Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2024 | May 10, 2024 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2024 | |
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 | 4,415,201 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2024 | |
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, $0.30 par value | |
Trading Symbol | TISI | |
Security Exchange Name | NYSE | |
Preferred Stock | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Preferred Stock Purchase Rights | |
Security Exchange Name | NYSE | |
No Trading Symbol | true |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Current assets: | ||
Cash and cash equivalents | $ 24,190 | $ 35,427 |
Accounts receivable, net of allowance of $3,625 and $3,738 respectively | 174,701 | 181,185 |
Inventory | 38,663 | 38,853 |
Income tax receivable | 365 | 644 |
Prepaid expenses and other current assets | 60,283 | 65,992 |
Total current assets | 298,202 | 322,101 |
Property, plant and equipment, net | 123,137 | 127,057 |
Intangible assets, net | 59,555 | 62,693 |
Operating lease right-of-use assets | 39,614 | 40,498 |
Defined benefit pension asset | 4,479 | 4,323 |
Other assets, net | 8,645 | 7,847 |
Deferred tax asset | 1,851 | 1,225 |
Total assets | 535,483 | 565,744 |
Current liabilities: | ||
Current portion of long-term debt and finance lease obligations | 7,123 | 5,212 |
Current portion of operating lease obligations | 14,014 | 14,232 |
Accounts payable | 35,423 | 36,389 |
Other accrued liabilities | 113,066 | 118,089 |
Income tax payable | 1,380 | 1,016 |
Total current liabilities | 171,006 | 174,938 |
Long-term debt and finance lease obligations | 300,038 | 306,214 |
Operating lease obligations | 29,088 | 29,962 |
Deferred tax liabilities | 5,799 | 5,742 |
Other long-term liabilities | 3,261 | 3,292 |
Total liabilities | 509,192 | 520,148 |
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; 4,415,201 and 4,415,147 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively | 1,325 | 1,315 |
Additional paid-in capital | 459,269 | 458,614 |
Accumulated deficit | (394,596) | (377,401) |
Accumulated other comprehensive loss | (39,707) | (36,932) |
Total equity | 26,291 | 45,596 |
Total liabilities and equity | $ 535,483 | $ 565,744 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 | Mar. 31, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||||
Allowance for credit loss, current | $ 3,625 | $ 3,738 | $ 5,262 | |
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 | ||
Common stock, shares issued (in shares) | 4,415,201 | 4,415,147 | ||
Common stock, shares, outstanding (in shares) | 4,415,201 | 4,415,147 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Income Statement [Abstract] | ||
Revenues | $ 199,600 | $ 202,277 |
Operating expenses | 150,869 | 155,275 |
Gross margin | 48,731 | 47,002 |
Selling, general and administrative expenses | 55,117 | 54,748 |
Operating loss | (6,386) | (7,746) |
Interest expense, net | (12,098) | (16,741) |
Other income, net | 1,362 | 635 |
Loss before income taxes | (17,122) | (23,852) |
Provision for income taxes | (73) | (859) |
Net loss | $ (17,195) | $ (24,711) |
Loss per common share: | ||
Basic (in dollars per share) | $ (3.89) | $ (5.69) |
Diluted (in dollars per share) | $ (3.89) | $ (5.69) |
Weighted-average number of shares outstanding: | ||
Basic (in shares) | 4,415 | 4,344 |
Diluted (in shares) | 4,415 | 4,344 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (17,195) | $ (24,711) |
Other comprehensive income (loss) before tax: | ||
Foreign currency translation adjustment | (2,862) | 778 |
Defined benefit pension plans: | ||
Amortization of prior service cost | 8 | 0 |
Amortization of net actuarial loss | 79 | 0 |
Other comprehensive income (loss), before tax | (2,775) | 778 |
Tax provision attributable to other comprehensive income (loss) | 0 | (23) |
Other comprehensive income (loss), net of tax | (2,775) | 755 |
Total comprehensive loss | $ (19,970) | $ (23,956) |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (UNAUDITED) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Retained Earnings (Deficit) | Accumulated Other Comprehensive Loss |
Beginning balance (in shares) at Dec. 31, 2022 | 4,343,000 | ||||
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) | 14,000 | ||||
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 | 4,357,000 | ||||
Ending balance at Mar. 31, 2023 | $ 94,138 | $ 1,307 | 457,463 | (326,390) | (38,242) |
Beginning balance (in shares) at Dec. 31, 2023 | 4,415,147 | 4,415,000 | |||
Beginning balance at Dec. 31, 2023 | $ 45,596 | $ 1,315 | 458,614 | (377,401) | (36,932) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (17,195) | (17,195) | |||
Net settlement of vested stock awards (in shares) | 0 | ||||
Net settlement of vested stock awards | 0 | $ 10 | (10) | ||
Foreign currency translation adjustment, net of tax | (2,862) | (2,862) | |||
Defined benefit pension plans, net of tax | 87 | 87 | |||
Non-cash compensation | $ 665 | 665 | |||
Ending balance (in shares) at Mar. 31, 2024 | 4,415,201 | 4,415,000 | |||
Ending balance at Mar. 31, 2024 | $ 26,291 | $ 1,325 | $ 459,269 | $ (394,596) | $ (39,707) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Cash flows from operating activities: | ||
Net loss | $ (17,195) | $ (24,711) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 9,640 | 9,546 |
Amortization of debt issuance costs, debt discounts, and deferred financing costs | 1,975 | 8,486 |
Paid-in-kind interest | 3,122 | 3,485 |
Allowance for credit (gains) losses | 40 | (201) |
Foreign currency gains | (1,239) | (177) |
Deferred income taxes | (626) | (37) |
Loss (gain) on asset disposal | 5 | (260) |
Non-cash compensation costs | 665 | 382 |
Other, net | (204) | (947) |
Changes in operating assets and liabilities: | ||
Accounts receivable | 5,352 | 9,350 |
Inventory | 10 | (1,473) |
Prepaid expenses and other assets | 2,856 | (1,282) |
Accounts payable | 340 | (66) |
Other accrued liabilities | (3,527) | (20,294) |
Income taxes | 672 | 436 |
Net cash provided by (used in) operating activities | 1,886 | (17,763) |
Cash flows from investing activities: | ||
Capital expenditures | (3,016) | (2,692) |
Proceeds from disposal of assets | 0 | 332 |
Net cash used in investing activities | (3,016) | (2,360) |
Cash flows from financing activities: | ||
Payments under Corre Incremental Term Loans | (356) | 0 |
Payments for debt issuance costs | (1,400) | 0 |
Other | 2,542 | (235) |
Net cash used in financing activities | (9,834) | (6,236) |
Effect of exchange rate changes on cash | (273) | 153 |
Net decrease in cash and cash equivalents | (11,237) | (26,206) |
Cash and cash equivalents at beginning of period | 35,427 | 58,075 |
Cash and cash equivalents at end of period | 24,190 | 31,869 |
Revolving Credit loans | ||
Cash flows from financing activities: | ||
Borrowings under 2022 ABL Credit Facility | 0 | 6,622 |
Payments under Revolving Credit Loans | (9,909) | (12,623) |
ME/RE Loans | ||
Cash flows from financing activities: | ||
Payments under ME/RE Loans | $ (711) | $ 0 |
DESCRIPTION OF BUSINESS AND BAS
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION | 3 Months Ended |
Mar. 31, 2024 | |
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,” “Team,” and “the Company” are used in this report to refer to either Team, Inc., to one or more of our consolidated subsidiaries, or to all of them taken as a whole. Our stock is traded on the New York Stock Exchange (the “NYSE”) under the symbol “TISI”. 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 involving: 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 these 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, 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. In addition, IHT provides comprehensive non-destructive testing services and metallurgical and chemical processing services to the aerospace industry, covering a range of components including finished machined and in-service components. 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, offshore oil and gas, and liquefied natural gas); • Manufacturing and Process (chemical, petrochemical, pulp and paper industries, automotive, and mining); • Midstream (valves, terminals and storage, and pipeline); • Public Infrastructure (construction and building, roads, dams, amusement parks, bridges, ports, and railways); and • Aerospace and Defense. Basis of 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 (the “SEC”). 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, 2023, as filed with the SEC (“our Annual Report on Form 10-K”). 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. 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. 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 Annual Report on Form 10-K, there have been no material changes to our significant accounting policies. |
REVENUE
REVENUE | 3 Months Ended |
Mar. 31, 2024 | |
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: Geographic area (in thousands): Three Months Ended March 31, 2024 Three Months Ended March 31, 2023 (unaudited) (unaudited) United States and Canada Other Countries Total United States and Canada Other Countries Total Revenue: IHT $ 96,296 $ 3,152 $ 99,448 $ 98,531 $ 3,298 $ 101,829 MS 68,970 31,182 100,152 72,031 28,417 100,448 Total $ 165,266 $ 34,334 $ 199,600 $ 170,562 $ 31,715 $ 202,277 Revenue by Operating segment and service type (in thousands): Three Months Ended March 31, 2024 (unaudited) Non-Destructive Evaluation and Testing Services Repair and Maintenance Services Heat Treating Other Total Revenue: IHT $ 81,010 $ 145 $ 13,484 $ 4,809 $ 99,448 MS — 98,863 107 1,182 100,152 Total $ 81,010 $ 99,008 $ 13,591 $ 5,991 $ 199,600 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 For additional information on our reportable operating segments and geographic information, refer to Note 14 - Segment and Geographic Disclosures . Remaining performance obligations. As permitted by ASC 606, Revenue from Contracts with Customers , 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, which permits us to recognize revenue in the amount to which we have a right to invoice the customer if that amount corresponds directly with the value to the customer of our performance completed to date. 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, 2024 and December 31, 2023. |
ACCOUNTS RECEIVABLE
ACCOUNTS RECEIVABLE | 3 Months Ended |
Mar. 31, 2024 | |
Receivables [Abstract] | |
ACCOUNTS RECEIVABLE | ACCOUNTS RECEIVABLE A summary of accounts receivable as of March 31, 2024 and December 31, 2023 is as follows (in thousands): March 31, 2024 December 31, 2023 (unaudited) Trade accounts receivable $ 134,441 $ 151,316 Unbilled revenues 43,885 33,607 Allowance for credit losses (3,625) (3,738) Total $ 174,701 $ 181,185 The following table shows a rollforward of the allowance for credit losses (in thousands): March 31, 2024 December 31, 2023 (unaudited) Balance at beginning of period $ 3,738 $ 5,262 Provision for expected credit losses 278 1,680 Recoveries collected (189) (1,638) Write-offs (264) (1,560) Foreign exchange effects 62 (6) Balance at end of period $ 3,625 $ 3,738 |
INVENTORY
INVENTORY | 3 Months Ended |
Mar. 31, 2024 | |
Inventory Disclosure [Abstract] | |
INVENTORY | INVENTORY A summary of inventory as of March 31, 2024 and December 31, 2023 is as follows (in thousands): March 31, 2024 December 31, 2023 (unaudited) Raw materials $ 9,680 $ 9,958 Work in progress 2,549 2,326 Finished goods 26,434 26,569 Total $ 38,663 $ 38,853 |
PREPAID AND OTHER CURRENT ASSET
PREPAID AND OTHER CURRENT ASSETS | 3 Months Ended |
Mar. 31, 2024 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
PREPAID AND OTHER CURRENT ASSETS | PREPAID AND OTHER CURRENT ASSETS A summary of prepaid expenses and other current assets as of March 31, 2024 and December 31, 2023 is as follows (in thousands): March 31, 2024 December 31, 2023 (unaudited) Insurance receivable $ 39,000 $ 39,000 Prepaid expenses 14,269 18,398 Other current assets 7,014 8,594 Total $ 60,283 $ 65,992 The insurance receivable relates to the receivables from our third-party insurance providers for a legal claim that is recorded in other accrued liabilities, refer to Note 8 - Other Accrued Liabilities . These receivables will be covered from our third-party insurance providers for litigation matters that have been settled, or are pending settlement, and 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. Other current assets include other accounts receivables, primarily related to insurance rebates, software implementation costs, and deferred financing charges. |
PROPERTY, PLANT AND EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT | 3 Months Ended |
Mar. 31, 2024 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT | PROPERTY, PLANT AND EQUIPMENT A summary of property, plant and equipment as of March 31, 2024 and December 31, 2023 is as follows (in thousands): March 31, 2024 December 31, 2023 (unaudited) Land $ 4,006 $ 4,006 Buildings and leasehold improvements 60,464 60,827 Machinery and equipment 291,593 286,376 Furniture and fixtures 10,652 10,804 Capitalized ERP system development costs 45,903 45,903 Computers and computer software 19,871 20,067 Automobiles 3,141 3,215 Construction in progress 1,250 6,634 Total 436,880 437,832 Accumulated depreciation (313,743) (310,775) Property, plant and equipment, net $ 123,137 $ 127,057 Included in the table above are assets under finance leases of $8.9 million and $8.5 million, and related accumulated amortization of $3.5 million and $3.3 million as of March 31, 2024 and December 31, 2023, respectively. Depreciation expense for the three months ended March 31, 2024 and 2023 was $5.3 million and $5.6 million, respectively. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 3 Months Ended |
Mar. 31, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | INTANGIBLE ASSETS A summary of intangible assets as of March 31, 2024 and December 31, 2023 is as follows (in thousands): March 31, 2024 (unaudited) Gross Accumulated Net Customer relationships $ 164,268 $ (105,638) $ 58,630 Trade names 20,255 (19,772) 483 Technology 2,301 (1,859) 442 Intangible assets $ 186,824 $ (127,269) $ 59,555 December 31, 2023 Gross Accumulated Net Customer relationships $ 164,305 $ (102,630) $ 61,675 Trade names 20,262 (19,742) 520 Technology 2,300 (1,802) 498 Licenses 683 (683) — Intangible assets $ 187,550 $ (124,857) $ 62,693 Amortization expense of intangible assets for the three months ended March 31, 2024 and 2023 was $3.1 million and $3.2 million, respectively. The weighted-average amortization period for intangible assets subject to amortization was 13.8 years as of March 31, 2024 and December 31, 2023. |
OTHER ACCRUED LIABILITIES
OTHER ACCRUED LIABILITIES | 3 Months Ended |
Mar. 31, 2024 | |
Payables and Accruals [Abstract] | |
OTHER ACCRUED LIABILITIES | OTHER ACCRUED LIABILITIES A summary of other accrued liabilities as of March 31, 2024 and December 31, 2023 is as follows (in thousands): March 31, 2024 December 31, 2023 (unaudited) Legal and professional accruals $ 51,663 $ 53,972 Payroll and other compensation expenses 40,648 39,943 Insurance accruals 6,259 7,170 Property, sales and other non-income related taxes 4,035 7,248 Accrued interest 5,326 4,487 Volume discount 2,652 2,479 Other accruals 2,483 2,790 Total $ 113,066 $ 118,089 Legal and professional accruals include accruals for legal and professional fees as well as accrued legal claims. See Note 13 - Commitments and Contingencies for additional information. Certain legal claims are covered by our third-party insurance providers and the related insurance receivable for these claims is recorded in prepaid expenses and other current assets. See Note 5 - Prepaid and Other Current Assets for additional information. 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 include 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 various business expense accruals. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2024 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES We recorded an income tax provision of $0.1 million for the three months ended March 31, 2024, compared to a provision of $0.9 million for the three months ended March 31, 2023. The effective tax rate, inclusive of discrete items, was a provision of 0.4% for the three months ended March 31, 2024, compared to a provision of 3.6% for the three months ended March 31, 2023. The effective tax rate differs from the statutory rate due to changes in valuation allowance in certain jurisdictions. |
DEBT
DEBT | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT As of March 31, 2024 and December 31, 2023, our total long-term debt and finance lease obligations are summarized as follows (in thousands): March 31, 2024 December 31, 2023 (unaudited) 2022 ABL Credit Facility $ 103,506 $ 113,415 ME/RE Loans 1 23,608 24,061 Uptiered Loan 1 132,569 129,436 Incremental Term Loan 1 38,985 38,758 Equipment Finance Loan 2,801 — Total 301,469 305,670 Finance lease obligations 5,692 5,756 Total long-term debt and finance lease obligations 307,161 311,426 Current portion of long-term debt and finance lease obligations (7,123) (5,212) Total long-term debt and finance lease obligations, less current portion $ 300,038 $ 306,214 1 Comprised of principal amount outstanding, less unamortized discount and issuance costs. See below for additional information. 2022 ABL Credit Facility On February 11, 2022, we entered into a credit agreement, with the lender parties thereto, and Eclipse Business Capital, LLC, a Delaware limited liability company, as agent, (the “ABL Agent”) (such agreement, as amended by Amendment No.1 dated as of May 6, 2022, Amendment No.2 dated as of November 1, 2022, Amendment No.3 dated as of June 16, 2023, and Amendment No.4 dated as of March 6, 2024, the “2022 ABL Credit Agreement”). Available funding commitments 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 the ABL Agent (the “Revolving Credit Loans”), with a $35.0 million sublimit for swingline borrowings, 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”) originally provided by Corre Partners Management, LLC (“Corre”) and certain of its affiliates (collectively, the “2022 ABL Credit Facility”). The terms of the 2022 ABL Credit Facility are described in the table below (dollar amounts are presented in thousands): Revolving Credit Loans Delayed Draw Term Loan Original maturity date 2/11/2025 2/11/2025 Amended maturity date 8/11/2025 8/11/2025 Original stated interest rate LIBOR + applicable margin (base + applicable margin 1 ) LIBOR + 10% (Base + 9%) Amended interest rate SOFR + applicable margin (base + applicable margin 1 ) SOFR + 10% (Base + 9%) Actual interest rate: 3/31/2024 10.09% 15.44% 3/31/2023 9.31% 14.66% Interest payments monthly monthly Cash paid for interest YTD 3/31/2024 $2,000 $1,367 YTD 3/31/2023 $1,421 $1,255 Unamortized balance of deferred financing cost 3/31/2024 $226 $— 12/31/2023 $267 $— Available amount at 3/31/2024 $6,723 $— 1 Applicable margin ranges based on EBITDA as defined in the 2022 ABL Credit Agreement The 2022 ABL Credit Agreement contains customary conditions to borrowings and covenants, as described in the 2022 ABL Credit Agreement, and further amended by Amendment No. 4, dated March 6, 2024. As of March 31, 2024, we are in compliance with the covenants. As of March 31, 2024, $8.4 million in letters of credit were issued under the 2022 ABL Credit Agreement. Such amounts remain undrawn and are off-balance sheet. ME/RE Loans On June 16, 2023, we entered into ABL Amendment No. 3 which, in addition to making certain other changes to the 2022 ABL Credit Facility, provided us with $27.4 million of new term loans (the “ME/RE Loans”). Amounts repaid or prepaid under the ME/RE Loans may not be reborrowed. The terms of ME/RE Loans are described in the table below (dollar amounts are presented in thousands): Maturity date 8/11/2025 Stated interest rate SOFR + 5.75% + 0.11% credit spread adjustment Principal payments $237 monthly Effective interest rate 3/31/2024 1 17.38% 3/31/2023 N/A Actual interest rate 3/31/2024 11.19% 3/31/2023 N/A Interest payments monthly Cash paid for interest YTD 3/31/2024 $725 YTD 3/31/2023 N/A Balances at 3/31/2024 Principal balance $25,113 Unamortized balance of debt issuance cost $(1,505) Net carrying balance $23,608 Available amount at 3/31/2024 $— 1 The effective interest rate as of March 31, 2024, consisted of a 11.19% variable interest rate paid in cash and an additional 6.19% due to amortization of the related debt issuance costs. The ME/RE Loans are governed by the 2022 ABL Credit Agreement and are subject to the same restrictive covenants as described under the 2022 ABL Credit Facility. Amended and Restated Term Loan Credit Agreement - Uptiered Loan and Incremental Term Loan On June 16, 2023, we entered into an amendment and restatement of that certain subordinated term loan credit agreement dated as of November 9, 2021 (such agreement, as amended and restated, and as further amended by Amendment No.1 dated March 6, 2024, the “A&R Term Loan Credit Agreement”) among the Company, as borrower, the guarantors party thereto, the lenders from time-to-time party thereto and Cantor Fitzgerald Securities, as agent (the “A&R Term Loan Agent”). The A&R Term Loan Credit Agreement included a term loan credit agreement entered into on November 9, 2021, as amended through March 29, 2023 (the “Uptiered Loan”), and an additional funding commitment, subject to certain conditions, consisting of a $57.5 million senior secured first lien term loan (the “Incremental Term Loan”) provided by Corre and certain of its affiliates, comprised of a $37.5 million term loan tranche and a $20.0 million delayed draw tranche. The A&R Term Loan Credit Agreement contains certain customary conditions to borrowings, events of default and affirmative, negative, and financial covenants (as described in the A&R Term Loan Credit Agreement and further amended by Amendment No. 4 dated March 6, 2024). As of March 31, 2024, we are in compliance with the A&R Term Loan Credit Agreement covenants. The terms of Uptiered Loan and Incremental Term Loan are described in the table below (dollar amounts are presented in thousands): Uptiered Loan Incremental Term Loan Maturity date 12/31/2027 (12/31/2026 if outstanding balance is greater than $50 million) 12/31/2026 Stated interest rate 3/31/2024 13.5% cash and PIK split 2 12% paid in cash 3/31/2023 12% PIK 12% paid in cash Principal payments at maturity $356 quarterly Effective interest rate 3/31/2024 14.56% 3 22.96% 4 3/31/2023 30.32% 3 N/A Interest payments cash quarterly/PIK monthly quarterly Cash paid for interest YTD 3/31/2024 $285 $1,447 YTD 3/31/2023 $— N/A PIK interest added to principal YTD 3/31/2024 $3,100 $— YTD 3/31/2023 $3,450 N/A Balances at 3/31/2024 Principal balance 1 $133,187 $47,696 Unamortized balance of debt issuance cost $(618) $(8,711) Net carrying balance $132,569 $38,985 Balances at 12/31/2023 Principal balance 1 $130,087 $48,052 Unamortized balance of debt issuance cost $(651) $(9,294) Net carrying balance $129,436 $38,758 Available amount at 3/31/2024 $— $10,000 ___________ 1 The principal balance of the Uptiered Loan is made up of $22.5 million drawn on November 9, 2021, $27.5 million drawn on December 8, 2021, and $57.0 million added as part of the exchange agreement on October 4, 2022. In addition, the principal balance also includes PIK interest recorded to date of $25.3 million and $22.2 million as of March 31, 2024 and December 31, 2023, respectively, and PIK fees of $0.9 million incurred as of December 31, 2022. 2 Cash and PIK split is based on the Net Leverage Ratio as defined in the A&R Term Loan Credit Agreement. Cash interest rate increased by 1.5% on January 31, 2024. 3 The effective interest rate on the Uptiered Loan as of March 31, 2024 consisted of a 13.50% stated interest rate paid in PIK and cash and an additional 1.06% due to the amortization of the related debt issuance costs. The effective interest rate on the Uptiered Loan as of March 31, 2023 consisted of a 12.00% stated interest rate paid in PIK and an additional 18.32% due to the acceleration of the amortization of the related debt issuance costs. 4 The effective interest rate on the Incremental Term Loan as of March 31, 2024 consisted of a 12.00% stated interest rate paid in cash and an additional 10.96% due to the amortization of the related debt issuance costs. Warrants As of March 31, 2024 and December 31, 2023, APSC Holdco II, L.P. held 500,000 warrants and certain affiliates of Corre collectively held 500,000 warrants, in each case providing for the purchase of one share of the Company’s common stock per warrant at an exercise price of $15.00. The warrants will expire on December 8, 2028. 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. The warrants can be exercised by rendering cash or by means of a cashless option as set forth in the agreement. Equipment Finance Loan On March 6, 2024, we entered into agreements to sell various equipment to an equipment finance lender for $2.9 million and lease the equipment for monthly payments of $181 thousand over 18 months. The lease agreement provides for a bargain purchase option at the end of the lease term which we intend to exercise. The Company determined that the transaction did not meet the criteria for sale-leaseback in accordance with ASC 842, Leases and accounted for this arrangement as an equipment financing. The assets subject to the transaction remain on our balance sheet and continue to depreciate in accordance with our depreciation policy. Fair Value of Debt The fair value of our debt obligations is representative of the carrying value based upon the respective interest rate 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 obligations. 1970 Group Substitute Insurance Reimbursement Facility On September 29, 2022, we entered into the Substitute Insurance Reimbursement Facility Agreement with 1970 Group Inc. (“1970 Group”) (as amended by that certain first amendment thereto dated August 29, 2023, the “Substitute Insurance Reimbursement Facility Agreement”). Under the Substitute Insurance Reimbursement Facility Agreement, the 1970 Group extended credit to us in the form of a substitute reimbursement facility (the “Substitute Reimbursement Facility”) to provide up to approximately $22.9 million of letters of credit on our behalf in support of our workers’ compensation, commercial automotive and general liability insurance policies. As of March 31, 2024, we have $22.9 million of letters of credit outstanding under the Substitute Reimbursement Facility. 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 we use or draw on such Substitute Insurance Reimbursement Facility, the letters of credit are treated as an off-balance sheet credit arrangement. The fees paid by us periodically under this arrangement are deferred and amortized to interest expense over the term of the arrangement. As of March 31, 2024, the unamortized balance of $0.7 million of deferred fees was included in other current assets. Liquidity As of March 31, 2024, we had $19.2 million of unrestricted cash and cash equivalents and $5.0 million of restricted cash, including $3.4 million of restricted cash held as collateral for letters of credit and commercial card programs. International cash balances as of March 31, 2024 were $8.2 million, and approximately $0.7 million of such cash is located in countries where currency or regulatory restrictions exist. As of March 31, 2024, we had approximately $16.7 million of available borrowing capacity under our various credit agreements, consisting of $6.7 million available under the Revolving Credit Loans and $10.0 million available under the Incremental Term Loan under the A&R Term Loan Credit Agreement. As of March 31, 2024, we had $33.9 million in letters of credit and $2.4 million in surety bonds outstanding and $0.6 million in miscellaneous cash deposits securing other required obligations. As of December 31, 2023, our cash and cash equivalents consisted of $30.4 million of unrestricted cash and cash equivalents and $5.0 million of restricted cash, including $3.4 million of restricted cash held as collateral for letters of credit and commercial card programs. International cash balances as of December 31, 2023 were $12.0 million, including $0.6 million of cash located in countries where currency or regulatory restrictions existed. |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 3 Months Ended |
Mar. 31, 2024 | |
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, 2024 2023 (unaudited) (unaudited) Interest cost $ 652 $ 687 Expected return on plan assets (847) (925) Amortization of prior service cost 8 8 Unrecognized net actuarial loss 79 71 Net periodic pension credit $ (108) $ (159) 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: 5.5% overall, 8.5% for equities and 5.0% for debt securities. |
SHAREHOLDERS_ EQUITY
SHAREHOLDERS’ EQUITY | 3 Months Ended |
Mar. 31, 2024 | |
Equity [Abstract] | |
SHAREHOLDERS’ EQUITY | SHAREHOLDERS’ EQUITY Shareholder’s Equity and Preferred Stock As of March 31, 2024 there were 4,415,201 shares of our common stock outstanding and 12,000,000 shares authorized at $0.30 par value per share. As of March 31, 2024 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 $ (25,853) $ (11,041) $ (38) $ (36,932) $ (28,859) $ (10,474) $ 336 $ (38,997) Other comprehensive income (loss) (2,862) 87 — (2,775) 778 — (23) 755 Balance, end of period $ (28,715) $ (10,954) $ (38) $ (39,707) $ (28,081) $ (10,474) $ 313 $ (38,242) |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company, which will only be resolved when one or more future events occur or fail to occur. Team’s management and its legal counsel assess such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against us or unasserted claims that may result in such proceedings, Team’s legal counsel evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in our financial statements. If the assessment indicates that a potentially material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the nature of the guarantee would be disclosed. We accrue for contingencies where the occurrence of a material loss is probable and can be reasonably estimated, based on our best estimate of the expected liability. We may increase or decrease our legal accruals in the future, on a matter-by-matter basis, to account for developments in such matter. Because such matters are inherently unpredictable and unfavorable developments or outcomes can occur, assessing contingencies is highly subjective and requires judgments about future events. Notwithstanding the uncertainty as to the outcome and while our insurance coverage might not be available or adequate to cover these claims, based upon the information currently available, we do not believe that any uninsured losses that might arise from these lawsuits and proceedings will have a materially adverse effect on our condensed consolidated financial statements. 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. 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 trial court on April 22, 2022. We believe 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 appealed the trial court’s judgment to the Texas First Court of Appeals by timely filing a notice of appeal on April 25, 2022, and filed our initial appellate brief on December 23, 2022. We believe that the likelihood that the amount of the judgment will be affirmed is not probable. We currently estimate a range of possible outcomes between $13.0 million and approximately $51.0 million, and we have accrued a liability of $39.0 million as of March 31, 2024 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 a 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, and 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. Notice of repayment of pandemic related government subsidies - In response to widespread health crises, epidemics and pandemics, certain of our entities based in foreign jurisdictions received governmental funding assistance to compensate for a portion of employee wages between March 2020 and March 2022. Following ongoing compliance reviews of these funding assistance programs, we received notices stating noncompliance with the requirements of these funding assistance programs. Accordingly, based on the assessments completed by the government appointed administrative authority, we have accrued $5.5 million, to be repaid over an extended period, as of March 31, 2024. Accordingly, for all matters discussed within this Note 13 - Commitments and Contingencies , we have accrued in the aggregate approximately $44.6 million as of March 31, 2024, of which approximately $5.6 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, 2024 | |
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 2024 2023 (unaudited) (unaudited) Revenues: IHT $ 99,448 $ 101,829 MS 100,152 100,448 Total revenues $ 199,600 $ 202,277 Three Months Ended 2024 2023 (unaudited) (unaudited) Operating income (loss): IHT $ 5,185 $ 4,723 MS 4,091 3,193 Corporate and shared support services (15,662) (15,662) Total operating loss $ (6,386) $ (7,746) Three Months Ended 2024 2023 (unaudited) (unaudited) Capital expenditures 1 : IHT $ 536 $ 1,427 MS 1,025 601 Corporate and shared support services — — Total capital expenditures $ 1,561 $ 2,028 ____________ 1 Excludes finance leases. Capital expenditures presented in the table above are on accrual basis and differ from the amounts presented in the condensed consolidated statements of cash flows. Three Months Ended 2024 2023 (unaudited) (unaudited) Depreciation and amortization: IHT $ 3,029 $ 3,054 MS 4,649 4,753 Corporate and shared support services 1,962 1,739 Total depreciation and amortization $ 9,640 $ 9,546 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, 2024 and 2023 is as follows (in thousands): Three Months Ended 2024 2023 (unaudited) (unaudited) Total Revenues 1 United States $ 152,877 $ 152,494 Canada 12,389 18,068 Europe 15,440 16,331 Other foreign countries 18,894 15,384 Total $ 199,600 $ 202,277 ______________ 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, 2024 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS In connection with the Company’s debt transactions, the Company engaged in transactions with Corre to provide funding as described in |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2024 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS As of May 14, 2024, 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, 2024 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. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Pay vs Performance Disclosure | ||
Net loss | $ (17,195) | $ (24,711) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Mar. 31, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
DESCRIPTION OF BUSINESS AND B_2
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (Policies) | 3 Months Ended |
Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of presentation | Basis of 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 (the “SEC”). 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, 2023, as filed with the SEC (“our Annual Report on Form 10-K”). |
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. Such reclassifications did not have any effect on our financial condition or results of operations as previously reported. |
REVENUE (Tables)
REVENUE (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
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: Geographic area (in thousands): Three Months Ended March 31, 2024 Three Months Ended March 31, 2023 (unaudited) (unaudited) United States and Canada Other Countries Total United States and Canada Other Countries Total Revenue: IHT $ 96,296 $ 3,152 $ 99,448 $ 98,531 $ 3,298 $ 101,829 MS 68,970 31,182 100,152 72,031 28,417 100,448 Total $ 165,266 $ 34,334 $ 199,600 $ 170,562 $ 31,715 $ 202,277 Revenue by Operating segment and service type (in thousands): Three Months Ended March 31, 2024 (unaudited) Non-Destructive Evaluation and Testing Services Repair and Maintenance Services Heat Treating Other Total Revenue: IHT $ 81,010 $ 145 $ 13,484 $ 4,809 $ 99,448 MS — 98,863 107 1,182 100,152 Total $ 81,010 $ 99,008 $ 13,591 $ 5,991 $ 199,600 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 |
ACCOUNTS RECEIVABLE (Tables)
ACCOUNTS RECEIVABLE (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Receivables [Abstract] | |
Summary of Accounts Receivable | A summary of accounts receivable as of March 31, 2024 and December 31, 2023 is as follows (in thousands): March 31, 2024 December 31, 2023 (unaudited) Trade accounts receivable $ 134,441 $ 151,316 Unbilled revenues 43,885 33,607 Allowance for credit losses (3,625) (3,738) Total $ 174,701 $ 181,185 |
Allowance for Credit Loss | The following table shows a rollforward of the allowance for credit losses (in thousands): March 31, 2024 December 31, 2023 (unaudited) Balance at beginning of period $ 3,738 $ 5,262 Provision for expected credit losses 278 1,680 Recoveries collected (189) (1,638) Write-offs (264) (1,560) Foreign exchange effects 62 (6) Balance at end of period $ 3,625 $ 3,738 |
INVENTORY (Tables)
INVENTORY (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Inventory Disclosure [Abstract] | |
Summary of Inventory | A summary of inventory as of March 31, 2024 and December 31, 2023 is as follows (in thousands): March 31, 2024 December 31, 2023 (unaudited) Raw materials $ 9,680 $ 9,958 Work in progress 2,549 2,326 Finished goods 26,434 26,569 Total $ 38,663 $ 38,853 |
PREPAID AND OTHER CURRENT ASS_2
PREPAID AND OTHER CURRENT ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Other Current Assets | A summary of prepaid expenses and other current assets as of March 31, 2024 and December 31, 2023 is as follows (in thousands): March 31, 2024 December 31, 2023 (unaudited) Insurance receivable $ 39,000 $ 39,000 Prepaid expenses 14,269 18,398 Other current assets 7,014 8,594 Total $ 60,283 $ 65,992 |
PROPERTY, PLANT AND EQUIPMENT (
PROPERTY, PLANT AND EQUIPMENT (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property, Plant and Equipment | A summary of property, plant and equipment as of March 31, 2024 and December 31, 2023 is as follows (in thousands): March 31, 2024 December 31, 2023 (unaudited) Land $ 4,006 $ 4,006 Buildings and leasehold improvements 60,464 60,827 Machinery and equipment 291,593 286,376 Furniture and fixtures 10,652 10,804 Capitalized ERP system development costs 45,903 45,903 Computers and computer software 19,871 20,067 Automobiles 3,141 3,215 Construction in progress 1,250 6,634 Total 436,880 437,832 Accumulated depreciation (313,743) (310,775) Property, plant and equipment, net $ 123,137 $ 127,057 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Intangible Assets | A summary of intangible assets as of March 31, 2024 and December 31, 2023 is as follows (in thousands): March 31, 2024 (unaudited) Gross Accumulated Net Customer relationships $ 164,268 $ (105,638) $ 58,630 Trade names 20,255 (19,772) 483 Technology 2,301 (1,859) 442 Intangible assets $ 186,824 $ (127,269) $ 59,555 December 31, 2023 Gross Accumulated Net Customer relationships $ 164,305 $ (102,630) $ 61,675 Trade names 20,262 (19,742) 520 Technology 2,300 (1,802) 498 Licenses 683 (683) — Intangible assets $ 187,550 $ (124,857) $ 62,693 |
OTHER ACCRUED LIABILITIES (Tabl
OTHER ACCRUED LIABILITIES (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Payables and Accruals [Abstract] | |
Summary of Other Accrued Liabilities | A summary of other accrued liabilities as of March 31, 2024 and December 31, 2023 is as follows (in thousands): March 31, 2024 December 31, 2023 (unaudited) Legal and professional accruals $ 51,663 $ 53,972 Payroll and other compensation expenses 40,648 39,943 Insurance accruals 6,259 7,170 Property, sales and other non-income related taxes 4,035 7,248 Accrued interest 5,326 4,487 Volume discount 2,652 2,479 Other accruals 2,483 2,790 Total $ 113,066 $ 118,089 |
DEBT (Tables)
DEBT (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt | As of March 31, 2024 and December 31, 2023, our total long-term debt and finance lease obligations are summarized as follows (in thousands): March 31, 2024 December 31, 2023 (unaudited) 2022 ABL Credit Facility $ 103,506 $ 113,415 ME/RE Loans 1 23,608 24,061 Uptiered Loan 1 132,569 129,436 Incremental Term Loan 1 38,985 38,758 Equipment Finance Loan 2,801 — Total 301,469 305,670 Finance lease obligations 5,692 5,756 Total long-term debt and finance lease obligations 307,161 311,426 Current portion of long-term debt and finance lease obligations (7,123) (5,212) Total long-term debt and finance lease obligations, less current portion $ 300,038 $ 306,214 1 Comprised of principal amount outstanding, less unamortized discount and issuance costs. See below for additional information. The terms of the 2022 ABL Credit Facility are described in the table below (dollar amounts are presented in thousands): Revolving Credit Loans Delayed Draw Term Loan Original maturity date 2/11/2025 2/11/2025 Amended maturity date 8/11/2025 8/11/2025 Original stated interest rate LIBOR + applicable margin (base + applicable margin 1 ) LIBOR + 10% (Base + 9%) Amended interest rate SOFR + applicable margin (base + applicable margin 1 ) SOFR + 10% (Base + 9%) Actual interest rate: 3/31/2024 10.09% 15.44% 3/31/2023 9.31% 14.66% Interest payments monthly monthly Cash paid for interest YTD 3/31/2024 $2,000 $1,367 YTD 3/31/2023 $1,421 $1,255 Unamortized balance of deferred financing cost 3/31/2024 $226 $— 12/31/2023 $267 $— Available amount at 3/31/2024 $6,723 $— 1 Applicable margin ranges based on EBITDA as defined in the 2022 ABL Credit Agreement The terms of ME/RE Loans are described in the table below (dollar amounts are presented in thousands): Maturity date 8/11/2025 Stated interest rate SOFR + 5.75% + 0.11% credit spread adjustment Principal payments $237 monthly Effective interest rate 3/31/2024 1 17.38% 3/31/2023 N/A Actual interest rate 3/31/2024 11.19% 3/31/2023 N/A Interest payments monthly Cash paid for interest YTD 3/31/2024 $725 YTD 3/31/2023 N/A Balances at 3/31/2024 Principal balance $25,113 Unamortized balance of debt issuance cost $(1,505) Net carrying balance $23,608 Available amount at 3/31/2024 $— 1 The effective interest rate as of March 31, 2024, consisted of a 11.19% variable interest rate paid in cash and an additional 6.19% due to amortization of the related debt issuance costs. The terms of Uptiered Loan and Incremental Term Loan are described in the table below (dollar amounts are presented in thousands): Uptiered Loan Incremental Term Loan Maturity date 12/31/2027 (12/31/2026 if outstanding balance is greater than $50 million) 12/31/2026 Stated interest rate 3/31/2024 13.5% cash and PIK split 2 12% paid in cash 3/31/2023 12% PIK 12% paid in cash Principal payments at maturity $356 quarterly Effective interest rate 3/31/2024 14.56% 3 22.96% 4 3/31/2023 30.32% 3 N/A Interest payments cash quarterly/PIK monthly quarterly Cash paid for interest YTD 3/31/2024 $285 $1,447 YTD 3/31/2023 $— N/A PIK interest added to principal YTD 3/31/2024 $3,100 $— YTD 3/31/2023 $3,450 N/A Balances at 3/31/2024 Principal balance 1 $133,187 $47,696 Unamortized balance of debt issuance cost $(618) $(8,711) Net carrying balance $132,569 $38,985 Balances at 12/31/2023 Principal balance 1 $130,087 $48,052 Unamortized balance of debt issuance cost $(651) $(9,294) Net carrying balance $129,436 $38,758 Available amount at 3/31/2024 $— $10,000 ___________ 1 The principal balance of the Uptiered Loan is made up of $22.5 million drawn on November 9, 2021, $27.5 million drawn on December 8, 2021, and $57.0 million added as part of the exchange agreement on October 4, 2022. In addition, the principal balance also includes PIK interest recorded to date of $25.3 million and $22.2 million as of March 31, 2024 and December 31, 2023, respectively, and PIK fees of $0.9 million incurred as of December 31, 2022. 2 Cash and PIK split is based on the Net Leverage Ratio as defined in the A&R Term Loan Credit Agreement. Cash interest rate increased by 1.5% on January 31, 2024. 3 The effective interest rate on the Uptiered Loan as of March 31, 2024 consisted of a 13.50% stated interest rate paid in PIK and cash and an additional 1.06% due to the amortization of the related debt issuance costs. The effective interest rate on the Uptiered Loan as of March 31, 2023 consisted of a 12.00% stated interest rate paid in PIK and an additional 18.32% due to the acceleration of the amortization of the related debt issuance costs. 4 The effective interest rate on the Incremental Term Loan as of March 31, 2024 consisted of a 12.00% stated interest rate paid in cash and an additional 10.96% due to the amortization of the related debt issuance costs. |
EMPLOYEE BENEFIT PLANS (Tables)
EMPLOYEE BENEFIT PLANS (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
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, 2024 2023 (unaudited) (unaudited) Interest cost $ 652 $ 687 Expected return on plan assets (847) (925) Amortization of prior service cost 8 8 Unrecognized net actuarial loss 79 71 Net periodic pension credit $ (108) $ (159) |
SHAREHOLDERS_ EQUITY (Tables)
SHAREHOLDERS’ EQUITY (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
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 $ (25,853) $ (11,041) $ (38) $ (36,932) $ (28,859) $ (10,474) $ 336 $ (38,997) Other comprehensive income (loss) (2,862) 87 — (2,775) 778 — (23) 755 Balance, end of period $ (28,715) $ (10,954) $ (38) $ (39,707) $ (28,081) $ (10,474) $ 313 $ (38,242) |
SEGMENT AND GEOGRAPHIC DISCLO_2
SEGMENT AND GEOGRAPHIC DISCLOSURES (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
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 2024 2023 (unaudited) (unaudited) Revenues: IHT $ 99,448 $ 101,829 MS 100,152 100,448 Total revenues $ 199,600 $ 202,277 Three Months Ended 2024 2023 (unaudited) (unaudited) Operating income (loss): IHT $ 5,185 $ 4,723 MS 4,091 3,193 Corporate and shared support services (15,662) (15,662) Total operating loss $ (6,386) $ (7,746) Three Months Ended 2024 2023 (unaudited) (unaudited) Capital expenditures 1 : IHT $ 536 $ 1,427 MS 1,025 601 Corporate and shared support services — — Total capital expenditures $ 1,561 $ 2,028 ____________ 1 Excludes finance leases. Capital expenditures presented in the table above are on accrual basis and differ from the amounts presented in the condensed consolidated statements of cash flows. Three Months Ended 2024 2023 (unaudited) (unaudited) Depreciation and amortization: IHT $ 3,029 $ 3,054 MS 4,649 4,753 Corporate and shared support services 1,962 1,739 Total depreciation and amortization $ 9,640 $ 9,546 |
Geographic Breakdown of Revenues | A geographic breakdown of our revenues for the three months ended March 31, 2024 and 2023 is as follows (in thousands): Three Months Ended 2024 2023 (unaudited) (unaudited) Total Revenues 1 United States $ 152,877 $ 152,494 Canada 12,389 18,068 Europe 15,440 16,331 Other foreign countries 18,894 15,384 Total $ 199,600 $ 202,277 ______________ 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 |
Mar. 31, 2024 profile segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of operating segments | segment | 2 |
Number of distinct client demand profiles | profile | 3 |
REVENUE (Details)
REVENUE (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 199,600 | $ 202,277 |
Non-Destructive Evaluation and Testing Services | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 81,010 | 81,606 |
Repair and Maintenance Services | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 99,008 | 99,841 |
Heat Treating | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 13,591 | 14,006 |
Other | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 5,991 | 6,824 |
IHT | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 99,448 | 101,829 |
IHT | Non-Destructive Evaluation and Testing Services | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 81,010 | 81,606 |
IHT | Repair and Maintenance Services | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 145 | 3 |
IHT | Heat Treating | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 13,484 | 13,728 |
IHT | Other | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 4,809 | 6,492 |
MS | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 100,152 | 100,448 |
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 | 98,863 | 99,838 |
MS | Heat Treating | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 107 | 278 |
MS | Other | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 1,182 | 332 |
United States and Canada | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 165,266 | 170,562 |
United States and Canada | IHT | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 96,296 | 98,531 |
United States and Canada | MS | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 68,970 | 72,031 |
Other Countries | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 34,334 | 31,715 |
Other Countries | IHT | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 3,152 | 3,298 |
Other Countries | MS | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 31,182 | $ 28,417 |
ACCOUNTS RECEIVABLE - Summary o
ACCOUNTS RECEIVABLE - Summary of Accounts Receivable (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 | Dec. 31, 2022 |
Receivables [Abstract] | |||
Trade accounts receivable | $ 134,441 | $ 151,316 | |
Unbilled revenues | 43,885 | 33,607 | |
Allowance for credit losses | (3,625) | (3,738) | $ (5,262) |
Total | $ 174,701 | $ 181,185 |
ACCOUNTS RECEIVABLE - Summary_2
ACCOUNTS RECEIVABLE - Summary of Activity in Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
Balance at beginning of period | $ 3,738 | $ 5,262 |
Provision for expected credit losses | 278 | 1,680 |
Recoveries collected | (189) | (1,638) |
Write-offs | (264) | (1,560) |
Foreign exchange effects | 62 | (6) |
Balance at end of period | $ 3,625 | $ 3,738 |
INVENTORY (Details)
INVENTORY (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 9,680 | $ 9,958 |
Work in progress | 2,549 | 2,326 |
Finished goods | 26,434 | 26,569 |
Total | $ 38,663 | $ 38,853 |
PREPAID AND OTHER CURRENT ASS_3
PREPAID AND OTHER CURRENT ASSETS (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Insurance receivable | $ 39,000 | $ 39,000 |
Prepaid expenses | 14,269 | 18,398 |
Other current assets | 7,014 | 8,594 |
Total | $ 60,283 | $ 65,992 |
PROPERTY, PLANT AND EQUIPMENT -
PROPERTY, PLANT AND EQUIPMENT - Summary of Property, Plant and Equipment (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Property, Plant and Equipment [Line Items] | ||
Total | $ 436,880 | $ 437,832 |
Accumulated depreciation | (313,743) | (310,775) |
Property, plant and equipment, net | 123,137 | 127,057 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Total | 4,006 | 4,006 |
Buildings and leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total | 60,464 | 60,827 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total | 291,593 | 286,376 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Total | 10,652 | 10,804 |
Capitalized ERP system development costs | ||
Property, Plant and Equipment [Line Items] | ||
Total | 45,903 | 45,903 |
Computers and computer software | ||
Property, Plant and Equipment [Line Items] | ||
Total | 19,871 | 20,067 |
Automobiles | ||
Property, Plant and Equipment [Line Items] | ||
Total | 3,141 | 3,215 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Total | $ 1,250 | $ 6,634 |
PROPERTY, PLANT AND EQUIPMENT_2
PROPERTY, PLANT AND EQUIPMENT - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |||
Assets under finance leases | $ 8.9 | $ 8.5 | |
Accumulated amortization for assets under finance leases | 3.5 | $ 3.3 | |
Depreciation expense | $ 5.3 | $ 5.6 |
INTANGIBLE ASSETS - Summary of
INTANGIBLE ASSETS - Summary of Intangible Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 186,824 | $ 187,550 |
Accumulated Amortization | (127,269) | (124,857) |
Net Carrying Amount | 59,555 | 62,693 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 164,268 | 164,305 |
Accumulated Amortization | (105,638) | (102,630) |
Net Carrying Amount | 58,630 | 61,675 |
Trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 20,255 | 20,262 |
Accumulated Amortization | (19,772) | (19,742) |
Net Carrying Amount | 483 | 520 |
Technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 2,301 | 2,300 |
Accumulated Amortization | (1,859) | (1,802) |
Net Carrying Amount | $ 442 | 498 |
Licenses | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 683 | |
Accumulated Amortization | (683) | |
Net Carrying Amount | $ 0 |
INTANGIBLE ASSETS - Additional
INTANGIBLE ASSETS - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization expense of intangible assets | $ 3.1 | $ 3.2 | |
Intangible assets, estimated weighted average useful life | 13 years 9 months 18 days | 13 years 9 months 18 days |
OTHER ACCRUED LIABILITIES (Deta
OTHER ACCRUED LIABILITIES (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Payables and Accruals [Abstract] | ||
Legal and professional accruals | $ 51,663 | $ 39,943 |
Payroll and other compensation expenses | 40,648 | 53,972 |
Insurance accruals | 6,259 | 7,170 |
Property, sales and other non-income related taxes | 4,035 | 7,248 |
Accrued interest | 5,326 | 4,487 |
Volume discount | 2,652 | 2,479 |
Other accruals | 2,483 | 2,790 |
Total | $ 113,066 | $ 118,089 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | ||
Provision for income taxes | $ 73 | $ 859 |
Effective tax rate provision | 0.40% | 3.60% |
DEBT - Long-Term Debt Balances
DEBT - Long-Term Debt Balances (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Debt Instrument [Line Items] | ||
Convertible debt | $ 301,469 | $ 305,670 |
Finance lease obligations | 5,692 | 5,756 |
Total long-term debt and finance lease obligations | 307,161 | 311,426 |
Current portion of long-term debt and finance lease obligations | (7,123) | (5,212) |
Total long-term debt and finance lease obligations, less current portion | 300,038 | 306,214 |
ME/RE Loans | Secured Debt | ||
Debt Instrument [Line Items] | ||
Convertible debt | 23,608 | 24,061 |
Uptiered Loan | Subordinated Debt | ||
Debt Instrument [Line Items] | ||
Convertible debt | 132,569 | 129,436 |
Incremental Term Loan | Secured Debt | ||
Debt Instrument [Line Items] | ||
Convertible debt | 38,985 | 38,758 |
Equipment Finance Loan | Secured Debt | ||
Debt Instrument [Line Items] | ||
Convertible debt | 2,801 | 0 |
Revolving Credit Facility | 2022 ABL Credit Facility | ||
Debt Instrument [Line Items] | ||
Convertible debt | $ 103,506 | $ 113,415 |
DEBT - ABL Facility, Additional
DEBT - ABL Facility, Additional Information (Details) - USD ($) | Mar. 31, 2024 | Feb. 11, 2022 |
Line of Credit | ABL Credit Agreement | ||
Debt Instrument [Line Items] | ||
Outstanding letter of credit | $ 8,400,000 | |
Secured Debt | Delayed Draw Term Loan | ||
Debt Instrument [Line Items] | ||
Debt, face amount | $ 35,000,000 | |
Revolving Credit Facility | Line of Credit | ||
Debt Instrument [Line Items] | ||
Borrowing capacity | 130,000,000 | |
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 |
DEBT - ABL Facility (Details)
DEBT - ABL Facility (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | Feb. 11, 2022 | |
ABL Corre Delayed Draw Term Loan | ||||
Debt Instrument [Line Items] | ||||
Stated interest rate | 15.44% | 14.66% | ||
Cash paid for interest | $ 1,367 | $ 1,255 | ||
Unamortized balance of deferred financing cost | 0 | $ 0 | ||
Available amount | $ 0 | |||
ABL Corre Delayed Draw Term Loan | LIBOR | ||||
Debt Instrument [Line Items] | ||||
Stated interest rate | 10% | |||
ABL Corre Delayed Draw Term Loan | Base Rate | ||||
Debt Instrument [Line Items] | ||||
Stated interest rate | 9% | |||
ABL Corre Delayed Draw Term Loan | Secured Overnight Financing Rate (SOFR) | ||||
Debt Instrument [Line Items] | ||||
Stated interest rate | 10% | |||
Revolving Credit Facility | ABL Agent | ||||
Debt Instrument [Line Items] | ||||
Stated interest rate | 10.09% | 9.31% | ||
Cash paid for interest | $ 2,000 | $ 1,421 | ||
Unamortized balance of deferred financing cost | 226 | $ 267 | ||
Available amount | $ 6,723 |
DEBT - ME_RE Loans, Additional
DEBT - ME/RE Loans, Additional Information (Details) | Jun. 16, 2023 USD ($) |
ME/RE Loans | |
Debt Instrument [Line Items] | |
Borrowing capacity | $ 27,400,000 |
DEBT - ME_RE Loans (Details)
DEBT - ME/RE Loans (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Jun. 16, 2023 | Mar. 31, 2024 | Dec. 31, 2023 | |
Debt Instrument [Line Items] | |||
Net carrying balance | $ 301,469 | $ 305,670 | |
ME/RE Loans | |||
Debt Instrument [Line Items] | |||
Stated interest rate | 11.19% | ||
Effective interest rate | 17.38% | ||
Cash paid for interest | $ 725 | ||
ME/RE Loans | Variable Interest Rate | |||
Debt Instrument [Line Items] | |||
Effective interest rate | 11.19% | ||
ME/RE Loans | Accelerated Debt Isssue Costs | |||
Debt Instrument [Line Items] | |||
Effective interest rate | 6.19% | ||
ME/RE Loans | Secured Debt | |||
Debt Instrument [Line Items] | |||
Principal payments | $ 237 | ||
Principal balance | $ 25,113 | ||
Unamortized balance of debt issuance cost | (1,505) | ||
Net carrying balance | 23,608 | $ 24,061 | |
Available amount | $ 0 | ||
ME/RE Loans | Secured Debt | Secured Overnight Financing Rate (SOFR) | |||
Debt Instrument [Line Items] | |||
Stated interest rate | 5.75% | ||
Basis spread on variable rate | 0.11% |
DEBT - Amended and Restated Ter
DEBT - Amended and Restated Term Loan Credit Agreement - Uptiered Loan and Incremental Term Loan (Details) - Senior Secured First Lien Term Loan | Jun. 16, 2023 USD ($) |
A&R Term Loan Credit Agreement | |
Debt Instrument [Line Items] | |
Current borrowing capacity | $ 57,500,000 |
Term Loan | |
Debt Instrument [Line Items] | |
Current borrowing capacity | 37,500,000 |
Delayed Draw Term Loan | |
Debt Instrument [Line Items] | |
Current borrowing capacity | $ 20,000,000 |
DEBT - Uptiered (Subordinated)
DEBT - Uptiered (Subordinated) Term Loan and Incremental Term Loan (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||
Jan. 01, 2024 | Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2023 | Jun. 16, 2023 | Oct. 04, 2022 | Dec. 08, 2021 | Nov. 09, 2021 | |
Debt Instrument [Line Items] | |||||||||
Paid-in-kind interest | $ 3,122 | $ 3,485 | |||||||
Net carrying balance | $ 301,469 | $ 305,670 | |||||||
Uptiered Loan | Subordinated Debt | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, threshold, trigger amount | $ 50,000 | ||||||||
Stated interest rate | 12% | ||||||||
Effective interest rate | 14.56% | 30.32% | |||||||
Cash paid for interest | $ 285 | $ 0 | |||||||
Paid-in-kind interest | 3,100 | $ 3,450 | |||||||
Principal balance | 133,187 | 130,087 | $ 57,000 | $ 27,500 | $ 22,500 | ||||
Unamortized balance of debt issuance cost | (618) | (651) | |||||||
Net carrying balance | 132,569 | 129,436 | |||||||
Available amount | $ 0 | ||||||||
PIK fees | $ 900 | ||||||||
Uptiered Loan | Subordinated Debt | Cash Interest Rate | |||||||||
Debt Instrument [Line Items] | |||||||||
Increase to stated interest rate | 1.50% | ||||||||
Uptiered Loan | Subordinated Debt | Paid in Kind | |||||||||
Debt Instrument [Line Items] | |||||||||
Stated interest rate | 13.50% | 12% | |||||||
Uptiered Loan | Subordinated Debt | Accelerated Debt Isssue Costs | |||||||||
Debt Instrument [Line Items] | |||||||||
Increase to stated interest rate | 1.06% | 18.32% | |||||||
Uptiered Loan / Subordinated Term Loan, PIK | Subordinated Debt | |||||||||
Debt Instrument [Line Items] | |||||||||
Stated interest rate | 13.50% | ||||||||
PIK interest, principal amount | $ 25,300 | 22,200 | |||||||
Incremental Term Loan | |||||||||
Debt Instrument [Line Items] | |||||||||
Stated interest rate | 12% | ||||||||
Incremental Term Loan | Accelerated Debt Isssue Costs | |||||||||
Debt Instrument [Line Items] | |||||||||
Increase to stated interest rate | 10.96% | ||||||||
Incremental Term Loan | Secured Debt | |||||||||
Debt Instrument [Line Items] | |||||||||
Stated interest rate | 12% | 12% | |||||||
Principal payments | $ 356 | ||||||||
Effective interest rate | 22.96% | ||||||||
Cash paid for interest | $ 1,447 | ||||||||
Paid-in-kind interest | 0 | ||||||||
Principal balance | 47,696 | 48,052 | |||||||
Unamortized balance of debt issuance cost | (8,711) | (9,294) | |||||||
Net carrying balance | 38,985 | $ 38,758 | |||||||
Available amount | $ 10,000 |
DEBT - Warrants (Details)
DEBT - Warrants (Details) - $ / shares | Mar. 31, 2024 | Dec. 31, 2023 |
Atlantic Park Term Loan | ||
Debt Instrument [Line Items] | ||
Class of warrant or right, outstanding (in shares) | 500,000 | 500,000 |
Number of shares called by each warrant (in shares) | 1 | 1 |
Class of warrant or right, exercise price (in usd per share) | $ 15 | $ 15 |
Delayed Draw Term Loan | ||
Debt Instrument [Line Items] | ||
Class of warrant or right, outstanding (in shares) | 500,000 | 500,000 |
Number of shares called by each warrant (in shares) | 1 | 1 |
Class of warrant or right, exercise price (in usd per share) | $ 15 | $ 15 |
DEBT - Equipment Finance Loan (
DEBT - Equipment Finance Loan (Details) - Equipment Finance Loan $ in Thousands | Mar. 06, 2024 USD ($) |
Debt Instrument [Line Items] | |
Net book value | $ 2,900 |
Monthly payments | $ 181 |
Lease term | 18 months |
DEBT - 1970 Group Substitute In
DEBT - 1970 Group Substitute Insurance Reimbursement Facility (Details) - Letter of Credit - 1970 Group Substitute Insurance Reimbursement Facility - USD ($) $ in Millions | Mar. 31, 2024 | Sep. 29, 2022 |
Debt Instrument [Line Items] | ||
Borrowing capacity | $ 22.9 | |
Outstanding letter of credit | $ 22.9 | |
Unamortized balance of debt issuance cost | $ 0.7 |
DEBT - Liquidity, Additional In
DEBT - Liquidity, Additional Information (Details) - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 |
Surety Bond | ||
Debt Instrument [Line Items] | ||
Outstanding letter of credit | $ 2.4 | |
Miscellaneous Cash Deposit | ||
Debt Instrument [Line Items] | ||
Outstanding letter of credit | 0.6 | |
Domestic Line of Credit | ||
Debt Instrument [Line Items] | ||
Outstanding letter of credit | 33.9 | |
2022 ABL Credit Facility | ||
Debt Instrument [Line Items] | ||
Cash | 8.2 | $ 12 |
Restricted cash | 0.7 | 0.6 |
Available borrowing capacity | 16.7 | |
A&R Term Loan Credit Agreement | ||
Debt Instrument [Line Items] | ||
Available borrowing capacity | 10 | |
ABL Eclipse | ||
Debt Instrument [Line Items] | ||
Available borrowing capacity | 6.7 | |
Incremental Term Loan | ||
Debt Instrument [Line Items] | ||
Available borrowing capacity | 10 | |
Unrestricted Cash and Cash Equivalents | 2022 ABL Credit Facility | ||
Debt Instrument [Line Items] | ||
Credit facilities, collateral | 19.2 | 30.4 |
Restricted Cash | 2022 ABL Credit Facility | ||
Debt Instrument [Line Items] | ||
Credit facilities, collateral | 5 | 5 |
Restricted Cash | 2022 ABL Credit Facility | Letters Of Credit And Commercial Card Programs | ||
Debt Instrument [Line Items] | ||
Credit facilities, collateral | $ 3.4 | $ 3.4 |
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, 2024 | Mar. 31, 2023 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Interest cost | $ 652 | $ 687 |
Expected return on plan assets | (847) | (925) |
Amortization of prior service cost | 8 | 8 |
Unrecognized net actuarial loss | 79 | 71 |
Net periodic pension credit | $ (108) | $ (159) |
EMPLOYEE BENEFIT PLANS - Additi
EMPLOYEE BENEFIT PLANS - Additional Information (Details) - United Kingdom - Pension Plan | 3 Months Ended |
Mar. 31, 2024 | |
Defined Benefit Plan Disclosure [Line Items] | |
Weighted-average of expected returns on asset investment, percentage | 5.50% |
Defined Benefit Plan, Equity Securities | |
Defined Benefit Plan Disclosure [Line Items] | |
Weighted-average of expected returns on asset investment, percentage | 8.50% |
Debt Securities | |
Defined Benefit Plan Disclosure [Line Items] | |
Weighted-average of expected returns on asset investment, percentage | 5% |
SHAREHOLDERS_ EQUITY - Addition
SHAREHOLDERS’ EQUITY - Additional Information (Details) - $ / shares | Mar. 31, 2024 | Dec. 31, 2023 | Mar. 31, 2023 |
Equity [Abstract] | |||
Common stock, shares, outstanding (in shares) | 4,415,201 | 4,415,147 | |
Common stock, shares issued (in shares) | 4,415,201 | 4,415,147 | |
Common stock, shares authorized (in shares) | 12,000,000 | 12,000,000 | |
Common stock, par value (in usd per share) | $ 0.30 | $ 0.30 | |
Preferred stock, shares authorized (in shares) | 500,000 | 500,000 | |
Preferred stock, shares issued (in shares) | 0 | 0 |
SHAREHOLDERS_ EQUITY - Summary
SHAREHOLDERS’ EQUITY - Summary of Changes in AOCI (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | $ 45,596 | $ 117,760 |
Other comprehensive income (loss), before tax | (2,775) | 778 |
Tax Provision | 0 | (23) |
Other comprehensive income (loss), net of tax | (2,775) | 755 |
Ending balance | 26,291 | 94,138 |
Foreign Currency Translation Adjustments | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | (25,853) | (28,859) |
Other comprehensive income (loss), before tax | (2,862) | 778 |
Ending balance | (28,715) | (28,081) |
Defined Benefit Pension Plans | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | (11,041) | (10,474) |
Other comprehensive income (loss), before tax | 87 | 0 |
Ending balance | (10,954) | (10,474) |
Tax Provision | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | (38) | 336 |
Tax Provision | 0 | (23) |
Ending balance | (38) | 313 |
Total | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | (36,932) | (38,997) |
Ending balance | $ (39,707) | $ (38,242) |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Millions | Jun. 01, 2021 | Mar. 31, 2024 |
Loss Contingencies [Line Items] | ||
Self-insured retention and deductible | $ 3 | |
Compensation of Employee Wages | ||
Loss Contingencies [Line Items] | ||
Legal and professional accruals | 5.5 | |
Kelli Most Litigation | ||
Loss Contingencies [Line Items] | ||
Amount awarded to other party | $ 222 | |
Legal and professional accruals | 39 | |
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 | 44.6 | |
Amount not covered by insurance | $ 5.6 |
SEGMENT AND GEOGRAPHIC DISCLO_3
SEGMENT AND GEOGRAPHIC DISCLOSURES - Additional Information (Details) | 3 Months Ended |
Mar. 31, 2024 segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 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, 2024 | Mar. 31, 2023 | |
Segment Reporting Information [Line Items] | ||
Total revenues | $ 199,600 | $ 202,277 |
Total operating loss | (6,386) | (7,746) |
Total capital expenditures | 1,561 | 2,028 |
Total depreciation and amortization | 9,640 | 9,546 |
IHT | ||
Segment Reporting Information [Line Items] | ||
Total revenues | 99,448 | 101,829 |
MS | ||
Segment Reporting Information [Line Items] | ||
Total revenues | 100,152 | 100,448 |
Operating segments | IHT | ||
Segment Reporting Information [Line Items] | ||
Total revenues | 99,448 | 101,829 |
Total operating loss | 5,185 | 4,723 |
Total capital expenditures | 536 | 1,427 |
Total depreciation and amortization | 3,029 | 3,054 |
Operating segments | MS | ||
Segment Reporting Information [Line Items] | ||
Total revenues | 100,152 | 100,448 |
Total operating loss | 4,091 | 3,193 |
Total capital expenditures | 1,025 | 601 |
Total depreciation and amortization | 4,649 | 4,753 |
Corporate and shared support services | ||
Segment Reporting Information [Line Items] | ||
Total operating loss | (15,662) | (15,662) |
Total capital expenditures | 0 | 0 |
Total depreciation and amortization | $ 1,962 | $ 1,739 |
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, 2024 | Mar. 31, 2023 | |
Revenues from External Customers [Line Items] | ||
Total revenues | $ 199,600 | $ 202,277 |
United States | ||
Revenues from External Customers [Line Items] | ||
Total revenues | 152,877 | 152,494 |
Canada | ||
Revenues from External Customers [Line Items] | ||
Total revenues | 12,389 | 18,068 |
Europe | ||
Revenues from External Customers [Line Items] | ||
Total revenues | 15,440 | 16,331 |
Other foreign countries | ||
Revenues from External Customers [Line Items] | ||
Total revenues | $ 18,894 | $ 15,384 |