þ
|
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
For the Quarterly Period Ended September 30, 2016
|
o
|
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
|
61-1488595
|
(State or other jurisdiction of
|
|
(I.R.S. Employer Identification No.)
|
incorporation or organization)
|
|
|
Large accelerated filer
þ
|
|
Accelerated filer
o
|
|
Non-accelerated filer
o
|
|
Smaller reporting company
o
|
|
|
|
|
(Do not check if a smaller reporting company)
|
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
(in thousands, except per share information)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Revenue
|
$
|
138,268
|
|
|
$
|
244,993
|
|
|
$
|
440,432
|
|
|
$
|
877,504
|
|
Cost of sales
|
108,984
|
|
|
179,231
|
|
|
371,310
|
|
|
617,733
|
|
||||
Gross profit
|
29,284
|
|
|
65,762
|
|
|
69,122
|
|
|
259,771
|
|
||||
Operating expenses
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative expenses
|
53,362
|
|
|
57,235
|
|
|
171,638
|
|
|
197,020
|
|
||||
Transaction expenses
|
341
|
|
|
193
|
|
|
571
|
|
|
433
|
|
||||
Loss (gain) on sale of assets and other
|
2,217
|
|
|
11
|
|
|
2,233
|
|
|
(264
|
)
|
||||
Total operating expenses
|
55,920
|
|
|
57,439
|
|
|
174,442
|
|
|
197,189
|
|
||||
Earnings from equity investment
|
414
|
|
|
3,870
|
|
|
1,207
|
|
|
12,281
|
|
||||
Operating income (loss)
|
(26,222
|
)
|
|
12,193
|
|
|
(104,113
|
)
|
|
74,863
|
|
||||
Other expense (income)
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
6,746
|
|
|
7,453
|
|
|
20,664
|
|
|
22,687
|
|
||||
Deferred financing costs written off
|
—
|
|
|
—
|
|
|
2,588
|
|
|
—
|
|
||||
Foreign exchange (gains) losses and other, net
|
(3,152
|
)
|
|
(2,910
|
)
|
|
(14,546
|
)
|
|
(5,511
|
)
|
||||
Total other expense
|
3,594
|
|
|
4,543
|
|
|
8,706
|
|
|
17,176
|
|
||||
Income (loss) before income taxes
|
(29,816
|
)
|
|
7,650
|
|
|
(112,819
|
)
|
|
57,687
|
|
||||
Provision (benefit) for income tax expense
|
(11,821
|
)
|
|
932
|
|
|
(43,374
|
)
|
|
13,448
|
|
||||
Net income (loss)
|
(17,995
|
)
|
|
6,718
|
|
|
(69,445
|
)
|
|
44,239
|
|
||||
Less: Income (loss) attributable to noncontrolling interest
|
(6
|
)
|
|
(2
|
)
|
|
24
|
|
|
(27
|
)
|
||||
Net income (loss) attributable to common stockholders
|
(17,989
|
)
|
|
6,720
|
|
|
(69,469
|
)
|
|
44,266
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Weighted average shares outstanding
|
|
|
|
|
|
|
|
||||||||
Basic
|
90,860
|
|
|
90,058
|
|
|
90,682
|
|
|
89,770
|
|
||||
Diluted
|
90,860
|
|
|
91,687
|
|
|
90,682
|
|
|
91,576
|
|
||||
Earnings (losses) per share
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
(0.20
|
)
|
|
$
|
0.07
|
|
|
$
|
(0.77
|
)
|
|
$
|
0.49
|
|
Diluted
|
$
|
(0.20
|
)
|
|
$
|
0.07
|
|
|
$
|
(0.77
|
)
|
|
$
|
0.48
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
(17,995
|
)
|
|
6,718
|
|
|
(69,445
|
)
|
|
44,239
|
|
||||
Change in foreign currency translation, net of tax of $0
|
(6,243
|
)
|
|
(18,747
|
)
|
|
(25,618
|
)
|
|
(30,553
|
)
|
||||
Gain (loss) on pension liability
|
(14
|
)
|
|
(2
|
)
|
|
(33
|
)
|
|
68
|
|
||||
Comprehensive income (loss)
|
(24,252
|
)
|
|
(12,031
|
)
|
|
(95,096
|
)
|
|
13,754
|
|
||||
Less: comprehensive loss (income) attributable to noncontrolling interests
|
(27
|
)
|
|
64
|
|
|
(156
|
)
|
|
118
|
|
||||
Comprehensive income (loss) attributable to common stockholders
|
$
|
(24,279
|
)
|
|
$
|
(11,967
|
)
|
|
$
|
(95,252
|
)
|
|
$
|
13,872
|
|
(in thousands, except share information)
|
September 30,
2016 |
|
December 31,
2015 |
||||
Assets
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
132,534
|
|
|
$
|
109,249
|
|
Accounts receivable—trade, net
|
100,255
|
|
|
138,597
|
|
||
Inventories, net
|
355,232
|
|
|
424,121
|
|
||
Income tax receivable
|
32,801
|
|
|
—
|
|
||
Prepaid expenses and other current assets
|
29,626
|
|
|
33,836
|
|
||
Costs and estimated profits in excess of billings
|
10,301
|
|
|
12,009
|
|
||
Total current assets
|
660,749
|
|
|
717,812
|
|
||
Property and equipment, net of accumulated depreciation
|
159,453
|
|
|
186,667
|
|
||
Deferred financing costs, net
|
1,412
|
|
|
4,125
|
|
||
Intangibles, net
|
225,520
|
|
|
246,650
|
|
||
Goodwill
|
660,976
|
|
|
669,036
|
|
||
Investment in unconsolidated subsidiary
|
58,523
|
|
|
57,719
|
|
||
Deferred income taxes, net
|
720
|
|
|
780
|
|
||
Other long-term assets
|
3,032
|
|
|
3,253
|
|
||
Total assets
|
$
|
1,770,385
|
|
|
$
|
1,886,042
|
|
Liabilities and equity
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Current portion of long-term debt
|
$
|
38
|
|
|
$
|
253
|
|
Accounts payable—trade
|
60,146
|
|
|
76,823
|
|
||
Accrued liabilities
|
55,824
|
|
|
58,563
|
|
||
Deferred revenue
|
8,751
|
|
|
7,283
|
|
||
Billings in excess of costs and profits recognized
|
1,604
|
|
|
8,631
|
|
||
Total current liabilities
|
126,363
|
|
|
151,553
|
|
||
Long-term debt, net of current portion
|
396,498
|
|
|
396,016
|
|
||
Deferred income taxes, net
|
39,093
|
|
|
51,100
|
|
||
Other long-term liabilities
|
30,341
|
|
|
29,956
|
|
||
Total liabilities
|
592,295
|
|
|
628,625
|
|
||
Commitments and contingencies (Note 12)
|
|
|
|
|
|||
Equity
|
|
|
|
||||
Common stock, $0.01 par value, 296,000,000 shares authorized, 99,550,209 and 98,605,902 shares issued
|
996
|
|
|
986
|
|
||
Additional paid-in capital
|
907,300
|
|
|
891,248
|
|
||
Treasury stock at cost, 8,159,887 and 8,145,802 shares
|
(133,611
|
)
|
|
(133,318
|
)
|
||
Retained earnings
|
510,683
|
|
|
580,152
|
|
||
Accumulated other comprehensive income (loss)
|
(107,831
|
)
|
|
(82,048
|
)
|
||
Total stockholders’ equity
|
1,177,537
|
|
|
1,257,020
|
|
||
Noncontrolling interest in subsidiary
|
553
|
|
|
397
|
|
||
Total equity
|
1,178,090
|
|
|
1,257,417
|
|
||
Total liabilities and equity
|
$
|
1,770,385
|
|
|
$
|
1,886,042
|
|
|
Nine Months Ended September 30,
|
||||||
(in thousands, except share information)
|
2016
|
|
2015
|
||||
Cash flows from operating activities
|
|
|
|
||||
Net income (loss)
|
$
|
(69,445
|
)
|
|
$
|
44,239
|
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities
|
|
|
|
||||
Depreciation expense
|
27,141
|
|
|
28,721
|
|
||
Amortization of intangible assets
|
19,709
|
|
|
20,558
|
|
||
Share-based compensation expense
|
15,521
|
|
|
17,090
|
|
||
Deferred income taxes
|
(12,988
|
)
|
|
(1,528
|
)
|
||
Deferred financing cost written off
|
2,588
|
|
|
—
|
|
||
Inventory write down
|
24,479
|
|
|
6,613
|
|
||
Earnings from equity investment, net of distributions
|
(804
|
)
|
|
(6,782
|
)
|
||
Other
|
4,137
|
|
|
4,523
|
|
||
Changes in operating assets and liabilities
|
|
|
|
||||
Accounts receivable—trade
|
35,673
|
|
|
129,601
|
|
||
Inventories
|
44,538
|
|
|
(31,342
|
)
|
||
Income tax receivable
|
(32,801
|
)
|
|
—
|
|
||
Prepaid expenses and other current assets
|
7,113
|
|
|
(2,019
|
)
|
||
Accounts payable, deferred revenue and other accrued liabilities
|
(15,130
|
)
|
|
(81,496
|
)
|
||
Costs and estimated profits in excess of billings, net
|
(5,511
|
)
|
|
(10,472
|
)
|
||
Net cash provided by operating activities
|
$
|
44,220
|
|
|
$
|
117,706
|
|
Cash flows from investing activities
|
|
|
|
||||
Acquisition of businesses, net of cash acquired
|
(2,700
|
)
|
|
(60,836
|
)
|
||
Capital expenditures for property and equipment
|
(13,438
|
)
|
|
(28,046
|
)
|
||
Proceeds from sale of property and equipment
|
3,710
|
|
|
1,699
|
|
||
Net cash used in investing activities
|
$
|
(12,428
|
)
|
|
$
|
(87,183
|
)
|
Cash flows from financing activities
|
|
|
|
||||
Borrowings under Credit Facility
|
—
|
|
|
79,943
|
|
||
Repayment of long-term debt
|
(254
|
)
|
|
(105,985
|
)
|
||
Excess tax benefits from stock based compensation
|
—
|
|
|
206
|
|
||
Repurchases of stock
|
(292
|
)
|
|
(6,246
|
)
|
||
Proceeds from stock issuance
|
1,761
|
|
|
4,618
|
|
||
Deferred financing costs
|
(513
|
)
|
|
—
|
|
||
Net cash provided by (used in) financing activities
|
$
|
702
|
|
|
$
|
(27,464
|
)
|
Effect of exchange rate changes on cash
|
(9,209
|
)
|
|
(3,453
|
)
|
||
Net increase (decrease) in cash and cash equivalents
|
23,285
|
|
|
(394
|
)
|
||
Cash and cash equivalents
|
|
|
|
||||
Beginning of period
|
109,249
|
|
|
76,579
|
|
||
End of period
|
$
|
132,534
|
|
|
$
|
76,185
|
|
|
|
2015 Acquisition
|
||
Current assets, net of cash acquired
|
|
$
|
36,174
|
|
Property and equipment
|
|
11,506
|
|
|
Intangible assets (primarily customer relationships)
|
|
10,400
|
|
|
Tax-deductible goodwill
|
|
13,977
|
|
|
Current liabilities
|
|
(10,129
|
)
|
|
Long-term liabilities
|
|
(22
|
)
|
|
Net assets acquired
|
|
$
|
61,906
|
|
|
September 30,
2016 |
|
December 31,
2015 |
||||
Raw materials and parts
|
$
|
117,882
|
|
|
$
|
148,372
|
|
Work in process
|
26,762
|
|
|
38,381
|
|
||
Finished goods
|
293,609
|
|
|
315,256
|
|
||
Gross inventories
|
438,253
|
|
|
502,009
|
|
||
Inventory reserve
|
(83,021
|
)
|
|
(77,888
|
)
|
||
Inventories
|
$
|
355,232
|
|
|
$
|
424,121
|
|
|
Drilling & Subsea
|
|
Completions
|
|
Production & Infrastructure
|
|
Total
|
||||||||
Goodwill Balance at December 31, 2015, net
|
$
|
334,595
|
|
|
$
|
316,914
|
|
|
$
|
17,527
|
|
|
$
|
669,036
|
|
Acquisitions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Impact of non-U.S. local currency translation
|
(9,602
|
)
|
|
1,353
|
|
|
189
|
|
|
(8,060
|
)
|
||||
Goodwill Balance at September 30, 2016, net
|
$
|
324,993
|
|
|
$
|
318,267
|
|
|
$
|
17,716
|
|
|
$
|
660,976
|
|
|
September 30, 2016
|
||||||||||||
|
Gross carrying
amount
|
|
Accumulated
amortization
|
|
Net amortizable
intangibles
|
|
Amortization
period (in years)
|
||||||
Customer relationships
|
$
|
274,533
|
|
|
$
|
(112,599
|
)
|
|
$
|
161,934
|
|
|
4-15
|
Patents and technology
|
34,514
|
|
|
(11,781
|
)
|
|
22,733
|
|
|
5-17
|
|||
Non-compete agreements
|
6,321
|
|
|
(5,598
|
)
|
|
723
|
|
|
3-6
|
|||
Trade names
|
45,001
|
|
|
(17,503
|
)
|
|
27,498
|
|
|
10-15
|
|||
Distributor relationships
|
22,160
|
|
|
(14,758
|
)
|
|
7,402
|
|
|
8-15
|
|||
Trademark
|
5,230
|
|
|
—
|
|
|
5,230
|
|
|
Indefinite
|
|||
Intangible Assets Total
|
$
|
387,759
|
|
|
$
|
(162,239
|
)
|
|
$
|
225,520
|
|
|
|
|
December 31, 2015
|
||||||||||||
|
Gross carrying
amount
|
|
Accumulated
amortization
|
|
Net amortizable
intangibles
|
|
Amortization
period (in years)
|
||||||
Customer relationships
|
$
|
280,297
|
|
|
$
|
(101,636
|
)
|
|
$
|
178,661
|
|
|
4-15
|
Patents and technology
|
34,140
|
|
|
(10,264
|
)
|
|
23,876
|
|
|
5-17
|
|||
Non-compete agreements
|
7,269
|
|
|
(6,292
|
)
|
|
977
|
|
|
3-6
|
|||
Trade names
|
45,446
|
|
|
(15,890
|
)
|
|
29,556
|
|
|
10-15
|
|||
Distributor relationships
|
22,160
|
|
|
(13,810
|
)
|
|
8,350
|
|
|
8-15
|
|||
Trademark
|
5,230
|
|
|
—
|
|
|
5,230
|
|
|
Indefinite
|
|||
Intangible Assets Total
|
$
|
394,542
|
|
|
$
|
(147,892
|
)
|
|
$
|
246,650
|
|
|
|
|
Three months ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Net revenues
|
$
|
17,099
|
|
|
$
|
26,033
|
|
|
$
|
49,851
|
|
|
$
|
81,513
|
|
Gross profit
|
3,684
|
|
|
11,731
|
|
|
12,082
|
|
|
36,505
|
|
||||
Net income
|
863
|
|
|
8,063
|
|
|
2,515
|
|
|
25,588
|
|
||||
The Company's earnings from equity investment
|
414
|
|
|
3,870
|
|
|
1,207
|
|
|
12,281
|
|
|
September 30,
2016 |
|
December 31,
2015 |
||||
6.25% Senior Notes due October 2021
|
$
|
400,000
|
|
|
$
|
400,000
|
|
Unamortized debt premium
|
2,091
|
|
|
2,395
|
|
||
Deferred financing cost
|
(5,599
|
)
|
|
(6,425
|
)
|
||
Senior secured revolving credit facility
|
—
|
|
|
—
|
|
||
Other debt
|
44
|
|
|
299
|
|
||
Total debt
|
396,536
|
|
|
396,269
|
|
||
Less: current maturities
|
38
|
|
|
253
|
|
||
Long-term debt
|
$
|
396,498
|
|
|
$
|
396,016
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
||||||||
Drilling & Subsea
|
$
|
50,830
|
|
|
$
|
110,849
|
|
|
$
|
172,859
|
|
|
$
|
404,121
|
|
Completions
|
33,549
|
|
|
55,627
|
|
|
92,320
|
|
|
222,465
|
|
||||
Production & Infrastructure
|
54,030
|
|
|
78,791
|
|
|
176,364
|
|
|
251,850
|
|
||||
Intersegment eliminations
|
(141
|
)
|
|
(274
|
)
|
|
(1,111
|
)
|
|
(932
|
)
|
||||
Total revenue
|
$
|
138,268
|
|
|
$
|
244,993
|
|
|
$
|
440,432
|
|
|
$
|
877,504
|
|
|
|
|
|
|
|
|
|
||||||||
Operating income (loss):
|
|
|
|
|
|
|
|
||||||||
Drilling & Subsea
|
$
|
(11,340
|
)
|
|
$
|
5,438
|
|
|
$
|
(41,696
|
)
|
|
$
|
35,569
|
|
Completions
|
(5,205
|
)
|
|
5,380
|
|
|
(39,687
|
)
|
|
36,805
|
|
||||
Production & Infrastructure
|
(713
|
)
|
|
6,572
|
|
|
494
|
|
|
23,995
|
|
||||
Corporate
|
(6,406
|
)
|
|
(4,993
|
)
|
|
(20,420
|
)
|
|
(21,337
|
)
|
||||
Total segment operating income (loss)
|
(23,664
|
)
|
|
12,397
|
|
|
(101,309
|
)
|
|
75,032
|
|
||||
Transaction expenses
|
341
|
|
|
193
|
|
|
571
|
|
|
433
|
|
||||
Loss (gain) on sale of assets and other
|
2,217
|
|
|
11
|
|
|
2,233
|
|
|
(264
|
)
|
||||
Income (loss) from operations
|
$
|
(26,222
|
)
|
|
$
|
12,193
|
|
|
$
|
(104,113
|
)
|
|
$
|
74,863
|
|
|
|
September 30,
2016 |
|
December 31,
2015 |
||||
Assets
|
|
|
|
|
||||
Drilling & Subsea
|
|
$
|
810,905
|
|
|
$
|
912,324
|
|
Completions
|
|
696,532
|
|
|
728,745
|
|
||
Production & Infrastructure
|
|
172,272
|
|
|
187,741
|
|
||
Corporate
|
|
90,676
|
|
|
57,232
|
|
||
Total assets
|
|
$
|
1,770,385
|
|
|
$
|
1,886,042
|
|
|
Three months ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Net Income (loss) attributable to common stockholders
|
$
|
(17,989
|
)
|
|
$
|
6,720
|
|
|
$
|
(69,469
|
)
|
|
$
|
44,266
|
|
|
|
|
|
|
|
|
|
||||||||
Average shares outstanding (basic)
|
90,860
|
|
|
90,058
|
|
|
90,682
|
|
|
89,770
|
|
||||
Common stock equivalents
|
—
|
|
|
1,629
|
|
|
—
|
|
|
1,806
|
|
||||
Diluted shares
|
90,860
|
|
|
91,687
|
|
|
90,682
|
|
|
91,576
|
|
||||
Earnings (losses) per share
|
|
|
|
|
|
|
|
||||||||
Basic earnings (losses) per share
|
$
|
(0.20
|
)
|
|
$
|
0.07
|
|
|
$
|
(0.77
|
)
|
|
$
|
0.49
|
|
Diluted earnings (losses) per share
|
$
|
(0.20
|
)
|
|
$
|
0.07
|
|
|
$
|
(0.77
|
)
|
|
$
|
0.48
|
|
Condensed consolidating statements of comprehensive income (loss)
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Three months ended September 30, 2016
|
||||||||||||||||||
|
|
FET (Parent)
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
|
|
|
|
(in thousands)
|
|
|
|
|
||||||||||
Revenue
|
|
$
|
—
|
|
|
$
|
101,357
|
|
|
$
|
44,869
|
|
|
$
|
(7,958
|
)
|
|
$
|
138,268
|
|
Cost of sales
|
|
—
|
|
|
81,250
|
|
|
36,767
|
|
|
(9,033
|
)
|
|
108,984
|
|
|||||
Gross profit
|
|
—
|
|
|
20,107
|
|
|
8,102
|
|
|
1,075
|
|
|
29,284
|
|
|||||
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Selling, general and administrative expenses
|
|
—
|
|
|
42,569
|
|
|
10,793
|
|
|
—
|
|
|
53,362
|
|
|||||
Transaction expenses
|
|
—
|
|
|
306
|
|
|
35
|
|
|
—
|
|
|
341
|
|
|||||
Loss (gain) on sale of assets and other
|
|
—
|
|
|
2,130
|
|
|
87
|
|
|
—
|
|
|
2,217
|
|
|||||
Total operating expenses
|
|
—
|
|
|
45,005
|
|
|
10,915
|
|
|
—
|
|
|
55,920
|
|
|||||
Earnings from equity investment
|
|
—
|
|
|
414
|
|
|
—
|
|
|
—
|
|
|
414
|
|
|||||
Equity earnings (losses) from affiliate, net of tax
|
|
(13,579
|
)
|
|
1,620
|
|
|
—
|
|
|
11,959
|
|
|
—
|
|
|||||
Operating income (loss)
|
|
(13,579
|
)
|
|
(22,864
|
)
|
|
(2,813
|
)
|
|
13,034
|
|
|
(26,222
|
)
|
|||||
Other expense (income)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense (income)
|
|
6,785
|
|
|
(84
|
)
|
|
45
|
|
|
—
|
|
|
6,746
|
|
|||||
Foreign exchange (gains) losses and other, net
|
|
—
|
|
|
(19
|
)
|
|
(3,133
|
)
|
|
—
|
|
|
(3,152
|
)
|
|||||
Total other expense (income)
|
|
6,785
|
|
|
(103
|
)
|
|
(3,088
|
)
|
|
—
|
|
|
3,594
|
|
|||||
Income (loss) before income taxes
|
|
(20,364
|
)
|
|
(22,761
|
)
|
|
275
|
|
|
13,034
|
|
|
(29,816
|
)
|
|||||
Provision (benefit) for income tax expense
|
|
(2,375
|
)
|
|
(9,182
|
)
|
|
(264
|
)
|
|
—
|
|
|
(11,821
|
)
|
|||||
Net income (loss)
|
|
(17,989
|
)
|
|
(13,579
|
)
|
|
539
|
|
|
13,034
|
|
|
(17,995
|
)
|
|||||
Less: Income (loss) attributable to noncontrolling interest
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
—
|
|
|
(6
|
)
|
|||||
Net income (loss) attributable to common stockholders
|
|
(17,989
|
)
|
|
(13,579
|
)
|
|
545
|
|
|
13,034
|
|
|
(17,989
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income (loss)
|
|
(17,989
|
)
|
|
(13,579
|
)
|
|
539
|
|
|
13,034
|
|
|
(17,995
|
)
|
|||||
Change in foreign currency translation, net of tax of $0
|
|
(6,243
|
)
|
|
(6,243
|
)
|
|
(6,243
|
)
|
|
12,486
|
|
|
(6,243
|
)
|
|||||
Change in pension liability
|
|
(14
|
)
|
|
(14
|
)
|
|
(14
|
)
|
|
28
|
|
|
(14
|
)
|
|||||
Comprehensive income (loss)
|
|
(24,246
|
)
|
|
(19,836
|
)
|
|
(5,718
|
)
|
|
25,548
|
|
|
(24,252
|
)
|
|||||
Less: comprehensive (income) loss attributable to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
(27
|
)
|
|
|
|
(27
|
)
|
||||||
Comprehensive income (loss) attributable to common stockholders
|
|
$
|
(24,246
|
)
|
|
$
|
(19,836
|
)
|
|
$
|
(5,745
|
)
|
|
$
|
25,548
|
|
|
$
|
(24,279
|
)
|
Condensed consolidating statements of comprehensive income (loss)
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Three months ended September 30, 2015
|
||||||||||||||||||
|
|
FET (Parent)
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
|
|
|
|
(in thousands)
|
|
|
|
|
||||||||||
Revenue
|
|
$
|
—
|
|
|
$
|
182,986
|
|
|
$
|
83,751
|
|
|
$
|
(21,744
|
)
|
|
$
|
244,993
|
|
Cost of sales
|
|
—
|
|
|
140,444
|
|
|
60,494
|
|
|
(21,707
|
)
|
|
179,231
|
|
|||||
Gross profit
|
|
—
|
|
|
42,542
|
|
|
23,257
|
|
|
(37
|
)
|
|
65,762
|
|
|||||
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Selling, general and administrative expenses
|
|
—
|
|
|
41,157
|
|
|
16,078
|
|
|
—
|
|
|
57,235
|
|
|||||
Transaction expenses
|
|
—
|
|
|
193
|
|
|
—
|
|
|
—
|
|
|
193
|
|
|||||
Loss (gain) on sale of assets and other
|
|
—
|
|
|
(15
|
)
|
|
26
|
|
|
—
|
|
|
11
|
|
|||||
Total operating expenses
|
|
—
|
|
|
41,335
|
|
|
16,104
|
|
|
—
|
|
|
57,439
|
|
|||||
Earnings from equity investment
|
|
—
|
|
|
3,870
|
|
|
—
|
|
|
—
|
|
|
3,870
|
|
|||||
Equity earnings from affiliates, net of tax
|
|
11,568
|
|
|
8,286
|
|
|
—
|
|
|
(19,854
|
)
|
|
—
|
|
|||||
Operating income (loss)
|
|
11,568
|
|
|
13,363
|
|
|
7,153
|
|
|
(19,891
|
)
|
|
12,193
|
|
|||||
Other expense (income)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense (income)
|
|
7,458
|
|
|
(1
|
)
|
|
(4
|
)
|
|
—
|
|
|
7,453
|
|
|||||
Foreign exchange (gains) losses and other, net
|
|
—
|
|
|
(253
|
)
|
|
(2,657
|
)
|
|
—
|
|
|
(2,910
|
)
|
|||||
Total other expense (income)
|
|
7,458
|
|
|
(254
|
)
|
|
(2,661
|
)
|
|
—
|
|
|
4,543
|
|
|||||
Income (loss) before income taxes
|
|
4,110
|
|
|
13,617
|
|
|
9,814
|
|
|
(19,891
|
)
|
|
7,650
|
|
|||||
Provision (benefit) for income tax expense
|
|
(2,610
|
)
|
|
2,049
|
|
|
1,493
|
|
|
—
|
|
|
932
|
|
|||||
Net income (loss)
|
|
6,720
|
|
|
11,568
|
|
|
8,321
|
|
|
(19,891
|
)
|
|
6,718
|
|
|||||
Less: Income (loss) attributable to noncontrolling interest
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
|||||
Net income (loss) attributable to common stockholders
|
|
6,720
|
|
|
11,568
|
|
|
8,323
|
|
|
(19,891
|
)
|
|
6,720
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income (loss)
|
|
6,720
|
|
|
11,568
|
|
|
8,321
|
|
|
(19,891
|
)
|
|
6,718
|
|
|||||
Change in foreign currency translation, net of tax of $0
|
|
(18,747
|
)
|
|
(18,747
|
)
|
|
(18,747
|
)
|
|
37,494
|
|
|
(18,747
|
)
|
|||||
Change in pension liability
|
|
(2
|
)
|
|
(2
|
)
|
|
(2
|
)
|
|
4
|
|
|
(2
|
)
|
|||||
Comprehensive income (loss)
|
|
(12,029
|
)
|
|
(7,181
|
)
|
|
(10,428
|
)
|
|
17,607
|
|
|
(12,031
|
)
|
|||||
Less: comprehensive (income) loss attributable to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
64
|
|
|
—
|
|
|
64
|
|
|||||
Comprehensive income (loss) attributable to common stockholders
|
|
$
|
(12,029
|
)
|
|
$
|
(7,181
|
)
|
|
$
|
(10,364
|
)
|
|
$
|
17,607
|
|
|
$
|
(11,967
|
)
|
Condensed consolidating statements of comprehensive income (loss)
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Nine months ended September 30, 2016
|
||||||||||||||||||
|
|
FET (Parent)
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
|
|
|
|
(in thousands)
|
|
|
|
|
||||||||||
Revenue
|
|
$
|
—
|
|
|
$
|
321,734
|
|
|
$
|
151,383
|
|
|
$
|
(32,685
|
)
|
|
$
|
440,432
|
|
Cost of sales
|
|
—
|
|
|
281,666
|
|
|
123,631
|
|
|
(33,987
|
)
|
|
371,310
|
|
|||||
Gross profit
|
|
—
|
|
|
40,068
|
|
|
27,752
|
|
|
1,302
|
|
|
69,122
|
|
|||||
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Selling, general and administrative expenses
|
|
—
|
|
|
137,099
|
|
|
34,539
|
|
|
—
|
|
|
171,638
|
|
|||||
Transaction expenses
|
|
—
|
|
|
536
|
|
|
35
|
|
|
—
|
|
|
571
|
|
|||||
Loss (gain) on sale of assets and other
|
|
—
|
|
|
2,310
|
|
|
(77
|
)
|
|
—
|
|
|
2,233
|
|
|||||
Total operating expenses
|
|
—
|
|
|
139,945
|
|
|
34,497
|
|
|
—
|
|
|
174,442
|
|
|||||
Earnings from equity investment
|
|
—
|
|
|
1,207
|
|
|
—
|
|
|
—
|
|
|
1,207
|
|
|||||
Equity earnings (losses) from affiliates, net of tax
|
|
(54,323
|
)
|
|
7,765
|
|
|
—
|
|
|
46,558
|
|
|
—
|
|
|||||
Operating income (loss)
|
|
(54,323
|
)
|
|
(90,905
|
)
|
|
(6,745
|
)
|
|
47,860
|
|
|
(104,113
|
)
|
|||||
Other expense (income)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense (income)
|
|
20,713
|
|
|
(97
|
)
|
|
48
|
|
|
—
|
|
|
20,664
|
|
|||||
Deferred loan costs written off
|
|
2,588
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,588
|
|
|||||
Foreign exchange (gains) losses and other, net
|
|
—
|
|
|
(553
|
)
|
|
(13,993
|
)
|
|
—
|
|
|
(14,546
|
)
|
|||||
Total other expense (income)
|
|
23,301
|
|
|
(650
|
)
|
|
(13,945
|
)
|
|
—
|
|
|
8,706
|
|
|||||
Income (loss) before income taxes
|
|
(77,624
|
)
|
|
(90,255
|
)
|
|
7,200
|
|
|
47,860
|
|
|
(112,819
|
)
|
|||||
Provision (benefit) for income tax expense
|
|
(8,155
|
)
|
|
(35,932
|
)
|
|
713
|
|
|
—
|
|
|
(43,374
|
)
|
|||||
Net income (loss)
|
|
(69,469
|
)
|
|
(54,323
|
)
|
|
6,487
|
|
|
47,860
|
|
|
(69,445
|
)
|
|||||
Less: Income (loss) attributable to noncontrolling interest
|
|
—
|
|
|
—
|
|
|
24
|
|
|
—
|
|
|
24
|
|
|||||
Net income (loss) attributable to common stockholders
|
|
(69,469
|
)
|
|
(54,323
|
)
|
|
6,463
|
|
|
47,860
|
|
|
(69,469
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income (loss)
|
|
(69,469
|
)
|
|
(54,323
|
)
|
|
6,487
|
|
|
47,860
|
|
|
(69,445
|
)
|
|||||
Change in foreign currency translation, net of tax of $0
|
|
(25,618
|
)
|
|
(25,618
|
)
|
|
(25,618
|
)
|
|
51,236
|
|
|
(25,618
|
)
|
|||||
Change in pension liability
|
|
(33
|
)
|
|
(33
|
)
|
|
(33
|
)
|
|
66
|
|
|
(33
|
)
|
|||||
Comprehensive income (loss)
|
|
(95,120
|
)
|
|
(79,974
|
)
|
|
(19,164
|
)
|
|
99,162
|
|
|
(95,096
|
)
|
|||||
Less: comprehensive (income) loss attributable to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
(156
|
)
|
|
—
|
|
|
(156
|
)
|
|||||
Comprehensive income (loss) attributable to common stockholders
|
|
$
|
(95,120
|
)
|
|
$
|
(79,974
|
)
|
|
$
|
(19,320
|
)
|
|
$
|
99,162
|
|
|
$
|
(95,252
|
)
|
Condensed consolidating statements of comprehensive income (loss)
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Nine months ended September 30, 2015
|
||||||||||||||||||
|
|
FET (Parent)
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
|
|
|
|
(in thousands)
|
|
|
|
|
||||||||||
Revenue
|
|
$
|
—
|
|
|
$
|
661,419
|
|
|
$
|
306,431
|
|
|
$
|
(90,346
|
)
|
|
$
|
877,504
|
|
Cost of sales
|
|
—
|
|
|
484,338
|
|
|
221,940
|
|
|
(88,545
|
)
|
|
617,733
|
|
|||||
Gross profit
|
|
—
|
|
|
177,081
|
|
|
84,491
|
|
|
(1,801
|
)
|
|
259,771
|
|
|||||
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Selling, general and administrative expenses
|
|
—
|
|
|
150,955
|
|
|
46,065
|
|
|
—
|
|
|
197,020
|
|
|||||
Transaction expenses
|
|
—
|
|
|
433
|
|
|
—
|
|
|
—
|
|
|
433
|
|
|||||
Loss (gain) on sale of assets and other
|
|
—
|
|
|
(73
|
)
|
|
(191
|
)
|
|
—
|
|
|
(264
|
)
|
|||||
Total operating expenses
|
|
—
|
|
|
151,315
|
|
|
45,874
|
|
|
—
|
|
|
197,189
|
|
|||||
Earnings from equity investment
|
|
—
|
|
|
12,281
|
|
|
—
|
|
|
—
|
|
|
12,281
|
|
|||||
Equity earnings from affiliates, net of tax
|
|
59,002
|
|
|
35,116
|
|
|
—
|
|
|
(94,118
|
)
|
|
—
|
|
|||||
Operating income (loss)
|
|
59,002
|
|
|
73,163
|
|
|
38,617
|
|
|
(95,919
|
)
|
|
74,863
|
|
|||||
Other expense (income)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense (income)
|
|
22,670
|
|
|
13
|
|
|
4
|
|
|
—
|
|
|
22,687
|
|
|||||
Foreign exchange (gains) losses and other, net
|
|
—
|
|
|
(407
|
)
|
|
(5,104
|
)
|
|
—
|
|
|
(5,511
|
)
|
|||||
Total other expense (income)
|
|
22,670
|
|
|
(394
|
)
|
|
(5,100
|
)
|
|
—
|
|
|
17,176
|
|
|||||
Income (loss) before income taxes
|
|
36,332
|
|
|
73,557
|
|
|
43,717
|
|
|
(95,919
|
)
|
|
57,687
|
|
|||||
Provision (benefit) for income tax expense
|
|
(7,934
|
)
|
|
14,555
|
|
|
6,827
|
|
|
—
|
|
|
13,448
|
|
|||||
Net income (loss)
|
|
44,266
|
|
|
59,002
|
|
|
36,890
|
|
|
(95,919
|
)
|
|
44,239
|
|
|||||
Less: Income (loss) attributable to noncontrolling interest
|
|
—
|
|
|
—
|
|
|
(27
|
)
|
|
—
|
|
|
(27
|
)
|
|||||
Net income (loss) attributable to common stockholders
|
|
44,266
|
|
|
59,002
|
|
|
36,917
|
|
|
(95,919
|
)
|
|
44,266
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income (loss)
|
|
44,266
|
|
|
59,002
|
|
|
36,890
|
|
|
(95,919
|
)
|
|
44,239
|
|
|||||
Change in foreign currency translation, net of tax of $0
|
|
(30,553
|
)
|
|
(30,553
|
)
|
|
(30,553
|
)
|
|
61,106
|
|
|
(30,553
|
)
|
|||||
Change in pension liability
|
|
68
|
|
|
68
|
|
|
68
|
|
|
(136
|
)
|
|
68
|
|
|||||
Comprehensive income (loss)
|
|
13,781
|
|
|
28,517
|
|
|
6,405
|
|
|
(34,949
|
)
|
|
13,754
|
|
|||||
Less: comprehensive (income) loss attributable to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
118
|
|
|
—
|
|
|
118
|
|
|||||
Comprehensive income (loss) attributable to common stockholders
|
|
$
|
13,781
|
|
|
$
|
28,517
|
|
|
$
|
6,523
|
|
|
$
|
(34,949
|
)
|
|
$
|
13,872
|
|
Condensed consolidating balance sheets
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
September 30, 2016
|
||||||||||||||||||
|
|
FET (Parent)
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
|
|
|
|
(in thousands)
|
|
|
|
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$
|
65
|
|
|
$
|
44,930
|
|
|
$
|
87,539
|
|
|
$
|
—
|
|
|
$
|
132,534
|
|
Accounts receivable—trade, net
|
|
—
|
|
|
66,272
|
|
|
33,983
|
|
|
—
|
|
|
100,255
|
|
|||||
Inventories
|
|
—
|
|
|
275,694
|
|
|
87,640
|
|
|
(8,102
|
)
|
|
355,232
|
|
|||||
Cost and profits in excess of billings
|
|
—
|
|
|
5,627
|
|
|
4,674
|
|
|
—
|
|
|
10,301
|
|
|||||
Income tax receivable
|
|
—
|
|
|
32,801
|
|
|
—
|
|
|
—
|
|
|
32,801
|
|
|||||
Other current assets
|
|
230
|
|
|
23,088
|
|
|
6,308
|
|
|
—
|
|
|
29,626
|
|
|||||
Total current assets
|
|
295
|
|
|
448,412
|
|
|
220,144
|
|
|
(8,102
|
)
|
|
660,749
|
|
|||||
Property and equipment, net of accumulated depreciation
|
|
—
|
|
|
132,087
|
|
|
27,366
|
|
|
—
|
|
|
159,453
|
|
|||||
Deferred financing costs, net
|
|
1,412
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,412
|
|
|||||
Deferred income taxes, net
|
|
—
|
|
|
—
|
|
|
720
|
|
|
—
|
|
|
720
|
|
|||||
Intangibles
|
|
—
|
|
|
171,488
|
|
|
54,032
|
|
|
—
|
|
|
225,520
|
|
|||||
Goodwill
|
|
—
|
|
|
481,374
|
|
|
179,602
|
|
|
—
|
|
|
660,976
|
|
|||||
Investment in unconsolidated subsidiary
|
|
—
|
|
|
58,523
|
|
|
—
|
|
|
—
|
|
|
58,523
|
|
|||||
Investment in affiliates
|
|
1,108,601
|
|
|
476,874
|
|
|
—
|
|
|
(1,585,475
|
)
|
|
—
|
|
|||||
Long-term advances to affiliates
|
|
476,656
|
|
|
—
|
|
|
61,774
|
|
|
(538,430
|
)
|
|
—
|
|
|||||
Other long-term assets
|
|
—
|
|
|
2,363
|
|
|
669
|
|
|
—
|
|
|
3,032
|
|
|||||
Total assets
|
|
$
|
1,586,964
|
|
|
$
|
1,771,121
|
|
|
$
|
544,307
|
|
|
$
|
(2,132,007
|
)
|
|
$
|
1,770,385
|
|
Liabilities and equity
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Current portion of long-term debt
|
|
$
|
—
|
|
|
$
|
28
|
|
|
$
|
10
|
|
|
$
|
—
|
|
|
$
|
38
|
|
Accounts payable—trade
|
|
—
|
|
|
43,463
|
|
|
16,683
|
|
|
—
|
|
|
60,146
|
|
|||||
Accrued liabilities
|
|
12,935
|
|
|
35,199
|
|
|
7,690
|
|
|
—
|
|
|
55,824
|
|
|||||
Deferred revenue
|
|
—
|
|
|
1,260
|
|
|
7,491
|
|
|
—
|
|
|
8,751
|
|
|||||
Billings in excess of costs and profits
|
|
—
|
|
|
457
|
|
|
1,147
|
|
|
—
|
|
|
1,604
|
|
|||||
Total current liabilities
|
|
12,935
|
|
|
80,407
|
|
|
33,021
|
|
|
—
|
|
|
126,363
|
|
|||||
Long-term debt, net of current portion
|
|
396,492
|
|
|
2
|
|
|
4
|
|
|
—
|
|
|
396,498
|
|
|||||
Long-term payables to affiliates
|
|
—
|
|
|
538,430
|
|
|
—
|
|
|
(538,430
|
)
|
|
—
|
|
|||||
Deferred income taxes, net
|
|
—
|
|
|
27,896
|
|
|
11,197
|
|
|
—
|
|
|
39,093
|
|
|||||
Other long-term liabilities
|
|
—
|
|
|
15,785
|
|
|
14,556
|
|
|
—
|
|
|
30,341
|
|
|||||
Total liabilities
|
|
409,427
|
|
|
662,520
|
|
|
58,778
|
|
|
(538,430
|
)
|
|
592,295
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total stockholder's equity
|
|
1,177,537
|
|
|
1,108,601
|
|
|
484,976
|
|
|
(1,593,577
|
)
|
|
1,177,537
|
|
|||||
Noncontrolling interest in subsidiary
|
|
—
|
|
|
—
|
|
|
553
|
|
|
—
|
|
|
553
|
|
|||||
Equity
|
|
1,177,537
|
|
|
1,108,601
|
|
|
485,529
|
|
|
(1,593,577
|
)
|
|
1,178,090
|
|
|||||
Total liabilities and equity
|
|
$
|
1,586,964
|
|
|
$
|
1,771,121
|
|
|
$
|
544,307
|
|
|
$
|
(2,132,007
|
)
|
|
$
|
1,770,385
|
|
Condensed consolidating balance sheets
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
December 31, 2015
|
||||||||||||||||||
|
|
FET (Parent)
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
|
|
|
|
(in thousands)
|
|
|
|
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$
|
—
|
|
|
$
|
36,884
|
|
|
$
|
72,365
|
|
|
$
|
—
|
|
|
$
|
109,249
|
|
Accounts receivable—trade, net
|
|
—
|
|
|
85,537
|
|
|
53,060
|
|
|
—
|
|
|
138,597
|
|
|||||
Inventories
|
|
—
|
|
|
318,360
|
|
|
115,165
|
|
|
(9,404
|
)
|
|
424,121
|
|
|||||
Cost and profits in excess of billings
|
|
—
|
|
|
6,477
|
|
|
5,532
|
|
|
—
|
|
|
12,009
|
|
|||||
Other current assets
|
|
—
|
|
|
25,447
|
|
|
8,389
|
|
|
—
|
|
|
33,836
|
|
|||||
Total current assets
|
|
—
|
|
|
472,705
|
|
|
254,511
|
|
|
(9,404
|
)
|
|
717,812
|
|
|||||
Property and equipment, net of accumulated depreciation
|
|
—
|
|
|
153,995
|
|
|
32,672
|
|
|
—
|
|
|
186,667
|
|
|||||
Deferred financing costs, net
|
|
4,125
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,125
|
|
|||||
Deferred income tax, net
|
|
—
|
|
|
—
|
|
|
780
|
|
|
—
|
|
|
780
|
|
|||||
Intangibles
|
|
—
|
|
|
186,234
|
|
|
60,416
|
|
|
—
|
|
|
246,650
|
|
|||||
Goodwill
|
|
—
|
|
|
481,374
|
|
|
187,662
|
|
|
—
|
|
|
669,036
|
|
|||||
Investment in unconsolidated subsidiary
|
|
—
|
|
|
57,719
|
|
|
—
|
|
|
—
|
|
|
57,719
|
|
|||||
Investment in affiliates
|
|
1,188,707
|
|
|
514,893
|
|
|
—
|
|
|
(1,703,600
|
)
|
|
—
|
|
|||||
Long-term advances to affiliates
|
|
467,184
|
|
|
—
|
|
|
60,221
|
|
|
(527,405
|
)
|
|
—
|
|
|||||
Other long-term assets
|
|
—
|
|
|
2,549
|
|
|
704
|
|
|
—
|
|
|
3,253
|
|
|||||
Total assets
|
|
$
|
1,660,016
|
|
|
$
|
1,869,469
|
|
|
$
|
596,966
|
|
|
$
|
(2,240,409
|
)
|
|
$
|
1,886,042
|
|
Liabilities and equity
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Current portion of long-term debt
|
|
$
|
—
|
|
|
$
|
243
|
|
|
$
|
10
|
|
|
$
|
—
|
|
|
$
|
253
|
|
Accounts payable—trade
|
|
$
|
—
|
|
|
$
|
57,529
|
|
|
$
|
19,294
|
|
|
$
|
—
|
|
|
$
|
76,823
|
|
Accrued liabilities
|
|
7,026
|
|
|
40,875
|
|
|
10,662
|
|
|
—
|
|
|
58,563
|
|
|||||
Deferred revenue
|
|
—
|
|
|
1,334
|
|
|
5,949
|
|
|
—
|
|
|
7,283
|
|
|||||
Billings in excess of costs and profits recognized
|
|
—
|
|
|
1,872
|
|
|
6,759
|
|
|
—
|
|
|
8,631
|
|
|||||
Total current liabilities
|
|
7,026
|
|
|
101,853
|
|
|
42,674
|
|
|
—
|
|
|
151,553
|
|
|||||
Long-term debt, net of current portion
|
|
395,970
|
|
|
34
|
|
|
12
|
|
|
—
|
|
|
396,016
|
|
|||||
Long-term payables to affiliates
|
|
—
|
|
|
527,406
|
|
|
—
|
|
|
(527,406
|
)
|
|
—
|
|
|||||
Deferred income taxes, net
|
|
—
|
|
|
36,937
|
|
|
14,163
|
|
|
—
|
|
|
51,100
|
|
|||||
Other long-term liabilities
|
|
—
|
|
|
14,533
|
|
|
15,423
|
|
|
—
|
|
|
29,956
|
|
|||||
Total liabilities
|
|
402,996
|
|
|
680,763
|
|
|
72,272
|
|
|
(527,406
|
)
|
|
628,625
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total stockholder's equity
|
|
1,257,020
|
|
|
1,188,706
|
|
|
524,297
|
|
|
(1,713,003
|
)
|
|
1,257,020
|
|
|||||
Noncontrolling interest in subsidiary
|
|
—
|
|
|
—
|
|
|
397
|
|
|
—
|
|
|
397
|
|
|||||
Equity
|
|
1,257,020
|
|
|
1,188,706
|
|
|
524,694
|
|
|
(1,713,003
|
)
|
|
1,257,417
|
|
|||||
Total liabilities and equity
|
|
$
|
1,660,016
|
|
|
$
|
1,869,469
|
|
|
$
|
596,966
|
|
|
$
|
(2,240,409
|
)
|
|
$
|
1,886,042
|
|
Condensed consolidating statements of cash flows
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Nine months ended September 30, 2016
|
||||||||||||||||||
|
|
FET (Parent)
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
|
|
|
|
(in thousands)
|
|
|
|
|
||||||||||
Cash flows from (used in) operating activities
|
|
$
|
(6,940
|
)
|
|
$
|
20,042
|
|
|
$
|
51,118
|
|
|
$
|
(20,000
|
)
|
|
$
|
44,220
|
|
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Acquisition of businesses, net of cash acquired
|
|
—
|
|
|
(2,700
|
)
|
|
—
|
|
|
—
|
|
|
(2,700
|
)
|
|||||
Capital expenditures for property and equipment
|
|
—
|
|
|
(9,530
|
)
|
|
(3,908
|
)
|
|
—
|
|
|
(13,438
|
)
|
|||||
Long-term loans and advances to affiliates
|
|
6,049
|
|
|
3,148
|
|
|
—
|
|
|
(9,197
|
)
|
|
—
|
|
|||||
Other
|
|
—
|
|
|
3,389
|
|
|
321
|
|
|
—
|
|
|
3,710
|
|
|||||
Net cash provided by (used in) investing activities
|
|
$
|
6,049
|
|
|
$
|
(5,693
|
)
|
|
$
|
(3,587
|
)
|
|
$
|
(9,197
|
)
|
|
$
|
(12,428
|
)
|
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Borrowings (repayment) of long-term debt
|
|
—
|
|
|
(254
|
)
|
|
—
|
|
|
—
|
|
|
(254
|
)
|
|||||
Long-term loans and advances to affiliates
|
|
—
|
|
|
(6,049
|
)
|
|
(3,148
|
)
|
|
9,197
|
|
|
—
|
|
|||||
Dividend paid to affiliates
|
|
—
|
|
|
—
|
|
|
(20,000
|
)
|
|
20,000
|
|
|
—
|
|
|||||
Other
|
|
956
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
956
|
|
|||||
Net cash provided by (used in) financing activities
|
|
$
|
956
|
|
|
$
|
(6,303
|
)
|
|
$
|
(23,148
|
)
|
|
$
|
29,197
|
|
|
$
|
702
|
|
Effect of exchange rate changes on cash
|
|
—
|
|
|
—
|
|
|
(9,209
|
)
|
|
—
|
|
|
(9,209
|
)
|
|||||
Net increase (decrease) in cash and cash equivalents
|
|
65
|
|
|
8,046
|
|
|
15,174
|
|
|
—
|
|
|
23,285
|
|
|||||
Cash and cash equivalents
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Beginning of period
|
|
—
|
|
|
36,884
|
|
|
72,365
|
|
|
—
|
|
|
109,249
|
|
|||||
End of period
|
|
$
|
65
|
|
|
$
|
44,930
|
|
|
$
|
87,539
|
|
|
$
|
—
|
|
|
$
|
132,534
|
|
Condensed consolidating statements of cash flows
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Nine months ended September 30, 2015
|
||||||||||||||||||
|
|
FET (Parent)
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
|
|
|
|
(in thousands)
|
|
|
|
|
||||||||||
Cash flows from (used in) operating activities
|
|
$
|
(6,543
|
)
|
|
$
|
79,698
|
|
|
$
|
44,551
|
|
|
$
|
—
|
|
|
$
|
117,706
|
|
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Acquisition of businesses, net of cash acquired
|
|
—
|
|
|
(60,836
|
)
|
|
—
|
|
|
—
|
|
|
(60,836
|
)
|
|||||
Capital expenditures for property and equipment
|
|
—
|
|
|
(19,858
|
)
|
|
(8,188
|
)
|
|
—
|
|
|
(28,046
|
)
|
|||||
Long-term loans and advances to affiliates
|
|
27,719
|
|
|
40,544
|
|
|
—
|
|
|
(68,263
|
)
|
|
—
|
|
|||||
Other
|
|
—
|
|
|
992
|
|
|
707
|
|
|
—
|
|
|
1,699
|
|
|||||
Net cash provided by (used in) investing activities
|
|
$
|
27,719
|
|
|
$
|
(39,158
|
)
|
|
$
|
(7,481
|
)
|
|
$
|
(68,263
|
)
|
|
$
|
(87,183
|
)
|
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Repayment of long-term debt
|
|
(25,305
|
)
|
|
(723
|
)
|
|
(14
|
)
|
|
—
|
|
|
(26,042
|
)
|
|||||
Long-term loans and advances to affiliates
|
|
—
|
|
|
(27,719
|
)
|
|
(40,544
|
)
|
|
68,263
|
|
|
—
|
|
|||||
Other
|
|
(1,422
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,422
|
)
|
|||||
Net cash provided by (used in) financing activities
|
|
$
|
(26,727
|
)
|
|
$
|
(28,442
|
)
|
|
$
|
(40,558
|
)
|
|
$
|
68,263
|
|
|
$
|
(27,464
|
)
|
Effect of exchange rate changes on cash
|
|
—
|
|
|
—
|
|
|
(3,453
|
)
|
|
—
|
|
|
(3,453
|
)
|
|||||
Net increase (decrease) in cash and cash equivalents
|
|
(5,551
|
)
|
|
12,098
|
|
|
(6,941
|
)
|
|
—
|
|
|
(394
|
)
|
|||||
Cash and cash equivalents
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Beginning of period
|
|
5,551
|
|
|
4,006
|
|
|
67,022
|
|
|
—
|
|
|
76,579
|
|
|||||
End of period
|
|
$
|
—
|
|
|
$
|
16,104
|
|
|
$
|
60,081
|
|
|
$
|
—
|
|
|
$
|
76,185
|
|
•
|
Drilling & Subsea segment
. This segment designs and manufactures products and provides related services to the drilling and subsea construction and services markets. The products and related services consist primarily of: (i) capital equipment and a broad line of expendable drilling products consumed in the drilling process; and (ii) subsea capital equipment, specialty components and tooling, products used in subsea pipeline infrastructure, and a broad suite of complementary subsea technical services and rental items.
|
•
|
Completions segment.
This segment designs, manufactures and supplies products and provides related services to the well construction, completion, stimulation and intervention markets. The products and related services consist primarily of: (i) well construction casing and cementing equipment, cable protectors used in completions, composite plugs used for zonal isolation in hydraulic fracturing and wireline flow-control products; and (ii) capital and consumable products sold to the pressure pumping, hydraulic fracturing and flowback services markets, including hydraulic fracturing pumps, pump consumables and flow iron as well as coiled tubing, wireline cable, and pressure control equipment used in the well completion and intervention service markets.
|
•
|
Production & Infrastructure segment
. This segment designs, manufactures and supplies products and provides related equipment and services for production and infrastructure markets. The products and related services consist primarily of: (i) engineered process systems, production equipment and related field services, as well as desalinization equipment; and (ii) a wide range of industrial valves focused on serving upstream, midstream, and downstream oil and natural gas customers.
|
|
|
Three months ended
|
||||||||||
|
|
September 30,
|
|
June 30,
|
|
September 30,
|
||||||
|
|
2016
|
|
2016
|
|
2015
|
||||||
Average Global Oil, $/bbl
|
|
|
|
|
|
|
||||||
West Texas Intermediate
|
|
$
|
44.85
|
|
|
$
|
45.46
|
|
|
$
|
46.53
|
|
United Kingdom Brent
|
|
$
|
45.80
|
|
|
$
|
45.57
|
|
|
$
|
50.54
|
|
|
|
|
|
|
|
|
||||||
Average North American Natural Gas, $/Mcf
|
|
|
|
|
|
|
||||||
Henry Hub
|
|
$
|
2.88
|
|
|
$
|
2.15
|
|
|
$
|
2.76
|
|
|
|
Three months ended
|
|||||||
|
|
September 30,
|
|
June 30,
|
|
September 30,
|
|||
|
|
2016
|
|
2016
|
|
2015
|
|||
Active Rigs by Location
|
|
|
|
|
|
|
|||
United States
|
|
479
|
|
|
422
|
|
|
866
|
|
Canada
|
|
121
|
|
|
48
|
|
|
188
|
|
International
|
|
936
|
|
|
943
|
|
|
1,131
|
|
Global Active Rigs
|
|
1,536
|
|
|
1,413
|
|
|
2,185
|
|
|
|
|
|
|
|
|
|||
Land vs. Offshore Rigs
|
|
|
|
|
|
|
|||
Land
|
|
1,291
|
|
|
1,164
|
|
|
1,883
|
|
Offshore
|
|
245
|
|
|
249
|
|
|
302
|
|
Global Active Rigs
|
|
1,536
|
|
|
1,413
|
|
|
2,185
|
|
|
|
|
|
|
|
|
|||
U.S. Commodity Target
|
|
|
|
|
|
|
|||
Oil/Gas
|
|
389
|
|
|
334
|
|
|
657
|
|
Gas
|
|
88
|
|
|
87
|
|
|
208
|
|
Unclassified
|
|
2
|
|
|
1
|
|
|
1
|
|
Total U.S. Active Rigs
|
|
479
|
|
|
422
|
|
|
866
|
|
|
|
|
|
|
|
|
|||
U.S. Well Path
|
|
|
|
|
|
|
|||
Horizontal
|
|
372
|
|
|
326
|
|
|
658
|
|
Vertical
|
|
62
|
|
|
51
|
|
|
123
|
|
Directional
|
|
45
|
|
|
45
|
|
|
85
|
|
Total U.S. Active Rigs
|
|
479
|
|
|
422
|
|
|
866
|
|
(in millions of dollars)
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Orders:
|
|
|
|
|
|
|
|
||||||||
Drilling & Subsea
|
$
|
46.9
|
|
|
$
|
78.2
|
|
|
$
|
151.8
|
|
|
$
|
281.9
|
|
Completions
|
32.7
|
|
|
53.1
|
|
|
91.2
|
|
|
187.9
|
|
||||
Production & Infrastructure
|
65.6
|
|
|
81.7
|
|
|
171.5
|
|
|
229.2
|
|
||||
Total Orders
|
$
|
145.2
|
|
|
$
|
213.0
|
|
|
$
|
414.5
|
|
|
$
|
699.0
|
|
|
Nine Months Ended September 30,
|
||||||
|
2016
|
|
2015
|
||||
Net cash provided by operating activities
|
$
|
44.2
|
|
|
$
|
117.7
|
|
Net cash used in investing activities
|
(12.4
|
)
|
|
(87.2
|
)
|
||
Net cash provided by (used in) financing activities
|
0.7
|
|
|
(27.5
|
)
|
||
Net increase (decrease) in cash and cash equivalents
|
$
|
23.3
|
|
|
$
|
(0.4
|
)
|
Period
|
|
Total number of shares purchased (a)
|
|
Average price paid per share
|
|
Total number of shares purchased as part of publicly announced plan or programs
|
|
Maximum value of shares that may yet be purchased under the plan or program
(in thousands)
|
||||||
July 1, 2016 - July 31, 2016
|
|
2,866
|
|
|
$
|
17.57
|
|
|
—
|
|
|
$
|
49,752
|
|
August 1, 2016 - August 31, 2016
|
|
2,487
|
|
|
$
|
17.82
|
|
|
—
|
|
|
—
|
|
|
September 1, 2016 - September 30, 2016
|
|
308
|
|
|
$
|
18.21
|
|
|
—
|
|
|
—
|
|
|
Total
|
|
5,661
|
|
|
$
|
17.71
|
|
|
—
|
|
|
$
|
49,752
|
|
Exhibit
|
|
|
Number
|
|
DESCRIPTION
|
|
|
|
10.1*
|
—
|
Form of Restricted Stock Unit Agreement (Employees and Consultants).
|
|
|
|
31.1*
|
—
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
31.2*
|
—
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
32.1**
|
—
|
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
32.2**
|
—
|
Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
101.INS*
|
—
|
XBRL Instance Document.
|
|
|
|
101.SCH*
|
—
|
XBRL Taxonomy Extension Schema Document.
|
|
|
|
101.CAL*
|
—
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
|
|
101.LAB*
|
—
|
XBRL Taxonomy Extension Label Linkbase Document.
|
|
|
|
101.PRE*
|
—
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
|
|
|
101.DEF*
|
—
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
|
|
|
|
|
|
|
|
FORUM ENERGY TECHNOLOGIES, INC.
|
|
||
Date:
|
November 2, 2016
|
By:
|
/s/ James W. Harris
|
|
|
|
|
|
James W. Harris
|
|
|
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
|
|
(As Duly Authorized Officer and Principal Financial Officer)
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Tylar K. Schmitt
|
|
|
|
|
|
Tylar K. Schmitt
|
|
|
|
|
|
Vice President and Chief Accounting Officer
|
|
|
|
|
|
(As Duly Authorized Officer and Principal Accounting Officer)
|
|
Vesting Date
|
|
Additional Percentage of Total Number of RSUs Vesting on Vesting Date
|
First Anniversary of Date of Grant
|
|
25%
|
Second Anniversary of Date of Grant
|
|
25%
|
Third Anniversary of Date of Grant
|
|
25%
|
Fourth Anniversary of Date of Grant
|
|
25%
|
|
|
|
FORUM ENERGY TECHNOLOGIES, INC.
|
|
|
|
|
|
|
|
By:
|
|
|
|
C. Christopher Gaut
|
|
|
|
Chairman, President and CEO
|
|
|
|
|
|
|
|
EMPLOYEE
|
|
|
|
|
|
|
|
|
1.
|
I have reviewed this
quarterly report on Form 10-Q
of Forum Energy Technologies, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
November 2, 2016
|
|
By:
/s/ C. Christopher Gaut
|
|
|
|
C. Christopher Gaut
|
|
|
|
Chief Executive Officer
|
1.
|
I have reviewed this
quarterly report on Form 10-Q
of Forum Energy Technologies, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
November 2, 2016
|
|
By:
_/s/ James W. Harris
_________________
|
|
|
|
James W. Harris
|
|
|
|
Chief Financial Officer
|
Dated:
|
November 2, 2016
|
|
By:
/s/ C. Christopher Gaut
|
|
|
|
C. Christopher Gaut
|
|
|
|
Chief Executive Officer
|
Dated:
|
November 2, 2016
|
|
By:
/s/ James W. Harris
|
|
|
|
James W. Harris
|
|
|
|
Chief Financial Officer
|