On August 2, 2024, Forum Energy Technologies Inc (FET, Financial) released its 8-K filing for the second quarter of 2024. The company reported revenue of $205 million, an 11% year-over-year increase but below the analyst estimate of $229.90 million. The net loss for the quarter was $7 million, or $0.54 per diluted share, missing the estimated earnings per share (EPS) of $0.42.
Forum Energy Technologies Inc is a products company serving the oil, natural gas, industrial, and renewable energy industries. The company designs, manufactures, and distributes products and engages in aftermarket parts supply and services that complement its product offering. Its products include engineered capital equipment, as well as products consumed in the drilling, well construction, production, and transportation of oil and natural gas. It operates in three reporting segments: drilling and downhole, completions, and production, with the drilling and downhole segment being the key revenue generator.
Performance and Challenges
Despite a 1% sequential increase in revenue, Forum Energy Technologies Inc faced a 5% decline in global rig count. Orders declined 12% sequentially to $180 million, with a book-to-bill ratio of 88%. The company reported an adjusted net loss of $1 million, or $0.07 per diluted share, compared to the first quarter 2024 adjusted net loss of $0.12 per diluted share.
Neal Lux, President and Chief Executive Officer, commented, “Revenue and adjusted EBITDA both came within our guidance range, and adjusted EBITDA margins held steady at approximately 13%. We delivered robust free cash in the quarter of $21 million and announced the redemption and repurchase of $73 million of our 2025 Notes. Following our strong first half results, we are raising our full year 2024 free cash flow guidance to between $50 and $70 million.”
Financial Achievements
Forum Energy Technologies Inc achieved an adjusted EBITDA of $26 million, up 48% year-over-year. Operating cash flow and free cash flow were $23 million and $21 million, respectively. The company raised its 2024 full-year free cash flow guidance to $50 to $70 million, reflecting its commitment to improving financial stability and liquidity.
Income Statement Highlights
| Metric | Q2 2024 | Q1 2024 | Q2 2023 |
|---|---|---|---|
| Revenue | $205.2 million | $202.4 million | $185.4 million |
| Net Loss | $(7.0) million | $(10.3) million | $(6.6) million |
| Adjusted Net Loss | $(1.0) million | $(1.5) million | $(0.5) million |
| Adjusted EBITDA | $26.0 million | $15.8 million | $17.4 million |
Balance Sheet and Cash Flow
As of June 30, 2024, Forum Energy Technologies Inc reported total assets of $976.8 million, up from $821.1 million at the end of 2023. The company’s cash and cash equivalents stood at $31.8 million, down from $46.2 million at the end of 2023. The total liabilities increased to $534.8 million from $408.4 million, primarily due to an increase in long-term debt.
Segment Performance
The Drilling and Completions segment reported revenue of $117 million, a 2% decrease from the previous quarter, primarily due to lower sales volumes of ROVs, cable management systems, and treating iron. The Artificial Lift and Downhole segment saw a 6% increase in revenue to $88 million, driven by higher sales of valve products.
Analysis and Outlook
Forum Energy Technologies Inc's performance in Q2 2024 highlights both achievements and challenges. The company managed to increase its revenue year-over-year and improve its adjusted EBITDA significantly. However, the decline in global rig count and lower-than-expected orders pose challenges. The company's strategic focus on international markets and the Variperm acquisition are expected to mitigate some of these challenges.
For more detailed financial information, visit the 8-K filing.
Explore the complete 8-K earnings release (here) from Forum Energy Technologies Inc for further details.
