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Team, Inc. Reports Record Fiscal Year 2015

  • Adjusted earnings of $2.00 per diluted share (excluding non-routine charges); up 35% over prior year
  • Revenues of $842 million, up 12% over prior year
  • Adjusted EBITDA of $99 million, up 28% over prior year

SUGAR LAND, Texas, Aug. 4, 2015 (GLOBE NEWSWIRE) -- Team, Inc. (NYSE:TISI) today announced record financial results for the fiscal year ending May 31, 2015. Team reported a 35% increase in adjusted earnings to $43.3 million ($2.00 per diluted share) versus adjusted earnings of $31.5 million ($1.48 per diluted share) for the prior year. Revenues for the year ended May 31, 2015 increased by 12% to $842.0 million compared to revenues of $749.5 million for the prior year. (Adjusted earnings in the current year exclude non-routine charges not indicative of Team's ongoing operating activities of $3.2 million (net of tax), or $0.15 per diluted share, as detailed in the accompanying schedule. Adjusted earnings in the prior year exclude non-routine charges of $1.7 million (net of tax), or $0.08 per diluted share, as detailed in the accompanying schedule.)

Fourth quarter 2015 revenues increased 13% to $238.7 million compared to revenues of $211.5 million for the prior year quarter. Fourth quarter adjusted earnings were $16.3 million ($0.77 per diluted share) versus adjusted earnings of $13.3 million ($0.63 per diluted share) for the prior year quarter. (Adjusted earnings in the current quarter exclude non-routine charges of $1.0 million (net of tax), or $0.05 per diluted share, as detailed in the accompanying schedule. Adjusted earnings in the prior year quarter exclude non-routine charges of $1.4 million (net of tax), or $0.07 per diluted share, as detailed in the accompanying schedule.)

"We are very delighted with our record operating performance in fiscal 2015 and I appreciate the collective efforts of our global organization in achieving this milestone," said Ted Owen, Team's President and Chief Executive Officer."Looking forward, we are optimistic and encouraged about the opportunities to continue our organic revenue and earnings growth in fiscal 2016 and, when coupled with the recent acquisition of the Qualspec Group, believe fiscal 2016 will be another record year for Team."

Highlights

  • Fourth Quarter revenues of $238.7 million and adjusted earnings of $0.77 per diluted share.
  • Revenue growth of 13% in the current quarter over the prior year quarter - IHT Group increased 12%, Mechanical Services Group increased 11%, and Quest Integrity increased 26%.
  • Adjusted earnings before interest and taxes ("Adjusted EBIT") of $26.6 million (11% of revenues) in the quarter, up 30% as compared to the prior year quarter.
  • Adjusted EBITDA (Adjusted EBIT plus depreciation, amortization and non-cash compensation expenses) of $33.6 million (14% of revenues) in the quarter, up 25% as compared to the prior year quarter.
  • Completed the previously announced acquisition of the Qualspec Group in July 2015 - adding $180 million to revenue base and 1,000 new Team colleagues.
  • Increased existing credit agreement to $500 million to support acquisition of Qualspec Group.

GAAP Earnings

Team's net income available to shareholders reported in accordance with generally accepted accounting principles (including non-routine items) was $15.4 million ($0.72 per diluted share) for the current quarter as compared to net income of $11.9 million ($0.56 per diluted share) in the prior year quarter; and net income was $40.1 million ($1.85 per diluted share) for the current fiscal year as compared to net income of $29.9 million ($1.40 per diluted share) in the prior fiscal year. Certain non-routine items that are not indicative of Team's ongoing operating activities 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 accompanying tables.

FY2016 Business Outlook

As a result of the recent acquisition of Qualspec Group (Qualspec) we are unable to provide a specific budget target for fiscal year 2016 earnings per share due to pending purchase accounting valuations that will have an impact on our annual depreciation and amortization expense targets. At this time, we expect our consolidated budgeted revenues and EBITDA to be approximately $1.1 billion and $135 million, respectively. These estimates include approximately 11 months of Qualspec operating activity, and exclude non-routine implementation expenses related to the ERP project during the course of the year.

We expect to finalize our fiscal 2016 adjusted EPS target during the first quarter of the year and will announce that budget target in connection with our first quarter earnings call in early October 2015.

Earnings Conference Call

In connection with this earnings release, Team will hold its quarterly conference call on Wednesday, August 5, 2015 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 866-318-8613 and use conference code 14092133 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 across its 150 branch 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,
2015 2014 2015 2014
(unaudited) (unaudited) (unaudited) (unaudited)
Revenues $ 238,718 $ 211,487 $ 842,047 $ 749,527
Operating expenses 162,606 145,079 584,054 527,611
Gross margin 76,112 66,408 257,993 221,916
Selling, general and administrative expenses 51,072 45,973 189,528 171,455
Earnings from unconsolidated affiliates -- -- -- 822
Gain from revaluation of contingent consideration -- -- -- 2,138
Operating income 25,040 20,435 68,465 53,421
Foreign currency loss 20 1,787 1,509 4,185
Loss on investment in Venezuela -- -- 1,177 --
Interest expense, net 703 772 2,489 2,851
Earnings before income taxes 24,317 17,876 63,290 46,385
Provision for income taxes 8,762 5,830 22,793 16,236
Net income 15,555 12,046 40,497 30,149
Less: Income attributable to non-controlling interest 186 116 427 294
Net income available to common shareholders $ 15,369 $ 11,930 $ 40,070 $ 29,855
Earnings per common share:
Basic $ 0.76 $ 0.58 $ 1.95 $ 1.46
Diluted $ 0.72 $ 0.56 $ 1.85 $ 1.40
Weighted average number of shares outstanding:
Basic 20,296 20,462 20,500 20,439
Diluted 21,344 21,265 21,651 21,285
TEAM, INC. AND SUBSIDIARIES
ADDITIONAL FINANCIAL INFORMATION
(in thousands, except per share data)
Three Months Ended
May 31,
Twelve Months Ended
May 31,
2015 2014 2015 2014
(unaudited) (unaudited) (unaudited) (unaudited)
Adjusted Net income:
Net income available to common shareholders $ 15,369 $ 11,930 $ 40,070 $ 29,855
Non-routine Venezuela currency devaluation -- 2,104 -- 3,962
Non-routine revaluation contingent consideration -- -- -- (2,138)
Non-routine acquisition costs 486 -- 650 --
Non-routine legal fees 428 -- 1,524 --
Non-routine fixed asset write-down -- -- 383 --
Non-routine loss on investment in Venezuela -- -- 1,177 --
Non-routine foreign currency loss -- -- 673 --
Non-routine severance costs -- -- -- 742
Non-routine ERP costs 609 -- 609 --
Tax impact of adjustments (549) (725) (1,806) (898)
Adjusted Net income $ 16,343 $ 13,309 $ 43,280 $ 31,523
Adjusted Net income per common share:
Basic $ 0.81 $ 0.65 $ 2.11 $ 1.54
Diluted $ 0.77 $ 0.63 $ 2.00 $ 1.48
Adjusted EBITDA:
Operating income ("EBIT") $ 25,040 $ 20,435 $ 68,465 $ 53,421
Non-routine revaluation contingent consideration (IHT) -- -- -- (2,138)
Non-routine acquisition costs (Corporate) 486 -- 486 --
Non-routine fixed asset write-down (MS) -- -- 383 --
Non-routine acquisition costs (MS) -- -- 164 --
Non-routine legal fees (Quest) 428 -- 1,524 --
Non-routine ERP costs (Corporate) 609 -- 609 --
Non-routine severance costs (Corporate) -- -- -- 742
Adjusted EBIT 26,563 20,435 71,631 52,025
Depreciation and amortization 5,935 5,492 22,787 21,468
Non-cash share-based compensation costs 1,147 1,034 4,838 4,239
Adjusted EBITDA $ 33,645 $ 26,961 $ 99,256 $ 77,732
Segment Data:
Revenues:
IHT $ 132,075 $ 117,850 $ 467,099 $ 408,259
MS 83,390 75,126 300,456 275,322
Quest 23,253 18,511 74,492 65,946
$ 238,718 $ 211,487 $ 842,047 $ 749,527
Adjusted EBIT:
IHT $ 18,376 $ 16,121 $ 60,198 $ 45,649
MS 9,843 9,057 29,260 26,177
Quest 6,407 3,274 14,720 9,260
Corporate and shared support (8,063) (8,017) (32,547) (29,061)
$ 26,563 $ 20,435 $ 71,631 $ 52,025
Adjusted EBITDA:
IHT $ 20,582 $ 18,127 $ 68,611 $ 53,602
MS 11,828 10,874 36,843 33,385
Quest 7,857 4,716 20,424 14,735
Corporate and shared support (6,622) (6,756) (26,622) (23,990)
$ 33,645 $ 26,961 $ 99,256 $ 77,732
TEAM, INC. AND SUBSIDIARIES
SUMMARY CONSOLIDATED BALANCE SHEET INFORMATION
MAY 31, 2015 AND MAY 31, 2014
(in thousands)
May 31,
2015
May 31,
2014
(unaudited)
Current assets $ 288,696 $ 248,814
Property, plant and equipment, net 97,926 89,961
Other non-current assets 137,211 146,166
Total assets $ 523,833 $ 484,941
Current liabilities $ 91,224 $ 75,143
Long term debt net of current maturities 78,484 73,721
Other non-current liabilities 18,750 19,032
Stockholders' equity 335,375 317,045
Total liabilities and stockholders' equity $ 523,833 $ 484,941
TEAM, INC. AND SUBSIDIARIES
SUMMARY CONSOLIDATED CASH FLOW INFORMATION
MAY 31, 2015 AND MAY 31, 2014
(in thousands)
Twelve Months Ended
May 31,
2015 2014
(unaudited) (unaudited)
Net income $ 40,497 $ 30,149
Depreciation, amortization and non-cash share-based compensation expense 27,625 25,707
Loss on investment in Venezuela 1,177 --
Gain on contingent consideration revaluation -- (2,138)
Working capital changes (27,448) (3,481)
Other items affecting operating cash flow 1,620 2,624
Net cash provided by operating activities $ 43,471 $ 52,861
Capital expenditures (28,769) (33,016)
Cash used for business acquisitions, net (3,075) (10,175)
Other items affecting investing cash flow 63 2,582
Net cash used in investing activities ($31,781) ($40,609)
Borrowings of debt, net 8,000 --
Deferred consideration payments (1,000) (1,000)
Contingent consideration payments (1,000) --
Purchases of treasury stock (21,138) (13,334)
Cash associated with share-based payment arrangements, net 5,063 4,691
Net cash used in financing activities ($10,075) ($9,643)
Effect of exchange rate changes (3,060) (2,154)
Change in cash and cash equivalents $ (1,445) $ 455

CONTACT: Greg L. Boane (281) 388-5541

Source:Team, Inc.