Team, Inc.

Good morning and welcome to the Team, Inc. Third Quarter Update Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing star then zero on your telephone keypad. I will now turn the conference over to Nelson Haight, CFO. Please go ahead.

Thank you, operator. Good morning, everyone, and welcome to Team Inc.' 's discussion about our third quarter 2024 operational and financial results. On the discussion today are Keith Tucker, our CEO, and myself, Nelson Haight, the Chief Financial Officer. I want to remind you that management's commentary today may include forward-looking statements, including without limitation those regarding revenue, gross margin, operating expense, other income and expense, taxes, adjusted EBITDA, cash flow, and future business outlook, which by their nature are uncertain and outside of the company's control. Although these forward-looking statements are based on management's current expectations and beliefs, actual results may differ materially. For discussion of some of the risk factors that could cause actual results to differ, please refer to the risk factors section of Team Inc.' 's latest annual and quarterly filings filed with the Securities and Exchange Commission, along with our associated earnings release. team assumes no obligation to update any forward-looking statements or information which speak as of their respective dates. With that, I will turn it over to Keith Tucker, our CEO.

Thank you, Nelson. Welcome, everyone, and thank you for joining us to review our recent accomplishments and our third quarter results. As we are approaching the end of the year, I want to highlight some of the significant accomplishments that we've made thus far in 2024. Over the past two years, we've been executing a strategic roadmap designed to better position team for success and improve financial performance in the future. We have simplified the business, worked to address our capital structure and balance sheet, improved our margins, and are now well positioned to grow once again. Our results so far in 2024 reflect tangible progress in the execution of this strategy. We have increased our margins and adjusted EBITDA, lowered our costs, and continue to work to identify and implement additional cost reductions and margin enhancements. I'm encouraged by the progress we've made so far and the overall trajectory of our business, and I am thankful for all the employees at TEAM that have helped to make this possible. Turning to our third quarter, we continue to deliver solid results with positive free cash flow and year-over-year improvements in revenue, operating income, adjusted EBITDA, and lower expenses. For the third quarter, revenue was up 2% compared to Q3 2023, mainly due to a 6% increase in revenue from our U.S. inspection and heat treating and mechanical services segments. driven by strong turnaround and nested activity. This U.S. revenue growth was partially offset by lower year-over-year revenue from both of our Canadian segments due to lower turnaround and nested activity and less project work. We made continued progress in our cost management program with selling, general, and administrative expense for the third quarter nearly $4 million lower versus the prior year period. And on an adjusted basis, which excludes non-cash and non-recurring items, down 30 basis points from 2023 to 21.7% of revenue. In the third quarter, we delivered adjusted EBITDA of $11.3 million, driven by strong performance in our U.S. operations. And through the first nine months of 2024, We generated nearly 40 million of adjusted EBITDA, a 21% improvement over the first nine months of 2023. Our ongoing actions to lower costs have led to margin expansion that we believe we can continue to build upon. As we had noted previously, our goal has been to grow adjusted EBITDA margins to 10% or more, and through the first nine months, we are over 6%, which is an important step towards achieving this goal. We have made meaningful progress thus far in 2024, and we believe there is more to accomplish. To that end, we remain focused on strict cost discipline, driving revenue growth and improving operational execution. Importantly, in September, we launched a series of actions that in the near term are expected to yield annualized cost savings of between $6 million and $8 million. In addition, we are in the midst of implementing a number of actions to drive improvements in the performance of our Canadian operations. These actions are a mix of top-line growth initiatives and steps to improve our cost structure and margins. We expect to see the results from these actions reflected in our performance beginning in the fourth quarter and continuing into 2025. Our results also benefited from an improved job mix, driven by our increased focus on higher margin revenue streams with stronger pricing as demonstrated by the 41% increase in heat treating revenue and 32% increase in aerospace revenue in the third quarter. We remain keenly focused on maintaining our positive margin trajectory and cash flow generation through both top line growth initiatives and continued cost discipline. which will further strengthen our financial position and accelerate our cash flow growth, ultimately leading to enhanced shareholder value. Looking ahead to the fourth quarter of 2024, we continue to experience healthy activity levels across both of our segments and expect further improvement in margin performance and financial performance versus 2023. We expect these factors together with additional traction on our commercial initiatives to provide positive momentum as we enter 2025. With that, I would like to turn it over to Nelson to discuss our financial accomplishments.