Forum Energy Technologies(FET)2025-05-02 19:28Revenue 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].