SUGAR LAND, Texas, Aug. 3, 2021 /PRNewswire/ -- Team, Inc.
(NYSE: TISI), a global leading provider of integrated,
digitally-enabled asset performance assurance and optimization
solutions, today reported its financial results for the second
quarter ended June 30, 2021.
Second Quarter 2021 Results:
- Revenue of $238.9 million, up
$49.6 million, or 26.2%, from Q2
2020
- IHT and Quest segment revenue increased by 46.0% and 51.4%,
respectively from Q2 2020
- Gross margin was $62.8 million,
up $5.4 million from Q2 2020
- Quest adjusted EBITDA margin of 26.6%, surpassing the 2020 full
year average of 24.1%
"TEAM's second quarter results reflect a mix of activity
recovery and challenging market dynamics," said Amerino Gatti, TEAM's Chairman and Chief
Executive Officer. "Although we are not pleased with our overall
results, revenue was at the upper end of our outlook. All three
segments achieved revenue growth over Q2 2020 with Quest reporting
the largest overall percent increase at 51%. Inspection &
Heat Treating followed at approximately 46% and Mechanical Services
at 4.7%. The year-over-year topline growth was driven by strong
April activity levels from several large turnaround projects. May
and June activity benefited from increased economic activity as
COVID-related restrictions began to lift. While COVID continued to
force project delays, especially internationally, activity levels
throughout the quarter were mostly in line with expectations,
highlighting improved economic growth across the various end
markets in which we serve.
"TEAM faced margin headwinds in the second quarter. We
experienced inflation in several areas, such as raw materials,
transportation, and labor as well as increased technician training,
and lingering COVID-related pricing concessions. We remain focused
on cost discipline and continue to look for ways to mitigate
overall inflationary pressures. Pricing negotiations have started
with our clients to reflect current market conditions. Given these
proactive actions, combined with the transitory nature of the cost
increases, we expect our gross margin to improve in the second half
of the year.
"We continued our long-standing culture of technology
innovation. After several successful field tests, the
Mechanical Services segment commercialized our new, patent pending
SmartStopTM Isolation Technology. This new double
block and bleed isolation system increases integrity and overall
safety, further strengthening our competitive advantages in the hot
tapping market. Additionally, we entered into an agreement to
become the exclusive provider of Credosoft Integrity Management
Software in North America. The software enhances TEAM's
ability to monitor assets, ensure compliance and provide inspection
and repair solutions. The Credosoft service offering provides TEAM
a stable, subscription-based revenue profile and further positions
the company to be a leading provider of integrated
digitally-enabled asset performance optimization solutions.
"As we enter the second half of 2021, we are cautiously
optimistic about increased activity levels associated with an
improving economy. While the recent emergence of COVID
variants is concerning and could negatively impact our activity
levels, the outlook for the fall turnaround season looks solid
since operators are now in a better financial position to start
previously postponed maintenance projects. Additionally, our
international operations should benefit from progress of the
vaccine rollout and the gradual removal of lockdown restrictions in
key markets. Therefore, we expect sequential revenue growth
to continue in the third quarter.
"We are making advances towards further revenue diversification
into new markets, such as renewable energy and expanding regulatory
services that include emissions control. Our revenue
diversification efforts as well as investments in technology and
digital are poised to be future growth drivers. TEAM is
well-positioned to benefit from a strong economic recovery by
capitalizing on built-up demand and pursuing opportunities that
utilize the depth and breadth of our portfolio. We have a clear
strategic plan to become more capital efficient, capture profitable
growth, and generate positive cash flow," concluded Mr. Gatti.
Financial Results
Consolidated net loss in the second quarter of 2021 was
$17.5 million ($0.57 loss per diluted share) compared to a loss
of $13.5 million ($0.44 loss per diluted share) in the second
quarter of 2020. Consolidated Adjusted EBITDA, a non-GAAP measure,
was $9.1 million for the second
quarter of 2021 compared to $12.7
million for the prior year quarter.
Consolidated revenue for the second quarter of 2021 was
$238.9 million compared to
$189.3 million in the prior year
quarter. Revenue increased due to higher activity levels from
increased economic activity in the U.S. and select international
markets as economies opened from COVID-related shutdowns. In
the second quarter of 2021, consolidated gross margin was
$62.8 million, or 26.3%, compared
with 30.3% in the same quarter a year ago. Gross margin was
negatively impacted by cost inflation pressure combined with
lingering COVID-related price discounts and the reinstatement of
temporary cost reductions that TEAM enacted in 2020.
SG&A for the second quarter was $68.5
million, up $9.6 million, or a
16.3% increase from the second quarter of 2020. The company's
adjusted measure of net income/loss, Consolidated Adjusted EBIT, a
non-GAAP measure was a loss of $3.4
million in the second quarter compared to a loss of
$0.2 million in the prior year
comparable quarter.
Second quarter 2021 reported results include certain net charges
not indicative of TEAM's core operating activities, including:
$0.7 million of professional costs
related to the previously announced new strategic organizational
structure ("Operating Group Reorganization"), $0.3 million of severance charges primarily
associated with the Operating Group Reorganization, and
$1.6 million for accrued legal
matters and other legal fees. Net of tax, these items totaled
$2.6 million or $0.08 per diluted share.
Adjusted net loss, consolidated Adjusted EBIT, and Adjusted
EBITDA 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
release.
Segment Results
The following table illustrates the composition of the company's
revenue and operating income (loss) by segment for the quarters
ended June 30, 2021 and 2020 (in
thousands):
|
Three Months
Ended
June
30,
|
Increase
(Decrease)
|
|
2021
|
|
2020
|
|
$
|
%
|
|
(unaudited)
|
|
(unaudited)
|
|
|
|
Revenues by business
segment:
|
|
|
|
|
|
|
IHT
|
$
|
117,462
|
|
|
$
|
80,474
|
|
|
$
|
36,988
|
|
46.0
|
%
|
MS
|
97,167
|
|
|
92,820
|
|
|
4,347
|
|
4.7
|
%
|
Quest
Integrity
|
24,244
|
|
|
16,010
|
|
|
8,234
|
|
51.4
|
%
|
Total
|
$
|
238,873
|
|
|
$
|
189,304
|
|
|
$
|
49,569
|
|
26.2
|
%
|
Operating income
(loss):
|
|
|
|
|
|
|
IHT
|
$
|
7,395
|
|
|
$
|
4,740
|
|
|
$
|
2,655
|
|
56.0
|
%
|
MS
|
2,328
|
|
|
9,899
|
|
|
(7,571)
|
|
(76.5)
|
%
|
Quest
Integrity
|
5,702
|
|
|
689
|
|
|
5,013
|
|
727.6
|
%
|
Corporate and shared
support services
|
(21,419)
|
|
|
(19,694)
|
|
|
(1,725)
|
|
(8.8)
|
%
|
Total
|
$
|
(5,994)
|
|
|
$
|
(4,366)
|
|
|
$
|
(1,628)
|
|
(37.3)
|
%
|
All three business segments delivered year-over-year revenue
growth due to higher activity levels from increased economic
activity in the U.S. and select international markets as economies
opened up from COVID-related shutdowns. IHT results included a
46.0% year-over-year improvement in revenue primarily due to
increased activity levels in the U.S. and Canada and 56.0% increase in operating income.
MS delivered a 4.7% year-over-year improvement in revenue due to an
increase in Turnaround projects and call-out work. However,
MS's operating income declined due to inflationary cost pressures
in raw materials and labor. Quest Integrity's results
included a 51.4% year-over-year improvement in revenue and a
$5.0 million increase in operating
income. The increase in Quest Integrity is primarily the
result of easing COVID-related global restrictions, additional
subsea inspection work, and increased demand for Quest's
proprietary services.
Cash and Debt
Consolidated cash and cash equivalents were $18.4 million at June 30,
2021. The company's net debt (total debt less cash and cash
equivalents) was $338.1 million at
June 30, 2021, compared to
$287.9 million at Dec. 31, 2020.
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.
Conference Call and Webcast Details
Team, Inc. will host a conference call on Wednesday, August 4, 2021 at 10:00 a.m. Eastern Time (9:00 a.m. Central Time) to review its second
quarter 2021 results.
By Phone: Dial 1-877-407-5794 inside the U.S. or 1-201-389-0869
outside the U.S. at least 10 minutes before the call. A telephone
replay will be available through August 11,
2021 by dialing 1-877-660-6853 inside the U.S. or
201-612-7415 outside the U.S. using the Conference ID
13720696#.
By Webcast: The call will be broadcast over the web and can be
accessed on TEAM's website, www.teaminc.com under "Investor
Relations." Please log on at least 10 minutes in advance to
register and download any necessary software. A replay will be
available shortly after the call.
About Team, Inc.
Headquartered in Sugar Land,
Texas, Team Inc. (NYSE: TISI) is a global leading provider
of integrated, digitally-enabled asset performance assurance and
optimization solutions. We deploy conventional to highly
specialized inspection, condition assessment, maintenance and
repair services that result in greater safety, reliability and
operational efficiency for our client's most critical assets.
Through locations in more than 20 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. 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 duration and magnitude of the COVID-19 pandemic, related
economic effects and the resulting negative impact on demand for
oil and gas 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 projected
cost savings, 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.
TEAM, INC. AND
SUBSIDIARIES
|
SUMMARY OF
CONSOLIDATED OPERATING RESULTS
|
(unaudited, in
thousands, except per share data)
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
June
30,
|
|
June
30,
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
238,873
|
|
|
$
|
189,304
|
|
|
$
|
433,491
|
|
|
$
|
426,143
|
|
Operating
expenses
|
|
176,109
|
|
|
131,928
|
|
|
327,026
|
|
|
311,281
|
|
Gross
margin
|
|
62,764
|
|
|
57,376
|
|
|
106,465
|
|
|
114,862
|
|
Selling, general
and administrative expenses
|
|
68,478
|
|
|
58,882
|
|
|
134,602
|
|
|
137,326
|
|
Restructuring and
other related charges, net
|
|
280
|
|
|
2,860
|
|
|
2,157
|
|
|
3,046
|
|
Goodwill
impairment charge
|
|
—
|
|
|
—
|
|
|
—
|
|
|
191,788
|
|
Operating
loss
|
|
(5,994)
|
|
|
(4,366)
|
|
|
(30,294)
|
|
|
(217,298)
|
|
Interest expense,
net
|
|
9,598
|
|
|
7,314
|
|
|
18,994
|
|
|
14,090
|
|
Other expense,
net
|
|
1,044
|
|
|
165
|
|
|
1,994
|
|
|
637
|
|
Loss before income
taxes
|
|
(16,636)
|
|
|
(11,845)
|
|
|
(51,282)
|
|
|
(232,025)
|
|
Provision
(benefit) for income taxes
|
|
857
|
|
|
1,683
|
|
|
502
|
|
|
(18,770)
|
|
Net
loss
|
|
$
|
(17,493)
|
|
|
$
|
(13,528)
|
|
|
$
|
(51,784)
|
|
|
$
|
(213,255)
|
|
|
|
|
|
|
|
|
|
|
Loss per common
share:
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
|
$
|
(0.57)
|
|
|
$
|
(0.44)
|
|
|
$
|
(1.68)
|
|
|
$
|
(6.97)
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
number of shares outstanding:
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
|
30,940
|
|
|
30,628
|
|
|
30,909
|
|
|
30,584
|
|
TEAM, INC. AND
SUBSIDIARIES
|
SUMMARY
CONSOLIDATED BALANCE SHEET INFORMATION
|
(in
thousands)
|
|
|
|
|
|
June
30,
|
|
December
31,
|
|
2021
|
|
2020
|
|
(unaudited)
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
18,355
|
|
|
$
|
24,586
|
|
|
|
|
|
Other current
assets
|
353,057
|
|
|
259,146
|
|
|
|
|
|
Property, plant
and equipment, net
|
164,692
|
|
|
170,309
|
|
|
|
|
|
Other non-current
assets
|
270,256
|
|
|
276,934
|
|
|
|
|
|
Total
assets
|
$
|
806,360
|
|
|
$
|
730,975
|
|
|
|
|
|
Current portion of
long-term debt and finance lease obligations
|
$
|
473
|
|
|
$
|
337
|
|
|
|
|
|
Other current
liabilities
|
214,791
|
|
|
132,667
|
|
|
|
|
|
Long-term debt and
finance lease obligations, net of current maturities
|
355,986
|
|
|
312,159
|
|
|
|
|
|
Other non-current
liabilities
|
67,205
|
|
|
71,209
|
|
|
|
|
|
Stockholders'
equity
|
167,905
|
|
|
214,603
|
|
|
|
|
|
Total liabilities
and stockholders' equity
|
$
|
806,360
|
|
|
$
|
730,975
|
|
TEAM INC. AND
SUBSIDIARIES
|
SUMMARY
CONSOLIDATED CASH FLOW INFORMATION
|
(unaudited, in
thousands)
|
|
|
|
|
|
Six Months Ended
June 30,
|
|
|
2021
|
|
2020
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
$
|
(51,784)
|
|
|
$
|
(213,255)
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
21,306
|
|
|
23,186
|
|
|
|
|
|
|
Allowance for
credit losses
|
|
965
|
|
|
1,122
|
|
|
|
|
|
|
Deferred income
taxes
|
|
(2,318)
|
|
|
(5,177)
|
|
|
|
|
|
|
Non-cash
compensation cost
|
|
4,468
|
|
|
2,946
|
|
|
|
|
|
|
Goodwill
impairment charge
|
|
—
|
|
|
191,788
|
|
|
|
|
|
|
Working capital
changes
|
|
(11,789)
|
|
|
23,347
|
|
|
|
|
|
|
Other items
affecting operating cash flows
|
|
4,353
|
|
|
3,288
|
|
|
|
|
|
|
Net cash (used in)
provided by operating activities
|
|
(34,799)
|
|
|
27,245
|
|
|
|
|
|
|
Capital
expenditures
|
|
(9,220)
|
|
|
(12,486)
|
|
|
|
|
|
|
Cash used for
business acquisitions, net
|
|
—
|
|
|
(1,013)
|
|
|
|
|
|
|
Proceeds from
disposal of assets
|
|
49
|
|
|
181
|
|
|
|
|
|
|
Other items
affecting investing cash flow
|
|
—
|
|
|
54
|
|
|
|
|
|
|
Net cash used in
investing activities
|
|
(9,171)
|
|
|
(13,264)
|
|
|
|
|
|
|
Net payments under
Credit Facility revolver
|
|
—
|
|
|
(5,198)
|
|
|
|
|
|
|
Net borrowings
under ABL facility
|
|
40,300
|
|
|
—
|
|
|
|
|
|
|
Payments under
Credit Facility term loan
|
|
—
|
|
|
(2,500)
|
|
|
|
|
|
|
Payments for debt
issuance costs
|
|
(2,326)
|
|
|
(1,841)
|
|
|
|
|
|
|
Taxes paid for net
share settlement of share-based awards, net
|
|
(102)
|
|
|
(349)
|
|
|
|
|
|
|
Other items
affecting financing cash flows
|
|
(206)
|
|
|
(129)
|
|
|
|
|
|
|
Net cash provided
by (used in) financing activities
|
|
37,666
|
|
|
(10,017)
|
|
|
|
|
|
|
Effect of exchange
rate changes
|
|
73
|
|
|
(589)
|
|
|
|
|
|
|
Net change in cash
and cash equivalents
|
|
$
|
(6,231)
|
|
|
$
|
3,375
|
|
|
|
|
|
|
TEAM, INC. AND
SUBSIDIARIES
|
SEGMENT
INFORMATION
|
(unaudited, in
thousands)
|
|
|
|
|
|
|
|
Three Months
Ended June
30,
|
|
Six Months
Ended June
30,
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Revenues
|
|
|
|
|
|
|
|
|
IHT
|
|
$
|
117,462
|
|
|
$
|
80,474
|
|
|
$
|
208,601
|
|
|
$
|
188,355
|
|
MS
|
|
97,167
|
|
|
92,820
|
|
|
184,563
|
|
|
197,339
|
|
Quest
Integrity
|
|
24,244
|
|
|
16,010
|
|
|
40,327
|
|
|
40,449
|
|
|
|
$
|
238,873
|
|
|
$
|
189,304
|
|
|
$
|
433,491
|
|
|
$
|
426,143
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss) ("EBIT")
|
|
|
|
|
|
|
|
|
IHT
|
|
$
|
7,395
|
|
|
$
|
4,740
|
|
|
$
|
7,759
|
|
1
|
$
|
(187,410)
|
|
MS
|
|
2,328
|
|
|
9,899
|
|
|
2,443
|
|
|
10,921
|
|
Quest
Integrity
|
|
5,702
|
|
|
689
|
|
|
5,450
|
|
|
6,795
|
|
Corporate and
shared support services
|
|
(21,419)
|
|
|
(19,694)
|
|
|
(45,946)
|
|
|
(47,604)
|
|
|
|
$
|
(5,994)
|
|
|
$
|
(4,366)
|
|
|
$
|
(30,294)
|
|
|
$
|
(217,298)
|
|
|
|
|
|
|
|
|
|
|
Segment Adjusted
EBIT
|
|
|
|
|
|
|
|
|
IHT
|
|
$
|
7,405
|
|
|
$
|
5,770
|
|
|
$
|
8,244
|
|
|
$
|
5,416
|
|
MS
|
|
2,544
|
|
|
11,436
|
|
|
2,798
|
|
|
12,588
|
|
Quest
Integrity
|
|
5,744
|
|
|
829
|
|
|
5,701
|
|
|
6,935
|
|
Corporate and
shared support services
|
|
(19,064)
|
|
|
(18,263)
|
|
|
(38,746)
|
|
|
(42,330)
|
|
|
|
$
|
(3,371)
|
|
|
$
|
(228)
|
|
|
$
|
(22,003)
|
|
|
$
|
(17,391)
|
|
|
|
|
|
|
|
|
|
|
Segment Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
IHT
|
|
$
|
10,675
|
|
|
$
|
9,516
|
|
|
$
|
14,984
|
|
|
$
|
13,145
|
|
MS
|
|
7,587
|
|
|
16,911
|
|
|
13,280
|
|
|
23,494
|
|
Quest
Integrity
|
|
6,454
|
|
|
1,716
|
|
|
7,123
|
|
|
8,708
|
|
Corporate and
shared support services
|
|
(15,602)
|
|
|
(15,477)
|
|
|
(31,616)
|
|
|
(36,606)
|
|
|
|
$
|
9,114
|
|
|
$
|
12,666
|
|
|
$
|
3,771
|
|
|
$
|
8,741
|
|
|
|
|
|
|
|
|
1
|
Includes goodwill
impairment charge of $191.8 million for the six months ended
June 30, 2020. Excluding the goodwill impairment charge, operating
income for IHT would be $4.4 million for the six months ended
June 30, 2020.
|
TEAM, INC. AND SUBSIDIARIES
Non-GAAP Financial
Measures
(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 diluted
share, earnings before interest and taxes ("EBIT"); adjusted EBIT
(defined below); adjusted earnings before interest, taxes,
depreciation and amortization ("adjusted EBITDA") and free cash
flow to supplement financial information presented on a GAAP
basis.
The Company defines adjusted net income (loss), adjusted net
income (loss) per diluted share and adjusted EBIT to exclude the
following items: costs associated with our OneTEAM program, costs
associated with the Operating Group Reorganization, non-routine
legal costs and settlements, restructuring charges, certain
severance charges, goodwill impairment charges, loss on debt
extinguishment 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 our
OneTEAM program, costs associated with the Operating Group
Reorganization, non-routine legal costs and settlements,
restructuring charges, certain severance charges, goodwill
impairment 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. 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 diluted 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 is 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
Ended
June
30,
|
|
Six Months
Ended
June
30,
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
|
|
|
|
|
|
|
|
Adjusted Net
Income (Loss):
|
|
|
|
|
|
|
|
|
Net
loss
|
|
$
|
(17,493)
|
|
|
$
|
(13,528)
|
|
|
$
|
(51,784)
|
|
|
$
|
(213,255)
|
|
Professional fees
and other1
|
|
688
|
|
|
512
|
|
|
1,834
|
|
|
3,057
|
|
Legal
costs2
|
|
1,634
|
|
|
446
|
|
|
4,109
|
|
|
1,696
|
|
Severance charges,
net3
|
|
301
|
|
|
3,180
|
|
|
2,348
|
|
|
3,366
|
|
Goodwill impairment
charge
|
|
—
|
|
|
—
|
|
|
—
|
|
|
191,788
|
|
Tax impact of
adjustments and other net tax items4
|
|
(40)
|
|
|
(132)
|
|
|
(63)
|
|
|
(13,365)
|
|
Adjusted net
loss
|
|
$
|
(14,910)
|
|
|
$
|
(9,522)
|
|
|
$
|
(43,556)
|
|
|
$
|
(26,713)
|
|
|
|
|
|
|
|
|
|
|
Adjusted net loss
per common share:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.48)
|
|
|
$
|
(0.31)
|
|
|
$
|
(1.41)
|
|
|
$
|
(0.87)
|
|
Diluted
|
|
$
|
(0.48)
|
|
|
$
|
(0.31)
|
|
|
$
|
(1.41)
|
|
|
$
|
(0.87)
|
|
|
|
|
|
|
|
|
|
|
Consolidated
Adjusted EBIT and Adjusted EBITDA:
|
|
|
|
|
|
|
|
|
Net
loss
|
|
$
|
(17,493)
|
|
|
$
|
(13,528)
|
|
|
$
|
(51,784)
|
|
|
$
|
(213,255)
|
|
Provision (benefit)
for income taxes
|
|
857
|
|
|
1,683
|
|
|
502
|
|
|
(18,770)
|
|
Interest expense,
net
|
|
9,598
|
|
|
7,314
|
|
|
18,994
|
|
|
14,090
|
|
Foreign currency
loss (gain)6
|
|
1,218
|
|
|
282
|
|
|
2,341
|
|
|
889
|
|
Pension expense
(credit)5
|
|
(174)
|
|
|
(117)
|
|
|
(347)
|
|
|
(252)
|
|
Professional fees
and other1
|
|
688
|
|
|
512
|
|
|
1,834
|
|
|
3,057
|
|
Legal
costs2
|
|
1,634
|
|
|
446
|
|
|
4,109
|
|
|
1,696
|
|
Severance charges,
net3
|
|
301
|
|
|
3,180
|
|
|
2,348
|
|
|
3,366
|
|
Goodwill impairment
charge
|
|
—
|
|
|
—
|
|
|
—
|
|
|
191,788
|
|
Consolidated
Adjusted EBIT
|
|
(3,371)
|
|
|
(228)
|
|
|
(22,003)
|
|
|
(17,391)
|
|
Depreciation and
amortization
|
|
|
|
|
|
|
|
|
Amount included in
operating expenses
|
|
5,036
|
|
|
5,786
|
|
|
10,550
|
|
|
11,723
|
|
Amount included in
SG&A expenses
|
|
5,311
|
|
|
5,692
|
|
|
10,756
|
|
|
11,463
|
|
Total depreciation
and amortization
|
|
10,347
|
|
|
11,478
|
|
|
21,306
|
|
|
23,186
|
|
Non-cash
share-based compensation costs
|
|
2,138
|
|
|
1,416
|
|
|
4,468
|
|
|
2,946
|
|
Consolidated
Adjusted EBITDA
|
|
$
|
9,114
|
|
|
$
|
12,666
|
|
|
$
|
3,771
|
|
|
$
|
8,741
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Free Cash
Flow:
|
|
|
|
|
|
|
|
|
Cash provided by
(used in) operating activities
|
|
$
|
(17,616)
|
|
|
$
|
26,328
|
|
|
$
|
(34,799)
|
|
|
$
|
27,245
|
|
Capital
expenditures
|
|
(5,807)
|
|
|
(4,181)
|
|
|
(9,220)
|
|
|
(12,486)
|
|
Free Cash
Flow
|
|
$
|
(23,423)
|
|
|
$
|
22,147
|
|
|
$
|
(44,019)
|
|
|
$
|
14,759
|
|
|
|
|
|
|
|
|
1
|
For the three and six
months ended June 30, 2021, includes $0.7 million and $1.5 million,
respectively, of costs associated with the Operating Group
Reorganization (exclusive of restructuring costs). For the three
and six months ended June 30, 2020, includes $0.2 million and $2.0
million, respectively, associated with the OneTEAM program
(exclusive of restructuring costs).
|
2
|
For the three and six
months ended June 30, 2021, primarily relates to accrued legal
matters and other legal fees. For the three months and six months
ended June 30, 2020, primarily relates to costs associated with
international legal matters.
|
3
|
For the three months
and six months ended June 30, 2021, $0.3 million and $2.2 million,
respectively, associated with the Operating Group Reorganization.
For the three and six months ended June 30, 2020, severance charges
are associated with the OneTEAM program, including international
operations.
|
4
|
Represents the tax
effect of the adjustments. Beginning in Q2 2021, we now use the
statutory tax rate, net of valuation allowance by legal entity to
determine the tax effect of the adjustments. Prior to Q2 2021, we
used an assumed marginal tax rate of 21% except for the adjustment
of the goodwill impairment charge in Q1 2020 for which the actual
tax impact was used. We have restated the prior period tax impact
to use the statutory tax rate by legal entity, net of
valuation allowance.
|
5
|
Represents pension
expense (credit) for the U.K. pension plan based on the difference
between the expected return on plan assets and the cost of the
discounted pension liability. The pension plan has had no new
participants added since the plan was frozen in 1994 and accruals
for future benefits ceased in connection with a plan curtailment in
2013.
|
6
|
Represents foreign
currency gain/loss. For prior period, includes other nominal
fees.
|
TEAM, INC. AND
SUBSIDIARIES
|
RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES (Continued)
|
(unaudited, in
thousands)
|
|
|
|
|
|
|
|
Three Months
Ended June
30,
|
|
Six Months
Ended June
30,
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
|
|
|
|
|
|
|
|
Segment Adjusted
EBIT and Adjusted EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
IHT
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
|
$
|
7,395
|
|
|
$
|
4,740
|
|
|
$
|
7,759
|
|
|
$
|
(187,410)
|
|
Severance charges,
net1
|
|
10
|
|
|
1,030
|
|
|
485
|
|
|
1,038
|
|
Goodwill impairment
charge
|
|
—
|
|
|
—
|
|
|
—
|
|
|
191,788
|
|
Adjusted
EBIT
|
|
7,405
|
|
|
5,770
|
|
|
8,244
|
|
|
5,416
|
|
Depreciation and
amortization
|
|
3,270
|
|
|
3,746
|
|
|
6,740
|
|
|
7,729
|
|
Adjusted
EBITDA
|
|
$
|
10,675
|
|
|
$
|
9,516
|
|
|
$
|
14,984
|
|
|
$
|
13,145
|
|
|
|
|
|
|
|
|
|
|
MS
|
|
|
|
|
|
|
|
|
Operating
income
|
|
$
|
2,328
|
|
|
$
|
9,899
|
|
|
$
|
2,443
|
|
|
$
|
10,921
|
|
Severance charges,
net1
|
|
216
|
|
|
1,537
|
|
|
355
|
|
|
1,667
|
|
Adjusted
EBIT
|
|
2,544
|
|
|
11,436
|
|
|
2,798
|
|
|
12,588
|
|
Depreciation and
amortization
|
|
5,043
|
|
|
5,475
|
|
|
10,482
|
|
|
10,906
|
|
Adjusted
EBITDA
|
|
$
|
7,587
|
|
|
$
|
16,911
|
|
|
$
|
13,280
|
|
|
$
|
23,494
|
|
|
|
|
|
|
|
|
|
|
Quest
Integrity
|
|
|
|
|
|
|
|
|
Operating
income
|
|
$
|
5,702
|
|
|
$
|
689
|
|
|
$
|
5,450
|
|
|
$
|
6,795
|
|
Severance charges,
net1
|
|
42
|
|
|
140
|
|
|
251
|
|
|
140
|
|
Adjusted
EBIT
|
|
5,744
|
|
|
829
|
|
|
5,701
|
|
|
6,935
|
|
Depreciation and
amortization
|
|
710
|
|
|
887
|
|
|
1,422
|
|
|
1,773
|
|
Adjusted
EBITDA
|
|
$
|
6,454
|
|
|
$
|
1,716
|
|
|
$
|
7,123
|
|
|
$
|
8,708
|
|
|
|
|
|
|
|
|
|
|
Corporate and
shared support services
|
|
|
|
|
|
|
|
|
Net
loss
|
|
$
|
(32,918)
|
|
|
$
|
(28,856)
|
|
|
$
|
(67,436)
|
|
|
$
|
(43,561)
|
|
Provision (benefit)
for income taxes
|
|
857
|
|
|
1,683
|
|
|
502
|
|
|
(18,770)
|
|
Interest expense,
net
|
|
9,598
|
|
|
7,314
|
|
|
18,994
|
|
|
14,090
|
|
Foreign currency
loss (gain)5
|
|
1,218
|
|
|
282
|
|
|
2,341
|
|
|
889
|
|
Pension expense
(credit)2
|
|
(174)
|
|
|
(117)
|
|
|
(347)
|
|
|
(252)
|
|
Professional fees
and other3
|
|
688
|
|
|
512
|
|
|
1,834
|
|
|
3,057
|
|
Legal
costs4
|
|
1,634
|
|
|
446
|
|
|
4,109
|
|
|
1,696
|
|
Severance charges,
net1
|
|
33
|
|
|
473
|
|
|
1,257
|
|
|
521
|
|
Adjusted
EBIT
|
|
(19,064)
|
|
|
(18,263)
|
|
|
(38,746)
|
|
|
(42,330)
|
|
Depreciation and
amortization
|
|
1,324
|
|
|
1,370
|
|
|
2,662
|
|
|
2,778
|
|
Non-cash
share-based compensation costs
|
|
2,138
|
|
|
1,416
|
|
|
4,468
|
|
|
2,946
|
|
Adjusted
EBITDA
|
|
$
|
(15,602)
|
|
|
$
|
(15,477)
|
|
|
$
|
(31,616)
|
|
|
$
|
(36,606)
|
|
|
|
|
|
|
|
|
1
|
Primarily relates to
severance charges incurred associated with the Operating Group
Reorganization for the three and six months ended June 30, 2021.
For the three and six months ended June 30, 2020, relates to
severance charges associated with the OneTEAM program, including
international restructuring under the OneTEAM program.
|
2
|
Represents pension
expense (credit) for the U.K. pension plan based on the difference
between the expected return on plan assets and the cost of the
discounted pension liability. The pension plan has had no new
participants added since the plan was frozen in 1994 and accruals
for future benefits ceased in connection with a plan curtailment in
2013.
|
3
|
For the three and six
months ended June 30, 2021, includes $0.7 million and $1.5 million,
respectively, of costs associated with the Operating Group
Reorganization (exclusive of restructuring costs). For the three
and six months ended June 30, 2020, includes $0.2 million and $2.0
million, respectively, associated with the OneTEAM program
(exclusive of restructuring costs).
|
4
|
For the three and six
months ended June 30, 2021, primarily relates to accrued legal
matters and other legal fees. For the three and six months ended
June 30, 2020, primarily relates to costs associated with
international legal matters.
|
5
|
Represents foreign
currency gain/loss. For prior period, includes other nominal
fees.
|
View original
content:https://www.prnewswire.com/news-releases/team-inc-reports-second-quarter-2021-results-301347804.html
SOURCE Team, Inc.