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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the Quarterly Period ended March 31, 2007
 OR
 o
    
    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: 000-19580
 T-3 ENERGY SERVICES, INC.
  Delaware
    
    76-0697390(State or Other Jurisdiction
    
    (IRS Employerof Incorporation or Organization)
    
    Identification No.)7135 Ardmore, Houston, Texas
    
    77054(Address of Principal Executive Offices)
    
    (Zip Code)
 (713) 996-4110
 þ o
  o o þ
 o þ




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TABLE OF CONTENTS
 FORM 10-Q
 PART I
 Item
    
    
    
    Page1. Financial StatementsCondensed Consolidated Balance Sheets as of March 31, 2007 and December 31, 2006
    
    
    1Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2007 and 2006
    
    
    2Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2007 and 2006
    
    
    3Condensed Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2007 and 2006
    
    
    4Notes to Condensed Consolidated Financial Statements
    
    
    52. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    133. Quantitative and Qualitative Disclosures about Market Risk
    
    
    224. Controls and Procedures
    
    
    22PART II1. Legal Proceedings
    
    
    231A. Risk Factors
    
    
    232. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    303. Defaults Upon Senior Securities
    
    
    304. Submission of Matters to a Vote of Security Holders
    
    
    305. Other Information
    
    
    306. Exhibits
    
    
    30Certification of CEO Pursuant to Rule 13a-14(a) or Rule 15d-14(a)Certification of CFO Pursuant to Rule 13a-14(a) or Rule 15d-14(a)Certification of CEO Pursuant to Section 906Certification of CFO Pursuant to Section 906
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T-3 ENERGY SERVICES, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 (in thousands except for share amounts)
 March 31,
    
    
    December 31,2007
    
    
    2006(unaudited)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    3,180
    
    
    $
    3,393Accounts receivable  trade, net
    
    
    33,929
    
    
    
    25,634Inventories
    
    
    31,335
    
    
    
    27,227Notes receivable, current portion
    
    
    14
    
    
    
    14Deferred income taxes
    
    
    2,184
    
    
    
    2,208Prepaids and other current assets
    
    
    2,899
    
    
    
    5,557Total current assets
    
    
    73,541
    
    
    
    64,033Property and equipment, net
    
    
    24,406
    
    
    
    24,639Notes receivable, less current portion
    
    
    325
    
    
    
    325Goodwill, net
    
    
    70,644
    
    
    
    70,569Other intangible assets, net
    
    
    2,399
    
    
    
    2,510Other assets
    
    
    678
    
    
    
    567Total assets
    
    $
    171,993
    
    
    $
    162,643LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable  trade
    
    $
    14,987
    
    
    $
    14,453Accrued expenses and other
    
    
    14,778
    
    
    
    14,457Current maturities of long-term debt
    
    
    1,643
    
    
    
    85Total current liabilities
    
    
    31,408
    
    
    
    28,995Long-term debt, less current maturities
    
    
    
    
    
    
    Other long-term liabilities
    
    
    1,129
    
    
    
    34Deferred income taxes
    
    
    3,967
    
    
    
    3,454Commitments and contingenciesStockholders equity:Preferred stock, $.001 par value, 5,000,000 shares
authorized, no
shares issued or outstanding
    
    
    
    
    
    
    Common stock, $.001 par value, 20,000,000 shares authorized,
10,763,131 and 10,762,016 shares issued and outstanding
at March 31, 2007 and December 31, 2006, respectively
    
    
    11
    
    
    
    11Warrants, 327,862 issued and outstanding
    
    
    644
    
    
    
    644Additional paid-in capital
    
    
    126,663
    
    
    
    126,054Retained earnings
    
    
    7,288
    
    
    
    2,672Accumulated other comprehensive income
    
    
    883
    
    
    
    779Total stockholders equity
    
    
    135,489
    
    
    
    130,160Total liabilities and stockholders equity
    
    $
    171,993
    
    
    $
    162,643
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T-3 ENERGY SERVICES, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
 (in thousands except per share amounts)
 Three Months EndedMarch 31,2007
    
    
    2006Revenues:Products
    
    $
    37,839
    
    
    $
    25,001Services
    
    
    10,061
    
    
    
    10,68247,900
    
    
    
    35,683Cost of revenues:Products
    
    
    24,313
    
    
    
    16,246Services
    
    
    6,236
    
    
    
    6,31330,549
    
    
    
    22,559Gross profit
    
    
    17,351
    
    
    
    13,124Operating expenses
    
    
    8,488
    
    
    
    6,907Income from operations
    
    
    8,863
    
    
    
    6,217Interest expense
    
    
    153
    
    
    
    256Interest income
    
    
    (22
    )
    
    
    (6
    )Equity in (earnings) loss of unconsolidated affiliate
    
    
    16
    
    
    
    Other (income) expense, net
    
    
    (17
    )
    
    
    (84
    )Income from continuing operations before provision for
income taxes
    
    
    8,733
    
    
    
    6,051Provision for income taxes
    
    
    3,234
    
    
    
    2,187Income from continuing operations
    
    
    5,499
    
    
    
    3,864Loss from discontinued operations, net of tax
    
    
    
    
    
    
    (80
    )Net income
    
    $
    5,499
    
    
    $
    3,784Basic earnings (loss) per common share:Continuing operations
    
    $
    .51
    
    
    $
    .37Discontinued operations
    
    
    
    
    
    
    (.01
    )Net income (loss) per common share
    
    $
    .51
    
    
    $
    .36Diluted earnings (loss) per common share:Continuing operations
    
    $
    .51
    
    
    $
    .36Discontinued operations
    
    
    
    
    
    
    (.01
    )Net income (loss) per common share
    
    $
    .51
    
    
    $
    .35Weighted average common shares outstanding:Basic
    
    
    10,684
    
    
    
    10,584Diluted
    
    
    10,888
    
    
    
    10,696
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T-3 ENERGY SERVICES, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
 (in thousands)
 Three Months EndedMarch 31,2007
    
    
    2006Cash flows from operating activities:Net income
    
    $
    5,499
    
    
    $
    3,784Adjustments to reconcile net income to net cash
provided by (used in) operating activities:Loss from discontinued operations, net of tax
    
    
    
    
    
    
    80Bad debt expense
    
    
    9
    
    
    
    (18
    )Depreciation and amortization
    
    
    1,021
    
    
    
    807Amortization of deferred loan costs
    
    
    63
    
    
    
    62Loss on sale of assets
    
    
    9
    
    
    
    10Deferred taxes
    
    
    309
    
    
    
    1,086Equity in (earnings) loss of unconsolidated affiliate
    
    
    16
    
    
    
    Employee stock-based compensation expense
    
    
    596
    
    
    
    237Amortization of stock compensation
    
    
    
    
    
    
    1Excess tax benefits from stock-based compensation
    
    
    (4
    )
    
    
    (9
    )Changes in assets and liabilities, net of effect of
acquisitions and dispositions:Accounts receivable  trade
    
    
    (8,262
    )
    
    
    (1,408
    )Inventories
    
    
    (4,075
    )
    
    
    (3,310
    )Prepaids and other current assets
    
    
    3,418
    
    
    
    1,290Other assets
    
    
    (197
    )
    
    
    (11
    )Accounts payable  trade
    
    
    514
    
    
    
    1,529Accrued expenses and other
    
    
    (40
    )
    
    
    (353
    )Net cash provided by (used in) operating activities
    
    
    (1,124
    )
    
    
    3,777Cash flows from investing activities:Purchases of property and equipment
    
    
    (674
    )
    
    
    (2,493
    )Proceeds from sales of property and equipment
    
    
    17
    
    
    
    135Cash paid for acquisitions, net of cash acquired
    
    
    
    
    
    
    (2,248
    )Collections on notes receivable
    
    
    
    
    
    
    13Net cash used in investing activities
    
    
    (657
    )
    
    
    (4,593
    )Cash flows from financing activities:Net borrowings (repayments) under revolving credit facility
    
    
    1,558
    
    
    
    513Payments on long-term debt
    
    
    
    
    
    
    (12
    )Proceeds from exercise of stock options
    
    
    8
    
    
    
    37Excess tax benefits from stock-based compensation
    
    
    4
    
    
    
    9Net cash provided by financing activities
    
    
    1,570
    
    
    
    547Effect of exchange rate changes on cash and cash equivalents
    
    
    (2
    )
    
    
    5Cash flows of discontinued operations:Operating cash flows
    
    
    
    
    
    
    (80
    )Investing cash flows
    
    
    
    
    
    
    Financing cash flows
    
    
    
    
    
    
    Net cash used in discontinued operations
    
    
    
    
    
    
    (80
    )Net decrease in cash and cash equivalents
    
    
    (213
    )
    
    
    (344
    )Cash and cash equivalents, beginning of period
    
    
    3,393
    
    
    
    1,162Cash and cash equivalents, end of period
    
    $
    3,180
    
    
    $
    818
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T-3 ENERGY SERVICES, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
(in thousands)
 Three Months EndedMarch 31,2007
    
    
    2006Net income
    
    $
    5,499
    
    
    $
    3,784Other comprehensive income (loss):Foreign currency translation adjustment
    
    
    104
    
    
    
    (7
    )Comprehensive income
    
    $
    5,603
    
    
    $
    3,777
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T-3 ENERGY SERVICES, INC. AND SUBSIDIARIES
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 1. BASIS OF PRESENTATION
  Equity Method Investments
  Income Taxes
  New Accounting Pronouncements
 Fair Value Measurements
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2. BUSINESS COMBINATIONS AND DISPOSITIONS
 Business Combinations
    Fair value of tangible and intangible assets,
net of cash acquired
    
    $
    1,327Goodwill recorded
    
    
    1,309Total liabilities assumed
    
    
    (388
    )Common stock issued
    
    
    Cash paid for acquisitions, net of cash acquired
    
    $
    2,248
 Dispositions
   3. EQUITY INVESTMENT IN UNCONSOLIDATED AFFILIATE
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4. INVENTORIES
  March 31,
    
    
    December 31,2007
    
    
    2006Raw materials
    
    $
    5,185
    
    
    $
    4,547Work in process
    
    
    13,740
    
    
    
    11,826Finished goods and component parts
    
    
    12,410
    
    
    
    10,854$
    31,335
    
    
    $
    27,227
 5. DEBT
  6. EARNINGS (LOSS) PER SHARE
   Three Months EndedMarch 31,2007
    
    
    2006Numerator:Income from continuing operations
    
    $
    5,499
    
    
    $
    3,864Loss from discontinued operations
    
    
    
    
    
    
    (80
    )Net income
    
    $
    5,499
    
    
    $
    3,784
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Three Months EndedMarch 31,2007
    
    
    2006Denominator:Weighted average common shares outstanding  basic
    
    
    10,684
    
    
    
    10,584Shares for dilutive stock options, restricted stock and warrants
    
    
    204
    
    
    
    112Weighted average common shares outstanding  diluted
    
    
    10,888
    
    
    
    10,696Basic earnings (loss) per common share:Continuing operations
    
    $
    .51
    
    
    $
    .37Discontinued operations
    
    
    
    
    
    
    (.01
    )Net income per common share
    
    $
    .51
    
    
    $
    .36Diluted earnings (loss) per common share:Continuing operations
    
    $
    .51
    
    
    $
    .36Discontinued operations
    
    
    
    
    
    
    (.01
    )Net income per common share
    
    $
    .51
    
    
    $
    .35
  7. SEGMENT INFORMATION
    (dollars in thousands)PressureControl
    
    Corporate
    
    ConsolidatedThree months ended March 31:2007Revenues
    
    $
    47,900
    
    
    $
    
    
    
    $
    47,900Depreciation and amortization
    
    
    703
    
    
    
    318
    
    
    
    1,021Income (loss) from operations
    
    
    11,560
    
    
    
    (2,697
    )
    
    
    8,863Capital expenditures
    
    
    606
    
    
    
    68
    
    
    
    6742006Revenues
    
    $
    35,683
    
    
    $
    
    
    
    $
    35,683Depreciation and amortization
    
    
    580
    
    
    
    227
    
    
    
    807Income (loss) from operations
    
    
    8,807
    
    
    
    (2,590
    )
    
    
    6,217Capital expenditures
    
    
    2,374
    
    
    
    119
    
    
    
    2,493
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8. INCOME TAXES
    9. COMMITMENTS AND CONTINGENCIES
 th
 st
    9




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10. STOCKHOLDERS EQUITY
 Common Stock
   Warrants
   Additional Paid-In Capital
   Cumulative Effect of a Change in Accounting Principle
  11. STOCK-BASED COMPENSATION
  Stock Option Awards
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Three Months Ended
    
    Three Months EndedMarch 31,
    
    March 31,2007
    
    2006Expected volatility
    
    
    40.00
    %
    
    
    52.79
    %Risk-free interest rate
    
    
    4.68
    %
    
    
    4.42
    %Expected term (in years)
    
    
    5
    
    
    
    4
  Restricted Stock Awards
  12. SUBSEQUENT EVENT
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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 General
   Recent Developments
    Strategy
  
    
    Expand our manufacturing capacity through facility expansions and improvements. We have
expanded our manufacturing capacity to increase the volume and number of products we
manufacture, with an emphasis on our pressure and flow control product line. We invested
approximately $5.8 million during 2007 and 2006 on this expansion effort, which includes
increasing our BOP manufacturing capacity from ten to 25 units per month by upgrading and
expanding our machining capabilities at our existing facilities, along with our expansion
into Conway, Arkansas during 2007 and Buffalo and Tyler, Texas, Casper, Wyoming and
Indianapolis, Indiana by opening four facilities during 2006. We expect to invest up to
$9.2 million over the remainder of 2007 to expand capacity by:
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
    
    expanding our BOP repair capacity from 7 stacks per month to 11 stacks per month;
    
    opening additional facilities for our wellhead product line;
    
    opening additional facilities for our pipeline product line; and
    
    expanding our elastomer producing capacity in North America.
 
    
    Continue new product development. Since April 2003, we have introduced 43 new
products, and we will continue to focus on new product development across all of our
product lines, with a continued focus on pressure and flow control products and more
recently on wellhead products. To support our expansion, we have increased our engineering
department staff to 23 employees and contract personnel as of March 31, 2007, compared to
15 employees at March 31, 2006. A significant portion of this increase in engineering
staff is related to our increased focus on our wellhead product line.
    
    Expand our geographic areas of operation. We intend to expand our geographic areas of
operation, with particular focus on field services for our wellhead and pipeline product
lines. We are expanding our wellhead and pipeline repair and remanufacturing services by
establishing facilities in areas we believe will have high drilling activity, such as the
Barnett Shale in North Texas, the Cotton Valley trend in the East Texas Basin, the
Fayetteville Shale in the Arkoma Basin and the Rocky Mountain and Appalachian regions. For
example, during 2006, we continued our expansion into the Rocky Mountain region by
acquiring KC Machine LLC, located in Rock Springs, Wyoming, and opening a facility in
Casper, Wyoming. In addition, we expanded into the East Texas Region by opening two
facilities and the Midwest region by opening a facility in Indianapolis, Indiana. Also,
during 2007 we established a presence in the Arkoma Basin by opening a facility in Conway,
Arkansas.
    
    Pursue strategic acquisitions and alliances. Our acquisition strategy will focus on
broadening our markets and existing product offerings. For example, in the first quarter of
2007 we entered into an agreement with Gefro Oilfield Services ASA to market our products
and services and serve as an authorized repair center from their base in Stavanger, Norway.
In 2006, we acquired KC Machine LLC, located in Rock Springs, Wyoming, to continue our
expansion of our pressure and flow control, wellhead and pipeline products and services to
customers located in the Rocky Mountain region. We will continue to seek similar strategic
acquisition and alliance opportunities in the future.
 How We Generate Our Revenue
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How We Evaluate Our Operations
  
    
    revenue and facility output;
    
    material and labor expenses as a percentage of revenue;
    
    selling, general and administrative expenses as a percentage of revenue;
    
    EBITDA; and
    
    financial and operational models.
 Revenue and Facility Output
  Material and Labor Expenses as a Percentage of Revenue
   Selling, General and Administrative Expenses as a Percentage of Revenue
  EBITDA
  
    
    as a measure of operating performance that assists us in comparing our performance on a
consistent basis because it removes the impact of our capital structure and asset base
from our operating results;
    
    as a measure for budgeting and for evaluating actual results against our budgets;
    
    to assess compliance with financial ratios and covenants included in our senior credit facility;
    
    in communications with lenders concerning our financial performance; and
    
    to evaluate the viability of potential acquisitions and overall rates of return.
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Financial and Operational Models
  Loss Management
 Customer Satisfaction.
 Employee Productivity
 Management System Compliance
 How We Manage Our Operations
  
    
    safety and environmental management systems;
    
    quality management systems;
    
    statistical tracking systems; and
    
    inventory turnover rates.
 Safety and Environmental Management Systems
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Quality Management Systems
  Statistical Tracking Systems
  Inventory Turnover Rates
  Critical Accounting Policies and Estimates
    New Accounting Pronouncements
 Fair Value Measurements
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Outlook
  WTI
    
    Henry Hub
    
    United States
    
    Canada
    
    InternationalQuarter Ended:
    
    Oil
    
    Gas
    
    Rig Count
    
    Rig Count
    
    Rig CountMarch 31, 2005
    
    $
    49.73
    
    
    $
    6.47
    
    
    
    1,279
    
    
    
    521
    
    
    
    876June 30, 2005
    
    $
    53.05
    
    
    $
    6.95
    
    
    
    1,336
    
    
    
    241
    
    
    
    916September 30, 2005
    
    $
    63.19
    
    
    $
    9.64
    
    
    
    1,428
    
    
    
    497
    
    
    
    911December 31, 2005
    
    $
    60.00
    
    
    $
    12.80
    
    
    
    1,478
    
    
    
    572
    
    
    
    929March 31, 2006
    
    $
    63.27
    
    
    $
    7.91
    
    
    
    1,519
    
    
    
    665
    
    
    
    896June 30, 2006
    
    $
    70.41
    
    
    $
    6.65
    
    
    
    1,632
    
    
    
    282
    
    
    
    913September 30, 2006
    
    $
    70.42
    
    
    $
    6.17
    
    
    
    1,719
    
    
    
    494
    
    
    
    941December 31, 2006
    
    $
    59.98
    
    
    $
    7.24
    
    
    
    1,719
    
    
    
    440
    
    
    
    952March 31, 2007
    
    $
    58.08
    
    
    $
    7.17
    
    
    
    1,733
    
    
    
    532
    
    
    
    982
 
 Source: West Texas Intermediate Crude Average Spot Price for the Quarter indicated: Department of
Energy, Energy Information Administration (www.eia.doe.gov); NYMEX Henry Hub Natural Gas Average
Spot Price for the Quarter indicated: (www.oilnergy.com); Average Rig count for the Quarter
indicated: Baker Hughes, Inc. (www.bakerhughes.com).    18




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Results of Operations
 Three Months ended March 31, 2007 Compared with Three Months ended March 31, 2006
 Revenues.
 Cost of Revenues.
 Operating Expenses.
 Interest Expense.
 Income Taxes.
 Income from Continuing Operations.
 Liquidity and Capital Resources
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Net Cash Provided by (Used in) Operating Activities.
 Net Cash Used In Investing Activities.
 Net Cash Provided by Financing Activities.
 Principal Debt Instruments.
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Payments Due by PeriodLess than 1
    
    
    
    
    
    
    
    
    
    
    After 5Contractual Obligations
    
    Total
    
    
    Year
    
    
    2-3 Years
    
    
    4-5 Years
    
    
    YearsLong-term debt
    
    $
    1,643
    
    
    $
    1,643
    
    
    $
    
    
    
    $
    
    
    
    $
    Letters of credit
    
    
    179
    
    
    
    55
    
    
    
    124
    
    
    
    
    
    
    
    Operating leases
    
    
    5,447
    
    
    
    1,953
    
    
    
    2,566
    
    
    
    857
    
    
    
    71Total contractual obligations
    
    $
    7,269
    
    
    $
    3,651
    
    
    $
    2,690
    
    
    $
    857
    
    
    $
    71
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
 ITEM 4. CONTROLS AND PROCEDURES
 Evaluation of Disclosure Controls and Procedures
   Changes in Internal Controls Over Financial Reporting
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PART II
 
 Item 1. Legal Proceedings
  
 Item 1A. Risk Factors
   Risks Related to Our Business
 If we are unable to successfully manage our growth and implement our business plan, our results of
operations will be adversely affected.
  
    
    inability to integrate operations between existing and new or expanded facilities;
    
    lack of a sufficient number of qualified technical and operating personnel;
    
    shortage of operating equipment and raw materials necessary to operate our expanded
business; and
    
    managing the increased costs associated with our expansion.
 Our business depends on spending by the oil and gas industry, and this spending and our
business may be adversely affected by industry conditions that are beyond our control.
  
    
    the level of drilling activity;
    
    the level of oil and gas production;
    
    the demand for oil and gas related products;
    
    domestic and worldwide economic conditions;
    
    political instability in the Middle East and other oil producing regions;
    
    the actions of the Organization of Petroleum Exporting Countries;
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
    
    the price of foreign imports of oil and gas, including liquefied natural gas;
    
    natural disasters or weather conditions, such as hurricanes;
    
    technological advances affecting energy consumption;
    
    the level of oil and gas inventories;
    
    the cost of producing oil and gas;
    
    the price and availability of alternative fuels;
    
    merger and divestiture activity among oil and gas producers; and
    
    governmental regulation.
  A decline in or substantial volatility of oil and gas prices could adversely affect the demand
and prices for our products and services.
   We rely on a few key employees whose absence or loss could disrupt our operations or be
adverse to our business.
  Our inability to deliver our backlog on time could affect our future sales and profitability
and our relationships with our customers.
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Our industry has recently experienced shortages in the availability of qualified personnel. Any
difficulty we experience replacing or adding qualified personnel could adversely affect our
business.
  Shortages of raw materials may restrict our operations.
  We intend to expand our business through strategic acquisitions. Our acquisition
strategy exposes us to various risks, including those relating to difficulties in identifying
suitable acquisition opportunities and integrating businesses and the potential for increased
leverage or debt service requirements.
  
    
    unanticipated costs and exposure to unforeseen liabilities;
    
    difficulty in integrating the operations and assets of the acquired businesses;
    
    potential loss of key employees and customers of the acquired company;
    
    our ability to properly establish and maintain effective internal controls over an
acquired company; and
    
    risk of entering markets in which we have limited prior experience.
   The oilfield service industry in which we operate is highly competitive, which may result in a
loss of market share or a decrease in revenue or profit margins.
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If we do not develop and commercialize new competitive products, our revenue may decline.
  
    
    design and commercially produce products that meet the needs of our customers;
    
    successfully market new products; and
    
    protect our proprietary designs from our competitors.
   The cyclical nature of or a prolonged downturn in our industry could affect the carrying value of
our goodwill.
  We may be faced with product liability claims.
  Liability to customers under warranties may materially and adversely affect our earnings.
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Uninsured or underinsured claims or litigation or an increase in our insurance premiums could
adversely impact our results.
  Our operations are subject to stringent environmental laws and regulations that may expose us
to significant costs and liabilities.
   We will be subject to political, economic and other uncertainties as we expand our international
operations.
  
    
    political, social and economic instability;
    
    currency fluctuations; and
    
    government regulation that is beyond our control.
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If we are unable to complete our assessment of the adequacy of our internal control over
financial reporting as required by Section 404 of the Sarbanes-Oxley Act of 2002, investors could
lose confidence in the reliability of our financial statements, which could result in a decrease in
the value of our common stock.
  Risks Related to Our Common Stock
 The market price of our common stock may be volatile or may decline regardless of our
operating performance.
  
    
    actual or anticipated variations in quarterly operating results;
    
    announcements of technological advances by us or our competitors;
    
    current events affecting the political and economic environment in the United States;
    
    conditions or trends in our industry, including demand for our products and services,
technological advances and governmental regulations;
    
    litigation involving or affecting us;
    
    changes in financial estimates by us or by any securities analysts who might cover our stock; and
    
    additions or departures of our key personnel.
  We may incur increased costs as a result of no longer being a controlled company.
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Our ability to issue preferred stock could adversely affect the rights of holders of our common
stock.
  Certain provisions in our charter documents have anti-takeover effects.
  Because we have no plans to pay any dividends for the foreseeable future, investors must look
solely to stock appreciation for a return on their investment in us.
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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  
 Item 3. Defaults Upon Senior Securities
  
 Item 4. Submission of Matters to a Vote of Security Holders
  
 Item 5. Other Information
  
 Item 6. Exhibits
 Exhibit Number
    
    Identification of Exhibit31.1
    
    Certification of Chief Executive Officer pursuant to Rule 13a-14(a)
or Rule 15d-14(a), promulgated under the Securities Exchange Act of
1934, as amended31.2
    
    Certification of Chief Financial Officer pursuant to Rule 13a-14(a)
or Rule 15d-14(a), promulgated under the Securities Exchange Act of
1934, as amended32.1
    
    Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant
To Section 906 Of The Sarbanes-Oxley Act Of 2002 (Chief Executive
Officer)32.2
    
    Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant
To Section 906 Of The Sarbanes-Oxley Act Of 2002 (Chief Financial
Officer)
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SIGNATURES
 Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized, on the 7th day of May 2007.
 T-3 ENERGY SERVICES, INC.By:
    
    /s/ MICHAEL T. MINOMichael T. Mino (Chief Financial
Officer and Vice President)
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INDEX TO EXHIBITS
 ExhibitNumber
    
    Identification of Exhibit31.1*
    
    Certification of Chief Executive Officer pursuant to Rule
13a-14(a) or Rule 15d-14(a), promulgated under the Securities
Exchange Act of 1934, as amended31.2*
    
    Certification of Chief Financial Officer pursuant to Rule
13a-14(a) or Rule 15d-14(a), promulgated under the Securities
Exchange Act of 1934, as amended32.1*
    
    Certification Pursuant to 18 U.S.C. Section 1350, As Adopted
Pursuant To Section 906 Of The Sarbanes-Oxley Act Of 2002 (Chief
Executive Officer)32.2*
    
    Certification Pursuant to 18 U.S.C. Section 1350, As Adopted
Pursuant To Section 906 Of The Sarbanes-Oxley Act Of 2002 (Chief
Financial Officer)
 
 *
    
    Filed herewith.