TEAM, INC. AND SUBSIDIARIES

PRO FORMA CONSOLIDATED BALANCE SHEET

FEBRUARY 29, 2004

(UNAUDITED)

	Team, Inc.			Thermal Solutions, Inc.			Pro Forma Adjustments			Pro Forma Consolidated
ASSETS
Current Assets:
Cash and cash equivalents	$	887,000		$	457,000		$	—		$	1,344,000
Accounts receivable		20,655,000			3,704,000			—			24,359,000
Inventories		9,581,000			222,000			—			9,803,000
Prepaid expenses and other current assets		1,922,000			115,000			—			2,037,000
Total Current Assets		33,045,000			4,498,000			—			37,543,000
Property, Plant and Equipment:
Land and buildings		7,386,000			—			—			7,386,000
Machinery and equipment		25,029,000			5,639,000			(2,507,000	)(1)		28,161,000
		32,415,000			5,639,000			(2,507,000	)		35,547,000
Less accumulated depreciation and amortization		19,040,000			2,507,000			(2,507,000	)(1)		19,040,000
		13,375,000			3,132,000			—			16,507,000
Goodwill and other intangibles		10,049,000			—			5,810,000	(1)		15,859,000
Other assets		296,000			25,000			—			321,000
Total Assets	$	56,765,000		$	7,655,000		$	5,810,000		$	70,230,000
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Current portion of long-term debt	$	1,482,000		$	172,000		$	—		$	1,654,000
Accounts payable		3,835,000			686,000			—			4,521,000
Accrued liabilities		4,284,000			216,000			475,000	(2)		4,975,000
Income taxes payable		742,000			—			—			742,000
Short term notes		—			500,000			(500,000	)(3)		—
Total Current Liabilities		10,343,000			1,574,000			(25,000	)		11,892,000
Long-term debt		9,515,000			—			7,796,000	(3)		17,311,000
Other long-term liabilities		811,000			—			—			811,000
Minority interest		228,000			—			—			228,000
Total Liabilities		20,897,000			1,574,000			7,771,000			30,242,000
Stockholders’ Equity:
Common stock		2,604,000			769,000			(682,000	)(4)		2,691,000
Additional paid-in capital		34,660,000			—			4,033,000	(4)		38,693,000
Retained earnings		3,626,000			6,059,000			(6,059,000	)(4)		3,626,000
Accumulated other comprehensive gain (loss)		10,000			—			—			10,000
Treasury stock at cost		(5,032,000	)		(747,000	)		747,000	(4)		(5,032,000	)
Total Stockholders’ Equity		35,868,000			6,081,000			(1,961,000	)		39,988,000
Total Liabilities and Stockholders’ Equity	$	56,765,000		$	7,655,000		$	5,810,000		$	70,230,000

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TEAM, INC. AND SUBSIDIARIES

PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS

YEAR ENDED MAY 31, 2003

(UNAUDITED)

	Team, Inc.		Thermal Solutions, Inc.		Pro Forma Adjustments			Pro Forma Consolidated
Revenues	$	91,876,000	$	16,247,000	$	—		$	108,123,000
Operating expenses		54,684,000		11,320,000		—			66,004,000
Gross margin		37,192,000		4,927,000		—			42,119,000
Selling, general and administrative expenses		29,183,000		3,884,000		250,000	(1)		33,317,000
Non-cash G&A compensation cost		115,000		—		—			115,000
Other expense (income)		150,000		—		—			150,000
Earnings before interest and taxes		7,744,000		1,043,000		(250,000	)		8,537,000
Interest expense, net		601,000		54,000		289,000	(2)		944,000
Earnings before income taxes		7,143,000		989,000		(539,000	)		7,593,000
Provision for income taxes		2,741,000		—		171,000	(3)		2,912,000
Net income	$	4,402,000	$	989,000	$	(710,000	)	$	4,681,000
Net income per common share:
Basic	$	0.57						$	0.59
Diluted	$	0.53						$	0.54
Weighted average number of shares outstanding:
Basic		7,707,000		—		288,000	(4)		7,995,000
Diluted		8,369,000		—		288,000	(4)		8,657,000

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TEAM, INC. AND SUBSIDIARIES

PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS

NINE MONTHS ENDED FEBRUARY 29, 2004

(UNAUDITED)

	Team, Inc.		Thermal Solutions, Inc.		Pro Forma Adjustments			Pro Forma Consolidated
Revenues	$	75,862,000	$	10,666,000	$	—		$	86,528,000
Operating expenses		45,580,000		7,268,000		—			52,848,000
Gross Margin		30,282,000		3,398,000		—			33,680,000
Selling, general and administrative expenses		23,524,000		2,812,000		188,000	(1)		26,524,000
Non-cash G&A compensation cost		94,000		—		—			94,000
Earnings before interest and taxes		6,664,000		586,000		(188,000	)		7,062,000
Interest expense, net		396,000		18,000		239,000	(2)		653,000
Earnings before income taxes		6,268,000		568,000		(427,000	)		6,409,000
Provision for income taxes		2,374,000		—		54,000	(3)		2,428,000
Net income	$	3,894,000	$	568,000	$	(481,000	)	$	3,981,000
Net income per common share:
Basic	$	0.51						$	0.50
Diluted	$	0.47						$	0.46
Weighted average number of shares outstanding:
Basic		7,629,000		—		288,000	(4)		7,917,000
Diluted		8,326,000		—		288,000	(4)		8,614,000

19

TEAM, INC. AND SUBSIDIARIES

NOTES TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Balance Sheet

The pro forma adjustments to the consolidated balance sheet reflect the following:

(1) Allocation of purchase price of Thermal Solutions:

Cash and borrowings	$	7,796,000
Common stock issued		4,120,000
Transaction costs		475,000
		12,391,000
Fair value of net assets acquired		6,581,000
Excess purchase price to be allocated to goodwill and covenant not to compete	$	5,810,000

The purchase accounting adjustments to reflect the fair value of assets and liabilities was based on management’s evaluation as of this filing date and are subject to change pending final evaluation of the assets and liabilities. At this time, the net book value of property, plant and equipment is estimated to approximate fair value. It is not expected that the final allocation of purchase price will produce materially different results from those presented herein.

(2) To accrue for transaction costs incurred, but not paid, as of the closing of the transaction.

(3) To reflect the borrowings made by the Company of $7,796,000 to finance the transaction and the payoff of Thermal Solutions’ outstanding note payable in the amount of $500,000.

(4) To reflect the elimination of Thermal Solutions’ equity and the issuance of 288,413 shares of the Company’s $.30 par value common stock (with a market price of $14.286 at the closing date).

Statement of Operations

(1) To record amortization expense on the portion of purchase price allocated to an intangible covenant not to compete agreement over a five year life ($1,250,000 total valuation).

(2) To eliminate Thermal Solutions’ historical interest expense on debt repaid and forgiven at the closing of the transaction and to record interest expense at 4.4%, which approximates the interest rate in effect during the periods presented, on the $7,796,000 borrowed to purchase Thermal Solutions.

(3) To record the tax effect of Thermal Solutions’ income and the taxable pro forma adjustments at the effective rate of 38%.

(4) To record Team, Inc. stock issued in connection with the acquisition of Thermal Solutions.

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