Forum energy technologies announces first quarter 2018 results
Houston--(business wire)--forum energy technologies, inc. (nyse: fet) today announced first quarter 2018 revenue of $250 million, an increase of $3 million from the fourth quarter 2017. net income for the quarter was $28 million, or $0.25 per diluted share, compared to net income of $49 million, or $0.45 per diluted share, for the fourth quarter 2017. excluding $36 million, or $0.32 per share of special items, the adjusted net loss was $0.07 per diluted share in the first quarter of 2018. this adjusted net loss includes a negative impact of $0.02 per diluted share related to certain unrecognized tax benefits. special items in the first quarter of 2018, on a pre-tax basis, included a gain of $34 million related to the contribution of the subsea rentals business to ashtead technology in exchange for a 40% interest in the combined company and a $16 million tax benefit from applying updated guidance on u.s. tax reform, partially offset by $4 million of foreign exchange losses and $7 million of other charges. see tables 1-3 for a reconciliation of gaap to non-gaap financial information. segment results completions segment revenue was $113 million, an increase of $9 million, or 9%, sequentially, due to improved customer spending on pressure pumping equipment, coiled tubing and downhole completion products. new inbound orders in the first quarter were $111 million, an increase of $10 million, or 10%, resulting in a book to bill ratio of 99%. the completions segment designs and manufactures products for the well construction, completion, stimulation and intervention markets primarily in north america. production & infrastructure segment revenue was $86 million, a 6% decrease from the fourth quarter 2017, after strong deliveries of well site production equipment in the u.s. in the fourth quarter. new inbound orders in the first quarter were $97 million, a 20% increase sequentially, resulting in a book to bill ratio of 112%. orders for valves in the first quarter set another record, as customers prepare for downstream projects later in the year. the production & infrastructure segment manufactures u.s. 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 $52 million, a decrease of $2 million from the fourth quarter 2017, primarily due to the contribution of the subsea rentals business to ashtead in early january 2018. the decline in subsea revenue was partially offset by higher sales of drilling consumable products and handling tools. new inbound orders in the first quarter were $53 million, a 7% increase from the fourth quarter 2017, resulting in a book to bill ratio of 102%, led by orders for drilling equipment in the u.s., partially offset by delays of long anticipated orders for subsea capital equipment. 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, "our overall performance was in line with our expectations, except for the subsea product line. drilling and completions activity in north america continued to improve and we began to see the early signs of a recovery in international land drilling activity. these improving market fundamentals drove growth in orders in each of our three segments. "new orders received by forum in the first quarter were $261 million, a $30 million increase, or 13% sequentially, resulting in a book to bill ratio of 104%. despite the slow start to the quarter, revenue was up from the prior quarter to $250 million. adjusted ebitda was $19 million, even with a sequential decrease of approximately $4.5 million in the subsea product line. "our financial liquidity remains strong. during the quarter, we paid down $50 million on our revolving credit facility and we ended the quarter with approximately $277 million of total liquidity. "we expect robust growth for the balance of the year, led by our north america focused completions and production & infrastructure segments. we are also well positioned to capture growth opportunities in our drilling product line as the global land rig count improves. regarding subsea, we expect to receive some large non-oil and gas orders in the second quarter. with these orders, and our continued focus on streamlining operations, subsea will achieve ebitda break even or better for the balance of the year." recent events forum received orders in the first quarter of 2018 for over 280,000 horsepower of j-mac hydraulic fracturing power ends. forum was awarded a multiyear frame agreement to supply its davis-lynch casing and cementing equipment to an international service company, providing the opportunity to obtain significant incremental revenue. on january 3, 2018, the company contributed forum subsea rentals into ashtead technology, a competing business, in exchange for a 40% interest in the combined company. the transaction creates a market leading independent provider of subsea survey and remotely operated vehicle equipment rental services. conference call information forum's conference call is scheduled for tuesday, may 1, 2018 at 9:00 am cdt. during the call, the company intends to discuss first 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 8694337. 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 8694337. 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. (1) u.s. tax reform significantly changes u.s. corporate income tax laws by, among other things, reducing the u.s. corporate income tax rate to 21% starting in 2018 and creating a territorial tax system with a one-time mandatory tax on previously deferred earnings of non-u.s. subsidiaries. as a result, the company recorded a provisional charge of $10.1 million during the fourth quarter of 2017. based on guidance recently issued by the u.s. internal revenue service ("irs"), the company updated our provisional estimate and recorded a $16.2 million benefit in the first quarter of 2018 to reflect the revised provisional estimate. the impacts related to u.s. tax reform remain provisional in nature and are subject to further adjustment as additional guidance is provided by the u.s. irs regarding the application of the new u.s. corporate income tax laws. (2) refer to table 1 for schedule of adjusting items. march 31, 2018 december 31, 2017 march 31, 2018 march 31, 2017 december 31, 2017 march 31, 2018 march 31, 2017 december 31, 2017 (5) in order to better align with the predominant customer base of the segment, the company has moved management and financial reporting of the company's fully rotational torque machine operations, which operates under the amc brand, from the drilling and subsea segment to the completions segment. prior period financial information has been revised to conform with current period presentation with no impact to total segment operating results. march 31, 2018 march 31, 2017 december 31, 2017 operating income (loss) net income (loss) operating income (loss) net income (loss) operating income (loss) net income (loss) 10.1 (4.6 (0.04 (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) 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. march 31, 2018 march 31, 2017 december 31, 2017 march 31, 2018 march 31, 2017 march 31, 2018 march 31, 2017 december 31, 2017
