Phil Hawk - Chairman & CEO Ted Owen - Senior Vice President & CFO

Matt Duncan - Stephens Inc Arnold Ursaner - CJS Securities Jeff Tillery - Tudor, Pickering, Holt & Company Rich Wesolowski - Sidoti & Company Matt Tucker - Keybanc Capital Markets Tom Crogus - Graham Partners David Yuschak - SMH Capital

Good morning ladies and gentlemen and welcome to the Team IR call. At this time, all participants are in a listen-only-mode. Later we will conduct a question-and-answer session. Please note that this conference is being recorded. I would now like to turn the call over to Mr. Phil Hawk. Mr. Hawk, you may begin.

Thank you Hilda and good morning to everyone. It is my pleasure to welcome you to the Team, Inc., Web conference call to discuss recent company performance. Again, my name is Phil Hawk and I am the Chairman and Chief Executive Officer of Team. Joining me again this morning is Mr. Ted Owen, the company’s senior vice president and chief financial officer. The purpose of today’s conference call is to discuss our recently released financial results for the company’s fourth fiscal quarter and full year ending May 31, 2009. As with past calls, our primary objective is to provide our shareholders and potential shareholders with an enhanced understanding of our company’s performance and prospects. This discussion is intended to supplement our quarterly earnings releases, 8-K, 10-Q, and 10-K filings to the SEC as well as our Annual Report. Ted will begin with a review of the financial results. I will then follow Ted with a few remarks and observations about our performance and prospects. Following our remarks, we will take questions from our listeners. With that Ted, let me turn it over to you.

Thank you Phil. First as I usually do, I want to 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 publically 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, for a discussion of our financial results, revenues for the fourth quarter were $121.2 million compared to $143.9 million in the fourth quarter last year that is a decrease of 16%. Net income was $5.6 million in the current quarter versus $9.4 million in last year’s fourth quarter, a decrease of 41%. Earnings per diluted share were $0.29 versus $0.47 in last year’s quarter. For the full year, revenues were $497.6 million, up 4% from last year and net income was $22.9 million, down 3% from last year. Diluted earnings per share were $1.16 compared to $1.20 in fiscal 2008. There are three points I want to emphasize regarding our results for the quarter and the year. First, the effect of the recession; second, the impact of foreign currencies; and then third, a comment on our tax rate. First, with respect to the recession, as Phil will emphasize more fully in his remarks, fiscal 2009 really was a year of two halves with the full brunt of the economic recession hitting our served markets in the second half of the year. To illustrate in most years, our second half operating results are fairly consistent with the first half of the year. Clearly that was not the case in fiscal 2009. Through the first half of the year, our revenues were up 21% over the prior year and our earnings were up over 34%. That completely reversed itself however in the second half with revenues being down 11% and earnings being down 37% versus the first half. Now that second half performance was in line however with our guidance in connection with our third quarter earnings call that we held in early April. Another point relative to foreign currency exchange rates principally with respect to the Canadian dollar, currency exchange rates had an unfavorable effect on revenue $4.5 million in the quarter and on operating income by about $400,000 in the quarter. For the full year, the unfavorable effect on revenue of exchange rate differences was $19 million and on operating profit was $2.2 million. Finally, with respect to our effective tax rate, in the third and fourth quarters we benefitted from a reduction from a reduced tax provision as a result of the recognition of R&D and HR related tax credits totaling about $800,000. This caused our tax provisions for the year to be 37% of pretax income just pointing out to you that we expect this tax rate to return to a more normal rate of about 39% in fiscal 2010. Now, with respect to our balance sheet and cash flows, CapEx for the year was $16.4 million that is down from $25.6 million last year. Depreciation and amortization for the year was $11.7 million and non-cash compensation costs or FAS 123R expense was $4.6 million. So our total adjusted EBITDA for the year was $57.7 million. At the end of the year our net debt that is total debt less cash was $68.9 million that is a reduction of $28 million in the course of the year. In the midst of this current economic recession, we continue to be pleased with the financial position that we are in. As of the end of the year we had about $68 million of unused capacity under our credit facilities, which again as a reminder do not mature until 2012. And so with that Phil, I will turn it back to you.

Thanks Ted. I have a number of observations and comments to add to Ted’s remarks. Team is very strong and healthy financially. Despite the worst economic environment since the Great Depression, Team posted the second best earnings results in the company’s history. EBIT margin as a percentage of revenues was about 8% down slightly from the preceding year but still very healthy. Reflecting the attractive low asset intensity nature of our business, after-tax return on equity was more than 17% and our balance sheet has never been stronger. Of course, as Ted reported, the full-year results reflect a tale of two very different half years. Following approximately 40 consecutive quarters of revenue growth, Team’s total revenues declined in each of the past two quarters. This reversal of performance trajectory raises many questions. Let me ask and answer a number of them here. Has the demand for Team services fundamentally changed? If yes, what is the new demand paradigm? If no, when can we expect a return to normal? As we have discussed in previous calls, approximately 85% of the demand for our services is directly related to the maintenance of existing pressurized piping systems and related equipment. The fundamental driver is the natural deterioration of piping systems that occur during operation due to the hydraulic, thermal and corrosive forces at work. As long as these facilities are operating they will continue to deteriorate and will continue to require maintenance services. The remaining approximately 15% of the demand for our services is related to the development and installation of new facilities or expanded capabilities within existing facilities. This project related demand is expected to fluctuate with the economic cycle based on industry expansion plans. So how is current demand tracking relative to this general understanding? Overall demand is lower than we would have expected. What we are seeing is an approximately 10% to 15% decline in spending for maintenance services at existing facilities. While perhaps a small portion of this is due to idle plants, we believe the bulk of this decline is simply due to deferral and minimization of near-term maintenance spending as our customers struggle to adapt to their very weak overall market environments. For customers within several industries that we serve, demand declines and profit margin declines of 50% and more have not been uncommon. These are extraordinarily tough times for many customers. This then leads to the next related question, is this a temporary condition (inaudible) normal? We believe it is the former a temporary condition. To argue otherwise implies that one of two scenarios is happening. One, that we should expect a large-scale closure of existing facilities in North America or two that our customers have been overspending on plant maintenance for the past 50 years. Neither of these scenarios is likely in my mind. So when should we expect to see a rebound? Obviously it is difficult to know precisely. Any specific forecast would just be speculation on my part. However we do know there is a limit to how long maintenance activity can be deferred or minimized. In past periods, we have seen turnarounds pushed out six months to a year but not much longer. We have not yet seen any improvement in our activity levels. Through the first month or so of the new fiscal year our activities levels have been stable but at a level below the prior year period. Simply said, we do not expect further declines in this level but we have not seen any improvement yet either. Has the competitive landscape changed? Are new or different service offerings threatening Team’s position? The short answer is that Team remains well positioned to not only maintain our current market position but to continue to expand our penetration. There are not any new significant competitors or new service offerings impacting our markets. It is true that many of our customers are currently very focused on how service providers like Team can help the customer improve its overall cost and productivity position. We believe these difficult market conditions will provide even more focus by our customers on service consolidation with fewer larger service providers. With our large service line offering and North American wide service network, Team remains extremely well positioned to benefit from these trends, which leads into the third key question what is Team doing to respond to this market downturn? Long term, Team is committed to a gross strategy where we continue to capitalize on both our outstanding service capabilities and the breath of our service network. As I remind my team colleagues, our 25% compound annual growth rate over the past decade was not a stroke of good luck. It reflects our sustained ability to earn an ever-greater share of the market. With less than a 20% overall market share today and the same basic market and competitive fundamentals there is considerable future growth opportunity ahead for Team. Of course we cannot and will not just stand by and wait for the market to improve. Without impairing our service capabilities or longer-term growth potential, we are balancing current cost and resources with current activity and revenue levels. Our initial staff and other cost reduction initiatives were taken in early February. Since then we have trimmed our staffing further and taken other steps to reduce compensation and other related expenses. We are seeing the benefit of these steps in our cost structure in the just-completed fourth quarter and expect even further benefit in the current fiscal year. We expect that total support cost in the current fiscal year 2010 will be approximately $10 million less than the year just completed. I would now like to make a few comments about the investigation of one of our branches in Trinidad. As reported in our recent 8-K filing, we believe that Team employees in Trinidad made improper payments related to Team work for government owned enterprises, which may be in violation of the SCPA [ph]. Based on current information, we believe that only a single branch in Trinidad was involved and that no team personnel outside of that branch had any involvement or awareness of the scheme. We have self-reported the potential violation to the US Department of Justice and the Securities and Exchange Commission and we intend to fully cooperate with them. While the Trinidad branch is only a very small part of Team and we believe the payments themselves are also small, the actions discovered are serious and will not be tolerated. They are not consistent with our core values even a single inappropriate action reflects poorly on our entire company. The branch manager and other in the Trinidad branch who were determined to be directly involved in these actions have been terminated. We are currently in the process of developing and implanting a number of enhancements to our prophecies to improve our controls and oversights related to these matters. Looking ahead to the current fiscal year, we expect first half activity levels to be similar to the last half of fiscal year 2009 with some modest improvement in the second half of the year. We are currently projecting that total Team revenues will be between $460 million and $490 million for the year. We are projecting earnings to be between $0.85 and $1.05 per fully diluted share. Our near term focus this year is on outstanding execution in every respect. All of our branches are working hard to find and earn every service opportunity available. At the same time, we are fully funding and maintaining all of our current business development initiatives. On the cost side of the equation, we are closely managing our business branch by branch focusing on the key fundamentals of job profit margins and labor utilization. We see no reason why we cannot have attractive earnings and earnings margins at the projected volume levels and we expect to do just that. We are committed to staying strong financially, operationally, and strategically regardless of our market environment. Let me wrap up with a few final comments before we open it up for questions. The severe recession is likely to continue affecting our business and opportunities for a while longer but it is not changing the basic fundamentals of our markets and Team’s competitive position. We expect to stay strong financially and maintain attractive profitability while we work through these difficult market conditions. As our markets move back to more normal conditions, we look forward to restoring our growth, orientation and momentum. As always, we fully understand that all opportunities that Team may enjoy regardless of market conditions result from our customers choosing us not vice versa. Every one of us at Team is committed to re-earning and affirming that customer trust and confidence with every service opportunity. We have exciting opportunities ahead of us but we still have to go earn them. That concludes our initial remarks, Hilda; let us now open it up for questions.

Thank you Mr. Hawk. (Operator instructions) Our first question comes from Matt Duncan from Stephens Inc. Please go ahead. Matt Duncan - Stephens Inc: Good morning Phil and Ted and congrats on a pretty solid performance this quarter in spite of market conditions you are facing.

Good morning Matt. Matt Duncan - Stephens Inc: The first question I have got is with regard to pricing, it looks to us like from the gross margin you put up in this quarter it seems to be holding up fairly well. Can you just give us some general comments around what pricing for your services has been like in these difficult market conditions?

I think your general condition would be our conclusion that it is holding up fairly well. As we mentioned and alluded to, these are extremely tough times for our customers and many of them are asking for help and kind of visiting with us and really all of their service providers looking for ways to improve their cost and productivity. We are actively engaged in those conversations. Again our thrust with these customers is to fully engage and share with them and talk through all aspects of these issues and their needs and our circumstances. A couple of things that we really focus on is because I think there is sometimes an impression in some of these customers that there have been very, very large price and margin increases over the past several years that they are again hoping to recapture or kind of I guess reflect the deflation back in their cost structure. That frankly just is not the case with us and so one of the things that we share with customers is just what our historical price increases have been with them and we share with them our margins, obviously we are a public company and walk through that. So that with the context of that then we work through what are some reasonable ways we can work together that are win-win. We do fine-tune rates from time to time with individual customers but our real trust where the real leverage is kind of leveraging volume on our kind of a broader presence. And I think kind of combined with all of that what we expect is not a material change in our job margins overall but again we need to again stay very close and responsive to our customers and responsive to their needs and that is what we are trying to do. Matt Duncan - Stephens Inc: Sure, thanks that is helpful Phil and then sort of along the same vein, in this environment are you seeing any improvement in your penetration to master service agreements, when you look at the ability for your customers to sort of reduce price through volume, are you seeing any impact from the environment on your master service agreement?

It is hard to read it right now on the short run because of just the dramatic demand swings, so it is hard to know that in total. If I look at our alliance agreements in total for the last fiscal year, they grew slightly larger and faster than the market in total, our revenues in total, so I would say that is a positive indicator. But in terms of kind of whether I can point to very specific situations where work has been shifted from another service provider to us directly related to say that these conversations in the last several months no, I cannot point to many. Matt Duncan - Stephens Inc: Okay and the last thing here and then I will hop back in queue, when you look at the range of your guidance, now I am just curious if you can kind of give us an insight into sort of how you came up with the low and the high ends and maybe another way to ask this would be does the low end of your guidance assume that you would have to see further end market deterioration to sort of comment at the low end of that guidance?

No, I do not think so. I think if you look at our kind of second half of the year plus the kind of cost reductions that we have taken out, I have not done the complete kind of numbers but they will probably be pretty close to the low end of that and I think the low end is related to the volume levels. Matt Duncan - Stephens Inc: Okay to see sort of the midpoint or higher guidance, you would need to see some improvement in the second half of your fiscal year but at this point I guess from our perspective that should be expected given that there has been so much maintenance deferred over the last year and there likely will be over the next six months?

Yes, I think, I might state it slightly differently is that the key driver for us for significant upside is volume and we are expecting a little as you can see in our revenue numbers in the second half as we said earlier and that is really going to be an important driver for us. Matt Duncan - Stephens Inc: Okay, thank you Phil, I appreciate it.

Our next question comes from Arnold Ursaner from CJS Securities. Please go ahead. Arnold Ursaner - CJS Securities: Hi good morning. I know you do not comment on quarterlies but want to at least get a little better feel for the trends that we are having as we enter into the current quarter, normally your June and July activity would be impacted by carryover work that you had in Q4 plus industrial activity which is less tied to turnaround, given the economic environment, are not both of those quite challenging for you entering the current quarter?

Yes, well said, As you know our first and third quarter are always challenging because they are just lower, as you say the less turnaround or kind of the lower volumes typically because of the seasonality, we came out of the fourth quarter with very low turnaround activity in that quarter relative to historical levels so we did not bring much in and as I said we are running kind of – we are not continuing to decline but we are running at low levels relative to historical run rates. Arnold Ursaner - CJS Securities: And again I know you are aggressively attacking your headcount but one would also assume that you are keeping the more experienced people that tend to perform better, in other words over the last few years as you have been through a rapid growth phase you have been adding less experienced technicians and diverted some of your experienced technicians to helping them grow. How should we think of productivity in the upcoming year from your existing technicians and how do you envision headcount growth over the course of the year?

Just a few facts here. Since we kind of peaked at the end of the second quarter, our total full-time headcount is down about 300, which is I think about 8%. So that is a mix of technicians but also support activities. As it relates to technicians, I would just point out that we have a lot of flexibility in our cost structure there due to the use of overtime. So we are focused very high, we continue to be very focused on labor utilization of our, if you will, our technicians, our variable cost there to maintain that in an attractive level and we are doing that with some reductions of staff but also there is significant reductions in the amount of overtime available to those individuals. So as the market comes back, we get the benefit of I guess the capacity that overtime provides. And then we are then quite confident that we can add back resources in line with any demand growth scenario that we might envision. That would be as it has been in past years a very happy problem and challenge to deal with. Arnold Ursaner - CJS Securities: And you do feel there are more than enough people out there when you need to re-hire them?

Yes, and your comment that – I guess speculation is exactly right is that when we have had to make reductions they tend to be less senior and less experienced individuals in our technician ranks. Arnold Ursaner - CJS Securities: One more comment about Q2 or maybe some help regarding Q2, last year’s Q2 was an absolute booming quarter for your record levels, extraordinarily good margins, as you enter Q2 this year which will have some turnaround activity, do you expect the more modest intensity that you saw in Q4 to continue in Q2?

I guess that is what our guidance is based on, yes. Arnold Ursaner - CJS Securities: Okay, thank you very much. Yes, see you at our conference (inaudible).

We will go to our next participant; it is Jeff Tillery from Tudor, Pickering, Holt & Company. Please go ahead. Jeff Tillery - Tudor, Pickering, Holt & Company: Hi Good morning.

Hi, good morning.

Hi Jeff. Jeff Tillery - Tudor, Pickering, Holt & Company: I guess as you look at kind of upcoming turnaround fees [ph] and do you see kind of a continuation of the less intensive, kind of less hurried and maybe not working 24 hours a day turnaround that you witnessed kind of in the latter half of 2009, is that something you see continuing for right now?

I have not heard many reports on that in terms of the schedules that the plants are going to pursue. We have a number of turnarounds on the schedule for the fall. So it is not that there are none and we expect a lot of them to go kind of in the same historical levels. What is just hard to know at this point is whether as they did in the spring whether some of those get pushed again to next spring. But in terms of kind of whether they are being done on street time or on a 24-hour clock, I do not have a lot of insight on that at this point. Jeff Tillery - Tudor, Pickering, Holt & Company: And that is something that does not firm up until it kind of right before it actually occurs, is that fair?

I think so and recall that our amount of activity any specific turnaround also gets firmed up really on the front end of the turnaround because a lot of our mechanical service work is going to be related to the discoverables when the plants are opened up. Jeff Tillery - Tudor, Pickering, Holt & Company: Okay, that is fair enough. My last question, just on the cost savings, for $10 million incremental year-on-year, at what sort of run rate would you have been at in the fourth quarter?

You know there is some seasonality in some of those expenses, just kind of where things fall so I think that is a little tough to estimate but if I was looking at total SG&A for the year, what do we – still I get the right number Ted, do you have the total SG&A for the year? $116 million is that?

$116 million.

It is $116 million SG&A, I think roughly we are looking at $106 million would be kind of our expectation. Jeff Tillery - Tudor, Pickering, Holt & Company: Okay, great, thank you guys very much.

Our next question comes from Rich Wesolowski from Sidoti & Company. Please go ahead. Rich Wesolowski - Sidoti & Company: Good morning, how is it going?

Good morning Rich. Rich Wesolowski - Sidoti & Company: Your sales are down 15% here in Q4, it looks like double digits at least in the first half, you mentioned your headcount looks more like 8% and even some of that is corporate support [ph] I know those are round numbers but is it accurate to say that you are going to run underutilized in the first half in anticipation of better business in the second half?

I guess what I look at in terms of utilization, we are looking at labor rate utilization, kind of our technicians and I do not expect that to be different than historical levels. And as I mentioned in earlier call I think we are going to do that. There will be less overtime available for our technicians because of the softer market. What we are being a little more aggressive on is taking support activities down, particularly corporate support activities down to what we think are kind of overall levels that we are going to see this year and we have been more aggressive frankly in some of those activities. Rich Wesolowski - Sidoti & Company: Okay. You mentioned lower compensation in your prepared remarks, have you begun to lower wagers for your texts or are there any plans to do so?

No, we have not but we have put the brakes on increases, we have taken a very conservative posture there. We have also made some adjustments to our benefit programs to reduce cost. Rich Wesolowski - Sidoti & Company: Okay. Second half versus first half your at least relative optimism for the second half is that based more on any actual conversations to customers or more just on the phase that they can only push out the routine maintenance for so long?

I would not say so much on direct inputs from customers, individual customers, I think there is a fairly strong consensus in the industry I am going to say general construction in the maintenance industry not just our specific niche of that that the turnaround schedules are going to be very strong in the spring. Rich Wesolowski - Sidoti & Company: Okay. And then lastly the recession has chopped valuations for all assets and companies, are you worried or at least alert to the potential that someone could come in and aggregate your regional competitors or some of the service line companies and begin to replicate what Team now has?

Am I worried about it? No. Is it possible that someone could buy? Yes, if you have enough money you can buy whatever you like. I think a huge part of our advantage is execution, is having a consistent culture, consistent service delivery across our network that is very difficult to just do by slapping some companies together. So I think we will compete well in that eventuality although I have no evidence to think that is going to happen. Rich Wesolowski - Sidoti & Company: Perfect, thanks.

Our next question comes from Matt Tucker [ph] from Keybanc Capital Markets. Matt Tucker - Keybanc Capital Markets: Good morning gentlemen.

Good morning Matt. Matt Tucker - Keybanc Capital Markets: Got a few questions on behalf of Tahira. Beginning with, could you comment on any difference you are seeing in terms of activity levels among the different industries you serve and also in terms of different regions if you have seen any?

We have seen – yes, there are differences but I do not think they are very significant. I would say they are more the reflection of just timing of individual events, individual plants and customers. The most severely impacted from an economic standpoint I think have been, we would all kind of agree, would be the petrochems and the steel industry, but you read the refining and refining is a huge segment for us and several of the independent refiners reported losses last quarter for the first time in years, and years, and years. So obviously they are quite impacted as well. The impacts that we saw in the fourth quarter, we saw all segments turning down their activities even the ones -- again it is not a huge segment for us but even the ones that I thought would be the least impacted by the recession the power industry I saw several articles over the weekend indicating that the reduced industrial activity was reducing their demands for power and affecting their economics as well. I think it is just such a deep and pervasive recession that I think just about everybody is feeling the pain in trying to respond to that. In terms of geographic changes, again I think it is just the timing of individual facilities, we have kind of differences but I do not think they are really significant and we are not seeing one part of the country doing better than another from that standpoint. Matt Tucker - Keybanc Capital Markets: Okay thanks. To follow-up on a previous question, you had mentioned that expectation and some improvement in the fiscal second half was not necessarily tied to direct customer input. I was curious when would you expect to have those discussions with customers, when do they typically start to indicate what their calendar 2010 plans are going to be? Have they indicated anything yet in one way or the other?

I think we always have information regarding the preliminary plans of customers so we are aware of significant number of turnarounds that will be coming in the spring, we are also aware of significant number in the fall, I would just point out that we at this time a year ago we had an expectation of a very strong spring last spring. So the point I am making is that the fact that there is planning going on about turnaround activity, we are taking a kind of a wait-and-see activity towards it, we are going to be ready but we are not kind of counting on something until it happens, which is the severity of the economic pressures on all parties here that is the prudent course. Matt Tucker - Keybanc Capital Markets: Right, thanks a lot that was very helpful.

Our next question comes from Tom Crogus from Graham Partners. Please go ahead. Tom Crogus - Graham Partners: Hi guys. Just wondering what are your thoughts, I have several questions but what are your thoughts on capital expenditures for this year?

They will be less. I think kind of in the $10 million to $15 million range would be kind of a reasonable expectation and the reason they are less is not a change in strategy or that we do not have the resources. It is frankly the bulk of our volume, our spending historically has been for capacity expansion and with the pullback that we have had we just do not have the need. Tom Crogus - Graham Partners: Okay. And then one other kind of just macro observation that bugs me a little bit is that you know the refineries are a fairly large segment of your guys’ business and refineries had great years for three years in a row while they were adding capacity etc, etc, now gasoline demand is down, crack spreads are terrible and back to kind of where they were before the three-year positive cycle which is what we just went though. Is there, I guess that is what I am startled at, is there a chance for you to shift focus on growing a customer base in a different segment? I was just wondering what your thoughts were around that issue of is there any new segments you guys are going to attack to grow the business?

Well a couple of things, you have two premises there, one is that you think the amount of opportunity for Team or anybody in the refining segment will be less than it has been historically because of the new environment that our enemy stay in and secondly are there other opportunities in other segments, I might challenge your premise a little bit that just because the crack spreads are narrower than they have been in the last three years that we will see less service activity. Again I strongly believe that if you look at just general maintenance that it really is not principally driven by crack spreads, to the contrary it is driven by kind of the number of plants, the population of plants operating, and while we will see some additional closures of very small refineries as we have for the last 25 years, I am of the belief that the major refineries, the large significant refineries doing the bulk of our business that the probability of any of them closing or very many of them closing is very, very low. So I think it is going to continue to be a great segment for us and we see a lot of continued opportunity there. Having said that, we want to have a great penetration and position in all segments and we probably have a higher market share in refining than we do in some of the other segments. So we are making a very significant push to increase our presence and penetration in all kind of market segments. I think the big ones would be where I think were a little less penetrated would be power, pipeline, industrial services, some of those areas, we are expected to continue to grow our penetration. Tom Crogus - Graham Partners: Okay and just to qualify your comments on since we have seen two months of this quarter, you basically are saying that revenues are down to a similar amount as they were in this quarter?

Yes, they were flat, they were not continuing to decline but were at a lower level. Tom Crogus - Graham Partners: Okay, thank you.

But we do not --

We are refining [ph] at the same rate.

What we have just to be clear, what we have are – our best tracker of that is activity levels, hours, billed hours, utilization levels and those tend to be at the same levels, similar. Tom Crogus - Graham Partners: Okay, thank you.

Our next question comes from David Yuschak of SMH Capital. David Yuschak - SMH Capital: Good morning guys. As far as that $10 million, help me on it, is that primarily going to come out of SG&A expenses then for the year versus what you did?

Yes. David Yuschak - SMH Capital: And do you think that is more of a permanent reduction then as far as you see it or is that going to maybe ramp back up if you can say for instance the second half getting a bit better economic conditions?

Certainly some of it will come back as volumes come up but yes it would certainly be our hope that as we kind of improve some of our processes that we can get some leverage off to increase volume from here. David Yuschak - SMH Capital: Okay. And then internationally is the problems that are happening worldwide have any problems for you guys trying to gain further traction maybe to grow that business internationally particularly over in Europe?

I think the environment in Europe, the market environment is similar to what we have experienced in North America. We are seeing again obviously we have got global industries of the petrochemical, refining, steel and kind of areas and they are all similarly impacted in those markets but we are continuing to be successful over there, I guess are dealing with the issues in a similar way that we are dealing with them in North America and have the same optimism about the fact that the market structures have not changed and we are continuing to be enthusiastic about our growth potential over there and continue to explore ways to do that. David Yuschak - SMH Capital: Now as far as that goes, to gain some good scale over there will it require you to do anything different at all to try to increase your visibility if this slowdown would kind of drag itself out?

I think what we are essentially in two countries right now in the Netherlands and Belgium and it is our expectation that we are going to branch out from there and I think it will be a combination of some organic growth but also we will be – I think it is likely that we would purchase kind of I guess businesses in new markets to kind of extend our geographic presence. David Yuschak - SMH Capital: So the probability may be because of the conditions, acquisitions might be more of a strategy here as we look into maybe the second half of the year.

I think acquisitions are going to be part of the strategy but I would not tie it to the conditions. I think they have been all along when we went to Europe again starting up in a new country without any presence is a difficult effort. David Yuschak - SMH Capital: One last question, as far as your downstream business in the year, what percentage of the revenue did downstream represent?

Downstream, if you take all energy related businesses, this is refining, petrochem, power, pipeline and that is kind of mostly downstream, maybe a little midstream with power, I think our estimates have been that is roughly three quarters of our business. And the other quarter or so would be I am going to say heavy industrials, steel, aluminum, pulp and paper, and municipal, a lot of (inaudible) of people of big steam systems. David Yuschak - SMH Capital: Okay, thanks a lot.

We have a follow-up from Matt Duncan from Stephens Inc. Matt Duncan - Stephens Inc: Yes, just one real quick housekeeping item. Ted, I missed your guidance on tax rate going forward, what do we need to be using in our models?

I would use about 39% Matt Duncan - Stephens Inc: Okay, thanks guys.

We have a follow-up question from Rich Wesolowski from Sidoti & Company. Please go ahead. Rich Wesolowski - Sidoti & Company: Thanks. You had estimated on previous calls that construction projects or your services relating to construction projects are about 15% of sales at the peak, were you still working off much of that backlog in the second half, where does that 15% number stand now?

I think that is probably half of what it was. That is how we kind of worked back to where we think the core of the maintenance demand declines are. Our declines in volume are far greater than what you could attribute to project declines. Rich Wesolowski - Sidoti & Company: Are the construction projects typically more time sensitive and perhaps more profitable than routine maintenance?

No, I would not say that. I do not see a big difference in them from our standpoint. Rich Wesolowski - Sidoti & Company: Okay, I am just looking back to say fiscal 2008 when you did a revenue number that approximated the midpoint of what you are looking for now when you did say $1.20 in earnings and here you are looking for $0.85 to $1.05, after the SG&A cuts it cuts down to the gross margin line.

Yes. Rich Wesolowski - Sidoti & Company: Can you explain what is different in your business now, is that the pricing, utilization, the mix that would result in that gap?

I think first of all we have more facilities and resources than we had then because we have added Atech, we have added our European operation, so I think our models or guidance are based on a little bit or lower gross margin or kind of lower kind of branch EBIT margin than we would have enjoyed in ’08. I think the broader premise of your question I agree with completely is that in the long run is there any reason why we should not have the same profitability regardless of what the market environment opportunities are and I think the answer is yes, we should because we should adapt to whatever the environment is. I think our guidance reflects that we cannot adapt instantly and completely to the declines that we have had in just the last six months. Rich Wesolowski - Sidoti & Company: It is exactly what I was looking for. Thanks.

We have a follow-up question from Matt Tucker from Keybanc Capital Markets. Matt Tucker - Keybanc Capital Markets: Hi guys, I was hoping you could just comment on activity levels you are seeing up in oil sands area, have you seen any pickup in activity in the capital projects side, if not in the meantime what the maintenance activity levels have to make up there?

I think in terms of capital project activity there is virtually none going on right now up there. There is (inaudible) there is rumors in some planning activity by some of the owners up there of restarting projects that were deferred or postponed last fall but they are not started yet so you know I guess the caution I would have is let us wait till they are started and we can be excited about that and just in terms of maintenance activity the plants that are up are operating. We have some ongoing maintenance activity, it is not particularly robust at this point though. Matt Tucker - Keybanc Capital Markets: Okay thanks.

Yes.

Mr. Hawk and Mr. Owen, at this moment I am showing no further questions?

Thank you Hilda. Then let me just wrap up and thank everyone for their participation in the call and your continuing interest in Team. We look forward to updating you on our progress during the first quarter of our new fiscal year around October 1. In the meantime everyone please have a good day and good bye.

Ladies and gentlemen, this concludes your conference call. Thank you for participating. You may now disconnect.