Q1 2024 Forum Energy Technologies Inc Earnings Call Transcript
Key Points
- Forum Energy Technologies Inc (FET) reported a 9% sequential revenue growth and a 69% increase in EBITDA, with EBITDA margins improving by 460 basis points.
- The Variperm acquisition has been successfully integrated, enhancing FET's Artificial Lift and Downhole offerings and broadening the customer base in Canada.
- FET achieved a book-to-bill ratio of 101%, indicating healthy order intake relative to revenue.
- The company reaffirmed its full-year 2024 guidance with EBITDA of $100 million to $120 million and free cash flow of $40 million to $60 million.
- FET's innovation and new product development, such as the greaseless wireline cable system and FASTConnect manifold system, are laying the foundation for sustainable and profitable growth.
- Despite overall growth, the global rig count remained flat, with some seasonal softness in international markets as customers were slow to release budgets.
- Variperm's first quarter results were softer than the historical revenue run rate due to near-term headwinds, including uncertainty around the Trans Mountain Express Pipeline startup.
- The Drilling and Completions segment revenue decreased by 6% due to the completion of two ROV projects and lower demand for drilling capital equipment and international coiled tubing sales.
- The second quarter Canadian breakup, a seasonal impact, is expected to decrease Canadian rig count activity by around 50% from the first to second quarter, potentially impacting results.
- While Variperm's integration has been successful, achieving revenue synergies through collaboration between FET's traditional Downhole product line and Variperm will require further effort and time.
Good morning, ladies and gentlemen, and welcome to the Forum Energy Technologies First Quarter 2024 Earnings Conference Call. My name is Gigi, and I'll be your coordinator for today's call. (Operator Instructions) This conference call is being recorded for replay purposes and will be available on the company's website. I will now turn the conference over to Rob Kukla, Director of Investor Relations. Please proceed, sir.
Thank you, Gigi. Good morning, and welcome to FET's first quarter 2024 earnings conference call. With me today are Neal Lux, our President and Chief Executive Officer; and Lyle Williams, our Chief Financial Officer. Yesterday, we issued our earnings release, and it is available on our website. Please note that we are relying on the safe harbor protections afforded by federal law. Listeners are cautioned that our remarks today may contain information other than historical information.
These remarks should be considered in the context of all factors that affect our business,
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