Nine Energy Service, Inc.
For the period ended Dec 31, 2025. Filed Mar 4, 2026.
View on SEC.govAbout this filing
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 4, 2026
NINE$7.44+9.6%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 2025-03-06.
0001532286-25-000008
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-03-04.
0001532286-26-000005
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 121 previous paragraphs and 131 current paragraphs.
70 unchanged; 18 reworded; 42 added; 31 removed; 2 previous and 1 current paragraphs rearranged.
Tables are not compared: 5 previous and 5 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 (42)
Current report
On February 1, 2026, the Company Parties filed the Chapter 11 Cases in the Bankruptcy Court to implement the prepackaged Plan to effectuate a financial restructuring of the Company Parties’ existing indebtedness. Prior to filing the Chapter 11 Cases, on February 1, 2026, the Company Parties entered into the Restructuring Support Agreement with the Consenting Stakeholders, which includes certain holders of the 2028 Notes and the Prepetition ABL Lenders. Pursuant to the Restructuring Support Agreement, the Consenting Stakeholders agreed, subject to certain terms and conditions, to support the Plan. The material terms of the Plan include, among other things:
Current report
•the Prepetition ABL Lenders providing the Company Parties with the DIP ABL Facility, including a roll-up or refinancing of all obligations under the Prepetition ABL Loan and Security Agreement, which will, upon the satisfaction of customary closing conditions, convert into the Exit ABL Facility on the Plan Effective Date or as soon as reasonably practicable thereafter;
Current report
•on the Plan Effective Date, the Reorganized Company issuing 100% of a single class of common equity interests to the holders of the 2028 Notes and the 2028 Notes being canceled; and
Current report
•on the Plan Effective Date, our currently existing common stock being canceled.
Current report
On February 3, 2026, the Bankruptcy Court, on an interim basis, approved the DIP ABL Facility, and the Company Parties entered into the DIP Loan and Security Agreement with the DIP Agent and the DIP Lenders. The DIP ABL Facility is a senior secured super-priority asset-based debtor-in-possession credit facility consisting of up to $125.0 million in aggregate principal amount of revolving credit commitments, including a roll-up or refinancing of all obligations under the Prepetition ABL Loan and Security Agreement. The DIP Loan and Security Agreement includes certain terms and conditions (including the Plan becoming effective) providing for the conversion of the DIP ABL Facility into an exit senior secured asset-based revolving credit facility consisting of up to $135.0 million in aggregate principal amount of revolving commitments on the Plan Effective Date or as soon as reasonably practicable thereafter.
Current report
Since the Petition Date, the Company Parties have been operating their businesses as debtors-in-possession under the jurisdiction of the Bankruptcy Court in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court. The Company Parties have requested and obtained relief from the Bankruptcy Court that enables them to continue their ordinary course operations during the Chapter 11 Cases and uphold their commitments to their stakeholders, including employees, customers, and vendors, during the restructuring process, subject to the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code.
Current report
Subject to certain exceptions under the Bankruptcy Code, pursuant to Section 362 of the Bankruptcy Code, the filing of the Chapter 11 Cases automatically stayed the continuation of most legal proceedings and the filing of other actions against or on behalf of the Company Parties or their property to recover on, collect or secure a claim arising prior to the Petition Date or to exercise control over property of the Company Parties’ bankruptcy estate unless and until the Bankruptcy Court modifies or lifts the automatic stay as to any such claim. In particular, although the filing of the Chapter 11 Cases constituted an event of default that accelerated our obligations under the indenture governing the 2028 Notes (the “Indenture”) and the Prepetition ABL Loan and Security Agreement (together with the Indenture, the “Debt Instruments”) and caused the principal and interest due thereunder to be immediately due and payable, any efforts to enforce such payment obligations are automatically stayed as a result of the Chapter 11 Cases, and the creditors’ rights of enforcement in respect of the Debt Instruments are subject to the applicable provisions of the Bankruptcy Code. Notwithstanding the general application of the automatic stay described above and other protections afforded by the Bankruptcy Code, governmental authorities may determine to continue actions brought under their police and regulatory powers.
Current report
On March 4, 2026, the Bankruptcy Court entered the Confirmation Order. The Company Parties anticipate emerging from the Chapter 11 Cases, and the Plan Effective Date occurring, on March 5, 2026; however, consummation of the Restructuring pursuant to the Plan is subject to the satisfaction or waiver of certain conditions set forth in the Plan. Accordingly, no assurance can be given that such transactions will be consummated. See “Risk Factors – Risks Related to the Chapter 11 Cases” in Item 1A of Part I of this Annual Report for a discussion of the risks related to the Chapter 11 Cases.
Current report
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 MMBtu for the year. In 2025, natural gas prices improved as compared to 2024, averaging approximately $3.52 per MMBtu. However, despite a more supportive natural gas price environment in 2025, we have yet to see any meaningful activity increases in the natural gas-levered basins like the Haynesville and Northeast. For example, at the end of 2024, the rig count in the Haynesville was 31 rigs and at the end of 2025, the rig count was 42 rigs. In the Marcellus and Utica at the end of 2024, there were a total of 34 rigs, and at the end of 2025, a total of 39 rigs. Nonetheless, the long-term outlook on natural gas demand remains positive due mostly to potential increased demand coming from power generation related to artificial intelligence.
Current report
As for oil prices, towards the end of 2024, we began to see 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 2025, 46 rigs, most of which were in the Permian Basin, came out of the U.S. market, a decline of approximately 8% 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 $59.62 per barrel in the fourth quarter of 2025, a decline of approximately 17%.
Current report
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. During the third quarter and continuing into the fourth quarter of 2025, we had full quarter realizations of these activity declines, as well as continued pricing pressure on our services, which negatively impacted both revenue and earnings. In addition to negative market impacts, our completion tools division had market share losses, which were due mostly to customer consolidation and a change in certain of our customers’ completion designs, during the quarter that negatively impacted revenue and earnings. Lastly, as anticipated, during the fourth quarter we had typical seasonal slowdowns related to weather, holidays and budget exhaustion, which negatively impacted revenue and earnings.
Current report
The macro-outlook is uncertain, especially with recent geopolitical events, but with what we know today, we anticipate that U.S. activity levels will be relatively flat compared to 2025 exit levels. For the first quarter, we have seen operational inefficiencies and downtime due to weather and frac delays. Additionally, during the first quarter, we will incur costs related to our restructuring. Because of this, we anticipate first quarter 2026 revenue and earnings will be down compared to the fourth quarter of 2025.
Current report
Revenues increased $7.8 million, or 1%, to $561.9 million in 2025. The increase in comparison to 2024 was primarily due to an increase in cementing revenue (including pump downs) of $11.3 million, or 6%, as total cement job count increased
Current report
8%. In addition, wireline revenue increased $4.5 million, or 4%, as total completed wireline stages increased 23%, which was partially offset by pricing pressure, in comparison to 2024. The overall increase in revenue was partially offset by a decrease in coiled tubing revenue of $6.3 million, or 6%, as total days worked decreased 6%, in comparison to 2024. The overall increase was also partially offset by a decrease in tools revenue of $1.7 million, or 1% due to a change in product mix in comparison to 2024.
Current report
Cost of revenues increased $10.6 million, or 2%, to $467.4 million in 2025. The increase was primarily related to a $5.3 million increase in materials installed and consumed while performing services, a $2.6 million increase in vehicle costs, a $1.6 million increase in insurance costs, and a $0.8 million increase in repairs and maintenance costs, each in comparison to 2024.
Current report
General and administrative expenses increased $8.4 million to $59.7 million in 2025. The increase in comparison to 2024 was primarily related to $4.5 million in retention payments and $2.7 million in professional fees recorded in 2025 in connection with the Chapter 11 Cases, which were not incurred in 2024. The overall increase was also partially attributed to a $1.4 million increase in other employee costs in comparison to 2024.
Current report
We recorded approximately $11.2 million in amortization of intangibles expense (comprised of technology and customer relationships) in both 2025 and 2024.
Current report
We recorded a gain on sale of property and equipment of $2.1 million in 2025 compared to a $0.3 million loss on sale of equipment in 2024. The $2.4 million change was primarily attributed to gains on the disposal of certain coiled tubing equipment in 2025 that did not occur in 2024.
Current report
Non-operating expenses increased $4.0 million to $53.8 million in 2025. The increase was primarily attributed to a $1.9 million increase in the amortization of deferred financing costs associated with certain debt instruments in comparison to 2024. The increase was also partly attributed to the write-off of $1.5 million of deferred financing costs associated with the 2018 ABL Credit Facility (as described and defined in Note 9 – Debt Obligations) in 2025 that did not occur in 2024, as well as an increase of $0.5 million in interest expense associated with revolving credit facilities in comparison to 2024.
Current report
We recorded an income tax benefit of $0.2 million for 2025 compared to an income tax provision of $0.2 million in 2024. The $0.4 million change was primarily attributed to a $0.5 million discrete income tax benefit in 2025 that did not occur in 2024.
Current report
(2) For the year ended December 31, 2025, amounts primarily relate to the Chapter 11 Cases, including $4.5 million in employee retention payments approved by the Board and $2.7 million in professional fees and expenses. For the year ended December 31, 2024, amounts primarily relate to professional fees and expenses in connection with procurement and supply chain restructuring and other initiatives.
Current report
(1) For the year ended December 31, 2025, amounts primarily relate to the Chapter 11 Cases, including $4.5 million in employee retention payments approved by the Board and $2.7 million in professional fees and expenses. For the year ended December 31, 2024, amounts primarily relate to professional fees and expenses in connection with procurement and supply chain restructuring and other initiatives.
Current report
The filing of the Chapter 11 Cases constituted events of default that accelerated our obligations related to the 2028 Notes and the Prepetition ABL Facility (as defined and described in Note 9 – Debt Obligations). As a result, the principal and interest due under our outstanding 2028 Notes and Prepetition ABL Facility became immediately due and payable. However, any efforts to enforce such payment obligations are automatically stayed as a result of the filing of the Chapter 11 Cases, and the creditors’ rights of enforcement are subject to the applicable provisions of the Bankruptcy Code. We do not have sufficient cash on hand or available liquidity to repay such outstanding debt. As of December 31, 2025, we had $18.4 million of cash and cash equivalents and $21.0 million of availability under the Prepetition ABL Facility, which resulted in a total liquidity position of $39.4 million.
Current report
Ability to Continue as a Going Concern
Current report
As a result of the current bankruptcy proceedings and our financial condition, substantial doubt exists that we will be able to continue as a going concern for one year from the date of this Annual Report. The consolidated financial statements in Part II, Item 8 of this Annual Report were prepared on a going concern basis of accounting, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. However, as a result of the Chapter 11 Cases, the realization of assets and the satisfaction of liabilities are subject to uncertainty. Our liquidity requirements and the availability to us of adequate capital resources are difficult to predict at this time. In addition, we have incurred, and continue to incur, material reorganization and administrative expenses in connection with the Chapter 11 Cases and the Plan. Notwithstanding the protections available to us under the Bankruptcy Code, if our future sources of liquidity are insufficient, we will face substantial liquidity constraints and will likely be required to significantly reduce, delay, or eliminate capital expenditures, implement further cost reductions, seek other financing alternatives or cease operations as a going concern and liquidate. We can give no assurance that we will be able to secure additional sources of funds to support our operations, or, if such funds are available to us, that such additional financing will be sufficient to meet our needs. Based on such evaluation and management’s current plans, which are subject to change, management believes there is substantial doubt about our ability to continue as a going concern.
Current report
Our ability to continue as a going concern is contingent upon our ability to successfully implement the Plan and successfully emerge from Chapter 11, and generate sufficient liquidity to meet our obligations and operating needs, among other factors. The consolidated financial statements in Part II, Item 8 of this Annual Report do not include any adjustments that might be necessary should we be unable to continue as a going concern or as a consequence of the Chapter 11 Cases. Further, any plan of reorganization could materially change the amount of assets and liabilities reported in the accompanying consolidated financial statements. There are substantial risks and uncertainties related to (i) our ability to successfully emerge from the Chapter 11 Cases, and (ii) the effects of disruption from the Chapter 11 Cases making it more difficult to maintain business, financing, and operational relationships. For more information about the risks and uncertainties related to the Chapter 11 Cases, see “Risk Factors – Risks Related to the Chapter 11 Cases” in Item 1A of Part I of this Annual Report.
Current report
Capital Resources Prior to and During the Chapter 11 Cases
Current report
On February 3, 2026, the Bankruptcy Court, on an interim basis, approved the DIP ABL Facility, and the Company Parties entered into the DIP Loan and Security Agreement with the DIP Agent and the DIP Lenders, which provides the Company Parties with a senior secured super-priority asset-based debtor-in-possession credit facility consisting of up to $125.0 million in aggregate principal amount (the “DIP Maximum Revolving Facility Amount”) of revolving credit commitments, including a roll-up or refinancing of all obligations under the Prepetition ABL Loan and Security Agreement
Current report
(which totaled approximately $67.3 million as of February 3, 2026). A portion of the DIP ABL Facility not in excess of $5.0 million is available for the issuance of standby letters of credit. Our obligations under the DIP ABL Facility are secured by a first-priority security interest in substantially all our tangible and intangible assets and all of our current domestic and Canadian subsidiaries, subject to, among other things, customary bankruptcy-related exceptions including certain carve-outs for administrative and professional fee payments arising in connection with the Chapter 11 Cases.
Current report
Borrowings under the DIP ABL Facility are subject to a borrowing base. The outstanding balance of the borrowings under the DIP ABL Facility may not exceed in the aggregate at any time the lesser of (i) the DIP Maximum Revolving Facility Amount reduced by certain customary reserves and (ii) the borrowing base, which is calculated on the basis of eligible accounts and inventory. In particular, the borrowing base is equal to (a) 92.5% of the aggregate amount of eligible U.S. and Canadian billed accounts receivable, plus (b) the lesser of (x) 85% of the aggregate amount of eligible U.S. and Canadian unbilled accounts receivable and (y) $6.0 million, plus (c) the lesser of (x) 50% of the aggregate amount of eligible billed non-U.S. and non-Canadian accounts receivable and (y) $3.0 million, plus (d) the lower of cost or market value of eligible inventory, multiplied by the lessor of (x) 70% and (y) 85% of the appraised net orderly liquidation value divided by the book value in respect of such inventory, and, in the case of inventory consisting raw materials, not to exceed a maximum sublimit of $1.0 million, plus (e) the lesser of (x) $10.0 million and (y) an amount equal to 10% of the borrowing base, minus (f) the aggregate amount of reserves, if any, established by the DIP Agent.
Current report
Borrowings under the DIP ABL 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%.
Current report
The maturity date of the DIP ABL Facility is the earlier of the Plan Effective Date and 120 days after the Petition Date, subject to earlier termination upon the occurrence of certain events specified in the DIP Loan and Security Agreement. The proceeds of the DIP ABL Facility are for (i) working capital and corporate purposes of the Company Parties, (ii) bankruptcy-related costs and expenses in respect of the Chapter 11 Cases, (iii) costs and expenses related to the DIP ABL Facility, and (iv) refinancing of obligations under the Prepetition ABL Loan and Security Agreement.
Current report
The DIP Loan and Security Agreement contains certain representations and warranties, events of default, and various affirmative and negative covenants that are customary for debtor-in-possession loan agreements of this type, including limitations on indebtedness, liens, mergers, consolidations, liquidations and dissolutions, sales of assets, dividends and other restricted payments and investments (including acquisitions). In addition, the DIP Loan and Security Agreement contains certain financial covenants, including a minimum excess availability of not less than $5.0 million.
Current report
Expected Capital Resources and Uses After the Chapter 11 Cases
Current report
Under the terms contemplated by the Restructuring Support Agreement and the Plan, upon successful emergence from the Chapter 11 Cases, the 2028 Notes will be canceled (and the holders of the 2028 Notes will receive shares of the Reorganized Company’s common stock). On December 31, 2025, we had $300.0 million aggregate principal amount of 2028 Notes outstanding and made $39.0 million of interest payments to the holders of the 2028 Notes during the year then ended.
Current report
On the Plan Effective Date or as soon as reasonably practicable thereafter, we expect that the DIP ABL Facility will be converted into the Exit ABL Facility, a first priority senior secured asset-based revolving credit facility consisting of up to $135.0 million in aggregate principal amount (the “Exit Maximum Revolving Facility Amount”) of revolving commitments. A portion of the Exit ABL Facility not in excess of $5.0 million is expected to be available for the issuance of standby letters of credit. Our obligations under the Exit ABL Facility are expected to be secured by a first-priority security interest in substantially all of our tangible and intangible assets and all of our current domestic and Canadian subsidiaries, including all machinery and equipment.
Current report
Borrowings under the Exit ABL Facility will be subject to a borrowing base. The outstanding balance of the borrowings under the Exit ABL Facility may not exceed in the aggregate at any time the lesser of (i) the Exit Maximum Revolving Facility Amount reduced by certain customary reserves and (ii) the borrowing base, which is calculated on the basis of eligible accounts, inventory, machinery and equipment, and, at the Company Parties’ election, certain real property assets of the Company Parties. In particular, the borrowing base is equal to (a) 92.5% of the aggregate amount of eligible U.S. and Canadian billed accounts receivable, plus (b) the lesser of (x) 85% of the aggregate amount of eligible U.S. and Canadian unbilled accounts receivable and (y) $6 million, plus (c) the lesser of (“Foreign Accounts Availability”) (x) 50% of the aggregate amount of eligible billed non-U.S. and non-Canadian accounts receivable and (y) $3 million, plus (d) the lower of cost or market value of eligible inventory, multiplied by the lesser of (x) 70% and (y) 85% of the appraised net orderly liquidation value divided by the book value in respect of such inventory, and, in the case of inventory constituting raw materials, not to exceed a maximum sublimit of $1 million, plus (e) the lesser of (“SOFA Availability”) (x) $10 million and (y) an amount equal to 10% of the borrowing base, plus (f) the lesser of (x) the sum of (1) up to 75% of the net orderly liquidation value of eligible machinery and equipment (“M&E Availability”) plus (2) up to 75% of the fair market value of eligible real property owned by certain of the Company Parties (“Real Property Availability”) and (y) $30 million (which amount shall be permanently reduced on a yearly basis based on a 5-year straight line amortization), minus (g) the aggregate amount of reserves, if any, established by the agent under the loan and security agreement governing the Exit ABL Facility (the “Exit Loan and Security Agreement”). The Exit ABL Facility will also include a feature allowing the Company Parties, at their election, to provide mortgages in favor of the agent and lenders under the Exit ABL Facility over certain of their eligible real property assets from time to time, thereby obtaining additional borrowing base credit under the Exit ABL Facility.
Current report
Borrowings under the Exit ABL Facility are expected to bear interest at a per annum rate equal to the term-specific SOFR for an interest period of one month, subject to a 1.50% floor, plus an applicable margin ranging from 3.50% to 4.00%, depending on our fixed charge coverage ratio, subject to an additional margin of 0.50% with respect to any revolving loans or letters of credit utilizing any of M&E Availability, Real Property Availability, SOFA Availability, and/or Foreign Accounts Availability.
Current report
The maturity date of the Exit ABL Facility is expected to be three years after the Plan Effective Date, subject to earlier termination upon the occurrence of certain events specified in the Exit Loan and Security Agreement. The proceeds of the Exit ABL Facility will be used for (i) working capital and general corporate purposes of the Company Parties, (ii) costs and expenses related to the Exit ABL Facility, and (iii) refinancing of all obligations under the DIP ABL Facility.
Current report
The Exit Loan and Security Agreement is expected to contain certain representations and warranties, events of default, and various affirmative and negative covenants that are customary for asset-based credit facilities of this type, 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 Exit Loan and Security Agreement is expected to contain certain financial covenants, including a minimum excess availability of not less than $5.0 million and a minimum fixed charge coverage ratio of 1.10 to 1.00 that will be tested when the excess availability under the Exit ABL Facility is less than the lesser of (a) 7.5% of the lesser of (x) the Exit Maximum Revolving Facility Amount minus reserves and (y) the borrowing base and (b) $9.0 million, which minimum fixed charge coverage ratio would apply until the excess availability is greater than or equal to such threshold for a period of 30 consecutive days.
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Removed paragraphs (31)
Previous report
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, oil and natural gas prices have been extremely volatile, and commodity prices continued to be volatile in 2024. During 2024, natural gas prices continued to be extremely depressed, with average natural gas prices of $2.19 for 2024, which is 14% lower than average prices in 2023, which had already declined by over 60% as compared to 2022. This sustained lower natural gas price environment resulted in decreased activity and lower rig counts, especially in natural gas-levered basins like the Haynesville. The Haynesville rig count declined by 30% between 2024 and 2023, from 44 rigs at the end of the year in 2023 to 31 rigs at the end of 2024. This decline was in addition to the previously sustained decline of 28 rigs, or 39%, between 2023 and 2022, from 72 rigs at the end of the year in 2022 to 44 rigs at the end of 2023. The decline in rig count between the end of the year 2024 and the end of the year 2022 was approximately 57%. It also led to pricing pressure from customers, impacting both revenue and margins. During the third quarter of 2024, WTI prices dropped below $70 compared to the highest price in 2024 of $87.69, due to OPEC and other oil exporting nations potentially bringing production back. The ongoing conflict in the Middle East and demand from China, if weaker than expected, could have an impact on oil prices moving forward as well. Nonetheless, as discussed below, activity levels have remained relatively stable in oil-levered basins.
Previous report
Due to the spot-market nature of our business, our revenue and profitability generally moves very similarly to rig, frac, and stage counts in U.S. rig count. Since the end of 2023, the U.S. rig count declined by around 33 rigs, or approximately 5%, through the end of 2024. This is following a rig count decline of over 150 rigs from the end of 2022 to the end of 2023, creating an already depressed oil and gas market. In 2024, most public operators with acreage in oil-levered basins, like the Permian, kept activity and capital expenditure levels relatively flat year-over-year. However, both private and public operators with acreage in gas-levered basins, like the Haynesville and in the Northeast, maintained low activity levels in conjunction with low natural gas prices.
Previous report
During the second half of 2024, despite a declining rig count environment, we outperformed market drivers and improved our revenue in both the third and fourth quarter sequentially. This improvement was driven in large part by market share gains achieved by our cementing division, which we believe differentiated itself in the market with its advanced cementing slurries and excellent wellsite execution. We also had market share gains in our completion tools division that positively impacted earnings in the fourth quarter of 2024. We did have minimal negative impacts in the fourth quarter of 2024 due to typical budget exhaustion, weather, and holiday slow-downs, specifically in the Northeast. With our recent market share gains, our customers re-setting capital budgets, and supportive commodity prices, we anticipate revenue and profitability for the first quarter of 2025 will be up compared to the fourth quarter of 2024.
Previous report
We remain cautiously optimistic on the outlook for the energy sector, and we believe there is potential upside for North American activity levels, especially if natural gas prices remain supportive. We also believe that there could be a moderate increase in activity in 2025 over fourth quarter of 2024 levels if commodity prices are supportive and customer budgets are reset and believe that we are well-positioned to capitalize on an improving market, should it materialize.
Previous report
Revenues decreased $55.4 million, or 9%, to $554.1 million in 2024. The decrease in comparison to 2023 was prevalent across all lines of service and was primarily due to pricing decreases coupled with changes in market conditions as the average U.S. rig count for 2024 decreased 5%, in comparison to 2023. More specifically, cement revenue (including pump downs) decreased $24.7 million, or 11%, coiled tubing revenue decreased $12.2 million, or 10%, and wireline revenue also decreased $5.6 million, or 5%, all due to pricing pressure throughout the year, in comparison to 2023. In addition, tools revenue decreased $12.9 million, or 9%, due to a decrease of 11% in stages, in comparison to 2023.
Previous report
Cost of revenues decreased $34.0 million, or 7%, to $456.7 million in 2024. The decrease in comparison to 2023 was primarily driven by a reduction in activity for certain lines of service as described under “Revenues.” More specifically, the decrease was due to a $15.4 million decrease in materials installed and consumed while performing services, a $12.5 million decrease in employee related costs, and a $6.1 million decrease in other costs such as repair and maintenance, vehicle expense, and travel, in comparison to 2023.
Previous report
Adjusted gross profit decreased $21.4 million to $97.4 million in 2024 as a result of the factors described above under “Revenues” and “Cost of Revenues.”
Previous report
General and administrative expenses decreased $8.5 million to $51.3 million in 2024. The decrease in comparison to 2023 was primarily related to $6.4 million in costs associated with the Units offering in 2023 that did not occur in 2024. The decrease was also partially attributed to an $0.7 million decrease in employee costs, a $0.8 million decrease in marketing expenses, and a $0.6 million decrease in professional fees, each in comparison to 2023.
Previous report
Amortization of intangibles, which was comprised of technology and customer relationships, decreased $0.3 million to $11.2 million in 2024. The decrease in comparison to 2023 was due to certain intangible assets being fully amortized over the last twelve months.
Previous report
Non-operating expenses increased $0.6 million to $49.8 million in 2024. The increase in comparison to 2023 was primarily attributed to a $0.4 million decrease in interest income earned on cash in 2024, as our average cash balance in 2024 decreased in comparison to 2024, coupled with a $0.2 million increase in interest expense on the 2028 Notes in 2024 compared to interest expense on the 2023 Notes (as defined and described below) and the 2028 Notes in 2023.
Previous report
Our effective tax rate was (0.5)% for 2024 and (1.8)% for 2023. Our tax provision for 2024 was primarily attributed to our income tax position in state and foreign tax jurisdictions.
Previous report
(2) Amounts represent fees and expenses relating to our multiple Units offering and other refinancing activities, including cash incentive compensation to employees following the successful completion of the initial Units offering, that were not capitalized.
Previous report
(3) Amounts represent fees and legal settlements associated with legal proceedings brought pursuant to the FLSA and/or similar state laws.
Previous report
(1) Amounts represent fees and expenses relating to our Units offering and other refinancing activities, including cash incentive compensation to employees following the successful completion of the Units offering, that were not capitalized.
Previous report
Adjusted Gross Profit (Loss)
Previous report
Sources and Uses of Liquidity
Previous report
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.
Previous report
As of December 31, 2024, we had $27.9 million of cash and cash equivalents and $24.2 million of availability under the ABL Credit Facility, which resulted in a total liquidity position of $52.1 million. Our liquidity position will continue to be impacted by the semi-annual interest payments ($19.5 million based on amounts outstanding as December 31, 2024) to the holders of the 2028 Notes, which began on August 1, 2023. We believe that, based on our current forecasts, our cash on hand, together with cash flow from operations and borrowings under the ABL Credit Facility, should be sufficient to fund our capital requirements for at least the next twelve months from the issuance date of our consolidated financial statements. However, we can make no assurance regarding our ability to achieve our forecasts, which are materially dependent on our financial performance and the ever-changing market.
Previous report
Units Offering and 2028 Notes
Previous report
On January 30, 2023, we completed our public offering of 300,000 units with an aggregate stated amount of $300.0 million (the “Units”). Each Unit consisted of $1,000 principal amount of the 2028 Notes and five shares of our common stock. We received proceeds of $279.8 million from the Units offering, after deducting underwriting discounts and commission, which, together with borrowings under the ABL Credit Facility, was used to fund the redemption of our 8.750% Senior Notes due 2023 (the “2023 Notes”). On February 1, 2023, we redeemed all of the 2023 Notes at a redemption price of 100.0% of outstanding principal amount thereof ($307.3 million), plus accrued and unpaid interest ($6.7 million).
Previous report
Each Unit separated into its constituent securities (the 2028 Notes and the shares of our common stock) automatically on October 27, 2023. A holder of Units could have elected to separate its Units into its constituent, in whole but not in part, on or after March 31, 2023. Prior to such date, the Units could not be separated at the option of the holder.
Previous report
On January 30, 2023, we, and certain of our subsidiaries entered into an indenture, dated as of January 30, 2023 (the “2028 Notes Indenture”), with U.S. Bank Trust Company, National Association, as the trustee and as notes collateral agent, pursuant to which the 2028 Notes were issued. The 2028 Notes will mature on February 1, 2028 and bear interest at an annual rate of 13.000% payable in cash semi-annually in arrears on each of February 1 and August 1, commencing August 1, 2023. The 2028 Notes are our senior secured obligations and are guaranteed on a senior secured basis by each of our current domestic subsidiaries and will be so guaranteed by certain future subsidiaries, subject to agreed guaranty and security principles and certain exclusions.
Previous report
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, 2024, the Excess Cash Flow Amount was $0 and, as such, no Excess Cash Flow Offer was made.
Previous report
The 2028 Notes Indenture contains covenants that, among other things and subject to certain exceptions and qualifications, limit our ability and the ability of our restricted subsidiaries to engage in certain activities. We were in compliance with the provision of the 2028 Notes Indenture on December 31, 2024.
Previous report
ABL Credit Facility
Previous report
On October 25, 2018, we entered into a credit agreement dated as of October 25, 2018 (the “2018 ABL Credit Agreement”), that permitted aggregate borrowings of up to $200.0 million, subject to a borrowing base, including a Canadian tranche with a sub-limit of up to $25.0 million and a sub-limit of $50.0 million for letters of credit (the “ABL Credit Facility”).
Previous report
On January 17, 2023, we entered into the First Amendment to Credit Agreement (the “First ABL Facility Amendment”) with JP Morgan Chase Bank, N.A., as administrative agent, and the lender parties thereto, which became effective on January 30, 2023. Pursuant to the First ABL Facility Amendment, the maturity date of the ABL Credit Facility was extended from October 25, 2023 to January 29, 2027. In addition, the First ABL Facility Amendment, among other changes, revised the terms of the ABL Credit Facility as follows: (a) decreased the size of the ABL Credit Facility from $200.0 million to $150.0 million, subject to the borrowing base, (b) changed the interest rate benchmark from London Interbank Offered Rate to Term Secured Overnight Financing Rate with a 10 basis point spread adjustment and increased pricing from the existing range of 1.75% to 2.25% to a range of 2.00% to 2.50%, in each case depending on our leverage ratio, (c) decreased the Canadian tranche sub-limit from $25.0 million to $5.0 million, and (d) decreased the letter of credit sub-limit from $50.0 million to $10.0 million. Certain other changes to the terms of the ABL Credit Facility as a result of the First ABL Facility Amendment are summarized in Note 9 – Debt Obligations included in Item 8 of Part II of this Annual Report.
Previous report
On June 7, 2024, we entered into the Second Amendment to Credit Agreement (together with the First ABL Facility Amendment, the “ABL Facility Amendments”) with JP Morgan Chase Bank, N.A., as administrative agent, and the lender parties thereto, to change the interest rate benchmark for borrowings denominated in Canadian dollars from Canadian Dollar Offered Rate (CDOR) to a rate based on the Canadian Overnight Repo Rate Average (CORRA), effective as of June 14, 2024.
Previous report
The 2018 ABL Credit Agreement, as amended by the ABL Facility Amendments (the “ABL Credit Agreement”) contains 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. We were in compliance with all covenants under the ABL Credit Agreement as of December 31, 2024.
Previous report
Pursuant to the ABL Credit Agreement, all of the obligations under the ABL Credit Facility are secured by security interests (subject to permitted liens) in substantially all of the personal property of our domestic subsidiaries, excluding certain assets. The obligations under the Canadian tranche are further secured by security interests (subject to permitted liens) in substantially all of the personal property of Nine Energy Canada, Inc., a corporation organized under the laws of Alberta, Canada, and its restricted subsidiaries, excluding certain assets.
Previous report
As of December 31, 2024, we had $47.0 million of borrowings under the ABL Credit Facility, and our availability under the ABL Credit Facility was approximately $24.2 million, net of outstanding letters of credit of $2.2 million.
Reworded paragraphs (18)
Previous wording
•Adjusted EBITDA: We define Adjusted EBITDA as EBITDA (which is net income (loss) before interest, taxes, and depreciation and amortization) further adjusted for (i) goodwill, intangible asset, and/or property and equipment impairment charges, (ii) transaction and integration costs related to acquisitions, (iii) fees and expenses relating to our Units (as defined and described below) offering and other refinancing activities, (iv) loss or gain on revaluation of contingent liabilities, (v) loss or gain on the extinguishment of debt, (vi) loss or gain on the sale of subsidiaries, (vii) restructuring charges, (viii) stock-based compensation and cash award expense, (ix) loss or gain on sale of property and equipment, and (x) other expenses or charges to exclude certain items which we believe are not reflective of ongoing performance of our business, such as legal expenses and settlement costs related to litigation outside the ordinary course of business. For additional information, see “Non-GAAP Financial Measures” below.
Current wording
•Adjusted EBITDA: We define Adjusted EBITDA as EBITDA (which is net income (loss) before interest, taxes, and depreciation and amortization) further adjusted for (i) goodwill, intangible asset, and/or property and equipment impairment charges, (ii) transaction and integration costs related to acquisitions, (iii) loss or gain on revaluation of contingent liabilities, (iv) loss or gain on the extinguishment of debt, (v) loss or gain on the sale of subsidiaries, (vi) restructuring charges, (vii) stock-based compensation and cash award expense, (viii) loss or gain on sale of property and equipment, and (ix) other expenses or charges to exclude certain items which we believe are not reflective of ongoing performance of our business, such as legal expenses and settlement costs related to litigation outside the ordinary course of business. For additional information, see “Non-GAAP Financial Measures” below.
Previous wording
•Adjusted Return on Invested Capital (“Adjusted ROIC”): We define Adjusted ROIC as adjusted after-tax net operating profit (loss), divided by average total capital. We define adjusted after-tax net operating profit (loss) as net income (loss) plus (i) goodwill, intangible asset, and/or property and equipment impairment charges, (ii) transaction and integration costs related to acquisitions, (iii) fees and expenses relating to our Units offering and other refinancing activities, (iv) interest expense (income), (v) restructuring charges, (vi) loss (gain) on the sale of subsidiaries, (vii) loss (gain) on the extinguishment of debt, and (viii) the provision (benefit) for deferred income taxes. We define total capital as book value of equity (deficit) plus the book value of debt less balance sheet cash and cash equivalents. We compute and use the average of the current and prior period-end total capital in determining Adjusted ROIC. For additional information, see “Non-GAAP Financial Measures” below.
Current wording
•Adjusted Return on Invested Capital (“Adjusted ROIC”): We define Adjusted ROIC as adjusted after-tax net operating profit (loss), divided by average total capital. We define adjusted after-tax net operating profit (loss) as net income (loss) plus (i) goodwill, intangible asset, and/or property and equipment impairment charges, (ii) transaction and integration costs related to acquisitions, (iii) interest expense (income), (iv) restructuring charges, (v) loss (gain) on the sale of subsidiaries, (vi) loss (gain) on the extinguishment of debt, and (vii) the provision (benefit) for deferred income taxes. We define total capital as book value of equity (deficit) plus the book value of debt less balance sheet cash and cash equivalents. We compute and use the average of the current and prior period-end total capital in determining Adjusted ROIC. For additional information, see “Non-GAAP Financial Measures” below.
Previous wording
Significant factors that are likely to affect commodity prices moving forward include geopolitical and economic developments in the U.S. and globally, including conflicts, instability, acts of war or terrorism in oil producing countries or regions, particularly the Middle East, Russia, South America and Africa; actions of the members of OPEC and other oil exporting nations that relate to or impact oil production or supply; weather conditions; the effect of energy, monetary, and trade policies of the U.S.; the pace of economic growth in the U.S. and throughout the world, including the potential for macro weakness; changes to energy regulations and policies, including those of the EPA and other governmental bodies; and overall North American oil and natural gas supply and demand fundamentals, including the pace at which export capacity grows. Furthermore, although as noted above, our customers’ activity and spending levels, and thus demand for our services and products, are strongly influenced by current and expected oil and natural gas prices, even with price improvements in oil and natural gas, operator activity may not materially increase, as operators remain focused on operating within their capital plans, and uncertainty remains around supply and demand fundamentals.
Current wording
Significant factors that are likely to affect commodity prices moving forward include geopolitical and economic developments in the U.S. and globally, including conflicts, the pace of economic growth in the U.S. and throughout the world, including the potential for macro weakness; tariffs imposed by the U.S. and other countries or retaliatory trade measures; instability, acts of war or terrorism in oil producing countries or regions, particularly the Middle East, Russia, South America and Africa; actions of the members of OPEC and other oil exporting nations that relate to or impact oil production or supply; weather conditions; the effect of energy, monetary, and trade policies of the U.S.; changes to energy regulations and policies, including those of the EPA and other governmental bodies; and overall North American oil and natural gas supply and demand fundamentals, including the pace at which export capacity grows. We expect that U.S. activity levels will be impacted by commodity prices and many of the same factors expected to impact commodity prices, including the production of OPEC and other oil exporting nations and governmental policies, such as tariffs. We cannot predict the scope or extent of such impacts. Furthermore, although as noted above, our customers’ activity and spending levels, and thus demand for our services and products, are strongly influenced by current and expected oil and natural gas prices, even with price improvements in oil and natural gas, operator activity may not materially increase, as operators remain focused on operating within their capital plans and uncertainty remains around supply and demand fundamentals.
Previous wording
Depreciation expense decreased $3.5 million to $25.6 million in 2024. The decrease in comparison to 2023 was primarily due to a decrease in capital expenditures across certain lines of service over the last twelve months.
Current wording
Depreciation expense decreased $2.4 million to $23.2 million in 2025. The decrease in comparison to 2024 was primarily due to an increase in fully depreciated assets and asset disposals across certain lines of service between periods.
Previous wording
We recorded a $0.1 million loss on the revaluation of contingent liability in 2024 compared to a $0.4 million loss in 2023. The losses for both periods were related to increases in the fair value of the earnout associated with our acquisition Frac Technology AS.
Current wording
We recorded a $0.2 million loss on the revaluation of contingent liability in 2025 compared to a $0.1 million loss in 2024. The losses in both 2025 and 2024 were related to increases in the fair value of the earnout associated with our acquisition Frac Technology AS (the “Frac Tech Earnout”). The remaining amount associated with the Frac Tech Earnout was paid in the first quarter of 2026.
Previous wording
Net loss increased $8.9 million, or 28%, to $41.1 million, and Adjusted EBITDA decreased $19.8 million, or 27%, to $53.2 million for 2024. The changes were primarily due to the fluctuations in revenue and expenses discussed above. See “Non-GAAP Financial Measures” below for further information regarding Adjusted EBITDA.
Current wording
Net loss increased $10.2 million, or 25%, to $51.3 million, and Adjusted EBITDA decreased $3.8 million, or 7%, to $49.4 million for 2025. The changes were primarily due to the fluctuations in revenue and expenses discussed above. See “Non-GAAP Financial Measures” below for further information regarding Adjusted EBITDA.
Previous wording
We define Adjusted EBITDA as EBITDA (which is net income (loss) before interest, taxes, depreciation, and amortization) further adjusted for (i) goodwill, intangible asset, and/or property and equipment impairment charges, (ii) transaction and integration costs related to acquisitions, (iii) fees and expenses relating to our Units offering and other refinancing activities, (iv) loss or gain on revaluation of contingent liabilities, (v) loss or gain on the extinguishment of debt, (vi) loss or gain on the sale of subsidiaries, (vii) restructuring charges, (viii) stock-based compensation and cash award expense, (ix) loss or gain on sale of property and equipment, and (x) other expenses or charges to exclude certain items which we believe are not reflective of ongoing performance of our business, such as legal expenses and settlement costs related to litigation outside the ordinary course of business.
Current wording
Adjusted EBITDA is a non-GAAP financial measure that is used by management and external users of our financial statements, such as industry analysts, investors, lenders, and rating agencies. We define Adjusted EBITDA as EBITDA (which is net income (loss) before interest, taxes, depreciation, and amortization) further adjusted for (i) goodwill, intangible asset, and/or property and equipment impairment charges, (ii) transaction and integration costs related to acquisitions, (iii) loss or gain on revaluation of contingent liabilities, (iv) loss or gain on the extinguishment of debt, (v) loss or gain on the sale of subsidiaries, (vi) restructuring charges, (vii) stock-based compensation and cash award expense, (viii) loss or gain on sale of property and equipment, and (ix) other expenses or charges to exclude certain items which we believe are not reflective of ongoing performance of our business, such as legal expenses and settlement costs related to litigation outside the ordinary course of business.
Previous wording
Management believes Adjusted EBITDA provides useful information to us and our investors regarding our financial condition and results of operations because it allows us and them to more effectively evaluate our operating performance and compare the results of our operations from period to period without regard to our financing methods or capital structure and helps identify underlying trends in our operations that could otherwise be distorted by the effect of impairments, acquisitions and dispositions, and costs that are not reflective of the ongoing performance of our business. We exclude the items listed above from net income (loss) in arriving at this measure because these amounts can vary substantially from company to company within our industry depending upon accounting methods and book values of assets, capital structures, and the method by which the assets were acquired.
Current wording
Management believes Adjusted EBITDA provides useful information to us and our investors regarding our financial condition and results of operations because it allows us and them to evaluate our operating performance and compare the results of our operations from period to period without regard to our financing methods or capital structure and helps identify underlying trends in our operations that could otherwise be distorted by the effect of impairments, acquisitions and dispositions, and costs that are not reflective of the ongoing performance of our business. We exclude the items listed above from net income (loss) in arriving at this measure because these amounts can vary substantially from company to company within our industry depending upon accounting methods and book values of assets, capital structures, and the method by which the assets were acquired.
Previous wording
Adjusted ROIC is a non-GAAP financial measure. We define Adjusted ROIC as adjusted after-tax net operating profit (loss), divided by average total capital. We define adjusted after-tax net operating profit (loss), which is a non-GAAP financial measure, as net income (loss) plus (i) goodwill, intangible asset, and/or property and equipment impairment charges, (ii) transaction and integration costs related to acquisitions, (iii) fees and expenses relating to our Units offering and other refinancing activities, (iv) interest expense (income), (v) restructuring charges, (vi) loss (gain) on the sale of subsidiaries, (vii) loss (gain) on the extinguishment of debt, and (viii) the provision (benefit) for deferred income taxes. We define total capital as book value of equity (deficit) plus the book value of debt less balance sheet cash and cash equivalents. We compute and use the average of the current and prior period-end total capital in determining Adjusted ROIC.
Current wording
Adjusted ROIC is a non-GAAP financial measure. We define Adjusted ROIC as adjusted after-tax net operating profit (loss), divided by average total capital. We define adjusted after-tax net operating profit (loss), which is a non-GAAP financial measure, as net income (loss) plus (i) goodwill, intangible asset, and/or property and equipment impairment charges, (ii) transaction and integration costs related to acquisitions, (iii) interest expense (income), (iv) restructuring charges, (v) loss (gain) on the sale of subsidiaries, (vi) loss (gain) on the extinguishment of debt, and (vii) the provision (benefit) for deferred income taxes. We define total capital as book value of equity (deficit) plus the book value of debt less balance sheet cash and cash equivalents. We compute and use the average of the current and prior period-end total capital in determining Adjusted ROIC.
Previous wording
Liquidity and Capital Resources
Current wording
Financial Condition, Liquidity, and Capital Resources
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 securities. 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 and will continue to adapt as the market dictates. For example, earlier this year, 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 on our profitability 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 securities. 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 and adapt as the market dictates. We have also used cash to make open market repurchases of our debt.
Previous wording
For additional information on the Units and the 2028 Notes, see Note 9 – Debt Obligations included in Item 8 of Part II of this Annual Report.
Current wording
At December 31, 2025, we had $63.3 million of outstanding borrowings under the Prepetition ABL Facility. We also had $300.0 million aggregate principal amount of 2028 Notes outstanding as of December 31, 2025. For additional information on the Prepetition ABL Facility and the 2028 Notes, see Note 9 – Debt Obligations included in Item 8 of Part II of this Annual Report. As noted above, the filing of the Chapter 11 Cases constituted an event of default that accelerated our obligations related to the 2028 Notes and the Prepetition ABL Facility. As a result, the principal and interest due under our outstanding 2028 Notes and Prepetition ABL Facility became immediately due and payable. However, any efforts to enforce such payment obligations are automatically stayed as a result of the filing of the Chapter 11 Cases, and the creditors’ rights of enforcement are subject to the applicable provisions of the Bankruptcy Code.
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 months ended December 31, 2024, no shares were sold under the Equity Distribution Agreement. During the year ended December 31, 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.
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 the Equity Distribution Agreement, we were able to sell, from time to time, 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 received a commission equal to 3.0% of the gross sale price of any shares sold under the Equity Distribution Agreement. 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 year ended December 31, 2024, 5,380,164 shares were sold under the Equity Distribution Agreement, which generated net proceeds of $8.2 million after deducting commissions of $0.3 million, and during the year ended December 31, 2025, no shares were sold under the Equity Distribution Agreement. No additional shares may be sold under the Equity Distribution Agreement.
Previous wording
For 2025, our planned capital expenditure budget, excluding possible acquisitions, is expected to be between $15 million to $25 million. The nature of our capital expenditures is comprised of a base level of investment required to support our current operations and amounts related to growth and company initiatives. Capital expenditures for growth and company initiatives are discretionary. We continually evaluate our capital expenditures, and the amount we ultimately spend will depend on a number of factors, including expected industry activity levels and company initiatives. For example, our planned capital expenditure budget, excluding possible acquisitions, for 2024 was initially expected to be between $15.0 million and $25.0 million and was subsequently reduced to be between $10.0 million and $15.0 million in conjunction with market declines and to preserve liquidity until the market returns to more normalized levels. Although we do not budget for acquisitions, pursuing growth through acquisitions may continue to be a part of our business strategy. Our ability to make significant additional acquisitions for cash will require us to obtain additional equity or debt financing, which we may not be able to obtain on terms acceptable to us or at all.
Current wording
For 2026, assuming successful emergence from the Chapter 11 Cases, our planned capital expenditure budget, excluding possible acquisitions, is expected to be between $15.0 million to $30.0 million. The nature of our capital expenditures is comprised of a base level of investment required to support our current operations and amounts related to growth and company initiatives. Capital expenditures for growth and company initiatives are discretionary. We continually evaluate our capital expenditures, and the amount we ultimately spend will depend on a number of factors, including expected industry activity levels and company initiatives. Although we do not budget for acquisitions, pursuing growth through acquisitions may continue to be a part of our business strategy. Our ability to make significant additional acquisitions for cash will require us to obtain additional equity or debt refinancing, which we may not be able to obtain on terms acceptable to us or at all, particularly after recently emerging from the Chapter 11 cases.
Previous wording
Net cash provided by operating activities was $13.2 million in 2024 compared to $45.5 million in net cash provided by operating activities in 2023. The decrease was primarily attributed to a $20.5 million decrease in cash provided by working capital, driven mainly by a $9.8 million decrease in cash provided by accounts receivable collections in comparison to 2023. The decrease was also partially attributed to a $11.8 million decrease in cash provided by operations driven mainly by an increased net loss in comparison to 2023.
Current wording
Net cash used in operating activities was $7.3 million in 2025 compared to $13.2 million in net cash provided by operating activities in 2024. The $20.5 million change was primarily attributed to a $12.9 million decrease in cash provided by working capital in comparison to 2024, driven mainly by an increased inventory balance in comparison to 2024 coupled with the fluctuation in the timing of certain prepaid expenses between periods. The overall change was also partly attributed to a $7.6 million decrease in cash flow provided by operations driven mainly by an increased net loss in comparison to 2024.
Previous wording
Net cash used in investing activities was $14.2 million in 2024 compared to $23.2 million in net cash used in investing activities in 2023. The decrease was attributed to a $9.8 million decrease in cash purchases of property and equipment, partially offset by a $0.8 million decrease in proceeds from the sale of property and equipment (including insurance), each in comparison to 2023.
Current wording
Net cash used in investing activities was $13.6 million in 2025 compared to $14.2 million in 2024. The $0.6 million decrease was primarily attributed to $2.2 million in cash proceeds from property and equipment casualty losses in 2025 that did not occur in 2024, partially offset by a $1.2 million increase in cash purchases of property and equipment in comparison to 2024 and a $0.4 million decrease in cash proceeds from the sale of property and equipment between periods.
Previous wording
Net cash used in financing activities was $1.7 million in 2024 compared to $8.9 million in net cash used in 2023. The decrease was primarily attributed to the $307.3 million redemption of the 2023 Notes as well as $6.3 million in debt issuance costs associated with the Units offering in 2023, neither of which reoccurred in 2024. The decrease in net cash used was also partially due to $8.2 million in proceeds received from the issuance of common stock under our ATM program in 2024 that did not occur in 2023. Additionally, the decrease was partly attributed to a $2.0 million reduction in payments on the ABL Credit Facility between periods as well as an increase of $1.0 million in proceeds from short term debt, each in comparison to 2023. The overall decrease in net cash used was largely offset by $279.8 million in proceeds received from the Units offering in 2023, that did not reoccur in 2024. The decrease was also offset by a $37.0 million reduction in proceeds from the ABL Credit Facility between periods, as well as a $0.9 million increase in payments on short term debt between periods.
Current wording
Net cash provided by financing activities was $12.9 million in 2025 compared to $1.7 million in net cash used in 2024. The $14.6 million change was primarily attributed to a $62.9 million increase in proceeds received from revolving credit facilities and a $3.8 million increase in proceeds from short-term debt, each in comparison to 2024, partially offset by a $38.0 million increase in payments on revolving credit facilities in comparison to 2024, coupled with $8.2 million in proceeds received from the issuance of common stock under our ATM program in 2024, that did not reoccur in 2025, as well as $4.6 million in debt issuance costs associated with the Prepetition ABL Facility in 2025, that did not occur in 2024, and a $1.8 million increase in payments of short-term debt between periods.
Previous wording
Fair value of the stock-based compensation for all of the performance share units as well as the fair value of the performance cash awards was measured using a Monte Carlo simulation model.
Current wording
Fair value of the performance cash awards was measured using a Monte Carlo simulation model.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
(Gain) Loss on Sale of Property and Equipment
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
Adjusted EBITDA is a non-GAAP financial measure that is used by management and external users of our financial statements, such as industry analysts, investors, lenders, and rating agencies.
Previous report — wording carried elsewhere
On November 6, 2023, we entered into the Equity Distribution Agreement with Piper Sandler & Co., as 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 the Company’s 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.