<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(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, 2000
----------------------------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period to
------------------ -------------------------
Commission file number 0-9950
------------------------------------------------
TEAM, INC.
--------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Texas 74-1765729
---------------------------------------- --------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
200 Hermann Drive, Alvin, Texas 77511
--------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (281) 331-6154
------------------------------
----------
Indicate by checkmark 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 3, 2001, there were 7,854,834 shares of the Registrant's common stock
outstanding.
<PAGE> 2
TEAM, INC.
INDEX
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION Page No.
----------
<S> <C> <C>
Item 1. Financial Statements
Consolidated Condensed Balance Sheets -- 1
November 30, 2000 (Unaudited) and May 31, 2000
Consolidated Condensed Statements of Operations
(Unaudited) -- 2
Three Months Ended
November 30, 2000 and 1999
Consolidated Condensed Statements of Cash Flows
(Unaudited) -- 3
Three Months Ended
November 30, 2000 and 1999
Notes to Unaudited Consolidated Condensed
Financial Statements 4
Item 2. Management's Discussion and Analysis 8
of Financial Condition and
Results of Operations
Item 3. Quantitative and Qualitative Disclosure 10
about Market Risk
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders 10
Item 6. Exhibits and Reports on Form 8-K 11
</TABLE>
<PAGE> 3
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
TEAM, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
NOVEMBER 30, MAY 31,
ASSETS 2000 2000
------------ ------------
(Unaudited)
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 996,000 $ 327,000
Accounts receivable, net of allowance for doubtful
accounts of $256,000 and $251,000 15,040,000 13,580,000
Inventories 8,200,000 7,821,000
Prepaid expenses and other current assets 1,236,000 1,017,000
------------ ------------
Total Current Assets 25,472,000 22,745,000
Property, Plant and Equipment, net of accumulated
depreciation of $13,450,000 and $15,076,000 12,335,000 13,249,000
Goodwill, net of accumulated amortization
of $511,000 and $373,000 10,479,000 10,616,000
Other Assets 1,578,000 1,878,000
------------ ------------
Total Assets $ 49,864,000 $ 48,488,000
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current portion of long-term debt $ 1,569,000 $ 1,611,000
Accounts payable 2,556,000 1,979,000
Other accrued liabilities 3,132,000 3,040,000
Income taxes payable 1,240,000 1,102,000
------------ ------------
Total Current Liabilities 8,497,000 7,732,000
Long-term debt 16,070,000 15,728,000
Other long-term liabilities 1,722,000 2,060,000
Commitments and Contingencies
Stockholders' Equity:
Preferred stock, 500,000 shares authorized, none issued
Common stock, par value $.30 per share, 30,000,000 shares
authorized, 8,281,954 and 8,256,954 shares issued at
November 30 and May 31, 2000, respectively 2,485,000 2,477,000
Additional paid-in capital 32,146,000 32,103,000
Accumulated deficit (10,380,000) (11,488,000)
Unearned compensation (15,000) (27,000)
Treasury stock at cost, 213,520 and 9,700 shares (661,000) (97,000)
------------ ------------
Total Stockholders' Equity 23,575,000 22,968,000
------------ ------------
Total Liabilities and Stockholders' Equity $ 49,864,000 $ 48,488,000
============ ============
</TABLE>
See notes to unaudited consolidated condensed financial statements.
-1-
<PAGE> 4
TEAM, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
NOVEMBER 30, NOVEMBER 30,
---------------------------- ----------------------------
2000 1999 2000 1999
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenues $ 19,545,000 $ 16,337,000 $ 36,321,000 $ 31,747,000
Operating expenses 11,630,000 9,086,000 21,814,000 18,001,000
------------ ------------ ------------ ------------
Gross Margin 7,915,000 7,251,000 14,507,000 13,746,000
Selling, general and administrative expenses 6,246,000 6,168,000 12,055,000 12,213,000
Other income, net (360,000) -- (360,000) --
------------ ------------ ------------ ------------
Earnings before interest and taxes 2,029,000 1,083,000 2,812,000 1,533,000
Interest 459,000 411,000 875,000 788,000
------------ ------------ ------------ ------------
Earnings before income taxes 1,570,000 672,000 1,937,000 745,000
Provision for income taxes 681,000 316,000 828,000 343,000
------------ ------------ ------------ ------------
Net income $ 889,000 $ 356,000 $ 1,109,000 $ 402,000
============ ============ ============ ============
Net income per common share:
Basic $ 0.11 $ 0.04 $ 0.14 $ 0.05
============ ============ ============ ============
Diluted $ 0.11 $ 0.04 $ 0.14 $ 0.05
============ ============ ============ ============
Weighted average number of shares outstanding:
Basic 8,099,000 8,238,000 8,165,000 8,230,000
============ ============ ============ ============
Diluted 8,184,000 8,285,000 8,233,000 8,311,000
============ ============ ============ ============
</TABLE>
See notes to unaudited consolidated condensed financial statements.
-2-
<PAGE> 5
TEAM, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
NOVEMBER 30,
2000 1999
------------ ------------
<S> <C> <C>
Cash Flows from Operating Activities:
Net income (loss) $ 1,109,000 $ 402,000
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation, amortization and other 1,468,000 1,511,000
Other (income) expense (360,000)
Equity in losses of unconsolidated subsidiaries 44,000
Change in assets and liabilities
(Increase) decrease:
Accounts receivable (1,543,000) (1,691,000)
Inventories (379,000) 404,000
Prepaid expenses and other current assets (219,000) (396,000)
Increase (decrease):
Accounts payable 576,000 (2,000)
Other accrued liabilities 92,000 244,000
Income taxes payable 138,000 187,000
------------ ------------
Net cash provided by operating activities 926,000 659,000
------------ ------------
Cash Flows From Investing Activities:
Capital expenditures (1,067,000) (575,000)
Additions to rental and demo machines (360,000)
Disposal of property and equipment 1,575,000 41,000
Other 145,000 (532,000)
------------ ------------
Net cash provided by (used in) investing activities 293,000 (1,066,000)
------------ ------------
Cash Flows From Financing Activities:
Payments under debt agreements and other long-term obligations (990,000) (237,000)
Proceeds from issuance of long-term debt 953,000
Repurchase of common stock (564,000)
Issuance of common stock 51,000 130,000
------------ ------------
Net cash used in financing activities (550,000) (107,000)
------------ ------------
Net increase (decrease) in cash and cash equivalents 669,000 (514,000)
Cash and cash equivalents at beginning of year 327,000 1,035,000
------------ ------------
Cash and cash equivalents at end of period $ 996,000 $ 521,000
============ ============
Supplemental disclosure of cash flow information:
Cash paid during the period for interest $ 829,000 $ 754,000
============ ============
Income taxes paid $ 699,000 $ 69,000
============ ============
</TABLE>
See notes to unaudited consolidated condensed financial statements.
-3-
<PAGE> 6
TEAM, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED CONDENSED
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 consolidated condensed balance sheet at November 30, 2000 is derived
from the May 31, 2000 audited consolidated financial statements. 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, 2000.
New Accounting Standards
In June 1999, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 137, "Accounting for Derivative Instruments and Hedging
Activities-Deferral of the Effective Date of FASB Statement No. 133-an
amendment of FASB No. 133", which effectively delays the application of
SFAS No. 133 for one year, to fiscal years beginning after June 15, 2000.
In June 2000, the FASB issued SFAS No. 138, "Accounting for Certain
Derivative Instruments and Certain Hedging Activities - an amendment of
FASB Statement No. 133" which amends and supercedes various sections of
SFAS No. 133. Management is currently studying SFAS No. 133 and its
amendments for their possible impact on the consolidated financial
statements when they are adopted in June 2001.
2. Dividends and Stock Repurchases
No dividends were paid during the three months ended November 30, 2000
or 1999. 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.
On July 13, 2000, the Board of Directors approved a stock repurchase
plan of up to 10% of the outstanding common stock of the Company. Stock
repurchases (which will be limited to a maximum of $2,000,000) must be made
on the open market and are subject to certain regulatory restrictions
which, generally, limit the number of shares that can be acquired on a
daily basis and limits the price per share that can be paid. As of November
30, 2000, 203,820 shares of common stock had been reacquired at an average
price of $2.77 per share.
On December 20, 2000, the Company reacquired a 200,000-share block that
was part of 650,000 shares of common stock formerly owned by Armstrong
International, Inc. All of the Armstrong shares were sold in a privately
negotiated transaction between Armstrong, several individual buyers, and
Team at a price of $2.81 per share. Including the Armstrong shares, as of
January 3, 2001, the Company has reacquired a total of 417,420 shares.
-4-
<PAGE> 7
3. Earnings Per Share
In 1998 the Company adopted Statement of Financial Accounting Standard
("SFAS") No. 128, "Earnings per Share," which specifies the computation,
presentation and disclosure requirements for earnings per share ("EPS").
There is no difference, for either of the periods presented, in the amount
of net income (numerator) used in the computation of basic and diluted
earnings per share. With respect to the number of weighted average shares
outstanding (denominator), diluted shares reflects only the pro forma
exercise of options to acquire common stock to the extent that the options'
exercise prices are less than the average market price of common shares
during the period.
4. Inventories
Inventories consist of:
<TABLE>
<CAPTION>
November 30, May 31,
2000 2000
------------- --------------
<S> <C> <C>
Raw materials $ 760,000 $ 947,000
Finished goods and work in progress 7,440,000 6,874,000
------------- --------------
Total $ 8,200,000 $ 7,821,000
============= ==============
</TABLE>
5. Long-Term Debt
Long-term debt consists of:
<TABLE>
<CAPTION>
November 30, May 31,
2000 2000
------------ ------------
<S> <C> <C>
Revolving loan $ 7,740,000 $ 6,620,000
Term and mortgage notes 9,763,000 10,504,000
Capital lease obligations 136,000 215,000
------------ ------------
17,639,000 17,339,000
Less current portion 1,569,000 1,611,000
------------ ------------
Total $ 16,070,000 $ 15,728,000
============ ============
</TABLE>
Effective November 30, 2000, the maturity date of the revolving loan
was extended by one year to September 30, 2002.
6. Other income
On November 30, 2000, the Company sold rental property for $1.575
million in cash (net). The property was carried as a corporate asset
unrelated to either of the Company's operating segments. The transaction
resulted in a gain of $440,000, which is the significant component of
$360,000 of other income for the quarter.
-5-
<PAGE> 8
7. Industry Segment Information
The Company adopted SFAS No. 131, "Disclosure about Segments of an
Enterprise and Related Information," in fiscal 1999. SFAS No. 131 requires
that the Company disclose certain information about its operating segments
where operating segments are defined as "components of an enterprise about
which separate financial information is available that is evaluated
regularly by the chief operating decision maker in deciding how to allocate
resources and in assessing performance." Generally, financial information
is required to be reported on the basis that is used internally for
evaluating segment performance and deciding how to allocate resources to
segments.
Pursuant to SFAS No. 131, the Company has two reportable segments:
industrial services and equipment sales and rentals. The industrial
services segment includes services consisting of leak repair, hot tapping,
emissions control monitoring, field machining, and mechanical inspection.
The equipment sales and rental segment consists of the Climax business.
The Company evaluates performance based on earnings before interest and
income taxes. Inter-segment sales are eliminated in the operating measure
used by the company to evaluate segment performance and has been eliminated
in the following schedule. Interest is not allocated to the segments.
THREE MONTHS ENDED NOVEMBER 30, 2000
<TABLE>
<CAPTION>
Industrial Equipment Corporate
Services Sales & Rentals & Other Total
------------ --------------- ----------- -----------
<S> <C> <C> <C> <C>
Revenues $ 17,429,000 $ 2,116,000 $ 0 $19,545,000
============ =============== =========== ===========
Earnings before interest & taxes 2,876,000 (215,000) (632,000) 2,029,000
Interest 0 0 459,000 459,000
------------ --------------- ----------- -----------
Earnings before income taxes 2,876,000 (215,000) (1,091,000) 1,570,000
============ =============== =========== ===========
Depreciation and amortization 414,000 217,000 115,000 746,000
============ =============== =========== ===========
Capital expenditures 641,000 7,000 0 648,000
============ =============== =========== ===========
Identifiable assets $ 33,453,000 $ 11,762,000 $ 4,649,000 $49,864,000
============ =============== =========== ===========
</TABLE>
THREE MONTHS ENDED NOVEMBER 30, 1999
<TABLE>
<CAPTION>
Industrial Equipment Corporate
Services Sales & Rentals & Other Total
------------ --------------- ----------- -----------
<S> <C> <C> <C> <C>
Revenues $ 13,807,000 $ 2,530,000 $ 0 $16,337,000
============ =============== =========== ===========
Earnings before interest & taxes 2,030,000 70,000 (1,017,000) 1,083,000
Interest 0 0 411,000 411,000
------------ --------------- ----------- -----------
Earnings before income taxes 2,030,000 70,000 (1,428,000) 672,000
============ =============== =========== ===========
Depreciation and amortization 429,000 224,000 87,000 740,000
============ =============== =========== ===========
Capital expenditures 190,000 122,000 21,000 333,000
============ =============== =========== ===========
Identifiable assets $ 31,689,000 $ 11,204,000 $ 5,708,000 $48,601,000
============ =============== =========== ===========
</TABLE>
-6-
<PAGE> 9
SIX MONTHS ENDED NOVEMBER 30, 2000
<TABLE>
<CAPTION>
Industrial Equipment Corporate
Services Sales & Rentals & Other Total
------------ --------------- ------------ ------------
<S> <C> <C> <C> <C>
Revenues $ 32,126,000 $ 4,195,000 $ -- $ 36,321,000
Earnings before interest & taxes 4,677,000 (457,000) (1,408,000) 2,812,000
Interest -- -- 875,000 875,000
------------ --------------- ------------ ------------
Earnings before income taxes 4,677,000 (457,000) (2,283,000) 1,937,000
============ =============== ============ ============
Depreciation and amortization 820,000 406,000 242,000 1,468,000
============ =============== ============ ============
Capital expenditures 924,000 138,000 5,000 1,067,000
============ =============== ============ ============
Identifiable assets $ 33,453,000 $ 11,762,000 $ 4,647,000 $ 49,862,000
============ =============== ============ ============
</TABLE>
SIX MONTHS ENDED NOVEMBER 30, 1999
<TABLE>
<CAPTION>
Industrial Equipment Corporate
Services Sales & Rentals & Other Total
------------ --------------- ------------ ------------
<S> <C> <C> <C> <C>
Revenues $ 26,722,000 $ 5,025,000 $ -- $ 31,747,000
============ =============== ============ ============
Earnings before interest & taxes 3,256,000 156,000 (1,879,000) 1,533,000
Interest -- -- 788,000 788,000
------------ --------------- ------------ ------------
Earnings before income taxes 3,256,000 156,000 (2,667,000) 745,000
============ =============== ============ ============
Depreciation and amortization 852,000 460,000 199,000 1,511,000
============ =============== ============ ============
Capital expenditures 410,000 139,000 26,000 575,000
============ =============== ============ ============
Identifiable assets $ 31,689,000 $ 11,204,000 $ 5,708,000 $ 48,601,000
============ =============== ============ ============
</TABLE>
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<PAGE> 10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
THREE MONTHS ENDED NOVEMBER 30, 2000 COMPARED
TO THREE MONTHS ENDED NOVEMBER 30, 1999
Revenues for the quarter ended November 30, 2000 were $19.5 million
compared to $16.3 million for the corresponding period of the preceding year, an
increase of 20%. Operating margins (shown as "gross margin" in the Condensed
Statements of Operations) declined to 40% in the 2000 quarter compared to 45% in
the 1999 quarter and net income increased to $889 thousand, or $0.11 per share
as compared to $356 thousand ($0.04 per share) in the 1999 quarter.
The strong revenue growth is attributable to the industrial services
business segment, which represents about 89% of consolidated revenues. Services
segment revenues were $17.4 million in the 2000 quarter compared to $13.8
million in the 1999 quarter, an increase of 26%. Management believes that the
Company's service revenues are related, in part, to the operating margins
experienced by its customers--particularly in the refining, pipeline and
petrochemical industries. Generally, as those customers' margins improve, more
funds are expended for the specialized industrial services offered by the
Company.
The Company experienced significantly improved demand for its services in
the 2000 quarter as compared to the 1999 quarter because of the improvement in
the general business conditions of its refining, pipeline and petro-chemical
customers. In addition, the Company's newest new service offerings---mechanical
inspection, field machining and technical bolting---continued to grow. Revenues
from these newest service lines were $4.9 million in the 2000 quarter, an
increase of 82% over the $2.7 million generated from these lines in the same
quarter of 1999.
While management is pleased with the significant growth in the newest
services offerings, the operating margins in those lines are presently lower
than the margins achieved in the more established service lines. That--along
with disappointing results in the Equipment Segment, which are discussed
below--accounts for the overall decline in operating margins to 40.1% in the
2000 quarter. Management is taking steps to improve job margins in the new
service lines and fully expects that the profitability of those service lines
will continue to improve and become comparable to the more established lines.
Notwithstanding the reduced margins in the 2000 quarter, the Services
segment achieved significant operating leverage on the 26% increase in revenues
discussed above. The operating profit of that segment (Earnings before interest
and taxes, or "EBIT") was $2.9 million in the quarter--an increase of 42% over
the $2.0 million EBIT in the 1999 quarter.
The Equipment Sales and Rental Segment (the "Climax" business) continued
its sluggish performance in the second quarter of 2000, with revenues of $2.1
million being $400 thousand less than the $2.5 million generated in the 1999
quarter. This significant sales decline, coupled with higher product costs,
resulted in a decline in operating margins for this segment from approximately
46% in the 1999 quarter to 39% in the 2000 quarter. The combination of falling
revenues and margins caused an operating loss in this segment of $215 thousand
compared to a profit of $70 thousand in the 1999 quarter. Management continues
to believe that the sales decline at Climax is temporary in nature and has begun
to see signs of improvement in sales orders for the third quarter. We expect
that through a combination of improved sales and implemented cost reductions
Climax will return to profitability by the third quarter of the current fiscal
year.
Offsetting the losses at Climax, the Company realized a gain on the sale of
real estate in the second quarter of 2000 that was unrelated to either of its
operating segments. The net gain ($440 thousand) is the significant component of
other income of $360 thousand for the quarter.
-8-
<PAGE> 11
Interest expense in the quarter was $459 thousand in the 2000 quarter
compared to $411 thousand in 1999, an increase of $48 thousand. The increase is
a result of higher borrowing caused by a higher investment in working capital
due to the growth in the services business, as well as a general increase in
interest rates over the past year.
SIX MONTHS ENDED NOVEMBER 30, 2000 COMPARED
TO THE SIX MONTHS ENDED NOVEMBER 30, 1999
Revenues for the six months ended November 30, 2000 were $36.3 million as
compared to $31.8 million for the corresponding period of the preceding year, an
increase of 14%. Operating margins declined to 40% in the 2000 period compared
to 43% in the six month period ended in 1999. Net income for the six months of
2000 was $1.1 million ($.14 per share) compared to $402 thousand ($.05 per
share) in the 1999 period, an increase of 176%.
The analysis of six month comparisons mirrors the discussion of the
quarterly results above. The growth in revenues is attributable to increased
demand in the Services segment, which was offset by declining revenues in the
Climax business. For the six-month period, services segment revenues were $32.1
million, or $5.4 million higher (20%) than the $26.6 million in same period of
1999. For the six months, revenues from the newest service lines (inspection,
field-machining, and technical bolting) were $7.3 million or 41% higher than the
previous year. Revenues from the more established service lines were 15% higher
than the same period of 1999 ($24.8 million compared to $21.5 million).
Overall operating margins for the six month period in 2000 declined from
1999 percentages for the same reasons as described in the quarterly
analysis--new service lines earned lower operating margins than the more mature
services and, for the reasons discussed below, Climax margins were substantially
less than 1999.
Notwithstanding the reduced margins, the Services segment achieved
significant operating leverage on the 20% increase in revenues for the six
months ended November 30, 2000. Operating profit was $4.7 million for the 2000
period compared to $3.3 million in the 1999 period--an increase of 44%, which is
consistent with the leverage achieved in the second quarter.
The Climax business has now experienced two consecutive quarters of
sluggish performance. For the six months ended November 30, 2000, revenues were
$4.2 million, or $800 thousand less than the $5.0 million achieved in the same
period of 1999. The 16% reduction in revenues, coupled with higher product
costs, resulted in a decline in operating margins from approximately 46% in the
1999 period to 39% in the 2000 period. The combination of falling revenues and
margins resulted in an operating loss of $457 thousand in the 2000 period
compared to a profit of $156 thousand in the 1999 period.
As discussed in the three month analysis, Other income was $360,000 for the
six months ended November 30, 2000. Interest expense was $875 thousand in the
six months ended November 30, 2000, which is $87 thousand higher than in the
1999 period due to increased borrowings to support business growth and a general
increase in interest rates.
LIQUIDITY AND CAPITAL RESOURCES
At November 30, 2000, the Company's liquid working capital (cash and
accounts receivable, less current liabilities) totaled $7.5 million, an increase
of approximately $1.3 million since May 31, 2000. The Company utilizes excess
operating funds to automatically reduce the amount outstanding under the
revolving credit facility. At November 30, 2000, the outstanding balance under
the revolving credit facility was $7.7 million and approximately $4 million was
available to borrow under the facility.
In the opinion of management, cash flow from operations, cash balances and
available borrowings will be sufficient for the foreseeable future to finance
anticipated working capital requirements, capital expenditures and debt service
requirements.
-9-
<PAGE> 12
DISCLOSURE REGARDING FORWARD LOOKING STATEMENTS
Any forward-looking information contained herein is being provided in
accordance with the provisions of the Private Securities Litigation Reform Act.
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 any
forward-looking statements contained herein. Such factors include domestic and
international economic activity, interest rates, market conditions for the
Company's customers, regulatory changes and legal proceedings, and the Company's
successful implementation of its internal operating plans. Accordingly, there
can be no assurance that any forward-looking statements contained herein will
occur or those objectives will be achieved.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
The Company holds certain floating-rate obligations. The exposure of these
obligations to increases in short-term interest rates is limited by interest
rate swap agreements entered into by the Company. There were no material
quantitative or qualitative changes during the first six months of fiscal 2001
in the Company's market risk sensitive instruments.
PART II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The 2000 Annual Meeting of Shareholders of the Company was held on
October 5, 2000. At that meeting, Messrs. E. Theodore Laborde and Jack M.
Johnson, Jr. were elected to serve as directors for a three-year term. The votes
with respect to the election of each director were as follows:
<TABLE>
<CAPTION>
NAME FOR WITHHELD
---- --- --------
<S> <C> <C>
E. Theodore Laborde 7,217,138 162,898
Jack M. Johnson, Jr. 7,294,738 85,298
</TABLE>
The four directors continuing in office until the expiration of their
respective terms are Messrs. George W. Harrison, Philip J. Hawk, Louis A.
Waters, and Sidney B. Williams.
The shareholders also approved the appointment of Deloitte & Touche LLP
as independent auditors for the fiscal year ending May 31, 2001 by the following
vote:
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
--- ------- -------
<S> <C> <C>
7,352,257 26,779 1,000
</TABLE>
-10-
<PAGE> 13
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
(10) Amendment No. 4 dated as of November 30, 2000 to Credit Agreement
dated as of August 28, 1998 (filed as Exhibit 2.5 to the
Company's Current Report on Form 8-K filed September 9, 1998).
(b) Reports on Form 8-K
No reports on Form 8-K were filed this quarter.
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: January 11, 2001
/s/ PHILIP J. HAWK
-------------------------------------------
Philip J. Hawk
Chief Executive Officer and Director
/s/ TED W. OWEN
-------------------------------------------
Ted W. Owen, Vice President and
Chief Financial Officer
(Principal Financial Officer and
Principal Accounting Officer)
-11-
<PAGE> 14
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<S> <C>
(10) Amendment No. 4 dated as of November 30, 2000 to Credit Agreement dated
as of August 28, 1998 (filed as Exhibit 2.5 to the Company's Current
Report on Form 8-K filed September 9, 1998).
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