Team(US:TISI)2025-11-12 21:49Revenue Performance - Total revenues increased by $14.2 million or 6.7% year-over-year, reaching $224.976 million for the three months ended September 30, 2025[134] - IHT revenues rose by $6.2 million or 5.7%, driven by $5.0 million from higher callout and nested activity in the U.S.[134] - MS revenues increased by $8.0 million or 7.8%, largely due to a $7.9 million rise in U.S. turnaround activities[134] - Total revenues increased by $32.7 million or 5.1% year-over-year, reaching $671.7 million in the nine months ended September 30, 2025[140] - IHT segment revenue rose by $30.1 million or 9.4%, driven by a $23.0 million increase in U.S. revenue from large turnaround projects and enhanced testing services[140] Operating Income and Expenses - Operating income decreased by $1.8 million to $1.3 million, with IHT operating income increasing by $1.7 million or 16.9%[135] - MS operating income rose by $1.4 million or 31.2%, while corporate operating loss increased by $4.9 million due to higher non-recurring costs[135] - Operating income decreased by $0.5 million or 6.2% to $7.4 million, with IHT operating income increasing by $8.5 million or 30.9%[141] - MS segment operating income fell by $4.3 million or 22.5%, primarily due to decreased international project activity[141] - Non-core expenses totaled $10.5 million, impacting operating income, which would have been $18.0 million excluding these items[143] Net Loss and Adjusted Metrics - The company reported a net loss of $45.4 million, a 46.2% increase compared to the prior year[140] - Adjusted operating income improved by $8.0 million or 80.7% from the prior year, reaching $18.0 million[143] - Adjusted Net Loss for Q3 2025 was $6,062,000, an improvement from $12,538,000 in Q3 2024, while the nine-month loss decreased from $29,264,000 in 2024 to $21,812,000 in 2025[154] - Consolidated Adjusted EBITDA increased to $14,541,000 in Q3 2025 from $11,311,000 in Q3 2024, and for the nine months, it rose from $39,631,000 in 2024 to $44,322,000 in 2025[157] Cash Flow and Liquidity - Free Cash Flow for Q3 2025 was $1,044,000, down from $3,914,000 in Q3 2024, while the nine-month Free Cash Flow showed a significant decline from $(6,311,000) in 2024 to $(35,277,000) in 2025[167] - As of September 30, 2025, the company had approximately $46.5 million of available borrowing capacity under credit facilities, including $36.5 million under Revolving Credit Loans[164] - Operating activities generated a cash outflow of $(28,122,000) for the nine months ended September 30, 2025, compared to a cash inflow of $1,143,000 in the same period of 2024[167] - Total liquidity as of November 10, 2025, was $73.2 million, including $8.1 million in cash and cash equivalents and $65.1 million of undrawn availability under credit facilities[166] Debt and Interest Expense - Interest expense remained consistent at $11.855 million, with cash interest paid increasing to $9.8 million from $7.1 million year-over-year[137] - Interest expense, net decreased by $0.6 million, attributed to lower interest rates on loans, with cash interest paid totaling $22.6 million in 2025[144] - The company reported a significant increase in interest expense, netting $11,855,000 for Q3 2025, compared to $11,770,000 in Q3 2024, indicating rising costs associated with debt[157] - Total debt and finance obligations decreased to $302.8 million as of September 30, 2025, down from $325.1 million at December 31, 2024, reflecting a $22.3 million reduction primarily due to paydowns on loans[169] Tax Provision - The provision for income tax was $0.9 million on a pre-tax loss of $10.5 million, resulting in an effective tax rate of 9.1%[139] - The provision for income tax was $2.2 million on a pre-tax loss of $43.3 million, resulting in an effective tax rate of 5.0%[147] Foreign Currency and Other Income - Other income increased by $3.3 million, primarily due to favorable foreign currency fluctuations[138] - The effect of foreign exchange rate changes on cash for the nine months ended September 30, 2025, was $0.3 million, compared to a negative $0.3 million in 2024, mainly due to fluctuations in the U.S. Dollar against other currencies[176] Debt Issuance and Refinancing - The company experienced a loss on debt extinguishment of $1.283 million related to the prepayment of the 2025 Second Lien Term Loans[138] - Loss on debt extinguishment amounted to $13.1 million due to refinancing activities, including $7.4 million of noncash unamortized debt issuance costs[145] - The company incurred $11.4 million in debt issuance costs related to refinancing transactions completed as of March 12, 2025[174] Compliance and Accounting Policies - The company maintained compliance with its debt covenants as of September 30, 2025, which is crucial for its financial stability moving forward[165] - There were no material changes to critical accounting policies during the nine months ended September 30, 2025[178] - As a smaller reporting company, the company is not required to provide detailed market risk disclosures[179]