Forum Energy Technologies, Inc. Provides Market Update
July 06 2020 - 6:21AM
Business Wire
Forum Energy Technologies, Inc. (“Forum” or the “Company”)
(NYSE: FET) today provided the following update on the status of
its business:
During the first half of 2020, the COVID-19 pandemic and
associated actions taken around the world to mitigate the spread of
Coronavirus caused a significant decline in economic activity and
oil demand. At the same time, the OPEC+ oil producing nations
increased production in a war for market share, which further
exacerbated the imbalance between supply and demand. The
combination of these shocks in both supply and demand caused a
significant decline in oil prices during the first quarter 2020 and
created an extremely challenging market for all sub-sectors of the
oil and natural gas industry throughout the second quarter
2020.
Due to the poor market conditions, exploration and production
companies in North America are under pressure to reduce existing
production and minimize capital and maintenance expenditures. As a
result, Forum has experienced a material reduction in demand for
many of its products and thus, its revenue. The Company expects
this to have a significant negative impact on demand for its
products and results of operations over the next several
quarters.
In response to the decline in demand for its products and
reductions in revenue, Forum has implemented several cost reduction
actions, including lowering headcount, reducing salaries for
executive officers and the broader workforce, suspension of the
Company's matching contribution to the U.S. and Canada defined
contribution plans, furloughs for select employee groups and
closing certain facilities.
In light of these market conditions, the Company has engaged
with certain of its stakeholders and recently announced an exchange
transaction to improve its maturity profile and enhance its
financial flexibility. If these efforts, including the proposed
transaction, are not successful, the Company will need to consider
other restructuring alternatives, including bankruptcy, which could
result in significant costs and the Company’s debt and
equityholders receiving diminished recovery on their
investments.
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
regarding the timing of closing of the transaction.
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,
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, the effects of the COVID-19 pandemic 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.
About Forum
Forum Energy Technologies, Inc. is a global oilfield products
company, serving the drilling, downhole, subsea, completions and
production 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.
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version on businesswire.com: https://www.businesswire.com/news/home/20200706005222/en/
Investor Contact Lyle Williams 713.351.7920
lyle.williams@f-e-t.com
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