Full Year 2021 Highlights
- Revenue increased $29 million year-over-year to $541
million
- Orders of $632 million and a book-to-bill ratio of
1.17
- Net loss of $83 million
- Adjusted EBITDA increased $39 million to $20
million
- Acquired two new technologies complementary to our
portfolio
Forum Energy Technologies, Inc. (NYSE: FET) today announced
fourth quarter 2021 revenue of $148 million, an increase of $7
million from the third quarter 2021. Orders received in the quarter
were $160 million. Net loss for the quarter was $20 million, or
$3.46 per diluted share, compared to a net loss of $12 million, or
$2.05 per diluted share, for the third quarter 2021. Excluding $7
million, or $1.23 per share of special items, adjusted net loss was
$2.23 per diluted share in the fourth quarter 2021, compared to an
adjusted net loss of $2.25 per diluted share in the third quarter
2021. Adjusted EBITDA declined by $3.0 million sequentially to $4.2
million.
Special items in the fourth quarter 2021, on a pre-tax basis,
included $3.3 million of inventory impairments, $1.8 million of
foreign exchange losses and $1.8 million of restructuring,
transaction and other costs. See Tables 1-5 for a reconciliation of
GAAP to non-GAAP financial information.
Neal Lux, President and Chief Executive Officer, remarked, “On a
pro forma basis, our 2021 results were a remarkable turn-around
from 2020. Revenue improved by $70 million(1), supported by a
rebounding market and the introduction of innovative products and
solutions. In addition, EBITDA grew by $52 million(1), resulting in
a 72% incremental margin, which demonstrates the long-term earnings
power of our product offerings and significant cost reductions
executed in early 2021.
“As previously announced, continued growth in drilling and
completion activity supported sequential increases in revenue and
backlog. Despite higher demand for our products, on-going supply
chain delays constrained our revenues and cost inflation impacted
our profitability. EBITDA of $4 million fell short of our
expectations as higher revenues were more than offset by increases
in costs including raw material, freight and employee benefit costs
for our self-insured medical plan. In the first quarter, industry
activity and demand for our products have continued to increase.
However, supply chain and cost headwinds continue to compress our
profitability, and as a result, we currently forecast first quarter
EBITDA to be in the range of $5 to $7 million.
“While commodity prices and cash flows for E&P operators are
at multi-year highs, drilling and completions activity remains well
below pre-pandemic levels. This imbalance indicates a long-term
opportunity for incremental investment in energy production. FET's
broad portfolio of innovative and differentiated products will be
needed to meet the supply shortage over the coming years. We expect
our profitability to increase over the course of 2022 as we realize
improved pricing and mitigate supply chain challenges.”
(1) Revenue and EBITDA growth is pro forma for the December 2020
divestiture of our ABZ and Quadrant valve brands. See "Supplemental
schedule - Pro forma results for divestiture of ABZ and Quadrant
valve brands" included at the end of this release.
Segment Results
Drilling & Downhole segment revenue was $67 million, an
increase of 5% from the third quarter 2021 driven by higher demand
for our drilling consumable products and downhole casing and
cementing products. Orders were $61 million, a decrease of $23
million from the third quarter 2021 which included significant
orders in our subsea product line. Segment adjusted EBITDA was $6
million, down $3 million from the third quarter, resulting
primarily from inflation in raw material and freight costs which
outpaced the increase in revenue. Drilling & Downhole
operations focus primarily on capital equipment and consumable
products for global well construction, artificial lift and subsea
markets.
Completions segment revenue was $51 million, a sequential
increase of $1 million, or 3%, due to higher demand for equipment
from our pressure pumping service customers in the fourth quarter.
Orders in the fourth quarter were $53 million, a decrease of $7
million, or 11%, from the third quarter 2020 which included
significant orders for new product offerings in our Stimulation and
Intervention product line. Segment adjusted EBITDA was $5 million,
in line with third quarter results as higher revenues were offset
by cost inflation. The Completions segment designs and manufactures
products for the coiled tubing, wireline and stimulation
markets.
Production segment revenue was $31 million, an increase of $2
million, or 8%, from the third quarter primarily due to higher
valve demand from our customers in the downstream market. Orders in
the fourth quarter were $46 million, an increase of $13 million, or
41%, from the third quarter due to significant orders for well-site
production equipment for deliveries throughout 2022. Segment
adjusted EBITDA was negative $2 million, in line with third quarter
results as higher revenues were offset by increases in material and
freight costs. The Production segment manufactures land well site
production equipment, desalination process equipment, and a wide
range of valves for upstream, midstream and process industry
customers.
FET (Forum Energy Technologies) is a global company, serving the
crude oil, natural gas, and renewable energy industries. FET
provides value added solutions that increase the safety and
efficiency of energy exploration and production. We are an
environmentally and socially responsible company headquartered in
Houston, TX with manufacturing, distribution, and service
facilities strategically located throughout the world. 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 severity and duration of the COVID-19
pandemic and related repercussions resulting from the negative
impact on demand for oil and natural gas, 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 loss
(Unaudited)
Three months ended
December 31,
September 30,
(in millions, except per share
information)
2021
2020
2021
Revenue
$
148.1
$
113.0
$
141.0
Cost of sales
118.0
172.1
106.1
Gross profit
30.1
(59.1
)
34.9
Operating expenses
Selling, general and administrative
expenses
42.9
43.2
42.3
Loss on disposal of assets and other
0.3
1.8
—
Total operating expenses
43.2
45.0
42.3
Operating loss
(13.1
)
(104.1
)
(7.4
)
Other expense (income)
Interest expense
7.9
8.7
7.1
Foreign exchange losses (gains) and other,
net
1.7
7.4
(4.0
)
Gain on disposition of business
—
(88.4
)
—
Loss on extinguishment of debt
—
—
0.2
Total other (income) expense, net
9.6
(72.3
)
3.3
Loss before income taxes
(22.7
)
(31.8
)
(10.7
)
Income tax expense (benefit)
(3.1
)
0.9
0.9
Net loss (1)
$
(19.6
)
$
(32.7
)
$
(11.6
)
Weighted average shares
outstanding
Basic
5.7
5.6
5.7
Diluted
5.7
5.6
5.7
Loss per share
Basic
$
(3.46
)
$
(5.85
)
$
(2.05
)
Diluted
$
(3.46
)
$
(5.85
)
$
(2.05
)
(1) Refer to Table 1 for schedule of
adjusting items.
Forum Energy Technologies,
Inc.
Condensed consolidated
statements of net loss
(Unaudited)
Year ended
December 31,
(in millions, except per share
information)
2021
2020
Revenue
$
541.1
$
512.5
Cost of sales
417.8
523.5
Gross profit
123.3
(11.0
)
Operating expenses
Selling, general and administrative
expenses
168.9
197.7
Impairments of intangible assets, property
and equipment
—
20.4
Loss (gain) on disposal of assets and
other
(1.1
)
2.5
Total operating expenses
167.8
220.6
Operating loss
(44.5
)
(231.6
)
Other expense (income)
Interest expense
32.0
30.3
Loss (gain) on extinguishment of debt
5.3
(72.5
)
Deferred loan costs written off
—
2.3
Foreign exchange losses and other, net
0.2
6.5
Gain on disposition of business
—
(88.4
)
Total other (income) expense, net
37.5
(121.8
)
Loss before income taxes
(82.0
)
(109.8
)
Income tax expense (benefit)
0.7
(12.9
)
Net loss (1)
$
(82.7
)
$
(96.9
)
Weighted average shares
outstanding
Basic
5.6
5.6
Diluted
5.6
5.6
Loss per share
Basic
$
(14.65
)
$
(17.37
)
Diluted
$
(14.65
)
$
(17.37
)
(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,
2021
December 31,
2020
Assets
Current assets
Cash and cash equivalents
$
46.9
$
128.6
Accounts receivable—trade, net
123.9
80.6
Inventories, net
241.7
251.7
Other current assets
34.2
29.3
Total current assets
446.7
490.2
Property and equipment, net of accumulated
depreciation
94.0
113.7
Operating lease assets
25.4
31.5
Intangibles, net
217.4
240.4
Other long-term assets
7.8
14.1
Total assets
$
791.3
$
889.9
Liabilities and equity
Current liabilities
Current portion of long-term debt
$
0.9
$
1.3
Other current liabilities
174.8
123.6
Total current liabilities
175.7
124.9
Long-term debt, net of current portion
232.4
293.4
Other long-term liabilities
54.1
65.4
Total liabilities
462.2
483.7
Total equity
329.1
406.2
Total liabilities and equity
$
791.3
$
889.9
Forum Energy Technologies,
Inc.
Condensed consolidated cash
flow information
(Unaudited)
Year ended
December 31,
(in millions of dollars)
2021
2020
Cash flows from operating
activities
Net loss
$
(82.7
)
$
(96.9
)
Impairments of intangible assets, property
and equipment
—
20.4
Depreciation and amortization
42.2
51.0
Impairments of operating lease assets
—
15.4
Inventory write downs
8.1
100.8
Gain on disposition of business
—
(88.4
)
Loss (gain) on extinguishment of debt
5.3
(72.5
)
Other noncash items and changes in working
capital
11.3
74.1
Net cash provided by (used in)
operating activities
(15.8
)
3.9
Cash flows from investing
activities
Capital expenditures for property and
equipment
(2.4
)
(2.2
)
Proceeds from the sale of property and
equipment
7.0
5.3
Acquisition of businesses, net of cash
acquired
(3.4
)
—
Proceeds from settlement of note
receivable
10.8
—
Proceeds from sale of business and equity
investment
(1.3
)
105.2
Net cash provided by investing
activities
10.7
108.3
Cash flows from financing
activities
Borrowings of debt
—
182.3
Repayments of debt
(14.6
)
(170.4
)
Cash paid to repurchase 2025 Notes and
2021 Notes
(58.6
)
(40.3
)
Bond exchange early participation
payment
—
(3.5
)
Repurchases of stock
(1.4
)
(0.2
)
Deferred financing costs
(1.6
)
(9.7
)
Net cash used in investing
activities
(76.2
)
(41.8
)
Effect of exchange rate changes on
cash
(0.5
)
0.3
Net increase (decrease) in cash, cash
equivalents and restricted cash
$
(81.8
)
$
70.7
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,
2021
December 31,
2020
September 30,
2021
December 31,
2021
December 31,
2020
September 30,
2021
Revenue
Drilling & Downhole
$
66.5
$
49.9
$
63.2
$
66.5
$
49.9
$
63.2
Completions
51.0
30.6
49.7
51.0
30.6
49.7
Production
30.9
32.5
28.5
30.9
32.5
28.5
Eliminations
(0.3
)
—
(0.4
)
(0.3
)
—
(0.4
)
Total revenue
$
148.1
$
113.0
$
141.0
$
148.1
$
113.0
$
141.0
Operating income (loss)
Drilling & Downhole
$
2.5
$
(21.2
)
$
4.0
$
2.7
$
(3.9
)
$
5.2
Operating income margin %
3.8
%
(42.5
) %
6.3
%
4.1
%
(7.8
) %
8.2
%
Completions
(4.5
)
(50.3
)
0.3
(0.7
)
(5.6
)
(0.5
)
Operating income margin %
(8.8
) %
(164.4
) %
0.6
%
(1.4
) %
(18.3
) %
(1.0
) %
Production
(3.1
)
(24.1
)
(3.4
)
(3.0
)
(2.4
)
(3.1
)
Operating income margin %
(10.0
) %
(74.2
) %
(11.9
) %
(9.7
) %
(7.4
) %
(10.9
) %
Corporate
(7.7
)
(6.7
)
(8.4
)
(6.9
)
(5.1
)
(6.5
)
Total segment operating loss
(12.8
)
(102.3
)
(7.5
)
(7.9
)
(17.0
)
(4.9
)
Other items not in segment operating loss
(1)
(0.3
)
(1.8
)
0.1
(0.1
)
0.7
—
Total operating loss
$
(13.1
)
$
(104.1
)
$
(7.4
)
$
(8.0
)
$
(16.3
)
$
(4.9
)
Operating margin %
(8.8
) %
(92.1
) %
(5.2
) %
(5.4
) %
(14.4
) %
(3.5
) %
EBITDA (2)
Drilling & Downhole
$
4.1
$
(23.2
)
$
10.7
$
6.2
$
1.0
$
9.0
EBITDA Margin %
6.2
%
(46.5
) %
16.9
%
9.3
%
2.0
%
14.2
%
Completions
1.0
(44.4
)
6.6
4.9
0.7
5.2
EBITDA Margin %
2.0
%
(145.1
) %
13.3
%
9.6
%
2.3
%
10.5
%
Production
(2.0
)
(22.3
)
(2.5
)
(1.7
)
(0.2
)
(2.1
)
EBITDA Margin %
(6.5
) %
(68.6
) %
(8.8
) %
(5.5
) %
(0.6
) %
(7.4
) %
Corporate
(7.7
)
78.6
(8.3
)
(5.2
)
(4.1
)
(4.9
)
Total EBITDA
$
(4.6
)
$
(11.3
)
$
6.5
$
4.2
$
(2.6
)
$
7.2
EBITDA Margin %
(3.1
) %
(10.0
) %
4.6
%
2.8
%
(2.3
) %
5.1
%
(1) Includes 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 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.
(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,
2021
December 31,
2020
December 31,
2021
December 31,
2020
Revenue
Drilling & Downhole
$
239.9
$
216.8
$
239.9
$
216.8
Completions
185.0
118.7
185.0
118.7
Production
116.7
177.5
116.7
177.5
Eliminations
(0.5
)
(0.5
)
(0.5
)
(0.5
)
Total revenue
$
541.1
$
512.5
$
541.1
$
512.5
Operating income (loss)
Drilling & Downhole
$
4.7
$
(48.0
)
$
9.9
$
(19.1
)
Operating income margin %
2.0
%
(22.1
) %
4.1
%
(8.8
) %
Completions
(4.5
)
(97.3
)
(2.1
)
(34.3
)
Operating income margin %
(2.4
) %
(82.0
) %
(1.1
) %
(28.9
) %
Production
(14.4
)
(33.4
)
(12.2
)
(4.7
)
Operating income margin %
(12.3
) %
(18.8
) %
(10.5
) %
(2.6
) %
Corporate
(31.3
)
(30.0
)
(25.6
)
(23.4
)
Total segment operating loss
(45.5
)
(208.7
)
(30.0
)
(81.5
)
Other items not in segment operating loss
(1)
1.0
(22.9
)
—
1.5
Total operating loss
$
(44.5
)
$
(231.6
)
$
(30.0
)
$
(80.0
)
Operating margin %
(8.2
) %
(45.2
) %
(5.5
) %
(15.6
) %
EBITDA (2)
Drilling & Downhole
$
18.4
$
(42.5
)
$
25.3
$
0.5
EBITDA Margin %
7.7
%
(19.6
) %
10.5
%
0.2
%
Completions
19.5
(82.2
)
21.0
(6.2
)
EBITDA Margin %
10.5
%
(69.3
) %
11.4
%
(5.2
) %
Production
(9.3
)
(28.6
)
(7.0
)
4.9
EBITDA Margin %
(8.0
) %
(16.1
) %
(6.0
) %
2.8
%
Corporate
(36.4
)
124.8
(19.3
)
(18.6
)
Total EBITDA
$
(7.8
)
$
(28.5
)
$
20.0
$
(19.4
)
EBITDA Margin %
(1.4
) %
(5.6
) %
3.7
%
(3.8
) %
(1) Includes impairments of intangible
assets, property and equipment 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 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.
(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,
2021
December 31,
2020
September 30,
2021
Orders
Drilling & Downhole
$
60.8
$
57.5
$
83.4
Completions
52.8
30.3
59.6
Production
46.1
36.3
32.8
Total orders
$
159.7
$
124.1
$
175.8
Revenue
Drilling & Downhole
$
66.5
$
49.9
$
63.2
Completions
51.0
30.6
49.7
Production
30.9
32.5
28.5
Eliminations
(0.3
)
—
(0.4
)
Total revenue
$
148.1
$
113.0
$
141.0
Book to bill ratio (1)
Drilling & Downhole
0.91
1.15
1.32
Completions
1.04
0.99
1.20
Production
1.49
1.12
1.15
Total book to bill ratio
1.08
1.10
1.25
(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.
Forum Energy Technologies,
Inc.
Reconciliation of GAAP to
non-GAAP financial information
(Unaudited)
Table 1 - Adjusting
items
Three months ended
December 31, 2021
December 31, 2020
September 30, 2021
(in millions, except per share
information)
Operating loss
EBITDA (1)
Net loss
Operating income
(loss)
EBITDA (1)
Net income (loss)
Operating loss
EBITDA (1)
Net loss
As reported
(13.1
)
(4.6
)
(19.6
)
(104.1
)
(11.3
)
(32.7
)
$
(7.4
)
$
6.5
$
(11.6
)
% of revenue
(8.8
) %
(3.1
) %
(92.1
) %
(10.0
) %
(5.2
) %
4.6
%
Restructuring, transaction and other
costs
1.8
1.8
1.8
8.4
8.4
8.4
2.5
2.5
2.5
Inventory and other working capital
adjustments
3.3
3.3
3.3
78.2
78.2
78.2
—
—
—
Impairments of operating lease assets
—
—
—
1.2
1.2
1.2
—
—
—
Gain on disposition of business
—
—
—
—
(88.4
)
(88.4
)
—
—
—
Loss on extinguishment of debt
—
—
—
—
—
—
—
0.2
0.2
Stock-based compensation expense
—
1.9
—
—
2.1
—
—
1.9
—
Loss (gain) on foreign exchange, net
(2)
—
1.8
1.8
—
7.2
7.2
—
(3.9
)
(3.9
)
Income tax expense (benefit) of
adjustments
—
—
—
—
—
(0.8
)
—
—
—
As adjusted (1)
$
(8.0
)
$
4.2
$
(12.7
)
$
(16.3
)
$
(2.6
)
$
(26.9
)
$
(4.9
)
$
7.2
$
(12.8
)
% of revenue
(5.4
) %
2.8
%
(14.4
) %
(2.3
) %
(3.5
) %
5.1
%
Diluted shares outstanding as reported
5.7
5.6
5.7
Diluted shares outstanding as adjusted
5.7
5.6
5.7
Diluted EPS - as reported
$
(3.46
)
$
(5.85
)
$
(2.05
)
Diluted EPS - as adjusted
$
(2.23
)
$
(4.80
)
$
(2.25
)
(1) The Company believes that the
presentation of EBITDA, adjusted EBITDA, adjusted operating income,
adjusted net income 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 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, 2021
December 31, 2020
(in millions, except per share
information)
Operating loss
EBITDA (1)
Net loss
Operating income
(loss)
EBITDA (1)
Net loss
As reported
$
(44.5
)
$
(7.8
)
$
(82.7
)
$
(231.6
)
$
(28.5
)
$
(96.9
)
% of revenue
(8.2
) %
(1.4
) %
(45.2
) %
(5.6
) %
Restructuring, transaction and other
costs
9.5
9.5
9.5
22.0
22.0
22.0
Inventory and other working capital
adjustments
5.0
5.0
5.0
93.8
93.8
93.8
Impairments of intangible assets, property
and equipment
—
—
—
20.4
20.4
20.4
Impairments of operating lease assets
—
—
—
15.4
15.4
15.4
Gain on disposition of business
—
—
—
—
(88.4
)
(88.4
)
Loss on extinguishment of debt
—
5.3
5.3
—
(72.5
)
(72.5
)
Deferred loan costs written off
—
—
—
—
2.3
2.3
Stock-based compensation expense
—
7.6
—
—
9.8
—
Loss on foreign exchange, net (2)
—
0.4
0.4
—
6.3
6.3
Impact of U.S. CARES Act
—
—
—
—
—
(16.6
)
Income tax expense (benefit) of
adjustments
—
—
—
—
—
(0.8
)
As adjusted (1)
$
(30.0
)
$
20.0
$
(62.5
)
$
(80.0
)
$
(19.4
)
$
(115.0
)
% of revenue
(5.5
) %
3.7
%
(15.6
) %
(3.8
) %
Diluted shares outstanding as reported
5.6
5.6
Diluted shares outstanding as adjusted
5.6
5.6
Diluted EPS - as reported
$
(14.65
)
$
(17.37
)
Diluted EPS - as adjusted
$
(11.16
)
$
(20.54
)
(1) The Company believes that the
presentation of EBITDA, adjusted EBITDA, adjusted operating income,
adjusted net income 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 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,
2021
December 31,
2020
September 30,
2021
EBITDA reconciliation (1)
Net loss
$
(19.6
)
$
(32.7
)
$
(11.6
)
Interest expense
7.9
8.7
7.1
Depreciation and amortization
10.2
11.8
10.1
Income tax expense
(3.1
)
0.9
0.9
EBITDA
$
(4.6
)
$
(11.3
)
$
6.5
(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.
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,
2021
December 31,
2020
EBITDA reconciliation (1)
Net loss
$
(82.7
)
$
(96.9
)
Interest expense
32.0
30.3
Depreciation and amortization
42.2
51.0
Income tax benefit
0.7
(12.9
)
EBITDA
$
(7.8
)
$
(28.5
)
(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 5 - Adjusting
items
Year ended
(in millions of dollars)
December 31,
2021
December 31,
2020
Free cash flow, before acquisitions,
reconciliation (1)
Net cash provided by operating
activities
$
(15.8
)
$
3.9
Capital expenditures for property and
equipment
(1.8
)
(2.2
)
Proceeds from sale of property and
equipment
7.0
5.3
Free cash flow, before acquisitions
$
(10.6
)
$
7.0
(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,
2021
December 31,
2020
September 30,
2021
Revenue:
$
%
$
%
$
%
Drilling Technologies
$
27.3
18.5
%
$
23.2
20.6
%
$
23.3
16.5
%
Downhole Technologies
19.9
13.4
%
13.1
11.6
%
17.6
12.5
%
Subsea Technologies
19.3
13.0
%
13.6
12.0
%
22.3
15.8
%
Drilling & Downhole
66.5
44.9
%
49.9
44.2
%
63.2
44.8
%
Stimulation and Intervention
28.1
18.9
%
14.0
12.4
%
25.6
18.1
%
Coiled Tubing
22.9
15.5
%
16.6
14.7
%
24.1
17.1
%
Completions
51.0
34.4
%
30.6
27.1
%
49.7
35.2
%
Production Equipment
14.9
10.1
%
12.1
10.7
%
14.3
10.1
%
Valve Solutions
16.0
10.8
%
20.4
18.1
%
14.2
10.1
%
Production
30.9
20.9
%
32.5
28.8
%
28.5
20.2
%
Eliminations
(0.3
)
(0.2
) %
—
(0.1
) %
(0.4
)
(0.2
) %
Total Revenue
$
148.1
100.0
%
$
113.0
100.0
%
$
141.0
100.0
%
Forum Energy Technologies,
Inc.
Supplemental schedule - Pro
forma results for divestiture of ABZ and Quadrant valve
brands
(Unaudited)
Year ended December
31,
(in millions of dollars)
2021
2020 (1)
Revenue
Valves
$
55.7
$
70.2
Production
116.7
135.9
Total FET
541.1
470.9
Adjusted EBITDA
Production
$
(7.0
)
$
(7.2
)
Total FET
20.0
(31.5
)
(1) For comparability purposes, the year
ended December 31, 2020 has been adjusted to demonstrate pro forma
results excluding the disposition of our ABZ and Quadrant valve
brands.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220228005926/en/
Lyle Williams Executive Vice President and Chief Financial
Officer 713.351.7920 lyle.williams@f-e-t.com
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