Good day, ladies and gentlemen, and welcome to the Team, Inc. Fourth Quarter 2017 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 be given at that time. [Operator Instruction] As a reminder, today’s conference is being recorded. I would now like to turn the call over to Mr. Don Bleasdell, Vice President of Finance. Sir, you may begin.

Thank you, Victor. Welcome everyone to Team, Inc’s fourth quarter and fiscal year 2017 conference call. With me on today’s call are Team’s new Chief Executive Officer, Amerino Gatti and Greg Boane, EVP and Chief Financial Officer. This call is also being webcast and can be accessed through the audio link under the Investor Relations section of our website at teaminc.com. Information recorded on this call speaks only as of today, March 14, 2018. Therefore, please be advised that any time sensitive information may no longer be accurate as of the date of any replay. Before we continue, I'd like to remind you that this call contains forward-looking statements made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements of expectations, future events or future financial performance. Forward-looking statements involve inherent risks and uncertainties and we caution investors that a number of factors could cause actual results to differ materially from those contained in any such forward-looking statements. These factors and other risks and uncertainties are described in detail in the company's annual report on Form 10-K and in the company's other filings with the Securities and Exchange Commission. The company assumes no obligations to publicly update or revise any forward-looking statements. I would now like to turn the conference call over to Mr. Amerino Gatti. Amerino?

Thank you, Don and good morning, everyone. I appreciate you joining us today to review our fourth quarter and full year 2017 results. Later in my call, Greg will provide a more detailed financial commentary before we take questions. First, I'd like to take a minute to thank Gary Yesavage for his tenure as interim CEO of Team. I was able to get to know Gary during the interview process and he served the company extremely well over the past four months. Gary stabilized the business and accomplished a lot in a short period of time. I appreciate his continued support and insight as I transition into this new and exciting role. Gary will continue as a member of the board. I'm honored to have the opportunity to lead an outstanding team, as we begin a new chapter for Team Industrial Services. Having worked at Schlumberger for more than 25 years, I held field operations, engineering and human resources positions and served in a variety of roles of progressing leadership responsibility, including President of Well Services and most recently, President of the Production Group. In that time, I've been able to gain a deep understanding of how to lead people and manage successful businesses around the world. Given this is my first earnings call with Team, I want to share some insights from my first six weeks. First, safety and quality. We are committed to achieving the highest standard of safety in the industry. Improved safety performance is a key objective in 2018 and all employees in the incentive program from the executive level down to the branch operations will carry this goal. Second, improving our operating performance. We will continue to instill a strong culture of management discipline and accountability, while stabilizing and improving our overall business performance. We…

Thanks, Amerino. Good morning. As Amerino stated earlier, Q4 ’17 was our strongest quarter of 2017 with the highest revenues of the year and the highest adjusted EBITDA since Q2 2016. Two additional highlights in Q4 relate to our credit facility. The senior secured leverage ratio improved to 3.5 times EBITDA and just recently the credit facility was amended to exclude the total leverage ratio for the remainder of its term, which is through July 2020. Moving on to the results of operations for the current quarter. As previously disclosed, we implemented a cost reduction program that began in July 2017. For the discussion on Q4 ’17 results, I'll provide sequential comments on current quarter activity versus Q3 ’17. I think the best approach is to discuss what’s happened sequentially from Q3 ’17, as we continue to focus on financial performance improvements. Consolidated gross margin in the current quarter improved sequentially to 26% from 24% in Q3 ’17. Sequentially, Q4 ’17 revenues increased 31 million or 11% over Q3 ‘17. Gross profit increased 13 million sequentially. Q4 ’17 included a non-cash inventory charge of 3 million related to the transition of several legacy systems to the New ERP system coupled with a more detailed physical inventory count process at year end 2017. Excluding the inventory charge, Q4 ‘17 gross margin would have been 27%. Consolidated SG&A expense for the fourth quarter was 83 million and includes roughly 9 million of other items that I will discuss in a moment. Adjusted SG&A expense for Q4 ’17 was 74 million. We expected in Q4 ’17, SG&A to be around 79 million. The primary component of the decrease is the final calculations for 2017 incentive compensation. While we had adjusted our payout estimates during the course of the year, there was an additional…

Thank you, Greg. In closing, we were encouraged by our latest results and although we have a lot more work to do, we intend to leverage our improved fourth quarter performance combined with the deployment of our One Team program to build a strong foundation for organic growth and a cost efficient organization. Our success will be driven by an enhanced focus on executional excellence to safety, quality and both operational and financial performance. At this point, I'll turn it over to the operator for our first question. Victor?

[Operator Instructions] And our first question comes from the line of Tahira Afzal from KeyBanc Capital.

Hi, folks and congrats on a good fourth quarter.

Thank you, Tahira.

I guess as a first question, in your prepared commentary, you mentioned that you’re assuming some marked improvement in to your outlook. Could you talk about how much confidence you have around that, because -- and to the extent the market ends up being more flat, how much sensitivity of how much of a backup plan you have to adjust for, if that’s the case.

Sure. So the indications we have from market assessments to date are, as I stated between 4% to 5%. We're actually planning from a non-field direct standpoint to maintain closer to a revenue -- flat revenue year-on-year. So that's around our support structures and a lot of our SG&A costs. However, on the other side of that, we are recruiting, training and certifying a lot of the field direct population to handle the increase in activity. So we're not baking in or we're not planning for an additional large growth year-on-year because we want to handle that on our quarterly robust rolling forecast model and make sure we get the fall throughs that that we expect on the growth in revenue.

And just as a follow up to that, as you see, it makes sense that the second phase is going to be a little more complex and we don't really see the benefits really showing through for the first year, but as you look into 2019, do you think those will be enough to drive your EBITDA margins at some point back into the maybe double digit, so on. Any kind of color on the timeline there and the free cash flow timeline into 2019 would be helpful.

Sure. So from a project standpoint as Greg and I both mentioned, we say front end loaded and in most transformation projects, in the first year, putting all the playbooks and processes and structures in place are necessary to gain the benefits following that first initial investment. So we do expect 2019 and 2020 to start showing significant improvements. Today, we haven't calculated amount by quarter, because we're still in the design phase. The estimated -- the bottom end, if you will, will be definitely higher than Phase one was and we will evaluate the project on a return on an investment standpoint as well. We’ll make sure that the project has the proper KPIs at each quarterly milestone to continue the investment. So we're going to get more color on that going forward in the next couple of months as we complete the design and move to deployment, but that's where we stand. So I can give you a bottom, but we're not prepared to go beyond that.

I mean I guess would we at least start to see the visible signs into 2019? Are investors sort of looking more at 2020 for really evidence on this second phase?

No. We'll start to see the improvements on both EBITDA as well as cash flow starting in mid-19.

And our next question comes from the line of Adam Thalhimer from Thompson Davis.

Just to know on demand if I can. What is your experience so far in Q1? Are you seeing any year-over-year growth?

Yes. We’re – we’re seeing – what we're seeing so far in Q1 is consistent with our expectations that Amerino laid out.

Yes. So, let me maybe shed a little bit of color on that. First of all, generally starting the new year and the new quarter, January starts off slow. We have a good visibility on the quarter when it comes to a lot of our turnaround and nested type projects. So that that’s in line with what our expectations are. We've been able to handle the field direct requirements from a resource standpoint, to handle that -- those increases, but at the same time, because the overall market is increasing in that range of the 4% to 5% plan, we are starting to see some tightness now when it comes to technician population, et cetera. So we're good on our project plans and turnarounds for the quarter into early Q2, but we're starting to see some stress now when it comes to the labor pool.

I'll just add one other comment. Quest can at times be lumpy, depending on their project scheduling. They had a record year in 2017. They have strong expectations in 2018. There could be some lumpiness in the first quarter related to some of their project activity.

And our next question will be from the line of Matt Duncan from Stephens.

So Amerino, I guess the big question I’ve got, I'm trying to get a little bit better handle around benefits of Phase two, sort of once it’s in place and I understand that until the plan is fully set, you don’t know the number and really until the changes are made, it's going to be hard to have an exact number, but if we're spending 30 million on these changes, you’ve said it's bigger than phase one, but that can mean a lot of different things. How much bigger? I mean, just in terms of the magnitude of things, how much bigger? I mean just in terms of a magnitude versus phase one. Once all of these changes are in place, how much cost do you think will have come out of the business?

So, Matt, let me explain a little bit on the three pillars because obviously I can't give you today an exact number. I understand the return on investment question, but first of all, from a revenue standpoint, when we talk about revenue enhancement, that's a lot based on not only our discrete, the way we go to market, but also our bundled and pull through revenues, inspection of mechanical services, Quest Integrity, et cetera. And then on top of that, our integrated revenue opportunities in terms of pull through all the way up the pyramid, which includes things like Team Digital and Quest Integrity. So I'm confident from that revenue level that as long as the market outlook is as per the projection over the next couple of years that we'll be able to leverage through training and different business systems and obviously a close working relationship with our clients. That revenue growth which is a big part of the transformation. The second part is the operational excellence and that comes in two forms. The first form is making sure we have standard operating procedures at the branch level, making sure our branches have the right operating structure to handle safety, quality and product and service delivery and removing as much of the administrative responsibility at that front face as possible and that's a huge opportunity for us, which is what plays into the third aspect, which is the center led functional support around – obviously, there's a cost effectiveness, leveraging our scale around procurement, making sure that we have the right level of support for administration, so our branches can focus on that product and service delivery. So those are the big three buckets. It's very structured with KPIs. As I said, it's going to be a monthly milestone review on the cost versus the benefit and we're going to make decisions and pull the levers on a priority basis going forward, but I can't today give you an average or a top end, but we will be deploying each of the 20 or 21 initiatives as they are ready to start gaining that benefit to our financial and operational performance.

Okay. So the money that we're spending on this, are any of these new permanent cost or is this severance and that sort of expense that you guys are adding, just trying to -- and maybe Greg, if you can talk a little bit about what you think sort of the go forward run rate of SG&A cost ought to be. That would be helpful too?

As we're going through design, we're obviously going to be identifying potential resource investments, subject matter experts that we may need to add to enhance our capability in some of the areas. Generally speaking, the front end costs, a lot of it is consulting fees and I would say generally all of it is what we would consider is non-recurring non-permanent costs. Regarding SG&A, it seems like, as Amerino said, we have a focus on reducing our SG&A. We're going to be very focused on asking all of our functional leads at corporate to figure out how to be more efficient in their respective areas as we focus on the center lead or design. A few things I want to point out relative to SG&A is, as I mentioned on the call, we're going to have accelerated amortization related to the Furmanite trade name. That's going to add about $3 million a quarter to SG&A. We also, that’s non-cash obviously. Also, 2017 was an underperforming year, so our incentive compensation was not at target. When we look at kind of a normalized target accrual for incentive comp, that's probably going to add about another $2 million a quarter to our SG&A. And then we're also going to be reclassifying R&D spend in 2018 from indirect cost and gross margin to SG&A, that's about $1 million a quarter. So there is going to be $6 million of cost increase per quarter in 2018 and 3 of that is non-cash on the Furmanite cost, but I think having that information will help you with your modeling.

Greg, to be clear, is that 6 million versus what you just reported for the fourth quarter?

Yeah. On the Furmanite amortization, yes, that is accelerated amortization in 2018, non-cash D&A. So that was my comment that our D&A is going to go from 52 to 64. That's what that component is and then the incentive comp, that will be an increase sequentially as will be accruing at a target rate in 2018. The R&D reclassification is just a geography move. It's not really an increase, although as Amerino mentioned in his comments, we are going to be very focused on technology and making investments in technology where they make sense. And so R&D may tune up some in 2018.

But on the incentive piece specifically, you mentioned that there was sort of a reversal of expense in the fourth quarter and now we're going to be accruing at a normal level. So is the sequential step up 2 million or is it something different.

I would say for the year, for the full year, you can expect the incentive comp to be up about $10 million for the year, $8 million to $10 million for the year. It’s around 8.

Sorry to keep pushing, but I think what we need to know is the sequential change. We need to understand the sequential move in SG&A cost. How much does incentive comp alone change versus what happened in the fourth quarter to what you're expecting on a normal run rate?

Well, we had – as I said in my comments, we had a $2 million credit in Q4. We would expect to have a $2 million increment in Q1 as we move the target. So from Q4 to Q1, it’s probably about $4 million.

And the next, just on cash flow, I appreciate the help you've given to sort of thinking through 2018. One of the key benefits that you guys were expecting from the ERP investment was a working capital release in cash. Is that factored into your cash flow outlook in 2018? And if so, how much?

I would say, it's not -- I would say, our cash flow -- our cash flow forecast when we went through the facility amendment process was kind of a base case without assuming significant improvements in working capital, because I didn't want that baked into how the covenants got set. So that said, when we had our discussions with the bank group, we were not projecting significant debt pay down. Now, we have also built into our 2018 incentive program cash generation, key performance objective, which goes all the way down from the execs down to the branch operation. So we've got some folks who will have a DSO target, some folks who will have an inventory reduction target and we're also going to be managing our CapEx spend tighter in ’18 and we -- just from a monitoring and a justification process, more rigor than we’ve had historically. So, we're going to be very focused on cash generation and working capital improvement. Inclusive in that is the fact that we now have a system, we have a tool, which gives us the capability to track our largest customers total AR situation and hit them more rifle shot on a collection effort as opposed to having the branches make their individual calls for their individual invoices. So, yes, the system will provide us with the tools to be able to lever our objective of improving our working capital and cash flow in 2018.

Okay. That helps. And the last thing real quick on the revenue side, so Amerino, you said 4% to 5% market growth. Obviously, one of the pillars of phase two is to drive more revenue. So, obviously, one of the pillars of phase two is to drive more revenue, so how much do you think you guys can outgrow the market by with the things that you’re trying to do with picking up more revenue with existing customers, better serving underserved markets, those sorts of things. What is a reasonable way for us to think about the revenue that you can add through market share, both from the way Team always has done things and then also kind of layering in the things you’re doing in Phase two?

So, the first thing is, I think the 4% to 5% is a good guidance in terms of our overall revenue plan. The second piece is the market continues to be competitive. So, we need to make sure we're segmenting both our industry as well as our contract in client types when we're selecting new business. So I'm -- at the end of the day, we will be aggressive to exceed the overall market growth, but Matt, we've got to make sure we're also doing it with profitability, gross margin hurdle rates in place, especially as we just discussed around cash generation, margin improvement, right. So it's a balance between the two. And the second -- I would say the third thing, as I said earlier in one of the questions, we're not banking on growing our support structures and our facilities, et cetera to hope that revenue comes. We're doing this in a current state or reduced state position, so that we get the fall through on the additional revenue. That's the key, because the market does vary up and down by quarter, but we have to make sure we have our cost base that can play at the lower revenue and deliver the expectations of what we’re planning for.

Thank you. And our next question comes from the line of Martin Malloy from Johnson Rice.

Quick question on the phase two here. So if you're spending 30 million roughly on consultants this year, what's the timeframe over which you'd expect payback on that investment?

Yeah. So, the 30 million is not all 100% consulting costs. There's other one-time costs that are factored into the 30 million. One of the things I think that is important for people to understand is Amerino refers to the three pillars: revenue, operations improvement, and center lead functional support improvements. One of the big initiatives in the operations improvement is just optimizing our non-billable time. That's something that we can focus on fairly quickly. As you've noticed and as we’ve discussed, the TeamFurmanite mechanical services business, their EBITDA margins were almost 12 or approximately 12% in Q4. They have a fairly robust, rigorous technician workforce management program that they follow. We're going to be looking at the inspection business and migrating the best practice of workforce management for mechanical services over to the inspection business. That's not something that we need to hire a outside consulting group to help us with and that's something that we can get started on fairly quickly. That's one of the biggest initiatives in the operations improvement pillar. In the center lead pillars, two of the big ticket items are the center lead supply chain and procurement. And I think as we have mentioned before, we have put a supply chain infrastructure and hired some subject matter experts in the last couple of years. One of the things that they're going to be doing is they're going to be looking at addressable spend. They're going to be identifying categories of large spend opportunity and we're going to have category managers focused on rationalizing the vendors and looking at our -- just our buying process and leveraging our scale. Again, that's not something that we need to hire an outside consulting group to help us with. And then another key area of our improvement program is just to reduce our reliance on external consulting support for a lot of the projects that we have internally. So on the One Team project, we will be utilizing Alvarez, but we've had a lot of the other incremental projects that we've been working on over the last couple of years where we've brought consultants in to help us with. We're going to be focused on pivoting away from as much reliance on external support for things outside of One Team. So, those three areas, work force management, center lead procurement and reducing our professional fees, those are things that we are working on right now and -- but the issue is as we just can't predict the exact timing of when benefits will be realized.

Okay. And maybe just looking back historically at times when the labor situation became tighter, how has that impacted your margins?

My understanding is there is a balance that comes into play because in tight markets, or tight labor markets, you have a very good reason to sit down with your customers and talk about the value proposition, the service offering and balanced with the tight labor market and the fact that we view our technicians as one of our strengths. And so, I guess it all depends on your relationship with the customer and how you handle that situation. I don't know that there's a blanket you can expect it X or Y. I think it's a process of dealing with your customers through that market situation.

So I'll just add a little bit of color to that and I think Greg is absolutely right. As the market tightens and again we are a bit of a seasonal business, we do work very closely with our customers and clients with regards to project planning. The certification levels required for the projects and then obviously there needs to be a pricing discussion that goes along with that. At times, it's a price increase. In other times, it's a market share gain, but it is a customer by customer discussion as obviously the market tightens either quarter-to-quarter or over an annual basis.

Okay. And then just to go back to a comment in your prepared remarks, it sounds like you're not really planning on meaningful debt reduction this year. And maybe if you could try to reconcile that with the 30 million of annual cost savings resulting from the cost reduction phase one program last year, the ERP system being implemented and presumably helping reduce the DSOs and then some improvement in the end markets?

Well, I think, it's important to understand that both us and our banks had some fatigue over the, having to amend this this facility as many times as we have and so we took a conservative approach in that process. We had a conservative base case, which does not factor in a lot of improvements from One Team and it does not factor in a lot of improvements in our working capital metrics. We wanted all of those things because they’re strategically important to us, they are tied into our key performance objectives for 2018. We wanted those things to represent upside to that conservative case. It doesn't mean that it's not going to happen. We're going to be focused on paying down debt. We just didn't want to have it in the base model that was used to negotiate the covenants. We wanted to make sure that we had flexibility in the covenant, but we have our incentive programs designed to incent from the executives down to the branches. There is a stretch and an excel component in the incentives to improve cash flow. So I don’t want anybody to be confused that we don’t plan to increase cash flow to pay down debt, it was just in the base case with the bank. We did not bake that in to the assumptions.

And our next question comes from the line of Craig Bibb from CJS Securities.

Can you guys talk about the three core objectives from the One Team, but just maybe a little more specific, how quickly do you think you might be consolidating branches and with the kind of write off of the Furmanite name, are we moving toward single operating unit rather than three segments?

So, right now, we’re going through obviously the design of what the structure looks like, but there is a couple of things. First of all, we need to make sure we maintain our scale and the footprint that allows us to service our customers in a reliable and time effective manner. So we are looking at addressable market, so we know what is coming forward as well as what we currently need. At the branch level, our customers and clients are not looking for generalists, they want to make sure we have specialized technicians and run the business, be it inspection or mechanical services or heat treating, et cetera according. So, we’re not looking here to start consolidating our offerings in the sense of the specialized service. Where it makes sense from an infrastructure standpoint in the addressable markets, we’ll start to prioritize from a footprint perspective. So that’s there. But more importantly, when you look at our regions and division structure, we have to have the ability to train, crosssell -- work across multiple client bases. That's where most of the integrated type discussion will need to happen and that also gets us to a point where we can start cross selling and actually start dealing at the right level with our clients. So that's the level that's going to take a lot of that integration discussion. Now, in terms of our branding, we will be going through a branding exercise as part of this process. Team Industrial will be the overall hero brand, but we will maintain some key brands below that. For example, Quest Integrity has a very strong reputable service, very strong name and very specific technology offerings. So we will build back that brand model as well around that.

Okay. The 27% to 30% tax rate going forward, is that a function of the interest expense as a percentage of operating income or why is it so high?

Well, it takes a lot of things into consideration. It factors in the mix of US and foreign earnings. It factors in state taxes. I think the biggest thing is just the mix of US and foreign. Plus we’re coming off of – to your point, we’re coming off of a tax loss for the year of ’17. So as our earnings improve, the deductibility of the interest -- will also increase.

Okay. So, as we get a little bit further forward, the debt starts to be paid down on a year or two, interest expense would fall relative to other net income, then you would move to a somewhat lower tax rate or this is run rate one time?

No. This is the rate for ’18.

And our next question comes from the line of Tom Radionov from Corre Partners.

I just wanted to take a step back and basically -- and just kind of ask -- I apologize if you already addressed this and maybe I just did not hear it, but as you think about the business in 2018 versus 2017 and kind of pro forma for some of these investments that you're talking about, pro forma for whatever cost savings you expect to realize from phase one, directionally, what do you guys sort of think the business can generate from a top line perspective and EBITDA perspective, not necessarily, obviously, you're not looking for specific numbers, but just directionally as you think about the top line and EBITDA in 2018 versus 2017, it sounds to me as if -- you basically expect those two numbers to be up, given what's happening with the underlying business, but just want to confirm that that I'm sort of thinking about it the right way?

Yes. Both lines would be up. I think the revenue line, I spoke to a little bit both because of the market as well as some of our initiatives, upward direction. And then on the EBITDA line with a lot of the cost initiatives that have already been put in place plus some of the early deployment ones under One Team, we plan both to be upwards directionally and that's how our incentive programs are also built.

And to be clear, as far as EBITDA is concerned, when you say that EBITDA is going to be up, what these does to your expectation, that does include some of the investments that you have to make for phase two, correct?

Yes, correct.

Got it. And then I'm trying remember, I think that Q1 of last year was a very weak quarter. Is that right? Am I remembering that correctly? And does that, I guess, again directionally imply a relatively stronger quarter on a year-over-year basis versus last year?

So I think that you are correct on last year. This year, we did have a slower start in January. We're starting to see a lot of our project work now accelerating into the next two months. But Quest Integrity has a bit of a lumpy quarter, just because of the way some of the projects are laying out. So, we don't expect to see the improvement on Quest Integrity like we've been seeing in the last few quarters, but the other two business units are starting to have a strong few months here in February, March activity levels.

And so directionally, I guess what you're saying is that will imply a stronger year-over-year quarter, although maybe not as strong as we would have hoped or expected to because of Quest?

Yes.

And our next question comes from the line of Matt Duncan from Stephens.

So just to follow-up on cash flow. So I certainly appreciate that the banks are listening and maybe you don't want to get into a little more detail because of that, but so are your shareholders and I've had emails from a lot of them and they care a lot on this point. So, Greg, I get that the base case that you gave for the banks doesn't include much working capital release. It sounds like you guys do expect to do better than the base case that you’ve given the banks. Some high level thoughts around how much better would be helpful for people to maybe get comfortable, because I think the reason the stock has rolled here during the call is this cash flow conversations?

Sure. So Matt, let me give you a little bit of light on this. So first of all, we do have our base case, which you’ve just addressed through -- from the bank side. We have four levers we’re clearly pulling and we've set objectives for those levers. One of them is DSO. We have a target to reduce our receivables balance. And that is built into all of the incentive programs that we've been discussing. The second one is inventory reduction on a total basis and a lot of that comes from our TeamFurmanite business unit. And then the third lever is the management of CapEx. So we will have very stringent approval processes when it comes to CapEx with the year-over-year reduction. And the fourth one which isn't directly cash flow related, but is another lever is our SG&A that we got into quite a bit of detail on. So, yes, the bank numbers are built in one model when it comes to free cash flow. We have aggressive objectives to increase the cash flow through the year with a target of stretch and excellence and any cash generation above the targets that we've set is going to go to pay down debt. So that summarizes the four items that we're pulling. What our free cash will do and obviously moving towards financial independence is – it’s a key objective of mine and the Team as a whole.

Just one other comment, Matt. Our cash flow from operations was negative 13 in 2017. Obviously, we're not going to have a target for a negative cash flow from operations in 2018.

And how much would CapEx come down with the ERP now done. What should CapEx look like again this year?

CapEx should be in the low to mid-30s. It was 37 last year.

What was the ERP last year?

Yeah. Last year, ERP, we had pivoted to implementation mode and those costs were not capitalizable. So those -- virtually all of the ERP spend in 2017 was non-recurring expense related to implementation. It was only $2 million in ‘17.

Okay. That makes sense. And the last thing I’ve got, just on the upper end, it sounds like it's 30 million on the expense this year on phase two. It sounds like the vast majority of that is one time in nature. Do you have any view on how much of it is sticky that goes forward and then to help us further with the cost, on the $12 million of accelerated amortization of Furmanite, is that just this year or is that going to carry forward in to ’19 also?

That is just in ’18. It’s basically to fully amortize the trade name by the end of 2018. So it’s a spike of $12 million in ’18 that goes away in ’19 and forward.

Okay. And then of the 30 million, Greg, how much of that is stuff that may stick versus truly one-time?

I would think the vast majority of the 30 will not stick. Now, it's possible there could be some consulting fees that roll into 2019, but it would not be anywhere near $30 million. It would probably be between, let's say, $4 million to $8 million.

Yeah. I think I remember in the bank deal, there was a cap of 7 if I remember correctly from what was included in the bank?

That's correct.

And our next question comes from the line of Jose Garza from Gabelli.

My question was just answered, but I guess just on the point of the ERP, you guys are not contemplating going outside of North America for any more of the ERP spend, correct?

At this point in time, we do not have any plans for any significant ERP changes. I will say that Furmanite had a Microsoft platform that they were using that is -- we would not be. If we do anything overseas, it would be more of an upgrade as opposed to implementing a whole new system, but yes, we do not have anything on the docket for ’18 on foreign ERP.

And I’m showing no further questions at this time. I would now like to turn the call back to Mr. Don Bleasdell for closing remarks.

Thank you for joining us on the call and for your continued interest in Team. We look forward to speaking with you again at the end of next quarter.

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program and you may all disconnect. Everyone, have a great day.