Team, Inc. Reports 4th Quarter FY2010 Results; Provides FY2011 Guidance; Announces Stock Repurchase Plan

 

ALVIN, Texas, Aug. 3 /PRNewswire-FirstCall/ -- Team, Inc. (Nasdaq: TISI) today announced increased revenues and profits for the fourth quarter ended May 31, 2010.  Revenues for the fourth quarter ended May 31, 2010 were $125.5 million, an increase of $4.3 million, or 4%, from the same quarter of fiscal year 2009.  Operating income in the fourth quarter of fiscal year 2010, adjusted for non-routine charges, was $10.7 million, an increase of $1.0 million or 10%, from the same quarter of fiscal year 2009.  Adjusted net income and diluted earnings per share for the fourth quarter were $6.1 million or $0.31 per share.  

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Full fiscal year 2010 revenues of $453.9 million resulted in adjusted net income and adjusted diluted earnings per share of $15.6 million or $0.80 per diluted share.  This compares to fiscal year 2009 revenues of $497.6 million, net income of $22.9 million and diluted earnings per share of $1.16.  Fiscal year 2009 benefitted from the best first half financial results in Team history, as the effects of the recession did not begin to affect Team until the third quarter of fiscal 2009.  

Adjusted results for fiscal year 2010 exclude charges related to three non-routine matters: (1) costs related to the previously disclosed FCPA investigation ($3.2 million); (2) non-cash foreign currency losses related to the previously disclosed Venezuelan currency devaluation ($1.7 million); and (3) non-routine severance charges incurred during the fourth quarter ($0.7 million).  The severance costs, related to initiatives designed to reduce operating costs and improve efficiency, will result in the elimination of approximately $6 million of indirect and SG&A costs to be realized in fiscal year 2011. GAAP fully diluted earnings per share, fully reflecting all of these non-routine charges, were $0.29 for the fourth quarter and $0.63 for the full fiscal year.

With strong operating cash flows during the year, Team reduced its total net debt (total debt less cash) by $33 million during the fiscal year.  At May 31, 2010, Team's net debt was $36 million and unused borrowing capacity was $78 million.

Business Outlook/Guidance for Fiscal Year 2011

Team expects its revenues for the coming full fiscal year (the fiscal year ending May 31, 2011) to be in the range of $470 million to $500 million.  For the same time period, net income is expected to be in a range of $1.00 to $1.15 per fully diluted share.  The revenue projections reflect the Company's view that the economic environment will remain challenging with only modest market demand recovery.  The earnings expectations reflect the benefit of the expected revenue growth plus the full year impact of cost reduction actions taken by Team.  Consistent with its past practice, Team does not provide specific guidance for individual quarters, but will confirm or update annual guidance at least quarterly.

"We are poised to continue with and build upon the business growth and momentum that began in the second half of our last fiscal year.  While we expect only modest improvement in market conditions in the near term, we have taken, and are taking, the steps necessary to be successful in this environment," said Phil Hawk, Team's CEO and Chairman.

Authorization for Stock Repurchase Plan

Team's Board of Directors has authorized management to repurchase, in open market transactions, up to $15 million of Team common stock effective immediately. Based upon the current market share price, the stock repurchase plan represents approximately 5% of Team's issued and outstanding shares.  

FCPA Investigation Update

As previously reported, Team's Audit Committee completed its independent investigation regarding possible violations of the Foreign Corrupt Practices Act ("FCPA") in its TMS Trinidad branch.  The results of the FCPA investigation were communicated to the SEC and Department of Justice in May 2010 and the Company is awaiting their response. The results of the independent investigation support management's belief that any possible violations of the FCPA were limited in size and scope. The total professional costs associated with the investigation were approximately $3.2 million.

Earnings Conference Call

In connection with this earnings release, Team will hold its quarterly conference call on Wednesday, August 4, 2010 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 877-826-1586 and use conference code 27560905 when prompted.

About Team, Inc.

Headquartered in Alvin, Texas, Team Inc. is a leading provider of specialty industrial services 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 100 locations throughout the world.  Team's common stock is traded on the NASDAQ Global Select Market 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 for the year ended May 31, 2009 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.

SOURCE Team, Inc.