KLXE 10-K & 10-Q changes, risk factors and insider trading

Our revenues are generated primarily from customers who are engaged in drilling for and production of oil and natural gas. Demand for services in the oil and natural gas industry is cyclical and subject to sudden and significant volatility, and we depend on our customers’ willingness to make capital and operating expenditures to explore for, develop and produce oil and natural gas in the United States. The oil and gas industry experienced significant increases in activity in late 2021 and 2022 due to the recovery from the COVID-19 pandemicpandemic. and increasing demand for oil and gas. Average oilOil prices and natural gas prices and activity subsequently decreasedmoderated in 2023 and 2024 comparedand declined further in 2025 due to 2022,increased global supply, softer demand growth and broader macroeconomic uncertainty, with averagefurther oilprice prices and activity stabilizingdecreases in lateearly 20232026. andU.S. natural gas prices continuingdeclined materially in 2023 and reached multi-year lows in 2024 due to decreasestrong throughdomestic theproduction, endelevated ofstorage 2024.levels and relatively mild weather. During 2025, natural gas prices have begun to slowly recover, supported by production curtailments, incremental LNG export capacity and seasonal demand, although prices have remained volatile into early 2026. Oil and natural gas prices have been, and may remain, volatile, which impacts demand for our business. However, an unexpected slowdown in economic activity may result in lower capital expenditures, project modifications, delays or cancellations, general business disruptions, and delays in payment of, or nonpayment of, amounts that are owed to us, which could have a material adverse effect on our financial condition, results of operations and cash flows.

The demand for our services is primarily determined by current and anticipated oil and natural gas prices and the related levels of capital spending and drilling activity in the areas in which we have operations. Volatility or weakness in oil prices or natural gas prices (or the perception that oil prices or natural gas prices will decrease) affects the spending patterns of our customers and may result in the drilling of fewer new wells. This, in turn, could lead to lower demand for our services and may cause lower utilization of our assets. We have experienced, and may in the future experience, significant fluctuations in operating results as a result of the reactions of our customers to changes in oil and natural gas prices.

Historically, prices for oil and natural gas have been extremely volatile and are expected to continue to be volatile. During the past five years, West Texas Intermediate (“WTI”) has ranged from a low of $(36.98)$47.47 per barrel (“Bbl”) in AprilJanuary 20202021 to a high of $123.64 per Bbl in March 2022. As of December 31, 2024,2025, WTI closed at $72.44$57.26 per Bbl, a 0.8%21.0% increasedecrease compared to the closing price of WTI on December 31, 2023.2024. On February 3,2, 2025,2026, WTI closed at $73.52$61.60 per Bbl.

Significant factors that are likely to affect commodity prices in current and future periods include, but are not limited to, price reductions or increased production by OPEC members and other oil exporting nations, the effect of U.S. energy, monetary and trade policies, U.S. and global economic conditions, U.S. and global political and economic developments, including initiatives introduced by the Trump Administration and resulting energy and environmental policies, war or other military conflict, including the continuing conflict between Russia and Ukraine, conditions in the Middle East and South America, including most recently in Iran and Venezuela, and conditions in the U.S. oil and gas industry and the resulting demand for domestic land oilfield services.

Although crude oil prices have increased sinceafter the worst impacts of the COVID-19 pandemic, drilling activity in the industryUnited States has stillremained notwell fullybelow recovered,pre-pandemic levels for much of the recovery period. Active U.S. oil rigs—which peaked above pre-pandemic levels during earlier phases of the recovery—declined through 2023 and is2024 currentlyas stilloperators atfocused aon capital discipline and efficiency gains, and have stayed materially lower in 2025 and early 2026, with the active oil rig count thangenerally beforenear the COVID-19low-to-mid pandemic.400s compared to higher counts earlier in the decade. Natural gas rig activity similarly has not returned to pre-pandemic drilling intensity, even as gas rigs have risen from their 2023 lows. We cannot assure you these conditions will not continue to exist throughout 2025. The risks associated with our business are more acute during periods of economic slowdown or recession because such periods may be accompanied by decreased spending by our customers. A prolonged period of economic slowdown and/or recession in the United States, particularly if coupled with a prolonged slowdown in the E&P industry, would materially and adversely impact our business, financial condition and results of operations.

Our results have been, and in the future may be, impacted by the uncertainty caused by an economic downturn, public health crises, geopolitical issues, including the ongoing conflict between Russia and Ukraine,Ukraine and recent developments in Venezuela and Iran, volatility or deterioration in the debt and equity capital markets, inflation, deflation or other adverse economic conditions that negatively affect us or parties with whom we do business resulting in a reduction in our customers’ spending and their non-payment or inability to perform obligations owed to us, such as the failure of customers to honor their commitments or the failure of major suppliers to complete orders.

A continued recession or long-term market correction could further materially affect the value of our Common Stock, affect our access to capital and affect our business in the near and long-term. The borrowing base of our New2028 ABL Facility is dependent upon our receivables, which may be significantly lower in the future due to reduced activity levels or decreases in pricing for our services.

The U.S. inflation rate began increasing significantly in 2021 and has remained at an elevated level asthrough year-end 2025, with official inflation rate of year-end2.9% 2024.per the Federal Reserve and 3.0% per the Bureau of Labor Statistics Producer Price Index. Inflation in wages, materials, parts, equipment and other costs has the potential to adversely affect our results of operations, cash flows and financial position by increasing our overall cost structure, particularly if we are unable to achieve commensurate increases in the prices we charge our customers for our products and services. In addition, the existence of inflation in the economy has resulted in higher interest rates, which could result in higher borrowing costs, supply shortages, increased costs of labor, weakening exchange rates and other similar effects. Sustained levels of high inflation caused the U.S. Federal Reserve and other central banks to increase interest rates several times in an effort to curb inflationary pressure on the costs of goods and services across the United States, including the significant increases in prevailing interest rates that occurred during 2022 and 2023 as a result of the 525 aggregate basis point increase in the federal funds rate, and the associated macroeconomic impact on slowdown in economic growth could negatively impact our business. While the Federal Reserve reduced benchmark interest rates by 75100 basis points in late 2024,2024 itand hasby recently75 announcedbasis apoints pausein on2025, interestno assurance can be given that such rate cuts.cuts will continue. To the extent elevated inflation remains, we may experience further cost increases for our operations, including labor costs and equipment. We cannot predict any future trends in the rate of inflation and a significant increase in inflation, to the extent we are unable to timely pass through the cost increases to our customers, would negatively impact our business, financial condition and results of operations.

Our business was created largely through a series of acquisitions, including the Greene's Acquisition (as defined below).Acquisition. We regularly evaluate acquisition opportunities, frequently engage in acquisition discussions and conduct due diligence activities and, where appropriate, engage in acquisition negotiations, some of which could be material to us. Our ability to continue to achieve our goals may depend upon our ability to effectively identify attractive businesses, access financing sources on acceptable terms, negotiate favorable transaction terms and successfully integrate any businesses we acquire, achieve cost efficiencies and manage these businesses as part of our company.

Additionally, depending upon the acquisition opportunities available, we also may need to raise additional funds through the capital markets or arrange for additional bank financing in order to consummate such acquisitions or to fund capital expenditures necessary to integrate such acquired businesses. The 2030 Senior Notes Indenture (as defined below) permits us to incur additional pari passu indebtedness of up to $150.0 within twelve months of the Refinancing (as defined below) to, among other things, consummate permitted acquisitions and investments, subject to the terms and conditions contained therein. Beyond twelve months, we may not be able to raise the substantial capital required for acquisitions and integrations on satisfactory terms, if at all. In addition, if we elect to utilize shares of Common Stock or other equity securities as consideration for one or more acquisitions or business combinations, such as we did in the Greene's Acquisition, or if we issue Common Stock or other equity securities in order to finance one or more acquisitions, existing stockholders of our company could experience dilution in the value of their securities, which could be material.

We have substantial indebtedness. UponAs completingof theDecember Refinancing on March 12,31, 2025, we had total outstanding long-term indebtedness of $287.2,$258.3, comprised of $55.0$36.0 in outstanding borrowings under our New2028 ABL Facility and $232.2$222.3 in aggregatenet principal amount of 2030 Senior Notes. Our New2028 ABL Facility matures in 2028. See Item 8. Note 76 - Long Term Debt for more information. Under the terms of the 2030 Senior Notes Indenture, we are required to make quarterly redemptions of our 2030 Senior Notes in an amount equal to two percent per annum of all 2030 Senior Notes outstanding as of the prior interest payment date, which will require us to dedicate all or a substantial portion of cash from operations to fund such redemptions. Our ability to pay the principal and interest on our debt as it becomes due, including the quarterly redemptions of the 2030 Senior Notes, and to satisfy our other liabilities will depend on our future operating performance. Our future operating performance will be affected by prevailing economic and political conditions, the level of drilling, completion, production and intervention services activity for North American onshore oil and natural gas resources, the willingness of capital providers to lend to our industry and other financial and business factors, many of which are beyond our control.

Our significant level of indebtedness may limit our ability to borrow additional funds or capitalize on acquisition or other business opportunities. The 2030 Senior Notes Indenture and the New ABL Facility have significant financial and operating restrictions that may have an adverse effect on our business, financial condition and results of operations.

Our leverage and the restrictions and obligations contained in the 2030 Senior Notes Indenture and the New2028 ABL Facility and any agreements governing future indebtedness may reduce our ability to incur additional indebtedness, engage in certain transactions or capitalize on acquisition or other business opportunities. If our future cash flows and available borrowings under our New2028 ABL Facility are insufficient to fund our operating expenses, we may be forced to consider additional financing alternatives. If debt and equity capital or alternative financing plans are not available on favorable terms or at all, we may be required to get the necessary consents to amend the terms of our debt to allow us to pursue additional financing alternatives. Our ability to request borrowings for the working capital or general corporate purposes under the New2028 ABL Facility is subject to satisfaction of certain customary conditions, including representations and warranties, no default or event of default, and the amount of requested borrowing not exceeding the lesser of the aggregate commitments thereunder and the borrowing base then in effect.

To conduct our business operations and execute our strategy, we acquire tangible and intangible assets, which affect the amount of future period amortization expense and possible impairment expense that we may incur. The risk of impairment may be heightened for the duration of the current industry conditions, which may persist for a prolonged period. The determination of the value of such intangible assets requires management to make estimates and assumptions that affect our financial statements. As part of our strategy, we may make additional acquisitions, which may result in the addition of duplicative assets. In the event such an acquisition results in the combined assets of our Company and the acquired assets being in excess of any reasonable forecast of future need, the excess portion of the book value of these assets may be judged to be impaired. In accordance with Accounting Standards Codification (“ASC”) Topic 360, Property, Plant, and Equipment, we assess potential impairment to long-lived assets (property and equipment and amortized intangible assets) when there is evidence that events or changes in circumstances indicate that the carrying amount of an asset may not be recovered. Our judgment regarding the existence of impairment indicators and future cash flows related to intangible assets is based on operational performance of our acquired businesses, expected changes in the global economy, oil and gas price and industry projections, discount rates and other judgmental factors. We would be required to record any such impairment losses resulting from any such test as a charge to operating results. To perform the annual assessment, we utilize a combination of income and market-based approaches to value the reporting units. The income approach to valuation relies on a discounted cash flow analysis to determine the fair value of each reporting unit, which considers forecasted cash flows discounted at an appropriate discount rate. The annual goodwill impairment test requires us to make a number of assumptions and estimates concerning future levels of revenue growth, operating margins and working capital requirements, which are based upon our long-term strategic plan. The discount rate is an estimate of the overall after-tax rate of return required by a market participant, whose weighted average cost of capital includes both equity and debt, including a risk premium. Any future impairment loss could have a material non-cash adverse impact on our results of operations.

We often provide credit to our customers for our services and we are, therefore, subject to the risk of our customers delaying or failing to pay outstanding invoices. Although we monitor individual customer financial viability in granting such credit arrangements and maintain reserves we believe are adequate to cover exposure for doubtful accounts, in weak economic environments, customers’ delays and failures to pay often increase due to, among other reasons, a reduction in our customers’ cash flow from operations and their access to credit markets. If our customers delay or fail to pay a significant amount of outstanding receivables, it could reduce our availability under our New2028 ABL Facility or otherwise have a material adverse effect on our liquidity, financial condition, results of operations and cash flows.

Some of our customers have entered bankruptcy proceedings in the past, and certain of our customers’ businesses face financial challenges that put them at risk of future bankruptcies. Customer bankruptcies could delay or in some cases eliminate our ability to collect accounts receivable that are outstanding at the time the customer enters bankruptcy proceedings. We are also at risk that we may be required to refund amounts collected from a customer during the period immediately prior to that customer’s bankruptcy filing, and the amount we ultimately collect from the customer’s bankruptcy estate may be significantly less. Customer bankruptcies may also reduce our availability under our New2028 ABL Facility. Although we maintain reserves for potential customer credit losses, customer bankruptcies could result in unanticipated credit losses. As a result, if one or more of our customers enter bankruptcy proceedings, particularly our larger customers or those to whom we have greater credit exposure, it could have a material adverse impact on our liquidity, operating results and financial condition.

Our operations rely on an extensive network of IT resourcessystems and a failure to maintain, upgrade and protect such systems could adversely impact our business, financial condition and results of operations. Our operations are subject to cybersecurity risks that could have a material adverse effect on our business, financial condition and results of operations.

IncreasingIncreased attention to ESGsustainability matters may impact our business.

IncreasingIncreased attention to climate change, increasing societal expectations on companies to address climate change, and potential consumer use of substitutes to fossil-fuel energy commodities may result in increased costs, reduced demand for our customers’ hydrocarbon products and our products and services, reduced profits, increased governmental investigations and private litigation against us, and negative impacts on our stock price and access to capital markets. Increasing attention to climate change and environmental conservation, for example, may result in demand shifts for our customers’ hydrocarbon products and additional governmental investigations and private litigation against those customers. To the extent that societal pressures or political or other factors are involved, it is possible that such liability could be imposed without regard to our causation of or contribution to the asserted damage, or to other mitigating factors. See Part I, Item 1. “Business – Government Regulation and Environmental, Health and Safety Matters” for more discussion on climate change and ESGsustainability matters that may pose a risk to our business.

We and our customers are required to obtain permits from one or more governmental agencies in order to perform certain activities. Such permits are typically required by state agencies but can also be required by federal and local governmental agencies. Moreover, some of our customers’ drilling and completion activities may take place on federal land or Tribal lands, requiring leases and other approvals from the federal government or Tribes to conduct such drilling and completion activities. The requirements for such permits vary depending on the type of operations, including the location where our customers’ drilling and completion activities will be conducted. As with all governmental permitting processes, and particularly with respect to those processes that involve public participation and comment, there is a degree of uncertainty as to whether a permit will be granted, the time it will take for a permit to be issued and the conditions that may be imposed in connection with the granting of the permit. Certain regulatory authorities have delayed or suspended the issuance of permits while the potential environmental impacts associated with issuing such permits can be studied and appropriate mitigation measures evaluated. At times, federal agencies have sought to cancel proposed leases for federal lands and refused or delayed required approvals. Permitting or lease delays, an inability to obtain or renew permits or leases, or revocation of our or our customers’ current permits could cause a loss of revenue and could materially and adversely affect our business, financial condition and results of operations. See Part I, Item 1. “Business – Government Regulation and Environmental, Health and Safety Matters” for more discussion on permitting and leasing matters, including actions that may adversely affect oil and natural gas leasing and permitting activities. Consequently, our customers’ operations in certain areas of the United States may be interrupted or suspended for varying lengths of time, resulting in reduced demand for our products and services and a corresponding loss of revenue to us as well as adversely affecting our results of operations in support of those customers.

Tariffs and other trade measures could adversely affect our business, results of operations, financial position,position and cash flows.

In connection with the Refinancing, on March 12, 2025, we issued warrants to purchase, in aggregate, up to 2,373,187 shares of Common Stock at an exercise price of $0.01 per share, subject to adjustment (the “Warrants”), as described in greater detail in Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” below. In connection with our entry into the First Amendment to the Indenture, on March 6, 2026 and March 11, 2026, we issued additional Warrants to our noteholders, based on their pro rata ownership of principal amount of the 2030 Senior Notes, providing for the purchase of up to 803,712 shares of Common Stock at an exercise price of $0.01 per share, subject to adjustment, pursuant to Section 4(a)(2) of the Securities Act. The Warrants are exercisable immediately, and in lieu of exercising such Warrant, the holders thereof may convert their Warrants, in whole or in part, into the number of shares of Common Stock they would otherwise be entitled to purchase pursuant to the terms of the Warrants at any time prior to the expiration date. The warrant agreements governing the Warrants stipulate that the Company will file a registration statement with SEC with respect to the shares of Common Stock underlying the Warrants within 90 days of their issuance.issuance, providing for registered resale pursuant thereto.

During the year ended December 31, 2024, we entered into a debt-for-equity exchange agreement (the “Exchange Agreement”) with a noteholder of our 11.5% senior secured notes due 2025 (the “2025 Senior Notes”). Pursuant to the Exchange Agreement, the noteholder exchanged $1.0 in aggregate principal amount of the Company’s outstanding 2025 Senior Notes for an aggregate of 190,476 shares of our Common Stock (the “Exchange”). During the year ended December 31, 2025, we did not have any Exchanges.

On June 14, 2021, we 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, we may sell from time to time through the Agent (the “ATM Offering”) the Company’s Common Stock, par value $0.01 per share, 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 AgreementAgreement, (thewhich, “EDA Amendment”). Amongamong other things, the EDA Amendment 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 $57.8 (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. During the three and twelve months ended December 31, 2024,2025, the Company didsold not— selland any167,769 shares of Common StockStock, respectively, in exchange for gross proceeds of $— and $0.6, respectively, and incurred legal and administrative fees of $0.3$— and $0.5,$0.3, respectively.

Shares ofAny Common Stock offered and sold in the ATM Offering weremay be issued pursuant to the Company'sCompany’s shelf registration statement on Form S-3 (Registration No. 333-256149333-271182) filed with the SEC on MayApril 14,7, 20212023 and declared effective on JuneApril 11,19, 20212023 (the “Registration Statement”), the prospectus supplement relating to the ATM Offering filed with the SEC on JuneMarch 14, 20212025 and any applicable additional prospectus supplements related to the ATM Offering that form a part of the Registration Statement. TheSales Registrationof StatementCommon expiredStock onunder Junethe 11,Equity 2024Distribution pursuantAgreement, as amended to date, may be made in any transactions that are deemed to be “at the market offerings” as defined in Rule 415(a)(5) under the Securities Act. SalesAs of the filing of this Annual Report, the Company is subject to the General Instruction I.B.6 to Form S-3, known as the “baby shelf” rule, which limits the amount of securities we can sell under the ATMRegistration OfferingStatement programin mayany restart12-month when and if the Company files a prospectus supplement under a successor registration statement.period.

We cannot predict the size of future issuances of our Common Stock or securities convertible into Common Stock or the effect, if any, that future issuances and sales of shares of our Common Stock will have on the market price of our Common Stock. Sales of substantial amounts of our Common Stock (including shares issued in connection with an acquisition or shares held by stockholders with registration rights), or the perception that such sales could occur, may adversely affect prevailing market prices of our Common Stock. Sales of or other transactions relating to shares of our Common Stock by our significant stockholders, directors, officers or employees could cause a perception in the marketplace that adverse events or trends have occurred or may be occurring at our company or that it is otherwise an advantageous time to sell shares of our Common Stock.

On March 8, 2023, the Company completed the acquisition of all of the equity interests of Greene’s. The acquisition was made pursuant to that certain purchase and sale agreement dated March 8, 2023, between the Company and Greene’s Holding Corporation (the “Purchase Agreement”). Greene's is a provider of wellhead protection, flowback and well testing services. The total consideration for the Greene’s Acquisition under the Purchase Agreement consisted of the issuance of approximately 2.4 million shares of the Company's Common Stock, par value $0.01 per share, subject to customary post-closing adjustments, representing 14.7% of the fully diluted Common Stock of the Company with an implied enterprise value of approximately $30.3 based on a 30-day volume weighted average price as of March 7, 2023 less acquired cash. As of the date of this filing, the integration is complete. See Note 3 - Business Combinations to our audited consolidated financial statements included in Item 8 in this Form 10-K.

Demand for services in the oil and natural gas industry is cyclical and subject to sudden and significant volatility. The oil and gas industry experienced significant increases in activity in late 2021 and 2022 due to the recovery from the COVID-19 pandemic and increasing demand for oil and gas.pandemic. Furthermore, sanctions and import bans on Russian oil have been implemented by various countries in response to the ongoing conflict in Ukraine, further impacting global oil supply. While oil prices declined in the first half of 2023 from their 2022 highs, oil prices rebounded in the third quarter of 2023 due to stronger than anticipated economic growth and sustained production cuts from Saudi Arabia and Russia, followed by oil price stabilization, through decreases, in the fourth quarter of 2023 due to a decrease in demand as the overall economy declined. 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. WTI's average daily price per barrel decreased by approximately $0.95,$11.24, or 1.2%,14.7%, to $76.63$65.39 per Bbl during the year ended December 31, 2024,2025, compared to the average daily price per barrel of $77.58$76.63 during the year ended December 31, 2023.2024. As of December 31, 2024,2025, U.S. land rig count stood at 589,527, a decrease of 5.3%8.0% since December 31, 2023.2024.

Looking ahead to the year ending December 31, 2025,2026, assuming commodity prices remain volatile, we anticipate that our customers will continue to cautiously allocate capital and operating expense spending. So far in the year ending December 31, 2025,2026, WTI prices have remained largely unchanged, while Organisation for Economic Co-operation and Development (“OECD”) crude inventories are expected to remain around the same level as at the end of 2024. Production from OPEC and its allies (“OPEC+”) and other oil producing nations is expected to increase in the low single digits over the next twelve months. This modest increase along with weather-related challenges across the country and a cautious approach to drilling expansion are expected to be some of the driving factors for activity in our industry through December 31, 2025.2026.

Oil and natural gas prices could decrease or increase with any changes in demand due to, among other things, the ongoing conflict in Ukraine, the recent Israel-Hamas conflict, the recent developments in Venezuela and Iran, international sanctions, speculation as to future actions by OPEC+, gas prices, interest rates, inflation and government efforts to reduce inflation, and possible changes in the overall health of the global economy, including a perceived economic recovery or any increased volatility in financial and credit markets or a prolonged 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.

For the year ended December 31, 2024,2025, revenues of $709.3$636.6 decreased by $179.1$72.7 or (20.210.2)% as compared with the year ended December 31, 2023.2024. The overall decrease in revenues reflects decreased demand for our services during the year. Decreased weighted average price contributed to approximately 15%16% of the decrease in dollar amount, and decreased weighted average volume contributed to approximately 85%.84%. On a segment basis, Rocky Mountains segment revenue decreased by $42.4$29.9 or (15.6)%. This decrease was driven entirely by a decrease in weighted average volume. Southwest segment revenue decreased by $35.6 or (11.7)%. This decrease was driven entirely by a decrease in weighted average volume. Northeast/Mid-Con segment revenue decreased by $101.1 or (32.413.1)%. Decreased weighted average price contributed to approximately 52%23% of the decrease in dollar amount, and decreased weighted average volume contributed to approximately 48%.77%. Southwest segment revenue decreased by $37.7 or (14.0)%. Decreased weighted average price contributed to approximately 23% of the decrease in dollar amount, and decreased weighted average volume contributed to approximately 77%. Northeast/Mid-Con segment revenue decreased by $5.1 or (2.4)%. This decrease was driven entirely by a decrease in weighted average volume.

Cost of sales. For the year ended December 31, 2024,2025, cost of sales was $549.7,$501.5, or 77.5%78.8% of revenues, as compared to $672.5,$549.7, or 75.7%77.5% of revenues, in the year ended December 31, 2023.2024. The decrease in dollar amount was primarily due to decreased activity. The increase in cost of sales as a percentage of revenues was generally consistent across our segments and a result of fixed costs leverage due to lower activity. The two largest components of cost of sales are labor and repair & maintenance. As cost of sales decreased, labor costs per employee decreasedincreased by (9.3)%0.9% as compared with the year ended December 31, 2023.2024. Repair & maintenance costs as a percentage of revenues increaseddecreased by 15.9%(0.3)% as compared to the year ended December 31, 2023.2024.

Selling, general and administrative expenses ("SG&A"). SG&A expenses during the twelve months ended December 31, 2024,2025, were $79.6,$68.5, or 11.2%10.8% of revenues, as compared with $86.7,$79.6, or 9.8%11.2% of revenues, in the year ended December 31, 2023.2024. SG&A decreased by $7.1$11.1 and decreased as a percentage of revenues due to management of costs as activity decreased. SG&A as a percentage of revenues increased primarily due to certain fixed costs within SG&A. R&D costs were $1.4$1.7 during bothin the year ended December 31, 20242025 and $1.4 in the year ended December 31, 2023,2024, reflecting our continued focus on maintaining an in-house R&D function while scaling costs to adjust to current levels of customer demand.function.

For the year ended December 31, 2024,2025, operating loss was $15.5,$30.3, as compared to operating incomeloss of $56.9$15.5 in the year ended December 31, 2023,2024, largely driven by a decrease in revenues due to lower activity.activity and deleveraging of fixed costs.

For the year ended December 31, 2024,2025, eachtwo out of our three operating segments demonstrated lower operating income compared to the year ended December 31, 2023,2024, driven by the decrease in pricing and utilization outpacing decreases in operating costs and labor in the year ended December 31, 2024.2025. Rocky Mountains segment operating income decreased by $22.3$18.1 or (48.476.1)% from $46.1 in the year ended December 31, 2023 to $23.8 in the year ended December 31, 2024.2024 to $5.7 in the year ended December 31, 2025. Southwest segment operating income decreased by $15.6 or (80.8)%$7.2 from $19.3 in the year ended December 31, 2023 to $3.7 in the year ended December 31, 2024.2024 Northeast/Mid-Conto segmenta operatingloss incomeof decreased by $38.3 or $(94.33.5)% from $40.6 in the year ended December 31, 20232025. toNortheast/Mid-Con segment operating income increased by $1.3 or 56.5% from $2.3 in the year ended December 31, 2024.2024 to $3.6 in the year ended December 31, 2025. The 7.7%20.3% decrease in operating loss in our Corporate and other in the year ended December 31, 20242025 was primarily driven by higherlower one-offincentive-based expensescompensation and legal costs in the year ended December 31, 2023.2024.

Income tax expense. Income tax expense was $0.8 for the year ended December 31, 2025, as compared to $0.6 for the year ended December 31, 2024, as compared to income tax expense of $3.0 for the year ended December 31, 2023. The decrease in income tax expense was primarily due to the decrease in pre-tax income.2024. Income tax expense wasis comprised of federal, state and local taxes for each year reported.

Net (loss) income.loss. Net loss for the year ended December 31, 20242025 was $53.0,$77.1, as compared to net incomeloss of $19.2$53.0 in the year ended December 31, 2023,2024, primarily due to lower activity in the most recent year.

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 New2028 ABL Facility and cash flows from operations. At December 31, 2024,2025, we had $91.6$5.7 of cash and cash equivalents and $20.4$50.6 of available capacity under the Prior2028 ABL Facility.

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 monetizedmonetization of 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”, “—New2028 ABL Facility” and “—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.

We have substantial indebtedness. As of December 31, 2025, we had total outstanding indebtedness of $258.3 under our 2028 ABL Facility and our 2030 Senior Notes as described in greater detail under “—2028 ABL Facility” and “—2030 Senior Notes” below. Our ability to comply with the covenants in our debt instruments and pay the principal and interest on our debt and to satisfy our other liabilities will depend on our future operating performance.performance and ability to refinance our debt as it becomes due. Our future operating performance and ability to refinance such indebtedness will be affected by prevailing economic and political conditions, the level of drilling, completion, production and intervention services activity for North American onshore oil and natural gas resources, the willingness of capital providers to lend to our industry and other financial and business factors, many of which are beyond our control. In addition, incurring additional debt in excess of our existing outstanding indebtedness would result in increased interest expense and financial leverage, and issuing Common Stock may result in dilution to our current stockholders.

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 New2028 ABL Facility and our cash flows will provide us with the ability to fund our operations for at least the next twelve months.

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) Warrantswarrants 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 will bewere cancelled by the Company upon receipt thereof (collectively, the “Refinancing”). The Company consummated the Refinancing on March 12, 2025.

On March 12, 2025, in connection with the completion of the Refinancing, the Prior CreditABL Facility was repaid in full using borrowings under the New2028 ABL Facility and the commitments thereunder terminated. In connection with the prepayment and terminationAs of December 31, 2024, $50.0 was outstanding under the Prior ABL Facility,Facility and the Companyeffective providedinterest rate under the Prior AdministrativeABL AgentFacility cash collateral in support of certain existing letters of credit and existing purchasing card program in an aggregate amount ofwas approximately $8.1.7.44%.

Our capital expenditures were $65.1$49.1 during the year ended December 31, 2024,2025, compared to $57.1$65.1 in the year ended December 31, 2023.2024. Based on current industry conditions and our significant investments in capital expenditures over the past several years, we expect to incur betweenapproximately $45.0 and $55.0$40.0 in capital expenditures for the year ending December 31, 2025.2026. 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.

On June 14, 2021, the Company entered into the Equity Distribution Agreement with the Agent. Pursuant to the terms of the Equity Distribution Agreement, the Company may sell from time to time through the Agent, in the ATM Offering,Offering the Company’s Common Stock, havinghad an aggregate offering price of up to $50.0. On November 16, 2022, the Company entered into Amendment No. 1 to the EDAEquity Amendment.Distribution AmongAgreement, which, among other things, the EDA Amendment 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 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.

The Company has used and plans to use the net proceeds from the ATM Offering, after deducting the Agent’s commissions and the Company’s offering expenses, for general corporate purposes, which includedmay include, among other things, paying or refinancing all or a portion of the Company's then-outstanding indebtedness and funding acquisitions, capital expenditures and working capital.

The following discussion and analysis addresses the results of our operations for the three and six months ended MarchJune 31,30, 2026, as compared to our results of operations for the three and six months ended MarchJune 31,30, 2025. In addition, the discussion and analysis addresses our liquidity, financial condition and other matters for these periods.

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.capital. So far in the year ending December 31, 2026, WTI prices have increased markedly in March and April, afterwhen the start of the ongoing conflict with Iran.Iran Still,intensified and have decreased when the increaseconflict hasdeescalated. notAlthough beenwe stable,expect asthis newsdynamic fromto hold for the regionforeseeable drives large changes to WTI prices on a daily basis. Currently,future, it is difficult to tryanticipate 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 estimatecompletion 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.expansion.

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,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.

Three Months Ended MarchJune 31,30, 2026 Compared to Three Months Ended MarchJune 31,30, 2025

For the quarter ended MarchJune 31,30, 2026, revenues were $144.7,$167.3, aan decreaseincrease of $9.3,$8.3, or 6.0%,5.2%, as compared with the prior year period. The overall decreaseincrease in revenues reflects aan declineincrease in activity during the quarter, leading to lowerhigher demand for our services. Lower weighted average price contributed to approximately 67% of the $9.3 decrease, and lowerHigher weighted average volume contributed to approximately all of the remaining$8.3 approximately 33%.increase. On a segment basis, Rocky Mountains segment revenue decreased by $9.2$3.3 or 19.2%.6.1%. 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%all of the dollar decrease,decrease. and lower weighted average volume contributed to the remaining approximately 3%. Northeast/Mid-ConSouthwest segment revenue increased by $11.5$5.7 or 28.0%.9.7%. Higher weighted average price contributed to approximately 80%22% of the dollar decrease,increase, and higher weighted average volume contributed to the remaining approximately 20%.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.

Cost of sales. For the quarter ended MarchJune 31,30, 2026, cost of sales were $119.1,$130.9, or 82.3%78.2% of sales, as compared to the three months ended MarchJune 31,30, 2025 of $123.8,$125.6, or 80.4%79.0% of sales. Cost of sales as a percentage of revenues increaseddecreased primarily due to lowerhigher revenuesleverage 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 0.6%5.7% as compared with the three months ended MarchJune 31,30, 2025. Repair & maintenance costs as a percentage of revenues increaseddecreased by 7.3%9.0% as compared to the three months ended MarchJune 31,30, 2025, due to anthe increasehigher in repair & maintenance costspricing during the quarter.

Selling, general and administrative expenses (“SG&A”). For the quarter ended MarchJune 31,30, 2026, SG&A expenses were $15.4,$19.0, or 10.6%11.4% of revenues, as compared with $21.6,$18.0, or 14.0%11.3% of revenues, in the prior year period. TheSG&A decreasesexpenses ondecreased aslightly dollarwhile basisrevenues andincreased induring the quarter, which caused the percentage of revenues areto improve compared to the resultthree ofmonths continuousended effortsJune to30, reduce costs and improve efficiency.2025.

For the quarter ended MarchJune 31,30, 2026, operating lossincome was $12.1$2.1 compared to operating loss of $17.7$8.7 in the prior year period, due to loweran Corporateincrease in activity and other operating costs.pricing.

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 lossincome was $3.8,$0.2, Southwest segment operating lossincome was $3.4,$0.2, and Northeast/Mid-Con segment operating income was $3.0$5.1 for the three months ended MarchJune 31,30, 2026.

Income tax (benefit) expense. For the quarter ended MarchJune 31,30, 2026, income tax expensebenefit was $0.2,$1.7, consistentas withcompared to income tax expense of $0.2 in the prior year period, andwith wasthe comprisedchange primarily ofdue 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 balances.assets.

Net loss. For the quarter ended MarchJune 31,30, 2026, net loss was $24.0,$8.4, as compared to net loss of $27.9$19.9 in the prior year period, improving primarily as a result of lowerhigher operatingleverage of fixed costs as discussed above.

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 MarchJune 31,30, 2026, we had $5.6$7.9 of cash and cash equivalentsequivalents, and $42.1 of$45.4 available capacity under the 2028 ABL Facility.

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 monetization ofmonetized non-core and obsolete assets. Recently,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, sell non-core assetsmarkets 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.

In light of our substantial leverage position, as market conditions warrant and subject to our contractual restrictions, liquidity position and other factors, we arehave evaluatingevaluated 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.structure Someand ofour theseBoard alternativeshas maydetermined requireto move forward with the consentRights ofOffering currentdescribed lenders,above. stockholdersFor orrisks Investors,associated andwith therethe isRights noOffering, assuranceplease thatsee we“Part willII. beItem able1A Risk Factors-Risks Related to executethe anyRights ofOffering” these alternatives on acceptable terms or at all.below.

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 2028New ABL Facility and our cash flows will provide us with the ability to fund our operations for at least the next twelve months.

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,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 Investorsholders 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.

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 MarchJune 31,30, 2026, the Company was in compliance with its financial covenants under the 2030 Senior Notes.

As of MarchJune 31,30, 2026, the principal amount outstanding under the 2030 Senior Notes was $249.5.$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 MarchJune 31,30, 2026 was $226.8.$232.9. The effective interest rate under the 2030 Senior Notes was approximately 12.18%12.12% on MarchJune 31,30, 2026. Accrued interest related to the 2030 Senior Notes was $— as of MarchJune 31,30, 2026 and $— as of December 31, 2025.

The 2028 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 2028 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 2028 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 2028 ABL Facility), events of default and other customary provisions. As of MarchJune 31,30, 2026, the Company was in compliance with its financial covenants under the 2028 ABL Facility.

As of MarchJune 31,30, 2026, the borrowings outstanding under the 2028 ABL Facility were $49.0.$56.0. The effective interest rate under the 2028 ABL Facility was approximately 8.41%8.36% on MarchJune 31,30, 2026. Accrued interest related to the 2028 ABL Facility was $0.4$0.5 as of MarchJune 31,30, 2026 and $0.4 as of December 31, 2025.

Our capital expenditures were $8.7$17.3 during the threesix months ended MarchJune 31,30, 2026, compared to $15.0$27.7 in the threesix months ended MarchJune 31,30, 2025. We offset $3.4$5.6 of capital spending during the threesix months ended MarchJune 31,30, 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.

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,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$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’sCompany'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.

Any Common Stock offered and sold in the ATM Offering may bewas 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”),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 formformed a part of the Registration Statement. Sales of Common Stock under the Equity Distribution Agreement may bewere 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.

During the three and six months ended MarchJune 31,30, 2026, the Company did not sell any shares of Common Stock and incurred legal and administrative fees of $0.0.$0.2 and $0.2, respectively.

During the three and six months ended MarchJune 31,30, 2025, the Company sold 142,76925,000 and 167,769 shares of Common StockStock, respectively, in exchange for gross proceeds of approximately $0.5$0.1 and $0.6, respectively, and incurred legal and administrative fees of $0.1.$0.1 and $0.1, respectively.

Our cash flows provided by operating activities for the threesix months ended MarchJune 31,30, 2026 were approximately $0.3$10.8 as compared to approximately $37.6$18.5 used in operating activities for the threesix months ended MarchJune 31,30, 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.

At MarchJune 31,30, 2026, we had $5.6$7.9 of cash and cash equivalents. Cash on hand at MarchJune 31,30, 2026 decreasedincreased by $0.1,$2.2, as a result of $0.3$10.8 of cash flows provided by operating activities, $5.3$25.2 of cash flows used in investing activities and $4.9$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.

Net cash provided by operating activities was $0.3$10.8 for the threesix months ended MarchJune 31,30, 2026, as compared to net cash used in operating activities of $37.6$18.5 for the threesix months ended MarchJune 31,30, 2025. The improvement inpositive operating cash flows waswere attributable to managementimprovements ofin working capital and an increaserequirements in daysthe payablecurrent outstanding.year.

Net cash used in investing activities was $5.3$25.2 for the threesix months ended MarchJune 31,30, 2026, as compared to net cash used in investing activities of $10.2$21.3 for the threesix months ended MarchJune 31,30, 2025. TheOutside of the cash paid for the Wolf Pack Acquisition, the cash flows used in investing activities for the threesix months ended MarchJune 31,30, 2026 were primarily driven by maintenance capital spending tied to the operation of our existing asset base offset by sales of property and equipment.

Net cash provided by financing activities was $4.9$16.6 for the threesix months ended MarchJune 31,30, 2026, compared to net cash used in financing activities of $21.1$34.5 for the threesix months ended MarchJune 31,30, 2025. In the prior year, weWe refinanced both our 2025 Senior Notes and Prior ABL Facility,Facility during the six months ended June 30, 2025, which brought additional cash outlays.outlays in the prior year.