þ
|
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
For the Quarterly Period Ended March 31, 2018
|
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
|
|
(Do not check if a smaller reporting company)
|
Smaller reporting company
o
|
|
Emerging growth company
o
|
|
Three months ended March 31,
|
||||||
(in thousands, except per share information)
|
2018
|
|
2017
|
||||
Revenue
|
$
|
250,231
|
|
|
$
|
171,096
|
|
Cost of sales
|
182,944
|
|
|
132,117
|
|
||
Gross profit
|
67,287
|
|
|
38,979
|
|
||
Operating expenses
|
|
|
|
||||
Selling, general and administrative expenses
|
72,091
|
|
|
60,674
|
|
||
Transaction expenses
|
1,336
|
|
|
628
|
|
||
Gain on disposal of assets and other
|
(397
|
)
|
|
(246
|
)
|
||
Total operating expenses
|
73,030
|
|
|
61,056
|
|
||
Earnings (loss) from equity investment
|
(963
|
)
|
|
1,462
|
|
||
Operating loss
|
(6,706
|
)
|
|
(20,615
|
)
|
||
Other expense (income)
|
|
|
|
||||
Interest expense
|
8,087
|
|
|
6,580
|
|
||
Foreign exchange losses and other, net
|
3,551
|
|
|
1,546
|
|
||
Gain on contribution of subsea rentals business
|
(33,506
|
)
|
|
—
|
|
||
Total other (income) expense, net
|
(21,868
|
)
|
|
8,126
|
|
||
Income (loss) before income taxes
|
15,162
|
|
|
(28,741
|
)
|
||
Income tax benefit
|
(12,904
|
)
|
|
(12,973
|
)
|
||
Net income (loss)
|
28,066
|
|
|
(15,768
|
)
|
||
|
|
|
|
||||
Weighted average shares outstanding
|
|
|
|
||||
Basic
|
108,423
|
|
|
95,860
|
|
||
Diluted
|
110,857
|
|
|
95,860
|
|
||
Earnings (loss) per share
|
|
|
|
||||
Basic
|
$
|
0.26
|
|
|
$
|
(0.16
|
)
|
Diluted
|
0.25
|
|
|
(0.16
|
)
|
||
|
|
|
|
||||
Other comprehensive income (loss), net of tax:
|
|
|
|
||||
Net income (loss)
|
28,066
|
|
|
(15,768
|
)
|
||
Change in foreign currency translation, net of tax of $0
|
6,287
|
|
|
7,222
|
|
||
Gain (loss) on pension liability
|
16
|
|
|
(15
|
)
|
||
Comprehensive income (loss)
|
34,369
|
|
|
(8,561
|
)
|
(in thousands, except share information)
|
March 31,
2018 |
|
December 31,
2017 |
||||
Assets
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
42,340
|
|
|
$
|
115,216
|
|
Accounts receivable—trade, net
|
194,949
|
|
|
202,914
|
|
||
Inventories, net
|
468,896
|
|
|
443,177
|
|
||
Prepaid expenses and other current assets
|
32,863
|
|
|
19,490
|
|
||
Accrued revenue
|
2,860
|
|
|
—
|
|
||
Costs and estimated profits in excess of billings
|
12,056
|
|
|
9,584
|
|
||
Total current assets
|
753,964
|
|
|
790,381
|
|
||
Property and equipment, net of accumulated depreciation
|
184,526
|
|
|
197,281
|
|
||
Deferred financing costs, net
|
2,692
|
|
|
2,900
|
|
||
Intangible assets
|
426,744
|
|
|
443,064
|
|
||
Goodwill
|
757,801
|
|
|
755,245
|
|
||
Investment in unconsolidated subsidiary
|
43,086
|
|
|
—
|
|
||
Deferred income taxes, net
|
4,015
|
|
|
3,344
|
|
||
Other long-term assets
|
9,677
|
|
|
3,013
|
|
||
Total assets
|
$
|
2,182,505
|
|
|
$
|
2,195,228
|
|
Liabilities and equity
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Current portion of long-term debt
|
$
|
1,133
|
|
|
$
|
1,156
|
|
Accounts payable—trade
|
143,897
|
|
|
137,684
|
|
||
Accrued liabilities
|
62,756
|
|
|
66,765
|
|
||
Deferred revenue
|
8,614
|
|
|
8,819
|
|
||
Billings in excess of costs and profits recognized
|
816
|
|
|
1,881
|
|
||
Total current liabilities
|
217,216
|
|
|
216,305
|
|
||
Long-term debt, net of current portion
|
456,577
|
|
|
506,750
|
|
||
Deferred income taxes, net
|
29,168
|
|
|
31,232
|
|
||
Other long-term liabilities
|
32,688
|
|
|
31,925
|
|
||
Total liabilities
|
735,649
|
|
|
786,212
|
|
||
Commitments and contingencies
|
|
|
|
|
|||
Equity
|
|
|
|
||||
Common stock, $0.01 par value, 296,000,000 shares authorized, 117,030,329 and 116,343,656 shares issued
|
1,170
|
|
|
1,163
|
|
||
Additional paid-in capital
|
1,199,875
|
|
|
1,195,339
|
|
||
Treasury stock at cost, 8,195,192 and 8,190,362 shares
|
(134,359
|
)
|
|
(134,293
|
)
|
||
Retained earnings
|
465,834
|
|
|
438,774
|
|
||
Accumulated other comprehensive loss
|
(85,664
|
)
|
|
(91,967
|
)
|
||
Total equity
|
1,446,856
|
|
|
1,409,016
|
|
||
Total liabilities and equity
|
$
|
2,182,505
|
|
|
$
|
2,195,228
|
|
|
Three months ended March 31,
|
||||||
(in thousands, except share information)
|
2018
|
|
2017
|
||||
Cash flows from operating activities
|
|
|
|
||||
Net income (loss)
|
$
|
28,066
|
|
|
$
|
(15,768
|
)
|
Adjustments to reconcile net income (loss) to net cash used in operating activities:
|
|
|
|
||||
Depreciation expense
|
8,158
|
|
|
8,999
|
|
||
Amortization of intangible assets
|
10,500
|
|
|
6,523
|
|
||
Inventory write down
|
2,455
|
|
|
531
|
|
||
Share-based compensation expense
|
5,302
|
|
|
4,665
|
|
||
(Earnings) loss from unconsolidated subsidiary, net of distributions
|
963
|
|
|
(1,462
|
)
|
||
Gain on contribution of subsea rentals business
|
(33,506
|
)
|
|
—
|
|
||
Deferred income taxes
|
(2,735
|
)
|
|
(13,787
|
)
|
||
Other
|
531
|
|
|
698
|
|
||
Changes in operating assets and liabilities
|
|
|
|
||||
Accounts receivable—trade
|
3,034
|
|
|
(19,596
|
)
|
||
Inventories
|
(27,363
|
)
|
|
(6,127
|
)
|
||
Prepaid expenses and other assets
|
(16,770
|
)
|
|
4,586
|
|
||
Cost and estimated profit in excess of billings
|
(3,420
|
)
|
|
1,611
|
|
||
Accounts payable, deferred revenue and other accrued liabilities
|
6,528
|
|
|
16,298
|
|
||
Billings in excess of costs and estimated profits earned
|
$
|
(1,065
|
)
|
|
$
|
(2,177
|
)
|
Net cash used in operating activities
|
$
|
(19,322
|
)
|
|
$
|
(15,006
|
)
|
Cash flows from investing activities
|
|
|
|
||||
Capital expenditures for property and equipment
|
(5,080
|
)
|
|
(3,468
|
)
|
||
Acquisition of businesses, net of cash acquired
|
—
|
|
|
(8,738
|
)
|
||
Investment in unconsolidated subsidiary
|
$
|
—
|
|
|
$
|
(1,041
|
)
|
Proceeds from sale of business, property and equipment
|
5,074
|
|
|
40
|
|
||
Net cash used in investing activities
|
$
|
(6
|
)
|
|
$
|
(13,207
|
)
|
Cash flows from financing activities
|
|
|
|
||||
Repayments of debt
|
(50,729
|
)
|
|
(891
|
)
|
||
Repurchases of stock
|
(1,946
|
)
|
|
(4,403
|
)
|
||
Proceeds from stock issuance
|
—
|
|
|
1,757
|
|
||
Net cash used in financing activities
|
$
|
(52,675
|
)
|
|
$
|
(3,537
|
)
|
|
|
|
|
||||
Effect of exchange rate changes on cash
|
(873
|
)
|
|
2,242
|
|
||
|
|
|
|
||||
Net decrease in cash, cash equivalents and restricte
d cash
|
(72,876
|
)
|
|
(29,508
|
)
|
||
Cash, cash equivalents and restricted cash at beginning of period
|
115,216
|
|
|
234,422
|
|
||
Cash, cash equivalents and restricted cash at end of period
|
$
|
42,340
|
|
|
$
|
204,914
|
|
|
|
|
|
||||
Noncash investing activities
|
|
|
|
||||
Acquisition via issuance of stock
|
$
|
—
|
|
|
$
|
4,500
|
|
Assets contributed for equity method investment
|
$
|
18,070
|
|
|
$
|
—
|
|
Note receivable related to equity method investment transaction
|
$
|
4,067
|
|
|
$
|
—
|
|
|
As Reported
|
|
Adjustments due to
|
|
As Adjusted
|
||||||
(in thousands, unaudited)
|
Dec. 31, 2017
|
|
ASC 606
|
|
Jan. 1, 2018
|
||||||
Accounts receivable—trade, net
|
$
|
202,914
|
|
|
$
|
(3,235
|
)
|
|
$
|
199,679
|
|
Accrued revenue
|
—
|
|
|
3,235
|
|
|
3,235
|
|
|
Three Months Ended March 31, 2018
|
||||||||||
(in thousands, unaudited)
|
As Reported
|
|
Amount Without Adoption of ASC 606
|
|
Effect of Change
Higher/(Lower) |
||||||
Income Statement
|
|
|
|
|
|
||||||
Revenue
|
$
|
250,231
|
|
|
$
|
249,868
|
|
|
$
|
363
|
|
Cost of sales
|
182,944
|
|
|
182,529
|
|
|
415
|
|
|||
Gross profit
|
$
|
67,287
|
|
|
$
|
67,339
|
|
|
$
|
(52
|
)
|
|
|
|
|
|
|
||||||
Balance Sheet
|
|
|
|
|
|
||||||
Accounts receivable—trade, net
|
$
|
194,949
|
|
|
$
|
197,809
|
|
|
$
|
(2,860
|
)
|
Accrued revenue
|
2,860
|
|
|
—
|
|
|
2,860
|
|
|||
Inventories, net
|
468,896
|
|
|
469,311
|
|
|
(415
|
)
|
|||
Costs and estimated profits in excess of billings
|
12,056
|
|
|
11,693
|
|
|
363
|
|
|||
Retained earnings
|
465,834
|
|
|
465,886
|
|
|
(52
|
)
|
|
Purchase Consideration
|
||
Forum Energy Technologies' closing stock price on October 2, 2017
|
$
|
15.10
|
|
Multiplied by number of shares issued for acquisition
|
11,488,208
|
|
|
Value of common shares
|
$
|
173,472
|
|
Cash
|
31,764
|
|
|
Repayment of Global Tubing debt at acquisition
|
85,084
|
|
|
Total consideration paid for the acquisition
|
$
|
290,320
|
|
Accounts receivable
|
$
|
28,044
|
|
Inventory
|
40,005
|
|
|
Other current assets
|
3,141
|
|
|
Property and equipment
|
51,585
|
|
|
Intangible assets (primarily developed technologies and customer relationships)
|
228,190
|
|
|
Tax-deductible goodwill
|
69,423
|
|
|
Non-tax deductible goodwill
|
64,491
|
|
|
Current liabilities
|
(16,005
|
)
|
|
Long term liabilities
|
(54
|
)
|
|
Total net assets
|
468,820
|
|
|
Fair value of equity method investment previously held
|
(178,500
|
)
|
|
Net assets acquired
|
$
|
290,320
|
|
Current assets, net of cash acquired
|
$
|
3,763
|
|
Property and equipment
|
96
|
|
|
Intangible assets (primarily customer relationships)
|
17,090
|
|
|
Tax-Deductible Goodwill
|
16,472
|
|
|
Non-tax Deductible Goodwill
|
3,099
|
|
|
Current liabilities
|
(1,329
|
)
|
|
Net assets acquired
|
$
|
39,191
|
|
|
March 31,
2018 |
|
December 31,
2017 |
||||
Raw materials and parts
|
$
|
176,424
|
|
|
$
|
160,093
|
|
Work in process
|
53,308
|
|
|
51,941
|
|
||
Finished goods
|
310,581
|
|
|
305,461
|
|
||
Gross inventories
|
540,313
|
|
|
517,495
|
|
||
Inventory reserve
|
(71,417
|
)
|
|
(74,318
|
)
|
||
Inventories
|
$
|
468,896
|
|
|
$
|
443,177
|
|
|
Drilling & Subsea
|
|
Completions
|
|
Production & Infrastructure
|
|
Total
|
||||||||
Goodwill Balance at December 31, 2017
|
$
|
251,454
|
|
|
$
|
484,345
|
|
|
$
|
19,446
|
|
|
$
|
755,245
|
|
Impact of non-U.S. local currency translation
|
2,668
|
|
|
(30
|
)
|
|
(82
|
)
|
|
2,556
|
|
||||
Goodwill Balance at March 31, 2018
|
$
|
254,122
|
|
|
$
|
484,315
|
|
|
$
|
19,364
|
|
|
$
|
757,801
|
|
|
March 31, 2018
|
||||||||||||
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Amortizable Intangibles
|
|
Amortization Period (In Years)
|
||||||
Customer relationships
|
$
|
413,942
|
|
|
$
|
(135,125
|
)
|
|
$
|
278,817
|
|
|
4-15
|
Patents and technology
|
112,695
|
|
|
(19,160
|
)
|
|
93,535
|
|
|
5-17
|
|||
Non-compete agreements
|
6,183
|
|
|
(5,726
|
)
|
|
457
|
|
|
3-6
|
|||
Trade names
|
61,808
|
|
|
(23,528
|
)
|
|
38,280
|
|
|
10-15
|
|||
Distributor relationships
|
22,160
|
|
|
(16,654
|
)
|
|
5,506
|
|
|
8-15
|
|||
Trademarks
|
10,319
|
|
|
(170
|
)
|
|
10,149
|
|
|
15 - Indefinite
|
|||
Intangible Assets Total
|
$
|
627,107
|
|
|
$
|
(200,363
|
)
|
|
$
|
426,744
|
|
|
|
|
December 31, 2017
|
||||||||||||
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Amortizable Intangibles
|
|
Amortization Period (In Years)
|
||||||
Customer relationships
|
$
|
428,544
|
|
|
$
|
(138,566
|
)
|
|
$
|
289,978
|
|
|
4-15
|
Patents and technology
|
110,910
|
|
|
(16,733
|
)
|
|
94,177
|
|
|
5-17
|
|||
Non-compete agreements
|
6,625
|
|
|
(6,041
|
)
|
|
584
|
|
|
3-6
|
|||
Trade names
|
64,359
|
|
|
(22,090
|
)
|
|
42,269
|
|
|
10-15
|
|||
Distributor relationships
|
22,160
|
|
|
(16,338
|
)
|
|
5,822
|
|
|
8-15
|
|||
Trademarks
|
10,319
|
|
|
(85
|
)
|
|
10,234
|
|
|
15 - Indefinite
|
|||
Intangible Assets Total
|
$
|
642,917
|
|
|
$
|
(199,853
|
)
|
|
$
|
443,064
|
|
|
|
|
March 31,
2018 |
|
December 31,
2017 |
||||
6.25% Senior Notes due October 2021
|
$
|
400,000
|
|
|
$
|
400,000
|
|
Unamortized debt premium
|
1,481
|
|
|
1,583
|
|
||
Debt issuance cost
|
(3,947
|
)
|
|
(4,222
|
)
|
||
Senior secured revolving credit facility
|
58,803
|
|
|
108,446
|
|
||
Other debt
|
1,373
|
|
|
2,099
|
|
||
Total debt
|
457,710
|
|
|
507,906
|
|
||
Less: current maturities
|
(1,133
|
)
|
|
(1,156
|
)
|
||
Long-term debt
|
$
|
456,577
|
|
|
$
|
506,750
|
|
|
Three months ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Revenue:
|
|
|
|
||||
Drilling & Subsea
|
$
|
52,348
|
|
|
$
|
61,876
|
|
Completions
|
112,508
|
|
|
42,390
|
|
||
Production & Infrastructure
|
86,421
|
|
|
67,579
|
|
||
Eliminations
|
(1,046
|
)
|
|
(749
|
)
|
||
Total revenue
|
$
|
250,231
|
|
|
$
|
171,096
|
|
|
|
|
|
||||
Operating loss
|
|
|
|
||||
Drilling & Subsea
|
$
|
(10,206
|
)
|
|
$
|
(8,341
|
)
|
Completions
|
8,857
|
|
|
(3,516
|
)
|
||
Production & Infrastructure
|
4,162
|
|
|
(569
|
)
|
||
Corporate
|
(8,580
|
)
|
|
(7,807
|
)
|
||
Segment operating loss
|
(5,767
|
)
|
|
(20,233
|
)
|
||
Transaction expenses
|
1,336
|
|
|
628
|
|
||
Gain on disposal of assets and other
|
(397
|
)
|
|
(246
|
)
|
||
Operating loss
|
$
|
(6,706
|
)
|
|
$
|
(20,615
|
)
|
|
March 31,
2018 |
|
December 31,
2017 |
||||
Drilling & Subsea
|
$
|
651,571
|
|
|
$
|
645,254
|
|
Completions
|
1,225,071
|
|
|
1,202,379
|
|
||
Production & Infrastructure
|
245,047
|
|
|
251,685
|
|
||
Corporate
|
60,816
|
|
|
95,910
|
|
||
Total assets
|
$
|
2,182,505
|
|
|
$
|
2,195,228
|
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Drilling Technologies
|
$
|
42,768
|
|
|
$
|
45,143
|
|
Subsea Technologies
|
9,580
|
|
|
16,733
|
|
||
Downhole Technologies
|
24,527
|
|
|
16,614
|
|
||
Stimulation and Intervention
|
50,987
|
|
|
25,776
|
|
||
Coiled Tubing
|
36,994
|
|
|
—
|
|
||
Production Equipment
|
31,456
|
|
|
24,721
|
|
||
Valve Solutions
|
54,965
|
|
|
42,858
|
|
||
Eliminations
|
(1,046
|
)
|
|
(749
|
)
|
||
Total revenue
|
$
|
250,231
|
|
|
$
|
171,096
|
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Net income (loss)
|
$
|
28,066
|
|
|
$
|
(15,768
|
)
|
|
|
|
|
||||
Basic - weighted average shares outstanding
|
108,423
|
|
|
95,860
|
|
||
Dilutive effect of stock options and restricted stock
|
2,434
|
|
|
—
|
|
||
Diluted - weighted average shares outstanding
|
110,857
|
|
|
95,860
|
|
||
|
|
|
|
||||
Earnings (loss) per share
|
|
|
|
||||
Basic
|
$
|
0.26
|
|
|
$
|
(0.16
|
)
|
Diluted
|
$
|
0.25
|
|
|
$
|
(0.16
|
)
|
Condensed consolidating statements of comprehensive income (loss)
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Three months ended March 31, 2018
|
||||||||||||||||||
|
|
FET (Parent)
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
|
|
|
|
(in thousands)
|
|
|
|
|
||||||||||
Net sales
|
|
$
|
—
|
|
|
$
|
218,949
|
|
|
$
|
43,753
|
|
|
$
|
(12,471
|
)
|
|
$
|
250,231
|
|
Cost of sales
|
|
—
|
|
|
159,305
|
|
|
35,898
|
|
|
(12,259
|
)
|
|
182,944
|
|
|||||
Gross profit
|
|
—
|
|
|
59,644
|
|
|
7,855
|
|
|
(212
|
)
|
|
67,287
|
|
|||||
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Selling, general and administrative expenses
|
|
—
|
|
|
60,073
|
|
|
12,018
|
|
|
—
|
|
|
72,091
|
|
|||||
Transaction expenses
|
|
—
|
|
|
1,329
|
|
|
7
|
|
|
—
|
|
|
1,336
|
|
|||||
Loss (gain) on disposal of assets and other
|
|
—
|
|
|
(631
|
)
|
|
234
|
|
|
—
|
|
|
(397
|
)
|
|||||
Total operating expenses
|
|
—
|
|
|
60,771
|
|
|
12,259
|
|
|
—
|
|
|
73,030
|
|
|||||
Loss from equity investment
|
|
—
|
|
|
(10
|
)
|
|
(953
|
)
|
|
—
|
|
|
(963
|
)
|
|||||
Equity earnings from affiliate, net of tax
|
|
34,321
|
|
|
28,307
|
|
|
—
|
|
|
(62,628
|
)
|
|
—
|
|
|||||
Operating income (loss)
|
|
34,321
|
|
|
27,170
|
|
|
(5,357
|
)
|
|
(62,840
|
)
|
|
(6,706
|
)
|
|||||
Other expense (income)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense (income)
|
|
7,918
|
|
|
343
|
|
|
(174
|
)
|
|
—
|
|
|
8,087
|
|
|||||
Foreign exchange losses and other, net
|
|
—
|
|
|
—
|
|
|
3,551
|
|
|
—
|
|
|
3,551
|
|
|||||
(Gain) loss on contribution of subsea rentals business
|
|
—
|
|
|
5,856
|
|
|
(39,362
|
)
|
|
—
|
|
|
(33,506
|
)
|
|||||
Total other expense (income)
|
|
7,918
|
|
|
6,199
|
|
|
(35,985
|
)
|
|
—
|
|
|
(21,868
|
)
|
|||||
Income before income taxes
|
|
26,403
|
|
|
20,971
|
|
|
30,628
|
|
|
(62,840
|
)
|
|
15,162
|
|
|||||
Income tax expense (benefit)
|
|
(1,663
|
)
|
|
(13,350
|
)
|
|
2,109
|
|
|
—
|
|
|
(12,904
|
)
|
|||||
Net income
|
|
28,066
|
|
|
34,321
|
|
|
28,519
|
|
|
(62,840
|
)
|
|
28,066
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Other comprehensive income, net of tax:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
|
28,066
|
|
|
34,321
|
|
|
28,519
|
|
|
(62,840
|
)
|
|
28,066
|
|
|||||
Change in foreign currency translation, net of tax of $0
|
|
6,287
|
|
|
6,287
|
|
|
6,287
|
|
|
(12,574
|
)
|
|
6,287
|
|
|||||
Change in pension liability
|
|
16
|
|
|
16
|
|
|
16
|
|
|
(32
|
)
|
|
16
|
|
|||||
Comprehensive income
|
|
$
|
34,369
|
|
|
$
|
40,624
|
|
|
$
|
34,822
|
|
|
$
|
(75,446
|
)
|
|
$
|
34,369
|
|
Condensed consolidating statements of comprehensive income (loss)
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Three months ended March 31, 2017
|
||||||||||||||||||
|
|
FET (Parent)
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
|
|
|
|
(in thousands)
|
|
|
|
|
||||||||||
Net sales
|
|
$
|
—
|
|
|
$
|
142,736
|
|
|
$
|
46,402
|
|
|
$
|
(18,042
|
)
|
|
$
|
171,096
|
|
Cost of sales
|
|
—
|
|
|
110,240
|
|
|
39,395
|
|
|
(17,518
|
)
|
|
132,117
|
|
|||||
Gross profit
|
|
—
|
|
|
32,496
|
|
|
7,007
|
|
|
(524
|
)
|
|
38,979
|
|
|||||
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Selling, general and administrative expenses
|
|
—
|
|
|
48,063
|
|
|
12,611
|
|
|
—
|
|
|
60,674
|
|
|||||
Transaction Expense
|
|
—
|
|
|
517
|
|
|
111
|
|
|
—
|
|
|
628
|
|
|||||
Loss (gain) on disposal of assets and other
|
|
—
|
|
|
(270
|
)
|
|
24
|
|
|
—
|
|
|
(246
|
)
|
|||||
Total operating expenses
|
|
—
|
|
|
48,310
|
|
|
12,746
|
|
|
—
|
|
|
61,056
|
|
|||||
Earnings from equity investment
|
|
—
|
|
|
1,462
|
|
|
—
|
|
|
—
|
|
|
1,462
|
|
|||||
Equity earnings from affiliates, net of tax
|
|
(11,435
|
)
|
|
(5,126
|
)
|
|
—
|
|
|
16,561
|
|
|
—
|
|
|||||
Operating loss
|
|
(11,435
|
)
|
|
(19,478
|
)
|
|
(5,739
|
)
|
|
16,037
|
|
|
(20,615
|
)
|
|||||
Other expense (income)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense (income)
|
|
6,666
|
|
|
(27
|
)
|
|
(59
|
)
|
|
—
|
|
|
6,580
|
|
|||||
Foreign exchange losses (gains) and other, net
|
|
—
|
|
|
(137
|
)
|
|
1,683
|
|
|
—
|
|
|
1,546
|
|
|||||
Total other expense (income)
|
|
6,666
|
|
|
(164
|
)
|
|
1,624
|
|
|
—
|
|
|
8,126
|
|
|||||
Loss before income taxes
|
|
(18,101
|
)
|
|
(19,314
|
)
|
|
(7,363
|
)
|
|
16,037
|
|
|
(28,741
|
)
|
|||||
Income tax benefit
|
|
(2,333
|
)
|
|
(7,879
|
)
|
|
(2,761
|
)
|
|
—
|
|
|
(12,973
|
)
|
|||||
Net loss
|
|
(15,768
|
)
|
|
(11,435
|
)
|
|
(4,602
|
)
|
|
16,037
|
|
|
(15,768
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net loss
|
|
(15,768
|
)
|
|
(11,435
|
)
|
|
(4,602
|
)
|
|
16,037
|
|
|
(15,768
|
)
|
|||||
Change in foreign currency translation, net of tax of $0
|
|
7,222
|
|
|
7,222
|
|
|
7,222
|
|
|
(14,444
|
)
|
|
7,222
|
|
|||||
Change in pension liability
|
|
(15
|
)
|
|
(15
|
)
|
|
(15
|
)
|
|
30
|
|
|
(15
|
)
|
|||||
Comprehensive income (loss)
|
|
$
|
(8,561
|
)
|
|
$
|
(4,228
|
)
|
|
$
|
2,605
|
|
|
$
|
1,623
|
|
|
$
|
(8,561
|
)
|
Condensed consolidating balance sheets
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
March 31, 2018
|
||||||||||||||||||
|
|
FET (Parent)
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
(in thousands)
|
||||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$
|
484
|
|
|
$
|
27,946
|
|
|
$
|
13,910
|
|
|
$
|
—
|
|
|
$
|
42,340
|
|
Accounts receivable—trade, net
|
|
—
|
|
|
165,928
|
|
|
29,021
|
|
|
—
|
|
|
194,949
|
|
|||||
Inventories, net
|
|
—
|
|
|
403,196
|
|
|
74,716
|
|
|
(9,016
|
)
|
|
468,896
|
|
|||||
Prepaid expenses and other current assets
|
|
—
|
|
|
22,822
|
|
|
10,041
|
|
|
—
|
|
|
32,863
|
|
|||||
Accrued revenue
|
|
—
|
|
|
—
|
|
|
2,860
|
|
|
—
|
|
|
2,860
|
|
|||||
Cost and estimated profits in excess of billings
|
|
—
|
|
|
11,981
|
|
|
75
|
|
|
—
|
|
|
12,056
|
|
|||||
Total current assets
|
|
484
|
|
|
631,873
|
|
|
130,623
|
|
|
(9,016
|
)
|
|
753,964
|
|
|||||
Property and equipment, net of accumulated depreciation
|
|
—
|
|
|
162,012
|
|
|
22,514
|
|
|
—
|
|
|
184,526
|
|
|||||
Deferred financing costs, net
|
|
2,692
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,692
|
|
|||||
Intangible assets
|
|
—
|
|
|
374,864
|
|
|
51,880
|
|
|
—
|
|
|
426,744
|
|
|||||
Goodwill
|
|
—
|
|
|
599,820
|
|
|
157,981
|
|
|
—
|
|
|
757,801
|
|
|||||
Investment in unconsolidated subsidiary
|
|
—
|
|
|
1,923
|
|
|
41,163
|
|
|
—
|
|
|
43,086
|
|
|||||
Deferred income taxes, net
|
|
—
|
|
|
671
|
|
|
3,344
|
|
|
—
|
|
|
4,015
|
|
|||||
Other long-term assets
|
|
—
|
|
|
4,407
|
|
|
5,270
|
|
|
—
|
|
|
9,677
|
|
|||||
Investment in affiliates
|
|
1,290,210
|
|
|
429,493
|
|
|
—
|
|
|
(1,719,703
|
)
|
|
—
|
|
|||||
Long-term advances to affiliates
|
|
622,735
|
|
|
—
|
|
|
89,304
|
|
|
(712,039
|
)
|
|
—
|
|
|||||
Total assets
|
|
$
|
1,916,121
|
|
|
$
|
2,205,063
|
|
|
$
|
502,079
|
|
|
$
|
(2,440,758
|
)
|
|
$
|
2,182,505
|
|
Liabilities and equity
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Current portion of long-term debt
|
|
$
|
—
|
|
|
$
|
1,052
|
|
|
$
|
81
|
|
|
$
|
—
|
|
|
$
|
1,133
|
|
Accounts payable—trade
|
|
—
|
|
|
124,861
|
|
|
19,036
|
|
|
—
|
|
|
143,897
|
|
|||||
Accrued liabilities
|
|
12,927
|
|
|
37,326
|
|
|
12,503
|
|
|
—
|
|
|
62,756
|
|
|||||
Deferred revenue
|
|
—
|
|
|
4,175
|
|
|
4,439
|
|
|
—
|
|
|
8,614
|
|
|||||
Billings in excess of costs and profits recognized
|
|
—
|
|
|
370
|
|
|
446
|
|
|
—
|
|
|
816
|
|
|||||
Total current liabilities
|
|
12,927
|
|
|
167,784
|
|
|
36,505
|
|
|
—
|
|
|
217,216
|
|
|||||
Long-term debt, net of current portion
|
|
456,338
|
|
|
212
|
|
|
27
|
|
|
—
|
|
|
456,577
|
|
|||||
Deferred income taxes, net
|
|
—
|
|
|
20,266
|
|
|
8,902
|
|
|
—
|
|
|
29,168
|
|
|||||
Other long-term liabilities
|
|
—
|
|
|
14,552
|
|
|
18,136
|
|
|
—
|
|
|
32,688
|
|
|||||
Long-term payables to affiliates
|
|
—
|
|
|
712,039
|
|
|
—
|
|
|
(712,039
|
)
|
|
—
|
|
|||||
Total liabilities
|
|
469,265
|
|
|
914,853
|
|
|
63,570
|
|
|
(712,039
|
)
|
|
735,649
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total equity
|
|
1,446,856
|
|
|
1,290,210
|
|
|
438,509
|
|
|
(1,728,719
|
)
|
|
1,446,856
|
|
|||||
Total liabilities and equity
|
|
$
|
1,916,121
|
|
|
$
|
2,205,063
|
|
|
$
|
502,079
|
|
|
$
|
(2,440,758
|
)
|
|
$
|
2,182,505
|
|
Condensed consolidating balance sheets
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
December 31, 2017
|
||||||||||||||||||
|
|
FET (Parent)
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
|
|
|
|
(in thousands)
|
|
|
|
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$
|
—
|
|
|
$
|
73,981
|
|
|
$
|
41,235
|
|
|
$
|
—
|
|
|
$
|
115,216
|
|
Accounts receivable—trade, net
|
|
—
|
|
|
168,162
|
|
|
34,752
|
|
|
—
|
|
|
202,914
|
|
|||||
Inventories
|
|
—
|
|
|
374,527
|
|
|
77,454
|
|
|
(8,804
|
)
|
|
443,177
|
|
|||||
Other current assets
|
|
—
|
|
|
12,679
|
|
|
6,811
|
|
|
—
|
|
|
19,490
|
|
|||||
Cost and profits in excess of billings
|
|
—
|
|
|
9,584
|
|
|
—
|
|
|
—
|
|
|
9,584
|
|
|||||
Total current assets
|
|
—
|
|
|
638,933
|
|
|
160,252
|
|
|
(8,804
|
)
|
|
790,381
|
|
|||||
Property and equipment, net of accumulated depreciation
|
|
—
|
|
|
167,407
|
|
|
29,874
|
|
|
—
|
|
|
197,281
|
|
|||||
Deferred financing costs, net
|
|
2,900
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,900
|
|
|||||
Intangible assets
|
|
—
|
|
|
390,752
|
|
|
52,312
|
|
|
—
|
|
|
443,064
|
|
|||||
Goodwill
|
|
—
|
|
|
599,677
|
|
|
155,568
|
|
|
—
|
|
|
755,245
|
|
|||||
Investment in unconsolidated subsidiary
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Deferred income taxes, net
|
|
—
|
|
|
—
|
|
|
3,344
|
|
|
—
|
|
|
3,344
|
|
|||||
Other long-term assets
|
|
—
|
|
|
2,086
|
|
|
927
|
|
|
—
|
|
|
3,013
|
|
|||||
Investment in affiliates
|
|
1,250,593
|
|
|
418,799
|
|
|
—
|
|
|
(1,669,392
|
)
|
|
—
|
|
|||||
Long-term advances to affiliates
|
|
667,968
|
|
|
—
|
|
|
90,524
|
|
|
(758,492
|
)
|
|
—
|
|
|||||
Total assets
|
|
$
|
1,921,461
|
|
|
$
|
2,217,654
|
|
|
$
|
492,801
|
|
|
$
|
(2,436,688
|
)
|
|
$
|
2,195,228
|
|
Liabilities and equity
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Current portion of long-term debt
|
|
$
|
—
|
|
|
$
|
1,048
|
|
|
$
|
108
|
|
|
$
|
—
|
|
|
$
|
1,156
|
|
Accounts payable—trade
|
|
—
|
|
|
117,158
|
|
|
20,526
|
|
|
—
|
|
|
137,684
|
|
|||||
Accrued liabilities
|
|
6,638
|
|
|
46,962
|
|
|
13,165
|
|
|
—
|
|
|
66,765
|
|
|||||
Deferred revenue
|
|
—
|
|
|
4,455
|
|
|
4,364
|
|
|
—
|
|
|
8,819
|
|
|||||
Billings in excess of costs and profits recognized
|
|
—
|
|
|
1,394
|
|
|
487
|
|
|
—
|
|
|
1,881
|
|
|||||
Total current liabilities
|
|
6,638
|
|
|
171,017
|
|
|
38,650
|
|
|
—
|
|
|
216,305
|
|
|||||
Long-term debt, net of current portion
|
|
505,807
|
|
|
908
|
|
|
35
|
|
|
—
|
|
|
506,750
|
|
|||||
Deferred income taxes, net
|
|
—
|
|
|
22,737
|
|
|
8,495
|
|
|
—
|
|
|
31,232
|
|
|||||
Other long-term liabilities
|
|
—
|
|
|
13,907
|
|
|
18,018
|
|
|
—
|
|
|
31,925
|
|
|||||
Long-term payables to affiliates
|
|
—
|
|
|
758,492
|
|
|
—
|
|
|
(758,492
|
)
|
|
—
|
|
|||||
Total liabilities
|
|
512,445
|
|
|
967,061
|
|
|
65,198
|
|
|
(758,492
|
)
|
|
786,212
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total equity
|
|
1,409,016
|
|
|
1,250,593
|
|
|
427,603
|
|
|
(1,678,196
|
)
|
|
1,409,016
|
|
|||||
Total liabilities and equity
|
|
$
|
1,921,461
|
|
|
$
|
2,217,654
|
|
|
$
|
492,801
|
|
|
$
|
(2,436,688
|
)
|
|
$
|
2,195,228
|
|
Condensed consolidating statements of cash flows
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Three months ended March 31, 2018
|
||||||||||||||||||
|
|
FET (Parent)
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
(in thousands)
|
||||||||||||||||||
Cash flows from operating activities
|
|
$
|
7,196
|
|
|
$
|
3,050
|
|
|
$
|
(5,618
|
)
|
|
$
|
(23,950
|
)
|
|
$
|
(19,322
|
)
|
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Capital expenditures for property and equipment
|
|
—
|
|
|
(3,944
|
)
|
|
(1,136
|
)
|
|
—
|
|
|
(5,080
|
)
|
|||||
Long-term loans and advances to affiliates
|
|
45,234
|
|
|
—
|
|
|
—
|
|
|
(45,234
|
)
|
|
—
|
|
|||||
Proceeds from sale of business, property and equipment
|
|
—
|
|
|
785
|
|
|
4,289
|
|
|
—
|
|
|
5,074
|
|
|||||
Net cash provided by (used in) investing activities
|
|
$
|
45,234
|
|
|
$
|
(3,159
|
)
|
|
$
|
3,153
|
|
|
$
|
(45,234
|
)
|
|
$
|
(6
|
)
|
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Repayments of debt
|
|
(50,000
|
)
|
|
(692
|
)
|
|
(37
|
)
|
|
—
|
|
|
(50,729
|
)
|
|||||
Long-term loans and advances to affiliates
|
|
—
|
|
|
(45,234
|
)
|
|
—
|
|
|
45,234
|
|
|
—
|
|
|||||
Dividend paid to affiliates
|
|
—
|
|
|
—
|
|
|
(23,950
|
)
|
|
23,950
|
|
|
—
|
|
|||||
Repurchases of stock
|
|
(1,946
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,946
|
)
|
|||||
Net cash used in financing activities
|
|
$
|
(51,946
|
)
|
|
$
|
(45,926
|
)
|
|
$
|
(23,987
|
)
|
|
$
|
69,184
|
|
|
$
|
(52,675
|
)
|
Effect of exchange rate changes on cash
|
|
—
|
|
|
—
|
|
|
(873
|
)
|
|
—
|
|
|
(873
|
)
|
|||||
Net increase (decrease) in cash and cash equivalents
|
|
484
|
|
|
(46,035
|
)
|
|
(27,325
|
)
|
|
—
|
|
|
(72,876
|
)
|
|||||
Cash and cash equivalents
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Beginning of period
|
|
—
|
|
|
73,981
|
|
|
41,235
|
|
|
—
|
|
|
115,216
|
|
|||||
End of period
|
|
$
|
484
|
|
|
$
|
27,946
|
|
|
$
|
13,910
|
|
|
$
|
—
|
|
|
$
|
42,340
|
|
Condensed consolidating statements of cash flows
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Three months ended March 31, 2017
|
||||||||||||||||||
|
|
FET (Parent)
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
(in thousands)
|
||||||||||||||||||
Cash flows from operating activities
|
|
$
|
374
|
|
|
$
|
(13,349
|
)
|
|
$
|
(2,031
|
)
|
|
$
|
—
|
|
|
$
|
(15,006
|
)
|
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Acquisition of businesses, net of cash acquired
|
|
—
|
|
|
(8,738
|
)
|
|
—
|
|
|
—
|
|
|
(8,738
|
)
|
|||||
Capital expenditures for property and equipment
|
|
—
|
|
|
(3,285
|
)
|
|
(183
|
)
|
|
—
|
|
|
(3,468
|
)
|
|||||
Investment in unconsolidated subsidiary
|
|
—
|
|
|
(1,041
|
)
|
|
—
|
|
|
—
|
|
|
(1,041
|
)
|
|||||
Long-term loans and advances to affiliates
|
|
2,310
|
|
|
7,319
|
|
|
—
|
|
|
(9,629
|
)
|
|
—
|
|
|||||
Proceeds from sale of business, property and equipment
|
|
—
|
|
|
40
|
|
|
—
|
|
|
—
|
|
|
40
|
|
|||||
Net cash provided by (used in) investing activities
|
|
$
|
2,310
|
|
|
$
|
(5,705
|
)
|
|
$
|
(183
|
)
|
|
$
|
(9,629
|
)
|
|
$
|
(13,207
|
)
|
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Repayments of debt
|
|
—
|
|
|
(868
|
)
|
|
(23
|
)
|
|
—
|
|
|
(891
|
)
|
|||||
Long-term loans and advances to affiliates
|
|
—
|
|
|
(2,310
|
)
|
|
(7,319
|
)
|
|
9,629
|
|
|
—
|
|
|||||
Repurchases of stock
|
|
(4,403
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,403
|
)
|
|||||
Proceeds from stock issuance
|
|
1,757
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,757
|
|
|||||
Net cash used in financing activities
|
|
$
|
(2,646
|
)
|
|
$
|
(3,178
|
)
|
|
$
|
(7,342
|
)
|
|
$
|
9,629
|
|
|
$
|
(3,537
|
)
|
Effect of exchange rate changes on cash
|
|
—
|
|
|
—
|
|
|
2,242
|
|
|
—
|
|
|
2,242
|
|
|||||
Net increase (decrease) in cash and cash equivalents
|
|
38
|
|
|
(22,232
|
)
|
|
(7,314
|
)
|
|
—
|
|
|
(29,508
|
)
|
|||||
Cash and cash equivalents
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Beginning of period
|
|
65
|
|
|
143,275
|
|
|
91,082
|
|
|
—
|
|
|
234,422
|
|
|||||
End of period
|
|
$
|
103
|
|
|
$
|
121,043
|
|
|
$
|
83,768
|
|
|
$
|
—
|
|
|
$
|
204,914
|
|
•
|
our ability to successfully manage our growth, including risks and uncertainties associated with integrating and retaining key employees of the businesses we acquire;
|
•
|
Drilling & Subsea segment
. This segment designs and manufactures products and provides related services to the drilling, energy subsea construction and services markets, and other markets such as alternative energy, defense and communications. 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 remotely operated vehicles and trenchers, 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 oil and produced water treatment equipment; and (ii) a wide range of industrial valves focused on serving upstream, midstream, and downstream oil and natural gas customers as well as power and other general industries.
|
|
|
Three months ended
|
||||||||||
|
|
March 31,
|
|
December 31,
|
|
March 31,
|
||||||
|
|
2018
|
|
2017
|
|
2017
|
||||||
Average global oil, $/bbl
|
|
|
|
|
|
|
||||||
West Texas Intermediate
|
|
$
|
62.91
|
|
|
$
|
55.27
|
|
|
$
|
51.62
|
|
United Kingdom Brent
|
|
$
|
66.86
|
|
|
$
|
61.40
|
|
|
$
|
53.59
|
|
|
|
|
|
|
|
|
||||||
Average North American Natural Gas, $/Mcf
|
|
|
|
|
|
|
||||||
Henry Hub
|
|
$
|
3.08
|
|
|
$
|
2.91
|
|
|
$
|
3.02
|
|
|
|
Three months ended
|
|||||||
|
|
March 31,
|
|
December 31,
|
|
March 31,
|
|||
|
|
2018
|
|
2017
|
|
2017
|
|||
Active Rigs by Location
|
|
|
|
|
|
|
|||
United States
|
|
966
|
|
|
921
|
|
|
742
|
|
Canada
|
|
269
|
|
|
204
|
|
|
295
|
|
International
|
|
970
|
|
|
949
|
|
|
939
|
|
Global Active Rigs
|
|
2,205
|
|
|
2,074
|
|
|
1,976
|
|
|
|
|
|
|
|
|
|||
Land vs. Offshore Rigs
|
|
|
|
|
|
|
|||
Land
|
|
1,995
|
|
|
1,859
|
|
|
1,754
|
|
Offshore
|
|
210
|
|
|
215
|
|
|
222
|
|
Global Active Rigs
|
|
2,205
|
|
|
2,074
|
|
|
1,976
|
|
|
|
|
|
|
|
|
|||
U.S. Commodity Target
|
|
|
|
|
|
|
|||
Oil/Gas
|
|
781
|
|
|
742
|
|
|
593
|
|
Gas
|
|
185
|
|
|
179
|
|
|
148
|
|
Unclassified
|
|
—
|
|
|
—
|
|
|
1
|
|
Total U.S. Active Rigs
|
|
966
|
|
|
921
|
|
|
742
|
|
|
|
|
|
|
|
|
|||
U.S. Well Path
|
|
|
|
|
|
|
|||
Horizontal
|
|
833
|
|
|
785
|
|
|
610
|
|
Vertical
|
|
63
|
|
|
63
|
|
|
69
|
|
Directional
|
|
70
|
|
|
73
|
|
|
63
|
|
Total U.S. Active Rigs
|
|
966
|
|
|
921
|
|
|
742
|
|
(in millions of dollars)
|
Three months ended
|
||||||||||
|
March 31,
|
|
December 31,
|
|
March 31,
|
||||||
|
2018
|
|
2017
|
|
2017
|
||||||
Drilling & Subsea
|
$
|
53.1
|
|
|
$
|
49.6
|
|
|
$
|
68.4
|
|
Completions
|
111.1
|
|
|
101.1
|
|
|
50.1
|
|
|||
Production & Infrastructure
|
96.8
|
|
|
80.8
|
|
|
75.4
|
|
|||
Total Orders
|
$
|
261.0
|
|
|
$
|
231.5
|
|
|
$
|
193.9
|
|
|
Three months ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Net cash used in operating activities
|
$
|
(19.3
|
)
|
|
$
|
(15.0
|
)
|
Net cash used in investing activities
|
—
|
|
|
(13.2
|
)
|
||
Net cash used in financing activities
|
(52.7
|
)
|
|
(3.5
|
)
|
||
Effect of exchange rate changes on cash
|
(0.9
|
)
|
|
2.2
|
|
||
Net decrease in cash, cash equivalents and restricte
d cash
|
$
|
(72.9
|
)
|
|
$
|
(29.5
|
)
|
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 (b)
|
|
Maximum value of shares that may yet be purchased under the plan or program
(in thousands) (b) |
||||||
January 1, 2018 - January 31, 2018
|
|
2,187
|
|
|
$
|
15.55
|
|
|
—
|
|
|
$
|
49,752
|
|
February 1, 2018 - February 28, 2018
|
|
2,643
|
|
|
$
|
12.00
|
|
|
—
|
|
|
$
|
49,752
|
|
March 1, 2018 - March 31, 2018
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
49,752
|
|
Total
|
|
4,830
|
|
|
$
|
13.61
|
|
|
—
|
|
|
|
Exhibit
|
|
|
Number
|
|
DESCRIPTION
|
|
|
|
—
|
Severance Agreement, dated February 16, 2018, by and between Forum Energy Technologies, Inc. and Pablo G. Mercado (incorporated herein by reference to Exhibit 10.1 on the Company’s Current Report on Form 8-K, filed on February 21, 2018).
|
|
|
|
|
—
|
Severance Agreement, dated February 16, 2018, by and between Forum Energy Technologies, Inc. and Michael D. Danford (incorporated herein by reference to Exhibit 10.2 on the Company’s Current Report on Form 8-K, filed on February 21, 2018).
|
|
|
|
|
—
|
Employment Agreement, dated February 16, 2018, by and between Forum Energy Technologies, Inc. and C. Christopher Gaut (incorporated herein by reference to Exhibit 10.3 on the Company’s Current Report on Form 8-K, filed on February 21, 2018).
|
|
|
|
|
—
|
Form of Restricted Stock Agreement (Directors).
|
|
|
|
|
—
|
Form of Restricted Stock Unit Agreement (Directors).
|
|
|
|
|
—
|
Form of Restricted Stock Unit Agreement (Employees and Consultants - Group 1)
|
|
|
|
|
—
|
Form of Restricted Stock Unit Agreement (Employees and Consultants - Group 2)
|
|
|
|
|
—
|
Form of Nonstatutory Stock Option Agreement (Employees and Consultants)
|
|
|
|
|
—
|
Form of Performance Share Award Agreement (Employees and Consultants)
|
|
|
|
|
—
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
—
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
—
|
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
—
|
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:
|
May 2, 2018
|
By:
|
/s/ Pablo G. Mercado
|
|
|
|
|
Pablo G. Mercado
|
|
|
|
|
Senior 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)
|
|
FORUM ENERGY TECHNOLOGIES, INC.
|
|
|
|
By:
|
|
|
Prady Iyyanki
President and CEO
|
|
|
DIRECTOR
|
|
|
|
FORUM ENERGY TECHNOLOGIES, INC.
|
|
|
|
By:
|
|
|
Prady Iyyanki
President and CEO
|
|
|
DIRECTOR
|
|
|
|
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%
|
(i)
|
a change in the Employee’s status, title or position with the Company Group, including as an officer of the Company, which, in the Employee’s good faith judgment, does not represent a promotion, with commensurate adjustment of compensation, from the Employee’s status, title or position as in effect immediately prior thereto; the assignment to the Employee of any duties or responsibilities which, in the Employee’s good faith judgment, are inconsistent with the Employee’s status, title or position in effect immediately prior to such assignment; the withdrawal from the Employee of any duties or responsibilities which, in the Employee’s good faith judgment, are consistent with such status, title or position in effect immediately prior to such withdrawal; or any removal of the Employee from or any failure to reappoint or reelect the Employee to any position; provided that the circumstances described in this item (i) do not apply as a result of the Employee’s death, Retirement, or Disability or following receipt by the Employee of written notice from the Company of the termination of the Employee’s employment for Cause;
|
(ii)
|
a reduction by the Company in the Employee’s then current base salary;
|
(iii)
|
the failure by the Company to continue in effect any benefit or compensation plan in which the Employee was participating immediately prior to such failure other than as a result of the normal expiration or amendment of any such plan in accordance with its terms; or the taking of any action, or the failure to act, by the Company which would adversely affect the Employee’s continued participation in any benefit or compensation plan on at least as favorable a basis to the Employee as is the case immediately prior to the action or failure to act or which would materially reduce the Employee’s benefits under any such plan or deprive the Employee of any material benefit enjoyed by the Employee immediately prior to the action or failure to act;
|
(iv)
|
the relocation of the principal place of the Employee’s employment to a location 25 miles further from the Employee’s then current principal residence;
|
(v)
|
the failure by the Company upon a Change in Control to obtain an agreement, satisfactory to the Employee, from any successor or assign of the Company (whether direct or indirect, by purchase, merger, consolidation or otherwise) to expressly assume and agree to perform
|
(vi)
|
any material default by the Company in the performance of its obligations under this Agreement.
|
FORUM ENERGY TECHNOLOGIES, INC.
|
|
|
|
By:
|
|
|
Prady Iyyanki
President and CEO
|
|
|
EMPLOYEE
|
|
|
|
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:
|
|
|
Prady Iyyanki
President and CEO
|
|
|
EMPLOYEE
|
|
|
|
Date Additional Option Shares
Become Exercisable
|
Additional Percentage of Aggregate Option Shares
Becoming Exercisable
|
|
|
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%
|
(i)
|
a change in the Employee’s status, title or position with the Company Group, including as an officer of the Company, which, in the Employee's good faith judgment, does not represent a promotion, with commensurate adjustment of compensation, from the Employee’s status, title or position as in effect immediately prior thereto; the assignment to the Employee of any duties or responsibilities which, in the Employee’s good faith judgment, are inconsistent with the Employee’s status, title or position in effect immediately prior to such assignment; the withdrawal from the Employee of any duties or responsibilities which, in the Employee’s good faith judgment, are consistent with such status, title or position in effect immediately prior to such withdrawal; or any removal of the Employee from or any failure to reappoint or reelect the Employee to any position; provided that the circumstances described in this item (i) do not apply as a result of the Employee’s death, Retirement, or Disability or following receipt by the Employee of written notice from the Company of the termination of the Employee's employment for Cause;
|
(ii)
|
a reduction by the Company in the Employee's then current base salary;
|
(iii)
|
the failure by the Company to continue in effect any benefit or compensation plan in which the Employee was participating immediately prior to such failure other than as
|
(iv)
|
the relocation of the principal place of the Employee's employment to a location 25 miles further from the Employee's then current principal residence;
|
(v)
|
the failure by the Company upon a Change in Control to obtain an agreement, satisfactory to the Employee, from any successor or assign of the Company (whether direct or indirect, by purchase, merger, consolidation or otherwise) to expressly assume and agree to perform this Agreement in the same manner and to the same extent the Company would be required to perform if no succession or assignment had taken place; or
|
(vi)
|
any material default by the Company in the performance of its obligations under this Agreement.
|
FORUM ENERGY TECHNOLOGIES, INC.
|
|
|
|
By:
|
|
|
Prady Iyyanki
President and CEO
|
|
|
EMPLOYEE
|
|
|
|
Performance Period
|
Target Amount
|
Performance Beginning Date
|
Performance End Date
|
Settlement Date
|
First Performance Period
|
|
January 1, 2018
|
December 31, 2018
|
March 15, 2019
|
Second Performance Period
|
|
January 1, 2018
|
December 31, 2019
|
March 15, 2020
|
Third Performance Period
|
|
January 1, 2018
|
December 31, 2020
|
March 15, 2021
|
(i)
|
a change in the Employee’s status, title or position with the Company Group, including as an officer of the Company, which, in the Employee’s good faith judgment, does not represent a promotion, with commensurate adjustment of compensation, from the Employee’s status, title or position as in effect immediately prior thereto; the assignment to the Employee of any duties or responsibilities which, in the Employee’s good faith judgment, are inconsistent with the Employee’s status, title or position in effect immediately prior to such assignment; the
|
(ii)
|
a reduction by the Company in the Employee’s then current base salary;
|
(iii)
|
the failure by the Company to continue in effect any benefit or compensation plan in which the Employee was participating immediately prior to such failure other than as a result of the normal expiration or amendment of any such plan in accordance with its terms; or the taking of any action, or the failure to act, by the Company which would adversely affect the Employee’s continued participation in any benefit or compensation plan on at least as favorable a basis to the Employee as is the case immediately prior to the action or failure to act or which would materially reduce the Employee’s benefits under any such plan or deprive the Employee of any material benefit enjoyed by the Employee immediately prior to the action or failure to act;
|
(iv)
|
the relocation of the principal place of the Employee’s employment to a location 25 miles further from the Employee’s then current principal residence;
|
(v)
|
the failure by the Company upon a Change in Control to obtain an agreement, satisfactory to the Employee, from any successor or assign of the Company (whether direct or indirect, by purchase, merger, consolidation or otherwise) to expressly assume and agree to perform this Agreement in the same manner and to the same extent the Company would be required to perform if no succession or assignment had taken place; or
|
(vi)
|
any material default by the Company in the performance of its obligations under this Agreement.
|
FORUM ENERGY TECHNOLOGIES, INC.
|
|
|
|
By:
|
|
|
Prady Iyyanki
President and CEO
|
|
|
EMPLOYEE
|
|
|
|
Ten Company Payout Schedule
|
|
Company Ranking
|
Payout Multiplier
|
1
|
2.00
|
2
|
1.75
|
3
|
1.50
|
4
|
1.25
|
5
|
1.00
|
6
|
1.00
|
7
|
0.75
|
8
|
0.50
|
9
|
0.25
|
10
|
0.00
|
Eight Company Payout Schedule
|
|
Company Ranking
|
Payout Multiplier
|
1
|
2.00
|
2
|
1.71
|
3
|
1.42
|
4
|
1.13
|
5
|
0.84
|
6
|
0.55
|
7
|
0.26
|
8
|
0.00
|
Seven Company Payout Schedule
|
|
Company Ranking
|
Payout Multiplier
|
1
|
2.00
|
2
|
1.67
|
3
|
1.33
|
4
|
1.00
|
5
|
0.67
|
6
|
0.33
|
7
|
0.00
|
Six Company Payout Schedule
|
|
Company Ranking
|
Payout Multiplier
|
1
|
2.00
|
2
|
1.60
|
3
|
1.20
|
4
|
0.80
|
5
|
0.40
|
6
|
0.00
|
Five Company Payout Schedule
|
|
Company Ranking
|
Payout Multiplier
|
1
|
2.00
|
2
|
1.50
|
3
|
1.00
|
4
|
0.50
|
5
|
0.00
|
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:
|
May 2, 2018
|
By:
|
/s/ Prady Iyyanki
|
|
|
|
|
Prady Iyyanki
|
|
|
|
|
President and 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:
|
May 2, 2018
|
By:
|
/s/ Pablo G. Mercado
|
|
|
|
|
Pablo G. Mercado
|
|
|
|
|
Chief Financial Officer
|
|
Date:
|
May 2, 2018
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By:
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/s/ Prady Iyyanki
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Prady Iyyanki
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President and Chief Executive Officer
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Date:
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May 2, 2018
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By:
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/s/ Pablo G. Mercado
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Pablo G. Mercado
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Chief Financial Officer
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