TEAM INC

Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025

The following is a comparison of our results of operations for the three months ended March 31, 2026 to the three months ended March 31, 2025 (in thousands).

1 As of January 1, 2026, ECS, previously included in the MS segment, was moved to the IHT segment, refer to Note 15 - Segment Disclosure for more information.

NM - not meaningful

Revenues. Total revenues increased by $16.4 million, or 8.3%, from the prior year period and were favorably impacted by $3.2 million attributable to foreign exchange rates movements. Revenue for the IHT segment increased by $9.8 million, or 8.6%, compared to the prior year period, primarily driven by an increase in U.S. revenue of $6.5 million attributable to higher turnaround and capital projects activity, as well as increase in year-over-year callout and turnaround activities in Canada and other international regions of $3.3 million. MS segment revenue increased by $6.6 million, or 7.8%, compared to the prior year period, mainly due to higher turnaround activities and callout projects in the U.S., and higher revenue from projects in Canada and international areas.

Operating income (loss). Overall operating loss was $3.4 million in the 2026 period, a $2.6 million, or 43.8%, improvement compared to an operating loss of $6.0 million in the prior year period. This improvement was primarily driven by the increased revenue and cost management. IHT reported an increase in operating income of $0.2 million, or 1.7%, as compared to prior year due to job mix. MS operating loss decreased by $1.7 million, or 52.7%, as compared to the prior year period, primarily driven by the increased revenue in the U.S. and a reduction in operating losses in the U.S. and Canada. Corporate operating loss decreased by $0.8 million compared to the prior year period, primarily due to lower legal and professional services costs, partially offset by higher personnel costs in the current period.

For the three months ended March 31, 2026 and 2025, operating loss includes net expenses totaling $1.7 million and $3.0 million, respectively, that we do not believe are indicative of our core operating activities, as detailed in the table below (in thousands):

Excluding the impact of these identified non-core items in both periods, operating loss decreased year over year by $1.3 million, from $3.0 million to $1.7 million. See our non-GAAP reconciliation for additional details of our non-core expenses.

Interest expense, net. Interest expense, net decreased by $2.6 million for the three months ended March 31, 2026, compared to the same period in 2025. The decrease was primarily attributable to the refinancing completed in March 2025, in which we replaced our existing credit facilities with new facilities at lower interest rates. In addition, we renegotiated the terms of our ABL Revolving Credit Loans, resulting in further reductions in applicable interest rates. The decrease was also due to lower overall debt balances compared to the prior period.

Cash interest paid for the three months ended March 31, 2026 and 2025 was $2.5 million and $8.9 million, respectively.

Loss on debt extinguishment. During the three months ended March 31, 2025, we completed refinancing transactions that resulted in the repayment of our existing loans. As a result, we recognized a loss on debt extinguishment of $11.9 million which included the write-off of unamortized debt issuance costs.

Other income (expense), net. The overall change of $1.1 million in other income (expense), net, was primarily driven by foreign currency transaction losses in the current year period reflecting the effects of positive fluctuations in the value of the U.S. dollar relative to the foreign currencies to which we have exposure.

Taxes. The provision for income tax was $0.0 million on the pre-tax loss of $11.3 million in the current year period compared to income tax expense of $0.2 million on the pre-tax loss of $29.5 million in the prior year period. The effective tax rate was a provision of 0.0% for the three months ended March 31, 2026, compared to a provision of 0.8% for the three months ended March 31, 2025. The effective tax rate differs from the prior year period due to changes in the valuation allowance.

Non-GAAP Financial Measures and Reconciliations

We use supplemental non-GAAP financial measures which are derived from the consolidated financial information, including adjusted net income (loss); adjusted net income (loss) per share; earnings before interest and taxes (“EBIT”); adjusted EBIT; adjusted earnings before interest, taxes, depreciation, and amortization (“adjusted EBITDA”) and free cash flow to supplement financial information presented on a U.S. GAAP basis.

We define adjusted net income (loss) and adjusted net income (loss) per share to exclude the following items: non-routine legal costs and settlements, non-routine professional fees, loss on debt extinguishment, certain severance charges, non-routine write-off of assets and certain other items that we believe are not indicative of core operating activities. Consolidated adjusted EBIT, as defined by us, excludes the costs excluded from adjusted net income (loss) as well as income tax expense (benefit), interest charges, foreign currency (gain) loss, pension credit, and items of other (income) expense. Consolidated adjusted EBITDA further excludes depreciation, amortization, and non-cash share-based compensation costs from consolidated adjusted EBIT. Segment adjusted EBIT is equal to segment operating income (loss) excluding costs associated with non-routine legal costs and settlements, non-routine professional fees, certain severance charges, and certain other items as determined by management. Segment adjusted EBITDA further excludes depreciation, amortization, and non-cash share-based compensation costs from segment adjusted EBIT. Free cash flow is defined as net cash provided by (used in) operating activities minus capital expenditures paid in cash.

We believe these non-GAAP financial measures are useful to both management and investors in their analysis of our financial position and results of operations. In particular, adjusted net income (loss), adjusted net income (loss) per share, consolidated adjusted EBIT, and consolidated adjusted EBITDA are meaningful measures of performance which are commonly used by industry analysts, investors, lenders, and rating agencies to analyze operating performance in our industry, perform analytical comparisons, benchmark performance between periods, and measure our performance against externally communicated targets. Our segment adjusted EBITDA is also used as a basis for the Chief Operating Decision Maker (Chief Executive Officer) to evaluate the performance of our reportable segments. Free cash flow is used by our management and investors to analyze our ability to service and repay debt and return value directly to stakeholders.

Non-GAAP measures have important limitations as analytical tools because they exclude some, but not all, items that affect net earnings and operating income. These measures should not be considered substitutes for their most directly comparable U.S. GAAP financial measures and should be read only in conjunction with financial information presented on a GAAP basis. Further, our non-GAAP financial measures may not be comparable to similarly titled measures of other companies who may calculate non-GAAP financial measures differently, limiting the usefulness of those measures for comparative purposes. The liquidity measure of free cash flow does not represent a precise calculation of residual cash flow available for discretionary expenditures. Reconciliations of each non-GAAP financial measure to its most directly comparable U.S. GAAP financial measure are presented below.

The following tables set forth the reconciliation of adjusted net income (loss), EBIT and EBITDA to their most comparable U.S. GAAP financial measurements on a consolidated and segmented basis:

1 For the three months ended March 31, 2026, consists of $1.6 million related to support costs. Forthe three months ended March 31, 2025, consists of $2.0 million related to refinancing transactions.

2 For the three months ended March 31, 2026, includes $1.4 million related to customary severance costs associated with executive departures.

3 Represents pension cost (credit) for the U.K. pension plan based on the difference between the expected return on plan assets and the amount of the discounted pension liability. The pension plan was frozen in 1994 and no new participants have been added since that date.

1 For the three months ended March 31, 2026, consists of $1.6 million related to support costs. Forthe three months ended March 31, 2025, consists of $2.0 million related to refinancing transactions.

2 For the three months ended March 31, 2026, includes $1.4 million related to customary severance costs associated with executive departures.

3 Represents pension cost (credit) for the U.K. pension plan based on the difference between the expected return on plan assets and the amount of the discounted pension liability. The pension plan was frozen in 1994 and no new participants have been added since that date.

4 As of January 1, 2026, ECS, previously included in the MS segment, was moved to the IHT segment, refer to Note 15 - Segment Disclosure for more information.

Liquidity and Capital Resources

Financing for operations consists primarily of our 2022 ABL Credit Agreementand cash flows from our operations.

We have evaluated our liquidity within one year after the date of issuance of the accompanying condensed consolidated financial statements to assess the Company’s ability to fund its operations. Based upon such liquidity assessment, we believe that the Company’s current working capital, forecasted cash flows from operations, current and expected availability under our existing debt arrangements and capital expenditure financing is sufficient to fund our operations, service our indebtedness, and maintain compliance with our debt covenants for the next twelve months, and based on current expectations, the long-term. We based this assessment on assumptions that may prove to be inaccurate, and we could exhaust our available capital resources sooner than we expect in the event that we fail to meet our current financial performance expectations. See Note 10 - Debtin this Quarterly Report on Form 10-Q and Note 11 - Debt in our Annual Report on Form 10-K for additional details concerning our debt obligations.

We closely monitor the amounts and timing of our sources and uses of funds. Our ability to maintain a sufficient level of liquidity to fund our operations and meet our financial obligations will be dependent upon our future performance, which is subject to general economic conditions, industry cycles and financial, business and other factors affecting our operations, many of which are beyond our control.

Our ability to generate operating cash flow, sell assets, access capital markets or take any other action to improve our liquidity and manage our debt is subject to the risks described or referenced herein and other risks and uncertainties that exist in our industry, some of which we may not be able to anticipate at this time or control.

See Item 1A “Risk Factors” in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K and risk factors included within Cautionary Note Regarding Forward-Looking Statements above, for additional information.

As of March 31, 2026, we had approximately $40.5 million of available borrowing capacity under our various credit facilities, consisting of $30.5 million available under the 2022 ABL Credit Agreement and $10.0 million available under the Second A&R Second Lien term Loan Agreement (the availability period for the Second Lien Delayed Draw Term Loan expired on April 15, 2026 with no amounts drawn prior to the expiration date). In connection with the issuance of the Series B Preferred Stock and related warrants, we have access to up to $30.0 million in additional liquidity through September 2027 through a delayed draw mechanism, subject to certain conditions under the Purchase Agreement. Our principal uses of cash and liquidity are for working capital needs, capital expenditures and operations.

As of March 31, 2026, we were in compliance with our debt covenants. Our ability to maintain compliance with the financial covenants contained in our Credit Agreements is dependent upon our future operating performance and future financial condition, both of which are subject to various risks and uncertainties, as described elsewhere herein.

As of May 11, 2026, we had consolidated cash and cash equivalents of $11.2 million, excluding $4.2 million of restricted cash used mainly as collateral for letters of credit and commercial card programs, and approximately $24.8 million of undrawn availability under our various credit facilities, resulting in total liquidity of $36.0 million. We also have $30.0 million of Series B Delayed Draw availability as described above.

Refer to Note 10 - Debtfor additional information about our debt instruments.

Cash Flows

The following table summarizes cash flows from Operating, Investing and Financing activities (in thousands):

Cash and cash equivalents. Our cash and cash equivalents as of March 31, 2026 totaled $12.8 million, consisting of $8.7 million of unrestricted cash on hand, and $4.1 million of restricted cash. International cash balances as of March 31, 2026 were $6.5 million, and approximately $1.2 million of such cash is located in countries where currency or regulatory restrictions exist.

As of December 31, 2025, our cash and cash equivalents were $18.1 million, consisting of $14.1 million of unrestricted cash on hand and $4.0 million of restricted cash. International cash balances as of December 31, 2025 were $4.4 million, and approximately $1.2 million of such cash is restricted.

Our total debt and finance obligations were $306.5 million, of which $3.9 million was classified as current at March 31, 2026, compared to total debt of $297.2 million at December 31, 2025.

Cash flows attributable to our operating activities. Our largest source of operating cash inflow is cash collection from customers for work performed. The primary use of operating cash is to pay our suppliers, employees, tax authorities, and others.

Cash flows from operating activities are primarily generated from net income or loss adjusted for certain non-cash items which include depreciation and amortization, PIK interest, and amortization of debt issuance costs.

For the three months ended March 31, 2026, net cash used in operating activities was $9.1 million, an improvement of $19.6 million as compared to net cash used in operating activities of $28.7 million in the 2025 period. Changes in working capital items - such as the growth of receivables and payment of operating payables - are significant factors affecting operating cash flows and can represent significant uses of cash, particularly during periods of increasing revenue and activity levels. During the three months ended March 31, 2026, changes in working capital items used $8.6 million in cash flows, a $15.1 million decrease compared to the $23.7 million in cash flows used by working capital in the corresponding 2025 period.

Cash flows attributable to our investing activities. For the three months ended March 31, 2026, net cash used in investing activities consisted primarily of capital expenditures of $2.4 million as compared to $1.4 million for the three months ended March 31, 2025.

Cash flows attributable to our financing activities. For the three months ended March 31, 2026, net cash provided by financing activities was $6.2 million, consisting primarily of the net borrowings under the Revolving Credit Loans of $7.2 million, partially offset by the principal payments under the First Lien Term Loan and equipment financing loans.

For the three months ended March 31, 2025, net cash used in financing activities was $11.2 million, consisting primarily of borrowings under the First Lien Term Loan of $175.0 million, net borrowings under the Revolving Credit Loans of $8.0 million, and borrowings under the 2025 Second Lien Term Loan. These inflows were partially offset by the payments of the total outstanding balances under the Corre Delayed Draw Term Loan, Corre Incremental Term Loan and ME/RE Loans, and a partial pay down of the Corre Uptiered Loan. In addition, we paid $8.1 million of debt issuance costs for the refinancing transactions at March 12, 2025.

Effect of exchange rate changes on cash and cash equivalents. For the three months ended March 31, 2026 and 2025, the effect of foreign exchange rate changes on cash was $0.0 million and $0.1 million, respectively. The impact of exchange rates on cash and cash equivalents is primarily attributable to fluctuations in U.S. Dollar exchange rate against the Euro, the British Pound, the Canadian Dollar and the Brazil Real.

Off-Balance Sheet Arrangements

From time-to-time, we enter into off-balance sheet arrangements and transactions that can give rise to material off-balance sheet obligations. See Note 10 - Debtin this Quarterly Report on Form 10-Q and Note 11 - Debt in our Annual Report on Form 10-K for additional details of our off-balance sheet arrangements.

Critical Accounting Policies and Estimates

A discussion of our critical accounting policies and estimates is included in our Annual Report on Form 10-K. There were no material changes to our critical accounting policies during the three months ended March 31, 2026.