SUGAR LAND, Texas, May 4, 2021 /PRNewswire/ --Team, Inc. (NYSE:TISI), a global leading provider of integrated, digitally-enabled asset performance assurance and optimization solutions, today reported its financial results for the first quarter ended March 31, 2021.
First Quarter 2021 Results:
- Revenue of $194.6 million, down $42.2 million, or 17.8%, from Q1 2020
- Gross margin was $43.7 million, or 22.5%, slightly below the 24.3% from Q1 2020
- Reduced quarterly SG&A by $12.3 million or 15.7% as compared to Q1 2020
- Strong decremental despite a 17.8% drop in revenue, as a result of disciplined cost management
TEAM's first quarter results were adversely impacted by numerous headwinds, said Amerino Gatti, TEAM's Chairman and Chief Executive Officer. As expected, we experienced a slow start to the year. January is historically a weak month as our clients' focus is on scheduling maintenance and capital projects. February's typical uptick in activity was delayed by the unprecedented winter storms that caused large scale power outages across the U.S. Midwest and Gulf Coast. These storms resulted in a large number of refining and petrochemical plants shutting down temporarily, which reduced our nested activity and postponed projects. We estimate the storms negatively affected our first quarter revenue by approximately $10 million. Our international markets were also affected, as COVIDrelated lockdowns limited travel and necessitated quarantine restrictions.
Although we are not pleased with our first quarter results, we were able to minimize the Adjusted EBITDA decremental to 3% compared to Q1 2020, despite a $42.2 million yearoveryear revenue decline. The favorable fall through we generated was supported by our 2020 disciplined cost reduction actions. During the quarter, we began to roll back some of our variable cost initiatives that started in late March 2020. We also increased our investments in sales, account management, and technician training and certifications in order to position us to competitively gain market share as our end markets expand and the labor market tightens.
In March, our activity levels improved significantly with clients returning to more normalized operations as well as the startup of several large turnaround projects. Specifically, our Inspection and Heat Treating and Mechanical Services segments realized approximately a 40% increase in billable hours over February levels. Quest segment's revenues increased approximately 40% in March over its January and February average. These March activity levels have continued into April and early May.