##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-Q
 (Mark One)þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the Quarterly Period ended June 30, 2005o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For 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 þ




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TABLE OF CONTENTS
 FORM 10-Q
 PART I
 Item
    
    Page1. Financial StatementsCondensed Consolidated Balance Sheets as of June 30, 2005 and
December 31, 2004
    
    
    1Condensed Consolidated Statements of Operations for the Three and Six Months
Ended June 30, 2005 and 2004
    
    
    2Condensed Consolidated Statements of Cash Flows for the Six Months Ended
June 30, 2005 and 2004
    
    
    3Condensed Consolidated Statements of Comprehensive Income for the Three and
Six Months Ended June 30, 2005 and 2004
    
    
    4Notes to Condensed Consolidated Financial Statements
    
    
    52. Managements Discussion and Analysis of Financial Condition
and Results of Operations
    
    
    113. Quantitative and Qualitative Disclosures about Market Risks
    
    
    214. Controls and Procedures
    
    
    21PART II1. Legal Proceedings
    
    
    222. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    223. Defaults Upon Senior Securities
    
    
    224. Submission of Matters to a Vote of Security Holders
    
    
    225. Other Information
    
    
    226. Exhibits
    
    
    23Certificate of Amendment to Certificate of IncorporationCertification 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 pursuant to 18 U.S.C Section 1350 of CEOCertification pursuant to 18 U.S.C Section 1350 of CFO
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##### Table of Contents



T-3 ENERGY SERVICES, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands except for share amounts)
 June 30,
    
    December 31,2005
    
    2004(unaudited)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    313
    
    
    $
    95Accounts receivable  trade, net
    
    
    23,139
    
    
    
    21,145Inventories
    
    
    19,657
    
    
    
    16,399Notes receivable, current portion
    
    
    490
    
    
    
    1,173Deferred income taxes
    
    
    2,072
    
    
    
    2,086Prepaids and other current assets
    
    
    1,237
    
    
    
    3,194Total current assets
    
    
    46,908
    
    
    
    44,092Property and equipment, net
    
    
    19,014
    
    
    
    19,632Notes receivable, less current portion
    
    
    352
    
    
    
    365Goodwill, net
    
    
    72,935
    
    
    
    73,229Other intangible assets, net
    
    
    3,038
    
    
    
    3,445Other assets
    
    
    1,116
    
    
    
    1,578Total assets
    
    $
    143,363
    
    
    $
    142,341LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable  trade
    
    $
    12,834
    
    
    $
    10,383Accrued expenses and other
    
    
    6,955
    
    
    
    6,428Current maturities of long-term debt
    
    
    289
    
    
    
    44Total current liabilities
    
    
    20,078
    
    
    
    16,855Long-term debt, less current maturities
    
    
    13,685
    
    
    
    18,824Other long-term liabilities
    
    
    106
    
    
    
    130Deferred income taxes
    
    
    2,235
    
    
    
    2,216Commitments and contingenciesStockholders equity:Preferred stock, $.001 par value, 25,000,000 shares
authorized, no shares issued or outstanding
    
    
    
    
    
    
    Common stock, $.001 par value, 25,000,000 shares authorized at
June 30, 2005 and 50,000,000 shares authorized at
December 31,
2004, 10,581,986 shares issued and outstanding at June
30, 2005
and December 31, 2004
    
    
    11
    
    
    
    11Warrants, 327,862 issued and outstanding at June 30, 2005 and
517,862 issued and outstanding at December 31, 2004
    
    
    644
    
    
    
    853Additional paid-in capital
    
    
    123,174
    
    
    
    122,962Retained deficit
    
    
    (16,796
    )
    
    
    (19,933
    )Accumulated other comprehensive income
    
    
    226
    
    
    
    423Total stockholders equity
    
    
    107,259
    
    
    
    104,316Total liabilities and stockholders equity
    
    $
    143,363
    
    
    $
    142,341
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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 Ended
    
    Six Months EndedJune 30,
    
    June 30,2005
    
    2004
    
    2005
    
    2004Revenues:Products
    
    $
    23,090
    
    
    $
    22,379
    
    
    $
    43,815
    
    
    $
    39,864Services
    
    
    11,054
    
    
    
    5,860
    
    
    
    19,731
    
    
    
    11,66534,144
    
    
    
    28,239
    
    
    
    63,546
    
    
    
    51,529Cost of revenues:Products
    
    
    15,674
    
    
    
    15,869
    
    
    
    30,725
    
    
    
    28,387Services
    
    
    6,683
    
    
    
    4,032
    
    
    
    12,284
    
    
    
    7,51922,357
    
    
    
    19,901
    
    
    
    43,009
    
    
    
    35,906Gross profit
    
    
    11,787
    
    
    
    8,338
    
    
    
    20,537
    
    
    
    15,623Operating expenses
    
    
    7,319
    
    
    
    6,274
    
    
    
    14,234
    
    
    
    11,863Income from operations
    
    
    4,468
    
    
    
    2,064
    
    
    
    6,303
    
    
    
    3,760Interest expense
    
    
    793
    
    
    
    558
    
    
    
    1,324
    
    
    
    1,336Interest income
    
    
    31
    
    
    
    99
    
    
    
    54
    
    
    
    113Other (income) expense, net
    
    
    3
    
    
    
    73
    
    
    
    19
    
    
    
    58Income from continuing operations before
provision for income taxes
    
    
    3,703
    
    
    
    1,532
    
    
    
    5,014
    
    
    
    2,479Provision for income taxes
    
    
    1,331
    
    
    
    597
    
    
    
    1,905
    
    
    
    957Income from continuing operations
    
    
    2,372
    
    
    
    935
    
    
    
    3,109
    
    
    
    1,522Income (loss) from discontinued
operations, net of tax
    
    
    (5
    )
    
    
    (2,441
    )
    
    
    28
    
    
    
    (2,565
    )Net income (loss)
    
    $
    2,367
    
    
    $
    (1,506
    )
    
    $
    3,137
    
    
    $
    (1,043
    )Basic earnings (loss) per common share:Continuing operations
    
    $
    .22
    
    
    $
    .09
    
    
    $
    .29
    
    
    $
    .14Discontinued operations
    
    $
    
    
    
    $
    (.23
    )
    
    $
    .01
    
    
    $
    (.24
    )Net income (loss) per common share
    
    $
    .22
    
    
    $
    (.14
    )
    
    $
    .30
    
    
    $
    (.10
    )Diluted earnings (loss) per common share:Continuing operations
    
    $
    .22
    
    
    $
    .09
    
    
    $
    .29
    
    
    $
    .14Discontinued operations
    
    $
    
    
    
    $
    (.23
    )
    
    $
    .01
    
    
    $
    (.24
    )Net income (loss) per common share
    
    $
    .22
    
    
    $
    (.14
    )
    
    $
    .30
    
    
    $
    (.10
    )Weighted average common shares outstanding:Basic
    
    
    10,582
    
    
    
    10,582
    
    
    
    10,582
    
    
    
    10,582Diluted
    
    
    10,620
    
    
    
    10,587
    
    
    
    10,624
    
    
    
    10,588
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T-3 ENERGY SERVICES, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(in thousands)
 Six Months EndedJune 30,2005
    
    2004Cash flows from operating activities:Net income (loss)
    
    $
    3,137
    
    
    $
    (1,043
    )Adjustments to reconcile net income (loss) to net cash
provided by operating activities:(Income) loss from discontinued operations, net of tax
    
    
    (28
    )
    
    
    2,565Bad debt expense
    
    
    140
    
    
    
    246Depreciation and amortization
    
    
    1,747
    
    
    
    1,271Amortization of deferred loan costs
    
    
    173
    
    
    
    590Write-off of deferred loan costs
    
    
    370
    
    
    
    Loss on sale of assets
    
    
    18
    
    
    
    137Write-down of other intangible assets, net
    
    
    
    
    
    
    150Deferred taxes
    
    
    254
    
    
    
    (530
    )Amortization of stock compensation
    
    
    3
    
    
    
    3Changes in assets and liabilities:Accounts receivable  trade
    
    
    (2,183
    )
    
    
    (1,729
    )Inventories, net
    
    
    (3,287
    )
    
    
    (3,517
    )Prepaids and other current assets
    
    
    1,958
    
    
    
    1,196Notes receivable
    
    
    696
    
    
    
    106Other assets
    
    
    (109
    )
    
    
    11Accounts payable  trade
    
    
    2,438
    
    
    
    2,625Accrued expenses and other
    
    
    545
    
    
    
    (52
    )Assets held for sale, net
    
    
    
    
    
    
    119Net cash provided by operating activities
    
    
    5,872
    
    
    
    2,148Cash flows from investing activities:Purchases of property and equipment
    
    
    (833
    )
    
    
    (998
    )Proceeds from sales of property and equipment
    
    
    58
    
    
    
    491Net cash used in investing activities
    
    
    (775
    )
    
    
    (507
    )Cash flows from financing activities:Net borrowings under revolving credit facility
    
    
    10,128
    
    
    
    1,295Payments on long-term debt
    
    
    (15,022
    )
    
    
    (12,256
    )Net cash used in financing activities
    
    
    (4,894
    )
    
    
    (10,961
    )Effect of exchange rate changes on cash and cash equivalents
    
    
    17
    
    
    
    Net cash provided by (used in) discontinued operations
    
    
    (2
    )
    
    
    9,258Net decrease in restricted cash
    
    
    
    
    
    
    72Net increase in cash and cash equivalents
    
    
    218
    
    
    
    10Cash and cash equivalents, beginning of period
    
    
    95
    
    
    
    17Cash and cash equivalents, end of period
    
    $
    313
    
    
    $
    27
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T-3 ENERGY SERVICES, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
(in thousands)
 Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2005
    
    2004
    
    2005
    
    2004Net income (loss)
    
    $
    2,367
    
    
    $
    (1,506
    )
    
    $
    3,137
    
    
    $
    (1,043
    )Other comprehensive income (loss):Foreign currency translation adjustment
    
    
    (78
    )
    
    
    
    
    
    
    (197
    )
    
    
    Comprehensive income (loss)
    
    $
    2,289
    
    
    $
    (1,506
    )
    
    $
    2,940
    
    
    $
    (1,043
    )
  4




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T-3 ENERGY SERVICES, INC. AND SUBSIDIARIES
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 1. BASIS OF PRESENTATION
  Stock-Based Compensation
  Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2005
    
    2004
    
    2005
    
    2004Net income (loss), as reported
    
    $
    2,367
    
    
    $
    (1,506
    )
    
    $
    3,137
    
    
    $
    (1,043
    )Total stock-based employee
compensation expense determined
under fair value method for all
awards, net of related tax effects
    
    
    542
    
    
    
    14
    
    
    
    476
    
    
    
    (56
    )Net income (loss), as adjusted
    
    $
    2,909
    
    
    $
    (1,492
    )
    
    $
    3,613
    
    
    $
    (1,099
    )Basic EPS:As reported
    
    $
    .22
    
    
    $
    (.14
    )
    
    $
    .30
    
    
    $
    (.10
    )As adjusted
    
    $
    .27
    
    
    $
    (.14
    )
    
    $
    .34
    
    
    $
    (.10
    )Diluted EPS:As reported
    
    $
    .22
    
    
    $
    (.14
    )
    
    $
    .30
    
    
    $
    (.10
    )As adjusted
    
    $
    .27
    
    
    $
    (.14
    )
    
    $
    .34
    
    
    $
    (.10
    )
  5




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Newly Issued Accounting Standards
   2. DISCONTINUED OPERATIONS
     6




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##### Table of Contents



3. INVENTORIES
  June 30,
    
    December 31,2005
    
    2004Raw materials
    
    $
    3,894
    
    
    $
    3,197Work in process
    
    
    5,026
    
    
    
    2,985Finished goods and component parts
    
    
    10,737
    
    
    
    10,217$
    19,657
    
    
    $
    16,399
 4. DEBT
   5. EARNINGS (LOSS) PER SHARE
   Three Months EndedJune 30,2005
    
    2004Numerator:Income from continuing operations
    
    $
    2,372
    
    
    $
    935Income (loss) from discontinued operations
    
    
    (5
    )
    
    
    (2,441
    )Net income (loss)
    
    $
    2,367
    
    
    $
    (1,506
    )Denominator:Weighted average common shares outstanding  basic
    
    
    10,582
    
    
    
    10,582Shares for dilutive stock options
    
    
    38
    
    
    
    5Weighted average common shares outstanding and
Assumed conversions  diluted
    
    
    10,620
    
    
    
    10,587Basic earnings (loss) per common share:Continuing operations
    
    $
    .22
    
    
    $
    .09Discontinued operations
    
    
    
    
    
    
    (.23
    )Net income (loss) per common share
    
    $
    .22
    
    
    $
    (.14
    )Diluted earnings (loss) per common share:Continuing operations
    
    $
    .22
    
    
    $
    .09Discontinued operations
    
    
    
    
    
    
    (.23
    )Net income (loss) per common share
    
    $
    .22
    
    
    $
    (.14
    )
 7




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##### Table of Contents



Six Months EndedJune 30,2005
    
    2004Numerator:Income from continuing operations
    
    $
    3,109
    
    
    $
    1,522Income (loss) from discontinued operations
    
    
    28
    
    
    
    (2,565
    )Net income (loss)
    
    $
    3,137
    
    
    $
    (1,043
    )Denominator:Weighted average common shares outstanding  basic
    
    
    10,582
    
    
    
    10,582Shares for dilutive stock options
    
    
    42
    
    
    
    6Weighted average common shares outstanding and
Assumed conversions  diluted
    
    
    10,624
    
    
    
    10,588Basic earnings (loss) per common share:Continuing operations
    
    $
    .29
    
    
    $
    .14Discontinued operations
    
    
    .01
    
    
    
    (.24
    )Net income (loss) per common share
    
    $
    .30
    
    
    $
    (.10
    )Diluted earnings (loss) per common share:Continuing operations
    
    $
    .29
    
    
    $
    .14Discontinued operations
    
    
    .01
    
    
    
    (.24
    )Net income (loss) per common share
    
    $
    .30
    
    
    $
    (.10
    )
  6. REPORTABLE SEGMENTS
   (dollars in thousands)PressureControl
    
    Distribution
    
    Corporate
    
    ConsolidatedThree months ended June 30:2005Revenues
    
    $
    25,039
    
    
    $
    9,105
    
    
    $
    
    
    
    $
    34,144Depreciation and amortization
    
    
    603
    
    
    
    66
    
    
    
    200
    
    
    
    869Income (loss) from operations
    
    
    6,128
    
    
    
    144
    
    
    
    (1,804
    )
    
    
    4,468Capital expenditures
    
    
    163
    
    
    
    36
    
    
    
    162
    
    
    
    3612004Revenues
    
    $
    16,783
    
    
    $
    11,456
    
    
    $
    
    
    
    $
    28,239Depreciation and amortization
    
    
    390
    
    
    
    65
    
    
    
    186
    
    
    
    641Income (loss) from operations
    
    
    2,877
    
    
    
    842
    
    
    
    (1,655
    )
    
    
    2,064Capital expenditures
    
    
    249
    
    
    
    360
    
    
    
    173
    
    
    
    782
 8




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(dollars in thousands)PressureControl
    
    Distribution
    
    Corporate
    
    ConsolidatedSix months ended June 30:2005Revenues
    
    $
    44,821
    
    
    $
    18,725
    
    
    $
    
    
    
    $
    63,546Depreciation and amortization
    
    
    1,220
    
    
    
    130
    
    
    
    397
    
    
    
    1,747Income (loss) from operations
    
    
    9,127
    
    
    
    355
    
    
    
    (3,179
    )
    
    
    6,303Capital expenditures
    
    
    529
    
    
    
    86
    
    
    
    218
    
    
    
    8332004Revenues
    
    $
    32,039
    
    
    $
    19,490
    
    
    $
    
    
    
    $
    51,529Depreciation and amortization
    
    
    770
    
    
    
    134
    
    
    
    367
    
    
    
    1,271Income (loss) from operations
    
    
    5,738
    
    
    
    984
    
    
    
    (2,962
    )
    
    
    3,760Capital expenditures
    
    
    360
    
    
    
    368
    
    
    
    270
    
    
    
    998
 7. CONTINGENCIES
 th st
    9




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8. STOCKHOLDERS EQUITY
 Authorized Shares
  Warrants
  9. RECENT EVENTS
   
 10




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##### Table of Contents



ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
 General
    WTI
    
    Henry Hub
    
    United States
    
    Gulf of Mexico
    
    CanadaQuarter Ended:
    
    Oil(1)
    
    Gas(2)
    
    Rig Count(3)
    
    Rig Count(3)
    
    Rig Count(3)December 31, 2003
    
    $
    31.18
    
    
    $
    5.45
    
    
    
    1,109
    
    
    
    102
    
    
    
    408March 31, 2004
    
    $
    34.77
    
    
    $
    5.72
    
    
    
    1,121
    
    
    
    95
    
    
    
    528June 30, 2004
    
    $
    38.32
    
    
    $
    6.15
    
    
    
    1,164
    
    
    
    92
    
    
    
    202September 30, 2004
    
    $
    43.89
    
    
    $
    5.56
    
    
    
    1,229
    
    
    
    90
    
    
    
    326December 31, 2004
    
    $
    48.30
    
    
    $
    7.26
    
    
    
    1,249
    
    
    
    95
    
    
    
    420March 31, 2005
    
    $
    49.90
    
    
    $
    6.47
    
    
    
    1,279
    
    
    
    95
    
    
    
    521June 30, 2005
    
    $
    53.11
    
    
    $
    6.95
    
    
    
    1,336
    
    
    
    90
    
    
    
    241
 
 (1)
    
    Source: Average price per barrel for the quarter calculated by us using daily data published by the United States Department of Energy on its
website, www.eia.doe.gov.(2)
    
    Source: Average price per MM/BTU for the quarter calculated by us using daily data published on www.oilnergy.com.(3)
    
    Source: Average United States, Gulf of Mexico and Canada Rig Counts for the quarter calculated by us using weekly data published by Baker Hughes
Incorporated.   11




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Critical Accounting Policies and Estimates
   12




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Results of Operations
  Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2005
    
    2004
    
    2005
    
    2004Revenues:Pressure Control
    
    $
    25,039
    
    
    $
    16,783
    
    
    $
    44,821
    
    
    $
    32,039Distribution
    
    
    9,105
    
    
    
    11,456
    
    
    
    18,725
    
    
    
    19,49034,144
    
    
    
    28,239
    
    
    
    63,546
    
    
    
    51,529Cost of revenues:Pressure Control
    
    
    15,361
    
    
    
    11,228
    
    
    
    28,737
    
    
    
    21,338Distribution
    
    
    6,996
    
    
    
    8,673
    
    
    
    14,272
    
    
    
    14,56822,357
    
    
    
    19,901
    
    
    
    43,009
    
    
    
    35,906Gross profit:Pressure Control
    
    
    9,678
    
    
    
    5,555
    
    
    
    16,084
    
    
    
    10,701Distribution
    
    
    2,109
    
    
    
    2,783
    
    
    
    4,453
    
    
    
    4,92211,787
    
    
    
    8,338
    
    
    
    20,537
    
    
    
    15,623Operating expenses:Pressure Control
    
    
    3,550
    
    
    
    2,678
    
    
    
    6,957
    
    
    
    4,963Distribution
    
    
    1,965
    
    
    
    1,941
    
    
    
    4,098
    
    
    
    3,938Corporate
    
    
    1,804
    
    
    
    1,655
    
    
    
    3,179
    
    
    
    2,9627,319
    
    
    
    6,274
    
    
    
    14,234
    
    
    
    11,863Income (loss) from operations:Pressure Control
    
    
    6,128
    
    
    
    2,877
    
    
    
    9,127
    
    
    
    5,738Distribution
    
    
    144
    
    
    
    842
    
    
    
    355
    
    
    
    984Corporate
    
    
    (1,804
    )
    
    
    (1,655
    )
    
    
    (3,179
    )
    
    
    (2,962
    )$
    4,468
    
    
    $
    2,064
    
    
    $
    6,303
    
    
    $
    3,760
 Three Months ended June 30, 2005 Compared with Three Months ended June 30, 2004
 Revenues.
   Cost of Revenues.
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Operating expenses.
    Interest Expense.
 Income Taxes.
 Income from Continuing Operations.
 14




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Discontinued operations.
 Six Months ended June 30, 2005 Compared with Six Months ended June 30, 2004
 Revenues.
   Cost of Revenues.
   Operating expenses.
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Interest Expense.
 Income Taxes.
 Income from Continuing Operations.
 Discontinued operations.
 Liquidity and Capital Resources
  Net Cash Provided by Operating Activities.
 Net Cash Used in Investing Activities.
 Net Cash Used in Financing Activities.
 Net Cash Provided by (Used In) Discontinued Operations.
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##### Table of Contents



Principal Debt Instruments.
     Payments Due by PeriodContractual Obligations
    
    Total
    
    Less than 1 Year
    
    1-3 Years
    
    4-5 Years
    
    After 5 YearsLong-term debt
    
    $
    13,974
    
    
    $
    289
    
    
    $
    13,685
    
    
    $
    
    
    
    $
    Letters of credit
    
    
    1,290
    
    
    
    1,290
    
    
    
    
    
    
    
    
    
    
    
    Operating leases
    
    
    5,006
    
    
    
    1,591
    
    
    
    2,400
    
    
    
    916
    
    
    
    99Total contractual obligations
    
    $
    20,270
    
    
    $
    3,170
    
    
    $
    16,085
    
    
    $
    916
    
    
    $
    99
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##### Table of Contents



Forward-Looking Information and Risk Factors
   Because we depend on the oil and gas industry, a decline in oil and gas prices or a decrease in
industry activity may negatively impact our profits.
  
    
    the level of production from known reserves;
    
    weather conditions;
    
    the actions of the Organization of Petroleum Exporting Countries;
    
    political instability in the Middle East and elsewhere;
    
    the level of oil and gas inventories;
    
    the cost of producing oil and gas;
    
    the level of drilling activity;
    
    worldwide economic activity; and
    
    governmental regulation.
  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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##### Table of Contents



Availability of a skilled workforce could affect our projected results.
  Our long-term growth depends upon technological innovation and commercialization.
  The cyclical nature of or a prolonged downturn in our industry could affect the carrying value of
our goodwill.
  A rise in insurance premiums could adversely impact our results and affect our ability to
adequately insure for certain contingent liabilities.
  Uninsured or underinsured claims and litigation could adversely impact our results.
  Our operations are subject to regulation by governmental authorities that may limit our ability to
operate our business.
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##### Table of Contents



Two of our directors may have conflicts of interest because they are also directors or officers of
First Reserve Corporation. The resolution of these conflicts of interest may not be in our or our
stockholders best interests.
  We will renounce any interest in specified business opportunities, and First Reserve Fund VIII and
its director designees on our board of directors generally will have no obligation to offer us
those opportunities.
  
    
    no member of the First Reserve group or any of those individuals will have any
obligation to communicate or offer the opportunity to the Company; and
    
    such entity or individual may pursue the opportunity as that entity or individual sees
fit,
  
    
    it was presented to a member of the First Reserve group in that persons capacity as a
director or officer of T-3; or
    
    the opportunity was identified solely through the disclosure of information by or on
behalf of T-3.
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##### Table of Contents



ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS
    
 ITEM 4. CONTROLS AND PROCEDURES
 Evaluation of Disclosure Controls and Procedures
  Changes in Internal Controls Over Financial Reporting
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##### Table of Contents



PART II
 
 Item 1. Legal Proceedings
 st
 
 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
 a.
    
    The 2005 Annual Meeting of Stockholders of the Company was held on June 1, 2005.b.
    
    The following person was elected at that meeting as the only Class I director:
 Number of VotesName of Nominee
    
    For
    
    WithheldGus D. Halas
    
    
    10,181,170
    
    
    
    81,021
 c.
    
    The result of the vote to approve the amendment to the Certificate of Incorporation to
decrease the number of authorized shares of common stock from 50,000,000 to 25,000,000 was
as follows:
 Number of VotesFor
    
    Against
    
    Abstain10,248,720
    
    
    13,124
    
    
    
    347
 
 Item 5. Other Information
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##### Table of Contents



Item 6. Exhibits
 Exhibit Number
    
    Identification of Exhibit3.1
    
    Certificate of Incorporation of T-3 Energy Services, Inc.
(incorporated herein by reference to Exhibit 3.1 to the Companys
Current Report on Form 8-K dated December 31, 2001)3.2
    
    Certificate of Amendment to the Certificate of Incorporation of T-3
Energy Services, Inc.31.1
    
    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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##### Table of Contents



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 4th day of August 2005.
 T-3 ENERGY SERVICES, INC.By:
    
    /s/ MICHAEL T. MINOMichael T. Mino (Chief FinancialOfficer and Vice President)
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##### Table of Contents



INDEX TO EXHIBITS
 ExhibitNumber
    
    Identification of Exhibit3.1
    
    Certificate of Incorporation of T-3 Energy Services, Inc.
(incorporated herein by reference to Exhibit 3.1 to the Companys
Current Report on Form 8-K dated December 31, 2001)3.2*
    
    Certificate of Amendment to the Certificate of Incorporation of
T-3 Energy Services, Inc.31.1*
    
    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.