Team, Inc. (TISI) Q4 2011 Earnings Report, Transcript and Summary

Welcome to the Team IR Call. My name is Sandra, and I'll be your operator for today's call. [Operator Instructions] Please note that this conference is being recorded. I will now turn the call over to Mr. Phil Hawk, CEO. Mr. Hawk, CEO, you may begin.

Thank you, Sandra. Good morning, everyone. It's my pleasure to welcome you to the Team Web Conference Call to discuss recent company performance. Again, my name is Phil Hawk, and I'm the Chairman and Chief Executive Officer of Team. Joining me again today is Ted Owen, the company's Executive Vice President and Chief Financial Officer. The purpose of today's conference call is to discuss our recently released financial results for the company's fourth fiscal quarter and full fiscal year ending May 31, 2011. As with past calls, our primary objective is to provide our shareholders and potential shareholders with an enhanced understanding of our company's performance and prospects. This discussion is intended to supplement our quarterly earnings releases, SEC filings, as well as our annual report. Ted will begin with a review of the financial results. I will follow Ted, with a few remarks and observations about our performance and prospects. Following our remarks, we'll take questions from our listeners. With that, Ted, let me turn it over to you.

Thanks, Phil. First, as usual, I want to remind everyone that any forward-looking information we discuss today is being provided in accordance with the provisions of 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. Accordingly, 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. Now for the financial results. I am pleased to report record revenues and earnings for both the full year and for the quarter. For the fourth quarter, net income was $10.8 million or $0.53 per share on revenues of $162 million, which included $7.7 million contributed by Quest Integrity Group, which we acquired, you will recall, in November 2010. For the year, total revenues were $508 million, which included $15.8 million of revenues from Quest. And adjusted net income was $25.2 million or $1.26 per share; again, a record for Team. On an organic basis, excluding the effect of the Quest acquisition, revenue growth was 23% for the quarter and 8% for the year. On a GAAP basis, earnings for the year were $1.32 per fully diluted share, which includes the benefit of non-routine tax credits that were recorded in the third quarter and that we discussed in last quarter's earnings call. Now with respect to some cash flow-related items, capital expenditures were $13 million for the year, depreciation and amortization was about $15 million and non-cash compensation was $5 million. So adjusted EBITDA for the year was about $63 million. At May 31, our total debt was $76 million, cash was $14 million and thus, net debt was $62 million. Our net debt-to-EBITDA was about 1:1. Additionally, we're pleased to report that we have renewed and extended our now $150 million revolving credit facility to mature in July of 2016. Our thanks to our bank group for their continued support and confidence in us. With that, Phil, I'll turn it back to you.

Thanks, Ted. Now I'd like to provide some additional perspectives on our recent performance and outlook. I will briefly touch on fourth quarter performance and then use the bulk of my comments to discuss and review our performance and progress throughout the entire year. I'll wrap up with a few comments about our expectations for the current fiscal year 2012. To the fourth quarter, the first kind of reaction is wow. As Ted indicated, in the recently completed fourth quarter, Team achieved record performance in a number of dimensions. Quarterly revenue was $162 million, up 29% from prior-year level and our highest level ever to date. Excluding the impact of the Quest acquisition earlier in the year, organic revenue growth was 23%. Operating earnings were $18.7 million also a new record for Team and up more than 70% from prior-year levels. EBIT margin as a percentage of revenue, increased more than 3 percentage points to 11.6%, and net income of $10.8 million or $0.53 per share was also a new record for Team. To summarize the quarter, Team achieved significant revenue growth across virtually our entire service network. Further, strong projects execution, attractive field labor utilization levels and effective cost management enabled Team to achieve attractive profit growth leverage in the business. I was pleased with our performance in virtually all respects. While it may be tempting to dwell on this outstanding quarter, as always, I am cautious not to draw too many conclusions from our performance in a single quarter. Because of the natural lumpiness of our business, a full year perspective of our business and performance is more representative of where we are, and as a consequence, is more helpful. Shifting to full year performance. Similar to the fourth quarter, we achieved record full year performance levels in a number of key areas. For the first time, Team's annual revenues exceeded $500 million, up 12% overall and about 8% organically. The sources of Team's revenue growth were broad-based. Team's U.S. business grew organically about 10% for the year, Canadian business grew approximately 7% for the full year. Our European business grew at a 12% rate this year. Our business in the Caribbean and South America areas declined, due principally to weak conditions in Venezuela and the presence of major project work in the prior-year comparative period. All of our service lines grew during the fiscal year. The onstream mechanical and inspection services grew in the 5% to 10% range. Turnaround services grew more rapidly, approximately 15% to 20% on average, reflecting stronger industry turnaround activity. Similar to our fourth quarter performance, we achieved attractive profit leverage on our business growth. Total operating profit during the year was $43 million, up more than 50% from the previous year. Operating profit margin as a percentage of revenue increased more than 2 percentage points to 8.6% for the year. Overall, our operating leverage on revenue growth was about 27%. Excluding the impact of Quest, organic operating leverage was well over 30% for the year. This attractive operating leverage was accomplished by maintaining our job margins near prior-year levels and effectively managing both our indirect and SG&A costs. Let me add a couple of comments about Quest Integrity Group, the exciting new business that we acquired in November 2010. As a reminder, this business expands Team's service offering in 2 exciting areas: advanced engineering assessment services and in-line inspection of critical assets, such as heaters, unpickable pipelines and process piping. When we purchased Quest, it was our belief that Quest had good growth opportunities in both service areas with or without Team. Furthermore, we believe that there were additional attractive growth opportunities available through the combination and integration of the Team and Quest services into more comprehensive, integrity and reliability management service offerings for our customers. Seven months into the transition, we continue to be enthusiastic about Quest and its impact on our business. First, Quest continues to grow and perform in line with our expectations. While we did not own Quest for the full fiscal year, Quest organic growth during that full fiscal year time period was 31%; obviously, very attractive. Second, Team and Quest have launched joint initiatives aimed at bringing a more integrated service solution to our customers in tank inspection and maintenance and pipeline integrity management. While it's early in the process, we believe we are exploring new solutions in a very fertile market area. All major customers have an interest in developing and maintaining the most robust integrity and reliability management programs possible. All in all, Quest and Team are off to a great start together. Now let's shift to the year ahead. We expect to continue to build upon the strong business momentum generated in the past year. As has been our practice for the past several years, we will provide full year guidance that we will review and update as appropriate, at least on a quarterly basis. For our fiscal year 2012 ending next May 31, we expect total Team revenues to be between $550 million and $575 million. We expect our full year earnings to be $1.45 to $1.60 per fully diluted share. Let me wrap up my remarks with a couple of final comments before we take your questions. All of us at Team are extremely proud of our performance in the recently completed fiscal year. We are pleased with how we worked through a difficult recession over a prior 18 months and returned to the attractive revenue and profit growth mode. We also fully understand that this is not the time to relax or to rest on our laurels. First, we continue to have outstanding growth opportunities in virtually all service lines and in all geographic regions, both within North America and beyond. Second, we have demonstrated we can capitalize on these growth opportunities. Despite the recent recession, Team has grown its revenues in 9 of the last 10 years. We have grown at a double-digit rate in 7 of the past 10 years. Our outlook and opportunities are as attractive as they have ever been. To realize the growth opportunities available, we need to continue to stay focused on the basics of our business: providing great service with every service opportunity, continuing to capitalize on our service network advantages, creatively expanding our service capabilities and the value we can deliver to our customers, balancing our resources with current activity levels and conducting our business all of the time in all activities in a manner that fosters pride from all Team colleagues and respect from our customers. In my view, that is how great organizations are built and sustained. That concludes my remarks. Let's now open it up for question. Can I turn it back you, Sandra?

[Operator Instructions] The first question is from Matt Duncan from Stephens, Inc.

The first question I've got is just kind of focusing in on what you think drove the strong results this quarter. Did anything stand out as being stronger than the rest of your business or was the strength pretty broad-based across all service lines of geographies?

I think the latter is really the operative observation, Matt. If you look at all the regions where we kind of try anything with our regional Vice Presidents and kind of business units, we have 17 business units. 13 of those 17 achieved double-digit revenue growth in the quarter. Having said that, we had a huge turnaround in Canada, to be sure, particularly Western Canada where we had significant growth and it's kind of what we've been expecting, but kind of really the, I guess, the revitalization or the expanded, extended, increased activity in the tar sands area in particular. So that was stronger than most areas in the quarter but again, it was just broad-based growth, we think.

So how big was that particular turnaround project?

It wasn't a project. It was multiple projects. It just reflects, I think, increased activity in the area.

Okay. That's helpful. Looking forward, I know you guys don't give quarterly guidance, but I want to make sure we're thinking about the flow of the year correctly. From what we've been able to gather, it sounds like the turnaround schedule for next spring is very, very healthy. People are already getting booked for work. But the fall may be a little bit softer. Is that a fair way of looking at it?

I'm cautious about kind of making proclamations about when is a weak quarter or a strong quarter, to be honest, because it doesn't always turn out the way we expect it to be. What I would say is that we kind of, because of the kind of return to kind of healthy profitability for really all the sectors that we serve, I'd just say that what we saw this spring and what we look forward to is normal operating conditions for the industries that we serve, so we expect there to be attractive opportunities both in the fall and the spring and we're ready to take advantage of that. So I would be cautious about saying, well, we're going to have a weak first half, strong second half or vice versa. Our expectation is we're going to kind of go get what there is to get and we're optimistic for the whole year.

Okay. And last thing, I'll hop back in queue. Can you talk about pricing? Are you beginning to see any willingness from your customers to take price increases as it looks like labor is starting to get tighter?

I think there's certainly more conversations about it than there were a year ago. I would just say that we're in a competitive business and I don't -- the notion that it's good old days and price doesn't matter anymore, that certainly wouldn't be the case.

The next question is from Matt Tucker from KeyBanc.

When you take into account that this was a record quarter for you guys and with the backdrop of crack spreads having been at very high levels for a few months now, really close to where they were in the past cycle, could you kind of compare where we are today versus the kind of peak of that last cycle?

I think, obviously, the operating environment for customers, generally, is I think comparable. I think it's very attractive right now, at least, I believe for virtually all the segments we serve. So that's a huge -- I think, a favorable comparison to both periods. I think what is different is the level of new capacity additions and development are not what they are -- are today not what they were, say, 3 years ago.

So I guess in the past, you’d talked about maybe 10% to 15% or so of revenues, kind of coming from more discretionary or capital-type spending. Are you getting back to that level or are we still not really there yet?

I haven't really done an analysis of our revenues from the start, Matt. But my suspicions are we're still light of that.

Okay. And then when you look at the guidance for fiscal year '12, the midpoint of the revenue guidance suggests kind of 11% type growth. Could you talk a little bit about what's going to drive that? Is it continued improvement in the environment? Is it market share gains?

I think it's market share gains broadly. I think the environment, we’re not projecting really further improvements in the environment. Again, we're a relatively low-growth industry as we have talked before. But we are expanding our capabilities, we mentioned Quest. We've got several kind of enhancements to service lines that are continuing to develop and evolve, and we're trying to earn more of it. So pretty much, like I said, this is not new territory for us, but we kind of manage our business and expect to keep increasing our presence and penetration in the markets we serve and that's what we see in the year ahead.

Great. Just one more, I'll jump back in the queue. When you think about the growth this quarter, we heard about customers having to catch-up on a lot of the maintenance activities, they’d kind have been pushing out over the past couple years. How kind of far along are we in terms of the customers catching up on that? Is that going to continue to make the next couple turnarounds? Are turnaround seasons pretty strong, or are they kind of getting caught up and they're going to be kind of back to more normal levels going forward?

I'm very humble about proclaiming any clear insight and in depth perspective on what drives revenue in a very short period like a quarter. So I don't know. I can't say that I can explain exactly everything that happened in the past quarter, or certainly what will happen in the future quarter. I think it's reasonable to say though that we're now in a normal period and any leads and lags that kind of took place as a result of the recession, I think, is pretty much behind us. So that would be my point of view.

The next question is from Arnie Greener from CGS Securities (sic) [Arnie Ursaner from CJS Securities].

It's Arnie Ursaner from CJS Securities. I want just to go back on the question, the cracks spread were unusually high, and normally you would have seen customers defer maintenance. Is this another indication that, that process has been going on so long that they really can't continue to do that?

I think that's certainly a reasonable speculation, but I really don't know.

Okay. Quest provides a lot of more technological solutions for you at least versus some of your competitors in the way they package the work you do. So a couple of questions related to Quest, are you seeing more growth in the higher end technological solutions? Or is the market growth similar but you're gaining share from some of these competitors by having a fully competitive alternative?

I think it's absolutely growing more rapidly. And I think what I would say is that what -- and not just Quest, but as an industry, what we are doing is creating new solutions that are now technologically feasible that weren't heretofore feasible. So that's where I think the exciting kind of journey is here and some of the opportunities. As we combine Quest and Team kind of services, what we're offering is not something similar to someone else, but something completely new and more comprehensive. That again, we are optimistic that customers will find very attractive and helpful as they kind of pursue there. What we are absolutely clear is their strong desire to have very robust integrity and reliability management programs.

Okay. Regarding your revenue guidance for the following year, I'll ask it in 2 different ways but it gets to the same point. Either what is your organic growth expectation or alternatively, what incremental revenue contribution do you expect from Quest in your revenue guidance?

I think what we've done is basically rolled a kind of a full year effect of Quest into the revenue number, and it's roughly high single-digit kind of guideline. I think it's probably 8% to 10%, if you look at the range on the revenue guidance.

The next question is from Rich Wesolowski from Sidoti & Company. Richard Wesolowski - Sidoti & Company, LLC: Would you guys mind diving a little deeper into Quest's in-line inspection business, specifically whether you beefed up the sales force in that area, or rather if the growth that you're looking for in 2012 and '13 is just based on market demand?

I think actually, with regard to the kind of sales or marked business development capabilities of Quest, they have been consistently or they've been ramping up their capability even prior to our purchase of them in November as they're kind of ramping up there to get full or fuller penetration of their services. But very honestly, in the in-line inspection business, we are just a, such a tiny, tiny part of the total market today that we're just getting started. So I guess we're gaining share but this is not about a market growth situation at all, this is just kind of ramping up and expanding our presence with a pretty interesting capability. Richard Wesolowski - Sidoti & Company, LLC: If the system operators or the plant operators are not using a Quest device, what is the main alternative method or methods that they use to inspect these more smaller surgical pipelines?

Well, it's not to say there are no other competitors, but the alternative to in-line inspection, if you go to, particularly in a state that’s kind of the largest or most active segment today, which would be heaters in a facility, the alternative would be a manual and external inspection of the asset. Richard Wesolowski - Sidoti & Company, LLC: Do you find that potential customers are reluctant to try something that seems pretty radical relative to what they're doing in the past?

No. I think they're quite interested in trying things. The difference is, is that you get about 1,000x or maybe it’s 100,000x more information from an in-line inspection tool than you get from a manual external tool, so what you have is much greater -- when that data can be turned into information analysis, you have a much greater understanding about the physical condition of the asset. And then make – these are expensive assets, so you can make -- avoid kind of premature retirement of kind of perfectly fine assets, but also avoid running an asset past its kind of safe operating levels and risking a leak or in-line or onstream failure, which again, are extremely expensive and potentially catastrophic. Another testing method by the way, particularly as it relates to pipelines, to the in-line tool would be hydro-testing. But again, the problem with that kind of approach is it will tell you at that moment in time whether or not there's any leaks or whether or not the pipe will withstand the pressure, the operating pressure, whatever the pressure that's applied during the testing. But it doesn't tell you about tomorrow or kind of rate of degradation in terms of pipe condition, which again, is the insights that you get from an in-line testing capability. Richard Wesolowski - Sidoti & Company, LLC: Very helpful. Is there any opportunity to use the experience you’ll accumulate in the other side of Quest business, the engineering assessment, to potentially add that service to some of your traditional TCM branches?

Well, in fact, these combined services that we're talking about with regard to tank assessment and maintenance as well as pipeline integrity management, both absolutely use that advanced engineering assessment capability. So for sure, there's a linkage. Now just as a reminder, the advanced engineering assessment capabilities of Quest are not kind of like other Team field services. Approximately, more than 1/2 the staff of this group will be kind of engineers and scientist. Many, many of those are PhD's, so these are the intellectual leaders in kind of damage mechanisms throughout the world, in terms of understanding damaged mechanism. So it wouldn't be that we would put them in Team branches, but I think we would coordinate their capabilities and services in a more comprehensive way with the services, kind of the measurement services of inspection service that we offer at our Team branches.

The next question is from Adam Thalhimer from BB&T Capital Markets. Adam Thalhimer - BB&T Capital Markets: First question here, Phil. You said that the outlook and opportunities are as attractive as ever. What are the secular themes that you see driving your business over the next couple of years?

I think if you get to the highest levels, these are the same structural advantages and scenes that we've seen for the last decade. We have a stable demand, highly fragmented industry, highly fragmented competitor environment and with a high focus on kind of value added or high interest in value-added services from our industry. And our very large service line offering, our large, diverse service presence geographically are all significant structural advantages worthy of vis-a-vis moms and pops. And what we now believe is we're kind of through the recession, at least in our industries, in our customer industries, and see basically a fairly stable outlook. Now you add aging infrastructure, clear desire and interest to kind of maintain assets in a highly responsible way, I think all of those things are favorable to our space and favorable to the larger more professional service providers in it. And again, the last point I would make is our current market share, really, in any of our service lines is small. In aggregate it’s, in North America, we think it's no greater than 20%. So with large, stable demand for services, a lot of favorable fundamentals, kind of my view is, if you execute well, given the hand that we have, that we have very, very attractive opportunities much like we've had, really, for the last decade, at least. Adam Thalhimer - BB&T Capital Markets: Great. And my other question was the second-largest in market for you, petrochem, what's going on in petrochem? Are we seeing domestic capacity expansion there?

I think so. Actually, I think this is really an exciting area for America. This is my opinion. I began to get better understanding from others more closer to this area is that the whole shale gas trend in North America, what comes with shale gas are entrained liquids. Those liquids become our alternative feedstock to the Petrochems, the other feedstock being kind of offtake from a refinery. Because of the abundance of the shale gas and shale gas liquids, what we see in the market today is dramatically lower feedstock, or I guess, feedstock prices for chemical plants from the shale gas source vis-a-vis the refinery source. By the way, the refinery source is the principal source of feedstock for the rest of the world. So what we're seeing now and you see some announcements of several new ethylene crackers and some of those things are all related to the premise, I believe, and at least has been explained to me, that we will have sustained feedstock, lower feedstock costs from shale gas for these U.S.-based chemical manufacturing kind of sources, vis-a-vis the refinery offtake. That's got to be really good for our country. And I'm aware of 4 new kind of capacity expansions that have been announced and we might see stuff coming downstream of that as well. So again, current margins are strong, weak dollar helps for exports and all that, but I think a fundamental cost advantage on feedstocks would be a tremendous advantage to the U.S. petrochem business. And there seems to be a lot of premise. There are perspectives that, that not only is the case today, but it's going to stay that way for a very sustained period. Adam Thalhimer - BB&T Capital Markets: And so you mentioned hydro-crackers, I think I heard Valero talk about that yesterday, they’re building a bunch of those right now.

I really, I don't know about hydro-crackers that Valero or anyone else that might be building. But I was really speaking the ethylene crackers, which is in the petrochem area. Adam Thalhimer - BB&T Capital Markets: And you can play -- you have some role in the construction of those?

Sure. With inspection, heat treating, field machining, volting, those kinds of activities. But a bigger market for us will be the maintenance of those once they're up. Adam Thalhimer - BB&T Capital Markets: How about M&A?

How about it? Adam Thalhimer - BB&T Capital Markets: What's the thought process there?

No change than in the past. Again, we continue to believe we have very attractive organic revenue growth opportunities and we're focused on those and those are things that we can really control ourselves. Having said that, if we can accelerate our growth attractively, in ways that we couldn't do organically, either new capabilities like Quest, new geographic areas, if you look at LRS, A-TECH would be examples of that. We're receptive and interested, so we continue to kind of look at the opportunities and if one kind of fits the criteria, and is an attractive addition to our capabilities and prospects we’ll pursue it. But again, there's none embedded in our guidance or forecasts for this year. Adam Thalhimer - BB&T Capital Markets: And the last question for me is for Quest, what diameters can you expect today and remind us what's on the drawing board for, I think going the larger.

I believe we're up to 12 to 13 inches in diameter. 14 inches right now and we have plans to go larger. So I think it would be just in kind of units. I believe the next set of tools will go up to 20, but I wouldn't say we'd be stopping at that point.

The next question comes from Craig Bell from Enericap Partners.

Phil, you were talking about sort of what was driving your business. I guess this relates to both what happened in the fourth quarter and then also with your guidance. As you look at it, I mean what do you think of the -- is the big thing, is it really the demand side or is it pricing? Or I mean it doesn't sound like you're talking about huge share gains at the moment.

I think what we had is a very active environment in the fourth quarter. And like I said, just I'm a little cautious to draw or to certainly extrapolate from a single quarter because, obviously, it was a very, very strong quarter. I will remind everyone that, those of you who don't follow us closely, we had a correspondingly weaker quarter in the third quarter, so it kind of is a little bit lumpy. But we had -- there was more activity, just industry-wide, we believe. Did we gain some share? We might have but I certainly don't have a perception that our competitors are without work or are without opportunity either. So I think if we gained some share, it was kind of, was just of the incremental variety, I would say. I would not suggest though that pricing was a big part of the revenue growth. Again, while there might be some mix effect a little bit here or there, or some incremental pricing adjustments kind of in view of kind of cost increases or wage rate increases, it's modest.

Okay. And then secondly, is that your debt level without the little bit of cash, down a little bit during the quarter, I mean, is that just a timing issue on that?

Sure, because you have, I think, if you go quarter-to-quarter, do you have, let's see -- yes, we're up $50 million in revenue quarter-to-quarter so you can appreciate what our accounts receivable went up.

Yes. Craig, our biggest investment is accounts receivable by far, so there will be a natural flow of debt and receivables on a quarterly basis as our business grows in the second and fourth quarter and then contracts a bit in the first and third quarter.

[Operator Instructions] Matt Duncan from Stephens, Inc. is back online with a question.

How big is your tech force currently?

I'm sorry. Repeat the question.

How big is your technician group currently?

Our total -- I'm not sure I have a tech number here right in my fingertips. The total workforce is 3,500. We increased our field technician force about 300 in the fourth quarter. So it was a nice kind of a ramp-up year.

Are those people that are going to stay on or were those just your typical sort of temporary seasonal additions?

No. They were actually our permanent additions. I now have the number, the field personnel at the end of the quarter were 3,250 roughly. And again, we are up about 300. About 100 of those were in the U.S. and another 200 were in Canada, again, reflecting that significant ramp up of our activity, particularly in the Western part of the country there. But I think for the year, we're up about 400 in terms of field techs.

What are your plans for that group in fiscal '12?

I think it's -- I don’t know that we have any kind of high level plans from corporate. What we would expect is that our tech counts will continue to grow with our business, just as they have done. By the way, we had a -- we continued to refine and improve our processes related to kind of the bringing in, qualifying and bringing in contract personnel to supplement our full-time people. And we were very pleased with the, kind of our ability to attract a lot of contract personnel to supplement our full-time personnel particularly in the fourth quarter. That's what made those kinds of revenue growths possible. We could flex our capacity pretty substantially.

Okay. And then a couple of housekeeping numbers items. You gave us the revenue growth by geography for the year, do you have that for the quarter by any chance?

I don't have it. I don't have it right in hand. It was in...

Nor do I. I can get that for you.

It was like I said, it was significantly higher in Canada for the quarter than the U.S. but it was kind of attractive everywhere.

Okay. And then last thing on Quest. Was it accretive to your earnings in the quarter and, if so, by how much?

Yes, it was.

But we don't disclose the -- Quest is just part of TCM group, Matt, so we don't disclose separately the operating profit contribution of that group.

Yes. I think we kind of guided it would be about flat for the year and probably was $0.01 or so for the full year.

And Matt Tucker from KeyBanc is also online with a follow-up question.

Just a follow-up to the regional growth in the quarter. Obviously, Canada was strong. Would you say that the U.S. and Europe were at least up year-over-year as well?

Yes. Significant double-digit growth both places.

Great. And then you talked last quarter about, I believe it was a large turnaround that had been scheduled for the third quarter getting pushed into the fourth. Can you kind of give us a sense of what the impact was in the fourth so we can get a better sense of maybe what the run rate would have been?

I really -- I think, I just resist kind of looking at individual project and kind of trying to do much with it, Matt. I guess the point I'd make is that 13 out of 17 regions had double-digit growth in the quarter. So obviously, a project didn't affect -- if it affected a region, and it might have affected 1 region, but it didn't affect the rest. So I just don't think that's directionally the conclusion one might draw that, that affected it much.

Okay. And then just in terms of the turnaround activity in Canada, would you say that, that is somewhat repeatable going forward in subsequent turnaround seasons? Or was that somewhat due to -- it was somewhat coincidental that a lot of turnarounds happened to be scheduled for this spring?

You will always have natural lumpiness, but no it was not a one-off environment up there that it was done and now won't be repeated. I think what we have is increased level of activity that we didn't expect to be sustained.

[Operator Instructions] At this time, there are no further questions.

All right, Sandra, then I'll wrap up the call here. I want to just thank everyone for your participation in this call and your continuing interest in Team. We look forward to updating you on our progress during this first quarter of our new fiscal year around the 1st of October. In the meantime, everyone, have a good day.

Thank you, ladies and gentlemen. This concludes today's conference. Thank you for participating. You may now disconnect.