Team Inc. ((TISI)) has held its Q4 earnings call. Read on for the main highlights of the call.
The recent earnings call for Team Inc. painted a generally positive picture, with significant improvements in key financial metrics such as operating income, adjusted EBITDA, and cost management. The company also successfully executed refinancing efforts. However, the call did note a slight decline in revenue year-over-year, which was the only notable downside in an otherwise strong performance.
Improvement in Operating Income
Operating income saw a substantial increase, with both segments reporting growth of 45.4% and 51% respectively in the fourth quarter. This impressive performance highlights the company’s effective strategies in enhancing operational efficiency and profitability.
Adjusted EBITDA Growth
Team Inc. reported a significant 28% improvement in adjusted EBITDA for the full year 2024, reaching over $54 million compared to 2023. This growth underscores the company’s successful efforts in optimizing its earnings before interest, taxes, depreciation, and amortization.
Successful Refinancing
The company achieved a major milestone in its refinancing efforts, lowering the blended interest rate by over 100 basis points and extending term loan maturities to 2030. This strategic move is expected to provide greater financial flexibility and stability in the coming years.
Cost Management Success
Cost management initiatives proved effective, as selling, general, and administrative expenses decreased by over $4 million in Q4 and almost $11 million compared to 2023. These reductions reflect the company’s commitment to maintaining a lean operation.
Improved Free Cash Flow
Team Inc. generated $13.3 million of free cash flow for 2024, showcasing its ability to convert revenue into cash that can be used for expansion, debt reduction, or shareholder returns.
Decrease in Net Loss
The consolidated net loss for the year decreased by almost 50% to $38.3 million, marking a $37.5 million improvement over the prior year. This reduction in net loss is a positive indicator of the company’s improving financial health.
Slight Revenue Decline
Despite the overall positive financial performance, revenue was down about 1% year-over-year for 2024 and nearly flat in the fourth quarter compared to the prior year period. This slight decline was the only notable lowlight in the earnings report.
Forward-Looking Guidance
Looking ahead to 2025, Team Inc. is optimistic about achieving mid-single-digit revenue growth and at least 15% growth in adjusted EBITDA. The company aims to reach a targeted adjusted EBITDA margin of 10% or more, driven by ongoing top-line and cost management initiatives. These forward-looking statements reflect confidence in continued financial and operational improvements.
In summary, Team Inc.’s earnings call revealed a strong performance with significant improvements in operating income, adjusted EBITDA, and cost management. While there was a slight decline in revenue, the company’s successful refinancing efforts and positive forward-looking guidance suggest a promising future. Investors and stakeholders can be encouraged by the company’s strategic initiatives and financial resilience.