Struggling Sugar Land company replaces CFO

Susan Ball has been appointed CFO of Team Inc (market cap $500 million), effective December 3, 2018. She replaces Greg Boane, who has been the CFO since November 2014

Between 2012 and April 2018, Ms Ball was the CFO at another Sugar Land company, CVR Energy Partners, a public company that is 80% owned by Carl Icahn.

She will receive a base salary of $475,000, a one-time restricted stock award of $240,000, and a 2019 grant of $600,000 in restricted awards. She will also receive a relocation payment of $50,000 in order to move to Sugar Land. (For a long time CVR had a corporate office in Kansas City, which is where Ms Ball is presumably based).

Mr Boane will remain an employee until the end of February 2019. He will continue to be paid for a further 15 months after that ($0.5 million). His unvested restricted stock will also vest (worth approximately $0.4 million).

Mr Boane also entered into a consultancy agreement for March-May 2019 that will pay him $33,500 a month.

Team Inc is a provider of speciality industrial services to the refining, petrochemical and other heavy industries. Mr Boane became the CFO after the previous incumbent, Ted Owen, was promoted to CEO. Mr Owen stepped down in September 2017 following pressure from an activist shareholder.

The company ran into trouble after making two large acquisitions in quick succession. It acquired Qualspec (based in Torrance, CA) in July 2015 for $256 million and Furmanite (based in Houston) in February 2016 for $282 million. In 2017, the company wrote off $75 million in goodwill from these acquisitions, most of it related to Furmanite.

The company struggled to integrate the businesses, particularly as it was trying to implement a new ERP system at the same time. At the end of 2013, the company had decided to install Microsoft Dynamics AX. By the time they went live in March 2017 they had spent $47 million in capital costs, and a further $22 million in operating expenses!

In the 4th quarter of 2017, the company hired outside consultants, Alvarez & Marsal, to review the business for improvement and cost saving opportunities. In the 9 months to September 2018, the company spent $12 million on the consultants. It expects to spend $30 million (including restructuring and internal training costs) before the exercise is complete. For a business has annualized revenues of around $1.2 billion, it’s no surprise that it is losing money.

Ms Ball has her hands full.

SEC filing

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