Forum energy technologies announces third quarter 2018 results
Houston--(business wire)--forum energy technologies, inc. (nyse: fet) today announced third quarter 2018 revenue of $267 million, a decrease of $7 million, or 3%, from the second quarter 2018. net loss for the quarter was $3 million, or $0.03 per diluted share, compared to net loss of $15 million, or $0.14 per diluted share, for the second quarter 2018. excluding $6 million, or $0.06 per share of special items, adjusted net income was $0.03 per diluted share in the third quarter of 2018. see tables 1-5 for a reconciliation of gaap to non-gaap financial information. segment results completions segment revenue was $119 million, a decrease of $8 million, or 6% sequentially, primarily due to lower completions activity in north america. new inbound orders in the third quarter were $115 million, a decrease of $7 million, or 5%, from the second quarter. the completions segment designs and manufactures products for the well construction, completion, stimulation and intervention markets. production & infrastructure segment revenue was $95 million, an 8% increase from the second quarter 2018, on higher sales of valves and well site production equipment, primarily in the u.s. new inbound orders in the third quarter were $100 million, a 1% increase sequentially. the production & infrastructure segment manufactures land well site production equipment, desalination refinery equipment, and a wide range of valves for energy, industrial and mining customers. drilling & subsea segment revenue was $55 million, a decrease of $5 million, or 9%, from the second quarter 2018. new inbound orders in the third quarter were $60 million, a 33% decrease from the second quarter due to the large subsea capital equipment order received last quarter, partially offset by an 11% increase in orders in our drilling product line. drilling & 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 was on a strong growth trajectory until the third quarter when we were negatively impacted by the slowdown in u.s. completions activity. despite these challenges, our team executed well during the quarter, as revenue was down only 3% and adjusted ebitda increased sequentially. "although we are experiencing near term headwinds from the completions slowdown and tariffs, the long term market fundamentals for our product lines remain intact. we have benefited from the growth in north america onshore drilling and completions activity over the last several quarters, and we are now tendering for significant international orders as the broader recovery begins to unfold. our balanced portfolio of consumable and capital equipment serving global markets across the well cycle positions us nicely to achieve continued long term growth. "our free cash flow was negative $4 million, a sequential improvement of $8 million. we ended the quarter with approximately $246 million of total liquidity. i am confident that we will deliver positive free cash flow in the fourth quarter and for the second half of the year." recent events forum received orders in the third quarter of 2018 for approximately 275,000 horsepower of j-mac hydraulic fracturing power ends. forum received a $12 million order for well site production equipment for the marcellus basin. subsequent to the third quarter, forum acquired global heat transfer ("ght") for $52 million in cash consideration and an earn-out arrangement under which additional cash consideration will be paid if certain conditions are met in 2019 and 2020. ght engineers and manufactures premium industrial heat exchanger and cooling systems used primarily on hydraulic fracturing equipment as well as applications in other industries. conference call information forum's conference call is scheduled for tuesday, october 30, 2018 at 9:00 am cdt. during the call, the company intends to discuss third quarter 2018 results. to participate in the earnings conference call, please call 855-757-8876 within north america, or 631-485-4851 outside of north america. the access code is 3348489. the call will also be broadcast through the investor relations link on forum’s website at www.f-e-t.com. participants are encouraged to log in to the webcast or dial in to the conference call approximately ten minutes prior to the start time. a replay of the call will be available for two weeks after the call and may be accessed by dialing 855-859-2056 within north america, or 404-537-3406 outside of north america. the access code is 3348489. forum energy technologies is a global oilfield products company, serving the drilling, subsea, completions, production and infrastructure sectors of the oil and natural gas industry. the company’s products include highly engineered capital equipment as well as products that are consumed in the drilling, well construction, production and transportation of oil and natural gas. forum is headquartered in houston, tx with manufacturing and distribution facilities strategically located around the globe. 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 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 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 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. operating income (loss) net income (loss) operating income (loss) net income (loss) operating income (loss) net income (loss) (1) the company believes that the presentation of ebitda, adjusted ebitda, adjusted operating income and adjusted diluted eps is useful to investors because (i) 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 and (ii) each of adjusted ebitda, adjusted operating income and adjusted diluted eps is 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. 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. (2) the difference between the fair value of our interest in ashtead and the book value of the underlying net assets resulted in a basis difference non-operating gain, which was allocated to fixed assets, intangible assets and goodwill based on their respective fair values as of the transaction date. this amount represents the amortization of the basis difference gain associated with intangible assets and property, plant and equipment which is included in equity earnings (loss) over the estimated life of the respective assets. (3) 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. operatingincome(loss) net income(loss) operatingincome(loss) net income(loss) ) (1) the company believes that the presentation of ebitda, adjusted ebitda, adjusted operating income and adjusted diluted eps is useful to the company's investors because (i) 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 and (ii) each of adjusted ebitda, adjusted operating income and adjusted diluted eps is 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. 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. (2) the difference between the fair value of our interest in ashtead and the book value of the underlying net assets resulted in a basis difference non-operating gain, which was allocated to fixed assets, intangible assets and goodwill based on their respective fair values as of the transaction date. this amount represents the amortization of the basis difference gain associated with intangible assets and property, plant and equipment which is included in equity earnings (loss) over the estimated life of the respective assets. (3) 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. september 30, 2018 september 30, 2017
