Team, Inc.

Good morning, and welcome to the TEAM Incorporated Second Quarter 2025 Results Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. Please note, this event is being recorded. I would now like to turn the conference over to Nelson Haidt, Chief Financial Officer. Please go ahead.

Thank you, operator. Good morning, everyone, and welcome to Team Inc.' 's discussion about our second quarter 2025 operational and financial results. On the discussion today is Keith Tucker, our Chief Executive Officer, and myself, Nelson Haight, 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 a 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 annual and quarterly filings filed with the Securities and Exchange Commission along with our associated earnings release. The 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.

Keith Tucker Thank you, Nelson. Welcome, everyone, and thank you for joining us to review our second quarter operational and financial highlights. We delivered strong results in the second quarter as we saw significant growth in revenue gross margin, and adjusted EBITDA. Revenue grew 8.5% or almost 20 million year-over-year, with gross margin increasing by 7.1% and adjusted EBITDA up by 12.4%. As you can see, the growth in our adjusted EBITDA outpaced our top-line growth, which is a testament to the solid progress we continue to make in our ongoing cost and margin improvement program. Drilling down into the segments, we saw 15% overall revenue growth in inspection and heat treating, driven by an increase of over 13% in the US. We also saw our Canada operations deliver year-over-year revenue growth of 31%, demonstrating the mounting traction of our ongoing initiatives to strengthen commercial and financial performance of this business. This performance, together with a nearly 26% year-over-year revenue increase, and our higher margin heat treating revenue helped to drive 25% growth in IHT segment adjusted EBITDA and a 118 basis point improvement in our IHT segment adjusted EBITDA margin. In our mechanical services segment, our U.S. operations led the way with a year-over-year increase in revenue of 7%, offsetting short-term revenue weakness in our international business and helping to drive the 2% growth we saw in total MS revenue. Our adjusted EBITDA for the second quarter increased by 12.4% year-over-year to $24.5 million, with adjusted EBITDA margin of 40 basis points to 9.9% of our consolidated revenue. We continue to see benefits from our cost discipline in the second quarter, lowering our adjusted selling, general, and administrative expense. which excludes expenses not representative of team's ongoing operations, such as non-recurring fees and non-cash expenses, to 18.9% of consolidated revenue versus 19.8% in the second quarter of 2024. We remain focused on driving revenue growth, strict cost discipline, and improving operational execution. In the second quarter of 2025, we completed a series of actions targeting further improvement in our SG&A and other costs that are expected to yield annualized cost savings of around 10 million. We expect to see about 6 million of those savings flow through in the second half of 2025. In the second quarter, we also began to see some results from our targeted actions to improve the financial and commercial performance of our Canadian operations. particularly in the top line, and we expect to see continued year-over-year improvement in the second half of 2025. A few weeks ago, we announced the appointment of Dan Dolson as Executive Vice President, Chief Strategy and Transformation Officer to lead our transformation efforts moving forward. We believe dedicated leadership overseeing our ongoing transformation program will accelerate revenue growth and our ability to capture additional cost savings. Our management team is committed to achieving the goals of our transformation plan, and we have already identified additional opportunities to improve margin and efficiency that we will pursue in the second half of 2025. We believe all of these ongoing actions will help lead to top-line growth and further improvements to our cost structure and margins. While we are beginning to see the results from these actions in our 2025 results, We expect to see the full year impact in 2026. Looking ahead, we continue to monitor U.S. tariff policy and have identified opportunities to improve our supply chain and material sourcing to help mitigate any potential cost pressure. We believe our diversified portfolio of service offerings across multiple industries and our geographic footprint positions us to better navigate recent macroeconomic uncertainty around tariff policies. We see top-line growth over the prior year across both segments and improved adjusted EBITDA levels for the second half of 2025. Our management team is focused on the things that we can control, which are continued cost discipline and execution on our commercial initiatives, and we remain committed to delivering top-line growth for the full year and at least 15% year-over-year growth in adjusted EBITDA. With that, I'd like to turn it over to Nelson to discuss our financial accomplishments.