Nine Energy Service, Inc.

Previous wording

This section contains forward-looking statements based on our current expectations, estimates, and projections about our operations and the industry in which we operate. Our actual results may differ materially from those anticipated in these forward-looking statements because of various risks and uncertainties, including those described in the sections titled “Cautionary Note Regarding Forward-Looking Statements” in this Quarterly Report on Form 10-Q and “Risk Factors” in Item 1A of Part I of our Annual Report on Form 10-K for the year ended December 31, 2024.

Current wording

This section contains forward-looking statements based on our current expectations, estimates, and projections about our operations and the industry in which we operate. Our actual results may differ materially from those anticipated in these forward-looking statements because of various risks and uncertainties, including those described in the sections titled “Cautionary Note Regarding Forward-Looking Statements” in this Quarterly Report on Form 10-Q and “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024 and this Quarterly Report on Form 10-Q.

Previous wording

Our business depends, to a significant extent, on the level of unconventional resource development activity and corresponding capital spending of oil and natural gas companies. These activity and spending levels are strongly influenced by current and expected oil and natural gas prices. In recent years, commodity prices have been extremely volatile and unpredictable. During 2024, natural gas prices were extremely depressed, averaging approximately $2.19 per million British thermal units (“MMBtu”) for the year. Through the first half of 2025, natural gas prices have improved averaging approximately $3.66 per MMBtu. However, despite a more supportive natural gas price during the first half of 2025, we have yet to see any meaningful activity increases in the natural gas-levered basins like the Haynesville and Northeast. For example, during the fourth quarter of 2024, the average rig count in the Haynesville was 31 rigs and at the end of the second quarter of 2025, the average rig count was 36 rigs. Nonetheless, we remain positive on the long-term outlook of natural gas, even as prices trended downward in the second quarter of 2025.

Current wording

Our business depends, to a significant extent, on the level of unconventional resource development activity and corresponding capital spending of oil and natural gas companies. These activity and spending levels are strongly influenced by current and expected oil and natural gas prices. In recent years, commodity prices have been extremely volatile and unpredictable. During 2024, natural gas prices were extremely depressed, averaging approximately $2.19 per million British thermal units (“MMBtu”) for the year. In 2025, through the third quarter, natural gas prices have improved as compared to 2024, averaging approximately $3.45 per MMBtu for the nine months ended September 30, 2025. However, despite a more supportive natural gas price environment thus far in 2025, we have yet to see any meaningful activity increases in the natural gas-levered basins like the Haynesville and Northeast. For example, during the fourth quarter of 2024, the average rig count in the Haynesville was 31 rigs and at the end of the third quarter of 2025, the rig count was 39 rigs. Nonetheless, the long-term outlook on natural gas demand remains positive.

Previous wording

As for oil prices, towards the end of 2024, we began to see West Texas Intermediate (“WTI”) oil prices decline, which was exacerbated by the announcement of new tariffs by the Trump Administration in April 2025 and OPEC communicating they would be increasing production in May and July 2025. During the first quarter of 2025, the average WTI price was $71.78 per barrel as compared to $64.57 per barrel in the second quarter of 2025, a decline of approximately 10%. Notably, in the second quarter of 2025, WTI price fell below $60 per barrel for the first time in four years. Because of the decline in oil prices, as well as increased costs and market uncertainty, our customers began to decrease activity. According to Baker Hughes, during the second quarter of 2025, 45 rigs, most of which were in the Permian Basin, came out of the U.S. market, a decline of approximately 8% from the first quarter of 2025. Due to the spot-market nature of our business, our revenue and profitability generally move very similarly to U.S. rig, frac, and stage counts, and starting in the second quarter of 2025, we began to experience activity declines as well as receive pricing pressure across all of our service lines, especially in the oil-levered basins, which negatively impacted both revenue and earnings during the second quarter of 2025.

Current wording

As for oil prices, towards the end of 2024, we began to see West Texas Intermediate (“WTI”) oil prices decline, which was exacerbated by the announcement of new tariffs by the Trump Administration in April 2025 and OPEC communicating they would be increasing production. In the second quarter of 2025, WTI price fell below $60 per barrel for the first time in four years. Because of the decline in oil prices, as well as increased costs and market uncertainty, our customers began to decrease activity. According to Baker Hughes, from the end of the first quarter of 2025 through the end of the third quarter of 2025, 43 rigs, most of which were in the Permian Basin, came out of the U.S. market, a decline of approximately 7% compared to the number of rigs at the end of the first quarter of 2025. During the first quarter of 2025, the average WTI price was $71.78 per barrel as compared to $65.82 per barrel in the third quarter of 2025, a decline of approximately 8%.

Previous wording

Cost of revenues increased $9.4 million, or 8%, to $121.4 million for the second quarter of 2025. The increase in comparison to the second quarter of 2024 was primarily related to a $6.6 million increase in materials installed and consumed while performing services, a $2.1 million increase in employee-related costs, and a $0.6 million increase in vehicle costs, each in comparison to the second quarter of 2024.

Current wording

Cost of revenues decreased $1.7 million, or 2%, to $111.7 million for the third quarter of 2025. The decrease in comparison to the third quarter of 2024 was primarily related to a $2.2 million decrease in materials installed and consumed while performing services and a $1.3 million decrease in employee-related costs. The overall decrease was partially offset by a $0.7 million increase in repairs and maintenance costs, a $0.6 million increase in vehicle costs, and a $0.5 million increase in insurance, facility and other costs, each in comparison to the third quarter of 2024.

Previous wording

Adjusted gross profit increased approximately $5.5 million to $25.8 million for the second quarter of 2025 due to the factors described above under “Revenues” and “Cost of Revenues.”

Current wording

Adjusted gross profit decreased approximately $4.4 million to $20.3 million for the third quarter of 2025 due to the factors described above under “Revenues” and “Cost of Revenues.”

Previous wording

General and administrative expenses increased $1.4 million to $13.9 million for the second quarter of 2025. The increase was primarily related to a $1.5 million increase in employee-related costs between periods.

Current wording

General and administrative expenses increased $0.4 million to $12.8 million for the third quarter of 2025. The increase was primarily related to a $0.2 million increase in professional fees and a $0.1 million increase in employee-related costs between periods.

Previous wording

Depreciation expense decreased $0.8 million to $5.8 million for the second quarter of 2025. The decrease in comparison to the second quarter of 2024 was primarily due to a decrease in capital expenditures across certain lines of service over the last twelve months.

Current wording

Depreciation expense decreased $0.5 million to $5.8 million for the third quarter of 2025. The decrease in comparison to the third quarter of 2024 was primarily related to a decrease in capital expenditures across certain lines of service over the last twelve months.

Previous wording

We recorded $2.8 million in amortization of intangibles expense (comprised of technology and customer relationships) in both the second quarter of 2025 and the second quarter of 2024.

Current wording

We recorded $2.8 million in amortization of intangibles expense (comprised of technology and customer relationships) in both the third quarter of 2025 and the third quarter of 2024.

Previous wording

Net loss decreased $3.7 million, or 26%, to $10.4 million for the second quarter of 2025, and Adjusted EBITDA increased $4.4 million, or 45%, to $14.1 million for the second quarter of 2025. The changes were primarily due to the fluctuations in revenues and expenses discussed above. See “Non-GAAP Financial Measures” below for further information regarding Adjusted EBITDA.

Current wording

Net loss increased $4.5 million, or 44%, to $14.6 million for the third quarter of 2025, and Adjusted EBITDA decreased $4.6 million, or 33%, to $9.6 million for the third quarter of 2025. The changes were primarily due to the fluctuations in revenues and expenses discussed above. See “Non-GAAP Financial Measures” below for further information regarding Adjusted EBITDA.

Previous wording

Results for the Six Months Ended June 30, 2025 Compared to the Six Months Ended June 30, 2024

Current wording

Results for the Nine Months Ended September 30, 2025 Compared to the Nine Months Ended September 30, 2024

Previous wording

Revenues increased $23.2 million, or 8%, to $297.7 million for the first six months of 2025. The increase in comparison to the first six months of 2024 was primarily related to cementing revenue (including pump downs), which increased $15.3 million, or 16%, as total cement job count increased 23%, each in comparison to the first six months of 2024. In addition, wireline revenue increased $6.7 million, or 12%, as total completed wireline stages increased 27%, each in comparison to the first six months of 2024, and tools revenue increased $3.2 million, or 5%, as completion tools stages increased 18%, each in comparison to the first six months of 2024. The overall increase was partially offset by pricing pressure in coiled tubing, which decreased its revenue by $2.0 million, or 4%, in comparison to the first six months of 2024. Lower pricing across cementing, wireline, and tools also partially offset overall revenue increases between periods.

Current wording

Revenues increased $17.1 million, or 4%, to $429.7 million for the first nine months of 2025. The increase in comparison to the first nine months of 2024 was primarily related to cementing revenue (including pump downs), which increased $13.4 million, or 9%, as total cement job count increased 16%, each in comparison to the first nine months of 2024. In addition, wireline revenue increased $7.0 million, or 8%, as total completed wireline stages increased 28%, and tools revenue increased $3.0 million, or 3%, as completion stages increased 8%, each in comparison to the first nine months of 2024. The overall increase was partially offset by coiled tubing, which decreased its revenue by $6.3 million, or 7%, in comparison to the first nine months of 2024 due to pricing pressure coupled with volume reductions as total days worked decreased by 10% between periods. Lower pricing across cementing and wireline also partially offset overall revenue increases between periods.

Previous wording

Cost of revenues increased $15.9 million, or 7%, to $243.9 million for the first six months of 2025. The increase in comparison to the first six months of 2024 was related to a $11.2 million increase in materials installed and consumed while performing services, a $2.3 million increase in employee-related costs, a $1.5 million increase in vehicle costs, and a $0.9 million increase in taxes, facility, and other costs, each in comparison to the first six months of 2024.

Current wording

Cost of revenues increased $14.1 million, or 4%, to $355.6 million for the first nine months of 2025. The increase in comparison to the first nine months of 2024 was related to a $9.8 million increase in materials installed and consumed while performing services, a $2.1 million increase in vehicle costs, a $1.6 million increase in insurance costs, and a $0.6 million increase in repair and maintenance, each in comparison to the first nine months of 2024.

Previous wording

Adjusted gross profit increased approximately $7.3 million to $53.8 million for the first six months of 2025 due to the factors described above under “Revenues” and “Cost of Revenues.”

Current wording

Adjusted gross profit increased approximately $2.9 million to $74.1 million for the first nine months of 2025 due to the factors described above under “Revenues” and “Cost of Revenues.”

Previous wording

Depreciation expense decreased $1.7 million to $11.6 million for the first six months of 2025. The decrease in comparison to the first six months of 2024 was primarily due to a decrease in capital expenditures across certain lines of service over the last twelve months.

Current wording

Depreciation expense decreased $2.2 million to $17.4 million for the first nine months of 2025. The decrease in comparison to the first nine months of 2024 was primarily due to a decrease in capital expenditures across certain lines of service over the last twelve months.

Previous wording

We recorded $5.6 million in amortization of intangibles expense (comprised of technology and customer relationships) in both the first six months of 2025 and the first six months of 2024.

Current wording

We recorded $8.4 million in amortization of intangibles expense (comprised of technology and customer relationships) in both the first nine months of 2025 and the first nine months of 2024.

Previous wording

Non-operating expenses increased $2.0 million to $26.8 million for the first six months of 2025. The increase was primarily attributed to the write-off of $1.5 million of deferred financing costs associated with the 2018 ABL Credit Facility in the first six months of 2025 that did not occur in the first six months of 2024. The increase was also partly attributed to increased amortization of deferred financing costs between periods.

Current wording

Non-operating expenses increased $2.9 million to $40.2 million for the first nine months of 2025. The increase was primarily attributed to the write-off of $1.5 million of deferred financing costs associated with the 2018 ABL Credit Facility in the first nine months of 2025 that did not occur in the first nine months of 2024. The increase was also partly attributed to a $1.3 million increase in amortization of deferred financing costs in comparison to the first nine months of 2024.

Previous wording

We recorded an income tax benefit of $0.3 million for the first six months of 2025 compared to an income tax provision of $0.3 million for the first six months of 2024. The difference between the periods was primarily attributed to a $0.5 million discrete income tax benefit in the first six months of 2025 that did not occur in the first six months of 2024.

Current wording

We recorded an income tax benefit of $0.3 million for the first nine months of 2025 compared to an income tax provision of $0.4 million for the first nine months of 2024. The difference between the periods was primarily attributed to a $0.5 million discrete income tax benefit in the first nine months of 2025 that did not occur in the first nine months of 2024.

Previous wording

Net loss decreased $4.6 million, or 21%, to $17.5 million for the first six months of 2025, and Adjusted EBITDA increased $5.9 million, or 24%, to $30.7 million for the first six months of 2025. The changes were primarily due to the fluctuations in revenues and expenses discussed above. See “Non-GAAP Financial Measures” below for further information regarding Adjusted EBITDA.

Current wording

Net loss decreased $0.1 million, or less than 1%, to $32.1 million for the first nine months of 2025, and Adjusted EBITDA increased $1.2 million, or 3%, to $40.3 million for the first nine months of 2025. The changes were primarily due to the fluctuations in revenues and expenses discussed above. See “Non-GAAP Financial Measures” below for further information regarding Adjusted EBITDA.

Previous wording

Adjusted EBITDA should not be considered as an alternative to, or more meaningful than, net income (loss) as determined in accordance with accounting principles generally accepted in the United States of America (“GAAP”) or as an indicator of our operating performance. Certain items excluded from Adjusted EBITDA are significant components in understanding and assessing a company’s financial performance, such as a company’s cost of capital and tax structure, as well as the historic costs of depreciable assets, none of which are components of Adjusted EBITDA. Our computation of Adjusted EBITDA may not be comparable to other similarly titled measures of other companies.

Current wording

Adjusted EBITDA should not be considered as an alternative to, or more meaningful than, net income (loss) as determined in accordance with accounting principles generally accepted in the United States of America (“GAAP”) or as an indicator of our operating performance. Certain items excluded from Adjusted EBITDA are significant components in understanding and assessing a company’s financial performance, such as a company’s cost of capital and tax structure, as well as the historic costs of depreciable assets, none of which are components of Adjusted EBITDA. Our computation of Adjusted

Previous wording

The following table presents a reconciliation of the non-GAAP financial measure of Adjusted EBITDA to the GAAP financial measure of net income (loss) for the three and six months ended June 30, 2025 and 2024:

Current wording

The following table presents a reconciliation of the non-GAAP financial measure of Adjusted EBITDA to the GAAP financial measure of net income (loss) for the three and nine months ended September 30, 2025 and 2024:

Previous wording

The following table provides our calculation of Adjusted ROIC for the three and six months ended June 30, 2025 and 2024. The following table also presents ROIC (defined as net income (loss), divided by average total capital) and a reconciliation of the non-GAAP financial measure of adjusted after-tax net operating profit (loss) to the most directly comparable GAAP measure of net income (loss), in each case for the three and six months ended June 30, 2025 and 2024.

Current wording

The following table provides our calculation of Adjusted ROIC for the three and nine months ended September 30, 2025 and 2024. The following table also presents ROIC (defined as net income (loss), divided by average total capital) and a reconciliation of the non-GAAP financial measure of adjusted after-tax net operating profit (loss) to the most directly comparable GAAP measure of net income (loss), in each case for the three and nine months ended September 30, 2025 and 2024.

Previous wording

The following table presents a reconciliation of adjusted gross profit (loss) to GAAP gross profit (loss) for the three and six months ended June 30, 2025 and 2024:

Current wording

The following table presents a reconciliation of adjusted gross profit (loss) to GAAP gross profit (loss) for the three and nine months ended September 30, 2025 and 2024:

Previous wording

Historically, we have met our liquidity needs principally from cash on hand, cash flows from operations and, if needed, external borrowings and issuances of debt and equity securities. Our principal uses of cash are to fund capital expenditures, service our outstanding debt (including semi-annual interest payments ($19.5 million based on amounts outstanding as of June 30, 2025) to the holders of the 2028 Notes (as defined and described below), which began on August 1, 2023), and fund our working capital requirements. Due to our high level of variable costs and the asset-light make-up of our business, we have historically been able to quickly implement cost-cutting measures and will continue to adapt as the market dictates. For example, in 2024, we implemented certain cost reduction and supply chain initiatives. These ongoing initiatives have helped reduce some of our largest material costs, and starting at the end of the second quarter of 2024, we began to see positive impacts, that have continued into 2025, on our earnings as a result of such efforts. We have also used cash to make open market repurchases of our debt and may, from time to time, continue to make such repurchases when it is opportunistic to do so to manage our debt maturity profile.

Current wording

Historically, we have met our liquidity needs principally from cash on hand, cash flows from operations and, if needed, external borrowings and issuances of debt and equity securities. We continually monitor potential capital sources, including equity and debt financing, to meet our investment and target liquidity requirements. Our future success and growth will be highly dependent on our ability to continue to access outside sources of capital, which we cannot guarantee. Our principal uses of cash are to fund capital expenditures, service our outstanding debt, and fund our working capital requirements. Due to our high level of variable costs and the asset-light make-up of our business, we have historically been able to quickly implement cost-cutting measures. For example, in 2024, we implemented certain cost reduction and supply chain initiatives. These ongoing initiatives have helped reduce some of our largest material costs, and starting at the end of the second quarter of 2024, we began to see positive impacts, that have continued into 2025, on our earnings as a result of such efforts.

Previous wording

At June 30, 2025, we had $14.2 million of cash and cash equivalents and $51.3 million of availability under the 2025 ABL Credit Facility (as defined and described below), which resulted in a total liquidity position of $65.5 million.

Current wording

At September 30, 2025, we had $14.4 million of cash and cash equivalents and $25.9 million of availability under the 2025 ABL Credit Facility, which resulted in a total liquidity position of $40.3 million. As a result of the current commodity price environment and its impact on our inventory’s appraised value, we currently expect our borrowing base under the 2025 ABL Credit Facility will be reduced by approximately $2.2 million as of October 31, 2025 and will be further reduced by approximately $2.2 million on each of November 30, 2025, December 31, 2025, and January 31, 2026, which would reduce our availability thereunder and our total liquidity position by such amounts. Future increases or decreases in our inventory’s appraised value would increase or decrease, respectively, our borrowing base. Our next inventory appraisal is currently expected to be conducted by mid-December 2025 and could increase or decrease our borrowing base as of December 31, 2025. The availability under the 2025 ABL Credit Facility could also be reduced in the future if the agent thereunder (the “Agent”) establishes reserves against the borrowing base or the Maximum Revolving Facility Amount (as defined below); the Agent may from time to time establish and revise such reserves in such amounts as the Agent, using reasonable business judgment exercised in good faith, deems appropriate, subject to the terms of the 2025 ABL Credit Agreement (as defined below). Also, as in the past, we expect our total liquidity position to be materially impacted by the semi-annual interest payments ($19.5 million each, based on amounts outstanding as of September 30, 2025) to the holders of the 2028 Notes (as defined below). Our liquidity position will also be impacted by our operating performance (which is subject to general economic conditions and other factors, many of which are beyond our control, including those discussed under “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024 and this Quarterly Report on Form 10-Q) and may also be adversely impacted by our vendors’ or customers’ actions (e.g., if our vendors were to require earlier payment from us or if our customers were to delay payment to us). Based on our current forecasts, we believe that our cash on hand, together with cash flows from operations and borrowings under the 2025 ABL Credit Facility, should be sufficient to meet our cash requirements, including for normal operating needs, debt service obligations, and planned capital expenditures and commitments, for at least the next twelve months from the issuance date of our condensed consolidated financial statements. However, we can make no assurance regarding our ability to achieve our forecasts, which are materially dependent on our improved financial performance and the ever-changing market.

Previous wording

On November 6, 2023, we entered into an equity distribution agreement (the “Equity Distribution Agreement”) with Piper Sandler & Co. (the “Agent”), pursuant to which we may, from time to time, sell shares of our common stock having an aggregate offering price of up to $30.0 million through the Agent acting as our sales agent. The Agent will receive a commission equal to 3.0% of the gross sale price of any shares sold under the Equity Distribution Agreement.

Current wording

On November 6, 2023, we entered into an equity distribution agreement (the “Equity Distribution Agreement”) with Piper Sandler & Co. (the “ATM Agent”), pursuant to which we may, from time to time, sell shares of our common stock having an aggregate offering price of up to $30.0 million through the ATM Agent acting as our sales agent (our“ATM program”). The ATM Agent receives a commission equal to 3.0% of the gross sale price of any shares sold under the Equity Distribution Agreement.

Previous wording

Under the Equity Distribution Agreement, we will set the parameters for the sale of the shares thereunder, including the number of shares to be sold, the time period during which sales are requested to be made and any price below which sales may not be made. During the three and six months ended June 30, 2025, no shares were sold under the Equity Distribution Agreement. During the three months ended June 30, 2024, 4,199,074 shares were sold under the Equity Distribution Agreement, which generated net proceeds to us of $6.8 million after deducting commissions of $0.2 million. No shares were sold under the Equity Distribution Agreement during the first three months of 2024.

Current wording

Under the Equity Distribution Agreement, we set the parameters for the sale of the shares thereunder, including the number of shares to be sold, the time period during which sales are requested to be made and any price below which sales may not be made. During the three and nine months ended September 30, 2025, no shares were sold under the Equity Distribution Agreement. During the three months ended September 30, 2024, 1,181,090 shares were sold under the Equity Distribution Agreement, which generated net proceeds to us of $1.4 million after deducting commissions of $0.1 million. During the nine months ended September 30, 2024, 5,380,164 shares were sold under the Equity Distribution Agreement, which generated net proceeds to us of $8.2 million after deducting commissions of $0.3 million.

Previous wording

On each May 15 and November 14, commencing November 14, 2023 (each, an “Excess Cash Flow Offer Date”), we are required to make an offer (an “Excess Cash Flow Offer”) to all holders of the 2028 Notes and, if required by the terms of any Pari Passu Notes Lien Indebtedness (as defined in the 2028 Notes Indenture), to any holders of any Pari Passu Notes Lien Indebtedness to purchase, prepay or redeem, together on a pro-rata basis, the maximum principal amount of the 2028 Notes and any such Pari Passu Notes Lien Indebtedness (plus all accrued interest (including additional interest, if any) on the 2028 Notes and any such Pari Passu Notes Lien Indebtedness and the amount of all fees and expenses, including premiums, incurred in connection therewith) that may be purchased, prepaid or redeemed using an amount of cash equal to the Excess Cash Flow Amount (as defined in the 2028 Notes Indenture and which is 75.0% of Excess Cash Flow (as defined in the 2028 Notes Indenture), as determined immediately prior to the Excess Cash Flow Offer Date), if any, subject to certain exceptions set forth in the 2028 Notes Indenture. The offer price in any such offer will be equal to 100% of the principal amount of the 2028 Notes and any such Pari Passu Notes Lien Indebtedness (or, in respect of any such Pari Passu Notes Lien Indebtedness, such lesser price, if any, as may be provided for by the terms of such Pari Passu Notes Lien Indebtedness), plus accrued and unpaid interest and additional interest, if any, to, but excluding, the date of purchase, prepayment or redemption, subject to the rights of holders of the 2028 Notes or any such Pari Passu Notes Lien Indebtedness on the relevant record date to receive interest due on an interest payment date that is on or prior to the date of purchase, prepayment or redemption, and will be payable in cash. For the Excess Cash Flow Offer Date of May 15, 2025, the Excess Cash Flow Amount was $0, and as such, no Excess Cash Flow Offer was made.

Current wording

On each May 15 and November 14, commencing November 14, 2023 (each, an “Excess Cash Flow Offer Date”), we are required to make an offer (an “Excess Cash Flow Offer”) to all holders of the 2028 Notes and, if required by the terms of any Pari Passu Notes Lien Indebtedness (as defined in the 2028 Notes Indenture), to any holders of any Pari Passu Notes Lien Indebtedness to purchase, prepay or redeem, together on a pro-rata basis, the maximum principal amount of the 2028 Notes and any such Pari Passu Notes Lien Indebtedness (plus all accrued interest (including additional interest, if any) on the 2028 Notes and any such Pari Passu Notes Lien Indebtedness and the amount of all fees and expenses, including premiums, incurred in connection therewith) that may be purchased, prepaid or redeemed using an amount of cash equal to the Excess Cash Flow Amount (as defined in the 2028 Notes Indenture and which is 75.0% of Excess Cash Flow (as defined in the 2028 Notes Indenture), as determined immediately prior to the Excess Cash Flow Offer Date), if any, subject to certain exceptions set forth in the 2028 Notes Indenture. The offer price in any such offer will be equal to 100% of the principal amount of the 2028 Notes and any such Pari Passu Notes Lien Indebtedness (or, in respect of any such Pari Passu Notes Lien Indebtedness, such lesser price, if any, as may be provided for by the terms of such Pari Passu Notes Lien Indebtedness), plus accrued and unpaid interest and additional interest, if any, to, but excluding, the date of purchase, prepayment or redemption, subject to the rights of holders of the 2028 Notes or any such Pari Passu Notes Lien Indebtedness on the relevant record date to receive interest due on an interest payment date that is on or prior to the date of purchase, prepayment or redemption, and will be payable in cash. For the Excess Cash Flow Offer Date of November 14, 2025, the Excess Cash Flow Amount will be $0, and as such, no Excess Cash Flow Offer will be made.

Previous wording

The 2018 ABL Credit Agreement, as amended by the 2018 ABL Facility Amendments (the “Amended 2018 ABL Credit Agreement”), contained various affirmative and negative covenants, including financial reporting requirements and limitations on indebtedness, liens, mergers, consolidations, liquidations and dissolutions, sales of assets, dividends and other restricted payments, investments (including acquisitions) and transactions with affiliates.

Current wording

The 2018 ABL Credit Agreement, as amended by the 2018 ABL Facility Amendments, contained various affirmative and negative covenants, including financial reporting requirements and limitations on indebtedness, liens, mergers, consolidations, liquidations and dissolutions, sales of assets, dividends and other restricted payments, investments (including acquisitions) and transactions with affiliates.

Previous wording

On May 1, 2025, we entered into a Loan and Security Agreement (the “2025 ABL Credit Agreement”) with White Oak Commercial Finance, LLC, as agent, and the lenders from time to time party thereto. The 2025 ABL Credit Agreement provides for an asset-based revolving credit facility (the “2025 ABL Credit Facility”) with lender commitments of $125.0 million (the “Maximum Revolving Facility Amount”) and a sub-limit of $5.0 million for letters of credit, which will mature on the earlier of (i) May 1, 2028 and (ii) the date that is 91 days prior to the maturity date of the 2028 Notes. The outstanding balance of the borrowings under the 2025 ABL Credit Facility may not exceed in the aggregate at any time the lesser of (a) the Maximum Revolving Facility Amount reduced by certain customary reserves and (b) the borrowing base, which is calculated on the basis of eligible accounts and inventory. The Maximum Revolving Facility Amount could increase from time to time pursuant to an uncommitted accordion by an aggregate amount for all such increases not to exceed $50.0 million. Borrowings under the 2025 ABL Credit Facility bear interest at a per annum rate equal to the term-specific Secured Overnight Financing Rate (SOFR) for an interest period of one month, subject to a 1.50% floor, plus an applicable margin of 4.00% to 4.50%, depending on our fixed charge coverage ratio. We were in compliance with all covenants contained in the 2025 ABL Credit Agreement as of June 30, 2025.

Current wording

On May 1, 2025, we entered into a Loan and Security Agreement (the “2025 ABL Credit Agreement”) with White Oak Commercial Finance, LLC, as the Agent, and the lenders from time to time party thereto. The 2025 ABL Credit Agreement provides for an asset-based revolving credit facility (the “2025 ABL Credit Facility”) with lender commitments of $125.0 million (the “Maximum Revolving Facility Amount”) and a sub-limit of $5.0 million for letters of credit, which will mature on the earlier of (i) May 1, 2028 and (ii) the date that is 91 days prior to the maturity date of the 2028 Notes. The outstanding balance of the borrowings under the 2025 ABL Credit Facility may not exceed in the aggregate at any time the lesser of (a) the Maximum Revolving Facility Amount reduced by certain customary reserves and (b) the borrowing base, which is calculated on the basis of eligible accounts and inventory. The Maximum Revolving Facility Amount could increase from time to time pursuant to an uncommitted accordion by an aggregate amount for all such increases not to exceed $50.0 million. Borrowings under the 2025 ABL Credit Facility bear interest at a per annum rate equal to the term-specific Secured Overnight Financing Rate (SOFR) for an interest period of one month, subject to a 1.50% floor, plus an applicable margin of 4.00% to 4.50%, depending on our fixed charge coverage ratio.

Previous wording

On May 1, 2025, we borrowed approximately $48.9 million under the 2025 ABL Credit Facility and used such proceeds to repay all borrowings outstanding under the terminated and replaced 2018 ABL Credit Facility and pay fees and expenses associated with the entry into the 2025 ABL Credit Agreement.

Current wording

On May 1, 2025, we borrowed approximately $48.9 million under the 2025 ABL Credit Facility and used such proceeds to repay all borrowings outstanding under the 2018 ABL Credit Facility and pay fees and expenses associated with the entry into the 2025 ABL Credit Agreement. The 2025 ABL Credit Facility refinanced and replaced the 2018 ABL Credit Facility.

Previous wording

The 2025 ABL Credit Agreement contains customary representations and warranties, events of default, and various affirmative and negative covenants, including financial reporting requirements and limitations on indebtedness, liens, mergers, consolidations, liquidations and dissolutions, sales of assets, dividends and other restricted payments and investments (including acquisitions). In addition, the 2025 ABL Credit Agreement contains a financial covenant requiring a minimum fixed charge ratio of 1.10 to 1.00 that is tested quarterly when the availability under the 2025 ABL Credit Facility is less than $10.0 million. This financial covenant applies until the availability exceeds such threshold for 30 consecutive days.

Current wording

The 2025 ABL Credit Agreement contains customary representations and warranties, events of default, and various affirmative and negative covenants, including financial reporting requirements and limitations on indebtedness, liens, mergers, consolidations, liquidations and dissolutions, sales of assets, dividends and other restricted payments and investments (including acquisitions). In addition, the 2025 ABL Credit Agreement contains a financial covenant requiring a minimum fixed charge ratio of 1.10 to 1.00 that is tested quarterly when the availability under the 2025 ABL Credit Facility is less than $10.0 million. This financial covenant applies until the availability exceeds such threshold for 30 consecutive days. We were in compliance with all covenants contained in the 2025 ABL Credit Agreement as of September 30, 2025.

Previous wording

At June 30, 2025, we had $49.4 million of borrowings under the 2025 ABL Credit Facility, and our availability under the 2025 ABL Credit Facility was approximately $51.3 million. In July 2025, we borrowed an additional $13.4 million under the 2025 ABL Credit Facility.

Current wording

At September 30, 2025, we had $63.3 million of borrowings under the 2025 ABL Credit Facility, and our availability under the 2025 ABL Credit Facility was approximately $25.9 million.

Previous wording

Cash flows provided by (used in) operations by type of activity were as follows for the six months ended June 30, 2025 and 2024:

Current wording

Cash flows provided by (used in) operations by type of activity were as follows for the nine months ended September 30, 2025 and 2024:

Previous wording

Net cash used in investing activities was $9.7 million during the first six months of 2025 compared to $8.1 million in the first six months of 2024. The increase in cash flow used in investing activities was primarily attributed to a $1.7 million increase in cash purchases of property and equipment in comparison to the first six months of 2024.

Current wording

Net cash used in investing activities was $13.2 million during the first nine months of 2025 compared to $11.2 million in the first nine months of 2024. The $2.0 million increase was primarily attributed to a $1.8 million increase in cash purchases of property and equipment in comparison to the first nine months of 2024 coupled with a $0.2 million decrease in cash proceeds from the sales of property and equipment between periods.

Previous wording

Net cash used in financing activities was $5.5 million during the first six months of 2025 compared to $0.7 million in the first six months of 2024. The $4.8 million increase in cash flow used in financing activities was primarily attributed to a $46.0 million increase in payments on revolving credit facilities during the first six months of 2025 in comparison to the first six months of 2024, coupled with $6.8 million in proceeds received from the issuance of common stock under our ATM program in the first six months of 2024, that did not reoccur in the first six months of 2025, as well as $4.5 million in debt issuance costs associated with the 2025 ABL Credit Facility in the first six months of 2025, that did not occur in the first six months of 2024 and a $0.5 million increase in payments of short-term debt between periods. The increase was partially offset by $52.9 million in proceeds received from revolving credit facilities in the first six months of 2025 that did not occur in the first six months of 2024.

Current wording

Net cash provided by financing activities was $6.6 million during the first nine months of 2025 compared to $2.1 million used in the first nine months of 2024. The $8.7 million change was primarily attributed to a $62.9 million increase in proceeds received from revolving credit facilities in comparison to the first nine months of 2024, partially offset by a $41.0 million increase in payments on revolving credit facilities during the first nine months of 2025 in comparison to the first nine months of 2024, coupled with $8.2 million in proceeds received from the issuance of common stock under our ATM program in the first nine months of 2024, that did not reoccur in the first nine months of 2025, as well as $4.6 million in debt issuance costs associated with the 2025 ABL Credit Facility in the first nine months of 2025, that did not occur in the first nine months of 2024, and a $0.7 million increase in payments of short-term debt between periods.