Team Inc. Aligns Business Segments

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Specialty industrial services provider, Team, Inc. (TISI), recently announced that it has structured its businesses into three different business groups to drive long-term operational growth and expand its business volume. The new business segments will be operational from Jul 1, 2013.

Team Inc. has restructured its business group from the erstwhile single Industrial Services segment into three separate business groups, namely, Inspection and Heat Treating Services, Mechanical Services, and Quest Integrity Group. Each business segment will be headed by a Business Group President, who will report to Phil Hawk, Team Inc.’s Chairman and CEO.

Art Victorson, who was previously serving as Senior Vice President of the TCM division, will now serve as President of the Inspection and Heat Treating Services division. Additionally, Pete Wallace has been appointed as President of the Mechanical Services division. Moreover, Quest Integrity Group, which was formerly one of the subsidiaries of Team Inc., will be headed by Jeff Ott.

Team Inc. is expected to derive the benefits of specialization from the alignment of the business activities into different groups. The company believes that the new groups will efficiently utilize its resources to enhance execution, thereby offering more growth opportunities across the organization and providing customized service to clients. Moreover, the company believes that segregating the technical, commercial, manufacturing, and operations support desk for each business group will ultimately benefit the company to fully exploit future growth opportunities available in each business group.

Team Inc. had recently trimmed its earnings guidance for fourth quarter fiscal 2013 ending May 31, to 52 cents and 60 cents per share, from its earlier guidance of 69 cents to 84 cents. We believe that management’s alignment of business activities might help boost the company’s revenue and profits.

Team Inc. currently carries a Zacks Rank #5 (Sell). Better stocks within the business services sector worth mentioning are Barrett Business Services Inc. (BBSI), ABM Industries Incorporated (ABM) and Rollins Inc. (ROL). While Barrett holds a Zacks Rank #1 (Strong Buy), ABM and Rollins each carries a Zacks Rank #2 (Buy).

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