Gary G. Yesavage - Team, Inc. Greg L. Boane - Team, Inc.

Tahira Afzal - KeyBanc Capital Markets, Inc. Martin W. Malloy - Johnson Rice & Co. LLC Adam Robert Thalhimer - Thompson Davis & Co., Inc. Tom Radionov - Corre Partners Management, LLC.

Good day, ladies and gentlemen, and welcome to the Third Quarter 2017 Team, Incorporated Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instruction] As a reminder, this conference maybe recorded. I would now like to turn the conference over to our host of today's call, Mr. Gary Yesavage, you may begin. Gary G. Yesavage - Team, Inc.: Well, good morning. As was stated, my name is Gary Yesavage, and I'm the Interim CEO for Team, Inc. Joining me today is Greg Boane, Executive Vice President and CFO. Purpose of the call today is to update the group on our third quarter earnings, as well as to provide an update on some of the initiatives that we have underway to improve our business. I thought I'd give a brief update to the group since I'm new to many of you, but before I do that, I'd like to thank Ted Owen, the former CEO of Team, Inc. When Ted decided he was going to retire, he called me and asked me to serve as the Interim CEO. I can say that Ted has a deep care and concern for the employees of Team, and really put his heart and soul into his years here at the company. So as I said, Gary Yesavage, chemical engineer by training, right out of college joined Chevron at a refinery we had in New Jersey, spent the next 42 years and nine moves working for Chevron all in the downstream, all in a refinery or a petrochemical plant, has a good fortune of managing four different locations, three chemical plants, and Chevron's 250,000 barrel a day refinery in the Los Angeles Basin, was then asked to move to corporate headquarters and run the global refining system for Chevron. Retired June of 2016, and then was asked to join the Team board in January of this year. So, that's a little bit about me. I'm going to turn it over to Greg, he's going to walk us through the financial results. And I'll be back and share my perspective that I've garnered here over the last seven weeks or so. Greg L. Boane - Team, Inc.: Thanks, Gary. Good morning. This call will contain certain forward-looking information within the meaning of the Federal Safe Harbor provisions. Any forward-looking information discussed today is provided in accordance with the Private Securities Litigation Reform Act of 1995. We've made reasonable efforts to ensure that the information, assumptions and beliefs upon which this forward-looking information is based are current, reasonable and complete. However, a variety of factors could cause actual results to differ materially from those anticipated in any forward-looking information. A description of those factors is set forth in the company's SEC filings. There can be no assurance that the forward-looking information discussed today will occur or that our objectives will be achieved. We assume no obligation to publicly update or revise any forward-looking statements made today or any other forward-looking statements made by the company, whether as a result of new information, future events or otherwise. Today's discussions will also include certain non-GAAP financial measures. We've excluded certain items that we believe are not indicative of Team's core operating activities, when arriving at adjusted net income, adjusted EPS, adjusted EBIT, and adjusted EBITDA. All of these are non-GAAP financial measures. Reconciliations of these non-GAAP and adjusted financial measures are provided in the quarterly earnings release. I'll now go over the results for the current quarter and will start off by discussing segment revenue performance before moving onto our consolidated results. TeamQualspec current quarter revenues were $138 million and decreased approximately 3% from third quarter 2016 revenues. TeamFurmanite revenues were $131 million and decreased approximately 1% from third quarter 2016 revenues. Quest Integrity revenues were $16 million and increased approximately 4% in the current quarter versus the prior year quarter. On a consolidated basis, current quarter revenues were $285 million and decreased approximately 2% from third quarter 2016 revenues. We estimate the overall impact of U.S. Gulf Coast hurricanes negatively impacted our current quarter revenues by approximately 5% or $14 million through a combination of both customer project deferrals and lost hours from work disruptions. The hurricane impact by segment were $7 million for TeamQualspec, $6 million for TeamFurmanite, and $1 million for Quest Integrity. Excluding Harvey, our consolidated current quarter revenues would have been approximately $299 million, an increase of 3% over Q3 2016; revenues in all three segments would have increased over Q3 2016. Foreign currency revenue re-measurement impacts were less than 1% for the quarter. Turning now to our consolidated results. In July, we announced a cost reduction program that began in August 2017. For the discussion on Q3 2017 results, I'll provide sequential comments on current quarter activity versus Q2 2017. I think, this is the best approach to help you understand what's happened sequentially from Q2 2017 and how the cost reduction program impacted our Q3 results. I'll start with an update on the cost reduction program, which I'll refer to as our Phase 1 cost reduction program. Targeted Phase 1 savings were $30 million on an annualized basis. To-date, we have completed approximately $27 million of the annualized cost reductions and we have specific execution plans on an additional $1 million, leaving a target of $2 million to complete Phase 1. $26 million of the completed target relates to head count reductions, and we incurred approximately $3 million of severance charges in the current quarter for this workforce reduction. During the current quarter, we realized total cost savings of $4 million, $2 million of savings is reflected in operating expenses and the remaining $2 million of savings is reflected in SG&A expenses. We expect to realize savings of approximately $6 million to $6.5 million in Q4 2017, an increase in savings of approximately $2 million to $2.5 million sequentially over Q3 2017, of which approximately, $1 million relates to SG&A. We are focused on improving our financial performance through improved business development, optimizing business processes to improve efficiency, as well as searching for additional cost reduction opportunities without negatively impacting our service capabilities or performance. We have recently engaged an outside consulting firm Alvarez & Marsal or A&M to complete a more detailed review and assessment of both our corporate and support cost structures. I'll refer to this effort as Phase 2 of our cost reduction program. A&M has been engaged on this project for approximately one month. At this time, it is too early to provide any specific guidance on the savings potential or the expected cost to achieve or implement Phase 2. In general, Phase 2 is expected to take longer to execute than Phase 1. Once A&M has completed their assessment, and we have a specific execution plan in place with timetables and estimated savings ranges, we will update you on the next earnings call. Gary will provide some more color on this project in his comments. Moving on to the results of operations for the current quarter. Consolidated gross margin in the current quarter declined sequentially to 24% from 27% in Q2 2017. Sequentially, revenues declined $27 million in the current quarter from Q2 2017. Gross profit dollars declined $16 million sequentially from Q2 2017. The largest component of the decline in gross profit dollars relates to negative operating leverage of approximately $14 million on the sequential revenue decline of $27 million. Our consolidated profit margins before indirect costs for field support are around 50%. Therefore we have significant negative operating leverage on sequential declines in revenue, which can create large swings in gross profit percentage depending on the magnitude of the revenue decline. We did have a couple of unusual items or costs this quarter related to unabsorbed labor costs or non-billable payroll costs during the hurricane disruption of approximately $2 million, as well as a loss of approximately $1 million on a specific project that was outside of our core service market. We have completed the project and will not participate in this market going forward. Partially offsetting the above unfavorable cost impacts, we realized $2 million of savings in operating expenses from the Phase 1 cost reduction program. Consolidated SG&A expense for the third quarter was $85 million and includes roughly $7 million of other items that I will discuss in a moment. Adjusted SG&A expense for the current quarter was $78 million and was down $6 million sequentially from $84 million in Q2 2017. As mentioned earlier, there was a $2 million Phase 1 SG&A cost reduction savings realized in the current quarter. We also had approximately $4 million of sequential reductions related to incentive compensation and performance stock-based compensation accrual adjustments, which were decreased based on lower actual year-to-date operating performance. A more normalized adjusted SG&A expense for the current quarter would have been around $80 million, that includes a full quarter impact for the Phase 1 cost reduction program. Corporate SG&A declined to approximately $18 million in the current quarter from approximately $20 million in Q2 2017 on lower stock-based comps, Phase 1 cost savings and other spending declines. For the current quarter, total depreciation and amortization expense was $13 million and non-cash compensation expense was approximately $2 million. I'll spend a few minutes discussing the excluded items in the current quarter that we do not consider to be indicative of our core operating activities. In the current quarter, there was a total of $82 million of excluded items before-tax comprised of the following. There was a $75 million goodwill impairment charge. We completed a goodwill analysis during the quarter, which indicated the book value of the TeamFurmanite segment exceeded its fair value by $54 million, and the TeamQualspec segment's book value exceeded its fair value by $21 million. Based on this analysis, we recorded a goodwill impairment charge of $75 million in the current quarter. The remaining goodwill balance was $285 million at September 30. We incurred $4 million of ERP implementation costs. We are now 98% complete with the U.S. rollout of the ERP system. Only a few branches remain and they will be going live next month. We have no immediate plans for any ERP activities outside of the U.S. Our focus going forward in 2018 will be on leveraging the new system in the U.S. There was $2 million of unabsorbed labor and related costs associated with the U.S. Gulf Coast hurricanes. There was approximately $4 million of Phase 1 cost reduction, restructuring and executive transition costs. There was $2 million of certain legal and professional fees, primarily integration and other projects. There was also $1 million related to a non-cash write-off of deferred loan costs related to the pay down of the term loan during the quarter. Finally, there was a non-cash gain of $6 million associated with the conversion feature of the convertible debt. The GAAP accounting for the convertible debt is very complex. A portion of the conversion feature is treated as an embedded derivative liability and the value of the liability is pegged to the company's underlying stock price at each balance sheet date. Generally, decreases in the company's stock price will result in gains, while increases will result in losses. Moving down the income statement below operating income. Interest expense net for the quarter was $6 million and includes $1 million related to non-cash amortization of debt issue costs and debt discount on the convertible debt. Going forward, the cash interest rate on outstanding debt should average around 5.25% per year. The non-cash amortization component of interest expense is estimated to be around $1.5 million per quarter for the next several quarters, but it will increase slightly each year over the six-year term of the convertible debt under the effective interest method. The estimated effective tax rate for the current quarter was 13% and was 15% year-to-date September 2017. The overall effective tax rate for 2017 is not very meaningful because of the year-to-date net loss and the impact of the goodwill impairment charge, which is not deductible for tax purposes and has no corresponding tax benefit. GAAP net loss for the third quarter was $84 million or $2.80 per diluted share versus a net loss of $0.14 per diluted share in the prior-year quarter. Adjusted net loss was $11 million or $0.38 per diluted share for the current quarter versus adjusted net loss of $0.01 per diluted share in the prior-year quarter. I'll now cover the balance sheet and cash flows. At September 30, our cash balance was $27 million and we had approximately $51 million of available borrowing capacity under the revolver. Our year-to-date cash flow from operations was a net use of $10 million, primarily related to lower net cash earnings. Year-to-date CapEx was $27 million, $2 million related to ERP. During the quarter, we issued $230 million in unsecured convertible notes due 2023. Net proceeds from the offering were used to pay down existing senior secured bank debt. As of September 30, we are in compliance with our existing debt covenants. Regarding the total leverage ratio that comes back into effect in March 2018, as mentioned earlier we continue to work aggressively on performance improvement initiatives to reduce our debt balance and to improve our operating cash flows. Prior to the convertible debt offering, 100% of our debt was senior secured debt under the credit facility. The senior secured debt balance at June 30, 2017 was $382 million. Through the unsecured convertible debt offering, we have paid off a significant amount of secured bank debt. At September 30, the senior secured debt balance has been reduced by almost 60% to $163 million and the current loan balance now represents approximately 60% of total consolidated accounts receivable. The senior secured leverage ratio is now below four times EBITDA and is at its lowest level since March 2016. Overall, the senior secured debt profile has improved significantly since June. We believe we have good relationships with our bank group. As evidenced from our ability to execute previous amendments, the bank group has been very supportive of the Team during the soft end-market environment over the last two years. We will evaluate our covenant situation after we have closed the books on the fall 2017 turnaround season. Looking forward if we are not able to comply with the covenant requirements in 2018, we will engage in discussions with the bank group on available options including a possible modification to provide for additional relief on the total leverage ratio. That completes the financial review. I'll now turn it back over to Gary. Gary G. Yesavage - Team, Inc.: Thanks, Greg. So, in the seven weeks that I've been on the job, I want to share now my learnings and my observations. My plan coming into the job was to not be a night watchman, not to simply not let anything bad happen, but we've got a lot of work to do and I want to set the new CEO up for success. Focus areas where I'm going to be spending my time are in two major categories, the first is, personnel safety. Unfortunately, Team suffered a fatality back on August 18th. Any organization that has fatalities still has a lot of work to do, and so that is going to be an area of focus for me and obviously our business results are not acceptable. And during my time with my 42 years with Chevron, I learned a lot of management techniques and tools, and I'm trying to bring that to the organization here at Team from my prior experience. So, we – we start – we have started now having monthly business reviews with each of the two Presidents. One session with the inspection side of the shop, and another with mechanical services. This is an opportunity not for folks in the finance organization to answer my questions, but to have the people in the line organization answer my questions about the status of the business. I have asked for and have received a listing of the core performing braches. We had a meeting where the two levels down on the organization, those guys were expected to come in and explain the results, and more importantly, what they were going to do to improve the results. I plan on doing that, those types of reviews branch-by-branch, service line by service line on an ongoing basis. I – in my time with Chevron, I'm accustomed to periodically looking for an outside perspective. Sometimes when you're trying to solve a problem, you're too close to it, to actually see the problem. And so, I'm very comfortable bringing in outside consultants, if they're the right consultants. And we have two reviews underway currently. The first was started by Ted after the fatality on August 18th. He called me and asked that in my career have I run across anybody that can come in and really do a cultural review. Within Chevron, we had that opportunity, and I utilized some individuals that were brutally honest with their feedback, which I think organizations need. And so, we've got those gentlemen back in looking at Team's organization conducting a safety cultural review. I get regular updates from that group. We have to get safety right, if we're going to have a successful business. I can state from my time with Chevron that if you can't work safely as a contracting firm, you're just not going to work in their refineries. And so, we've got to turn our safety performance around, I believe, there's a moral responsibility for leadership to create a safe work environment. But there's also a strong business driver, I think, if leadership can convince the folks with their hands on the tools that we truly care about them, they will reciprocate and show they care about the business. I expect results from the safety cultural review sometime in early February. Greg mentioned that we have Alvarez & Marsal in looking at our entire operation. Again, I think, we need that level of review. We've asked them to look at our structural costs. We've asked them to look at how we – our overall operational efficiency. I've asked, hey, if we were starting with a clean piece of paper from an organizational perspective with a company of this size and breadth, what would that organization look like? I've asked that everything be on the table. I don't want – till we have a discussion as a leadership team, I don't want anything being pocket vetoed before we have a chance to talk about it. Greg and I receive weekly updates from the A&M team and we hope – no, we will have their recommendations by yearend. I've asked that those recommendations be presented in an effort versus impact form, so we can look at those items that require little effort, but will have a high impact, and we can get those started right away. And as the team is finding items, we're not going to wait until we're complete. If there is a quick hit, we're going to go ahead and implement that right away. The other thing we decided is, we're going to keep Alvarez around through implementation. So after they document and we have agreed upon recommendations, I still want them around and providing feedback to the leadership team on our progress. Sometimes organizations will sit around the table and nod their head and then those action items never get completed. So we're going to have Alvarez here through implementation and then I would like them to come back 9 months to 12 months after we're completed – we've completed the implementation to do a health check just to be sure that we haven't done – there hasn't been any backsliding. There are – I don't want it to sound like there is just all bad news, Greg highlighted a few things, there are some positive signs. Revenues in the third quarter of this year were $4.5 million less than the third quarter of 2016. But we believe that the hurricane impact was somewhere around $14 million. So without the hurricane, we think revenues would have been up year upon year. We also see that our corp. adjusted SG&A costs have turned and are coming down. Are they where – are those costs where they need to be? No, they're not. We still have more work to do. Another observation of mine is even though there's been a lot of hard work and a lot of great work done on the integration of the two acquisitions, Qualspec and Furmanite, that there's still a lot of work to do. I look at simple things just like the names we use to call our businesses. And it's time we move beyond using Qualspec and Furmanite. And so I've asked the organization to put together a plan to how do we just become one organization just Team, and because when you use the terms Qualspec and Furmanite, you're reinforcing in employees' minds and the customer minds that we're separate organizations. We need to behave as if we're one. I don't think we've really firmed up a go-to-market strategy. For example, because I'm most familiar with it, in the refining sector, if you segment the customer base, you've got your large integrated majors ExxonMobil, Shell, Chevron. They're going to have a different set of needs from a company like Team, than your independent major refiners, Tesoro, Valero, P66, which is still going to be different from the small one refinery type of company. I think, we need to look at the refining sector, decide what's the best approach for that particular customer segment, and I used the refining sector as an example, but the same could be said about the chemical industry, the pipeline industry, the power industry. So we really need to define how we want to go-to-market. I personally believe that the technology arm of Team Quest Integrity is a differentiator between us and our competitors. As a refiner, if there is a way that we can use technology to help me reduce cost, improve or lessen the impact on my operation when I get inspection data, and just be smarter about how I run that part of my business. I'm always looking to learn how we can do something different on the technology front, and I think, Team has that capability. We just have to get it organized in a manner that makes sense to each of those customer bases that I talked about. So, a brief update on the CEO search. That's an item of keen interest to me. I did not and I was not expecting to go back to work after working 42 years in high-stress, long-hour type of jobs with Chevron. I came back because I believe there's a lot of really good people in this company, and what we need is a organized approach to our business, and to the market and I'll be trying to set the new CEO up for that. So, we are actively searching. We have a long list of candidates that we have gotten down to a more manageable number. In the near future, we will be conducting our first round of interviews, and then I'm hopeful, at least, this is what I'm telling my wife that we will have the permanent CEO in place sometime during the first quarter. So, again, as I conclude my comments, this is – there's a lot of really good people in this company, that's one of the reasons why I decided to come back and go back to work and serve as the Interim CEO. We need to do a better job and that really comes down to leadership at identifying our message, what's in it for – what value does Team add to the customer and then act as one organization and not three separate organizations. I've seen examples of where I was down in Alvin looking at our engineering office and how we design and fabricate engineered clamps. Great work there underway to modernize that whole effort. We hadn't spent a whole lot of time looking at that part of our business any differently than we have for the last 40 years. The work group down there is doing a great job to modernize and streamline that process, which I believe will make us more competitive as we go into the future. So that concludes my comments, so I'd like to open it up for any questions that you guys might have, and between Greg and myself, we'll do our – take our best shot at (29:59) answer those questions.

Our first question comes from Tahira Afzal of KeyBanc. Your line is open. Tahira Afzal - KeyBanc Capital Markets, Inc.: Hi, folks. Greg L. Boane - Team, Inc.: Hello, Tahira. Tahira Afzal - KeyBanc Capital Markets, Inc.: So Gary, I mean, your message is pretty clear and it's very helpful. The milestones you provided seemed pretty definitive, so thank you for that, to begin with. I guess, my first question is, Ted before leaving gave us an idea of as he looked to restructure what we should be expecting in terms of some headline numbers, and he did mention, let's say, revenues that under the circumstances of, let's say, $1.1 billion in revenue, he still could see based on his restructuring, a business that could deliver sort of 8%, 9% EBITDA margins. I would like to get your point of view on that, if that is still achievable, and if it is, what kind of timeline you see given you are going through a different phase right now? Gary G. Yesavage - Team, Inc.: So Tahira, thank you for the question. So after seven weeks, I can't realistically put a target on what I think our revenue potential is. My efforts, as I mentioned, are really focused right now on the cost and organization side of the business. There are people that are much more familiar with the history of the company, this business sector. My focus, I believe, our costs are too high, and we're going to have to address that first and foremost. And then as I mentioned, I do have concerns about our safety culture. Greg, I don't know if you have anything you'd like to add to that? Greg L. Boane - Team, Inc.: Yeah, I would just add that, that we clearly have a goal of restructuring the organization, to move the EBITDA percentage on revenues towards the 10% mark. Tahira Afzal - KeyBanc Capital Markets, Inc.: Got it. Okay. And Greg, just as a follow-up, I know we go back and forth on G&A. All the numbers you provided were very helpful. But can you give me an idea of what the clean G&A number was in third quarter. And what grade we are expecting with the – roughly that $30 million savings now largely done? Greg L. Boane - Team, Inc.: I would say the clean number was around $81 million. And the number I gave for kind of a normalized number for Q4 of $80 million that would have included another month of savings of about $1 million. Tahira Afzal - KeyBanc Capital Markets, Inc.: Got it, Greg. So Gary and Greg, I mean, as you look forward, and the opportunities you see and as you said it's early – is it largely indirect costs or do we see it in the G&A line as well? Greg L. Boane - Team, Inc.: I think, both correct. The approach that Alvarez is taking is they are focusing on all what I would characterize as support costs. Those being operating support costs, as well as corporate support costs. So they've got specific consultants that are assigned to each of those areas and they are drilling into all of the line items spend in those categories to develop a view on what a potential opportunity in both areas might be. Gary G. Yesavage - Team, Inc.: And just to be clear, this is a service company and as a former refiner, if I have a need for a hot tap to be done on an emergency basis or a clamp to be designed, fabricated, installed, I want the supplier to be responsive. And so we're going to need to be aware of both sides that, hey, we do want to make sure we can still service the customer, but do so in the most cost efficient manner possible. Tahira Afzal - KeyBanc Capital Markets, Inc.: Got it, Gary. And last question from me. Gary, as you are from the industry, the big back and forth we get is the weakness we've been seeing in some of the downstream maintenance, whether that's a new trend going forward, or have things been banded to the point that we are going to see another cycle? Gary G. Yesavage - Team, Inc.: So I think every refining company is going to look at reliability a little differently. I think Chevron is a pretty conservative company. We have two of our largest refineries in the heavily regulated State of California. And so we were going to be very conservative to ensure that we did not have a high consequence loss of containment. I think others are going to have a different perspective. If you want to stay, I think, and be competitive in the refining business, you need to run it reliably. And I think that's what most of our refining customers are looking for is, what is that sweet spot between you want to spend the right amount of money to maintain your facility so that you can run it reliably. Technology is continuing to change. We're smarter about what damage mechanisms are, what type of metallurgy we should be using, inspection techniques are changing. And so our customers are getting smarter not only on use of our product, but they also are getting smarter about what our costs are. And so it's a competitive market. We'll continue to be a competitive market. And I think we're going to have to figure out how we're going to compete in this kind of market. Tahira Afzal - KeyBanc Capital Markets, Inc.: Got it. Thank you very much, Gary. That's very helpful.

And our next question comes from Martin Malloy of Johnson Rice. Your line is open. Martin W. Malloy - Johnson Rice & Co. LLC: Good morning. Gary G. Yesavage - Team, Inc.: Hello, Marty. Martin W. Malloy - Johnson Rice & Co. LLC: Sounds like you've got a lot on your – it sounds like you've got a lot on your plate, Gary, here. I guess, my first question just on – if you could talk maybe about Team's position in the market, and maybe a little bit about how you think they could be better positioned going forward. And if they're losing any market share, or they have over the past two years, and what can be done to protect their market share. It sounds like you believe that the Quest technology is pretty interesting and a differentiator for Team? Gary G. Yesavage - Team, Inc.: Yeah. So, Marty. Again my take after seven weeks is so Qualspec, what – they perform inspection work with a – the term we use here is nested accounts, where – and I saw this in the Chevron refineries where there were inspectors that work side-by-side with company inspectors. Team's approach was more on a call out basis from a regional office, so when we melded those two together, there really wasn't a lot of direct competition between Qualspec and Team, in my opinion, maybe others that have been around longer might see it differently. Furmanite, on the other hand, was a direct competitor of Team in the mechanical services side and if I'm a refinery manager and I've got two mechanical service contractors, Team and Furmanite, and they overnight become one, well, then I'm looking to qualify a third supplier because I don't want all my eggs in one basket, either from a quality of supply, price of supply, so I would say that there has been some market share loss on the mechanical services side. And I think, that's just when you put two large competitors together from the same space, the customers are going to look to diversify their suppliers, and so I think that has taken place, and I think in combination with that there – refinery turnaround cycles are extremely variable and difficult to forecast. And so I think, we've seen some of that up and down taking place on the inspection side of the shop, I think, on mechanical services side, we have lost some market share. What are we going to do to try to get that back? Well, that comment I mentioned about our ability to streamline the design fabrication and installation of engineered clamps, again as a refinery manager, if a Team or a Furmanite says, hey, I can get that clamp installed within three days, then you need to get that done in three days, and that's the message. As a Board Member, what I tried to deliver to Team was, when you guys say this, this is what the refiner hears, and when you say three days on a clamp, you've got to meet three days. So I think we need to get faster on how we do that part of the business, Marty. And then we have to get extremely predictable. And so, we are looking to streamline that part of our business. We're looking to use, we've hired some people that have Lean Sigma tools experience to help us lean out that overall process. Martin W. Malloy - Johnson Rice & Co. LLC: Okay. And then just continuing on the refinery and the segment, and petrochemical segment particularly along the Gulf Coast. It seems like the refineries rush to get back on line this fall, and take advantage of the spreads that were out there. As you look forward to 2018, given how long this downturn in spending has lasted. And then the lack of spending here on the fourth quarter, third quarter and fourth quarter turnaround season. As you look forward to 2018, are – do you have a positive bias in terms of the end market direction? Gary G. Yesavage - Team, Inc.: So, Marty, our best guesstimate is that the spring turnaround season is going to be stronger than the fall turnaround season. And you know – but there's always a lot of moving parts in turnaround planning and execution. But our overall perspective is positive for the spring turnaround season. Martin W. Malloy - Johnson Rice & Co. LLC: Okay. And then my last question just on the cash flow, the free cash flow generation as we look from 2017 to 2018, you've got the ERP system spending coming down, you've had some spending take place here in 2017 that will result in some cost savings going forward. Could you maybe summarize what the incremental differences we should think about when looking at the cash flow generation from 2017 to 2018? Greg L. Boane - Team, Inc.: I mean generally speaking cash flow should trend closely with EBITDA. The problem that we've had over the last 18 months is our EBITDA has been on a declining trend as opposed to an upside trend. We're focused on improving our profitability. We're focused on doing a better job of managing our accounts receivable. We've had a consulting group, is going around some of our branches and taking a look at those that are very good at collections and those that are not as good to come up with a game plan on reducing our DSO. There's so much variability in our quarterly results. We did spend or have spent around $12 million on ERP implementation so far this year. That's obviously a pocket of cash that we would use to pay down debt. But as Gary indicated, we don't have – we're not a backlog driven business. It's really hard to give specificity on projections looking forward. All I can say is that we've got plans in place to improve our cash flow performance and our objective is going to be to utilize that incremental cash to pay down debt. Martin W. Malloy - Johnson Rice & Co. LLC: Okay. Great. Thank you. I'll turn it back. Gary G. Yesavage - Team, Inc.: Thank you, Marty.

And our next question comes from Adam Thalhimer of Thompson Davis. Your line is open. Adam Robert Thalhimer - Thompson Davis & Co., Inc.: Good morning, guys. Gary G. Yesavage - Team, Inc.: Hello, Adam. Greg L. Boane - Team, Inc.: Good morning. Adam Robert Thalhimer - Thompson Davis & Co., Inc.: Gary, welcome to the call, and look forward to working with you for least a couple of months -couple of quarters here. First of all, can you give a little more color on the ERP system? I'm curious if you were hoping it was going to give you additional visibility into the business. I'm curious if it's achieving that objective? Gary G. Yesavage - Team, Inc.: I can take a shot at that, Adam, so I can tell you that in the seven weeks that I've been on the job, every time I ask a question, hey, what – can I see the bottom performing branches by EBIT percentage that within 24 hours to 48 hours I've got that answer. And it's laid down the way where I can then follow-up with the responsible line managers to ask even more detailed questions. So, every time I've asked the question, I receive the data in a very timely manner. Adam Robert Thalhimer - Thompson Davis & Co., Inc.: Okay. And then you had a large turnaround booked for Q1 2018. I'm curious if that's still on schedule? Greg L. Boane - Team, Inc.: I'm not sure we have anything "booked." There is a large turnaround project in the inspection segment that is in – that is – we're having discussions with the customer and nothing has changed relative to our view that, that should be a large project opportunity for us this spring that we have not had in the last several quarters. Adam Robert Thalhimer - Thompson Davis & Co., Inc.: Okay. And then you talked about the impact on revenue of the hurricanes in Q3. Do you expect it to have a similar impact in Q4? Gary G. Yesavage - Team, Inc.: I don't really think so, Adam. I – there might be some minor carryover, and I know, for example, one of our customers had a turnaround scheduled for fourth quarter. Not in a refinery, not along the Gulf Coast, and when that refinery was impacted at along the Gulf Coast, they pushed that turnaround out from fourth quarter to first quarter next year. So, you'll see some of that moving around, again from my Chevron days, we didn't want to have too large complex turnarounds take place during any one quarter because of the impact on corporate cash flow. And I think our large integrated majors take – our large integrated major customers have a similar approach where, hey, if we can move stuff around to minimize the cash flow impact, let's try to do that as long as we can continue to operate safely and reliably. Adam Robert Thalhimer - Thompson Davis & Co., Inc.: Okay. And I guess the question from me really is if revenue can be up in Q4, given that it would have been up in Q3 ex-hurricanes? Greg L. Boane - Team, Inc.: Yes, seasonally Q4 should be up over Q3, because you've got a full turnaround month in October, and potentially strong turnaround activity during the first part of November, which at sometimes can go all the way up to Thanksgiving as opposed to Q3 where you only had September. So, sequentially, we would expect revenues to be up in Q4 just on a normal seasonal basis. Adam Robert Thalhimer - Thompson Davis & Co., Inc.: All right. Then, last, I mean, I'll turn it over, but just curious, what was the impact to margins in the quarter from the storms and what kind of improvement could we see sequentially on the margin front without the storm impact? Greg L. Boane - Team, Inc.: The impact on the margins of the $14 million revenue impact was about $7 million. Adam Robert Thalhimer - Thompson Davis & Co., Inc.: Okay. Great. Thanks. Gary G. Yesavage - Team, Inc.: Thank you, Adam.

And our next question comes from Craig Bibb of CJS Securities. Your line is open.

Hi. Good morning. It's Pete Lukas (48:07) for Craig. Just a follow-up question. I think you mentioned that your EBIT margin goals were around 10%. I just want to make sure I understood that correctly, would that be in the current low turnaround environment that those would be the goals and if so what would you expect or like to achieve for a more normal demand year? Greg L. Boane - Team, Inc.: I think, big picture we have an overall goal of moving our profit margins up towards 10%. We've been running single digits for quite some time. Our performance improvement, cost reduction initiatives are all with a mindset of getting back to a double-digit profitability, but at this time, we don't have a specific timetable for that because it's too early in the Phase 2 project. We don't have a specific execution plan and timetable laid out, but that was just a general comment about our overall goal to get back to double-digit profitability. Gary G. Yesavage - Team, Inc.: And, Pete, (49:17) I can add that when we did that branch review internally, that was – if you had a branch performing below 10% that was what got you onto the radar screen, my radar screen. And for a branch to say, hey, we'll be above 10% when this particular project goes to the field, having a branch where you're above 10% for one year out of five we have to have a serious internal discussion around the liability of that part of the business. And so we're going to be very focused on those branches that cannot meet that 10% EBIT target.

And so a follow-up, would we expect then, or I guess, you said all things are on the table, so could it be possible we see some more branch consolidation going forward? Gary G. Yesavage - Team, Inc.: All things are on the table.

And last one from me. Furmanite had a much improved Q3 versus Q2. Could you kind of go over what changed, and is that sustainable going forward? Gary G. Yesavage - Team, Inc.: So I would just add, before Greg has something he wants to add as well. But I think we are – we have a collective sense of urgency is that their business results are not acceptable. And as I've mentioned in my comments, there's been a lot of hard work underway, and I don't want to leave you guys with the impression that Alvarez & Marsal is going to be the savior to all of our ills. We've got a lot of work to do and a good portion of that work has been underway and people are making changes and improvements to look at where we could eliminate costs from the business. Greg? Greg L. Boane - Team, Inc.: Yeah, I would agree with that. Just generally speaking, there were more moving parts related to the integration of the legacy Team and legacy Furmanite businesses. There is just a little more complexity with respect to their business structure compared to the TeamQualspec segment. And I think that the team there has started to get some traction on their strategic initiatives related to business development, manufacturing efficiency, and other operating performance improvement initiatives. Those things are starting to get some traction on the TeamFurmanite side and that's why we saw some improvement in the third quarter.

Greg, very helpful. Thanks. Gary G. Yesavage - Team, Inc.: Maybe just one more comment, as Greg was talking, it came to my mind. We really did not have a proactive sales approach in our business. We waited for people to call us and then we responded. The guys especially on the mechanical services side have recognized that and are trying to get ourselves, we're hiring people that have sales experience. Again, as I mentioned in my comments, how do we want to go to market? And so I think that effort has been primarily driven by the focus on the mechanical services side. And I think that's part of the reason that we're seeing the revenues tick back up towards where they were historically.

Great. Thank you very much.

Our next question comes from Tom Radionov of Corre Partners. Your line is open. Tom Radionov - Corre Partners Management, LLC.: Hey, guys. Thanks for taking my questions. Gary, I have one for you. So as you were going through this review process with A&M, and at the same time you're looking for a permanent CEO replacement. Just kind of curious, when you hear back from A&M? Are some of the decisions in terms of any incremental cost cuts or anything else on the strategic front going to be made by you or is this something that is more likely to be done by whoever else ends up replacing you at some point down the road? Gary G. Yesavage - Team, Inc.: So Tom, I'm going to need to use my judgment. If I see something that's a no regrets kind of decision, then we're going to go ahead and do it, and we need to improve the performance of our business sooner rather than later. So I don't want to sit and wait until a new person is on board. But if there is something like a complete redesign of the organization, then I would say, hey, we're going to let the new person weigh in on that. But if it's pretty straightforward, hey, we can reduce costs by doing X, then we're going to go ahead and do it. Tom Radionov - Corre Partners Management, LLC.: Okay. Got it. That's helpful. I guess my other question is on your covenant situation. So as you get closer to Q1, it certainly seems possible that you may have to deal with the banks and ask them for some concessions. Have you already started having some of these conversations so you can understand what they may ask you to do or is this something that you're more likely to do towards the end of the year, early next year? And obviously to the extent, you are having conversation just kind of curious for any sort of feedback or thoughts? Greg L. Boane - Team, Inc.: We have dialog with the banks throughout the course of the quarter. Our primary point of engagement is with the lead bank and syndicate. We met with them a couple of weeks ago and had some dialog with respect to, what's going on right now, what we're doing relative to the Phase 2 cost reduction program and basically the agreement with them is, is we're going to get back together after the fall turnaround season is completed. At that point, we'll have better information related to how the fall turnaround season ended up. And at that point, we will also have better information relative to the execution plan and timetable and savings opportunities on the Phase 2 program and those two pieces of information would be very, very helpful to the bank in our discussions that we plan to have with them in December of this year. Tom Radionov - Corre Partners Management, LLC.: Got it. It was helpful. Gary G. Yesavage - Team, Inc.: So, okay, Pete, (sic) [Tom] I... Tom Radionov - Corre Partners Management, LLC.: Yeah. Gary G. Yesavage - Team, Inc.: Pete, (sic) [Tom] I was involved in that meeting and it was an opportunity for me to meet the key leaders from that lead bank and we basically went through the same story that we shared with you guys this morning. My personal take was that they were very comfortable with the direction we're taking with respect to an outside perspective coming in and looking at our business or our commitment to follow-up on the findings. My take was that they want to work with us. They like what we're doing, and what I don't want to do is wait till late March and then we're running around. So as Greg mentioned, we met with them in October. We're going to meet with them in early to mid-December, meet again in January and chart our path forward. So that it's transparent as possible, and we're not in a last minute kind of situation running around, trying to make something happen. Tom Radionov - Corre Partners Management, LLC.: Okay, that actually is very helpful color. I appreciate it. And I have one last question. Given October, and obviously, November are very important in terms of your turnaround season. There have been some deferrals outside of the Gulf Coast that others have talked about. What is your experience so far in terms of what you have seen from your customer base vis-à-vis some of these deferrals? And is this something that we should expect to be somewhat meaningful in terms of your overall Q4 performance or are the sort of the – is the impact from those potential deferrals somewhat more benign so far? Gary G. Yesavage - Team, Inc.: Pete, (sic) [Tom] I think you're going to see a mixture of both. Some – yeah, there will be some deferrals. But the example I gave to you about that one Upper Midwest refinery, there will be more spend in the Gulf Coast refineries. And so, any deferral, I think, will be offset by increased work in those facilities that were impacted by floodwaters. Tom Radionov - Corre Partners Management, LLC.: Got it. Okay. Thank you very much, guys. I appreciate it. Good luck. Gary G. Yesavage - Team, Inc.: Thank you.

And I'm showing no further questions at this time. I would now like to turn the conference back over to Gary for closing remarks. Gary G. Yesavage - Team, Inc.: Well, thank you all for your interest and your questions. I can commit to you that we're going to get better. As I mentioned, there is a lot of good people in this organization. The analogy I've been using internally is we've got a lot of really, really good musicians. But we need leadership to orchestrate those musicians, and so we're going to do that. I'm confident that we're going to get better. The time that I'm serving as interim will help me ask better questions when we go through the interviewing process for the permanent CEO. I now have a better feel for what that person – what that person's characteristics and strengths should be. And so I think that will help us make a better decision. I will be a better Board Member as a result of this time in the chair, because I've kind of seen under the tent now and understand where the works are and what we need to do to get better. So, I can tell you that going back to work was not on my bucket list of things to do. But, I have an understanding wife, and I'm going to do the best job I can for however long I'm in this chair. And we will get better on a go forward basis. So, thank you guys for your interest in our business, in our company and we'll talk to you at some point in the future.

Ladies and gentlemen, this concludes today's conference. Thank you for your participation and have a wonderful day.