Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2022 | May 06, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2022 | |
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, $0.30 par value | |
Trading Symbol | TISI | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 43,121,579 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
Entity Central Index Key | 0000318833 | |
Current Fiscal Year End Date | --12-31 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 53,698 | $ 65,315 |
Accounts receivable, net of allowance of $8,170 and $8,912, respectively | 207,779 | 188,772 |
Inventory | 36,436 | 35,754 |
Income tax receivable | 3,673 | 3,349 |
Prepaid expenses and other current assets | 66,470 | 59,868 |
Total current assets | 368,056 | 353,058 |
Property, plant and equipment, net | 160,189 | 161,359 |
Operating lease right-of-use assets | 56,403 | 60,700 |
Intangible assets, net | 86,572 | 89,898 |
Goodwill | 25,249 | 25,243 |
Defined benefit pension asset | 4,007 | 2,902 |
Deferred income taxes | 262 | 792 |
Other assets, net | 15,297 | 10,533 |
Total assets | 716,035 | 704,485 |
Current liabilities: | ||
Accounts payable | 41,137 | 46,181 |
Current portion of long-term debt and finance lease obligations | 670 | 669 |
Current portion of operating lease obligations | 15,306 | 16,176 |
Other accrued liabilities | 123,990 | 121,099 |
Total current liabilities | 181,103 | 184,125 |
Long-term debt and finance lease obligations | 455,815 | 405,191 |
Operating lease obligations | 45,742 | 49,221 |
Deferred income taxes | 2,837 | 4,185 |
Other long-term liabilities | 3,468 | 9,896 |
Total liabilities | 688,965 | 652,618 |
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; 43,121,579 and 31,214,714 shares issued | 12,931 | 9,359 |
Additional paid-in capital | 444,747 | 444,824 |
Accumulated deficit | (404,222) | (375,584) |
Accumulated other comprehensive loss | (26,386) | (26,732) |
Total equity | 27,070 | 51,867 |
Total liabilities and equity | $ 716,035 | $ 704,485 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Allowance for credit loss, current | $ 8,170 | $ 8,912 |
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) | 43,121,579 | 31,214,714 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income Statement [Abstract] | ||
Revenues | $ 218,576 | $ 194,618 |
Operating expenses | 163,478 | 150,917 |
Gross margin | 55,098 | 43,701 |
Selling, general and administrative expenses | 71,285 | 66,124 |
Restructuring and other related charges, net | 16 | 1,877 |
Operating loss | (16,203) | (24,300) |
Interest expense, net | (18,605) | (9,396) |
Other income (expense) | 2,702 | (950) |
Loss before income taxes | (32,106) | (34,646) |
(Provision) benefit for income taxes | (356) | 355 |
Net loss | $ (32,462) | $ (34,291) |
Loss per common share: | ||
Basic (in dollars per share) | $ (0.86) | $ (1.11) |
Diluted (in dollars per share) | $ (0.86) | $ (1.11) |
Weighted-average number of shares outstanding: | ||
Weighted-average number of basic shares outstanding (in shares) | 37,697 | 30,878 |
Weighted-average number of diluted shares outstanding (in shares) | 37,697 | 30,878 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (32,462) | $ (34,291) |
Other comprehensive income (loss) before tax: | ||
Foreign currency translation adjustment | 346 | 217 |
Other comprehensive income (loss), before tax | 346 | 217 |
Tax (provision) benefit attributable to other comprehensive income (loss) | 0 | 102 |
Other comprehensive loss, net of tax | 346 | 319 |
Total comprehensive loss | $ (32,116) | $ (33,972) |
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 | Additional Paid-in CapitalCumulative Effect, Period of Adoption, Adjustment | Retained Earnings (Deficit) | Retained Earnings (Deficit)Cumulative Effect, Period of Adoption, Adjustment | Accumulated Other Comprehensive Loss |
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) | |||
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] | ||||||||
Accounting Standards Update [Extensible List] | ASU 2020-06 (ASC 470-20) | |||||||
Ending balance (in shares) at Dec. 31, 2021 | 31,215 | |||||||
Ending Balance at Dec. 31, 2021 | $ 51,867 | $ (1,827) | $ 9,359 | 444,824 | $ (5,651) | (375,584) | $ 3,824 | (26,732) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Issuance of common stock (in shares) | 11,905 | |||||||
Issuance of common stock | 9,768 | $ 3,572 | 6,196 | |||||
Net loss | (32,462) | (32,462) | ||||||
Foreign currency translation adjustment, net of tax | 346 | 346 | ||||||
Non-cash compensation (in shares) | 2 | |||||||
Non-cash compensation | (624) | (624) | ||||||
Net settlement of vested stock awards | 2 | 2 | ||||||
Ending balance (in shares) at Mar. 31, 2022 | 43,122 | |||||||
Ending Balance at Mar. 31, 2022 | $ 27,070 | $ 12,931 | $ 444,747 | $ (404,222) | $ (26,386) |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Cash flows (used in) provided by operating activities: | ||
Net loss | $ (32,462) | $ (34,291) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||
Depreciation and amortization | 10,031 | 10,959 |
Write-off of deferred loan costs | 2,748 | 0 |
Amortization of deferred loan costs and debt discounts | 8,397 | 2,040 |
Allowance for credit losses | 67 | 352 |
Foreign currency (gains) losses | (185) | 1,122 |
Deferred income taxes | (799) | (920) |
Gain on asset disposals | (2,306) | (18) |
Non-cash compensation (credits) costs | (624) | 2,330 |
Other, net | (1,216) | (1,219) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (18,546) | (1,601) |
Inventory | (1,284) | 356 |
Prepaid expenses and other current assets | (5,902) | 2,009 |
Accounts payable | (4,722) | 2,192 |
Other accrued liabilities | (2,884) | 327 |
Income taxes | (319) | (821) |
Net cash used in operating activities | (50,006) | (17,183) |
Cash flows (used in) provided by investing activities: | ||
Capital expenditures | (7,068) | (3,413) |
Proceeds from disposal of assets | 3,026 | 29 |
Net cash used in investing activities | (4,042) | (3,384) |
Cash flows (used in) provided by financing activities: | ||
Borrowings under ABL Credit Agreement, gross | 104,924 | 0 |
Payments under ABL Credit Agreement, gross | (235) | 0 |
Borrowings under ABL Facility, net | 0 | 28,000 |
Borrowings under ABL Facility, gross | 10,300 | 47,000 |
Payments under ABL Facility, gross | (72,300) | (56,000) |
Payments for debt issuance costs | (10,345) | (2,027) |
Taxes paid related to net share settlement of share-based awards | 0 | (101) |
Issuance of common stock | 9,767 | 0 |
Other | (145) | (64) |
Net cash provided by financing activities | 41,966 | 16,808 |
Effect of exchange rate changes on cash and cash equivalents | 465 | 1,517 |
Net decrease in cash and cash equivalents | (11,617) | (2,242) |
Cash and cash equivalents at beginning of period | 65,315 | 24,586 |
Cash and cash equivalents at end of period | $ 53,698 | $ 22,344 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES | 3 Months Ended |
Mar. 31, 2022 | |
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 “we” “our” and “us” are used in this report to refer to either 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 clients’ 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 we are uniquely qualified to provide integrated solutions: 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 we are unique in our 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 conventional and advanced non-destructive testing (“NDT”) services primarily for the process, pipeline and power sectors, pipeline integrity management services, and field 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. IHT also provides advanced digital imaging including remote digital video imaging, laser scanning and laser profilometry-enabled reformer care services. MS provides solutions designed to serve clients’ unique needs during both the operational (onstream) and off-line states of their assets. Our onstream services include our range of standard to custom-engineered leak repair and composite solutions; emissions control and compliance; hot tapping and line stopping; and on-line valve insertion solutions, which are delivered while assets are in an operational condition, which maximizes client production time. Asset shutdowns can be planned, such as a turnaround maintenance event, or unplanned, such as those due to component failure or equipment breakdowns. Our specialty maintenance, turnaround and outage services are designed to minimize client downtime and are primarily delivered while assets are off-line and often through the use of cross-certified technicians, whose multi-craft capabilities deliver the production needed to achieve tight time schedules. These critical services include on-site field machining; bolted-joint integrity; vapor barrier plug testing; and valve management solutions. Quest Integrity provides integrity and reliability management solutions for the process, pipeline and power sectors. These solutions encompass two broadly-defined disciplines: (1) highly specialized in-line inspection services for historically unpiggable process piping and pipelines using proprietary in-line inspection tools and analytical software; and (2) advanced engineering and condition assessment services through a multi-disciplined engineering team and related lab support. We market our services to companies in a diverse array of heavy industries which include: • Energy (refining, power, renewables, nuclear and liquefied natural gas); • 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. Recent Financing Transactions. On February 11, 2022, we entered into a credit agreement with the lender parties thereto, and Eclipse Business Capital, LLC, a Delaware limited liability company, as agent, (“Eclipse”) (such agreement, the “ABL Credit Agreement”). Available funding commitments to the Company under the ABL Credit Agreement, subject to certain conditions, include a revolving credit line in an amount of up to $130.0 million to be provided by certain affiliates of Eclipse (the “Revolving Credit Loans”), with a $35.0 million sublimit for swingline borrowings and a $26.0 million sublimit for issuances of letters of credit, and an incremental delayed draw term loan of up to $35.0 million (the “Delayed Draw Term Loans”) to be provided by Corre (as defined below) (collectively the “ABL Credit Facility”). The ABL Credit Facility matures and all outstanding amounts become due and payable on February 11, 2025. The proceeds of the loans under the ABL Credit Agreement were used to, among other things, pay off the amounts owed under the Citi Credit Agreement (as defined in Note 11 - Long-Term Debt) dated as of December 18, 2020 (as amended from time to time), among the Company, the lenders party thereto and Citibank, N.A. as agent, which was repaid and terminated in full on February 11, 2022. In connection with the transactions contemplated by the ABL Credit Agreement, Corre Partners Management, LLC and certain of its affiliates (collectively, “Corre”), agreed to provide the Company with incremental financing (the “Incremental Financing”), totaling approximately $55.0 million, consisting of (i) $35.0 million Delayed Draw Term Loans under the ABL Credit Facility as discussed above; (ii) $10.0 million from Corre in the form of the February 2022 Delayed Draw Term Loan (as defined in the Subordinated Term Loan Credit Agreement (as defined below)) on a pari passu basis with the existing loans issued pursuant to the Subordinated Term Loan Credit Agreement; and (iii) $10.0 million through an issuance of 11,904,762 shares (the “PIPE Shares”) of our common stock, to Corre Opportunities Qualified Master Fund, LP, Corre Horizon Fund, LP and Corre Horizon II Fund, LP (collectively, the “Corre Holders”) at a price of $0.84 per share (the “Equity Issuance”). On May 6, 2022, we entered into separate amendments on certain of our credit facilities as follows: • ABL Credit Agreement: On May 6, 2022, we entered into Amendment No. 1 (the “ABL Credit Agreement Amendment No. 1”) to the ABL Credit Agreement. The ABL Credit Agreement Amendment No. 1, among other things, modifies the Maturity Reserve Trigger Date (as defined in the ABL Credit Agreement) such that the date on which a reserve must, subject to certain conditions, be put into place with respect to the outstanding principal amount of the 5.00% Convertible Senior Notes due 2023 (the”Notes”) is 75 days prior to their maturity date, instead of 120 days prior to their maturity date. • Atlantic Park Term Loan: On May 6, 2022, we entered into Amendment No. 7 (the “Seventh Amendment”) to the Term Loan Credit Agreement dated December 18, 2020, between the Company and Atlantic Park Strategic Capital Fund, L.P., as agent (“APSC”), as lender (the “Term Loan Credit Agreement”). The Seventh Amendment, among other things and subject to the terms thereof, (i) modifies the Maturity Trigger Date (as defined in the Term Loan Credit Agreement) such that the date on which the maturity of the Term Loan Credit Agreement is triggered as a result of there being an aggregate principal amount of more than $10.0 million outstanding under the Notes is 75 days prior to their maturity date instead of 120 days prior to their maturity date, and (ii) amends the financial covenants, such that the maximum net leverage ratio to be tested for the fiscal quarter ending March 31, 2023 will be increased from 7.00 to 1.00 to 12.00 to 1.00. • Subordinated Term Loan Credit Agreement: On May 6, 2022, we entered into Amendment No. 6 (the “Corre Amendment No. 6”) with the lenders from time to time party thereto (including Corre), and Cantor Fitzgerald Securities, as agent to the Subordinated Term Loan Credit Agreement dated November 9, 2021, by and among the Company, Corre Credit Fund, LLC (“Corre Fund”), as agent, and the lenders party thereto (the “Subordinated Term Loan Credit Agreement”). The Corre Amendment No. 6, among other things, amends the financial covenants, such that the maximum net leverage ratio to be tested for the fiscal quarter ending March 31, 2023 will be increased from 7.00 to 1.00 to 12.00 to 1.00. 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. The ultimate duration and economic impact of the COVID-19 pandemic remains unclear. However, 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. The extent of COVID-19’s effect on our operational and financial performance will depend on future developments, including the duration, spread and intensity of the pandemic (including any resurgences), the impact of the new COVID-19 variants, the continued rollout and acceptance of COVID-19 vaccines, and the level of social and economic restrictions imposed in the United States and abroad in an effort to curb the spread of the virus, all of which are uncertain and difficult to predict considering the rapidly evolving landscape. Under the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”), we qualified to defer the employer portion of social security taxes incurred through the end of calendar 2020. As of March 31, 2022, we have deferred employer payroll taxes of $7.1 million. As of December 31, 2021 we had $14.1 million outstanding and we paid $7.0 million of the deferred payroll taxes in January 2022, the remaining balance of $7.1 million is due at the end of 2022. Additionally, other governments in jurisdictions where we operate passed legislation to provide employers with relief programs, which include wage subsidy grants, deferral of certain payroll related expenses and tax payments and other benefits. We elected to treat qualified government subsidies from Canada and other governments as offsets to the related expenses. We recognized $0.6 million and $0.1 million as a reduction to operating expenses and selling, general and administrative expenses, respectively, during the three months ended March 31, 2022 and $2.0 million and $0.4 million as a reduction for operating expenses and selling, general and administrative expenses, respectively, during the three months ended March 31, 2021. Basis for presentation. In the opinion of management, these unaudited 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, 2021 as filed with the Securities and Exchange Commission. Consolidation. The condensed consolidated financial statements include the accounts of our subsidiaries where we have control over operating and financial policies. All material intercompany accounts and transactions have been eliminated in consolidation. Related Party Transactions. A related party transaction is any transaction, arrangement or relationship or series of similar transactions, arrangements or relationships (including the incurrence or issuance of any indebtedness or the guarantee of indebtedness) in which (1) the Company or any of its subsidiaries is a participant, and (2) any Related Party (as defined herein) has or will have a direct or indirect material interest. A Related Party is any person who is, or, at any time since the beginning of the Company’s last fiscal year, was (1) an executive officer, director or nominee for election as a director of the Company or any of its subsidiaries, (2) a person with greater than five percent (5%) beneficial interest in the Company, (3) an immediate family member of any of the individuals or entities identified in (1) or (2) of this paragraph, and (4) any firm, corporation or other entity in which any of the foregoing individuals or entities is employed or is a general partner or principal or in a similar position or in which such person or entity has a five percent (5%) or greater beneficial interest. Immediate family members includes a person’s spouse, parents, stepparents, children, stepchildren, siblings, mothers- and fathers-in-law, sons- and daughters-in-law, brothers- and sisters-in-law and anyone residing in such person’s home, other than a tenant or employee. Going Concern. These condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) assuming the Company will continue as a going concern. As of March 31, 2022, we are in compliance with our debt covenants. As discussed above, the Company successfully negotiated amendments to our credit facilities including the financial covenants contained therein. In addition, we evaluated the Company’s liquidity within one year after the date of issuance of these condensed consolidated financial statements to determine if there is substantial doubt about the Company’s ability to continue as a going concern. In the preparation of this liquidity assessment, we applied judgment to estimate the projected cash flows of the Company, including the following: (i) projected cash outflows, (ii) projected cash inflows, and (iii) excess availability level under the Company’s existing debt arrangements. The cash flow projections were based on known or planned cash requirements for operating and financing costs. We believe, based on the Company’s forecast and the amendments entered in May 2022, that current working capital and capital expenditure financing is sufficient to fund the operations, maintain compliance with our debt covenants (as amended), and satisfy the Company’s obligations as they come due within one year after the date of issuance of these condensed consolidated financial statements. Our ability to maintain compliance with the financial covenants contained in the ABL Credit Facility, Term Loan Credit Agreement, and Subordinated Term Loan Credit Agreement is dependent upon our future operating performance and future financial condition, both of which are subject to various risks and uncertainties. Under the terms of our amended financing arrangements, each of the Maturity Reserve Trigger Date (as defined in the ABL Credit Agreement) and the Maturity Trigger Date (as defined in the Term Loan Credit Agreement) (collectively, the “Trigger Date”) is now May 18, 2023. While our lenders agreed on an extension and amended the financial covenants contained therein, there can be no assurance that our lenders will provide additional waivers or amendments in the event of future non-compliance with our debt covenants, or other possible events of default that could happen. Use of estimates. Our accounting policies conform to GAAP. The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and judgments that affect our reported financial position and results of operations. We review significant estimates and judgments affecting our consolidated financial statements on a recurring basis and record the effect of any necessary adjustments prior to their publication. Estimates and judgments are based on information available at the time such estimates and judgments are made. Adjustments made with respect to the use of these estimates and judgments often relate to information not previously available. Uncertainties with respect to such estimates and judgments are inherent in the preparation of financial statements. Estimates and judgments are used in, among other things, (1) aspects of revenue recognition, (2) valuation of acquisition related tangible and intangible assets and assessments of all long-lived assets for possible impairment, (3) estimating various factors used to accrue liabilities for workers’ compensation, auto, medical, and general liability, (4) establishing an allowance for uncollectible accounts receivable, (5) estimating the useful lives of our assets, (6) assessing future tax exposure and the realization of tax assets, (7) 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. Our most significant accounting policies are described below. 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, trade accounts receivable and trade accounts payable are representative of their respective fair values due to the short-term maturity of these instruments. The fair value of our ABL Credit Facility and Term Loans defined below is representative of the carrying value based upon the variable terms and management’s opinion that the current rates available to us with the same maturity and security structure are equivalent to that of the debt. The fair value of our 5.00% Convertible Senior Notes due 2023 (the “Notes”) as of March 31, 2022 and December 31, 2021 is $86.1 million and $84.0 million, respectively, (inclusive of the fair value of the conversion option) and are a “Level 2” measurement, determined based on the observed trading price of these instruments. For additional information regarding our ABL Credit Facilities, Atlantic Park Term Loan, Subordinated Term Loan and Notes, see Note 11 - Long-Term Debt. Cash and cash equivalents . Cash and cash equivalents consist of all deposits and funds invested in highly liquid short-term investments with original maturities of three months or less. Inventory. Except for certain inventories that are valued based on weighted-average cost, we use the first-in, first-out method to value our inventory. Inventory includes material, labor, and certain fixed overhead costs. Inventory is stated at the lower of cost and net realizable value. Inventory quantities on hand are reviewed periodically and carrying cost is reduced to net realizable value for inventories for which their cost exceeds their utility. The cost of inventories consumed or products sold are included in operating expenses. Property, plant and equipment. Property, plant and equipment are stated at cost less accumulated depreciation and amortization. Leasehold improvements are amortized over the shorter of their respective useful life or the lease term. Depreciation and amortization of assets are computed by the straight-line method over the following estimated useful lives of the assets: Classification Useful Life Buildings 20-40 years Enterprise Resource Planning (“ERP”) System 15 years Leasehold improvements 2-15 years Machinery and equipment 2-12 years Furniture and fixtures 2-10 years Computers and computer software 2-5 years Automobiles 2-5 years Goodwill and intangible assets. We allocate the purchase price of acquired businesses to their identifiable tangible assets and liabilities, such as accounts receivable, inventory, property, plant and equipment, accounts payable and accrued liabilities. We also allocate a portion of the purchase price to identifiable intangible assets, such as client relationships, non-compete agreements, trade names, technology, and licenses. Allocations are based on estimated fair values of assets and liabilities. We use all available information to estimate fair values including quoted market prices, the carrying value of acquired assets, and widely accepted valuation techniques such as discounted cash flows. Certain estimates and judgments are required in the application of the fair value techniques, including estimates of future cash flows, selling prices, replacement costs, economic lives, and the selection of a discount rate, as well as the use of “Level 3” measurements as defined in ASC 820. Deferred taxes are recorded for any differences between the assigned values and tax bases of assets and liabilities. Estimated deferred taxes are based on available information concerning the tax bases of assets acquired and liabilities assumed and loss carryforwards at the acquisition date, although such estimates may change in the future as additional information becomes known. Any remaining excess of cost over allocated fair values is recorded as goodwill. We typically engage third-party valuation experts to assist in determining the fair values for both the identifiable tangible and intangible assets. The judgments made in determining the estimated fair value assigned to each class of assets acquired and liabilities assumed, as well as asset lives, could materially impact our results of operations. Goodwill and intangible assets acquired in a 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. Each reporting unit has goodwill relating to past acquisitions. 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. Income taxes. We follow the guidance of ASC 740 Income Taxes (“ASC 740”), which requires that we use the asset and liability method of accounting for deferred income taxes and provide deferred income taxes for all significant temporary differences. As part of the process of preparing our consolidated financial statements, we are required to estimate our income taxes in each of the jurisdictions in which we operate. This process involves estimating our actual current tax payable or receivable and related tax expense or benefit together with assessing temporary differences resulting from differing treatment of certain items, such as depreciation, for tax and accounting purposes. These differences can result in deferred tax assets and liabilities, which are included within our consolidated balance sheets. In accordance with ASC 740, we are required to assess the likelihood that our deferred tax assets will be realized and, to the extent we believe it is more likely than not (a likelihood of more than 50%) that some portion or all of the deferred tax assets will not be realized, we must establish a valuation allowance. We consider all available evidence to determine whether, based on the weight of the evidence, a valuation allowance is needed. Evidence used includes the reversal of existing taxable temporary differences, taxable income in prior carryback years if carryback is permitted by tax law, information about our current financial position and our results of operations for the current and preceding years, as well as all currently available information about future years, including our anticipated future performance and tax planning strategies. We regularly assess whether it is more likely than not that we will realize the deferred tax assets in the jurisdictions in which we operate. Management believes future sources of taxable income, reversing temporary differences and other tax planning strategies will be sufficient to realize the deferred tax assets for which no valuation allowance has been established. Our valuation allowance primarily relates to net operating loss carryforwards. While we have considered these factors in assessing the need for additional valuation allowance, there can be no assurance that additional valuation allowance would not need to be established in the future if information about future years change. Any changes in valuation allowance would impact our income tax provision and net income (loss) in the period in which such a determination is made. Significant judgment is required in assessing the timing and amounts of deductible and taxable items for tax purposes. In accordance with ASC 740-10, we establish reserves for uncertain tax positions when, despite our belief that our tax return positions are supportable, we believe that it is not more likely than not that the position will be sustained upon challenge. When facts and circumstances change, we adjust these reserves through our provision for income taxes. To the extent interest and penalties may be assessed by taxing authorities on any related underpayment of income tax, such amounts have been accrued and are classified as a component of income tax expense (benefit) in our consolidated statements of operations. Workers’ compensation, auto, medical and general liability accruals. In accordance with ASC 450 Contingencies (“ASC 450”), we record a loss contingency when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. We review our loss contingencies on an ongoing basis to ensure that we have appropriate reserves recorded on our balance sheet. These reserves are based on historical experience with claims incurred but not received, estimates and judgments made by management, applicable insurance coverage for litigation matters, and are adjusted as circumstances warrant. For workers’ compensation, our self-insured retention is $1.0 million and our automobile liability self-insured retention is currently $1.0 million per occurrence. For general liability claims, we have an effective self-insured retention of $1.0 million and a deductible of $2.0 million per occurrence. For medical claims, our self-insured retention is $400,000 per individual claimant determined on an annual basis. For environmental liability claims, our self-insured retention is $1.0 million per occurrence. We maintain insurance for claims that exceed such self-retention limits. The insurance is subject to terms, conditions, limitations, and exclusions that may not fully compensate us for all losses. Our estimates and judgments could change based on new information, changes in laws or regulations, changes in management’s plans or intentions, or the outcome of legal proceedings, settlements, or other factors. If different estimates and judgments were applied with respect to these matters, it is likely that reserves would be recorded for different amounts. Allowance for credit losses. In the ordinary course of business, a portion of our accounts receivable are not collected due to billing disputes, customer bankruptcies, dissatisfaction with the services we performed and other various reasons. We establish an allowance to account for those accounts receivable that we estimate will eventually be deemed uncollectible. The allowance for credit losses is based on a combination of our historical experience and management’s review of long outstanding accounts receivable. Concentration of credit risk. No single customer accounts for more than 10% of consolidated revenues. Earnings (loss) per share. Basic earnings (loss) per share is computed by dividing income (loss) from continuing operations, income (loss) from discontinued operations or net income (loss) by the weighted-average number of shares of common stock outstanding during the year. Diluted earnings (loss) per share is computed by dividing income (loss) from continuing operations, income (loss) from discontinued operations or net income (loss) by the sum of (1) the weighted-average number of shares of common stock outstanding during the period, (2) the dilutive effect of the assumed exercise of share-based compensation using the treasury stock method and (3) the dilutive effect of the assumed conversion of our Notes under the treasury stock method. Our current intent is to settle the principal amount of our 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 (the “conversion spread”). Accordingly, the conversion spread is included in the denominator for the computation of diluted earnings per common share using the treasury stock method and the numerator is adjusted for any recorded gain or loss, net of tax, on the embedded derivative associated with the conversion feature. For the three months ended March 31, 2022 and 2021, all outstanding share-based compensation awards were excluded from the calculation of diluted loss per share because their inclusion would be antidilutive due to the loss from continuing operations in those periods. Also, for the three months ended March 31, 2022 and 2021, the Notes were excluded from the calculation of diluted earnings (loss) per share since the conversion price exceeded the average price of our common stock during the applicable periods. For information regarding our Notes and our share-based compensation awards, refer to Note 11 and Note 14, respectively. Non-cash investing and financing activities. Non-cash investing and financing activities are excluded from the consolidated statements of cash flows and are as follows (in thousands): Three Mo |
REVENUE
REVENUE | 3 Months Ended |
Mar. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | REVENUE In accordance with ASC Topic 606, Revenue from Contracts with Customers , (“ASC 606”) 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. Most 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. Generally, in contracts where the amount of consideration is variable, the amount is determinable each period based on our right to invoice (as discussed further below) the customer for services performed to date. As most of our contracts contain only one performance obligation, the allocation of a contract 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 twelve months or less from the date of service. 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. 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): Geographic area: Three Months Ended March 31, 2022 Three Months Ended March 31, 2021 (unaudited) (unaudited) United States and Canada Other Countries Total United States and Canada Other Countries Total Revenue: IHT $ 93,376 $ 2,219 $ 95,595 $ 89,225 $ 1,914 $ 91,139 MS 63,931 29,510 93,441 60,046 27,350 87,396 Quest Integrity 14,691 14,849 29,540 9,055 7,028 16,083 Total $ 171,998 $ 46,578 $ 218,576 $ 158,326 $ 36,292 $ 194,618 Three Months Ended March 31, 2022 (unaudited) Non-Destructive Evaluation and Testing Services Repair and Maintenance Services Heat Treating Other Total Revenue: IHT $ 76,449 $ 24 $ 13,839 $ 5,283 $ 95,595 MS — 91,770 57 1,614 93,441 Quest Integrity 29,540 — — — 29,540 Total $ 105,989 $ 91,794 $ 13,896 $ 6,897 $ 218,576 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 For additional information on our reportable operating segments and geographic information, refer to Note 17. 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 Notes 1 and 3 for additional information on our trade receivables and the allowance for credit losses. 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. The following table provides information about trade accounts receivable, contract assets and contract liabilities as of March 31, 2022 and December 31, 2021 (in thousands): March 31, 2022 December 31, 2021 Change (unaudited) Trade accounts receivable, net 1 $ 207,779 $ 188,772 $ 19,007 Contract assets 2 $ 1,011 $ 1,602 $ (591) Contract liabilities 3 $ 1,588 $ 313 $ 1,275 _________________ 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 $0.6 million decrease in our contract assets from December 31, 2021 to March 31, 2022 is due to less fixed price contracts in progress at March 31, 2022 as compared to December 31, 2021. Contract liabilities increased by $1.3 million as of March 31, 2022. The increase is associated with contracts under which customers have 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. Accordingly, essentially all of the contract liability balance at December 31, 2021 was recognized as revenue during the quarter ended March 31, 2022. 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. Costs to fulfill a contract are recorded as assets if they relate directly to a contract or a specific anticipated contract, the costs to 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 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 begins. 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, 2022 and December 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. Remaining performance obligations. As of March 31, 2022 and 2021, there were no material amounts of remaining performance obligations that are required to be disclosed. As permitted by ASC 606, we have elected not to disclose information about remaining performance obligations where (i) the performance obligation is part of a contract that has an |
RECEIVABLES
RECEIVABLES | 3 Months Ended |
Mar. 31, 2022 | |
Receivables [Abstract] | |
RECEIVABLES | RECEIVABLES A summary of accounts receivable as of March 31, 2022 and December 31, 2021 is as follows (in thousands): March 31, 2022 December 31, 2021 (unaudited) Trade accounts receivable $ 170,654 $ 161,751 Unbilled receivables 45,295 35,933 Allowance for credit losses (8,170) (8,912) Total $ 207,779 $ 188,772 ASC 326, Credit Losses , 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 (in thousands): March 31, 2022 December 31, 2021 (unaudited) Balance at beginning of period $ 8,912 $ 9,918 Provision for expected credit losses 66 2,193 Write-offs (830) (3,143) Foreign exchange effects 22 (56) Balance at end of period $ 8,170 $ 8,912 |
INVENTORY
INVENTORY | 3 Months Ended |
Mar. 31, 2022 | |
Inventory Disclosure [Abstract] | |
INVENTORY | INVENTORY A summary of inventory as of March 31, 2022 and December 31, 2021 is as follows (in thousands): March 31, 2022 December 31, 2021 (unaudited) Raw materials $ 8,050 $ 7,641 Work in progress 3,262 2,725 Finished goods 25,124 25,388 Total $ 36,436 $ 35,754 |
PREPAID AND OTHER CURRENT ASSET
PREPAID AND OTHER CURRENT ASSETS | 3 Months Ended |
Mar. 31, 2022 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
PREPAID AND OTHER CURRENT ASSETS | PREPAID AND OTHER CURRENT ASSETS A summary of prepaid and other current assets as of March 31, 2022 and December 31, 2021 is as follows (in thousands): March 31, 2022 December 31, 2021 (unaudited) Insurance receivable $ 39,000 $ 39,000 Prepaid expenses 13,763 12,645 Other current assets 13,707 8,223 Total $ 66,470 $ 59,868 The insurance receivable relates to the receivable from our third-party insurance providers for a legal claim that is recorded in other accrued liabilities, refer to Note 9. These receivables will be covered by our third-party insurance providers for a litigation matter that has been settled or are pending settlements where the deductibles have been satisfied. The prepaid expenses primarily relate to prepaid insurance and other expenses that have been paid in advance of the coverage period. The other current assets primarily include items such as contract assets, receivable from third party, and other accounts receivables. |
PROPERTY, PLANT AND EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT | 3 Months Ended |
Mar. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT | PROPERTY, PLANT AND EQUIPMENT A summary of property, plant and equipment as of March 31, 2022 and December 31, 2021 is as follows (in thousands): March 31, 2022 December 31, 2021 (unaudited) Land $ 5,208 $ 5,743 Buildings and leasehold improvements 57,902 58,972 Machinery and equipment 304,018 306,366 Furniture and fixtures 11,555 11,642 Capitalized ERP system development costs 45,917 45,917 Computers and computer software 22,281 22,243 Automobiles 4,326 4,356 Construction in progress 20,938 16,565 Total 472,145 471,804 Accumulated depreciation (311,956) (310,445) Property, plant and equipment, net $ 160,189 $ 161,359 |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 3 Months Ended |
Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | INTANGIBLE ASSETS A summary of intangible assets as of March 31, 2022 and December 31, 2021 is as follows (in thousands): March 31, 2022 December 31, 2021 (unaudited) Gross Accumulated Net Gross Accumulated Net Customer relationships $ 175,130 $ (91,862) $ 83,268 $ 175,156 $ (88,783) $ 86,373 Non-compete agreements 5,509 (5,509) — 5,503 (5,503) — Trade names 24,710 (22,367) 2,343 24,743 (22,252) 2,491 Technology 7,834 (6,933) 901 7,843 (6,885) 958 Licenses 847 (787) 60 850 (774) 76 Total $ 214,030 $ (127,458) $ 86,572 $ 214,095 $ (124,197) $ 89,898 Amortization expense of intangible assets for the three months ended March 31, 2022 and March 31, 2021 was $3.5 million and $3.4 million, respectively. Amortization expense for intangible assets is forecast to be approximately $13 million per year from 2022 through 2025. |
GOODWILL AND IMPAIRMENT CHARGES
GOODWILL AND IMPAIRMENT CHARGES | 3 Months Ended |
Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOOWILL AND IMPAIRMENT CHARGES | GOODWILL AND IMPAIRMENT CHARGES 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. We test for impairment of our reporting units annually on December 1, and between annual tests if we become aware of an event or a change in circumstances that would indicate the carrying value may be impaired. Management did not become aware of an event or a change in circumstances that would indicate the carrying value may be impaired for the period ended March 31, 2022. We will continue to evaluate our goodwill and long-lived assets for potential triggering events as conditions warrant. During 2021, we determined that a triggering event had occurred as it was more likely than not that the carrying values of our reporting units exceeded their fair values as a result of the curtailment of operations and sustained declines in our stock price through September 30, 2021. Based upon our 2021 impairment assessment, we determined the carrying amount of our MS reporting unit exceeded the fair value in 2021. As a result, we recorded $55.8 million in goodwill impairment charges on our MS reporting unit during the three months ended September 30, 2021. The fair value of the Quest Integrity reporting unit exceeded its carrying value at September 30, 2021. Our IHT reporting unit has no goodwill associated as it was determined to be fully impaired on March 31, 2020. Additionally, based on the annual quantitative assessment performed on December 1, 2021, we concluded that the carrying amount of our Quest Integrity reporting unit exceeded the fair value. As a result, we recorded $8.8 million in goodwill impairment charges on our Quest Integrity reporting unit during the three months ended December 31, 2021. There was $25.2 million of goodwill at March 31, 2022 and December 31, 2021. The following table presents a rollforward of goodwill for the three months ended March 31, 2022 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, 2021 $ 212,928 $ (212,928) $ — $ 109,938 $ (109,938) $ — $ 34,038 $ (8,795) $ 25,243 $ 356,904 $ (331,661) $ 25,243 FX Adjustments — — — — — — 6 — 6 6 — 6 Balance at March 31, 2022 $ 212,928 $ (212,928) $ — $ 109,938 $ (109,938) $ — $ 34,044 $ (8,795) $ 25,249 $ 356,910 $ (331,661) $ 25,249 |
OTHER ACCRUED LIABILITIES
OTHER ACCRUED LIABILITIES | 3 Months Ended |
Mar. 31, 2022 | |
Payables and Accruals [Abstract] | |
OTHER ACCRUED LIABILITIES | OTHER ACCRUED LIABILITIES A summary of other accrued liabilities as of March 31, 2022 and December 31, 2021 is as follows (in thousands): March 31, 2022 December 31, 2021 (unaudited) Legal and professional accruals $ 47,073 $ 46,762 Payroll and other compensation expenses 44,513 44,284 Insurance accruals 5,880 7,314 Property, sales and other non-income related taxes 6,658 8,018 Accrued commission 1,398 1,111 Accrued interest 7,165 6,469 Other 11,303 7,141 Total $ 123,990 $ 121,099 Legal and professional accruals include accruals for legal and professional fees as well as accrued legal claims, refer to Note 16. Certain legal claims are covered by insurance and the related insurance receivable for these claims is recorded in |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES We recorded an income tax provision of $0.4 million for the three months ended March 31, 2022 compared to a benefit of $0.4 million for the three months ended March 31, 2021. The effective tax rate, inclusive of discrete items, was a provision of 1.1% for the three months ended March 31, 2022, compared to a benefit of 1.0% for the three months ended March 31, 2021. Our three months ended March 31, 2022 and 2021 effective tax rate differs 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, 2022 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | LONG-TERM DEBT As of March 31, 2022 and December 31, 2021, our long-term debt and finance obligations are summarized as follows (in thousands): March 31, 2022 December 31, 2021 (unaudited) ABL Facilities $ 104,689 $ 62,000 Term Loan 216,043 214,191 Subordinated Term Loan 38,758 36,358 Total $ 359,490 $ 312,549 Convertible Debt 1 91,485 87,662 Finance lease obligations 5,510 5,649 Total debt and finance lease obligations $ 456,485 $ 405,860 Current portion of long-term debt and finance lease obligations (670) (669) Total long-term debt and finance lease obligations, less current portion $ 455,815 $ 405,191 _________________ 1 Comprised of principal amount outstanding, less unamortized discount and issuance costs. See Convertible Debt section below for additional information. Future contractual maturities of long-term debt, excluding finance leases, are as follows (in thousands): December 31 2022 $ — 2023 95,209 2024 — 2025 104,689 2026 301,597 Thereafter — Total $ 501,495 For information on our finance lease obligations, see footnote 12. ABL Facilities On December 18, 2020, we entered into an asset-based credit agreement (such agreement, as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”) led by Citibank, N.A., (“Citibank”), as agent, which provided for available borrowings up to $150.0 million (the “ABL Facility”). The ABL Facility was expected to mature and all outstanding amounts were to become due and payable on December 18, 2024. The Citi ABL Facility included a $50.0 million sublimit for letters of credit issuance and $35.0 million sublimit for swingline borrowings. Additionally, subject to certain conditions, including obtaining additional commitments, the Citi ABL Facility could have been increased by an amount not to exceed $50.0 million. On December 7, 2021, the Company entered into Amendment No. 2 (the “Citi ABL Amendment No. 2”) to the Citi Credit Agreement. Citi ABL Amendment No. 2, among other things, (i) revised the applicable margin to 4.25% for LIBOR rate advances, (ii) provided that at all times beginning on the effective date of the Citi ABL Amendment No. 2 and ending on the date Citibank shall have received and approved the borrowing base certificate for the calendar month ending December 31, 2021, the borrowing base shall not exceed the lesser of (a) the borrowing base calculated as set forth in the borrowing base certificate for the calendar month ending December 31, 2021 and (b) $108,500,000, (iii) establishes an interest reserve account for certain payments due under the Term Loan Credit Agreement, (iv) provides that after giving effect to any borrowing and any disbursements to be made by the Company with the proceeds of such borrowing, within one business day of such borrowing, the Company and its U.S. subsidiaries may not have more than $5 million cash on hand, (v) provides for weekly variance testing to be delivered to Citibank, (vi) requires the Company to have used all of the proceeds borrowed under the Subordinated Term Loan Credit Agreement prior to borrowing under the Citi Credit Agreement, and (vii) increases the amount of subordinated debt available to be incurred by the Company to account for (a) the additional $27.5 million borrowed under the Subordinated Term Loan Credit Agreement, (b) any additional amount borrowed under the Subordinated Term Loan Credit Agreement not to exceed $75 million in the aggregate, and (c) the payment of interest in the form of payment-in-kind interest with respect to the Initial Term Loans (as defined in the Subordinated Term Loan Credit Agreement). Our obligations under the Citi ABL Facility were guaranteed by certain of our direct and indirect subsidiaries, as set forth in the Citi ABL Facility agreement. The Citi ABL Facility was 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 was based on a percentage of the value of accounts receivable and inventory, reduced for certain reserves. Borrowings under the Citi ABL Facility bore 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. The Base Rate is defined as a fluctuating interest rate equal to the greatest of (i) the federal funds rate plus 0.50%, (ii) Citibank’s prime rate, and (iii) the one-month LIBOR rate plus 1.00%. The applicable margin for LIBOR borrowings was 4.25% and for Base Rate borrowings was 3.25%. The all-in Base Rate floor was 1.75% and for LIBOR rate borrowings, the LIBOR rate, exclusive of spread, had a 0.75% LIBOR rate floor. Interest was payable either (i) monthly for Base Rate borrowings or (ii) the last day of the interest period for LIBOR rate borrowings, as set forth in the Citi ABL Facility agreement. The fee for undrawn amounts ranged from 0.375% to 0.5%, depending on usage and was due quarterly. The Citi ABL Facility contained customary conditions to borrowings, events of default and covenants, including, but not limited to, covenants that restricted our ability to sell assets, make changes to the nature of our business, engage in mergers and acquisitions, incur, assume or permit to exist additional indebtedness and guarantees, create or permit to exist liens, pay dividends, issue equity instruments, make distribution or redeem or repurchase capital stock. In the event that our excess availability was less than the greater of (i) $15.0 million and (ii) 10.00% of the lesser of (1) the current borrowing base and (2) the commitments under the Citi ABL Facility then in effect, a consolidated fixed charge coverage ratio of at least 1.00 to 1.00 was required to be maintained. Upon the occurrence of certain events of default, an additional 2.0% interest could have been required on the outstanding loans under the Citi ABL Facility. On February 11, 2022, we entered into the ABL Credit Agreement. Available funding commitments to us under the ABL Credit Agreement, subject to certain conditions, include the Revolving Credit Loans in an amount of up to $130.0 million, with a $35.0 million sublimit for swingline borrowings and a $26.0 million sublimit for issuances of letters of credit, and incremental Delayed Draw Term Loans of up to $35.0 million to be provided by Corre. We had approximately $10.0 million of available borrowing capacity under the Delayed Draw Term Loans. The ABL Credit Facility matures and all outstanding amounts become due and payable on February 11, 2025. The proceeds of the loans under the ABL Credit Facility were used to, among other things, pay off the amounts owed under the Citi Credit Agreement, which was repaid and terminated in full on February 11, 2022. At March 31, 2022, we had $32.9 million of cash and cash equivalents and $20.8 million of restricted cash held as collateral for letters of credit and commercial card programs. About $2.3 million of cash is located in countries where currency restrictions exist. We had approximately $8.8 million of available borrowing capacity under the ABL Credit Facility. Direct and incremental costs associated with the issuance of the ABL Credit Facility were approximately $8.1 million and were capitalized as debt issuance costs. These costs are being amortized on a straight-line basis over the term of the ABL Facility. On May 6, 2022, we entered into the ABL Credit Agreement Amendment No. 1 which, among other things, modifies the Maturity Reserve Trigger Date (as defined in the ABL Credit Agreement) such that the date on which a reserve must, subject to certain conditions, be put into place with respect to the outstanding principal amount of the 5.00% Convertible Senior Notes due 2023 (the “Notes”) is 75 days prior to their maturity date instead of 120 days prior to their maturity date. Our obligations under the ABL Credit Agreement are guaranteed by certain of our direct and indirect subsidiaries (other than certain excluded subsidiaries) (the “ABL Guarantors” and, together with the Company, the “ABL Loan Parties”). Our obligations under the ABL Credit Facility are secured on a first priority basis by, among other things, accounts receivable, deposit accounts, securities accounts and inventory of the ABL Loan Parties and are secured on a second priority basis by substantially all of the other assets of the ABL Loan Parties. Availability under the revolving credit line under ABL Credit Facility is based on the percentage of the value of accounts receivable and inventory, as reduced by certain reserves. Revolving Credit Loans under the ABL Credit Facility bear interest through maturity at a variable rate based upon an annual rate of a LIBOR Rate (or a Base Rate (as defined below) if the LIBOR Rate is unavailable for any reason), plus an applicable margin (“LIBOR Rate Loan” and “Base Rate Loan”, respectively). The “Base Rate” is defined as a fluctuating interest rate equal to the greatest of (1) the federal funds rate plus 0.50%, (2) Wells Fargo Bank, National Association’s prime rate, and (3) the one-month LIBOR Rate. The “applicable margin” is defined as a rate of 3.15%, 3.40% or 3.65% for Base Rate Loans with a 2.00% Base Rate floor and a rate of 4.15%, 4.40% or 4.65% for LIBOR Rate Loans with a 1.00% LIBOR floor, in each case depending on the amount of EBITDA as of the most recent measurement period, as reported in a monthly compliance certificate. The Delayed Draw Term Loans shall bear interest through maturity at a rate of the LIBOR Rate plus 10.0%, with a 1.00% LIBOR floor. The fee for undrawn revolving amounts is 0.50% and the fee for undrawn Delayed Draw Term Loan amounts is 3.00%. Interest under the ABL Credit Facility is payable monthly. The Company will also be required to pay customary letter of credit fees, as necessary. The Company may make voluntary prepayments of the loans under the ABL Credit Facility from time to time, subject, in the case of the Delayed Draw Term Loans, to certain conditions. Mandatory prepayments are also required in certain circumstances, including with respect to the Delayed Draw Term Loan, if the ratio of aggregate value of the collateral under the ABL Credit Facility to the sum of the delayed draw term loans plus revolving facility usage outstanding is less than 130%. Amounts repaid may be re-borrowed, subject to compliance with the borrowing base and the other conditions set forth in the ABL Credit Agreement, subject, in the case of the Delayed Draw Term Loan s to a maximum of four such borrowings in any 12-month period. Certain permanent repayments of the ABL Credit Facility loans are subject to the payment of a premium of 2.00% during the first year of the facility, 1.00% during the second year of the facility, and 0.50% in the last year of the facility. The ABL Credit Agreement contains customary conditions to borrowings and covenants, including covenants that restrict our ability to sell assets, make changes to the nature of our business, engage in mergers or acquisitions, incur, assume or permit to exist additional indebtedness and guarantees, create or permit to exist liens, pay dividends, issue equity instruments, make distributions or redeem or repurchase capital stock or make other investments, engage in transactions with affiliates and make payments in respect of certain debt. The ABL Credit Agreement also requires that we will not exceed $20.0 million in unfinanced capital expenditures in any calendar year; provided that this requirement will not apply if we maintain a net leverage ratio of less than or equal to 4.00 to 1.00 as of the end of the second and fourth fiscal quarter of each calendar year. In addition, the ABL Credit Agreement includes customary events of default, the occurrence of which may require that we pay an additional 2.0% interest on the outstanding loans under the ABL Credit Agreement. Atlantic Park Term Loan On December 18, 2020, we also entered that certain Term Loan Credit Agreement with Atlantic Park Strategic Capital Fund, L.P., as agent (“APSC”), as lender (the “Term Loan Credit Agreement”), 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. However, certain conditions could result in an earlier maturity, including if the Notes have an aggregate principal amount outstanding of $10.0 million or more on the Maturity Trigger Date, in which case the Term Loan will terminate on the Maturity Trigger Date. As set forth in the Term Loan Credit Agreement, the Term Loan is secured by substantially all assets, other than those secured on a first lien basis by the ABL Credit Facility, and we may increase the Term Loan by an amount not to exceed $100.0 million. The Term Loan bears an interest through maturity at a variable rate based upon, at our option, an annual rate of either a Base rate or a LIBOR rate, plus an applicable margin. The Base rate is defined as a fluctuating interest rate equal to the greatest of (i) the federal funds rate plus 0.50%, (ii), the prime rate as specified in the Term Loan Credit Agreement, and (iii) one-month LIBOR rate plus 1.00%. The applicable margin is defined as a rate of 6.50% for Base rate borrowings with a 2.00% Base rate floor and 7.50% for LIBOR rate borrowings with a 1.00% LIBOR rate floor. Interest is payable either (i) monthly for Base rate borrowings or (ii) the last day of the interest period for LIBOR rate borrowings, as set forth in the Term Loan Credit Agreement. The loans under the Term Loan were issued with an original issue discount of 3.00%, and are, in whole or in part, prepayable any time and from time to time, at a prepayment premium (including a make whole during the first two years) specified in the Term Loan Credit Agreement (subject to certain exceptions), plus accrued and unpaid interest. The effective interest rate on the Term Loan at March 31, 2022 and December 31, 2021 was 12.22% and 20.90%, respectively. The Term Loan contains customary payment penalties, events of default and covenants, including but not limited to, covenants that restrict our ability to sell assets, make changes to the nature of our business, engage in mergers or acquisitions, incur additional indebtedness and guarantees, pay dividends, issue equity instruments and make distributions or redeem or repurchase capital stock. On October 19, 2021, we entered into Amendment No. 1 (the “First Amendment”) to the Term Loan Credit Agreement with the financial institutions party thereto from time to time (the “Lenders”) and APSC, as agent. The First Amendment, among other things, (i) deferred an October 19, 2021 interest payment until October 29, 2021; (ii) required that the Company use commercially reasonable efforts to appoint an additional independent director to our Board of Directors who is acceptable to the agent; (iii) provided the Lenders with additional information rights; and (iv) tightened certain negative covenants included in the Term Loan Credit Agreement until the deferred interest is made current. On October 29, 2021, we entered into Amendment No. 2 (the “Second Amendment”) to the Term Loan Credit Agreement with the Lenders and ASPC, as agent. The Second Amendment, among other things, (i) further deferred an October 29, 2021 interest payment until November 15, 2021; (ii) contained certain milestones; (iii) provided the Lenders with a ten-day right of first refusal regarding any refinancing of the Company’s obligations under the ABL Facility; (iv) obligated the Company to establish, pursuant to a charter to be adopted by the our Board of Directors and reasonably acceptable to the Agent, a special committee that shall have exclusive responsibility and authority to make recommendations to our Board of Directors regarding certain transactions; and (v) provided that the Company will not permit a covenant trigger event under the ABL Facility to occur. On November 8, 2021, we entered into Amendment No.3 (the “Third Amendment”) to the Term Loan Credit Agreement. The Third Amendment, among other things, (i) waived certain covenants until September 30, 2022 and modified covenants thereafter to provide us with more flexibility and (ii) required us to seek shareholder approval (or an exception therefrom) to issue additional warrants to APSC, providing for the purchase of an aggregate of 1,417,051 shares of our common stock (the “APSC Warrants”), and to amend the warrants issued in December 2020 to APSC to purchase up to 3,582,949 shares of our common stock, which was initially 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 “Existing Warrant”), to provide for, an exercise price of $1.50 per share. The Third Amendment also reduced the amount of principal outstanding on the Notes on the Maturity Trigger Date from $50.0 million to $10.0 million. On December 2, 2021, and December 7, 2021, respectively, we entered into Amendment No. 4 (the “Fourth Amendment”) to the Term Loan Credit Agreement and Amendment No. 5 (the “Fifth Amendment”) to the Term Loan Credit Agreement. The Fourth Amendment and the Fifth Amendment extended the date upon which the Company must issue the APSC Warrants to December 7, 2021, and December 8, 2021, respectively. The business purpose of these amendments was to further extend the Company’s liquidity runway while asset based lending field audit exams were completed in connection with the refinancing transactions completed on February 11, 2022. On February 11, 2022, we entered into Amendment No. 6 (the “Sixth Amendment”) to the Term Loan Credit Agreement. The Sixth Amendment, among other things and subject to the terms thereof, (i) permitted the entry into the ABL Credit Agreement, (ii) permitted certain interest payments due under the Term Loan Credit Agreement to be paid in kind, (iii) permitted certain asset sales and requires certain related mandatory prepayments, subject to an applicable prepayment premium, and (iv) amended the financial covenants, such that the maximum net leverage ratio of 7.00 to 1.00 will not be tested until the fiscal quarter ending March 31, 2023, and the Company is not permitted to exceed $20.0 million in unfinanced capital expenditures in any calendar year; provided, that such unfinanced capital expenditures limitation will not apply if the Company maintains a net leverage ratio of less than or equal to 4.00 to 1.00 as of the end of the second and fourth fiscal quarter of each calendar year. On May 6, 2022, we entered into Amendment No. 7 (the “Seventh Amendment”) to the Term Loan Credit Agreement. The Seventh Amendment, among other things and subject to the terms thereof, (i) modifies the Maturity Trigger Date (as defined in the Term Loan Credit Agreement) such that the date on which the maturity of the Term Loan Credit Agreement is triggered as a result of there being an aggregate principal amount of more than $10.0 million outstanding under the Notes is 75 days prior to their maturity date instead of 120 days prior to their maturity date, and (ii) amends the financial covenants, such that the maximum net leverage ratio to be tested for the fiscal quarter ending March 31, 2023 will be increased from 7.00 to 1.00 to 12.00 to 1.00. Subordinated Term Loan Credit Agreement On November 9, 2021, we entered into a credit agreement (the “Subordinated Term Loan Credit Agreement”) with Corre Credit Fund, LLC (“Corre Fund”), as agent, and the lenders party thereto providing for an unsecured $50.0 million delayed draw subordinated term loan facility (the “Subordinated Term Loan”). Pursuant to the Subordinated Term Loan Credit Agreement, we borrowed $22.5 million on November 9, 2021, and an additional $27.5 million on December 8, 2021. The Subordinated Term Loan matures, and all outstanding amounts become due and payable, on the earlier of December 31, 2026 and the date that is two weeks later than the maturity or full repayment of the Term Loan. The stated interest rate on the Subordinated Term Loan is 12%. Under the Subordinated Term Loan Credit Agreement, we are required to, among other things, (i) subject to certain conditions, issue the lenders Corre Warrants (described below), (ii) amend our charter, bylaws, and all other necessary corporate governance documents to reduce the size of our Board of Directors to seven directors, one of whom will include our Chief Executive Officer, and (iii) reconstitute our Board of Directors. The Subordinated Term Loan Credit Agreement also contains other customary prepayment provisions, events of default and covenants. On November 30, 2021, we entered into Amendment No. 1 (the “Corre Amendment 1”) to the Subordinated Term Loan Credit Agreement. The Corre Amendment 1 (i) extended the payment date for interest in the form of payment-in-kind interest (“PIK Interest”)with respect to the Initial Term Loans (as defined in the Subordinated Term Loan Credit Agreement), (ii) extended the date upon which the Company must deliver a fully executed ABL Consent (as defined in the Subordinated Term Loan Credit Agreement) to, in each case, 11:59 P.M. on December 6, 2021, and (iii) extended the date upon which we must issue the Corre Warrants to 11:59 P.M. on December 7, 2021. On December 6, 2021, we entered into Amendment No. 2 (the “Corre Amendment 2”) to the Subordinated Term Loan Credit Agreement. The Corre Amendment 2 (i) extended the payment date in the form of PIK Interest with respect to the Initial Term Loans, and (ii) extended the date upon which we must deliver a fully executed ABL Consent to, in each case, 11:59 P.M. on December 7, 2021. On December 7, 2021, we entered into Amendment No. 3 (the “Corre Amendment 3”) to the Subordinated Term Loan Credit Agreement. The Corre Amendment 3, among other things, (i) extended the payment date for interest in the form of PIK Interest with respect to the Initial Term Loans, (ii) extended the date upon which we must deliver a fully executed ABL Consent and (iii) extended the date upon which we must issue the Corre Warrants to, in each case, 11:59 P.M. on December 8, 2021. The business purpose of each of Corre Amendment 1, Corre Amendment 2 and Corre Amendment 3 was to further extend the liquidity runway of the Company and support ongoing negotiations of the financing transactions completed on February 11, 2022. On December 8, 2021, we entered into Amendment No. 4 (the “Corre Amendment 4”) to the Subordinated Term Loan Credit Agreement. The Corre Amendment 4 appointed Cantor Fitzgerald Securities as successor Agent. In connection with the transactions contemplated by the ABL Credit Agreement on February 11, 2022, Corre, agreed to provide the Company with the Incremental Financing, totaling approximately $55.0 million, consisting of (i) $35.0 million Delayed Draw Term Loans under the ABL Credit Facility; (ii) $10.0 million from Corre in the form of the February 2022 Delayed Draw Term Loan (as defined in the Subordinated Term Loan Credit Agreement) on a pari passu basis with the existing loans issued pursuant to the Subordinated Term Loan Credit Agreement; and (iii) $10.0 million through an issuance the PIPE Shares to the Corre Holders at a price of $0.84 per share. On February 11, 2022, we entered into Amendment No. 5 (the “Corre Amendment 5”) to the Subordinated Term Loan Credit Agreement with the lenders from time to time party thereto (including Corre), and Cantor Fitzgerald Securities, as agent. The Corre Amendment 5, among other things, (i) provided for an additional commitment of $10.0 million in subordinated delayed draw term loans to be available for borrowing by the Company until July 1, 2022, (ii) permitted the entry into the ABL Credit Facility, (iii) permitted certain asset sales and requires certain related mandatory prepayments, subject to an applicable prepayment premium, and (iv) amended the financial covenants, such that the maximum net leverage ratio of 7.00 to 1.00 will not be tested until the fiscal quarter ending March 31, 2023, and the Company is not permitted to exceed $20.0 million in unfinanced capital expenditures in any calendar year; provided, that such unfinanced capital expenditures limitation will not apply if the Company maintains a net leverage ratio of less than or equal to 4.00 to 1.00 as of the end of the second and fourth fiscal quarter of each calendar year. On May 6, 2022, we entered into Amendment No. 6 (the “Corre Amendment No. 6”) to the Subordinated Term Loan Credit Agreement with the lenders from time to time party thereto (including Corre), and Cantor Fitzgerald Securities, as agent. The Corre Amendment No. 6, among other things, amends the financial covenants, such that the maximum net leverage ratio to be tested for the fiscal quarter ending March 31, 2023 will be increased from 7.00 to 1.00 to 12.00 to 1.00. Our ability to maintain compliance with the financial covenants contained in the ABL Credit Agreement, the Term Loan Credit Agreement and the Subordinated Term Loan Credit Agreement is dependent upon our future operating performance and future financial condition, both of which are subject to various risks and uncertainties. The effects of the COVID-19 pandemic and the resulting economic repercussions could have a significant adverse effect on our financial position and business condition, as well as our clients and suppliers. Additionally, these events may, among other factors, impact our ability to generate cash flows from operations, access the capital markets on acceptable terms or at all, and affect our future need or ability to borrow under our ABL Credit Facility. In addition to our current sources of funding our business, the effects of such events may impact our liquidity or our need to revise our allocation or sources of capital, implement further cost reduction measures and/or change our business strategy. Although the COVID-19 pandemic and resulting economic repercussions could have a broad range of effects on our liquidity sources, the effects will depend on future developments and cannot be predicted at this time. In order to secure our casualty insurance programs, and certain other obligations 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. Related to our domestic operations, we were contingently liable for outstanding stand-by letters of credit totaling $23.5 million at December 31, 2021, but due to the closing of the ABL Credit Facility on February 11, 2022 those letters of credit are now cash secured as of March 31, 2022, with cash funded at closing from draws on the ABL Credit Facility. As of March 31, 2022 we have no letters of credit outstanding under the ABL Credit Facility. Outstanding letters of credit reduce amounts available under our ABL Credit Facility and are considered as having been funded for purposes of calculating our financial covenants. Internationally we have letters of credit outstanding in the amount of $0.3 million. Additionally, we have $1.2 million in Surety bonds outstanding and an additional $1.5 million in miscellaneous cash deposits securing leases or other required bank guarantees. Warrants On December 18, 2020, in connection with the execution of the Term Loan, we issued to APSC the Existing Warrant. In connection with execution of the Subordinated Term Loan Credit Agreement and Third Amendment, on November 9, 2021, we entered into an Amended and Restated Common Stock Purchase Warrant (the “A&R Warrant”) with APSC Holdco II, L.P. (“APSC Holdco”) pursuant to which the Existing Warrant was amended and restated to provide for the purchase of up to 4,082,949 shares of our common stock (which includes 500,000 of the shares of common stock issuable pursuant to the APSC Warrant) and to reduce the exercise price to $1.50 per share. In connection with execution of the Subordinated Term Loan Credit Agreement and the amendments to the Term Loan Credit Agreement, on December 8, 2021 we entered into the Second Amended and Restated Common Stock Purchase Warrant No. 1 (the “Second A&R Warrant”) with APSC Holdco, pursuant to which the A&R Warrant was amended and restated to provide for the purchase of up to 5,000,000 shares of our common stock (including 4,082,949 shares of our common stock issuable pursuant to the A&R Warrant) exercisable at the holder’s option at any time, in whole or in part, until December 8, 2028, at an exercise price of $1.50 per share, and (ii) entered into the Common Stock Purchase Warrants (together with the Second A&R Warrant, the “Warrants”) with each of Corre Opportunities Qualified Master Fund, LP, Corre Horizon Fund, LP, and Corre Horizon Fund II, LP providing for the purchase of an aggregate of 5,000,000 shares of our common stock, exercisable at such holder’s option at any time, in whole or in part, until December 8, 2028, at an exercise price of $1.50 per share. The exercise price and the number of shares of our common stock issuable on exercise of the Warrants are subject to certain antidilution adjustments, including for stock dividends, stock splits, reclassifications, noncash distributions, cash dividends, certain equity issuances and business combination transactions. In connection with the Subscription Agreement discussed below, on February 11, 2022, the Company, the Corre Holders and APSC Holdco entered into those certain Team, Inc. Waivers of Anti-Dilution Adjustments and Cash Transaction Exercise (collectively, the “Warrant Waivers”) with respect to each of the Warrants. Pursuant to the Warrant Waivers, the Corre Holders and APSC Holdco agreed with respect to such holders’ Warrant, subject to certain terms and conditions set forth therein (and for only so long as the applicable provisions remain in effect), among other things, (i) to irrevocably waive certain anti-dilution adjustments set forth in such Warrant in connection with the Proposed Equity Financing (as defined in the Warrant Waivers); (ii) to not exercise such Warrant, in whole or in part, if the Company determines that such exercise will cause an ownership change within the meaning of Section 382 of the Internal Revenue Code of 1986, as amended (assuming, among other things, that the ownership change threshold is 47% rather than 50%); and (iii) to only exercise such Warrant in a “cashless” or “net-issue” exercise. Subscription Agreement In connection with the Incremental Financing and Equity Issuance, on February 11, 2022, we entered into a common stock subscription agreement (the “Subscription Agreement”) with the Corre Holders, pursuant to which the Company issued and sold the PIPE Shares to the Corre Holders on February 11, 2022. Pursuant to the Subscription Agreement, subject to certain exceptions, each of the Corre Holders has agreed not to sell its portion of the PIPE Shares until the earliest to occur of (i) the date that is 180 days from the date of the Subscription Agreement, and (ii) such date on which the Company completes a liquidation, merger, stock exchange, reorganization or other similar transaction that results in all of the Company’s stockholders having the right to exchange their shares of our Common Stock for cash, securities or other property, without consent of the Company. Pursuant to and subject to the terms and conditions of the Subscription Agreement, our Board of Directors is required to create a vacancy for one qualified nominee of the Corre Holders to the Board, who shall be designated by the Corre Holders and qualify as an independent director (a “Board Nominee”), and the Board is required to appoint such initial Board Nominee as a Class II director within seven Convertible Debt Description of the Notes On July 31, 2017, we issued $230.0 million principal amount of senior unsecured 5.00% Convertible Senior Notes due 2023 in a private offering to qualified institutional buyers (as defined in the Securities Act of 1933 (the “Securities Act”)) pursuant to Rule 144A under the S |
LEASES
LEASES | 3 Months Ended |
Mar. 31, 2022 | |
Leases [Abstract] | |
LEASES | LEASES We adopted ASC 842, Leases, effective January 1, 2019 and elected the modified retrospective transition method. 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 twelve 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 14 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, 2022 2021 (unaudited) (unaudited) Operating lease costs $ 6,687 $ 7,239 Variable lease costs 1,459 1,276 Finance lease costs: Amortization of right-of-use assets 194 117 Interest on lease liabilities 88 78 Total lease cost $ 8,428 $ 8,710 Other information related to leases are as follows (in thousands): Three Months Ended March 31, 2022 2021 Supplemental cash flow information: (unaudited) (unaudited) Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 5,405 $ 5,356 Operating cash flows from finance leases 90 80 Financing cash flows from finance leases 162 78 Right-of-use assets obtained in exchange for lease obligations Operating leases 840 8,172 Finance leases 23 22 Amounts recognized in the condensed consolidated balance sheet are as follows (in thousands): March 31, 2022 December 31, 2021 Operating Leases: (unaudited) Operating lease right-of-use assets $ 56,403 $ 60,700 Current portion of operating lease obligations 15,306 16,176 Operating lease obligations (non-current) 45,742 49,221 Finance Leases: Property, plant and equipment, net $ 4,949 $ 5,123 Current portion of long-term debt and finance lease obligations 670 669 Long-term debt and finance lease obligations 4,840 4,980 Weighted average remaining lease term: Operating leases 6.0 years 6.0 years Finance leases 10.0 years 10.0 years Weighted average discount rate: Operating leases 6.9 % 6.8 % Finance leases 6.4 % 6.4 % As of March 31, 2022, we have no material additional operating and finance leases that have not yet commenced. As of March 31, 2022, future minimum lease payments under non-cancellable leases (including short-term leases) are as follows (in thousands): Operating Leases Finance Leases (unaudited) (unaudited) 2022 (Remainder of the year) $ 19,540 $ 990 2023 15,433 901 2024 12,183 740 2025 8,691 569 2026 6,869 555 Thereafter 18,397 4,003 Total future minimum lease payments 81,113 7,758 Less: Interest (20,065) (2,248) Present value of lease liabilities $ 61,048 $ 5,510 Total rent expense resulting from operating leases, including short-term leases, for the quarter ended March 31, 2022 and December 31, 2021 were $20.1 million and $39.4 million, respectively. |
LEASES | LEASES We adopted ASC 842, Leases, effective January 1, 2019 and elected the modified retrospective transition method. 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 twelve 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 14 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, 2022 2021 (unaudited) (unaudited) Operating lease costs $ 6,687 $ 7,239 Variable lease costs 1,459 1,276 Finance lease costs: Amortization of right-of-use assets 194 117 Interest on lease liabilities 88 78 Total lease cost $ 8,428 $ 8,710 Other information related to leases are as follows (in thousands): Three Months Ended March 31, 2022 2021 Supplemental cash flow information: (unaudited) (unaudited) Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 5,405 $ 5,356 Operating cash flows from finance leases 90 80 Financing cash flows from finance leases 162 78 Right-of-use assets obtained in exchange for lease obligations Operating leases 840 8,172 Finance leases 23 22 Amounts recognized in the condensed consolidated balance sheet are as follows (in thousands): March 31, 2022 December 31, 2021 Operating Leases: (unaudited) Operating lease right-of-use assets $ 56,403 $ 60,700 Current portion of operating lease obligations 15,306 16,176 Operating lease obligations (non-current) 45,742 49,221 Finance Leases: Property, plant and equipment, net $ 4,949 $ 5,123 Current portion of long-term debt and finance lease obligations 670 669 Long-term debt and finance lease obligations 4,840 4,980 Weighted average remaining lease term: Operating leases 6.0 years 6.0 years Finance leases 10.0 years 10.0 years Weighted average discount rate: Operating leases 6.9 % 6.8 % Finance leases 6.4 % 6.4 % As of March 31, 2022, we have no material additional operating and finance leases that have not yet commenced. As of March 31, 2022, future minimum lease payments under non-cancellable leases (including short-term leases) are as follows (in thousands): Operating Leases Finance Leases (unaudited) (unaudited) 2022 (Remainder of the year) $ 19,540 $ 990 2023 15,433 901 2024 12,183 740 2025 8,691 569 2026 6,869 555 Thereafter 18,397 4,003 Total future minimum lease payments 81,113 7,758 Less: Interest (20,065) (2,248) Present value of lease liabilities $ 61,048 $ 5,510 Total rent expense resulting from operating leases, including short-term leases, for the quarter ended March 31, 2022 and December 31, 2021 were $20.1 million and $39.4 million, respectively. |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 3 Months Ended |
Mar. 31, 2022 | |
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 stock options, restricted stock, stock units, stock appreciation rights, common stock or performance awards to officers, directors and key employees. At March 31, 2022, there were approximately 1.1 million restricted stock units, performance awards and stock options outstanding to officers, directors and key employees. The exercise price, terms and other conditions applicable to each form of share-based compensation under our plans are generally determined by the Compensation Committee of our Board at the time of grant and may vary. In May 2021, our shareholders approved the amendment and restatement to the 2018 Team, Inc. Equity Incentive Plan (the “2018 Plan”). The 2018 Plan replaced the 2016 Team, Inc. Equity Incentive Plan. The amendment and restatement to the 2018 Plan increased the shares available for issuance by 3.0 million shares of Common Stock. Shares issued in connection with our share-based compensation are issued out of authorized but unissued common stock. Compensation expense related to share-based compensation totaled a credit of $0.6 million and $2.3 million for the three months ended March 31, 2022 and 2021, respectively. The Company incurred a credit in the current period related to unvested share-based compensation associated with executive departures which exceeded the total costs expensed for the three month period ended March 31, 2022. Share-based compensation expense reflects an estimate of expected forfeitures. At March 31, 2022, $3.7 million of unrecognized compensation expense related to share-based compensation is expected to be recognized over a remaining weighted-average period of 1.5 years. 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 three Transactions involving our stock units and director stock grants for the three months ended March 31, 2022 are summarized below: Three Months Ended (unaudited) No. of Stock Weighted (in thousands) Stock and stock units, beginning of year 804 $ 7.27 Changes during the period: Granted 219 $ 1.64 Vested and settled — $ — Forfeited and cancelled (39) $ 6.28 Stock and stock units, end of period 984 $ 6.05 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 granted in 2019 (the “2019 Awards”), in 2020 (the “2020 Awards”) and in 2021 (the “2021 Awards”) are subject to a two-year performance period and a concurrent two-year service period. For the LTPSU awards, the performance goal is 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 2019 Awards 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. 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 a credit of $1.2 million and $0.8 million for the three months ended March 31, 2022 and 2021, respectively. Transactions involving our performance awards during the three months ended March 31, 2022 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 684 $ 6.30 219 $ 9.91 Changes during the period: Granted — $ — — $ — Vested and settled — $ — — $ — Cancelled (653) $ 6.04 (188) $ 9.61 Performance stock units, end of period 31 $ 11.69 31 $ 11.69 _________________ 1 Performance units with variable payouts are shown at target level of performance. Stock Options. We determine the fair value of each stock option at the grant date using a Black-Scholes model and recognize the resulting expense of our stock option awards over the period during which an employee is required to provide services in exchange for the awards, usually the vesting period. There was no compensation expense related to stock options for the periods ended March 31, 2022 or December 31, 2021. Our options typically vest in equal annual installments over a four-year service period. Expense related to an option grant is recognized on a straight-line basis over the specified vesting period for those options. Stock options generally have a ten-year term. |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 3 Months Ended |
Mar. 31, 2022 | |
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, 2022 2021 (unaudited) (unaudited) Interest cost $ 422 $ 322 Expected return on plan assets (629) (504) Amortization of prior service cost 8 9 Net periodic pension credit $ (199) $ (173) 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 $3.9 million to the U.K. Plan for 2022, of which $1.0 million has been contributed through March 31, 2022. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE LOSS | 3 Months Ended |
Mar. 31, 2022 | |
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 $ (23,287) $ — $ (3,277) $ (169) $ (26,732) $ (23,045) $ 2,988 $ (8,021) $ 400 $ (27,678) Other comprehensive loss 346 — — — 346 217 — — 102 319 Balance, end of period $ (22,940) $ — $ (3,277) $ (169) $ (26,386) $ (22,828) $ 2,988 $ (8,021) $ 502 $ (27,359) 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 346 — 346 217 102 319 Total $ 346 $ — $ 346 $ 217 $ 102 $ 319 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company, which will only be resolved when one or more future events occur or fail to occur. Team’s management and its legal counsel assess such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against us or unasserted claims that may result in such proceedings, Team’s legal counsel evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in our financial statements. If the assessment indicates that a potentially material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the nature of the guarantee would be disclosed. We accrue for contingencies where the occurrence of a material loss is probable and can be reasonably estimated, based on our best estimate of the expected liability. We may increase or decrease our legal accruals in the future, on a matter-by-matter basis, to account for developments in such matter. Because such matters are inherently unpredictable and unfavorable developments or outcomes can occur, assessing contingencies is highly subjective and requires judgments about future events. Notwithstanding the uncertainty as to the outcome and while our insurance coverage might not be available or adequate to cover these claims, based upon the information currently available, 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. 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. moved both the Thai and Esqueda actions to the United States District Court for the Central District of California. Plaintiff’s motion for remand was denied, and these matters remain in federal court. In November 2021, the parties agreed in principle to settle all claims in this litigation and all parties entered into a formal settlement agreement in March 2022. As part of the settlement agreement, the parties have agreed to remand the case to the Los Angeles Superior Court for approval of the settlement. All class action settlements of this nature are subject to approval of the court, which can take several months after the final settlement agreement is executed by the parties. The parties anticipate court approval of the settlement agreement in the third quarter of 2022. 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. The allegations largely relate to spent film developing solutions generated through our mobile radiographic inspection services and that the claims relate to the characterization and quantities of those wastes and related notices, reporting, training, and planning. On February 9, 2022, TEAM and the EPA agreed to settle all the claims related to this matter and the formal settlement agreement was finalized in April 2022 with our agreement to pay penalties totaling $0.2 million. Kelli Most Litigation - On November 13, 2018, Kelli Most filed a lawsuit against Team Industrial Services, Inc., individually and as a personal representative of the estate of Jesse Henson, in the 268th District Court of Fort Bend County, Texas (the “Most litigation”). The complaint asserted claims against Team for negligence resulting in the wrongful death of Jesse Henson. A jury trial commenced on this matter on May 4, 2021. On June 1, 2021, the jury rendered a verdict against Team for $222 million in compensatory damages. We believe that the jury verdict is not supported by the facts of the case or applicable law, is the result of significant trial error, and there are strong grounds for appeal. We will seek to overturn the verdict in post-trial motions before the District Court and, if necessary, to appeal to the Court of Appeals for the State of Texas. We intend to vigorously challenge the judgment through all appropriate post-trial motions and appeal processes. As a result, we believe that the likelihood that the amount of the judgment will be affirmed is not probable. We have taken into consideration the events that have occurred after the reporting period and before the financial statements were issued. We currently estimate a range of possible outcomes between $13 million and approximately $51 million, and we have accrued a liability as of March 31, 2022. which is the amount we believe is the most likely estimate for a probable loss on this matter. We have also recorded a related receivable from our third-party insurance providers in other current assets with the corresponding liability of the same amount in other accrued liabilities. Such amounts are treated as non-cash operating activities. The Most litigation is covered by our general liability and excess insurance policies which are occurrence based and subject to an aggregate $3 million self-insured retention and deductible. All retentions and deductibles have been met, accordingly, we believe pending the final settlement, all further claims will be fully funded by our insurance policies. We will continue to evaluate the possible outcomes of this case in light of future developments and their potential impact on factors relevant to our assessment of any possible loss. On January 25, 2022, the trial court signed a final judgment in favor of the plaintiff and against Team Industrial Services, Inc. Post-judgment motions challenging the judgment were filed on February 24, 2022 and were denied by the court on April 22, 2022. A notice of appeal was filed on April 25, 2022, and this case is currently pending in the Court of Appeals for the First District of Texas, in Houston. Simon, Vige, and Roberts Matter – On February 19, 2019, a personal injury claim was filed by the plaintiffs against several counterparties including Team Industrial Services Inc., in the 295th District Court of Harris County, Texas. The plaintiffs filed the action seeking monetary damages for personal injury, and emotional and mental distress. This matter was settled in July 2021. This claim is covered by our general liability and excess insurance policies which are occurrence based and subject to an aggregate $3 million self-insured retention and deductible. Accordingly, for all matters discussed above, we have accrued in the aggregate approximately $44 million as of March 31, 2022, of which approximately $5 million is not covered by our various insurance policies. In addition to legal matters discussed above, we are subject to various lawsuits, claims and proceedings encountered in the normal conduct of business (“Other Proceedings”). Management believes that based on its current knowledge and after consultation with legal counsel that the Other Proceedings, individually or in the aggregate, will not have a material effect on our consolidated financial statements. |
SEGMENT AND GEOGRAPHIC DISCLOSU
SEGMENT AND GEOGRAPHIC DISCLOSURES | 3 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
SEGMENT AND GEOGRAPHIC DISCLOSURES | SEGMENT AND GEOGRAPHIC DISCLOSURES ASC 280, Segment Reporting , requires we 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 2022 2021 (unaudited) (unaudited) Revenues: IHT $ 95,595 $ 91,139 MS 93,441 87,396 Quest Integrity 29,540 16,083 Total $ 218,576 $ 194,618 Three Months Ended 2022 2021 (unaudited) (unaudited) Operating income (loss): IHT $ 134 $ 364 MS 513 115 Quest Integrity 6,204 (252) Corporate and shared support services (23,054) (24,527) Total $ (16,203) $ (24,300) Three Months Ended 2022 2021 (unaudited) (unaudited) Capital expenditures 1 : IHT $ 4,771 $ 2,714 MS 813 1,152 Quest Integrity 1,009 406 Corporate and shared support services 38 125 Total $ 6,631 $ 4,397 _____________ 1 Excludes finance leases. Totals may vary from amounts presented in the consolidated statements of cash flows due to the timing of cash payments. Three Months Ended 2022 2021 (unaudited) (unaudited) Depreciation and amortization: IHT $ 3,254 $ 3,470 MS 4,884 5,439 Quest Integrity 577 712 Corporate and shared support services 1,316 1,338 Total $ 10,031 $ 10,959 Separate measures of our assets by operating segment are not produced or utilized by management to evaluate segment performance. A geographic breakdown of our revenues and our total long-lived assets for the three months ended March 31, 2022 and 2021 is as follows (unaudited, in thousands): Total Revenues 1 Total Long-lived Assets 2 Three months ended March 31, 2022 United States $ 151,679 $ 264,946 Canada 20,319 10,238 Europe 24,123 21,261 Other foreign countries 22,455 11,325 Total $ 218,576 $ 307,770 Three months ended March 31, 2021 United States $ 141,832 $ 289,790 Canada 16,494 9,804 Europe 25,711 26,253 Other foreign countries 10,581 9,134 Total $ 194,618 $ 334,981 ______________ 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, 2022 | |
Restructuring and Related Activities [Abstract] | |
RESTRUCTURING AND OTHER RELATED CHARGES | RESTRUCTURING AND OTHER RELATED CHARGES Our restructuring and other related charges, net for the periods ended March 31, 2022 and 2021 are summarized by segment as follows (in thousands): Three Months Ended 2022 2021 (unaudited) (unaudited) Operating Group Reorganization and other continuing restructuring measures Severance and related costs IHT $ 16 $ 283 MS — 139 Quest Integrity 233 Corporate and shared support services — 1,222 Total $ 16 $ 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, 2022, we incurred severance charges of $0.02 million, which represents costs incurred in 2022 as a result of the Operating Group Reorganization. For the twelve months ended December 31, 2021, we incurred severance charges of $2.9 million, which brings the cumulative costs incurred to date as a result of the Operating Group Reorganization of $2.9 million. A rollforward of our accrued severance liability associated with this reorganization is presented below (in thousands): Three Months Ended (unaudited) Balance, beginning of period $ 712 Charges 16 Payments (371) Balance, end of period $ 357 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2022 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONSAlvarez & Marsal provides certain consulting services to the Company in connection with our Interim CFO position and other corporate support costs. The Company paid $8.0 million in fees to Alvarez & Marsal for the year ended December 31, 2021, and $3.8 million for the quarter ended March 31, 2022. In connection with the Company’s debt transactions, the Company engaged in transactions with Corre and Atlantic Park to provide funding as described in Note 11. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTSRefer to Note 1 for information on the Recent Financing Transactions and Note 11 for information on the amendments to the various credit facilities we entered on May 6, 2022. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis for presentation | Basis for presentation. In the opinion of management, these unaudited 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, 2021 as filed with the Securities and Exchange Commission. |
Consolidation | Consolidation. The condensed consolidated financial statements include the accounts of our subsidiaries where we have control over operating and financial policies. All material intercompany accounts and transactions have been eliminated in consolidation. |
Related Party Transactions | Related Party Transactions. A related party transaction is any transaction, arrangement or relationship or series of similar transactions, arrangements or relationships (including the incurrence or issuance of any indebtedness or the guarantee of indebtedness) in which (1) the Company or any of its subsidiaries is a participant, and (2) any Related Party (as defined herein) has or will have a direct or indirect material interest. A Related Party is any person who is, or, at any time since the beginning of the Company’s last fiscal year, was (1) an executive officer, director or nominee for election as a director of the Company or any of its subsidiaries, (2) a person with greater than five percent (5%) beneficial interest in the Company, (3) an immediate family member of any of the individuals or entities identified in (1) or (2) of this paragraph, and (4) any firm, corporation or other entity in which any of the foregoing individuals or entities is employed or is a general partner or principal or in a similar position or in which such person or entity has a five percent (5%) or greater beneficial interest. Immediate family members includes a person’s spouse, parents, stepparents, children, stepchildren, siblings, mothers- and fathers-in-law, sons- and daughters-in-law, brothers- and sisters-in-law and anyone residing in such person’s home, other than a tenant or employee. |
Use of estimates | Use of estimates. Our accounting policies conform to GAAP. The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and judgments that affect our reported financial position and results of operations. We review significant estimates and judgments affecting our consolidated financial statements on a recurring basis and record the effect of any necessary adjustments prior to their publication. Estimates and judgments are based on information available at the time such estimates and judgments are made. Adjustments made with respect to the use of these estimates and judgments often relate to information not previously available. Uncertainties with respect to such estimates and judgments are inherent in the preparation of financial statements. Estimates and judgments are used in, among other things, (1) aspects of revenue recognition, (2) valuation of acquisition related tangible and intangible assets and assessments of all long-lived assets for possible impairment, (3) estimating various factors used to accrue liabilities for workers’ compensation, auto, medical, and general liability, (4) establishing an allowance for uncollectible accounts receivable, (5) estimating the useful lives of our assets, (6) assessing future tax exposure and the realization of tax assets, (7) 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. Our most significant accounting policies are described below. |
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. |
Cash and cash equivalents | Cash and cash equivalents . |
Inventory | Inventory. Except for certain inventories that are valued based on weighted-average cost, we use the first-in, first-out method to value our inventory. Inventory includes material, labor, and certain fixed overhead costs. Inventory is stated at the lower of cost and net realizable value. Inventory quantities on hand are reviewed periodically and carrying cost is reduced to net realizable value for inventories for which their cost exceeds their utility. The cost of inventories consumed or products sold are included in operating expenses. |
Property, plant and equipment | Property, plant and equipment. Property, plant and equipment are stated at cost less accumulated depreciation and amortization. Leasehold improvements are amortized over the shorter of their respective useful life or the lease term. Depreciation and amortization of assets are computed by the straight-line method over the following estimated useful lives of the assets: Classification Useful Life Buildings 20-40 years Enterprise Resource Planning (“ERP”) System 15 years Leasehold improvements 2-15 years Machinery and equipment 2-12 years Furniture and fixtures 2-10 years Computers and computer software 2-5 years Automobiles 2-5 years |
Goodwill | Goodwill and intangible assets. We allocate the purchase price of acquired businesses to their identifiable tangible assets and liabilities, such as accounts receivable, inventory, property, plant and equipment, accounts payable and accrued liabilities. We also allocate a portion of the purchase price to identifiable intangible assets, such as client relationships, non-compete agreements, trade names, technology, and licenses. Allocations are based on estimated fair values of assets and liabilities. We use all available information to estimate fair values including quoted market prices, the carrying value of acquired assets, and widely accepted valuation techniques such as discounted cash flows. Certain estimates and judgments are required in the application of the fair value techniques, including estimates of future cash flows, selling prices, replacement costs, economic lives, and the selection of a discount rate, as well as the use of “Level 3” measurements as defined in ASC 820. Deferred taxes are recorded for any differences between the assigned values and tax bases of assets and liabilities. Estimated deferred taxes are based on available information concerning the tax bases of assets acquired and liabilities assumed and loss carryforwards at the acquisition date, although such estimates may change in the future as additional information becomes known. Any remaining excess of cost over allocated fair values is recorded as goodwill. We typically engage third-party valuation experts to assist in determining the fair values for both the identifiable tangible and intangible assets. The judgments made in determining the estimated fair value assigned to each class of assets acquired and liabilities assumed, as well as asset lives, could materially impact our results of operations. Goodwill and intangible assets acquired in a 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. Each reporting unit has goodwill relating to past acquisitions. |
Income taxes | Income taxes. We follow the guidance of ASC 740 Income Taxes (“ASC 740”), which requires that we use the asset and liability method of accounting for deferred income taxes and provide deferred income taxes for all significant temporary differences. As part of the process of preparing our consolidated financial statements, we are required to estimate our income taxes in each of the jurisdictions in which we operate. This process involves estimating our actual current tax payable or receivable and related tax expense or benefit together with assessing temporary differences resulting from differing treatment of certain items, such as depreciation, for tax and accounting purposes. These differences can result in deferred tax assets and liabilities, which are included within our consolidated balance sheets. In accordance with ASC 740, we are required to assess the likelihood that our deferred tax assets will be realized and, to the extent we believe it is more likely than not (a likelihood of more than 50%) that some portion or all of the deferred tax assets will not be realized, we must establish a valuation allowance. We consider all available evidence to determine whether, based on the weight of the evidence, a valuation allowance is needed. Evidence used includes the reversal of existing taxable temporary differences, taxable income in prior carryback years if carryback is permitted by tax law, information about our current financial position and our results of operations for the current and preceding years, as well as all currently available information about future years, including our anticipated future performance and tax planning strategies. We regularly assess whether it is more likely than not that we will realize the deferred tax assets in the jurisdictions in which we operate. Management believes future sources of taxable income, reversing temporary differences and other tax planning strategies will be sufficient to realize the deferred tax assets for which no valuation allowance has been established. Our valuation allowance primarily relates to net operating loss carryforwards. While we have considered these factors in assessing the need for additional valuation allowance, there can be no assurance that additional valuation allowance would not need to be established in the future if information about future years change. Any changes in valuation allowance would impact our income tax provision and net income (loss) in the period in which such a determination is made. |
Workers’ compensation, auto, medical and general liability accruals | Workers’ compensation, auto, medical and general liability accruals. In accordance with ASC 450 Contingencies (“ASC 450”), we record a loss contingency when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. We review our loss contingencies on an ongoing basis to ensure that we have appropriate reserves recorded on our balance sheet. These reserves are based on historical experience with claims incurred but not received, estimates and judgments made by management, applicable insurance coverage for litigation matters, and are adjusted as circumstances warrant. For workers’ compensation, our self-insured retention is $1.0 million and our automobile liability self-insured retention is currently $1.0 million per occurrence. For general liability claims, we have an effective self-insured |
Allowance for credit losses | Allowance for credit losses. In the ordinary course of business, a portion of our accounts receivable are not collected due to billing disputes, customer bankruptcies, dissatisfaction with the services we performed and other various reasons. We establish an allowance to account for those accounts receivable that we estimate will eventually be deemed uncollectible. The allowance for credit losses is based on a combination of our historical experience and management’s review of long outstanding accounts receivable. |
Concentration of credit risk | Concentration of credit risk. No single customer accounts for more than 10% of consolidated revenues. |
Earnings (loss) per share | Earnings (loss) per share. Basic earnings (loss) per share is computed by dividing income (loss) from continuing operations, income (loss) from discontinued operations or net income (loss) by the weighted-average number of shares of common stock outstanding during the year. Diluted earnings (loss) per share is computed by dividing income (loss) from continuing operations, income (loss) from discontinued operations or net income (loss) by the sum of (1) the weighted-average number of shares of common stock outstanding during the period, (2) the dilutive effect of the assumed exercise of share-based compensation using the treasury stock method and (3) the dilutive effect of the assumed conversion of our Notes under the treasury stock method. Our current intent is to settle the principal amount of our 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 (the “conversion spread”). Accordingly, the conversion spread is included in the denominator for the computation of diluted earnings per common share using the treasury stock method and the numerator is adjusted for any recorded gain or loss, net of tax, on the embedded derivative associated with the conversion feature. For the three months ended March 31, 2022 and 2021, all outstanding share-based compensation awards were excluded from the calculation of diluted loss per share because their inclusion would be antidilutive due to the loss from continuing operations in those periods. Also, for the three months ended March 31, 2022 and 2021, the Notes were excluded from the calculation of diluted earnings (loss) per share since the conversion price exceeded the average price of our common stock during the applicable periods. For information regarding our Notes and our share-based compensation awards, refer to Note 11 and Note 14, respectively. |
Foreign currency | Foreign currency . For subsidiaries whose functional currency is not the U.S. Dollar, assets and liabilities are translated at period ending rates of exchange and revenues and expenses are translated at period average exchange rates. Translation adjustments for the asset and liability accounts are included as a separate component of accumulated other comprehensive loss in stockholders’ equity. Foreign currency transaction gains and losses are included in our statements of operations. |
Defined benefit pension plans | Defined benefit pension plans. Pension benefit costs and liabilities are dependent on assumptions used in calculating such amounts. The primary assumptions include factors such as discount rates, expected investment return on plan assets, mortality rates and retirement rates. These rates are reviewed annually and adjusted to reflect current conditions. These rates are determined based on reference to yields. The expected return on plan assets is derived from detailed periodic studies, which include a review of asset allocation strategies, anticipated future long-term performance of individual asset classes, risks (standard deviations) and correlations of returns among the asset classes that comprise the plans’ asset mix. While the studies give appropriate consideration to recent plan performance and historical returns, the assumptions are primarily long-term, prospective rates of return. Mortality and retirement rates are based on actual and anticipated plan experience. In accordance with GAAP, actual results that differ from the assumptions are accumulated and are subject to amortization over future periods and, therefore, generally affect recognized expense in future periods. While we believe that the assumptions used are appropriate, differences in actual experience or changes in assumptions may affect the pension obligation and future expense. |
Reclassifications | Reclassifications. Certain amounts in prior periods have been reclassified to conform to the current year presentation. Such reclassifications did not have any effect on our financial condition or results of operations as previously reported. |
Newly Adopted Accounting Standards and Accounting Standards Not Yet Adopted | Newly Adopted Accounting Standards 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. ASU 2019-12 clarifies and amends existing guidance related to intraperiod tax allocation and calculations, recognition of deferred taxes for change in ownership group, evaluation of a step-up in the tax basis of goodwill and other clarifications. Our adoption of this ASU as of January 1, 2021 did not have a material impact to our consolidated financial statements. 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 earnings per share for convertible instruments and requires the use of the if-converted method. On January 1, 2022, we adopted the ASU using the modified retrospective method. We recognized a cumulative effect of initially applying the ASU as an adjustment to the January 1, 2022 opening accumulated deficit balance. The prior period consolidated financial statements have not been retrospectively adjusted and continue to be reported under the accounting standards in effect for those periods. Refer to Note 11 - Long-Term Debt for impact on the adoption of this ASU as of January 1, 2022. Accounting Standards 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. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Estimated Useful Lives of Assets | Depreciation and amortization of assets are computed by the straight-line method over the following estimated useful lives of the assets: Classification Useful Life Buildings 20-40 years Enterprise Resource Planning (“ERP”) System 15 years Leasehold improvements 2-15 years Machinery and equipment 2-12 years Furniture and fixtures 2-10 years Computers and computer software 2-5 years Automobiles 2-5 years |
Non-Cash Investing and Financing Activities | Non-cash investing and financing activities are excluded from the consolidated statements of cash flows and are as follows (in thousands): Three Months Ended March 31, 2022 2021 (unaudited) Assets acquired under finance lease $ 23 $ 22 |
REVENUE (Tables)
REVENUE (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
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): Geographic area: Three Months Ended March 31, 2022 Three Months Ended March 31, 2021 (unaudited) (unaudited) United States and Canada Other Countries Total United States and Canada Other Countries Total Revenue: IHT $ 93,376 $ 2,219 $ 95,595 $ 89,225 $ 1,914 $ 91,139 MS 63,931 29,510 93,441 60,046 27,350 87,396 Quest Integrity 14,691 14,849 29,540 9,055 7,028 16,083 Total $ 171,998 $ 46,578 $ 218,576 $ 158,326 $ 36,292 $ 194,618 Three Months Ended March 31, 2022 (unaudited) Non-Destructive Evaluation and Testing Services Repair and Maintenance Services Heat Treating Other Total Revenue: IHT $ 76,449 $ 24 $ 13,839 $ 5,283 $ 95,595 MS — 91,770 57 1,614 93,441 Quest Integrity 29,540 — — — 29,540 Total $ 105,989 $ 91,794 $ 13,896 $ 6,897 $ 218,576 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 |
Contract with Customer, Asset and Liability | The following table provides information about trade accounts receivable, contract assets and contract liabilities as of March 31, 2022 and December 31, 2021 (in thousands): March 31, 2022 December 31, 2021 Change (unaudited) Trade accounts receivable, net 1 $ 207,779 $ 188,772 $ 19,007 Contract assets 2 $ 1,011 $ 1,602 $ (591) Contract liabilities 3 $ 1,588 $ 313 $ 1,275 _________________ 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, 2022 | |
Receivables [Abstract] | |
Summary of Accounts Receivable | A summary of accounts receivable as of March 31, 2022 and December 31, 2021 is as follows (in thousands): March 31, 2022 December 31, 2021 (unaudited) Trade accounts receivable $ 170,654 $ 161,751 Unbilled receivables 45,295 35,933 Allowance for credit losses (8,170) (8,912) Total $ 207,779 $ 188,772 |
Allowance for Credit Loss | The following table shows a rollforward of the allowance for credit losses (in thousands): March 31, 2022 December 31, 2021 (unaudited) Balance at beginning of period $ 8,912 $ 9,918 Provision for expected credit losses 66 2,193 Write-offs (830) (3,143) Foreign exchange effects 22 (56) Balance at end of period $ 8,170 $ 8,912 |
INVENTORY (Tables)
INVENTORY (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Inventory Disclosure [Abstract] | |
Summary of Inventory | A summary of inventory as of March 31, 2022 and December 31, 2021 is as follows (in thousands): March 31, 2022 December 31, 2021 (unaudited) Raw materials $ 8,050 $ 7,641 Work in progress 3,262 2,725 Finished goods 25,124 25,388 Total $ 36,436 $ 35,754 |
PREPAID AND OTHER CURRENT ASS_2
PREPAID AND OTHER CURRENT ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Other Current Assets | A summary of prepaid and other current assets as of March 31, 2022 and December 31, 2021 is as follows (in thousands): March 31, 2022 December 31, 2021 (unaudited) Insurance receivable $ 39,000 $ 39,000 Prepaid expenses 13,763 12,645 Other current assets 13,707 8,223 Total $ 66,470 $ 59,868 |
PROPERTY, PLANT AND EQUIPMENT (
PROPERTY, PLANT AND EQUIPMENT (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property, Plant and Equipment | A summary of property, plant and equipment as of March 31, 2022 and December 31, 2021 is as follows (in thousands): March 31, 2022 December 31, 2021 (unaudited) Land $ 5,208 $ 5,743 Buildings and leasehold improvements 57,902 58,972 Machinery and equipment 304,018 306,366 Furniture and fixtures 11,555 11,642 Capitalized ERP system development costs 45,917 45,917 Computers and computer software 22,281 22,243 Automobiles 4,326 4,356 Construction in progress 20,938 16,565 Total 472,145 471,804 Accumulated depreciation (311,956) (310,445) Property, plant and equipment, net $ 160,189 $ 161,359 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Intangible Assets | A summary of intangible assets as of March 31, 2022 and December 31, 2021 is as follows (in thousands): March 31, 2022 December 31, 2021 (unaudited) Gross Accumulated Net Gross Accumulated Net Customer relationships $ 175,130 $ (91,862) $ 83,268 $ 175,156 $ (88,783) $ 86,373 Non-compete agreements 5,509 (5,509) — 5,503 (5,503) — Trade names 24,710 (22,367) 2,343 24,743 (22,252) 2,491 Technology 7,834 (6,933) 901 7,843 (6,885) 958 Licenses 847 (787) 60 850 (774) 76 Total $ 214,030 $ (127,458) $ 86,572 $ 214,095 $ (124,197) $ 89,898 |
GOODWILL AND IMPAIRMENT CHARG_2
GOODWILL AND IMPAIRMENT CHARGES (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of rollforward goodwill | The following table presents a rollforward of goodwill for the three months ended March 31, 2022 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, 2021 $ 212,928 $ (212,928) $ — $ 109,938 $ (109,938) $ — $ 34,038 $ (8,795) $ 25,243 $ 356,904 $ (331,661) $ 25,243 FX Adjustments — — — — — — 6 — 6 6 — 6 Balance at March 31, 2022 $ 212,928 $ (212,928) $ — $ 109,938 $ (109,938) $ — $ 34,044 $ (8,795) $ 25,249 $ 356,910 $ (331,661) $ 25,249 |
OTHER ACCRUED LIABILITIES (Tabl
OTHER ACCRUED LIABILITIES (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Payables and Accruals [Abstract] | |
Summary of Other Accrued Liabilities | A summary of other accrued liabilities as of March 31, 2022 and December 31, 2021 is as follows (in thousands): March 31, 2022 December 31, 2021 (unaudited) Legal and professional accruals $ 47,073 $ 46,762 Payroll and other compensation expenses 44,513 44,284 Insurance accruals 5,880 7,314 Property, sales and other non-income related taxes 6,658 8,018 Accrued commission 1,398 1,111 Accrued interest 7,165 6,469 Other 11,303 7,141 Total $ 123,990 $ 121,099 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt | As of March 31, 2022 and December 31, 2021, our long-term debt and finance obligations are summarized as follows (in thousands): March 31, 2022 December 31, 2021 (unaudited) ABL Facilities $ 104,689 $ 62,000 Term Loan 216,043 214,191 Subordinated Term Loan 38,758 36,358 Total $ 359,490 $ 312,549 Convertible Debt 1 91,485 87,662 Finance lease obligations 5,510 5,649 Total debt and finance lease obligations $ 456,485 $ 405,860 Current portion of long-term debt and finance lease obligations (670) (669) Total long-term debt and finance lease obligations, less current portion $ 455,815 $ 405,191 _________________ 1 Comprised of principal amount outstanding, less unamortized discount and issuance costs. See Convertible Debt section below for additional information. |
Schedule of Future Contractual Maturities of Long-term Debt | Future contractual maturities of long-term debt, excluding finance leases, are as follows (in thousands): December 31 2022 $ — 2023 95,209 2024 — 2025 104,689 2026 301,597 Thereafter — Total $ 501,495 |
Convertible Debt | As of March 31, 2022 and December 31, 2021, the Notes were recorded in our condensed consolidated balance sheets as follows (in thousands): March 31, 2022 December 31, 2021 (unaudited) Liability component: Principal $ 95,209 $ 93,130 Unamortized issuance costs (1,435) (916) Unamortized discount (2,289) (4,552) Net carrying amount of the liability component 1 $ 91,485 $ 87,662 Equity component: Carrying amount of the equity component, net of issuance costs 2 $ — $ 7,969 Carrying amount of the equity component, net of issuance costs 3 $ 37,276 $ 37,276 _________________ 1 Included in the “Long-term debt and finance lease obligations” 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. 3 Relates to the portion of the Notes accounted for under ASC 815-15 (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 2022 2021 (unaudited) (unaudited) Coupon interest $ 1,568 $ 1,164 Amortization of debt discount and issuance costs 627 766 Total interest expense $ 2,195 $ 1,930 Effective interest rate 9.75 % 9.12 % |
Schedule of Error Corrections and Prior Period Adjustments | Accordingly, the cumulative effect of the changes made on our January 1, 2022 condensed consolidated balance sheet for the adoption of the ASU was as follows (in thousands): Balances at December 31, 2021 Adjustments from Adoption of ASU 2020-06 Balances at January 1, 2022 Liabilities Long-term debt and finance lease obligations $ 405,191 $ 1,827 $ 407,018 Equity Additional paid-in capital $ 444,824 $ (5,651) $ 439,173 Accumulated deficit $ (375,584) $ 3,824 $ (371,760) |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Leases [Abstract] | |
Lease, Cost | The components of lease expense are as follows (in thousands): Three Months Ended March 31, 2022 2021 (unaudited) (unaudited) Operating lease costs $ 6,687 $ 7,239 Variable lease costs 1,459 1,276 Finance lease costs: Amortization of right-of-use assets 194 117 Interest on lease liabilities 88 78 Total lease cost $ 8,428 $ 8,710 |
Schedule of Other Information Related to Leases | Other information related to leases are as follows (in thousands): Three Months Ended March 31, 2022 2021 Supplemental cash flow information: (unaudited) (unaudited) Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 5,405 $ 5,356 Operating cash flows from finance leases 90 80 Financing cash flows from finance leases 162 78 Right-of-use assets obtained in exchange for lease obligations Operating leases 840 8,172 Finance leases 23 22 |
Amounts Recognized in Balance Sheet for Leases | Amounts recognized in the condensed consolidated balance sheet are as follows (in thousands): March 31, 2022 December 31, 2021 Operating Leases: (unaudited) Operating lease right-of-use assets $ 56,403 $ 60,700 Current portion of operating lease obligations 15,306 16,176 Operating lease obligations (non-current) 45,742 49,221 Finance Leases: Property, plant and equipment, net $ 4,949 $ 5,123 Current portion of long-term debt and finance lease obligations 670 669 Long-term debt and finance lease obligations 4,840 4,980 Weighted average remaining lease term: Operating leases 6.0 years 6.0 years Finance leases 10.0 years 10.0 years Weighted average discount rate: Operating leases 6.9 % 6.8 % Finance leases 6.4 % 6.4 % |
Schedule of Finance Lease Liability | As of March 31, 2022, future minimum lease payments under non-cancellable leases (including short-term leases) are as follows (in thousands): Operating Leases Finance Leases (unaudited) (unaudited) 2022 (Remainder of the year) $ 19,540 $ 990 2023 15,433 901 2024 12,183 740 2025 8,691 569 2026 6,869 555 Thereafter 18,397 4,003 Total future minimum lease payments 81,113 7,758 Less: Interest (20,065) (2,248) Present value of lease liabilities $ 61,048 $ 5,510 |
Schedule of Operating Lease Liability | As of March 31, 2022, future minimum lease payments under non-cancellable leases (including short-term leases) are as follows (in thousands): Operating Leases Finance Leases (unaudited) (unaudited) 2022 (Remainder of the year) $ 19,540 $ 990 2023 15,433 901 2024 12,183 740 2025 8,691 569 2026 6,869 555 Thereafter 18,397 4,003 Total future minimum lease payments 81,113 7,758 Less: Interest (20,065) (2,248) Present value of lease liabilities $ 61,048 $ 5,510 |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Summary of Transactions Involving Stock Units and Director Stock Grants | Transactions involving our stock units and director stock grants for the three months ended March 31, 2022 are summarized below: Three Months Ended (unaudited) No. of Stock Weighted (in thousands) Stock and stock units, beginning of year 804 $ 7.27 Changes during the period: Granted 219 $ 1.64 Vested and settled — $ — Forfeited and cancelled (39) $ 6.28 Stock and stock units, end of period 984 $ 6.05 |
Summary of Transactions Involving Performance Awards | Transactions involving our performance awards during the three months ended March 31, 2022 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 684 $ 6.30 219 $ 9.91 Changes during the period: Granted — $ — — $ — Vested and settled — $ — — $ — Cancelled (653) $ 6.04 (188) $ 9.61 Performance stock units, end of period 31 $ 11.69 31 $ 11.69 _________________ |
EMPLOYEE BENEFIT PLANS (Tables)
EMPLOYEE BENEFIT PLANS (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
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, 2022 2021 (unaudited) (unaudited) Interest cost $ 422 $ 322 Expected return on plan assets (629) (504) Amortization of prior service cost 8 9 Net periodic pension credit $ (199) $ (173) |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
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 $ (23,287) $ — $ (3,277) $ (169) $ (26,732) $ (23,045) $ 2,988 $ (8,021) $ 400 $ (27,678) Other comprehensive loss 346 — — — 346 217 — — 102 319 Balance, end of period $ (22,940) $ — $ (3,277) $ (169) $ (26,386) $ (22,828) $ 2,988 $ (8,021) $ 502 $ (27,359) |
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 346 — 346 217 102 319 Total $ 346 $ — $ 346 $ 217 $ 102 $ 319 |
SEGMENT AND GEOGRAPHIC DISCLO_2
SEGMENT AND GEOGRAPHIC DISCLOSURES (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
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 2022 2021 (unaudited) (unaudited) Revenues: IHT $ 95,595 $ 91,139 MS 93,441 87,396 Quest Integrity 29,540 16,083 Total $ 218,576 $ 194,618 Three Months Ended 2022 2021 (unaudited) (unaudited) Operating income (loss): IHT $ 134 $ 364 MS 513 115 Quest Integrity 6,204 (252) Corporate and shared support services (23,054) (24,527) Total $ (16,203) $ (24,300) Three Months Ended 2022 2021 (unaudited) (unaudited) Capital expenditures 1 : IHT $ 4,771 $ 2,714 MS 813 1,152 Quest Integrity 1,009 406 Corporate and shared support services 38 125 Total $ 6,631 $ 4,397 _____________ 1 Excludes finance leases. Totals may vary from amounts presented in the consolidated statements of cash flows due to the timing of cash payments. Three Months Ended 2022 2021 (unaudited) (unaudited) Depreciation and amortization: IHT $ 3,254 $ 3,470 MS 4,884 5,439 Quest Integrity 577 712 Corporate and shared support services 1,316 1,338 Total $ 10,031 $ 10,959 |
Geographic Breakdown of Revenues | A geographic breakdown of our revenues and our total long-lived assets for the three months ended March 31, 2022 and 2021 is as follows (unaudited, in thousands): Total Revenues 1 Total Long-lived Assets 2 Three months ended March 31, 2022 United States $ 151,679 $ 264,946 Canada 20,319 10,238 Europe 24,123 21,261 Other foreign countries 22,455 11,325 Total $ 218,576 $ 307,770 Three months ended March 31, 2021 United States $ 141,832 $ 289,790 Canada 16,494 9,804 Europe 25,711 26,253 Other foreign countries 10,581 9,134 Total $ 194,618 $ 334,981 ______________ 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, 2022 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Costs | Our restructuring and other related charges, net for the periods ended March 31, 2022 and 2021 are summarized by segment as follows (in thousands): Three Months Ended 2022 2021 (unaudited) (unaudited) Operating Group Reorganization and other continuing restructuring measures Severance and related costs IHT $ 16 $ 283 MS — 139 Quest Integrity 233 Corporate and shared support services — 1,222 Total $ 16 $ 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 $ 712 Charges 16 Payments (371) Balance, end of period $ 357 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES - Additional Information (Detail) | May 06, 2022USD ($) | May 05, 2022 | Feb. 11, 2022USD ($)$ / sharesshares | Mar. 31, 2022USD ($)profile | Mar. 31, 2022USD ($)profileperformance_condition | Mar. 31, 2022USD ($)profilesegment | Mar. 31, 2021USD ($) | Dec. 31, 2021USD ($) | May 10, 2022 | Jan. 31, 2022USD ($) | Dec. 18, 2020USD ($) | Jul. 31, 2017USD ($) |
Significant Accounting Policies [Line Items] | ||||||||||||
Number of operating segments | 3 | 3 | ||||||||||
Number of client demand profiles | profile | 3 | 3 | 3 | |||||||||
Deferred employer payroll taxes | $ 7,100,000 | $ 7,100,000 | $ 7,100,000 | $ 14,100,000 | $ 7,000,000 | |||||||
Selling, general and administrative expenses | 71,285,000 | $ 66,124,000 | ||||||||||
Workers compensation our self-insured retention | 1,000,000 | |||||||||||
Automobile liability self-insured retention | 1,000,000 | |||||||||||
General liability claims we have an effective self-insured retention | 1,000,000 | |||||||||||
General liability claims, deductible per occurrence | 2,000,000 | $ 2,000,000 | $ 2,000,000 | |||||||||
Medical claims, our self-insured retention | 400,000 | |||||||||||
Environmental liability claims, our self-insured retention | 1,000,000 | |||||||||||
Accrued capital expenditures | $ 3,600,000 | $ 2,400,000 | ||||||||||
PIPE Shares | ||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||
Consideration received from sale of stock | $ 10,000,000 | |||||||||||
Shares issued (in shares) | shares | 11,904,762 | |||||||||||
Price per share (in dollars per share) | $ / shares | $ 0.84 | |||||||||||
Term Loan | ||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||
Principal amount, long-term debt issued | $ 250,000,000 | |||||||||||
Covenant, leverage ratio, maximum | 7 | |||||||||||
Interest rate on convertible debt | 12.22% | 12.22% | 12.22% | 20.90% | ||||||||
Term Loan | Subsequent Event | ||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||
Principal amount, long-term debt issued | $ 10,000,000 | |||||||||||
Outstanding principle, days prior to maturity | 120 days | 75 days | ||||||||||
Covenant, leverage ratio, maximum | 12 | 12 | ||||||||||
COVID-19 | ||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||
Operating expenses | $ 600,000 | 2,000,000 | ||||||||||
Selling, general and administrative expenses | 100,000 | $ 400,000 | ||||||||||
Line of Credit | Revolving Credit Facility | ||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||
Borrowing capacity | $ 130,000,000 | |||||||||||
Covenant, leverage ratio, maximum | 4 | |||||||||||
Line of Credit | Bridge Loan | ||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||
Borrowing capacity | $ 35,000,000 | |||||||||||
Line of Credit | Letter of Credit | ||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||
Borrowing capacity | 26,000,000 | |||||||||||
Line of Credit | Letter of Credit | ABL Facility | ||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||
Borrowing capacity | $ 150,000,000 | |||||||||||
Line of Credit | Letter of Credit | ABL Facility | Subsequent Event | ||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||
Outstanding principle, days prior to maturity | 120 days | 75 days | ||||||||||
Secured Debt | ||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||
Principal amount, long-term debt issued | 55,000,000 | |||||||||||
Secured Debt | Delayed Draw Term Loan | ||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||
Principal amount, long-term debt issued | 35,000,000 | |||||||||||
Secured Debt | Delayed Draw Term Loan | Corre | ||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||
Principal amount, long-term debt issued | 10,000,000 | |||||||||||
Subordinated Debt | Delayed Draw Term Loan | ||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||
Principal amount, long-term debt issued | $ 10,000,000 | |||||||||||
Covenant, leverage ratio, maximum | 7 | |||||||||||
Subordinated Debt | Delayed Draw Term Loan | Subsequent Event | ||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||
Covenant, leverage ratio, maximum | 12 | |||||||||||
Convertible debt | ||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||
Principal amount, long-term debt issued | $ 95,200,000 | $ 95,200,000 | $ 95,200,000 | $ 230,000,000 | ||||||||
Interest rate on convertible debt | 5.00% | 5.00% | 5.00% | 5.00% | ||||||||
Fair Value, Inputs, Level 2 | Convertible debt | ||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||
Fair value of our convertible senior notes | $ 86,100,000 | $ 86,100,000 | $ 86,100,000 | $ 84,000,000 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES - Estimated Useful Lives of Assets (Detail) | 3 Months Ended |
Mar. 31, 2022 | |
Enterprise Resource Planning (“ERP”) System | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of the assets | 15 years |
Minimum | Buildings | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of the assets | 20 years |
Minimum | Leasehold improvements | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of the assets | 2 years |
Minimum | Machinery and equipment | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of the assets | 2 years |
Minimum | Furniture and fixtures | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of the assets | 2 years |
Minimum | Computers and computer software | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of the assets | 2 years |
Minimum | Automobiles | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of the assets | 2 years |
Maximum | Buildings | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of the assets | 40 years |
Maximum | Leasehold improvements | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of the assets | 15 years |
Maximum | Machinery and equipment | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of the assets | 12 years |
Maximum | Furniture and fixtures | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of the assets | 10 years |
Maximum | Computers and computer software | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of the assets | 5 years |
Maximum | Automobiles | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of the assets | 5 years |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES - Non-Cash Investing and Financing Activities (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Accounting Policies [Abstract] | ||
Assets acquired under finance lease | $ 23 | $ 22 |
REVENUE - Disaggregation of Rev
REVENUE - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 218,576 | $ 194,618 |
Non-Destructive Evaluation and Testing Services | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 105,989 | 87,613 |
Repair and Maintenance Services | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 91,794 | 86,057 |
Heat Treating | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 13,896 | 14,144 |
Other | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 6,897 | 6,804 |
United States and Canada | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 171,998 | 158,326 |
Other Countries | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 46,578 | 36,292 |
IHT | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 95,595 | 91,139 |
IHT | Non-Destructive Evaluation and Testing Services | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 76,449 | 71,530 |
IHT | Repair and Maintenance Services | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 24 | 81 |
IHT | Heat Treating | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 13,839 | 13,455 |
IHT | Other | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 5,283 | 6,073 |
IHT | United States and Canada | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 93,376 | 89,225 |
IHT | Other Countries | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 2,219 | 1,914 |
MS | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 93,441 | 87,396 |
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 | 91,770 | 85,976 |
MS | Heat Treating | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 57 | 689 |
MS | Other | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 1,614 | 731 |
MS | United States and Canada | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 63,931 | 60,046 |
MS | Other Countries | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 29,510 | 27,350 |
Quest Integrity | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 29,540 | 16,083 |
Quest Integrity | Non-Destructive Evaluation and Testing Services | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 29,540 | 16,083 |
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 | 14,691 | 9,055 |
Quest Integrity | Other Countries | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 14,849 | $ 7,028 |
REVENUE - Contract Balances (De
REVENUE - Contract Balances (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Dec. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | ||
Trade accounts receivable, net | $ 207,779 | $ 188,772 |
Contract assets | 1,011 | 1,602 |
Contract liabilities | 1,588 | $ 313 |
Change in trade accounts receivable, net | 19,007 | |
Change in contract assets | (591) | |
Change in contract liability | 1,275 | |
Contract asset, decrease from beginning of period | (600) | |
Increase in contract liability | $ 1,300 |
RECEIVABLES - Summary of Accoun
RECEIVABLES - Summary of Accounts Receivable (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Receivables [Abstract] | |||
Trade accounts receivable | $ 170,654 | $ 161,751 | |
Unbilled receivables | 45,295 | 35,933 | |
Allowance for credit losses | (8,170) | (8,912) | $ (9,918) |
Total | $ 207,779 | $ 188,772 | |
Accounts receivable, payment terms | 30 days |
RECEIVABLES - Summary of Activi
RECEIVABLES - Summary of Activity in Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
Balance at beginning of period | $ 8,912 | $ 9,918 |
Provision for expected credit losses | 66 | 2,193 |
Write-offs | (830) | (3,143) |
Foreign exchange effects | 22 | (56) |
Balance at end of period | $ 8,170 | $ 8,912 |
INVENTORY (Details)
INVENTORY (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 8,050 | $ 7,641 |
Work in progress | 3,262 | 2,725 |
Finished goods | 25,124 | 25,388 |
Total | $ 36,436 | $ 35,754 |
PREPAID AND OTHER CURRENT ASS_3
PREPAID AND OTHER CURRENT ASSETS (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Insurance receivable | $ 39,000 | $ 39,000 |
Prepaid expenses | 13,763 | 12,645 |
Other current assets | 13,707 | 8,223 |
Total | $ 66,470 | $ 59,868 |
PROPERTY, PLANT AND EQUIPMENT_2
PROPERTY, PLANT AND EQUIPMENT (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | |||
Total | $ 472,145 | $ 471,804 | |
Accumulated depreciation | (311,956) | (310,445) | |
Property, plant and equipment, net | 160,189 | 161,359 | |
Assets under finance leases | 6,700 | 6,700 | |
Accumulated amortization for assets under finance leases | 1,700 | 1,600 | |
Depreciation expense | 6,500 | $ 7,500 | |
Land | |||
Property, Plant and Equipment [Line Items] | |||
Total | 5,208 | 5,743 | |
Buildings and leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Total | 57,902 | 58,972 | |
Machinery and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Total | 304,018 | 306,366 | |
Furniture and fixtures | |||
Property, Plant and Equipment [Line Items] | |||
Total | 11,555 | 11,642 | |
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 | 22,281 | 22,243 | |
Automobiles | |||
Property, Plant and Equipment [Line Items] | |||
Total | 4,326 | 4,356 | |
Construction in progress | |||
Property, Plant and Equipment [Line Items] | |||
Total | $ 20,938 | $ 16,565 |
INTANGIBLE ASSETS - Summary of
INTANGIBLE ASSETS - Summary of Intangible Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 214,030 | $ 214,095 |
Accumulated Amortization | (127,458) | (124,197) |
Net Carrying Amount | 86,572 | 89,898 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 175,130 | 175,156 |
Accumulated Amortization | (91,862) | (88,783) |
Net Carrying Amount | 83,268 | 86,373 |
Non-compete agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 5,509 | 5,503 |
Accumulated Amortization | (5,509) | (5,503) |
Net Carrying Amount | 0 | 0 |
Trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 24,710 | 24,743 |
Accumulated Amortization | (22,367) | (22,252) |
Net Carrying Amount | 2,343 | 2,491 |
Technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 7,834 | 7,843 |
Accumulated Amortization | (6,933) | (6,885) |
Net Carrying Amount | 901 | 958 |
Licenses | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 847 | 850 |
Accumulated Amortization | (787) | (774) |
Net Carrying Amount | $ 60 | $ 76 |
INTANGIBLE ASSETS - Additional
INTANGIBLE ASSETS - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization expense of intangible assets | $ 3.5 | $ 3.4 | |
Finite-lived intangible asset, expected amortization, remainder of 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 | ||
Intangible assets, estimated weighted average useful life | 13 years 8 months 12 days | 13 years 8 months 12 days |
GOODWILL AND IMPAIRMENT CHARG_3
GOODWILL AND IMPAIRMENT CHARGES - Additional Information (Details) - USD ($) | 3 Months Ended | ||
Dec. 31, 2021 | Sep. 30, 2021 | Mar. 31, 2022 | |
Goodwill [Line Items] | |||
Goodwill | $ 25,243,000 | $ 25,249,000 | |
MS | |||
Goodwill [Line Items] | |||
Goodwill impairment charges | $ 55,800,000 | ||
Goodwill | 0 | 0 | |
IHT | |||
Goodwill [Line Items] | |||
Goodwill | 0 | 0 | |
Quest Integrity | |||
Goodwill [Line Items] | |||
Goodwill impairment charges | 8,800,000 | ||
Goodwill | $ 25,243,000 | $ 25,249,000 |
GOODWILL AND IMPAIRMENT CHARG_4
GOODWILL AND IMPAIRMENT CHARGES (Details) | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Goodwill [Roll Forward] | |
Goodwill, Gross, beginning balance | $ 356,904,000 |
Accumulated Impairment, beginning balance | (331,661,000) |
Goodwill, Net, beginning balance | 25,243,000 |
FX Adjustments | 6,000 |
Goodwill, Gross, ending balance | 356,910,000 |
Accumulated Impairment, ending balance | (331,661,000) |
Goodwill, Net, ending balance | 25,249,000 |
IHT | |
Goodwill [Roll Forward] | |
Goodwill, Gross, beginning balance | 212,928,000 |
Accumulated Impairment, beginning balance | (212,928,000) |
Goodwill, Net, beginning balance | 0 |
Goodwill, Gross, ending balance | 212,928,000 |
Accumulated Impairment, ending balance | (212,928,000) |
Goodwill, Net, ending balance | 0 |
MS | |
Goodwill [Roll Forward] | |
Goodwill, Gross, beginning balance | 109,938,000 |
Accumulated Impairment, beginning balance | (109,938,000) |
Goodwill, Net, beginning balance | 0 |
Goodwill, Gross, ending balance | 109,938,000 |
Accumulated Impairment, ending balance | (109,938,000) |
Goodwill, Net, ending balance | 0 |
Quest Integrity | |
Goodwill [Roll Forward] | |
Goodwill, Gross, beginning balance | 34,038,000 |
Accumulated Impairment, beginning balance | (8,795,000) |
Goodwill, Net, beginning balance | 25,243,000 |
FX Adjustments | 6,000 |
Goodwill, Gross, ending balance | 34,044,000 |
Accumulated Impairment, ending balance | (8,795,000) |
Goodwill, Net, ending balance | $ 25,249,000 |
OTHER ACCRUED LIABILITIES (Deta
OTHER ACCRUED LIABILITIES (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Payables and Accruals [Abstract] | ||
Legal and professional accruals | $ 47,073 | $ 46,762 |
Payroll and other compensation expenses | 44,513 | 44,284 |
Insurance accruals | 5,880 | 7,314 |
Property, sales and other non-income related taxes | 6,658 | 8,018 |
Accrued commission | 1,398 | 1,111 |
Accrued interest | 7,165 | 6,469 |
Other | 11,303 | 7,141 |
Total | $ 123,990 | $ 121,099 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2022 | Sep. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | ||||
(Provision) benefit for income taxes | $ 356 | $ (355) | ||
Effective tax rate (benefit) provision | 1.10% | 1.00% |
LONG-TERM DEBT - Long-Term Debt
LONG-TERM DEBT - Long-Term Debt Balances (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Jan. 01, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | |||
Total long-term debt and finance lease obligations | $ 456,485 | $ 405,860 | |
Finance lease obligations | 5,510 | ||
Current portion of long-term debt and finance lease obligations | (670) | (669) | |
Long-term debt and finance lease obligations | 455,815 | $ 407,018 | 405,191 |
Secured Debt | |||
Debt Instrument [Line Items] | |||
Total long-term debt and finance lease obligations | 359,490 | 312,549 | |
Secured Debt | Term Loan | |||
Debt Instrument [Line Items] | |||
Total long-term debt and finance lease obligations | 216,043 | 214,191 | |
Subordinated Debt | Subordinated Term Loan | |||
Debt Instrument [Line Items] | |||
Total long-term debt and finance lease obligations | 38,758 | 36,358 | |
Convertible debt | |||
Debt Instrument [Line Items] | |||
Total long-term debt and finance lease obligations | 91,485 | 87,662 | |
Finance lease obligations | |||
Debt Instrument [Line Items] | |||
Finance lease obligations | 5,510 | 5,649 | |
Revolving Credit Facility | ABL Facility | |||
Debt Instrument [Line Items] | |||
Total long-term debt and finance lease obligations | $ 104,689 | $ 62,000 |
LONG-TERM DEBT - Schedule of Fu
LONG-TERM DEBT - Schedule of Future Maturities of Long-term Debt (Detail) $ in Thousands | Mar. 31, 2022USD ($) |
Maturities of long-term debt, excluding finance leases [Abstract] | |
2022 | $ 0 |
2023 | 95,209 |
2024 | 0 |
2025 | 104,689 |
2026 | 301,597 |
Thereafter | 0 |
Total | $ 501,495 |
LONG-TERM DEBT - Facility, Addi
LONG-TERM DEBT - Facility, Additional Information (Details) | May 06, 2022USD ($) | May 05, 2022 | Feb. 11, 2022USD ($)borrowing | Dec. 07, 2021USD ($) | Mar. 31, 2022USD ($) | May 10, 2022 | Dec. 31, 2021USD ($) | Dec. 18, 2020USD ($) |
Debt Instrument [Line Items] | ||||||||
Maximum capacity available | $ 15,000,000 | |||||||
Maximum percent of current borrowing base allowed | 0.1000 | |||||||
Additional interest rate potentially required | 0.020 | |||||||
Cash and cash equivalents | $ 53,698,000 | $ 65,315,000 | ||||||
Secured Debt | ||||||||
Debt Instrument [Line Items] | ||||||||
Principal amount, long-term debt issued | $ 55,000,000 | |||||||
ABL Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum borrowing base | $ 108,500,000 | |||||||
Maximum cash on hand | $ 5,000,000 | |||||||
Fixed charge coverage ratio, minimum | 1 | |||||||
Available borrowing capacity | $ 8,800,000 | |||||||
Cash and cash equivalents | 32,900,000 | |||||||
Restricted cash | 2,300,000 | |||||||
Debt issuance costs, net | $ 8,100,000 | |||||||
ABL Facility | Minimum | ||||||||
Debt Instrument [Line Items] | ||||||||
Commitment fee percentage | 0.375% | |||||||
ABL Facility | Maximum | ||||||||
Debt Instrument [Line Items] | ||||||||
Commitment fee percentage | 0.50% | |||||||
ABL Facility | Base Rate, including Federal Funds spread | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 0.50% | |||||||
ABL Facility | Base Rate, including LIBOR spread | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 1.00% | |||||||
ABL Facility | Base Rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 3.25% | |||||||
ABL Facility | Base Rate | Minimum | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 4.25% | |||||||
ABL Facility | LIBOR | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 0.75% | |||||||
ABL Facility | LIBOR | Minimum | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 1.75% | |||||||
ABL Facility | LIBOR | Maximum | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 4.25% | |||||||
Delayed Draw Term Loan | Secured Debt | ||||||||
Debt Instrument [Line Items] | ||||||||
Principal amount, long-term debt issued | 35,000,000 | |||||||
Available borrowing capacity | $ 10,000,000 | |||||||
Commitment fees on unused borrowing capacity | 3.00% | |||||||
Prepayment trigger percentage | 130.00% | |||||||
Number of borrowings | borrowing | 4 | |||||||
Delayed Draw Term Loan | Secured Debt | LIBOR | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 10.00% | |||||||
Floor interest rate | 1.00% | |||||||
Term Loan | ||||||||
Debt Instrument [Line Items] | ||||||||
Line of credit facility, increase limit | $ 100,000,000 | |||||||
Principal amount, long-term debt issued | 250,000,000 | |||||||
Restricted cash | $ 20,800,000 | |||||||
Maximum unfinanced capital expenditures | $ 20,000,000 | |||||||
Covenant, leverage ratio, maximum | 7 | |||||||
Term Loan | Subsequent Event | ||||||||
Debt Instrument [Line Items] | ||||||||
Principal amount, long-term debt issued | $ 10,000,000 | |||||||
Outstanding principle, days prior to maturity | 120 days | 75 days | ||||||
Covenant, leverage ratio, maximum | 12 | 12 | ||||||
Term Loan | Base Rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 6.50% | |||||||
Term Loan | Base Rate | Minimum | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 2.00% | |||||||
Term Loan | LIBOR | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 7.50% | |||||||
Term Loan | LIBOR | Minimum | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 1.00% | |||||||
Term Loan | Fed Funds Effective Rate Overnight Index Swap Rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 0.50% | |||||||
Letter of Credit | Line of Credit | ||||||||
Debt Instrument [Line Items] | ||||||||
Borrowing capacity | $ 26,000,000 | |||||||
Letter of Credit | ABL Facility | Line of Credit | ||||||||
Debt Instrument [Line Items] | ||||||||
Borrowing capacity | 150,000,000 | |||||||
Sublimit for issuance | 50,000,000 | |||||||
Sublimit for swingline borrowings | 35,000,000 | |||||||
Line of credit facility, increase limit | $ 75,000,000 | $ 50,000,000 | ||||||
Letter of Credit | ABL Facility | Line of Credit | Subsequent Event | ||||||||
Debt Instrument [Line Items] | ||||||||
Outstanding principle, days prior to maturity | 120 days | 75 days | ||||||
Subordinated Term Loan Credit Agreement | ||||||||
Debt Instrument [Line Items] | ||||||||
Borrowings under ABL Facility, gross | $ 27,500,000 | |||||||
Revolving Credit Facility | Line of Credit | ||||||||
Debt Instrument [Line Items] | ||||||||
Borrowing capacity | $ 130,000,000 | |||||||
Commitment fees on unused borrowing capacity | 0.50% | |||||||
Maximum unfinanced capital expenditures | $ 20,000,000 | |||||||
Covenant, leverage ratio, maximum | 4 | |||||||
Increase in interest rate in event of default | 2.00% | |||||||
Revolving Credit Facility | Line of Credit | Debt Instrument, Redemption, Period One | ||||||||
Debt Instrument [Line Items] | ||||||||
Prepayment fee percent | 2.00% | |||||||
Revolving Credit Facility | Line of Credit | Debt Instrument, Redemption, Period Two | ||||||||
Debt Instrument [Line Items] | ||||||||
Prepayment fee percent | 1.00% | |||||||
Revolving Credit Facility | Line of Credit | Debt Instrument, Redemption, Period Three | ||||||||
Debt Instrument [Line Items] | ||||||||
Prepayment fee percent | 0.50% | |||||||
Revolving Credit Facility | Line of Credit | Base Rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Floor interest rate | 2.00% | |||||||
Revolving Credit Facility | Line of Credit | Base Rate | Variable Rate Component One | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 3.15% | |||||||
Revolving Credit Facility | Line of Credit | Base Rate | Variable Rate Component Two | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 3.40% | |||||||
Revolving Credit Facility | Line of Credit | Base Rate | Variable Rate Component Three | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 3.65% | |||||||
Revolving Credit Facility | Line of Credit | LIBOR | ||||||||
Debt Instrument [Line Items] | ||||||||
Floor interest rate | 1.00% | |||||||
Revolving Credit Facility | Line of Credit | LIBOR | Variable Rate Component One | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 4.15% | |||||||
Revolving Credit Facility | Line of Credit | LIBOR | Variable Rate Component Two | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 4.40% | |||||||
Revolving Credit Facility | Line of Credit | LIBOR | Variable Rate Component Three | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 4.65% | |||||||
Revolving Credit Facility | Line of Credit | Fed Funds Effective Rate Overnight Index Swap Rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 0.50% | |||||||
Bridge Loan | Line of Credit | ||||||||
Debt Instrument [Line Items] | ||||||||
Borrowing capacity | $ 35,000,000 |
LONG-TERM DEBT - Atlantic Park
LONG-TERM DEBT - Atlantic Park Term Loan, Additional Information (Details) | May 06, 2022USD ($) | May 05, 2022 | Oct. 29, 2021 | Dec. 18, 2020USD ($) | Mar. 31, 2022 | Dec. 18, 2026USD ($) | Dec. 17, 2026USD ($) | May 10, 2022 | Feb. 11, 2022USD ($) | Dec. 31, 2021$ / sharesshares | Nov. 09, 2021$ / sharesshares |
One Month LIBOR | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate | 1.00% | ||||||||||
Term Loan | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Principal amount, long-term debt issued | $ 250,000,000 | ||||||||||
Debt instrument, interest rate, original issue discount | 0.0300 | ||||||||||
Proceeds from issuance of debt | $ 242,500,000 | ||||||||||
Line of credit facility, increase limit | $ 100,000,000 | ||||||||||
Make whole period | 2 years | ||||||||||
Interest rate on convertible debt | 12.22% | 20.90% | |||||||||
Right of refusal period | 10 days | ||||||||||
Class of warrant or right, number of securities called by warrants or rights (in shares) | shares | 3,582,949 | 1,417,051 | |||||||||
Class of warrant or right, exercise price (in dollars per share) | $ / shares | $ 7.75 | $ 1.50 | |||||||||
Covenant, leverage ratio, maximum | 7 | ||||||||||
Maximum unfinanced capital expenditures | $ 20,000,000 | ||||||||||
Maximum net leverage ratio threshold | 4 | ||||||||||
Term Loan | Subsequent Event | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Principal amount, long-term debt issued | $ 10,000,000 | ||||||||||
Covenant, leverage ratio, maximum | 12 | 12 | |||||||||
Outstanding principle, days prior to maturity | 120 days | 75 days | |||||||||
Term Loan | Fed Funds Effective Rate Overnight Index Swap Rate | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate | 0.50% | ||||||||||
Term Loan | Base Rate | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate | 6.50% | ||||||||||
Term Loan | Base Rate | Minimum | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate | 2.00% | ||||||||||
Term Loan | LIBOR | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate | 7.50% | ||||||||||
Term Loan | LIBOR | Minimum | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate | 1.00% | ||||||||||
Term Loan | Forecasted | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Principal amount, long-term debt issued | $ 10,000,000 | $ 50,000,000 |
LONG-TERM DEBT - Subordinated T
LONG-TERM DEBT - Subordinated Term Loan (Details) | Feb. 11, 2022USD ($)$ / shares | Dec. 08, 2021USD ($) | Nov. 09, 2021USD ($)director | Mar. 31, 2022USD ($) | Dec. 31, 2021USD ($) |
Debt Instrument [Line Items] | |||||
Outstanding letter of credit | $ 300,000 | ||||
Surety Bond | |||||
Debt Instrument [Line Items] | |||||
Outstanding letter of credit | 1,200,000 | ||||
Miscellaneous Cash Deposit | |||||
Debt Instrument [Line Items] | |||||
Outstanding letter of credit | 1,500,000 | ||||
Standby Letters of Credit | |||||
Debt Instrument [Line Items] | |||||
Outstanding letter of credit | $ 23,500,000 | $ 23,500,000 | |||
PIPE Shares | |||||
Debt Instrument [Line Items] | |||||
Consideration received from sale of stock | $ 10,000,000 | ||||
Price per share (in dollars per share) | $ / shares | $ 0.84 | ||||
Subordinated Debt | Subordinated Term Loan | |||||
Debt Instrument [Line Items] | |||||
Principal amount, long-term debt issued | $ 50,000,000 | ||||
Proceeds from debt | $ 27,500,000 | $ 22,500,000 | |||
Interest rate on convertible debt | 12.00% | ||||
Number of directors | director | 7 | ||||
Subordinated Debt | Delayed Draw Term Loan | |||||
Debt Instrument [Line Items] | |||||
Principal amount, long-term debt issued | $ 10,000,000 | ||||
Covenant, leverage ratio, maximum | 7 | ||||
Maximum unfinanced capital expenditures | $ 20,000,000 | ||||
Maximum net leverage ratio threshold | 4 | ||||
Secured Debt | |||||
Debt Instrument [Line Items] | |||||
Principal amount, long-term debt issued | $ 55,000,000 | ||||
Secured Debt | Delayed Draw Term Loan | |||||
Debt Instrument [Line Items] | |||||
Principal amount, long-term debt issued | $ 35,000,000 |
LONG-TERM DEBT - Warrants and S
LONG-TERM DEBT - Warrants and Subscription Agreement (Details) | Feb. 11, 2022nominee | Dec. 31, 2021$ / sharesshares | Dec. 08, 2021shares | Nov. 09, 2021$ / sharesshares |
Debt Instrument [Line Items] | ||||
Number of qualified nominees | nominee | 1 | |||
PIPE Shares | ||||
Debt Instrument [Line Items] | ||||
Share holding period | 180 days | |||
Period to appoint director | 7 days | |||
Minimum percent of shares owned | 10.00% | |||
Term Loan | ||||
Debt Instrument [Line Items] | ||||
Class of warrant or right, number of securities called by warrants or rights (in shares) | 3,582,949 | 1,417,051 | ||
Class of warrant or right, exercise price (in dollars per share) | $ / shares | $ 7.75 | $ 1.50 | ||
A&R Warrant | Term Loan | ||||
Debt Instrument [Line Items] | ||||
Class of warrant or right, number of securities called by warrants or rights (in shares) | 4,082,949 | |||
Class of warrant or right, exercise price (in dollars per share) | $ / shares | $ 1.50 | |||
Second A&R Warrant | Term Loan | ||||
Debt Instrument [Line Items] | ||||
Class of warrant or right, number of securities called by warrants or rights (in shares) | 5,000,000 | |||
Class of warrant or right, exercise price (in dollars per share) | $ / shares | $ 1.50 | |||
APSC Warrant | Term Loan | ||||
Debt Instrument [Line Items] | ||||
Class of warrant or right, number of securities called by warrants or rights (in shares) | 500,000 |
LONG-TERM DEBT - Convertible De
LONG-TERM DEBT - Convertible Debt, Additional Information (Details) | May 17, 2018USD ($) | Jul. 31, 2017USD ($)shares | Jul. 25, 2017$ / shares | Mar. 31, 2022USD ($)sharesday$ / shares | Mar. 31, 2019USD ($) | Jan. 13, 2022USD ($) | Dec. 31, 2020USD ($) |
Debt Instrument [Line Items] | |||||||
Debt instrument, convertible, threshold percentage of conversion price trigger for redemption | 130.00% | ||||||
Debt instrument, convertible, threshold trading days for redemption | day | 20 | ||||||
Threshold consecutive trading days for redemption | 30 days | ||||||
Percentage of maximum number of shares that would require cash settlement | 60.00% | ||||||
Percentage of the maximum number of shares authorized for issuance | 40.00% | ||||||
Tax impact of convertible debt embedded derivative liability reclassification to equity | $ 7,800,000 | ||||||
Loss on embedded derivative | $ 24,800,000 | ||||||
Convertible debt | |||||||
Debt Instrument [Line Items] | |||||||
Principal amount, long-term debt issued | $ 230,000,000 | $ 95,200,000 | |||||
Interest rate on convertible debt | 5.00% | 5.00% | |||||
Repurchased face amount | $ 136,900,000 | ||||||
Initial conversion rate, convertible debt | 0.0460829 | ||||||
Initial conversion price, convertible debt (in dollars per share) | $ / shares | $ 21.70 | ||||||
Conversion premium | 40.00% | ||||||
Share price (in dollars per share) | $ / shares | $ 15.50 | ||||||
Threshold trading days | day | 20 | ||||||
Threshold consecutive trading days | day | 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 | day | 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 (in shares) | shares | 10,599,067 | 4,291,705 | |||||
Shares outstanding, percentage threshold | 19.99% | 19.99% | |||||
Redemption price, percentage (equal to) | 100.00% | ||||||
Repurchase of convertible debt | $ 222,300,000 | ||||||
Convertible debt | PIK Securities | |||||||
Debt Instrument [Line Items] | |||||||
Principal amount, long-term debt issued | $ 51,969,000 | ||||||
Interest rate on convertible debt | 5.00% | ||||||
Convertible debt | Minimum | PIK Securities | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate on convertible debt | 5.00% | ||||||
Denomination of issuance | $ 1 | ||||||
Convertible debt | Maximum | PIK Securities | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate on convertible debt | 8.00% | ||||||
Denomination of issuance | $ 1,000 | ||||||
Credit Facility | Not Designated as Hedging Instrument | |||||||
Debt Instrument [Line Items] | |||||||
Embedded derivative liability | $ 45,400,000 |
LONG-TERM DEBT - Detail of Conv
LONG-TERM DEBT - Detail of Convertible Debt Carrying Amount (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Principal | $ 501,495 | |
Convertible debt embedded derivative | ASU 2020-06 (ASC 470-20) | ||
Debt Instrument [Line Items] | ||
Carrying amount of the equity component, net of issuance costs | $ 7,969 | |
Convertible debt embedded derivative | ASU 2016-06 (ASC 815-15) | ||
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 | 95,209 | 93,130 |
Unamortized issuance costs | (1,435) | (916) |
Unamortized discount | (2,289) | (4,552) |
Net carrying amount of the liability component | $ 91,485 | $ 87,662 |
LONG-TERM DEBT - Components of
LONG-TERM DEBT - Components of Convertible Debt Interest Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Debt Instrument [Line Items] | ||
Amortization of debt discount and issuance costs | $ 8,397 | $ 2,040 |
Total interest expense | 18,605 | 9,396 |
Convertible debt | ||
Debt Instrument [Line Items] | ||
Coupon interest | 1,568 | 1,164 |
Amortization of debt discount and issuance costs | 627 | 766 |
Total interest expense | $ 2,195 | $ 1,930 |
Effective interest rate | 9.75% | 9.12% |
LONG-TERM DEBT - Cumulative Eff
LONG-TERM DEBT - Cumulative Effect (Details) - USD ($) $ / shares in Units, $ in Thousands | Jan. 01, 2022 | Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 |
Liabilities | |||||
Total long-term debt and finance lease obligations, less current portion | $ 407,018 | $ 455,815 | $ 405,191 | ||
Equity: | |||||
Adjustment to stockholders' equity | 27,070 | $ 182,860 | 51,867 | $ 214,603 | |
Additional paid-in capital | 439,173 | 444,747 | 444,824 | ||
Accumulated deficit | (371,760) | $ (404,222) | (375,584) | ||
Basic (in dollars per share) | $ (0.86) | $ (1.11) | |||
Diluted (in dollars per share) | $ (0.86) | $ (1.11) | |||
Additional Paid-in Capital | |||||
Equity: | |||||
Adjustment to stockholders' equity | $ 444,747 | $ 424,812 | 444,824 | 422,589 | |
Retained Earnings (Deficit) | |||||
Equity: | |||||
Adjustment to stockholders' equity | $ (404,222) | $ (223,856) | (375,584) | $ (189,565) | |
Cumulative Effect, Period of Adoption, Adjustment | |||||
Liabilities | |||||
Total long-term debt and finance lease obligations, less current portion | 1,827 | ||||
Equity: | |||||
Adjustment to stockholders' equity | (1,827) | ||||
Interest expense | $ 300 | ||||
Basic (in dollars per share) | $ 0.01 | ||||
Diluted (in dollars per share) | $ 0.01 | ||||
Cumulative Effect, Period of Adoption, Adjustment | Additional Paid-in Capital | |||||
Equity: | |||||
Adjustment to stockholders' equity | (5,651) | ||||
Cumulative Effect, Period of Adoption, Adjustment | Retained Earnings (Deficit) | |||||
Equity: | |||||
Adjustment to stockholders' equity | $ 3,824 |
LEASES - Additional Information
LEASES - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Operating Leased Assets [Line Items] | ||
Options to extend leases (up to) | 10 years | |
Options to terminate leases | 1 year | |
Operating lease, expense | $ 20.1 | $ 39.4 |
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 | 14 years |
LEASES - Components of Lease Ex
LEASES - Components of Lease Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Leases [Abstract] | ||
Operating lease costs | $ 6,687 | $ 7,239 |
Variable lease costs | 1,459 | 1,276 |
Finance lease costs: | ||
Amortization of right-of-use assets | 194 | 117 |
Interest on lease liabilities | 88 | 78 |
Total lease cost | $ 8,428 | $ 8,710 |
LEASES - Cash Flow Lease Inform
LEASES - Cash Flow Lease Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Cash paid for amounts included in the measurement of lease liabilities | ||
Operating cash flows from operating leases | $ 5,405 | $ 5,356 |
Operating cash flows from finance leases | 90 | 80 |
Financing cash flows from finance leases | 162 | 78 |
Right-of-use assets obtained in exchange for lease obligations | ||
Operating leases | 840 | 8,172 |
Finance leases | $ 23 | $ 22 |
LEASES Amounts Recognized in th
LEASES Amounts Recognized in the Balance Sheet for Leases (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Operating Leases: | ||
Operating lease right-of-use assets | $ 56,403 | $ 60,700 |
Current portion of operating lease obligations | 15,306 | 16,176 |
Operating lease obligations | 45,742 | 49,221 |
Finance Leases: | ||
Property, plant and equipment, net | 4,949 | 5,123 |
Current portion of long-term debt and finance lease obligations | 670 | 669 |
Long-term debt and finance lease obligations | $ 4,840 | $ 4,980 |
Weighted average remaining lease term: | ||
Operating leases | 6 years | 6 years |
Finance leases | 10 years | 10 years |
Weighted average discount rate: | ||
Operating leases | 6.90% | 6.80% |
Finance leases | 6.40% | 6.40% |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] | Current portion of long-term debt and finance lease obligations | Current portion of long-term debt and finance lease obligations |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Total long-term debt and finance lease obligations, less current portion | Total long-term debt and finance lease obligations, less current portion |
LEASES - Operating and Finance
LEASES - Operating and Finance Leases - Future Minimum Lease Payments (Details) $ in Thousands | Mar. 31, 2022USD ($) |
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | |
2022 (Remainder of the year) | $ 19,540 |
2023 | 15,433 |
2024 | 12,183 |
2025 | 8,691 |
2026 | 6,869 |
Thereafter | 18,397 |
Total future minimum lease payments | 81,113 |
Less: Interest | (20,065) |
Present value of lease liabilities | 61,048 |
Finance Lease, Liability, Payment, Due [Abstract] | |
2022 (Remainder of the year) | 990 |
2023 | 901 |
2024 | 740 |
2025 | 569 |
2026 | 555 |
Thereafter | 4,003 |
Total future minimum lease payments | 7,758 |
Less: Interest | (2,248) |
Present value of lease liabilities | $ 5,510 |
SHARE-BASED COMPENSATION - Addi
SHARE-BASED COMPENSATION - Additional Information (Details) | Mar. 15, 2021 | May 31, 2021shares | Mar. 31, 2022USD ($)factor$ / sharesshares | Mar. 31, 2021USD ($)shares | Mar. 31, 2020$ / shares | Mar. 31, 2019$ / shares | Dec. 31, 2021USD ($)shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Awards outstanding to officers, directors and key employees (in shares) | 1,100,000 | ||||||
Share-based compensation | $ | $ 600,000 | $ 2,300,000 | |||||
Unrecognized compensation expense related to share-based compensation | $ | $ 3,700,000 | ||||||
Remaining weighted-average period | 1 year 6 months | ||||||
Granted stock options (in shares) | 0 | 0 | |||||
Exercised stock options (in shares) | 0 | ||||||
Cancelled stock options (in shares) | 0 | ||||||
Expired of stock options (in shares) | 0 | ||||||
Weighted-average remaining contractual life of options exercisable | 9 months 18 days | ||||||
Range of prices, lower limit | $ / shares | $ 37.27 | ||||||
Exercisable at end of year (in shares) | 17,000 | ||||||
2018 Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of additional shares authorized (in shares) | 3,000,000 | ||||||
Stock and stock units | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share-based compensation | $ | $ 600,000 | $ 1,500,000 | |||||
Granted (in dollars per share) | $ / shares | $ 1.64 | ||||||
Granted (in shares) | 219,000 | 0 | |||||
Stock and stock units | Minimum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting period | 3 years | ||||||
Stock and stock units | Maximum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting period | 4 years | ||||||
Stock And Stock Units | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Granted (in dollars per share) | $ / shares | $ 1.64 | $ 0 | |||||
Long-term performance stock units | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share-based compensation | $ | $ (1,200,000) | $ 800,000 | |||||
Award vesting period | 2 years | ||||||
Performance period | 2 years | ||||||
Share-based compensation award, number of performance conditions | factor | 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% | ||||||
Stock Options | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share-based compensation | $ | $ 0 | $ 0 | |||||
Award vesting period | 4 years | ||||||
Award contractual term | 10 years | ||||||
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 - Stoc
SHARE-BASED COMPENSATION - Stock Units and Director Stock Grants (Details) - Stock and stock units - $ / shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Changes during the period: | ||
Stock and stock units, beginning of period (in shares) | 804,000 | |
Granted (in shares) | 219,000 | 0 |
Vested and settled (in shares) | 0 | |
Forfeited and cancelled (in shares) | (39,000) | |
Stock and stock units, end of period (in shares) | 984,000 | 804,000 |
Changes during the period: | ||
Stock and stock units, beginning of period (in dollars per share) | $ 7.27 | |
Granted (in dollars per share) | 1.64 | |
Vested and settled (in dollars per share) | 0 | |
Forfeited and cancelled (in dollars per share) | 6.28 | |
Stock and stock units, end of period (in dollars per share) | $ 6.05 | $ 7.27 |
SHARE-BASED COMPENSATION - Perf
SHARE-BASED COMPENSATION - Performance Awards (Details) - Long-term performance stock units shares in Thousands | 3 Months Ended |
Mar. 31, 2022$ / sharesshares | |
Performance Units Subject to Market Conditions | |
Changes during the period: | |
Stock and stock units, beginning of period (in shares) | shares | 684 |
Granted (in shares) | shares | 0 |
Vested and settled (in shares) | shares | 0 |
Forfeited and cancelled (in shares) | shares | (653) |
Stock and stock units, end of period (in shares) | shares | 31 |
Changes during the period: | |
Stock and stock units, beginning of period (in dollars per share) | $ / shares | $ 6.30 |
Granted (in dollars per share) | $ / shares | 0 |
Vested and settled (in dollars per share) | $ / shares | 0 |
Forfeited and cancelled (in dollars per share) | $ / shares | 6.04 |
Stock and stock units, end of period (in dollars per share) | $ / shares | $ 11.69 |
Performance Units Not Subject to Market Conditions | |
Changes during the period: | |
Stock and stock units, beginning of period (in shares) | shares | 219 |
Granted (in shares) | shares | 0 |
Vested and settled (in shares) | shares | 0 |
Forfeited and cancelled (in shares) | shares | (188) |
Stock and stock units, end of period (in shares) | shares | 31 |
Changes during the period: | |
Stock and stock units, beginning of period (in dollars per share) | $ / shares | $ 9.91 |
Granted (in dollars per share) | $ / shares | 0 |
Vested and settled (in dollars per share) | $ / shares | 0 |
Forfeited and cancelled (in dollars per share) | $ / shares | 9.61 |
Stock and stock units, end of period (in dollars per share) | $ / shares | $ 11.69 |
EMPLOYEE BENEFIT PLANS - Schedu
EMPLOYEE BENEFIT PLANS - Schedule of Net Pension Cost (Credit) (Details) - United Kingdom - Pension Plan - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Interest cost | $ 422 | $ 322 |
Expected return on plan assets | (629) | (504) |
Amortization of prior service cost | 8 | 9 |
Net periodic pension credit | $ (199) | $ (173) |
EMPLOYEE BENEFIT PLANS - Additi
EMPLOYEE BENEFIT PLANS - Additional Information (Details) - United Kingdom - Pension Plan $ in Millions | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Defined Benefit Plan Disclosure [Line Items] | |
Weighted-average of expected returns on asset investment, percentage | 2.10% |
Expected contributions for current year | $ 3.9 |
Total contributions to date | $ 1 |
Defined Benefit Plan, Equity Securities | |
Defined Benefit Plan Disclosure [Line Items] | |
Weighted-average of expected returns on asset investment, percentage | 4.60% |
Debt Securities | |
Defined Benefit Plan Disclosure [Line Items] | |
Weighted-average of expected returns on asset investment, percentage | 1.40% |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE LOSS - Summary of Changes in AOCI (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance, beginning of period | $ 51,867 | |
Other comprehensive loss | 346 | $ 217 |
Tax Provision | 0 | 102 |
Other comprehensive income (loss), net of tax | 346 | 319 |
Balance, end of period | 27,070 | |
Total | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance, beginning of period | (26,732) | (27,678) |
Balance, end of period | (26,386) | (27,359) |
Foreign Currency Translation Adjustments | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance, beginning of period | (23,287) | (23,045) |
Other comprehensive loss | 346 | 217 |
Tax Provision | 0 | 102 |
Balance, end of period | (22,940) | (22,828) |
Foreign Currency Hedge | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance, beginning of period | 0 | 2,988 |
Other comprehensive loss | 0 | 0 |
Balance, end of period | 0 | 2,988 |
Defined Benefit Pension Plans | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance, beginning of period | (3,277) | (8,021) |
Other comprehensive loss | 0 | 0 |
Balance, end of period | (3,277) | (8,021) |
Tax Provision | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance, beginning of period | (169) | 400 |
Tax Provision | 0 | 102 |
Balance, end of period | $ (169) | $ 502 |
ACCUMULATED OTHER COMPREHENSI_4
ACCUMULATED OTHER COMPREHENSIVE LOSS - Related Tax Effects of AOCI (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Accumulated Other Comprehensive Loss [Line Items] | ||
Gross Amount | $ 346 | $ 217 |
Tax (provision) benefit attributable to other comprehensive income (loss) | 0 | 102 |
Other comprehensive loss, net of tax | 346 | 319 |
Foreign currency translation adjustments | ||
Accumulated Other Comprehensive Loss [Line Items] | ||
Gross Amount | 346 | 217 |
Tax (provision) benefit attributable to other comprehensive income (loss) | 0 | 102 |
Other comprehensive loss, net of tax | $ 346 | $ 319 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) $ in Millions | Feb. 09, 2022USD ($) | Jun. 01, 2021USD ($) | Aug. 26, 2020claim | Mar. 31, 2022USD ($) | Apr. 20, 2021facility |
Loss Contingencies [Line Items] | |||||
Number of facilities with potential violations | facility | 7 | ||||
Cost incurred in dispute | $ 0.2 | ||||
Self-insured retention and deductible | $ 3 | ||||
Legal and professional accruals | 44 | ||||
Amount not covered by insurance | $ 5 | ||||
Thai action | |||||
Loss Contingencies [Line Items] | |||||
New claims filed | claim | 2 | ||||
Kelli Most Litigation | |||||
Loss Contingencies [Line Items] | |||||
Amount awarded to other party | $ 222 | ||||
Kelli Most Litigation | Minimum | |||||
Loss Contingencies [Line Items] | |||||
Estimate of possible loss | 13 | ||||
Kelli Most Litigation | Maximum | |||||
Loss Contingencies [Line Items] | |||||
Estimate of possible loss | $ 51 |
SEGMENT AND GEOGRAPHIC DISCLO_3
SEGMENT AND GEOGRAPHIC DISCLOSURES - Additional Information (Details) - 3 months ended Mar. 31, 2022 | performance_condition | segment |
Segment Reporting [Abstract] | ||
Number of operating segments | 3 | 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, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Mar. 31, 2021 | |
Segment Reporting Information [Line Items] | ||||
Revenues | $ 218,576 | $ 194,618 | ||
Operating income (loss) | (16,203) | (24,300) | ||
Capital expenditures | 6,631 | 4,397 | ||
Depreciation and amortization | 10,031 | 10,959 | ||
IHT | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 95,595 | 91,139 | ||
MS | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 93,441 | 87,396 | ||
Goodwill impairment charges | $ 55,800 | |||
Quest Integrity | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 29,540 | 16,083 | ||
Goodwill impairment charges | $ 8,800 | |||
Operating segments | IHT | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 95,595 | 91,139 | ||
Operating income (loss) | 134 | 364 | ||
Capital expenditures | 4,771 | 2,714 | ||
Depreciation and amortization | 3,254 | 3,470 | ||
Operating segments | MS | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 93,441 | 87,396 | ||
Operating income (loss) | 513 | 115 | ||
Capital expenditures | 813 | 1,152 | ||
Depreciation and amortization | 4,884 | 5,439 | ||
Operating segments | Quest Integrity | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 29,540 | 16,083 | ||
Operating income (loss) | 6,204 | (252) | ||
Capital expenditures | 1,009 | 406 | ||
Depreciation and amortization | 577 | 712 | ||
Corporate and shared support services | ||||
Segment Reporting Information [Line Items] | ||||
Operating income (loss) | (23,054) | (24,527) | ||
Capital expenditures | 38 | 125 | ||
Depreciation and amortization | $ 1,316 | $ 1,338 |
SEGMENT AND GEOGRAPHIC DISCLO_5
SEGMENT AND GEOGRAPHIC DISCLOSURES - Geographic Breakdown of Revenues and Total Long-Lived Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Revenues from External Customers [Line Items] | ||
Total Revenues | $ 218,576 | $ 194,618 |
Total Long-lived Assets | 307,770 | 334,981 |
United States | ||
Revenues from External Customers [Line Items] | ||
Total Revenues | 151,679 | 141,832 |
Total Long-lived Assets | 264,946 | 289,790 |
Canada | ||
Revenues from External Customers [Line Items] | ||
Total Revenues | 20,319 | 16,494 |
Total Long-lived Assets | 10,238 | 9,804 |
Europe | ||
Revenues from External Customers [Line Items] | ||
Total Revenues | 24,123 | 25,711 |
Total Long-lived Assets | 21,261 | 26,253 |
Other foreign countries | ||
Revenues from External Customers [Line Items] | ||
Total Revenues | 22,455 | 10,581 |
Total Long-lived Assets | $ 11,325 | $ 9,134 |
RESTRUCTURING AND OTHER RELAT_3
RESTRUCTURING AND OTHER RELATED CHARGES - Schedule of Restructuring Charges by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and other related charges, net | $ 16 | $ 1,877 |
Operating Group Reorganization | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and other related charges, net | 16 | 1,877 |
Operating Group Reorganization | Employee Severance | IHT | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and other related charges, net | 16 | 283 |
Operating Group Reorganization | Employee Severance | MS | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and other related charges, net | 0 | 139 |
Operating Group Reorganization | Employee Severance | Quest Integrity | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and other related charges, net | 233 | |
Operating Group Reorganization | Employee Severance | Corporate and shared support services | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and other related charges, net | $ 0 | $ 1,222 |
RESTRUCTURING AND OTHER RELAT_4
RESTRUCTURING AND OTHER RELATED CHARGES - Additional Information (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Employee Severance | ||
Restructuring Cost and Reserve [Line Items] | ||
Severance charges incurred cumulatively to date | $ 20 | |
Operating Group Reorganization Program | ||
Restructuring Cost and Reserve [Line Items] | ||
Severance charges incurred cumulatively to date | $ 2,900 | $ 2,900 |
RESTRUCTURING AND OTHER RELAT_5
RESTRUCTURING AND OTHER RELATED CHARGES - Rollforward of Restructuring Liability - OneTEAM Program (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Restructuring Reserve [Roll Forward] | ||
Charges | $ 16 | $ 1,877 |
Operating Group Reorganization Program | Employee Severance | ||
Restructuring Reserve [Roll Forward] | ||
Balance, beginning of period | 712 | |
Charges | 16 | |
Payments | (371) | |
Balance, end of period | $ 357 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Alvarez And Marsal | ||
Related Party Transaction [Line Items] | ||
Expenses from transactions with related party | $ 3.8 | $ 8 |