DISCONTINUED OPERATIONS

6 Months Ended

Jun. 30, 2023

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, 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. During the fourth quarter of 2022, we recorded total gain of $203.4 million, net of tax and working capital adjustments, on the sale of Quest Integrity. We settled the working capital adjustment in the second quarter of 2023. 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 IHT and MS operating segments.

Our condensed consolidated statements of operations for the three and six months ended June 30, 2022 report discontinued operations separate from continuing operations. Our condensed consolidated statements of comprehensive loss and statements of shareholders’ equity for the three and six months ended June 30, 2022 as well as statements of cash flows for the six months ended June 30, 2022 combine continuing and discontinued operations. A summary of financial information related to our discontinued operations is presented in the tables below.

The following table 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 June 30, 2022 (unaudited)		Six Months Ended June 30, 2022 (unaudited)
Major classes of line items constituting income (loss) from discontinued operations
Revenues	$	29,723	$	59,263
Operating expenses	(11,886)		(27,456)
Selling, general and administrative expenses	(9,823)		(17,589)
Interest expense, net	(4)		(30)
Other expense	(1,783)		(2,260)
Income from discontinued operations before income taxes	6,227		11,928
Benefit from income taxes	423		593
Net income from discontinued operations	$	6,650	$	12,521

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

	Six Months Ended June 30, 2022
	(unaudited)
Cash flows provided by operating activities of discontinued operations:
Depreciation and amortization	$	1,146
Cash flows provided by investing activities of discontinued operations:
Capital expenditures	$	2,585