Welcome to the Team IR Call. My name is Sandra and I will be your operator for today’s 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 will now turn the call over to Mr. Phil Hawk, CEO. Mr. Hawk, you may begin.

Thank you, Sandra, and good morning everyone. It’s my pleasure to welcome you to the Team Inc. web conference call to discuss recent company performance. As indicated my name is Phil Hawk, I’m the Chairman and CEO of Team. Joining me again today is Mr. Ted Owen, the company’s Executive 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 fiscal year ending May 31, 2010. 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. As Sandra indicated following our remarks we will take questions from our listeners. Ted let me turn it over to you.

Thank you, Phil. First as usual 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’ve 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. With that now to the financial results. First let me say that the results for fourth quarter and the year-to-date period are impacted by three separate non-routine charges, including two that that we have previously disclosed. The previously disclosed matters pertain to the FCPA investigation and to the devaluation of Venezuelan currency. The third item relates to severance cost associated with additional cost reduction initiatives that we completed in the year in the fourth quarter. I’ll talk more about each of these non-routine matters in just a moment, but my following comments about operating results will be on an adjusted basis that is excluding the impact of those charges and credits. Revenues for the fourth quarter were a $125 million which is up 4% compared to last year’s fourth quarter. Adjusted net income was $6.1 million in the current quarter versus $5.6 million in last year’s fourth quarter and adjusted earnings per diluted share were $0.31 versus $0.29 in the fourth quarter of last year. Now let me just describe those non-routine charges that affected our results for the quarter and for the year. First, as I said during the fourth quarter we implemented cost reduction initiatives, which will result in an additional reduction of about $6 million of indirect and SG&A cost in fiscal year 2011. There wouldn’t have been by the way much impact in the current fourth quarter relative to those initiatives, which we're taking near the end of the quarter. Also the impact would be about half and half between indirect and SG&A cost next year. These initiatives included the elimination of nearly 80 indirect and SG&A positions from our organization, severance associated with these actions of about $700,000 is included in SG&A expense in the quarter. The second matter is the FCPA matter, as we previously reported our audit committee completed its independent investigations and the results of that investigation have been communicated to the SEC and to the Department of Justice. Their investigation concluded that improper payments of limited size were made to employees of foreign government owned enterprises in Trinidad, but determined that the improper payments were not made by or authorized by employees outside of that one TMS Trinidad branch. The total professional fees associated with the investigation were approximately $3.2 million. And finally the third matter is the Venezuelan currency devaluation. Effective as of the beginning of our third quarter of fiscal 2010, we began to account for Venezuela as a highly inflationary economy. Accordingly, currency fluctuations between the Bolivar and US dollar are now recorded in the company statement of operations. In January of 2010, the Venezuelan government announced a significant devaluation of its currency and on a year to-date basis we’ve taken a charge of $1.7 million relative to the devaluation, which is reflected as an element of other expense below the operating income line. By the way our total remaining investment in Venezuela is about $1.5 million. Now let me shift to a discussion of our balance sheet and cash flows. Capital expenditures were $2.2 million for the quarter and $7.7 million for the year, that’s down from $16.4 million last year. Depreciation and amortization expense was $3.1 million for the quarter and $12.5 million year to-date and non-cash compensation cost was $1.1 million for the quarter and $5 million for the year. Total adjusted EBITDA was $15.1 million in the quarter and $46 million for the year. Please note that adjusted EBITDA reflects the add back of both non-cash compensation expense and the non-routine charges that are affecting operating income. We continue to be very pleased with our financial position during this difficult economic environment. Our net debt at May 31 that is total debt less cash was $36 million, that’s a reduction of $33 million in just one year. Our debt to EBITDA was 1.3 to 1 and our borrowing capacity under our credit facilities was $78 million. Finally in our earnings release last evening we announced that the Board of Directors has authorized the repurchase of approximately 5% of Team’s outstanding common stock. This decision reflects our confidence and our optimism in Team’s future prospects. We expect this to be a very good investment for our shareholders. It also reflects our strong balance sheet and strong projected cash flows. Based on our current projections of operating cash flow in the current year we do not expect our debt levels at the end of next year to increase as a result of this repurchase program. With that Phil, I’ll turn it back to you.

Thanks Ted. Now I would like to provide some additional perspectives on our recent performance and outlook. In my comments I will refer to adjusted financial results excluding now routine charges as discussed by Ted. Now let’s begin by addressing Team’s performance last year. As we have discussed for the past several quarters Team is faced with weak conditions in our markets, which directly relate to the economic recession that began in the late fall of 2008. Reflecting this market weakness our total revenues for the year declined about 9%. Our full year operating profit reflected both the decline in volumes and about a 1 to 2 percentage point decline in job margins. These declines were partially offset by cost reductions in both indirect and SG&A categories. Total operating profit was $29 million and approximately 30% decline from the prior year. As a point of perspective in each one of my 12 years as Team’s Chairman with the sole exception of this past year, our company has grown its business often rapidly. Our compound annual growth rate in revenues for this 12 year period is above 20%. Excluding the impact of acquisitions, our organic annual growth for the past 12 years has been about 15%. Our ability to deliver outstanding service to our customers effectively, efficiently, responsively and safely is the foundation for our success that the company has achieved over the years. Each of the approximately 130,000 service jobs we perform annually is the opportunity to earn that next job with one of our 6,000 customers. We have the additional advantage in North America of the broader service network and service line offering in our industry. We are a very attractive option for customers looking to simplify and reduce the number of service companies they work with, either in total of on a specific project. Our historical growth and growth in market share reflect the power of these advantages. So, what has happened over the past year and a half? Has the market changed? Our Team’s historical advantage is still relevant. The short answer is yes, the market is changing in some respects and absolutely yes, our historical advantages are still very relevant. Let me elaborate. The economic pressures facing our customers have been the impetus for many of them to make changes in their procurement processes. And many customer companies, the procurement and finance functions are increasing their influence in the buying process at the expense of the maintenance and operations functions. There is no question today that many customers are more focused on pricing, rates and costs. This shift in procurement process requires that we learn and adapt to these new processes and in some instances new rate formats and we are and we will. But these changes don’t fundamentally change our market opportunities and outlook. Historically our success has not been based on windfall profits or profit margins. Since we believe our efficiency and cost position is now and will continue to be competitive with any other service provider there is no reason why we should not continue to earn fair and attractive profits with any customer pricing rate structure and formats. That leads to the next question, when can we expect to see improved growth and profits from Team? I believe that our return to growth has already started. During the first half of this past fiscal year, Team revenues were down about 17%, when compared to the same prior year period. For the third quarter Team revenues reflect and now in the fourth quarter Team achieved modest 4% revenue growth. While we still have a long way to go we are growing again. Our operating results for the fourth quarter reflected continued solid execution and focus on efficiency across our company. Adjusted operating profit was $10.7 million and adjusted operating profit margin was 8.5%. The operating leverage on our revenue growth versus the prior year fourth quarter is also encouraging. In this comparison, Team earned incremental operating profit of $1 million on about $4.3 million in incremental revenue growth, resulting in operating leverage of about 23%. There is a similar positive operating leverage story when comparing the fourth quarter results with the previous sequential quarter or third quarter. Let’s now look forward to the current 2011 fiscal year. While we don’t expect market conditions to improve dramatically we do expect our performance to improve significantly in the coming year. This improvement will be driven by three major factors; first we do expect some continued gradual improvement in overall market demand, as some deferred maintenance over the past several quarters becomes no longer deferrable. Second, we expect to benefit from the reductions to our cost structure. In May, as Ted mentioned previously, we took actions to reduce our base cost by another $6 million annually. Finally, we have stepped up our business development efforts and have refocused on expanding our business. In this regard, we have made targeted investments designed to strengthen our sales and business development capabilities, and focus our organization on business development initiatives. But simply, we are not waiting for markets to improve, or for procurement processes to change. We are aggressively going after new business. We expect to be a successful growth business with our current business environment. With respect to business development and business growth, Team continues to expand and extend its service capabilities. As examples within the past year Team’s TMS division has introduced two new product lines InsertValve and Pipeline Wyes and expanded its laser measurement and heat exchangers servicing capabilities. Similarly, Team’s TCM division has expanded its advanced inspection capabilities in several technologies including GUL, Phased Array, EMAC and AUT and has also expanded its wireless heat-treating and induction heating services. For the fiscal year 2011 the company expects total revenue to be between $470 million and $500 million. We currently estimate that net income for this year will be between $1 and $1.15 per fully diluted share. Now I would like to shift topic and take a moment to briefly discuss the recent promotions of two Team Senior Managers. As I mentioned in the introduction Ted Owen has been promoted to Executive Vice President and Chief Financial Officer and Pete Wallace has been promoted to Executive Vice President and Chief Operating Officer. While you all know Ted, you don’t know Pete. Pete Wallace joined Team 22 years ago and has held numerous leadership roles throughout our field service network. Immediately prior to his promotion Pete was Senior Vice President for Business Development and Commercial Support Activities. The primary objective of Pete’s new role is to provide additional leadership and focus on opportunities that expand across our field service networks and support groups. The new positions also further Team’s longer term organizational development objectives. Please join me in congratulating Ted and Pete on their recent promotions. Let me wrap up my remarks with just a couple of final comments before we take your questions. Despite difficult market conditions and a disappointing year performance wise I remain very confident in Team’s prospects for both next year and many years beyond. In the near term we have positioned our business to be successful in our current business environment. Longer term we continue to have outstanding growth opportunities in virtually all service lines and at all geographic regions both within North America and beyond. To realize these growth opportunities we need to stay focused on the basics of our business, providing great service with every service opportunity, continuing to capitalize on our service network advantages, managing the profitability of our business job-by-job, balancing our resources with current activity levels and conducting our business all of the time in all activities in a manner that fosters pride from all team colleagues and respect from our customers. In my view that is how great organizations are built and sustained. That concludes my remarks. Let’s now open it up for questions.

Thank you. We will now begin the question and answer session. (Operator Instructions). The first question is from Matt Duncan from Stephens. Please go ahead.

Good morning guys this is Jack Atkins on the call for Matt. My first question is just on the general market outlook, refining utilization rates, all back above 90% and where bottom margins seem to have stabilized in the last few months. Is that going to translate into an up tick in demand for you guys at this point and do you get the sense that your business could be at a turning point here?

I agree those are encouraging factors and I think you saw that also in the profit reports for the second quarter by a most refining segments or independent refiners. I would say though that near-term profit performance has not yet translated into a more robust outlook by refiners. I think most are taking a very cautious view and continue to be very focused on kind of cost management minimization. Of course sustained improved conditions for them would be a great circumstance and we hope for that.

Sure. Okay shifting gears here now to the Gulf oil spill, could you guys give us your thoughts on how that oil spill will impact your business. If you could give a sense that that some of the deferred maintenance that’s been pushed back over the last 18 months could be shaking those, if I would guess that you’re not going to see any major oil companies or refiners want to be the next major accident?

I can’t say that I see any really direct correlation between the downstream or upstream kind of issues related to the spill in the Gulf and downstream activity. They agree that with your general assertion that no refinery wants to have an unsafe plan or have incidences, but I think that was true before the Gulf spill.

Okay, one last thing I’ll jump back in queue. Could you guys give us little bit more color on the buyback both the rationale from your perspective forward and then also the potential to re-up the buyback once you run through this first $15 million authorization?

I think that the basic logic is we think that we’re positive about our prospects. We have a very strong balance sheet and cash flow and we think that the future value of our company will be substantially higher than the current value. So we think it’s a great investment. Regarding kind of the ability to go further than $15 million, I think that will be up to the Board and I think obviously there will be something that will be a kind of reviewed as we go forward.

The next question is from Max Barrett from Tudor Pickering. Please go ahead.

First off could you give us a sense of your visibility into the fall turnaround season? Have customers already begun discussions giving or give an indication of the type of work needed to done at fall or that you’re seeing at this point?

No I think we’re already talking with lots of customers about their plans for the fall and that would be routinely the case. I think the best way for me to kind of answer the question about kind of outlook is that unlike last year where our forecast is predicated on back year acceleration of growth, our forecast this year really is balanced throughout the year. So with seasonal adjustments, we expect our results for the year to be balanced throughout. So kind of translating that is that we expect there to be a positive turnaround season in the fall.

Okay. And then secondly on the Valero call management talked about replacing coke drums at Port Arthur in order to reduce go forward maintenance costs and my question is twofold, one are you seeing an up tick in the replacement of older equipment and two to what extent this newer, more efficient refining equipment impact the revenue opportunity for Team?

First of all anytime there is a kind of major replacement equipment that would be a major turnaround or more significant in-depth turn around. Those are good things for us; we saw a lot of that frankly in the pre recession period as higher upgrading equipment was being installed and facilities. I would say generally there is a less of that now not more not saying that there is no replacement anywhere as kind of you reference the Bolero plans there with regard to that.

The next question is from Arnie Ursaner from CJS Securities. Please go ahead.

I have a couple mechanical questions for Ted regarding your guidance if I could ask them. In your guidance, are you assuming the share buyback which would add about $0.04 or $0.05?

The precise timing of the buyback is a little uncertain. It's governed by some pretty strict rules as you know, and so we did not contemplate that. You are correct were that to occur at the beginning of the year it would be about $0.05 impact.

I guess I want to throw this one out to Phil if I can. You mentioned in your prepared remarks, the market is changing, you also mentioned you are targeting a lot more business development. You also mentioned you are going after a lot of new business, highlight a lot of new capabilities, I guess what I am trying to think about is that if you’re going after new business from clients, I’m guessing given the price dynamic that one of the ways you could get it would be more aggressive pricing, you had weaker competitors kind of attack you on price When you’re trying to win this new business, is it price that is driving it, is it new capabilities, maybe another way to ask this is if I think of your revenue guidance for the upcoming year how much of that might be driven by new product or service capabilities that you’ve added versus organic growth in the industry versus you’re winning business from others or perhaps on a price basis?

Lot of complexity to that question let me take a crack at this. If there is a theme that we have internally and kind of reassert it is that again our DNA as a company over the last decade is been the growth. And 40 consecutive quarters, 12, which is I kind of mentioned there earlier kind of with the advent of the recession candidly we took our foot off the pedal a little bit and play defense, I am just trying to kind of resize organization, but I think frankly it took less input a little less emphasis on growth because of the soft market conditions. And I think the change in attitude internally is that it’s time to get back to business as usual. And let’s not make any excuses internally about the fact that we have weak market, our competitive conditions, that’s just business. And let’s go get and earn our full fair share. So, we have really stepped up some of our, we talked about selected investments, we’ve stepped up our training and focus and some of our kind of tools around our business development activities and the training of our account reps etcetera. As it relates to pricing I think the view is that we are not going to standby and allow kind of aggressive pricing to kind of penetrate our existing accounts. I don’t think now or ever that price alone is ever been the primary driver of selection. There wouldn’t be the stability of relationships that exist in our industry not just for Team but for other major service companies if it was just a price story. Growth is very important to us and it’s a fundamental aspect of our kind of long-term strategy and we intend to grow. And I think its more attitude and mindset. The new capabilities we were adding I think to me that’s indicative that we are not I guess losing sight of what has kind of been the continuing practice of our business, which were continuing to evolve and extend our capabilities as technologies mature and new ones evolve and that’s really I think what is reflected there. I wouldn’t just as we have in the past I don’t know the sign kind of meaningful growth to a single idea. But rather I think it just broadens our capability and makes it more attractive to more players. We will be extending our service lines, kind of customer base and we are focused on adding new customers, but I think in terms of a material change in our mix I don’t see that.

So if I can ask just a clarifying question you use to have a chart in your slide shows that would show the market opportunity and your market position, if you’d have add things like the InsertValves and laser measurement and the other types of new services you are adding, how would you describe that changing the market opportunity that you’re targeting?

Okay. For example the InsertValve is really a form of hot tapping service, it’s kind of a unique service and that it allow us to replace valves with a single hot tap. The current line of products that we’re introducing are for lower pressure, lower temperature applications, so that will be in the water works market more than and in kind of drainage market or kind of drain lines rather than the high pressure, high temperature lines. So we put several of them in municipalities and also power plants on the back side of the plants. Our intention will be to extend that to kind of all types of applications over time. So, that’s a slight extension of our markets and opportunity from that standpoint. Laser measurement is really its sound kind of peculiar but it really is a service that’s kind of hand-in-hand with our field machining activity because it would be an application to kind of measure the requirements for machining kind of services. So, I think that’s really kind of part and parcel of that. So I don’t perhaps from the sense of the InsertValve like extends is kind of from an industry standpoint to some of the municipal markets, I think the laser majoring is just a new or better way to do things that we’re doing already. So really not a market growth or expanded market opportunity.

The next question is from Adam Thalhimer from BB&T Capital Markets. Please go ahead.

I wanted to see if you could talk a little bit about the opportunity as you see it in the oil sands today?

I think we are pretty bullish about it actually. It was a significant part of our business up through really the middle of 2008, kind of concurrent with the economic recession, it was a very significant drop in oil prices, which really hurt the economics of that play if you will because of the heavy capital investment and operating cost associated with the refining of the bitumen that requires a significant kind of oil price to support that and we are back in that area again, at least that’s the report we get from the operators and producers up there. We see kind of increased activity although kind of it is not wide open yet, but there are probably four or five major expansion projects that are in aggressive planning stages right now that we expect many if not all of those to get rolling some time within the next year or so. But I think six months ago I would have said that we are kind of projecting a lot of those to happen this fall and I think not much of those are happening yet, so I think it’s a little slower than we had thought maybe six months ago, but longer term it’s a incredible hydrocarbon resource and I feel one don’t think we are going to be off hydrocarbons for many, many years, decades will have you.

Just a follow-up to that Adam, we are still have a significant presence in the oil sands, we are doing a lot of maintenance, lot of turnaround activity that Phil was just referring to new construction activity.

Great, thanks for that. And as a follow-up when you look at your large customers, is there any variance among the spending outlook there, I mean is everybody kind of in the same boat where they are doing minimal maintenance again, but they are not planning large discretionary projects or do you, can you point to one or two customers and say wait a second those guys seem to be a little bit more aggressive about large spending projects?

It’s really hard to draw specific conclusions about individual customers, because of the timing of projects, because that’s kind of inherently lumpy really for everybody. Here is what I can say overall again, we mentioned that our total revenue decline for the year was 9%, if you take the revenue decline out of the multi-plant, multi-service alliance agreements, these are our major customers, which are roughly a third, approximately a third of Team’s revenues. The decline in those accounts was actually slightly less, but in the 8 to 9% range, they are approximately the same. So, what we’ve seen in kind of an aggregate that the kind of the decline and spending on those accounts kind of marred the market overall. If I go account-by-account or plant-by-plant some are up, some are down. But I think again those just reflect the timing and the lumpiness that kind of individual projects turnaround activities, etcetera.

The next question is from Matt Duncan from Stephens. Please go ahead. Jack Atkins - Stephens This is Jack again. I just have a couple of quick follow-ups here. First just on the competitive pricing environment, you guys said in the past it’s been about a 100 basis point headwind for you and I know in the prepared comments you said a 100 to 200 basis points, I am just wondering if pricing has stabilized at all or is it getting any better any worse?

I think it’s just the competitive market and we expect it to stay that way. So are we expecting price increases in the coming year, no? Jack Atkins - Stephens But you expect it to kind of maintain what you’ve got or do you think there is going to be further weakness on the price front going forward?

I don’t quite know how to estimate that I don’t we don’t kind of have the sense of that we have another wave of kind of a step down, but to think customers are carrying less of that or less focused on and that certainly isn’t the case so. Jack Atkins - Stephens Okay and as the last thing I’ve got here is just looking at your segment performance, I was wondering if you guys could give us some commentary around the TMS and the TCM segments, I know TMS had a nice performance this quarter, but the TCM was down in the low single-digits for the fourth quarter, any kind of commentary on what drove the weakness there?

I think it’s the timing of projects if you really kind of move back into the TMS and that’s why kind of I hesitate about declaring victory or spending too much time on the details of just a specific quarter. I think what you have from a comparative standpoint, if we look at TMS for example it benefited from the fact it had extremely weal Gulf Coast kind of activity in ‘09 that was kind of more normal in ‘10, so it has a kind of positive comparison there. Conversely for TCM it has a remarkably strong West Coast performance in the fourth quarter of ‘09 that wasn’t present this year. So it’s just kind of timing of things. If I kind of look more broadly a kind of growth rates, what are we seeing? I don’t see major changes among divisions per se. I would say the turnaround activity was weaker than on-stream activity kind of as a general rule and that’s how what we saw. I would say that US was stronger relative growth wise, little or less negative I should say relative to Canada again reflecting, I think principally the decline in the Canadian oil sands activity that was kind of very active in ‘09. So, that is a general rule what I would say. I wouldn’t read a lot into individual quarter differences that you referenced.

Thank you. The next question is from Davis Paddock from Invesco. Please go ahead.

Quick question I wanted to follow-up with you on your cost reduction you have, your $6 million, is that correct?

Correct.

And where will that mostly be coming from, is it the corporate cost line item from the savings exposure?

No, actually the 6 million is going to be about equally it will be reflected in about half in SG&A and half in indirect cost. A big driver of that was the elimination of 80 support positions, some of those are SG&A positions but many of them are also off supervisor or kind of operational support roles in our branch activities and so I think it’s kind of about 50-50 there.

Most of that is field SG&A. That the SG&A component will be field SG&A for the most part, not a lot of corporate cost in that number.

Got it. And then you maintain your also stepping up some business development activities. How much do you think that will offset in the $6 million of cost cuts?

Really and it’s really investments, what we conducted through a series of regional training we had regional training activities really with all of our account managers over the spring time, we’ve introduced a new customer account relationship program, software that kind of gives us better tracking and better and then we’ve just kind of increased our emphasis conversation about the importance of business development challenging, also new account development and setting new account target. So that’s the investment we have made, its kind of not a significant dollar amount and its not adding heads, its adding attention and focus and attitude.

And in the past I think you’ve talked about the incremental operating margins, you talked about the sales growth, is it 20%?

Yeah 20% is been typical.

And does that mean with the $6 million of cost cuts that might be a little higher in fiscal ‘11?

Yes. Absolutely means that I would kind of think about that as additive.

The next question is from Matt Tucker from KeyBanc Capital. Please go ahead.

And talking about calls for a moment I think I lost my place, lot of my questions have been asked, but so I apologize if I repeat any. But some of those new service lines that you had mentioned some relatively a little more maybe technologically advanced, just wondering if they carry higher margins and say your average resale average and if so do you expect that we could see that expected the numbers in FY ‘11?

You are correct particularly if you get into the advance inspection areas is that the direct job margins of those services would technically have higher rates or margins than maybe some of our more conventional inspection services, but they also come with more operational and technical support with them. So in terms of having kind of the impact and really moving the needle in terms of our average margins we are not projecting that they will, but I think we are very excited about inspection services it’s a very, very large market, there are a lot of kind of interesting technologies that continue to evolve and we are going to be a player and that’s really the I think the focus of that.

Okay, thanks. And then turning back to the through the improved second quarter operating conditions for some of your customers what do you think or how long do you think it would take for them to start increasing their discretionary or capital project type spending?

This is completely speculative on my part; I think it gets back to what their long-term view of their environment is. More than it does kind of a profitability of a single quarter or a couple of quarters.

So it’s kind of too early to say?

I guess our view would be, we are not waiting around to hope it changes. We can argue as we need to be successful and grow in the environment we have.

Great. And then one last question, if you look at your SG&A in the fourth quarter excluding the non routine items, say around 28 million. When we’re thinking about next year the seasonally stronger quarters is that a level that you can kind of maintain even though your guidance are suggesting revenues will be a little higher or should we think about it as more maintaining the SG&A as a percent of revenues?

I think we are going to actually see a slight decline reflecting if we have a $6 million cost cut from the position elimination of some of our initiatives and let’s take out roughly half of that’s in SG&A. To say there is no cost creep, it wouldn’t fair, but I would kind of think just as a starting point, you maybe have a couple of million dollars of reduction for over the course of the year. Again to hide into an individual quarter, I don’t know that I have good clarity on that.

(Operator Instructions). Arnie Ursaner from CJS Securities is back on line with a question. Please go ahead.

Hi can you give us your year end head count and your expectation for the upcoming year please?

Our current head count is about 3100 and that’s down from a peak of about 3700 in November of 2008. So we’re down about 600 net. I don’t really have a go-forward forecast that reflects all of other adjustments that we’ve made. I think we’ll adjust to our volumes if we have as our volumes go up we’ll be hiring more technicians.

Okay. And you’re finding it easier to get them at this state?

It’s not an issue.

Okay. And project activity can you update your view for ‘11 for project activity?

I think if you mean project in terms of kind of turnaround activity, which I think is what you mean kind of our view is it's slightly better than the ‘ 10.

Okay, I think there are more projects things like the tar sands, and other things.

Well there is really no we have no kind of clarity about the timing of when tar sands activity will go forward although they are back in the planning mode. So it’s kind of not dead from that standpoint. One of the callers mentioned kind of an upgraded Valero Refinery he referenced those continued to go on from here and there. And I think we’ll continue to see some projects. Again my view is the market is likely to be a little better, but not a lot better than what we have right now.

Good one Phil, perfect follow-up to Davis’s question. If you look at your fiscal year ‘09 results you basically were pretty close to 500 million and did a $1.16 of earnings in fiscal ‘09. You highlighted multiple times that we’ve had a dramatic reduction in your cost structure since then and yet if I follow your guidance it’s potentially the same level. What’s the offset?

I think the offset is pricing, margin and there will be a little bit of cost creep just in terms of the kind of the base cost, wages mostly, so there is not much of that lately.

(Operator Instructions). The next question is from Bob Nicholson from Pine Cobble Capital. Please go ahead.

Hi guys, just a quick follow-up to the last question. I guess I’m little bit confused if I take the midpoint of your revenue guidance range for next year and I plow it through with a 20% incremental margin, which you guys have consistently commented on. And then I factor in the 6 million of cost cuts, which was just implemented, that gets you to a very different earnings number than what you’ve guided to. My quick math here was sort of 35 to $0.40 of incremental EPS excluding any share buyback and I guess I am a little bit confused what I am missing in that calculation?

Well I guess my math is a little better than yours Bob, but I guess if we take a base of $0.80 and you take cost reduction of 6 million that would be about $0.16, if you take low end growth at 20% and 40% tax rate that’s about a dime and we’ve kind of just for conservatism and just a little across creep in wages, our other events kind of added a swag factor of a couple of million of kind of other an unfavorable, that time it hit you a net increase of $0.20 which gets you to the low end of the range and then you add the 30 million and the range of revenue at 20%, I think that’s about a $0.16 add so that kind of puts it at the high end of the range. I think from our kind of view there is a lot more moving parts as you know and.

Okay perfect. Actually I will be taking the midpoint of the revenue range. But it sounds like again it sounds like within the revenue guidance and the cost cutting it sounds like you’ve layered in some conservatism in terms of the margin and or any incremental cost creep as the business begins to grow again?

Yes.

Gentlemen there are no further questions at this time.

Great Sandra, then let me just to wrap up I want to thank everyone again for your participation in this call and your continuing interest. We look forward to updating you on our progress during the first quarter of our new fiscal year around the first of October. In the meantime have a good day.

Thank you ladies and gentleman. This concludes today’s conference. Thank you for participating. You may now disconnect.