Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2017 | Aug. 02, 2017 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | TISI | |
Entity Registrant Name | TEAM INC | |
Entity Central Index Key | 318,833 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 29,839,211 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 29,154 | $ 46,216 |
Receivables, net of allowance of $9,870 and $7,835 | 281,642 | 262,773 |
Inventory | 51,293 | 49,571 |
Income tax receivable | 0 | 512 |
Deferred income taxes | 0 | 16,521 |
Prepaid expenses and other current assets | 23,140 | 25,764 |
Total current assets | 385,229 | 401,357 |
Property, plant and equipment, net | 204,265 | 203,130 |
Intangible assets, net of accumulated amortization of $45,964 and $37,309 | 168,069 | 176,104 |
Goodwill | 358,576 | 355,786 |
Other assets, net | 4,573 | 4,826 |
Deferred income taxes | 5,865 | 6,215 |
Total assets | 1,126,577 | 1,147,418 |
Current liabilities: | ||
Current portion of long-term debt | 20,000 | 20,000 |
Accounts payable | 46,709 | 47,817 |
Other accrued liabilities | 82,676 | 79,904 |
Income taxes payable | 87 | 0 |
Total current liabilities | 149,472 | 147,721 |
Deferred income taxes | 67,331 | 93,318 |
Long-term debt | 361,865 | 346,911 |
Defined benefit pension liability | 19,230 | 21,239 |
Other long-term liabilities | 3,985 | 2,592 |
Total liabilities | 601,883 | 611,781 |
Commitments and contingencies | ||
Equity: | ||
Preferred stock, 500,000 shares authorized, none issued | 0 | 0 |
Common stock, par value $0.30 per share, 60,000,000 shares authorized; 29,839,211 and 29,784,734 shares issued | 8,950 | 8,934 |
Additional paid-in capital | 341,152 | 336,756 |
Retained earnings | 199,347 | 218,947 |
Accumulated other comprehensive loss | (24,755) | (29,000) |
Total equity | 524,694 | 535,637 |
Total liabilities and equity | $ 1,126,577 | $ 1,147,418 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Receivables, allowance | $ 9,870 | $ 7,835 |
Intangible assets, accumulated amortization | $ 45,964 | $ 37,309 |
Preferred stock, shares authorized | 500,000 | 500,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value (in usd per share) | $ 0.30 | $ 0.30 |
Common stock, shares authorized | 60,000,000 | 60,000,000 |
Common stock, shares issued | 29,839,211 | 29,784,734 |
Unaudited Condensed Consolidate
Unaudited Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Revenues | $ 312,256 | $ 336,440 | $ 598,810 | $ 587,294 |
Operating expenses | 227,613 | 237,747 | 439,363 | 422,619 |
Gross margin | 84,643 | 98,693 | 159,447 | 164,675 |
Selling, general and administrative expenses | 91,065 | 82,501 | 180,378 | 155,863 |
Exit costs and other related charges (credits) (see Note 16) | 271 | 0 | (976) | 0 |
(Gain) loss on revaluation of contingent consideration | 0 | 2,184 | (1,174) | 2,184 |
Operating income (loss) | (6,693) | 14,008 | (18,781) | 6,628 |
Interest expense, net | 4,372 | 3,408 | 7,530 | 6,343 |
Foreign currency (gain) loss and other | 17 | (166) | 358 | (138) |
Income (loss) from continuing operations before income taxes | (11,082) | 10,766 | (26,669) | 423 |
Less: Provision (benefit) for income taxes | 4 | 3,796 | (6,075) | 13 |
Income (loss) from continuing operations | (11,086) | 6,970 | (20,594) | 410 |
Income from discontinued operations, net of income tax | 0 | 386 | 0 | 512 |
Net income (loss) | $ (11,086) | $ 7,356 | $ (20,594) | $ 922 |
Basic earnings (loss) per common share: | ||||
Continuing operations (in usd per share) | $ (0.37) | $ 0.24 | $ (0.69) | $ 0.01 |
Discontinued operations (in usd per share) | 0 | 0.01 | 0 | 0.02 |
Net loss (in usd per share) | (0.37) | 0.25 | (0.69) | 0.03 |
Diluted earnings (loss) per common share: | ||||
Continuing operations (in usd per share) | (0.37) | 0.24 | (0.69) | 0.01 |
Discontinued operations (in usd per share) | 0 | 0.01 | 0 | 0.02 |
Net loss (in usd per share) | $ (0.37) | $ 0.25 | $ (0.69) | $ 0.03 |
Unaudited Condensed Consolidat5
Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ (11,086) | $ 7,356 | $ (20,594) | $ 922 |
Foreign currency translation adjustment | 4,448 | (3,176) | 6,556 | 3,050 |
Foreign currency hedge | (949) | 310 | (1,115) | (243) |
Amortization of net actuarial loss on defined benefit pension plans | 17 | 0 | 34 | 0 |
Other comprehensive income (loss), before tax | 3,516 | (2,866) | 5,475 | 2,807 |
Tax provision attributable to other comprehensive income (loss) | (782) | (167) | (1,230) | (1,318) |
Other comprehensive income (loss), net of tax | 2,734 | (3,033) | 4,245 | 1,489 |
Total comprehensive income (loss) | $ (8,352) | $ 4,323 | $ (16,349) | $ 2,411 |
Unaudited Condensed Consolidat6
Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Net income (loss) | $ (20,594) | $ 922 |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||
Depreciation and amortization | 26,015 | 22,893 |
Amortization of deferred loan costs | 353 | 242 |
Provision for doubtful accounts | 3,172 | 2,496 |
Foreign currency loss (gain) | 437 | (99) |
Deferred income taxes | (9,066) | (934) |
(Gain) loss on revaluation of contingent consideration | (1,174) | 2,184 |
(Gain) loss on asset disposal | (921) | 47 |
Non-cash compensation cost | 4,263 | 4,704 |
Other, net | (2,243) | (525) |
(Increase) decrease, net of the effect of acquisitions: | ||
Receivables | (17,896) | 2,602 |
Inventory | (1,297) | 156 |
Prepaid expenses and other current assets | 1,857 | (3,866) |
Increase (decrease), net of the effect of acquisitions: | ||
Accounts payable | (1,708) | 14,379 |
Other accrued liabilities | 5,509 | (3,900) |
Income taxes | 683 | (3,238) |
Net cash (used in) provided by operating activities | (12,610) | 38,063 |
Cash flows used in investing activities: | ||
Capital expenditures | (18,662) | (21,853) |
Business acquisitions, net of cash acquired | 0 | (48,382) |
Change in restricted cash | 0 | 5,000 |
Proceeds from sale of assets | 2,558 | 1,026 |
Other | (508) | 213 |
Net cash used in investing activities | (16,612) | (63,996) |
Cash flows from financing activities: | ||
Net debt borrowings | 22,488 | 63,191 |
Payments under term loan | (10,000) | (10,000) |
Contingent consideration payments | (1,278) | 0 |
Purchase of treasury stock | 0 | (7,593) |
Debt issuance costs | (738) | (377) |
Corporate tax effect from share-based payment arrangements | 0 | 86 |
Issuance of common stock from share-based payment arrangements | 449 | 1,064 |
Payments related to withholding tax for share-based payment arrangements | (302) | (154) |
Net cash provided by financing activities | 10,619 | 46,217 |
Effect of exchange rate changes on cash | 1,541 | 331 |
Net (decrease) increase in cash and cash equivalents | (17,062) | 20,615 |
Cash and cash equivalents at beginning of period | 46,216 | 44,825 |
Cash and cash equivalents at end of period | $ 29,154 | $ 65,440 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES | 6 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES Introduction. Unless otherwise indicated, the terms “Team, Inc.,” “Team,” “the Company,” “we,” “our” and “us” are used in this report to refer to Team, Inc., to one or more of our consolidated subsidiaries or to all of them taken as a whole. We are a leading provider of standard to specialty industrial services, including inspection, engineering assessment and mechanical repair and remediation required in maintaining high temperature and high pressure piping systems and vessels that are utilized extensively in the refining, petrochemical, power, pipeline and other heavy industries. We conduct operations in three segments: TeamQualspec Group (“TeamQualspec”), TeamFurmanite Group (“TeamFurmanite”) and Quest Integrity Group (“Quest Integrity”). TeamQualspec provides standard and advanced non-destructive testing (“NDT”) services for the process, pipeline and power sectors, pipeline integrity management services, field heat treating services, as well as associated engineering and assessment services. These services can be offered while facilities are running (on-stream), during facility turnarounds or during new construction or expansion activities. TeamFurmanite, our mechanical services segment, provides turnaround and on-stream services. Turnaround services are project-related and demand is a function of the number and scope of scheduled and unscheduled facility turnarounds as well as new industrial facility construction or expansion activities. The turnaround services TeamFurmanite provides include field machining, technical bolting, field valve repair, heat exchanger repair, and isolation test plugging services. On-stream services offered by TeamFurmanite represent the services offered while plants are operating and under pressure. These services include leak repair, fugitive emissions control and hot tapping. Quest Integrity provides integrity and reliability management solutions for the process, pipeline and power sectors. These solutions encompass two broadly-defined disciplines: (1) highly specialized in-line inspection services for unpiggable process piping and pipelines using proprietary in-line inspection tools and analytical software; and (2) advanced condition assessment services through a multi-disciplined engineering team. We offer these services globally through over 220 locations in 20 countries throughout the world with more than 7,100 employees. We market our services to companies in a diverse array of heavy industries which include the petrochemical, refining, power, pipeline, steel, pulp and paper industries, as well as municipalities, shipbuilding, original equipment manufacturers (“OEMs”), distributors, and some of the world’s largest engineering and construction firms. Basis for presentation. These interim financial statements are unaudited, but in the opinion of our management, reflect all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of results for such periods. The consolidated condensed balance sheet at December 31, 2016 is derived from the December 31, 2016 audited consolidated financial statements. The results of operations for any interim period are not necessarily indicative of results for the full year. These financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in our Annual Report on Form 10-K for the year ended December 31, 2016 . Use of estimates. Our accounting policies conform to Generally Accepted Accounting Principles in the U.S. (“GAAP”). The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and judgments that affect our reported financial position and results of operations. We review significant estimates and judgments affecting our consolidated financial statements on a recurring basis and record the effect of any necessary adjustments prior to their publication. Estimates and judgments are based on information available at the time such estimates and judgments are made. Adjustments made with respect to the use of these estimates and judgments often relate to information not previously available. Uncertainties with respect to such estimates and judgments are inherent in the preparation of financial statements. Estimates and judgments are used in, among other things, (1) aspects of revenue recognition, (2) valuation of acquisition related tangible and intangible assets and assessments of all long lived assets for possible impairment, (3) estimating various factors used to accrue liabilities for workers’ compensation, auto, medical and general liability, (4) establishing an allowance for uncollectible accounts receivable, (5) estimating the useful lives of our assets, (6) assessing future tax exposure and the realization of tax assets, (7) estimating the value associated with contingent consideration payment arrangements and (8) selecting assumptions used in the measurement of costs and liabilities associated with defined benefit pension plans. Our most significant accounting policies are described below. Fair value of financial instruments . Our financial instruments consist primarily of cash, cash equivalents, accounts receivable, accounts payable and debt obligations. The carrying amount of cash, cash equivalents, trade accounts receivable and trade accounts payable are representative of their respective fair values due to the short-term maturity of these instruments. The fair value of our banking facility is representative of the carrying value based upon the variable terms and management’s opinion that the current rates available to us with the same maturity and security structure are equivalent to that of the banking facility. Cash and cash equivalents . Cash and cash equivalents consist of all demand deposits and funds invested in highly liquid short-term investments with original maturities of three months or less. Included in our cash and cash equivalents at June 30, 2017 and December 31, 2016 is $9.4 million and $14.0 million , respectively, of cash in certain foreign subsidiaries (located primarily in Europe and Asia) where earnings are considered by the Company to be permanently reinvested. In the event that some or all of this cash were to be repatriated, we would be required to accrue and pay additional taxes. While not legally restricted from repatriating this cash, we consider all undistributed earnings of these foreign subsidiaries to be indefinitely reinvested and access to cash to be limited. Inventory. We use the first-in, first-out method to determine inventory cost, except that inventory cost of Furmanite LLC (formerly Furmanite Corporation, “Furmanite”) and its subsidiaries, which we acquired on February 29, 2016 (see Note 2), is determined based on weighted-average cost. Inventory includes material, labor and certain fixed overhead costs. Inventory is stated at the lower of cost and net realizable value. Inventory quantities on hand are reviewed periodically and carrying cost is reduced to net realizable value for inventories for which their cost exceeds their utility. The cost of inventories consumed or products sold are included in operating expenses. Property, plant and equipment. Property, plant and equipment are stated at cost less accumulated depreciation and amortization. Leasehold improvements are amortized over the shorter of their respective useful life or the lease term. Depreciation and amortization of assets are computed by the straight-line method over the following estimated useful lives of the assets: Classification Useful Life Buildings 20-40 years Enterprise Resource Planning (“ERP”) System 15 years Leasehold improvements 2-15 years Machinery and equipment 2-12 years Furniture and fixtures 2-10 years Computers and computer software 2-5 years Automobiles 2-5 years Goodwill and intangible assets. We allocate the purchase price of acquired businesses to their identifiable tangible assets and liabilities, such as accounts receivable, inventory, property, plant and equipment, accounts payable and accrued liabilities. We also allocate a portion of the purchase price to identifiable intangible assets, such as non-compete agreements, trademarks, trade names, patents, technology and customer relationships. Allocations are based on estimated fair values of assets and liabilities. We use all available information to estimate fair values including quoted market prices, the carrying value of acquired assets, and widely accepted valuation techniques such as discounted cash flows. Certain estimates and judgments are required in the application of the fair value techniques, including estimates of future cash flows, selling prices, replacement costs, economic lives and the selection of a discount rate, and it involves using of “Level 3” measurements as defined in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820 Fair Value Measurements and Disclosur e (“ASC 820”). Deferred taxes are recorded for any differences between the assigned values and tax bases of assets and liabilities. Estimated deferred taxes are based on available information concerning the tax bases of assets acquired and liabilities assumed and loss carryforwards at the acquisition date, although such estimates may change in the future as additional information becomes known. Any remaining excess of cost over allocated fair values is recorded as goodwill. We typically engage third-party valuation experts to assist in determining the fair values for both the identifiable tangible and intangible assets. The judgments made in determining the estimated fair value assigned to each class of assets acquired and liabilities assumed, as well as asset lives, could materially impact our results of operations. Goodwill and intangible assets acquired in a purchase business combination and determined to have an indefinite useful life are not amortized, but are instead tested for impairment at least annually in accordance with the provisions of the ASC 350 Intangibles—Goodwill and Other (“ASC 350”). Intangible assets with estimated useful lives are amortized over their respective estimated useful lives to their estimated residual values and reviewed for impairment in accordance with ASC 350. We assess goodwill for impairment at the reporting unit level, which we have determined to be the same as our operating segments. Each reporting unit has goodwill relating to past acquisitions. The test for impairment is performed at the reporting unit level which is deemed to be at the operating segment level. Prior to January 1, 2017, the test was a two-step process that involved comparing the estimated fair value of each reporting unit to the reporting unit’s carrying value, including goodwill. If the fair value of a reporting unit exceeded its carrying amount, the goodwill of the reporting unit was not considered impaired; therefore, the second step of the impairment test would not be deemed necessary. If the carrying amount of the reporting unit exceeded its fair value, we would then perform the second step to the goodwill impairment test, which involved the determination of the fair value of a reporting unit’s assets and liabilities as if those assets and liabilities had been acquired/assumed in a business combination at the impairment testing date, to measure the amount of goodwill impairment loss to be recorded. However, as discussed under “Newly Adopted Accounting Principles—ASU No. 2017-04” below, effective January 1, 2017 we prospectively adopted a new accounting principle that eliminated the second step of the goodwill impairment test. Therefore, for goodwill impairment tests occurring after January 1, 2017, if the carrying value of a reporting unit exceeds its fair value, we will measure any goodwill impairment losses as the amount by which the carrying amount of a reporting unit exceeds its fair value, not to exceed the total amount of goodwill allocated to that reporting unit. Our goodwill annual test date is December 1. We performed our most recent annual impairment test as of December 1, 2016 and concluded that there was no impairment. The fair values of the reporting units at December 1, 2016 were determined using a combination of income and market approaches. The income approach was based on discounted cash flow models with estimated cash flows based on internal forecasts of revenue and expenses over a five -year period plus a terminal value period. The income approach estimated fair value by discounting each reporting unit’s estimated future cash flows using a discount rate that approximated our weighted-average cost of capital. Major assumptions applied in an income approach include forecasted growth rates as well as forecasted profitability by reporting unit. Additionally, we considered two market approaches that were based on multiples, based on observable market data, of certain financial metrics of our reporting units to arrive at fair value. We applied equal weighting to each of the income and the two market approaches. The fair value derived from these approaches, in the aggregate, approximated our market capitalization. At December 1, 2016, our market capitalization exceeded the carrying value of our consolidated net assets by approximately $437 million or 80% , and the fair value of each reporting unit significantly exceeded its respective carrying amount as of that date. As of June 30, 2017, we determined that there were sufficient indicators to trigger an interim goodwill impairment analysis. The indicators included, among other factors, the continued market softness, primarily in our TeamFurmanite segment, and the related impacts on our financial results and our stock price. The Company’s interim impairment goodwill test was prepared using a similar methodology as described above for its most recent annual impairment test. The June 30, 2017 interim goodwill impairment test indicated no impairment as the fair values of each reporting unit exceeded their carrying values. On June 30, 2017, our market capitalization exceeded the carrying value of our consolidated net assets by approximately $175 million or 33% . The fair value of the Quest Integrity reporting unit significantly exceeded its carrying value. With respect to our TeamQualspec and TeamFurmanite reporting unit, the fair values exceeded carrying values by 65% and 46% , respectively. There was $358.6 million and $355.8 million of goodwill at June 30, 2017 and December 31, 2016 , respectively. A rollforward of goodwill for the six months ended June 30, 2017 is as follows (in thousands): Six Months Ended (unaudited) TeamQualspec TeamFurmanite Quest Integrity Total Balance at beginning of period $ 213,475 $ 109,059 $ 33,252 $ 355,786 Foreign currency adjustments 1,050 1,038 702 2,790 Balance at end of period $ 214,525 $ 110,097 $ 33,954 $ 358,576 Income taxes. We follow the guidance of ASC 740 Income Taxes (“ASC 740”), which requires that we use the asset and liability method of accounting for deferred income taxes and provide deferred income taxes for all significant temporary differences. As part of the process of preparing our consolidated financial statements, we are required to estimate our income taxes in each of the jurisdictions in which we operate. This process involves estimating our actual current tax payable and related tax expense together with assessing temporary differences resulting from differing treatment of certain items, such as depreciation, for tax and accounting purposes. These differences can result in deferred tax assets and liabilities, which are included within our consolidated balance sheets. In accordance with ASC 740, we are required to assess the likelihood that our deferred tax assets will be realized and, to the extent we believe that it is more likely than not (a likelihood of more than 50% ) that some portion or all of the deferred tax assets will not be realized, we must establish a valuation allowance. We consider all available evidence to determine whether, based on the weight of the evidence, a valuation allowance is needed. Evidence used includes information about our current financial position and our results of operations for the current and preceding years, as well as all currently available information about future years, including our anticipated future performance, the reversal of existing taxable temporary differences and tax planning strategies. Workers’ compensation, auto, medical and general liability accruals. In accordance with ASC 450 Contingencies (“ASC 450”), we record a loss contingency when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. We review our loss contingencies on an ongoing basis to ensure that we have appropriate reserves recorded on our balance sheet. These reserves are based on historical experience with claims incurred but not received, estimates and judgments made by management, applicable insurance coverage for litigation matters, and are adjusted as circumstances warrant. For workers’ compensation, our self-insured retention is $1.0 million and our automobile liability self-insured retention is currently $500,000 per occurrence. For general liability claims, we have an effective self-insured retention of $3.0 million per occurrence. For medical claims, our self-insured retention is $350,000 per individual claimant determined on an annual basis. For environmental liability claims, our self-insured retention is $1.0 million per occurrence. We maintain insurance for claims that exceed such self-retention limits. The insurance is subject to terms, conditions, limitations and exclusions that may not fully compensate us for all losses. Our estimates and judgments could change based on new information, changes in laws or regulations, changes in management’s plans or intentions, or the outcome of legal proceedings, settlements or other factors. If different estimates and judgments were applied with respect to these matters, it is likely that reserves would be recorded for different amounts. Revenue recognition. Most of our projects are short-term in nature and we predominantly derive revenues by providing a variety of industrial services on a time and material basis. For all of these services our revenues are recognized when services are rendered or when product is shipped to the job site and risk of ownership passes to the customer. However, due to various contractual terms with our customers, at the end of any reporting period, there may be earned but unbilled revenue that is accrued to properly match revenues with related costs. At June 30, 2017 and December 31, 2016 , the amount of earned but unbilled revenue included in accounts receivable was $80.0 million and $39.7 million , respectively. Allowance for doubtful accounts. In the ordinary course of business, a portion of our accounts receivable are not collected due to billing disputes, customer bankruptcies, dissatisfaction with the services we performed and other various reasons. We establish an allowance to account for those accounts receivable that we estimate will eventually be deemed uncollectible. The allowance for doubtful accounts is based on a combination of our historical experience and management’s review of long outstanding accounts receivable. Concentration of credit risk. No single customer accounts for more than 10% of consolidated revenues. Earnings (loss) per share. Basic earnings (loss) per share is computed by dividing income (loss) from continuing operations, income (loss) from discontinued operations or net income (loss) available to Team stockholders by the weighted-average number of shares of common stock outstanding during the year. Diluted earnings (loss) per share is computed by dividing income (loss) from continuing operations, income (loss) from discontinued operations or net income (loss) available to Team stockholders by the sum of (1) the weighted-average number of shares of common stock outstanding during the period and (2) the dilutive effect of the assumed exercise of share-based compensation using the treasury stock method. Amounts used in basic and diluted earnings (loss) per share, for the three and six months ended June 30, 2017 and 2016 , are as follows (in thousands): Three Months Ended Six Months Ended 2017 2016 2017 2016 (unaudited) (unaudited) (unaudited) (unaudited) Weighted-average number of basic shares outstanding 29,826 29,452 29,815 26,738 Stock options, stock units and performance awards — 76 — 70 Total shares and dilutive securities 29,826 29,528 29,815 26,808 For both the three and six months ended June 30, 2017 , all outstanding share-based compensation awards were excluded from the calculation of diluted earnings (loss) per share because their inclusion would be antidilutive due to the loss from continuing operations in both periods. There were 0.3 million and 0.4 million stock options outstanding during the three months and six months ended June 30, 2016, respectively, excluded from the computation of diluted earnings per share because the options’ exercise prices were greater than the average market price of common shares during the periods. Foreign currency . For subsidiaries whose functional currency is not the U.S. Dollar, assets and liabilities are translated at period ending rates of exchange and revenues and expenses are translated at period average exchange rates. Translation adjustments for the asset and liability accounts are included as a separate component of accumulated other comprehensive loss in stockholders’ equity. Foreign currency transaction gains and losses are included in our statements of operations. We utilize monthly foreign currency swap contracts to reduce exposures to changes in foreign currency exchange rates related to our largest exposures including, but not limited to, the Brazilian Real, British Pound, Canadian Dollar, Euro, Malaysian Ringgit, Mexican Peso and Singapore Dollar. The impact from these swap contracts was not material for the three and six months ended June 30, 2017 or 2016 nor as of the balance sheet dates of June 30, 2017 and December 31, 2016 . Defined benefit pension plans. Pension benefit costs and liabilities are dependent on assumptions used in calculating such amounts. The primary assumptions include factors such as discount rates, expected investment return on plan assets, mortality rates and retirement rates. These rates are reviewed annually and adjusted to reflect current conditions. These rates are determined based on reference to yields. The expected return on plan assets is derived from detailed periodic studies, which include a review of asset allocation strategies, anticipated future long-term performance of individual asset classes, risks (standard deviations) and correlations of returns among the asset classes that comprise the plans’ asset mix. While the studies give appropriate consideration to recent plan performance and historical returns, the assumptions are primarily long-term, prospective rates of return. Mortality and retirement rates are based on actual and anticipated plan experience. In accordance with GAAP, actual results that differ from the assumptions are accumulated and are subject to amortization over future periods and, therefore, generally affect recognized expense in future periods. While we believe that the assumptions used are appropriate, differences in actual experience or changes in assumptions may affect the pension obligation and future expense. Newly Adopted Accounting Principles ASU No. 2015-11 . In July 2015, the FASB issued Accounting Standards Update (“ASU”) No. 2015-11, Inventory—Simplifying the Measurement of Inventory (“ASU 2015-11”), which requires entities that measure inventory using the first-in, first-out or average cost methods to measure inventory at the lower of cost and net realizable value to more closely align the measurement of inventory in GAAP with International Financial Reporting Standards. Net realizable value is defined as estimated selling price in the ordinary course of business less reasonably predictable costs of completion, disposal and transportation. Our adoption, on a prospective basis, of ASU 2015-11 on January 1, 2017 had no impact on our results of operations, financial position or cash flows. ASU No. 2015-17 . In November 2015, the FASB issued ASU No. 2015-17, Income Taxes: Balance Sheet Classification of Deferred Taxes (“ASU 2015-17”), which simplifies the presentation of deferred taxes by requiring deferred tax assets and liabilities be classified as noncurrent on the balance sheet. As a result of our prospective adoption of ASU 2015-17 on January 1, 2017, all deferred tax assets and liabilities have been classified as noncurrent on our consolidated balance sheet at June 30, 2017 , while our consolidated balance sheet at December 31, 2016 reflects classifications of deferred tax assets and liabilities in accordance with previous GAAP. The adoption of ASU 2015-17 had no impact on our results of operations or cash flows. ASU No. 2016-09. In March 2016, the FASB issued ASU No. 2016-09, Compensation–Stock Compensation: Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”), which makes several modifications to GAAP related to share-based payments including the accounting for forfeitures, employee taxes and the financial statement presentation and timing of recognition of excess tax benefits or deficiencies. Specifically, ASU 2016-09 requires excess tax benefits and deficiencies to be recognized in the statements of operations as part of the provision for income tax (benefit) whereas previous guidance generally resulted in such amounts being recognized in additional paid-in capital. ASU 2016-09 also clarifies the statement of cash flows presentation for certain items associated with share-based awards. We adopted ASU 2016-09 on January 1, 2017. With respect to the requirement to recognize excess tax benefits or deficiencies in the statements of operations, we began recognizing such amounts, on a prospective basis, effective January 1, 2017 as a component of our provision (benefit) for income taxes as a discrete item. For the three and six months ended June 30, 2017 , an immaterial amount of net excess tax benefits are included within the income tax benefit in the consolidated statement of operations. Also, beginning prospectively on January 1, 2017, excess tax benefits from share-based awards are classified as operating activities instead of financing activities in our consolidated statements of cash flows, as required by the ASU. Additionally, in connection with the adoption, we recorded a cumulative-effect adjustment of $1.0 million that increased the opening balance of retained earnings as of January 1, 2017, reflecting the recognition of certain excess tax benefits from share-based awards that did not yet qualify for recognition under previous guidance. The adoption of the other requirements in ASU 2016-09 had no impact on our results of operations, financial position or cash flows. ASU No. 2017-04 . In January 2017, the FASB issued ASU No. 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (“ASU 2017-04”). Prior to adoption of ASU 2017-04, if an impairment of goodwill is indicated, entities are required to then calculate the implied fair value of goodwill to determine the amount of impairment loss. This procedure, referred to as the second step of the goodwill impairment test, required the determination of the fair value of the assets and liabilities of a reporting unit as if those assets and liabilities had been acquired/assumed in a business combination at the impairment testing date. ASU 2017-04 eliminated the second step and instead requires that the impairment loss be measured as the amount by which the carrying amount of a reporting unit exceeds the reporting unit’s fair value, not to exceed the total amount of goodwill allocated to that reporting unit. We elected to early adopt ASU 2017-04 prospectively effective January 1, 2017. The adoption of ASU 2017-04 had no impact on our consolidated financial statements, but we will apply the new guidance to the measurement of any future goodwill impairment losses that we may be required to recognize. Accounting Principles Not Yet Adopted ASU No. 2014-09 . In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. ASU 2014-09 will replace most existing revenue recognition guidance in GAAP when it becomes effective. We did not elect to early adopt ASU 2014-09. Therefore, the new standard is effective for us on January 1, 2018. ASU 2014-09 permits the use of either the full retrospective or modified retrospective transition method. To adopt the new standard, we anticipate applying the modified retrospective transition method, pursuant to which we will record an adjustment to the opening balance of retained earnings as of January 1, 2018 for the impact of applying ASU 2014-09 to all contracts existing as of the date of application. We are continuing our assessment of ASU 2014-09. At this time, our assessment is not yet complete and therefore we are unable to quantify the potential impacts. However, as most of our projects are short-term in nature and billed on a time and materials basis, we do not currently anticipate that the adoption of ASU 2014-09 will result in substantial changes to the overall pattern or timing of our revenue recognition. ASU No. 2016-02. In February 2016, the FASB issued ASU No. 2016-02, Leases (“ASU 2016-02”), which changes the accounting for leases, including a requirement to record essentially all leases on the consolidated balance sheets as assets and liabilities. This ASU is effective for fiscal years beginning after December 15, 2018. We will adopt ASU 2016-02 effective January 1, 2019. We are currently evaluating the impact this ASU will have on our ongoing financial reporting. ASU No. 2016-13. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments–Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which amends GAAP by introducing a new impairment model for financial instruments that is based on expected credit losses rather than incurred credit losses. The new impairment model applies to most financial assets, including trade accounts receivable. ASU 2016-13 is effective for interim and annual reporting periods beginning after December 15, 2019, although it may be adopted one year earlier, and requires a modified retrospective transition approach. We are currently evaluating the impact this ASU will have on our ongoing financial reporting. ASU No. 2016-15 . In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”), which clarifies the classification in the statement of cash flows of certain items, including debt prepayment or extinguishment costs, settlement of contingent consideration arising from a business combination, insurance settlement proceeds, and cash receipts and payments having aspects of more than one class of cash flows. ASU 2016-15 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. Early adoption is permitted. We do not expect the adoption of this ASU to have a material impact on our statements of cash flows. ASU No. 2016-16 . In October 2016, the FASB issued ASU No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory (“ASU 2016-16”), which will require an entity to recognize the income tax consequences of an intra-entity transfer of an asset, other than inventory, when the transfer occurs. ASU 2016-16 is effective on January 1, 2018 with early adoption permitted. We are currently evaluating the impact this ASU will have on our ongoing financial reporting. ASU No. 2017-07 . In March 2017, the FASB issued ASU No. 2017-07, Compensation—Retirement Benefits: Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost (“ASU 2017-07”), which prescribes where in the statement of operations the components of net periodic pension cost and net periodic postretirement benefit cost should be reported. Under ASU 2017-07, the service cost component is required to be reported in the same lin |
ACQUISITIONS
ACQUISITIONS | 6 Months Ended |
Jun. 30, 2017 | |
Business Combinations [Abstract] | |
ACQUISITIONS | ACQUISITIONS In November 2015, Team and Furmanite entered into an Agreement and Plan of Merger (the “Merger Agreement”) pursuant to which we acquired all the outstanding shares of Furmanite in a stock transaction whereby Furmanite shareholders received 0.215 shares of Team common stock for each share of Furmanite common stock they owned. The merger was completed on February 29, 2016. Outstanding Furmanite share-based payment awards were generally converted into comparable share-based awards of Team, with certain awards vesting upon the closing of the merger, pursuant to the Merger Agreement. The combination doubled the size of Team’s mechanical services capabilities and established a deeper, broader talent and resource pool that better supports customers across standard and specialty mechanical services. In addition, our expanded capability and capacity offers an enhanced single-point of accountability and flexibility in addressing some of the most critical needs of clients; whether as individual services or as part of an integrated specialty industrial services solution. The acquisition-date fair value of the consideration transferred totaled $282.3 million , which consisted of the following (in thousands, except shares): February 29, 2016 Common stock (8,208,006 shares) $ 209,529 Converted share-based payment awards 2,001 Cash 70,811 Total consideration $ 282,341 The fair value of the 8,208,006 common shares issued was determined based on the closing market price of our common shares on the acquisition date of February 29, 2016. The issuance of common stock in the acquisition is a non-cash financing activity that has been excluded from the consolidated statement of cash flows. The fair value of the converted share-based payment awards reflects an apportionment of the fair value of the awards, based on the closing market price of our common stock and other assumptions as of the acquisition date, that is attributable to employee service completed prior to the acquisition date. The fair value of the awards attributable to service after the acquisition date is recognized as share-based compensation expense over the applicable vesting periods. The cash consideration represents amounts Team paid, immediately prior to the closing of the acquisition, to settle Furmanite’s outstanding debt and certain related liabilities, which were not assumed by Team. The cash portion of the consideration was financed through additional borrowings under our banking credit facility. The following table presents the purchase price allocation for Furmanite (in thousands): February 29, 2016 Cash and cash equivalents $ 37,734 Accounts receivable 65,925 Inventory 25,847 Current deferred tax assets 19,857 Prepaid expenses and other current assets 23,044 Current assets of discontinued operations 18,623 Plant, property and equipment 63,259 Intangible assets 88,958 Goodwill 89,646 Non-current deferred tax assets 2,542 Other non-current assets 687 Total assets acquired 436,122 Accounts payable 12,359 Other accrued liabilities 33,127 Income taxes payable 229 Current liabilities of discontinued operations 1,434 Non-current deferred tax liabilities 91,431 Defined benefit pension liability 13,509 Other long-term liabilities 1,692 Total liabilities assumed 153,781 Net assets acquired $ 282,341 The purchase price allocation shown above is based upon the fair values at the acquisition date. The fair values recorded are “Level 3” measurements as defined in Note 10. Of the $89.0 million of acquired intangible assets, $69.8 million was assigned to customer relationships with an estimated useful life of 12 years, $16.9 million was assigned to trade names with a weighted-average estimated useful life of 12 years and $2.3 million was assigned to developed technology with an estimated useful life of 10 years. The $89.6 million of goodwill was assigned to the TeamFurmanite segment. The goodwill recognized is attributable primarily to expected synergies and the assembled workforce of Furmanite. None of the goodwill recognized is expected to be deductible for income tax purposes. The fair value of accounts receivable acquired was $65.9 million , considering we expect $7.9 million to be uncollectible. Additionally, we acquired accounts receivable with a fair value of $13.6 million associated with discontinued operations, which is included in the current assets of discontinued operations line above. The gross contractual amount of receivables acquired was $88.0 million . Current assets of discontinued operations as of the acquisition date includes $3.3 million of goodwill and $1.6 million of intangible assets that were allocated to a business that we sold in December 2016, as discussed in Note 15. The amount of current assets of discontinued operations acquired shown above is net of costs to sell of $1.1 million . For the three and six months ended June 30, 2016 , we recognized a total of $0.5 million and $6.6 million , respectively, of acquisition costs related to the Furmanite acquisition, which were included in selling, general and administrative expenses in the consolidated statements of operations. Our unaudited condensed consolidated statement of operations for the six months ended June 30, 2016 includes the activity of Furmanite beginning on the acquisition date of February 29, 2016. Subsequent to the acquisition date, we commenced integration activities relative to Furmanite. As a result, certain business operations have been consolidated and/or transferred from legacy Furmanite operations to legacy Team operations to facilitate the new operating structure. Revenues of $97.4 million and a net loss of $1.6 million are included in the six months ended June 30, 2016 and only include operating results that are directly attributable to legacy Furmanite operations. These amounts do not reflect any attempt to adjust for the effects of integration activities, which are not practicable to determine. Certain transactions related to the Furmanite acquisition were recognized separately from the acquisition of assets and assumption of liabilities in accordance with GAAP. These transactions, which were attributable to certain compensation (both cash and share-based) that was paid or became payable in conjunction with the closing of the acquisition, totaled $4.7 million and were recognized as selling, general and administrative expenses during the six months ended June 30, 2016 . There were no such amounts recognized during the three months ended June 30, 2016 . Our unaudited pro forma consolidated results of operations are shown below as if the acquisition of Furmanite had occurred at the beginning of fiscal year 2015. These results are not necessarily indicative of the results which would actually have occurred if the acquisition had taken place at the beginning of fiscal year 2015, nor are they necessarily indicative of future results (in thousands, except per share data). Pro forma data Six Months Ended 2016 (unaudited) Revenues $ 631,064 Income from continuing operations $ 2,587 Earnings per share from continuing operations: Basic $ 0.09 Diluted $ 0.09 These amounts have been calculated after applying Team’s accounting policies and adjusting the results of Furmanite to reflect the additional depreciation and amortization that would have been charged assuming the fair value adjustments to property, plant and equipment and intangible assets had been applied on January 1, 2015, together with the related tax effects. Additionally, these pro forma results exclude discontinued operations as well as the impact of transaction and integration-related costs associated with the Furmanite acquisition included in the historical results. |
RECEIVABLES
RECEIVABLES | 6 Months Ended |
Jun. 30, 2017 | |
Receivables [Abstract] | |
RECEIVABLES | RECEIVABLES A summary of accounts receivable as of June 30, 2017 and December 31, 2016 is as follows (in thousands): June 30, 2017 December 31, 2016 (unaudited) Trade accounts receivable $ 211,472 $ 230,889 Unbilled revenues 80,040 39,719 Allowance for doubtful accounts (9,870 ) (7,835 ) Total $ 281,642 $ 262,773 |
INVENTORY
INVENTORY | 6 Months Ended |
Jun. 30, 2017 | |
Inventory Disclosure [Abstract] | |
INVENTORY | INVENTORY A summary of inventory as of June 30, 2017 and December 31, 2016 is as follows (in thousands): June 30, 2017 December 31, 2016 (unaudited) Raw materials $ 9,513 $ 6,844 Work in progress 3,271 2,713 Finished goods 38,509 40,014 Total $ 51,293 $ 49,571 |
PROPERTY, PLANT AND EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT | 6 Months Ended |
Jun. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT | PROPERTY, PLANT AND EQUIPMENT A summary of property, plant and equipment as of June 30, 2017 and December 31, 2016 is as follows (in thousands): June 30, 2017 December 31, 2016 (unaudited) Land $ 7,330 $ 7,429 Buildings and leasehold improvements 47,737 42,257 Machinery and equipment 242,723 233,063 Furniture and fixtures 9,085 8,431 Capitalized ERP system development costs 46,122 44,876 Computers and computer software 12,975 11,775 Automobiles 5,284 5,370 Construction in progress 13,853 12,997 Total 385,109 366,198 Accumulated depreciation and amortization (180,844 ) (163,068 ) Property, plant, and equipment, net $ 204,265 $ 203,130 At the end of 2013, we initiated the design and implementation of a new ERP system, which is expected to be substantially installed by the end of 2017. Amortization of the ERP system development costs began in March 2017 and is computed by the straight-line method. Through June 30, 2017 , we have capitalized $46.1 million associated with the project that includes $1.6 million of capitalized interest and we have recognized $1.1 million of amortization expense. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 6 Months Ended |
Jun. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | INTANGIBLE ASSETS A summary of intangible assets as of June 30, 2017 and December 31, 2016 is as follows (in thousands): June 30, 2017 December 31, 2016 (unaudited) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Customer relationships $ 175,081 $ (32,320 ) $ 142,761 $ 174,742 $ (25,508 ) $ 149,234 Non-compete agreements 5,504 (4,215 ) 1,289 5,397 (3,896 ) 1,501 Trade names 24,751 (5,211 ) 19,540 24,624 (4,216 ) 20,408 Technology 7,846 (3,826 ) 4,020 7,812 (3,364 ) 4,448 Licenses 851 (392 ) 459 838 (325 ) 513 Total $ 214,033 $ (45,964 ) $ 168,069 $ 213,413 $ (37,309 ) $ 176,104 Amortization expense for the three months ended June 30, 2017 and 2016 was $4.2 million and $4.1 million , respectively. Amortization expense for the six months ended June 30, 2017 and 2016 was $8.4 million and $7.2 million , respectively. |
OTHER ACCRUED LIABILITIES
OTHER ACCRUED LIABILITIES | 6 Months Ended |
Jun. 30, 2017 | |
Payables and Accruals [Abstract] | |
OTHER ACCRUED LIABILITIES | OTHER ACCRUED LIABILITIES A summary of other accrued liabilities as of June 30, 2017 and December 31, 2016 is as follows (in thousands): June 30, 2017 December 31, 2016 (unaudited) Payroll and other compensation expenses $ 39,581 $ 38,214 Insurance accruals 15,498 13,896 Property, sales and other non-income related taxes 4,360 5,599 Lease commitments 839 2,119 Deferred revenue 6,770 3,433 Accrued commission 1,602 1,355 Accrued interest 627 603 Volume discount 700 1,067 Contingent consideration — 2,103 Professional fees 2,480 1,530 Other 10,219 9,985 Total $ 82,676 $ 79,904 |
LONG-TERM DEBT, DERIVATIVES AND
LONG-TERM DEBT, DERIVATIVES AND LETTERS OF CREDIT | 6 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT, DERIVATIVES AND LETTERS OF CREDIT | LONG-TERM DEBT, LETTERS OF CREDIT AND DERIVATIVES In July 2015, we renewed our banking credit facility (the “Credit Facility”). In accordance with the second amendment to the Credit Facility, which was signed in February 2016, the Credit Facility had a borrowing capacity of up to $600 million and consisted of a $400 million , five -year revolving loan facility and a $200 million five -year term loan facility. The swing line facility is $35.0 million . On July 31, 2017, we completed the issuance of $230.0 million of 5.00% convertible senior notes in a private offering (which is described further in Note 18) and used the proceeds from the Offering (as defined in Note 18) to repay in full the outstanding term loan portion of our Credit Facility and a portion of the outstanding revolving borrowings. Concurrently with the completion of the Offering and the repayment of outstanding borrowings discussed above, we entered into the sixth amendment to the Credit Facility (the “Sixth Amendment”), effective as of June 30, 2017, which reduced the capacity of the Credit Facility to a $300 million revolving loan facility, subject to a borrowing availability test (based on eligible accounts, inventory and fixed assets). The Credit Facility matures in July 2020 , bears interest based on a variable Eurodollar rate option (LIBOR plus 3.25% margin at June 30, 2017 ) and has commitment fees on unused borrowing capacity ( 0.50% at June 30, 2017 ). The Credit Facility limits our ability to pay cash dividends. The Credit Facility also contains financial covenants, which were amended in May 2017 and July 2017 pursuant to the fifth and sixth amendments, respectively, to the Credit Facility. The covenants, as amended, require the Company to maintain as of the end of each fiscal quarter (i) a maximum ratio of consolidated funded debt to consolidated EBITDA (the “Total Leverage Ratio,” as defined in the Credit Facility agreement) of not more than 4.50 to 1.00 as of March 31, 2018, of not more than 4.25 to 1.00 as of June 30, 2018 and not more than 4.00 to 1.00 as of September 30, 2018 and each quarter thereafter, (ii) a maximum ratio of senior secured debt to consolidated EBITDA (the “Senior Secured Leverage Ratio,” as defined in the Credit Facility agreement) of not more than 4.75 to 1.00 as of September 30, 2017, 4.25 to 1.00 as of December 31, 2017, 3.75 to 1.00 as of March 31, 2018, 3.25 to 1.00 as of June 30, 2018 and 3.00 to 1.00 as of September 30, 2018 and each quarter thereafter and (iii) an interest coverage ratio of not less than 3.00 to 1.00. Under the Sixth Amendment, the Total Leverage Ratio covenant is eliminated until March 31, 2018 and the Senior Secured Leverage Ratio covenant becomes effective September 30, 2017. As of June 30, 2017 , we are in compliance with the covenants in effect as of such date. At June 30, 2017 , we had $29.2 million of cash on hand and would have had approximately $121 million of available borrowing capacity through our Credit Facility, after giving effect to the Sixth Amendment and the application of the proceeds from the Offering. In connection with the renewal of our Credit Facility and subsequent amendments, we are amortizing $3.7 million of associated debt issuance costs over the life of the Credit Facility as of June 30, 2017 . In order to secure our casualty insurance programs, we are required to post letters of credit generally issued by a bank as collateral. A letter of credit commits the issuer to remit specified amounts to the holder if the holder demonstrates that we failed to meet our obligations under the letter of credit. If this were to occur, we would be obligated to reimburse the issuer for any payments the issuer was required to remit to the holder of the letter of credit. We were contingently liable for outstanding stand-by letters of credit totaling $20.0 million at June 30, 2017 and $21.6 million at December 31, 2016 . Outstanding letters of credit reduce amounts available under our Credit Facility and are considered as having been funded for purposes of calculating our financial covenants under the Credit Facility. ASC 815, Derivatives and Hedging (“ASC 815”), requires that derivative instruments be recorded at fair value and included in the balance sheet as assets or liabilities. The accounting for changes in the fair value of a derivative instrument depends on the intended use of the derivative and the resulting designation, which is established at the inception date of a derivative. Special accounting for derivatives qualifying as fair value hedges allows derivatives’ gains and losses to offset related results on the hedged item in the statement of operations. For derivative instruments designated as cash flow hedges, changes in fair value, to the extent the hedge is effective, are recognized in other comprehensive income (loss) until the hedged item is recognized in earnings. Hedge effectiveness is measured at least quarterly based on the relative cumulative changes in fair value between the derivative contract and the hedged item over time. Credit risks related to derivatives include the possibility that the counter-party will not fulfill the terms of the contract. We consider counterparty credit risk to our derivative contracts when valuing our derivative instruments. Our borrowing of €12.3 million under the Credit Facility serves as an economic hedge of our net investment in our European operations as fluctuations in the fair value of the borrowing attributable to the U.S. Dollar/Euro spot rate will offset translation gains or losses attributable to our investment in our European operations. At June 30, 2017 , the €12.3 million borrowing had a U.S. Dollar value of $14.1 million . The amounts recognized in other comprehensive income, and reclassified into earnings, for the three and six months ended June 30, 2017 and 2016 , are as follows (in thousands): Gain (Loss) Recognized in Other Comprehensive Income (Loss) Gain (Loss) Reclassified from Other Comprehensive Income (Loss) to Earnings Loss Recognized in Other Comprehensive Income (Loss) Gain (Loss) Reclassified from Other Comprehensive Income (Loss) to Earnings Three Months Ended Three Months Ended Six Months Ended Six Months Ended (unaudited) (unaudited) (unaudited) (unaudited) 2017 2016 2017 2016 2017 2016 2017 2016 Net investment hedge $ (949 ) $ 310 $ — $ — $ (1,115 ) $ (243 ) $ — $ — The following table presents the fair value totals and balance sheet classification for derivatives designated as hedges under ASC 815 (in thousands): June 30, 2017 December 31, 2016 (unaudited) Classification Balance Sheet Location Fair Value Classification Balance Sheet Location Fair Value Net investment hedge Liability Long-term debt $ (3,933 ) Liability Long-term debt $ (5,048 ) |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 6 Months Ended |
Jun. 30, 2017 | |
Compensation and Retirement Disclosure [Abstract] | |
EMPLOYEE BENEFIT PLANS | EMPLOYEE BENEFIT PLANS In connection with our acquisition of Furmanite, we assumed liabilities associated with the defined benefit pension plans of two foreign subsidiaries, one plan covering certain United Kingdom employees (the “U.K. Plan”) and the other covering certain Norwegian employees (the “Norwegian Plan”). As the Norwegian Plan represents approximately one percent of both the Company’s total pension plan liabilities and total pension plan assets, only the schedule of net periodic pension cost (credit) includes combined amounts from the two plans, while assumption and narrative information relates solely to the U.K. Plan. Net periodic pension cost (credit) for the U.K. and Norwegian Plans includes the following components (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 (unaudited) (unaudited) (unaudited) (unaudited) Service cost $ 4 $ 22 $ 8 $ 29 Interest cost 597 801 1,176 1,068 Expected return on plan assets (761 ) (820 ) (1,499 ) (1,093 ) Amortization of net actuarial loss 17 — 34 — Net periodic pension cost (credit) $ (143 ) $ 3 $ (281 ) $ 4 For the six months ended June 30, 2016 , the net periodic pension cost presented in the table above is from the date of the Furmanite acquisition. The expected long-term rate of return on invested assets is determined based on the weighted average of expected returns on asset investment categories as follows: 4.5% overall, 5.8% for equities and 1.8% for debt securities. We expect to contribute $4.0 million to the pension plan for 2017 , of which $2.6 million has been contributed through June 30, 2017 . |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 6 Months Ended |
Jun. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS We apply the provisions of ASC 820, which among other things, requires certain disclosures about assets and liabilities carried at fair value. As defined in ASC 820, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. We utilize market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. We primarily apply the market approach for recurring fair value measurements and endeavor to utilize the best information available. Accordingly, we utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. The use of unobservable inputs is intended to allow for fair value determinations in situations in which there is little, if any, market activity for the asset or liability at the measurement date. We are able to classify fair value balances based on the observability of those inputs. ASC 820 establishes a fair value hierarchy such that “Level 1” measurements include unadjusted quoted market prices for identical assets or liabilities in an active market, “Level 2” measurements include quoted market prices for identical assets or liabilities in an active market which have been adjusted for items such as effects of restrictions for transferability and those that are not quoted but are observable through corroboration with observable market data, including quoted market prices for similar assets, and “Level 3” measurements include those that are unobservable and of a highly subjective measure. The following table sets forth, by level within the fair value hierarchy, our financial assets and liabilities that are accounted for at fair value on a recurring basis as of June 30, 2017 and December 31, 2016 . As required by ASC 820, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement (in thousands): June 30, 2017 (unaudited) Quoted Prices in Active Markets for Identical Items (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Liabilities: Contingent consideration 1 $ — $ — $ 1,555 $ 1,555 Net investment hedge $ — $ (3,933 ) $ — $ (3,933 ) December 31, 2016 Quoted Prices in Active Markets for Identical Items (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Liabilities: Contingent consideration 1 $ — $ — $ 3,739 $ 3,739 Net investment hedge $ — $ (5,048 ) $ — $ (5,048 ) __________________________ 1 Inclusive of both current and noncurrent portions. There were no transfers in and out of Level 1, Level 2 and Level 3 during the six months ended June 30, 2017 and 2016 . The fair value of contingent consideration liabilities classified in the table above were estimated using a discounted cash flow technique with significant inputs that are not observable in the market and thus represents a Level 3 fair value measurement as defined in ASC 820. The significant inputs in the Level 3 measurement not supported by market activity include a combination of actual cash flows and probability-weighted assessments of expected future cash flows related to the acquired businesses, appropriately discounted considering the uncertainties associated with the obligation, and as calculated in accordance with the terms of the acquisition agreements. The following table represents the changes in the fair value of Level 3 contingent consideration liabilities (in thousands): Six Months Ended (unaudited) Balance, beginning of period $ 3,739 Accretion of liability 142 Foreign currency effects 126 Payment (1,278 ) Revaluation (1,174 ) Balance, end of period $ 1,555 |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 6 Months Ended |
Jun. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
SHARE-BASED COMPENSATION | SHARE-BASED COMPENSATION We have adopted stock incentive plans and other arrangements pursuant to which our Board of Directors (the “Board”) may grant stock options, restricted stock, stock units, stock appreciation rights, common stock or performance awards to officers, directors and key employees. At June 30, 2017 , there were approximately 0.9 million stock options, restricted stock units and performance awards outstanding to officers, directors and key employees. The exercise price, terms and other conditions applicable to each form of share-based compensation under our plans are generally determined by the Compensation Committee of our Board at the time of grant and may vary. Our share-based payments consist primarily of stock units, performance awards, common stock and stock options. In May 2016, our shareholders approved the 2016 Team, Inc. Equity Incentive Plan (the “Plan”), which replaced all of our previous equity compensation plans. The Plan authorizes the issuance of share-based awards representing up to 2,000,000 shares of common stock. Shares issued in connection with our share-based compensation are issued out of authorized but unissued common stock. In connection with the acquisition of Furmanite in February 2016, we assumed the share plan related to Furmanite employee grants. As provided for in the Merger Agreement, each option to purchase Furmanite common stock outstanding immediately prior to the closing of the acquisition was converted into an option to purchase Team common stock, adjusted by the 0.215 exchange ratio. Similarly, each previously existing Furmanite restricted share, restricted stock unit or performance stock unit outstanding immediately prior to the acquisition were converted into Team restricted stock units, also at the 0.215 exchange ratio. The converted awards generally have the same terms and conditions as the replaced awards, except the vesting of certain awards was accelerated to the acquisition date and any performance conditions associated with the Furmanite awards no longer apply. The fair value of the options was determined using a Black-Scholes model, while the fair value of the restricted stock units was determined based on the market price on the acquisition date. The fair value of the converted Furmanite awards was allocated between consideration transferred in the acquisition and future share-based compensation expense, based on past service completed and future service required. The converted Furmanite awards have been identified, as applicable, in the tables that follow. Compensation expense related to share-based compensation totaled $4.3 million and $4.7 million for the six months ended June 30, 2017 and 2016 , respectively. Share-based compensation expense reflects an estimate of expected forfeitures. At June 30, 2017 , $16.0 million of unrecognized compensation expense related to share-based compensation is expected to be recognized over a remaining weighted-average period of 2.5 years . The excess tax benefit derived when share-based awards result in a tax deduction for the Company was not material for the six months ended June 30, 2017 and 2016 . Stock units are settled with common stock upon vesting unless it is not legally feasible to issue shares, in which case the value of the award is settled in cash. We determine the fair value of each stock unit based on the market price on the date of grant. Stock units generally vest in annual installments over four years and the expense associated with the units is recognized over the same vesting period. We also grant common stock to our directors which typically vest immediately. Compensation expense related to stock units and director stock grants totaled $3.8 million and $4.1 million for the six months ended June 30, 2017 and 2016 , respectively. Transactions involving our stock units and director stock grants during the six months ended June 30, 2017 and 2016 are summarized below: Six Months Ended Six Months Ended (unaudited) (unaudited) No. of Stock Units Weighted Average Fair Value No. of Stock Units Weighted Average Fair Value (in thousands) (in thousands) Stock and stock units, beginning of period 535 $ 35.11 371 $ 36.26 Changes during the period: Granted 23 $ 25.66 86 $ 26.19 Assumed - Furmanite acquisition — $ — 40 $ 25.63 Vested and settled (48 ) $ 25.26 (34 ) $ 27.87 Cancelled (9 ) $ 33.15 (9 ) $ 27.81 Stock and stock units, end of period 501 $ 35.68 454 $ 34.22 We have a performance stock unit award program whereby we grant Long-Term Performance Stock Unit (“LTPSU”) awards to our executive officers. Under this program, the Company communicates “target awards” to the executive officers at the beginning of a performance period. LTPSU awards cliff vest with the achievement of the performance goals and completion of the required service period. Settlement occurs with common stock as soon as practicable following the vesting date. LTPSU awards granted on November 4, 2014 and October 15, 2015 are subject to a three -year performance period and a concurrent three -year service period. The performance target is based on results of operations over the three -year performance period with possible payouts ranging from 0% to 300% of the “target awards.” LTPSU awards granted on March 15, 2017 are subject to a two -year performance period and a concurrent two -year service period. For these awards, the performance goal is separated into three independent performance factors based on (i) relative shareholder total return (“RTSR”) as measured against a designated peer group, (ii) RTSR as measured against a designated index and (iii) results of operations over the two -year performance period, with possible payouts ranging from 0% to 200% of the “target awards” for the first two performance factors and ranging from 0% to 300% of the “target awards” for the third performance factor. We determine the fair value of each LTPSU award based on the market price on the date of grant. However, for the portion of the LTPSU awards that are subject to the RTSR performance factors, we determine the fair value of that portion of the award based on the results of a Monte Carlo simulation, which uses market-based inputs as of the date of grant to simulate future stock returns. Compensation expense is recognized on a straight-line basis over the vesting term. For LTPSU awards (or portions thereof) subject to a results of operations performance goal, compensation expense is recognized based upon the performance target that is probable of being met. For the portion of LTPSU awards subject to the RTSR performance factors, because the expected outcome is incorporated into the grant date fair value, compensation expense is not subsequently adjusted for changes in the expected or actual performance outcome. Compensation expense related to performance awards totaled $0.5 million and $0.4 million for the six months ended June 30, 2017 and 2016 , respectively. Transactions involving our performance awards during the six months ended June 30, 2017 and 2016 are summarized below: Six Months Ended Six Months Ended (unaudited) (unaudited) No. of Stock Units Weighted Average Fair Value No. of Stock Units Weighted Average Fair Value (in thousands) (in thousands) Long-term performance stock units, beginning of period 59 $ 37.16 59 $ 37.16 Changes during the period: Granted 166 $ 20.24 — $ — Vested and settled — $ — — $ — Cancelled — $ — — $ — Long-term performance stock units, end of period 225 $ 24.64 59 $ 37.16 We determine the fair value of each stock option at the grant date using a Black-Scholes model and recognize the resulting expense of our stock option awards over the period during which an employee is required to provide services in exchange for the awards, usually the vesting period. Compensation expense related to stock options for the six months ended June 30, 2017 and 2016 was not material. Our options typically vest in equal annual installments over a four -year service period. Expense related to an option grant is recognized on a straight line basis over the specified vesting period for those options. Stock options generally have a ten -year term. Transactions involving our stock options during the six months ended June 30, 2017 and 2016 are summarized below: Six Months Ended Six Months Ended (unaudited) (unaudited) No. of Options Weighted Average Exercise Price No. of Options Weighted Average Exercise Price (in thousands) (in thousands) Shares under option, beginning of period 203 $ 30.63 376 $ 25.71 Changes during the period: Granted — $ — — $ — Assumed - Furmanite acquisition — $ — 132 $ 33.20 Exercised (16 ) $ 27.91 (69 ) $ 15.52 Cancelled — $ — (4 ) $ 44.62 Expired (1 ) $ 32.05 (4 ) $ 30.33 Shares under option, end of period 186 $ 30.87 431 $ 29.39 Exercisable at end of period 186 $ 30.87 427 $ 29.30 Options exercisable at June 30, 2017 had a weighted-average remaining contractual life of 2.4 years . For total options outstanding at June 30, 2017 , the range of exercise prices and remaining contractual lives are as follows: Range of Prices No. of Options Weighted Average Exercise Price Weighted Average Remaining Life (in thousands) (in years) $20.18 to $30.28 29 $ 24.81 1.9 $30.29 to $40.38 150 $ 31.08 2.2 $40.39 to $50.47 7 $ 50.47 6.8 Total 186 $ 30.87 2.4 |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE LOSS | 6 Months Ended |
Jun. 30, 2017 | |
Equity [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE LOSS | ACCUMULATED OTHER COMPREHENSIVE LOSS A summary of changes in accumulated other comprehensive loss included within shareholders’ equity is as follows (in thousands): Six Months Ended Six Months Ended (unaudited) (unaudited) Foreign Currency Translation Adjustments Foreign Currency Hedge Defined Benefit Pension Plans Tax Provision Total Foreign Currency Translation Adjustments Foreign Currency Hedge Tax Provision Total Balance, beginning of period $ (31,973 ) $ 5,048 $ (10,518 ) $ 8,443 $ (29,000 ) $ (28,124 ) $ 4,567 $ 5,183 $ (18,374 ) Other comprehensive income (loss) 6,556 (1,115 ) 34 (1,230 ) 4,245 3,050 (243 ) (1,318 ) 1,489 Balance, end of period $ (25,417 ) $ 3,933 $ (10,484 ) $ 7,213 $ (24,755 ) $ (25,074 ) $ 4,324 $ 3,865 $ (16,885 ) The following table represents the related tax effects allocated to each component of other comprehensive income (loss) (in thousands): Six Months Ended Six Months Ended (unaudited) (unaudited) Gross Amount Tax Effect Net Amount Gross Amount Tax Effect Net Amount Foreign currency translation adjustments $ 6,556 $ (1,649 ) $ 4,907 $ 3,050 $ (1,414 ) $ 1,636 Foreign currency hedge (1,115 ) 426 (689 ) (243 ) 96 (147 ) Defined benefit pension plans 34 (7 ) 27 — — — Total $ 5,475 $ (1,230 ) $ 4,245 $ 2,807 $ (1,318 ) $ 1,489 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Con Ed Matter —We have, from time to time, provided temporary leak repair services to the steam system of Consolidated Edison Company of New York (“Con Ed”) located in New York City. In July 2007, a Con Ed steam main located in midtown Manhattan ruptured resulting in one death and other injuries and property damage. As of June 30, 2017 , sixty-eight lawsuits are currently pending against Con Ed, the City of New York and Team in the Supreme Court of New York, alleging that our temporary leak repair services may have contributed to the cause of the rupture, allegations which we dispute. The lawsuits seek generally unspecified compensatory damages for personal injury, property damage and business interruption. Additionally, Con Ed is alleging that our contract with Con Ed requires us to fully indemnify and defend Con Ed for all claims asserted against Con Ed including those amounts that Con Ed has paid to settle with certain plaintiffs for undisclosed sums as well as Con Ed’s own alleged damages to its infrastructure. Con Ed filed an action to join Team and the City of New York as defendants in all lawsuits filed against Con Ed that did not include Team and the City of New York as direct defendants. We are vigorously defending the lawsuits and Con Ed’s claim for indemnification. We are unable to estimate the amount of liability to us, if any, associated with these lawsuits and the claim for indemnification. We filed a motion to dismiss in April 2016. Based upon the current briefing schedule, a ruling on the motion is anticipated in the fall of 2017. We maintain insurance coverage, subject to a deductible limit of $250,000 , which we believe should cover these claims. We have not accrued any liability in excess of the deductible limit for the lawsuits. We do not believe the ultimate outcome of these matters will have a material adverse effect on our financial position, results of operations, or cash flows. A trial on the merits is scheduled to commence in October 2017. Patent Infringement Matters —In December 2014, our subsidiary, Quest Integrity Group, LLC, filed three patent infringement lawsuits against three different defendants, two in the U.S. District of Delaware (the “Delaware Cases”) and one in the U.S. District of Western Washington (the “Washington Case”). Quest Integrity alleges that the three defendants infringed Quest Integrity’s patent, entitled “2D and 3D Display System and Method for Furnace Tube Inspection”. This Quest Integrity patent generally teaches a system and method for displaying inspection data collected during the inspection of furnace tubes in petroleum and petro-chemical refineries. The subject patent litigation is specific to the visual display of the collected data and does not relate to Quest Integrity’s underlying advanced inspection technology. In these lawsuits Quest Integrity is seeking temporary and permanent injunctive relief, as well as monetary damages. Defendants have denied they infringe any valid claim of Quest Integrity’s patent, and have asserted declaratory judgment counterclaims that the patent at issue is invalid and/or unenforceable, and not infringed. In June 2015, the U.S. District of Delaware denied our motions for preliminary injunctive relief in the Delaware Cases (that is, our request that the defendants stop using our patented systems and methods during the pendency of the actions). In March 2017, the judge in the Delaware Cases granted summary judgment against Quest Integrity, finding certain patent claims of the asserted patent invalid. In August 2017, the judge in the Washington Case granted summary judgment against Quest Integrity based on the Delaware Cases ruling. Quest Integrity is in the process of appealing both Delaware Cases and is planning to appeal the Washington Case. We are involved in various other lawsuits and are subject to various claims and proceedings encountered in the normal conduct of business. In our opinion, any uninsured losses that might arise from these lawsuits and proceedings will not have a materially adverse effect on our consolidated financial statements. We establish a liability for loss contingencies, when information available to us indicates that it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. |
ENTITY WIDE DISCLOSURES
ENTITY WIDE DISCLOSURES | 6 Months Ended |
Jun. 30, 2017 | |
Segment Reporting [Abstract] | |
ENTITY WIDE DISCLOSURES | ENTITY WIDE DISCLOSURES ASC 280, Segment Reporting , requires us to disclose certain information about our operating segments where operating segments are defined as “components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance.” We conduct operations in three segments: TeamQualspec, TeamFurmanite and Quest Integrity. All three operating segments operate under a business segment manager who reports directly to Team’s Chief Executive Officer who operates as the chief operating decision maker. Discontinued operations are not allocated to the segments. Segment data for our three operating segments are as follows (in thousands): Three Months Ended Six Months Ended 2017 2016 2017 2016 (unaudited) (unaudited) (unaudited) (unaudited) Revenues: TeamQualspec $ 158,412 $ 157,238 $ 301,368 $ 293,500 TeamFurmanite 132,564 159,681 254,386 260,275 Quest Integrity 21,280 19,521 43,056 33,519 Total $ 312,256 $ 336,440 $ 598,810 $ 587,294 Three Months Ended Six Months Ended 2017 2016 2017 2016 (unaudited) (unaudited) (unaudited) (unaudited) Operating income (loss): TeamQualspec $ 10,529 $ 16,677 $ 18,654 $ 24,621 TeamFurmanite 5,385 11,982 5,836 19,021 Quest Integrity 3,889 3,221 8,080 2,464 Corporate and shared support services (26,496 ) (17,872 ) (51,351 ) (39,478 ) Total $ (6,693 ) $ 14,008 $ (18,781 ) $ 6,628 Three Months Ended Six Months Ended 2017 2016 2017 2016 (unaudited) (unaudited) (unaudited) (unaudited) Capital expenditures: TeamQualspec $ 2,852 $ 2,222 $ 5,364 $ 5,211 TeamFurmanite 3,580 3,154 7,900 6,131 Quest Integrity 827 263 1,273 894 Corporate and shared support services 685 4,749 4,125 9,732 Total $ 7,944 $ 10,388 $ 18,662 $ 21,968 Three Months Ended Six Months Ended 2017 2016 2017 2016 (unaudited) (unaudited) (unaudited) (unaudited) Depreciation and amortization: TeamQualspec $ 4,861 $ 5,051 $ 9,716 $ 10,105 TeamFurmanite 5,797 6,020 11,660 9,344 Quest Integrity 1,096 1,284 2,365 2,566 Corporate and shared support services 1,300 515 2,274 878 Total $ 13,054 $ 12,870 $ 26,015 $ 22,893 Separate measures of Team’s assets by operating segment are not produced or utilized by management to evaluate segment performance. A geographic breakdown of our revenues for the three and six months ended June 30, 2017 and 2016 and total assets as of June 30, 2017 and December 31, 2016 are as follows (in thousands): Three Months Ended Six Months Ended 2017 2016 2017 2016 (unaudited) (unaudited) (unaudited) (unaudited) Total Revenues: 1 United States $ 226,035 $ 241,064 $ 441,247 $ 443,117 Canada 37,444 41,836 64,692 63,821 Europe 30,229 33,152 56,228 50,041 Other foreign countries 18,548 20,388 36,643 30,315 Total $ 312,256 $ 336,440 $ 598,810 $ 587,294 June 30, 2017 December 31, 2016 (unaudited) Total assets: United States $ 769,902 $ 788,780 Canada 65,989 66,056 Europe 235,614 234,847 Other foreign countries 55,072 57,735 Total $ 1,126,577 $ 1,147,418 ______________ 1 Revenues attributable to individual countries/geographic areas are based on the country of domicile of the legal entity that performs the work. |
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS | 6 Months Ended |
Jun. 30, 2017 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DISCONTINUED OPERATIONS | DISCONTINUED OPERATIONS As part of our acquisition of Furmanite, we acquired a pipeline inspection business from Furmanite that primarily performs process management inspection services to contractors and operators participating primarily in the midstream oil and gas market in the United States. We previously concluded that this business was not a strategic fit for Team and we completed the sale of the business in December 2016. We concluded that this business qualified as a discontinued operation upon its acquisition under GAAP. Therefore, we classified the operating results as discontinued operations in our consolidated statements of operations. Discontinued operations does not include any allocation of corporate overhead expense or interest expense. Income from discontinued operations, net of income tax, consists of the following (in thousands): Three Months Ended Six Months Ended (unaudited) (unaudited) Revenues $ 15,906 $ 21,674 Operating expenses 14,686 19,961 Gross margin 1,220 1,713 Selling, general and administrative expenses 577 858 Income from discontinued operations, before income tax 643 855 Less: Provision for income taxes 257 343 Income from discontinued operations, net of income tax $ 386 $ 512 For the three and six months ended June 30, 2016 , there were no material amounts of depreciation, amortization, capital expenditures or significant operating or investing non-cash items related to discontinued operations. |
EXIT COSTS AND OTHER RELATED CH
EXIT COSTS AND OTHER RELATED CHARGES (CREDITS) | 6 Months Ended |
Jun. 30, 2017 | |
EXIT COSTS AND OTHER RELATED CHARGES (CREDITS) [Abstract] | |
Exit Costs and Other Related Charges (Credits) | EXIT COSTS AND OTHER RELATED CHARGES (CREDITS) Exit costs and other related charges (credits) are primarily associated with the restructuring/closure of the acquired Furmanite operations in Belgium and the Netherlands in the TeamFurmanite segment. Due to continued economic softness in these particular markets and unfavorable costs structures, we committed to a plan to exit these operations in the fourth quarter of 2016 and communicated the plan to the affected employees. The closures are now substantially complete. During the six months ended June 30, 2017, we recorded a reduction to severance costs of $0.2 million and a disposal gain of $1.1 million . The disposal gain resulted from an asset sale of the Furmanite operations in Belgium, which was completed during the first quarter of 2017, whereby we conveyed the business operations, $0.3 million cash and approximately $0.2 million of other assets to the purchaser in exchange for the assumption by the purchaser of certain liabilities, primarily severance-related liabilities of $1.6 million associated with the employees who transferred to the purchaser in connection with the transaction. A rollforward of our accrued severance liability associated with these exit activities is presented below (in thousands): Six Months Ended (unaudited) Balance, beginning of period $ 4,846 Charges (credits), net (159 ) Payments (2,694 ) Disposal (1,601 ) Foreign currency adjustments 41 Balance, end of period $ 433 With respect to these exit activities, to date we have incurred cumulatively $4.7 million of severance-related costs and an impairment loss on property, plant and equipment of $0.7 million , partially offset by a disposal gain of $1.1 million . We estimate that we will incur additional costs associated with this restructuring/closure, primarily related to lease terminations that have not yet been finalized, of less than $1 million during the remainder of 2017. |
REPURCHASE OF COMMON STOCK
REPURCHASE OF COMMON STOCK | 6 Months Ended |
Jun. 30, 2017 | |
Equity [Abstract] | |
REPURCHASE OF COMMON STOCK | REPURCHASE OF COMMON STOCK On June 23, 2014, our Board authorized an increase in the stock repurchase plan limit to $50.0 million . We did not repurchase any shares during the six months ended June 30, 2017 . At June 30, 2017 , $7.9 million remained available to repurchase shares under the stock repurchase plan. Under the Credit Facility, the Company is limited in its ability to make stock repurchases unless the Total Leverage Ratio is below 2.50 to 1.00. Notwithstanding such provision, in the event that after giving pro forma effect to such repurchase, if Liquidity (as defined in the Credit Agreement) is at least $15.0 million and the Total Leverage Ratio is less than or equal to 4.00 to 1.00, the Credit Facility generally permits the Company to make stock repurchases provided that such repurchases, plus any payments of cash dividends, do not exceed $50.0 million in the aggregate. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | SUBSEQUENT EVENTS Issuance of Convertible Senior Notes. On July 31, 2017, we issued $230.0 million principal amount of 5.00% Convertible Senior Notes due 2023 (the “Notes”) in a private offering to qualified institutional buyers (as defined in the Securities Act of 1933, as amended (the “Securities Act”)) pursuant to Rule 144A under the Securities Act (the “Offering”). The Notes are senior unsecured obligations of the Company. The Notes bear interest at rate of 5.0% per year, payable semiannually in arrears on February 1 and August 1 of each year, beginning on February 1, 2018. The Notes will mature on August 1, 2023 unless repurchased, redeemed or converted in accordance with their terms prior to such date. The Notes will be convertible at an initial conversion rate of 46.0829 shares of our common stock per $1,000 principal amount of the Notes, which is equivalent to an initial conversion price of approximately $21.70 per share, which represents a conversion premium of 40% to the last reported sale price of $15.50 per share on the New York Stock Exchange on July 25, 2017, the date the pricing of the Notes was completed. The conversion rate, and thus the conversion price, may be adjusted under certain circumstances as described in the indenture governing the Notes. Holders may convert their Notes at their option prior to the close of business on the business day immediately preceding May 1, 2023, but only under the following circumstances: • during any calendar quarter commencing after the calendar quarter ending on December 31, 2017 (and only during such calendar quarter), if the last reported sale price of our common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; • during the five business day period after any five consecutive trading day period (the “measurement period”) in which the trading price per $1,000 principal amount of Notes for each trading day of such measurement period was less than 98% of the product of the last reported sale price of our common stock and the conversion rate on such trading day; • if we call any or all of the Notes for redemption, at any time prior to the close of business on the business day immediately preceding the redemption date; or; • upon the occurrence of specified corporate events described in the indenture governing the Notes. On or after May 1, 2023 until the close of business on the business day immediately preceding the maturity date, holders may, at their option, convert their Notes at any time, regardless of the foregoing circumstances. Because the Notes could be convertible in full into more than 19.99 percent of our outstanding common stock, we are required by the listing rules of the New York Stock Exchange to obtain the approval of the holders of our outstanding shares of common stock before the Notes may be converted into more than 5,964,858 shares of common stock. The Notes are initially convertible into 10,599,067 shares of common stock. We have agreed to seek approval of the holders of our outstanding shares of common stock at our next annual stockholders’ meeting. The Notes will be convertible into, subject to various conditions, cash or shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, in each case, at the Company’s election, except that prior to receipt of the requisite stockholder approval, the Company will settle conversion in cash or a combination of cash and shares of common stock. If holders elect to convert the Notes in connection with certain fundamental change transactions described in the indenture governing the Notes, we will, under certain circumstances described in the indenture governing the Notes, increase the conversion rate for the Notes so surrendered for conversion. We may not redeem the Notes prior to August 5, 2021. We will have the option to redeem all or any portion of the Notes on or after August 5, 2021, if certain conditions (including that our common stock is trading at or above 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including the trading day immediately preceding the date on which the Company provides notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption at a redemption price equal to 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. Net proceeds received from the Offering were approximately $222.6 million after deducting discounts, commissions and estimated expenses. We used $160.0 million of the net proceeds to repay all outstanding borrowings under the term loan portion of our Credit Facility and $62.6 million of the net proceeds to repay a portion of the outstanding borrowings under the revolving portion of our Credit Facility, which may be subsequently reborrowed for general corporate purposes. Cost Savings Initiative. On July 24, 2017, we announced our commitment to a cost savings initiative to take direct actions to reduce our overall cost structure given the ongoing weak and uncertain macro environment in the industries in which we operate. The cost savings initiative includes reductions to discretionary spending and the elimination of certain employee positions. Based upon estimates from our current planning model for workforce reductions, we expect that such actions proposed to be taken would ultimately reduce our annual operating expenses by approximately $30 million , with the impact to operating results of those reduction synergies beginning in the third quarter of 2017. The resulting severance charges, which will be recorded in the third quarter of 2017, are expected to be approximately between $4 million and $6 million , substantially all of which will result in future cash expenditures. We expect to complete the cost savings initiative in the third quarter of 2017. Although management expects that cost savings will result from these actions, there can be no assurance that such results will be achieved. Cancellation of At-The-Market Offering Program. On July 31, 2017, we delivered written notice to Merrill Lynch, Pierce, Fenner & Smith Incorporated, Raymond James & Associates, Inc. and SunTrust Robinson Humphrey, Inc. (collectively, the “Agents”) of our termination of the ATM Equity Offering SM Sales Agreement, dated November 28, 2016 (the “Sales Agreement”), pursuant to Section 9(a) thereof. The Sales Agreement is terminable by us or the Agents for any reason at any time without penalty upon three days’ written notice to the other party. Under the Sales Agreement, we were entitled to issue and sell, from time to time, through or to the Agents, shares of our common stock, having an aggregate offering price of up to $150 million in an “at-the-market” offering program (the “ATM Program”). From November 28, 2016, when the ATM Program was announced, until December 2016, approximately 168,000 shares of common stock were sold under the ATM Program, generating approximately $6 million in proceeds. No shares of common stock were sold under the ATM Program during 2017. Credit Agreement Amendment. Refer to Note 8 for information on the Sixth Amendment to our banking credit facility that we entered into on July 31, 2017 (but effective as of June 30, 2017). |
SUMMARY OF SIGNIFICANT ACCOUN25
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES (Policies) | 6 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
Basis for presentation | Basis for presentation. These interim financial statements are unaudited, but in the opinion of our management, reflect all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of results for such periods. The consolidated condensed balance sheet at December 31, 2016 is derived from the December 31, 2016 audited consolidated financial statements. The results of operations for any interim period are not necessarily indicative of results for the full year. These financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in our Annual Report on Form 10-K for the year ended December 31, 2016 . |
Use of estimates | Use of estimates. Our accounting policies conform to Generally Accepted Accounting Principles in the U.S. (“GAAP”). The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and judgments that affect our reported financial position and results of operations. We review significant estimates and judgments affecting our consolidated financial statements on a recurring basis and record the effect of any necessary adjustments prior to their publication. Estimates and judgments are based on information available at the time such estimates and judgments are made. Adjustments made with respect to the use of these estimates and judgments often relate to information not previously available. Uncertainties with respect to such estimates and judgments are inherent in the preparation of financial statements. Estimates and judgments are used in, among other things, (1) aspects of revenue recognition, (2) valuation of acquisition related tangible and intangible assets and assessments of all long lived assets for possible impairment, (3) estimating various factors used to accrue liabilities for workers’ compensation, auto, medical and general liability, (4) establishing an allowance for uncollectible accounts receivable, (5) estimating the useful lives of our assets, (6) assessing future tax exposure and the realization of tax assets, (7) estimating the value associated with contingent consideration payment arrangements and (8) selecting assumptions used in the measurement of costs and liabilities associated with defined benefit pension plans. Our most significant accounting policies are described below. |
Fair value of financial instruments | Fair value of financial instruments . Our financial instruments consist primarily of cash, cash equivalents, accounts receivable, accounts payable and debt obligations. The carrying amount of cash, cash equivalents, trade accounts receivable and trade accounts payable are representative of their respective fair values due to the short-term maturity of these instruments. The fair value of our banking facility is representative of the carrying value based upon the variable terms and management’s opinion that the current rates available to us with the same maturity and security structure are equivalent to that of the banking facility. |
Cash and cash equivalents | Cash and cash equivalents . Cash and cash equivalents consist of all demand deposits and funds invested in highly liquid short-term investments with original maturities of three months or less. Included in our cash and cash equivalents at June 30, 2017 and December 31, 2016 is $9.4 million and $14.0 million , respectively, of cash in certain foreign subsidiaries (located primarily in Europe and Asia) where earnings are considered by the Company to be permanently reinvested. In the event that some or all of this cash were to be repatriated, we would be required to accrue and pay additional taxes. While not legally restricted from repatriating this cash, we consider all undistributed earnings of these foreign subsidiaries to be indefinitely reinvested and access to cash to be limited. |
Inventory | Inventory. We use the first-in, first-out method to determine inventory cost, except that inventory cost of Furmanite LLC (formerly Furmanite Corporation, “Furmanite”) and its subsidiaries, which we acquired on February 29, 2016 (see Note 2), is determined based on weighted-average cost. Inventory includes material, labor and certain fixed overhead costs. Inventory is stated at the lower of cost and net realizable value. Inventory quantities on hand are reviewed periodically and carrying cost is reduced to net realizable value for inventories for which their cost exceeds their utility. The cost of inventories consumed or products sold are included in operating expenses. |
Property, plant and equipment | Property, plant and equipment. Property, plant and equipment are stated at cost less accumulated depreciation and amortization. Leasehold improvements are amortized over the shorter of their respective useful life or the lease term. Depreciation and amortization of assets are computed by the straight-line method over the following estimated useful lives of the assets: Classification Useful Life Buildings 20-40 years Enterprise Resource Planning (“ERP”) System 15 years Leasehold improvements 2-15 years Machinery and equipment 2-12 years Furniture and fixtures 2-10 years Computers and computer software 2-5 years Automobiles 2-5 years |
Goodwill and intangible assets | Goodwill and intangible assets. We allocate the purchase price of acquired businesses to their identifiable tangible assets and liabilities, such as accounts receivable, inventory, property, plant and equipment, accounts payable and accrued liabilities. We also allocate a portion of the purchase price to identifiable intangible assets, such as non-compete agreements, trademarks, trade names, patents, technology and customer relationships. Allocations are based on estimated fair values of assets and liabilities. We use all available information to estimate fair values including quoted market prices, the carrying value of acquired assets, and widely accepted valuation techniques such as discounted cash flows. Certain estimates and judgments are required in the application of the fair value techniques, including estimates of future cash flows, selling prices, replacement costs, economic lives and the selection of a discount rate, and it involves using of “Level 3” measurements as defined in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820 Fair Value Measurements and Disclosur e (“ASC 820”). Deferred taxes are recorded for any differences between the assigned values and tax bases of assets and liabilities. Estimated deferred taxes are based on available information concerning the tax bases of assets acquired and liabilities assumed and loss carryforwards at the acquisition date, although such estimates may change in the future as additional information becomes known. Any remaining excess of cost over allocated fair values is recorded as goodwill. We typically engage third-party valuation experts to assist in determining the fair values for both the identifiable tangible and intangible assets. The judgments made in determining the estimated fair value assigned to each class of assets acquired and liabilities assumed, as well as asset lives, could materially impact our results of operations. Goodwill and intangible assets acquired in a purchase business combination and determined to have an indefinite useful life are not amortized, but are instead tested for impairment at least annually in accordance with the provisions of the ASC 350 Intangibles—Goodwill and Other (“ASC 350”). Intangible assets with estimated useful lives are amortized over their respective estimated useful lives to their estimated residual values and reviewed for impairment in accordance with ASC 350. We assess goodwill for impairment at the reporting unit level, which we have determined to be the same as our operating segments. Each reporting unit has goodwill relating to past acquisitions. The test for impairment is performed at the reporting unit level which is deemed to be at the operating segment level. Prior to January 1, 2017, the test was a two-step process that involved comparing the estimated fair value of each reporting unit to the reporting unit’s carrying value, including goodwill. If the fair value of a reporting unit exceeded its carrying amount, the goodwill of the reporting unit was not considered impaired; therefore, the second step of the impairment test would not be deemed necessary. If the carrying amount of the reporting unit exceeded its fair value, we would then perform the second step to the goodwill impairment test, which involved the determination of the fair value of a reporting unit’s assets and liabilities as if those assets and liabilities had been acquired/assumed in a business combination at the impairment testing date, to measure the amount of goodwill impairment loss to be recorded. However, as discussed under “Newly Adopted Accounting Principles—ASU No. 2017-04” below, effective January 1, 2017 we prospectively adopted a new accounting principle that eliminated the second step of the goodwill impairment test. Therefore, for goodwill impairment tests occurring after January 1, 2017, if the carrying value of a reporting unit exceeds its fair value, we will measure any goodwill impairment losses as the amount by which the carrying amount of a reporting unit exceeds its fair value, not to exceed the total amount of goodwill allocated to that reporting unit. Our goodwill annual test date is December 1. We performed our most recent annual impairment test as of December 1, 2016 and concluded that there was no impairment. The fair values of the reporting units at December 1, 2016 were determined using a combination of income and market approaches. The income approach was based on discounted cash flow models with estimated cash flows based on internal forecasts of revenue and expenses over a five -year period plus a terminal value period. The income approach estimated fair value by discounting each reporting unit’s estimated future cash flows using a discount rate that approximated our weighted-average cost of capital. Major assumptions applied in an income approach include forecasted growth rates as well as forecasted profitability by reporting unit. Additionally, we considered two market approaches that were based on multiples, based on observable market data, of certain financial metrics of our reporting units to arrive at fair value. We applied equal weighting to each of the income and the two market approaches. The fair value derived from these approaches, in the aggregate, approximated our market capitalization. At December 1, 2016, our market capitalization exceeded the carrying value of our consolidated net assets by approximately $437 million or 80% , and the fair value of each reporting unit significantly exceeded its respective carrying amount as of that date. As of June 30, 2017, we determined that there were sufficient indicators to trigger an interim goodwill impairment analysis. The indicators included, among other factors, the continued market softness, primarily in our TeamFurmanite segment, and the related impacts on our financial results and our stock price. The Company’s interim impairment goodwill test was prepared using a similar methodology as described above for its most recent annual impairment test. The June 30, 2017 interim goodwill impairment test indicated no impairment as the fair values of each reporting unit exceeded their carrying values. On June 30, 2017, our market capitalization exceeded the carrying value of our consolidated net assets by approximately $175 million or 33% . The fair value of the Quest Integrity reporting unit significantly exceeded its carrying value. With respect to our TeamQualspec and TeamFurmanite reporting unit, the fair values exceeded carrying values by 65% and 46% , respectively. There was $358.6 million and $355.8 million of goodwill at June 30, 2017 and December 31, 2016 , respectively. A rollforward of goodwill for the six months ended June 30, 2017 is as follows (in thousands): Six Months Ended (unaudited) TeamQualspec TeamFurmanite Quest Integrity Total Balance at beginning of period $ 213,475 $ 109,059 $ 33,252 $ 355,786 Foreign currency adjustments 1,050 1,038 702 2,790 Balance at end of period $ 214,525 $ 110,097 $ 33,954 $ 358,576 |
Income taxes | Income taxes. We follow the guidance of ASC 740 Income Taxes (“ASC 740”), which requires that we use the asset and liability method of accounting for deferred income taxes and provide deferred income taxes for all significant temporary differences. As part of the process of preparing our consolidated financial statements, we are required to estimate our income taxes in each of the jurisdictions in which we operate. This process involves estimating our actual current tax payable and related tax expense together with assessing temporary differences resulting from differing treatment of certain items, such as depreciation, for tax and accounting purposes. These differences can result in deferred tax assets and liabilities, which are included within our consolidated balance sheets. In accordance with ASC 740, we are required to assess the likelihood that our deferred tax assets will be realized and, to the extent we believe that it is more likely than not (a likelihood of more than 50% ) that some portion or all of the deferred tax assets will not be realized, we must establish a valuation allowance. We consider all available evidence to determine whether, based on the weight of the evidence, a valuation allowance is needed. Evidence used includes information about our current financial position and our results of operations for the current and preceding years, as well as all currently available information about future years, including our anticipated future performance, the reversal of existing taxable temporary differences and tax planning strategies. |
Workers' compensation, auto, medical and general liability accruals | Workers’ compensation, auto, medical and general liability accruals. In accordance with ASC 450 Contingencies (“ASC 450”), we record a loss contingency when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. We review our loss contingencies on an ongoing basis to ensure that we have appropriate reserves recorded on our balance sheet. These reserves are based on historical experience with claims incurred but not received, estimates and judgments made by management, applicable insurance coverage for litigation matters, and are adjusted as circumstances warrant. For workers’ compensation, our self-insured retention is $1.0 million and our automobile liability self-insured retention is currently $500,000 per occurrence. For general liability claims, we have an effective self-insured retention of $3.0 million per occurrence. For medical claims, our self-insured retention is $350,000 per individual claimant determined on an annual basis. For environmental liability claims, our self-insured retention is $1.0 million per occurrence. We maintain insurance for claims that exceed such self-retention limits. The insurance is subject to terms, conditions, limitations and exclusions that may not fully compensate us for all losses. Our estimates and judgments could change based on new information, changes in laws or regulations, changes in management’s plans or intentions, or the outcome of legal proceedings, settlements or other factors. If different estimates and judgments were applied with respect to these matters, it is likely that reserves would be recorded for different amounts. |
Revenue recognition | Revenue recognition. Most of our projects are short-term in nature and we predominantly derive revenues by providing a variety of industrial services on a time and material basis. For all of these services our revenues are recognized when services are rendered or when product is shipped to the job site and risk of ownership passes to the customer. However, due to various contractual terms with our customers, at the end of any reporting period, there may be earned but unbilled revenue that is accrued to properly match revenues with related costs. At June 30, 2017 and December 31, 2016 , the amount of earned but unbilled revenue included in accounts receivable was $80.0 million and $39.7 million , respectively. |
Allowance for doubtful accounts | Allowance for doubtful accounts. In the ordinary course of business, a portion of our accounts receivable are not collected due to billing disputes, customer bankruptcies, dissatisfaction with the services we performed and other various reasons. We establish an allowance to account for those accounts receivable that we estimate will eventually be deemed uncollectible. The allowance for doubtful accounts is based on a combination of our historical experience and management’s review of long outstanding accounts receivable. |
Concentration of credit risk | Concentration of credit risk. No single customer accounts for more than 10% of consolidated revenues. |
Earnings (loss) per share | Earnings (loss) per share. Basic earnings (loss) per share is computed by dividing income (loss) from continuing operations, income (loss) from discontinued operations or net income (loss) available to Team stockholders by the weighted-average number of shares of common stock outstanding during the year. Diluted earnings (loss) per share is computed by dividing income (loss) from continuing operations, income (loss) from discontinued operations or net income (loss) available to Team stockholders by the sum of (1) the weighted-average number of shares of common stock outstanding during the period and (2) the dilutive effect of the assumed exercise of share-based compensation using the treasury stock method. Amounts used in basic and diluted earnings (loss) per share, for the three and six months ended June 30, 2017 and 2016 , are as follows (in thousands): Three Months Ended Six Months Ended 2017 2016 2017 2016 (unaudited) (unaudited) (unaudited) (unaudited) Weighted-average number of basic shares outstanding 29,826 29,452 29,815 26,738 Stock options, stock units and performance awards — 76 — 70 Total shares and dilutive securities 29,826 29,528 29,815 26,808 For both the three and six months ended June 30, 2017 , all outstanding share-based compensation awards were excluded from the calculation of diluted earnings (loss) per share because their inclusion would be antidilutive due to the loss from continuing operations in both periods. There were 0.3 million and 0.4 million stock options outstanding during the three months and six months ended June 30, 2016, respectively, excluded from the computation of diluted earnings per share because the options’ exercise prices were greater than the average market price of common shares during the periods. |
Foreign currency | Foreign currency . For subsidiaries whose functional currency is not the U.S. Dollar, assets and liabilities are translated at period ending rates of exchange and revenues and expenses are translated at period average exchange rates. Translation adjustments for the asset and liability accounts are included as a separate component of accumulated other comprehensive loss in stockholders’ equity. Foreign currency transaction gains and losses are included in our statements of operations. We utilize monthly foreign currency swap contracts to reduce exposures to changes in foreign currency exchange rates related to our largest exposures including, but not limited to, the Brazilian Real, British Pound, Canadian Dollar, Euro, Malaysian Ringgit, Mexican Peso and Singapore Dollar. The impact from these swap contracts was not material for the three and six months ended June 30, 2017 or 2016 nor as of the balance sheet dates of June 30, 2017 and December 31, 2016 . |
Defined benefit pension plans | Defined benefit pension plans. Pension benefit costs and liabilities are dependent on assumptions used in calculating such amounts. The primary assumptions include factors such as discount rates, expected investment return on plan assets, mortality rates and retirement rates. These rates are reviewed annually and adjusted to reflect current conditions. These rates are determined based on reference to yields. The expected return on plan assets is derived from detailed periodic studies, which include a review of asset allocation strategies, anticipated future long-term performance of individual asset classes, risks (standard deviations) and correlations of returns among the asset classes that comprise the plans’ asset mix. While the studies give appropriate consideration to recent plan performance and historical returns, the assumptions are primarily long-term, prospective rates of return. Mortality and retirement rates are based on actual and anticipated plan experience. In accordance with GAAP, actual results that differ from the assumptions are accumulated and are subject to amortization over future periods and, therefore, generally affect recognized expense in future periods. While we believe that the assumptions used are appropriate, differences in actual experience or changes in assumptions may affect the pension obligation and future expense. |
Newly Adopted Accounting Principles and Accounting Principles Not Yet Adopted | Newly Adopted Accounting Principles ASU No. 2015-11 . In July 2015, the FASB issued Accounting Standards Update (“ASU”) No. 2015-11, Inventory—Simplifying the Measurement of Inventory (“ASU 2015-11”), which requires entities that measure inventory using the first-in, first-out or average cost methods to measure inventory at the lower of cost and net realizable value to more closely align the measurement of inventory in GAAP with International Financial Reporting Standards. Net realizable value is defined as estimated selling price in the ordinary course of business less reasonably predictable costs of completion, disposal and transportation. Our adoption, on a prospective basis, of ASU 2015-11 on January 1, 2017 had no impact on our results of operations, financial position or cash flows. ASU No. 2015-17 . In November 2015, the FASB issued ASU No. 2015-17, Income Taxes: Balance Sheet Classification of Deferred Taxes (“ASU 2015-17”), which simplifies the presentation of deferred taxes by requiring deferred tax assets and liabilities be classified as noncurrent on the balance sheet. As a result of our prospective adoption of ASU 2015-17 on January 1, 2017, all deferred tax assets and liabilities have been classified as noncurrent on our consolidated balance sheet at June 30, 2017 , while our consolidated balance sheet at December 31, 2016 reflects classifications of deferred tax assets and liabilities in accordance with previous GAAP. The adoption of ASU 2015-17 had no impact on our results of operations or cash flows. ASU No. 2016-09. In March 2016, the FASB issued ASU No. 2016-09, Compensation–Stock Compensation: Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”), which makes several modifications to GAAP related to share-based payments including the accounting for forfeitures, employee taxes and the financial statement presentation and timing of recognition of excess tax benefits or deficiencies. Specifically, ASU 2016-09 requires excess tax benefits and deficiencies to be recognized in the statements of operations as part of the provision for income tax (benefit) whereas previous guidance generally resulted in such amounts being recognized in additional paid-in capital. ASU 2016-09 also clarifies the statement of cash flows presentation for certain items associated with share-based awards. We adopted ASU 2016-09 on January 1, 2017. With respect to the requirement to recognize excess tax benefits or deficiencies in the statements of operations, we began recognizing such amounts, on a prospective basis, effective January 1, 2017 as a component of our provision (benefit) for income taxes as a discrete item. For the three and six months ended June 30, 2017 , an immaterial amount of net excess tax benefits are included within the income tax benefit in the consolidated statement of operations. Also, beginning prospectively on January 1, 2017, excess tax benefits from share-based awards are classified as operating activities instead of financing activities in our consolidated statements of cash flows, as required by the ASU. Additionally, in connection with the adoption, we recorded a cumulative-effect adjustment of $1.0 million that increased the opening balance of retained earnings as of January 1, 2017, reflecting the recognition of certain excess tax benefits from share-based awards that did not yet qualify for recognition under previous guidance. The adoption of the other requirements in ASU 2016-09 had no impact on our results of operations, financial position or cash flows. ASU No. 2017-04 . In January 2017, the FASB issued ASU No. 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (“ASU 2017-04”). Prior to adoption of ASU 2017-04, if an impairment of goodwill is indicated, entities are required to then calculate the implied fair value of goodwill to determine the amount of impairment loss. This procedure, referred to as the second step of the goodwill impairment test, required the determination of the fair value of the assets and liabilities of a reporting unit as if those assets and liabilities had been acquired/assumed in a business combination at the impairment testing date. ASU 2017-04 eliminated the second step and instead requires that the impairment loss be measured as the amount by which the carrying amount of a reporting unit exceeds the reporting unit’s fair value, not to exceed the total amount of goodwill allocated to that reporting unit. We elected to early adopt ASU 2017-04 prospectively effective January 1, 2017. The adoption of ASU 2017-04 had no impact on our consolidated financial statements, but we will apply the new guidance to the measurement of any future goodwill impairment losses that we may be required to recognize. Accounting Principles Not Yet Adopted ASU No. 2014-09 . In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. ASU 2014-09 will replace most existing revenue recognition guidance in GAAP when it becomes effective. We did not elect to early adopt ASU 2014-09. Therefore, the new standard is effective for us on January 1, 2018. ASU 2014-09 permits the use of either the full retrospective or modified retrospective transition method. To adopt the new standard, we anticipate applying the modified retrospective transition method, pursuant to which we will record an adjustment to the opening balance of retained earnings as of January 1, 2018 for the impact of applying ASU 2014-09 to all contracts existing as of the date of application. We are continuing our assessment of ASU 2014-09. At this time, our assessment is not yet complete and therefore we are unable to quantify the potential impacts. However, as most of our projects are short-term in nature and billed on a time and materials basis, we do not currently anticipate that the adoption of ASU 2014-09 will result in substantial changes to the overall pattern or timing of our revenue recognition. ASU No. 2016-02. In February 2016, the FASB issued ASU No. 2016-02, Leases (“ASU 2016-02”), which changes the accounting for leases, including a requirement to record essentially all leases on the consolidated balance sheets as assets and liabilities. This ASU is effective for fiscal years beginning after December 15, 2018. We will adopt ASU 2016-02 effective January 1, 2019. We are currently evaluating the impact this ASU will have on our ongoing financial reporting. ASU No. 2016-13. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments–Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which amends GAAP by introducing a new impairment model for financial instruments that is based on expected credit losses rather than incurred credit losses. The new impairment model applies to most financial assets, including trade accounts receivable. ASU 2016-13 is effective for interim and annual reporting periods beginning after December 15, 2019, although it may be adopted one year earlier, and requires a modified retrospective transition approach. We are currently evaluating the impact this ASU will have on our ongoing financial reporting. ASU No. 2016-15 . In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”), which clarifies the classification in the statement of cash flows of certain items, including debt prepayment or extinguishment costs, settlement of contingent consideration arising from a business combination, insurance settlement proceeds, and cash receipts and payments having aspects of more than one class of cash flows. ASU 2016-15 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. Early adoption is permitted. We do not expect the adoption of this ASU to have a material impact on our statements of cash flows. ASU No. 2016-16 . In October 2016, the FASB issued ASU No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory (“ASU 2016-16”), which will require an entity to recognize the income tax consequences of an intra-entity transfer of an asset, other than inventory, when the transfer occurs. ASU 2016-16 is effective on January 1, 2018 with early adoption permitted. We are currently evaluating the impact this ASU will have on our ongoing financial reporting. ASU No. 2017-07 . In March 2017, the FASB issued ASU No. 2017-07, Compensation—Retirement Benefits: Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost (“ASU 2017-07”), which prescribes where in the statement of operations the components of net periodic pension cost and net periodic postretirement benefit cost should be reported. Under ASU 2017-07, the service cost component is required to be reported in the same line or line items that other compensation costs of the associated employees are reported, while the other components are reported outside of operating income (loss). The changes in presentation in ASU 2017-07 are required to be adopted for annual periods beginning after December 15, 2017 and are to be applied retrospectively. ASU 2017-07 will apply to the presentation, in our statements of operations, of the net periodic pension cost (credit) associated with our defined benefit pension plans, which are discussed in Note 9. We do not believe that the changes in presentation required under ASU 2017-07 will have a material impact on our results of operations. ASU No. 2017-09 In May 2017, the FASB issued ASU No. 2017-09, Compensation–Stock Compensation: Scope of Modification Accounting (“ASU 2017-09”), which provides guidance about which changes to the terms or conditions of a share-based payment award require an entity apply modification accounting in Topic 718. Under ASU 2017-09, modification accounting is required unless the effect of the modification does not impact the award’s fair value, vesting conditions and its classification as an equity instrument or liability instrument. ASU 2017-09 is required to be adopted prospectively for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted. We do not expect the adoption of ASU 2017-09 to have a material impact on our share-based compensation expense. |
SUMMARY OF SIGNIFICANT ACCOUN26
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
Estimated Useful Lives of Assets | Depreciation and amortization of assets are computed by the straight-line method over the following estimated useful lives of the assets: Classification Useful Life Buildings 20-40 years Enterprise Resource Planning (“ERP”) System 15 years Leasehold improvements 2-15 years Machinery and equipment 2-12 years Furniture and fixtures 2-10 years Computers and computer software 2-5 years Automobiles 2-5 years A summary of property, plant and equipment as of June 30, 2017 and December 31, 2016 is as follows (in thousands): June 30, 2017 December 31, 2016 (unaudited) Land $ 7,330 $ 7,429 Buildings and leasehold improvements 47,737 42,257 Machinery and equipment 242,723 233,063 Furniture and fixtures 9,085 8,431 Capitalized ERP system development costs 46,122 44,876 Computers and computer software 12,975 11,775 Automobiles 5,284 5,370 Construction in progress 13,853 12,997 Total 385,109 366,198 Accumulated depreciation and amortization (180,844 ) (163,068 ) Property, plant, and equipment, net $ 204,265 $ 203,130 |
Schedule of Rollforward Goodwill | A rollforward of goodwill for the six months ended June 30, 2017 is as follows (in thousands): Six Months Ended (unaudited) TeamQualspec TeamFurmanite Quest Integrity Total Balance at beginning of period $ 213,475 $ 109,059 $ 33,252 $ 355,786 Foreign currency adjustments 1,050 1,038 702 2,790 Balance at end of period $ 214,525 $ 110,097 $ 33,954 $ 358,576 |
Amounts Used In Basic and Diluted Earnings (Loss) Per Share | Amounts used in basic and diluted earnings (loss) per share, for the three and six months ended June 30, 2017 and 2016 , are as follows (in thousands): Three Months Ended Six Months Ended 2017 2016 2017 2016 (unaudited) (unaudited) (unaudited) (unaudited) Weighted-average number of basic shares outstanding 29,826 29,452 29,815 26,738 Stock options, stock units and performance awards — 76 — 70 Total shares and dilutive securities 29,826 29,528 29,815 26,808 |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) - Furmanite Corporation | 6 Months Ended |
Jun. 30, 2017 | |
Business Acquisition [Line Items] | |
Schedule of Consideration Transferred | The acquisition-date fair value of the consideration transferred totaled $282.3 million , which consisted of the following (in thousands, except shares): February 29, 2016 Common stock (8,208,006 shares) $ 209,529 Converted share-based payment awards 2,001 Cash 70,811 Total consideration $ 282,341 |
Summary of Purchase Price Allocation | The following table presents the purchase price allocation for Furmanite (in thousands): February 29, 2016 Cash and cash equivalents $ 37,734 Accounts receivable 65,925 Inventory 25,847 Current deferred tax assets 19,857 Prepaid expenses and other current assets 23,044 Current assets of discontinued operations 18,623 Plant, property and equipment 63,259 Intangible assets 88,958 Goodwill 89,646 Non-current deferred tax assets 2,542 Other non-current assets 687 Total assets acquired 436,122 Accounts payable 12,359 Other accrued liabilities 33,127 Income taxes payable 229 Current liabilities of discontinued operations 1,434 Non-current deferred tax liabilities 91,431 Defined benefit pension liability 13,509 Other long-term liabilities 1,692 Total liabilities assumed 153,781 Net assets acquired $ 282,341 |
Summary of Pro Forma Consolidated Statement of Operations | Our unaudited pro forma consolidated results of operations are shown below as if the acquisition of Furmanite had occurred at the beginning of fiscal year 2015. These results are not necessarily indicative of the results which would actually have occurred if the acquisition had taken place at the beginning of fiscal year 2015, nor are they necessarily indicative of future results (in thousands, except per share data). Pro forma data Six Months Ended 2016 (unaudited) Revenues $ 631,064 Income from continuing operations $ 2,587 Earnings per share from continuing operations: Basic $ 0.09 Diluted $ 0.09 |
RECEIVABLES (Tables)
RECEIVABLES (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Receivables [Abstract] | |
Summary of Accounts Receivable | A summary of accounts receivable as of June 30, 2017 and December 31, 2016 is as follows (in thousands): June 30, 2017 December 31, 2016 (unaudited) Trade accounts receivable $ 211,472 $ 230,889 Unbilled revenues 80,040 39,719 Allowance for doubtful accounts (9,870 ) (7,835 ) Total $ 281,642 $ 262,773 |
INVENTORY (Tables)
INVENTORY (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Inventory Disclosure [Abstract] | |
Summary of Inventory | A summary of inventory as of June 30, 2017 and December 31, 2016 is as follows (in thousands): June 30, 2017 December 31, 2016 (unaudited) Raw materials $ 9,513 $ 6,844 Work in progress 3,271 2,713 Finished goods 38,509 40,014 Total $ 51,293 $ 49,571 |
PROPERTY, PLANT AND EQUIPMENT (
PROPERTY, PLANT AND EQUIPMENT (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property, Plant and Equipment | Depreciation and amortization of assets are computed by the straight-line method over the following estimated useful lives of the assets: Classification Useful Life Buildings 20-40 years Enterprise Resource Planning (“ERP”) System 15 years Leasehold improvements 2-15 years Machinery and equipment 2-12 years Furniture and fixtures 2-10 years Computers and computer software 2-5 years Automobiles 2-5 years A summary of property, plant and equipment as of June 30, 2017 and December 31, 2016 is as follows (in thousands): June 30, 2017 December 31, 2016 (unaudited) Land $ 7,330 $ 7,429 Buildings and leasehold improvements 47,737 42,257 Machinery and equipment 242,723 233,063 Furniture and fixtures 9,085 8,431 Capitalized ERP system development costs 46,122 44,876 Computers and computer software 12,975 11,775 Automobiles 5,284 5,370 Construction in progress 13,853 12,997 Total 385,109 366,198 Accumulated depreciation and amortization (180,844 ) (163,068 ) Property, plant, and equipment, net $ 204,265 $ 203,130 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Intangible Assets | A summary of intangible assets as of June 30, 2017 and December 31, 2016 is as follows (in thousands): June 30, 2017 December 31, 2016 (unaudited) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Customer relationships $ 175,081 $ (32,320 ) $ 142,761 $ 174,742 $ (25,508 ) $ 149,234 Non-compete agreements 5,504 (4,215 ) 1,289 5,397 (3,896 ) 1,501 Trade names 24,751 (5,211 ) 19,540 24,624 (4,216 ) 20,408 Technology 7,846 (3,826 ) 4,020 7,812 (3,364 ) 4,448 Licenses 851 (392 ) 459 838 (325 ) 513 Total $ 214,033 $ (45,964 ) $ 168,069 $ 213,413 $ (37,309 ) $ 176,104 |
OTHER ACCRUED LIABILITIES (Tabl
OTHER ACCRUED LIABILITIES (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Payables and Accruals [Abstract] | |
Summary of Other Accrued Liabilities | A summary of other accrued liabilities as of June 30, 2017 and December 31, 2016 is as follows (in thousands): June 30, 2017 December 31, 2016 (unaudited) Payroll and other compensation expenses $ 39,581 $ 38,214 Insurance accruals 15,498 13,896 Property, sales and other non-income related taxes 4,360 5,599 Lease commitments 839 2,119 Deferred revenue 6,770 3,433 Accrued commission 1,602 1,355 Accrued interest 627 603 Volume discount 700 1,067 Contingent consideration — 2,103 Professional fees 2,480 1,530 Other 10,219 9,985 Total $ 82,676 $ 79,904 |
LONG-TERM DEBT, DERIVATIVES A33
LONG-TERM DEBT, DERIVATIVES AND LETTERS OF CREDIT (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
Amounts Recognized In Other Comprehensive Income, and Reclassified Into Earnings | The amounts recognized in other comprehensive income, and reclassified into earnings, for the three and six months ended June 30, 2017 and 2016 , are as follows (in thousands): Gain (Loss) Recognized in Other Comprehensive Income (Loss) Gain (Loss) Reclassified from Other Comprehensive Income (Loss) to Earnings Loss Recognized in Other Comprehensive Income (Loss) Gain (Loss) Reclassified from Other Comprehensive Income (Loss) to Earnings Three Months Ended Three Months Ended Six Months Ended Six Months Ended (unaudited) (unaudited) (unaudited) (unaudited) 2017 2016 2017 2016 2017 2016 2017 2016 Net investment hedge $ (949 ) $ 310 $ — $ — $ (1,115 ) $ (243 ) $ — $ — |
Fair Value Totals and Balance Sheet Classification for Derivatives Designated As Hedges | The following table presents the fair value totals and balance sheet classification for derivatives designated as hedges under ASC 815 (in thousands): June 30, 2017 December 31, 2016 (unaudited) Classification Balance Sheet Location Fair Value Classification Balance Sheet Location Fair Value Net investment hedge Liability Long-term debt $ (3,933 ) Liability Long-term debt $ (5,048 ) |
EMPLOYEE BENEFIT PLANS (Tables)
EMPLOYEE BENEFIT PLANS (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Compensation and Retirement Disclosure [Abstract] | |
Schedule of Net Periodic Pension Cost (Credit) | Net periodic pension cost (credit) for the U.K. and Norwegian Plans includes the following components (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 (unaudited) (unaudited) (unaudited) (unaudited) Service cost $ 4 $ 22 $ 8 $ 29 Interest cost 597 801 1,176 1,068 Expected return on plan assets (761 ) (820 ) (1,499 ) (1,093 ) Amortization of net actuarial loss 17 — 34 — Net periodic pension cost (credit) $ (143 ) $ 3 $ (281 ) $ 4 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Assets and Liabilities Measured on Recurring Basis | The following table sets forth, by level within the fair value hierarchy, our financial assets and liabilities that are accounted for at fair value on a recurring basis as of June 30, 2017 and December 31, 2016 . As required by ASC 820, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement (in thousands): June 30, 2017 (unaudited) Quoted Prices in Active Markets for Identical Items (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Liabilities: Contingent consideration 1 $ — $ — $ 1,555 $ 1,555 Net investment hedge $ — $ (3,933 ) $ — $ (3,933 ) December 31, 2016 Quoted Prices in Active Markets for Identical Items (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Liabilities: Contingent consideration 1 $ — $ — $ 3,739 $ 3,739 Net investment hedge $ — $ (5,048 ) $ — $ (5,048 ) __________________________ 1 Inclusive of both current and noncurrent portions. |
Summary of Changes in Fair Value of Level 3 Contingent Consideration | The following table represents the changes in the fair value of Level 3 contingent consideration liabilities (in thousands): Six Months Ended (unaudited) Balance, beginning of period $ 3,739 Accretion of liability 142 Foreign currency effects 126 Payment (1,278 ) Revaluation (1,174 ) Balance, end of period $ 1,555 |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of Transactions Involving Stock Units and Director Stock Grants | Transactions involving our stock units and director stock grants during the six months ended June 30, 2017 and 2016 are summarized below: Six Months Ended Six Months Ended (unaudited) (unaudited) No. of Stock Units Weighted Average Fair Value No. of Stock Units Weighted Average Fair Value (in thousands) (in thousands) Stock and stock units, beginning of period 535 $ 35.11 371 $ 36.26 Changes during the period: Granted 23 $ 25.66 86 $ 26.19 Assumed - Furmanite acquisition — $ — 40 $ 25.63 Vested and settled (48 ) $ 25.26 (34 ) $ 27.87 Cancelled (9 ) $ 33.15 (9 ) $ 27.81 Stock and stock units, end of period 501 $ 35.68 454 $ 34.22 |
Summary of Transactions Involving Performance Awards | Transactions involving our performance awards during the six months ended June 30, 2017 and 2016 are summarized below: Six Months Ended Six Months Ended (unaudited) (unaudited) No. of Stock Units Weighted Average Fair Value No. of Stock Units Weighted Average Fair Value (in thousands) (in thousands) Long-term performance stock units, beginning of period 59 $ 37.16 59 $ 37.16 Changes during the period: Granted 166 $ 20.24 — $ — Vested and settled — $ — — $ — Cancelled — $ — — $ — Long-term performance stock units, end of period 225 $ 24.64 59 $ 37.16 |
Summary of Transactions Involving Stock Options | Transactions involving our stock options during the six months ended June 30, 2017 and 2016 are summarized below: Six Months Ended Six Months Ended (unaudited) (unaudited) No. of Options Weighted Average Exercise Price No. of Options Weighted Average Exercise Price (in thousands) (in thousands) Shares under option, beginning of period 203 $ 30.63 376 $ 25.71 Changes during the period: Granted — $ — — $ — Assumed - Furmanite acquisition — $ — 132 $ 33.20 Exercised (16 ) $ 27.91 (69 ) $ 15.52 Cancelled — $ — (4 ) $ 44.62 Expired (1 ) $ 32.05 (4 ) $ 30.33 Shares under option, end of period 186 $ 30.87 431 $ 29.39 Exercisable at end of period 186 $ 30.87 427 $ 29.30 |
Total Options Outstanding, Range of Exercise Prices and Remaining Contractual Lives | Options exercisable at June 30, 2017 had a weighted-average remaining contractual life of 2.4 years . For total options outstanding at June 30, 2017 , the range of exercise prices and remaining contractual lives are as follows: Range of Prices No. of Options Weighted Average Exercise Price Weighted Average Remaining Life (in thousands) (in years) $20.18 to $30.28 29 $ 24.81 1.9 $30.29 to $40.38 150 $ 31.08 2.2 $40.39 to $50.47 7 $ 50.47 6.8 Total 186 $ 30.87 2.4 |
ACCUMULATED OTHER COMPREHENSI37
ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Equity [Abstract] | |
Summary of Changes in Accumulated Other Comprehensive Loss Included Within Shareholders' Equity | A summary of changes in accumulated other comprehensive loss included within shareholders’ equity is as follows (in thousands): Six Months Ended Six Months Ended (unaudited) (unaudited) Foreign Currency Translation Adjustments Foreign Currency Hedge Defined Benefit Pension Plans Tax Provision Total Foreign Currency Translation Adjustments Foreign Currency Hedge Tax Provision Total Balance, beginning of period $ (31,973 ) $ 5,048 $ (10,518 ) $ 8,443 $ (29,000 ) $ (28,124 ) $ 4,567 $ 5,183 $ (18,374 ) Other comprehensive income (loss) 6,556 (1,115 ) 34 (1,230 ) 4,245 3,050 (243 ) (1,318 ) 1,489 Balance, end of period $ (25,417 ) $ 3,933 $ (10,484 ) $ 7,213 $ (24,755 ) $ (25,074 ) $ 4,324 $ 3,865 $ (16,885 ) |
Related Tax Effects Allocated to Each Component of Other Comprehensive Loss | The following table represents the related tax effects allocated to each component of other comprehensive income (loss) (in thousands): Six Months Ended Six Months Ended (unaudited) (unaudited) Gross Amount Tax Effect Net Amount Gross Amount Tax Effect Net Amount Foreign currency translation adjustments $ 6,556 $ (1,649 ) $ 4,907 $ 3,050 $ (1,414 ) $ 1,636 Foreign currency hedge (1,115 ) 426 (689 ) (243 ) 96 (147 ) Defined benefit pension plans 34 (7 ) 27 — — — Total $ 5,475 $ (1,230 ) $ 4,245 $ 2,807 $ (1,318 ) $ 1,489 |
ENTITY WIDE DISCLOSURES (Tables
ENTITY WIDE DISCLOSURES (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Segment Reporting [Abstract] | |
Segment Data for our Three Operating Segments | Segment data for our three operating segments are as follows (in thousands): Three Months Ended Six Months Ended 2017 2016 2017 2016 (unaudited) (unaudited) (unaudited) (unaudited) Revenues: TeamQualspec $ 158,412 $ 157,238 $ 301,368 $ 293,500 TeamFurmanite 132,564 159,681 254,386 260,275 Quest Integrity 21,280 19,521 43,056 33,519 Total $ 312,256 $ 336,440 $ 598,810 $ 587,294 Three Months Ended Six Months Ended 2017 2016 2017 2016 (unaudited) (unaudited) (unaudited) (unaudited) Operating income (loss): TeamQualspec $ 10,529 $ 16,677 $ 18,654 $ 24,621 TeamFurmanite 5,385 11,982 5,836 19,021 Quest Integrity 3,889 3,221 8,080 2,464 Corporate and shared support services (26,496 ) (17,872 ) (51,351 ) (39,478 ) Total $ (6,693 ) $ 14,008 $ (18,781 ) $ 6,628 Three Months Ended Six Months Ended 2017 2016 2017 2016 (unaudited) (unaudited) (unaudited) (unaudited) Capital expenditures: TeamQualspec $ 2,852 $ 2,222 $ 5,364 $ 5,211 TeamFurmanite 3,580 3,154 7,900 6,131 Quest Integrity 827 263 1,273 894 Corporate and shared support services 685 4,749 4,125 9,732 Total $ 7,944 $ 10,388 $ 18,662 $ 21,968 Three Months Ended Six Months Ended 2017 2016 2017 2016 (unaudited) (unaudited) (unaudited) (unaudited) Depreciation and amortization: TeamQualspec $ 4,861 $ 5,051 $ 9,716 $ 10,105 TeamFurmanite 5,797 6,020 11,660 9,344 Quest Integrity 1,096 1,284 2,365 2,566 Corporate and shared support services 1,300 515 2,274 878 Total $ 13,054 $ 12,870 $ 26,015 $ 22,893 |
Geographic Breakdown of Revenues and Total Assets | A geographic breakdown of our revenues for the three and six months ended June 30, 2017 and 2016 and total assets as of June 30, 2017 and December 31, 2016 are as follows (in thousands): Three Months Ended Six Months Ended 2017 2016 2017 2016 (unaudited) (unaudited) (unaudited) (unaudited) Total Revenues: 1 United States $ 226,035 $ 241,064 $ 441,247 $ 443,117 Canada 37,444 41,836 64,692 63,821 Europe 30,229 33,152 56,228 50,041 Other foreign countries 18,548 20,388 36,643 30,315 Total $ 312,256 $ 336,440 $ 598,810 $ 587,294 June 30, 2017 December 31, 2016 (unaudited) Total assets: United States $ 769,902 $ 788,780 Canada 65,989 66,056 Europe 235,614 234,847 Other foreign countries 55,072 57,735 Total $ 1,126,577 $ 1,147,418 ______________ 1 Revenues attributable to individual countries/geographic areas are based on the country of domicile of the legal entity that performs the work. |
DISCONTINUED OPERATIONS (Tables
DISCONTINUED OPERATIONS (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Components of Income from Discontinued Operations, Net of Tax | Income from discontinued operations, net of income tax, consists of the following (in thousands): Three Months Ended Six Months Ended (unaudited) (unaudited) Revenues $ 15,906 $ 21,674 Operating expenses 14,686 19,961 Gross margin 1,220 1,713 Selling, general and administrative expenses 577 858 Income from discontinued operations, before income tax 643 855 Less: Provision for income taxes 257 343 Income from discontinued operations, net of income tax $ 386 $ 512 |
EXIT COSTS AND OTHER RELATED 40
EXIT COSTS AND OTHER RELATED CHARGES (CREDITS) (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
EXIT COSTS AND OTHER RELATED CHARGES (CREDITS) [Abstract] | |
Schedule of Accrued Severance Liability | A rollforward of our accrued severance liability associated with these exit activities is presented below (in thousands): Six Months Ended (unaudited) Balance, beginning of period $ 4,846 Charges (credits), net (159 ) Payments (2,694 ) Disposal (1,601 ) Foreign currency adjustments 41 Balance, end of period $ 433 |
SUMMARY OF SIGNIFICANT ACCOUN41
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES - Additional Information (Details) shares in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Jun. 30, 2016USD ($)shares | Jun. 30, 2017USD ($)employeecountrysegmentLocationcustomer | Jun. 30, 2016USD ($)shares | Dec. 31, 2016USD ($) | Jan. 01, 2017USD ($) | Dec. 01, 2016USD ($) | Dec. 31, 2015USD ($) | |
Accounting Policies [Abstract] | |||||||
Number of operating segments | segment | 3 | ||||||
Number of locations in which company operates (more than) | Location | 220 | ||||||
Number of countries in which the company operates | country | 20 | ||||||
Number of employees (more than) | employee | 7,100 | ||||||
Significant Accounting Policies [Line Items] | |||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | shares | 0.3 | 0.4 | |||||
Cash and cash equivalents | $ 65,440,000 | $ 29,154,000 | $ 65,440,000 | $ 46,216,000 | $ 44,825,000 | ||
Goodwill impairment | $ 0 | 0 | |||||
Discounted cash flow, forecast period | 5 years | ||||||
Goodwill impairment test, number of market-based approaches | 2 | ||||||
Market capitalization in excess of carrying amount | $ 175,000,000 | $ 437,000,000 | |||||
Market capitalization in excess of carrying amount, percentage | 33.00% | 80.00% | |||||
Goodwill | $ 358,576,000 | 355,786,000 | |||||
Workers compensation our self-insured retention | 1,000,000 | ||||||
Automobile liability self-insured retention | 500,000 | ||||||
General liability claims we have an effective self-insured retention | 3,000,000 | ||||||
Medical claims, our self-insured retention | 350,000 | ||||||
Environmental liability claims, our self-insured retention | 1,000,000 | ||||||
Unbilled revenues | $ 80,040,000 | 39,719,000 | |||||
Sales Revenue, Net | Customer Concentration Risk | |||||||
Significant Accounting Policies [Line Items] | |||||||
Number of customers accounted for more than specified percentage of consolidated revenues | customer | 0 | ||||||
Europe and Asia | |||||||
Significant Accounting Policies [Line Items] | |||||||
Cash and cash equivalents | $ 9,400,000 | 14,000,000 | |||||
ASU 2016-09 | |||||||
Significant Accounting Policies [Line Items] | |||||||
Cumulative-effect adjustment to opening balance of retained earnings | $ 1,000,000 | ||||||
Team Qualspec | |||||||
Significant Accounting Policies [Line Items] | |||||||
Fair value in excess of consolidated net assets, percentage | 65.00% | ||||||
Goodwill | $ 214,525,000 | 213,475,000 | |||||
Team Furmanite | |||||||
Significant Accounting Policies [Line Items] | |||||||
Fair value in excess of consolidated net assets, percentage | 46.00% | ||||||
Goodwill | $ 110,097,000 | $ 109,059,000 |
SUMMARY OF SIGNIFICANT ACCOUN42
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES - Estimated Useful Lives of Assets (Details) | 6 Months Ended |
Jun. 30, 2017 | |
Buildings | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of the assets | 20 years |
Buildings | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of the assets | 40 years |
Enterprise Resource Planning System | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of the assets | 15 years |
Enterprise Resource Planning System | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of the assets | 15 years |
Leasehold improvements | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of the assets | 2 years |
Leasehold improvements | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of the assets | 15 years |
Machinery and equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of the assets | 2 years |
Machinery and equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of the assets | 12 years |
Furniture and fixtures | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of the assets | 2 years |
Furniture and fixtures | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of the assets | 10 years |
Computers and computer software | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of the assets | 2 years |
Computers and computer software | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of the assets | 5 years |
Automobiles | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of the assets | 2 years |
Automobiles | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of the assets | 5 years |
SUMMARY OF SIGNIFICANT ACCOUN43
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES - Schedule of Rollforward Goodwill (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2017USD ($) | |
Goodwill [Roll Forward] | |
Balance at beginning of period | $ 355,786 |
Foreign currency adjustments | 2,790 |
Balance at end of period | 358,576 |
Team Qualspec | |
Goodwill [Roll Forward] | |
Balance at beginning of period | 213,475 |
Foreign currency adjustments | 1,050 |
Balance at end of period | 214,525 |
Team Furmanite | |
Goodwill [Roll Forward] | |
Balance at beginning of period | 109,059 |
Foreign currency adjustments | 1,038 |
Balance at end of period | 110,097 |
Quest Integrity | |
Goodwill [Roll Forward] | |
Balance at beginning of period | 33,252 |
Foreign currency adjustments | 702 |
Balance at end of period | $ 33,954 |
SUMMARY OF SIGNIFICANT ACCOUN44
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES - Amounts Used In Basic and Diluted Earnings Per Share (Details) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Accounting Policies [Abstract] | ||||
Weighted-average number of basic shares outstanding (in shares) | 29,826 | 29,452 | 29,815 | 26,738 |
Stock options, stock units and performance awards (in shares) | 0 | 76 | 0 | 70 |
Total shares and dilutive securities (in shares) | 29,826 | 29,528 | 29,815 | 26,808 |
ACQUISITIONS - Furmanite (Addit
ACQUISITIONS - Furmanite (Additional Information) (Details) $ in Thousands | Feb. 29, 2016USD ($)shares | Jun. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2017USD ($) | Dec. 31, 2016USD ($) |
Business Acquisition [Line Items] | |||||
Goodwill | $ 358,576 | $ 355,786 | |||
Furmanite Corporation | |||||
Business Acquisition [Line Items] | |||||
Number of shares received for each share of common stock owned | 0.215 | ||||
Business acquisition, purchase price | $ 282,341 | ||||
Number of common shares issued | shares | 8,208,006 | ||||
Acquired intangible assets | $ 88,958 | ||||
Goodwill | 89,646 | ||||
Acquired receivables, gross contractual amount | 88,000 | ||||
Furmanite Corporation | Selling, General and Administrative Expenses | |||||
Business Acquisition [Line Items] | |||||
Total acquisition costs | $ 500 | $ 6,600 | |||
Separately recognized transaction, acquisition-related compensation costs | $ 0 | $ 4,700 | |||
Furmanite Corporation | Customer Relationships | |||||
Business Acquisition [Line Items] | |||||
Acquired intangible assets | $ 69,800 | ||||
Acquired intangible asset useful life | 12 years | ||||
Furmanite Corporation | Trade Names | |||||
Business Acquisition [Line Items] | |||||
Acquired intangible assets | $ 16,900 | ||||
Acquired intangible asset useful life | 12 years | ||||
Furmanite Corporation | Developed Technology | |||||
Business Acquisition [Line Items] | |||||
Acquired intangible assets | $ 2,300 | ||||
Acquired intangible asset useful life | 10 years | ||||
Continuing Operations | Furmanite Corporation | |||||
Business Acquisition [Line Items] | |||||
Acquired receivables, fair value | $ 65,900 | ||||
Acquired receivables, estimated uncollectible | 7,900 | ||||
Discontinued Operations | Furmanite Corporation | |||||
Business Acquisition [Line Items] | |||||
Acquired intangible assets | 1,600 | ||||
Goodwill | 3,300 | ||||
Acquired receivables, fair value | 13,600 | ||||
Costs to sell, discontinued operations | $ 1,100 |
ACQUISITIONS - Consideration Tr
ACQUISITIONS - Consideration Transferred (Details) - Furmanite Corporation $ in Thousands | Feb. 29, 2016USD ($)shares |
Business Acquisition [Line Items] | |
Common stock (8,208,006 shares) | $ 209,529 |
Converted share-based payment awards | 2,001 |
Cash | 70,811 |
Total consideration | $ 282,341 |
Number of common shares issued | shares | 8,208,006 |
ACQUISITIONS - Summary of Purch
ACQUISITIONS - Summary of Purchase Price Allocation (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 | Feb. 29, 2016 |
Business Acquisition [Line Items] | |||
Goodwill | $ 358,576 | $ 355,786 | |
Furmanite Corporation | |||
Business Acquisition [Line Items] | |||
Cash and cash equivalents | $ 37,734 | ||
Accounts receivable | 65,925 | ||
Inventory | 25,847 | ||
Current deferred tax assets | 19,857 | ||
Prepaid expenses and other current assets | 23,044 | ||
Current assets of discontinued operations | 18,623 | ||
Plant, property and equipment | 63,259 | ||
Intangible assets | 88,958 | ||
Goodwill | 89,646 | ||
Non-current deferred tax assets | 2,542 | ||
Other non-current assets | 687 | ||
Total assets acquired | 436,122 | ||
Accounts payable | 12,359 | ||
Other accrued liabilities | 33,127 | ||
Income taxes payable | 229 | ||
Current liabilities of discontinued operations | 1,434 | ||
Non-current deferred tax liabilities | 91,431 | ||
Defined benefit pension liability | 13,509 | ||
Other long-term liabilities | 1,692 | ||
Total liabilities assumed | 153,781 | ||
Net assets acquired | $ 282,341 |
ACQUISITIONS - Activity in Acqu
ACQUISITIONS - Activity in Acquiree (Details) - Furmanite Corporation $ in Millions | 6 Months Ended |
Jun. 30, 2016USD ($) | |
Business Acquisition [Line Items] | |
Revenue | $ 97.4 |
Net income (loss) | $ (1.6) |
ACQUISITIONS - Summary of Pro F
ACQUISITIONS - Summary of Pro Forma Consolidated Results of Operations (Details) $ / shares in Units, $ in Thousands | 6 Months Ended |
Jun. 30, 2016USD ($)$ / shares | |
Business Acquisition [Line Items] | |
Revenues | $ | $ 631,064 |
Income from continuing operations | $ | $ 2,587 |
Earnings per share from continuing operations: | |
Basic (in usd per share) | $ / shares | $ 0.09 |
Diluted (in usd per share) | $ / shares | $ 0.09 |
RECEIVABLES (Details)
RECEIVABLES (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Receivables [Abstract] | ||
Trade accounts receivable | $ 211,472 | $ 230,889 |
Unbilled revenues | 80,040 | 39,719 |
Allowance for doubtful accounts | (9,870) | (7,835) |
Total | $ 281,642 | $ 262,773 |
INVENTORY (Details)
INVENTORY (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 9,513 | $ 6,844 |
Work in progress | 3,271 | 2,713 |
Finished goods | 38,509 | 40,014 |
Total | $ 51,293 | $ 49,571 |
PROPERTY, PLANT AND EQUIPMENT -
PROPERTY, PLANT AND EQUIPMENT - Summary of Property, Plant and Equipment (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Property, Plant and Equipment [Line Items] | ||
Total | $ 385,109 | $ 366,198 |
Accumulated depreciation and amortization | (180,844) | (163,068) |
Property, plant, and equipment, net | 204,265 | 203,130 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Total | 7,330 | 7,429 |
Buildings and leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total | 47,737 | 42,257 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total | 242,723 | 233,063 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Total | 9,085 | 8,431 |
Capitalized ERP system development costs | ||
Property, Plant and Equipment [Line Items] | ||
Total | 46,122 | 44,876 |
Computers and computer software | ||
Property, Plant and Equipment [Line Items] | ||
Total | 12,975 | 11,775 |
Automobiles | ||
Property, Plant and Equipment [Line Items] | ||
Total | 5,284 | 5,370 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Total | $ 13,853 | $ 12,997 |
PROPERTY, PLANT AND EQUIPMENT53
PROPERTY, PLANT AND EQUIPMENT - Additional Information (Details) - Capitalized ERP system development costs $ in Millions | 6 Months Ended |
Jun. 30, 2017USD ($) | |
Property, Plant and Equipment [Line Items] | |
Capitalized project amount | $ 46.1 |
Capitalized interest | 1.6 |
Amortization | $ 1.1 |
INTANGIBLE ASSETS - Summary of
INTANGIBLE ASSETS - Summary of Intangible Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 214,033 | $ 213,413 |
Accumulated Amortization | (45,964) | (37,309) |
Net Carrying Amount | 168,069 | 176,104 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 175,081 | 174,742 |
Accumulated Amortization | (32,320) | (25,508) |
Net Carrying Amount | 142,761 | 149,234 |
Non-compete agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 5,504 | 5,397 |
Accumulated Amortization | (4,215) | (3,896) |
Net Carrying Amount | 1,289 | 1,501 |
Trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 24,751 | 24,624 |
Accumulated Amortization | (5,211) | (4,216) |
Net Carrying Amount | 19,540 | 20,408 |
Technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 7,846 | 7,812 |
Accumulated Amortization | (3,826) | (3,364) |
Net Carrying Amount | 4,020 | 4,448 |
Licenses | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 851 | 838 |
Accumulated Amortization | (392) | (325) |
Net Carrying Amount | $ 459 | $ 513 |
INTANGIBLE ASSETS - Additional
INTANGIBLE ASSETS - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization expense | $ 4.2 | $ 4.1 | $ 8.4 | $ 7.2 |
OTHER ACCRUED LIABILITIES (Deta
OTHER ACCRUED LIABILITIES (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Payables and Accruals [Abstract] | ||
Payroll and other compensation expenses | $ 39,581 | $ 38,214 |
Insurance accruals | 15,498 | 13,896 |
Property, sales and other non-income related taxes | 4,360 | 5,599 |
Lease commitments | 839 | 2,119 |
Deferred revenue | 6,770 | 3,433 |
Accrued commission | 1,602 | 1,355 |
Accrued interest | 627 | 603 |
Volume discount | 700 | 1,067 |
Contingent consideration | 0 | 2,103 |
Professional fees | 2,480 | 1,530 |
Other | 10,219 | 9,985 |
Total | $ 82,676 | $ 79,904 |
LONG-TERM DEBT, DERIVATIVES A57
LONG-TERM DEBT, DERIVATIVES AND LETTERS OF CREDIT - Additional Information (Details) € in Millions | 6 Months Ended | ||||||
Jun. 30, 2017USD ($) | Jul. 31, 2017USD ($) | Jun. 30, 2017EUR (€) | Dec. 31, 2016USD ($) | Jun. 30, 2016USD ($) | Feb. 29, 2016USD ($) | Dec. 31, 2015USD ($) | |
Line of Credit Facility [Line Items] | |||||||
Borrowing capacity | $ 600,000,000 | ||||||
Commitment fee percentage | 0.50% | ||||||
Minimum interest coverage ratio | 3 | 3 | |||||
Cash on hand | $ 29,154,000 | $ 46,216,000 | $ 65,440,000 | $ 44,825,000 | |||
Available borrowing capacity | 121,000,000 | ||||||
Unamortized debt issuance costs | 3,700,000 | ||||||
Net Investment Hedge | |||||||
Line of Credit Facility [Line Items] | |||||||
Borrowing under credit facility | $ 14,100,000 | € 12.3 | |||||
LIBOR | |||||||
Line of Credit Facility [Line Items] | |||||||
Basis spread on variable rate | 3.25% | ||||||
Revolving Credit Facility | |||||||
Line of Credit Facility [Line Items] | |||||||
Borrowing capacity | $ 300,000,000 | 400,000,000 | |||||
Debt term | 5 years | ||||||
Term Loan Facility | |||||||
Line of Credit Facility [Line Items] | |||||||
Borrowing capacity | $ 200,000,000 | ||||||
Debt term | 5 years | ||||||
Swing Line Facility | |||||||
Line of Credit Facility [Line Items] | |||||||
Borrowing capacity | $ 35,000,000 | ||||||
Standby Letters of Credit | |||||||
Line of Credit Facility [Line Items] | |||||||
Outstanding letters of credit | $ 20,000,000 | $ 21,600,000 | |||||
March 31, 2018 | |||||||
Line of Credit Facility [Line Items] | |||||||
Maximum Leverage Ratio | 4.5 | 4.5 | |||||
Maximum ratio of senior secured debt to consolidated EBITDA | 3.75 | 3.75 | |||||
June 30, 2018 | |||||||
Line of Credit Facility [Line Items] | |||||||
Maximum Leverage Ratio | 4.25 | 4.25 | |||||
Maximum ratio of senior secured debt to consolidated EBITDA | 3.25 | 3.25 | |||||
September 30, 2018 and thereafter | |||||||
Line of Credit Facility [Line Items] | |||||||
Maximum Leverage Ratio | 4 | 4 | |||||
Maximum ratio of senior secured debt to consolidated EBITDA | 3 | 3 | |||||
September 30, 2017 | |||||||
Line of Credit Facility [Line Items] | |||||||
Maximum ratio of senior secured debt to consolidated EBITDA | 4.75 | 4.75 | |||||
December 31, 2017 | |||||||
Line of Credit Facility [Line Items] | |||||||
Maximum ratio of senior secured debt to consolidated EBITDA | 4.25 | 4.25 | |||||
Subsequent Event | 5.00% convertible senior notes | |||||||
Line of Credit Facility [Line Items] | |||||||
Principal amount, long-term debt issued | $ 230,000,000 | ||||||
Interest rate on convertible debt | 5.00% |
LONG-TERM DEBT, DERIVATIVES A58
LONG-TERM DEBT, DERIVATIVES AND LETTERS OF CREDIT - Amounts Recognized in Other Comprehensive Income, and Reclassified Into Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Loss Recognized in Other Comprehensive Income (Loss) | $ (949) | $ 310 | $ (1,115) | $ (243) |
Net Investment Hedge | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Loss Recognized in Other Comprehensive Income (Loss) | (949) | 310 | (1,115) | (243) |
Gain (Loss) Reclassified from Other Comprehensive Income (Loss) to Earnings | $ 0 | $ 0 | $ 0 | $ 0 |
LONG-TERM DEBT, DERIVATIVES A59
LONG-TERM DEBT, DERIVATIVES AND LETTERS OF CREDIT - Fair Value Totals and Balance Sheet Classification for Derivatives Designated as Hedges (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Long-term Debt | Designated as Hedging Instrument | Net Investment Hedge | ||
Derivatives, Fair Value [Line Items] | ||
Fair value liability | $ (3,933) | $ (5,048) |
EMPLOYEE BENEFIT PLANS - Additi
EMPLOYEE BENEFIT PLANS - Additional Information (Details) - Foreign Pension Plan $ in Millions | 6 Months Ended |
Jun. 30, 2017USD ($)plan | |
Defined Benefit Plan Disclosure [Line Items] | |
Number of defined benefit pension plans | plan | 2 |
Weighted-average of expected returns on asset investment, percentage | 4.50% |
Expected contributions for current year | $ | $ 4 |
Total contributions to date | $ | $ 2.6 |
Equities | |
Defined Benefit Plan Disclosure [Line Items] | |
Weighted-average of expected returns on asset investment, percentage | 5.80% |
Debt Security | |
Defined Benefit Plan Disclosure [Line Items] | |
Weighted-average of expected returns on asset investment, percentage | 1.80% |
United Kingdom | |
Defined Benefit Plan Disclosure [Line Items] | |
Number of defined benefit pension plans | plan | 1 |
Norway | |
Defined Benefit Plan Disclosure [Line Items] | |
Subsidiary's percentage of total defined benefit pension plans | 1.00% |
EMPLOYEE BENEFIT PLANS - Net Pe
EMPLOYEE BENEFIT PLANS - Net Periodic Pension Cost (Credit) (Details) - Foreign Pension Plan - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | $ 4 | $ 22 | $ 8 | $ 29 |
Interest cost | 597 | 801 | 1,176 | 1,068 |
Expected return on plan assets | (761) | (820) | (1,499) | (1,093) |
Amortization of net actuarial loss | 17 | 0 | 34 | 0 |
Net periodic pension cost (credit) | $ (143) | $ 3 | $ (281) | $ 4 |
FAIR VALUE MEASUREMENTS - Fair
FAIR VALUE MEASUREMENTS - Fair Value of Assets and Liabilities Measured on Recurring Basis (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Net Investment Hedge | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Net liabilities | $ (3,933) | $ (5,048) |
Contingent Consideration | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Net liabilities | 1,555 | 3,739 |
Quoted Prices in Active Markets for Identical Items (Level 1) | Net Investment Hedge | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Net liabilities | 0 | 0 |
Quoted Prices in Active Markets for Identical Items (Level 1) | Contingent Consideration | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Net liabilities | 0 | 0 |
Significant Other Observable Inputs (Level 2) | Net Investment Hedge | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Net liabilities | (3,933) | (5,048) |
Significant Other Observable Inputs (Level 2) | Contingent Consideration | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Net liabilities | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Net Investment Hedge | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Net liabilities | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Contingent Consideration | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Net liabilities | $ 1,555 | $ 3,739 |
FAIR VALUE MEASUREMENTS - Addit
FAIR VALUE MEASUREMENTS - Additional Information (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Fair Value Disclosures [Abstract] | ||
Transfer from Level 1 to Level 2 | $ 0 | $ 0 |
Transfer from Level 2 to Level 1 | 0 | 0 |
Transfer out of Level 3 measurement | 0 | 0 |
Transfer in to Level 3 measurement | $ 0 | $ 0 |
FAIR VALUE MEASUREMENTS - Summa
FAIR VALUE MEASUREMENTS - Summary of Changes in Fair Value of Level 3 Contingent Consideration (Details) - Contingent Consideration $ in Thousands | 6 Months Ended |
Jun. 30, 2017USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Balance, beginning of period | $ 3,739 |
Accretion of liability | 142 |
Foreign currency effects | 126 |
Revaluation | (1,174) |
Payment | (1,278) |
Balance, end of period | $ 1,555 |
SHARE-BASED COMPENSATION - Addi
SHARE-BASED COMPENSATION - Additional Information (Details) $ in Millions | 6 Months Ended | ||
Jun. 30, 2017USD ($)perfconditionsshares | Jun. 30, 2016USD ($) | Feb. 29, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Awards outstanding to officers, directors and key employees (in shares) | shares | 900,000 | ||
Total number of shares cumulatively authorized to be issued under our stock incentive plans | shares | 2,000,000 | ||
Share-based compensation | $ 4.3 | $ 4.7 | |
Employee service share-based compensation, nonvested awards, compensation not yet recognized, share-based awards other than options | $ 16 | ||
Remaining weighted-average period | 2 years 5 months 30 days | ||
Weighted-average remaining contractual life of options exercisable | 2 years 4 months 24 days | ||
Stock and Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation | $ 3.8 | 4.1 | |
Stock and Stock Units | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 4 years | ||
Long Term Performance Stock Unit Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation | $ 0.5 | $ 0.4 | |
Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 4 years | ||
Stock option year term | 10 years | ||
Furmanite Corporation | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Conversion ratio business combination | 0.215 | ||
November 4, 2014 and October 15, 2015 | Long Term Performance Stock Unit Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 3 years | ||
Performance period | 3 years | ||
November 4, 2014 and October 15, 2015 | Long Term Performance Stock Unit Awards | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Possible payouts | 0.00% | ||
November 4, 2014 and October 15, 2015 | Long Term Performance Stock Unit Awards | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Possible payouts | 300.00% | ||
March 15, 2017 | Long Term Performance Stock Unit Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 2 years | ||
Share-based compensation award, number of performance conditions | perfconditions | 3 | ||
Performance period | 2 years | ||
March 15, 2017 | Long Term Performance Stock Unit Awards | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Possible payouts | 0.00% | ||
Relative total shareholder return | March 15, 2017 | Long Term Performance Stock Unit Awards | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Possible payouts | 200.00% | ||
Company's results of operations | March 15, 2017 | Long Term Performance Stock Unit Awards | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Possible payouts | 0.00% | ||
Company's results of operations | March 15, 2017 | Long Term Performance Stock Unit Awards | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Possible payouts | 300.00% |
SHARE-BASED COMPENSATION - Summ
SHARE-BASED COMPENSATION - Summary of Transactions Involving Stock Units and Director Stock Grants (Details) - Stock and Stock Units - $ / shares shares in Thousands | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
No. of Stock Units | ||
Balance at beginning of period (in shares) | 535 | 371 |
Changes during the period: | ||
Granted (in shares) | 23 | 86 |
Assumed - Furmanite acquisition (in shares) | 0 | 40 |
Vested and settled (in shares) | (48) | (34) |
Cancelled (in shares) | (9) | (9) |
Balance at end of period (in shares) | 501 | 454 |
Weighted Average Fair Value | ||
Balance at beginning of period (in usd per share) | $ 35.11 | $ 36.26 |
Changes during the period: | ||
Granted (in usd per share) | 25.66 | 26.19 |
Assumed - Furmanite acquisition (in usd per share) | 0 | 25.63 |
Vested and settled (in usd per share) | 25.26 | 27.87 |
Cancelled (in usd per share) | 33.15 | 27.81 |
Balance at end of period (in usd per share) | $ 35.68 | $ 34.22 |
SHARE-BASED COMPENSATION - Su67
SHARE-BASED COMPENSATION - Summary of Transactions Involving Performance Awards (Details) - Long Term Performance Stock Unit Awards - $ / shares shares in Thousands | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
No. of Units/Awards | ||
Balance at beginning of period (in shares) | 59 | 59 |
Changes during the period: | ||
Granted (in shares) | 166 | 0 |
Vested and settled (in shares) | 0 | 0 |
Cancelled (in shares) | 0 | 0 |
Balance at end of period (in shares) | 225 | 59 |
Weighted Average Fair Value | ||
Balance at beginning of period (in usd per share) | $ 37.16 | $ 37.16 |
Changes during the period: | ||
Granted (in usd per share) | 20.24 | 0 |
Cancelled (in usd per share) | 0 | 0 |
Balance at end of period (in usd per share) | $ 24.64 | $ 37.16 |
SHARE-BASED COMPENSATION - Su68
SHARE-BASED COMPENSATION - Summary of Transactions Involving Stock Options (Details) - $ / shares shares in Thousands | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
No. of Options | ||
Shares under option, beginning of period | 203 | 376 |
Changes during the period: | ||
Granted (in shares) | 0 | 0 |
Assumed - Furmanite acquisition (in shares) | 0 | 132 |
Exercised (in shares) | (16) | (69) |
Cancelled (in shares) | 0 | (4) |
Expired (in shares) | (1) | (4) |
Shares under option, end of period | 186 | 431 |
Exercisable at end of period (in shares) | 186 | 427 |
Weighted Average Exercise Price | ||
Shares under option, beginning of period (in usd per share) | $ 30.63 | $ 25.71 |
Changes during the period: | ||
Granted (in usd per share) | 0 | 0 |
Assumed - Furmanite acquisition (in usd per share) | 0 | 33.20 |
Exercised (in usd per share) | 27.91 | 15.52 |
Cancelled (in usd per share) | 0 | 44.62 |
Expired (in usd per share) | 32.05 | 30.33 |
Shares under option, end of period (in usd per share) | 30.87 | 29.39 |
Exercisable at end of period (in usd per share) | $ 30.87 | $ 29.30 |
SHARE-BASED COMPENSATION - Tota
SHARE-BASED COMPENSATION - Total Options Outstanding, Range of Exercise Prices and Remaining Contractual Lives (Details) shares in Thousands | 6 Months Ended |
Jun. 30, 2017$ / sharesshares | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
No. of Options (in shares) | shares | 186 |
Weighted Average Exercise Price (in usd per share) | $ 30.87 |
Weighted Average Remaining Life | 2 years 4 months 24 days |
$20.18 to $30.28 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Range of Prices, Lower limit (in usd per share) | $ 20.18 |
Range of Prices, Upper limit (in usd per share) | $ 30.28 |
No. of Options (in shares) | shares | 29 |
Weighted Average Exercise Price (in usd per share) | $ 24.81 |
Weighted Average Remaining Life | 1 year 10 months 34 days |
$30.29 to $40.38 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Range of Prices, Lower limit (in usd per share) | $ 30.29 |
Range of Prices, Upper limit (in usd per share) | $ 40.38 |
No. of Options (in shares) | shares | 150 |
Weighted Average Exercise Price (in usd per share) | $ 31.08 |
Weighted Average Remaining Life | 2 years 2 months 12 days |
$40.39 to $50.47 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Range of Prices, Lower limit (in usd per share) | $ 40.39 |
Range of Prices, Upper limit (in usd per share) | $ 50.47 |
No. of Options (in shares) | shares | 7 |
Weighted Average Exercise Price (in usd per share) | $ 50.47 |
Weighted Average Remaining Life | 6 years 9 months 18 days |
ACCUMULATED OTHER COMPREHENSI70
ACCUMULATED OTHER COMPREHENSIVE LOSS - Summary of Changes in Accumulated Other Comprehensive Loss Included Within Shareholders' Equity (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Accumulated Other Comprehensive Loss [Line Items] | ||||
Balance, beginning of period | $ 535,637 | |||
Other comprehensive income (loss) before tax | $ 3,516 | $ (2,866) | 5,475 | $ 2,807 |
Other comprehensive income (loss), tax | (782) | (167) | (1,230) | (1,318) |
Other comprehensive income (loss) | 2,734 | (3,033) | 4,245 | 1,489 |
Balance, end of period | 524,694 | 524,694 | ||
Foreign currency translation adjustments | ||||
Accumulated Other Comprehensive Loss [Line Items] | ||||
Balance, beginning of period | (31,973) | (28,124) | ||
Other comprehensive income (loss) before tax | 6,556 | 3,050 | ||
Other comprehensive income (loss), tax | (1,649) | (1,414) | ||
Balance, end of period | (25,417) | (25,074) | (25,417) | (25,074) |
Foreign currency hedge | ||||
Accumulated Other Comprehensive Loss [Line Items] | ||||
Balance, beginning of period | 5,048 | 4,567 | ||
Other comprehensive income (loss) before tax | (1,115) | (243) | ||
Other comprehensive income (loss), tax | 426 | 96 | ||
Balance, end of period | 3,933 | 4,324 | 3,933 | 4,324 |
Defined benefit pension plans | ||||
Accumulated Other Comprehensive Loss [Line Items] | ||||
Balance, beginning of period | (10,518) | |||
Other comprehensive income (loss) before tax | 34 | 0 | ||
Other comprehensive income (loss), tax | (7) | 0 | ||
Balance, end of period | (10,484) | (10,484) | ||
Tax provision | ||||
Accumulated Other Comprehensive Loss [Line Items] | ||||
Balance, beginning of period | 8,443 | 5,183 | ||
Other comprehensive income (loss), tax | (1,230) | (1,318) | ||
Balance, end of period | 7,213 | 3,865 | 7,213 | 3,865 |
Accumulated other comprehensive loss | ||||
Accumulated Other Comprehensive Loss [Line Items] | ||||
Balance, beginning of period | (29,000) | (18,374) | ||
Other comprehensive income (loss) | 4,245 | 1,489 | ||
Balance, end of period | $ (24,755) | $ (16,885) | $ (24,755) | $ (16,885) |
ACCUMULATED OTHER COMPREHENSI71
ACCUMULATED OTHER COMPREHENSIVE LOSS - Related Tax Effects Allocated to Each Component of Other Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Accumulated Other Comprehensive Loss [Line Items] | ||||
Gross Amount | $ 3,516 | $ (2,866) | $ 5,475 | $ 2,807 |
Tax provision attributable to other comprehensive income (loss) | $ (782) | $ (167) | (1,230) | (1,318) |
Net Amount | 4,245 | 1,489 | ||
Foreign currency translation adjustments | ||||
Accumulated Other Comprehensive Loss [Line Items] | ||||
Gross Amount | 6,556 | 3,050 | ||
Tax provision attributable to other comprehensive income (loss) | (1,649) | (1,414) | ||
Net Amount | 4,907 | 1,636 | ||
Foreign currency hedge | ||||
Accumulated Other Comprehensive Loss [Line Items] | ||||
Gross Amount | (1,115) | (243) | ||
Tax provision attributable to other comprehensive income (loss) | 426 | 96 | ||
Net Amount | (689) | (147) | ||
Defined benefit pension plans | ||||
Accumulated Other Comprehensive Loss [Line Items] | ||||
Gross Amount | 34 | 0 | ||
Tax provision attributable to other comprehensive income (loss) | (7) | 0 | ||
Net Amount | $ 27 | $ 0 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) | 1 Months Ended | ||
Dec. 31, 2014defendantpatent | Jun. 30, 2017USD ($)lawsuit | Jul. 31, 2007death | |
Quest Integrity | |||
Loss Contingencies [Line Items] | |||
Number of patents allegedly infringed upon | patent | 3 | ||
Number of defendants | 3 | ||
Con Ed Matter | |||
Loss Contingencies [Line Items] | |||
Number of deaths | death | 1 | ||
Number of lawsuits | lawsuit | 68 | ||
Insurance coverage subject to deductible limit | $ | $ 250,000 | ||
Delaware Cases | Quest Integrity | |||
Loss Contingencies [Line Items] | |||
Number of defendants | 2 | ||
Washington Case | Quest Integrity | |||
Loss Contingencies [Line Items] | |||
Number of defendants | 1 | ||
Con Ed Matter | |||
Loss Contingencies [Line Items] | |||
Liability accrual in excess of the deductible limit for the lawsuits | $ | $ 0 |
ENTITY WIDE DISCLOSURES - Addit
ENTITY WIDE DISCLOSURES - Additional Information (Details) | 6 Months Ended |
Jun. 30, 2017segment | |
Number of operating segments | 3 |
ENTITY WIDE DISCLOSURES - Segme
ENTITY WIDE DISCLOSURES - Segment Data for our Three Operating Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Segment Reporting Information [Line Items] | ||||
Revenues | $ 312,256 | $ 336,440 | $ 598,810 | $ 587,294 |
Operating income (loss) | (6,693) | 14,008 | (18,781) | 6,628 |
Capital expenditures | 7,944 | 10,388 | 18,662 | 21,968 |
Depreciation and amortization | 13,054 | 12,870 | 26,015 | 22,893 |
Operating segments | Team Qualspec | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 158,412 | 157,238 | 301,368 | 293,500 |
Operating income (loss) | 10,529 | 16,677 | 18,654 | 24,621 |
Capital expenditures | 2,852 | 2,222 | 5,364 | 5,211 |
Depreciation and amortization | 4,861 | 5,051 | 9,716 | 10,105 |
Operating segments | Team Furmanite | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 132,564 | 159,681 | 254,386 | 260,275 |
Operating income (loss) | 5,385 | 11,982 | 5,836 | 19,021 |
Capital expenditures | 3,580 | 3,154 | 7,900 | 6,131 |
Depreciation and amortization | 5,797 | 6,020 | 11,660 | 9,344 |
Operating segments | Quest Integrity | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 21,280 | 19,521 | 43,056 | 33,519 |
Operating income (loss) | 3,889 | 3,221 | 8,080 | 2,464 |
Capital expenditures | 827 | 263 | 1,273 | 894 |
Depreciation and amortization | 1,096 | 1,284 | 2,365 | 2,566 |
Corporate and shared support services | ||||
Segment Reporting Information [Line Items] | ||||
Operating income (loss) | (26,496) | (17,872) | (51,351) | (39,478) |
Capital expenditures | 685 | 4,749 | 4,125 | 9,732 |
Depreciation and amortization | $ 1,300 | $ 515 | $ 2,274 | $ 878 |
ENTITY WIDE DISCLOSURES - Geogr
ENTITY WIDE DISCLOSURES - Geographic Breakdown of Revenues and Total Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Total revenues | $ 312,256 | $ 336,440 | $ 598,810 | $ 587,294 | |
Total assets | 1,126,577 | 1,126,577 | $ 1,147,418 | ||
United States | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Total revenues | 226,035 | 241,064 | 441,247 | 443,117 | |
Total assets | 769,902 | 769,902 | 788,780 | ||
Canada | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Total revenues | 37,444 | 41,836 | 64,692 | 63,821 | |
Total assets | 65,989 | 65,989 | 66,056 | ||
Europe | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Total revenues | 30,229 | 33,152 | 56,228 | 50,041 | |
Total assets | 235,614 | 235,614 | 234,847 | ||
Other foreign countries | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Total revenues | 18,548 | $ 20,388 | 36,643 | $ 30,315 | |
Total assets | $ 55,072 | $ 55,072 | $ 57,735 |
DISCONTINUED OPERATIONS (Detail
DISCONTINUED OPERATIONS (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | ||||
Revenues | $ 15,906 | $ 21,674 | ||
Operating expenses | 14,686 | 19,961 | ||
Gross margin | 1,220 | 1,713 | ||
Selling, general and administrative expenses | 577 | 858 | ||
Income from discontinued operations, before income tax | 643 | 855 | ||
Less: Provision for income taxes | 257 | 343 | ||
Income from discontinued operations, net of income tax | $ 0 | $ 386 | $ 0 | $ 512 |
EXIT COSTS AND OTHER RELATED 77
EXIT COSTS AND OTHER RELATED CHARGES (CREDITS) (Details) - Furmanite Netherlands and Belgium Exit $ in Thousands | 6 Months Ended |
Jun. 30, 2017USD ($) | |
Restructuring Cost and Reserve [Line Items] | |
Gain on disposal | $ 1,100 |
Other assets transferred | 200 |
Exit activities, estimated costs remaining | 1,000 |
Other Restructuring | |
Restructuring Cost and Reserve [Line Items] | |
Cash paid to purchaser of business | 300 |
Employee Severance | |
Restructuring Cost and Reserve [Line Items] | |
Exit activities, costs incurred to date | 4,700 |
Severance costs (credits) | (159) |
Severance liabilities transferred to purchaser | 1,601 |
Impairment Loss On Property, Plant And Equipment | |
Restructuring Cost and Reserve [Line Items] | |
Exit activities, costs incurred to date | $ 700 |
EXIT COSTS AND OTHER RELATED 78
EXIT COSTS AND OTHER RELATED CHARGES (CREDITS) Rollforward of Severance Liability (Details) - Employee Severance - Furmanite Netherlands and Belgium Exit $ in Thousands | 6 Months Ended |
Jun. 30, 2017USD ($) | |
Restructuring Cost and Reserve [Line Items] | |
Balance, beginning of period | $ 4,846 |
Charges (credits), net | (159) |
Payments | (2,694) |
Disposal | (1,601) |
Foreign currency adjustments | 41 |
Balance, end of period | $ 433 |
REPURCHASE OF COMMON STOCK (Det
REPURCHASE OF COMMON STOCK (Details) | 6 Months Ended | |
Jun. 30, 2017USD ($)shares | Jun. 23, 2014USD ($) | |
Equity, Class of Treasury Stock [Line Items] | ||
Stock repurchase program, authorized amount | $ 50,000,000 | $ 50,000,000 |
Number of shares repurchased | shares | 0 | |
Remaining stock available to repurchase | $ 7,900,000 | |
Total Leverage Ratio must be less than in order to repurchase shares | 2.50 | |
Liquidity | $ 15,000,000 | |
Total Leverage Ratio must be less than in order to repurchase shares, subject to overall limit | 4 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) $ / shares in Units, $ in Millions | Jul. 31, 2017USD ($)sharesdaysday$ / shares | Jul. 24, 2017USD ($) | Dec. 31, 2016USD ($)shares | Jun. 30, 2017daysshares | Jul. 25, 2017$ / shares | Nov. 28, 2016USD ($) |
Subsequent Event [Line Items] | ||||||
Contract termination, notice period | days | 3 | |||||
At-the-Market Equity Offering, Authorized Amount | $ 150 | |||||
Shares issued under ATM Program | shares | 168,000 | 0 | ||||
Proceeds from sale of shares under ATM Program | $ 6 | |||||
Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Debt Instrument, Convertible, Conversion Rate | 46.0829 | |||||
Debt Instrument, Convertible, Conversion Price | $ / shares | $ 21.70 | |||||
Conversion premium | 40.00% | |||||
Share Price | $ / shares | $ 15.50 | |||||
Debt Instrument, Convertible, Threshold Trading Days | day | 20 | |||||
Debt Instrument, Convertible, Threshold Consecutive Trading Days | 30 days | |||||
Debt Instrument, Convertible, Threshold Percentage of Stock Price Trigger | 130.00% | |||||
Number of business days after the specified trading price criteria met that notes may be converted | days | 5 | |||||
Consecutive trading days, trading price criteria | 5 days | |||||
Convertible debt, threshold percentage, product of common stock price and conversion price | 98.00% | |||||
Shares outstanding, percentage threshold | 19.99% | |||||
Convertible debt, threshold shares, approval of shareholders | shares | 5,964,858 | |||||
Number of shares into which debt is initially convertible | shares | 10,599,067 | |||||
Debt instrument, convertible, threshold percentage of stock price trigger for redemption | 130.00% | |||||
Debt instrument, convertible, threshold trading days for redemption | days | 20 | |||||
Debt instrument, convertible, threshold consecutive trading days for redemption | 30 days | |||||
Proceeds from convertible debt | $ 222.6 | |||||
Repayment of term loan | 160 | |||||
Repayment of revolving borrowings | 62.6 | |||||
5.00% convertible senior notes | Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Principal amount, long-term debt issued | $ 230 | |||||
Interest rate on convertible debt | 5.00% | |||||
Convertible debt redemption price, percentage of principal | 100.00% | |||||
Operating Expense | Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Expected annual reduction to operating expenses from cost savings initiative | $ 30 | |||||
Employee Severance | July 24, 2017 Cost Savings Initiative | Minimum | Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Expected severance costs | 4 | |||||
Employee Severance | July 24, 2017 Cost Savings Initiative | Maximum | Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Expected severance costs | $ 6 |