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Forum Energy Technologies announces financial results

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World Pipelines,

Forum Energy Technologies, Inc. has announced 2Q18 revenue of US$274 million, an increase of US$24 million, or 10%, from 1Q18. Net loss for the quarter was US$15 million, or US$0.14 per diluted share, compared to net income of US$28 million, or US$0.25 per diluted share, for 1Q18. Excluding US$14 million, or US$0.13 per share of special items, the adjusted net loss was $0.01 per diluted share in 2Q18. This adjusted net loss includes a negative impact of US$0.02 per diluted share related to certain unrecognised tax benefits.

Segment results

Completions segment revenue was US$127 million, an increase of US$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 2Q were US$121 million, an increase of US$10 million, or 9%, from 1Q. The Completions segment designs and manufactures products for the well construction, completion, stimulation and intervention markets.

Production and Infrastructure segment revenue was US$89 million, a 3% increase from 1Q18, on higher shipments of well site production equipment in the US, partially offset by slightly lower sales of valves due to scheduled deliveries in future quarters. New inbound orders in 2Q were US$99 million, a 2% increase sequentially. Orders for valves set a record for the second consecutive quarter. The Production and Infrastructure segment manufactures land well site production equipment, desalination refinery equipment, and a wide range of valves for energy, industrial and mining customers.

Drilling and Subsea segment revenue was US$60 million, an increase of US$8 million, or 15%, from 1Q18, primarily due to improved subsea revenue and higher sales of drilling consumable products and capital equipment. New inbound orders in 2Q were US$90 million, a 69% increase from 1Q18, led by orders of long anticipated subsea capital equipment and drilling equipment for the Middle East. Drilling and 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 US$310 million, a US$49 million increase, or US19% sequentially, resulting in a book to bill ratio of 113%. Revenue in the second quarter was US$274 million, up US$24 million, or 10%, from the prior quarter. Adjusted EBITDA was US$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 US$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."

Recent events

  • 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 2Q18 for over 325 000 hp of J-Mac hydraulic fracturing power ends, of which approximately 75% were for fleet maintenance rather than new capacity.
  • Subsequent to 2Q, Forum acquired certain assets of ESP Completions Technologies, which consists of a portfolio of early stage technologies that maximise the run life of artificial lift systems, primarily electric submersible pumps.


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