Acuren Corp(TIC) - 2025 Q1 - Quarterly Results

1. Executive Summary & First Quarter 2025 Highlights 1.1. Overall Performance Acuren Corporation reported a 5.0% revenue increase in Q1 2025, driven by service penetration and market share gains - Acuren Corporation reported its financial results for the three months ended March 31, 2025[2] - The company reiterates its 2025 outlook[1] Q1 2025 Revenue Performance | Metric | Value | | :----- | :---- | | Revenue | $234.2 million | | Growth (YoY) | 5.0% | 1.2. Management Commentary Management highlighted 7.2% organic growth, solid free cash flow, and a focus on operational discipline for sustainable growth - The company delivered 7.2% organic growth in Q1 2025, demonstrating resilience in recurring revenues despite a cautious economic environment[4] - Solid free cash flow was achieved, and the balance sheet was further solidified with debt repricing[4] - First quarter margins reflect a higher contribution from lower-margin 'run and maintain' site work[4] - Management remains focused on organic growth, pricing discipline, and delivering sustainable growth, expanding margins, and building a premier testing, inspection, certification, and compliance (TICC) organization[4][6] 1.3. Key Financial Highlights Q1 2025 revenue grew 5.0%, but net loss widened significantly to $25.9 million due to acquisition and public company costs - The increase in revenue was primarily driven by strong organic performance, including higher run and maintain revenue and service line expansion[10] - The higher Successor Net Loss for Q1 2025 includes increased depreciation and amortization related to the ASP Acuren Acquisition, a valuation allowance on a deferred tax asset, and planned public company and business transformation costs[10] - Decreases in Adjusted EBITDA and margin are primarily attributable to planned public company costs in the Successor quarter and certain high-margin, discreet activities in the prior Predecessor quarter, partially offset by a higher contribution from run and maintain customer sites[10] Q1 2025 Key Financial Highlights (Successor vs. Predecessor) | Metric | Successor Q1 2025 | Predecessor Q1 2024 | Change (YoY) | | :------------------ | :------------------ | :------------------ | :----------- | | Revenue | $234.2 million | $223.1 million | +5.0% | | Net Loss | ($25.9 million) | ($1.3 million) | -1892.3% | | Adjusted EBITDA | $25.9 million | $35.5 million | -27.1% | | Adjusted EBITDA Margin | 11.0% | 15.9% | -4.9 pp | 2. Company Information 2.1. About Acuren Corporation Acuren is a leading North American provider of critical asset integrity services for recurring industrial maintenance needs - Acuren is a leading provider of critical asset integrity services, operating primarily in North America[13] - The company serves a broad range of industrial markets, focusing on recurring maintenance needs[13] - Services include Testing, Inspection, Certification, and Compliance (TICC), such as Nondestructive Testing (NDT) in the field and laboratory, and in-lab destructive testing capabilities[13] 2.2. Forward-Looking Statements This section outlines inherent risks and uncertainties that could cause actual results to differ materially from projections - The press release contains forward-looking statements, which are subject to risks, uncertainties, and other factors that could cause actual results to differ materially[14][15] - Key risks include economic conditions, customer willingness to invest, decline in demand, contract renewals, acquisition integration, competition, cost management, material costs, inherent dangers of services, seasonality, and indebtedness[15] - The company does not undertake any obligation to update or revise publicly any forward-looking statements, except as required by applicable law[15] 2.3. Non-GAAP Financial Measures Introduction Acuren utilizes non-GAAP measures like Adjusted EBITDA to provide a clearer view of its operational performance - The press release includes non-GAAP financial measures such as Adjusted Gross Profit, Adjusted Gross Profit Margin, Adjusted EBITDA, Adjusted EBITDA Margin, Organic Change in Service Revenue, and Adjusted Selling, General and Administrative (SG&A) expenses[16] - These non-GAAP measures are used by management to evaluate performance, compare with peers, determine incentive compensation, and provide consistent period-to-period comparisons[18] - Non-GAAP measures are considered supplemental and not a substitute for or superior to GAAP financial information[19] 3. Consolidated Financial Results 3.1. Consolidated Balance Sheets As of March 31, 2025, Acuren reported total assets of $2.18 billion and total stockholders' equity of $1.13 billion Consolidated Balance Sheet Highlights (Amounts in thousands) | Metric | March 31, 2025 (Successor) | December 31, 2024 | | :-------------------------- | :------------------------- | :---------------- | | Cash and cash equivalents | $155,739 | $139,134 | | Accounts receivable, net | $206,652 | $236,520 | | Total current assets | $376,667 | $394,236 | | Goodwill | $848,977 | $845,939 | | Total assets | $2,180,280 | $2,207,739 | | Total current liabilities | $107,928 | $106,331 | | Debt, net of current portion | $744,706 | $747,048 | | Total liabilities | $1,051,233 | $1,056,567 | | Total stockholders' equity | $1,129,047 | $1,151,172 | 3.2. Consolidated Statements of Operations and Comprehensive Income (Loss) For Q1 2025, Acuren's service revenue grew to $234.2 million, but the company incurred a net loss of $25.8 million - Service revenue increased by 5.0% from the Predecessor period, driven by strong organic performance[10][24] - The significant increase in net loss is attributed to higher depreciation and amortization from the ASP Acuren Acquisition, a deferred tax asset valuation allowance, and planned public company and business transformation costs[10][24] Consolidated Statements of Operations Highlights (Amounts in thousands) | Metric | Successor Q1 2025 | Predecessor Q1 2024 | | :------------------------------------------ | :------------------ | :------------------ | | Service revenue | $234,215 | $223,062 | | Cost of revenue | $190,546 | $167,214 | | Gross profit | $43,669 | $55,848 | | Selling, general and administrative expenses | $52,458 | $41,854 | | Income (loss) from operations | ($9,440) | $13,994 | | Net loss | ($25,793) | ($1,271) | | Basic loss per Common Share | ($0.21) | ($0.25) | 3.3. Condensed Consolidated Statements of Cash Flows Acuren generated $32.8 million in operating cash flow in Q1 2025, resulting in a net cash increase of $16.6 million - Operating cash flow improved significantly, driven by changes in accounts receivable and prepaid expenses[26] - Investing activities included $8.0 million for business acquisitions and $4.5 million for property, plant, and equipment purchases[26] Condensed Consolidated Statements of Cash Flows Highlights (Amounts in thousands) | Cash Flow Activity | Successor Q1 2025 | Predecessor Q1 2024 | | :-------------------------------- | :------------------ | :------------------ | | Net cash provided by operating activities | $32,792 | $20,922 | | Net cash used in investing activities | ($12,213) | ($34,361) | | Net cash provided by (used in) financing activities | ($5,605) | $15,701 | | Net change in cash and cash equivalents | $16,605 | $2,811 | | Cash and cash equivalents, End of period | $155,739 | $89,872 | 4. Capital Resources, Liquidity & Outlook 4.1. Capital Resources and Liquidity As of March 31, 2025, Acuren maintained total liquidity of $224.9 million, including $155.7 million in cash Capital Resources and Liquidity (as of March 31, 2025) | Metric | Amount | | :-------------------------------- | :------------- | | Total liquidity | $224.9 million | | Cash and cash equivalents | $155.7 million | | Undrawn revolving credit facility | $75.0 million | | Total term loan debt (net) | $752.4 million | | Common Stock outstanding (basic) | 121,476,215 shares | 4.2. 2025 Guidance Acuren reiterated its full-year 2025 revenue growth expectation in the low-to-mid-single digit percent range - Acuren reiterates its full-year 2025 expectation for revenue growth to be in the low-to-mid-single digit percent range as compared to full year 2024[8] 4.3. Merger with NV5 Acuren and NV5 Global, Inc announced a definitive agreement to combine the two companies - Acuren and NV5 Global, Inc have entered into a definitive agreement to combine the two companies[9] 5. Non-GAAP Financial Reconciliations & Supplemental Data 5.1. Adjusted Gross Profit and Margin Reconciliation Q1 2025 Adjusted Gross Profit was $59.0 million with a margin of 25.2%, down from the prior year's 29.1% Adjusted Gross Profit and Margin (Amounts in thousands) | Metric | Successor Q1 2025 | Predecessor Q1 2024 | | :-------------------------------- | :------------------ | :------------------ | | Gross profit | $43,669 | $55,848 | | Depreciation expense in cost of revenue | $15,362 | $9,061 | | Adjusted gross profit | $59,031 | $64,909 | | Adjusted gross margin percentage | 25.2% | 29.1% | 5.2. Adjusted EBITDA Reconciliation Adjusted EBITDA for Q1 2025 was $25.9 million, a decrease from $35.5 million in the prior year period - Adjustments to net loss for calculating Adjusted EBITDA include depreciation and amortization, interest expense, income taxes, and various non-recurring or non-cash items such as acquisition-related transaction costs and public company business transformation costs[30][31] Adjusted EBITDA Reconciliation (Amounts in thousands) | Metric | Successor Q1 2025 | Predecessor Q1 2024 | | :------------------------------------------ | :------------------ | :------------------ | | Net loss | ($25,793) | ($1,271) | | Provision (benefit) for income taxes | $1,465 | ($710) | | Interest expense, net | $16,007 | $15,982 | | Depreciation and amortization expense | $28,599 | $19,093 | | Acquisition related transaction and integration expenses | $858 | $134 | | ASP Acuren transaction related expenses | $467 | — | | Public company business transformation costs | $2,650 | — | | Non cash stock compensation expense | $1,108 | — | | Adjusted EBITDA | $25,852 | $35,509 | | Adjusted EBITDA margin | 11.0% | 15.9% | 5.3. Organic Change in Service Revenues Acuren reported a 7.2% organic change in service revenues for the first quarter of 2025 - Organic change in service revenues provides a consistent year-over-year comparison by excluding the impacts of material acquisitions, divestitures, and foreign currency translation[17] Organic Change in Service Revenues (Successor Q1 2025) | Component | Change | | :---------------------- | :----- | | Service revenue change (as reported) | 5.0% | | Foreign currency translation | (2.5)% | | Service revenue change (fixed currency) | 7.5% | | Acquisitions | 0.3% | | Organic change in service revenue | 7.2% | 5.4. Adjusted SG&A Expenses Reconciliation Adjusted SG&A expenses for Q1 2025 were $33.3 million, representing 14% of service revenue - Adjustments to SG&A expenses primarily remove non-cash items like amortization and depreciation, as well as one-time or non-recurring charges such as acquisition-related costs and public company transformation expenses[37][38] Adjusted SG&A Expenses Reconciliation (Amounts in thousands) | Metric | Successor Q1 2025 | Predecessor Q1 2024 | | :------------------------------------------ | :------------------ | :------------------ | | SG&A expenses | $52,458 | $41,854 | | Amortization of intangible assets | ($13,002) | ($9,900) | | Depreciation expense | ($235) | ($132) | | Acquisition related transaction and integration expenses | ($1,369) | ($134) | | ASP Acuren transaction related expenses | ($467) | — | | Public company business transformation costs | ($2,536) | — | | Non cash stock compensation expense | ($1,108) | — | | Adjusted SG&A expenses | $33,250 | $29,258 | | Adjusted SG&A as a % of service revenue | 14% | 13% | 5.5. 2024 Interim Adjusted EBITDA Data The company provided a breakdown of Adjusted EBITDA for various interim periods in 2024 - Adjustments for 2024 interim periods include predecessor seller-related expenses, one-time non-cash equity charges, acquisition-related transaction and integration expenses, and ASP Acuren transaction-related expenses[40][41][42] 2024 Interim Adjusted EBITDA (Amounts in thousands) | Period | Net income (loss) | Adjusted EBITDA | | :-------------------------------- | :---------------- | :-------------- | | Three months ended March 31, 2024 (Predecessor) | ($1,271) | $35,509 | | Three months ended June 30, 2024 (Predecessor) | ($5,450) | $59,111 | | One month ended July 30, 2024 (Predecessor) | ($8,983) | $16,252 | | Two months ended September 30, 2024 (Successor) | ($89,824) | $35,066 | | Three months ended December 31, 2024 (Successor) | ($15,628) | $40,745 | 6. Corporate Communications 6.1. Webcast and Conference Call Details Acuren will host a webcast and conference call on May 15, 2025, to discuss its financial results - Acuren will hold a webcast/dial-in conference call to discuss its financial results on Thursday, May 15, 2025, at 8:30 a.m. ET (7:30 a.m. CT)[11] - Participants will include Talman Pizzey (CEO), Kristin Schultes (CFO), and Robert A.E. Franklin (Co-Chairman)[11] - Access to the call is available via telephone (877-407-0789 or 201-689-8562) or webcast[11][12] 6.2. Investor Relations Contacts Investor relations inquiries can be directed to Dan Scott or Rodny Nacier at ICR Inc - Investor Relations Contacts: Dan Scott / Rodny Nacier at ICR Inc[20] - Email for inquiries: IR@acuren.com[20]