Tag - Team

With the onset of old age, there invariably comes the tweaking of this or the fine-tuning of that, and with industrial infrastructure it is no different. Furmanite Corporation (NYSE: FRM) and Team, Inc. (Nasdaq: TISI) are capitalizing on the growth opportunities in this sector by providing the repair services that keep it operating.

Refineries and power generation plants worldwide are operating at record high utilization rates to keep pace with rising demand. These plants suffer from frequent leaks and breakdowns because of overworked, poorly maintained equipment. In North American alone, the market for on-stream leak repairs consists of more than 10,000 plants and represents a $2.5 billion annual market opportunity. Demand is stable since repair services are considered a “necessary evil” and performed regardless of plant profit margins.  

One company performing the necessary evil is Furmanite, a provider of on-site repair of leaks in valves, pipes and other flow process system components. In addition to leak repair, Furmanite provides hot tapping services, fugitive emissions monitoring, passive fire protection, concrete repair, heat exchanger design, manufacturing design and repair and diagnostic services for valves and motors.

Formerly known as Xanser Corp., the company took the name of its principal subsidiary, Furmanite, in May 2007.

Furmanite’s customers come from the offshore drilling, refinery and power generation, chemical and petrochemical, pipeline, steel-making, automotive, pulp and paper, food and beverage processing, semiconductor and pharmaceutical manufacturing industries. The company operates from 50 locations across five continents.

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.”

Team, Inc. (Nasdaq: TISI) CEO Phil Hawk said the provider of specialty maintenance and construction services benefited customer trends, strong demand and organic growth in its Canadian operations. Hawk made the comments during a midday conference call.

“We believe that our growth continues to be positively impacted by the pervasive customer procurement consolidation trends, where our customers are continuing to shift toward fewer, larger, more professional service providers for their industrial service needs,” Hawk said. “Team benefited from much stronger demand. This may reflect some flattening of demand seasonality in our industry, as customers become more cognizant of skilled labor limitations in all of the industry, construction and maintenance trades.”

He said Team’s ability to attract, train and retain field technicians was also a factor in the Alvin, Tex.-based company’s success. The company also expects at least a 10% operating profit margin this year, he said.

Team raised its fiscal 2008 guidance after Wednesday’s close to revenue of $425 million and earnings in the range of $1.05 to $1.15 per share. The company previously forecast revenue of $400 million.