Team Inc. (TISI) F4Q10 (Qtr End 05/31/10) Earnings Call August 04, 2010 9:00 am ET Executives Phil Hawk - Chairman and CEO Ted Owen - EVP and CFO Analysts Arnie Ursaner - CJS Securities Max Barrett - Tudor Pickering Adam Thalhimer - BB&T Capital Markets Jack Atkins - Stephens Davis Paddock - Invesco Matt Tucker - KeyBanc Capital Bob Nicholson - Pine Cobble Capital Presentation Operator
Previous Statements by TISI
» Team, Inc. F3Q10 (Qtr End 02/28/2010) Earnings Call Transcript
» Team, Inc. F2Q10 (Qtr End 11/30/09) Earnings Call Transcript
» Team F1Q10 (Qtr End 8/31/09) Earnings Call Transcript
Ted let me turn it over to you.Ted Owen Thank you, Phil. First as usual I want to remind everyone that any forward-looking information we discuss today is being provided in accordance with the provisions of the Private Securities Litigation Reform Act of 1995. We’ve made reasonable efforts to ensure that the information, assumptions and beliefs upon which this forward-looking information is based are current, reasonable and complete. However, a variety of factors could cause actual results to differ materially from those anticipated in any forward-looking information. A description of those factors is set forth in the last paragraph of our press release and in the company’s SEC filings. Accordingly, there can be no assurance that the forward-looking information discussed today will occur or that our 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. With that now to the financial results. First let me say that the results for fourth quarter and the year-to-date period are impacted by three separate non-routine charges, including two that that we have previously disclosed. The previously disclosed matters pertain to the FCPA investigation and to the devaluation of Venezuelan currency. The third item relates to severance cost associated with additional cost reduction initiatives that we completed in the year in the fourth quarter. I’ll talk more about each of these non-routine matters in just a moment, but my following comments about operating results will be on an adjusted basis that is excluding the impact of those charges and credits. Revenues for the fourth quarter were a $125 million which is up 4% compared to last year’s fourth quarter. Adjusted net income was $6.1 million in the current quarter versus $5.6 million in last year’s fourth quarter and adjusted earnings per diluted share were $0.31 versus $0.29 in the fourth quarter of last year.
Now let me just describe those non-routine charges that affected our results for the quarter and for the year. First, as I said during the fourth quarter we implemented cost reduction initiatives, which will result in an additional reduction of about $6 million of indirect and SG&A cost in fiscal year 2011. There wouldn’t have been by the way much impact in the current fourth quarter relative to those initiatives, which we're taking near the end of the quarter. Also the impact would be about half and half between indirect and SG&A cost next year. These initiatives included the elimination of nearly 80 indirect and SG&A positions from our organization, severance associated with these actions of about $700,000 is included in SG&A expense in the quarter.The second matter is the FCPA matter, as we previously reported our audit committee completed its independent investigations and the results of that investigation have been communicated to the SEC and to the Department of Justice. Their investigation concluded that improper payments of limited size were made to employees of foreign government owned enterprises in Trinidad, but determined that the improper payments were not made by or authorized by employees outside of that one TMS Trinidad branch. The total professional fees associated with the investigation were approximately $3.2 million. And finally the third matter is the Venezuelan currency devaluation. Effective as of the beginning of our third quarter of fiscal 2010, we began to account for Venezuela as a highly inflationary economy. Accordingly, currency fluctuations between the Bolivar and US dollar are now recorded in the company statement of operations. In January of 2010, the Venezuelan government announced a significant devaluation of its currency and on a year to-date basis we’ve taken a charge of $1.7 million relative to the devaluation, which is reflected as an element of other expense below the operating income line. By the way our total remaining investment in Venezuela is about $1.5 million. Read the rest of this transcript for free on seekingalpha.com