OIL STATES INTERNATIONAL, INC

Previous wording

Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our Consolidated Financial Statements and related notes appearing in “Part II Item 8 Financial Statements and Supplementary Data.” This discussion contains “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act that are based on our current expectations, estimates and projections about our business operations. Our actual results may differ materially from those currently anticipated and expressed in such forward-looking statements as a result of numerous factors, including the known material factors set forth in “Part I, Item 1A. Risk Factors.” You should read the following discussion and analysis together with our Consolidated Financial Statements and the notes to those statements included elsewhere in this Annual Report on Form 10‑K in order to understand factors, such as business combinations, charges and credit and financing transactions, which may impact comparability from period to period.

Current wording

Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our Consolidated Financial Statements and related notes appearing in “Part II Item 8 Financial Statements and Supplementary Data.” This section of this Annual Report on Form 10-K generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024. Discussions of 2023 items and year-to-year comparisons between 2024 and 2023 that are not included in this Annual Report on Form 10-K can be found in “Part II, Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024. This discussion contains “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act that are based on our current expectations, estimates and projections about our business operations. Our actual results may differ materially from those currently anticipated and expressed in such forward-looking statements as a result of numerous factors, including the known material factors set forth in “Part I, Item 1A. Risk Factors.” You should read the following discussion and analysis together with our Consolidated Financial Statements and the notes to those statements included elsewhere in this Annual Report on Form 10‑K in order to understand factors, such as business combinations, charges and credit and financing transactions, which may impact comparability from period to period.

Previous 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 (previously referred to as Well Site 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.

Current wording

We provide a broad range of manufactured products and services to customers in the energy, military and industrial 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

Brent and West Texas Intermediate (“WTI”) crude oil and natural gas pricing trends were as follows:

Current wording

Brent and WTI crude oil and natural gas pricing trends were as follows:

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 and international 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, 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. 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 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; 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, the Middle East and South America, 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; technological advancements; consolidation of oil and gas producers; 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

U.S. drilling, completion and production activity and, in turn, our financial results, are sensitive to near-term fluctuations in commodity prices, particularly U.S. crude oil and natural gas prices, given the short-term, call-out nature of our U.S. operations.

Current wording

U.S. drilling, completion and production activity and, in turn, our financial results, are sensitive to near-term fluctuations in commodity prices, particularly U.S. WTI crude oil and natural gas prices, given the short-term, call-out nature of our U.S. operations.

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 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 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. 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.

Current wording

Our Offshore Manufactured Products segment provides technology-driven, highly-engineered products and services for offshore oil and natural gas drilling, completion and production systems and facilities globally, as well as certain products and services to the military and industrial 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 91% of Offshore Manufactured Products segment sales in 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. Deepwater oil and gas development projects may also be impacted by federal legislative and regulatory actions, including the OBBBA, which mandates that the Bureau of Ocean Energy Management conduct at least two offshore lease sales annually, of a minimum of 80 million acres (if available), in the Central and Western Gulf of America Planning Areas for the next 15 years. 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.

Previous wording

Backlog reported by our Offshore Manufactured Products segment decreased to $311 million as of December 31, 2024 from $327 million as of December 31, 2023. Bookings totaled $392 million in 2024, yielding an annual book-to-bill ratio of 1.0x in 2024. This compares to total bookings of $414 million in 2023 and a book-to-bill ratio of 1.1x. 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 $435 million as of December 31, 2025 from $311 million as of December 31, 2024. Bookings totaled $554 million in 2025, yielding a book-to-bill ratio of 1.3x. 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 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.

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 segment’s results, are sensitive to near-term fluctuations in commodity prices, particularly WTI crude oil prices, given the short-term, call-out nature of its operations. We primarily supply equipment and service personnel utilized in the completion of, and initial production from, new and recompleted wells in our U.S. operations.

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 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.

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. Hydraulic fracturing activity, and, in turn, our Downhole Technologies segment’s results, are sensitive to commodity prices, particularly WTI crude oil prices, given that lower activity may result in reduced demand for our consumable products. Demand drivers for the Downhole Technologies segment include continued trends toward longer lateral lengths, increased frac stages and more perforation clusters to target increased unconventional well productivity.

Previous wording

Demand for our completion-related products and services within our Completion and Production Services and Downhole Technologies segments is highly correlated to changes in the total number of wells drilled in the United States, total footage drilled, the number of drilled wells that are completed and changes in the drilling rig count. The following table sets forth a summary of the U.S. drilling rig count, as measured by Baker Hughes Company, as of and for the periods indicated.

Current wording

Demand for our completion-related products and services within our Completion and Production Services and Downhole Technologies segments is highly correlated to changes in the total number of wells drilled in the United States, total footage drilled, the number of drilled wells that are completed and changes in the completion (“frac”) count. The following table sets forth a summary of the U.S. drilling rig count, as measured by Baker Hughes Company, as of and for the periods indicated.

Previous wording

The U.S. energy industry is primarily focused on crude oil and liquids-rich exploration and development activities in U.S. shale plays utilizing horizontal drilling and completion techniques. As of December 31, 2024, oil-directed drilling accounted for 82% of the total U.S. rig count – with the balance largely natural gas related.

Current wording

The U.S. energy industry is primarily focused on crude oil and liquids-rich exploration and development activities in U.S. shale plays utilizing horizontal drilling and completion techniques. As of December 31, 2025, oil-directed drilling accounted for 75% of the total U.S. rig count – with the balance largely natural gas related.

Previous wording

We use a variety of domestically produced and imported raw materials and component products, including steel, in the manufacture of our products. In 2018, the United States 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. In early 2025, the Trump Administration, after taking office, proposed increases to existing U.S. tariffs as well as the imposition of certain new tariffs. 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.

Current wording

We cannot predict with certainty the duration of tariffs currently in place, the impact of any new or increased tariffs, or the impact of any retaliatory tariffs. If we encounter difficulty in procuring raw materials and component products, or if the prices we pay for these products remain at current levels or increase and we are unable to pass corresponding cost increases on to our customers, our financial position, cash flows and results of operations would 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; 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.

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; industrial accidents; trade restrictions; adoption of new or increases in tariffs; 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

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.

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 and credits, which may impact comparability of the selected financial data.

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 years ended December 31, 2024, 2023 and 2022 is summarized below (in thousands):

Current wording

We manage and measure our business performance in three operating segments: Offshore Manufactured Products, Completion and Production Services and Downhole Technologies. Supplemental financial information by operating segment for the years ended December 31, 2025 and 2024 is summarized below (in thousands):

Previous wording

(1)During 2024 and 2023, we recognized facility consolidation and other charges of $3.4 million and $2.5 million, respectively, within the Offshore Manufactured Products segment, associated primarily with the segment’s consolidation and relocation of certain manufacturing and service locations. During 2022, we recognized a gain of $6.1 million associated with the settlement of outstanding litigation against certain service providers.

Current wording

(1)During 2025 and 2024, we recognized charges of $1.6 million and $3.4 million, respectively, within the Offshore Manufactured Products segment, associated primarily with the consolidation and relocation of certain manufacturing and service locations.

Previous wording

(2)During 2024, we recognized charges of $24.3 million within the Completion and Production Services segment, 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. In 2023, we recognized $0.6 million in costs associated with the defense of certain of the segment’s patents.

Current wording

(2)During 2025, we recognized charges of $10.8 million within the Completion and Production Services segment, associated with U.S. land-based restructurings. During 2024, the Completion and Production Services segment recognized charges of $24.3 million 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.

Previous wording

(4)During 2024, we recognized a net gain of $15.3 million within Corporate associated with the sale of a previously idled facility.

Current wording

(4)During 2025, we recognized a non-cash impairment charge of $7.1 million associated with assets held for sale recorded in Corporate operations. During 2024, we recognized a net gain of $15.3 million within Corporate operations associated with the sale of a previously idled facility.

Previous wording

For further discussion of charges and credits recognized during the years ended December 31, 2024, 2023 and 2022, see Note 4, “Asset Impairments and Other Charges and Credits,” to the Consolidated Financial Statements included in this Annual Report on Form 10-K for additional discussion.

Current wording

For further discussion of charges recognized during the years ended December 31, 2025 and 2024, see Note 2, “Summary of Significant Accounting Policies,” and Note 3, “Asset Impairments and Other Charges and Credits,” to the Consolidated Financial Statements included in this Annual Report on Form 10-K for additional discussion.

Previous wording

We reported a net loss for the year ended December 31, 2024 of $11.3 million, or $0.18 per share. The reported 2024 net loss included net charges and credits of $22.4 million ($22.0 million after tax, or $0.35 per share) associated with the restructuring of certain of our U.S. land-based operations, facility consolidations and closures, patent defense, personnel reductions and debt extinguishment, partially offset by a gain recognized on the sale of a previously idled facility. These results compare to net income for the year ended December 31, 2023 of $12.9 million, or $0.20 per share, which included facility consolidation charges of $2.5 million ($2.0 million after-tax, or $0.03 per share) and patent defense costs of $0.6 million ($0.5 million after-tax, or $0.01 per share).

Current wording

We reported a net loss for the year ended December 31, 2025 of $109.4 million, or $1.86 per share. Net loss included charges of $132.6 million ($130.9 million after tax, or $2.23 per share) primarily associated with non-cash long-lived and other asset impairments, the continued restructuring of certain of our U.S. land-based operations and facilities and valuation allowances established on U.S. deferred tax assets. These results compare to a net loss for the year ended December 31, 2024 of $11.3 million, or $0.18 per share, which included net charges and credits of $22.4 million ($22.0 million after tax, or $0.35 per share) associated with these restructurings, patent defense, and debt extinguishment, partially offset by a gain recognized on the sale of a previously idled facility.

Previous wording

Results of operations for 2024 reflect the impact of operators’ continued investment in offshore and international projects 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.

Current wording

Our results of operations for 2025 reflect the impact of increased capital investments by our offshore and international customers, offset by a decline in U.S. land-based investments, competitive market conditions, increased U.S. trade tariffs and management’s decision to exit certain underperforming locations, service lines and product offerings in the United States.

Previous wording

Consolidated product revenues in 2024 decreased $16.0 million, or 4%, from 2023, with the impact of a decline in U.S. customer demand for completion and perforating products partially offset by higher customer demand for military products. Consolidated service revenues in 2024 decreased $73.7 million, or 20%, from 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 service offerings and locations during 2024, partially offset by higher offshore and international service activity.

Current wording

Consolidated product revenues in 2025 increased $33.8 million, or 8%, from 2024, led by higher customer demand for connector, crane and drilling products partially offset by a reduced project-driven platform and valve revenues and U.S. customer demand for completion-related products. Consolidated service revenues in 2025 decreased $57.4 million, or 20%, from 2024. This decrease was concentrated in the United States – reflective of our exit of certain underperforming land-based service offerings following an industry-wide reduction in onshore activity levels.

Previous wording

Cost of Revenues (exclusive of Depreciation and Amortization Expense). Our consolidated total cost of revenues (exclusive of depreciation and amortization expense) decreased $70.7 million, or 12%, in 2024 compared to 2023.

Current wording

Cost of Revenues (exclusive of Depreciation and Amortization Expense). Our consolidated total cost of revenues (exclusive of depreciation and amortization expense) in 2025 decreased $0.5 million, compared to 2024.

Previous wording

Selling, General and Administrative Expense. Selling, general and administrative expense totaled $95.0 million in 2024, which included $2.8 million of costs associated with enforcing certain of our patents. Excluding these patent defense costs, selling, general and administrative costs decreased $1.4 million, or 1%, from the level reported in 2023, with the impact of

Current wording

Selling, General and Administrative Expense. Selling, general and administrative expense totaled $90.4 million in 2025. This compares to an expense of $95.0 million in 2024, which included $2.8 million of costs associated with enforcing certain of our patents. Excluding these patent litigation costs, selling, general and administrative costs decreased $1.8 million, or 2%, from the prior-year period, due primarily to lower commissions, marketing, information technology and bad debt expenses.

Previous wording

Depreciation and Amortization Expense. Depreciation and amortization expense decreased $6.1 million, or 10%, in 2024 compared to the prior-year period. Note 14, “Segments and Related Information,” to our Consolidated Financial Statements included in this Annual Report on Form 10-K presents depreciation and amortization expense by segment.

Current wording

Depreciation and Amortization Expense. Depreciation and amortization expense in 2025 decreased $7.3 million, or 13%, compared to the prior-year period due to reductions in capital investments. Note 13, “Segments and Related Information,” to the Consolidated Financial Statements included in this Annual Report on Form 10-K presents depreciation and amortization expense by segment.

Previous 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 segment realignment discussed above. See Note 4, “Asset Impairments and Other Charges and Credits,” to our Consolidated Financial Statements included in this Annual Report on Form 10-K 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, “Summary of Significant Accounting Policies,” to the Consolidated Financial Statements included in this Annual Report on Form 10-K.

Previous wording

Impairments of Intangible Assets. In 2024, as a result of our decision to exit an underperforming service offering, our Completion and Production Services business recognized non-cash impairment charges of $10.8 million to reduce the carrying amount of its long-lived intangible assets to estimated fair value. See Note 4, “Asset Impairments and Other Charges and Credits,” to our Consolidated Financial Statements included in this Annual Report on Form 10-K for additional discussion.

Current wording

In 2024, management made strategic restructuring decisions leading to the recognition of non-cash impairment charges totaling $3.8 million on operating lease assets held by our Completion and Production Services and Downhole Technologies segments. Additionally, as a result of our decision to exit an underperforming service offering, our Completion and Production Services business recognized non-cash impairment charges of $10.8 million to reduce the carrying amount of its long-lived intangible assets to estimated fair value.

Previous wording

Other Operating Income, Net. In 2024, we recognized a net gain of $15.3 million associated with the sale of a previously idled facility. Other operating income, net for 2023 included gains on disposals of assets totaling $4.1 million, partially offset by charges of $2.5 million recognized in connection with our ongoing consolidation of certain manufacturing and service locations within our Offshore Manufactured Products segment.

Current wording

Other Operating Income, Net. In 2024, we recognized a net gain of $15.3 million associated with the sale of a previously idled facility.

Previous wording

Operating Income (Loss). Our consolidated operating loss was $1.7 million in 2024, which included non-cash charges of $24.6 million for goodwill, intangible asset and operating lease asset impairments, other charges totaling $13.7 million associated with facility consolidations and exits, patent defense and other management actions, and a net gain of $15.3 million on the sale of an idled facility. This compares to consolidated operating income of $23.2 million in 2023, which included facility consolidation and other charges of $3.1 million. Excluding these charges, operating results declined $5.0 million year-over-year, driven by the substantial decline in activity levels in the United States during 2024.

Current wording

Operating Income (Loss). Our consolidated operating loss was $98.0 million in 2025, which included $121.1 million in non-cash asset impairment charges as well as charges totaling $11.6 million associated primarily with the continued restructuring of our U.S. land-based operations and facilities. This compares to a consolidated operating loss of $1.7 million in 2024, which included $24.6 million in non-cash asset impairment charges and $13.7 million associated with facility consolidations and exits, patent defense and other management actions, and a net gain of $15.3 million on the sale of an idled facility. Excluding these charges and gain, operating results improved by $13.5 million year-over-year, driven primarily by a $7.3 million decrease in depreciation and amortization expense, growth in offshore and international activity and strategically implemented restructuring actions in our U.S. land-based operations.

Previous wording

Interest Expense, Net. Net interest expense totaled $7.7 million in 2024, which compares to $8.2 million in 2023. Interest expense as a percentage of total debt outstanding was approximately 7% in 2024 and 2023.

Current wording

Interest Expense, Net. Net interest expense totaled $5.9 million in 2025, which compares to $7.7 million in 2024. Interest expense as a percentage of total debt outstanding was approximately 7% in 2025 and 2024.

Previous wording

Income Tax. For 2024, our income tax provision was $3.4 million, which included the impact of a goodwill impairment charge, other non-deductible expenses and an increase in valuation allowances recorded against deferred tax assets, on a pre-tax loss of $7.9 million. This compares to an income tax provision of $2.9 million, which included the impact of certain non-deductible expenses, discrete tax items and a reduction in valuation allowances recorded against deferred tax assets, on pre-tax income of $15.8 million for 2023.

Current wording

Income Tax. For 2025, our income tax provision was $6.8 million, which included the impact of an increase in valuation allowances recorded against deferred tax assets, certain discrete tax items and other non-deductible expenses, on a pre-tax loss of $102.5 million. This compares to an income tax provision of $3.4 million, which included the impact of a $10.0 million goodwill impairment charge, other non-deductible expenses and an increase in valuation allowances recorded against deferred tax assets, on a pre-tax loss of $7.9 million for 2024.

Previous wording

Other Comprehensive Income (Loss). Reported comprehensive income (loss) is the sum of reported net income (loss) and other comprehensive income (loss). Other comprehensive loss was $9.5 million in 2024 compared to comprehensive income of $9.0 million in 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 2024 and 2023, currency translation adjustments recognized as a component of other comprehensive income (loss) were primarily attributable to the United Kingdom and Brazil. During 2024, the exchange rates for both the British pound and the Brazilian real weakened compared to the U.S. dollar. This compares to 2023, when the exchange rates for both the British pound and the Brazilian real strengthened compared to the U.S. dollar.

Current wording

Other Comprehensive Income (Loss). Reported comprehensive loss is the sum of reported net loss and other comprehensive income (loss). Other comprehensive income was $13.3 million in 2025 compared to other comprehensive loss of $9.5 million in 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 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 2025, the exchange rates for both the British pound and the Brazilian real strengthened compared to the U.S. dollar. This compares to 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 $59.3 million, or 18%, in 2023 compared to 2022 due primarily to increased demand for international and offshore-project driven products and services.

Current wording

Revenues. Our Offshore Manufactured Products segment revenues increased $33.2 million, or 8%, in 2025 compared to 2024 due primarily to increased demand for the segment’s international and offshore project-driven connector, crane and drilling products.

Previous wording

Operating Income. Our Offshore Manufactured Products segment reported operating income of $65.3 million in 2024, which included $3.4 million in facility consolidation and other charges. This compares to operating income of $56.3 million in 2023, which included $2.5 million in facility consolidation and other charges. Excluding these charges, the Offshore Manufactured Products segment’s operating income increased $9.9 million year-over-year due to the reported revenue growth in 2024 and a favorable shift in revenue mix.

Current wording

Operating Income. Our Offshore Manufactured Products segment reported operating income of $69.2 million in 2025, which included $1.6 million in facility consolidation and relocation charges. This compares to operating income of $65.3 million in 2024, which included $3.4 million in facility consolidation and other charges. Excluding these charges, the Offshore Manufactured Products segment’s operating income increased $2.1 million year-over-year due primarily to the reported revenue growth.

Previous wording

Backlog. Backlog in our Offshore Manufactured Products segment totaled $311 million as of December 31, 2024 compared to $327 million as of December 31, 2023. Bookings during 2024 were $392 million, yielding a book-to-bill ratio of 1.0x.

Current wording

Backlog. Backlog in our Offshore Manufactured Products segment totaled $435 million as of December 31, 2025 compared to $311 million as of December 31, 2024. Bookings during 2025 were $554 million, yielding a book-to-bill ratio of 1.3x.

Previous wording

Operating Income (Loss). Our Completion and Production Services segment reported an operating loss of $23.2 million in 2024, which included charges totaling $24.3 million associated with the exit of certain service offerings, facility consolidations and exits, the defense of patents and other management actions. This compares to operating income of $13.9 million in 2023, which included patent defense costs of $0.6 million. Excluding these charges, the Completion and Production Services segment’s operating results declined $13.4 million from the prior-year period, with the impact of a decrease in U.S. land-based revenues partially offset by implemented cost control measures.

Current wording

Operating Income (Loss). Our Completion and Production Services segment reported operating income of $4.0 million in 2025, which included charges totaling $10.8 million primarily associated with the continued restructuring of its operations. This compares to an operating loss of $23.2 million in 2024, which included charges totaling $24.3 million associated with facility consolidations and exits, the defense of patents and other management actions. Excluding these charges, the Completion and Production Services segment’s operating results improved $13.8 million from the prior-year period, due primarily to implemented cost reduction measures and a $5.4 million reduction in depreciation and amortization expense.

Previous wording

Revenues. Our Downhole Technologies segment revenues decreased $26.2 million, or 14%, in 2023 from 2022 due primarily to lower U.S. customer demand for perforating and completion products.

Current wording

Revenues. Our Downhole Technologies segment revenues decreased $7.4 million, or 6%, in 2025 from 2024, driven by lower U.S. customer activity levels and competitive market conditions.

Previous wording

Operating Loss. Our Downhole Technologies segment reported an operating loss of $20.9 million in 2024, which included the $10.0 million non-cash goodwill impairment charge related to the segment realignment in the first quarter of 2024 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 $5.9 million reported in 2023. Excluding the 2024 charges discussed above, the Downhole Technologies segment’s operating loss increased $3.9 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 $124.3 million in 2025, which included non-cash charges totaling $112.7 million associated with impairments of long-lived assets and inventories and $0.3 million in restructuring charges. This compares to an operating loss of $20.9 million reported in 2024, which included a $10.0 million non-cash goodwill impairment charge and $1.2 million in charges related to the exit of a facility, personnel reductions and a customer bankruptcy. Excluding charges, the Downhole Technologies segment’s operating results declined $1.6 million from the prior-year period, due primarily to higher U.S. tariffs on imported goods and the decrease in activity levels.

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 repay debt, fund share repurchases and fund strategic business acquisitions. Our primary sources of funds are cash flow from operations, asset sales and proceeds from borrowings under our ABL Facility 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, including the repayment of the 2026 Notes upon their maturity on April 1, 2026. 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.