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Shares of Team, Inc. TISI have gained 20.1% since reporting fourth-quarter and 2024 results, outperforming the S&P 500 index’s decline of 0.1%. Over the past month, TISI shares have risen 4%, bucking broader market weakness that saw the S&P 500 fall 4.8%.
Revenue & Earnings Show Improvements
For the fourth quarter of 2024, Team reported revenues of $213.3 million compared with $214.1 million in the prior-year period. Despite the marginal decline, the company posted significant profitability improvements. The gross margin rose to $57.3 million, or 26.9% of revenues, representing a 330-basis-point expansion and a $6.9-million increase from the prior year. Operating income was $2.2 million against an $8.9-million loss in the fourth quarter of 2023.
Net loss narrowed substantially to $7.2 million, or $1.61 per share, from $23.1 million, or $5.25 per share, in the prior-year quarter. Consolidated adjusted EBITDA increased 50.5% year over year to $14.6 million, accounting for 6.9% of revenues versus $9.7 million, or 4.5% of revenues, a year ago.
For the year, TISI generated revenues of $852.3 million, down from $862.6 million in 2023. However, the gross margin improved to $223.2 million (26.2% of revenues) from $211.2 million (24.5% of revenues). Operating income for 2024 was $10.1 million against a $13.3 million operating loss in the prior year. Net loss narrowed to $38.3 million from $75.7 million in 2023. Adjusted EBITDA grew 27.7% to $54.3 million, or 6.4% of revenues.
Team, Inc. Price, Consensus and EPS Surprise
Team, Inc. price-consensus-eps-surprise-chart | Team, Inc. Quote
Operational Efficiency Drives Margin Expansion
Team’s earnings improvements were largely driven by its focus on operational efficiency. Selling, general and administrative (SG&A) expenses declined $4.2 million year over year in the fourth quarter to $55.1 million and fell by $11.4 million, or 5.1%, over the full year. Adjusted SG&A expenses for 2024 totaled $182.7 million, slightly down from $183.6 million in 2023.
Both of the company’s core segments — Inspection and Heat Treating (IHT), and Mechanical Services (MS) — contributed to higher operating income in the fourth quarter. IHT’s operating income rose 45.4% year over year to $9.5 million, whereas MS grew 51% to $8.1 million. For the year, IHT’s operating income increased 52.8% to $37 million, whereas MS held steady at $27.3 million. Corporate and shared service costs declined 25.8% in the quarter and 17% for the year due to reduced legal and professional fees.
Management Commentary Reflects Confidence in Road Map
CEO Keith Tucker emphasized that the results validate Team’s operational and commercial initiatives.