Forum Energy Technologies Announces Second Quarter 2018 Results
HOUSTON--(BUSINESS WIRE)--Jul 30, 2018--Forum Energy Technologies, Inc. (NYSE: FET) today announced second quarter 2018 revenue of $274 million, an increase of $24 million, or 10%, from the first quarter 2018. Net loss for the quarter was $15 million, or $0.14 per diluted share, compared to net income of $28 million, or $0.25 per diluted share, for the first quarter 2018. Excluding $14 million, or $0.13 per share of special items, the adjusted net loss was $0.01 per diluted share in the second quarter of 2018. This adjusted net loss includes a negative impact of $0.02 per diluted share related to certain unrecognized tax benefits. See Tables 1-5 for a reconciliation of GAAP to non-GAAP financial information.
Completions segment revenue was $127 million, an increase of $14 million, or 13%, sequentially, due to higher completions activity in North America driving increased customer spending on pressure pumping equipment, coiled tubing and downhole completion products. New inbound orders in the second quarter were $121 million, an increase of $10 million, or 9%, from the first quarter. The Completions segment designs and manufactures products for the well construction, completion, stimulation and intervention markets.
Production & Infrastructure segment revenue was $89 million, a 3% increase from the first quarter 2018, on higher shipments of well site production equipment in the U.S., partially offset by slightly lower sales of valves due to scheduled deliveries in future quarters. New inbound orders in the second quarter were $99 million, a 2% increase sequentially. Orders for valves set a record for the second consecutive quarter. The Production & Infrastructure segment manufactures 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 $60 million, an increase of $8 million, or 15%, from the first quarter 2018, primarily due to improved subsea revenue and higher sales of drilling consumable products and capital equipment. New inbound orders in the second quarter were $90 million, a 69% increase from the first quarter 2018, led by orders of long anticipated subsea capital equipment and drilling equipment for the Middle East. 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, “Forum had a solid second quarter with sequential growth in orders, revenue, EBITDA and margins. New orders received by Forum in the second quarter were $310 million, a $49 million increase, or 19% sequentially, resulting in a book to bill ratio of 113%. Revenue in the second quarter was $274 million, up $24 million, or 10%, from the prior quarter. Adjusted EBITDA was $27 million, an increase of 43% over the first quarter. We are also pleased with the sequential improvement of our adjusted EBITDA margins which were up 240 basis points.
“Our financial liquidity remains strong. We ended the quarter with approximately $258 million of total liquidity.
“The global energy macro environment is strengthening, despite the short term Permian basin headwinds. Our balanced portfolio of consumable and capital equipment serving global markets across the well cycle, positions us nicely to achieve continued growth. We have been benefiting from the growth in North America onshore drilling and completions activity and we are now receiving significant international orders as the broader recovery begins to unfold.”
Forum was awarded a contract from Submarine Manufacturing and Products, Ltd. to supply a submarine rescue vehicle, plus a work-class remotely operated vehicle, and associated launch and recovery systems.
Forum has begun to receive significant orders in the Middle East, including land drilling rig equipment and offshore coiled line pipe.
Forum received orders in the second quarter of 2018 for over 325,000 horsepower of J-Mac hydraulic fracturing power ends, of which approximately 75% were for fleet maintenance rather than new capacity.
Subsequent to the second quarter, Forum acquired certain assets of ESP Completions Technologies, which consists of a portfolio of early stage technologies that maximize the run life of artificial lift systems, primarily electric submersible pumps.
Conference Call Information
Forum’s conference call is scheduled for Tuesday, July 31, 2018 at 9:00 AM CDT. During the call, the Company intends to discuss second 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 2869415. 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 2869415.
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 .
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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