In This Article:
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Revenue Growth: Achieved 9% sequential growth.
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EBITDA: Increased to $26 million, up 69% sequentially.
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EBITDA Margin: Improved by 460 basis points to 13%.
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Book-to-Bill Ratio: Reported at 101%.
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Free Cash Flow: $2 million in Q1, exceeding expectations.
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Full Year EBITDA Guidance: Reaffirmed at $100 million to $120 million.
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Full Year Free Cash Flow Guidance: Projected at $40 million to $60 million.
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Q2 Revenue Forecast: Expected in the range of $200 million to $220 million.
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Q2 EBITDA Forecast: Anticipated to be between $24 million and $28 million.
Release Date: May 03, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Forum Energy Technologies Inc (NYSE:FET) reported a 9% sequential revenue growth and a 69% increase in EBITDA, with EBITDA margins improving by 460 basis points.
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The Variperm acquisition has been successfully integrated, enhancing FET's Artificial Lift and Downhole offerings and broadening the customer base in Canada.
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FET achieved a book-to-bill ratio of 101%, indicating healthy order intake relative to revenue.
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The company reaffirmed its full-year 2024 guidance with EBITDA of $100 million to $120 million and free cash flow of $40 million to $60 million.
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FET's innovation and new product development, such as the greaseless wireline cable system and FASTConnect manifold system, are laying the foundation for sustainable and profitable growth.
Negative Points
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Despite overall growth, the global rig count remained flat, with some seasonal softness in international markets as customers were slow to release budgets.
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Variperm's first quarter results were softer than the historical revenue run rate due to near-term headwinds, including uncertainty around the Trans Mountain Express Pipeline startup.
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The Drilling and Completions segment revenue decreased by 6% due to the completion of two ROV projects and lower demand for drilling capital equipment and international coiled tubing sales.
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The second quarter Canadian breakup, a seasonal impact, is expected to decrease Canadian rig count activity by around 50% from the first to second quarter, potentially impacting results.
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While Variperm's integration has been successful, achieving revenue synergies through collaboration between FET's traditional Downhole product line and Variperm will require further effort and time.
Q & A Highlights
Q: Could you walk us through your activity assumptions for this year regarding the U.S. land market, focusing on rig count and well count? A: Neal A. Lux, President and CEO, explained that there is no change to the initial outlook for the year. The U.S. rig count is expected to decline, but international rig counts should grow, especially in the second half of the year. The global rig count is anticipated to remain roughly flat, with decreases in the U.S. offset by stability in Canada and growth internationally.