KLX Energy Services Holdings, Inc.KLXE
KLX Energy Services Holdings, Inc. Stock Compensation Disclosure
Equity and Stock-Based Compensation
Equity Distribution Agreement
On June 14, 2021, the Company entered into an Equity Distribution Agreement (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, 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 (the “EDA Amendment”). Among other things, the EDA Amendment allows for debt for equity exchanges in accordance with Section 3(a)(9) of the Securities Act.
Shares of Common Stock offered and sold in the ATM Offering were issued pursuant to the Company's shelf registration statement on Form S-3 (Registration No. 333-256149) filed with the SEC on May 14, 2021 and declared effective on June 11, 2021 (the “Registration Statement”), the prospectus supplement relating to the ATM Offering filed with the SEC on June 14, 2021 and any applicable additional prospectus supplements related to the ATM Offering that form a part of the Registration Statement. The Registration Statement expired on June 11, 2024 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.
The Equity Distribution Agreement contains customary representations, warranties and agreements by the Company, indemnification obligations of the Company and the Agent, including for liabilities under the Securities Act, other obligations of the parties and termination provisions. 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.
The Company used the net proceeds from the ATM Offering, after deducting the Agent’s commissions and the Company’s offering expenses, for general corporate purposes, which included funding acquisitions, capital expenditures and working capital.
During the three and twelve months ended December 31, 2024, the Company did not sell any shares of Common Stock and incurred legal and administrative fees of $0.3 and $0.5, respectively. During the three and twelve months ended December 31, 2023, the Company did not sell any shares of Common Stock and incurred legal and administrative fees of $0.1 and $0.5, respectively.
The Company has a Long-Term Incentive Plan (“LTIP”) under which the Compensation Committee has the authority to grant stock options, stock appreciation rights, restricted stock, restricted stock units or other forms of equity-based or equity-related awards. Compensation cost for the LTIP grants is generally recorded on a straight-line basis over the vesting term of the shares based on the grant date value using the closing trading price.
An amendment to the LTIP was approved by stockholders on May 10, 2023 to, among other things, increase the total number of shares of Common Stock for issuance by 1,200,000 shares, resulting in an increase of the total number of shares of our Common Stock reserved for issuance to 1,256,289, and extend the expiration date to March 8, 2033.
Stock-based compensation cost recognized during the years ended December 31, 2024 and December 31, 2023 related to grants of restricted stock granted by or approved by the Compensation Committee. Stock-based compensation was $3.9 and $3.0 for the years ended December 31, 2024 and December 31, 2023, respectively. Unrecognized compensation cost related to restricted stock awards made by the Company was $3.9 at December 31, 2024 and $4.2 at December 31, 2023.
The following table summarizes shares of restricted stock awards that were granted, vested, forfeited and outstanding:
| Year Ended | |||||||||||||||||||||||||||||||||||
December 31, 2024 | December 31, 2023 | ||||||||||||||||||||||||||||||||||
| Number of Shares (in thousands) | Weighted Average Grant Date Fair Value per Share | Weighted Average Remaining vesting Period (in years) | Number of Shares (in thousands) | Weighted Average Grant Date Fair Value per Share | Weighted Average Remaining vesting Period (in years) | ||||||||||||||||||||||||||||||
| Outstanding, beginning of period | 550 | $ | 11.81 | 1.20 | 511 | $ | 11.86 | 2.00 | |||||||||||||||||||||||||||
| Shares granted | 441 | 9.26 | 278 | 11.48 | |||||||||||||||||||||||||||||||
| Shares vested | (249) | 12.35 | (233) | 11.28 | |||||||||||||||||||||||||||||||
| Shares forfeited | (21) | 9.44 | (6) | 9.87 | |||||||||||||||||||||||||||||||
| Outstanding, end of period | 721 | $ | 9.98 | 1.42 | 550 | $ | 11.81 | 1.20 | |||||||||||||||||||||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2024 | Mar 13, 2025 | Showing above |
| 2021 | Apr 28, 2021 | |
About Stock Compensation Disclosures
Stock-based compensation disclosures detail the equity awards granted to employees and executives — including stock options, restricted stock units (RSUs), and performance shares — along with the valuation methods and assumptions used to expense them. This section reveals the true cost of talent retention and the alignment between management incentives and shareholder interests.
Key signals: total unrecognized compensation expense and its expected recognition period signal future earnings headwinds from already-granted awards. For stock options, examine Black-Scholes assumptions — expected volatility, risk-free rate, and expected term — as understating any of these reduces reported compensation expense. Compare stock compensation expense as a percentage of revenue against peers to assess dilution cost. Watch vesting schedules for acceleration clauses tied to change-of-control events. Performance-based awards with undemanding targets may indicate weak governance. Add back stock compensation to operating cash flow to calculate a more conservative free cash flow figure.