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, 2025, as compared to our results of operations for the three months ended March 31, 2024. 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, 2025, as compared to our results of operations for the three and six months ended June 30, 2024. In addition, the discussion and analysis addresses our liquidity, financial condition and other matters for these periods.

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 37 patents and 7 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 37 patents and 8 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. 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 stabilization, through decreases, in the fourth quarter of 2023 due to a decrease in demand as the overall economy declined. During the first half of 2024, oil prices increased steadily, while in the second half of the year they fell back and traded within a relatively narrow band. Natural gas prices also declined since the fourth quarter of 2023, bottoming out in the first quarter of 2024 and remaining near historic lows for the remainder of the year, before increasing in early 2025 to a two-year high. 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 1.4%, to $71.78 per Bbl during the three months ended March 31, 2025, compared to the WTI average daily price per barrel of $70.81 per Bbl during the three months ended December 31, 2024. In early April 2025, after the introduction of tariffs by the U.S. government and an announced increase in production from the Organization of the Petroleum Exporting Countries and its allies (“OPEC+”), the price of oil dropped by approximately 15%, from $71.87 per Bbl to $61.05 per Bbl. As of March 31, 2025, U.S. rig count stood at 592, which remained flat compared to December 31, 2024, when the U.S. rig count was 589.

Current wording

Demand for services in the oil and natural gas industry is cyclical and subject to sudden and significant volatility. So far in 2025, factors affecting oil prices have included instability and conflict in the Middle East, output increases from the largest oil-producing countries and changes in the growth rate of the U.S. and world economies. 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 10.0%, to $64.57 per Bbl during the three months ended June 30, 2025, compared to the WTI average daily price per barrel of $71.78 per Bbl during the three months ended March 31, 2025. In early April 2025, after the introduction of tariffs by the U.S. government and an announced increase in production from the Organization of the Petroleum Exporting Countries and its allies (“OPEC+”), the price of oil dropped by approximately 15%, from $71.87 per Bbl to $61.05 per Bbl. In early July 2025, OPEC+ announced an additional production increase of about 548 thousand barrels per day. Per the U.S. Energy Information Administration, U.S. crude oil production is expected to remain relatively constant between the second quarter of 2025 and the fourth quarter of 2026, declining by less than 1%. Natural gas prices have increased to a recent high point in early 2025, before decreasing in the second quarter of 2025 near the two-year average. As of June 30, 2025, U.S. land rig count stood at 533, a decrease of 7.0% compared to December 31, 2024, when the U.S. land rig count was 573.

Previous wording

Looking ahead to the year ending December 31, 2025, 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, 2025, WTI prices have increased slightly in the first quarter, before suddenly decreasing due to the above events, making it difficult to anticipate future changes in price. Currently, global oil inventories supplied from OPEC+ and other oil producing nations are expected to decrease and therefore put downwards pricing pressure globally. As oil price remains at the break-even level for some operators, we expect the industry to retain a cautious approach to drilling expansion, as evidenced by the U.S. rig count being flat through mid-April 2025.

Current wording

Looking ahead to the year ending December 31, 2025, assuming economic activity holds at the recent level and commodity prices remain volatile, we anticipate that our customers will continue to cautiously allocate capital. So far in the year ending December 31, 2025, WTI prices have increased slightly in the first quarter, before suddenly decreasing due to the above events, making it difficult to anticipate future changes in price. Currently, global oil flows supplied from OPEC+ and other oil producing nations are expected to increase and therefore put downwards pricing pressure globally. As oil price remains above the break-even level for most operators, we expect the industry to retain a cautious approach to drilling and completion expansion.

Previous 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, the imposition of increased, new and retaliatory tariffs 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, the conflict 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, the imposition of increased, new and retaliatory tariffs 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, 2025, cost of sales were $123.8, or 80.4% of sales, as compared to the three months ended March 31, 2024 of $144.0, or 82.4% of sales. Cost of sales as a percentage of revenues decreased primarily due to higher leverage of fixed costs during the quarter. The two largest components of cost of sales are labor and repair & maintenance. As cost of sales as a percentage of revenues decreased, labor costs per employee decreased by 2.6% as compared with the three months ended March 31, 2024. Repair & maintenance costs as a percentage of revenues decreased by 11.1% as compared to the three months ended March 31, 2024, due to a decrease in repair & maintenance costs during the quarter.

Current wording

Cost of sales. For the quarter ended June 30, 2025, cost of sales were $125.6, or 79.0% of sales, as compared to the three months ended June 30, 2024 of $136.0, or 75.5% of sales. Cost of sales as a percentage of revenues increased primarily due to lower leverage of fixed costs during the quarter. The two largest components of cost of sales are labor and repair & maintenance. As cost of sales as a percentage of revenues increased, labor costs per employee remained flat as compared with the three months ended June 30, 2024. Repair & maintenance costs as a percentage of revenues increased by 2.8% as compared to the three months ended June 30, 2024, due to the higher pricing during the quarter.

Previous wording

For the quarter ended March 31, 2025, operating loss was $17.7 compared to operating loss of $13.1 in the prior year period, due to a reduction in activity and pricing.

Current wording

For the quarter ended June 30, 2025, operating loss was $8.7 compared to operating income of $1.4 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 $0.2, Southwest segment operating income was $3.0, and Northeast/Mid-Con segment operating loss was $8.1 for the three months ended March 31, 2025.

Current wording

The operating results across our three geographic segments broadly declined as a function of lower revenues compared to the prior year period. Rocky Mountains segment operating income was $3.3, Southwest segment operating loss was $1.7, and Northeast/Mid-Con segment operating loss was $1.3 for the three months ended June 30, 2025.

Previous wording

Income tax expense. For the quarter ended March 31, 2025, 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. For the quarter ended June 30, 2025, 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 full valuation allowance recorded against its net deferred tax assets.

Previous wording

Net (loss) income. For the quarter ended March 31, 2025, net loss was $27.9, as compared to net loss of $22.2 in the prior year period, decreasing primarily as a result of lower revenues as discussed above.

Current wording

Net loss. For the quarter ended June 30, 2025, net loss was $19.9, as compared to net loss of $8.0 in the prior year period, decreasing primarily as a result of lower revenues as discussed above.

Previous wording

For the quarter ended March 31, 2025, revenues were $154.0, a decrease of $20.7, or 11.8%, 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 3% of the $20.7 decrease, and lower weighted average volume contributed to the remaining approximately 97%. On a segment basis, Rocky Mountains segment revenue increased by $2.2 or 4.8%. This increase was driven entirely by an increase in weighted average volume. Southwest segment revenue decreased by $4.2 or 6.1%. This decrease was driven entirely by a decrease in weighted average volume. Northeast/Mid-Con segment revenue decreased by $18.7 or 31.3%. Lower weighted average price contributed to approximately 13% of the dollar decrease, and lower weighted average volume contributed to the remaining approximately 87%.

Current wording

For the six months ended June 30, 2025, revenues were $313.0, a decrease of $41.9, or 11.8%, as compared with the prior year period. The overall decrease in revenues reflects a decline in activity during the six months ended, leading to lower demand for our services. Lower weighted average price contributed to approximately 33% of the $41.9 decrease, and lower weighted average volume contributed to the remaining approximately 67%. On a segment basis, Rocky Mountains segment revenue decreased by $5.1 or 4.8%. This decrease was driven predominantly by a decrease in weighted average price. Southwest segment revenue decreased by $15.3 or 11.0%. This decrease was driven entirely by a decrease in weighted average volume. Northeast/Mid-Con segment revenue decreased by $21.5 or 19.8%. Lower weighted average volume contributed to approximately all of the dollar decrease.

Previous wording

Selling, general and administrative expenses (“SG&A”). For the quarter ended March 31, 2025, SG&A expenses were $21.6, or 14.0% of revenues, as compared with $21.6, or 12.4% 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 remained the same on a dollar basis compared to the three months ended March 31, 2024.

Current wording

Selling, general and administrative expenses (“SG&A”). For the six months ended June 30, 2025, SG&A expenses were $39.6, or 12.7% of revenues, as compared with $40.9, or 11.5% 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 six months ended, as SG&A decreased at a lower rate than revenues compared to the six months ended June 30, 2024.

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 our Prior ABL Facility and New ABL Facility and cash flows from operations. At March 31, 2025, we had $14.6 of cash and cash equivalents, and $43.5 available on the March 2025 ABL Facility Borrowing Base Certificate, which resulted in a total liquidity position of $58.1.

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 note holders, borrowings under our Prior ABL Facility (as defined below) and New ABL Facility (as defined below) and cash flows from operations. At June 30, 2025, we had $16.7 of cash and cash equivalents, and $48.7 available on the New ABL Facility Borrowing Base Certificate, which resulted in a total liquidity position of $65.4.

Previous wording

On August 10, 2018, the Company entered into a Credit Agreement, by and among the Company, as borrower, certain subsidiaries of the Company, as guarantors, JPMorgan Chase Bank, N.A., as administrative agent (“Prior Administrative Agent”), as collateral agent and as issuing lender, and the lenders party thereto, which has been repaid in full and the commitments thereunder terminated (as amended, supplemented, or otherwise modified prior to the termination thereof, the “Prior ABL Facility”). The Prior ABL Facility became effective on September 14, 2018 and was scheduled to mature in 2025. Borrowings under the Prior ABL Facility bore interest at a rate equal to Term SOFR (as defined in the Prior ABL Facility) plus the Applicable Margin (as defined in the Prior ABL Facility).

Current wording

On August 10, 2018, the Company entered into a Credit Agreement, by and among the Company, as borrower, certain subsidiaries of the Company, as guarantors, JPMorgan Chase Bank, N.A., as administrative agent (“Prior Administrative Agent”), as collateral agent and as issuing lender, and the lenders party thereto, which has been repaid in full and the commitments thereunder terminated (as amended, supplemented, or otherwise modified prior to the termination thereof, the “Prior ABL Facility”). The Prior ABL Facility became effective on September 14, 2018 and was scheduled to mature in 2025. Borrowings under the Prior ABL Facility bore interest at a rate equal to Term SOFR (as defined in the Prior ABL Facility) plus the Applicable Margin (as defined in the Prior ABL Facility). On March 12, 2025, in connection with the completion of the Refinancing, the Prior ABL Facility was repaid in full using borrowings under the New ABL Facility and the commitments thereunder terminated.

Previous wording

As of March 31, 2025, the borrowings outstanding under the New ABL Facility were $55.0. The effective interest rate under the New ABL Facility was approximately 9.06% on March 31, 2025. Accrued interest related to the New ABL Facility was $0.3 as of March 31, 2025.

Current wording

As of June 30, 2025, the borrowings outstanding under the New ABL Facility were $45.0, a decrease of $10.0 from March 31, 2025. The effective interest rate under the New ABL Facility was approximately 9.06% on June 30, 2025. Accrued interest related to the New ABL Facility was $0.4 as of June 30, 2025.

Previous wording

In conjunction with the acquisition of Motley Services, LLC (“Motley”) in 2018, we issued $250.0 principal amount of the 2025 Senior 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 2025 Senior Notes, total debt related to the 2025 Senior Notes as of December 31, 2024 was $235.1. The 2025 Senior Notes bore interest at an annual rate of 11.5%, payable semi-annually in arrears on May 1 and November 1. Accrued interest as of December 31, 2024 was $4.5.

Current wording

In conjunction with the acquisition of Motley Services, LLC in 2018, we issued $250.0 principal amount of the 2025 Senior 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 2025 Senior Notes, total debt related to the 2025 Senior Notes as of December 31, 2024 was $235.1. The 2025 Senior Notes bore interest at an annual rate of 11.5%, payable semi-annually in arrears on May 1 and November 1. Accrued interest as of December 31, 2024 was $4.5.

Previous wording

31, 2025, stepping down to 4.00 to 1.0 for the test periods ending March 31, 2026 through December 31, 2026, 3.50 to 1.0 for the test periods ending March 31, 2027 through December 31, 2027, 3.00 to 1.0 for the test periods ending March 31, 2028 through December 31, 2028, and 2.50 to 1.0 for each test period thereafter and (ii) restrictions on making net capital expenditures in any test period in excess of the greater of (x) $65.0 in the aggregate or (y) 7% of revenues during such test period.

Current wording

The 2030 Senior Notes Indenture contains certain financial covenants that include (i) a maximum total net leverage ratio of not greater than 4.50 to 1.0 for the test periods ending March 31, 2025 through December 31, 2025, stepping down to 4.00 to 1.0 for the test periods ending March 31, 2026 through December 31, 2026, 3.50 to 1.0 for the test periods ending March 31, 2027 through December 31, 2027, 3.00 to 1.0 for the test periods ending March 31, 2028 through December 31, 2028, and 2.50 to 1.0 for each test period thereafter and (ii) restrictions on making net capital expenditures in any test period in excess of the greater of (x) $65.0 in the aggregate or (y) 7% of revenues during such test period.

Previous wording

As of March 31, 2025, the principal amount outstanding under the 2030 Senior Notes was $231.0. On a net basis, after taking into consideration unamortized debt issuance costs and original issue discount for the 2030 Senior Notes, total debt related to the 2030 Senior Notes as of March 31, 2025 was $206.0. The effective interest rate under the 2030 Senior Notes was approximately 12.83% on March 31, 2025. Accrued interest related to the 2030 Senior Notes was $1.6 as of March 31, 2025.

Current wording

As of June 30, 2025, the principal amount outstanding under the 2030 Senior Notes was $236.9. On a net basis, after taking into consideration unamortized debt issuance costs and original issue discount for the 2030 Senior Notes, total debt related to the 2030 Senior Notes as of June 30, 2025 was $213.7. The effective interest rate under the 2030 Senior Notes was approximately 13.81% on June 30, 2025. Accrued interest related to the 2030 Senior Notes was $0.0 as of June 30, 2025.

Previous wording

The Company uses standby letters of credit to facilitate commercial transactions with third parties and to secure our performance to certain vendors. Total letters of credit outstanding under the New ABL Facility were $6.4 at March 31, 2025 and under the Prior ABL Facility were $6.5 at December 31, 2024. To the extent liabilities are incurred as a result of the activities covered by the letters of credit, such liabilities are included on the accompanying consolidated balance sheets. Restricted cash on the balance sheet is largely tied to cash collateralized letters of credit as we shift from our Prior ABL Facility to the New ABL Facility. As of the date of filing, $6.1 of the restricted cash is no longer restricted.

Current wording

The Company uses standby letters of credit to facilitate commercial transactions with third parties and to secure our performance to certain vendors. Total letters of credit outstanding under the New ABL Facility were $6.2 at June 30, 2025 and under the Prior ABL Facility were $6.5 at December 31, 2024. To the extent liabilities are incurred as a result of the activities covered by the letters of credit, such liabilities are included on the accompanying consolidated balance sheets. Restricted cash on the balance sheet is largely tied to cash collateralized letters of credit as we shift from our Prior ABL Facility to the New ABL Facility. As of the date of filing, $0.6 of the restricted cash remains restricted.

Previous wording

As of March 31, 2025, the Company had $0.6 of outstanding short-term indebtedness related to the financing of various insurance premiums.

Current wording

As of June 30, 2025, the Company had $4.9 of outstanding short-term indebtedness related to the financing of various insurance premiums, which is included in the Accrued liabilities line item in the balance sheet.

Previous wording

Our capital expenditures were $15.0 during the three months ended March 31, 2025, compared to $13.5 in the three months ended March 31, 2024. We offset $4.8 of capital spending during the three months ended March 31, 2025 with the same amount of proceeds from asset sales. Based on current industry conditions and our significant investments in capital expenditures over the past several years, we expect to incur between $40.0 and $50.0 in total capital expenditures for the year ending December 31, 2025. 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 $27.7 during the six months ended June 30, 2025, compared to $28.8 in the six months ended June 30, 2024. We offset $6.4 of capital spending during the six months ended June 30, 2025 with the same amount of proceeds from asset sales. Based on current industry conditions and our significant investments in capital expenditures over the past several years, we expect to incur between $40.0 and $50.0 in total capital expenditures for the year ending December 31, 2025. 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

On June 14, 2021, the Company entered into an Equity Distribution Agreement (as amended from time to time, the “Equity Distribution Agreement”) with Piper Sandler & Co. as sales agent (the “Agent”). Pursuant to the terms of the Equity Distribution Agreement, the Company may sell from time to time through the Agent (the “ATM Offering”) the Company’s common stock, par value $0.01 per share (“Common Stock”), having an aggregate offering price of up to $50.0. On November 16, 2022, the Company entered into Amendment No. 1 to the Equity Distribution Agreement, which, among other things, allows for debt-for-equity exchanges in accordance with Section 3(a)(9) of the Securities Act. On March 14, 2025, the Company entered into Amendment No. 2 to the Equity Distribution Agreement (the “EDA Amendment”), which, among other things, increased the aggregate offering price to up to approximately $57.75 (which amount includes all of the Common Stock previously sold pursuant to the Equity Distribution Agreement prior to the EDA Amendment) and provides for the Company's election not to deliver a placement notice. Under the terms of the Equity Distribution Agreement, the Company will pay the Agent a commission equal to 3.0% of the gross sales price of the Common Stock sold.

Current wording

On June 14, 2021, the Company entered into an Equity Distribution Agreement (as amended from time to time, the “Equity Distribution Agreement”) with Piper Sandler & Co. as sales agent (the “Agent”). Pursuant to the terms of the Equity Distribution Agreement, the Company may sell from time to time through the Agent (the “ATM Offering”) the Company’s common stock, par value $0.01 per share (“Common Stock”), having an aggregate offering price of up to $50.0. On November 16, 2022, the Company entered into Amendment No. 1 to the Equity Distribution Agreement, which, among other things, allows for debt-for-equity exchanges in accordance with Section 3(a)(9) of the Securities Act. On March 14, 2025, the Company entered into Amendment No. 2 to the Equity Distribution Agreement (the “EDA Amendment”), which, among other things, increased the aggregate offering price to up to approximately $57.75 (which amount includes all of the Common Stock previously sold pursuant to the Equity Distribution Agreement prior to the EDA Amendment) and provides for the Company's election not to deliver a placement notice. Under the terms of the Equity

Previous wording

During the three months ended March 31, 2025, the Company sold 142,769 shares of Common Stock in exchange for gross proceeds of approximately $0.5 and incurred legal and administrative fees of $0.1.

Current wording

During the three and six months ended June 30, 2025, the Company sold 25,000 and 167,769 shares of Common Stock, respectively, in exchange for gross proceeds of approximately $0.1 and $0.6, respectively, and incurred legal and administrative fees of $0.1 and $0.1, respectively.

Previous wording

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

Current wording

During the three and six months ended June 30, 2024, the Company did not sell any shares of Common Stock and incurred legal and administrative fees of $0.1 and $0.2, respectively.

Previous wording

Our cash flows used in operating activities for the three months ended March 31, 2025 were approximately $37.6 as compared to approximately $10.8 used in operating activities for the three months ended March 31, 2024. 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 used in operating activities for the six months ended June 30, 2025 were approximately $18.5 as compared to approximately $11.4 provided by operating activities for the six months ended June 30, 2024. 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, 2025, we had $14.6 of cash and cash equivalents and $8.1 of restricted cash. Cash on hand at March 31, 2025 decreased by $68.9, as a result of $37.6 of cash flows used in operating activities, $10.2 of cash flows used in investing activities and $21.1 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, 2025, we had $16.7 of cash and cash equivalents and $0.6 of restricted cash. Cash on hand at June 30, 2025 decreased by $74.3, as a result of $18.5 of cash flows used in operating activities, $21.3 of cash flows used in investing activities and $34.5 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

Current wording

Net cash (used in) provided by operating activities

Previous wording

Net cash used in operating activities was $37.6 for the three months ended March 31, 2025, as compared to net cash used in operating activities of $10.8 for the three months ended March 31, 2024. The negative operating cash flows were attributable to the net loss position, an increase in days receivable outstanding and a decrease in days payable outstanding.

Current wording

Net cash used in operating activities was $18.5 for the six months ended June 30, 2025, as compared to net cash provided by operating activities of $11.4 for the six months ended June 30, 2024. The negative operating cash flows were attributable to the net loss position and an increase in days receivable outstanding.

Previous wording

Net cash used in investing activities was $10.2 for the three months ended March 31, 2025, as compared to net cash used in investing activities of $10.2 for the three months ended March 31, 2024. The cash flows used in investing activities for the three months ended March 31, 2025 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 $21.3 for the six months ended June 30, 2025, as compared to net cash used in investing activities of $22.2 for the six months ended June 30, 2024. The cash flows used in investing activities for the six months ended June 30, 2025 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 $21.1 for the three months ended March 31, 2025, compared to net cash used in financing activities of $6.6 for the three months ended March 31, 2024. We refinanced both our 2025 Senior Notes and Prior ABL Facility during the three months ended March 31, 2025, which brought additional cash outlays. We also restarted sales under our ATM Offering program, which generated proceeds of $0.5.

Current wording

Net cash used in financing activities was $34.5 for the six months ended June 30, 2025, compared to net cash used in financing activities of $14.8 for the six months ended June 30, 2024. We refinanced both our 2025 Senior Notes and Prior ABL Facility during the six months ended June 30, 2025, which brought additional cash outlays. We also restarted sales under our ATM Offering program, which generated proceeds of $0.6 during the six months ended June 30, 2025.