Team Inc 8-K, filed Mar 14, 2023
Team Inc (TISI)
About this 8-K
Team Inc filed this 8-K on March 14, 2023.
Items reported
- Item 8.01: Other events
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 OR 15(d)
of The Securities Exchange Act of 1934
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| Item 8.01 | Other Events. |
As previously reported, on August 14, 2022, Team, Inc. (the “Company”) entered into that certain Equity Purchase Agreement (the “Sale Agreement”) with Baker Hughes Holdings LLC, a Delaware limited liability company (“Buyer”), pursuant to which Buyer acquired all of the issued and outstanding equity interests of a wholly-owned subsidiary of the Company, TQ Acquisition, Inc., a Texas corporation (the “Transaction”). On November 1, 2022 and in accordance with the Sale Agreement, the Company completed the Transaction. The Transaction was previously disclosed by the Company in its Current Report on Form 8-K filed with the Securities and Exchange Commission on November 7, 2022 and such description is incorporated herein by reference.
The following unaudited pro forma condensed consolidated statement of operations giving effect to the Transaction is filed herewith as Exhibit 99.1:
| • | Unaudited pro forma condensed consolidated statement of operations of the Company and its subsidiaries for the fiscal year ended December 31, 2022, giving effect to the Transaction as if it had occurred on January 1, 2022. |
| Item 9.01 | Financial Statements and Exhibits |
(d) Exhibits.
| Exhibit number | Description | |
| 99.1 | Unaudited Pro Forma Condensed Consolidated Statement of Operations of the Company for the Year Ended December 31, 2022, giving effect to the Transaction as if it had occurred on January 1, 2022. | |
| 104 | Cover Page Interactive Data File (embedded within the inline XBRL document). | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| TEAM, Inc. | ||
| By: | /s/ Nelson M. Haight | |
| Nelson M. Haight | ||
| Chief Financial Officer (Principal Financial Officer) | ||
Dated: March 14, 2023
Exhibit 99.1
TEAM, INC.
Unaudited Pro Forma Condensed Consolidated Statement of Operations
On August 14, 2022, Team, Inc. (the “Company”) entered into that certain Equity Purchase Agreement (the “Sale Agreement”) with Baker Hughes Holdings LLC, a Delaware limited liability company (“Buyer”), pursuant to which Buyer acquired all of the issued and outstanding equity interests of a wholly-owned subsidiary of the Company, TQ Acquisition, Inc., a Texas corporation (“TQ Acquisition”) (the “Transaction”). On November 1, 2022 and in accordance with the Sale Agreement, the Company completed the Transaction.
The following unaudited pro forma condensed consolidated statement of operations of the Company is derived from the Company’s historical consolidated financial statements and should be read in conjunction with the audited financial statements and notes thereto appearing in the Company’s Annual Report on Form 10-K for the years ended December 31, 2022 and 2021.
The unaudited condensed consolidated statement of operations and accompanying notes reflect the impact of the Transaction as if it had occurred on January 1, 2022.
The unaudited pro forma condensed consolidated statement of operations has been presented for the informational purposes only and is not indicative of any future results of operations or the results that might have occurred if the Transaction had actually been completed on the indicated dates. The unaudited pro forma condensed consolidated statement of operations is based on management’s estimate of the effects on the financial statements of the Transaction. Pro forma adjustments are based on currently available information, historical results and certain assumptions that management believes are reasonable and described in the accompanying notes.
TEAM, INC. AND SUBSIDIARIES
Unaudited Pro Forma Condensed Consolidated Statement of Operations
For the Year Ended December 31, 2022
(unaudited, in thousands, except per share data)
| Historical | Sale of TQ Acquisition (1) |
Pro Forma Adjustments |
Pro Forma | |||||||||||||||||
| Revenues |
$ | 941,626 | $ | 101,418 | $ | — | $ | 840,208 | ||||||||||||
| Operating expenses |
683,641 | 45,044 | — | 638,597 | ||||||||||||||||
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| Gross margin |
257,985 | 56,374 | — | 201,611 | ||||||||||||||||
| Selling, general and administrative expenses |
273,627 | 32,230 | 241,397 | |||||||||||||||||
| Restructuring |
16 | 16 | ||||||||||||||||||
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| Operating income (loss) |
(15,658 | ) | 24,144 | — | (39,802 | ) | ||||||||||||||
| Interest income (expense) |
(85,160 | ) | (108 | ) | 35,450 | (2) | (49,602 | ) | ||||||||||||
| Loss on debt extinguishment |
(30,083 | ) | (4,056 | ) | (3) | (34,139 | ) | |||||||||||||
| Gain on sale of TQ Acquisition |
— | — | 202,174 | (4) | 202,174 | |||||||||||||||
| Othre income (expense) |
3,766 | (4,390 | ) | — | 8,156 | |||||||||||||||
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| Income (loss) before income taxes |
(127,135 | ) | 19,646 | 233,567 | 86,786 | |||||||||||||||
| Provision for income taxes |
(6,136 | ) | (2,831 | ) | (861 | ) | (5) | (4,166 | ) | |||||||||||
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| Net income (loss) from continuing operations |
(133,271 | ) | 16,815 | 232,706 | 82,620 | |||||||||||||||
| Income from discontinued operations |
203,351 | (203,351 | ) | (6) | — | |||||||||||||||
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| Net income |
$ | 70,080 | $ | 16,815 | $ | 29,355 | $ | 82,620 | ||||||||||||
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| Income (loss) per common share: |
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| Basic and dilluted |
$ | 16.74 | $ | 4.02 | $ | 7.01 | $ | 19.73 | ||||||||||||
| Weighted-average number of shares outstanding: |
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| Basic and dilluted |
4,187 | 4,187 | 4,187 | 4,187 | ||||||||||||||||
| 1 | Represents carving out historical income statement amounts associated with TQ Acquisition. |
| 2 | This amount consists of (a) $36,835 - a reduction of interest expense and amortization of debt issuance cost and debt discount after sale proceeds were applied to pay off a portion of debt at 1/1/2022 calculated as 95.3% of the actual interest expense (95.3% is calculated as a proportion of the debt payoff assumed at January 1, 2022) and (b) $1,385 - additional interest incurred after the sale of TQ Acquisition. Additional interest is estimated assuming additional borrowings on the revolver will be required to replace monthly cash sweeps from TQ Acquisition (average monthly interest rates on the revolvers are used). |
| 3 | This amount consists of (a) $34,139 - a write off of unamortized balances of debt issuance cost and debt discount after paying off a portion of debt at 1/1/2022 calculated as 95.3% of the actual balances (95.3% is calculated as a proportion of the debt payoff assumed at January 1, 2022) and (b) ($30,083) - a reversal of the actual loss on debt extinguishment recorded at 11/2/2022. |
| 4 | This adjustment represents a proforma gain on sale of TQ Acquisition assumed at 1/1/2022 calculated as follows: |
| Base purchase price |
$ | 280,000 | ||
| Quest estimated cash at close |
9,619 | |||
| Net indebtedness |
(9,014 | ) | ||
| Estimated Quest IC |
(2,190 | ) | ||
| Working capital adjustment |
577 | |||
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| Initial purchase price |
$ | 278,992 | ||
| Assets |
81,036 | |||
| Liabilities |
(14,337 | ) | ||
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| Net assets disposed of |
66,699 | |||
| Adjustment for transaction cost |
(7,327 | ) | ||
| Working capital and other adjustments |
(2,792 | ) | ||
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| Proforma gain on disposal |
$ | 202,174 | ||
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| 5 | This adjustment represents a tax impact on the sale of TQ Acquisition. |
| 6 | This adjustment represents a reversal of the actual gain on sale of TQ Acquisition booked at 11/1/2022. |