TISI - Earnings call transcript Q1 2020

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to Team, Inc.

First Quarter 2020 Earnings Conference Call. [Operator Instructions] I would now like to hand the conference to your speaker for today, Don Bleasdell, Vice President, Finance. Please go ahead, sir.

Don Bleasdell

Thank you, Joelle. XXXX Conference Team's to everyone, First Call. Quarter Welcome, are our our Chairman me Financial on Chief Gatti, call today's and With and Amerino Executive Susan Ball. Officer, Chief Officer; also Investor Relations of accessed is This can at section webcast link the audio our be call under through being teaminc.com. the website and speaks as today, on XX, June recorded Information only XXXX. this call of replay Therefore, of the as longer be please be accurate advised reading. that of any listening any time-sensitive transcript information may no or date it will replay going a will and webcast website, today's There available of by be call to teaminc.com. be via Company's the

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

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

over Commission. furnished publicly involve of risks law. in documents I'd with no annual investors statements. assumes Form may uncertainties, the are inherent those on contained Amerino. factors and by required any like any Forward-looking cause as and filed on the differ to detailed from be uncertainties report XX-K caution to or other in and Amerino? could and forward-looking Exchange results now Company's factors turn These and we revise risks and materially statements number and to reports The update the forward-looking other a or call the Company Company's that Securities obligation statements, to actual except

Amerino Gatti

you healthy. us are you and today morning, good and and Thank you, Don, appreciate We safe joining and families hope your I everyone.

and thank well workers would These My the our from as this dedication. quarter’s also those I efforts will are containment and of like their period, and call far wellbeing as of I on During families be for times clients community. and employees extraordinary this on the their the focused dynamic and and healthcare the to management front routine. supporting team lines and our earnings challenging remain

This initiatives continuity; end-market health We the in position and which to actions previously business will our pandemic. managing decrease key for start strategy. three are the will the provide second, with us financial I'll high and after our transparency our and through align our our and will third, morning, I revenue an ensure financial recovery: the around decisive a our the the with then position level overview program. and trends provide and Susan First, OneTEAM review announced how taken outline capacity team’s the update business results activity; quarter of detail diversification business safety first people that and on we of corporate near-term an market

quarter by in impacted $XX.X were lower quarterly down noticeably were $XX the results $XXX Consolidated was conditions. or quarter margin revenues first quarter. ago, par first despite from on XX% million, year Our million, revenues year-over-year market quarter XX.X%, adverse gross first a with prior million XX.X% of year

cash operating flow approximately million reduced to expenses quarter $X.X we SG&A of by first able positive compared XXXX. were million addition, the generate of $X In to and with

the drop of of XX% were Mechanical our decline down compared a adjusted revenues from performance. Turning million, demand. first in XXXX last $X.X Mechanical Services $XXX.X first the from period quarter global a work increased the and was was the the million, impacted to segment field until XX% into March to slow EBITDA quarter, start quarter when Services by pandemic After to experienced and same year. mid-January activity

operators work programs. step change Mechanical ongoing expectations, its in did quarter pipeline as the Services management While our performed a midstream not integrity meet saw

manufactured matter We high-quality fittings us portion the $X.X from stop paper and Heat decline power activities by Team downstream first over to on example awarded revenues disappointing Treating continued sectors. XXX% of industries tap growth increasing revenue time. hot XX% remediation an XXX to was primarily XXXX Inspection geographies. and is for we of engaged This for skill saw Integrity example, line an improving diversification quarter operating field project. expertise XX% of client QX result, and state-of-the-art a XXXX. And quarterly quarter markets, pulp as across revenues of in delivered the supply initiative income and our from and an the Despite performance quarter, fittings was over in As by the million, XXXX. adjusted remainder of Quest were their subject $XXX.X EBITDA XX.X% successful million, & a down significant the results, sets integrity a our prior leverage in IHT’s its by our and and strong different first and

Header Quest Common largest inspected our During turnaround with resolution the LNG reactors East. its in system. the first proprietary Middle ever reactor completed quarter, high Using Quest Delivery in the technology, ultrasonic inspection

Engineering and negatively Overall, Advanced the COVID-XX enabled was the & production fitness service volatility driven crisis Our by the safely. and activity commodity a quickly affected by triggered oil pandemic and to prices performed in clients group gas supply-and-demand economic repairs resume by assessment for that imbalance. prioritize unprecedented

million. these impact $XX revenue XXXX was quarter first from events The approximately

oil addressing oil health, North executive plus combined COVID-XX and pandemic impact of costs ongoing cash deferrals and mobilized planned oversupply, low. maintenance or into address their reprioritized all-time In in by led in four and with America In an continuity, members our fall business OPEC task to by to order each of in early production, operations, and addition, suspensions capital we management, spend. certain resulting the supply-and-demand scope forces my the clients projects, on increase quickly spread work, to March demand cuts the causing imbalance, Many the gas client created engagement of & an of of proactively to team. reductions the decision

of the priority, top has the our employees disrupted health our the and safety pandemic many The First, and is significantly task health people. of lives force. our of day-to-day

many our is of locations. by and those develop to crucial guidelines Along any standards, deem clients refinery unsafe. Therefore, are they we which clients, critical technicians remotely. to exposure. shifts policies operations. precautions client report our to client Following were be we cannot working implemented empowered worldwide. temperature operations implemented and risk necessary strengthening taking minimize screening our run and and protect are protocols, set our procedures, to markets our employees team, and with of be our majority The districts that include response limited social activities in to decision-making both, for worksite of the distancing On-site personnel teams continue monitoring to also the Team protocols stop and and have the to work safely

cost capacity coordinate to companywide non-field implemented and travel with pandemic We're to XXX have operate We distributed critical ordered field chain supplies project function With and disruptions, most how with to with our and families dynamic response activity respond and globally. to more to detailed has to districts ensuring reserves materials accomplished Transition of is measures. than scopes, logistical balanced guidance The improvements, the chain our and monitor with a we frequent global management markets return multiple employees and was plan diligently job workforce. responded our resources utilization, allows spread risk employees Together minimize instituted of minimize our pool and end inquiries including our to supply and schedule our Business procedures proactively respect directives, in employees centrally information ensure home. resource the executed changes measures of finally exposure, Continuity effectively to workforce PPE XX and that communicate the protocol technicians, mobilize at utilize our fluctuations remotely function supply and to to in employee the our support functions, mitigate can for manufacturing workforce work work-from-home following: us procured and our onsite this shelter-in-place about to over virus, to clients’ client's our Force project been management also more exposure their scenarios established and prepare global managing limited ongoing on provide provide furlough excess workforce Task to forecast requirements directives. environment. to and needs. and client providing Team helping Team's management by the

have XX%. the and to to pressing I and despite As in to able creative, are with slowdown our project mentioned rates connect to proactively find client XX% task capital result, their a established solutions force we maintain engagement schedule reevaluating activity, been earlier clients each plans. XXXX our the We and sales between challenges. cost-effective that high-technician ranging client utilization their spending

engagement client footprint data industries recommended technicians force example, components. offerings safely after technologies. Quest service explosion, damaged capture to our structures, and The equipment current a Unmanned the nested our of beyond recent Integrity's also advanced to is System Aerial new and and skillsets crew For support the of images refinery looking leveraging and by our task

We renewables, power, diversifying those experiencing utilities, and markets are by that are midstream and that focused prioritizing infrastructure and related less the products on disruption, best process industries can industries. support into services

the three manufacturing lead the and our of and recovery. leverage capabilities will strength We engineering integrated to segments, solutions

quick with ensure our million immediately that compensation; supply force furloughs included actions actions the restricting spend; partners reduction a the reducing specific aggressive time; cost implemented employee aligned delivered These the reduce $X reduced decisive management in force; to quarter. of These executing of in few last activity director, levels. cash enacting our non-essential eliminating and costs and savings decisive executive implemented weeks remain working chain than more and all costs. and Finally, unbilled first task actions March with and to during

CapEx include While are improvements, on competitive that we investments and a advantages, we laser remain billing, management which be inventory cash mindful to flow from collections, cash of focused required capital create reductions. may perspective

We through I position now future. for then review our share turn about workforce the Susan the phase four a market more prepare over forces detailed task OneTEAM to the in Team order and recovery and our will to financial progress. trends, Susan? and will for it leverage best

Susan Ball

good Amerino, morning you, and Thank everyone.

and in Inspection generated & unseasonably increased were the quarter lower over year, impacted which segments, revenues poor XX% Quest our supply-and-demand the several the subsequently offset pandemic Consolidated first a deferred Amerino XX% imbalance gross activity favorable following revenue or XX% North delayed Asia and a with a New due America Also $XXX margin the European Central due progress As year quarter $XX when was decisive extended $XX.X operations prior of by of Despite the international same down were COVID-XX Services, by start in declines delayed weather and and million. consolidated of XX% revenues and Pacific, our revenue to markets was the oil slow The holiday. ramp first approximately mentioned, compared until we in revenue the million, was Treating XXXX. fall-through of program mid-February, quarter gas pandemic. and projects of United OneTEAM the XX.X%, and implementation Heat from up actions. contributing million our Kingdom in Mechanical rebounded the to decline, the and Integrity ago. revenues cutting Year the After by of our respectively. to in cost XX.X% January,

The Mechanical and first margin, revenue improvement. gross XXXX Quest XX% XX% approximated a quarter a XX% XX% decrease; benefits for revenue a $X.X OneTEAM XX% of XX% million. on down savings declined; a Heat Treating on cost Services Inspection On was and decreased revenue increased segment on basis

to moving SG&A. Now,

the for OneTEAM price management program. SG&A the of first $X.X realize $X.X XXXX million, of down was We expansion compensation decreased quarter XXXX. million X.X% first reduced overall reductions Total $XX.X COVID-XX, fourth to the the million oil a from cost costs. the or through expense This a and imbalance the results quarter from were had to basis, indicated goodwill XXXX. impact our sequential continued perform noncash accounting to to actions, triggering year-over-year impairment & pretax $XX.X Under event, due On a in primarily to operations. costs of the of us charges of SG&A million SG&A XXXX including the quarter no travel occurred be quarter impairment supply-and-demand and on of during in GAAP the goodwill $XXX.X U.S. requiring the we gas rules, recognize had stock a segment. assessment. The first ongoing million the Company's assessment our an other to interim impact of impairment deemed goodwill IHT

for net $X.XX year million loss $XX prior to loss, a loss the reported loss same $XX.X in in charge, a XXXX, costs as or loss per in non-GAAP of the adjusted to quarter from legal of nonrecurring of for EBITDA $X.X net share share and compared impairment net other measure, quarter the diluted loss adjusted $XXX.X was first included quarter profit per as quarter in million net a the quarter. million of and $X.X million Consolidated $X.XX $X.X net quarter costs. Significant adjusted Adjusted first in loss was of $XX.X compared recorded XXXX million or XXXX. adjusted QX OneTEAM First the XXXX first million well XXXX. million professional the noncash adjustments a down goodwill in $X.X of which was million of the diluted as

was period reported specifically when XXXX Services XXXX revenues delivered year. to performance. of million Treating earned of compared Heat in period million, posted the XX% the million Mechanical last million the same the first $XX quarter down quarter million, our segment segment turning to $XXX.X year. million, from same Inspection XX% down and from $X.X last XXXX. revenues $XXX.X Now, in of segment $XXX.X first $XXX.X first Adjusted EBITDA down in quarter

First prior year This up fairly in limited year of million $XX $X.X Despite the million. over revenues, XX% was adjusted Integrity control EBITDA actions. was the were largely fall-through down EBITDA million, lower effectiveness Quest to the revenues prior $X.X of the of million period $XX.X cost to of result quarter. the quarter from was XX%. the

adjusted quarter. First than million EBITDA higher was year's $X last or XXX% quarter the

Our compared effective tax XXXX. quarter to rate in X.X% first was approximately X.X% the

The normalized $XXX domestic tax effective million, net domestic offset future is to of taxable rate to our are federal available XX% operating federal Company approximately Our which XX%. tax income. losses approximately has

representing have the CARES instead net carrying In the and of first back benefit Company's we the which approximately XXXX. a than flow of accelerated in Team over prior XXXX losses the period Capital generated the losses $X.X same cash cash free XXXX expenditures generation, commitment federal $XXX,XXX To of operating annual for forward, years, in XX%. recovery support flow, million. quarter the our quarter, to decline the carried During plan lowered the tax and $X.X we of were the expenditures more of from benefited refunds. quarter, Act capital operating million by first

for the expenditures projects of operations of million capital XXXX sustainable utilized that $XX ensure forecasted for highest to safe of Our rate those approximately will return. funding and be offer

under $XX.X the equivalents was We million, $XX.X bank existing our and cash quarter $XXX to end credit compliance end the first The XX, covenants at at into base the Our in the the compared March borrowing cash our of facility million million approximately of fourth were was quarter XXXX. quarter. at with undrawn going second XXXX.

the leverage times. Our at senior X.XX secured ratio was at end of the quarter

to protect and closing, are cash cost cash, meet and quarter. take our liquidity further market our requirements. period. continue We are amendment be matures In pleased pay resources additional extension debt base working to XXXX structure we credit asset to amended additional to conditions credit have and Financial prepared in that actions XX, sufficient warrant. operate the and the to our this provides We to flexibility down us second covenant The needs priorities completed through recovery and balance sheet. the to facility as capital facility are reduce conserve January believe our

primary cash and evaluate future completes investment our back deliver to financial efficiency. or operational the opportunities we that will I is the now returns to Although will turn Amerino. review. call positive focus management, cost continue That over on

Amerino Gatti

Susan. you, Thank

rapid output, some much year. review actions, benefit do of second recovery. drop. triggering Team but of were crude levels. According created conditions have refined rates contain disruption demand would faster in directives remained utilization the as supply recovery questions, XX announcement result XXXX your OPEC overview by reduced, could The we to following increase of the than utilization that COVID-XX. the rate prices pandemic to EIA be Before the implemented the typically provide to refinery caused a period to crude occurred the data, in will second the we see months quarter, prepare cut production to reduced and through volumes. for inventory weak a spread Utilization expect of of XX of for further April gradual a current oil half a in for shelter-in-place demand market the declined products to we as rates restructuring anticipated to decline Plus an take I our the Despite

and pandemic the our current delayed have growth market services. products dynamics the for However, demand and

how term the long-term I of Team's and mid will health reiterate no impacts economic scale objectives, near-term, from any Before that and with deep share severe predict certainty can want or I the COVID-XX length disruption to be. one and or

Our near-term prepared to the We levels. opportunities dynamics structure evolving actions activity warranted, the three additional current environment. take respond with market lower aggressively present Team. align remain believe objective was variable reduce business as term for cost We the to to to to our near

pure regulatory and ongoing need First, play refiners they operational while maintenance projects compliance evaluate requirements. remain to

leverage Second lower consolidated for products. results. given their petroleum mitigate integrated and of oversupply both storage to significant there downstream demand and increasing clients businesses on their and transport And is inventory will the the impact levels, of production of third, oil crude prices

have with As shelter-in-place to the we tune-up is recovery in expanded program. U.S. the of according of lead expect us we data and phase to portfolio with activity From gasoline to and cost and diesel OneTEAM callout XX more lifted anticipate allows on-stream the dedicated order both the drive the protocols This of demand to In demands. and XXXX. which services a mid-term products are XX% breadth gradually perspective, OneTEAM cost recovery, to and additional fundamentals production and health and deliver benefits made further other we of than up in and deliver EIA and our to reductions, We next and nested business to OneTEAM estimate depth flex levels permanent their the structural optimize in actions that preserved quarter. certification million year, ensure them scalable our to quickly products model, operating operations, turnarounds. organization. second We the strong $XX initiatives accelerating technicians, million to reduction strong. the Team’s plan provide services savings by and will our remain are operations. continue long-term the later restart and the tune-up order to $XX contact between sprint, followed XX-week for projects in furloughed The will maintained accelerated of with

state ensures to the assets and our competitive part supports and Team network our of I efficiency standards reiterate critical with collaboration industry compliance essential federal, of clients, with and services longevity regulations. and want As four in the advantages. performance, of and close aging and

increases scalable flex market demands, our First, and well-informed execute more allowing agile structure responsive, make to and ability our to with us decisions be efficiently.

Second, the of utilization operations capability allows planning to management function our us the our resources of optimize globally. workforce

blue-chip for solutions support to Technology management clients a our of fourth, minimize and grow account foundation seek also provide our cost-effective recovery. create sales Third, post-pandemic manage digital digital differentiated base client technology allow industry-leading diverse clients solutions. our a our they complex value asset applications their and in exposure as applications to strong challenges. and and maturing integrated And and and personnel and from function innovative our management revenues risk

mentioned, we on focused remain control. As previously in managing what is our

Given cost we and gross quarter, but EBITDA. terms the margin mark the quarter necessary expect in implemented first year late QX lowest of adjusted in will the difficult the actions of

our in restrictions due and XXXX the Also lumpiness revenues anticipate continued experiencing extended second Quest below we is to quarter second XXXX. approximately quarter, to quarantine be XX% periods. to travel-related forward, XX% QX Looking

is cash EBITDA On cost of improvement to year implementation cash adjusted QX our a we be benefit are compared as challenging flow. HX, and lead revenues of reduction as cash Team when the positive gross when XXXX, In actions, positive we this environment to basis, XXXX a the and we free second result quarter full As higher CapEx to well-positioned XXXX, recovery. HX flow. during and through expect confident closing, than and anticipate to well full compared XX% margin free

who all We strategies leadership team shareholders like our for comprehensive near-term, and their our to on mid-term and and our to thank and like and experienced families knowledgeable would have and period. on playbooks. Our to their dedication thank exceptional our are I to services would this executing with and their patience, employees valued support long-term essential to during Team's difficult especially provide commitment technicians for continued clients. the Team frontlines

turn a question-and-answer and over beyond. second their forward direct I Operator, of continued on we Our building you is work, half success the to it hard result for the and of will this to success session. in XXXX look now

Operator

Adam Thank Our [Operator question Instructions] first with from Thalhimer comes Thompson you. Davis.

Adam Thalhimer

versus what June, Amerino, walk kind back in on us the half, could the of how core look things demand? and May through trends kind of have just in you for you April latest might versus

Amerino Gatti

was last demand? that part said the Sorry. What core you

Adam Thalhimer

thinking just I'm demand. about Well, core

Amerino Gatti

Yes, okay.

slowest if quite So, April, We've months into May basically, we due we of out few if seen then coming we core especially some demand impact to in expect a services, of at look April side. to take obviously QX, of bit and be look June, refining a May the do pipeline the and year. the our side on

Adam, refining what that increases, that different I Coming pads On on to by with speeds. the industries. starting as the a July and as into the remarks, to now different expect pickup the good the of half getting at increases. although recovery to nested. be than And market stronger see a in the type end of by petrochemical to We right prepared June project I consumer going half. for into we're year, The we work script, is the visibility the the second different really those projects year, the anybody mean better that probably one they're on variability turnaround first the the in and our And it's by into then, second I'll paint first returning obviously. of the the we said recovery going thing of difficult side, and But, on-stream divisions summer the timing core obviously, year, on the half in one second are demand see is say, the demand turnarounds, on And shelter-in-places callout see the first lot there's side is our and as business of brush. flip turnarounds. still recovering parts some nested again, be the of followed half do

So, in is good Gulf still should the California. open. side area, the the east to We by and to Texas out improvement slow feel Louisiana area. right that we going Rockies we're division starting June seeing Gulf, west troughed see for that see start but now and into some recovery in driven recovery we of they an coming example,

a it because pad business So, becoming nested pad have in our into region recovery region the half. footprint we of by Services see potential by to or segments, good starting going our second work, is on-stream type the back the well, Mechanical business to to Again, the getting able that's going forward. a stool legged we've play very we're got three

that things year. second we of Middle of into see That's things up is had shelter-in-place probably well. ramp-up the laggard All shelters place, see utilization the or evolving the starting to increases. little some Europe terms has to COVID, in but and They've the I'm business bit any put not in of continuing obviously, East, a core half on considered, open do there anything, the strong. are as fairly how remained in Internationally, but factoring current path. we

Adam Thalhimer

would thoughts over. million. QX rest two they're In costs, I'll $XX because little the on And after the on then, And then, for in and what's Perfect. How turn then at your go you D&A year? forward set you corporate Susan, curious quick higher quarterly it of IHT, goodwill the that the for just a ones impairment?

Amerino Gatti

centralizing the program. look at with previous over Corporate the we've to see the of to quarterly on slightly consultants This other D&A D&A -- on with expect a XX% services looking With to I'd from looking permanent to expectation XX% we've Okay. out I our that the mean, and we mentioned overall OneTEAM decline some overall, And additionally, of the are functions. the then fluctuations we a we SG&A. as to respect average Company on be in that adjust we calls, XX% transitioned that from adjustments would XX% had IHT. a would respect at -- IHT, with decline at for XX% drop then still to programs a But, say, had technology on reduction. looking again, we're costs, associated increases corporate to total employees, cost and we it, cost activities and has

going while increase benefits in again, we've that we're had going see of So, the structure decline to overall, the that change. forward

Adam Thalhimer

Okay, thanks. it. I appreciate I'll turn it over.

Operator

Thank you.

Our next Eastman Markets. from KeyBanc comes Capital with Sean question

Your line is now open.

Sean Eastman

Is maybe pricing start behavior? larger shifts of as any Difficulty] perhaps Difficulty] in Hi, taking just and that kind anecdotal come crisis or to [Technical kind a recovery, everyone. we evidence here out there competitive scale see of And in could a requests position? customer of this a through terms Thanks my anything the note to on positions environment in [Technical for the questions. of period, stronger

Amerino Gatti

Sure. start. Sean, I'll

buckets. group with wants of there's and client up just of which ownership, to discussions cetera. lines competitive to would is cost and significant So, that like wanting I group the reduce exposure, it things There's volume, obviously, pressures increase client there's reduce includes safety, a total reduce using technology exposure actions as technologies, well to break their closely their et a reduction; around product demand, that working with us. the around price then, in risk, the client labor And combining reduction the and two basically, amount as into

one them take time. a I'll So, at

would we're with margin of try there's minimize period. them, for one amount costs again, the the one relief six a months But, price The increased. them to have on on way for cost working time. recovery to a just to short or and any working that's through this three we're first improvement, looking up safety one and get say, Obviously, straight with to is that And us price I on just reduction. gross like group the pricing

cases no now in beyond go to we've think got relationships. at I have right the the client we of So, had strong end basically. that, And year,

team. with enterprise strong We and our group account our relationships sales have

successful There that. is for so So, ramp at their and far ready in group, sharing you utilization. resources, to group to to reduction et their cetera, et that at up managers, that's again, in cost been cost cetera. we've overall of we've that and a total assigning bringing increasing And overall increasing the if the we've just at client spend within project been successful be our looking that cost, that's headcount, of multiple group, successful do footprints segments, of will, reduce been

of seen contained to lot at pricing taking well group's So, cost looking group within more we're gross that smaller just overall applications lot controlled are just robotics able you actions like from direct from bit very or minimized to least the competition more our very calculated terms margin months. at perform at to is work in We of years as Services a digital services cost don't a that. that us doing. to Heat over not fragmented standpoint, drop a be the a only. being and then, to our in progressive We've as done And and a lot others to Mechanical margin companies we're different make and of risk. that wanting reductions, Treating, needing What two a managing competition, markets. three quickly and and some want Inspection of to gross and need improve to We we've lose last to sure six the would assisting be say play remote and in I know, margin

so, both think we're from seeing a I And extremes. standpoint, competitive

significant We are number of reviews. a doing

want any to in reach. pricing very thresholds that are or don't VPs below achieve that's Our involved approving we

the of So, a now. we're bag lot of right a mixed Obviously, there's volatility of little in. it's bit environment because a

working we clients them. of that larger technology. also our been and MSA very opportunity for execution for integrated obviously and That's and what accountable we I'll looking using a better they term safety, clients get and held achieve consolidate consider the and longer are lot have very, started partnerships other this would top to our we they XX that's at service and And discussion. The of our where is, good thing say suppliers number

month. by by very it's brush. long quarter of bit little a again, answer to and But been And that's paint a your QX So, question. one with a has everything volatile hard to week

question three those that your buckets would the I answer So, with. are

Sean Eastman

towards the just that wondered normalized we're then, flow cost in recovery environment a scenario OneTEAM the Got kind helpful. back just environment, quarter? operating all to in aggressive the the on incremental it. Any challenging march how initiatives starting taken much post Just through, actions of how XXXX? pretty this more the cost margin you of And get the second how to would around frame could to would margins in accelerating I idea in margin be you light extent being of a was action, frame

Amerino Gatti

Sure.

the right half So, call, the we're on recovery. now thing first I the are second at is, -- providing better have visibility to think not we and going lot a the QX

that did a So, I'm on we've dealing accelerated the Overall, is, little has the once bit limit what pandemic footprint, re-looking team district full last looked been had underperforming internationally and OneTEAM, one, initiatives, we've And this deliver to we we commitments on to and review provide a made. doing centralized lot of at domestically demand to that's reduced the I but quarter-by-quarter division when and with going we that out our both of of to and for pushed the cost our What color. will I my restructuring a reductions. answer our said XXXX. continued leadership years couple And businesses. of we and our at

looking XX-XX XX% I accelerated costs and about to we're it at between And action. right a XX% So, going we mentioned of as call variable. and versus good period now, to permanent, The those some of well, catalyst we let's indirect SG&A expect be Susan was split because forward. that which those a between highlighted it's take it and savings

Sean Eastman

Okay.

Amerino Gatti

or for add the of et take the any supply of impact obviously terms we're reductions, In of not salary costs. reviewing be furloughs, to measures, we're to variable it going A our year that overall stuff, and lot other chain cetera. the through and costs, movement quarter-by-quarter upwards costs going

feel cost And have plan the confidence to one action XX% as I and removal a increasing last approach XX% in I if handle keep and the We're trackers. to the actions, on that. so, on billable way would are and I we followed put said on shown and lower. place, they Adam, rest they've organization it permanent to very the two a the additional good But is ability as is we acted to to variable. that structured stability the down And way have of thing prepared hours that May once the April But a through over plans starting that we up. continue years the But, or see will execute troughs. to Like on be overall, both the And obviously, say, goes well in as they full June. quickly, a were I take our recovery.

Operator

Stefanos Our CJS Crist from Securities. with next [Operator question Instructions] comes

Stefanos Crist

Good $XX time. million that just the thank QX, talking million further for run the a just that and should is to million $X is Since $XX is that savings, for wanted clarify, about in potential about an you from of the the we’re morning, QX, I inclusive or cost rate see additional? we of cuts? a there or cost to is And what

Susan Ball

XX XX anything in of additional cost week or in March, to reductions would essentially. second is but the the of any include last started quarter, the The that it

reduction the on comparative in QX. the just it's So,

looking Going forward, adjustments. where will need continually cost again, and we we make recalibrate are reductions to and

XX% at that could is that overall next range, out few SG&A looking costs. XX% and with reduction But, XX quarters. So, good over think again, adjust to XX for the I a now to

Stefanos Crist

the And credit about you. then, wanted Got Thank just facility. I it. ask to

talked and that to about? other any covenants So, about there million. you reduced should we changes the covenant major know was to changes $XXX capacity Are

Susan Ball

QX effect year, to it leverage With covenants, in did from a that QX Yeah. respect and the end waived we comes XXXX. in is net the ratio through have being of back So.

reductions to is quarter And down. second are also brought the there ratio, waived have Additionally, been the XXXX. secured senior then, ratios leverage coverage net in and debt the that

with fully will which be that QX, requirements XX-Q and will QX, Additionally, then in filed cumulatively within that get see minimum able to to place there QX, respect have been put that are disclosed. tomorrow. And the be you'll

Operator

I'm any closing over for I to Gatti you, this back to questions time, would like not Amerino Thank the remarks. at further call turn showing now

Amerino Gatti

our the remain for in long-term as confident our we team's to Thank of our targets. thank support well achieve pandemic, want again effects as you. and shareholders performance ongoing Notwithstanding ability strategic your potential, We you, the to and patience.

business again continued We will speaking look forward in right quarter. Team. with for this your you move to and joining to call to make the continue disciplined for in We Thank interest next you direction. us the on decisions

Operator

Ladies call. and today's this Thank concludes for gentlemen, you conference participating.

You may now disconnect.

Team (TISI) 18 Jun 202020 Q1 Earnings call transcript