877 | 121,540 | 421,448 | 382,532 |
| Gross margin | 46,712 | 41,696 | 181,881 | 155,508 |
| Selling, general and administrative expenses | 43,786 | 40,725 | 138,456 | 125,482 |
| Earnings from unconsolidated affiliates | -- | 29 | -- | 822 |
| Gain from revaluation of contingent consideration | -- | -- | -- | 2,138 |
| Operating income | 2,926 | 1,000 | 43,425 | 32,986 |
| Foreign currency loss | 673 | 1,868 | 1,489 | 2,398 |
| Loss on investment in Venezuela | 1,177 | -- | 1,177 | -- |
| Interest expense, net | 560 | 660 | 1,786 | 2,079 |
| Earnings (loss) before income taxes | 516 | (1,528) | 38,973 | 28,509 |
| Provision for income taxes | 187 | (557) | 14,031 | 10,406 |
| Net income (loss) | 329 | (971) | 24,942 | 18,103 |
| Less: Income attributable to non-controlling interest | 25 | 39 | 241 | 178 |
| Net income (loss) available to common shareholders | $ 304 | $ (1,010) | $ 24,701 | $ 17,925 |
| Earnings (loss) per common share: | ||||
| Basic | $ 0.01 | $ (0.05) | $ 1.20 | $ 0.88 |
| Diluted | $ 0.01 | $ (0.05) | $ 1.13 | $ 0.84 |
| Weighted average number of shares outstanding: | ||||
| Basic | 20,560 | 20,384 | 20,569 | 20,432 |
| Diluted | 21,740 | 21,193 | 21,844 | 21,284 |
| TEAM, INC. AND SUBSIDIARIES | ||||
| ADDITIONAL FINANCIAL INFORMATION | ||||
| (in thousands, except per share data) | ||||
| Three Months Ended | Nine Months Ended | |||
| February 28, | February 28, | |||
| 2015 | 2014 | 2015 | 2014 | |
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | |
| Adjusted Net income: | ||||
| Net income (loss) available to common shareholders | $ 304 | $ (1,010) | $ 24,701 | $ 17,925 |
| Non-routine Venezuela currency devaluation | -- | 1,858 | -- | 1,858 |
| Non-routine revaluation contingent consideration | -- | -- | -- | (2,138) |
| Non-routine acquisition costs | -- | -- | 164 | -- |
| Non-routine legal fees | 1,096 | -- | 1,096 | -- |
| Non-routine fixed asset write-down | 383 | -- | 383 | -- |
| Non-routine loss on investment in Venezuela | 1,177 | -- | 1,177 | -- |
| Non-routine foreign currency loss | 673 | -- | 673 | -- |
| Non-routine severance costs | -- | -- | -- | 742 |
| Tax impact of adjustments | (1,198) | (678) | (1,257) | (173) |
| Adjusted Net income | $ 2,435 | $ 170 | $ 26,937 | $ 18,214 |
| Adjusted Net income per common share: | ||||
| Basic | $ 0.12 | $ 0.01 | $ 1.31 | $ 0.89 |
| Diluted | $ 0.11 | $ 0.01 | $ 1.23 | $ 0.86 |
| Adjusted EBITDA: | ||||
| Operating income ("EBIT") | $ 2,926 | $ 1,000 | $ 43,425 | $ 32,986 |
| Non-routine revaluation contingent consideration | -- | -- | -- | (2,138) |
| Non-routine fixed asset write-down | 383 | -- | 383 | -- |
| Non-routine acquisition costs | -- | -- | 164 | -- |
| Non-routine legal fees | 1,096 | -- | 1,096 | -- |
| Non-routine severance costs | -- | -- | -- | 742 |
| Adjusted EBIT | 4,405 | 1,000 | 45,068 | 31,590 |
| Depreciation and amortization | 5,688 | 5,285 | 16,852 | 15,976 |
| Non-cash share-based compensation costs | 1,226 | 995 | 3,691 | 3,205 |
| Adjusted EBITDA | $ 11,319 | $ 7,280 | $ 65,611 | $ 50,771 |
| Segment Data: | ||||
| Revenues: | ||||
| IHT | $ 95,350 | $ 85,149 | $ 335,024 | $ 290,409 |
| MS | 64,999 | 63,440 | 217,066 | 200,196 |
| Quest | 14,240 | 14,647 | 51,239 | 47,435 |
| $ 174,589 | $ 163,236 | $ 603,329 | $ 538,040 | |
| Adjusted EBIT: | ||||
| IHT | $ 7,536 | $ 3,783 | $ 41,822 | $ 29,528 |
| MS | 3,740 | 2,939 | 19,417 | 17,120 |
| Quest | 1,196 | 1,170 | 8,313 | 5,986 |
| Corporate and shared support | (8,067) | (6,892) | (24,484) | (21,044) |
| $ 4,405 | $ 1,000 | $ 45,068 | $ 31,590 | |
| Adjusted EBITDA: | ||||
| IHT | $ 9,674 | $ 5,719 | $ 48,029 | $ 35,475 |
| MS | 5,591 | 4,740 | 25,015 | 22,511 |
| Quest | 2,626 | 2,513 | 12,567 | 10,019 |
| Corporate and shared support | (6,572) | (5,692) | (20,000) | (17,234) |
| $ 11,319 | $ 7,280 | $ 65,611 | $ 50,771 | |
| TEAM, INC. AND SUBSIDIARIES | ||
| SUMMARY CONSOLIDATED BALANCE SHEET INFORMATION | ||
| FEBRUARY 28, 2015 AND MAY 31, 2014 | ||
| (in thousands) | ||
| February 28, | May 31, | |
| 2015 | 2014 | |
| (unaudited) | ||
| Current assets | $ 252,139 | $ 248,814 |
| Property, plant and equipment, net | 93,124 | 89,961 |
| Other non-current assets | 138,288 | 146,166 |
| Total assets | $ 483,551 | $ 484,941 |
| Current liabilities | $ 61,050 | $ 75,143 |
| Long term debt net of current maturities | 86,445 | 73,721 |
| Other non-current liabilities | 18,709 | 19,032 |
| Stockholders' equity | 317,347 | 317,045 |
| Total liabilities and stockholders' equity | $ 483,551 | $ 484,941 |
| TEAM, INC. AND SUBSIDIARIES | ||
| SUMMARY CONSOLIDATED CASH FLOW INFORMATION | ||
| FEBRUARY 28, 2015 AND FEBRUARY 28, 2014 | ||
| (in thousands) | ||
| Nine Months Ended | ||
| February 28, | ||
| 2015 | 2014 | |
| (unaudited) | (unaudited) | |
| Net income | $24,942 | $18,103 |
| Depreciation, amortization and non-cash share based compensation expense | 20,543 | 19,181 |
| Loss on investment in Venezuela | 1,177 | -- |
| Gain on contingent consideration revaluation | -- | (2,138) |
| Working capital changes | (18,651) | 3,511 |
| Other items affecting operating cash flow | 3,201 | 1,858 |
| Net cash provided by operating activities | $31,212 | $40,515 |
| Capital expenditures | (18,712) | (23,758) |
| Cash used for business acquisitions, net | (2,949) | (10,175) |
| Other items affecting investing cash flow | (316) | 381 |
| Net cash used in investing activities | ($21,977) | ($33,552) |
| Borrowings of debt, net | 15,690 | 9,800 |
| Deferred consideration payments | (1,000) | (1,000) |
| Contingent consideration payments | (1,000) | -- |
| Purchases of treasury stock | (21,138) | (13,334) |
| Cash associated with share-based payment arrangements, net | 2,676 | 4,165 |
| Net cash used in financing activities | ($4,772) | ($369) |
| Effect of exchange rate changes | (3,549) | (1,294) |
| Change in cash and cash equivalents | $914 | $5,300 |
CONTACT: Greg L. Boane (281) 388-5541