Team, Inc. Delivers Mixed Third Quarter Results, Eyes Growth in 2025
Monday, Nov 11, 2024 4:53 pm ET
1min read Team, Inc. (NYSE: TISI), a leading global provider of specialty industrial services, reported its third quarter 2024 financial results on November 11, 2024. The company's performance was marked by mixed outcomes, with revenue growth and improved operating income offset by a net loss and lower international revenue. As the company looks ahead, it remains optimistic about its growth prospects for 2025.
Revenue and Gross Margin
Team, Inc. generated revenue of $210.8 million in the third quarter, up 2% year over year. This growth was driven by a 6% increase in U.S. revenue, primarily from higher activity in the Inspection and Heat Treating (IHT) and Mechanical Services (MS) segments. However, lower year-over-year revenue from Canadian operations and, to a lesser extent, other international operations, partially offset this growth. The company maintained a consistent gross margin of 25.4% for the quarter.
Operating Income and Adjusted EBITDA
Team, Inc. improved its operating income to $3.2 million, a $4.4 million increase over the third quarter of 2023. The company also reported consolidated Adjusted EBITDA of $11.3 million, representing 5.4% of consolidated revenue. For the first nine months of 2024, Adjusted EBITDA grew by 21% to $39.6 million.
Net Loss and Selling, General, and Administrative Expense
Team, Inc. reported a third quarter 2024 net loss of $11.1 million, an 8.3% improvement year over year. The company also saw a decline in Adjusted Selling, General, and Administrative Expense to 21.7% of consolidated revenue.
Cost Reduction Initiatives and Outlook
To address underperformance in its Canadian and international operations, Team, Inc. launched targeted cost reduction actions in September, expected to yield annualized cost savings of between $6 million and $8 million. The company remains focused on maintaining its positive margin trajectory and cash flow generation through both top line growth and cost discipline.
Looking ahead to the fourth quarter, Team, Inc. expects healthy activity levels across both segments and improved Adjusted EBITDA margin performance compared to the 2023 period. For 2025, the company anticipates top line growth in the low to mid-single digits and continued progress towards its targeted Adjusted EBITDA margin of at least 10%.
In conclusion, Team, Inc.'s third quarter 2024 results demonstrated mixed performance, with revenue growth and improved operating income offset by a net loss and lower international revenue. As the company looks ahead, it remains committed to strengthening its financial performance and growing shareholder value through leveraging its unparalleled technical capabilities, operational excellence, and safety culture.
Revenue and Gross Margin
Team, Inc. generated revenue of $210.8 million in the third quarter, up 2% year over year. This growth was driven by a 6% increase in U.S. revenue, primarily from higher activity in the Inspection and Heat Treating (IHT) and Mechanical Services (MS) segments. However, lower year-over-year revenue from Canadian operations and, to a lesser extent, other international operations, partially offset this growth. The company maintained a consistent gross margin of 25.4% for the quarter.
Operating Income and Adjusted EBITDA
Team, Inc. improved its operating income to $3.2 million, a $4.4 million increase over the third quarter of 2023. The company also reported consolidated Adjusted EBITDA of $11.3 million, representing 5.4% of consolidated revenue. For the first nine months of 2024, Adjusted EBITDA grew by 21% to $39.6 million.
Net Loss and Selling, General, and Administrative Expense
Team, Inc. reported a third quarter 2024 net loss of $11.1 million, an 8.3% improvement year over year. The company also saw a decline in Adjusted Selling, General, and Administrative Expense to 21.7% of consolidated revenue.
Cost Reduction Initiatives and Outlook
To address underperformance in its Canadian and international operations, Team, Inc. launched targeted cost reduction actions in September, expected to yield annualized cost savings of between $6 million and $8 million. The company remains focused on maintaining its positive margin trajectory and cash flow generation through both top line growth and cost discipline.
Looking ahead to the fourth quarter, Team, Inc. expects healthy activity levels across both segments and improved Adjusted EBITDA margin performance compared to the 2023 period. For 2025, the company anticipates top line growth in the low to mid-single digits and continued progress towards its targeted Adjusted EBITDA margin of at least 10%.
In conclusion, Team, Inc.'s third quarter 2024 results demonstrated mixed performance, with revenue growth and improved operating income offset by a net loss and lower international revenue. As the company looks ahead, it remains committed to strengthening its financial performance and growing shareholder value through leveraging its unparalleled technical capabilities, operational excellence, and safety culture.
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