Team, Inc. Announces Amendment and Maturity Extension of Its ABL Credit Facility
Rhea-AI Summary
Team, Inc. (NYSE: TISI) has announced an amendment to its existing ABL credit facility, which includes a $130 million revolving credit facility and a $27.4 million term loan provided by Eclipse Business Capital , as well as a $35 million delayed draw term loan from J.F. Lehman & Company and Corre Partners Management, The amendment extends the maturity date of these loans from August 11, 2025, to September 30, 2027, and lowers the interest rate spread adjustment.
The amendment also expands availability based on the Company's improving financial performance by increasing the borrowing base advance rate and implementing a $7.5 million minimum availability covenant under the Revolver, tested only if the fixed charge coverage ratio is not satisfied. CEO Keith D. Tucker stated that this transaction strengthens TEAM's balance sheet and available borrowing capacity, attributing it to employee efforts and progress in improving operating and financial performance over the past two years.
Positive
- Extension of credit facility maturity date from 2025 to 2027
- Lower interest rate spread adjustment
- Expanded availability based on improving financial performance
- Increased borrowing base advance rate
- Strengthened balance sheet and available borrowing capacity
Negative
- None.
Insights
This amendment to TEAM's ABL credit facility is a significant positive development for the company. The extension of the maturity date from 2025 to 2027 provides important breathing room, reducing near-term refinancing pressure. The improved terms, including a lower interest rate spread and expanded availability, should result in
The increased borrowing base advance rate and the more flexible
For investors, this amendment signals potential for improved financial stability and operational flexibility. However, it's important to note that while this development is positive, TEAM still faces challenges in a competitive industrial services market. The company's ability to leverage this improved financial position to drive sustainable growth and profitability will be important for long-term value creation.
TEAM's successful amendment of its credit facility reflects positively on the company's improving financial and operational performance. The extension and improved terms suggest that lenders view TEAM's turnaround efforts favorably, which could boost investor confidence.
The industrial services sector has been facing headwinds, including cyclical demand and pricing pressures. In this context, TEAM's ability to secure better financing terms is noteworthy. It may indicate that the company is outperforming peers or at least showing promising signs of recovery.
Investors should watch for TEAM's ability to capitalize on this financial flexibility to gain market share or expand its service offerings. The company's focus on driving topline and EBITDA improvement, coupled with this enhanced financial position, could potentially lead to improved competitive positioning in the specialty industrial services market.
Amendment Provides Additional Liquidity and Improved Pricing
SUGAR LAND, Texas, Sept. 30, 2024 (GLOBE NEWSWIRE) -- Team, Inc. (NYSE: TISI) (“TEAM” or the “Company”), a global, leading provider of specialty industrial services offering clients access to a full suite of conventional, specialized, and proprietary mechanical, heat-treating, and inspection services, announced today that it has executed an amendment to its existing ABL credit facility, which consists of a
Among other things, the amendment extends the maturity date of the Eclipse Loans and the DDTL from August 11, 2025, to September 30, 2027, and lowers the interest rate spread adjustment. Additionally, the terms of the Revolver were amended to provide expanded availability based upon the Company’s improving financial and operating performance by, among other things, increasing the borrowing base advance rate and providing for a
“We are pleased to have successfully amended our ABL credit facility on improved terms and extended its maturity,” said Keith D. Tucker, TEAM’s Chief Executive Officer. “This transaction strengthens our balance sheet and available borrowing capacity and would not have been possible without the hard work of our employees and the tangible progress made over the last two years in our ongoing program to improve operating and financial performance. As we continue to drive topline and EBITDA improvement, we are also focused on identifying opportunities to further improve our capital structure and view this ABL renewal as a successful first step. I would like to thank Eclipse, JFL and Corre for their continued support and confidence in the Company.”
About Team, Inc.
Headquartered in Sugar Land, Texas, Team, Inc. (NYSE: TISI) is a global, leading provider of specialty industrial services offering clients access to a full suite of conventional, specialized, and proprietary mechanical, heat-treating, and inspection services. We deploy conventional to highly specialized inspection, condition assessment, maintenance, and repair services that result in greater safety, reliability, and operational efficiency for our client’s most critical assets. Through locations in more than 15 countries, we unite the delivery of technological innovation with over a century of progressive, yet proven integrity and reliability management expertise to fuel a better tomorrow. For more information, please visit www.teaminc.com.
Forward Looking Statements
Certain forward-looking information contained herein is being provided in accordance with the provisions of the Private Securities Litigation Reform Act of 1995. We have made reasonable efforts to ensure that the information, assumptions, and beliefs upon which this forward-looking information is based are current, reasonable, and complete. However, such forward-looking statements involve estimates, assumptions, judgments, and uncertainties. They include but are not limited to statements regarding the Company’s financial prospects and the implementation of cost saving measures. There are known and unknown factors that could cause actual results or outcomes to differ materially from those addressed in the forward-looking information. Although it is not possible to identify all of these factors, they include, among others; the Company’s ability to generate sufficient cash flow from operations, access its credit facility, or maintain its compliance with covenants under its credit facility and debt agreement; the duration and magnitude of accidents, extreme weather, natural disasters, and pandemics and related global economic effects and inflationary pressures; the Company’s liquidity and ability to obtain additional financing; the Company’s ability to continue as a going concern; the Company’s ability to execute on its cost management actions; the impact of new or changes to existing governmental laws and regulations and their application, including tariffs; the outcome of tax examinations, changes in tax laws, and other tax matters; foreign currency exchange rate and interest rate fluctuations; the Company’s ability to successfully divest assets on terms that are favorable to the Company; the Company’s ability to repay, refinance or restructure its debt and the debt of certain of our subsidiaries; anticipated or expected purchases or sales of assets; the Company’s continued listing on the New York Stock Exchange; and such known factors as are detailed in the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, each as filed with the Securities and Exchange Commission, and in other reports filed by the Company with the Securities and Exchange Commission from time to time. Accordingly, there can be no assurance that the forward-looking information contained herein, including statements regarding the Company’s financial prospects and the implementation of cost-saving measures, will occur or that objectives will be achieved. We assume no obligation to publicly update or revise any forward-looking statements made today or any other forward-looking statements made by the Company, whether as a result of new information, future events or otherwise, except as may be required by law.
Contact:
Nelson M. Haight
Executive Vice President, Chief Financial Officer
(281) 388-5521
FAQ
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