What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2026-07-30 compared with 2026-05-05 · 236 added, 113 removed, 238 unchanged (59% of the section changed)

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$ 80.72 $ 102.63

2025 75.87 $ 68.07 $ 69.03 $ 63.65 $ 69.14

WTI Crude (per bbl)

$ 72.74 $ 95.65

2025 71.78 $ 64.57 $ 65.78 $ 59.62 $ 65.39

Henry Hub Natural Gas (per MMBtu)

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2025 4.14 $ 3.19 $ 3.03 $ 3.73 $ 3.52

________________

Energy Information Administration (spot prices).

(2) On April 24, 2026, the spot price per barrel of Brent and WTI crude oil closed at $111.86 and $98.42, respectively.

The spot price per barrel of Brent crude oil increased $65, or 107%, during the first quarter of 2026 to $127 as of March 31, 2026 following the escalation of military actions in the Middle East in late-February 2026.

These evolving military actions have resulted in customer delays in project awards, cost increases and supply-chain and logistical constraints in the Middle East region, which have negatively impacted demand for our products and services in the area and limited our access to and increased the price of explosive powders used in our perforating operations during the first quarter of 2026.

(2) On July 28, 2026, the spot price per barrel of Brent and WTI crude oil closed at $85.51 and $80.91, respectively.

The spot price per barrel of Brent crude oil averaged $103 in the second quarter of 2026, an increase of $39, or 61%, from the fourth quarter of 2025 following the escalation of military actions in the Middle East in late-February 2026.

Despite the increases in crude oil prices, these evolving military actions have resulted in customer delays in project awards, cost increases and supply-chain and logistical constraints in the Middle East region, which have negatively impacted demand for our products and services in the area and limited our access to and increased the price of certain raw materials and other products used in our operations during the first half of 2026.

The conflict has also resulted in damage to crude oil refining and storage facilities and severely limited tanker access to the region, causing operators to shut in or limit crude oil production.

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While the ultimate impact and magnitude of these disruptions is currently unknown, a prolonged interruption to the global commodities markets has the potential to materially adversely affect our business and operations and those of our suppliers and customers.

Further, in late April 2026, the United Arab Emirates (“UAE”) announced that it was withdrawing from OPEC, and as a result, would no longer be subject to OPEC imposed production cuts.

Further, in late April 2026, the United Arab Emirates (“UAE”) announced that it was withdrawing from OPEC, and as a result, would no longer be subject to OPEC imposed production controls.

While no other countries have yet followed the UAE in leaving OPEC, increased oil and gas production from the UAE, along with any other country that may leave OPEC, could increase global oil and gas supply, resulting in lower oil and gas prices.

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These factors have negatively impacted the demand for and pricing of our products and services provided to the U.S.

land-based market and have increased the cost of certain products we manufacture in the United States when compared to the first quarter of 2025.

land-based market and have increased the cost of certain products we manufacture in the United States.

We implemented certain initiatives in 2025, which have continued into 2026, to optimize our operations and improve future returns.

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We also assessed the carrying value of certain long-lived and other assets based on the industry outlook regarding overall demand for and pricing of our products and services, market competitiveness and management decisions.

As a result of these events, actions and assessments, our reported pre-tax results for the first three months of 2026 included $2.7 million of costs associated primarily with facility exits as well as $1.4 million in non-cash asset impairment charges.

On January 28, 2026, we entered into an amended and restated cash-flow based credit agreement (the “Cash Flow Credit Agreement”) providing for aggregate lender commitments of up to:

$75.0 million under a revolving credit facility (the “Revolving Credit Facility”) and $50.0 million under a multi-draw term loan facility (the “Term Loan Facility”), replacing our existing asset-based credit agreement (the “ABL Agreement”).

As a result of these events, actions and assessments, our reported pre-tax results for the first six months of 2026 included $4.1 million of costs associated primarily with facility exits as well as $1.4 million in non-cash asset impairment charges.

On January 28, 2026, we entered into an amended and restated cash-flow based credit agreement (the “Cash Flow Credit Agreement”) providing for original aggregate lender commitments of up to:

$75.0 million under a revolving credit facility (the “Revolving Credit Facility”) and $50.0 million under a multi-draw term loan facility, which was available for a six-month period (the “Term Loan Facility”).

The Cash Flow Credit Agreement replaced our existing asset-based credit agreement (the “ABL Agreement”).

Subsequent to June 30, 2026, the Company repaid $20.0 million of outstanding borrowings under the Revolving Credit Facility with borrowings under the Term Loan Facility, and the remaining lender commitments under

the Term Loan Facility lapsed on July 28, 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 Cash Flow Credit Agreement.

On April 1, 2026, we retired the outstanding $52.7 million principal amount of our 4.75% convertible senior notes (the “2026 Notes”) with a combination of:

$25.5 million of cash on-hand;

borrowings of $25.0 million under the Revolving Credit Facility;

and the issuance of 529,428 shares of our common stock (with a fair value of $5.9 million).

We will recognize a pre-tax loss of $3.6 million on the extinguishment of the 2026 Notes at a premium in the second quarter of 2026.

On April 1, 2026, we retired $52.7 million of outstanding principal of our 4.75% convertible senior notes (the “2026 Notes”) with a combination of $50.5 million of cash and the issuance of 529,428 shares of our common stock.

With the election by substantially all holders of the outstanding 2026 Notes to convert the instruments into shares of our common stock at maturity, we recognized a pre-tax loss of $3.6 million on the extinguishment of the 2026 Notes at a premium in the second quarter of 2026.

Current and expected future pricing for crude oil and natural gas, inflationary and tariff-driven cost increases, and 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 2026 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 91% of our Offshore Manufactured Products segment’s sales in the first six months of 2026 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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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 deep-sea mineral gathering opportunities.

Backlog reported by our Offshore Manufactured Products segment decreased to $430 million as of March 31, 2026 from $435 million as of December 31, 2025.

Bookings totaled $84 million in the first quarter of 2026, yielding a book-to-bill ratio of 0.9x.

Backlog reported by our Offshore Manufactured Products segment increased to $451 million as of June 30, 2026 from $435 million as of December 31, 2025.

Bookings totaled $114 million in the second quarter of 2026, yielding a quarterly book-to-bill ratio of 1.2x (1.1x 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

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

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

Over recent years, the segment has exited the majority of its U.S.

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The Completion and Production Services segment’s results, are sensitive to near-term fluctuations in commodity prices, particularly 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 operations.

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

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.

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

As of April 24, 2026

As of July 24, 2026

Average for the

Three Months Ended March 31,

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

2026 2025 2026 2025

United States Rig Count:

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Offshore 15 15 15 17 14

587 554 571 551 579

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

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Supreme Court struck down broad tariffs previously imposed through executive orders under the International Emergency Economic Powers Act of 1977 on a wide range of imported goods.

In response, President Trump implemented a 10% import surcharge on a broad range of goods under Section 122 of the Trade Act of 1974, which are currently scheduled to expire in July 2026 unless extended.

These new tariffs target various categories of imports, including certain raw materials used in our operations, such as steel, aluminum and copper.

In response, President Trump implemented a 10% import surcharge on a broad range of goods under Section 122 of the Trade Act of 1974, which expired on July 24, 2026 pursuant to the statute's 150-day limitation.

President Trump also implemented 10% to 12.5% tariffs on imports from sixty economies under Section 301 of the Trade Act of 1974.

These tariffs, effective July 24, 2026, target various categories of imports, including certain raw materials used in our operations, such as steel, aluminum and copper.

We continue to monitor the effects of the ever-evolving global trade landscape, including with respect to sanctions, tariffs, Chinese export restrictions on tungsten-related and other products used by us, existing trade agreements, anti-dumping and countervailing duty regulations and more.

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labor market constraints;

supply chain disruptions;

supply chain and logistic disruptions;

inflation in wages, materials, parts, equipment and other costs;

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For more information on our health and safety policy and other workforce policies, please see “Part I, Item 1.

Business – Human Capital” in our Annual Report on Form 10-K for the year ended December 31, 2025.

Business – Human Capital” in our Annual Report on Form 10-K for the year ended December 31, 2025, as amended by our Annual Report filed on Form 10-K/A.

Selected Financial Data

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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, 2025, as amended by our Annual Report on Form 10-K/A, in order to understand factors, such as charges, which may impact comparability of the selected financial data.

Financial Statements and Supplementary Data” of our Annual Report on Form 10-K for the year ended December 31, 2025, as amended by our Annual Report on Form 10-K/A, 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, 2026 and 2025 (in thousands, except per share amounts):

The following summarizes our consolidated results of operations for the three and six months ended June 30, 2026 and 2025 (in thousands, except per share amounts):

Three Months Ended

2026 2025 Variance

June 30, Six Months Ended

2026 2025 Variance 2026 2025 Variance

Products $ 98,753 $ 107,342 $ (8,589) $ 191,333 $ 207,893 $ (16,560)

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Depreciation and amortization expense 8,061 11,898 (3,837) 16,250 23,923 (7,673)

Impairments of operating lease assets — 1,358 (1,358) — 1,358 (1,358)

Impairment of assets held for sale

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Interest expense, net (508) (1,692) 1,184 (1,683) (3,270) 1,587

Other income, net 148 138 10

Other income (expense), net (3,281) 636 (3,917) (3,133) 774 (3,907)

Income before income taxes 7,923 4,221 3,702 11,174 8,420 2,754

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$ 0.10 $ 0.05 $ 0.12 $ 0.10

0.10 0.05 0.12 0.10

Weighted average number of common shares outstanding:

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

Supplemental financial information by operating segment for the three months ended March 31, 2026 and 2025 is summarized below (in thousands):

Supplemental financial information by operating segment for the three and six months ended June 30, 2026 and 2025 is summarized below (in thousands):

Three Months Ended

2026 2025 Variance

June 30, Six Months Ended

2026 2025 Variance 2026 2025 Variance

Offshore Manufactured Products

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Offshore Manufactured Products $ 13,936 $ 16,989 $ (3,053) $ 28,348 $ 31,265 $ (2,917)

$ 14,412 $ 14,276 $ 136

Completion and Production Services (1)

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Downhole Technologies (2)

2,737 (3,992) 6,729 2,292 (6,116) 8,408

Corporate (3)

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_______________

(1) During the first three months of 2025, we recognized charges of $0.9 million within the Completion and Production Services segment, associated primarily with the consolidation and exit of certain underperforming service locations.

(2) During the first three months of 2026, we recognized facility exit charges of $2.5 million and a non-cash impairment charge of $1.4 million associated with assets held for sale recorded in Corporate operations.

For further discussion of charges recognized during the three months ended March 31, 2026 and 2025, see Note 2, “Asset Impairments and Other Charges,” to the Unaudited Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.

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

We reported net income for the three months ended March 31, 2026 of $1.1 million, or $0.02 per share.

The net income included restructuring and asset impairment charges of $4.1 million ($4.1 million after tax, or $0.07 per share) associated with the continued exit of certain of our U.S.

(1) 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.

(2) 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.

(3) During the three and six months ended June 30, 2026, we recognized:

facility exit charges of $1.4 million and $3.9 million, respectively, associated with assets held for sale;

a $4.1 million gain associated with the sale of a previously idled facility;

and $1.7 million of executive transition costs associated with the pending retirement of our former President and Chief Executive Officer.

Additionally, during the six months ended June 30, 2026, we recognized a non-cash impairment charge of $1.4 million associated with assets held for sale.

For further discussion of charges recognized during the three and six months ended June 30, 2026 and 2025, see Note 2, “Charges and Credits,” to the Unaudited Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.

Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025

We reported net income for the three months ended June 30, 2026 of $5.9 million, or $0.10 per share.

The reported second quarter net income included net charges of $2.5 million ($2.5 million after tax, or $0.04 per share) associated with debt extinguishment, executive transition and the continued exit of U.S.

land-based facilities, partially offset by a gain on facility disposal.

These results compare to net income for the three months ended June 30, 2025 of $2.8 million, or $0.05 per share, which included net charges of $3.3 million ($2.6 million after tax, or $0.04 per share) associated primarily with the exit of U.S.

land-based facilities and personnel reductions, partially offset by gains associated with debt extinguishment.

Our results of operations for the second quarter of 2026 reflect the impact of management’s decisions to exit certain land-based locations and service offerings in the United States, a transitory decrease in capital investments by our offshore and international customers and disruptions resulting from the military conflict in Iran.

Consolidated total revenues in the second quarter of 2026 decreased $8.7 million, or 5%, from the second quarter of 2025 due primarily to our exit of underperforming service offerings and facilities over the past 15 months and lower project-driven product sales.

Excluding the impact of exited operations, consolidated revenues decreased $2.5 million, or 2%, year-over-year.

Consolidated product revenues in the second quarter of 2026 decreased $8.6 million, or 8%, from the second quarter of 2025, with the impact of lower project-driven product sales partially offset by higher customer demand for completion and perforating products.

Consolidated service revenues in the second quarter of 2026 were comparable to the second quarter of 2025, with higher project-driven service activity offset by the impact of our exit of certain underperforming U.S.

land-based service offerings and lower customer activity in the Middle East.

The following table provides supplemental disaggregated revenue from contracts with customers by operating segment for the three months ended June 30, 2026 and 2025 (in thousands):

Offshore Manufactured Products Completion and Production Services Downhole Technologies Total

Three Months Ended June 30 2026 2025 2026 2025 2026 2025 2026 2025

Project-driven:

Products $ 51,954 $ 68,653 $ — $ — $ — $ — $ 51,954 $ 68,653

Services 32,420 27,907 — — — — 32,420 27,907

Total project-driven 84,374 96,560 — — — — 84,374 96,560

Military and other products 8,350 10,026 — — — — 8,350 10,026

Products — — — — 38,449 28,663 38,449 28,663

Services — — 24,274 29,424 1,212 733 25,486 30,157

Total short-cycle — — 24,274 29,424 39,661 29,396 63,935 58,820

$ 92,724 $ 106,586 $ 24,274 $ 29,424 $ 39,661 $ 29,396 $ 156,659 $ 165,406

By destination:

Offshore and international $ 86,608 $ 99,620 $ 12,244 $ 11,478 $ 12,741 $ 8,016 $ 111,593 $ 119,114

land 6,116 6,966 12,030 17,946 26,920 21,380 45,066 46,292

$ 92,724 $ 106,586 $ 24,274 $ 29,424 $ 39,661 $ 29,396 $ 156,659 $ 165,406

As a percentage of total:

Offshore and international 71 % 72 %

land 29 % 28 %

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 2026 decreased $7.4 million, or 6%, compared to the level reported in the second quarter of 2025.

Consolidated product costs in the second quarter of 2026 decreased $6.2 million, or 7%, from the second quarter of 2025 correlated primarily with the reduction in revenues.

Consolidated service costs in the second quarter of 2026 decreased $1.2 million, or 3%, from the second quarter of 2025, due to strategic actions implemented in our U.S.

land-based operations to improve reported results.

Selling, General and Administrative Expense.

Selling, general and administrative expense was $23.1 million in the second quarter of 2026.

This compares to an expense of $23.0 million in the second quarter of 2025, with the impact of implemented cost reduction measures partially offset by $1.7 million of executive transition costs associated with the pending retirement of our former President and Chief Executive Officer and higher short-term incentive compensation accruals.

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

Depreciation and Amortization Expense.

Depreciation and amortization expense decreased $3.8 million, or 32%, in the second quarter of 2026 compared to the prior-year quarter due primarily to the impact of asset impairments recorded in the fourth quarter of 2025.

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

Impairments 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.

These results compare to net income for the three months ended March 31, 2025 of $3.2 million, or $0.05 per share.

Our results of operations for the first three months of 2026 reflect the impact of management’s decisions to exit certain land-based locations and service offerings in the United States, a transitory decrease in capital investments by our offshore and international customers, disruptions resulting from the military conflict in Iran and increased U.S.

As a result of these decisions, our Completion and Production 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, “Charges and Credits,” to the Unaudited Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for additional discussion.

Other Operating Income, Net.

Other operating income, net primarily includes gains and losses recognized on the sale of property and equipment and costs related to assets held for sale within Corporate in 2026.

In the second quarter of 2026, we recognized $1.4 million of facility exit costs associated with assets held for sale within Corporate and a gain of $4.1 million in connection with the sale of a facility classified within assets held for sale.

During the second quarter of 2025, we recognized gains of $2.6 million associated with the sale of assets.

Operating Income (Loss).

Our consolidated operating income was $11.7 million in the second quarter of 2026, which included $1.7 million in executive transition costs and $1.4 million in charges associated with the continued exit of our U.S.

land-based facilities.

This compares to second quarter 2025 consolidated operating income of $5.3 million, which included $1.4 million in operating lease asset impairment charges and $2.3 million of charges associated with facility exits and other management actions.

Excluding these charges, operating income increased by $5.8 million year-over-year, with the impact of the $3.8 million decrease in depreciation and amortization expense and an incremental increase of $1.9 million in gains on the sale of assets, partially offset by the impact of the decline in revenue.

Other Income (Expense), Net.

On April 1, 2026, we retired $52.7 million of outstanding principal of the 2026 Notes, with a combination of $50.5 million in cash and the issuance of 529,428 shares of our common stock.

With the election by substantially all holders of the outstanding 2026 Notes to convert the instruments into shares of our common stock at maturity, we recognized a pre-tax loss of $3.6 million associated with the extinguishment of the 2026 Notes at a premium in the second quarter of 2026.

Interest Expense, Net.

Net interest expense totaled $0.5 million in the second quarter of 2026, due to the retirement of the 2026 Notes on April 1.

This compares to $1.7 million in the same period of 2025.

For the three months ended June 30, 2026, our income tax provision was $2.0 million, which included the impact of changes in valuation allowance recorded against deferred tax assets, certain discrete tax items and other non-deductible expenses, on pre-tax income of $7.9 million.

This compares to an income tax provision of $1.4 million, which included the impact of changes in valuation allowances recorded against deferred tax assets, certain discrete tax items and other non-deductible expenses, on pre-tax income of $4.2 million for the three months ended June 30, 2025.

Other Comprehensive Income.

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

Other comprehensive income was $0.7 million in the second quarter of 2026 compared to other comprehensive income of $9.1 million in the second quarter of 2025 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, 2026 and 2025, currency translation adjustments recognized as a component of other comprehensive income were primarily attributable to the United Kingdom and Brazil.

During both the second quarter of 2026 and 2025, the exchange rates for the British pound and the Brazilian real strengthened compared to the U.S.

Segment Operating Results

Offshore Manufactured Products

Our Offshore Manufactured Products segment revenues decreased $13.9 million, or 13%, in the second quarter of 2026 compared to the second quarter of 2025 due to lower project-driven product sales, partially offset by the impact of higher service activity.

Operating Income.

Our Offshore Manufactured Products segment reported operating income of $13.9 million in the second quarter of 2026.

This compares to operating income in the second quarter of 2025 of $17.0 million.

The $3.1 million decline in operating income was driven primarily by the revenue decline.

Backlog in our Offshore Manufactured Products segment totaled $451 million as of June 30, 2026, with second quarter 2026 bookings of $114 million and a quarterly book-to-bill ratio of 1.2x.

Completion and Production Services

Our Completion and Production Services segment revenues decreased $5.2 million, or 18%, in the second quarter of 2026 compared to the prior-year period, driven by the exit of underperforming U.S.

land-based service offerings and facilities and lower customer activity in the Middle East.

Excluding the impact of exited operations, revenues increased $1.1 million, or 5%, year-over-year.

Operating Income.

Our Completion and Production Services segment reported operating income of $3.9 million in the second quarter of 2026.

This compares to 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.

Excluding these 2025 charges, the Completion and Production Services segment’s operating income declined $0.1 million from the prior-year period, due primarily to a $2.2 million reduction in gains on the sale of assets, substantially offset by a $1.6 million reduction in depreciation and amortization expense and strategic actions implemented to improve reported results.

Downhole Technologies

Our Downhole Technologies segment revenues increased $10.3 million, or 35%, in the second quarter of 2026 from the prior-year period, driven by higher demand for perforating and completion products following our new product introductions.

Operating Income (Loss).

Our Downhole Technologies segment reported operating income of $2.7 million in the second quarter of 2026.

This compares to 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.

Excluding these 2025 charges, the Downhole Technologies operating results improved $5.5 million year-over-year, driven primarily by the reported increase in revenues and a $2.5 million reduction in depreciation and amortization expense.

Operating Loss.

Corporate expenses totaled $8.9 million in the second quarter of 2026, which included a $4.1 million gain recognized on the sale of a previously idled facility, $1.7 million of executive transition costs and $1.4 million in charges associated with ongoing actions to monetize assets held for sale.

This compares to Corporate expenses of $9.6 million in the second quarter of 2025.

Excluding the 2026 charges and credits, Corporate expenses increased $0.4 million year-over-year due primarily to higher short-term incentive compensation accruals.

Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025

We reported net income for the six months ended June 30, 2026 of $7.0 million, or $0.12 per share.

The reported net income included net charges of $6.6 million ($6.6 million after tax, or $0.11 per share) associated primarily with the continued exit of certain of our U.S.

land-based facilities, debt extinguishment and executive transition, partially offset by a gain on facility disposal.

These results compare to net income for the six months ended June 30, 2025 of $6.0 million, or $0.10 per share, which included net charges of $4.2 million ($3.3 million after tax, or $0.06 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 gains associated with debt extinguishment.

Our results of operations for the first six months of 2026 reflect the impact of management’s decisions to exit certain land-based locations and service offerings in the United States, a transitory decrease in capital investments by our offshore and international customers, disruptions resulting from the military conflict in Iran and increased U.S.

trade tariffs.

Consolidated total revenues in the first three months of 2026 decreased $14.6 million, or 9%, from the first three months of 2025 driven primarily by our exit of underperforming service offerings and locations over the past 15 months.

Excluding the impact of exited operations, consolidated revenues declined $3.1 million year-over-year.

Consolidated product revenues in the first three months of 2026 decreased $8.0 million, or 8%, from the first three months of 2025, due to lower connector, valve and production platform product sales.

Consolidated service revenues in the first three months of 2026 decreased $6.6 million, or 11%, from the first three months of 2025.

This decrease was concentrated in the United States, given our exit of certain underperforming land-based service offerings, partially offset by higher project-driven service activity.

The following table provides supplemental disaggregated revenue from contracts with customers by operating segment for the three months ended March 31, 2026 and 2025 (in thousands):

Consolidated total revenues in the first six months of 2026 decreased $23.3 million, or 7%, from the first six months of 2025 driven primarily by our exit of underperforming service offerings and locations over the past 18 months.

Excluding the impact of exited operations, consolidated revenues declined $5.6 million, or 2%, year-over-year.

Consolidated product revenues in the first six months of 2026 decreased $16.6 million, or 8%, from the first six months of 2025, due to lower project-driven connector, valve and crane product sales partially offset by higher perforating and completion product revenues.

Consolidated service revenues in the first six months of 2026 decreased $6.8 million, or 6%, from the first six months of 2025.

This decrease was driven by the exit of underperforming U.S.

land-based service offerings and lower customer activity in the Middle East, partially offset by higher project-driven service activity.

The following table provides supplemental disaggregated revenue from contracts with customers by operating segment for the six months ended June 30, 2026 and 2025 (in thousands):

Offshore Manufactured Products Completion and Production Services Downhole Technologies Total

Three Months Ended March 31 2026 2025 2026 2025 2026 2025 2026 2025

Six Months Ended June 30 2026 2025 2026 2025 2026 2025 2026 2025

Project-driven:

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

Our consolidated total cost of revenues (exclusive of depreciation and amortization expense) in the first three months of 2026 decreased $11.1 million, or 9%, compared to the first three months of 2025.

Consolidated product costs in the first three months of 2026 decreased $6.0 million, or 7%, compared to the first three months of 2025 due primarily to reduction in revenues.

Consolidated service costs in the first three months of 2026 decreased $5.1 million, or 12%, compared to the first three months of 2025, due to lower revenue levels and the strategic actions implemented in our U.S.

Our consolidated total cost of revenues (exclusive of depreciation and amortization expense) in the first six months of 2026 decreased $18.5 million, or 7%, compared to the first six months of 2025.

Consolidated product costs in the first six months of 2026 decreased $12.2 million, or 7%, compared to the first six months of 2025 due primarily to reduction in revenues.

Consolidated service costs in the first six months of 2026 decreased $6.3 million, or 8%, compared to the first six months of 2025, 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 $20.0 million in the first three months of 2026, which compares to expense of $22.5 million in the first three months of 2025.

This year-over-year decrease is primarily associated with reduced personnel levels and short-term incentive compensation accruals.

Selling, general and administrative expense totaled $43.2 million in the first six months of 2026, which compares to expense of $45.5 million in the first six months of 2025.

This year-over-year decrease is primarily associated with reduced personnel levels and commissions, partially offset by $1.7 million in executive transition costs.

Depreciation and Amortization Expense.

Depreciation and amortization expense in the first three months of 2026 decreased $3.8 million, or 32%, compared to the prior-year period due primarily to the impact of asset impairments recorded in the fourth quarter of 2025.

Depreciation and amortization expense in the first six months of 2026 decreased $7.7 million, or 32%, compared to the prior-year period due primarily to the impact of asset impairments recorded in the fourth quarter of 2025.

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.

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

Impairment of Assets Held for Sale.

During the first three months of 2026, we made a decision to sell additional equipment, which was reclassified to assets held for sale.

During the first six months of 2026, management made a decision to sell additional equipment, which was reclassified to assets held for sale.

The carrying value of these assets held for sale were reduced to their estimated fair value, resulting in the recognition of a $1.4 million non-cash impairment charge.

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.

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

Other Operating Income, Net.

During the first three months of 2026, we recognized $2.5 million of facility exit cost associated with assets held for sale within our Corporate operations.

Other operating income, net primarily includes gains and losses recognized on the sale of property and equipment and costs related to assets classified as held for sale within Corporate in 2026.

During the first six months of 2026, we recognized $3.9 million of facility exit costs associated with assets held for sale within Corporate.

Gains recognized on the sale of assets during the first six months of 2026 and 2025 each totaled $4.8 million.

Operating Income.

Our consolidated operating income was $4.3 million in the first three months of 2026, which included $1.4 million in non-cash asset impairment charges as well as other charges totaling $2.7 million associated with the continued exit of our U.S.

land-based operations and facilities.

This compares to a consolidated operating income of $5.6 million in the first three months of 2025, which included $0.9 million associated with facility consolidations and exits.

Excluding these charges, operating results improved by $1.8 million year-over-year, with the impact of a $3.8 million decrease in depreciation and amortization expense substantially offset by the impact of the revenue decline and lower gains on the sale of assets.

Our consolidated operating income was $16.0 million in the first six months of 2026, which included charges totaling $4.1 million associated with the continued exit of our U.S.

land-based facilities, $1.7 million of executive transition costs and $1.4 million in non-cash asset impairment charges.

This compares to a consolidated operating income of $10.9 million in the first six months of 2025, which included $1.4 million in operating lease asset impairment charges as well as charges totaling $3.2 million associated with facility consolidations and exits and other management actions.

Excluding these charges, operating results improved by $7.6 million year-over-year, driven by a $7.7 million decrease in depreciation and amortization expense and implemented cost reduction measures, partially offset by the impact of the decline in revenue.

Interest Expense, Net.

Net interest expense totaled $1.2 million in the first three months of 2026, which compares to $1.6 million in the first three months of 2025.

Interest expense as a percentage of total debt outstanding was approximately 8% in the first three months of 2026 and 7% in the first three months of 2025.

For the first three months of 2026, our income tax provision was $2.1 million, which included the impact of changes in valuation allowances recorded against deferred tax assets, certain discrete tax items and other non-deductible expenses, on pre-tax income of $3.3 million.

This compares to an income tax provision of $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 for the first three months of 2025.

Net interest expense totaled $1.7 million in the first six months of 2026, which compares to $3.3 million in the first six months of 2025.

The year-over-year decline in net interest expense was driven by the April 1, 2026 retirement of the 2026 Notes.

Other Income (Expense), Net.

On April 1, 2026, we retired $52.7 million of outstanding principal of the 2026 Notes at a premium and recognized an associated pre-tax loss of $3.6 million.

For the first six months of 2026, our income tax provision was $4.2 million, which included the impact of changes in valuation allowances recorded against deferred tax assets, certain discrete tax items and other non-deductible expenses, on pre-tax income of $11.2 million.

This compares to an income tax provision of $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 for the first six months of 2025.

Other Comprehensive Income (Loss).

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

Other comprehensive loss was $1.2 million in the first three months of 2026 compared to other comprehensive income of $5.5 million in the first three months of 2025 due to fluctuations in foreign currency exchange rates compared to the U.S.

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

Other comprehensive loss was $0.5 million in the first six months of 2026 compared to other comprehensive income of $14.6 million in the first six months of 2025 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 2026 and 2025, 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 2026, the exchange rate for the British pound weakened compared to the U.S.

For the first six months of 2026 and 2025, 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 2026, the exchange rate for the British pound weakened compared to the U.S.

dollar while the Brazilian real strengthened compared to the U.S.

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

Segment Operating Results

Offshore Manufactured Products

Our Offshore Manufactured Products segment revenues declined $1.2 million, or 1%, in the first three months of 2026 compared to the first three months of 2025 due primarily to lower demand for the segment’s international and offshore project-driven connector, valve and production platform products, substantially offset by higher service activity.

Our Offshore Manufactured Products segment revenues declined $15.0 million, or 8%, in the first six months of 2026 compared to the first six months of 2025 due primarily to lower sales of project-driven connector, valve and crane products, partially offset by higher service activity.

Operating Income.

Our Offshore Manufactured Products segment reported operating income of $14.4 million in the first three months of 2026.

This compares to operating income of $14.3 million in the first three months of 2025.

Backlog in our Offshore Manufactured Products segment totaled $430 million as of March 31, 2026 compared to $435 million as of December 31, 2025.

Bookings during the first three months of 2026 were $84 million, yielding a book-to-bill ratio of 0.9x.

Our Offshore Manufactured Products segment reported operating income of $28.3 million in the first six months of 2026.

This compares to operating income of $31.3 million in the first six months of 2025.

The $2.9 million decline in operating income was driven primarily by the revenue decline.

Backlog in our Offshore Manufactured Products segment totaled $451 million as of June 30, 2026 compared to $435 million as of December 31, 2025.

Bookings during the first six months of 2026 were $199 million, yielding a book-to-bill ratio of 1.1x.

Completion and Production Services

Our Completion and Production Services segment revenues decreased $13.0 million, or 38%, in the first three months of 2026 compared to the first three months of 2025, driven primarily by the exit of underperforming U.S.

Our Completion and Production Services segment revenues decreased $18.2 million, or 28%, in the first six months of 2026 compared to the first six months of 2025, driven primarily by the exit of underperforming U.S.

land-based service offerings and facilities.

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Operating Income.

Our Completion and Production Services segment reported operating income of $3.5 million in the first three months of 2026.

This compares to operating income of $3.5 million in the first three months of 2025, which included charges totaling $0.9 million associated with facility consolidations and exits.

Excluding the 2025 charges, the Completion and Production Services segment’s operating results declined $0.9 million from the prior-year period, due primarily to lower offshore and international activity levels, partially offset by a $1.8 million reduction in depreciation and amortization expense.

Our Completion and Production Services segment reported operating income of $7.4 million in the first six months of 2026.

This compares to operating income of $5.4 million in the first six months of 2025, which included charges totaling $3.1 million associated with facility consolidations and exits.

Excluding the 2025 charges, the Completion and Production Services segment’s operating results declined $1.1 million from the prior-year period, due primarily to a $4.1 million reduction in gains on the sale of assets, partially offset by a $3.4 million reduction in depreciation and amortization expense.

Downhole Technologies

Our Downhole Technologies segment revenues decreased $0.4 million, or 1%, in the first three months of 2026 from the first three months of 2025, driven by lower U.S.

customer activity levels and competitive market conditions.

Operating Loss.

Our Downhole Technologies segment reported an operating loss of $0.4 million in the first three months of 2026.

This compares to an operating loss of $2.1 million reported in the first three months of 2025.

The $1.7 million improvement in operating results was due primarily to a $2.5 million reduction in depreciation and amortization expense, partially offset by the reported revenue decline.

Our Downhole Technologies segment revenues increased $9.9 million, or 16%, in the first six months of 2026 from the first six months of 2025, driven by higher demand for perforating and completion products following our new product introductions.

Operating Income (Loss).

Our Downhole Technologies segment reported an operating income of $2.3 million in the first six months of 2026.

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

Excluding the 2025 charges, the Downhole Technologies segment operating results improved $7.2 million year-over-year, driven by a $5.0 million reduction in depreciation and amortization expense and contributions from the revenue increase.

Operating Loss.

Corporate expenses totaled $13.2 million in the first three months of 2026, which included a $1.4 million impairment of assets held for sale and costs totaling $2.5 million associated with ongoing plans to monetize assets held for sale.

This compares to Corporate expenses of $10.0 million in the first three months of 2025.

Excluding these items, Corporate expenses decreased $0.7 million year-over-year due primarily to lower short-term incentive compensation accruals.

Corporate expenses totaled $22.1 million in the first six months of 2026, which included a $4.1 million gain recognized on the sale of a previously idled facility, costs totaling $3.9 million associated with ongoing actions to monetize assets held for sale, $1.7 million of executive transition costs and a $1.4 million impairment of assets held for sale.

This compares to Corporate expenses of $19.6 million in the first six months of 2025.

Excluding these items, Corporate expenses decreased $0.3 million year-over-year.

Liquidity, Capital Resources and Other Matters

Our primary liquidity needs are to fund operating and capital expenditures, new product development, general working capital needs and debt repayment, including the repayment of the 2026 Notes upon their maturity on April 1, 2026.

Our primary liquidity needs are to fund operating and capital expenditures, new product development, general working capital needs and debt repayment.

In addition, capital has been used to fund share repurchases and strategic business acquisitions.

Our primary sources of funds are cash on-hand, cash flow from operations and proceeds from borrowings under our Cash Flow Credit Agreement, and, less frequently, capital markets transactions.

Our primary sources of funds are cash on-hand, cash flow from operations and proceeds from borrowings under our Cash Flow Credit Agreement, and, less frequently, capital markets transactions and additional contributions from asset sales.

Operating Activities

Cash flows used in operations totaled $1.9 million during the first three months of 2026, compared to $9.3 million generated by operations during the first three months of 2025.

During the first three months of 2026, $13.3 million was used to fund net working capital increases, primarily due to an increase in inventories, 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 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.

Cash flows used in operations totaled $8.1 million during the first six months of 2026, compared to $24.3 million generated by operations during the first six months of 2025.

During the first six months of 2026, $34.6 million was used to fund net working capital increases, primarily due to an increase in inventories, 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 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.

Investing Activities

Net cash used in investing activities during the first three months of 2026 totaled $3.4 million, compared to nil provided by investing activities during the first three months of 2025, with proceeds from asset sales offsetting capital expenditures.

Capital expenditures totaled $4.2 million and $9.2 million during the first three months of 2026 and 2025, respectively.

These investments were offset by proceeds from the sale of property and equipment, and assets held for sale of $0.9 million and $9.2 million during the first three months of 2026 and 2025, respectively.

Net cash provided by investing activities during the first six months of 2026 totaled $0.9 million, compared to $6.9 million used in investing activities during the first six months of 2025, with proceeds from asset sales offsetting capital expenditures in 2026.

Capital expenditures totaled $7.1 million and $19.5 million during the first six months of 2026 and 2025, respectively.

These investments were offset by proceeds from the sale of property, equipment and assets held for sale of $8.0 million and $12.6 million during the first six months of 2026 and 2025, respectively.

Financing Activities

On January 28, 2026, we entered into the Cash Flow Credit Agreement (further discussed below), which replaced our existing ABL Agreement.

During the first three months of 2026, net cash of $6.0 million was used in financing activities, which included shares added to treasury stock as a result of net share settlements associated with the vesting of stock awards and payment of financing cost related to the Cash Flow Credit Agreement.

This compares to $8.0 million of cash used in financing activities during the first three months of 2025, which included the repurchase of $5.3 million of our common stock.

As of March 31, 2026, we had cash and cash equivalents totaling $59.0 million, no borrowings outstanding under our Cash Flow Credit Agreement, $52.7 million principal amount of our 2026 Notes outstanding and other debt of $2.2 million.

Our reported interest expense included amortization of deferred financing costs of $0.8 million during the first three months of 2026.

For the first three months of 2026, our contractual cash interest expense was $0.8 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 the Cash Flow Credit Agreement will be sufficient to meet our liquidity needs in the coming twelve months, including full retirement of our 2026 Notes upon maturity on April 1, 2026.

During the first six months of 2026, net cash of $43.3 million was used in financing activities, which included the use of $50.5 million in cash to retire our 2026 Notes, net borrowings of $18.6 million under our Cash Flow Credit Agreement, the purchase of 583,541 shares of our common stock for $5.1 million, shares added to treasury stock as a result of net share settlements associated with the vesting of stock awards and payment of financing cost related to the Cash Flow Credit Agreement.

This compares to $29.1 million of cash used in financing activities during the first six months of 2025, which included the purchase of $14.8 million principal amount of our outstanding 2026 Notes for $14.3 million in cash, the repurchase of $12.0 million of our common stock and shares added to treasury stock as a result of net share settlements associated with the vesting of stock awards.

As of June 30, 2026, we had cash and cash equivalents totaling $19.8 million, $18.6 million in borrowings outstanding under our Cash Flow Credit Agreement and other debt of $2.0 million.

Our reported interest expense included amortization of deferred financing costs of $0.9 million during the first six months of 2026.

For the first six months of 2026, our contractual cash interest expense was $1.4 million, or approximately 7% of the average principal balance of debt outstanding.

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

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

The amount remaining under our share repurchase authorization as of March 31, 2026 was $24.7 million.

During the six months ended June 30, 2026, $5.1 million in repurchases of common stock were made under this program.

The amount remaining under our share repurchase authorization as of June 30, 2026 was $19.6 million.

Revolving Credit and Term Loan Facilities.

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The Cash Flow Credit Agreement provides for aggregate lender commitments of up to:

$75.0 million under the Revolving Credit Facility and $50.0 million under the multi-draw Term Loan Facility, which is available through July 28, 2026.

$75.0 million under the Revolving Credit Facility and $50.0 million under the multi-draw Term Loan Facility, which was available for a six-month period.

Subsequent to June 30, 2026, we repaid $20.0 million of outstanding borrowings under the Revolving Credit Facility with borrowings under the Term Loan Facility.

The remaining lender commitments under the Term Loan Facility lapsed on July 28, 2026.

The Cash Flow Credit Agreement replaced the ABL Agreement discussed below and matures in January 2030.

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Prior to entering into the Cash Flow Credit Agreement, our senior secured credit facility provided for a $100.0 million asset-based revolving credit facility under which credit availability was subject to a borrowing base calculation.

As of March 31, 2026, we had no borrowings outstanding under the Cash Flow Credit Agreement and $12.7 million of outstanding letters of credit.

As of June 30, 2026, we had $18.6 million borrowings outstanding under the Cash Flow Credit Agreement and $16.7 million of outstanding letters of credit.

As of July 28, 2026, we had $26.2 million in borrowings outstanding under the Cash Flow Credit Agreement and $15.9 million of outstanding letters of credit, leaving $52.9 million available to be drawn.

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, 2026, $52.7 million principal amount of the 2026 Notes was outstanding.

The outstanding 2026 Notes matured and were retired on April 1, 2026, with a combination of:

$25.5 million of cash on-hand;

borrowings of $25.0 million under the Revolving Credit Facility;

and the issuance of 529,428 shares of the Company’s common stock (with a fair value of $5.9 million).

The Company will recognize a pre-tax loss of $3.6 million associated with the extinguishment of the 2026 Notes at a premium in the second quarter of 2026.

Our total debt represented 9% of our combined total debt and stockholders’ equity as of both March 31, 2026 and December 31, 2025.

On April 1, 2026, we retired $52.7 million of outstanding principal of the 2026 Notes, with a combination of $50.5 million of cash and the issuance of 529,428 shares of our common stock (with a fair value of $5.9 million).

With the election by substantially all holders of the outstanding 2026 Notes to convert the instruments into shares of our common stock at maturity, we recognized a pre-tax loss of $3.6 million associated with the extinguishment of the 2026 Notes at a premium in the second quarter of 2026.

Our total debt represented 3% and 9% of our combined total debt and stockholders’ equity as of June 30, 2026 and December 31, 2025, respectively.

Contingencies and Other Obligations.

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Off-Balance Sheet Arrangements.

As of March 31, 2026, we had no off-balance sheet arrangements.

As of June 30, 2026, 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