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Team, Inc. Reports FY2013 Results; Provides FY2014 Guidance

Team, Inc. Logo

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

Source:Team, Inc.