Team, Inc. Reports Second Quarter 2014 Results; Affirms FY2014 Guidance

Team, Inc. Logo

SUGAR LAND, Texas, Jan. 7, 2014 (GLOBE NEWSWIRE) -- Team, Inc. (NYSE:TISI) today announced financial results for the fiscal year 2014 second quarter ended November 30, 2013. Team reported net income available to shareholders of $14.4 million ($0.68 per diluted share). Excluding a non-routine revaluation gain, adjusted net income available to shareholders was $13.1 million ($0.62 per diluted share). Revenues for the current year quarter were $200 million, approximately the same as the prior year quarter. For the six months ended November 30, 2013, adjusted earnings were $0.85 per diluted share on revenues of $375 million.

Team is affirming its full fiscal year 2014 earnings guidance (adjusted) of $1.55 to $1.85 per share and continues to expect full year revenues to be in the range of $765 million to $790 million.

Key Points

  • Adjusted operating income (also referred to as "EBIT") for the quarter of $21.7 million, or 11% of revenues.
  • Adjusted EBITDA for the quarter of $28.4 million, or 14% of revenues.
  • Record second quarter for Quest Integrity Group:
    -- $20 million in revenue, up 29% over prior year quarter.
    -- $5.5 million in EBIT, up 85% over prior year quarter.
  • Inspection & Heat Treating ("IHT") and Mechanical Services combined business segment revenues declined 3% in the quarter, compared to a very strong prior year quarter, which had a record level of large project activity:
    -- IHT Inspection services up 8%.
    -- On-stream services up 13%.
    -- Turnaround services down 24%.
  • Combined gross margins of IHT and Mechanical Services were virtually flat with prior year quarter (29%), reflecting progress in margin improvement initiatives.
  • Repurchased 370,000 shares of our common stock in the quarter for a total consideration of approximately $13 million, leaving a remaining share repurchase authorization of about $12 million.
  • Recognized a non-cash accounting gain of $2.1 million upon the revaluation of contingent consideration in a recent acquisition.

"We are pleased with the overall results of our second quarter, which reflect the strong rebound by Quest, as expected, and a stabilizing of our job margins after several quarters of cost pressure" said Phil Hawk, Team's Chairman and Chief Executive Officer. "We remain confident in both our near-term and long-term growth and performance potential."

Earnings Conference Call

In connection with this earnings release, Team will hold its quarterly conference call on Wednesday, January 8, 2014 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 866-515-2915 and use conference code 52443864 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 Six Months Ended
November 30, November 30,
2013 2012 2013 2012
(unaudited) (unaudited) (unaudited) (unaudited)
Revenues $ 200,493 $ 200,648 $ 374,804 $ 362,140
Operating expenses 135,678 138,184 260,992 250,140
Gross margin 64,815 62,464 113,812 112,000
Selling, general and administrative expenses 43,422 39,928 84,757 77,002
Earnings from unconsolidated affiliates 350 504 793 866
Gain from revaluation of contingent consideration 2,138 -- 2,138 --
Operating income 23,881 23,040 31,986 35,864
Foreign currency loss 140 114 530 188
Interest expense, net 811 677 1,419 1,276
Earnings before income taxes 22,930 22,249 30,037 34,400
Provision for income taxes 8,333 8,232 10,963 12,728
Net income 14,597 14,017 19,074 21,672
Less: Income attributable to non-controlling interest 172 81 139 175
Net income available to common shareholders $ 14,425 $ 13,936 $ 18,935 $ 21,497
Earnings per common share:
Basic $ 0.71 $ 0.69 $ 0.93 $ 1.08
Diluted $ 0.68 $ 0.66 $ 0.89 $ 1.03
Weighted average number of shares outstanding:
Basic 20,409 20,052 20,459 19,963
Diluted 21,233 20,994 21,323 20,932
TEAM, INC. AND SUBSIDIARIES
ADDITIONAL FINANCIAL INFORMATION
(in thousands, except per share data)
Three Months Ended Six Months Ended
November 30, November 30,
2013 2012 2013 2012
(unaudited) (unaudited) (unaudited) (unaudited)
Adjusted Net income:
Net income available to common shareholders $ 14,425 $ 13,936 $ 18,935 $ 21,497
Non-routine revaluation contingent consideration (2,138) -- (2,138) --
Non-routine severance costs -- -- 742 --
Tax impact of adjustments 780 -- 505 --
Adjusted Net income $ 13,067 $ 13,936 $ 18,044 $ 21,497
Adjusted Net income per common share:
Basic $ 0.64 $ 0.69 $ 0.88 $ 1.08
Diluted $ 0.62 $ 0.66 $ 0.85 $ 1.03
Adjusted EBITDA:
Operating income ("EBIT") $ 23,881 $ 23,040 $ 31,986 $ 35,864
Non-routine revaluation contingent consideration (2,138) -- (2,138) --
Non-routine severance costs -- -- 742 --
Adjusted EBIT 21,743 23,040 30,590 35,864
Depreciation and amortization 5,308 5,081 10,691 9,654
Non-cash share-based compensation costs 1,340 1,237 2,210 2,120
Adjusted EBITDA $ 28,391 $ 29,358 $ 43,491 $ 47,638
Segment Data:
Revenues:
IHT $ 109,427 $ 108,935 $ 205,260 $ 191,145
MS 70,987 76,171 136,756 141,498
Quest 20,079 15,542 32,788 29,497
$ 200,493 $ 200,648 $ 374,804 $ 362,140
Adjusted EBIT:
IHT $ 15,562 $ 16,313 $ 25,745 $ 25,972
MS 7,380 10,459 14,181 17,703
Quest 5,512 2,985 4,816 6,006
Corporate and shared support (6,711) (6,717) (14,152) (13,817)
$ 21,743 $ 23,040 $ 30,590 $ 35,864
Revenues by Service Type:
Inspection and assessment $ 109,483 $ 98,275 $ 198,069 $ 176,317
Turnaround 50,562 66,746 96,204 116,008
On-stream services 40,448 35,627 80,531 69,815
$ 200,493 $ 200,648 $ 374,804 $ 362,140
TEAM, INC. AND SUBSIDIARIES
SUMMARY CONSOLIDATED BALANCE SHEET INFORMATION
NOVEMBER 30, 2013 AND MAY 31, 2013
(in thousands)
November 30, May 31,
2013 2013
(unaudited)
Current assets $ 259,083 $ 246,918
Property, plant and equipment, net 79,728 74,939
Other non-current assets 149,155 138,346
Total assets $ 487,966 $ 460,203
Current liabilities $ 71,587 $ 72,804
Long term debt net of current maturities 91,708 72,946
Other non-current liabilities 23,696 22,263
Stockholders' equity 300,975 292,190
Total liabilities and stockholders' equity $ 487,966 $ 460,203
TEAM, INC. AND SUBSIDIARIES
SUMMARY CONSOLIDATED CASH FLOW INFORMATION
NOVEMBER 30, 2013 AND NOVEMBER 30, 2012
(in thousands)
Six Months Ended
November 30,
2013 2012
(unaudited) (unaudited)
Net income $ 19,074 $ 21,672
Depreciation, amortization and non-cash share based compensation expense 12,901 11,774
Gain on contingent consideration revaluation (2,138) --
Working capital changes (12,819) (15,198)
Other items affecting operating cash flow 3,200 1,471
Net cash provided by operating activities $ 20,218 $ 19,719
Capital expenditures (13,619) (12,654)
Cash used for business acquisitions, net (10,175) (18,144)
Other items affecting investing cash flow 207 (8)
Net cash used in investing activities ($23,587) ($30,806)
Borrowings of debt, net 18,000 19,000
Repurchases of common stock (13,334) --
Cash associated with share-based payment arrangements, net 974 3,874
Net cash provided by financing activities $5,640 $22,874
Effect of exchange rate changes 159 221
Change in cash and cash equivalents $ 2,430 $ 12,008

CONTACT: Ted W. Owen (281) 331-6154

Source:Team, Inc.