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SEC Letter

 June 23, 2005

 United States Securities and
Exchange Commission

 Mail Stop 4-7

 450 Fifth Street, N. W.

 Washington, D. C. 20549

 Attn: Larry Spirgel, Assistant
Director

RE:

Team, Inc.

 Amendment No. 1 to Form 10-K for the fiscal year ended May 31,
2004

Filed April 14, 2005

 Forms 10-Q for the quarter ended February 28,
2005

Filed April 15, 2005

File NO. 1-08604

 Dear Mr. Spirgel:

 This letter is in response to your comment letter dated June 13, 2005 regarding the above
referenced filings and our prior response letter dated April 14, 2005. To facilitate your review of our responses, we have duplicated your comment below in italicized type and added our response below:

 SEC Staff Comment:

 Goodwill

1.
Refer to your response to our prior comment 13. We note that you concluded that you can aggregate the components (Team Mechanical Services and Team Cooperheat-MQS) within the
industrial services segment into one reporting unit. Further expand your response to show us how you applied the aggregation criteria in paragraph 17 of SFAS 131 and demonstrate how you evaluated whether these components have similar economic
characteristics. For your guidance, please refer to paragraphs 17 – 24 and 127 of SFAS 131 and EITF Topic D-101 ‘Clarification of Reporting Unit Guidance in Paragraph 30 of FASB Statement No. 142’. To help us better understand your
analysis and conclusion provide us with a copy of the report that the chief operating decision maker uses to allocate resources and assess performance. We may have further comments after the review of your response.

 Team Response:

 Our Industrial Services business segment is comprised of two business units, Team Mechanical
Services (“TMS”) and Team Cooperheat-MQS (“TCM”). Both units derive their revenues from providing specialized industrial services. TMS provides specialized mechanical services and fugitive emissions monitoring. TCM provides
specialized field heat treating and NDT (non-destructive testing) inspection services. The market for all of these services is principally dictated by the population of process piping systems in industrial plants and facilities.

 SEC Response Letter

 June
23, 2005

 Page 2

 Prior to April 2004, the industrial services segment consisted of the TMS unit (which was incorporated as Team Industrial Services, Inc., or “TISI”), and Team’s legacy NDT inspection business, X Ray
Inspection, Inc. In April 2004, we acquired Thermal Solutions, Inc., (a leading provider of specialty heat-treating services) and in August 2004, we acquired the business of Cooperheat-MQS, Inc., (a leading provider of both specialty heat-treating
and NDT inspection services). In October 2005, these two units were combined with Team’s legacy NDT inspection business to form the operating unit Team Cooperheat-MQS, Inc. (“TCM”). TCM was a wholly-owned subsidiary of TISI until May
31, 2005 when it was merged into TISI.

 While TMS and TCM field locations are
generally separate, both units report to a chief operating decision maker, who is Ken Tholan, the Company’s President and Chief Operating Officer. Both units are supported by common technical and commercial support staffs, quality assurance,
human resources and health and safety departments. As disclosed in our most recent Form 10-Q, while current gross margins for TCM are less than those achieved by TMS, we expect those margins to be similar over time as the management tools associated
with our financial information system are installed in the TCM units (an aggregation expectation specified in paragraph 17 of SFAS 131). The specific aggregation criteria of paragraph 17 of SFAS 131 are considered as follows:

a.
Nature of products and services:

 The services offered by both units are highly specialized industrial maintenance and rehabilitation services. Both groups require a high degree of
training and skill among technicians and all services are primarily associated with high-pressure, high temperature piping systems in industrial plant or pipeline facilities. Additionally, both groups have similar contractual arrangements with
customers (generally time and materials) and have similar risk profiles.

b.
Nature of production processes:

 While both TCM and TMS are service organizations and, therefore, production processes are not an applicable criteria in the usual context, it is
important to note that service facilities for both organizations are similarly staffed and configured and both services are highly labor intensive (large number of skilled technicians) as opposed to being capital intensive. Additionally, the range
of labor rates for both organizations is comparable.

c.
Type or class of customer for products or services:

 The customer base for both TMS and TCM are virtually the same—approximately two-thirds of the customer base for both units consists of refining and
petrochemical facilities, power plants and pipelines, all having a heavy concentration of high-pressure, high-temperature piping systems. The fact that field heat treating and NDT inspection are sold to the same customer base was a significant
driver for Team’s interest in acquiring the Thermal Solutions and Cooperheat-MQS businesses. We have already been successful in incorporating TCM services into several TMS customer contracts and vice versa.

d.
Methods used to distribute their products or provide their services:

 Services for both TCM and TMS are provided through a nationwide network of field branch locations. These facilities are
located in proximity to industrial plants. The structure of those locations is similar for both groups, with locations overseen by a branch/regional manager, one or more sales representatives and a cadre of technicians to service the business
requirements. As business conditions dictate, we are co-locating TCM and TMS field facilities in the same geographic area. As of May 31, 2005, we have combined facilities in six field locations.

 SEC Response Letter

 June
23, 2005

 Page 3

 It is also important to note that our marketing methods are common to both groups. We have a common web site that fully describes all of our industrial
services offerings at www.teamindustrialservices.com. We also have a common Services Catalogue that is used in commercial sales and marketing activities for both groups. Additionally, we have a similar incentive compensation and profit
sharing plan that is common to both groups.

e.
Regulatory environment:

 a. Not generally applicable.

 In determining whether components should be combined into one reporting unit based on economic similarities, EITF D-101 sets forth other factors for consideration, as
follows:

1.
Manner in which an entity operates its business and the nature of those operations.

 As discussed more fully above, both units operate in very similar manners, summarized as follows:

•

Customers are similar

•

Contractual arrangements with customers are similar

•

Pay policies and HR policies are similar

•

Business model for both groups (metrics) are similar

•

Risk profile for both groups is similar (same risk management program)

•

Sales and marketing activities are similar

2.
Whether goodwill is recoverable from the separate operations of each component business.

 We believe goodwill associated with our Industrial Services segment is fully recoverable from the separate operations of
each component business. Most of the $26.1 million of recorded goodwill is associated with the recent acquisitions of Thermal Solutions and Cooperheat-MQS in 2004 ($19 million), while the remaining $7.1 million of recorded goodwill arose from the
1999 acquisition of Team’s legacy NDT inspection business, X Ray Inspection, Inc. (X Ray was moved from the renamed TMS group and combined with TCM in October 2005). Both the TMS and TCM groups are of comparable size and have similar operating
profit potential, as demonstrated by the summary level budget information for FY 2006 presented below. (As mentioned, we expect TCM margins to improve as our financial and operating systems are fully implemented):

FY 2006 Budget Summary (000's)

TMS

TCM

Total

 Revenues

$
100,000

$
116,000

$
216,000

 Operating Profit, before shared support costs

$
17,000

$
14,600

$
31,600

3.
Extent to which the component businesses share assets and other resources

 Both groups share technical and commercial support, health and safety, human resources, quality assurance and marketing
resources. Operations have been physically combined in six locations already.

4.
Whether the components support and benefit from common research and development activities.

 R&D is not a significant activity.

 SEC Response Letter

 June
23, 2005

 Page 4

 To further assist the staff we are providing the following documents which the chief decision maker uses to manage the business:

•

Excerpts from monthly consolidating operating results (February 28, 2005 close)—Schedule 1

•

Weekly Operating Report submitted to COO by field organization—Schedule 2

* * * *

 We would be pleased to address any further comments that the Commission has with respect to our filings.

Very truly yours,

 /s/ Philip J Hawk

 /s/ Ted W. Owen

Philip J. Hawk

Ted W. Owen

Chief Executive Officer

Senior Vice President-Chief Financial Officer

 Schedule 1

TEAM, INC. AND SUBSIDIARIES

 SUMMARY OPERATING RESULTS

 MONTH OF:

 February

 2005

 (in thousands)

 CURRENT PERIOD VS. BUDGET

NET REVENUES

GROSS MARGIN

EBIT

ACTUAL

BUDGET

VARIANCE

ACTUAL

%

BUDGET

%

VARIANCE

ACTUAL

BUDGET

VARIANCE

 TMS

7,949

6,415

1,534

2,546

32.0
%

2,612

40.7
%

(66
)

810

885

(75
)

 TCM

9,896

3,301

6,595

3,448

34.8
%

1,249

37.8
%

2,199

1,682

538

1,144

 TIS Support

0

0

0

0

0

0

(402
)

0

(402
)

 TOTAL IND. SERVICES

17,845

9,716

8,129

5,994

33.6
%

3,861

39.7
%

2,133

2,090

1,423

667

 CLIMAX

1,477

1,228

249

708

47.9
%

576

46.9
%

132

315

183

132

 CLIMAX INTERCO

(25
)

0

(25
)

(12
)

0

(12
)

(12
)

0

(12
)

 CORPORATE

0

0

0

0

0

0

(1,436
)

(461
)

(975
)

 TOTAL

19,297

10,944

8,353

6,690

34.7
%

4,437

40.5
%

2,253

957

1,145

(188
)

 CURRENT PERIOD VS. PRIOR YEAR:

NET REVENUES

GROSS MARGIN

EBIT

CURRENT

PRIOR Yr.

VARIANCE

CURRENT

%

PRIOR Yr.

%

VARIANCE

CURRENT

PRIOR Yr.

VARIANCE

 TMS

7,949

6,113

1,836

2,546

32.0
%

2,352

38.5
%

194

810

759

51

 TCM *

9,896

1,100

8,796

3,448

34.8
%

345

31.4
%

3,103

1,682

100

1,582

 TIS Support

0

0

0

0

0

0

(402
)

0

(402
)

 TOTAL IND. SERVICES

17,845

8,313

9,532

5,994

33.6
%

3,042

36.6
%

2,952

2,090

959

1,131

 CLIMAX

1,477

964

513

708

47.9
%

431

44.7
%

277

315

103

212

 CLIMAX INTERCO

(25
)

(4
)

(21
)

(12
)

(2
)

(10
)

(12
)

(2
)

(10
)

 CORPORATE

0

0

0

0

0

0

(1,436
)

(502
)

(934
)

 TOTAL

19,297

9,273

10,024

6,690

34.7
%

3,471

37.4
%

3,219

957

558

399

*
Prior year reflects XRI only.

 TEAM, INC. AND SUBSIDIARIES

 SEGMENT INFORMATION

 MONTH OF:

 February

 2005

 (in thousands)

TMS

 REGIONAL

 OPS

 TECO

 /EQUIP.

 GROUP

 TMS

 SUPPORT

ELIM

 TOTAL

 TMS

 REGIONAL

 OPS

 MFG &

 ADV

 TECH

 TCM

 SUPPORT

ELIM

 TOTAL

 TCM

 TISI

 SUPPORT

 TOTAL

 INDUST.

 SEGMENT

CLIMAX

 CLIMAX

 INTERCO

CORP

TOTAL

 NET REVENUES

7,949

1,722

34

(1,756
)

7,949

10,037

252

(393
)

9,896

17,845

1,477

(25
)

19,297

100.0
%

 DIRECT COSTS

4,072

987

35

(1,756
)

3,338

3,843

227

—

(463
)

3,607

6,945

792

(13
)

7,724

40.0
%

 INDIRECT COSTS

1,516

537

12

—

2,065

2,826

15

—

—

2,841

—

4,906

(23
)

—

4,883

25.3
%

 TOTAL COST OF SALES

5,588

1,524

47

(1,756
)

5,403

6,669

242

—

(463
)

6,448

—

11,851

769

(13
)

—

12,607

65.3
%

 GROSS MARGIN

2,361

198

(13
)

—

2,546

3,368

10

—

70

3,448

—

5,994

708

(12
)

—

6,690

34.7
%

 GM %

29.7
%

11.5
%

-38.2
%

32.0
%

33.6
%

33.6
%

47.9
%

34.7
%

 SG & A

1,350

170

216

—

1,736

1,670

39

57

—

1,766

402

3,904

393

1,436

5,733

29.7
%

 OTHER (INCOME) EXPENSE

—

—

—

—

0.0
%

 TOTAL SG&A

1,350

170

216

—

1,736

1,670

39

57

—

1,766

402

3,904

393

—

1,436

5,733

29.7%

 SGA %

17.0%

9.9%

21.8%

16.6%

21.9%

26.6%

29.7%

 EBIT

1,011

28

(229
)

—

810

1,698

(29
)

(57
)

70

1,682

(402
)

2,090

315

(12
)

(1,436
)

957

5.0
%

 INTEREST EXPENSE

—

—

301

301

1.6
%

 PRE TAX INCOME

1,011

28

(229
)

—

810

1,698

(29
)

(57
)

70

1,682

(402
)

2,090

315

(12
)

(1,737
)

656

3.4
%

 PRIOR YEAR MONTH OF:

 February

 2004

TMS

TCM

 REGIONAL

 OPS

 TECO

 /EQUIP.

 GROUP

 DIVISION

 SUPPORT

ELIM

 TOTAL

 TMS

 REGIONAL

 OPS

 MFG &

 ADV

 TECH

 TCM

 SUPPORT

ELIM

 TOTAL

 TCM

 TISI

 SUPPORT

 TOTAL

 INDUST.

 SEGMENT

CLIMAX

 CLIMAX

 INTERCO

CORP

TOTAL

 NET REVENUES

6,113

1,175

25

(1,200
)

6,113

1,100

—

1,100

7,213

964

(4
)

8,173

100.0
%

 DIRECT COSTS

2,951

514

28

(1,200
)

2,293

416

—

416

2,709

506

(2
)

3,213

39.3
%

 INDIRECT COSTS

1,143

318

7

—

1,468

339

—

339

1,807

27

—

1,834

22.4
%

 TOTAL COST OF SALES

4,094

832

35

(1,200
)

3,761

755

—

—

—

755

—

4,516

533

(2
)

—

5,047

61.8
%

 GROSS MARGIN

2,019

343

(10
)

—

2,352

345

—

—

—

345

—

2,697

431

(2
)

—

3,126

38.2
%

 GM %

29.2
%

-40.0
%

38.5
%

31.4
%

37.4
%

44.7
%

38.2
%

 SG & A

1,197

161

235

—

1,593

245

—

245

1,838

328

502

2,668

32.6
%

 OTHER (INCOME) EXPENSE

—

—

—

0.0
%

 TOTAL SG&A

1,197

161

235

—

1,593

245

—

—

—

245

—

1,838

328

—

502

2,668

32.6%

 SGA %

13.7%

26.1%

22.3%

25.5%

34.0%

32.6%

 EBIT

822

182

(245
)

—

759

100

—

—

—

100

—

859

103

(2
)

(502
)

458

5.6
%

 INTEREST EXPENSE

—

—

38

38

0.5
%

 PRE TAX INCOME

822

182

(245
)

—

759

100

—

—

—

100

—

859

103

(2
)

(540
)

420

5.1
%

 Schedule 2

TEAM INDUSTRIAL SERVICES

 WEEKLY
REPORT

 June 17, 2005

 THE SAFETY CONNECTION

•

Compiling Safety Statistics for IC calculations.

•

Amending / renewing various radiation safety licenses.

•

Accidents/Injuries reported this week:

-
MVA / Preventable, Hammond (1232) – Driver rear-ended another vehicle.

-
MVA / Preventable, Phoenix (1228) – Driver rear-ended another vehicle.

-
First Aid, Lafayette (1225) – Employee brushed arm against steam line causing a minor burn.

-
First Aid, HEC – While removing a handle from a piece of equipment, handle came loose striking employee in the mouth.

 TEAM MECHANICAL SERVICES

 NORTHEAST REGION

 (VP/GM - Steve Smith)

•

DuPont, Belle, WV – 10” hot tap with bolt on fitting. ($9,500)

•

PSE&G, Salem Nuclear, Hancocks, Bridge, NJ – Wire-wrap on 46” exchanger. ($30,000)

•

GE Contractual Services @ Newington Energy – Awarded 10” flange clamp on competitive bid against Furmanite and Leak Tech due to engineering data supplied to customer.
($20,000)

•

Finch Pruyn Pulp and Paper – 14” flange enclosure. ($19,000)

 CENTRAL REGION

 (VP/GM – Mark Buchheim)

•

US Army Corps of Engineers, St. Louis, MO – Emergency boring bar job for lock gate on the Mississippi River Dam. ($15,000)

•

ConocoPhillips, Wood River, IL – 30” stainless steel flange enclosure. ($65,000)

•

Marathon Ashland, St. Paul Park, MN – Presented Team’s BBS Safety Program at Monthly Contractor’s Safety Meeting.

•

ExxonMobil, Joliet, IL – Bolt tensioning on two 60” heat exchangers. ($25,000)

•

Tri-Gen Peoples Gas, Chicago, IL – 14” 300# flange clamp on priority for new customer. ($10,000)

 SOUTHEAST REGION

 (VP/GM – Pete Wallace)

•

Gulf Power Crist Plant, Pensacola, FL – RFQ for 70-1/2” BFW clamp. ($43,480)

•

Seminole Electric, Palatka, FL – Quoted 14” line freeze. Thanks to Sid Spoehr for his assistance. ($8,000)

•

Carolina Pride, Greenwood, SC – Quoted two 12” double line stops using bolt on fittings. ($67,000)

•

Wellman Chemical, Bay St. Louis, MS – Performing 12” line stop and various hot taps. ($40,000)

•