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.

Welcome to the Team web conference call. Again, my name is Phil Hawk, I’m the Chairman and CEO of Team. Joining me again today is Mr. 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, 2009. 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 release and our filings with the SEC. 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. With that introduction Ted, let me turn it over to you.

First as usual, I want to remind everyone that any forward-looking information that you 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 and 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. With that out of the way, now to the financial results. Obviously, a very challenging quarter for Team and again reminding new people who may be listening this is our most seasonably weak quarter of the year. Revenues from third quarter were $104.3 million compared to $108.8 million in the third quarter last year, a decrease of 4%. Net income was $2.2 million, versus $2.9 million in last year’s third quarter. Earnings per diluted share was $0.11 versus $0.15 in last year’s quarter. Currency exchange rates principally the Canadian dollar and the Euro had an unfavorable affect on revenue of $6.6 million and on operating income of $500,000 in the quarter. Now, for a little more depth around industrial services, again, as a reminder, particularly for those who are new to the story, our industrial services an array of specialized services related to the maintenance…

Now, I would like to add a few remarks about our recent performance, current market conditions and our outlook both for the next quarter and beyond. Let me begin with several comments on Team’s performance and the recently completed third quarter. Overall, it was a tough quarter impacted significantly by changing market conditions. As Ted indicated, total revenues for the quarter decreased by 4% versus the prior year quarter. This compares to total growth of 21% and organic growth of 15% in the first two quarters of the fiscal year. Obviously, this is a significant slowdown in our business. Where did this decline occur? The short answer is that we’re seeing demand softness virtually across the board while several customer segments are more economically distressed than others, nearly all groups are adopting more conservative near term spending postures. As a result, we are seeing more frequent deferrals and/or downsizing of turnarounds. As shift to a minimum necessary spending posture related to nearly all spending by many customers and more discussions about the need for rate adjustments from suppliers and service providers. Consistent with these observations we experienced revenue softness in virtually all service lines and all geographic areas. Canadian revenue declines were somewhat higher than the US regions due to both the impact of reduced major project work in Western Canada and currency weakness however, all regions are being impacted. As another observation, typically we expect our overall activity level to significantly ramp up in the second half of February at the beginning of major turnaround projects. This year, that seasonal ramp up did not begin until March. Shifting to profit performance, as Ted indicated, our total operating project in the quarter declined to $3.5 million. Our operating profit as a percentage of revenue declined to 3.3%. The decreases in…

(Operator Instructions) Your first question comes from Richard Wesolowski – Sidoti & Company. Richard Wesolowski – Sidoti & Company: Phil, you mentioned your headcount fell by about 200 this quarter which would take you only a bit below where you started the year yet your 4Q sales will likely be down 15% to 20%, do you still have excess technicians in the field?

I think the number I have that we are down, the field headcount now is down about 84 from the beginning June 1st count. A couple of things again, what I really look to is labor utilization levels and as I indicated, I’ve been pleased with the stability of those numbers in the face of declining volumes through the third quarter. But, candidly I would expect our count to probably drift lower at the current levels. Richard Wesolowski – Sidoti & Company: Can you relay or give any detail on the type of pricing discussions that you’re having with your major customers and maybe comment on whether a low 50% direct margin is still a reasonable expectation?

Here are the facts, the facts are that a number of customers are raising questions, really they’re raising the issue to their necessity to reduce their costs. They’re challenging suppliers to assist and support them in those activities including rate reductions as part of those discussions. They’re taking them very seriously and so are we so we are actively engaged in those conversations and are working with our customers. At this time the adjustments that impact our business have not been material and we’re working very, very closely with our customers. A point that I would make and again, I’m not forecasting, it’s just hard to see completely how all this will play out but I will just note that some of the generic kind of stress of kind of deflation in the market and things like that or kind of high profit levels in the past or in the peak periods that need to be adjusted really don’t apply as much to us. Our margins have been pretty consistent throughout time and we don’t have kind of major material components in our business. As I say, we’re working closely with all our customers. We’re taking their circumstances seriously and are fully engaged on the topic. Richard Wesolowski – Sidoti & Company: Broadly speaking is the 50% plus job margin still realistic?

Yes. Richard Wesolowski – Sidoti & Company: Finally, did you have more construction revenue in the second half of fiscal ’08 or the first half of fiscal ’09?

I didn’t perceive a big difference in that to be honest.

Your next question comes from Analyst for Matt Duncan – Stephens, Inc. Analyst for Matt Duncan – Stephens, Inc.: My first question just kind of broadly speaking how are you guys seeing I guess today any sort of stabilization? I know you’ve seen significant declines over the last sort of 90 days but do you get the sense that things are beginning to stabilize at all or is it just too early to tell at this point?

I think it’s just too early to tell. A little bit of the challenge of our business is we’re the sum of lots of projects all of which are unique in their own right so it’s not like we have regular orders and we can see rate changes very specifically in one area. I will just say just as a broad general comment, I have heard no reports from any customers who feel like they’re environment has improved yet. So, I think it’s still kind of a work in progress. Analyst for Matt Duncan – Stephens, Inc.: When you look at your customer’s maintenance spending, do you think they’ve kind of gotten down to the bare bones maintenance spending level at this point or do you think there’s still some more room for them to cut as far as that goes?

I don’t know quite how to respond to that. In the short run I would say as I’ve said in my kind of remarks, I think we are that necessary evil, over the long run no one spends maintenance dollars for kicks, they do it because it’s required and I believe that. So, I believe the historical spending levels for general maintenance are indicative of the general requirements. Having said that, what is possible in the short run, I don’t think we know but it’s certainly my speculation and point of view that we are below I’m going to say average levels of spending right now but could they go lower? I don’t know. Analyst for Matt Duncan – Stephens, Inc.: You talked about the ramp up of turnaround activity generally takes place the last couple of weeks of February, this year it’s kind of taking place in March. Can you kind of give us some color on what part of March, was it early or sort of later in the month?

The second week of March, it was about three weeks later than last year. Again, we have lots of turnarounds going on, that’s again a key perspective that we’re talking about declines but the world isn’t ending, the business isn’t ending in total by any means just the level of intensity. As I said, the turnarounds that we are doing are kind of more conservative in their scope than they have been in the past and like I said they started later and they’re not peaking as high I think is our view at this point in time. Again, we’re kind of in a little bit of new territory here because of again, just extraordinary pressures many of our customers are under. Analyst for Matt Duncan – Stephens, Inc.: Just a couple quick other things and I’ll jump back in queue. When you think about pricing you guys have really a pretty strong competitive advantage over a lot of your regional and mom and pop competitors with these national accounts or master service agreements. To what extent do you think that will help elevate the margin pressure you may face over the next couple of quarters?

I think it’s an outstanding win-win opportunity. To be honest because of the, I’m going to stay readiness cost of our business, the sliding scale volume discounts which are embedded in many of our alliance or national account agreements really are very attractive ways for us to kind of shear incremental business benefits that we receive from volume growth with those customers who create that or facilitate that for us. That’s kind of a very active discussion as we work with customers and look for savings opportunities. Analyst for Matt Duncan – Stephens, Inc.: One last thing, just a housekeeping item, Ted can you give me the D&A down to the thousands for the fourth quarter?

For the fourth quarter? Analyst for Matt Duncan – Stephens, Inc.: I’m sorry for the third quarter.

I don’t have it. Call me later and I’ll get that for you.

Your next question comes from Tahira Afzal – Keybanc Capital Markets. Tahira Afzal – Keybanc Capital Markets: To start off with I just wanted to get a sense, when you talk to your customers would you say that a lot of these deferrals are because of the credit crisis which is perhaps leading them to save up on cash or would you say that it’s more because of utilization rates and demand?

To kind of generalize a large number of companies is somewhat fraught with difficulty but let me try this. I don’t think for the most part it’s a cash issue. It is a profitability issue or margin issues. They’re profitability and just their business environment is very weak and so they’re trying to adapt their cost structure to reflect those lower margins and volumes. You mention utilization levels, lower utilization levels would be consistent with that but I don’t think it’s the utilization level itself that creates less need for maintenance but just a very poor, weak economic environment for their business. Tahira Afzal – Keybanc Capital Markets: So would we be looking at Phil, crack spread to see the business come back, is that what’s going to give them confidence? Or, if you do see the economic environment coming back you might see the maintenance?

I think crack spreads improving would be a positive for sure. Tahira Afzal – Keybanc Capital Markets: Then if I look at the environment, it seems that a lot of this is deferrals versus shutdowns within your customer base, is that the correct view?

I think it’s really in all areas. If I look at our general maintenance activity, this is opposed to new projects or new capacity additions, our business really roughly breakdowns kind of half and half to on stream maintenance activities which are kind of while the plant is operating, turnaround or outage work which are these periodic planned shutdowns to rehabilitate – basically to overcome the deterioration of the facility that’s taken place due to operation and kind of restore it. It’s called a turnaround or refining or outage in the power industry. We are seeing declines in both. There is just a more conservative posture and with regard to turnarounds there are a number that been just deferred to the fall. I think that’s principally what I’ve heard are ones that have been deferred to the fall but even the ones that we’re having there were reductions in scope. Again, I think my interpretation here is that kind of repair items that could wait until the next cycle were deferred or reduced or pulled from that scope of work so there’s kind of less work in the short run for both of those reasons on turnarounds. Tahira Afzal – Keybanc Capital Markets: So when we see the work come back would you say we’ll probably see the work come back but maybe the margins will not come back at the same pace, the pricing?

That’s not my view. My view is that we have competitive pricing today. Will it be influenced by some of these kind of near term kind of pressures and discussions, possible but kind of my view is the work that’s deferred is just that, deferred not eliminated just because of the nature of maintenance. I don’t have a point of view that our margins will be worse in the future because of this downturn. Tahira Afzal – Keybanc Capital Markets: If you look at your guidance for the fourth quarter, it’s fairly wide. Could you talk about what the variables are as we review the $0.18 to $0.33?

I think the biggest variable is volume. Tahira Afzal – Keybanc Capital Markets: As you [inaudible] you said you’ve seen a ramp up in March to some extent. Would you say that within your guidance you’re still comfortable with probably let’s say the midpoint?

Well, what I would say is this, the ramp up we saw is a seasonal ramp up that’s typically, we saw it later and frankly it’s not as high as last year. So, what we have as we say is we have from 15% the first half of the organically we’re now looking at -15% running in March. That’s generally what we’re forecasting, -15%. So, we have not seen an uptick compared to last year in our business to date so I want to clarify that. I think candidly with such uncertainty about where our demands are and kind of this thing evolving our belief is our job margins are roughly the same and so the earnings range I appreciate is very wide, reflects a pretty significant plus/minus around that $520 million for the quarter. Tahira Afzal – Keybanc Capital Markets: Last question, I was actually at a refinery conference last week and the sponsors are concurring with what you’ve just indicated that the maintenance spending cannot be deferred forever. The sense I got was calendar fourth quarter, they really have to start getting the spending back on and that would sort of concur with your fall scenario. The other interesting thing I noticed was that there was a lot of talk on carbon footprint and some refinery sponsors mentioned that maintaining plants more efficiently helps reduce that. I haven’t done much research on it myself, would love to get an initial sense from both you and Ted on what you see the pros and cons for your business there?

I think I’m rooting for you on that Tahira. I think just generally well maintained plants are more efficient and productive in all respects so I think we certainly believe and our customers I think understand that by in large too that we can be a great facilitator to uptime so kind of just basic economic levers. I have not heard candidly that emissions are less from a well maintained plant but I’m all for it.

Your next question comes from Richard Wesolowski – Sidoti & Company. Richard Wesolowski – Sidoti & Company: Just circling back to the cost cutting plan, was there any benefit in the third quarter?

Not net when you count all of the severance expenses that we had. Richard Wesolowski – Sidoti & Company: So you expect roughly maybe $2 million in the May quarter and then the remainder in fiscal 2010?

I think with the $6 million run rate its $1.5 million per quarter or something like that. Richard Wesolowski – Sidoti & Company: Is there an aim for the debt level?

No again, we’ve paid down our debts or kind of our net debt levels are about $25 million less than at the end of the preceding quarter. They’re actually less today than they were at the end of the quarter but we’re going to use cash flow from operations Rich to continue to pay down debt.

Your next question comes from Arnold Ursaner – CJS Securities. Arnold Ursaner – CJS Securities: First question I have is can you comment a little bit more about project activity? I know you don’t want to give anything more formal about 2010 but give us a best sense of what you think 2009 project activity is likely to look at and what sort of magnitude of decline we should expect for next year?

I think project activity is significantly reduced but not zero by any stretch of the imagination. The high profile projects that we had early in the year that are not active today are up in the Canadian tar sands, oil sands, related to those upgrader projects. They are still on the books up there and deferred to the fall or later. Obviously, conditions will determine whether and how those go forward but we still have major refinery upgrading projects underway in several locations around the country. We have some major pipeline kind of activity still underway across North America and another major refining project planned for this fall that’s still on track. So, there are still projects going forward, it’s just at a reduced rate. That’s a little of the point I wanted to make sure was clear, our declines are not just the absence of projects, they are in the change in behavior related to general maintenance spending which is the new phenomena that we’re dealing with right now. Arnold Ursaner – CJS Securities: Project activity has been about 15% of your revenue which would be roughly $75 million or so this year. I know you said it’s not going to go to zero but is it more in the $15, $20, $25 million range for next year?

I haven’t really developed a number on that but this is just a kind of the top of the head swag would be it’s about half of what it use to be, or will be, something of that order of magnitude. Arnold Ursaner – CJS Securities: Second question I have for you relates to thinking about your margin, one of the things on turnaround activity, normally the work is done as rapidly as possible. The employees you have on site are working 12 hour shifts as fast as possible, no time off and yet if they shift to more of an eight hour day I assume you still have your technician on the ground there, you’re still incurring a lot of expense how do we think about margin in an environment where you’re working your technicians in eight hour shifts rather than 12 hour shifts seven days a week? Arnold Ursaner – CJS Securities: We don’t perceive a significant difference. You raise an interesting point that I didn’t really describe to the whole group, just as a little background one cost saving approach that has been used in turnarounds rather than a highly compressed short time frame turnaround with running double shifting 12 hours a day seven days a week, we’ve seen a couple of instances where turnarounds have gone to 40 hour one shift, 40 hour, five day, 80 hour shift work which of course extends the time of the turnaround by about three fold but in a time of very, very low margins and because of the lack of premium time associated with that over time it’s cheaper in terms of dollar costs to the customer although more lost production time. That’s the trade off from the customer perspective. From our perspective, yes the rates are lower because there’s no overtime but our costs are significantly lower as well for the same reason, we’re not paying premium wages with that. So, to the extent we might have gotten a little something on the percentage margin on a little higher dollars there, we might get the offset in terms of the equipment and other kinds of expenses associated with that in terms of the margins related to our equipment rentals and all that. The net of that is we don’t see a big impact on profitability? Arnold Ursaner – CJS Securities: But how can that be? Wouldn’t the utilization of that technician be dramatically lower for that two to three week period than normal?

Well, I’m thinking about margins as a percentage of revenue not as a per day. Yes, it’s lower, the margin percent would be the same, the dollars of profit would be less because there’s less revenue in that time period. Arnold Ursaner – CJS Securities: But I know you focus on job margins again, wouldn’t this have a fairly significant impact on the job margin?

As a percent of revenue? Not as a percent of revenue, in terms of absolute dollars per hour, or per day, per technician or per day on a job of course it would because the revenues are so much lower.

Your next question comes from [Mike Sheridan – Cobalt]. [Mike Sheridan – Cobalt]: I think you had referred to customers approaching you, obviously it’s a strange market, a unique market, not in a good way but, customers approaching you for downward pricing revisions and I believe you said the word deflation. So, can you just expand upon kind of how those discussion go, percent decreases that they’re looking for, how you counter, etc.?

Well, I think again the context is customers dealing and getting a lot of pressure to reduce total costs, right. You can either reduce rate or volume making it in simplest terms and what they’re doing is pursuing both. As it relates to rate, I think the generic context is this, “Gee, we’ve just been through a boom period the last several years, everybody has had high inflation, increases in rates and profitability, we’ve had really high increases in all cost components.” A lot of that has now gone down, for example, steel prices are lower, dramatically lower than they were just a year ago, that’s the deflation if you will, component cost deflation we kind of referred to. “What we want you to do is kind of reflect the fact that we’re now in lower cost environment and you have to kind of get your margins back to realistic levels and give back to us the cost reductions that you’re benefiting from in your component costs.” That’s the generic kind of context for the request or the discussion. [Mike Sheridan – Cobalt]: I’m sorry to have a follow up but, just two questions you actually raised for me. When you talk about again deflation feeding through, on a real basis you know I’ll make my own crazy estimate of what deflation is or isn’t but on a real basis would you expect negative pricing on a year-over-year basis? And, as a follow up, is this cycle different because when we look at companies like Dow Chemical, BASF, they have 100 factories closed worldwide, can you talk about whether that’s structurally playing out here as well as opposed to just temporary OEM deferral?

I think back to the deflation, I candidly don’t see much deflation in our business because we are an overwhelmingly labor based business. So, for there to be deflation in our costs we would have to reduce the wage rate of our individual colleagues and employees and we haven’t done that and don’t have plans to do that in our business. So, we are different than say an equipment provider and some other types of service companies. What we expect in terms of do I expect a decline in our average rates over the next year? No. I expect them to be roughly where they are today. Will there be adjustments from here and there? Yes, I think that’s likely. I don’t also think it’s likely that we’re going to have any increase in prices or any significant increases in prices either again, because of the environment we’re in. In terms of total demand and what’s happening there, I think to the extent that we have permanent closures of capacity, that will affect demand. A closed plant doesn’t need maintenance. I would just caution a little bit, you mentioned several petro chemical companies and very large numbers of plants, the industry norm there is to talk about individual production units as plants. So, these major facilities, the number of plants they talk about closing or idling are really units within a plant not kind of major stand alone plants themselves. It’s all over the board for us. I’m aware of one very significant petro chem in one of our areas that has announced significant plant closures and idles yet our activities with them, that particular one, are unchanged. So, it’s a little bit to kind of read too much in to some of these plant closures that we’ve had a massive change in our infrastructure of kind of capacity and therefore demand for maintenance, I’m not there yet. While there are certainly some plant closures I don’t think percentage wise they’re very big.

At this time there are no further questions.

Just to wrap up let me thank all of you for your participation in this call and your continuing interest in Team. We look forward to visiting with you at our next conference call. In the meantime, have a good day.

Ladies and gentlemen this concludes today’s conference. Thank you for participating, you may all disconnect.