Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2021 | Apr. 30, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2021 | |
Document Transition Report | false | |
Entity File Number | 001-08604 | |
Entity Registrant Name | TEAM, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 74-1765729 | |
Entity Address, Address Line One | 13131 Dairy Ashford | |
Entity Address, Address Line Two | Suite 600 | |
Entity Address, City or Town | Sugar Land | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 77478 | |
City Area Code | 281 | |
Local Phone Number | 331-6154 | |
Title of 12(b) Security | Common Stock, $0.30 par value | |
Trading Symbol | TISI | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 30,893,575 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 | |
Entity Central Index Key | 0000318833 | |
Current Fiscal Year End Date | --12-31 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 | |
Current assets: | |||
Cash and cash equivalents | $ 22,344 | $ 24,586 | |
Receivables, net | [1] | 194,214 | 194,066 |
Inventory | 36,601 | 36,854 | |
Income tax receivable | 2,346 | 1,474 | |
Prepaid expenses and other current assets | 38,727 | 26,752 | |
Total current assets | 294,232 | 283,732 | |
Property, plant and equipment, net | 166,524 | 170,309 | |
Operating lease right-of-use assets | 68,183 | 63,869 | |
Intangible assets, net | 99,864 | 103,282 | |
Goodwill | 90,393 | 91,351 | |
Deferred income taxes | 5,438 | 6,790 | |
Other assets, net | 11,552 | 11,642 | |
Total assets | 736,186 | 730,975 | |
Current liabilities: | |||
Accounts payable | 45,295 | 42,148 | |
Current portion of long-term debt and finance lease obligations | 352 | 337 | |
Current portion of operating lease obligations | 17,044 | 17,375 | |
Other accrued liabilities | 85,608 | 73,144 | |
Total current liabilities | 148,299 | 133,004 | |
Long-term debt and finance lease obligations | 332,723 | 312,159 | |
Operating lease obligations | 56,701 | 52,207 | |
Defined benefit pension liability | 4,122 | 5,282 | |
Deferred income taxes | 2,068 | 4,375 | |
Other long-term liabilities | 9,413 | 9,345 | |
Total liabilities | 553,326 | 516,372 | |
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; 30,893,447 and 30,874,437 shares issued | 9,263 | 9,257 | |
Additional paid-in capital | 424,812 | 422,589 | |
Retained deficit | (223,856) | (189,565) | |
Accumulated other comprehensive loss | (27,359) | (27,678) | |
Total equity | 182,860 | 214,603 | |
Total liabilities and equity | $ 736,186 | $ 730,975 | |
[1] | Includes billed and unbilled amounts, net of allowance for credit losses. See Note 3 for details. |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Allowance for credit loss, current | $ 9,031 | $ 9,918 |
Intangible assets, accumulated amortization | $ 114,476 | $ 111,318 |
Preferred stock, shares authorized (in shares) | 500,000 | 500,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common stock, par value (in usd per share) | $ 0.30 | $ 0.30 |
Common stock, shares authorized (in shares) | 60,000,000 | 60,000,000 |
Common stock, shares issued (in shares) | 30,893,447 | 30,874,437 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Income Statement [Abstract] | ||
Revenues | $ 194,618 | $ 236,839 |
Operating expenses | 150,917 | 179,353 |
Gross margin | 43,701 | 57,486 |
Selling, general and administrative expenses | 66,124 | 78,444 |
Restructuring and other related charges, net | 1,877 | 186 |
Goodwill impairment charge | 0 | 191,788 |
Operating loss | (24,300) | (212,932) |
Interest expense, net | (9,396) | (6,776) |
Other expense, net | (950) | (472) |
Loss before income taxes | (34,646) | (220,180) |
Benefit for income taxes | 355 | 20,453 |
Net loss | $ (34,291) | $ (199,727) |
Loss per common share: | ||
Basic (in dollars per share) | $ (1.11) | $ (6.54) |
Diluted (in dollars per share) | $ (1.11) | $ (6.54) |
Weighted-average number of shares outstanding: | ||
Weighted-average number of basic shares outstanding (in shares) | 30,878 | 30,540 |
Weighted-average number of diluted shares outstanding (in shares) | 30,878 | 30,540 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (34,291) | $ (199,727) |
Other comprehensive income (loss) before tax: | ||
Foreign currency translation adjustment | 217 | (9,741) |
Foreign currency hedge | 0 | 265 |
Other comprehensive income (loss), before tax | 217 | (9,476) |
Tax (provision) benefit attributable to other comprehensive income (loss) | 102 | (185) |
Other comprehensive income (loss), net of tax | 319 | (9,661) |
Total comprehensive loss | $ (33,972) | $ (209,388) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Shareholders' Equity - USD ($) shares in Thousands, $ in Thousands | Total | Cumulative Effect, Period of Adoption, Adjustment | Common Stock | Additional Paid-in Capital | Retained Earnings (Deficit) | Retained Earnings (Deficit)Cumulative Effect, Period of Adoption, Adjustment | Accumulated Other Comprehensive Loss |
Beginning balance (in shares) at Dec. 31, 2019 | 30,519 | ||||||
Beginning balance at Dec. 31, 2019 | $ 436,670 | $ (1,034) | $ 9,153 | $ 409,034 | $ 48,673 | $ (1,034) | $ (30,190) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net loss | (199,727) | (199,727) | |||||
Foreign currency translation adjustment, net of tax | (9,861) | (9,861) | |||||
Foreign currency hedge, net of tax | 200 | 200 | |||||
Non-cash compensation | 1,530 | 1,530 | |||||
Net settlement of vested stock awards (in shares) | 109 | ||||||
Net settlement of vested stock awards | (349) | $ 30 | (379) | ||||
Ending balance (in shares) at Mar. 31, 2020 | 30,628 | ||||||
Ending Balance at Mar. 31, 2020 | 227,429 | $ 9,183 | 410,185 | (152,088) | (39,851) | ||
Beginning balance (in shares) at Dec. 31, 2020 | 30,874 | ||||||
Beginning balance at Dec. 31, 2020 | 214,603 | $ 9,257 | 422,589 | (189,565) | (27,678) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net loss | (34,291) | (34,291) | |||||
Foreign currency translation adjustment, net of tax | 319 | 319 | |||||
Non-cash compensation | 2,330 | 2,330 | |||||
Net settlement of vested stock awards (in shares) | 19 | ||||||
Net settlement of vested stock awards | (101) | $ 6 | (107) | ||||
Ending balance (in shares) at Mar. 31, 2021 | 30,893 | ||||||
Ending Balance at Mar. 31, 2021 | $ 182,860 | $ 9,263 | $ 424,812 | $ (223,856) | $ (27,359) |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Cash flows from operating activities: | ||
Net loss | $ (34,291) | $ (199,727) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||
Depreciation and amortization | 10,959 | 11,708 |
Amortization of deferred loan costs and debt discounts | 2,040 | 2,055 |
Allowance for credit losses | 352 | (45) |
Foreign currency loss | 1,122 | 574 |
Deferred income taxes | (920) | (5,764) |
Loss (gain) on asset disposal | (18) | 26 |
Goodwill impairment charge | 0 | 191,788 |
Non-cash compensation cost | 2,330 | 1,530 |
Other, net | (1,219) | (965) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (1,601) | 14,357 |
Inventory | 356 | 713 |
Prepaid expenses and other current assets | 2,009 | (5,382) |
Accounts payable | 2,192 | 8,297 |
Other accrued liabilities | 327 | (3,246) |
Income taxes | (821) | (15,002) |
Net cash (used in) provided by operating activities | (17,183) | 917 |
Cash flows from investing activities: | ||
Capital expenditures | (3,413) | (8,305) |
Business acquisitions, net of cash acquired | 0 | (1,013) |
Proceeds from disposal of assets | 29 | 0 |
Other | 0 | 6 |
Net cash used in investing activities | (3,384) | (9,312) |
Cash flows from financing activities: | ||
Payments for debt issuance costs | (2,027) | 0 |
Taxes paid related to net share settlement of share-based awards | (101) | (349) |
Other | (64) | (60) |
Net cash provided by financing activities | 16,808 | 18,494 |
Effect of exchange rate changes on cash and cash equivalents | 1,517 | (1,751) |
Net (decrease) increase in cash and cash equivalents | (2,242) | 8,348 |
Cash and cash equivalents at beginning of period | 24,586 | 12,175 |
Cash and cash equivalents at end of period | 22,344 | 20,523 |
Term Loan1 | ||
Cash flows from financing activities: | ||
Payments under credit facility | 0 | (1,250) |
Revolving Credit Facility | ||
Cash flows from financing activities: | ||
Proceeds from lines of credit | 0 | 20,153 |
Letter of Credit | ABL Facility | Line of Credit | ||
Cash flows from financing activities: | ||
Proceeds from lines of credit | 47,000 | 0 |
Borrowings under ABL Facility, net | 28,000 | 0 |
Payments under credit facility | $ (56,000) | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES Description of business. Unless otherwise indicated, the terms “Team, Inc.,” “Team,” “we,” “our” and “us” are used in this report to refer to Team, Inc., to one or more of its consolidated subsidiaries or to all of them taken as a whole. We are a global leading provider of integrated, digitally-enabled asset performance assurance and optimization solutions. We deploy conventional to highly specialized inspection, condition assessment, maintenance and repair services that result in greater safety, reliability and operational efficiency for our client’s most critical assets. We conduct operations in three segments: Inspection and Heat Treating (“IHT”), Mechanical Services (“MS”) and Quest Integrity. Through the capabilities and resources in these three segments, we believe that Team is uniquely qualified to provide integrated solutions involving in their most basic form: inspection to assess condition; engineering assessment to determine fitness for purpose in the context of industry standards and regulatory codes; and mechanical services to repair, rerate or replace based upon the client’s election. In addition, we are capable of escalating with the client’s needs, as dictated by the severity of the damage found and the related operating conditions, from standard services to some of the most advanced services and integrated asset integrity and reliability management solutions available in the industry. We also believe that Team is unique in its ability to provide services in three distinct client demand profiles: (i) turnaround or project services, (ii) call-out services and (iii) nested or run-and-maintain services. IHT provides integrity management and performance solutions, conventional and advanced non-destructive testing (“NDT”) services, heat treating and thermal services, tank management solutions, and pipeline integrity solutions, as well as associated engineering and condition assessment services. These services can be offered while facilities are running (on-stream), during facility turnarounds or during new construction or expansion activities. MS provides machining, bolting, and vapor barrier weld testing services, hot tap and line intervention services, valve management solutions, and emission control services primarily as call-out and turnaround services under both on-stream and off-line/shut down circumstances. On-stream services offered by MS represent the services offered while plants are operating and under pressure. 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. Quest Integrity provides integrity and reliability management solutions for the process, pipeline and power sectors. These solutions encompass three broadly-defined disciplines including highly specialized in-line inspection services for historically unpiggable process piping and pipelines using proprietary in-line inspection tools and analytical software; advanced engineering and condition assessment services through a multi-disciplined engineering team and related lab support; and advanced digital imaging including remote digital video imaging, laser scanning and laser profilometry-enabled reformer care services. We market our services to companies in a diverse array of industries which include: • Energy (refining, power, and nuclear); • Energy Transition (liquefied natural gas, hydrogen, carbon capture & sequestration, biofuels, and renewable power); • Manufacturing and Process (chemical, petrochemical, pulp and paper industries, manufacturing, automotive and mining); • Midstream and Others (valves, terminals and storage, pipeline and offshore oil and gas); • Public Infrastructure (amusement parks, bridges, ports, construction and building, roads, dams and railways); and • Aerospace and Defense. Ongoing Effects of COVID-19. The impact of the COVID-19 pandemic continues to affect our workforce and operations, as well as the operations of our clients, suppliers and contractors. During this period, we have continued to focus on the following key priorities: • the health and safety of our employees and business continuity; • the alignment of our business to the near term market dynamics and demand for our services; and • our end market revenue diversification strategy. While the ultimate duration of the COVID-19 pandemic remains unclear, we believe the increased availability and administration of COVID-19 vaccines, easing of pandemic related restrictions, reopening of economies, and increasing commodity prices are positive signs of broader economic recovery. Basis for presentation. In the opinion of management, these unaudited interim condensed consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of results for such periods. The results of operations for any interim period are not necessarily indicative of results for the full year. Certain disclosures have been condensed or omitted from the interim financial statements included in this report. These financial statements should be read in conjunction with the consolidated financial statements and notes contained in our Annual Report on Form 10-K for the year ended December 31, 2020 as filed with the Securities and Exchange Commission (“the 2020 Form 10-K”). Use of estimates. Our accounting policies conform to Generally Accepted Accounting Principles in the United States (“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 credit losses, (5) estimating the useful lives of our assets, (6) assessing future tax exposure and the realization of tax assets, (7) selecting assumptions used in the measurement of costs and liabilities associated with defined benefit pension plans, (8) assessments of fair value and (9) managing our foreign currency risk in foreign operations. Fair value of financial instruments . As defined in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820 Fair Value Measurements and Disclosur e (“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. Our financial instruments consist primarily of cash, cash equivalents, accounts receivable, accounts payable and debt obligations. The carrying amount of cash, cash equivalents, accounts receivable and accounts payable are representative of their respective fair values due to the short-term maturity of these instruments. The fair value of our ABL Facility and Term Loan (each defined in Note 9) is representative of the carrying value based upon the variable terms and management’s opinion that the current rates are available to us with the same maturity and security structure are equivalent to that of the debt. The fair value of our 5% Convertible Senior Notes due 2023 (the “Notes”) as of March 31, 2021 and December 31, 2020 is $92.9 million and $91.9 million, respectively, (inclusive of the fair value of the conversion option) and is a “Level 2” measurement, determined based on the observed trading price of these instruments. For additional information regarding our ABL Facility, Term Loan and Notes, see Note 9. Goodwill. Goodwill and intangible assets acquired in a business combination determined to have an indefinite useful life are not amortized, but are instead tested for impairment, and assessed for potential triggering events, 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. If the carrying value of a reporting unit exceeds its fair value, we 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 of each year. We performed our most recent annual impairment test as of December 1, 2020 and concluded that there was no impairment based upon a qualitative assessment to determine if it was more likely than not (that is, a likelihood of more than 50 percent) that the fair values of the reporting units were less than their respective carrying values as of the reporting date. There have been no events that have required an interim assessment of the carrying value of goodwill during 2021. During the three months ended March 31, 2020, we recognized a non-cash goodwill impairment charge of $191.8 million for the IHT operating segment. These charges were a result of an interim goodwill impairment test that was triggered due to certain impairment indicators that were present during the first quarter of 2020, primarily the decline in operating results due to COVID-19, lower oil prices and related impacts on the IHT operating segment. There was $90.4 million of goodwill at March 31, 2021 and $91.4 million at December 31, 2020. The following table presents a rollforward of goodwill for the three months ended March 31, 2021 as follows (in thousands): IHT MS Quest Integrity Consolidated Goodwill, Gross Accumulated Impairment Goodwill, Net Goodwill, Gross Accumulated Impairment Goodwill, Net Goodwill, Gross Accumulated Impairment Goodwill, Net Goodwill, Gross Accumulated Impairment Goodwill, Net Balance at December 31, 2020 $ 212,928 $ (212,928) $ — $ 110,721 $ (54,101) $ 56,620 $ 34,731 $ — $ 34,731 $ 358,380 $ (267,029) $ 91,351 FX Adjustments — — — (559) — (559) (399) — (399) (958) — (958) Balance at March 31, 2021 $ 212,928 $ (212,928) $ — $ 110,162 $ (54,101) $ 56,061 $ 34,332 $ — $ 34,332 $ 357,422 $ (267,029) $ 90,393 Concentration of credit risk. No single customer accounts for more than 10% of consolidated revenues. Earnings (loss) per share. Basic earnings (loss) per share (“EPS”) is computed by dividing net income (loss) by the weighted-average number of shares of common stock outstanding during the period. Diluted EPS is computed by dividing net income (loss) by the sum of the weighted-average number of shares of common stock outstanding during the period and, if dilutive, the assumed exercise or conversion of (1) outstanding share-based compensation, (2) our Notes and (3) outstanding Warrants (defined in Note 9). The impact of share-based compensation, the Notes and warrants are calculated using the treasury stock method. Our intent is to settle the principal amount of the Notes in cash upon conversion. If the conversion value exceeds the principal amount, we may elect to deliver shares of our common stock with respect to the remainder of our conversion obligation in excess of the aggregate principal amount. Amounts used in basic and diluted earnings per share, for the three months ended March 31, 2021 and 2020, are as follows (in thousands): Three Months Ended 2021 2020 (unaudited) (unaudited) Weighted-average number of basic shares outstanding 30,878 30,540 Stock options, stock units and performance awards — — Notes — — Warrants — — Total shares and dilutive securities 30,878 30,540 For the three months ended March 31, 2021 and 2020, all outstanding share-based compensation awards and the Warrants were excluded from the calculation of diluted EPS as their inclusion would be antidilutive due to the net loss in both periods. Also, for the three months ended March 31, 2021 and 2020, the Notes were excluded from diluted EPS as the conversion price exceeded the average price of our common stock during those periods. For information on our Notes and Warrants, refer to Note 9. For information on our share-based compensation awards, refer to Note 12. Newly Adopted Accounting Principles ASU No. 2019-12. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740) Simplifying the Accounting for Income Taxes , that simplifies the accounting for income taxes by eliminating some exceptions to the general approach in ASC 740, Income Taxes as well as clarifies aspects of existing guidance to promote more consistent application. The adoption of ASU No. 2019-12 had no impact on the current quarter. Accounting Principles Not Yet Adopted ASU No. 2020-04. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting . The guidance in ASU 2020-04 and ASU 2021-01, Reference Rate Reform (Topic 848): Scope , which was issued in January 2021, provides optional expedients and exceptions for applying GAAP to contract modifications and hedging relationships, subject to meeting certain criteria that reference LIBOR or another rate that is expected to be discontinued. The amendments in ASU 2020-04 are effective for all entities as of March 12, 2020 through December 31, 2022. While we are currently determining whether we will elect the optional expedients, we do not expect our adoption of these ASU’s to have a significant impact on our consolidated financial position, results of operations, and cash flows. ASU No. 2020-06. In August 2020, the FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity , which simplifies the accounting for convertible instruments by eliminating certain separation models and will generally be reported as a single liability at its amortized cost. In addition, ASU 2020-06 eliminates the treasury stock method to calculate diluted EPS for convertible instruments and requires the use of the if-converted method. We expect to adopt ASU 2020-06 beginning January 1, 2022, at which time we would utilize the if-converted method, which would require us to assume the Notes would be settled entirely in shares of common stock for purposes of calculating diluted EPS, if the effect would be dilutive. We are still evaluating the other impacts this ASU may have on our financial statements. |
REVENUE
REVENUE | 3 Months Ended |
Mar. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | REVENUE In accordance with ASC 606, Revenue from Contracts with Customers , we follow a five-step process to recognize revenue: (1) identify the contract with the customer, (2) identify the performance obligations, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations, and (5) recognize revenue when the performance obligations are satisfied. The majority of our contracts with customers are short-term in nature and billed on a time and materials basis, while certain other contracts are at a fixed price. Certain contracts may contain a combination of fixed and variable elements. We act as a principal and have performance obligations to provide the service itself or oversee the services provided by any subcontractors. Revenue is measured based on consideration specified in a contract with a customer and excludes amounts collected on behalf of third parties, such as taxes assessed by governmental authorities. In contracts where the amount of consideration is variable, we consider our experience with similar contracts in estimating the amount to which we will be entitled and recognize revenues accordingly. As most of our contracts contain only one performance obligation, the allocation of a contract’s transaction price to multiple performance obligations is generally not applicable. Customers are generally billed as we satisfy our performance obligations and payment terms typically range from 30 to 90 days from the invoice date. Billings under certain fixed-price contracts may be based upon the achievement of specified milestones, while some arrangements may require advance customer payment. Our contracts do not include significant financing components since the contracts typically span less than one year. Contracts generally include an assurance type warranty clause to guarantee that the services comply with agreed specifications. The warranty period typically is 12 months or less from the date of service. Warranty expenses were not material for the three months ended March 31, 2021 and 2020. Revenue is recognized as (or when) the performance obligations are satisfied by transferring control over a service or product to the customer. Revenue recognition guidance prescribes two recognition methods (over time or point in time). Most of our performance obligations qualify for recognition over time because we typically perform our services on customer facilities or assets and customers receive the benefits of our services as we perform. Where a performance obligation is satisfied over time, the related revenue is also recognized over time using the method deemed most appropriate to reflect the measure of progress and transfer of control. For our time and materials contracts, we are generally able to elect the right-to-invoice practical expedient, which permits us to recognize revenue in the amount to which we have a right to invoice the customer if that amount corresponds directly with the value to the customer of our performance completed to date. For our fixed price contracts, we typically recognize revenue using the cost-to-cost method, which measures the extent of progress towards completion based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation. Under this method, revenue is recognized proportionately as costs are incurred. For contracts where control is transferred at a point in time, revenue is recognized at the time control of the asset is transferred to the customer, which is typically upon delivery and acceptance by the customer. Disaggregation of revenue. Essentially all of our revenues are associated with contracts with customers. A disaggregation of our revenue from contracts with customers by geographic region, by reportable operating segment and by service type is presented below (in thousands): Three Months Ended March 31, 2021 Three Months Ended March 31, 2020 (unaudited) (unaudited) United States and Canada Other Countries Total United States and Canada Other Countries Total Revenue: IHT $ 89,225 $ 1,914 $ 91,139 $ 105,304 $ 2,577 $ 107,881 MS 60,046 27,350 87,396 76,582 27,937 104,519 Quest Integrity 9,055 7,028 16,083 12,833 11,606 24,439 Total $ 158,326 $ 36,292 $ 194,618 $ 194,719 $ 42,120 $ 236,839 Three Months Ended March 31, 2021 (unaudited) Non-Destructive Evaluation and Testing Services Repair and Maintenance Services Heat Treating Other Total Revenue: IHT $ 71,530 $ 81 $ 13,455 $ 6,073 $ 91,139 MS — 85,976 689 731 87,396 Quest Integrity 16,083 — — — 16,083 Total $ 87,613 $ 86,057 $ 14,144 $ 6,804 $ 194,618 Three Months Ended March 31, 2020 (unaudited) Non-Destructive Evaluation and Testing Services Repair and Maintenance Services Heat Treating Other Total Revenue: IHT $ 86,407 $ 101 $ 14,146 $ 7,227 $ 107,881 MS — 102,615 479 1,425 104,519 Quest Integrity 24,439 — — — 24,439 Total $ 110,846 $ 102,716 $ 14,625 $ 8,652 $ 236,839 For additional information on our reportable operating segments and geographic information, refer to Note 15. Contract balances. The timing of revenue recognition, billings and cash collections results in trade accounts receivable, contract assets and contract liabilities on the consolidated balance sheets. Trade accounts receivable include billed and unbilled amounts currently due from customers and represent unconditional rights to receive consideration. The amounts due are stated at their net estimated realizable value. Refer to Note 3 for additional information on the allowance for credit losses and our trade receivables. Contract assets include unbilled amounts typically resulting from sales under fixed-price contracts when the cost-to-cost method of revenue recognition is utilized, the revenue recognized exceeds the amount billed to the customer and the right to payment is conditional on something other than the passage of time. Amounts may not exceed their net realizable value. If we receive advances or deposits from our customers, a contract liability is recorded. Additionally, a contract liability arises if items of variable consideration result in less revenue being recorded than what is billed. Contract assets and contract liabilities are generally classified as current. Trade accounts receivable, contract assets and contract liabilities consisted of the following (in thousands): March 31, 2021 December 31, 2020 (unaudited) Trade accounts receivable, net 1 $ 194,214 $ 194,066 Contract assets 2 $ 4,859 $ 5,242 Contract liabilities 3 $ 961 $ 930 _________________ 1 Includes billed and unbilled amounts, net of allowance for credit losses. See Note 3 for details. 2 Included in the “Prepaid expenses and other current assets” line on the condensed consolidated balance sheets. 3 Included in the “Other accrued liabilities” line of the condensed consolidated balance sheets. The $0.4 million decrease in our contract assets from December 31, 2020 to March 31, 2021 is due to less fixed price contracts in progress at March 31, 2021 as compared to December 31, 2020. Contract liabilities as of March 31, 2021 are associated with contracts under which customers had paid for all or a portion of the consideration in advance of the work being performed. Due to the short-term nature of our contracts, contract liability balances as of the end of any period are generally recognized as revenue in the following quarter. Contract costs. We recognize the incremental costs of obtaining contracts as selling, general and administrative expenses when incurred if the amortization period of the asset that otherwise would have been recognized is one year or less. Assets recognized for costs to obtain a contract were not material as of March 31, 2021. Costs to fulfill a contract are recorded as assets if they relate directly to a contract or a specific anticipated contract, the costs generate or enhance resources that will be used in satisfying performance obligations in the future and the costs are expected to be recovered. Costs to fulfill a contract recognized as assets primarily consist of labor and materials costs and generally relate to engineering and set-up costs incurred prior to the satisfaction of performance obligations. Assets recognized for costs to fulfill a contract are included in the “Prepaid expenses and other current assets” line of the condensed consolidated balance sheets and were not material as of March 31, 2021. Such assets are recognized as expenses as we transfer the related goods or services to the customer. All other costs to fulfill a contract are expensed as incurred. |
RECEIVABLES
RECEIVABLES | 3 Months Ended |
Mar. 31, 2021 | |
Receivables [Abstract] | |
RECEIVABLES | RECEIVABLES Accounts receivable consisted of the following (in thousands): March 31, 2021 December 31, 2020 (unaudited) Trade accounts receivable $ 142,841 $ 157,513 Unbilled receivables 60,404 46,471 Allowance for credit losses (9,031) (9,918) Total $ 194,214 $ 194,066 Topic 326 - Credit Losses (“ASC 326”), which we adopted January 1, 2020, applies to financial assets measured at amortized cost, including trade and unbilled accounts receivable, and requires immediate recognition of lifetime expected credit losses. Significant factors that affect the expected collectability of our receivables include macroeconomic trends and forecasts in the oil and gas, refining, power, and petrochemical markets and changes in our results of operations and forecasts. For unbilled receivables, we consider them as short-term in nature as they are normally converted to trade receivables within 90 days, thus future changes in economic conditions will not have a significant effect on the credit loss estimate. We have identified the following factors that primarily impact the collectability of our receivables and therefore determine the pools utilized to calculate expected credit losses: (i) the aging of the receivable, (ii) any identification of known collectability concerns with specific receivables and (iii) variances in economic risk characteristics across geographic regions. For trade receivables, customers typically are provided with payment due date terms of 30 days upon issuance of an invoice. We have tracked historical loss information for our trade receivables and compiled historical credit loss percentages for different aging categories. We believe that the historical loss information we have compiled is a reasonable basis on which to determine expected credit losses for trade receivables because the composition of the trade receivables is consistent with that used in developing the historical credit-loss percentages as typically our customers and payment terms do not change significantly. Generally, a longer outstanding receivable equates to a higher percentage of the outstanding balance as current expected credit losses. We update the historical loss information for current conditions and reasonable and supportable forecasts that affect the expected collectability of the trade receivable using a loss-rate approach. We have not seen a negative trend in the current economic environment that significantly impacts our historical credit-loss percentages; however, we will continue to monitor for changes that would indicate the historical loss information is no longer a reasonable basis for the determination of our expected credit losses. Our forecasted loss rates inherently incorporate expected macroeconomic trends. A loss-rate method for estimating expected credit losses on a pooled basis is applied for each aging category for receivables that continue to exhibit similar risk characteristics. To measure expected credit losses for individual receivables with specific collectability risk, we identify specific factors based on customer-specific facts and circumstances that are unique to each customer. Customer accounts with different risk characteristics are separately identified and a specific reserve is determined for these accounts based on the assessed credit risk. We have also identified the following geographic regions in which to distinguish our trade receivables: the (i) United States, (ii) Canada, (iii) the European Union, (iv) the United Kingdom, and (v) other countries. These geographic regions are considered appropriate as they each operate in different economic environments with different foreign currencies, and therefore share similar economic risk characteristics. For each geographic region we evaluate the historical loss information and determine credit-loss percentages to apply to each aging category and individual receivable with specific risk characteristics. We estimate future expected credit losses based on forecasted changes in gross domestic product and oil demand for each region. We consider one year from the financial statement reporting date as representing a reasonable forecast period as this period aligns with the expected collectability of our trade receivables. Financial distress experienced by our customers could have an adverse impact on us in the event our customers are unable to remit payment for the products or services we provide or otherwise fulfill their obligations to us. In determining the current expected credit losses, we review macroeconomic conditions, market specific conditions, and internal forecasts to identify potential changes in our assessment. The following table shows a rollforward of the allowance for credit losses: March 31, 2021 March 31, 2020 (unaudited) (unaudited) Balance at beginning of period 9,918 $ 9,990 Adoption of account pronouncement ASC 326 1 — 1,410 Provision for expected credit losses 352 (45) Write-offs (1,212) (1,441) Foreign exchange effects (27) (240) Balance at end of period 9,031 9,674 _________________ 1 Due to the initial adoption of ASC 326 as of January 1, 2020. |
INVENTORY
INVENTORY | 3 Months Ended |
Mar. 31, 2021 | |
Inventory Disclosure [Abstract] | |
INVENTORY | INVENTORY Inventory consisted of the following (in thousands): March 31, 2021 December 31, 2020 (unaudited) Raw materials $ 7,692 $ 7,395 Work in progress 2,967 2,890 Finished goods 25,942 26,569 Total $ 36,601 $ 36,854 |
PROPERTY, PLANT AND EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT | 3 Months Ended |
Mar. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT | PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment consisted of the following (in thousands): March 31, 2021 December 31, 2020 (unaudited) Land $ 5,784 $ 5,805 Buildings and leasehold improvements 57,668 57,632 Machinery and equipment 304,073 302,886 Furniture and fixtures 11,753 11,450 Capitalized ERP system development costs 45,917 45,917 Computers and computer software 20,512 20,508 Automobiles 4,367 4,518 Construction in progress 9,376 8,329 Total 459,450 457,045 Accumulated depreciation and amortization (292,926) (286,736) Property, plant and equipment, net $ 166,524 $ 170,309 Included in the table above are assets under finance leases of $4.7 million and $4.8 million, net of accumulated amortization of $1.0 million and $0.9 million as of March 31, 2021 and December 31, 2020, respectively. Depreciation expense for the three months ended March 31, 2021 and 2020 was $7.5 million and $8.1 million, respectively. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 3 Months Ended |
Mar. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | INTANGIBLE ASSETS Intangible assets consisted of the following (in thousands): March 31, 2021 December 31, 2020 (unaudited) Gross Accumulated Net Gross Accumulated Net Customer relationships $ 175,289 $ (79,584) $ 95,705 $ 175,418 $ (76,541) $ 98,877 Non-compete agreements 5,541 (5,541) — 5,569 (5,569) — Trade names 24,797 (21,893) 2,904 24,870 (21,794) 3,076 Technology 7,858 (6,727) 1,131 7,879 (6,691) 1,188 Licenses 855 (731) 124 864 (723) 141 Total $ 214,340 $ (114,476) $ 99,864 $ 214,600 $ (111,318) $ 103,282 Amortization expense of intangible assets for the three months ended March 31, 2021 and March 31, 2020 was $3.4 million and $3.6 million, respectively. Amortization expense to be recognized for the remainder of 2021 is approximately $10 million and approximately $13 million per year from 2022 through 2025. |
OTHER ACCRUED LIABILITIES
OTHER ACCRUED LIABILITIES | 3 Months Ended |
Mar. 31, 2021 | |
Payables and Accruals [Abstract] | |
OTHER ACCRUED LIABILITIES | OTHER ACCRUED LIABILITIES Other accrued liabilities consisted of the following (in thousands): March 31, 2021 December 31, 2020 (unaudited) Payroll and other compensation expenses $ 43,278 $ 42,668 Legal and professional accruals 19,437 4,135 Insurance accruals 7,247 6,659 Property, sales and other non-income related taxes 6,074 8,722 Accrued commission 661 1,048 Accrued interest 1,590 2,437 Other 7,321 7,475 Total $ 85,608 $ 73,144 Payroll and other compensation expenses include all payroll related accruals including, among others, accrued vacation, severance, and bonuses. Legal and professional accruals include accruals for legal and professional fees as well as accrued legal claims. Certain legal claims are covered by insurance and the related insurance receivable for these claims is recorded in Prepaid expenses and other current assets. Insurance accruals primarily relate to accrued medical and workers compensation costs. Property, sales and other non-income related taxes includes accruals for items such as sales and use tax, property tax and other related tax accruals. Accrued interest relates to the interest accrued on our long-term debt. Other accrued liabilities includes items such as contract liabilities and other accrued expenses. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES We recorded an income tax benefit of $0.4 million for the three months ended March 31, 2021 compared to a benefit of $20.5 million for the three months ended March 31, 2020. The effective tax rate was 1.0% for the three months ended March 31, 2021, compared to 9.3% for the three months ended March 31, 2020. Our effective tax rate differed from the statutory tax rate due to tax losses in jurisdictions in which the tax benefits have been offset by valuation allowances. |
LONG-TERM DEBT
LONG-TERM DEBT | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | Long-term debt consisted of the following (in thousands): March 31, 2021 December 31, 2020 (unaudited) ABL Facility $ 28,000 $ 9,000 Term Loan 1 214,682 213,809 Total 242,682 222,809 Convertible debt 1 85,300 84,534 Finance lease obligations 5,093 5,153 Total debt and finance lease obligations 333,075 312,496 Current portion of long-term debt and finance lease obligations (352) (337) Total long-term debt and finance lease obligations, less current portion $ 332,723 $ 312,159 _________________ 1 Comprised of principal amount outstanding, less unamortized discount and issuance costs. ABL Facility On December 18, 2020, we entered into an asset-based credit agreement (the “ABL Facility”) led by Citibank, N.A., as agent, which provides for available borrowings up to $150 million. The ABL Facility matures and all outstanding amounts become due and payable on December 18, 2024, subject to certain conditions. The ABL Facility includes a $50 million sublimit for letters of credit issuance and $35 million sublimit for swingline borrowings. Additionally, subject to certain conditions, including obtaining additional commitments, the ABL Facility may be increased by an amount not to exceed $50 million. Our obligations under the ABL Facility are guaranteed by certain of our direct and indirect subsidiaries, as set forth in the ABL Facility agreement. The ABL Facility is secured on a first priority basis by, among other things, our accounts receivable, deposit accounts, securities accounts and inventory, including those of our direct and indirect subsidiary guarantors, and on a second priority basis by substantially all other assets of our direct and indirect subsidiary guarantors. Borrowing availability under the ABL Facility is based on a percentage of the value of accounts receivable and inventory, reduced for certain reserves. Borrowings under the ABL Facility bear interest through maturity at a variable rate based upon, at our option, an annual rate of either a base rate (“Base Rate”) or a LIBOR rate, plus an applicable margin. Borrowings made through a Base Rate do not have a stated maturity date, however, LIBOR borrowings are typically issued with terms of 90 days or less. For purposes of classification of borrowings and payments made under the ABL Facility in the Statement of Cash Flows, we report Base Rate borrowings on a gross basis, while LIBOR borrowings (and swingline borrowings, which are due on demand) are presented on a net basis. At March 31, 2021, we had $22.3 million of cash on hand and approximately $46.7 million of available borrowing capacity under the ABL Facility. The ABL Facility contains customary conditions to borrowings, events of default and covenants, all of which we were in compliance with at March 31, 2021. Atlantic Park Term Loan On December 18, 2020, we also entered into a credit agreement with Atlantic Park Strategic Capital Fund, L.P., as agent, and APSC Holdco II, L.P. (“APSC”), as lender, pursuant to which we borrowed a $250.0 million term loan (the “Term Loan”). The Term Loan was issued with a 3% original issuance discount (“OID”), such that total proceeds received were $242.5 million. The Term Loan matures, and all outstanding amounts become due and payable on December 18, 2026, subject to certain conditions. The Term Loan is secured by substantially all of our assets, other than those secured on a first lien basis by the ABL Facility, and we may increase the Term Loan by an amount not to exceed $100 million. The effective interest rate on the Term Loan at March 31, 2021 was 11.95%. The Term Loan contains prepayment provisions, events of default and covenants, all of which we were in compliance with at March 31, 2021. 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 $19.6 million at March 31, 2021 and $19.5 million at December 31, 2020. Outstanding letters of credit reduce amounts available under our ABL Facility and are considered as having been funded for purposes of calculating our financial covenants. Warrant On December 18, 2020, in connection with the execution of the Term Loan, we issued to APSC a warrant to purchase up to 3,582,949 shares of our common stock (the “Warrants”), which is exercisable at the holder’s option at any time, in whole or in part, until June 14, 2028, at an exercise price of $7.75 per share. The exercise price and the number of shares of common stock issuable on exercise of the Warrants are subject to certain antidilution adjustments. Convertible Notes On July 31, 2017, we issued $230.0 million principal amount of 5.00% Convertible Senior Notes due 2023 in a private offering to qualified institutional buyers (as defined in the Securities Act of 1933) pursuant to Rule 144A under the Securities Act. In December 2020, we retired $136.9 million par value of the Notes, and as of March 31, 2021, the principal amount outstanding was $93.1 million. The Notes bear interest at a rate of 5.0% per year, payable semiannually in arrears on February 1 and August 1 of each year. 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. 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 • 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. As a result of the redemption and extinguishment of the Notes in December 2020, the Notes are convertible into 4,291,705 shares of our common stock. The Notes will be convertible into, subject to various conditions, cash or shares of our common stock or a combination of cash and shares of our common stock, in each case, at our election. 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 we provides notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which we 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. As of March 31, 2021 and December 31, 2020, the Notes were recorded in our condensed consolidated balance sheets as follows (in thousands): March 31, 2021 December 31, 2020 (unaudited) Liability component: Principal $ 93,130 $ 93,130 Unamortized issuance costs (1,312) (1,440) Unamortized discount (6,518) (7,156) Net carrying amount of the liability component 1 $ 85,300 $ 84,534 Equity component: Carrying amount of the equity component, net of issuance costs 2 $ 7,969 $ 7,969 Carrying amount of the equity component, net of issuance costs $ 37,276 $ 37,276 _________________ 1 Included in the “Long-term debt” line of the condensed consolidated balance sheets. 2 Relates to the portion of the Notes accounted for under ASC 470-20 (defined below) and is included in the “Additional paid-in capital” line of the condensed consolidated balance sheets. The following table sets forth interest expense information related to the Notes (dollars in thousands): Three Months Ended 2021 2020 (unaudited) (unaudited) Coupon interest $ 1,164 $ 2,875 Amortization of debt discount and issuance costs 766 1,707 Total interest expense on Notes $ 1,930 $ 4,582 Effective interest rate 9.12 % 9.12 % As of March 31, 2021, the remaining amortization period for the debt discount and issuance costs is 28 months. |
LEASES
LEASES | 3 Months Ended |
Mar. 31, 2021 | |
Leases [Abstract] | |
LEASES | LEASES We determine if an arrangement is a lease at inception. Operating leases are included in “Operating lease right-of-use (‘ROU’) assets”, “operating lease liabilities” and “current portion of operating lease obligations” on our consolidated balance sheets. Finance leases are included in “property, plant and equipment, net”, “current portion of long-term debt and finance lease obligations” and “long-term debt and finance lease obligations” on our consolidated balance sheets. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Operating lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. Variable lease payments and short-term lease payments (leases with initial terms less than 12 months) are expensed as incurred. We have lease agreements with lease and non-lease components for certain equipment, office, and vehicle leases. We have elected the practical expedient to not separate lease and non-lease components and account for both as a single lease component. We have operating and finance leases primarily for equipment, real estate, and vehicles. Our leases have remaining lease terms of 1 year to 15 years, some of which may include options to extend the leases for up to 10 years, and some of which may include options to terminate the leases within 1 year. The components of lease expense are as follows (in thousands): Three Months Ended March 31, 2021 2020 (unaudited) (unaudited) Operating lease costs $ 7,239 $ 7,518 Variable lease costs 1,276 1,493 Finance lease costs: Amortization of right-of-use assets 117 108 Interest on lease liabilities 78 81 Total lease cost $ 8,710 $ 9,200 Other information related to leases are as follows (in thousands): Three Months Ended March 31, 2021 2020 Supplemental cash flow information: (unaudited) (unaudited) Cash paid for amounts included in measurement of lease liabilities Operating cash flows from operating leases 5,356 5,865 Operating cash flows from finance leases 80 83 Financing cash flows from finance leases 78 65 Right-of-use assets obtained in exchange for lease obligations Operating leases 8,172 1,092 Finance leases 22 — Amounts recognized in the condensed consolidated balance sheet are as follows (in thousands): March 31, 2021 December 31, 2020 Operating Leases: (unaudited) Operating lease right-of-use assets $ 68,183 $ 63,869 Current portion of operating lease obligations 17,044 17,375 Operating lease obligations (non-current) 56,701 52,207 Weighted average remaining lease term 6.0 years 6.0 years Weighted average discount rate 6.8 % 6.7 % March 31, 2021 December 31, 2020 Finance Leases: (unaudited) Property, plant and equipment, net $ 4,679 $ 4,779 Current portion of long-term debt and finance lease obligations 352 337 Long-term debt and finance lease obligations 4,741 4,816 Weighted average remaining lease term 12.0 years 12.0 years Weighted average discount rate 6.2 % 6.2 % As of March 31, 2021, we have no material additional operating and finance leases that have not yet commenced. As of March 31, 2021, future minimum lease payments under non-cancellable leases (excluding short-term leases) are as follows (in thousands): Operating Leases Finance Lease (unaudited) (unaudited) 2021 (Remainder of the year) 26,571 629 2022 16,553 629 2023 13,074 564 2024 10,718 547 2025 8,358 556 Thereafter 22,780 4,553 Total future minimum lease payments 98,054 7,478 Less: Interest (24,309) (2,385) Present value of lease liabilities $ 73,745 $ 5,093 |
LEASES | LEASES We determine if an arrangement is a lease at inception. Operating leases are included in “Operating lease right-of-use (‘ROU’) assets”, “operating lease liabilities” and “current portion of operating lease obligations” on our consolidated balance sheets. Finance leases are included in “property, plant and equipment, net”, “current portion of long-term debt and finance lease obligations” and “long-term debt and finance lease obligations” on our consolidated balance sheets. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Operating lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. Variable lease payments and short-term lease payments (leases with initial terms less than 12 months) are expensed as incurred. We have lease agreements with lease and non-lease components for certain equipment, office, and vehicle leases. We have elected the practical expedient to not separate lease and non-lease components and account for both as a single lease component. We have operating and finance leases primarily for equipment, real estate, and vehicles. Our leases have remaining lease terms of 1 year to 15 years, some of which may include options to extend the leases for up to 10 years, and some of which may include options to terminate the leases within 1 year. The components of lease expense are as follows (in thousands): Three Months Ended March 31, 2021 2020 (unaudited) (unaudited) Operating lease costs $ 7,239 $ 7,518 Variable lease costs 1,276 1,493 Finance lease costs: Amortization of right-of-use assets 117 108 Interest on lease liabilities 78 81 Total lease cost $ 8,710 $ 9,200 Other information related to leases are as follows (in thousands): Three Months Ended March 31, 2021 2020 Supplemental cash flow information: (unaudited) (unaudited) Cash paid for amounts included in measurement of lease liabilities Operating cash flows from operating leases 5,356 5,865 Operating cash flows from finance leases 80 83 Financing cash flows from finance leases 78 65 Right-of-use assets obtained in exchange for lease obligations Operating leases 8,172 1,092 Finance leases 22 — Amounts recognized in the condensed consolidated balance sheet are as follows (in thousands): March 31, 2021 December 31, 2020 Operating Leases: (unaudited) Operating lease right-of-use assets $ 68,183 $ 63,869 Current portion of operating lease obligations 17,044 17,375 Operating lease obligations (non-current) 56,701 52,207 Weighted average remaining lease term 6.0 years 6.0 years Weighted average discount rate 6.8 % 6.7 % March 31, 2021 December 31, 2020 Finance Leases: (unaudited) Property, plant and equipment, net $ 4,679 $ 4,779 Current portion of long-term debt and finance lease obligations 352 337 Long-term debt and finance lease obligations 4,741 4,816 Weighted average remaining lease term 12.0 years 12.0 years Weighted average discount rate 6.2 % 6.2 % As of March 31, 2021, we have no material additional operating and finance leases that have not yet commenced. As of March 31, 2021, future minimum lease payments under non-cancellable leases (excluding short-term leases) are as follows (in thousands): Operating Leases Finance Lease (unaudited) (unaudited) 2021 (Remainder of the year) 26,571 629 2022 16,553 629 2023 13,074 564 2024 10,718 547 2025 8,358 556 Thereafter 22,780 4,553 Total future minimum lease payments 98,054 7,478 Less: Interest (24,309) (2,385) Present value of lease liabilities $ 73,745 $ 5,093 |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 3 Months Ended |
Mar. 31, 2021 | |
Retirement Benefits [Abstract] | |
EMPLOYEE BENEFIT PLANS | EMPLOYEE BENEFIT PLANS We have a defined benefit pension plan covering certain United Kingdom employees (the “U.K. Plan”). Net periodic pension credit includes the following components (in thousands): Three Months Ended March 31, 2021 2020 (unaudited) (unaudited) Interest cost $ 322 $ 441 Expected return on plan assets (503) (578) Amortization of prior service cost 9 8 Net periodic pension credit $ (173) $ (129) The expected long-term rate of return on invested assets is determined based on the weighted average of expected returns on asset investment categories for the U.K. Plan as follows: 2.1% overall, 4.6% for equities and 1.4% for debt securities. We expect to contribute $4.1 million to the U.K. Plan for 2021, of which $1.0 million has been contributed through March 31, 2021. |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 3 Months Ended |
Mar. 31, 2021 | |
Share-based Payment Arrangement [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 awards which include, but are not limited to, stock options, stock units, common stock or performance awards to officers, directors and key employees. At March 31, 2021, there were approximately 1.7 million restricted stock units, performance awards and stock options outstanding. 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. In May 2018, our shareholders approved the 2018 Team, Inc. Equity Incentive Plan (the “2018 Plan”), which replaced the 2016 Team, Inc. Equity Incentive Plan (the “2016 Plan”). The 2018 Plan authorizes the issuance of share-based awards representing up to 1.2 million shares of common stock, plus the number of shares remaining available for issuance under the 2016 Plan, plus the number of shares subject to outstanding awards under specified prior plans that may become available for reissuance in certain circumstances. Shares issued in connection with our share-based compensation are issued out of authorized but unissued common stock. Compensation expense related to all share-based awards totaled $2.3 million and $1.5 million for the three months ended March 31, 2021 and 2020, respectively. Share-based compensation expense reflects an estimate of expected forfeitures. At March 31, 2021, $12.5 million of unrecognized compensation expense related to share-based compensation is expected to be recognized over a remaining weighted-average period of 2.0 years. Stock units 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 vests immediately. Compensation expense related to stock units and director stock grants totaled $1.5 million and $1.1 million for the three months ended March 31, 2021 and 2020. Transactions involving our stock units and director stock grants during the three months ended March 31, 2021 are summarized below: Three Months Ended (unaudited) No. of Stock Weighted (in thousands) Stock and stock units, beginning of period 854 $ 12.55 Changes during the period: Granted — $ — Vested and settled — $ — Forfeited and cancelled (10) $ 12.78 Stock and stock units, end of period 844 $ 12.54 Performance stock units 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, we communicate “target awards” to the executive officers during the first year 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 are subject to a two-year performance period and a concurrent two-year service period. The performance goals are separated into two independent performance factors based on (i) relative shareholder return (“RTSR”) as measured against a designated peer group and (ii) results of operations over the two-year performance period, with possible payouts ranging from 0% to 200% of the target awards for each of the two performance factors. The LTPSU awards granted in 2019 vested as of March 15, 2021 at the RTSR performance target level of 25% and the results of operations performance metric at 0% of the target level. A total of 19,048 shares, net of shares withheld for taxes, were issued in connection with the achievement of the 25% performance target. The RTSR and the stock price milestone factors are considered to be market conditions under GAAP. For performance units subject to market conditions, we determine the fair value of the performance units 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 for awards with market conditions is recognized on a straight-line basis over the longer of (i) the minimum required service period and (ii) the service period derived from the Monte Carlo simulation, separately for each vesting tranche. For performance units subject to market conditions, because the expected outcome is incorporated into the grant date fair value through the Monte Carlo simulation, compensation expense is not subsequently adjusted for changes in the expected or actual performance outcome. For performance units not subject to market conditions, we determine the fair value of each performance unit based on the market price of our common stock on the date of grant. For these awards, we recognize compensation expense over the vesting term on a straight-line basis based upon the performance target that is probable of being met, subject to adjustment for changes in the expected or actual performance outcome. Compensation expense related to performance awards totaled $0.8 million and $0.4 million for the three months ended March 31, 2021 and 2020, respectively. Transactions involving our performance awards during the three months ended March 31, 2021 are summarized below: Three Months Ended (unaudited) Performance Units Subject to Market Conditions Performance Units Not Subject to Market Conditions No. of Stock Units 1 Weighted No. of Stock Units 1 Weighted (in thousands) (in thousands) Performance stock units, beginning of period 553 $ 13.69 273 $ 12.55 Changes during the period: Granted 110 $ 14.96 110 $ 11.69 Vested and settled (28) $ 25.24 — $ — Forfeited and cancelled (95) $ 23.14 (122) $ 17.49 Performance stock units, end of period 540 $ 11.71 261 $ 9.87 _________________ |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE LOSS | 3 Months Ended |
Mar. 31, 2021 | |
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): Three Months Ended Three Months Ended (unaudited) (unaudited) Foreign Foreign Defined Benefit Pension Plans Tax Total Foreign Foreign Defined Benefit Pension Plans Tax Total Balance, beginning of period $ (23,045) $ 2,988 $ (8,021) $ 400 $ (27,678) $ (26,742) $ 4,186 $ (8,021) $ 387 $ (30,190) Other comprehensive income (loss) 217 — — 102 319 (9,741) 265 — (185) (9,661) Balance, end of period $ (22,828) $ 2,988 $ (8,021) $ 502 $ (27,359) $ (36,483) $ 4,451 $ (8,021) $ 202 $ (39,851) The following table represents the related tax effects allocated to each component of other comprehensive income (loss) (in thousands): Three Months Ended Three Months Ended (unaudited) (unaudited) Gross Tax Net Gross Tax Net Foreign currency translation adjustments $ 217 $ 102 $ 319 $ (9,741) $ (120) $ (9,861) Foreign currency hedge — — — 265 (65) 200 Total $ 217 $ 102 $ 319 $ (9,476) $ (185) $ (9,661) |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES California Wage and Hour Litigation - On June 24, 2019 and August 26, 2020, two putative class action complaints were filed against Team Industrial Services, Inc. in the Superior Court for the County of Los Angeles, California. The plaintiff in the first filed action is Michael Thai (the “Thai action”). The plaintiff in the second filed action is Alex Esqueda (the “Esqueda action”). All of the claims pleaded in the Esqueda action were also pleaded in the Thai action. Each of the plaintiffs assert claims for alleged wage and hour violations under the California Labor Code (for alleged unpaid wages, failure to provide meal and rest breaks, and derivative related claims). The Thai action also asserts a putative class claim for violation of the Fair Credit Reporting Act. Both cases were stayed shortly after filing to allow the parties to mediate the claims. On February 23, 2021, the Los Angeles Superior Court designated the Thai and Esqueda actions as related cases. While the parties mediated on March 18, 2021, the cases did not settle. On April 16, 2021, Team Industrial Services, Inc. removed both the Thai and Esqueda actions to the United States District Court for the Central District of California, where they remain pending. We intend to vigorously defend ourselves in the Thai and Esqueda actions. No assurances can be provided as to the timing or outcome of these matters or the impact they may have on us, our consolidated financial condition, results of operations or cash flows. Notice of Potential Environmental Violation - On April 20, 2021, Team Industrial Services, Inc. received Notices of Potential Violation from the U.S. Environmental Protection Agency (“EPA”) alleging noncompliance with various waste determination, reporting, training, and planning obligations under the Resource Conservation and Recovery Act at seven of our facilities located in Texas and Louisiana. While the specifics of the EPA’s allegations and proposed penalties have not been provided to us with respect to six of the seven facilities, we understand the allegations largely relate to spent film developing solutions generated through our mobile radiographic inspection services and that the claims relate to the characterization of those wastes and related reporting, training, and planning. We are unable at this time to estimate any ultimate monetary penalties associated with these very preliminary allegations. We are subject to various lawsuits, claims and proceedings encountered in the normal conduct of business. We cannot predict with certainty the ultimate resolution of lawsuits, investigation and claims asserted against us. While our insurance coverage might not be available or adequate to cover these claims, we do not believe that any uninsured losses that might arise from these lawsuits and proceedings will 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. |
SEGMENT AND GEOGRAPHIC DISCLOSU
SEGMENT AND GEOGRAPHIC DISCLOSURES | 3 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
SEGMENT AND GEOGRAPHIC DISCLOSURES | SEGMENT AND GEOGRAPHIC 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: IHT, MS and Quest Integrity. Segment data for our three operating segments are as follows (in thousands): Three Months Ended 2021 2020 (unaudited) (unaudited) Revenues: IHT $ 91,139 $ 107,881 MS 87,396 104,519 Quest Integrity 16,083 24,439 Total $ 194,618 $ 236,839 Three Months Ended 2021 2020 (unaudited) (unaudited) Operating income (loss): IHT 1 $ 364 $ (192,150) MS 115 1,022 Quest Integrity (252) 6,106 Corporate and shared support services (24,527) (27,910) Total $ (24,300) $ (212,932) _________________ 1 Includes goodwill impairment charge for IHT as discussed in Note 1 that impacted operating income (loss) for the three months ended March 31, 2020. Three Months Ended 2021 2020 (unaudited) (unaudited) Capital expenditures 1 : IHT $ 2,714 $ 1,041 MS 1,152 3,617 Quest Integrity 406 971 Corporate and shared support services 125 1,075 Total $ 4,397 $ 6,704 _____________ 1 Totals may vary from amounts presented in the condensed consolidated statements of cash flows due to the timing of cash payments. Three Months Ended 2021 2020 (unaudited) (unaudited) Depreciation and amortization: IHT $ 3,470 $ 3,983 MS 5,439 5,431 Quest Integrity 712 886 Corporate and shared support services 1,338 1,408 Total $ 10,959 $ 11,708 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 months ended March 31, 2021 and 2020 is as follows (in thousands): Three Months Ended 2021 2020 (unaudited) (unaudited) Total Revenues: 1 United States $ 141,832 $ 173,510 Canada 16,494 21,209 Europe 25,711 28,546 Other foreign countries 10,581 13,574 Total $ 194,618 $ 236,839 ___________ 1 Revenues attributable to individual countries/geographic areas are based on the country of domicile of the legal entity that performs the work. |
RESTRUCTURING AND OTHER RELATED
RESTRUCTURING AND OTHER RELATED CHARGES | 3 Months Ended |
Mar. 31, 2021 | |
Restructuring and Related Activities [Abstract] | |
RESTRUCTURING AND OTHER RELATED CHARGES | RESTRUCTURING AND OTHER RELATED CHARGES Our restructuring and other related charges (credits), net are summarized by segment as follows (in thousands): Three Months Ended 2021 2020 (unaudited) (unaudited) Operating Group Reorganization Severance and related costs IHT $ 283 $ — MS 139 — Quest Integrity 233 — Corporate and shared support services 1,222 — Grand Total $ 1,877 $ — Operating Group Reorganization In January 2021, we announced a new strategic organizational structure to better position ourselves for the recovery, continue sector diversification, and enhance client value (the “Operating Group Reorganization”). In connection with the Operating Group Reorganization, we announced certain executive leadership changes and the appointment of experienced new talent to our leadership team. For the three months ended March 31, 2021, we incurred severance charges of $1.9 million, which represent all costs cumulatively incurred to date as a result of the Operating Group Reorganization. We expect expenses related to the Operating Group Reorganization to continue through the end of 2021. A rollforward of our accrued severance liability associated with this reorganization is presented below (in thousands): Three Months Ended (unaudited) Balance, beginning of period $ — Charges 1,877 Payments (353) Balance, end of period $ 1,524 For the three months ended March 31, 2021, we also incurred professional fees of $0.8 million associated with the Operating Group Reorganization. OneTEAM Program Beginning in 2017, we undertook a project (“OneTEAM”) to assess all aspects of our business for improvement and cost saving opportunities. We did not incur any severance costs under OneTEAM during the three months ended March 31, 2021. During the three months ended March 31, 2020, we incurred $0.2 million in severance charges associated with OneTEAM. We have incurred $11.8 million of OneTEAM severance charges cumulatively to date, and do not expect any further costs under this program. As of March 31, 2021, we had no remaining severance liability outstanding under OneTEAM. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis for presentation | Basis for presentation. In the opinion of management, these unaudited interim condensed consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of results for such periods. The results of operations for any interim period are not necessarily indicative of results for the full year. Certain disclosures have been condensed or omitted from the interim financial statements included in this report. These financial statements should be read in conjunction with the consolidated financial statements and notes contained in our Annual Report on Form 10-K for the year ended December 31, 2020 as filed with the Securities and Exchange Commission (“the 2020 Form 10-K”). |
Use of estimates | Use of estimates. Our accounting policies conform to Generally Accepted Accounting Principles in the United States (“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 credit losses, (5) estimating the useful lives of our assets, (6) assessing future tax exposure and the realization of tax assets, (7) selecting assumptions used in the measurement of costs and liabilities associated with defined benefit pension plans, (8) assessments of fair value and (9) managing our foreign currency risk in foreign operations. |
Fair value of financial instruments | Fair value of financial instruments . As defined in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820 Fair Value Measurements and Disclosur e (“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. |
Earnings (loss) per share | Earnings (loss) per share. Basic earnings (loss) per share (“EPS”) is computed by dividing net income (loss) by the weighted-average number of shares of common stock outstanding during the period. Diluted EPS is computed by dividing net income (loss) by the sum of the weighted-average number of shares of common stock outstanding during the period and, if dilutive, the assumed exercise or conversion of (1) outstanding share-based compensation, (2) our Notes and (3) outstanding Warrants (defined in Note 9). The impact of share-based compensation, the Notes and warrants are calculated using the treasury stock method. Our intent is to settle the principal amount of the Notes in cash upon conversion. If the conversion value exceeds the principal amount, we may elect to deliver shares of our common stock with respect to the remainder of our conversion obligation in excess of the aggregate principal amount. |
Newly Adopted Accounting Principles | Newly Adopted Accounting Principles ASU No. 2019-12. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740) Simplifying the Accounting for Income Taxes , that simplifies the accounting for income taxes by eliminating some exceptions to the general approach in ASC 740, Income Taxes as well as clarifies aspects of existing guidance to promote more consistent application. The adoption of ASU No. 2019-12 had no impact on the current quarter. Accounting Principles Not Yet Adopted ASU No. 2020-04. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting . The guidance in ASU 2020-04 and ASU 2021-01, Reference Rate Reform (Topic 848): Scope , which was issued in January 2021, provides optional expedients and exceptions for applying GAAP to contract modifications and hedging relationships, subject to meeting certain criteria that reference LIBOR or another rate that is expected to be discontinued. The amendments in ASU 2020-04 are effective for all entities as of March 12, 2020 through December 31, 2022. While we are currently determining whether we will elect the optional expedients, we do not expect our adoption of these ASU’s to have a significant impact on our consolidated financial position, results of operations, and cash flows. ASU No. 2020-06. In August 2020, the FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity , which simplifies the accounting for convertible instruments by eliminating certain separation models and will generally be reported as a single liability at its amortized cost. In addition, ASU 2020-06 eliminates the treasury stock method to calculate diluted EPS for convertible instruments and requires the use of the if-converted method. We expect to adopt ASU 2020-06 beginning January 1, 2022, at which time we would utilize the if-converted method, which would require us to assume the Notes would be settled entirely in shares of common stock for purposes of calculating diluted EPS, if the effect would be dilutive. We are still evaluating the other impacts this ASU may have on our financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Amounts used in basic and diluted earnings (loss) per share | Amounts used in basic and diluted earnings per share, for the three months ended March 31, 2021 and 2020, are as follows (in thousands): Three Months Ended 2021 2020 (unaudited) (unaudited) Weighted-average number of basic shares outstanding 30,878 30,540 Stock options, stock units and performance awards — — Notes — — Warrants — — Total shares and dilutive securities 30,878 30,540 |
Schedule of rollforward goodwill | The following table presents a rollforward of goodwill for the three months ended March 31, 2021 as follows (in thousands): IHT MS Quest Integrity Consolidated Goodwill, Gross Accumulated Impairment Goodwill, Net Goodwill, Gross Accumulated Impairment Goodwill, Net Goodwill, Gross Accumulated Impairment Goodwill, Net Goodwill, Gross Accumulated Impairment Goodwill, Net Balance at December 31, 2020 $ 212,928 $ (212,928) $ — $ 110,721 $ (54,101) $ 56,620 $ 34,731 $ — $ 34,731 $ 358,380 $ (267,029) $ 91,351 FX Adjustments — — — (559) — (559) (399) — (399) (958) — (958) Balance at March 31, 2021 $ 212,928 $ (212,928) $ — $ 110,162 $ (54,101) $ 56,061 $ 34,332 $ — $ 34,332 $ 357,422 $ (267,029) $ 90,393 |
REVENUE (Tables)
REVENUE (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | A disaggregation of our revenue from contracts with customers by geographic region, by reportable operating segment and by service type is presented below (in thousands): Three Months Ended March 31, 2021 Three Months Ended March 31, 2020 (unaudited) (unaudited) United States and Canada Other Countries Total United States and Canada Other Countries Total Revenue: IHT $ 89,225 $ 1,914 $ 91,139 $ 105,304 $ 2,577 $ 107,881 MS 60,046 27,350 87,396 76,582 27,937 104,519 Quest Integrity 9,055 7,028 16,083 12,833 11,606 24,439 Total $ 158,326 $ 36,292 $ 194,618 $ 194,719 $ 42,120 $ 236,839 Three Months Ended March 31, 2021 (unaudited) Non-Destructive Evaluation and Testing Services Repair and Maintenance Services Heat Treating Other Total Revenue: IHT $ 71,530 $ 81 $ 13,455 $ 6,073 $ 91,139 MS — 85,976 689 731 87,396 Quest Integrity 16,083 — — — 16,083 Total $ 87,613 $ 86,057 $ 14,144 $ 6,804 $ 194,618 Three Months Ended March 31, 2020 (unaudited) Non-Destructive Evaluation and Testing Services Repair and Maintenance Services Heat Treating Other Total Revenue: IHT $ 86,407 $ 101 $ 14,146 $ 7,227 $ 107,881 MS — 102,615 479 1,425 104,519 Quest Integrity 24,439 — — — 24,439 Total $ 110,846 $ 102,716 $ 14,625 $ 8,652 $ 236,839 |
Contract with Customer, Asset and Liability | Trade accounts receivable, contract assets and contract liabilities consisted of the following (in thousands): March 31, 2021 December 31, 2020 (unaudited) Trade accounts receivable, net 1 $ 194,214 $ 194,066 Contract assets 2 $ 4,859 $ 5,242 Contract liabilities 3 $ 961 $ 930 _________________ 1 Includes billed and unbilled amounts, net of allowance for credit losses. See Note 3 for details. 2 Included in the “Prepaid expenses and other current assets” line on the condensed consolidated balance sheets. 3 Included in the “Other accrued liabilities” line of the condensed consolidated balance sheets. |
RECEIVABLES (Tables)
RECEIVABLES (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Receivables [Abstract] | |
Summary of Accounts Receivable | Accounts receivable consisted of the following (in thousands): March 31, 2021 December 31, 2020 (unaudited) Trade accounts receivable $ 142,841 $ 157,513 Unbilled receivables 60,404 46,471 Allowance for credit losses (9,031) (9,918) Total $ 194,214 $ 194,066 |
Allowance for Credit Loss | The following table shows a rollforward of the allowance for credit losses: March 31, 2021 March 31, 2020 (unaudited) (unaudited) Balance at beginning of period 9,918 $ 9,990 Adoption of account pronouncement ASC 326 1 — 1,410 Provision for expected credit losses 352 (45) Write-offs (1,212) (1,441) Foreign exchange effects (27) (240) Balance at end of period 9,031 9,674 _________________ 1 Due to the initial adoption of ASC 326 as of January 1, 2020. |
INVENTORY (Tables)
INVENTORY (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Inventory Disclosure [Abstract] | |
Summary of Inventory | Inventory consisted of the following (in thousands): March 31, 2021 December 31, 2020 (unaudited) Raw materials $ 7,692 $ 7,395 Work in progress 2,967 2,890 Finished goods 25,942 26,569 Total $ 36,601 $ 36,854 |
PROPERTY, PLANT AND EQUIPMENT (
PROPERTY, PLANT AND EQUIPMENT (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property, Plant and Equipment | Property, plant and equipment consisted of the following (in thousands): March 31, 2021 December 31, 2020 (unaudited) Land $ 5,784 $ 5,805 Buildings and leasehold improvements 57,668 57,632 Machinery and equipment 304,073 302,886 Furniture and fixtures 11,753 11,450 Capitalized ERP system development costs 45,917 45,917 Computers and computer software 20,512 20,508 Automobiles 4,367 4,518 Construction in progress 9,376 8,329 Total 459,450 457,045 Accumulated depreciation and amortization (292,926) (286,736) Property, plant and equipment, net $ 166,524 $ 170,309 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Intangible Assets | Intangible assets consisted of the following (in thousands): March 31, 2021 December 31, 2020 (unaudited) Gross Accumulated Net Gross Accumulated Net Customer relationships $ 175,289 $ (79,584) $ 95,705 $ 175,418 $ (76,541) $ 98,877 Non-compete agreements 5,541 (5,541) — 5,569 (5,569) — Trade names 24,797 (21,893) 2,904 24,870 (21,794) 3,076 Technology 7,858 (6,727) 1,131 7,879 (6,691) 1,188 Licenses 855 (731) 124 864 (723) 141 Total $ 214,340 $ (114,476) $ 99,864 $ 214,600 $ (111,318) $ 103,282 |
OTHER ACCRUED LIABILITIES (Tabl
OTHER ACCRUED LIABILITIES (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Payables and Accruals [Abstract] | |
Summary of Other Accrued Liabilities | Other accrued liabilities consisted of the following (in thousands): March 31, 2021 December 31, 2020 (unaudited) Payroll and other compensation expenses $ 43,278 $ 42,668 Legal and professional accruals 19,437 4,135 Insurance accruals 7,247 6,659 Property, sales and other non-income related taxes 6,074 8,722 Accrued commission 661 1,048 Accrued interest 1,590 2,437 Other 7,321 7,475 Total $ 85,608 $ 73,144 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt | Long-term debt consisted of the following (in thousands): March 31, 2021 December 31, 2020 (unaudited) ABL Facility $ 28,000 $ 9,000 Term Loan 1 214,682 213,809 Total 242,682 222,809 Convertible debt 1 85,300 84,534 Finance lease obligations 5,093 5,153 Total debt and finance lease obligations 333,075 312,496 Current portion of long-term debt and finance lease obligations (352) (337) Total long-term debt and finance lease obligations, less current portion $ 332,723 $ 312,159 _________________ |
Convertible Debt | As of March 31, 2021 and December 31, 2020, the Notes were recorded in our condensed consolidated balance sheets as follows (in thousands): March 31, 2021 December 31, 2020 (unaudited) Liability component: Principal $ 93,130 $ 93,130 Unamortized issuance costs (1,312) (1,440) Unamortized discount (6,518) (7,156) Net carrying amount of the liability component 1 $ 85,300 $ 84,534 Equity component: Carrying amount of the equity component, net of issuance costs 2 $ 7,969 $ 7,969 Carrying amount of the equity component, net of issuance costs $ 37,276 $ 37,276 _________________ 1 Included in the “Long-term debt” line of the condensed consolidated balance sheets. 2 Relates to the portion of the Notes accounted for under ASC 470-20 (defined below) and is included in the “Additional paid-in capital” line of the condensed consolidated balance sheets. The following table sets forth interest expense information related to the Notes (dollars in thousands): Three Months Ended 2021 2020 (unaudited) (unaudited) Coupon interest $ 1,164 $ 2,875 Amortization of debt discount and issuance costs 766 1,707 Total interest expense on Notes $ 1,930 $ 4,582 Effective interest rate 9.12 % 9.12 % |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Leases [Abstract] | |
Lease, Cost | The components of lease expense are as follows (in thousands): Three Months Ended March 31, 2021 2020 (unaudited) (unaudited) Operating lease costs $ 7,239 $ 7,518 Variable lease costs 1,276 1,493 Finance lease costs: Amortization of right-of-use assets 117 108 Interest on lease liabilities 78 81 Total lease cost $ 8,710 $ 9,200 |
Schedule of Other Information Related to Leases | Other information related to leases are as follows (in thousands): Three Months Ended March 31, 2021 2020 Supplemental cash flow information: (unaudited) (unaudited) Cash paid for amounts included in measurement of lease liabilities Operating cash flows from operating leases 5,356 5,865 Operating cash flows from finance leases 80 83 Financing cash flows from finance leases 78 65 Right-of-use assets obtained in exchange for lease obligations Operating leases 8,172 1,092 Finance leases 22 — |
Amounts Recognized in Balance Sheet for Leases | Amounts recognized in the condensed consolidated balance sheet are as follows (in thousands): March 31, 2021 December 31, 2020 Operating Leases: (unaudited) Operating lease right-of-use assets $ 68,183 $ 63,869 Current portion of operating lease obligations 17,044 17,375 Operating lease obligations (non-current) 56,701 52,207 Weighted average remaining lease term 6.0 years 6.0 years Weighted average discount rate 6.8 % 6.7 % March 31, 2021 December 31, 2020 Finance Leases: (unaudited) Property, plant and equipment, net $ 4,679 $ 4,779 Current portion of long-term debt and finance lease obligations 352 337 Long-term debt and finance lease obligations 4,741 4,816 Weighted average remaining lease term 12.0 years 12.0 years Weighted average discount rate 6.2 % 6.2 % |
Schedule of Finance Lease Liability | As of March 31, 2021, future minimum lease payments under non-cancellable leases (excluding short-term leases) are as follows (in thousands): Operating Leases Finance Lease (unaudited) (unaudited) 2021 (Remainder of the year) 26,571 629 2022 16,553 629 2023 13,074 564 2024 10,718 547 2025 8,358 556 Thereafter 22,780 4,553 Total future minimum lease payments 98,054 7,478 Less: Interest (24,309) (2,385) Present value of lease liabilities $ 73,745 $ 5,093 |
Schedule of Operating Lease Liability | As of March 31, 2021, future minimum lease payments under non-cancellable leases (excluding short-term leases) are as follows (in thousands): Operating Leases Finance Lease (unaudited) (unaudited) 2021 (Remainder of the year) 26,571 629 2022 16,553 629 2023 13,074 564 2024 10,718 547 2025 8,358 556 Thereafter 22,780 4,553 Total future minimum lease payments 98,054 7,478 Less: Interest (24,309) (2,385) Present value of lease liabilities $ 73,745 $ 5,093 |
EMPLOYEE BENEFIT PLANS (Tables)
EMPLOYEE BENEFIT PLANS (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Retirement Benefits [Abstract] | |
Schedule of Net Periodic Pension Cost (Credit) | Net periodic pension credit includes the following components (in thousands): Three Months Ended March 31, 2021 2020 (unaudited) (unaudited) Interest cost $ 322 $ 441 Expected return on plan assets (503) (578) Amortization of prior service cost 9 8 Net periodic pension credit $ (173) $ (129) |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Summary of Transactions Involving Stock Units and Director Stock Grants | Transactions involving our stock units and director stock grants during the three months ended March 31, 2021 are summarized below: Three Months Ended (unaudited) No. of Stock Weighted (in thousands) Stock and stock units, beginning of period 854 $ 12.55 Changes during the period: Granted — $ — Vested and settled — $ — Forfeited and cancelled (10) $ 12.78 Stock and stock units, end of period 844 $ 12.54 |
Summary of Transactions Involving Performance Awards | Transactions involving our performance awards during the three months ended March 31, 2021 are summarized below: Three Months Ended (unaudited) Performance Units Subject to Market Conditions Performance Units Not Subject to Market Conditions No. of Stock Units 1 Weighted No. of Stock Units 1 Weighted (in thousands) (in thousands) Performance stock units, beginning of period 553 $ 13.69 273 $ 12.55 Changes during the period: Granted 110 $ 14.96 110 $ 11.69 Vested and settled (28) $ 25.24 — $ — Forfeited and cancelled (95) $ 23.14 (122) $ 17.49 Performance stock units, end of period 540 $ 11.71 261 $ 9.87 _________________ |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
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): Three Months Ended Three Months Ended (unaudited) (unaudited) Foreign Foreign Defined Benefit Pension Plans Tax Total Foreign Foreign Defined Benefit Pension Plans Tax Total Balance, beginning of period $ (23,045) $ 2,988 $ (8,021) $ 400 $ (27,678) $ (26,742) $ 4,186 $ (8,021) $ 387 $ (30,190) Other comprehensive income (loss) 217 — — 102 319 (9,741) 265 — (185) (9,661) Balance, end of period $ (22,828) $ 2,988 $ (8,021) $ 502 $ (27,359) $ (36,483) $ 4,451 $ (8,021) $ 202 $ (39,851) |
Related Tax Effects Allocated to Each Component of Other Comprehensive Income (Loss) | The following table represents the related tax effects allocated to each component of other comprehensive income (loss) (in thousands): Three Months Ended Three Months Ended (unaudited) (unaudited) Gross Tax Net Gross Tax Net Foreign currency translation adjustments $ 217 $ 102 $ 319 $ (9,741) $ (120) $ (9,861) Foreign currency hedge — — — 265 (65) 200 Total $ 217 $ 102 $ 319 $ (9,476) $ (185) $ (9,661) |
SEGMENT AND GEOGRAPHIC DISCLO_2
SEGMENT AND GEOGRAPHIC DISCLOSURES (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
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 2021 2020 (unaudited) (unaudited) Revenues: IHT $ 91,139 $ 107,881 MS 87,396 104,519 Quest Integrity 16,083 24,439 Total $ 194,618 $ 236,839 Three Months Ended 2021 2020 (unaudited) (unaudited) Operating income (loss): IHT 1 $ 364 $ (192,150) MS 115 1,022 Quest Integrity (252) 6,106 Corporate and shared support services (24,527) (27,910) Total $ (24,300) $ (212,932) _________________ 1 Includes goodwill impairment charge for IHT as discussed in Note 1 that impacted operating income (loss) for the three months ended March 31, 2020. Three Months Ended 2021 2020 (unaudited) (unaudited) Capital expenditures 1 : IHT $ 2,714 $ 1,041 MS 1,152 3,617 Quest Integrity 406 971 Corporate and shared support services 125 1,075 Total $ 4,397 $ 6,704 _____________ 1 Totals may vary from amounts presented in the condensed consolidated statements of cash flows due to the timing of cash payments. Three Months Ended 2021 2020 (unaudited) (unaudited) Depreciation and amortization: IHT $ 3,470 $ 3,983 MS 5,439 5,431 Quest Integrity 712 886 Corporate and shared support services 1,338 1,408 Total $ 10,959 $ 11,708 |
Geographic Breakdown of Revenues | A geographic breakdown of our revenues for the three months ended March 31, 2021 and 2020 is as follows (in thousands): Three Months Ended 2021 2020 (unaudited) (unaudited) Total Revenues: 1 United States $ 141,832 $ 173,510 Canada 16,494 21,209 Europe 25,711 28,546 Other foreign countries 10,581 13,574 Total $ 194,618 $ 236,839 ___________ 1 Revenues attributable to individual countries/geographic areas are based on the country of domicile of the legal entity that performs the work. |
RESTRUCTURING AND OTHER RELAT_2
RESTRUCTURING AND OTHER RELATED CHARGES (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Costs | Our restructuring and other related charges (credits), net are summarized by segment as follows (in thousands): Three Months Ended 2021 2020 (unaudited) (unaudited) Operating Group Reorganization Severance and related costs IHT $ 283 $ — MS 139 — Quest Integrity 233 — Corporate and shared support services 1,222 — Grand Total $ 1,877 $ — |
Schedule of Accrued Severance Liability | A rollforward of our accrued severance liability associated with this reorganization is presented below (in thousands): Three Months Ended (unaudited) Balance, beginning of period $ — Charges 1,877 Payments (353) Balance, end of period $ 1,524 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES - Additional Information (Details) | 3 Months Ended |
Mar. 31, 2021segment | |
Accounting Policies [Abstract] | |
Number of operating segments | 3 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES - Fair Value Measurements (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Convertible debt | Fair Value, Inputs, Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of our convertible senior notes | $ 92.9 | $ 91.9 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES - Goodwill Rollforward (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Goodwill [Roll Forward] | ||
Goodwill, Gross, beginning balance | $ 358,380 | |
Accumulated Impairment, beginning balance | (267,029) | |
Goodwill, Net, beginning balance | 91,351 | |
Goodwill, Foreign Currency Translation Gain (Loss) | (958) | |
Goodwill, Gross, ending balance | 357,422 | |
Accumulated Impairment, ending balance | (267,029) | |
Goodwill, Net, ending balance | 90,393 | |
Impairment loss | 0 | $ (191,788) |
IHT | ||
Goodwill [Roll Forward] | ||
Goodwill, Gross, beginning balance | 212,928 | |
Accumulated Impairment, beginning balance | (212,928) | |
Goodwill, Net, beginning balance | 0 | |
Goodwill, Foreign Currency Translation Gain (Loss) | 0 | |
Goodwill, Gross, ending balance | 212,928 | |
Accumulated Impairment, ending balance | (212,928) | |
Goodwill, Net, ending balance | 0 | |
Impairment loss | (191,800) | |
MS | ||
Goodwill [Roll Forward] | ||
Goodwill, Gross, beginning balance | 110,721 | |
Accumulated Impairment, beginning balance | (54,101) | |
Goodwill, Net, beginning balance | 56,620 | |
Goodwill, Foreign Currency Translation Gain (Loss) | (559) | |
Goodwill, Gross, ending balance | 110,162 | |
Accumulated Impairment, ending balance | (54,101) | |
Goodwill, Net, ending balance | 56,061 | |
Quest Integrity | ||
Goodwill [Roll Forward] | ||
Goodwill, Gross, beginning balance | 34,731 | |
Accumulated Impairment, beginning balance | 0 | |
Goodwill, Net, beginning balance | 34,731 | |
Goodwill, Foreign Currency Translation Gain (Loss) | (399) | |
Goodwill, Gross, ending balance | 34,332 | |
Accumulated Impairment, ending balance | 0 | |
Goodwill, Net, ending balance | $ 34,332 |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES - Amounts Used In Basic and Diluted Earnings Per Share (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Accounting Policies [Abstract] | ||
Weighted-average number of basic shares outstanding (in shares) | 30,878 | 30,540 |
Stock options, stock units and performance awards (in shares) | 0 | 0 |
Convertible Senior Notes (in shares) | 0 | 0 |
Warrants (in shares) | 0 | 0 |
Total shares and dilutive securities (in shares) | 30,878 | 30,540 |
REVENUE - Disaggregation of Rev
REVENUE - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 194,618 | $ 236,839 |
Non-Destructive Evaluation and Testing Services | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 87,613 | 110,846 |
Repair and Maintenance Services | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 86,057 | 102,716 |
Heat Treating | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 14,144 | 14,625 |
Other | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 6,804 | 8,652 |
United States and Canada | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 158,326 | 194,719 |
Other Countries | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 36,292 | 42,120 |
IHT | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 91,139 | 107,881 |
IHT | Non-Destructive Evaluation and Testing Services | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 71,530 | 86,407 |
IHT | Repair and Maintenance Services | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 81 | 101 |
IHT | Heat Treating | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 13,455 | 14,146 |
IHT | Other | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 6,073 | 7,227 |
IHT | United States and Canada | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 89,225 | 105,304 |
IHT | Other Countries | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 1,914 | 2,577 |
MS | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 87,396 | 104,519 |
MS | Non-Destructive Evaluation and Testing Services | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 0 | 0 |
MS | Repair and Maintenance Services | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 85,976 | 102,615 |
MS | Heat Treating | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 689 | 479 |
MS | Other | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 731 | 1,425 |
MS | United States and Canada | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 60,046 | 76,582 |
MS | Other Countries | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 27,350 | 27,937 |
Quest Integrity | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 16,083 | 24,439 |
Quest Integrity | Non-Destructive Evaluation and Testing Services | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 16,083 | 24,439 |
Quest Integrity | Repair and Maintenance Services | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 0 | 0 |
Quest Integrity | Heat Treating | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 0 | 0 |
Quest Integrity | Other | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 0 | 0 |
Quest Integrity | United States and Canada | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 9,055 | 12,833 |
Quest Integrity | Other Countries | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 7,028 | $ 11,606 |
REVENUE - Contract Balances (De
REVENUE - Contract Balances (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2021 | Dec. 31, 2020 | |||
Revenue from Contract with Customer [Abstract] | ||||
Trade accounts receivable, net | [1] | $ 194,214 | $ 194,066 | |
Contract assets | 4,859 | 5,242 | [2] | |
Contract liabilities | [3] | 961 | $ 930 | |
Contract asset, increase from beginning of period | $ 400 | |||
[1] | Includes billed and unbilled amounts, net of allowance for credit losses. See Note 3 for details. | |||
[2] | Included in the “Prepaid expenses and other current assets” line on the condensed consolidated balance sheets. | |||
[3] | Included in the “Other accrued liabilities” line of the condensed consolidated balance sheets. |
RECEIVABLES (Details)
RECEIVABLES (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 | |
Receivables [Abstract] | |||
Trade accounts receivable | $ 142,841 | $ 157,513 | |
Unbilled receivables | 60,404 | 46,471 | |
Allowance for credit losses | (9,031) | (9,918) | |
Total | [1] | $ 194,214 | $ 194,066 |
[1] | Includes billed and unbilled amounts, net of allowance for credit losses. See Note 3 for details. |
RECEIVABLES - Allowance for Cre
RECEIVABLES - Allowance for Credit Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | ||||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | ||
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |||||
Balance at beginning of period | $ 9,918 | [1] | $ 9,990 | ||
Adoption of account pronouncement ASC 326 | 9,031 | $ 9,918 | |||
Provision for expected credit losses | 352 | (45) | |||
Write-offs | (1,212) | (1,441) | |||
Foreign exchange effects | (27) | (240) | |||
Balance at end of period | $ 9,031 | $ 9,674 | |||
Revision of Prior Period, Accounting Standards Update, Adjustment | Accounting Standards Update 2016-13 | |||||
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |||||
Adoption of account pronouncement ASC 326 | $ 0 | $ 1,410 | |||
[1] | Due to the initial adoption of ASC 326 as of January 1, 2020. |
INVENTORY (Details)
INVENTORY (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 7,692 | $ 7,395 |
Work in progress | 2,967 | 2,890 |
Finished goods | 25,942 | 26,569 |
Total | $ 36,601 | $ 36,854 |
PROPERTY, PLANT AND EQUIPMENT -
PROPERTY, PLANT AND EQUIPMENT - (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Property, Plant and Equipment [Line Items] | |||
Total | $ 459,450 | $ 457,045 | |
Accumulated depreciation and amortization | (292,926) | (286,736) | |
Property, plant and equipment, net | 166,524 | 170,309 | |
Assets under finance leases | 4,700 | 4,800 | |
Accumulated amortization for assets under finance leases | 1,000 | 900 | |
Depreciation expense | 7,500 | $ 8,100 | |
Land | |||
Property, Plant and Equipment [Line Items] | |||
Total | 5,784 | 5,805 | |
Buildings and leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Total | 57,668 | 57,632 | |
Machinery and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Total | 304,073 | 302,886 | |
Furniture and fixtures | |||
Property, Plant and Equipment [Line Items] | |||
Total | 11,753 | 11,450 | |
Capitalized ERP system development costs | |||
Property, Plant and Equipment [Line Items] | |||
Total | 45,917 | 45,917 | |
Computers and computer software | |||
Property, Plant and Equipment [Line Items] | |||
Total | 20,512 | 20,508 | |
Automobiles | |||
Property, Plant and Equipment [Line Items] | |||
Total | 4,367 | 4,518 | |
Construction in progress | |||
Property, Plant and Equipment [Line Items] | |||
Total | $ 9,376 | $ 8,329 |
INTANGIBLE ASSETS - Summary of
INTANGIBLE ASSETS - Summary of Intangible Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 214,340 | $ 214,600 |
Accumulated Amortization | (114,476) | (111,318) |
Net Carrying Amount | 99,864 | 103,282 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 175,289 | 175,418 |
Accumulated Amortization | (79,584) | (76,541) |
Net Carrying Amount | 95,705 | 98,877 |
Non-compete agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 5,541 | 5,569 |
Accumulated Amortization | (5,541) | (5,569) |
Net Carrying Amount | 0 | 0 |
Trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 24,797 | 24,870 |
Accumulated Amortization | (21,893) | (21,794) |
Net Carrying Amount | 2,904 | 3,076 |
Technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 7,858 | 7,879 |
Accumulated Amortization | (6,727) | (6,691) |
Net Carrying Amount | 1,131 | 1,188 |
Licenses | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 855 | 864 |
Accumulated Amortization | (731) | (723) |
Net Carrying Amount | $ 124 | $ 141 |
INTANGIBLE ASSETS - Additional
INTANGIBLE ASSETS - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense of intangible assets | $ 3.4 | $ 3.6 |
Finite-lived intangible asset, expected amortization, remainder of 2021 | 10 | |
Finite-lived intangible asset, expected amortization, 2022 | 13 | |
Finite-lived intangible asset, expected amortization, 2023 | 13 | |
Finite-lived intangible asset, expected amortization, 2024 | 13 | |
Finite-lived intangible asset, expected amortization, 2025 | $ 13 |
OTHER ACCRUED LIABILITIES (Deta
OTHER ACCRUED LIABILITIES (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Payables and Accruals [Abstract] | ||
Payroll and other compensation expenses | $ 43,278 | $ 42,668 |
Legal and professional accruals | 19,437 | 4,135 |
Insurance accruals | 7,247 | 6,659 |
Property, sales and other non-income related taxes | 6,074 | 8,722 |
Accrued commission | 661 | 1,048 |
Accrued interest | 1,590 | 2,437 |
Other | 7,321 | 7,475 |
Total | $ 85,608 | $ 73,144 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Provision (benefit) for income taxes | $ (355) | $ (20,453) |
Effective tax rate (benefit) provision | 1.00% | (9.30%) |
LONG-TERM DEBT - Long-Term Debt
LONG-TERM DEBT - Long-Term Debt Balances (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | ||
Total debt and finance lease obligations | $ 333,075 | $ 312,496 |
Finance lease obligations | 5,093 | 5,153 |
Current portion of long-term debt and finance lease obligations | (352) | (337) |
Total long-term debt and finance lease obligations, less current portion | 332,723 | 312,159 |
Secured Debt | ||
Debt Instrument [Line Items] | ||
Total debt and finance lease obligations | 242,682 | 222,809 |
Secured Debt | Term Loan1 | ||
Debt Instrument [Line Items] | ||
Total debt and finance lease obligations | 214,682 | 213,809 |
Convertible debt | ||
Debt Instrument [Line Items] | ||
Total debt and finance lease obligations | 85,300 | 84,534 |
Revolving Credit Facility | ABL Facility | ||
Debt Instrument [Line Items] | ||
Total debt and finance lease obligations | $ 28,000 | $ 9,000 |
LONG-TERM DEBT - Credit Facilit
LONG-TERM DEBT - Credit Facility Narrative (Details) $ in Thousands | Dec. 18, 2020USD ($) | Mar. 31, 2021USD ($) | Dec. 31, 2020USD ($) |
Debt Instrument [Line Items] | |||
Cash and cash equivalents | $ 22,344 | $ 24,586 | |
ABL Facility | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | $ 46,700 | ||
Term Loan1 | |||
Debt Instrument [Line Items] | |||
Line of Credit Facility, Accordion Feature, Increase Limit | $ 100,000 | ||
Principal amount, long-term debt issued | $ 250,000 | ||
Debt Instrument, Interest Rate, Original Issue Discount | 0.03 | ||
Proceeds from Issuance of Debt | $ 242,500 | ||
Interest rate on convertible debt | 11.95% | ||
Standby Letters of Credit | |||
Debt Instrument [Line Items] | |||
Outstanding letters of credit | $ 19,600 | $ 19,500 | |
Letter of Credit | Line of Credit | ABL Facility | |||
Debt Instrument [Line Items] | |||
Borrowing capacity | 150,000 | ||
Line of Credit Facility, Sublimit For Issuance | 50,000 | ||
Line of Credit Facility, Sublimit for Swingline Borrowings | 35,000 | ||
Line of Credit Facility, Accordion Feature, Increase Limit | $ 50,000 |
LONG-TERM DEBT - Warrant (Detai
LONG-TERM DEBT - Warrant (Details) | Dec. 18, 2020$ / sharesshares |
Debt Disclosure [Abstract] | |
Class of warrant or right, outstanding (in shares) | shares | 3,582,949 |
Class of warrant or right, exercise price (in dollars per share) | $ / shares | $ 7.75 |
LONG-TERM DEBT - Convertible De
LONG-TERM DEBT - Convertible Debt Narrative (Details) | 3 Months Ended | ||
Mar. 31, 2021USD ($)sharesnumberOfDay$ / shares | Dec. 31, 2020USD ($) | Jul. 31, 2017USD ($) | |
Debt Instrument [Line Items] | |||
Debt instrument, convertible, threshold percentage of stock price trigger for redemption | 130.00% | ||
Debt instrument, convertible, threshold trading days for redemption | 20 | ||
Threshold consecutive trading days for redemption | 30 days | ||
Remaining amortization period of convertible debt | 28 months | ||
Convertible debt | |||
Debt Instrument [Line Items] | |||
Principal amount, long-term debt issued | $ | $ 93,100,000 | $ 230,000,000 | |
Interest rate on convertible debt | 5.00% | 5.00% | |
Repurchased face amount | $ | $ 136,900,000 | ||
Initial conversion rate, convertible debt | 46.0829 | ||
Initial conversion price, convertible debt (in dollars per share) | $ / shares | $ 21.70 | ||
Threshold trading days | 20 | ||
Threshold consecutive trading days | 30 | ||
Threshold percentage of stock price trigger | 130.00% | ||
Number of business days after the specified trading price criteria met that notes may be converted | 5 | ||
Consecutive trading days, trading price criteria | 5 days | ||
Convertible debt, threshold percentage, product of common stock price and conversion price | 98.00% | ||
Number of shares into which debt is convertible | shares | 4,291,705 | ||
Redemption price, percentage (equal to) | 100.00% |
LONG-TERM DEBT - Detail of Conv
LONG-TERM DEBT - Detail of Convertible Debt Carrying Amount (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 | |
Accounting Standards Update 2020-06 | Embedded Derivative Financial Instruments | |||
Debt Instrument [Line Items] | |||
Carrying amount of the equity component, net of issuance costs | [1] | $ 7,969 | $ 7,969 |
Accounting Standards Update 2016-06 | Embedded Derivative Financial Instruments | |||
Debt Instrument [Line Items] | |||
Carrying amount of the equity component, net of issuance costs | 37,276 | 37,276 | |
Convertible debt | |||
Debt Instrument [Line Items] | |||
Principal | 93,130 | 93,130 | |
Unamortized issuance costs | (1,312) | (1,440) | |
Unamortized discount | (6,518) | (7,156) | |
Net carrying amount of the liability component | [2] | $ 85,300 | $ 84,534 |
[1] | Relates to the portion of the Notes accounted for under ASC 470-20 (defined below) and is included in the “Additional paid-in capital” line of the condensed consolidated balance sheets. | ||
[2] | Included in the “Long-term debt” line of the condensed consolidated balance sheets. |
LONG-TERM DEBT - Components of
LONG-TERM DEBT - Components of Convertible Debt Interest Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Debt Instrument [Line Items] | ||
Amortization of debt discount and issuance costs | $ 2,040 | $ 2,055 |
Total interest expense on Notes | 9,396 | 6,776 |
Convertible debt | ||
Debt Instrument [Line Items] | ||
Coupon interest | 1,164 | 2,875 |
Amortization of debt discount and issuance costs | 766 | 1,707 |
Total interest expense on Notes | $ 1,930 | $ 4,582 |
Effective interest rate | 9.12% | 9.12% |
LEASES - Additional Information
LEASES - Additional Information (Details) | 3 Months Ended |
Mar. 31, 2021 | |
Operating Leased Assets [Line Items] | |
Options to extend leases (up to) | 10 years |
Options to terminate leases | 1 year |
Minimum | |
Operating Leased Assets [Line Items] | |
Operating and finance leases, remaining lease term | 1 year |
Maximum | |
Operating Leased Assets [Line Items] | |
Operating and finance leases, remaining lease term | 15 years |
LEASES - Components of Lease Ex
LEASES - Components of Lease Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Leases [Abstract] | ||
Operating lease costs | $ 7,239 | $ 7,518 |
Variable lease costs | 1,276 | 1,493 |
Finance lease costs: | ||
Amortization of right-of-use assets | 117 | 108 |
Interest on lease liabilities | 78 | 81 |
Total lease cost | $ 8,710 | $ 9,200 |
LEASES - Other Information Rela
LEASES - Other Information Related to Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Cash paid for amounts included in measurement of lease liabilities | ||
Operating cash flows from operating leases | $ 5,356 | $ 5,865 |
Operating cash flows from finance leases | 80 | 83 |
Financing cash flows from finance leases | 78 | 65 |
Right-of-use assets obtained in exchange for lease obligations | ||
Operating leases | 8,172 | 1,092 |
Finance leases | $ 22 | $ 0 |
LEASES - Amounts Recognized in
LEASES - Amounts Recognized in the Balance Sheet for Leases (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Operating Leases: | ||
Operating lease right-of-use assets | $ 68,183 | $ 63,869 |
Current portion of operating lease obligations | 17,044 | 17,375 |
Operating lease obligations (non-current) | $ 56,701 | $ 52,207 |
Weighted average remaining lease term, operating leases | 6 years | 6 years |
Weighted average discount rate, operating leases | 6.80% | 6.70% |
Finance Leases: | ||
Property, plant and equipment, net | $ 4,679 | $ 4,779 |
Current portion of long-term debt and finance lease obligations | 352 | 337 |
Long-term debt and finance lease obligations | $ 4,741 | $ 4,816 |
Weighted average remaining lease term | 12 years | 12 years |
Weighted average discount rate | 6.20% | 6.20% |
LEASES - Operating and Finance
LEASES - Operating and Finance Leases - Future Minimum Lease Payments (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | ||
2021 (Remainder of the year) | $ 26,571 | |
2022 | 16,553 | |
2023 | 13,074 | |
2024 | 10,718 | |
2025 | 8,358 | |
Thereafter | 22,780 | |
Total future minimum lease payments | 98,054 | |
Less: Interest | (24,309) | |
Present value of lease liabilities | 73,745 | |
Finance Lease, Liability, Payment, Due [Abstract] | ||
2021 (Remainder of the year) | 629 | |
2022 | 629 | |
2023 | 564 | |
2024 | 547 | |
2025 | 556 | |
Thereafter | 4,553 | |
Total future minimum lease payments | 7,478 | |
Less: Interest | (2,385) | |
Present value of lease liabilities | $ 5,093 | $ 5,153 |
EMPLOYEE BENEFIT PLANS - Net Pe
EMPLOYEE BENEFIT PLANS - Net Periodic Pension Cost (Credit) (Details) - U.K. Plan - Pension Plan - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Interest cost | $ 322 | $ 441 |
Expected return on plan assets | (503) | (578) |
Amortization of prior service cost | 9 | 8 |
Net periodic pension credit | $ (173) | $ (129) |
EMPLOYEE BENEFIT PLANS - Additi
EMPLOYEE BENEFIT PLANS - Additional Information (Details) - U.K. Plan - Pension Plan $ in Millions | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Defined Benefit Plan Disclosure [Line Items] | |
Weighted-average of expected returns on asset investment, percentage | 2.10% |
Expected contributions for current year | $ 4.1 |
Total contributions to date | $ 1 |
Equities | |
Defined Benefit Plan Disclosure [Line Items] | |
Weighted-average of expected returns on asset investment, percentage | 4.60% |
Debt Security | |
Defined Benefit Plan Disclosure [Line Items] | |
Weighted-average of expected returns on asset investment, percentage | 1.40% |
SHARE-BASED COMPENSATION - Addi
SHARE-BASED COMPENSATION - Additional Information (Details) $ in Millions | Mar. 15, 2020 | Mar. 31, 2021USD ($)numberOfPerformanceConditionshares | Mar. 31, 2020USD ($) |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Awards outstanding to officers, directors and key employees (in shares) | shares | 1,700,000 | ||
Total number of shares authorized to be issued under 2018 Equity Incentive Plan (up to) (in shares) | shares | 1,200,000 | ||
Share-based compensation | $ 2.3 | $ 1.5 | |
Unrecognized compensation expense related to share-based compensation | $ 12.5 | ||
Remaining weighted-average period | 2 years | ||
Shares issued net of shares for tax withholdings | shares | 19,048 | ||
Stock and stock units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation | $ 1.5 | 1.1 | |
Award vesting period | 4 years | ||
Long-term performance stock units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation | $ 0.8 | $ 0.4 | |
Performance period | 2 years | ||
Award vesting period | 2 years | ||
Share-based compensation award, number of performance conditions | numberOfPerformanceCondition | 2 | ||
Long-term performance stock units | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Possible payouts | 0.00% | ||
Long-term performance stock units | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Possible payouts | 200.00% | ||
2019 | Long-term performance stock units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vested award performance target level, percentage | 25.00% | ||
Award vesting rights, performance metric, percentage | 0.00% |
SHARE-BASED COMPENSATION - Summ
SHARE-BASED COMPENSATION - Summary of Transactions Involving Stock Units and Director Stock Grants (Details) - Stock and stock units shares in Thousands | 3 Months Ended |
Mar. 31, 2021$ / sharesshares | |
Changes during the period: | |
Stock and stock units, beginning of period (in shares) | shares | 854 |
Granted (in shares) | shares | 0 |
Vested and settled (in shares) | shares | 0 |
Forfeited and cancelled (in shares) | shares | (10) |
Stock and stock units, end of period (in shares) | shares | 844 |
Changes during the period: | |
Stock and stock units, beginning of period (in dollars per share) | $ / shares | $ 12.55 |
Granted (in dollars per share) | $ / shares | 0 |
Vested and settled (in dollars per share) | $ / shares | 0 |
Forfeited and cancelled (in dollars per share) | $ / shares | 12.78 |
Stock and stock units, end of period (in dollars per share) | $ / shares | $ 12.54 |
SHARE-BASED COMPENSATION - Su_2
SHARE-BASED COMPENSATION - Summary of Transactions Involving Performance Awards (Details) - Long-term performance stock units shares in Thousands | 3 Months Ended | |
Mar. 31, 2021$ / sharesshares | ||
Performance Units Subject to Market Conditions | ||
Changes during the period: | ||
Stock and stock units, beginning of period (in shares) | shares | 553 | [1] |
Granted (in shares) | shares | 110 | [1] |
Vested and settled (in shares) | shares | (28) | [1] |
Forfeited and cancelled (in shares) | shares | (95) | [1] |
Stock and stock units, end of period (in shares) | shares | 540 | [1] |
Changes during the period: | ||
Stock and stock units, beginning of period (in dollars per share) | $ / shares | $ 13.69 | |
Granted (in dollars per share) | $ / shares | 14.96 | |
Vested and settled (in dollars per share) | $ / shares | 25.24 | |
Forfeited and cancelled (in dollars per share) | $ / shares | 23.14 | |
Stock and stock units, end of period (in dollars per share) | $ / shares | $ 11.71 | |
Performance Units Not Subject to Market Conditions | ||
Changes during the period: | ||
Stock and stock units, beginning of period (in shares) | shares | 273 | [1] |
Granted (in shares) | shares | 110 | [1] |
Vested and settled (in shares) | shares | 0 | [1] |
Forfeited and cancelled (in shares) | shares | (122) | [1] |
Stock and stock units, end of period (in shares) | shares | 261 | [1] |
Changes during the period: | ||
Stock and stock units, beginning of period (in dollars per share) | $ / shares | $ 12.55 | |
Granted (in dollars per share) | $ / shares | 11.69 | |
Vested and settled (in dollars per share) | $ / shares | 0 | |
Forfeited and cancelled (in dollars per share) | $ / shares | 17.49 | |
Stock and stock units, end of period (in dollars per share) | $ / shares | $ 9.87 | |
[1] | Performance units with variable payouts are shown at target level of performance. |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE LOSS - Summary of Changes in Accumulated Other Comprehensive Loss Included Within Shareholders' Equity (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance, beginning of period | $ 214,603 | |
Other comprehensive income (loss) | 217 | $ (9,476) |
Tax Provision | 102 | (185) |
Other comprehensive income (loss), net of tax | 319 | (9,661) |
Balance, end of period | 182,860 | |
Total | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance, beginning of period | (27,678) | (30,190) |
Balance, end of period | (27,359) | (39,851) |
Foreign Currency Translation Adjustments | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance, beginning of period | (23,045) | (26,742) |
Other comprehensive income (loss) | 217 | (9,741) |
Tax Provision | 102 | (120) |
Balance, end of period | (22,828) | (36,483) |
Foreign Currency Hedge | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance, beginning of period | 2,988 | 4,186 |
Other comprehensive income (loss) | 0 | 265 |
Tax Provision | 0 | (65) |
Balance, end of period | 2,988 | 4,451 |
Defined Benefit Pension Plans | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance, beginning of period | (8,021) | (8,021) |
Other comprehensive income (loss) | 0 | 0 |
Balance, end of period | (8,021) | (8,021) |
Tax Provision | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance, beginning of period | 400 | 387 |
Tax Provision | 102 | (185) |
Balance, end of period | $ 502 | $ 202 |
ACCUMULATED OTHER COMPREHENSI_4
ACCUMULATED OTHER COMPREHENSIVE LOSS - Related Tax Effects Allocated to Each Component of Other Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Accumulated Other Comprehensive Loss [Line Items] | ||
Gross Amount | $ 217 | $ (9,476) |
Tax (provision) benefit attributable to other comprehensive income (loss) | 102 | (185) |
Other comprehensive income (loss), net of tax | 319 | (9,661) |
Foreign currency translation adjustments | ||
Accumulated Other Comprehensive Loss [Line Items] | ||
Gross Amount | 217 | (9,741) |
Tax (provision) benefit attributable to other comprehensive income (loss) | 102 | (120) |
Other comprehensive income (loss), net of tax | 319 | (9,861) |
Foreign currency hedge | ||
Accumulated Other Comprehensive Loss [Line Items] | ||
Gross Amount | 0 | 265 |
Tax (provision) benefit attributable to other comprehensive income (loss) | 0 | (65) |
Other comprehensive income (loss), net of tax | $ 0 | $ 200 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) | Apr. 20, 2021facility |
Forecast | |
Loss Contingencies [Line Items] | |
Number of facilities with potential violations | 7 |
SEGMENT AND GEOGRAPHIC DISCLO_3
SEGMENT AND GEOGRAPHIC DISCLOSURES - Additional Information (Details) | 3 Months Ended |
Mar. 31, 2021segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 3 |
SEGMENT AND GEOGRAPHIC DISCLO_4
SEGMENT AND GEOGRAPHIC DISCLOSURES - Segment Data for our Three Operating Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Segment Reporting Information [Line Items] | ||
Revenues | $ 194,618 | $ 236,839 |
Operating income (loss) | (24,300) | (212,932) |
Capital expenditures | 4,397 | 6,704 |
Depreciation and amortization | 10,959 | 11,708 |
IHT | ||
Segment Reporting Information [Line Items] | ||
Revenues | 91,139 | 107,881 |
MS | ||
Segment Reporting Information [Line Items] | ||
Revenues | 87,396 | 104,519 |
Quest Integrity | ||
Segment Reporting Information [Line Items] | ||
Revenues | 16,083 | 24,439 |
Operating segments | IHT | ||
Segment Reporting Information [Line Items] | ||
Revenues | 91,139 | 107,881 |
Operating income (loss) | 364 | (192,150) |
Capital expenditures | 2,714 | 1,041 |
Depreciation and amortization | 3,470 | 3,983 |
Operating segments | MS | ||
Segment Reporting Information [Line Items] | ||
Revenues | 87,396 | 104,519 |
Operating income (loss) | 115 | 1,022 |
Capital expenditures | 1,152 | 3,617 |
Depreciation and amortization | 5,439 | 5,431 |
Operating segments | Quest Integrity | ||
Segment Reporting Information [Line Items] | ||
Revenues | 16,083 | 24,439 |
Operating income (loss) | (252) | 6,106 |
Capital expenditures | 406 | 971 |
Depreciation and amortization | 712 | 886 |
Corporate and shared support services | ||
Segment Reporting Information [Line Items] | ||
Operating income (loss) | (24,527) | (27,910) |
Capital expenditures | 125 | 1,075 |
Depreciation and amortization | $ 1,338 | $ 1,408 |
SEGMENT AND GEOGRAPHIC DISCLO_5
SEGMENT AND GEOGRAPHIC DISCLOSURES - Geographic Breakdown of Revenues (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Revenues from External Customers [Line Items] | ||
Revenues | $ 194,618 | $ 236,839 |
United States | ||
Revenues from External Customers [Line Items] | ||
Revenues | 141,832 | 173,510 |
Canada | ||
Revenues from External Customers [Line Items] | ||
Revenues | 16,494 | 21,209 |
Europe | ||
Revenues from External Customers [Line Items] | ||
Revenues | 25,711 | 28,546 |
Other foreign countries | ||
Revenues from External Customers [Line Items] | ||
Revenues | $ 10,581 | $ 13,574 |
RESTRUCTURING AND OTHER RELAT_3
RESTRUCTURING AND OTHER RELATED CHARGES (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and other related charges, net | $ 1,877 | $ 186 |
Operating Group Reorganization Program | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and other related charges, net | 1,877 | 0 |
Professional fees | 800 | |
Operating Group Reorganization Program | Employee Severance | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and other related charges, net | 1,877 | |
OneTEAM Program | Employee Severance | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and other related charges, net | 200 | |
Severance charges incurred cumulatively to date | 11,800 | |
IHT | Operating Group Reorganization Program | Employee Severance | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and other related charges, net | 283 | 0 |
MS | Operating Group Reorganization Program | Employee Severance | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and other related charges, net | 139 | 0 |
Quest Integrity | Operating Group Reorganization Program | Employee Severance | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and other related charges, net | 233 | 0 |
Corporate and shared support services | Operating Group Reorganization Program | Employee Severance | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and other related charges, net | $ 1,222 | $ 0 |
RESTRUCTURING AND OTHER RELAT_4
RESTRUCTURING AND OTHER RELATED CHARGES Rollforward of Liability (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Restructuring Reserve [Roll Forward] | ||
Restructuring Charges | $ 1,877 | $ 186 |
Operating Group Reorganization Program | ||
Restructuring Reserve [Roll Forward] | ||
Restructuring Charges | 1,877 | $ 0 |
Employee Severance | Operating Group Reorganization Program | ||
Restructuring Reserve [Roll Forward] | ||
Restructuring Reserve, Beginning Balance | 0 | |
Restructuring Charges | 1,877 | |
Payments for Restructuring | (353) | |
Restructuring Reserve, Ending Balance | $ 1,524 |