Q2 2024 Forum Energy Technologies Inc Earnings Call Transcript
Key Points
- Forum Energy Technologies Inc (FET) reported strong free cash flow results, converting EBITDA into cash faster than planned, leading to an increase in full-year 2024 free cash flow guidance.
- The company is in the process of redeeming more than half of its 2025 notes, with plans to retire the balance by the end of the year, significantly improving its balance sheet.
- FET's international market penetration strategy is yielding results, with international sales accounting for 50% of total revenue in the second quarter.
- The Variperm acquisition has positively impacted financial results, contributing to a 50% year-over-year increase in EBITDA despite challenging market conditions.
- The company is seeing growth opportunities in the power generation sector with its JumboTron XL heat transfer unit, expanding its addressable market.
- FET experienced softer than expected US activity, with a decline in US rig count and hydraulic fracturing activity due to weak natural gas prices and E&P consolidation.
- The company reduced the top end of its 2024 EBITDA guidance by $10 million due to a revised market outlook.
- The Drilling and Completions segment saw a 2% revenue decrease, primarily due to lower sales of ROVs, cable management systems, and treating iron.
- Orders for drilling and stimulation-related capital equipment were lower during the quarter, impacting the company's order book.
- The US market is expected to remain soft, with a 15% decrease in rig count anticipated for the year, compared to an initial expectation of a 5% decrease.
Good morning, ladies and gentlemen, and welcome to the Forum Energy Technologies second quarter 2024 earnings conference call.
My name is Gigi, and I'll be your coordinator for today's call. (Operator Instructions) At this time, all participants are in a listen-only mode. And all lines have been placed on mute to prevent any background noise. This conference call is being recorded for replay purposes and will be available on the companyâs website.
I will now turn the conference over to Rob Kukla, Director of Investor Relations. Please proceed, sir.
Thank you, Gigi. Good morning, everyone, and welcome to FET's second 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 protection afforded by federal law. Listeners are cautioned that
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