NINEHIGH SIGNALRISK10-K

Nine Energy Service has filed for Chapter 11 bankruptcy protection, with explicit warnings that shareholders could experience complete loss of investment.

The addition of Chapter 11 bankruptcy language represents a material adverse development that fundamentally changes the investment thesis, with management explicitly stating that trading is "highly speculative" and holders "could experience a significant or complete loss." The removal of standard operational risk factors about OPEC and customer demand suggests the company is now focused on survival rather than normal business operations.

Comparing 2026-03-04 vs 2025-03-06View on EDGAR →
FINANCIAL ANALYSIS

The financial deterioration is severe across all metrics, with gross profit collapsing 94.7% from $163M to $8.7M while operating cash flow turned negative at -$7.3M versus positive $13.2M previously. Interest expense surged 57.4% to $51.1M despite total debt declining, indicating distressed borrowing costs, while stockholders' equity deteriorated further to -$115M from -$66.1M. The combination of cash burn, inventory buildup, and deepening negative equity position aligns with the Chapter 11 filing and signals fundamental business distress.

FINANCIAL STATEMENT CHANGES
Operating Cash Flow
Cash Flow
-155.4%
$13.2M→-$7.3M

Operating cash flow fell 155.4% — earnings quality concerns; investigate working capital changes and non-cash items.

Gross Profit
P&L
-94.7%
$163.0M→$8.7M

Gross margin compression — rising input costs, pricing pressure, or unfavorable product mix shift.

Stockholders Equity
Balance Sheet
-74%
-$66.1M→-$115.0M

Equity declined sharply — large losses, buybacks, or write-downs reducing book value significantly.

Operating Income
P&L
-73.7%
$8.9M→$2.3M

Operating income deteriorated sharply — investigate whether driven by one-time charges or structural cost issues.

Interest Expense
P&L
+57.4%
$32.5M→$51.1M

Interest expense surged 57.4% — significant debt increase or rising rates materially impacting earnings.

Cash & Equivalents
Balance Sheet
-33.8%
$27.9M→$18.4M

Cash declined 33.8% — significant cash burn or deployment; verify adequacy of remaining liquidity runway.

Net Income
P&L
-24.9%
-$41.1M→-$51.3M

Net income declined 24.9% — review whether driven by operations, interest costs, or non-recurring items.

Total Debt
Balance Sheet
-12.4%
$392.1M→$343.6M

Debt reduced 12.4% — deleveraging strengthens balance sheet and reduces financial risk.

Current Liabilities
Balance Sheet
+12.1%
$81.5M→$91.4M

Current liabilities rose 12.1% — increased short-term obligations, watch current ratio.

Inventory
Balance Sheet
+11.4%
$50.8M→$56.6M

Inventory built 11.4% — monitor whether demand supports this build or if write-downs may follow.

LANGUAGE CHANGES
NEW — 2026-03-04
PRIOR — 2025-03-06
ADDED
Forward-looking statements often include words such as anticipate, believe, can have, continue, could, estimate, expect, forecast, intend, likely, may, plan, potential, predict, project, should, will, would, and similar words or expressions or the negative thereof; however, not all forward-looking statements contain such identifying words.
The following is a summary of the principal risk factors that could materially adversely affect our business, financial condition, and results of operations and make an investment in us speculative or risky.
A more complete statement of these risk factors is set forth in Risk Factors in Item 1A of Part I of this Annual Report.
During the pendency of the Chapter 11 Cases (as defined below), trading in our securities (including our common stock) is highly speculative and poses substantial risks.
Trading prices for our securities may bear little or no relationship to the actual recovery, if any, by the holders of our securities in the Chapter 11 Cases.
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REMOVED
All statements, other than statements of historical fact, regarding our strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans, and objectives of management are forward-looking statements.
When used in this Annual Report, the words could, believe, anticipate, intend, estimate, expect, may, continue, predict, potential, project, and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words.
The following is a summary of the principal risk factors that could materially adversely affect our business, financial condition, and results of operations.
A more complete statement of those risks and uncertainties is set forth in Risk Factors in Item 1A of Part I of this Annual Report.
and globally, including conflicts, instability, acts of war, and terrorism in oil producing countries or regions, particularly the Middle East, Russia, South America, and Africa; actions by the members of the Organization of the Petroleum Exporting Countries ( OPEC ) and other oil exporting nations that relate to or impact oil production and supply; weather conditions; the effect of U.S.
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