Team, Inc. raises FY08 guidance
Team, Inc. (Nasdaq: TISI) CEO Phil Hawk said the industrial maintenance company is raising its fiscal 2008 revenue and earnings guidance. Hawk made the comments during a midday conference call.
“Due to the strong results achieved during the first half of the year and our continuing positive outlook, we have again raised both our revenue and earnings guidance for the full year ending May 31, 2008,” Hawk said.
The Alvin, Tex.-based company is increasing its full-year revenue estimate to $450 million, from a previous $425 million. Fiscal 2008 earnings guidance is being increased by $0.05 per share to a range of $1.10 to $1.20 per share. Analysts, on average, expect earnings of $1.17 per share on revenue of $438.7 million.
After Monday’s closing, Team reported second-quarter net income of $7.8 million, or $0.40 per share, beating analyst estimates of $0.37 per share. This year’s second-quarter profit was up 42% from $5.5 million, or $0.29 per share, a year earlier.
“Obviously, we are very pleased with the financial performance of our business. The driver of this earnings growth continues to be strong, broad-based revenue growth,” Hawk said. “In my view, this growth is the result of a number of factors. There’s no question that overall market demand for our services remains robust, driven by continuing refinery turnaround and expansion projects, significant pipeline projects and generally firm demand in most other segments.”
The firm’s quarterly revenue totaled $122.3 million, above Wall Street expectations of $111 million. Last year, Team posted revenue of $83.2 million.
In a press release late Monday, Team also announced that it expects to complete the acquisition of Leak Repairs Specam from The Netherlands-based GTI Group. Team said it projects the purchase price to be about $18 million.
“For the last 20 years, [Leak Repairs Specam] has been a licensee of Team’s leak sealing, hot tapping and fugitive emissions technologies. They use the same technical approach as Team in their service activities,” Hawk said. “LRS has a very strong market presence. We are delighted to take this first step in Europe.”
The chief executive said that, for the remainder of the year, Team expects the Leak Repairs acquisition to add slightly to earnings, but will not be significant to Team’s overall profits.
Hawk said the company has been able to meet increased demand by expanding its employee base. Excluding the impact of a recent acquisition, he said the company increased its workforce by 217 people, or about 8%.
“We also believe that we continue to gain market share by providing outstanding fuel service and capitalizing on long-term customer procurement trends,” he said.
In midday trading, TISI shares are up 6.95%, or $2.31, at $35.56. Over the last 52 weeks, shares have ranged from $13.01 to $39.19.
