Page 1

TEAM Team , Inc. Reports Third Quarter 2021 Results November 12 , 2021 R Entered Into $ 50 Million Subordinated Term Loan Amended Senior Secured Term Loan Financial Covenants SUGAR LAND , Texas , Nov. 12 , 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 third quarter ended Sept. 30 , 2021 . " Our top line results failed to meet expectations due to a combination of factors that impacted our third quarter performance , including weather - related disruptions , challenging market dynamics , and an uneven market recovery , " said Amerino Gatti , TEAM's Chairman and Chief Executive Officer . " While the Inspection and Heat Treating ( IHT ) segment delivered 5 % year - over - year revenue growth , the Mechanical Services ( MS ) and Quest Integrity segments experienced numerous project delays . Our performance was also impacted by a delayed start to our fall turnaround projects and power outages along the Gulf Coast from Hurricane Ida , forcing refining and petrochemical facilities offline . " During the quarter , we continued to face margin pressure from inflationary costs in several areas , such as raw materials and transportation , as well as increased costs associated with enhanced hiring programs and technician training . In addition , we absorbed higher expenses associated with the elimination of the temporary cost actions that were put in place in late March 2020. We also experienced a decline in higher margin service lines and overall activity . " TEAM remains focused on cost discipline as the company looks for ways to reduce its internal cost structure and mitigate inflationary pressures to improve margins . We have begun working with our clients to proactively adjust pricing to reflect the increased cost environment amid tightening market conditions . In the quarter , TEAM implemented several internal initiatives to lower costs by reducing operating expenses , corporate overhead , and supply chain costs , however , these reductions are expected to be offset by increased professional and advisory fees . " The delayed fall turnaround projects kicked off in late September and trended even higher in October , as both our domestic and international activity levels significantly increased . The step change in activity levels coupled with the billing and collection cycle created a large seasonal working capital deficit . The new $ 50 million subordinated term loan which closed on November 9 , 2021 improves our working capital position and , with our existing term loan financial covenants waived until September 30 , 2022 , provides us with additional financial flexibility . " Looking ahead , we expect to capitalize on recent market tailwinds , while remaining focused on our capabilities and long - term strategic growth . Despite the uneven economic recovery , we continue to further diversify our revenue into new markets , increase our footprint in the aerospace and defense sectors , and advance our technology ventures . We remain encouraged by the fundamental outlook for our industry across all our geographic regions and multiple end markets and expect to benefit from a robust industry over the next several years , " concluded Mr. Gatti . Financial Results Consolidated net loss in the third quarter of 2021 was $ 91.2 million ( $ 2.94 loss per diluted share ) compared to a loss of $ 9.1 million ( $ 0.30 loss per diluted share ) in the third quarter of 2020. Consolidated Adjusted EBITDA , a non - GAAP measure , was $ 1.0 million for the third quarter of 2021 compared to $ 18.2 million for the prior year quarter . Consolidated revenue for the third quarter of 2021 was $ 217.4 million , in - line with $ 219.1 million in the prior year quarter . In the third quarter of 2021 , consolidated gross margin was $ 53.3 million , or 24.5 % , compared to $ 63.7 million , or 29.1 % , in the same quarter a year ago . Gross margin was negatively impacted by inflationary cost pressures , including items such as materials and labor , and a relative increase in lower margin service lines . SG & A for the third quarter of 2021 was $ 67.6 million , up $ 6.5 million , or 10.6 % , from the third quarter of 2020. The company's adjusted measure of net income / loss , consolidated Adjusted EBIT , was a loss of $ 10.2 million in the third quarter of 2021 compared to positive $ 5.6 million in the prior year quarter . Third quarter 2021 reported results include certain net charges not indicative of TEAM's core operating activities , including a non - cash goodwill impairment charge of $ 55.8 million for MS , $ 1.7 million of professional and severance costs and $ 2.7 million for accrued legal matters and other legal fees . Net of tax , these items totaled $ 60.0 million , or $ 1.94 per diluted share . Adjusted net loss , consolidated Adjusted EBIT , and consolidated Adjusted EBITDA 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 Sept. 30 , 2021 and 2020 ( in thousands ) : Three Months Ended September 30 , 2021 Increase ( Decrease ) 2020 $ %