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Kevin Smith | executive |
Amerino Gatti | executive |
Susan Ball | executive |
Greetings, and welcome to the Team, Inc.
Third Quarter 2021 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mr. Kevin Smith, Vice President of Corporate Development and Investor Relations. sir. you, Thank
begin. You may
our of Laura. our be Earnings Welcome today, may recorded are XX, call Third you, under Relations teaminc.com. going being Officer; by accurate to Gatti, This Investor Susan be on reading. call only as be replay that company's the is at any through everyone information the Call. this please to With There the teaminc.com. XXXX also Therefore, Information time-sensitive as and Executive Conference Chief of a call will and Chairman advised Quarter Financial available transcript me of Officer, no November our via be listening Ball. date speaks website, XXXX. website can Thank be or today's webcast webcast and Team's of replay Chief accessed on Amerino will it of link section call, today's any audio the longer and
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Private a of and financial call reminder, statements the forward-looking pursuant Litigation the events As performance. safe of of provisions Reform contains to Act expectations, statements XXXX, harbor future including made future this Securities or
and except be furnished revise publicly the no reports Form any statements. cause forward-looking The obligation inherent in the results any or to XX-K and detail uncertainties, statements to or required that from Securities uncertainties company's factors forward-looking company and could the with contained are Commission. and in other of on risks statements, risks and law. may in factors actual Annual in Forward-looking documents assumes a differ involve we and caution number company's described investors by those as other Report materially and update These Exchange filed
turn will Therefore, ongoing recent we can capital be are transactions, our in discussions. Amerino. what call. I about to take would during call your the financing questions unable like say over we today's we the to Given to markets limited now
Kevin, liquidity provide priorities. you, financial Team of our a that will The outlook. Earlier led will week, I will entered will facility everyone. outline Management. key results third give the us into million the X new draw and Partners then to with by overview I company's of announcement, review then value. financing quarter and we on the Team detail position. After a Thank be capital morning, $XX our quarter proceeds our and delayed subordinated to Susan recent focus market the required provide increasing trends and term position Corre and the good our short-term allow used announced enhance high-level this start which, an business loan growing to and
Capital Park of covenants part Strategic loan financial this the As has waive Atlantic term until existing Fund, under term XX, XXXX. our loan September to lender, transaction, agreed our
overall view Although do balance as an process. this to step structure, we to important our transaction capital more to improve sheet our and we that work have
results. quarterly the to turning Now
our of experienced revenues shut call work. routine to Ida million, our facilities of short XX significantly least conditions from or outages third that fall flat The our reduced consolidated Team $XXX.X Hurricane rates petrochemical completely. run were Coast forced causing nested market down power year the at refineries and Gulf activity numerous plants shutdown performance to reduce quarter line and temporary out ago. Third quarter, essentially caused expectations. top the difficult a during
early in lower August continued pushed we late projects addition, experienced delayed to and September. turnaround start a to in activity which global season, In and fall see our get levels resulted
remains quarter. Gaining a competitive was challenge. down the gross margin XX.X%, margin that from prior margins. Gross traction We XX.X% pricing in pressures also impacted year experienced on regional negatively upward
associated place Team During in and in absorbing the of elimination travel, that were late supply higher March inflationary faced well cost as equipment, put XXXX. expenses actions the labor, raw the as in the logistics pressures underlying including quarter, from chain, materials, of our temporary
incurred our investment prepare certifications fall active as up in an costs, season XXXX. to we also technician We ramped and higher-than-normal and turnaround the training for
unexpected initiatives. the decline, mix for down absorbing Lastly, the quarter with shift the a reinstatement we $X inflationary coupled million, experienced was cost to pressures temporary services that the compared in ago. Adjusted the from higher-margin million, reflects fewer due during quarter EBITDA to when approximately third sequential revenue the revenue and of pandemic-related performed $XX.X year
same revenues in Mechanical revenue were that our Services, the intervention segment a line This XXXX, construction higher-margin inflationary and double season, seal mix Beginning spend due and to to eliminates competitive midstream due delayed fall reduction pressures, year. change proprietary and when over down fewer in with SmartStop turnaround to Technology. X.X% view. service services recently quarter a compared are Turning in in with pricing the mechanisms need bleed failure tools. systems our We last competitive block for complicated or commercialized activation hydraulics the to
separate jobs we quarter, in completed U.S. SmartStop third X Smartjob the -- the During
repairs an used downstream As NGL pipeline made. X enable on example, our repairs. a to for isolate solution We days, pipeline the quickly was SmartStop the were XX-inch to while deployed Technology
miles to to and operation. when conventional pipeline SmartStop save drain complete Our need a repairs compared of stop to line Technology expense time the and averted the XX
the Heat the and segment to and revenue of nature Inspection run profile remains less Treating business. due maintain Our volatile,
was impacted delays. Although year-over-year, IHT's X% project up was also several it by revenue
Canada, in was delayed turnaround example, large project sands until tar one As October. a
activity XX% a received is U.S. of trials demonstrates indicator As approval several our the clients' We ramped levels. last year, of in inspection for plant regulatory for leading award recently both nested focus confidence nested capabilities. and have view now as successful we on technician over economic Navy's requirements. After the our activity operations and facility technical pre-COVID level This up, compliance approximately the inspection missile work Navy. our
margins. Quest Team Defense growth a XXXX. comparable Integrity's quarter declined for the or late in XXXX. revenue XXXX from early by new X.X% above-average activity to is area expect We deliver should begin in that
than total, Quest Our XXXX conservative a had created their has XXXX. Quest visible has has highly to next the managers with of into backlog from sales technical we and new in This In to technology large and clients' continue and invest decisions delayed for spend remain $XX in and project deferred more geographic projects demand, and during maintenance meet Quest we million or expanding offline. forecasted is recovery this entering recruiting regions. development, To year. existing markets are proactively aggressively globally. limited
all completed expand is project This work issue reduces for its realize During challenges Asia. we of XX% many large operations efficiency buildup fired first despite and MS major the world. clients. segments. country the completed of efficiently the geographic a continued mechanical offering in Coast. increases heater The failure. signed IHT scope. From executing in first client Quest recently project likelihood a America, increase work expanded company refinery ability to growth where oil engineered in at as optimization carbon and Gulf for our project limited our Guyana travel in we large across with integrated the both a its integrated assures of first U.S., the a of the overheating we downtime in in-line we It its service presence. solution quarter, an year-over-year, work along to phases Quest approach pipeline Canada and and integrated provided to challenging assurance heaters our a parts in assessment sites, performance COVID-related that continue are to MSA in perspective, on in year-over-year have the a realized inspection of We In a Latin we revenue life
In levels technology momentum. Closer in quarter, project in activity a COVID-related and slowly work. In of reductions lingering proprietary international deferral. as due complete training to limited our to was are are and completed scopes, home, continues a tar Brazil gain COVID-related SmartStop addition, the We Canada, new activity year-over-year, revenue this rope to access revenue contract repair in hiring removal In the California. growth we lockdowns. flat Netherlands inspection Europe, for and large muted the responding as we our sands leak technicians project Chevron's assets first was upstream to multi-year the from our recently job announced relatively sealing
is and project start-up Integrity engineering October, solutions. the we our nested & collaborating group services to actively Since with in Chevron Our assessment technology-enabled provide increased have technician closely inspection Digital Asset footprint.
Our the conditions. management adverse business vast through managing team has experience
focused a execution company. the stability plan have to and We consistency throughout ensure
our Our in playbook consists and of cash management, people. expanding margins investing
centralized First, centers, billing consists rigorous capital workflow, we that global our are tools allocation. CapEx disciplined management our process, are digital strategies, cash efficient by invoicing focused on automating and expediting management leveraging and of a collections which executing working
debt. flow steadfast our in goal committed generate pay are remain free to down We and cash to
recovery current economic discounts environment. pricing margins drive and efficiencies. inflationary adjusting and a will demand and focused to improvement segments our in are of we optimize across and we response our are on cost discontinued Second, last In and the margins. to environment recovery discipline and rising contracts help pressures, inflationary the quarter, reflect the we pricing Strict COVID-related rising
reduce measures Combined, are cost supply operating and overhead, corporate reduction to expenses, to these cost continue costs taking our further structure. rationalization. expected We chain actions facility optimize
technology on like growth focused meets assist also OneInsight exceeds Team will while margin Additional revenue and services digital XXXX. We deploying thresholds. platform. to Higher-margin for that are targeted remote services, deliver high-margin monitoring or profitable savings internal remain also our
people. to most and proud invest Finally, our importantly, we in are
competitive programs advantage workforce Our we permanent Team. accredited variable and by industry-leading recruitment and for group, has Throughout management actively benefits. tremendous and the contact certifications supported provides technicians group maintaining Team's a and maintained training with our pandemic, active have
season. efforts increased Our ramp-up demand technicians for pandemic turnaround the during the assisted as
tight approximately utilization technician Given the XX% market, season. the reached fall labor high during a Team's effective of rate turnaround
fairs robust referral increased in variable have Year-to-date, technicians group. training XXX with our across programs, apprentice vocational country, military and trade expanded schools, implemented our program. recruiting we we several hired and job our employee labor an recruiting active and approximately program, of part enhanced participated and engagement the efforts, our As
conjunction beyond. growth experience with provide Our in confidence environments, market in deliver and increased to XXXX ability in fundamentals, our operating activity and in difficult improving
to for her for last I over her to turn partnership the call leadership the I over like Before years. final time, Susan X the thank and would
As was critical through helping our our capital new an OneTEAM Susan Susan structure and of excellent you has addition these our the turn as Team it liquidity. additional wish discussions has achievements build been to over She the in program CFO. has to financial for know, and now your a Team key part the review. COVID as of provide implementation the navigate of and us step and Susan? immensely a successfully of our implemented financial I foundation team. strong down detailed to future elected in instrumental the been impact with to executive a player during helped Susan, Team. a more a best Susan all have you of work family will Each to future. I we for been
and Amerino, you, will performance I then, Thank quarter and more our provide review quarter-over-quarter around good first our transactions. morning, detail recent financing information comparisons third everyone. and and financial
As of XXXX. or quarter million decrease Amerino mentioned, revenue was of quarter $XXX.X third our from a down X.X% $X.X third million the consolidated
impacts This quarter's quarter XXXX decreased with and market revenue XXXX QX to projects into reflects from of delayed dynamics. the challenging
impacts We our start Ida, to season a fall facilities call Hurricane due to routine had impacting late also the quarter. negative work with off-line during turnaround and out suffered
prior XX.X% revenue a revenues For million. the gross while decline XXXX respectively. Consolidated by million third declined $X.X quarter quarter Mechanical the was Quest and X.X%, the IHT a for over increase, grew and QX over X% by quarter, of X.X% $XX.X margin $XX.X XXXX Services year million, or
we passed We clients. on not impacted continue to negatively that inflationary have be our costs by to fully
absorbed third of consolidated were by the The services had margin of actions quarterly lower performed higher-margin season, also training On quarter without compared XX.X%. were in basis, to blend to to performed we the a We gross margin pandemic-related the fully Quest XX.X% turnaround quarter also percentage in and the up leading reinstated of costs and year Services. declined impact our cost temporary prior the effect XXXX. Mechanical that and work ramp-up the comparative
the prior third of $XX.X The loss $X.X quarter. net million of to year loss in compares net million a quarter
adjusted net was quarter the share the Adjusted XXXX was measure, the $X.XX in comparable Services share the Mechanical or $XX.X $X by million costs. Consolidated severance and margin, of negative $X.X impairment $X.X approximately fees quarter loss, and third million an per XXXX. $X.X as quarter million of million loss a or quarter's for non-GAAP versus million was million in net $X.XX in of million $XX.X adjusted driven goodwill the loss million. quarter gross legal of per adjusted SG&A costs, a for same prior $X.X charge This charge, million a year loss a non-cash adjusted of third impairment approximately compared compared professional EBITDA increase loss the net non-cash $XX.X Adjustments and the $XX.X to for decrease net segment, in quarter net quarter. goodwill to the the in included
the and administrative third the from quarter XXXX increase the costs million on legal bad of costs associated other with $X general increase actions. optimizing structure. with prior $X.X selling, to quarter. expenses We Our focus million, the of managing The up million, of a was primarily with year was attributable for being prior million, cost remainder remain our and in $XX.X diligent $X expense an of debt increased the year corporate temporary reinstatement SG&A in cost
same the X% performance. last segment hours associated degree, and the increases million IHT third to turnaround lesser activities. in to $XXX.X quarter The with a increased in year. reported nested technicians and, reflects growth from turning up as Now revenue period posted of million, mentioned, previously $XX.X sites our
the Third Services in labor over pressures been as XX.X% to increased million of $XXX.X of is down quarter this margin incurred in quarter. primarily prior our from EBITDA the X% to the was revenue year. $X.X decreased $X.X third year overall million, same work the last of mix cost period prior margin of $XX.X XXXX, and to the EBITDA for and quarter the million we from related This XX.X% prior quarter Adjusted compared The Adjusted compared in quarter. in quarter million season. Mechanical as quarter. with in Integrity's up $X.X lower-margin impacted as million adjusted cost these year million, margin. Quest XXXX of was impacted X.X% was this XXXX down revenue of third year Most quarter. inflationary canceled. to projects delayed the were ramped and X.X% down costs and $XX.X negatively training third of levels prior to projects. pressures delayed activity XXXX. EBITDA to X.X% this other have significantly $XX.X Quest from million down EBITDA reduction not quarter quarter quarter's Adjusted year turnaround the the cost reported decreased
third million, million was EBITDA year $XX.X EBITDA cost quarter XX.X% fixed is year. prior of more with in adjusted quarter margin was XX.X% to last our for ABL as from ended million quarter cash. down Adjusted base quarter Borrowings Third $X.X compared Quest the million. $XX of $X.X were the the nature. We under facility
Free undrawn had a which million, $XX.X of of $X.X Cash flow for credit million. letters from was expenditures. facility we million operations against quarter the included flow Additionally, the in was cash negative capital $X.X $X.X negative million.
our capital million. to expect spend We approximate full $XX year XXXX
into unsecured we our intend mentioned, entered million million, the In term entered for provide until facilities. additional which, XXXX other other amendment requirement credit September agreement, time ratio XX, Team remain that its maximum million does $XXX at we with subordinated we closing million XXXX. the $XX.X of Amerino agreement providing recently an draw term required its borrowed of on $XX.X among into and our Partners loan us waves a leverage conjunction an Corre we with loan, Upon things, and compliance under and facility. credit flexibility. As increases requirements an $XX subordinated to credit covenant X has with additional in covenant to borrow with December Management, signing, thereafter delayed modifications term to leverage with loan
I I to work employees seeing to to back and accounting have all commitment I some the skilled will my look have time work occur most finance experience with been fortunate call organization. the incredible I Before been very really my Team and of improvements leadership the will over growth to Team, Team, appreciated working able alongside to global an to and its the I executive conclude, upcoming feel over to employees team, clients and the organization have global enough turn at the I resignation with. dedicated and enjoyed want fellow and passion address throughout with the proud Amerino, and that months. I now forward that the announcement. and Board, Amerino. employees
Thank you, Susan.
on give the and can our real-time will view remote a cost technology producer our OneInsight conventional quarter, to and digital other Basin. Permian information monitoring platform, Through can our visits. thickness Team digital I Using OneInsight with update The clients call, need the large site we storage clients basis. third sensors an added several of new the remote installed a We Starting technology conclude our operational and provide provides our for significant safe a business sensors initiatives daily the during our and for monitoring a and and versus remotely platform. monitoring alternative reduction real-time clients with the I weekly outlook. and and a on a well Before the remote eliminating initiatives, portal, basis, methods. facilities monitor piping on monitoring temperature recently wall solution in or in
business our to outlook. and moving Now operational
We seeing markets in levels. more gradually return improvements normalized as end our our to environment macroeconomic are
demand demand. petroleum even levels in XXXX some and nearing reached global exceeding Specifically, cases,
As an environment for strong a by seasonal the on products a Team's example, recently factors, U.S. next several and been operational reached positively X-year years. our influenced services gasoline anticipate high. over has these outlook the demand we following trends. Based
delayed maintenance capital and First, projects.
unscheduled equipment sustainable capture of creating to margins. not capital and and get seen work delayed recently, and years, trend we in to a now This significant have X strong order repair cash growing as a projects is to and work shutdowns projects failures. of have a number last is postponed backlog pushed the operating Over conserve the delayed or that more maintenance operators is due
in projects North Third-party in forecasting in increase in are industry America capital sources a XXXX. turnaround large XX%
includes early is off year to project one expect these be kick in to next award XXXX. large an scheduled trends, at for least we This active year projects. Given that
to work uptick shutdowns, unscheduled equipment's cycle. operators experienced have to or life as see maintenance equipment repair and past work have due started Additionally, in an as the we pushed failure emergency plants delayed
trend expect We this will XXXX. continue into
lines. requirements Second, safety pipelines. Safety safety information to the of services. inspect gathering covered will regulatory Materials emissions-related Many Administration in in-line expand difficult requirements. all for create that their gas operators Hazardous have to adds federal Integrity's will approximately this increased gas is solutions. pipelines to miles be XXX,XXX that pipeline will In Transportation's by report for pipeline will demand inspection compliance The reporting for standards federal and Department increase pipelines onshore Quest This require Pipeline of and gathering of U.S. these be expected to dynamics total,
expected, As to significantly require announced emissions and gas regulations operators repair the administration greenhouse current and recently find oil to reduce and aggressively gas emissions leaks. from operations
in While producers Team being integrity. Shifting greater place is as for importance already still we seeing are October. fourth outlook, the maintaining compliance on regulation a activity experienced services demand recovery we and wellhead quarter strong emissions' formalized, our to increased a
with our line environments. strong uncertainty expect the we the magnitude demonstrated track However, both and team management to slowdowns, be of closing, around QX the and has with activity holiday third of challenging the record a revenues operating quarter. In timing the successful in
and from quarters. pandemic-driven petroleum plan is multi-year global improved recovery on throughout last as beyond. cash The depressed focused our end benefit the and completed bounced and highs year ensure Across and to in and people Therefore, over back execution expect record all-time maintenance scheduled oil from consistency nearing Our financial economy markets, activity projects management, levels margins high a robust are has prices. with stability X demand investing next clients' the delayed expanding positions our to multiple we company. have
their once and employees my Team's express for Finally, dedicated gratitude I want again to perseverance. commitment to
you substantial the in provide excellence quarter. joining and product existing services into continuous with leverage we making you it we the We and important are around service new of to us services on continued committed for our for forward part future. interest is see improvements of priorities, As network, Team. your opportunities speaking strategic to and call and to the understand Through our and both again service next execution and reliable innovative clients the for now to world. Thank how towards and the our clients to essential look diversified critical portfolio
for teleconference. Ladies This you and conclude gentlemen, thank today's participation. your does
disconnect day. may wonderful a and at of You your your lines rest have this time
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