Team, Inc. Reports Third Quarter Results; Re-Affirms Full Year Earnings Guidance

ALVIN, Texas--(Business Wire)--
Team Inc., (NASDAQ:TISI) today reported net income of $2.9
million, or earnings of $0.15 per diluted share, for its third quarter
ended February 29, 2008 and re-affirmed its full year earnings
guidance of $1.10 to $1.20 per diluted share. Team's revenues
increased 48% to $108.8 million, and operating profits improved 29% to
$6.5 million, compared to last year's quarter. For the fiscal year
through the end of the third quarter, Team's net income was $14.3
million, or $0.73 per diluted share, which represents a 51%
improvement from the corresponding prior year period when net income
was $9.4 million or $0.50 per diluted share. Comparing revenues for
the fiscal year through the end of the third quarter to the
corresponding prior year period, Team's revenues increased 51% to
$334.6 million, and Team's operating profits improved 52% to $28.8
million.

"We continue to be very pleased with the overall growth of our
business from both our acquisitions and our strong organic business
development," said Phil Hawk, Team's Chairman and CEO.

Team's Discussion of Third Quarter Performance

Team's fiscal year 2008 third quarter results included revenues
attributable to the recent Aitec and LRS acquisitions of $10.8 million
and $3.3 million, respectively. Excluding the effect of the recent
acquisitions, Team's overall revenue growth was $21.4 million, or 29%,
compared to the same quarter last year. Revenues for Team's TCM
Division (Team's inspection and field heat treating service lines;
inclusive of Aitec) were $59.1 million for the current period, up
$20.5 million or 53% from the same quarter last year. Revenues for
Team's TMS Division (Team's mechanical service lines of leak repair,
hot tapping, fugitive emissions monitoring, field machining, technical
bolting and field valve repair; inclusive of LRS) for the current
period were $49.7 million, up $15.0 million or 43% from the same
quarter last year. The demand across both divisions was wide spread
across nearly all regions and service lines and helped by continuing
strong market fundamentals.

Operating profit in the third quarter ended February 29, 2008 was
$6.5 million, up 29% from the same quarter last year. Operating profit
margin as a percentage of revenue was 6% for the quarter, about 1%
point lower than the prior year period. The decline in margin
reflected lower gross margin that was partially offset by improved
SG&A expenses as a percentage of sales.

Gross margin in the third quarter ended February 29, 2008 was
$33.6 million compared to $24.1 million in the quarter ended February
28, 2007, an increase of $9.5 million or 40%. Gross margin as a
percentage of revenues was 31% in the current quarter compared to 33%
in the prior year quarter. Overall, Team's gross margins as a
percentage of revenue was impacted by the current period mix of
services in which the lower margin TCM operations comprised a greater
percentage of overall sales. TCM Division gross margins as a
percentage of revenue for the quarter were 27%, down from 30% in the
same quarter prior year. About half of this decrease was due to the
effect of the newer Aitec branches which currently earn lower gross
margins than the legacy Team branches. The remainder of the decrease
reflects lower gross margins in the legacy branches during this
seasonally weak quarter. TMS Division third quarter gross margins as a
percentage of revenues were consistent with the prior year period at
36%.

SG&A in the third quarter ended February 29, 2008 was $27.1
million compared to $19.0 million in the quarter ended February 28,
2007, an increase of $8.1 million or 43%. The increase in SG&A was due
to the Aitec and LRS acquisitions along with investments in field
infrastructure and personnel to support the growth of the business. As
a percentage of sales, SG&A expenses were 25% versus 26% in the prior
year period.

Team Re-Affirms Full Year FY08 Earnings Guidance

Reflecting its continued positive outlook, the company re-affirmed
previously issued performance guidance for the full fiscal year ending
May 31, 2008. Team expects earnings to be between $1.10 and $1.20 per
share which would represent approximately 40% earnings growth for the
full year. Reflecting the most recent acquisition of LRS, which closed
January 9, 2008, Team's revenue estimate for the full year has been
increased $10 million to approximately $460 million.

Earnings Conference Call

In connection with this earnings release, Team will hold its
quarterly conference call on Tuesday, April 1, 2008 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 may call 1-877-826-1586 and use
conference code 21087091.

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 80
locations throughout the United States, Aruba, Belgium, Canada,
Singapore, The Netherlands, Trinidad and Venezuela. Recently named by
Forbes Magazine as one of the 200 best small companies, and by Fortune
Magazine as one of the 100 fastest growing public companies, 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 every reasonable effort to
ensure that the information, assumptions and beliefs upon which this
forward-looking information is based are current, reasonable and
complete. However, a variety of factors could cause actual results to
differ materially from those anticipated in any
forward-looking information. Those factors include domestic and
international economic activity, interest rates and market conditions
for the Company's customers and their levels of capital and
maintenance expenditures, compliance with regulations and changes to
regulations, general liability claims and legal proceedings,
competition in the marketplace, ability to hire and retain a skilled
technical workforce, availability of attractive acquisitions and
unforeseen integration difficulty with future acquisitions, and the
Company's successful implementation of its internal operating plans.
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.

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TEAM, INC. AND SUBSIDIARIES
SUMMARY OF OPERATING RESULTS
(in thousands, except per share data)

Three Months Ended Nine Months Ended
February 29, February 28, February 29, February 28,
------------------------- -------------------------
2008 2007 2008 2007
------------ ------------ ------------ ------------
(unaudited) (unaudited) (unaudited) (unaudited)
Revenues $ 108,823 $ 73,291 $ 334,621 $ 222,215
Operating expenses 75,200 49,216 226,837 145,932
------------ ------------ ------------ ------------
Gross margin 33,623 24,075 107,784 76,283

Selling, general
and
administrative
expenses 27,118 19,025 78,955 57,269
------------ ------------ ------------ ------------
Operating income 6,505 5,050 28,829 19,014

Interest expense,
net 1,618 1,047 5,085 3,167
------------ ------------ ------------ ------------
Earnings before
income taxes 4,887 4,003 23,744 15,847

Provision for
income taxes 1,953 1,561 9,482 6,416
------------ ------------ ------------ ------------
Net income $ 2,934 $ 2,442 $ 14,262 $ 9,431
============ ============ ============ ============

Earnings per
common share:
Basic $ 0.16 $ 0.14 $ 0.79 $ 0.54
============ ============ ============ ============
Diluted $ 0.15 $ 0.13 $ 0.73 $ 0.50
============ ============ ============ ============

Weighted average
number of shares
outstanding:
Basic 18,339 17,616 18,138 17,440
============ ============ ============ ============
Diluted 19,816 19,106 19,649 18,754
============ ============ ============ ============

Continuing
operations data:

Revenues comprised
of:
TCM Division $ 59,110 $ 38,596 $ 192,305 $ 116,206
TMS Division 49,713 34,695 142,316 106,009
------------ ------------ ------------ ------------
$ 108,823 $ 73,291 $ 334,621 $ 222,215
============ ============ ============ ============

Gross margin
comprised of:
TCM Division $ 15,838 $ 11,567 $ 56,232 $ 35,697
TMS Division 17,785 12,508 51,552 40,586
------------ ------------ ------------ ------------
$ 33,623 $ 24,075 $ 107,784 $ 76,283
============ ============ ============ ============

Operating income
comprised of:
Industrial
Services $ 11,132 $ 8,381 $ 41,198 $ 29,119
Corporate (4,627) (3,331) (12,369) (10,105)
------------ ------------ ------------ ------------
$ 6,505 $ 5,050 $ 28,829 $ 19,014
============ ============ ============ ============

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TEAM, INC. AND SUBSIDIARIES
SUMMARY CONSOLIDATED BALANCE SHEET INFORMATION
FEBRUARY 29, 2008 AND MAY 31, 2007
(in thousands)

February 29, May 31,
2008 2007
----------------- -----------------
(unaudited)

Current assets $ 136,894 $ 107,513

Property, plant and equipment, net 50,971 35,166

Other non-current assets 65,681 28,375

----------------- -----------------
Total assets $ 253,546 $ 171,054
================= =================

Current liabilities $ 51,432 $ 37,284

Long term debt net of current
maturities 93,721 48,774

Other non-current liabilities and
minority interests 2,899 793

Stockholders' equity 105,494 84,203

----------------- -----------------
Total liabilities and
stockholders' equity $ 253,546 $ 171,054
================= =================
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Team, Inc., Alvin
Ted W. Owen, 281-331-6154

Copyright Business Wire 2008