Forum Energy (FET) Conference June 11, 2025 10:00 AM ET Speaker0 Morning, everyone, and welcome to Sidoti Small Cap Virtual Conference. I'm Steve Ferrizani, an analyst at Sidoti. So pleased to be joined this morning by CEO Neil Lux of Forum Energy Technologies. The ticker is FET. We launched coverage just a month ago. If you haven't seen the report, please reach out to your sales institutional sales rep. Otherwise, it's on our website. You can find it on Bloomberg or fax that we did initiate with a $24 pric ...

SIDOTI SMALL CAP VIRTUAL CONFERENCE JUNE 11, 2025 Forward Looking Statements and Non-GAAP Reconciliation The statements made during this presentation, including the answers to your questions, may include information that the Company believes to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act. Forward-looking statements involve risk and uncertainties that may cause actual results or events to differ materially from those expressed or implied in such statements ...

Summary of FET Conference Call Company Overview - FET provides technological solutions to the oil, natural gas, industrial, and renewable energy industries, focusing on operational efficiency and environmental impact reduction [3][4][5] - The company operates in two segments: drilling and completions, and artificial lift and downhole [3] Macro Outlook - Current oil price outlook is uncertain due to global demand growth and OPEC supply adjustments, leading to potential curbing of activity by oil producers [4][6] - Customers are adapting to economic uncertainty, with expectations of stable drilling and completions activity in Q2 2025 [6][7] - Historical trends indicate that declining oil prices lead to reduced rig activity within three to six months [6][7] - If oil prices remain low, rig counts are expected to decrease in the latter half of the year, impacting EBITDA, projected at around $85 million for 2025 [7][8] Industry Dynamics - Natural gas prices remain strong, with a significant portion of drilling activity directed towards gas [13][15] - Increased gas-directed drilling could positively impact FET's business, as the company is agnostic to whether customers are drilling for oil or gas [15][16] - Tariff impacts are significant, particularly in the valve solutions product line, leading to price increases and potential buyer strikes [18][19][20] Strategic Positioning - FET's "beat the market" strategy aims to outperform market trends through innovation and market share growth [24][26] - The company has a strong market share in leadership markets (30-40%) and is expanding in growth markets [26][28] - Revenue per rig has grown at a 5% compound annual growth rate over the past five years, indicating effective market share gains [29][75] Financial Performance - FET's revenue per rig was approximately $455,000 in Q1 2025, reflecting a positive trend in market share [74][75] - The company expects to generate free cash flow between $40 million and $60 million in 2025, despite potential lower EBITDA [70][71] - FET has a share repurchase plan in place, allocating 50% of free cash flow towards debt reduction and strategic investments [80][82] Future Opportunities - The company is exploring opportunities in adjacent markets such as defense and offshore wind, which are expected to be margin accretive [64][66] - Demand for FET's products is anticipated to grow due to the increasing complexity of drilling operations and the need for higher pressure equipment [48][49] - The Middle East and Argentina are key markets for FET, with significant growth potential in unconventional oil and gas production [52][54] Conclusion - FET is well-positioned to navigate current market challenges while capitalizing on long-term growth opportunities through its strategic initiatives and innovative product offerings [96][97][98]

Stonegate Capital Partners Updates Coverage on Forum Energy Technologies, Inc. (FET) Q1 25May 05, 2025 9:44 AM EDT | Source: Reportable, Inc. Dallas, Texas--(Newsfile Corp. - May 5, 2025) - Forum Energy Technologies, Inc. (NYSE: FET) Stonegate Capital Partners updates their coverage on Forum Energy Technologies, Inc. (NYSE: FET). FET reported revenue, adj EBITDA, and adj net income of $193.3M, $20.1M, and $0.5M, respectively. This compares to our/consensus estimates of $196.3M/$196.5M, $22.9M/ ...

Revenue Performance - For the three months ended March 31, 2025, total revenue was $193.3 million, a decrease of $9.1 million, or 4.5%, compared to the same period in 2024[98]. - The Drilling and Completions segment generated revenue of $115.6 million, down $3.5 million, or 2.9%, primarily due to a 12.0% decrease in the Drilling product line[98]. - The Artificial Lift and Downhole segment reported revenue of $77.8 million, a decrease of $5.5 million, or 6.7%, with a notable 8.8% decline in the Downhole product line[99]. Market Conditions - The global drilling rig count decreased by 5.0% in Q1 2025 compared to Q1 2024, driven by a 5.6% decline in the U.S. rig count[92]. - Average oil prices for WTI were $71.78 per barrel in Q1 2025, compared to $77.50 in Q1 2024, while average natural gas prices at Henry Hub increased to $4.14 per Mcf from $2.15[93]. Operating Income - The company’s operating income for Q1 2025 was $8.8 million, a significant increase of 175.1% compared to $3.2 million in Q1 2024[97]. - Segment operating income for Drilling and Completions rose to $9.4 million, with an operating margin of 8.1%, up from 3.8% in the previous year[97]. - Segment operating income for the three months ended March 31, 2025, was $9.0 million, a slight decrease from $9.1 million in the same period of 2024, with an operating margin percentage of 4.6% compared to 4.5%[100]. - The Drilling and Completions segment reported an operating income of $9.4 million, or 8.1%, for the three months ended March 31, 2025, up from $4.6 million, or 3.8%, in the prior year, attributed to reduced amortization expenses[100]. - The Artificial Lift and Downhole segment's operating income decreased to $7.3 million, or 9.4%, for the three months ended March 31, 2025, down from $11.8 million, or 14.1%, due to an unfavorable product mix[101]. Cash Flow and Investments - Net cash provided by operating activities improved to $9.3 million for the three months ended March 31, 2025, compared to $5.0 million in the same period of 2024, driven by an increase in net income adjusted for non-cash items[113]. - Net cash used in investing activities was $2.1 million for the three months ended March 31, 2025, significantly lower than $152.8 million in the prior year, which included a $150.1 million acquisition of Variperm Holdings Ltd.[114]. - Net cash used in financing activities was $21.0 million for the three months ended March 31, 2025, a shift from $151.8 million provided in the same period of 2024, primarily due to net repayments from the revolving Credit Facility[115]. Debt and Capital Expenditures - As of March 31, 2025, the company had $73.8 million in borrowings under its revolving Credit Facility and $100.0 million principal amount of 2029 Bonds outstanding[108]. - The company anticipates total capital expenditures for 2025 to be approximately $10.0 million, mainly for replacing end-of-life machinery and equipment[109]. Shareholder Returns - The board of directors approved a share repurchase program of up to $75.0 million, with $2.0 million spent to repurchase 105 thousand shares during the three months ended March 31, 2025[111]. Tax Expenses - The company recorded a tax expense of $3.8 million for the three months ended March 31, 2025, compared to $3.5 million in the same period of 2024[106]. Future Outlook - The company expects long-term energy demand to rise, with a focus on both hydrocarbons and renewable energy applications[87]. - The company plans to continue developing products aimed at reducing costs and emissions for oil and gas operators while expanding into renewable energy[87].

Forum Energy (FET) Q1 2025 Earnings Call May 02, 2025 11:00 AM ET Company Participants Rob Kukla - Director of Investor RelationsNeal Lux - President & CEOD. Lyle Williams - EVP & CFOJoshua Jayne - Managing DirectorDan Pickering - Chief Investment OfficerJeffrey Robertson - Managing DirectorDave Storms - Director of Equity Research Conference Call Participants Steve Ferazani - Senior Equity Analyst - Diversified Industrials & EnergyNone - Analyst Operator Good morning, ladies and gentlemen, and welcome to t ...

Financial Data and Key Metrics Changes - Revenue for Q1 2025 was $193 million, with EBITDA of $20 million, meeting expectations [16] - Orders increased by 6% to $201 million, resulting in a book-to-bill ratio of 104% [16] - Free cash flow generated in Q1 was $7 million, three times higher than the same quarter last year, marking the seventh consecutive quarter of positive free cash flow [21][22] Business Line Data and Key Metrics Changes - The Drilling and Completion segment saw a revenue increase of $5 million, driven by a rebound in sales of completions-related consumables and capital equipment [17] - The artificial lift and downhole segment experienced a revenue decline due to unfavorable product mix and softer demand for Veraperm products [18] - The Valve Solutions product line faced negative headwinds due to tariffs impacting demand, leading to a buyer strike and reduced orders [19] Market Data and Key Metrics Changes - Oil prices have declined significantly, hovering near four-year lows, which may lead to a reduction in global rig count in the second half of the year [8] - The company anticipates a modest 2% to 5% decline in global drilling and completions activity for the full year [13] - Despite market uncertainty, operators have not materially deviated from their plans, with expectations for flat quarter-over-quarter results in Q2 [20] Company Strategy and Development Direction - The company is focusing on mitigating tariff impacts, optimizing the supply chain, and reducing costs and inventory [9] - Plans include increasing assembly activities in Saudi Arabia and Canada to efficiently serve global markets [10] - The company aims to utilize 50% of free cash flow for debt reduction and the remaining for strategic investments, including share repurchases [24] Management's Comments on Operating Environment and Future Outlook - Management expressed concerns about the economic uncertainty due to U.S. trade policies and OPEC's supply growth, which could pressure commodity prices [7] - The company remains confident in its ability to generate free cash flow and maintain a strong balance sheet, with no debt maturities until 2028 [23] - Long-term growth potential is viewed positively, driven by increasing energy demand due to population growth and economic expansion [28] Other Important Information - The company has strategically de-risked its supply chain to minimize dependence on specific countries [11] - A focus on expense and inventory management has led to the highest level of free cash flow in nearly a decade in 2024 [12] Q&A Session Summary Question: Subsea bookings and product adoption - Management highlighted a 60% quarter-over-quarter increase in subsea bookings due to customer adoption of new products, with strong demand for remote-operated vehicles [34][35] Question: Strength in drilling completion orders - The increase in orders for stimulation-related equipment was attributed to a rebound from low purchase levels at the end of the previous year, with crews working more efficiently [36][38] Question: Share repurchases and leverage ratio - Management clarified that share repurchases were executed despite ending the quarter slightly above the 1.5 leverage ratio, with plans to continue as cash flows allow [44][45] Question: Cost reduction efforts - The company is targeting $10 million in annualized cost reductions, with some benefits expected in Q2 and more in Q3 [46][47] Question: Customer behavior regarding pricing and tariffs - Management noted that customers are currently hesitant to purchase due to high prices and tariff uncertainty, leading to a buyer strike [51][52] Question: Seasonal impacts in Canada for Veraperm - Management indicated that the challenges faced by Veraperm in Canada are temporary and linked to customer and product mix, with expectations for improvement in the second half of the year [60][61] Question: Geographical diversification benefits - The company is leveraging its geographical diversification to mitigate tariff impacts and optimize manufacturing processes [74][75]

Financial Performance - First quarter 2025 revenue was $193 million, with a net income of $1 million or $0.09 per diluted share[2] - Total revenue for the three months ended March 31, 2025, was $193.3 million, a decrease of 4.5% compared to $202.4 million for the same period in 2024[21] - The company reported a net income of $1.1 million for Q1 2025, a significant improvement from a net loss of $10.3 million in Q1 2024[27] - Operating income for the three months ended March 31, 2025, was $8.8 million, representing an operating margin of 4.6%, compared to $3.2 million and 1.6% in the same period of 2024[25] - EBITDA for Q1 2025 was $18.9 million, with an EBITDA margin of 9.8%, compared to $15.8 million and 7.8% in Q1 2024[25] Cash Flow - Free cash flow generated in Q1 2025 was $7 million, marking the seventh consecutive quarter of positive free cash flow[4] - The company maintains its full year 2025 free cash flow guidance of $40 to $60 million[5] - Free cash flow before acquisitions for Q1 2025 was $7.2 million, significantly up from $2.3 million in Q1 2024[29] - Net cash provided by operating activities was $9.3 million in Q1 2025, up from $5.0 million in Q1 2024[29] - The Company emphasizes that free cash flow before acquisitions is a critical measure for evaluating profitability and capital management[29] Segment Performance - Drilling and Completions segment revenue rose 4% to $116 million, driven by increased demand for completions equipment[7] - Artificial Lift and Downhole segment revenue decreased 13% to $78 million, primarily due to reduced demand for valve products[8] - Revenue from the Drilling and Completions segment was $115.6 million, accounting for 59.8% of total revenue in Q1 2025[32] - The Stimulation and Intervention segment generated $37.4 million in revenue, representing a 19.3% share of total revenue for Q1 2025[32] - Downhole revenue was $47.7 million, making up 24.7% of total revenue in Q1 2025[32] - The Artificial Lift and Downhole segment contributed $77.8 million, which is 40.2% of total revenue for Q1 2025[32] Orders and Book-to-Bill Ratio - Orders totaled $201 million with a book-to-bill ratio of 104%[6] - Orders for Drilling and Completions increased to $132.1 million in Q1 2025, up 13.3% from $116.6 million in Q1 2024[23] - The total book-to-bill ratio for the company was 1.04 in Q1 2025, indicating improving market demand compared to 1.01 in Q1 2024[23] - Total orders for the company were $200.7 million in Q1 2025, slightly down from $204.4 million in Q1 2024[23] Cost Management - The company is implementing actions to eliminate $10 million in annualized costs to adapt to potentially lower demand levels[3] - Adjusted EBITDA for Q1 2025 was $20 million, despite tariff uncertainties impacting results[6] - For Q2 2025, adjusted EBITDA is expected to be in the range of $18 to $22 million[5] Impairment and Capital Expenditures - The company experienced a significant impairment of intangible assets amounting to $119.1 million in Q4 2024, impacting overall financial performance[25] - Capital expenditures for property and equipment were $2.1 million in Q1 2025, compared to $2.9 million in Q1 2024[29] - The Company reported proceeds from sale-leaseback transactions of $20.3 million in Q4 2024, which positively impacted cash flow[29]

Forum Energy Technologies (FET) is set to report first-quarter earnings on May 2, before the opening bell.Let us analyze the factors that are expected to have influenced FET’s performance in the first quarter of 2025.Q1 Expectations for FETThe Zacks Consensus Estimate for Forum Energy’s earnings is pegged at 43 cents per share and that for revenues is pinned at $196.3 million. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)The Zacks Consensus Estimate for first-quarter 2025 earning ...

Company Overview - Forum Energy Technologies, Inc. (FET) is a global manufacturer serving the oil and gas, industrial, and renewable energy sectors [1] - The company operates through two main segments: Drilling and Completions, and Artificial Lift and Downhole [1] Segment Details - The Drilling and Completions segment focuses on selling capital equipment [1] - The Artificial Lift and Downhole segment is also a key area of operation for the company [1]