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Team, Inc. Reports Second Quarter 2024 Results

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Team, Inc. (NYSE: TISI) reported its Q2 2024 financial results, showing improved profitability despite lower revenues. Key highlights include:

- Revenue of $228.6 million, down 4.5% year-over-year
- Gross margin improved by 240 basis points to 27.8%
- Net loss reduced to $2.8 million, a $13 million improvement
- Adjusted EBITDA increased 25% to $21.8 million (9.5% of revenue)
- SG&A expenses reduced by $3.9 million or 7%

The company reiterated its 2024 full-year guidance, projecting revenue of $850-900 million and Adjusted EBITDA of $58-68 million. Team, Inc. continues to focus on cost discipline, operational execution, and targeted commercial initiatives to drive growth in core markets and expand into aerospace and midstream sectors.

Team, Inc. (NYSE: TISI) ha riportato i risultati finanziari del Q2 2024, evidenziando una redditività migliorata nonostante il calo dei ricavi. I punti salienti includono:

- Ricavi di 228,6 milioni di dollari, in diminuizione del 4,5% rispetto all’anno precedente
- Margine lordo migliorato di 240 punti base, raggiungendo 27,8%
- Perdita netta ridotta a 2,8 milioni di dollari, un miglioramento di 13 milioni di dollari
- EBITDA rettificato aumentato del 25% a 21,8 milioni di dollari (9,5% dei ricavi)
- Spese SG&A diminuite di 3,9 milioni di dollari, ovvero il 7%

La società ha ribadito la sua guida per l'intero anno 2024, prevedendo ricavi compresi tra 850 e 900 milioni di dollari e un EBITDA rettificato tra 58 e 68 milioni di dollari. Team, Inc. continua a concentrarsi sulla disciplina dei costi, sull'esecuzione operativa e su iniziative commerciali mirate per guidare la crescita nei mercati principali ed espandersi nei settori dell'aviazione e midstream.

Team, Inc. (NYSE: TISI) informó sus resultados financieros del segundo trimestre de 2024, mostrando una rentabilidad mejorada a pesar de la disminución de ingresos. Los aspectos destacados incluyen:

- Ingresos de 228.6 millones de dólares, una caída del 4.5% en comparación con el año anterior
- Margen bruto mejorado en 240 puntos básicos al 27.8%
- Pérdida neta reducida a 2.8 millones de dólares, mejorando en 13 millones de dólares
- EBITDA ajustado incrementado en un 25% a 21.8 millones de dólares (9.5% de los ingresos)
- Gastos SG&A reducidos en 3.9 millones de dólares, o un 7%

La compañía reiteró su orientación para todo el año 2024, proyectando ingresos de 850 a 900 millones de dólares y un EBITDA ajustado de 58 a 68 millones de dólares. Team, Inc. continúa enfocándose en la disciplina de costos, la ejecución operativa y en iniciativas comerciales específicas para impulsar el crecimiento en los mercados clave y expandirse en los sectores de aviación y midstream.

Team, Inc. (NYSE: TISI)는 2024년 2분기 재무 결과를 보고하며 매출 감소에도 불구하고 개선된 수익성을 보였습니다. 주요 내용은 다음과 같습니다:

- 매출 2억 2860만 달러, 전년 대비 4.5% 감소
- 총 마진 240bp 개선되어 27.8%
- 순손실이 280만 달러로 줄어들어 1300만 달러 개선
- 조정 EBITDA가 25% 증가하여 2180만 달러에 도달 (매출의 9.5%)
- SG&A 비용은 390만 달러, 즉 7% 감소했습니다

회사는 2024년 전체 연도 가이던스를 재차 확인하며, 850-900 백만 달러의 매출과 5800-6800만 달러의 조정 EBITDA를 예상하고 있습니다. Team, Inc.는 비용 절감, 운영 실행 및 핵심 시장에서의 성장을 촉진하기 위한 목표 상업적 이니셔티브에 집중합니다.

Team, Inc. (NYSE: TISI) a publié ses résultats financiers du deuxième trimestre 2024, montrant une rentabilité améliorée malgré des revenus en baisse. Les points essentiels comprennent :

- Revenus de 228,6 millions de dollars, en baisse de 4,5% par rapport à l'année précédente
- Marge brute améliorée de 240 points de base à 27,8%
- Perte nette réduite à 2,8 millions de dollars, une amélioration de 13 millions de dollars
- EBITDA ajusté en hausse de 25% à 21,8 millions de dollars (9,5% des revenus)
- Dépenses SG&A réduites de 3,9 millions de dollars, soit 7%

La société a réitéré ses prévisions pour l'année 2024, prévoyant des revenus de 850 à 900 millions de dollars et un EBITDA ajusté de 58 à 68 millions de dollars. Team, Inc. continue de se concentrer sur la discipline des coûts, l'exécution opérationnelle et des initiatives commerciales ciblées pour stimuler la croissance sur les marchés clés et s'étendre dans les secteurs aérospatiaux et intermédiaires.

Team, Inc. (NYSE: TISI) hat seine finanziellen Ergebnisse für das 2. Quartal 2024 veröffentlicht und zeigt eine verbesserte Rentabilität trotz rückläufiger Einnahmen. Die wichtigsten Highlights sind:

- Umsatz von 228,6 Millionen US-Dollar, ein Rückgang von 4,5% im Jahresvergleich
- Bruttomarge um 240 Basispunkte auf 27,8% verbessert
- Nettoumsatzverlust auf 2,8 Millionen US-Dollar reduziert, eine Verbesserung um 13 Millionen US-Dollar
- Bereinigtes EBITDA um 25% auf 21,8 Millionen US-Dollar gestiegen (9,5% des Umsatzes)
- SG&A-Aufwendungen um 3,9 Millionen US-Dollar oder 7% gesenkt

Das Unternehmen hat seine Prognose für das Gesamtjahr 2024 bekräftigt und erwartet einen Umsatz zwischen 850 und 900 Millionen US-Dollar sowie ein bereinigtes EBITDA von 58 bis 68 Millionen US-Dollar. Team, Inc. konzentriert sich weiterhin auf Kostendisziplin, operative Ausführung und gezielte kommerzielle Initiativen, um das Wachstum in den Kernmärkten voranzutreiben und in die Luft- und Zwischenhandelssektoren zu expandieren.

Positive
  • Gross margin improved by 240 basis points to 27.8%
  • Adjusted EBITDA increased 25% to $21.8 million (9.5% of revenue)
  • Net loss reduced by $13 million year-over-year
  • SG&A expenses reduced by $3.9 million or 7%
  • Aerospace revenue increased 46% in Q2 compared to prior year
  • Reiterated 2024 full-year guidance with projected Adjusted EBITDA growth of 48% at midpoint
Negative
  • Revenue decreased by 4.5% to $228.6 million
  • Net loss of $2.8 million reported for Q2 2024
  • Total debt increased to $320.1 million from $311.4 million at fiscal year-end 2023

Insights

Team, Inc.'s Q2 2024 results show mixed performance. While revenues declined 4.5% to $228.6 million, the company demonstrated significant improvements in profitability. Gross margin expanded by 240 basis points to 27.8% and Adjusted EBITDA increased by 25% to $21.8 million. The net loss narrowed substantially from $15.8 million to $2.8 million.

The company's focus on cost reduction and margin expansion is yielding results, with SG&A expenses down 7%. However, the revenue decline in both segments (IHT and MS) raises concerns about market demand. The aerospace initiative shows promise, with a 46% revenue increase in that sector.

Management's reiteration of full-year guidance suggests confidence in continued improvement. Investors should monitor the success of commercial initiatives and the company's ability to maintain cost discipline while driving top-line growth.

Team, Inc.'s Q2 results reflect broader industry trends. The company's focus on higher-margin services and cost reduction aligns with the current market emphasis on operational efficiency. The 46% growth in aerospace revenue highlights the potential in diversifying into less cyclical industries.

The decline in traditional oil and gas-related services (3% in IHT and 6% in MS) suggests ongoing volatility in these sectors. However, the company's ability to improve profitability despite revenue challenges indicates effective management of market headwinds.

The expansion into midstream and aerospace markets is a strategic move to reduce dependence on cyclical industries. Investors should watch for the success of these initiatives in driving future growth and stability. The company's improved margins and cost structure position it well for potential market recovery in core sectors.

Team, Inc.'s Q2 financials reveal a company in transition. The reduction in net loss from $15.8 million to $2.8 million is significant, demonstrating improved operational efficiency. The 25% increase in Adjusted EBITDA to $21.8 million (9.5% of revenue) shows strong cash flow generation potential.

However, the company's debt position remains concerning. Total debt increased to $320.1 million, with net debt at $297.6 million. This high leverage could limit financial flexibility and increase risk if market conditions deteriorate.

The reaffirmed guidance of $58-68 million Adjusted EBITDA for 2024 implies continued improvement. If achieved, this could help address the debt burden. Investors should closely monitor the company's ability to generate free cash flow and reduce leverage while funding growth initiatives.

SUGAR LAND, Texas, Aug. 08, 2024 (GLOBE NEWSWIRE) -- Team, Inc. (NYSE: TISI) (“TEAM” or the “Company”), a global, leading provider of specialty industrial services offering clients access to a full suite of conventional, specialized, and proprietary mechanical, heat-treating, and inspection services, today reported its financial results for the second quarter ended June 30, 2024.

Second Quarter 2024 Highlights:

  • Generated second quarter 2024 revenues of $228.6 million.
  • Improved gross margin by 240 basis points to 27.8%.
  • Reported second quarter 2024 net loss of $2.8 million, a $13.0 million improvement over the 2023 second quarter.
  • Increased consolidated Adjusted EBITDA1 to $21.8 million (9.5% of consolidated revenue), up 25.0% from $17.4 million (7.3% of consolidated revenue) in the 2023 second quarter.
  • Adjusted Selling, General and Administrative Expense1 was 19.8% of consolidated revenue and declined by $2.0 million as compared to the 2023 second quarter.
  • Reiterated 2024 full year guidance.

1 See the accompanying reconciliation of non-GAAP financial measures at the end of this press release.

“Our second quarter results demonstrated continued progress in our ongoing program to lower costs, expand margins and increase cash flow from operations. We expanded gross margin by 240 basis points, driving a nearly $3 million improvement to $63.6 million, and our Adjusted EBITDA margin expanded 230 basis points to 9.5%, leading to a 25% increase in Adjusted EBITDA over the prior year period,” said Keith D. Tucker, Team’s Chief Executive Officer. “These results reflect meaningful progress in our ongoing efforts to improve operating leverage and lower cash overhead costs. Going forward, we expect to build on these improvements while also accelerating our program to improve our job mix and grow our higher margin service lines.”

“While we remain focused on cost discipline and operational execution, during the second quarter, we launched a series of targeted commercial initiatives designed to drive revenue growth within our core markets and accelerate our expansion into attractive end markets such as aerospace and midstream. These initiatives, including the strategic addition of senior operations leaders dedicated to growing these specific end markets, continue to gain traction and we expect to see measurable progress in the second half of 2024. New business and strong demand at our state-of-the-art aerospace facility in Cincinnati drove a 46% revenue increase in the second quarter over the prior year period, and our recent add on investment in that facility will further grow our aerospace capacity by the end of 2024, driving incremental revenue at attractive margins. Additionally, we’ve made progress with our commercial initiative to improve our job mix by refocusing on higher margin revenue streams with more favorable pricing and we expect this and other ongoing initiatives to drive future top line growth,” commented Tucker.

“Looking ahead to the second half of 2024, we see strong activity levels across both of our segments, particularly in turnaround activity and project related work, year over year top line growth and improved margin performance over the first half of 2024 from our international and Canadian operations. We are keenly focused on continuing our positive margin trajectory through both enhanced top line growth and cost discipline and thus reiterate our full year 2024 Adjusted EBITDA guidance of $58 million to $68 million, which represents a 48% improvement at the midpoint over fiscal year 2023,” concluded Tucker.

Financial Results

Second quarter revenues were down $10.9 million to $228.6 million as compared to $239.5 million in the prior year quarter. The decrease was primarily driven by a decline in Mechanical Services (“MS”) revenue of $7.4 million, reflecting lower project work and repair and maintenance activities, and a $3.5 million decline in Inspection and Heat Treating (“IHT”) revenue due to lower call out and turnaround activity. Revenue in our U.S. IHT business was up $2.6 million compared to the prior year period, while our U.S. MS revenue was down $2.7 million, mainly due to project timing. Despite lower revenues, second quarter consolidated gross margin improved by $2.6 million to $63.6 million, or 27.8% of revenue, up 240 basis points from 25.4% in the prior year quarter, driven by higher margin projects, improved pricing, and lower overall costs due to the Company’s ongoing cost reduction initiatives.

Selling, general and administrative expense for the second quarter was $52.4 million, down $3.9 million or 7.0%, from the second quarter of 2023, reflecting the Company’s continued focus on reducing costs. Adjusted Selling, General, and Administrative Expense, which excludes expenses not representative of TEAM’s ongoing operations such as non-recurring professional, legal financing and severance expenses as well as non-cash expenses such as depreciation and amortization and share-based compensation expense, declined by $2.0 million or 4.2% as compared to the prior year quarter, and represented 19.8% of consolidated revenue for the period.

Net loss in the second quarter of 2024 was $2.8 million (a loss of $0.63 per share) compared to a net loss of $15.8 million (a loss of $3.61 per share) in the 2023 second quarter. The Company’s Adjusted EBIT, a non-GAAP measure, improved by $4.2 million to $11.9 million in the 2024 second quarter versus $7.7 million in the prior year quarter. Consolidated Adjusted EBITDA, a non-GAAP measure, expanded 25% to $21.8 million (9.5% of consolidated revenue) in the second quarter of 2024 versus $17.4 million (7.3% of consolidated revenue) in the prior year quarter, with the improvement largely driven by the factors noted above.

Adjusted net loss, consolidated Adjusted EBIT, Adjusted EBITDA and Adjusted Selling, General and Administrative Expense are non-GAAP financial measures that exclude certain items that are not indicative of TEAM’s core operating activities. A reconciliation of these non-GAAP financial measures to the most comparable GAAP financial measures is at the end of this earnings release.

Segment Results

The following table illustrates the composition of the Company’s revenue and operating income (loss) by segment for the quarter ended June 30, 2024 and 2023 (in thousands):

TEAM, INC. AND SUBSIDIARIES
SEGMENT INFORMATION
(unaudited, in thousands)
     
 Three Months Ended 
June 30,
 Favorable (Unfavorable)
 2024
 2023
 $ %
Revenues       
IHT$113,234  $116,740  $(3,506) (3.0)%
MS 115,384   122,752   (7,368) (6.0)%
 $228,618  $239,492  $(10,874) (4.5)%
        
Operating income (loss)       
IHT$12,459  $6,548  $5,911  90.3%
MS 10,637   12,720   (2,083) (16.4)%
Corporate and shared support services (11,937)  (14,672)  2,735  18.6%
 $11,159  $4,596  $6,563  142.8%
              

Revenues. IHT revenues decreased by $3.5 million or 3.0%, in the second quarter of 2024 as compared to the prior year period, primarily due to a $5.4 million decrease in Canada’s nested and turnaround services revenue, a $0.7 million decrease in other international regions, partially offset by a $2.6 million revenue increase in U.S. operations. MS revenues decreased by $7.4 million or 6.0%, in the 2024 second quarter primarily due to a $2.7 million decrease in revenue from U.S. operations attributable to project timing, a $2.1 million decrease in revenue from Canada project work and a $2.5 million revenue decrease in other international regions due to generally lower activity levels.

Operating income (loss). IHT’s second quarter 2024 operating income expanded by $5.9 million or 90.3% to $12.5 million, mainly due to lower costs in all regions and improved U.S. margins. MS operating income was lower compared to prior year quarter by approximately $2.1 million or 16.4%, mainly due to lower operating income attributable to international regions of $1.9 million and a $0.5 million decrease from Canada operations, partially offset by an increase from U.S operations. Corporate and shared support services costs decreased by $2.7 million or 18.6%, mainly due to lower professional fees in the current quarter and lower overall costs due to the Company’s ongoing cost reduction efforts. Consolidated operating income improved by $6.6 million or 142.8% to $11.2 million, driven by the factors discussed above.

TEAM, INC. AND SUBSIDIARIES
SEGMENT INFORMATION
(unaudited, in thousands)
     
 Six Months Ended
June 30,
 Favorable (Unfavorable)
 2024 2023 $ %
Revenues       
IHT$212,682  $218,569  $(5,887) (2.7)%
MS 215,536   223,200   (7,664) (3.4)%
 $428,218  $441,769  $(13,551) (3.1)%
        
Operating income (loss)       
IHT$17,644  $11,271  $6,373  56.5%
MS 14,728   15,913   (1,185) (7.4)%
Corporate and shared support services (27,599)  (30,334)  2,735  9.0%
 $4,773  $(3,150) $7,923  251.5%
 

Revenues. IHT revenues decreased by $5.9 million or 2.7%, primarily driven by decreased call out and turnaround activities in Canada and other international regions, partially offset by a $1.8 million increase in aerospace related revenue. MS revenues decreased by $7.7 million or 3.4%, mainly due to a $6.5 million decrease in Canada operations due to lower project activity and a $1.4 million decrease in U.S. operations.

Operating income (loss). IHT operating income increased by $6.4 million or 56.5%, driven by lower costs and improved margins. MS operating income decreased by $1.2 million as compared to the prior year period primarily due to lower operating income from Canada and other international operations of $2.1 million and $1.3 million, respectively, mainly due to less project work; partially offset by an increase in operating income from U.S. operations of $2.2 million driven by higher activity and improved margins. Corporate operating loss decreased by $2.7 million due to lower costs resulting from the Company’s ongoing cost reduction efforts.

Balance Sheet and Liquidity

At June 30, 2024, the Company had $40.1 million of total liquidity, consisting of consolidated cash and cash equivalents of $17.9 million, (excluding $4.6 million of restricted cash) and $22.2 million of undrawn availability under its various credit facilities.

The Company’s total debt as of June 30, 2024 was $320.1 million as compared to $311.4 million as of fiscal year end 2023. The increase is mainly due to $6.4 million of paid in kind interest during the period and the incurrence of a new equipment finance facility in March 2024. The Company’s net debt (total debt less cash and cash equivalents), a non-GAAP financial measure, was $297.6 million at June 30, 2024.

2024 Outlook

The Company reaffirms the following operating and cash flow guidance for the 2024 fiscal year:

  • Total Company Revenue of $850 million to $900 million
  • Gross Margin of between $235 million and $265 million
  • Adjusted EBITDA of between $58 million and $68 million
  • Capital expenditures of between $9 million to $11 million

Conference Call

As previously announced, the Company will hold a conference call to discuss its second quarter 2024 financial and operating results on Friday, August 9, 2024, at 10:00 a.m. Central Time (11:00 a.m. Eastern Time). Interested parties in the United States may participate toll-free by dialing (877) 270-2148. Interested parties internationally may dial (412) 902-6510. Participants should ask to join “TEAM, Inc. Second Quarter 2024 Conference Call.” The Company will not host questions during the call. This call will also be webcast on TEAM’s website at www.teaminc.com. An audio replay will be available on the Company’s website following the call.

Non-GAAP Financial Measures

The non-GAAP measures in this earnings release are provided to enable investors, analysts and management to evaluate Team’s performance excluding the effects of certain items that management believes impact the comparability of operating results between reporting periods. These measures should be used in addition to, and not in lieu of, results prepared in conformity with generally accepted accounting principles (“GAAP”). A reconciliation of each of the non-GAAP financial measures to the most directly comparable historical GAAP financial measure is contained in the accompanying schedule for each of the fiscal periods indicated.

About Team, Inc.

Headquartered in Sugar Land, Texas, Team, Inc. (NYSE: TISI) is a global, leading provider of specialty industrial services offering clients access to a full suite of conventional, specialized, and proprietary mechanical, heat-treating, and inspection services. We deploy conventional to highly specialized inspection, condition assessment, maintenance, and repair services that result in greater safety, reliability, and operational efficiency for our client’s most critical assets. Through locations in 15 countries, we unite the delivery of technological innovation with over a century of progressive, yet proven integrity and reliability management expertise to fuel a better tomorrow. For more information, please visit www.teaminc.com.

Certain forward-looking information contained herein is being provided in accordance with the provisions of the Private Securities Litigation Reform Act of 1995. We have made reasonable efforts to ensure that the information, assumptions, and beliefs upon which this forward-looking information is based are current, reasonable, and complete. However, such forward-looking statements involve estimates, assumptions, judgments, and uncertainties. They include but are not limited to statements regarding the Company’s financial prospects and the implementation of cost-saving measures. There are known and unknown factors that could cause actual results or outcomes to differ materially from those addressed in the forward-looking information. Although it is not possible to identify all of these factors, they include, among others: the Company’s ability to generate sufficient cash from operations, access its credit facility, or maintain its compliance with covenants under its credit facility and debt agreement, the duration and magnitude of accidents, extreme weather, natural disasters, and pandemics and related global economic effects and inflationary pressures, the Company’s liquidity and ability to obtain additional financing, the Company’s ability to continue as a going concern, the Company’s ability to execute on its cost management actions, the impact of new or changes to existing governmental laws and regulations and their application, including tariffs; the outcome of tax examinations, changes in tax laws, and other tax matters; foreign currency exchange rate and interest rate fluctuations; the Company’s ability to successfully divest assets on terms that are favorable to the Company; our ability to repay, refinance or restructure our debt and the debt of certain of our subsidiaries; anticipated or expected purchases or sales of assets; the Company’s continued listing on the New York Stock Exchange, and such known factors as are detailed in the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, each as filed with the Securities and Exchange Commission, and in other reports filed by the Company with the Securities and Exchange Commission from time to time. Accordingly, there can be no assurance that the forward-looking information contained herein, including statements regarding the Company’s financial prospects and the implementation of cost-saving measures, will occur or that objectives will be achieved. We assume no obligation to publicly update or revise any forward-looking statements made today or any other forward-looking statements made by the Company, whether as a result of new information, future events or otherwise, except as may be required by law.

Contact:
Nelson M. Haight
Executive Vice President, Chief Financial Officer
(281) 388-5521

 
TEAM, INC. AND SUBSIDIARIES
SUMMARY OF CONSOLIDATED OPERATING RESULTS
(unaudited, in thousands, except per share data)
 
 Three Months Ended Six Months Ended
 June 30, June 30,
 2024
 2023
 2024
 2023
        
Revenues$228,618  $239,492  $428,218  $441,769 
Operating expenses 165,064   178,576   315,933   333,851 
Gross margin 63,554   60,916   112,285   107,918 
Selling, general, and administrative expenses 52,395   56,320   107,512   111,068 
Operating income (loss) 11,159   4,596   4,773   (3,150)
Interest expense, net (11,909)  (16,691)  (24,007)  (33,432)
Loss on debt extinguishment    (1,582)     (1,582)
Other (expense) income, net (541)  13   821   648 
Loss before income taxes (1,291)  (13,664)  (18,413)  (37,516)
Provision for income taxes (1,472)  (2,089)  (1,545)  (2,948)
Net loss$(2,763) $(15,753) $(19,958) $(40,464)
        
Loss per common share:       
Basic and Diluted$(0.63) $(3.61) $(4.52) $(9.30)
Weighted-average number of shares outstanding:       
Basic and Diluted 4,416   4,362   4,415   4,353 
                


TEAM, INC. AND SUBSIDIARIES
SUMMARY CONSOLIDATED BALANCE SHEET INFORMATION
(in thousands)
    
 June 30, December 31,
 2024 2023
 (unaudited)  
    
Cash and cash equivalents$22,461 $35,427
    
Other current assets 292,843  286,674
    
Property, plant, and equipment, net 120,147  127,057
    
Other non-current assets 114,196  116,586
    
Total assets$549,647 $565,744
    
Current portion of long-term debt and finance lease obligations$7,087 $5,212
    
Other current liabilities 166,372  169,726
    
Long-term debt and finance lease obligations, net of current maturities 313,020  306,214
    
Other non-current liabilities 39,293  38,996
    
Shareholders’ equity 23,875  45,596
    
Total liabilities and shareholders’ equity$549,647 $565,744
      


TEAM INC. AND SUBSIDIARIES
SUMMARY CONSOLIDATED CASH FLOW INFORMATION
(unaudited, in thousands)
  
 Six Months Ended
 June 30,
 2024
 2023
Cash flows from operating activities:   
Net loss$(19,958) $(40,464)
Depreciation and amortization expense 18,900   19,085 
Loss on debt extinguishment    1,582 
Amortization of debt issuance costs, debt discounts and deferred financing costs 3,625   16,229 
Deferred income taxes (545)  730 
Non-cash compensation cost 1,277   627 
Working Capital and Other (7,765)  (21,406)
Net cash used in operating activities (4,466)  (23,617)
    
Cash flows from investing activities:   
Capital expenditures (5,759)  (5,073)
Proceeds from disposal of assets 139   332 
Net cash used in investing activities (5,620)  (4,741)
    
Cash flows from financing activities:   
Borrowings under ABL Facilities, net 591   15,999 
Repayment of APSC Term Loan    (37,092)
Borrowings (payments) under ME/RE Loans (1,421)  27,398 
Payments under Corre Incremental Term Loans (713)   
Payments for debt issuance costs (2,800)  (5,327)
Other 1,843   (495)
Net cash provided by (used in) financing activities (2,500)  483 
    
Effect of exchange rate changes (380)  237 
Net change in cash and cash equivalents$(12,966) $(27,638)
    


TEAM, INC. AND SUBSIDIARIES
SEGMENT INFORMATION
(unaudited, in thousands)
 
 Three Months Ended
June 30,
 Six Months Ended
June 30,
 2024
 2023
 2024
 2023
Revenues       
IHT$113,234  $116,740  $212,682  $218,569 
MS 115,384   122,752   215,536   223,200 
 $228,618  $239,492  $428,218  $441,769 
        
Operating income (loss)       
IHT$12,459  $6,548  $17,644  $11,271 
MS 10,637   12,720   14,728   15,913 
Corporate and shared support services (11,937)  (14,672)  (27,599)  (30,334)
 $11,159  $4,596  $4,773  $(3,150)
        
Segment Adjusted EBIT1       
IHT$12,611  $7,541  $17,931  $12,304 
MS 10,785   12,819   15,283   16,288 
Corporate and shared support services (11,455)  (12,699)  (25,071)  (26,652)
 $11,941  $7,661  $8,143  $1,940 
        
Segment Adjusted EBITDA1       
IHT$15,589  $10,729  $23,938  $18,546 
MS 15,350   17,523   24,497   25,745 
Corporate and shared support services (9,126)  (10,807)  (20,115)  (22,639)
 $21,813  $17,445  $28,320  $21,652 
                

___________________

1 See the accompanying reconciliation of non-GAAP financial measures at the end of this earnings release.

TEAM, INC. AND SUBSIDIARIES
Non-GAAP Financial Measures
(Unaudited)

The Company uses supplemental non-GAAP financial measures which are derived from the consolidated financial information, including adjusted net income (loss); adjusted net income (loss) per share; earnings before interest and taxes (“EBIT”); Adjusted EBIT; adjusted earnings before interest, taxes, depreciation, and amortization (“Adjusted EBITDA”), free cash flow and net debt to supplement financial information presented on a GAAP basis.

The Company defines adjusted net income (loss) and adjusted net income (loss) per share to exclude the following items: non-routine legal costs and settlements, non-routine professional fees, (gain) loss on debt extinguishment, certain severance charges, non-routine write off of assets and certain other items that we believe are not indicative of core operating activities. Consolidated Adjusted EBIT, as defined by the Company, excludes the costs excluded from adjusted net income (loss) as well as income tax expense (benefit), interest charges, foreign currency (gain) loss, pension credit, and items of other (income) expense. Consolidated Adjusted EBITDA further excludes depreciation, amortization and non-cash share-based compensation costs from consolidated Adjusted EBIT. Segment Adjusted EBIT is equal to segment operating income (loss) excluding costs associated with non-routine legal costs and settlements, non-routine professional fees, certain severance charges, and certain other items as determined by management. Segment Adjusted EBITDA further excludes depreciation, amortization, and non-cash share-based compensation costs from segment Adjusted EBIT. Adjusted Selling, General and Administrative Expense is defined to exclude non-routine legal costs and settlements, non-routine professional fees, certain severance charges, certain other items that we believe are not indicative of core operating activities and non-cash expenses such as depreciation and amortization and non-cash compensation. Free Cash Flow is defined as net cash provided by (used in) operating activities minus capital expenditures. Net debt is defined as the sum of the current and long-term portions of debt, including finance lease obligations, less cash and cash equivalents.

Management believes these non-GAAP financial measures are useful to both management and investors in their analysis of our financial position and results of operations. In particular, adjusted net income (loss), adjusted net income (loss) per share, consolidated Adjusted EBIT, and consolidated Adjusted EBITDA are meaningful measures of performance which are commonly used by industry analysts, investors, lenders, and rating agencies to analyze operating performance in our industry, perform analytical comparisons, benchmark performance between periods, and measure our performance against externally communicated targets. Segment Adjusted EBIT and segment Adjusted EBITDA are also used as a basis for the Chief Operating Decision Maker (Chief Executive Officer) to evaluate the performance of the Company’s reportable segments. Free cash flow is used by the management and investors to analyze the Company’s ability to service and repay debt and return value directly to its stakeholders.

Non-GAAP measures have important limitations as analytical tools, because they exclude some, but not all, items that affect net earnings and operating income. These measures should not be considered substitutes for their most directly comparable U.S. GAAP financial measures and should be read only in conjunction with financial information presented on a GAAP basis. Further, the Company’s non-GAAP financial measures may not be comparable to similarly titled measures of other companies who may calculate non-GAAP financial measures differently, limiting the usefulness of those measures for comparative purposes. The liquidity measure of free cash flow does not represent a precise calculation of residual cash flow available for discretionary expenditures. Reconciliations of each non-GAAP financial measure to its most directly comparable GAAP financial measure are presented below.

TEAM, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(unaudited, in thousands except per share data)
        
 Three Months Ended June 30, Six Months Ended June 30,
 2024
 2023
 2024
 2023
Adjusted Net Loss:       
Net loss$(2,763) $(15,753) $(19,958) $(40,464)
Professional fees and other1 516   2,647   2,597   4,368 
Legal costs 41   200   123   200 
Severance charges, net2 225   217   650   522 
Loss on debt extinguishment    1,582      1,582 
Tax impact of adjustments and other net tax items3 (26)  (7)  (138)  (85)
Adjusted Net Loss$(2,007) $(11,114) $(16,726) $(33,877)
        
Adjusted Net Loss per common share:       
Basic and Diluted$(0.45) $(2.55) $(3.79) $(7.78)
        
Consolidated Adjusted EBIT and Adjusted EBITDA:       
Net loss$(2,763) $(15,753) $(19,958) $(40,464)
Provision for income taxes 1,472   2,089   1,545   2,948 
Loss (gain) on equipment sale 28   7   18   (296)
Interest expense, net 11,909   16,691   24,007   33,432 
Professional fees and other1 516   2,647   2,597   4,368 
Legal costs 41   200   123   200 
Severance charges, net2 225   217   650   522 
Foreign currency loss (gain) 615   143   (624)  (34)
Pension credit4 (102)  (162)  (215)  (318)
Loss on debt extinguishment    1,582      1,582 
Consolidated Adjusted EBIT 11,941   7,661   8,143   1,940 
Depreciation and amortization       
Amount included in operating expenses 3,508   3,694   7,091   7,413 
Amount included in SG&A expenses 5,752   5,845   11,809   11,672 
Total depreciation and amortization 9,260   9,539   18,900   19,085 
Non-cash share-based compensation costs 612   245   1,277   627 
Consolidated Adjusted EBITDA$21,813  $17,445  $28,320  $21,652 
        
Free Cash Flow:       
Cash used in operating activities$(6,352) $(5,854) $(4,466) $(23,617)
Capital expenditures (2,743)  (2,381)  (5,759)  (5,073)
Free Cash Flow$(9,095) $(8,235) $(10,225) $(28,690)
                

___________________

1 For the three and six months ended June 30, 2024, includes $0.5 million and $2.4 million, respectively, related to debt financing, and for the six months ended June 30, 2024, includes $0.2 million related to support costs. For the three and six months ended June 30, 2023, includes $1.6 million and $3.2 million, respectively, related to debt financing and $0.7 million and $0.8 million, respectively, related to lease extinguishment charges, and for the three and six months ended June 30, 2023, includes $0.3 million of support costs.

2 Represents customary severance costs associated with staff reductions.

3 Represents the tax effect of the adjustments.

4 Represents pension credits for the U.K. pension plan based on the difference between the expected return on plan assets and the cost of the discounted pension liability. The pension plan was frozen in 1994 and no new participants have been added since that date.

 
TEAM, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (Continued)
(unaudited, in thousands)
    
 Three Months Ended June 30, Six Months Ended June 30,
 2024
 2023
 2024
 2023
        
Segment Adjusted EBIT and Adjusted EBITDA:       
        
IHT       
Operating income$12,459  $6,548  $17,644  $11,271 
Severance charges, net1 152   165   247   205 
Professional fees and other2    828   40   828 
Adjusted EBIT 12,611   7,541   17,931   12,304 
Depreciation and amortization 2,978   3,188   6,007   6,242 
Adjusted EBITDA$15,589  $10,729  $23,938  $18,546 
        
MS       
Operating income$10,637  $12,720  $14,728  $15,913 
Severance charges, net1 49   52   374   308 
Professional fees and other2 58   47   140   67 
Legal costs 41      41    
Adjusted EBIT 10,785   12,819   15,283   16,288 
Depreciation and amortization 4,565   4,704   9,214   9,457 
Adjusted EBITDA$15,350  $17,523  $24,497  $25,745 
        
Corporate and shared support services       
Net loss$(25,859) $(35,021) $(52,330) $(67,648)
Provision for income taxes 1,472   2,089   1,545   2,948 
Loss (gain) on equipment sale 28   7   18   (296)
Interest expense, net 11,909   16,691   24,007   33,432 
Foreign currency loss (gain) 615   143   (624)  (34)
Pension credit3 (102)  (162)  (215)  (318)
Professional fees and other2 458   1,772   2,417   3,473 
Legal costs    200   82   200 
Severance charges, net1 24      29   9 
Loss on debt extinguishment    1,582      1,582 
Adjusted EBIT (11,455)  (12,699)  (25,071)  (26,652)
Depreciation and amortization 1,717   1,647   3,679   3,386 
Non-cash share-based compensation costs 612   245   1,277   627 
Adjusted EBITDA$(9,126) $(10,807) $(20,115) $(22,639)

___________________

1 Represents customary severance costs associated with staff reductions.

2 For the three and six months ended June 30, 2024, includes $0.5 million and $2.4 million, respectively, related to debt financing, and for the six months ended June 30, 2024, includes $0.2 million related to support costs. For the three and six months ended June 30, 2023, includes $1.6 million and $3.2 million, respectively, related to debt financing and $0.7 million and $0.8 million, respectively, related to lease extinguishment charges, and for the three and six months ended June 30, 2023, includes $0.3 million of support costs.

3 Represents pension credits for the U.K. pension plan based on the difference between the expected return on plan assets and the cost of the discounted pension liability. The pension plan was frozen in 1994 and no new participants have been added since that date.

 
TEAM, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (Continued)
(unaudited, in thousands except percentage)
        
 Three Months Ended
June 30,
 Six Months Ended
June 30,
 2024 2023 2024 2023
        
Selling, general, and administrative expenses$52,395  $56,320  $107,512  $111,068 
Less:       
Depreciation and Amortization in SG&A expenses 5,752   5,845   11,809   11,672 
Non-cash share-based compensation costs 612   245   1,277   627 
Professional fees and other1 516   2,647   2,597   4,368 
Legal costs 41   200   123   200 
Severance charges included in SG&A expenses 194   126   620   346 
Total non-cash/non-recurring items 7,115   9,063   16,426   17,213 
Adjusted Selling, General and Administrative Expense$45,280  $47,257  $91,086  $93,855 
As percentage of revenue 19.8%  19.7%  21.3%  21.2%
                

___________________

1 For the three and six months ended June 30, 2024, includes $0.5 million and $2.4 million, respectively, related to debt financing, and for the six months ended June 30, 2024, includes $0.2 million related to support costs. For the three and six months ended June 30, 2023, includes $1.6 million and $3.2 million, respectively, related to debt financing and $0.7 million and $0.8 million, respectively, related to lease extinguishment charges, and for the three and six months ended June 30, 2023, includes $0.3 million of support costs.


FAQ

What was Team Inc's (TISI) revenue for Q2 2024?

Team Inc's revenue for Q2 2024 was $228.6 million, down 4.5% compared to the same period last year.

How much did Team Inc (TISI) improve its Adjusted EBITDA in Q2 2024?

Team Inc improved its Adjusted EBITDA by 25% to $21.8 million in Q2 2024, representing 9.5% of consolidated revenue.

What is Team Inc's (TISI) full-year 2024 revenue guidance?

Team Inc reiterated its full-year 2024 revenue guidance of $850 million to $900 million.

How much did Team Inc (TISI) reduce its net loss in Q2 2024 compared to Q2 2023?

Team Inc reduced its net loss by $13 million in Q2 2024, reporting a loss of $2.8 million compared to a $15.8 million loss in Q2 2023.

Team, Inc.

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