Team (TISI) 9 Aug 24 2024 Q2 Earnings call transcript

In the recent earnings call for Team, Inc., CEO Keith Tucker and CFO Nelson Haight provided a comprehensive update on the company's operational and financial performance for the second quarter of 2024. The call, which detailed the company's strategic initiatives and financial results, highlighted the company's progress in addressing internal and external challenges and positioning itself for future growth.

Financial Highlights

One of the key takeaways from the call was the company's improved financial performance. Gross margin dollars grew by nearly $3 million, reaching $63.6 million, with a gross margin improvement of 240 basis points over the prior year period. This, coupled with a decrease in adjusted selling, general and administrative expenses, led to a significant increase in adjusted EBITDA, up 25% from the 2023 period to $21.8 million. The company's efforts to lower costs have contributed to margin expansion and cash flow growth, setting the stage for enhanced shareholder value.

Strategic Initiatives

The call also highlighted several strategic initiatives aimed at driving revenue growth and expanding into higher-margin end markets, such as aerospace and midstream. The company has seen strong demand in these sectors, with revenue up 46% in the aerospace segment. To capitalize on this momentum, Team has approved an incremental investment to expand its aerospace capacity. These commercial initiatives, coupled with a focus on commercial discipline and high-grading the project portfolio, are expected to provide top-line growth in the second half of 2024.

Looking Ahead

Looking forward, Team expects a strong second half of 2024, with continued improvement in margin performance and financial performance from international and Canadian operations. The company's full-year 2024 adjusted EBITDA guidance is between $58 million and $68 million, representing a 48% improvement at the midpoint over 2023. With a clear path toward achieving a 10% or more adjusted EBITDA margin in the near future, Team is well-positioned to sustainably and profitably grow its business.

Conclusion

Overall, the Team, Inc. earnings call provided a comprehensive overview of the company's strategic initiatives and financial performance. With a focus on improving margins, cost efficiency, and driving revenue growth, Team is making significant strides in overcoming the challenges it faced in recent years. The company's confidence in its strategic roadmap and commitment to operational excellence and safety culture bode well for its future prospects. As the company continues to execute its strategic plan, investors and stakeholders can expect improved results and enhanced shareholder value.