DISCONTINUED OPERATIONS

12 Months Ended

Dec. 31, 2022

Discontinued Operations and Disposal Groups [Abstract]

DISCONTINUED OPERATIONS

DISCONTINUED OPERATIONS

On November 1, 2022, we completed the Quest Integrity Transaction with Baker Hughes for an aggregate purchase price of approximately $279.0 million, after certain post-closing adjustments, in accordance with the Sale Agreement. We used approximately $238.0 million of the net proceeds from the sale of Quest Integrity to pay down $225.0 million of our term loan debt, and to pay certain fees associated with that repayment and related accrued interest, with the remainder reserved for general corporate purposes, thereby reducing our future debt service obligations and leverage, and improving our liquidity. Quest Integrity previously represented a reportable segment. Following the completion of the Quest Integrity Transaction, we now operate in two segments, IHT and MS. Refer to Note 1 – Summary of Significant Accounting Policies and Practices for additional details regarding the Quest Integrity Transaction.

Our consolidated balance sheets and consolidated statements of operations report discontinued operations separate from continuing operations. Our consolidated statements of comprehensive income (loss), statements of shareholders’ equity and statements of cash flows combine continuing and discontinued operations. A summary of financial information related to our discontinued operations is presented in the tables below.

The table below represents major line items constituting net income (loss) from discontinued operations to the after-tax income from discontinued operations (in thousands):

	December 31,
	2022		2021
Major classes of line items constituting net income (loss) from discontinued operations
Revenues	$	101,418	$	80,356
Operating expenses	(45,044)		(43,616)
Selling, general and administrative expenses	(32,230)		(26,663)
Goodwill impairment charge	—		(8,795)
Restructuring and other related charges, net	—		(381)
Interest expense, net	(108)		(230)
Other (expense) income	(4,390)		591
Income before income taxes	19,646		1,262
Gain on sale of Quest transaction	203,351		—
Income before income taxes	222,997		1,262
Provision for income taxes	(2,831)		(2,436)
Net income (loss) from discontinued operations	$	220,166	$	(1,174)

The table below represents the reconciliation of the major classes of assets and liabilities of discontinued operations to amounts presented separately in the consolidated balance sheet as of December 31, 2021 (in thousands). We completed the sale of Quest Integrity on November 1, 2022, as a result there were no assets or liabilities in discontinued operations as of December 31, 2022.

	December 31,
	2021
Carrying amount of major classes of assets included as part of discontinued operations:
Cash and cash equivalents	$	10,122
Accounts receivable, net	20,499
Prepaid expenses and other current assets	3,805
Property, plant and equipment, net	15,879
Goodwill and intangible assets, net	26,823
Other classes of assets that are not major	5,968
Total assets associated with discontinued operations	$	83,096
Carrying amounts of major classes of liabilities included as part of discontinued operations:
Accounts payable	$	2,125
Income tax payable	1,939
Other accrued liabilities	9,363
Operating lease obligations	2,368
Other classes of liabilities that are not major	601
Total liabilities associated with discontinued operations	$	16,396

The assets and liabilities in discontinued operations are measured at the lower of their carrying value and fair value less cost to sell. During the years ended December 31, 2022 and December 31, 2021, it was not necessary to write-down any assets or liabilities attributable to the disposal group in discontinued operations to fair value, less costs to sell.

Quest Integrity had $0.1 million of accrued capital expenditures as of December 31, 2021, which is excluded from the consolidated statements of cash flows until paid.

The following table presents the depreciation and amortization and capital expenditures of Quest Integrity (in thousands):

	December 31,
	2022		2021
Cash flows provided by operating activities of discontinued operations:
Depreciation and amortization	$	1,141	$	2,616
Cash flows provided by investing activities of discontinued operations:
Capital expenditures	$	4,146	$	3,500