##### Table of Contents



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, 2008
 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
(State or Other Jurisdiction 
of Incorporation or Organization)
    
    76-0697390
(IRS Employer
Identification No.)7135 Ardmore, Houston, Texas
(Address of Principal Executive Offices)
    
    77054
(Zip Code)
 (713) 996-4110
 þ o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ




---



##### 



TABLE OF CONTENTS
 FORM 10-Q
 Item
    
    
    
    PagePART I1.
    
    Financial StatementsCondensed Consolidated Balance Sheets as of March 31, 2008 and
December 31, 2007
    
    
    1Condensed Consolidated Statements of Operations for the Three Months Ended
March 31, 2008 and 2007
    
    
    2Condensed Consolidated Statements of Cash Flows for the Three Months Ended
March 31, 2008 and 2007
    
    
    3Condensed Consolidated Statements of Comprehensive Income for the Three
Months Ended March 31, 2008 and 2007
    
    
    4Notes to Condensed Consolidated Financial Statements
    
    
    52.
    
    Managements Discussion and Analysis of Financial Condition
and Results of Operations
    
    
    123.
    
    Quantitative and Qualitative Disclosures about Market Risk
    
    
    214.
    
    Controls and Procedures
    
    
    21PART II1.
    
    Legal Proceedings
    
    
    221A.
    
    Risk Factors
    
    
    222.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    293.
    
    Defaults Upon Senior Securities
    
    
    294.
    
    Submission of Matters to a Vote of Security Holders
    
    
    295.
    
    Other Information
    
    
    296.
    
    Exhibits
    
    
    29Certification 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
  i




---



##### Table of Contents



T-3 ENERGY SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands except for share amounts)
 March 31,
    
    
    December 31,2008
    
    
    2007(unaudited)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    8,436
    
    
    $
    9,522Accounts receivable  trade, net
    
    
    46,033
    
    
    
    44,180Inventories
    
    
    47,891
    
    
    
    47,457Deferred income taxes
    
    
    3,686
    
    
    
    3,354Prepaids and other current assets
    
    
    4,059
    
    
    
    5,824Total current assets
    
    
    110,105
    
    
    
    110,337Property and equipment, net
    
    
    42,250
    
    
    
    40,073Goodwill, net
    
    
    113,631
    
    
    
    112,249Other intangible assets, net
    
    
    34,137
    
    
    
    35,065Other assets
    
    
    2,889
    
    
    
    2,838Total assets
    
    $
    303,012
    
    
    $
    300,562LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable  trade
    
    $
    20,345
    
    
    $
    20,974Accrued expenses and other
    
    
    15,915
    
    
    
    15,156Current maturities of long-term debt
    
    
    74
    
    
    
    74Total current liabilities
    
    
    36,334
    
    
    
    36,204Long-term debt, less current maturities
    
    
    50,207
    
    
    
    61,423Other long-term liabilities
    
    
    1,190
    
    
    
    1,101Deferred income taxes
    
    
    11,564
    
    
    
    11,186Commitments and contingenciesStockholders equity:Preferred stock, $.001 par value, 25,000,000 shares
authorized, no
shares issued or outstanding
    
    
    
    
    
    
    Common stock, $.001 par value, 50,000,000 shares
authorized,
12,467,023 and 12,320,341 shares issued and outstanding
at March 31, 2008 and December 31, 2007, respectively
    
    
    12
    
    
    
    12Warrants, 10,157 and 13,138 issued and outstanding at
March 31,
2008 and December 31, 2007, respectively
    
    
    20
    
    
    
    26Additional paid-in capital
    
    
    164,614
    
    
    
    160,446Retained earnings
    
    
    36,550
    
    
    
    27,039Accumulated other comprehensive income
    
    
    2,521
    
    
    
    3,125Total stockholders equity
    
    
    203,717
    
    
    
    190,648Total liabilities and stockholders equity
    
    $
    303,012
    
    
    $
    300,562
  1




---



##### Table of Contents



T-3 ENERGY SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(in thousands except per share amounts)
 Three Months EndedMarch 31,2008
    
    
    2007Revenues:Products
    
    $
    58,027
    
    
    $
    37,839Services
    
    
    11,143
    
    
    
    10,06169,170
    
    
    
    47,900Cost of revenues:Products
    
    
    35,104
    
    
    
    24,313Services
    
    
    6,895
    
    
    
    6,23641,999
    
    
    
    30,549Gross profit
    
    
    27,171
    
    
    
    17,351Operating expenses
    
    
    12,749
    
    
    
    8,488Income from operations
    
    
    14,422
    
    
    
    8,863Interest expense
    
    
    (892
    )
    
    
    (153
    )Interest income
    
    
    39
    
    
    
    22Other income, net
    
    
    140
    
    
    
    1Income from continuing operations before
provision for income taxes.
    
    
    13,709
    
    
    
    8,733Provision for income taxes
    
    
    4,196
    
    
    
    3,234Income from continuing operations
    
    
    9,513
    
    
    
    5,499Loss from discontinued operations, net of tax
    
    
    (2
    )
    
    
    Net income
    
    $
    9,511
    
    
    $
    5,499Basic earnings per common share:Continuing operations
    
    $
    .77
    
    
    $
    .51Discontinued operations
    
    
    
    
    
    
    Net income per common share
    
    $
    .77
    
    
    $
    .51Diluted earnings per common share:Continuing operations
    
    $
    .75
    
    
    $
    .51Discontinued operations
    
    
    
    
    
    
    Net income per common share
    
    $
    .75
    
    
    $
    .51Weighted average common shares outstanding:Basic
    
    
    12,330
    
    
    
    10,684Diluted
    
    
    12,763
    
    
    
    10,888
  2




---



##### Table of Contents



T-3 ENERGY SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(in thousands)
 Three Months EndedMarch 31,2008
    
    
    2007Cash flows from operating activities:Net income
    
    $
    9,511
    
    
    $
    5,499Adjustments to reconcile net income to net cash
provided by (used in) operating activities:Loss from discontinued operations, net of tax
    
    
    2
    
    
    
    Bad debt expense
    
    
    32
    
    
    
    9Depreciation and amortization
    
    
    2,185
    
    
    
    1,021Amortization of deferred loan costs
    
    
    55
    
    
    
    63Loss on sale of assets
    
    
    
    
    
    
    9Write-off of property and equipment, net
    
    
    6
    
    
    
    Deferred taxes
    
    
    45
    
    
    
    309Employee stock-based compensation expense
    
    
    1,013
    
    
    
    596Excess tax benefits from stock-based compensation
    
    
    (1,013
    )
    
    
    (4
    )Equity in (earnings) loss of unconsolidated affiliate
    
    
    (108
    )
    
    
    16Changes in assets and liabilities, net of effect of
acquisitions and dispositions:Accounts receivable  trade
    
    
    (1,328
    )
    
    
    (8,262
    )Inventories
    
    
    (433
    )
    
    
    (4,075
    )Prepaids and other current assets
    
    
    4,777
    
    
    
    3,418Other assets
    
    
    12
    
    
    
    (197
    )Accounts payable  trade
    
    
    (721
    )
    
    
    514Accrued expenses and other
    
    
    (1,252
    )
    
    
    (40
    )Net cash provided by (used in) operating activities
    
    
    12,783
    
    
    
    (1,124
    )Cash flows from investing activities:Purchases of property and equipment
    
    
    (3,378
    )
    
    
    (674
    )Proceeds from sales of property and equipment
    
    
    
    
    
    
    17Cash paid for acquisitions, net of cash acquired
    
    
    (2,318
    )
    
    
    Net cash used in investing activities
    
    
    (5,696
    )
    
    
    (657
    )Cash flows from financing activities:Net borrowings (repayments) under swing line credit facility
    
    
    (3,216
    )
    
    
    1,558Repayments on revolving credit facility
    
    
    (8,000
    )
    
    
    Payments on long-term debt
    
    
    (91
    )
    
    
    Debt financing costs
    
    
    (20
    )
    
    
    Proceeds from exercise of stock options
    
    
    2,096
    
    
    
    8Proceeds from exercise of warrants
    
    
    38
    
    
    
    Excess tax benefits from stock-based compensation
    
    
    1,013
    
    
    
    4Net cash provided by (used in) financing activities
    
    
    (8,180
    )
    
    
    1,570Effect of exchange rate changes on cash and cash equivalents
    
    
    7
    
    
    
    (2
    )Net decrease in cash and cash equivalents
    
    
    (1,086
    )
    
    
    (213
    )Cash and cash equivalents, beginning of period
    
    
    9,522
    
    
    
    3,393Cash and cash equivalents, end of period
    
    $
    8,436
    
    
    $
    3,180
  3




---



##### Table of Contents



T-3 ENERGY SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
(in thousands)
 Three Months EndedMarch 31,2008
    
    
    2007Net income
    
    $
    9,511
    
    
    $
    5,499Other comprehensive income (loss):Foreign currency translation adjustment
    
    
    (604
    )
    
    
    104Comprehensive income
    
    $
    8,907
    
    
    $
    5,603
  4




---



##### Table of Contents



T-3 ENERGY SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 1. BASIS OF PRESENTATION
  Fair Value of Financial Instruments
  New Accounting Pronouncements
 Fair Value Measurements
 Business Combinations
 2. BUSINESS COMBINATIONS AND DISPOSITIONS
 Business Combinations
  5




---



##### Table of Contents



Fair value of tangible and intangible assets,
net of cash acquired
    
    $
    900Goodwill recorded
    
    
    1,725Total liabilities assumed
    
    
    (307
    )Cash paid for acquisitions, net of cash acquired
    
    $
    2,318
  Three Months EndedMarch 31, 2007(In thousands, exceptper share amounts)Revenues
    
    $
    65,067Income from continuing operations
    
    $
    7,452Basic Earnings per share from continuing operations
    
    $
    0.70Diluted Earnings per share from continuing operations
    
    $
    0.68
 Dispositions
  6




---



##### Table of Contents



3. INVENTORIES
  March 31,
    
    
    December 31,2008
    
    
    2007Raw materials
    
    $
    7,691
    
    
    $
    7,640Work in process
    
    
    13,733
    
    
    
    16,319Finished goods and component parts
    
    
    26,467
    
    
    
    23,498$
    47,891
    
    
    $
    47,457
 4. DEBT
  5. EARNINGS PER SHARE
  Three Months EndedMarch 31,2008
    
    
    2007Numerator:Income from continuing operations
    
    $
    9,513
    
    
    $
    5,499Loss from discontinued operations
    
    
    (2
    )
    
    
    Net income
    
    $
    9,511
    
    
    $
    5,499Denominator:Weighted average common shares outstanding  basic
    
    
    12,330
    
    
    
    10,684Shares for dilutive stock options, restricted stock and warrants
    
    
    433
    
    
    
    204Weighted average common shares outstanding  diluted
    
    
    12,763
    
    
    
    10,888Basic earnings per common share:Continuing operations
    
    $
    .77
    
    
    $
    .51Discontinued operations
    
    
    
    
    
    
    Net income per common share
    
    $
    .77
    
    
    $
    .51Diluted earnings per common share:Continuing operations
    
    $
    .75
    
    
    $
    .51Discontinued operations
    
    
    
    
    
    
    Net income per common share
    
    $
    .75
    
    
    $
    .51
 7




---



##### Table of Contents



6. SEGMENT INFORMATION
    (dollars in thousands)PressureControl
    
    Corporate
    
    ConsolidatedThree months ended March 31:2008Revenues
    
    $
    69,170
    
    
    $
    
    
    
    $
    69,170Depreciation and amortization
    
    
    1,860
    
    
    
    325
    
    
    
    2,185Income (loss) from operations
    
    
    18,492
    
    
    
    (4,070
    )
    
    
    14,422Capital expenditures
    
    
    3,070
    
    
    
    308
    
    
    
    3,3782007Revenues
    
    $
    47,900
    
    
    $
    
    
    
    $
    47,900Depreciation and amortization
    
    
    703
    
    
    
    318
    
    
    
    1,021Income (loss) from operations
    
    
    11,560
    
    
    
    (2,697
    )
    
    
    8,863Capital expenditures
    
    
    606
    
    
    
    68
    
    
    
    674
 7. COMMITMENTS AND CONTINGENCIES
  th
 st
 8




---



##### Table of Contents



8. STOCKHOLDERS EQUITY
 Common Stock
  Warrants
  Additional Paid-In Capital
  9. STOCK-BASED COMPENSATION
  9




---



##### Table of Contents



Stock Option Awards
  Three Months Ended
    
    Three Months EndedMarch 31,
    
    March 31,2008
    
    2007Expected volatility
    
    
    50.00
    %
    
    
    40.00
    %Risk-free interest rate
    
    
    2.26
    %
    
    
    4.68
    %Expected term (in years)
    
    
    4.7
    
    
    
    5
  Restricted Stock Awards
     10




---



##### Table of Contents



10. INCOME TAXES
  11




---



##### Table of Contents



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. This organic
expansion effort has included increasing our BOP manufacturing capacity from ten to
twenty-five units per month by upgrading and expanding our machining capabilities at our
existing facilities and expansion into Grand Junction, Colorado and Conway, Arkansas during
2007. During 2008, we will continue to expand capacity by:
 12




---



##### Table of Contents




    
    completing the expansion of our BOP repair capacity from 7 stacks per month to 11
stacks per month in the first half of 2008;
    
    opening additional facilities for our wellhead product line; and
    
    opening additional facilities for our pipeline product line.
 
    
    Continue new product development. Since April 2003, we have introduced 113 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. In particular, we added a subsea line of products to our
traditional surface drilling products by introducing our T-3 Diamond Series Model 6012
Subsea Double Ram BOP fitted with subsea compact tandem booster bonnets and casing shear
bonnets during 2007. In addition, during 2007 we received commitments for our new
stainless steel dual block wellhead system incorporating our new Diamond Series production
gate valve technology, our new under-balanced drilling deployment valve wellhead system,
and a conventional wellhead system that also incorporates our new Diamond Series production
gate valves.
    
    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, the Marcellus Shale in the Appalachian region and
the Rocky Mountain region. For example, as noted above, in January 2008 we expanded into
the Oklahoma region by acquiring Pinnacle. During 2007, we continued our expansion into
the Rocky Mountain region by opening a facility in Grand Junction, Colorado and
establishing 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. As noted above, in March 2008, we
entered into a Know-How License and Technical Services Agreement with Aswan, and intend to
enter into a joint venture agreement with Aswan during the second quarter of 2008. Also
noted above, in January 2008, we acquired Pinnacle, located in Oklahoma City, Oklahoma to
expand our wellhead products and services into a strategically identified market that
already has existing operations, work force and customer relationships. In October 2007,
we acquired EEC and HP&T, both of which are located in Houston, Texas, to enhance our
ability to continue to develop and introduce innovative and industry-leading technologies
within our pressure and flow control product line. We will continue to seek similar
strategic acquisition and alliance opportunities in the future.
 How We Generate Our Revenue
    13




---



##### Table of Contents



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.
 14




---



##### Table of Contents



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.
   Quality Management Systems.
 15




---



##### Table of Contents



Statistical Tracking Systems.
 Inventory Turnover Rates
 Critical Accounting Policies and Estimates
   New Accounting Pronouncements
 Fair Value Measurements
 Business Combinations
 16




---



##### Table of Contents



Outlook
  WTI
    
    Henry Hub
    
    United States
    
    Canada
    
    InternationalQuarter Ended:
    
    Oil
    
    Gas
    
    Rig Count
    
    Rig Count
    
    Rig CountMarch 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
    
    
    
    982June 30, 2007
    
    $
    64.97
    
    
    $
    7.66
    
    
    
    1,757
    
    
    
    139
    
    
    
    1,002September 30, 2007
    
    $
    75.46
    
    
    $
    6.25
    
    
    
    1,788
    
    
    
    348
    
    
    
    1,020December 31, 2007
    
    $
    90.68
    
    
    $
    7.40
    
    
    
    1,790
    
    
    
    356
    
    
    
    1,017March 31, 2008
    
    $
    97.94
    
    
    $
    8.72
    
    
    
    1,770
    
    
    
    507
    
    
    
    1,046
 
 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 Counts for the Quarter
indicated: Baker Hughes, Inc. (www.bakerhughes.com).   17




---



##### Table of Contents



Results of Operations
 Three Months ended March 31, 2008 Compared with Three Months ended March 31, 2007
 Revenues.
 Cost of Revenues.
 Operating Expenses.
 Interest Expense.
 Income Taxes.
 Income from Continuing Operations.
 18




---



##### Table of Contents



Liquidity and Capital Resources
  Net Cash Provided by (Used in) Operating Activities.
 Net Cash Used In Investing Activities.
 Net Cash Provided by (Used in) Financing Activities.
 Principal Debt Instruments.
  19




---



##### Table of Contents



Payments Due by PeriodContractual Obligations
    
    Total
    
    
    Less than 1 Year
    
    
    2-3 Years
    
    
    4-5 Years
    
    
    After 5 YearsLong-term debt
    
    $
    50,281
    
    
    $
    74
    
    
    $
    8
    
    
    $
    50,199
    
    
    $
    Letters of credit
    
    
    540
    
    
    
    540
    
    
    
    
    
    
    
    
    
    
    
    Operating leases
    
    
    5,667
    
    
    
    2,205
    
    
    
    2,907
    
    
    
    545
    
    
    
    10Total contractual obligations
    
    $
    56,488
    
    
    $
    2,819
    
    
    $
    2,915
    
    
    $
    50,744
    
    
    $
    10
  20




---



##### Table of Contents



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
  21




---



##### Table of Contents



PART II
 Cautionary Note Regarding Forward Looking Statements
   
 Item 1. Legal Proceedings
  
 Item 1A. Risk Factors
 An investment in our securities involves a high degree of risk. You should carefully consider
the risk factors described below, together with the other information included in our Annual Report
on Form 10-K for the year ended December 31, 2007, before you decide to invest in our securities.
The risks described below are the material risks of which we are currently aware; however, they may
not be the only risks that we may face. Additional risks and uncertainties not currently known to
us or that we currently view as immaterial may also impair our business. If any of these risks
develop into actual events, it could materially and adversely affect our business, financial
condition, results of operations and cash flows, the trading price of your shares could decline and
you may lose all or part of your investment.
 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.
 22




---



##### Table of Contents



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;
    
    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.
   23




---



##### Table of Contents



Our inability to deliver our backlog on time could affect our future sales and profitability and
our relationships with our customers.
  We rely on a few key employees whose absence or loss could disrupt our operations or be adverse to
our business.
  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;
 24




---



##### Table of Contents




    
    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.
  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.
   25




---



##### Table of Contents



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.
  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.
   26




---



##### Table of Contents



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.
  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.
 27




---



##### Table of Contents



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.
  28




---



##### Table of Contents



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)
 29




---



##### 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 7th day of May 2008.
 T-3 ENERGY SERVICES, INC.By:
    /s/ MICHAEL T. MINOMichael T. Mino (Chief FinancialOfficer and Vice President) 30




---



##### Table of Contents



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.