Team, Inc. Reports FY2013 Results; Provides FY2014 Guidance

SUGAR LAND, Texas, Aug. 6, 2013 (GLOBE NEWSWIRE) -- Team, Inc. (NYSE:TISI) today announced financial results for the fiscal year ending May 31, 2013. Team reported earnings, adjusted for non-routine items, of $32.8 million ($1.55 per diluted share), versus adjusted net income of $34.5 million ($1.67 per diluted share) for the prior year. Revenues for the year ended May 31, 2013, were $714 million, a 15% increase compared to revenues of $624 million for the prior year. Fourth quarter revenues and adjusted earnings were $201 million and $11.5 million ($0.54 per diluted share), respectively.

"While our fourth quarter and full year results were consistent with our revised earnings guidance issued in May 2013, we are disappointed that fiscal 2013 was only a 'near-best' year for Team and not a 'new-best' year," said Phil Hawk, Team's Chairman and Chief Executive Officer. "We are pleased with our overall revenue growth for the year and quarter, but our expectation for fiscal 2014 is to rebalance our resources and restore the operating leverage that is inherent in our business, while continuing our history of double digit revenue growth."

Highlights and Other Financial Data for Fourth Quarter
  • Total revenue growth of $91 million for the year, up 15%.
  • Total inspection and assessment revenues up 20% for the quarter and up 29% for the year.
  • Operating income was 9.5% of revenue for the quarter and 7.8% for the year.
  • Capital expenditures were $7 million for the quarter and $26 million for the year.
  • Adjusted EBITDA was $25.2 million (12.5% of revenue) for the quarter and $79.2 million (11% of revenue) for the year.
  • Net debt (debt less cash) of $39 million at May 31, 2013, with net debt to Adjusted EBITDA ratio of 0.5 to 1.0.
  • On June 24, 2013, announced the new alignment of operations around three business groups—Inspection and Heat Treating Services ($381 million in FY 2013 revenues), Mechanical Services ($276 million in FY 2013 revenues) and Quest Integrity Group ($57 million in FY 2013 revenues).
  • On July 25, 2013, announced the acquisition of Global Ascent, Inc., a leading provider of industrial rope access services.

GAAP Earnings

Team's net income available to shareholders reported in accordance with generally accepted accounting principles (including non-routine items) was $32.4 million ($1.53 per diluted share) as compared to $32.9 million ($1.59 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 Guidance for Fiscal Year 2014

Team expects its revenues for the fiscal year ending May 31, 2014 to be in the range of $775 million to $800 million. For the same time period, net income available to shareholders is expected to be in a range of $1.90 to $2.05 per fully diluted share. Consistent with its past practice, Team does not provide specific guidance for individual quarters.

Earnings Conference Call

In connection with this earnings release, Team will hold its quarterly conference call on Wednesday, August 7, 2013 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 866-543-6403 and use conference code  31736470 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 May 31, Twelve Months Ended May 31,
  2013 2012 2013 2012
         
Revenues  $ 201,196  $ 187,851  $ 714,311  $ 623,740
Operating expenses  139,122  124,296  501,346  428,689
Gross margin  62,074  63,555  212,965  195,051
         
Selling, general and administrative expenses  43,075  39,621  158,355  139,737
Earnings from unconsolidated affiliates  130  272  992  1,183
Operating income  19,129  24,206  55,602  56,497
         
Foreign currency loss (gain)  26  (105)  943  (31)
Interest expense, net  715  611  2,734  2,380
Write down of property costs  --   1,658  --   1,658
Earnings before income taxes  18,388  22,042  51,925  52,490
         
Provision for income taxes  6,802  8,156  19,211  19,422
Net income 11,586 13,886 32,714 33,068
         
Less: Income attributable to non-controlling interest 112 122 278  157
Net income available to common shareholders  $ 11,474  $ 13,764  $ 32,436  $ 32,911
         
Earnings per common share:        
Basic  $ 0.56  $ 0.69  $ 1.61  $ 1.67
Diluted   $ 0.54  $ 0.66  $ 1.53  $ 1.59
         
Weighted average number of shares outstanding:        
Basic  20,498  19,838  20,203  19,667
Diluted   21,384  20,804  21,166  20,660
 
 
TEAM, INC. AND SUBSIDIARIES
ADDITIONAL FINANCIAL INFORMATION
(in thousands, except per share data)
         
   Three Months Ended May 31, Twelve Months Ended May 31,
  2013 2012 2013 2012
Adjusted Net income:        
Net income available to common shareholders  $ 11,474  $ 13,764  $ 32,436  $ 32,911
Write down of property costs  --   1,658  --   1,658
Venezuelan currency devaluation  --   --   597  -- 
Legal settlement  --   --   --   800
Tax impact of adjustments  --   (613)  (221)  (913)
Adjusted Net income  $ 11,474  $ 14,809  $ 32,812  $ 34,456
         
Adjusted Net income per common share:        
Basic  $ 0.56  $ 0.75  $ 1.62  $ 1.75
Diluted   $ 0.54  $ 0.71  $ 1.55  $ 1.67
         
Adjusted EBITDA:        
Operating income ("EBIT")  $ 19,129  $ 24,206  $ 55,602  $ 56,497
Legal settlement  --   --   --   800
Adjusted EBIT  19,129  24,206  55,602  57,297
Depreciation and amortization  5,210  4,556  19,664  17,469
Non-cash share-based compensation costs  909  867  3,931  4,386
Adjusted EBITDA  $ 25,248  $ 29,629  $ 79,197  $ 79,152
         
Business group revenues:        
TCM        
Inspection and Heat Treating  $ 108,146  $ 94,091  $ 380,518  $ 314,408
Quest Integrity  17,701  16,139  57,433  40,422
   125,847  110,230  437,951  354,830
TMS  75,349  77,621  276,360  268,910
   $ 201,196  $ 187,851  $ 714,311  $ 623,740
         
Revenues by service type:        
Inspection and Assessment  $ 94,470  $ 78,981  $ 338,343  $ 262,523
Turnaround  69,042  69,467  231,916  215,908
On-stream  37,684  39,403  144,052  145,309
   $ 201,196  $ 187,851  $ 714,311  $ 623,740
 
 
TEAM, INC. AND SUBSIDIARIES
SUMMARY CONSOLIDATED BALANCE SHEET INFORMATION
MAY 31, 2013 AND MAY 31, 2012
(in thousands)
     
  May 31, 2013 May 31, 2012
     
     
Current assets  $ 246,918  $ 218,675
     
Property, plant and equipment, net  74,939  62,041
     
Other non-current assets  138,346  123,072
     
Total assets  $ 460,203  $ 403,788
     
Current liabilities  $ 72,804  $ 61,656
     
Long term debt net of current maturities  72,946  85,872
     
Other non-current liabilities  22,263  11,259
     
Stockholders' equity  292,190  245,001
     
Total liabilities and stockholders' equity  $ 460,203  $ 403,788
 
 
TEAM, INC. AND SUBSIDIARIES
SUMMARY CONSOLIDATED CASH FLOW INFORMATION
(in thousands)
   
  Twelve Months Ended  May 31, 
  2013 2012
     
     
Net income  $ 32,714  $ 33,068
     
Depreciation, amortization and non-cash share based compensation expense  23,595  21,855
     
Working capital changes  (3,121)  (18,260)
     
Other items affecting operating cash flow  5,455  (11)
     
Net cash provided by operating activities  $ 58,643  $ 36,652
     
Capital expenditures  (26,068)  (23,924)
     
Cash used for business acquisitions, net  (18,589)  (19,351)
     
Other items affecting investing cash flow  1,758  1,011
     
Net cash used in investing activities  $ (42,899)  $ (42,264)
     
Borrowings (repayment) of debt, net  (13,600)  11,673
     
Cash associated with share-based payment arrangements, net  9,737  3,662
     
Net cash provided (used) by financing activities  $ (3,863)  $ 15,335
     
Effect of exchange rate changes  (157)  (1,324)
     
Change in cash and cash equivalents  $ 11,724  $ 8,399
CONTACT: Ted W. Owen         (281) 331-6154

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