Forum Energy Technologies, Inc. (NYSE: FET) today announced first
quarter 2018 revenue of $250 million, an increase of $3 million from the
fourth quarter 2017. Net income for the quarter was $28 million, or
$0.25 per diluted share, compared to net income of $49 million, or $0.45
per diluted share, for the fourth quarter 2017. Excluding $36 million,
or $0.32 per share of special items, the adjusted net loss was $0.07 per
diluted share in the first quarter of 2018. This adjusted net loss
includes a negative impact of $0.02 per diluted share related to certain
unrecognized tax benefits.
Special items in the first quarter of 2018, on a pre-tax basis, included
a gain of $34 million related to the contribution of the subsea rentals
business to Ashtead Technology in exchange for a 40% interest in the
combined company and a $16 million tax benefit from applying updated
guidance on U.S. tax reform, partially offset by $4 million of foreign
exchange losses and $7 million of other charges. See Tables 1-3 for a
reconciliation of GAAP to non-GAAP financial information.
Segment Results
Completions segment revenue was $113 million, an increase of $9 million,
or 9%, sequentially, due to improved customer spending on pressure
pumping equipment, coiled tubing and downhole completion products. New
inbound orders in the first quarter were $111 million, an increase of
$10 million, or 10%, resulting in a book to bill ratio of 99%. 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 $86 million, a 6%
decrease from the fourth quarter 2017, after strong deliveries of well
site production equipment in the U.S. in the fourth quarter. New inbound
orders in the first quarter were $97 million, a 20% increase
sequentially, resulting in a book to bill ratio of 112%. Orders for
valves in the first quarter set another record, as customers prepare for
downstream projects later in the year. 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 & Subsea segment revenue was $52 million, a decrease of $2
million from the fourth quarter 2017, primarily due to the contribution
of the subsea rentals business to Ashtead in early January 2018. The
decline in subsea revenue was partially offset by higher sales of
drilling consumable products and handling tools. New inbound orders in
the first quarter were $53 million, a 7% increase from the fourth
quarter 2017, resulting in a book to bill ratio of 102%, led by orders
for drilling equipment in the U.S., partially offset by delays of long
anticipated orders for subsea capital equipment. 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,
"Our overall performance was in line with our expectations, except for
the Subsea product line. Drilling and completions activity in North
America continued to improve and we began to see the early signs of a
recovery in international land drilling activity. These improving market
fundamentals drove growth in orders in each of our three segments.
"New orders received by Forum in the first quarter were $261 million, a
$30 million increase, or 13% sequentially, resulting in a book to bill
ratio of 104%. Despite the slow start to the quarter, revenue was up
from the prior quarter to $250 million. Adjusted EBITDA was $19 million,
even with a sequential decrease of approximately $4.5 million in the
Subsea product line.
"Our financial liquidity remains strong. During the quarter, we paid
down $50 million on our revolving credit facility and we ended the
quarter with approximately $277 million of total liquidity.
"We expect robust growth for the balance of the year, led by our North
America focused Completions and Production & Infrastructure segments. We
are also well positioned to capture growth opportunities in our Drilling
product line as the global land rig count improves. Regarding Subsea, we
expect to receive some large non-oil and gas orders in the second
quarter. With these orders, and our continued focus on streamlining
operations, Subsea will achieve EBITDA break even or better for the
balance of the year."
Recent Events
Forum received orders in the first quarter of 2018 for over 280,000
horsepower of J-Mac hydraulic fracturing power ends.
Forum was awarded a multiyear frame agreement to supply its Davis-Lynch
casing and cementing equipment to an international service company,
providing the opportunity to obtain significant incremental revenue.
On January 3, 2018, the Company contributed Forum Subsea Rentals into
Ashtead Technology, a competing business, in exchange for a 40% interest
in the combined company. The transaction creates a market leading
independent provider of subsea survey and remotely operated vehicle
equipment rental services.
Conference Call Information
Forum's conference call is scheduled for Tuesday, May 1, 2018 at 9:00 AM
CDT. During the call, the Company intends to discuss first quarter 2018
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 8694337. 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 8694337.
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.
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Forum Energy Technologies, Inc.
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Condensed consolidated statements of income (loss)
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(Unaudited)
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Three months ended
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March 31,
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December 31,
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(in millions, except per share information)
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2018
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2017
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2017
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Revenue
|
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$
|
250.2
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$
|
171.1
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$
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247.7
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Cost of sales
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182.9
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132.1
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194.7
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Gross profit
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67.3
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39.0
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53.0
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Operating expenses
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Selling, general and administrative expenses
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72.1
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60.7
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68.0
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Goodwill and intangible asset impairments
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—
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—
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0.4
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Transaction expenses
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1.3
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0.6
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4.8
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Loss (gain) on disposal of assets and other
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(0.4
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)
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(0.2
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)
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0.5
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Total operating expenses
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73.0
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61.1
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73.7
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Earnings (loss) from equity investment
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(1.0
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)
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1.5
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(6.4
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)
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Operating loss
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(6.7
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)
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(20.6
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)
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(27.1
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)
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Other expense (income)
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Interest expense
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8.1
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6.6
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7.5
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Foreign exchange losses and other, net
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3.5
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1.5
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0.7
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Gain on contribution of subsea rentals business
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(33.5
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)
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—
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—
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Gain on previously held equity investment
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—
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—
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(120.4
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)
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Total other (income) expense, net
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(21.9
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)
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8.1
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(112.2
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)
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Income (loss) before income taxes
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15.2
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(28.7
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)
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85.1
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Income tax expense (benefit) (1)
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(12.9
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)
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(12.9
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)
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36.0
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Net income (loss) (2)
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$
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28.1
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$
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(15.8
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)
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$
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49.1
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Weighted average shares outstanding
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Basic
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108.4
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95.9
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105.9
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Diluted
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110.9
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95.9
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108.6
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Earnings (loss) per share
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Basic
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$
|
0.26
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$
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(0.16
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)
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$
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0.46
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Diluted
|
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|
|
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$
|
0.25
|
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$
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(0.16
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)
|
|
|
$
|
0.45
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|
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|
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(1) U.S. tax reform significantly changes U.S.
corporate income tax laws by, among other things, reducing the
U.S. corporate income tax rate to 21% starting in 2018 and
creating a territorial tax system with a one-time mandatory tax on
previously deferred earnings of non-U.S. subsidiaries. As a
result, the Company recorded a provisional charge of $10.1 million
during the fourth quarter of 2017. Based on guidance recently
issued by the U.S. Internal Revenue Service ("IRS"), the Company
updated our provisional estimate and recorded a $16.2 million
benefit in the first quarter of 2018 to reflect the revised
provisional estimate. The impacts related to U.S. tax reform
remain provisional in nature and are subject to further adjustment
as additional guidance is provided by the U.S. IRS regarding the
application of the new U.S. corporate income tax laws.
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(2) Refer to Table 1 for schedule of adjusting items.
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Forum Energy Technologies, Inc.
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Condensed consolidated balance sheets
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(Unaudited)
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(in millions of dollars)
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March 31,
2018
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December 31,
2017
|
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Assets
|
|
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Current assets
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Cash and cash equivalents
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$
|
42.3
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$
|
115.2
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Accounts receivable—trade, net
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|
|
|
|
194.9
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|
|
|
|
202.9
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Inventories, net
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|
|
|
468.9
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|
|
|
|
443.2
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Other current assets
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|
|
|
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47.9
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|
|
|
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29.1
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Total current assets
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754.0
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790.4
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Property and equipment, net of accumulated depreciation
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184.5
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|
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197.3
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Goodwill and other intangibles, net
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|
|
1,184.5
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1,198.3
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Investment in unconsolidated subsidiary
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43.1
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|
|
|
|
—
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Other long-term assets
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|
|
|
16.4
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|
|
|
|
9.2
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Total assets
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|
|
|
|
$
|
2,182.5
|
|
|
|
|
$
|
2,195.2
|
|
Liabilities and equity
|
|
|
|
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|
|
|
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|
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Current liabilities
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|
|
|
|
|
|
|
|
|
|
Current portion of long-term debt
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|
|
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$
|
1.1
|
|
|
|
|
$
|
1.2
|
|
Other current liabilities
|
|
|
|
|
216.1
|
|
|
|
|
215.1
|
|
Total current liabilities
|
|
|
|
|
217.2
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|
|
|
|
216.3
|
|
Long-term debt, net of current portion
|
|
|
|
|
456.6
|
|
|
|
|
506.8
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|
Other long-term liabilities
|
|
|
|
|
61.8
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|
|
|
|
63.1
|
|
Total liabilities
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|
|
|
|
735.6
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|
|
|
|
786.2
|
|
Total equity
|
|
|
|
|
1,446.9
|
|
|
|
|
1,409.0
|
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Total liabilities and equity
|
|
|
|
|
$
|
2,182.5
|
|
|
|
|
$
|
2,195.2
|
|
|
|
|
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Forum Energy Technologies, Inc.
|
|
Condensed consolidated cash flow information
|
|
(Unaudited)
|
|
|
|
|
|
|
|
Three months ended March 31,
|
|
(in millions of dollars)
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|
|
|
|
|
2018
|
|
|
|
2017
|
|
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
|
|
|
|
$
|
28.1
|
|
|
|
|
$
|
(15.8
|
)
|
|
Depreciation and amortization
|
|
|
|
|
|
18.7
|
|
|
|
|
15.5
|
|
|
Other, primarily working capital
|
|
|
|
|
|
(66.1
|
)
|
|
|
|
(14.7
|
)
|
|
Net cash used in operating activities
|
|
|
|
|
|
(19.3
|
)
|
|
|
|
(15.0
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)
|
|
|
|
|
|
|
|
|
|
|
|
|
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Cash flows from investing activities
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|
|
|
|
|
|
|
|
|
|
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Capital expenditures for property and equipment
|
|
|
|
|
|
(5.1
|
)
|
|
|
|
(3.5
|
)
|
|
Proceeds from sale of business, property and equipment
|
|
|
|
|
|
5.1
|
|
|
|
|
—
|
|
|
Acquisition of businesses, net of cash acquired
|
|
|
|
|
|
—
|
|
|
|
|
(8.7
|
)
|
|
Investment in unconsolidated subsidiary
|
|
|
|
|
|
—
|
|
|
|
|
(1.0
|
)
|
|
Net cash used in investing activities
|
|
|
|
|
|
—
|
|
|
|
|
(13.2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|
|
|
Repayments of debt
|
|
|
|
|
|
(50.7
|
)
|
|
|
|
(0.9
|
)
|
|
Repurchases of stock
|
|
|
|
|
|
(2.0
|
)
|
|
|
|
(4.4
|
)
|
|
Proceeds from stock issuance
|
|
|
|
|
|
—
|
|
|
|
|
1.8
|
|
|
Net cash used in financing activities
|
|
|
|
|
|
(52.7
|
)
|
|
|
|
(3.5
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash
|
|
|
|
|
|
(0.9
|
)
|
|
|
|
2.2
|
|
|
Net decrease in cash, cash equivalents and restricted cash
|
|
|
|
|
|
$
|
(72.9
|
)
|
|
|
|
$
|
(29.5
|
)
|
|
|
|
|
|
Forum Energy Technologies, Inc.
|
|
Supplemental schedule - Segment information
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As Reported
|
|
|
As Adjusted (4)
|
|
|
|
|
|
|
|
Three months ended
|
|
|
Three months ended
|
|
(in millions of dollars)
|
|
|
|
|
|
March 31,
2018
|
|
|
March 31,
2017
|
|
|
December 31,
2017
|
|
|
March 31,
2018
|
|
|
March 31,
2017
|
|
|
December 31,
2017
|
|
Revenue (5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Drilling & Subsea
|
|
|
|
|
|
$
|
52.3
|
|
|
|
$
|
61.9
|
|
|
|
$
|
54.1
|
|
|
|
$
|
52.3
|
|
|
|
$
|
61.9
|
|
|
|
$
|
54.1
|
|
|
Completions
|
|
|
|
|
|
112.5
|
|
|
|
42.4
|
|
|
|
103.3
|
|
|
|
112.5
|
|
|
|
42.4
|
|
|
|
103.3
|
|
|
Production & Infrastructure
|
|
|
|
|
|
86.4
|
|
|
|
67.6
|
|
|
|
91.6
|
|
|
|
86.4
|
|
|
|
67.6
|
|
|
|
91.6
|
|
|
Eliminations
|
|
|
|
|
|
(1.0
|
)
|
|
|
(0.8
|
)
|
|
|
(1.3
|
)
|
|
|
(1.0
|
)
|
|
|
(0.8
|
)
|
|
|
(1.3
|
)
|
|
Total revenue
|
|
|
|
|
|
$
|
250.2
|
|
|
|
$
|
171.1
|
|
|
|
$
|
247.7
|
|
|
|
$
|
250.2
|
|
|
|
$
|
171.1
|
|
|
|
$
|
247.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss)(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Drilling & Subsea (1)
|
|
|
|
|
|
$
|
(10.2
|
)
|
|
|
$
|
(8.3
|
)
|
|
|
$
|
(8.0
|
)
|
|
|
$
|
(8.6
|
)
|
|
|
$
|
(8.0
|
)
|
|
|
$
|
(6.5
|
)
|
|
Operating income margin %
|
|
|
|
|
|
(19.5
|
)%
|
|
|
(13.4
|
)%
|
|
|
(14.8
|
)%
|
|
|
(16.4
|
)%
|
|
|
(12.9
|
)%
|
|
|
(12.0
|
)%
|
|
Completions (1)
|
|
|
|
|
|
8.9
|
|
|
|
(3.5
|
)
|
|
|
(5.5
|
)
|
|
|
12.1
|
|
|
|
(3.5
|
)
|
|
|
10.3
|
|
|
Operating income margin %
|
|
|
|
|
|
7.9
|
%
|
|
|
(8.3
|
)%
|
|
|
(5.3
|
)%
|
|
|
10.8
|
%
|
|
|
(8.3
|
)%
|
|
|
10.0
|
%
|
|
Production & Infrastructure
|
|
|
|
|
|
4.2
|
|
|
|
(0.6
|
)
|
|
|
0.7
|
|
|
|
4.2
|
|
|
|
(0.4
|
)
|
|
|
5.0
|
|
|
Operating income margin %
|
|
|
|
|
|
4.9
|
%
|
|
|
(0.9
|
)%
|
|
|
0.8
|
%
|
|
|
4.9
|
%
|
|
|
(0.6
|
)%
|
|
|
5.5
|
%
|
|
Corporate
|
|
|
|
|
|
(8.7
|
)
|
|
|
(7.8
|
)
|
|
|
(8.5
|
)
|
|
|
(8.3
|
)
|
|
|
(7.4
|
)
|
|
|
(8.1
|
)
|
|
Total segment operating loss
|
|
|
|
|
|
(5.8
|
)
|
|
|
(20.2
|
)
|
|
|
(21.3
|
)
|
|
|
(0.6
|
)
|
|
|
(19.3
|
)
|
|
|
0.7
|
|
|
Other items not in segment operating income (2)
|
|
|
|
|
|
(0.9
|
)
|
|
|
(0.4
|
)
|
|
|
(5.8
|
)
|
|
|
0.6
|
|
|
|
0.1
|
|
|
|
0.1
|
|
|
Total operating loss
|
|
|
|
|
|
$
|
(6.7
|
)
|
|
|
$
|
(20.6
|
)
|
|
|
$
|
(27.1
|
)
|
|
|
$
|
—
|
|
|
|
$
|
(19.2
|
)
|
|
|
$
|
0.8
|
|
|
Operating income margin %
|
|
|
|
|
|
(2.7
|
)%
|
|
|
(12.0
|
)%
|
|
|
(10.9
|
)%
|
|
|
—
|
%
|
|
|
(11.2
|
)%
|
|
|
0.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA (3)(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Drilling & Subsea
|
|
|
|
|
|
$
|
25.0
|
|
|
|
$
|
(3.0
|
)
|
|
|
$
|
(2.0
|
)
|
|
|
$
|
(3.6
|
)
|
|
|
$
|
(1.0
|
)
|
|
|
$
|
(0.2
|
)
|
|
EBITDA Margin %
|
|
|
|
|
|
47.8
|
%
|
|
|
(4.8
|
)%
|
|
|
(3.7
|
)%
|
|
|
(6.9
|
)%
|
|
|
(1.6
|
)%
|
|
|
(0.4
|
)%
|
|
Completions
|
|
|
|
|
|
20.3
|
|
|
|
2.9
|
|
|
|
122.3
|
|
|
|
23.6
|
|
|
|
3.0
|
|
|
|
21.7
|
|
|
EBITDA Margin %
|
|
|
|
|
|
18.0
|
%
|
|
|
6.8
|
%
|
|
|
118.4
|
%
|
|
|
21.0
|
%
|
|
|
7.1
|
%
|
|
|
21.0
|
%
|
|
Production & Infrastructure
|
|
|
|
|
|
7.0
|
|
|
|
1.8
|
|
|
|
2.1
|
|
|
|
7.2
|
|
|
|
2.0
|
|
|
|
7.3
|
|
|
EBITDA Margin %
|
|
|
|
|
|
8.1
|
%
|
|
|
2.7
|
%
|
|
|
2.3
|
%
|
|
|
8.3
|
%
|
|
|
3.0
|
%
|
|
|
8.0
|
%
|
|
Corporate
|
|
|
|
|
|
(10.4
|
)
|
|
|
(8.3
|
)
|
|
|
(10.0
|
)
|
|
|
(8.3
|
)
|
|
|
(7.4
|
)
|
|
|
(8.2
|
)
|
|
Total EBITDA
|
|
|
|
|
|
$
|
41.9
|
|
|
|
$
|
(6.6
|
)
|
|
|
$
|
112.4
|
|
|
|
$
|
18.9
|
|
|
|
$
|
(3.4
|
)
|
|
|
$
|
20.6
|
|
|
EBITDA Margin %
|
|
|
|
|
|
16.7
|
%
|
|
|
(3.9
|
)%
|
|
|
45.4
|
%
|
|
|
7.6
|
%
|
|
|
(2.0
|
)%
|
|
|
8.3
|
%
|
|
|
|
(1) Includes earnings (loss) from equity investment.
|
|
(2) Includes transaction expenses, gain/(loss) on sale of
assets, and intangible assets impairments.
|
|
(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) Refer to Table 1 for schedule of adjusting items.
|
|
(5) In order to better align with the predominant
customer base of the segment, the Company has moved management and
financial reporting of the Company's 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)
|
|
|
|
|
|
March 31,
2018
|
|
|
March 31,
2017
|
|
|
December 31,
2017
|
|
Orders(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Drilling & Subsea
|
|
|
|
|
|
$
|
53.1
|
|
|
|
$
|
68.4
|
|
|
|
$
|
49.6
|
|
|
Completions
|
|
|
|
|
|
111.1
|
|
|
|
50.1
|
|
|
|
101.1
|
|
|
Production & Infrastructure
|
|
|
|
|
|
96.8
|
|
|
|
75.4
|
|
|
|
80.8
|
|
|
Total orders
|
|
|
|
|
|
$
|
261.0
|
|
|
|
$
|
193.9
|
|
|
|
$
|
231.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Drilling & Subsea
|
|
|
|
|
|
$
|
52.3
|
|
|
|
$
|
61.9
|
|
|
|
$
|
54.1
|
|
|
Completions
|
|
|
|
|
|
112.5
|
|
|
|
42.4
|
|
|
|
103.3
|
|
|
Production & Infrastructure
|
|
|
|
|
|
86.4
|
|
|
|
67.6
|
|
|
|
91.6
|
|
|
Eliminations
|
|
|
|
|
|
(1.0
|
)
|
|
|
(0.8
|
)
|
|
|
(1.3
|
)
|
|
Total revenue
|
|
|
|
|
|
$
|
250.2
|
|
|
|
$
|
171.1
|
|
|
|
$
|
247.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Book to bill ratio (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Drilling & Subsea
|
|
|
|
|
|
1.02
|
|
|
|
1.11
|
|
|
|
0.92
|
|
|
Completions
|
|
|
|
|
|
0.99
|
|
|
|
1.18
|
|
|
|
0.98
|
|
|
Production & Infrastructure
|
|
|
|
|
|
1.12
|
|
|
|
1.12
|
|
|
|
0.88
|
|
|
Total book to bill ratio
|
|
|
|
|
|
1.04
|
|
|
|
1.13
|
|
|
|
0.93
|
|
|
|
|
(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, in the markets in which the Company
operates, 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.
|
|
(2) In order to better align with the predominant
customer base of the segment, the Company has moved management and
financial reporting of the Company's 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
|
|
|
|
|
|
|
March 31, 2018
|
|
|
March 31, 2017
|
|
|
December 31, 2017
|
|
(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
|
|
|
|
|
$
|
(6.7
|
)
|
|
|
$
|
41.9
|
|
|
|
$
|
28.1
|
|
|
|
$
|
(20.6
|
)
|
|
|
$
|
(6.6
|
)
|
|
|
$
|
(15.8
|
)
|
|
|
$
|
(27.1
|
)
|
|
|
$
|
112.4
|
|
|
|
$
|
49.1
|
|
|
% of revenue
|
|
|
|
|
(2.7
|
)%
|
|
|
16.7
|
%
|
|
|
|
|
|
(12.0
|
)%
|
|
|
(3.9
|
)%
|
|
|
|
|
|
(10.9
|
)%
|
|
|
45.4
|
%
|
|
|
|
|
Restructuring charges and other
|
|
|
|
|
2.9
|
|
|
|
2.9
|
|
|
|
3.3
|
|
|
|
0.8
|
|
|
|
0.8
|
|
|
|
0.8
|
|
|
|
3.3
|
|
|
|
3.3
|
|
|
|
3.3
|
|
|
Transaction expenses
|
|
|
|
|
1.3
|
|
|
|
1.3
|
|
|
|
1.3
|
|
|
|
0.6
|
|
|
|
0.6
|
|
|
|
0.6
|
|
|
|
4.8
|
|
|
|
4.8
|
|
|
|
4.8
|
|
|
Inventory and other working capital reserve
|
|
|
|
|
2.5
|
|
|
|
2.5
|
|
|
|
2.5
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
13.0
|
|
|
|
13.0
|
|
|
|
13.0
|
|
|
Goodwill and intangible asset impairment
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.4
|
|
|
|
0.4
|
|
|
|
0.4
|
|
|
Gain on subsea rentals business contributed to Ashtead
|
|
|
|
|
—
|
|
|
|
(33.5
|
)
|
|
|
(33.5
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Gain realized on previously held equity investment
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(120.4
|
)
|
|
|
(120.4
|
)
|
|
Acquisition related equity-based compensation recorded by equity
investment subsidiary
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
6.4
|
|
|
|
6.4
|
|
|
|
6.4
|
|
|
Loss (gain) on foreign exchange, net(2)
|
|
|
|
|
—
|
|
|
|
3.8
|
|
|
|
3.8
|
|
|
|
—
|
|
|
|
1.8
|
|
|
|
1.8
|
|
|
|
—
|
|
|
|
0.7
|
|
|
|
0.7
|
|
|
Income tax expense (benefit) of adjustments
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
3.2
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(0.9
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
23.5
|
|
|
Impact of U.S. tax reform
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(16.2
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
10.1
|
|
|
U.K. NOL valuation allowance
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
4.5
|
|
|
As adjusted(1)
|
|
|
|
|
$
|
—
|
|
|
|
$
|
18.9
|
|
|
|
$
|
(7.5
|
)
|
|
|
$
|
(19.2
|
)
|
|
|
$
|
(3.4
|
)
|
|
|
$
|
(13.5
|
)
|
|
|
$
|
0.8
|
|
|
|
$
|
20.6
|
|
|
|
$
|
(4.6
|
)
|
|
% of revenue
|
|
|
|
|
—
|
%
|
|
|
7.6
|
%
|
|
|
|
|
|
(11.2
|
)%
|
|
|
(2.0
|
)%
|
|
|
|
|
|
0.3
|
%
|
|
|
8.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted shares outstanding as reported
|
|
|
|
|
|
|
|
|
|
|
110.9
|
|
|
|
|
|
|
|
|
|
95.9
|
|
|
|
|
|
|
|
|
|
108.6
|
|
|
Diluted shares outstanding as adjusted
|
|
|
|
|
|
|
|
|
|
|
108.4
|
|
|
|
|
|
|
|
|
|
95.9
|
|
|
|
|
|
|
|
|
|
108.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted EPS - as reported
|
|
|
|
|
|
|
|
|
|
|
$
|
0.25
|
|
|
|
|
|
|
|
|
|
$
|
(0.16
|
)
|
|
|
|
|
|
|
|
|
$
|
0.45
|
|
|
Diluted EPS - as adjusted
|
|
|
|
|
|
|
|
|
|
|
$
|
(0.07
|
)
|
|
|
|
|
|
|
|
|
$
|
(0.14
|
)
|
|
|
|
|
|
|
|
|
$
|
(0.04
|
)
|
|
|
|
(1) The Company believes that the presentation of
EBITDA, adjusted EBITDA, adjusted operating income and adjusted
Diluted EPS is useful to 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 2 - Adjusting Items
|
|
|
|
|
|
|
|
|
Three months ended
|
|
(in millions of dollars)
|
|
|
|
|
March 31,
2018
|
|
|
March 31,
2017
|
|
|
December 31,
2017
|
|
EBITDA reconciliation (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
|
|
|
$
|
28.1
|
|
|
|
$
|
(15.8
|
)
|
|
|
$
|
49.1
|
|
Interest expense
|
|
|
|
|
8.1
|
|
|
|
6.6
|
|
|
|
7.5
|
|
Depreciation and amortization
|
|
|
|
|
18.6
|
|
|
|
15.6
|
|
|
|
19.9
|
|
Income tax benefit
|
|
|
|
|
(12.9
|
)
|
|
|
(12.9
|
)
|
|
|
36.0
|
|
EBITDA
|
|
|
|
|
$
|
41.9
|
|
|
|
$
|
(6.6
|
)
|
|
|
$
|
112.4
|
|
|
|
(1) The Company believes that the presentation of EBITDA
is useful to 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 3 - Adjusting items
|
|
|
|
|
|
|
|
|
Three months ended
|
|
(in millions of dollars)
|
|
|
|
|
March 31,
2018
|
|
|
March 31,
2017
|
|
Free cash flow, before acquisitions, reconciliation (1)
|
|
|
|
|
|
|
|
|
|
Net cash used in operating activities
|
|
|
|
|
$
|
(19.3
|
)
|
|
|
$
|
(15.0
|
)
|
|
Capital expenditures for property and equipment
|
|
|
|
|
(5.1
|
)
|
|
|
(3.5
|
)
|
|
Proceeds from sale of property and equipment
|
|
|
|
|
5.1
|
|
|
|
—
|
|
|
Free cash flow, before acquisitions
|
|
|
|
|
$
|
(19.3
|
)
|
|
|
$
|
(18.5
|
)
|
|
|
|
(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)
|
|
|
|
|
|
March 31,
2018
|
|
|
March 31,
2017
|
|
|
December 31,
2017
|
|
Revenue:
|
|
|
|
|
|
$
|
|
%
|
|
|
$
|
|
%
|
|
|
$
|
|
%
|
|
Drilling Technologies
|
|
|
|
|
|
$
|
42.8
|
|
|
17.1
|
%
|
|
|
$
|
45.1
|
|
|
26.4
|
%
|
|
|
$
|
38.5
|
|
|
15.5
|
%
|
|
Subsea Technologies
|
|
|
|
|
|
9.5
|
|
|
3.8
|
%
|
|
|
16.8
|
|
|
9.8
|
%
|
|
|
15.6
|
|
|
6.3
|
%
|
|
Drilling & Subsea
|
|
|
|
|
|
52.3
|
|
|
20.9
|
%
|
|
|
61.9
|
|
|
36.2
|
%
|
|
|
54.1
|
|
|
21.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Downhole Technologies
|
|
|
|
|
|
24.5
|
|
|
9.8
|
%
|
|
|
16.6
|
|
|
9.7
|
%
|
|
|
22.3
|
|
|
9.0
|
%
|
|
Stimulation and Intervention
|
|
|
|
|
|
51.0
|
|
|
20.4
|
%
|
|
|
25.8
|
|
|
15.1
|
%
|
|
|
45.5
|
|
|
18.4
|
%
|
|
Coiled Tubing
|
|
|
|
|
|
37.0
|
|
|
14.8
|
%
|
|
|
—
|
|
|
—
|
%
|
|
|
35.5
|
|
|
14.3
|
%
|
|
Completions
|
|
|
|
|
|
112.5
|
|
|
45.0
|
%
|
|
|
42.4
|
|
|
24.8
|
%
|
|
|
103.3
|
|
|
41.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production Equipment
|
|
|
|
|
|
31.5
|
|
|
12.6
|
%
|
|
|
24.7
|
|
|
14.4
|
%
|
|
|
35.0
|
|
|
14.1
|
%
|
|
Valve Solutions
|
|
|
|
|
|
54.9
|
|
|
21.9
|
%
|
|
|
42.9
|
|
|
25.1
|
%
|
|
|
56.6
|
|
|
22.9
|
%
|
|
Production & Infrastructure
|
|
|
|
|
|
86.4
|
|
|
34.5
|
%
|
|
|
67.6
|
|
|
39.5
|
%
|
|
|
91.6
|
|
|
37.0
|
%
|
|
Eliminations
|
|
|
|
|
|
(1.0
|
)
|
|
(0.4
|
)%
|
|
|
(0.8
|
)
|
|
(0.5
|
)%
|
|
|
(1.3
|
)
|
|
(0.5
|
)%
|
|
Total Revenue
|
|
|
|
|
|
$
|
250.2
|
|
|
100.0
|
%
|
|
|
$
|
171.1
|
|
|
100.0
|
%
|
|
|
$
|
247.7
|
|
|
100.0
|
%
|
|
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20180430006593/en/
Copyright Business Wire 2018
