Team, Inc. Reports Slight Revenue Decline in Q1 2025, Focuses on Operational Efficiency

Team, Inc. reported a slight decline in revenue for the first quarter of 2025, generating $198.7 million compared to $199.6 million in the same period last year. The Inspection and Heat Treating (IHT) segment saw a 6.8% increase in revenue to $106.2 million, driven by higher activity in U.S. operations, particularly in turnaround and capital projects. Conversely, the Mechanical Services (MS) segment experienced a 7.7% decrease, with revenue falling to $92.4 million due to reduced turnaround activities and callout projects in the U.S. and lower international project revenues.

The company's operating loss improved slightly to $6.0 million from $6.4 million year-over-year. The IHT segment's operating income increased significantly by 67.7% to $8.7 million, while the MS segment reported an operating loss of $1.1 million, a decline from a profit of $4.1 million in the previous year. The overall net loss for the quarter was $29.7 million, compared to a loss of $17.2 million in the prior year, largely due to an $11.9 million loss on debt extinguishment related to recent refinancing transactions.

In terms of strategic developments, Team, Inc. completed significant refinancing transactions on March 12, 2025, which included entering into a new First Lien Term Loan Credit Agreement. This refinancing aimed to lower the company's blended cost of capital, extend loan maturities to 2030, and improve lending covenants. As a result, total long-term debt and finance lease obligations increased to $353.6 million as of March 31, 2025, up from $325.1 million at the end of 2024.

Operationally, Team, Inc. reported a decrease in cash and cash equivalents to $16.8 million, down from $35.5 million at the end of 2024. The company experienced a net cash outflow from operating activities of $28.7 million, a significant decline from the $1.9 million inflow in the previous year, primarily due to increased working capital needs. The company’s total liabilities rose to $541.2 million, with current liabilities decreasing to $153.1 million, reflecting improved management of accounts payable and accrued liabilities.

Looking ahead, Team, Inc. remains focused on enhancing operational efficiency and expanding its service offerings in the specialty industrial services sector. The company is optimistic about its ability to navigate market challenges and leverage its recent refinancing to support future growth initiatives. However, management acknowledges the potential risks associated with economic conditions, customer demand fluctuations, and compliance with debt covenants as it moves forward.