Nine Energy Service, Inc.
For the period ended Jun 30, 2026. Filed Aug 5, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Aug 5, 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-Q
Period ended 2026-03-31; filed 2026-05-13.
0001532286-26-000008
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-05.
0001532286-26-000015
Item 2. 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 115 previous paragraphs and 133 current paragraphs.
78 unchanged; 27 reworded; 24 added; 9 removed; 1 previous and 4 current paragraphs rearranged.
Tables are not compared: 4 previous and 7 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 (24)
Current report
Due to the spot-market nature of our business, revenue and profitability generally move closely with U.S. rig, frac, and stage counts. While industry activity improved modestly during the second quarter of 2026 compared to the first quarter of 2026, our profitability was negatively impacted by significant margin compression within our coiled tubing business. During the quarter, two of our large-diameter coiled tubing units were taken out of service due to maintenance-related issues. At the same time, we experienced meaningful inflationary pressures across several cost categories, including consumables, labor, and repairs and maintenance. Our cementing business also faced inflationary cost pressures during the quarter, which further impacted margins.
Current report
The macro-outlook is uncertain, especially with recent geopolitical events. With what we know today, we anticipate that the average U.S. rig count during the third quarter of 2026 will be relatively flat to slightly up compared to the second quarter, with any incremental activity likely to be measured and dependent on the sustainability of commodity prices. One of our coiled tubing units that was out of service returned to service at the beginning of the third quarter; however, the second unit remains under repair and is expected to return near the end of the year. With the sustained revenue loss from this unit, combined with cost inflation, we expect third quarter revenue and profitability to be flat to modestly lower compared to the second quarter of 2026.
Current report
Results for the 2026 Successor Quarter and the 2025 Predecessor Quarter
Current report
For the three months ended June 30, 2026 (the “2026 Successor Quarter”), revenues were $141.8 million. For the 2026 Successor Quarter, total cementing revenue (including pump downs) was $55.3 million, with utilization at 96%; tools revenue was $37.1 million, with completion tools stages of approximately 28,000 stages; coiled tubing revenue was $26.4 million, with total days worked of approximately 785 days; and wireline revenue was $23.0 million, with total completed wireline stages of approximately 6,400 stages.
Current report
For the three months ended June 30, 2025 (the “2025 Predecessor Quarter”), revenues were $147.3 million. For the 2025 Predecessor Quarter, total cementing revenue (including pump downs) was $52.2 million, with utilization at 88%; tools revenue was $37.0 million, with completion tools stages of approximately 30,300; wireline revenue was $33.0 million, with total completed wireline stages of approximately 8,600 stages; and coiled tubing revenue was $25.1 million, with total days worked of approximately 515 days.
Current report
Cost of revenues for the 2026 Successor Quarter was $121.9 million. These costs included $67.0 million in costs related to materials installed and consumed while performing services, $38.0 million in employee-related costs, and $16.9 million in vehicle, repair and maintenance, travel, facility, and other costs.
Current report
Cost of revenues for the 2025 Predecessor Quarter was $121.4 million. These costs included $65.8 million in costs related to materials installed and consumed while performing services, $40.0 million in employee-related costs, and $15.6 million in vehicle, repair and maintenance, travel, facility, and other costs.
Current report
General and administrative expenses for the 2026 Successor Quarter was $15.6 million. These expenses included $9.4 million in employee-related costs, $3.9 million in professional fees, and $2.3 million in communications, vehicle, travel, and other costs.
Current report
General and administrative expenses for the 2025 Predecessor Quarter was $13.9 million. These expenses primarily included $9.5 million in employee-related costs, $1.9 million in professional fees, and $2.5 million in communications, vehicle, travel, marketing, and other costs.
Current report
For the 2025 Predecessor Quarter, we recorded $14.7 million in interest expense, which was primarily related to $11.7 million in interest and amortized deferred financing costs associated with the 2028 Notes, $1.5 million in the write-off of unamortized deferred financing costs associated with a prior revolving credit facility, and $1.4 million in interest and amortized deferred financing costs associated with revolving credit facilities.
Current report
For the 2026 Successor Quarter and the 2025 Predecessor Quarter, we recorded a net loss of $4.9 million and a net loss of $10.4 million, respectively. These net losses were primarily due to the revenues and expenses discussed above.
Current report
Revenues
Current report
For the six months ended June 30, 2025 (the “2025 Predecessor Period”), revenues were $297.7 million. For the 2025 Predecessor Period, total cementing revenue (including pump downs) was $109.3 million, with utilization at 97%; tools revenue was $70.9 million, with completion tools stages of approximately 59,000; coiled tubing revenue was $54.9 million, with total days worked of approximately 1,180 days; and wireline revenue was $62.6 million, with total completed wireline stages of approximately 16,300 stages.
Current report
Cost of revenues for the 2026 Successor Period was$157.5 million. These costs included $86.1 million in costs related to materials installed and consumed while performing services, $49.7 million in employee-related costs, and $21.7 million in vehicle, repair and maintenance, travel, facility, and other costs.
Current report
Cost of revenues for the 2025 Predecessor Period was $243.9 million. These costs included $132.9 million in costs related to materials installed and consumed while performing services, $79.7 million in employee-related costs, and $31.3 million in vehicle, repair and maintenance, travel, facility, and other costs.
Current report
General and Administrative Expenses
Current report
General and administrative expenses for the 2025 Predecessor Period was $27.1 million. These expenses primarily included $18.3 million in employee-related costs, $3.5 million in professional fees, and $5.3 million in communications, marketing, vehicle, travel, and other costs.
Current report
Depreciation
Current report
Amortization of Intangibles
Current report
Interest Expense
Current report
For the 2025 Predecessor Period, we recorded approximately $27.6 million in interest expense, which was primarily related to $23.3 million in interest and amortized deferred financing costs associated with the 2028 Notes, $2.5 million in interest and amortized deferred financing costs associated with revolving credit facilities and $1.5 million in the write-off of unamortized deferred financing costs associated with a prior revolving credit facility.
Current report
We recorded a $0.3 million income tax provision for the 2026 Successor Period, a $0.1 million income tax provision for the 2026 Predecessor Period, and a $0.3 million income tax benefit for the 2025 Predecessor Period. The $0.3 million income tax provision for the 2026 Successor Period and the $0.1 million income tax provision for the 2026 Predecessor Period was primarily related to our income tax position and state foreign tax jurisdictions. The $0.3 million income tax benefit for the 2025 Predecessor Period was primarily related to a discrete income tax benefit.
Current report
Net Income (Loss)
Current report
Net cash provided by financing activities was $1.8 million for the 2026 Successor Period and primarily consisted of $5.0 million in proceeds from the Exit ABL Facility, which were partially offset by $3.1 million in payments on other short-term debt.
Removed paragraphs (9)
Previous 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. In the first quarter of 2026, however, although pricing and rig counts were relatively stable, our revenue and profitability were negatively impacted by severe weather in January and February, as well as inefficient operations, frac delays, and more whitespace in the calendar, especially in the Northeast region. Because of this, revenue and profitability in the first quarter of 2026 were down compared to the fourth quarter of 2025. Additionally, during the first quarter of 2026, we incurred costs related to our restructuring that negatively impacted profitability.
Previous report
The macro-outlook is uncertain, especially with recent geopolitical events. With what we know today, we anticipate that U.S. activity levels will be relatively flat in the second quarter of 2026 compared to the first quarter levels. However, we anticipate more efficient operations and less whitespace in the calendar in the second quarter of 2026 and expect our second quarter revenue and earnings will increase as compared to the first quarter of 2026.
Previous report
For the three months ended March 31, 2025 (the “2025 Predecessor Period”), revenues were $150.5 million. For the 2025 Predecessor Period, total cementing revenue (including pump downs) was $57.2 million, with utilization at 105%; tools revenue was $33.8 million, with completion tools stages of approximately 29,000; coiled tubing revenue was $29.9 million, with total days worked of approximately 670 days; and wireline revenue was $29.6 million, with total completed wireline stages of approximately 7,700 stages.
Previous report
Cost of revenues for the 2026 Successor Period was $35.6 million. These costs included $19.1 million in costs related to materials installed and consumed while performing services, $11.7 million in employee-related costs, and $4.8 million in vehicle costs, repair and maintenance costs, insurance, facility costs and other costs.
Previous report
Cost of revenues for the 2025 Predecessor Period was $122.5 million. These costs included $67.2 million in costs related to materials installed and consumed while performing services, $39.8 million in employee-related costs, and $15.5 million in vehicle costs, repair and maintenance costs, insurance, facility costs and other costs.
Previous report
General and administrative expenses for the 2025 Predecessor Period was $13.3 million. These expenses primarily included $9.1 million in employee-related costs and $4.1 million in professional fees and other costs such as communication costs, vehicle expenses, and insurance expenses.
Previous report
For the 2025 Predecessor Period, we recorded approximately $12.9 million in interest expense, which was primarily related to $11.6 million in interest and deferred financing costs associated with the 2028 Notes and $1.0 million in interest associated with revolving credit facilities.
Previous report
Provision (Benefit) for Income Taxes
Previous report
Net cash used in financing activities was $0.8 million for the 2026 Successor Period and consisted of payments on other short-term debt.
Reworded paragraphs (27)
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 our Annual Report on Form 10-K for the year ended December 31, 2025 and this Quarterly Report on Form 10-Q.
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, 2025 and our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2026.
Previous wording
•the Prepetition ABL Lenders provided 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 of revolving credit commitments (the “DIP ABL Facility”), including a roll-up or refinancing of all obligations under the Prepetition ABL
Current wording
•the Prepetition ABL Lenders provided 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 of revolving credit commitments (the “DIP ABL Facility”), including a roll-up or refinancing of all obligations under the Prepetition ABL Loan and Security Agreement, which converted into an exit senior secured asset-based revolving credit facility (the “Exit ABL Facility”) on the effective date of the Plan (the “Plan Effective Date”);
Previous wording
Upon the Plan Effective Date, we applied fresh start accounting in accordance with Financial Accounting Standards Board Accounting Standard Codification Topic 852-Reorganizations (“ASC 852”). The application of fresh start accounting resulted in a new basis of accounting and becoming a new entity for financial reporting purposes. Accordingly, our financial statements and notes after the Plan Effective Date are not comparable to our financial statements and notes on and prior to that date. For additional information, see Note 3 – Emergence from Bankruptcy in Item 1 of Part I of this Quarterly Report on Form 10-Q.
Current wording
Upon the Plan Effective Date, we applied fresh start accounting in accordance with Financial Accounting Standards Board Accounting Standard Codification Topic 852-Reorganizations. The application of fresh start accounting resulted in a new basis of accounting and becoming a new entity for financial reporting purposes. Accordingly, our financial statements and accompanying notes after the Plan Effective Date are not comparable to our financial statements and accompanying notes on and prior to that date. For additional information, see Note 3 – Emergence from Bankruptcy in Item 1 of Part I of this Quarterly Report on Form 10-Q.
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) loss or gain on revaluation of contingent liabilities, (iv) loss or gain on 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.
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 extinguishment of debt, (v) loss or gain on the sale of subsidiaries, (vi) restructuring charges, (vii) stock-based compensation and certain 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
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. Historically, these activity and spending levels have been strongly influenced by current and expected oil and natural gas prices. In recent years, commodity prices have been extremely volatile and unpredictable. Following the announcement of tariffs in April of 2025, oil prices began to decline. In the first quarter of 2025, West Texas Intermediate (“WTI”) averaged $71.78 per barrel and fell to an average of $59.62 per barrel in the fourth quarter of 2025. The decline in oil prices led to a decrease in rig count and activity levels on U.S. land, which in turn led to pricing pressure across service lines, especially within the oil-levered basins, like the Permian. In the first quarter of 2025, the average rig count in the Permian Basin was 302 rigs, and by the fourth quarter of 2025, it had declined to 250 rigs. At the beginning of March 2026, WTI prices increased significantly due to the conflict with Iran. Although WTI prices rose to almost $100 per barrel in March 2026, and averaged $72.74 per barrel for the first quarter of 2026, the U.S. rig count remained flat in the first quarter of 2026 versus the fourth quarter of 2025. At the end of 2025, the U.S. rig count was 546 rigs, and at the end of the first quarter of 2026, the U.S. rig count was 543 rigs. U.S. public operators have not provided any indication that U.S. activity levels will increase in conjunction with higher oil prices.
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 the second quarter of 2026, oil prices remained elevated relative to 2025 (during which the average West Texas Intermediate (“WTI”) price was $65.39 per barrel), driven in large part by geopolitical events and uncertainty surrounding global supply. WTI prices averaged $100.32 and $102.13 per barrel for April 2026 and May 2026, respectively; however, WTI prices declined to an average of $84.81 per barrel for June 2026 following the memorandum of understanding between the U.S. and Iran to end the conflict and reopen the Strait of Hormuz. Despite the elevated oil price environment during much of the second quarter of 2026, U.S. activity levels increased only modestly. At the end of the first quarter of 2026 (during which the average WTI price was $72.74 per barrel), the U.S. rig count was 543 rigs, and at the end of the second quarter of 2026, the U.S. rig count was 573 rigs. The increase in rig count during the second quarter was concentrated primarily in the latter part of the quarter, and operators continued to remain disciplined with capital spending despite higher commodity prices.
Previous wording
In the first quarter of 2026, natural gas prices averaged $4.71 per million British thermal units (“MMBtu”), compared to $3.73 per MMBtu in the fourth quarter of 2025. However, prices have fallen to around $3.00 per MMBtu by the end of the first quarter of 2026. Nonetheless, natural gas prices have remained mostly supportive, which has led to slight increases in rig counts in natural gas-levered basins like the Haynesville. Since the end of the first quarter 2025, there have been 25 rigs added in the Haynesville Basin, which had a total of 55 rigs at the end of the first quarter of 2026. Due to the much smaller size of the Haynesville versus the Permian Basin, these increases have not been able to offset the activity declines and the pricing pressure in the oil-levered basins like the Permian. The long-term outlook on natural gas demand remains positive due mostly to potential increased demand coming from power generation related to artificial intelligence and data centers.
Current wording
Natural gas prices have remained stable throughout the quarter, averaging $2.95 per million British thermal units (“MMBtu”) for the second quarter of 2026 compared to around $3.00 per MMBtu at the end of the first quarter of 2026. As a result, rig counts in natural gas-levered basins like the Haynesville Basin remained stable as well during the quarter. The Haynesville Basin had a total of 55 rigs at the end of the first quarter of 2026 and maintained the same rig count at the end of the second quarter of 2026. The long-term outlook on natural gas demand remains positive due mostly to potential increased demand coming from power generation related to artificial intelligence and data centers.
Previous wording
For the 2026 Successor Period, the 2026 Predecessor Period, and the 2025 Predecessor Period, we recorded a $0.1 million benefit, $0.1 million provision, and $0.1 million provision, respectively. The income tax for all periods is related to our income tax position and state foreign tax jurisdictions.
Current wording
We recorded a $0.4 million income tax provision for the 2026 Successor Quarter and a $0.5 million income tax benefit for the 2025 Predecessor Quarter. The $0.4 million income tax provision for the 2026 Successor Quarter was primarily related to our income tax position and state foreign tax jurisdictions. The $0.5 million income tax benefit for the 2025 Predecessor Quarter was primarily related to a discrete income tax benefit.
Previous wording
For the period from March 6, 2026 through March 31, 2026 (the “2026 Successor Period”), revenues were $41.6 million. For the 2026 Successor Period, total cementing revenue (including pump downs) was $17.6 million, with utilization at 88%; tools revenue was $8.5 million, with completion tools stages of approximately 7,200 stages; coiled tubing revenue was $8.1 million, with total days worked of approximately 225 days; and wireline revenue was $7.4 million, with total completed wireline stages of approximately 2,300 stages.
Current wording
For the period from March 6, 2026 through June 30, 2026 (the “2026 Successor Period”), revenues were $183.4 million. For the 2026 Successor Period, total cementing revenue (including pump downs) was $72.8 million, with utilization at 94%; tools revenue was $45.6 million, with completion tools stages of approximately 35,500 stages; coiled tubing revenue was $34.6 million, with total days worked of approximately 1,000 days; and wireline revenue was $30.4 million, with total completed wireline stages of approximately 8,700 stages.
Previous wording
Cost of revenues for the 2026 Predecessor Period was $80.5 million. These costs included $38.5 million in costs related to materials installed and consumed while performing services, $25.8 million in employee-related costs, $10.8 million in vehicle costs, repair and maintenance costs, insurance, facility costs and other costs, and $5.5 million in inventory write-downs.
Current wording
Cost of revenues for the 2026 Predecessor Period was $80.5 million. These costs included $38.5 million in costs related to materials installed and consumed while performing services, $25.8 million in employee-related costs, $10.7 million in vehicle, repair and maintenance, insurance, travel, facility, and other costs, and $5.5 million in inventory write-downs.
Previous wording
General and administrative expenses for the 2026 Successor Period was $4.6 million. These expenses included $2.6 million in employee-related costs, $1.2 million in professional fees, and $0.8 million in other costs such as communication costs, vehicle expenses, and insurance expenses.
Current wording
General and administrative expenses for the 2026 Successor Period was $20.2 million. These expenses included $12.2 million in employee-related costs, $5.0 million in professional fees, and $3.0 million in communications, vehicle, travel, and other costs.
Previous wording
General and administrative expenses for the 2026 Predecessor Period was $13.1 million. These expenses primarily included $6.0 million in professional fees, $5.1 million in employee-related costs, and $2.0 million in other costs such as communication costs, vehicle expenses, and insurance expenses.
Current wording
General and administrative expenses for the 2026 Predecessor Period was $13.1 million. These expenses primarily included $6.0 million in professional fees, $5.3 million in employee-related costs, and $1.8 million in communications, vehicle, travel, and other costs.
Previous wording
Depreciation expense for the 2026 Successor Period, the 2026 Predecessor Period, and the 2025 Predecessor Period, was $2.2 million, $4.0 million, and $5.8 million, respectively. Due to our revaluation of our property and equipment due to the application of fresh start accounting, depreciation expense increased during the 2026 Successor Period in comparison to the 2026 Predecessor Period and 2025 Predecessor Period.
Current wording
Depreciation expense for the 2026 Successor Period, the 2026 Predecessor Period, and the 2025 Predecessor Period, was $9.2 million, $4.0 million, and $11.6 million, respectively. As a result of our revaluation of our property and equipment due to the application of fresh start accounting, depreciation expense increased during the 2026 Successor Period in comparison to the 2026 Predecessor Period.
Previous wording
Amortization expense for the 2026 Successor Period, the 2026 Predecessor Period, and the 2025 Predecessor Period, was $0.1 million, $2.0 million, and $2.8 million, respectively. The amortizable asset base stayed the same between the 2025 Predecessor Period and the 2026 Predecessor Period. Due to our revaluation of our intangible assets due to the application of fresh start accounting, amortization expense decreased during the 2026 Successor Period in comparison to the 2026 Predecessor Period.
Current wording
Amortization expense for the 2026 Successor Period, the 2026 Predecessor Period, and the 2025 Predecessor Period, was $0.3 million, $2.0 million, and $5.6 million, respectively. The amortizable asset base stayed the same between the 2025 Predecessor Period and the 2026 Predecessor Period. As a result of our revaluation of our intangible assets due to the application of fresh start accounting, amortization expense decreased during the 2026 Successor Period in comparison to the 2026 Predecessor Period.
Previous wording
For the 2026 Successor Period, the 2026 Predecessor Period, and the 2025 Predecessor Period, we recorded a $37 thousand gain, a $0.1 million gain, and a $0.4 million loss, respectively. The change between the 2025 Predecessor Period and the 2026 Predecessor Period occurred because of sales that occurred in the 2026 Predecessor Period that did not occur in the 2025 Predecessor Period. These sales also did not occur in the following 2026 Successor Period.
Current wording
For the 2026 Successor Period, the 2026 Predecessor Period, and the 2025 Predecessor Period, we recorded a $60 thousand gain, a $0.1 million gain, and a $0.4 million loss, respectively. The change between the 2025 Predecessor Period and the 2026 Predecessor Period occurred because of sales that occurred in the 2026 Predecessor Period that did not occur in the 2025 Predecessor Period. These sales also did not recur in the following 2026 Successor Period.
Previous wording
For the 2026 Successor Period, we recorded approximately $0.5 million in interest expense primarily related to interest associated with the Exit ABL Facility.
Current wording
For the 2026 Successor Period, we recorded approximately $2.4 million in interest expense primarily related to interest associated with the Exit ABL Facility.
Previous wording
For the 2026 Successor Period, the 2026 Predecessor Period, and the 2025 Predecessor Period, we recorded net loss of $1.3 million, net income of $107.9 million, and net loss of $7.1 million, respectively. These net losses and net income were primarily due to the revenues and expenses discussed above.
Current wording
For the 2026 Successor Period, the 2026 Predecessor Period, and the 2025 Predecessor Period, we recorded a net loss of $6.1 million, net income of $107.9 million, and a net loss of $17.5 million, respectively. These net losses and net income were primarily due to the revenues and expenses discussed above.
Previous 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 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.
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 extinguishment of debt, (v) loss or gain on the sale of subsidiaries, (vi) restructuring charges, (vii) stock-based compensation and certain 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
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 U.S. (“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.
Previous wording
(1)Amounts relate to the revaluation of a contingent liability associated with a 2018 acquisition. The impact is included in our Condensed Consolidated Statements of Income (Loss) and Comprehensive Income (Loss). For additional information on contingent liabilities, see Note 11 – Commitments and Contingencies included in Item 1 of Part I of this Quarterly Report on Form 10-Q.
Current wording
(1)Amounts relate to the revaluation of a contingent liability associated with a 2018 acquisition. The impact is included in our Condensed Consolidated Statements of Income (Loss) and Comprehensive Income (Loss). Final payment associated with this contingent liability was made in the 2026 Predecessor Period.
Previous wording
(2)For the 2026 Successor Period, amounts relate to professional fees incurred after the Plan Effective Date in relation to the Chapter 11 Cases. For the 2026 Predecessor Period, amounts relate to professional fees incurred prior to the Petition Date in relation to the Chapter 11 Cases.
Current wording
(2)For the 2026 Successor Quarter and the 2026 Successor Period, amounts relate to professional fees incurred after the Plan Effective Date in relation to the Chapter 11 Cases as well as other costs associated with restructuring initiatives. For the 2026 Predecessor Period, amounts relate to professional fees incurred prior to the Petition Date in relation to the Chapter 11 Cases. For the 2025 Predecessor Quarter and the 2025 Predecessor Period, amounts represent costs associated with procurement and supply chain restructuring and other initiatives.
Previous wording
At March 31, 2026, we had $90.4 million of outstanding borrowings under the Exit ABL Facility. At March 31, 2026, we had $11.2 million of cash and cash equivalents and $35.7 million of availability under the Exit ABL Facility, which resulted in a total liquidity position of $46.9 million. For additional information on the Exit ABL Facility, see Note 9 – Debt Obligations included in Item 1 of Part I of this Quarterly Report on Form 10-Q. On April 28, 2026, we borrowed an additional $5.0 million under the Exit ABL Facility.
Current wording
At June 30, 2026, we had $97.3 million of outstanding borrowings under the Exit ABL Facility. At June 30, 2026, we had $16.8 million of cash and cash equivalents and $30.0 million of availability under the Exit ABL Facility, which resulted in a total liquidity position of $46.8 million. For additional information on the Exit ABL Facility, see Note 9 – Debt Obligations included in Item 1 of Part I of this Quarterly Report on Form 10-Q.
Previous wording
Net cash used in operating activities was $5.3 million for the 2025 Predecessor Period, which resulted from net loss of $7.1 million, adjusted for non-cash items of $16.0 million and net cash outflows of $14.2 million from changes in working capital. Non-cash items primarily consisted of depreciation and amortization expense of $8.6 million, amortization of operating leases of $3.4 million, and amortization of deferred financing costs of $2.1 million. The net cash outflow from changes in working capital was driven primarily by an increase in accounts receivable of $14.0 million due to timing of customer invoices and payments.
Current wording
Net cash used in operating activities was $4.7 million for the 2026 Successor Period, which resulted from a net loss of $6.1 million, adjusted for non-cash items of $16.9 million and net cash outflows of $15.5 million from changes in working capital. Non-cash items primarily consisted of depreciation and amortization expense of $9.5 million, amortization of operating leases of $4.7 million, and amortization of deferred financing costs of $2.0 million. The net cash outflow from changes in working capital was driven primarily by an increase in accounts receivable of $12.5 million due to the timing of customer invoices and payments, a decrease in operating lease obligations of $3.9 million, and a decrease in accounts payable and accrued expense of $2.3 million due to the timing of vendor invoices and payments. The net cash outflows were partially offset by a decrease in prepaids and other current assets of $1.5 million and a decrease in inventories, net of $1.4 million due to timing of payments.
Previous wording
Net cash used in operating activities was $10.0 million for the 2026 Predecessor Period, which resulted from net income of $107.9 million, adjusted for non-cash items of $123.6 million and net cash inflows of $5.8 million from changes in working capital. Non-cash items primarily consisted of non-cash income from reorganization items, net, of $139.2 million, depreciation and amortization expense of $5.9 million, amortization of operating leases of $2.9 million, non-cash inventory provisions of $2.5 million, and amortization of deferred financing costs of $2.4 million. The net cash inflow from changes in working capital was driven primarily by an increase in accounts payable and accrued expenses of $8.9 million due to the timing of vendor invoices and payments, as well as a decrease in inventories, net of $2.1 million and a decrease in prepaids and other current assets of $1.7 million due to timing of payments. The net cash inflows were partially offset by a decrease in operating lease obligations of $3.7 million and an increase in accounts receivable of $3.2 million due to timing of customer invoices and payments.
Current wording
Net cash used in operating activities was $10.0 million for the 2026 Predecessor Period, which resulted from net income of $107.9 million, adjusted for non-cash items of $123.6 million and net cash inflows of $5.7 million from changes in working capital. Non-cash items primarily consisted of non-cash income from reorganization items, net, of $139.2 million, depreciation and amortization expense of $5.9 million, amortization of operating leases of $2.9 million, non-cash inventory provisions of $2.5 million, and amortization of deferred financing costs of $2.4 million. The net cash inflow from changes in working capital was driven primarily by an increase in accounts payable and accrued expenses of $8.9 million due to the timing of vendor invoices and payments, as well as a decrease in inventories, net of $2.1 million and a decrease in prepaids and other current assets of $1.7 million due to timing of payments. The net cash inflows were partially offset by a decrease in operating lease obligations of $3.7 million and an increase in accounts receivable of $3.2 million due to timing of customer invoices and payments.
Previous wording
Net cash used in operating activities was $2.4 million for the 2026 Successor Period, which resulted from a net loss of $1.3 million, adjusted for non-cash items of $3.4 million and net cash outflows of $4.6 million from changes in working capital. Non-cash items primarily consisted of depreciation and amortization expense of $2.3 million and amortization of operating leases of $1.0 million. The net cash outflow from changes in working capital was driven primarily by an increase in accounts receivable of $9.2 million due to the timing of customer invoices and payments. The net cash outflows were partially offset by an increase in accounts payable and accrued expenses of $5.2 million due to the timing of vendor invoices and payments.
Current wording
Net cash provided by operating activities was $4.8 million for the 2025 Predecessor Period, which resulted from a net loss of $17.5 million, adjusted for non-cash items of $33.6 million and net cash outflows of $11.3 million from changes in working capital. Non-cash items primarily consisted of depreciation and amortization expense of $17.2 million, amortization of operating leases of $7.1 million, and amortization of deferred financing costs of $6.3 million. The net cash outflow from changes in working capital was driven primarily by an increase in accounts receivable of $12.8 million due to the timing of customer invoices and payments, a decrease in operating lease obligations of $7.1 million and an increase of inventories, net of $4.3 million. The net cash outflows were partially offset by an increase in accounts payable and accrued expenses of $12.6 million due to the timing of vendor invoices and payments.
Previous wording
Net cash used in investing activities was $3.4 million for the 2026 Successor Period primarily due to cash purchases of property and equipment of $3.5 million.
Current wording
Net cash used in investing activities was $7.3 million for the 2026 Successor Period primarily due to cash purchases of property and equipment of $7.5 million, which were partially offset by $0.2 million in proceeds from sales of property and equipment.
Previous wording
Net cash used in investing activities was $4.0 million for the 2025 Predecessor Period and consisted of cash purchases of property and equipment.
Current wording
Net cash used in investing activities was $9.7 million for the 2025 Predecessor Period and consisted of $9.8 million of cash purchases of property and equipment, which were partially offset by $0.1 million of proceeds from sales of property and equipment.
Previous wording
Net cash used in financing activities was $1.6 million for the 2025 Predecessor Period, reflecting $1.3 million in payments on other short-term debt and $0.2 million in payments of contingent liabilities.
Current wording
Net cash used in financing activities was $5.5 million for the 2025 Predecessor Period and primarily consisted of $51.0 million of payments on revolving credit facilities, $4.5 million of debt issuance costs, $2.7 million in payments on other short-term debt, and $0.2 million in payments of contingent liabilities, which were partially offset by $52.9 million of proceeds from revolving credit facilities.
Rearranged current paragraphs (4)
Current report — wording carried from elsewhere
Depreciation expense for the 2026 Successor Quarter and the 2025 Predecessor Quarter was $7.0 million and $5.8 million, respectively. As a result of our revaluation of our property and equipment due to the application of fresh start accounting, depreciation expense increased during the 2026 Successor Quarter in comparison to the 2025 Predecessor Quarter.
Current report — wording carried from elsewhere
Amortization expense for the 2026 Successor Quarter and the 2025 Predecessor Quarter was $0.2 million and $2.8 million, respectively. As a result of our revaluation of our intangible assets due to the application of fresh start accounting, amortization expense decreased during the 2026 Successor Quarter in comparison to the 2025 Predecessor Quarter.
Current report — wording carried from elsewhere
For the 2026 Successor Quarter, we recorded $1.9 million in interest expense primarily related to interest associated with the Exit ABL Facility.
Current report — wording carried from elsewhere
Cost of Revenues (Exclusive of Depreciation and Amortization)
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Loan and Security Agreement, which converted into an exit senior secured asset-based revolving credit facility (the “Exit ABL Facility”) on the effective date of the Plan (the “Plan Effective Date”);