DISCONTINUED OPERATIONS

3 Months Ended

Mar. 31, 2023

Discontinued Operations and Disposal Groups [Abstract]

On November 1, 2022, we completed the Quest Integrity Transaction with Baker Hughes for an aggregate purchase price of approximately $279.0 million (reflecting certain estimated 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 – Description of Business and Basis of Presentation for additional details regarding our operating segments, IHT and MS.

Our condensed consolidated statements of operations for three months ended March 31, 2022 report discontinued operations separate from continuing operations. Our condensed consolidated statements of comprehensive loss, statements of shareholders’ equity and statements of cash flows for the three months ended March 31, 2022 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 the reconciliation of the major line items consisting of pretax income from discontinued operations to the after-tax income from discontinued operations (in thousands):


	Three Months Ended March 31, 2022 (unaudited)
Major classes of line items constituting income (loss) from discontinued operations
Revenues	$	29,540
Operating expenses	(15,570)
Selling, general and administrative expenses	(7,766)

Interest expense, net	(26)
Other expense	(477)
Income from discontinued operations before income taxes	5,701
Benefit from income taxes	170
Net income from discontinued operations	$	5,871

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


	Three Months Ended March 31, 2022
	(unaudited)
Cash flows provided by operating activities of discontinued operations:
Depreciation and amortization	$	577



Cash flows provided by investing activities of discontinued operations:
Capital expenditures	$	931

Quest Integrity had $0.3 million of accrued capital expenditures as of March 31, 2022, which were excluded from the condensed consolidated statement of cash flows for the three months ended March 31, 2022.