Forum Energy Technologies, Inc. (NYSE:FET) today announced fourth
quarter 2015 revenue of $196 million, compared to $439 million in the
fourth quarter 2014. Net loss for the quarter was $164 million, or $1.81
per diluted share, compared to net income of $46 million, or $0.49 per
diluted share, for the prior year period. Excluding $1.69 per share of
special items, the adjusted net loss was $0.12 per diluted share in the
fourth quarter of 2015. Forum generated free cash flow after capital
expenditures of $34 million during the fourth quarter of 2015.
Special items in the fourth quarter 2015 included pre-tax charges of
$125 million for goodwill and intangible asset impairments, $43 million
for inventory and other working capital reserves, $13 million for
restructuring charges, and $4 million of foreign exchange gains. See
Table 1 for a reconciliation of GAAP to non-GAAP financial information.
Average oil prices in 2015 decreased approximately 45% from the prior
year and the North America rig count declined over 60% during the year.
This led to significant reductions in customer spending, which
negatively impacted fourth quarter and full year results.
Drilling & Subsea segment revenue in the fourth quarter 2015 was $104
million, a decrease of $174 million, or 63%, from the fourth quarter
2014. Production & Infrastructure segment revenue in the fourth quarter
2015 was $92 million, a decrease of $68 million, or 43%, from the prior
year period.
Forum’s total revenue for the full year 2015 was $1.1 billion, a
decrease of $666 million or 38%, from 2014. Net loss was $119 million,
or $1.33 per diluted share. Excluding $1.73 per share of special items,
adjusted diluted earnings per share were $0.40 for the full year 2015.
Free cash flow after capital expenditures for the full year 2015 was
$125 million. See Tables 2-5 for a reconciliation of GAAP to non-GAAP
financial information.
Review and Outlook
Cris Gaut, Forum’s Chairman and Chief Executive Officer, remarked, "In
2015, we demonstrated the scalability of our business model and our
ability to generate strong cash flow throughout the business cycle. We
reduced our cost structure in line with declining activity levels and
improved our operational efficiency, allowing us to achieve full year
operating income decremental margins of 30%, consistent with our full
year gross margins of 29%. Once again in 2015, our free cash flow
significantly exceeded our net income, and we ended the year with $109
million of cash on hand. Our balance sheet remains strong with nothing
drawn on our bank credit facility and no debt maturities until 2021.
"The fourth quarter of 2015 unfolded with exhausted E&P budgets, further
declines in the rig count, deferred maintenance of equipment, and very
low customer spending. New orders received by Forum in the fourth
quarter were $171 million, resulting in a book to bill ratio of 87%. Our
operating margins declined in the fourth quarter compared to the prior
period as it became increasingly difficult to continue to reduce our
operating expenses in line with declining revenue.
"Our Drilling & Subsea segment fourth quarter 2015 revenue declined $35
million, or 25%, sequentially on lower sales of drilling and subsea
capital equipment and softer demand for consumable products across the
segment.
"The Production & Infrastructure segment experienced a sequential
decrease in revenue of $14 million, or 13%, compared to the third
quarter 2015 primarily on reduced sales of valves and pressure pumping
consumable equipment.
“This year will be another challenge for all industry participants as
this downturn continues to run its course. Although we have been cutting
costs for more than a year and will continue to focus on our cost
structure, we believe it is important to preserve our operational
capability. Our weighting towards consumable products and short cycle
capital equipment is responsive to activity levels, enabling Forum to be
at the leading edge of resupplying our customers when activity recovers.
“For 2016, we remain focused on generating free cash flow, improving
operational efficiency, and executing our disciplined acquisition
strategy, while preserving our strong balance sheet."
Recent Events
Once again, Forum rated #1 for downhole drilling equipment and for
cementing equipment in the EnergyPoint Research 2015 Oilfield Products &
Services Customer Satisfaction Survey.
Conference Call Information
Forum's conference call is scheduled for February 12, 2016 at 9:00 AM
CST. During the call, the Company intends to discuss fourth quarter 2015
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 23974521. 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 23974521.
Forum Energy Technologies is a global oilfield products company,
serving the subsea, drilling, completion, 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.
|
Forum Energy Technologies, Inc.
|
|
Condensed consolidated statements of income
|
|
(Unaudited)
|
|
|
|
|
|
|
|
Three months ended
|
|
|
|
December 31,
|
|
September 30,
|
|
(in millions, except per share information)
|
|
2015
|
|
2014
|
|
2015
|
|
Revenue
|
|
$
|
196.1
|
|
|
$
|
438.7
|
|
|
$
|
245.0
|
|
|
Operating expenses
|
|
262.1
|
|
|
381.1
|
|
|
236.7
|
|
|
Earnings from equity investment
|
|
2.5
|
|
|
7.2
|
|
|
3.9
|
|
|
Goodwill and intangible asset impairment
|
|
125.1
|
|
|
—
|
|
|
—
|
|
|
Operating income (loss)
|
|
(188.6
|
)
|
|
64.8
|
|
|
12.2
|
|
|
Other expense
|
|
|
|
|
|
|
|
Interest expense
|
|
7.3
|
|
|
6.7
|
|
|
7.4
|
|
|
Loss (gain) on foreign exchange and other, net
|
|
(3.9
|
)
|
|
(3.6
|
)
|
|
(2.9
|
)
|
|
Profit (loss) before income taxes
|
|
(192.0
|
)
|
|
61.7
|
|
|
7.7
|
|
|
Provision for income tax expense (benefit)
|
|
(28.4
|
)
|
|
15.7
|
|
|
1.0
|
|
|
Net income (loss)
|
|
(163.6
|
)
|
|
46.0
|
|
|
6.7
|
|
|
Less: Net income (loss) attributable to noncontrolling interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Net income (loss) attributable to common stockholders (1)
|
|
$
|
(163.6
|
)
|
|
$
|
46.0
|
|
|
$
|
6.7
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding
|
|
|
|
|
|
|
|
Basic
|
|
90.2
|
|
|
92.4
|
|
|
90.1
|
|
|
Diluted
|
|
90.2
|
|
|
94.7
|
|
|
91.7
|
|
|
|
|
|
|
|
|
|
|
Earnings (losses) per share
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(1.81
|
)
|
|
$
|
0.50
|
|
|
$
|
0.07
|
|
|
Diluted
|
|
$
|
(1.81
|
)
|
|
$
|
0.49
|
|
|
$
|
0.07
|
|
|
|
|
|
|
|
|
|
|
(1) Refer to Table 1 for schedule of adjusting items.
|
|
|
|
Forum Energy Technologies, Inc.
|
|
Condensed consolidated statements of income
|
|
(Unaudited)
|
|
|
|
|
|
|
|
Year Ended December 31,
|
|
(in millions, except per share information)
|
|
2015
|
|
2014
|
|
Revenue
|
|
$
|
1,073.7
|
|
|
$
|
1,739.7
|
|
|
Operating expenses
|
|
1,077.1
|
|
|
1,496.9
|
|
|
Earnings from equity investment
|
|
14.8
|
|
|
25.2
|
|
|
Goodwill and Intangible asset impairment
|
|
125.1
|
|
|
—
|
|
|
Operating income (loss)
|
|
(113.7
|
)
|
|
268.0
|
|
|
Other expense
|
|
|
|
|
|
Interest expense
|
|
29.9
|
|
|
29.9
|
|
|
Loss (gain) on foreign exchange and other, net
|
|
(9.3
|
)
|
|
(4.3
|
)
|
|
Profit (loss) before income taxes
|
|
(134.3
|
)
|
|
242.4
|
|
|
Provision for income tax expense (benefit)
|
|
(14.9
|
)
|
|
68.1
|
|
|
Net income (loss)
|
|
(119.4
|
)
|
|
174.3
|
|
|
Less: Net income (loss) attributable to noncontrolling interest
|
|
—
|
|
|
—
|
|
|
Net income (loss) attributable to common stockholders (1)
|
|
$
|
(119.4
|
)
|
|
$
|
174.3
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding
|
|
|
|
|
|
Basic
|
|
89.9
|
|
|
92.6
|
|
|
Diluted
|
|
89.9
|
|
|
95.3
|
|
|
|
|
|
|
|
|
Earnings (losses) per share
|
|
|
|
|
|
Basic
|
|
$
|
(1.33
|
)
|
|
$
|
1.88
|
|
|
Diluted
|
|
$
|
(1.33
|
)
|
|
$
|
1.83
|
|
|
|
|
|
|
|
|
(1) Refer to Table 2 for schedule of adjusting items.
|
|
|
|
Forum Energy Technologies, Inc.
|
|
Condensed consolidated balance sheets
|
|
(Unaudited)
|
|
|
|
|
|
|
|
(in millions of dollars)
|
|
December 31,
2015
|
|
December 31,
2014
|
|
Assets
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
109.2
|
|
|
$
|
76.6
|
|
Accounts receivable—trade, net
|
|
138.6
|
|
|
287.0
|
|
Inventories, net
|
|
424.1
|
|
|
461.5
|
|
Other current assets
|
|
46.5
|
|
|
70.0
|
|
Total current assets
|
|
718.4
|
|
|
895.1
|
|
Property and equipment, net of accumulated depreciation
|
|
186.7
|
|
|
190.0
|
|
Goodwill and other intangibles, net
|
|
915.7
|
|
|
1,070.2
|
|
Investment in unconsolidated subsidiary
|
|
57.7
|
|
|
49.7
|
|
Other long-term assets
|
|
40.0
|
|
|
9.1
|
|
Total assets
|
|
$
|
1,918.5
|
|
|
$
|
2,214.1
|
|
Liabilities and Equity
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
Current portion of long-term debt
|
|
$
|
0.3
|
|
|
$
|
0.8
|
|
Other current liabilities
|
|
150.1
|
|
|
281.4
|
|
Total current liabilities
|
|
150.4
|
|
|
282.2
|
|
Long-term debt, net of current portion
|
|
396.0
|
|
|
420.5
|
|
Other long-term liabilities
|
|
114.7
|
|
|
115.4
|
|
Total liabilities
|
|
661.1
|
|
|
818.1
|
|
Total stockholders’ equity
|
|
1,257.0
|
|
|
1,395.4
|
|
Noncontrolling interest in subsidiary
|
|
0.4
|
|
|
0.6
|
|
Total equity
|
|
1,257.4
|
|
|
1,396.0
|
|
Total liabilities and equity
|
|
$
|
1,918.5
|
|
|
$
|
2,214.1
|
|
|
|
Forum Energy Technologies, Inc.
|
|
Condensed consolidated cash flow information
|
|
(Unaudited)
|
|
|
|
Year Ended December 31,
|
|
(in millions of dollars)
|
|
2015
|
|
2014
|
|
Cash flows from operating activities
|
|
|
|
|
|
Net income (loss)
|
|
$
|
(119.4
|
)
|
|
$
|
174.3
|
|
|
Depreciation and amortization
|
|
65.7
|
|
|
65.1
|
|
|
Goodwill and intangible asset impairment
|
|
125.1
|
|
|
—
|
|
|
Other
|
|
83.4
|
|
|
30.6
|
|
|
Net cash provided by operating activities
|
|
$
|
154.8
|
|
|
$
|
270.0
|
|
|
Cash flows from investing activities
|
|
|
|
|
|
Capital expenditures for property and equipment
|
|
$
|
(31.3
|
)
|
|
$
|
(53.8
|
)
|
|
Proceeds from sale of business, property and equipment
|
|
1.8
|
|
|
12.2
|
|
|
Acquisition of businesses, net of cash acquired
|
|
(60.8
|
)
|
|
(38.3
|
)
|
|
Return of investment from unconsolidated subsidiary
|
|
—
|
|
|
9.2
|
|
|
Net cash used in investing activities
|
|
$
|
(90.3
|
)
|
|
$
|
(70.7
|
)
|
|
Cash flows from financing activities
|
|
|
|
|
|
Repayment of long-term debt
|
|
$
|
(120.8
|
)
|
|
$
|
(99.6
|
)
|
Borrowings of long-term debt, including borrowings due to
acquisitions
|
|
95.0
|
|
|
15.4
|
|
|
Repurchase of common stock
|
|
(6.4
|
)
|
|
(96.5
|
)
|
|
Other
|
|
5.3
|
|
|
18.7
|
|
|
Net cash used in financing activities
|
|
$
|
(26.9
|
)
|
|
$
|
(162.0
|
)
|
|
Effect of exchange rate changes on cash
|
|
(5.0
|
)
|
|
(0.3
|
)
|
|
Net increase in cash and cash equivalents
|
|
$
|
32.6
|
|
|
$
|
37.0
|
|
|
|
|
Forum Energy Technologies, Inc.
|
|
Supplemental schedule - Segment information
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
As Reported
|
|
As Adjusted (5)
|
|
|
|
Three months ended
|
|
Three months ended
|
|
(in millions of dollars)
|
|
December 31,
2015
|
|
December 31,
2014
|
|
September 30,
2015
|
|
December 31,
2015
|
|
December 31,
2014
|
|
September 30,
2015
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Drilling & Subsea
|
|
$
|
104.1
|
|
|
$
|
278.1
|
|
|
$
|
139.1
|
|
|
$
|
104.1
|
|
|
$
|
278.1
|
|
|
$
|
139.1
|
|
|
Production & Infrastructure
|
|
92.4
|
|
|
160.8
|
|
|
106.2
|
|
|
92.4
|
|
|
160.8
|
|
|
106.2
|
|
|
Eliminations
|
|
(0.4
|
)
|
|
(0.2
|
)
|
|
(0.3
|
)
|
|
(0.4
|
)
|
|
(0.2
|
)
|
|
(0.3
|
)
|
|
Total revenue
|
|
$
|
196.1
|
|
|
$
|
438.7
|
|
|
$
|
245.0
|
|
|
$
|
196.1
|
|
|
$
|
438.7
|
|
|
$
|
245.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Drilling & Subsea
|
|
$
|
(42.1
|
)
|
|
$
|
45.9
|
|
|
$
|
6.7
|
|
|
$
|
(7.5
|
)
|
|
$
|
47.4
|
|
|
$
|
8.7
|
|
|
Operating income (loss) margin %
|
|
(40.5
|
)%
|
|
16.5
|
%
|
|
4.8
|
%
|
|
(7.2
|
)%
|
|
17.0
|
%
|
|
6.3
|
%
|
|
Production & Infrastructure (1)
|
|
(13.6
|
)
|
|
32.3
|
|
|
10.7
|
|
|
5.3
|
|
|
32.4
|
|
|
10.9
|
|
|
Operating income (loss) margin %
|
|
(14.7
|
)%
|
|
20.1
|
%
|
|
10.1
|
%
|
|
5.7
|
%
|
|
20.1
|
%
|
|
10.3
|
%
|
|
Corporate
|
|
(6.7
|
)
|
|
(12.3
|
)
|
|
(5.0
|
)
|
|
(5.7
|
)
|
|
(10.8
|
)
|
|
(5.0
|
)
|
|
Total Segment operating income (loss)
|
|
(62.4
|
)
|
|
65.9
|
|
|
12.4
|
|
|
(7.9
|
)
|
|
69.0
|
|
|
14.6
|
|
|
Other items not in segment operating income (2)
|
|
(126.2
|
)
|
|
(1.1
|
)
|
|
(0.2
|
)
|
|
0.1
|
|
|
(1.1
|
)
|
|
—
|
|
|
Total operating income (loss)
|
|
$
|
(188.6
|
)
|
|
$
|
64.8
|
|
|
$
|
12.2
|
|
|
$
|
(7.8
|
)
|
|
$
|
67.9
|
|
|
$
|
14.6
|
|
|
Operating income (loss) margin %
|
|
(96.2
|
)%
|
|
14.8
|
%
|
|
5.0
|
%
|
|
(4.0
|
)%
|
|
15.5
|
%
|
|
6.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA (3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Drilling & Subsea
|
|
$
|
(152.3
|
)
|
|
$
|
60.7
|
|
|
$
|
20.6
|
|
|
$
|
3.6
|
|
|
$
|
58.0
|
|
|
$
|
19.8
|
|
|
Percentage of D&S revenue %
|
|
(146.3
|
)%
|
|
21.8
|
%
|
|
14.8
|
%
|
|
3.5
|
%
|
|
20.9
|
%
|
|
14.2
|
%
|
|
Production & Infrastructure
|
|
(11.0
|
)
|
|
35.2
|
|
|
14.5
|
|
|
9.0
|
|
|
35.5
|
|
|
14.9
|
|
|
Percentage of P&I revenue %
|
|
(11.9
|
)%
|
|
21.9
|
%
|
|
13.7
|
%
|
|
9.7
|
%
|
|
22.1
|
%
|
|
14.0
|
%
|
|
Corporate
|
|
(5.0
|
)
|
|
(11.2
|
)
|
|
(3.2
|
)
|
|
(3.8
|
)
|
|
(9.6
|
)
|
|
(3.4
|
)
|
|
Other items (4)
|
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Total EBITDA
|
|
$
|
(168.3
|
)
|
|
$
|
84.7
|
|
|
$
|
31.7
|
|
|
$
|
8.8
|
|
|
$
|
83.9
|
|
|
$
|
31.3
|
|
|
Percentage of total revenue %
|
|
(85.8
|
)%
|
|
19.3
|
%
|
|
12.9
|
%
|
|
4.5
|
%
|
|
19.1
|
%
|
|
12.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes earnings from equity investment.
|
(2) Includes transaction expenses, gain/(loss) on sale of
assets and impairment of intangible assets and goodwill.
|
(3) The Company believes that the presentation of EBITDA
is useful to the Company's investors because 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. 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.
|
|
(4) Includes transaction expenses.
|
|
(5) Refer to Table 1 for schedule of adjusting items.
|
|
|
|
Forum Energy Technologies, Inc.
|
|
Supplemental schedule - Segment information
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
As Reported
|
|
As Adjusted (5)
|
|
|
|
Year ended December 31,
|
|
Year ended December 31,
|
|
(in millions of dollars)
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
Drilling & Subsea
|
|
$
|
628.0
|
|
|
$
|
1,126.6
|
|
|
628.0
|
|
|
$
|
1,126.6
|
|
|
Production & Infrastructure
|
|
446.7
|
|
|
614.4
|
|
|
446.7
|
|
|
614.4
|
|
|
Eliminations
|
|
(1.0
|
)
|
|
(1.3
|
)
|
|
(1.0
|
)
|
|
(1.3
|
)
|
|
Total revenue
|
|
$
|
1,073.7
|
|
|
$
|
1,739.7
|
|
|
$
|
1,073.7
|
|
|
$
|
1,739.7
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss)
|
|
|
|
|
|
|
|
|
|
Drilling & Subsea
|
|
$
|
9.2
|
|
|
$
|
201.2
|
|
|
$
|
53.1
|
|
|
$
|
202.8
|
|
|
Operating income (loss) margin %
|
|
1.5
|
%
|
|
17.9
|
%
|
|
8.5
|
%
|
|
18.0
|
%
|
|
Production & Infrastructure (1)
|
|
31.5
|
|
|
112.6
|
|
|
50.0
|
|
|
113.0
|
|
|
Operating income (loss) margin %
|
|
7.1
|
%
|
|
18.3
|
%
|
|
11.2
|
%
|
|
18.4
|
%
|
|
Corporate
|
|
(28.1
|
)
|
|
(41.9
|
)
|
|
(26.7
|
)
|
|
(40.1
|
)
|
|
Total Segment operating income
|
|
12.6
|
|
|
271.9
|
|
|
76.4
|
|
|
275.7
|
|
|
Other items not in segment operating income (2)
|
|
(126.3
|
)
|
|
(3.9
|
)
|
|
0.3
|
|
|
(0.8
|
)
|
|
Total operating income (loss)
|
|
$
|
(113.7
|
)
|
|
$
|
268.0
|
|
|
$
|
76.7
|
|
|
$
|
274.9
|
|
|
Operating income (loss) margin %
|
|
(10.6
|
)%
|
|
15.4
|
%
|
|
7.1
|
%
|
|
15.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA (3)
|
|
|
|
|
|
|
|
|
|
Drilling & Subsea
|
|
$
|
(60.9
|
)
|
|
$
|
252.9
|
|
|
$
|
98.1
|
|
|
$
|
249.3
|
|
|
Percentage of D&S revenue %
|
|
(9.7
|
)%
|
|
22.4
|
%
|
|
15.6
|
%
|
|
22.1
|
%
|
|
Production & Infrastructure
|
|
44.2
|
|
|
124.1
|
|
|
65.0
|
|
|
125.4
|
|
|
Percentage of P&I revenue %
|
|
9.9
|
%
|
|
20.2
|
%
|
|
14.6
|
%
|
|
20.4
|
%
|
|
Corporate
|
|
(21.6
|
)
|
|
(36.5
|
)
|
|
(20.2
|
)
|
|
(34.9
|
)
|
|
Other items (4)
|
|
(0.4
|
)
|
|
(3.1
|
)
|
|
—
|
|
|
—
|
|
|
Total EBITDA
|
|
$
|
(38.7
|
)
|
|
$
|
337.4
|
|
|
$
|
142.9
|
|
|
$
|
339.8
|
|
|
Percentage of total revenue %
|
|
(3.6
|
)%
|
|
19.4
|
%
|
|
13.3
|
%
|
|
19.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes earnings from equity investment.
|
(2) Includes transaction expenses, loss on sale of business,
gain/(loss) on sale of assets and impairment of intangible assets
and goodwill.
|
(3) The Company believes that the presentation of EBITDA is useful
to the Company's investors because 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. 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.
|
|
(4) Includes transaction expenses and loss on sale of business.
|
|
(5) Refer to Table 2 for schedule of adjusting items.
|
|
|
|
|
|
|
|
|
|
|
|
Forum Energy Technologies, Inc.
|
|
Reconciliation of GAAP to non-GAAP financial information
|
|
(Unaudited)
|
|
|
|
|
Table 1 - Adjusting items
|
|
|
|
|
|
Three months ended
|
|
|
December 31, 2015
|
|
December 31, 2014
|
|
September 30, 2015
|
|
(in millions, except per share information)
|
Operating income (loss)
|
|
EBITDA (1)
|
|
Net income (loss)
|
|
Operating income (loss)
|
|
EBITDA (1)
|
|
Net income (loss)
|
|
Operating income (loss)
|
|
EBITDA (1)
|
|
Net income (loss)
|
|
As reported
|
$
|
(188.6
|
)
|
|
$
|
(168.3
|
)
|
|
$
|
(163.6
|
)
|
|
$
|
64.8
|
|
|
$
|
84.7
|
|
|
$
|
46.0
|
|
|
$
|
12.2
|
|
|
$
|
31.7
|
|
|
$
|
6.7
|
|
|
% of revenue
|
(96.2
|
)%
|
|
(85.8
|
)%
|
|
|
|
14.8
|
%
|
|
19.3
|
%
|
|
|
|
5.0
|
%
|
|
12.9
|
%
|
|
|
|
Restructuring charges
|
12.6
|
|
|
12.6
|
|
|
8.3
|
|
|
3.1
|
|
|
3.1
|
|
|
2.2
|
|
|
2.2
|
|
|
2.2
|
|
|
1.7
|
|
|
Transaction expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
|
0.2
|
|
|
0.1
|
|
|
Inventory and other working capital reserve
|
43.1
|
|
|
43.1
|
|
|
28.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Goodwill and intangible asset impairment
|
125.1
|
|
|
125.1
|
|
|
118.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Loss (gain) on foreign exchange, net (2)
|
—
|
|
|
(3.7
|
)
|
|
(2.7
|
)
|
|
—
|
|
|
(3.9
|
)
|
|
(2.7
|
)
|
|
—
|
|
|
(2.8
|
)
|
|
(2.1
|
)
|
|
As adjusted (1)
|
$
|
(7.8
|
)
|
|
$
|
8.8
|
|
|
$
|
(10.9
|
)
|
|
$
|
67.9
|
|
|
$
|
83.9
|
|
|
$
|
45.5
|
|
|
$
|
14.6
|
|
|
$
|
31.3
|
|
|
$
|
6.4
|
|
|
% of revenue
|
(4.0
|
)%
|
|
4.5
|
%
|
|
|
|
15.5
|
%
|
|
19.1
|
%
|
|
|
|
6.0
|
%
|
|
12.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted EPS -as reported
|
|
|
|
|
$
|
(1.81
|
)
|
|
|
|
|
|
$
|
0.49
|
|
|
|
|
|
|
$
|
0.07
|
|
|
Diluted EPS - as adjusted
|
|
|
|
|
$
|
(0.12
|
)
|
|
|
|
|
|
$
|
0.48
|
|
|
|
|
|
|
$
|
0.07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 2 - Adjusting items
|
|
|
|
|
|
|
|
Year ended
|
|
|
|
December 31, 2015
|
|
December 31, 2014
|
|
(in millions, except per share information)
|
|
Operating income (loss)
|
|
EBITDA (1)
|
|
Net income (loss)
|
|
Operating income (loss)
|
|
EBITDA (1)
|
|
Net income (loss)
|
|
As reported
|
|
$
|
(113.7
|
)
|
|
$
|
(38.7
|
)
|
|
$
|
(119.4
|
)
|
|
$
|
268.0
|
|
|
$
|
337.4
|
|
|
174.3
|
|
|
% of revenue
|
|
(10.6
|
)%
|
|
(3.6
|
)%
|
|
|
|
15.4
|
%
|
|
19.4
|
%
|
|
|
|
Restructuring charges
|
|
21.8
|
|
|
21.8
|
|
|
15.5
|
|
|
3.8
|
|
|
3.8
|
|
|
2.7
|
|
|
Transaction expenses
|
|
0.4
|
|
|
0.4
|
|
|
0.4
|
|
|
2.3
|
|
|
2.3
|
|
|
1.7
|
|
|
Inventory and other working capital reserve
|
|
43.1
|
|
|
43.1
|
|
|
28.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Goodwill and intangible asset impairment
|
|
125.1
|
|
|
125.1
|
|
|
118.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Loss on sale of business
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.8
|
|
|
0.8
|
|
|
0.5
|
|
|
Loss (gain) on foreign exchange, net (2)
|
|
—
|
|
|
(8.8
|
)
|
|
(6.5
|
)
|
|
—
|
|
|
(4.5
|
)
|
|
(3.1
|
)
|
|
As adjusted (1)
|
|
$
|
76.7
|
|
|
$
|
142.9
|
|
|
$
|
37.1
|
|
|
$
|
274.9
|
|
|
$
|
339.8
|
|
|
$
|
176.1
|
|
|
% of revenue
|
|
7.1
|
%
|
|
13.3
|
%
|
|
|
|
15.8
|
%
|
|
19.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted EPS - as reported
|
|
|
|
|
|
$
|
(1.33
|
)
|
|
|
|
|
|
$
|
1.83
|
|
|
Diluted EPS - as adjusted
|
|
|
|
|
|
$
|
0.40
|
|
|
|
|
|
|
$
|
1.85
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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) Loss (gain) on foreign exchange, net primarily
relates to the translation of U.S. dollar denominated receivables
for reporting purposes only and have no economic impact in dollar
terms.
|
|
|
|
Forum Energy Technologies, Inc.
|
|
Reconciliation of GAAP to non-GAAP financial information
|
|
(Unaudited)
|
|
|
|
|
|
Table 3 - Adjusting items
|
|
|
|
|
|
|
|
Three months ended
|
|
(in millions of dollars)
|
|
December 31,
2015
|
|
December 31,
2014
|
|
September 30,
2015
|
|
EBITDA reconciliation (1)
|
|
|
|
|
|
|
|
Net income (loss) attributable to common stockholders
|
|
$
|
(163.6
|
)
|
|
$
|
46.0
|
|
|
$
|
6.7
|
|
Interest expense
|
|
7.3
|
|
|
6.7
|
|
|
7.4
|
|
Depreciation and amortization
|
|
16.4
|
|
|
16.3
|
|
|
16.6
|
|
Income tax expense (benefit)
|
|
(28.4
|
)
|
|
15.7
|
|
|
1.0
|
|
EBITDA
|
|
$
|
(168.3
|
)
|
|
$
|
84.7
|
|
|
$
|
31.7
|
|
|
|
Table 4 - Adjusting items
|
|
|
|
|
|
|
|
Year ended
|
|
(in millions of dollars)
|
|
December 31,
2015
|
|
December 31,
2014
|
|
EBITDA reconciliation (1)
|
|
|
|
|
|
Net income (loss) attributable to common stockholders
|
|
$
|
(119.4
|
)
|
|
$
|
174.3
|
|
Interest expense
|
|
29.9
|
|
|
29.9
|
|
Depreciation and amortization
|
|
65.7
|
|
|
65.1
|
|
Income tax expense (benefit)
|
|
(14.9
|
)
|
|
68.1
|
|
EBITDA
|
|
$
|
(38.7
|
)
|
|
$
|
337.4
|
(1) The Company believes that the presentation of EBITDA is
useful to the Company's investors because 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. In addition, EBITDA is a widely used benchmark
in the investment community.
|
|
|
|
|
Table 5 - Adjusting items
|
|
|
|
|
|
|
|
Year ended
|
|
(in millions of dollars)
|
|
December 31,
2015
|
|
December 31,
2014
|
|
Free cash flow, before acquisitions, reconciliation (2)
|
|
|
|
|
|
Net cash provided by operating activities
|
|
$
|
154.8
|
|
|
$
|
270.0
|
|
|
Capital expenditures for property and equipment
|
|
(31.3
|
)
|
|
(53.8
|
)
|
|
Proceeds from sale of property and equipment
|
|
1.8
|
|
|
2.7
|
|
|
Free cash flow, before acquisitions
|
|
$
|
125.3
|
|
|
$
|
218.9
|
|
(2) The Company believes free cash flow, before acquisitions
is an important measure because it encompasses both profitability and
capital management in evaluating results.
|
|
|
Forum Energy Technologies, Inc.
|
|
Supplemental schedule - Product line revenue
|
|
(Unaudited)
|
|
|
|
Year ended December 31,
|
|
(in millions of dollars)
|
|
2015
|
|
2014
|
|
Revenue:
|
|
$
|
%
|
|
$
|
%
|
|
Drilling Technologies
|
|
$
|
332.4
|
|
30.9
|
%
|
|
$
|
614.8
|
|
35.4
|
%
|
|
Subsea Technologies
|
|
189.1
|
|
17.6
|
%
|
|
321.0
|
|
18.5
|
%
|
|
Downhole Technologies
|
|
106.5
|
|
9.9
|
%
|
|
190.8
|
|
11.0
|
%
|
|
Drilling & Subsea
|
|
628.0
|
|
58.4
|
%
|
|
1,126.6
|
|
64.9
|
%
|
|
|
|
|
|
|
|
|
|
Production Equipment
|
|
145.9
|
|
13.6
|
%
|
|
228.8
|
|
13.1
|
%
|
|
Valve Solutions
|
|
174.5
|
|
16.3
|
%
|
|
207.4
|
|
11.9
|
%
|
|
Flow Equipment
|
|
126.3
|
|
11.8
|
%
|
|
178.2
|
|
10.2
|
%
|
|
Production & Infrastructure
|
|
446.7
|
|
41.7
|
%
|
|
614.4
|
|
35.2
|
%
|
|
Eliminations
|
|
(1.0
|
)
|
(0.1
|
)%
|
|
(1.3
|
)
|
(0.1
|
)%
|
|
Total Revenue
|
|
$
|
1,073.7
|
|
100.0
|
%
|
|
$
|
1,739.7
|
|
100.0
|
%
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20160211006558/en/
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