KLX Energy Services Holdings Inc

Previous wording

The following discussion and analysis addresses the results of our operations for the three months ended March 31, 2024, as compared to our results of operations for the three months ended March 31, 2023. In addition, the discussion and analysis addresses our liquidity, financial condition and other matters for these periods.

Current wording

The following discussion and analysis addresses the results of our operations for the three and six months ended June 30, 2024, as compared to our results of operations for the three and six months ended June 30, 2023. In addition, the discussion and analysis addresses our liquidity, financial condition and other matters for these periods.

Previous wording

On March 8, 2023, KLXE acquired all of the equity interests of Greene’s Energy Group, LLC (“Greene’s”), in an all-stock transaction (the “Greene's Acquisition”), including $1.7 in cash remaining at Greene's, which was subsequently adjusted to $1.1 due to a $0.6 working capital adjustment. See Note 3 - Business Combinations.

Current wording

On March 8, 2023, KLXE acquired all of the equity interests of Greene’s Energy Group, LLC (“Greene’s”), in an all-stock transaction (the “Greene's Acquisition”), including $1.7 in cash remaining at Greene’s, which was subsequently adjusted to $1.1 due to a $0.6 working capital adjustment.

Previous wording

We offer a variety of targeted services that are differentiated by the technical competence and experience of our field service engineers and their deployment of a broad portfolio of specialized tools and proprietary equipment. Our innovative and adaptive approach to proprietary tool design has been employed by our in-house research and development (“R&D”) organization and, in selected instances, by our technology partners to develop tools covered by 38 patents and 10 pending patent applications, which we believe differentiates us from our regional competitors and also allows us to deliver more focused service and better outcomes in our specialized services than larger national competitors that do not discretely dedicate their resources to the services we provide.

Current wording

We offer a variety of targeted services that are differentiated by the technical competence and experience of our field service engineers and their deployment of a broad portfolio of specialized tools and proprietary equipment. Our innovative and adaptive approach to proprietary tool design has been employed by our in-house research and development (“R&D”) organization and, in selected instances, by our technology partners to develop tools covered by 38 patents and 9 pending patent applications, which we believe differentiates us from our regional competitors and also allows us to deliver more focused service and better outcomes in our specialized services than larger national competitors that do not discretely dedicate their resources to the services we provide.

Previous wording

Demand for services in the oil and natural gas industry is cyclical and subject to sudden and significant volatility. The oil and gas industry experienced significant increases in activity in late 2021 and 2022 due to the recovery from the COVID-19 pandemic and increasing demand for oil and gas. Furthermore, sanctions and import bans on Russian oil have been implemented by various countries in response to the ongoing war in Ukraine, further impacting global oil supply. While oil prices declined in the first half of 2023 from their 2022 highs, oil prices rebounded in the third quarter of 2023 due to stronger than anticipated economic growth and sustained production cuts from Saudi Arabia and Russia, followed by oil price decreases in the fourth quarter of 2023 due to a decrease in demand as the overall economy declined. Natural gas prices also declined in the fourth quarter of 2023. Oil and natural gas prices have been, and may remain, volatile, which impacts demand for our business. West Texas Intermediate’s (“WTI") average daily price per barrel decreased by approximately 1.3%, to $77.50 per Bbl during the three months ended March 31, 2024, compared to the WTI average daily price per barrel of $78.53 per Bbl during the three months ended December 31, 2023. As of March 31, 2024, U.S. rig count stood at 621, which remained flat compared to December 31, 2023, when the U.S. rig count was 622.

Current wording

Demand for services in the oil and natural gas industry is cyclical and subject to sudden and significant volatility. The oil and gas industry experienced significant increases in activity in late 2021 and 2022 due to the recovery from the COVID-19 pandemic and increasing demand for oil and gas. Furthermore, sanctions and import bans on Russian oil have been implemented by various countries in response to the ongoing war in Ukraine, further impacting global oil supply. While oil prices declined in the first half of 2023 from their 2022 highs, oil prices rebounded in the third quarter of 2023 due to stronger than anticipated economic growth and sustained production cuts from Saudi Arabia and Russia, followed by oil price decreases in the fourth quarter of 2023 due to a decrease in demand as the overall economy declined. Natural gas prices also declined in the fourth quarter of 2023. Oil and natural gas prices have been, and may remain, volatile, which impacts demand for our business. West Texas Intermediate’s (“WTI") average daily price per barrel increased by approximately 4.2%, to $81.81 per Bbl during the three months ended June 30, 2024, compared to the WTI average daily price per barrel of $78.53 per Bbl during the three months ended December 31, 2023. As of June 30, 2024, U.S. land rig count stood at 560, a decrease of 7.0% compared to December 31, 2023, when the U.S. rig count was 602.

Previous wording

Looking ahead to the year ending December 31, 2024, assuming economic activity holds at the recent level and commodity prices remain volatile, we anticipate that our customers will continue to cautiously allocate capital and operating expense spending. So far in the year ending December 31, 2024, WTI prices have been flat, as demand for oil and gas products persists. Currently, global oil inventories supplied from OPEC and its allies (“OPEC+”) and other oil producing nations are expected to transition to inventory decreases throughout the majority of 2024 from inventory builds during 2023. This persisting demand and expectation of decreased inventory is balanced against weather-related challenges across the country as well as a cautious approach to drilling expansion, as evidenced by the U.S. rig count being flat through mid-April 2024.

Current wording

Looking ahead to the year ending December 31, 2024, assuming economic activity holds at the recent level and commodity prices remain volatile, we anticipate that our customers will continue to cautiously allocate capital and operating expense spending. So far in the year ending December 31, 2024, WTI prices have noted a slight increase, as demand for oil and gas products persists. Currently, global oil inventories supplied from OPEC and its allies (“OPEC+”) and other oil producing nations are expected to transition to inventory decreases throughout the majority of 2024 from inventory builds during 2023. This persisting demand and expectation of decreased inventory is balanced against weather-related challenges across the country as well as a cautious approach to drilling expansion, as evidenced by the U.S. rig count marking a slight decline through mid-July 2024.

Previous wording

Oil and natural gas prices may fluctuate with changes in demand due to, among other things, the ongoing war in Ukraine, the recent Israel-Hamas conflict, rising tensions with Iran, international sanctions, speculation as to future actions by OPEC+, gas prices, interest rates, inflation and government efforts to reduce inflation, and possible changes in the overall health of the global economy, including a perceived economic recovery or any increased volatility in financial and credit markets or a recession. To what extent these and other external factors (such as government action with respect to climate change regulation) ultimately impact our future business, liquidity, financial condition, and results of operations is highly uncertain and dependent on numerous factors, including future developments, that are not within our control and cannot be accurately predicted.

Current wording

Oil and natural gas prices may fluctuate with changes in demand due to, among other things, the ongoing war in Ukraine, the Israel-Hamas conflict, rising tensions with Iran, international sanctions, speculation as to future actions by OPEC+, gas prices, interest rates, inflation and government efforts to reduce inflation, and possible changes in the overall health of the global economy, including a perceived economic recovery or any increased volatility in financial and credit markets or a recession. To what extent these and other external factors (such as government action with respect to climate change regulation) ultimately impact our future business, liquidity, financial condition, and results of operations is highly uncertain and dependent on numerous factors, including future developments, that are not within our control and cannot be accurately predicted.

Previous wording

Cost of sales. For the quarter ended March 31, 2024, cost of sales were $144.0, or 82.4% of sales, as compared to the three months ended March 31, 2023 of $180.9, or 75.5% of sales. Cost of sales as a percentage of revenues increased primarily due to a decrease in revenue days which led to lower leverage of fixed costs during the quarter. The two largest components of cost of sales are labor and repair & maintenance. Although cost of sales as a percentage of revenues increased, labor costs per employee decreased by 14.9% as compared with the three months ended March 31, 2023. Repair & maintenance costs as a percentage of revenues increased by 29.4% as compared to the three months ended March 31, 2023, due to the lower revenues during the quarter.

Current wording

Cost of sales. For the quarter ended June 30, 2024, cost of sales were $136.0, or 75.5% of sales, as compared to the three months ended June 30, 2023 of $173.3, or 74.1% of sales. Cost of sales as a percentage of revenues increased primarily due to a decrease in revenue days which led to lower leverage of fixed costs during the quarter. The two largest components of cost of sales are labor and repair & maintenance. Although cost of sales as a percentage of revenues increased, labor costs per employee decreased by 15.0% as compared with the three months ended June 30, 2023. Repair & maintenance costs as a percentage of revenues increased by 13.3% as compared to the three months ended June 30, 2023, due to the lower revenues during the quarter.

Previous wording

Selling, general and administrative expenses (“SG&A”). For the quarter ended March 31, 2024, SG&A expenses were $21.6, or 12.4% of revenues, as compared with $26.2, or 10.9% of revenues, in the prior year period. The increase in percentage of revenues is due to the lower revenues and lower leverage of fixed costs during the quarter, as SG&A has decreased on a dollar basis compared to the three months ended March 31, 2023.

Current wording

Selling, general and administrative expenses (“SG&A”). For the quarter ended June 30, 2024, SG&A expenses were $19.3, or 10.7% of revenues, as compared with $22.0, or 9.4% of revenues, in the prior year period. The increase in percentage of revenues is due to the lower revenues and lower leverage of fixed costs during the quarter, as SG&A has decreased on a dollar basis compared to the three months ended June 30, 2023.

Previous wording

For the quarter ended March 31, 2024, operating loss was $13.1 compared to operating income of $18.9 in the prior year period, due to a reduction in activity and pricing.

Current wording

For the quarter ended June 30, 2024, operating income was $1.4 compared to operating income of $19.6 in the prior year period, due to a reduction in activity and pricing.

Previous wording

The operating results across our three geographic segments declined as a function of lower revenues compared to the prior year period. Rocky Mountains segment operating loss was $1.2, Southwest segment operating loss was $0.7, and Northeast/Mid-Con segment operating income was $2.4 for the three months ended March 31, 2024. Note that operating loss for Corporate and other decreased slightly due to non-recurring costs related to the Greene's Acquisition in the prior year.

Current wording

The operating results across our three geographic segments declined as a function of lower revenues compared to the prior year period. Rocky Mountains segment operating income was $10.5, Southwest segment operating income was $2.6, and Northeast/Mid-Con segment operating loss was $2.5 for the three months ended June 30, 2024. The operating loss for the Corporate and other segment decreased slightly due to non-recurring costs related to the Greene's Acquisition in the prior year.

Previous wording

Income tax expense. For the quarter ended March 31, 2024, income tax expense was $0.2, consistent with income tax expense of $0.2 in the prior year period, and was comprised primarily of state and local taxes. The Company did not recognize a federal tax benefit on its year-to-date losses because it has a valuation allowance against its deferred tax balances.

Current wording

Income tax expense (benefit). For the quarter ended June 30, 2024, income tax expense was $0.2, as compared to income tax benefit of $0.3 in the prior year period, and was comprised primarily of state and local taxes. The Company did not recognize a federal tax benefit on its year-to-date losses because it has a valuation allowance against its deferred tax balances.

Previous wording

Net (loss) income. For the quarter ended March 31, 2024, net loss was $22.2, as compared to net income of $9.4 in the prior year period, decreasing primarily as a result of lower revenues as discussed above.

Current wording

Net (loss) income. For the quarter ended June 30, 2024, net loss was $8.0, as compared to net income of $11.4 in the prior year period, decreasing primarily as a result of lower revenues as discussed above.

Previous wording

For the quarter ended March 31, 2024, revenues were $174.7, a decrease of $64.9, or 27.1%, as compared with the prior year period. The overall decrease in revenues reflects a decline in activity during the quarter, leading to lower demand for our services. Lower weighted average price contributed to approximately 37% of the $64.9 decrease, and lower weighted average volume contributed to the remaining approximately 63%. On a segment basis, Rocky Mountains segment revenue decreased by $22.3 or 32.8%. Lower weighted average price contributed to approximately 7% of the dollar decrease, and lower weighted average volume contributed to the remaining approximately 93%. Southwest segment revenue decreased by $4.0 or 5.4%. This decrease was driven entirely by a decrease in weighted average volume. Northeast/Mid-Con segment revenue decreased by $38.6 or 39.3%. Lower weighted average price contributed to approximately 66% of the dollar decrease, and lower weighted average volume contributed to the remaining approximately 34%.

Current wording

For the six months ended June 30, 2024, revenues were $354.9, a decrease of $118.7, or 25.1%, as compared with the prior year period. The overall decrease in revenues reflects a decline in activity during the quarter, leading to lower demand for our services. Lower weighted average price contributed to approximately 28% of the $118.7 decrease, and lower weighted average volume contributed to the remaining approximately 72%. On a segment basis, Rocky Mountains segment revenue decreased by $27.3 or 20.3%. Lower weighted average price contributed to approximately 19% of the dollar decrease, and lower weighted average volume contributed to the remaining approximately 81%. Southwest segment revenue decreased by $20.4 or 12.8%. This decrease was driven entirely by a decrease in weighted average volume. Northeast/Mid-Con segment revenue decreased by $71.0 or 39.5%. Lower weighted average price contributed to approximately 51% of the dollar decrease, and lower weighted average volume contributed to the remaining approximately 49%.

Previous wording

We require capital to fund ongoing operations, including maintenance expenditures on our existing fleet and equipment, organic growth initiatives, debt service obligations, investments and acquisitions. Our primary sources of liquidity to date have been capital contributions from our equity and note holders, borrowings under the Company’s asset-based revolving credit facility, as amended by the ABL Amendment (as defined below) and other amendments (the “ABL Facility”) and cash flows from operations. At March 31, 2024, we had $84.9 of cash and cash equivalents and $42.7 available on the March 2024 ABL Facility Borrowing Base Certificate, which resulted in an available liquidity position of $127.6.

Current wording

We require capital to fund ongoing operations, including maintenance expenditures on our existing fleet and equipment, organic growth initiatives, debt service obligations, investments and acquisitions. Our primary sources of liquidity to date have been capital contributions from our equity and noteholders, borrowings under the Company’s asset-based revolving credit facility, as amended by the ABL Amendment (as defined below) and other amendments (the “ABL Facility”) and cash flows from operations. At June 30, 2024, we had $86.9 of cash and cash equivalents and $34.1 available on the June 2024 ABL Facility Borrowing Base Certificate, which resulted in an available liquidity position of $121.0.

Previous wording

We have taken several actions to continue to improve our liquidity position, including closing our Florida legacy headquarters and relocating all key functions to Houston, eliminating redundancies and duplicative functions throughout our operations following the QES Merger, issuing equity under our ATM Offering, executing debt-for-equity exchanges that have reduced our interest burden and monetizing non-core and obsolete assets. We actively manage our capital spending and are focused primarily on required maintenance spending. Additionally, we have seen ongoing volatility in commodity prices and increased inflation, which continues to affect our financial results. We believe that based on our current forecasts, our cash on hand, together with our operating cash flows, will provide us with the ability to fund our operations, including planned capital expenditures, for at least the next twelve months. Based on current trends, we believe that our liquidity beyond the next twelve months will increase as our operational results continue to improve. However, we are unable to quantify or guarantee this increase, and there can be no certainty that current trends will continue and that our liquidity and financial position will continue to improve.

Current wording

We have taken several actions to continue to improve our liquidity position, including closing our Florida legacy headquarters and relocating all key functions to Houston, eliminating redundancies and duplicative functions throughout our operations following the QES Merger, issuing equity under our ATM Offering, executing debt-for-equity exchanges that have reduced our interest burden and monetizing non-core and obsolete assets. We actively manage our capital spending and are focused primarily on required maintenance spending. Additionally, ongoing volatility in commodity prices and increased inflation continue to affect our financial results. We believe that based on our current forecasts, our cash on hand, together with our operating cash flows, will provide us with the ability to fund our operations, including planned capital expenditures, for at least the next twelve months. Based on current trends, we believe that our liquidity beyond the next twelve months will increase as our operational results continue to improve. However, we are unable to quantify or guarantee this increase, and there can be no certainty that current trends will continue and that our liquidity and financial position will continue to improve.

Previous wording

We have substantial indebtedness. As of March 31, 2024, we had total outstanding long-term indebtedness of $284.6 under our ABL Facility and 11.5% senior secured notes due 2025 (the “Senior Secured Notes”) as described in greater detail under “—ABL Facility” and “—Senior Secured Notes” below. Our ability to pay the principal and interest on our long-term debt and to satisfy our other liabilities will depend on our future operating performance and ability to refinance our debt as it becomes due. Our future operating performance and ability to satisfy our liquidity requirements and refinance such indebtedness will be affected by prevailing economic and political conditions, the level of drilling, completion, production and intervention services activity for North American onshore oil and natural gas resources and related pricing for our services, increasing inflation and government efforts to reduce inflation, the willingness of capital providers to lend to our industry, and other financial and business factors, many of which are beyond our control.

Current wording

We have substantial indebtedness. As of June 30, 2024, we had total outstanding long-term indebtedness of $284.9 under our ABL Facility and 11.5% senior secured notes due 2025 (the “Senior Secured Notes”) as described in greater detail under “—ABL Facility” and “—Senior Secured Notes” below. Our ability to pay the principal and interest on our long-term debt and to satisfy our other liabilities will depend on our future operating performance and ability to refinance our debt as it becomes due. Our future operating performance and ability to satisfy our liquidity requirements and refinance such indebtedness will be affected by prevailing economic and political conditions, the level of drilling, completion, production and intervention services activity for North American onshore oil and natural gas resources and related pricing for our services, increasing inflation and government efforts to reduce inflation, the willingness of capital providers to lend to our industry, and other financial and business factors, many of which are beyond our control.

Previous wording

We entered into a $100.0 ABL Facility on August 10, 2018. The ABL Facility became effective on September 14, 2018 and is scheduled to mature in September 2024. Borrowings under the ABL Facility bear interest at a rate equal to Term SOFR (as defined in the ABL Facility) plus the Applicable Margin (as defined in the ABL Facility). The ABL Facility is tied to a borrowing base formula and the ABL Facility has no maintenance financial covenants as long as the minimum level of borrowing availability is maintained. The ABL Facility is secured by, among other things, a first priority lien on our accounts receivable and inventory and contains customary conditions precedent to borrowing and affirmative and negative covenants. $50.0 was outstanding under the ABL Facility as of March 31, 2024. The effective interest rate under the ABL Facility was approximately 8.2% on March 31, 2024.

Current wording

We entered into a $100.0 ABL Facility on August 10, 2018. The ABL Facility became effective on September 14, 2018 and is scheduled to mature on the ABL Maturity Date (as defined below) in 2025. Borrowings under the ABL Facility bear interest at a rate equal to Term SOFR (as defined in the ABL Facility) plus the Applicable Margin (as defined in the ABL Facility). The ABL Facility is tied to a borrowing base formula and the ABL Facility has no maintenance financial covenants as long as the minimum level of borrowing availability is maintained. The ABL Facility is secured by, among other things, a first priority lien on our accounts receivable and inventory and contains customary conditions precedent to borrowing and affirmative and negative covenants. $50.0 was outstanding under the ABL Facility as of June 30, 2024. The effective interest rate under the ABL Facility was approximately 8.4% on June 30, 2024.

Previous wording

The ABL Facility includes a springing financial covenant which requires the Company’s FCCR to be at least 1.0 to 1.0 if availability falls below the greater of $15.0 or 20.0% of the borrowing base. At all times during the three months ended March 31, 2024, availability exceeded this threshold, and the Company was not subject to this financial covenant. As of March 31, 2024, the FCCR was above 1.0 to 1.0, and the Company was in full compliance with the ABL Facility.

Current wording

The ABL Facility includes a springing financial covenant which requires the Company’s FCCR to be at least 1.0 to 1.0 if availability falls below the greater of $15.0 or 20.0% of the borrowing base. At all times during the three months ended June 30, 2024, availability exceeded this threshold, and the Company was not subject to this financial covenant. As of June 30, 2024, the FCCR was at least 1.0 to 1.0, and the Company was in full compliance with the ABL Facility.

Previous wording

In conjunction with the acquisition of Motley in 2018, we issued $250.0 principal amount of the Senior Secured Notes offered pursuant to Rule 144A under the Securities Act of 1933 (as amended, the “Securities Act”) and to certain non-U.S. persons outside the United States in compliance with Regulation S under the Securities Act. On a net basis, after taking into consideration the debt issuance costs for the Senior Secured Notes, total debt related to the Senior Secured Notes as of March 31, 2024 was $234.6. The Senior Secured Notes bear interest at an annual rate of 11.5%, payable semi-annually in arrears on May 1 and November 1 and mature in 2025. Accrued interest related to the Senior Secured Notes was $11.4 as of March 31, 2024.

Current wording

In conjunction with the acquisition of Motley in 2018, we issued $250.0 principal amount of the Senior Secured Notes offered pursuant to Rule 144A under the Securities Act of 1933 (as amended, the “Securities Act”) and to certain non-U.S. persons outside the United States in compliance with Regulation S under the Securities Act. On a net basis, after taking into consideration the debt issuance costs for the Senior Secured Notes, total debt related to the Senior Secured Notes as of June 30, 2024 was $234.9. The Senior Secured Notes bear interest at an annual rate of 11.5%, payable semi-annually in arrears on May 1 and November 1 and mature in 2025. Accrued interest related to the Senior Secured Notes was $4.6 as of June 30, 2024.

Previous wording

Our capital expenditures were $13.5 during the three months ended March 31, 2024, compared to $10.3 in the three months ended March 31, 2023. Based on current industry conditions and our significant investments in capital expenditures over the past several years, we expect to incur between $50.0 and $55.0 in total capital expenditures for the year ending December 31, 2024, out of which approximately 75% is earmarked for maintenance capital spending. 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.

Current wording

Our capital expenditures were $28.8 during the six months ended June 30, 2024, compared to $26.5 in the six months ended June 30, 2023. Based on current industry conditions and our significant investments in capital expenditures over the past several years, we expect to incur between $50.0 and $55.0 in total capital expenditures for the year ending December 31, 2024, out of which approximately 80% is budgeted for maintenance capital spending. 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.

Previous wording

During the three months ended March 31, 2024 and March 31, 2023, the Company did not sell any shares of Common Stock and incurred legal and administrative fees of $0.1 and $0.1, respectively.

Current wording

During the three and six months ended June 30, 2023, the Company did not sell any shares of Common Stock and incurred legal and administrative fees of $— and $0.1, respectively.

Previous wording

Our cash flows used in operating activities for the three months ended March 31, 2024 were approximately $10.8 as compared to approximately $8.6 used in operating activities for the three months ended March 31, 2023. Our operating cash flows are sensitive to many variables, the most significant of which are utilization and profitability, the timing of billing and customer collections, payments to our vendors, repair and maintenance costs and personnel, any of which may affect our available cash. Additionally, should our customers experience financial distress for any reason, they could default on their payments owed to us, which would affect our cash flows and liquidity.

Current wording

Our cash flows provided by operating activities for the six months ended June 30, 2024 were approximately $11.4 as compared to approximately $51.4 provided by operating activities for the six months ended June 30, 2023. Our operating cash flows are sensitive to many variables, the most significant of which are utilization and profitability, the timing of billing and customer collections, payments to our vendors, repair and maintenance costs and personnel, any of which may affect our available cash. Additionally, should our customers experience financial distress for any reason, they could default on their payments owed to us, which would affect our cash flows and liquidity.

Previous wording

At March 31, 2024, we had $84.9 of cash and cash equivalents. Cash on hand at March 31, 2024 decreased by $27.6, as a result of $10.8 of cash flows used in operating activities, $10.2 of cash flows used in investing activities and $6.6 used in financing activities. Our liquidity requirements consist of working capital needs, debt service obligations and ongoing capital expenditure requirements. Our primary requirements for working capital are directly related to the activity level of our operations.

Current wording

At June 30, 2024, we had $86.9 of cash and cash equivalents. Cash on hand at June 30, 2024 decreased by $25.6, as a result of $11.4 of cash flows provided by operating activities, $22.2 of cash flows used in investing activities and $14.8 used in financing activities. Our liquidity requirements consist of working capital needs, debt service obligations and ongoing capital expenditure requirements. Our primary requirements for working capital are directly related to the activity level of our operations.

Previous wording

Net cash used in operating activities was $10.8 for the three months ended March 31, 2024, as compared to net cash used in operating activities of $8.6 for the three months ended March 31, 2023. The negative operating cash flows were attributable to the net loss position and to a decrease in days payable outstanding, partially offset by a reduction in accounts receivable in 2024.

Current wording

Net cash provided by operating activities was $11.4 for the six months ended June 30, 2024, as compared to net cash provided by operating activities of $51.4 for the six months ended June 30, 2023. The lower operating cash flows were attributable to the change from a net income to a net loss position, partially offset by higher depreciation and amortization in 2024.

Previous wording

Net cash used in investing activities was $10.2 for the three months ended March 31, 2024, as compared to net cash used in investing activities of $3.6 for the three months ended March 31, 2023. The cash flows used in investing activities for the three months ended March 31, 2024 were primarily driven by maintenance capital spending tied to the operation of our existing asset base offset by sales of property and equipment.

Current wording

Net cash used in investing activities was $22.2 for the six months ended June 30, 2024, as compared to net cash used in investing activities of $16.9 for the six months ended June 30, 2023. The cash flows used in investing activities for the six months ended June 30, 2024 were primarily driven by maintenance capital spending tied to the operation of our existing asset base offset by sales of property and equipment.

Previous wording

Net cash used in financing activities was $6.6 for the three months ended March 31, 2024, compared to net cash used in financing activities of $5.6 for the three months ended March 31, 2023. During the three months ended March 31, 2024, there were no additional borrowings under our ABL Facility and no sales under our ATM program.

Current wording

Net cash used in financing activities was $14.8 for the six months ended June 30, 2024, compared to net cash used in financing activities of $9.8 for the six months ended June 30, 2023. During the six months ended June 30, 2024, there were no additional borrowings under our ABL Facility and no sales under our ATM program.

Previous wording

We continue to evaluate any recently issued accounting pronouncements for future adoption.

Current wording

We continue to evaluate any recently issued accounting pronouncements for future adoption. See Note 2 - Recent Accounting Pronouncements above for upcoming adoptions of new accounting pronouncements.