Team Inc.'s Turnaround: New Leadership, New Backer, and a Bet on Deferred Maintenance
Q2 earnings miss on Middle East-driven deferrals, but a Stellex vote of confidence and a cost-cutting plan set the stage for a second-half recovery.
TISI · Earnings Call · 2026-08-11
A Quarter of Deferrals and a New Chapter
Team, Inc. reported a difficult second quarter, with revenue of $229 million and adjusted EBITDA of $13.7 million, down from $24.5 million a year earlier. The headline cause was the Middle East conflict, which has pushed customers to extend operating runs and defer turnaround activity.
Team has a strong foundation. We have highly skilled employees, deep technical expertise and long-standing relationships with many of the largest operators across our core markets.
CEO Gary Hill, now roughly 120 days into the role, quantified the impact: “The conflict has negatively impacted revenue by more than $20 million in the first half of 2026, coming from both deferred turnaround and maintenance activity...” — Gary Hill, Chief Executive Officer · 2026-08-11 He emphasized that the work cannot be postponed indefinitely and expects a rebound in the second half.
This is a familiar story for industrials in the current macro environment, but for Team it compounds a longer history of volatility. Revenue peaked at $313 million in Q3 2018 and has trended down since, with the latest quarter's $229 million still 27% below that peak. The company is essentially betting that deferred maintenance, combined with cost cuts, can restore operating leverage.
The Transformation Plan and New Leadership
The strategic response is a broad transformation plan centered on commercial execution, operational efficiency, and cash generation. CFO Clinton Roeder, on his first call, outlined $20–35 million in annualized savings: “We have identified approximately $20 million to $35 million of annualized savings and productivity benefits across our facility footprint, fleet, procurement, organizational structure and operating processes.” — Clinton Roeder, Chief Financial Officer · 2026-08-11 These actions are intended to drive $5–15 million of cash flow improvement this year and a full run rate by 2027.
A key part of the narrative is diversification. Hill pointed to growth in nuclear power, LNG, aerospace, and pulp and paper, with more than 10% year-on-year growth in those verticals. “We are seeing growth in LNG, aerospace, commercial nuclear power, pulp and paper markets as examples, where we're seeing more than 10% year-on-year growth...” — Gary Hill, Chief Executive Officer · 2026-08-11 That is a meaningful shift from the traditional refining and petrochemical base, and it reflects the new leadership's focus on higher-margin, less cyclical work.
Stellex Comes In
Perhaps the most striking development is the change in the shareholder register. Stellex Capital Management acquired a position that makes it the largest common equity holder, in a negotiated transaction with CORE Partners at a "significant premium to market value." Hill welcomed the move: “This sends a very strong message to the management team that Stellex has confidence in our business strategy, the value to be unlocked here...” — Gary Hill, Chief Executive Officer · 2026-08-11 For a company trading at just 0.1x revenue and with a 95% drawdown from its 2014 peak, a fresh institutional vote of confidence is notable.
The stock has already responded, rising 40.8% over the last 90 days, though still far below its all-time high. The market appears to be pricing in the transformation story, but the near-term guidance is cautious: the company reaffirmed adjusted EBITDA guidance of $68–73 million, but expects results in the lower half.
What to Watch
The next few quarters will test whether the deferrals actually return and whether the cost savings can offset the revenue softness. If the Middle East situation stabilizes and turnaround work resumes, Team's operating leverage could be significant. If not, the company will need to lean more heavily on its new verticals and cost discipline. The Stellex involvement suggests there is a credible path to unlocking value, but execution will be everything.