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SUGAR LAND, Texas, May 20, 2013 (GLOBE NEWSWIRE) -- Team, Inc., (NYSE:TISI) today announced that it is lowering its earnings guidance for the fourth quarter of its fiscal year ending May 31, 2013 to a range of $0.52 to $0.60 per fully diluted share. The revised guidance reflects lower expected profit margin performance than had been previously forecast due primarily to cost and utilization challenges in the quarter. The attached exhibit provides a more detailed description of the revised guidance and comparison with the previously issued guidance.
"While our projected revenues for the fourth quarter will be within the previously issued range, overall gross margins are projected to be approximately two percentage points below our previous expectations for the period," said Phil Hawk, Team's Chairman and CEO. "Strong and consistent field operating performance has been a key driver of our historical success for a long period of time. We are confident that we will rebalance our resources and restore our operating utilization rates to historical levels in the near term."
Key Challenges for Fourth Quarter of Fiscal 2013
Slower revenue growth rates, reflecting fewer large turnaround projects versus prior fourth quarter.
Significant growth in field support resources in first half of fiscal year, resulting in cost/utilization imbalances.
Restoring historical operating efficiency levels has taken longer than previously expected.
Initial Fiscal 2014 Outlook
Consistent with its past practice, Team expects to issue its formal fiscal 2014 earnings guidance in early August 2013 coinciding with the release of the full year financial results for fiscal 2013. Based on the company's initial review and planning, current expectations for fiscal 2014 remain consistent with our past performance:
Organic revenue growth of about 10% reflecting continuing significant business development opportunities in a number of areas.
Return to historical operating and utilization levels and operating profit margins above 9%.
These expectations would be indicative of fiscal 2014 revenues of approximately $790 million and earnings of about $2.00 per fully diluted share.