OIL STATES INTERNATIONAL, INC

Previous wording

The following discussion and analysis should be read together with our condensed consolidated financial statements and notes to those statements included elsewhere in this Quarterly Report on Form 10-Q and our consolidated financial statements and notes to those statements included in our 2024 Annual Report on Form 10-K in order to understand factors, such as charges and credits, financing transactions and changes in tax regulations, which may impact comparability from period to period.

Current wording

The following discussion and analysis should be read together with our condensed consolidated financial statements and notes to those statements included elsewhere in this Quarterly Report on Form 10-Q and our consolidated financial statements and notes to those statements included in our 2025 Annual Report on Form 10-K, as amended by our 2025 Annual Report on Form 10-K/A, in order to understand factors, such as charges, financing transactions and changes in tax regulations, 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 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

The third quarter 2025 average spot price of WTI crude oil declined 8% from the first quarter 2025 average following the imposition of broad-based trade tariffs by the United States on imported goods and increased crude oil production by OPEC+. These actions have led to ongoing uncertainty regarding the future effect of reciprocal and other trade tariffs on the global economy as well as the future demand for and supply of crude oil, which has negatively impacted the demand for and pricing of our products and services provided to the U.S. land-based market during recent quarters.

Current wording

In addition, the imposition of broad based trade tariffs by the United States has led to ongoing uncertainty regarding the future effect of reciprocal and other trade tariffs on the global economy. These factors have negatively impacted the demand for and pricing of our products and services provided to the U.S. land-based market and have increased the cost of certain products we manufacture in the United States when compared to the first quarter of 2025.

Previous wording

We have implemented certain initiatives to optimize our operations and reduce future costs. These actions include: the consolidation, relocation and exit of certain operating locations; the exit of certain service offerings; reductions in our U.S. workforce as well as the realignment in 2024 of operations within two of our reportable segments. We also incurred legal costs associated with patent defense. As a result of these events, actions and assessments, our reported pre-tax results for the 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. During the first nine months of 2025, we made the strategic decision to exit three additional service facilities, continued the exit of facilities closed in 2024 and further reduced headcount, incurring $8.1 million of associated pre-tax charges.

Current wording

We implemented certain initiatives in 2025, which have continued into 2026, to optimize our operations and improve future returns. These actions were concentrated in our U.S. land-focused service operations and included: the consolidation, relocation and exit of certain operating locations; the exit of certain service offerings; the exit of previously closed facilities; and reductions in our U.S. workforce. We also assessed the carrying value of certain long-lived and other assets based on the industry outlook regarding overall demand for and pricing of our products and services, market competitiveness and management decisions. As a result of these events, actions and assessments, our reported pre-tax results for the first three months of 2026 included $2.7 million of costs associated primarily with facility exits as well as $1.4 million in non-cash asset impairment charges.

Previous 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.

Current wording

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

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, but not limited to: geopolitical conflicts in the Middle East, Europe 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

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 nine 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. 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. This segment also produces a variety of products for use in military, industrial 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 deep-sea 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 90% of Offshore Manufactured Products segment sales in the first three months of 2026 were driven by our customers’ capital spending for products and services used in exploratory and developmental drilling, greenfield offshore production infrastructure, and subsea pipeline tie-in and repair system applications, along with upgraded equipment for existing offshore drilling rigs and other vessels (referred to herein as “project-driven products and services”). 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 increased to $399 million as of September 30, 2025 from $311 million as of December 31, 2024. Bookings totaled $145 million in the third quarter of 2025, yielding a quarterly book-to-bill ratio of 1.3x (1.3x 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 decreased to $430 million as of March 31, 2026 from $435 million as of December 31, 2025. Bookings totaled $84 million in the first quarter of 2026, yielding a book-to-bill ratio of 0.9x. 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 segment’s results, are sensitive to near-term fluctuations in commodity prices, particularly WTI crude oil prices, given the short-term, call-out nature of its operations. We primarily supply equipment and service personnel utilized in the completion of, and initial production from, new and recompleted wells in our U.S. operations, which are dependent primarily upon the level and complexity of drilling, completion and workover activity in our areas of operations.

Current wording

Our Completion and Production Services segment provides completion and production services in the United States (including the Gulf of America) and internationally. Over recent years, the segment has exited the majority of its U.S. land-based service operations in response to reductions in activity levels and highly competitive market conditions. The Completion and Production Services segment’s results, are sensitive to near-term fluctuations in commodity prices, particularly crude oil prices, given the short-term, call-out nature of its operations. We primarily supply equipment and service personnel utilized in the completion of, and initial production from, new and recompleted wells in our operations.

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

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 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.

Current wording

Demand for our completion-related products and services within our Downhole Technologies segment and our Completion and Production Services segment are impacted by numerous factors, including 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 September 30, 2025, oil-directed drilling accounted for 77% 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.

Previous wording

We use a variety of domestically produced and imported raw materials and component products, including steel, in the manufacture of our products. Beginning in the first quarter of 2025, the United States imposed new or additional tariffs, through executive orders, 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. We continue to monitor the effects of the ever-evolving global trade landscape, including with respect to sanctions, tariffs, existing trade agreements, anti-dumping and countervailing duty regulations and more. For example, in the third quarter of 2025, U.S. tariffs on certain steel and other metal components we import from China substantially increased the cost of those products, and President Trump has threatened additional increased tariffs on goods imported from China as result of current Chinese trade policy. A portion of those tariffs might be overturned depending on the resolution of certain U.S. litigation. Specifically, the U.S. Supreme Court has agreed to hear a case determining whether a federal law giving the president certain emergency powers allowed President Trump to levy tariffs on nearly all goods imported into the United States through a series of executive orders. The Court is scheduled to begin hearing oral arguments on November 5, with a ruling on the challenges potentially expected at the end of 2025.

Current wording

We use a variety of domestically produced and imported raw materials and component products, including steel, in the manufacture of our products. Beginning in the first quarter of 2025, the United States imposed new or additional tariffs, through executive orders, 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 the first quarter of 2026, the U.S. Supreme Court struck down broad tariffs previously imposed through executive orders under the International Emergency Economic Powers Act of 1977 on a wide range of imported goods. In response, President Trump implemented a 10% import surcharge on a broad range of goods under Section 122 of the Trade Act of 1974, which are currently scheduled to expire in July 2026 unless extended. These new tariffs target various categories of imports, including certain raw materials used in our operations, such as steel, aluminum and copper. We continue to monitor the effects of the ever-evolving global trade landscape, including with respect to sanctions, tariffs, Chinese export restrictions on tungsten-related and other products used by us, existing trade agreements, anti-dumping and countervailing duty regulations and more.

Previous 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 these 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.

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 Unaudited Condensed Consolidated Financial Statements and related notes included in “Part I, Item 1. Financial Statements” of this Quarterly Report on Form 10-Q and “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our Consolidated Financial Statements and related notes included in “Part II, Item 8. Financial Statements and Supplementary Data” of our Annual Report on Form 10-K for the year ended December 31, 2024 in order to understand factors, such as charges and credits, which may impact comparability of the selected financial data.

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

Previous wording

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

Current wording

The following summarizes our consolidated results of operations for the three months ended March 31, 2026 and 2025 (in thousands, except per share amounts):

Previous 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 three and nine months ended September 30, 2025 and 2024 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 three months ended March 31, 2026 and 2025 is summarized below (in thousands):

Previous wording

(2)During the three and nine months ended September 30, 2025, we recognized charges of $2.7 million and $5.8 million, respectively, within the Completion and Production Services segment, associated primarily with the exit of service locations. 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

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

Previous wording

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

Current wording

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

Previous wording

We reported net income for the three months ended September 30, 2025 of $1.9 million, or $0.03 per share. The reported third quarter net income included charges of $3.6 million ($2.8 million after tax, or $0.05 per share) associated primarily with the exit of U.S. land-based facilities and personnel reductions. These results compare to a net loss for the three months ended September 30, 2024 of $14.3 million, or $0.23 per share, which 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.

Current wording

We reported net income for the three months ended March 31, 2026 of $1.1 million, or $0.02 per share. The net income included restructuring and asset impairment charges of $4.1 million ($4.1 million after tax, or $0.07 per share) associated with the continued exit of certain of our U.S. land-based operations. These results compare to net income for the three months ended March 31, 2025 of $3.2 million, or $0.05 per share.

Previous wording

Revenues. Consolidated total revenues in the third quarter of 2025 decreased $9.2 million, or 5%, from the third quarter of 2024 due primarily to our exit of underperforming service offerings and locations over the past 15 months and lower U.S. land-based activity levels. Excluding the impact of exited operations, consolidated revenues increased $7.2 million, or 5%, year-over-year.

Current wording

Revenues. Consolidated total revenues in the first three months of 2026 decreased $14.6 million, or 9%, from the first three months of 2025 driven primarily by our exit of underperforming service offerings and locations over the past 15 months. Excluding the impact of exited operations, consolidated revenues declined $3.1 million year-over-year.

Previous wording

Cost of Revenues (exclusive of Depreciation and Amortization Expense). Our consolidated total cost of revenues (exclusive of depreciation and amortization expense) in the first nine months of 2025 decreased $33.9 million, or 8%, compared to the first nine months of 2024.

Current wording

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

Previous wording

Consolidated product costs in the first nine months of 2025 increased $13.0 million, or 5%, compared to the first nine months of 2024 due primarily to the reported increase in product revenue as well as an unfavorable shift in product sales mix. Consolidated service costs in the first nine months of 2025 decreased $46.9 million, or 27%, compared to the first nine months of 2024, due to lower revenue levels and the strategic actions implemented in our U.S. land-based operations to improve reported results.

Current wording

Consolidated product costs in the first three months of 2026 decreased $6.0 million, or 7%, compared to the first three months of 2025 due primarily to reduction in revenues. Consolidated service costs in the first three months of 2026 decreased $5.1 million, or 12%, compared to the first three months of 2025, due to lower revenue levels and the strategic actions implemented in our U.S. land-based operations to improve reported results.

Previous wording

Depreciation and Amortization Expense. Depreciation and amortization expense in the first nine months of 2025 decreased $6.5 million, or 15%, compared to the prior-year period. Note 10, “Segments and Related Information,” to the Unaudited Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q presents depreciation and amortization expense by segment.

Current wording

Depreciation and Amortization Expense. Depreciation and amortization expense in the first three months of 2026 decreased $3.8 million, or 32%, compared to the prior-year period due primarily to the impact of asset impairments recorded in the fourth quarter of 2025. Note 10, “Segments and Related Information,” to the Unaudited Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q presents depreciation and amortization expense by segment.

Previous wording

Operating Income (Loss). Our consolidated operating income was $15.7 million in the first nine months of 2025, which included $1.4 million in non-cash operating lease asset impairment charges as well as charges totaling $6.8 million associated with facility consolidations and exits and other management actions. This compares to a consolidated operating loss of $20.2 million in the first nine months of 2024, which included $23.4 million in non-cash goodwill, intangible and operating lease impairment charges and $11.8 million associated with facility consolidations and exits, patent defense and other management actions. Excluding these charges, operating results improved by $8.8 million year-over-year, driven primarily by a $6.5 million decrease in depreciation and amortization expense, growth in offshore and international activity and actions taken to improve our U.S. land-based operating results.

Current wording

Operating Income. Our consolidated operating income was $4.3 million in the first three months of 2026, which included $1.4 million in non-cash asset impairment charges as well as other charges totaling $2.7 million associated with the continued exit of our U.S. land-based operations and facilities. This compares to a consolidated operating income of $5.6 million in the first three months of 2025, which included $0.9 million associated with facility consolidations and exits. Excluding these charges, operating results improved by $1.8 million year-over-year, with the impact of a $3.8 million decrease in depreciation and amortization expense substantially offset by the impact of the revenue decline and lower gains on the sale of assets.

Previous wording

Interest Expense, Net. Net interest expense totaled $5.0 million in the first nine months of 2025, which compares to $6.0 million in the first nine months of 2024. Interest expense as a percentage of total debt outstanding was approximately 7% in the first nine months of 2025 and 2024.

Current wording

Interest Expense, Net. Net interest expense totaled $1.2 million in the first three months of 2026, which compares to $1.6 million in the first three months of 2025. Interest expense as a percentage of total debt outstanding was approximately 8% in the first three months of 2026 and 7% in the first three months of 2025.

Previous wording

Income Tax. Income tax provision for the three months ended September 30, 2025 and 2024 was calculated using a discrete approach. This methodology was used because changes in our results of operations and non-deductible expenses can materially impact the estimated annual effective tax rate. For the three months ended September 30, 2025, our income tax provision was $1.4 million, which included the impact of valuation allowance adjustments recorded against deferred tax assets, certain discrete tax items and other non-deductible expenses, on pre-tax income of $3.3 million. This compares to an income tax provision of $2.2 million, which included the impact of changes in valuation allowances recorded against deferred tax assets and certain non-deductible expenses, on a pre-tax loss of $12.1 million for the three months ended September 30, 2024.

Current wording

Income Tax. For the first three months of 2026, our income tax provision was $2.1 million, which included the impact of changes in valuation allowances recorded against deferred tax assets, certain discrete tax items and other non-deductible expenses, on pre-tax income of $3.3 million. This compares to an income tax provision of $1.0 million, which included the impact of certain discrete tax items and other non-deductible expenses, on pre-tax income of $4.2 million for the first three months of 2025.

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 $13.3 million in the first nine months of 2025 compared to other comprehensive income of $3.4 million in the first nine 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 nine months of 2025 and 2024, 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 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 nine months of 2024, when 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.

Current wording

Other Comprehensive Income (Loss). Reported comprehensive income (loss) is the sum of reported net income and other comprehensive income (loss). Other comprehensive loss was $1.2 million in the first three months of 2026 compared to other comprehensive income of $5.5 million in the first three months of 2025 due to fluctuations in foreign currency exchange rates compared to the U.S. dollar for certain of the international operations of our operating segments. For the first three months of 2026 and 2025, currency translation adjustments recognized as a component of other comprehensive income (loss) were primarily attributable to the United Kingdom and Brazil. During the first three months of 2026, the exchange rate for the British pound weakened compared to the U.S. dollar while the Brazilian real strengthened compared to the U.S. dollar. This compares to the first three months of 2025, when the exchange rates for both the British pound and the Brazilian real strengthened compared to the U.S. dollar.

Previous wording

Revenues. Our Offshore Manufactured Products segment revenues increased $17.2 million, or 6%, in the first nine months of 2025 compared to the first nine months of 2024 due primarily to increased demand for the segment’s international and offshore project-driven connector, crane and drilling products.

Current wording

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

Previous wording

Backlog. Backlog in our Offshore Manufactured Products segment totaled $399 million as of September 30, 2025 compared to $311 million as of December 31, 2024. Bookings during the first nine months of 2025 were $393 million, yielding a book-to-bill ratio of 1.3x.

Current wording

Backlog. Backlog in our Offshore Manufactured Products segment totaled $430 million as of March 31, 2026 compared to $435 million as of December 31, 2025. Bookings during the first three months of 2026 were $84 million, yielding a book-to-bill ratio of 0.9x.

Previous wording

Revenues. Our Completion and Production Services segment revenues decreased $42.3 million, or 32%, in the first nine months of 2025 compared to the first nine months of 2024, driven primarily by the exit of underperforming U.S. service offerings and facilities and lower U.S. land-based activity levels. Excluding the impact of exited operations, which generated revenues of $12.7 million and $64.3 million, respectively, in the first nine months of 2025 and 2024, revenues increased $9.3 million year-over-year.

Current wording

Revenues. Our Completion and Production Services segment revenues decreased $13.0 million, or 38%, in the first three months of 2026 compared to the first three months of 2025, driven primarily by the exit of underperforming U.S. land-based service offerings and facilities. Excluding the impact of exited operations, revenues decreased $1.6 million year-over-year.

Previous wording

Revenues. Our Downhole Technologies segment revenues decreased $12.3 million, or 12%, in the first nine months of 2025 from the first nine months of 2024, driven primarily by lower U.S. customer activity levels and competitive market conditions.

Current wording

Revenues. Our Downhole Technologies segment revenues decreased $0.4 million, or 1%, in the first three months of 2026 from the first three months of 2025, driven by lower U.S. customer activity levels and competitive market conditions.

Previous 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 prior to their maturity on April 1, 2026. 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.

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.

Previous wording

Cash flows from operations totaled $55.0 million during the first nine months of 2025, compared to $27.7 million generated by operations during the first nine months of 2024.

Current wording

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

Previous wording

During the first nine months of 2025, $9.9 million was provided by net working capital decreases, which includes increases in deferred revenues, accounts payable and accrued liabilities, partially offset by the unfavorable impact of increases in inventory and accounts receivable. 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.

Current wording

During the first three months of 2026, $13.3 million was used to fund net working capital increases, primarily due to an increase in inventories, a decrease in accounts payable and payment of accrued short- and long-term cash incentive compensation, partially offset by the favorable impact of a decrease in accounts receivable. During the first three months of 2025, $5.6 million was used to fund net working capital increases, primarily due to a decrease in accounts payable and payment of accrued short- and long-term cash incentive compensation, partially offset by the favorable impact of a decrease in accounts receivable.

Previous wording

Net cash used in investing activities during the first nine months of 2025 totaled $14.5 million, compared to $8.3 million used in investing activities during the first nine months of 2024.

Current wording

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

Previous wording

Capital expenditures totaled $28.2 million and $23.3 million during the first nine months of 2025 and 2024, respectively. These investments were offset by proceeds from the sale of property, equipment and assets held for sale of $13.8 million and $15.4 million during the first nine months of 2025 and 2024, respectively.

Current wording

Capital expenditures totaled $4.2 million and $9.2 million during the first three months of 2026 and 2025, respectively. These investments were offset by proceeds from the sale of property and equipment, and assets held for sale of $0.9 million and $9.2 million during the first three months of 2026 and 2025, respectively.

Previous wording

As of September 30, 2025, we had no borrowings outstanding under our ABL Facility, $102.8 million principal amount of our 2026 Notes outstanding and other debt of $2.6 million. Our reported interest expense included amortization of deferred financing costs of $1.2 million during the first nine months of 2025. For the first nine months of 2025, our contractual cash interest expense was $5.0 million, or approximately 6% of the average principal balance of debt outstanding.

Current wording

As of March 31, 2026, we had cash and cash equivalents totaling $59.0 million, no borrowings outstanding under our Cash Flow Credit Agreement, $52.7 million principal amount of our 2026 Notes outstanding and other debt of $2.2 million. Our reported interest expense included amortization of deferred financing costs of $0.8 million during the first three months of 2026. For the first three months of 2026, our contractual cash interest expense was $0.8 million, or approximately 6% of the average principal balance of debt outstanding.