Full Year 2023 Highlights and 2024 Guidance
- Revenue: $739 million, a 6% year-over-year increase
- Orders: $724 million and book-to-bill ratio of 98%
- Net loss: $19 million, or diluted EPS of $1.85
- Adjusted EBITDA: $67 million, a 14% increase from
2022
- 2024 Adjusted EBITDA guidance: $100 - $120 million
Forum Energy Technologies, Inc. (NYSE: FET) today announced
fourth quarter 2023 revenue of $185 million, a $6 million increase
from the third quarter. The fourth quarter net loss was $17
million, or $1.64 per diluted share, compared to third quarter net
income of $8 million, or $0.77 per diluted share. Excluding $9
million of foreign exchange losses and $4 million of transaction
and other nonrecurring items, cumulatively $1.25 per share,
adjusted net loss was $0.39 per diluted share, compared to adjusted
net income of $0.05 per diluted share in the third quarter. Fourth
quarter adjusted EBITDA was $15 million, compared to $17 million
for the third quarter. Free cash flow for the fourth quarter was $9
million compared to $24 million for the third quarter.
2023 revenue was $739 million, a $39 million increase from 2022.
Net loss for 2023 was $19 million, or $1.85 per diluted share,
compared to net income of $4 million, or $0.62 per diluted share,
for 2022. Adjusted net loss was $2 million, a $18 million
improvement from 2022. Adjusted EBITDA for 2023 was $67 million,
compared to $59 million for 2022. Free cash flow for 2023 was $2
million compared to $11 million for 2022.
Full year special items, on a pre-tax basis, included $11
million of foreign exchange losses, $4 million of transaction
expenses related to the Variperm acquisition, and $3 million of
restructuring and other costs.
See Tables 1-6 for a reconciliation of GAAP to non-GAAP
financial information.
Neal Lux, President and Chief Executive Officer, remarked, “2023
was a transformative year for FET. In addition to executing our
strategy, we accomplished two significant milestones that
accelerate FET’s long-term growth trajectory. We began the year by
reducing our long-term debt by 48%, and we ended the year with the
Variperm acquisition announcement.
“This highly accretive acquisition demonstrates strong
industrial logic. Variperm’s differentiated products and
patent-protected technologies complement our artificial lift
product portfolio, expanding the total addressable market for
FET.
“Together, we are a formidable manufacturer of highly engineered
products and solutions that we expect will generate significant
financial returns for our shareholders. In 2024, we are forecasting
EBITDA of $100 to $120 million and free cash flow between $40 to
$60 million.
“We executed our strategy, adapted to volatile market
conditions, and benefited from our strong global footprint,
delivering revenue and adjusted EBITDA growth of 6% and 14%,
respectively. Our full year 2023 book-to-bill ratio was just under
100%. The Subsea Technologies product line led the way with a
book-to-bill ratio of 129% and doubled its backlog from the
beginning of the year. Revenue grew in all our international
regions, led by a 72% increase in the Middle East. In the
aggregate, international revenue increased 23%, twice the pace of
international rig count growth.
“FET also benefited from increasing customer adoption of its
differentiated technology portfolio. We commercialized several new
products that we believe will drive revenue growth, including our
frac automated switch technology system, FASTConnect, and the next
generation iron roughneck. In addition, our Coiled Tubing product
line set new world records for length and weight of two different
strings, both for the Middle East.
“Our long-term outlook for the industry has not changed. The
world needs more energy. FET will be a leading equipment
manufacturer, delivering solutions that allow for safer, cleaner,
and more efficient energy production.”
Segment Results (unless
otherwise noted, comparisons are fourth quarter 2023 versus third
quarter 2023)
Drilling & Downhole segment revenue was $91 million, a 12%
increase, mainly due to higher project revenue recognized from ROVs
and cable management systems in our Subsea Technologies product
line. This increase was partially offset by lower sales volume in
our Downhole Technologies product line. Orders were $79 million, a
17% decrease, following strong third quarter bookings for new
remotely operated vehicles in our Subsea Technologies product line.
Segment adjusted EBITDA was $11 million, flat sequentially.
Drilling & Downhole operations focus primarily on capital
equipment and consumable products for global well construction,
artificial lift, and subsea markets.
Completions segment revenue was $57 million, a 8% decrease,
primarily related to lower shipments for coiled tubing products.
Orders were $58 million, a 11% decrease, primarily due to a softer
completions activity market in the U.S. Segment adjusted EBITDA was
$7 million, comparable to third quarter 2023 due to favorable
product mix. The Completions segment designs and manufactures
products for the coiled tubing, wireline and well stimulation
markets.
Production segment revenue was $37 million, comparable to third
quarter 2023, due to higher demand for our processing equipment and
technologies. The benefit of this higher demand was offset by lower
valve product sales. Orders were $23 million, a 40% decrease, due
to the timing of lumpy Production Equipment orders. Segment
adjusted EBITDA was $2 million, comparable to the third quarter
2023. The Production segment manufactures land well site production
equipment, desalination processing equipment, and a wide range of
valves for upstream, midstream and process industry customers.
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.
Non-GAAP Financial Measures
The Company presents its financial results in accordance with
GAAP. However, management believes that non-GAAP measures are
useful tools for evaluating the Company's overall financial
performance. Not all companies define these measures in the same
way. In addition, these non-GAAP financial measures are not a
substitute for those prepared in accordance with GAAP and should,
therefore, be considered only as a supplement. Please see the
attached schedules for reconciliations between GAAP and the
non-GAAP financial measures used in this press release.
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 net income (loss)
(Unaudited)
Three months ended
December 31,
September 30,
(in millions, except per share
information)
2023
2022
2023
Revenue
$
185.2
$
190.7
$
179.3
Cost of sales
135.5
140.7
128.3
Gross profit
49.7
50.0
51.0
Operating expenses
Selling, general and administrative
expenses
45.0
48.0
45.5
Transaction expenses
2.9
—
—
Gain on sale-leaseback transactions
—
(7.0
)
—
Gain on disposal of assets and other
—
(0.3
)
(0.2
)
Total operating expenses
47.9
40.7
45.3
Operating income
1.8
9.3
5.7
Other expense (income)
Interest expense
4.6
7.9
4.5
Foreign exchange losses (gains) and other,
net
9.1
12.5
(8.2
)
Total other (income) expense, net
13.7
20.4
(3.7
)
Income (loss) before income
taxes
(11.9
)
(11.1
)
9.4
Income tax expense
4.9
1.7
1.4
Net income (loss) (1)
$
(16.8
)
$
(12.8
)
$
8.0
Weighted average shares
outstanding
Basic
10.2
5.8
10.2
Diluted
10.2
5.8
10.4
Earnings (loss) per share
Basic
$
(1.64
)
$
(2.22
)
$
0.78
Diluted
$
(1.64
)
$
(2.22
)
$
0.77
(1) Refer to Table 1 for schedule of
adjusting items.
Forum Energy Technologies,
Inc.
Condensed consolidated
statements of net income (loss)
(Unaudited)
Year ended
December 31,
(in millions, except per share
information)
2023
2022
Revenue
$
738.9
$
699.9
Cost of sales
534.7
511.4
Gross profit
204.2
188.5
Operating expenses
Selling, general and administrative
expenses
180.4
179.5
Transaction expenses
2.9
—
Gain on sale-leaseback transactions
—
(7.0
)
Loss (gain) on disposal of assets and
other
0.2
(1.3
)
Total operating expenses
183.5
171.2
Operating income
20.7
17.3
Other expense (income)
Interest expense
18.3
31.5
Foreign exchange losses (gains) and other,
net
10.2
(24.5
)
Total other expense
28.5
7.0
Income (loss) before income
taxes
(7.8
)
10.3
Income tax expense
11.1
6.6
Net income (loss) (1)
$
(18.9
)
$
3.7
Weighted average shares
outstanding
Basic
10.2
5.7
Diluted
10.2
6.0
Earnings (loss) per share
Basic
$
(1.85
)
$
0.65
Diluted
$
(1.85
)
$
0.62
(1) Refer to Table 2 for schedule of
adjusting items.
Forum Energy Technologies,
Inc.
Condensed consolidated balance
sheets
(Unaudited)
(in millions of dollars)
December 31,
2023
December 31,
2022
Assets
Current assets
Cash and cash equivalents
$
46.2
$
51.0
Accounts receivable—trade, net
146.7
154.2
Inventories, net
299.6
269.8
Other current assets
37.1
37.9
Total current assets
529.6
512.9
Property and equipment, net of accumulated
depreciation
61.4
63.0
Operating lease assets
55.4
53.8
Intangible assets, net
168.0
191.5
Other long-term assets
6.7
10.1
Total assets
$
821.1
$
831.3
Liabilities and equity
Current liabilities
Current portion of long-term debt
$
1.2
$
0.8
Other current liabilities
203.1
209.7
Total current liabilities
204.3
210.5
Long-term debt, net of current portion
129.6
239.1
Other long-term liabilities
74.5
74.6
Total liabilities
408.4
524.2
Total equity
412.7
307.1
Total liabilities and equity
$
821.1
$
831.3
Forum Energy Technologies,
Inc.
Condensed consolidated cash
flow information
(Unaudited)
Year ended
December 31,
(in millions of dollars)
2023
2022
Cash flows from operating
activities
Net income (loss)
$
(18.9
)
$
3.7
Depreciation and amortization
34.7
37.1
Inventory write down
2.8
2.7
Gain on sale-leaseback transactions
—
(7.0
)
Other noncash items and changes in working
capital
(10.4
)
(53.6
)
Net cash provided by (used in)
operating activities
8.2
(17.1
)
Cash flows from investing
activities
Capital expenditures for property and
equipment
(7.9
)
(7.5
)
Acquisition of businesses, net of cash
acquired
—
(0.5
)
Proceeds from sale-leaseback
transactions
—
32.1
Proceeds from sale of property and
equipment
1.3
3.0
Net cash provided by (used in)
investing activities
(6.6
)
27.1
Cash flows from financing
activities
Borrowings of debt
451.7
556.6
Repayments of debt
(453.0
)
(557.8
)
Repurchases of stock
(6.0
)
(3.8
)
Deferred financing costs
(0.3
)
—
Net cash used in financing
activities
(7.6
)
(5.0
)
Effect of exchange rate changes on
cash
1.1
(0.8
)
Net increase (decrease) in cash, cash
equivalents and restricted cash
$
(4.9
)
$
4.2
Forum Energy Technologies,
Inc.
Supplemental schedule -
Segment information
(Unaudited)
As Reported
As Adjusted (3)
Three months ended
Three months ended
(in millions of dollars)
December
31,
2023
December
31,
2022
September
30,
2023
December
31,
2023
December
31,
2022
September
30,
2023
Revenue
Drilling & Downhole
$
90.9
$
81.1
$
81.2
$
90.9
$
81.1
$
81.2
Completions
57.4
74.1
62.5
57.4
74.1
62.5
Production
36.9
35.9
36.9
36.9
35.9
36.9
Eliminations
—
(0.4
)
(1.3
)
—
(0.4
)
(1.3
)
Total revenue
$
185.2
$
190.7
$
179.3
$
185.2
$
190.7
$
179.3
Operating income (loss)
Drilling & Downhole
$
8.6
$
8.2
$
8.4
$
8.8
$
8.1
$
8.5
Operating margin %
9.5
%
10.1
%
10.3
%
9.7
%
10.0
%
10.5
%
Completions
0.9
2.8
2.1
1.5
3.8
2.0
Operating margin %
1.6
%
3.8
%
3.4
%
2.6
%
5.1
%
3.2
%
Production
1.9
0.8
1.8
1.8
0.9
2.0
Operating margin %
5.1
%
2.2
%
4.9
%
4.9
%
2.5
%
5.4
%
Corporate
(6.7
)
(9.8
)
(6.8
)
(6.7
)
(7.1
)
(6.3
)
Total segment operating income
(loss)
4.7
2.0
5.5
5.4
5.7
6.2
Other items not in segment operating
income (loss) (1)
(2.9
)
7.3
0.2
—
0.3
0.2
Total operating income (loss)
$
1.8
$
9.3
$
5.7
$
5.4
$
6.0
$
6.4
Operating margin %
1.0
%
4.9
%
3.2
%
2.9
%
3.1
%
3.6
%
EBITDA (2)
Drilling & Downhole
$
3.7
$
5.8
$
18.2
$
11.4
$
11.2
$
11.4
EBITDA margin %
4.1
%
7.2
%
22.4
%
12.5
%
13.8
%
14.0
%
Completions
6.1
8.1
8.1
7.1
9.4
7.8
EBITDA margin %
10.6
%
10.9
%
13.0
%
12.4
%
12.7
%
12.5
%
Production
2.5
1.5
2.3
2.3
1.7
2.5
EBITDA margin %
6.8
%
4.2
%
6.2
%
6.2
%
4.7
%
6.8
%
Corporate
(10.9
)
(9.8
)
(5.7
)
(5.4
)
(5.8
)
(5.1
)
Total EBITDA
$
1.4
$
5.6
$
22.9
$
15.4
$
16.5
$
16.6
EBITDA margin %
0.8
%
2.9
%
12.8
%
8.3
%
8.7
%
9.3
%
(1) Includes transaction expenses, gain on
sale-leaseback transaction and 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 -
Segment information
(Unaudited)
As Reported
As Adjusted (3)
Year ended
Year ended
(in millions of dollars)
December 31,
2023
December 31,
2022
December 31,
2023
December 31,
2022
Revenue
Drilling & Downhole
$
329.6
$
304.6
$
329.6
$
304.6
Completions
265.6
265.0
265.6
265.0
Production
145.9
131.5
145.9
131.5
Eliminations
(2.2
)
(1.2
)
(2.2
)
(1.2
)
Total revenue
$
738.9
$
699.9
$
738.9
$
699.9
Operating income (loss)
Drilling & Downhole
$
33.8
$
32.2
$
34.0
$
32.5
Operating margin %
10.3
%
10.6
%
10.3
%
10.7
%
Completions
10.8
11.6
12.2
11.0
Operating margin %
4.1
%
4.4
%
4.6
%
4.2
%
Production
6.5
(0.4
)
6.9
(0.3
)
Operating margin %
4.5
%
(0.3
) %
4.7
%
(0.2
) %
Corporate
(27.3
)
(34.3
)
(26.5
)
(26.5
)
Total segment operating income
(loss)
23.8
9.1
26.6
16.7
Other items not in segment operating
income (loss) (1)
(3.1
)
8.2
0.6
0.6
Total operating income (loss)
$
20.7
$
17.3
$
27.2
$
17.3
Operating margin %
2.8
%
2.5
%
3.7
%
2.5
%
EBITDA (2)
Drilling & Downhole
$
35.5
$
72.8
$
45.1
$
45.2
EBITDA margin %
10.8
%
23.9
%
13.7
%
14.8
%
Completions
32.1
34.2
34.4
33.3
EBITDA margin %
12.1
%
12.9
%
13.0
%
12.6
%
Production
8.7
3.4
9.0
2.9
EBITDA margin %
6.0
%
2.6
%
6.2
%
2.2
%
Corporate
(31.1
)
(31.5
)
(21.4
)
(22.7
)
Total EBITDA
$
45.2
$
78.9
$
67.1
$
58.7
EBITDA margin %
6.1
%
11.3
%
9.1
%
8.4
%
(1) Includes transaction expenses, gain on
sale-leaseback transaction and 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 2 for schedule of
adjusting items.
Forum Energy Technologies,
Inc.
Supplemental schedule - Orders
information
(Unaudited)
Three months ended
(in millions of dollars)
December 31,
2023
December 31,
2022
September 30,
2023
Orders
Drilling & Downhole
$
78.9
$
87.2
$
95.0
Completions
58.2
81.4
65.1
Production
23.2
46.5
38.7
Total orders
$
160.3
$
215.1
$
198.8
Revenue
Drilling & Downhole
$
90.9
$
81.1
$
81.2
Completions
57.4
74.1
62.5
Production
36.9
35.9
36.9
Eliminations
—
(0.4
)
(1.3
)
Total revenue
$
185.2
$
190.7
$
179.3
Book to bill ratio (1)
Drilling & Downhole
0.87
1.08
1.17
Completions
1.01
1.10
1.04
Production
0.63
1.30
1.05
Total book to bill ratio
0.87
1.13
1.11
(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
December 31, 2023
December 31, 2022
September 30, 2023
(in millions, except per share
information)
Operating
income
(loss)
EBITDA (1)
Net
income
(loss)
Operating
income
(loss)
EBITDA (1)
Net
income
(loss)
Operating
income
(loss)
EBITDA (1)
Net
income
(loss)
As reported
$
1.8
$
1.4
$
(16.8
)
$
9.3
$
5.6
$
(12.8
)
$
5.7
$
22.9
$
8.0
% of revenue
1.0
%
0.8
%
4.9
%
2.9
%
3.2
%
12.8
%
Restructuring and other costs
0.7
0.7
0.7
2.7
2.7
2.7
0.8
0.8
0.8
Transaction expenses
2.9
2.9
2.9
—
—
—
—
—
—
Inventory and other working capital
adjustments
—
—
—
0.2
0.2
0.2
(0.1
)
(0.1
)
(0.1
)
Stock-based compensation expense
—
1.2
—
0.8
1.5
0.8
—
1.2
—
Loss (gain) on foreign exchange, net
(2)
—
9.2
9.2
—
13.5
13.5
—
(8.2
)
(8.2
)
Gain on sale-leaseback transactions
—
—
—
(7.0
)
(7.0
)
(7.0
)
—
—
—
As adjusted(1)
$
5.4
$
15.4
$
(4.0
)
$
6.0
$
16.5
$
(2.6
)
$
6.4
$
16.6
$
0.5
% of revenue
2.9
%
8.3
%
3.1
%
8.7
%
3.6
%
9.3
%
Diluted shares outstanding as reported
10.2
5.8
10.4
Diluted shares outstanding as adjusted
10.2
5.8
10.4
Diluted EPS - as reported
$
(1.64
)
$
(2.22
)
$
0.77
Diluted EPS - as adjusted
$
(0.39
)
$
(0.45
)
$
0.05
(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
Year ended
December 31, 2023
December 31, 2022
(in millions, except per share
information)
Operating
income
(loss)
EBITDA (1)
Net
income
(loss)
Operating
income
(loss)
EBITDA (1)
Net
income
(loss)
As reported
$
20.7
$
45.2
$
(18.9
)
$
17.3
$
78.9
$
3.7
% of revenue
2.8
%
6.1
%
2.5
%
11.3
%
Restructuring and other costs
3.1
3.1
3.1
8.9
8.9
8.9
Transaction expenses
3.9
3.9
3.9
—
—
—
Inventory and other working capital
adjustments
(0.5
)
(0.5
)
(0.5
)
(2.7
)
(2.7
)
(2.7
)
Stock-based compensation expense
—
4.6
—
0.8
4.0
0.8
Loss (gain) on foreign exchange, net
(2)
—
10.8
10.8
—
(23.4
)
(23.4
)
Gain on sale-leaseback transactions
—
—
—
(7.0
)
(7.0
)
(7.0
)
As adjusted (1)
$
27.2
$
67.1
$
(1.6
)
$
17.3
$
58.7
$
(19.7
)
% of revenue
3.7
%
9.1
%
2.5
%
8.4
%
Diluted shares outstanding as reported
10.2
6.0
Diluted shares outstanding as adjusted
10.2
6.0
Diluted EPS - as reported
$
(1.85
)
$
0.62
Diluted EPS - as adjusted
$
(0.16
)
$
(3.28
)
(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 3 - Adjusting
Items
Three months ended
(in millions of dollars)
December 31,
2023
December 31,
2022
September 30,
2023
EBITDA reconciliation (1)
Net income (loss)
$
(16.8
)
$
(12.8
)
$
8.0
Interest expense
4.6
7.9
4.5
Depreciation and amortization
8.7
8.8
9.0
Income tax expense
4.9
1.7
1.4
EBITDA
$
1.4
$
5.6
$
22.9
(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 4 - Adjusting
Items
Year ended
(in millions of dollars)
December 31,
2023
December 31,
2022
EBITDA reconciliation (1)
Net income (loss)
$
(18.9
)
$
3.7
Interest expense
18.3
31.5
Depreciation and amortization
34.7
37.1
Income tax expense
11.1
6.6
EBITDA
$
45.2
$
78.9
(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.
Free cash flow
(Unaudited)
Table 5 - Adjusting
items
Three months ended
(in millions of dollars)
December 31,
2023
December 31,
2022
September 30,
2023
Free cash flow, before acquisitions,
reconciliation (1)
Net cash provided by (used in) operating
activities
$
11.3
$
15.0
$
26.4
Capital expenditures for property and
equipment
(2.4
)
(2.7
)
(2.7
)
Proceeds from sale-leaseback
transactions
—
32.1
—
Proceeds from sale of property and
equipment
—
0.3
0.2
Free cash flow, before acquisitions
$
8.9
$
44.7
$
23.9
(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.
Free cash flow
(Unaudited)
Table 6 - Adjusting
items
Year ended
(in millions of dollars)
December 31,
2023
December 31,
2022
Free cash flow, before acquisitions,
reconciliation (1)
Net cash provided by (used in) operating
activities
$
8.2
$
(17.1
)
Capital expenditures for property and
equipment
(7.9
)
(7.5
)
Proceeds from sale-leaseback
transactions
—
32.1
Proceeds from sale of property and
equipment
1.3
3.0
Free cash flow, before acquisitions
$
1.6
$
10.5
(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)
December 31,
2023
December 31,
2022
September 30,
2023
Revenue
$
%
$
%
$
%
Drilling Technologies
$
41.6
22.5
%
$
42.5
22.2
%
$
43.0
24.0
%
Downhole Technologies
21.7
11.7
%
22.1
11.6
%
23.5
13.1
%
Subsea Technologies
27.6
14.9
%
16.5
8.7
%
14.7
8.2
%
Drilling & Downhole
90.9
49.1
%
81.1
42.5
%
81.2
45.3
%
Stimulation and Intervention
32.1
17.3
%
45.2
23.7
%
32.6
18.2
%
Coiled Tubing
25.3
13.7
%
28.9
15.2
%
29.9
16.7
%
Completions
57.4
31.0
%
74.1
38.9
%
62.5
34.9
%
Production Equipment
22.7
12.3
%
19.9
10.4
%
21.7
12.1
%
Valve Solutions
14.2
7.6
%
16.0
8.4
%
15.2
8.5
%
Production
36.9
19.9
%
35.9
18.8
%
36.9
20.6
%
Eliminations
—
—
%
(0.4
)
(0.2
) %
(1.3
)
(0.8
) %
Total revenue
$
185.2
100.0
%
$
190.7
100.0
%
$
179.3
100.0
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240229907867/en/
Rob Kukla Director of Investor Relations 281.994.3763
rob.kukla@f-e-t.com
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