Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2023 | May 09, 2023 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2023 | |
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 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 4,361,825 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Entity Central Index Key | 0000318833 | |
Current Fiscal Year End Date | --12-31 | |
Common Stock | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Common Stock, $0.30 par value | |
Trading Symbol | TISI | |
Security Exchange Name | NYSE | |
Preferred Stock | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Preferred Stock Purchase Rights | |
Security Exchange Name | NYSE | |
No Trading Symbol Flag | true |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 31,869 | $ 58,075 |
Accounts receivable, net of allowance of $4,926 and $5,262 respectively | 178,211 | 186,689 |
Inventory | 37,998 | 36,331 |
Income tax receivable | 828 | 779 |
Prepaid expenses and other current assets | 62,702 | 65,679 |
Total current assets | 311,608 | 347,553 |
Property, plant and equipment, net | 134,520 | 138,099 |
Intangible assets, net | 72,203 | 75,407 |
Operating lease right-of-use assets | 47,609 | 48,462 |
Defined benefit pension asset | 1,494 | 398 |
Other assets, net | 7,383 | 6,351 |
Deferred tax asset | 375 | 375 |
Total assets | 575,192 | 616,645 |
Current liabilities: | ||
Current portion of long-term debt and finance lease obligations | 284,102 | 280,993 |
Current portion of operating lease obligations | 14,609 | 13,823 |
Accounts payable | 32,003 | 32,524 |
Other accrued liabilities | 99,308 | 119,267 |
Income tax payable | 2,749 | 2,257 |
Total current liabilities | 432,771 | 448,864 |
Long-term debt and finance lease obligations | 4,841 | 4,942 |
Operating lease obligations | 37,119 | 38,819 |
Deferred tax liabilities | 3,622 | 3,661 |
Other long-term liabilities | 2,701 | 2,599 |
Total liabilities | 481,054 | 498,885 |
Commitments and contingencies | ||
Equity: | ||
Preferred stock, 500,000 shares authorized, none issued | 0 | 0 |
Common stock, par value $0.30 per share, 12,000,000 shares authorized; 4,357,401 and 4,342,909 shares issued | 1,307 | 1,303 |
Additional paid-in capital | 457,463 | 457,133 |
Accumulated deficit | (326,390) | (301,679) |
Accumulated other comprehensive loss | (38,242) | (38,997) |
Total equity | 94,138 | 117,760 |
Total liabilities and equity | $ 575,192 | $ 616,645 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | Dec. 21, 2022 | Dec. 20, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | |||||
Allowance for credit loss, current | $ 4,926 | $ 5,262 | $ 7,843 | ||
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) | 12,000,000 | 12,000,000 | 120,000,000 | ||
Common stock, shares issued (in shares) | 4,357,401 | 4,342,909 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | ||
Income Statement [Abstract] | |||
Revenues | $ 202,277 | $ 189,036 | |
Operating expenses | 155,275 | 147,908 | |
Gross margin | 47,002 | 41,128 | |
Selling, general and administrative expenses | 54,748 | 63,519 | |
Restructuring and other related charges, net | 0 | 16 | |
Operating loss | (7,746) | (22,407) | |
Interest expense, net | (16,741) | (18,579) | |
Other income, net | 635 | 3,179 | |
Loss from continuing operations before income taxes | (23,852) | (37,807) | |
Provision for income taxes | (859) | (526) | |
Net loss from continuing operations | (24,711) | (38,333) | |
Discontinued operations: | |||
Net income from discontinued operations, net of income tax | 0 | 5,871 | |
Net Income (Loss) Attributable to Parent, Total | $ (24,711) | $ (32,462) | [1] |
Basic and diluted net loss per common share: | |||
Loss from continuing operations, Basic (in USD per share) | $ (5.69) | $ (10.17) | |
Loss from continuing operations, diluted (in USD per share) | (5.69) | (10.17) | |
Income (loss) from discontinued operations, basic (in USD per share) | 0 | 1.56 | |
Income (loss) from discontinued operations, basic (in USD per share) | 0 | 1.56 | |
Basic (in dollars per share) | (5.69) | (8.61) | |
Diluted (in dollars per share) | $ (5.69) | $ (8.61) | |
Weighted-average number of shares outstanding: | |||
Weighted-average number of basic shares outstanding (in shares) | 4,344 | 3,770 | |
Weighted-average number of diluted shares outstanding (in shares) | 4,344 | 3,770 | |
[1]Condensed consolidated statements of cash flows for the three months ended March 31, 2022 includes discontinued operations. |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | ||
Statement of Comprehensive Income [Abstract] | |||
Net loss | $ (24,711) | $ (32,462) | [1] |
Other comprehensive income (loss) before tax: | |||
Foreign currency translation adjustment | 778 | 346 | |
Other comprehensive income, before tax | 778 | 346 | |
Tax provision attributable to other comprehensive income | (23) | 0 | |
Other comprehensive income, net of tax | 755 | 346 | |
Total comprehensive loss | $ (23,956) | $ (32,116) | |
[1]Condensed consolidated statements of cash flows for the three months ended March 31, 2022 includes discontinued operations. |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (UNAUDITED) - USD ($) shares in Thousands, $ in Thousands | Total | Cumulative Effect, Period of Adoption, Adjustment | Common Stock | Additional Paid-in Capital | Additional Paid-in Capital Cumulative 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, 2021 | 3,122 | ||||||||
Beginning balance at Dec. 31, 2021 | $ 51,867 | $ (1,827) | $ 936 | $ 453,247 | $ (5,651) | $ (375,584) | $ 3,824 | $ (26,732) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net loss | (32,462) | [1] | (32,462) | ||||||
Net settlement of vested stock awards | 2 | 2 | |||||||
Issuance of common stock (in shares) | 1,190 | ||||||||
Issuance of common stock | 9,768 | $ 357 | 9,411 | ||||||
Foreign currency translation adjustment, net of tax | 346 | 346 | |||||||
Non-cash compensation | (624) | (624) | |||||||
Ending balance (in shares) at Mar. 31, 2022 | 4,312 | ||||||||
Ending balance at Mar. 31, 2022 | $ 27,070 | $ 1,293 | 456,385 | (404,222) | (26,386) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Accounting pronouncement adjustment | Accounting Standards Update 2020-06 [Member] | ||||||||
Beginning balance (in shares) at Dec. 31, 2022 | 4,343 | ||||||||
Beginning balance at Dec. 31, 2022 | $ 117,760 | $ 1,303 | 457,133 | (301,679) | (38,997) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net loss | (24,711) | (24,711) | |||||||
Net settlement of vested stock awards (in shares) | 14 | ||||||||
Net settlement of vested stock awards | (48) | $ 4 | (52) | ||||||
Foreign currency translation adjustment, net of tax | 755 | 755 | |||||||
Non-cash compensation | 382 | 382 | |||||||
Ending balance (in shares) at Mar. 31, 2023 | 4,357 | ||||||||
Ending balance at Mar. 31, 2023 | $ 94,138 | $ 1,307 | $ 457,463 | $ (326,390) | $ (38,242) | ||||
[1]Condensed consolidated statements of cash flows for the three months ended March 31, 2022 includes discontinued operations. |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2023 | Mar. 31, 2022 | |||
Cash flows from operating activities: | ||||
Net loss | $ (24,711) | $ (32,462) | [1] | |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||
Depreciation and amortization | [1] | 9,546 | 10,031 | |
Write-off of deferred loan costs | [1] | 0 | 2,748 | |
Amortization of debt issuance costs and debt discounts | [1] | 8,486 | 4,936 | |
Paid-in-kind interest | [1] | 3,485 | 6,462 | |
Allowance for credit (gains) losses | [1] | (201) | 67 | |
Foreign currency gains | [1] | (177) | (185) | |
Deferred income taxes | [1] | (37) | (799) | |
Gain on asset disposal | [1] | (260) | (2,306) | |
Non-cash compensation costs (credits) | [1] | 382 | (624) | |
Other, net | [1] | (947) | (1,216) | |
Changes in operating assets and liabilities: | ||||
Accounts receivable | [1] | 9,350 | (18,546) | |
Inventory | [1] | (1,473) | (1,284) | |
Prepaid expenses and other current assets | [1] | (1,282) | (5,902) | |
Accounts payable | [1] | (66) | (4,722) | |
Other accrued liabilities | [1] | (20,294) | (5,885) | |
Income taxes | [1] | 436 | (319) | |
Net cash used in operating activities | [1] | (17,763) | (50,006) | |
Cash flows from investing activities: | ||||
Capital expenditures | [1] | (2,692) | (7,068) | |
Proceeds from disposal of assets | [1] | 332 | 3,026 | |
Net cash used in investing activities | [1] | (2,360) | (4,042) | |
Cash flows from financing activities: | ||||
Borrowings under 2020 ABL Facility, gross | [1] | 0 | 10,300 | |
Payments under 2020 ABL Facility, gross | [1] | 0 | (72,300) | |
Borrowings under 2022 ABL Credit Facility, gross | [1] | 6,622 | 104,924 | |
Payments under 2022 ABL Credit Facility, gross | [1] | (12,623) | (235) | |
Payments for debt issuance costs | [1] | 0 | (10,345) | |
Issuance of common stock, net of issuance costs | [1] | 0 | 9,767 | |
Other | [1] | (235) | (145) | |
Net cash (used in) provided by financing activities | [1] | (6,236) | 41,966 | |
Effect of exchange rate changes on cash | [1] | 153 | 465 | |
Net decrease in cash and cash equivalents | [1] | (26,206) | (11,617) | |
Cash and cash equivalents at beginning of period | [1] | 58,075 | 65,315 | |
Cash and cash equivalents at end of period | [1] | $ 31,869 | $ 53,698 | |
[1]Condensed consolidated statements of cash flows for the three months ended March 31, 2022 includes discontinued operations. |
DESCRIPTION OF BUSINESS AND BAS
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION | DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION Description of Business. Unless otherwise indicated, the terms “we”, “our”, “us”, and “Team” 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 specialty industrial services offering clients access to a full suite of conventional, specialized, and proprietary mechanical, heat-treating, and inspection services. 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 two segments: Inspection and Heat Treating (“IHT”) and Mechanical Services (“MS”). Through the capabilities and resources in these two 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 services primarily for the process, pipeline and power sectors, and pipeline integrity management services, and field heat treating services, 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. 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. 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, 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. Reverse Stock Split. On December 21, 2022, we completed a reverse stock split of our outstanding common stock at a ratio of one-for-ten. The Reverse Stock Split effected a proportionate reduction in our authorized shares of common stock from 120,000,000 shares to 12,000,000 shares and reduced the number of shares of common stock outstanding from approximately 43,429,089 shares to approximately 4,342,909 shares. We have made proportionate adjustments to the number of common shares issuable upon exercise or conversion of our outstanding warrants, equity awards and convertible securities, as well as the applicable exercise prices and weighted average fair value of the equity awards. No fractional shares were issued in connection with the Reverse Stock Split. Liquidity and Going Concern. These condensed consolidated financial statements have been prepared in accordance with GAAP and assuming the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business for the twelve-month period following the issue date of these unaudited condensed consolidated financial statements. Our ability to continue as a going concern is dependent on many factors, including among other things, our ability to comply with the covenants in our debt agreements, our ability to cure any defaults that occur under our debt agreements, or forbearances with respect to any such defaults, and our ability to pay, retire, amend, replace or refinance our indebtedness as defaults occur or as interest and principal payments come due. Liquidity risk is the risk that we will be unable to meet our financial obligations as they become due. Our liquidity may be affected by improvements and declines in commodity prices, our segments’ operational performance, and our ability to access capital and credit markets. We evaluated our liquidity within one year after the date of issuance of these unaudited 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) availability under the Company’s existing debt arrangements. The cash flow projections were based on known or planned cash requirements for operating and financing costs and include management’s best estimate regarding future customer activity levels, pricing for its services and for its supplies and other factors. Actual results could vary significantly from those projections. We do not believe, based on the Company’s forecast, that current working capital, cash flow from operations, expected availability under our existing credit agreements and capital expenditure financing is sufficient to fund the operations, maintain compliance with our debt covenants (as amended), and satisfy the Company’s obligations, specifically with respect to the Notes described below, as they come due within one year after the date of issuance of these condensed consolidated financial statements. Our Notes (as defined below) are due on August 1, 2023 and had a principal balance of $41.2 million as of March 31, 2023 . Under the terms of our amended financing arrangements that were entered into during 2022, the Maturity Reserve Trigger Date (as defined in the 2022 ABL Credit Agreement), and the Maturity Trigger Date (as defined in the Term Loan Credit Agreement) and collectively referred to as the “Trigger Date”, is June 17, 2023, see Note 11 - Debt for additional information. The Trigger Date requires that the Notes balance be reduced to less than $10.0 million by June 17, 2023. As of March 31, 2023, we are in compliance with our debt covenants. However, without the execution of a refinancing transaction, an agreement to extend the Notes maturity date, and/or amendments to our existing debt agreements, there is a risk that the Company could be, among other things, unable to make principal payments on the Notes to satisfy the Trigger Date provision or will be unable to pay off the Notes when they become due on August 1, 2023. The failure to pay down the Notes to less than $10.0 million by the Trigger Date will result in an acceleration of the Term Loan Credit Agreement and failure to pay would result in an event of default and associated cross defaults under the Company’s other debt instruments. Refer to Note 11 - Debt for more information on the terms, cross default provisions and maturity dates of our debt that may affect our future liquidity. As a result of our current liquidity condition and the potential inability to negotiate an extension or amend the financial covenants, substantial doubt about the Company’s ability to continue as a going concern is raised. We are exploring alternatives to reduce or refinance the Notes outstanding balance, including extending their maturity as well as other alternatives. While our lenders agreed on an extension and amended the financial covenants in prior periods, there can be no assurance that our lenders will provide additional extensions, waivers or amendments in the event of future non-compliance with our debt covenants or other possible events of default. Further, there can be no assurance that we will be able to execute a reduction, extension, or refinancing of the Notes, or that the terms of any replacement financing would be as favorable as the terms of the Notes prior to the maturity date. As such, substantial doubt exists about our ability to continue as a going concern. The condensed consolidated financial statements do not include any adjustments to the carrying amounts and classification of assets, liabilities, and reported expenses that may be necessary if the Company were unable to continue as a going concern. Basis for presentation. These condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) and the rules and regulations of the Securities and Exchange Commission. 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 condensed consolidated 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, 2022 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. Reclassifications. Certain amounts in prior periods have been reclassified to conform to the current year presentation, including the separate presentation and reporting of discontinued operations. Such reclassifications did not have any effect on our financial condition or results of operations as previously reported. Significant Accounting Policies. Our significant accounting policies are disclosed in Note 1 - Summary of Significant Accounting Policies and Practices in our Annual Report on Form 10-K for the year ended December 31, 2022. On an ongoing basis, we evaluate the estimates and assumptions, including among other things, those related to long-lived assets. Since the date of our 2022 Annual Report, there have been no material changes to our significant accounting policies. Discontinued operations. On November 1, 2022, we completed the sale of Quest Integrity. The criteria for reporting Quest Integrity as a discontinued operation were met as of completion of the Quest Integrity sale transaction and, as such, the prior year amounts presented in this Form 10-Q has been recast to present Quest Integrity as a discontinued operation. Unless otherwise specified, the financial information and discussion in this Form 10-Q are based on our continuing operations (IHT and MS segments) and exclude any results of our discontinued operations (Quest Integrity). Refer to Note 2 - Discontinued Operations for additional details. |
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS | 3 Months Ended |
Mar. 31, 2023 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DISCONTINUED OPERATIONS | DISCONTINUED OPERATIONS On November 1, 2022, we completed the Quest Integrity Transaction with Baker Hughes for an aggregate purchase price of approximately $279.0 million (reflecting certain estimated post-closing adjustments), in accordance with the Sale Agreement. We used approximately $238.0 million of the net proceeds from the sale of Quest Integrity to pay down $225.0 million of our term loan debt, and to pay certain fees associated with that repayment and related accrued interest, with the remainder reserved for general corporate purposes, thereby reducing our future debt service obligations and leverage, and improving our liquidity. Quest Integrity previously represented a reportable segment. Following the completion of the Quest Integrity Transaction, we now operate in two segments, IHT and MS. Refer to Note 1 – Description of Business and Basis of Presentation for additional details regarding our operating segments, IHT and MS. Our condensed consolidated statements of operations for three months ended March 31, 2022 report discontinued operations separate from continuing operations. Our condensed consolidated statements of comprehensive loss, statements of shareholders’ equity and statements of cash flows for the three months ended March 31, 2022 combine continuing and discontinued operations. A summary of financial information related to our discontinued operations is presented in the tables below. The table below represents the reconciliation of the major line items consisting of pretax income from discontinued operations to the after-tax income from discontinued operations (in thousands): Three Months Ended Major classes of line items constituting income (loss) from discontinued operations Revenues $ 29,540 Operating expenses (15,570) Selling, general and administrative expenses (7,766) Interest expense, net (26) Other expense (477) Income from discontinued operations before income taxes 5,701 Benefit from income taxes 170 Net income from discontinued operations $ 5,871 The following table presents the depreciation and amortization and capital expenditures of Quest Integrity (in thousands): Three Months Ended March 31, 2022 (unaudited) Cash flows provided by operating activities of discontinued operations: Depreciation and amortization $ 577 Cash flows provided by investing activities of discontinued operations: Capital expenditures $ 931 Quest Integrity had $0.3 million of accrued capital expenditures as of March 31, 2022, which were excluded from the condensed consolidated statement of cash flows for the three months ended March 31, 2022. |
REVENUE
REVENUE | 3 Months Ended |
Mar. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | REVENUE Disaggregation of revenue. Essentially all of our revenues are associated with contracts with customers. A disaggregation of our revenue from contracts with customers by geographic region, by reportable operating segment and by service type is presented below (in thousands): Geographic area: Three Months Ended March 31, 2023 (unaudited) United States and Canada Other Countries Total Revenue: IHT $ 98,531 $ 3,298 $ 101,829 MS 72,031 28,417 100,448 Total $ 170,562 $ 31,715 $ 202,277 Three Months Ended March 31, 2022 (unaudited) United States and Canada Other Countries Total Revenue: IHT $ 93,376 $ 2,219 95,595 MS 63,931 29,510 93,441 Total $ 157,307 $ 31,729 $ 189,036 Operating segment and service type: Three Months Ended March 31, 2023 (unaudited) Non-Destructive Evaluation and Testing Services Repair and Maintenance Services Heat Treating Other Total Revenue: IHT $ 81,606 $ 3 $ 13,728 $ 6,492 $ 101,829 MS — 99,838 278 332 100,448 Total $ 81,606 $ 99,841 $ 14,006 $ 6,824 $ 202,277 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 Total $ 76,449 $ 91,794 $ 13,896 $ 6,897 $ 189,036 For additional information on our reportable operating segments and geographic information, refer to Note 15 - Segment and Geographic Disclosures . Contract balances . The timing of revenue recognition, billings, and cash collections results in trade accounts receivable, contract assets and contract liabilities on the condensed consolidated balance sheets. Trade accounts receivable include billed and unbilled amounts currently due from customers and represent unconditional rights to receive consideration. The amounts due are stated at their net estimated realizable value. Refer to Note 4 - Receivables for additional information on our trade receivables and the allowance for credit losses. Contract assets include unbilled amounts when the revenue recognized exceeds the amount billed to the customer. Amounts may not exceed their net realizable value. The following table provides information about trade accounts receivable, and contract assets as of March 31, 2023 and December 31, 2022 (in thousands): March 31, 2023 December 31, 2022 Change (unaudited) Trade accounts receivable, net 1 $ 178,211 $ 186,689 $ (8,478) Contract assets 2 $ 2 $ 2 $ — _________________ 1 Includes billed and unbilled amounts, net of allowance for credit losses. See Note 4 - Receivables for details. 2 Included in the “Prepaid expenses and other current assets” line on the condensed consolidated balance sheet. 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 a contract recognized as assets primarily consist of labor and material costs and generally relate to engineering and set-up costs incurred prior to when 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, 2023 and December 31, 2022. 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 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 original expected duration of one year or less or (ii) when we recognize revenue from the satisfaction of the performance obligation in accordance with the right-to-invoice practical expedient. As most of our contracts with customers are short-term in nature and billed on a time and material basis, there were no material amounts of remaining performance obligations as of March 31, 2023 and December 31, 2022. |
RECEIVABLES
RECEIVABLES | 3 Months Ended |
Mar. 31, 2023 | |
Receivables [Abstract] | |
RECEIVABLES | RECEIVABLES A summary of accounts receivable as of March 31, 2023 and December 31, 2022 is as follows (in thousands): March 31, 2023 December 31, 2022 (unaudited) Trade accounts receivable $ 142,723 $ 160,572 Unbilled receivables 40,414 31,379 Allowance for credit losses (4,926) (5,262) Total $ 178,211 $ 186,689 We measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This 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. The following table shows a rollforward of the allowance for credit losses (in thousands): March 31, 2023 December 31, 2022 (unaudited) Balance at beginning of period $ 5,262 $ 7,843 Provision for expected credit losses 155 1,059 Recoveries collected (351) (1,114) Write-offs (96) (2,479) Foreign exchange effects (44) (47) Balance at end of period $ 4,926 $ 5,262 |
INVENTORY
INVENTORY | 3 Months Ended |
Mar. 31, 2023 | |
Inventory Disclosure [Abstract] | |
INVENTORY | INVENTORY A summary of inventory as of March 31, 2023 and December 31, 2022 is as follows (in thousands): March 31, 2023 December 31, 2022 (unaudited) Raw materials $ 9,742 $ 8,978 Work in progress 2,910 2,945 Finished goods 25,346 24,408 Total $ 37,998 $ 36,331 |
PREPAID AND OTHER CURRENT ASSET
PREPAID AND OTHER CURRENT ASSETS | 3 Months Ended |
Mar. 31, 2023 | |
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, 2023 and December 31, 2022 is as follows (in thousands): March 31, 2023 December 31, 2022 (unaudited) Insurance receivable $ 39,000 $ 39,000 Prepaid expenses 15,009 15,238 Other current assets 8,693 11,441 Total $ 62,702 $ 65,679 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 - Other Accrued Liabilities . These receivables are covered by our third-party insurance providers for any litigation matter that has been settled, or 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 software implementation costs, other receivables, and other accounts receivables. As of March 31, 2023, the other current assets include deferred financing cost of $1.4 million due to all long-term debt now being classified as current. Other current assets also include deferred financing fees amounting to $0.7 million in connection with the Substitute Reimbursement Facility (as defined below), see Note 11 - Debt for additional details. |
PROPERTY, PLANT AND EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT | 3 Months Ended |
Mar. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT | PROPERTY, PLANT AND EQUIPMENT A summary of property, plant and equipment as of March 31, 2023 and December 31, 2022 is as follows (in thousands): March 31, 2023 December 31, 2022 (unaudited) Land $ 4,006 $ 4,006 Buildings and leasehold improvements 61,594 50,833 Machinery and equipment 283,661 277,852 Furniture and fixtures 10,784 10,558 Capitalized ERP system development costs 45,903 45,917 Computers and computer software 19,788 19,457 Automobiles 3,472 3,536 Construction in progress 2,311 19,196 Total 431,519 431,355 Accumulated depreciation (296,999) (293,256) Property, plant and equipment, net $ 134,520 $ 138,099 Included in the table above are assets under finance leases of $7.4 million and $7.4 million, and accumulated amortization of $2.5 million and $2.3 million as of March 31, 2023 and December 31, 2022, respectively. Depreciation expense for the three months ended March 31, 2023 and 2022 was $5.6 million and $6.5 million, respectively. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | INTANGIBLE ASSETS A summary of intangible assets as of March 31, 2023 and December 31, 2022 is as follows (in thousands): March 31, 2023 (unaudited) Gross Accumulated Net Customer relationships $ 165,267 $ (94,409) $ 70,858 Trade names 20,570 (19,895) 675 Technology 2,712 (2,042) 670 Licenses 843 (843) — Intangible assets $ 189,392 $ (117,189) $ 72,203 December 31, 2022 Gross Accumulated Net Customer relationships $ 165,231 $ (91,296) $ 73,935 Trade names 20,563 (19,830) 733 Technology 2,707 (1,978) 729 Licenses 840 (830) 10 Intangible assets $ 189,341 $ (113,934) $ 75,407 Amortization expense of intangible assets for the three months ended March 31, 2023 and 2022 was $3.2 million and $3.5 million, respectively. The weighted-average amortization period for intangible assets subject to amortization was 13.7 years as of March 31, 2023 and December 31, 2022. |
OTHER ACCRUED LIABILITIES
OTHER ACCRUED LIABILITIES | 3 Months Ended |
Mar. 31, 2023 | |
Payables and Accruals [Abstract] | |
OTHER ACCRUED LIABILITIES | OTHER ACCRUED LIABILITIES A summary of other accrued liabilities as of March 31, 2023 and December 31, 2022 is as follows (in thousands): March 31, 2023 December 31, 2022 (unaudited) Legal and professional accruals $ 43,856 $ 46,665 Payroll and other compensation expenses 37,745 48,507 Insurance accruals 6,136 7,483 Property, sales and other non-income related taxes 3,815 7,348 Accrued interest 3,385 3,963 Volume discount 2,179 2,050 Other accruals 2,192 3,251 Total $ 99,308 $ 119,267 Legal and professional accruals include accruals for legal and professional fees as well as accrued legal claims, refer to Note 14 - Commitments and Contingencies . Certain legal claims are covered by insurance and the related insurance receivable for these claims is recorded in prepaid expenses and other current assets, refer to Note 6 - Prepaid and Other Current Assets . Payroll and other compensation expenses include all payroll related accruals including, among others, accrued vacation, severance, and bonuses. Insurance accruals primarily relate to accrued medical and workers compensation costs. Property, sales and other non-income related taxes includes accruals for items such as sales and use tax, property tax and other related tax accruals. Accrued interest relates to the interest accrued on our long-term debt. Other accruals include items such as contract liabilities and other accrued expenses. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES We recorded an income tax provision of $0.9 million for the three months ended March 31, 2023 compared to a provision of $0.5 million for the three months ended March 31, 2022. The effective tax rate, inclusive of discrete items, was a provision of 3.6% for the three months ended March 31, 2023, compared to a provision of 1.4% for the three months ended March 31, 2022. The effective tax rate differed from the statutory tax rate due to changes in the valuation allowance in certain jurisdictions. The substantial doubt about the Company’s ability to continue as a going concern basis casts doubt on our ability to estimate and generate future income. The lack of going concern basis applicable for our current financial statements generally requires a valuation allowance for all deferred tax assets that are not realizable through the reversal of existing timing differences or taxable income in carryback years. While several subsidiaries have historically been profitable and for which future income was a material factor in assessing the realizability of their deferred tax assets, the substantial doubt about the Company’s ability to continue on a going concern basis casts doubt on our ability to generate future income. Refer to Note 1 - Description of Business and Basis of Presentation for additional liquidity and going concern discussion. |
DEBT
DEBT | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT As of March 31, 2023 and December 31, 2022, our total long-term debt and finance lease obligations are summarized as follows (in thousands): March 31, 2023 December 31, 2022 (unaudited) 2022 ABL Credit Facility $ 93,915 $ 99,916 APSC Term Loan 33,599 31,562 Subordinated Term Loan 114,756 107,905 Total 242,270 239,383 Convertible Debt 1 40,922 40,650 Finance lease obligations 2 5,751 5,902 Total long-term debt and finance lease obligations 288,943 285,935 Current portion of long-term debt and finance lease obligations (284,102) (280,993) Total long-term debt and finance lease obligations, less current portion $ 4,841 $ 4,942 _________________ 1 Comprised of principal amount outstanding, less unamortized discount and issuance costs. See Convertible Debt section below for additional information. 2 Excludes finance lease obligations associated with discontinued operations. 2022 ABL Facility On February 11, 2022, we entered into a new credit agreement, with the lender parties thereto, and Eclipse Business Capital, LLC, a Delaware limited liability company, as agent, (“Eclipse”) (such agreement, as amended by Amendment No. 1 dated as of May 6, 2022 and Amendment No. 2 dated as of November 1, 2022 the “2022 ABL Credit Agreement”). Available funding commitments to us under the 2022 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 Loan”) provided by Corre Partners Management, LLC and certain of its affiliates (“Corre”) (collectively, the “2022 ABL Credit Facility”). The proceeds of the loans under the 2022 ABL Credit Facility were used to, among other things, pay off and terminate the 2020 ABL Credit Facility. The 2022 ABL Credit Facility is scheduled to mature in February 2025. Availability of the Revolving Credit Loans is subject to a Maturity Reserve Trigger Date (as defined in the 2022 ABL Credit Agreement) concept such that, subject to certain conditions, a reserve will be put into place with respect to the outstanding principal amount of the Notes 45 days prior to the maturity date of the Notes, or June 17, 2023, if on such date, the Notes balance is not paid down to less than $10.0 million, or the Company does not have equivalent cash on hand to pay down the Notes to $10.0 million. Our obligations under the 2022 ABL Credit Agreement are guaranteed by certain of our direct and certain indirect subsidiaries referenced below as the “ABL Guarantors” and, together with the Company, the “ABL Loan Parties.” Our obligations under the 2022 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 the 2022 ABL Credit Facility is based on a percentage of the value of qualifying accounts receivable and inventory, reduced by certain reserves. Revolving Credit Loans under the 2022 ABL Credit Facility bear interest through maturity at a variable rate based upon a LIBOR Rate (or a base rate 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 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 Loan bears 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 2022 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 2022 ABL Credit Facility from time to time, subject, in the case of the Delayed Draw Term Loan, 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 2022 ABL Credit Facility to the sum of the Delayed Draw Term Loan 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 2022 ABL Credit Agreement, subject, in the case of the Delayed Draw Term Loan to a maximum of four such borrowings in any 12-month period. Certain permanent repayments of the 2022 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 2022 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 2022 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 2022 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 2022 ABL Credit Facility. The interest rate as of March 31, 2023 was 9.31% for Revolving Credit Loans and 14.66% for the Delayed Draw Term Loan. The interest rate as of March 31, 2022 was 5.65% for Revolving Credit Loans and 11.00% for the Delayed Draw Term Loan. Interest expense on Revolving Credit Loans amounted to $1.4 million and $0.8 million for the three months ended March 31, 2023 and 2022, respectively. Cash interest paid on the Delayed Draw Term Loan amounted to $1.3 million and $0.1 million for the three months ended March 31, 2023 and 2022, respectively. Direct and incremental costs associated with the issuance of the 2022 ABL Credit Facility were approximately $8.4 million and were capitalized as deferred financing costs. The costs are amortized on a straight-line basis over the term of the 2022 ABL Credit Facility. Unamortized deferred financing cost amounted to $1.4 million and $3.1 million as of March 31, 2023 and December 31, 2022, respectively. Additionally, the amortization period for deferred financing costs and debt discounts and issuance cost was accelerated to reflect the revised Maturity Reserve Trigger Date and the related reclassification of debt as current. Refer to Note 1 - Description of Business and Basis of Presentation for additional liquidity and going concern discussion. As of March 31, 2023, we had $58.9 million of Revolving Credit Loans outstanding and $35.0 million outstanding under the Delayed Draw Term Loan. There were $8.9 million outstanding in letters of credit secured by these instruments, which are off-balance sheet. As of March 31, 2023, subject to the applicable sublimit and other terms and conditions, $27.3 million was available for loans or for issuance of new letters of credit. APSC Term Loan On December 18, 2020, we entered into that certain Term Loan Credit Agreement (as amended by Amendment No. 1, dated as of October 19, 2021, Amendment No. 2, dated as of October 29, 2021, Amendment No. 3, dated as of November 8, 2021, Amendment No. 4, dated as of December 2, 2021, Amendment No. 5, dated as of December 7, 2021 Amendment No. 6, dated as of February 11, 2022, Amendment No. 7, dated as of May 6, 2022, Amendment No. 8, dated as of November 1, 2022 and Amendment No. 9, dated as of November 4, 2022, the “Term Loan Credit Agreement”) with Atlantic Park Strategic Capital Fund, L.P., as agent (“APSC”), pursuant to which we borrowed $250.0 million (the “Term Loan”). The Term Loan was issued with a 3% original issuance discount, 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, on the Maturity Trigger Date (45 days prior to the maturity date of the Notes (currently June 17, 2023)), (i) the maturity date of the Notes has not been extended past the date that is 91 days after the sixth anniversary of the closing date of the Term Loan Credit Agreement or (ii) the Notes have an aggregate principal amount outstanding of $10.0 million or more, 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 2022 ABL Credit Facility, and we may, subject to the terms and conditions in the Term Loan Credit Agreement, increase the Term Loan by an amount not to exceed $100.0 million. The Term Loan bears 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 a fluctuating interest rate equal to the greater 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 Term Loan is prepayable in whole or in part, at any time and from time to time, subject to 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. As of March 31, 2023, the effective interest rate of 38.48% consisted of a 12.30% variable interest rate paid in cash and an additional 26.18% due to the acceleration of the amortization of the related debt issuance costs due to the Maturity Trigger Date provision. As of March 31, 2022, the effective interest rate of 12.22% consisted of a 10.00% weighted-average cash and PIK interest rate and an additional 2.22% due to the acceleration of the amortization of the related debt issuance costs due to the Maturity Trigger Date provision. The unamortized balances of debt discounts, warrant discount and debt issuance cost amounted to $1.9 million and $3.9 million at March 31, 2023 and December 31, 2022, respectively. Cash interest paid amounted to $1.1 million and $4.2 million for the three months ended March 31, 2023 and 2022, respectively. The Term Loan Credit Agreement 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. The Term Loan Credit Agreement contains a maximum net leverage ratio covenant that will begin being tested for the fiscal quarter ending June 30, 2023 and for each fiscal quarter thereafter at 7.00 to 1.00. Subordinated Term Loan Credit Agreement On November 9, 2021, we entered into a credit agreement (as amended by Amendment No. 1 dated as of November 30, 2021, Amendment No. 2 dated as of December 6, 2021,Amendment No. 3 dated as of December 7, 2021, Amendment No. 4 dated as of December 8, 2021, Amendment No. 5 dated as of February 11, 2022, Amendment No. 6 dated as of May 6, 2022, Amendment No. 7 dated as of June 28, 2022, Amendment No. 8 dated as of October 4, 2022, Amendment No. 9 dated as of November 1, 2022, Amendment No. 10 dated as of November 4, 2022, Amendment No. 11 dated as of November 21, 2022 and Amendment No. 12 dated as of March 29, 2023, the “Subordinated Term Loan Credit Agreement”) with Cantor Fitzgerald Securities, as agent, and the lenders party thereto providing for an unsecured approximately $119.0 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. An additional approximately $57.0 million was added to the outstanding principal amount under the Subordinated Term Loan Credit Agreement on October 4, 2022 via an exchange of the Company’s convertible debt. As of March 31, 2023, the availability date for the $10.0 million in Subordinated Term Loans remaining to be drawn is September 30, 2023. The Subordinated Term Loan matures, and all outstanding amounts become due and payable, on the earlier of December 31, 2027 and the date that is two weeks following the maturity or full repayment of APSC Term Loan. The stated interest rate on the Subordinated Term Loan is 12.00% which is payable in the form of paid-in-kind interest (“PIK Interest”). As of March 31, 2023, the effective interest rate of 30.32% consisted of 12.00% stated interest and an additional 18.32% due to the acceleration of the amortization of the related debt issuance costs due to the Trigger Date provision. At March 31, 2022, the effective interest rate of 19.61% consisted of the 12.00% stated interest and an additional 7.61% due to the acceleration of the amortization of the related debt issuance costs due to the Trigger Date provision. The unamortized debt issuance cost amounted to $4.1 million and $7.5 million as of March 31, 2023 and December 31, 2022, respectively. PIK interest expense amounted to $3.5 million and $1.5 million for the three months ended March 31, 2023 and 2022, respectively. The Subordinated Term Loan Credit Agreement 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. The Subordinated Term Loan Credit Agreement contains a maximum net leverage ratio covenant that will begin being tested for the fiscal quarter ending June 30, 2023 and for each fiscal quarter thereafter at 7.00 to 1.00. On March 29, 2023, we entered into Amendment No. 12 to the Subordinated Term Loan Credit Agreement (“Corre Amendment 12”) with the lenders from time to time party thereto (including Corre), and Cantor Fitzgerald Securities, as agent. Corre Amendment 12 amended the Subordinated Term Loan Credit Agreement to, inter alia , extend the availability date for the remaining $10.0 million in Subordinated Term Loans to September 30, 2023 rather than March 31, 2023. Warrants As of March 31, 2023 and December 31, 2022, we held the following warrants: Original After Reverse Stock Split (Effective date December 22, 2022) Holder Date Number of shares Exercise price Expiration date Number of shares Exercise price Expiration date APSC Holdco II, LP Original, as awarded 12/18/2020 3,582,949 $ 7.75 6/14/2028 Amended 11/9/2021 500,000 $ 1.50 6/14/2028 Amended 12/8/2021 917,051 $ 1.50 12/8/2028 Total APSC 5,000,000 $ 1.50 12/8/2028 500,000 $ 15.00 12/8/2028 Corre 12/8/2021 5,000,000 $ 1.50 12/8/2028 500,000 $ 15.00 12/8/2028 Total warrants 10,000,000 1,000,000 On December 18, 2020, in connection with the execution of the Term Loan Credit Agreement, we issued to APSC warrants to purchase up to 3,582,949 shares of our common stock, which were 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. In connection with execution of the Subordinated Term Loan Credit Agreement and Term Loan Amendment No. 3, 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 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 (i) 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 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) the Common Stock Purchase Warrants (collectively, the “Corre Warrants” and, 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. Following the Reverse Stock Split, the Warrants provide for the purchase of up to 1,000,000 shares of our common stock at an exercise price of $15.00 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 (as defined 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 On February 11, 2022, we entered into a common stock subscription agreement (the “Subscription Agreement”) with Corre Opportunities Qualified Master Fund, LP, Corre Horizon Fund, LP and Corre Horizon II Fund LP (collectively, the “Corre Holders”), pursuant to which the Company issued and sold 1,190,476 shares of our common stock to the Corre Holders at a price of $8.40 per share (the “Equity Issuance”) on February 11, 2022. In accordance with, and subject to the terms and conditions of the Subscription Agreement, the Board was 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 For so long as the Corre Holders and their affiliates collectively beneficially own at least 10% of the outstanding shares of our common stock, pursuant to and subject to the terms and conditions of the Subscription Agreement, we will nominate the initial Board Nominee, or a successor Board Nominee chosen by the Corre Holders, for re-election as a Class II director at the first annual meeting of the Company’s stockholders to be held after the Equity Issuance and at the end of each subsequent term of such Board Nominee. If at any time, the Corre Holders and their affiliates beneficially own less than 10% of the outstanding shares of common stock, then, if requested by the Company, the Board Nominee then on the Board will resign from his or her directorship, effective as of our next annual meeting of stockholders or such earlier date reasonably requested by the Company. Convertible Notes Description of the Notes On July 31, 2017, we issued $230.0 million principal amount of senior unsecured 5.00% Convertible Senior Notes (the “Notes”) due 2023 in a private offering to qualified institutional buyers (as defined in the Securities Act of 1933) pursuant to Rule 144A under the Securities Act (the “Offering”). The Notes bear interest at a rate of 5.0% per year, payable semiannually in arrears on February 1 and August 1 of each year, beginning on February 1, 2018. The Notes mature on August 1, 2023 unless repurchased, redeemed or converted in accordance with their terms prior to such date. As a result of the Reverse Stock Split, the Notes are convertible at a conversion rate of 4.6083 shares of our common stock per $1,000 principal amount of the Notes, which is equivalent to a conversion price of approximately $217.00 per share. The conversion rate, and thus the conversion price, may be further adjusted under certain circumstances as described in the indenture governing the Notes. Pursuant to the Exchange Agreement (as defined below), the Company agreed to exchange approximately $57.0 million of aggregate principal amount, plus accrued and unpaid PIK Interest, of the PIK Securities (as defined below) beneficially owned by the Exchanging Holders (as defined below) for an equivalent increased principal amount of term loans under the Subordinated Term Loan Credit Agreement. Following the closing of the Exchange Agreement and Amendment No. 8 to the Subordinate Term Loan Credit Agreement, the Company has approximately $41.2 million in aggregate principal amount of Notes outstanding, which pay interest at a rate of 5.00% per annum entirely in cash. As a result of the redemption and extinguishment of the Notes discussed below, the execution of the Exchange Agreement described below, the Notes are currently convertible into 189,682 shares of common stock. The Notes will be convertible into, subject to various conditions, cash or shares of our common stock or a combination of cash and shares of our common stock, in each case, at our election. The indenture governing the Notes provides that we have the option to redeem all or any portion of the Notes since August 5, 2021, if certain conditions are met (including that our common stock is trading at or above 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including the trading day immediately preceding the date on which we provide notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which we provide notice of redemption) at a redemption price equal to 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. Net proceeds received from the Offering were approximately $222.3 million after deducting discounts, commissions and expenses and were used to repay outstanding borrowings under the previous Credit Facility. On January 13, 2022, we entered into a supplemental indenture (the “Supplemental Indenture”) with Truist Bank, as trustee, to the indenture governing the Notes (the “Indenture”) to effect certain amendments (the “Amendments”) to the Indenture and to modify the Notes held by consenting holders (the “Consenting Holders”) of $52.0 million in aggregate principal amount of the Notes (such modified Notes, the “PIK Securities”). The Supplemental Indenture amended the Indenture to, among other things: (i) allow for interest payable on the PIK Securities on February 1, 2022 to be paid in PIK Interest (as defined in the Supplemental Indenture) and on subsequent interest payment dates to be payable, at the Company’s option, at a rate of 5.00% per annum entirely in cash or at a rate of 8.00% per annum in PIK Interest; (ii) provide for additional changes to the Indenture to allow for the payment of PIK Interest and for the PIK Securities to be issued in denominations of $1,000 and integral multiples thereof (or if PIK Interest has been paid with respect to the PIK Securities, in minimum denominations of $1.00 and integral multiples of $1.00 in excess thereof); (iii) clarify that the unmodified Notes and PIK Securities will be treated as a single series of Notes for all purposes under the Indenture, other than the option of the Company to pay PIK Interest on the PIK Securities; and (iv) make certain conforming changes, including conforming modifications to certain definitions and cross-references as a result of such amendments. Notes held by holders other than the Consenting Holders were not modified and interest on such Notes will continue to be paid in cash at a rate of 5.00% per annum as set forth in the Indenture. On October 4, 2022, we entered into an exchange agreement (the “Exchange Agreement”) by and among us and certain holders (collectively, the “Exchanging Holders”) of the PIK Securities. Pursuant to the Exchange Agreement, we agreed to exchange approximately $57.0 million of aggregate principal amount, plus accrued and unpaid PIK Interest, of PIK Securities beneficially owned by the Exchanging Holders for an equivalent increased principal amount of term loans (the “New Term Loans”) under the Subordinated Term Loan Credit Agreement. Following the closing of the Exchange Agreement and Amendment 8 to the Subordinated Term Loan Credit Agreement, we had approximately $41.2 million in aggregate principal amount of Notes outstanding, which pay interest at a rate of 5.00% per annum entirely in cash. The exchange of the Notes into the New Term Loans was treated as debt modification and the unamortized balance of debt issuance and discount in the amount of $1.4 million was added to the modified debt and is amortized over the term of the Term Loan using the new effective interest rate. Accounting Treatment of the Notes As of March 31, 2023 and December 31, 2022, the Notes were recorded in our condensed consolidated balance sheet as follows (in thousands): March 31, 2023 December 31, 2022 (unaudited) Liability component: Principal $ 41,162 $ 41,162 Unamortized issuance costs (177) (377) Unamortized discount (63) (135) Net carrying amount of the liability component 1 $ 40,922 $ 40,650 Equity component: Carrying amount of the equity component, net of issuance costs 2 $ 37,276 $ 37,276 _________________ 1 Included in the “Current portion of 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 815-15 (defined below) and is included in the “Additional paid-in capital” line of the condensed consolidated balance sheets. Under ASC 470-20, Debt with Conversion and Other Options, (“ASC 470-20”), an entity must separately account for the liability and equity components of convertible debt instruments that may be settled entirely or partially in cash upon conversion (such as the Notes) in a manner that reflects the issuer’s economic interest cost. However, entities must first consider the guidance in ASC 815-15, Embedded Derivatives (“ASC 815-15”), to determine if an instrument contains an embedded feature that should be separately accounted for as a derivative. Fair Value of Debt The fair value of our 2022 ABL Credit Facility, Term Loan and Subordinated Term Loan are 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 the Notes as of March 31, 2023 and December 31, 2022 was $34.0 million and $37.5 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. 1970 Group Substitute Insurance Reimbursement Facility The 1970 Group extended us credit in the form of a substitute reimbursement facility (the “Substitute Reimbursement Facility”) to provide up to approximately $21.4 million of letters of credit on our behalf in support of our workers’ compensation, commercial automotive and general liability insurance policies (the “Insurance Policies”). The 1970 Group arranged for the issuance of letters of credit from financial institutions approved by the National Association of Insurance Commissioners. Such letters of credit arranged by the 1970 Group permitted the return of certain existing letters of credit for our account that were outstanding for the purpose of supporting the Insurance Policies and that were required to be collateralized, thereby providing us increased liquidity in the amount of approximately $21.3 million. We are required to reimburse the 1970 Group for any draws made under the letters of credit within five business days of notice of any such draw. The Substitute Insurance Reimbursement Facility Agreement terminates upon the earlier of (i) the expiration or termination of our Insurance Policies or (ii) September 29, 2023. According to the provisions of ASC 470 – Debt, the arrangement is a Substitute Insurance Reimbursement Facility limited to the amounts drawn under the letters of credit. Therefore, until there is a draw on the Substitute Insurance Reimbursement Facility, the letters of credit are treated as an off-balance sheet credit arrangement. The fees in the amount of $2.9 million paid by us are deferred and amortized to interest expense over the term of the arrangement. As of March 31, 2023, the unamortized balance in the amount of $0.7 million is included in other current assets. Deferred Financing Costs, Debt and Warrant Discounts and Debt Issuance Cost As referenced above, all debt with original maturities greater than one year are classified as current as of March 31, 2023 due to the Trigger Date provisions. As of March 31, 2023 and December 31, 2022, capitalized deferred financing costs, inclusive of debt issuance costs and discounts, net of accumulated amortization, related to Team’s outstanding debt were $7.7 million and $15.1 million, respectively. Due to the Trigger Date provisions, the amortization period for deferred financing costs, debt and warrant discounts and debt issuance costs was updated to reflect the potential accelerated maturity date of June 17, 2023. Refer to Note 1 - Description of Business and Basis of Presentation for additional liquidity and going concern discussion. Liquidity As of March 31, 2023, we had $26.4 million of unrestricted cash and cash equivalents and $5.5 million of restricted cash including $4.5 million of restricted cash held as collateral for letters of credit and commercial card programs. Inte |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 3 Months Ended |
Mar. 31, 2023 | |
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, 2023 2022 (unaudited) (unaudited) Interest cost 687 $ 422 Expected return on plan assets (925) $ (629) Amortization of prior service cost 8 $ 8 Unrecognized Net Actuarial Loss $ 71 $ — Net periodic pension credit $ (159) $ (199) Net pension credit is included in “Other income, net” on our condensed consolidated statement of operations. 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: 6.4% overall, 9.5% for equities and 5.3% for debt securities. We expect to contribute $3.7 million to the U.K. Plan for 2023, of which $0.9 million has been contributed through March 31, 2023. |
STOCKHOLDERS_ EQUITY
STOCKHOLDERS’ EQUITY | 3 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
STOCKHOLDERS’ EQUITY | STOCKHOLDERS’ EQUITY Shareholder’s Equity and Preferred Stock On December 21, 2022, we completed a reverse stock split of our outstanding common stock at a ratio of one-for-ten. The Reverse Stock Split effected a proportionate reduction in our authorized shares of common stock from 120,000,000 shares to 12,000,000 shares and reduced the number of shares of common stock outstanding from approximately 43,429,089 shares to approximately 4,342,909 shares. We have made proportionate adjustments to the number of common shares issuable upon exercise or conversion of our outstanding warrants, equity awards and convertible securities, as well as the applicable exercise prices and weighted average fair value of the equity awards. No fractional shares were issued in connection with the Reverse Stock Split. As of March 31, 2023 there were 4,357,401 shares of our common stock outstanding and 12,000,000 shares authorized at $0.30 par value per share. As of March 31, 2023 we had 500,000 authorized shares of preferred stock, none of which had been issued. Accumulated Other Comprehensive Income (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 Defined Benefit Pension Plans Tax Total Foreign Defined Benefit Pension Plans Tax Total Balance, beginning of period $ (28,859) $ (10,474) $ 336 $ (38,997) $ (22,270) $ (3,873) $ (589) $ (26,732) Other comprehensive income (loss) 778 — (23) 755 $ 346 $ — $ — 346 Balance, end of period $ (28,081) $ (10,474) $ 313 $ (38,242) $ (21,924) $ (3,873) $ (589) $ (26,386) |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES 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 condensed consolidated financial statements. California Wage and Hour Litigation - The Company was a defendant in a consolidated class and collective action, Michael Thai v. Team Industrial Services, Inc., et al, pending in the U.S. District Court for the Central District of California, originally filed by two separate plaintiffs as separate cases in the Superior Court for the County of Los Angeles, California in June 2019 and August 2020, respectively. The Company settled the consolidated class and collective action in 2022 that resulted in the Company recording a pre-tax charge of $3.0 million in the third quarter of fiscal year 2022, and the Company paid the settlement in January 2023. 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 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 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 $222.0 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 that 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. 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. 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 $13.0 million and approximately $51.0 million, and we have accrued a liability as of March 31, 2023 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 $3.0 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. Accordingly, for all matters discussed above, we have accrued in the aggregate approximately $41.2 million as of March 31, 2023, of which approximately $2.2 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 condensed consolidated financial statements. |
SEGMENT AND GEOGRAPHIC DISCLOSU
SEGMENT AND GEOGRAPHIC DISCLOSURES | 3 Months Ended |
Mar. 31, 2023 | |
Segment Reporting [Abstract] | |
SEGMENT AND GEOGRAPHIC DISCLOSURES | SEGMENT AND GEOGRAPHIC DISCLOSURES ASC 280, Segment Reporting , requires us to disclose certain information about our operating segments. 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 two segments: IHT and MS. Segment data for our two operating segments are as follows (in thousands): Three Months Ended 2023 2022 (unaudited) (unaudited) Revenues: IHT $ 101,829 $ 95,595 MS 100,448 93,441 Total Revenues $ 202,277 $ 189,036 Three Months Ended 2023 2022 (unaudited) (unaudited) Operating income (loss): IHT $ 4,723 $ 134 MS 3,193 513 Corporate and shared support services (15,662) (23,054) Total Operating income (loss) $ (7,746) $ (22,407) Three Months Ended 2023 2022 (unaudited) (unaudited) Capital expenditures 1 : IHT $ 1,427 $ 4,771 MS 601 813 Corporate and shared support services — 38 Total Capital expenditures $ 2,028 $ 5,622 _____________ 1 Excludes finance leases. Totals may vary from amounts presented in the condensed consolidated statements of cash flows due to the timing of cash payments. Three Months Ended 2023 2022 (unaudited) (unaudited) Depreciation and amortization: IHT $ 3,054 $ 3,254 MS 4,753 4,884 Corporate and shared support services 1,739 1,316 Total Depreciation and amortization $ 9,546 $ 9,454 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 for the three months ended March 31, 2023 and 2022 is as follows (in thousands): Three Months Ended 2023 2022 (unaudited) (unaudited) Total Revenues 1 United States $ 152,494 $ 137,940 Canada 18,068 19,367 Europe 16,331 14,173 Other foreign countries 15,384 17,556 Total $ 202,277 $ 189,036 ______________ 1 Revenues attributable to individual countries/geographic areas are based on the country of domicile of the legal entity that performs the work. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2023 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS Alvarez & Marsal provided certain consulting services to the Company in connection with our former Interim Chief Financial Officer position and other corporate support costs. Effective June 12, 2022 the Interim Chief Financial Officer position ended as the Company named a permanent Chief Financial Officer. The Company paid $8.1 million in consulting fees to Alvarez & Marsal for the year ended December 31, 2022. In connection with the Company’s debt transactions, the Company engaged in transactions with Corre and APSC to provide funding as described in Note 11 - Debt . |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTSAs of May 11, 2023, the filing date of this Quarterly Report on Form 10-Q, management evaluated the existence of events occurring subsequent to the quarter ended March 31, 2023, and determined that there were no events or transactions that would have a material impact on the Company’s results of operations or financial position. |
DESCRIPTION OF BUSINESS AND B_2
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis for presentation | Basis for presentation. These condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) and the rules and regulations of the Securities and Exchange Commission. 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 condensed consolidated 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, 2022 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. |
Reclassifications | Reclassifications. Certain amounts in prior periods have been reclassified to conform to the current year presentation, including the separate presentation and reporting of discontinued operations. Such reclassifications did not have any effect on our financial condition or results of operations as previously reported. |
Discontinued operations | Discontinued operations. On November 1, 2022, we completed the sale of Quest Integrity. The criteria for reporting Quest Integrity as a discontinued operation were met as of completion of the Quest Integrity sale transaction and, as such, the prior year amounts presented in this Form 10-Q has been recast to present Quest Integrity as a discontinued operation. Unless otherwise specified, the financial information and discussion in this Form 10-Q are based on our continuing operations (IHT and MS segments) and exclude any results of our discontinued operations (Quest Integrity). Refer to Note 2 - Discontinued Operations for additional details. |
DISCONTINUED OPERATIONS (Tables
DISCONTINUED OPERATIONS (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Discontinued Operations | The table below represents the reconciliation of the major line items consisting of pretax income from discontinued operations to the after-tax income from discontinued operations (in thousands): Three Months Ended Major classes of line items constituting income (loss) from discontinued operations Revenues $ 29,540 Operating expenses (15,570) Selling, general and administrative expenses (7,766) Interest expense, net (26) Other expense (477) Income from discontinued operations before income taxes 5,701 Benefit from income taxes 170 Net income from discontinued operations $ 5,871 The following table presents the depreciation and amortization and capital expenditures of Quest Integrity (in thousands): Three Months Ended March 31, 2022 (unaudited) Cash flows provided by operating activities of discontinued operations: Depreciation and amortization $ 577 Cash flows provided by investing activities of discontinued operations: Capital expenditures $ 931 |
REVENUE (Tables)
REVENUE (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
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, 2023 (unaudited) United States and Canada Other Countries Total Revenue: IHT $ 98,531 $ 3,298 $ 101,829 MS 72,031 28,417 100,448 Total $ 170,562 $ 31,715 $ 202,277 Three Months Ended March 31, 2022 (unaudited) United States and Canada Other Countries Total Revenue: IHT $ 93,376 $ 2,219 95,595 MS 63,931 29,510 93,441 Total $ 157,307 $ 31,729 $ 189,036 Operating segment and service type: Three Months Ended March 31, 2023 (unaudited) Non-Destructive Evaluation and Testing Services Repair and Maintenance Services Heat Treating Other Total Revenue: IHT $ 81,606 $ 3 $ 13,728 $ 6,492 $ 101,829 MS — 99,838 278 332 100,448 Total $ 81,606 $ 99,841 $ 14,006 $ 6,824 $ 202,277 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 Total $ 76,449 $ 91,794 $ 13,896 $ 6,897 $ 189,036 |
Contract with Customer, Asset and Liability | The following table provides information about trade accounts receivable, and contract assets as of March 31, 2023 and December 31, 2022 (in thousands): March 31, 2023 December 31, 2022 Change (unaudited) Trade accounts receivable, net 1 $ 178,211 $ 186,689 $ (8,478) Contract assets 2 $ 2 $ 2 $ — _________________ 1 Includes billed and unbilled amounts, net of allowance for credit losses. See Note 4 - Receivables for details. 2 Included in the “Prepaid expenses and other current assets” line on the condensed consolidated balance sheet. |
RECEIVABLES (Tables)
RECEIVABLES (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Receivables [Abstract] | |
Summary of Accounts Receivable | A summary of accounts receivable as of March 31, 2023 and December 31, 2022 is as follows (in thousands): March 31, 2023 December 31, 2022 (unaudited) Trade accounts receivable $ 142,723 $ 160,572 Unbilled receivables 40,414 31,379 Allowance for credit losses (4,926) (5,262) Total $ 178,211 $ 186,689 |
Allowance for Credit Loss | The following table shows a rollforward of the allowance for credit losses (in thousands): March 31, 2023 December 31, 2022 (unaudited) Balance at beginning of period $ 5,262 $ 7,843 Provision for expected credit losses 155 1,059 Recoveries collected (351) (1,114) Write-offs (96) (2,479) Foreign exchange effects (44) (47) Balance at end of period $ 4,926 $ 5,262 |
INVENTORY (Tables)
INVENTORY (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Inventory Disclosure [Abstract] | |
Summary of Inventory | A summary of inventory as of March 31, 2023 and December 31, 2022 is as follows (in thousands): March 31, 2023 December 31, 2022 (unaudited) Raw materials $ 9,742 $ 8,978 Work in progress 2,910 2,945 Finished goods 25,346 24,408 Total $ 37,998 $ 36,331 |
PREPAID AND OTHER CURRENT ASS_2
PREPAID AND OTHER CURRENT ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
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, 2023 and December 31, 2022 is as follows (in thousands): March 31, 2023 December 31, 2022 (unaudited) Insurance receivable $ 39,000 $ 39,000 Prepaid expenses 15,009 15,238 Other current assets 8,693 11,441 Total $ 62,702 $ 65,679 |
PROPERTY, PLANT AND EQUIPMENT (
PROPERTY, PLANT AND EQUIPMENT (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property, Plant and Equipment | A summary of property, plant and equipment as of March 31, 2023 and December 31, 2022 is as follows (in thousands): March 31, 2023 December 31, 2022 (unaudited) Land $ 4,006 $ 4,006 Buildings and leasehold improvements 61,594 50,833 Machinery and equipment 283,661 277,852 Furniture and fixtures 10,784 10,558 Capitalized ERP system development costs 45,903 45,917 Computers and computer software 19,788 19,457 Automobiles 3,472 3,536 Construction in progress 2,311 19,196 Total 431,519 431,355 Accumulated depreciation (296,999) (293,256) Property, plant and equipment, net $ 134,520 $ 138,099 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Intangible Assets | A summary of intangible assets as of March 31, 2023 and December 31, 2022 is as follows (in thousands): March 31, 2023 (unaudited) Gross Accumulated Net Customer relationships $ 165,267 $ (94,409) $ 70,858 Trade names 20,570 (19,895) 675 Technology 2,712 (2,042) 670 Licenses 843 (843) — Intangible assets $ 189,392 $ (117,189) $ 72,203 December 31, 2022 Gross Accumulated Net Customer relationships $ 165,231 $ (91,296) $ 73,935 Trade names 20,563 (19,830) 733 Technology 2,707 (1,978) 729 Licenses 840 (830) 10 Intangible assets $ 189,341 $ (113,934) $ 75,407 |
OTHER ACCRUED LIABILITIES (Tabl
OTHER ACCRUED LIABILITIES (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Payables and Accruals [Abstract] | |
Summary of Other Accrued Liabilities | A summary of other accrued liabilities as of March 31, 2023 and December 31, 2022 is as follows (in thousands): March 31, 2023 December 31, 2022 (unaudited) Legal and professional accruals $ 43,856 $ 46,665 Payroll and other compensation expenses 37,745 48,507 Insurance accruals 6,136 7,483 Property, sales and other non-income related taxes 3,815 7,348 Accrued interest 3,385 3,963 Volume discount 2,179 2,050 Other accruals 2,192 3,251 Total $ 99,308 $ 119,267 |
DEBT (Tables)
DEBT (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt | As of March 31, 2023 and December 31, 2022, our total long-term debt and finance lease obligations are summarized as follows (in thousands): March 31, 2023 December 31, 2022 (unaudited) 2022 ABL Credit Facility $ 93,915 $ 99,916 APSC Term Loan 33,599 31,562 Subordinated Term Loan 114,756 107,905 Total 242,270 239,383 Convertible Debt 1 40,922 40,650 Finance lease obligations 2 5,751 5,902 Total long-term debt and finance lease obligations 288,943 285,935 Current portion of long-term debt and finance lease obligations (284,102) (280,993) Total long-term debt and finance lease obligations, less current portion $ 4,841 $ 4,942 _________________ 1 Comprised of principal amount outstanding, less unamortized discount and issuance costs. See Convertible Debt section below for additional information. 2 Excludes finance lease obligations associated with discontinued operations. |
Schedule of Warrants or Rights | As of March 31, 2023 and December 31, 2022, we held the following warrants: Original After Reverse Stock Split (Effective date December 22, 2022) Holder Date Number of shares Exercise price Expiration date Number of shares Exercise price Expiration date APSC Holdco II, LP Original, as awarded 12/18/2020 3,582,949 $ 7.75 6/14/2028 Amended 11/9/2021 500,000 $ 1.50 6/14/2028 Amended 12/8/2021 917,051 $ 1.50 12/8/2028 Total APSC 5,000,000 $ 1.50 12/8/2028 500,000 $ 15.00 12/8/2028 Corre 12/8/2021 5,000,000 $ 1.50 12/8/2028 500,000 $ 15.00 12/8/2028 Total warrants 10,000,000 1,000,000 |
Schedule of Convertible Debt | As of March 31, 2023 and December 31, 2022, the Notes were recorded in our condensed consolidated balance sheet as follows (in thousands): March 31, 2023 December 31, 2022 (unaudited) Liability component: Principal $ 41,162 $ 41,162 Unamortized issuance costs (177) (377) Unamortized discount (63) (135) Net carrying amount of the liability component 1 $ 40,922 $ 40,650 Equity component: Carrying amount of the equity component, net of issuance costs 2 $ 37,276 $ 37,276 _________________ 1 Included in the “Current portion of 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 815-15 (defined below) and is included in the “Additional paid-in capital” line of the condensed consolidated balance sheets. |
EMPLOYEE BENEFIT PLANS (Tables)
EMPLOYEE BENEFIT PLANS (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
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, 2023 2022 (unaudited) (unaudited) Interest cost 687 $ 422 Expected return on plan assets (925) $ (629) Amortization of prior service cost 8 $ 8 Unrecognized Net Actuarial Loss $ 71 $ — Net periodic pension credit $ (159) $ (199) |
STOCKHOLDERS_ EQUITY (Tables)
STOCKHOLDERS’ EQUITY (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
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 Defined Benefit Pension Plans Tax Total Foreign Defined Benefit Pension Plans Tax Total Balance, beginning of period $ (28,859) $ (10,474) $ 336 $ (38,997) $ (22,270) $ (3,873) $ (589) $ (26,732) Other comprehensive income (loss) 778 — (23) 755 $ 346 $ — $ — 346 Balance, end of period $ (28,081) $ (10,474) $ 313 $ (38,242) $ (21,924) $ (3,873) $ (589) $ (26,386) |
SEGMENT AND GEOGRAPHIC DISCLO_2
SEGMENT AND GEOGRAPHIC DISCLOSURES (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Segment Reporting [Abstract] | |
Segment Data for our Three Operating Segments | Segment data for our two operating segments are as follows (in thousands): Three Months Ended 2023 2022 (unaudited) (unaudited) Revenues: IHT $ 101,829 $ 95,595 MS 100,448 93,441 Total Revenues $ 202,277 $ 189,036 Three Months Ended 2023 2022 (unaudited) (unaudited) Operating income (loss): IHT $ 4,723 $ 134 MS 3,193 513 Corporate and shared support services (15,662) (23,054) Total Operating income (loss) $ (7,746) $ (22,407) Three Months Ended 2023 2022 (unaudited) (unaudited) Capital expenditures 1 : IHT $ 1,427 $ 4,771 MS 601 813 Corporate and shared support services — 38 Total Capital expenditures $ 2,028 $ 5,622 _____________ 1 Excludes finance leases. Totals may vary from amounts presented in the condensed consolidated statements of cash flows due to the timing of cash payments. Three Months Ended 2023 2022 (unaudited) (unaudited) Depreciation and amortization: IHT $ 3,054 $ 3,254 MS 4,753 4,884 Corporate and shared support services 1,739 1,316 Total Depreciation and amortization $ 9,546 $ 9,454 |
Geographic Breakdown of Revenues | A geographic breakdown of our revenues for the three months ended March 31, 2023 and 2022 is as follows (in thousands): Three Months Ended 2023 2022 (unaudited) (unaudited) Total Revenues 1 United States $ 152,494 $ 137,940 Canada 18,068 19,367 Europe 16,331 14,173 Other foreign countries 15,384 17,556 Total $ 202,277 $ 189,036 ______________ 1 Revenues attributable to individual countries/geographic areas are based on the country of domicile of the legal entity that performs the work. |
DESCRIPTION OF BUSINESS AND B_3
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (Details) | 3 Months Ended | |||||
Dec. 21, 2022 shares | Nov. 01, 2022 Segment | Feb. 11, 2022 USD ($) | Mar. 31, 2023 USD ($) segment shares | Dec. 20, 2022 shares | Jul. 31, 2017 USD ($) | |
Debt Instrument [Line Items] | ||||||
Number of operating segments | 2 | 2 | ||||
Reverse stock split ratio | 0.1 | |||||
Common stock, shares authorized (in shares) | shares | 12,000,000 | 12,000,000 | 120,000,000 | |||
Common stock, shares, outstanding (in shares) | shares | 4,342,909 | 43,429,089 | ||||
Convertible debt | ||||||
Debt Instrument [Line Items] | ||||||
Principal amount, long-term debt issued | $ 41,200,000 | $ 230,000,000 | ||||
Periodic payment | $ 10,000,000 | 10,000,000 | ||||
Fair value of our convertible senior notes | $ 10,000,000 | $ 10,000,000 |
DISCONTINUED OPERATIONS - Addit
DISCONTINUED OPERATIONS - Additional Information (Details) $ in Millions | 3 Months Ended | ||
Nov. 01, 2022 USD ($) Segment | Mar. 31, 2023 segment | Mar. 31, 2022 USD ($) | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Repayment of principal debt balance | $ 225 | ||
Number of operating segments | 2 | 2 | |
Quest Integrity | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Purchase and sale agreement, consideration | $ 279 | ||
Net proceeds used to pay down term debt | $ 238 | ||
Accrued capital expenditures | $ 0.3 |
DISCONTINUED OPERATIONS - Sched
DISCONTINUED OPERATIONS - Schedule of Discontinued Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Major classes of line items constituting income (loss) from discontinued operations | ||
Net income from discontinued operations | $ 0 | $ 5,871 |
Quest Integrity | ||
Major classes of line items constituting income (loss) from discontinued operations | ||
Revenues | 29,540 | |
Operating expenses | (15,570) | |
Selling, general and administrative expenses | (7,766) | |
Interest expense, net | (26) | |
Other expense | (477) | |
Income from discontinued operations before income taxes | 5,701 | |
Benefit from income taxes | 170 | |
Net income from discontinued operations | 5,871 | |
Cash flows provided by operating activities of discontinued operations: | ||
Depreciation and amortization | 577 | |
Cash flows provided by investing activities of discontinued operations: | ||
Capital expenditures | $ 931 |
REVENUE - Disaggregation of Rev
REVENUE - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 202,277 | $ 189,036 |
Non-Destructive Evaluation and Testing Services | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 81,606 | 76,449 |
Repair and Maintenance Services | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 99,841 | 91,794 |
Heat Treating | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 14,006 | 13,896 |
Other | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 6,824 | 6,897 |
IHT | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 101,829 | 95,595 |
IHT | Non-Destructive Evaluation and Testing Services | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 81,606 | 76,449 |
IHT | Repair and Maintenance Services | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 3 | 24 |
IHT | Heat Treating | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 13,728 | 13,839 |
IHT | Other | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 6,492 | 5,283 |
MS | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 100,448 | 93,441 |
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 | 99,838 | 91,770 |
MS | Heat Treating | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 278 | 57 |
MS | Other | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 332 | 1,614 |
United States and Canada | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 170,562 | 157,307 |
United States and Canada | IHT | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 98,531 | 93,376 |
United States and Canada | MS | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 72,031 | 63,931 |
Other Countries | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 31,715 | 31,729 |
Other Countries | IHT | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 3,298 | 2,219 |
Other Countries | MS | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 28,417 | $ 29,510 |
REVENUE - Contract Balances (De
REVENUE - Contract Balances (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | ||
Trade accounts receivable, net | $ 178,211 | $ 186,689 |
Contract assets | 2 | $ 2 |
Change in trade accounts receivable, net | (8,478) | |
Change in contract assets | $ 0 |
RECEIVABLES - Summary of Accoun
RECEIVABLES - Summary of Accounts Receivable (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Receivables [Abstract] | |||
Trade accounts receivable | $ 142,723 | $ 160,572 | |
Unbilled receivables | 40,414 | 31,379 | |
Allowance for credit losses | (4,926) | (5,262) | $ (7,843) |
Total | $ 178,211 | $ 186,689 |
RECEIVABLES - Additional Inform
RECEIVABLES - Additional Information (Details) | 3 Months Ended |
Mar. 31, 2023 | |
Receivables [Abstract] | |
Accounts receivable, payment terms | 90 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, 2023 | Dec. 31, 2022 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
Balance at beginning of period | $ 5,262 | $ 7,843 |
Provision for expected credit losses | 155 | 1,059 |
Recoveries collected | (351) | (1,114) |
Write-offs | (96) | (2,479) |
Foreign exchange effects | (44) | (47) |
Balance at end of period | $ 4,926 | $ 5,262 |
INVENTORY (Details)
INVENTORY (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 9,742 | $ 8,978 |
Work in progress | 2,910 | 2,945 |
Finished goods | 25,346 | 24,408 |
Total | $ 37,998 | $ 36,331 |
PREPAID AND OTHER CURRENT ASS_3
PREPAID AND OTHER CURRENT ASSETS (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Insurance receivable | $ 39,000 | $ 39,000 |
Prepaid expenses | 15,009 | 15,238 |
Other current assets | 8,693 | 11,441 |
Total | 62,702 | 65,679 |
Debt issuance costs, current, net | 1,400 | |
Debt issuance costs, net | 7,700 | $ 15,100 |
1970 Group | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Debt issuance costs, net | $ 700 |
PROPERTY, PLANT AND EQUIPMENT -
PROPERTY, PLANT AND EQUIPMENT - Summary of Property, Plant and Equipment (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Total | $ 431,519 | $ 431,355 |
Accumulated depreciation | (296,999) | (293,256) |
Property, Plant, and Equipment and Finance Lease Right-of-Use Asset, after Accumulated Depreciation and Amortization, Total | 134,520 | 138,099 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Total | 4,006 | 4,006 |
Buildings and leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total | 61,594 | 50,833 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total | 283,661 | 277,852 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Total | 10,784 | 10,558 |
Capitalized ERP system development costs | ||
Property, Plant and Equipment [Line Items] | ||
Total | 45,903 | 45,917 |
Computers and computer software | ||
Property, Plant and Equipment [Line Items] | ||
Total | 19,788 | 19,457 |
Automobiles | ||
Property, Plant and Equipment [Line Items] | ||
Total | 3,472 | 3,536 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Total | $ 2,311 | $ 19,196 |
PROPERTY, PLANT AND EQUIPMENT_2
PROPERTY, PLANT AND EQUIPMENT - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |||
Assets under finance leases | $ 7.4 | $ 7.4 | |
Accumulated amortization for assets under finance leases | 2.5 | $ 2.3 | |
Depreciation expense | $ 5.6 | $ 6.5 |
INTANGIBLE ASSETS - Summary of
INTANGIBLE ASSETS - Summary of Intangible Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 189,392 | $ 189,341 |
Accumulated Amortization | (117,189) | (113,934) |
Net Carrying Amount | 72,203 | 75,407 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 165,267 | 165,231 |
Accumulated Amortization | (94,409) | (91,296) |
Net Carrying Amount | 70,858 | 73,935 |
Trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 20,570 | 20,563 |
Accumulated Amortization | (19,895) | (19,830) |
Net Carrying Amount | 675 | 733 |
Technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 2,712 | 2,707 |
Accumulated Amortization | (2,042) | (1,978) |
Net Carrying Amount | 670 | 729 |
Licenses | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 843 | 840 |
Accumulated Amortization | (843) | (830) |
Net Carrying Amount | $ 0 | $ 10 |
INTANGIBLE ASSETS - Additional
INTANGIBLE ASSETS - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization expense of intangible assets | $ 3.2 | $ 3.5 | |
Intangible assets, estimated weighted average useful life | 13 years 8 months 12 days | 13 years 8 months 12 days |
OTHER ACCRUED LIABILITIES (Deta
OTHER ACCRUED LIABILITIES (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Payables and Accruals [Abstract] | ||
Legal and professional accruals | $ 43,856 | $ 46,665 |
Payroll and other compensation expenses | 37,745 | 48,507 |
Insurance accruals | 6,136 | 7,483 |
Property, sales and other non-income related taxes | 3,815 | 7,348 |
Accrued interest | 3,385 | 3,963 |
Volume discount | 2,179 | 2,050 |
Other accruals | 2,192 | 3,251 |
Total | $ 99,308 | $ 119,267 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Provision (benefit) for income taxes | $ 859 | $ 526 |
Effective tax rate (benefit) provision | 3.60% | 1.40% |
DEBT - Long-Term Debt Balances
DEBT - Long-Term Debt Balances (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
Long-Term Debt | $ 242,270 | $ 239,383 |
Finance lease obligations | 5,751 | 5,902 |
Total long-term debt and finance lease obligations | 288,943 | 285,935 |
Current portion of long-term debt and finance lease obligations | (284,102) | (280,993) |
Total long-term debt and finance lease obligations, less current portion | 4,841 | 4,942 |
Convertible debt | ||
Debt Instrument [Line Items] | ||
Long-Term Debt | 40,922 | 40,650 |
APSC Term Loan | Secured Debt | ||
Debt Instrument [Line Items] | ||
Long-Term Debt | 33,599 | 31,562 |
Subordinated Term Loan | Subordinated Debt | ||
Debt Instrument [Line Items] | ||
Long-Term Debt | 114,756 | 107,905 |
Revolving Credit Facility | 2022 ABL Credit Facility | ||
Debt Instrument [Line Items] | ||
Long-Term Debt | $ 93,915 | $ 99,916 |
DEBT - ABL Facility, Additional
DEBT - ABL Facility, Additional Information (Details) | 3 Months Ended | ||||
Feb. 11, 2022 USD ($) borrowing | Mar. 31, 2023 USD ($) | Mar. 31, 2022 USD ($) | Dec. 31, 2022 USD ($) | Jul. 31, 2017 USD ($) | |
Debt Instrument [Line Items] | |||||
Interest expense, debt | $ 16,741,000 | $ 18,579,000 | |||
Debt issuance costs, net | 7,700,000 | $ 15,100,000 | |||
2022 ABL Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Debt issuance costs, gross | 8,400,000 | ||||
Available borrowing capacity | $ 37,300,000 | ||||
ABL Corre DDTL | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, effective interest rate | 14.66% | 11% | |||
Interest expense, debt | $ 1,300,000 | $ 100,000 | |||
Line of Credit | 2022 ABL Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Debt issuance costs, net | 1,400,000 | $ 3,100,000 | |||
Secured Debt | Delayed Draw Term Loan | |||||
Debt Instrument [Line Items] | |||||
Principal amount, long-term debt issued | $ 35,000,000 | ||||
Commitment fees on unused borrowing capacity | 3% | ||||
Prepayment trigger percentage | 130% | ||||
Number of borrowings | borrowing | 4 | ||||
Secured Debt | Delayed Draw Term Loan | LIBOR | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 10% | ||||
Floor interest rate | 1% | ||||
Secured Debt | ABL Corre DDTL | |||||
Debt Instrument [Line Items] | |||||
Borrowing under credit facility | 35,000,000 | ||||
Convertible debt | |||||
Debt Instrument [Line Items] | |||||
Principal amount, long-term debt issued | 41,200,000 | $ 230,000,000 | |||
Periodic payment | $ 10,000,000 | 10,000,000 | |||
Fair value of our convertible senior notes | 10,000,000 | $ 10,000,000 | |||
Revolving Credit Facility | ABL Eclipse | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, effective interest rate | 9.31% | 5.65% | |||
Interest expense, debt | $ 1,400,000 | $ 800,000 | |||
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% | ||||
Revolving Credit Facility | Line of Credit | Debt Instrument, Redemption, Period One | |||||
Debt Instrument [Line Items] | |||||
Prepayment fee percent | 2% | ||||
Revolving Credit Facility | Line of Credit | Debt Instrument, Redemption, Period Two | |||||
Debt Instrument [Line Items] | |||||
Prepayment fee percent | 1% | ||||
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 | Fed Funds Effective Rate Overnight Index Swap Rate | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 0.50% | ||||
Revolving Credit Facility | Line of Credit | Base Rate | |||||
Debt Instrument [Line Items] | |||||
Floor interest rate | 2% | ||||
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% | ||||
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 | ABL Eclipse | |||||
Debt Instrument [Line Items] | |||||
Borrowing under credit facility | 58,900,000 | ||||
Bridge Loan | Line of Credit | |||||
Debt Instrument [Line Items] | |||||
Borrowing capacity | $ 35,000,000 | ||||
Letter of Credit | Line of Credit | |||||
Debt Instrument [Line Items] | |||||
Borrowing capacity | $ 26,000,000 | ||||
Letter of Credit | Line of Credit | 2022 ABL Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Outstanding principle, days prior to maturity | 45 days | ||||
Borrowing under credit facility | 8,900,000 | ||||
Available borrowing capacity | $ 27,300,000 |
DEBT - Atlantic Park Term Loan,
DEBT - Atlantic Park Term Loan, Additional Information (Details) | 3 Months Ended | ||||
Dec. 18, 2020 USD ($) | Mar. 31, 2023 USD ($) | Mar. 31, 2022 USD ($) | Dec. 18, 2026 USD ($) | Dec. 31, 2022 USD ($) | |
Debt Instrument [Line Items] | |||||
Interest expense, debt | $ 16,741,000 | $ 18,579,000 | |||
APSC Term Loan | |||||
Debt Instrument [Line Items] | |||||
Principal amount, long-term debt issued | $ 250,000,000 | ||||
Debt instrument, interest rate, original issue discount | 0.03 | ||||
Proceeds from issuance of debt | $ 242,500,000 | ||||
Line of credit facility, increase limit | $ 100,000,000 | ||||
Make whole period | 2 years | ||||
Debt instrument, effective interest rate | 38.48% | 12.22% | |||
Unamortized discount and issuance costs | $ 1,900,000 | $ 3,900,000 | |||
Interest expense, debt | $ 1,100,000 | $ 4,200,000 | |||
Covenant, leverage ratio, maximum | 7 | ||||
APSC Term Loan | Fed Funds Effective Rate Overnight Index Swap Rate | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 0.50% | ||||
APSC Term Loan | One Month LIBOR | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 1% | ||||
APSC Term Loan | Base Rate | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 6.50% | ||||
APSC Term Loan | Base Rate | Minimum | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 2% | ||||
APSC Term Loan | LIBOR | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 7.50% | ||||
APSC Term Loan | LIBOR | Minimum | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 1% | ||||
APSC Term Loan | Variable Interest Rate | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, effective interest rate | 12.30% | ||||
APSC Term Loan | Accelerated Debt Issue Costs | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, effective interest rate | 26.18% | 2.22% | |||
APSC Term Loan | Weighted-Average Cash and PIK Interest Rate | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, effective interest rate | 10% | ||||
APSC Term Loan | Forecasted | |||||
Debt Instrument [Line Items] | |||||
Principal amount, long-term debt issued | $ 10,000,000 |
DEBT - Subordinated Term Loan (
DEBT - Subordinated Term Loan (Details) - USD ($) | 3 Months Ended | |||||||
Dec. 08, 2021 | Nov. 09, 2021 | Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | Nov. 21, 2022 | Oct. 04, 2022 | Dec. 18, 2020 | |
Debt Instrument [Line Items] | ||||||||
Interest expense, debt | $ 16,741,000 | $ 18,579,000 | ||||||
Subordinated Term Loan | Subordinated Debt | ||||||||
Debt Instrument [Line Items] | ||||||||
Principal amount, long-term debt issued | $ 119,000,000 | |||||||
Proceeds from debt | $ 27,500,000 | $ 22,500,000 | ||||||
Debt instrument, increase (decrease) in face amount | $ 57,000,000 | |||||||
Debt instrument, interest rate, stated percentage | 12% | 12% | 12% | |||||
Debt instrument, effective interest rate | 30.32% | 19.61% | ||||||
Unamortized debt issuance costs | $ 4,100,000 | $ 7,500,000 | ||||||
Interest expense, debt | $ 3,500,000 | $ 1,500,000 | ||||||
Subordinated Term Loan | Subordinated Debt | Accelerated Debt Issue Costs | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, effective interest rate | 18.32% | 7.61% | ||||||
APSC Term Loan | ||||||||
Debt Instrument [Line Items] | ||||||||
Principal amount, long-term debt issued | $ 250,000,000 | |||||||
Debt instrument, effective interest rate | 38.48% | 12.22% | ||||||
Interest expense, debt | $ 1,100,000 | $ 4,200,000 | ||||||
Covenant, leverage ratio, maximum | 7 | |||||||
APSC Term Loan | Accelerated Debt Issue Costs | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, effective interest rate | 26.18% | 2.22% | ||||||
Delayed Draw Term Loan | Subordinated Debt | ||||||||
Debt Instrument [Line Items] | ||||||||
Principal amount, long-term debt issued | $ 10,000,000 | |||||||
Covenant, leverage ratio, maximum | 7 |
DEBT - Warrants (Details)
DEBT - Warrants (Details) - $ / shares | Mar. 31, 2023 | Dec. 31, 2021 | Dec. 08, 2021 | Nov. 09, 2021 | Dec. 18, 2020 |
Debt Instrument [Line Items] | |||||
Class of warrant or right, outstanding (in shares) | 1,000,000 | 10,000,000 | 3,582,949 | ||
Class of warrant or right, exercise price (in dollars per share) | $ 7.75 | ||||
APSC Term Loan | |||||
Debt Instrument [Line Items] | |||||
Class of warrant or right, outstanding (in shares) | 500,000 | 5,000,000 | 917,051 | 500,000 | 3,582,949 |
Class of warrant or right, exercise price (in dollars per share) | $ 15 | $ 1.50 | $ 1.50 | $ 1.50 | $ 7.75 |
Delayed Draw Term Loan | |||||
Debt Instrument [Line Items] | |||||
Class of warrant or right, outstanding (in shares) | 500,000 | 5,000,000 | |||
Class of warrant or right, exercise price (in dollars per share) | $ 15 | $ 1.50 |
DEBT - Warrants and Subscriptio
DEBT - Warrants and Subscription Agreement (Details) | Feb. 11, 2022 nominee $ / shares shares | Mar. 31, 2023 $ / shares shares | Nov. 02, 2022 $ / shares shares | Dec. 31, 2021 $ / shares shares | Dec. 08, 2021 $ / shares shares | Nov. 09, 2021 $ / shares shares | Dec. 18, 2020 $ / shares shares |
Debt Instrument [Line Items] | |||||||
Class of warrant or right, outstanding (in shares) | 1,000,000 | 10,000,000 | 3,582,949 | ||||
Class of warrant or right, exercise price (in dollars per share) | $ / shares | $ 7.75 | ||||||
Number of qualified nominees | nominee | 1 | ||||||
PIPE Shares | |||||||
Debt Instrument [Line Items] | |||||||
Shares issued (in shares) | 1,190,476 | ||||||
Price per share (in dollars per share) | $ / shares | $ 8.40 | ||||||
Period to appoint director | 7 days | ||||||
Minimum percent of shares owned | 10% | ||||||
APSC Term Loan | |||||||
Debt Instrument [Line Items] | |||||||
Class of warrant or right, outstanding (in shares) | 500,000 | 5,000,000 | 917,051 | 500,000 | 3,582,949 | ||
Class of warrant or right, exercise price (in dollars per share) | $ / shares | $ 15 | $ 1.50 | $ 1.50 | $ 1.50 | $ 7.75 | ||
A&R Warrant | APSC Term Loan | |||||||
Debt Instrument [Line Items] | |||||||
Class of warrant or right, exercise price (in dollars per share) | $ / shares | $ 15 | $ 1.50 | $ 1.50 | ||||
Class of warrant or right, number of securities called by warrants or rights (in shares) | 1,000,000 | 5,000,000 | 4,082,949 | ||||
APSC Warrant | APSC Term Loan | |||||||
Debt Instrument [Line Items] | |||||||
Class of warrant or right, number of securities called by warrants or rights (in shares) | 4,082,949 |
DEBT - Convertible Notes, Addit
DEBT - Convertible Notes, Additional Information (Details) | 3 Months Ended | ||||
Oct. 04, 2022 USD ($) | Jul. 31, 2017 USD ($) | Mar. 31, 2023 USD ($) day shares $ / shares | Oct. 03, 2022 USD ($) | Jan. 13, 2022 USD ($) | |
Debt Instrument [Line Items] | |||||
Debt instrument, convertible, threshold percentage of conversion price trigger for redemption | 130% | ||||
Debt instrument, convertible, threshold trading days for redemption | day | 20 | ||||
Threshold consecutive trading days for redemption | 30 days | ||||
Convertible debt | |||||
Debt Instrument [Line Items] | |||||
Principal amount, long-term debt issued | $ 230,000,000 | $ 41,200,000 | |||
Debt instrument, interest rate, stated percentage | 5% | 5% | |||
Initial conversion rate, convertible debt | 0.0046083 | ||||
Initial conversion price, convertible debt (in dollars per share) | $ / shares | $ 217 | ||||
Number of shares into which debt is convertible (in shares) | shares | 189,682 | ||||
Redemption price, percentage (equal to) | 100% | ||||
Repurchase of convertible debt | $ 222,300,000 | ||||
Convertible debt | PIK Securities | |||||
Debt Instrument [Line Items] | |||||
Principal amount, long-term debt issued | $ 41,200,000 | $ 52,000,000 | |||
Debt instrument, interest rate, stated percentage | 5% | 5% | |||
Debt conversion, principle amount | $ 57,000,000 | ||||
Unamortized discount and issuance costs | $ 1,400,000 | ||||
Convertible debt | PIK Securities | Minimum | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, interest rate, stated percentage | 5% | ||||
Denomination of issuance | $ 1 | ||||
Convertible debt | PIK Securities | Maximum | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, interest rate, stated percentage | 8% | ||||
Denomination of issuance | $ 1,000 |
DEBT - Detail of Convertible De
DEBT - Detail of Convertible Debt Carrying Amount (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Accounting Standards Update 2017-12 | Convertible debt embedded derivative | ||
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 | 41,162 | 41,162 |
Unamortized issuance costs | (177) | (377) |
Unamortized discount | (63) | (135) |
Net carrying amount of the liability component | $ 40,922 | $ 40,650 |
DEBT - Fair Value of Debt, Addi
DEBT - Fair Value of Debt, Additional Information (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Level 2 | Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Fair value of debt | $ 34 | $ 37.5 |
DEBT - 1970 Group Substitute In
DEBT - 1970 Group Substitute Insurance Reimbursement Facility (Details) - USD ($) $ in Thousands | 3 Months Ended | ||||
Sep. 29, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | ||
Debt Instrument [Line Items] | |||||
Payments of debt issuance costs | [1] | $ 0 | $ 10,345 | ||
Debt issuance costs, net | 7,700 | $ 15,100 | |||
Letter of Credit | 1970 Group Substitute Insurance Reimbursement Facility | |||||
Debt Instrument [Line Items] | |||||
Borrowing capacity | $ 21,400 | ||||
Increase (decrease) in credit facility liquidity | 21,300 | ||||
Payments of debt issuance costs | $ 2,900 | ||||
Debt issuance costs, net | $ 700 | ||||
[1]Condensed consolidated statements of cash flows for the three months ended March 31, 2022 includes discontinued operations. |
DEBT - Deferred Financing Costs
DEBT - Deferred Financing Costs, Debt and Warrant Discounts and Debt Issuance Cost (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Debt Disclosure [Abstract] | ||
Debt issuance costs, net | $ 7.7 | $ 15.1 |
DEBT - Liquidity, Additional In
DEBT - Liquidity, Additional Information (Details) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
Cash and cash equivalents | $ 31,869,000 | $ 58,075,000 |
Surety Bond | ||
Debt Instrument [Line Items] | ||
Outstanding letter of credit | 2,400,000 | |
Miscellaneous Cash Deposit | ||
Debt Instrument [Line Items] | ||
Outstanding letter of credit | 700,000 | |
Domestic Line of Credit | ||
Debt Instrument [Line Items] | ||
Outstanding letter of credit | 32,400,000 | |
Foreign Line of Credit | ||
Debt Instrument [Line Items] | ||
Outstanding letter of credit | 300,000 | |
2022 ABL Credit Facility | ||
Debt Instrument [Line Items] | ||
Cash | 13,700,000 | |
Restricted cash | 1,000,000 | |
Available borrowing capacity | 37,300,000 | |
Subordinated Term Loan | Subordinated Debt | ||
Debt Instrument [Line Items] | ||
Available borrowing capacity | 10,000,000 | |
Unrestricted Cash and Cash Equivalents | 2022 ABL Credit Facility | ||
Debt Instrument [Line Items] | ||
Credit facilities, collateral | 26,400,000 | |
Restricted Cash | 2022 ABL Credit Facility | ||
Debt Instrument [Line Items] | ||
Credit facilities, collateral | 5,500,000 | |
Restricted Cash | 2022 ABL Credit Facility | Letters Of Credit And Commercial Card Programs | ||
Debt Instrument [Line Items] | ||
Credit facilities, collateral | $ 4,500,000 | |
Foreign Financial Institutions | ||
Debt Instrument [Line Items] | ||
Cash | 16,300,000 | |
Restricted cash | $ 1,400,000 |
EMPLOYEE BENEFIT PLANS - Schedu
EMPLOYEE BENEFIT PLANS - Schedule of Net Pension Cost (Credit) (Details) - Pension Plan - United Kingdom - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Interest cost | $ 687 | $ 422 |
Expected return on plan assets | (925) | (629) |
Amortization of prior service cost | 8 | 8 |
Unrecognized Net Actuarial Loss | 71 | 0 |
Net periodic pension credit | $ (159) | $ (199) |
EMPLOYEE BENEFIT PLANS - Additi
EMPLOYEE BENEFIT PLANS - Additional Information (Details) - United Kingdom - Pension Plan $ in Millions | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Defined Benefit Plan Disclosure [Line Items] | |
Weighted-average of expected returns on asset investment, percentage | 6.40% |
Expected contributions for current year | $ 3.7 |
Total contributions to date | $ 0.9 |
Defined Benefit Plan, Equity Securities | |
Defined Benefit Plan Disclosure [Line Items] | |
Weighted-average of expected returns on asset investment, percentage | 9.50% |
Debt Securities | |
Defined Benefit Plan Disclosure [Line Items] | |
Weighted-average of expected returns on asset investment, percentage | 5.30% |
STOCKHOLDERS_ EQUITY - Addition
STOCKHOLDERS’ EQUITY - Additional Information (Details) | 3 Months Ended | |||
Dec. 21, 2022 shares | Mar. 31, 2023 $ / shares shares | Dec. 31, 2022 $ / shares shares | Dec. 20, 2022 shares | |
Equity [Abstract] | ||||
Reverse stock split ratio | 0.1 | |||
Common stock, shares authorized (in shares) | 12,000,000 | 12,000,000 | 120,000,000 | |
Common stock, shares, outstanding (in shares) | 4,342,909 | 43,429,089 | ||
Fractional shares issued (in shares) | 0 | |||
Common stock, shares issued (in shares) | 4,357,401 | 4,342,909 | ||
Common stock, par value (in usd per share) | $ / shares | $ 0.30 | $ 0.30 | ||
Preferred stock, shares authorized (in shares) | 500,000 | 500,000 | ||
Preferred stock, shares issued (in shares) | 0 | 0 |
STOCKHOLDERS_ EQUITY - Summary
STOCKHOLDERS’ EQUITY - Summary of Changes in AOCI (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance, beginning of period | $ 117,760 | |
Other comprehensive income, before tax | 778 | $ 346 |
Tax Provision | (23) | 0 |
Other comprehensive income, net of tax | 755 | 346 |
Balance, end of period | 94,138 | |
Foreign Currency Translation Adjustments | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance, beginning of period | (28,859) | (22,270) |
Other comprehensive income, before tax | 778 | 346 |
Balance, end of period | (28,081) | (21,924) |
Defined Benefit Pension Plans | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance, beginning of period | (10,474) | (3,873) |
Other comprehensive income, before tax | 0 | 0 |
Balance, end of period | (10,474) | (3,873) |
Tax Provision | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance, beginning of period | 336 | (589) |
Tax Provision | (23) | 0 |
Balance, end of period | 313 | (589) |
Total | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance, beginning of period | (38,997) | (26,732) |
Balance, end of period | $ (38,242) | $ (26,386) |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) $ in Millions | 3 Months Ended | 14 Months Ended | ||||
Feb. 09, 2022 USD ($) | Jun. 01, 2021 USD ($) | Dec. 31, 2022 USD ($) | Aug. 26, 2020 complaint | Mar. 31, 2023 USD ($) | Apr. 20, 2021 facility | |
Loss Contingencies [Line Items] | ||||||
Number of facilities with potential violations | facility | 7 | |||||
Self-insured retention and deductible | $ 3 | |||||
Environmental Protection Agency (EPA) | ||||||
Loss Contingencies [Line Items] | ||||||
Cost incurred in dispute | $ 0.2 | |||||
Thai Action | ||||||
Loss Contingencies [Line Items] | ||||||
New claims filed | complaint | 2 | |||||
Cost incurred in dispute | $ 3 | |||||
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 | |||||
Simon, Vige, and Roberts Matter | ||||||
Loss Contingencies [Line Items] | ||||||
Legal and professional accruals | 41.2 | |||||
Amount not covered by insurance | $ 2.2 |
SEGMENT AND GEOGRAPHIC DISCLO_3
SEGMENT AND GEOGRAPHIC DISCLOSURES - Additional Information (Details) | 3 Months Ended | |
Nov. 01, 2022 Segment | Mar. 31, 2023 segment | |
Segment Reporting [Abstract] | ||
Number of operating segments | 2 | 2 |
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, 2023 | Mar. 31, 2022 | |
Segment Reporting Information [Line Items] | ||
Total Revenues | $ 202,277 | $ 189,036 |
Total Operating income (loss) | (7,746) | (22,407) |
Total Capital expenditures | 2,028 | 5,622 |
Total Depreciation and amortization | 9,546 | 9,454 |
IHT | ||
Segment Reporting Information [Line Items] | ||
Total Revenues | 101,829 | 95,595 |
MS | ||
Segment Reporting Information [Line Items] | ||
Total Revenues | 100,448 | 93,441 |
Operating segments | IHT | ||
Segment Reporting Information [Line Items] | ||
Total Revenues | 101,829 | 95,595 |
Total Operating income (loss) | 4,723 | 134 |
Total Capital expenditures | 1,427 | 4,771 |
Total Depreciation and amortization | 3,054 | 3,254 |
Operating segments | MS | ||
Segment Reporting Information [Line Items] | ||
Total Revenues | 100,448 | 93,441 |
Total Operating income (loss) | 3,193 | 513 |
Total Capital expenditures | 601 | 813 |
Total Depreciation and amortization | 4,753 | 4,884 |
Corporate and shared support services | ||
Segment Reporting Information [Line Items] | ||
Total Operating income (loss) | (15,662) | (23,054) |
Total Capital expenditures | 0 | 38 |
Total Depreciation and amortization | $ 1,739 | $ 1,316 |
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, 2023 | Mar. 31, 2022 | |
Revenues from External Customers [Line Items] | ||
Total Revenues | $ 202,277 | $ 189,036 |
United States | ||
Revenues from External Customers [Line Items] | ||
Total Revenues | 152,494 | 137,940 |
Canada | ||
Revenues from External Customers [Line Items] | ||
Total Revenues | 18,068 | 19,367 |
Europe | ||
Revenues from External Customers [Line Items] | ||
Total Revenues | 16,331 | 14,173 |
Other foreign countries | ||
Revenues from External Customers [Line Items] | ||
Total Revenues | $ 15,384 | $ 17,556 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Alvarez And Marsal | |
Related Party Transaction [Line Items] | |
Expenses from transactions with related party | $ 8.1 |