OIL STATES INTERNATIONAL, INC

Previous wording

Demand for our products and services is cyclical and substantially dependent upon activity levels in the oil and gas industry, particularly our customers’ willingness to invest capital in the exploration for and development of crude oil and natural gas reserves. Our customers’ capital spending programs are generally based on their cash flows and their outlook for near-term and long-term commodity prices, making demand for our products and services sensitive to expectations regarding future crude oil and natural gas prices, as well as economic growth, commodity demand and estimates of resource production and regulatory pressures related to Environmental, Social and Governance (“ESG”) considerations.

Current wording

We provide a broad range of manufactured products and services to customers in the energy, industrial and military sectors through our Offshore Manufactured Products, Completion and Production Services and Downhole Technologies segments. Demand for our products and services is cyclical and substantially dependent upon activity levels in the oil and gas industry, particularly our customers’ willingness to invest capital in the exploration for and development of crude oil and natural gas reserves. Our customers’ capital spending programs are generally based on their cash flows and their outlook for near-term and long-term commodity prices, making demand for our products and services sensitive to expectations regarding future crude oil and natural gas prices, as well as economic growth, commodity demand and estimates of resource production and regulatory pressures.

Previous wording

In 2023, we began implementing initiatives, which are continuing into 2024, to reduce future costs. Management actions to-date in 2024 included: the consolidation, relocation and exit of certain underperforming locations; the exit of certain service offerings; reductions in our U.S. work force as well as the realignment of operations discussed above. We have 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 nine months ended September 30, 2024 included $23.4 million in non-cash goodwill, intangible and operating lease asset impairment charges as well as $11.8 million of facility consolidation and exit, patent defense and other charges.

Current wording

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; 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.

Previous wording

During the nine months ended September 30, 2024, our Offshore Manufactured Products segment sold a manufacturing and service facility that was classified as held for sale for net proceeds of $10.3 million, we purchased $11.5 million principal amount of our 2026 Notes (as defined below) for $10.8 million, and we purchased $5.5 million of our common stock.

Current wording

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.

Previous wording

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. Expectations for the longer-term price for Brent crude oil will continue to influence our customers’ spending related to global offshore drilling and development and, thus, a significant portion of the activity of our Offshore Manufactured Products segment.

Current wording

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. Expectations for the longer-term price for Brent crude oil will continue to influence our customers’ spending related to global offshore and international drilling and development and, thus, a significant portion of the activity of our Offshore Manufactured Products segment.

Previous wording

Crude oil and natural gas prices and levels of demand for crude oil and natural gas are likely to remain highly volatile due to numerous factors, including: geopolitical conflicts in Europe and the Middle East, along with associated international tensions; the perceived risk of a global economic recession; the levels of domestic or international crude oil and natural gas production; changes in governmental rules and regulations; sanctions; the willingness of operators to invest capital in the exploration for and development of resources; use of alternative fuels; improved vehicle fuel efficiency; timing of capital investments in alternative energy sources; a more sustained movement to electric vehicles; and the potential for ongoing supply/demand imbalances.

Current wording

Crude oil and natural gas prices and levels of demand for crude oil and natural gas are likely to remain highly volatile due to numerous factors, including: geopolitical conflicts in Europe and the Middle East, along with associated international tensions; the moderate perceived risk of a global economic recession; the levels of domestic or international crude oil and natural gas production; changes in governmental rules and regulations; sanctions; tariffs; the willingness of operators to invest capital in the exploration for and development of resources; use of alternative fuels; improved vehicle fuel efficiency; timing of capital investments in alternative energy sources; a more sustained movement to electric vehicles; and the potential for ongoing supply/demand imbalances.

Previous wording

Customer spending in the natural gas shale plays has moderated over the last ten years due to technological advancements that have led to significant amounts of natural gas being produced from prolific basins in the Northeastern United States and from associated gas produced from the drilling and completion of unconventional oil wells in the United States.

Current wording

Customer spending in the natural gas shale plays has declined in recent years due to technological advancements and consolidation of oil and gas producers that have led to significant amounts of natural gas being produced from prolific basins in the Northeastern United States and from associated gas produced from the drilling and completion of unconventional oil wells in the United States. However, the extended outlook for natural gas in the United States is positive with increased exports of LNG, as well as increased power needs for the technology sector, namely data centers.

Previous wording

Our Offshore Manufactured Products segment provides technology-driven, highly-engineered products and services for offshore oil and natural gas production systems and facilities globally, as well as certain products and services to the offshore drilling and completion markets. 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. 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 89% of Offshore Manufactured Products segment sales in the first nine months of 2024 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. Such projects are generally undertaken by larger exploration, field development and production companies (primarily international oil companies and state-run national oil companies) using relatively conservative crude oil and natural gas pricing assumptions. 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.

Current wording

Our Offshore Manufactured Products segment provides technology-driven, highly-engineered products and services for offshore oil and natural gas production systems and facilities globally, as well as certain products and services to the offshore drilling and completion markets. 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”). Deepwater oil and gas development projects typically involve significant capital investments and multi-year development plans. Such projects are generally undertaken by larger exploration, field development and production companies (primarily international oil companies and state-run national oil companies) using relatively conservative crude oil and natural gas pricing assumptions. 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. 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.

Previous wording

Backlog reported by our Offshore Manufactured Products segment increased to $313 million as of September 30, 2024 from $300 million as of June 30, 2024. Bookings totaled $112 million in the third quarter of 2024, yielding a quarterly book-to-bill ratio of 1.1x (1.0x year-to-date). The following table sets forth backlog as of the dates indicated (in millions).

Current wording

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

Previous wording

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

Current wording

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. U.S. 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. 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.

Previous wording

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. 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 plug, toe valve 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. 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.

Current wording

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. 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. 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.

Previous wording

We use a variety of domestically produced and imported raw materials and component products, including steel, in the manufacture of our products. The United States has imposed tariffs on a variety of imported products, including steel and aluminum. In response to the U.S. tariffs on steel and aluminum, the European Union and several other countries, including Canada and China, have threatened and/or imposed retaliatory tariffs. 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. 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. 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.

Current wording

We use a variety of domestically produced and imported raw materials and component products, including steel, in the manufacture of our products. In the first quarter of 2025, the United States imposed new or additional tariffs on a variety of imported raw materials and products, including steel and aluminum. In response to the U.S. tariffs on steel and aluminum, the European Union and several other countries, including Canada and China, have threatened and/or imposed retaliatory tariffs. 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. 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. 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.

Previous wording

Other factors that can affect our business and financial results include but are not limited to: the general global economic environment; competitive pricing pressures; customer consolidations; public health crises; natural disasters; labor market constraints; supply chain disruptions; inflation in wages, materials, parts, equipment and other costs; climate-related and other regulatory changes; geopolitical conflicts and tensions; management’s implementation of strategic decisions; and changes in tax laws in the United States and international markets. We continue to monitor the global economy, the prices of and demand for crude oil and natural gas, and the resultant impact on the capital spending plans and operations of our customers in order to plan and manage our business.

Current wording

Other factors that can affect our business and financial results include but are not limited to: the general global economic environment; competitive pricing pressures; customer consolidations; labor market constraints; supply chain disruptions; inflation in wages, materials, parts, equipment and other costs; climate-related and other regulatory changes; geopolitical conflicts and tensions; management’s implementation of strategic decisions; public health crises; natural disasters; and changes in tax laws in the United States and in the international markets in which we operate. We continue to monitor the global economy, the prices of and demand for crude oil and natural gas, and the resultant impact on the capital spending plans and operations of our customers in order to plan and manage our business.

Previous wording

For more information on our health and safety, diversity 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, 2023.

Current wording

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, 2024.

Previous wording

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, 2023 in order to understand factors, such as charges and credits, which may impact comparability of the selected financial data.

Current wording

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.

Previous wording

The following summarizes our consolidated results of operations for the three and nine months ended September 30, 2024 and 2023 (in thousands, except per share amounts):

Current wording

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

Previous wording

We manage and measure our business performance in three distinct operating segments: Offshore Manufactured Products, Completion and Production Services and Downhole Technologies. Supplemental financial information by operating segment for the three and nine months ended September 30, 2024 and 2023 is summarized below (in thousands):

Current wording

We manage and measure our business performance in three distinct 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):

Previous wording

(1)During the three and nine months ended September 30, 2024, the Offshore Manufactured Products segment recognized facility consolidation and other charges of $0.4 million and$3.4 million, respectively, associated primarily with the consolidation and relocation of a manufacturing and service location. During the three and nine months ended September 30, 2023, the segment recognized facility consolidation charges of $1.6 million associated primarily with the consolidation and relocation of certain manufacturing and service locations.

Current wording

(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.

Previous wording

(2)During the three and nine months ended September 30, 2024, the Completion and Production Services segment recognized charges of $17.2 million and $21.1 million, respectively, associated primarily with the exit of its flowback and well testing service offering, the consolidation and exit of certain underperforming service locations, and the defense of certain patents.

Current wording

(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.

Previous wording

(3)During the both three and nine months ended September 30, 2024, the Downhole Technologies segment recognized charges of $0.6 million associated primarily with the exit of an underperforming location. Additionally during the nine months ended September 30, 2024, the segment recognized a $10.0 million non-cash impairment charge related to goodwill reassigned to the business in connection with the segment realignment discussed above.

Current wording

(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.

Previous wording

For further discussion of charges and credits recognized during the three and nine months ended September 30, 2024 and 2023, 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.

Current wording

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.

Previous wording

We reported a net loss for the three months ended September 30, 2024 of $14.3 million, or $0.23 per share. The reported third quarter net loss included charges of $18.2 million ($17.0 million after tax, or $0.27 per share) associated with the restructuring of certain of its U.S. land-based operations, facility consolidations and closures, patent defense and personnel reductions. These results compare to net income for the three months ended September 30, 2023 of $4.2 million, or $0.07 per share, which included facility consolidation and other charges of $1.6 million ($1.3 million after-tax, or $0.02 per share).

Current wording

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).

Previous wording

Our results of operations for the first nine months of 2024 reflect the impact of operators continued investment in offshore and international project activity and associated backlog conversion, partially offset by a decline in land-based investments by our U.S. customers, competitive market conditions and management’s decision to exit certain underperforming locations and service offerings in the United States. Management expects to continue to implement measures to reduce costs in areas experiencing lower activity levels.

Current wording

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.

Previous wording

Consolidated product revenues in the first nine months of 2024 increased $8.6 million, or 3%, from the first nine months of 2023, with the impact of higher customer demand for project-driven production facility products and military products partially offset by a decline in U.S. customer demand for completion and perforating products. Consolidated service revenues in the first nine months of 2024 decreased $54.6 million, or 20%, from the first nine months of 2023. This decrease was concentrated in the United States – driven by lower land-based customer investments (particularly in natural gas basins), competitive market conditions and our exit of certain underperforming locations during the first half of 2024, partially offset by higher offshore and international service activity.

Current wording

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. 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).

Previous wording

Cost of Revenues (exclusive of Depreciation and Amortization Expense). Our consolidated total cost of revenues (exclusive of depreciation and amortization expense) decreased $32.6 million, or 7%, in the first nine months of 2024 compared to the first nine months of 2023.

Current wording

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.

Previous wording

Selling, General and Administrative Expense. Selling, general and administrative expense was $71.6 million in the first nine months of 2024, which included $2.7 million of costs associated with enforcing certain of our patents. Excluding these patent defense costs, selling, general and administrative costs decreased $2.8 million, or 4%, from the level reported in the first nine months of 2023, due primarily to lower short- and long-term incentive expenses.

Current wording

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.

Previous wording

Depreciation and Amortization Expense. Depreciation and amortization expense decreased $3.7 million, or 8%, in the first nine months of 2024 compared to the prior-year period. Note 10, “Segments and Related Information,” to our Unaudited Condensed Consolidated Financial Statements presents depreciation and amortization expense by segment.

Current wording

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. 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.

Previous wording

Impairment of Goodwill. During the first quarter of 2024, our Downhole Technologies operations recognized a non-cash impairment charge of $10.0 million related to goodwill transferred to the business in connection with segment realignment discussed above. 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.

Current wording

Impairment of Goodwill. In the first quarter of 2024, our Downhole Technologies operations recognized a non-cash impairment charge of $10.0 million related to goodwill transferred to the business in connection with the realignment of operations between segments. See Note 2, “Asset Impairments and Other Charges and Credits,” to our Unaudited Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.

Previous wording

Operating Income (Loss). Our consolidated operating loss was $20.2 million in the first nine months of 2024, which included $23.4 million in non-cash goodwill, intangible and operating lease asset impairment charges and other charges totaling $11.8 million associated with facility consolidations and exits, patent defense and other management actions. This compares to consolidated operating income of $15.3 million in the first nine months of 2023, which included facility consolidation and other charges of $1.6 million. Excluding these charges, operating results declined $2.0 million year-over-year, driven by the substantial decline in activity levels in the United States.

Current wording

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.

Previous wording

Interest Expense, Net. Net interest expense totaled $6.0 million in the first nine months of 2024, which compares to $6.4 million in the first nine months of 2023. Interest expense as a percentage of total debt outstanding was approximately 7% in the first nine months of 2024, compared to 7% in the first nine months of 2023.

Current wording

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.

Previous wording

Income Tax. Income tax provision for the first nine months of 2024 and 2023 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 nine months of 2024, our income tax provision was $1.6 million on a pre-tax loss of $24.8 million, which included a $10.0 million goodwill impairment charge, other non-deductible expenses and unfavorable changes in valuation allowances recorded against deferred tax assets. This compares to an income tax provision of $2.7 million on pre-tax income of $9.6 million for the first nine months of 2023, which included certain non-deductible expenses, discrete tax items and a reduction in valuation allowances recorded against deferred tax assets.

Current wording

Income Tax. Income tax expense for the first three 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.

Previous wording

Other Comprehensive Income. Reported comprehensive income (loss) is the sum of reported net income (loss) and other comprehensive income. Other comprehensive income was $3.4 million in the first nine months of 2024 compared to comprehensive income of $1.7 million in the first nine months of 2023 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 nine months of 2024 and 2023, currency translation adjustments recognized as a component of other comprehensive income were primarily attributable to the United Kingdom and Brazil. During the first nine months of 2024, the exchange rates for the British pound strengthened compared to the U.S. dollar while the Brazilian real weakened compared to the U.S. dollar. This compares to the first nine months of 2023, when the exchange rates for the British pound and the Brazilian real strengthened compared to the U.S. dollar.

Current wording

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. 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. dollar. 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. dollar.

Previous wording

Revenues. Our Offshore Manufactured Products segment revenues increased $35.4 million, or 14%, in the first nine months of 2024 compared to the first nine months of 2023 due primarily to increased demand for international and offshore-project driven products and services.

Current wording

Revenues. 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.

Previous wording

Operating Income. Our Offshore Manufactured Products segment reported operating income of $44.3 million in the first nine months of 2024, which included $3.4 million in facility consolidation and other charges. This compares to operating income of $32.1 million in the first nine months of 2023, which included $1.6 million in facility consolidation and other charges. Excluding these charges, operating income increased $13.9 million year-over-year.

Current wording

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.

Previous wording

Backlog. Backlog in our Offshore Manufactured Products segment totaled $313 million as of September 30, 2024 compared to $327 million as of December 31, 2023. Bookings during the first nine months of 2024 totaled $279 million, yielding a year-to-date book-to-bill ratio of 1.0x.

Current wording

Backlog. 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.

Previous wording

Revenues. Our Downhole Technologies segment revenues decreased $23.8 million, or 19%, in the first nine months of 2024 from the first nine months of 2023 due primarily to lower U.S. customer demand for perforating and completion products during the first quarter of 2024.

Current wording

Revenues. 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.

Previous wording

Operating Loss. Our Downhole Technologies segment reported an operating loss of $16.9 million in the first nine months of 2024, which included the $10.0 million non-cash goodwill impairment charge related to the first quarter of 2024 segment realignment and $1.2 million in charges related to the exit of a facility, personnel reductions and a customer bankruptcy. This compares to an operating loss of $0.1 million reported in the first nine months of 2023. Excluding the 2024 charges discussed above, the Downhole Technologies segment’s operating loss increased $5.6 million from the prior-year period, due primarily to the reported decrease in revenue and lower manufacturing volumes.

Current wording

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.

Previous wording

Operating Loss. Corporate expenses in the first nine months of 2024 decreased $3.3 million, or 10%, from the first nine months of 2023, due primarily to lower short- and long-term incentive expenses.

Current wording

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.

Previous wording

Our primary liquidity needs are to fund operating and capital expenditures, new product development and general working capital needs. In addition, capital has been used to fund strategic business acquisitions, repay debt and fund share repurchases. Our primary sources of funds are cash flow from operations, proceeds from borrowings under our credit facilities and, less frequently, capital markets transactions.

Current wording

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 fund strategic business acquisitions. Our primary sources of funds are cash flow from operations and proceeds from borrowings under our ABL Facility and, less frequently, capital markets transactions.

Previous wording

Cash flows from operations totaled $27.7 million during the first nine months of 2024, compared to $52.4 million generated by operations during the first nine months of 2023.

Current wording

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.

Previous wording

During the first nine months of 2024, $13.2 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, partially offset by the favorable impact of a decrease in accounts receivable. During the first nine months of 2023, $3.2 million was used to fund net working capital increases, with an activity-driven increase in inventories and the payment of accrued 2022 short-and long-term cash incentives in the first quarter of 2023 substantially offset by the favorable impact of a decrease in accounts receivable and an increase in deferred revenues.

Current wording

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.