What changed in this filing

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Item 1. Financial Statements

2025-08-12 compared with 2025-05-12 · 188 added, 128 removed, 498 unchanged (39% of the section changed)

3 unchanged sentences

(in thousands, except share and per share data)

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

ASSETS (unaudited)

31 unchanged sentences

Common stock, par value $ 0.30 per share, 12,000,000 shares authorized;

4,493,391 and 4,493,338 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively

4,498,932 and 4,493,338 shares issued and outstanding at June 30, 2025 and December 31, 2024, respectively

Additional paid-in capital 460,434 460,186

8 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

Revenues $ 248,026 $ 228,618 $ 446,681 $ 428,218

2 unchanged sentences

Selling, general and administrative expenses 55,986 52,395 109,255 107,512

Operating loss ( 6,003 ) ( 6,386 )

Operating income 12,103 11,159 6,100 4,773

Interest expense, net ( 11,896 ) ( 11,909 ) ( 23,332 ) ( 24,007 )

11 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF

COMPREHENSIVE LOSS

COMPREHENSIVE INCOME (LOSS)

(in thousands)

Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

Net loss $ ( 4,266 ) $ ( 2,763 ) $ ( 33,984 ) $ ( 19,958 )

4 unchanged sentences

Amortization of net actuarial loss

94 79 181 158

Other comprehensive income (loss), before tax 7,114 ( 243 ) 9,224 ( 3,018 )

Tax provision attributable to other comprehensive income (loss)

( 108 ) ( 5 ) ( 152 ) ( 5 )

Other comprehensive income (loss), net of tax 7,006 ( 248 ) 9,072 ( 3,023 )

Total comprehensive loss $ ( 27,652 ) $ ( 19,970 )

Total comprehensive income (loss) $ 2,740 $ ( 3,011 ) $ ( 24,912 ) $ ( 22,981 )

See accompanying notes to unaudited condensed consolidated financial statements.

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Balance at March 31, 2025 4,493 $ 1,348 $ 460,133 $ ( 445,385 ) $ ( 42,063 ) $ ( 25,967 )

Net loss — — — ( 4,266 ) — ( 4,266 )

Net settlement of vested stock awards 6 2 ( 65 ) — — ( 63 )

Foreign currency translation adjustment, net of tax — — — — 6,904 6,904

Defined benefit pension plans, net of tax — — — — 102 102

Non-cash compensation — — 366 — — 366

Balance at June 30, 2025 4,499 $ 1,350 $ 460,434 $ ( 449,651 ) $ ( 35,057 ) $ ( 22,924 )

Balance at December 31, 2023 4,415 $ 1,315 $ 458,614 $ ( 377,401 ) $ ( 36,932 ) $ 45,596

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Balance at March 31, 2024 4,415 $ 1,325 $ 459,269 $ ( 394,596 ) $ ( 39,707 ) $ 26,291

Net loss — — — ( 2,763 ) — ( 2,763 )

Net settlement of vested stock awards 7 2 ( 19 ) — — ( 17 )

Foreign currency translation adjustment, net of tax — — — — ( 291 ) ( 291 )

Defined benefit pension plans, net of tax — — — — 43 43

Non-cash compensation — — 612 — — 612

Balance at June 30, 2024 4,422 $ 1,327 $ 459,862 $ ( 397,359 ) $ ( 39,955 ) $ 23,875

See accompanying notes to unaudited condensed consolidated financial statements.

2 unchanged sentences

(in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from operating activities:

11 unchanged sentences

Loss on asset disposal

Non-cash compensation costs (credit)

Non-cash compensation costs 313 1,277

Other, net ( 38 ) ( 195 )

6 unchanged sentences

Income taxes 216 1,248

Net cash provided by (used in) operating activities

( 28,661 ) 1,886

Net cash used in operating activities ( 32,005 ) ( 4,466 )

Cash flows from investing activities:

Capital expenditures ( 4,316 ) ( 5,759 )

Proceeds from disposal of assets — 139

Net cash used in investing activities ( 4,316 ) ( 5,620 )

5 unchanged sentences

Borrowings under First Lien Term Loan

Payments under First Lien Term Loan ( 438 ) —

Payments under ME/RE Loans ( 23,427 ) ( 1,421 )

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We also believe that we are unique in our ability to provide these services in three distinct customer demand profiles:

(i) turnaround or project services, (ii) call-out services, and (iii) nested or run-and-maintain services.

(i) turnaround or project services, (ii) callout services, and (iii) nested or run-and-maintain services.

IHT provides conventional and advanced non-destructive testing services primarily for the process, pipeline and power sectors, pipeline integrity management services, and field heat treating services, as well as associated engineering and condition assessment services.

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• Aerospace and Defense.

Recent Refinancing Transactions .

On March 12, 2025, we entered into certain debt refinancing transactions with our existing and new lenders (collectively, the “Refinancing Transactions”).

Refer to Note 10 - Debt to the unaudited condensed consolidated financial statements for additional details.

Compliance with NYSE listing standards.

On March 14, 2025, the Company received notice from the NYSE that the Company had regained compliance with the NYSE continued listing standards.

Specifically, the Company resolved its prior non-compliance with the quantitative listing standards described in Section 802.01B of the NYSE Listed Company Manual.

Basis of presentation.

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Geographic area (in thousands):

Three Months Ended March 31, 2025

Three Months Ended June 30, 2025

United States Canada Other Countries Total

2 unchanged sentences

Total $ 184,286 $ 25,424 $ 38,316 $ 248,026

Three Months Ended March 31, 2024

Three Months Ended June 30, 2024

United States Canada Other Countries Total

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Total $ 166,540 $ 22,798 $ 39,280 $ 228,618

Revenue by Operating segment and service type (in thousands):

Three Months Ended March 31, 2025

Six Months Ended June 30, 2025

United States Canada Other Countries Total

IHT $ 208,384 $ 22,224 $ 6,003 $ 236,611

MS 133,276 15,407 61,387 210,070

Total $ 341,660 $ 37,631 $ 67,390 $ 446,681

Six Months Ended June 30, 2024

United States Canada Other Countries Total

IHT $ 187,287 $ 19,220 $ 6,175 $ 212,682

MS 132,130 15,967 67,439 215,536

Total $ 319,417 $ 35,187 $ 73,614 $ 428,218

Operating segment and service type (in thousands):

Three Months Ended June 30, 2025

Non-Destructive Evaluation and Testing Services Repair and Maintenance Services Heat Treating Other Total

2 unchanged sentences

Total $ 100,637 $ 117,105 $ 22,071 $ 8,213 $ 248,026

Three Months Ended March 31, 2024

Three Months Ended June 30, 2024

Non-Destructive Evaluation and Testing Services Repair and Maintenance Services Heat Treating Other Total

2 unchanged sentences

Total $ 90,113 $ 112,875 $ 17,707 $ 7,923 $ 228,618

For additional information on our reportable operating segments, refer to Note 14 - Segment Disclosures .

Six Months Ended June 30, 2025

Non-Destructive Evaluation and Testing Services Repair and Maintenance Services Heat Treating Other Total

IHT $ 185,081 $ 52 $ 38,294 $ 13,184 $ 236,611

MS — 208,341 338 1,391 210,070

Total $ 185,081 $ 208,393 $ 38,632 $ 14,575 $ 446,681

Six Months Ended June 30, 2024

Non-Destructive Evaluation and Testing Services Repair and Maintenance Services Heat Treating Other Total

IHT $ 171,123 $ 147 $ 30,943 $ 10,469 $ 212,682

MS — 211,736 355 3,445 215,536

Total $ 171,123 $ 211,883 $ 31,298 $ 13,914 $ 428,218

For additional information on our reportable segments, refer to Note 14 - Segment Disclosures .

Remaining performance obligations.

As permitted by ASC 606, Revenue from Contracts with Customers , we have elected not to disclose information about remaining performance obligations where (i) the performance obligation is part of a contract that has an original expected duration of one year or less or (ii) when we recognize revenue from the satisfaction of the performance obligation in accordance with the right-to-invoice practical expedient, which permits us to recognize revenue in the amount to which we have a right to invoice the customer if that amount corresponds directly with the value to the customer of our performance completed to date.

As most of our contracts with customers are short-term in nature and billed on a time and material basis, there were no material amounts of remaining performance obligations as of March 31, 2025 and December 31, 2024.

ACCOUNTS RECEIVABLE

A summary of accounts receivable as of March 31, 2025 and December 31, 2024 is as follows (in thousands):

March 31, 2025 December 31, 2024

A summary of accounts receivable as of June 30, 2025 and December 31, 2024 is as follows (in thousands):

June 30, 2025 December 31, 2024

Trade accounts receivable $ 162,254 $ 145,743

3 unchanged sentences

The following table shows a rollforward of the allowance for credit losses (in thousands):

March 31, 2025

June 30, 2025

Balance at beginning of period $ 3,271

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Balance at end of period $ 3,667

A summary of inventory as of March 31, 2025 and December 31, 2024 is as follows (in thousands):

March 31, 2025 December 31, 2024

A summary of inventory as of June 30, 2025 and December 31, 2024 is as follows (in thousands):

June 30, 2025 December 31, 2024

Raw materials $ 10,115 $ 9,098

2 unchanged sentences

Total $ 41,539 $ 37,874

PREPAID AND OTHER CURRENT ASSETS

A summary of prepaid expenses and other current assets as of March 31, 2025 and December 31, 2024 is as follows (in thousands):

March 31, 2025 December 31, 2024

PREPAID EXPENSES AND OTHER CURRENT ASSETS

A summary of prepaid expenses and other current assets as of June 30, 2025 and December 31, 2024 is as follows (in thousands):

June 30, 2025 December 31, 2024

Insurance receivable $ 39,000 $ 39,000

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The prepaid expenses primarily relate to prepaid insurance and other expenses that have been paid in advance of the coverage period.

Other current assets include other receivables, software implementation costs, and deferred financing charges.

Other current assets include other receivables, current portion of software implementation costs, and deferred financing charges.

PROPERTY, PLANT AND EQUIPMENT

A summary of property, plant and equipment as of March 31, 2025 and December 31, 2024 is as follows (in thousands):

March 31, 2025 December 31, 2024

A summary of property, plant and equipment as of June 30, 2025 and December 31, 2024 is as follows (in thousands):

June 30, 2025 December 31, 2024

Land $ 4,006 $ 4,006

9 unchanged sentences

Property, plant and equipment, net $ 112,247 $ 112,835

Included in the table above are assets under finance leases of $ 8.3 million and $ 7.7 million as of March 31, 2025 and December 31, 2024, respectively, and related accumulated amortization of $ 3.4 million and $ 3.2 million as of March 31, 2025 and December 31, 2024, respectively.

Depreciation expense for the three months ended March 31, 2025 and 2024 was $ 4.7 million and $ 5.3 million, respectively, of which $ 3.1 million and $ 3.6 million, respectively, was included in “Operating expenses” and $ 1.6 million and $ 1.8 million, respectively, was included in “Selling, general and administrative expenses” on our condensed consolidated statements of operations.

Included in the table above are assets under finance leases of $ 10.8 million and $ 7.7 million as of June 30, 2025 and December 31, 2024, respectively, and related accumulated amortization of $ 3.7 million and $ 3.2 million as of June 30, 2025 and December 31, 2024, respectively.

Depreciation expense for the three and six months ended June 30, 2025 and 2024 is included in the table below (in thousands):

Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

Depreciation expense:

Amount included in operating expenses $ 3,094 $ 3,487 $ 6,179 $ 7,047

Amount included in SG&A expenses 1,646 1,735 3,278 3,487

Total depreciation expense $ 4,740 $ 5,222 $ 9,457 $ 10,534

INTANGIBLE ASSETS

A summary of intangible assets as of March 31, 2025 and December 31, 2024 is as follows (in thousands):

March 31, 2025

A summary of intangible assets as of June 30, 2025 and December 31, 2024 is as follows (in thousands):

June 30, 2025

Amount Accumulated

13 unchanged sentences

Intangible assets $ 184,745 $ ( 134,502 ) $ 50,243

Amortization expense of intangible assets for the three months ended March 31, 2025 and 2024 was $ 3.1 million and $ 3.1 million, respectively.

Amortization expense of intangible assets for the three months ended June 30, 2025 and 2024 was $ 3.1 million and $ 3.1 million, respectively.

Amortization expense of intangible assets for the six months ended June 30, 2025 and 2024 was $ 6.2 million and $ 6.2 million, respectively.

Amortization expense of intangible assets is included in “Selling, general and administrative expenses” on our condensed consolidated statements of operations.

The weighted-average amortization period for intangible assets subject to amortization was 13.9 years and 13.8 years, respectively as of March 31, 2025 and December 31, 2024.

The weighted-average amortization period as of March 31, 2025 and December 31, 2024 is 13.9 years for customer relationships, 13.9 years and 13.8 years, respectively for trade names and 10.0 years for technology.

The weighted-average amortization period for intangible assets subject to amortization was 13.9 years and 13.8 years, respectively as of June 30, 2025 and December 31, 2024.

OTHER ACCRUED LIABILITIES

A summary of other accrued liabilities as of March 31, 2025 and December 31, 2024 is as follows (in thousands):

March 31, 2025 December 31, 2024

A summary of other accrued liabilities as of June 30, 2025 and December 31, 2024 is as follows (in thousands):

June 30, 2025 December 31, 2024

Legal and professional accruals $ 44,731 $ 44,285

10 unchanged sentences

Insurance accruals primarily relate to workers compensation cost.

Property, sales and other non-income related taxes include accruals for items such as sales and use tax,

property tax, and other related tax accruals.

Property, sales and other non-income related taxes include accruals for items such as sales and use tax, property tax, and other related tax accruals.

Accrued interest relates to the interest accrued on our long-term debt.

Other accruals include various business expense accruals.

We recorded an income tax provision of $ 0.2 million for the three months ended March 31, 2025, compared to a provision of $ 0.1 million for the three months ended March 31, 2024.

The effective tax rate, inclusive of discrete items, was a provision of 0.8 % for the three months ended March 31, 2025, compared to a provision of 0.4 % for the three months ended March 31, 2024.

The increase in effective tax rate for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 is due to the mix of pretax income in non-valuation allowance jurisdictions and pretax losses in valuation allowance jurisdictions, along with changes in permanent differences.

The impact is a larger increase in income tax expense as compared to pretax income resulting in an increase in effective tax rate.

Recent Refinancing Transactions.

On March 12, 2025, we entered into the Refinancing Transactions (described in further detail below) that included the entry into a new First Lien Term Loan Credit Agreement (described below) with the initial proceeds therefrom utilized to repay loans (together with any accrued interest and prepayment premium) outstanding under our 2022 ABL Credit Agreement (defined below) and the Existing A&R Term Loan Agreement (defined below).

The completion of the Refinancing Transactions lowered our blended cost of capital, extended our term loan maturities out to 2030 and improved lending covenants.

As of March 31, 2025 and December 31, 2024, our total long-term debt and finance lease obligations are summarized as follows (in thousands):

March 31, 2025 December 31, 2024

We recorded an income tax provision of $ 1.0 million and $ 1.2 million for the three and six months ended June 30, 2025, compared to a provision of $ 1.5 million and $ 1.5 million for the three and six months ended June 30, 2024.

The effective tax rate, inclusive of discrete items, was a provision of 29.9 % for the three months ended June 30, 2025, compared to a provision of 114.0 % for the three months ended June 30, 2024.

For the six months ended June 30, 2025, our effective tax rate, inclusive of discrete items, was a provision of 3.7 %, compared to a provision of 8.4 % for the six months ended June 30, 2024.

The decrease in effective tax rate for the three and six months ended June 30, 2025 compared to the three and six months ended June 30, 2024 is due to the mix of pretax income in non-valuation allowance jurisdictions and pretax losses in valuation allowance jurisdictions, along with changes in permanent differences.

The impact is a smaller increase in income tax expense as compared to pretax income resulting in a decrease in effective tax rate.

On July 4, 2025, the “One Big Beautiful Bill Act” (the “Act”) was enacted into law.

The Act includes changes to U.S.

tax law with varying effective dates, with certain provisions effective in 2025 and others implemented through 2027.

currently assessing its impact on our consolidated financial statements.

Additional disclosures may be provided in future periods as the impact of the legislation is determined.

As of June 30, 2025 and December 31, 2024, our total long-term debt and finance lease obligations are summarized as follows (in thousands):

June 30, 2025 December 31, 2024

2022 ABL Credit Agreement

14 unchanged sentences

2022 ABL Credit Facility

On March 12, 2025, using a portion of the proceeds from the Initial First Lien Term Loans (defined below), we fully paid off the delayed draw term loan of $ 35.0 million (the “Corre Delayed Draw Term Loan”) originally provided by Corre Partners Management, LLC (“Corre”) and certain of its affiliates, and the ME/RE Loans (described below) of $ 22.3 million provided by Eclipse (defined below) previously outstanding under the 2022 ABL Credit Agreement (as defined below).

On March 12, 2025, we entered into Amendment No.

6 (“ABL Amendment No.

6”) to that certain credit agreement dated as of February 11, 2022, with the lender parties thereto and Eclipse Business Capital, LLC, a Delaware limited liability company, as agent (“Eclipse”) (such agreement, as amended by Amendment No.1 dated as of May 6, 2022, Amendment No.2 dated as of November 1, 2022, Amendment No.3 dated as of June 16, 2023 (“ABL Amendment No.3”), Amendment No.4 dated as of March 6, 2024, Amendment No.5 dated as of September 30, 2024 and ABL Amendment No.6, the “2022 ABL Credit Agreement”).

ABL Amendment No.6 amended the 2022 ABL Credit Agreement to, among other things,

(i) permit the entry of the Company into the First Lien Term Loan Agreement (defined below), the borrowing of the First Lien Term Loans thereunder and the granting of liens with respect thereto;

(ii) make conforming changes to align the 2022 ABL Credit Agreement with certain terms of the First Lien Term Loan Agreement and the Second A&R Second Lien Term Loan Agreement (defined below), and

(iii) reflect the payoff of the term loan tranches previously outstanding under the 2022 ABL Credit Agreement prior to March 12, 2025 as described above.

On February 11, 2022, we entered into a credit agreement, with the lender parties thereto, and Eclipse Business Capital, LLC, a Delaware limited liability company, as agent (“Eclipse”) (such agreement, as amended by Amendment No.1 dated as of May 6, 2022, Amendment No.2 dated as of November 1, 2022, Amendment No.3 dated as of June 16, 2023 (“ABL Amendment No.3”), Amendment No.4 dated as of March 6, 2024, Amendment No.5 dated as of September 30, 2024 and Amendment No.6 dated as of March 12, 2025, the “2022 ABL Credit Agreement”).

On March 12, 2025, using a portion of the proceeds from the Initial First Lien Term Loan (defined below), we fully repaid the delayed draw term loan of $ 35.0 million (the “Corre Delayed Draw Term Loan”) originally provided by Corre Partners Management, LLC (“Corre”) and certain of its affiliates, and the ME/RE Loans (described below) of $ 22.3 million provided by Eclipse and previously outstanding under the 2022 ABL Credit Agreement.

Available funding commitments to us under the 2022 ABL Credit Agreement, subject to certain conditions, include a revolving credit line in an amount of up to $ 130.0 million to be provided by certain affiliates of Eclipse, with a $ 35.0 million sublimit for swingline borrowings, and a $ 26.0 million sublimit for issuances of letters of credit (the “Revolving Credit Loans”).

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As of December 31, 2024, the Corre Delayed Draw Term Loan had a net carrying balance of $ 34.8 million, which consisted of the principal balance of $ 35.0 million less the unamortized balance of debt issuance cost of $ 0.2 million.

The actual interest rate at March 31, 2024 was 15.44 % and cash paid for interest was $ 1.4 million during the quarters ended March 31, 2025 and 2024.

The actual interest rate at June 30, 2024 was 15.44 % and cash paid for interest was $ 1.4 million and $ 2.7 million, respectively, during the six months ended June 30, 2025 and 2024.

The 2022 ABL Credit Agreement contains customary conditions to borrowings and covenants, as described in the 2022 ABL Credit Agreement.

As of March 31, 2025, we are in compliance with the covenants.

As of March 31, 2025, $ 9.4 million in letters of credit were issued under the 2022 ABL Credit Agreement.

As of June 30, 2025, we are in compliance with the covenants.

As of June 30, 2025, $ 9.4 million in letters of credit were issued under the 2022 ABL Credit Agreement.

Such amounts remain undrawn and are off-balance sheet.

On March 12, 2025, using a portion of the proceeds from the Initial First Lien Term Loans (defined below), we fully paid off the ME/RE Loans of $ 22.3 million provided to us pursuant to ABL Amendment No.3.

On March 12, 2025, using a portion of the proceeds from the Initial First Lien Term Loan, we fully repaid the ME/RE Loans of $ 22.3 million provided to us pursuant to ABL Amendment No.3.

ME/RE Loans were secured by a first priority lien and mortgage on certain real estate and machinery and equipment of the Company.

As of December 31, 2024, the ME/RE Loans had net carrying balance of $ 22.1 million, which consisted of the principal balance of $ 23.0 million less the unamortized balance of debt issuance cost of $ 0.9 million.

The actual and effective interest rates at March 31, 2024 were 11.19 % and 17.38 %, respectively.

Cash paid for interest during the quarters ended March 31, 2025 and 2024 was $ 0.6 million and $ 0.7 million, respectively.

The actual and effective interest rates at June 30, 2024 were 11.19 % and 17.38 %, respectively.

Cash paid for interest during the six months ended June 30, 2025 and 2024 was $ 0.6 million and $ 1.4 million, respectively.

First Lien Term Loan Agreement

On March 12, 2025, we entered into a First Lien Term Loan Credit Agreement (the “First Lien Term Loan Agreement”) with the lenders party thereto and HPS Investment Partners, LLC.

Available funding commitments include a $ 225.0 million senior secured first lien term loan (the “First Lien Term Loan”) consisting of a $ 175.0 million initial term loan tranche (the “Initial First Lien Term Loans”) and a $ 50.0 million delayed draw term loan tranche (the “First Lien Delayed Draw Term Loans”), which is available to be drawn from March 12, 2025 to June 30, 2027, subject to satisfying certain conditions, including pro forma compliance with a First Lien Net Leverage Ratio (as defined in the First Lien Term Loan Agreement) of 3.75 to 1.00 and Liquidity (as defined in the First Lien Term Loan Agreement) of not less than $ 40.0 million.

Available funding commitments include a $ 225.0 million senior secured first lien term loan (the “First Lien Term Loan”) consisting of a $ 175.0 million initial term loan tranche (the “Initial First Lien Term Loan”) and a $ 50.0 million delayed draw term loan tranche (the “First Lien Delayed Draw Term Loan”), which is available to be drawn from March 12, 2025 to June 30, 2027, subject to satisfying certain conditions, including pro forma compliance with a First Lien Net Leverage Ratio (as defined in the First Lien Term Loan Agreement) of 3.75 to 1.00 and Liquidity (as defined in the First Lien Term Loan Agreement) of not less than $ 40.0 million.

All outstanding amounts in respect of the First Lien Term Loan mature and become due and payable on March 12, 2030.

The Initial First Lien Term Loans borrowed under the First Lien Term Loan Agreement bear interest at an annual rate of the Secured Overnight Financing Rate (“SOFR”) for interest periods of one-, three- or six-months, at the Company’s election, plus a margin of 6.50 % per annum.

The Initial First Lien Term Loan borrowed under the First Lien Term Loan Agreement bear interest at an annual rate of the Secured Overnight Financing Rate (“SOFR”) for interest periods of one-, three- or six-months, at the Company’s election, plus a margin of 6.50 % per annum.

Beginning with the quarter ending September 30, 2025, the interest rate margin may vary from 7.00 % to 6.00 % depending on the First Lien Net Leverage Ratio.

The proceeds of the Initial First Lien Term Loans were used to redeem and repay the Corre Delayed Draw Term Loan and the ME/RE Loans under the 2022 ABL Credit Agreement and a portion of the outstanding balance of the A&R Term Loan Agreement (as defined below).

To the extent borrowed, the proceeds of the First Lien Delayed Draw Term Loans will be used to solely repay the obligations under the Second A&R Second Lien Term Loan Agreement (as defined below).

As of March 31, 2025, we have not drawn on the First Lien Delayed Draw Term Loans.

The terms of the Initial First Lien Term Loans are described in the table below (dollar amounts are presented in thousands):

The proceeds of the Initial First Lien Term Loan were used to redeem and repay the Corre Delayed Draw Term Loan and the ME/RE Loans under the 2022 ABL Credit Agreement and a portion of the outstanding balance of the Existing A&R Term

Loan Agreement (as defined below).

To the extent borrowed, the proceeds of the First Lien Delayed Draw Term Loan will be used solely to repay the obligations under the Second A&R Second Lien Term Loan Agreement (as defined below).

As of June 30, 2025, we have not drawn on the First Lien Delayed Draw Term Loan.

The terms of the Initial First Lien Term Loan are described in the table below (dollar amounts are presented in thousands):

Maturity date 3/12/2030

15 unchanged sentences

Further, the First Lien Term Loan Agreement includes certain events of default, the occurrence of which may require that we pay an additional 2.0 % interest on the outstanding loans and other obligations under the First Lien Term Loan Agreement.

As of March 31, 2025, we are in compliance with the covenants.

As of June 30, 2025, we are in compliance with the covenants.

A&R Term Loan Credit Agreement / Second A&R Second Lien Term Loan Credit Agreement

On March 12, 2025, we entered into a Second Amended and Restated Second Lien Term Loan Credit Agreement with the lenders party thereto and Cantor Fitzgerald Securities, as Agent (the “Second A&R Second Lien Term Loan Agreement”), which amended and restated the existing Amended and Restated Term Loan Credit Agreement, dated June 16, 2023 (the “Existing A&R Term Loan Agreement”).

The Existing A&R Term Loan Agreement (prior to the Refinancing Transactions) included a term loan credit agreement entered into on November 9, 2021, as amended through March 29, 2023 (the “Corre Uptiered Loan”), and an additional funding commitment, subject to certain conditions, consisting of a $ 57.5 million senior secured first lien term loan (the “Corre Incremental Term Loan”) provided by Corre and certain of its affiliates and comprised of a $ 37.5 million term loan tranche and a $ 20.0 million delayed draw tranche, of which $ 10.0 million remained undrawn at March 12, 2025.

On March 12, 2025, using a portion of the proceeds from the Initial First Lien Term Loans, we fully paid off the outstanding principal balance on the Corre Incremental Term Loan in the amount of $ 46.3 million and paid down $ 54.1 million of the outstanding principal balance on the Corre Uptiered Loan.

The remaining portion of the Corre Uptiered Loan of $ 93.9 million, together with certain fees and accrued interest, were rolled into the 2025 Second Lien Term Loans (defined below).

The Existing A&R Term Loan Agreement included a term loan credit agreement entered into on November 9, 2021, as amended through March 29, 2023 (the “Corre Uptiered Loan”), and an additional funding commitment, subject to certain conditions, consisting of a $ 57.5 million senior secured first lien term loan (the “Corre Incremental Term Loan”) provided by Corre and certain of its affiliates and comprised of a $ 37.5 million term loan tranche and a $ 20.0 million delayed draw tranche, of which $ 10.0 million remained undrawn at March 12, 2025.

On March 12, 2025, using a portion of the proceeds from the Initial First Lien Term Loan, we fully paid off the outstanding principal balance on the Corre Incremental Term Loan in the amount of $ 46.3 million and paid down $ 54.1 million of the outstanding principal balance on the Corre Uptiered Loan.

The remaining portion of the Corre Uptiered Loan of $ 93.9 million, together with certain fees and accrued interest, was rolled into the 2025 Second Lien Term Loans (defined below).

The Second A&R Second Lien Term Loan Agreement contains certain conditions to borrowings, events of default and affirmative and negative covenants and a financial covenant prohibiting the Company from exceeding a maximum First Lien Net Leverage Ratio (as defined in the Second A&R Second Lien Term Loan Agreement), tested at the end of each fiscal quarter, of 6.00 to 1.00.

Further, the Second A&R Second Lien Term Loan Agreement includes certain events of default, the occurrence of which may require that the Company pay an additional 2.0 % interest on the outstanding loans and other obligations under the Second A&R Second Lien Term Loan Agreement.

As of March 31, 2025, we are in compliance with the covenants.

Available funding commitments to the Company under the Second A&R Second Lien Term Loan Agreement, subject to certain conditions, include a $ 107.4 million second lien term loan (the “Second Lien Term Loans”), provided by Corre and certain of its affiliates, consisting of a $ 97.4 million term loan tranche (the “2025 Second Lien Term Loans”) and a $ 10.0 million delayed draw term loan tranche (the “Second Lien Delayed Draw Term Loans”) which is available to be drawn from March 12, 2025, until April 15, 2026, subject to satisfying certain conditions.

As of June 30, 2025, we are in compliance with the covenants.

Available funding commitments under the Second A&R Second Lien Term Loan Agreement, subject to certain conditions, include a $ 107.4 million second lien term loan (the “Second Lien Term Loans”), provided by Corre and certain of its affiliates, consisting of a $ 97.4 million term loan tranche (the “2025 Second Lien Term Loans”) and a $ 10.0 million delayed draw term loan tranche (the “Second Lien Delayed Draw Term Loans”) which is available to be drawn from March 12, 2025, until April 15, 2026, subject to satisfying certain conditions.

All outstanding amounts in respect of the Second Lien Term Loans mature and become due and payable on June 10, 2030.

To the extent borrowed, the proceeds of the Second Lien Delayed Draw Term Loans are permitted to be used by the Company for general working capital and liquidity purposes.

As of March 31, 2025, we have not drawn on the Second Lien Delayed Draw Term Loans.

As of June 30, 2025, we have not drawn on the Second Lien Delayed Draw Term Loans.

The Second Lien Term Loans bear interest at an annual rate of 13.5 % through the earlier of (i) September 30, 2026, and thereafter, if the outstanding principal balance of the Second Lien Term Loans exceeds 50 % of the principal balance at March 12, 2025, the interest rate will increase by 0.25 % quarterly, subject to a maximum rate of 14.5 % per annum, and (ii) the date on which the Second Lien Delayed Draw Term Loan is borrowed in full, in which case the interest rate will increase to the maximum rate of 14.5 % per annum.

18 unchanged sentences

Net carrying balance $ 98,065

1 Principal payments represent a percentage (ranges between 0 % and 0.25 % based on the First Lien Net Leverage Ratio) of the outstanding principal balance.

As of June 30, 2025 we are not making principal payments.

As of December 31, 2024, the Corre Incremental Term Loan had a net carrying balance of $ 39.8 million, which consisted of the principal balance of $ 46.6 million less the unamortized balance of debt issuance cost of $ 6.8 million.

The stated and effective interest rates at March 31, 2024 were 12.0 % and 22.96 %, respectively.

Cash paid for interest during the quarters ended March 31, 2025 and 2024 was $ 2.5 million and $ 1.4 million, respectively.

The stated and effective interest rates at June 30, 2024 were 12.0 % and 22.96 %, respectively.

Cash paid for interest during the six months ended June 30, 2025 and 2024 was $ 2.5 million and $ 2.9 million, respectively.

As of December 31, 2024, the Corre Uptiered Loan had a net carrying balance of $ 144.0 million, which consisted of the principal balance of $ 144.5 million less the unamortized balance of debt issuance cost of $ 0.5 million.

The stated and effective interest rates at March 31, 2024 were 13.5 % and 14.56 %, respectively.

Cash paid for interest during the quarters ended March 31, 2025 and 2024 was $ 2.7 million and $ 0.3 million, respectively.

As of March 31, 2025 and December 31, 2024, APSC Holdco II, L.P.

The stated and effective interest rates at June 30, 2024 were 13.5 % and 14.56 %, respectively.

Cash paid for interest during the six months ended June 30, 2025 and 2024 was $ 2.7 million and $ 1.4 million, respectively.

As of June 30, 2025 and December 31, 2024, APSC Holdco II, L.P.

held 500,000 warrants and certain affiliates of Corre collectively held 500,000 warrants, in each case providing for the purchase of one share of the Company’s common stock per warrant at an exercise price of $ 15.00 .

2 unchanged sentences

The warrants can be exercised by rendering cash or by means of a cashless option as set forth in the agreement.

Equipment Finance Loan

On March 6, 2024, we entered into agreements to sell various equipment to an equipment finance lender for $ 2.9 million and lease the equipment for monthly payments of $ 181 thousand over eighteen months .

The lease agreement provides for a bargain purchase option at the end of the lease term which we intend to exercise.

The Company determined that the transaction did not meet the criteria for sale-leaseback in accordance with ASC 842 , Leases and accounted for this arrangement as an equipment financing.

The assets subject to the transaction remain on our balance sheet and continue to depreciate in accordance with our depreciation policy.

Fair Value of Debt

3 unchanged sentences

(“1970 Group”) (such agreement, the “Substitute Insurance Reimbursement Facility Agreement”).

Under the Substitute Insurance Reimbursement Facility Agreement, the 1970 Group extended credit to us in the form of a substitute reimbursement facility (the “Substitute Reimbursement Facility”) to provide up to approximately $ 19.0 million of letters of credit on our behalf in support of our workers’ compensation, commercial automotive and general liability insurance policies.

As of March 31, 2025, we have $ 19.0 million of letters of credit outstanding under the Substitute Reimbursement Facility.

According to the provisions of ASC 470, Debt , the arrangement is a “Substitute Insurance Reimbursement Facility” limited to the amounts drawn under the letters of credit.

Under the Substitute Insurance Reimbursement Facility Agreement, the 1970 Group extended credit to us in the form of a substitute reimbursement facility (the “Substitute Reimbursement Facility”) of approximately $ 19.0 million of letters of credit on our behalf in support of our workers’ compensation, commercial automotive and general liability insurance policies.

As of June 30, 2025, we have $ 19.0 million of letters of credit outstanding under the Substitute Reimbursement Facility.

According to the provisions of ASC 470, Debt , the arrangement is a “Substitute Insurance Reimbursement Facility” limited to any amounts drawn under the letters of credit.

Therefore, until we use or draw on the Substitute Insurance Reimbursement Facility, the letters of credit are treated as an off-balance sheet credit arrangement.

The fees paid by us periodically under this arrangement are deferred and amortized to interest expense over the term of the arrangement.

As of March 31, 2025, we had approximately $ 1.0 million of unamortized deferred fees.

As of March 31, 2025, we had $ 12.8 million of unrestricted cash and cash equivalents and $ 4.0 million of restricted cash, including $ 2.8 million of restricted cash held as collateral for letters of credit and commercial card programs.

International cash balances included in total cash as of March 31, 2025 were $ 4.8 million, and approximately $ 1.1 million of such cash is restricted.

As of March 31, 2025, we had approximately $ 16.3 million of available borrowing capacity under our various credit agreements, consisting of $ 6.3 million available under the Revolving Credit Loans and $ 10.0 million available under the Incremental Delayed Draw Term Loan under the Second A&R Second Lien Term Loan Credit Agreement.

As of March 31, 2025, we had $ 30.5 million in letters of credit and $ 1.6 million in surety bonds outstanding.

As of June 30, 2025, we had approximately $ 0.5 million of unamortized deferred fees.

As of June 30, 2025, we had $ 16.6 million of unrestricted cash and cash equivalents and $ 4.1 million of restricted cash, including $ 2.8 million of restricted cash held as collateral for letters of credit and commercial card programs.

International cash balances included in total cash as of June 30, 2025 were $ 6.4 million, and approximately $ 1.1 million of such cash is restricted.

As of June 30, 2025, we had approximately $ 32.7 million of available borrowing capacity under our various credit agreements, consisting of $ 22.7 million available under the Revolving Credit Loans and $ 10.0 million available under the Second Lien Delayed Draw Term Loan under the Second A&R Second Lien Term Loan Credit Agreement.

As of June 30, 2025, we had $ 30.5 million in letters of credit and $ 2.0 million in surety bonds outstanding.

EMPLOYEE BENEFIT PLANS

We have a defined benefit pension plan covering certain United Kingdom employees (the “U.K.

The pension plan was frozen in 1994 and no new participants have been added since that date.

Net periodic pension credit includes the following components (in thousands):

Three Months Ended March 31,

(unaudited) (unaudited)

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

(unaudited) (unaudited) (unaudited) (unaudited)

Interest cost $ 714 $ 651 $ 1,386 $ 1,303

1 unchanged sentence

Amortization of prior service cost 8 8 16 16

Unrecognized net actuarial loss

Amortization of net actuarial loss 94 79 181 158

Net periodic pension credit $ ( 54 ) $ ( 102 ) $ ( 105 ) $ ( 215 )

Net pension credit is included in “Other (expense) income, net” on our condensed consolidated statements of operations.

Net pension credit is included in “Other income (expense), net” on our condensed consolidated statements of operations.

The expected long-term rate of return on invested assets is determined based on the weighted average of expected returns on asset investment categories for the U.K.

3 unchanged sentences

Shareholders’ Equity (Deficit) and Preferred Stock

As of March 31, 2025 there were 4,493,391 shares of our common stock outstanding and 12,000,000 shares authorized at $ 0.30 par value per share.

As of March 31, 2025 we had 500,000 authorized shares of preferred stock, none of which had been issued.

Accumulated Other Comprehensive Income (loss)

A summary of changes in accumulated other comprehensive loss included within shareholders’ equity is as follows (in thousands):

Three Months Ended

March 31, 2025 Three Months Ended

March 31, 2024

As of June 30, 2025 there were 4,498,932 shares of our common stock outstanding and 12,000,000 shares authorized at $ 0.30 par value per share.

As of June 30, 2025 we had 500,000 authorized shares of preferred stock, none of which had been issued.

Accumulated Other Comprehensive loss

A summary of changes in accumulated other comprehensive income (loss) included within shareholders’ equity is as follows (in thousands):

Six Months Ended

June 30, 2025 Six Months Ended

June 30, 2024

(unaudited) (unaudited)

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On May 16, 2024, the Texas First Court of Appeals issued a decision which vacated the trial court’s judgment and dismissed the case, holding that the trial court erred in refusing to dismiss the case on forum non conveniens grounds.

The plaintiff filed a motion with the Texas First Court of Appeals for rehearing and a motion for en banc reconsideration, which was denied by the Court of Appeals on October 3, 2024.

The plaintiff filed a motion with the Texas First Court of Appeals for rehearing and a motion for en banc reconsideration, which was

denied by the Court of Appeals on October 3, 2024.

The plaintiff did not seek review with the Texas Supreme Court.

1 unchanged sentence

District Court, Kansas District in Kansas City.

We currently have accrued a liability of $ 39.0 million as of March 31, 2025 in other accrued liabilities, and have recorded a related receivable from our third-party insurance providers in other current assets in the same amount.

We currently have accrued a liability of $ 39.0 million as of June 30, 2025 in other accrued liabilities, and have recorded a related receivable from our third-party insurance providers in other current assets in the same amount.

Such amounts are treated as non-cash operating activities.

4 unchanged sentences

Following ongoing compliance reviews of these funding assistance programs, we received notices stating noncompliance with the requirements of one of these funding assistance programs.

Accordingly, based on the assessments completed by the government appointed administrative authority, we previously had accrued $ 5.5 million as of December 31, 2023, to be repaid over an extended period related to this noncompliance.

However, during the year ended December 31, 2024, we successfully appealed $ 3.8 million of the assessment, which resulted in the reduction of the accrued liability to $ 1.7 million as of March 31, 2025.

Accordingly, for all matters discussed within this Note 13 - Commitments and Contingencies , we have accrued in the aggregate approximately $ 40.7 million as of March 31, 2025, of which approximately $ 1.7 million is not covered by our various insurance policies.

Accordingly, based on the assessments completed by the government appointed administrative authority, we previously had accrued $ 5.5 million as of December 31, 2023, to be potentially repaid over an extended period related to this alleged noncompliance.

Accordingly, for all matters discussed within this Note 13 - Commitments and Contingencies , we have accrued in the aggregate approximately $ 40.7 million as of June 30, 2025, of which approximately $ 1.7 million is not covered by our various insurance policies.

In addition to legal matters discussed above, we are subject to various lawsuits, claims and proceedings encountered in the normal conduct of business (“Other Proceedings”).

Management believes that based on its current knowledge and after

consultation with legal counsel that the Other Proceedings, individually or in the aggregate, will not have a material effect on our condensed consolidated financial statements.

Management believes that based on its current knowledge and after consultation with legal counsel that the Other Proceedings, individually or in the aggregate, will not have a material effect on our condensed consolidated financial statements.

SEGMENT DISCLOSURES

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Three Months Ended

March 31, 2025

June 30, 2025

(unaudited) (unaudited) (unaudited)

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Adjusted EBITDA $ 19,490 $ 14,986 $ 34,476

$ 11,624 $ 3,494 $ 15,118

Three Months Ended

March 31, 2024

June 30, 2024

(unaudited) (unaudited) (unaudited)

5 unchanged sentences

Adjusted EBITDA $ 15,589 $ 15,350 $ 30,939

Six Months Ended

June 30, 2025

(unaudited) (unaudited) (unaudited)

Revenues $ 236,611 $ 210,070 $ 446,681

Adjusted operating expenses 1

174,703 150,304 325,007

Adjusted selling, general and administrative expenses 2

30,794 41,286 72,080

Adjusted EBITDA $ 31,114 $ 18,480 $ 49,594

Six Months Ended

June 30, 2024

(unaudited) (unaudited) (unaudited)

Revenues $ 212,682 $ 215,536 $ 428,218

Adjusted operating expenses 1

158,359 150,447 308,806

Adjusted selling, general and administrative expenses 2

30,385 40,592 70,977

Adjusted EBITDA $ 23,938 $ 24,497 $ 48,435

_____________

1 Represent operating expenses excluding indirect depreciation and amortization, and severance cost.

2 unchanged sentences

Three Months Ended

(unaudited) (unaudited)

IHT $ 11,624 $ 8,349

MS 3,494 9,147

June 30, Six Months Ended

Segment adjusted EBITDA:

2025 2024 2025 2024

IHT $ 19,490 $ 15,589 $ 31,114 $ 23,938

MS 14,986 15,350 18,480 24,497

Total segment adjusted EBITDA 34,476 30,939 49,594 48,435

Segment depreciation and amortization

3 unchanged sentences

Corporate and shared support cost ( 13,814 ) ( 11,937 ) ( 27,399 ) ( 27,599 )

Consolidated operating loss ( 6,003 ) ( 6,386 )

Consolidated operating income 12,103 11,159 6,100 4,773

Interest expense ( 11,896 ) ( 11,909 ) ( 23,332 ) ( 24,007 )

Loss on debt extinguishment

— — ( 11,853 ) —

Other income (expense) ( 3,490 ) ( 541 ) ( 3,694 ) 821

1 unchanged sentence

Three Months Ended

(unaudited) (unaudited)

June 30, Six Months Ended

2025 2024 2025 2024

(unaudited) (unaudited) (unaudited) (unaudited)

Capital expenditures 1 :

IHT $ 1,671 $ 2,259 $ 3,129 $ 2,795

MS 1,277 620 1,944 1,645

Corporate and shared support services 304 51 318 51

4 unchanged sentences

Three Months Ended

(unaudited) (unaudited)

June 30, Six Months Ended

2025 2024 2025 2024

(unaudited) (unaudited) (unaudited) (unaudited)

Depreciation and amortization:

6 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

Depreciation and amortization:

6 unchanged sentences

SUBSEQUENT EVENTS

As of May 12, 2025, the filing date of this Quarterly Report on Form 10-Q, management evaluated the existence of events occurring subsequent to the quarter ended March 31, 2025 and determined that there were no events or transactions that would have a material impact on the Company’s results of operations or financial position .

T able of Contents

As of August 12, 2025, the filing date of this Quarterly Report on Form 10-Q, management evaluated the existence of events occurring subsequent to the quarter ended June 30, 2025 and determined that there were no events or transactions that would have a material impact on the Company’s results of operations or financial position .

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements