On February 20, 2025, Forum Energy Technologies Inc (FET, Financial) released its 8-K filing detailing its financial performance for the fourth quarter and full year 2024. The company, which serves the oil, natural gas, industrial, and renewable energy industries, reported a fourth-quarter revenue of $201 million, slightly below analyst estimates of $201.85 million. However, the net loss for the quarter widened to $104 million, primarily due to a significant non-cash, pre-tax intangible asset impairment of $119 million.
Company Overview
Forum Energy Technologies Inc is a global manufacturing company headquartered in Houston, Texas. It designs, manufactures, and distributes products for the oil, natural gas, industrial, and renewable energy sectors. The company operates through three segments: Drilling and Downhole, Completions, and Production, with the Drilling and Downhole segment being the primary revenue generator.
Performance and Challenges
Forum Energy Technologies Inc's performance in 2024 was marked by a 10% year-over-year increase in revenue to $816 million. Despite this growth, the company faced challenges, including a net loss of $135 million for the year. The impairment of intangible assets significantly impacted the financial results, highlighting the volatility and risks associated with the oil and gas industry.
Financial Achievements
The company achieved an adjusted EBITDA of $100 million, a 49% increase from 2023, reflecting improved operational efficiency. Operating cash flow and free cash flow were reported at $92 million and $105 million, respectively, the highest since 2015. These achievements underscore the company's focus on efficient working capital management and strategic investments.
Key Financial Metrics
Forum Energy Technologies Inc reported a book-to-bill ratio of 96% with orders totaling $780 million. The adjusted net loss for the quarter was $6 million, while the full-year adjusted net loss stood at $11 million. The company's balance sheet showed total assets of $816 million, with total liabilities of $496.2 million and total equity of $319.8 million.
Neal Lux, President and CEO, stated, “2024 was a fantastic year for FET. We began by closing the Variperm acquisition, which contributed meaningfully to our financial results. Consolidated revenue was up $78 million and adjusted EBITDA increased $33 million, resulting in a 42% incremental margin.”
Segment Performance
The Drilling and Completions segment reported a 10% decrease in revenue to $111 million, attributed to lower sales of capital equipment and consumable products. Conversely, the Artificial Lift and Downhole segment saw a 7% increase in revenue to $90 million, driven by higher demand for processing equipment technologies and artificial lift products.
Analysis and Outlook
Forum Energy Technologies Inc's strategic initiatives, including the Variperm acquisition and the "Beat the Market" strategy, have positioned the company for future growth. However, the near-term outlook remains cautious due to range-bound commodity prices and anticipated declines in global drilling and completion activity. The company has provided 2025 guidance with adjusted EBITDA expected to range between $85 million and $105 million.
Overall, Forum Energy Technologies Inc's 2024 performance reflects both the opportunities and challenges within the oil and gas industry. The company's focus on strategic investments and market share growth positions it well for future success, despite the current market uncertainties.
Explore the complete 8-K earnings release (here) from Forum Energy Technologies Inc for further details.
