Innovex International第二季業績出爐 上半年表現揭曉

10-Q
 
 
 
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

  
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-Q
 
(Mark One)

 
 
 
 
 

 
 ☒

 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

 For the quarterly period ended June 30, 2026
OR

 
 
 
 
 

 
 ☐

 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

 For the transition period from __________________ to __________________
Commission File Number: 001-13439
 
INNOVEX INTERNATIONAL, INC.
(Exact name of Registrant as specified in its Charter)
 
 

 
 
 
 
 

 
 Delaware

 74-2162088

 

 
 (State or other jurisdiction of
incorporation or organization)

 (I.R.S. Employer
Identification No.)

 

 
 19120 Kenswick Dr.
Humble, Texas

 77338

 

 
 (Address of principal executive offices)

 (Zip Code)

 

 Registrant’s telephone number, including area code: (346) 398-0000
 
Securities registered pursuant to Section 12(b) of the Act:
 

 
 
 
 
 
 
 
 

 
 Title of each class

  

 Trading
Symbol(s)

  

 Name of each exchange on which registered

 

 
 Common stock, par value $0.01 per share

  

 INVX

  

 New York Stock Exchange

 

 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 
 
 
 
 
 
 
 
 
 

 
 Large accelerated filer

 

 ☒

 

 Accelerated filer

 

 ☐

 

 
 Non-accelerated filer

 

 ☐

 

 Smaller reporting company

 

 ☐

 

 
 Emerging growth company

  

 ☐

  

  

  

  

 

 If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of July 29, 2026, the registrant had 69,935,827 shares of common stock, $0.01 par value per share, outstanding.
 
 

 

 
  

 Table of Contents
 

 
 
 
 
 
 

 
 

 

 Page

 

 
 Cautionary Statement Regarding Forward-Looking Statements 

 ii

 

 
 PART I

 FINANCIAL INFORMATION

  

 

 
 Item 1.

 Condensed Consolidated Financial Statements (unaudited)

 1

 

 
  

 Condensed Consolidated Balance Sheets

 1

 

 
  

 Condensed Consolidated Statements of Operations and Comprehensive Income 

 2

 

 
  

 Condensed Consolidated Statements of Changes in Stockholders’ Equity 

 3

 

 
  

 Condensed Consolidated Statements of Cash Flows

 4

 

 
  

 Notes to Condensed Consolidated Financial Statements

 5

 

 
 Item 2.

 Management’s Discussion and Analysis of Financial Condition and Results of Operations

 17

 

 
 Item 3.

 Quantitative and Qualitative Disclosures About Market Risk

 26

 

 
 Item 4.

 Controls and Procedures

 26

 

 
 PART II

 OTHER INFORMATION

  

 

 
 Item 1.

 Legal Proceedings

 26

 

 
 Item 1A.

 Risk Factors

 26

 

 
 Item 2.

 Unregistered Sales of Equity Securities and Use of Proceeds

 27

 

 
 Item 3.

 Defaults Upon Senior Securities

 27

 

 
 Item 4.

 Mine Safety Disclosures

 27

 

 
 Item 5.

 Other Information

 27

 

 
 Item 6.

 Exhibits

 28

 

 
 Signatures

  

 29

 

  

 i

 
  

 Cautionary Statement Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q (this “Quarterly Report”) includes certain statements that may be deemed to be “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Statements contained in all parts of this Quarterly Report that are not historical facts are forward-looking statements that involve risks and uncertainties that are beyond the control of Innovex International, Inc. (the “Company”, “Innovex”, “we”, “our” or “us”). You can identify our forward-looking statements by the words “anticipate,” “estimate,” “expect,” “may,” “project,” “believe,” and similar expressions, or by our discussion of strategies or trends. Although we believe that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that these expectations will prove to be correct. These forward-looking statements include the following types of information and statements as they relate to the Company:
•the impact of actions taken by the Organization of Petroleum Exporting Countries and the expanded alliance (OPEC+) with respect to their production levels and the effects thereof;

•the impact of global market conditions, political disturbances, war or other global conflicts (including the Russia-Ukraine conflict, the Iran conflict, and other conflicts in the Middle East), terrorist attacks, changes in global trade policies, tariffs and sanctions, weak local economic conditions, and international currency fluctuations;

•the impact of general economic conditions, including inflationary pressures and interest rates, a general economic slowdown or recession or instability in financial institutions, on economic activity and on our operations;

•future operating results and cash flow;

•scheduled, budgeted, and other future capital expenditures;

•planned or estimated cost savings;

•working capital requirements;

•our ability to execute our strategies, including our ability to successfully identify and consummate strategic acquisitions;

•the need for and the availability of expected sources of liquidity;

•our ability to comply with restrictions contained in our debt agreements;

•our ability to generate sufficient cash to service our indebtedness, fund our capital requirements and generate future profits;

•the market for our existing and future products;

•our ability to develop new applications for our technologies;

•introduction of new drilling or completion techniques, or services using new technologies subject to patent or other intellectual property protections and the availability and enforceability of such intellectual property protections;

•the price and availability of alternative fuels and energy sources;

•the exploration, development and production activities of our customers;

•actions taken by our customers, competitors and third-party operators;

•effects of pending or future legal proceedings;

•the effects of existing and future laws and governmental regulations (or the interpretation thereof) on us and our customers;

•changes in customers’ future product and service requirements that may not be cost effective or within our capabilities; and

•future operations, financial results, business plans, and cash needs.

These statements are based on assumptions and analysis in light of our experience and perception of historical trends, current conditions, expected future developments and other factors we believe were appropriate in the circumstances when the statements were made. Forward-looking statements by their nature involve substantial risks and uncertainties that could significantly impact expected results, and actual future results could differ materially from those described in such statements. While it is not possible to identify all factors, we continue to face many risks and uncertainties. Among the factors that could cause actual future results to differ materially are (i) risks related to our merger and acquisition activities, including the ultimate outcome and results of integrating operations; the effects of our merger and acquisition activities, including our future financial condition, results of operations, strategy and plans; potential adverse reactions or changes to business relationships resulting from the completion of mergers and acquisitions; expected benefits from mergers and acquisitions and our ability to realize those benefits; the significant costs required to integrate operations; whether mergers or acquisitions related litigation will occur and, if so, the results of any litigation, settlements, and investigations; (ii) operating hazards, natural disasters, weather-related delays, casualty losses, and other matters beyond our control; (iii) acts of terrorism, war or political or civil unrest in the United States or elsewhere; (iv) loss or corruption of our information or a cyberattack on our computer systems; (v) uncertainties pertaining to the lawsuit captioned Impulse Downhole Solutions Ltd., and Impulse Downhole Tools USA Ltd v. Downhole Well Solutions, LLC, Civil Action No. 4:23-cv-02954 in the U.S. District Court for the Southern District of Texas (the "Impulse Litigation"); and (vi) other risks and uncertainties discussed under “Part I, Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025 (our “Annual Report”), “Part II, Item 1A Risk Factors” of any subsequent Quarterly Reports on Form 10-Q and in other filings made by us from time to time with the SEC. Many of such factors are beyond our ability to control or predict. Any of the factors, or a combination of these factors, could materially affect our future results of operations and the ultimate accuracy of the forward-looking statements. Management cautions against putting undue reliance on forward-looking statements or projecting any future results based on such statements or present or prior earnings levels. Every forward-looking statement speaks only as of the date of the particular statement, and we undertake no obligation to publicly update or revise any forward-looking statement except as may be required by law.

 ii

 
  

 PART I — FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Innovex International, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
 

 
 
 
 
 
 
 
 
 
 
 
 

 
 (in thousands, except share and par value amounts)

  

 June 30,
2026

  

  

 December 31,
2025

  

 

 
 Assets

  

  

  

  

  

  

 

 
 Current assets

  

  

  

  

  

  

 

 
 Cash and restricted cash

  

 $

 222,055

  

  

 $

 203,407

  

 

 
 Trade receivables, net of allowance of $15,174 and $19,752 at June 30, 2026 and December 31, 2025, respectively

  

  

 240,094

  

  

  

 237,774

  

 

 
 Contract assets

  

  

 3,259

  

  

  

 2,705

  

 

 
 Inventories

  

  

 264,837

  

  

  

 248,433

  

 

 
 Prepaid expenses and other current assets

  

  

 58,282

  

  

  

 35,728

  

 

 
 Total current assets

  

  

 788,527

  

  

  

 728,047

  

 

 
 Noncurrent assets

  

  

  

  

  

  

 

 
 Property and equipment, net

  

  

 169,636

  

  

  

 158,874

  

 

 
 Right-of-use assets – operating

  

  

 48,728

  

  

  

 52,204

  

 

 
 Goodwill

  

  

 106,005

  

  

  

 99,720

  

 

 
 Intangibles, net

  

  

 115,326

  

  

  

 116,230

  

 

 
 Deferred tax asset, net

  

  

 89,341

  

  

  

 102,375

  

 

 
 Other long-term assets

  

  

 10,184

  

  

  

 10,857

  

 

 
 Total noncurrent assets

  

  

 539,220

  

  

  

 540,260

  

 

 
 Total assets

  

 $

 1,327,747

  

  

 $

 1,268,307

  

 

 
 Liabilities and stockholders’ equity

  

  

  

  

  

  

 

 
 Current liabilities

  

  

  

  

  

  

 

 
 Accounts payable

  

 $

 77,188

  

  

 $

 60,711

  

 

 
 Accrued expenses

  

  

 37,755

  

  

  

 49,148

  

 

 
 Operating lease liabilities

  

  

 12,741

  

  

  

 12,670

  

 

 
 Contract liabilities

  

  

 14,484

  

  

  

 11,986

  

 

 
 Current portion of long-term debt and finance lease obligations

  

  

 6,043

  

  

  

 6,709

  

 

 
 Other current liabilities

  

  

 9,304

  

  

  

 6,940

  

 

 
 Total current liabilities

  

  

 157,515

  

  

  

 148,164

  

 

 
 Noncurrent liabilities

  

  

  

  

  

  

 

 
 Long-term debt and finance lease obligations

  

  

 19,041

  

  

  

 18,922

  

 

 
 Operating lease liabilities

  

  

 36,729

  

  

  

 40,986

  

 

 
 Deferred income taxes

  

  

 621

  

  

  

 500

  

 

 
 Legal settlement accrual

  

  

 51,607

  

  

  

 —

  

 

 
 Other long-term liabilities

  

  

 3,735

  

  

  

 2,036

  

 

 
 Total noncurrent liabilities

  

  

 111,733

  

  

  

 62,444

  

 

 
 Total liabilities

  

 $

 269,248

  

  

 $

 210,608

  

 

 
 Commitments and contingencies (Note 16)

  

  

  

  

  

  

 

 
 Stockholders’ equity

  

  

  

  

  

  

 

 
 Preferred stock: 10,000,000 shares authorized at $0.01 par value (none issued)

  

 $

 —

  

  

 $

 —

  

 

 
 Common stock: $0.01 par value, 200,000,000 shares authorized at June 30, 2026 and December 31, 2025; 68,875,856 and 69,077,237 shares issued and outstanding at June 30, 2026 and December 31, 2025, respectively

  

  

 689

  

  

  

 691

  

 

 
 Additional paid-in capital

  

  

 772,905

  

  

  

 767,650

  

 

 
 Accumulated other comprehensive income

  

  

 5,394

  

  

  

 4,084

  

 

 
 Retained earnings

  

  

 279,511

  

  

  

 285,274

  

 

 
 Total stockholders’ equity

  

 $

 1,058,499

  

  

 $

 1,057,699

  

 

 
 Total liabilities and stockholders’ equity

  

 $

 1,327,747

  

  

 $

 1,268,307

  

 

  
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

 1

 
  

 Innovex International, Inc.
Condensed Consolidated Statements of Operations and Comprehensive Income
(Unaudited)
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
  

  

 Three Months Ended
June 30,

  

  

 Six Months Ended
June 30,

  

 

 
 (in thousands, except share and per share amounts)

  

 2026

  

  

 2025

  

  

 2026

  

  

 2025

  

 

 
 Revenues

  

  

  

  

  

  

  

  

  

  

  

  

 

 
 Products

  

 $

 167,379

  

  

 $

 149,449

  

  

 $

 330,274

  

  

 $

 316,799

  

 

 
 Services

  

  

 31,705

  

  

  

 30,782

  

  

  

 62,846

  

  

  

 65,843

  

 

 
 Rental

  

  

 45,812

  

  

  

 44,003

  

  

  

 90,807

  

  

  

 82,007

  

 

 
 Total revenues

  

  

 244,896

  

  

  

 224,234

  

  

  

 483,927

  

  

  

 464,649

  

 

 
 Cost of revenues(a)

  

  

  

  

  

  

  

  

  

  

  

  

 

 
 Products

  

  

 124,732

  

  

  

 112,234

  

  

  

 247,984

  

  

  

 234,450

  

 

 
 Services

  

  

 23,323

  

  

  

 26,025

  

  

  

 42,500

  

  

  

 55,324

  

 

 
 Rental

  

  

 13,193

  

  

  

 14,256

  

  

  

 25,286

  

  

  

 26,652

  

 

 
 Total cost of revenues

  

  

 161,248

  

  

  

 152,515

  

  

  

 315,770

  

  

  

 316,426

  

 

 
 Selling, general and administrative expenses

  

  

 39,089

  

  

  

 28,835

  

  

  

 80,837

  

  

  

 61,184

  

 

 
 Gain on sale of assets, net

  

  

 (9,853

 )

  

  

 (419

 )

  

  

 (11,873

 )

  

  

 (271

 )

 

 
 Depreciation and amortization

  

  

 16,213

  

  

  

 14,974

  

  

  

 32,435

  

  

  

 29,919

  

 

 
 Impairment of long-lived assets

  

  

 —

  

  

  

 503

  

  

  

 —

  

  

  

 3,427

  

 

 
 Acquisition and integration costs

  

  

 1,613

  

  

  

 5,131

  

  

  

 3,201

  

  

  

 9,419

  

 

 
 Provision for legal settlement

  

  

 2,804

  

  

  

 —

  

  

  

 51,607

  

  

  

 —

  

 

 
 Income from operations

  

  

 33,782

  

  

  

 22,695

  

  

  

 11,950

  

  

  

 44,545

  

 

 
 Interest (income) expense, net

  

  

 (653

 )

  

  

 551

  

  

  

 (1,041

 )

  

  

 1,251

  

 

 
 Other income, net

  

  

 (972

 )

  

  

 (92

 )

  

  

 (822

 )

  

  

 (306

 )

 

 
 Income before income taxes

  

  

 35,407

  

  

  

 22,236

  

  

  

 13,813

  

  

  

 43,600

  

 

 
 Income tax expense

  

  

 10,376

  

  

  

 6,891

  

  

  

 5,453

  

  

  

 13,498

  

 

 
 Net income

  

  

 25,031

  

  

  

 15,345

  

  

  

 8,360

  

  

  

 30,102

  

 

 
 

  

  

  

  

  

  

  

  

  

  

  

  

 

 
 Earnings per common share

  

  

  

  

  

  

  

  

  

  

  

  

 

 
 Basic

  

 $

 0.36

  

  

 $

 0.22

  

  

 $

 0.12

  

  

 $

 0.44

  

 

 
 Diluted

  

 $

 0.36

  

  

 $

 0.22

  

  

 $

 0.12

  

  

 $

 0.43

  

 

 
 

  

  

  

  

  

  

  

  

  

  

  

  

 

 
 Weighted average common shares outstanding

  

  

  

  

  

  

  

  

  

  

  

  

 

 
 Basic

  

  

 68,793,160

  

  

  

 68,943,387

  

  

  

 68,866,310

  

  

  

 69,115,786

  

 

 
 Diluted

  

  

 69,523,359

  

  

  

 69,147,457

  

  

  

 69,610,693

  

  

  

 69,330,598

  

 

 
 

  

  

  

  

  

  

  

  

  

  

  

  

 

 
 Other comprehensive income

  

  

  

  

  

  

  

  

  

  

  

  

 

 
 Net income

  

 $

 25,031

  

  

 $

 15,345

  

  

 $

 8,360

  

  

 $

 30,102

  

 

 
 Foreign currency translation adjustment

  

  

 (440

 )

  

  

 6,728

  

  

  

 1,310

  

  

  

 11,344

  

 

 
 Comprehensive income

  

 $

 24,591

  

  

 $

 22,073

  

  

 $

 9,670

  

  

 $

 41,446

  

 

 (a) Cost of revenues excludes depreciation and amortization.
 
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

 2

 
  

 Innovex International, Inc.
Condensed Consolidated Statements of Changes in Stockholders’ Equity
(Unaudited)
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
  

 Common Stock

  

 Additional

  

  

  

 Accumulated
Other

  

 Total

  

 

 
 (in thousands, except share amounts)

 Shares

  

 Amount

  

 Paid-in
Capital

  

 Retained
Earnings

  

 Comprehensive
Income/(Loss)

  

 Stockholders’
Equity

  

 

 
 For the three months ended June 30, 2025

  

  

  

  

  

  

  

  

  

  

  

  

 

 
 Balance at March 31, 2025

  

 69,337,922

  

 $

 693

  

 $

 756,548

  

 $

 225,382

  

 $

 (4,247

 )

 $

 978,376

  

 

 
 Stock-based compensation

  

 —

  

  

 —

  

  

 3,758

  

  

 —

  

  

 —

  

  

 3,758

  

 

 
 Foreign currency translation adjustment

  

 —

  

  

 —

  

  

 —

  

  

 —

  

  

 6,728

  

  

 6,728

  

 

 
 Net income

  

 —

  

  

 —

  

  

 —

  

  

 15,345

  

  

 —

  

  

 15,345

  

 

 
 Equity award vestings

  

 29,719

  

  

 1

  

  

 —

  

  

 —

  

  

 —

  

  

 1

  

 

 
 Repurchase and retirement of common stock

  

 (588,488

 )

  

 (6

 )

  

 —

  

  

 (8,649

 )

  

 —

  

  

 (8,655

 )

 

 
 Balance at June 30, 2025

  

 68,779,153

  

 $

 688

  

 $

 760,306

  

 $

 232,078

  

 $

 2,481

  

 $

 995,553

  

 

 
  

  

  

  

  

  

  

  

  

  

  

  

  

 

 
 For the three months ended June 30, 2026

  

  

  

  

  

  

  

  

  

  

  

  

 

 
 Balance at March 31, 2026

  

 68,635,016

  

 $

 686

  

 $

 769,905

  

 $

 254,480

  

 $

 5,834

  

 $

 1,030,905

  

 

 
 Stock-based compensation

  

 —

  

  

 —

  

  

 3,391

  

  

 —

  

  

 —

  

  

 3,391

  

 

 
 Foreign currency translation adjustment

  

 —

  

  

 —

  

  

 —

  

  

 —

  

  

 (440

 )

  

 (440

 )

 

 
 Net income

  

 —

  

  

 —

  

  

 —

  

  

 25,031

  

  

 —

  

  

 25,031

  

 

 
 Equity award vestings

  

 256,467

  

  

 3

  

  

 (3

 )

  

 —

  

  

 —

  

  

 —

  

 

 
 Shares withheld related to net settlement of equity awards

  

 (15,627

 )

  

 —

  

  

 (388

 )

  

 —

  

  

 —

  

  

 (388

 )

 

 
 Balance at June 30, 2026

  

 68,875,856

  

 $

 689

  

 $

 772,905

  

 $

 279,511

  

 $

 5,394

  

 $

 1,058,499

  

 

  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
  

 Common Stock

  

 Additional

  

  

  

 Accumulated
Other

  

 Total

  

 

 
 (in thousands, except share amounts)

 Shares

  

 Amount

  

 Paid-in
Capital

  

 Retained
Earnings

  

 Comprehensive
Income/(Loss)

  

 Stockholders’
Equity

  

 

 
 For the six months ended June 30, 2025

  

  

  

  

  

  

  

  

  

  

  

  

 

 
 Balance at December 31, 2024

  

 69,178,263

  

 $

 692

  

 $

 755,077

  

 $

 211,250

  

 $

 (8,863

 )

 $

 958,156

  

 

 
 Stock-based compensation

  

 —

  

  

 —

  

  

 5,525

  

  

 —

  

  

 —

  

  

 5,525

  

 

 
 Foreign currency translation adjustment

  

 —

  

  

 —

  

  

 —

  

  

 —

  

  

 11,344

  

  

 11,344

  

 

 
 Net income

  

 —

  

  

 —

  

  

 —

  

  

 30,102

  

  

 —

  

  

 30,102

  

 

 
 Equity award vestings

  

 242,036

  

  

 2

  

  

 (2

 )

  

 —

  

  

 —

  

  

 —

  

 

 
 Shares withheld related to net settlement of equity awards

  

 (16,615

 )

  

 —

  

  

 (294

 )

  

 —

  

  

 —

  

  

 (294

 )

 

 
 Repurchase and retirement of common stock

  

 (624,531

 )

  

 (6

 )

  

 —

  

  

 (9,274

 )

  

 —

  

  

 (9,280

 )

 

 
 Balance at June 30, 2025

  

 68,779,153

  

 $

 688

  

 $

 760,306

  

 $

 232,078

  

 $

 2,481

  

 $

 995,553

  

 

 
  

  

  

  

  

  

  

  

  

  

  

  

  

 

 
 For the six months ended June 30, 2026

  

  

  

  

  

  

  

  

  

  

  

  

 

 
 Balance at December 31, 2025

  

 69,077,237

  

  

 691

  

  

 767,650

  

  

 285,274

  

  

 4,084

  

  

 1,057,699

  

 

 
 Stock-based compensation

  

 —

  

  

 —

  

  

 6,358

  

  

 —

  

  

 —

  

  

 6,358

  

 

 
 Foreign currency translation adjustment

  

 —

  

  

 —

  

  

 —

  

  

 —

  

  

 1,310

  

  

 1,310

  

 

 
 Net income

  

 —

  

  

 —

  

  

 —

  

  

 8,360

  

  

 —

  

  

 8,360

  

 

 
 Equity award vestings

  

 420,504

  

  

 4

  

  

 (4

 )

  

 —

  

  

 —

  

  

 —

  

 

 
 Shares withheld related to net settlement of equity awards

  

 (46,885

 )

  

 —

  

  

 (1,099

 )

  

 —

  

  

 —

  

  

 (1,099

 )

 

 
 Repurchase and retirement of common stock

  

 (575,000

 )

  

 (6

 )

  

 —

  

  

 (14,123

 )

  

 —

  

  

 (14,129

 )

 

 
 Balance at June 30, 2026

  

 68,875,856

  

 $

 689

  

 $

 772,905

  

 $

 279,511

  

 $

 5,394

  

 $

 1,058,499

  

 

  
 
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

 3

 
  

 Innovex International, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
 

 
 
 
 
 
 
 
 
 
 
 
 

 
 

  

 Six Months Ended June 30,

  

 

 
 (in thousands)

  

 2026

  

  

 2025

  

 

 
 Cash flows from operating activities

  

  

  

  

  

  

 

 
 Net income

  

 $

 8,360

  

  

 $

 30,102

  

 

 
 Adjustments to reconcile net income to net cash provided by (used in) operating activities:

  

 

 
 Depreciation and amortization

  

  

 32,435

  

  

  

 29,919

  

 

 
 Deferred debt issuance cost amortization

  

  

 146

  

  

  

 171

  

 

 
 Amortization of operating lease ROU asset

  

  

 6,590

  

  

  

 5,972

  

 

 
 Impairment of long-lived assets

  

  

 —

  

  

  

 3,427

  

 

 
 Provision for legal settlement

  

  

 51,607

  

  

  

 —

  

 

 
 Stock-based compensation expense

  

  

 6,358

  

  

  

 5,525

  

 

 
 Gain on sale of property, equipment and lease terminations

  

  

 (11,922

 )

  

  

 (487

 )

 

 
 Deferred tax, net

  

  

 13,673

  

  

  

 13,893

  

 

 
 Changes in operating assets and liabilities, net of amounts related to acquisitions:

  

 

 
 Trade receivables, net

  

  

 (3,084

 )

  

  

 7,839

  

 

 
 Inventories

  

  

 (14,865

 )

  

  

 14,464

  

 

 
 Prepaid expenses and other current assets

  

  

 (22,212

 )

  

  

 (5,795

 )

 

 
 Other long-term assets

  

  

 322

  

  

  

 (1,112

 )

 

 
 Accounts payable

  

  

 15,731

  

  

  

 (7,189

 )

 

 
 Accrued expenses and other current liabilities

  

  

 (11,829

 )

  

  

 (12,298

 )

 

 
 Other operating assets and liabilities, net

  

  

 (14,442

 )

  

  

 5,869

  

 

 
 Net cash provided by operating activities

  

  

 56,868

  

  

  

 90,300

  

 

 
 Cash flows from investing activities

  

  

  

  

  

  

 

 
 Payments on acquisitions, net of cash acquired

  

  

 (12,041

 )

  

  

 (80,669

 )

 

 
 Capital expenditures

  

  

 (12,468

 )

  

  

 (14,353

 )

 

 
 Proceeds from sale of property and equipment

  

  

 5,664

  

  

  

 8,684

  

 

 
 Net cash used in investing activities

  

  

 (18,845

 )

  

  

 (86,338

 )

 

 
 Cash flows from financing activities

  

  

  

  

  

  

 

 
 Deferred debt issuance cost

  

  

 —

  

  

  

 (1,455

 )

 

 
 Revolving credit facility borrowings

  

  

 —

  

  

  

 136,200

  

 

 
 Revolving credit facility payments

  

  

 —

  

  

  

 (121,200

 )

 

 
 Term loan payments

  

  

 —

  

  

  

 (11,429

 )

 

 
 Payments on finance leases

  

  

 (4,069

 )

  

  

 (3,499

 )

 

 
 Common stock repurchased and retired

  

  

 (14,129

 )

  

  

 (9,280

 )

 

 
 Taxes paid related to net share settlement of equity awards

  

  

 (1,099

 )

  

  

 (294

 )

 

 
 Net cash used in financing activities

  

  

 (19,297

 )

  

  

 (10,957

 )

 

 
 Effect of exchange rate changes

  

  

 (78

 )

  

  

 2,498

  

 

 
 Net change in cash and restricted cash

  

  

 18,648

  

  

  

 (4,497

 )

 

 
 Cash and restricted cash beginning of period

  

  

 203,407

  

  

  

 73,278

  

 

 
 Cash and restricted cash end of period

  

 $

 222,055

  

  

 $

 68,781

  

 

 
 Supplemental cash flow information:

  

  

  

  

  

  

 

 
 Cash paid for interest

  

 $

 —

  

  

 $

 720

  

 

 
 Cash paid (received) for income taxes, net of refunds

  

  

 (54

 )

  

  

 8,116

  

 

 
 Non-cash investing and financing activities:

  

  

  

  

  

  

 

 
 Property and equipment purchases in accounts payable

  

 $

 716

  

  

 $

 1,623

  

 

 
 Operating lease assets obtained in exchange for lease obligations

  

  

 4,104

  

  

  

 8,927

  

 

 
 Finance lease assets obtained in exchange for lease obligations

  

  

 3,591

  

  

  

 6,364

  

 

  
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

 4

 
  

 Innovex International, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
NOTE 1. SUMMARY OF BUSINESS
Description of Business
Innovex International, Inc. (“Innovex”, the “Company”, the “Combined Company”, or “we”) designs, manufactures, sells, and rents a broad suite of well-centric, engineered products to the global oil and natural gas industry. Our products are sold and rented to international oil companies, national oil companies, independent exploration and production companies, and multinational service companies. The products we provide have applications across the well lifecycle for both onshore and offshore oil and natural gas wells, including well construction, well completion, and well production and intervention applications. Our corporate office is located in Humble, Texas.
On March 18, 2024, Innovex Downhole Solutions, Inc., a Delaware corporation (“Legacy Innovex”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Dril-Quip, Inc., a Delaware corporation (“Dril-Quip”), Ironman Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of Dril-Quip, and DQ Merger Sub, LLC, a Delaware limited liability company and wholly owned subsidiary of Dril-Quip. On September 6, 2024, the transactions contemplated in the Merger Agreement (the “Merger”) were consummated. Following the Merger, Legacy Innovex became a wholly owned subsidiary of Dril-Quip, and the name “Dril-Quip, Inc.” was changed to “Innovex International, Inc.” The Company’s stock remained listed on the New York Stock Exchange, and its symbol was changed to “INVX”. Except as otherwise indicated, references herein to “Dril-Quip” are to Dril-Quip, Inc. prior to the completion of the Merger. See our Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 24, 2026 (the “Annual Report”) for further details.
The Merger was accounted for using the acquisition method of accounting with Legacy Innovex being identified as the accounting acquirer. 
In connection with the consummation of the Merger, the outstanding shares of common stock, par value $0.01 per share, of Legacy Innovex (the “Legacy Innovex Common Stock”) were converted into the right to receive 32,183,966 shares of common stock, par value $0.01 per share, of the Company (the “Company Common Stock”). The number of shares of Company Common Stock received for each share of Legacy Innovex Common Stock by the Legacy Innovex shareholders was equal to 2.0125.
On November 29, 2024, we acquired the remaining 80% of the issued and outstanding equity securities of Downhole Well Solutions, LLC (“DWS”) for a mixture of cash and equity consideration, resulting in DWS becoming a wholly owned subsidiary of Innovex. See our Annual Report for further details.
On February 7, 2025, we acquired SCF Machining Corporation (“SCF”) for cash, resulting in SCF becoming a wholly owned subsidiary of Innovex. Refer to Note 3. Mergers and Acquisitions for further details.
On February 25, 2025, our Board of Directors (the “Board”) approved a share repurchase program (the “Share Repurchase Program”) that authorizes repurchases of up to an aggregate of $100 million of outstanding Company Common Stock. In connection with the Share Repurchase Program, all share repurchase plans previously authorized by the board of directors of Dril-Quip were terminated. The Share Repurchase Program does not require the Company to repurchase a specific number of shares or have an expiration date. Any shares repurchased under the Share Repurchase Program will be cancelled.
In the second quarter of 2025, our certificate of incorporation was amended to increase the number of shares of capital stock authorized for issuance. Prior to the amendment, the certificate of incorporation authorized the Company to issue 110,000,000 shares of capital stock, consisting of (i) 100,000,000 shares of Company Common Stock, par value $0.01 per share, and (ii) 10,000,000 shares of preferred stock, par value $0.01 per share. The amendment increased the number of authorized shares of Company Common Stock to 200,000,000 and correspondingly increased the number of authorized shares of our capital stock to 210,000,000; the authorized number of shares of our preferred stock remained at 10,000,000.
On May 30, 2025, we acquired Citadel Casing Solutions, LLC (“Citadel”) for cash, resulting in Citadel becoming a wholly owned subsidiary of Innovex. Refer to Note 3. Mergers and Acquisitions for further details.
On September 23, 2025, we completed the sale of the Eldridge facility and associated assets, resulting in the recognition of a gain on the sale of these assets. See our Annual Report for further details.

 5

 
  

 On February 25, 2026, Innovex and certain affiliates of Amberjack Capital Partners, L.P. (the “selling stockholders”) entered into an underwriting agreement with J.P. Morgan Securities LLC acting as book-running manager for the offering and as representative of the underwriters, relating to the offer and sale by the selling stockholders of 5,750,000 shares of Company Common Stock at a price to the public of $25.75 per share (the “February 2026 Secondary Offering”), pursuant to the Company’s effective Registration Statement on Form S-3 (File No. 333-282178). The selling stockholders granted the underwriters the option to purchase, within 30 days from the date of the underwriting agreement, an additional 862,500 shares of Company Common Stock, which was exercised in full. The underwriting agreement also provided for the Company’s purchase from the underwriters and simultaneous retirement of 575,000 shares out of the 5,750,000 shares for an aggregate purchase price of approximately $14.1 million (the "Share Repurchase"). The February 2026 Secondary Offering and Share Repurchase was completed on February 27, 2026. The Company did not receive any proceeds from the February 2026 Secondary Offering.
On April 10, 2026, we acquired Drilling Innovative Solutions, LLC (“DIS”) for cash, resulting in DIS becoming a wholly owned subsidiary of Innovex. Refer to Note 3. Mergers and Acquisitions for further details. 
 
On June 15, 2026, Innovex entered into a Share Purchase Agreement (the “Purchase Agreement”) with Rieber & Søn AS, a Norwegian private limited liability company (the “Seller”), pursuant to which the Company agreed to acquire from the Seller all of the issued shares (other than treasury shares) of TCO Group AS, a Norwegian private limited liability company (“TCO Group”). The acquisition closed on July 1, 2026. TCO Group is engaged in the development, manufacturing, and supply of equipment, tools, and related services to the oil and gas industry. TCO Group’s product offering includes completion barrier plugs, tubing-conveyed perforating services, chemical injection systems and annulus pressure relief systems. These products are used in well completion and testing, perforation services, targeted downhole chemical delivery and automatic relief of trapped pressure between casing strings.
 
The aggregate purchase price for the acquisition was equal to the Norwegian krone equivalent of approximately $95 million. The purchase price consisted of: (i) 1,060,713 shares of Company Common Stock, valued at approximately $30 million based on the average of the volume weighted average trading prices of the Company Common Stock on the New York Stock Exchange over the 15 trading days immediately preceding June 15, 2026, and (ii) $65 million in cash, subject to certain adjustments. 
 
Due to the proximity of the acquisition date to the issuance of these financial statements, the initial accounting for the business combination is incomplete. The Company has not yet completed the purchase price allocation for this transaction nor the corresponding unaudited pro forma condensed combined financial statements as the financial information has not been finalized. Disclosures related to the identification and measurement of identifiable assets acquired and liabilities assumed, including the allocation of the purchase price and the determination of goodwill, along with unaudited pro forma financial information, will be provided in the third quarter of 2026. 
Basis of Presentation
The accompanying Condensed Consolidated Financial Statements have been prepared in conformity with accounting principles generally accepted in the United States (“U.S. GAAP” or “GAAP”) for interim financial information. The Condensed Consolidated Financial Statements include the accounts of our subsidiaries where we have control over operating and financial policies. Investments in unconsolidated affiliates, if any, in which the Company can exercise significant influence, but does not own a controlling financial interest, are accounted for using the equity method of accounting. These Condensed Consolidated Financial Statements should be read in conjunction with our financial statements and related notes thereto for the year ended December 31, 2025 (the “Audited Financial Statements”) included in our Annual Report. In the opinion of management, these Condensed Consolidated Financial Statements reflect all normal, recurring adjustments necessary for a fair statement of the interim periods presented. The results of operations for interim periods are not necessarily indicative of those for a full year. All intercompany accounts and transactions have been eliminated for purposes of preparing these Condensed Consolidated Financial Statements.

 
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Our significant accounting policies are described in Note 2. Summary of Significant Accounting Policies in the Audited Financial Statements.
Segment Information
We operate in one reportable segment. Our chief operating decision maker (“CODM”) is our Chief Executive Officer. Our CODM assesses performance and allocates resources based on financial information presented at a consolidated level. The types of products and services from which we derive our revenues are disclosed under “Revenue Recognition” within our Annual Report. We derive revenue globally, and our manufacturing and engineering capabilities exist in multiple locations, but these costs are managed centrally as manufactured parts and engineering capabilities are used to support the global company. The CODM assesses performance for the single reportable segment, which represents the consolidated global entity, based on net income which is reported in our Condensed Consolidated Statements of Operations and Comprehensive Income. The measure of segment assets is reported in our Condensed Consolidated Balance Sheets as total consolidated assets.

 6

 
  

 Our CODM uses net income to evaluate the profitability of our business operations, evaluate our return on capital, and to compare our operating performance to our competitor