Forum Energy Technologies, Inc. (NYSE:FET) today announced
second quarter 2017 revenue of $201 million, an increase of $30
million, or 18%, from the first quarter 2017. Net loss for the
quarter was $78 million, or $0.81 per diluted share, compared to a
net loss of $16 million, or $0.16 per diluted share, for the first
quarter 2017. Excluding $69 million or $0.71 per share of special
items, the adjusted net loss was $0.10 per diluted share in the
second quarter of 2017 compared to an adjusted net loss of $0.14
per diluted share in the first quarter 2017.
Special items in the second quarter of 2017 included pre-tax
charges of $68 million for goodwill impairment, $3 million for
restructuring charges, and $3 million of foreign exchange losses.
See Tables 1-5 for a reconciliation of GAAP to non-GAAP financial
information.
During the quarter, we reviewed the carrying value of the
goodwill in our Subsea product line, which represents less than 10%
of our revenues. The review was triggered by the softening of oil
prices and the developing consensus that production from low cost
oil basins would be sufficient to meet anticipated demand for a
longer period. This is expected to delay the need for production
from higher cost basins and delay the recovery in offshore
activity. As a result, we determined that the carrying value of the
goodwill in our Subsea product line was impaired.
Segment Results
Completions segment revenue was $55 million, a 29% increase
sequentially, primarily due to customer spending on pressure
pumping equipment. New inbound orders in the second quarter were
$67 million, a 31% increase from the first quarter 2017, resulting
in a book to bill ratio of 123%. The Completions segment designs
and manufactures products for the well construction, completion,
stimulation and intervention markets primarily in North
America.
Production & Infrastructure segment revenue was $83 million,
a 23% increase from the first quarter 2017, due to improved revenue
from both well site production equipment and valve products. New
inbound orders in the second quarter were $93 million, a 24%
increase from the first quarter 2017, resulting in a book to bill
ratio of 112%. During the quarter, orders for valves reached a
record level on strong demand in North America. The Production
& Infrastructure segment manufactures U.S. land well site
production equipment, desalination refinery equipment, and a wide
range of valves for energy, industrial and mining customers.
Drilling and Subsea segment revenue was $64 million, a 4%
increase from the first quarter 2017. Subsea equipment revenue was
flat with the previous quarter. New inbound orders for the Drilling
& Subsea segment in the second quarter were $54 million,
resulting in a book to bill ratio of 84%. Drilling & Subsea
operations focus primarily on manufactured equipment and consumable
products for global drilling and subsea contractors.
Review and Outlook
Prady Iyyanki, Forum’s President and Chief Executive Officer,
remarked, "We are pleased with our strong growth in orders and
revenue, especially within our Completions and Production &
Infrastructure segments, as both are highly levered to North
America activity. We generated 18% growth in revenue and returned
to positive adjusted EBITDA for the company, with improvement in
each of our three segments.
"Forum is benefiting from the recovery in the U.S. land drilling
and completions activity. Our U.S. revenue in the second quarter
increased 23% sequentially and represented 78% of total company
revenue. We expect continued strong demand for our Completions and
Production & Infrastructure products because of their exposure
to North American completions activity, even if the rig count
flattens or declines.
"Our financial liquidity remains strong. We ended the quarter
with $221 million of cash on hand and nothing drawn on our bank
credit facility. During the quarter, working capital expanded as we
ramped up our manufacturing volumes to respond to customer
demand.
"We are pleased with the acquisition of Multilift, which we
closed in July. Multilift’s innovative products extend the useful
life of an electrical submersible pump by protecting it against
sand and other solids. The acquisition fits with our strategy of
expanding our product offering in Completions.
"Forum expects diluted loss per share for the third quarter 2017
of $0.07 to $0.04 and sequential revenue growth of 8% to 12%."
Recent Events
Forum acquired Multilift for approximately $40 million. Based in
Houston, Texas, Multilift manufactures the patented SandGuardTM and
the CycloneTM completion tools.
Forum has received orders thus far in 2017 for over 480,000
horsepower of J-Mac hydraulic fracturing power ends and for eight
of its new innovative manifold trailers, the "ICBM."
Conference Call
Information
Forum's conference call is scheduled for Friday, July 28, 2017
at 9:00 AM CDT. During the call, the Company intends to discuss
second quarter 2017 results. To participate in the earnings
conference call, please call 855-757-8876 within North America, or
631-485-4851 outside of North America. The access code is 47060238.
The call will also be broadcast through the Investor Relations link
on Forum’s website at www.f-e-t.com.
Participants are encouraged to log in to the webcast or dial in to
the conference call approximately ten minutes prior to the start
time. A replay of the call will be available for two weeks after
the call and may be accessed by dialing 855-859-2056 within North
America, or 404-537-3406 outside of North America. The access code
is 47060238.
Forum Energy Technologies is a global oilfield products
company, serving the drilling, subsea, completions, production and
infrastructure sectors of the oil and natural gas
industry. The Company’s products include highly engineered
capital equipment as well as products that are consumed in the
drilling, well construction, production and transportation of oil
and natural gas. Forum is headquartered in Houston,
TX with manufacturing and distribution facilities
strategically located around the globe. 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 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 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 June 30, March
31, (in millions, except per share information)
2017 2016 2017 Revenue $ 201.1 $ 142.8
$ 171.1 Cost of sales 151.9 137.5 132.1 Gross
Profit 49.2 5.3 39.0
Other operating
items Selling, general and administrative expenses 62.0 58.3
60.7 Goodwill impairment 68.0 — — (Gain) loss on sale of assets 1.6
— (0.2 ) Transaction expenses 0.2 0.1 0.6
Total operating expenses 131.8 58.4 61.1 Earnings from equity
investment 2.6 0.2 1.5
Operating loss
(80.0 ) (52.9 ) (20.6 )
Other expense (income) Interest
expense 6.4 6.8 6.6 Loss (gain) on foreign exchange and other, net
2.6 (10.0 ) 1.6
Loss before income taxes (89.0
) (49.7 ) (28.8 ) Income tax benefit (11.1 ) (21.1 ) (13.0 )
Net
loss attributable to common stockholders (1) $ (77.9 ) $
(28.6 ) $ (15.8 )
Weighted average shares outstanding
Basic 96.2 90.7 95.9 Diluted 96.2 90.7 95.9
Loss per
share Basic $ (0.81 ) $ (0.31 ) $ (0.16 ) Diluted $ (0.81 ) $
(0.31 ) $ (0.16 ) (1) Refer to Table 1 for schedule of
adjusting items.
Forum Energy Technologies, Inc.
Condensed consolidated statements of income (loss)
(Unaudited) Six months ended June 30,
(in millions, except per share information)
2017
2016 Revenue $ 372.2 $ 302.2 Cost of sales 284.0
262.4 Gross Profit 88.2 39.8
Other
operating items Selling, general and administrative expenses
122.6 118.3 Goodwill impairment 68.0 — Loss on sale of assets 1.4 —
Transaction expenses 0.9 0.2 Total operating expenses
192.9 118.5 Earnings from equity investment 4.2 0.8
Operating loss (100.5 ) (77.9 )
Other expense
(income) Interest expense 13.0 13.9 Deferred loan costs written
off — 2.6 Loss (gain) on foreign exchange and other, net 4.1
(11.4 )
Loss before income taxes (117.6 ) (83.0 ) Income tax
benefit (24.0 ) (31.5 )
Net loss attributable to common
stockholders (1) $ (93.6 ) $ (51.5 )
Weighted
average shares outstanding Basic 96.0 90.6 Diluted 96.0 90.6
Loss per share Basic $ (0.98 ) $ (0.57 ) Diluted $
(0.98 ) $ (0.57 ) (1) Refer to Table 2 for schedule of
adjusting items.
Forum Energy Technologies, Inc.
Condensed consolidated balance sheets (Unaudited)
(in millions of dollars)
June 30,
2017 December 31, 2016 Assets
Current assets Cash and cash equivalents $ 220.5 $ 234.4 Accounts
receivable—trade, net 145.3 105.3 Inventories, net 364.8 338.6
Other current assets 36.5 71.4 Total current assets 767.1
749.7 Property and equipment, net of accumulated depreciation 149.4
152.2 Goodwill and other intangibles, net 809.1 869.2 Investment in
unconsolidated subsidiary 62.5 59.1 Other long-term assets 7.7
5.0
Total assets $ 1,795.8 $ 1,835.2
Liabilities and Equity Current liabilities Current portion
of long-term debt $ 1.1 $ 0.1 Other current liabilities 180.6
141.7 Total current liabilities 181.7 141.8 Long-term debt,
net of current portion 398.1 396.7 Other long-term liabilities 40.2
60.9
Total liabilities 620.0 599.4 Total
stockholders’ equity 1,175.8 1,235.2 Noncontrolling interest in
subsidiary — 0.6
Total equity 1,175.8 1,235.8
Total liabilities and equity $ 1,795.8 $ 1,835.2
Forum Energy Technologies, Inc. Condensed
consolidated cash flow information (Unaudited)
Six months ended June 30, (in millions of dollars)
2017 2016 Cash flows from operating
activities Net loss $ (93.6 ) $ (51.5 ) Goodwill
impairment 68.0 — Depreciation and amortization 30.2 31.6 Other,
primarily working capital 0.2 64.8
Net cash
provided by operating activities $ 4.8 $ 44.9
Cash flows from investing activities Capital expenditures
for property and equipment, net of proceeds from sale of property
and equipment $ (11.3 ) $ (6.3 ) Acquisition of businesses, net of
cash acquired (8.7 ) (2.7 ) Investment in unconsolidated subsidiary
(1.0 ) —
Net cash used in investing activities $
(21.0 ) $ (9.0 )
Cash flows from financing activities
Repayment of long-term and short-term debt (1.0 ) (0.2 ) Repurchase
of stock related to shares withheld for taxes (4.6 ) (1.1 )
Proceeds from stock issuance 2.0 1.1 Other — (0.5 )
Net
cash used in financing activities $ (3.6 ) $ (0.7 ) Effect of
exchange rate changes on cash 5.9 (7.2 )
Net increase
(decrease) in cash and cash equivalents $ (13.9 ) $ 28.0
Forum Energy Technologies, Inc. Supplemental
schedule - Segment information (Unaudited)
As Reported As Adjusted (5) Three months
ended Three months ended (in millions of dollars)
June 30, 2017 June 30, 2016
March 31, 2017 June 30, 2017
June 30, 2016 March 31,
2017 Revenue(6) Drilling & Subsea $ 64.0 $
55.2 $ 61.8 $ 64.0 $ 55.2 $ 61.8 Completions 54.5 26.3 42.4 54.5
26.3 42.4 Production & Infrastructure 83.1 61.8 67.6 83.1 61.8
67.6 Eliminations (0.5 ) (0.5 ) (0.7 ) (0.5 ) (0.5 ) (0.7 )
Total revenue $ 201.1 $ 142.8 $ 171.1 $
201.1 $ 142.8 $ 171.1
Operating
income (loss)(6) Drilling & Subsea $ (6.4 ) $ (20.9
) $ (8.4 ) $ (6.0 ) $ (12.2 ) $ (8.0 ) Operating income margin %
(10.0 )% (37.9 )% (13.6 )% (9.4 )% (22.1 )% (12.9 )% Completions
(1) 0.7 (27.6 ) (3.5 ) 0.7 (8.1 ) (3.5 ) Operating income margin %
1.3 % (104.9 )% (8.3 )% 1.3 % (30.8 )% (8.3 )% Production &
Infrastructure 3.4 2.6 (0.5 ) 3.6 3.6 (0.4 ) Operating income
margin % 4.1 % 4.2 % (0.7 )% 4.3 % 5.8 % (0.6 )% Corporate (7.8 )
(6.9 ) (7.8 ) (7.6 ) (6.7 ) (7.4 )
Total Segment operating
loss (10.1 ) (52.8 ) (20.2 ) (9.3 ) (23.4 ) (19.3 ) Other items
not in segment operating income (2) (69.9 ) (0.1 ) (0.4 ) 0.2
0.2 0.1
Total operating loss $ (80.0 )
$ (52.9 ) $ (20.6 ) $ (9.1 ) $ (23.2 ) $ (19.2 ) Operating income
margin % (39.8 )% (37.0 )% (12.0 )% (4.5 )% (16.2 )% (11.2 )%
EBITDA (3)(6) Drilling & Subsea $ (70.5 )
$ (1.7 ) $ (2.9 ) $ 0.6 $ (4.5 ) $ (1.0 ) EBITDA Margin % (110.2 )%
(3.1 )% (4.7 )% 0.9 % (8.2 )% (1.6 )% Completions 5.0 (21.2 ) 2.9
6.9 (1.6 ) 3.0 EBITDA Margin % 9.2 % (80.6 )% 6.8 % 12.7 % (6.1 )%
7.1 % Production & Infrastructure 5.7 2.3 1.8 5.9 5.2 2.0
EBITDA Margin % 6.9 % 3.7 % 2.7 % 7.1 % 8.4 % 3.0 % Corporate (7.7
) (6.6 ) (7.8 ) (7.5 ) (6.5 ) (7.4 ) Other items (4) (0.3 ) —
(0.6 ) — — —
Total EBITDA $
(67.8 ) $ (27.2 ) $ (6.6 ) $ 5.9 $ (7.4 ) $ (3.4 ) EBITDA
Margin % (33.7 )% (19.0 )% (3.9 )% 2.9 % (5.2 )% (2.0 )% (1)
Includes earnings from equity investment. (2) Includes transaction
expenses, gain/(loss) on sale of assets, and impairment of goodwill
and intangible assets. (3) The Company believes that the
presentation of EBITDA is useful to the Company's investors because
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, 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. (4)
Includes transaction expenses. (5) Refer to Table 1 for schedule of
adjusting items. (6) In order to better align with the predominant
customer base of the segment, we have moved management and
financial reporting of our fully rotational torque machine
operations, which operates under the AMC brand, from the Drilling
and Subsea segment to the Completions segment. Prior period
financial information has been revised to conform with current
period presentation with no impact to total segment operating
results.
Forum Energy Technologies, Inc.
Supplemental schedule - Segment information
(Unaudited) As Reported As
Adjusted (5) Six months ended Six months
ended (in millions of dollars)
June 30,
2017 June 30, 2016 June 30,
2017 June 30, 2016
Revenue(6) Drilling & Subsea $ 125.9 $ 119.6 $
125.9 $ 119.6 Completions 96.9 61.6 96.9 61.6 Production &
Infrastructure 150.7 122.3 150.7 122.3 Eliminations (1.3 ) (1.3 )
(1.3 ) (1.3 )
Total revenue $ 372.2 $ 302.2 $
372.2 $ 302.2
Operating income
(loss)(6) Drilling & Subsea $ (14.7 ) $ (30.6 ) $
(14.1 ) $ (21.4 ) Operating income margin % (11.7 )% (25.6 )% (11.2
)% (17.9 )% Completions (1) (2.8 ) (34.2 ) (2.7 ) (13.9 ) Operating
income margin % (2.9 )% (55.5 )% (2.8 )% (22.6 )% Production &
Infrastructure 2.8 1.2 3.3 4.4 Operating income margin % 1.9 % 1.0
% 2.2 % 3.6 % Corporate (15.6 ) (14.1 ) (15.0 ) (13.6 )
Total
Segment operating loss (30.3 ) (77.7 ) (28.5 ) (44.5 ) Other
items not in segment operating income (loss) (2) (70.2 ) (0.2 ) 0.3
0.3
Total operating loss $ (100.5 ) $ (77.9 )
$ (28.2 ) $ (44.2 ) Operating income margin % (27.0 )% (25.8 )%
(7.6 )% (14.6 )%
EBITDA (3)(6) Drilling &
Subsea $ (73.5 ) $ (2.2 ) $ (0.5 ) $ (6.0 ) EBITDA Margin % (58.4
)% (1.8 )% (0.4 )% (5.0 )% Completions 7.9 (21.4 ) 9.9 (1.0 )
EBITDA Margin % 8.2 % (34.7 )% 10.2 % (1.6 )% Production &
Infrastructure 7.5 2.6 7.8 7.7 EBITDA Margin % 5.0 % 2.1 % 5.2 %
6.3 % Corporate (15.4 ) (16.3 ) (14.7 ) (13.2 ) Other items (4)
(0.9 ) (0.2 ) — —
Total EBITDA $ (74.4 ) $
(37.5 ) $ 2.5 $ (12.5 ) EBITDA Margin % (20.0 )% (12.4 )%
0.7 % (4.1 )% (1) Includes earnings from equity investment.
(2) Includes transaction expenses, loss on sale of business,
gain/(loss) on sale of assets, and impairment of goodwill and
intangible assets. (3) The Company believes that the presentation
of EBITDA is useful to the Company's investors because 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, 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. (4)
Includes transaction expenses and loss on sale of business. (5)
Refer to Table 2 for schedule of adjusting items. (6) In order to
better align with the predominant customer base of the segment, we
have moved management and financial reporting of our fully
rotational torque machine operations, which operates under the AMC
brand, from the Drilling and Subsea segment to the Completions
segment. Prior period financial information has been revised to
conform with current period presentation with no impact to total
segment operating results.
Forum Energy Technologies,
Inc. Supplemental schedule - Orders information
(Unaudited) Three months ended (in
millions of dollars)
June 30, 2017
June 30, 2016 March 31, 2017
Orders(2) Drilling & Subsea $ 53.5 $ 48.3 $ 67.3
Completions 67.2 28.2 51.2 Production & Infrastructure 93.4
51.8 75.4
Total orders $ 214.1 $
128.3 $ 193.9
Revenue(2)
Drilling & Subsea $ 64.0 $ 55.2 $ 61.8 Completions 54.5 26.3
42.4 Production & Infrastructure 83.1 61.8 67.6 Eliminations
(0.5 ) (0.5 ) (0.7 )
Total revenue $ 201.1 $ 142.8
$ 171.1
Book to bill ratio (1)
Drilling & Subsea 0.84 0.88 1.09 Completions 1.23 1.07 1.21
Production & Infrastructure 1.12 0.84 1.12
Total book to bill ratio 1.06 0.90 1.13
(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. We believe that this ratio is useful to
the Company’s investors because it provides an indication of
whether the demand for our products, in the markets in which we
operate, 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, we believe
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 our products are activity based
consumable items or shorter cycle capital equipment, neither of
which are typically ordered by customers far in advance. (2) In
order to better align with the predominant customer base of the
segment, we have moved management and financial reporting of our
fully rotational torque machine operations, which operates under
the AMC brand, from the Drilling and Subsea segment to the
Completions segment. Prior period financial information has been
revised to conform with current period presentation with no impact
to total segment operating results.
Forum Energy
Technologies, Inc. Reconciliation of GAAP to non-GAAP
financial information (Unaudited) Table 1 -
Adjusting items Three months ended June 30, 2017
June 30, 2016 March 31, 2017 (in
millions, except per share information)
Operatingincome(loss)
EBITDA (1)
Netincome(loss)
Operatingincome(loss)
EBITDA (1)
Netincome(loss)
Operatingincome(loss)
EBITDA (1)
Netincome(loss)
As reported $ (80.0 ) $
(67.8 ) $ (77.9 ) $
(52.9 ) $ (27.2 ) $
(28.6 ) $ (20.6 ) $
(6.6 ) $ (15.8 ) % of revenue
(39.8 )% (33.7 )% (37.0 )% (19.0 )% (12.0 )% (3.9 )% Restructuring
charges and other 2.7 2.7 2.7 3.2 3.2 3.2 0.8 0.8 0.8 Transaction
expenses 0.2 0.2 0.2 0.1 0.1 0.1 0.6 0.6 0.6 Inventory and other
working capital reserve — — — 26.4 26.4 26.4 — — — Goodwill
impairment 68.0 68.0 68.0 — — — — — — Deferred loan costs written
off — — — — — — — — — Loss (gain) on foreign exchange, net (2) —
2.8 2.8 — (9.9 ) (9.9 ) — 1.8 1.8 Income tax benefit of adjustments
— — (5.2 ) — — (8.2 ) — —
(0.9 )
As adjusted (1) $ (9.1 )
$ 5.9 $ (9.4 ) $
(23.2 ) $ (7.4 ) $
(17.0 ) $ (19.2 ) $
(3.4 ) $ (13.5 ) % of revenue
(4.5 )% 2.9 % (16.2 )% (5.2 )% (11.2 )% (2.0 )%
Diluted EPS - as reported
$ (0.81 ) $ (0.31 ) $ (0.16 ) Diluted EPS - as adjusted $ (0.10 ) $
(0.19 ) $ (0.14 )
Table 2 - Adjusting items
Six months ended June 30, 2017 June 30,
2016 (in millions, except per share information)
Operatingincome(loss)
EBITDA (1)
Net income(loss)
Operatingincome(loss)
EBITDA (1)
Net income(loss)
As reported $ (100.5 ) $
(74.4 ) $ (93.6 ) $
(77.9 ) $ (37.5 ) $
(51.5 ) % of revenue (27.0 )% (20.0 )% (25.8 )% (12.4
)% Restructuring charges 3.4 3.4 3.4 7.0 7.0 7.0 Transaction
expenses 0.9 0.9 0.9 0.3 0.3 0.3 Inventory and other working
capital reserve — — — 26.4 26.4 26.4 Goodwill impairment 68.0 68.0
68.0 — — — Deferred loan costs written off — — — — 2.6 2.6 Gain on
foreign exchange, net (2) — 4.6 4.6 — (11.3 ) (11.3 ) Income tax
expense (benefit) of adjustments — — (6.1 ) — — (10.3 )
As
adjusted (1) $ (28.2 ) $
2.5 $ (22.8 ) $
(44.2 ) $ (12.5 ) $
(36.8 ) % of revenue (7.6 )% 0.7 % (14.6 )% (4.1 )%
Diluted EPS - as reported $ (0.98 ) $ (0.57 ) Diluted EPS -
as adjusted $ (0.24 ) $ (0.41 ) (1) The Company believes
that the presentation of EBITDA, adjusted EBITDA, adjusted
operating income and adjusted Diluted EPS is useful to the
Company's investors because (i) 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 and (ii) each of adjusted EBITDA, adjusted
operating income and adjusted Diluted EPS is 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. 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. (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 has no economic impact in dollar terms.
Forum Energy
Technologies, Inc. Reconciliation of GAAP to non-GAAP
financial information (Unaudited) Table 3 -
Adjusting Items Three months ended (in millions of
dollars)
June 30, 2017
June 30, 2016 March 31,
2017 EBITDA reconciliation (1) Net loss
attributable to common stockholders $ (77.9 ) $ (28.6 ) $ (15.8 )
Interest expense 6.4 6.8 6.6 Depreciation and amortization 14.8
15.7 15.6 Income tax benefit (11.1 ) (21.1 ) (13.0 )
EBITDA
$ (67.8 ) $ (27.2 )
$ (6.6 ) Table 4 - Adjusting
Items Six months ended (in millions of dollars)
June 30, 2017 June 30, 2016
EBITDA reconciliation (1) Net loss attributable to
common stockholders $ (93.6 ) $ (51.5 ) Interest expense 13.0 13.9
Depreciation and amortization 30.2 31.6 Income tax expense
(benefit) (24.0 ) (31.5 )
EBITDA $ (74.4
) $ (37.5 ) (1) The Company
believes that the presentation of EBITDA is useful to the Company's
investors because 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, EBITDA is a widely used benchmark in the
investment community.
Table 5 - Adjusting items
Six months ended (in millions of dollars)
June 30, 2017
June 30, 2016 Free cash flow, before
acquisitions, reconciliation (2) Net cash provided by
operating activities $ 4.8 $ 44.9 Capital expenditures for property
and equipment (13.0 ) (10.0 ) Proceeds from sale of property and
equipment 1.7 3.7 Free cash flow, before acquisitions
$ (6.5 ) $ 38.6
(2) The Company believes free cash flow, before acquisitions is an
important measure because it encompasses both profitability and
capital management in evaluating results.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170727006721/en/
Forum Energy Technologies, Inc.Investor ContactMark
Traylor, 281-368-1108Vice President, Investor
Relationsmark.traylor@f-e-t.comorMedia ContactDonna Smith,
281-949-2514Director, Marketing &
Communicationsdonna.smith@f-e-t.com
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