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What changed in TEAM INC's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of TEAM INC's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+190 added−194 removedSource: 10-K (2025-03-19) vs 10-K (2024-03-07)

Top changes in TEAM INC's 2024 10-K

190 paragraphs added · 194 removed · 163 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

44 edited+5 added−6 removed29 unchanged
Biggest changeThese rules are specific to those high hazard tasks where the opportunity for hand injury is most prevalent. These rules remind our work force about hand placement, proper guarding, and when to get assistance. We have several online training and distance learning classes as part of our curriculum to help meet the needs of a rapidly changing workplace environment.
Biggest changeWe have several online training and distance learning classes as part of our curriculum to help meet the needs of a rapidly changing workplace environment. These are administered and tracked globally though our Learning Management System.
Also, many states where we operate regulate health, safety and environmental activities, such as California OSHA and Texas Commission on Environmental Quality. Expenditures relating to such regulations are made in the normal course of our business and are neither material nor place us at any competitive disadvantage.
Also, many states where we operate regulate health, safety and environmental activities, such as California OSHA and the Texas Commission on Environmental Quality. Expenditures relating to such regulations are made in the normal course of our business and are neither material nor place us at any competitive disadvantage.
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. 2 Table of Content Description of Business Inspection and Heat Treating Segment: IHT offers standard to specialty inspection services as well as heat treating services and digital imaging services.
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); • Infrastructure (construction and building, roads, dams, amusement parks, bridges, ports, and railways); and • Aerospace and Defense. 2 Table of Content Description of Business Inspection and Heat Treating Segment: IHT offers standard to specialty inspection services as well as heat treating services and digital imaging services.
These core IHT services are as follows: • Non-Destructive Evaluation and Testing Services. • Radiographic Testing. • Ultrasonic Testing. • Magnetic Particle Inspection. • Liquid Penetrant Inspection. • Positive Material Identification. • Electromagnetic Testing. • Alternating Current Field Measurement. • Eddy Current Testing. • Long-Range Guided Ultrasonics. • Phased Array Ultrasonic Testing. • Terminals and Storage Inspection and Management Programs. • Rope Access. • Mechanical Integrity Services. • Pipeline Integrity Services. • Heat Treating Services.
Core IHT services are as follows: • Non-Destructive Evaluation and Testing Services. • Radiographic Testing. • Ultrasonic Testing. • Magnetic Particle Inspection. • Liquid Penetrant Inspection. • Positive Material Identification. • Electromagnetic Testing. • Alternating Current Field Measurement. • Eddy Current Testing. • Long-Range Guided Ultrasonics. • Phased Array Ultrasonic Testing. • Terminals and Storage Inspection and Management Programs. • Rope Access. • Mechanical Integrity Services. • Pipeline Integrity Services. • Heat Treating Services.
These core MS services listed below are delivered in on-call, project-managed, and full-time nested capacities. • Leak Repair Services. • Engineered Composite Repair. • Emissions Control/Compliance Services. • Hot Tapping Services. • Valve Insertion Services. • Field Machining Services. • Bolted Joint Integrity Services. • Vapor Barrier Plug and Weld Testing Services. • Valve Management Solutions.
Core MS services listed below are delivered in on-call, project-managed, and full-time nested capacities. • Leak Repair Services. • Engineered Composite Repair. • Emissions Control/Compliance Services. • Hot Tapping Services. • Valve Insertion Services. • Field Machining Services. • Bolted Joint Integrity Services. • Vapor Barrier Plug and Weld Testing Services. • Valve Management Solutions.
Corre Board Rights On June 16, 2023, in connection with, and effective upon, the consummation of the transactions contemplated by the A&R Term Loan Credit Agreement and ABL Amendment No. 3 (as defined below), we, Corre and the other parties thereto, entered into the Board Rights Agreement (the “Corre Board Rights Agreement”), pursuant to which Corre, acting on behalf of itself and its affiliates that beneficially own our common stock (such affiliates, together with Corre, the “Corre Investors”), may, subject to common stock ownership thresholds and/or indebtedness and commitment thresholds and other terms provided in the Corre Board Rights Agreement, designate an individual to serve as a non-voting observer at all meetings of the Board, nominate one individual to serve as Chairman of the Board (the “Chairperson”), and nominate two additional individuals to serve on the Board (such individuals, together with the Chairperson, the “Corre Investor Directors”).
On June 16, 2023, in connection with, and effective upon, the consummation of the transactions contemplated by the A&R Term Loan Credit Agreement and ABL Amendment No. 3 (as defined below), we, Corre and the other parties thereto, entered into a new Board Rights Agreement (the “Corre Board Rights Agreement”), pursuant to which Corre, acting on behalf of itself and its affiliates (together with Corre, the “Corre Investors”) that beneficially own our common stock (inclusive of the Corre Warrants), may, subject to common stock ownership thresholds and/or indebtedness and commitment thresholds and other terms provided in the Corre Board Rights Agreement, designate an individual to serve as a non-voting observer at all meetings of the Board, nominate one individual to serve as Chairman of the Board (the “Chairperson”), and nominate two additional individuals to serve on the Board (such individuals, together with the Chairperson, the “Corre Investor Directors”).
Diversity and inclusion We believe that a diverse and engaged workforce is critical to our success, and we work hard to create an environment where our employees feel valued, engaged and inspired to do their best work.
Diversity and inclusion We believe that a diverse, inclusive and engaged workforce is critical to our success, and we work hard to create an environment where our employees feel valued, engaged and inspired to do their best work.
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.
Our specialty maintenance, turnaround and outage services are designed to minimize customer downtime and are primarily delivered while assets are off-line, 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.
ITEM 1. BUSINESS General Development of Business Introduction. Unless otherwise indicated, the terms “Team,” “we,” “our” and “us” 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 NYSE under the symbol “TISI”.
ITEM 1. BUSINESS General Development of Business Introduction. Unless otherwise indicated, the terms “Team,” “the Company,” “we,” “our” and “us” 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 NYSE under the symbol “TISI”.
We do not currently expect that compliance with such laws and regulations will require us to make material expenditures. From time to time, during the operation of our environmental consulting and engineering services, the assets of which were sold in 1996, we handled small quantities of certain hazardous wastes or other substances generated by our clients.
We do not currently expect that compliance with such laws and regulations will require us to make material expenditures. From time to time, during the operation of our environmental consulting and engineering services, the assets of which were sold in 1996, we handled small quantities of certain hazardous wastes or other substances generated by our customers.
These statements are deeply ingrained in our culture, guiding employee behavior and our decisions and actions. • Safety First/Quality Always – In everything we do; • Integrity – Uncompromising standards of integrity and ethical conduct; • Service Leadership – Leading service quality, professionalism and responsiveness; • Innovation – Supporting continuous growth and improvement; • Pride and Respect – For our clients, for each other and for all of our stakeholders; and • Teamwork – Global teamwork and collaboration.
These statements are deeply ingrained in our culture, guiding employee behavior and our decisions and actions. • Safety First/Quality Always – In everything we do; • Integrity – Uncompromising standards of integrity and ethical conduct; • Service Leadership – Leading service quality, professionalism and responsiveness; • Innovation – Supporting continuous growth and improvement; • Pride and Respect – For our customers, for each other and for all of our stakeholders; and • Teamwork – Global teamwork and collaboration.
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.
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 customer’s election.
(“APSC”), pursuant to which APSC, acting as investor representative on behalf of itself and its affiliates that beneficially own our common stock (such affiliates, together with APSC, the “APSC Investors”), may, subject to common stock ownership thresholds and other terms provided in the APSC Board Rights Agreement, designate an individual to serve as a non-voting observer at all meetings of our Board of Directors (the “Board”) and nominate an individual designated by APSC to serve on the Board (the “APSC Investor Director”).
(“APSC”), pursuant to which APSC, acting as investor representative on behalf of itself and its affiliates (together with APSC, the “APSC Investors”) that beneficially own our common stock (inclusive of the APSC Warrants), may, subject to common stock ownership thresholds and other terms provided in the APSC Board Rights Agreement, designate an individual to serve as a non-voting observer at all meetings of our Board of Directors (the “Board”) and nominate an individual designated by APSC to serve on the Board (the “APSC Investor Director”).
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.
In addition, we are capable of escalating with the customer’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 work closely with our clients across the world to assist them in meeting their environmental sustainability goals. We sponsor and support numerous charitable organizations and encourage our employees to donate their time and financial support to serving the needs of their communities.
We work closely with our customers across the world to assist them in meeting their environmental sustainability goals. We sponsor and support numerous charitable organizations and encourage our employees to donate their time and financial support to serving the needs of their communities.
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.
We also believe that we are unique in our ability to provide these services in three distinct customer 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.
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 (onstream), during facility turnarounds or during new construction or expansion activities.
Mechanical Services Segment: MS provides onstream services engineered to keep client assets on-line and producing, and specialty maintenance, turnaround and outage services, which are performed while assets are off-line, and are designed to reduce client downtime.
Mechanical Services Segment: MS provides onstream services engineered to keep customer assets on-line and producing, and specialty maintenance, turnaround and outage services, which are performed while assets are off-line, and are designed to reduce customer downtime.
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 are a global, leading provider of specialty industrial services offering customers 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 customers’ most critical assets.
Additionally, we provide employees with a comprehensive set of benefits, including health and welfare benefits, wellness benefits, employee assistance plans, defined contribution and defined benefit retirement benefits, paid time off, educational support and a variety of other ancillary employee benefits.
Additionally, we provide employees with a comprehensive set of benefits, including health and welfare benefits, wellness benefits, employee assistance plans, defined contribution and defined benefit retirement benefits (United Kingdom employees only), paid time off, educational support and a variety of other ancillary employee benefits.
Marketing, Clients and Competition Our industrial services are marketed principally by personnel based at our service locations. We believe that these service locations are situated to facilitate timely responses to client needs with on-call expertise, which is an important feature of selling and providing our services.
Marketing, Customers and Competition Our industrial services are marketed principally by personnel based at our service locations. We believe that these service locations are situated to facilitate timely responses to customer needs with on-call expertise, which is an important feature of selling and providing our services.
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.
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 online valve insertion solutions, which are delivered while assets are in an operational condition, which maximizes customer production time.
Many of our services, including our inspection, emissions monitoring and leak repair services, are crucial in assisting our clients to identify, assess and reduce their carbon and greenhouse gas emissions. We provide inspection, condition assessment, maintenance and repair services and support our clients’ diversification efforts into sources of renewable energy.
Many of our services, including our inspection, emissions monitoring and leak repair services, are crucial in assisting our customers to identify, assess and reduce their carbon and greenhouse gas emissions. We provide inspection, condition assessment, maintenance and repair services and support our customers’ diversification efforts into sources of renewable energy.
The capacity and capability scope of our discrete and integrated services also allows us to benefit from the procurement trends of many of our clients who are seeking to reduce the number of contractors and vendors in their facilities, as well as to outsource more of such services.
The capacity and capability scope of our discrete and integrated services also allows us to benefit from the procurement trends of many of our customers who are seeking to reduce the number of contractors and vendors 3 Table of Content in their facilities, as well as to outsource more of such services.
We are proud that a diverse group of people from a variety of backgrounds, religions, nationalities, gender identity, sexual orientations and races make up our team. It continues to be our goal to knock down barriers and eliminate bias wherever it exists through strategic employee-engaged initiatives.
We are proud that a diverse group of people from a variety of backgrounds, religions, nationalities, gender identity, sexual orientations and races make up our team. It continues to be our goal to create an inclusive environment and eliminate bias wherever it exists through strategic employee-engaged initiatives.
Human Capital Due to the seasonal nature of our business, our employee headcount varies during the year. During 2023, we averaged approximately 5,400 employees, with approximately 4,050 employed in the United States and 1,350 internationally. Human capital management, combined with our core values and talent management initiatives, is a key driver of our employee retention program.
Human Capital 4 Table of Content Due to the seasonal nature of our business, our employee headcount varies during the year. During 2024, we averaged approximately 5,400 employees, with approximately 4,100 employed in the United States and 1,300 internationally. Human capital management, combined with our core values and talent management initiatives, is a key driver of our employee retention program.
No single client accounted for 10% or more of consolidated revenues during the years ended December 31, 2023 and 2022, respectively. 3 Table of Content Generally, clients are billed on a time and materials basis, although some work may be performed pursuant to a fixed-price bid. Services are usually performed pursuant to purchase orders issued under written client agreements.
No single customer accounted for 10% or more of consolidated revenues during the years ended December 31, 2024 and 2023, respectively. Generally, customers are billed on a time and materials basis, although some work may be performed pursuant to a fixed-price bid. Services are usually performed pursuant to purchase orders issued under written customer agreements.
Under its charter, the ESG Council, which is a management committee formed to assist our Executive Vice President, Administration, Chief Legal Officer & Secretary in oversight responsibilities, is responsible for recommending our ESG objectives, monitoring the implementation and performance of our ESG objectives, overseeing the progress made against our social and environmental goals and reporting on our ESG performance.
Under its charter, the ESG Council, which is a management committee formed to assist our General Counsel & Secretary in oversight responsibilities, is responsible for recommending our ESG objectives, monitoring the implementation and performance of our ESG objectives, overseeing the progress made against our social and environmental goals and reporting on our ESG performance.
We held employee celebrations across the globe, commemorated the milestone with a signature gift for all employees and presented a 50th anniversary video showcasing our employees and highlighting some of Team’s most significant accomplishments over the years. Additionally in 2023, we continued our focus on regular communications with our employees.
We held employee celebrations across the globe, commemorated the milestone with a signature gift for all employees and presented a 50th anniversary video showcasing our employees and highlighting some of Team’s most significant accomplishments over the years.
Our Executive Vice President, Administration, Chief Legal Officer & Secretary, who reports directly to our CEO, has general oversight responsibility with respect to matters of sustainability and social responsibility and is the executive sponsor of our ESG Council.
Our General Counsel & Secretary, who reports directly to our CEO, has general oversight responsibility with respect to matters of sustainability and social responsibility and is the executive sponsor of our ESG Council.
Corporate Leadership General & Administrative Global Workforce 1 Female 13% 56% 11% Male 87% 44% 89% _________________ 1 Global workforce includes technicians. We have developed diversity focused strategies through internal initiatives and collaboration with the career centers at the universities where we recruit.
Corporate Leadership General & Administrative Global Workforce 1 Female 13% 56% 11% Male 87% 44% 89% _________________ 1 Global workforce includes technicians. As part of our university recruiting efforts, we have developed diversity focused strategies through collaboration with the career centers at the universities where we recruit.
These contributions help to support the work of nonprofit organizations of all sizes, working in areas such as disability services and support, disaster response, and hunger prevention around the globe.
These contributions help to support the work of nonprofit organizations of all sizes, working in areas such as disability services and support, disaster response, and hunger prevention around the globe. Our Company management is responsible for the day-to-day operation of ESG matters.
The APSC Investors’ rights under the APSC Board Rights Agreement are a continuation of existing rights under that certain term loan credit agreement dated December 18, 2020 (the “Term Loan Credit Agreement”) and that certain commitment letter (the “Commitment Letter”), dated as of November 9, 2021, by and among us, Corre Partners Management, LLC (“Corre”) and APSC in the event obligations under the Term Loan Credit Agreement cease to be outstanding.
The APSC Investors’ rights under the APSC Board Rights Agreement are a continuation of existing rights under a prior term loan credit agreement dated December 18, 2020 and a prior commitment letter dated as of November 9, 2021 (the “2021 Commitment Letter”) by and among us, APSC and Corre Partners Management, LLC (“Corre”).
Environmental, social and governance General ESG approach We strive to promote and support business practices that are environmentally sustainable, socially conscious, and aligned with strong corporate governance practices. Our highest value is the health and safety of our employees, clients, community and other contractors.
Environmental, social and governance General ESG approach We strive to promote and support business practices that are environmentally sustainable, socially conscious, and aligned with strong corporate governance practices. We are committed to conducting our business in a manner that protects the environment and the health and safety of our employees, our customers, our suppliers and contractors and the general public.
We hosted global town hall meetings throughout the year and introduced the monthly CEO Connection newsletter. Wages and benefits Across the globe, we strive to provide our employees with competitive wages, salaries and benefits based upon employee skills, experience and job levels.
Additionally in 2024, we continued our focus on regular communications with our employees, which included global town hall meetings and the monthly CEO Connection newsletters. Wages and benefits Across the globe, we strive to provide our employees with competitive wages, salaries and benefits based upon employee skills, experience and job levels.
All our employees receive online training on the rules and must acknowledge that they have read them. The rules are posted internally, communicated throughout our organization through our safety bulletins, and are printed in multiple languages. In 2022 we enhanced our 12 Life Saving Rules by establishing our 5 Hand Safety Rules.
All Team employees complete online training covering all of the LSRs and expectations and must acknowledge that they have read them. The rules are posted internally, communicated throughout our organization through safety bulletins, and are printed in multiple languages. In 2022 Team established our Hand Safety Rules.
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.
In addition, IHT provides comprehensive non-destructive testing services and metallurgical and chemical processing services to the aerospace and other industries covering a range of components including finished machined and in-service components. IHT also provides advanced digital imaging including remote digital video imaging.
They represent what we stand for, the values our employees embody, what our clients can expect in the delivery of our services and what our services and products contribute to the market.
Business ethics and core values Our core values anchor every aspect of our business in a set of commonly held beliefs and commitments. They represent what we stand for, the values our employees embody, what our customers can expect in the delivery of our services and what our services and products contribute to the market.
This program has received much praise and support from our employees, their families and our clients. 5 Table of Content We recognize the importance of providing training to continually support career growth and development.
We coordinate this program with our Employee Assistance Program that offers mental health and depression benefits for our employees and their families. STAMP has received much praise and support from our employees, their families and our customers. We recognize the importance of providing training to continually support career growth and development.
We are committed to conducting our business in a manner that protects the environment and the health and safety of our employees, our clients, our suppliers and contractors and the general public. We provide training to support career growth opportunities for our diverse team of employees and actively contribute to the local communities in which we operate.
We provide training to support career growth opportunities for our diverse team of employees and actively contribute to the local communities in which we operate.
We invest in our talent by providing our employees with targeted training, mentoring and career 4 Table of Content development opportunities, all of which enable us to hire and retain skilled, high-performing employees.
We invest in our talent by providing our employees with targeted training, mentoring and career development opportunities, all of which enable us to hire and retain skilled, high-performing employees. We work to prioritize our safety-first culture and our diversity and inclusion initiatives, and we seek to retain employees through our employee engagement efforts and our competitive compensation and benefits packages.
APSC Board Rights On November 1, 2022, we entered into the Board Rights Agreement (the “APSC Board Rights Agreement”) with Atlantic Park Strategic Capital Fund, L.P.
The Corporate Governance and Nominating Committee receives regular updates from our ESG Council regarding the considerations and actions taken by us with respect to ESG. APSC Board Rights On November 1, 2022, we entered into the Board Rights Agreement (the “APSC Board Rights Agreement”) with Atlantic Park Strategic Capital Fund, L.P.
Our Corporate Governance and Nominating Committee has responsibility for maintaining oversight over the development of appropriate environmental, social and corporate governance principles, policies and practices for Team, including our public reporting on corporate responsibility and sustainability. Our Company management is responsible for the day-to-day operation of ESG matters.
At the Board level, our Corporate Governance and Nominating Committee has responsibility for maintaining oversight over Team’s corporate governance principles and corporate social responsibility and sustainability matters, including our public reporting on corporate 6 Table of Content social responsibility and sustainability.
Health, safety and training We have “12 Life Saving Rules” across our organization to further enhance our safety focused culture. The 12 Life Saving Rules are clear and simple rules designed to address those activities that put our employees at the greatest risk. The rules include both encouraged behaviors as well as discouraged behaviors.
The 12 Life Saving Rules (the “LSRs”) are clear and simple rules designed to address those activities that potentially place Team employees at risk. The LSRs include six behaviors that are always enforced and six behaviors that are never allowed.
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We work to prioritize our safety-first culture and our diversity and inclusion initiatives, and we seek to retain employees through our employee engagement efforts and our competitive compensation and benefits packages. Business ethics and core values Our core values anchor every aspect of our business in a set of commonly held beliefs and commitments.
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MS provides solutions designed to serve customers’ unique needs during both the operational (onstream) and off-line states of their assets.
Removed
We recruit diverse candidate populations through targeted outreach efforts and collaborations with the Society of Women Engineers (“SWE”), Society of Hispanic Engineering’s (“SHPE”) and National Society of Black Engineers (“NSBE”) programs, as well as recruiting at Historically Black Colleges and Universities.
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We seek to recruit the most qualified candidates, including by recruiting from a broad range of places. Health, safety and training We have “12 Life Saving Rules” across our organization to further enhance our safety focused culture.
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These are administered and tracked globally though our Learning Management System. We also offer STAMP, Team’s “Stress and Anxiety Management Program” that includes several tools and resources to help employees effectively manage stress and prevent depression and other mental illnesses.
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The intent of the Hand Safety Rules is to define the specific high hazard tasks where the potential for hand injuries is most common. The Hand Safety Rules focus on types of hand hazards, hand placement, equipment guarding, and when to stop the job and reassess potential hazards.
Removed
This program serves as Team’s Mental Health and Wellness Program where we offer monthly sessions covering various mental health topics such as mindfulness, Post Traumatic Stress Disorder and resiliency. We coordinate this program with our Employee Assistance Program that offers mental health and depression benefits for our employees and their families.
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In addition, Team Stress and Anxiety Management Program (“STAMP”) provides several tools and resources to help employees effectively manage stress and prevent depression and other mental illnesses. STAMP provides informative live sessions 5 Table of Content covering various mental health topics such as mindfulness, post-traumatic stress disorder (PTSD) and resiliency.
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The Corporate Governance and Nominating Committee receives regular reports from our Executive Vice 6 Table of Content President, Administration, Chief Legal Officer & Secretary and ESG Council regarding the considerations and actions taken by us with respect to ESG.
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Corre Board Rights Corre was previously granted certain board nomination and observer rights pursuant to the 2021 Commitment Letter and a prior credit agreement dated November 9, 2021.
Removed
The APSC Investors are not permitted to designate, in the aggregate, more than one non-voting board observer and more than one APSC Investor Director under the APSC Board Rights Agreement, the Term Loan Credit Agreement and the Commitment Letter, provided that the APSC Board Rights Agreement does not otherwise limit or impair any rights under the Commitment Letter and the Term Loan Credit Agreement.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

53 edited+8 added−8 removed92 unchanged
Biggest changeNo assurances can be made that we will continue to maintain our pricing model or increase our market share or profitability. Our ongoing investments in new client markets involve significant risks, could disrupt our current operations and may not produce the long-term benefits that we expect.
Biggest changeOur ongoing investments in new customer markets involve significant risks, could disrupt our current operations and may not produce the long-term benefits that we expect. Our ability to compete successfully in new customer markets depends on our ability to continue to deliver innovative, relevant and useful services to our customers in a timely manner.
We maintain a $6 million retention for indemnity coverage. This insurance may not protect us against liability for certain events, including events involving pollution, product or professional liability, losses resulting from business interruption or acts of terrorism or damages from our breach of contract.
We maintain a $6.0 million retention for indemnity coverage. This insurance may not protect us against liability for certain events, including events involving pollution, product or professional liability, losses resulting from business interruption or acts of terrorism or damages from our breach of contract.
We would also recognize losses with respect to any receivables that are impaired as a result of our clients’ financial difficulties or bankruptcies. The risk of loss may increase for capital projects where we provide services over a longer period of time. Credit losses could materially and adversely affect our financial condition, results of operations and cash flows.
We would also recognize losses with respect to any receivables that are impaired as a result of our customers’ financial difficulties or bankruptcies. The risk of loss may increase for capital projects where we provide services over a longer period of time. Credit losses could materially and adversely affect our financial condition, results of operations and cash flows.
We are currently a defendant in legal proceedings arising from the operation of our business and it is reasonable to expect that we will be named in future actions. Most of the legal proceedings against us arise out of the normal course of performing services at client facilities, and include claims for workers’ compensation, personal injury and property damage.
We are currently a defendant in legal proceedings arising from the operation of our business and it is reasonable to expect that we will be named in future actions. Most of the legal proceedings against us arise out of the normal course of performing services at customer facilities, and include claims for workers’ compensation, personal injury and property damage.
While we continue our efforts to expand our market presence in the areas of aerospace and defense, construction, chemical processing, manufacturing, power generation, and public infrastructure, among other industries, economic downturns within the oil and gas industry including falling crude oil prices, have resulted in, and could in the future, result in reduced demand for our services.
While we continue our efforts to expand our market presence in the areas of aerospace and defense, renewable energy, construction, chemical processing, manufacturing, power generation, and public infrastructure, among other industries, economic downturns within the oil and gas industry including falling crude oil prices, have resulted in, and could in the future, result in reduced demand for our services.
Such climate events have the potential to adversely affect our operations or those of our clients or suppliers, including by damaging our manufacturing facilities, disrupting our supply chain and causing our suppliers to incur significant costs in responding to such impacts, which in turn could have a negative effect on us, including by adversely impacting our results of operations, financial condition and cash flows.
Such climate events have the potential to adversely affect our operations or those of our customers or suppliers, including by damaging our manufacturing facilities, disrupting our supply chain and causing our suppliers to incur significant costs in responding to such impacts, which in turn could have a negative effect on us, including by adversely impacting our results of operations, financial condition and cash flows.
As we have experienced in the past, and as we expect to occur in the future, downturns characterized by diminished demand for services in these industries as well as potential changes due to consolidation or changes in client businesses or governmental regulations, could have a material impact on our results of operations, financial position or cash flows.
As we have experienced in the past, and as we expect to occur in the future, downturns characterized by diminished demand for services in these industries as well as potential changes due to consolidation or changes in customer businesses or governmental regulations, could have a material impact on our results of operations, financial position or cash flows.
Risks Related to Our Operations If we are not able to implement commercially competitive services in a timely manner in response to changes in the market, client requirements, competitive pressures and technology trends, our business and results of operations could be materially and adversely affected . Competition can place downward pressure on our prices and profitability.
Risks Related to Our Operations If we are not able to implement commercially competitive services in a timely manner in response to changes in the market, customer requirements, competitive pressures and technology trends, our business and results of operations could be materially and adversely affected . Competition can place downward pressure on our prices and profitability.
Disruptions or volatility in these markets could also adversely affect our clients’ decisions to fund ongoing maintenance and new capital projects, resulting in contract cancellations or suspensions, capital project delays, repurposing of infrastructure, and infrastructure closures. These factors may also adversely affect our ability to collect payment for work we have previously performed.
Disruptions or volatility in these markets could also adversely affect our customers’ decisions to fund ongoing maintenance and new capital projects, resulting in contract cancellations or suspensions, capital project delays, repurposing of infrastructure, and infrastructure closures. These factors may also adversely affect our ability to collect payment for work we have previously performed.
The services we provide could incur quality of execution issues that may be caused by our workforce personnel and/or components we manufacture or purchase from other manufacturers or suppliers. If the quality of our services does not meet our clients’ expectations or satisfaction, then our sales and operating earnings, and, ultimately, our reputation, could be negatively impacted.
The services we provide could incur quality of execution issues that may be caused by our workforce personnel and/or components we manufacture or purchase from other manufacturers or suppliers. If the quality of our services does not meet our customers’ expectations or satisfaction, then our sales and operating earnings, and, ultimately, our reputation, could be negatively impacted.
We extend credit to clients for purchases of our services which subjects us to potential credit risk that could, if realized, adversely affect our financial condition, results of operations and cash flows . If we are unable to collect amounts owed to us, or retain amounts paid to us, our cash flows would be reduced and we could experience losses.
We extend credit to customers for purchases of our services which subjects us to potential credit risk that could, if realized, adversely affect our financial condition, results of operations and cash flows . If we are unable to collect amounts owed to us, or retain amounts paid to us, our cash flows would be reduced and we could experience losses.
Similarly, changing consumer preferences for goods or services relating to alternative sources of energy or emissions reductions and technological advances in fuel economy and energy generation devices or other technological advances could materially affect our clients, which in turn could negatively impact demand for our services and adversely affect our results of operations, financial condition, and liquidity.
Similarly, changing consumer preferences for goods or services relating to alternative sources of energy or emissions reductions and technological advances in fuel economy and energy generation devices or other technological advances could materially affect our customers, which in turn could negatively impact demand for our services and adversely affect our results of operations, financial condition, and liquidity.
Global oil and gas supply and demand are impacted by several factors including global economic conditions, geopolitical events, widespread public health crises, epidemics and pandemics, and domestic and global inflationary pressures which may reduce the availability of liquidity and credit and, in many cases, reduce demand for our clients’ products.
Global oil and gas supply and demand are impacted by several factors including global economic conditions, geopolitical events, widespread public health crises, epidemics and pandemics, and domestic and global inflationary pressures which may reduce the availability of liquidity and credit and, in many cases, reduce demand for our customers’ products.
Certain industries and clients have employees represented by unions and could be subject to temporary work stoppages which could impact our activity level. We sell our services in highly competitive markets, which can limit our ability to increase prices and maintain or increase the market share of our services.
Certain industries and customers have employees represented by unions and could be subject to temporary work stoppages which could impact our activity level. We sell our services in highly competitive markets, which can limit our ability to increase prices and maintain or increase the market share of our services.
In addition to general economic and political conditions, and in addition to the other factors identified under this Item 1A “Risk Factors”, the following factors may affect our sales and operating results: the timing of significant client orders, the timing of planned maintenance projects at client facilities, changes in competitive pricing, wide variations in profitability by product line, variations in operating expenses, rapid increases in raw material and labor costs, the timing of announcements or introductions of new products or services by us, our competitors or our respective clients, the acceptance of those services, our ability to adequately meet staffing requirements with qualified personnel, relative variations in manufacturing efficiencies and costs, and the relative strength or weakness of international markets.
In addition to general economic and political conditions, and in addition to the other factors identified under this Item 1A “Risk Factors”, the following factors may affect our sales and operating results: the timing of significant customer orders, the timing of planned maintenance projects at customer facilities, changes in competitive pricing, wide variations in profitability by product line, variations in operating expenses, rapid increases in raw material and labor costs, the timing of announcements or introductions of new products or services by us, our competitors or our respective customers, the acceptance of those services, our ability to adequately meet staffing requirements with qualified personnel, relative variations in manufacturing efficiencies and costs, and the relative strength or weakness of international markets.
Poor safety performance may limit or eliminate potential revenue streams, including from many of our largest clients, and may materially increase our operating costs, including increasing our required insurance deductibles, self-insured retention and insurance premium costs. Our business depends upon the maintenance of our proprietary technologies and information.
Poor safety performance may limit or eliminate potential revenue streams, including from many of our largest customers, and may materially increase our operating costs, including increasing our required insurance deductibles, self-insured retention and insurance premium costs. Our business depends upon the maintenance of our proprietary technologies and information.
In addition, the payment of potentially significant fines or penalties in the event of a breach or other privacy and information security laws, as well as the negative publicity associated with such a breach, could damage our reputation and adversely impact demand for our services and client relationships.
In addition, the payment of potentially significant fines or penalties in the event of a breach or other privacy and information security laws, as well as the negative publicity associated with such a breach, could damage our reputation and adversely impact demand for our services and customer relationships.
If we are not able to implement commercially competitive services and products in a timely manner in response to changes in the market, client requirements, competitive pressures, inflationary pressures and technology trends, our business and results of operations could be materially and adversely affected.
If we are not able to implement commercially competitive services and products in a timely manner in response to changes in the market, customer requirements, competitive pressures, inflationary pressures and technology trends, our business and results of operations could be materially and adversely affected.
We depend on our proprietary technologies and information, many of which are no longer subject to patent protection. We regularly enter into confidentiality agreements with our key employees, clients, potential clients and other third parties and limit access to and distribution of our trade secrets and other proprietary information.
We depend on our proprietary technologies and information, many of which are no longer subject to patent protection. We regularly enter into confidentiality agreements with our key employees, customers, potential customers and other third parties and limit access to and distribution of our trade secrets and other proprietary information.
Current and future inflationary volatility driven by, among other things, supply chain disruptions and governmental stimulus or fiscal policies as well as geopolitical conflicts such as the ongoing military conflict between Russia and Ukraine and other geopolitical issues impacting global trade could further impact our ability to make accurate estimates, which could have an adverse impact on our business, cash flows and profitability.
Current and future inflationary volatility driven by, among other things, supply chain disruptions and governmental stimulus or fiscal policies as well as geopolitical conflicts such as the ongoing military conflict between Russia and Ukraine and in the Middle East, and other geopolitical issues impacting global trade could further impact our ability to make accurate estimates, which could have an adverse impact on our business, cash flows and profitability.
We may experience inflationary pressures in our operating costs and cost overruns on our projects. A small portion of our clients are serviced under fixed price contracts or contracts including a combination of fixed and variable elements, where we bear a portion of the risk for cost overruns.
We may experience inflationary pressures in our operating costs and cost overruns on our projects. A small portion of our customers are serviced under fixed price contracts or contracts including a combination of fixed and variable elements, where we bear a portion of the risk for cost overruns.
In addition, the modification or interpretation of existing environmental, health and safety laws or regulations, the more vigorous enforcement of existing laws or regulations, or the adoption of new laws or regulations may also negatively impact industries in which our clients operate, which in turn could have a negative impact on us.
In addition, the modification or interpretation of existing environmental, health and safety laws or regulations, the more vigorous enforcement of existing laws or regulations, or the adoption of new laws or regulations may also negatively impact industries in which our customers operate, which in turn could have a negative impact on us.
While we may create and publish voluntary disclosures regarding ESG matters from time to time, we could be criticized for the accuracy, adequacy or completeness of the disclosure related to our ESG-related practices and initiatives, commitments and goals, and progress against those goals.
While we may create and publish voluntary disclosures regarding ESG matters from time to time, we could be criticized for the accuracy, adequacy or completeness of the disclosure related to our ESG-related practices and initiatives, commitments and goals, and progress toward those goals.
No assurances can be made that we will be successful in maintaining or renewing our contracts with our clients. A significant portion of our contracts and agreements with clients may be terminated by either party on short notice.
No assurances can be made that we will be successful in maintaining or renewing our contracts with our customers. A significant portion of our contracts and agreements with customers may be terminated by either party on short notice.
The failure to retain these individuals, or failure to attract new employees, could adversely affect our ability to perform our obligations on our clients’ projects or maintenance and consequently could negatively impact our ability to meet the demand for our products and services.
The failure to retain these individuals, or failure to attract new employees, could adversely affect our ability to perform our obligations on our customers’ projects or maintenance and consequently could negatively impact our ability to meet the demand for our products and services.
On December 12, 2022, the European Union member states agreed to implement the OECD’s Base Erosion and Profit Shifting (BEPS) 2.0 Pillar Two global corporate minimum tax rate of 15% on companies with revenues over a specific threshold, which would go into effect in 2024.
On December 12, 2022, the European Union member states agreed to implement the OECD’s Base Erosion and Profit Shifting (BEPS) 2.0 Pillar Two global corporate minimum tax rate of 15% on companies with revenues over a specific threshold, which was scheduled to go into effect in 2024.
Risks Related to Market Conditions Demand for our services is sensitive to oil and gas prices, global oil supply and other factors which impact our client’s current and future spending levels.
Risks Related to Market Conditions Demand for our services is sensitive to oil and gas prices, global oil supply and other factors which impact our customer’s current and future spending levels.
Our business is subject to risks arising from climate change, including climate change legislation or regulations restricting emissions of “greenhouse gases,” changes in consumer preferences and technology and physical impacts of climate change, all of which could have a negative impact on our business and results of operations.
Our business is subject to risks arising from climate change, including climate change legislation or regulations restricting emissions of greenhouse gases, changes in consumer preferences and technology and physical impacts of climate change, all of which could have a negative impact on our business and results of operations.
However, these measures may not be adequate to prevent misappropriation of our technologies or to assure that our competitors will not independently develop technologies that are substantially equivalent or superior to our technologies.
However, these measures may not be adequate to prevent misappropriation of our technologies or to ensure that our competitors will not independently develop technologies that are substantially equivalent or superior to our technologies.
Additionally, some of our clients are modifying their plants and facilities and may adopt new technology in efforts to better align their operations and products with energy transition issues, but there is no assurance that such modified facilities or technological advancements will require the same level of services and products that we currently provide.
Additionally, some of our customers are modifying their plants and facilities and may adopt new technology in efforts to align their operations and products with the energy transition, but there is no assurance that such modified facilities or technological advancements will require the same level of services and products that we currently provide.
As a result, there have been a variety of regulatory developments, proposals or requirements and legislative initiatives that have been introduced in the U.S. and other parts of the world that are focused on restricting the emission of greenhouse gases and enhancing greenhouse gas emissions disclosure requirements, including the SEC’s proposed rule on climate change disclosure, increased fuel efficiency standards, carbon taxes or cap and trade systems, restrictive permitting and incentives for renewable energy.
As a result, there have been a variety of regulatory developments, proposals or requirements and legislative initiatives that have been introduced in the U.S. and other parts of the world that are focused on restricting the emission of greenhouse gases and enhancing greenhouse gas emissions disclosure requirements, including increased fuel efficiency standards, carbon taxes or cap and trade systems, restrictive permitting and incentives for renewable energy.
There has been an increased focus in the last several years on climate change in response to findings that emissions of carbon dioxide, methane and other greenhouse gases present an endangerment to public health and the environment.
There has been an increased focus on climate change in response to findings that emissions of carbon dioxide, methane and other greenhouse gases present an endangerment to public health and the environment.
Our ability to use our net operating losses and other tax attributes would be substantially limited if we experience an “ownership change,” as such term is defined in Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”).
Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited . Our ability to use our net operating losses and other tax attributes would be substantially limited if we experience an “ownership change,” as such term is defined in Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”).
The adoption of new or more stringent legislation or regulatory programs limiting greenhouse gas emissions from clients, particularly those in refining and petrochemical industries, for whom we provide inspection, repair and maintenance services, or reducing the demand for those clients’ products, could in turn affect demand for our products and services.
The adoption of new or more stringent legislation or regulatory programs limiting greenhouse gas emissions from customers, particularly those in refining and petrochemical industries, for whom we provide inspection, repair and maintenance services, or reducing the demand for those customers’ products, could in turn affect demand for our products and services.
We may not be able to meet the NYSE’s continued listing requirements and rules, and the NYSE may delist our common stock, which could negatively affect our company, the price of our common stock and our shareholders’ ability to sell our common stock. The NYSE has several listing requirements set forth in the NYSE Listed Company Manual.
We may not be able to maintain compliance with the NYSE’s continued listing requirements and rules, and the NYSE may delist our common stock, which could negatively affect the Company, the price of our common stock and our shareholders’ ability to sell our common stock. The NYSE has several listing requirements set forth in the NYSE Listed Company Manual.
Unsatisfactory quality of service execution, including safety performance, can affect client relationships, eliminate or reduce revenue streams from our largest clients, result in higher operating costs and negatively impact our ability to hire and retain a skilled technical workforce.
Unsatisfactory quality of service execution, including safety performance, can affect customer relationships, eliminate or reduce revenue streams from our largest customers, result in higher operating costs and negatively impact our ability to hire and retain a skilled technical workforce.
Our revenues are heavily dependent on certain industries. Sales of our services are dependent on clients in certain industries, particularly the refining and petrochemical industries.
Our revenues are heavily dependent on certain industries. Sales of our services are dependent on customers in certain industries, particularly the refining and petrochemical industries.
Additionally, these risks and uncertainties may, among other factors, impact our ability to generate cash flows from operations, access the capital markets on acceptable terms or at all, and affect our future need or ability to borrow under our 2022 ABL Credit Facility.
Additionally, these risks and uncertainties may, among other factors, impact our ability to generate cash flows from operations, access the capital markets on acceptable terms or at all, and affect our future need or ability to borrow under our credit agreements.
If we do not adapt to or comply with investor or other stakeholder expectations and standards on ESG matters as they continue to evolve or if we are perceived to have not responded appropriately to the growing concern for ESG issues, regardless of whether there is a regulatory or legal requirement to do so, we may suffer reputational damage.
If we do not adapt to or comply with investor or other stakeholder expectations and standards on ESG matters as they continue to evolve or if we are perceived to have not responded appropriately to the growing concern for ESG issues, regardless of whether there is a regulatory or legal requirement to do so, we may be exposed to the risk of investigation, inquiry, or legal challenges or suffer reputational damage.
If our ESG-related data, processes or reporting are incomplete or inaccurate, or if we fail to achieve progress with respect to our goals within the scope of ESG on a timely basis, or at all, our reputation could be adversely affected.
If our ESG-related data, processes or reporting are incomplete or inaccurate, or if we fail to achieve progress with respect to our ESG-related goals on a timely basis, or at all, our reputation could be adversely affected.
Our contracts typically require us to name a client as an additional insured under our insurance policies and indemnify our clients for injury, damage or loss arising out of our presence at our clients’ location, regardless of fault, or the performance of our services and provide for warranties for materials and workmanship.
Our contracts typically require us to name a customer as an additional insured under our insurance policies and indemnify our customers for injury, damage or loss arising out of our presence at our customers’ location, regardless of fault, or the performance of our services and provide for warranties for materials and workmanship.
A delisting of our common stock from the NYSE could negatively impact us by, among other things, reducing the liquidity and market price of our common stock; reducing the number of investors willing to hold or acquire our common stock, which could negatively impact our ability to raise equity financing; limiting our ability to issue additional securities or obtain additional financing in the future; decreasing the amount of news and analyst coverage of us; and causing us reputational harm with investors, our employees, and parties conducting business with us.
If we are unable to list our common stock on an alternate exchange, a delisting of our common stock from the NYSE could negatively impact us by, among other things, reducing the liquidity and market price of our common stock; reducing the number of investors willing to hold or acquire our common stock, which could negatively impact our ability to raise equity financing; limiting our ability to issue additional securities or obtain additional financing in the future; decreasing the amount of news and analyst coverage of us; and causing us reputational harm with investors, our employees, and parties conducting business with us.
We have a significant amount of debt as discussed below, and our overall leverage and the terms of our financing arrangements could: • limit our ability to obtain additional financing in the future for working capital, capital expenditures, to fund growth or for general corporate purposes; • make it more difficult for us to satisfy the terms of our debt obligations; • make it more difficult for us to manage increases in interest rates; • limit our ability to refinance our existing debt on terms acceptable to us, or at all; • require us to dedicate a substantial portion of our cash flow from operations to make interest and principal payments on our debt, thereby limiting the availability of our cash flow to fund future investments, capital expenditures, working capital, business activities and other general corporate requirements; and • subject us to higher levels of indebtedness than our competitors, which may cause a competitive disadvantage and may reduce our flexibility in responding to increased competition.
We have a significant amount of debt as discussed below, and our overall leverage and the terms of our financing arrangements could: • limit our ability to obtain additional financing in the future for working capital, capital expenditures, to fund growth or for general corporate purposes; • make it more difficult for us to satisfy the terms of our debt obligations; • make it more difficult for us to manage increases in interest rates; • limit our ability to refinance our existing debt on terms acceptable to us, or at all; • require us to dedicate a substantial portion of our cash flow from operations to make interest and principal payments on our debt, thereby limiting the availability of our cash flow to fund future investments, capital expenditures, working capital, business activities and other general corporate requirements; and • create a competitive disadvantage by reducing our flexibility in responding to increased competition from competitors who hold a lower level on indebtedness.
Our largest shareholder beneficially owned approximately 39.8% of the total voting power held by shareholders of our outstanding common stock as of March 5, 2024 (including common stock issued pursuant to the common stock subscription agreement with certain Corre holders and shares issuable upon exercise, subject to beneficial ownership limitation, of certain Warrants, as defined below, held by our largest shareholder in each case).
As of March 17, 2025, Corre and certain of its affiliates beneficially owned approximately 41.2% of the total voting power held by shareholders of our outstanding common stock (including common stock issued pursuant to the common stock subscription agreement with certain Corre holders and shares issuable upon exercise, subject to beneficial ownership limitation, of certain Warrants, as defined below, held by our largest shareholder in each case).
Notwithstanding the foregoing, even if the Section 382 Rights Agreement deters an ownership change, it is possible that we will not generate taxable income in time to use such net operating losses before their expiration, or at all. Our operations and properties are subject to extensive environmental, health and safety regulations.
Notwithstanding the foregoing, it is possible that we will not generate taxable income in time to use such net operating losses before their expiration, or at all. Our operations and properties are subject to extensive environmental, health and safety regulations.
If we do not generate enough cash to pay our debt service obligations, we may be required to refinance all or part of our debt, sell assets, borrow more money or raise additional equity capital.
If we do not generate enough cash to pay our debt service obligations, we may be required to refinance all or part of our debt, sell assets, borrow more money or raise additional equity capital. Disclosure of our debt instruments appears under Note 11 – Debt of the consolidated financial statements.
As a result, this shareholder may be able to exert influence over our affairs and policies. This concentrated ownership could limit the ability of the remaining shareholders to influence corporate matters, and the interests of the large shareholder may not coincide with our interests or the interests of the remaining shareholders.
This concentrated ownership could limit the ability of the remaining shareholders to influence corporate matters, and the interests of the large shareholder may not coincide with our interests or the interests of the remaining shareholders.
Since January 2021, we have implemented a new strategic organizational structure and reduced our operating costs through headcount reductions and other steps to better position ourselves for the recovery after the COVID-19 pandemic and to continue service diversification and enhance client value. These organizational changes resulted in restructuring charges and other cost-saving opportunities.
Since January 2021, we have implemented a new strategic organizational structure and reduced our operating costs through headcount reductions and other steps to better position ourselves to deliver improved margins and cash flow from operations and to continue service diversification and enhance customer value. These organizational changes resulted in restructuring charges and other cost-saving opportunities.
Our competition generally stems from other outside service contractors, many of whom offer a similar range of services. Future economic uncertainty could generally reduce demand for industrial services and thus create a more competitive bidding environment for new and existing work.
Our competition generally stems from other outside service contractors, many of whom offer similar services. Future economic uncertainty could generally reduce demand for industrial services and thus create a more competitive bidding environment for new and existing work. No assurances can be made that we will continue to maintain our pricing model or increase our market share or profitability.
There is no assurance that we will remain in compliance with Section 802.01B and Section 802.01C of the NYSE Listed Company Manual or other NYSE continued listing standards in the future.
On March 14, 2025, we received notice from the NYSE that we had regained compliance with the NYSE listing standards. There is no assurance that we will remain in compliance with Section 802.01B or other NYSE continued listing standards in the future.
We have also outsourced significant elements of our information technology infrastructure and, as a result, third parties may or could have access to our confidential information. The secure maintenance of this information is critical to our business and reputation.
Sensitive data is also transmitted on our networks and systems, including our intellectual property and proprietary information that is confidential to the business, to our customers and our business partners. We have also outsourced significant elements of our information technology infrastructure and, as a result, third parties may or could have access to our confidential information.
The concentration of ownership may also have the effect of delaying, preventing or deterring a change of control. Risks Related to Information Systems Our business and operations could suffer in the event of computer system failures, cyber-attacks or deficiencies in our cyber-security or those of third-party providers .
Risks Related to Information Systems Our business and operations could suffer in the event of computer system failures, cyber-attacks or deficiencies in our cyber-security or those of third-party providers . In the ordinary course of our business, we continue to increase dependencies on digital technologies to conduct our business.
Such investments may not prioritize short-term financial results and may involve significant risks and uncertainties, including encountering new, well established competitors. We may fail to generate sufficient revenue, operating margin or other value to justify our investments in such new client markets, thereby harming our ability to generate revenue.
We may fail to generate sufficient revenue, operating margin or other value to justify our investments in such new customer markets, thereby harming our ability to generate revenue.
Removed
Our ability to compete successfully in new client markets depends on our ability to continue to deliver innovative, relevant and useful services to our clients in a timely manner. As a result, we have invested, and expect to continue to invest, resources in developing products and services to market to new clients.
Added
As a result, this shareholder may be able to exert influence over our management, business plans and policies, as well as matters submitted to our stockholders for approval, such as the selection of directors and amendments of our organizational documents.
Removed
For example, Section 802.01C of the NYSE Listed Company Manual requires that our common stock trade at a minimum average closing price of $1.00 per share over a consecutive 30 trading day period.
Added
As a result, we have invested, and expect to continue to invest, resources in developing products and services to market to new customers. Such investments may not prioritize short-term financial results and may involve significant risks and uncertainties, including encountering new, well-established competitors.
Removed
Disclosure of our debt appears under Item 7 – Liquidity and Capital Resources, Note 1 – Summary of Significant Accounting Policies and Practice, and Note 11 – Debt .
Added
On March 14, 2024, the Company received a written notice (the “Written Notice”) from the NYSE that the Company was not in compliance with the continued listing standards set forth in Rule 802.01B of the NYSE Listed Company Manual because its average global market capitalization over a consecutive 30 trading-day period was less than $50.0 million and, at the same time, its last reported shareholders’ equity was less than $50.0 million.
Removed
In the ordinary course of our business, we continue to increase dependencies on digital technologies to conduct our business. Sensitive data is also transmitted on our networks and systems, including our intellectual property and proprietary information that is confidential to the business, to our customers and our business partners.
Added
As required by the NYSE, the Company timely notified the NYSE of its intent to cure the deficiency and restore its compliance with the NYSE continued listing standards.
Removed
Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited . On February 2, 2022, we entered into a Section 382 Rights Agreement (the “Section 382 Rights Agreement”) with Computershare Trust Company, N.A., as rights agent, to facilitate our ability to preserve our net operating losses and certain other tax attributes.
Added
On April 29, 2024, in accordance with applicable NYSE procedures, the Company submitted a plan (the “Plan”) advising the NYSE of the definitive actions the Company has taken, and is taking, that would bring it into compliance with the minimum global market capitalization listing standard within 12 months of receipt of the Written Notice.
Removed
The Section 382 Rights Agreement is intended to reduce the likelihood of an ownership change under Section 382 of the Code by deterring any Person (as such term is defined in the Section 382 Rights Agreement) or group of affiliated or associated Persons from acquiring beneficial ownership of 4.9% or more of our outstanding common shares.
Added
The NYSE accepted the Plan, and the Company’s common stock continued to be listed and traded on the NYSE during the 12-month period beginning March 14, 2024, subject to the Company’s compliance with other NYSE continued listing standards and continued periodic review by the NYSE of the Company’s progress with respect to the Plan.
Removed
The current Presidential administration is actively pursuing its policy goals of addressing global climate change through significant economy-wide reductions in greenhouse gases and transitioning from carbon-based energy sources.
Added
The Written Notice had no immediate impact on the listing of the Company’s common stock, which continued to trade on the NYSE during the applicable cure period and did not result in a default under the Company’s material debt or other agreements.
Removed
We have also received notices from certain foreign government appointed administrative authorities stating noncompliance with the requirements of pandemic-related funding assistance programs we participated in related to the payment of a portion of employee wages, which may be required to be repaid.
Added
The secure maintenance of this information is critical to our business and reputation.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeIf a cybersecurity incident is determined to be material by our management team, they would notify our Board of Directors. Our Vice President - IT and IT Security manager have developed expertise in cybersecurity, data protection, compliance, enterprise architecture and design, data analytics, and digital transformation through years of experience in the information technology space.
Biggest changeIf a cybersecurity incident is determined to be material by our management team, they would notify the Board. Our Vice President - IT and IT Security manager have developed expertise in cybersecurity, data protection, compliance, enterprise architecture and design, data analytics, and digital transformation through years of experience in the information technology space.
Any deviations from our IT security policies and standards are assessed by our IT security team. Any critical and high-risk levels are identified, documented and reported to relevant key stakeholders. We have established an Incident Response Plan that defines and documents procedures for assessing, identifying, and managing a cybersecurity incident.
Any deviations from our IT security policies and standards are assessed by our IT security team. Any critical and high-risk levels are identified, documented, addressed and reported to relevant key stakeholders. We have established an Incident Response Plan that defines and documents procedures for assessing, identifying, and managing a cybersecurity incident.
We use the findings of these exercises to improve our practices, procedures, and technologies. We also engage third party security experts to support our cybersecurity threat and incident response management and maintain information security risk insurance coverage.
We use the findings of these exercises to improve our practices, training, procedures, and technologies. We also engage third party security experts to support our cybersecurity threat and incident response management and maintain information security risk insurance coverage.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeAdditionally, we operate two manufacturing facilities in Houston, Texas (one of which is owned and the other is leased), which are included in our MS segment. Further, we lease office space for our corporate headquarters in Sugar Land, Texas. Additional district service locations considered materially important in our IHT and MS segments are as follows.
Biggest changeAdditionally, we operate two manufacturing facilities in Houston, Texas (one of which is owned and the other is leased), which are included in our MS segment. Further, we lease office space for our corporate headquarters in Sugar Land, Texas.
ITEM 2. PROPERTIES We provide our services globally through more than 140 locations in 15 countries. There are several materially important physical properties used in our operations. We own a facility in Alvin, Texas that consists of our primary training facility, equipment center and International Organization for Standardization-9001 certified manufacturing facility for clamps, enclosures, and sealants.
ITEM 2. PROPERTIES We provide our services globally through more than 138 locations in 13 countries. There are several materially important physical properties used in our operations. We own a facility in Alvin, Texas that consists of our primary training facility, equipment center and International Organization for Standardization-9001 certified manufacturing facility for clamps, enclosures, and sealants.
We lease facilities in Mobile, Alabama; Benicia, California; Harbor City, California; Hammond, Indiana; Columbus, Ohio; Pasadena, Texas (two locations); and Edmonton, Alberta, Canada. We own a facility in Pasadena, Texas and three facilities in the United Kingdom in Kendal, Carlisle and Scunthorpe.
Additional district service locations considered materially important in our IHT and MS segments are as follows: we lease facilities in Mobile, Alabama; Benicia, California; Harbor City, California; Hammond, Indiana; Columbus, Ohio; Pasadena, Texas (two locations); and Edmonton, Alberta, Canada. We own a facility in Pasadena, Texas and three facilities in the United Kingdom in Kendal, Carlisle and Scunthorpe.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 23 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE 67 ITEM 9A. CONTROLS AND PROCEDURES 68 Management’s Annual Report on Internal Control Over Financial Reporting 68 ITEM 9B. OTHER INFORMATION 68 ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS 69 PART III 70
Biggest changeFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 23 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE 69 ITEM 9A. CONTROLS AND PROCEDURES 70 Management’s Annual Report on Internal Control Over Financial Reporting 70 ITEM 9B. OTHER INFORMATION 70 ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS 70 PART III 71
ITEM 4. MINE SAFETY DISCLOSURES 10 PART II 11 ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED S TOCK HOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 11 ITEM 6. SELECTED FINANCIAL DATA 12 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 13 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 22 ITEM 8.
ITEM 4. MINE SAFETY DISCLOSURES 10 PART II 11 ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 11 ITEM 6. SELECTED FINANCIAL DATA 12 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 13 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 22 ITEM 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our stock is traded on the NYSE under the symbol “TISI”. Holders There were 323 holders of record of our common stock as of March 5, 2024, excluding beneficial owners of stock held in street name.
Biggest changeITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our stock is traded on the NYSE under the symbol “TISI”. Holders There were 313 holders of record of our common stock as of March 17, 2025, excluding beneficial owners of stock held in street name.
Dividends No cash dividends were declared or paid during the years ended December 31, 2023 or 2022. We are limited in our ability to pay cash dividends without the consent of our lenders. Accordingly, we have no present intention of paying cash dividends in the foreseeable future.
Dividends No cash dividends were declared or paid during the years ended December 31, 2024 or 2023. We are limited in our ability to pay cash dividends without the consent of our lenders. Accordingly, we have no present intention of paying cash dividends in the foreseeable future.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeAND SUBSIDIARIES RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (Continued) (unaudited, in thousands) Three Months Ended December 31, Twelve Months Ended December 31, 2023 2022 2023 2022 IHT Operating income $ 6,537 $ 4,055 $ 24,220 $ 17,093 Professional fees and other 113 — 941 — Severance charges, net 1 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, net 1 197 596 792 685 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 extinguishment 2 — 30,083 1,585 30,083 Foreign currency loss (gain) 1,510 1,263 734 (2,692) Pension credit 3 (159) (178) (640) (749) Write-off of other assets 4 666 — 1,295 — Professional fees and other 5 3,108 3,339 8,033 13,915 Legal costs (credit) and other 6 4,785 (700) 5,635 2,571 Severance charges, net 1 98 243 280 2,990 Natural disaster insurance recovery 7 — (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.
Biggest changeAND SUBSIDIARIES RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (Continued) (unaudited, in thousands) Twelve Months Ended December 31, 2024 2023 IHT Operating income $ 37,012 $ 24,220 Professional fees and other 1 162 941 Severance charges, net 3 551 492 Adjusted EBIT 37,725 25,653 Depreciation and amortization 11,778 12,402 Adjusted EBITDA $ 49,503 $ 38,055 MS Operating income $ 27,287 $ 27,759 Professional fees and other 1 140 147 Legal costs and other 2 41 — Severance charges, net 3 588 792 Adjusted EBIT 28,056 28,698 Depreciation and amortization 18,061 18,755 Adjusted EBITDA $ 46,117 $ 47,453 Corporate and shared support services Net loss $ (102,565) $ (127,701) Provision for income taxes 3,276 4,578 Gain on sale of assets (5) (291) Interest expense, net 47,808 55,181 Foreign currency loss (gain) (2,231) 734 Professional fees and other 1 3,809 8,033 Legal costs and other 2 83 5,635 Severance charges, net 3 184 280 Loss on debt extinguishment 4 — 1,585 Write-off of other assets 5 — 1,295 Pension credit 6 (446) (640) Adjusted EBIT (50,087) (51,311) Depreciation and amortization 6,456 6,715 Non-cash share-based compensation costs 2,273 1,590 Adjusted EBITDA $ (41,358) $ (43,006) _________________ 1 The twelve months ended December 31, 2024, includes $3.8 million related to costs associated with debt financing, and $0.3 million for lease extinguishment charges, support and other costs.
We based this assessment on assumptions that may prove to be inaccurate, and we could exhaust our available capital resources sooner than we expect in the event that we fail to meet our current projections. See Note 11 - Debt to the consolidated financial statements for a further discussion of our liquidity.
We based this assessment on assumptions that may prove to be inaccurate, and we could exhaust our available capital resources sooner than we expect in the event that we fail to meet our current projections. See Note 11 - Debt of the consolidated financial statements for a further discussion of our liquidity.
Free cash flow is defined as net cash provided by (used in) operating activities minus capital expenditures. We believe these non-GAAP financial measures are useful to both management and investors in their analysis of our financial position and results of operations.
Free Cash Flow is defined as net cash provided by (used in) operating activities minus capital expenditures paid in cash. We believe these non-GAAP financial measures are useful to both management and investors in their analysis of our financial position and results of operations.
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.
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 customer’s election.
Our segment adjusted EBIT and segment adjusted EBITDA are also used as a basis for the Chief Operating Decision Maker (Chief Executive Officer) 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.
Our segment adjusted EBITDA is also used as a basis for the Chief Operating Decision Maker (Chief Executive Officer) 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.
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.
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, pension credit, and items of other (income) expense. Consolidated adjusted EBITDA further excludes depreciation, amortization, and non-cash share-based compensation costs from consolidated adjusted EBIT.
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”).
We deploy conventional to highly specialized inspection, condition assessment, maintenance and repair services that result in greater safety, reliability and operational efficiency for our customers’ most critical assets. We conduct operations in two segments: Inspection and Heat Treating (“IHT”) and Mechanical Services (“MS”).
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.
In addition, we are capable of escalating with the customer’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.
See Item 1 at the beginning of this Annual Report. Overview of Business 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.
See Item 1 at the beginning of this Annual Report. Overview of Business We are a global, leading provider of specialty industrial services offering customers access to a full suite of conventional, specialized, and proprietary mechanical, heat-treating, and inspection services.
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.
We also believe that we are unique in our ability to provide these services in three distinct customer demand profiles: (i) turnaround or project services, (ii) call-out services, and (iii) nested or run-and-maintain services.
For example, the threat of recession and related economic repercussions could have a significant adverse effect on our financial position and business condition, as well as that of our clients and suppliers.
For example, the threat of recession and related economic repercussions could have a significant adverse effect on our financial position and business condition, as well as that of our customers and suppliers.
For the year ended December 31, 2023, net cash used in financing activities was $1.9 million, consisting primarily of the $37.1 million payoff of the APSC Term Loan, $41.2 million payoff of the Notes, and $9.1 million of term loan debt issuance costs, partially offset by $47.2 million of borrowings under the Corre Incremental Term Loan, $27.4 million of borrowings under the ME/RE loans and net borrowings on our 2022 ABL Credit Facility of $13.5 million.
For the year ended December 31, 2023, net cash used in financing activities was $1.9 million, consisting primarily of the $37.1 million payoff of the APSC Term Loan, $41.2 million payoff of the Notes (as defined herein), and $9.1 million of term loan debt issuance costs, partially offset by $47.2 million of borrowings under the Incremental Term Loan, $27.4 million of borrowings under the ME/RE Loans and net borrowings on our 2022 ABL Credit Facility of $13.5 million.
We define 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 15 Table of Content write off of assets and certain other items that we believe are not indicative of core operating activities.
We define 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, (gain) 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.
Cash and cash equivalents . Our cash and cash equivalents as of December 31, 2023 totaled $35.4 million, of which $12.0 million was in foreign accounts, primarily in Europe, Canada and Australia, including $0.6 million of cash located in countries where currency restrictions exist.
Our cash and cash equivalents as of December 31, 2023 totaled $35.4 million, of which $12.0 million was in foreign accounts, primarily in Europe, Canada and Australia, including $0.6 million of cash located in countries where currency restrictions exist. Cash flows attributable to our operating activities.
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 us. Segment adjusted EBITDA further excludes from segment 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 depreciation, amortization, and non-cash share-based compensation 15 Table of Content costs from segment adjusted EBIT.
We incurred a net loss of $75.7 million, further adjusted for a decrease in net working capital of $7.5 million, partially offset by the effect of depreciation and amortization of $37.9 million, non-cash amortization of debt issuance costs and debt discount of $18.7 million and paid-in-kind interest of $14.5 million.
We incurred a net loss of $75.7 million, further adjusted for a decrease in net working capital of $7.5 million, partially offset by the effect of depreciation and amortization of $37.9 million, non-cash amortization of debt issuance costs and debt discount of $18.7 million and paid-in-kind interest of $14.5 million. Cash flows attributable to our investing activities .
Effect of exchange rate changes on cash . For the year ended December 31, 2023, the effect of foreign exchange rate changes on cash was a positive impact of $0.3 million. For the year ended December 31, 2022, the effect of foreign exchange rate changes on cash was a negative impact of $0.7 million.
Effect of exchange rate changes on cash . For the year ended December 31, 2024, the effect of foreign exchange rate changes on cash was a negative impact of $0.6 million. For the year ended December 31, 2023, the effect of foreign exchange rate changes on cash was a positive impact of $0.3 million.
Additionally, these events may, among other factors, impact our ability to generate cash flows from operations, access the capital markets on acceptable terms or at all, service our indebtedness, maintain compliance with the financial covenants contained in our various credit agreements and affect our future need or ability to borrow under our 2022 ABL Credit Facility and our A&R Term Loan Credit Agreement.
Additionally, these events may, among other factors, impact our ability to generate cash flows from operations, access the capital markets on acceptable terms or at all, service our indebtedness, maintain compliance with the financial covenants contained in our various credit agreements and affect our future need or ability to borrow under our credit agreements.
The pension plan was frozen in 1994 and no new participants have been added since that date. TEAM, INC.
The pension plan was frozen in 1994 and no new participants have been added since that date. 17 Table of Content TEAM, INC.
Based upon such liquidity assessment, we believe that the Company’s current working capital, forecasted cash flows from operations, expected availability under our existing debt arrangements and capital expenditure financing is sufficient to fund our operations, service our indebtedness, and maintain compliance with our debt covenants.
Based upon such liquidity assessment, we believe that the Company’s current working capital, forecasted cash flows from operations, expected availability under our existing debt arrangements and capital expenditure financing is sufficient to fund our operations, service our indebtedness, and maintain compliance with our debt covenants for the next twelve months, and based on current expectations, the long-term.
Corporate operating loss decreased by $12.6 million year over year, mainly due to lower personnel and professional costs in the current year as compared to prior year and lower overall costs due to our ongoing cost reduction efforts.
Corporate operating loss decreased by $11.1 million year over year, mainly due to lower personnel and professional costs in the current year as compared to the prior year and lower overall costs due to our ongoing cost reduction program.
The impact of our cost reduction efforts has been partially offset by continued cost inflation in several areas across all segments, such as raw materials, transportation, and labor costs. 14 Table of Content Operating loss for the current year includes net expenses totaling $16.3 million that we do not believe are indicative of our core operating activities, while the same period in the prior year included $20.4 million of such items.
The impact of our cost reduction efforts has been partially offset by continued cost inflation in several areas across all segments, such as raw materials, transportation, and labor. 14 Table of Content The operating income for the current year includes net expenses totaling $5.6 million which we do not believe are connected to our core operating activities, while the same period in the prior year included $16.3 million of such items.
Such risks include the following: • loss of customers or other unforeseen deterioration in demand for our services; • seasonal fluctuations, such as severe weather and other variations in our clients’ industries that may impede or delay the timing of client orders and the delivery of our services; • rapid increases in raw materials and labor costs that may hinder our ability to meet our forecasted operating expenses; • persisting or increasing levels of inflation domestically and internationally and the impact of such inflation on our ability to meet our current forecast; • changes in regulations governing our operations and unplanned costs to comply with such regulatory changes; • counterparty credit risk related to our ability to collect our receivables; and • unexpected or prolonged fluctuations in interest rates and their impact on our forecasted costs of raising additional capital. 19 Table of Content See Item 1A “Risk Factors” in this Annual Report on Form 10-K for additional information.
Such risks include the following: • loss of customers or other unforeseen deterioration in demand for our services; • seasonal fluctuations, such as severe weather and other variations in our customers’ industries that may impede or delay the timing of customer orders and the delivery of our services; • rapid increases in raw materials and labor costs that may hinder our ability to meet our forecasted operating expenses; • persisting or increasing levels of inflation domestically and internationally and the impact of such inflation on our ability to meet our current forecast; • changes in regulations governing our operations and unplanned costs to comply with such regulatory changes; • counterparty credit risk related to our ability to collect our receivables; and • unexpected or prolonged fluctuations in interest rates and their impact on our forecasted costs of raising additional capital.
The effective tax rate was a provision of 6.4% and 2.3% for years ended December 31, 2023 and 2022, respectively.
The effective tax rate was a provision of 9.4% and 6.4% for years ended December 31, 2024 and 2023, respectively.
For the year ended December 31, 2023, net cash used in investing activities was $10.0 million, consisting of $10.4 million of capital expenditures offset by net proceeds from asset disposals of $0.4 million.
For the year ended December 31, 2023, net cash used in investing activities was $10.0 million, consisting of $10.4 million of capital expenditures offset by net proceeds from asset disposals of $0.4 million. 20 Table of Content Cash flows attributable to our financing activities.
“Risk Factors” included in this report and have caused fluctuations in our results in the past and are expected to cause fluctuations in our results in the future. Additional information with respect to certain factors are described below. Financing Transactions.
“Risk Factors” included in this report, and have caused fluctuations in our results in the past and are expected to cause fluctuations in our results in the future. Additional information with respect to certain factors are described below. Financing Transactions. On September 30, 2024, we entered into certain amendments with our lenders.
See Note 11 - Debt for additional details on our off-balance sheet arrangements. 21 Table of Content Critical Accounting Policies The process of preparing financial statements in accordance with GAAP requires us to make estimates and judgments.
Off-Balance Sheet Arrangements From time-to-time, we enter into off-balance sheet arrangements and transactions that can give rise to material off-balance sheet obligations. See Note 11 - Debt for additional details on our off-balance sheet arrangements. 21 Table of Content Critical Accounting Policies The process of preparing financial statements in accordance with GAAP requires us to make estimates and judgments.
Total revenues increased $22.4 million or 2.7% from the prior year. Total revenue was negatively impacted by $2.3 million of unfavorable foreign exchange rate movements during 2023.
Total revenues decreased by $10.3 million or 1.2% from the prior year. Total revenue was negatively impacted by $0.2 million of unfavorable foreign exchange rate movements during 2024.
Other expense (income), net . Other expense (income), net decreased by $9.3 million, from income of $8.2 million in the prior year to expense of $1.1 million for 2023.
Other income (expense), net changed by $3.8 million, from an expense of $1.1 million in the prior year to income of $2.7 million in 2024.
Foreign currency transaction losses in the current year period reflect the effects of negative fluctuations in the value of the U.S. dollar relative to the foreign currencies to which we have exposure. Taxes.
This was primarily driven by the foreign currency transaction gains in the current year period reflecting the effects of positive fluctuations in the value of the U.S. dollar relative to the foreign currencies to which we have exposure. Taxes.
Our cash and cash equivalents as of December 31, 2022 totaled $58.1 million of which $16.3 million was in foreign accounts, primarily in Europe, Canada and Australia, including $1.4 million of cash located in countries where currency restrictions exist. Cash flows attributable to our operating activities.
Our cash and cash equivalents as of December 31, 2024 totaled $35.5 million, of which $5.1 million was in foreign accounts, primarily in Europe, Canada and Australia, including $1.1 million of cash located in countries where currency restrictions exist.
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.
The twelve months ended December 31, 2023, includes $6.7 million related to costs associated with debt financing, and $2.4 million, for lease extinguishment charges, support and other costs. 2 Primarily relates to accrued legal matters, adjustments to legal reserves and other non-routine matters.
Cash interest paid for the years ended December 31, 2023 and 2022 amounted to $19.5 million and $29.2 million, respectively. Loss on debt extinguishment . Loss on debt extinguishment for the year ended December 31, 2023 was $1.6 million compared to $30.1 million in the prior year.
Cash interest paid for the years ended December 31, 2024 and 2023 amounted to $24.9 million and $19.5 million, respectively. Loss on debt extinguishment . There was no loss on debt extinguishment for the year ended December 31, 2024.
The provision for income tax was $4.6 million on the pre-tax loss from continuing operations of $71.1 million in the current year compared to the provision for income tax of $3.3 million on pre-tax loss from continuing operations of $146.8 million in the prior year.
The provision for income tax was $3.3 million on the pre-tax loss of $35.0 million in the current year compared to the provision for income tax of $4.6 million on pre-tax loss of $71.1 million in the prior year. The provision for income tax was primarily driven by jurisdictions outside the United States.
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.
The twelve months ended December 31, 2023, includes $6.7 million related to costs associated with debt financing, and $2.4 million, for lease extinguishment charges, support and other costs. 2 Primarily relates to accrued legal matters, adjustments to legal reserves and other non-routine matters.
For the year ended December 31, 2022, net cash used in financing activities was $192.0 million, consisting primarily of the $224.9 million payoff on the APSC term loan, $62.0 million of net payments under the 2020 ABL Credit Facility and $13.7 million of term loan debt issuance costs, partially offset by net borrowings on our 2022 ABL Credit Facility of $64.9 million and borrowings of $35.0 million under the Corre Delayed Draw Term Loan.
For the year ended December 31, 2024, net cash used in financing activities was $12.7 million, consisting primarily of $8.5 million of debt issuance costs, $2.8 million of principal payments under the ME/RE Loans and $1.4 million of principal payments under the Incremental Term Loan, partially offset by the net borrowings on our 2022 ABL Credit Facility of $0.5 million.
MS revenues increased by $15.4 million or 3.7%, over prior year, driven by a $16.7 million increase across our international regions other than Canada due to higher activity related to leak repair, machining and bolting services, and hot tapping services primarily in the United Kingdom and Europe.
MS revenues decreased by $7.5 million or 1.7%, over prior year, driven by a $7.7 million decrease in Canada turnaround activity, and a $2.3 million decrease in revenue from our international operations attributable to lower activity in leak repair, machining and bolting, and hot tapping services primarily in Europe and the United Kingdom.
AND SUBSIDIARIES RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (unaudited, in thousands except per share data) Three Months Ended December 31, Twelve Months Ended December 31, 2023 2022 2023 2022 Adjusted Net Income (Loss): Net loss from continuing operations $ (23,124) $ (56,932) $ (75,722) $ (150,087) Professional fees and other 1 3,301 3,339 9,121 13,915 Legal costs (credit) and other 2 4,785 (700) 5,635 2,571 Severance charges, net 3 387 933 1,564 3,961 Natural disaster insurance recovery 4 — (324) — (1,196) Loss on debt extinguishment 5 — 30,083 1,585 30,083 Write-off of other assets 6 666 — 1,295 — Tax impact of adjustments and other net tax items 7 (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 from continuing operations $ (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 credit 8 (159) (178) (640) (749) Loss (gain) on equipment sale (5) 69 (291) (4,200) Loss on debt extinguishment 5 — 30,083 1,585 30,083 Professional fees and other 1 3,301 3,339 9,121 13,915 Legal costs (credit) and other 2 4,785 (700) 5,635 2,571 Severance charges, net 3 387 933 1,564 3,961 Natural disaster insurance recovery 4 — (324) — (1,196) Write-off of other assets 6 666 — 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.
AND SUBSIDIARIES RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (unaudited, in thousands except per share data) Twelve Months Ended December 31, 2024 2023 Adjusted Net Loss: Net loss $ (38,266) $ (75,722) Professional fees and other 1 4,111 9,121 Legal costs and other 2 124 5,635 Severance charges, net 3 1,323 1,564 Loss on debt extinguishment 4 — 1,585 Write-off of other assets 5 — 1,295 Tax impact of adjustments and other net tax items 6 (210) (159) Adjusted Net Loss $ (32,918) $ (56,681) Adjusted Net Loss per common share: Basic and Diluted $ (7.43) $ (12.97) Consolidated Adjusted EBIT and Adjusted EBITDA: Net loss $ (38,266) $ (75,722) Provision for income taxes 3,276 4,578 Interest expense, net 47,808 55,181 Foreign currency loss (gain) (2,231) 734 Gain on sale of assets (5) (291) Professional fees and other 1 4,111 9,121 Legal costs and other 2 124 5,635 Severance charges, net 3 1,323 1,564 Loss on debt extinguishment 4 — 1,585 Write-off of other assets 5 — 1,295 Pension credit 7 (446) (640) Consolidated Adjusted EBIT 15,694 3,040 Depreciation and amortization Amount included in operating expenses 13,730 14,555 Amount included in SG&A expenses 22,565 23,317 Total depreciation and amortization 36,295 37,872 Non-cash share-based compensation costs 2,273 1,590 Consolidated Adjusted EBITDA $ 54,262 $ 42,502 Free Cash Flow: Cash provided by (used in) operating activities $ 22,767 $ (10,986) Capital expenditures (9,465) (10,430) Free Cash Flow $ 13,302 $ (21,416) ____________________________________ 1 The twelve months ended December 31, 2024, includes $3.8 million related to costs associated with debt financing, and $0.3 million for lease extinguishment charges, support and other costs.
As of December 31, 2023 we are in compliance with our debt covenants. Our ability to maintain compliance with the financial covenants contained in the 2022 ABL Credit Agreement and A&R Term Loan Credit Agreement is dependent upon our future operating performance and future financial condition, both of which are subject to various risks and uncertainties.
Our ability to maintain compliance with the financial covenants contained in our credit agreements is dependent upon our future operating performance and future financial condition, both of which are subject to various risks and uncertainties. On March 12, 2025, we entered into certain debt refinancing transactions with our existing and new lenders.
For the year ended December 31, 2022, net cash used in operating activities was $57.9 million.
For the year ended December 31, 2024, net cash provided by operating activities was $22.8 million.
As of March 5, 2024, we had consolidated cash and cash equivalents of $24.0 million, excluding $4.9 million restricted mainly as collateral for outstanding letters of credit, and approximately $12.1 million of undrawn availability under our various credit facilities, resulting in total liquidity of $36.1 million. Refer to Note 11 - Debt for information on our debt instruments.
As of March 17, 2025, we had consolidated cash and cash equivalents of $10.1 million, excluding $4.3 million of restricted cash used mainly as collateral for outstanding letters of credit and commercial card programs, and approximately $16.1 million of undrawn availability under our various credit facilities, resulting in total liquidity of $26.2 million.
Loss on debt extinguishment during 2023 was due to the payoff of the remaining balance of the APSC Term Loan in June 2023 and consisted mainly of an early payment premium.
The loss on debt extinguishment for the year ended December 31, 2023 of $1.6 million was mainly due to the early payment premium incurred as part of the payoff of the remaining balance of the APSC Term Loan in June 2023. Other income (expense), net .
As of December 31, 2023, we had approximately $31.3 million of available borrowing capacity under our various credit facilities, consisting of $21.3 million available under the 2022 ABL Credit Facility and $10.0 million available under the A&R Term Loan Credit Agreement. Our principal uses of cash and liquidity are for working capital needs, capital expenditures and operations.
ABL Amendment No.5 significantly improved availability under our Revolving Credit Loans and as of December 31, 2024, we had approximately $45.9 million of available borrowing capacity under our various credit facilities, consisting of $35.9 million available under the 2022 ABL Credit Facility and $10.0 million available under the A&R Term Loan Credit Agreement.
MS operating income increased by $6.8 million year over year to $27.8 million for 2023, mainly due to increased activity levels from U.S. and international operations; partially offset by a decrease in operating income from our valve business.
MS operating income decreased by $0.5 million year over year to $27.3 million for 2024, mainly due to decreased revenue levels in Canada and other international locations, partially offset by a $5.3 million increase in operating income from U.S. operations driven by higher margins.
The detail of operating income (loss) excluding non-core expenses is below (unaudited) (in thousands): Twelve Months Ended December 31, Increase (Decrease) 2023 2022 $ % Operating loss $ (13,276) $ (39,802) $ 26,526 66.6 % Professional fees and other 9,121 13,915 (4,794) (34.5) % Legal costs 5,635 2,571 3,064 119.2 % Severance charges, net 1,564 3,961 (2,397) (60.5) % Total non-core expenses 16,320 20,447 (4,127) (20.2) % Total operating income (loss), excluding non-core expenses $ 3,044 $ (19,355) $ 22,399 115.7 % Excluding the impact of these identified non-core expenses in both periods, operating loss decreased by $22.4 million from a loss of $19.4 million to income of $3.0 million.
The detail of operating income (loss) excluding non-core expenses is below (unaudited) (in thousands): Twelve Months Ended December 31, Favorable (Unfavorable) 2024 2023 $ % Operating income (loss) $ 10,136 $ (13,276) $ 23,412 176.3 % Professional fees and other 4,111 9,121 5,010 54.9 % Legal costs 124 5,635 5,511 97.8 % Severance charges, net 1,323 1,564 241 15.4 % Total non-core expenses 5,558 16,320 10,762 65.9 % Total operating income, excluding non-core expenses $ 15,694 $ 3,044 $ 12,650 415.6 % Excluding the impact of these identified non-core expenses in both periods, operating income increased by $12.7 million from $3.0 million to $15.7 million.
IHT revenues increased by $7.0 million or 1.7%, driven by a $10.3 million increase in the U.S., primarily due to higher callout and turnaround activities in various districts due to higher demand for our non-destructive testing services, a $5.1 million increase in Europe due to higher turnaround activity primarily in the Netherlands, and a $1.5 million increase in our aerospace business as our new facility in Cincinnati experienced increased client interest.
These decreases were partially offset by a $7.1 million increase in U.S. operations, primarily due to higher callout and turnaround activities in various locations attributable to higher demand for our non-destructive testing services, and a $3.0 million increase in revenue related to aerospace driven by improved utilization at our Cincinnati facility.
See our non-GAAP reconciliation for additional details of our non-core expenses. Interest expense, net . Interest expense for 2023 was $55.2 million, a decrease of $29.9 million compared to the prior year.
See our non-GAAP reconciliation for additional details of our non-core expenses. Interest expense, net . Interest expense for 2024 was $47.8 million, a decrease of $7.4 million compared to the prior year. The decrease was primarily attributable to a decrease in accelerated amortization due to the “Maturity Reserve Trigger Date” provision that was previously applicable.
We had net income of $70.1 million, further adjusted for the gain on sale of our Quest Integrity segment (“Quest Integrity”) of $203.4 million and a decrease in net working capital of $30.2 million, partially offset by the effect of depreciation and amortization of $37.6 million, loss on debt extinguishment of $17.7 million, amortization of non-cash debt issuance costs and debt discount of $35.5 million and paid- in-kind interest of $18.2 million. 20 Table of Content Cash flows attributable to our investing activities .
We incurred a net loss of $38.3 million, further adjusted for a decrease in net working capital of $4.7 million, offset by the effect of depreciation and amortization of $36.3 million, non-cash amortization of debt issuance costs and debt discount of $6.2 million and paid-in-kind interest of $14.4 million.
For the year ended December 31, 2022, net cash provided by investing activities was $243.4 million, consisting primarily of net proceeds from the sale of Quest Integrity of $260.8 million and net proceeds from asset disposals of $7.2 million, partially offset by $24.7 million of capital expenditures. Cash flows attributable to our financing activities.
For the year ended December 31, 2024, net cash used in investing activities was $9.3 million, consisting of $9.5 million of capital expenditures offset by net proceeds from asset disposals of $0.2 million.
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.
Twelve months ended December 31, 2023 includes $3.9 million related to accruals for the potential repayment of pandemic related subsidies in foreign jurisdiction. 3 Represents customary severance costs associated with staff reductions across multiple departments. 4 Represents loss on the early payoff of the remaining APSC Term Loan in June 2023. 5 The twelve months ended December 31, 2023 represents $0.7 million loss on settlement of a note receivable and an additional $0.6 million for the write-off of software related costs. 6 Represents the tax effect of the adjustments. 7 Represents pension credits 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.
Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 The following table sets forth the components of revenue and operating income (loss) from our operations for the twelve months ended December 31, 2023 and 2022 (in thousands): Twelve Months Ended December 31, Increase (Decrease) 2023 2022 $ % Revenues by business segment: IHT $ 429,559 $ 422,562 $ 6,997 1.7 % MS 433,056 417,646 15,410 3.7 % Total revenues $ 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 % Total operating loss $ (13,276) $ (39,802) $ 26,526 66.6 % Interest expense, net 55,181 85,052 (29,871) (35.1) % Loss on debt extinguishment 1,585 30,083 (28,498) (94.7) % Other expense (income), net 1,102 (8,156) 9,258 (113.5) % Loss before income taxes $ (71,144) $ (146,781) $ 75,637 51.5 % Provision for income taxes 4,578 3,306 1,272 38.5 % Net loss from continuing operations $ (75,722) $ (150,087) $ 74,365 49.5 % Revenues.
In the event we are unable to maintain the listing of our shares on the NYSE, we may look to list our shares on alternative exchanges. 13 Table of Content Results of Operations Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 The following table sets forth the components of revenue and operating income (loss) from our operations for the twelve months ended December 31, 2024 and 2023 (in thousands): Twelve Months Ended December 31, Favorable (Unfavorable) 2024 2023 $ % Revenues by business segment: IHT $ 426,722 $ 429,559 $ (2,837) (0.7) % MS 425,550 433,056 (7,506) (1.7) % Total revenues $ 852,272 $ 862,615 $ (10,343) (1.2) % Operating income (loss): IHT 37,012 24,220 12,792 52.8 % MS 27,287 27,759 (472) (1.7) % Corporate and shared support services (54,163) (65,255) 11,092 17.0 % Total operating income (loss) $ 10,136 $ (13,276) $ 23,412 176.3 % Interest expense, net (47,808) (55,181) 7,373 13.4 % Loss on debt extinguishment — (1,585) 1,585 100.0 % Other income (expense), net 2,682 (1,102) 3,784 343.4 % Loss before income taxes $ (34,990) $ (71,144) $ 36,154 50.8 % Provision for income taxes (3,276) (4,578) 1,302 28.4 % Net loss $ (38,266) $ (75,722) $ 37,456 49.5 % Revenues.
Subsequent to the June 2023 Refinancing, financing for our operations consists primarily of our 2022 ABL Credit Agreement, which includes our 2022 ABL Credit Facility and the ME/RE Loans; the A&R Term Loan Credit Agreement, which includes the Uptiered Loan and the Incremental Term Loan; and cash flows from our operations.
The pension plan was frozen in 1994 and no new participants have been added since that date. 18 Table of Content Liquidity and Capital Resources Prior to consummation of the Refinancing Transactions on March 12, 2025, financing for operations consisted primarily of our 2022 ABL Credit Agreement (which includes the Revolving Credit Loans, the Delayed Draw Term Loan and the ME/RE Loans (each as defined herein)), the A&R Term Loan Credit Agreement (which includes the Uptiered Loan and the Incremental Term Loan (each as defined herein)), and cash flows from our operations.
Overall operating loss decreased by $26.5 million to a loss of $13.3 million in 2023 as compared to a loss of $39.8 million in the prior year. IHT’s operating income increased by $7.1 million, primarily driven by higher activity as described above.
These decreases were offset by revenue increases in U.S. operations of $2.5 million due to higher turnaround activities. Operating income (loss) . Overall operating income improved by $23.4 million to $10.1 million in 2024 as compared to a loss of $13.3 million in the prior year.
These effects were partially offset by a year over year increase in cash interest on the 2022 ABL Credit Facility due to higher balances outstanding related to the June 2023 Refinancing and an increase in the Secured Overnight Financing Rate (“SOFR”) rate, and the increase in amounts outstanding and paid-in-kind (noncash) (“PIK”) interest on the Uptiered Loan / Subordinated Term Loan and the Incremental Term Loan.
This effect was partially offset by increases in interest expense due to higher balances outstanding following the debt refinancing transactions, cash interest rate increases on the Uptiered Loan and paid-in-kind (“PIK”) interest increase due to the increased principal balance of the Uptiered Loan.
See Item 1A “Risk Factors” in this Annual Report on Form 10-K for additional information. 13 Table of Content Results of Operations The following is a comparison of our results of operations for the twelve months ended December 31, 2023 and December 31, 2022.
See Item 1A “Risk Factors” in this Annual Report on Form 10-K for additional information. 19 Table of Content On September 30, 2024, we entered into certain amendments with our lenders. Refer to Note 11 - Debt of the consolidated financial statements for additional details about the amendments.
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.
Twelve months ended December 31, 2023 includes $3.9 million related to accruals for the potential repayment of pandemic related subsidies in foreign jurisdiction. 3 Represents customary severance costs associated with staff reductions across multiple departments. 4 Represents loss on the early payoff of the remaining APSC Term Loan in June 2023. 5 The twelve months ended December 31, 2023 represents $0.7 million loss on settlement of a note receivable and an additional $0.6 million for the write-off of software related costs. 6 Represents pension credits 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.
Removed
During 2023, we entered into an amendment and restatement of that certain subordinated term loan credit agreement dated as of November 9, 2021 (as amended and restated, the “A&R Term Loan Credit Agreement”) among us, as borrower, the guarantors party thereto, the lenders from time to time party thereto and Cantor Fitzgerald Security, as agent; we entered into ABL Amendment No. 3; we paid off the remaining balance on the APSC Term Loan (defined below) and our 5.00% Convertible Senior Notes due 2023 (the “Notes”); and entered into an amendment of the Substitute Insurance Reimbursement Facility Agreement.
Added
Refer to Note 11 - Debt of the consolidated financial statements for additional details. On March 12, 2025, we entered into certain debt refinancing transactions with our existing and new lenders (collectively, the “Refinancing Transactions”). Refer to Note 19 - Subsequent Events of the consolidated financial statements for additional details about the transactions. Listing Notice from NYSE .
Removed
See Note 11 - Debt to the consolidated financial statements for additional details related to these transactions. Market Conditions Update . Fluctuations in oil and gas prices continued during 2023 with an overall decline in prices as compared to 2022. Oil and gas price volatility may impact the current and future spending on our services by our clients.
Added
On March 14, 2024, we were notified by the NYSE of our non-compliance with their continued listing standards, as our total market capitalization and shareholders’ equity had fallen below the NYSE listing requirements.
Removed
Although oil and gas prices are expected to be relatively stable in 2024 given the current balance between oil and gas supply and demand, the future impacts to our business from potentially higher interest rates, persistent global and domestic inflation, geopolitical unrest especially in the Middle East, and volatility in global supply chains cannot be predicted.
Added
As required by the NYSE, we notified the NYSE of our intent to cure the market capitalization and/or shareholders’ equity deficiency and restore our compliance with NYSE continued listing standards.
Removed
These increases were partially offset by a $9.9 million decrease in Canada due to reduced scope in certain client turnaround projects.
Added
In accordance with applicable NYSE procedures, on April 29, 2024, we submitted a plan advising the NYSE of the definitive actions we have taken and are taking that would bring us into compliance with NYSE continued listing standards within 12 months of receipt of the written notice.
Removed
MS revenue in the U.S. increased by $1.1 million, these increases were offset by decreases in valve sales and non-repeating turnaround work in Canada of $1.4 million, and $1.0 million, respectively. Operating income (loss) .
Added
The NYSE accepted the plan, and our common stock continued to be listed and traded on the NYSE during the 12-month period beginning March 14, 2024, subject to our compliance with other NYSE continued listing standards and continued periodic review by the NYSE of our progress with respect to our plan.
Removed
The decrease was primarily attributable to lower interest expense and amortization of debt issuance costs on our APSC Term Loan in 2023 due to the pay down of $225.0 million of the balance in November 2022, full payoff of the remaining balance in June 2023, payoff of the Notes in August 2023, as well as decrease in accelerated amortization due to the “Maturity Reserve Trigger Date” provision that was previously applicable.
Added
On March 14, 2025, we received notice from the NYSE that we had regained compliance with the NYSE listing standards. We can provide no assurances that we will be able to maintain the listing of our shares on the NYSE.
Removed
The prior year loss on debt extinguishment was due to the $225.0 million paydown of the APSC Term Loan in November 2022 and consisted of $12.4 million of cash fees and early payment premium and $17.7 million of noncash expense related to the write off of the related unamortized balance of deferred issuance costs and debt and warrant discounts.
Added
IHT revenues decreased by $2.8 million or 0.7%, driven by a $10.3 million decrease in Canada operations revenue attributable to reduced scope in certain customer turnaround projects versus the prior year, and a $2.7 million decrease in international regions revenue, primarily in Europe and the United Kingdom.
Removed
The decrease was primarily driven by a $4.6 million gain on disposal of assets and impairment in prior year as compared to current year, and $3.4 million foreign currency transaction gain in the prior year.
Added
IHT’s operating income increased by $12.8 million or 52.8%, primarily driven by lower costs and higher gross margins in U.S. operations, partially offset by a decrease in operating income from Canada driven mainly by the factors described above.
Removed
For 2022, severance charges represent costs associated with executive departures and our ongoing cost reduction efforts across multiple segments . 17 Table of Content 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.
Added
Twelve months ended December 31, 2024 includes $3.8 million of legal fees, partially offset by $3.7 million related to the reversal of a reserve established for the potential repayment of pandemic related subsidies (see N ote 16 - Commitments and Contingencies ).
Removed
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.
Added
Twelve months ended December 31, 2024 includes $3.8 million of legal fees, partially offset by $3.7 million related to the reversal of a reserve established for the potential repayment of pandemic related subsidies (see N ote 16 - Commitments and Contingencies ).
Removed
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.
Added
Our principal uses of cash and liquidity are for working capital needs, capital expenditures and operations. As of December 31, 2024 we are in compliance with our debt covenants.
Removed
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. 18 Table of Content 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.
Added
Refer to Note 19 - Subsequent Events of the consolidated financial statements for additional details about the transactions.

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