CORRESP 1 filename1.htm SEC Letter

LOGO

 

 

June 23, 2005

 

United States Securities and Exchange Commission

Mail Stop 4-7

450 Fifth Street, N. W.

Washington, D. C. 20549

Attn: Larry Spirgel, Assistant Director

 

RE:      Team, Inc.
      

 

Amendment No. 1 to Form 10-K for the fiscal year ended May 31, 2004

       Filed April 14, 2005
      

 

Forms 10-Q for the quarter ended February 28, 2005

       Filed April 15, 2005
       File NO. 1-08604

 

Dear Mr. Spirgel:

 

This letter is in response to your comment letter dated June 13, 2005 regarding the above referenced filings and our prior response letter dated April 14, 2005. To facilitate your review of our responses, we have duplicated your comment below in italicized type and added our response below:

 

SEC Staff Comment:

 

Goodwill

 

1. Refer to your response to our prior comment 13. We note that you concluded that you can aggregate the components (Team Mechanical Services and Team Cooperheat-MQS) within the industrial services segment into one reporting unit. Further expand your response to show us how you applied the aggregation criteria in paragraph 17 of SFAS 131 and demonstrate how you evaluated whether these components have similar economic characteristics. For your guidance, please refer to paragraphs 17 – 24 and 127 of SFAS 131 and EITF Topic D-101 ‘Clarification of Reporting Unit Guidance in Paragraph 30 of FASB Statement No. 142’. To help us better understand your analysis and conclusion provide us with a copy of the report that the chief operating decision maker uses to allocate resources and assess performance. We may have further comments after the review of your response.

 

Team Response:

 

Our Industrial Services business segment is comprised of two business units, Team Mechanical Services (“TMS”) and Team Cooperheat-MQS (“TCM”). Both units derive their revenues from providing specialized industrial services. TMS provides specialized mechanical services and fugitive emissions monitoring. TCM provides specialized field heat treating and NDT (non-destructive testing) inspection services. The market for all of these services is principally dictated by the population of process piping systems in industrial plants and facilities.


SEC Response Letter

June 23, 2005

Page 2

 

Prior to April 2004, the industrial services segment consisted of the TMS unit (which was incorporated as Team Industrial Services, Inc., or “TISI”), and Team’s legacy NDT inspection business, X Ray Inspection, Inc. In April 2004, we acquired Thermal Solutions, Inc., (a leading provider of specialty heat-treating services) and in August 2004, we acquired the business of Cooperheat-MQS, Inc., (a leading provider of both specialty heat-treating and NDT inspection services). In October 2005, these two units were combined with Team’s legacy NDT inspection business to form the operating unit Team Cooperheat-MQS, Inc. (“TCM”). TCM was a wholly-owned subsidiary of TISI until May 31, 2005 when it was merged into TISI.

 

While TMS and TCM field locations are generally separate, both units report to a chief operating decision maker, who is Ken Tholan, the Company’s President and Chief Operating Officer. Both units are supported by common technical and commercial support staffs, quality assurance, human resources and health and safety departments. As disclosed in our most recent Form 10-Q, while current gross margins for TCM are less than those achieved by TMS, we expect those margins to be similar over time as the management tools associated with our financial information system are installed in the TCM units (an aggregation expectation specified in paragraph 17 of SFAS 131). The specific aggregation criteria of paragraph 17 of SFAS 131 are considered as follows:

 

  a. Nature of products and services:

 

The services offered by both units are highly specialized industrial maintenance and rehabilitation services. Both groups require a high degree of training and skill among technicians and all services are primarily associated with high-pressure, high temperature piping systems in industrial plant or pipeline facilities. Additionally, both groups have similar contractual arrangements with customers (generally time and materials) and have similar risk profiles.

 

  b. Nature of production processes:

 

While both TCM and TMS are service organizations and, therefore, production processes are not an applicable criteria in the usual context, it is important to note that service facilities for both organizations are similarly staffed and configured and both services are highly labor intensive (large number of skilled technicians) as opposed to being capital intensive. Additionally, the range of labor rates for both organizations is comparable.

 

  c. Type or class of customer for products or services:

 

The customer base for both TMS and TCM are virtually the same—approximately two-thirds of the customer base for both units consists of refining and petrochemical facilities, power plants and pipelines, all having a heavy concentration of high-pressure, high-temperature piping systems. The fact that field heat treating and NDT inspection are sold to the same customer base was a significant driver for Team’s interest in acquiring the Thermal Solutions and Cooperheat-MQS businesses. We have already been successful in incorporating TCM services into several TMS customer contracts and vice versa.

 

  d. Methods used to distribute their products or provide their services:

 

Services for both TCM and TMS are provided through a nationwide network of field branch locations. These facilities are located in proximity to industrial plants. The structure of those locations is similar for both groups, with locations overseen by a branch/regional manager, one or more sales representatives and a cadre of technicians to service the business requirements. As business conditions dictate, we are co-locating TCM and TMS field facilities in the same geographic area. As of May 31, 2005, we have combined facilities in six field locations.


SEC Response Letter

June 23, 2005

Page 3

 

It is also important to note that our marketing methods are common to both groups. We have a common web site that fully describes all of our industrial services offerings at www.teamindustrialservices.com. We also have a common Services Catalogue that is used in commercial sales and marketing activities for both groups. Additionally, we have a similar incentive compensation and profit sharing plan that is common to both groups.

 

  e. Regulatory environment:

 

a. Not generally applicable.

 

In determining whether components should be combined into one reporting unit based on economic similarities, EITF D-101 sets forth other factors for consideration, as follows:

 

  1. Manner in which an entity operates its business and the nature of those operations.

 

As discussed more fully above, both units operate in very similar manners, summarized as follows:

 

    Customers are similar

 

    Contractual arrangements with customers are similar

 

    Pay policies and HR policies are similar

 

    Business model for both groups (metrics) are similar

 

    Risk profile for both groups is similar (same risk management program)

 

    Sales and marketing activities are similar

 

  2. Whether goodwill is recoverable from the separate operations of each component business.

 

We believe goodwill associated with our Industrial Services segment is fully recoverable from the separate operations of each component business. Most of the $26.1 million of recorded goodwill is associated with the recent acquisitions of Thermal Solutions and Cooperheat-MQS in 2004 ($19 million), while the remaining $7.1 million of recorded goodwill arose from the 1999 acquisition of Team’s legacy NDT inspection business, X Ray Inspection, Inc. (X Ray was moved from the renamed TMS group and combined with TCM in October 2005). Both the TMS and TCM groups are of comparable size and have similar operating profit potential, as demonstrated by the summary level budget information for FY 2006 presented below. (As mentioned, we expect TCM margins to improve as our financial and operating systems are fully implemented):

 

     FY 2006 Budget Summary (000's)

     TMS

   TCM

   Total

Revenues

   $ 100,000    $ 116,000    $ 216,000
    

  

  

Operating Profit, before shared support costs

   $ 17,000    $ 14,600    $ 31,600
    

  

  

 

  3. Extent to which the component businesses share assets and other resources

 

Both groups share technical and commercial support, health and safety, human resources, quality assurance and marketing resources. Operations have been physically combined in six locations already.

 

  4. Whether the components support and benefit from common research and development activities.

 

 

R&D is not a significant activity.


SEC Response Letter

June 23, 2005

Page 4

 

To further assist the staff we are providing the following documents which the chief decision maker uses to manage the business:

 

    Excerpts from monthly consolidating operating results (February 28, 2005 close)—Schedule 1

 

    Weekly Operating Report submitted to COO by field organization—Schedule 2

 

* * * *

 

We would be pleased to address any further comments that the Commission has with respect to our filings.

 

Very truly yours,    

/s/ Philip J Hawk


 

/s/ Ted W. Owen


Philip J. Hawk   Ted W. Owen
Chief Executive Officer   Senior Vice President-Chief Financial Officer


Schedule 1

 

TEAM, INC. AND SUBSIDIARIES

SUMMARY OPERATING RESULTS

MONTH OF:

February

2005

(in thousands)

 

CURRENT PERIOD VS. BUDGET

 

     NET REVENUES

    GROSS MARGIN

    EBIT

 
     ACTUAL

    BUDGET

   VARIANCE

    ACTUAL

    %

    BUDGET

   %

    VARIANCE

    ACTUAL

    BUDGET

    VARIANCE

 

TMS

   7,949     6,415    1,534     2,546     32.0 %   2,612    40.7 %   (66 )   810     885     (75 )

TCM

   9,896     3,301    6,595     3,448     34.8 %   1,249    37.8 %   2,199     1,682     538     1,144  

TIS Support

   0     0    0     0           0          0     (402 )   0     (402 )
    

 
  

 

 

 
  

 

 

 

 

TOTAL IND. SERVICES

   17,845     9,716    8,129     5,994     33.6 %   3,861    39.7 %   2,133     2,090     1,423     667  

CLIMAX

   1,477     1,228    249     708     47.9 %   576    46.9 %   132     315     183     132  

CLIMAX INTERCO

   (25 )   0    (25 )   (12 )         0          (12 )   (12 )   0     (12 )

CORPORATE

   0     0    0     0           0          0     (1,436 )   (461 )   (975 )
    

 
  

 

 

 
  

 

 

 

 

TOTAL

   19,297     10,944    8,353     6,690     34.7 %   4,437    40.5 %   2,253     957     1,145     (188 )
    

 
  

 

 

 
  

 

 

 

 

 

CURRENT PERIOD VS. PRIOR YEAR:

 

     NET REVENUES

    GROSS MARGIN

    EBIT

 
     CURRENT

    PRIOR Yr.

    VARIANCE

    CURRENT

    %

    PRIOR Yr.

    %

    VARIANCE

    CURRENT

    PRIOR Yr.

    VARIANCE

 

TMS

   7,949     6,113     1,836     2,546     32.0 %   2,352     38.5 %   194     810     759     51  

TCM *

   9,896     1,100     8,796     3,448     34.8 %   345     31.4 %   3,103     1,682     100     1,582  

TIS Support

   0     0     0     0           0           0     (402 )   0     (402 )
    

 

 

 

 

 

 

 

 

 

 

TOTAL IND. SERVICES

   17,845     8,313     9,532     5,994     33.6 %   3,042     36.6 %   2,952     2,090     959     1,131  

CLIMAX

   1,477     964     513     708     47.9 %   431     44.7 %   277     315     103     212  

CLIMAX INTERCO

   (25 )   (4 )   (21 )   (12 )         (2 )         (10 )   (12 )   (2 )   (10 )

CORPORATE

   0     0     0     0           0           0     (1,436 )   (502 )   (934 )
    

 

 

 

 

 

 

 

 

 

 

TOTAL

   19,297     9,273     10,024     6,690     34.7 %   3,471     37.4 %   3,219     957     558     399  
    

 

 

 

 

 

 

 

 

 

 


* Prior year reflects XRI only.


TEAM, INC. AND SUBSIDIARIES

SEGMENT INFORMATION

MONTH OF:

February

2005

(in thousands)

 

    TMS

                                                                       
   

REGIONAL

OPS


   

TECO

/EQUIP.

GROUP


   

TMS

SUPPORT


    ELIM

   

TOTAL

TMS


   

REGIONAL

OPS


   

MFG &

ADV

TECH


   

TCM

SUPPORT


    ELIM

   

TOTAL

TCM


 

TISI

SUPPORT


   

TOTAL

INDUST.

SEGMENT


    CLIMAX

   

CLIMAX

INTERCO


    CORP

    TOTAL

       

NET REVENUES

  7,949     1,722     34     (1,756 )   7,949     10,037     252           (393 )   9,896         17,845     1,477     (25 )         19,297     100.0 %

DIRECT COSTS

  4,072     987     35     (1,756 )   3,338     3,843     227     —       (463 )   3,607         6,945     792     (13 )         7,724     40.0 %

INDIRECT COSTS

  1,516     537     12     —       2,065     2,826     15     —       —       2,841   —       4,906     (23 )         —       4,883     25.3 %
   

 

 

 

 

 

 

 

 

 
 

 

 

 

 

 

 

TOTAL COST OF SALES

  5,588     1,524     47     (1,756 )   5,403     6,669     242     —       (463 )   6,448   —       11,851     769     (13 )   —       12,607     65.3 %
   

 

 

 

 

 

 

 

 

 
 

 

 

 

 

 

 

GROSS MARGIN

  2,361     198     (13 )   —       2,546     3,368     10     —       70     3,448   —       5,994     708     (12 )   —       6,690     34.7 %

GM %

  29.7 %   11.5 %   -38.2 %         32.0 %   33.6 %                               33.6 %   47.9 %               34.7 %      

SG & A

  1,350     170     216     —       1,736     1,670     39     57     —       1,766   402     3,904     393           1,436     5,733     29.7 %

OTHER (INCOME) EXPENSE

  —                         —                                         —                         —       0.0 %
   

 

 

 

 

 

 

 

 

 
 

 

 

 

 

 

 

TOTAL SG&A

  1,350     170     216     —       1,736     1,670     39     57     —       1,766   402     3,904     393     —       1,436     5,733     29.7%  

SGA %

  17.0%     9.9%                 21.8%     16.6%                                 21.9%     26.6%                 29.7%        
   

 

 

 

 

 

 

 

 

 
 

 

 

 

 

 

 

EBIT

  1,011     28     (229 )   —       810     1,698     (29 )   (57 )   70     1,682   (402 )   2,090     315     (12 )   (1,436 )   957     5.0 %

INTEREST EXPENSE

                          —                                         —                   301     301     1.6 %
   

 

 

 

 

 

 

 

 

 
 

 

 

 

 

 

 

PRE TAX INCOME

  1,011     28     (229 )   —       810     1,698     (29 )   (57 )   70     1,682   (402 )   2,090     315     (12 )   (1,737 )   656     3.4 %
   

 

 

 

 

 

 

 

 

 
 

 

 

 

 

 

 

 

PRIOR YEAR MONTH OF:

February

2004

 

    TMS

    TCM

                                       
   

REGIONAL

OPS


 

TECO

/EQUIP.

GROUP


   

DIVISION

SUPPORT


    ELIM

   

TOTAL

TMS


   

REGIONAL

OPS


   

MFG &

ADV

TECH


 

TCM

SUPPORT


  ELIM

 

TOTAL

TCM


 

TISI

SUPPORT


 

TOTAL

INDUST.

SEGMENT


    CLIMAX

   

CLIMAX

INTERCO


    CORP

    TOTAL

       

NET REVENUES

  6,113   1,175     25     (1,200 )   6,113     1,100             —     1,100       7,213     964     (4 )         8,173     100.0 %

DIRECT COSTS

  2,951   514     28     (1,200 )   2,293     416             —     416       2,709     506     (2 )         3,213     39.3 %

INDIRECT COSTS

  1,143   318     7     —       1,468     339             —     339       1,807     27           —       1,834     22.4 %
   
 

 

 

 

 

 
 
 
 
 
 

 

 

 

 

 

TOTAL COST OF SALES

  4,094   832     35     (1,200 )   3,761     755     —     —     —     755   —     4,516     533     (2 )   —       5,047     61.8 %
   
 

 

 

 

 

 
 
 
 
 
 

 

 

 

 

 

GROSS MARGIN

  2,019   343     (10 )   —       2,352     345     —     —     —     345   —     2,697     431     (2 )   —       3,126     38.2 %

GM %

      29.2 %   -40.0 %         38.5 %   31.4 %                       37.4 %   44.7 %               38.2 %      

SG & A

  1,197   161     235     —       1,593     245             —     245       1,838     328           502     2,668     32.6 %

OTHER (INCOME) EXPENSE

  —                                                       —                         —       0.0 %
   
 

 

 

 

 

 
 
 
 
 
 

 

 

 

 

 

TOTAL SG&A

  1,197   161     235     —       1,593     245     —     —     —     245   —     1,838     328     —       502     2,668     32.6%  

SGA %

      13.7%                 26.1%     22.3%                         25.5%     34.0%                 32.6%        
   
 

 

 

 

 

 
 
 
 
 
 

 

 

 

 

 

EBIT

  822   182     (245 )   —       759     100     —     —     —     100   —     859     103     (2 )   (502 )   458     5.6 %

INTEREST EXPENSE

                        —                                 —                   38     38     0.5 %
   
 

 

 

 

 

 
 
 
 
 
 

 

 

 

 

 

PRE TAX INCOME

  822   182     (245 )   —       759     100     —     —     —     100   —     859     103     (2 )   (540 )   420     5.1 %
   
 

 

 

 

 

 
 
 
 
 
 

 

 

 

 

 


Schedule 2

 

TEAM INDUSTRIAL SERVICES

WEEKLY REPORT

June 17, 2005

 

THE SAFETY CONNECTION

 

  Compiling Safety Statistics for IC calculations.

 

  Amending / renewing various radiation safety licenses.

 

  Accidents/Injuries reported this week:

 

  - MVA / Preventable, Hammond (1232) – Driver rear-ended another vehicle.

 

  - MVA / Preventable, Phoenix (1228) – Driver rear-ended another vehicle.

 

  - First Aid, Lafayette (1225) – Employee brushed arm against steam line causing a minor burn.

 

  - First Aid, HEC – While removing a handle from a piece of equipment, handle came loose striking employee in the mouth.

 

TEAM MECHANICAL SERVICES

 

NORTHEAST REGION

 

(VP/GM - Steve Smith)

 

  DuPont, Belle, WV – 10” hot tap with bolt on fitting. ($9,500)

 

  PSE&G, Salem Nuclear, Hancocks, Bridge, NJ – Wire-wrap on 46” exchanger. ($30,000)

 

  GE Contractual Services @ Newington Energy – Awarded 10” flange clamp on competitive bid against Furmanite and Leak Tech due to engineering data supplied to customer. ($20,000)

 

  Finch Pruyn Pulp and Paper – 14” flange enclosure. ($19,000)

 

CENTRAL REGION

 

(VP/GM – Mark Buchheim)

 

  US Army Corps of Engineers, St. Louis, MO – Emergency boring bar job for lock gate on the Mississippi River Dam. ($15,000)

 

  ConocoPhillips, Wood River, IL – 30” stainless steel flange enclosure. ($65,000)

 

  Marathon Ashland, St. Paul Park, MN – Presented Team’s BBS Safety Program at Monthly Contractor’s Safety Meeting.

 

  ExxonMobil, Joliet, IL – Bolt tensioning on two 60” heat exchangers. ($25,000)

 

  Tri-Gen Peoples Gas, Chicago, IL – 14” 300# flange clamp on priority for new customer. ($10,000)

 

SOUTHEAST REGION

 

(VP/GM – Pete Wallace)

 

  Gulf Power Crist Plant, Pensacola, FL – RFQ for 70-1/2” BFW clamp. ($43,480)

 

  Seminole Electric, Palatka, FL – Quoted 14” line freeze. Thanks to Sid Spoehr for his assistance. ($8,000)

 

  Carolina Pride, Greenwood, SC – Quoted two 12” double line stops using bolt on fittings. ($67,000)

 

  Wellman Chemical, Bay St. Louis, MS – Performing 12” line stop and various hot taps. ($40,000)

 

  Talecris, Clayton, NC – Awarded 18” line stop for June. ($30,000)

 

GULF REGION

 

(VP/GM – Joe Jordan)

 

  Delta Tubular, Channelview, TX – Making repairs to a 94,000 gallon tank floor. Thanks to Kirk Leger for handling this project. ($6,500)

 

  Innovene (BP), Chocolate Bayou, TX – Trying to locate equipment for an emergency 8” permanent Hi-Stop®. ($35,000)

 

  ISP, Port Neches, TX – Bid multiple stopples and hot taps. ($50,000)

 

  Southeast Texas Industries, Port Arthur, TX – On-going pipe cuts. ($150,000)

 

  Citgo, Corpus Christi, TX – Quoting 16” bolt on hot tap though a 90o elbow. ($60,000)

 

WEST REGION

 

(VP/GM – Tommy Campbell)

 

  PSF Industries, Seattle WA – Bidding project to drill 15,000 holes in vessel. (Revenues Unknown)

 

  Newmont Mining, Carlin, NV – RFQ for composite repairs on 30# PVC line. ($20,000)

 

  NPPD, Gerald Gentleman Plant, Sutherland, NE – Two 10” and one 6” line stop. ($28,000)


INTERNATIONAL

 

(VP/GM – Tom Walters)

 

  Unocal, Thailand – Quoting a sub sea hot tap project. (Revenues Unknown)

 

  Ethyl Corp., Sarnia, Canada – Awarded water cutting of holes on 50 rail cars. ($200,000)

 

  CRP (PDVSA), Venezuela – Submitted quote for two year FMS/TBS maintenance contract. Special thanks to Gordon Bradbury and Juan C. Borges for their hard work and support.

 

  Carber Testing, Fort McMurray, Canada – The owners of Carber Testing has closed the business office in Fort McMurray. This looks to be a great opportunity to take this work.

 

TEAM COOPERHEAT – MQS

 

NORTHEAST REGION

 

VP/GM – Jay Goodyear)

 

  Valero, Paulsboro, NJ – Awarded contract for radiographic profile radiography. ($75,000)

 

  SAPPI Paper, Hinkley, ME – Quoting NDE and HT of lime kiln. (Revenues Unknown)

 

  International Paper, Bucksport, ME – Quoted paper machine inspection. ($12,000)

 

CENTRAL REGION

 

(VP/GM – Art Victorson)

 

  CB&I, Wood River, IL – RFQ for NDT, PWHT and machining on new hydrogen unit. ($500,000)

 

  Citgo, Lemont, IL – Starting a full-time inspection crew. ($18,000 Monthly)

 

  Marathon Ashland, Robinson, IL – RFQ for one year ground penetrating radar project. ($300,000)

 

  ConocoPhillips, Wood River, IL – Starting three additional inspection crews. ($35,000 Monthly)

 

SOUTHEAST REGION

 

(VP/GM – Jim Saxon)

 

  Zachary Construction, Turnkey Point, FL – Bidding NDE for new construction of four HRSG units. ($500,000)

 

  Progress Energy, Anclote Station, FL – Awarded ET of condenser. ($40,000)

 

  Weyerhaeuser, Bennettsville, SC – Bidding tank inspection project. ($28,000)

 

  AmVac, Axis, AL – Awarded tank inspections. ($10,000)

 

GULF REGION

 

(VP/GM – Matt Sisson)

 

  Shaw Constructors @ Motiva, Convent, LA – NDE work on new construction. ($90,000)

 

  Innovene (BP), Chocolate Bayou, TX – Preheat of exchanger weld repairs. ($20,000)

 

  James Machine Works, @ Valero, Houston, TX – Radiography work on new construction project. ($10,000)

 

  Dow Chemical, Clear Lake, TX – Eddy current and API support for turnaround. ($35,000)

 

WEST

 

  Shell Oil, Martinez, CA – Line thaw on flexi-coker unit. ($5,000)

 

  Sierra Pacific Power, Tracy, NV – NDE and HT on heater tubes. ($10,000)

 

  Kiewit, San Francisco, CA – PWHT of 5’ OD cans. ($9,000)

 

  Matrix @ Shell Oil, Bellingham, WA – Pre-turnaround HT. ($15,000)

 

COMBUSTION

 

(General Manager, Kurt Hand)

 

  Wheeling Pittsburgh Steel, Follansbee, WV – Quoting heat-up of three coke ovens. ($19,000)

 

  Republic Steel, Lorain, OH – Proposal to heat-up one blast furnace. ($24,000)

 

  AK Steel, Ashland, KY – Awarded heat-up of two degasser units. First job in five years. ($20,000)

 

  Johns Manville, Winder, GA – RFQ to heat-up electric melting furnace. First proposal accepted by customer in three years. ($10,000)

 

2


INTERNATIONAL

 

(VP/GM – Jim Campbell)

 

  Bechtech EGLNG, Equatorial Guinea, Africa – Awarded 14 month contract for RT on new LNG plant. Thanks to Gordon Bradbury, Edsel Lee, Leo Karim, and staff for all their hard work. ($1,500,000)

 

  Hovensa LLC, St. Croix, USVI – Mobilizing equipment and labor for shutdown. ($60,000)

 

  Petro Canada, Port Credit, Ontario – Quoting HT project for Sept. ($147,000)

 

  Triton Fab, Lamount, Alberta – Heat treating of 400 welds. ($51,000)

 

NEW BUSINESS DEVELOPMENT

 

(Bill Denson)

 

  BP Oil Corporate – Received labor build-up form to quote labor rates.

 

  Kinder Morgan – Supplying national TMS rates to attach to existing TCM national contract.

 

POWER INDUSTRY

 

(Larry Horan)

 

  B&W Construction @ First Energy Bruce Mansfield Power Station, Barberton, OH – Received RFQ for FMS fall outage. ($33,000)

 

ENGINEERING

 

(Chris Larsen)

 

  Engineering workload is heavy.

 

  This week there were 89 jobs of which 47 (53%) were manufactured.

 

  Engineering had the most jobs this week from Lake Charles, and spent the most design hours on New Orleans jobs.

 

MANUFACTURING

  Shop load is good.

 

  Average turnaround time to date is 27.1 hours.

 

  Best customers to date are Pasadena, Los Angeles, Corpus Christi, Philadelphia, and Odessa.

 

  National Board audit next week for R, VR, and NR stamps.

 

HTS

 

(John Ashworth)

 

  Met with West Region sales organization to set goals for continuous HTS growth

 

  ConocoPhillips, Carson, CA – HTS lunch and learn for key maintenance personnel.

 

  BP, Carson, CA – HTS presentation for key maintenance personnel and JE Merit.

 

HEC

 

(Leo Kovel)

 

  Louisiana Pigment, Sulphur, LA – Sold a Climax prototype machine to clear lines up to 96” in length. ($25,000) Machine was designed by Climax and Pete Campbell. Opportunity exists to sell another twelve machines.

 

  Talecris, Clayton, NC – Mobilizing for an 18” 150# line stop. ($23,000)

 

  New Process Steel, Houston, TX – Sent PM 5000 and BB-5000 to machine forged press base plate. ($12,000)

 

ECS

 

(Mike Hebert)

 

  Regional Compliance Specialist School – Preparing course materials for a two week class.

 

VRS

 

(Ken Childs)

 

  Attended the USA Nuclear Generator Summit Show in Lake Tahoe, NV. Very good show with numerous opportunities.

 

  Valero, Mont Belvieu, TX – On-site PSV testing. ($20,000)

 

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TURNAROUND SERVICE

 

(Bill Evers)

 

  Washington International Group, San Juan, PR – Provided budgerary estimate on instrumentation calibration services. ($100,000)

 

FMS/TBS

 

(David Champagne)

 

  NCRA, McPherson, KS – Visited with T/A Manager and discussed upcoming outages. ($365,000)

 

  Industrial Contractors, Evansville, IN – RFQ for pipe bevels and cuts. ($57,780)

 

HEAT TREATMENT

 

(Tim Small)

 

  Nooter Construction @ Premcor, Lima, OH – Completed RFQ for pre-heat and PWHT services on new coker unit. (1,500,000)

 

  Welding Technologies @ Cross Power Plant, Moncks, SC – RFQ for pre-heat and PWHT. ($60,000)

 

  Progress Energy – Submitted national pricing for heat treatment services.

 

INSPECTION

 

(Jim Minyon)

 

  Industrial Contractors, Paradise, KY – RT of heater welds. ($28,632)

 

  ChevronTexaco, Pascagoula, MS – Assisted with quote for three year contract to provide NDE and API services for facilities in the western hemisphere. ($13,000,000)

 

BRANCH SERVICES / MARKETING/PURCHASING

 

(James Varner)

 

  Completed Chevron Bid for NDE / API services.

 

  Build-out of modular building is underway with six new offices.

 

  Updating Team electrical repairs brochure is underway. Information will include inspection services for utilities.

 

  Beginning project to conduct a national and Canadian mailing with target of 1st quarter of new fiscal year.

 

QUALITY ASSURANCE

 

(Mark Randig)

 

  Team’s Quality Program has been approved and is ready for release.

 

  Conducted QMS training for TECO departments.

 

OPERATIONS SUPPORT

 

(Francis Labry)

 

  Kenneth Johnson is working on a risk assessment for the GE Project.

 

  LRS Tech I class roster has been distributed to branches and a new class has been scheduled for Sept.

 

  Training classes scheduled for the months of June and July:

 

•      ECS Regional Specialist class

  June 20- July 1    

 

•      FMS/TBS Tech 1 class

 

 

June 20- June 24

   

 

•      TCM Level III class

 

 

July 6 – July 8

   

 

•      LRS Tech I class

 

 

July 10 – July 20

   

 

•      API Qualification and Detection

 

 

July 11 – July 14

   

 

-        Radiographic Testing

 

 

July 18 – July 22

   

 

-        Heat Treating Tech II

 

 

July 25 – July 29

   

 

CLIMAX

 

(Geoff Gilmore)

 

    Climax exhibited at USA Nuclear Supplier Conference.

 

    New Equipment orders booked this week over $10,000:

 

  - Climax GmbH in Germany for a BB5500 ($136,355)

 

  - RLI in China for two BB5000 ($41,606)

 

Confidential Information: The weekly report is considered proprietary information of Team, Inc. and is intended to be used for internal company use only. Any forwarding, reproducing, or sharing of this information outside of the normal distribution list is prohibited and will result in disciplinary action up to and including termination of employment.

 

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