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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
AMENDMENT NO. 1
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended NOVEMBER 30, 1996
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period to
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Commission file number 0-9950
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TEAM, INC.
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Texas 74-1765729
- -------------------------------------------------- ---------------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation Identification Number)
or organization)
1019 South Hood Street, Alvin, Texas 77511
- -------------------------------------------------- ---------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (281) 331-6154
----------------------------
-------------------------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
--- ---
On January 6, 1997, there were 5,159,842 shares of the Registrant's common
stock outstanding.
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
The Consolidated Statements of Cash Flows set forth in Item
1 have been amended to report separate disclosures of cash
flows pertaining to the operating and financing activities
of discontinued operations.
2
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ITEM 1. FINANCIAL STATEMENTS
TEAM, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
NOVEMBER 30, MAY 31,
1996 1996
(RESTATED)
------------ ------------
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 2,030,000 $ 2,037,000
Accounts receivable, net of allowance for doubtful
accounts of $162,000 and $171,000 7,944,000 8,140,000
Materials and supplies 5,908,000 5,748,000
Prepaid expenses and other current assets 763,000 846,000
------------ ------------
Total Current Assets 16,645,000 16,771,000
Net Assets of Discontinued Operations, Net of Reserve
for Future Losses of $366,000 and $0 2,914,000 3,503,000
Property, Plant and Equipment:
Land and buildings 6,588,000 6,874,000
Machinery and equipment 11,376,000 11,088,000
------------ ------------
17,964,000 17,962,000
Less accumulated depreciation and amortization 12,048,000 12,197,000
------------ ------------
5,916,000 5,765,000
Other Assets 2,518,000 2,887,000
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$ 27,993,000 $ 28,926,000
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current portion of long-term debt $ 1,739,000 $ 1,735,000
Accounts payable 1,171,000 846,000
Other accrued liabilities 3,409,000 3,546,000
Current income taxes payable 41,000 --
------------ ------------
Total Current Liabilities 6,360,000 6,127,000
Long-term Debt and Other Obligations 10,268,000 11,754,000
Stockholders' Equity:
Preferred stock, cumulative, par value $100 per share,
500,000 shares authorized, none issued -- --
Common stock, par value $.30 per share, 10,000,000
shares authorized and 5,169,542 shares issued 1,551,000 1,551,000
Additional paid-in capital 24,992,000 24,992,000
Accumulated deficit (15,081,000) (15,401,000)
Treasury stock at cost, 9,700 shares (97,000) (97,000)
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11,365,000 11,045,000
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$ 27,993,000 $ 28,926,000
============ ============
</TABLE>
See notes to consolidated financial statements 3
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TEAM, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
NOVEMBER 30, NOVEMBER 30,
---------------------------- -----------------------------
1996 1995 1996 1995
(Restated) (Restated)
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenues $ 11,271,000 $ 11,475,000 $ 21,426,000 $ 23,593,000
Operating expenses 6,261,000 7,044,000 11,976,000 13,634,000
Selling, general and administrative expenses 4,221,000 4,615,000 8,393,000 9,455,000
Interest 228,000 301,000 473,000 626,000
------------ ------------ ------------ ------------
Earnings (loss) from continuing operations before
income taxes 561,000 (485,000) 584,000 (122,000)
Provision (benefit) for income taxes 251,000 (65,000) 265,000 138,000
------------ ------------ ------------ ------------
Earnings (loss) from continuing operations, net of
income taxes 310,000 (420,000) 319,000 (260,000)
Earnings (loss) from Military Housing projects
discontinued operations, net -- (128,000) 182,000 (254,000)
Estimated loss on sale of Military Housing projects
discontinued operations, net -- -- (181,000) --
------------ ------------ ------------ ------------
Net earnings (loss) $ 310,000 $ (548,000) $ 320,000 $ (514,000)
============ ============ ============ ============
Net earnings (loss) per common share:
Net earnings (loss) from continuing operations $ 0.06 $ (0.08) $ 0.06 $ (0.05)
Net earnings (loss) from Military Housing projects
discontinued operations $ 0.00 (0.03) 0.04 (0.05)
Net estimated loss on sale of Military Housing
projects discontinued operations 0.00 0.00 (0.04) 0.00
------------ ------------ ------------ ------------
Net earnings (loss) $ 0.06 $ (0.11) $ 0.06 $ (0.10)
============ ============ ============ ============
Weighted average number of shares outstanding 5,160,000 5,160,000 5,160,000 5,160,000
============ ============ ============ ============
</TABLE>
See notes to consolidated financial statements 4
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TEAM, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
----------------------------
NOVEMBER 30, NOVEMBER 30,
1996 1995
(RESTATED)
----------- -----------
<S> <C> <C>
Cash Flows From Operating Activities:
Net earnings (loss) $ 320,000 $ (514,000)
(Earnings) loss from discontinued operations (1,000) 254,000
----------- -----------
Net earnings (loss) from continuing operations 319,000 (260,000)
Adjustments to reconcile net earnings
to net cash provided by operating activities:
Depreciation and amortization 723,000 1,077,000
(Gain) loss on sale of assets (21,000) 3,000
Change in assets and liabilities:
(Increase) decrease:
Accounts receivable 196,000 (688,000)
Materials and supplies (160,000) 471,000
Prepaid expenses and other assets 83,000 213,000
Increase (decrease):
Accounts payable 325,000 19,000
Other accrued liabilities (137,000) 118,000
Income taxes payable 41,000 22,000
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Net cash provided by continuing operating activities 1,369,000 975,000
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Cash Flows From Discontinued Operations:
Earnings (loss) from discontinued operations 1,000 (254,000)
Depreciation 729,000 729,000
Decrease in current assets 221,000 274,000
Increase (decrease) in current liabilities 148,000 (324,000)
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Net cash provided by discontinued operations 1,099,000 425,000
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Net cash provided by operating activities 2,468,000 1,400,000
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Cash Flows from Investing Activities:
Capital expenditures (916,000) (272,000)
Disposal of property and equipment 183,000 4,000
Decrease (increase) in other assets 205,000 (137,000)
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Net cash used in investing activities (528,000) (405,000)
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Cash Flows From Financing Activities:
Payments under debt agreements
and capital lease obligations - continuing (1,437,000) (1,733,000)
Payments under debt agreements - discontinued (510,000) (469,000)
----------- -----------
Net cash used in financing activities (1,947,000) (2,202,000)
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Net decrease in cash and cash equivalents (7,000) (1,207,000)
Cash and cash equivalents at beginning of year 2,037,000 3,139,000
----------- -----------
Cash and cash equivalents at end of period $ 2,030,000 $ 1,932,000
=========== ===========
Supplemental disclosure of cash flow information:
Cash paid during the period for interest:
Operating $ 480,000 $ 639,000
Discontinued 1,648,000 1,688,000
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$ 2,128,000 $ 2,327,000
=========== ===========
Income taxes paid $ 10,000 $ 57,000
=========== ===========
Income taxes refunded $ 4,000 $ 21,000
=========== ===========
</TABLE>
See notes to consolidated financial statements 5
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TEAM, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Method of Presentation
General
The interim financial statements are unaudited, but in the opinion of
management, reflect all adjustments, consisting only of normal
recurring adjustments, necessary for a fair presentation of results for such
periods. The results of operations for any interim period are not
necessarily indicative of results for the full year. These financial
statements should be read in conjunction with the financial statements and
notes thereto contained in the Company's annual report for the fiscal year
ended May 31, 1996.
The prior period financial statements have been restated to reflect the
Military Housing projects segment as discontinued operations. Also,
certain amounts from the previous year have been reclassified to conform
with the current year presentation.
2. Dividends
No dividends were paid during the first six months of fiscal 1997 or
1996. Pursuant to the Company's Credit Agreement, the Company may not
pay quarterly dividends without the consent of its senior lender. Future
dividend payments will depend upon the Company's financial condition and
other relevant matters.
3. Discontinued Operation - Military Housing Projects
As previously reported, the Company entered into an Agreement of
Purchase and Sale with respect to the sale of the Company's 801
Military Housing Projects. The closing of the sale was originally expected
to close in December; however, due to certain conditions having not yet been
met, management now anticipates final closing to occur late in the third
quarter or early in the fourth quarter of fiscal 1997. No assurance can be
made, however, that the transaction will be completed. A summary of the
discontinued Military Housing Projects' assets and liabilities as of
November 30, 1996 and May 31, 1996 follows:
<TABLE>
<CAPTION>
November 30, May 31,
1996 1996
----------- -----------
<S> <C> <C>
Assets:
Current assets ........... $ 2,668,000 $ 2,890,000
Land and buildings, net .. 40,394,000 41,123,000
----------- -----------
$43,062,000 $44,013,000
Liabilities:
Current liabilities ...... $ 1,527,000 $ 1,745,000
Long-term debt ........... 38,255,000 38,765,000
----------- -----------
$39,782,000 $40,510,000
----------- -----------
Net Assets ............... $ 3,280,000 $ 3,503,000
=========== ===========
</TABLE>
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For the three months ended November 30, 1996, the Military Housing
Projects had losses (before tax benefit) of approximately $95,000. The
original estimated future operating loss accrued at August 31, 1996 was
$180,000 while the original accrual for estimated loss on the sale of the
Projects was $281,000. Management estimates that no additional loss accruals
will be necessary.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereto duly authorized.
TEAM, INC.
(Registrant)
Date: March 6, 1997
WILLIAM A. RYAN
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William A. Ryan, Chairman of the Board,
President and Chief Executive Officer
MARGIE E. ROGERS
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Margie E. Rogers, Vice President
and Treasurer
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