Team, Inc. (NYSE: TISI) (“TEAM” or the “Company”),
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, today reported its financial results for the
fourth quarter and full year ended December 31, 2023.
Fourth Quarter 2023
Highlights1:
- Announced fourth quarter 2023
revenues of $214.1 million, up 1.3% over the 2022 fourth
quarter revenue of $211.3 million.
- Reported fourth quarter 2023 net
loss of $23.1 million, a $33.8 million improvement from the 2022
fourth quarter net loss of $56.9 million.
- Improved consolidated Adjusted
EBITDA2 to $9.7 million (4.5% of consolidated revenue), an increase
of 45.1% from $6.7 million (3.2% of consolidated revenue) in the
fourth quarter of 2022.
- Reduced Adjusted Selling, General
and Administrative Expense2 by 9.2%, or $4.5 million, as
compared to the 2022 period.
- Generated cash flow from operations
of $11.1 million and Free Cash Flow2 of $8.1 million for the
period.
Full Year 2023
Highlights1:
- Increased 2023 revenue to
$862.6 million, up 2.7% or $22.4 million from 2022.
- Improved gross margin to $211.2
million, or 24.5% of revenue, as compared to $201.6 million, or
24.0% of revenue, in 2022.
- Reported 2023 net loss of
$75.7 million, a $74.4 million improvement over net loss
of $150.1 million in 2022.
- Grew 2023 consolidated Adjusted
EBITDA2 to $42.5 million, a 155.1% improvement as compared to
$16.7 million in 2022.
- Reduced Adjusted Selling, General
and Administrative Expense2 by 8.2%, or $16.4 million, as compared
to 2022.
1 Unless otherwise specified, the
financial information and discussion in this earnings release is
based on the Company’s continuing operations (IHT and MS segments
as defined below) and excludes results of its discontinued
operations due to the sale of Quest Integrity business (“Quest
Integrity”) on November 1, 2022.
2 See the accompanying
reconciliation of non-GAAP measures at the end of this press
release.
“Our fourth quarter and full year results
demonstrated meaningful progress in our ongoing program to lower
our cost structure and streamline operations while maintaining best
in class safety and service quality. In the fourth quarter, we
expanded our Adjusted EBITDA margin by nearly 140 basis points to
4.5%, representing a 45% increase in Adjusted EBITDA to $9.7
million on relatively modest revenue growth,” said Keith D. Tucker,
Team’s Chief Executive Officer. “For the full year, we grew revenue
2.7% while delivering Adjusted EBITDA of $42.5 million, up 155%
over 2022, and an Adjusted EBITDA margin of 4.9%, more than double
the margin for 2022.”
Mr. Tucker commented further on the Company’s
progress executing its improvement plan: “Throughout 2023, we
prioritized reducing our cost structure, expanding margins and
increasing cash flow by implementing cost reductions that we expect
to yield at least $16.0 million per year in annualized savings. Our
fourth quarter and full year results demonstrated tangible progress
against those goals through an expanded Adjusted EBITDA margin and,
for the fourth quarter, $8.1 million of positive Free Cash Flow. I
am grateful for the hard work and dedication of our employees
during this pivotal year and for their continued focus on our
ongoing efforts to build a financially stronger TEAM.”
“Looking ahead, we expect to further capitalize
on this operational and financial momentum through targeted
commercial initiatives that leverage our deep customer
relationships and extensive technical capabilities. We will also
plan to continue focusing on further reducing our cost structure,
and in the first quarter of 2024, we implemented additional
targeted cost reductions that we expect to yield $4.0 million of
annual savings and identified additional opportunities to lower our
costs without negatively impacting service quality or safety. We
believe these initiatives, coupled with stronger industry activity
levels, will drive additional improvement in our financial
position,” commented Tucker.
“In the fourth quarter of 2023, utilizing both
internal and external resources, we began a thorough review of our
commercial strategy designed to hone our focus and further identify
and unlock what we see as significant opportunities for long-term
organic growth in both our core and select adjacent markets.
Concurrent with our upcoming first quarter earnings release, we
plan to provide an investor update on the conclusions from our
commercial review, our significant operational progress made to
date and our longer-term objectives targeted to further unlock the
intrinsic value of TEAM,” concluded Tucker.
Financial Results
Fourth quarter revenues were up $2.8 million to
$214.1 million as compared to $211.3 million in the prior-year
period. The increase was driven by higher Inspection and Heat
Treating (“IHT”) revenue of $4.6 million, partially offset by lower
Mechanical Services (“MS”) revenue of $1.8 million. In the fourth
quarter of 2023, consolidated gross margin was $50.4 million, or
23.6% of revenue, down 120 basis points from 24.8%, or $52.4
million, in the same quarter a year ago. Gross margin for the
quarter was impacted by a less favorable project mix, and higher
direct costs.
Selling, general and administrative expenses for
the fourth quarter were $59.3 million, up by $2.1 million, or 3.7%,
from the fourth quarter of 2022, primarily due to higher legal
reserves. Adjusted Selling, General and Administrative Expense,
which excludes expenses not representative of TEAM’s ongoing
operations as well as non-cash expenses such as depreciation and
amortization and share-based compensation expense, declined by
$4.5 million as compared to the 2022 period and
$1.1 million as compared to the third quarter of 2023, driven
mainly by lower personnel costs and professional fees resulting
from the Company’s ongoing cost reduction efforts.
Net loss in the fourth quarter of 2023 was $23.1
million (a loss of $5.25 per share) compared to a net loss of
$56.9 million (a loss of $13.15 per share) in the 2022 fourth
quarter. The 2022 period included a loss on debt extinguishment of
$30.1 million due to the paydown of $225.0 million of debt in early
November. The Company’s adjusted measure of net income/loss,
consolidated Adjusted EBIT, a non-GAAP measure, was a loss of $0.4
million in the 2023 fourth quarter compared to a loss of $2.0
million in the prior year quarter. Consolidated Adjusted EBITDA, a
non-GAAP measure, was $9.7 million for the fourth quarter of 2023
up 45.1% compared to $6.7 million for the prior-year quarter.
For the full year 2023, consolidated revenues
were $862.6 million, up 2.7% compared to $840.2 million
in 2022. Unfavorable foreign exchange rate movements throughout
2023 negatively impacted revenue growth by approximately $2.3
million. Gross margin for the year grew to $211.2 million
(24.5% of revenue) as compared to $201.6 million (24.0% of
revenue) in 2022, primarily due to an increase in activity levels
and project mix.
Selling, general and administrative expenses for
2023 were $224.4 million, down $17.0 million, or 7.0%,
compared to 2022, primarily due to lower personnel costs and
professional fees resulting from the Company’s ongoing cost
reduction efforts. Adjusted Selling, General and Administrative
Expense declined by $16.4 million compared to the 2022 period for
the reasons noted above.
Net loss was $75.7 million, or a loss of
$17.32 per share, compared to a net loss of $150.1 million, or
a loss of $35.85 per share, in 2022. Net loss for 2023 and 2022
includes a loss on debt extinguishment of $1.6 million and $30.1
million, respectively, due to debt repayment. Consolidated Adjusted
EBITDA, a non-GAAP measure, was $42.5 million for 2023, up
155.1% compared to $16.7 million in 2022, reflecting the
Company’s cost reduction efforts combined with improved margins due
to higher activity levels, improvements on pricing and more
favorable job mix.
Adjusted net loss, consolidated Adjusted EBIT,
Adjusted EBITDA and Adjusted Selling, General and Administrative
Expense are non-GAAP financial measures that exclude certain items
that are not indicative of TEAM’s core operating activities. A
reconciliation of these non-GAAP financial measures to the most
comparable GAAP financial measures is at the end of this earnings
release.
Segment Results
The following table illustrates the composition
of the Company’s revenue and operating income (loss) by segment for
the quarters ended December 31, 2023 and 2022 (in thousands):
TEAM, INC. AND SUBSIDIARIES |
SEGMENT INFORMATION |
(unaudited, in thousands) |
|
|
|
|
|
|
|
Three Months EndedDecember
31, |
|
Better (Worse) |
|
|
|
2023 |
|
|
|
2022 |
|
|
$ |
|
% |
Revenues |
|
|
|
|
|
|
|
|
IHT |
|
$ |
107,133 |
|
|
$ |
102,529 |
|
|
$ |
4,604 |
|
|
4.5 |
% |
MS |
|
|
106,998 |
|
|
|
108,762 |
|
|
|
(1,764 |
) |
|
(1.6)% |
|
|
$ |
214,131 |
|
|
$ |
211,291 |
|
|
$ |
2,840 |
|
|
1.3 |
% |
|
|
|
|
|
|
|
|
|
Operating income
(loss) |
|
|
|
|
|
|
|
|
IHT |
|
$ |
6,537 |
|
|
$ |
4,055 |
|
|
$ |
2,482 |
|
|
61.2 |
% |
MS |
|
|
5,364 |
|
|
|
5,778 |
|
|
|
(414 |
) |
|
(7.2)% |
Corporate and shared support services |
|
|
(20,769 |
) |
|
|
(14,706 |
) |
|
|
(6,063 |
) |
|
(41.2)% |
|
|
$ |
(8,868 |
) |
|
$ |
(4,873 |
) |
|
$ |
(3,995 |
) |
|
(82.0)% |
Revenues. IHT’s revenue
increased by $4.6 million, or 4.5%, for the 2023 fourth quarter as
compared to prior year period, primarily due to higher callout and
turnaround activities in the U.S. and Europe regions. MS revenue
decreased by $1.8 million or 1.6%, for the quarter with increases
in leak repair and hot tapping revenue in international areas
(excluding Canada) of $4.7 million offset by lower period over
period revenue in the U.S. and Canada due to turnaround projects
that did not repeat in the 2023 quarter.
Operating income (loss). IHT’s
fourth quarter 2023 operating income increased by $2.5 million to
$6.5 million due to higher activity levels combined with the
realized effects of cost reductions implemented throughout 2023. MS
operating income was lower compared to prior year quarter by
approximately $0.4 million. Corporate and shared support services
costs increased by $6.1 million primarily due to higher legal
reserves recorded in the 2023 period. Consolidated operating loss
increased by $4.0 million driven by the factors discussed
above.
The following table illustrates the composition of the Company’s
revenue and operating income (loss) by segment for the twelve
months ended December 31, 2023 and 2022 (in thousands):
TEAM, INC. AND SUBSIDIARIES |
SEGMENT INFORMATION |
(unaudited, in thousands) |
|
|
|
|
|
|
|
Twelve Months EndedDecember
31, |
|
Better (Worse) |
|
|
|
2023 |
|
|
|
2022 |
|
|
$ |
|
% |
Revenues |
|
|
|
|
|
|
|
|
IHT |
|
$ |
429,559 |
|
|
$ |
422,562 |
|
|
$ |
6,997 |
|
1.7 |
% |
MS |
|
|
433,056 |
|
|
|
417,646 |
|
|
|
15,410 |
|
3.7 |
% |
|
|
$ |
862,615 |
|
|
$ |
840,208 |
|
|
$ |
22,407 |
|
2.7 |
% |
|
|
|
|
|
|
|
|
|
Operating income
(loss) |
|
|
|
|
|
|
|
|
IHT |
|
$ |
24,220 |
|
|
$ |
17,093 |
|
|
$ |
7,127 |
|
41.7 |
% |
MS |
|
|
27,759 |
|
|
|
20,930 |
|
|
|
6,829 |
|
32.6 |
% |
Corporate and shared support services |
|
|
(65,255 |
) |
|
|
(77,825 |
) |
|
|
12,570 |
|
16.2 |
% |
|
|
$ |
(13,276 |
) |
|
$ |
(39,802 |
) |
|
$ |
26,526 |
|
66.6 |
% |
Revenues. IHT revenues
increased by $7.0 million, or 1.7%, over the prior year, driven
mainly by revenue increases of $10.3 million in the U.S. due to
higher callout and turnaround activities, $5.1 million in Europe
due to higher turnaround activity primarily in the Netherlands, and
$1.5 million in our aerospace business. These increases were
partially offset by a $9.9 million decrease in Canada due to
reduced scope in certain client turnaround projects. MS revenue
increased by $15.4 million, or 3.7%, over the prior year, driven by
a $16.7 million increase across our international regions
(excluding Canada) due to higher activity related to leak repair,
machining and bolting, and hot tapping services in the United
Kingdom and Europe, partially offset by $1.0 million of lower
revenue in Canada due to non-repeating turnaround work.
Operating income (loss). IHT’s
operating income increased by $7.1 million to $24.2 million,
primarily driven by higher activity as described above. MS
operating income increased by $6.8 million year over year to $27.8
million for 2023, mainly due to increased activity levels from
international operations, partially offset by a decrease in
operating income from our valve business. Corporate operating loss
decreased by $12.6 million year over year, mainly due to lower
personnel and professional costs in the current year attributable
to our ongoing cost reduction efforts. The impact of our cost
reduction efforts has been partially offset by continued cost
inflation across all segments in areas such as raw materials,
insurance, transportation, and labor costs.
Balance Sheet and Liquidity
At December 31, 2023, the Company had
$61.7 million of total liquidity, consisting of consolidated
cash and cash equivalents of $30.4 million, (excluding
$5.0 million of restricted cash) and $31.3 million in
undrawn availability under its various credit facilities.
At March 5, 2024, the Company had $36.1 million
of total liquidity, consisting of consolidated cash and cash
equivalents of $24.0 million (excluding $4.9 million held mainly as
collateral for outstanding letters of credit) and approximately
$12.1 million of undrawn availability under its various credit
facilities. The seasonality in the Company’s business activity
drove the expected reduction in total liquidity from year end 2023.
The Company typically experiences negative working capital and
liquidity impacts in the run up to the higher activity routinely
experienced during the spring and fall turnaround seasons, when
these negative working capital trends have historically
reversed.
The Company’s total debt as of December 31, 2023
was $311.4 million as compared to $285.9 million as of fiscal year
end 2022. The Company’s net debt (total debt less cash and cash
equivalents), a non-GAAP financial measure, was $276.0 million
at December 31, 2023.
Non-GAAP Financial Measures
The non-GAAP measures in this earnings release
are provided to enable investors, analysts and management to
evaluate Team’s performance excluding the effects of certain items
that management believes impact the comparability of operating
results between reporting periods. These measures should be used in
addition to, and not in lieu of, results prepared in conformity
with generally accepted accounting principles (“GAAP”). A
reconciliation of each of the non-GAAP financial measures to the
most directly comparable historical GAAP financial measure is
contained in the accompanying schedule for each of the fiscal
periods indicated.
About Team, Inc.
Headquartered in Sugar Land, Texas, Team, Inc.
(NYSE: TISI) is 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 client’s most critical assets. Through locations
in 15 countries, we unite the delivery of technological innovation
with over a century of progressive, yet proven integrity and
reliability management expertise to fuel a better tomorrow. For
more information, please visit www.teaminc.com.
Certain forward-looking information contained
herein is being provided in accordance with the provisions of the
Private Securities Litigation Reform Act of 1995. We have made
reasonable efforts to ensure that the information, assumptions, and
beliefs upon which this forward-looking information is based are
current, reasonable, and complete. However, such forward-looking
statements involve estimates, assumptions, judgments, and
uncertainties. They include but are not limited to statements
regarding the Company’s financial prospects and the implementation
of cost-saving measures. There are known and unknown factors that
could cause actual results or outcomes to differ materially from
those addressed in the forward-looking information. Although it is
not possible to identify all of these factors, they include, among
others: the Company’s ability to generate sufficient cash from
operations, access its credit facility, or maintain its compliance
with covenants under its credit facility and debt agreement, the
duration and magnitude of accidents, extreme weather, natural
disasters, and pandemics and related global economic effects and
inflationary pressures, the Company’s liquidity and ability to
obtain additional financing, the Company’s ability to continue as a
going concern, the Company’s ability to execute on its cost
management actions, the impact of new or changes to existing
governmental laws and regulations and their application, including
tariffs; the outcome of tax examinations, changes in tax laws, and
other tax matters; foreign currency exchange rate and interest rate
fluctuations; the Company’s ability to successfully divest assets
on terms that are favorable to the Company; our ability to repay,
refinance or restructure our debt and the debt of certain of our
subsidiaries; anticipated or expected purchases or sales of assets;
the Company’s continued listing on the New York Stock Exchange, and
such known factors as are detailed in the Company’s Annual Report
on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on
Form 8-K, each as filed with the Securities and Exchange
Commission, and in other reports filed by the Company with the
Securities and Exchange Commission from time to time. Accordingly,
there can be no assurance that the forward-looking information
contained herein, including statements regarding the Company’s
financial prospects and the implementation of cost-saving measures,
will occur or that objectives will be achieved. We assume no
obligation to publicly update or revise any forward-looking
statements made today or any other forward-looking statements made
by the Company, whether as a result of new information, future
events or otherwise, except as may be required by law.
Contact:Nelson M. HaightExecutive Vice
President, Chief Financial Officer(281) 388-5521
TEAM, INC. AND SUBSIDIARIES |
SUMMARY OF CONSOLIDATED OPERATING RESULTS |
(in thousands, except per share data) |
|
|
|
|
|
|
|
Three Months Ended |
|
Twelve Months Ended |
|
|
December 31, |
|
December 31, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
(unaudited) |
|
(unaudited) |
|
|
|
|
Revenues |
|
$ |
214,131 |
|
|
$ |
211,291 |
|
|
$ |
862,615 |
|
|
$ |
840,208 |
|
Operating
expenses |
|
|
163,682 |
|
|
|
158,941 |
|
|
|
651,461 |
|
|
|
638,597 |
|
Gross margin |
|
|
50,449 |
|
|
|
52,350 |
|
|
|
211,154 |
|
|
|
201,611 |
|
Selling, general, and
administrative expenses |
|
|
59,317 |
|
|
|
57,223 |
|
|
|
224,430 |
|
|
|
241,397 |
|
Restructuring and
other related charges, net |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
16 |
|
Operating loss |
|
|
(8,868 |
) |
|
|
(4,873 |
) |
|
|
(13,276 |
) |
|
|
(39,802 |
) |
Interest expense,
net |
|
|
(11,682 |
) |
|
|
(21,344 |
) |
|
|
(55,181 |
) |
|
|
(85,052 |
) |
Loss on debt
extinguishment and modification |
|
|
— |
|
|
|
(30,083 |
) |
|
|
(1,585 |
) |
|
|
(30,083 |
) |
Other (income)
expense, net |
|
|
(2,016 |
) |
|
|
(1,508 |
) |
|
|
(1,102 |
) |
|
|
8,156 |
|
Loss before income
taxes |
|
|
(22,566 |
) |
|
|
(57,808 |
) |
|
|
(71,144 |
) |
|
|
(146,781 |
) |
Less: Provision
(benefit) for income taxes |
|
|
(558 |
) |
|
|
876 |
|
|
|
(4,578 |
) |
|
|
(3,306 |
) |
Net loss from
continuing operations |
|
$ |
(23,124 |
) |
|
$ |
(56,932 |
) |
|
$ |
(75,722 |
) |
|
$ |
(150,087 |
) |
|
|
|
|
|
|
|
|
|
Net income from
discontinued operations |
|
|
— |
|
|
|
203,898 |
|
|
|
— |
|
|
|
220,166 |
|
Net income
(loss) |
|
|
(23,124 |
) |
|
|
146,966 |
|
|
|
(75,722 |
) |
|
|
70,079 |
|
Loss per common
share: |
|
|
|
|
|
|
|
|
Basic |
|
$ |
(5.25 |
) |
|
$ |
(13.15 |
) |
|
$ |
(17.32 |
) |
|
$ |
(35.85 |
) |
|
|
|
|
|
|
|
|
|
Weighted-average
number of shares outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
|
4,407 |
|
|
|
4,331 |
|
|
|
4,371 |
|
|
|
4,187 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TEAM, INC. AND SUBSIDIARIES |
SUMMARY CONSOLIDATED BALANCE SHEET
INFORMATION |
(in thousands) |
|
|
|
|
|
|
December 31, |
|
|
December 31, |
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents |
$ |
35,427 |
|
|
$ |
58,075 |
|
|
|
|
|
Other current
assets |
|
286,674 |
|
|
|
289,478 |
|
|
|
|
|
Property, plant, and
equipment, net |
|
127,057 |
|
|
|
138,099 |
|
|
|
|
|
Other non-current
assets |
|
116,586 |
|
|
|
130,993 |
|
|
|
|
|
Total assets |
$ |
565,744 |
|
|
$ |
616,645 |
|
|
|
|
|
Current portion of
long-term debt and finance lease obligations |
$ |
5,212 |
|
|
$ |
280,993 |
|
|
|
|
|
Other current
liabilities |
|
169,726 |
|
|
|
167,871 |
|
|
|
|
|
Long-term debt and
finance lease obligations, net of current maturities |
|
306,214 |
|
|
|
4,942 |
|
|
|
|
|
Other non-current
liabilities |
|
38,996 |
|
|
|
45,079 |
|
|
|
|
|
Stockholders’
equity |
|
45,596 |
|
|
|
117,760 |
|
|
|
|
|
Total liabilities and stockholders’ equity |
$ |
565,744 |
|
|
$ |
616,645 |
|
TEAM INC. AND SUBSIDIARIES |
SUMMARY CONSOLIDATED CASH FLOW
INFORMATION1 |
(in thousands) |
|
|
|
|
|
Twelve Months Ended December 31, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss) |
|
$ |
(75,722 |
) |
|
$ |
70,079 |
|
|
|
|
|
|
Depreciation and
amortization expense |
|
|
37,872 |
|
|
|
37,595 |
|
|
|
|
|
|
Gain on sale of
Quest |
|
|
— |
|
|
|
(203,351 |
) |
|
|
|
|
|
Amortization of debt
issuance costs and debt discounts |
|
|
18,725 |
|
|
|
35,509 |
|
|
|
|
|
|
Deferred income
taxes |
|
|
906 |
|
|
|
653 |
|
|
|
|
|
|
Non-cash compensation
cost |
|
|
1,590 |
|
|
|
247 |
|
|
|
|
|
|
Write-off of software
cost |
|
|
629 |
|
|
|
— |
|
|
|
|
|
|
Write-off of deferred
loan costs |
|
|
— |
|
|
|
2,748 |
|
|
|
|
|
|
Loss on debt
extinguishment |
|
|
1,585 |
|
|
|
17,719 |
|
|
|
|
|
|
Other |
|
|
3,429 |
|
|
|
(19,134 |
) |
|
|
|
|
|
Net cash used in operating activities |
|
|
(10,986 |
) |
|
|
(57,935 |
) |
|
|
|
|
|
Capital
expenditures |
|
|
(10,430 |
) |
|
|
(24,690 |
) |
|
|
|
|
|
Proceeds from disposal
of assets |
|
|
414 |
|
|
|
7,205 |
|
|
|
|
|
|
Net proceeds from sale
of Quest |
|
|
— |
|
|
|
260,841 |
|
|
|
|
|
|
Net cash provided by (used in) investing
activities |
|
|
(10,016 |
) |
|
|
243,356 |
|
|
|
|
|
|
Borrowings under ABL
Facility, net |
|
|
13,499 |
|
|
|
37,916 |
|
|
|
|
|
|
Repayments of
Convertible Debt |
|
|
(41,161 |
) |
|
|
— |
|
|
|
|
|
|
Borrowings under ME/RE
Term Loans, net |
|
|
25,823 |
|
|
|
— |
|
|
|
|
|
|
Payments under
Atlantic Park Term Loan |
|
|
(37,092 |
) |
|
|
(224,946 |
) |
|
|
|
|
|
Borrowings under Corre
Incremental Term Loan, net |
|
|
47,181 |
|
|
|
— |
|
|
|
|
|
|
Payments for debt
issuance costs |
|
|
(9,102 |
) |
|
|
(13,709 |
) |
|
|
|
|
|
Issuance of common
stock, net of issuance costs |
|
|
— |
|
|
|
9,639 |
|
|
|
|
|
|
Other |
|
|
(1,047 |
) |
|
|
(871 |
) |
|
|
|
|
|
Net cash used in financing activities |
|
|
(1,899 |
) |
|
|
(191,971 |
) |
|
|
|
|
|
Effect of exchange
rate changes |
|
|
253 |
|
|
|
(690 |
) |
|
|
|
|
|
Net change in cash and
cash equivalents |
|
$ |
(22,648 |
) |
|
$ |
(7,240 |
) |
1 Consolidated statement of cash
flows for the year ended December 31, 2022 includes cash flows from
discontinued operations.
TEAM, INC. AND SUBSIDIARIES |
SEGMENT INFORMATION |
(unaudited, in thousands) |
|
|
|
|
|
|
|
Three Months EndedDecember
31, |
|
Twelve Months EndedDecember
31, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Revenues |
|
|
|
|
|
|
|
|
IHT |
|
$ |
107,133 |
|
|
$ |
102,529 |
|
|
$ |
429,559 |
|
|
$ |
422,562 |
|
MS |
|
|
106,998 |
|
|
|
108,762 |
|
|
|
433,056 |
|
|
|
417,646 |
|
|
|
$ |
214,131 |
|
|
$ |
211,291 |
|
|
$ |
862,615 |
|
|
$ |
840,208 |
|
|
|
|
|
|
|
|
|
|
Operating income
(loss) |
|
|
|
|
|
|
|
|
IHT |
|
$ |
6,537 |
|
|
$ |
4,055 |
|
|
$ |
24,220 |
|
|
$ |
17,093 |
|
MS |
|
|
5,364 |
|
|
|
5,778 |
|
|
|
27,759 |
|
|
|
20,930 |
|
Corporate and shared support services |
|
|
(20,769 |
) |
|
|
(14,706 |
) |
|
|
(65,255 |
) |
|
|
(77,825 |
) |
|
|
$ |
(8,868 |
) |
|
$ |
(4,873 |
) |
|
$ |
(13,276 |
) |
|
$ |
(39,802 |
) |
|
|
|
|
|
|
|
|
|
Segment Adjusted
EBIT1 |
|
|
|
|
|
|
|
|
IHT |
|
$ |
6,742 |
|
|
$ |
4,149 |
|
|
$ |
25,653 |
|
|
$ |
17,379 |
|
MS |
|
|
5,641 |
|
|
|
6,374 |
|
|
|
28,698 |
|
|
|
21,615 |
|
Corporate and shared support services |
|
|
(12,782 |
) |
|
|
(12,502 |
) |
|
|
(51,311 |
) |
|
|
(59,030 |
) |
|
|
$ |
(399 |
) |
|
$ |
(1,979 |
) |
|
$ |
3,040 |
|
|
$ |
(20,036 |
) |
|
|
|
|
|
|
|
|
|
Segment Adjusted
EBITDA1 |
|
|
|
|
|
|
|
|
IHT |
|
$ |
9,754 |
|
|
$ |
7,168 |
|
|
$ |
38,055 |
|
|
$ |
29,770 |
|
MS |
|
|
10,283 |
|
|
|
11,173 |
|
|
|
47,453 |
|
|
|
40,636 |
|
Corporate and shared support services |
|
|
(10,314 |
) |
|
|
(11,640 |
) |
|
|
(43,006 |
) |
|
|
(53,742 |
) |
|
|
$ |
9,723 |
|
|
$ |
6,701 |
|
|
$ |
42,502 |
|
|
$ |
16,664 |
|
|
|
|
|
|
|
|
|
|
___________________1 See the accompanying
reconciliation of non-GAAP measures at the end of this earnings
release.
TEAM, INC. AND
SUBSIDIARIESNon-GAAP Financial Measures and
Reconciliations(Unaudited)
The Company uses supplemental non-GAAP financial
measures which are derived from the consolidated financial
information including adjusted net income (loss); adjusted net
income (loss) per share; earnings before interest and taxes
(“EBIT”); Adjusted EBIT (defined below); adjusted earnings before
interest, taxes, depreciation, and amortization (“Adjusted
EBITDA”), free cash flow and net debt to supplement financial
information presented on a GAAP basis.
The Company defines adjusted net income (loss)
and adjusted net income (loss) per share to exclude the following
items: non-routine legal costs and settlements, non-routine
professional fees, loss on debt extinguishment, certain severance
charges, non-routine write off of assets and certain other items
that we believe are not indicative of core operating activities.
Consolidated Adjusted EBIT, as defined by us, excludes the costs
excluded from adjusted net income (loss) as well as income tax
expense (benefit), interest charges, foreign currency (gain) loss,
and items of other (income) expense. Consolidated Adjusted EBITDA
further excludes from consolidated Adjusted EBIT depreciation,
amortization and non-cash share-based compensation costs. Segment
Adjusted EBIT is equal to segment operating income (loss) excluding
costs associated with non-routine legal costs and settlements,
non-routine professional fees, certain severance charges, and
certain other items as determined by management. Segment Adjusted
EBITDA further excludes from segment Adjusted EBIT depreciation,
amortization, and non-cash share-based compensation costs. Adjusted
Selling, General and Administrative Expense is defined to exclude
non-routine legal costs and settlements, non-routine professional
fees, certain severance charges, certain other items that we
believe are not indicative of core operating activities and
non-cash expenses such as depreciation and amortization and
non-cash compensation. Free Cash Flow is defined as net cash
provided by (used in) operating activities minus capital
expenditures. Net debt is defined as the sum of the current and
long-term portions of debt, including finance lease obligations,
less cash and cash equivalents.
Management believes these non-GAAP financial
measures are useful to both management and investors in their
analysis of our financial position and results of operations. In
particular, adjusted net income (loss), adjusted net income (loss)
per share, consolidated Adjusted EBIT, and consolidated Adjusted
EBITDA are meaningful measures of performance which are commonly
used by industry analysts, investors, lenders, and rating agencies
to analyze operating performance in our industry, perform
analytical comparisons, benchmark performance between periods, and
measure our performance against externally communicated targets.
Our segment Adjusted EBIT and segment Adjusted EBITDA are also used
as a basis for the Chief Operating Decision Maker to evaluate the
performance of our reportable segments. Free cash flow is used by
our management and investors to analyze our ability to service and
repay debt and return value directly to stakeholders.
Non-GAAP measures have important limitations as
analytical tools because they exclude some, but not all, items that
affect net earnings and operating income. These measures should not
be considered substitutes for their most directly comparable U.S.
GAAP financial measures and should be read only in conjunction with
financial information presented on a GAAP basis. Further, our
non-GAAP financial measures may not be comparable to similarly
titled measures of other companies who may calculate non-GAAP
financial measures differently, limiting the usefulness of those
measures for comparative purposes. The liquidity measure of free
cash flow does not represent a precise calculation of residual cash
flow available for discretionary expenditures. Reconciliations of
each non-GAAP financial measure to its most directly comparable
GAAP financial measure are presented below.
TEAM, INC. AND SUBSIDIARIES |
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES |
(unaudited, in thousands except per share
data) |
|
|
|
|
|
|
|
Three Months EndedDecember
31, |
|
Twelve Months EndedDecember
31, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
|
|
|
|
Adjusted Net Income
(Loss): |
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(23,124 |
) |
|
$ |
(56,932 |
) |
|
$ |
(75,722 |
) |
|
$ |
(150,087 |
) |
Professional fees and other1 |
|
|
3,301 |
|
|
|
3,339 |
|
|
|
9,121 |
|
|
|
13,915 |
|
Legal costs (credit) and
other2 |
|
|
4,785 |
|
|
|
(700 |
) |
|
|
5,635 |
|
|
|
2,571 |
|
Severance charges, net3 |
|
|
387 |
|
|
|
933 |
|
|
|
1,564 |
|
|
|
3,961 |
|
Natural disaster insurance
recovery4 |
|
|
— |
|
|
|
(324 |
) |
|
|
— |
|
|
|
(1,196 |
) |
Loss on debt extinguishment5 |
|
|
— |
|
|
|
30,083 |
|
|
|
1,585 |
|
|
|
30,083 |
|
Write-off of other assets6 |
|
|
666 |
|
|
|
— |
|
|
|
1,295 |
|
|
|
— |
|
Tax impact of adjustments and other net tax
items7 |
|
|
(37 |
) |
|
|
(48 |
) |
|
|
(159 |
) |
|
|
(79 |
) |
Adjusted net
loss |
|
$ |
(14,022 |
) |
|
$ |
(23,649 |
) |
|
$ |
(56,681 |
) |
|
$ |
(100,832 |
) |
|
|
|
|
|
|
|
|
|
Adjusted net loss per
common share: |
|
|
|
|
|
|
|
|
Basic |
|
$ |
(3.18 |
) |
|
$ |
(5.46 |
) |
|
$ |
(12.97 |
) |
|
$ |
(24.08 |
) |
|
|
|
|
|
|
|
|
|
Consolidated Adjusted
EBIT and Adjusted EBITDA: |
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(23,124 |
) |
|
$ |
(56,932 |
) |
|
$ |
(75,722 |
) |
|
$ |
(150,087 |
) |
Provision (benefit) for income taxes |
|
|
558 |
|
|
|
(876 |
) |
|
|
4,578 |
|
|
|
3,306 |
|
Interest expense, net |
|
|
11,682 |
|
|
|
21,344 |
|
|
|
55,181 |
|
|
|
85,052 |
|
Foreign currency loss (gain) |
|
|
1,510 |
|
|
|
1,263 |
|
|
|
734 |
|
|
|
(2,692 |
) |
Pension credit8 |
|
|
(159 |
) |
|
|
(178 |
) |
|
|
(640 |
) |
|
|
(749 |
) |
Loss (gain) on equipment sale |
|
|
(5 |
) |
|
|
69 |
|
|
|
(291 |
) |
|
|
(4,200 |
) |
Loss on debt extinguishment5 |
|
|
— |
|
|
|
30,083 |
|
|
|
1,585 |
|
|
|
30,083 |
|
Professional fees and other1 |
|
|
3,301 |
|
|
|
3,339 |
|
|
|
9,121 |
|
|
|
13,915 |
|
Legal costs (credit) and
other2 |
|
|
4,785 |
|
|
|
(700 |
) |
|
|
5,635 |
|
|
|
2,571 |
|
Severance charges, net3 |
|
|
387 |
|
|
|
933 |
|
|
|
1,564 |
|
|
|
3,961 |
|
Natural disaster insurance
recovery4 |
|
|
— |
|
|
|
(324 |
) |
|
|
— |
|
|
|
(1,196 |
) |
Write-off of other assets6 |
|
|
666 |
|
|
|
— |
|
|
|
1,295 |
|
|
|
— |
|
Consolidated Adjusted
EBIT |
|
|
(399 |
) |
|
|
(1,979 |
) |
|
|
3,040 |
|
|
|
(20,036 |
) |
Depreciation and amortization |
|
|
|
|
|
|
|
|
Amount included in operating expenses |
|
|
3,529 |
|
|
|
3,757 |
|
|
|
14,555 |
|
|
|
15,600 |
|
Amount included in SG&A expenses |
|
|
5,862 |
|
|
|
5,246 |
|
|
|
23,317 |
|
|
|
20,853 |
|
Total depreciation and amortization |
|
|
9,391 |
|
|
|
9,003 |
|
|
|
37,872 |
|
|
|
36,453 |
|
Non-cash share-based compensation costs |
|
|
731 |
|
|
|
(323 |
) |
|
|
1,590 |
|
|
|
247 |
|
Consolidated Adjusted
EBITDA |
|
$ |
9,723 |
|
|
$ |
6,701 |
|
|
$ |
42,502 |
|
|
$ |
16,664 |
|
|
|
|
|
|
|
|
|
|
Free Cash
Flow: |
|
|
|
|
|
|
|
|
Cash provided by (used in) operating
activities |
|
$ |
11,083 |
|
|
$ |
(1,152 |
) |
|
$ |
(10,986 |
) |
|
$ |
(51,725 |
) |
Capital expenditures |
|
|
(2,997 |
) |
|
|
(3,245 |
) |
|
|
(10,430 |
) |
|
|
(20,544 |
) |
Free Cash
Flow |
|
$ |
8,086 |
|
|
$ |
(4,397 |
) |
|
$ |
(21,416 |
) |
|
$ |
(72,269 |
) |
__________________________ |
1 |
The three and twelve months ended December 31, 2023, includes $2.2
million and $6.7 million, respectively, related to costs associated
with debt financing, and $1.1 million and $2.4 million,
respectively, for lease extinguishment charges, support and other
costs. The three and twelve months ended December 31, 2022,
includes $1.8 million and $10.2 million, respectively, related to
costs associated with debt financing, and $1.5 million and $3.7
million of corporate support and other costs. |
2 |
Primarily relates to accrued legal matters, adjustments to legal
reserves and other legal fees related to debt restructuring and
other non-routine matters. These amounts include $3.9 million for
2023 and $1.6 million for 2022 related to accruals for repayment of
pandemic related subsidies in foreign jurisdiction. |
3 |
For 2023, represents customary severance costs associated with
staff reductions across multiple departments. For 2022, severance
charges represent costs associated with executive departures and
our ongoing cost reduction efforts across multiple segments. |
4 |
Represents the insurance recovery received during the year for
hurricane damage incurred in 2021. |
5 |
Represents loss on payoff of remaining APSC Term Loan in June 2023
and loss on payoff of $225.0 million of the APSC Term Loan in
November 2022. The 2022 loss consists of $12.4 million of cash
fees and premium, and $17.7 million of noncash expense related to
the write off of the related unamortized balance of deferred
issuance cost and warrant and debt discounts. |
6 |
Includes $0.7 million for the loss on settlement of a note
receivable and, for the full year 2023, an additional $0.6 million
for the write-off of software related costs. |
7 |
Represents the tax effect of the adjustments. |
8 |
Represents pension credit for the U.K. pension plan based on the
difference between the expected return on plan assets and the
amount of the discounted pension liability. The pension plan was
frozen in 1994 and no new participants have been added since that
date. |
TEAM, INC. AND SUBSIDIARIES |
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(Continued) |
(unaudited, in thousands) |
|
|
|
|
|
|
|
Three Months EndedDecember
31, |
|
Twelve Months EndedDecember
31, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
|
|
|
|
Segment Adjusted EBIT
and Adjusted EBITDA: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
IHT |
|
|
|
|
|
|
|
|
Operating income |
|
$ |
6,537 |
|
|
$ |
4,055 |
|
|
$ |
24,220 |
|
|
$ |
17,093 |
|
Professional fees and other |
|
|
113 |
|
|
|
— |
|
|
|
941 |
|
|
|
— |
|
Severance charges, net1 |
|
|
92 |
|
|
|
94 |
|
|
|
492 |
|
|
|
286 |
|
Adjusted EBIT |
|
|
6,742 |
|
|
|
4,149 |
|
|
|
25,653 |
|
|
|
17,379 |
|
Depreciation and amortization |
|
|
3,012 |
|
|
|
3,019 |
|
|
|
12,402 |
|
|
|
12,391 |
|
Adjusted EBITDA |
|
$ |
9,754 |
|
|
$ |
7,168 |
|
|
$ |
38,055 |
|
|
$ |
29,770 |
|
|
|
|
|
|
|
|
|
|
MS |
|
|
|
|
|
|
|
|
Operating income (loss) |
|
$ |
5,364 |
|
|
$ |
5,778 |
|
|
$ |
27,759 |
|
|
$ |
20,930 |
|
Professional fees and other |
|
|
80 |
|
|
|
— |
|
|
|
147 |
|
|
|
— |
|
Severance charges, net1 |
|
|
197 |
|
|
|
596 |
|
|
|
792 |
|
|
|
685 |
|
Adjusted EBIT |
|
|
5,641 |
|
|
|
6,374 |
|
|
|
28,698 |
|
|
|
21,615 |
|
Depreciation and amortization |
|
|
4,642 |
|
|
|
4,799 |
|
|
|
18,755 |
|
|
|
19,021 |
|
Adjusted EBITDA |
|
$ |
10,283 |
|
|
$ |
11,173 |
|
|
$ |
47,453 |
|
|
$ |
40,636 |
|
|
|
|
|
|
|
|
|
|
Corporate and shared
support services |
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(35,025 |
) |
|
$ |
(66,765 |
) |
|
$ |
(127,701 |
) |
|
$ |
(188,110 |
) |
Provision (benefit) for income taxes |
|
|
558 |
|
|
|
(876 |
) |
|
|
4,578 |
|
|
|
3,306 |
|
Loss (gain) on equipment sale |
|
|
(5 |
) |
|
|
69 |
|
|
|
(291 |
) |
|
|
(4,200 |
) |
Interest expense, net |
|
|
11,682 |
|
|
|
21,344 |
|
|
|
55,181 |
|
|
|
85,052 |
|
Loss on debt extinguishment2 |
|
|
— |
|
|
|
30,083 |
|
|
|
1,585 |
|
|
|
30,083 |
|
Foreign currency loss (gain) |
|
|
1,510 |
|
|
|
1,263 |
|
|
|
734 |
|
|
|
(2,692 |
) |
Pension credit3 |
|
|
(159 |
) |
|
|
(178 |
) |
|
|
(640 |
) |
|
|
(749 |
) |
Write-off of other assets4 |
|
|
666 |
|
|
|
— |
|
|
|
1,295 |
|
|
|
— |
|
Professional fees and other5 |
|
|
3,108 |
|
|
|
3,339 |
|
|
|
8,033 |
|
|
|
13,915 |
|
Legal costs (credit) and
other6 |
|
|
4,785 |
|
|
|
(700 |
) |
|
|
5,635 |
|
|
|
2,571 |
|
Severance charges, net1 |
|
|
98 |
|
|
|
243 |
|
|
|
280 |
|
|
|
2,990 |
|
Natural disaster insurance
recovery7 |
|
|
— |
|
|
|
(324 |
) |
|
|
— |
|
|
|
(1,196 |
) |
Adjusted EBIT |
|
|
(12,782 |
) |
|
|
(12,502 |
) |
|
|
(51,311 |
) |
|
|
(59,030 |
) |
Depreciation and amortization |
|
|
1,737 |
|
|
|
1,185 |
|
|
|
6,715 |
|
|
|
5,041 |
|
Non-cash share-based compensation costs |
|
|
731 |
|
|
|
(323 |
) |
|
|
1,590 |
|
|
|
247 |
|
Adjusted EBITDA |
|
$ |
(10,314 |
) |
|
$ |
(11,640 |
) |
|
$ |
(43,006 |
) |
|
$ |
(53,742 |
) |
__________________________ |
1 |
For 2023, represents customary severance costs associated with
staff reductions across multiple departments. For 2022, severance
charges represent costs associated with executive departures and
our ongoing cost reduction efforts across multiple segments. |
2 |
Represents loss on payoff of remaining APSC Term Loan in June 2023
and loss on payoff of $225.0 million of the APSC Term Loan in
November 2022. The 2022 loss consists of $12.4 million of cash
fees and premium, and $17.7 million of noncash expense related to
the write off of the related unamortized balance of deferred
issuance cost and warrant and debt discounts. |
3 |
Represents pension credit for the U.K. pension plan based on the
difference between the expected return on plan assets and the
amount of the discounted pension liability. The pension plan was
frozen in 1994 and no new participants have been added since that
date. |
4 |
Includes $0.7 million for the loss on settlement of a note
receivable and, for the full year 2023, an additional $0.6 million
for the write-off of software related costs. |
5 |
The three and twelve months ended December 31, 2023, includes $2.2
million and $6.7 million, respectively, related to costs associated
with debt financing, and $1.1 million and $2.4 million,
respectively, for lease extinguishment charges, support and other
costs. The three and twelve months ended December 31, 2022,
includes $1.8 million and $10.2 million, respectively, related to
costs associated with debt financing, and $1.5 million and $3.7
million of corporate support and other costs. |
6 |
Primarily relates to accrued legal matters, adjustments to legal
reserves and other legal fees related to debt restructuring and
other non-routine matters. These amounts include $3.9 million for
2023 and $1.6 million for 2022 related to accruals for repayment of
pandemic related subsidies in foreign jurisdiction. |
7 |
Represents the insurance recovery received during the year for
hurricane damage incurred in 2021. |
TEAM, INC. AND SUBSIDIARIES |
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(Continued) |
(unaudited, in thousands) |
|
|
|
|
|
|
|
|
|
|
|
Three Months EndedDecember
31, |
|
Twelve Months EndedDecember
31, |
|
|
|
2023 |
|
|
2022 |
|
|
|
2023 |
|
|
2022 |
|
|
|
|
|
|
|
|
|
Selling, general, and
administrative expenses |
|
$ |
59,317 |
|
$ |
57,223 |
|
|
$ |
224,430 |
|
$ |
241,397 |
Less: |
|
|
|
|
|
|
|
|
Depreciation and Amortization in SG&A
expenses |
|
|
5,862 |
|
|
5,246 |
|
|
|
23,317 |
|
|
20,853 |
Non-cash share-based compensation costs |
|
|
731 |
|
|
(323 |
) |
|
|
1,590 |
|
|
247 |
Professional fees and other1 |
|
|
3,301 |
|
|
3,339 |
|
|
|
9,121 |
|
|
13,915 |
Legal costs (credit) and
other2 |
|
|
4,785 |
|
|
(700 |
) |
|
|
5,635 |
|
|
2,571 |
Severance charges included in SG&A
expenses |
|
|
344 |
|
|
882 |
|
|
|
1,189 |
|
|
3,866 |
Total non-cash/non-recurring items |
|
|
15,023 |
|
|
8,444 |
|
|
|
40,852 |
|
|
41,452 |
Adjusted Selling,
General and Administrative Expense |
|
$ |
44,294 |
|
$ |
48,779 |
|
|
$ |
183,578 |
|
$ |
199,945 |
__________________________ |
1 |
The three and twelve months ended December 31, 2023, includes $2.2
million and $6.7 million, respectively, related to costs associated
with debt financing, and $1.1 million and $2.4 million,
respectively, for lease extinguishment charges, support and other
costs. The three and twelve months ended December 31, 2022,
includes $1.8 million and $10.2 million, respectively, related to
costs associated with debt financing, and $1.5 million and $3.7
million of corporate support and other costs. |
2 |
Primarily relates to accrued legal matters, adjustments to legal
reserves and other legal fees related to debt restructuring and
other non-routine matters. These amounts include $3.9 million for
2023 and $1.6 million for 2022 related to accruals for repayment of
pandemic related subsidies in foreign jurisdiction. |
Grafico Azioni Team (NYSE:TISI)
Storico
Da Nov 2024 a Dic 2024
Grafico Azioni Team (NYSE:TISI)
Storico
Da Dic 2023 a Dic 2024