SUGAR LAND, Texas - Team, Inc. (NYSE: TISI), a provider of specialized industrial services, has announced an amendment to its asset-based lending (ABL) credit facility that enhances its financial flexibility. The amendment includes terms that extend the maturity of its loans and reduce the interest rate.
The revised credit agreement with Eclipse Business Capital LLC adjusts the $130 million revolving credit facility and the $27.4 million term loan, collectively known as the Eclipse Loans. The maturity date for these loans, previously set for August 11, 2025, has been extended to September 30, 2027. Additionally, the interest rate spread adjustment has been lowered, though the exact figures were not disclosed.
The amendment also modifies the terms of the $35 million delayed draw term loan (DDTL) provided by funds managed by J.F. Lehman & Company and Corre Partners Management, LLC, extending its maturity to the same date as the Eclipse Loans.
Furthermore, the borrowing base advance rate under the revolving credit facility has been increased, reflecting the company’s improved financial and operating performance. This adjustment is part of the broader amendment, which also stipulates that the $7.5 million minimum availability covenant will only be tested if the fixed charge coverage ratio is not met.
Keith D. Tucker, TEAM’s Chief Executive Officer, expressed satisfaction with the amended credit facility, attributing the favorable terms to the company’s progress over the last two years. Tucker highlighted the balance sheet strengthening and increased borrowing capacity as pivotal for the company’s ongoing efforts to enhance its capital structure.
The announcement comes as Team, Inc. continues to deliver a range of mechanical, heat-treating, and inspection services across more than 15 countries. The company emphasizes safety, reliability, and operational efficiency as key benefits to its clients.
This financial restructuring is based on a press release statement and is intended to provide Team, Inc. with more leeway to pursue its business goals. The company's ability to secure improved lending terms may indicate confidence from its lenders in its financial trajectory and operational strategies.
InvestingPro Insights
Team, Inc.'s (NYSE: TISI) recent amendment to its credit facility aligns with its current financial position and market performance. According to InvestingPro data, the company has a market capitalization of $67.01 million USD, reflecting its position as a small-cap industrial services provider.
The company's efforts to improve its financial flexibility through the credit facility amendment are particularly significant given two key InvestingPro Tips: TISI "operates with a significant debt burden" and "may have trouble making interest payments on debt." These insights underscore the importance of the company's move to extend loan maturities and reduce interest rates.
Despite these challenges, TISI has shown strong recent market performance. InvestingPro data reveals a remarkable 106.1% price total return over the past six months, and a 113.81% return over the last year. This positive momentum is further supported by the InvestingPro Tip indicating a "strong return over the last three months."
It's worth noting that while TISI has demonstrated impressive short-term gains, the company faces long-term profitability challenges. An InvestingPro Tip points out that TISI is "not profitable over the last twelve months," which is reflected in its negative P/E ratio of -1.21.
For investors seeking a more comprehensive analysis, InvestingPro offers additional insights with 11 more tips available for TISI, providing a deeper understanding of the company's financial health and market position.
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