Forum Energy Technologies Announces First Quarter 2024 Results, Benefits from Variperm Acquisition

Rhea-AI Summary

Forum Energy Technologies, Inc. (NYSE: FET) announced its first quarter 2024 results, showcasing a revenue of $202 million with a 9% sequential increase. The company reported orders of $204 million, a book-to-bill ratio of 101%, and a net loss of $10 million with a diluted EPS of $0.85. Adjusted EBITDA saw a significant 69% sequential increase, reaching $26 million. FET reaffirmed its full-year 2024 guidance, projecting $100 to $120 million in EBITDA and $40 to $60 million in free cash flow.

Positive

• Sequential revenue growth of 9% in the first quarter 2024.

• Orders increased by 28% sequentially to $204 million.

• Adjusted EBITDA soared by 69% sequentially, reaching $26 million.

• Reaffirmed full-year guidance for 2024, predicting $100 to $120 million in EBITDA and $40 to $60 million in free cash flow.

• Successful integration of Variperm acquisition, contributing to financial growth.

Negative

• First quarter 2024 net loss of $10 million with a diluted EPS of $0.85.

• Decrease in Drilling and Completions segment revenue by 6%.

• Drilling and Completions segment experienced a 13% decrease in adjusted EBITDA.

• Lower demand for drilling capital equipment affecting revenue.

• Soft Canadian market forecasted for the first half of 2024.

Insights

Financial Analyst

The reported 9% sequential revenue increase and 69% EBITDA improvement for Forum Energy Technologies (FET) are positive indicators of the company's operational performance. The acquisition of Variperm seems to have contributed to these gains, particularly observed in the Artificial Lift and Downhole segment, which saw a significant 42% revenue jump. The book-to-bill ratio at 101% is also a healthy signal, implying that the company is booking orders at a rate that sustains or grows revenue. However, the reported net loss of $10 million and a diluted EPS of -$0.85 show that profitability is still a concern. The commitment to improve free cash flow by $26 million year-over-year demonstrates a focus on liquidity and reducing leverage, which is important for long-term stability. From a financial perspective, maintaining the full year 2024 guidance indicates management's confidence in achieving their targets, but investors should keep in mind the potential volatility in the Canadian market due to external factors like pipeline uncertainties.

Market Research Analyst

FET's alignment of its reportable segments post-Variperm acquisition is noteworthy as it speaks to their strategic focus on enhancing operational efficiencies and adapting to market demands. The recasting of historical results to reflect these changes ensures transparency for stakeholders and facilitates a clearer comparison of past and current performance. Regarding market outlook, FET's anticipation of a stronger oil sands activity in the latter part of the year is an external dependency which introduces an element of risk. The company's operational diversification into different subsectors such as artificial lift and downhole operations might be a strategic move to hedge against market fluctuations in any single domain. Although the current report shows a mixed performance with declines in the Drilling and Completions segment, the overall positive trajectory in orders and EBITDA growth suggests that the company is on a path to recovery, albeit with caution due to seasonal and geopolitical factors affecting the energy sector.

Energy Sector Analyst

FET's recent financial performance must be contextualized within the broader energy sector landscape. While the sequential growth in revenue and orders is promising, it's essential to consider the volatile nature of the energy markets, which are influenced by factors such as international oil prices, geopolitical tensions and environmental policies. The Variperm acquisition aligns with FET's strategy to expand its presence in the energy services market, particularly in the artificial lift and downhole segments which are critical for oil extraction. The company's focus on EBITDA margin expansion and free cash flow generation suggests a strategic pivot towards operational excellence and shareholder value. However, the seasonal and market-driven challenges highlighted in the Canadian market, including the impact of the Trans Mountain Express pipeline, could impact short-term performance and should be monitored closely by investors.

• Revenue: $202 million, 9% sequential increase
• Orders: $204 million and book-to-bill ratio of 101%
• Net loss: $10 million and diluted EPS of $0.85
• Adjusted EBITDA: $26 million, 69% sequential increase
• Operating cash flow and free cash flow: $5 million and $2 million, respectively
• Reaffirms full year 2024 guidance: $100 to $120 million in EBITDA and $40 to $60 million in free cash flow

HOUSTON--(BUSINESS WIRE)-- Forum Energy Technologies, Inc. (NYSE: FET) today announced first quarter 2024 revenue of $202 million, a 9% sequential increase. Orders grew 28% sequentially to $204 million, with a book-to-bill ratio of 101%. The first quarter 2024 net loss was $10 million, or $0.85 per diluted share, compared to a net loss of $17 million, or $1.64 per diluted share, for the fourth quarter 2023.

First quarter 2024 special items, on a pre-tax basis, included $6 million of transaction expenses related to the Variperm acquisition, $2 million of restructuring and other costs, and $1 million of foreign exchange loss. Excluding special items of $0.73 per diluted share, the quarter's adjusted net loss was $0.12 per diluted share compared to the fourth quarter 2023 adjusted net loss of $0.39 per diluted share. See Tables 1-3 for a reconciliation of GAAP to non-GAAP financial information.

In the first quarter 2024, following the Variperm acquisition, we aligned our reportable segments with business activity drivers, our customer base, and the manner in which we review and evaluate operating performance. FET now operates in the following two reportable segments: (1) Drilling and Completions and (2) Artificial Lift and Downhole. Please see the attached supplemental schedules for the product lines making up each segment. Our historical results of operations were recast retrospectively to reflect these changes in accordance with U.S. GAAP.

Neal Lux, President and Chief Executive Officer, remarked, “This quarter our financial results demonstrate Variperm’s transformational impact. Sequentially, we grew revenue 9%, increased EBITDA 69% and expanded EBITDA margins by 460 basis points.

“The integration of Variperm is going well. Variperm’s first quarter results were generally in line with our expectations, but slightly lower than the historical run rate. As outlined in February, we forecast a softer Canadian market in the first half of 2024, driven by uncertainty with the Trans Mountain Express pipeline and seasonal break up. However, we anticipate stronger oil sands activity in the back half of the year.

“We increased free cash flow by $26 million on a year-over-year basis through Variperm’s contribution and working capital management. Generating free cash flow remains a top priority. In addition to reducing net leverage, it provides flexibility to evaluate further growth options and return cash to shareholders.

“Our 2024 market outlook remains unchanged. Therefore, we reaffirm our full year 2024 guidance of $100 to $120 million in adjusted EBITDA and free cash flow between $40 and $60 million. We anticipate second quarter adjusted EBITDA in the range of $24 to $28 million, with flat U.S. and international market activity, and lower Canadian demand due to the seasonal impact of break up.”

Segment Results (unless otherwise noted, comparisons are first quarter 2024 versus fourth quarter 2023)

Drilling and Completions segment revenue was $119 million, a 6% decrease, primarily related to two ROV projects completed in the fourth quarter 2023, lower demand for drilling capital equipment, and decreased international coiled tubing sales. However, sales for stimulation-related capital equipment, treating iron, and wireline cables increased during the quarter. Orders were $117 million, a 2% increase, primarily due to drilling and hydraulic fracturing demand. Segment adjusted EBITDA was $14 million, a 13% increase, resulting from favorable product mix. The Drilling and Completions segment operations focus primarily on capital equipment and consumable products for global drilling operations, subsea, coiled tubing, wireline, and stimulation markets.

Artificial Lift and Downhole segment revenue was $83 million, a 42% increase, related to revenue contributed from the acquired Variperm business and an increase in artificial lift and casing equipment sales, partially offset by a decline in sales of our processing equipment and valve products. Orders were $88 million, a 89% increase, primarily related to the addition of Variperm and increased production equipment bookings. Segment Adjusted EBITDA was $18 million, a 107% increase, mainly due to revenue contributed from the acquired Variperm business. The Artificial Lift and Downhole segment engineers, manufactures, and supplies products for well construction, artificial lift, and oil and natural gas processing.

FET (Forum Energy Technologies) is a global manufacturing company, serving the oil, natural gas, industrial and renewable energy industries. With headquarters located in Houston, Texas, FET provides value added solutions aimed at improving the safety, efficiency, and environmental impact of our customers' operations. For more information, please visit www.f-e-t.com.

Forward Looking Statements and Other Legal Disclosure

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the company expects, believes or anticipates will or may occur in the future are forward-looking statements. Without limiting the generality of the foregoing, forward-looking statements contained in this press release specifically include the expectations of plans, strategies, objectives and anticipated financial and operating results of the company, including any statement about the company's future financial position, liquidity and capital resources, operations, performance, acquisitions, returns, capital expenditure budgets, new product development activities, costs and other guidance included in this press release.

These statements are based on certain assumptions made by the company based on management's experience and perception of historical trends, current conditions, anticipated future developments and other factors believed to be appropriate. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the company, which may cause actual results to differ materially from those implied or expressed by the forward-looking statements. Among other things, these include the volatility of oil and natural gas prices, oilfield development activity levels, the availability of raw materials and specialized equipment, the company's ability to deliver backlog in a timely fashion, the availability of skilled and qualified labor, competition in the oil and natural gas industry, governmental regulation and taxation of the oil and natural gas industry, the company's ability to implement new technologies and services, the availability and terms of capital, and uncertainties regarding environmental regulations or litigation and other legal or regulatory developments affecting the company's business, and other important factors that could cause actual results to differ materially from those projected as described in the company's filings with the U.S. Securities and Exchange Commission.

Any forward-looking statement speaks only as of the date on which such statement is made and the company undertakes no obligation to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by applicable law.

Forum Energy Technologies, Inc.
Condensed consolidated statements of income (loss)
(Unaudited)
	Three months ended
	March 31,								December 31,
(in millions, except per share information)		2024				2023				2023
Revenue	$	202.4			$	189.0			$	185.2
Cost of sales		138.6				136.9				135.5
Gross profit		63.8				52.1				49.7
Operating expenses
Selling, general and administrative expenses		54.7				45.5				45.0
Transaction expenses		5.9				—				2.9
Gain on disposal of assets and other		—				(0.3	)			—
Total operating expenses		60.6				45.2				47.9
Operating income		3.2				6.9				1.8
Other expense
Interest expense		8.8				4.5				4.6
Foreign exchange losses and other, net		1.2				3.1				9.1
Total other expense		10.0				7.6				13.7
Loss before income taxes		(6.8	)			(0.7	)			(11.9	)
Income tax expense		3.5				2.8				4.9
Net income (loss) (1)	$	(10.3	)		$	(3.5	)		$	(16.8	)
Weighted average shares outstanding
Basic		12.2				10.2				10.2
Diluted		12.2				10.2				10.2
Loss per share
Basic	$	(0.85	)		$	(0.34	)		$	(1.64	)
Diluted	$	(0.85	)		$	(0.34	)		$	(1.64	)
(1) Refer to Table 1 for schedule of adjusting items.

Forum Energy Technologies, Inc.
Condensed consolidated balance sheets
(Unaudited)
	March 31,			December 31,
(in millions of dollars)	2024			2023
Assets
Current assets
Cash and cash equivalents	$	48.5		$	46.2
Accounts receivable—trade, net		162.0			146.7
Inventories, net		303.0			299.6
Other current assets		33.3			37.1
Total current assets		546.8			529.6
Property and equipment, net of accumulated depreciation		87.7			61.4
Operating lease assets		54.8			55.4
Goodwill and other intangible assets, net		324.6			168.0
Other long-term assets		7.5			6.7
Total assets	$	1,021.4		$	821.1
Liabilities and equity
Current liabilities
Current portion of long-term debt	$	5.2		$	1.2
Other current liabilities		187.9			203.1
Total current liabilities		193.1			204.3
Long-term debt, net of current portion		282.3			129.6
Other long-term liabilities		99.8			74.5
Total liabilities		575.2			408.4
Total equity		446.2			412.7
Total liabilities and equity	$	1,021.4		$	821.1

Forum Energy Technologies, Inc.
Condensed consolidated cash flow information
(Unaudited)
	Three Months Ended March 31,
(in millions of dollars)		2024				2023
Cash flows from operating activities
Net loss	$	(10.3	)		$	(3.5	)
Depreciation and amortization		13.8				8.7
Inventory write down		0.5				0.9
Other noncash items and changes in working capital		1.0				(29.2	)
Net cash provided by (used in) operating activities		5.0				(23.1	)
Cash flows from investing activities
Capital expenditures for property and equipment		(2.9	)			(1.1	)
Proceeds from sale of property and equipment		0.2				0.3
Payments related to business acquisition		(150.1	)			—
Net cash used in investing activities		(152.8	)			(0.8	)
Cash flows from financing activities
Borrowings of debt		304.8				119.4
Repayments of debt		(148.8	)			(94.7	)
Repurchases of stock		(1.2	)			(5.4	)
Deferred financing costs		(3.0	)			—
Net cash provided by financing activities		151.8				19.3
Effect of exchange rate changes on cash		(1.7	)			0.3
Net increase (decrease) in cash, cash equivalents and restricted cash	$	2.3			$	(4.3	)

Forum Energy Technologies, Inc.
Supplemental schedule - Segment information
(Unaudited)
	As Reported												As Adjusted (3)
	Three months ended												Three months ended
(in millions of dollars)	March 31, 2024				March 31, 2023				December 31, 2023				March 31, 2024				March 31, 2023				December 31, 2023
Revenue
Drilling and Completions	$	119.1			$	126.8			$	126.6			$	119.1			$	126.8			$	126.6
Artificial Lift and Downhole		83.3				62.2				58.6				83.3				62.2				58.6
Eliminations		—				—				—				—				—				—
Total revenue	$	202.4			$	189.0			$	185.2			$	202.4			$	189.0			$	185.2
Operating income (loss)
Drilling and Completions	$	4.6			$	5.0			$	4.0			$	5.8			$	5.9			$	4.7
Operating Margin %		3.9	%			3.9	%			3.2	%			4.9	%			4.7	%			3.7	%
Artificial Lift and Downhole		11.8				8.6				7.4				11.7				8.6				7.4
Operating Margin %		14.2	%			13.8	%			12.6	%			14.0	%			13.8	%			12.6	%
Corporate		(7.3	)			(7.0	)			(6.7	)			(6.9	)			(6.8	)			(6.7	)
Total segment operating income		9.1				6.6				4.7				10.6				7.7				5.4
Other items not in segment operating income (1)		(5.9	)			0.3				(2.9	)			0.1				0.3				—
Total operating income	$	3.2			$	6.9			$	1.8			$	10.7			$	8.0			$	5.4
Operating Margin %		1.6	%			3.7	%			1.0	%			5.3	%			4.2	%			2.9	%
EBITDA (2)
Drilling and Completions	$	13.1			$	9.5			$	3.8			$	13.7			$	13.5			$	12.1
EBITDA Margin %		11.0	%			7.5	%			3.0	%			11.5	%			10.6	%			9.6	%
Artificial Lift and Downhole		17.7				10.1				8.5				18.0				10.1				8.7
EBITDA Margin %		21.2	%			16.2	%			14.5	%			21.6	%			16.2	%			14.8	%
Corporate		(15.0	)			(7.1	)			(10.9	)			(5.6	)			(5.9	)			(5.4	)
Total EBITDA	$	15.8			$	12.5			$	1.4			$	26.1			$	17.7			$	15.4
EBITDA Margin %		7.8	%			6.6	%			0.8	%			12.9	%			9.4	%			8.3	%
(1) Includes gain/(loss) on disposal of assets and other.
(2) The Company believes that the presentation of EBITDA is useful to the Company's investors because EBITDA is an appropriate measure for evaluating the Company's operating performance and liquidity that reflects the resources available for strategic opportunities including, among others, investing in the business, strengthening the balance sheet, repurchasing the Company's securities and making strategic acquisitions. In addition, EBITDA is a widely used benchmark in the investment community. See the attached separate schedule for the reconciliation of GAAP to non-GAAP financial information.
(3) Refer to Table 1 for schedule of adjusting items.

Forum Energy Technologies, Inc.
Supplemental schedule - Orders information
(Unaudited)
	Three months ended
(in millions of dollars)	March 31, 2024			March 31, 2023			December 31, 2023
Orders
Drilling and Completions	$	116.6		$	121.3		$	113.8
Artificial Lift and Downhole		87.8			57.6			46.5
Total orders	$	204.4		$	178.9		$	160.3
Revenue
Drilling and Completions	$	119.1		$	126.8		$	126.6
Artificial Lift and Downhole		83.3			62.2			58.6
Total revenue	$	202.4		$	189.0		$	185.2
Book to bill ratio (1)
Drilling and Completions		0.98			0.96			0.90
Artificial Lift and Downhole		1.05			0.93			0.79
Total book to bill ratio		1.01			0.95			0.87
(1) The book-to-bill ratio is calculated by dividing the dollar value of orders received in a given period by the revenue earned in that same period. The Company believes that this ratio is useful to investors because it provides an indication of whether the demand for our products is strengthening or declining. A ratio of greater than one is indicative of improving market demand, while a ratio of less than one would suggest weakening demand. In addition, the Company believes the book-to-bill ratio provides more meaningful insight into future revenues for our business than other measures, such as order backlog, because the majority of the Company's products are activity based consumable items or shorter cycle capital equipment, neither of which are typically ordered by customers far in advance.

Forum Energy Technologies, Inc.
Reconciliation of GAAP to non-GAAP financial information
(Unaudited)
Table 1 - Adjusting items
	Three months ended
	March 31, 2024												March 31, 2023												December 31, 2023
(in millions, except per share information)	Operating income				EBITDA(1)				Net income (loss)				Operating income				EBITDA(1)				Net income (loss)				Operating income				EBITDA(1)				Net income (loss)
As reported	$	3.2			$	15.8			$	(10.3	)		$	6.9			$	12.5			$	(3.5	)		$	1.8			$	1.4			$	(16.8	)
% of revenue		1.6	%			7.8	%							3.7	%			6.6	%							1.0	%			0.8	%
Restructuring, transaction and other costs		1.6				1.6				1.6				1.1				1.1				1.1				0.7				0.7				0.7
Transaction expenses		5.9				5.9				5.9				—				—				—				2.9				2.9				2.9
Loss (gain) on foreign exchange, net (2)		—				1.3				1.3				—				3.3				3.3				—				9.2				9.2
Stock-based compensation expense		—				1.5				—				—				0.8				—				—				1.2				—
As adjusted (1)	$	10.7			$	26.1			$	(1.5	)		$	8.0			$	17.7			$	0.9			$	5.4			$	15.4			$	(4.0	)
% of revenue		5.3	%			12.9	%							4.2	%			9.4	%							2.9	%			8.3	%
Diluted shares outstanding as reported										12.2												10.2												10.2
Diluted shares outstanding as adjusted										12.2												10.2												10.2
Diluted EPS - as reported									$	(0.85	)										$	(0.34	)										$	(1.64	)
Diluted EPS - as adjusted									$	(0.12	)										$	0.09											$	(0.39	)
(1) The Company believes that the presentation of EBITDA, adjusted EBITDA, adjusted operating loss, adjusted net loss and adjusted diluted EPS are useful to the Company's investors because (i) each of these financial metrics are useful to investors to assess and understand operating performance, especially when comparing those results with previous and subsequent periods or forecasting performance for future periods, primarily because management views the excluded items to be outside of the Company's normal operating results and (ii) EBITDA is an appropriate measure of evaluating the company's operating performance and liquidity that reflects the resources available for strategic opportunities including, among others, investing in the business, strengthening the balance sheet, repurchasing the Company's securities and making strategic acquisitions. In addition, these benchmarks are widely used in the investment community. See the attached separate schedule for the reconciliation of GAAP to non-GAAP financial information.
(2) Foreign exchange, net primarily relates to cash and receivables denominated in U.S. dollars by some of our non-U.S. subsidiaries that report in a local currency, and therefore the loss (gain) has no economic impact in dollar terms.

Forum Energy Technologies, Inc.
Reconciliation of GAAP to non-GAAP financial information
(Unaudited)
Table 2 - Adjusting Items
	Three months ended
(in millions of dollars)	March 31, 2024				March 31, 2023				December 31, 2023
EBITDA reconciliation (1)
Net loss	$	(10.3	)		$	(3.5	)		$	(16.8	)
Interest expense		8.8				4.5				4.6
Depreciation and amortization		13.8				8.7				8.7
Income tax expense		3.5				2.8				4.9
EBITDA	$	15.8			$	12.5			$	1.4
(1) The Company believes adjusted EBITDA is useful to investors because it is an appropriate measure of evaluating operating performance and liquidity. It reflects the resources available for strategic opportunities including, among others, investing in the business, strengthening the balance sheet, repurchasing the Company’s securities, and making strategic acquisitions. In addition, adjusted EBITDA is a widely used benchmark in the investment community.

Forum Energy Technologies, Inc.
Reconciliation of GAAP to non-GAAP financial information
(Unaudited)
Table 3 - Adjusting items
	Three months ended
(in millions of dollars)	March 31, 2024				March 31, 2023				December 31, 2023
Free cash flow, before acquisitions, reconciliation (1)
Net cash provided by (used in) operating activities	$	5.0			$	(23.1	)		$	11.3
Capital expenditures for property and equipment		(2.9	)			(1.1	)			(2.4	)
Proceeds from sale of property and equipment		0.2				0.3				—
Free cash flow, before acquisitions	$	2.3			$	(23.9	)		$	8.9
(1) The Company believes free cash flow, before acquisitions is an important measure because it encompasses both profitability and capital management in evaluating results.

Forum Energy Technologies, Inc.
Supplemental schedule - Product line revenue
(Unaudited)
	Three months ended
(in millions of dollars)	March 31, 2024					March 31, 2023					December 31, 2023
Revenue	$		%			$		%			$		%
Drilling	$	36.5	17.9	%		$	40.4	21.4	%		$	41.6	22.5	%
Subsea		21.8	10.8	%			12.8	6.8	%			27.6	14.9	%
Stimulation and Intervention		38.6	19.1	%			47.3	25.0	%			32.1	17.3	%
Coiled Tubing		22.2	11.0	%			26.3	13.9	%			25.3	13.7	%
Drilling and Completions		119.1	58.8	%			126.8	67.1	%			126.6	68.4	%
Downhole		52.2	25.8	%			23.2	12.3	%			21.7	11.7	%
Production Equipment		18.5	9.1	%			19.9	10.5	%			22.7	12.3	%
Valve Solutions		12.6	6.3	%			19.1	10.1	%			14.2	7.6	%
Artificial Lift and Downhole		83.3	41.2	%			62.2	32.9	%			58.6	31.6	%
Eliminations		—	—	%			—	—	%			—	—	%
Total revenue	$	202.4	100.0	%		$	189.0	100.0	%		$	185.2	100.0	%

Forum Energy Technologies, Inc.
Supplemental schedule - 2023 segment information provided for segment change
(Unaudited)
	As Reported																As Adjusted (3)
	Three months ended																Three months ended
(in millions of dollars)	December 31, 2023				September 30, 2023				June 30, 2023				March 31, 2023				December 31, 2023				September 30, 2023				June 30, 2023				March 31, 2023
Revenue
Drilling and Completions	$	126.6			$	118.9			$	130.3			$	126.8			$	126.6			$	118.9			$	130.3			$	126.8
Artificial Lift and Downhole		58.6				60.4				55.1				62.2				58.6				60.4				55.1				62.2
Eliminations		—				—				—				—				—				—				—				—
Total revenue	$	185.2			$	179.3			$	185.4			$	189.0			$	185.2			$	179.3			$	185.4			$	189.0
Operating income (loss)
Drilling and Completions	$	4.0			$	3.8			$	6.6			$	5.0			$	4.7			$	3.7			$	6.6			$	5.9
Operating Margin %		3.2	%			3.2	%			5.1	%			3.9	%			3.7	%			3.1	%			5.1	%			4.7	%
Artificial Lift and Downhole		7.4				8.5				7.0				8.6				7.4				8.8				7.2				8.6
Operating Margin %		12.6	%			14.1	%			12.7	%			13.8	%			12.6	%			14.6	%			13.1	%			13.8	%
Corporate		(6.7	)			(6.8	)			(6.7	)			(7.0	)			(6.7	)			(6.3	)			(6.6	)			(6.8	)
Total segment operating income		4.7				5.5				6.9				6.6				5.4				6.2				7.2				7.7
Other items not in segment operating income (1)		(2.9	)			0.2				(0.5	)			0.3				—				0.2				0.3				0.3
Total operating income	$	1.8			$	5.7			$	6.4			$	6.9			$	5.4			$	6.4			$	7.5			$	8.0
Operating Margin %		1.0	%			3.2	%			3.5	%			3.7	%			2.9	%			3.6	%			4.0	%			4.2	%
EBITDA (2)
Drilling and Completions	$	3.8			$	18.4			$	8.4			$	9.5			$	12.1			$	11.6			$	13.7			$	13.5
EBITDA Margin %		3.0	%			15.5	%			6.4	%			7.5	%			9.6	%			9.8	%			10.5	%			10.6	%
Artificial Lift and Downhole		8.5				10.2				7.4				10.1				8.7				10.1				8.6				10.1
EBITDA Margin %		14.5	%			16.9	%			13.4	%			16.2	%			14.8	%			16.7	%			15.6	%			16.2	%
Corporate		(10.9	)			(5.7	)			(7.3	)			(7.1	)			(5.4	)			(5.1	)			(4.9	)			(5.9	)
Total EBITDA	$	1.4			$	22.9			$	8.5			$	12.5			$	15.4			$	16.6			$	17.4			$	17.7
EBITDA Margin %		0.8	%			12.8	%			4.6	%			6.6	%			8.3	%			9.3	%			9.4	%			9.4	%
(1) Includes gain/(loss) on disposal of assets and other.
(2) The Company believes that the presentation of EBITDA is useful to the Company's investors because EBITDA is an appropriate measure for evaluating the Company's operating performance and liquidity that reflects the resources available for strategic opportunities including, among others, investing in the business, strengthening the balance sheet, repurchasing the Company's securities and making strategic acquisitions. In addition, EBITDA is a widely used benchmark in the investment community. See the attached separate schedule for the reconciliation of GAAP to non-GAAP financial information.
(3) Refer to [Supplemental schedule - 2023 adjusting items provided for segment change.]

Forum Energy Technologies, Inc.
Reconciliation of GAAP to non-GAAP financial information
(Unaudited)
Supplemental schedule - 2023 adjusting items provided for segment change
	Three months ended
	December 31, 2023												September 30, 2023												June 30, 2023												March 31, 2023
(in millions, except per share information)	Operating income				EBITDA (1)				Net income (loss)				Operating income				EBITDA (1)				Net income (loss)				Operating income				EBITDA (1)				Net income (loss)				Operating income				EBITDA (1)				Net income (loss)
As reported	$	1.8			$	1.4			$	(16.8	)		$	5.7			$	22.9			$	8.0			$	6.4			$	8.5			$	(6.6	)		$	6.9			$	12.5			$	(3.5	)
% of revenue		1.0	%			0.8	%							3.2	%			12.8	%							3.5	%			4.6	%							3.7	%			6.6	%
Restructuring, transaction and other costs		0.7				0.7				0.7				0.8				0.8				0.8				1.5				1.5				1.5				1.1				1.1				1.1
Transaction expenses		2.9				2.9				2.9				—				—				—				—				—				—				—				—				—
Inventory and other working capital adjustments		—				—				—				(0.1	)			(0.1	)			(0.1	)			(0.4	)			(0.4	)			(0.4	)			—				—				—
Loss (gain) on foreign exchange, net (2)		—				9.2				9.2				—				(8.2	)			(8.2	)			—				6.5				6.5				—				3.3				3.3
Stock-based compensation expense		—				1.2				—				—				1.2				—				—				1.3				—				—				0.8				—
As adjusted (1)	$	5.4			$	15.4			$	(4.0	)		$	6.4			$	16.6			$	0.5			$	7.5			$	17.4			$	1.0			$	8.0			$	17.7			$	0.9
% of revenue		2.9	%			8.3	%							3.6	%			9.3	%							4.0	%			9.4	%							4.2	%			9.4	%
Diluted shares outstanding as reported										10.2												10.4												10.2												10.2
Diluted shares outstanding as adjusted										10.2												10.4												10.2												10.2
Diluted EPS - as reported									$	(1.64	)										$	0.77											$	(0.64	)										$	(0.34	)
Diluted EPS - as adjusted									$	(0.39	)										$	0.05											$	0.10											$	0.09
(1) The Company believes that the presentation of EBITDA, adjusted EBITDA, adjusted operating loss, adjusted net loss and adjusted diluted EPS are useful to the Company's investors because (i) each of these financial metrics are useful to investors to assess and understand operating performance, especially when comparing those results with previous and subsequent periods or forecasting performance for future periods, primarily because management views the excluded items to be outside of the Company's normal operating results and (ii) EBITDA is an appropriate measure of evaluating the company's operating performance and liquidity that reflects the resources available for strategic opportunities including, among others, investing in the business, strengthening the balance sheet, repurchasing the Company's securities and making strategic acquisitions. In addition, these benchmarks are widely used in the investment community. See the attached separate schedule for the reconciliation of GAAP to non-GAAP financial information.
(2) Foreign exchange, net primarily relates to cash and receivables denominated in U.S. dollars by some of our non-U.S. subsidiaries that report in a local currency, and therefore the loss (gain) has no economic impact in dollar terms.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240502015037/en/

Rob Kukla

Director of Investor Relations

281.994.3763

rob.kukla@f-e-t.com

Source: Forum Energy Technologies, Inc.

FAQ

What was Forum Energy Technologies' revenue in the first quarter of 2024?

Forum Energy Technologies reported a revenue of $202 million in the first quarter of 2024.

What was the net loss in the first quarter of 2024 for Forum Energy Technologies?

Forum Energy Technologies incurred a net loss of $10 million in the first quarter of 2024.

What is the diluted EPS for Forum Energy Technologies in the first quarter of 2024?

Forum Energy Technologies reported a diluted EPS of $0.85 in the first quarter of 2024.

What is the Adjusted EBITDA for Forum Energy Technologies in the first quarter of 2024?

Forum Energy Technologies achieved an Adjusted EBITDA of $26 million in the first quarter of 2024.

What is the full-year 2024 guidance provided by Forum Energy Technologies?

Forum Energy Technologies reaffirmed its full-year 2024 guidance, estimating $100 to $120 million in EBITDA and $40 to $60 million in free cash flow.