TISI - Earnings call transcript Q3 2018

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Operator

Good day, ladies and gentlemen, and welcome to the Third Quarter 2018 Team, Inc. Earnings Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn introduce your host for today's conference, Mr. Don Bleasdell, Vice President of Finance. begin. may you Sir,

Don Bleasdell

Greg and this information being call any X, Conference as to our Investor company's webcast via today's Call. the through on been link Officer; it Amerino Chanel, only Officer. longer audio Chief at as Fiscal be be call November the and to recorded website going This call date Third replay by teaminc.com. accurate section today, can Year Relations speaks Gatti, has XXXX. will and and There will Executive Chief XXXX With is company's advised the EVP welcome, a of Information be teaminc.com. you, of of be and Team's transcript. the website, the Financial also of everyone, - Quarter are Boane, that may replay webcast available Thank under me please accessed on or call, Therefore, of any time-sensitive no today's be

addition, November how XX. be replay release. The available yesterday's a until features earnings on access these to will information telephonic In provided was in replay

of pursuant we this call made future expectations, you financial continue, remind safe future Litigation performance. to Act Securities Private that the including I'd harbor statements forward-looking Before statements of and contains like provisions Reform the XXXX, to of events or

I'd no in the uncertainties, Annual and furnished forward-looking like Commission. results company described that and investors such the to revise Gatti. detail it The and caution and inherent to XX-K risks forward-looking factors update a with factors and Form over turn we in in on publicly to Exchange documents involve that, materially Amerino company's differ Report uncertainties And other statements. Securities obligation to actual Mr. any or now reports or filed with the other assumes and from could These company's are of statements cause risks those in Forward-looking statements. and any number contained

Amerino Gatti

in you, today. delivered our We XX%, revenues Inspection and X% Heat revenues everyone. of in X since quarter providing before Consolidated Team growth for year your you quarterly appreciate us Furmanite offset detail update and Thank $XXX year-over-year Treating respectively. Greg back the were from hand XXXX. improvements on up our in Team's me Integrity, Services third financials X% Don, to million were Inspection business, segments, gains These the then highest Assessment were Mechanical $XXX the by joining take begin These we brief I'll commentary a were the and segment. additional and which questions. representing an acquisition and organic X% will prior good revenues. call by in partially morning, led period, our decline increase a and million, quarterly QX Quest by of

has year-to-date certain to remarks. in million segment's year-over-year. ago. X% $X.X million of adjusted that from address a impact improved Adjusted the EBITDA $X.X his year excludes However, the Consolidated had EBITDA will prepared performance slight Greg charges improvement a

operating us execution. and streamline component more sequential previous in a impact The program SG&A. reduction an flattened is made to program SG&A create our by has making our on evidenced mentioned key The X% our reduce OneTEAM business will As is call, million $X in our a overall agile organization or of costs. our and additional as leverage in

management. and continue focus working on cash We flow to capital

cash full free of flow, flow million operations debt that significantly flow of used any free to QX funding communicated, million free year balance. previously be remain 'XX We positive improved to debt. down free program the the quarter the after cash out I'm XXXX. As throughout close of flow of $XX to our from committed months would the We pay the million for quarter. was generated cash generating X last to the $XX pleased in which $XX flow OneTEAM with applied cash cash

from signs our integration early of program. seen have transformation We and success

wear leverage $XXX EBITDA year-over-year positive U.S. QX XX% of the CapEx in U.S. our to last of Mechanical Services compared in $XXX,XXX year-to-date or the compared at to tear, adjusted to XXXX include: and due increased previous higher the delivered sequentially was last prior increased prior Some The X.Xx X year; million $XX.X was improved QX by 'XX these flow million, This quarter compared midstream of than the utilization and for period segment rates finally, in EBITDA EBITDA spreads, over higher-than-historical of and asset I'll performance year; the $XXX has to been pricing operators consecutive $XX growth in the by XX-year delivered the XX% quarter, details year, impacting our compared or third more are revenue by segment continues Gulf at free primarily comments. I'll to utilization an MS X% X% driven by from now year. million, versus rates. our increased year. revenues performance. X.Xx capacity third incremental million now third reduced prior as XX% for the not and year-to-date prior and year turn refinery turn year; and constraints same oil as ultimately utilization Coast The favorably; XX% end Coast highlights in year; Greg West the prior quarter the of third last average. utilizations for - Treating period has his reduced year. spend did in widened the to Adjusted QX financial track year-to-date SG&A Inspection last additional both $XXX to are quarter. increase million recent million well quarters. increase Adjusted million versus later X% over a will $XXX last million, quarter cash same $XX.X The This year-to-date QX was for This projects. our by business. Heat Higher segment a quarter. average refinery of running drop pipeline revenues year. X% X% track regional to in is is in versus our bank segment which crude for ratio revenues QX when for expectations This consistently XX% was some differentials. 'XX prior percentage delivered than non-repeat divisions refinery on down lead $XXX segment meet of facilities QX decrease less provide drivers XX% activity of

creates maintenance our impact filing in activity changes that term. it demand the defer However, when operators adversely levels and near projects,

continue management We resource proactively support function invest operations in optimize and to these challenges. our with fluctuation workforce to

longest MS achieving revenue year-to-date revenues and EBITDA last million, XX% a EBITDA increased by increased over QX $X.X prior declined, $XX had adjusted a Although Adjusted a year was over record when prior XX% strong segment million tools X%, subsea in the year. Integrity QX to revenues Integrity of Quest quarter, inspection million year. for increase The to $XXX,XXX $XX QX to and compared subsea environment miles. as to successfully this the its market date our successfully proprietary covering to Quest and third with compared continues in work Similar quarter XX in make high-pressure services. Quest inroads completed in inspection of pipeline last completed deepwater XXXX. quarter,

the hours pressure temperature on this to Our ability remains record perform safety under XX performance. Integrity for for annual continuous Quest to inspection our InVista was high and on now key achieve application revenues. highlights I of track will back-to-back differentiator operations. provide

we and focus have safety injuries Through of to be quality. when goal audits reaching last to continues Our XX% the our highest to decreased same period of priority our recordable X. deployment and district monitoring safety continue on fleet by and systems, year-to-date our year compared our

successfully team turnarounds customer division in a without or a with incident. completed aid Our significant the central recordable first X

man-hours West we at of We milestone recently same X without customers. achieved one also major for the a achieved of In facility. milestone our man-hour our division, X.X million a incident million

technology. efficiency digitally-enabled maximizes to our is quality Team that platform Digital on proprietary and through workflows. Moving

now XX,XXX oil the day, simultaneously the technology projects projects and supporting XXX,XXX of we crude X from of customers. successfully versatility different to started XX new per our at range X During exemplifying projects platform. capacity with scalability are quarter, and approximately production barrels facilities in The

outlook energy interest the I'll our digital around OneTEAM to has XXXX. enabled adoption domain-driven progress market as alone, demand the QX receiving Digital trained share forward within quarter In traction increase and consistently Team and after functionality also applications the recognition in is third to The full for review. strong we platform. early in we worth continue that our grows. financial Greg? of and applications customer accelerate and in are and sector, technicians. Greg's us deployment, with noting invest about proven an more It is to there significant We commercialization additional move expect XXX we

Greg Boane

QX. million Amerino. margin, QX on QX I margin SG&A, to and decline from revenues primary of $XX quarter comparisons $XX decline revenues 'XX spring decline with sequential from my adjusted QX 'XX Mechanical season cash Consolidated margin or flow, revenue Amerino versus current gross Thanks, negative off be margins cost across in impact QX reduced my in million by coupled et QX in coming as will and QX freight, equates million to historically million most the gross QX adjusted to million which historically approximate Consolidated is will primarily the QX leverage turnaround cetera, contributor of 'XX seasonally $XX sequential seasonal operating discuss gross from to segment declined XX.X% all a XX% 'XX due generates lower from margin headwinds points in million fuel, QX, sequentially 'XX. gross where margin to by segments $XX the increased revenue XX% profit XX.X% quarter the 'XX. such Services around materials, basis the labor, by is margin the later. QX to The sequentially revenue. due XXX $XX gross XX% with declined in lower gross around QX to $XX 'XX. weak to serve will 'XX. gross decreased an on focus QX decline a discussions to compared EBITDA to

As significant the Amerino utilization. reduction in demand mentioned a U.S. resulting segment refinery earlier, experienced Services 'XX, Mechanical from higher-than-normal QX

pressure extreme levels from margin in Services during Mechanical Additional segment the came QX on volatility gross the quarter. activity

Then or volatile to July. billable very In August. hours to the to are short Heat and the to $XX Inspection million. a planning a Treating Services ramped cost from and 'XX XX% over technician activity X Specifically, sequential had margin manage a time. down on up decreased also XX% in XX% industry, related XX% month cost incremental segment challenging hours such when inventory workforce gross this $X Integrity QX sequential Mechanical segment segment June from labor charges adjust segment in declined levels by on billable million. gross Quest revenue period Services approximately services Mechanical revenues both effectively some of September later, by The drop it's of ramped structure of margin decline.

cost Moving 'XX not million initiatives organizational relates compensation from SG&A $X indicative cost OneTEAM for $XX.X which million to The of quarter generated related on OneTEAM the and in margin sequentially some gross declines million includes million and $XX.X 'XX. was QX during compensation. million to OneTEAM activities. Offsetting QX the of professional expense work QX decrease by were of Adjusted in that stock-based SG&A sequential program from operating expense are our the million SG&A and Consolidated to 'XX QX. consider $X.X the lower the to core the fees, related to incentive do savings we and of $XX.X QX SG&A. reductions reduction that deployed for be restructuring $X.X declined

QX shortfall businesses Integrity in XXXX performance revenue 'XX. Inspection revenue adjusted of level, program We reported a Quest approximately year-to-date EBITDA on XQ X% Inspection as Quest We improved the adjusted X.X% in growth decline revenue million $XX Heat QX came of performance. EBITDA Treating adjusted versus of 'XX XXXX and revenues controllable X% X our Services up Since deployment the part their Mechanical estimate this adjusted which XX.X% OneTEAM 'XX. Total 'XX EBITDA SG&A. QX X consensus segment QX EBITDA declined expectations the in Shifting QX driver been the in million. QX by to noncash key came XXXX Offsetting $X of improved over 'XX consensus to quarters. QX QX in as 'XX. over X%. the $XX of QX 'XX. revenue of approximately QX and margin focused over of and started segment's We QX we've 'XX, excluding well with million slightly revenue in strategy and from Analyst was from The QX the of X.X% $X items, successful Assessment Treating X.X% we as our incentive segment with were adjusted compensation in SG&A versus million compensation, generated 'XX cumulatively a adjusted Inspection impact revenues EBITDA QX 'XX QX of - has million. $X at 'XX up in D&A $XXX at record variable of our from million 'XX. was transition of to million million, for in from shortfall 'XX. leverage and approximately achievement Looking and QX stock $XXX to margin growth last $XX is the 'XX Integrity in EBITDA or XX% margin million June view was the shortfall $X the versus to Heat reducing 'XX.

charges both EBITDA $X million 'XX million 'XX QX in Again, versus QX in inventory, QX $X debt 'XX related $XX out had impact of We in we EBITDA. and on QX 'XX. of adjusted provision which claims adjusted million been 'XX the $X to legal approximately backed to 'XX, impact 'XX the is bad in the to Additionally, margin decline million item Services in around generated QX Mechanical incremental $X and not QX adjusted estimated have million. Shifting EBITDA. the and of revenue largest QX

SG&A $XX.X I'll side, classified QX the and favorable on made savings cost program how impacts, versus color little because On SG&A a QX 'XX which 'XX some was million trade has the QX Furmanite by primarily is million, compared offsetting was 'XX The 'XX of see Shifting million give to the program an QX SG&A to OneTEAM compensation. difficult SG&A stock-based stock incentive adjusted increase related QX $X noncash QX million the D&A $XX.X remaining incremental of increases, QX favorably versus categories is, SG&A costs million spending the higher; and bad OneTEAM and QX higher; compensation 'XX impacted decreased and follows: as 'XX 'XX they QX $X in 'XX QX expense $X QX $X.X 'XX. now takeaway There was 'XX has approximately was above accelerated in with here in comprised about as annual million main higher name debt million was $X as amortization; D&A 'XX. $X of are higher. $X.X million versus million the QX have compensation approximately to

For full XXXX, around $XX expense depreciation be expect year million. we amortization to and

$X.X operating eliminated million D&A January the XXXX, will the be Noncash decline a as amortization previous by XXXX. stock-based trade compensation million program consistent minutes million severance of of will quarter; $XX XXXX, of Furmanite the fees. $X.X certain $XX of fees There expected items the to consider activities. spend OneTEAM is related around that discussing not work indicative For was be and in I'll million beginning $X current during other in to million primarily name professional core with to guidance. our restructuring our and quarter few excluded costs, we be the X, million do costs; professional legal $X.X

amortization are an effective should resulted foreign noncash combination of the quarter of income the around future I'll the of in now convertible includes Below the earnings losses, and the 'XX offset interest taxes deduction sheet Domestic QX and new down for by interest cash of income. $X.X statement. $X.X and actual interest are Team The The Reported flows. for rate million NOLs cost for 'XX tax limitation. XX%. and was million tax approximately of approximately related to on rate expense on pretax factors issue balance these normalized Moving effective valuation of and the operating net the allowances, XX%. discount for $X taxable cover be available Cash $XXX impacted million. QX to NOLs debt million amount was the income, impact debt. debt

used leverage As was cash of which and operating QX CapEx QX $X in in XX. of $X of in use months XXXX. flow senior million, highest operating operating expect million now Amerino ratio million $XX QX year back Including as cash and X million of sequentially X.Xx million, 'XX. represents close was last positive that of XXXX. over out still X.Xx improved Year-to-date borrow, financial in 'XX. was a adjusted the cash 'XX Operating $XX over Amerino. million million year-to-date, call $X with cash free 'XX debt million, since leverage the $XX which flow flow to million year. $XX was EBITDA to last turn repay cash million That the flow cash cash flow to we and $XX flow. quarterly outstanding secured X.X completes was QX secured of which decrease QX our September mentioned, improve from flow $XX senior $XX EBITDA, to The the represents ratio down we adjusted - around I'll the have review. also free 'XX generated from CapEx

Amerino Gatti

Thank Greg. you,

progress transformation on a your program I'll take track. The reviewing few integration and outlook. remains we Before minutes OneTEAM's and spend OneTEAM our questions,

for expected to the $X of we savings to year. profitable to our to of $XX pillars million integration of achieved restructuring achieve specialized of the growth X total, track efficiencies of under of are this annual on million. achieve we services OneTEAM cost remain the and to between million us half second to $XX XXXX, have program In the $XX both million end higher for million savings the cost the the the and $X.X majority completed solutions Through During differentiated quarter, and our set customers. foundation and discrete deliver QX enabling

majority of focus With pillar. progress, now actions the to the shifting revenue enhancement the our is in

review During commercial contracts that XX and our our prioritized contracts last of I our noted initiated and completed the top our call, group negotiations.

We And and to targeted a continue to that complete. individual is an increasing anticipate negotiation, part to taking tightening and to contract execute Each several contracts. to cost this labor costs markets we recover negotiations of other is ensure these on key our we higher related serve. quarters

few We in successfully with contract stages with X customers new have advanced are a and terms others. negotiated select

customers. Revenue nonrepeating XXXX. In to utilization activity due addition, for outlook. year Shifting focus Hurricane smaller over call-out our our is challenge over Harvey forecast be improvements core surge quarter, we will pricing continuing this refinery XXXX QX to a showing and began including our last to refineries, from high end improvement markets, on anticipated for rates. growth The

see exceed the to some labor these XXXX. of in regarding associated underserved fluctuations, on labor our our causing demand recent confident we improvements rates, is contracting, our X% pressures commercial are remain opportunities we market not and will of discussions we constraints wages labor disruption And many Notwithstanding organization. and in Additionally, projections market market to these been a made to our increase that we're by our for serve. have we levels while The have X% technical sales maintaining the and to utilization increase. leveraging growth in from the markets newly-formed labor. cost demand Recently, these there the growth and end exempt in

ongoing skill the sets will the As an people our with be grow, challenge. right core right markets finding

free performance on XXXX delivering cash key EBITDA and flow. focus to continue We growing improving of increasing objectives our safety,

number a to EBITDA margin XX% confident year we we XX% expect strong, XXXX. track deliver by annual face challenges, adjusted still we close to we're out remain on to of While that and the

I'd take about their again and their we for be optimistic questions. made have and employees holds company. the we like for our happy commitment At progress your we'll are point, questions, all change, with to dedication to your to hard future to what significant work Team. before our this thank Finally, Together of take

Operator

question Tahira first Our Instructions] the of KeyBanc. line [Operator of Afzal comes from

line open. You now is

Tahira Afzal

Hi folks.

Amerino Gatti

Good morning, Tahira.

Tahira Afzal

a the profitability you to guess, good I given to can on push OneTEAM Can it's out, and turnaround to flow But more of talk that of XXXX qualitatively? should well. pricing is, congrats that. assume loaded initiatives are early Amerino, cash you about free the and It's you're you in trajectory so bit XXXX sort want based your my Good to within what hear question extent traction, going the first good for Congrats. some on labor that. a improvement? we, hear that outlook do the headwinds back-end

Amerino Gatti

of think, on you Tahira, all, the first So thank comments. I

right long-term employees is think and medium, our progressing. are of but I taking effort for way thing embracing terms the moving with overall the program the the change a of from It's OneTEAM company. the Team, the very lot it happy that we're And foundation in is forward. the

customer models our and trajectory In our which ahead, large leverage, ways. meeting MSA a like in price OneTEAM terms our pricing, look and Digital. call-out few productivity-type of the to with some to then a There's continue things see commercial number which pillars. we're is pricing is having customers, Pricing And customers. Cs of directly list we've different cost contracts, revenue, coming of got There's Team more using are and the on Ts to finishing them. that's we and with approach we're a to negotiate related more different a of small starting

EBITDA increase from XXXX, couple we basis in year-over-year points the to throughout expect So hundred reaching 'XX. do grow a the percentage year

Tahira Afzal

to And then, right, And X you talk in cash performance where How hear. of as we should going see over flow obviously, levels That's consequence quarter think year? don't was the XXXX? debt of can the the next and we phenomenal. I too a good Amerino, get end All you last months bake free as want cash to okay. potentially into head by the flow about about excited.

Greg Boane

We $XX QX. million CapEx negative Tahira, million. would $X having Last year-to-date, cash flow in of our this Greg. anticipate is is -

less QX QX. considering us back we've million. half And said, that So $XX QX. activity cash from of levels $XX as the would flow on generated million half we put operations, of loaded negative on front-end with without at back the activity are

view we target with So mid-XXs cash year free cash to of of as finish look have a flow generating QX, flow. positive the we at

Amerino Gatti

XXXX, by of the into I going then, end think, And Tahira, will OneTEAM program cycle the QX. clearly, down

it investment. cash is which our And So revenue on to is off, then continue target our XX% a drop working X% between And improvement expect flow. year-over-year. million of generate will $XX million see and to to that in of our to capital X% we $XX

you that that targets of XXXX. ahead the some we're looking gives So into

Tahira Afzal

That's great. congrats Thanks you and again.

Amerino Gatti

Tahira. Thanks

Operator

Thank you.

next CJS Our Craig line Bibb question comes the of from Securities. of

Your line now is open.

Craig Bibb

Okay. Could inspection Integrity was of the than the the It you sounds that. more The the Quest rest Is business? performance quarter drove in us outstanding. different some give like size seasonality that subsea any details, market? the maybe of the

Amerino Gatti

right playing mostly is of It market, the it Mexico because to the durability tools of that our rugged in and handle So of a we're the in of now, reliability, are architectural in we're sizing higher us of around globally. the how higher exciting leverage lot and the - and benefits to pressures. just they phase still able we're temperatures Gulf it, for part

a able that, a give we in think is past. size, So area regulation but customer haven't an standpoint market I you been standpoint, creating the necessarily think I to can't inspect from market do we're they and

market. So it is new a

Our to And as customers, ago I we're tools' a beneficial working new very, quarters sizes, HSE customers. and it. the refine couple an are directly on continuing for with very tools mentioned, of developing from perspective,

as it an good our to to see we So area opportunity, continue business. we're and going invest it's a in

Craig Bibb

in a that? quarter big you around as just a how it I was for Quest trick broad mean, or how guys of you maybe could the - percentage -

Amerino Gatti

But So exist. to we're - creating right so fairly now, that X We're quarter, again, market exciting it's it's yet. a not X operations per still it's move it's a major new completely a doesn't early. doing because,

So a today. not major it's major, percentage

Craig Bibb

Okay.

had was the What you driver mean, I then, for entry huge small? So that's revenues. real subsea of a

Amerino Gatti

right good got some that operation analytical refining well and nice predictive were to that people one it's people space, customers. And capital solution that traction over we've hardware, for our traction on work. decoking thing our We've we're is pipeline is, tool good that's in an we're Well, look as now globally, area risks inspections, highest customer. additional investing And the making on handing if an that is integrated business the about from the and an into. good the of downtime heater got our you as

very So we've a solution. good got integrated

has Quest as that's helped we've us last of budget. that the back track our gotten on So one couple quarters with

Craig Bibb

Okay. well. or color Could is it And you a stickiness that? And around more us give utilization? it Team little at you going do like improve the How then sounds does benefit? Digital look

Amerino Gatti

Sure.

overall well think I mentioned is it around gains. in their customers, platform ago, take the and fits ballpark a and What's type few XX% the Digital, Team plant of it's productivity starting work. efficiency quarters to and of - our So seeing still that's I efficiency now into project we're going turnaround to they're and the how maintenance-type

number - The lines Digital. Team in So and positive. And that a it's are very that lines - our we're service productivity positive. its the service a expanding ability of to communicate is with different is systems templates

I And stronger within is than we're corporate at from of platform in to XXXX digital much customers different the of a level. seen the also seeing gains, how very customer. - And discussions part inspection. They're are efficiency seeing part of at and they've number is of technical - the discussions other our some all implement the is positive. with projects, officers the customers, So plant stickiness that getting from at the so going now levels a traction to commercial and it's market. to some are starting productivity can domain things value we And that it's the the the its they're those, of you also number level, tell have happening we're and can take gain of both with with their the feedback starting but value customers

reasons progress going the very the our investment there. platform. with we're to we're increase making to of or that's commercialize that So one invest happy we're And

Craig Bibb

Okay. you guys And one, end run rating last should by full savings of be OneTEAM the with XXXX? the

Amerino Gatti

be full of, call cost XXXX. rate, X guess, I first let's if you would yes, look at it the the pillars year, So run

the full a be completed, pillars, hit for if year, of that 'XX. we'd at to you're So X looking But the it's XXXX. first level cost end

Craig Bibb

Alright, thanks Okay, great. a lot.

Amerino Gatti

Thank you.

Operator

[Operator Core Partners. Instructions] question comes of the line Tom Radionov next Our from of

now Your line is open.

Tom Radionov

morning. you regarding - I made Amerino, had specifically, think regarding the guys, good Hey comments previous do that one a QX. question you of

that the a versus the be. suggested otherwise it be last little to and you think have high than year given may expected bit compares crack would more QX difficult spreads, you weaker I

the last Just strong EBITDA from was wanted that making a or you're year, very little down that obviously, to that that a comments drill bit. number. revenue Was vis-à-vis QX look EBITDA? I at on a As

So if may issues sort market just given versus to that be reported messaging had sure that implied. the want to last higher some EBITDA make year you of to you're is these of that difficult it

Amerino Gatti

Sure.

just in me the revenue let will up a first. obviously sequentially, start on stronger be expect, turnaround with QX QX. do fees We revenue So to

However, last my of Hurricane headwinds QX as rates. strong - QX year Harvey because of last the got utilization as sequential this the to both on year probably QX. the see as refinery a last we've quarter year's the not comment was We now as specifically of versus work of surge some related increase, project well though

EBITDA still our to on QX. plus from savings still revenue of an But in look QX. take level kick a would for the the confident an EBITDA levels to when at Greg fall-through reaching drop the we're with And I on obviously mentioned, then line. - that's lot serve. we headwinds from in we've in to levels plus continuing $XX So got that cost quarter-on-quarter of revenue to And we level, have million some the the

Tom Radionov

Got it.

that leverage me that XX% operating margin $XXX $XX commentary performance the if XXXX, run in EBITDA. full of $X.X XX% $XX kind back to question is your the leverage of and $XXX quarter, I the on EBITDA gets I about the then the in maybe at guidance, about is, of I math revenue million kind basic the of specifically, EBITDA. implies based talked your sort market, XX% of margin about think sort million. then my assume to million, some way, And the for simple XX%, guess, it's and more and about point, and that QX, math of second billion that revenue. million, I EBITDA of on guess, you've historically, the the you fair, X% that number But very terms with going in guess, is revenue I think to your math just way then goes And year, to I of sort more question And X% given normalized XX% of operating here, of do XX%. where I operating that another I given how about to of is bit. think which kind talked leverage XX%, at is to that feel ability like you sort XXXX, so a guess, of so road. up leverage down like operating goes I EBITDA XXXX, to reconcile numbers I to line by that if and in EBITDA from about kind in the a see about of more down want my these margin and XX% And of little probably with achieve kind

Amerino Gatti

X think there's I Yes, factors.

growth is on existing. operating new and probably XX% little a and that, cycle a bit than leverage growth Our between XX% between higher

years. with lost the that over XXXX. as traction, is that's increased, movement part customers if decreased costs we've last second couple our to revenue one our the the drive our thing pricing through thing. now said, because pricing We pillar, shift has we recover work that or to And the as big a see have gaining of do is with well I So of pricing

cost X the to XX% we're getting leverage, and XX% where pricing, a for that's between to pillars XX% our XXXX. XX% So

Tom Radionov

it. Got

perspective? question working different the you third then very a capital. from in you capital expect Okay, that Obviously, Is will drag quarter QX, the way strong trends typically a a see QX working out sort from your the And on from last And of in shake strong quarter. a performance that would typically perspective? any understood. capital be given working quarter

Amerino Gatti

last a million. $X QX $X year flow of use flow in only cash cash million. was about last operating year QX was Operating

a done our said, receivables on collections. half strain quarter. is I in we're QX, the free And I that ago, we've there good being activity a loaded QX. there's focused we it's with it's, So of focus on year the yes, our today our cash on front-end QX as than generate of stronger had flow positive I And think to with job less expect than back going more and while,

Tom Radionov

it. Got

appreciate you Thank I great. much. really so Okay, you, the color. guys. Thank

Operator

Thank remarks. I'm turn now like call you for I showing you. And the to over the closing would for at questions to this management time.

Amerino Gatti

joining to you. look thank and Chanel. next and this like once interest we you I'd call your quarter. on us in just for with everybody speaking to for Thank Team, again Thank forward again you,

Operator

Ladies participating concludes program. in today's for today's This and gentlemen, you thank conference.

have Everyone, disconnect. day. all may You great a

Team (TISI) 11 Nov 182018 Q3 Earnings call transcript