TISI
#Oh, sure.
I think so.
Well, I think demand bottomed in kind of the ---+ again, the winter months, the December-January time frame, is kind of the bottom of the normal seasonal cycle in kind of every year.
So I think that demand overall, particularly relative to inspection activities, bottomed.
I think I'm less confident, but ---+ on mechanical services because we just haven't seen ---+ we saw a big bottom in January.
Again, as I indicated, TeamFurmanite revenues in the month of January were down year-over-year on a pro forma basis 30%.
I mean, that was just ---+ I mean, that was extraordinary.
In February and March, those revenues were down about 10% on a year-over-year basis.
So we haven't seen TeamFurmanite revenues stabilize at this moment in time.
So what we're seeing is, directionally, we're seeing growth, real organic growth in inspection activities, both in TeamQualspec and in Quest Integrity Group.
But that has not ---+ we have not seen that yet in the mechanical service sector of TeamFurmanite.
Yes, I think that's fair.
I don't have the numbers in front of me.
We have a variety of sources and we'll be happy to share the source of that.
I'll let ---+ why don't you call ---+ get with <UNK>, and he can give you the ---+ he can share that information with you.
Again, I think, on the margin, there may have been some of that.
I don't think that would ---+ I wouldn't characterize that as being a significant component, although it's important.
I mean, the leveraging of our full capabilities across our network is important for each of our business units.
So I would tell you that Quest demand ---+ there is an element of Quest demand that is generated by being part of the Team global network, and ---+ but the same is also true in TeamQualspec and TeamFurmanite.
Well, again, I would hope so because I don't see any ---+ there's a ---+ we don't see an element of major kind of individual projects within the ---+ in the quarter for Quest that ---+ as, frankly, we've seen from time to time in the past, there've been occasions where a really big project at Quest, because it's a relatively small business from a total revenue standpoint, can move the needle quite a bit.
Again, as I mentioned, the encouraging thing, I think, about the quarter for Quest is there weren't any of those kind of projects.
So it was broad based.
Just generally stronger activity levels, stronger customer demand across our pipeline, process and advanced engineering services.
Again, part of that, by the way, as I indicated, driven by kind of an investment within Quest of resources pertaining to business development in the advanced engineering side.
Yes.
Primarily inspection.
So the ---+ well, probably the larger opportunity is inspection because as ---+ if you can appreciate, as piping systems are put together, if you will, assembled, there's ---+ are welding operations.
Welding requires heat treating and inspection, typically.
So the larger opportunity for us in new construction projects is typically in our inspection side of our business.
Well, I really wouldn't want to do that.
Let me just say that a new construction project, like an LNG facility or an ethylene plant, where we kind of have a prime role in either ---+ as an inspection contractor or heat treating or even mechanical services on the ---+ from a bolting or machining kind of standpoint, isolation test plugs being another example, typically, looks like a big turnaround for us.
And so that ---+ so ---+ and typically, a big turnaround for Team would be a project that could be, let's say, $1 million to $5 million in revenues associated with an individual project.
And that would be much ---+ so similar to that when it's a new construction opportunity.
It looks and feels like a big turnaround to us.
Well, I think it's just ---+ it has 2 effects.
One is the just kind of the incremental, if you will.
But again, not totally incremental in the sense that new construction projects have always been a significant piece of our revenue base.
And in the aggregate, I think of it as probably 85% to 90% of our revenues are derived from an installed base.
So inspection, maintenance of operating facilities, be it pipelines, petrochemical, power, refining.
And then about 10% to 15% is always associated with new construction or expansion and ---+ kind of a ---+ in typical.
I think the expansion opportunities are going to be a little broader, so maybe it's more like 15% rather than 10% of our revenue.
So that's kind of the incremental opportunity.
As importantly, particularly on the kind of the LNG, the petrochemical space, and it increases the kind of the capacity of installed base.
And so any time there are new facilities, those have to be also maintained and inspected.
And so it's not just the onetime opportunity associated with a new project.
It's the opportunity associated with the continuing installed base opportunity.
Yes, I ---+ my expectation is that it will.
If it is, then we will have taken some other steps around that to more appropriately allocate resources.
But again, for the same reasons that I've described, inspection, we've always seen in kind of ---+ in cyclical downturns that inspection activity ---+ improvement in inspection comes before improvement in mechanical services.
And the broad-based improvements we've seen in all of our inspection-related activities in TeamQualspec, in Quest Integrity Group, again, broad based in both cases, not pertaining to simply a location, that's a good barometer for future results in mechanical services.
And then two, the kind of customer commentary about expectations of kind of maintenance turnaround activity in the second half of 2017 and into 2018, all the industry data that I've pointed to, all of those things suggest that we should see a rebound, if you will, in the mechanical service side of our business sooner rather than later.
Yes, I would expect Q2 to be up.
Okay.
Thank you.
And again, thanks to all of you for your interest in Team and for your attention to today's call.
And we will talk again in early August, I think.
Have a good day.
