What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-07-31 compared with 2025-05-01 · 260 added, 119 removed, 222 unchanged (63% of the section changed)

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2025 $ 75.87 $ 68.07

2024 82.92 $ 84.68 $ 80.01 $ 74.66 $ 80.52

WTI Crude (per bbl)

2025 $ 71.78 $ 64.57

2024 77.50 $ 81.81 $ 76.43 $ 70.73 $ 76.61

Henry Hub Natural Gas (per MMBtu)

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2024 2.15 $ 2.07 $ 2.11 $ 2.44 $ 2.19

________________

Energy Information Administration (spot prices).

The spot price of WTI crude oil declined approximately 20% in April 2025 in response to the imposition of broad-based trade tariffs by the United States on imported goods and the announcement by OPEC+ of plans to increase crude oil production.

These actions have raised uncertainties regarding the broad future effect of reciprocal trade tariff increases on the global economy as well as the future demand for and supply of crude oil.

The average spot price of WTI crude oil declined 10% in the second quarter of 2025 following to the imposition of broad-based trade tariffs by the United States on imported goods and the announcement by OPEC+ of plans to increase crude oil production.

These actions have led to ongoing uncertainty regarding the broad future effect of reciprocal trade tariff increases on the global economy as well as the future demand for and supply of crude oil, and negatively impacted the demand for and pricing of our products and services in the U.S.

land-based market during the second quarter of 2025.

The ultimate magnitude and duration of the trade conflict and increased crude oil production by OPEC+, and the related impacts on crude oil prices and the global economy, remain uncertain.

While it is difficult for management to assess or predict with precision the broad future effect of these events on the global economy, the energy industry or the Company, management expects that it could adversely affect demand for our products and services, particularly in the United States, over the balance of 2025 and possibly beyond.

In 2024, we implemented initiatives to reduce future costs, which are continuing into 2025.

Management actions in 2024 included:

the consolidation, relocation and exit of certain underperforming locations;

While it is difficult for management to assess or predict with precision the broad future effect of these events on the global economy, the energy industry or the Company, management expects that it may adversely affect demand for our products and services, particularly in the United States, over the balance of 2025 and possibly beyond.

We have implemented certain initiatives to optimize our operations and reduce future costs.

These actions include:

the consolidation, relocation and exit of certain operating locations;

the exit of certain service offerings;

reductions in our U.S.

work force as well as the realignment of operations within two of our reportable segments.

We also incurred legal and other related costs to enforce certain patents related to our proprietary technologies.

As a result of these actions, our reported pre-tax results for the three months ended March 31, 2024 included $10.0 million in non-cash goodwill impairment charges as well as $2.5 million of facility consolidation and exit, patent defense and other charges.

During the first quarter of 2025, we continued the exit of facilities closed in 2024 and further reduced headcount, incurring $0.9 million of associated pre-tax charges.

During the first three months of 2025, we sold equipment and inventory (related to a service offering exited in 2024) that was classified as held for sale assets, generating net proceeds of $7.5 million and we purchased $5.3 million of our common stock.

workforce as well as the realignment in 2024 of operations within two of our reportable segments.

We also incurred legal costs associated with patent defense.

As a result of these events, actions and assessments, our reported pre-tax results for the six months ended June 30, 2024 included $10.0 million in non-cash goodwill impairment charges as well as $6.9 million of facility consolidation and exit, patent defense and other charges.

During the first six months of 2025, we made the strategic decision to exit three additional service facilities, continued the exit of facilities closed in 2024 and further reduced headcount, incurring $4.6 million of associated pre-tax charges.

During the first six months of 2025, we sold facilities, equipment and inventory for net proceeds of $12.6 million.

Additionally, during the first six months of 2025, we purchased $14.8 million principal amount of our 4.75% convertible senior notes due 2026 (the “2026 Notes”) and $12.0 million of our common stock.

On July 4, 2025, the United States enacted tax reform legislation through the OBBBA, which resulted in changes to U.S.

tax and related law, including certain key federal income tax provisions applicable to multinational companies such as Oil States.

These include, among others:

the reinstatement of 100% bonus depreciation election for investments in qualifying property;

the immediate deduction of domestic research and development expenditures;

and manufacturing tax incentives related to goods sold outside the United States.

On July 28, 2025, we amended our asset-based revolving credit facility to increase advance rates, lower interest charges and plan for the retirement of all 2026 Notes that remain outstanding at maturity in April of 2026.

Current and expected future pricing for WTI crude oil and natural gas and inflationary cost increases, along with expectations regarding the regulatory environment in the regions in which we operate, are factors that will continue to influence our customers’ willingness to invest capital in their businesses.

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This segment is particularly influenced by global spending on deepwater drilling and production, which is primarily driven by our customers’ longer-term commodity demand forecasts and outlook for crude oil and natural gas prices.

Approximately 90% of Offshore Manufactured Products segment sales in the first three months of 2025 were driven by our customers’ capital spending for products and services used in exploratory and developmental drilling, greenfield offshore production infrastructure, and subsea pipeline tie-in and repair system applications, along with upgraded equipment for existing offshore drilling rigs and other vessels (referred to herein as “project-driven products and services”).

Approximately 90% of Offshore Manufactured Products segment sales in the first six months of 2025 were driven by our customers’ capital spending for products and services used in exploratory and developmental drilling, greenfield offshore production infrastructure, and subsea pipeline tie-in and repair system applications, along with upgraded equipment for existing offshore drilling rigs and other vessels (referred to herein as “project-driven products and services”).

Deepwater oil and gas development projects typically involve significant capital investments and multi-year development plans.

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Given the long lead times associated with field development, we believe some of these deepwater projects, once approved for development, are generally less susceptible to change based on short-term fluctuations in the price of crude oil and natural gas.

Deepwater oil and gas development projects may also be impacted by federal legislative and regulatory actions, including the OBBBA, signed into law in July 2025.

The OBBBA mandates that the Bureau of Ocean Energy Management conduct at least two offshore lease sales annually, of a minimum of 80 million acres (if available), in the Central and Western Gulf of America Planning Areas for the next 15 years, beginning in August 2025.

This segment also produces a variety of products for use in industrial, military and other applications outside the traditional energy industry.

Additionally, we are investing in research and product development (and have been awarded select contracts and are bidding on additional projects) to facilitate the development of alternative energy sources, including offshore wind and deepsea mineral gathering opportunities.

Backlog reported by our Offshore Manufactured Products segment increased to $357 million as of March 31, 2025 from $311 million as of December 31, 2024.

Bookings totaled $136 million in the first quarter of 2025, yielding a book-to-bill ratio of 1.5x in the first quarter of 2025.

This compares to total bookings of $66 million and a book-to-bill ratio of 0.8x in the first quarter of 2024.

Backlog reported by our Offshore Manufactured Products segment increased to $363 million as of June 30, 2025 from $311 million as of December 31, 2024.

Bookings totaled $112 million in the second quarter of 2025, yielding a quarterly book-to-bill ratio of 1.1x (1.2x year-to-date).

The following table sets forth backlog as of the dates indicated (in millions).

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2024 305 300 $ 313 $ 311

2023 316 328 341 327

Our Completion and Production Services segment provides completion and production services in the United States (including the Gulf of America) and internationally.

Prior to the sale of its drilling rigs in August of 2024, the segment also provided land drilling services in the United States.

drilling and completion activity and, in turn, our Completion and Production Services results, are sensitive to near-term fluctuations in commodity prices, particularly WTI crude oil prices, given the short-term, call-out nature of its operations.

drilling and completion activity and, in turn, our Completion and Production Services segment’s results, are sensitive to near-term fluctuations in commodity prices, particularly WTI crude oil prices, given the short-term, call-out nature of its operations.

We primarily supply equipment and service personnel utilized in the completion of, and initial production from, new and recompleted wells in our U.S.

operations, which are dependent primarily upon the level and complexity of drilling, completion and workover activity in our areas of operations.

Well intensity and complexity have increased with the continuing transition to multi-well pads, the drilling of longer lateral wells and increased downhole pressures, along with the increased number of frac stages completed in horizontal wells.

Our Downhole Technologies segment provides oil and gas perforation systems, downhole tools and services in support of completion, intervention, wireline and well abandonment operations.

This segment designs, manufactures and markets its consumable engineered products to oilfield service as well as exploration and production companies.

Product and service offerings for this segment include innovations in perforation technology through patented and proprietary systems combined with advanced modeling and analysis tools.

Product and service offerings for this segment include innovations in perforation technology through patented and proprietary systems combined

with advanced modeling and analysis tools.

This expertise has led to the optimization of perforation hole size, depth, and quality of tunnels, which are key factors for maximizing the effectiveness of hydraulic fracturing.

Additional offerings include frac plugs, toe valves and other elastomer products, which are focused on zonal isolation for hydraulic fracturing of horizontal wells, and a broad range of consumable products, such as setting tools and bridge plugs, that are used in completion, intervention and decommissioning applications.

Hydraulic fracturing activity, and, in turn, our Downhole Technologies segment’s results, are sensitive to commodity prices, particularly WTI crude oil prices, given that lower activity may result in lower demand for our consumable products.

Demand drivers for the Downhole Technologies segment include continued trends toward longer lateral lengths, increased frac stages and more perforation clusters to target increased unconventional well productivity.

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drilling rig count, as measured by Baker Hughes Company, as of and for the periods indicated.

As of April 25, 2025

As of July 25, 2025

Average for the

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

United States Rig Count:

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Offshore 16 15 20 14 20

542 571 603 579 613

energy industry is primarily focused on crude oil and liquids-rich exploration and development activities in U.S.

shale plays utilizing horizontal drilling and completion techniques.

As of March 31, 2025, oil-directed drilling accounted for 82% of the total U.S.

As of June 30, 2025, oil-directed drilling accounted for 79% of the total U.S.

rig count – with the balance largely natural gas related.

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In addition, in response to Russia’s invasion of Ukraine, governments in the European Union, the United States, the United Kingdom, Switzerland and other countries have enacted sanctions against Russia and Russian interests.

On April 2, 2025, the U.S.

Subsequently, the U.S.

government announced additional tariffs on goods imported into the United States, including steel and other metal products.

The effect of these sanctions and tariffs and the application and interpretation of existing trade agreements and customs, anti-dumping and countervailing duty regulations continue to evolve, and we continue to monitor these matters.

While we cannot predict with certainty the impact of any new or increased tariffs, or the impact of any retaliatory tariffs, if we encounter difficulty in procuring these raw materials and component products, or if the prices we have to pay for these products increase and we are unable to pass corresponding cost increases on to our customers, our financial position, cash flows and results of operations could be adversely affected.

While many of these tariffs are currently deferred, we cannot predict with certainty the impact of any new or increased tariffs, or the impact of any retaliatory tariffs, if we encounter difficulty in procuring these raw materials and component products, or if the prices we have to pay for these products increase and we are unable to pass corresponding cost increases on to our customers, our financial position, cash flows and results of operations could be adversely affected.

Furthermore, uncertainty with respect to potential costs in the drilling and completion of oil and gas wells could cause our customers to delay or cancel planned projects which, if this occurred, would adversely affect our financial position, cash flows and results of operations.

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Selected Financial Data

This selected financial data should be read in conjunction with our Consolidated Financial Statements and related notes included in “Part II, Item 8.

Financial Statements and Supplementary Data” of this Annual Report on Form 10-K and “Part II, Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations” in order to understand factors, such as charges, credits and financing transactions, which may impact comparability of the selected financial data.

This selected financial data should be read in conjunction with our Unaudited Condensed Consolidated Financial Statements and related notes included in “Part I, Item 1.

Financial Statements” of this Quarterly Report on Form 10-Q and “Part II, Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our Consolidated Financial Statements and related notes included in “Part II, Item 8.

Financial Statements and Supplementary Data” of our Annual Report on Form 10-K for the year ended December 31, 2024 in order to understand factors, such as charges and credits, which may impact comparability of the selected financial data.

Unaudited Consolidated Results of Operations

The following summarizes our consolidated results of operations for the three months ended March 31, 2025 and 2024 (in thousands, except per share amounts):

The following summarizes our consolidated results of operations for the three and six months ended June 30, 2025 and 2024 (in thousands, except per share amounts):

Three Months Ended

2025 2024 Variance

June 30, Six Months Ended

2025 2024 Variance 2025 2024 Variance

Products $ 107,342 $ 108,579 $ (1,237) $ 207,893 $ 202,908 $ 4,985

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— — — — 10,000 (10,000)

Impairments of operating lease assets

1,358 — 1,358 1,358 — 1,358

Other operating income, net

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Interest expense, net (1,692) (2,061) 369 (3,270) (4,162) 892

Other income (expense), net

Other income, net

636 652 (16) 774 580 194

Income (loss) before income taxes 4,221 636 3,585 8,420 (12,714) 21,134

Income tax provision (1,041) (24) (1,017)

Income tax benefit (provision) (1,410) 665 (2,075) (2,451) 641 (3,092)

Net income (loss) $ 2,811 $ 1,301 $ 1,510 $ 5,969 $ (12,073) $ 18,042

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$ 0.05 $ 0.02 $ 0.10 $ (0.19)

0.05 0.02 0.10 (0.19)

Weighted average number of common shares outstanding:

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Unaudited Segment Results of Operations

We manage and measure our business performance in three distinct operating segments:

We manage and measure our business performance in three operating segments:

Offshore Manufactured Products, Completion and Production Services and Downhole Technologies.

Supplemental financial information by operating segment for the three months ended March 31, 2025 and 2024 is summarized below (in thousands):

Supplemental financial information by operating segment for the three and six months ended June 30, 2025 and 2024 is summarized below (in thousands):

Three Months Ended

2025 2024 Variance

June 30, Six Months Ended

2025 2024 Variance 2025 2024 Variance

Offshore Manufactured Products

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_______________

(1) During the three months ended March 31, 2024, we recognized facility consolidation charges of $1.5 million within the Offshore Manufactured Products segment, associated primarily with the segment’s consolidation and relocation of certain manufacturing and service locations.

(2) During the three months ended March 31, 2024, we recognized charges of $1.0 million within the Completion and Production Services segment, associated primarily with the consolidation and exit of certain underperforming service locations.

During the first quarter of 2025, the segment incurred charges of $0.9 million associated with the exit of facilities closed in 2024 and, to a lesser extent, additional headcount reductions.

(3) During the three months ended March 31, 2024, we recognized a $10.0 million non-cash impairment charge within the Downhole Technologies segment related to goodwill reassigned to the business in connection with the realignment of operations between segments.

For further discussion of charges recognized during the three months ended March 31, 2025 and 2024, including the realignment of operations between segments during the first quarter of 2024, see Note 2, “Asset Impairments and Other Charges,” to the Unaudited Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for additional discussion.

Three Months Ended March 31, 2025 Compared to Three Months Ended March 31, 2024

We reported net income for the three months ended March 31, 2025 of $3.2 million, or $0.05 per share.

These results compare to a net loss for the three months ended March 31, 2024 of $13.4 million, or $0.21 per share, which included a non-cash goodwill impairment charge of $10.0 million ($9.5 million after-tax, or $0.15 per share) and facility consolidation and other charges of $2.5 million ($2.0 million after-tax, or $0.03 per share).

Our results of operations for the first three months of 2025 reflect the impact of management’s decision to exit certain underperforming locations and service offerings in the United States in 2024.

The impact was partially offset by growth in offshore and international projects and associated backlog conversion.

Consolidated total revenues in the first three months of 2025 decreased $7.3 million, or 4%, from the first three months of 2024 due primarily to our Completion and Production Services segment’s exit of underperforming service offerings and locations during 2024.

These exited operations generated $16.8 million of revenues in the first three months of 2024.

Excluding the impact of operations exited during 2024, consolidated revenues increased $9.5 million, or 6%, year-over-year.

Consolidated product revenues in the first three months of 2025 increased $6.2 million, or 7%, from the first three months of 2024, with the impact of higher customer demand for connector and military products, partially offset by a reduced U.S.

(1) During the three and six months ended June 30, 2025, we recognized charges of $0.3 million within the Offshore Manufactured Products segment, associated primarily with the consolidation and relocation of certain manufacturing and service locations.

During the three and six months ended June 30, 2024, the segment incurred facility consolidation charges of $1.5 million and $3.0 million, respectively, associated primarily with the segment’s consolidation and relocation of a manufacturing and service location.

(2) During the three and six months ended June 30, 2025, we recognized charges of $2.2 million and $3.1 million, respectively, within the Completion and Production Services segment, associated primarily with the exit of service locations.

During the three and six months ended June 30, 2024, the segment incurred charges of $2.9 million and $3.9 million, respectively, associated primarily with the consolidation and exit of certain underperforming service locations and the defense of certain patents.

(3) During the three and six months ended June 30, 2025, we recognized charges of $1.2 million within the Downhole Technologies segment, associated primarily with the exit of a leased facility.

During the six months ended June 30, 2024, the segment incurred a $10.0 million non-cash impairment charge related to goodwill reassigned to the business in connection with the realignment of operations between segments.

For further discussion of charges recognized during the three and six months ended June 30, 2025 and 2024, see Note 2, “Asset Impairments and Other Charges and Credits,” to the Unaudited Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for additional discussion.

Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024

We reported net income for the three months ended June 30, 2025 of $2.8 million, or $0.05 per share.

The reported second quarter net income included charges of $3.7 million ($2.9 million after tax, or $0.05 per share) associated primarily with the exit of U.S.

land-based facilities and personnel reductions, partially offset by non-cash gains of $0.4 million ($0.3 million after-tax, or $0.01 per share) associated with debt extinguishment.

These results compare to net income for the three months ended June 30, 2024 of $1.3 million, or $0.02 per share, which included facility consolidation and other charges of $4.4 million ($3.5 million after-tax, or $0.06 per share), partially offset by non-cash gains of $0.5 million ($0.4 million after-tax, or $0.01 per share) associated with debt extinguishment.

Our results of operations for the second quarter of 2025 reflect the impact of management’s decision to exit certain underperforming locations and service offerings in the United States, as well as the effect of a reduction by operators in U.S.

land-based activity levels due to lower crude oil prices and competitive market conditions.

These impacts were partially offset by stronger offshore and international project activity, supported by backlog growth over recent quarters.

Consolidated total revenues in the second quarter of 2025 decreased $21.0 million, or 11%, from the second quarter of 2024 due primarily to our exit of underperforming service offerings and locations and lower U.S.

land-based activity levels.

Excluding the impact of exited operations, which generated $12.8 million of revenues in the second quarter of 2024, consolidated revenues decreased $8.2 million, or 5%, year-over-year.

Consolidated product revenues in the second quarter of 2025 decreased $1.2 million, or 1%, from the second quarter of 2024, with the impact of reduced U.S.

customer demand for completion and perforating products substantially offset by higher customer demand for project-driven products.

Consolidated service revenues in the second quarter of 2025 decreased $19.7 million, or 25%, from the second quarter of 2024.

This decrease was concentrated in the United States – driven by our exit of certain underperforming service offerings and locations and an industry-wide reduction in land-based activity levels.

The following table provides supplemental disaggregated revenue from contracts with customers by operating segment for the three months ended June 30, 2025 and 2024 (in thousands):

Offshore Manufactured Products

Completion and Production Services

Downhole Technologies Total

Three Months Ended June 30 2025 2024 2025 2024 2025 2024 2025 2024

Project-driven:

Products $ 68,653 $ 59,752 $ — $ — $ — $ — $ 68,653 $ 59,752

Services 27,907 31,024 — — — — 27,907 31,024

Total project-driven 96,560 90,776 — — — — 96,560 90,776

Military and other products 10,026 10,780 — — — — 10,026 10,780

Products — — — — 28,663 38,047 28,663 38,047

Services — — 29,424 46,421 733 359 30,157 46,780

Total short-cycle

— — 29,424 46,421 29,396 38,406 58,820 84,827

$ 106,586 $ 101,556 $ 29,424 $ 46,421 $ 29,396 $ 38,406 $ 165,406 $ 186,383

By destination:

Offshore and international $ 99,620 $ 94,372 $ 11,478 $ 13,629 $ 8,016 $ 10,624 $ 119,114 $ 118,625

land 6,966 7,184 17,946 32,792 21,380 27,782 46,292 67,758

$ 106,586 $ 101,556 $ 29,424 $ 46,421 $ 29,396 $ 38,406 $ 165,406 $ 186,383

As a percentage of total:

Offshore and international 72 % 64 %

land 28 % 36 %

Cost of Revenues (exclusive of Depreciation and Amortization Expense).

Our consolidated total cost of revenues (exclusive of depreciation and amortization expense) in the second quarter of 2025 decreased $16.7 million, or 12%, compared to the level reported in the second quarter of 2024.

Consolidated product costs in the second quarter of 2025 increased $1.4 million, or 2%, from the second quarter of 2024 driven primarily by a shift in product sales mix.

Consolidated service costs in the second quarter of 2025 decreased $18.1 million, or 30%, from the second quarter of 2024, due to lower revenue levels and strategic actions implemented in our U.S.

land operations to improve reported results.

Selling, General and Administrative Expense.

Selling, general and administrative expense was $23.0 million in the second quarter of 2025.

This compares to an expense of $26.4 million in the second quarter of 2024, which included $1.0 million of costs associated with enforcing certain of our patents.

Excluding these patent litigation costs, selling, general and administrative costs decreased $2.4 million, or 10%, from the second quarter of 2024, due primarily to lower incentive-based compensation, marketing and bad debt expenses.

Depreciation and Amortization Expense.

Depreciation and amortization expense decreased $2.8 million, or 19%, in the second quarter of 2025 compared to the prior-year quarter.

Note 10, “Segments and Related Information,” to our Unaudited Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q presents depreciation and amortization expense by segment.

Impairment of Operating Lease Assets.

In the second quarter of 2025, management continued its restructuring efforts to reduce costs in its U.S.

land-based operations.

As a result of these decisions, our Completion and Productions Services and Downhole Technologies segments recognized non-cash impairment charges totaling $1.4 million in connection with its exit of leased locations.

See Note 2, “Asset Impairments and Other Charges and Credits,” to the Unaudited Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for additional discussion.

Operating Income.

Our consolidated operating income was $5.3 million in the second quarter of 2025, which included $1.4 million in non-cash operating lease impairment charges as well as charges totaling $2.3 million associated with facility consolidations and exits and other management actions.

This compares to second quarter 2024 consolidated operating income of $2.0 million, which included facility consolidation and other charges of $4.4 million.

Excluding these charges, operating income increased by $2.5 million year-over-year, driven primarily by growth in offshore and international activity and actions taken to improve U.S.

land-based operating results.

Interest Expense, Net.

Net interest expense totaled $1.7 million in the second quarter of 2025, which compares to $2.1 million in the same period of 2024.

Interest expense as a percentage of total debt outstanding was approximately 7% in the second quarters of 2025 and 2024.

Income tax benefit (provision) for the three months ended June 30, 2025 and 2024 was calculated using a discrete approach.

This methodology was used because changes in our results of operations and non-deductible expenses can materially impact the estimated annual effective tax rate.

For the three months ended June 30, 2025, our income tax provision was $1.4 million, which included the impact of valuation allowance adjustments for deferred tax assets, certain discrete tax items and other non-deductible expenses, on pre-tax income of $4.2 million.

This compares to an income tax benefit of $0.7 million, which included the impact of favorable changes in valuation allowances recorded against deferred tax assets and certain non-deductible expenses, on pre-tax income of $0.6 million for the three months ended June 30, 2024.

Other Comprehensive Income (Loss).

Reported comprehensive income (loss) is the sum of reported net income and other comprehensive income (loss).

Other comprehensive income was $9.1 million in the second quarter of 2025 compared to other comprehensive loss of $3.2 million in the second quarter of 2024 due to fluctuations in currency exchange rates compared to the U.S.

dollar which are used to translate certain of the international operations of our operating segments.

For the three months ended June 30, 2025 and 2024, currency translation adjustments recognized as a component of other comprehensive income (loss) were primarily attributable to the United Kingdom and Brazil.

During the second quarter of 2025, the exchange rate for the British pound and the Brazilian real strengthened compared to the U.S.

In the second quarter of 2024, the exchange rates for the British pound was flat while the Brazilian real weakened compared to the U.S.

Segment Operating Results

Offshore Manufactured Products

Our Offshore Manufactured Products segment revenues increased $5.0 million, or 5%, in the second quarter of 2025 compared to the second quarter of 2024 due to increased international and offshore project-driven product revenue, supported by backlog growth over recent quarters.

Operating Income.

Our Offshore Manufactured Products segment reported operating income of $17.0 million in the second quarter of 2025, which included $0.3 million in facility consolidation and relocation charges.

This compares to operating income in the second quarter of 2024 of $14.4 million, which included $1.5 million in facility consolidation charges.

Excluding these charges, operating income increased $1.4 million year-over-year.

Backlog in our Offshore Manufactured Products segment totaled $363 million as of June 30, 2025, with second quarter 2025 bookings of $112 million and a quarterly book-to-bill ratio of 1.1x.

Completion and Production Services

Our Completion and Production Services segment revenues decreased $17.0 million, or 37%, in the second quarter of 2025 compared to the prior-year period, driven by the exit of underperforming service offerings and facilities and lower U.S.

land-based activity levels.

Excluding the impact of exited operations, which generated $12.8 million of revenues in the second quarter of 2024, revenues declined $4.2 million, or 13%, year-over-year – driven primarily by the industry-wide reduction in U.S.

land completion-related activity.

Operating Income (Loss).

Our Completion and Production Services segment reported operating income of $1.9 million in the second quarter of 2025, which included charges totaling $2.2 million associated primarily with the exit of service locations.

This compares to an operating loss of $0.5 million in the second quarter of 2024, which included charges totaling $2.9 million associated with facility consolidations and exits, and the defense of patents.

Excluding these charges, the Completion and Production Services segment’s operating results improved $1.7 million from the prior-year period, supported by the segment’s U.S.

land-based restructuring efforts and gains recognized on the sales of idle facilities.

Downhole Technologies

Our Downhole Technologies segment revenues decreased $9.0 million, or 23%, in the second quarter of 2025 from the prior-year period, driven primarily by lower U.S.

customer activity levels.

Operating Loss.

Our Downhole Technologies segment reported an operating loss of $4.0 million in the second quarter of 2025, which included charges totaling $1.2 million primarily associated with the exit of a leased facility.

This compares to an operating loss of $1.1 million in the second quarter of 2024.

Excluding charges, the Downhole Technologies operating results declined $1.6 million year-over-year, driven by the decline in revenues.

Operating Loss.

Corporate expenses decreased $1.0 million, or 10%, in the second quarter of 2025 from the prior-year period due primarily to lower performance-based incentive expense.

Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024

We reported net income for the six months ended June 30, 2025 of $6.0 million, or $0.10 per share.

The reported first six months net income included charges of $4.6 million ($3.6 million after tax, or $0.07 per share) associated with the restructuring of certain of our U.S.

land-based operations, facility consolidations and closures, and personnel reductions, partially offset by non-cash gains of $0.4 million ($0.3 million after-tax, or $0.01 per share) associated with debt extinguishment.

These results compare to a net loss for the six months ended June 30, 2024 of $12.1 million, or $0.19 per share, which included:

a non-cash goodwill impairment charge of $10.0 million ($9.5 million after-tax, or $0.15 per share) and facility consolidation and other charges of $6.9 million ($5.5 million after-tax, or $0.09 per share), partially offset by non-cash gains of $0.5 million ($0.4 million after-tax, or $0.01 per share) associated with debt extinguishment.

Our results of operations for the first six months of 2025 reflect the impact of management’s decision to exit certain underperforming locations and service offerings in the United States as well as the effect of a reduction by operators in U.S.

land-based activity due to lower crude oil prices and competitive market conditions.

These impacts were partially offset by stronger offshore and international project activity, supported by backlog growth over recent quarters.

Consolidated total revenues in the first six months of 2025 decreased $28.3 million, or 8%, from the first six months of 2024 due primarily to our exit of underperforming service offerings and locations and lower U.S.

land-based activity levels.

Excluding the impact of exited operations, which generated $29.6 million of revenues in the first six months of 2024, consolidated revenues increased $1.3 million year-over-year.

Consolidated product revenues in the first six months of 2025 increased $5.0 million, or 2%, from the first six months of 2024, with the impact of higher customer demand for connector and valve products partially offset by a reduced U.S.

customer demand for completion and perforating products.

Consolidated service revenues in the first three months of 2025 decreased $13.5 million, or 19%, from the first three months of 2024.

This decrease was concentrated in the United States – driven by our exit of certain underperforming service offerings in 2024 (which generated $16.8 million of revenues in the first three months of 2024).

The following table provides supplemental disaggregated revenue from contracts with customers by operating segment for the three months ended March 31, 2025 and 2024 (in thousands):

Consolidated service revenues in the first six months of 2025 decreased $33.3 million, or 22%, from the first six months of 2024.

This decrease was concentrated in the United States – driven by our exit of certain underperforming service offerings and locations and an industry-wide reduction in land-based activity levels.

The following table provides supplemental disaggregated revenue from contracts with customers by operating segment for the six months ended June 30, 2025 and 2024 (in thousands):

Offshore Manufactured Products

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Downhole Technologies Total

Three Months Ended March 31 2025 2024 2025 2024 2025 2024 2025 2024

Six Months Ended June 30 2025 2024 2025 2024 2025 2024 2025 2024

Project-driven:

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$ 199,182 $ 188,413 $ 63,943 $ 93,713 $ 62,219 $ 71,519 $ 325,344 $ 353,645

As a percentage of total:

Offshore and international 69 % 62 %

land 31 % 38 %

Cost of Revenues (exclusive of Depreciation and Amortization Expense).

Our consolidated total cost of revenues (exclusive of depreciation and amortization expense) decreased $9.3 million, or 7%, in the first three months of 2025 compared to the first three months of 2024.

Consolidated product costs in the first three months of 2025 increased $5.2 million, or 7%, compared to the first three months of 2024 due primarily to the reported increase in product revenue as well as an unfavorable shift in product sales mix.

Consolidated service costs in the first three months of 2025 decreased $14.5 million, or 25%, compared to the first three months of 2024, reflective primarily of the strategic management actions implemented in 2024 to improve reported results.

Our consolidated total cost of revenues (exclusive of depreciation and amortization expense) in the first six months of 2025 decreased $26.0 million, or 9%, compared to the first six months of 2024.

Consolidated product costs in the first six months of 2025 increased $6.6 million, or 4%, compared to the first six months of 2024 due primarily to the reported increase in product revenue as well as an unfavorable shift in product sales mix.

Consolidated service costs in the first six months of 2025 decreased $32.6 million, or 28%, compared to the first six months of 2024, due to lower revenue levels and the strategic actions implemented in our U.S.

land-based operations to improve reported results.

Selling, General and Administrative Expense.

Selling, general and administrative expense totaled $22.5 million in the first three months of 2025, consistent with the level reported in the first three months of 2024, which included $0.4 million of costs associated with enforcing certain of our patents.

Selling, general and administrative expense totaled $45.5 million in the first six months of 2025.

This compares to an expense of $48.9 million in the first six months of 2024, which included $1.3 million of costs associated with enforcing certain of our patents.

Excluding these patent litigation costs, selling, general and administrative costs decreased $2.0 million, or 4%, from the prior-year period, due primarily to lower compensation, marketing and bad debt expenses.

Depreciation and Amortization Expense.

Depreciation and amortization expense decreased $2.2 million, or 15%, in the first three months of 2025 compared to the prior-year period.

Depreciation and amortization expense in the first six months of 2025 decreased $5.0 million, or 17%, compared to the prior-year period.

Impairment of Operating Lease Assets.

In the first six months of 2025, management continued its restructuring efforts to reduce costs in its U.S.

land-based operations.

Impairment of Goodwill.

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Operating Income (Loss).

Our consolidated operating income was $5.6 million in the first three months of 2025, which included $0.9 million in facility exit charges.

This compares to consolidated operating loss of $11.2 million in the first three months of 2024, which included a $10.0 million non-cash goodwill impairment charge and $2.5 million in facility consolidation and other charges.

Excluding these charges, operating results improved by $5.2 million year-over-year, driven by growth in offshore and international activity.

Our consolidated operating income was $10.9 million in the first six months of 2025, which included $1.4 million in non-cash operating lease asset impairment charges as well as charges totaling $3.2 million associated with facility consolidations and exits and other management actions.

This compares to a consolidated operating loss of $9.1 million in the first six months of 2024, which included a $10.0 million non-cash goodwill impairment charge and $6.9 million in facility consolidation and other charges.

Excluding these charges, operating results improved by $7.7 million year-over-year, driven primarily by growth in offshore and international activity and actions taken to improve our U.S.

land-based operating results.

Interest Expense, Net.

Net interest expense totaled $1.6 million in the first three months of 2025, which compares to $2.1 million in the first three months of 2024.

Interest expense as a percentage of total debt outstanding was approximately 7% in the first three months of 2025 and the first three months of 2024.

Income tax expense for the first three months of 2025 and 2024 was calculated using a discrete approach.

Net interest expense totaled $3.3 million in the first six months of 2025, which compares to $4.2 million in the first six months of 2024.

Interest expense as a percentage of total debt outstanding was approximately 7% in the first six months of 2025 and 2024.

Income tax benefit (provision) for the first six months of 2025 and 2024 was calculated using a discrete approach.

This methodology was used because changes in our results of operations and non-deductible expenses can materially impact the estimated annual effective tax rate.

For the first three months of 2025, our income tax provision was $1.0 million, which included the impact of certain discrete tax items and other non-deductible expenses on pre-tax income of $4.2 million.

This compares to an income tax provision of $24 thousand, which included the impact of a $10.0 million goodwill impairment charge and other non-deductible expenses, on a pre-tax loss of $13.4 million for the first three months of 2024.

For the first six months of 2025, our income tax provision was $2.5 million, which included the impact of certain discrete tax items and other non-deductible expenses on pre-tax income of $8.4 million.

This compares to an income tax benefit of $0.6 million, which included the impact of a $10.0 million goodwill impairment charge, other non-deductible expenses and favorable changes in valuation allowances recorded against deferred tax assets, on a pre-tax loss of $12.7 million for the first six months of 2024.

Other Comprehensive Income (Loss).

Reported comprehensive income (loss) is the sum of reported net income (loss) and other comprehensive income (loss).

Other comprehensive income was $5.5 million in the first three months of 2025 compared to comprehensive loss of $3.0 million in the first three months of 2024 due to fluctuations in foreign currency exchange rates compared to the U.S.

Other comprehensive income was $14.6 million in the first six months of 2025 compared to other comprehensive loss of $6.2 million in the first six months of 2024 due to fluctuations in foreign currency exchange rates compared to the U.S.

dollar for certain of the international operations of our operating segments.

For the first three months of 2025 and 2024, currency translation adjustments recognized as a component of other comprehensive income (loss) were primarily attributable to the United Kingdom and Brazil.

During the first three months of 2025, the exchange rates for both the British pound and the Brazilian real strengthened compared to the U.S.

This compares to the first three months of 2024, when the exchange rates for both the British pound and the Brazilian real weakened compared to the U.S.

For the first six months of 2025 and 2024, currency translation adjustments recognized as a component of other comprehensive income (loss) were primarily attributable to the United Kingdom and Brazil.

During the first six months of 2025, the exchange rates for both the British pound and the Brazilian real strengthened compared to the U.S.

This compares to the first six months of 2024, when the exchange rates for both the British pound and the Brazilian real weakened compared to the U.S.

Segment Operating Results

Offshore Manufactured Products

Our Offshore Manufactured Products segment revenues increased $5.7 million, or 7%, in the first three months of 2025 compared to the first three months of 2024 due primarily to increased demand for the segment’s international and offshore project-driven connector and valve products.

Our Offshore Manufactured Products segment revenues increased $10.8 million, or 6%, in the first six months of 2025 compared to the first six months of 2024 due primarily to increased demand for the segment’s international and offshore project-driven connector and valve products.

Operating Income.

Our Offshore Manufactured Products segment reported operating income of $14.3 million in the first three months of 2025.

This compares to operating income of $10.6 million in the first three months of 2024, which included $1.5 million in facility consolidation and other charges.

Excluding these charges, the Offshore Manufactured Products segment’s operating income increased $2.2 million year-over-year due to the reported revenue growth and a favorable shift in revenue mix.

Backlog in our Offshore Manufactured Products segment totaled $357 million as of March 31, 2025 compared to $311 million as of December 31, 2024.

Bookings during the first three months of 2025 were $136 million, yielding a book-to-bill ratio of 1.5x.

Our Offshore Manufactured Products segment reported operating income of $31.3 million in the first six months of 2025, which included $0.3 million in facility consolidation and relocation charges.

This compares to operating income of $25.0 million in the first six months of 2024, which included $3.0 million in facility consolidation and other charges.

Excluding these charges, the Offshore Manufactured Products segment’s operating income increased $3.6 million year-over-year due primarily to the reported revenue growth.

Backlog in our Offshore Manufactured Products segment totaled $363 million as of June 30, 2025 compared to $311 million as of December 31, 2024.

Bookings during the first six months of 2025 were $248 million, yielding a book-to-bill ratio of 1.2x.

Completion and Production Services

Our Completion and Production Services segment revenues decreased $12.8 million, or 27%, in the first three months of 2025 compared to the first three months of 2024, driven primarily by the exit of underperforming service offerings and facilities during 2024.

These exited operations generated $16.8 million of revenues in the first three months of 2024.

Excluding the impact of operations exited during 2024, revenues increased $4.0 million, or 13%, year-over-year – driven primarily by increased customer activity in the Gulf of America.

Our Completion and Production Services segment revenues decreased $29.8 million, or 32%, in the first six months of 2025 compared to the first six months of 2024, driven primarily by the exit of underperforming U.S.

service offerings and facilities.

Excluding the impact of exited operations, which generated $29.6 million of revenues in the first six months of 2024, revenues were consistent year-over-year.

Operating Income (Loss).

Our Completion and Production Services segment reported operating income of $3.5 million in the first three months of 2025, which included $0.9 million in facility exit charges.

This compares to an operating loss of $0.4 million in the first three months of 2024, which included charges totaling $1.0 million associated with the exit of three facilities and the defense of patents.

Excluding these charges, the Completion and Production Services segment’s operating results improved $3.8 million from the prior-year period, due primarily to the reported revenue growth within our current base operations and the cost reduction measures implemented in 2024.

Our Completion and Production Services segment reported operating income of $5.4 million in the first six months of 2025, which included $3.1 million in facility exit charges.

This compares to an operating loss of $1.0 million in the first six months of 2024, which included charges totaling $3.9 million associated with facility consolidations and exits, and the defense of patents.

Excluding these charges, the Completion and Production Services segment’s operating results improved $5.5 million from the prior-year period, due primarily to the cost reduction measures implemented.

Downhole Technologies

Our Downhole Technologies segment revenues decreased $0.3 million, or 1%, in the first three months of 2025 from the first three months of 2024.

Our Downhole Technologies segment revenues decreased $9.3 million, or 13%, in the first six months of 2025 from the first six months of 2024, driven primarily by lower U.S.

customer activity levels and competitive market conditions.

Operating Loss.

Our Downhole Technologies segment reported an operating loss of $2.1 million in the first three months of 2025.

This compares to an operating loss of $12.1 million reported in the first three months of 2024, which included the $10.0 million non-cash goodwill impairment charge related to the segment realignment in the first quarter of 2024.

Excluding the 2024 goodwill impairment charge, the Downhole Technologies segment’s operating loss was comparable with the prior year.

Our Downhole Technologies segment reported an operating loss of $6.1 million in the first six months of 2025, which included charges totaling $1.2 million primarily associated with the exit of a leased facility.

This compares to an operating loss of $13.2 million reported in the first six months of 2024, which included the $10.0 million non-cash goodwill impairment charge related to the segment realignment in the first quarter of 2024.

Excluding charges, the Downhole Technologies segment’s operating results declined $1.7 million from the prior-year period, due primarily to the decrease in activity levels and lower fixed-cost coverage.

Operating Loss.

Corporate expenses in the first three months of 2025 increased $0.7 million, or 8%, from the first three months of 2024, due primarily to higher performance-based incentive compensation costs.

Corporate expenses in the first six months of 2025 decreased $0.3 million, or 2%, from the first six months of 2024, due primarily to lower performance-based incentive expense.

Liquidity, Capital Resources and Other Matters

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Operating Activities

Cash flows from operations totaled $9.3 million during the first three months of 2025, compared to $11.4 million used in operations during the first three months of 2024.

During the first three months of 2025, $5.6 million was used to fund net working capital increases, primarily due to a decrease in accounts payable and payment of accrued short- and long-term cash incentive compensation, partially offset by the favorable impact of a decrease in accounts receivable.

During 2024, $21.8 million was used to fund net working capital increases, primarily due to the payment of accrued 2023 short- and long-term cash incentives and a decrease in accounts payable.

Cash flows from operations totaled $24.3 million during the first six months of 2025, compared to $1.1 million used in operations during the first six months of 2024.

During the first six months of 2025, $6.1 million was used to fund net working capital increases, which includes a decrease in accounts payable and payment of accrued short- and long-term cash incentive compensation, as well as a decrease in accounts receivable.

During the first six months of 2024, $28.3 million was used to fund net working capital increases, primarily due to an activity-driven increase in inventories, the payment of accrued 2023 short- and long-term cash incentives in the first quarter of 2024 and a decrease in accounts payable.

Investing Activities

Investing activities were net cash neutral during the first three months of 2025, compared to $7.8 million used in investing activities during the first three months of 2024.

Capital expenditures totaled $9.2 million and $10.1 million during the first three months of 2025 and 2024, respectively.

These investments were offset by proceeds from the sale of property, equipment and assets held for sale of $9.2 million and $2.3 million during the first three months of 2025 and 2024, respectively.

Including investments associated with the continuing construction of a new facility in Batam, we expect to invest approximately $25 million in capital expenditures during 2025.

We plan to fund our capital expenditures with available cash, internally generated funds and, if necessary, borrowings under our ABL Facility discussed below.

Net cash used in investing activities during the first six months of 2025 totaled $6.9 million, compared to $3.2 million used in investing activities during the first six months of 2024.

Capital expenditures totaled $19.5 million and $15.9 million during the first six months of 2025 and 2024, respectively.

These investments were offset by proceeds from the sale of property, equipment and assets held for sale of $12.6 million and $12.8 million during the first six months of 2025 and 2024, respectively.

Including investments associated with the continuing construction of a new facility in Batam, Indonesia, we expect to invest approximately $30 million in capital expenditures during 2025.

We plan to fund our capital expenditures with available cash, internally generated funds and, if necessary, borrowings under our amended ABL Facility discussed below.

Financing Activities

During the first three months of 2025, net cash of $8.0 million was used in financing activities, which included the repurchase of $5.3 million of our common stock.

This compares to $3.7 million of cash used in financing activities during the first three months of 2024.

As of March 31, 2025, we had cash and cash equivalents totaling $66.8 million, which compared to $65.4 million as of December 31, 2024.

As of March 31, 2025, we had no borrowings outstanding under our ABL Facility, $123.5 million principal amount of our 2026 Notes outstanding and other debt of $2.6 million.

Our reported interest expense included amortization of deferred financing costs of $0.3 million during the first three months of 2025.

For the first three months of 2025, our contractual cash interest expense was $1.8 million, or approximately 6% of the average principal balance of debt outstanding.

We believe that cash on-hand, cash flow from operations and borrowing capacity available under our ABL Facility will be sufficient to meet our full liquidity needs in the coming twelve months.

Our 2026 Notes mature on April 1, 2026, and we anticipate that cash on hand, cash flow from operations generated during 2025 and borrowings under our ABL Facility will be sufficient to permit us to fully retire the 2026 Notes.

Under the terms of the ABL Facility, if we have not reduced the principal amount of the 2026 Notes to less than $17.5 million on or prior to December 31, 2025, any amounts outstanding under our ABL Facility will become due and payable and we will no longer have borrowing capacity under our ABL Facility.

Accordingly, we have been engaged in discussions with the lenders under our ABL Facility to eliminate such springing maturity provision in order to facilitate the efficient retirement of the 2026 Notes subsequent to the springing maturity date.

During the first six months of 2025, net cash of $29.1 million was used in financing activities, which included the purchase of $14.8 million principal amount of our outstanding 2026 Notes for $14.3 million in cash and the repurchase of 2.4 million shares of our common stock (or 4% of our common stock outstanding as of January 1, 2025) for $12.0 million.

This compares to $17.2 million of cash used in financing activities during the first six months of 2024, which included the purchase of $11.5 million principal amount of our outstanding 2026 Notes for $10.8 million in cash and the repurchase of $2.4 million of our common stock.

As of June 30, 2025, we had cash and cash equivalents totaling $53.9 million, which compared to $65.4 million as of December 31, 2024.

As of June 30, 2025, we had no borrowings outstanding under our ABL Facility, $108.8 million principal amount of our 2026 Notes outstanding and other debt of $2.5 million.

Our reported interest expense included amortization of deferred financing costs of $0.7 million during the first six months of 2025.

For the first six months of 2025, our contractual cash interest expense was $3.4 million, or approximately 6% of the average principal balance of debt outstanding.

We believe that cash on-hand, cash flow from operations and borrowing capacity available under our ABL Facility will be sufficient to meet our liquidity needs in the coming twelve months.

Our 2026 Notes mature on April 1, 2026, and we anticipate that cash on hand, cash flow from operations and borrowings under our amended ABL Facility will be sufficient to permit us to fully retire the remaining balance of the 2026 Notes.

As further discussed below, on July 28, 2025 we amended our ABL Facility to increase advance rates, lower interest charges and plan for the retirement of all 2026 Notes that remain outstanding at maturity in April of 2026.

If our plans or assumptions change, or are inaccurate, we may need to raise additional capital from other sources.

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Capital availability will be affected by prevailing conditions in our industry, the global economy, the global banking and financial markets and other factors, many of which are beyond our control.

For companies like ours that support the energy industry, disruptions affecting the availability of capital have in the past and may in the future negatively impact the value of

our common stock and may reduce our ability to access capital in the bank and capital markets or result in such capital being available on less favorable terms, which could negatively affect our liquidity.

For companies like ours that support the energy industry, disruptions affecting the availability of capital have in the past and may in

the future negatively impact the value of our common stock and may reduce our ability to access capital in the bank and capital markets or result in such capital being available on less favorable terms, which could negatively affect our liquidity.

On March 6, 2024, the SEC finalized rules relating to the disclosure of a range of climate-related information (the “Rules”).

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Subject to applicable securities laws, such purchases will be at such times and in such amounts as we deem appropriate.

During the three months ended March 31, 2025, $5.3 million in repurchases of common stock were made under these programs.

The amount remaining under our new share repurchase authorization as of March 31, 2025 was $36.0 million.

During the six months ended June 30, 2025, $12.0 million in repurchases of common stock were made under this program.

The amount remaining under our new share repurchase authorization as of June 30, 2025 was $29.3 million.

Revolving Credit Facility.

Our senior secured credit facility provides for a $125.0 million asset-based revolving credit facility (as amended, the “ABL Facility”) under which credit availability is subject to a borrowing base calculation.

The ABL Facility is governed by a credit agreement, as amended, with Wells Fargo Bank, National Association, as administrative agent and the lenders and other financial institutions from time to time party thereto (as amended, the “ABL Agreement”).

The ABL Agreement matures on February 16, 2028 with a springing maturity 91 days prior to the maturity of any outstanding indebtedness with a principal amount in excess of $17.5 million.

Pursuant to this provision, our ABL Facility will mature, resulting in amounts thereunder becoming due and payable and borrowing availability terminating, if we have not reduced the outstanding principal amount of the 2026 Notes to less than $17.5 million on or prior to December 31, 2025.

Our senior secured credit facility provides for an asset-based revolving credit facility (the “ABL Facility”) under which credit availability is subject to a borrowing base calculation.

The ABL Facility is governed by a credit agreement with Wells Fargo Bank, National Association, as administrative agent and the lenders and other financial institutions from time to time party thereto (as amended, the “ABL Agreement”).

The ABL Agreement matures on February 16, 2028.

On July 28, 2025, we amended our ABL Agreement to increase advance rates, lower interest charges and plan for the retirement of all 2026 Notes that remain outstanding at maturity in April of 2026.

See Note 4, “Long-term Debt,” to the Unaudited Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for further information regarding the ABL Agreement.

As of March 31, 2025, we had $16.2 million of outstanding letters of credit, but no borrowings outstanding under the ABL Agreement.

The total amount available to be drawn as of March 31, 2025 was $62.1 million, calculated based on the then-current borrowing base less outstanding letters of credit.

As of June 30, 2025, we had $17.1 million of outstanding letters of credit, but no borrowings outstanding under the ABL Agreement.

The total amount available to be drawn as of June 30, 2025 was $59.3 million, calculated based on the then-current borrowing base less outstanding letters of credit.

We issued $135.0 million aggregate principal amount of the 2026 Notes pursuant to an indenture, dated as of March 19, 2021 (the “2026 Indenture”), between us and Computershare Trust Company, National Association, as successor trustee.

As of March 31, 2025, we have purchased a cumulative $11.5 million principal amount of the 2026 Notes for $10.8 million in cash, with $123.5 million principal amount outstanding.

As of June 30, 2025, we have purchased a cumulative $26.3 million principal amount of the 2026 Notes for $25.1 million in cash, with $108.8 million principal amount outstanding.

The outstanding 2026 Notes will mature on April 1, 2026, unless earlier repurchased, redeemed or converted.

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See Note 4, “Long-term Debt,” to the Unaudited Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for further information regarding the 2026 Notes.

As of March 31, 2025, none of the conditions allowing holders of the 2026 Notes to convert, or requiring us to repurchase the 2026 Notes, had been met.

Our total debt represented 15% and 16% of our combined total debt and stockholders’ equity as of March 31, 2025 and December 31, 2024, respectively.

As of June 30, 2025, none of the conditions allowing holders of the 2026 Notes to convert, or requiring us to repurchase the 2026 Notes, had been met.

Our total debt represented 14% and 16% of our combined total debt and stockholders’ equity as of June 30, 2025 and December 31, 2024, respectively.

Contingencies and Other Obligations.

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Off-Balance Sheet Arrangements.

As of March 31, 2025, we had no off-balance sheet arrangements.

As of June 30, 2025, we had no off-balance sheet arrangements.

Critical Accounting Policies

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis