KLX Energy Services Holdings, Inc.
For the period ended Jun 30, 2026. Filed Aug 11, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Aug 11, 2026
KLXE$1.00+4.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-13.
0001738827-26-000021
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-11.
0001738827-26-000032
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 102 previous paragraphs and 121 current paragraphs.
69 unchanged; 30 reworded; 16 added; 3 removed; 0 previous and 6 current paragraphs rearranged.
Tables are not compared: 4 previous and 7 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (16)
Current report
On June 2, 2026 (the “Closing Date”), KLXE completed the acquisition of certain assets owned by Wolf Pack Rentals, LLC (the “Wolf Pack Acquisition”). The purchase price for the Wolf Pack Acquisition is $16.9, subject to customary post-closing adjustments and to be paid as follows: (i) on the Closing Date, the Buyer paid the Seller $14.1; (ii) two deferred payments of $1.5 each, to be paid at 180 and 360 days after the Closing Date, either in cash or shares of common stock, par value $0.01 per share, of the Company (the “Common Stock”), in its sole discretion, with a net present value of $2.7; and (iii) estimated post-closing adjustment to the purchase price of $0.1.
Current report
Looking ahead to the year ending December 31, 2026, 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, 2026, WTI prices have increased when the conflict with Iran intensified and have decreased when the conflict deescalated. Although we expect this dynamic to hold for the foreseeable future, it is difficult to anticipate future changes in price. 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.
Current report
Results of Operations
Current report
Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025
Current report
Selling, general and administrative expenses (“SG&A”). For the six months ended June 30, 2026, SG&A expenses were $34.4, or 11.0% of revenues, as compared with $39.6, or 12.7% of revenues, in the prior year period. The decrease in percentage of revenues is due to SG&A decreasing at a higher rate than revenues compared to the six months ended June 30, 2025.
Current report
For the six months ended June 30, 2026, operating loss was $10.0 compared to operating loss of $25.2 in the prior year period, due to a reduction in activity and pricing.
Current report
Income tax (benefit) expense. For the six months ended June 30, 2026, income tax benefit was $1.5, compared to income tax expense of $0.4 in the prior year period, with the change primarily due to a deferred tax benefit recognized from the reduction in the valuation allowance, offset by 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 report
Net loss. For the six months ended June 30, 2026, net loss was $32.4, as compared to net loss of $47.8 in the prior year period, improving primarily as a result of improvements in profitability in the Northeast/Mid-Con and Corporate.
Current report
During the second quarter of 2026, the Company entered into debt-for-equity exchange agreements (the “Exchange Agreements” and each, an “Exchange Agreement”) with certain holders (the “Noteholders”) of the 2030 Senior Notes. Pursuant to the Exchange Agreements, the Noteholders exchanged $2.2 in aggregate principal amount of the Company’s outstanding Notes for an aggregate of 627,521 shares of Common Stock.
Current report
In connection with the Rights Offering (as described above), substantially concurrently with the closing of the Backstop Exchange, the Company, the subsidiaries party thereto, as guarantors, and U.S. Bank Trust Company, National Association, as trustee and notes collateral agent, will enter into the A&R Indenture (as defined above). The A&R Indenture will amend and restate in its entirety the 2030 Senior Notes Indenture. The 2030 Senior Notes will remain guaranteed and secured on substantially the same terms other than as described below. For additional information, see “Note 13 - Subsequent Events” above.
Current report
Net cash provided by operating activities was $10.8 for the six months ended June 30, 2026, as compared to net cash used in operating activities of $18.5 for the six months ended June 30, 2025. The positive operating cash flows were attributable to improvements in working capital requirements in the current year.
Current report
Business Combinations
Current report
We completed the Wolf Pack Acquisition on June 2, 2026. Wolf Pack’s results of operations have been included in our financial results for the period subsequent to the acquisition date.
Current report
Under the acquisition method of accounting, we allocate the fair value of purchase consideration transferred to the tangible assets and intangible assets acquired, if any, and liabilities assumed based on their estimated fair values on the date of the acquisition. The fair values assigned, defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between willing market participants, are based on estimates and assumptions determined by management. The estimated fair value of the assets acquired, net of liabilities assumed, exceeds the purchase consideration, resulting in a bargain purchase gain.
Current report
When determining the fair value of assets acquired and liabilities assumed, we make significant estimates and assumptions. Our estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates.
Current report
During the measurement period, not to exceed one year from the date of acquisition, we may record adjustments to the assets acquired and liabilities assumed, with a corresponding offset to bargain purchase gain if new information is obtained related to facts and circumstances that existed as of the acquisition date. After the measurement period, any subsequent adjustments are reflected in the consolidated statements of operations. Acquisition costs, such as legal and consulting fees, are expensed as incurred.
Removed paragraphs (3)
Previous report
Despite the volatility in commodity prices during the fiscal year ended December 31, 2025, the Company remains focused on providing the highest level of customer service across our regions and different service offerings, which has allowed us to make meaningful positive impacts to our revenue, operating margins, cash flows and Adjusted EBITDA (as defined below). We are taking steps to hire essential personnel and increase capital expenditures as activity rebounds, but we are measured in our growth and focused on returns.
Previous report
Looking ahead to the year ending December 31, 2026, 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, 2026, WTI prices have increased markedly in March and April, after the start of the ongoing conflict with Iran. Still, the increase has not been stable, as news from the region drives large changes to WTI prices on a daily basis. Currently, it is difficult to try and estimate the future direction of WTI prices or global oil inventories, or whether our customers will meaningfully increase planned drilling this year if there continues to be significant uncertainty on the duration of the conflict and increase in oil prices.
Previous report
Net cash provided by operating activities was $0.3 for the three months ended March 31, 2026, as compared to net cash used in operating activities of $37.6 for the three months ended March 31, 2025. The improvement in operating cash flows was attributable to management of working capital and an increase in days payable outstanding.
Reworded paragraphs (30)
Previous wording
The following discussion and analysis addresses the results of our operations for the three months ended March 31, 2026, as compared to our results of operations for the three months ended March 31, 2025. 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, 2026, as compared to our results of operations for the three and six months ended June 30, 2025. In addition, the discussion and analysis addresses our liquidity, financial condition and other matters for these periods.
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 22.0%, to $72.74 per Bbl during the three months ended March 31, 2026, compared to the WTI average daily price per barrel of $59.62 per Bbl during the three months ended December 31, 2025. However, these average prices conceal extremes reached within the first quarter of 2026, with early January lows near $56 per Bbl and late March highs at almost $105 per Bbl, in the run-up to the ongoing conflict with Iran. As of March 31, 2026, U.S. land rig count stood at 530, which increased slightly compared to December 31, 2025, when the U.S. land rig count was 527. So far in 2026, 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.
Current wording
Demand for services in the oil and natural gas industry is cyclical and subject to sudden and significant volatility. So far in 2026, 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 48.1%, to $95.65 per Bbl during the three months ended June 30, 2026, compared to the WTI average daily price per barrel of $64.57 per Bbl during the three months ended June 30, 2025. Prices during the quarter were volatile, swinging between $70.30 at their lowest and $114.58 at their highest. As of June 30, 2026, U.S. land rig count stood at 561, which is an increase of 5.8% compared to the rig count at the prior quarter-end of 530 and an increase of 6.5% compared to December 31, 2025, when the U.S. land rig count was 527.
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, the conflict with Iran, conditions in South America, including most recently in Venezuela, international sanctions, speculation as to future actions by the Organization of the Petroleum Exporting Countries and its allies, 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, 2026, cost of sales were $119.1, or 82.3% of sales, as compared to the three months ended March 31, 2025 of $123.8, or 80.4% of sales. Cost of sales as a percentage of revenues increased primarily due to lower revenues 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 0.6% as compared with the three months ended March 31, 2025. Repair & maintenance costs as a percentage of revenues increased by 7.3% as compared to the three months ended March 31, 2025, due to an increase in repair & maintenance costs during the quarter.
Current wording
Cost of sales. For the quarter ended June 30, 2026, cost of sales were $130.9, or 78.2% of sales, as compared to the three months ended June 30, 2025 of $125.6, or 79.0% 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 increased, labor costs per employee increased by 5.7% as compared with the three months ended June 30, 2025. Repair & maintenance costs as a percentage of revenues decreased by 9.0% as compared to the three months ended June 30, 2025, due to the higher pricing during the quarter.
Previous wording
Selling, general and administrative expenses (“SG&A”). For the quarter ended March 31, 2026, SG&A expenses were $15.4, or 10.6% of revenues, as compared with $21.6, or 14.0% of revenues, in the prior year period. The decreases on a dollar basis and in percentage of revenues are the result of continuous efforts to reduce costs and improve efficiency.
Current wording
Selling, general and administrative expenses (“SG&A”). For the quarter ended June 30, 2026, SG&A expenses were $19.0, or 11.4% of revenues, as compared with $18.0, or 11.3% of revenues, in the prior year period. SG&A expenses decreased slightly while revenues increased during the quarter, which caused the percentage of revenues to improve compared to the three months ended June 30, 2025.
Previous wording
For the quarter ended March 31, 2026, operating loss was $12.1 compared to operating loss of $17.7 in the prior year period, due to lower Corporate and other operating costs.
Current wording
For the quarter ended June 30, 2026, operating income was $2.1 compared to operating loss of $8.7 in the prior year period, due to an increase 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 $3.8, Southwest segment operating loss was $3.4, and Northeast/Mid-Con segment operating income was $3.0 for the three months ended March 31, 2026.
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 $0.2, Southwest segment operating income was $0.2, and Northeast/Mid-Con segment operating income was $5.1 for the three months ended June 30, 2026.
Previous wording
Income tax expense. For the quarter ended March 31, 2026, 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 (benefit) expense. For the quarter ended June 30, 2026, income tax benefit was $1.7, as compared to income tax expense of $0.2 in the prior year period, with the change primarily due to a deferred tax benefit recognized from the reduction in the valuation allowance, offset by 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 quarter ended March 31, 2026, net loss was $24.0, as compared to net loss of $27.9 in the prior year period, improving primarily as a result of lower operating costs as discussed above.
Current wording
Net loss. For the quarter ended June 30, 2026, net loss was $8.4, as compared to net loss of $19.9 in the prior year period, improving primarily as a result of higher leverage of fixed costs as discussed above.
Previous wording
For the quarter ended March 31, 2026, revenues were $144.7, a decrease of $9.3, or 6.0%, 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 67% of the $9.3 decrease, and lower weighted average volume contributed to the remaining approximately 33%. On a segment basis, Rocky Mountains segment revenue decreased by $9.2 or 19.2%. 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 $11.6 or 17.8%. Lower weighted average price contributed to approximately 97% of the dollar decrease, and lower weighted average volume contributed to the remaining approximately 3%. Northeast/Mid-Con segment revenue increased by $11.5 or 28.0%. Higher weighted average price contributed to approximately 80% of the dollar decrease, and higher weighted average volume contributed to the remaining approximately 20%.
Current wording
For the six months ended June 30, 2026, revenues were $312.0, a decrease of $1.0, or 0.3%, as compared with the prior year period. The overall decrease in revenues reflects a slight decline in activity during the six months ended, leading to lower demand for our services. Lower weighted average price contributed to approximately all of the $1.0 decrease. On a segment basis, Rocky Mountains segment revenue decreased by $12.5 or 12.3%. This decrease was driven predominantly by a decrease in weighted average price. Southwest segment revenue decreased by $5.9 or 4.8%. Lower weighted average price contributed to approximately 71% of the decrease, and lower weighted average volume contributed to the remaining approximately 29%. Northeast/Mid-Con segment revenue increased by $17.4 or 20.0%. Higher weighted average price contributed to approximately 51% of the dollar increase, and higher 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 our Prior ABL Facility and 2028 ABL Facility and cash flows from operations. At March 31, 2026, we had $5.6 of cash and cash equivalents and $42.1 of available capacity under the 2028 ABL Facility.
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 2028 ABL Facility (as defined below) and cash flows from operations. At June 30, 2026, we had $7.9 of cash and cash equivalents, and $45.4 available capacity under the 2028 ABL Facility.
Previous 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 monetization of non-core and obsolete assets. Recently, we completed a refinancing of our long-term indebtedness on March 12, 2025, as described in greater detail under “—Refinancing”, “—ABL Facilities—2028 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, sell non-core assets 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 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—2028 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. On August 6, 2026, our Board approved a backstopped Rights Offering expected to result in gross proceeds of up to $125.0 and a $94.0 reduction in the outstanding principal amount of the 2030 Senior Notes. The Company intends to use any net cash proceeds it receives in connection with the Rights Offering up to $31.0 for general corporate purposes, and for any amounts over $31.0, the Company intends to repurchase 2030 Senior Notes at par, which is permitted under the Backstop Agreement. For additional information, see “Note 13 - Subsequent Events” above.
Previous wording
Our 2028 ABL Facility matures on March 7, 2028 and we intend to work with our existing lenders or other sources of capital to refinance the 2028 ABL Facility as well as our 2030 Senior Notes. If we are unable to refinance the 2028 ABL Facility as planned and uncertainty around our ability to refinance our existing long-term debt still exists, that could result in our auditors issuing a “going concern” or like qualification or exception as early as our audit opinion with respect to the fiscal year ending December 31, 2026.
Current wording
Our 2028 ABL Facility matures on March 7, 2028 and we intend to work with our existing lenders or other sources of capital to refinance the 2028 ABL Facility.
Previous wording
In light of our substantial leverage position, as market conditions warrant and subject to our contractual restrictions, liquidity position and other factors, we are evaluating several alternatives for deleveraging including debt for equity exchanges, non-core asset sales or other potential transactions to recapitalize, refinance or otherwise restructure our capital structure. Some of these alternatives may require the consent of current lenders, stockholders or Investors, and there is no assurance that we will be able to execute any of these alternatives on acceptable terms or at all.
Current wording
In light of our substantial leverage position, as market conditions warrant and subject to our contractual restrictions, liquidity position and other factors, we have evaluated several alternatives for deleveraging including debt for equity exchanges, non-core asset sales or other potential transactions to recapitalize, refinance or otherwise restructure our capital structure and our Board has determined to move forward with the Rights Offering described above. For risks associated with the Rights Offering, please see “Part II. Item 1A Risk Factors-Risks Related to the Rights Offering” below.
Previous wording
We actively manage our capital spending and are focused primarily on required maintenance spending. For the past couple of years, due to increasing oil prices leading to an increase in demand for our services, our operating cash flow has been positive. Based on our current forecasts, we believe our cash on hand, availability under the 2028 ABL Facility and our cash flows will provide us with the ability to fund our operations for at least the next twelve months.
Current wording
We actively manage our capital spending and are focused primarily on required maintenance spending. For the past couple of years, due to increasing oil prices leading to an increase in demand for our services, our operating cash flow has been positive. Based on our current forecasts, we believe our cash on hand, availability under the New ABL Facility and our cash flows will provide us with the ability to fund our operations for at least the next twelve months.
Previous wording
On March 7, 2025, the Company and certain of our subsidiaries party thereto entered into a Securities Purchase Agreement with certain holders (the “Investors”) of our 2025 Senior Notes, pursuant to which the Company agreed to issue and sell to the Investors (a) approximately $232.2 in aggregate principal amount of the 2030 Senior Notes and (b) warrants entitling the Investors thereof to purchase, in the aggregate, up to 2,373,187 shares of Common Stock, at an exercise price of $0.01 per share, subject to adjustment in exchange for (i) approximately $78.4 in aggregate cash consideration and (ii) approximately $143.6 aggregate principal amount of the 2025 Senior Notes, which were cancelled by the Company upon receipt thereof (collectively, the “Refinancing”). The Company consummated the Refinancing on March 12, 2025.
Current wording
On March 7, 2025, the Company and certain of our subsidiaries party thereto entered into a Securities Purchase Agreement with certain holders (the “Investors”) of our 11.5% senior secured notes due 2025 (the “2025 Senior Notes”), pursuant to which the Company agreed to issue and sell to the Investors (a) approximately $232.2 in aggregate principal amount of the Senior Secured Floating Rate Cash / PIK Notes due 2030 (the “2030 Senior Notes” and, together with the 2025 Senior Notes, the “Senior Secured Notes”) and (b) warrants entitling the holders thereof to purchase, in the aggregate, up to 2,373,187 shares of Common Stock, at an exercise price of $0.01 per share, subject to adjustment in exchange for (i) approximately $78.4 in aggregate cash consideration and (ii) approximately $143.6 aggregate principal amount of the 2025 Senior Notes, which were cancelled by the Company upon receipt thereof (collectively, the “Refinancing”). The Company consummated the Refinancing on March 12, 2025.
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 ended 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
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 ended 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) 7.00% of revenues during such test period.
Previous wording
On March 6, 2026, the requisite Investors agreed to execute the First Amendment to the Indenture to provide financial covenant relief in the form of (i) extending the period for which the maximum total net leverage ratio covenant is tested at 4.50 to 1.0 through and including the testing period ending March 31, 2027, stepping down to 3.50 to 1.0 for the testing periods ending June 30, 2027 through and including March 31, 2028, to 3.00 to 1.0 for the testing periods ending June 30, 2028 through and including March 31, 2029, and to 2.50 to 1.0 for the testing periods ending June 30, 2029 and thereafter, (ii) a temporary holiday to exclude capital lease obligations as indebtedness for the purposes of determining compliance with the maximum total net leverage ratio covenant for the testing periods ending December 31, 2025 through and including March 31, 2027 and (iii) clarifying that proceeds from our ATM Offering program may be applied as an equity cure. The First Amendment to the Indenture also establishes additional debt and lien baskets to permit the issuance of letters of credit by third parties for the Company’s account in favor of insurers in connection with a $6.7 substitute insurance collateral facility. As of March 31, 2026, the Company was in compliance with its financial covenants under the 2030 Senior Notes.
Current wording
On March 6, 2026, the requisite Investors agreed to execute the First Amendment to the Indenture to provide financial covenant relief in the form of (i) extending the period for which the maximum total net leverage ratio covenant is tested at 4.50 to 1.0 through and including the testing period ending March 31, 2027, stepping down to 3.50 to 1.0 for the testing periods ending June 30, 2027 through and including March 31, 2028, to 3.00 to 1.0 for the testing periods ending June 30, 2028 through and including March 31, 2029, and to 2.50 to 1.0 for the testing periods ending June 30, 2029 and thereafter, (ii) a temporary holiday to exclude capital lease obligations as indebtedness for the purposes of determining compliance with the maximum total net leverage ratio covenant for the testing periods ending December 31, 2025 through and including March 31,
Previous wording
As of March 31, 2026, the principal amount outstanding under the 2030 Senior Notes was $249.5. On a net basis, after taking into consideration unamortized debt issuance costs and issue discount for the 2030 Senior Notes, total debt related to the 2030 Senior Notes as of March 31, 2026 was $226.8. The effective interest rate under the 2030 Senior Notes was approximately 12.18% on March 31, 2026. Accrued interest related to the 2030 Senior Notes was $— as of March 31, 2026 and $— as of December 31, 2025.
Current wording
As of June 30, 2026, the principal amount outstanding under the 2030 Senior Notes was $254.3. On a net basis, after taking into consideration unamortized debt issuance costs and issue discount for the 2030 Senior Notes, total debt related to the 2030 Senior Notes as of June 30, 2026 was $232.9. The effective interest rate under the 2030 Senior Notes was approximately 12.12% on June 30, 2026. Accrued interest related to the 2030 Senior Notes was $— as of June 30, 2026 and $— as of December 31, 2025.
Previous wording
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 2028 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
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 0.500% 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 2028 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
As of March 31, 2026, the borrowings outstanding under the 2028 ABL Facility were $49.0. The effective interest rate under the 2028 ABL Facility was approximately 8.41% on March 31, 2026. Accrued interest related to the 2028 ABL Facility was $0.4 as of March 31, 2026 and $0.4 as of December 31, 2025.
Current wording
As of June 30, 2026, the borrowings outstanding under the 2028 ABL Facility were $56.0. The effective interest rate under the 2028 ABL Facility was approximately 8.36% on June 30, 2026. Accrued interest related to the 2028 ABL Facility was $0.5 as of June 30, 2026 and $0.4 as of December 31, 2025.
Previous wording
Our capital expenditures were $8.7 during the three months ended March 31, 2026, compared to $15.0 in the three months ended March 31, 2025. We offset $3.4 of capital spending during the three months ended March 31, 2026 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 approximately $40.0 in total capital expenditures for the year ending December 31, 2026. 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 $17.3 during the six months ended June 30, 2026, compared to $27.7 in the six months ended June 30, 2025. We offset $5.6 of capital spending during the six months ended June 30, 2026 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 approximately $40.0 in total capital expenditures for the year ending December 31, 2026. 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”) 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 $57.8 (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 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
Any Common Stock offered and sold in the ATM Offering may be issued pursuant to the Company’s shelf registration statement on Form S-3 (Registration No. 333-271182) filed with the SEC on April 7, 2023 and declared effective on April 19, 2023 (the “Registration Statement”), the prospectus supplement relating to the ATM Offering filed with the SEC on March 14, 2025 and any applicable additional prospectus supplements related to the ATM Offering that form a part of the Registration Statement. Sales of Common Stock under the Equity Distribution Agreement may be made in any transactions that are deemed to be “at the market offerings” as defined in Rule 415 under the Securities Act. The Registration Statement expired on April 19, 2026 pursuant to Rule 415(a)(5) under the Securities Act. Sales under the ATM Offering program may restart when and if the Company files a prospectus supplement under a successor registration statement.
Current wording
Common Stock offered and sold in the ATM Offering was issued pursuant to the Registration Statement, the prospectus supplement relating to the ATM Offering filed with the SEC on March 14, 2025 and any applicable additional prospectus supplements related to the ATM Offering that formed a part of the Registration Statement. Sales of Common Stock under the Equity Distribution Agreement were made in transactions that are deemed to be “at the market offerings” as defined in Rule 415 under the Securities Act. The Registration Statement expired on April 19, 2026 pursuant to Rule 415(a)(5) under the Securities Act. Sales under the ATM Offering program may restart when and if the Company files a prospectus supplement under a successor registration statement.
Previous wording
During the three months ended March 31, 2026, the Company did not sell any shares of Common Stock and incurred legal and administrative fees of $0.0.
Current wording
During the three and six months ended June 30, 2026, the Company did not sell any shares of Common Stock and incurred legal and administrative fees of $0.2 and $0.2, respectively.
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
Our cash flows provided by operating activities for the three months ended March 31, 2026 were approximately $0.3 as compared to approximately $37.6 used in operating activities for the three months ended March 31, 2025. 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, 2026 were approximately $10.8 as compared to approximately $18.5 used in operating activities for the six months ended June 30, 2025. 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, 2026, we had $5.6 of cash and cash equivalents. Cash on hand at March 31, 2026 decreased by $0.1, as a result of $0.3 of cash flows provided by operating activities, $5.3 of cash flows used in investing activities and $4.9 provided by 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, 2026, we had $7.9 of cash and cash equivalents. Cash on hand at June 30, 2026 increased by $2.2, as a result of $10.8 of cash flows provided by operating activities, $25.2 of cash flows used in investing activities and $16.6 provided by 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 investing activities was $5.3 for the three months ended March 31, 2026, as compared to net cash used in investing activities of $10.2 for the three months ended March 31, 2025. The cash flows used in investing activities for the three months ended March 31, 2026 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 $25.2 for the six months ended June 30, 2026, as compared to net cash used in investing activities of $21.3 for the six months ended June 30, 2025. Outside of the cash paid for the Wolf Pack Acquisition, the cash flows used in investing activities for the six months ended June 30, 2026 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 provided by financing activities was $4.9 for the three months ended March 31, 2026, compared to net cash used in financing activities of $21.1 for the three months ended March 31, 2025. In the prior year, we refinanced both our 2025 Senior Notes and Prior ABL Facility, which brought additional cash outlays.
Current wording
Net cash provided by financing activities was $16.6 for the six months ended June 30, 2026, compared to net cash used in financing activities of $34.5 for the six months ended June 30, 2025. We refinanced both our 2025 Senior Notes and Prior ABL Facility during the six months ended June 30, 2025, which brought additional cash outlays in the prior year.
Rearranged current paragraphs (6)
Current report — wording carried from elsewhere
For the quarter ended June 30, 2026, revenues were $167.3, an increase of $8.3, or 5.2%, as compared with the prior year period. The overall increase in revenues reflects an increase in activity during the quarter, leading to higher demand for our services. Higher weighted average volume contributed to approximately all of the $8.3 increase. On a segment basis, Rocky Mountains segment revenue decreased by $3.3 or 6.1%. Lower weighted average volume contributed to approximately all of the dollar decrease. Southwest segment revenue increased by $5.7 or 9.7%. Higher weighted average price contributed to approximately 22% of the dollar increase, and higher weighted average volume contributed to the remaining approximately 78%. Northeast/Mid-Con segment revenue increased by $5.9 or 12.8%. Higher weighted average volume contributed to approximately all of the dollar increase.
Current report — wording carried from elsewhere
Revenue. The following is a summary of revenue by segment and product line for the periods indicated:
Current report — wording carried from elsewhere
Cost of sales. For the six months ended June 30, 2026, cost of sales were $250.0, or 80.1% of sales, as compared to the six months ended June 30, 2025 of $249.4, or 79.7% 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 increased by 3.3% as compared with the six months ended June 30, 2025. Repair & maintenance costs as a percentage of revenues decreased by (1.5)% as compared to the six months ended June 30, 2025, due to lower utilization during the six months ended.
Current report — wording carried from elsewhere
Operating (loss) income. The following is a summary of operating (loss) income by segment:
Current report — wording carried from elsewhere
The operating results across our three geographic segments were mixed compared to the prior year period. Rocky Mountains segment operating loss was $3.6, Southwest segment operating loss was $3.2, and Northeast/Mid-Con segment operating income was $8.1 for the six months ended June 30, 2026.
Current report — wording carried from elsewhere
2027 and (iii) clarifying that proceeds from our ATM Offering program may be applied as an equity cure. The First Amendment to the Indenture also establishes additional debt and lien baskets to permit the issuance of letters of credit by third parties for the Company’s account in favor of insurers in connection with a $6.7 substitute insurance collateral facility. As of June 30, 2026, the Company was in compliance with its financial covenants under the 2030 Senior Notes.