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þ
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended December 31, 2018
|
¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
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For the transition period from to
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Delaware
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74-1765729
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(State or Other Jurisdiction of
Incorporation or Organization)
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(I.R.S. Employer
Identification No.)
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13131 Dairy Ashford, Suite 600, Sugar Land, Texas
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77478
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(Address of Principal Executive Offices)
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(Zip Code)
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Title of Each Class
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Name of Each Exchange on Which Registered
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Common Stock, $0.30 par value
|
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New York Stock Exchange
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Large accelerated filer
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¨
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Accelerated filer
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þ
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Non-accelerated filer
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¨
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Smaller reporting company
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¨
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Emerging growth company
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¨
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ITEM 1.
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ITEM 1A.
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ITEM 1B.
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||
ITEM 2.
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ITEM 3.
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ITEM 4.
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||
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ITEM 5.
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ITEM 6.
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ITEM 7.
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ITEM 7A.
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ITEM 8.
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ITEM 9.
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ITEM 9A.
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ITEM 9B.
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ITEM 10.
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ITEM 11.
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ITEM 12.
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ITEM 13.
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ITEM 14.
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ITEM 15.
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ITEM 16.
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ITEM 1.
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BUSINESS
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ITEM 1A.
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RISK FACTORS
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ITEM 1B.
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UNRESOLVED STAFF COMMENTS
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ITEM 2.
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PROPERTIES
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ITEM 3.
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LEGAL PROCEEDINGS
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ITEM 4.
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MINE SAFETY DISCLOSURES
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ITEM 5.
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MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
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*
|
$100 invested on 5/31/13 in stock or index, including reinvestment of dividends. Years ended May 31, 2014 and 2015; seven-month transition period ended December 31, 2015; and years ended December 31, 2018, 2017 and 2016.
|
|
5/13
|
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5/14
|
|
5/15
|
|
12/15
|
|
12/16
|
|
12/17
|
|
12/18
|
|||||||
Team, Inc.
|
100.00
|
|
|
116.22
|
|
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110.34
|
|
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88.61
|
|
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108.82
|
|
|
41.31
|
|
|
40.62
|
|
NYSE Composite
|
100.00
|
|
|
117.83
|
|
|
123.98
|
|
|
115.37
|
|
|
129.14
|
|
|
153.32
|
|
|
139.60
|
|
Old Peer Group
|
100.00
|
|
|
150.97
|
|
|
95.43
|
|
|
104.74
|
|
|
131.42
|
|
|
109.53
|
|
|
84.91
|
|
New Peer Group
|
100.00
|
|
|
117.76
|
|
|
95.25
|
|
|
81.81
|
|
|
120.38
|
|
|
132.73
|
|
|
106.30
|
|
ITEM 6.
|
SELECTED FINANCIAL DATA
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 8.
|
CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
ITEM 9.
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CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
ITEM 9A.
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CONTROLS AND PROCEDURES
|
ITEM 9B.
|
OTHER INFORMATION
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
ITEM 11.
|
EXECUTIVE COMPENSATION
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
ITEM 13.
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
ITEM 14.
|
PRINCIPAL ACCOUNTING FEES AND SERVICES
|
ITEM 15.
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EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
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(a)
|
1)
|
Consolidated Financial Statements filed as part of this report are listed in the Financial Table of Contents included in this report and incorporated by reference in this report in Part II, Item 7 “ Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Item 8, “Consolidated Financial Statements and Supplementary Data.”
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2)
|
All schedules for which provision is made in the applicable accounting regulations of the SEC are listed in this report in Part II, Item 8, “Consolidated Financial Statements and Supplementary Data.”
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3)
|
See exhibits listed under Part (b) below.
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(b)
|
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Exhibits
|
Exhibit
Number
|
|
Description
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|
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3.1
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|
|
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3.2
|
|
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3.3
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4.1
|
|
Certificate representing shares of common stock of Company (filed as Exhibit 4(1) to the Company’s Registration Statement on Form S-1, File No. 2-68928, incorporated by reference herein).
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4.2
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10.1†
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|
|
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10.2†
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10.3†
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10.4†
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10.5†
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10.6†
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10.7†
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10.8†
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10.9†
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10.10†
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10.11†
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|
|
Exhibit
Number
|
|
Description
|
10.12†
|
|
|
|
|
|
10.13
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|
|
|
|
|
10.14
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|
|
|
|
|
10.15
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|
|
|
|
|
10.16
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|
|
|
|
|
10.17
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|
|
|
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|
10.18
|
|
|
|
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|
10.19
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|
|
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10.20
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|
10.21 †
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10.22 †
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10.23 †
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|
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10.24 †
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|
|
|
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|
10.25 †
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|
|
|
|
|
10.26 †
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|
|
|
|
|
10.27 †
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|
|
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|
|
Exhibit
Number
|
|
Description
|
10.28 †
|
|
|
|
|
|
10.29
|
|
|
|
|
|
10.30
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|
|
|
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|
10.31 †
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|
|
|
|
|
10.32 †
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|
|
|
|
|
10.33 †
|
|
|
|
|
|
10.34 †
|
|
|
|
|
|
10.35 †
|
|
|
|
|
|
10.36 †
|
|
|
|
|
|
21
|
|
|
|
|
|
23.1
|
|
|
|
|
|
31.1
|
|
|
|
|
|
31.2
|
|
|
|
|
|
32.1
|
|
|
|
|
|
32.2
|
|
|
|
|
|
101.INS
|
|
XBRL Instance Document.
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Schema Document.
|
|
|
|
101.CAL
|
|
XBRL Calculation Linkbase Document.
|
|
|
|
101.DEF
|
|
XBRL Definition Linkbase Document.
|
|
|
|
101.LAB
|
|
XBRL Label Linkbase Document.
|
|
|
|
101.PRE
|
|
XBRL Presentation Linkbase Document.
|
†
|
Management contract or compensation plan or arrangement.
|
ITEM 16.
|
FORM 10-K SUMMARY
|
T
EAM
, I
NC
.
|
|
/S/
A
MERINO
G
ATTI
|
Amerino Gatti
|
Chief Executive Officer
|
(Principal Executive Officer)
|
/S/
A
MERINO
G
ATTI
|
|
Chief Executive Officer and Director (Principal Executive Officer)
|
March 19, 2019
|
(Amerino Gatti)
|
|
|
|
|
|
|
|
/
S
/ S
USAN
M. B
ALL
|
|
Executive Vice President, Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)
|
March 19, 2019
|
(Susan M. Ball)
|
|
|
|
|
|
|
|
/
S
/ J
EFFERY
G. D
AVIS
|
|
Director
|
March 19, 2019
|
(Jeffery G. Davis)
|
|
|
|
|
|
|
|
/
S
/ B
RIAN
K. F
ERRAIOLI
|
|
Director
|
March 19, 2019
|
(Brian K. Ferraioli)
|
|
|
|
|
|
|
|
/
S
/ S
YLVIA
J. K
ERRIGAN
|
|
Director
|
March 19, 2019
|
(Sylvia J. Kerrigan)
|
|
|
|
|
|
|
|
/
S
/ E
MMETT
J. L
ESCROART
|
|
Director
|
March 19, 2019
|
(Emmett J. Lescroart)
|
|
|
|
|
|
|
|
/
S
/ M
ICHAEL
A. L
UCAS
|
|
Director
|
March 19, 2019
|
(Michael A. Lucas)
|
|
|
|
|
|
|
|
/
S
/ C
RAIG
L. M
ARTIN
|
|
Director
|
March 19, 2019
|
(Craig L. Martin)
|
|
|
|
|
|
|
|
/
S
/ L
OUIS
A. W
ATERS
|
|
Chairman of the Board
|
March 19, 2019
|
(Louis A. Waters)
|
|
|
|
|
|
|
|
/
S
/ G
ARY
G. Y
ESAVAGE
|
|
Director
|
March 19, 2019
|
(Gary G. Yesavage)
|
|
|
|
|
|
|
|
|
Twelve Months Ended
December 31,
|
|
Increase
(Decrease)
|
|||||||||||
|
2018
|
|
2017
|
|
$
|
|
%
|
|||||||
|
|
|
|
|
|
|
|
|||||||
Revenues by business segment:
|
|
|
|
|
|
|
|
|||||||
IHT
|
$
|
617,378
|
|
|
$
|
588,441
|
|
|
$
|
28,937
|
|
|
4.9
|
%
|
MS
|
532,365
|
|
|
529,973
|
|
|
2,392
|
|
|
0.5
|
%
|
|||
Quest Integrity
|
97,186
|
|
|
81,797
|
|
|
15,389
|
|
|
18.8
|
%
|
|||
Total
|
$
|
1,246,929
|
|
|
$
|
1,200,211
|
|
|
$
|
46,718
|
|
|
3.9
|
%
|
|
|
|
|
|
|
|
|
|||||||
Operating income (loss):
|
|
|
|
|
|
|
|
|||||||
IHT
2
|
$
|
37,329
|
|
|
$
|
11,128
|
|
|
$
|
26,201
|
|
|
235.5
|
%
|
MS
2
|
6,323
|
|
|
(33,993
|
)
|
|
40,316
|
|
|
NM
1
|
|
|||
Quest Integrity
|
20,138
|
|
|
12,337
|
|
|
7,801
|
|
|
63.2
|
%
|
|||
Corporate and shared support services
|
(102,751
|
)
|
|
(104,582
|
)
|
|
1,831
|
|
|
1.8
|
%
|
|||
Total
|
$
|
(38,961
|
)
|
|
$
|
(115,110
|
)
|
|
$
|
76,149
|
|
|
66.2
|
%
|
1
|
For 2018, relates to restructuring costs incurred associated with the OneTEAM program. For 2017, primarily associated with the 2017 Cost Savings Initiative, net of a $1.1 million gain in MS associated with the disposal of Furmanite operations in Belgium. See Note 17 to the consolidated financial statements for additional information.
|
2
|
Severance/transition costs associated with certain executive leadership changes, as discussed above.
|
3
|
Consists primarily of professional fees and other costs for assessment of corporate and support cost structures, acquired business integration and intellectual property legal defense costs associated with Quest Integrity. For 2018, includes $15.5 million (exclusive of restructuring costs) associated with the OneTEAM program, which is discussed further below.
|
4
|
Primarily incremental costs incurred associated with hurricane-related impacts in 2017
|
|
Twelve Months Ended
December 31, |
|
Increase
(Decrease)
|
|||||||||||
|
2017
|
|
2016
|
|
$
|
|
%
|
|||||||
|
|
|
|
|
|
|
|
|||||||
Revenues by business segment:
|
|
|
|
|
|
|
|
|||||||
IHT
|
$
|
588,441
|
|
|
$
|
589,478
|
|
|
$
|
(1,037
|
)
|
|
(0.2
|
)%
|
MS
|
529,973
|
|
|
539,627
|
|
|
(9,654
|
)
|
|
(1.8
|
)%
|
|||
Quest Integrity
|
81,797
|
|
|
67,591
|
|
|
14,206
|
|
|
21.0
|
%
|
|||
Total
|
$
|
1,200,211
|
|
|
$
|
1,196,696
|
|
|
$
|
3,515
|
|
|
0.3
|
%
|
|
|
|
|
|
|
|
|
|||||||
Operating income (loss):
|
|
|
|
|
|
|
|
|||||||
IHT
2
|
$
|
11,128
|
|
|
$
|
43,367
|
|
|
$
|
(32,239
|
)
|
|
(74.3
|
)%
|
MS
2
|
(33,993
|
)
|
|
27,283
|
|
|
(61,276
|
)
|
|
NM
1
|
|
|||
Quest Integrity
|
12,337
|
|
|
4,780
|
|
|
7,557
|
|
|
158.1
|
%
|
|||
Corporate and shared support services
|
(104,582
|
)
|
|
(78,548
|
)
|
|
(26,034
|
)
|
|
(33.1
|
)%
|
|||
Total
|
$
|
(115,110
|
)
|
|
$
|
(3,118
|
)
|
|
$
|
(111,992
|
)
|
|
NM
1
|
|
1
|
Associated with the leadership change discussed above.
|
2
|
Primarily incremental costs incurred associated with hurricane-related impacts in 2017 and severe flooding in Louisiana in 2016
|
3
|
Consists primarily of professional fees for acquired business integration, intellectual property legal defense costs associated with Quest Integrity and non-cash compensation cost associated with acceleration of vesting of awards
|
4
|
Primarily associated with the acquisition of Furmanite in 2016
|
•
|
during any calendar quarter commencing after the calendar quarter ending on December 31, 2017 (and only during such calendar quarter), if the last reported sale price of our common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day;
|
•
|
during the five business day period after any five consecutive trading day period (the “measurement period”) in which the trading price per $1,000 principal amount of Notes for each trading day of such measurement period was less than 98% of the product of the last reported sale price of our common stock and the conversion rate on such trading day;
|
•
|
if we call any or all of the Notes for redemption, at any time prior to the close of business on the business day immediately preceding the redemption date; or;
|
•
|
upon the occurrence of specified corporate events described in the indenture governing the Notes.
|
|
Less than 1 year
|
|
1-3 years
|
|
3-5 years
|
|
More than 5 years
|
|
Total
|
||||||||||
Principal payments on Credit Facility and Convertible Senior Notes
|
$
|
—
|
|
|
$
|
156,843
|
|
|
$
|
230,000
|
|
|
$
|
—
|
|
|
$
|
386,843
|
|
Interest payments on Credit Facility and Convertible Senior Notes
1
|
19,408
|
|
|
27,062
|
|
|
23,000
|
|
|
—
|
|
|
69,470
|
|
|||||
Capital lease obligations
|
583
|
|
|
1,004
|
|
|
1,049
|
|
|
5,631
|
|
|
8,267
|
|
|||||
Operating lease obligations
|
23,315
|
|
|
29,435
|
|
|
17,719
|
|
|
23,224
|
|
|
93,693
|
|
|||||
Defined benefit pension plan contribution obligations
2
|
2,292
|
|
|
7,641
|
|
|
7,641
|
|
|
30,882
|
|
|
48,456
|
|
|||||
Total
|
$
|
45,598
|
|
|
$
|
221,985
|
|
|
$
|
279,409
|
|
|
$
|
59,737
|
|
|
$
|
606,729
|
|
1
|
While we cannot predict with certainty the amount of interest payments due to the expected variability of interest rates and principal amounts outstanding, we have provided estimated amounts of interest payments based on the following assumptions. With respect to our Credit Facility, the calculation includes estimated interest payments totaling $12 million over the remaining contractual period based on the outstanding principal balance and interest rates in effect as of December 31, 2018. With respect to the Notes, includes total interest payments of $57 million assuming that the Notes remain outstanding through the maturity date.
|
2
|
For the Company’s defined benefit pension plan covering certain United Kingdom employees (the “U.K. Plan”), as of December 31, 2018, the Company has committed to fund contributions of $2.3 million for 2019 and $3.8 million annually thereafter through January 2032 for a total funding commitment of up to approximately $48.5 million (undiscounted). Further, in any year in which specified operating performance levels are exceeded, we have committed to an additional contribution for that year, of up to approximately $1.2 million, depending on actual performance levels. Notwithstanding these commitments, the Company will make contributions to the U.K. Plan only to the extent necessary to eliminate the funding deficit. Accordingly, the aggregate amount of contributions ultimately made may be less than those noted above.
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Long-term liabilities per consolidated balance sheets:
|
|
|
|
||||
Long-term debt:
|
|
|
|
||||
Credit Facility
|
$
|
156,843
|
|
|
$
|
177,857
|
|
Convertible debt
|
195,184
|
|
|
209,892
|
|
||
Capital lease obligations
|
5,356
|
|
|
—
|
|
||
Current maturities
|
(569
|
)
|
|
—
|
|
||
Long-term debt, excluding current maturities
|
$
|
356,814
|
|
|
$
|
387,749
|
|
Defined benefit pension liability
|
$
|
10,940
|
|
|
$
|
14,976
|
|
Other long-term liabilities
|
$
|
6,910
|
|
|
$
|
9,758
|
|
|
|
|
|
||||
Other long-term obligations:
|
|
|
|
||||
Outstanding letters of credit
|
$
|
22,800
|
|
|
$
|
22,540
|
|
Operating leases
|
$
|
93,693
|
|
|
$
|
119,165
|
|
•
|
Revenue from Contracts with Customers
|
•
|
Goodwill and Intangible Assets
|
•
|
Income Taxes
|
•
|
Workers’ Compensation, Auto, Medical and General Liability Accruals
|
•
|
Allowance for Doubtful Accounts
|
|
Twelve Months Ended
December 31, 2018 |
||||||||||||||
|
IHT
|
|
MS
|
|
Quest Integrity
|
|
Total
|
||||||||
Balance at beginning of year
|
$
|
194,211
|
|
|
$
|
56,600
|
|
|
$
|
33,993
|
|
|
$
|
284,804
|
|
Foreign currency adjustments
|
(1,603
|
)
|
|
(712
|
)
|
|
(578
|
)
|
|
(2,893
|
)
|
||||
Disposal
|
—
|
|
|
(261
|
)
|
|
—
|
|
|
(261
|
)
|
||||
Balance at end of year
|
$
|
192,608
|
|
|
$
|
55,627
|
|
|
$
|
33,415
|
|
|
$
|
281,650
|
|
|
Twelve Months Ended
December 31, 2017 |
||||||||||||||
|
IHT
|
|
MS
|
|
Quest Integrity
|
|
Total
|
||||||||
Balance at beginning of period
|
$
|
213,475
|
|
|
$
|
109,059
|
|
|
$
|
33,252
|
|
|
$
|
355,786
|
|
Foreign currency adjustments
|
1,876
|
|
|
1,642
|
|
|
741
|
|
|
4,259
|
|
||||
Impairment loss
|
(21,140
|
)
|
|
(54,101
|
)
|
|
—
|
|
|
(75,241
|
)
|
||||
Balance at end of period
|
$
|
194,211
|
|
|
$
|
56,600
|
|
|
$
|
33,993
|
|
|
$
|
284,804
|
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
18,288
|
|
|
$
|
26,552
|
|
Receivables, net of allowance of $15,182 and $11,308
|
268,352
|
|
|
301,963
|
|
||
Inventory
|
48,540
|
|
|
49,703
|
|
||
Income tax receivable
|
331
|
|
|
892
|
|
||
Prepaid expenses and other current assets
|
19,445
|
|
|
17,950
|
|
||
Total current assets
|
354,956
|
|
|
397,060
|
|
||
Property, plant and equipment, net
|
194,794
|
|
|
203,219
|
|
||
Intangible assets, net of accumulated amortization of $82,406 and $54,184
|
131,372
|
|
|
160,161
|
|
||
Goodwill
|
281,650
|
|
|
284,804
|
|
||
Other assets, net
|
7,397
|
|
|
5,798
|
|
||
Deferred income taxes
|
7,652
|
|
|
4,793
|
|
||
Total assets
|
$
|
977,821
|
|
|
$
|
1,055,835
|
|
LIABILITIES AND EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Current portion of long-term debt and capital lease obligations
|
$
|
569
|
|
|
$
|
—
|
|
Accounts payable
|
44,074
|
|
|
55,312
|
|
||
Other accrued liabilities
|
95,308
|
|
|
92,472
|
|
||
Total current liabilities
|
139,951
|
|
|
147,784
|
|
||
Deferred income taxes
|
6,106
|
|
|
18,394
|
|
||
Long-term debt and capital lease obligations
|
356,814
|
|
|
387,749
|
|
||
Defined benefit pension liability
|
10,940
|
|
|
14,976
|
|
||
Other long-term liabilities
|
6,910
|
|
|
9,758
|
|
||
Total liabilities
|
520,721
|
|
|
578,661
|
|
||
Commitments and contingencies
|
|
|
|
||||
Equity:
|
|
|
|
||||
Preferred stock, 500,000 shares authorized, none issued
|
—
|
|
|
—
|
|
||
Common stock, par value $0.30 per share, 60,000,000 shares authorized; 30,184,330 and 29,953,041 shares issued
|
9,053
|
|
|
8,984
|
|
||
Additional paid-in capital
|
400,989
|
|
|
352,500
|
|
||
Retained earnings
|
81,450
|
|
|
135,486
|
|
||
Accumulated other comprehensive loss
|
(34,392
|
)
|
|
(19,796
|
)
|
||
Total equity
|
457,100
|
|
|
477,174
|
|
||
Total liabilities and equity
|
$
|
977,821
|
|
|
$
|
1,055,835
|
|
|
Twelve Months Ended
December 31, |
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Revenues
|
$
|
1,246,929
|
|
|
$
|
1,200,211
|
|
|
$
|
1,196,696
|
|
Operating expenses
|
918,673
|
|
|
890,212
|
|
|
868,144
|
|
|||
Gross margin
|
328,256
|
|
|
309,999
|
|
|
328,552
|
|
|||
Selling, general and administrative expenses
|
360,692
|
|
|
348,391
|
|
|
323,973
|
|
|||
Restructuring and other related charges, net (see Note 17)
|
6,727
|
|
|
2,651
|
|
|
5,513
|
|
|||
(Gain) loss on revaluation of contingent consideration
|
(202
|
)
|
|
(1,174
|
)
|
|
2,184
|
|
|||
Goodwill impairment loss (see Note 1)
|
—
|
|
|
75,241
|
|
|
—
|
|
|||
Operating loss
|
(38,961
|
)
|
|
(115,110
|
)
|
|
(3,118
|
)
|
|||
Interest expense, net
|
30,875
|
|
|
21,487
|
|
|
12,667
|
|
|||
Write-off of deferred loan costs
|
—
|
|
|
1,244
|
|
|
—
|
|
|||
Loss (gain) on convertible debt embedded derivative (see Note 10)
|
24,783
|
|
|
(818
|
)
|
|
—
|
|
|||
Other (income) expense, net
|
(410
|
)
|
|
510
|
|
|
(127
|
)
|
|||
Loss from continuing operations before income taxes
|
(94,209
|
)
|
|
(137,533
|
)
|
|
(15,658
|
)
|
|||
Less: Benefit for income taxes (see Note 9)
|
(31,063
|
)
|
|
(53,078
|
)
|
|
(3,093
|
)
|
|||
Loss from continuing operations
|
(63,146
|
)
|
|
(84,455
|
)
|
|
(12,565
|
)
|
|||
Loss from discontinued operations, net of income tax
|
—
|
|
|
—
|
|
|
(111
|
)
|
|||
Net loss
|
$
|
(63,146
|
)
|
|
$
|
(84,455
|
)
|
|
$
|
(12,676
|
)
|
|
|
|
|
|
|
||||||
Basic loss per common share:
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
(2.10
|
)
|
|
$
|
(2.83
|
)
|
|
$
|
(0.45
|
)
|
Discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net loss
|
$
|
(2.10
|
)
|
|
$
|
(2.83
|
)
|
|
$
|
(0.45
|
)
|
|
|
|
|
|
|
||||||
Diluted loss per common share:
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
(2.10
|
)
|
|
$
|
(2.83
|
)
|
|
$
|
(0.45
|
)
|
Discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net loss
|
$
|
(2.10
|
)
|
|
$
|
(2.83
|
)
|
|
$
|
(0.45
|
)
|
|
|
|
|
|
|
|
Twelve Months Ended
December 31, |
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Net loss
|
$
|
(63,146
|
)
|
|
$
|
(84,455
|
)
|
|
$
|
(12,676
|
)
|
Other comprehensive income (loss) before tax:
|
|
|
|
|
|
||||||
Foreign currency translation adjustment
|
(9,241
|
)
|
|
10,607
|
|
|
(3,849
|
)
|
|||
Foreign currency hedge
|
658
|
|
|
(1,802
|
)
|
|
481
|
|
|||
Defined benefit pension plans:
|
|
|
|
|
|
||||||
Net actuarial gain (loss) arising during period
|
109
|
|
|
3,226
|
|
|
(10,518
|
)
|
|||
Prior service cost arising during period
|
(669
|
)
|
|
—
|
|
|
—
|
|
|||
Amortization of net actuarial (gain) loss
|
(78
|
)
|
|
71
|
|
|
—
|
|
|||
Other comprehensive income (loss), before tax
|
(9,221
|
)
|
|
12,102
|
|
|
(13,886
|
)
|
|||
Tax (provision) benefit attributable to other comprehensive income (loss)
|
(3,045
|
)
|
|
(2,898
|
)
|
|
3,260
|
|
|||
Other comprehensive income (loss), net of tax
|
(12,266
|
)
|
|
9,204
|
|
|
(10,626
|
)
|
|||
Total comprehensive loss
|
$
|
(75,412
|
)
|
|
$
|
(75,251
|
)
|
|
$
|
(23,302
|
)
|
|
Common
Shares
|
|
Treasury
Shares
|
|
Common
Stock
|
|
Treasury
Stock
|
|
Additional
Paid-in
Capital
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Total
Shareholders’
Equity
|
||||||||||||||
Balance at January 1, 2016
|
21,837
|
|
|
(547
|
)
|
|
$
|
6,552
|
|
|
$
|
(21,138
|
)
|
|
$
|
120,126
|
|
|
$
|
250,980
|
|
|
$
|
(18,374
|
)
|
|
$
|
338,146
|
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12,676
|
)
|
|
—
|
|
|
(12,676
|
)
|
||||||
Foreign currency translation adjustment, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,498
|
)
|
|
(2,498
|
)
|
||||||
Foreign currency hedge, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
300
|
|
|
300
|
|
||||||
Defined benefit pension plans, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,428
|
)
|
|
(8,428
|
)
|
||||||
Non-cash compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,313
|
|
|
—
|
|
|
—
|
|
|
7,313
|
|
||||||
Vesting of stock awards
|
142
|
|
|
—
|
|
|
40
|
|
|
—
|
|
|
(1,749
|
)
|
|
—
|
|
|
—
|
|
|
(1,709
|
)
|
||||||
Tax effect of share-based payment arrangements
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(535
|
)
|
|
—
|
|
|
—
|
|
|
(535
|
)
|
||||||
Issuance of common stock in Furmanite acquisition and conversion of Furmanite share-based awards
|
8,208
|
|
|
—
|
|
|
2,462
|
|
|
—
|
|
|
209,068
|
|
|
—
|
|
|
—
|
|
|
211,530
|
|
||||||
Exercise of stock options
|
251
|
|
|
—
|
|
|
75
|
|
|
—
|
|
|
5,828
|
|
|
—
|
|
|
—
|
|
|
5,903
|
|
||||||
Issuance of common stock
|
168
|
|
|
—
|
|
|
50
|
|
|
—
|
|
|
5,884
|
|
|
—
|
|
|
—
|
|
|
5,934
|
|
||||||
Purchase of treasury stock
|
—
|
|
|
(274
|
)
|
|
—
|
|
|
(7,593
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,593
|
)
|
||||||
Retirement of treasury stock
|
(821
|
)
|
|
821
|
|
|
(245
|
)
|
|
28,731
|
|
|
(9,129
|
)
|
|
(19,357
|
)
|
|
—
|
|
|
—
|
|
||||||
Other
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(50
|
)
|
|
—
|
|
|
—
|
|
|
(50
|
)
|
|||||||
Balance at December 31, 2016
|
29,785
|
|
|
—
|
|
|
8,934
|
|
|
—
|
|
|
336,756
|
|
|
218,947
|
|
|
(29,000
|
)
|
|
535,637
|
|
||||||
Adoption of new accounting principle
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
994
|
|
|
—
|
|
|
994
|
|
||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(84,455
|
)
|
|
—
|
|
|
(84,455
|
)
|
||||||
Foreign currency translation adjustment, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,688
|
|
|
7,688
|
|
||||||
Foreign currency hedge, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,114
|
)
|
|
(1,114
|
)
|
||||||
Defined benefit pension plans, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,630
|
|
|
2,630
|
|
||||||
Issuance of convertible debt, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,415
|
|
|
—
|
|
|
—
|
|
|
8,415
|
|
||||||
Non-cash compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,876
|
|
|
—
|
|
|
—
|
|
|
7,876
|
|
||||||
Vesting of stock awards
|
152
|
|
|
—
|
|
|
45
|
|
|
—
|
|
|
(992
|
)
|
|
—
|
|
|
—
|
|
|
(947
|
)
|
||||||
Exercise of stock options
|
16
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
445
|
|
|
—
|
|
|
—
|
|
|
450
|
|
||||||
Balance at December 31, 2017
|
29,953
|
|
|
—
|
|
|
8,984
|
|
|
—
|
|
|
352,500
|
|
|
135,486
|
|
|
(19,796
|
)
|
|
477,174
|
|
||||||
Adoption of new accounting principles
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,110
|
|
|
(2,330
|
)
|
|
6,780
|
|
||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(63,146
|
)
|
|
—
|
|
|
(63,146
|
)
|
||||||
Foreign currency translation adjustment, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12,164
|
)
|
|
(12,164
|
)
|
||||||
Foreign currency hedge, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
496
|
|
|
496
|
|
||||||
Defined benefit pension plans, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(598
|
)
|
|
(598
|
)
|
||||||
Reclassification of convertible debt embedded derivative, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
37,698
|
|
|
—
|
|
|
—
|
|
|
37,698
|
|
||||||
Non-cash compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,256
|
|
|
—
|
|
|
—
|
|
|
12,256
|
|
||||||
Vesting of stock awards
|
231
|
|
|
—
|
|
|
69
|
|
|
—
|
|
|
(1,465
|
)
|
|
—
|
|
|
—
|
|
|
(1,396
|
)
|
||||||
Balance at December 31, 2018
|
30,184
|
|
|
—
|
|
|
$
|
9,053
|
|
|
$
|
—
|
|
|
$
|
400,989
|
|
|
$
|
81,450
|
|
|
$
|
(34,392
|
)
|
|
$
|
457,100
|
|
|
Twelve Months Ended
December 31, |
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net loss
|
$
|
(63,146
|
)
|
|
$
|
(84,455
|
)
|
|
$
|
(12,676
|
)
|
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
64,862
|
|
|
52,143
|
|
|
48,673
|
|
|||
Write-off of deferred loan costs
|
—
|
|
|
1,244
|
|
|
—
|
|
|||
Amortization of deferred loan costs and debt discount
|
7,022
|
|
|
3,085
|
|
|
541
|
|
|||
Provision for doubtful accounts
|
11,662
|
|
|
7,097
|
|
|
6,336
|
|
|||
Foreign currency loss (gain)
|
1,712
|
|
|
499
|
|
|
(93
|
)
|
|||
Deferred income taxes
|
(31,734
|
)
|
|
(66,246
|
)
|
|
(4,236
|
)
|
|||
(Gain) loss on revaluation of contingent consideration
|
(202
|
)
|
|
(1,174
|
)
|
|
2,184
|
|
|||
(Gain) loss on asset disposal
|
(552
|
)
|
|
553
|
|
|
1,540
|
|
|||
Loss (gain) on convertible debt embedded derivative
|
24,783
|
|
|
(818
|
)
|
|
—
|
|
|||
Goodwill impairment loss
|
—
|
|
|
75,241
|
|
|
—
|
|
|||
Non-cash compensation cost
|
12,256
|
|
|
7,876
|
|
|
7,313
|
|
|||
Other, net
|
(3,762
|
)
|
|
(3,789
|
)
|
|
(1,182
|
)
|
|||
(Increase) decrease (net of the effects of acquisitions):
|
|
|
|
|
|
||||||
Receivables
|
15,386
|
|
|
(39,820
|
)
|
|
16,518
|
|
|||
Inventory
|
(21
|
)
|
|
614
|
|
|
2,119
|
|
|||
Prepaid expenses and other current assets
|
6,933
|
|
|
6,642
|
|
|
(163
|
)
|
|||
Increase (decrease) (net of the effects of acquisitions):
|
|
|
|
|
|
||||||
Accounts payable
|
(8,994
|
)
|
|
6,424
|
|
|
8,361
|
|
|||
Other accrued liabilities
|
9,168
|
|
|
14,896
|
|
|
(2,346
|
)
|
|||
Income taxes
|
(3,514
|
)
|
|
6,260
|
|
|
6,675
|
|
|||
Net cash provided by (used) in operating activities
|
41,859
|
|
|
(13,728
|
)
|
|
79,564
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Capital expenditures
|
(27,164
|
)
|
|
(36,798
|
)
|
|
(45,812
|
)
|
|||
Net proceeds from sale of discontinued operations
|
—
|
|
|
—
|
|
|
13,295
|
|
|||
Business acquisitions, net of cash acquired
|
—
|
|
|
—
|
|
|
(48,382
|
)
|
|||
Proceeds from disposal of assets
|
2,580
|
|
|
3,259
|
|
|
4,232
|
|
|||
Other
|
(443
|
)
|
|
(457
|
)
|
|
827
|
|
|||
Net cash used in investing activities
|
(25,027
|
)
|
|
(33,996
|
)
|
|
(75,840
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Net (payments) borrowings under revolving credit agreement
|
(19,690
|
)
|
|
(23,006
|
)
|
|
15,996
|
|
|||
Payments under term loan
|
—
|
|
|
(170,000
|
)
|
|
(20,000
|
)
|
|||
Issuance of convertible debt, net of issuance costs
|
—
|
|
|
222,311
|
|
|
—
|
|
|||
Deferred consideration payments
|
—
|
|
|
—
|
|
|
(694
|
)
|
|||
Contingent consideration payments
|
(1,106
|
)
|
|
(1,278
|
)
|
|
(1,816
|
)
|
|||
Purchase of treasury stock
|
—
|
|
|
—
|
|
|
(7,593
|
)
|
|||
Debt issuance costs on Credit Facility
|
(855
|
)
|
|
(1,938
|
)
|
|
(801
|
)
|
|||
Corporate tax effect from share-based payment arrangements
|
—
|
|
|
—
|
|
|
(535
|
)
|
|||
Exercise of stock options
|
—
|
|
|
450
|
|
|
5,903
|
|
|||
Issuance of common stock, net of issuance costs
|
—
|
|
|
—
|
|
|
5,243
|
|
|||
Payments related to withholding tax for share-based payment arrangements
|
(1,390
|
)
|
|
(947
|
)
|
|
(1,709
|
)
|
|||
Net cash (used in) provided by financing activities
|
(23,041
|
)
|
|
25,592
|
|
|
(6,006
|
)
|
|||
Effect of exchange rate changes on cash
|
(2,055
|
)
|
|
2,468
|
|
|
(1,327
|
)
|
|||
Net decrease in cash and cash equivalents
|
(8,264
|
)
|
|
(19,664
|
)
|
|
(3,609
|
)
|
|||
Cash and cash equivalents at beginning of period
|
26,552
|
|
|
46,216
|
|
|
49,825
|
|
|||
Cash and cash equivalents at end of period
|
$
|
18,288
|
|
|
$
|
26,552
|
|
|
$
|
46,216
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
||||||
Cash paid (refunded) during the year for:
|
|
|
|
|
|
||||||
Interest
|
$
|
24,924
|
|
|
$
|
13,176
|
|
|
$
|
12,207
|
|
Income taxes
|
$
|
2,720
|
|
|
$
|
5,719
|
|
|
$
|
(2,741
|
)
|
Classification
|
Useful Life
|
|
Buildings
|
|
20-40 years
|
Enterprise Resource Planning (“ERP”) System
|
|
15 years
|
Leasehold improvements
|
|
2-15 years
|
Machinery and equipment
|
|
2-12 years
|
Furniture and fixtures
|
|
2-10 years
|
Computers and computer software
|
|
2-5 years
|
Automobiles
|
|
2-5 years
|
|
Twelve Months Ended
December 31, 2018 |
||||||||||||||
|
IHT
|
|
MS
|
|
Quest Integrity
|
|
Total
|
||||||||
Balance at beginning of period
|
$
|
194,211
|
|
|
$
|
56,600
|
|
|
$
|
33,993
|
|
|
$
|
284,804
|
|
Foreign currency adjustments
|
(1,603
|
)
|
|
(712
|
)
|
|
(578
|
)
|
|
(2,893
|
)
|
||||
Disposal
|
—
|
|
|
(261
|
)
|
|
—
|
|
|
(261
|
)
|
||||
Balance at end of period
|
$
|
192,608
|
|
|
$
|
55,627
|
|
|
$
|
33,415
|
|
|
$
|
281,650
|
|
|
Twelve Months Ended
December 31, 2017 |
||||||||||||||
|
IHT
|
|
MS
|
|
Quest Integrity
|
|
Total
|
||||||||
Balance at beginning of year
|
$
|
213,475
|
|
|
$
|
109,059
|
|
|
$
|
33,252
|
|
|
$
|
355,786
|
|
Foreign currency adjustments
|
1,876
|
|
|
1,642
|
|
|
741
|
|
|
4,259
|
|
||||
Impairment loss
|
(21,140
|
)
|
|
(54,101
|
)
|
|
—
|
|
|
(75,241
|
)
|
||||
Balance at end of year
|
$
|
194,211
|
|
|
$
|
56,600
|
|
|
$
|
33,993
|
|
|
$
|
284,804
|
|
|
Twelve Months Ended
December 31, |
|||||||
|
2018
|
|
2017
|
|
2016
|
|||
Weighted-average number of basic shares outstanding
|
30,031
|
|
|
29,849
|
|
|
28,095
|
|
Stock options, stock units and performance awards
|
—
|
|
|
—
|
|
|
—
|
|
Convertible senior notes
|
—
|
|
|
—
|
|
|
—
|
|
Total shares and dilutive securities
|
30,031
|
|
|
29,849
|
|
|
28,095
|
|
|
Twelve Months Ended
December 31, |
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Property acquired under capital lease
|
$
|
5,302
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Note received as consideration in disposal of discontinued operations
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,511
|
|
Issuance of common stock - Furmanite acquisition
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
209,529
|
|
|
|
December 31, 2017
|
||||||||||
|
|
As Previously Reported
|
|
Adjustments
|
|
As Revised
|
||||||
Effect on consolidated balance sheet
|
|
|
|
|
|
|
||||||
Liabilities and Equity
|
|
|
|
|
|
|
||||||
Deferred income taxes
|
|
$
|
38,100
|
|
|
$
|
(19,706
|
)
|
|
$
|
18,394
|
|
Total Liabilities
|
|
$
|
598,367
|
|
|
$
|
(19,706
|
)
|
|
$
|
578,661
|
|
Retained earnings
|
|
$
|
115,780
|
|
|
$
|
19,706
|
|
|
$
|
135,486
|
|
Total equity
|
|
$
|
457,468
|
|
|
$
|
19,706
|
|
|
$
|
477,174
|
|
|
|
|
|
|
|
|
||||||
|
|
Twelve Months Ended December 31, 2017
|
||||||||||
|
|
As Previously Reported
|
|
Adjustments
|
|
As Revised
|
||||||
Effect on consolidated statement of operations
|
|
|
|
|
|
|
||||||
Benefit for income taxes
|
|
$
|
(33,372
|
)
|
|
$
|
(19,706
|
)
|
|
$
|
(53,078
|
)
|
Loss from continuing operations
|
|
$
|
(104,161
|
)
|
|
$
|
19,706
|
|
|
$
|
(84,455
|
)
|
Net loss
|
|
$
|
(104,161
|
)
|
|
$
|
19,706
|
|
|
$
|
(84,455
|
)
|
|
|
|
|
|
|
|
||||||
Basic loss per common share:
|
|
|
|
|
|
|
||||||
Continuing operations
|
|
$
|
(3.49
|
)
|
|
0.66
|
|
|
$
|
(2.83
|
)
|
|
Net loss
|
|
$
|
(3.49
|
)
|
|
0.66
|
|
|
$
|
(2.83
|
)
|
|
|
|
|
|
|
|
|
||||||
Diluted loss per common share:
|
|
|
|
|
|
|
||||||
Continuing operations
|
|
$
|
(3.49
|
)
|
|
0.66
|
|
|
$
|
(2.83
|
)
|
|
Net loss
|
|
$
|
(3.49
|
)
|
|
0.66
|
|
|
$
|
(2.83
|
)
|
|
|
December 31, 2018
|
||||||||||
|
|
Without adoption of ASC 606
|
|
Adjustments to apply ASC 606
|
|
As reported
|
||||||
Effect on consolidated balance sheet
|
|
|
|
|
|
|
||||||
Assets
|
|
|
|
|
|
|
||||||
Prepaid expenses and other current assets
|
|
$
|
16,321
|
|
|
$
|
3,124
|
|
|
$
|
19,445
|
|
|
|
|
|
|
|
|
||||||
Liabilities and Equity
|
|
|
|
|
|
|
||||||
Deferred income taxes
|
|
$
|
5,494
|
|
|
$
|
612
|
|
|
$
|
6,106
|
|
Retained earnings
|
|
$
|
78,938
|
|
|
$
|
2,512
|
|
|
$
|
81,450
|
|
|
|
Twelve Months Ended December 31, 2018
|
||||||||||
|
|
Without adoption of ASC 606
|
|
Adjustments to apply ASC 606
|
|
As reported
|
||||||
Effect on consolidated statement of operations
|
|
|
|
|
|
|
||||||
Revenues
|
|
$
|
1,251,694
|
|
|
$
|
(4,765
|
)
|
|
$
|
1,246,929
|
|
Operating expenses
|
|
$
|
917,768
|
|
|
$
|
905
|
|
|
$
|
918,673
|
|
Benefit for income taxes
|
|
$
|
(29,660
|
)
|
|
$
|
(1,403
|
)
|
|
$
|
(31,063
|
)
|
Net loss
|
|
$
|
(58,879
|
)
|
|
$
|
(4,267
|
)
|
|
$
|
(63,146
|
)
|
|
Twelve Months Ended December 31, 2018
|
||||||||||
|
United States and Canada
|
|
Other Countries
|
|
Total
|
||||||
Revenue:
|
|
|
|
|
|
||||||
IHT
|
$
|
602,615
|
|
|
$
|
14,763
|
|
|
$
|
617,378
|
|
MS
|
383,405
|
|
|
148,960
|
|
|
532,365
|
|
|||
Quest Integrity
|
62,262
|
|
|
34,924
|
|
|
97,186
|
|
|||
Total
|
$
|
1,048,282
|
|
|
$
|
198,647
|
|
|
$
|
1,246,929
|
|
|
Twelve Months Ended December 31, 2018
|
||||||||||||||||||||||
|
Asset Integrity Management
|
|
Repair and Maintenance Services
|
|
Heat Treating
|
|
Non-Destructive Evaluation
|
|
Other
|
|
Total
|
||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
IHT
|
$
|
46,726
|
|
|
$
|
27,420
|
|
|
$
|
80,840
|
|
|
$
|
447,080
|
|
|
$
|
15,312
|
|
|
$
|
617,378
|
|
MS
|
402
|
|
|
523,701
|
|
|
2,753
|
|
|
—
|
|
|
5,509
|
|
|
532,365
|
|
||||||
Quest Integrity
|
97,186
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
97,186
|
|
||||||
Total
|
$
|
144,314
|
|
|
$
|
551,121
|
|
|
$
|
83,593
|
|
|
$
|
447,080
|
|
|
$
|
20,821
|
|
|
$
|
1,246,929
|
|
|
December 31, 2018
|
|
January 1, 2018
|
||||
Trade accounts receivable, net
1
|
$
|
268,352
|
|
|
$
|
301,963
|
|
Contract assets
2
|
$
|
5,745
|
|
|
$
|
9,823
|
|
Contract liabilities
3
|
$
|
1,784
|
|
|
$
|
5,415
|
|
|
February 29, 2016
|
||
Common stock (8,208,006 shares)
|
$
|
209,529
|
|
Converted share-based payment awards
|
2,001
|
|
|
Cash
|
70,811
|
|
|
Total consideration
|
$
|
282,341
|
|
|
February 29, 2016
|
||
Cash and cash equivalents
|
$
|
37,734
|
|
Accounts receivable
|
65,925
|
|
|
Inventory
|
25,847
|
|
|
Current deferred tax assets
|
19,857
|
|
|
Prepaid expenses and other current assets
|
23,044
|
|
|
Current assets of discontinued operations
|
18,623
|
|
|
Property, plant and equipment
|
63,259
|
|
|
Intangible assets
|
88,958
|
|
|
Goodwill
|
89,646
|
|
|
Other non-current assets
|
687
|
|
|
Non-current deferred tax assets
|
2,542
|
|
|
Total assets acquired
|
436,122
|
|
|
|
|
||
Accounts payable
|
12,359
|
|
|
Other accrued liabilities
|
33,127
|
|
|
Income taxes payable
|
229
|
|
|
Current liabilities of discontinued operations
|
1,434
|
|
|
Non-current deferred tax liabilities
|
91,431
|
|
|
Defined benefit pension liability
|
13,509
|
|
|
Other long-term liabilities
|
1,692
|
|
|
Total liabilities assumed
|
153,781
|
|
|
Net assets acquired
|
$
|
282,341
|
|
|
Pro forma data
|
||
|
Year Ended
December 31, |
||
|
2016
|
||
|
(unaudited)
|
||
Revenues
|
$
|
1,240,466
|
|
Income (loss) from continuing operations attributable to Team shareholders
|
$
|
(7,497
|
)
|
Earnings (loss) per share from continuing operations:
|
|
||
Basic
|
$
|
(0.25
|
)
|
Diluted
|
$
|
(0.25
|
)
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Trade accounts receivable
|
$
|
207,266
|
|
|
$
|
244,133
|
|
Unbilled revenues
|
76,268
|
|
|
69,138
|
|
||
Allowance for doubtful accounts
|
(15,182
|
)
|
|
(11,308
|
)
|
||
Total
|
$
|
268,352
|
|
|
$
|
301,963
|
|
|
Twelve Months Ended
December 31, |
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Balance at beginning of period
|
$
|
11,308
|
|
|
$
|
7,835
|
|
|
$
|
3,548
|
|
Provision for doubtful accounts
|
11,662
|
|
|
7,097
|
|
|
6,336
|
|
|||
Write-off of bad debts
|
(7,788
|
)
|
|
(3,624
|
)
|
|
(2,049
|
)
|
|||
Balance at end of period
|
$
|
15,182
|
|
|
$
|
11,308
|
|
|
$
|
7,835
|
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Land
|
$
|
6,376
|
|
|
$
|
6,698
|
|
Buildings and leasehold improvements
|
57,006
|
|
|
47,924
|
|
||
Machinery and equipment
|
269,084
|
|
|
261,343
|
|
||
Furniture and fixtures
|
10,253
|
|
|
9,405
|
|
||
Capitalized ERP system development costs
|
46,637
|
|
|
46,637
|
|
||
Computers and computer software
|
15,826
|
|
|
13,052
|
|
||
Automobiles
|
4,879
|
|
|
5,070
|
|
||
Construction in progress
|
6,550
|
|
|
12,613
|
|
||
Total
|
416,611
|
|
|
402,742
|
|
||
Accumulated depreciation and amortization
|
(221,817
|
)
|
|
(199,523
|
)
|
||
Property, plant, and equipment, net
|
$
|
194,794
|
|
|
$
|
203,219
|
|
|
December 31, 2018
|
||||||||||
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
||||||
Customer relationships
|
$
|
174,894
|
|
|
$
|
(51,160
|
)
|
|
$
|
123,734
|
|
Non-compete agreements
|
5,433
|
|
|
(4,882
|
)
|
|
551
|
|
|||
Trade names
|
24,753
|
|
|
(20,594
|
)
|
|
4,159
|
|
|||
Technology
|
7,847
|
|
|
(5,187
|
)
|
|
2,660
|
|
|||
Licenses
|
851
|
|
|
(583
|
)
|
|
268
|
|
|||
Total
|
$
|
213,778
|
|
|
$
|
(82,406
|
)
|
|
$
|
131,372
|
|
|
December 31, 2017
|
||||||||||
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
|||||||
Customer relationships
|
$
|
175,226
|
|
|
$
|
(38,712
|
)
|
|
$
|
136,514
|
|
Non-compete agreements
|
5,563
|
|
|
(4,509
|
)
|
|
1,054
|
|
|||
Trade names
|
24,830
|
|
|
(6,211
|
)
|
|
18,619
|
|
|||
Technology
|
7,867
|
|
|
(4,292
|
)
|
|
3,575
|
|
|||
Licenses
|
859
|
|
|
(460
|
)
|
|
399
|
|
|||
Total
|
$
|
214,345
|
|
|
$
|
(54,184
|
)
|
|
$
|
160,161
|
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Payroll and other compensation expenses
|
$
|
47,988
|
|
|
$
|
40,988
|
|
Insurance accruals
|
16,001
|
|
|
15,799
|
|
||
Property, sales and other non-income related taxes
|
7,271
|
|
|
6,483
|
|
||
Lease commitments
|
1,145
|
|
|
1,616
|
|
||
Contract liabilities
|
1,784
|
|
|
6,102
|
|
||
Accrued commission
|
2,290
|
|
|
1,473
|
|
||
Accrued interest
|
5,261
|
|
|
5,950
|
|
||
Volume discount
|
4,322
|
|
|
1,545
|
|
||
Contingent consideration
|
429
|
|
|
1,246
|
|
||
Professional fees
|
1,219
|
|
|
1,098
|
|
||
Other
|
7,598
|
|
|
10,172
|
|
||
Total
|
$
|
95,308
|
|
|
$
|
92,472
|
|
|
Current
|
|
Deferred
|
|
Total
|
||||||
Twelve months ended December 31, 2018:
|
|
|
|
|
|
||||||
U.S. Federal
|
$
|
(3,295
|
)
|
|
$
|
(27,670
|
)
|
|
$
|
(30,965
|
)
|
State & local
|
509
|
|
|
(2,360
|
)
|
|
(1,851
|
)
|
|||
Foreign jurisdictions
|
3,457
|
|
|
(1,704
|
)
|
|
1,753
|
|
|||
|
$
|
671
|
|
|
$
|
(31,734
|
)
|
|
$
|
(31,063
|
)
|
Twelve months ended December 31, 2017:
|
|
|
|
|
|
||||||
U.S. Federal
|
$
|
6,177
|
|
|
$
|
(62,222
|
)
|
|
$
|
(56,045
|
)
|
State & local
|
170
|
|
|
(4,819
|
)
|
|
(4,649
|
)
|
|||
Foreign jurisdictions
|
6,821
|
|
|
795
|
|
|
7,616
|
|
|||
|
$
|
13,168
|
|
|
$
|
(66,246
|
)
|
|
$
|
(53,078
|
)
|
Twelve months ended December 31, 2016:
|
|
|
|
|
|
||||||
U.S. Federal
|
$
|
(2,048
|
)
|
|
$
|
(5,262
|
)
|
|
$
|
(7,310
|
)
|
State & local
|
(1,338
|
)
|
|
206
|
|
|
(1,132
|
)
|
|||
Foreign jurisdictions
|
4,529
|
|
|
820
|
|
|
5,349
|
|
|||
|
$
|
1,143
|
|
|
$
|
(4,236
|
)
|
|
$
|
(3,093
|
)
|
|
Twelve Months Ended
December 31, |
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Pre-tax loss from continuing operations
|
$
|
(94,209
|
)
|
|
$
|
(137,533
|
)
|
|
$
|
(15,658
|
)
|
Computed income taxes at statutory rate
|
(19,784
|
)
|
|
(48,136
|
)
|
|
(5,481
|
)
|
|||
State income taxes, net of federal benefit
|
(2,360
|
)
|
|
(4,709
|
)
|
|
(713
|
)
|
|||
Foreign tax rate differential
|
(52
|
)
|
|
(642
|
)
|
|
(707
|
)
|
|||
Deferred taxes on investment in foreign subsidiaries
|
(7,284
|
)
|
|
(17,079
|
)
|
|
1,777
|
|
|||
Non-deductible expenses
|
686
|
|
|
1,030
|
|
|
871
|
|
|||
Foreign tax credits
|
—
|
|
|
(17,445
|
)
|
|
(2,302
|
)
|
|||
Other tax credits
|
(1,995
|
)
|
|
(631
|
)
|
|
(1,033
|
)
|
|||
Deemed repatriation tax
|
(1,751
|
)
|
|
24,374
|
|
|
—
|
|
|||
Goodwill impairment
|
—
|
|
|
19,442
|
|
|
—
|
|
|||
Dividend from foreign subsidiaries
|
—
|
|
|
—
|
|
|
2,021
|
|
|||
Valuation allowance
|
2,923
|
|
|
1,249
|
|
|
1,986
|
|
|||
Rate change
|
81
|
|
|
(17,360
|
)
|
|
—
|
|
|||
Other
|
(1,527
|
)
|
|
6,829
|
|
|
488
|
|
|||
Total benefit for income tax on continuing operations
|
$
|
(31,063
|
)
|
|
$
|
(53,078
|
)
|
|
$
|
(3,093
|
)
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Deferred tax assets:
|
|
|
|
||||
Accrued compensation and benefits
|
$
|
10,463
|
|
|
$
|
9,810
|
|
Receivables
|
3,096
|
|
|
2,381
|
|
||
Inventory
|
422
|
|
|
873
|
|
||
Stock options
|
1,101
|
|
|
738
|
|
||
Foreign currency translation and other equity adjustments
|
—
|
|
|
2,945
|
|
||
Other accrued liabilities
|
2,058
|
|
|
3,066
|
|
||
Tax credit carry forward
|
1,920
|
|
|
2,588
|
|
||
Net operating loss carry forwards
|
48,732
|
|
|
35,185
|
|
||
Other
|
5,925
|
|
|
2,066
|
|
||
Deferred tax assets
|
73,717
|
|
|
59,652
|
|
||
Less: Valuation allowance
|
(10,549
|
)
|
|
(6,479
|
)
|
||
Deferred tax assets, net
|
63,168
|
|
|
53,173
|
|
||
Deferred tax liabilities:
|
|
|
|
||||
Property, plant and equipment
|
(22,429
|
)
|
|
(20,918
|
)
|
||
Goodwill and intangible costs
|
(23,210
|
)
|
|
(27,762
|
)
|
||
Unremitted earnings of foreign subsidiaries
|
(5,375
|
)
|
|
(13,795
|
)
|
||
Convertible debt
|
(7,055
|
)
|
|
(3,622
|
)
|
||
Other
|
(3,553
|
)
|
|
(677
|
)
|
||
Deferred tax liabilities
|
(61,622
|
)
|
|
(66,774
|
)
|
||
Net deferred tax asset (liability)
|
$
|
1,546
|
|
|
$
|
(13,601
|
)
|
|
Twelve Months Ended
December 31, |
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Balance at beginning of year
|
$
|
1,159
|
|
|
$
|
858
|
|
|
$
|
539
|
|
Acquisition of Furmanite uncertain tax positions
|
—
|
|
|
—
|
|
|
660
|
|
|||
Additions based on current year tax positions
|
—
|
|
|
—
|
|
|
464
|
|
|||
Additions based on tax positions related to prior years
|
1,478
|
|
|
301
|
|
|
96
|
|
|||
Reductions based on tax positions related to prior years
|
(416
|
)
|
|
—
|
|
|
(564
|
)
|
|||
Settlements
|
—
|
|
|
—
|
|
|
(337
|
)
|
|||
Balance at end of year
|
$
|
2,221
|
|
|
$
|
1,159
|
|
|
$
|
858
|
|
a)
|
The Company accrued an estimate of
$8.4 million
of tax benefit (net of applicable foreign tax credits) for the 2017 Tax Act’s one-time transition tax on the foreign subsidiaries’ accumulated, unremitted earnings going back to 1986. The Company has elected to pay the transition tax in installments over the period of
eight
years, pursuant to the guidance of the new Internal Revenue Code Section 965, however in 2019 the Company will utilize available tax credits to fully offset remaining balance of the one-time transition tax liability.
|
b)
|
The Company accrued
$17.4 million
of provisional tax benefit related to the net change in deferred tax balances stemming from the 2017 Tax Act’s reduction of the U.S. federal income tax rate,
|
c)
|
The Company recorded an estimate of the state tax impact of the 2017 Tax Act, based on the current law in the states in the U.S. in which it operates, and
|
d)
|
The Company calculated an estimate of the effect on certain deferred tax assets and liabilities of the Company related to the 2017 Tax Act’s revised rules regarding certain incentive-based compensation tax deductions under Internal Revenue Code Section 162(m).
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
|
|
|
|
||||
Credit Facility
|
$
|
156,843
|
|
|
$
|
177,857
|
|
Convertible debt
1
|
195,184
|
|
|
209,892
|
|
||
Capital lease obligations
|
5,356
|
|
|
—
|
|
||
Total long-term debt and capital lease obligations
|
357,383
|
|
|
387,749
|
|
||
Less: current portion of long-term debt and capital lease obligations
|
569
|
|
|
—
|
|
||
Total long-term debt and capital lease obligations, less current portion
|
$
|
356,814
|
|
|
$
|
387,749
|
|
1
|
Comprised of principal amount outstanding plus embedded derivative liability (if any), less unamortized discount and issuance costs. See
Convertible Debt
section below for additional information.
|
December 31
|
|
||
2019
|
$
|
—
|
|
2020
|
156,843
|
|
|
2021
|
—
|
|
|
2022
|
—
|
|
|
2023
|
230,000
|
|
|
Thereafter
|
—
|
|
|
Total
|
$
|
386,843
|
|
•
|
during any calendar quarter commencing after the calendar quarter ending on December 31, 2017 (and only during such calendar quarter), if the last reported sale price of our common stock for at least
20
trading days (whether or not consecutive) during a period of
30
consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to
130%
of the conversion price on each applicable trading day;
|
•
|
during the
five
business day period after any
five
consecutive trading day period (the “measurement period”) in which the trading price per $1,000 principal amount of Notes for each trading day of such measurement period was less than
98%
of the product of the last reported sale price of our common stock and the conversion rate on such trading day;
|
•
|
if we call any or all of the Notes for redemption, at any time prior to the close of business on the business day immediately preceding the redemption date; or;
|
•
|
upon the occurrence of specified corporate events described in the indenture governing the Notes.
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Liability component:
|
|
|
|
||||
Principal
|
$
|
230,000
|
|
|
$
|
230,000
|
|
Unamortized issuance costs
|
(5,834
|
)
|
|
(6,820
|
)
|
||
Unamortized discount
|
(28,982
|
)
|
|
(33,882
|
)
|
||
Net carrying amount of the liability component
|
195,184
|
|
|
189,298
|
|
||
Embedded derivative liability
1
|
—
|
|
|
20,594
|
|
||
Total
2
|
$
|
195,184
|
|
|
$
|
209,892
|
|
|
|
|
|
||||
Equity component:
|
|
|
|
||||
Carrying amount of the equity component, net of issuance costs
3
|
$
|
13,912
|
|
|
$
|
13,912
|
|
1
|
The embedded derivative liability was reclassified to stockholders’ equity as of May 17, 2018 and is no longer marked to fair value each period, as discussed further below. It is excluded from the table above as of December 31, 2018.
|
|
Twelve Months Ended
December 31, |
||||||
|
2018
|
|
2017
|
||||
|
|
|
|
||||
Coupon interest
|
$
|
11,500
|
|
|
$
|
4,823
|
|
Amortization of debt discount and issuance costs
|
5,886
|
|
|
2,310
|
|
||
Total interest expense on convertible senior notes
|
$
|
17,386
|
|
|
$
|
7,133
|
|
|
|
|
|
||||
Effective interest rate
|
9.12
|
%
|
|
9.12
|
%
|
|
Gain (Loss) Recognized in Other Comprehensive Income (Loss)
|
|
Gain (Loss) Reclassified from Other Comprehensive Income (Loss) to Earnings
|
||||||||||||||||||||
|
Twelve Months Ended
December 31, |
|
Twelve Months Ended
December 31, |
||||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2018
|
|
2017
|
|
2016
|
||||||||||||
Derivatives Classified as Hedging Instruments
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net investment hedge
|
$
|
658
|
|
|
$
|
(1,802
|
)
|
|
481
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Gain (Loss) Recognized in Income (Loss)
1
|
|
|
|
|
|
|
||||||||||||||||
|
Twelve Months Ended
December 31, |
|
|
|
|
|
|
||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
|
|
|
|
|
||||||||||||
Derivatives Not Classified as Hedging Instruments
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Embedded derivative in convertible debt
|
$
|
(24,783
|
)
|
|
$
|
818
|
|
|
$
|
—
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||
|
|
|
|
|
|
|
|
||||||||
|
Classification
|
|
Balance Sheet
Location
|
|
Fair
Value
|
|
Classification
|
|
Balance Sheet
Location
|
|
Fair
Value
|
||||
Derivatives Classified as Hedging Instruments
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net investment hedge
|
Liability
|
|
Long-term debt
|
|
$
|
(3,904
|
)
|
|
Liability
|
|
Long-term debt
|
|
$
|
(3,246
|
)
|
Derivatives Not Classified as Hedging Instruments
|
|
|
|
|
|
|
|
|
|
|
|
||||
Embedded derivative in convertible debt
|
Liability
|
|
Long-term debt
|
|
$
|
—
|
|
|
Liability
|
|
Long-term debt
|
|
$
|
20,594
|
|
Twelve Months Ended December 31,
|
|
|
|
||||
|
Operating
|
|
Capital
|
||||
2019
|
$
|
23,315
|
|
|
$
|
583
|
|
2020
|
16,858
|
|
|
500
|
|
||
2021
|
12,577
|
|
|
504
|
|
||
2022
|
9,873
|
|
|
524
|
|
||
2023
|
7,846
|
|
|
525
|
|
||
Thereafter
|
23,224
|
|
|
5,631
|
|
||
Total minimum lease payments
|
$
|
93,693
|
|
|
$
|
8,267
|
|
Less amounts representing interest
|
|
|
(2,911
|
)
|
|||
Present value of future minimum lease payments
|
|
|
$
|
5,356
|
|
|
December 31, 2018
|
||||||||||||||
|
Quoted Prices
in Active Markets for
Identical Items
(Level 1)
|
|
Significant
Other
Observable
Inputs (Level 2)
|
|
Significant
Unobservable
Inputs (Level 3)
|
|
Total
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Contingent consideration
1
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
429
|
|
|
$
|
429
|
|
Net investment hedge
|
$
|
—
|
|
|
$
|
(3,904
|
)
|
|
$
|
—
|
|
|
$
|
(3,904
|
)
|
Embedded derivative in convertible debt
2
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
December 31, 2017
|
||||||||||||||
|
Quoted Prices in Active
Markets for
Identical Items
(Level 1)
|
|
Significant
Other
Observable
Inputs (Level 2)
|
|
Significant
Unobservable
Inputs (Level 3)
|
|
Total
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Contingent consideration
1
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,712
|
|
|
$
|
1,712
|
|
Net investment hedge
|
$
|
—
|
|
|
$
|
(3,246
|
)
|
|
$
|
—
|
|
|
$
|
(3,246
|
)
|
Embedded derivative in convertible debt
2
|
$
|
—
|
|
|
$
|
20,594
|
|
|
$
|
—
|
|
|
$
|
20,594
|
|
1
|
Inclusive of both current and noncurrent portions.
|
2
|
The embedded derivative liability was reclassified to stockholders’ equity as of May 17, 2018 and is no longer marked to fair value each period, as discussed in Note 10.
|
|
Twelve Months Ended December 31,
|
||||||
|
2018
|
|
2017
|
||||
Beginning balance
|
$
|
1,712
|
|
|
$
|
3,739
|
|
Accretion of liability
|
39
|
|
|
222
|
|
||
Foreign currency effects
|
(14
|
)
|
|
203
|
|
||
Payment
|
(1,106
|
)
|
|
(1,278
|
)
|
||
Revaluation
|
(202
|
)
|
|
(1,174
|
)
|
||
Ending balance
|
$
|
429
|
|
|
$
|
1,712
|
|
|
Twelve Months Ended
December 31, 2018 |
|||||
|
No. of Stock
Units
|
|
Weighted
Average
Fair Value
|
|||
|
(in thousands)
|
|
|
|||
Stock and stock units, beginning of year
|
854
|
|
|
$
|
21.42
|
|
Changes during the year:
|
|
|
|
|||
Granted
|
370
|
|
|
$
|
18.09
|
|
Vested and settled
|
(291
|
)
|
|
$
|
24.76
|
|
Cancelled
|
(77
|
)
|
|
$
|
21.37
|
|
Stock and stock units, end of year
|
856
|
|
|
$
|
18.79
|
|
|
Twelve Months Ended
December 31, 2018 |
||||||||||||
|
Performance Units Subject to Market Conditions
|
|
Performance Units Not Subject to Market Conditions
|
||||||||||
|
No. of Stock
Units
1
|
|
Weighted
Average
Fair Value
|
|
No. of Stock
Units
1
|
|
Weighted
Average
Fair Value
|
||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
||||||
Performance stock units, beginning of period
|
45
|
|
|
$
|
17.66
|
|
|
84
|
|
|
$
|
25.76
|
|
Changes during the period:
|
|
|
|
|
|
|
|
||||||
Granted
|
465
|
|
|
$
|
14.24
|
|
|
115
|
|
|
$
|
15.00
|
|
Vested and settled
|
—
|
|
|
$
|
—
|
|
|
(15
|
)
|
|
$
|
13.45
|
|
Cancelled
|
(15
|
)
|
|
$
|
16.78
|
|
|
(39
|
)
|
|
$
|
27.95
|
|
Performance stock units, end of period
|
495
|
|
|
$
|
14.47
|
|
|
145
|
|
|
$
|
17.88
|
|
1
|
Performance units with variable payouts are shown at target level of performance.
|
|
Twelve Months Ended
December 31, 2018 |
|||||
|
No. of
Options
|
|
Weighted
Average
Exercise Price
|
|||
|
(in thousands)
|
|
|
|||
Shares under option, beginning of year
|
79
|
|
|
$
|
31.94
|
|
Changes during the year:
|
|
|
|
|||
Granted
|
—
|
|
|
$
|
—
|
|
Exercised
|
—
|
|
|
$
|
—
|
|
Cancelled
|
—
|
|
|
$
|
—
|
|
Expired
|
(27
|
)
|
|
$
|
30.75
|
|
Shares under option, end of year
|
52
|
|
|
$
|
32.56
|
|
Exercisable at end of year
|
52
|
|
|
$
|
32.56
|
|
|
Twelve Months Ended
December 31,
|
|||||||||
|
2018
|
|
2017
|
|
2016
1
|
|||||
Service cost
|
$
|
77
|
|
|
$
|
90
|
|
|
79
|
|
Interest cost
|
2,303
|
|
|
2,438
|
|
|
2,504
|
|
||
Expected return on plan assets
|
(3,720
|
)
|
|
(3,110
|
)
|
|
(2,577
|
)
|
||
Amortization of net actuarial (gain) loss
|
(78
|
)
|
|
71
|
|
|
—
|
|
||
Net periodic pension cost (credit)
|
$
|
(1,418
|
)
|
|
$
|
(511
|
)
|
|
6
|
|
|
December 31,
|
||||
|
2018
|
|
2017
|
||
Discount rate
|
2.8
|
%
|
|
2.5
|
%
|
Rate of compensation increase
1
|
Not applicable
|
|
Not applicable
|
||
Inflation
|
3.2
|
%
|
|
3.1
|
%
|
|
Twelve Months Ended
December 31,
|
||||
|
2018
|
|
2017
|
||
Discount rate
|
2.5
|
%
|
|
2.7
|
%
|
Expected long-term return on plan assets
|
4.7
|
%
|
|
4.5
|
%
|
Rate of compensation increase
1
|
Not applicable
|
|
Not applicable
|
||
Inflation
|
3.1
|
%
|
|
3.3
|
%
|
|
Twelve Months Ended December 31,
|
||||||
|
2018
|
|
2017
|
||||
Projected benefit obligation:
|
|
|
|
||||
Beginning of year
|
$
|
96,875
|
|
|
$
|
89,206
|
|
Service cost
|
77
|
|
|
90
|
|
||
Interest cost
|
2,303
|
|
|
2,438
|
|
||
Actuarial (gain) loss
|
(4,347
|
)
|
|
890
|
|
||
Benefits paid
|
(4,539
|
)
|
|
(4,187
|
)
|
||
Prior service cost
|
669
|
|
|
—
|
|
||
Disposal of Norwegian Plan
|
(1,075
|
)
|
|
—
|
|
||
Foreign currency translation adjustment and other
|
(5,404
|
)
|
|
8,438
|
|
||
End of year
|
84,559
|
|
|
96,875
|
|
||
Fair value of plan assets:
|
|
|
|
||||
Beginning of year
|
81,899
|
|
|
67,967
|
|
||
Actual gain (loss) on plan assets
|
(462
|
)
|
|
7,383
|
|
||
Employer contributions
|
2,404
|
|
|
4,350
|
|
||
Benefits paid
|
(4,539
|
)
|
|
(4,187
|
)
|
||
Disposal of Norwegian Plan
|
(983
|
)
|
|
—
|
|
||
Foreign currency translation adjustment and other
|
(4,700
|
)
|
|
6,386
|
|
||
End of year
|
73,619
|
|
|
81,899
|
|
||
Excess projected obligation under (over) fair value of plan assets at end of year
|
$
|
(10,940
|
)
|
|
$
|
(14,976
|
)
|
Amounts recognized in accumulated other comprehensive loss:
|
|
|
|
||||
Net actuarial loss
|
$
|
(7,190
|
)
|
|
$
|
(7,221
|
)
|
Prior service cost
|
(669
|
)
|
|
—
|
|
||
Total
|
$
|
(7,859
|
)
|
|
$
|
(7,221
|
)
|
2019
|
$
|
3,403
|
|
2020
|
3,536
|
|
|
2021
|
3,752
|
|
|
2022
|
3,926
|
|
|
2023
|
3,811
|
|
|
2024-2028
|
22,475
|
|
|
Total
|
$
|
40,903
|
|
December 31, 2018
|
||||||||||||||||
Asset Category
|
|
Total
|
|
Quoted Prices in
Active Markets
for
Identical Assets
(Level 1)
|
|
Significant
Observable
Inputs
(Level 2) (a)
|
|
Significant
Unobservable
Inputs
(Level 3) (a)
|
||||||||
Cash
|
|
$
|
1,119
|
|
|
$
|
1,119
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Equity securities:
|
|
|
|
|
|
|
|
|
||||||||
Diversified growth fund (h)
|
|
12,330
|
|
|
—
|
|
|
12,330
|
|
|
—
|
|
||||
Global equity fund (o)
|
|
1,835
|
|
|
—
|
|
|
1,835
|
|
|
—
|
|
||||
Fixed income securities:
|
|
|
|
|
|
|
|
|
||||||||
U.K. government fixed income securities (k)
|
|
18,048
|
|
|
—
|
|
|
18,048
|
|
|
—
|
|
||||
U.K. government index-linked securities (l)
|
|
14,245
|
|
|
—
|
|
|
14,245
|
|
|
—
|
|
||||
Global absolute return bond fund (m)
|
|
18,570
|
|
|
—
|
|
|
18,570
|
|
|
—
|
|
||||
Corporate bonds (n)
|
|
7,472
|
|
|
—
|
|
|
7,472
|
|
|
—
|
|
||||
Total
|
|
$
|
73,619
|
|
|
$
|
1,119
|
|
|
$
|
72,500
|
|
|
$
|
—
|
|
December 31, 2017
|
||||||||||||||||
Asset Category
|
|
Total
|
|
Quoted Prices in
Active Markets
for
Identical Assets
(Level 1)
|
|
Significant
Observable
Inputs
(Level 2) (a)
|
|
Significant
Unobservable
Inputs
(Level 3) (a)
|
||||||||
Cash
|
|
$
|
651
|
|
|
$
|
651
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Equity securities:
|
|
|
|
|
|
|
|
|
||||||||
U.K. equity (b)
|
|
17,809
|
|
|
—
|
|
|
17,809
|
|
|
—
|
|
||||
U.S. equity index (c)
|
|
4,370
|
|
|
—
|
|
|
4,370
|
|
|
—
|
|
||||
European equity index (d)
|
|
4,378
|
|
|
—
|
|
|
4,378
|
|
|
—
|
|
||||
Pacific rim equity index (e)
|
|
3,506
|
|
|
—
|
|
|
3,506
|
|
|
—
|
|
||||
Japanese equity index (f)
|
|
2,733
|
|
|
—
|
|
|
2,733
|
|
|
—
|
|
||||
Emerging markets equity index (g)
|
|
2,785
|
|
|
—
|
|
|
2,785
|
|
|
—
|
|
||||
Diversified growth fund (h)
|
|
17,296
|
|
|
—
|
|
|
17,296
|
|
|
—
|
|
||||
Global absolute return fund (i)
|
|
6,534
|
|
|
—
|
|
|
6,534
|
|
|
—
|
|
||||
Fixed income securities:
|
|
|
|
|
|
|
|
|
||||||||
Cash fund (j)
|
|
5,315
|
|
|
—
|
|
|
5,315
|
|
|
—
|
|
||||
U.K. government fixed income securities (k)
|
|
6,494
|
|
|
—
|
|
|
6,494
|
|
|
—
|
|
||||
U.K. government index-linked securities (l)
|
|
8,934
|
|
|
—
|
|
|
8,934
|
|
|
—
|
|
||||
Total
|
|
$
|
80,805
|
|
|
$
|
651
|
|
|
$
|
80,154
|
|
|
$
|
—
|
|
a)
|
The net asset value of the commingled equity and fixed income funds are determined by prices of the underlying securities, less the funds’ liabilities, and then divided by the number of shares outstanding. As the funds are not traded in active markets, the commingled funds are classified as Level 2 or Level 3 assets. The net asset value is corroborated by observable market data (e.g., purchase or sale activities) for Level 2 assets.
|
b)
|
This category includes investments in U.K. companies and aims to achieve a return that is consistent with the return of the FTSE All-Share Index.
|
c)
|
This category includes investments in a variety of large and small U.S. companies and aims to achieve a return that is consistent with the return of the FTSE All-World USA Index.
|
d)
|
This category includes investments in a variety of large and small European companies and aims to achieve a return that is consistent with the return of the FTSE All-World Developed Europe ex-U.K. Index.
|
e)
|
This category includes investments in a variety of large and small companies across the Australian, Hong Kong, New Zealand and Singapore markets and aims to achieve a return that is consistent with the return of the FTSE-All-World Developed Asia Pacific ex-Japan Index.
|
f)
|
This category includes investments in a variety of large and small Japanese companies and aims to achieve a return that is consistent with the return of the FTSE All-World Japan Index.
|
g)
|
This category includes investments in companies in the Emerging Markets to achieve a return that is consistent with the return of the IFC Investable Index ex-Malaysia.
|
h)
|
This category includes investments in a diversified portfolio of equity, bonds, alternatives and cash markets and aims to achieve a return that is consistent with the return of the Libor GBP 3 month +
3%
Index.
|
i)
|
This category includes investments in a diversified portfolio of equity and bonds combined with investment strategies based on advanced derivative techniques and aims to achieve a return over rolling three-year periods equivalent to cash plus
5%
per year, gross of fees.
|
j)
|
This category includes investments in British pound sterling-denominated money market instruments and fixed-income securities issued by governments, corporations or other issuers which may be listed or traded on a recognized market.
|
k)
|
This category includes investments in funds with the objective to provide a leveraged return to U.K. government fixed income securities (gilts) that have maturity periods ranging from 2030 to 2060.
|
l)
|
This category includes investments in funds with the objective to provide a leveraged return to various U.K. government indexed-linked securities (gilts), with maturity periods ranging from 2022 to 2062. The funds invest in U.K. government bonds and derivatives.
|
m)
|
This category includes investments in funds predominantly in a wide range of fixed and floating rate investment grade and below investment grade debt instruments traded on regulated markets worldwide with the objective to achieve a return of
3%
above 1 month LIBOR over a 3-year basis.
|
n)
|
This category includes investments in a diversified pool of debt and debt like assets to generate capital and income returns.
|
o)
|
This category includes investments in a diversified portfolio of equity, bonds, money markets, alternatives and credit markets to achieve a return with downside protection through monthly put options.
|
•
|
optimize the long-term return on plan assets at an acceptable level of risk
|
•
|
maintain a broad diversification across asset classes
|
•
|
maintain careful control of the risk level within each asset class
|
|
Asset Allocations
|
|
Target Asset Allocations
|
||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||
Equity securities and diversified growth funds
1
|
19.2
|
%
|
|
73.5
|
%
|
|
27.5
|
%
|
|
65.0
|
%
|
Debt securities
2
|
79.2
|
%
|
|
25.7
|
%
|
|
72.5
|
%
|
|
35.0
|
%
|
Other
|
1.5
|
%
|
|
0.8
|
%
|
|
—
|
%
|
|
—
|
%
|
Total
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
1
|
Diversified growth funds refer to actively managed absolute return funds that hold a combination of equity and debt securities.
|
2
|
Includes investments in funds with the objective to provide leveraged returns to U.K. government fixed income securities, U.K. government indexed-linked securities, global bonds, and corporate bonds.
|
|
Twelve Months Ended
December 31, |
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Revenues:
|
|
|
|
|
|
||||||
IHT
|
$
|
617,378
|
|
|
$
|
588,441
|
|
|
$
|
589,478
|
|
MS
|
532,365
|
|
|
529,973
|
|
|
539,627
|
|
|||
Quest Integrity
|
97,186
|
|
|
81,797
|
|
|
67,591
|
|
|||
Total
|
$
|
1,246,929
|
|
|
$
|
1,200,211
|
|
|
$
|
1,196,696
|
|
|
Twelve Months Ended
December 31, |
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Operating income (loss):
|
|
|
|
|
|
||||||
IHT
1
|
$
|
37,329
|
|
|
$
|
11,128
|
|
|
$
|
43,367
|
|
MS
1
|
6,323
|
|
|
(33,993
|
)
|
|
27,283
|
|
|||
Quest Integrity
|
20,138
|
|
|
12,337
|
|
|
4,780
|
|
|||
Corporate and shared support services
|
(102,751
|
)
|
|
(104,582
|
)
|
|
(78,548
|
)
|
|||
Total
|
$
|
(38,961
|
)
|
|
$
|
(115,110
|
)
|
|
$
|
(3,118
|
)
|
1
|
Includes goodwill impairment loss of
$21.1 million
and
$54.1 million
for IHT and MS, respectively, for the year ended December 31, 2017.
|
|
Twelve Months Ended
December 31, |
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Capital expenditures
1
:
|
|
|
|
|
|
||||||
IHT
|
$
|
7,643
|
|
|
$
|
10,505
|
|
|
$
|
8,803
|
|
MS
|
11,141
|
|
|
17,791
|
|
|
15,077
|
|
|||
Quest Integrity
|
3,526
|
|
|
3,316
|
|
|
2,007
|
|
|||
Corporate and shared support services
|
3,621
|
|
|
5,186
|
|
|
19,956
|
|
|||
Total
|
$
|
25,931
|
|
|
$
|
36,798
|
|
|
$
|
45,843
|
|
1
|
Excludes capital leases. Totals may vary from amounts presented in the consolidated statements of cash flows due to the timing of cash payments.
|
|
Twelve Months Ended
December 31, |
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Depreciation and amortization:
|
|
|
|
|
|
||||||
IHT
|
$
|
18,810
|
|
|
$
|
19,279
|
|
|
$
|
19,853
|
|
MS
|
36,177
|
|
|
23,412
|
|
|
21,387
|
|
|||
Quest Integrity
|
4,285
|
|
|
4,423
|
|
|
5,323
|
|
|||
Corporate and shared support services
|
5,590
|
|
|
5,029
|
|
|
2,110
|
|
|||
Total
|
$
|
64,862
|
|
|
$
|
52,143
|
|
|
$
|
48,673
|
|
|
Total
Revenues
1
|
|
Total
Long-lived Assets
2
|
||||
Twelve months ended December 31, 2018
|
|
|
|
||||
United States
|
$
|
908,382
|
|
|
$
|
298,567
|
|
Canada
|
139,900
|
|
|
4,165
|
|
||
Europe
|
126,142
|
|
|
20,224
|
|
||
Other foreign countries
|
72,505
|
|
|
3,210
|
|
||
Total
|
$
|
1,246,929
|
|
|
$
|
326,166
|
|
Twelve months ended December 31, 2017
|
|
|
|
||||
United States
|
$
|
871,367
|
|
|
$
|
330,909
|
|
Canada
|
134,256
|
|
|
5,377
|
|
||
Europe
|
119,603
|
|
|
22,480
|
|
||
Other foreign countries
|
74,985
|
|
|
4,614
|
|
||
Total
|
$
|
1,200,211
|
|
|
$
|
363,380
|
|
Twelve months ended December 31, 2016
|
|
|
|
||||
United States
|
$
|
889,967
|
|
|
$
|
348,123
|
|
Canada
|
128,122
|
|
|
5,901
|
|
||
Europe
|
108,720
|
|
|
20,249
|
|
||
Other foreign countries
|
69,887
|
|
|
4,962
|
|
||
Total
|
$
|
1,196,696
|
|
|
$
|
379,235
|
|
|
Twelve Months Ended
December 31, 2016 |
||
|
|
||
Revenues
|
$
|
46,771
|
|
Operating expenses
|
43,081
|
|
|
Gross margin
|
3,690
|
|
|
Selling, general and administrative expenses
|
1,939
|
|
|
Gain on disposal
|
7
|
|
|
Income from discontinued operations, before income tax
|
1,758
|
|
|
Less: Provision for income taxes
|
1,869
|
|
|
Loss from discontinued operations, net of income tax
|
$
|
(111
|
)
|
|
Twelve Months Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
OneTEAM Program
|
|
|
|
|
|
||||||
Severance and related costs
|
|
|
|
|
|
||||||
IHT
|
$
|
2,995
|
|
|
$
|
—
|
|
|
$
|
—
|
|
MS
|
2,514
|
|
|
—
|
|
|
—
|
|
|||
Quest Integrity
|
418
|
|
|
—
|
|
|
—
|
|
|||
Corporate and shared support services
|
800
|
|
|
—
|
|
|
—
|
|
|||
Subtotal
|
6,727
|
|
|
—
|
|
|
—
|
|
|||
|
|
|
|
|
|
||||||
2017 Cost Savings Initiative
|
|
|
|
|
|
||||||
Severance and related costs
|
|
|
|
|
|
||||||
IHT
|
—
|
|
|
966
|
|
|
—
|
|
|||
MS
|
—
|
|
|
1,622
|
|
|
—
|
|
|||
Quest Integrity
|
—
|
|
|
428
|
|
|
—
|
|
|||
Corporate and shared support services
|
—
|
|
|
864
|
|
|
—
|
|
|||
Subtotal
|
—
|
|
|
3,880
|
|
|
—
|
|
|||
|
|
|
|
|
|
||||||
Furmanite Belgium and Netherlands Exit
|
|
|
|
|
|
||||||
Severance and related costs (credits)
|
|
|
|
|
|
||||||
MS
|
—
|
|
|
(173
|
)
|
|
4,862
|
|
|||
Disposal (gain)/impairment loss
|
|
|
|
|
|
||||||
MS
|
—
|
|
|
(1,056
|
)
|
|
651
|
|
|||
Subtotal
|
—
|
|
|
(1,229
|
)
|
|
5,513
|
|
|||
Grand total
|
$
|
6,727
|
|
|
$
|
2,651
|
|
|
$
|
5,513
|
|
|
Twelve Months Ended
December 31, 2018 |
||
Balance, beginning of period
|
$
|
—
|
|
Charges
|
6,727
|
|
|
Payments
|
(4,444
|
)
|
|
Balance, end of period
|
$
|
2,283
|
|
|
Twelve Months Ended
December 31, 2017 |
||
Balance, beginning of period
|
$
|
4,846
|
|
Charges (credits), net
|
(173
|
)
|
|
Payments
|
(3,144
|
)
|
|
Disposal
|
(1,601
|
)
|
|
Foreign currency adjustments
|
72
|
|
|
Balance, end of period
|
$
|
—
|
|
|
Twelve Months Ended
December 31, 2018 |
|
Twelve Months Ended
December 31, 2017 |
||||||||||||||||||||||||||||||||||||
|
Foreign
Currency
Translation
Adjustments
|
|
Foreign
Currency
Hedge
|
|
Defined benefit pension plans
|
|
Tax
Provision
|
|
Total
|
|
Foreign
Currency
Translation
Adjustments
|
|
Foreign
Currency
Hedge
|
|
Defined benefit pension plans
|
|
Tax
Provision
|
|
Total
|
||||||||||||||||||||
Balance at beginning of year
|
$
|
(21,366
|
)
|
|
$
|
3,246
|
|
|
$
|
(7,221
|
)
|
|
$
|
5,545
|
|
|
$
|
(19,796
|
)
|
|
$
|
(31,973
|
)
|
|
$
|
5,048
|
|
|
$
|
(10,518
|
)
|
|
$
|
8,443
|
|
|
$
|
(29,000
|
)
|
Other comprehensive income (loss)
|
(9,241
|
)
|
|
658
|
|
|
(638
|
)
|
|
(3,045
|
)
|
|
(12,266
|
)
|
|
10,607
|
|
|
(1,802
|
)
|
|
3,297
|
|
|
(2,898
|
)
|
|
9,204
|
|
||||||||||
Adoption of new accounting principle
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,330
|
)
|
|
(2,330
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
Balance at end of year
|
$
|
(30,607
|
)
|
|
$
|
3,904
|
|
|
$
|
(7,859
|
)
|
|
$
|
170
|
|
|
$
|
(34,392
|
)
|
|
$
|
(21,366
|
)
|
|
$
|
3,246
|
|
|
$
|
(7,221
|
)
|
|
$
|
5,545
|
|
|
$
|
(19,796
|
)
|
|
Twelve Months Ended December 31,
|
||||||||||||||||||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||||||||||||||||||||||||||
|
Gross
Amount
|
|
Tax
Effect
|
|
Net
Amount
|
|
Gross
Amount
|
|
Tax
Effect
|
|
Net
Amount
|
|
Gross
Amount |
|
Tax
Effect |
|
Net
Amount |
||||||||||||||||||
Foreign currency translation adjustments
|
$
|
(9,241
|
)
|
|
$
|
(2,923
|
)
|
|
$
|
(12,164
|
)
|
|
$
|
10,607
|
|
|
$
|
(2,919
|
)
|
|
$
|
7,688
|
|
|
$
|
(3,849
|
)
|
|
$
|
1,351
|
|
|
$
|
(2,498
|
)
|
Foreign currency hedge
|
658
|
|
|
(162
|
)
|
|
496
|
|
|
(1,802
|
)
|
|
688
|
|
|
(1,114
|
)
|
|
481
|
|
|
(181
|
)
|
|
300
|
|
|||||||||
Defined benefit pension plans
|
(638
|
)
|
|
40
|
|
|
(598
|
)
|
|
3,297
|
|
|
(667
|
)
|
|
2,630
|
|
|
(10,518
|
)
|
|
2,090
|
|
|
(8,428
|
)
|
|||||||||
Total
|
$
|
(9,221
|
)
|
|
$
|
(3,045
|
)
|
|
$
|
(12,266
|
)
|
|
$
|
12,102
|
|
|
$
|
(2,898
|
)
|
|
$
|
9,204
|
|
|
$
|
(13,886
|
)
|
|
$
|
3,260
|
|
|
$
|
(10,626
|
)
|
|
Year Ended December 31, 2018
|
||||||||||||||||||
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
|
Total
Year
|
||||||||||
Revenues
|
$
|
302,385
|
|
|
$
|
343,889
|
|
|
$
|
290,856
|
|
|
$
|
309,799
|
|
|
$
|
1,246,929
|
|
Gross margin
|
$
|
75,534
|
|
|
$
|
97,182
|
|
|
$
|
70,139
|
|
|
$
|
85,401
|
|
|
$
|
328,256
|
|
Operating income (loss)
|
$
|
(14,125
|
)
|
|
$
|
1,799
|
|
|
$
|
(19,694
|
)
|
|
$
|
(6,941
|
)
|
|
$
|
(38,961
|
)
|
Income (loss) from continuing operations
1
|
$
|
(12,264
|
)
|
|
$
|
(31,341
|
)
|
|
$
|
(23,526
|
)
|
|
$
|
3,985
|
|
|
$
|
(63,146
|
)
|
Net income (loss)
1
|
$
|
(12,264
|
)
|
|
$
|
(31,341
|
)
|
|
$
|
(23,526
|
)
|
|
$
|
3,985
|
|
|
$
|
(63,146
|
)
|
Basic earnings (loss) per share:
|
|
|
|
|
|
|
|
|
|
||||||||||
Continuing operations
1
|
$
|
(0.41
|
)
|
|
$
|
(1.04
|
)
|
|
$
|
(0.78
|
)
|
|
$
|
0.13
|
|
|
$
|
(2.10
|
)
|
Net income (loss)
1
|
$
|
(0.41
|
)
|
|
$
|
(1.04
|
)
|
|
$
|
(0.78
|
)
|
|
$
|
0.13
|
|
|
$
|
(2.10
|
)
|
Diluted earnings (loss) per share:
|
|
|
|
|
|
|
|
|
|
||||||||||
Continuing operations
1
|
$
|
(0.41
|
)
|
|
$
|
(1.04
|
)
|
|
$
|
(0.78
|
)
|
|
$
|
0.13
|
|
|
$
|
(2.10
|
)
|
Net income (loss)
1
|
$
|
(0.41
|
)
|
|
$
|
(1.04
|
)
|
|
$
|
(0.78
|
)
|
|
$
|
0.13
|
|
|
$
|
(2.10
|
)
|
|
Year Ended December 31, 2017
|
||||||||||||||||||
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
|
Total
Year
|
||||||||||
Revenues
|
$
|
286,554
|
|
|
$
|
312,256
|
|
|
$
|
285,067
|
|
|
$
|
316,334
|
|
|
$
|
1,200,211
|
|
Gross margin
|
$
|
74,804
|
|
|
$
|
84,643
|
|
|
$
|
68,941
|
|
|
$
|
81,611
|
|
|
$
|
309,999
|
|
Operating loss
2
|
$
|
(12,088
|
)
|
|
$
|
(6,693
|
)
|
|
$
|
(94,116
|
)
|
|
$
|
(2,213
|
)
|
|
$
|
(115,110
|
)
|
Income (loss) from continuing operations
1
|
$
|
(9,508
|
)
|
|
$
|
(11,086
|
)
|
|
$
|
(83,528
|
)
|
|
$
|
19,667
|
|
|
$
|
(84,455
|
)
|
Net income (loss)
1
|
$
|
(9,508
|
)
|
|
$
|
(11,086
|
)
|
|
$
|
(83,528
|
)
|
|
$
|
19,667
|
|
|
$
|
(84,455
|
)
|
Basic earnings (loss) per share:
|
|
|
|
|
|
|
|
|
|
||||||||||
Continuing operations
1
|
$
|
(0.32
|
)
|
|
$
|
(0.37
|
)
|
|
$
|
(2.80
|
)
|
|
$
|
0.66
|
|
|
$
|
(2.83
|
)
|
Net income (loss)
1
|
$
|
(0.32
|
)
|
|
$
|
(0.37
|
)
|
|
$
|
(2.80
|
)
|
|
$
|
0.66
|
|
|
$
|
(2.83
|
)
|
Diluted earnings (loss) per share:
|
|
|
|
|
|
|
|
|
|
||||||||||
Continuing operations
1
|
$
|
(0.32
|
)
|
|
$
|
(0.37
|
)
|
|
$
|
(2.80
|
)
|
|
$
|
0.66
|
|
|
$
|
(2.83
|
)
|
Net income (loss)
1
|
$
|
(0.32
|
)
|
|
$
|
(0.37
|
)
|
|
$
|
(2.80
|
)
|
|
$
|
0.66
|
|
|
$
|
(2.83
|
)
|
1
|
Income (loss) from continuing operations, net income (loss) and the related earnings (loss) per share amounts for each of the quarters in 2018 and the fourth quarter of 2017 are revised from those originally reported to correct errors in income tax expense (benefit) associated with the measurement of valuation allowances on deferred tax assets. Based on an analysis of quantitative and qualitative factors, the Company determined the related impacts were not material to its previously filed annual or interim consolidated financial statements, and therefore, amendments of previously filed reports are not required.
|
2
|
Includes a goodwill impairment loss of
$75.2 million
in the third quarter of 2017.
|
|
Years Ended December 31,
|
|
Seven Months Ended December 31,
|
|
Years Ended May 31,
|
||||||||||||||||||
|
2018
|
|
2017
(1)
|
|
2016
(2)
|
|
2015
(3)
|
|
2015
|
|
2014
|
||||||||||||
Statements of operations data:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Revenues
|
$
|
1,246,929
|
|
|
$
|
1,200,211
|
|
|
$
|
1,196,696
|
|
|
$
|
571,718
|
|
|
$
|
842,047
|
|
|
$
|
749,527
|
|
Operating income (loss)
|
$
|
(38,961
|
)
|
|
$
|
(115,110
|
)
|
|
$
|
(3,118
|
)
|
|
$
|
19,162
|
|
|
$
|
68,465
|
|
|
$
|
53,421
|
|
Income (loss) from continuing operations
|
$
|
(63,146
|
)
|
|
$
|
(84,455
|
)
|
|
$
|
(12,565
|
)
|
|
$
|
8,878
|
|
|
$
|
40,497
|
|
|
$
|
30,149
|
|
Net income (loss) attributable to Team shareholders
|
$
|
(63,146
|
)
|
|
$
|
(84,455
|
)
|
|
$
|
(12,676
|
)
|
|
$
|
8,878
|
|
|
$
|
40,070
|
|
|
$
|
29,855
|
|
Basic earnings (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Continuing operations
|
$
|
(2.10
|
)
|
|
$
|
(2.83
|
)
|
|
$
|
(0.45
|
)
|
|
$
|
0.43
|
|
|
$
|
1.95
|
|
|
$
|
1.46
|
|
Net income (loss)
|
$
|
(2.10
|
)
|
|
$
|
(2.83
|
)
|
|
$
|
(0.45
|
)
|
|
$
|
0.43
|
|
|
$
|
1.95
|
|
|
$
|
1.46
|
|
Diluted earnings (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Continuing operations
|
$
|
(2.10
|
)
|
|
$
|
(2.83
|
)
|
|
$
|
(0.45
|
)
|
|
$
|
0.41
|
|
|
$
|
1.85
|
|
|
$
|
1.40
|
|
Net income (loss)
|
$
|
(2.10
|
)
|
|
$
|
(2.83
|
)
|
|
$
|
(0.45
|
)
|
|
$
|
0.41
|
|
|
$
|
1.85
|
|
|
$
|
1.40
|
|
Weighted-average shares outstanding
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Basic
|
30,031
|
|
|
29,849
|
|
|
28,095
|
|
|
20,852
|
|
|
20,500
|
|
|
20,439
|
|
||||||
Diluted
|
30,031
|
|
|
29,849
|
|
|
28,095
|
|
|
21,425
|
|
|
21,651
|
|
|
21,285
|
|
||||||
Balance sheet data:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total assets
|
$
|
977,821
|
|
|
$
|
1,055,835
|
|
|
$
|
1,147,418
|
|
|
$
|
798,991
|
|
|
$
|
523,833
|
|
|
$
|
484,941
|
|
Long-term debt and other long-term liabilities
|
$
|
380,770
|
|
|
$
|
430,877
|
|
|
$
|
464,060
|
|
|
$
|
368,685
|
|
|
$
|
97,234
|
|
|
$
|
92,753
|
|
Stockholders’ equity
|
$
|
457,100
|
|
|
$
|
477,174
|
|
|
$
|
535,637
|
|
|
$
|
338,146
|
|
|
$
|
335,375
|
|
|
$
|
317,045
|
|
Working capital
|
$
|
215,005
|
|
|
$
|
249,276
|
|
|
$
|
253,636
|
|
|
$
|
222,399
|
|
|
$
|
197,472
|
|
|
$
|
173,671
|
|
Noncontrolling interest
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,034
|
|
|
$
|
5,678
|
|
Other financial data:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Depreciation and amortization
|
$
|
64,862
|
|
|
$
|
52,143
|
|
|
$
|
48,673
|
|
|
$
|
19,426
|
|
|
$
|
22,787
|
|
|
$
|
21,468
|
|
Goodwill impairment loss
|
$
|
—
|
|
|
$
|
75,241
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Share-based compensation
|
$
|
12,256
|
|
|
$
|
7,876
|
|
|
$
|
7,313
|
|
|
$
|
3,469
|
|
|
$
|
4,838
|
|
|
$
|
4,239
|
|
Capital expenditures
4
|
$
|
25,931
|
|
|
$
|
36,798
|
|
|
$
|
45,843
|
|
|
$
|
25,802
|
|
|
$
|
28,769
|
|
|
$
|
33,016
|
|
1
|
As revised. See Note 1 to the consolidated financial statements for additional information.
|
2
|
Effective February 29, 2016, the Company acquired Furmanite Corporation for a purchase price of $282.3 million, consisting of $209.5 million of common stock, $2.0 million of converted share-based payment awards and $70.8 million of cash.
|
3
|
Effective July 7, 2015, the Company acquired Qualspec Group LLC for a purchase price of $255.5 million, consisting of $4.0 million cash, $265.0 million of other assets and $13.5 million in current and long-term liabilities.
|
4
|
Excludes capital leases. Totals may vary from amounts presented in the consolidated statements of cash flows due to the timing of cash payments.
|
|
TEAM, INC.
|
|
By: ______________________________
Name: ____________________________
Title: ____________________________
|
|
|
|
GRANTEE
By: ______________________________
Printed Name: ______________________
Date Signed: _______________________
|
COMPANY
|
|
JURISDICTION / STATE OF INCORPORATION
|
Team, Inc.
|
|
Delaware
|
TISI Pipelines, Inc.
|
|
Delaware
|
TQ Acquisition, Inc.
|
|
Texas
|
Quest Integrity Group, LLC
|
|
Delaware
|
Quest Integrity CAN Ltd.
|
|
Canada
|
Quest Integrity NZL Limited
|
|
New Zealand
|
Quest Integrity MYS Sdn Bhd
|
|
Malaysia
|
Quest Integrity AUS Pty Limited
|
|
Australia
|
Quest Integrity EU Holdings B.V.
|
|
Netherlands
|
Quest Integrity NLD B.V.
|
|
Netherlands
|
Quest Integrity Saudi Arabia Co. LTD
|
|
Saudi Arabia
|
Quest Integrity Middle East FZ-LLC
|
|
United Arab Emirates
|
Quest Integrity Deutschland GmbH
|
|
Germany
|
Quest Integrity USA, LLC
|
|
Texas
|
Quest Integrity MEX S.A. de C.V.
|
|
Mexico
|
Team Industrial Services, Inc.
|
|
Texas
|
Global Ascent, LLC
|
|
California
|
TCI Services Holdings, LLC
|
|
Delaware
|
TCI Services, LLC
|
|
Oklahoma
|
Tank Consultants, LLC
|
|
Oklahoma
|
Tank Consultants Mechanical Services, LLC
|
|
Oklahoma
|
Team Industrial Services International, Inc.
|
|
Delaware
|
Team Mexico Holdings, LLC
|
|
Texas
|
Team Industrial Services Latin America, S. de R.L. de C.V.
|
|
Mexico
|
TISI Acquisition Inc.
|
|
Canada
|
TISI Canada Inc.
|
|
Canada
|
TISI VI, LLC
|
|
USVI
|
Team Industrial Services Asia Private Ltd.
|
|
Singapore
|
Team Industrial Services Trinidad, Ltd.
|
|
Trinidad, West Indies
|
T.I.S.I. Trinidad Limited
|
|
Trinidad, West Indies
|
Team Industrial Services Europe B.V.
|
|
Netherlands
|
Team Industrial Services Netherlands B.V.
|
|
Netherlands
|
Teaminc Europe B.V.
|
|
Netherlands
|
Team Industrial Services Belgium BVBA
|
|
Belgium
|
Team Industrial Services (UK) Limited
|
|
United Kingdom
|
Team Valve Repair Services B.V.
|
|
Netherlands
|
Team Industrial Services Deutschland GmbH
|
|
Germany
|
Team Industrial Services Malaysia Sdn Bhd
|
|
Malaysia
|
Team Industrial Services (UK) Holding Limited
|
|
United Kingdom
|
TeamFurmanite Valve and Rotating Services Limited
|
|
United Kingdom
|
TISI do Brasil-Servicos Industriais Ltda.
|
|
Brazil
|
DK Valve & Supply, LLC
|
|
California
|
Team Technical School, LLC
|
|
Texas
|
Rocket Acquisition, LLC
|
|
Delaware
|
Team Qualspec, LLC
|
|
Delaware
|
Qualspec LLC
|
|
Delaware
|
COMPANY
|
|
JURISDICTION / STATE OF INCORPORATION
|
Quantapoint, LLC
|
|
Delaware
|
A&M Beheer, B.V.
|
|
Netherlands
|
Turbinate International, B.V.
|
|
Netherlands
|
RETESO International, B.V.
|
|
Netherlands
|
Quality Inspection Services B.V.
|
|
Netherlands
|
Quality Inspection Services BVBA
|
|
Belgium
|
Threshold Inspection & Application Training Europe B.V.
|
|
Netherlands
|
Furmanite, LLC
|
|
Delaware
|
Xanser Services, LLC
|
|
Delaware
|
Furmanite Germany, LLC
|
|
Delaware
|
Furmanite GmbH
|
|
Germany
|
Furmanite Worldwide, LLC
|
|
Delaware
|
Xtria, LLC
|
|
Delaware
|
Kaneb Financial, LLC
|
|
Delaware
|
Aggressive Equipment Company, LLC
|
|
Delaware
|
Xanser Investment, LLC
|
|
Delaware
|
Furmanite Offshore Services, Inc.
|
|
Delaware
|
Self Leveling Machines, LLC
|
|
Texas
|
Furmanite International Finance Limited
|
|
United Kingdom
|
Furmanite America, LLC
|
|
Virginia
|
Advanced Integrity Solutions, Inc.
|
|
Texas
|
Furmanite Canada Corp.
|
|
Canada
|
Furmanite Louisiana, LLC
|
|
Delaware
|
Furmanite Aruba II, N.V.
|
|
Aruba
|
Furmanite B.V.
|
|
Netherlands
|
Furmanite GSG BVBA
|
|
Belgium
|
Furmanite AB
|
|
Sweden
|
Furmanite A/S
|
|
Denmark
|
Furmanite Limited
|
|
United Kingdom
|
Furmanite 1986
|
|
United Kingdom
|
Team Industrial Services Inspection Limited
|
|
United Kingdom
|
TeamFurmanite Ltd.
|
|
United Kingdom
|
Furmanite West Africa Ltd.
|
|
Nigeria
|
Furmanite Middle East S.P.C.
|
|
Bahrain
|
Aggressive Equipment Company Ltd.
|
|
United Kingdom
|
Furmanite Kazakhstan LLP
|
|
Kazakhstan
|
Furmanite SAS
|
|
France
|
Furmanite Malaysia LLC
|
|
Delaware
|
Furmanite Australia Pty. Ltd.
|
|
Australia
|
Furmanite Holding B.V.
|
|
Netherlands
|
Furmanite NZ Limited
|
|
New Zealand
|
Furmanite Mechanical Technology Services Co., Ltd.
|
|
China
|
1.
|
I have reviewed this Annual Report on Form 10-K of Team, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
|
|
/
S
/ A
MERINO
G
ATTI
|
|
Amerino Gatti
Chief Executive Officer
|
1.
|
I have reviewed this Annual Report on Form 10-K of Team, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
|
|
/
S
/ S
USAN
M. B
ALL
|
|
Susan M. Ball
Executive Vice President and Chief Financial Officer
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and
|
(2)
|
The information contained in the Annual Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
|
/
S
/ A
MERINO
G
ATTI
|
|
Amerino Gatti
Chief Executive Officer
|
|
March 19, 2019
|
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and
|
(2)
|
The information contained in the Annual Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
|
/
S
/ S
USAN
M. B
ALL
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Susan M. Ball
Executive Vice President and Chief Financial Officer
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March 19, 2019
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