Drilling Tools International Corp
For the period ended Dec 31, 2025. Filed Mar 6, 2026.
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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Mar 6, 2026
DTI$1.43+1.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-03-14.
0000950170-25-039259
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-03-06.
0001193125-26-095973
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 164 previous paragraphs and 85 current paragraphs.
39 unchanged; 16 reworded; 30 added; 106 removed; 3 previous and 0 current paragraphs rearranged.
Tables are not compared: 9 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (30)
Current report
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the accompanying consolidated financial statements and related notes. The following discussion contains “forward-looking statements” that reflect our plans, estimates, beliefs and expected performance. Our actual results may differ materially from those anticipated as discussed in these forward-looking statements as a result of a variety of risks and uncertainties, including those described in “Cautionary Statement Regarding Forward-Looking Statements” and “Item 1A. Risk Factors” included elsewhere in this Annual Report, all of which are difficult to predict. In light of these risks, uncertainties and assumptions, the forward-looking events discussed may not occur. We assume no obligation to update any of these forward-looking statements except as otherwise required by law.
Current report
Our revenues are derived from two sources: tool rental and product sales. Tool rental revenues are derived from the rental of tools used in bottom hole assemblies (“BHA”), various wellbore optimization tools, and tubular goods for drilling, workover, and completion operations. Additionally, tool rental revenue consists of the repair and inspection of such tools. Product sale revenues are derived from the sale of target depth technologies, the manufacturing and repair of tools for external customers, and tool recovery revenue. During the years ended December 31, 2025 and 2024, we derived 81% and 76% of total revenues from tool rentals and 19% and 24% from product sales, respectively.
Current report
We operate out of 2 reporting segments, split by geography, consisting of the Western Hemisphere operations and the Eastern Hemisphere operations.
Current report
Oil and Natural Gas Prices
Current report
The following table summarized average oil and natural gas prices in North America over the indicated periods as well as International and Domestic industry activity levels as reflected by the average number of active onshore drilling rigs during the same periods.
Current report
(1) U.S. Energy Information Administration (“EIA”) Cushing, OK WTI (“West Texas Intermediate”) monthly average spot price per barrel of crude oil.
Current report
(2) EIA Henry Hub Natural Gas monthly average spot price per million British Thermal Unit (“MMBtu”).
Current report
(3) Baker Hughes, includes land and offshore activity and does not include miscellaneous rigs
Current report
In the year ended December 31, 2025, U.S. natural gas prices experienced a notable rebound following the record lows of 2024. The monthly average Henry Hub spot price increased by 61% in 2025 compared to 2024. An increase in demand is expected to outpace any expected growth in U.S. production, leading to a tightening of inventories and supporting higher prices throughout 2025.
Current report
Notwithstanding the significant commodity price volatility over the past several years, we have seen decreases in both the Western and Eastern Hemisphere. During the year ended December 31, 2025, the weekly average Western Hemisphere rig count, as reported by Baker Hughes decreased by 8% as compared to the weekly average during the year ended December 31, 2024. Additionally, during the year ended December 31, 2025, the weekly average Eastern Hemisphere rig count, as reported by Baker Hughes decreased by 7% as compared to the weekly average during the year ended December 31, 2024. However, notwithstanding the impact of longer laterals, improved rig efficiencies have partially offset the impact of this reduction.
Current report
Consolidated Results of Operations
Current report
We have two operating segments consisting of the Western Hemisphere segment and the Eastern Hemisphere segment. Our results of operations are evaluated by the Chief Executive Officer on a consolidated basis as well as at the segment level. The performance of our operating segments is primarily evaluated based on segment EBITDA (in addition to other measures), which is defined as income before taxes and before interest income (expense), net, other income (expense), net and corporate and other expenses not allocated to the operating segments.
Current report
Year Ended December 31, 2025 compared to Year Ended December 31, 2024
Current report
(1) Corporate and other includes stock compensation expense, monitoring expenses, and unallocated corporate expenses
Current report
(2) nm = not meaningful
Current report
Western Hemisphere
Current report
Western Hemisphere revenue was $148.6 million for the year ended December 31, 2025, a decrease of $3.8 million, or 3%, compared to the year ended December 31, 2024. The decrease in revenues was driven by a decrease in tool rental revenue as a result of lower customer activity levels during 2025. Western Hemisphere segment income was $49.5 million for the year ended December 31, 2025, a decrease of $2.0 million, or 4%, compared to the year ended December 31, 2024. The decrease was in line with the decrease in revenue and driven by lower customer activity levels in 2025.
Current report
Eastern Hemisphere
Current report
Eastern Hemisphere revenue was $23.5 million for the year ended December 31, 2025, an increase of $10.3 million, or 78% compared to the year ended December 31, 2024. The increase in revenues was driven by the recent acquisitions of tool rental businesses located within the Eastern Hemisphere. Eastern Hemisphere segment income was $0.5 million for the year ended December 31, 2025, a decrease of $0.8 million, or 59%, compared to the year ended December 31, 2024. The decrease was driven by increased headcount as a result of the acquisitions and an activity decline seen in the Middle Eastern market.
Current report
Corporate and other expenses
Current report
Corporate and other expenses was $13.9 million for the year ended December 31, 2025, a decrease of $1.5 million, or 15%, compared to the year ended December 31, 2024. The decrease was primarily driven by the reallocation of certain corporate expenses as a result of the recent segment reorganization in January of 2025.
Current report
Depreciation and amortization
Current report
Depreciation and amortization was $27.3 million for the year ended December 31, 2025, an increase of $3.5 million, or 10%, compared to the year ended December 31, 2024. The increase was primarily driven by the addition of Titan Tools property, plant and equipment and intangible assets following the close of the acquisition in January 2025.
Current report
Interest expense, net was $5.1 million for the year ended December 31, 2025, an increase of $1.6 million, or 50%, compared to the year ended December 31, 2024. The increase was primarily driven by a full year of interest on the credit facility compared to a partial year in 2024.
Current report
Other operating and non-operating costs, net
Current report
Other operating and non-operating costs, net was $4.7 million for the year ended December 31, 2025, a decrease of $2.9 million, or 38%, compared to the year ended December 31, 2024. The decrease was driven by a reduction in transaction costs related to the acquisitions occurring in 2024. This decrease was offset by restructuring costs related to the segment reorganization as well as software implementation fees.
Current report
Net cash provided by operating activities for the year ended December 31, 2024 was $6.1 million, the drivers being net income of $3.0 million, including add backs of non-cash charges totaling $20.6 million, offset by a decrease in net working capital of $17.6 million.
Current report
Net cash used in financing activities for the year ended December 31, 2025 was $9.3 million, resulting from net debt repayments of $8.0 million and purchases of treasury stock of $1.3 million.
Current report
Critical Accounting Estimates and Assumptions
Current report
We believe that of our significant accounting policies, which are described in Note 1, Summary of significant accounting policies, of our consolidated financial statements included in Item 8 of this Annual Report on Form 10-K, the following accounting policies involve a greater degree of judgment and complexity. Accordingly, we believe these are the most critical to fully understand and evaluate our financial condition and results of operations
Removed paragraphs (106)
Previous report
Drilling Tools International Holdings, Inc. (“DTIH”) entered into a business combination agreement (the “Agreement”) with ROC Energy Acquisition Corp. (“ROC”) on February 13, 2023. The transactions contemplated by the Agreement (the “Merger”) were completed on June 20, 2023, and in conjunction therewith ROC changed its name to Drilling Tools International Corporation (“DTIC” and, together with its subsidiaries, “DTI”, the “Company”, “we”, “us” or “our”, unless the context otherwise requires).
Previous report
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our audited annual financial statements and the related notes included under Item 8 – Consolidated Financial Statements and Supplementary Data of this Annual Report on Form 10-K (the “Report”) as well as DTIH’s audited consolidated financial statements and notes thereto included in the prospectus/proxy statement/consent solicitation statement, dated May 12, 2023, and filed with the SEC. The discussion and the analysis should also be read together with the information set forth in the section entitled “Business.” The following discussion contains forward-looking statements based upon current expectations that involve risks, uncertainties and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under the sections titled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” or in other parts of this Report. Our historical results are not necessarily indicative of the results that may be expected for any period in the future.
Previous report
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Previous report
Our business model primarily centers on revenue generated from tool rentals and product sales. We generated revenue from tool rentals and product sales of $154.4 million and $152.0 million for the years ended December 31, 2024 and 2023, respectively, and had net income of $3.0 million and $14.7 million for those same periods. We historically incurred significant operating losses since inception. As of December 31, 2024 and 2023, we had an accumulated deficit of $3.6 million and $6.3 million, respectively.
Previous report
We believe our future financial performance will be driven by continued investment in oil and gas drilling following years of industry underinvestment.
Previous report
In the first half of 2024, the oil and gas market witnessed a dynamic interplay of geopolitical tensions, supply concerns, and global demand fluctuations. Crude oil prices remained volatile, with benchmarks such as Brent and WTI experiencing fluctuations driven by a multitude of factors. Geopolitical tensions in key oil-producing regions, such as the Middle East, continued to influence market sentiment, leading to sporadic spikes in prices. Additionally, concerns over supply disruptions, particularly amidst conflicts and geopolitical uncertainties, added to the market’s unease. As the global market for crude oil has continued its recovery, technical recessions, specifically in China, have slowed progress and created fluctuations in global demand. As of December 31, 2024, the WTI oil price was approximately $72.44 per barrel.
Previous report
Prices for natural gas decreased somewhat throughout the first half of 2024 relative to the fourth quarter of 2023 in the U.S. due to several factors, including a mild winter in key consuming regions and increased production and availability, both of which led to an oversupply in the market. Additionally, constrained storage capacity and delivery delays resulted in uncertainty around liquified natural gas exports in the U.S. Despite these factors, the price of natural gas rebounded in the second half of 2024, to a point in which the December 2024 average price exceeded the December 2023 average price. Henry Hub natural gas spot prices have increased from an average of $2.52 per one million British Thermal Units (“MMBtu”) in December 2023 to $3.01 per MMBtu in December 2024.
Previous report
xxxviii
Previous report
The ongoing conflict in Ukraine and the Israel-Hamas conflict have caused uncertainty in the oil and natural gas markets, and the financial markets, both globally and in the U.S. Such uncertainty already has and could continue to cause stock price volatility and supply chain disruptions as well as higher oil and natural gas prices. These could result in higher inflation worldwide, impact consumer spending and negatively impact demand for our goods and services. Moreover, additional interest rate increases by the U.S. Federal Reserve to combat inflation could further increase the probability of a recession.
Previous report
Notwithstanding the significant commodity price volatility over the past several years, we have seen decreases in drilling activity in the Western Hemisphere. Conversely, Eastern Hemisphere drilling activity has increased year over year. For the years ended December 31, 2024 and 2023, the monthly average Western Hemisphere rig count was 940 and 1,040 rigs, respectively, or a decrease of 10%. For the years ended December 31, 2024 and 2023, the monthly average Eastern Hemisphere rig count was 747 and 732 rigs, respectively, or an increase of 2%.
Previous report
How We Evaluate Our Operations
Previous report
We use a number of financial and operational measures to routinely analyze and evaluate the performance of our business, including revenue, net and non-GAAP measures Adjusted EBITDA.
Previous report
We analyze our performance by comparing actual monthly revenue to revenue trends and revenue forecasts by product line as well as tool activity trends for each month. Our revenue is primarily derived from tool rental and product sales.
Previous report
Adjusted EBITDA
Previous report
We regularly evaluate our financial performance using Adjusted EBITDA. Our management believes Adjusted EBITDA is a useful financial performance measure as it excludes non-cash charges and other transactions not related to our core operating activities and allows more meaningful analysis of the trends and performance of our core operations.
Previous report
Please refer to the section titled “Non-GAAP Financial Measures” below for a reconciliation of Adjusted EBITDA to net income, the most directly comparable financial performance measure calculated and presented in accordance with GAAP.
Previous report
Free Cash Flow
Previous report
Beginning in the first quarter of fiscal year 2024, we revised our presentation of non-GAAP measures to exclude the presentation of free cash flow in alignment with industry practices and to enhance comparability with our peers. The Company has determined that GAAP disclosures regarding the Company’s liquidity and capital resources, in the form provided in the Company’s recent periodic reports and without further enhancement through the inclusion of non-GAAP free cash flow information, provide investors with sufficient information on the Company’s cash available for investments, acquisitions, and working capital requirements.
Previous report
Key Components of Results of Operations
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Previous report
We currently generate our revenue, net from tool rental services and product sales. Tool rental services consist of rental services, inspection services, and repair services and is accounted for in accordance Topic 842. We recognize revenues from renting tools on a straight-line basis. Our rental contract periods are daily, monthly, per well, or based on footage. As part of this straight-line methodology, when the equipment is returned, we recognize as incremental revenue the excess, if any, between the amount the customer is contractually required to pay, which is based on the rental contract period applicable to the actual number of days the drilling tool was out on rent, over the cumulative amount of revenue recognized to date.
Previous report
The rental tool recovery component of product sales revenue is recognized when a tool is deemed to be lost-in-hole, damaged-beyond-repair, or lost-in-transit while in the care, custody, or control of the customer. Other made to order product sales revenue is recognized when the product is picked up by the customer and control is transferred. Product sale revenue is accounted for in accordance with Topic 606.
Previous report
We expect our tool rental services revenue to increase due to an expected increase in drilling activity, customer pricing and market share.
Previous report
We expect that product sales revenue will increase as aged and consumable products will continue to be replaced in order to maintain or increase capacity. Additionally, product sale focused acquisitions are expected to further increase product sale revenue.
Previous report
Costs and Expenses
Previous report
Our costs and expenses consist of cost of revenue, selling, general and administrative expense, and depreciation and amortization expense.
Previous report
Our cost of revenue consists primarily of all direct and indirect expenses related to providing our tool rental services offering and delivering our product sales, including personnel-related expenses and costs associated with maintaining the facilities.
Previous report
We expect our total cost of tool rental revenue and our total cost of product sale revenue to increase in absolute dollars in future periods, corresponding to our anticipated growth in revenue and employee headcount. This increase in headcount is intended to support our customers and maintain the manufacturing, operations and field service team. The expected increase in these two costs builds-in some expected cost inflation.
Previous report
We expect that gross margins will continue to improve slightly as we leverage our existing cost structure to increase our business activity. However, we expect to see continued pricing pressure from customers which may offset any incremental gains.
Previous report
Selling, General and Administrative Expense
Previous report
General and administrative expenses consist primarily of personnel-related expenses, including salaries, benefits and stock-based compensation for personnel, and outside professional services expenses including legal, audit and accounting services, insurance, other administrative expenses and allocated facility costs for our administrative functions.
Previous report
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Previous report
We expect our operating expenses to increase in absolute dollars for the foreseeable future as a result of operating as a public company as well as the Company continues to grow and scale operations. In particular, we expect our legal, accounting, tax, personnel-related expenses and directors’ and officers’ insurance costs reported within general and administrative expense to increase as we establish more comprehensive compliance and governance functions, increase security and IT compliance functions, review internal controls over financial reporting in accordance with the Sarbanes-Oxley Act and prepare and distribute periodic reports as required by the rules and regulations of the SEC. As a result, our historical results of operations may not be indicative of our results of operations in future periods.
Previous report
Selling expenses consist primarily of personnel-related expenses, including salaries, benefits and stock-based compensation for personnel, direct advertising, marketing and promotional material costs, sales commission expense, consulting fees and allocated facility costs for our sales and marketing functions.
Previous report
We intend to increase investments in our sales and marketing organization to increase revenue, expand our global customer base, and broaden our brand awareness. We expect our sales and marketing expenses to continue to increase in absolute dollars for the foreseeable future.
Previous report
Depreciation and Amortization Expense
Previous report
Depreciation and amortization expense relates to the consumption of our property and equipment, which consists of rental tools, shop equipment, computer equipment, furniture and fixtures and leasehold improvements, and the amortization of our intangible assets mainly related to customer relationships, patents, and developed technology.
Previous report
Other expense, net
Previous report
Our other expense, net is primarily comprised of interest income (expense), gain on sale of property, unrealized gain (loss) on securities, transaction related expenses, and other miscellaneous income and expense unrelated to our core operations.
Previous report
Results of Operations
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Reworded paragraphs (16)
Previous wording
We are a global oilfield services company that designs, engineers, manufactures and provides a differentiated, rental-focused offering of tools for use in onshore and offshore horizontal and directional drilling operations, as well as other cutting-edge solutions across the well life cycle. We now operate from 16 service and support centers across North America and 11 international service and support centers across the Europe, Middle East, Africa ("EMEA") regions and Asia-Pacific ("APAC") regions.
Current wording
We are a global oilfield services company that designs, engineers, manufactures and provides a differentiated, rental-focused offering of tools for use in onshore and offshore horizontal and directional drilling operations, as well as other cutting-edge solutions across the well life cycle. We operate from 15 locations in North America and 11 international service and support centers in Europe, the Middle East, and Asia-Pacific.
Previous wording
Demand for our services and products depends primarily upon the general level of activity in the oil and gas industry, including the number of active drilling rigs, the number of wells drilled, the depth and working pressure of these wells, the number of well completions, the level of well remediation activity, the volume of production and the corresponding capital spending by oil and natural gas companies. Oil and gas activity is in turn heavily influenced by, among other factors, investor sentiment, availability of capital and oil and gas prices locally and worldwide, which have historically been volatile.
Current wording
See "Item 1. Business" for information on our products and business. Demand for our services and products depends primarily upon the general level of activity in the oil and gas industry, including the number of active drilling rigs, the number of wells drilled, the depth and working pressure of these wells, the number of well completions, the level of well remediation activity, the volume of production and the corresponding capital spending by oil and natural gas companies. Oil and gas activity is in turn heavily influenced by, among other factors, investor sentiment, availability of capital and oil and gas prices locally and worldwide, which have historically been volatile.
Previous wording
Our product sales revenues are primarily dependent on oil and gas companies paying for tools that are lost or damaged in their drilling programs as well as the customers need to replace aging or consumable products and our ability to provide competitive pricing. With the addition of Deep Casing Tools, we now sell tools to the end users for use in constructing their wells.
Current wording
Our product sales revenues are primarily dependent on oil and gas companies paying for tools that are lost or damaged in their drilling programs as well as the customers need to replace aging or consumable products and our ability to provide competitive pricing.
Previous wording
Despite the volatility in spot oil prices described above, our customers tend to be more focused on medium-term and long term commodity prices when making investment decisions due to the longer lead times for onshore and offshore projects. These forward prices experienced far less volatility in 2022 and 2023 and have maintained levels in 2024 which are highly constructive for onshore and offshore project demand.
Current wording
In the year ended December 31, 2025, the oil and gas market witnessed a dynamic interplay of geopolitical tensions, shifting demand dynamics, and evolving economic factors. U.S. oil production reached record highs, averaging 13.5 million barrels per day, driven by the Permian Basin and offshore developments. However, this surge in supply coincided with an increasing surplus in global oil supply over demand, leading to downward pressure on prices. Crude oil prices experienced declines, specifically WTI, whose monthly average decreased by 14% in 2025 compared to 2024. Despite the high volatility in spot oil prices described above, our customers tend to be more focused on medium-term and long term commodity prices when making investment decisions due to the longer lead times for offshore projects.
Previous wording
We are experiencing the impacts of global inflation, both in increased personnel costs and the prices of goods and services required to operate our rigs and execute capital projects. While we are currently unable to estimate the ultimate impact of rising prices, we do expect that our costs will continue to rise in the near term and will impact our profitability.
Current wording
We are experiencing the impacts of global inflation, both in increased personnel costs and the prices of goods and services required to operate rigs and execute capital projects. While we are currently unable to estimate the ultimate impact of rising prices, we do expect that our costs will continue to rise in the near term and will impact our profitability.
Previous wording
The discussion below relating to significant line items from our consolidated statements of operations and comprehensive income are based on available information and represent our analysis of significant changes or events that impact the comparability of the reported amount. Where appropriate, we have identified specific events and changes that affect comparability or trends and, where reasonably practicable, we have quantified the impact of such items.
Current wording
The following discussions relating to significant line items from our consolidated statements of comprehensive income (loss) are based on available information and represent our analysis of significant changes or events that impact the comparability of reported amounts.
Previous wording
We use the non-GAAP financial measure Adjusted EBITDA, which is defined as net income (loss); excluding: interest income; interest expense; other income (expense), including those that do not reflect our core operating activities, net; income tax benefit (expense); depreciation and amortization; and certain other non-cash items impacting net income (loss) from time to time. We believe that Adjusted EBITDA helps identify underlying trends in our business that could otherwise be masked by the effect of the expenses that we exclude in Adjusted EBITDA.
Current wording
We use the non-GAAP financial measure Adjusted EBITDA, which is defined as net income (loss); excluding interest income; interest expense; other operating and non-operating expense, net, net; income tax benefit (expense); depreciation and amortization; and certain other non-cash or non-recurring items impacting net income (loss) from time to time. We believe that Adjusted EBITDA helps identify underlying trends in our business that could otherwise be masked by the effect of the expenses that we exclude in Adjusted EBITDA.
Previous wording
On December 31, 2024 and 2023, we had $6.2 million and $6.0 million of cash and cash equivalents, respectively. Our primary sources of liquidity and capital resources are cash on hand, cash flows generated by operating activities and, if necessary, borrowings under the Credit Facility Agreement. We may use additional cash generated to execute strategic acquisitions or for general corporate purposes. We believe that our existing cash on hand, cash generated from operations and available borrowings under the Credit Facility Agreement will be sufficient for at least the next 12 months to meet working capital requirements and anticipated capital expenditures.
Current wording
On December 31, 2025 and 2024, we had $3.6 million and $6.2 million of cash and cash equivalents, respectively. Our primary sources of liquidity and capital resources are cash on hand, cash flows generated by operating activities and, if necessary, borrowings under the Credit Facility Agreement. We may use additional cash generated to execute strategic acquisitions or for general corporate purposes. We believe that our existing cash on hand, cash generated from operations and available borrowings under the Credit Facility Agreement will be sufficient for at least the next twelve months to meet working capital requirements and anticipated capital expenditures.
Previous wording
Reference is made to the disclosure set forth under the heading “Revolving Credit Facility” in Note 8, Revolving Credit Facility, of the notes to the consolidated financial statements included elsewhere in this Report.
Current wording
Reference is made to the disclosure set forth under the heading “Revolving Credit Facility” in Note 19, Long-Term Debt, of the notes to the consolidated financial statements included elsewhere in this Report.
Previous wording
Net cash provided by operating activities for the year ended December 31, 2024 was $6.1 million resulting from our net income of $3.0 million, adjusted for non-cash charges of $29.3 million in depreciation, amortization, deferred financing, and leases, $2.1 million of stock-based compensation expense and $0.5 million of other non-cash charges. This was partially offset by a $10.0 million gain on rental tool recovery sales, $0.8 million in deferred tax benefits, $0.4 million in unrealized gains on equity securities, and $17.6 million in net changes from operating assets and liabilities. The $17.6 million in cash used in operating assets and liabilities is primarily due to a $4.0 million cash outflow in accounts receivable associated with higher revenues in 2024, a $4.3 million cash outflow related to increased inventory purchases, a $4.8 million cash outflow from operating lease liabilities as we increase right-of-use assets on hand, and a $5.3 million cash outflow due to a decrease in the account payable and accrued expenses balances. These outflows were offset by a cash inflow related to prepaid expenses of $0.9 million. We will continue to evaluate our capital requirements for both short-term and long-term liquidity needs, which could be affected by various risks and uncertainties, including, but not limited to, the effects of the current inflationary environment, rising interest rates, and other risks detailed in the section of this Report entitled “Risk Factors.”
Current wording
Net cash provided by operating activities for the year ended December 31, 2025 was $19.9 million, the drivers being a net loss of $3.7 million, including a decrease in net working capital of $3.9 million, offset by non-cash add backs of $27.5 million. We will continue to evaluate our capital requirements for both short-term and long-term liquidity needs, which could be affected by various risks and uncertainties, including, but not limited to, the effects of the current inflationary environment, rising interest rates, and other risks detailed in the section of this Report entitled “Risk Factors.”
Previous wording
Net cash used in investing activities for the year ended December 31, 2023 was $23.9 million. Purchases of property, plant, and equipment of $43.8 million were partially offset by proceeds from rental tool recovery sales of $19.7 million and proceeds from sale of property of $0.2 million.
Current wording
Net cash used in investing activities for the year ended December 31, 2025 was $13.3 million, resulting from purchases of property, plant, and equipment of $20.1 million, purchases of intangible assets of $1.7 million, and the acquisition of Titan for $5.6 million, partially offset by proceeds from rental tool recovery sales of $14.2 million.
Previous wording
Net cash used in investing activities for the year ended December 31, 2024 was $53.6 million. Purchases of property, plant, and equipment of $22.9 million and cash spent in business acquisitions of $47.3 million were partially offset by proceeds from rental tool recovery sales of $15.3 million and proceeds from sale of equity securities of $1.2 million.
Current wording
Net cash used in investing activities for the year ended December 31, 2024 was $53.6 million, resulting from purchases of property, plant, and equipment of $22.9 million and multiple business acquisitions totaling $47.3 million. These outflows were partially offset by proceeds from rental tool recovery sales of $15.3 million and proceeds from the sale of equity securities of $1.2 million.
Previous wording
Net cash provided by financing activities for the year ended December 31, 2024 was $47.9 million resulting from proceeds from the revolving line of credit of $38.6 million and proceeds from long-term debt of $25.0 million. These inflows were offset by payments on the revolving credit facility of $11.5 million, payments on long-term debt of $3.5 million, and payments of debt issuance costs of $0.7 million.
Current wording
Net cash provided by financing activities for the year ended December 31, 2024 was $47.9 million, resulting from net debt borrowings of $48.6 million offset by the payment of debt issuance costs of $0.7 million.
Previous wording
We evaluate the recoverability of identifiable intangible assets whenever events or changes in circumstances indicate that an intangible asset’s carrying amount may not be recoverable. Such circumstances could include, but are not limited to, (1) a significant decrease in the market value of an asset, (2) a significant adverse change in the extent to or manner in which an asset is used, or (3) an accumulation of costs significantly in excess of the amount originally expected for the acquisition of an asset. We measure the carrying amount of the asset against the estimated undiscounted future cash flows associated with it. Should the sum of the expected future net cash flows be less than the carrying value of the asset being evaluated, an impairment loss would be recognized. The impairment loss would be calculated as the amount by which the carrying value of the asset exceeds its fair value. The fair value is measured based on quoted market prices, if available. If quoted market prices are not available, the estimate of
Current wording
We evaluate the recoverability of identifiable intangible assets whenever events or changes in circumstances indicate that an intangible asset’s carrying amount may not be recoverable. Such circumstances could include, but are not limited to, (1) a significant decrease in the market value of an asset, (2) a significant adverse change in the extent to or manner in which an asset is used, or (3) an accumulation of costs significantly in excess of the amount originally expected for the acquisition of an asset. We measure the carrying amount of the asset against the estimated undiscounted future cash flows associated with it. Should the sum of the expected future net cash flows be less than the carrying value of the asset being evaluated, an impairment loss would be recognized. The impairment loss would be calculated as the amount by which the carrying value of the asset exceeds its fair value. The fair value is measured based on quoted market prices, if available. If quoted market prices are not available, the estimate of fair value is based on various valuation techniques, including the discounted value of estimated future cash flows. The evaluation of asset impairment requires us to make assumptions about future cash flows over the life of the asset being evaluated. These assumptions require significant judgment and actual results may differ from assumed and estimated amounts. See Note 7, Goodwillfor discussion around the Company's resegmentation and resulting goodwill impairment that occurred during the year ended December 31, 2025.
Previous wording
In determining the fair values of assets acquired (including intangible assets) and liabilities assumed, we utilize a variety of methods. Each asset acquired and liability assumed is measured at fair value from the perspective of a market participant. The methods used to estimate the fair values of intangible assets incorporate significant estimates
Current wording
In determining the fair values of assets acquired (including intangible assets) and liabilities assumed, we utilize a variety of methods. Each asset acquired and liability assumed is measured at fair value from the perspective of a market participant. The methods used to estimate the fair values of intangible assets incorporate significant estimates and assumptions regarding the estimates a market participant would make in order to evaluate an asset, including, but not limited to, a market participant’s use of the asset as well as forecasts for cash flows, revenue growth, asset lives, customer attrition rates, royalty rates, income tax rates, and discount rates.
Previous wording
Costs that are directly attributable to business combinations are expensed as incurred within other expenses, net, on the consolidated statements of income and comprehensive income. The results of operations of acquisitions are included in the consolidated financial statements from the date of acquisition.
Current wording
Costs that are directly attributable to business combinations are expensed as incurred within other expenses, net, on the consolidated statements of comprehensive income (loss). The results of operations of acquisitions are included in the consolidated financial statements from the date of acquisition.
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
xlvi including, but not limited to, the effects of the current inflationary environment, rising interest rates, and other risks detailed in the section of this Report entitled “Risk Factors.”
Previous report — wording carried elsewhere
l fair value is based on various valuation techniques, including the discounted value of estimated future cash flows. The evaluation of asset impairment requires us to make assumptions about future cash flows over the life of the asset being evaluated. These assumptions require significant judgment and actual results may differ from assumed and estimated amounts. For the year ended December 31, 2024 and 2023, management determined that there was no impairment with regard to our intangible assets.
Previous report — wording carried elsewhere
li and assumptions regarding the estimates a market participant would make in order to evaluate an asset, including, but not limited to, a market participant’s use of the asset as well as forecasts for cash flows, revenue growth, asset lives, customer attrition rates, royalty rates, income tax rates, and discount rates.