Philip J. Hawk – Chairman and Chief Executive Officer Ted W. Owen - Senior Vice President and Chief Financial Officer

Arnie Ursaner - CJS Securities Analyst for Matt Duncan – Stephens Inc Holden Lewis - BB&T Capital Markets Mike Carney - Coker & Palmer

Welcome to your Team, Inc. teleconference. (Operator Instructions) I will now turn the call over to your host, Mr. Phil Hawk, CEO of Team Inc. Philip J. Hawk: My name is Phil Hawk, and I am the Chairman and CEO of Team. Joining me again today is Ted Owen, the company’s Senior Vice President and Chief Financial Officer. The purpose of today’s conference call is to discuss financial results for the company’s third quarter ending February 28, 2008. As with past calls, our primary objective is to provide shareholders and potential shareholders with an enhanced understanding of our company’s performance and prospects. This discussion is intended to supplement the quarterly earnings releases and our filings with the SEC. Ted will begin with a review of the financial results. I will follow Ted with a few remarks and observations about our performance and prospects. Ted, now let me turn over to you. Ted W. Owen: First, I would remind everyone that any forward-looking information we discuss today is being provided in accordance with the provisions of the Private Securities Litigation Reform Act of 1995. We have made reasonable efforts to ensure that the information, assumptions, and beliefs upon which this forward-looking information is based are current, reasonable, and complete. However, a variety of factors could cause actual results to differ materially from those anticipated in any forward-looking information. A description of those factors is set forth in the last paragraph of our press release and in the company’s SEC filings. Accordingly, there can be no assurance that the forward-looking information discussed today will occur or that our objectives will be achieved. We assume no obligation to publicly update or revise any forward-looking statements made today, or any other forward-looking statements made by the company, whether as a result of new information, future events, or otherwise. Now with that out of the way, let’s turn to the financial results. Revenues in the third quarter were $108.8 million compared to $73.3 million in the third quarter last year, or an increase of 48%. The revenue increase includes $10.8 million of revenues attributable to the Aitec acquisition that was effective June 1 and $3.3 million of revenue attributable to the LRS acquisition completed in January. The organic third quarter growth rate was 29%. Net income was $2.9 million in the quarter versus $2.4 million in last year’s third quarter, an increase of 20%. Earnings per diluted share were $0.15 versus $0.13 in last year’s quarter. Year-to-date, net income of $14.3 million is more than 50% ahead of last year and diluted earnings per share of $0.73 is up 46%. For a little more depth around our Industrial Service business, as a reminder, our Industrial Service business includes an array of specialized services related to the maintenance and installation of pressurized piping and process systems as well as specialized inspection services. The Industrial Service segment is organized into two divisions: TMS, which includes leak repair, hot tapping, fugitive emissions monitoring, fuel machining, technical bolting, and field valve repair services; and then TCM, which is comprised of field heat treating and inspection. TMS revenues in the quarter were $49.7 million versus $34.7 million in the third quarter last year, or an increase of 43%. Excluding the impact of LRS, organic TMS revenue growth was 34%. TCM revenues in the quarter were $59.1 million compared to $38.6 million in last year’s quarter. That’s an increase of 53%. Organically, excluding the Aitec acquisition, TCM revenues increased 25% in the quarter. Operating income for the Industrial Service business, which excludes corporate costs not directly attributable to field operations, was $11.1 million in the third quarter versus $8.4 million in last year’s quarter, or an increase of 33%. Field operating income as a percent of revenue was 10% in the current quarter, which was down about 1 percentage point from last year’s quarter. Overall operating income percentage was 6%, down about 1 percentage point from last year’s third quarter. The operating profit margin for the year-to-date was about 9%, which is similar to last year. While these margins combine with our attractive revenue growth result in significant absolute profit growth, those of you who have been following our company know that we expect our margins to increase with our growth, as we capitalize on operating leverage in our business. So what’s driving the flat margin performance? From an overall company perspective, for both the quarter and year-to-date results, the general picture is straight forward. Our overall gross margin has declined about 2 percentage points, that has been offset by lower SG&A cost as a percent of sales. There are two key drivers to the gross margin decline. First, is the impact of the acquired businesses, principally, the former Aitec inspection business. As mentioned in previous calls, the historic profit margins of this business have been lower than Team levels for the same service. On a composite basis, about half of the total decline in gross margin as a percent of sales is related to the addition of Aitec. Now effective January 1, we’ve implemented our whole suite of financial and personnel management tools within the former Aitec units, which we believe will result in margin improvement in these branches just like other new branches that we have added over time and implemented our systems. That will take some time however, as managers become familiar with the new management tools. The second primary driver of the gross margin decline in the quarter has been the impact of weak seasonal demand combined with a considerably larger business base, particularly in the TCM Division. While organic growth in TCM was 25% over the same quarter last year, it was nearly 20% less than the seasonally stronger second quarter. The challenge in the third quarter is that we simply have less volume to absorb the base cost of our business. This is not new or unique to this year, although the base of our business is considerably larger. Similar to last year, we struggled through late December and January with marginal results and then finished strong in February, as business activity levels ramped back up into the fourth quarter. Now with respect to our balance sheet and cash flows, first, as we previously announced, in order to finance our acquisition of Aitec, on May 31 of last year, we increased our revolving credit facility to $120 million, which includes $34 million that was drawn on June 1 to complete the Aitec acquisition. Additionally, in the second quarter, we borrowed $5 million to acquire approximately 50 acres of land, which will be used for future headquarters, manufacturing, and equipment center development. And then finally, in January, we borrowed about $19 million under our revolver to complete the acquisition of Leak Repairs Specam and other ones. With these three transactions in mind, at the end of the third quarter, our debt net of $12 million in cash was $88 million, which in spite of the additional borrowings in the third quarter for LRS was about the same as at the end of the second quarter. Our debt-to-EBITDA at the end of the third quarter was about 1.9 to 1 and our available capacity under our credit facility was $27 million. Now just with some other financial numbers. Capital expenditures in the quarter were about $3.5 million. D&A was about $3.1 million and non-cash compensation expense was $1.2 million. For fiscal 2008, we expect operating capital expenditures to be $15 to $20 million, which excludes the amounts expended for the land acquisition. With that Phil, I will turn it back to you. Philip J. Hawk: Now, I’d now like to add several comments to the financial results that Ted has reviewed with you. Let me begin with a comment about earnings estimates. As most of you know, we declined to make estimates of company performance on a quarterly basis. Instead, we provide annual earnings guidance that we reaffirm or update periodically as appropriate. However, I also understand that our analysts who follow us do make quarterly estimates of our performance and that the recently reported results for this quarter are below the consensus estimates. Just as we have discouraged analysts and investors from increasing expectations based on above Street estimate performance in past quarters, it would be misguided to reduce expectations for Team based on performance in this quarter that is below Street estimates. As we indicated in the earnings release, we are reaffirming our full year earnings guidance of $1.10 to $1.20 per share for our fiscal year ending May 31, 2008. Due to the seasonality of our business, our fourth quarter has historically been our strongest quarter in terms of both revenue and earnings. I am confident that it will again be the case this year. In fact, early in our fourth quarter, we are running at the highest activity levels in company history. Based on this level of billed hours, I think the upper half of our earnings range estimate is probable. In the remainder of my remarks, I will touch on quarter and year-to-date performance in greater detail to provide a better understanding of both where we have been, but also where we’re going. So let me begin with revenue. I continue to be very pleased with our overall revenue growth and market share growth. For the year-to-date, our total revenue growth is up more than 50%. Of course a portion of that revenue growth reflects the impact of our two acquisitions this year, Aitec Inspection Services in the Canadian market and Leak Repairs Specam in Europe. Together, these two acquisitions represent about $40 million in year-to-date incremental revenue. Excluding the effect of these two acquisitions, Team’s year-to-date organic growth totals more than $72 million or 33%. The picture is much the same when looking just at third quarter results. Overall revenue growth was 48%. Excluding the acquisitions, Team’s organic revenue for the quarter was 29%. So where is this impressive growth coming from? We continued to experience very broad-based organic revenue growth. Illustrating this point, all 13 legacy geographic regions of Team have revenue growth this year. Ten of the 13 regions have achieved double-digit revenue growth. All eight service lines have increased by double-digit growth rates this year. On a quarterly basis, the sources of growth remain broad-based. However, the details are little lumpier due to the timing of specific turnarounds and special projects. So how was Team achieving this growth? I think there are a number of significant contributing factors. We continue to benefit from strong market demand driven by the significant capital projects, particularly in the refining and pipeline sectors that are supplementing baseline maintenance demand. While it is difficult to measure this with precision, we continue to believe that total industry demand is approximately 10% higher as a result of these large capital projects. This raises a related question. When is this extra demand or wind at our back likely to end? Based on what we see already underway, we expect a significant mix of capital projects for at least the next few years. In the near term, we see very significant activity along the Gulf Coast and in Western Canada. In the mid-term, we also see new projects and related opportunities in the Mid-Continent and Rocky Mountain regions. We are also asking the question, what impact will the current credit crunch and likely U.S. recession have on overall demand? Frankly, we haven’t seen much impact on the industry to-date and don’t expect the situation to change very much going forward. While we can’t predict markets with certainty, there are number of reasons why we believe that any impact will be minimal. The non-deferrable maintenance nature of the primary demand for our services, the overall health of our major customer segments, and the inability to efficiently cancel capital projects that are already underway are just a few of those reasons. Another favorable industry trend is the continuing procurement consolidation, particularly by larger, multi-plant customers who increasingly prefer to work with fewer, larger, more professional service providers more extensively. In our highly fragmented competitive environment, where we face approximately 200 different competitors, our extensive North American network with over 80 service locations and our eight service lines give us unmatched service breadth. Approximately 25% of our total revenues are attributable to our alliance agreements with major, multi-plant customers. Both of these first two points speak to the favorable industry conditions or trends. But favorable trends don’t automatically translate into growth or success. We fully understand that it’s up to us to capitalize on them. Job one in that regard is continuing to provide outstanding service to our customers. All of us at Team understand that customers choose us and not vice versa. Every one of our more than 100,000 jobs each year is an opportunity to affirm and re-earn our customer’s confidence. I’m proud of our service mindset and commitment to service excellence. It truly is a team effort. As we have mentioned before, continued revenue growth also requires continued growth in service resources, technicians. I’m pleased to report that our total number of full time field personnel excluding the effect of acquisitions, has increased by more than 300 people or 15% since the beginning of the fiscal year. A number of initiatives and programs support this significant growth, expanded recruiting initiatives, both locally and company wide. Expanded training programs in all service lines, we believe we have one of the largest overall training programs in the industry. We conduct monthly training in all of our branches. In addition, we host more extensive skills training programs in all of our service lines at our central training facility in Alvin, Texas. This year, we expect to bring approximately 750 technicians to Alvin for one to two-week training programs. This year we have also launched a company wide management training program, aimed at improving the leadership, planning, communication and personnel development skills of all of our managers and supervisors across the company. We have received very positive feedback from the more than 300 managers who are currently participating in the program. Finally, our growth reflects our continuing aggressive business development efforts. Great service from our technicians anchors all of our business development efforts. Building upon the service reputation, we’re always looking for new customers and service opportunities. Each of our branches has active ongoing development efforts with both current and prospective customers. Frequently, they are also supported by our service line and market segment business development managers. Through these ongoing initiatives, we continue to build our business with all customer groups from small, local facilities through our major alliance accounts. We are pleased with this broad mix of business. Now let’s shift to operating profit and profit margins. In his remarks, Ted provided a substantial amount of detail on our profit margins and sources of change within the key components of gross margin and SG&A expenses. While the impact of the Aitec acquisition is new to this year’s results, my overall perspective on our current situation is much as it was last year at this time. We struggled with a low demand from our seasonally weak third quarter. On the flipside, we expect to benefit from the very high demand in our seasonally strong fourth quarter. Reflecting this perspective, our expectations of our business from a margin perspective remained unchanged, both for this year and beyond. I continue to expect overall profit margin for this fiscal year to be approximately 10%. We expect that profit margin as a percentage of sales to continue to improve in future years, due to both future growth and margin improvement in the acquired businesses. Let me end with a couple of comments and observations about our acquisitions this year. We’re delighted with both businesses and we are making excellent progress bringing them into the Team network. As mentioned earlier, the Canadian Inspection businesses are now fully operational on Team’s IT and financial systems. Leak Repairs Specam, our European business acquired in January, is already operational on Team’s IT network and expects to be converted to our financial system around the beginning of the fiscal year. Even more important, we are delighted with our new colleagues. They are energetic and talented individuals who also reflect Team’s core values in the conduct of their businesses. We’re off to a great start. To wrap up, we continue to be pleased with our overall business performance and outlook. Our revenue growth and overall business activity continues to be robust. We look forward to a strong fourth quarter and another year of record performance for our company. As a final comment before opening up for questions, I also want to recognize and thank all of my colleagues at Team for their key contributions to our business. Their commitment and devotion enables us to perform our services with the highest possible level of safety, to continually affirm and re-earn our customers confidence in our service capabilities, and to conduct our business in a manner in which we all can be proud. It is my pleasure to be associated with this great team. Let’s now open it up for questions.

(Operator Instructions) Our first question comes from Arnie Ursaner - CJS Securities. Arnie Ursaner - CJS Securities: Obviously a lot of the tone of this call is whether Q3’s results are really indicative of any change in your business. So to start with that, you mentioned that you saw a pretty good ramp from a slow start in January into February. Now that March is completed, can you give us a little better feel for the ramp you saw in the quarter and what you’ve seen so far quarter-to-date in March, both in terms of activity, but equally if not more important, in terms of bookings or turnaround work you expect to do? Philip J. Hawk: As I kind of alluded in some of my comments, we are one month into the fourth quarter and our activity levels were excellent. In March, they continue to ramp up as we projected they would, and our outlook for fourth quarter is very strong. Arnie Ursaner - CJS Securities: You are not basing your enthusiastic view about Q4 on work you hope to get, but literally work that’s essentially in hand for the most part in terms of turnaround work? Philip J. Hawk: That’s correct. I would for all our listeners, just remind you that, when we are doing turnarounds, the actual size of the work for any individual or specific project is really not known until we actually get into the work. So with discoverables, it may expand, frequently does, or occasionally, it contracts. So to say we have a precise forecast and we know to the last detail exactly what our revenues will be is not correct. But the overall activity level is very strong, the number of projects we are working in, the breadth of those projects is strong and we are optimistic. Arnie Ursaner - CJS Securities: You added roughly 100 or so technicians in the quarter. Is that correct? Philip J. Hawk: That’s correct. Arnie Ursaner - CJS Securities: And just to think about margins, when you bring in 100 people like that, are there lingering inefficiencies as you try to train these people or is it a relatively quick process? Philip J. Hawk: We are not bringing them in and expecting them to be expert lead technicians on day one. We do have a couple of week safety training and orientation program for people who are new to our industry before they can kind of reach helper status. As I look at our billed hours to total paid hours or kind of labor utilization level, they are comparable this year to what they were last year. So we are not seeing erosion of that due to either influx to technicians or our growth with those technicians. Arnie Ursaner - CJS Securities: Looking at your views about the balance of the year, we only have one quarter left. So if I take your $1.10 to $1.20 guidance, I mean it implies a range of growth anywhere from 19% to 51%, which is obviously a very sizeable range. You also indicated you expect a 10% operating margin for the year, if I heard you correct? Philip J. Hawk: Yes. Arnie Ursaner - CJS Securities: If you have a 10% operating margin for the year, you are implying a very sizeable jump year-over-year in operating margins, is that correct? And perhaps you can narrow down this range a little bit? Philip J. Hawk: Well, let’s kind of back up here a little bit. Just in terms of that, if we take the midpoint of the range. I believe it was $0.73 year-to-date, so the mid point of the range, $1.15 I believe implies $0.42 earnings for the quarter. That’s a little bit better than the second quarter. It’s kind of our mid range. And in our business, we have a lot of moving parts with lots of projects, lots of branches that we can’t measure or forecast with precision, and we still have to execute and do a great job. But given the profile of our market, our trend in terms of continuing share growth, the trend in terms of resource growth, being a little bit better than the second quarter, is not a heroic stretch for us. I believe that at least, as we look at our own internal kind of estimates, I think the 10% earnings guidance required for the year for EBIT margin requires something of the order of magnitude of about 12% or 13% for the quarter, which is, I think in line with last year. I think you saw our revenue guidance. I think we are approximately $130 million is our rough estimate for revenue for the quarter.

Our next question comes from Analyst for Matt Duncan – Stephens Inc. Analyst for Matt Duncan – Stephens Inc: Could you talk a little more about the fourth quarter, what you’re seeing right now as far as the utilization rates for your technicians. Philip J. Hawk: I don’t have that at hand. The utilization rates, we kind of measure it a couple of ways. But one really good way to look at that is kind of total billed hours to total paid hours. It is always good in our seasonally strong quarters and it is very good right now. I don’t have it for this week or for the month or day, but they run considerably higher. Our utilization kind of to straight time hours, it doesn’t vary as much quarter-to-quarter, but all the over time that we generate with the big project work of course leverages our whole network much more fully. Analyst for Matt Duncan – Stephens Inc: Obviously, the TCM gross margin hurt you in the quarter. Could you provide more color on the gross margins in the TCM segment, how much of that decline year-over-year was due to the Aitec acquisition versus seasonality? Philip J. Hawk: Actually, there is two time periods to look at. Ted talked to the quarter in which the two points total effect of gross margin on Team was related to the Aitec acquisition and half related to lower margins in the TCM Division in the quarter relative to corresponding third quarter last year. If you look at year-to-date on that same basis, actually the legacy TCM Divisions are flat. So the quarterly difficulty we had is not a chronic issue of kind of just our lower overall margins, but in our view truly related to the kind of happenstance or kind of weak season and dealing with that and with an ever larger base. Analyst for Matt Duncan – Stephens Inc: Thinking about the ramping up of the Aitec margin here to getting them in line with regular normalized TCM margins, what kind of timeframe on that and how much leverage you expect to get going forward then, now that you have them integrated on your software. Philip J. Hawk: Well, let’s talk about where we started. We started the year with the expectation that the Aitec businesses, and this excludes corporate overhead and all that, would be in about a 10% EBIT margin. While our expectations are even higher, but I think are running rate for all our businesses last year was in the 14% range. So I think that’s a kind of good place to where we started. That’s the gap we have to close, that four point or so gap. What we’ve seen from our other businesses is that it takes probably up to a year to get full closure of that less. So we’re not forecasting kind of major improvements in that in the next subsequent quarter. But what happens is when you get, again, in this good opportunity to talk a little bit about the fundamentals of our business and our model. Again, we have with our financial system; we have visibility on the utilization of our labor, kind of week by week in all locations. We have the visibility, the profitability of our job, of every single job and then of course any aggregation of that. That’s a wonderful kind of perspective with which to manage your business. You can see where the causes of any margin disappointments are and it’s descriptive not prescriptive, it certainly indicates where the leverage points are. And that continues to be a key focus of our business. We are highly decentralized. We have spent a lot of time and effort on all of our locations. It is kind of maintaining a really clear focus on our fundamentals and making sure that we are not seeing any deterioration in this. Analyst for Matt Duncan – Stephens Inc: Looking beyond the fourth quarter and end of ‘09, what do you say as far as the company’s outlook for growth, whether it’s through market share gains or just overall demand, what are you seeing right now as far as ‘09? Philip J. Hawk: I think the expectations are more of the same. You know, our compound growth rate for the last eight years is 25% a year in revenue growth. It’s been a little bit higher than last few years, as we kind of benefited from some of the kind of little stronger overall market. For all the success and growth that we’ve had historically, we project our markets or estimate our market share today is something around 15%. So, all these trends that we spoke to, about the consolidation of procurement, the extremely strong kind of structural position that we have in the market, if we execute, if we continue to be a great service company, and obviously that’s our focus and commitment, we should continue to see very attractive growth for as far as we can see. Analyst for Matt Duncan – Stephens Inc: But now that you have the LRS acquisition integrated, could you speak to the opportunities that are present there as far as the company’s growth in Europe? Philip J. Hawk: It’s really, we are very excited about the potential, its too early to talk to specific plans because we are still developing perspectives on that. But I think the overall perspective for which, why we did it is that, if you look at Europe in total, it’s a market that from a refining capacity, total GDP, total production capability, is very similar to North America. Therefore, we estimate the market potential is $2 to $3 billion a year and we continue to believe in all our early experiences with our new European friends and colleagues reinforce this notion that the procurement consolidation and integration that we are seeing in North America, we will see in Europe and we hope to be part of that, making that happen. So, we would discourage anyone from thinking this is going to be half of Team’s business anytime sooner, of that nature, but we are going to see some very attractive growth over time because, it’s just a great market opportunity and we have a very good base from which to build. Ted W. Owen: Jack, just as a point of clarification, I think you said that we had the LRS business fully integrated. That’s not exactly true. We’ve got our IT systems in place, we are making good progress. Our financial systems will actually be in place in LRS around the first of June.

And next question comes from Holden Lewis - BB&T Capital Markets. Holden Lewis - BB&T Capital Markets: First on the revenues, I think depending on how much acquired revenue flows into the fourth quarter, should be more than we saw in Q2 or Q3, I think from the acquired businesses it looks like you’re kind of suggesting that your guidance revenue growth in the neighborhood of that 10% range. Given the visibility and the promising things that you sort of talked about, I’m trying to get a feel for why you are sort of going with the boilerplate number here. You commented on strength broadly in the regions and by service line, could you also comment by your end markets? You touched on refinery pipe but also chem, petrochem, pulp, paper, the other markets that you are in; just give an update on where we’re at there. Philip J. Hawk: In terms of the revenue guidance, I will confess that we don’t spend a whole lot of time forecasting, so I will agree with you that I don’t believe that we are going to see 10% organic growth. If that’s the implication, it’s not my expectation to see 10% organic growth in the fourth quarter. I will say, we are comparing with a very, very strong quarter last year, but it’s certainly feels a little better than that. Back to the segment, health of segments, I don’t have at my fingertips good data in terms of our services by end markets. But I will give you just some comments that we’re picking up or just on the market outlook themselves. I think generally, it’s amazingly positive. Let’s just kind of go through them. Refining, you’ve seen some pre-announcements from some customers about earnings declines from last year. So what we have in the refining market is lower crack spreads than they enjoyed some really, very historically high crack spreads a year ago. But still pretty solid, to be candid about it. Our pipeline customers are strong. Chems are very strong. It’s interesting the weak dollar has precipitated some expanded export activity among the chems I think which is kind of helping their business out. I don’t think that has a huge effect, a direct effect in us because as you know, Holden, it’s kind of operating plant that generate demand not their margin. But again, we are rooting for our customers that we want them to be as healthy as they can be. Steel looks pretty good, pulp and paper, little bit weaker. Power is good and growing. So, there is a little bit of overview. Holden Lewis - BB&T Capital Markets: You talked about sort of the earnings coming in and lower crack spreads, and again, I stipulate that they’re generally in decent condition. But they are lower year-over-year. Any concern that may be as earnings have come down for the refiners, perhaps they have been more aggressive on the maintenance and perhaps less aggressive on more project activity. That may be pulling some of the maintenance forward and may be out there somewhere a drop off in demand just as they pull more of those maintenance projects forward in a bit more compressed period or has that not really feel like an issue? Philip J. Hawk: I understand the basis for your question. I can say that we haven’t seen it. What we did see several years ago when the margins spread out, we saw some specific deferrals where projects that were on the docket for a particular quarter were pushed. And so that was a clear reaction to that we saw. I am aware of no instance where a customer has brought forward activity because of low margins or really for any reason, but where the motivation was take advantage of a kind of a weak market. Holden Lewis - BB&T Capital Markets: I guess it is sort of the composition of the demand, whether it maybe shifts from one, whether it’d be capital and to maintenance or what have you, but you are really not seeing anything, because you said capital was pretty strong too, right? Philip J. Hawk: With the capital project again, a couple of kind of perspectives, one is a capital project probably you’re betting on an environment for the next probably 20 to 30 years as the customer, or whether the margin is a little bit higher or lower this week or this quarter, wouldn’t have a lot to do with that. Although to the extent that is affects your future outlook, it might affect whether you do some other future projects. Once you are underway though, once you’ve kind of broken ground or you have the activity underway, stopping it is really inefficient. So we just would not project anything that’s already launched to stop. Holden Lewis - BB&T Capital Markets: At this point, you are not seeing any of those deferrals you referenced the last time around either, that is not playing out either? Philip J. Hawk: Correct. Holden Lewis - BB&T Capital Markets: On the technician, you have been adding about 100 technicians per quarter, really for the last three was at a slower rate, I think prior to that. Philip J. Hawk: Maybe 300 for last year, I believe. If we go in to last fiscal year I believe, total number was about 300. So it is consistent with your point that we were a little lower rate last year. Holden Lewis - BB&T Capital Markets: This may be a little lesson as sort of how those move through the system, but assuming that you stay at that 100 person per quarter and perhaps you can update us where that’s the goal going forward or whether it slows down or speeds up? If the incremental investment is the same quarter-to-quarter, at what point would you start to think that the contribution will begin to eclipse the incremental cost? I mean, therefore, the technicians will no longer be a drag on the margins to any meaningful degree? Philip J. Hawk: So the premise is that the added technicians are depressing our margins, is that the premise of your question? Holden Lewis - BB&T Capital Markets: Since you’ve stepped up the investments, and since it takes some time to get them productive, going forward you will make the same investments every quarter. But at some point, the contribution of prior adds will begin to more than overwhelm that steady quarterly investment and where do you think that might occur? Philip J. Hawk: I understand the premise of that. What would be true if that were completely true, I don’t think it is. Is when we look at our utilization of that labor, we are not seeing lower utilization rates as a result of our addition of personnel. So that would be what you would expect to see because the training programs and all that, but even absorbing all of those training programs, our utilization rates or if you will, the proportion of total hours that we’re billing to customers is not decreased, has not decreased. So, I think that’s an observation to make. But I would say there is a corollary that probably is true is that when we’re adding very large numbers of folks and growing organically, again, I would submit our organic growth rates of 30% for this year are really terrific. And something I am very proud of is that level of growth does bring with it in terms at the branch level, a lot of management and leadership responsibility to bring those techs on, get them trained, get them out there and all of the assorted activities of just managing and handling a much bigger base of business in these locations. So, do we see some of that kind of tweaking in our tightness of our margin management? I think that’s not only possible, it’s probable on that. It’s not the lack of intention, but kind of prioritization or just having kind of that load of activity. So one of the things that we continue to work on and we will focus on and certainly it would be, I think, as we go forward, we expect to continue to spend a lot of time making sure that our basic job margin, labor utilization, and management of our business relative to our model are as good as they can be at all of our locations. Holden Lewis - BB&T Capital Markets: But you haven’t seen any slippage in terms of billable hours per employee or anything like that despite all the adds at this point? Philip J. Hawk: No, that’s correct. Holden Lewis - BB&T Capital Markets: Do those billable hours come in less profitably with the new people? Philip J. Hawk: It’s very hard to track it down to that level of detail. This is where in the mix issue we can look at job margin by customer, by branch, by region, by service lines. We can’t really look at it by kind of employee, if you will, on that kind of a basis. So, that’s kind of a tricky thing. I think one of the other things that’s just hard for us is the affect of mix because all customers have slightly different profit margins. All service lines have some variability within them. So, and the labor intensity of different service lines is different. So, when I start looking at a kind of aggregate metrics, those mix effects are significant and distort very small trends that we might be looking for. Holden Lewis - BB&T Capital Markets: Yes, if the billable hours data is good, then you are not seeing any evidence that may be your hiring is getting ahead of the demand at this point? Philip J. Hawk: No, not at all, what we focus on is job margins, which reflect the cost of our labor whatever we have, and as we add them. And then we look at as we talked through gross margin and then basically our indirect cost and SG&A and make sure that those expenses are; our goal is to manage those in line with our activity levels. Holden Lewis - BB&T Capital Markets: Then the feeling is that you can still add as many people as you can find, is it getting easier to find people given the construction bust or anything like that? Philip J. Hawk: It’s highly region specific. It is certainly some regions that have with the housing-related construction have some probably more available personnel. I would say you get on the Gulf Coast today, that’s not the case. And probably some other areas as well where there is very high demand for industrial service type personnel.

Your next question comes from Arnie Ursaner – CJS Securities. Arnie Ursaner - CJS Securities: One of the ways hopefully you could enhance margins over time is if you would be able to shift some of your industrial customers in periods like Q4 where you have a massive turnaround work. As you look into the backlog of work you have, are you trying to in fact move some customers into perhaps Q1, which is seasonally slower for you in the refinery area? Philip J. Hawk: Arnie, where the tail of the dog is these big projects that are big for us were probably 2% of the project. So the notion that a customer is going to move it for our convenience isn’t going to happen. What we did see though last year in the first quarter, it will be interesting to see how it plays out this year, as we had a stronger first quarter this year than we’ve ever had in the past. And the reason was is that the, not just a natural growth, but if you recall, a significantly greater growth, and the reason was that as the project work really continued all over through June, which was a month or so longer than historically has been the case. We surmised at that time, or speculated that it might be some load balancing that our customers are doing and we’ll look forward to seeing how that plays out this year. The broader issue that you raised is one that our customers are concerned about. Because it’s not just in our little niche of the world, but for the big maintenance contractors for the bulk of the cost and manpower for these turnaround projects, they are squeezed as well by some of the capital projects and things like that. So to the extend that they can spread that industry demand for that resource out a little bit, it helps them and helps their provider suppliers as well. So that very well may be the case we saw this summer and last year through June and we’re looking forward to seeing how it plays out this year. Arnie Ursaner - CJS Securities: One of the things you haven’t commented on at all in this call, Phil, is your new initiatives, one of the things that has made you an industry leader is sometimes you identify targets and in essence create the market and the opportunity. I know you’ve got several that are underway. Can you update us on how some of those are doing? Philip J. Hawk: Well, I think you if you see the breadth of our growth, all of that double-digit growth in all our service lines. They are going well. Some of the things I don’t have a lot of specifics to add or new information there to provide but let’s just recap some of them. We have the line isolation plug. That business is a kind of a derivation of our field machining activity. It’s worked out very well, so nice growth area there. In terms of industry segments, our pipeline industry, we’ve grown very significantly this year. We are making good progress in the waterworks industry. We’ve got other kind of hot tapping kind of related initiatives, expanding our capability to sub-sea and some of those areas and the Gulf of Mexico area. In terms of the heat treating, we continue to expand our fleet of mobile rig. We think we have the industry leading design in terms of mobile rig area. We’ve got projects and issues under way to expand our wireless capability and also in induction heating. We have a similar array of kind of initiatives in inspection related to some of the high-end inspection activity. So, we’ve got a lot going on, as a kind of been our theme before is that the success of any one of those isn’t that important to Team although we hope they’re all successful. It’s the breadth of our initiatives and we think it’s been a great service company with our structural advantages should drive at least the opportunity for attractive continued growth. Arnie Ursaner - CJS Securities: I know you’ve obviously made some important acquisitions internationally, and you have service agreements with several key customers. By having the international capability, have you seen any direct expansion from some of your service agreements cross-selling opportunities already from that? Philip J. Hawk: No, not yet. It’s just premature, Arnie. I think we will. We’ve had some of our initial conversations with some of our European customers who are also North American customers. But again we’ve literally our U.S. team kind of leaders that are working with our European business over there, have been over there maybe a total of three or four weeks. So it’s just early. Arnie Ursaner - CJS Securities: Shifting gears to Aitec for a second, I think you mentioned effective January 1 you had finally implemented the systems you needed to better manage their business, the management tools. Can you remind us of what happened when you acquired Cooperheat and sort of the process of bringing in your new systems to Cooperheat? How long it took for the managers to sign off on this and how it impacted your margins once you had them in place? Philip J. Hawk: While we’re getting better at it, the bottom line is that again we closed Aitec in June 1, seven months later, we have all our systems in place, and it’s not just a little nuance here. It’s not management systems for Ted and I, it is management systems and information for our managers on the field, on the ground, at our various locations. It’s so they have the information to continue to manage and to improve the management of their business because of the information. Cooperheat-MQS, we acquired them in, I think it was in August. And I think it was at least a year before we got the system in and probably another six months after that before we got it debugged enough to really to be an operational tool. So it was a year and a half in development and frankly, it was another six months to a year as we kind of really got full utilization of that. And I think we’re going to have some of that little bit of migration. We don’t instantly get it, when you have these new tools. But what’s happening is we have more success and again, also our success with integrating companies it is much easier to bring new folks in and just the enthusiasm to utilize these tools and the expectations that they are really going to be a positive event for them is much better. And so we’ve gotten the morale, the attitude, the leadership of our Aitec managers and enthusiasm for these new tools is high. So they are all levered and very candidly with just a few months’ data, they are seeing some things, they are challenging some of the ways they conducted parts of their business where they can improve some efficiency and focus on margins. So it’s just what we want. We want those groups, when you know where you are, you can get better and that’s our basic premise and that’s really what the tools are providing. Arnie Ursaner - CJS Securities: I have known you a while, Phil, and I am trying to sort through various comments you’ve made on this call. So one of them I think you made is that industry demand is probably 10% more than you thought is than it has been running. You mentioned the mix of capital projects over the next few years, which is robust as you’ve seen for a quite a while. You’ve highlighted the fact that you had 25% revenue growth over eight years and yet, you’ve historically have talked about 10% revenue growth. When I weigh all these various factors, it seems to me a pretty big gap between the performance you had of 25% and the historic long-term goal you’ve spoken about of 10%. Would it be fair to say at least over the next two, three years you see a much better environment than your 10% long-term historic view? Philip J. Hawk: Well, I think our opportunity is as much as we can earn and let me kind of speak to that. Let me clarify couple of your facts for all our listeners and then I’ll come back to your specific question about outlook. We have grown 25% a year historically. If you take out the effect of acquisitions, our organic growth I believe over a very extended period has been probably 15%, a little north of 15%. Our organic growth last year was 23%, our organic growth year-to-date this year is 30%. So we have been better in the last few years. The capital projects that I spoke to and that little wind at our back is not new to this year, it is new really a kind of a post-Katrina period, so really what we’ve seen is incremental demand over what we believe is to be a very stable but not high growth demand for our basic maintenance activities. We still believe that the basic driver of demand for our business is population of plants. We are a necessary evil. Plants don’t look to spend money on maintenance if they don’t have to. And so, our overall market outlook is really flat market, or fairly flat market, but again in the near-term, in the last couple of years and we think for at least a couple of more we got a little boost on top of that due to these projects. Now what’s really driving our opportunity though is the fact that our customers want to deal with us, or want to deal with companies like us, larger, multi-plant, multi-service, more professional service providers. That is driving market share growth. We are earning more of the business. But even with all of our success we’ve only earned about 15% of it in total. So with 85% that we don’t have we think there is a very long runway of growth opportunity, if we earn it. Now to earn it we’ve got to continue to be a great service company. We also need to continue to add resources. We are getting better at it, I was proud of 300 new technicians net last year and we’re on track, as we talked earlier of about 400 new net technicians in North America this year. That’s not nothing and that’s a lot of effort across our network and what we’re doing is getting more systematic and it’s becoming part of our routine is just to systematically grow. So I think if we continue to grow resources and manage that effectively, we continue to earn the confidence of our customers, our growth rate will be what we earn. It’s not that it’s our goal to be at 10% long-term that has being our model. Our observation has always been is that 10% is pretty good in a no-growth business and that if we only got 10%, our earnings growth rate ought to be in the 20% range. And as we look long-term multi-year earnings growth of more than 20% a year with no benefit of acquisitions going forward, we think that’s a pretty good model on a pretty good base. But our historical earnings growth rate has been much higher than that and we aspire to maintain that, if we can. So we are not trying to limit ourselves with our 10%, 20% model, I would just state that 10% growth and bringing all the resources in to do that wouldn’t be horrible. The outcome or the consequence of that would be 20% plus earnings growth, which again I would put up against most industries and most companies over the long run, even though we hope to do better.

And we have a question from Mike Carney - Coker & Palmer. Mike Carney - Coker & Palmer: What’s the DSO in the quarter, Ted? Ted W. Owen: It’s 87 days, it will be 85 days without the inclusion of our [Euro], its about the same as at the third quarter last year. Mike Carney - Coker & Palmer: And do you have revenue from Canada? Ted W. Owen: For the quarter? Mike Carney - Coker & Palmer: Yes. Ted W. Owen: For all Canada or for the Aitec business? Mike Carney - Coker & Palmer: All Canada. Ted W. Owen: Mike, I do not have that, it’s approximately 20%. Mike Carney - Coker & Palmer: I will just wait for that. What about the currency effect in the quarter on revenue? Ted W. Owen: It’s about $750,000. Mike Carney - Coker & Palmer: And I think you said the total number of techs at the end of the quarter? Ted W. Owen: I did the delta increase. I don’t have it right in front of me. It was 300 for the year. Mike Carney - Coker & Palmer: And then, I am a little bit confused on the TCM margins, now that you’ve talked about everything else. And I think that, you were talking about the overall company. But in just the legacy TCM branches, you had a number of years where those were weaker and then the last year or so you have gotten those improved. So the lower gross margin in this quarter was that a utilization issue or is that just a pricing issue. Obviously I understand that its extremely high growth that is tougher to manage. But, what’s the issue there and so basically can it be fixed in the short-term or is it something that needs to be improved over the long term? Philip J. Hawk: You are right, the TCM business has been steadily improving and it has been improving this year. There was more leveraged in SG&A but if you take out the effect of Aitec for example in the TCM business, the gross margins for the legacy TCM year-to-date is comparable, it’s flat. But we got leverage on the effect of the SG&A. So the real issue is really at the quarter, it’s an issue in the quarter not because the year. And I think it’s a fact it’s more seasonal because it’s more dependent on project works than our TMS division and off a bigger base our utilization levels per personnel were really roughly the same. It was just a slightly weaker quarter than it was a year ago. Mike Carney - Coker & Palmer: It’s just the short time period so there is nothing that you really need to look into, that you are concerned about like what had happened in the past. Philip J. Hawk: Correct. That is right. It’s just a reinforcement we got to execute well, all the time, everywhere. But in terms of being disappointed, have we drop the ball in this area or have a major remediation underway, no, there is nothing like that going on. Mike Carney - Coker & Palmer: And then I think you have mentioned this but in Aitec even though the gross margins are lower, are you getting the 10% operating margin that you expected? Ted W. Owen: Yes, we will be for the year. We didn’t do that for the quarter because it is a very weak quarter for them, they have high seasonality. Mike Carney - Coker & Palmer: In improving the gross margin at Aitec, do you expect that to come in line with the overall TCM margins? Obviously Canada is probably a lower margin environment because of the labor markets. But basically are you trying to make some gains, are you trying to get the gross margin to the 30% level? Philip J. Hawk: No, well our expectation would be similar to similar type services, so it will be more like TCM, because its labor intensity is similar to the TCM services, the inspection activity. Mike Carney - Coker & Palmer: Right, so they are 29%, 30%. Philip J. Hawk: I don’t start with premise that Canada should have lower margins than the U.S., that’s not been our experience in other businesses.

And we have a question from Holden Lewis - BB&T Capital Markets. Holden Lewis - BB&T Capital Markets: Obviously you will want to stay out of the realm of projections for next year, but just in principle, this year you have obviously had somewhat more modest incremental margin contribution than you’ve had in prior years and what do we do in 2009? Can we expect to see the incremental operating margin in ‘09 better than what we are seeing in ‘08 in light of the fact that you are still going to be adding technicians and as a matter of fact, you’ll probably be adding some costs for the headquarters? Can you speak to the fact that incremental margins are a bit lower than history and how and how quickly you might expect to see those to tick back up to historical levels? Philip J. Hawk: First of all, if you look as we normally do, real simple delta EBIT divided by delta revenue, if you do it on that basis and our incremental margin, to your point Holden, have them significantly lower than they have been historically. One key driver of that, of course is the acquisitions. We are not buying businesses that have incremental margins equal to the operating leverage of organic growth. So we need to separate that out of there and then look at the incremental leverage of organic growth, but that too is lower than it has been historically. Again, our goal is a 20% operating leverage. We were very close to that last year. It’s varied a little bit year-to-year. But we are lower than that this year. Our expectation is we are going to be back, I am not here to forecast 20% next year, but it ought to be better. Here’s a couple of benefits we are going to get. One is to the extent that we will still have growth but I think as our base get bigger and more mature I think we have opportunities to fine tune there. But we’re also going to see improvements from these acquired businesses, they kind of feed into that operating leverage equation. So, yes we still believe strongly in the operating leverage of our business model. Without giving you a specific number, we expect profit growth to significantly exceed revenue growth. Holden Lewis - BB&T Capital Markets: And the big piece of that is just the acquired businesses will improve? Philip J. Hawk: Well, that is a component of it, but I think there is just also inherent operating leveraging and continue to be inherent operating leveraging in our business. And frankly what we didn’t capture this year, I’d say to the extent that that’s added for our base, that’s improvement opportunity, isn’t it as we fine-tune our resources around our activities. Ted W. Owen: Just a point of clarification also on that relative to the headquarters facility, that facility actually comes on stream in fiscal 2010. Philip J. Hawk: I want to just wrap up. Thank all of you for your participation in this call and your continuing interest in Team. We look forward to our next conference call to discuss full-year results that should be in early August. In the meantime, have a good day.