10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended February 28, 2014

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                     to                    

Commission file number 001-08604

TEAM, INC.

(Exact Name of Registrant as Specified in Its Charter)

Delaware	74-1765729
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)
13131 Dairy Ashford, Suite 600, Sugar Land, Texas	77478
(Address of Principal Executive Offices)	(Zip Code)

(281) 331-6154

(Registrant’s Telephone Number, Including Area Code)

None

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

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  þ    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  þ    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	¨	Accelerated filer	þ
Non-accelerated filer	¨	Smaller reporting company	¨
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).                                                                                                                                                       Yes  ¨     No  þ

The Registrant had 20,444,701 shares of common stock, par value $0.30, outstanding as of April 1, 2014.

INDEX

		Page No.
PART I—FINANCIAL INFORMATION			2
Item 1.	Financial Statements		2
	Condensed Consolidated Balance Sheets as of February 28, 2014 (Unaudited) and May 31, 2013		2
	Unaudited Condensed Consolidated Statements of Operations for the Three and Nine Months Ended February 28, 2014 and 2013		3
	Unaudited Condensed Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended February 28, 2014 and 2013		4
	Unaudited Condensed Consolidated Statements of Cash Flows for the Nine Months Ended February 28, 2014 and 2013		5
	Notes to Unaudited Condensed Consolidated Financial Statements		6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		22
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		26
Item 4.	Controls and Procedures		27
PART II—OTHER INFORMATION			29
Item 1.	Legal Proceedings		29
Item 1A.	Risk Factors		29
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		29
Item 3.	Defaults Upon Senior Securities		29
Item 4.	Mine Safety Disclosures		30
Item 5.	Other Information		30
Item 6.	Exhibits		30
SIGNATURES			31

1

PART I—FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

TEAM, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)

	February 28, 2014			May 31, 2013
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	39,501		$	34,201
Receivables, net of allowance of $5,343 and $5,438		157,988			172,108
Inventory		26,304			26,507
Deferred income taxes		4,474			5,321
Prepaid expenses and other current assets		7,133			8,781
Total current assets		235,400			246,918
Property, plant and equipment, net		85,392			74,939
Assets held for sale		5,207			5,207
Intangible assets, net of accumulated amortization of $11,715 and $9,039		24,390			25,950
Goodwill		114,114			103,466
Other assets, net		974			2,907
Deferred income taxes		2,020			816
Total assets	$	467,497		$	460,203
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	20,419		$	22,411
Other accrued liabilities		39,260			49,165
Income taxes payable		516			1,228
Deferred income taxes		411			—
Total current liabilities		60,606			72,804
Deferred income taxes		15,408			17,166
Long-term debt		83,602			72,946
Other long-term liabilities		5,389			5,097
Total liabilities		165,005			168,013
Commitments and contingencies
Equity:
Preferred stock, 500,000 shares authorized, none issued		—			—
Common stock, par value $0.30 per share, 60,000,000 and 30,000,000 shares authorized; 20,439,476 and 20,587,808 shares issued		6,132			6,176
Additional paid-in capital		104,322			99,278
Retained earnings		190,102			184,485
Accumulated other comprehensive loss		(3,621	)		(1,789	)
Treasury stock at cost, 0 and 89,569 shares		—			(1,344	)
Total Team shareholders’ equity		296,935			286,806
Non-controlling interest		5,557			5,384
Total equity		302,492			292,190
Total liabilities and equity	$	467,497		$	460,203

See accompanying notes to unaudited condensed consolidated financial statements.

2

TEAM, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

	Three Months Ended February 28,						Nine Months Ended February 28,
	2014			2013			2014		2013
Revenues	$	163,236		$	150,975		$	538,040	$	513,115
Operating expenses		121,540			112,084			382,532		362,224
Gross margin		41,696			38,891			155,508		150,891
Selling, general and administrative expenses		40,725			38,278			125,482		115,280
Earnings (loss) from unconsolidated affiliates		29			(4	)		822		862
Gain on revaluation of contingent consideration		—			—			2,138		—
Operating income		1,000			609			32,986		36,473
Interest expense, net		660			743			2,079		2,019
Foreign currency loss		1,868			729			2,398		917
Earnings (loss) before income taxes		(1,528	)		(863	)		28,509		33,537
Less: Provision for income taxes		(557	)		(319	)		10,406		12,409
Net income (loss)		(971	)		(544	)		18,103		21,128
Less: Income (loss) attributable to non-controlling interest		39			(9	)		178		166
Net income (loss) available to Team shareholders	$	(1,010	)	$	(535	)	$	17,925	$	20,962
Net income (loss) per share: Basic	$	(0.05	)	$	(0.03	)	$	0.88	$	1.04
Net income (loss) per share: Diluted	$	(0.05	)	$	(0.03	)	$	0.84	$	0.99

See accompanying notes to unaudited condensed consolidated financial statements.

3

TEAM, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

	Three Months Ended February 28,						Nine Months Ended February 28,
	2014			2013			2014			2013
Net income (loss)	$	(971	)	$	(544	)	$	18,103		$	21,128
Foreign currency translation adjustment		(2,715	)		(1,985	)		(2,925	)		2,305
Foreign currency hedge		(94	)		(143	)		(856	)		(791	)
Tax benefit attributable to other comprehensive income		1,111			594			1,944			218
Total comprehensive income (loss)		(2,669	)		(2,078	)		16,266			22,860
Less: Total comprehensive income (loss) attributable to non-controlling interest		42			(14	)		173			189
Total comprehensive income (loss) available to Team shareholders	$	(2,711	)	$	(2,064	)	$	16,093		$	22,671

See accompanying notes to unaudited condensed consolidated financial statements.

4

TEAM, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

	Nine Months Ended February 28,
	2014			2013
Cash flows from operating activities:
Net income	$	18,103		$	21,128
Adjustments to reconcile net income to net cash provided by operating activities:
Earnings from unconsolidated affiliates		(822	)		(862	)
Depreciation and amortization		15,976			14,454
Amortization of deferred loan costs		167			167
Foreign currency loss		2,398			917
Deferred income taxes		192			5,475
Gain on contingent consideration revaluation		(2,138	)		—
Write-down on fixed assets		—			73
Gain on asset sale		(77	)		—
Non-cash compensation cost		3,205			3,022
(Increase) decrease:
Receivables		13,431			6,675
Inventory		75			(1,675	)
Prepaid expenses and other current assets		1,577			2,596
Increase (decrease):
Accounts payable		(1,598	)		(3,528	)
Other accrued liabilities		(10,505	)		(2,796	)
Income taxes		(469	)		(7,430	)
Net cash provided by operating activities		39,515			38,216
Cash flows from investing activities:
Capital expenditures		(23,758	)		(18,803	)
Business acquisitions, net of cash acquired		(10,175	)		(18,589	)
Proceeds from sale of assets		204			15
Distributions from joint venture		174			1,000
Decrease in other assets, net		3			55
Net cash used in investing activities		(33,552	)		(36,322	)
Cash flows from financing activities:
Net borrowings under revolving credit agreement		9,800			2,400
Corporate tax effect from share-based payment arrangements		1,092			3,002
Issuance of common stock from share-based payment arrangements		4,765			8,242
Payments related to withholding tax for share-based payment arrangements		(1,692	)		(1,517	)
Payments related to purchase of treasury stock		(13,334	)		—
Net cash provided by financing activities		631			12,127
Effect of exchange rate changes on cash		(1,294	)		(76	)
Net increase in cash and cash equivalents		5,300			13,945
Cash and cash equivalents at beginning of period		34,201			22,477
Cash and cash equivalents at end of period	$	39,501		$	36,422

See accompanying notes to unaudited condensed consolidated financial statements.

5

TEAM, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES

Introduction. Unless otherwise indicated, the terms “Team, Inc.,” “Team,” “the Company,” “we,” “our” and “us” are used in this report to refer to Team, Inc., to one or more of our consolidated subsidiaries or to all of them taken as a whole. We are incorporated in the State of Delaware and our company website can be found at www.teamindustrialservices.com. Our corporate headquarters is located at 13131 Dairy Ashford, Suite 600, Sugar Land, Texas, 77478 and our telephone number is (281) 331-6154. Our stock is traded on the New York Stock Exchange (“NYSE”) under the symbol “TISI” and our fiscal year ends on May 31 of each calendar year.

We are a leading provider of specialty industrial services, including inspection and assessment, required in maintaining high temperature and high pressure piping systems and vessels that are utilized extensively in the refining, petrochemical, power, pipeline and other heavy industries. Through fiscal year 2013, we operated in only one segment—the industrial services segment (see Note 14). Within the industrial services segment, we were organized as two divisions. Our TCM division provided the services of inspection and assessment and field heat treating. Our TMS division provided the mechanical services described below.

Effective July 1, 2013, we implemented a reorganization of our business divisions to conduct operations in three segments: Inspection and Heat Treating Services (“IHT”) Group, Mechanical Services (“MS”) Group and Quest Integrity (“Quest”) Group. While our services have been realigned in three business groups, we believe our services broadly fall into three different classifications that have unique customer demand drivers: inspection and assessment services, turnaround services, and on-stream services.

Inspection and assessment services are offered in both the IHT Group and Quest Group. The IHT Group provides basic and advanced non-destructive testing services for the process, pipeline and power sectors, pipeline integrity management services, as well as associated engineering and assessment services. These services can be offered while facilities are running (on-stream), during facility turnarounds or during new construction or expansion activities. The Quest Group provides integrity and reliability management solutions for the process, pipeline and power sectors. These solutions encompass two broadly-defined disciplines: (1) highly specialized in-line inspection services for unpiggable process piping and pipelines using proprietary in-line inspection tools and analytical software; and (2) advanced condition assessment services through a multi-disciplined engineering team. We believe there is a general growth in market demand for inspection and assessment services as improved inspection technologies enable better information about asset reliability to be available to facility owners and operators.

Turnaround services are offered in both the IHT Group and in the MS Group. These services are project-related and demand is a function of the number and scope of scheduled and unscheduled facility turnarounds as well as new industrial facility construction or expansion. Turnaround services include the field machining, technical bolting, field valve repair, heat exchanger repair, and isolation test plugging services that are part of the MS Group and the field heat treating services that are part of the IHT Group.

On-stream services are offered by the MS Group and represent the services offered while plants are operating and under pressure. These services include leak repair, fugitive emissions control and hot tapping. We believe demand for on-stream services is a function of the population of the existing infrastructure of operating industrial facilities.

We offer these services in over 125 locations throughout the world. Our industrial services are available 24 hours a day, 7 days a week, 365 days a year. We market our services to companies in a diverse array of heavy industries which include the petrochemical, refining, power, pipeline, steel, pulp and paper industries, as well as municipalities, shipbuilding, original equipment manufacturers (“OEMs”), distributors, and some of the world’s largest engineering and construction firms. Our services are also provided across a broad geographic reach.

6

Basis for presentation. These interim financial statements are unaudited, but in the opinion of our management, reflect all adjustments, consisting of normal recurring adjustments necessary for a fair presentation of results for such periods. The consolidated condensed balance sheet at May 31, 2013 is derived from the May 31, 2013 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 our annual report on Form 10-K for the fiscal year ended May 31, 2013.

Consolidation. The consolidated financial statements include the accounts of Team, Inc. and our majority-owned subsidiaries where we have control over operating and financial policies. Investments in affiliates in which we have the ability to exert significant influence over operating and financial policies, but where we do not control the operating and financial policies, are accounted for using the equity method. All material intercompany accounts and transactions have been eliminated in consolidation.

Use of estimates. Our accounting policies conform to Generally Accepted Accounting Principles in the U.S. (“GAAP”). Our most significant accounting policies are described below. The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and judgments that affect our reported financial position and results of operations. We review significant estimates and judgments affecting our consolidated financial statements on a recurring basis and record the effect of any necessary adjustments prior to their publication. Estimates and judgments are based on information available at the time such estimates and judgments are made. Adjustments made with respect to the use of these estimates and judgments often relate to information not previously available. Uncertainties with respect to such estimates and judgments are inherent in the preparation of financial statements. Estimates and judgments are used in, among other things, (1) aspects of revenue recognition, (2) valuation of tangible and intangible assets and subsequent assessments for possible impairment, (3) the fair value of the non-controlling interest in subsidiaries that are not wholly-owned, (4) estimating various factors used to accrue liabilities for workers’ compensation, auto, medical and general liability, (5) establishing an allowance for uncollectible accounts receivable, (6) estimating the useful lives of our assets and (7) assessing future tax exposure and the realization of tax assets.

Fair value of financial instruments. Our financial instruments consist primarily of cash, cash equivalents, accounts receivable, accounts payable and debt obligations. The carrying amount of cash, cash equivalents, trade accounts receivable and trade accounts payable are representative of their respective fair values due to the short-term maturity of these instruments. The fair value of our banking facility is representative of the carrying value based upon the variable terms and management’s opinion that the current rates available to us with the same maturity and security structure are equivalent to that of the banking facility.

Cash and cash equivalents. Cash and cash equivalents consist of all demand deposits and funds invested in highly liquid short-term investments with original maturities of three months or less.

Inventory. Inventory is stated at the lower of cost (first-in, first-out method) or market. Inventory includes material, labor and certain fixed overhead costs.

Property, plant and equipment. Property, plant and equipment are stated at cost less accumulated depreciation and amortization. Leasehold improvements are amortized over the shorter of their respective useful life or the lease term. Depreciation and amortization of assets are computed by the straight-line method over the following estimated useful lives of the assets:

Classification	Useful Life
Buildings		20-40 years
Leasehold improvements		2-15 years
Machinery and equipment		2-12 years
Furniture and fixtures		2-10 years
Computers and computer software		2-5 years
Automobiles		2-5 years

7

Goodwill, intangible assets, and non-controlling interest. Goodwill represents the excess of costs over fair value of assets of businesses acquired. Goodwill and intangible assets acquired in a purchase business combination and determined to have an indefinite useful life are not amortized, but are instead tested for impairment at least annually in accordance with the provisions of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 350, Intangibles—Goodwill and Other. Intangible assets with estimated useful lives are amortized over their respective estimated useful lives to their estimated residual values and reviewed for impairment in accordance with ASC 350.

Effective July 1, 2013, we implemented a reorganization of our business divisions and now conduct operations in three segments: IHT Group, MS Group and Quest Group. Each operating segment has goodwill relating to past acquisitions and we now assess goodwill for impairment at the operating segment level. Due to the changes in the underlying assumptions surrounding our goodwill testing, during the first quarter of fiscal year 2014, we performed a quantitative analysis of goodwill to test for impairment. The test for impairment is performed at the reporting unit level which is deemed to be at the operating segment level. The test was a two-step process that involved comparing the estimated fair value of each reporting unit to the reporting unit’s carrying value, including goodwill. If the fair value of a reporting unit exceeded its carrying amount, the goodwill of the reporting unit was not considered impaired; therefore, the second step of the impairment test would not be deemed necessary. If the carrying amount of the reporting unit exceeded its fair value, we would then perform a second step to the goodwill impairment test to measure the amount of goodwill impairment loss to be recorded.

The fair value of the reporting units at July 1, 2013 were determined using a method based on discounted cash flow models with estimated cash flows based on internal forecasts of revenue and expenses over a four year period plus a terminal value period (the income approach). The income approach estimated fair value by discounting each reporting unit’s estimated future cash flows using a discount rate that approximated our weighted-average cost of capital. The fair value derived from the income approach, in the aggregate, approximated our market capitalization. At July 1, 2013, our market capitalization exceeded the carrying value of our consolidated net assets by approximately $500 million or 170%, and the fair value of each operating segment significantly exceeded their respective carrying amounts as of that date.

There was $114.1 million and $103.5 million of goodwill at February 28, 2014 and May 31, 2013, respectively. A summary of goodwill is as follows (in thousands):

	Nine Months Ended February 28, 2014
	MS		IHT			Quest		Total
Balance at May 31, 2013	$	19,130	$	53,800		$	30,536	$	103,466
Acquisitions		—		11,336			—		11,336
Foreign currency adjustments		611		(1,448	)		149		(688	)
Balance at February 28, 2014	$	19,741	$	63,688		$	30,685	$	114,114

In November 2010, we purchased 95% of Quest Integrity Group, LLC, a leading provider of proprietary in-line inspection and advanced engineering and assessment services. We expect to purchase the remaining 5% interest (the “Non-Controlling Interests”) at the end of fiscal 2015 based upon a valuation methodology as specified in the purchase agreement.

Information regarding the change in carrying value of the non-controlling interest is set forth below (in thousands):

Fair value of non-controlling interest at November 3, 2010	$	4,917
Income attributable to non-controlling interest		652
Other comprehensive income attributable to non-controlling interest		(12	)
Carrying value of non-controlling interest at February 28, 2014	$	5,557

8

Income taxes. We follow the guidance of the ASC 740, Income Taxes, which requires that we use the asset and liability method of accounting for deferred income taxes and provide deferred income taxes for all significant temporary differences. As part of the process of preparing our consolidated financial statements, we are required to estimate our income taxes in each of the jurisdictions in which we operate. This process involves estimating our actual current tax payable and related tax expense together with assessing temporary differences resulting from differing treatment of certain items, such as depreciation, for tax and accounting purposes. These differences can result in deferred tax assets and liabilities, which are included within our consolidated balance sheets. We must then assess the likelihood that our deferred tax assets will be recovered from future taxable income and, to the extent we believe that it is more likely than not (a likelihood of more than 50%) that some portion or all of the deferred tax assets will not be realized, we must establish a valuation allowance. We consider all available evidence to determine whether, based on the weight of the evidence, a valuation allowance is needed. Evidence used includes information about our current financial position and our results of operations for the current and preceding years, as well as all currently available information about future years, including our anticipated future performance, future reversals of existing taxable temporary differences, and tax planning strategies.

Workers’ compensation, auto, medical and general liability accruals. In accordance with ASC 450, Contingencies, we record a loss contingency when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. We review our loss contingencies on an ongoing basis to ensure that we have appropriate reserves recorded on our balance sheet. These reserves are based on historical experience with claims incurred but not received, estimates and judgments made by management, applicable insurance coverage for litigation matters, and are adjusted as circumstances warrant. For workers’ compensation, our self-insured retention is $1.0 million and our automobile liability self-insured retention is currently $500,000 per occurrence. For general liability claims we have an effective self-insured retention of $3.0 million per occurrence. For medical claims, our self-insured retention is $175,000 per individual claimant determined on an annual basis. For environmental liability claims, our self-insured retention is $500,000 per occurrence. We maintain insurance for claims that exceed such self-retention limits. The insurance is subject to terms, conditions, limitations and exclusions that may not fully compensate us for all losses. Our estimates and judgments could change based on new information, changes in laws or regulations, changes in management’s plans or intentions, or the outcome of legal proceedings, settlements or other factors. If different estimates and judgments were applied with respect to these matters, it is likely that reserves would be recorded for different amounts.

Revenue recognition. We determine our revenue recognition guidelines for our operations based on guidance provided in applicable accounting standards and positions adopted by the FASB and the Securities and Exchange Commission (the “SEC”). Most of our projects are short-term in nature and we predominantly derive revenues by providing a variety of industrial services on a time and material basis. For all of these services our revenues are recognized when services are rendered or when product is shipped to the job site and risk of ownership passes to the customer. However, due to various contractual terms with our customers, at the end of any reporting period, there may be earned but unbilled revenue that is accrued to properly match revenues with related costs. At February 28, 2014 and May 31, 2013, the amount of earned but unbilled revenue included in accounts receivable was $28.2 million and $25.5 million, respectively.

Allowance for doubtful accounts. In the ordinary course of business, a percentage of our accounts receivable are not collected due to billing disputes, customer bankruptcies, dissatisfaction with the services we performed and other various reasons. We establish an allowance to account for those accounts receivable that will eventually be deemed uncollectible. The allowance for doubtful accounts is based on a combination of our historical experience and management’s review of long outstanding accounts receivable.

Concentration of credit risk. No single customer accounts for more than 10% of consolidated revenues.

Earnings per share. Basic earnings per share is computed by dividing net income available to Team shareholders by the weighted-average number of shares of common stock outstanding during the year. Diluted earnings per share is computed by dividing net income available to Team shareholders, less income or loss for

9

the period attributable to the non-controlling interest, by the sum of (1) the weighted-average number of shares of common stock, outstanding during the period, (2) the dilutive effect of the assumed exercise of share-based compensation using the treasury stock method and (3) the dilutive effect of the assumed conversion of our non-controlling interest to our common stock (see Note 2).

Amounts used in basic and diluted earnings per share, for the three and nine months ended February 28, 2014 and 2013, are as follows (in thousands):

	Three Months Ended February 28,				Nine Months Ended February 28,
	2014		2013		2014		2013
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Weighted-average number of basic shares outstanding		20,384		20,387		20,432		20,104
Stock options, stock units and performance awards		614		753		643		770
Assumed conversion of non-controlling interest		195		171		209		204
Total shares and dilutive securities		21,193		21,311		21,284		21,078

There were no stock options outstanding during the three months ended February 28, 2014 and 2013 excluded from the computation of diluted earnings per share because the options’ exercise prices were greater than the average market price of common shares during the periods. There were zero and 1,000 stock options to purchase shares of common stock outstanding during the nine months ended February 28, 2014 and 2013, respectively, excluded from the computation of diluted earnings per share because the options’ exercise prices were greater than the average market price of common shares during the periods.

Foreign currency. For subsidiaries whose functional currency is not the U.S. Dollar, assets and liabilities are translated at period ending rates of exchange and revenues and expenses are translated at period average exchange rates. Translation adjustments for the asset and liability accounts are included as a separate component of accumulated other comprehensive income in shareholders’ equity. Foreign currency transaction gains and losses are included in our statement of income. Effective December 1, 2009, we began to account for Venezuela as a highly-inflationary economy and the effect of all subsequent currency fluctuations between the Bolivar and the U.S. Dollar are recorded in our statement of income (see Note 16).

Newly Adopted Accounting Principles

ASU 2011-04. In May 2011, an update regarding fair value measurement was issued to conform the definition of fair value and common requirements for measurement of and disclosure about fair value under U.S. GAAP and International Financial Reporting Standards. The standard also clarifies the application of existing fair value measurement requirements and expands the disclosure requirements for fair value measurements that are estimated using significant unobservable Level 3 inputs. The standard update is effective for interim and annual periods beginning after December 15, 2011. The adoption of this standard did not have a material impact on our results of operations, financial position or cash flows.

ASU 2011-05. In June 2011, the FASB issued an update to existing guidance on the presentation of comprehensive income. This update requires the presentation of the components of net income and other comprehensive income either in a single continuous statement or in two separate but consecutive statements. In addition, companies are also required to present reclassification adjustments for items that are reclassified from other comprehensive income to net income on the face of the financial statements. In December 2011, the FASB issued an accounting update to defer the effective date for presentation of reclassification of items out of accumulated other comprehensive income to net income. These updates are effective for fiscal years and interim periods beginning after December 15, 2011 with early adoption permitted. This update was adopted by Team on June 1, 2012. The adoption of this standard did not have a material effect on our results of operations, financial position or cash flows.

10

ASU 2011-11. In December 2011, an update was issued related to new disclosures on offsetting assets and liabilities of financial and derivative instruments. The amendments require the disclosure of gross asset and liability amounts, amounts offset on the balance sheet and amounts subject to the offsetting requirements, but not offset on the balance sheet. This standard does not amend the existing guidance on when it is appropriate to offset. The standard update is effective for annual periods beginning after January 1, 2013. The adoption of this standard did not have a material impact on our results of operations, financial position or cash flows.

ASU 2013-02. In February 2013, an update regarding other comprehensive income was issued to require entities to provide information about the amounts reclassified out of accumulated other comprehensive income by component. In addition, it requires entities to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of other comprehensive income by the respective line items of net income but only if the amount reclassified is required under GAAP to be reclassified to net income in its entirety in the same reporting period. The update is effective for fiscal years beginning after December 15, 2012. This update was adopted by Team on June 1, 2013. The adoption of this update did not have a material impact on our results of operations, financial position or cash flows.

2. ACQUISITIONS

In July 2013, we purchased a leading provider of industrial rope access services, for a total consideration of approximately $13.8 million including $12.6 million allocated to goodwill and intangible assets. In September 2012, we purchased TCI Services, Inc. (“TCI”), a leading provider of inspection and repair services of above ground storage tanks. The TCI acquisition included total consideration of approximately $21.2 million, including $16.4 million allocated to goodwill and intangible assets. The purchase price included contingent consideration which we revalued during the second quarter of fiscal year 2014, resulting in the recognition of a non-cash gain of $2.1 million.

In the fiscal year ended May 31, 2013, we also purchased a specialty remote digital video inspection company in New Zealand for approximately $3.0 million in cash.

3. RECEIVABLES

A summary of accounts receivable as of February 28, 2014 and May 31, 2013 is as follows (in thousands):

	February 28, 2014			May 31, 2013
	(unaudited)
Trade accounts receivable	$	135,145		$	152,030
Unbilled revenues		28,186			25,516
Allowance for doubtful accounts		(5,343	)		(5,438	)
Total	$	157,988		$	172,108

4. INVENTORY

A summary of inventory as of February 28, 2014 and May 31, 2013 is as follows (in thousands):

	February 28, 2014		May 31, 2013
	(unaudited)
Raw materials	$	3,056	$	3,460
Work in progress		893		845
Finished goods		22,355		22,202
Total	$	26,304	$	26,507

11

5. PROPERTY, PLANT AND EQUIPMENT

A summary of property, plant and equipment as of February 28, 2014 and May 31, 2013 is as follows (in thousands):

	February 28, 2014			May 31, 2013
	(unaudited)
Land	$	3,067		$	3,108
Buildings and leasehold improvements		19,345			18,445
Machinery and equipment		148,120			137,439
Furniture and fixtures		4,809			4,469
Capitalized ERP system development costs		2,677			—
Computers and computer software		9,581			8,871
Automobiles		3,660			3,842
Construction in progress		11,196			3,816
Total		202,455			179,990
Accumulated depreciation and amortization		(117,063	)		(105,051	)
Property, plant, and equipment, net	$	85,392		$	74,939

In the second quarter of 2013, we initiated the design and implementation of a new ERP system, which is expected to be fully installed during fiscal year 2016. Total future capital costs associated with the implementation are expected to be in the range of $10 to $12 million over the next two years.

Included in construction in progress are costs of approximately $7.4 million associated with the re-development of Team’s former headquarters in Alvin, Texas as an equipment, training and technical center for operations support. The Alvin project is expected to be completed in the spring of 2014 at a total cost of approximately $9.0 million.

6. ASSETS HELD FOR SALE

Assets held for sale consists of $5.2 million related to approximately 50 acres of undeveloped land in Pearland, Texas.

7. INTANGIBLE ASSETS

A summary of intangible assets as of February 28, 2014 and May 31, 2013 is as follows (in thousands):

	February 28, 2014							May 31, 2013
	(unaudited)
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Customer relationships	$	22,355	$	(6,059	)	$	16,296	$	21,418	$	(4,168	)	$	17,250
Non-compete agreements		3,630		(3,352	)		278		3,701		(3,232	)		469
Trade names		4,325		(641	)		3,684		4,075		(424	)		3,651
Technology		5,112		(1,565	)		3,547		5,112		(1,166	)		3,946
Licenses		683		(98	)		585		683		(49	)		634
Total	$	36,105	$	(11,715	)	$	24,390	$	34,989	$	(9,039	)	$	25,950

Amortization expense for the three months ended February 28, 2014 and 2013 was $0.9 million and $0.8 million, respectively. Amortization expense for the nine months ended February 28, 2014 and 2013 was $2.8 million and $2.5 million, respectively.

12

8. OTHER ACCRUED LIABILITIES

A summary of other accrued liabilities as of February 28, 2014 and May 31, 2013 is as follows (in thousands):

	February 28, 2014		May 31, 2013
	(unaudited)
Payroll and other compensation expenses	$	22,806	$	32,093
Insurance accruals		5,330		5,385
Property, sales and other non-income related taxes		1,650		2,385
Other		9,474		9,302
Total	$	39,260	$	49,165

9. LONG-TERM DEBT, DERIVATIVES AND LETTERS OF CREDIT

Our banking credit facility (“Credit Facility”) with our banking syndicate has borrowing capacity of up to $150 million in multiple currencies, is secured by virtually all of our domestic assets and a majority of the stock of our foreign subsidiaries and matures in July 2016. In connection with a prior renewal of the Credit Facility, we are amortizing $0.8 million of associated debt issuance costs over the life of the Credit Facility. The Credit Facility bears interest based on a variable Eurodollar rate option (LIBOR plus 1.75% margin at February 28, 2014) and has commitment fees of 0.30% on unused borrowing capacity.

In order to secure our casualty insurance programs we are required to post letters of credit generally issued by a bank as collateral. A letter of credit commits the issuer to remit specified amounts to the holder, if the holder demonstrates that we failed to meet our obligations under the letter of credit. If this were to occur, we would be obligated to reimburse the issuer for any payments the issuer was required to remit to the holder of the letter of credit. We were contingently liable for outstanding stand-by letters of credit totaling $13.6 million at February 28, 2014 and $13.1 million at May 31, 2013. Outstanding letters of credit reduce amounts available under our Credit Facility and are considered as having been funded for purposes of calculating our financial covenants under the Credit Facility.

ASC 815, Derivatives and Hedging, established accounting and reporting standards requiring that derivative instruments be recorded at fair value and included in the balance sheet as assets or liabilities. The accounting for changes in the fair value of a derivative instrument depends on the intended use of the derivative and the resulting designation, which is established at the inception date of a derivative. Special accounting for derivatives qualifying as fair value hedges allows derivatives’ gains and losses to offset related results on the hedged item in the statement of income. For derivative instruments designated as cash flow hedges, changes in fair value, to the extent the hedge is effective, are recognized in other comprehensive income until the hedged item is recognized in earnings. Hedge effectiveness is measured at least quarterly based on the relative cumulative changes in fair value between the derivative contract and the hedged item over time. Credit risks related to derivatives include the possibility that the counter-party will not fulfill the terms of the contract. We considered counter-party credit risk to our derivative contracts when valuing our derivative instruments.

Our borrowing of €12.3 million under the Credit Facility serves as an economic hedge of our net investment in our European operations as fluctuations in the fair value of the borrowing attributable to the U.S. Dollar/Euro spot rate will offset translation gains or losses attributable to our investment in our European operations. At February 28, 2014 the €12.3 million borrowing had a U.S. Dollar value of $16.9 million.

For derivative instruments that are designated and qualify as cash flow hedges, the effective portion of the gain or loss on the derivative is reported as a component of other comprehensive income and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. Gains and losses on the derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current earnings. Any ineffectiveness related to our hedges was not material for any of the periods presented.

13

The amounts recognized in other comprehensive income, and reclassified into income, for the three and nine months ended February 28, 2014 and 2013, are as follows (in thousands):

	Gain (Loss) Recognized in Other Comprehensive Income						Gain (Loss) Reclassified from Other Comprehensive Income to Earnings				Gain (Loss) Recognized in Other Comprehensive Income						Gain (Loss) Reclassified from Other Comprehensive Income to Earnings
	Three Months Ended February 28,						Three Months Ended February 28,				Nine Months Ended February 28,						Nine Months Ended February 28,
	(unaudited)						(unaudited)				(unaudited)						(unaudited)
	2014			2013			2014		2013		2014			2013			2014		2013
Euro denominated long-term debt	$	(94	)	$	(143	)	$	—	$	—	$	(856	)	$	(791	)	$	—	$	—

The following table presents the fair value totals and balance sheet classification for derivatives designated as hedges under ASC 815 (in thousands):

February 28, 2014

May 31, 2013

(unaudited)

Classification

Balance Sheet Location

Fair Value

Classification

Balance Sheet Location

Fair Value

Euro denominated long-term debt

Liability

Long-term debt

$

1,148

Liability

Long-term debt

$

2,004

10. FAIR VALUE MEASUREMENTS

Effective June 1, 2008, we adopted the provisions of ASC 820, Fair Value Measurements and Disclosures (“ASC 820”), which among other things, requires enhanced disclosures about assets and liabilities carried at fair value.

As defined in ASC 820, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. We utilize market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. We primarily apply the market approach for recurring fair value measurements and endeavor to utilize the best information available. Accordingly, we utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. The use of unobservable inputs is intended to allow for fair value determinations in situations in which there is little, if any, market activity for the asset or liability at the measurement date. We are able to classify fair value balances based on the observability of those inputs. ASC 820 establishes a fair value hierarchy such that “Level 1” measurements include unadjusted quoted market prices for identical assets or liabilities in an active market, “Level 2” measurements include quoted market prices for identical assets or liabilities in an active market which have been adjusted for items such as effects of restrictions for transferability and those that are not quoted but are observable through corroboration with observable market data, including quoted market prices for similar assets, and “Level 3” measurements include those that are unobservable and of a highly subjective measure.

14

The following table sets forth, by level within the fair value hierarchy, our financial assets and liabilities that are accounted for at fair value on a recurring basis as of February 28, 2014. As required by ASC 820, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement (in thousands):

	February 28, 2014
	(unaudited)
	Quoted Prices in Active Markets for Identical Items (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Liabilities:
Contingent consideration	$	—	$	—	$	2,982	$	2,982
Euro denominated long-term debt		—		1,148		—		1,148
Total liabilities	$	—	$	1,148	$	2,982	$	4,130

	May 31, 2013
	Quoted Prices in Active Markets for Identical Items (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Liabilities:
Contingent consideration	$	—	$	—	$	2,047	$	2,047
Euro denominated long-term debt		—		2,004		—		2,004
Total liabilities	$	—	$	2,004	$	2,047	$	4,051

The fair value of contingent consideration liabilities that was classified as Level 3 in the table above was estimated using a discounted cash flow technique with significant inputs that are not observable in the market and thus represents a Level 3 fair value measurement as defined in ASC 820. The significant inputs in the Level 3 measurement not supported by market activity include a combination of actual cash flows and probability-weighted assessments of expected future cash flows related to the acquired businesses, appropriately discounted considering the uncertainties associated with the obligation, and as calculated in accordance with the terms of the acquisition agreement.

11. SHARE-BASED COMPENSATION

We have adopted stock incentive plans and other arrangements pursuant to which our Board of Directors (the “Board”) may grant stock options, restricted stock, stock units, stock appreciation rights, common stock or performance awards to officers, directors and key employees. At February 28, 2014, there were approximately 1.2 million stock options, restricted stock units and performance awards outstanding to officers, directors and key employees. The exercise price, terms and other conditions applicable to each form of share-based compensation under our plans are generally determined by the Compensation Committee of our Board at the time of grant and may vary.

Our share-based payments consist primarily of stock options, stock units, common stock and performance awards. The governance of our share-based compensation does not directly limit the number of future awards. However, the total number of shares ultimately issued may not exceed the total number of shares cumulatively authorized, which is 7,120,000 at February 28, 2014. Shares issued in connection with our share-based compensation are issued out of authorized but unissued common stock. Compensation expense related to share-based compensation totaled $3.2 million and $3.0 million for the nine months ended February 28, 2014 and 2013, respectively. At February 28, 2014, $9.7 million of unrecognized compensation expense related to share-based compensation is expected to be recognized over a remaining weighted-average period of 2.9 years. The tax benefit derived when share-based awards result in a tax deduction for the company was $1.1 million and $3.0 million for the nine months ended February 28, 2014 and 2013, respectively.

15

We determine the fair value of each stock option at the grant date using a Black-Scholes model and recognize the resulting expense of our stock option awards over the period during which an employee is required to provide services in exchange for the awards, usually the vesting period. There was no compensation expense related to stock options for the nine months ended February 28, 2014 and 2013. Our options typically vest in equal annual installments over a four year service period. Expense related to an option grant is recognized on a straight line basis over the specified vesting period for those options. Stock options generally have a ten year term. Transactions involving our stock options during the nine months ended February 28, 2014 and 2013 are summarized below:

	Nine Months Ended February 28, 2014					Nine Months Ended February 28, 2013
	(unaudited)					(unaudited)
	No. of Options			Weighted Average Exercise Price		No. of Options			Weighted Average Exercise Price
	(in thousands)					(in thousands)
Shares under option, beginning of period		1,052		$	20.24		1,562		$	18.95
Changes during the period:
Granted		—		$	—		—		$	—
Exercised		(195	)	$	24.48		(508	)	$	16.23
Cancelled		—		$	—		—		$	—
Expired		—		$	—		—		$	—
Shares under option, end of period		857		$	19.28		1,054		$	20.25
Exercisable at end of period		857		$	19.28		1,054		$	20.25

Options exercisable at February 28, 2014 had a weighted-average remaining contractual life of 2.6 years. For total options outstanding at February 28, 2014, the range of exercise prices and remaining contractual lives are as follows:

Range of Prices	No. of Options		Weighted Average Exercise Price		Weighted Average Remaining Life
	(in thousands)				(in years)
$6.42 to $9.62		105	$	9.00		1.2
$9.63 to $12.82		152	$	11.11		1.9
$12.83 to $16.03		264	$	14.51		2.3
$16.04 to $32.05		336	$	29.94		3.6
		857	$	19.28		2.6

16

Performance awards are settled with common stock upon vesting unless it is not legally feasible to issue shares, in which case the value of the award is settled in cash. We determine the fair value of each performance award based on the market price on the date of grant. Performance awards granted to our Chairman of our Board vest over the longer of four years or the achievement of performance goals based upon our future results of operations. Compensation expense related to performance awards totaled $0.4 million for the nine months ended February 28, 2014 and 2013. Transactions involving our performance awards during the nine months ended February 28, 2014 and 2013 are summarized below:

	Nine Months Ended February 28, 2014					Nine Months Ended February 28, 2013
	(unaudited)					(unaudited)
	No. of Performance Awards			Weighted Average Fair Value		No. of Performance Awards			Weighted Average Fair Value
	(in thousands)					(in thousands)
Performance awards, beginning of period		57		$	25.45		65		$	21.86
Changes during the period:
Granted		17		$	36.40		19		$	32.89
Vested and settled		(24	)	$	22.65		(27	)	$	22.04
Cancelled		—		$	—		—		$	—
Performance awards, end of period		50		$	30.63		57		$	25.45

Stock units are settled with common stock upon vesting unless it is not legally feasible to issue shares, in which case the value of the award is settled in cash. We determine the fair value of each stock unit based on the market price on the date of grant. Stock units generally vest in annual installments over four years and the expense associated with the units is recognized over the same vesting period. We also grant common stock to our directors which typically vest immediately. Compensation expense related to stock units and director stock grants totaled $2.8 million for the nine months ended February 28, 2014 and $2.6 for the nine months ended February 28, 2013. Transactions involving our stock units and director stock grants during the nine months ended February 28, 2014 and 2013 are summarized below:

	Nine Months Ended February 28, 2014					Nine Months Ended February 28, 2013
	(unaudited)					(unaudited)
	No. of Stock Units			Weighted Average Fair Value		No. of Stock Units			Weighted Average Fair Value
	(in thousands)					(in thousands)
Stock and stock units, beginning of period		329		$	26.07		342		$	21.73
Changes during the period:
Granted		136		$	36.71		141		$	32.81
Vested and settled		(138	)	$	24.34		(142	)	$	22.54
Cancelled		(16	)	$	27.94		(8	)	$	22.40
Stock and stock units, end of period		311		$	31.39		333		$	26.07

17

12. OTHER COMPREHENSIVE INCOME

A summary of changes in other comprehensive income included within shareholders’ equity is as follows (in thousands):

	Nine Months Ended February 28, 2014												Nine Months Ended February 28, 2013
	(unaudited)												(unaudited)
	Foreign Currency Translation Adjustments			Foreign Currency Hedge			Tax Provision			Total			Foreign Currency Translation Adjustments			Foreign Currency Hedge			Tax Provision			Total
Balance, beginning of period	$	(3,532	)	$	2,004		$	(261	)	$	(1,789	)	$	(4,593	)	$	2,678		$	(672	)	$	(2,587	)
Other comprehensive income before tax		(2,925	)		(856	)		1,944			(1,837	)		2,305			(791	)		218			1,732
Non-controlling interest		5			—			—			5			(23	)		—			—			(23	)
Balance, end of period	$	(6,452	)	$	1,148		$	1,683		$	(3,621	)	$	(2,311	)	$	1,887		$	(454	)	$	(878	)

The following table represents the related tax effects allocated to each component of other comprehensive income (in thousands):

	Nine Months Ended February 28, 2014								Nine Months Ended February 28, 2013
	(unaudited)								(unaudited)
	Gross Amount			Tax Effect		Net Amount			Gross Amount			Tax Effect			Net Amount
Foreign currency translation adjustments	$	(2,925	)	$	1,617	$	(1,308	)	$	2,305		$	(91	)	$	2,214
Foreign currency hedge		(856	)		327		(529	)		(791	)		309			(482	)
Total	$	(3,781	)	$	1,944	$	(1,837	)	$	1,514		$	218		$	1,732

13. COMMITMENTS AND CONTINGENCIES

Con Ed Matter—We have, from time to time, provided temporary leak repair services for the steam operations of Consolidated Edison Company of New York (“Con Ed”) located in New York City. In July 2007, a Con Ed steam main located in midtown Manhattan ruptured causing one death and other injuries and property damage. As of February 28, 2014, ninety-five lawsuits have been filed against Con Ed, the City of New York and Team in the Supreme Courts of New York located in Kings, New York and Bronx County, alleging that our temporary leak repair services may have contributed to the cause of the rupture. The lawsuits seek generally unspecified compensatory damages for personal injury, property damage and business interruption. Additionally, on March 31, 2008, we received a letter from Con Ed alleging that our contract with Con Ed requires us to indemnify and defend Con Ed for additional claims filed against Con Ed as a result of the rupture. Con Ed filed an action to join Team and the City of New York as defendants in all lawsuits filed against Con Ed that did not include Team and the City of New York as direct defendants. We are vigorously defending the lawsuits and Con Ed’s claim for indemnification. We are unable to estimate the amount of liability to us, if any, associated with these lawsuits and the claim for indemnification. We maintain insurance coverage, subject to a deductible limit of $250,000, which we believe should cover these claims. We have not accrued any liability in excess of the deductible limit for the lawsuits. We do not believe the ultimate outcome of these matters will have a material adverse effect on our financial position, results of operations or cash flows.

We are involved in various other lawsuits and are subject to various claims and proceedings encountered in the normal conduct of business. In our opinion, any uninsured losses that might arise from these lawsuits and proceedings will not have a materially adverse effect on our consolidated financial statements.

18

14. ENTITY WIDE DISCLOSURES

ASC 280, Segment Reporting, requires we disclose certain information about our 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.” Through July 1, 2013, we operated in only one segment—the industrial services segment. Within the industrial services segment, we were organized as two divisions. Our TCM division provided the services of inspection and assessment and field heat treating. Our TMS division provided the services of leak repair, fugitive emissions control, hot tapping, field machining, technical bolting and field valve repair.

Effective July 1, 2013, we implemented a reorganization of our business divisions to conduct operations in three segments: IHT Group, MS Group and Quest Group. All three operating segments operate under a business segment manager who reports directly to Team’s Chief Executive Officer who operates as the chief operating decision maker. Segment data for our three operating segments are as follows (in thousands):

	Three Months Ended						Nine Months Ended
	February 28, 2014			February 28, 2013			February 28, 2014			February 28, 2013
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
Revenues:
IHT	$	85,149		$	81,227		$	290,409		$	272,372
MS		63,440			59,513			200,196			201,011
Quest		14,647			10,235			47,435			39,732
Total	$	163,236		$	150,975		$	538,040		$	513,115
	Three Months Ended						Nine Months Ended
	February 28, 2014			February 28, 2013			February 28, 2014			February 28, 2013
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
Operating income:
IHT	$	3,783		$	4,439		$	31,666		$	30,411
MS		2,939			3,346			17,120			21,049
Quest		1,170			(62	)		5,986			5,944
Corporate and shared support services		(6,892	)		(7,114	)		(21,786	)		(20,931	)
Total	$	1,000		$	609		$	32,986		$	36,473
	Three Months Ended						Nine Months Ended
	February 28, 2014			February 28, 2013			February 28, 2014			February 28, 2013
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
Capital expenditures:
IHT	$	2,187		$	1,398		$	5,602		$	6,253
MS		1,503			1,654			4,694			6,266
Quest		582			2,439			3,257			3,840
Corporate and shared support services		5,867			658			10,205			2,444
Total	$	10,139		$	6,149		$	23,758		$	18,803

19

	Three Months Ended				Nine Months Ended
	February 28, 2014		February 28, 2013		February 28, 2014		February 28, 2013
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Depreciation and amortization:
IHT	$	1,936	$	1,866	$	5,947	$	5,704
MS		1,801		1,771		5,391		5,165
Quest		1,343		1,038		4,033		3,193
Corporate and shared support services		205		125		605		392
Total	$	5,285	$	4,800	$	15,976	$	14,454

Separate measures of Team’s assets by operating segment are not produced or utilized by management to evaluate segment performance.

Revenues and total assets in the United States and other countries are as follows (in thousands):

	Three Months Ended				Nine Months Ended
	February 28, 2014		February 28, 2013		February 28, 2014		February 28, 2013
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Revenues:
United States	$	120,916	$	116,155	$	382,322	$	366,397
Canada		22,267		19,946		93,621		98,647
Europe		10,448		8,220		31,079		23,586
Other foreign countries		9,605		6,654		31,018		24,485
Total	$	163,236	$	150,975	$	538,040	$	513,115

	February 28, 2014		May 31, 2013
	(unaudited)
Total assets:
United States	$	339,751	$	334,579
Canada		63,124		68,164
Europe		39,912		35,734
Other foreign countries		24,710		21,726
Total	$	467,497	$	460,203

15. UNCONSOLIDATED SUBSIDIARIES

Our earnings from unconsolidated affiliates consisted entirely of our joint venture (50% ownership) to perform non-destructive testing and inspection services in Alaska. At December 31, 2013 the joint venture was dissolved and the net assets were liquidated resulting in no material gain or loss. However, the operations of the joint venture have been continued by our IHT division. Our investment in the net assets of the joint venture, accounted for using the equity method of accounting, was zero at February 28, 2014 and $1.8 million at May 31, 2013. Revenues from the joint venture not reflected in our consolidated revenues were $8.5 million and $11.0 million for the nine months ended February 28, 2014 and 2013, respectively.

16. VENEZUELA’S HIGHLY INFLATIONARY ECONOMY

We operate a small service location in Punta Fijo, Venezuela, whose annual revenues have historically been less than one percent of our consolidated revenues for all periods presented. Because of the uncertain political environment in Venezuela, starting in the third quarter of fiscal year 2010, we began to account for Venezuelan operations pursuant to accounting guidance for hyperinflationary economies. Following the designation of the Venezuelan economy as hyperinflationary, we ceased taking the effects of currency fluctuations to accumulated

20

other comprehensive income and began reflecting all effects as a component of other income in our statement of operations. Prior to February 2013, we were using the Venezuelan central bank’s official published rate (5.3 Bolivars per U.S. Dollar) to translate Venezuelan assets into U.S. Dollars as no other legal rate was readily available. In February 2013, the Venezuelan government announced a devaluation in its currency and created a new official exchange rate of 6.3 Bolivars per U.S. Dollar. As a result of the currency devaluation, we recognized a $0.6 million pre-tax foreign currency loss in the third quarter of fiscal year 2013.

In the third quarter of fiscal year 2014, we began using an alternative Venezuelan, state-run exchange rate, commonly referred to as SICAD-1, to translate local currency financial statements. We believe using the SICAD-1 rate of 11.8 Bolivars per Dollar is more economically representative of what we might expect to receive in a dividend transaction than the official exchange rate of 6.3 Bolivars per Dollar because any dividend payments that would have been approved by the Central Bank of Venezuela prior to March 2014 would likely have been converted to U.S. Dollars at the SICAD-1 rate. As a result of the revaluation, we recognized a $1.9 million foreign currency loss in the third quarter of fiscal 2014.

In March 2014, a market-based, state-run exchange, commonly referred to as SICAD-2, was initiated by the Central Bank of Venezuela. The nascent exchange system reported early exchange rates of about 50 Bolivars per U.S. Dollar. Management is closely monitoring the applicability and viability of this new exchange system. We have not yet determined whether we will utilize SICAD-1 or SICAD-2 exchange rates in the future for translation of local financial statements into U.S. Dollars.

At February 28, 2014, after giving effect to the revaluation in the third quarter of fiscal 2014, our Venezuelan subsidiary had net assets of $2.4 million, consisting primarily of Bolivars denominated accounts receivable. If SICAD-2 rates are used to translate local currency financial statements to U.S. Dollars in the future, a further significant revaluation of our net assets in Venezuela can be expected in the fourth quarter of fiscal year 2014.

17. REPURCHASE OF COMMON STOCK

On October 1, 2013, our Board approved an initial $25 million stock repurchase plan, superseding and replacing our previous stock repurchase plan. During our second quarter, we repurchased 369,900 shares for a total cost of $13.3 million. These shares, along with 89,569 shares purchased in a prior period at a cost of $1.3 million, were retired and are not included in common stock issued and outstanding as of February 28, 2014. The retirement of the shares purchased resulted in a reduction in common stock of $0.1 million, a reduction of $2.2 million to additional paid-in capital, and a $12.3 million reduction in retained earnings. No shares were repurchased in the third quarter.

21

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

The following discussion should be read in conjunction with the unaudited condensed consolidated financial statements and the notes thereto included in Item 1 of this report, and the consolidated financial statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations, including Critical Accounting Policies, included in our Annual Report on Form 10-K for the year ended May 31, 2013.

We based our forward-looking statements on our reasonable beliefs and assumptions, and our current expectations, estimates and projections about ourselves and our industry. We caution that these statements are not guarantees of future performance and involve risks, uncertainties and assumptions that we cannot predict. In addition, we based many of these forward-looking statements on assumptions about future events that may prove to be inaccurate. We wish to ensure that such statements are accompanied by meaningful cautionary statements, so as to obtain the protections of the safe harbor established in the Private Securities Litigation Reform Act of 1995. New risk factors emerge from time to time and it is not possible for us to predict all such risk factors, nor can we assess the impact of all such risk factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Accordingly, forward-looking statements cannot be relied upon as a guarantee of future results and involve a number of risks and uncertainties that could cause actual results to differ materially from those projected in the statements, including, but not limited to the statements under “Risk Factors”. We undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Differences between actual results and any future performance suggested in these forward-looking statements could result from a variety of factors, including those listed beginning on page 7 of our Annual Report on Form 10-K for the year ended May 31, 2013.

General Description of Business

We are a leading provider of specialty industrial services, including inspection and assessment, required in maintaining high temperature and high pressure piping systems and vessels that are utilized extensively in the refining, petrochemical, power, pipeline and other heavy industries. Through fiscal year 2013, we operated in only one segment—the industrial services segment (see Note 14). Within the industrial services segment, we were organized as two divisions. Our TCM division provided the services of inspection and assessment and field heat treating. Our TMS division provided the mechanical services described below.

Effective July 1, 2013, we implemented a reorganization of our business divisions to conduct operations in three segments: IHT Group, MS Group and Quest Group. While our services have been realigned in three business groups, we believe our services broadly fall into three different classifications that have unique customer demand drivers: inspection and assessment services, turnaround services, and on-stream services.

Inspection and assessment services are offered in both the IHT Group and Quest Group. The IHT Group provides basic and advanced non-destructive testing services for the process, pipeline and power sectors, pipeline integrity management services, as well as associated engineering and assessment services. These services can be offered while facilities are running (on-stream) or during facility turnarounds or during new construction or expansion activities. The Quest Group provides integrity and reliability management solutions for the process, pipeline and power sectors. These solutions encompass two broadly-defined disciplines: (1) highly specialized in-line inspection services for unpiggable process piping and pipelines using proprietary in-line inspection tools and analytical software; and (2) advanced condition assessment services through a multi-disciplined engineering team. We believe there is a general growth in market demand for inspection and assessment services as improved inspection technologies enable better information about asset reliability to be available to facility owners and operators.

22

Turnaround services are offered in both the IHT Group and in the MS Group. These services are project-related and demand is a function of the number and scope of scheduled and unscheduled facility turnarounds and as well as new industrial facility construction or expansion. Turnaround services include the field machining, technical bolting, field valve repair, heat exchanger repair, and isolation test plugging services that are part of the MS Group and the field heat treating services that are part of the IHT Group.

On-stream services are offered by the MS Group and represent the services offered while plants are operating and under pressure. These services include leak repair, fugitive emissions control and hot tapping. We believe demand for on-stream services is a function of the population of the existing infrastructure of operating industrial facilities.

We offer these services in over 125 locations throughout the world. Our industrial services are available 24 hours a day, 7 days a week, 365 days a year. We market our services to companies in a diverse array of heavy industries which include the petrochemical, refining, power, pipeline, steel, pulp and paper industries, as well as municipalities, shipbuilding, OEMs, distributors, and some of the world’s largest engineering and construction firms. Our services are also provided across a broad geographic reach.

Three Months Ended February 28, 2014 Compared to Three Months Ended February 28, 2013

The following table sets forth the components of revenue and operating income from our operations for the three months ending February 28, 2014 and 2013:

	Three Months Ended February 28,						Increase (Decrease)
	2014			2013			$			%
Revenues by business segment:
IHT	$	85,149		$	81,227		$	3,922			5	%
MS		63,440			59,513			3,927			7	%
Quest		14,647			10,235			4,412			43	%
Total	$	163,236		$	150,975		$	12,261			8	%
Revenues by service type:
Inspection and assessment	$	76,752		$	71,347		$	5,405			8	%
Turnaround		48,150			41,869			6,281			15	%
On-stream services		38,334			37,759			575			2	%
Total	$	163,236		$	150,975		$	12,261			8	%
Operating income:
IHT	$	3,783		$	4,439		$	(656	)		(15	)%
MS		2,939			3,346			(407	)		(12	)%
Quest		1,170			(62	)		1,232			100	%
Corporate and shared support		(6,892	)		(7,114	)		222			(3	)%
Total	$	1,000		$	609		$	391			64	%

Revenues. While overall revenues grew modestly from the prior year quarter, the components of our revenue shifted significantly in the current year quarter. Quest revenues grew 43% reflecting strong growth in process industry services. Revenue growth for both the IHT and MS business units were negatively impacted by significant disruptions in business activity due to the uncharacteristically adverse and prolonged winter weather across the United States and Canada. We believe we lost about $6 million of revenue in the quarter associated with project delays and deferrals.

23

Operating Income. Overall operating income was up $0.4 million versus the prior year quarter. Quest’s operating income improved $1.2 million over the prior year quarter due to its significant revenue growth in the quarter. MS and IHT operating income declined by $1.1 million in total. We believe operating income was negatively impacted by $3-4 million due to the lost revenue associated with the significant weather related disruptions in business activity mentioned above.

Nine Months Ended February 28, 2014 Compared to Nine Months Ended February 28, 2013

The following table sets forth the components of revenue and operating income from our operations for the nine months ending February 28, 2014 and 2013:

	Nine Months Ended February 28,						Increase (Decrease)
	2014			2013			$			%
Revenues by business segment:
IHT	$	290,409		$	272,372		$	18,037			7	%
MS		200,196			201,011			(815	)		(0	)%
Quest		47,435			39,732			7,703			19	%
Total	$	538,040		$	513,115		$	24,925			5	%
Revenues by service type:
Inspection and assessment	$	274,821		$	247,664		$	27,157			11	%
Turnaround		144,354			157,877			(13,523	)		(9	)%
On-stream services		118,865			107,574			11,291			10	%
Total	$	538,040		$	513,115		$	24,925			5	%
Operating income:
IHT	$	31,666		$	30,411		$	1,255			4	%
MS		17,120			21,049			(3,929	)		(19	)%
Quest		5,986			5,944			42			1	%
Corporate and shared support		(21,786	)		(20,931	)		(855	)		4	%
Total	$	32,986		$	36,473		$	(3,487	)		(10	)%

Revenues. For the nine months ended February 28, 2014, overall revenues increased $24.9 million over the prior year-to-date period, including $10.8 million associated with business acquisitions (all in IHT). Quest revenues were up 19% over the prior year-to-date period, reflecting a slow start in the first quarter of the fiscal year followed by a very strong second and third quarter. The current year-to-date period was impacted by significantly fewer large turnaround projects in the first half of the year compared to the prior year period as well as the adverse weather conditions discussed above.

Operating income. Overall operating income was down $3.5 million from the first nine months of last year. Without regard to the $2.1 million non-cash gain from the revaluation of contingent consideration recognized in the second quarter (included in IHT) and $0.7 million of severance costs in the first quarter (included in corporate and shared support costs), operating income would have declined by $4.9 million. $3.9 million of the decline in operating income is attributable to the MS Group, reflecting the severe weather conditions in the third quarter and fewer number of large projects in the first nine months of the current year compared to last year. Quest’s operating income was flat when comparing the current year and last year due to the slow start by Quest in the first quarter of the year.

Liquidity and Capital Resources

Financing for our operations consists primarily of vendor financing and leasing arrangements, our Credit Facility and cash flows attributable to our operations, which we believe are sufficient to fund our business needs.

24

The Credit Facility has borrowing capacity of up to $150 million in multiple currencies, bears interest based on a variable Eurodollar rate option (LIBOR plus 1.75% margin at February 28, 2014) with the margin based on financial covenants set forth in the Credit Facility. In connection with a prior renewal of the Credit Facility, we are amortizing $0.8 million of associated debt issuance costs which are being amortized over the life of the Credit Facility. At February 28, 2014, we had $39.5 million of cash on hand and approximately $53 million of available borrowing capacity through our Credit Facility. Our Credit Facility does not mature until July 2016 and there are no mandatory payments before the maturity date. At that time, we expect to be able to renew the facility based upon our long-term relationships with each member bank of our Credit Facility and the relatively low credit leverage defined as our debt to EBITDA ratio.

In the second quarter of 2013, we initiated the design and implementation of a new ERP system, which is expected to be fully installed by the end of fiscal 2016. Total future capital costs associated with the implementation are expected to be in the range of $10 to $12 million over the next two years.

Additionally, we are redeveloping Team’s former headquarters in Alvin, Texas as an equipment, training and technical center for operations support. The Alvin project is expected to be completed in the spring of 2014 at a total cost of approximately $9 million.

On October 1, 2013, our Board approved an initial $25 million stock repurchase plan, superseding and replacing our previous stock repurchase plan. During our second quarter, we repurchased 369,900 shares for a total cost of $13.3 million. These shares, along with 89,569 shares purchased in a prior period at a cost of $1.3 million, were retired and are not included in common stock issued and outstanding as of February 28, 2014. The retirement of the shares purchased resulted in a reduction in common stock of $0.1 million, a reduction of $2.2 million to additional paid-in capital, and a $12.3 million reduction in retained earnings. No shares were repurchased in the third quarter.

Restrictions on cash. Included in our cash and cash equivalents at February 28, 2014, is cash in certain foreign subsidiaries where earnings are considered by the Company to be permanently reinvested. In the event that some or all of this cash were to be repatriated, we would be required to accrue and pay additional taxes. While not legally restricted from repatriating this cash, we consider all undistributed earnings of these foreign subsidiaries to be indefinitely reinvested and access to cash to be limited. Similarly, the uncertain economic and political environment in Venezuela makes it very difficult to repatriate the cash of our Venezuelan subsidiary. Due to the official devaluation of the Venezuelan currency, the Bolivar, in February 2013 we recorded a devaluation loss of $0.6 million in the year ended May 31, 2013.

In the third quarter of fiscal year 2014, we began using an alternative Venezuelan, state-run exchange rate, commonly referred to as SICAD-1, to translate local currency financial statements. We believe the SICAD-1 rate of 11.8 Bolivars per Dollar is more economically representative of what we might expect to receive in a dividend transaction than the official rate of 6.3 Bolivars per Dollar because any dividend payments that would have been approved by the Central Bank of Venezuela prior to March 2014 would likely have been converted to U.S. Dollars at the SICAD-1 rate. As a result of the revaluation, we recognized a $1.9 million foreign currency loss in the third quarter of fiscal 2014.

In March 2014, a market-based, state-run exchange, commonly referred to as SICAD-2, was initiated by the Central Bank of Venezuela. The nascent exchange system reported early exchange rates of about 50 Bolivars per U.S. Dollar. Management is closely monitoring the applicability and viability of this new exchange system. We have not yet determined whether we will utilize SICAD-1 or SICAD-2 exchange rates in the future for translation of local financial statements into U.S. Dollars.

At February 28, 2014, after giving effect to the revaluation in the third quarter of fiscal 2014, our Venezuelan subsidiary had net assets of $2.4 million, consisting primarily of Bolivar denominated accounts

25

receivable. If SICAD-2 rates are used to translate local currency financial statements to U.S. Dollars in the future, a further significant revaluation of our net assets in Venezuela can be expected in the fourth quarter of fiscal year 2014.

Cash flows attributable to our operating activities. For the nine months ended February 28, 2014, net cash provided by operating activities was $39.5 million. Net income of $18.1 million, depreciation and amortization of $16.0 million, foreign currency loss of $2.4 million, a decrease in working capital of $2.5 million, and non-cash compensation cost of $3.2 million were offset by a contingent consideration revaluation of $2.1 million.

Cash flows attributable to our investing activities. For the nine months ended February 28, 2014, net cash used in investing activities was $33.6 million, consisting primarily of $23.8 million of capital expenditures and $10.2 million for business acquisitions. Capital expenditures can vary depending upon specific customer needs that may arise unexpectedly.

Cash flows attributable to our financing activities. For the nine months ended February 28, 2014, net cash provided by financing activities was $0.6 million consisting primarily of $9.8 million of net borrowings related to our Credit Facility and $4.8 million through the issuance of common stock from share-based payment arrangements. This increase was offset by $13.3 million of payments related to the purchase of stock pursuant to our stock repurchase plan.

Effect of exchange rate changes on cash. For the nine months ended February 28, 2014, the effect of exchange rate changes on cash was a negative $1.3 million. We have significant operations in Europe and Canada, as well as operations in Venezuela which is considered a hyperinflationary economy. The impact of foreign currency exchange rates on cash in the current year is primarily attributable to changes in U.S. Dollar exchange rates with Canada, Europe and Venezuela.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We have operations in foreign countries with a functional currency that is not the U.S. Dollar. We are exposed to market risk, primarily related to foreign currency fluctuations related to these operations. A significant part of these assets relate to our operations in Europe and Canada. During the nine months ended February 28, 2014, the exchange rate with the Euro increased from $1.30 per Euro to $1.37 per Euro, an increase of 5%. During the same period, the exchange rate with the Canadian Dollar decreased from $0.97 per Canadian Dollar to $0.90 per Canadian Dollar, a decrease of 7%. For foreign subsidiaries with a functional currency that is not the U.S. Dollar, such as our operations in Europe and Canada, assets and liabilities are translated at period ending exchange rates. Translation adjustments for the assets and liability accounts are included as a separate component of accumulated other comprehensive income in shareholders’ equity. Foreign currency translation losses in other comprehensive income were $2.9 million for the nine months ended February 28, 2014.

We carry Euro based debt to serve as a hedge of our net investment in our European operations as fluctuations in the fair value of the borrowing attributable to the U.S. Dollar/Euro spot rate will offset translation gains or losses attributable to our investment in our European operations. We are exposed to market risk, primarily related to foreign currency fluctuations related to the unhedged portion of our investment in our European operations.

At February 28, 2014, our Venezuelan subsidiary had $2.4 million of net assets denominated in Venezuelan Bolivars and translated into U.S. Dollars. We account for Venezuelan operations pursuant to accounting guidance for hyperinflationary economies. Following the designation of the Venezuelan economy as hyperinflationary, we ceased recording the effects of currency fluctuations to accumulated other comprehensive income and began reflecting all effects as a component of other income in our statement of operations. As discussed above, there was an official devaluation of the Venezuelan currency, the Bolivar, in February 2013 which resulted in the recognition of a devaluation loss of $0.6 million in the year ended May 31, 2013.

In the third quarter of fiscal year 2014, we began using an alternative Venezuelan, state-run exchange rate, commonly referred to as SICAD-1, to translate local currency financial statements. We believe the SICAD-1 rate

26

of 11.8 Bolivars per Dollar is more economically representative of what we might expect to receive in a dividend transaction than the official rate of 6.3 Bolivars per Dollar because any dividend payments that would have been approved by the Central Bank of Venezuela prior to March 2014 would likely have been converted to U.S. Dollars at the SICAD-1 rate. As a result of the revaluation, we recognized a $1.9 million foreign currency loss in the third quarter of fiscal 2014.

In March 2014, a market-based, state-run exchange, commonly referred to as SICAD-2, was initiated by the Central Bank of Venezuela. The nascent exchange system reported early exchange rates of about 50 Bolivars per U.S. Dollar. Management is closely monitoring the applicability and viability of this new exchange system. We have not yet determined whether we will utilize SICAD-1 or SICAD-2 exchange rates in the future for translation of local financial statements into U.S. Dollars.

At February 28, 2014, after giving effect to the revaluation in the third quarter of fiscal 2014, our Venezuelan subsidiary had net assets of $2.4 million, consisting primarily of Bolivars denominated accounts receivable. If SICAD-2 rates are used to translate local currency financial statements to U.S. Dollars in the future, a further significant revaluation of our net assets in Venezuela can be expected in the fourth quarter of fiscal year 2014.

We hold certain floating-rate obligations. We are exposed to market risk primarily related to potential increases in interest rates related to our debt.

ITEM 4. CONTROLS AND PROCEDURES

Limitations on effectiveness of control. Our management, including the principal executive and financial officer, does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well designed or operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. The design of our control system reflects the fact that there are resource constraints and the benefits of such controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control failures and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts, by collusion of two or more people, or by management override of the

controls. The design of any system of controls is also based in part on certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of management’s assessments of the current effectiveness of our disclosure controls and procedures and its internal control over financial reporting are subject to risks. However, our disclosure controls and procedures are designed to provide reasonable assurance that the objectives of our control system are met.

Evaluation of disclosure controls and procedures. As of the end of the period covered by this report, an evaluation was carried out under the supervision and with the participation of our management, including our Chief Executive Officer (“CEO”) and our Chief Financial Officer (“CFO”), of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (“Exchange Act”)). This evaluation included consideration of the various processes carried out under the direction of our disclosure committee in an effort to ensure that information required to be disclosed in our SEC reports is recorded, processed, summarized and reported within the time periods specified by the SEC. This evaluation also considered the work completed relating to our compliance with Section 404 of the Sarbanes-Oxley Act of 2002.

Based on this evaluation, our CEO and CFO concluded that, as of February 28, 2014, our disclosure controls and procedures were operating effectively to ensure that the information required to be disclosed in our SEC

27

reports is recorded, processed, summarized and reported within the requisite time periods and that such information is accumulated and communicated to management, including our CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.

Changes in internal control over financial reporting. There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) that have materially affected or are reasonably likely to materially affect our internal control over financial reporting during the third quarter of our fiscal year ending May 31, 2014.

28

PART II—OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Con Ed Matter—We have, from time to time, provided temporary leak repair services for the steam operations of Consolidated Edison Company of New York (“Con Ed”) located in New York City. In July 2007, a Con Ed steam main located in midtown Manhattan ruptured causing one death and other injuries and property damage. As of February 28, 2014, ninety-five lawsuits have been filed against Con Ed, the City of New York and Team in the Supreme Courts of New York located in Kings, New York and Bronx County, alleging that our temporary leak repair services may have contributed to the cause of the rupture. The lawsuits seek generally unspecified compensatory damages for personal injury, property damage and business interruption. Additionally, on March 31, 2008, we received a letter from Con Ed alleging that our contract with Con Ed requires us to indemnify and defend Con Ed for additional claims filed against Con Ed as a result of the rupture. Con Ed filed an action to join Team and the City of New York as defendants in all lawsuits filed against Con Ed that did not include Team and the City of New York as direct defendants. We are vigorously defending the lawsuits and Con Ed’s claim for indemnification. We are unable to estimate the amount of liability to us, if any, associated with these lawsuits and the claim for indemnification. We maintain insurance coverage, subject to a deductible limit of $250,000, which we believe should cover these claims. We have not accrued any liability in excess of the deductible limit for the lawsuits. We do not believe the ultimate outcome of these matters will have a material adverse effect on our financial position, results of operations or cash flows.

We are involved in various other lawsuits and are subject to various claims and proceedings encountered in the normal conduct of business. In our opinion, any uninsured losses that might arise from these lawsuits and proceedings will not have a materially adverse effect on our consolidated financial statements.

ITEM 1A.   RISK FACTORS

See page 7 of our Annual Report on Form 10-K for the year ended May 31, 2013 for a detailed discussion of our risk factors.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

On October 1, 2013, our Board approved an initial $25 million stock repurchase plan, superseding and replacing our previous stock repurchase plan. Concurrently, our Credit Facility was amended to exclude the first $25 million of stock repurchases from the definition of “fixed charges” for purposes of calculating the fixed charge coverage ratio under the Credit Facility. Through November 30, 2013, we repurchased a total of 369,900 shares under this program for an aggregate cost of $13.3 million, or an average price of $36.05 per share.

Repurchases during the first half of fiscal year 2014 were as follows:

Period	(a) Total number of Shares (or Units) Purchased		(b) Average Price Paid per Share (or Unit)		(c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs		(d) Maximum Number (or Appropriate Dollar Value) of Shares (or Units) that May Yet be Purchased Under the Plan or Program
June 1—August 31, 2013		—		—		—		—
September 1—September 30, 2013		—		—		—		—
October 1—November 30, 2013		369,900	$	36.05		369,900	$	11,666,511
Total		369,900	$	36.05		369,900	$	11,666,511

No further share repurchases were made in the third quarter of fiscal year 2014.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

NONE

29

ITEM 4. MINE SAFETY DISCLOSURES

NOT APPLICABLE

ITEM 5. OTHER INFORMATION

On April 7, 2014, the Company completed an Amended and Restated Put/Call Option Agreement with the shareholders representative of the Class B stockholders of TQ Acquisition, Inc. to update and clarify certain provisions of the agreement. A form of the Amended and Restated Put/Call Option Agreement is filed as Exhibit 10.1 to this Form 10-Q.

Effective April 4, 2014, the Board of Directors of the Company amended the Bylaws of the Company to provide for majority voting in uncontested director elections. A copy of the Amended and Restated Bylaws, including this provision, is filed as an Exhibit 3.1 to this Form 10-Q.

ITEM 6. EXHIBITS

Exhibit Number	Description
3.1	Amended and Restated Bylaws of the Company effective April 4, 2014.
10.1	Form of Amended and Restated Put/Call Option Agreement dated April 7, 2014.
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS—	XBRL Instance Document.
101.SCH—	XBRL Taxonomy Schema Document.
101.CAL—	XBRL Calculation Linkbase Document.
101.DEF—	XBRL Definition Linkbase Document.
101.LAB—	XBRL Label Linkbase Document.
101.PRE—	XBRL Presentation Linkbase Document.

30

SIGNATURES

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: April 8, 2014	/S/    PHILIP J. HAWK
	Philip J. Hawk Chairman and Chief Executive Officer
	/S/    TED W. OWEN
	Ted W. Owen, Executive Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

31

EX-3.1

EX-3.1 AMENDED AND RESTATED BYLAWS

Exhibit 3.1

AMENDED AND RESTATED BYLAWS

OF

TEAM, INC.

ARTICLE I.

The Board of Directors

SECTION 1.1. Authority of Board. The business and affairs of Team, Inc. (herein called the “Corporation”) shall be managed by or under the direction of the Board of Directors (the “Board”) or, if authorized by the Board, by or under the direction of one or more committees thereof, to the extent permitted by law and by the Board. Except as may be otherwise provided by law or these Bylaws or, in the case of a committee of the Board, by applicable resolution of the Board or such committee, the Board or any committee thereof may act by unanimous written consent or, at an authorized meeting at which a quorum is present, by the vote of the majority of the Directors present at the meeting. Except as may be otherwise provided by law, the Board shall have power to determine from time to time whether, and if allowed, when and under what conditions and regulations any of the accounts and books of the Corporation shall be open to inspection.

SECTION 1.2. Number of Directors; Classification of the Board. The number of Directors which shall constitute the whole Board of the Corporation shall be fixed from time to time by action of the Board, but shall not consist of fewer than five (5) Directors at any given time. The Directors shall be classified into three classes: Class I, Class II and Class III. Such classes shall be as nearly equal in number of Directors as possible. Each Director shall serve for a term ending on the third annual meeting following the annual meeting at which such Director was elected. The foregoing notwithstanding, each Director shall serve until his successor shall have been duly elected and qualified, unless he or she shall resign, become disqualified or disabled, or shall otherwise be removed.

At each annual election, the Directors chosen to succeed those whose terms then expire shall be of the same class as the Directors they succeed, unless, by reason of any intervening changes in the authorized number of Directors, the Board shall designate one or more Directorships whose term then expires as Directorships of another class in order more nearly to achieve equality of number of Directors among the classes.

Notwithstanding the rule that the three classes shall be as nearly equal in number of Directors as possible, in the event of any change in the authorized number of Directors, each Director then continuing to serve as such shall nevertheless continue as a Director of the class of which he or she is a member until the expiration of his current term, or his prior death, resignation or removal. If any newly created Directorship may, consistent with the rule that the three classes shall be as nearly equal in number of Directors as possible, be allocated to one or two or more classes, the Board shall allocate it to that of the available classes whose terms of office are due to expire at the earliest date following such allocation. No decrease in the number of Directors constituting the Board shall shorten the term of any incumbent Director.

SECTION 1.3. Removal. Except as otherwise required by law or the Corporation’s Certificate of Incorporation, a Director of the Corporation may be removed only for cause, as determined by the affirmative vote of the holders of at least a majority of the shares then entitled to vote in an election of Directors, voting as a single class.

SECTION 1.4. Newly Created Directorships and Vacancies. Newly created Directorships resulting from an increase in the number of Directors may be filled by the affirmative vote of a majority of the Directors for a term of office continuing only until the next election of one or more Directors by the stockholders entitled to vote

thereon; provided, however, that the Board shall not fill more than two such Directorships during the period between two successive annual meetings of stockholders. Any vacancies on the Board resulting from death, resignation, disqualification, removal or other cause shall be filled by the affirmative vote of a majority of the remaining Directors then in office, even though less than a quorum of the Board. Any Director elected to fill any such vacancy shall hold office for the remainder of the full term of the Director whose departure from the Board created the vacancy and until such newly elected Director’s successor shall have been elected and qualified.

SECTION 1.5. Authorized Meetings of the Board. The Board shall have authority to hold annual, regular and special meetings. An annual meeting of the Board may be held immediately after the conclusion of the annual meeting of the stockholders. Regular meetings of the Board may be held at such times as the Board may determine. Special meetings may be held if called by the Chairman of the Board, the CEO, or by at least one-third of the Directors then in office.

Notice of the time or place of a meeting may be given in person or by telephone by any officer of the Corporation, or transmitted electronically to the Director’s home or office, or entrusted to a third party company or governmental entity for delivery to the Director’s business address. Notice of annual or regular meetings is required only if the time for the meeting is changed or the meeting is not to be held at the principal executive offices of the Corporation. When notice is required, it shall be given not less than twenty-four (24) hours prior to the time fixed for the meeting; provided, however, that if notice is transmitted electronically or entrusted to a third party for delivery, the electronic transmission shall be effected or the third party shall promise delivery by not later than the end of the day prior to the day fixed for the meeting. The Board may act at meetings held without required notice if all Directors consent to the holding of the meeting before, during or after the meeting.

At all meetings of the Board, a majority of the Directors then in office shall constitute a quorum for all purposes. If any meeting of the Board shall lack a quorum, a majority of the Directors present may adjourn the meeting from time to time, without notice, until a quorum is obtained.

SECTION 1.6. Committees. The Board may, by resolution approved by at least a majority of the authorized number of Directors, establish committees of the Board with such powers, duties and rules of procedure as may be provided by the resolutions of the Board establishing such committees. Any such committee shall have a secretary and report its actions to the Board.

SECTION 1.7. Compensation. Directors shall be entitled to compensation for their service on the Board or any committee thereof as the Board may determine from time to time. No such payment shall preclude any Director from serving the Corporation in any other capacity and receiving compensation therefor.

ARTICLE II

Officers

SECTION 2.1. Designated Officers. The officers of the Corporation shall be elected by, and serve at the pleasure of, the Board and shall consist of a Chairman of the Board, Chief Executive Officer, Chief Financial Officer, one or more President and Vice President (one or more Vice President may be designated an Executive Vice President or Senior Vice President), Secretary, and Treasurer, as determined by the Board. The Board also may elect or appoint such other officers and assistant officers as the Board may from time to time deem advisable for the conduct and affairs of the Corporation. Any two offices may be held by the same person.

SECTION 2.2. Election and Term. At its first meeting after each annual meeting of the stockholders, the Board shall elect the officers. The term of each officer shall be until the first meeting of the Board following the next annual meeting of stockholders and until such officer’s successor is chosen and qualified, or until such person’s earlier death, disqualification or removal.

SECTION 2.3. Removal. Except where otherwise expressly provided in a contract authorized by the Board, any officer elected or appointed by the Board may be removed at any time with or without cause by the affirmative vote of a majority of the Board. Any officer or agent appointed by the Chief Executive Officer may be removed by him or her with or without cause.

SECTION 2.4. Vacancies. A vacancy in any office may be filled for the unexpired portion of the term by the Board. Any vacancy in an office appointed by the Chief Executive Officer because of death, resignation, or removal may be filled by the Chief Executive Officer.

SECTION 2.5. Chairman of the Board. The Chairman shall preside at meetings of the stockholders and the Board, and shall have such other powers and perform such other duties as may from time to time be granted or assigned by the Board.

SECTION 2.6. Chief Executive Officer. The Board may appoint one or more officers of the Corporation as the Chief Executive Officer (such one or more individuals, the “CEO”). The CEO shall be the senior executive officer of the Corporation and shall in general supervise and control all the business and affairs of the Corporation. The CEO shall direct the policies of the Corporation and shall perform all other duties incident to the office or as may be delegated or assigned by the Board from time to time. The CEO may delegate powers to any other officer of the Corporation.

SECTION 2.7. The President. Subject to the Chairman of the Board, the CEO and the Board itself, the President shall in general assist the CEO in the administration and operation of the Corporation’s business and general supervision of its policies and affairs. He shall perform all duties incident to the Office of President and such other duties as may be prescribed by the Board from time to time.

SECTION 2.8. Chief Financial Officer. The Chief Financial Officer shall be and the senior financial officer and act in an executive financial capacity. The Chief Financial Officer shall assist the CEO in the general supervision of the Corporation’s financial policies and affairs and shall have such duties as are incident to such office or as may be delegated or assigned from time to time by the CEO or by the Board.

SECTION 2.9. Vice Presidents. In the event of the absence or disability of the Chairman of the Board, the CEO and the President, the Vice Presidents in the order designated by the Board or in the absence of any designation, then in the order of their rank (Executive Vice President, Senior Vice President, Vice President), shall be designated by the Board to exercise their powers and perform their duties. The Vice Presidents shall have such other powers and perform such other duties as may from time to time be granted or assigned to them by the Board or, subject to the control of the Board, the CEO or the President.

SECTION 2.10. Secretary. The Secretary shall keep full and complete records of the proceedings of the Board and the meetings of the stockholders; keep the seal of the Corporation, and affix the same to all instruments which may require it; have custody of and maintain the Corporation’s stockholder records; and shall have such other powers and perform such other duties as may from time to time be granted or assigned to him by the Board or, subject to the control of the Board, by a committee thereof, or otherwise be in accordance with the direction of the Board.

SECTION 2.11. Treasurer. The Treasurer shall have custody of the funds of the Corporation and deposit and pay out such funds, from time to time, in such manner as may be prescribed by, or be in accordance with the direction of the Board or the CEO, and shall have such other powers and perform such other duties as may from time to time be granted or assigned to him by the Board or, subject to the control of the Board, by a committee thereof, or otherwise be in accordance with the direction of the Board.

SECTION 2.12. Other Officers. Any other elected officer shall have such powers and perform such duties as may from time to time be granted or assigned to him by the Board or, subject to the control of the Board, by a committee thereof, or otherwise be in accordance with the direction of the Board.

SECTION 2.13. Compensation. The officers of the Corporation shall be entitled to compensation for their services. The amounts and forms of compensation which each of such officers shall receive, and the manner and times of its payment, shall be determined by, or be in accordance with the direction of, the Board.

ARTICLE III

Certificates for Shares and Their Transfer

SECTION 3.1. Certificates for Shares. Certificates representing shares of the Corporation shall be in such form as shall be determined by the Board. The stock certificates shall be signed by (a) the Chairman of the Board and the CEO, or the President, a vice president, or the secretary; or (b) the CEO and the President, a vice president or the secretary; as shall be determined by the Board. All certificates for shares shall be consecutively numbered or otherwise identified. The name and address of the person to whom the shares represented thereby are issued, with the number of shares and date of issue, shall be entered on the stock transfer books of the Corporation. All certificates surrendered to the Corporation for transfer shall be cancelled and no new certificate shall be issued until the former certificate for a like number of shares shall have been surrendered and cancelled, except that in case of a lost, destroyed or mutilated certificate a new one may be issued therefor upon such terms and indemnity to the Corporation as the Board may prescribe.

SECTION 3.2. Transfers of Shares. Transfer of shares of the Corporation shall be made only on the stock transfer books of the Corporation by the holder of record thereof or by his or her legal representative, who shall furnish proper evidence of authority to transfer, or by his or her attorney thereunto authorized by power of attorney duly executed and filed with the Secretary of the Corporation, and on surrender for cancellation of the certificate for such shares. The person in whose name shares stand on the books of the Corporation shall be deemed by the Corporation to be the owner thereof for all purposes.

ARTICLE IV

Stockholders

SECTION 4.1. Annual Meeting. An annual meeting of stockholders shall be held for the purpose of electing Directors and for the transaction of such other business as may come before the meeting on such date and at such time as the Board shall fix and set forth in the notice of the meeting, which date shall be held within six months after the last day of the Corporation’s fiscal year or as soon thereafter as practicable.

SECTION 4.2. Special Meetings. Special meetings of the stockholders, for any purpose or purposes, unless otherwise prescribed by statute, may be called only by the Chairman of the Board, or by the President pursuant to the request of the holders of not less than ten percent (10%) of the outstanding shares of the Corporation’s voting stock, as specified in and subject to the provisions and conditions described herein. No business other than that stated in the notice shall be transacted at any special meeting.

SECTION 4.3. Place of Meeting. The Board may designate any place, either within or without the State of Delaware, as the place of meeting for any annual meeting or for any special meeting called by the Board. If no designation is made, or if a special meeting be otherwise called, the place of meeting shall be the registered office of the Corporation in the State of Delaware.

SECTION 4.4. Notice of Meeting. Written or printed notice stating the place, day, and hour of each stockholders’ meeting and, in case of a special meeting, the purpose or purposes for which the stockholders’ meeting is called, shall be delivered not less than ten (10) days nor more than sixty (60) days before the date of the meeting, either personally or by mail, by or at the direction of the CEO, President, Secretary or the officer or person calling the meeting, to each stockholder of record entitled to vote at such meeting. If mailed, such notice shall be deemed to be delivered when deposited into the United States mail, addressed to the stockholder at his or her address as it appears on the stock transfer books of the Corporation, with postage thereon prepaid.

SECTION 4.5. Stockholder Action in Lieu of Meeting. Any action which may be taken at any meeting of stockholders may be taken without a meeting and without prior notice, if a unanimous consent in writing, setting forth the action so taken, shall be signed by the holders of all of the outstanding shares entitled to vote thereon.

Any written consent may be revoked by a writing received by the Secretary of the Corporation prior to the time that written consents of the number of shares required to authorize the proposed action have been filed with the Secretary.

SECTION 4.6. Closing of Transfer Books or Fixing of Record Date. For the purposes of determining stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or stockholders entitled to receive payment of any dividend, or in order to make a determination of stockholders for any other proper purpose, the Board of the Corporation may provided that the stock transfer books shall be closed for a stated period but not to exceed, in any case, sixty (60) days. If the stock transfer books shall be closed for the purpose of determining stockholders entitled to notice of or to vote at a meeting of stockholders, such books shall be closed for at least ten (10) days immediately preceding such meeting. In lieu of closing the stock transfer books, the Board may fix in advance a date as the record date for any such determination of stockholders, such date in any case to be not more than sixty (60) days and, in case of a meeting of stockholders, not less than ten (10) days prior to the date on which the particular action, requiring such determination of stockholders, is to be taken. If the stock transfer books are not closed and no record date is fixed for the determination of stockholders entitled to notice of or to vote at a meeting of stockholders, or stockholders entitled to receive payment of a dividend, the date on which notice of the meeting is mailed or the date on which the resolution of the Board declaring such dividend is adopted, as the case may be shall be the record date for such determination of stockholders. When a determination of stockholders entitled to vote at any meeting of stockholders has been made as provided in this section, such determination shall apply to any adjournment thereof except where the determination has been made through the closing of the stock transfer books and the stated period of closing has expired.

SECTION 4.7. Voting Lists. The officer or agent having charge of the stock transfer books for shares of the Corporation shall make, at least ten (10) days before each meeting of stockholders, a complete list of stockholders entitled to vote at such meeting, or any adjournment thereof, arranged in alphabetical order, with the address of and the number of shares held by each, which list for a period of ten (10) days prior to such meeting shall be kept on file at the registered office of the Corporation and shall be subject to inspection by any stockholder at any time during usual business hours. Such list shall also be produced and kept open at the time and place of the meeting and shall be subject to the inspection of any stockholder during the whole time of the meeting. The original stock transfer book shall be prima facie evidence as to who are the stockholders entitled to examine such list or transfer books or to vote at any meeting of stockholders.

SECTION 4.8. Quorum. A majority of the outstanding shares of the Corporation entitled to vote, represented in person or by proxy, shall constitute a quorum at a meeting of stockholders. If less than a majority of the outstanding shares are represented at a meeting, a majority of the shares so represented may adjourn the meeting from time to time without further notice. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally notified. The stockholders present at a duly organized meeting may continue to transact business until adjournment, notwithstanding the withdrawal of enough stockholders to leave less than a quorum.

SECTION 4.9. Proxies. At all meetings of stockholders, a stockholder may vote by proxy executed in writing by the stockholder or by his duly authorized attorney in fact. Such proxy shall be filed with the Secretary of the Corporation before or at the time of the meeting. No proxy shall be valid after three (3) years from the date of its execution, unless otherwise provided in the proxy.

SECTION 4.10. Voting of Shares. Unless otherwise required by law, each outstanding share entitled to vote or except as otherwise provided by the Certificate of Incorporation, shall be entitled to one vote upon each matter submitted to a vote at a meeting of stockholders.

SECTION 4.11. Election of Directors. In voting for election of directors, the voting shall be by written ballot, and each stockholder shall have one vote for each full share of stock entitled to vote that is registered in such stockholder’s name on the record date for the meeting at which directors are to be elected. A nominee for director shall be elected to the Board if, at a meeting of stockholders duly called and at which a quorum is present, the votes cast for such nominee’s election exceed the votes cast against such nominee’s election; provided, however, that directors shall be elected by a plurality of the votes cast at any such meeting of stockholders if, on the tenth day before the Corporation first mails its notice of meeting for such meeting to the stockholders, the number of nominees for director exceed the number of directors to be elected at such meeting. If directors are to be elected by a plurality of the votes cast, stockholders shall not be permitted to vote against a nominee.

SECTION 4.12. Inspectors of Election. In advance of any meeting of stockholders, the Board shall appoint not less than one (1) nor more than three (3) inspectors of election. If there is no such appointment made in advance, or if any appointed person refuses or fails to serve, the Chairman of the meeting shall appoint a replacement. Inspectors of election shall determine the number of shares outstanding, voting power of each share, shares represented at the meeting, existence of a quorum, and authenticity, validity and effect of proxies; shall receive votes, ballots, assents and consents, and hear and determine all challenges and questions in any way arising in connection with a vote; shall count and tabulate all votes, assents and consents, and determine and announce results; and do all other acts as may be proper to conduct elections or votes with fairness to all stockholders.

SECTION 4.13. Adjournments. Any meeting of the stockholders (whether annual or special and whether or not a quorum shall have been present), may be adjourned from time to time and from place to place by vote of a majority of the stock having voting power represented at such meeting, without notice other than announcement at such meeting of the time and place at which the meeting is to be resumed—such adjournment and the reasons therefore being recorded in the minutes of the meeting; provided, however, that if the date of any adjourned meeting is more than thirty (30) days after the date for which the meeting was originally noticed, or if a new record date is fixed for the adjourned meeting, written notice of the place, date and time of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. At any meeting so resumed after such adjournment, provided a majority of the outstanding shares of stock having voting power shall then be represented, any business may be transacted which might have been transacted at the meeting as originally scheduled.

SECTION 4.14. Advance Notice of Director Nominations and Stockholder Proposals. This Section shall apply to all stockholder proposals, regardless of whether such proposals are brought under Rule 14a-8 of the Securities Exchange Act of 1934. For business to be properly brought before an annual meeting by a stockholder (A) the stockholder must have given timely notice thereof in writing to the Secretary; (B) the subject matter thereof must be a matter which is a proper subject matter for stockholder action at such meeting; and (C) the stockholder must be a stockholder of record of the Corporation at the time the notice required by this Section is delivered to the Corporation and must be entitled to vote at the meeting.

Except as otherwise provided in the Certificate of Incorporation, to be considered timely notice, a stockholder’s notice must be received by the Secretary at the principal executive offices of the Corporation not less than 90 calendar days before the date of the Corporation’s proxy statement released to stockholders in connection with the previous year’s annual meeting of stockholders nor more than 120 days before the date of the Corporation’s proxy statement released to stockholders in connection with the previous year’s annual meeting of stockholders. If no annual meeting was held in the previous year, or if the date of the applicable annual meeting has been changed by more than 30 days from the date of the previous year’s annual meeting, then a stockholder’s notice, in order to be considered timely, must be received by the Secretary not later than the later of the close of business on the 60th day prior to such annual meeting or the tenth day following the day on which notice of the date of the annual meeting was mailed or public disclosure of such date was made.

Such stockholder’s notice shall set forth: (A) as to each person whom the stockholder proposes to nominate for election as a Director, (1) all information as may be required by the Corporation pursuant to any policy of the Corporation governing the selection of Directors; and (2) such person’s written consent to being named as a

nominee and to serving as a Director if elected; and (3) information as to any material relationships, including financial transactions and compensation, between the stockholder and the proposed nominee(s); and (B) as to any business the stockholder proposes to bring before the meeting, (1) a brief description of such business; (2) the text of the proposal or business (including the text of any resolutions proposed for consideration and, in the event that such business includes a proposal to amend the Bylaws, the language of the proposed amendment); (3) the reasons for conducting such business at the meeting; and (4) any material interest in such business of such stockholder and the beneficial owner, if any, on whose behalf the proposal or nomination is made; and (C) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the proposal or nomination is made, (1) the name and address of such stockholder, as they appear on the Corporation’s books, and of such beneficial owner; (2) the class and number of shares of the Corporation that are owned beneficially and held of record by such stockholder and such beneficial owner; (3) a representation that the stockholder is a holder of record of stock of the Corporation entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to propose such business or nomination; and (4) a representation whether the stockholder or the beneficial owner, if any, intends or is part of a group which intends (x) to deliver a proxy statement and/or form of proxy to holders of at least the percentage of the Corporation’s outstanding shares of capital stock required to approve or adopt the proposal or elect the nominee; and/or (y) otherwise to solicit proxies from stockholders in support of such proposal or nomination; and (5) a disclosure of all ownership interests, including derivatives, hedged positions and other economic and voting interests.

In addition, any nominee for election as Director must complete a questionnaire, in a form provided by the company, to be submitted with the stockholder proponent’s notice, that inquires as to, among other issues, the proposed nominee’s independence. In particular, candidates must represent that they do not have, nor will they have, any undisclosed voting commitments or other arrangements with respect to their actions as a Director.

ARTICLE V

Indemnification of Directors and Officers

SECTION 5.1. Right to Indemnification. Each person who was or is made a party or is threatened to be made a party to or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter, a “proceeding”), by reason of the fact that he or she is or was a Director or an officer of the Corporation or, while serving as a Director or officer of the Corporation, is or was serving at the request of the Corporation as a Director, officer, employee or agent of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (hereinafter, an “indemnitee”), whether the basis of such proceeding is alleged action in an official capacity as a Director, officer, employee or agent or in any other capacity while serving as a Director, officer, employee or agent, shall be indemnified and held harmless by the Corporation to the fullest extent authorized by the DGCL, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than such law permitted the Corporation to provide prior to such amendment), against all expense, liability and loss (including attorneys’ fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such indemnitee in connection therewith; provided, however, that, except as provided in Section 5.3 hereof with respect to proceedings to enforce rights to indemnification, the Corporation shall indemnify any such indemnitee in connection with a proceeding (or part thereof) initiated by such indemnitee only if such proceeding (or part thereof) was authorized in the first instance by the Board.

SECTION 5.2. Right to Advancement of Expenses. The right to indemnification conferred in Section 5.1 hereof shall include the right to be paid by the Corporation the expenses (including attorneys’ fees) incurred in defending any such proceeding in advance of its final disposition (hereinafter, an “advancement of expenses”); provided, however, that if the DGCL requires an advancement of expenses incurred by an indemnitee in his or her capacity as a Director or officer (and not in any other capacity in which service was or is rendered by such indemnitee, including, without limitation, service to an employee benefit plan) shall be made only upon delivery to the Corporation of an undertaking (hereinafter, an “undertaking”), by or on behalf of such indemnitee, to repay

all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (hereinafter, a “final adjudication”) that such indemnitee is not entitled to be indemnified for such expenses under this Article V or otherwise. The rights to indemnification and to the advancement of expenses conferred in Sections 5.1 and 5.2 hereof shall be contract rights and such rights shall continue as to an indemnitee who has ceased to be a Director, officer, employee or agent and shall inure to the benefit of the indemnitee’s heirs, executors and administrators.

SECTION 5.3. Right of Indemnitee to Bring Suit. If a claim under Section 5.1 is not paid in full by the Corporation within sixty (60) days (or, with respect to claims under Section 5.1, twenty (20) days) after a written claim has been received by the Corporation, the indemnitee may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the Indemnitee, to the fullest extent permitted by law, shall be entitled to be paid also the expense of prosecuting or defending such suit. In (i) any suit brought by the indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the indemnitee to enforce a right to an advancement of expenses) it shall be a defense that, and (ii) any suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the Corporation shall be entitled to recover such expenses upon a final adjudication that, the indemnitee has not met any applicable standard for indemnification set forth in the DGCL. Neither the failure of the Corporation (including its Board, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such suit that indemnification of the indemnitee is proper in the circumstances because the indemnitee has met the applicable standard of conduct set forth in the DGCL, nor an actual determination by the Corporation (including its Board, independent legal counsel, or its stockholders) that the indemnitee has not met such applicable standard of conduct, shall create a presumption that the indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the indemnitee, be a defense to such suit. In any suit brought by the indemnitee to enforce a right to indemnification or to an advancement of expenses hereunder, or brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the burden of proving that the indemnitee is not entitled to be indemnified, or to such advancement of expenses, under this Article V or otherwise shall be on the Corporation.

SECTION 5.4. Non-Exclusivity of Rights; Effect of Amendment. The rights to indemnification and to the advancement of expenses conferred in this Article V shall not be exclusive of any other right which any person may have or hereafter acquire by any statute, the Corporation’s Certificate of Incorporation or Bylaws, agreement, vote of stockholders or disinterested Directors or otherwise. Any amendment, alteration or repeal of this Article V that adversely affects any right of an indemnitee or it successors shall be prospective only and shall not limit or eliminate any such right with respect to any proceeding involving any occurrence or alleged occurrence of any action or omission to act that took place prior to such amendment, alteration or repeal.

SECTION 5.5. Insurance. The Corporation may maintain insurance, at its expense, to protect itself and any Director, officer, employee or agent of the Corporation or another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the DGCL.

SECTION 5.6. Indemnification of Employees and Agents of the Corporation. The Corporation may, to the extent authorized from time to time by the Board, grant rights to indemnification and to the advancement of expenses to any employee or agent of the Corporation to the fullest extent of the provisions of this Article V with respect to the indemnification and advancement of expenses of Directors and officers of the Corporation.

ARTICLE VI

Forum Selection

Unless the Corporation consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Corporation, (ii) any action asserting a claim of breach of a fiduciary duty owed by any Director, officer or other employee of the Corporation to the Corporation or the Corporation’s stockholders, (iii) any action

asserting a claim against the Corporation arising pursuant to any provision of the General Corporation Law of the State of Delaware, this Amended and Restated Certificate of Incorporation, any designation of Preferred Stock or the Bylaws of the Corporation, or (iv) any other action asserting a claim against the Corporation or any Director, officer or other employer of the Corporation that is governed by or subject to the internal affairs doctrine for choice of law purposes. Any person or entity purchasing or otherwise acquiring any interest in shares of capital stock of the Company shall be deemed to have notice of and consented to the provisions of this Article VI.

ARTICLE VII

Amendment of Bylaws

In addition to any requirements set forth by the General Corporation Law of the State of Delaware, the Bylaws of the Corporation may be adopted, amended or repealed by (i) the affirmative vote of at least two-thirds of the holders of all of the shares of the stock of the Corporation then entitled to vote in an election of Directors, voting together as a single class, or by (ii) approval of a majority of the Board.

ARTICLE VIII

Miscellaneous

SECTION 8.1. Fiscal Year. The fiscal year of the Corporation shall be determined by the Board.

SECTION 8.2. Dividends. The Board may from time to time declare, and the Corporation may pay, dividends on its outstanding shares in the manner and upon the terms and conditions provided by law and its Certificate of Incorporation.

SECTION 8.3. Seal. The Board shall provide a corporate seal which shall be circular in form and shall have inscribed thereon the name of the Corporation and the state of incorporation.

SECTION 8.4. Waiver of Notice. Whenever any notice whatever is required to be given under the provisions of these Bylaws, said notice shall be deemed to be sufficient if given by depositing the same in a post office box in a sealed postpaid wrapper addressed to the persons entitled thereto at his or her post office address, as it appears on the books of the Corporation and such notice shall be deemed to have been given on the date of such mailing. Such notice shall also be sufficient if given by electronic transmission under DGCL §232. A waiver of notice, signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto. Neither the business to be transacted at, nor the purposes of, any regular or special meeting of the Board or stockholders need be specified in the waiver of notice of such meeting.

SECTION 8.5. Executive Office. The principal executive office of the Corporation shall be located in the City of Sugar Land, County of Fort Bend, State of Texas, or at such place as the Board may from time to time determine. The Corporation also may have offices at such other places, both within and without Delaware, as the Board from time to time shall determine or the business and affairs of the Corporation may require.

EX-10.1

EX-10.1 FORM OF PUT/CALL OPTION AGREEMENT

Exhibit 10.1

AMENDED AND RESTATED PUT/CALL OPTION AGREEMENT

This Put/Call Option Agreement (this “Agreement”) is made and entered into this 7^th day of April, 2014, by and between Team, Inc., a Delaware corporation (“Team”) and the shareholders listed on the signature pages hereto (each, a “Class B Stockholder” and collectively, the “Class B Stockholders”). Team and the Class B Stockholders are each referred to as a “Party” and, collectively, they are sometimes referred to as the “Parties.”

RECITALS

WHEREAS, the Parties hereto, together with TQ Acquisition, Inc., a Texas corporation (the “Company”), Quest Integrity Group, LLC, a Delaware limited liability company (“Quest”), and John Zink Holdings, Inc., a Texas corporation (“JZH”), entered into either the Membership Interest Purchase Agreement to which Milton J. Altenberg; Ring Mountain Capital, LLC; Quest Integrated, Inc.; Alexius Group II, LLC; and Todd Katz are parties or the Membership Interest Purchase Agreement to which a Class B Stockholder is a party as an individual, each as dated November 1, 2010 (collectively, the “Purchase Agreements”), whereby the JZH and the Class B Stockholders agreed to sell and transfer to the Company all of the outstanding membership interests in Quest (the “Membership Interests”);

WHEREAS, as partial consideration for their respective Membership Interests in Quest, the Class B Stockholders received, in the amount set forth opposite each such Class B Stockholder’s name in Exhibit A hereto, an aggregate of 5,000 shares, $1.00 par value per share of Class B common stock of the Company (the “Class B Stock”) representing 5.0% of the issued and outstanding capital stock of the Company;

WHEREAS, Team is the beneficial owner of 95,000 shares, $1.00 par value per share of Class A Common Stock of the Company, representing 95.0% of the issued and outstanding capital stock of the Company;

WHEREAS, the Parties executed a Put/Call Option Agreement on November 1, 2010, and desire to amend and restate such agreement in this Agreement to provide further clarity on several matters; and

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Team and the Class B Shareholders agree as follows:

AGREEMENT

ARTICLE I

DEFINITIONS

(a) Average Annual EBITDA” means the Third Year EBITDA plus the Fourth Year EBITDA divided by two.

(b) “Business Day” means any day other than a Saturday, a Sunday or a day in which commercial banks located in Houston are permitted by law to close.

(c) “Change of Control of the Company” means (i) a merger, consolidation, share exchange or similar transaction of the Company with or into another entity in which the Company shall not be the surviving entity other than a transaction undertaken in order to reincorporate in another state or a transaction undertaken with Team or any of its Subsidiaries (for purposes thereof, the Company shall not be deemed the surviving entity in any such transaction if, as the result thereof, it becomes a wholly-owned subsidiary of another entity unless such

entity is Team or any of its Subsidiaries); (ii) any sale of all or substantially all of the assets of the Company to an entity other than Team or any of its Subsidiaries; (iii) the complete liquidation of the Company; or (iv) the acquisition of “beneficial ownership” (as defined in Rule 13d-3 under the Act) of securities of the Company representing more than 50% of the combined voting power of the Company’s then outstanding securities by any “person,” as such term is used in Sections 13(d) and 14(d) of the Act, other than Team or Quest, any trustee or other fiduciary holding securities under an employee benefit plan of Team, the Company or Quest, or any entity owned directly or indirectly by the stockholders of the Company in substantially the same proportion as their ownership of stock of the Company; provided, however, that in no event shall a Change of Control include any transaction following which the former shareholders of the Company continue to represent 50% or more of the combined voting power of the Company’s then outstanding securities, in substantially the same proportions as prior to the transaction.

(d) “Change of Control of Quest” means (i) a merger, consolidation, share exchange or similar transaction of Quest with or into another entity in which Quest shall not be the surviving entity other than a transaction undertaken in order to reform in another state or a transaction undertaken with Team or any of its Subsidiaries (for purposes thereof, Quest shall not be deemed the surviving entity in any such transaction if, as the result thereof, it becomes a wholly-owned subsidiary of another entity unless such entity is Team or any of its Subsidiaries); (ii) any sale of all or substantially all of the assets of Quest to an entity other than Team or any of its Subsidiaries; (iii) the complete liquidation of Quest; or (iv) the acquisition of “beneficial ownership” (as defined in Rule 13d-3 under the Act) of securities of Quest representing more than 50% of the combined voting power of Quest’s then outstanding securities by any “person,” as such term is used in Sections 13(d) and 14(d) of the Act, other than Team or the Company, any trustee or other fiduciary holding securities under an employee benefit plan of Team, the Company or Quest, or any entity owned directly or indirectly by the stockholders of Quest in substantially the same proportion as their ownership of equity of Quest; provided, however, that in no event shall a Change of Control include any transaction following which the former equityholders of Quest continue to represent 50% or more of the combined voting power of Quest’s then outstanding securities, in substantially the same proportions as prior to the transaction.

(e) “Change of Control of Team” means (i) a merger, consolidation, share exchange or similar transaction of Team with or into another entity in which Team shall not be the surviving entity other than a transaction undertaken in order to reincorporate in another state (for purposes thereof, Team shall not be deemed the surviving entity in any such transaction if, as the result thereof, it becomes a wholly-owned subsidiary of another entity); (ii) any sale of all or substantially all of the assets of Team; (iii) the complete liquidation of Team; or (iv) the acquisition of “beneficial ownership” (as defined in Rule 13d-3 under the Act) of securities of Team representing more than 50% of the combined voting power of Team’s then outstanding securities by any “person,” as such term is used in Sections 13(d) and 14(d) of the Act, other than Team, any trustee or other fiduciary holding securities under an employee benefit plan of Team, or any entity owned directly or indirectly by the stockholders of Team in substantially the same proportion as their ownership of stock of Team; provided, however, that in no event shall a Change of Control include any transaction following which the former shareholders of Team continue to represent 50% or more of the combined voting power of Team’s then outstanding securities, in substantially the same proportions as prior to the transaction.

(f) “Class B Stockholder Representative” means Jeffrey L. Ott, or if he should be unable or unwilling to act, Milton J. Altenberg.

(g) “EBITDA” means consolidated earnings from operations of Quest and its Subsidiaries, as determined in accordance with GAAP as consistently applied by the Company before consolidated interest, taxes, depreciation and amortization cost recorded by the Company, in each case, as determined in accordance with GAAP as consistently applied by the Company. For purposes of this Agreement, Team will not allocate charges to Quest that are not directly related to Quest activities and, subject to the specific written approval of the CEO of Team, EBITDA will be adjusted to reflect the pro forma effect of costs incurred by Quest that are directly related to Team activities, including the costs set forth on Schedule I(g) attached hereto.

2

(h) “Exercise Date” means the date on which a Party hereto delivers the applicable Exercise Notice.

(i) “Fourth Year EBITDA” means EBITDA for the period beginning on June 1, 2014, and ending on May 31, 2015.

(j) “GAAP” means United States generally accepted accounting principles.

(k) “Intercompany Balance” means for the period November 1, 2010 through May 31, 2015, a net accumulated receivable from Team to Quest (a positive number) or a net payable to Team from Quest (a negative number), denominated in U.S. dollars, equal to:

(i) all cash transferred from Quest to Team, where such transfer does not represent a payment for services rendered by Team to Quest; plus

(ii) all payments and accruals made by Quest to a third party (who is not a Party hereto) in order to reduce a liability of Team or to increase an asset of Team not related to Quest, and where such payment does not represent a payment for services rendered by Team to Quest; minus

(iii) all cash transferred from Team to Quest, where such transfer does not represent a payment for services rendered by Quest to Team; minus

(iv) all payments and accruals made by Team to a third party (who is not a Party hereto) in order to reduce a liability of Quest (including any payments made by Team to Green Bank, N.A. in order to reduce the outstanding borrowings of Quest from Green Bank, N.A.) or to increase an asset of Quest, and where such payment does not represent a payment for services rendered by Quest to Team; minus

(v) all cost allocations for services directly related to Quest activities; minus

(vi) all tax-effected, pro forma adjustments to EBITDA as described in Article I(g), and plus

(vii) the Working Capital Adjustment, if any.

The Intercompany Balance will be further adjusted to (1) treat available cash as having been paid toward the Intercompany Balance and (2) reflect the pro forma effect of income taxes payable that would have been payable, but for the APB 23 election made by Team. The payments contemplated in (i) through (vii) above are meant to include any manner of payment, whether they are characterized as debt, distributions, dividends, or otherwise.

(l) “Last Reported Sale Price” of Team Common Stock on any date means the closing sale price per share of Team Common Stock (or if no closing sale price is reported, the average of the bid and ask price or, if more than one in either case, the average of the average bid and average ask prices) on that date as reported in composite transactions for the principal United States securities exchange on which Team Common Stock is traded. If Team Common Stock is not listed for trading on a United States national or regional securities exchange on the relevant date, the “Last Reported Sale Price” shall be the last quoted bid price for Team Common Stock in the over-the-counter market on the relevant date as reported by Pink Sheets LLS or a similar organization. If Team Common Stock is not so quoted, the “Last Reported Sale Price” shall be the average of the mid-point of the last bid and ask prices for Team Common Stock on the relevant date from each of at least three nationally recognized independent investment banking firms selected by Team for this purpose.

(m) “Net Working Capital” means the total current assets (excluding cash to the extent it has been treated, on a pro-forma basis, as a reduction of the Intercompany Balance as provided in subsection “k” herein) less the total current liabilities, other than intercompany balances or debt obligations, of Quest.

(n) “Person” means any individual, partnership, limited liability company, corporation, association, joint stock company, trust, joint venture, labor organization, unincorporated organization, or governmental authority.

(o) “Quest Group” means Quest and its Subsidiaries.

3

(p) “Quest Principals” means Milton J. Altenberg and Jeffrey L. Ott, provided that if either of them shall die, then the survivor.

(q) “Settlement Amount” means the greater of (i) $2,360,056, or (ii) $2,360,056 plus (A) the Average Annual EBITDA multiplied by 7.25, less (x) $45 million, plus or minus (y) any Intercompany Balance, multiplied by (B) 0.35.

(r) “Settlement Rate” means the per share average closing price of Team Common Stock reported on the New York Stock Exchange for the ninety (90) Trading Days preceding May 31, 2015.

(s) “Subsidiary” means with respect to any Person or other business entity of which (i) if a corporation, a majority of the total voting power of shares of stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof, or (ii) if a partnership, limited liability company, association or other business entity, a majority of the partnership or other similar ownership interest thereof is at the time owned or controlled, directly or indirectly, by any Person or one or more Subsidiaries of that Person or a combination thereof. For purposes hereof, a Person or Persons shall be deemed to have a majority ownership interest in a partnership, limited liability company, association or other business entity if such Person or Persons shall be allocated a majority of partnership, limited liability company, association or other business entity gains or losses or shall be or control the managing director or general partner of such partnership, limited liability company, association or other business entity.

(t) “Team Common Stock” means the common stock, $0.30 par value per share, of Team, Inc.

(u) “Third Party Accountant” means a recognized national or regional accounting firm mutually acceptable to Team and the Class B Stockholder Representative.

(v) “Third Year EBITDA” means EBITDA for the period beginning on June 1, 2013, and ending on May 31, 2014.

(w) “Trading Day” means any day on which (i) trading in Team Common Stock generally occurs on the New York Stock Exchange or, if Team Common Stock is not then listed on the New York Stock Exchange, on the principal or other United States national or regional securities exchange on which Team Common Stock is then listed or, if Team Common Stock is not then listed on a United States national or regional securities exchange, in the principal other market on which Team Common Stock is then traded, and (ii) a Last Reported Sale Price for Team Common Stock is available on such securities exchange or market. If Team Common Stock is not so listed or traded, “Trading Day” means a Business Day.

(x) “Working Capital Adjustment” shall be calculated as follows:

(i) At the Exercise Date, to the extent Quest’s ratio of Net Working Capital to trailing 12 month revenue is less than the average ratio of Net Working Capital to trailing twelve month revenue computed for the preceding 24 month period, the Intercompany Balance at the Exercise Date shall be adjusted (increased if the Intercompany Balance is a payable to Team or decreased if the Intercompany Balance is a Receivable from Team), for purposes of the Exercise Price calculation, by an amount equal to the Net Working Capital necessary to achieve the same ratio as the trailing 24 month average month end Net Working Capital.

(ii) At the Exercise Date, to the extent Quest’s ratio of Net Working Capital to trailing 12 month revenue is greater than average ratio of Net Working Capital to trailing twelve month revenue computed for the preceding 24 month period, no adjustment to the Intercompany Balance at the Exercise Date shall be necessary.

4

ARTICLE II

CALL OPTION

Section 2.1 Call Option.

(a) Subject to Section 5.1 hereof, on or after May 31, 2015 (the “Option Date”), Team shall have the right, but not the obligation, to exercise an option to purchase all, but not less than all, of the outstanding shares of Class B Stock (the “Call Option”) for an aggregate number of unregistered shares of Team Common Stock equal to (A) the Settlement Amount divided by (B) the Settlement Rate (such formula is referred to herein as, the “Exercise Price”). A Call Option exercised hereunder shall be completed as soon as practicable following the finalization of the audited financial statements of the Company for the fiscal year period ending May 31, 2015, or if such audited statements have already been issued, then within ten days following the giving of an executed copy of the exercise notice in the applicable form attached hereto as Exhibit B (the “Exercise Notice”).

Section 2.2 Call Option Exercise Notice. In order to exercise the Call Option, Team shall send by written notice at any time prior to 5:00 p.m., Houston time, to the Class B Stockholder Representative the Exercise Notice.

ARTICLE III

PUT OPTION

Section 3.1 Put Option. Subject to Section 5.1 hereof, on or after the Option Date, the Class B Stockholder Representative shall have the right, but not the obligation, to exercise an option to cause the Company to purchase all, but not less than all, of the outstanding shares of Class B Stock (the “Put Option”) for the Exercise Price. A Put Option exercised pursuant to this Section 3.1 shall be completed as soon as practicable following the finalization of the audited financial statements of the Company for the fiscal year period ending May 31, 2015, or if such audited statements have already been issued, then within ten days following the giving of the Exercise Notice.

Section 3.2 Put Option Exercise Notice. In order to exercise the Put Option, the Class B Stockholder Representative shall send, by written notice, at any time prior to 5:00 p.m., Houston time, to Team an executed copy of the applicable Exercise Notice.

Section 3.3 Acceleration of Put Option.

(a) Subject to Section 3.3(e) and Section 5.1 hereof, within the period commencing on the date of an Acceleration Event pursuant to Section 3.3(c)(i) below and ending on the sixtieth (60^th) day following the Class B Stockholder Representative’s written notice to the Company of such Acceleration Event, the Class B Stockholder Representative, after providing the applicable Exercise Notice to the Company, shall have the right, but not the obligation, to exercise the Put Option for an aggregate number of unregistered shares of Team Common Stock equal to:

(i) the greater of (I) $2,360,056, or (II) $2,360,056 plus ((A) the Appraised Value of the Company and its Subsidiaries, less (x) $45 million, plus or minus (y) any Intercompany Balance), multiplied by (B) 0.35), divided by

(ii) the per share average closing price of Team Common Stock reported on the New York Stock Exchange for the 90 Trading Days ending the date immediately preceding the date of such Acceleration Event.

(iii) In the event that Team Common Stock is expected to cease being publicly traded in connection with a Change of Control of Team, then the Class B Stockholders shall be entitled to receive the dollar value contemplated in 3.3(a)(i) through 3.3(a)(ii) above, but payable in the same type of consideration as being paid to holders of Team Common Stock.

5

(b) Within the period commencing on the date of an Acceleration Event pursuant to Section 3.3(c)(ii) below and ending on the sixtieth (60^th) day following the Class B Stockholder Representative’s written notice to the Company of such Acceleration Event, the Class B Stockholder Representative, after providing the applicable Exercise Notice to the Company (or any successor entity to the Company), shall have the right, but not the obligation, to exercise the Put Option for an aggregate number of unregistered shares of Team Common Stock equal to:

(i) the greater of (I) $2,360,056, or (II) $2,360,056 plus ((A) the Appraised Value of the Company and its Subsidiaries, less (x) $45 million, plus or minus (y) any Intercompany Balance), multiplied by (B) 0.35); divided by

(ii) the per share average closing price of Team Common Stock reported on the New York Stock Exchange for the 90 Trading Days ending the date immediately preceding the date of such Acceleration Event.

(c) An “Acceleration Event” will be deemed to have occurred, if at any time after the date hereof and prior to the Option Date the following occurs:

(i) there is a Change of Control of Team and Team or any successor entity to Team, following a Change of Control (A) fails to allow the Company to invest net cash flows generated from its operations back into the Company (regardless of whether such investments are capitalized or expensed for accounting purposes) or (B) otherwise fails to make financial commitments to the Company on a basis at least as favorable as those in effect prior to the Change of Control; or

(ii) there is a Change of Control of Quest or the Company.

(d) For purposes of this Agreement, “Appraised Value” shall be, as of the date of the Acceleration Event, the Fair Market Value determined by an Appraiser appointed pursuant to Section 3.3(e).

(e) Within fifteen (15) days after a Class B Stockholder gives an Exercise Notice under Section 3.3(a) or Section 3.3(b) hereof, Team and the Class B Stockholder Representative shall jointly select an independent appraiser (the “Appraiser”). In order to qualify for appointment as an Appraiser hereunder, an appraiser shall have no direct or indirect financial or other business interest in Team, any Class B Stockholder or the Company or any affiliate of Team, a Class B Stockholder or the Company, shall be qualified and experienced in valuing businesses which are in the same or similar business of the Company and shall be neutral and impartial. If the parties agree on an Appraiser, such Appraiser shall appraise the Company and its Subsidiaries and notify the parties within thirty (30) days after his appointment of his determination of the Appraised Value of the Company and its Subsidiaries, which notice shall be accompanied by a copy of his appraisal report. Such Appraiser’s determination of such Appraised Value shall be conclusive and binding upon the Parties for the purposes for which such determination was made. If Team and the Class B Stockholder Representative are unable to agree upon a single Appraiser within such fifteen (15) day period, then either party may call for the appointment of an Appraiser by giving notice to the other. Each such party shall then designate an appraiser within fifteen (15) days of the date of such notice. If either such party fails to designate an appraiser, the appraiser selected by the other shall be the Appraiser for purposes of this Section 3.3(d). If each such party designates an appraiser, the appraisers appointed by such parties shall select a third Appraiser within thirty (30) days after either such party calls for the appointment of an appraiser and such third appraiser shall be the Appraiser for purposes of this Section 3.3(d). The Appraiser appointed shall appraise the Company and its Subsidiaries as stated herein and notify the parties within thirty (30) days after his appointment by the designated appraisers of his determination of the Appraised Value of the Company and its Subsidiaries, which notices shall be accompanied by his appraisal report. The Appraised Value shall be the value determined by such Appraiser in accordance with Section 3.3(d) above. The determination of the Appraised Value of the Company shall be conclusive and binding upon the parties for the purposes for which such determination was made. The fees and expenses of the Appraiser shall be borne equally by (i) Team and (ii) the holders of the Class B Stock as a group. Any holder of the Class B Stock may elect to have fees and expenses paid by deduction from the value due to that holder and the failure of any such holder to pay a sum owed within sixty (60) days shall be such an election.

6

ARTICLE IV

CALCULATION OF EBITDA

Section 4.1 Calculation of Third Year EBITDA. Team shall determine the Third Year EBITDA based on its audited financial statements within 75 days following May 31, 2014 and results thereof shall be forwarded to the Class B Stockholder Representative along with a copy of such accounting records and other information as is reasonably necessary to support Team’s calculations of the Third Year EBITDA (the “Supporting Data”). During the determination or thereafter until the Third Year EBITDA amount is finally resolved, if the Class B Stockholder Representative requests, Team shall promptly provide the Class B Stockholder Representative with total and complete access to Quest Group financial and business records, subject only to a confidentially agreement of a standard form required of Team senior management. The Class B Stockholder Representative shall review the calculation of the Third Year EBITDA, and within 30 days after delivery thereof notify Team in wiring of any disagreement with such calculation. If within such 30 days following delivery the Class B Stockholder Representative does not object in writing thereto, then Team’s determination of the Third Year EBITDA shall be conclusive. If the Class B Stockholder Representative objects in writing to Team’s computation, then Team and the Class B Stockholder Representative shall negotiate in good faith and attempt to resolve their disagreement. Should such negotiations not result in an agreement within 20 days, then the matter shall be submitted to the Third Party Accountant within 15 days of such failure to agree. If the parties agree on a Third Party Accountant, such Third Party Accountant will deliver to Team and the Class B Stockholder Representative a written determination (such determination to include a worksheet setting forth all material calculations used in arriving at such determination and to be based solely on information provided to the Third Party Accountant by Team and the Class B Stockholder Representative) of the disputed items within 30 days (unless such period is extended by the consent of both Team and the Class B Stockholder Representative ) of receipt of notification of the disputed items. Such Third Party Accountant’s determination of such Third Year EBITDA shall be conclusive and binding upon the parties for the purposes for which such determination was made. If Team and the Class B Stockholder Representative are unable to agree upon a single Third Party Accountant within such fifteen (15) day period, then either such party may call for the appointment of a third party accountant by giving notice to the other. Each such party shall then designate a third party accountant within fifteen (15) days of the date of such notice. If either such party fails to designate a third party accountant, the third party accountant selected by the other shall be the Independent Accountant for purposes of this Article 4. If each such party designates a third party accountant, the third party accountants appointed by Team and the Class B Stockholder Representative shall select a third third-party accountant within thirty (30) days after either such party calls for the appointment of a third party accountant and such third third-party accountant shall be the Third Party Accountant for purposes of this Article 4. All fees and expenses relating to appointment of the Third Party Accountant and the work, if any, to be performed by the Third Party Accountant will be borne equally by (i) Team and (ii) the holders of the Class B Stock as a group. No part of the cost of the Third Party Accountant shall be charged to the Company or Quest. The Third Party Accountant will deliver to Team and the Class B Stockholder Representative a written determination (such determination to include a worksheet setting forth all material calculations used in arriving at such determination and to be based solely on information provided to the Third Party Accountant by Team and the Class B Stockholder Representative) of the disputed items within 30 days (unless such period is extended by the consent of both Team and the Class B Stockholder Representative) of receipt of notification of the disputed items. Such Third Party Accountant’s determination of such Third Year EBITDA shall be conclusive and binding upon the parties for the purposes for which such determination was made.

Section 4.2 Calculation of Fourth Year EBITDA. Within 60 days following May 31, 2015, Team and the Class B Stockholder Representative shall determine the EBITDA for the Fourth Year EBITDA in the same manner as provided in Section 4.1 above.

7

ARTICLE V

COVENANTS AND AGREEMENTS

Section 5.1 Exercise Mechanics.

(a) Exercise Limitation. Notwithstanding anything to the contrary contained herein, to the extent that the exercise of the Call Option or Put Option (upon an Acceleration Event or otherwise), together with the shares of Team Common Stock issued to the Class B Stockholders pursuant to the Purchase Agreements, will result in the Class B Stockholders beneficially owning more than 19.90% of the then outstanding Team Common Stock or voting power of Team on the Exercise Date (the “Exercise Limitation”), then the amount of shares otherwise issuable upon the exercise of such Call Option or Put Option as contemplated hereunder will be proportionately reduced so as not to exceed the Exercise Limitation.

(b) Proportional Issuance; Fractional Shares. The aggregate number of unregistered shares of Team Common Stock determined pursuant to the provisions of Article II and Article III hereof shall be issued to Class B Stockholders based on their percentage ownership of the Class B Stock. No fractional shares of Team Common Stock shall be issued pursuant to this Agreement, and no certificates or scrip for any such fractional share shall be issued. Any Class B Stockholder who would otherwise be entitled to receive a fraction of a share pursuant to this Agreement shall, in lieu of such fraction of a share, receive one full share of unregistered Team Buyer Common Stock determined by rounding up or down to the nearest whole number.

Section 5.2 Holder of Record. A Class B Stockholder shall, for all purposes, be deemed to have become the holder of record of the shares of Team Common Stock specified in the Exercise Notice on the date of delivery of such shares of Team Common Stock. Except as specifically provided herein, nothing herein shall be construed as conferring upon the holders of Class B Stock any rights as a shareholder of Team prior to the date of delivery of the shares of Team Common Stock.

Section 5.3 Restrictions on Disposition. Subject to Section 5.4, so long as shares of Class B Stock are outstanding, no Class B Stockholder shall sell, assign, transfer, give, encumber, pledge or in any other way dispose of Class B Stock (any such act is referred to herein as a “Transfer”), except as provided in this Agreement. Subject to the terms of this Agreement, the Class B Stockholders shall be entitled to exercise all rights of ownership of their Class B Stock.

Section 5.4 Expressly Permitted Transfers.

(a) Notwithstanding anything to the contrary in Section 5.3, a Class B Stockholder may Transfer any of its shares of Class B Stock or any interest therein (A) to a trust the beneficiary of which is such holder’s spouse, parents, members of his immediate family or his lineal descendants, or (B) to any other person provided that Team has consented in writing to such Transfer, which consent can be withheld at the sole discretion of Team (any such transferee pursuant to this Section 5.4(a) shall be referred to herein as a “Permitted Transferee”). Any Transfer made pursuant to this Section 5.4(a) shall be effective only if such Permitted Transferee shall agree in writing to be bound by the terms and conditions of this Agreement.

(b) In the event a Transfer of any shares of Class B Stock has taken place in violation of the provisions of this Agreement, such Transfer shall be void and of no effect, and no distribution or any kind shall be paid by the Company or Team to the transferee in respect of such shares of Class B Stock (all such dividends and distributions being deemed waived), and the voting rights of such shares of Class B Stock on any matter whatsoever shall remain vested in the transferor.

Section 5.5 Stock Legend. The stock certificates representing the Class B Stock shall contain the following legend, in addition to any other legends deemed appropriate or necessary by the Company:

THIS CERTIFICATE IS TRANSFERABLE ONLY UPON (I) COMPLIANCE WITH AND SUBJECT TO THE PROVISIONS OF THE PUT/CALL OPTION AGREEMENT DATED AS OF NOVEMBER 1, 2010,

8

BY AND AMONG TEAM, INC. AND THE STOCKHOLDERS SIGNATORIES THERETO, AND (II) THE PRIOR WRITTEN APPROVAL OF THE COMPANY. ANY TRANSFER WITHOUT SUCH COMPLIANCE AND APPROVAL SHALL BE VOID AND OF NO EFFECT. A COPY OF THE PUT/CALL OPTION AGREEMENT IS ON FILE IN THE OFFICE OF THE SECRETARY OF THE COMPANY AT ITS PRINCIPAL PLACE OF BUSINESS. THE COMPANY WILL FURNISH A COPY OF SUCH AGREEMENT TO THE RECORD HOLDER OF THIS CERTIFICATE, WITHOUT CHARGE, UPON WRITTEN REQUEST TO THE COMPANY AT ITS PRINCIPAL PLACE OF BUSINESS OR REGISTERED OFFICE.

THE SHARE REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAW AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED WITHOUT SUCH REGISTRATION UNLESS A VALID EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE AND THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL SATISFACTORY TO ITS COUNSEL THAT SUCH TRANSFER WOULD NOT VIOLATE ANY FEDERAL OR STATE SECURITIES LAW.

Section 5.6 Purchase and Sale of Class B Stock Upon Death, Bankruptcy or Involuntary Transfer. In the event a Class B Stockholder (i) dies, (ii) voluntarily or involuntarily files for bankruptcy in any court of competent jurisdiction, or (iii) has its shares of Class B Stock Transferred by operation of law or otherwise involuntarily, unless provided to the contrary in a separate agreement between Team and such Class B Stockholder, upon written notice to such Class B Stockholder, Team shall have the continuing option to exercise its Call Option with respect to the shares of Class B Stock beneficially owned by such Class B Stockholder in accordance with Article 2 hereto.

Section 5.7 No Shares with Conflicting Rights. Prior to the exercise of the Put Option or Call Option as contemplated in this Agreement, Team will not permit the Company nor any member of the Quest Group to authorize, create, issue or sell any class of capital stock with rights as to repurchase or conversion, which are superior or equal to the rights of the Class B Stock.

ARTICLE VI

MISCELLANEOUS

Section 6.1 Further Assurances. The Parties agree (a) to furnish upon request to each other such further information, (b) to execute and deliver to each other such other documents, and (c) to do such other acts and things, all as the other Party may reasonably request for the purpose of carrying out the intent of this Agreement and the documents referred to in this Agreement.

Section 6.2 Amendments and Waivers. No amendment or waiver of any provision of this Agreement shall be valid unless in writing and signed by the Party to be charged with such amendment or waiver. No waiver by any Party of any default, misrepresentation, or breach of warranty or covenant hereunder, whether intentional or not, shall be deemed to extend to any prior or subsequent default, misrepresentation, or breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence.

Section 6.3 Notices. All notices permitted or required to be given pursuant to this Agreement shall be given (and will be deemed to have been duly given, if given) by hand delivery, courier service, facsimile, email, or mailed by registered or certified mail, postage prepaid, return receipt requested:

If to the Class B Stockholders :

If to the Class B Stockholders :

Milton J. Altenberg

19823 58th Place South, Suite 100

Kent, Washington 98032

Facsimile: (253) 872-8967

Email Address: Altenberg1@cs.com

9

and:

Jeffrey L. Ott

8 Mariposa Court

Tiburon, California 94920

Facsimile:                             

Email Address: j.ott@questintegrity.com

If to Team:

13131 Dairy Ashford, Suite 600

Sugar Land, Texas 77478

Facsimile: (281) 388-5583

Email Address: Butch.Bouchard@TeamInc.com

Attention: Butch Bouchard

Notice given by personal delivery, courier service or mail shall be effective upon actual receipt. Notice given by facsimile shall be confirmed by appropriate answer back and shall be effective upon actual receipt if receipt is received during the recipient’s normal business hours, or at the beginning of the recipient’s next Business Day after if not received during the recipient’s normal business hours. Any party may change any address to which notice is to be given to it by giving notice as provided above of such change of address.

Section 6.4 Entire Agreement. This Agreement supersedes all prior agreements between the Parties with respect to its subject matter and constitutes (along with the documents referred to in this Agreement) a complete and exclusive statement of the terms of the agreement between the Parties with respect to its subject matter.

Section 6.5 Assignments, Successors, and No Third-Party Rights. No Party may assign any of its rights under this Agreement without the prior consent of the other Parties, which will not be unreasonably withheld. Subject to the preceding sentence, this Agreement will apply to, be binding in all respects upon, and inure to the benefit of the successors and permitted assigns of the Parties. Nothing expressed or referred to in this Agreement will be construed to give any person or entity other than the Parties to this Agreement any legal or equitable right, remedy or claim under or with respect to this Agreement or any provision of this Agreement.

Section 6.6 CONSENT TO JURISDICTION. ALL ACTIONS HEREUNDER MUST BE BROUGHT IN THE FEDERAL COURTS IN AND FOR THE SOUTHERN DISTRICT OF TEXAS WITHOUT REGARD TO ANY PRESENT OR FUTURE DOMICILE OR PRINCIPAL PLACE OF BUSINESS OF THE PARTIES. IF SUCH COURTS DO NOT HAVE JURISDICTION FOR ANY REASON, THEN ALL ACTIONS HEREUNDER MUST BE BROUGHT IN THE STATE COURTS LOCATED IN HARRIS COUNTY, TEXAS. BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH PARTY IRREVOCABLY SUBMITS TO THE JURISDICTION OF SUCH COURTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY WITH RESPECT TO SUCH ACTION. THE PARTIES IRREVOCABLY AGREE THAT VENUE WOULD BE PROPER IN SUCH COURTS, AND HEREBY WAIVE ANY OBJECTION THAT SUCH COURT IS AN IMPROPER OR INCONVENIENT FORUM FOR THE RESOLUTION OF SUCH ACTION. THE PARTIES HERETO HEREBY IRREVOCABLY WAIVE THE RIGHT TO TRIAL BY JURY IN ANY ACTION TO ENFORCE OR INTERPRET THE PROVISIONS OF THIS AGREEMENT.

Section 6.7 Governing Law. This Agreement and the performance of the Transactions and obligations of the Parties hereunder will be governed by and construed in accordance with the laws of the State of Texas, without giving effect to any choice of Law principles.

Section 6.8 Severability. Any term of this Agreement which would be invalid or unenforceable as written shall be deemed limited in scope and/or duration to the extent necessary to render it enforceable. The determination of any court that any provision is invalid or unenforceable shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity of the offending term or provision in any other situation or in any other jurisdiction.

10

Section 6.9 Construction. Wherever the context so permits, the use of words in this Agreement in the masculine, feminine or neuter gender shall be construed to include all of such genders. All references to articles, sections, subsections, or subparagraphs are to provisions of this Agreement unless the context dictates otherwise.

Section 6.10 Successors. All of the terms, agreements, covenants and conditions of this Agreement are binding upon, and inure to the benefit of and are enforceable by, the Parties and their respective successors. If a Company Member is an entity and if the principal business, operations or a majority or substantial portion of the assets of such Company Member are assigned, conveyed, allocated or otherwise transferred, including by sale, merger, consolidation, amalgamation, conversion or similar transactions, such receiving person or entity shall automatically become bound by and subject to the provisions of this Agreement, and such Company Member shall cause the receiving person or entity to expressly assume its obligations hereunder.

Section 6.11 Delivery by PDF and Facsimile. This Agreement and any other Transaction Document, and any amendments hereto or thereto, to the extent signed and delivered by means of portable document format (“PDF”) or a facsimile machine, shall be treated in all manner and respects as an original Contract and shall be considered to have the same binding legal effects as if it were the original signed version thereof delivered in person. At the request of any Party hereto or to any such Contract, each other Party hereto or thereto shall re-execute original forms thereof and deliver them to all other Parties. No Party hereto or to any such Contract shall raise the use of PDF or a facsimile machine to deliver a signature or the fact that any signature or Contract was transmitted or communicated through the use of PDF or a facsimile machine as a defense to the formation of a Contract and each such Party forever waives any such defense.

[Signature Pages Follow]

11

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first above written.

TEAM, INC.
By:
	André C. Bouchard
	Senior Vice President, Administration, General Counsel & Secretary

CLASS B STOCKHOLDER

Printed Name:

12

EXHIBIT B

EXERCISE NOTICE

If exercise of Put Option:

NOTICE OF EXERCISE OF PUT OPTION

To Team, Inc.:

Date:                                 

The undersigned Class B Stockholder Representative hereby irrevocably exercises its option to cause the Company to purchase 5,050 shares of Class B Common Stock of TQ Acquisition, Inc. beneficially held by the Class B Stockholders for unregistered shares of the common stock, par value $0.30 per share, of Team, Inc., in accordance with Article III of the Put/Call Option Agreement dated November 1, 2010, as amended.

Class B Stockholder Representative:

By:                                                                                           

Name:                                                                                     

Title:                                                                                       

If exercise of Call Option:

NOTICE OF EXERCISE OF CALL OPTION

To                             

Date:                                         

Team, Inc., a Delaware corporation, hereby irrevocably gives notice to                          (the “Class B Stockholder Representative”) of the exercise of its option to purchase 5,050 shares of Class B Common Stock of TQ Acquisition, Inc., a Texas corporation, for unregistered shares of the common stock, par value $0.30 per share, of Team, Inc., in accordance with Article II of the Put/Call Option Agreement dated November 1, 2010, as amended.

TEAM, INC.

By:                                                                                           

Name:                                                                                     

Title:                                                                                       

EX-31.1

Exhibit 31.1

I, Philip J. Hawk, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Team, Inc., (“Team”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. Team’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for Team and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to Team, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of Team’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in Team’s internal control over financial reporting that occurred during Team’s most recent fiscal quarter (Team’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, Team’s internal control over financial reporting; and

5. Team’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to Team’s auditors and audit committee of Team’s board of directors:

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect Team’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in Team’s internal control over financial reporting.

Date: April 8, 2014

/S/     PHILIP J. HAWK

Philip J. Hawk

Chairman and Chief Executive Officer

EX-31.2

Exhibit 31.2

I, Ted W. Owen, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Team, Inc., (“Team”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. Team’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for Team and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to Team, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of Team’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in Team’s internal control over financial reporting that occurred during Team’s most recent fiscal quarter (Team’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, Team’s internal control over financial reporting; and

5. Team’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to Team’s auditors and audit committee of Team’s board of directors:

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect Team’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in Team’s internal control over financial reporting.

Date: April 8, 2014

/S/     TED W. OWEN

Ted W. Owen

Executive Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Team, Inc. (the Company) on Form 10-Q for the period ended February 28, 2014, as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Philip J. Hawk, Chairman and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/S/     PHILIP J. HAWK

Philip J. Hawk

Chairman and Chief Executive Officer

April 8, 2014

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Team, Inc. (the Company) on Form 10-Q for the period ended February 28, 2014, as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Ted W. Owen, Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/S/     TED W. OWEN

Ted W. Owen

Executive Vice President and Chief Financial Officer

April 8, 2014

XML

Information Regarding Change in Carrying Value of Non-Controlling Interest (Detail) (USD $) In Thousands, unless otherwise specified	40 Months Ended
	Feb. 28, 2014	May 31, 2013
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair value of non-controlling interest at November 3, 2010	$ 4,917	$ 5,384
Income attributable to non-controlling interest	652
Other comprehensive income attributable to non-controlling interest	(12)
Carrying value of non-controlling interest at February 28, 2014	$ 5,557	$ 5,384

XML

Share-Based Compensation - Additional Information (Detail) (USD $) In Millions, except Share data, unless otherwise specified	9 Months Ended
	Feb. 28, 2014	Feb. 28, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Awards outstanding to officers, directors and key employees	1,200,000
Total number of shares cumulatively authorized to be issued under our stock incentive plans	7,120,000
Share-based compensation	$ 3.2	$ 3.0
Tax benefit related to share-based compensation	1.1	3.0
Unrecognized compensation expense related to share-based compensation	9.7
Remaining weighted-average period	2 years 10 months 24 days
Weighted-average remaining contractual life of Options exercisable	2 years 7 months 6 days
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation	0	0
Award vesting period	4 years
Stock option year term	10 years
Performance Shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation	0.4	0.4
Award vesting period	4 years
Stock And Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation	$ 2.8	$ 2.6
Award vesting period	4 years

XML

Intangible Assets - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended
	Feb. 28, 2014	Feb. 28, 2013	Feb. 28, 2014	Feb. 28, 2013
Finite-Lived Intangible Assets [Line Items]
Amortization expense	$ 0.9	$ 0.8	$ 2.8	$ 2.5

XML

Summary of Transactions Involving Stock Options (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	9 Months Ended
	Feb. 28, 2014	Feb. 28, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares under option, beginning of period, No. of Options	1,052	1,562
Granted, No. of Options
Exercised, No. of Options	(195)	(508)
Cancelled, No. of Options
Expired, No. of Options
Shares under option, end of period, No. of Options	857	1,054
Exercisable at end of period, No. of Options	857	1,054
Shares under option, beginning of period, Weighted Average Exercise Price	$ 20.24	$ 18.95
Granted, Weighted Average Exercise Price
Exercised, Weighted Average Exercise Price	$ 24.48	$ 16.23
Cancelled, Weighted Average Exercise Price
Expired, Weighted Average Exercise Price
Shares under option, end of period, Weighted Average Exercise Price	$ 19.28	$ 20.25
Exercisable at end of period, Weighted Average Exercise Price	$ 19.28	$ 20.25

XML

Assets Held for Sale - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	Feb. 28, 2014 acre
Property, Plant, and Equipment Disclosure [Line Items]
Land Available for Sale	$ 5.2
Purchase land planned to construct future facilities in area	50

XML

SHARE-BASED COMPENSATION (Tables)

9 Months Ended

Feb. 28, 2014

Transactions Involving Stock Options

Transactions involving our stock options during the nine months ended February 28, 2014 and 2013 are summarized below:

	Nine Months Ended February 28, 2014					Nine Months Ended February 28, 2013
	(unaudited)					(unaudited)
	No. of Options			Weighted Average Exercise Price		No. of Options			Weighted Average Exercise Price
	(in thousands)					(in thousands)
Shares under option, beginning of period		1,052		$	20.24		1,562		$	18.95
Changes during the period:
Granted		—		$	—		—		$	—
Exercised		(195	)	$	24.48		(508	)	$	16.23
Cancelled		—		$	—		—		$	—
Expired		—		$	—		—		$	—
Shares under option, end of period		857		$	19.28		1,054		$	20.25
Exercisable at end of period		857		$	19.28		1,054		$	20.25

Options Outstanding, Range of Exercise Prices and Remaining Contractual Lives

For total options outstanding at February 28, 2014, the range of exercise prices and remaining contractual lives are as follows:

Range of Prices	No. of Options		Weighted Average Exercise Price		Weighted Average Remaining Life
	(in thousands)				(in years)
$6.42 to $9.62		105	$	9.00		1.2
$9.63 to $12.82		152	$	11.11		1.9
$12.83 to $16.03		264	$	14.51		2.3
$16.04 to $32.05		336	$	29.94		3.6
		857	$	19.28		2.6

Transactions Involving Performance Awards

Transactions involving our performance awards during the nine months ended February 28, 2014 and 2013 are summarized below:

	Nine Months Ended February 28, 2014					Nine Months Ended February 28, 2013
	(unaudited)					(unaudited)
	No. of Performance Awards			Weighted Average Fair Value		No. of Performance Awards			Weighted Average Fair Value
	(in thousands)					(in thousands)
Performance awards, beginning of period		57		$	25.45		65		$	21.86
Changes during the period:
Granted		17		$	36.40		19		$	32.89
Vested and settled		(24	)	$	22.65		(27	)	$	22.04
Cancelled		—		$	—		—		$	—
Performance awards, end of period		50		$	30.63		57		$	25.45

Transactions Involving Stock Units and Director Stock Grants

Transactions involving our stock units and director stock grants during the nine months ended February 28, 2014 and 2013 are summarized below:

	Nine Months Ended February 28, 2014					Nine Months Ended February 28, 2013
	(unaudited)					(unaudited)
	No. of Stock Units			Weighted Average Fair Value		No. of Stock Units			Weighted Average Fair Value
	(in thousands)					(in thousands)
Stock and stock units, beginning of period		329		$	26.07		342		$	21.73
Changes during the period:
Granted		136		$	36.71		141		$	32.81
Vested and settled		(138	)	$	24.34		(142	)	$	22.54
Cancelled		(16	)	$	27.94		(8	)	$	22.40
Stock and stock units, end of period		311		$	31.39		333		$	26.07

XML

Summary of Transactions Involving Performance Awards (Detail) (Performance Shares, USD $) In Thousands, except Per Share data, unless otherwise specified	9 Months Ended
	Feb. 28, 2014	Feb. 28, 2013
Performance Shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Performance awards, beginning of year, No. of Performance Awards	57	65
Granted, No. of Performance Awards	17	19
Vested and settled, No. of Performance Awards	(24)	(27)
Cancelled, No. of Performance Awards
Performance awards, end of year, No. of Performance Awards	50	57
Performance awards, beginning of year, Weighted Average Fair Value	$ 25.45	$ 21.86
Granted, Weighted Average Fair Value	$ 36.40	$ 32.89
Vested and settled, Weighted Average Fair Value	$ 22.65	$ 22.04
Cancelled, Weighted Average Fair Value
Performance awards, end of year, Weighted Average Fair Value	$ 30.63	$ 25.45

XML

PROPERTY, PLANT AND EQUIPMENT (Tables)

9 Months Ended

Feb. 28, 2014

Property, Plant and Equipment

Depreciation and amortization of assets are computed by the straight-line method over the following estimated useful lives of the assets:

Classification	Useful Life
Buildings		20-40 years
Leasehold improvements		2-15 years
Machinery and equipment		2-12 years
Furniture and fixtures		2-10 years
Computers and computer software		2-5 years
Automobiles		2-5 years

Property, Plant and Equipment

Property, Plant and Equipment

A summary of property, plant and equipment as of February 28, 2014 and May 31, 2013 is as follows (in thousands):

	February 28, 2014			May 31, 2013
	(unaudited)
Land	$	3,067		$	3,108
Buildings and leasehold improvements		19,345			18,445
Machinery and equipment		148,120			137,439
Furniture and fixtures		4,809			4,469
Capitalized ERP system development costs		2,677			—
Computers and computer software		9,581			8,871
Automobiles		3,660			3,842
Construction in progress		11,196			3,816
Total		202,455			179,990
Accumulated depreciation and amortization		(117,063	)		(105,051	)
Property, plant, and equipment, net	$	85,392		$	74,939

XML

Long-Term Debt, Derivatives and Letters of Credit - Additional Information (Detail) In Millions, unless otherwise specified	12 Months Ended			9 Months Ended	12 Months Ended
	May 31, 2012 USD ($)	Feb. 28, 2014 Economic Hedge USD ($)	Feb. 28, 2014 Economic Hedge EUR (€)	Feb. 28, 2014 Eurodollar Libor Rate	May 31, 2012 Eurodollar Libor Rate	Feb. 28, 2014 Standby Letters of Credit USD ($)	May 31, 2013 Standby Letters of Credit USD ($)
Line of Credit Facility [Line Items]
Borrowing capacity	$ 150
Basis spread on LIBOR Rate				1.75%
Maturity period	July 2016
Debt issuance costs	0.8
Commitment fees on unused borrowing capacity					0.30%
Outstanding letter of credit						13.6	13.1
Borrowing under credit facility		$ 16.9	€ 12.3

XML

Summary of Accounts Receivable (Detail) (USD $) In Thousands, unless otherwise specified	Feb. 28, 2014	May 31, 2013
Accounts, Notes, Loans and Financing Receivable [Line Items]
Unbilled revenues	$ 28,186	$ 25,516
Allowance for doubtful accounts	(5,343)	(5,438)
Total	157,988	172,108
Trade accounts receivable
Accounts, Notes, Loans and Financing Receivable [Line Items]
Trade accounts receivable	$ 135,145	$ 152,030

XML

Summary of Significant Accounting Policies and Practices - Additional Information (Detail) (USD $)	3 Months Ended		9 Months Ended
	Feb. 28, 2014	Feb. 28, 2013	Feb. 28, 2014	Feb. 28, 2013	Jul. 01, 2013	May 31, 2013	Nov. 03, 2010 Quest Integrity
Significant Accounting Policies [Line Items]
Excess of Market capitalization over carrying value of net assets					$ 500,000,000
Excess of Market capitalization over carrying value of net assets, percentage					170.00%
Goodwill	114,114,000		114,114,000			103,466,000
Purchase percentage of quest							95.00%
Remaining purchase consideration based upon future financial performance							5.00%
Deferred tax assets recovery from future taxable income percentage			50.00%
Workers compensation our self-insured retention			1,000,000
Automobile liability self-insured retention			500,000
General liability claims we have an effective self-insured retention			3,000,000
Medical claims, our self-insured retention			175,000
Environmental liability claims, our self-insured retention			500,000
Amount of earned but unbilled revenue included in accounts receivable	$ 28,186,000		$ 28,186,000			$ 25,516,000
Single customer accounts consolidated revenue			10.00%
Options to purchase shares of common stock excluded from the computation of diluted earnings per share	0	0	0	1,000

XML

Fair Value Totals and Balance Sheet Classification for Derivatives Designated as Hedges (Detail) (Long-term Debt, Designated as Hedging Instrument, Euro denominated long-term debt, USD $) In Thousands, unless otherwise specified	Feb. 28, 2014	May 31, 2013
Long-term Debt | Designated as Hedging Instrument | Euro denominated long-term debt
Derivatives, Fair Value [Line Items]
Fair value liability	$ 1,148	$ 2,004

XML

Repurchase of Common Stock - Additional Information (Detail) (USD $) In Millions, except Share data, unless otherwise specified	1 Months Ended	6 Months Ended	9 Months Ended
	Oct. 31, 2013	Nov. 30, 2013	Feb. 28, 2014
Equity, Class of Treasury Stock [Line Items]
Stock Repurchase Program, Authorized Amount	$ 25
Stock Repurchased and Retired During Period, Shares		369,900	0
Stock Repurchased and Retired During Period, Value			13.3
Prior Periods
Equity, Class of Treasury Stock [Line Items]
Stock Repurchased and Retired During Period, Shares			89,569
Stock Repurchased and Retired During Period, Value			1.3
Share Repurchase Plan | Common Stock
Equity, Class of Treasury Stock [Line Items]
Common stock share purchase, reduction			0.1
Share Repurchase Plan | Additional Paid-in Capital
Equity, Class of Treasury Stock [Line Items]
Common stock share purchase, reduction			2.2
Share Repurchase Plan | Retained Earnings
Equity, Class of Treasury Stock [Line Items]
Common stock share purchase, reduction			$ 12.3

XML

Commitments and Contingencies - Additional Information (Detail) (USD $)	Feb. 28, 2014
Commitments and Contingencies Disclosure [Line Items]
Insurance coverage subject to deductible limit	$ 250,000

XML

Summary of Intangible Assets (Detail) (USD $) In Thousands, unless otherwise specified	Feb. 28, 2014	May 31, 2013
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 36,105	$ 34,989
Accumulated Amortization	(11,715)	(9,039)
Net Carrying Amount	24,390	25,950
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	22,355	21,418
Accumulated Amortization	(6,059)	(4,168)
Net Carrying Amount	16,296	17,250
Non-compete agreements
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	3,630	3,701
Accumulated Amortization	(3,352)	(3,232)
Net Carrying Amount	278	469
Trade names
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	4,325	4,075
Accumulated Amortization	(641)	(424)
Net Carrying Amount	3,684	3,651
Technology
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	5,112	5,112
Accumulated Amortization	(1,565)	(1,166)
Net Carrying Amount	3,547	3,946
Licenses
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	683	683
Accumulated Amortization	(98)	(49)
Net Carrying Amount	$ 585	$ 634

XML

RECEIVABLES

9 Months Ended

Feb. 28, 2014

RECEIVABLES

3. RECEIVABLES

A summary of accounts receivable as of February 28, 2014 and May 31, 2013 is as follows (in thousands):

	February 28, 2014			May 31, 2013
	(unaudited)
Trade accounts receivable	$	135,145		$	152,030
Unbilled revenues		28,186			25,516
Allowance for doubtful accounts		(5,343	)		(5,438	)
Total	$	157,988		$	172,108

XML

Entity Wide Disclosures - Additional Information (Detail)	9 Months Ended
	Feb. 28, 2014 Segment
Segment Reporting Information [Line Items]
Number of operating segments	3

XML

Summary of Inventory (Detail) (USD $) In Thousands, unless otherwise specified	Feb. 28, 2014	May 31, 2013
Inventory [Line Items]
Raw materials	$ 3,056	$ 3,460
Work in progress	893	845
Finished goods	22,355	22,202
Inventory, Net	$ 26,304	$ 26,507

XML

INTANGIBLE ASSETS (Tables)

9 Months Ended

Feb. 28, 2014

Summary of Intangible Assets

A summary of intangible assets as of February 28, 2014 and May 31, 2013 is as follows (in thousands):

	February 28, 2014							May 31, 2013
	(unaudited)
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Customer relationships	$	22,355	$	(6,059	)	$	16,296	$	21,418	$	(4,168	)	$	17,250
Non-compete agreements		3,630		(3,352	)		278		3,701		(3,232	)		469
Trade names		4,325		(641	)		3,684		4,075		(424	)		3,651
Technology		5,112		(1,565	)		3,547		5,112		(1,166	)		3,946
Licenses		683		(98	)		585		683		(49	)		634
Total	$	36,105	$	(11,715	)	$	24,390	$	34,989	$	(9,039	)	$	25,950

XML

INVENTORY (Tables)

9 Months Ended

Feb. 28, 2014

Summary of Inventory

A summary of inventory as of February 28, 2014 and May 31, 2013 is as follows (in thousands):

	February 28, 2014		May 31, 2013
	(unaudited)
Raw materials	$	3,056	$	3,460
Work in progress		893		845
Finished goods		22,355		22,202
Total	$	26,304	$	26,507

XML

Total Options Outstanding, Range of Exercise Prices and Remaining Contractual Lives (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	6 Months Ended
	Nov. 30, 2013
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
No. of Options	857
Weighted Average Exercise Price	$ 19.28
Weighted Average Remaining Life	2 years 7 months 6 days
$6.42 to $9.62
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of Prices, Lower limit	$ 6.42
Range of Prices, Upper limit	$ 9.62
No. of Options	105
Weighted Average Exercise Price	$ 9.00
Weighted Average Remaining Life	1 year 2 months 12 days
$9.63 to $12.82
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of Prices, Lower limit	$ 9.63
Range of Prices, Upper limit	$ 12.82
No. of Options	152
Weighted Average Exercise Price	$ 11.11
Weighted Average Remaining Life	1 year 10 months 24 days
$12.83 to $16.03
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of Prices, Lower limit	$ 12.83
Range of Prices, Upper limit	$ 16.03
No. of Options	264
Weighted Average Exercise Price	$ 14.51
Weighted Average Remaining Life	2 years 3 months 18 days
$16.04 to $32.05
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of Prices, Lower limit	$ 16.04
Range of Prices, Upper limit	$ 32.05
No. of Options	336
Weighted Average Exercise Price	$ 29.94
Weighted Average Remaining Life	3 years 7 months 6 days

XML

Summary of Property, Plant and Equipment (Detail) (USD $) In Thousands, unless otherwise specified	Feb. 28, 2014	May 31, 2013
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	$ 202,455	$ 179,990
Accumulated depreciation and amortization	(117,063)	(105,051)
Property, plant, and equipment, net	85,392	74,939
Land
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	3,067	3,108
Buildings and leasehold improvements
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	19,345	18,445
Machinery and equipment
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	148,120	137,439
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	4,809	4,469
Capitalized ERP System Development Costs
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	2,677
Computers and computer software
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	9,581	8,871
Automobiles
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	3,660	3,842
Construction in progress
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	$ 11,196	$ 3,816

XML

OTHER ACCRUED LIABILITIES (Tables)

9 Months Ended

Feb. 28, 2014

Summary of Other Accrued Liabilities

A summary of other accrued liabilities as of February 28, 2014 and May 31, 2013 is as follows (in thousands):

	February 28, 2014		May 31, 2013
	(unaudited)
Payroll and other compensation expenses	$	22,806	$	32,093
Insurance accruals		5,330		5,385
Property, sales and other non-income related taxes		1,650		2,385
Other		9,474		9,302
Total	$	39,260	$	49,165

XML

LONG-TERM DEBT, DERIVATIVES AND LETTERS OF CREDIT (Tables)

9 Months Ended

Feb. 28, 2014

Amounts Recognized In Other Comprehensive Income, and Reclassified Into Income

The amounts recognized in other comprehensive income, and reclassified into income, for the three and nine months ended February 28, 2014 and 2013, are as follows (in thousands):

	Gain (Loss) Recognized in Other Comprehensive Income						Gain (Loss) Reclassified from Other Comprehensive Income to Earnings				Gain (Loss) Recognized in Other Comprehensive Income						Gain (Loss) Reclassified from Other Comprehensive Income to Earnings
	Three Months Ended February 28,						Three Months Ended February 28,				Nine Months Ended February 28,						Nine Months Ended February 28,
	(unaudited)						(unaudited)				(unaudited)						(unaudited)
	2014			2013			2014		2013		2014			2013			2014		2013
Euro denominated long-term debt	$	(94	)	$	(143	)	$	—	$	—	$	(856	)	$	(791	)	$	—	$	—

Fair Value Totals and Balance Sheet Classification for Derivatives Designated As Hedges

The following table presents the fair value totals and balance sheet classification for derivatives designated as hedges under ASC 815 (in thousands):

February 28, 2014

May 31, 2013

(unaudited)

Classification

Balance Sheet Location

Fair Value

Classification

Balance Sheet Location

Fair Value

Euro denominated long-term debt

Liability

Long-term debt

$

1,148

Liability

Long-term debt

$

2,004

XML

ACQUISITIONS

9 Months Ended

Feb. 28, 2014

ACQUISITIONS

2. ACQUISITIONS

In July 2013, we purchased a leading provider of industrial rope access services, for a total consideration of approximately $13.8 million including $12.6 million allocated to goodwill and intangible assets. In September 2012, we purchased TCI Services, Inc. (“TCI”), a leading provider of inspection and repair services of above ground storage tanks. The TCI acquisition included total consideration of approximately $21.2 million, including $16.4 million allocated to goodwill and intangible assets. The purchase price included contingent consideration which we revalued during the second quarter of fiscal year 2014, resulting in the recognition of a non-cash gain of $2.1 million.

In the fiscal year ended May 31, 2013, we also purchased a specialty remote digital video inspection company in New Zealand for approximately $3.0 million in cash.

XML

FAIR VALUE MEASUREMENTS (Tables)

9 Months Ended

Feb. 28, 2014

Fair Value of Assets and Liabilities Measured on Recurring Basis

The following table sets forth, by level within the fair value hierarchy, our financial assets and liabilities that are accounted for at fair value on a recurring basis as of February 28, 2014. As required by ASC 820, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement (in thousands):

	February 28, 2014
	(unaudited)
	Quoted Prices in Active Markets for Identical Items (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Liabilities:
Contingent consideration	$	—	$	—	$	2,982	$	2,982
Euro denominated long-term debt		—		1,148		—		1,148
Total liabilities	$	—	$	1,148	$	2,982	$	4,130

	May 31, 2013
	Quoted Prices in Active Markets for Identical Items (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Liabilities:
Contingent consideration	$	—	$	—	$	2,047	$	2,047
Euro denominated long-term debt		—		2,004		—		2,004
Total liabilities	$	—	$	2,004	$	2,047	$	4,051

XML

Amounts Used In Basic and Diluted Earnings Per Share (Detail) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Feb. 28, 2014	Feb. 28, 2013	Feb. 28, 2014	Feb. 28, 2013
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
Weighted-average number of basic shares outstanding	20,384	20,387	20,432	20,104
Stock options, stock units and performance awards	614	753	643	770
Assumed conversion of non-controlling interest	195	171	209	204
Total shares and dilutive securities	21,193	21,311	21,284	21,078

XML

Financial Assets and Liabilities that are Accounted For at Fair Value on Recurring Basis (Detail) (Fair Value, Measurements, Recurring, USD $) In Thousands, unless otherwise specified	Feb. 28, 2014	May 31, 2013
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Net liabilities	$ 4,130	$ 4,051
Contingent Consideration Liabilities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Net liabilities	2,982	2,047
Euro denominated long-term debt
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Net liabilities	1,148	2,004
Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Net liabilities	1,148	2,004
Significant Other Observable Inputs (Level 2) | Euro denominated long-term debt
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Net liabilities	1,148	2,004
Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Net liabilities	2,982	2,047
Significant Unobservable Inputs (Level 3) | Contingent Consideration Liabilities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Net liabilities	$ 2,982	$ 2,047

XML

Condensed Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Feb. 28, 2014	May 31, 2013
Current assets:
Cash and cash equivalents	$ 39,501	$ 34,201
Receivables, net of allowance of $5,343 and $5,438	157,988	172,108
Inventory	26,304	26,507
Deferred income taxes	4,474	5,321
Prepaid expenses and other current assets	7,133	8,781
Total current assets	235,400	246,918
Property, plant and equipment, net	85,392	74,939
Assets held for sale	5,207	5,207
Intangible assets, net of accumulated amortization of $11,715 and $9,039	24,390	25,950
Goodwill	114,114	103,466
Other assets, net	974	2,907
Deferred income taxes	2,020	816
Total assets	467,497	460,203
Current liabilities:
Accounts payable	20,419	22,411
Other accrued liabilities	39,260	49,165
Income taxes payable	516	1,228
Deferred income taxes	411
Total current liabilities	60,606	72,804
Deferred income taxes	15,408	17,166
Long-term debt	83,602	72,946
Other long-term liabilities	5,389	5,097
Total liabilities	165,005	168,013
Commitments and contingencies
Equity:
Preferred stock, 500,000 shares authorized, none issued
Common stock, par value $0.30 per share, 60,000,000 and 30,000,000 shares authorized; 20,439,476 and 20,587,808 shares issued	6,132	6,176
Additional paid-in capital	104,322	99,278
Retained earnings	190,102	184,485
Accumulated other comprehensive loss	(3,621)	(1,789)
Treasury stock at cost, 0 and 89,569 shares		(1,344)
Total Team shareholders' equity	296,935	286,806
Non-controlling interest	5,557	5,384
Total equity	302,492	292,190
Total liabilities and equity	$ 467,497	$ 460,203

XML

Property, Plant and Equipment - Additional Information (Detail) (USD $)				6 Months Ended
	Feb. 28, 2014	May 31, 2013	Feb. 28, 2014 Alvin Texas	Nov. 30, 2013 Capitalized ERP System Development Costs	Feb. 28, 2014 Capitalized ERP System Development Costs	Nov. 30, 2013 Capitalized ERP System Development Costs Minimum	Nov. 30, 2013 Capitalized ERP System Development Costs Maximum
Property, Plant and Equipment [Line Items]
Expected total future capital costs associated with the implementation						$ 10,000,000	$ 12,000,000
Project implementation period				2 years
Construction in progress, costs	202,455,000	179,990,000	7,400,000		2,677,000
Estimated cost of project			$ 9,000,000

XML

Condensed Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Feb. 28, 2014	Feb. 28, 2013
Cash flows from operating activities:
Net income	$ 18,103	$ 21,128
Adjustments to reconcile net income to net cash provided by operating activities:
Earnings from unconsolidated affiliates	(822)	(862)
Depreciation and amortization	15,976	14,454
Amortization of deferred loan costs	167	167
Foreign currency loss	2,398	917
Deferred income taxes	192	5,475
Gain on contingent consideration revaluation	(2,138)
Write-down on fixed assets		73
Gain on asset sale	(77)
Non-cash compensation cost	3,205	3,022
(Increase) decrease:
Receivables	13,431	6,675
Inventory	75	(1,675)
Prepaid expenses and other current assets	1,577	2,596
Increase (decrease):
Accounts payable	(1,598)	(3,528)
Other accrued liabilities	(10,505)	(2,796)
Income taxes	(469)	(7,430)
Net cash provided by operating activities	39,515	38,216
Cash flows from investing activities:
Capital expenditures	(23,758)	(18,803)
Business acquisitions, net of cash acquired	(10,175)	(18,589)
Proceeds from sale of assets	204	15
Distributions from joint venture	174	1,000
Decrease in other assets, net	3	55
Net cash used in investing activities	(33,552)	(36,322)
Cash flows from financing activities:
Net borrowings under revolving credit agreement	9,800	2,400
Corporate tax effect from share-based payment arrangements	1,092	3,002
Issuance of common stock from share-based payment arrangements	4,765	8,242
Payments related to withholding tax for share-based payment arrangements	(1,692)	(1,517)
Payments related to purchase of treasury stock	(13,334)
Net cash provided by financing activities	631	12,127
Effect of exchange rate changes on cash	(1,294)	(76)
Net increase in cash and cash equivalents	5,300	13,945
Cash and cash equivalents at beginning of period	34,201	22,477
Cash and cash equivalents at end of period	$ 39,501	$ 36,422

XML

Summary of Changes in Other Comprehensive Income Included Within Shareholders Equity (Detail) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Feb. 28, 2014	Feb. 28, 2013
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance, beginning of period	$ (1,789)	$ (2,587)
Other comprehensive income before tax	(1,837)	1,732
Non-controlling interest	5	(23)
Balance, end of period	(3,621)	(878)
Foreign Currency Translation Adjustments
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance, beginning of period	(3,532)	(4,593)
Other comprehensive income before tax	(2,925)	2,305
Non-controlling interest	5	(23)
Balance, end of period	(6,452)	(2,311)
Foreign Currency Hedges
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance, beginning of period	2,004	2,678
Other comprehensive income before tax	(856)	(791)
Balance, end of period	1,148	1,887
Tax Provision
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance, beginning of period	(261)	(672)
Other comprehensive income before tax	1,944	218
Balance, end of period	$ 1,683	$ (454)

XML

ENTITY WIDE DISCLOSURES (Tables)

9 Months Ended

Feb. 28, 2014

Segment Data for our Three Operating Segment

Segment data for our three operating segments are as follows (in thousands):

	Three Months Ended						Nine Months Ended
	February 28, 2014			February 28, 2013			February 28, 2014			February 28, 2013
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
Revenues:
IHT	$	85,149		$	81,227		$	290,409		$	272,372
MS		63,440			59,513			200,196			201,011
Quest		14,647			10,235			47,435			39,732
Total	$	163,236		$	150,975		$	538,040		$	513,115
	Three Months Ended						Nine Months Ended
	February 28, 2014			February 28, 2013			February 28, 2014			February 28, 2013
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
Operating income:
IHT	$	3,783		$	4,439		$	31,666		$	30,411
MS		2,939			3,346			17,120			21,049
Quest		1,170			(62	)		5,986			5,944
Corporate and shared support services		(6,892	)		(7,114	)		(21,786	)		(20,931	)
Total	$	1,000		$	609		$	32,986		$	36,473
	Three Months Ended						Nine Months Ended
	February 28, 2014			February 28, 2013			February 28, 2014			February 28, 2013
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
Capital expenditures:
IHT	$	2,187		$	1,398		$	5,602		$	6,253
MS		1,503			1,654			4,694			6,266
Quest		582			2,439			3,257			3,840
Corporate and shared support services		5,867			658			10,205			2,444
Total	$	10,139		$	6,149		$	23,758		$	18,803

	Three Months Ended				Nine Months Ended
	February 28, 2014		February 28, 2013		February 28, 2014		February 28, 2013
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Depreciation and amortization:
IHT	$	1,936	$	1,866	$	5,947	$	5,704
MS		1,801		1,771		5,391		5,165
Quest		1,343		1,038		4,033		3,193
Corporate and shared support services		205		125		605		392
Total	$	5,285	$	4,800	$	15,976	$	14,454

Segment Reporting of Revenues and Total Assets

Revenues and total assets in the United States and other countries are as follows (in thousands):

	Three Months Ended				Nine Months Ended
	February 28, 2014		February 28, 2013		February 28, 2014		February 28, 2013
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Revenues:
United States	$	120,916	$	116,155	$	382,322	$	366,397
Canada		22,267		19,946		93,621		98,647
Europe		10,448		8,220		31,079		23,586
Other foreign countries		9,605		6,654		31,018		24,485
Total	$	163,236	$	150,975	$	538,040	$	513,115

	February 28, 2014		May 31, 2013
	(unaudited)
Total assets:
United States	$	339,751	$	334,579
Canada		63,124		68,164
Europe		39,912		35,734
Other foreign countries		24,710		21,726
Total	$	467,497	$	460,203

XML

Unconsolidated Subsidiaries - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	9 Months Ended
	Feb. 28, 2014	Feb. 28, 2013	May 31, 2013	May 31, 2008
Schedule of Equity Method Investments [Line Items]
Percentage of ownership in joint venture				50.00%
Investment in the net assets of the joint venture	$ 0		$ 1.8
Equity Method Investment Unconsolidated Subsidiaries Sales Revenues	$ 8.5	$ 11.0

XML

VENEZUELA'S HIGHLY INFLATIONARY ECONOMY

9 Months Ended

Feb. 28, 2014

VENEZUELA'S HIGHLY INFLATIONARY ECONOMY

16. VENEZUELA’S HIGHLY INFLATIONARY ECONOMY

We operate a small service location in Punta Fijo, Venezuela, whose annual revenues have historically been less than one percent of our consolidated revenues for all periods presented. Because of the uncertain political environment in Venezuela, starting in the third quarter of fiscal year 2010, we began to account for Venezuelan operations pursuant to accounting guidance for hyperinflationary economies. Following the designation of the Venezuelan economy as hyperinflationary, we ceased taking the effects of currency fluctuations to accumulated other comprehensive income and began reflecting all effects as a component of other income in our statement of operations. Prior to February 2013, we were using the Venezuelan central bank’s official published rate (5.3 Bolivars per U.S. Dollar) to translate Venezuelan assets into U.S. Dollars as no other legal rate was readily available. In February 2013, the Venezuelan government announced a devaluation in its currency and created a new official exchange rate of 6.3 Bolivars per U.S. Dollar. As a result of the currency devaluation, we recognized a $0.6 million pre-tax foreign currency loss in the third quarter of fiscal year 2013.

In the third quarter of fiscal year 2014, we began using an alternative Venezuelan, state-run exchange rate, commonly referred to as SICAD-1, to translate local currency financial statements. We believe using the SICAD-1 rate of 11.8 Bolivars per Dollar is more economically representative of what we might expect to receive in a dividend transaction than the official exchange rate of 6.3 Bolivars per Dollar because any dividend payments that would have been approved by the Central Bank of Venezuela prior to March 2014 would likely have been converted to U.S. Dollars at the SICAD-1 rate. As a result of the revaluation, we recognized a $1.9 million foreign currency loss in the third quarter of fiscal 2014.

In March 2014, a market-based, state-run exchange, commonly referred to as SICAD-2, was initiated by the Central Bank of Venezuela. The nascent exchange system reported early exchange rates of about 50 Bolivars per U.S. Dollar. Management is closely monitoring the applicability and viability of this new exchange system. We have not yet determined whether we will utilize SICAD-1 or SICAD-2 exchange rates in the future for translation of local financial statements into U.S. Dollars.

At February 28, 2014, after giving effect to the revaluation in the third quarter of fiscal 2014, our Venezuelan subsidiary had net assets of $2.4 million, consisting primarily of Bolivars denominated accounts receivable. If SICAD-2 rates are used to translate local currency financial statements to U.S. Dollars in the future, a further significant revaluation of our net assets in Venezuela can be expected in the fourth quarter of fiscal year 2014.

XML

Estimated Useful Lives of Assets (Detail)	9 Months Ended
	Feb. 28, 2014
Buildings | Minimum
Property, Plant and Equipment [Line Items]
Estimated useful lives of the assets	20 years
Buildings | Maximum
Property, Plant and Equipment [Line Items]
Estimated useful lives of the assets	40 years
Leasehold improvements | Minimum
Property, Plant and Equipment [Line Items]
Estimated useful lives of the assets	2 years
Leasehold improvements | Maximum
Property, Plant and Equipment [Line Items]
Estimated useful lives of the assets	15 years
Machinery and equipment | Minimum
Property, Plant and Equipment [Line Items]
Estimated useful lives of the assets	2 years
Machinery and equipment | Maximum
Property, Plant and Equipment [Line Items]
Estimated useful lives of the assets	12 years
Furniture and fixtures | Minimum
Property, Plant and Equipment [Line Items]
Estimated useful lives of the assets	2 years
Furniture and fixtures | Maximum
Property, Plant and Equipment [Line Items]
Estimated useful lives of the assets	10 years
Computers and computer software | Minimum
Property, Plant and Equipment [Line Items]
Estimated useful lives of the assets	2 years
Computers and computer software | Maximum
Property, Plant and Equipment [Line Items]
Estimated useful lives of the assets	5 years
Automobiles | Minimum
Property, Plant and Equipment [Line Items]
Estimated useful lives of the assets	2 years
Automobiles | Maximum
Property, Plant and Equipment [Line Items]
Estimated useful lives of the assets	5 years

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES (Policies)

9 Months Ended

Feb. 28, 2014

Basis for Presentation

Basis for presentation. These interim financial statements are unaudited, but in the opinion of our management, reflect all adjustments, consisting of normal recurring adjustments necessary for a fair presentation of results for such periods. The consolidated condensed balance sheet at May 31, 2013 is derived from the May 31, 2013 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 our annual report on Form 10-K for the fiscal year ended May 31, 2013.

Consolidation

Consolidation. The consolidated financial statements include the accounts of Team, Inc. and our majority-owned subsidiaries where we have control over operating and financial policies. Investments in affiliates in which we have the ability to exert significant influence over operating and financial policies, but where we do not control the operating and financial policies, are accounted for using the equity method. All material intercompany accounts and transactions have been eliminated in consolidation.

Use of Estimates

Use of estimates. Our accounting policies conform to Generally Accepted Accounting Principles in the U.S. (“GAAP”). Our most significant accounting policies are described below. The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and judgments that affect our reported financial position and results of operations. We review significant estimates and judgments affecting our consolidated financial statements on a recurring basis and record the effect of any necessary adjustments prior to their publication. Estimates and judgments are based on information available at the time such estimates and judgments are made. Adjustments made with respect to the use of these estimates and judgments often relate to information not previously available. Uncertainties with respect to such estimates and judgments are inherent in the preparation of financial statements. Estimates and judgments are used in, among other things, (1) aspects of revenue recognition, (2) valuation of tangible and intangible assets and subsequent assessments for possible impairment, (3) the fair value of the non-controlling interest in subsidiaries that are not wholly-owned, (4) estimating various factors used to accrue liabilities for workers’ compensation, auto, medical and general liability, (5) establishing an allowance for uncollectible accounts receivable, (6) estimating the useful lives of our assets and (7) assessing future tax exposure and the realization of tax assets.

Fair Value of Financial Instruments

Fair value of financial instruments. Our financial instruments consist primarily of cash, cash equivalents, accounts receivable, accounts payable and debt obligations. The carrying amount of cash, cash equivalents, trade accounts receivable and trade accounts payable are representative of their respective fair values due to the short-term maturity of these instruments. The fair value of our banking facility is representative of the carrying value based upon the variable terms and management’s opinion that the current rates available to us with the same maturity and security structure are equivalent to that of the banking facility.

Cash and Cash Equivalents

Cash and cash equivalents. Cash and cash equivalents consist of all demand deposits and funds invested in highly liquid short-term investments with original maturities of three months or less.

Inventory

Inventory. Inventory is stated at the lower of cost (first-in, first-out method) or market. Inventory includes material, labor and certain fixed overhead costs.

Property, Plant and Equipment

Property, plant and equipment. Property, plant and equipment are stated at cost less accumulated depreciation and amortization. Leasehold improvements are amortized over the shorter of their respective useful life or the lease term. Depreciation and amortization of assets are computed by the straight-line method over the following estimated useful lives of the assets:

Classification	Useful Life
Buildings		20-40 years
Leasehold improvements		2-15 years
Machinery and equipment		2-12 years
Furniture and fixtures		2-10 years
Computers and computer software		2-5 years
Automobiles		2-5 years

Goodwill, Intangible Assets, and Non-Controlling Interest

Goodwill, intangible assets, and non-controlling interest. Goodwill represents the excess of costs over fair value of assets of businesses acquired. Goodwill and intangible assets acquired in a purchase business combination and determined to have an indefinite useful life are not amortized, but are instead tested for impairment at least annually in accordance with the provisions of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 350, Intangibles—Goodwill and Other. Intangible assets with estimated useful lives are amortized over their respective estimated useful lives to their estimated residual values and reviewed for impairment in accordance with ASC 350.

Effective July 1, 2013, we implemented a reorganization of our business divisions and now conduct operations in three segments: IHT Group, MS Group and Quest Group. Each operating segment has goodwill relating to past acquisitions and we now assess goodwill for impairment at the operating segment level. Due to the changes in the underlying assumptions surrounding our goodwill testing, during the first quarter of fiscal year 2014, we performed a quantitative analysis of goodwill to test for impairment. The test for impairment is performed at the reporting unit level which is deemed to be at the operating segment level. The test was a two-step process that involved comparing the estimated fair value of each reporting unit to the reporting unit’s carrying value, including goodwill. If the fair value of a reporting unit exceeded its carrying amount, the goodwill of the reporting unit was not considered impaired; therefore, the second step of the impairment test would not be deemed necessary. If the carrying amount of the reporting unit exceeded its fair value, we would then perform a second step to the goodwill impairment test to measure the amount of goodwill impairment loss to be recorded.

The fair value of the reporting units at July 1, 2013 were determined using a method based on discounted cash flow models with estimated cash flows based on internal forecasts of revenue and expenses over a four year period plus a terminal value period (the income approach). The income approach estimated fair value by discounting each reporting unit’s estimated future cash flows using a discount rate that approximated our weighted-average cost of capital. The fair value derived from the income approach, in the aggregate, approximated our market capitalization. At July 1, 2013, our market capitalization exceeded the carrying value of our consolidated net assets by approximately $500 million or 170%, and the fair value of each operating segment significantly exceeded their respective carrying amounts as of that date.

There was $114.1 million and $103.5 million of goodwill at February 28, 2014 and May 31, 2013, respectively. A summary of goodwill is as follows (in thousands):

	Nine Months Ended February 28, 2014
	MS		IHT			Quest		Total
Balance at May 31, 2013	$	19,130	$	53,800		$	30,536	$	103,466
Acquisitions		—		11,336			—		11,336
Foreign currency adjustments		611		(1,448	)		149		(688	)
Balance at February 28, 2014	$	19,741	$	63,688		$	30,685	$	114,114

In November 2010, we purchased 95% of Quest Integrity Group, LLC, a leading provider of proprietary in-line inspection and advanced engineering and assessment services. We expect to purchase the remaining 5% interest (the “Non-Controlling Interests”) at the end of fiscal 2015 based upon a valuation methodology as specified in the purchase agreement.

Information regarding the change in carrying value of the non-controlling interest is set forth below (in thousands):

Fair value of non-controlling interest at November 3, 2010	$	4,917
Income attributable to non-controlling interest		652
Other comprehensive income attributable to non-controlling interest		(12	)
Carrying value of non-controlling interest at February 28, 2014	$	5,557

Income Taxes

Income taxes. We follow the guidance of the ASC 740, Income Taxes, which requires that we use the asset and liability method of accounting for deferred income taxes and provide deferred income taxes for all significant temporary differences. As part of the process of preparing our consolidated financial statements, we are required to estimate our income taxes in each of the jurisdictions in which we operate. This process involves estimating our actual current tax payable and related tax expense together with assessing temporary differences resulting from differing treatment of certain items, such as depreciation, for tax and accounting purposes. These differences can result in deferred tax assets and liabilities, which are included within our consolidated balance sheets. We must then assess the likelihood that our deferred tax assets will be recovered from future taxable income and, to the extent we believe that it is more likely than not (a likelihood of more than 50%) that some portion or all of the deferred tax assets will not be realized, we must establish a valuation allowance. We consider all available evidence to determine whether, based on the weight of the evidence, a valuation allowance is needed. Evidence used includes information about our current financial position and our results of operations for the current and preceding years, as well as all currently available information about future years, including our anticipated future performance, future reversals of existing taxable temporary differences, and tax planning strategies.

Workers' Compensation, Auto, Medical and General Liability Accruals

Workers’ compensation, auto, medical and general liability accruals. In accordance with ASC 450, Contingencies, we record a loss contingency when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. We review our loss contingencies on an ongoing basis to ensure that we have appropriate reserves recorded on our balance sheet. These reserves are based on historical experience with claims incurred but not received, estimates and judgments made by management, applicable insurance coverage for litigation matters, and are adjusted as circumstances warrant. For workers’ compensation, our self-insured retention is $1.0 million and our automobile liability self-insured retention is currently $500,000 per occurrence. For general liability claims we have an effective self-insured retention of $3.0 million per occurrence. For medical claims, our self-insured retention is $175,000 per individual claimant determined on an annual basis. For environmental liability claims, our self-insured retention is $500,000 per occurrence. We maintain insurance for claims that exceed such self-retention limits. The insurance is subject to terms, conditions, limitations and exclusions that may not fully compensate us for all losses. Our estimates and judgments could change based on new information, changes in laws or regulations, changes in management’s plans or intentions, or the outcome of legal proceedings, settlements or other factors. If different estimates and judgments were applied with respect to these matters, it is likely that reserves would be recorded for different amounts.

Revenue Recognition

Revenue recognition. We determine our revenue recognition guidelines for our operations based on guidance provided in applicable accounting standards and positions adopted by the FASB and the Securities and Exchange Commission (the “SEC”). Most of our projects are short-term in nature and we predominantly derive revenues by providing a variety of industrial services on a time and material basis. For all of these services our revenues are recognized when services are rendered or when product is shipped to the job site and risk of ownership passes to the customer. However, due to various contractual terms with our customers, at the end of any reporting period, there may be earned but unbilled revenue that is accrued to properly match revenues with related costs. At February 28, 2014 and May 31, 2013, the amount of earned but unbilled revenue included in accounts receivable was $28.2 million and $25.5 million, respectively.

Allowance for Doubtful Accounts

Allowance for doubtful accounts. In the ordinary course of business, a percentage of our accounts receivable are not collected due to billing disputes, customer bankruptcies, dissatisfaction with the services we performed and other various reasons. We establish an allowance to account for those accounts receivable that will eventually be deemed uncollectible. The allowance for doubtful accounts is based on a combination of our historical experience and management’s review of long outstanding accounts receivable.

Concentration of Credit Risk

Concentration of credit risk. No single customer accounts for more than 10% of consolidated revenues.

Earnings per share

Earnings per share. Basic earnings per share is computed by dividing net income available to Team shareholders by the weighted-average number of shares of common stock outstanding during the year. Diluted earnings per share is computed by dividing net income available to Team shareholders, less income or loss for the period attributable to the non-controlling interest, by the sum of (1) the weighted-average number of shares of common stock, outstanding during the period, (2) the dilutive effect of the assumed exercise of share-based compensation using the treasury stock method and (3) the dilutive effect of the assumed conversion of our non-controlling interest to our common stock (see Note 2).

Amounts used in basic and diluted earnings per share, for the three and nine months ended February 28, 2014 and 2013, are as follows (in thousands):

	Three Months Ended February 28,				Nine Months Ended February 28,
	2014		2013		2014		2013
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Weighted-average number of basic shares outstanding		20,384		20,387		20,432		20,104
Stock options, stock units and performance awards		614		753		643		770
Assumed conversion of non-controlling interest		195		171		209		204
Total shares and dilutive securities		21,193		21,311		21,284		21,078

There were no stock options outstanding during the three months ended February 28, 2014 and 2013 excluded from the computation of diluted earnings per share because the options’ exercise prices were greater than the average market price of common shares during the periods. There were zero and 1,000 stock options to purchase shares of common stock outstanding during the nine months ended February 28, 2014 and 2013, respectively, excluded from the computation of diluted earnings per share because the options’ exercise prices were greater than the average market price of common shares during the periods.

Foreign Currency

Foreign currency. For subsidiaries whose functional currency is not the U.S. Dollar, assets and liabilities are translated at period ending rates of exchange and revenues and expenses are translated at period average exchange rates. Translation adjustments for the asset and liability accounts are included as a separate component of accumulated other comprehensive income in shareholders’ equity. Foreign currency transaction gains and losses are included in our statement of income. Effective December 1, 2009, we began to account for Venezuela as a highly-inflationary economy and the effect of all subsequent currency fluctuations between the Bolivar and the U.S. Dollar are recorded in our statement of income (see Note 16).

Newly Adopted Accounting Principles

Newly Adopted Accounting Principles

ASU 2011-04. In May 2011, an update regarding fair value measurement was issued to conform the definition of fair value and common requirements for measurement of and disclosure about fair value under U.S. GAAP and International Financial Reporting Standards. The standard also clarifies the application of existing fair value measurement requirements and expands the disclosure requirements for fair value measurements that are estimated using significant unobservable Level 3 inputs. The standard update is effective for interim and annual periods beginning after December 15, 2011. The adoption of this standard did not have a material impact on our results of operations, financial position or cash flows.

ASU 2011-05. In June 2011, the FASB issued an update to existing guidance on the presentation of comprehensive income. This update requires the presentation of the components of net income and other comprehensive income either in a single continuous statement or in two separate but consecutive statements. In addition, companies are also required to present reclassification adjustments for items that are reclassified from other comprehensive income to net income on the face of the financial statements. In December 2011, the FASB issued an accounting update to defer the effective date for presentation of reclassification of items out of accumulated other comprehensive income to net income. These updates are effective for fiscal years and interim periods beginning after December 15, 2011 with early adoption permitted. This update was adopted by Team on June 1, 2012. The adoption of this standard did not have a material effect on our results of operations, financial position or cash flows.

ASU 2011-11. In December 2011, an update was issued related to new disclosures on offsetting assets and liabilities of financial and derivative instruments. The amendments require the disclosure of gross asset and liability amounts, amounts offset on the balance sheet and amounts subject to the offsetting requirements, but not offset on the balance sheet. This standard does not amend the existing guidance on when it is appropriate to offset. The standard update is effective for annual periods beginning after January 1, 2013. The adoption of this standard did not have a material impact on our results of operations, financial position or cash flows.

ASU 2013-02. In February 2013, an update regarding other comprehensive income was issued to require entities to provide information about the amounts reclassified out of accumulated other comprehensive income by component. In addition, it requires entities to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of other comprehensive income by the respective line items of net income but only if the amount reclassified is required under GAAP to be reclassified to net income in its entirety in the same reporting period. The update is effective for fiscal years beginning after December 15, 2012. This update was adopted by Team on June 1, 2013. The adoption of this update did not have a material impact on our results of operations, financial position or cash flows.

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES

9 Months Ended

Feb. 28, 2014

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES

Introduction. Unless otherwise indicated, the terms “Team, Inc.,” “Team,” “the Company,” “we,” “our” and “us” are used in this report to refer to Team, Inc., to one or more of our consolidated subsidiaries or to all of them taken as a whole. We are incorporated in the State of Delaware and our company website can be found at www.teamindustrialservices.com. Our corporate headquarters is located at 13131 Dairy Ashford, Suite 600, Sugar Land, Texas, 77478 and our telephone number is (281) 331-6154. Our stock is traded on the New York Stock Exchange (“NYSE”) under the symbol “TISI” and our fiscal year ends on May 31 of each calendar year.

We are a leading provider of specialty industrial services, including inspection and assessment, required in maintaining high temperature and high pressure piping systems and vessels that are utilized extensively in the refining, petrochemical, power, pipeline and other heavy industries. Through fiscal year 2013, we operated in only one segment—the industrial services segment (see Note 14). Within the industrial services segment, we were organized as two divisions. Our TCM division provided the services of inspection and assessment and field heat treating. Our TMS division provided the mechanical services described below.

Effective July 1, 2013, we implemented a reorganization of our business divisions to conduct operations in three segments: Inspection and Heat Treating Services (“IHT”) Group, Mechanical Services (“MS”) Group and Quest Integrity (“Quest”) Group. While our services have been realigned in three business groups, we believe our services broadly fall into three different classifications that have unique customer demand drivers: inspection and assessment services, turnaround services, and on-stream services.

Inspection and assessment services are offered in both the IHT Group and Quest Group. The IHT Group provides basic and advanced non-destructive testing services for the process, pipeline and power sectors, pipeline integrity management services, as well as associated engineering and assessment services. These services can be offered while facilities are running (on-stream), during facility turnarounds or during new construction or expansion activities. The Quest Group provides integrity and reliability management solutions for the process, pipeline and power sectors. These solutions encompass two broadly-defined disciplines: (1) highly specialized in-line inspection services for unpiggable process piping and pipelines using proprietary in-line inspection tools and analytical software; and (2) advanced condition assessment services through a multi-disciplined engineering team. We believe there is a general growth in market demand for inspection and assessment services as improved inspection technologies enable better information about asset reliability to be available to facility owners and operators.

Turnaround services are offered in both the IHT Group and in the MS Group. These services are project-related and demand is a function of the number and scope of scheduled and unscheduled facility turnarounds as well as new industrial facility construction or expansion. Turnaround services include the field machining, technical bolting, field valve repair, heat exchanger repair, and isolation test plugging services that are part of the MS Group and the field heat treating services that are part of the IHT Group.

On-stream services are offered by the MS Group and represent the services offered while plants are operating and under pressure. These services include leak repair, fugitive emissions control and hot tapping. We believe demand for on-stream services is a function of the population of the existing infrastructure of operating industrial facilities.

We offer these services in over 125 locations throughout the world. Our industrial services are available 24 hours a day, 7 days a week, 365 days a year. We market our services to companies in a diverse array of heavy industries which include the petrochemical, refining, power, pipeline, steel, pulp and paper industries, as well as municipalities, shipbuilding, original equipment manufacturers (“OEMs”), distributors, and some of the world’s largest engineering and construction firms. Our services are also provided across a broad geographic reach.

Basis for presentation. These interim financial statements are unaudited, but in the opinion of our management, reflect all adjustments, consisting of normal recurring adjustments necessary for a fair presentation of results for such periods. The consolidated condensed balance sheet at May 31, 2013 is derived from the May 31, 2013 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 our annual report on Form 10-K for the fiscal year ended May 31, 2013.

Consolidation. The consolidated financial statements include the accounts of Team, Inc. and our majority-owned subsidiaries where we have control over operating and financial policies. Investments in affiliates in which we have the ability to exert significant influence over operating and financial policies, but where we do not control the operating and financial policies, are accounted for using the equity method. All material intercompany accounts and transactions have been eliminated in consolidation.

Use of estimates. Our accounting policies conform to Generally Accepted Accounting Principles in the U.S. (“GAAP”). Our most significant accounting policies are described below. The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and judgments that affect our reported financial position and results of operations. We review significant estimates and judgments affecting our consolidated financial statements on a recurring basis and record the effect of any necessary adjustments prior to their publication. Estimates and judgments are based on information available at the time such estimates and judgments are made. Adjustments made with respect to the use of these estimates and judgments often relate to information not previously available. Uncertainties with respect to such estimates and judgments are inherent in the preparation of financial statements. Estimates and judgments are used in, among other things, (1) aspects of revenue recognition, (2) valuation of tangible and intangible assets and subsequent assessments for possible impairment, (3) the fair value of the non-controlling interest in subsidiaries that are not wholly-owned, (4) estimating various factors used to accrue liabilities for workers’ compensation, auto, medical and general liability, (5) establishing an allowance for uncollectible accounts receivable, (6) estimating the useful lives of our assets and (7) assessing future tax exposure and the realization of tax assets.

Fair value of financial instruments. Our financial instruments consist primarily of cash, cash equivalents, accounts receivable, accounts payable and debt obligations. The carrying amount of cash, cash equivalents, trade accounts receivable and trade accounts payable are representative of their respective fair values due to the short-term maturity of these instruments. The fair value of our banking facility is representative of the carrying value based upon the variable terms and management’s opinion that the current rates available to us with the same maturity and security structure are equivalent to that of the banking facility.

Cash and cash equivalents. Cash and cash equivalents consist of all demand deposits and funds invested in highly liquid short-term investments with original maturities of three months or less.

Inventory. Inventory is stated at the lower of cost (first-in, first-out method) or market. Inventory includes material, labor and certain fixed overhead costs.

Property, plant and equipment. Property, plant and equipment are stated at cost less accumulated depreciation and amortization. Leasehold improvements are amortized over the shorter of their respective useful life or the lease term. Depreciation and amortization of assets are computed by the straight-line method over the following estimated useful lives of the assets:

Classification	Useful Life
Buildings		20-40 years
Leasehold improvements		2-15 years
Machinery and equipment		2-12 years
Furniture and fixtures		2-10 years
Computers and computer software		2-5 years
Automobiles		2-5 years

Goodwill, intangible assets, and non-controlling interest. Goodwill represents the excess of costs over fair value of assets of businesses acquired. Goodwill and intangible assets acquired in a purchase business combination and determined to have an indefinite useful life are not amortized, but are instead tested for impairment at least annually in accordance with the provisions of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 350, Intangibles—Goodwill and Other. Intangible assets with estimated useful lives are amortized over their respective estimated useful lives to their estimated residual values and reviewed for impairment in accordance with ASC 350.

Effective July 1, 2013, we implemented a reorganization of our business divisions and now conduct operations in three segments: IHT Group, MS Group and Quest Group. Each operating segment has goodwill relating to past acquisitions and we now assess goodwill for impairment at the operating segment level. Due to the changes in the underlying assumptions surrounding our goodwill testing, during the first quarter of fiscal year 2014, we performed a quantitative analysis of goodwill to test for impairment. The test for impairment is performed at the reporting unit level which is deemed to be at the operating segment level. The test was a two-step process that involved comparing the estimated fair value of each reporting unit to the reporting unit’s carrying value, including goodwill. If the fair value of a reporting unit exceeded its carrying amount, the goodwill of the reporting unit was not considered impaired; therefore, the second step of the impairment test would not be deemed necessary. If the carrying amount of the reporting unit exceeded its fair value, we would then perform a second step to the goodwill impairment test to measure the amount of goodwill impairment loss to be recorded.

The fair value of the reporting units at July 1, 2013 were determined using a method based on discounted cash flow models with estimated cash flows based on internal forecasts of revenue and expenses over a four year period plus a terminal value period (the income approach). The income approach estimated fair value by discounting each reporting unit’s estimated future cash flows using a discount rate that approximated our weighted-average cost of capital. The fair value derived from the income approach, in the aggregate, approximated our market capitalization. At July 1, 2013, our market capitalization exceeded the carrying value of our consolidated net assets by approximately $500 million or 170%, and the fair value of each operating segment significantly exceeded their respective carrying amounts as of that date.

There was $114.1 million and $103.5 million of goodwill at February 28, 2014 and May 31, 2013, respectively. A summary of goodwill is as follows (in thousands):

	Nine Months Ended February 28, 2014
	MS		IHT			Quest		Total
Balance at May 31, 2013	$	19,130	$	53,800		$	30,536	$	103,466
Acquisitions		—		11,336			—		11,336
Foreign currency adjustments		611		(1,448	)		149		(688	)
Balance at February 28, 2014	$	19,741	$	63,688		$	30,685	$	114,114

In November 2010, we purchased 95% of Quest Integrity Group, LLC, a leading provider of proprietary in-line inspection and advanced engineering and assessment services. We expect to purchase the remaining 5% interest (the “Non-Controlling Interests”) at the end of fiscal 2015 based upon a valuation methodology as specified in the purchase agreement.

Information regarding the change in carrying value of the non-controlling interest is set forth below (in thousands):

Fair value of non-controlling interest at November 3, 2010	$	4,917
Income attributable to non-controlling interest		652
Other comprehensive income attributable to non-controlling interest		(12	)
Carrying value of non-controlling interest at February 28, 2014	$	5,557

Income taxes. We follow the guidance of the ASC 740, Income Taxes, which requires that we use the asset and liability method of accounting for deferred income taxes and provide deferred income taxes for all significant temporary differences. As part of the process of preparing our consolidated financial statements, we are required to estimate our income taxes in each of the jurisdictions in which we operate. This process involves estimating our actual current tax payable and related tax expense together with assessing temporary differences resulting from differing treatment of certain items, such as depreciation, for tax and accounting purposes. These differences can result in deferred tax assets and liabilities, which are included within our consolidated balance sheets. We must then assess the likelihood that our deferred tax assets will be recovered from future taxable income and, to the extent we believe that it is more likely than not (a likelihood of more than 50%) that some portion or all of the deferred tax assets will not be realized, we must establish a valuation allowance. We consider all available evidence to determine whether, based on the weight of the evidence, a valuation allowance is needed. Evidence used includes information about our current financial position and our results of operations for the current and preceding years, as well as all currently available information about future years, including our anticipated future performance, future reversals of existing taxable temporary differences, and tax planning strategies.

Workers’ compensation, auto, medical and general liability accruals. In accordance with ASC 450, Contingencies, we record a loss contingency when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. We review our loss contingencies on an ongoing basis to ensure that we have appropriate reserves recorded on our balance sheet. These reserves are based on historical experience with claims incurred but not received, estimates and judgments made by management, applicable insurance coverage for litigation matters, and are adjusted as circumstances warrant. For workers’ compensation, our self-insured retention is $1.0 million and our automobile liability self-insured retention is currently $500,000 per occurrence. For general liability claims we have an effective self-insured retention of $3.0 million per occurrence. For medical claims, our self-insured retention is $175,000 per individual claimant determined on an annual basis. For environmental liability claims, our self-insured retention is $500,000 per occurrence. We maintain insurance for claims that exceed such self-retention limits. The insurance is subject to terms, conditions, limitations and exclusions that may not fully compensate us for all losses. Our estimates and judgments could change based on new information, changes in laws or regulations, changes in management’s plans or intentions, or the outcome of legal proceedings, settlements or other factors. If different estimates and judgments were applied with respect to these matters, it is likely that reserves would be recorded for different amounts.

Revenue recognition. We determine our revenue recognition guidelines for our operations based on guidance provided in applicable accounting standards and positions adopted by the FASB and the Securities and Exchange Commission (the “SEC”). Most of our projects are short-term in nature and we predominantly derive revenues by providing a variety of industrial services on a time and material basis. For all of these services our revenues are recognized when services are rendered or when product is shipped to the job site and risk of ownership passes to the customer. However, due to various contractual terms with our customers, at the end of any reporting period, there may be earned but unbilled revenue that is accrued to properly match revenues with related costs. At February 28, 2014 and May 31, 2013, the amount of earned but unbilled revenue included in accounts receivable was $28.2 million and $25.5 million, respectively.

Allowance for doubtful accounts. In the ordinary course of business, a percentage of our accounts receivable are not collected due to billing disputes, customer bankruptcies, dissatisfaction with the services we performed and other various reasons. We establish an allowance to account for those accounts receivable that will eventually be deemed uncollectible. The allowance for doubtful accounts is based on a combination of our historical experience and management’s review of long outstanding accounts receivable.

Concentration of credit risk. No single customer accounts for more than 10% of consolidated revenues.

Earnings per share. Basic earnings per share is computed by dividing net income available to Team shareholders by the weighted-average number of shares of common stock outstanding during the year. Diluted earnings per share is computed by dividing net income available to Team shareholders, less income or loss for the period attributable to the non-controlling interest, by the sum of (1) the weighted-average number of shares of common stock, outstanding during the period, (2) the dilutive effect of the assumed exercise of share-based compensation using the treasury stock method and (3) the dilutive effect of the assumed conversion of our non-controlling interest to our common stock (see Note 2).

Amounts used in basic and diluted earnings per share, for the three and nine months ended February 28, 2014 and 2013, are as follows (in thousands):

	Three Months Ended February 28,				Nine Months Ended February 28,
	2014		2013		2014		2013
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Weighted-average number of basic shares outstanding		20,384		20,387		20,432		20,104
Stock options, stock units and performance awards		614		753		643		770
Assumed conversion of non-controlling interest		195		171		209		204
Total shares and dilutive securities		21,193		21,311		21,284		21,078

There were no stock options outstanding during the three months ended February 28, 2014 and 2013 excluded from the computation of diluted earnings per share because the options’ exercise prices were greater than the average market price of common shares during the periods. There were zero and 1,000 stock options to purchase shares of common stock outstanding during the nine months ended February 28, 2014 and 2013, respectively, excluded from the computation of diluted earnings per share because the options’ exercise prices were greater than the average market price of common shares during the periods.

Foreign currency. For subsidiaries whose functional currency is not the U.S. Dollar, assets and liabilities are translated at period ending rates of exchange and revenues and expenses are translated at period average exchange rates. Translation adjustments for the asset and liability accounts are included as a separate component of accumulated other comprehensive income in shareholders’ equity. Foreign currency transaction gains and losses are included in our statement of income. Effective December 1, 2009, we began to account for Venezuela as a highly-inflationary economy and the effect of all subsequent currency fluctuations between the Bolivar and the U.S. Dollar are recorded in our statement of income (see Note 16).

Newly Adopted Accounting Principles

ASU 2011-04. In May 2011, an update regarding fair value measurement was issued to conform the definition of fair value and common requirements for measurement of and disclosure about fair value under U.S. GAAP and International Financial Reporting Standards. The standard also clarifies the application of existing fair value measurement requirements and expands the disclosure requirements for fair value measurements that are estimated using significant unobservable Level 3 inputs. The standard update is effective for interim and annual periods beginning after December 15, 2011. The adoption of this standard did not have a material impact on our results of operations, financial position or cash flows.

ASU 2011-05. In June 2011, the FASB issued an update to existing guidance on the presentation of comprehensive income. This update requires the presentation of the components of net income and other comprehensive income either in a single continuous statement or in two separate but consecutive statements. In addition, companies are also required to present reclassification adjustments for items that are reclassified from other comprehensive income to net income on the face of the financial statements. In December 2011, the FASB issued an accounting update to defer the effective date for presentation of reclassification of items out of accumulated other comprehensive income to net income. These updates are effective for fiscal years and interim periods beginning after December 15, 2011 with early adoption permitted. This update was adopted by Team on June 1, 2012. The adoption of this standard did not have a material effect on our results of operations, financial position or cash flows.

ASU 2011-11. In December 2011, an update was issued related to new disclosures on offsetting assets and liabilities of financial and derivative instruments. The amendments require the disclosure of gross asset and liability amounts, amounts offset on the balance sheet and amounts subject to the offsetting requirements, but not offset on the balance sheet. This standard does not amend the existing guidance on when it is appropriate to offset. The standard update is effective for annual periods beginning after January 1, 2013. The adoption of this standard did not have a material impact on our results of operations, financial position or cash flows.

ASU 2013-02. In February 2013, an update regarding other comprehensive income was issued to require entities to provide information about the amounts reclassified out of accumulated other comprehensive income by component. In addition, it requires entities to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of other comprehensive income by the respective line items of net income but only if the amount reclassified is required under GAAP to be reclassified to net income in its entirety in the same reporting period. The update is effective for fiscal years beginning after December 15, 2012. This update was adopted by Team on June 1, 2013. The adoption of this update did not have a material impact on our results of operations, financial position or cash flows.

XML

Condensed Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Feb. 28, 2014	May 31, 2013
Receivables, allowance	$ 5,343	$ 5,438
Intangible assets, accumulated amortization	$ 11,715	$ 9,039
Preferred stock, shares authorized	500,000	500,000
Preferred stock, shares issued
Common stock, par value	$ 0.30	$ 0.30
Common stock, shares authorized	60,000,000	30,000,000
Common stock, shares issued	20,439,476	20,587,808
Treasury stock at cost, shares	0	89,569

XML

SHARE-BASED COMPENSATION

9 Months Ended

Feb. 28, 2014

SHARE-BASED COMPENSATION

11. SHARE-BASED COMPENSATION

We have adopted stock incentive plans and other arrangements pursuant to which our Board of Directors (the “Board”) may grant stock options, restricted stock, stock units, stock appreciation rights, common stock or performance awards to officers, directors and key employees. At February 28, 2014, there were approximately 1.2 million stock options, restricted stock units and performance awards outstanding to officers, directors and key employees. The exercise price, terms and other conditions applicable to each form of share-based compensation under our plans are generally determined by the Compensation Committee of our Board at the time of grant and may vary.

Our share-based payments consist primarily of stock options, stock units, common stock and performance awards. The governance of our share-based compensation does not directly limit the number of future awards. However, the total number of shares ultimately issued may not exceed the total number of shares cumulatively authorized, which is 7,120,000 at February 28, 2014. Shares issued in connection with our share-based compensation are issued out of authorized but unissued common stock. Compensation expense related to share-based compensation totaled $3.2 million and $3.0 million for the nine months ended February 28, 2014 and 2013, respectively. At February 28, 2014, $9.7 million of unrecognized compensation expense related to share-based compensation is expected to be recognized over a remaining weighted-average period of 2.9 years. The tax benefit derived when share-based awards result in a tax deduction for the company was $1.1 million and $3.0 million for the nine months ended February 28, 2014 and 2013, respectively.

We determine the fair value of each stock option at the grant date using a Black-Scholes model and recognize the resulting expense of our stock option awards over the period during which an employee is required to provide services in exchange for the awards, usually the vesting period. There was no compensation expense related to stock options for the nine months ended February 28, 2014 and 2013. Our options typically vest in equal annual installments over a four year service period. Expense related to an option grant is recognized on a straight line basis over the specified vesting period for those options. Stock options generally have a ten year term. Transactions involving our stock options during the nine months ended February 28, 2014 and 2013 are summarized below:

	Nine Months Ended February 28, 2014					Nine Months Ended February 28, 2013
	(unaudited)					(unaudited)
	No. of Options			Weighted Average Exercise Price		No. of Options			Weighted Average Exercise Price
	(in thousands)					(in thousands)
Shares under option, beginning of period		1,052		$	20.24		1,562		$	18.95
Changes during the period:
Granted		—		$	—		—		$	—
Exercised		(195	)	$	24.48		(508	)	$	16.23
Cancelled		—		$	—		—		$	—
Expired		—		$	—		—		$	—
Shares under option, end of period		857		$	19.28		1,054		$	20.25
Exercisable at end of period		857		$	19.28		1,054		$	20.25

Options exercisable at February 28, 2014 had a weighted-average remaining contractual life of 2.6 years. For total options outstanding at February 28, 2014, the range of exercise prices and remaining contractual lives are as follows:

Range of Prices	No. of Options		Weighted Average Exercise Price		Weighted Average Remaining Life
	(in thousands)				(in years)
$6.42 to $9.62		105	$	9.00		1.2
$9.63 to $12.82		152	$	11.11		1.9
$12.83 to $16.03		264	$	14.51		2.3
$16.04 to $32.05		336	$	29.94		3.6
		857	$	19.28		2.6

Performance awards are settled with common stock upon vesting unless it is not legally feasible to issue shares, in which case the value of the award is settled in cash. We determine the fair value of each performance award based on the market price on the date of grant. Performance awards granted to our Chairman of our Board vest over the longer of four years or the achievement of performance goals based upon our future results of operations. Compensation expense related to performance awards totaled $0.4 million for the nine months ended February 28, 2014 and 2013. Transactions involving our performance awards during the nine months ended February 28, 2014 and 2013 are summarized below:

	Nine Months Ended February 28, 2014					Nine Months Ended February 28, 2013
	(unaudited)					(unaudited)
	No. of Performance Awards			Weighted Average Fair Value		No. of Performance Awards			Weighted Average Fair Value
	(in thousands)					(in thousands)
Performance awards, beginning of period		57		$	25.45		65		$	21.86
Changes during the period:
Granted		17		$	36.40		19		$	32.89
Vested and settled		(24	)	$	22.65		(27	)	$	22.04
Cancelled		—		$	—		—		$	—
Performance awards, end of period		50		$	30.63		57		$	25.45

Stock units are settled with common stock upon vesting unless it is not legally feasible to issue shares, in which case the value of the award is settled in cash. We determine the fair value of each stock unit based on the market price on the date of grant. Stock units generally vest in annual installments over four years and the expense associated with the units is recognized over the same vesting period. We also grant common stock to our directors which typically vest immediately. Compensation expense related to stock units and director stock grants totaled $2.8 million for the nine months ended February 28, 2014 and $2.6 for the nine months ended February 28, 2013. Transactions involving our stock units and director stock grants during the nine months ended February 28, 2014 and 2013 are summarized below:

	Nine Months Ended February 28, 2014					Nine Months Ended February 28, 2013
	(unaudited)					(unaudited)
	No. of Stock Units			Weighted Average Fair Value		No. of Stock Units			Weighted Average Fair Value
	(in thousands)					(in thousands)
Stock and stock units, beginning of period		329		$	26.07		342		$	21.73
Changes during the period:
Granted		136		$	36.71		141		$	32.81
Vested and settled		(138	)	$	24.34		(142	)	$	22.54
Cancelled		(16	)	$	27.94		(8	)	$	22.40
Stock and stock units, end of period		311		$	31.39		333		$	26.07

XML

Document and Entity Information	9 Months Ended
	Feb. 28, 2014	Apr. 01, 2014
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Feb. 28, 2014
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q3
Trading Symbol	TISI
Entity Registrant Name	TEAM INC
Entity Central Index Key	0000318833
Current Fiscal Year End Date	--05-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		20,444,701

XML

OTHER COMPREHENSIVE INCOME

9 Months Ended

Feb. 28, 2014

OTHER COMPREHENSIVE INCOME

12. OTHER COMPREHENSIVE INCOME

A summary of changes in other comprehensive income included within shareholders’ equity is as follows (in thousands):

	Nine Months Ended February 28, 2014												Nine Months Ended February 28, 2013
	(unaudited)												(unaudited)
	Foreign Currency Translation Adjustments			Foreign Currency Hedge			Tax Provision			Total			Foreign Currency Translation Adjustments			Foreign Currency Hedge			Tax Provision			Total
Balance, beginning of period	$	(3,532	)	$	2,004		$	(261	)	$	(1,789	)	$	(4,593	)	$	2,678		$	(672	)	$	(2,587	)
Other comprehensive income before tax		(2,925	)		(856	)		1,944			(1,837	)		2,305			(791	)		218			1,732
Non-controlling interest		5			—			—			5			(23	)		—			—			(23	)
Balance, end of period	$	(6,452	)	$	1,148		$	1,683		$	(3,621	)	$	(2,311	)	$	1,887		$	(454	)	$	(878	)

The following table represents the related tax effects allocated to each component of other comprehensive income (in thousands):

	Nine Months Ended February 28, 2014								Nine Months Ended February 28, 2013
	(unaudited)								(unaudited)
	Gross Amount			Tax Effect		Net Amount			Gross Amount			Tax Effect			Net Amount
Foreign currency translation adjustments	$	(2,925	)	$	1,617	$	(1,308	)	$	2,305		$	(91	)	$	2,214
Foreign currency hedge		(856	)		327		(529	)		(791	)		309			(482	)
Total	$	(3,781	)	$	1,944	$	(1,837	)	$	1,514		$	218		$	1,732

XML

Condensed Consolidated Statements of Operations (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Feb. 28, 2014	Feb. 28, 2013	Feb. 28, 2014	Feb. 28, 2013
Revenues	$ 163,236	$ 150,975	$ 538,040	$ 513,115
Operating expenses	121,540	112,084	382,532	362,224
Gross margin	41,696	38,891	155,508	150,891
Selling, general and administrative expenses	40,725	38,278	125,482	115,280
Earnings (loss) from unconsolidated affiliates	29	(4)	822	862
Gain on revaluation of contingent consideration			2,138
Operating income	1,000	609	32,986	36,473
Interest expense, net	660	743	2,079	2,019
Foreign currency loss	1,868	729	2,398	917
Earnings (loss) before income taxes	(1,528)	(863)	28,509	33,537
Less: Provision for income taxes	(557)	(319)	10,406	12,409
Net income (loss)	(971)	(544)	18,103	21,128
Less: Income (loss) attributable to non-controlling interest	39	(9)	178	166
Net income (loss) available to Team shareholders	$ (1,010)	$ (535)	$ 17,925	$ 20,962
Net income (loss) per share: Basic	$ (0.05)	$ (0.03)	$ 0.88	$ 1.04
Net income (loss) per share: Diluted	$ (0.05)	$ (0.03)	$ 0.84	$ 0.99

XML

ASSETS HELD FOR SALE

9 Months Ended

Feb. 28, 2014

ASSETS HELD FOR SALE

6. ASSETS HELD FOR SALE

Assets held for sale consists of $5.2 million related to approximately 50 acres of undeveloped land in Pearland, Texas.

XML

PROPERTY, PLANT AND EQUIPMENT

9 Months Ended

Feb. 28, 2014

PROPERTY, PLANT AND EQUIPMENT

5. PROPERTY, PLANT AND EQUIPMENT

A summary of property, plant and equipment as of February 28, 2014 and May 31, 2013 is as follows (in thousands):

	February 28, 2014			May 31, 2013
	(unaudited)
Land	$	3,067		$	3,108
Buildings and leasehold improvements		19,345			18,445
Machinery and equipment		148,120			137,439
Furniture and fixtures		4,809			4,469
Capitalized ERP system development costs		2,677			—
Computers and computer software		9,581			8,871
Automobiles		3,660			3,842
Construction in progress		11,196			3,816
Total		202,455			179,990
Accumulated depreciation and amortization		(117,063	)		(105,051	)
Property, plant, and equipment, net	$	85,392		$	74,939

In the second quarter of 2013, we initiated the design and implementation of a new ERP system, which is expected to be fully installed during fiscal year 2016. Total future capital costs associated with the implementation are expected to be in the range of $10 to $12 million over the next two years.

Included in construction in progress are costs of approximately $7.4 million associated with the re-development of Team’s former headquarters in Alvin, Texas as an equipment, training and technical center for operations support. The Alvin project is expected to be completed in the spring of 2014 at a total cost of approximately $9.0 million.

XML

REPURCHASE OF COMMON STOCK

9 Months Ended

Feb. 28, 2014

REPURCHASE OF COMMON STOCK

17. REPURCHASE OF COMMON STOCK

On October 1, 2013, our Board approved an initial $25 million stock repurchase plan, superseding and replacing our previous stock repurchase plan. During our second quarter, we repurchased 369,900 shares for a total cost of $13.3 million. These shares, along with 89,569 shares purchased in a prior period at a cost of $1.3 million, were retired and are not included in common stock issued and outstanding as of February 28, 2014. The retirement of the shares purchased resulted in a reduction in common stock of $0.1 million, a reduction of $2.2 million to additional paid-in capital, and a $12.3 million reduction in retained earnings. No shares were repurchased in the third quarter.

XML

COMMITMENTS AND CONTINGENCIES

9 Months Ended

Feb. 28, 2014

COMMITMENTS AND CONTINGENCIES

13. COMMITMENTS AND CONTINGENCIES

Con Ed Matter—We have, from time to time, provided temporary leak repair services for the steam operations of Consolidated Edison Company of New York (“Con Ed”) located in New York City. In July 2007, a Con Ed steam main located in midtown Manhattan ruptured causing one death and other injuries and property damage. As of February 28, 2014, ninety-five lawsuits have been filed against Con Ed, the City of New York and Team in the Supreme Courts of New York located in Kings, New York and Bronx County, alleging that our temporary leak repair services may have contributed to the cause of the rupture. The lawsuits seek generally unspecified compensatory damages for personal injury, property damage and business interruption. Additionally, on March 31, 2008, we received a letter from Con Ed alleging that our contract with Con Ed requires us to indemnify and defend Con Ed for additional claims filed against Con Ed as a result of the rupture. Con Ed filed an action to join Team and the City of New York as defendants in all lawsuits filed against Con Ed that did not include Team and the City of New York as direct defendants. We are vigorously defending the lawsuits and Con Ed’s claim for indemnification. We are unable to estimate the amount of liability to us, if any, associated with these lawsuits and the claim for indemnification. We maintain insurance coverage, subject to a deductible limit of $250,000, which we believe should cover these claims. We have not accrued any liability in excess of the deductible limit for the lawsuits. We do not believe the ultimate outcome of these matters will have a material adverse effect on our financial position, results of operations or cash flows.

We are involved in various other lawsuits and are subject to various claims and proceedings encountered in the normal conduct of business. In our opinion, any uninsured losses that might arise from these lawsuits and proceedings will not have a materially adverse effect on our consolidated financial statements.

XML

LONG-TERM DEBT, DERIVATIVES AND LETTERS OF CREDIT

9 Months Ended

Feb. 28, 2014

LONG-TERM DEBT, DERIVATIVES AND LETTERS OF CREDIT

9. LONG-TERM DEBT, DERIVATIVES AND LETTERS OF CREDIT

Our banking credit facility (“Credit Facility”) with our banking syndicate has borrowing capacity of up to $150 million in multiple currencies, is secured by virtually all of our domestic assets and a majority of the stock of our foreign subsidiaries and matures in July 2016. In connection with a prior renewal of the Credit Facility, we are amortizing $0.8 million of associated debt issuance costs over the life of the Credit Facility. The Credit Facility bears interest based on a variable Eurodollar rate option (LIBOR plus 1.75% margin at February 28, 2014) and has commitment fees of 0.30% on unused borrowing capacity.

In order to secure our casualty insurance programs we are required to post letters of credit generally issued by a bank as collateral. A letter of credit commits the issuer to remit specified amounts to the holder, if the holder demonstrates that we failed to meet our obligations under the letter of credit. If this were to occur, we would be obligated to reimburse the issuer for any payments the issuer was required to remit to the holder of the letter of credit. We were contingently liable for outstanding stand-by letters of credit totaling $13.6 million at February 28, 2014 and $13.1 million at May 31, 2013. Outstanding letters of credit reduce amounts available under our Credit Facility and are considered as having been funded for purposes of calculating our financial covenants under the Credit Facility.

ASC 815, Derivatives and Hedging, established accounting and reporting standards requiring that derivative instruments be recorded at fair value and included in the balance sheet as assets or liabilities. The accounting for changes in the fair value of a derivative instrument depends on the intended use of the derivative and the resulting designation, which is established at the inception date of a derivative. Special accounting for derivatives qualifying as fair value hedges allows derivatives’ gains and losses to offset related results on the hedged item in the statement of income. For derivative instruments designated as cash flow hedges, changes in fair value, to the extent the hedge is effective, are recognized in other comprehensive income until the hedged item is recognized in earnings. Hedge effectiveness is measured at least quarterly based on the relative cumulative changes in fair value between the derivative contract and the hedged item over time. Credit risks related to derivatives include the possibility that the counter-party will not fulfill the terms of the contract. We considered counter-party credit risk to our derivative contracts when valuing our derivative instruments.

Our borrowing of €12.3 million under the Credit Facility serves as an economic hedge of our net investment in our European operations as fluctuations in the fair value of the borrowing attributable to the U.S. Dollar/Euro spot rate will offset translation gains or losses attributable to our investment in our European operations. At February 28, 2014 the €12.3 million borrowing had a U.S. Dollar value of $16.9 million.

For derivative instruments that are designated and qualify as cash flow hedges, the effective portion of the gain or loss on the derivative is reported as a component of other comprehensive income and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. Gains and losses on the derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current earnings. Any ineffectiveness related to our hedges was not material for any of the periods presented.

The amounts recognized in other comprehensive income, and reclassified into income, for the three and nine months ended February 28, 2014 and 2013, are as follows (in thousands):

	Gain (Loss) Recognized in Other Comprehensive Income						Gain (Loss) Reclassified from Other Comprehensive Income to Earnings				Gain (Loss) Recognized in Other Comprehensive Income						Gain (Loss) Reclassified from Other Comprehensive Income to Earnings
	Three Months Ended February 28,						Three Months Ended February 28,				Nine Months Ended February 28,						Nine Months Ended February 28,
	(unaudited)						(unaudited)				(unaudited)						(unaudited)
	2014			2013			2014		2013		2014			2013			2014		2013
Euro denominated long-term debt	$	(94	)	$	(143	)	$	—	$	—	$	(856	)	$	(791	)	$	—	$	—

The following table presents the fair value totals and balance sheet classification for derivatives designated as hedges under ASC 815 (in thousands):

February 28, 2014

May 31, 2013

(unaudited)

Classification

Balance Sheet Location

Fair Value

Classification

Balance Sheet Location

Fair Value

Euro denominated long-term debt

Liability

Long-term debt

$

1,148

Liability

Long-term debt

$

2,004

XML

Related Tax Effects Allocated to Each Components of Other Comprehensive Income (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Feb. 28, 2014	Feb. 28, 2013	Feb. 28, 2014	Feb. 28, 2013
Components Of Other Comprehensive Income Loss [Line Items]
Foreign currency translation adjustments, Gross Amount	$ (2,715)	$ (1,985)	$ (2,925)	$ 2,305
Foreign currency translation adjustments, Tax Effect			1,617	(91)
Foreign currency translation adjustments, Net Amount			(1,308)	2,214
Foreign currency hedge, Gross Amount			(856)	(791)
Foreign currency hedge, Tax Effect			327	309
Foreign currency hedge, Net Amount			(529)	(482)
Other Comprehensive Income (Loss), before Tax, Total			(3,781)	1,514
Total other comprehensive income, Tax Affect	1,111	594	1,944	218
Total other comprehensive income, Net Amount			$ (1,837)	$ 1,732

XML

INTANGIBLE ASSETS

9 Months Ended

Feb. 28, 2014

INTANGIBLE ASSETS

7. INTANGIBLE ASSETS

A summary of intangible assets as of February 28, 2014 and May 31, 2013 is as follows (in thousands):

	February 28, 2014							May 31, 2013
	(unaudited)
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Customer relationships	$	22,355	$	(6,059	)	$	16,296	$	21,418	$	(4,168	)	$	17,250
Non-compete agreements		3,630		(3,352	)		278		3,701		(3,232	)		469
Trade names		4,325		(641	)		3,684		4,075		(424	)		3,651
Technology		5,112		(1,565	)		3,547		5,112		(1,166	)		3,946
Licenses		683		(98	)		585		683		(49	)		634
Total	$	36,105	$	(11,715	)	$	24,390	$	34,989	$	(9,039	)	$	25,950

Amortization expense for the three months ended February 28, 2014 and 2013 was $0.9 million and $0.8 million, respectively. Amortization expense for the nine months ended February 28, 2014 and 2013 was $2.8 million and $2.5 million, respectively.

XML

OTHER ACCRUED LIABILITIES

9 Months Ended

Feb. 28, 2014

OTHER ACCRUED LIABILITIES

8. OTHER ACCRUED LIABILITIES

A summary of other accrued liabilities as of February 28, 2014 and May 31, 2013 is as follows (in thousands):

	February 28, 2014		May 31, 2013
	(unaudited)
Payroll and other compensation expenses	$	22,806	$	32,093
Insurance accruals		5,330		5,385
Property, sales and other non-income related taxes		1,650		2,385
Other		9,474		9,302
Total	$	39,260	$	49,165

XML

FAIR VALUE MEASUREMENTS

9 Months Ended

Feb. 28, 2014

FAIR VALUE MEASUREMENTS

10. FAIR VALUE MEASUREMENTS

Effective June 1, 2008, we adopted the provisions of ASC 820, Fair Value Measurements and Disclosures (“ASC 820”), which among other things, requires enhanced disclosures about assets and liabilities carried at fair value.

As defined in ASC 820, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. We utilize market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. We primarily apply the market approach for recurring fair value measurements and endeavor to utilize the best information available. Accordingly, we utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. The use of unobservable inputs is intended to allow for fair value determinations in situations in which there is little, if any, market activity for the asset or liability at the measurement date. We are able to classify fair value balances based on the observability of those inputs. ASC 820 establishes a fair value hierarchy such that “Level 1” measurements include unadjusted quoted market prices for identical assets or liabilities in an active market, “Level 2” measurements include quoted market prices for identical assets or liabilities in an active market which have been adjusted for items such as effects of restrictions for transferability and those that are not quoted but are observable through corroboration with observable market data, including quoted market prices for similar assets, and “Level 3” measurements include those that are unobservable and of a highly subjective measure.

The following table sets forth, by level within the fair value hierarchy, our financial assets and liabilities that are accounted for at fair value on a recurring basis as of February 28, 2014. As required by ASC 820, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement (in thousands):

	February 28, 2014
	(unaudited)
	Quoted Prices in Active Markets for Identical Items (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Liabilities:
Contingent consideration	$	—	$	—	$	2,982	$	2,982
Euro denominated long-term debt		—		1,148		—		1,148
Total liabilities	$	—	$	1,148	$	2,982	$	4,130

	May 31, 2013
	Quoted Prices in Active Markets for Identical Items (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Liabilities:
Contingent consideration	$	—	$	—	$	2,047	$	2,047
Euro denominated long-term debt		—		2,004		—		2,004
Total liabilities	$	—	$	2,004	$	2,047	$	4,051

The fair value of contingent consideration liabilities that was classified as Level 3 in the table above was estimated using a discounted cash flow technique with significant inputs that are not observable in the market and thus represents a Level 3 fair value measurement as defined in ASC 820. The significant inputs in the Level 3 measurement not supported by market activity include a combination of actual cash flows and probability-weighted assessments of expected future cash flows related to the acquired businesses, appropriately discounted considering the uncertainties associated with the obligation, and as calculated in accordance with the terms of the acquisition agreement.

XML

Revenues and Total Assets in United States and Other Countries (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Feb. 28, 2014	Feb. 28, 2013	Feb. 28, 2014	Feb. 28, 2013	May 31, 2013
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues	$ 163,236	$ 150,975	$ 538,040	$ 513,115
Assets	467,497		467,497		460,203
United States
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues	120,916	116,155	382,322	366,397
Assets	339,751		339,751		334,579
Canada
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues	22,267	19,946	93,621	98,647
Assets	63,124		63,124		68,164
Europe
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues	10,448	8,220	31,079	23,586
Assets	39,912		39,912		35,734
Other Foreign Countries
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues	9,605	6,654	31,018	24,485
Assets	$ 24,710		$ 24,710		$ 21,726

XML

Venezuela's Highly Inflationary Economy - Additional Information (Detail) (USD $)	3 Months Ended		9 Months Ended				3 Months Ended
	Feb. 28, 2014	Feb. 28, 2013	Feb. 28, 2014	Feb. 28, 2013	Jan. 31, 2013	Mar. 31, 2014 Subsequent Event SICAD-2	Feb. 28, 2013 Venezuela	Feb. 28, 2014 Venezuela
Investment in Country with High Inflationary Economy [Line Items]
Percentage of consolidated revenues from small service location			1.00%
Foreign currency exchange rate		6.3		6.3	5.3	50
Recognized losses related to the Venezuelan currency	$ (1,868,000)	$ (729,000)	$ (2,398,000)	$ (917,000)			$ (600,000)
Alternative state-run SICAD rate	11.8		11.8
Net assets of Venezuelan subsidiary								$ 2,400,000

XML

Segment Data for our Three Operating Segment (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Feb. 28, 2014	Feb. 28, 2013	Feb. 28, 2014	Feb. 28, 2013
Segment Reporting Information [Line Items]
Revenues	$ 163,236	$ 150,975	$ 538,040	$ 513,115
Operating income	1,000	609	32,986	36,473
Capital expenditures	10,139	6,149	23,758	18,803
Depreciation and amortization	5,285	4,800	15,976	14,454
Operating Segments | IHT Segment
Segment Reporting Information [Line Items]
Revenues	85,149	81,227	290,409	272,372
Operating income	3,783	4,439	31,666	30,411
Capital expenditures	2,187	1,398	5,602	6,253
Depreciation and amortization	1,936	1,866	5,947	5,704
Operating Segments | MS Segment
Segment Reporting Information [Line Items]
Revenues	63,440	59,513	200,196	201,011
Operating income	2,939	3,346	17,120	21,049
Capital expenditures	1,503	1,654	4,694	6,266
Depreciation and amortization	1,801	1,771	5,391	5,165
Operating Segments | Quest Segment
Segment Reporting Information [Line Items]
Revenues	14,647	10,235	47,435	39,732
Operating income	1,170	(62)	5,986	5,944
Capital expenditures	582	2,439	3,257	3,840
Depreciation and amortization	1,343	1,038	4,033	3,193
Corporate and shared support services
Segment Reporting Information [Line Items]
Operating income	(6,892)	(7,114)	(21,786)	(20,931)
Capital expenditures	5,867	658	10,205	2,444
Depreciation and amortization	$ 205	$ 125	$ 605	$ 392

XML

OTHER COMPREHENSIVE INCOME (Tables)

9 Months Ended

Feb. 28, 2014

Summary of Changes in Other Comprehensive Income Included Within Shareholders' Equity

A summary of changes in other comprehensive income included within shareholders’ equity is as follows (in thousands):

	Nine Months Ended February 28, 2014												Nine Months Ended February 28, 2013
	(unaudited)												(unaudited)
	Foreign Currency Translation Adjustments			Foreign Currency Hedge			Tax Provision			Total			Foreign Currency Translation Adjustments			Foreign Currency Hedge			Tax Provision			Total
Balance, beginning of period	$	(3,532	)	$	2,004		$	(261	)	$	(1,789	)	$	(4,593	)	$	2,678		$	(672	)	$	(2,587	)
Other comprehensive income before tax		(2,925	)		(856	)		1,944			(1,837	)		2,305			(791	)		218			1,732
Non-controlling interest		5			—			—			5			(23	)		—			—			(23	)
Balance, end of period	$	(6,452	)	$	1,148		$	1,683		$	(3,621	)	$	(2,311	)	$	1,887		$	(454	)	$	(878	)

Related Tax Effects Allocated to Each Component of Other Comprehensive Income

The following table represents the related tax effects allocated to each component of other comprehensive income (in thousands):

	Nine Months Ended February 28, 2014								Nine Months Ended February 28, 2013
	(unaudited)								(unaudited)
	Gross Amount			Tax Effect		Net Amount			Gross Amount			Tax Effect			Net Amount
Foreign currency translation adjustments	$	(2,925	)	$	1,617	$	(1,308	)	$	2,305		$	(91	)	$	2,214
Foreign currency hedge		(856	)		327		(529	)		(791	)		309			(482	)
Total	$	(3,781	)	$	1,944	$	(1,837	)	$	1,514		$	218		$	1,732

XML

Amounts Recognized in Other Comprehensive Income, and Reclassified into Income (Detail) (Euro denominated long-term debt, USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Feb. 28, 2014	Feb. 28, 2013	Feb. 28, 2014	Feb. 28, 2013
Euro denominated long-term debt
Derivative Instruments, Gain (Loss) [Line Items]
Gain (Loss) Recognized in Other Comprehensive Income	$ (94)	$ (143)	$ (856)	$ (791)
Gain (Loss) Reclassified from Other Comprehensive Income to Earnings

XML

UNCONSOLIDATED SUBSIDIARIES

9 Months Ended

Feb. 28, 2014

UNCONSOLIDATED SUBSIDIARIES

15. UNCONSOLIDATED SUBSIDIARIES

Our earnings from unconsolidated affiliates consisted entirely of our joint venture (50% ownership) to perform non-destructive testing and inspection services in Alaska. At December 31, 2013 the joint venture was dissolved and the net assets were liquidated resulting in no material gain or loss. However, the operations of the joint venture have been continued by our IHT division. Our investment in the net assets of the joint venture, accounted for using the equity method of accounting, was zero at February 28, 2014 and $1.8 million at May 31, 2013. Revenues from the joint venture not reflected in our consolidated revenues were $8.5 million and $11.0 million for the nine months ended February 28, 2014 and 2013, respectively.

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES (Tables)

9 Months Ended

Feb. 28, 2014

Summary of Goodwill

A summary of goodwill is as follows (in thousands):

	Nine Months Ended February 28, 2014
	MS		IHT			Quest		Total
Balance at May 31, 2013	$	19,130	$	53,800		$	30,536	$	103,466
Acquisitions		—		11,336			—		11,336
Foreign currency adjustments		611		(1,448	)		149		(688	)
Balance at February 28, 2014	$	19,741	$	63,688		$	30,685	$	114,114

Change in Carrying Value of Non-Controlling Interest

Information regarding the change in carrying value of the non-controlling interest is set forth below (in thousands):

Fair value of non-controlling interest at November 3, 2010	$	4,917
Income attributable to non-controlling interest		652
Other comprehensive income attributable to non-controlling interest		(12	)
Carrying value of non-controlling interest at February 28, 2014	$	5,557

Amounts Used In Basic and Diluted Earnings Per Share

Amounts used in basic and diluted earnings per share, for the three and nine months ended February 28, 2014 and 2013, are as follows (in thousands):

	Three Months Ended February 28,				Nine Months Ended February 28,
	2014		2013		2014		2013
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Weighted-average number of basic shares outstanding		20,384		20,387		20,432		20,104
Stock options, stock units and performance awards		614		753		643		770
Assumed conversion of non-controlling interest		195		171		209		204
Total shares and dilutive securities		21,193		21,311		21,284		21,078

XML

Summary of Other Accrued Liabilities (Detail) (USD $) In Thousands, unless otherwise specified	Feb. 28, 2014	May 31, 2013
Schedule of Accrued Liabilities [Line Items]
Payroll and other compensation expenses	$ 22,806	$ 32,093
Insurance accruals	5,330	5,385
Property, sales and other non-income related taxes	1,650	2,385
Other	9,474	9,302
Total	$ 39,260	$ 49,165

XML

Acquisitions - Additional Information (Detail) (USD $)	9 Months Ended	1 Months Ended			12 Months Ended
	Feb. 28, 2014	Jul. 31, 2013 Global Ascent, Inc.	Nov. 30, 2013 TCI Services, Inc.	Sep. 30, 2012 TCI Services, Inc.	May 31, 2013 Specialty Remote Digital Video Inspection Company
Business Acquisition [Line Items]
Business acquisition, purchase price		$ 13,800,000		$ 21,200,000	$ 3,000,000
Business acquisition, allocated to goodwill and intangible assets		12,600,000		16,400,000
Gain on revaluation of contingent consideration	$ (2,138,000)		$ 2,100,000

XML

Condensed Consolidated Statements of Comprehensive Income (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Feb. 28, 2014	Feb. 28, 2013	Feb. 28, 2014	Feb. 28, 2013
Net income (loss)	$ (971)	$ (544)	$ 18,103	$ 21,128
Foreign currency translation adjustment	(2,715)	(1,985)	(2,925)	2,305
Foreign currency hedge	(94)	(143)	(856)	(791)
Tax benefit attributable to other comprehensive income	1,111	594	1,944	218
Total comprehensive income (loss)	(2,669)	(2,078)	16,266	22,860
Less: Total comprehensive income (loss) attributable to non-controlling interest	42	(14)	173	189
Total comprehensive income (loss) available to Team shareholders	$ (2,711)	$ (2,064)	$ 16,093	$ 22,671

XML

INVENTORY

9 Months Ended

Feb. 28, 2014

INVENTORY

4. INVENTORY

A summary of inventory as of February 28, 2014 and May 31, 2013 is as follows (in thousands):

	February 28, 2014		May 31, 2013
	(unaudited)
Raw materials	$	3,056	$	3,460
Work in progress		893		845
Finished goods		22,355		22,202
Total	$	26,304	$	26,507

XML

Summary of Transactions Involving Stock Units and Director Stock Grants (Detail) (Stock And Stock Units, USD $) In Thousands, except Per Share data, unless otherwise specified	9 Months Ended
	Feb. 28, 2014	Feb. 28, 2013
Stock And Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Performance awards, beginning of year, No. of Performance Awards	329	342
Granted, No. of Stock Units	136	141
Vested and settled, No. of Stock Units	(138)	(142)
Cancelled, No. of Stock Units	(16)	(8)
Performance awards, end of year, No. of Performance Awards	311	333
Performance awards, beginning of year, Weighted Average Fair Value	$ 26.07	$ 21.73
Granted, Weighted Average Fair Value	$ 36.71	$ 32.81
Vested and settled, Weighted Average Fair Value	$ 24.34	$ 22.54
Cancelled, Weighted Average Fair Value	$ 27.94	$ 22.40
Performance awards, end of year, Weighted Average Fair Value	$ 31.39	$ 26.07

XML

RECEIVABLES (Tables)

9 Months Ended

Feb. 28, 2014

Summary of Accounts Receivable

A summary of accounts receivable as of February 28, 2014 and May 31, 2013 is as follows (in thousands):

	February 28, 2014			May 31, 2013
	(unaudited)
Trade accounts receivable	$	135,145		$	152,030
Unbilled revenues		28,186			25,516
Allowance for doubtful accounts		(5,343	)		(5,438	)
Total	$	157,988		$	172,108

XML

Summary of Goodwill (Detail) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Feb. 28, 2014
Goodwill [Line Items]
Balance at May 31, 2013	$ 103,466
Acquisitions	11,336
Foreign currency adjustments	(688)
Balance at February 28, 2014	114,114
MS Segment
Goodwill [Line Items]
Balance at May 31, 2013	19,130
Foreign currency adjustments	611
Balance at February 28, 2014	19,741
IHT Segment
Goodwill [Line Items]
Balance at May 31, 2013	53,800
Acquisitions	11,336
Foreign currency adjustments	(1,448)
Balance at February 28, 2014	63,688
Quest Segment
Goodwill [Line Items]
Balance at May 31, 2013	30,536
Foreign currency adjustments	149
Balance at February 28, 2014	$ 30,685

XML

ENTITY WIDE DISCLOSURES

9 Months Ended

Feb. 28, 2014

ENTITY WIDE DISCLOSURES

14. ENTITY WIDE DISCLOSURES

ASC 280, Segment Reporting, requires we disclose certain information about our 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.” Through July 1, 2013, we operated in only one segment—the industrial services segment. Within the industrial services segment, we were organized as two divisions. Our TCM division provided the services of inspection and assessment and field heat treating. Our TMS division provided the services of leak repair, fugitive emissions control, hot tapping, field machining, technical bolting and field valve repair.

Effective July 1, 2013, we implemented a reorganization of our business divisions to conduct operations in three segments: IHT Group, MS Group and Quest Group. All three operating segments operate under a business segment manager who reports directly to Team’s Chief Executive Officer who operates as the chief operating decision maker. Segment data for our three operating segments are as follows (in thousands):

	Three Months Ended						Nine Months Ended
	February 28, 2014			February 28, 2013			February 28, 2014			February 28, 2013
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
Revenues:
IHT	$	85,149		$	81,227		$	290,409		$	272,372
MS		63,440			59,513			200,196			201,011
Quest		14,647			10,235			47,435			39,732
Total	$	163,236		$	150,975		$	538,040		$	513,115
	Three Months Ended						Nine Months Ended
	February 28, 2014			February 28, 2013			February 28, 2014			February 28, 2013
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
Operating income:
IHT	$	3,783		$	4,439		$	31,666		$	30,411
MS		2,939			3,346			17,120			21,049
Quest		1,170			(62	)		5,986			5,944
Corporate and shared support services		(6,892	)		(7,114	)		(21,786	)		(20,931	)
Total	$	1,000		$	609		$	32,986		$	36,473
	Three Months Ended						Nine Months Ended
	February 28, 2014			February 28, 2013			February 28, 2014			February 28, 2013
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
Capital expenditures:
IHT	$	2,187		$	1,398		$	5,602		$	6,253
MS		1,503			1,654			4,694			6,266
Quest		582			2,439			3,257			3,840
Corporate and shared support services		5,867			658			10,205			2,444
Total	$	10,139		$	6,149		$	23,758		$	18,803

	Three Months Ended				Nine Months Ended
	February 28, 2014		February 28, 2013		February 28, 2014		February 28, 2013
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Depreciation and amortization:
IHT	$	1,936	$	1,866	$	5,947	$	5,704
MS		1,801		1,771		5,391		5,165
Quest		1,343		1,038		4,033		3,193
Corporate and shared support services		205		125		605		392
Total	$	5,285	$	4,800	$	15,976	$	14,454

Separate measures of Team’s assets by operating segment are not produced or utilized by management to evaluate segment performance.

Revenues and total assets in the United States and other countries are as follows (in thousands):

	Three Months Ended				Nine Months Ended
	February 28, 2014		February 28, 2013		February 28, 2014		February 28, 2013
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Revenues:
United States	$	120,916	$	116,155	$	382,322	$	366,397
Canada		22,267		19,946		93,621		98,647
Europe		10,448		8,220		31,079		23,586
Other foreign countries		9,605		6,654		31,018		24,485
Total	$	163,236	$	150,975	$	538,040	$	513,115

	February 28, 2014		May 31, 2013
	(unaudited)
Total assets:
United States	$	339,751	$	334,579
Canada		63,124		68,164
Europe		39,912		35,734
Other foreign countries		24,710		21,726
Total	$	467,497	$	460,203