Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Oct. 31, 2016 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | TISI | |
Entity Registrant Name | TEAM INC | |
Entity Central Index Key | 318,833 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 29,495,870 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 38,201 | $ 44,825 |
Restricted cash | 0 | 5,000 |
Receivables, net of allowance of $6,432 and $3,548 | 264,503 | 214,324 |
Inventory | 52,438 | 27,936 |
Income tax receivable | 10,152 | 3,893 |
Deferred income taxes | 17,636 | 6,917 |
Prepaid expenses and other current assets | 33,082 | 11,664 |
Current assets of discontinued operations | 12,325 | 0 |
Total current assets | 428,337 | 314,559 |
Property, plant and equipment, net | 212,036 | 124,983 |
Intangible assets, net of accumulated amortization of $32,360 and $21,161 | 163,371 | 99,119 |
Goodwill | 370,726 | 256,654 |
Other assets, net | 4,083 | 2,421 |
Deferred income taxes | 3,869 | 1,255 |
Total assets | 1,182,422 | 798,991 |
Current liabilities: | ||
Current portion of long-term debt | 20,000 | 20,000 |
Accounts payable | 49,448 | 22,364 |
Other accrued liabilities | 82,097 | 49,796 |
Current liabilities of discontinued operations | 1,065 | 0 |
Total current liabilities | 152,610 | 92,160 |
Deferred income taxes | 97,070 | 17,302 |
Long-term debt | 368,831 | 351,383 |
Defined benefit pension liability | 11,751 | 0 |
Other long-term liabilities | 4,109 | 0 |
Total liabilities | 634,371 | 460,845 |
Commitments and contingencies | ||
Equity: | ||
Preferred stock, 500,000 shares authorized, none issued | 0 | 0 |
Common stock, par value $0.30 per share, 60,000,000 shares authorized; 30,226,478 and 21,836,694 shares issued | 9,066 | 6,552 |
Additional paid-in capital | 337,915 | 120,126 |
Retained earnings | 247,681 | 250,980 |
Accumulated other comprehensive loss | (17,880) | (18,374) |
Treasury stock at cost, 821,087 and 546,977 shares | (28,731) | (21,138) |
Total equity | 548,051 | 338,146 |
Total liabilities and equity | $ 1,182,422 | $ 798,991 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Receivables, allowance | $ 6,432 | $ 3,548 |
Intangible assets, accumulated amortization | $ 32,360 | $ 21,161 |
Preferred stock, shares authorized | 500,000 | 500,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value (in usd per share) | $ 0.30 | $ 0.30 |
Common stock, shares authorized | 60,000,000 | 60,000,000 |
Common stock, shares issued | 30,226,478 | 21,836,694 |
Treasury stock at cost, shares | 821,087 | 546,977 |
Unaudited Condensed Consolidate
Unaudited Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Income Statement [Abstract] | ||||
Revenues | $ 289,577 | $ 243,552 | $ 876,871 | $ 671,358 |
Operating expenses | 212,871 | 173,931 | 635,490 | 472,216 |
Gross margin | 76,706 | 69,621 | 241,381 | 199,142 |
Selling, general and administrative expenses | 80,749 | 62,242 | 236,612 | 162,030 |
Loss on revaluation of contingent consideration | 0 | 522 | 2,184 | 522 |
Operating income (loss) | (4,043) | 6,857 | 2,585 | 36,590 |
Interest expense, net | 3,211 | 2,397 | 9,554 | 3,538 |
Foreign currency (gain) loss | (98) | 606 | (197) | 929 |
Other expense (income), net | 37 | 8 | (2) | 1,184 |
Earnings (loss) from continuing operations before income taxes | (7,193) | 3,846 | (6,770) | 30,939 |
Less: Provision (benefit) for income taxes | (2,656) | 1,299 | (2,643) | 10,958 |
Income (loss) from continuing operations | (4,537) | 2,547 | (4,127) | 19,981 |
Income from discontinued operations, net of income tax | 316 | 0 | 828 | 0 |
Net income (loss) | (4,221) | 2,547 | (3,299) | 19,981 |
Less: Income attributable to noncontrolling interest | 0 | 0 | 0 | 213 |
Net income (loss) | $ (4,221) | $ 2,547 | $ (3,299) | $ 19,768 |
Basic earnings (loss) per share: | ||||
Continuing operations (in usd per share) | $ (0.15) | $ 0.13 | $ (0.15) | $ 0.97 |
Discontinued operations (in usd per share) | 0.01 | 0 | 0.03 | 0 |
Net income (loss) (in usd per share) | (0.14) | 0.13 | (0.12) | 0.97 |
Diluted earnings (loss) per share: | ||||
Continuing operations (in usd per share) | (0.15) | 0.12 | (0.15) | 0.92 |
Discontinued operations (in usd per share) | 0.01 | 0 | 0.03 | 0 |
Net income (loss) (in usd per share) | $ (0.14) | $ 0.12 | $ (0.12) | $ 0.92 |
Amounts attributable to Team shareholders: | ||||
Income (loss) from continuing operations, net of income tax | $ (4,537) | $ 2,547 | $ (4,127) | $ 19,768 |
Income from discontinued operations, net of income tax | 316 | 0 | 828 | 0 |
Net income (loss) | $ (4,221) | $ 2,547 | $ (3,299) | $ 19,768 |
Unaudited Condensed Consolidat5
Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ (4,221) | $ 2,547 | $ (3,299) | $ 19,981 |
Foreign currency translation adjustment | (1,178) | (5,256) | 1,872 | (12,155) |
Foreign currency hedge | (104) | (183) | (347) | 1,122 |
Tax benefit (provision) attributable to other comprehensive income (loss) | 287 | 1,811 | (1,031) | 2,365 |
Total comprehensive income (loss) | (5,216) | (1,081) | (2,805) | 11,313 |
Less: Total comprehensive income attributable to noncontrolling interest | 0 | 0 | 0 | 179 |
Total comprehensive income (loss) available to Team shareholders | $ (5,216) | $ (1,081) | $ (2,805) | $ 11,134 |
Unaudited Condensed Consolidat6
Unaudited Condensed Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Treasury Stock | Additional Paid-in Capital | Noncontrolling Interest | Retained Earnings | Accumulated Other Comprehensive Loss |
Balance at beginning of period (in shares) at Dec. 31, 2014 | 20,700,000 | ||||||
Treasury Stock, Balance at beginning of period (in shares) at Dec. 31, 2014 | 0 | ||||||
Balance, beginning of period at Dec. 31, 2014 | $ 339,107 | $ 6,211 | $ 0 | $ 109,700 | $ 5,855 | $ 225,747 | $ (8,406) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income (loss) | 19,981 | 19,981 | |||||
Foreign currency translation adjustment, net of tax | (9,378) | (9,378) | |||||
Foreign currency hedge, net of tax | 710 | 710 | |||||
Non-cash compensation | 4,044 | 4,044 | |||||
Comprehensive income attributable to noncontrolling interest | $ 179 | 179 | (213) | 34 | |||
Purchase of noncontrolling interest (in shares) | 728,000 | 728,000 | |||||
Purchase of noncontrolling interest | $ (5,934) | $ 218 | (118) | (6,034) | |||
Vesting of stock awards (in shares) | 12,000 | ||||||
Vesting of stock awards | (41) | $ 3 | (44) | ||||
Tax benefit of exercise of stock options | $ 1,535 | 1,535 | |||||
Exercise of stock options (in shares) | 241,000 | 241,000 | |||||
Exercise of stock options | $ 3,772 | $ 73 | 3,699 | ||||
Purchase of treasury stock (in shares) | (547,000) | ||||||
Purchase of treasury stock | (21,138) | $ (21,138) | |||||
Balance at end of period (in shares) at Sep. 30, 2015 | 21,681,000 | ||||||
Treasury Stock, Balance at end of period (in shares) at Sep. 30, 2015 | (547,000) | ||||||
Balance, end of period at Sep. 30, 2015 | $ 332,658 | $ 6,505 | $ (21,138) | 118,816 | 0 | 245,515 | (17,040) |
Balance at beginning of period (in shares) at Dec. 31, 2015 | 21,837,000 | ||||||
Treasury Stock, Balance at beginning of period (in shares) at Dec. 31, 2015 | (546,977) | (547,000) | |||||
Balance, beginning of period at Dec. 31, 2015 | $ 338,146 | $ 6,552 | $ (21,138) | 120,126 | 0 | 250,980 | (18,374) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income (loss) | (3,299) | (3,299) | |||||
Foreign currency translation adjustment, net of tax | 725 | 725 | |||||
Foreign currency hedge, net of tax | (231) | (231) | |||||
Non-cash compensation | 6,672 | 6,672 | |||||
Comprehensive income attributable to noncontrolling interest | $ 0 | ||||||
Purchase of noncontrolling interest (in shares) | 0 | ||||||
Vesting of stock awards (in shares) | 39,000 | ||||||
Vesting of stock awards | $ (345) | $ 11 | (356) | ||||
Tax benefit of exercise of stock options | 86 | 86 | |||||
Issuance of common stock in Furmanite acquisition and conversion of Furmanite share-based awards (in shares) | 8,208,000 | ||||||
Issuance of common stock in Furmanite acquisition and conversion of Furmanite share-based awards | $ 211,530 | $ 2,462 | 209,068 | ||||
Exercise of stock options (in shares) | 136,000 | 143,000 | |||||
Exercise of stock options | $ 2,408 | $ 41 | 2,367 | ||||
Purchase of treasury stock (in shares) | (274,110) | (274,000) | |||||
Purchase of treasury stock | $ (7,593) | $ (7,593) | |||||
Other | $ (48) | (48) | |||||
Balance at end of period (in shares) at Sep. 30, 2016 | 30,227,000 | ||||||
Treasury Stock, Balance at end of period (in shares) at Sep. 30, 2016 | (821,087) | (821,000) | |||||
Balance, end of period at Sep. 30, 2016 | $ 548,051 | $ 9,066 | $ (28,731) | $ 337,915 | $ 0 | $ 247,681 | $ (17,880) |
Unaudited Condensed Consolidat7
Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Cash flows from operating activities: | ||
Net income (loss) | $ (3,299) | $ 19,981 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Loss on investment in Venezuela | 0 | 1,177 |
Depreciation and amortization | 35,432 | 20,534 |
Amortization of deferred loan costs | 381 | 262 |
Provision for doubtful accounts | 3,242 | 1,201 |
Foreign currency (gain) loss | (197) | 929 |
Deferred income taxes | (3,552) | 1,366 |
Loss on asset disposal | 10 | 556 |
Loss on revaluation of contingent consideration | 2,184 | 522 |
Non-cash compensation cost | 6,672 | 4,044 |
Other, net | (862) | 0 |
(Increase) decrease, net of the effect of acquisitions: | ||
Receivables | 16,537 | (22,981) |
Inventory | 1,196 | (443) |
Prepaid expenses and other current assets | (6,264) | (3,480) |
Increase (decrease), net of the effect of acquisitions: | ||
Accounts payable | 11,091 | 791 |
Other accrued liabilities | 2,333 | 12,496 |
Income taxes | (4,259) | (10,720) |
Net cash provided by operating activities | 60,645 | 26,235 |
Cash flows from investing activities: | ||
Capital expenditures | (35,865) | (30,549) |
Business acquisitions, net of cash acquired | (48,382) | (263,560) |
Change in restricted cash | 5,000 | (5,000) |
Proceeds from sale of assets | 3,717 | 5,304 |
Decrease (increase) in other assets, net | (69) | 158 |
Change related to Venezuelan operations | 0 | (621) |
Other | 735 | 0 |
Net cash used in investing activities | (74,864) | (294,268) |
Cash flows from financing activities: | ||
Net debt borrowings | 16,043 | 290,140 |
Deferred consideration payments | (694) | (1,242) |
Contingent consideration payments | (1,816) | 0 |
Purchase of treasury stock | (7,593) | (21,138) |
Purchase of noncontrolling interest | 0 | (5,934) |
Debt issuance costs | (759) | (1,950) |
Corporate tax effect from share-based payment arrangements | 108 | 1,535 |
Issuance of common stock from share-based payment arrangements | 2,408 | 3,772 |
Payments related to withholding tax for share-based payment arrangements | (345) | (41) |
Net cash provided by financing activities | 7,352 | 265,142 |
Effect of exchange rate changes on cash | 243 | (2,989) |
Net decrease in cash and cash equivalents | (6,624) | (5,880) |
Cash and cash equivalents at beginning of period | 44,825 | 44,426 |
Cash and cash equivalents at end of period | $ 38,201 | $ 38,546 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES Introduction. Unless otherwise indicated, the terms “Team, Inc.,” “Team,” “the Company,” “we,” “our” and “us” are used in this report to refer to Team, Inc., to one or more of our consolidated subsidiaries or to all of them taken as a whole. We are incorporated in the State of Delaware and our company website can be found at www.teaminc.com . Our corporate headquarters is located at 13131 Dairy Ashford, Suite 600, Sugar Land, Texas, 77478 and our telephone number is (281) 331-6154. Our stock is traded on the New York Stock Exchange (“NYSE”) under the symbol “TISI”. On November 10, 2015, we announced we would change our fiscal year end to December 31 of each calendar year from May 31. Accordingly, we have recast the prior-period comparative financial information presented in this report to align with our new fiscal calendar. We are a leading provider of specialty industrial services, including inspection and assessment, required in maintaining high temperature and high pressure piping systems and vessels that are utilized extensively in the refining, petrochemical, power, pipeline and other heavy industries. We conduct operations in three segments: TeamQualspec Group (“TeamQualspec”) (formerly the Inspection and Heat Treating Services Group), TeamFurmanite Group (“TeamFurmanite”) (formerly the Mechanical Services Group) and Quest Integrity Group (“Quest Integrity”). TeamQualspec provides basic and advanced non-destructive testing (“NDT”) services for the process, pipeline and power sectors, pipeline integrity management services, field heat treating services, as well as associated engineering and assessment services. These services can be offered while facilities are running (on-stream), during facility turnarounds or during new construction or expansion activities. TeamFurmanite, our mechanical services segment, provides turnaround and on-stream services. Turnaround services are project-related and demand is a function of the number and scope of scheduled and unscheduled facility turnarounds as well as new industrial facility construction or expansion activities. The turnaround services TeamFurmanite provides include field machining, technical bolting, field valve repair, heat exchanger repair, and isolation test plugging services. On-stream services offered by TeamFurmanite represent the services offered while plants are operating and under pressure. These services include leak repair, fugitive emissions control and hot tapping. Quest Integrity provides integrity and reliability management solutions for the process, pipeline and power sectors. These solutions encompass two broadly-defined disciplines: (1) highly specialized in-line inspection services for unpiggable process piping and pipelines using proprietary in-line inspection tools and analytical software; and (2) advanced condition assessment services through a multi-disciplined engineering team. We believe there is a general growth in market demand for inspection and assessment services as improved inspection technologies enable better information about asset reliability to be available to facility owners and operators. We offer these services in over 220 locations in 22 countries throughout the world with more than 8,300 employees. Our industrial services are available 24 hours a day, 7 days a week, 365 days a year. We market our services to companies in a diverse array of heavy industries which include the petrochemical, refining, power, pipeline, steel, pulp and paper industries, as well as municipalities, shipbuilding, original equipment manufacturers (“OEMs”), distributors, and some of the world’s largest engineering and construction firms. Our services are also provided across a broad geographic reach. Basis for presentation. These interim financial statements are unaudited, but in the opinion of our management, reflect all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of results for such periods. The consolidated condensed balance sheet at December 31, 2015 is derived from the December 31, 2015 audited consolidated financial statements. The results of operations for any interim period are not necessarily indicative of results for the full year. These financial statements should be read in conjunction with the financial statements and notes thereto contained in our Transition Report on Form 10-K for the transition period from June 1, 2015 to December 31, 2015 . Consolidation. The consolidated financial statements include the accounts of Team, Inc. and our majority-owned subsidiaries where we have control over operating and financial policies. Investments in affiliates in which we have the ability to exert significant influence over operating and financial policies, but where we do not control the operating and financial policies, are accounted for using the equity method. All material intercompany accounts and transactions have been eliminated in consolidation. Use of estimates. Our accounting policies conform to Generally Accepted Accounting Principles in the U.S. (“GAAP”). Our most significant accounting policies are described below. The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and judgments that affect our reported financial position and results of operations. We review significant estimates and judgments affecting our consolidated financial statements on a recurring basis and record the effect of any necessary adjustments prior to their publication. Estimates and judgments are based on information available at the time such estimates and judgments are made. Adjustments made with respect to the use of these estimates and judgments often relate to information not previously available. Uncertainties with respect to such estimates and judgments are inherent in the preparation of financial statements. Estimates and judgments are used in, among other things, (1) aspects of revenue recognition, (2) valuation of acquisition-related tangible and intangible assets and assessments of all long-lived assets for possible impairment, (3) estimating various factors used to accrue liabilities for workers’ compensation, auto, medical and general liability, (4) establishing an allowance for uncollectible accounts receivable, (5) estimating the useful lives of our assets, (6) assessing future tax exposure and the realization of tax assets, (7) estimating the value associated with contingent consideration payment arrangements and (8) selecting assumptions used in the measurement of costs and liabilities associated with defined benefit pension plans. Fair value of financial instruments . Our financial instruments consist primarily of cash, cash equivalents, accounts receivable, accounts payable and debt obligations. The carrying amount of cash, cash equivalents, trade accounts receivable and trade accounts payable are representative of their respective fair values due to the short-term maturity of these instruments. The fair value of our banking facility is representative of the carrying value based upon the variable terms and management’s opinion that the current rates available to us with the same maturity and security structure are equivalent to that of the banking facility. Cash and cash equivalents . Cash and cash equivalents consist of all demand deposits and funds invested in highly liquid short-term investments with original maturities of three months or less. Included in our cash and cash equivalents at September 30, 2016 and December 31, 2015 is $10.9 million and $17.5 million , respectively, of cash in certain foreign subsidiaries (located primarily in Europe and Canada) where earnings are considered by the Company to be permanently reinvested. In the event that some or all of this cash were to be repatriated, we would be required to accrue and pay additional taxes. While not legally restricted from repatriating this cash, we consider all undistributed earnings of these foreign subsidiaries to be indefinitely reinvested and access to cash to be limited. Restricted cash. We recorded $5.0 million in restricted cash on our balance sheet at December 31, 2015 to reflect the amount held in escrow for contingent consideration as stipulated by the Qualspec Group LLC (“Qualspec”) purchase agreement. Based on Qualspec’s results through December 31, 2015, the contingent consideration did not become due and, accordingly, this cash became unrestricted in the second quarter of 2016. Inventory. We use the first-in, first-out method to determine inventory cost, except that inventory cost of Furmanite Corporation (“Furmanite”) and its subsidiaries, which we acquired on February 29, 2016 (see Note 2), is determined based on weighted-average cost. Inventory includes material, labor and certain fixed overhead costs. Inventory is stated at the lower of cost or market. Inventory quantities on hand are reviewed periodically and carrying cost is reduced to net realizable value for inventories for which their cost exceeds their utility. The cost of inventories consumed or products sold are included in operating expenses. Property, plant and equipment. Property, plant and equipment are stated at cost less accumulated depreciation and amortization. Leasehold improvements are amortized over the shorter of their respective useful life or the lease term. Depreciation and amortization of assets are computed by the straight-line method over the following estimated useful lives of the assets: Classification Useful Life Buildings 20-40 years Leasehold improvements 2-15 years Machinery and equipment 2-12 years Furniture and fixtures 2-10 years Computers and computer software 2-5 years Automobiles 2-5 years Goodwill and intangible assets. We allocate the purchase price of acquired businesses to their identifiable tangible assets and liabilities, such as accounts receivable, inventory, property, plant and equipment, accounts payable and accrued liabilities. We also allocate a portion of the purchase price to identifiable intangible assets, such as non-compete agreements, trademarks, trade names, patents, technology and customer relationships. Allocations are based on estimated fair values of assets and liabilities. The Company uses all available information to estimate fair values including quoted market prices, the carrying value of acquired assets, and widely accepted valuation techniques such as discounted cash flows. Certain estimates and judgments are required in the application of the fair value techniques, including estimates of future cash flows, selling prices, replacement costs, economic lives and the selection of a discount rate, which involves the use of Level 3 measurements as defined in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosur e (“ASC 820”). Deferred taxes are recorded for any differences between the assigned values and tax bases of assets and liabilities. Estimated deferred taxes are based on available information concerning the tax bases of assets acquired and liabilities assumed and loss carryforwards at the acquisition date, although such estimates may change in the future as additional information becomes known. Any remaining excess of cost over allocated fair values is recorded as goodwill. We typically engage third-party valuation experts to assist in determining the fair values for both the identifiable tangible and intangible assets. The judgments made in determining the estimated fair value assigned to each class of assets acquired and liabilities assumed, as well as asset lives, could materially impact the Company’s results of operations. Goodwill and intangible assets acquired in a purchase business combination and determined to have an indefinite useful life are not amortized, but are instead tested for impairment at least annually in accordance with the provisions of the ASC 350, Intangibles—Goodwill and Other (“ASC 350”). Intangible assets with estimated useful lives are amortized over their respective estimated useful lives to their estimated residual values and reviewed for impairment in accordance with ASC 350. We assess goodwill for impairment at the reporting unit level, which we have determined to be the same as our operating segments. Each reporting unit has goodwill relating to past acquisitions. The test for impairment is a two-step process that involves comparing the estimated fair value of each reporting unit to the reporting unit’s carrying value, including goodwill. If the fair value of a reporting unit exceeds its carrying amount, the goodwill of the reporting unit is not considered impaired; therefore, the second step of the impairment test is not deemed necessary. If the carrying amount of the reporting unit exceeds its fair value, we then perform a second step to the goodwill impairment test to measure the amount of goodwill impairment loss to be recorded. With the change in our fiscal year end to December 31 of each calendar year, our goodwill annual test date changed to December 1, effective December 1, 2015. Due to the changes in the underlying assumptions surrounding our goodwill testing as a result of significant acquisitions (see Note 2), we performed a quantitative analysis of goodwill to test for impairment at December 1, 2015 and concluded there was no impairment. The fair values of the reporting units at December 1, 2015 were determined using a method based on discounted cash flow models with estimated cash flows based on internal forecasts of revenue and expenses over a four -year period plus a terminal value period (the income approach). The income approach estimated fair value by discounting each reporting unit’s estimated future cash flows using a discount rate that approximated our weighted-average cost of capital. The fair value derived from the income approach, in the aggregate, approximated our market capitalization. At December 1, 2015, our market capitalization exceeded the carrying value of our consolidated net assets by approximately $482 million or 141% , and the fair value of each reporting unit significantly exceeded its respective carrying amount as of that date. There have been no events that have required an interim assessment of the carrying value of goodwill during 2016. There was $370.7 million and $256.7 million of goodwill at September 30, 2016 and December 31, 2015 , respectively. See Note 2 for additional information related to the acquisitions that increased goodwill in the period. A rollforward of goodwill for the nine months ended September 30, 2016 is as follows (in thousands): Nine Months Ended (unaudited) TeamQualspec TeamFurmanite Quest Integrity Total Balance at beginning of period $ 207,497 $ 19,874 $ 29,283 $ 256,654 Acquisitions 5,955 102,587 4,137 112,679 Foreign currency adjustments 746 255 392 1,393 Balance at end of period $ 214,198 $ 122,716 $ 33,812 $ 370,726 Income taxes. We follow the guidance of ASC 740, Income Taxes (“ASC 740”) which requires that we use the asset and liability method of accounting for deferred income taxes and provide deferred income taxes for all significant temporary differences. As part of the process of preparing our consolidated financial statements, we are required to estimate our income taxes in each of the jurisdictions in which we operate. This process involves estimating our actual current tax payable and related tax expense together with assessing temporary differences resulting from differing treatment of certain items, such as depreciation, for tax and accounting purposes. These differences can result in deferred tax assets and liabilities, which are included within our consolidated balance sheets. In accordance with ASC 740, we are required to assess the likelihood that our deferred tax assets will be realized and, to the extent we believe that it is more likely than not (a likelihood of more than 50% ) that some portion or all of the deferred tax assets will not be realized, we must establish a valuation allowance. We consider all available evidence to determine whether, based on the weight of the evidence, a valuation allowance is needed. Evidence used includes information about our current financial position and our results of operations for the current and preceding years, as well as all currently available information about future years, including our anticipated future performance, the reversal of existing taxable temporary differences and tax planning strategies. During the three months ended June 30, 2016, we calculated a measurement-period adjustment associated with our acquisition of Furmanite (Note 2) that increased deferred tax liabilities and goodwill by $47.9 million . This adjustment represents the acquisition-date deferred tax liability associated with the accumulated undistributed earnings of certain of Furmanite’s foreign subsidiaries, which we do not consider to be indefinitely reinvested outside the United States. Workers’ compensation, auto, medical and general liability accruals. In accordance with ASC 450, Contingencies , we record a loss contingency when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. We review our loss contingencies on an ongoing basis to ensure that we have appropriate reserves recorded on our balance sheet. These reserves are based on historical experience with claims incurred but not received, estimates and judgments made by management, applicable insurance coverage for litigation matters, and are adjusted as circumstances warrant. For workers’ compensation, our self-insured retention is $1.0 million and our automobile liability self-insured retention is currently $500,000 per occurrence. For general liability claims we have an effective self-insured retention of $3.0 million per occurrence. For medical claims, our self-insured retention is $175,000 per individual claimant determined on an annual basis. For environmental liability claims, our self-insured retention is $1.0 million per occurrence. We maintain insurance for claims that exceed such self-retention limits. The insurance is subject to terms, conditions, limitations and exclusions that may not fully compensate us for all losses. Furmanite was generally incorporated into our existing insurance coverage during the second quarter of 2016, but for certain items it continues to maintain separate insurance policies and accordingly has separate self-insurance retention amounts, with such self-retention amounts generally below the levels noted above. Our estimates and judgments could change based on new information, changes in laws or regulations, changes in management’s plans or intentions, or the outcome of legal proceedings, settlements or other factors. If different estimates and judgments were applied with respect to these matters, it is likely that reserves would be recorded for different amounts. Revenue recognition. We determine our revenue recognition guidelines for our operations based on guidance provided in applicable accounting standards and positions adopted by the FASB and the Securities and Exchange Commission (“SEC”). Most of our projects are short-term in nature and we predominantly derive revenues by providing a variety of industrial services on a time and material basis. For all of these services, our revenues are recognized when services are rendered or when product is shipped to the job site and risk of ownership passes to the customer. However, due to various contractual terms with our customers, at the end of any reporting period, there may be earned but unbilled revenue that is accrued to properly match revenues with related costs. At September 30, 2016 and December 31, 2015 , the amount of earned but unbilled revenue included in accounts receivable was $80.8 million and $47.1 million , respectively. Allowance for doubtful accounts. In the ordinary course of business, a portion of our accounts receivable are not collected due to billing disputes, customer bankruptcies, dissatisfaction with the services we performed and other various reasons. We establish an allowance to account for those accounts receivable that will eventually be deemed uncollectible. The allowance for doubtful accounts is based on a combination of our historical experience and management’s review of long outstanding accounts receivable. Concentration of credit risk. No single customer accounts for more than 10% of consolidated revenues. Earnings (loss) per share. Basic earnings (loss) per share is computed by dividing income (loss) from continuing operations, income from discontinued operations or net income (loss) available to Team shareholders by the weighted-average number of shares of common stock outstanding during the year. Diluted earnings per share is computed by dividing income (loss) from continuing operations, income from discontinued operations or net income (loss) available to Team shareholders, less income or loss for the period attributable to the noncontrolling interest, by the sum of (1) the weighted-average number of shares of common stock, outstanding during the period, (2) the dilutive effect of the assumed exercise of share-based compensation using the treasury stock method and (3) the dilutive effect of the assumed conversion of our noncontrolling interest to our common stock prior to the acquisition of that interest. Amounts used in basic and diluted earnings (loss) per share, for the three and nine months ended September 30, 2016 and 2015 , are as follows (in thousands): Three Months Ended Nine Months Ended 2016 2015 2016 2015 (unaudited) (unaudited) (unaudited) (unaudited) Weighted-average number of basic shares outstanding 29,361 20,375 27,609 20,371 Stock options, stock units and performance awards — 342 — 331 Conversion of noncontrolling interest — 728 — 728 Total shares and dilutive securities 29,361 21,445 27,609 21,430 For the three and nine months ended September 30, 2016, all outstanding share-based compensation awards were excluded from the calculation of diluted earnings (loss) per share because their inclusion would be antidilutive due to the loss from continuing operations for the periods. There were no stock options outstanding during the three and nine months ended September 30, 2015 excluded from the computation of diluted earnings per share because the options’ exercise prices were greater than the average market price of common shares during the periods. Foreign currency . For subsidiaries whose functional currency is not the U.S. Dollar, assets and liabilities are translated at period ending rates of exchange and revenues and expenses are translated at period average exchange rates. Translation adjustments for the asset and liability accounts are included as a separate component of accumulated other comprehensive loss in shareholders’ equity. Foreign currency transaction gains and losses are included in our consolidated statements of operations. We utilize monthly foreign currency swap contracts to reduce exposures to changes in foreign currency exchange rates related to our largest exposures including, but not limited to, the Australian Dollar, Canadian Dollar, Brazilian Real, British Pound, Euro, Malaysian Ringgit and Mexican Peso. The impact from these swap contracts was not material for the three months or nine months ended September 30, 2016 nor as of the balance sheet dates of September 30, 2016 and December 31, 2015 . Defined Benefit Pension Plans. Pension benefit costs and liabilities are dependent on assumptions used in calculating such amounts. The primary assumptions include factors such as discount rates, expected investment return on plan assets, mortality rates and retirement rates. These rates are reviewed annually and adjusted to reflect current conditions. These rates are determined based on reference to yields. The expected return on plan assets is derived from detailed periodic studies, which include a review of asset allocation strategies, anticipated future long-term performance of individual asset classes, risks (standard deviations) and correlations of returns among the asset classes that comprise the plans’ asset mix. While the studies give appropriate consideration to recent plan performance and historical returns, the assumptions are primarily long-term, prospective rates of return. Mortality and retirement rates are based on actual and anticipated plan experience. In accordance with GAAP, actual results that differ from the assumptions are accumulated and amortized over future periods and, therefore, generally affect recognized expense in future periods. While we believe that the assumptions used are appropriate, differences in actual experience or changes in assumptions may affect the pension obligation and future expense. Newly Adopted Accounting Principles ASU No. 2015-03 and ASU No. 2015-15 . In April 2015, the FASB issued Accounting Standards Update (“ASU”) No. 2015-03, Interest—Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs (“ASU 2015-03”), which requires that debt issuance costs be presented as a direct deduction from the carrying amount of the related debt liability, consistent with the presentation of debt discounts. Prior to the issuance of ASU 2015-03, debt issuance costs were required to be presented as other assets, separate from the related debt liability. ASU 2015-03 does not change the recognition and measurement requirements for debt issuance costs. In August 2015, the FASB issued ASU No. 2015-15, Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements (“ASU 2015-15”), that adds SEC paragraphs pursuant to the SEC Staff Announcement at the June 18, 2015, Emerging Issues Task Force meeting about the presentation and subsequent measurement of debt issuance costs associated with line-of-credit arrangements. Given the absence of authoritative guidance within ASU 2015-03 for debt issuance costs related to line-of-credit arrangements, ASU 2015-15 states the SEC staff would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. Team adopted ASU 2015-15 effective upon adoption of ASU 2015-03 on January 1, 2016. Because essentially all of Team’s deferred debt issuance costs relate to line-of-credit arrangements, we have elected to continue presenting such costs as an asset. Therefore, adoption of ASU 2015-03 and ASU 2015-15 did not have any impact on our results of operations, financial position or cash flows. ASU No. 2015-16 . In September 2015, the FASB issued ASU No. 2015-16, Business Combinations- Simplifying the Accounting for Measurement-Period Adjustments (“ASU 2015-16”), that requires the acquirer in a business combination to recognize in the reporting period in which adjustment amounts are determined, any adjustments to provisional amounts that are identified during the measurement period, calculated as if the accounting had been completed at the acquisition date. Prior to the issuance of ASU 2015-16, an acquirer was required to restate prior period financial statements as of the acquisition date for adjustments to provisional amounts. Team adopted ASU 2015-16 effective January 1, 2016 and its adoption did not have a material impact on our results of operations, financial position or cash flows. We have included the required disclosures with respect to measurement-period adjustments in Note 2. Accounting Principles Not Yet Adopted ASU No. 2014-09 . In May 2014, the FASB issued Accounting Standards Update (“ASU”) ASU No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. ASU 2014-09 will replace most existing revenue recognition guidance in GAAP when it becomes effective. The new standard is effective for us on January 1, 2018, with early application permitted as of January 1, 2017. ASU 2014-09 permits the use of either the retrospective or cumulative effect transition method. We are evaluating the effect that ASU 2014-09 will have on our consolidated financial statements and related disclosures. We have not yet selected a transition method or determined the effect ASU 2014-09 will have on our ongoing financial reporting. ASU No. 2015-11 . In July 2015, the FASB issued ASU 2015-11, Inventory—Simplifying the Measurement of Inventory (“ASU 2015-11”), which requires entities that measure inventory using the first-in, first-out or average cost methods to measure inventory at the lower of cost and net realizable value to more closely align the measurement of inventory in GAAP with International Financial Reporting Standards (“IFRS”). Net realizable value is defined as estimated selling price in the ordinary course of business less reasonably predictable costs of completion, disposal and transportation. ASU 2015-11 is effective for fiscal years beginning after December 15, 2016 on a prospective basis, with earlier application permitted. The adoption of this update is not expected to have a material impact on our results of operations, financial position or cash flows. ASU No. 2015-17 . In November 2015, the FASB issued ASU No. 2015-17, Income Taxes: Balance Sheet Classification of Deferred Taxes (“ASU 2015-17”), which simplifies the presentation of deferred taxes by requiring deferred tax assets and liabilities be classified as noncurrent on the balance sheet. ASU 2015-17 is effective for fiscal years beginning after December 15, 2016. The ASU may be adopted prospectively or retrospectively and early adoption is permitted. The adoption of this ASU is not expected to have a material impact on our results of operations, financial position or cash flows. ASU No. 2016-02. In February 2016, the FASB issued ASU No. 2016-02, Leases (“ASU 2016-02”), which changes the accounting for leases, including a requirement to record all leases on the consolidated balance sheets as assets and liabilities. This ASU is effective for fiscal years beginning after December 15, 2018. We will adopt ASU 2016-02 effective January 1, 2019. We are currently evaluating the impact this ASU will have on our ongoing financial reporting. ASU No. 2016-09. In March 2016, the FASB issued ASU No. 2016-09, Compensation–Stock Compensation: Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”), which makes several modifications to GAAP related to share-based payments including the accounting for forfeitures, employee taxes and the financial statement presentation of excess tax benefits or deficiencies. ASU 2016-09 also clarifies the statement of cash flows presentation for certain components of share-based awards. The ASU is effective for interim and annual reporting periods beginning after December 15, 2016, although early adoption is permitted. The adoption of ASU 2016-09 is not expected to have a material impact on our financial position or cash flows. Upon adoption, on a prospective basis, our income tax expense will be impacted by future excess tax benefits or deficiencies that under previous GAAP were recognized within stockholders’ equity rather than through the statement of operations. ASU No. 2016-13. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments–Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which amends GAAP by introducing a new impairment model for financial instruments that is based on expected credit losses rather than incurred credit losses. The new impairment model applies to most financial assets, including trade accounts receivable. ASU 2016-13 is effective for interim and annual reporting periods beginning after December 15, 2019, although it may be adopted one year earlier, and requires a modified retrospective transition approach. We are currently evaluating the impact this ASU will have on our ongoing financial reporting. ASU No. 2016-15 . In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”), which clarifies the classification in the statement of cash flows of certain items, including debt prepayment or extinguishment costs, settlement of contingent consideration arising from a business combination, insurance settlement proceeds, and cash recei |
ACQUISITIONS
ACQUISITIONS | 9 Months Ended |
Sep. 30, 2016 | |
Business Combinations [Abstract] | |
ACQUISITIONS | ACQUISITIONS Furmanite In November 2015, Team and Furmanite entered into an Agreement and Plan of Merger (the “Merger Agreement”) pursuant to which we acquired all the outstanding shares of Furmanite in a stock transaction whereby Furmanite shareholders received 0.215 shares of Team common stock for each share of Furmanite common stock they owned. The merger was completed on February 29, 2016. Outstanding Furmanite share-based payment awards were generally converted into comparable share-based awards of Team, with certain awards vesting upon the closing of the merger, pursuant to the Merger Agreement. The combination doubled the size of Team’s mechanical services capabilities and established a deeper, broader talent and resource pool that better supports customers across standard and specialty mechanical services. In addition, our expanded capability and capacity offers an enhanced single-point of accountability and flexibility in addressing some of the most critical needs of clients; whether as individual services or as part of an integrated specialty industrial services solution. The acquisition-date fair value of the consideration transferred totaled $282.3 million , which consisted of the following (in thousands, except shares): February 29, 2016 (unaudited) Common stock (8,208,006 shares) $ 209,529 Converted share-based payment awards 2,001 Cash 70,811 Total consideration $ 282,341 The fair value of the 8,208,006 common shares issued was determined based on the closing market price of our common shares on the acquisition date of February 29, 2016. The issuance of common shares in the acquisition is a non-cash financing activity that has been excluded from the consolidated statement of cash flows. The fair value of the converted share-based payment awards reflects an apportionment of the fair value of the awards, based on the closing market price of our common shares and other assumptions as of the acquisition date, that is attributable to employee service completed prior to the acquisition date. The fair value of the awards attributable to service after the acquisition date is recognized as share-based compensation expense over the applicable vesting periods. The cash consideration represents amounts Team paid, immediately prior to the closing of the acquisition, to settle Furmanite’s outstanding debt and certain related liabilities, which were not assumed by Team. The cash portion of the consideration was financed through additional borrowings under our banking credit facility. The following table presents the preliminary purchase price allocation for Furmanite (in thousands): February 29, 2016 (unaudited) Cash and cash equivalents $ 37,734 Accounts receivable 64,502 Inventory 25,709 Current deferred tax assets 11,563 Prepaid expenses and other current assets 23,207 Current assets of discontinued operations 14,760 Property, plant and equipment 71,241 Intangible assets 70,800 Goodwill 102,587 Other non-current assets 3,709 Total assets acquired $ 425,812 Accounts payable $ 12,359 Other accrued liabilities 28,918 Income taxes payable 229 Current liabilities of discontinued operations 1,434 Non-current deferred tax liabilities 84,328 Defined benefit pension liability 13,509 Other long-term liabilities 2,694 Total liabilities assumed 143,471 Net assets acquired $ 282,341 The preliminary purchase price allocation above reflects measurement period adjustments as a result of new information obtained during both the three months ended June 30, 2016 and the three months ended September 30, 2016. The significant adjustments during the three months ended June 30, 2016 were an increase in non-current deferred tax liabilities of $47.9 million , a decrease in inventory of $5.4 million , a decrease in accounts receivable of $2.1 million , an increase in other accrued liabilities of $1.4 million and a decrease in prepaid expenses and other current assets of $0.5 million . These adjustments resulted in an offsetting increase to goodwill of $57.3 million . Additionally, the allocation above reflects an adjustment during the three months ended June 30, 2016 to reclassify $5.7 million from inventory to prepaid expenses and other current assets as well as adjustments to segregate the preliminary fair values of assets and liabilities of acquired discontinued operations (see Note 15). The significant adjustments during the three months ended September 30, 2016 were a decrease in accounts receivable of $5.1 million , a decrease in property, plant and equipment of $1.6 million , a decrease in prepaid expenses and other current assets of $0.5 million , an increase in other accrued liabilities of $2.0 million and a decrease in non-current deferred tax liabilities of $0.6 million . These adjustments resulted in an offsetting increase to goodwill of $8.7 million . Additionally, the allocation above reflects an adjustment during the three months ended September 30, 2016 to reclassify $2.0 million and $0.4 million from inventory and prepaid expenses and other current assets, respectively, to property, plant and equipment. These measurement period adjustments did not result in any material impacts to the consolidated statements of operations. The preliminary purchase price allocation shown above and the disclosures below are based upon the estimated fair values at the acquisition date and are subject to additional changes within the measurement period as additional information is obtained. The final valuation of assets acquired and liabilities assumed is expected to be completed as soon as possible, but no later than one year from the acquisition date. To the extent that our estimates require adjustment, we will modify the provisional amounts. Given the size, complexity and timing of the acquisition, the valuation of certain assets and liabilities is still being finalized. The fair value of the acquired working capital, which includes accounts receivable, inventory, prepaid expenses, accounts payable and accrued liabilities is provisional subject to the completion of our detailed review of the underlying accounts. The fair value of the acquired property, plant and equipment and identifiable intangible assets is provisional pending the completion of and our review of the valuation reports for those assets from a third-party valuation firm. The valuation of Furmanite’s tax accounts is provisional pending the completion of Furmanite’s tax returns to be filed for periods up to the acquisition date. The fair values recorded are “Level 3” measurements as defined in Note 10. Of the $70.8 million of acquired intangible assets, $51.6 million was assigned to customer relationships with an estimated useful life of 12 years , $16.9 million was assigned to trade names with a weighted-average estimated useful life of 12 years and $2.3 million was assigned to developed technology with an estimated useful life of 10 years . The $102.6 million of goodwill was assigned to the TeamFurmanite segment. The goodwill recognized is attributable primarily to expected synergies and the assembled workforce of Furmanite. None of the goodwill recognized is expected to be deductible for income tax purposes. The fair value of accounts receivable acquired was $64.5 million with the gross contractual amount being $73.8 million . We expect $9.3 million to be uncollectible. Additionally, we acquired accounts receivable with a fair value of $14.0 million associated with discontinued operations, which is included in the current assets of discontinued operations line above, with the gross contractual amount of these receivables being $14.1 million . We expect $0.1 million to be uncollectible. For the three and nine months ended September 30, 2016, we recognized a total of $0.2 million and $6.8 million , respectively, of acquisition costs related to the Furmanite acquisition, which were included in selling, general and administrative expenses in the consolidated statements of operations. Our condensed consolidated statements of operations (unaudited) include the activity of Furmanite beginning on the acquisition date of February 29, 2016. Subsequent to the acquisition date, we commenced integration activities relative to Furmanite. As a result, certain business operations have been consolidated and/or transferred from legacy Furmanite operations to legacy Team operations to facilitate the new operating structure. Revenues of $152.3 million and a net loss of $1.7 million are included in the nine month period ended September 30, 2016 and only include operating results that are directly attributable to legacy Furmanite operations. These amounts do not reflect any attempt to account for the effects of integration activities, which are not practicable to determine. Certain transactions related to the Furmanite acquisition were recognized separately from the acquisition of assets and assumption of liabilities in accordance with GAAP. These transactions, which were attributable to certain compensation (both cash and share-based) that was paid or became payable in conjunction with the closing of the acquisition, totaled $4.7 million and were recognized as selling, general and administrative expenses during the nine months ended September 30, 2016. There were no such amounts recognized during the three months ended September 30, 2016. Qualspec In July 2015, we acquired 100% of Qualspec for total cash consideration of $255.5 million . Qualspec is a leading provider of NDT services in the United States, with significant operations in the West Coast, Gulf Coast and Mid-Western areas of the country. Qualspec adds strength to our resident refinery inspection programs with major customer relationships across the U.S., and to add to our already strong capabilities in advanced inspection services, rope access services and the delivery of innovative technologies to our customers. The purchase of Qualspec was financed through borrowings under our banking credit facility. The initial purchase price could have been increased by $10.0 million depending upon the operating results of Qualspec through the end of calendar year 2015. The fair value of the contingent consideration arrangement at the acquisition date was initially estimated at $5.8 million . However, based on Qualspec results through December 31, 2015, there was no additional amount payable and, accordingly, we have reversed our initial contingent consideration obligation of $5.8 million to zero with a corresponding decrease to goodwill. The following table presents the purchase price allocation for Qualspec (in thousands): July 7, 2015 (unaudited) Cash and cash equivalents $ 3,981 Accounts receivable 21,495 Current deferred tax assets 279 Prepaid expenses 1,049 Plant, property and equipment 15,472 Intangible assets 78,100 Goodwill 148,482 Other assets 138 Total assets acquired $ 268,996 Accounts payable $ 2,892 Other accrued liabilities 7,581 Non-current deferred tax liability 2,982 Total liabilities assumed 13,455 Net assets acquired $ 255,541 The purchase price allocation shown above is based upon the fair values at the acquisition date. The fair values recorded are “Level 3” measurements as defined in Note 10. Of the $78.1 million of acquired intangible assets, $75.2 million was assigned to customer relationships with an estimated useful life of 15 years , $1.6 million was assigned to non-compete agreements with an estimated useful life of 5 years and $1.3 million was assigned to trade names with an estimated useful life of 1 year . The $148.5 million of goodwill was assigned to the TeamQualspec segment. The goodwill recognized is attributable primarily to expected synergies and the assembled workforce of Qualspec. About $109.6 million of the goodwill is expected to be deductible for income tax purposes. The fair value of accounts receivables acquired was $21.5 million , with the gross contractual amount being $22.5 million . We expect $1.0 million to be uncollectible. Our consolidated results include the activity of Qualspec beginning on the acquisition date of July 7, 2015. Revenues of $40.3 million and net income of $1.6 million of Qualspec are included in the consolidated statement of operations (in the TeamQualspec segment) for the nine months ended September 30, 2015. Pro Forma Information - Furmanite and Qualspec Our unaudited pro forma consolidated results of operations are shown below as if the acquisitions of Furmanite and Qualspec had occurred at the beginning of fiscal year 2015. These results are not necessarily indicative of the results which would actually have occurred if the acquisitions had taken place at the beginning of fiscal year 2015, nor are they necessarily indicative of future results (in thousands, except per share data). Pro forma data Pro forma data Three Months Ended Nine Months Ended 2015 2016 2015 (unaudited) (unaudited) (unaudited) Revenues $ 327,612 $ 920,641 $ 1,020,779 Income (loss) from continuing operations attributable to Team shareholders $ 3,545 $ (809 ) $ 22,294 Earnings (loss) per share from continuing operations: Basic $ 0.12 $ (0.03 ) $ 0.78 Diluted $ 0.12 $ (0.03 ) $ 0.75 These amounts have been calculated after applying Team’s accounting policies and adjusting the results of Furmanite and Qualspec to reflect the additional depreciation and amortization that would have been charged assuming the fair value adjustments to property, plant and equipment and intangible assets had been applied on January 1, 2015, together with the related tax effects. Additionally, these pro forma results exclude discontinued operations as well as the impact of costs related to the Furmanite and Qualspec acquisitions included in the historical results. Quest Integrity In November 2010, we purchased 95% of Quest Integrity Group, LLC, a leading provider of proprietary in-line inspection and advanced engineering and assessment services. Pursuant to a “Put/Call Agreement” that was executed at the time of the Quest Integrity acquisition, on August 31, 2015, we issued 728,266 shares of restricted common stock and paid $5.9 million in cash to acquire the noncontrolling interest. Prior to August 31, 2015, these shares were included as dilutive securities in the earnings per share calculation as set forth herein. Other In June 2016, we acquired a mechanical furnace and pipe cleaning business in Europe, Turbinate International B.V. (“Turbinate”) for approximately $8 million . Recognized as a service leader in the European market, Turbinate specializes in de-coking and cleaning of fired heaters and unpiggable refinery assets as well as mechanical cleaning of furnaces and pipes from two to 18 inches by means of pigging, endoscopy and ultra sound inspection services. Turbinate is located in Vianen, the Netherlands. Turbinate is reported in the Quest Integrity segment. In April 2016, we acquired two related businesses in Europe: Quality Inspection Services (“QIS”) and TiaT Europe (“TiaT”) for a total of approximately $9 million . QIS is an NDT inspection company and TiaT is an NDT training school and consultancy and engineering company recognized as a specialist in aerospace inspections. Both companies are located in Roosendaal, the Netherlands. The businesses add about 65 employees to our organization in Europe and serve steel construction, ship repair, off-shore and storage tank customers, as well as the aerospace industry. QIS is the fourth largest NDT inspection company in the Netherlands and represents Team’s first inspection operation outside of North America. QIS and TiaT are reported in the TeamQualspec segment. In June 2015, we purchased DK Amans Valve, an advanced valve leader located in Long Beach, California, with a portfolio of projects from various sectors including oil and gas refining, pipelines and power generation for a total consideration of $12.3 million , net of cash acquired of $0.1 million . The purchase price also included $1.8 million of contingent consideration. The contingent consideration is based upon the achievement of certain performance targets over a three -year period for an additional amount of up to $4.0 million . During the nine months ended September 30, 2016, we recorded a loss of $2.2 million associated with the revaluation of the contingent consideration based on actual performance to date. DK Amans Valve is reported in the TeamFurmanite segment. |
RECEIVABLES
RECEIVABLES | 9 Months Ended |
Sep. 30, 2016 | |
Receivables [Abstract] | |
RECEIVABLES | RECEIVABLES A summary of accounts receivable as of September 30, 2016 and December 31, 2015 is as follows (in thousands): September 30, 2016 December 31, 2015 (unaudited) Trade accounts receivable $ 190,185 $ 170,774 Unbilled revenues 80,750 47,098 Allowance for doubtful accounts (6,432 ) (3,548 ) Total $ 264,503 $ 214,324 |
INVENTORY
INVENTORY | 9 Months Ended |
Sep. 30, 2016 | |
Inventory Disclosure [Abstract] | |
INVENTORY | INVENTORY A summary of inventory as of September 30, 2016 and December 31, 2015 is as follows (in thousands): September 30, 2016 December 31, 2015 (unaudited) Raw materials $ 7,840 $ 3,167 Work in progress 3,655 1,018 Finished goods 40,943 23,751 Total $ 52,438 $ 27,936 |
PROPERTY, PLANT AND EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT | 9 Months Ended |
Sep. 30, 2016 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT | PROPERTY, PLANT AND EQUIPMENT A summary of property, plant and equipment as of September 30, 2016 and December 31, 2015 is as follows (in thousands): September 30, 2016 December 31, 2015 (unaudited) Land $ 7,465 $ 3,124 Buildings and leasehold improvements 42,868 29,690 Machinery and equipment 239,313 174,222 Furniture and fixtures 8,557 6,561 Capitalized ERP system development costs 40,324 25,606 Computers and computer software 11,880 8,062 Automobiles 5,728 5,280 Construction in progress 13,826 5,177 Total 369,961 257,722 Accumulated depreciation and amortization (157,925 ) (132,739 ) Property, plant and equipment, net $ 212,036 $ 124,983 At the end of 2013, we initiated the design and implementation of a new enterprise resource planning (“ERP”) system, which is expected to be installed by the end of calendar year 2017. Amortization of the ERP system development costs will be computed by the straight-line method, commencing in the period when substantial testing is completed and the asset is ready for its intended use. Through September 30, 2016 , we have capitalized $40.5 million associated with the project that includes $1.1 million of capitalized interest. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | INTANGIBLE ASSETS A summary of intangible assets as of September 30, 2016 and December 31, 2015 is as follows (in thousands): September 30, 2016 December 31, 2015 (unaudited) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Customer relationships $ 156,848 $ (21,357 ) $ 135,491 $ 103,288 $ (12,995 ) $ 90,293 Non-compete agreements 5,475 (3,826 ) 1,649 4,898 (3,468 ) 1,430 Trade names 24,722 (3,736 ) 20,986 6,299 (1,940 ) 4,359 Technology 7,838 (3,145 ) 4,693 5,112 (2,541 ) 2,571 Licenses 848 (296 ) 552 683 (217 ) 466 Total $ 195,731 $ (32,360 ) $ 163,371 $ 120,280 $ (21,161 ) $ 99,119 Amortization expense for the three months ended September 30, 2016 and 2015 was $3.8 million and $2.8 million , respectively. Amortization expense for the nine months ended September 30, 2016 and 2015 was $11.0 million and $4.7 million , respectively. |
OTHER ACCRUED LIABILITIES
OTHER ACCRUED LIABILITIES | 9 Months Ended |
Sep. 30, 2016 | |
Payables and Accruals [Abstract] | |
OTHER ACCRUED LIABILITIES | OTHER ACCRUED LIABILITIES A summary of other accrued liabilities as of September 30, 2016 and December 31, 2015 is as follows (in thousands): September 30, 2016 December 31, 2015 (unaudited) Payroll and other compensation expenses $ 43,874 $ 21,878 Insurance accruals 10,213 7,008 Property, sales and other non-income related taxes 5,379 3,058 Deferred revenue 3,705 1,355 Lease commitments 2,631 1,721 Contingent consideration 2,033 3,638 Accrued commission 2,000 1,159 Volume discount 896 1,280 Accrued interest 686 984 Other 10,680 7,715 Total $ 82,097 $ 49,796 |
LONG-TERM DEBT, DERIVATIVES AND
LONG-TERM DEBT, DERIVATIVES AND LETTERS OF CREDIT | 9 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT, DERIVATIVES AND LETTERS OF CREDIT | LONG-TERM DEBT, LETTERS OF CREDIT AND DERIVATIVES In July 2015, we renewed our banking credit facility (the “Credit Facility”). In accordance with the second amendment to the Credit Facility, which was signed in February 2016, the Credit Facility has borrowing capacity of up to $600 million and consists of a $400 million , five -year revolving loan facility and a $200 million five -year term loan facility. The swing line facility is $35 million . The Credit Facility matures in July 2020 , bears interest based on a variable Eurodollar rate option (LIBOR plus 2.25% margin at September 30, 2016 ) and has commitment fees on unused borrowing capacity ( 0.40% at September 30, 2016 ). The Credit Facility also contains financial covenants, which were amended in August 2016 pursuant to the third amendment to the Credit Agreement. The covenants, as amended, require the Company to maintain as of the end of each fiscal quarter (i) a maximum ratio of consolidated funded debt to consolidated EBITDA (as defined in the Credit Facility agreement) of not more than 4.25 to 1.00 as of September 30, 2016, not more than 4.50 to 1.00 as of December 31, 2016, not more than 4.25 to 1.00 as of March 31, 2017 and June 30, 2017, not more than 3.75 to 1.00 as of September 30, 2017 and thereafter the maximum ratio decreases by 0.25 to 1.00 every quarter until it reaches 3.00 to 1.00, (ii) a maximum ratio of senior secured debt to consolidated EBITDA of not more than 3.00 to 1.00 and (iii) an interest coverage ratio of less than 3.00 to 1.00. As of September 30, 2016 , we are in compliance with these covenants. At September 30, 2016, we had $38.2 million of cash on hand and approximately $35 million of available borrowing capacity through our Credit Facility. In connection with the renewal of our Credit Facility, we are amortizing $3.0 million of associated debt issuance costs over the life of the Credit Facility. In order to secure our casualty insurance programs we are required to post letters of credit generally issued by a bank as collateral. A letter of credit commits the issuer to remit specified amounts to the holder, if the holder demonstrates that we failed to meet our obligations under the letter of credit. If this were to occur, we would be obligated to reimburse the issuer for any payments the issuer was required to remit to the holder of the letter of credit. We were contingently liable for outstanding stand-by letters of credit totaling $22.2 million at September 30, 2016 and $13.2 million at December 31, 2015 . Outstanding letters of credit reduce amounts available under our Credit Facility and are considered as having been funded for purposes of calculating our financial covenants under the Credit Facility. ASC 815, Derivatives and Hedging (“ASC 815”), requires that derivative instruments be recorded at fair value and included in the balance sheet as assets or liabilities. The accounting for changes in the fair value of a derivative instrument depends on the intended use of the derivative and the resulting designation, which is established at the inception date of a derivative. Special accounting for derivatives qualifying as fair value hedges allows derivatives’ gains and losses to offset related results on the hedged item in the statement of operations. For derivative instruments designated as cash flow hedges, changes in fair value, to the extent the hedge is effective, are recognized in other comprehensive income (loss) until the hedged item is recognized in earnings. Hedge effectiveness is measured at least quarterly based on the relative cumulative changes in fair value between the derivative contract and the hedged item over time. Credit risks related to derivatives include the possibility that the counter-party will not fulfill the terms of the contract. We consider counterparty credit risk to our derivative contracts when valuing our derivative instruments. Our borrowing of €12.3 million under the Credit Facility serves as an economic hedge of our net investment in our European operations as fluctuations in the fair value of the borrowing attributable to the U.S. Dollar/Euro spot rate will offset translation gains or losses attributable to our investment in our European operations. At September 30, 2016 , the €12.3 million borrowing had a U.S. Dollar value of $13.8 million . The amounts recognized in other comprehensive income (loss), and reclassified into income, for the three and nine months ended September 30, 2016 and 2015 , are as follows (in thousands): Gain (Loss) Recognized in Other Comprehensive Income (Loss) Gain Reclassified from Other Comprehensive Income (Loss) to Earnings Gain (Loss) Recognized in Other Comprehensive Income (Loss) Gain (Loss) Reclassified from Other Comprehensive Income (Loss) to Earnings Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended (unaudited) (unaudited) (unaudited) (unaudited) 2016 2015 2016 2015 2016 2015 2016 2015 Net investment hedge $ (104 ) $ (183 ) $ — $ — $ (347 ) $ 1,122 $ — $ — The following table presents the fair value totals and balance sheet classification for derivatives designated as hedges under ASC 815 (in thousands): September 30, 2016 December 31, 2015 (unaudited) Classification Balance Sheet Location Fair Value Classification Balance Sheet Location Fair Value Net investment hedge Liability Long-term debt $ (4,220 ) Liability Long-term debt $ (4,567 ) In connection with our acquisition of Furmanite in February 2016, we assumed additional obligations under various non-cancellable operating leases, primarily consisting of facility and auto leases. Future payments under these additional operating leases, which expire at various dates, were estimated at approximately $33 million as of the acquisition date. |
RETIREMENT PLANS
RETIREMENT PLANS | 9 Months Ended |
Sep. 30, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
RETIREMENT PLANS | RETIREMENT PLANS In connection with our acquisition of Furmanite, we assumed liabilities associated with the defined benefit pension plans of two foreign subsidiaries, one plan covering certain United Kingdom employees (the “U.K. Plan”) and the other covering certain Norwegian employees (the “Norwegian Plan”). As the Norwegian Plan represents approximately three percent of both the Company’s total pension plan liabilities and total pension plan assets, only the schedule of net periodic pension cost includes combined amounts from the two plans, while assumption and narrative information relates solely to the U.K. Plan. Net periodic pension cost, from the date of the Furmanite acquisition, for the U.K. and Norwegian Plans includes the following components (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 (unaudited) (unaudited) (unaudited) (unaudited) Service cost $ 21 $ — $ 50 $ — Interest cost 742 — 1,810 — Expected return on plan assets (759 ) — (1,852 ) — Net periodic pension cost $ 4 $ — $ 8 $ — The expected long-term rate of return on invested assets is determined based on the weighted average of expected returns on asset investment categories as follows: 4.9% overall, 6.2% for equities and 2.2% for bonds. We expect to contribute $1.3 million to the pension plan for 2016, of which $0.9 million has been contributed through September 30, 2016. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS We apply the provisions of ASC 820, Fair Value Measurements and Disclosures (“ASC 820”), which among other things, requires enhanced disclosures about assets and liabilities carried at fair value. As defined in ASC 820, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. We utilize market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. We primarily apply the market approach for recurring fair value measurements and endeavor to utilize the best information available. Accordingly, we utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. The use of unobservable inputs is intended to allow for fair value determinations in situations in which there is little, if any, market activity for the asset or liability at the measurement date. We are able to classify fair value balances based on the observability of those inputs. ASC 820 establishes a fair value hierarchy such that “Level 1” measurements include unadjusted quoted market prices for identical assets or liabilities in an active market, “Level 2” measurements include quoted market prices for identical assets or liabilities in an active market which have been adjusted for items such as effects of restrictions for transferability and those that are not quoted but are observable through corroboration with observable market data, including quoted market prices for similar assets, and “Level 3” measurements include those that are unobservable and of a highly subjective measure. The following table sets forth, by level within the fair value hierarchy, our financial assets and liabilities that are accounted for at fair value on a recurring basis as of September 30, 2016 and December 31, 2015 . As required by ASC 820, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement (in thousands): September 30, 2016 (unaudited) Quoted Prices in Active Markets for Identical Items (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Liabilities: Contingent consideration 1 $ — $ — $ 3,743 $ 3,743 Net investment hedge $ — $ (4,220 ) $ — $ (4,220 ) December 31, 2015 Quoted Prices in Active Markets for Identical Items (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Liabilities: Contingent consideration 1 $ — $ — $ 3,638 $ 3,638 Net investment hedge $ — $ (4,567 ) $ — $ (4,567 ) __________________________ 1 Inclusive of both current and noncurrent portions. There were no transfers in and out of Level 1 & Level 2 during the nine months ended September 30, 2016 and 2015 . There was a transfer out of Level 3 of $5.8 million relating to a revaluation of contingent consideration during the year ended December 31, 2015 and no transfers in and out of Level 3 during the nine months ended September 30, 2016 . The fair value of contingent consideration liabilities classified in the table above were estimated using a discounted cash flow technique with significant inputs that are not observable in the market and thus represents a Level 3 fair value measurement as defined in ASC 820. The significant inputs in the Level 3 measurement not supported by market activity include a combination of actual cash flows and probability-weighted assessments of expected future cash flows related to the acquired businesses, appropriately discounted considering the uncertainties associated with the obligation, and as calculated in accordance with the terms of the acquisition agreement. The following table represents the changes in the fair value of Level 3 contingent consideration (in thousands): Nine Months Ended (unaudited) Balance, beginning of period $ 3,638 Accretion of liability 261 Payment (4,000 ) Revaluation 2,184 Acquisitions 1,660 Balance, end of period $ 3,743 |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
SHARE-BASED COMPENSATION | SHARE-BASED COMPENSATION We have adopted stock incentive plans and other arrangements pursuant to which our Board of Directors (the “Board”) may grant stock options, restricted stock, stock units, stock appreciation rights, common stock or performance awards to officers, directors and key employees. At September 30, 2016 , there were approximately 0.8 million stock options, restricted stock units and performance awards outstanding to officers, directors and key employees. The exercise price, terms and other conditions applicable to each form of share-based compensation under our plans are generally determined by the Compensation Committee of our Board at the time of grant and may vary. Our share-based payments consist primarily of stock units, performance awards, common stock and stock options. In May 2016, our shareholders approved the 2016 Team, Inc. Equity Incentive Plan (the “Plan”), which replaced all of our previous equity compensation plans. The Plan authorizes the issuance of share-based awards representing up to 2,000,000 shares of common stock. Shares issued in connection with our share-based compensation are issued out of authorized but unissued common stock. In connection with the acquisition of Furmanite in February 2016, we assumed the share plan related to Furmanite employee grants. As provided for in the Merger Agreement, each option to purchase Furmanite common stock outstanding immediately prior to the closing of the acquisition was converted into an option to purchase Team common stock, adjusted by the 0.215 exchange ratio. Similarly, each previously existing Furmanite restricted share, restricted stock unit or performance stock unit outstanding immediately prior to the acquisition were converted into Team restricted stock units, also at the 0.215 exchange ratio. The converted awards generally have the same terms and conditions as the replaced awards, except the vesting of certain awards was accelerated to the acquisition date and any performance conditions associated with the Furmanite awards no longer apply. The fair value of the options was determined using a Black-Scholes model, while the fair value of the restricted stock units was determined based on the market price on the acquisition date. The fair value of the converted Furmanite awards was allocated between consideration transferred in the acquisition and future share-based compensation expense, based on past service completed and future service required. The converted Furmanite awards have been identified, as applicable, in the tables that follow. Compensation expense related to share-based compensation totaled $6.7 million and $4.0 million for the nine months ended September 30, 2016 and 2015 , respectively. At September 30, 2016 , $10.8 million of unrecognized compensation expense related to share-based compensation is expected to be recognized over a remaining weighted-average period of 2.3 years . The tax benefit derived when share-based awards result in a tax deduction for the Company was $0.1 million and $1.5 million for the nine months ended September 30, 2016 and 2015 , respectively. Stock units are settled with common stock upon vesting unless it is not legally feasible to issue shares, in which case the value of the award is settled in cash. We determine the fair value of each stock unit based on the market price on the date of grant. Stock units generally vest in annual installments over four years and the expense associated with the units is recognized over the same vesting period. We also grant common stock to our directors which typically vest immediately. Compensation expense related to stock units and director stock grants totaled $5.6 million and $3.4 million for the nine months ended September 30, 2016 and 2015 , respectively. Transactions involving our stock units and director stock grants during the nine months ended September 30, 2016 and 2015 are summarized below: Nine Months Ended Nine Months Ended (unaudited) (unaudited) No. of Stock Units Weighted Average Fair Value No. of Stock Units Weighted Average Fair Value (in thousands) (in thousands) Stock and stock units, beginning of period 371 $ 36.26 328 $ 36.14 Changes during the period: Granted 86 $ 26.19 25 $ 43.29 Assumed - Furmanite acquisition 40 $ 25.63 — $ — Vested and settled (38 ) $ 27.61 (13 ) $ 37.69 Cancelled (13 ) $ 30.92 (22 ) $ 35.58 Stock and stock units, end of period 446 $ 34.27 318 $ 36.69 Under a performance stock unit award program adopted on November 4, 2014, Long-Term Performance Stock Unit (“LTPSU”) awards granted to our executive officers are subject to a three -year performance period and a concurrent three -year service period. Under this program, the Company communicates “target awards” to the executive officers at the beginning of a performance period. The performance target is based on results of operations over the three -year performance period with possible payouts ranging from 0% to 300% of the “target awards”. LTPSU awards cliff vest with achievement of the performance goals and completion of the three year service period. Settlement occurs with common stock within 20 business days of vesting. We determine the fair value of each LTPSU award based on the market price on the date of grant. Compensation expense is recognized on a straight-line basis over the vesting term of three years based upon the probable performance target that will be met. Compensation expense related to performance awards totaled $0.6 million and $0.2 million for the nine months ended September 30, 2016 and 2015 , respectively. Transactions involving our performance awards during the nine months ended September 30, 2016 and 2015 are summarized below: Nine Months Ended Nine Months Ended (unaudited) (unaudited) No. of Stock Units Weighted Average Fair Value No. of Stock Units Weighted Average Fair Value (in thousands) (in thousands) Long-term performance stock units, beginning of period 59 $ 37.16 23 $ 42.25 Changes during the period: Granted — $ — — $ — Vested and settled — $ — — $ — Cancelled — $ — — $ — Long-term performance stock units, end of period 59 $ 37.16 23 $ 42.25 Performance awards are settled with common stock upon vesting unless it is not legally feasible to issue shares, in which case the value of the award is settled in cash. We determine the fair value of each performance award based on the market price on the date of grant. Performance awards granted to the Chairman of our Board vest over the longer of four years or the achievement of performance goals based upon our future results of operations. Compensation expense related to performance awards totaled $0.3 million for both the nine months ended September 30, 2016 and 2015 . Transactions involving our performance awards during the nine months ended September 30, 2016 and 2015 are summarized below: Nine Months Ended Nine Months Ended (unaudited) (unaudited) No. of Performance Awards Weighted Average Fair Value No. of Performance Awards Weighted Average Fair Value (in thousands) (in thousands) Performance awards, beginning of period 13 $ 35.15 28 $ 32.86 Changes during the period: Granted — $ — — $ — Vested and settled (13 ) $ 35.15 — $ — Cancelled — $ — — $ — Performance awards, end of period — $ — 28 $ 32.86 We determine the fair value of each stock option at the grant date using a Black-Scholes model and recognize the resulting expense of our stock option awards over the period during which an employee is required to provide services in exchange for the awards, usually the vesting period. Compensation expense related to stock options for the nine months ended September 30, 2016 , was $0.2 million . There was no compensation expense related to stock options for the nine months ended September 30, 2015 . Our options typically vest in equal annual installments over a four -year service period. Expense related to an option grant is recognized on a straight line basis over the specified vesting period for those options. Stock options generally have a ten -year term. Transactions involving our stock options during the nine months ended September 30, 2016 and 2015 are summarized below: Nine Months Ended Nine Months Ended (unaudited) (unaudited) No. of Options Weighted Average Exercise Price No. of Options Weighted Average Exercise Price (in thousands) (in thousands) Shares under option, beginning of period 376 $ 25.71 691 $ 21.26 Changes during the period: Granted — $ — — $ — Assumed - Furmanite acquisition 132 $ 33.20 — $ — Exercised (136 ) $ 17.71 (241 ) $ 15.64 Cancelled (4 ) $ 44.62 — $ — Expired (45 ) $ 35.51 — $ — Shares under option, end of period 323 $ 30.52 450 $ 24.27 Exercisable at end of period 319 $ 30.40 450 $ 24.27 Options exercisable at September 30, 2016 had a weighted-average remaining contractual life of 2.3 years . For total options outstanding at September 30, 2016 , the range of exercise prices and remaining contractual lives are as follows: Range of Prices No. of Options Weighted Average Exercise Price Weighted Average Remaining Life (in thousands) (in years) $20.18 to $30.28 44 $ 25.80 2.1 $30.29 to $40.38 272 $ 30.75 2.1 $40.39 to $50.47 7 $ 50.47 7.6 Total 323 $ 30.52 2.3 |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE LOSS | 9 Months Ended |
Sep. 30, 2016 | |
Equity [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE LOSS | ACCUMULATED OTHER COMPREHENSIVE LOSS A summary of changes in accumulated other comprehensive loss included within shareholders’ equity is as follows (in thousands): Nine Months Ended Nine Months Ended (unaudited) (unaudited) Foreign Currency Translation Adjustments Foreign Currency Hedge Tax Provision Total Foreign Currency Translation Adjustments Foreign Currency Hedge Tax Provision Total Balance, beginning of period $ (28,124 ) $ 4,567 $ 5,183 $ (18,374 ) $ (13,718 ) $ 3,028 $ 2,284 $ (8,406 ) Other comprehensive income (loss) before tax 1,872 (347 ) (1,031 ) 494 (12,155 ) 1,122 2,365 (8,668 ) Noncontrolling interest — — — — 34 — — 34 Balance, end of period $ (26,252 ) $ 4,220 $ 4,152 $ (17,880 ) $ (25,839 ) $ 4,150 $ 4,649 $ (17,040 ) The following table represents the related tax effects allocated to each component of other comprehensive income (loss) (in thousands): Nine Months Ended Nine Months Ended (unaudited) (unaudited) Gross Amount Tax Effect Net Amount Gross Amount Tax Effect Net Amount Foreign currency translation adjustments $ 1,872 $ (1,147 ) $ 725 $ (12,155 ) $ 2,777 $ (9,378 ) Foreign currency hedge (347 ) 116 (231 ) 1,122 (412 ) 710 Total $ 1,525 $ (1,031 ) $ 494 $ (11,033 ) $ 2,365 $ (8,668 ) |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Con Ed Matter —We have, from time to time, provided temporary leak repair services for the steam operations of Consolidated Edison Company of New York (“Con Ed”) located in New York City. In July 2007, a Con Ed steam main located in midtown Manhattan ruptured causing one death and other injuries and property damage. As of September 30, 2016 , ninety-two lawsuits are currently pending against Con Ed, the City of New York and Team in the Supreme Courts of New York located in Kings, New York and Bronx County, alleging that our temporary leak repair services may have contributed to the cause of the rupture. The lawsuits seek generally unspecified compensatory damages for personal injury, property damage and business interruption. Additionally, on March 31, 2008, we received a letter from Con Ed alleging that our contract with Con Ed requires us to indemnify and defend Con Ed for additional claims filed against Con Ed as a result of the rupture. Con Ed filed an action to join Team and the City of New York as defendants in all lawsuits filed against Con Ed that did not include Team and the City of New York as direct defendants. We are vigorously defending the lawsuits and Con Ed’s claim for indemnification. We are unable to estimate the amount of liability to us, if any, associated with these lawsuits and the claim for indemnification. We maintain insurance coverage, subject to a deductible limit of $250,000 , which we believe should cover these claims. We have not accrued any liability in excess of the deductible limit for the lawsuits. We do not believe the ultimate outcome of these matters will have a material adverse effect on our financial position, results of operations, or cash flows. We anticipate a trial on the merits during the first half of 2017. Patent Infringement Matters —In December 2014, our subsidiary, Quest Integrity, filed three patent infringement lawsuits against three different defendants, two in the U.S. District of Delaware (“Delaware Cases”) and one in the U.S. District of Western Washington (“Washington Case”). Quest Integrity alleges that the three defendants infringed Quest Integrity’s patent, entitled “2D and 3D Display System and Method for Furnace Tube Inspection”. This Quest Integrity patent generally teaches a system and method for displaying inspection data collected during the inspection of furnace tubes in petroleum and petro-chemical refineries. The subject patent litigation is specific to the visual display of the collected data and does not relate to Quest Integrity’s underlying advanced inspection technology. In these lawsuits Quest Integrity is seeking temporary and permanent injunctive relief, as well as monetary damages. Defendants have denied they infringe any valid claim of Quest Integrity’s patent, and have asserted declaratory judgment counterclaims that the patent at issue is invalid and/or unenforceable, and not infringed. In June 2015, the U.S. District of Delaware denied our motions for preliminary injunctive relief in the Delaware Cases (that is, our request that the defendants stop using our patented systems and methods during the pendency of the actions). The Delaware Cases are expected to proceed to trial in the second quarter of 2017. The Washington Case does not have a trial date scheduled. We are involved in various other lawsuits and are subject to various claims and proceedings encountered in the normal conduct of business. In our opinion, any uninsured losses that might arise from these lawsuits and proceedings will not have a materially adverse effect on our consolidated financial statements. We establish a liability for loss contingencies, when information available to us indicates that it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. |
ENTITY WIDE DISCLOSURES
ENTITY WIDE DISCLOSURES | 9 Months Ended |
Sep. 30, 2016 | |
Segment Reporting [Abstract] | |
ENTITY WIDE DISCLOSURES | ENTITY WIDE DISCLOSURES ASC 280, Segment Reporting , requires us to disclose certain information about our operating segments where operating segments are defined as “components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance.” We conduct operations in three segments: TeamQualspec, TeamFurmanite and Quest Integrity. All three operating segments operate under a business segment manager who reports directly to Team’s Chief Executive Officer who operates as the chief operating decision maker. Furmanite, which we acquired in the first quarter of 2016 (see Note 2), is included in the TeamFurmanite segment, except that Furmanite’s corporate-related activities are included within corporate and shared support services in the tables below. Discontinued operations are not allocated to the segments. Segment data for our three operating segments are as follows (in thousands): Three Months Ended Nine Months Ended 2016 2015 2016 2015 (unaudited) (unaudited) (unaudited) (unaudited) Revenues: TeamQualspec $ 142,529 $ 157,308 $ 436,029 $ 394,720 TeamFurmanite 131,787 69,596 392,062 220,051 Quest Integrity 15,261 16,648 48,780 56,587 Total $ 289,577 $ 243,552 $ 876,871 $ 671,358 Three Months Ended Nine Months Ended 2016 2015 2016 2015 (unaudited) (unaudited) (unaudited) (unaudited) Operating income (loss): TeamQualspec $ 8,423 $ 14,386 $ 33,044 $ 43,092 TeamFurmanite 5,983 3,249 25,004 17,141 Quest Integrity 399 724 2,863 8,729 Corporate and shared support services (18,848 ) (11,502 ) (58,326 ) (32,372 ) Total $ (4,043 ) $ 6,857 $ 2,585 $ 36,590 Three Months Ended Nine Months Ended 2016 2015 2016 2015 (unaudited) (unaudited) (unaudited) (unaudited) Capital expenditures: TeamQualspec $ 1,932 $ 3,564 $ 7,143 $ 10,250 TeamFurmanite 6,308 2,760 12,439 5,952 Quest Integrity 211 1,101 1,105 2,392 Corporate and shared support services 5,475 4,708 15,207 11,955 Total $ 13,926 $ 12,133 $ 35,894 $ 30,549 Three Months Ended Nine Months Ended 2016 2015 2016 2015 (unaudited) (unaudited) (unaudited) (unaudited) Depreciation and amortization: TeamQualspec $ 4,930 $ 4,887 $ 15,035 $ 9,284 TeamFurmanite 5,705 2,137 15,049 6,049 Quest Integrity 1,374 1,462 3,940 4,343 Corporate and shared support services 530 288 1,408 858 Total $ 12,539 $ 8,774 $ 35,432 $ 20,534 Separate measures of Team’s assets by operating segment are not produced or utilized by management to evaluate segment performance. A geographic breakdown of our revenues for the three and nine months ended September 30, 2016 and 2015 and total assets as of September 30, 2016 and December 31, 2015 are as follows (in thousands): Three Months Ended Nine Months Ended 2016 2015 2016 2015 (unaudited) (unaudited) (unaudited) (unaudited) Revenues: United States $ 208,009 $ 192,109 $ 651,126 $ 509,592 Canada 33,747 30,194 97,568 93,137 Europe 27,930 10,935 77,971 36,293 Other foreign countries 19,891 10,314 50,206 32,336 Total $ 289,577 $ 243,552 $ 876,871 $ 671,358 September 30, 2016 December 31, 2015 (unaudited) Total assets: United States $ 958,541 $ 682,124 Canada 65,710 59,626 Europe 108,531 33,271 Other foreign countries 49,640 23,970 Total $ 1,182,422 $ 798,991 |
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS | 9 Months Ended |
Sep. 30, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DISCONTINUED OPERATIONS | DISCONTINUED OPERATIONS As part of our acquisition of Furmanite, we acquired a pipeline inspection business from Furmanite that primarily performs process management inspection services to contractors and operators participating primarily in the midstream oil and gas market in the United States. The business generates approximately $60 million in annual revenues. We have concluded that this business is not a strategic fit for Team and therefore we have decided not to retain it and are marketing the business to prospective buyers. We expect to complete the sale of the business within one year of the Furmanite acquisition date. We have concluded that this business qualifies as a discontinued operation upon its acquisition under GAAP. Therefore, we have classified the operating results and related assets and liabilities as discontinued operations in our condensed consolidated financial statements. Discontinued operations does not include any allocation of corporate overhead expense or interest expense. Income from discontinued operations, net of income tax, from the date of the Furmanite acquisition, consists of the following (in thousands): Three Months Ended Nine Months Ended (unaudited) (unaudited) Revenues $ 14,868 $ 36,542 Operating expenses 13,777 33,738 Gross margin 1,091 2,804 Selling, general and administrative expenses 554 1,412 Income from discontinued operations, before income tax 537 1,392 Less: Provision for income taxes 221 564 Income from discontinued operations, net of income tax $ 316 $ 828 Assets and liabilities of discontinued operations classified as held for sale in the condensed consolidated balance sheet as of September 30, 2016 consist of the following (in thousands): September 30, 2016 (unaudited) Current assets of discontinued operations: Receivables $ 12,110 Prepayments and other assets 215 Total assets of discontinued operations 12,325 Current liabilities of discontinued operations: Other accrued liabilities $ 1,065 As discussed in Note 2, the Furmanite purchase price allocation is based on provisional measurements and is subject to change. Accordingly, the amounts of assets and liabilities attributable to discontinued operations may be adjusted upon completion of the final valuation of the acquisition. For the three and nine months ended September 30, 2016, there were no material amounts of depreciation, amortization, capital expenditures or significant operating or investing non-cash items related to discontinued operations. |
REPURCHASE OF COMMON STOCK
REPURCHASE OF COMMON STOCK | 9 Months Ended |
Sep. 30, 2016 | |
Equity [Abstract] | |
REPURCHASE OF COMMON STOCK | REPURCHASE OF COMMON STOCK On June 23, 2014, our Board authorized an increase in the stock repurchase plan limit to $50.0 million . We repurchased 274,110 shares for a total cost of $7.6 million during the nine months ended September 30, 2016 . At September 30, 2016 , $7.9 million remained available to repurchase shares under the stock repurchase plan. Under the Credit Facility, the Company is limited in its ability to make stock repurchases unless the leverage ratio is below 2.50 to 1.00 . Notwithstanding such provision, in the event the leverage ratio is equal to or greater than 2.50 to 1.00 but is at least 0.25 less than the maximum permitted leverage ratio, the Credit Facility generally permits the the Company to make stock repurchases provided that such repurchases, plus any payments of cash dividends, do not exceed $50.0 million in the aggregate. |
SUMMARY OF SIGNIFICANT ACCOUN24
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES (Policies) | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Basis for presentation | Basis for presentation. These interim financial statements are unaudited, but in the opinion of our management, reflect all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of results for such periods. The consolidated condensed balance sheet at December 31, 2015 is derived from the December 31, 2015 audited consolidated financial statements. The results of operations for any interim period are not necessarily indicative of results for the full year. These financial statements should be read in conjunction with the financial statements and notes thereto contained in our Transition Report on Form 10-K for the transition period from June 1, 2015 to December 31, 2015 . |
Consolidation | Consolidation. The consolidated financial statements include the accounts of Team, Inc. and our majority-owned subsidiaries where we have control over operating and financial policies. Investments in affiliates in which we have the ability to exert significant influence over operating and financial policies, but where we do not control the operating and financial policies, are accounted for using the equity method. All material intercompany accounts and transactions have been eliminated in consolidation. |
Use of estimates | Use of estimates. Our accounting policies conform to Generally Accepted Accounting Principles in the U.S. (“GAAP”). Our most significant accounting policies are described below. The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and judgments that affect our reported financial position and results of operations. We review significant estimates and judgments affecting our consolidated financial statements on a recurring basis and record the effect of any necessary adjustments prior to their publication. Estimates and judgments are based on information available at the time such estimates and judgments are made. Adjustments made with respect to the use of these estimates and judgments often relate to information not previously available. Uncertainties with respect to such estimates and judgments are inherent in the preparation of financial statements. Estimates and judgments are used in, among other things, (1) aspects of revenue recognition, (2) valuation of acquisition-related tangible and intangible assets and assessments of all long-lived assets for possible impairment, (3) estimating various factors used to accrue liabilities for workers’ compensation, auto, medical and general liability, (4) establishing an allowance for uncollectible accounts receivable, (5) estimating the useful lives of our assets, (6) assessing future tax exposure and the realization of tax assets, (7) estimating the value associated with contingent consideration payment arrangements and (8) selecting assumptions used in the measurement of costs and liabilities associated with defined benefit pension plans. |
Fair value of financial instruments | Fair value of financial instruments . Our financial instruments consist primarily of cash, cash equivalents, accounts receivable, accounts payable and debt obligations. The carrying amount of cash, cash equivalents, trade accounts receivable and trade accounts payable are representative of their respective fair values due to the short-term maturity of these instruments. The fair value of our banking facility is representative of the carrying value based upon the variable terms and management’s opinion that the current rates available to us with the same maturity and security structure are equivalent to that of the banking facility. |
Cash and cash equivalents | Cash and cash equivalents . Cash and cash equivalents consist of all demand deposits and funds invested in highly liquid short-term investments with original maturities of three months or less. Included in our cash and cash equivalents at September 30, 2016 and December 31, 2015 is $10.9 million and $17.5 million , respectively, of cash in certain foreign subsidiaries (located primarily in Europe and Canada) where earnings are considered by the Company to be permanently reinvested. In the event that some or all of this cash were to be repatriated, we would be required to accrue and pay additional taxes. While not legally restricted from repatriating this cash, we consider all undistributed earnings of these foreign subsidiaries to be indefinitely reinvested and access to cash to be limited. |
Restricted cash | Restricted cash. We recorded $5.0 million in restricted cash on our balance sheet at December 31, 2015 to reflect the amount held in escrow for contingent consideration as stipulated by the Qualspec Group LLC (“Qualspec”) purchase agreement. Based on Qualspec’s results through December 31, 2015, the contingent consideration did not become due and, accordingly, this cash became unrestricted in the second quarter of 2016. |
Inventory | Inventory. We use the first-in, first-out method to determine inventory cost, except that inventory cost of Furmanite Corporation (“Furmanite”) and its subsidiaries, which we acquired on February 29, 2016 (see Note 2), is determined based on weighted-average cost. Inventory includes material, labor and certain fixed overhead costs. Inventory is stated at the lower of cost or market. Inventory quantities on hand are reviewed periodically and carrying cost is reduced to net realizable value for inventories for which their cost exceeds their utility. The cost of inventories consumed or products sold are included in operating expenses. |
Property, plant and equipment | Property, plant and equipment. Property, plant and equipment are stated at cost less accumulated depreciation and amortization. Leasehold improvements are amortized over the shorter of their respective useful life or the lease term. Depreciation and amortization of assets are computed by the straight-line method over the following estimated useful lives of the assets: Classification Useful Life Buildings 20-40 years Leasehold improvements 2-15 years Machinery and equipment 2-12 years Furniture and fixtures 2-10 years Computers and computer software 2-5 years Automobiles 2-5 years |
Goodwill and intangible assets | Goodwill and intangible assets. We allocate the purchase price of acquired businesses to their identifiable tangible assets and liabilities, such as accounts receivable, inventory, property, plant and equipment, accounts payable and accrued liabilities. We also allocate a portion of the purchase price to identifiable intangible assets, such as non-compete agreements, trademarks, trade names, patents, technology and customer relationships. Allocations are based on estimated fair values of assets and liabilities. The Company uses all available information to estimate fair values including quoted market prices, the carrying value of acquired assets, and widely accepted valuation techniques such as discounted cash flows. Certain estimates and judgments are required in the application of the fair value techniques, including estimates of future cash flows, selling prices, replacement costs, economic lives and the selection of a discount rate, which involves the use of Level 3 measurements as defined in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosur e (“ASC 820”). Deferred taxes are recorded for any differences between the assigned values and tax bases of assets and liabilities. Estimated deferred taxes are based on available information concerning the tax bases of assets acquired and liabilities assumed and loss carryforwards at the acquisition date, although such estimates may change in the future as additional information becomes known. Any remaining excess of cost over allocated fair values is recorded as goodwill. We typically engage third-party valuation experts to assist in determining the fair values for both the identifiable tangible and intangible assets. The judgments made in determining the estimated fair value assigned to each class of assets acquired and liabilities assumed, as well as asset lives, could materially impact the Company’s results of operations. Goodwill and intangible assets acquired in a purchase business combination and determined to have an indefinite useful life are not amortized, but are instead tested for impairment at least annually in accordance with the provisions of the ASC 350, Intangibles—Goodwill and Other (“ASC 350”). Intangible assets with estimated useful lives are amortized over their respective estimated useful lives to their estimated residual values and reviewed for impairment in accordance with ASC 350. We assess goodwill for impairment at the reporting unit level, which we have determined to be the same as our operating segments. Each reporting unit has goodwill relating to past acquisitions. The test for impairment is a two-step process that involves comparing the estimated fair value of each reporting unit to the reporting unit’s carrying value, including goodwill. If the fair value of a reporting unit exceeds its carrying amount, the goodwill of the reporting unit is not considered impaired; therefore, the second step of the impairment test is not deemed necessary. If the carrying amount of the reporting unit exceeds its fair value, we then perform a second step to the goodwill impairment test to measure the amount of goodwill impairment loss to be recorded. With the change in our fiscal year end to December 31 of each calendar year, our goodwill annual test date changed to December 1, effective December 1, 2015. Due to the changes in the underlying assumptions surrounding our goodwill testing as a result of significant acquisitions (see Note 2), we performed a quantitative analysis of goodwill to test for impairment at December 1, 2015 and concluded there was no impairment. The fair values of the reporting units at December 1, 2015 were determined using a method based on discounted cash flow models with estimated cash flows based on internal forecasts of revenue and expenses over a four -year period plus a terminal value period (the income approach). The income approach estimated fair value by discounting each reporting unit’s estimated future cash flows using a discount rate that approximated our weighted-average cost of capital. The fair value derived from the income approach, in the aggregate, approximated our market capitalization. At December 1, 2015, our market capitalization exceeded the carrying value of our consolidated net assets by approximately $482 million or 141% , and the fair value of each reporting unit significantly exceeded its respective carrying amount as of that date. There have been no events that have required an interim assessment of the carrying value of goodwill during 2016. There was $370.7 million and $256.7 million of goodwill at September 30, 2016 and December 31, 2015 , respectively. See Note 2 for additional information related to the acquisitions that increased goodwill in the period. A rollforward of goodwill for the nine months ended September 30, 2016 is as follows (in thousands): Nine Months Ended (unaudited) TeamQualspec TeamFurmanite Quest Integrity Total Balance at beginning of period $ 207,497 $ 19,874 $ 29,283 $ 256,654 Acquisitions 5,955 102,587 4,137 112,679 Foreign currency adjustments 746 255 392 1,393 Balance at end of period $ 214,198 $ 122,716 $ 33,812 $ 370,726 |
Income taxes | Income taxes. We follow the guidance of ASC 740, Income Taxes (“ASC 740”) which requires that we use the asset and liability method of accounting for deferred income taxes and provide deferred income taxes for all significant temporary differences. As part of the process of preparing our consolidated financial statements, we are required to estimate our income taxes in each of the jurisdictions in which we operate. This process involves estimating our actual current tax payable and related tax expense together with assessing temporary differences resulting from differing treatment of certain items, such as depreciation, for tax and accounting purposes. These differences can result in deferred tax assets and liabilities, which are included within our consolidated balance sheets. In accordance with ASC 740, we are required to assess the likelihood that our deferred tax assets will be realized and, to the extent we believe that it is more likely than not (a likelihood of more than 50% ) that some portion or all of the deferred tax assets will not be realized, we must establish a valuation allowance. We consider all available evidence to determine whether, based on the weight of the evidence, a valuation allowance is needed. Evidence used includes information about our current financial position and our results of operations for the current and preceding years, as well as all currently available information about future years, including our anticipated future performance, the reversal of existing taxable temporary differences and tax planning strategies. During the three months ended June 30, 2016, we calculated a measurement-period adjustment associated with our acquisition of Furmanite (Note 2) that increased deferred tax liabilities and goodwill by $47.9 million . This adjustment represents the acquisition-date deferred tax liability associated with the accumulated undistributed earnings of certain of Furmanite’s foreign subsidiaries, which we do not consider to be indefinitely reinvested outside the United States. |
Workers' compensation, auto, medical and general liability accruals | Workers’ compensation, auto, medical and general liability accruals. In accordance with ASC 450, Contingencies , we record a loss contingency when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. We review our loss contingencies on an ongoing basis to ensure that we have appropriate reserves recorded on our balance sheet. These reserves are based on historical experience with claims incurred but not received, estimates and judgments made by management, applicable insurance coverage for litigation matters, and are adjusted as circumstances warrant. For workers’ compensation, our self-insured retention is $1.0 million and our automobile liability self-insured retention is currently $500,000 per occurrence. For general liability claims we have an effective self-insured retention of $3.0 million per occurrence. For medical claims, our self-insured retention is $175,000 per individual claimant determined on an annual basis. For environmental liability claims, our self-insured retention is $1.0 million per occurrence. We maintain insurance for claims that exceed such self-retention limits. The insurance is subject to terms, conditions, limitations and exclusions that may not fully compensate us for all losses. Furmanite was generally incorporated into our existing insurance coverage during the second quarter of 2016, but for certain items it continues to maintain separate insurance policies and accordingly has separate self-insurance retention amounts, with such self-retention amounts generally below the levels noted above. Our estimates and judgments could change based on new information, changes in laws or regulations, changes in management’s plans or intentions, or the outcome of legal proceedings, settlements or other factors. If different estimates and judgments were applied with respect to these matters, it is likely that reserves would be recorded for different amounts. |
Revenue recognition | Revenue recognition. We determine our revenue recognition guidelines for our operations based on guidance provided in applicable accounting standards and positions adopted by the FASB and the Securities and Exchange Commission (“SEC”). Most of our projects are short-term in nature and we predominantly derive revenues by providing a variety of industrial services on a time and material basis. For all of these services, our revenues are recognized when services are rendered or when product is shipped to the job site and risk of ownership passes to the customer. However, due to various contractual terms with our customers, at the end of any reporting period, there may be earned but unbilled revenue that is accrued to properly match revenues with related costs. At September 30, 2016 and December 31, 2015 , the amount of earned but unbilled revenue included in accounts receivable was $80.8 million and $47.1 million , respectively. |
Allowance for doubtful accounts | Allowance for doubtful accounts. In the ordinary course of business, a portion of our accounts receivable are not collected due to billing disputes, customer bankruptcies, dissatisfaction with the services we performed and other various reasons. We establish an allowance to account for those accounts receivable that will eventually be deemed uncollectible. The allowance for doubtful accounts is based on a combination of our historical experience and management’s review of long outstanding accounts receivable. |
Concentration of credit risk | Concentration of credit risk. No single customer accounts for more than 10% of consolidated revenues. |
Earnings (loss) per share | Earnings (loss) per share. Basic earnings (loss) per share is computed by dividing income (loss) from continuing operations, income from discontinued operations or net income (loss) available to Team shareholders by the weighted-average number of shares of common stock outstanding during the year. Diluted earnings per share is computed by dividing income (loss) from continuing operations, income from discontinued operations or net income (loss) available to Team shareholders, less income or loss for the period attributable to the noncontrolling interest, by the sum of (1) the weighted-average number of shares of common stock, outstanding during the period, (2) the dilutive effect of the assumed exercise of share-based compensation using the treasury stock method and (3) the dilutive effect of the assumed conversion of our noncontrolling interest to our common stock prior to the acquisition of that interest. Amounts used in basic and diluted earnings (loss) per share, for the three and nine months ended September 30, 2016 and 2015 , are as follows (in thousands): Three Months Ended Nine Months Ended 2016 2015 2016 2015 (unaudited) (unaudited) (unaudited) (unaudited) Weighted-average number of basic shares outstanding 29,361 20,375 27,609 20,371 Stock options, stock units and performance awards — 342 — 331 Conversion of noncontrolling interest — 728 — 728 Total shares and dilutive securities 29,361 21,445 27,609 21,430 For the three and nine months ended September 30, 2016, all outstanding share-based compensation awards were excluded from the calculation of diluted earnings (loss) per share because their inclusion would be antidilutive due to the loss from continuing operations for the periods. There were no stock options outstanding during the three and nine months ended September 30, 2015 excluded from the computation of diluted earnings per share |
Foreign currency | Foreign currency . For subsidiaries whose functional currency is not the U.S. Dollar, assets and liabilities are translated at period ending rates of exchange and revenues and expenses are translated at period average exchange rates. Translation adjustments for the asset and liability accounts are included as a separate component of accumulated other comprehensive loss in shareholders’ equity. Foreign currency transaction gains and losses are included in our consolidated statements of operations. We utilize monthly foreign currency swap contracts to reduce exposures to changes in foreign currency exchange rates related to our largest exposures including, but not limited to, the Australian Dollar, Canadian Dollar, Brazilian Real, British Pound, Euro, Malaysian Ringgit and Mexican Peso. The impact from these swap contracts was not material for the three months or nine months ended September 30, 2016 nor as of the balance sheet dates of September 30, 2016 and December 31, 2015 . |
Defined Benefit Pension Plans | Defined Benefit Pension Plans. Pension benefit costs and liabilities are dependent on assumptions used in calculating such amounts. The primary assumptions include factors such as discount rates, expected investment return on plan assets, mortality rates and retirement rates. These rates are reviewed annually and adjusted to reflect current conditions. These rates are determined based on reference to yields. The expected return on plan assets is derived from detailed periodic studies, which include a review of asset allocation strategies, anticipated future long-term performance of individual asset classes, risks (standard deviations) and correlations of returns among the asset classes that comprise the plans’ asset mix. While the studies give appropriate consideration to recent plan performance and historical returns, the assumptions are primarily long-term, prospective rates of return. Mortality and retirement rates are based on actual and anticipated plan experience. In accordance with GAAP, actual results that differ from the assumptions are accumulated and amortized over future periods and, therefore, generally affect recognized expense in future periods. While we believe that the assumptions used are appropriate, differences in actual experience or changes in assumptions may affect the pension obligation and future expense. |
Newly Adopted Accounting Principles and Accounting Principles Not Yet Adopted | Newly Adopted Accounting Principles ASU No. 2015-03 and ASU No. 2015-15 . In April 2015, the FASB issued Accounting Standards Update (“ASU”) No. 2015-03, Interest—Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs (“ASU 2015-03”), which requires that debt issuance costs be presented as a direct deduction from the carrying amount of the related debt liability, consistent with the presentation of debt discounts. Prior to the issuance of ASU 2015-03, debt issuance costs were required to be presented as other assets, separate from the related debt liability. ASU 2015-03 does not change the recognition and measurement requirements for debt issuance costs. In August 2015, the FASB issued ASU No. 2015-15, Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements (“ASU 2015-15”), that adds SEC paragraphs pursuant to the SEC Staff Announcement at the June 18, 2015, Emerging Issues Task Force meeting about the presentation and subsequent measurement of debt issuance costs associated with line-of-credit arrangements. Given the absence of authoritative guidance within ASU 2015-03 for debt issuance costs related to line-of-credit arrangements, ASU 2015-15 states the SEC staff would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. Team adopted ASU 2015-15 effective upon adoption of ASU 2015-03 on January 1, 2016. Because essentially all of Team’s deferred debt issuance costs relate to line-of-credit arrangements, we have elected to continue presenting such costs as an asset. Therefore, adoption of ASU 2015-03 and ASU 2015-15 did not have any impact on our results of operations, financial position or cash flows. ASU No. 2015-16 . In September 2015, the FASB issued ASU No. 2015-16, Business Combinations- Simplifying the Accounting for Measurement-Period Adjustments (“ASU 2015-16”), that requires the acquirer in a business combination to recognize in the reporting period in which adjustment amounts are determined, any adjustments to provisional amounts that are identified during the measurement period, calculated as if the accounting had been completed at the acquisition date. Prior to the issuance of ASU 2015-16, an acquirer was required to restate prior period financial statements as of the acquisition date for adjustments to provisional amounts. Team adopted ASU 2015-16 effective January 1, 2016 and its adoption did not have a material impact on our results of operations, financial position or cash flows. We have included the required disclosures with respect to measurement-period adjustments in Note 2. Accounting Principles Not Yet Adopted ASU No. 2014-09 . In May 2014, the FASB issued Accounting Standards Update (“ASU”) ASU No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. ASU 2014-09 will replace most existing revenue recognition guidance in GAAP when it becomes effective. The new standard is effective for us on January 1, 2018, with early application permitted as of January 1, 2017. ASU 2014-09 permits the use of either the retrospective or cumulative effect transition method. We are evaluating the effect that ASU 2014-09 will have on our consolidated financial statements and related disclosures. We have not yet selected a transition method or determined the effect ASU 2014-09 will have on our ongoing financial reporting. ASU No. 2015-11 . In July 2015, the FASB issued ASU 2015-11, Inventory—Simplifying the Measurement of Inventory (“ASU 2015-11”), which requires entities that measure inventory using the first-in, first-out or average cost methods to measure inventory at the lower of cost and net realizable value to more closely align the measurement of inventory in GAAP with International Financial Reporting Standards (“IFRS”). Net realizable value is defined as estimated selling price in the ordinary course of business less reasonably predictable costs of completion, disposal and transportation. ASU 2015-11 is effective for fiscal years beginning after December 15, 2016 on a prospective basis, with earlier application permitted. The adoption of this update is not expected to have a material impact on our results of operations, financial position or cash flows. ASU No. 2015-17 . In November 2015, the FASB issued ASU No. 2015-17, Income Taxes: Balance Sheet Classification of Deferred Taxes (“ASU 2015-17”), which simplifies the presentation of deferred taxes by requiring deferred tax assets and liabilities be classified as noncurrent on the balance sheet. ASU 2015-17 is effective for fiscal years beginning after December 15, 2016. The ASU may be adopted prospectively or retrospectively and early adoption is permitted. The adoption of this ASU is not expected to have a material impact on our results of operations, financial position or cash flows. ASU No. 2016-02. In February 2016, the FASB issued ASU No. 2016-02, Leases (“ASU 2016-02”), which changes the accounting for leases, including a requirement to record all leases on the consolidated balance sheets as assets and liabilities. This ASU is effective for fiscal years beginning after December 15, 2018. We will adopt ASU 2016-02 effective January 1, 2019. We are currently evaluating the impact this ASU will have on our ongoing financial reporting. ASU No. 2016-09. In March 2016, the FASB issued ASU No. 2016-09, Compensation–Stock Compensation: Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”), which makes several modifications to GAAP related to share-based payments including the accounting for forfeitures, employee taxes and the financial statement presentation of excess tax benefits or deficiencies. ASU 2016-09 also clarifies the statement of cash flows presentation for certain components of share-based awards. The ASU is effective for interim and annual reporting periods beginning after December 15, 2016, although early adoption is permitted. The adoption of ASU 2016-09 is not expected to have a material impact on our financial position or cash flows. Upon adoption, on a prospective basis, our income tax expense will be impacted by future excess tax benefits or deficiencies that under previous GAAP were recognized within stockholders’ equity rather than through the statement of operations. ASU No. 2016-13. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments–Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which amends GAAP by introducing a new impairment model for financial instruments that is based on expected credit losses rather than incurred credit losses. The new impairment model applies to most financial assets, including trade accounts receivable. ASU 2016-13 is effective for interim and annual reporting periods beginning after December 15, 2019, although it may be adopted one year earlier, and requires a modified retrospective transition approach. We are currently evaluating the impact this ASU will have on our ongoing financial reporting. ASU No. 2016-15 . In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”), which clarifies the classification in the statement of cash flows of certain items, including debt prepayment or extinguishment costs, settlement of contingent consideration arising from a business combination, insurance settlement proceeds, and cash receipts and payments having aspects of more than one class of cash flows. ASU 2016-15 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. Early adoption is permitted. We do not expect the adoption of this ASU to have a material impact on our statements of cash flows. ASU No. 2016-16. In October 2016, the FASB issued ASU No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory (“ASU 2016-16”), which will require an entity to recognize the income tax consequences of an intra-entity transfer of an asset, other than inventory, when the transfer occurs. ASU 2016-16 is effective on January 1, 2018 with early adoption permitted. We are currently evaluating the impact this ASU will have on our ongoing financial reporting. |
SUMMARY OF SIGNIFICANT ACCOUN25
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Estimated Useful Lives of Assets | Depreciation and amortization of assets are computed by the straight-line method over the following estimated useful lives of the assets: Classification Useful Life Buildings 20-40 years Leasehold improvements 2-15 years Machinery and equipment 2-12 years Furniture and fixtures 2-10 years Computers and computer software 2-5 years Automobiles 2-5 years A summary of property, plant and equipment as of September 30, 2016 and December 31, 2015 is as follows (in thousands): September 30, 2016 December 31, 2015 (unaudited) Land $ 7,465 $ 3,124 Buildings and leasehold improvements 42,868 29,690 Machinery and equipment 239,313 174,222 Furniture and fixtures 8,557 6,561 Capitalized ERP system development costs 40,324 25,606 Computers and computer software 11,880 8,062 Automobiles 5,728 5,280 Construction in progress 13,826 5,177 Total 369,961 257,722 Accumulated depreciation and amortization (157,925 ) (132,739 ) Property, plant and equipment, net $ 212,036 $ 124,983 |
Schedule of Rollforward Goodwill | A rollforward of goodwill for the nine months ended September 30, 2016 is as follows (in thousands): Nine Months Ended (unaudited) TeamQualspec TeamFurmanite Quest Integrity Total Balance at beginning of period $ 207,497 $ 19,874 $ 29,283 $ 256,654 Acquisitions 5,955 102,587 4,137 112,679 Foreign currency adjustments 746 255 392 1,393 Balance at end of period $ 214,198 $ 122,716 $ 33,812 $ 370,726 |
Amounts Used In Basic and Diluted Earnings (Loss) Per Share | Amounts used in basic and diluted earnings (loss) per share, for the three and nine months ended September 30, 2016 and 2015 , are as follows (in thousands): Three Months Ended Nine Months Ended 2016 2015 2016 2015 (unaudited) (unaudited) (unaudited) (unaudited) Weighted-average number of basic shares outstanding 29,361 20,375 27,609 20,371 Stock options, stock units and performance awards — 342 — 331 Conversion of noncontrolling interest — 728 — 728 Total shares and dilutive securities 29,361 21,445 27,609 21,430 |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Business Acquisition [Line Items] | |
Summary of Purchase Price Allocation | The following table presents the preliminary purchase price allocation for Furmanite (in thousands): February 29, 2016 (unaudited) Cash and cash equivalents $ 37,734 Accounts receivable 64,502 Inventory 25,709 Current deferred tax assets 11,563 Prepaid expenses and other current assets 23,207 Current assets of discontinued operations 14,760 Property, plant and equipment 71,241 Intangible assets 70,800 Goodwill 102,587 Other non-current assets 3,709 Total assets acquired $ 425,812 Accounts payable $ 12,359 Other accrued liabilities 28,918 Income taxes payable 229 Current liabilities of discontinued operations 1,434 Non-current deferred tax liabilities 84,328 Defined benefit pension liability 13,509 Other long-term liabilities 2,694 Total liabilities assumed 143,471 Net assets acquired $ 282,341 The following table presents the purchase price allocation for Qualspec (in thousands): July 7, 2015 (unaudited) Cash and cash equivalents $ 3,981 Accounts receivable 21,495 Current deferred tax assets 279 Prepaid expenses 1,049 Plant, property and equipment 15,472 Intangible assets 78,100 Goodwill 148,482 Other assets 138 Total assets acquired $ 268,996 Accounts payable $ 2,892 Other accrued liabilities 7,581 Non-current deferred tax liability 2,982 Total liabilities assumed 13,455 Net assets acquired $ 255,541 |
Summary of Pro Forma Consolidated Statement of Operations | Pro Forma Information - Furmanite and Qualspec Our unaudited pro forma consolidated results of operations are shown below as if the acquisitions of Furmanite and Qualspec had occurred at the beginning of fiscal year 2015. These results are not necessarily indicative of the results which would actually have occurred if the acquisitions had taken place at the beginning of fiscal year 2015, nor are they necessarily indicative of future results (in thousands, except per share data). Pro forma data Pro forma data Three Months Ended Nine Months Ended 2015 2016 2015 (unaudited) (unaudited) (unaudited) Revenues $ 327,612 $ 920,641 $ 1,020,779 Income (loss) from continuing operations attributable to Team shareholders $ 3,545 $ (809 ) $ 22,294 Earnings (loss) per share from continuing operations: Basic $ 0.12 $ (0.03 ) $ 0.78 Diluted $ 0.12 $ (0.03 ) $ 0.75 These amounts have been calculated after applying Team’s accounting policies and adjusting the results of Furmanite and Qualspec to reflect the additional depreciation and amortization that would have been charged assuming the fair value adjustments to property, plant and equipment and intangible assets had been applied on January 1, 2015, together with the related tax effects. Additionally, these pro forma results exclude discontinued operations as well as the impact of costs related to the Furmanite and Qualspec acquisitions included in the historical results. |
Furmanite Corporation | |
Business Acquisition [Line Items] | |
Schedule of Consideration Transferred | The acquisition-date fair value of the consideration transferred totaled $282.3 million , which consisted of the following (in thousands, except shares): February 29, 2016 (unaudited) Common stock (8,208,006 shares) $ 209,529 Converted share-based payment awards 2,001 Cash 70,811 Total consideration $ 282,341 |
RECEIVABLES (Tables)
RECEIVABLES (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Receivables [Abstract] | |
Summary of Accounts Receivable | A summary of accounts receivable as of September 30, 2016 and December 31, 2015 is as follows (in thousands): September 30, 2016 December 31, 2015 (unaudited) Trade accounts receivable $ 190,185 $ 170,774 Unbilled revenues 80,750 47,098 Allowance for doubtful accounts (6,432 ) (3,548 ) Total $ 264,503 $ 214,324 |
INVENTORY (Tables)
INVENTORY (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Inventory Disclosure [Abstract] | |
Summary of Inventory | A summary of inventory as of September 30, 2016 and December 31, 2015 is as follows (in thousands): September 30, 2016 December 31, 2015 (unaudited) Raw materials $ 7,840 $ 3,167 Work in progress 3,655 1,018 Finished goods 40,943 23,751 Total $ 52,438 $ 27,936 |
PROPERTY, PLANT AND EQUIPMENT (
PROPERTY, PLANT AND EQUIPMENT (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property, Plant and Equipment | Depreciation and amortization of assets are computed by the straight-line method over the following estimated useful lives of the assets: Classification Useful Life Buildings 20-40 years Leasehold improvements 2-15 years Machinery and equipment 2-12 years Furniture and fixtures 2-10 years Computers and computer software 2-5 years Automobiles 2-5 years A summary of property, plant and equipment as of September 30, 2016 and December 31, 2015 is as follows (in thousands): September 30, 2016 December 31, 2015 (unaudited) Land $ 7,465 $ 3,124 Buildings and leasehold improvements 42,868 29,690 Machinery and equipment 239,313 174,222 Furniture and fixtures 8,557 6,561 Capitalized ERP system development costs 40,324 25,606 Computers and computer software 11,880 8,062 Automobiles 5,728 5,280 Construction in progress 13,826 5,177 Total 369,961 257,722 Accumulated depreciation and amortization (157,925 ) (132,739 ) Property, plant and equipment, net $ 212,036 $ 124,983 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Intangible Assets | A summary of intangible assets as of September 30, 2016 and December 31, 2015 is as follows (in thousands): September 30, 2016 December 31, 2015 (unaudited) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Customer relationships $ 156,848 $ (21,357 ) $ 135,491 $ 103,288 $ (12,995 ) $ 90,293 Non-compete agreements 5,475 (3,826 ) 1,649 4,898 (3,468 ) 1,430 Trade names 24,722 (3,736 ) 20,986 6,299 (1,940 ) 4,359 Technology 7,838 (3,145 ) 4,693 5,112 (2,541 ) 2,571 Licenses 848 (296 ) 552 683 (217 ) 466 Total $ 195,731 $ (32,360 ) $ 163,371 $ 120,280 $ (21,161 ) $ 99,119 |
OTHER ACCRUED LIABILITIES (Tabl
OTHER ACCRUED LIABILITIES (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Payables and Accruals [Abstract] | |
Summary of Other Accrued Liabilities | A summary of other accrued liabilities as of September 30, 2016 and December 31, 2015 is as follows (in thousands): September 30, 2016 December 31, 2015 (unaudited) Payroll and other compensation expenses $ 43,874 $ 21,878 Insurance accruals 10,213 7,008 Property, sales and other non-income related taxes 5,379 3,058 Deferred revenue 3,705 1,355 Lease commitments 2,631 1,721 Contingent consideration 2,033 3,638 Accrued commission 2,000 1,159 Volume discount 896 1,280 Accrued interest 686 984 Other 10,680 7,715 Total $ 82,097 $ 49,796 |
LONG-TERM DEBT, DERIVATIVES A32
LONG-TERM DEBT, DERIVATIVES AND LETTERS OF CREDIT (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
Amounts Recognized In Other Comprehensive Income, and Reclassified Into Income | The amounts recognized in other comprehensive income (loss), and reclassified into income, for the three and nine months ended September 30, 2016 and 2015 , are as follows (in thousands): Gain (Loss) Recognized in Other Comprehensive Income (Loss) Gain Reclassified from Other Comprehensive Income (Loss) to Earnings Gain (Loss) Recognized in Other Comprehensive Income (Loss) Gain (Loss) Reclassified from Other Comprehensive Income (Loss) to Earnings Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended (unaudited) (unaudited) (unaudited) (unaudited) 2016 2015 2016 2015 2016 2015 2016 2015 Net investment hedge $ (104 ) $ (183 ) $ — $ — $ (347 ) $ 1,122 $ — $ — |
Fair Value Totals and Balance Sheet Classification for Derivatives Designated As Hedges | The following table presents the fair value totals and balance sheet classification for derivatives designated as hedges under ASC 815 (in thousands): September 30, 2016 December 31, 2015 (unaudited) Classification Balance Sheet Location Fair Value Classification Balance Sheet Location Fair Value Net investment hedge Liability Long-term debt $ (4,220 ) Liability Long-term debt $ (4,567 ) |
RETIREMENT PLANS (Tables)
RETIREMENT PLANS (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Schedule of Net Periodic Pension Cost | Net periodic pension cost, from the date of the Furmanite acquisition, for the U.K. and Norwegian Plans includes the following components (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 (unaudited) (unaudited) (unaudited) (unaudited) Service cost $ 21 $ — $ 50 $ — Interest cost 742 — 1,810 — Expected return on plan assets (759 ) — (1,852 ) — Net periodic pension cost $ 4 $ — $ 8 $ — |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Assets and Liabilities Measured on Recurring Basis | The following table sets forth, by level within the fair value hierarchy, our financial assets and liabilities that are accounted for at fair value on a recurring basis as of September 30, 2016 and December 31, 2015 . As required by ASC 820, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement (in thousands): September 30, 2016 (unaudited) Quoted Prices in Active Markets for Identical Items (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Liabilities: Contingent consideration 1 $ — $ — $ 3,743 $ 3,743 Net investment hedge $ — $ (4,220 ) $ — $ (4,220 ) December 31, 2015 Quoted Prices in Active Markets for Identical Items (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Liabilities: Contingent consideration 1 $ — $ — $ 3,638 $ 3,638 Net investment hedge $ — $ (4,567 ) $ — $ (4,567 ) |
Summary of Changes in Fair Value of Level 3 Contingent Consideration | The following table represents the changes in the fair value of Level 3 contingent consideration (in thousands): Nine Months Ended (unaudited) Balance, beginning of period $ 3,638 Accretion of liability 261 Payment (4,000 ) Revaluation 2,184 Acquisitions 1,660 Balance, end of period $ 3,743 |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of Transactions Involving Stock Units and Director Stock Grants | Transactions involving our stock units and director stock grants during the nine months ended September 30, 2016 and 2015 are summarized below: Nine Months Ended Nine Months Ended (unaudited) (unaudited) No. of Stock Units Weighted Average Fair Value No. of Stock Units Weighted Average Fair Value (in thousands) (in thousands) Stock and stock units, beginning of period 371 $ 36.26 328 $ 36.14 Changes during the period: Granted 86 $ 26.19 25 $ 43.29 Assumed - Furmanite acquisition 40 $ 25.63 — $ — Vested and settled (38 ) $ 27.61 (13 ) $ 37.69 Cancelled (13 ) $ 30.92 (22 ) $ 35.58 Stock and stock units, end of period 446 $ 34.27 318 $ 36.69 |
Summary of Transactions Involving Performance Awards | Transactions involving our performance awards during the nine months ended September 30, 2016 and 2015 are summarized below: Nine Months Ended Nine Months Ended (unaudited) (unaudited) No. of Stock Units Weighted Average Fair Value No. of Stock Units Weighted Average Fair Value (in thousands) (in thousands) Long-term performance stock units, beginning of period 59 $ 37.16 23 $ 42.25 Changes during the period: Granted — $ — — $ — Vested and settled — $ — — $ — Cancelled — $ — — $ — Long-term performance stock units, end of period 59 $ 37.16 23 $ 42.25 Transactions involving our performance awards during the nine months ended September 30, 2016 and 2015 are summarized below: Nine Months Ended Nine Months Ended (unaudited) (unaudited) No. of Performance Awards Weighted Average Fair Value No. of Performance Awards Weighted Average Fair Value (in thousands) (in thousands) Performance awards, beginning of period 13 $ 35.15 28 $ 32.86 Changes during the period: Granted — $ — — $ — Vested and settled (13 ) $ 35.15 — $ — Cancelled — $ — — $ — Performance awards, end of period — $ — 28 $ 32.86 |
Summary of Transactions Involving Stock Options | Transactions involving our stock options during the nine months ended September 30, 2016 and 2015 are summarized below: Nine Months Ended Nine Months Ended (unaudited) (unaudited) No. of Options Weighted Average Exercise Price No. of Options Weighted Average Exercise Price (in thousands) (in thousands) Shares under option, beginning of period 376 $ 25.71 691 $ 21.26 Changes during the period: Granted — $ — — $ — Assumed - Furmanite acquisition 132 $ 33.20 — $ — Exercised (136 ) $ 17.71 (241 ) $ 15.64 Cancelled (4 ) $ 44.62 — $ — Expired (45 ) $ 35.51 — $ — Shares under option, end of period 323 $ 30.52 450 $ 24.27 Exercisable at end of period 319 $ 30.40 450 $ 24.27 |
Total Options Outstanding, Range of Exercise Prices and Remaining Contractual Lives | Options exercisable at September 30, 2016 had a weighted-average remaining contractual life of 2.3 years . For total options outstanding at September 30, 2016 , the range of exercise prices and remaining contractual lives are as follows: Range of Prices No. of Options Weighted Average Exercise Price Weighted Average Remaining Life (in thousands) (in years) $20.18 to $30.28 44 $ 25.80 2.1 $30.29 to $40.38 272 $ 30.75 2.1 $40.39 to $50.47 7 $ 50.47 7.6 Total 323 $ 30.52 2.3 |
ACCUMULATED OTHER COMPREHENSI36
ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Equity [Abstract] | |
Summary of Changes in Accumulated Other Comprehensive Loss Included Within Shareholders' Equity | A summary of changes in accumulated other comprehensive loss included within shareholders’ equity is as follows (in thousands): Nine Months Ended Nine Months Ended (unaudited) (unaudited) Foreign Currency Translation Adjustments Foreign Currency Hedge Tax Provision Total Foreign Currency Translation Adjustments Foreign Currency Hedge Tax Provision Total Balance, beginning of period $ (28,124 ) $ 4,567 $ 5,183 $ (18,374 ) $ (13,718 ) $ 3,028 $ 2,284 $ (8,406 ) Other comprehensive income (loss) before tax 1,872 (347 ) (1,031 ) 494 (12,155 ) 1,122 2,365 (8,668 ) Noncontrolling interest — — — — 34 — — 34 Balance, end of period $ (26,252 ) $ 4,220 $ 4,152 $ (17,880 ) $ (25,839 ) $ 4,150 $ 4,649 $ (17,040 ) |
Related Tax Effects Allocated to Each Component of Other Comprehensive Loss | The following table represents the related tax effects allocated to each component of other comprehensive income (loss) (in thousands): Nine Months Ended Nine Months Ended (unaudited) (unaudited) Gross Amount Tax Effect Net Amount Gross Amount Tax Effect Net Amount Foreign currency translation adjustments $ 1,872 $ (1,147 ) $ 725 $ (12,155 ) $ 2,777 $ (9,378 ) Foreign currency hedge (347 ) 116 (231 ) 1,122 (412 ) 710 Total $ 1,525 $ (1,031 ) $ 494 $ (11,033 ) $ 2,365 $ (8,668 ) |
ENTITY WIDE DISCLOSURES (Tables
ENTITY WIDE DISCLOSURES (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Segment Reporting [Abstract] | |
Segment Data for our Three Operating Segments | Segment data for our three operating segments are as follows (in thousands): Three Months Ended Nine Months Ended 2016 2015 2016 2015 (unaudited) (unaudited) (unaudited) (unaudited) Revenues: TeamQualspec $ 142,529 $ 157,308 $ 436,029 $ 394,720 TeamFurmanite 131,787 69,596 392,062 220,051 Quest Integrity 15,261 16,648 48,780 56,587 Total $ 289,577 $ 243,552 $ 876,871 $ 671,358 Three Months Ended Nine Months Ended 2016 2015 2016 2015 (unaudited) (unaudited) (unaudited) (unaudited) Operating income (loss): TeamQualspec $ 8,423 $ 14,386 $ 33,044 $ 43,092 TeamFurmanite 5,983 3,249 25,004 17,141 Quest Integrity 399 724 2,863 8,729 Corporate and shared support services (18,848 ) (11,502 ) (58,326 ) (32,372 ) Total $ (4,043 ) $ 6,857 $ 2,585 $ 36,590 Three Months Ended Nine Months Ended 2016 2015 2016 2015 (unaudited) (unaudited) (unaudited) (unaudited) Capital expenditures: TeamQualspec $ 1,932 $ 3,564 $ 7,143 $ 10,250 TeamFurmanite 6,308 2,760 12,439 5,952 Quest Integrity 211 1,101 1,105 2,392 Corporate and shared support services 5,475 4,708 15,207 11,955 Total $ 13,926 $ 12,133 $ 35,894 $ 30,549 Three Months Ended Nine Months Ended 2016 2015 2016 2015 (unaudited) (unaudited) (unaudited) (unaudited) Depreciation and amortization: TeamQualspec $ 4,930 $ 4,887 $ 15,035 $ 9,284 TeamFurmanite 5,705 2,137 15,049 6,049 Quest Integrity 1,374 1,462 3,940 4,343 Corporate and shared support services 530 288 1,408 858 Total $ 12,539 $ 8,774 $ 35,432 $ 20,534 |
Geographic Breakdown of Revenues and Total Assets | A geographic breakdown of our revenues for the three and nine months ended September 30, 2016 and 2015 and total assets as of September 30, 2016 and December 31, 2015 are as follows (in thousands): Three Months Ended Nine Months Ended 2016 2015 2016 2015 (unaudited) (unaudited) (unaudited) (unaudited) Revenues: United States $ 208,009 $ 192,109 $ 651,126 $ 509,592 Canada 33,747 30,194 97,568 93,137 Europe 27,930 10,935 77,971 36,293 Other foreign countries 19,891 10,314 50,206 32,336 Total $ 289,577 $ 243,552 $ 876,871 $ 671,358 September 30, 2016 December 31, 2015 (unaudited) Total assets: United States $ 958,541 $ 682,124 Canada 65,710 59,626 Europe 108,531 33,271 Other foreign countries 49,640 23,970 Total $ 1,182,422 $ 798,991 |
DISCONTINUED OPERATIONS (Tables
DISCONTINUED OPERATIONS (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Components of Income from Discontinued Operations, Net of Tax and Assets and Liabilities of Discontinued Operations | Income from discontinued operations, net of income tax, from the date of the Furmanite acquisition, consists of the following (in thousands): Three Months Ended Nine Months Ended (unaudited) (unaudited) Revenues $ 14,868 $ 36,542 Operating expenses 13,777 33,738 Gross margin 1,091 2,804 Selling, general and administrative expenses 554 1,412 Income from discontinued operations, before income tax 537 1,392 Less: Provision for income taxes 221 564 Income from discontinued operations, net of income tax $ 316 $ 828 Assets and liabilities of discontinued operations classified as held for sale in the condensed consolidated balance sheet as of September 30, 2016 consist of the following (in thousands): September 30, 2016 (unaudited) Current assets of discontinued operations: Receivables $ 12,110 Prepayments and other assets 215 Total assets of discontinued operations 12,325 Current liabilities of discontinued operations: Other accrued liabilities $ 1,065 As discussed in Note 2, the Furmanite purchase price allocation is based on provisional measurements and is subject to change. Accordingly, the amounts of assets and liabilities attributable to discontinued operations may be adjusted upon completion of the final valuation of the acquisition. |
SUMMARY OF SIGNIFICANT ACCOUN39
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES - Additional Information (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Jun. 30, 2016USD ($) | Sep. 30, 2015USD ($)shares | Sep. 30, 2016USD ($)employeecountrysegmentlocationcustomer | Sep. 30, 2015USD ($)shares | Dec. 31, 2015USD ($) | Dec. 01, 2015USD ($) | Jul. 07, 2015USD ($) | Dec. 31, 2014USD ($) | |
Accounting Policies [Abstract] | ||||||||
Number of operating segments | segment | 3 | |||||||
Number of locations in which company operates (more than) | location | 220 | |||||||
Number of countries in which the company operates | country | 22 | |||||||
Number of employees (more than) | employee | 8,300 | |||||||
Significant Accounting Policies [Line Items] | ||||||||
Cash and cash equivalents | $ 38,546,000 | $ 38,201,000 | $ 38,546,000 | $ 44,825,000 | $ 44,426,000 | |||
Restricted cash | $ 0 | 5,000,000 | ||||||
Goodwill impairment | 0 | |||||||
Discounted cash flow, forecast period | 4 years | |||||||
Market capitalization in excess of consolidated net assets | $ 482,000,000 | |||||||
Market capitalization in excess of consolidated net assets, percentage | 141.00% | |||||||
Goodwill | $ 370,726,000 | 256,654,000 | ||||||
Measurement-period adjustment, deferred tax liabilities, increase (decrease) | $ 47,900,000 | |||||||
Workers compensation our self-insured retention | 1,000,000 | |||||||
Automobile liability self-insured retention | 500,000 | |||||||
General liability claims we have an effective self-insured retention | 3,000,000 | |||||||
Medical claims, our self-insured retention | 175,000 | |||||||
Environmental liability claims, our self-insured retention | 1,000,000 | |||||||
Amount of earned but unbilled revenue included in accounts receivable | $ 80,800,000 | 47,100,000 | ||||||
Options to purchase shares of common stock excluded from the computation of diluted earnings per share | shares | 0 | 0 | ||||||
Sales Revenue, Net | Customer Concentration Risk | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Number of customers accounted for more than specified percentage of consolidated revenues | customer | 0 | |||||||
Qualspec Group | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Restricted cash | 5,000,000 | |||||||
Goodwill | $ 148,482,000 | |||||||
Europe and Canada | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Cash and cash equivalents | $ 10,900,000 | $ 17,500,000 |
SUMMARY OF SIGNIFICANT ACCOUN40
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES - Estimated Useful Lives of Assets (Details) | 9 Months Ended |
Sep. 30, 2016 | |
Buildings | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of the assets | 20 years |
Buildings | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of the assets | 40 years |
Leasehold improvements | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of the assets | 2 years |
Leasehold improvements | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of the assets | 15 years |
Machinery and equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of the assets | 2 years |
Machinery and equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of the assets | 12 years |
Furniture and fixtures | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of the assets | 2 years |
Furniture and fixtures | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of the assets | 10 years |
Computers and computer software | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of the assets | 2 years |
Computers and computer software | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of the assets | 5 years |
Automobiles | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of the assets | 2 years |
Automobiles | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of the assets | 5 years |
SUMMARY OF SIGNIFICANT ACCOUN41
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES - Schedule of Rollforward Goodwill (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2016USD ($) | |
Goodwill [Roll Forward] | |
Balance at beginning of period | $ 256,654 |
Acquisitions | 112,679 |
Foreign currency adjustments | 1,393 |
Balance at end of period | 370,726 |
Team Qualspec | |
Goodwill [Roll Forward] | |
Balance at beginning of period | 207,497 |
Acquisitions | 5,955 |
Foreign currency adjustments | 746 |
Balance at end of period | 214,198 |
Team Furmanite | |
Goodwill [Roll Forward] | |
Balance at beginning of period | 19,874 |
Acquisitions | 102,587 |
Foreign currency adjustments | 255 |
Balance at end of period | 122,716 |
Quest Integrity | |
Goodwill [Roll Forward] | |
Balance at beginning of period | 29,283 |
Acquisitions | 4,137 |
Foreign currency adjustments | 392 |
Balance at end of period | $ 33,812 |
SUMMARY OF SIGNIFICANT ACCOUN42
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES - Amounts Used In Basic and Diluted Earnings Per Share (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Accounting Policies [Abstract] | ||||
Weighted-average number of basic shares outstanding (in shares) | 29,361 | 20,375 | 27,609 | 20,371 |
Stock options, stock units and performance awards (in shares) | 0 | 342 | 0 | 331 |
Conversion of noncontrolling interest (in shares) | 0 | 728 | 0 | 728 |
Total shares and dilutive securities (in shares) | 29,361 | 21,445 | 27,609 | 21,430 |
ACQUISITIONS - Furmanite (Addit
ACQUISITIONS - Furmanite (Additional Information) (Details) $ in Thousands | Feb. 29, 2016USD ($)shares | Sep. 30, 2016USD ($) | Sep. 30, 2016USD ($) | Dec. 31, 2015USD ($) |
Business Acquisition [Line Items] | ||||
Goodwill | $ 370,726 | $ 370,726 | $ 256,654 | |
Furmanite Corporation | ||||
Business Acquisition [Line Items] | ||||
Number of shares received for each share of common stock owned | 0.215 | |||
Business acquisition, purchase price | $ 282,341 | |||
Number of common shares issued | shares | 8,208,006 | |||
Acquired intangible assets | $ 70,800 | |||
Goodwill | 102,587 | |||
Fair value of accounts receivable acquired | 64,502 | |||
Furmanite Corporation | Selling, General and Administrative Expenses | ||||
Business Acquisition [Line Items] | ||||
Total acquisition costs | 200 | 6,800 | ||
Separately recognized transaction, acquisition-related compensation costs | $ 0 | $ 4,700 | ||
Furmanite Corporation | Customer Relationships | ||||
Business Acquisition [Line Items] | ||||
Acquired intangible assets | $ 51,600 | |||
Acquired intangible asset useful life | 12 years | |||
Furmanite Corporation | Trade Names | ||||
Business Acquisition [Line Items] | ||||
Acquired intangible assets | $ 16,900 | |||
Acquired intangible asset useful life | 12 years | |||
Furmanite Corporation | Developed Technology | ||||
Business Acquisition [Line Items] | ||||
Acquired intangible assets | $ 2,300 | |||
Acquired intangible asset useful life | 10 years | |||
Continuing Operations | Furmanite Corporation | ||||
Business Acquisition [Line Items] | ||||
Fair value of accounts receivable acquired | $ 64,500 | |||
Acquired receivables, gross contractual amount | 73,800 | |||
Acquired receivables, estimated uncollectible | 9,300 | |||
Discontinued Operations | Furmanite Corporation | ||||
Business Acquisition [Line Items] | ||||
Fair value of accounts receivable acquired | 14,000 | |||
Acquired receivables, gross contractual amount | 14,100 | |||
Acquired receivables, estimated uncollectible | $ 100 |
ACQUISITIONS - Consideration Tr
ACQUISITIONS - Consideration Transferred (Details) - Furmanite Corporation $ in Thousands | Feb. 29, 2016USD ($)shares |
Business Acquisition [Line Items] | |
Common stock (8,208,006 shares) | $ 209,529 |
Converted share-based payment awards | 2,001 |
Cash | 70,811 |
Total consideration | $ 282,341 |
Number of common shares issued | shares | 8,208,006 |
ACQUISITIONS - Summary of Purch
ACQUISITIONS - Summary of Purchase Price Allocation (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Feb. 29, 2016 | Dec. 31, 2015 | Jul. 07, 2015 |
Business Acquisition [Line Items] | ||||
Current assets of discontinued operations | $ 12,325 | $ 0 | ||
Goodwill | 370,726 | 256,654 | ||
Current liabilities of discontinued operations | $ 1,065 | $ 0 | ||
Furmanite Corporation | ||||
Business Acquisition [Line Items] | ||||
Cash and cash equivalents | $ 37,734 | |||
Accounts receivable | 64,502 | |||
Inventory | 25,709 | |||
Current deferred tax assets | 11,563 | |||
Prepaid expenses and other current assets | 23,207 | |||
Current assets of discontinued operations | 14,760 | |||
Property, plant and equipment | 71,241 | |||
Intangible assets | 70,800 | |||
Goodwill | 102,587 | |||
Other non-current assets | 3,709 | |||
Total assets acquired | 425,812 | |||
Accounts payable | 12,359 | |||
Other accrued liabilities | 28,918 | |||
Income taxes payable | 229 | |||
Current liabilities of discontinued operations | 1,434 | |||
Non-current deferred tax liabilities | 84,328 | |||
Defined benefit pension liability | 13,509 | |||
Other long-term liabilities | 2,694 | |||
Total liabilities assumed | 143,471 | |||
Net assets acquired | $ 282,341 | |||
Qualspec Group | ||||
Business Acquisition [Line Items] | ||||
Cash and cash equivalents | $ 3,981 | |||
Accounts receivable | 21,495 | |||
Current deferred tax assets | 279 | |||
Prepaid expenses and other current assets | 1,049 | |||
Property, plant and equipment | 15,472 | |||
Intangible assets | 78,100 | |||
Goodwill | 148,482 | |||
Other non-current assets | 138 | |||
Total assets acquired | 268,996 | |||
Accounts payable | 2,892 | |||
Other accrued liabilities | 7,581 | |||
Non-current deferred tax liabilities | 2,982 | |||
Total liabilities assumed | 13,455 | |||
Net assets acquired | $ 255,541 |
ACQUISITIONS - Activity in Acqu
ACQUISITIONS - Activity in Acquiree (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Furmanite Corporation | ||
Business Acquisition [Line Items] | ||
Revenue | $ 152.3 | |
Net income (loss) | $ (1.7) | |
Qualspec Group | ||
Business Acquisition [Line Items] | ||
Revenue | $ 40.3 | |
Net income (loss) | $ 1.6 |
ACQUISITIONS - Summary of Pro F
ACQUISITIONS - Summary of Pro Forma Consolidated Results of Operations (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Business Acquisition [Line Items] | |||
Revenues | $ 327,612 | $ 920,641 | $ 1,020,779 |
Income (loss) from continuing operations attributable to Team shareholders | $ 3,545 | $ (809) | $ 22,294 |
Earnings (loss) per share from continuing operations: | |||
Basic (in usd per share) | $ 0.12 | $ (0.03) | $ 0.78 |
Diluted (in usd per share) | $ 0.12 | $ (0.03) | $ 0.75 |
ACQUISITIONS - Furmanite measur
ACQUISITIONS - Furmanite measurement-period adjustments (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2016 | Jun. 30, 2016 | |
Business Acquisition [Line Items] | ||
Measurement-period adjustment, deferred tax liabilities, increase (decrease) | $ 47.9 | |
Furmanite Corporation | ||
Business Acquisition [Line Items] | ||
Measurement-period adjustment, deferred tax liabilities, increase (decrease) | $ (0.6) | 47.9 |
Measurement-period adjustment, inventory, increase (decrease) | (5.4) | |
Measurement-period adjustment, accounts receivable, decrease | 5.1 | 2.1 |
Measurement-period adjustment, other accrued liabilities, increase | 2 | 1.4 |
Measurement-period adjustment, prepaid expenses and other current assets, increase (decrease) | (0.5) | (0.5) |
Measurement-period adjustment, goodwill, increase | 8.7 | 57.3 |
Measurement period adjustment, property, plant and equipment, increase (decrease) | (1.6) | |
Reclassification | ||
Business Acquisition [Line Items] | ||
Measurement-period adjustment, inventory, increase (decrease) | (5.7) | |
Reclassification | Furmanite Corporation | ||
Business Acquisition [Line Items] | ||
Measurement-period adjustment, inventory, increase (decrease) | (2) | |
Measurement-period adjustment, prepaid expenses and other current assets, increase (decrease) | (0.4) | $ 5.7 |
Measurement period adjustment, property, plant and equipment, increase (decrease) | $ 2.4 |
ACQUISITIONS - Qualspec (Additi
ACQUISITIONS - Qualspec (Additional Information) (Details) - USD ($) | Jul. 07, 2015 | Sep. 30, 2016 | Dec. 31, 2015 |
Business Acquisition [Line Items] | |||
Goodwill | $ 370,726,000 | $ 256,654,000 | |
Qualspec Group | |||
Business Acquisition [Line Items] | |||
Business acquisition, percentage acquired | 100.00% | ||
Business acquisition, purchase price | $ 255,500,000 | ||
Business acquisition, contingent consideration | 10,000,000 | ||
Contingent consideration | 5,800,000 | $ 0 | |
Acquired intangible assets | 78,100,000 | ||
Goodwill | 148,482,000 | ||
Goodwill expected to be deductible for tax purposes | 109,600,000 | ||
Fair value of accounts receivable acquired | 21,495,000 | ||
Acquired receivables, gross contractual amount | 22,500,000 | ||
Acquired receivables, estimated uncollectible | 1,000,000 | ||
Qualspec Group | Customer Relationships | |||
Business Acquisition [Line Items] | |||
Acquired intangible assets | $ 75,200,000 | ||
Acquired intangible asset useful life | 15 years | ||
Qualspec Group | Noncompete Agreements | |||
Business Acquisition [Line Items] | |||
Acquired intangible assets | $ 1,600,000 | ||
Acquired intangible asset useful life | 5 years | ||
Qualspec Group | Trade Names | |||
Business Acquisition [Line Items] | |||
Acquired intangible assets | $ 1,300,000 | ||
Acquired intangible asset useful life | 1 year |
ACQUISITIONS - Quest Integrity
ACQUISITIONS - Quest Integrity (Additional Information) (Details) - Quest Integrity - USD ($) $ in Millions | Aug. 31, 2015 | Nov. 30, 2010 |
Business Acquisition [Line Items] | ||
Business acquisition, percentage acquired | 95.00% | |
Number of restricted common shares issued | 728,266 | |
Business acquisition, cash payment | $ 5.9 |
ACQUISITIONS - Other acquisitio
ACQUISITIONS - Other acquisitions (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||
Jun. 30, 2016USD ($) | Apr. 30, 2016USD ($)Employee | Jun. 30, 2015USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Dec. 31, 2015USD ($) | |
Business Acquisition [Line Items] | ||||||||
Goodwill | $ 370,726 | $ 370,726 | $ 256,654 | |||||
Loss on revaluation of contingent consideration | $ 0 | $ 522 | 2,184 | $ 522 | ||||
Turbinate | ||||||||
Business Acquisition [Line Items] | ||||||||
Business acquisition, purchase price | $ 8,000 | |||||||
QIS and TiaT | ||||||||
Business Acquisition [Line Items] | ||||||||
Business acquisition, purchase price | $ 9,000 | |||||||
Number of employees added | Employee | 65 | |||||||
DK Amans Valve | ||||||||
Business Acquisition [Line Items] | ||||||||
Business acquisition, purchase price | $ 12,300 | |||||||
Cash and cash equivalents acquired | 100 | |||||||
Business acquisition, contingent consideration | $ 1,800 | |||||||
Achievement of certain performance milestones period | 3 years | |||||||
Additional amount of contingent consideration payable based on achievement of milestones | $ 4,000 | |||||||
Loss on revaluation of contingent consideration | $ 2,184 |
RECEIVABLES (Details)
RECEIVABLES (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Receivables [Abstract] | ||
Trade accounts receivable | $ 190,185 | $ 170,774 |
Unbilled revenues | 80,750 | 47,098 |
Allowance for doubtful accounts | (6,432) | (3,548) |
Total | $ 264,503 | $ 214,324 |
INVENTORY (Details)
INVENTORY (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 7,840 | $ 3,167 |
Work in progress | 3,655 | 1,018 |
Finished goods | 40,943 | 23,751 |
Total | $ 52,438 | $ 27,936 |
PROPERTY, PLANT AND EQUIPMENT -
PROPERTY, PLANT AND EQUIPMENT - Summary of Property, Plant and Equipment (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Property, Plant and Equipment [Line Items] | ||
Total | $ 369,961 | $ 257,722 |
Accumulated depreciation and amortization | (157,925) | (132,739) |
Property, plant and equipment, net | 212,036 | 124,983 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Total | 7,465 | 3,124 |
Buildings and leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total | 42,868 | 29,690 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total | 239,313 | 174,222 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Total | 8,557 | 6,561 |
Capitalized ERP system development costs | ||
Property, Plant and Equipment [Line Items] | ||
Total | 40,324 | 25,606 |
Computers and computer software | ||
Property, Plant and Equipment [Line Items] | ||
Total | 11,880 | 8,062 |
Automobiles | ||
Property, Plant and Equipment [Line Items] | ||
Total | 5,728 | 5,280 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Total | $ 13,826 | $ 5,177 |
PROPERTY, PLANT AND EQUIPMENT55
PROPERTY, PLANT AND EQUIPMENT - Additional Information (Details) - Capitalized ERP system development costs $ in Millions | Sep. 30, 2016USD ($) |
Property, Plant and Equipment [Line Items] | |
Capitalized project amount | $ 40.5 |
Capitalized interest | $ 1.1 |
INTANGIBLE ASSETS - Summary of
INTANGIBLE ASSETS - Summary of Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 195,731 | $ 120,280 |
Accumulated Amortization | (32,360) | (21,161) |
Net Carrying Amount | 163,371 | 99,119 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 156,848 | 103,288 |
Accumulated Amortization | (21,357) | (12,995) |
Net Carrying Amount | 135,491 | 90,293 |
Non-compete agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 5,475 | 4,898 |
Accumulated Amortization | (3,826) | (3,468) |
Net Carrying Amount | 1,649 | 1,430 |
Trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 24,722 | 6,299 |
Accumulated Amortization | (3,736) | (1,940) |
Net Carrying Amount | 20,986 | 4,359 |
Technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 7,838 | 5,112 |
Accumulated Amortization | (3,145) | (2,541) |
Net Carrying Amount | 4,693 | 2,571 |
Licenses | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 848 | 683 |
Accumulated Amortization | (296) | (217) |
Net Carrying Amount | $ 552 | $ 466 |
INTANGIBLE ASSETS - Additional
INTANGIBLE ASSETS - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization expense | $ 3.8 | $ 2.8 | $ 11 | $ 4.7 |
OTHER ACCRUED LIABILITIES (Deta
OTHER ACCRUED LIABILITIES (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Payables and Accruals [Abstract] | ||
Payroll and other compensation expenses | $ 43,874 | $ 21,878 |
Insurance accruals | 10,213 | 7,008 |
Property, sales and other non-income related taxes | 5,379 | 3,058 |
Deferred revenue | 3,705 | 1,355 |
Lease commitments | 2,631 | 1,721 |
Contingent consideration | 2,033 | 3,638 |
Accrued commission | 2,000 | 1,159 |
Volume discount | 896 | 1,280 |
Accrued interest | 686 | 984 |
Other | 10,680 | 7,715 |
Total | $ 82,097 | $ 49,796 |
LONG-TERM DEBT, DERIVATIVES A59
LONG-TERM DEBT, DERIVATIVES AND LETTERS OF CREDIT - Additional Information (Details) € in Millions | 9 Months Ended | ||||
Sep. 30, 2016USD ($) | Sep. 30, 2016EUR (€) | Dec. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Dec. 31, 2014USD ($) | |
Line of Credit Facility [Line Items] | |||||
Borrowing capacity | $ 600,000,000 | ||||
Commitment fee percentage | 0.40% | ||||
Maximum ratio of consolidated funded debt to consolidated EBITDA | 3 | 3 | |||
Decrease in ratio of consolidated funded debt to consolidated EBITDA | 0.25 | ||||
Maximum ratio of senior secured debt to consolidated EBITDA | 3 | 3 | |||
Minimum interest coverage ratio | 3 | 3 | |||
Cash on hand | $ 38,201,000 | $ 44,825,000 | $ 38,546,000 | $ 44,426,000 | |
Available borrowing capacity | 35,000,000 | ||||
Unamortized debt issuance costs | 3,000,000 | ||||
Net Investment Hedge | |||||
Line of Credit Facility [Line Items] | |||||
Borrowing under credit facility | $ 13,800,000 | € 12.3 | |||
LIBOR | |||||
Line of Credit Facility [Line Items] | |||||
Basis spread on variable rate | 2.25% | ||||
Revolving Credit Facility | |||||
Line of Credit Facility [Line Items] | |||||
Borrowing capacity | $ 400,000,000 | ||||
Debt term | 5 years | ||||
Term Loan Facility | |||||
Line of Credit Facility [Line Items] | |||||
Borrowing capacity | $ 200,000,000 | ||||
Debt term | 5 years | ||||
Swing Line Facility | |||||
Line of Credit Facility [Line Items] | |||||
Borrowing capacity | $ 35,000,000 | ||||
Standby Letters of Credit | |||||
Line of Credit Facility [Line Items] | |||||
Outstanding letter of credit | $ 22,200,000 | $ 13,200,000 | |||
September 30, 2016 | |||||
Line of Credit Facility [Line Items] | |||||
Maximum ratio of consolidated funded debt to consolidated EBITDA | 4.25 | 4.25 | |||
December 31, 2016 | |||||
Line of Credit Facility [Line Items] | |||||
Maximum ratio of consolidated funded debt to consolidated EBITDA | 4.50 | 4.50 | |||
March 31, 2017 | |||||
Line of Credit Facility [Line Items] | |||||
Maximum ratio of consolidated funded debt to consolidated EBITDA | 4.25 | 4.25 | |||
June 30, 2016 | |||||
Line of Credit Facility [Line Items] | |||||
Maximum ratio of consolidated funded debt to consolidated EBITDA | 4.25 | 4.25 | |||
September 30, 2017 | |||||
Line of Credit Facility [Line Items] | |||||
Maximum ratio of consolidated funded debt to consolidated EBITDA | 3.75 | 3.75 |
LONG-TERM DEBT, DERIVATIVES A60
LONG-TERM DEBT, DERIVATIVES AND LETTERS OF CREDIT - Amounts Recognized in Other Comprehensive Income, and Reclassified Into Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (Loss) Recognized in Other Comprehensive Income (Loss) | $ (104) | $ (183) | $ (347) | $ 1,122 |
Net Investment Hedge | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (Loss) Recognized in Other Comprehensive Income (Loss) | (104) | (183) | (347) | 1,122 |
Gain (Loss) Reclassified from Other Comprehensive Income (Loss) to Earnings | $ 0 | $ 0 | $ 0 | $ 0 |
LONG-TERM DEBT, DERIVATIVES A61
LONG-TERM DEBT, DERIVATIVES AND LETTERS OF CREDIT - Fair Value Totals and Balance Sheet Classification for Derivatives Designated as Hedges (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Long-term Debt | Designated as Hedging Instrument | Net Investment Hedge | ||
Derivatives, Fair Value [Line Items] | ||
Fair value liability | $ (4,220) | $ (4,567) |
LONG-TERM DEBT, DERIVATIVES A62
LONG-TERM DEBT, DERIVATIVES AND LETTERS OF CREDIT - Operating leases (Details) $ in Millions | Feb. 29, 2016USD ($) |
Furmanite Corporation | |
Other Commitments [Line Items] | |
Operating lease payment obligations assumed in acquisition | $ 33 |
RETIREMENT PLANS - Additional I
RETIREMENT PLANS - Additional Information (Details) - Foreign Pension Plan $ in Millions | 9 Months Ended |
Sep. 30, 2016USD ($)plan | |
Defined Benefit Plan Disclosure [Line Items] | |
Number of pension plans | plan | 2 |
Weighted average of expected returns on asset investment, percentage | 4.90% |
Expected contributions for 2016 | $ | $ 1.3 |
Total contributions to date | $ | $ 0.9 |
Equities | |
Defined Benefit Plan Disclosure [Line Items] | |
Weighted average of expected returns on asset investment, percentage | 6.20% |
Bonds | |
Defined Benefit Plan Disclosure [Line Items] | |
Weighted average of expected returns on asset investment, percentage | 2.20% |
United Kingdom | |
Defined Benefit Plan Disclosure [Line Items] | |
Number of pension plans | plan | 1 |
Norway | |
Defined Benefit Plan Disclosure [Line Items] | |
Subsidiary's percentage of total defined benefit plans | 3.00% |
RETIREMENT PLANS - Net Periodic
RETIREMENT PLANS - Net Periodic Pension Cost (Details) - Foreign Pension Plan - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | $ 21 | $ 0 | $ 50 | $ 0 |
Interest cost | 742 | 0 | 1,810 | 0 |
Expected return on plan assets | (759) | 0 | (1,852) | 0 |
Net periodic pension cost | $ 4 | $ 0 | $ 8 | $ 0 |
FAIR VALUE MEASUREMENTS - Fair
FAIR VALUE MEASUREMENTS - Fair Value of Assets and Liabilities Measured on Recurring Basis (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Net Investment Hedge | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Net liabilities | $ (4,220) | $ (4,567) |
Contingent Consideration | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Net liabilities | 3,743 | 3,638 |
Quoted Prices in Active Markets for Identical Items (Level 1) | Net Investment Hedge | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Net liabilities | 0 | 0 |
Quoted Prices in Active Markets for Identical Items (Level 1) | Contingent Consideration | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Net liabilities | 0 | 0 |
Significant Other Observable Inputs (Level 2) | Net Investment Hedge | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Net liabilities | (4,220) | (4,567) |
Significant Other Observable Inputs (Level 2) | Contingent Consideration | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Net liabilities | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Net Investment Hedge | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Net liabilities | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Contingent Consideration | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Net liabilities | $ 3,743 | $ 3,638 |
FAIR VALUE MEASUREMENTS - Addit
FAIR VALUE MEASUREMENTS - Additional Information (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | |
Fair Value Disclosures [Abstract] | |||
Transfer from Level 1 to Level 2 | $ 0 | $ 0 | |
Transfer from Level 2 to Level 1 | 0 | $ 0 | |
Transfer out of Level 3 measurement | 0 | $ 5,800,000 | |
Transfer in to Level 3 measurement | $ 0 |
FAIR VALUE MEASUREMENTS - Summa
FAIR VALUE MEASUREMENTS - Summary of Changes in Fair Value of Level 3 Contingent Consideration (Details) - Contingent Consideration $ in Thousands | 9 Months Ended |
Sep. 30, 2016USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Balance, beginning of period | $ 3,638 |
Accretion of liability | 261 |
Payment | (4,000) |
Revaluation | 2,184 |
Acquisitions | 1,660 |
Balance, end of period | $ 3,743 |
SHARE-BASED COMPENSATION - Addi
SHARE-BASED COMPENSATION - Additional Information (Details) | Nov. 04, 2014 | Sep. 30, 2016USD ($)shares | Sep. 30, 2015USD ($) | Feb. 29, 2016 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Awards outstanding to officers, directors and key employees (n shares) | shares | 800,000 | |||
Total number of shares cumulatively authorized to be issued under our stock incentive plans | shares | 2,000,000 | |||
Share-based compensation | $ 6,700,000 | $ 4,000,000 | ||
Employee service share-based compensation, nonvested awards, compensation not yet recognized, share-based awards other than options | $ 10,800,000 | |||
Remaining weighted-average period | 2 years 3 months 18 days | |||
Tax benefit related to share-based compensation | $ 100,000 | 1,500,000 | ||
Weighted-average remaining contractual life of options exercisable | 2 years 3 months 18 days | |||
Stock and Stock Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation | $ 5,600,000 | 3,400,000 | ||
Stock and Stock Units | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting period | 4 years | |||
Long Term Performance Stock Unit Awards | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation | $ 600,000 | 200,000 | ||
Award vesting period | 3 years | |||
Performance period | 3 years | |||
Settlement period | 20 days | |||
Long Term Performance Stock Unit Awards | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Possible payouts | 0.00% | |||
Long Term Performance Stock Unit Awards | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Possible payouts | 300.00% | |||
Performance Shares | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation | $ 300,000 | 300,000 | ||
Award vesting period | 4 years | |||
Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation | $ 200,000 | $ 0 | ||
Award vesting period | 4 years | |||
Stock option year term | 10 years | |||
Furmanite Corporation | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Conversion ratio business combination | 0.215 |
SHARE-BASED COMPENSATION - Summ
SHARE-BASED COMPENSATION - Summary of Transactions Involving Stock Units and Director Stock Grants (Details) - Stock and Stock Units - $ / shares shares in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
No. of Stock Units | ||
Balance at beginning of period (in shares) | 371 | 328 |
Changes during the period: | ||
Granted (in shares) | 86 | 25 |
Assumed - Furmanite acquisition (in shares) | 40 | 0 |
Vested and settled (in shares) | (38) | (13) |
Cancelled (in shares) | (13) | (22) |
Balance at end of period (in shares) | 446 | 318 |
Weighted Average Fair Value | ||
Balance at beginning of period (in usd per share) | $ 36.26 | $ 36.14 |
Changes during the period: | ||
Granted (in usd per share) | 26.19 | 43.29 |
Assumed - Furmanite acquisition (in usd per share) | 25.63 | 0 |
Vested and settled (in usd per share) | 27.61 | 37.69 |
Cancelled (in usd per share) | 30.92 | 35.58 |
Balance at end of period (in usd per share) | $ 34.27 | $ 36.69 |
SHARE-BASED COMPENSATION - Su70
SHARE-BASED COMPENSATION - Summary of Transactions Involving Performance Awards (Details) - $ / shares shares in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Long Term Performance Stock Unit Awards | ||
No. of Units/Awards | ||
Balance at beginning of period (in shares) | 59 | 23 |
Changes during the period: | ||
Granted (in shares) | 0 | 0 |
Vested and settled (in shares) | 0 | 0 |
Cancelled (in shares) | 0 | 0 |
Balance at end of period (in shares) | 59 | 23 |
Weighted Average Fair Value | ||
Balance at beginning of period (in usd per share) | $ 37.16 | $ 42.25 |
Changes during the period: | ||
Granted (in usd per share) | 0 | 0 |
Cancelled (in usd per share) | 0 | 0 |
Balance at end of period (in usd per share) | $ 37.16 | $ 42.25 |
Performance Shares | ||
No. of Units/Awards | ||
Balance at beginning of period (in shares) | 13 | 28 |
Changes during the period: | ||
Vested and settled (in shares) | (13) | 0 |
Cancelled (in shares) | 0 | 0 |
Balance at end of period (in shares) | 0 | 28 |
Weighted Average Fair Value | ||
Balance at beginning of period (in usd per share) | $ 35.15 | $ 32.86 |
Changes during the period: | ||
Vested and settled (in usd per share) | 35.15 | 0 |
Cancelled (in usd per share) | 0 | 0 |
Balance at end of period (in usd per share) | $ 0 | $ 32.86 |
SHARE-BASED COMPENSATION - Su71
SHARE-BASED COMPENSATION - Summary of Transactions Involving Stock Options (Details) - $ / shares shares in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
No. of Options | ||
Shares under option, beginning of period | 376 | 691 |
Changes during the period: | ||
Granted (in shares) | 0 | 0 |
Assumed - Furmanite acquisition (in shares) | 132 | 0 |
Exercised (in shares) | (136) | (241) |
Cancelled (in shares) | (4) | 0 |
Expired (in shares) | (45) | 0 |
Shares under option, end of period | 323 | 450 |
Exercisable at end of period (in shares) | 319 | 450 |
Weighted Average Exercise Price | ||
Shares under option, beginning of period (in usd per share) | $ 25.71 | $ 21.26 |
Changes during the period: | ||
Granted (in usd per share) | 0 | 0 |
Assumed - Furmanite acquisition (in usd per share) | 33.20 | 0 |
Exercised (in usd per share) | 17.71 | 15.64 |
Cancelled (in usd per share) | 44.62 | 0 |
Expired (in usd per share) | 35.51 | 0 |
Shares under option, end of period (in usd per share) | 30.52 | 24.27 |
Exercisable at end of period (in usd per share) | $ 30.40 | $ 24.27 |
SHARE-BASED COMPENSATION - Tota
SHARE-BASED COMPENSATION - Total Options Outstanding, Range of Exercise Prices and Remaining Contractual Lives (Details) shares in Thousands | 9 Months Ended |
Sep. 30, 2016$ / sharesshares | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
No. of Options (in shares) | shares | 323 |
Weighted Average Exercise Price (in usd per share) | $ 30.52 |
Weighted Average Remaining Life | 2 years 3 months 18 days |
$20.18 to $30.28 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Range of Prices, Lower limit (in usd per share) | $ 20.18 |
Range of Prices, Upper limit (in usd per share) | $ 30.28 |
No. of Options (in shares) | shares | 44 |
Weighted Average Exercise Price (in usd per share) | $ 25.80 |
Weighted Average Remaining Life | 2 years 1 month 6 days |
$30.29 to $40.38 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Range of Prices, Lower limit (in usd per share) | $ 30.29 |
Range of Prices, Upper limit (in usd per share) | $ 40.38 |
No. of Options (in shares) | shares | 272 |
Weighted Average Exercise Price (in usd per share) | $ 30.75 |
Weighted Average Remaining Life | 2 years 1 month 6 days |
$40.39 to $50.47 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Range of Prices, Lower limit (in usd per share) | $ 40.39 |
Range of Prices, Upper limit (in usd per share) | $ 50.47 |
No. of Options (in shares) | shares | 7 |
Weighted Average Exercise Price (in usd per share) | $ 50.47 |
Weighted Average Remaining Life | 7 years 7 months 6 days |
ACCUMULATED OTHER COMPREHENSI73
ACCUMULATED OTHER COMPREHENSIVE LOSS - Summary of Changes in Accumulated Other Comprehensive Income (Loss) Included Within Shareholders' Equity (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Tax Provision | ||
Balance, beginning of period | $ 5,183 | $ 2,284 |
Other comprehensive income (loss) before tax | (1,031) | 2,365 |
Noncontrolling interest | 0 | 0 |
Balance, end of period | 4,152 | 4,649 |
Total | ||
Balance, beginning of period | 338,146 | 339,107 |
Balance, end of period | 548,051 | 332,658 |
Foreign Currency Translation Adjustments | ||
Before Tax | ||
Balance, beginning of period | (28,124) | (13,718) |
Other comprehensive income (loss) before tax | 1,872 | (12,155) |
Noncontrolling interest | 0 | 34 |
Balance, end of period | (26,252) | (25,839) |
Foreign Currency Hedge | ||
Before Tax | ||
Balance, beginning of period | 4,567 | 3,028 |
Other comprehensive income (loss) before tax | (347) | 1,122 |
Noncontrolling interest | 0 | 0 |
Balance, end of period | 4,220 | 4,150 |
Total | ||
Total | ||
Balance, beginning of period | (18,374) | (8,406) |
Other comprehensive income (loss) before tax | 494 | (8,668) |
Noncontrolling interest | 0 | 34 |
Balance, end of period | $ (17,880) | $ (17,040) |
ACCUMULATED OTHER COMPREHENSI74
ACCUMULATED OTHER COMPREHENSIVE LOSS - Related Tax Effects Allocated to Each Component of Other Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Gross Amount | $ 1,525 | $ (11,033) | ||
Tax Effect | $ 287 | $ 1,811 | (1,031) | 2,365 |
Net Amount | 494 | (8,668) | ||
Foreign currency translation adjustments | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Gross Amount | 1,872 | (12,155) | ||
Tax Effect | (1,147) | 2,777 | ||
Net Amount | 725 | (9,378) | ||
Foreign currency hedge | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Gross Amount | (347) | 1,122 | ||
Tax Effect | 116 | (412) | ||
Net Amount | $ (231) | $ 710 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) | 1 Months Ended | ||
Dec. 31, 2014patentdefendant | Sep. 30, 2016USD ($)lawsuit | Jul. 31, 2007death | |
Quest Integrity | |||
Loss Contingencies [Line Items] | |||
Number of patents allegedly infringed upon | patent | 3 | ||
Number of defendants | 3 | ||
Con Ed Matter | |||
Loss Contingencies [Line Items] | |||
Number of deaths | death | 1 | ||
Number of lawsuits | lawsuit | 92 | ||
Insurance coverage subject to deductible limit | $ | $ 250,000 | ||
Delaware Cases | Quest Integrity | |||
Loss Contingencies [Line Items] | |||
Number of defendants | 2 | ||
Washington Case | Quest Integrity | |||
Loss Contingencies [Line Items] | |||
Number of defendants | 1 |
ENTITY WIDE DISCLOSURES - Addit
ENTITY WIDE DISCLOSURES - Additional Information (Details) | 9 Months Ended |
Sep. 30, 2016segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 3 |
ENTITY WIDE DISCLOSURES - Segme
ENTITY WIDE DISCLOSURES - Segment Data for our Three Operating Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Segment Reporting Information [Line Items] | ||||
Revenues | $ 289,577 | $ 243,552 | $ 876,871 | $ 671,358 |
Operating income (loss) | (4,043) | 6,857 | 2,585 | 36,590 |
Capital expenditures | 13,926 | 12,133 | 35,894 | 30,549 |
Depreciation and amortization | 12,539 | 8,774 | 35,432 | 20,534 |
Operating segments | Team Qualspec | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 142,529 | 157,308 | 436,029 | 394,720 |
Operating income (loss) | 8,423 | 14,386 | 33,044 | 43,092 |
Capital expenditures | 1,932 | 3,564 | 7,143 | 10,250 |
Depreciation and amortization | 4,930 | 4,887 | 15,035 | 9,284 |
Operating segments | Team Furmanite | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 131,787 | 69,596 | 392,062 | 220,051 |
Operating income (loss) | 5,983 | 3,249 | 25,004 | 17,141 |
Capital expenditures | 6,308 | 2,760 | 12,439 | 5,952 |
Depreciation and amortization | 5,705 | 2,137 | 15,049 | 6,049 |
Operating segments | Quest Integrity | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 15,261 | 16,648 | 48,780 | 56,587 |
Operating income (loss) | 399 | 724 | 2,863 | 8,729 |
Capital expenditures | 211 | 1,101 | 1,105 | 2,392 |
Depreciation and amortization | 1,374 | 1,462 | 3,940 | 4,343 |
Corporate and shared support services | ||||
Segment Reporting Information [Line Items] | ||||
Operating income (loss) | (18,848) | (11,502) | (58,326) | (32,372) |
Capital expenditures | 5,475 | 4,708 | 15,207 | 11,955 |
Depreciation and amortization | $ 530 | $ 288 | $ 1,408 | $ 858 |
ENTITY WIDE DISCLOSURES - Geogr
ENTITY WIDE DISCLOSURES - Geographic Breakdown of Revenues and Total Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Total revenues | $ 289,577 | $ 243,552 | $ 876,871 | $ 671,358 | |
Total assets | 1,182,422 | 1,182,422 | $ 798,991 | ||
United States | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Total revenues | 208,009 | 192,109 | 651,126 | 509,592 | |
Total assets | 958,541 | 958,541 | 682,124 | ||
Canada | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Total revenues | 33,747 | 30,194 | 97,568 | 93,137 | |
Total assets | 65,710 | 65,710 | 59,626 | ||
Europe | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Total revenues | 27,930 | 10,935 | 77,971 | 36,293 | |
Total assets | 108,531 | 108,531 | 33,271 | ||
Other foreign countries | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Total revenues | 19,891 | $ 10,314 | 50,206 | $ 32,336 | |
Total assets | $ 49,640 | $ 49,640 | $ 23,970 |
DISCONTINUED OPERATIONS (Detail
DISCONTINUED OPERATIONS (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Discontinued Operations and Disposal Groups [Abstract] | |||||
Annual revenues generated by the business | $ 60,000 | ||||
Time until expected disposal of discontinued operations | 1 year | ||||
Revenues | $ 14,868 | $ 36,542 | |||
Operating expenses | 13,777 | 33,738 | |||
Gross margin | 1,091 | 2,804 | |||
Selling, general and administrative expenses | 554 | 1,412 | |||
Income from discontinued operations, before income tax | 537 | 1,392 | |||
Less: Provision for income taxes | 221 | 564 | |||
Income from discontinued operations, net of income tax | 316 | $ 0 | 828 | $ 0 | |
Receivables | 12,110 | 12,110 | |||
Prepayments and other assets | 215 | 215 | |||
Total assets of discontinued operations | 12,325 | 12,325 | $ 0 | ||
Other accrued liabilities | $ 1,065 | $ 1,065 |
REPURCHASE OF COMMON STOCK (Det
REPURCHASE OF COMMON STOCK (Details) | Jun. 23, 2014USD ($) | Sep. 30, 2016USD ($)shares | Sep. 30, 2015USD ($) |
Equity, Class of Treasury Stock [Line Items] | |||
Stock repurchase program, authorized amount | $ 50,000,000 | ||
Number of shares repurchased | shares | 274,110 | ||
Total cost of shares repurchased | $ 7,593,000 | $ 21,138,000 | |
Remaining stock available to repurchase | $ 7,900,000 | ||
Maximum | |||
Equity, Class of Treasury Stock [Line Items] | |||
Stock repurchases leverage ratio | 2.50 | ||
Minimum | |||
Equity, Class of Treasury Stock [Line Items] | |||
Stock repurchases leverage ratio | 0.25 |