Performance Overview and Corporate Developments [Third Quarter 2024 Financial Highlights](index=1&type=section&id=Third%20Quarter%202024%20Results%20Compared%20to%20Third%20Quarter%202023%20Results) Acuren reported **14.1% revenue growth** and **14.8% Adjusted EBITDA growth** in Q3 2024, offset by a significant net loss from acquisition impacts Q3 2024 vs. Q3 2023 Combined Financial Results | Metric | Q3 2024 (Combined) | Q3 2023 (Predecessor) | Change | | :--- | :--- | :--- | :--- | | **Revenue** | $303.0M | $265.5M | +14.1% | | **Gross Profit** | $74.7M | $64.2M | +16.4% | | **Adjusted Gross Profit** | $89.8M | $77.8M | +15.4% | | **Adjusted Gross Margin** | 29.6% | 29.3% | +30 bps | | **Net Income (Loss)** | ($85.9M) | $1.0M | N/A | | **Adjusted EBITDA** | $51.3M | $44.7M | +14.8% | | **Adjusted EBITDA Margin** | 16.9% | 16.8% | +10 bps | [Nine Months 2024 Financial Highlights](index=1&type=section&id=Nine%20Months%202024%20Results%20Compared%20to%20First%20Nine%20Months%202023%20Results) Acuren's nine-month combined revenue grew **7.1%** and Adjusted EBITDA increased **15.2%**, but reported a **$92.6 million** net loss due to acquisition impacts Nine Months 2024 vs. Nine Months 2023 Combined Financial Results | Metric | Nine Months 2024 (Combined) | Nine Months 2023 (Predecessor) | Change | | :--- | :--- | :--- | :--- | | **Revenue** | $835.4M | $779.9M | +7.1% | | **Gross Profit** | $211.2M | $180.6M | +16.9% | | **Adjusted Gross Profit** | $244.8M | $221.6M | +10.5% | | **Adjusted Gross Margin** | 29.3% | 28.4% | +90 bps | | **Net Income (Loss)** | ($92.6M) | $8.2M | N/A | | **Adjusted EBITDA** | $145.9M | $126.7M | +15.2% | | **Adjusted EBITDA Margin** | 17.5% | 16.2% | +130 bps | [Management Commentary](index=2&type=section&id=Management%20Commentary) Management attributes strong performance to demand and pricing, highlighting the S-4 effectiveness and confidence in future value creation - CEO Tal Pizzey stated that strong results were driven by increased demand from recurring customers, new sales in target markets, and pricing initiatives from 2023[6](index=6&type=chunk) - Co-Chairman Robert A.E. Franklin highlighted the company's strong balance sheet, including over **$130 million in cash**, and significant EBITDA growth as foundations for delivering long-term value[6](index=6&type=chunk) - The company's S-4 registration statement has been declared effective, paving the way for an imminent OTC trading debut and a planned NYSE listing in the new year[6](index=6&type=chunk) [Planned Relisting and Corporate Developments](index=2&type=section&id=Planned%20Relisting) Acuren completed a **$1.88 billion** acquisition, re-domiciled to Delaware, and plans OTC trading by year-end with an NYSE listing in Q1 2025 - The company completed the ASP Acuren Acquisition for **$1.88 billion** on July 30, 2024[7](index=7&type=chunk) - On December 16, 2024, the company's Form S-4 was declared effective, and it re-domiciled into a Delaware corporation[7](index=7&type=chunk) - Acuren plans to begin trading on the OTC Market by the end of 2024 and apply for an NYSE listing during Q1 2025[7](index=7&type=chunk) Consolidated Financial Statements [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets increased to **$2.33 billion** by Sep 30, 2024, driven by the ASP Acuren acquisition, with total liabilities rising to **$1.12 billion** Balance Sheet Highlights (in thousands) | Account | Sep 30, 2024 (Successor) | Dec 31, 2023 (Predecessor) | | :--- | :--- | :--- | | **Cash and cash equivalents** | $132,458 | $87,061 | | **Total current assets** | $426,705 | $333,913 | | **Goodwill** | $898,165 | $511,501 | | **Intangible assets, net** | $768,693 | $264,335 | | **Total assets** | $2,328,115 | $1,262,615 | | **Total current liabilities** | $117,785 | $112,884 | | **Debt, net of current portion** | $748,294 | $668,031 | | **Total liabilities** | $1,116,752 | $880,616 | | **Total equity** | $1,211,363 | $381,999 | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Other%20Comprehensive%20Income%20%28Loss%29) Combined revenue for the nine months was **$835.4 million**, but a **$92.6 million** net loss was incurred, largely due to the Successor period's operating loss Nine Months Ended Sep 30 - Statement of Operations (in thousands) | Metric | 2024 Successor (Jul 30-Sep 30) | 2024 Predecessor (Jan 1-Jul 29) | 2023 Predecessor (Jan 1-Sep 30) | | :--- | :--- | :--- | :--- | | **Service revenue** | $201,485 | $633,866 | $779,923 | | **Gross profit** | $49,204 | $161,985 | $180,591 | | **Income (loss) from operations** | ($79,185) | $36,148 | $44,699 | | **Net income (loss)** | ($89,824) | ($2,778) | $8,193 | Third Quarter - Statement of Operations (in thousands) | Metric | 2024 Successor (Jul 30-Sep 30) | 2024 Predecessor (Jul 1-Jul 29) | 2023 Predecessor (Jul 1-Sep 30) | | :--- | :--- | :--- | :--- | | **Service revenue** | $201,485 | $101,512 | $265,535 | | **Gross profit** | $49,204 | $25,518 | $64,207 | | **Income (loss) from operations** | ($79,185) | $2,405 | $16,112 | | **Net income (loss)** | ($89,824) | $3,943 | $1,018 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating activities provided **$3.98 million** cash, while investing activities used **$1.89 billion** for the ASP Acuren acquisition, funded by **$1.43 billion** from financing - Net cash used in investing activities for the nine-month period was dominated by the **$1.83 billion** payment for the ASP Acuren acquisition[26](index=26&type=chunk) - Financing activities provided a net **$1.42 billion** in cash, largely from borrowings of **$775 million** and proceeds from the issuance of ordinary shares of **$666.6 million**[26](index=26&type=chunk) - The company's cash and cash equivalents decreased from **$87.1 million** at the start of the year to a combined **$132.5 million** at the end of the period, after accounting for cash acquired in the acquisition[26](index=26&type=chunk) Non-GAAP Measures and Reconciliations [Explanation of Non-GAAP Financial Measures](index=3&type=section&id=Explanation%20of%20Non-GAAP%20Financial%20Measures) Acuren uses non-GAAP measures like Combined Revenue and Adjusted EBITDA to assess operational performance and trends, aiding consistent period-to-period comparisons - The company presents combined financial information by mathematically adding Predecessor and Successor period data to help management and investors assess ongoing performance and trends[13](index=13&type=chunk) - Management uses non-GAAP measures to view performance, compare with peers, determine incentive compensation, and provide consistent period-to-period comparisons[15](index=15&type=chunk) [Reconciliation of Combined Revenue](index=8&type=section&id=Reconciliation%20of%20Combined%20Revenue) This section details the calculation of Combined Revenue for Q3 and the first nine months of 2024 by summing Predecessor and Successor periods Combined Revenue Reconciliation (in thousands) | Period | Predecessor Revenue | Successor Revenue | Total Combined Revenue | | :--- | :--- | :--- | :--- | | **Nine Months ended Sep 30, 2024** | $633,866 | $201,485 | $835,351 | | **Three Months ended Sep 30, 2024** | $101,512 | $201,485 | $302,997 | [Reconciliation of Adjusted Gross Profit](index=9&type=section&id=Reconciliation%20of%20Adjusted%20Gross%20Profit%20and%20Gross%20Margin%20Percentage) Acuren reconciles GAAP Gross Profit to Adjusted Gross Profit by adding back depreciation, with the Combined Adjusted Gross Profit Margin improving to **29.3%** for the nine months Nine Months Adjusted Gross Profit Reconciliation (in thousands) | Metric | Nine Months 2024 (Combined) | Nine Months 2023 (Predecessor) | | :--- | :--- | :--- | | **Gross Profit** | $211,189 | $180,591 | | **Depreciation expense add-back** | $33,604 | $40,989 | | **Adjusted Gross Profit** | $244,793 | $221,580 | | **Adjusted Gross Margin %** | 29.3% | 28.4% | [Reconciliation of Adjusted EBITDA](index=10&type=section&id=Reconciliation%20of%20Adjusted%20EBITDA%20to%20Net%20Income%20%28Loss%29) Combined Adjusted EBITDA for the nine months reached **$145.9 million**, a **15.2%** increase, with margin expanding to **17.5%**, after significant non-cash and transaction cost adjustments Nine Months Adjusted EBITDA Reconciliation (in thousands) | Metric | Nine Months 2024 (Combined) | Nine Months 2023 (Predecessor) | | :--- | :--- | :--- | | **Net Income (Loss)** | ($92,602) | $8,193 | | **Adjustments (Taxes, Interest, D&A)** | $108,820 | $107,602 | | **EBITDA** | $16,218 | $115,795 | | **Other Adjustments** | $129,720 | $10,901 | | **Adjusted EBITDA** | $145,938 | $126,696 | | **Adjusted EBITDA Margin %** | 17.5% | 16.2% | - Major adjustments for the nine months of 2024 included **$69.8 million** in one-time non-cash equity charges and **$29.8 million** in ASP Acuren transaction-related expenses[35](index=35&type=chunk)