KLX Energy Services Holdings, Inc.

Previous 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.

Current wording

The following discussion and analysis addresses the results of our operations for the three and nine months ended September 30, 2025, as compared to our results of operations for the three and nine months ended September 30, 2024. Note that these results are presented after intercompany eliminations. 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 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.

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 39 patents and 6 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. 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.

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 increased by approximately 1.9%, to $65.78 per Bbl during the three months ended September 30, 2025, compared to the WTI average daily price per barrel of $64.57 per Bbl during the three months ended June 30, 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 July and August 2025, OPEC+ announced additional production increases of about 548 and 547 thousand barrels per day, respectively, followed by smaller increases announced in September and October 2025. By the middle of October 2025, WTI price per barrel decreased to just under $60. Per the U.S. Energy Information Administration, U.S. crude oil production is expected to remain constant between 2025 and 2026. Natural gas prices in the third quarter of 2025 were about 11.0% higher than the two-year average. As of September 30, 2025, U.S. land rig count stood at 532, a decrease of 7.2% compared to December 31, 2024, when the U.S. land rig count was 573.

Previous wording

For the quarter ended June 30, 2025, revenues were $159.0, a decrease of $21.2, 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 19% of the $21.2 decrease, and lower weighted average volume contributed to the remaining approximately 81%. On a segment basis, Rocky Mountains segment revenue decreased by $7.3 or 11.9%. Lower weighted average price contributed to approximately 15% of the dollar decrease, and lower weighted average volume contributed to the remaining approximately 85%. Southwest segment revenue decreased by $11.1 or 15.9%. Lower weighted average volume contributed to approximately all of the dollar decrease. Northeast/Mid-Con segment revenue decreased by $2.8 or 5.7%. Lower weighted average price contributed to approximately 45% of the dollar decrease, and lower weighted average volume contributed to the remaining approximately 55%.

Current wording

For the quarter ended September 30, 2025, revenues were $166.7, a decrease of $22.2, 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 47% of the $22.2 decrease, and lower weighted average volume contributed to the remaining approximately 53%. On a segment basis, Rocky Mountains segment revenue decreased by $17.1 or 25.2%. Lower weighted average volume contributed to approximately all of the dollar decrease in the Rocky Mountains segment. Southwest segment revenue decreased by $12.0 or 17.5%. Lower weighted average price contributed to approximately 33% of the dollar decrease in the Southwest segment, and lower weighted average volume contributed to the remaining approximately 67%. Northeast/Mid-Con segment revenue increased by $6.9 or 13.2%. Higher weighted average price contributed to approximately all of the dollar increase in the Northeast/Mid-Con segment.

Previous 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.

Current wording

Cost of sales. For the quarter ended September 30, 2025, cost of sales were $130.5, or 78.3% of sales, as compared to the three months ended September 30, 2024 of $142.3, or 75.3% 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 increased by 0.5% as compared with the three months ended September 30, 2024. Repair & maintenance costs as a percentage of revenues increased by 4.1% as compared to the three months ended September 30, 2024, due to the higher cost during the quarter.

Previous wording

Selling, general and administrative expenses (“SG&A”). For the quarter ended June 30, 2025, SG&A expenses were $18.0, or 11.3% of revenues, as compared with $19.3, or 10.7% of revenues, in the prior year period. SG&A expenses and revenues decreased at a similar rate during the quarter, which caused the percentage of revenues to remain the same compared to the three months ended June 30, 2024.

Current wording

Selling, general and administrative expenses (“SG&A”). For the quarter ended September 30, 2025, SG&A expenses were $15.6, or 9.4% of revenues, as compared with $21.2, or 11.2% of revenues, in the prior year period. SG&A expenses decreased at a faster rate than revenues during the quarter, which caused the decrease in percentage of revenues compared to the three months ended September 30, 2024.

Previous 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.

Current wording

For the quarter ended September 30, 2025, operating loss was $3.0 compared to operating income of $1.1 in the prior year period, due to a reduction in activity and pricing.

Previous 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.

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 $1.8, Southwest segment operating loss was $3.4, and Northeast/Mid-Con segment operating income was $6.6 for the three months ended September 30, 2025.

Previous 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.

Current wording

Net loss. For the quarter ended September 30, 2025, net loss was $14.3, as compared to net loss of $8.2 in the prior year period, decreasing primarily as a result of lower revenues as discussed above.

Previous 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.

Current wording

For the nine months ended September 30, 2025, revenues were $479.7, a decrease of $64.1, or 11.8%, as compared with the prior year period. The overall decrease in revenues reflects a decline in activity during the nine months ended, leading to lower demand for our services. Lower weighted average volume contributed to approximately all of the decrease. On a segment basis, Rocky Mountains segment revenue decreased by $22.2 or 12.7%. Lower weighted average volume contributed to approximately all of the dollar decrease in the Rocky Mountains segment. Southwest segment revenue decreased by $27.3 or 13.1%. Lower weighted average volume contributed to approximately all of the dollar decrease in the Southwest segment. Northeast/Mid-Con segment revenue decreased by $14.6 or 9.1%. Lower weighted average volume contributed to approximately all of the dollar decrease in the Northeast/Mid-Con segment.

Previous wording

Cost of sales. For the six months ended June 30, 2025, cost of sales were $249.4, or 79.7% of sales, as compared to the six months ended June 30, 2024 of $280.0, or 78.9% of sales. Cost of sales as a percentage of revenues increased primarily due to lower leverage of fixed costs during the six months ended. 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 decreased by (0.9)% as compared with the six months ended June 30, 2024. Repair & maintenance costs as a percentage of revenues decreased by (4.3)% as compared to the six months ended June 30, 2024, due to lower utilization during the six months ended.

Current wording

Cost of sales. For the nine months ended September 30, 2025, cost of sales were $379.9, or 79.2% of sales, as compared to the nine months ended September 30, 2024 of $422.3, or 77.7% of sales. Cost of sales as a percentage of revenues increased primarily due to lower leverage of fixed costs during the nine months ended. 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 decreased by (0.5)% as compared with the nine months ended September 30, 2024. Repair & maintenance costs as a percentage of revenues increased by 1.1% as compared to the nine months ended September 30, 2024, due to higher cost during the nine months ended.

Previous 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.

Current wording

Selling, general and administrative expenses (“SG&A”). For the nine months ended September 30, 2025, SG&A expenses were $55.2, or 11.5% of revenues, as compared with $62.1, or 11.4% of revenues, in the prior year period. The percentage of revenues has remained the same as SG&A decreased at the same rate as revenues during the nine months ended September 30, 2025.

Previous wording

For the six months ended June 30, 2025, operating loss was $26.4 compared to operating loss of $11.7 in the prior year period, due to a reduction in activity and pricing.

Current wording

For the nine months ended September 30, 2025, operating loss was $28.2 compared to operating loss of $10.6 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 income was $3.1, Southwest segment operating income was $1.3, and Northeast/Mid-Con segment operating loss was $9.4 for the six months ended June 30, 2025.

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 $4.9, Southwest segment operating loss was $2.1, and Northeast/Mid-Con segment operating loss was $2.8 for the nine months ended September 30, 2025.

Previous wording

Income tax expense. For the six months ended June 30, 2025, income tax expense was $0.4, compared to income tax expense of $0.4 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.

Current wording

Income tax expense. For the nine months ended September 30, 2025, income tax expense was $0.6, compared to income tax expense of $0.6 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. For the six months ended June 30, 2025, net loss was $47.8, as compared to net loss of $30.2 in the prior year period, decreasing primarily as a result of lower revenues as discussed above.

Current wording

Net loss. For the nine months ended September 30, 2025, net loss was $62.1, as compared to net loss of $38.4 in the prior year period, decreasing primarily as a result of lower revenues as discussed above.

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 (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.

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 September 30, 2025, we had $8.3 of cash and cash equivalents, and $56.9 available on the New ABL Facility August Borrowing Base Certificate, which resulted in a total liquidity position of $65.2.

Previous wording

We have taken several actions to continue to improve our liquidity position, including efficiencies gained from the QES Merger, equity issuances under our ATM Offering program, debt-for-equity exchanges that have reduced interest burden and monetized non-core and obsolete assets. Most recently, we completed a refinancing of our long-term indebtedness on March 12, 2025, as described in greater detail under “—Refinancing”, “—ABL Facilities—New ABL Facility” and “—Senior Secured Notes—2030 Senior Notes” below. As market conditions warrant and subject to our contractual restrictions, liquidity position and other factors, we may further access the public or private debt and equity markets or seek to recapitalize, refinance or otherwise restructure our capital structure.

Current wording

We have taken several actions to continue to improve our liquidity position, including equity issuances under our ATM Offering program, debt-for-equity exchanges that have reduced interest burden and monetized non-core and obsolete assets. Most recently, we completed a refinancing of our long-term indebtedness on March 12, 2025, as described in greater detail under “—Refinancing”, “—ABL Facilities—New ABL Facility” and “—Senior Secured Notes—2030 Senior Notes” below. As market conditions warrant and subject to our contractual restrictions, liquidity position and other factors, we may further access the public or private debt and equity markets or seek to recapitalize, refinance or otherwise restructure our capital structure.

Previous wording

The 2030 Senior Notes were initially fully and unconditionally guaranteed by each of the Company’s current subsidiaries. The 2030 Senior Notes will also be guaranteed by each of the Company’s future subsidiaries that guarantee the Company’s indebtedness or indebtedness of guarantors, including under the New ABL Facility and such subsidiaries that become guarantors in the future will also pledge their collateral in support of such guarantees. These guarantees are senior secured obligations of the guarantors secured by a first priority security interest on substantially all of the guarantors’ assets (other than collateral securing the New ABL Facility on a first priority basis) and a second priority security interest on the guarantors’ assets which secure the New ABL Facility on a first priority basis, subject in each case to certain excluded assets.

Current wording

The 2030 Senior Notes were initially fully and unconditionally guaranteed by each of the Company’s current subsidiaries. The 2030 Senior Notes will also be guaranteed by each of the Company’s future subsidiaries that guarantee the Company’s indebtedness or indebtedness of guarantors, including under the New ABL Facility (as defined below) and such subsidiaries that become guarantors in the future will also pledge their collateral in support of such guarantees. These guarantees are senior secured obligations of the guarantors secured by a first priority security interest on substantially all of the guarantors’ assets (other than collateral securing the New ABL Facility on a first priority basis) and a second priority security interest on the guarantors’ assets which secure the New ABL Facility on a first priority basis, subject in each case to certain excluded assets.

Previous 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.

Current wording

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. As of September 30, 2025, the Company was in full compliance with its debt covenants under the 2030 Senior Notes Indenture.

Previous 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.

Current wording

As of September 30, 2025, the principal amount outstanding under the 2030 Senior Notes was $241.7. 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 September 30, 2025 was $219.2. The effective interest rate under the 2030 Senior Notes was approximately 12.67% on September 30, 2025. Accrued interest related to the 2030 Senior Notes was $0.8 as of September 30, 2025.

Previous 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.

Current wording

The previously-issued 2025 Senior Notes were redeemed on March 30, 2025 and the related indenture was satisfied and discharged. 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

On March 7, 2025, the Company also entered into a Credit Agreement, dated as of March 7, 2025 (the “New ABL Facility”), with the Company, as borrower, Eclipse Business Capital LLC, as administrative agent, as collateral agent and as FILO administrative agent and the lenders party thereto. The New ABL Facility is comprised of an asset-based revolving credit facility with a $125.0 commitment (the “Revolving Facility”), a first-in-last-out asset-based credit facility with a $10.0 commitment (the “FILO Facility”), and a committed incremental loan option under the Revolving Facility with a $25.0 commitment (the “Incremental Revolving Loans”). The availability of the Incremental Revolving Loans are subject to usual and customary conditions to effectiveness, including, for example, the Company electing to utilize such Incremental Revolving Loans by a date certain and the payment of required fees. Borrowings under the Revolving Facility (including, to the extent incurred, the Incremental Revolving Loans) bear interest at a rate equal to adjusted term SOFR plus an applicable margin of 4.625%. Borrowings under the FILO Facility bear interest at a rate equal to adjusted term SOFR plus an applicable margin of 6.00%. The applicable margin under the Revolving Facility is subject to a 0.125% reduction and the applicable margin under the FILO Facility is subject to a 0.50% reduction, in each case upon the repayment in full of a $5.0 over-advance provided on the initial funding date under the Revolving Facility. The New ABL Facility is secured by, among other things, a first priority lien on accounts receivable and inventory and contains customary conditions precedent to borrowing and affirmative and negative covenants.

Current wording

On March 7, 2025, the Company entered into a Credit Agreement, dated as of March 7, 2025 (the “New ABL Facility”), with the Company, as borrower, Eclipse Business Capital LLC, as administrative agent, as collateral agent and as FILO administrative agent and the lenders party thereto. The New ABL Facility is comprised of an asset-based revolving credit facility with a $125.0 commitment (the “Revolving Facility”), a first-in-last-out asset-based credit facility with a $10.0 commitment (the “FILO Facility”), and a committed incremental loan option under the Revolving Facility with a $25.0 commitment (the “Incremental Revolving Loans”). The availability of the Incremental Revolving Loans are subject to usual and customary conditions to effectiveness, including, for example, the Company electing to utilize such Incremental Revolving Loans by a date certain and the payment of required fees. Borrowings under the Revolving Facility (including, to the extent incurred, the Incremental Revolving Loans) bear interest at a rate equal to adjusted term SOFR plus an applicable margin of 4.625%. Borrowings under the FILO Facility bear interest at a rate equal to adjusted term SOFR plus an applicable margin of 6.00%. The applicable margin under the Revolving Facility is subject to a 0.125% reduction and the applicable margin under the FILO Facility is subject to a 0.50% reduction, in each case upon the repayment in full of a $5.0 over-advance provided on the initial funding date under the Revolving Facility. The New ABL Facility is secured by, among other things, a first priority lien on accounts receivable and inventory and contains customary conditions precedent to borrowing and affirmative and negative covenants.

Previous wording

The initial funding under the New ABL Facility occurred on March 12, 2025, and the proceeds therefrom were used to repay the Prior ABL Facility in full. After giving effect to the foregoing, we had approximately $39.9 of available borrowing capacity under the New ABL Facility. The New ABL Facility includes a springing financial covenant which requires the Company’s consolidated fixed charge coverage ratio to be at least 1.0 to 1.0 if availability under the Revolving Facility falls below $7.0.

Current wording

The initial funding under the New ABL Facility occurred on March 12, 2025, and the proceeds therefrom were used to repay the Prior ABL Facility in full. After giving effect to the foregoing, we had approximately $39.9 of available borrowing capacity under the New ABL Facility. Our New ABL Facility matures in 2028.

Previous wording

The New ABL Facility includes financial, operating and negative covenants that limit our ability to incur indebtedness, to create liens or other encumbrances, to make certain payments and investments, including dividend payments, to engage in transactions with affiliates, to engage in sale/leaseback transactions, to guarantee indebtedness and to sell or otherwise dispose of assets and merge or consolidate with other entities. It also includes a covenant to deliver annual audited financial statements that are not qualified by a “going concern” or like qualification or exception. A failure to comply with the obligations contained in the New ABL Facility could result in an event of default, which could permit acceleration of the debt, termination of undrawn commitments and enforcement against any liens securing the debt. The New ABL Facility contains certain other covenants (including the ability to incur indebtedness for the purpose of consummating permitted acquisitions, subject to the terms of the New ABL Facility), events of default and other customary provisions. Our New ABL Facility matures in 2028.

Current wording

The New ABL Facility includes a springing financial covenant which requires the Company’s consolidated fixed charge coverage ratio to be at least 1.0 to 1.0 if availability under the Revolving Facility falls below $7.0. The New ABL Facility includes financial, operating and negative covenants that limit our ability to incur indebtedness, to create liens or other encumbrances, to make certain payments and investments, including dividend payments, to engage in transactions with affiliates, to engage in sale/leaseback transactions, to guarantee indebtedness and to sell or otherwise dispose of assets and merge or consolidate with other entities. It also includes a covenant to deliver annual audited financial statements that are not qualified by a “going concern” or like qualification or exception. A failure to comply with the obligations contained in the New ABL Facility could result in an event of default, which could permit acceleration of the debt, termination of undrawn commitments and enforcement against any liens securing the debt. The New ABL Facility contains certain other covenants (including the ability to incur indebtedness for the purpose of consummating permitted acquisitions, subject to the terms of the New ABL Facility), events of default and other customary provisions. As of September 30, 2025, the Company was in full compliance with its debt covenants under the New ABL Facility.

Previous 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.

Current wording

As of September 30, 2025, the borrowings outstanding under the New ABL Facility were $40.0. The effective interest rate under the New ABL Facility was approximately 9.02% on September 30, 2025. Accrued interest related to the New ABL Facility was $0.4 as of September 30, 2025.

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). 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.

Current wording

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. As of December 31, 2024, $50.0 was outstanding under the Prior ABL Facility and the effective interest rate under the Prior ABL Facility was approximately 7.44%.

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 $6.2 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.

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 $5.6 at September 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, none of the restricted cash remains restricted.

Previous 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.

Current wording

As of September 30, 2025, the Company had $2.9 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 $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.

Current wording

Our capital expenditures were $39.7 during the nine months ended September 30, 2025, compared to $49.8 in the nine months ended September 30, 2024. We offset $10.6 of capital spending during the nine months ended September 30, 2025 with the same amount of proceeds from asset sales and other proceeds. Based on current industry conditions and our significant investments in capital expenditures over the past several years, we expect to incur between $42.5 and $47.5 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

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 of 1933, as amended (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.

Previous 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.

Current wording

During the three and nine months ended September 30, 2025, the Company sold — and 167,769 shares of Common Stock, respectively, in exchange for gross proceeds of approximately $— and $0.6, respectively, and incurred legal and administrative fees of $0.1 and $0.3, respectively.

Previous 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.

Current wording

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

Previous 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.

Current wording

Our cash flows used in operating activities for the nine months ended September 30, 2025 were approximately $5.0 as compared to approximately $28.2 provided by operating activities for the nine months ended September 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 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.

Current wording

At September 30, 2025, we had $8.3 of cash and cash equivalents and $0.1 of restricted cash. Cash on hand at September 30, 2025 decreased by $83.2, as a result of $5.0 of cash flows used in operating activities, $29.1 of cash flows used in investing activities and $49.1 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.

Previous 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.

Current wording

Net cash used in operating activities was $5.0 for the nine months ended September 30, 2025, as compared to net cash provided by operating activities of $28.2 for the nine months ended September 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 $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.

Current wording

Net cash used in investing activities was $29.1 for the nine months ended September 30, 2025, as compared to net cash used in investing activities of $40.6 for the nine months ended September 30, 2024. The cash flows used in investing activities for the nine months ended September 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 $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.

Current wording

Net cash used in financing activities was $49.1 for the nine months ended September 30, 2025, compared to net cash used in financing activities of $17.4 for the nine months ended September 30, 2024. We refinanced both our 2025 Senior Notes and Prior ABL Facility during the nine months ended September 30, 2025, which brought additional cash outlays. We also restarted sales under our ATM Offering program, which generated gross proceeds of $0.6 during the nine months ended September 30, 2025.

Previous wording

We believe Adjusted EBITDA is useful because it allows us to supplement the GAAP measures in order to evaluate our operating performance and compare the results of our operations from period to period without regard to our financing methods or capital structure. We exclude the items listed above in arriving at Adjusted EBITDA (Loss) because these amounts can vary substantially from company to company within our industry depending upon accounting methods, book values of assets, capital structures and the method by which the assets were acquired. Adjusted EBITDA should not be considered as an alternative to, or more meaningful than, net (loss) earnings as determined in accordance with GAAP, or as an indicator of our operating performance or liquidity. 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 computations of Adjusted EBITDA may not be comparable to other similarly titled measures of other companies.

Current wording

We believe Adjusted EBITDA is useful because it allows us to supplement the GAAP measures in order to evaluate our operating performance and compare the results of our operations from period to period without regard to our financing methods or capital structure. We exclude the items listed above in arriving at Adjusted EBITDA (Loss) because these amounts can vary substantially from company to company within our industry depending upon accounting methods, book values of assets, capital structures and the method by which the assets were acquired. Adjusted EBITDA should not be considered as an alternative to, or more meaningful than, net (loss) earnings as determined in accordance with GAAP, or as an indicator of our operating performance or liquidity. 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