Team(US:TISI)2025-08-12 20:32PART I—FINANCIAL INFORMATION Financial Statements Presents unaudited condensed consolidated financial statements for TEAM, Inc. as of June 30, 2025, and for the three and six months ended June 30, 2025 and 2024 Condensed Consolidated Balance Sheets Total assets reached $548.4 million, liabilities $571.3 million, leading to a $22.9 million shareholders' deficit by June 30, 2025 Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | $548,361 | $528,365 | | Total current assets | $326,496 | $305,103 | | Total Liabilities | $571,285 | $526,627 | | Long-term debt and finance lease obligations | $366,381 | $318,626 | | Total shareholders' equity (deficit) | ($22,924) | $1,738 | Condensed Consolidated Statements of Operations Q2 2025 revenues grew to $248.0 million, net loss widened to $4.3 million; six-month net loss reached $34.0 million due to debt extinguishment Q2 2025 vs Q2 2024 Performance (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Revenues | $248,026 | $228,618 | | Gross Margin | $68,089 | $63,554 | | Operating Income | $12,103 | $11,159 | | Net Loss | ($4,266) | ($2,763) | | Loss per Share (Basic & Diluted) | ($0.95) | ($0.63) | Six Months Ended June 30 Performance (in thousands, except per share data) | Metric | 6M 2025 | 6M 2024 | | :--- | :--- | :--- | | Revenues | $446,681 | $428,218 | | Operating Income | $6,100 | $4,773 | | Loss on debt extinguishment | ($11,853) | $0 | | Net Loss | ($33,984) | ($19,958) | | Loss per Share (Basic & Diluted) | ($7.56) | ($4.52) | Condensed Consolidated Statements of Cash Flows Net cash used in operating activities increased to $32.0 million for six months, resulting in a $14.8 million overall cash decrease Cash Flow Summary for Six Months Ended June 30 (in thousands) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | ($32,005) | ($4,466) | | Net cash used in investing activities | ($4,316) | ($5,620) | | Net cash provided by (used) in financing activities | $21,161 | ($2,500) | | Net decrease in cash and cash equivalents | ($14,836) | ($12,966) | Notes to Unaudited Condensed Consolidated Financial Statements Detailed explanations of financial statements, covering business segments, debt refinancing, and significant legal contingencies - The company operates in two segments: Inspection and Heat Treating (IHT) and Mechanical Services (MS), providing specialized industrial services to heavy industries24 - In March 2025, the company undertook significant debt refinancing, entering into a new First Lien Term Loan Agreement and a Second Amended and Restated Second Lien Term Loan Credit Agreement, using the proceeds to repay several existing loans556061 - The Kelli Most litigation case was re-filed in U.S. District Court in March 2025. The company has accrued a liability of $39.0 million, which it expects to be fully covered by insurance84 Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Q2 and six-month financial performance, including segment results, liquidity, and non-GAAP reconciliations Results of Operations Q2 2025 revenues grew 8.5% to $248.0 million driven by IHT; six-month revenues increased 4.3% to $446.7 million, but net loss widened to $34.0 million Q2 2025 vs Q2 2024 Revenue by Segment (in thousands) | Segment | Q2 2025 | Q2 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | IHT | $130,396 | $113,234 | $17,162 | 15.2% | | MS | $117,630 | $115,384 | $2,246 | 1.9% | | Total | $248,026 | $228,618 | $19,408 | 8.5% | Six Months 2025 vs 2024 Revenue by Segment (in thousands) | Segment | 6M 2025 | 6M 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | IHT | $236,611 | $212,682 | $23,929 | 11.3% | | MS | $210,070 | $215,536 | ($5,466) | (2.5)% | | Total | $446,681 | $428,218 | $18,463 | 4.3% | - A loss on debt extinguishment of $11.9 million was recognized in the first six months of 2025 due to debt refinancing transactions121 Non-GAAP Financial Measures and Reconciliations Consolidated Adjusted EBITDA for Q2 2025 was $24.5 million, and $29.8 million for the six-month period, after various adjustments Reconciliation of Net Loss to Consolidated Adjusted EBITDA (in thousands) | Metric | Q2 2025 | Q2 2024 | 6M 2025 | 6M 2024 | | :--- | :--- | :--- | :--- | :--- | | Net loss | ($4,266) | ($2,763) | ($33,984) | ($19,958) | | Adjustments (Taxes, Interest, D&A, Non-core items, etc.) | $28,737 | $24,576 | $63,765 | $48,278 | | Consolidated Adjusted EBITDA | $24,471 | $21,813 | $29,781 | $28,320 | Liquidity and Capital Resources As of June 30, 2025, $32.7 million available borrowing capacity and debt covenant compliance were maintained, with cash used in operations increasing - As of June 30, 2025, the company had $32.7 million of available borrowing capacity, consisting of $22.7 million under Revolving Credit Loans and $10.0 million under the Second Lien Delayed Draw Term Loans140 - The company was in compliance with its debt covenants as of June 30, 2025141 - Net cash used in operating activities increased by $27.5 million to $32.0 million for the first six months of 2025 compared to the same period in 2024, primarily due to higher negative working capital impacts148 Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, TEAM, Inc. is not required to provide market risk disclosures - As a smaller reporting company, TEAM, Inc. is not required to provide quantitative and qualitative disclosures about market risk156 Controls and Procedures Disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting - The CEO and CFO concluded that as of June 30, 2025, the company's disclosure controls and procedures were effective157 - No material changes were made to the company's internal control over financial reporting during the quarter ended June 30, 2025158 PART II—OTHER INFORMATION Legal Proceedings This section refers to Note 13 of the financial statements for details on ongoing legal proceedings - For details on legal proceedings, the report directs readers to Note 13 - Commitments and Contingencies in the financial statements160 Risk Factors No material changes to the company's risk factors were reported since its Annual Report on Form 10-K - No material changes in risk factors were reported since the company's Annual Report on Form 10-K161 Other Information No directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during Q2 2025 - No directors or officers adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the second quarter of 2025162 Exhibits This section lists exhibits filed with the Form 10-Q, including certificates and Sarbanes-Oxley Act certifications