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Dienstag, 09.03.2021 19:42 von PR Newswire | Aufrufe: 52

Team, Inc. Reports Fourth Quarter And Full Year 2020 Results

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PR Newswire

SUGAR LAND, Texas, March 9, 2021

SUGAR LAND, Texas, March 9, 2021 /PRNewswire/ -- Team, Inc. (NYSE: TISI), a global leading provider of integrated, digitally-enabled asset performance assurance and optimization solutions, today reported its financial results for the fourth quarter and full year ended Dec. 31, 2020.

Full Year Highlights:

Reduced full year SG&A by $67.3 million or 20.5% as compared to 2019
Achieved full year cost savings of $110 million – permanent and variable
Generated full year operating cash flow of $52.8 million
Free cash flow generation of $32.8 million – highest level since 2016
Successfully refinanced capital structure, extended debt maturities, and repurchased $137 million of senior convertible notes

Fourth Quarter Highlights:

Reduced quarterly SG&A by $17.2 million or 21.6% as compared to Q4 2019
Cost savings of $35 million in Q4 2020
Operating cash flow of $32.6 million
Free cash flow generation of $29.3 million in Q4 2020

"The last twelve months have been challenging across the globe, but I am proud of what we achieved," said Amerino Gatti, TEAM's Chairman and Chief Executive Officer. "Given the extremely difficult operating environment in 2020, our accomplishments would not have been possible without the commitment and dedication of our people. I am especially proud of our safety performance, as we achieved top quartile results, representing the best safety record in the company's history.

"2020 mandated that we respond decisively to countless changes involving how TEAM and our clients do business in an extremely dynamic operating environment. Throughout the year, we aggressively reduced our cost structure to align with market activity. We achieved $110 million of permanent and variable cost savings for the year, exceeding our prior forecast. Our laser focus and discipline on managing costs allowed TEAM to deliver strong 2020 gross margin of 28.0%, despite a 26.7% year-over-year reduction in revenue.

"Operating in an unprecedented pandemic environment was challenging as our clients drastically reduced activity levels during the year, however, activity increased in September and October that was supported by call-out, projects and the Gulf Coast divisions' hurricane repair work. Revenue was negatively impacted late in the year due to further global COVID‑related shutdowns and travel restrictions, a condensed turnaround season, and a slower than expected holiday period.

"Throughout 2020, we were proactive in taking a number of deliberate steps to prepare for the recovery cycle. TEAM implemented a new capital structure that includes $400 million of new capital and retired $137 million of convertible senior notes, providing significant financial flexibility and extending debt maturities. In addition, we recently announced a new organizational structure to leverage the core strengths of our three segments, continue sector diversification, and enhance client value. Finally, we published our inaugural ESG report that further demonstrates our core values and commitment to operate in an environmentally sustainable manner.

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"Looking ahead, our first quarter headwinds include project and maintenance deferrals, scope reductions, and an adverse impact on our business from severe February weather across many parts of the U.S. We expect our revenues in the first quarter will be the lowest of the year and progressively increase throughout 2021. The full year outlook is encouraging as the COVID-19 vaccine roll-out accelerates and we are seeing increased activity and greater confidence in the market recovery. The oil and gas supply/demand imbalance has significantly improved with oil prices back to pre-COVID levels and refining margins in line with seasonal norms. TEAM expects to benefit from delayed and deferred projects and our 2020 accomplishments – as well as our recent actions to scale and streamline the business – have positioned the company for growth in 2021 and beyond," concluded Mr. Gatti.

Financial Results

Consolidated net loss in the fourth quarter of 2020 was $14.9 million ($0.48 loss per diluted share) compared to net loss of $7.2 million ($0.24 loss per diluted share) in the fourth quarter of 2019. Consolidated Adjusted EBITDA, a non-GAAP measure, was $13.1 million for the fourth quarter of 2020 compared to $23.2 million for the prior year quarter. (See the accompanying reconciliation of non-GAAP measures at the end of this earnings release.)

Consolidated revenues for the fourth quarter of 2020 were $207.3 million compared to $287.8 million in the prior year quarter. Revenue decreased due to lower activity levels primarily resulting from the impact of COVID-19 and the global oil supply/demand imbalance. In the fourth quarter of 2020, consolidated gross margin was $60.1 million, or 29.0%, compared with 29.2% in the same quarter a year ago.

SG&A for the fourth quarter was $62.5 million, down $17.2 million, or a 21.6% improvement from the fourth quarter of 2019. The company's adjusted measure of net income/loss, Consolidated Adjusted EBIT, was a loss of $0.4 million in the fourth quarter compared to $9.4 million in the prior year comparable quarter.

Fourth quarter 2020 reported results include certain net charges not indicative of Team's core operating activities, including: $0.6 million of costs related to the OneTEAM program, $0.9 million of severance charges associated with the impact of COVID-19, $2.2 million loss on debt extinguishment and $0.5 million of certain professional fees and other non-recurring costs. Net of tax, these items totaled $3.3 million or $0.11 per diluted share.

For the full year 2020, consolidated revenues were $852.5 million, compared to $1.16 billion in 2019. Net loss was $237.2 million, or $7.74 loss per diluted share, compared to a net loss of $32.4 million, or $1.07 loss per diluted share in 2019. The net loss of $237.2 million in 2020 includes a pre-tax, non-cash, goodwill impairment charge of $191.8 million associated with the company's IHT segment. On an after tax basis, the goodwill charge was $178.6 million or $5.83 per diluted share. Consolidated Adjusted EBITDA, a non-GAAP measure, was $40.0 million for the full year 2020 compared to $80.3 million in 2019. Net cash provided by operating activities was $52.8 million in 2020, compared to $58.8 million in 2019.

Adjusted net loss, consolidated adjusted EBIT, consolidated adjusted EBITDA and free cash flow are non-GAAP financial measures that exclude certain items that are not indicative of Team's core operating activities. A reconciliation of these non-GAAP financial measures to the most comparable GAAP financial measures is at the end of this release.

Segment Results

The following table illustrates the composition of the company's revenue and operating income (loss) by segment for the quarters ended Dec. 31, 2020 and 2019 (in thousands):

	Three Months Ended December 31,				Increase (Decrease)
	2020		2019		$		%
	(unaudited)		(unaudited)
Revenues by business segment:
IHT	$	89,748	$	120,857	$	(31,109)	(25.7)	%
MS	93,407		133,324		(39,917)		(29.9)	%
Quest Integrity	24,148		33,626		(9,478)		(28.2)	%
Total	$	207,303	$	287,807	$	(80,504)	(28.0)	%
Operating income (loss):
IHT	$	5,052	$	6,226	$	(1,174)	(18.9)	%
MS	5,377		13,663		(8,286)		(60.6)	%
Quest Integrity	6,673		10,667		(3,994)		(37.4)	%
Corporate and shared support services	(19,463)		(27,338)		7,875		28.8	%
Total	$	(2,361)	$	3,218	$	(5,579)	NM¹

________________
1	NM - Not meaningful

The decrease in year-over-year activity levels across the company was due to the negative impact of the COVID-19 pandemic, the global oil supply/demand imbalance, and a slow holiday season, resulting in the postponement of client projects and lower demand for the company's services.

Given the nature and locality of Quest Integrity's business, Quest was particularly impacted by the pandemic as stay-at-home orders limited travel and necessitated quarantine restrictions. The travel restrictions resulted in many of Quest's fourth quarter projects getting delayed until the first quarter of 2021 or later in the year.

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