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Alico, Inc. (ALCO)

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Previous Close32.03
Open32.55
Bid0.00 x 1200
Ask0.00 x 800
Day's Range32.07 - 32.56
52 Week Range22.55 - 38.25
Volume6,549
Avg. Volume22,331
Market Cap242.429M
Beta (5Y Monthly)0.67
PE Ratio (TTM)10.58
EPS (TTM)N/A
Earnings DateN/A
Forward Dividend & Yield0.36 (1.12%)
Ex-Dividend DateJun 25, 2020
1y Target EstN/A
  • GlobeNewswire

    Alico, Inc. Announces Financial Results for the Third Quarter and Nine Months Ended June 30, 2020

    FORT MYERS, Fla., Aug. 06, 2020 (GLOBE NEWSWIRE) -- Alico, Inc. (“Alico” or the “Company”) (Nasdaq: ALCO) today announces financial results for the third quarter of fiscal year 2020 and the nine months ended June 30, 2020, the highlights which are as follows: * With the recent execution of two new Citrus supply agreements, the Company now has contracts in place that provide for prices per pound solid over the next several years which will be greater than the current year’s prices per pound solid. * Company entered into a new long-term agreement to provide citrus grove management for approximately 7,000 acres in southwestern Florida. * The coronavirus outbreak (“COVID-19”) did not impact the Company’s fiscal year 2020 harvest and has not had a material adverse impact on the Company’s overall business operations. * Company appoints two new Board members with Florida agriculture expertise and exceptional credentials. * Company provides Net Income and EBITDA guidance for the remainder of fiscal year 2020.Results of OperationsFor the nine months ended June 30, 2020, the Company earned net income attributable to Alico common stockholders of approximately $6.5 million and earnings of $0.86 per diluted common share, compared to net income attributable to Alico common stockholders of approximately $21.3 million and earnings of $2.85 per diluted common share for the nine months ended June 30, 2019. The decrease in net income attributable to Alico common stockholders is primarily due to a decline in the market price per pound solids for citrus fruit this past 2019/2020 harvest season because of unfavorable industry supply dynamics and a decrease in processed box production caused by greater fruit drop in the current harvest season as compared to the 2018/2019 harvest season. Partially offsetting this decrease was (i) funds awarded through the federal disaster relief program, (ii) a reduction in certain general and administrative costs and (iii) a gain on the sale of certain parcels on the east side of the Alico Ranch.When both periods are adjusted for certain non-recurring items, the Company had adjusted net income of $0.25 per diluted common share for the nine months ended June 30, 2020, compared to adjusted net income of $3.26 per diluted common share for the nine months ended June 30, 2019. Adjusted EBITDA for the nine months ended June 30, 2020 and 2019 was $17.7 million and $48.1 million, respectively.These financial results reflect the seasonal nature of the Company’s business. The majority of the Company’s citrus crop is harvested in the second and third quarters of the fiscal year; consequently, most of the Company's profit and cash flows from operating activities are typically recognized in those quarters and our working capital requirements are typically greater in the first and fourth quarters of the fiscal year.The Company reported the following financial results:(in thousands, except for per share amounts and percentages)                         Three Months Ended June 30,  Nine Months Ended June 30,   2020 2019 Change  2020 2019 Change                           Net income attributable to Alico, Inc. common stockholders$2,096 $16,244 $(14,148)(87.1)% $6,458 $21,324 $(14,866)(69.7)% EBITDA (1)$7,518 $26,962 $(19,444)(72.1)% $23,932 $44,472 $(20,540)(46.2)% Adjusted EBITDA (1)$7,441 $26,720 $(19,279)(72.2)% $17,712 $48,058 $(30,346)(63.1)% Earnings per diluted common share$0.28 $2.17 $(1.89)(87.1)% $0.86 $2.85 $(1.99)(69.8)% Net cash provided by operating activities$9,433 $35,618 $(26,185)(73.5)% $21,121 $41,686 $(20,565)(49.3)% (1) See “Non-GAAP Financial Measures” at the end of this earnings release for details regarding these measures.Alico Citrus Division ResultsCitrus production for the three and nine months ended June 30, 2020 and 2019 is summarized in the following table.(in thousands, except per box and per pound solids data)                                      Three Months Ended       Nine Months Ended        June 30, Change  June 30, Change   2020 2019 Unit %  2020 2019 Unit %  Boxes Harvested:                        Early and Mid-Season —  —  — NM   3,146  3,114  32 1.0% Valencias 1,905  3,492  (1,587)(45.4)%  4,165  4,790  (625)(13.0)% Total Processed 1,905  3,492  (1,587)(45.4)%  7,311  7,904  (593)(7.5)% Fresh Fruit 44  74  (30)(40.5)%  247  210  37 17.6% Total 1,949  3,566  (1,617)(45.3)%  7,558  8,114  (556)(6.9)%                          Pound Solids Produced:                        Early and Mid-Season —  —  — NM   17,947  16,873  1,074 6.4% Valencias 11,970  22,023  (10,053)(45.6)%  25,631  29,854  (4,223)(14.1)% Total 11,970  22,023  (10,053)(45.6)%  43,578  46,727  (3,149)(6.7)%                          Average Pound Solids per Box:                        Early and Mid-Season —  —  — NM   5.70  5.42  0.28 5.2% Valencias 6.28  6.31  (0.03)(0.5)%  6.15  6.23  (0.08)(1.3)%                          Price per Pound Solids:                        Early and Mid-Season —  —  — NM  $1.74 $2.35 $(0.61)(26.0)% Valencias$2.03 $2.49 $(0.46)(18.5)% $1.95 $2.46 $(0.51)(20.7)% NM - Not meaningfulFor the nine months ended June 30, 2020, Alico Citrus harvested approximately 7.6 million boxes of fruit, a decrease of 6.9% from the same period of the prior fiscal year. The decrease was principally attributable to greater fruit drop in the current harvest season as compared to the prior harvest season. The Company saw a reduction in its average blended price per pound solid fall from $2.42 in the prior fiscal year to $1.86 in the current fiscal year, largely due to the Florida citrus crop being greater than expected in the 2018/2019 harvest season, leading to excess inventory levels at Florida citrus juice processors in the current harvest season.  The price reduction was also impacted by the continued inflow of imported orange juice, though at lower levels than the prior year. Because of increased consumption of not-from-concentrate orange juice by retail consumers since February 2020, as indicated in the published Nielsen data, inventory levels at the Florida citrus juice processors have been decreasing. The Company expects this inventory trend will lead to improved market pricing improvement in the next harvest season.The Company’s harvesting activities were not impacted by the coronavirus pandemic, and there were no disruptions in delivering fruit to the processors. Additionally, to date, the Company has not experienced any material challenges to its operations from COVID-19.In July 2020, the Company entered into a long-term agreement to provide citrus grove management services, including harvest and haul responsibilities, to another top ten Florida grower, Barron Collier Companies. The Company will manage citrus operations for approximately 7,000 acres of Barron Collier groves in Collier and Hendry Counties, in exchange for a per acre management fee after being reimbursed for all of its costs incurred. Water Resources and Other Operations Division ResultsIncome from operations for the Water Resources and Other Operations Division for the nine months ended June 30, 2020 improved by approximately $0.4 million compared to the nine months ended June 30, 2019. This was primarily due to lower expenses related to the dispersed water project, as well as a reduction in land consulting expenses.As a result of the Company granting the State of Florida an option to purchase an approximate 10,700 acre parcel on the western part of Alico Ranch (the “State Option”), and because a sale of those acres would affect the proposed dispersed water management project, the Company has decided to suspend all permit approval activities for its dispersed water management project. The Company expects this transaction to close by the end of September 2020.Management CommentJohn Kiernan, President and Chief Executive Officer, commented, “Alico is deeply saddened by the passing of our former President and Chairman of the Board, Ben Hill Griffin, III, last month. Ben Hill Griffin, III was a champion for Florida citrus and led Alico through a time of strong growth. He was a role model as a true Floridian and leaves an indelible legacy in agriculture. Alico is forever proud to have donated the land for Florida Gulf Coast University under Ben Hill’s leadership. We extend our sincerest condolences to Mr. Griffin’s family and continue to strive to live up to the ideals that generations of Griffins set for Alico.We are proud to embark on a new business initiative working with Barron Collier to manage their citrus grove operations.  This multi-year partnership allows Alico to leverage its existing grove management expertise. We currently own, operate and manage more than 31,000 net citrus acres and by adding approximately 7,000 Barron Collier net citrus acres to our platform it will enable Alico to continue to improve its economies of scale.  We are delighted to have been able to add the majority of the Barron Collier citrus team members to our Alico team and are impressed with their professionalism and citrus grove management expertise.  We believe that our combined best practices will improve all of our groves and continue to establish our position as a citrus industry leader. Alico will continue to pursue similar citrus grove management opportunities over the next year.To continue to become more transparent to our investors, Alico is providing limited financial guidance for the remainder of fiscal year ended September 30, 2020.  As anticipated and discussed last quarter, Alico will realize lower earnings this fiscal year primarily because of lower market prices for citrus fruit. However, our new citrus supply agreements, which extend until 2024, have pricing mechanisms which will protect the Company in the event of over-supply. Under these agreements, Alico is entitled to receive greater prices per pound solid than the prices per pound solid realized by the Company this fiscal year, as the agreements incorporate certain increasing pricing provisions over the next several seasons. Additionally, because higher levels of consumer demand have increased not-from-concentrate orange juice consumption in 2020 and driven down processor inventory levels, we anticipate the market prices next season for pound solids may be above our hard floors as well. We are pleased that our operating costs have been consistent over the last few years, after executing operational and financial improvements previously outlined in our Alico 2.0 Modernization program, and hope that pricing improvement will allow Alico to return to greater levels of profitability.”Mr. Kiernan continued, “Alico is fortunate to welcome both Kate English and Adam Putnam to its Board of Directors, which was announced this morning. These two directors will further enhance the strength of our existing Board. As lifelong Floridians, Ms. English and Mr. Putnam both bring firsthand knowledge of citrus, cattle and recreational hunting operations to the Alico team.  They are exceptional professionals within their respective fields, and we look forward to their contributions to support the Company’s strategies and growth. Ms. English is a Partner at Pavese Law Firm, and her practice concentrates on environmental and land use law, with an emphasis on seeking and maintaining entitlements for larger properties. Mr. Putnam is the Chief Executive Officer of Ducks Unlimited, an American nonprofit organization dedicated to the conservation of wetlands and associated upland habitats for waterfowl and other wildlife.  Mr. Putnam also served as Florida’s Commissioner of Agriculture from 2011-2019 and was a US Congressman for five terms.”Other Corporate Financial InformationGeneral and administrative expenses for the nine months ended June 30, 2020 totaled approximately $8.3 million, compared to approximately $10.8 million for the nine months ended June 30, 2019. The decrease was attributable in large part to (i) a reduction  in professional fees of approximately $2.3 million relating to corporate matters incurred in the nine months ended June 30, 2019, (ii) a reduction in consulting and separation fees of approximately $0.8 million incurred in the nine months ended June 30, 2019 relating to a settlement agreement with a former senior executive,  (iii) a reduction in rent expense of approximately $0.15 million as a result of the Company not renewing its lease for office space in New York City and (iv) a reduction in Board of Director compensation of approximately $0.15 million. These decreases were partially offset by an adjustment to stock compensation expense whereby the Company recorded a reduction in stock compensation expense of approximately $0.8 million for the nine months ended June 30, 2019, as a result of a former senior executive forfeiting his stock options as part of a settled litigation and an increase in Directors and Officers insurance premiums of approximately $0.18 million.Other expense, net, for the nine months ended June 30, 2020 and 2019 was approximately $1.6 million and approximately $6.5 million, respectively. The decrease in the other expense, net is primarily due to (i) the Company recognizing a gain on sale of real estate, property and equipment and assets held for sale of approximately $3.0 million during the nine months ended June 30, 2020 compared to the same period in the prior year where no significant gain on sale of assets was recorded, (ii) the Company recognizing a reduction of approximately $1.0 million in lower interest expense as a result of the reduction of its long-term debt attributable to making its mandatory principal payments and making a prepayment of one of its long-term debt obligations and (iii) during the nine months ended June 30, 2019, the Company recorded an expense of approximately $1.0 million relating to the change in fair value of the derivative asset and derivative liabilities.During the nine months ended June 30, 2020 the Company received approximately $4.6 million of additional proceeds under the Florida Citrus Recovery Block Grant (“Florida CRBG”) program relating to Hurricane Irma. To date, the Company has received approximately $20.2 million of proceeds under the Florida CRBG program, which represented reimbursement under Part 1 and Part 2.  The timing and amount to be received under Part 3 of the Florida CRBG program, if any, has not yet been finalized.GuidanceFollowing the close of the 2019/2020 harvest season and an evaluation of forecasted expenses for its fourth quarter, the Company is projecting net income for its fiscal year ended September 30, 2020 between $22.0 million and $24.0 million and EBITDA for its fiscal year ended September 30, 2020 between $49.5 million and $52.5 million. The net income and EBITDA guidance reflects the assumption that the State Option will be exercised and will close prior to September 30, 2020.DividendOn July 12, 2020, the Company paid a third quarter cash dividend of $0.09 per share on its outstanding common stock to stockholders of record as of June 28, 2020.Balance Sheet and LiquidityThe Company continues to demonstrate financial strength within its balance sheet, as highlighted below: * The Company’s working capital, excluding approximately $64.4 million drawn on its lines of credit which is being held in cash as a liquidity reserve, was approximately $24.6 million at June 30, 2020, representing a 2.00 to 1.00 ratio. * The Company continues to improve upon its debt to equity ratio.  At June 30, 2020, September 30, 2019 and September 30, 2018, the ratios, excluding the approximately $64.4 million drawn on its lines of credit which is being held in cash, were 0.74 to 1.00, 0.82 to 1.00 and 1.00 to 1.00, respectively.At June 30, 2020, the Company had term debt, including lines of credit, net of cash and cash equivalents and restricted cash, of approximately $134.1 million.About AlicoAlico, Inc. primarily operates two divisions: Alico Citrus, one of the nation’s largest citrus producers, and Alico Water Resources and Other Operations, a leading water storage and environmental services division. Learn more about Alico (Nasdaq: “ALCO”) at www.alicoinc.com.Forward-Looking StatementsThis press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are based on Alico’s current expectations about future events and can be identified by terms such as “plans,” “expect,” “may,” “anticipate,” “intend,” “should be,” “will be,” “is likely to,” “believes,” and similar expressions referring to future periods.Alico believes the expectations reflected in the forward-looking statements are reasonable but cannot guarantee future results, level of activity, performance or achievements. Actual results may differ materially from those expressed or implied in the forward-looking statements. Therefore, Alico cautions you against relying on any of these forward-looking statements. Factors which may cause future outcomes to differ materially from those foreseen in forward-looking statements include, but are not limited to: changes in laws, regulation and rules; weather conditions that affect production, transportation, storage, demand, import and export of fresh product and their by-products; increased pressure from diseases including citrus greening and citrus canker, as well as insects and other pests; disruption of water supplies or changes in water allocations; market pricing of citrus; pricing and supply of raw materials and products; market responses to industry volume pressures; pricing and supply of energy; changes in interest rates; availability of financing for land development activities and other growth and corporate opportunities; onetime events; acquisitions and divestitures; seasonality; labor disruptions; inability to pay debt obligations; inability to engage in certain transactions due to restrictive covenants in debt instruments; government restrictions on land use; changes in agricultural land values; Alico’s receipt of future funding from the state of Florida in connection with water retention projects; impact of the COVID-19 outbreak and the coronavirus pandemic on our agriculture operations, including without limitation demand for product, supply chain, health and availability of our labor force, the labor force of contractors we engage, and the labor force of our competitors; other risks related to the duration and severity of the COVID-19 outbreak and coronavirus pandemic and its impact on Alico’s business; the impact of the COVID-19 outbreak and coronavirus pandemic on the U.S. and global economies and financial markets; access to governmental loans and incentives; any reduction in the public float resulting from repurchases of common stock by Alico; changes in equity awards to employees; any increase in the public float resulting from the distribution by 734 Investors of its shares to its members; whether the Company's dividend policy, including its recent increased dividend amounts, is continued; expressed desire of certain of our stockholders to liquidate their shareholdings by virtue of past market sales of common stock by sales of common stock or by way of future transactions; political changes and economic crises; competitive actions by other companies; increased competition from international companies; changes in environmental regulations and their impact on farming practices; the ability to secure permits for the Water Storage Contract and Project from the South Florida Water Management District; the land ownership policies of governments; changes in government farm programs and policies and international reaction to such programs; changes in pricing calculations with our customers; fluctuations in the value of the U. S. dollar, interest rates, inflation and deflation rates; length of terms of contracts with customers; impact of concentration of sales to one customer; whether the State of Florida exercises an option to purchase approximately 10,700 acres of land from Alico; and changes in and effects of crop insurance programs, global trade agreements, trade restrictions and tariffs; and soil conditions, harvest yields, prices for commodities, and crop production expenses.  Other risks and uncertainties include those that are described in Alico’s SEC filings, which are available on the SEC’s website at http://www.sec.gov. Alico undertakes no obligation to subsequently update or revise the forward-looking statements made in this press release, except as required by law.This press release also contain financial projections that are necessarily based upon a variety of estimates and assumptions which may not be realized and are inherently subject, in addition to the risks identified in the forward-looking statement disclaimer, to business, economic, competitive, industry, regulatory, market and financial uncertainties, many of which are beyond the Company’s control.  There can be no assurance that the assumptions made in preparing the projected financial impact will prove accurate.  Accordingly, actual results may differ materially from the projected financial impact. Investor Contact:Investor Relations (646) 277-1254 InvestorRelations@alicoinc.comRichard Rallo Senior Vice President and Chief Financial Officer (239) 226-2000 rrallo@alicoinc.com ALICO, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share amounts) June 30,  September 30,   2020  2019   (Unaudited)      ASSETS        Current assets:        Cash and cash equivalents$80,426  $18,630  Accounts receivable, net 909   713  Inventories 29,253   40,143  Assets held for sale 1,366   1,442  Prepaid expenses and other current assets 1,645   1,049  Total current assets 113,599   61,977           Restricted cash 784   5,208  Property and equipment, net 351,077   345,648  Goodwill 2,246   2,246  Other non-current assets 2,226   2,309  Total assets$469,932  $417,388           LIABILITIES AND STOCKHOLDERS' EQUITY        Current liabilities:        Accounts payable$4,503  $4,163  Accrued liabilities 5,803   7,769  Long-term debt, current portion 5,130   5,338  Deferred retirement obligations 5,226   5,226  Income taxes payable 2,802   5,536  Other current liabilities 1,139   919  Total current liabilities 24,603   28,951           Long-term debt:        Principal amount, net of current portion 145,810   158,111  Less: deferred financing costs, net (1,195)  (1,369) Long-term debt less current portion and deferred financing costs, net 144,615   156,742  Lines of credit 64,380   —  Deferred income tax liabilities, net 31,353   32,125  Other liabilities 246   172  Total liabilities 265,197   217,990  Commitments and Contingencies (Note 12)        Stockholders' equity:        Preferred stock, no par value, 1,000,000 shares authorized; none issued —   —  Common stock, $1.00 par value, 15,000,000 shares authorized; 8,416,145 shares issued and 7,486,108 and 7,476,513 shares outstanding at June 30, 2020 and September 30, 2019, respectively 8,416   8,416  Additional paid in capital 20,181   19,781  Treasury stock, at cost, 930,037 and 939,632 shares held at June 30, 2020 and September 30, 2019, respectively (31,539)  (31,943) Retained earnings 202,488   198,049  Total Alico stockholders' equity 199,546   194,303  Noncontrolling interest 5,189   5,095  Total stockholders' equity 204,735   199,398  Total liabilities and stockholders' equity$469,932  $417,388  ALICO, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (in thousands, except per share amounts) Three Months Ended June 30,  Nine Months Ended June 30,   2020  2019  2020  2019  Operating revenues:                Alico Citrus$25,360  $56,819  $85,336  $118,539  Water Resources and Other Operations 762   746   2,306   2,326  Total operating revenues 26,122   57,565   87,642   120,865  Operating expenses:                Alico Citrus 19,508   31,141   67,866   73,597  Water Resources and Other Operations 394   420   1,325   1,768  Total operating expenses 19,902   31,561   69,191   75,365  Gross profit 6,220   26,004   18,451   45,500  General and administrative expenses 2,556   2,682   8,269   10,786  Income from operations 3,664   23,322   10,182   34,714  Other (expense) income, net:                Interest expense (1,603)  (1,745)  (4,599)  (5,625) Gain on sale of real estate, property and equipment and assets held for sale 154   114   3,017   137  Change in fair value of derivatives—   —  —   (989) Other income (expense) 44   8   (20)  18  Total other (expense) income, net (1,405)  (1,623)  (1,602)  (6,459) Income before income taxes 2,259   21,699   8,580   28,255  Income tax provision 171   5,483   2,028   7,082  Net income 2,088   16,216   6,552   21,173  Net loss (income) attributable to noncontrolling interests 8   28   (94)  151  Net income attributable to Alico, Inc. common stockholders$2,096  $16,244  $6,458  $21,324  Per share information attributable to Alico, Inc. common stockholders:                Earnings per common share:                Basic$0.28  $2.17  $0.86  $2.85  Diluted$0.28  $2.17  $0.86  $2.85  Weighted-average number of common shares outstanding:                Basic 7,486   7,470   7,481   7,470  Diluted 7,493   7,471   7,493   7,494                   Cash dividends declared per common share$0.09  $0.06  $0.27  $0.18  ALICO, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (in thousands) Nine Months Ended June 30,   2020  2019  Net cash provided by operating activities:        Net income$6,552  $21,173  Adjustments to reconcile net income to net cash provided by operating activities:        Depreciation, depletion, and amortization 10,847   10,441  Deferred income tax (benefit) expense (772)  454  Loss on disposal of long-lived assets 48   —  Gain on sale of real estate, property and equipment and assets held for sale (3,065)  (137) Change in fair value of derivatives —   989  Impairment of long-lived assets 723   244  Impairment of right-of-use asset 87   —  Stock-based compensation expense 1,042   537  Other 15   (160) Changes in operating assets and liabilities:        Accounts receivable (196)  (3,741) Inventories 10,890   10,327  Prepaid expenses and other assets (758)  (480) Accounts payable and accrued liabilities (1,852)  (2,587) Income tax payable (2,734)  4,250  Other liabilities 294   376  Net cash provided by operating activities 21,121   41,686           Cash flows from investing activities:        Purchases of property and equipment (17,007)  (14,567) Net proceeds from sale of real estate, property and equipment and assets held for sale 3,322   419  Change in deposits on purchase of citrus trees 53   (256) Deposit on purchase of citrus grove (25)  —  Advances on notes receivables, net 91   56  Net cash used in investing activities (13,566)  (14,348)          Cash flows from financing activities:        Repayments on revolving lines of credit (46,187)  (86,123) Borrowings on revolving lines of credit 110,567   83,438  Principal payments on term loans (12,509)  (8,169) Treasury stock purchases (238)  (25,576) Payment on termination of sugarcane agreement—   (11,300) Dividends paid (1,793)  (1,343) Deferred financing costs (23)  —  Net cash provided by (used in) financing activities 49,817   (49,073)          Net increase (decrease) in cash and cash equivalents and restricted cash 57,372   (21,735) Cash and cash equivalents and restricted cash at beginning of the period 23,838   32,260           Cash and cash equivalents and restricted cash at end of the period$81,210  $10,525  Non-GAAP Financial MeasuresAdjusted EBITDA (in thousands) Three Months Ended June 30,  Nine Months Ended June 30,   2020  2019  2020  2019                   Net income attributable to common stockholders$2,096  $16,244  $6,458  $21,324  Interest expense 1,603   1,745   4,599   5,625  Income tax provision 171   5,483   2,028   7,082  Depreciation, depletion, and amortization 3,648   3,490   10,847   10,441  EBITDA 7,518   26,962   23,932   44,472  Adjustments for non-recurring items:                Impairment of right-of-use asset —   —   87   —  Impairment of long-lived assets —   244   723   244  Employee stock compensation expense (1) 77   114   512   684  Separation agreement expense (2) —   —   104   800  Tender offer expenses —   —   —   32  Professional fees relating to corporate matters —   —   —   2,283  Change in fair value of derivatives —   —   —   989  Forfeiture of stock options (3) —   —   —   (823) Federal relief proceeds - Hurricane Irma —   (486)  (4,629)  (486) Gains on sale of real estate, property and equipment and assets held for sale (154)  (114)  (3,017)  (137)                  Adjusted EBITDA$7,441  $26,720  $17,712  $48,058  (1) Includes stock compensation expense for current and former executives and managers. (2) Includes separation expenses for a former CEO and senior manager. (3) Includes forfeitures of stock options by former CEO, resulting in expense recapture. Adjusted Earnings Per Diluted Common Share (in thousands) Three Months Ended June 30,  Nine Months Ended June 30,   2020  2019  2020  2019                   Net income attributable to common stockholders$2,096  $16,244  $6,458  $21,324  Adjustments for non-recurring items:                Impairment of right-of-use asset —   —   87   —  Impairment of long-lived assets —   244   723   244  Employee stock compensation expense (1) 77   114   512   684  Separation agreement expense (2) —   —   104   800  Tender offer expenses —   —   —   32  Professional fees relating to corporate matters —   —   —   2,283  Change in fair value of derivatives —   —   —   989  Forfeiture of stock options (3) —   —   —   (823) Federal relief proceeds - Hurricane Irma —   (486)  (4,629)  (486) Gains on sale of real estate, property and equipment and assets held for sale (154)  (114)  (3,017)  (137) Tax impact (160)  64   1,671   (468)                  Adjusted net income attributable to common stockholders$1,859  $16,066  $1,909  $24,442                   Diluted common shares 7,493   7,471   7,493   7,494                   Adjusted net income per diluted common share$0.25  $2.15  $0.25  $3.26  (1) Includes stock compensation expense for current and former executives and managers. (2) Includes separation expenses for a former CEO and senior manager. (3) Includes forfeitures of stock options by former CEO, resulting in expense recapture.Alico utilizes the non-GAAP measures EBITDA, Adjusted EBITDA and Adjusted Earnings per Diluted Common Share among other measures, to evaluate the performance of its business. Due to significant depreciable assets associated with the nature of our operations and, to a lesser extent, interest costs associated with our capital structure, management believes that EBITDA, Adjusted EBITDA and Adjusted Earnings per Diluted Common Share are important measures to evaluate our results of operations between periods on a more comparable basis and to help investors analyze underlying trends in our business, evaluate the performance of our business both on an absolute basis and relative to our peers and the broader market, provide useful information to both management and investors by excluding certain items that may not be indicative of our core operating results and operational strength of our business and help investors evaluate our ability to service our debt. Such measurements are not prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and should not be construed as an alternative to reported results determined in accordance with U.S. GAAP. The non-GAAP information provided is unique to Alico and may not be consistent with methodologies used by other companies. EBITDA is defined as net income before interest expense, provision for income taxes, depreciation and amortization. Adjusted EBITDA is defined as net income before interest expense, provision for income taxes, depreciation and amortization and adjustments for non-recurring transactions or transactions that are not indicative of our core operating results, such as gains or losses on sales of real estate, property and equipment and assets held for sale. Adjusted Earnings per Diluted Common Share is defined as net income adjusted for non-recurring transactions divided by diluted common shares. Fiscal Year 2020 Guidance  (in thousands)      Fiscal Year End  September 30, 2020  Projected range Net Income attributable to common stockholders$22,000 - $24,000 Interest expense$5,900 - $6,100 Income tax provision$7,300 - $7,900 Depreciation, depletion and amortization$14,300 - $14,500    EBITDA$49,500 - $52,500

  • GlobeNewswire

    Alico, Inc. Announces Two New Appointments to the Board of Directors

    FORT MYERS, Fla., Aug. 06, 2020 (GLOBE NEWSWIRE) -- Alico, Inc. (“Alico” or the “Company”) (Nasdaq: ALCO) today announces the appointment of two new members to the Company’s Board of Directors (the “Board”). Joining our Board is Ms. Kate English and Mr. Adam Putnam. Ms. English will serve on the Compensation Committee and Nominating and Governance Committee. Mr. Putnam will serve on the Audit Committee and the Nominating and Governance Committee. Each will serve until the 2021 annual meeting of the Company’s shareholders or until her or his earlier death, resignation, or removal in accordance with the Amended and Restated Bylaws of the Company. This brings Alico’s total board membership to nine. Mr. Benjamin Fishman, Chairman of Alico’s board of directors, commented “We are pleased to welcome Ms. English and Mr. Putnam to our board of directors. They are both lifelong Floridians and bring decades of leadership in the area of agriculture as well as other land expertise that are vital to our future operations and strategy. The addition of these directors complements our current board of directors' skills and experiences, and we are confident they will provide valuable perspectives as we continue to execute our strategy, drive profitability and enhance value for all Alico’s shareholders. We look forward to their contributions and are excited they have joined Alico.”Ms. English is a Partner at Pavese Law Firm, whose practice concentrates on agricultural, environmental and land use law with an emphasis on developing value and maintaining productivity for larger properties. She has particular experience representing companies whose key businesses are farming, conservation and development. Before entering law school, she was a field representative for Florida Citrus Mutual, working with its grower members in nine counties in South and Southwest Florida. Mr. Putnam is the Chief Executive Officer of Ducks Unlimited, an American nonprofit organization dedicated to the conservation of wetlands and associated upland habitats for waterfowl, other wildlife, and people. Mr. Putnam also served as Florida’s Commissioner of Agriculture from 2011-2019 and was a US Congressman for five terms.For more information about Alico’s board of directors, please visit our site at http://ir.alicoinc.com/board-of-directors.About AlicoAlico, Inc. primarily operates two divisions: Alico Citrus, one of the nation’s largest citrus producers, and Alico Water Resources and Other Operations, a leading water storage and environmental services division. Learn more about Alico (Nasdaq: “ALCO”) at www.alicoinc.com.Forward-Looking StatementsThis press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are based on Alico’s current expectations about future events and can be identified by terms such as “plans,” “expect,” “may,” “anticipate,” “intend,” “should be,” “will be,” “is likely to,” “believes,” and similar expressions referring to future periods.Alico believes the expectations reflected in the forward-looking statements are reasonable but cannot guarantee future results, level of activity, performance or achievements. Actual results may differ materially from those expressed or implied in the forward-looking statements. Therefore, Alico cautions you against relying on any of these forward-looking statements. Factors which may cause future outcomes to differ materially from those foreseen in forward-looking statements include, but are not limited to: changes in laws, regulation and rules; weather conditions that affect production, transportation, storage, demand, import and export of fresh product and their by-products; increased pressure from diseases including citrus greening and citrus canker, as well as insects and other pests; disruption of water supplies or changes in water allocations; market pricing of citrus; pricing and supply of raw materials and products; market responses to industry volume pressures; pricing and supply of energy; changes in interest rates; availability of financing for land development activities and other growth and corporate opportunities; onetime events; acquisitions and divestitures; seasonality; labor disruptions; inability to pay debt obligations; inability to engage in certain transactions due to restrictive covenants in debt instruments; government restrictions on land use; changes in agricultural land values; Alico’s receipt of future funding from the state of Florida in connection with water retention projects; impact of the COVID-19 outbreak and the coronavirus pandemic on our agriculture operations, including without limitation demand for product, supply chain, health and availability of our labor force, the labor force of contractors we engage, and the labor force of our competitors; other risks related to the duration and severity of the COVID-19 outbreak and coronavirus pandemic and its impact on Alico’s business; the impact of the COVID-19 outbreak and coronavirus pandemic on the U.S. and global economies and financial markets; access to governmental loans and incentives; any reduction in the public float resulting from repurchases of common stock by Alico; changes in equity awards to employees; any increase in the public float resulting from the distribution by 734 Investors of its shares to its members; whether the Company's dividend policy, including its recent increased dividend amounts, is continued; expressed desire of certain of our stockholders to liquidate their shareholdings by virtue of past market sales of common stock by sales of common stock or by way of future transactions; political changes and economic crises; competitive actions by other companies; increased competition from international companies; changes in environmental regulations and their impact on farming practices; the ability to secure permits for the Water Storage Contract and Project from the South Florida Water Management District; the land ownership policies of governments; changes in government farm programs and policies and international reaction to such programs; changes in pricing calculations with our customers; fluctuations in the value of the U. S. dollar, interest rates, inflation and deflation rates; length of terms of contracts with customers; impact of concentration of sales to one customer; whether  the State of Florida exercises an option to purchase approximately 10,700 acres of land from Alico; and changes in and effects of crop insurance programs, global trade agreements, trade restrictions and tariffs; and soil conditions, harvest yields, prices for commodities, and crop production expenses.  Other risks and uncertainties include those that are described in Alico’s SEC filings, which are available on the SEC’s website at http://www.sec.gov. Alico undertakes no obligation to subsequently update or revise the forward-looking statements made in this press release, except as required by law.This press release also contain financial projections that are necessarily based upon a variety of estimates and assumptions which may not be realized and are inherently subject, in addition to the risks identified in the forward-looking statement disclaimer, to business, economic, competitive, industry, regulatory, market and financial uncertainties, many of which are beyond the Company’s control.  There can be no assurance that the assumptions made in preparing the projected financial impact will prove accurate.  Accordingly, actual results may differ materially from the projected financial impact.  Investor Contact:Investor Relations (646) 277-1254 InvestorRelations@alicoinc.comRichard Rallo Senior Vice President and Chief Financial Officer (239) 226-2000 rrallo@alicoinc.com

  • GlobeNewswire

    Team, Inc. Reports Second Quarter 2020 Results

    Record Quarterly Gross Margin of 30.3% Since 2015 Reduced Quarterly SG&A to Lowest Level Since 2015Second Quarter 2020 * Operating cash flow of $26.3 million, resulted in free cash flow generation of $22.1 million * Reduced debt by over $26 million, achieved the lowest quarter-end debt level over the past four years * Gross margin of 30.3%, surpassed the same quarter last year and represents the strongest quarter since 2015 * Lowest quarterly SG&A since 2015 (pre-acquisitions); $22.7 million reduction, or 27.8% year-over-year to $58.9 million * Realized cost savings of $35 million, exceeded prior estimate of $20 to $25 millionSUGAR LAND, Texas, Aug. 04, 2020 (GLOBE NEWSWIRE) -- Team, Inc. (NYSE: TISI), a global leading provider of integrated, digitally-enabled asset performance assurance and optimization solutions, today reported its financial results for the second quarter ended June 30, 2020.“We are pleased with our second quarter results, reflecting the tremendous efforts made by everyone in the company,” said, Amerino Gatti, TEAM’s Chairman and Chief Executive Officer. “TEAM’s second quarter was extremely challenging as we navigated through the pandemic, which caused significant stress and volatility for our clients and employees. Throughout the pandemic, we stayed true to our values by focusing on the health and safety of our employees while simultaneously meeting or exceeding the high quality of service our clients expect. This quarter’s results demonstrate our ability to execute efficiently and adapt quickly to changes in the marketplace. “Through our decisive and aggressive actions, we successfully aligned our cost structure to match the decline in industry activity and the unprecedented 40% drop in revenues in order to maintain margins. While we had previously committed to reducing our second quarter costs by $20 to $25 million, TEAM delivered approximately $35 million in savings during the quarter. Our focus on maintaining margin and reducing expenses allowed us to generate over $22 million in free cash flow and pay down over $26 million of debt, achieving the lowest quarter-end debt level over the past four years.“The market moved at a rapid pace throughout the quarter. Activity got off to a difficult start as many of our clients implemented stay-at-home restrictions, delayed projects and significantly cut capital expenditure plans. The unprecedented reduction in activity troughed in April and May, and slowly started to recover in June when global economies, travel and other regulatory restrictions improved. In fact, our Hot-Tapping service line had its best month of the year in June and early indications show our midstream activity is back to 2019 levels.“Looking ahead, we expect to see additional improvement in our end markets, led by onstream and call-out activity in the near term, followed by our nested business, and lastly projects and turnarounds later in the year. Continuing to manage what is in our control by making disciplined decisions and prudently evaluating current business economics to ensure costs do not outpace the recovery remains a top priority. We have identified $50 to $75 million of annualized structural and variable cost reductions for the year.“TEAM’s asset light and scalable operating model, coupled with the depth and breadth of our products and services, has made us even more agile, allowing us to flex with business demands.  Our successful revenue diversification initiative expands our portfolio to provide differentiated products and services to a variety of clients across multiple end markets. We believe our geographic footprint, value-added product and service mix, and technology offerings offer TEAM a unique market position, particularly in this environment.“We remain committed to driving execution excellence and strong financial performance, to generate significant cash flow. We are taking actions to navigate near-term challenges, while relentlessly innovating for our clients and investing for the future to deliver long-term value for our stakeholders,” concluded Mr. Gatti.Financial ResultsConsolidated net loss in the second quarter of 2020 was $13.5 million ($0.44 loss per diluted share) compared to net income of $6.1 million ($0.20 earnings per diluted share) in the second quarter of 2019. Adjusted EBITDA, a non-GAAP measure, was $12.7 million for the second quarter of 2020 compared to $32.8 million for the prior year quarter. (See the accompanying reconciliation of non-GAAP measures at the end of this earnings release.)Consolidated revenues for the second quarter of 2020 were $189.3 million compared to $315.8 million in the prior year quarter. Revenue decreased due to lower activity levels primarily resulting from the impact of COVID-19 and the global oil supply/demand imbalance. In the second quarter of 2020, consolidated gross margin was $57.4 million, or 30.3%, compared with 30.0% in the same quarter a year ago.SG&A for the second quarter was $58.9 million, down $22.7 million, or a 27.8% improvement from the second quarter of 2019. The company’s adjusted measure of operating loss, Adjusted EBIT, was negative $0.2 million in the second quarter compared to a positive $16.7 million in the prior year comparable quarter.Second quarter 2020 reported results include certain net charges not indicative of Team’s core operating activities, including: $3.2 million of costs related to severance charges primarily associated with the OneTEAM program restructuring, $177,000 for OneTEAM program professional fees, and $782,000 of other professional fees and legal costs. Net of tax, these items totaled $3.3 million or $0.11 per diluted share.Adjusted net income or loss, Adjusted EBIT, Adjusted EBITDA and free cash flow are non-GAAP financial measures that exclude certain items that are not indicative of Team’s core operating activities. A reconciliation of these non-GAAP financial measures to the most comparable GAAP financial measures is at the end of this release.Segment ResultsThe following table illustrates the composition of the company’s revenue and operating income (loss) by segment for the quarters ended June 30, 2020 and 2019 (in thousands): Three Months Ended June 30,  Increase (Decrease)  2020 2019 $%  (unaudited) (unaudited)    Revenues by business segment:       IHT$80,474  $138,658  $(58,184) (42.0)% MS92,820  144,897  (52,077) (35.9)% Quest Integrity16,010  32,274  (16,264) (50.4)% Total$189,304  $315,829  $(126,525) (40.1)% Operating income (loss):       IHT$4,740  $9,497  $(4,757) (50.1)% MS9,899  20,317  (10,418) (51.3)% Quest Integrity689  9,324  (8,635) (92.6)% Corporate and shared support services(19,694) (26,134) 6,440  24.6 % Total$(4,366) $13,004  $(17,370) (133.6)% Decrease in activity levels across the company were due to the negative impact of the COVID-19 pandemic and the oversupplied oil market that lead to certain clients temporarily closing facilities and/or curtailing operations, resulting in the postponement of client projects and lower demand for the company’s services. Mechanical Services (MS) and Inspection and Heat Treating (IHT) activity was negatively impacted by delays in large projects and turnaround activity. Also negatively impacting this quarter’s results was a temporary reduction in client nested activity as clients restricted access to facilities. Given the nature and locality of Quest Integrity’s business, Quest was particularly impacted by the pandemic as stay-at-home orders limited travel and necessitated quarantine restrictions. The travel restrictions resulted in many of Quest’s second quarter projects getting delayed until the second half of 2020. Cash and DebtConsolidated cash and cash equivalents were $15.6 million at June 30, 2020. We had approximately $53 million of available borrowing capacity with total liquidity of $69 million at June 30, 2020.  The company’s net debt was $310.9 million at June 30, 2020, compared to $318.4 million at December 31, 2019.Non-GAAP Financial MeasuresThe non-GAAP measures in this earnings release are provided to enable investors, analysts and management to evaluate Team’s performance excluding the effects of certain items that management believes impact the comparability of operating results between reporting periods. These measures should be used in addition to, and not in lieu of, results prepared in conformity with generally accepted accounting principles (GAAP). A reconciliation of each of the non-GAAP financial measures to the most directly comparable historical GAAP financial measure is contained in the accompanying schedule for each of the fiscal periods indicated.Conference Call and Webcast DetailsTeam, Inc. will host a conference call on Wednesday, Aug. 5, 2020 at 10:00 a.m. Eastern Time (9:00 a.m. Central Time) to review its second quarter 2020 results.By Phone: Dial 1-888-699-2378 inside the U.S. or 1-847-852-4067 outside the U.S. at least 10 minutes before the call. A telephone replay will be available through Aug. 12, 2020 by dialing 1-855-859-2056 inside the U.S. or 404-537-3406 outside the U.S. using the Conference ID 1898231.By Webcast: The call will be broadcast over the web and can be accessed on Team’s website, www.teaminc.com under “Investor Relations.” Please log on at least 10 minutes in advance to register and download any necessary software. A replay will be available shortly after the call.About Team, Inc.Headquartered in Sugar Land, Texas, Team Inc. (NYSE: TISI) is a global leading provider of integrated, digitally-enabled asset performance assurance and optimization solutions. 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 20 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.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. 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, (i) the duration and magnitude of the COVID-19 pandemic, related economic effects and the resulting negative impact on demand for oil and gas along with the current surplus in the global supply of oil, (ii) any difficulties or delays that could affect the Company's ability to effectively implement the remediation plan, in whole or in part, to address the material weakness identified in the Company's internal control over financial reporting, as described in Item 9A. "Controls and Procedures" of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, and (iii) 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 projected cost savings, 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. TEAM, INC. AND SUBSIDIARIES SUMMARY OF CONSOLIDATED OPERATING RESULTS (unaudited, in thousands, except per share data)         Three Months Ended Six Months Ended   June 30, June 30,   2020 2019 2020 2019           Revenues $189,304  $315,829  $426,143  $585,428  Operating expenses 131,928  221,232  311,281  424,884  Gross margin 57,376  94,597  114,862  160,544  Selling, general and administrative expenses 58,882  81,593  137,326  163,860  Restructuring and other related charges, net 2,860  —  3,046  208  Goodwill impairment charge —  —  191,788  —  Operating income (loss) (4,366) 13,004  (217,298) (3,524) Interest expense, net 7,314  7,586  14,090  15,011  Other expense, net 165  313  637  255  Income (loss) before income taxes (11,845) 5,105  (232,025) (18,790) Less: Provision (benefit) for income taxes 1,683  (997) (18,770) (664) Net income (loss) $(13,528) $6,102  $(213,255) $(18,126)           Income (loss) per common share:         Basic $(0.44) $0.20  $(6.97) $(0.60) Diluted $(0.44) $0.20  $(6.97) $(0.60)           Weighted-average number of shares outstanding:         Basic 30,628  30,270  30,584  30,250  Diluted 30,628  30,467  30,584  30,250  TEAM, INC. AND SUBSIDIARIES SUMMARY CONSOLIDATED BALANCE SHEET INFORMATION (in thousands)       June 30, December 31,  2020 2019  (unaudited)        Cash and cash equivalents$15,550   $12,175        Other current assets266,178   305,403        Property, plant and equipment, net181,310   191,951        Other non-current assets276,154   475,688        Total assets$739,192   $985,217        Current portion of long-term debt and finance lease obligations$5,316   $5,294        Other current liabilities128,167   145,242        Long-term debt and finance lease obligations, net of current maturities321,094   325,299        Other non-current liabilities65,679   72,712        Stockholders’ equity218,936   436,670        Total liabilities and stockholders’ equity$739,192   $985,217   TEAM INC. AND SUBSIDIARIES SUMMARY CONSOLIDATED CASH FLOW INFORMATION (unaudited, in thousands)       Six Months Ended June 30,   2020 2019             Net loss $(213,255) $(18,126)       Depreciation and amortization expense 23,186  24,650        Provision for doubtful accounts 1,122  889        Deferred income taxes (5,177) 2,466        Non-cash compensation cost 2,946  6,082        Goodwill impairment charge 191,788  —        Working capital changes 23,347  (12,984)       Other items affecting operating cash flows 3,288  2,593        Net cash provided by operating activities 27,245  5,570        Capital expenditures (12,486) (14,396)       Cash used for business acquisitions, net (1,013) —        Proceeds from disposal of assets 181  782        Other items affecting investing cash flow 54  89        Net cash used in investing activities (13,264) (13,525)       Borrowings (payments) under revolving credit agreement, net (5,198) 3,341        Payments under term loan (2,500) —        Debt issuance costs on Credit Facility (1,841) —        Taxes paid for net share settlement of share-based awards (349) (351)       Other items affecting financing cash flows (129) (549)       Net cash provided by (used in) financing activities (10,017) 2,441        Effect of exchange rate changes (589) (24)       Net change in cash and cash equivalents $3,375  $(5,538)       TEAM, INC. AND SUBSIDIARIES SEGMENT INFORMATION (unaudited, in thousands)         Three Months Ended June 30, Six Months Ended June 30,   2020 2019 2020 2019 Revenues         IHT $80,474  $138,658  $188,355  $265,714  MS 92,820  144,897  197,339  266,423  Quest Integrity 16,010  32,274  40,449  53,291    $189,304  $315,829  $426,143  $585,428            Operating income (loss) (“EBIT”)         IHT $4,740  $9,497  $(187,410)1$11,218  MS 9,899  20,317  10,921  25,851  Quest Integrity 689  9,324  6,795  10,968  Corporate and shared support services (19,694) (26,134) (47,604) (51,561)   $(4,366) $13,004  $(217,298) $(3,524)           Adjusted EBIT         IHT $5,770  $9,523  $5,416  $11,346  MS 11,436  20,349  12,588  25,968  Quest Integrity 829  9,324  6,935  10,968  Corporate and shared support services (18,263) (22,462) (42,330) (42,499)   $(228) $16,734  $(17,391) $5,783  Adjusted EBITDA         IHT $9,516  $13,924  $13,145  $20,249  MS 16,911  25,867  23,494  36,900  Quest Integrity 1,716  10,323  8,708  12,888  Corporate and shared support services (15,477) (17,353) (36,606) (33,522)   $12,666  $32,761  $8,741  $36,515  ___________________1 Includes goodwill impairment charge of $191.8 million for the six months ended June 30, 2020. Excluding the goodwill impairment charge, operating income for IHT would be $4.4 million for the six months ended June 30, 2020. TEAM, INC. AND SUBSIDIARIES Non-GAAP Financial Measures (Unaudited)The Company uses supplemental non-GAAP financial measures which are derived from the consolidated financial information including adjusted net income (loss); adjusted net income (loss) per diluted share, earnings before interest and taxes (“EBIT”); adjusted EBIT (defined below); adjusted earnings before interest, taxes, depreciation and amortization (“adjusted EBITDA”) and free cash flow to supplement financial information presented on a GAAP basis. Adjusted net income (loss) and adjusted net income (loss) per diluted share, each as defined by the Company, exclude the following items from net income (loss): costs associated with our OneTEAM transformation program, acquisition costs associated with business combinations, legal costs associated with Quest Integrity patent defense litigation and non-routine legal costs and settlements, professional fees for acquired business integration, restructuring and other related charges (credits), severance charges, executive severance/transition costs, non-capitalized Enterprise Resource Planning (“ERP”) implementation costs, goodwill impairment charge and certain other items that management does not believe are indicative of core operating activities and the related income tax impacts. EBIT, as defined by the Company, excludes income tax expense (benefit), interest charges and items of other (income) expense and therefore is equal to operating income (loss) reported in accordance with GAAP. Adjusted EBIT further excludes the following items: costs associated with our OneTEAM transformation program, acquisition costs associated with business combinations, legal costs associated with Quest Integrity patent defense litigation and non-routine legal costs and settlements, professional fees for acquired business integration, restructuring and other related charges (credits), executive severance/transition costs, non-capitalized ERP implementation costs, goodwill impairment charge and certain other items that management does not believe are indicative of core operating activities. Adjusted EBITDA further excludes from adjusted EBIT depreciation, amortization and non-cash share-based compensation costs. Free cash flow is defined as net cash provided by (used in) operating activities minus capital expenditures. Net debt is defined as the sum of the current and long-term portions of debt, less cash and cash equivalents.Management believes that excluding certain items from GAAP results allows management to better understand the consolidated financial performance from period to period and to better identify operating trends that may not otherwise be apparent. Moreover, the Company believes these non-GAAP financial measures will provide its stakeholders with useful information to help them evaluate operating performance. However, there are limitations to the use of the non-GAAP financial measures presented in this report. The Company’s non-GAAP financial measures may not be comparable to similarly titled measures of other companies who may calculate non-GAAP financial measures differently than Team does, limiting the usefulness of those measures for comparative purposes. The liquidity measure of free cash flow does not represent a precise calculation of residual cash flow available for discretionary expenditures.The non-GAAP financial measures are not meant to be considered as indicators of performance in isolation from or as a substitute for net income (loss) as a measure of operating performance or to cash flows from operating activities as a measure of liquidity, prepared in accordance with GAAP, and should be read only in conjunction with financial information presented on a GAAP basis. Reconciliations of each non-GAAP financial measure to its most directly comparable GAAP financial measure are presented below. You are encouraged to review the reconciliations in conjunction with the presentation of the non-GAAP financial measures for each of the periods presented. TEAM, INC. AND SUBSIDIARIES RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (unaudited, in thousands except per share data)         Three Months Ended June 30, Six Months Ended June 30,   2020 2019 2020 2019           Adjusted Net Income (Loss):         Net income (loss) $(13,528) $6,102  $(213,255) $(18,126) Professional fees and other1 512  3,715  3,057  8,820  Legal costs2 446  15  1,696  279  Severance charges, net3 3,180  —  3,366  208  Goodwill impairment charge —  —  191,788  —  Tax impact of adjustments and other net tax items4 (868) (783) (14,918) (1,954) Adjusted net income (loss) $(10,258) $9,049  $(28,266) $(10,773)           Adjusted net income (loss) per common share:         Basic $(0.33) $0.30  $(0.92) $(0.36) Diluted $(0.33) $0.30  $(0.92) $(0.36)           Adjusted EBIT and Adjusted EBITDA:         Operating income (loss) (“EBIT”) $(4,366) $13,004  $(217,298) $(3,524) Professional fees and other1 512  3,715  3,057  8,820  Legal costs2 446  15  1,696  279  Severance charges, net3 3,180  —  3,366  208  Goodwill impairment charge —  —  191,788  —  Adjusted EBIT (228) 16,734  (17,391) 5,783  Depreciation and amortization         Amount included in operating expenses 5,786  6,319  11,723  12,650  Amount included in SG&A expenses 5,692  6,060  11,463  12,000  Total depreciation and amortization 11,478  12,379  23,186  24,650  Non-cash share-based compensation costs 1,416  3,648  2,946  6,082  Adjusted EBITDA $12,666  $32,761  $8,741  $36,515            Free Cash Flow:         Cash provided by operating activities $26,328  $(2,058) $27,245  $5,570  Capital expenditures (4,181) (7,786) (12,486) (14,396) Free Cash Flow $22,147  $(9,844) $14,759  $(8,826) ____________________________________1 For the three and six months ended June 30, 2020, includes $0.2 million and $2.0 million, respectively, associated with the OneTEAM program (exclusive of restructuring costs). For the three and six months ended June 30, 2019, includes $2.7 million and $5.9 million, respectively, associated with the OneTEAM program (exclusive of restructuring costs).2 For the three months ended June 30, 2020, primarily relates to costs associated with an accrued legal settlement. For the six months ended June 30, 2020, primarily relates to costs associated with international legal and internal control review matters. For the three and six months ended June 30, 2019, primarily relates to intellectual property legal defense costs associated with Quest Integrity.3 For the three and six months ended June 30, 2020, $2.9 million and $3.1 million, respectively, are severance charges associated with the OneTEAM program as well as $0.3 million in severance charges were due to the impact of COVID-19. For the six months ended June 30, 2019, $0.2 million of severance charges are associated with the OneTEAM program.4 Represents the tax effect of the adjustments at an assumed marginal tax rate of 21% for the three and six months ended June 30, 2020 and 2019 except for the adjustment of the goodwill impairment charge for which the actual tax impact was used. TEAM, INC. AND SUBSIDIARIES RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (Continued) (unaudited, in thousands)         Three Months Ended June 30, Six Months Ended June 30,   2020 2019 2020 2019           Adjusted EBIT and Adjusted EBITDA by Segment:                   IHT         Operating income (loss) $4,740  $9,497  $(187,410) $11,218  Severance charges, net1 1,030  26  1,038  128  Goodwill impairment charge —  —  191,788  —  Adjusted EBIT 5,770  9,523  5,416  11,346  Depreciation and amortization 3,746  4,401  7,729  8,903  Adjusted EBITDA $9,516  $13,924  $13,145  $20,249            MS         Operating income $9,899  $20,317  $10,921  $25,851  Severance charges, net1 1,537  32  1,667  117  Adjusted EBIT 11,436  20,349  12,588  25,968  Depreciation and amortization 5,475  5,518  10,906  10,932  Adjusted EBITDA $16,911  $25,867  $23,494  $36,900            Quest Integrity         Operating income $689  $9,324  $6,795  $10,968  Severance charges, net1 140  —  140  —  Adjusted EBIT 829  9,324  6,935  10,968  Depreciation and amortization 887  999  1,773  1,920  Adjusted EBITDA $1,716  $10,323  $8,708  $12,888            Corporate and shared support services         Operating loss $(19,694) $(26,134) $(47,604) $(51,561) Professional fees and other2 512  3,715  3,057  8,820  Legal costs3 446  15  1,696  279  Severance charges, net1 473  (58) 521  (37) Adjusted EBIT (18,263) (22,462) (42,330) (42,499) Depreciation and amortization 1,370  1,461  2,778  2,895  Non-cash share-based compensation costs 1,416  3,648  2,946  6,082  Adjusted EBITDA $(15,477) $(17,353) $(36,606) $(33,522) ___________________1 Relates to severance charges incurred associated with the OneTEAM program, including international restructuring under the OneTEAM program for the three and six months ended June 30, 2020 and June 30, 2019. Also includes severance charges due to the impact of COVID-19 for the three and six months ended June 30, 2020.2 For the three and six months ended June 30, 2020, includes $0.2 million and $2.0 million, respectively, associated with the OneTEAM program (exclusive of restructuring costs). For the three and six months ended June 30, 2019, includes $2.7 million and $5.9 million, respectively, associated with the OneTEAM program (exclusive of restructuring costs).3 For the three months ended June 30, 2020, primarily relates to costs associated with an accrued legal settlement. For the six months ended June 30 2020, primarily relates to costs associated with international legal and internal control review matters. For the three and six months ended June 30, 2019, primarily relates to intellectual property legal defense costs associated with Quest Integrity.    Contact:  Kevin Smith  Senior Director, Investor Relations  (281) 388-5551