Team, Inc. Reports Strong Second Quarter Profit Growth.ALVIN, Texas Alvin is a city in Brazoria County, Texas, United States, within the Houston–Sugar Land–Baytown Metropolitan Area. The city sits in Texas's 14th Congressional District, currently represented by Congressman Ron Paul. As of the 2000 U.S. -- Team Inc., (AMEX AMEX See: American Stock Exchange :TMI TMI Too Much Information TMI Three Mile Island TMI TRMM Microwave Imager TMI Transactions on Medical Imaging TMI Texas Military Institute TMI Teen Missions International TMI Tauber Manufacturing Institute ) today reported income from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the of $3.8 million, or $0.41 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, for its second quarter ending November 30, 2005. Net income from continuing operations increased 169% from the corresponding prior year period in which Team earned $1.4 million, or $0.16 per diluted share. For the quarter, Team's revenues improved 39% to $67.0 million, operating profits Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. grew 143% to $7.1 million, and operating profit margin Operating profit margin The ratio of operating profit to net sales. was 11% compared to 6% in the prior year quarter. For the year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. period, Team's net income was $4.4 million, or $0.47 per diluted share, up 154% from the corresponding prior year period. Year-to-date revenues increased 55% to $121.2 million, operating profits improved 154% to $8.8 million, and operating profit margin was 7% compared to 4% in the prior year-to-date period. Team acquired the assets of Cooperheat-MQS during the first quarter of the last fiscal year, affecting the comparability of some of the year-to-date results. "We are pleased with the strong operating performance in the most recent quarter," said Phil Hawk hawk, name generally applied to the smaller members of the Accipitridae, a heterogeneous family of diurnal birds of prey, such as the eagle, the kite, the Old World vulture, and the secretary bird. , Team's Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . "Several factors contributed to this performance including the broader business base as a result of last year's acquisition, significantly improved margins in the acquired business, and strong organic revenue growth in nearly all aspects of our industrial services business," said Hawk. Industrial Services Business Segment For the most recent quarter, Team Industrial Services segment revenues were $67.0 million, up 39% from the prior year quarter. Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. for the segment was $9.4 million, up $4.7 million or a 98% increase over last year's quarter. Operating profit percentage for the segment was 14% versus 10% for last year's second quarter. Both the TMS TMS Transcranial Magnetic Stimulation (alternative medicine for depression) TMS Test Match Special (sports - cricket) TMS Texas Motor Speedway TMS Transportation Management System TMS Toyota Motor Sales and TCM (1) (Trellis-Coded Modulation/Viterbi Decoding) A technique that adds forward error correction to a modulation scheme by adding an additional bit to each baud. TCM is used with QAM modulation, for example. divisions, and nearly all geographic regions and service lines within these divisions, contributed to Team's strong revenue growth during the quarter. TCM Division (Team's NDE NDE Nondestructive Examination NDE No Diplomatic Exchange (US Department of State) NDE Near Death Experience NDE Nondestructive Evaluation (ultrasound material evaluation) inspection and field heat treating service lines) revenues for the quarter were $38.3 million, a 45% improvement over the prior year quarter. TMS Division (Team's mechanical service lines of leak (programming) leak - With a qualifier, one of a class of resource-management bugs that occur when resources are not freed properly after operations on them are finished, so they effectively disappear (leak out). This leads to eventual exhaustion as new allocation requests come in. repair, hot tapping, fugitive emissions monitoring, field machining, technical bolting bolting 1. of a horse, escaping from restraint at full gallop. 2. of a horse, eating its food greedily and rapidly. , and field valve repair) revenues for the quarter were $28.7 million, up 31% from the prior year quarter. The revenues for all service lines were well ahead of the prior year quarter. All geographic regions in both divisions, except one, experienced revenue growth in the quarter. The company believes that the growth reflects strong market demand driven in part by very robust customer profit margins in several key segments, combined with Team's continued market share growth. This growth is driven by outstanding service performance and ongoing customer strategies to consolidate service procurement The fancy word for "purchasing." The procurement department within an organization manages all the major purchases. with fewer, larger multi-service, multi-location service companies. For the quarter, Hurricanes Katrina and Rita depressed overall revenues slightly due to the temporary disruptions and the inability to perform any work at several major facilities. However, offsetting increases in work related to storm damage repairs are expected over the next several quarters. The segment's 14% operating profit margin was up significantly from the prior year and almost back to pre-acquisition levels. The biggest improvement for the quarter was in TCM branches, which are benefiting from the completion of integration activities related to the Cooperheat acquisition, growing familiarity with Team systems and management tools, and increasing commercial business momentum. "Our recent performance has affirmed af·firm v. af·firmed, af·firm·ing, af·firms v.tr. 1. To declare positively or firmly; maintain to be true. 2. To support or uphold the validity of; confirm. v.intr. two key premises to our longer-term strategy," said Hawk. "First, we demonstrated our continuing ability to organically grow all aspects of our business at attractive growth rates Growth Rates The compounded annualized rate of growth of a company's revenues, earnings, dividends, or other figures. Notes: Remember, historically high growth rates don't always mean a high rate of growth looking into the future. . Second, while we have not yet fully achieved expected levels of performance, we also confirmed our ability to earn attractive profit margins in our newly acquired branches in the TCM division." Climax Climax Following a protracted period of selling or buying, a point wherein market trends are retarded or discontinued. Notes: At a selling climax, the market is characterized by a trend reversal whereby the market begins to buy stocks and prices rise. Discontinued Operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. and Business Sale As previously announced, Team sold Climax Portable Machine Tools, Inc. (the entire Equipment Sales and Rental business segment) on November 30, 2005. The operating results for the quarter and year-to-date have been reclassified as discontinued operations. Team remains responsible for certain post-sale Climax business expenses, including accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying collections, product warranty and liability expenses. The company believes it has set up adequate reserves for these expenses. The pre-tax operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. for this business was $131,000 and $78,000 for the second quarter and year-to-date periods, respectively, which is net of $150,000 of costs associated with assumed liabilities for both the quarter and year-to-date periods, as well as interest expense allocated of $237,000 for the quarter and $472,000 for the six month year-to-date period. The sale of the Climax operations resulted in a net pre-tax gain of about $1.5 million. However, because of the significant difference in book and tax basis of assets, the effective tax rate on the gain is nearly 100%, resulting in deminimus results from discontinued operations. "In the December 1, 2005 press release announcing the sale of Climax, we indicated that the sale would result in a gain of about $0.05 per share," said Hawk. "However, the tax basis difference was more than originally estimated, which resulted in the elimination of the gain." Outlook for the Remainder of FY2006 The Company remains comfortable with its previously issued full year guidance for FY 2006 ending May 31, 2006 of $1.15 to $1.30 per share. Earnings Conference Call In connection with this earnings release, the Company will hold its quarterly conference call on Thursday, January 5, 2006, at 10:00 a.m. Central Time (11:00 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 can call 1-888-896-0862 and ask to join the Team IR call. Team, Inc. is a professional, full-service provider of specialty industrial services. Team's current industrial service offering encompasses on-stream leak repair, hot tapping, fugitive emissions monitoring, field machining, technical bolting, field valve repair, NDE inspection and field heat treating. All these services are required in maintaining high temperature, high pressure piping systems and vessels utilized extensively in the refining refining, any of various processes for separating impurities from crude or semifinished materials. It includes the finer processes of metallurgy, the fractional distillation of petroleum into its commercial products, and the purifying of cane, beet, and maple sugar , petrochemical petrochemical, any one of a large group of chemicals derived from a component of petroleum or natural gas. The cracking processes for manufacturing gasoline produce vast quantities of gaseous hydrocarbons. , power, pipeline, and other heavy industries. Team's inspection services also serve the aerospace and automotive industries Automotive Industries, Ltd. (Hebrew: תעשיות רכב נצרת עלית, תע"ר . Headquartered in Alvin, Texas, the Company operates in over 50 customer service locations throughout the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . The Company also serves the international market through both its own international subsidiaries as well as through licensed arrangements in 14 countries. Team, Inc. common stock is traded on the American Stock Exchange American Stock Exchange (AMEX) Stock exchange in the U.S. Originally known as “the Curb,” it began as an outdoor marketplace in New York City c. 1850. It moved indoors to its present location in the Wall Street area in 1921. under the ticker symbol Ticker Symbol An arrangement of characters (usually letters) representing a particular security listed on an exchange or otherwise traded publicly. When a company issues securities to the public marketplace, it selects an available ticker symbol for its securities which investors "TMI". Certain forward-looking information contained herein is being provided in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with the provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and . Such information is subject to certain assumptions and beliefs based on current information known to the Company and is subject to factors that could result in actual results differing materially from those anticipated in the forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. contained herein. Such factors include domestic and international economic activity, interest rates, and market conditions for the Company's customers, regulatory changes and legal proceedings All actions that are authorized or sanctioned by law and instituted in a court or a tribunal for the acquisition of rights or the enforcement of remedies. , and the Company's successful implementation of its internal operating plans. Accordingly, there can be no assurance that the forward-looking statements contained herein will occur or that objectives will be achieved.
TEAM, INC. AND SUBSIDIARIES
SUMMARY OF OPERATING RESULTS
Three Months Ended Six Months Ended
November 30, November 30,
------------------------- --------------------------
2005 2004 2005 2004
------------ ------------ ------------- ------------
Revenues $67,046,000 $48,385,000 $121,198,000 $78,175,000
Operating
expenses 43,642,000 31,969,000 80,511,000 51,768,000
------------ ------------ ------------- ------------
Gross Margin 23,404,000 16,416,000 40,687,000 26,407,000
Selling, general
and
administrative
expenses 16,312,000 13,492,000 31,906,000 22,728,000
Non-cash G&A
compensation
cost 5,000 5,000 9,000 228,000
------------ ------------ ------------- ------------
Operating
income--
continuing
operations 7,087,000 2,919,000 8,772,000 3,451,000
Interest expense,
net 942,000 625,000 1,779,000 816,000
------------ ------------ ------------- ------------
Earnings from
continuing
operations
before income
taxes 6,145,000 2,294,000 6,993,000 2,635,000
Provision for
income taxes 2,314,000 872,000 2,645,000 1,000,000
------------ ------------ ------------- ------------
Income from
continuing
operations 3,831,000 1,422,000 4,348,000 1,635,000
------------ ------------ ------------- ------------
Discontinued
operations:
Income (loss)
from
operations of
discontinued
segment (131,000) 40,000 (78,000) 133,000
Gain on sale of
segment 1,494,000 - 1,494,000 -
------------ ------------ ------------- ------------
Earnings from
discontinued
operations
before
income taxes 1,363,000 40,000 1,416,000 133,000
Provision for
income taxes 1,389,000 15,000 1,410,000 52,000
------------ ------------ ------------- ------------
Income (loss)
from
discontinued
operations (26,000) 25,000 6,000 81,000
------------ ------------ ------------- ------------
Net income $3,805,000 $1,447,000 $4,354,000 $1,716,000
============ ============ ============= ============
Earnings per
common share:
Continuing
operations
Basic $0.46 $0.18 $0.52 $0.20
============ ============ ============= ============
Diluted $0.41 $0.16 $0.47 $0.18
============ ============ ============= ============
Discontinued
operations
Basic $(0.00) $0.00 $0.00 $0.01
============ ============ ============= ============
Diluted $(0.00) $0.00 $0.00 $0.01
============ ============ ============= ============
Net income
Basic $0.46 $0.18 $0.52 $0.21
============ ============ ============= ============
Diluted $0.41 $0.16 $0.47 $0.19
============ ============ ============= ============
Weighted average
number of shares
outstanding:
Basic 8,361,000 8,142,000 8,312,000 8,104,000
============ ============ ============= ============
Diluted 9,292,000 9,016,000 9,205,000 8,933,000
============ ============ ============= ============
Revenues
comprised of:
TMS $28,738,000 $21,932,000 $53,145,000 $41,302,000
TCM 38,308,000 26,453,000 68,053,000 36,873,000
------------ ------------ ------------- ------------
$67,046,000 $48,385,000 $121,198,000 $78,175,000
============ ============ ============= ============
Operating
income--
continuing
operations
comprised of:
Industrial
Services $9,441,000 $4,770,000 $14,102,000 $6,695,000
Corporate costs (2,354,000) (1,851,000) (5,330,000) (3,244,000)
------------ ------------ ------------- ------------
$7,087,000 $2,919,000 $8,772,000 $3,451,000
============ ============ ============= ============
TEAM, INC. AND SUBSIDIARIES
SUMMARY CONSOLIDATED BALANCE SHEET INFORMATION
NOVEMBER 30 AND MAY 31, 2005
Nov. 30 May 31
2005 2005
-------------- -------------
Cash $2,855,000 $3,993,000
Accounts Receivable $68,603,000 $59,364,000
Other current Assets $14,610,000 $12,168,000
Current assets of discontinued operations $- $5,486,000
-------------- -------------
Current assets $86,068,000 $81,011,000
Net property, plant and equipment $24,992,000 $24,378,000
Non current assets of discontinued
operations $- $7,883,000
Other non-current assets $29,713,000 $30,054,000
-------------- -------------
Total assets $140,773,000 $143,326,000
============== =============
Current maturities of long-term debt $4,578,000 $3,835,000
Accounts payable and other current
liabilities $30,690,000 $26,807,000
Current liabilities of discontinued
operations $- $1,281,000
-------------- -------------
Total current liabilities $35,268,000 $31,923,000
Long term debt $48,425,000 $59,907,000
Other non-current liabilities and taxes $2,252,000 $2,554,000
Stockholders' equity $54,828,000 $48,942,000
-------------- -------------
Total liabilities and stockholders'
equity $140,773,000 $143,326,000
============== =============
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