þ
|
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
For the Fiscal Year Ended December 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 incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
Common stock, $0.01 par value
|
|
New York Stock Exchange
|
(Title of Each Class)
|
|
(Name of Each Exchange on Which Registered)
|
Large accelerated filer
þ
|
|
Accelerated filer
o
|
|
Non-accelerated filer
o
|
Smaller reporting company
o
|
|
Emerging growth company
o
|
|
|
PART I
|
||
PART II
|
||
PART III
|
||
PART IV
|
||
•
|
supply of and demand for oil and natural gas;
|
•
|
prices, and expectations about future prices, of oil and natural gas;
|
•
|
ability or willingness of the members of the Organization of Petroleum Exporting Countries (“OPEC”) and other countries, such as Russia, to influence oil and natural gas prices through voluntary production limits; cost of exploring for, developing, producing and delivering oil and natural gas;
|
•
|
level of drilling and completions activity;
|
•
|
expected decline in rates of current and future production, or faster than anticipated declines in production;
|
•
|
discovery rates of new oil and natural gas reserves;
|
•
|
ability of our customers to access new markets or areas of production or to continue to access current markets;
|
•
|
weather conditions, including hurricanes, that can affect oil and natural gas operations over a wide area;
|
•
|
more stringent environmental regulations;
|
•
|
moratoriums on drilling activity resulting in a cessation or disruption of operations;
|
•
|
domestic and worldwide economic conditions;
|
•
|
financial stability of our customers and other industry participants;
|
•
|
political instability in oil and natural gas producing countries;
|
•
|
shareholder activism or activities by non-governmental organizations to restrict the exploration, development and production of oil and natural gas;
|
•
|
conservation measures and technological advances affecting energy consumption;
|
•
|
price and availability of alternative energy resources;
|
•
|
availability of alternative fuels;
|
•
|
uncertainty in capital and commodities markets, and the ability of oil and natural gas companies to raise equity capital and debt financing; and
|
•
|
merger and divestiture activity among oil and natural gas producers, drilling contractors and oilfield service companies.
|
•
|
revenues, cash flows, and profitability;
|
•
|
the ability to maintain or increase borrowing capacity;
|
•
|
the ability to obtain additional capital to finance our business and the cost of that capital;
|
•
|
the ability to collect outstanding amounts from our customers; and
|
•
|
the ability to attract and retain skilled personnel to maintain our business or that will be needed in the event of an upturn in the demand for our products.
|
•
|
our indebtedness may increase our vulnerability to general adverse economic and industry conditions;
|
•
|
the covenants contained in the agreements that govern our indebtedness limit our ability to borrow funds, dispose of assets, pay dividends and make certain investments;
|
•
|
our debt covenants also affect our flexibility in planning for, and reacting to, changes in the economy and in its industry;
|
•
|
any failure to comply with the financial or other covenants of our indebtedness could result in an event of default, which could result in some or all of our indebtedness becoming immediately due and payable;
|
•
|
our indebtedness could impair our ability to obtain additional financing in the future for working capital, capital expenditures, acquisitions or other general corporate purposes; and
|
•
|
our business may not generate sufficient cash flow from operations to enable us to meet our debt obligations.
|
•
|
difficulties or delays in obtaining land;
|
•
|
shortages of key equipment, materials or skilled labor;
|
•
|
unscheduled delays in the delivery of ordered materials and equipment;
|
•
|
unanticipated cost increases;
|
•
|
weather interferences; and
|
•
|
pay dividends on, purchase or redeem our common stock;
|
•
|
make certain investments;
|
•
|
incur or guarantee additional indebtedness or issue certain types of equity securities;
|
•
|
create certain liens;
|
•
|
sell assets, including equity interests in our restricted subsidiaries;
|
•
|
redeem or prepay subordinated debt;
|
•
|
restrict dividends or other payments of our restricted subsidiaries;
|
•
|
consolidate, merge or transfer all or substantially all of our assets;
|
•
|
engage in transactions with affiliates;
|
•
|
create unrestricted subsidiaries; or
|
•
|
execute our acquisition strategy.
|
•
|
federal, state and local U.S. and non-U.S. laws and other regulations relating to oilfield operations, worker safety and protection of the environment;
|
•
|
changes in these laws and regulations; and
|
•
|
the level of enforcement of these laws and regulations.
|
•
|
unanticipated costs and exposure to unforeseen liabilities;
|
•
|
difficulty in integrating the operations and assets of the acquired businesses;
|
•
|
potential inability to retain key employees and customers of the acquired company;
|
•
|
potential inability to properly establish and maintain effective internal controls over an acquired company;
|
•
|
risk of entering markets in which we have limited prior experience; and
|
•
|
failure to realize the full range of synergies that were expected when assessing the value to be paid for the acquisition.
|
•
|
a classified board of directors, so that only approximately one-third of our directors are elected each year;
|
•
|
authority of our board to fill vacancies and determine its size;
|
•
|
the ability of our board of directors to issue preferred stock without stockholder approval;
|
•
|
limitations on the removal of directors; and
|
•
|
limitations on the ability of our stockholders to call special meetings.
|
Country
|
|
Location
|
|
Number of facilities
|
|
Description
|
|
Leased or Owned
|
|
Segments
|
|
|
|
||||||||
Canada
|
|
Alberta
|
|
2
|
|
Service
|
|
Leased
|
|
D&S and C
|
|
|
Calgary
|
|
2
|
|
Service/Distribution
|
|
Leased
|
|
Shared with all
|
|
|
Edmonton
|
|
2
|
|
Service/Distribution
|
|
Leased
|
|
D&S and C
|
Germany
|
|
Hamburg
|
|
1
|
|
Manufacturing
|
|
Leased
|
|
D&S and C
|
Mexico
|
|
Monterrey
|
|
1
|
|
Manufacturing
|
|
Leased
|
|
D&S and C
|
Saudi Arabia
|
|
Dammam
|
|
1
|
|
Manufacturing
|
|
Owned
|
|
P&I
|
Singapore
|
|
Singapore
|
|
1
|
|
Manufacturing/Service/Distribution
|
|
Leased
|
|
D&S and C
|
UAE
|
|
Dubai
|
|
1
|
|
Service/Distribution
|
|
Leased
|
|
D&S and C
|
United Kingdom
|
|
Aberdeen
|
|
3
|
|
Distribution
|
|
Leased
|
|
D&S and C
|
|
|
Kirkbymoorside
|
|
1
|
|
Manufacturing
|
|
Owned
|
|
D&S
|
|
|
Findon
|
|
1
|
|
Manufacturing
|
|
Leased
|
|
D&S and C
|
United States
|
|
Broussard, LA
|
|
3
|
|
Manufacturing
|
|
Owned
|
|
Shared with all
|
|
|
Brownsville, PA
|
|
1
|
|
Manufacturing
|
|
Leased
|
|
C
|
|
|
Bryan, TX
|
|
1
|
|
Manufacturing
|
|
Owned
|
|
D&S
|
|
|
Clearfield, PA
|
|
1
|
|
Manufacturing/Service/Distribution
|
|
Owned
|
|
P&I and C
|
|
|
Davis, OK
|
|
1
|
|
Manufacturing
|
|
Owned
|
|
C
|
|
|
Dayton, TX
|
|
1
|
|
Manufacturing
|
|
Owned
|
|
C
|
|
|
Elmore City, OK
|
|
1
|
|
Manufacturing
|
|
Owned
|
|
P&I
|
|
|
Fort Worth, TX
|
|
1
|
|
Manufacturing
|
|
Leased
|
|
C
|
|
|
Guthrie, OK
|
|
1
|
|
Manufacturing
|
|
Leased
|
|
P&I
|
|
|
Houston, TX
|
|
4
|
|
Corporate/Distribution/Manufacturing
|
|
Leased
|
|
Shared with all
|
|
|
Humble, TX
|
|
2
|
|
Manufacturing
|
|
Leased
|
|
C
|
|
|
Madison, KS
|
|
5
|
|
Manufacturing
|
|
Leased
|
|
P&I
|
|
|
Midland, TX
|
|
2
|
|
Service/Distribution
|
|
Leased
|
|
D&S and C
|
|
|
Missouri City, TX
|
|
1
|
|
Manufacturing
|
|
Leased
|
|
C
|
|
|
Odessa, TX
|
|
1
|
|
Service/Distribution
|
|
Leased
|
|
C
|
|
|
Odessa, TX
|
|
1
|
|
Distribution/Sales
|
|
Owned
|
|
D&S and C
|
|
|
Pearland, TX
|
|
1
|
|
Manufacturing
|
|
Owned
|
|
C
|
|
|
Pearland, TX
|
|
1
|
|
Distribution
|
|
Leased
|
|
P&I
|
|
|
Plantersville, TX
|
|
1
|
|
Manufacturing
|
|
Owned
|
|
D&S and C
|
|
|
San Antonio, TX
|
|
1
|
|
Service/Distribution
|
|
Owned
|
|
C
|
|
|
Stafford, TX
|
|
3
|
|
Manufacturing/Distribution
|
|
Leased
|
|
P&I
|
|
|
Stafford, TX
|
|
1
|
|
Manufacturing
|
|
Owned
|
|
C
|
|
|
Tyler, TX
|
|
1
|
|
Distribution
|
|
Leased
|
|
D&S and C
|
|
|
Williston, ND
|
|
3
|
|
Service/Distribution
|
|
Leased
|
|
D&S and C
|
Name
|
Age
|
Position
|
C. Christopher Gaut
|
62
|
President, Chief Executive Officer and Chairman of the Board
|
Pablo G. Mercado
|
42
|
Senior Vice President, Chief Financial Officer and Treasurer
|
John C. Ivascu
|
41
|
Senior Vice President,General Counsel and Secretary
|
Michael D. Danford
|
56
|
Senior Vice President - Human Resources
|
D. Lyle Williams
|
49
|
Senior Vice President - Operations
|
Period
|
Total number of shares purchased
|
|
Average price paid per share
|
|
Total number of shares purchased as part of publicly announced plan or programs (a)
|
|
Maximum value of shares that may yet be purchased under the plan or program (in thousands) (a)
|
||||||
October 1, 2018 - October 31, 2018
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
49,752
|
|
November 1, 2018 - November 30, 2018
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
49,752
|
|
December 1, 2018 - December 31, 2018
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
49,752
|
|
Total
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
|
|
Year ended December 31,
|
||||||||||||||||||
(in thousands, except per share information)
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
Income Statement Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
$
|
1,064,219
|
|
|
$
|
818,620
|
|
|
$
|
587,635
|
|
|
$
|
1,073,652
|
|
|
$
|
1,739,717
|
|
Total operating expenses
|
1,461,357
|
|
|
961,215
|
|
|
718,411
|
|
|
1,202,199
|
|
|
1,496,843
|
|
|||||
Earnings from equity investment
|
140
|
|
|
1,000
|
|
|
1,824
|
|
|
14,824
|
|
|
25,164
|
|
|||||
Operating income (loss)
|
(396,998
|
)
|
|
(141,595
|
)
|
|
(128,952
|
)
|
|
(113,723
|
)
|
|
268,038
|
|
|||||
Total other expense (income)
|
(7,244
|
)
|
|
(86,316
|
)
|
|
9,047
|
|
|
20,600
|
|
|
25,516
|
|
|||||
Income (loss) before income taxes
|
(389,754
|
)
|
|
(55,279
|
)
|
|
(137,999
|
)
|
|
(134,323
|
)
|
|
242,522
|
|
|||||
Income tax expense (benefit)
|
(15,674
|
)
|
|
4,121
|
|
|
(56,051
|
)
|
|
(14,939
|
)
|
|
68,145
|
|
|||||
Net income (loss)
|
(374,080
|
)
|
|
(59,400
|
)
|
|
(81,948
|
)
|
|
(119,384
|
)
|
|
174,377
|
|
|||||
Less: Income (loss) attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
30
|
|
|
(31
|
)
|
|
12
|
|
|||||
Net income (loss) attributable to common stockholders
|
(374,080
|
)
|
|
(59,400
|
)
|
|
(81,978
|
)
|
|
(119,353
|
)
|
|
174,365
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Weighted average shares outstanding
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
108,771
|
|
|
98,689
|
|
|
91,226
|
|
|
89,908
|
|
|
92,628
|
|
|||||
Diluted
|
108,771
|
|
|
98,689
|
|
|
91,226
|
|
|
89,908
|
|
|
95,308
|
|
|||||
Earnings (loss) per share
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
(3.44
|
)
|
|
$
|
(0.60
|
)
|
|
$
|
(0.90
|
)
|
|
$
|
(1.33
|
)
|
|
$
|
1.88
|
|
Diluted
|
$
|
(3.44
|
)
|
|
$
|
(0.60
|
)
|
|
$
|
(0.90
|
)
|
|
$
|
(1.33
|
)
|
|
$
|
1.83
|
|
|
As of December 31,
|
||||||||||||||||||
(in thousands)
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
47,241
|
|
|
$
|
115,216
|
|
|
$
|
234,422
|
|
|
$
|
109,249
|
|
|
$
|
76,579
|
|
Net property, plant and equipment
|
177,358
|
|
|
197,281
|
|
|
152,212
|
|
|
186,667
|
|
|
189,974
|
|
|||||
Total assets
|
1,829,652
|
|
|
2,195,228
|
|
|
1,835,192
|
|
|
1,886,042
|
|
|
2,214,102
|
|
|||||
Long-term debt
|
517,544
|
|
|
506,750
|
|
|
396,747
|
|
|
396,016
|
|
|
420,484
|
|
|||||
Total stockholders’ equity
|
1,030,126
|
|
|
1,409,016
|
|
|
1,235,202
|
|
|
1,257,020
|
|
|
1,395,356
|
|
|
Year ended December 31,
|
||||||||||||||||||
(in thousands)
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
Other financial data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided by (used in) operating activities
|
$
|
2,407
|
|
|
$
|
(40,033
|
)
|
|
$
|
64,742
|
|
|
$
|
155,913
|
|
|
$
|
269,966
|
|
Capital expenditures for property and equipment
|
(24,043
|
)
|
|
(26,709
|
)
|
|
(16,828
|
)
|
|
(32,291
|
)
|
|
(53,792
|
)
|
|||||
Proceeds from sale of property and equipment
|
9,258
|
|
|
1,971
|
|
|
9,763
|
|
|
1,821
|
|
|
2,718
|
|
|||||
Acquisition of businesses, net of cash acquired
|
(60,622
|
)
|
|
(162,189
|
)
|
|
(4,072
|
)
|
|
(60,836
|
)
|
|
(38,289
|
)
|
|||||
Net cash used in investing activities
|
(75,407
|
)
|
|
(187,968
|
)
|
|
(11,137
|
)
|
|
(91,306
|
)
|
|
(70,691
|
)
|
|||||
Net cash provided by (used in) financing activities
|
6,522
|
|
|
100,563
|
|
|
86,195
|
|
|
(26,937
|
)
|
|
(162,018
|
)
|
•
|
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, protectors for artificial lift equipment and cables used in completions, composite plugs used for zonal isolation in hydraulic fracturing; and (ii) capital and consumable products sold to the pressure pumping, hydraulic fracturing and flowback services markets, including hydraulic fracturing pumps, pump consumables, cooling systems 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.
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Average global oil, $/bbl
|
|
|
|
|
|
|
||||||
West Texas Intermediate
|
|
$
|
65.07
|
|
|
$
|
50.80
|
|
|
$
|
43.29
|
|
United Kingdom Brent
|
|
$
|
71.11
|
|
|
$
|
54.12
|
|
|
$
|
43.67
|
|
|
|
|
|
|
|
|
||||||
Average North American Natural Gas, $/Mcf
|
|
|
|
|
|
|
||||||
Henry Hub
|
|
$
|
3.16
|
|
|
$
|
2.99
|
|
|
$
|
2.52
|
|
|
|
2018
|
|
2017
|
|
2016
|
|||
Active Rigs by Location
|
|
|
|
|
|
|
|||
United States
|
|
1,032
|
|
|
877
|
|
|
509
|
|
Canada
|
|
191
|
|
|
206
|
|
|
130
|
|
International
|
|
989
|
|
|
948
|
|
|
955
|
|
Global Active Rigs
|
|
2,212
|
|
|
2,031
|
|
|
1,594
|
|
|
|
|
|
|
|
|
|||
Land vs. Offshore Rigs
|
|
|
|
|
|
|
|||
Land
|
|
1,987
|
|
|
1,812
|
|
|
1,348
|
|
Offshore
|
|
225
|
|
|
219
|
|
|
246
|
|
Global Active Rigs
|
|
2,212
|
|
|
2,031
|
|
|
1,594
|
|
|
|
|
|
|
|
|
|||
U.S. Commodity Target, Land
|
|
|
|
|
|
|
|||
Oil/Gas
|
|
841
|
|
|
704
|
|
|
408
|
|
Gas
|
|
190
|
|
|
172
|
|
|
100
|
|
Unclassified
|
|
1
|
|
|
1
|
|
|
1
|
|
Total U.S. Land Rigs
|
|
1,032
|
|
|
877
|
|
|
509
|
|
|
|
|
|
|
|
|
|||
U.S. Well Path, Land
|
|
|
|
|
|
|
|||
Horizontal
|
|
900
|
|
|
737
|
|
|
400
|
|
Vertical
|
|
63
|
|
|
70
|
|
|
60
|
|
Directional
|
|
69
|
|
|
70
|
|
|
49
|
|
Total U.S. Active Land Rigs
|
|
1,032
|
|
|
877
|
|
|
509
|
|
(in millions of dollars)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Orders:
|
|
|
|
|
|
|
||||||
Drilling & Subsea
|
|
$
|
265.4
|
|
|
$
|
219.8
|
|
|
$
|
215.3
|
|
Completions
|
|
480.1
|
|
|
291.8
|
|
|
130.7
|
|
|||
Production & Infrastructure
|
|
370.8
|
|
|
358.3
|
|
|
250.8
|
|
|||
Total Orders
|
|
$
|
1,116.3
|
|
|
$
|
869.9
|
|
|
$
|
596.8
|
|
•
|
Since our initial public offering in 2012, we have grown our business both organically and through strategic acquisitions. We have expanded and diversified our product portfolio and business lines with the acquisition of two businesses in
2018
and three businesses in
2017
. The historical financial data for periods prior to the acquisitions does not include the results of any of the acquired companies for the periods presented and, as such, does not provide an accurate indication of our future results.
|
•
|
As we integrate acquired companies and further implement internal controls, processes and infrastructure to operate in compliance with the regulatory requirements applicable to companies with publicly traded shares, it is likely that we will incur incremental selling, general and administrative expenses relative to historical periods.
|
|
Year ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Net cash provided by (used in) operating activities
|
$
|
2,407
|
|
|
$
|
(40,033
|
)
|
|
$
|
64,742
|
|
Net cash used in investing activities
|
(75,407
|
)
|
|
(187,968
|
)
|
|
(11,137
|
)
|
|||
Net cash provided by financing activities
|
6,522
|
|
|
100,563
|
|
|
86,195
|
|
|||
Effect of exchange rate changes on cash
|
(1,497
|
)
|
|
8,232
|
|
|
(14,627
|
)
|
|||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
$
|
(67,975
|
)
|
|
$
|
(119,206
|
)
|
|
$
|
125,173
|
|
|
Year ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Net cash provided by (used in) operating activities
|
$
|
2,407
|
|
|
$
|
(40,033
|
)
|
|
$
|
64,742
|
|
Capital expenditures for property and equipment
|
(24,043
|
)
|
|
(26,709
|
)
|
|
(16,828
|
)
|
|||
Proceeds from sale of business, property and equipment
|
9,258
|
|
|
1,971
|
|
|
9,763
|
|
|||
Free cash flow, before acquisitions
|
$
|
(12,378
|
)
|
|
$
|
(64,771
|
)
|
|
$
|
57,677
|
|
•
|
at a redemption price of
101.563%
of their principal amount plus accrued and unpaid interest and additional interest, if any, for the twelve-month period beginning October 1, 2018; and then
|
•
|
at a redemption price of
100.000%
of their principal amount plus accrued interest and unpaid interest and additional interest, if any, beginning on October 1, 2019.
|
•
|
Failure to pay any principal when due or any interest, fees or other amount within certain grace periods;
|
•
|
Representations and warranties in the Credit Facility or other loan documents being incorrect or misleading in any material respect;
|
•
|
Failure to perform or otherwise comply with the covenants in the Credit Facility or other loan documents, subject, in certain instances, to grace periods;
|
•
|
Failure of the loan documents to create a valid and perfected security interest with respect to (a) collateral whose value is included in calculating the borrowing base having a fair market value in excess of $2.2 million or (b) other collateral having a fair market value in excess of $25 million;
|
•
|
The obligations of any guarantor under any guarantee of the indebtedness under the Credit Facility are materially limited or terminated by operation of law or any guarantor repudiates or purports to repudiate any such guaranty;
|
•
|
Default by us or our restricted subsidiaries in the payment at final maturity of any other indebtedness with a principal amount in excess of $25 million, or any default in the performance of any obligation or condition with respect to such indebtedness beyond the applicable grace period if the effect of the default is to permit or cause the acceleration of the indebtedness;
|
•
|
Bankruptcy or insolvency events involving us or our restricted subsidiaries;
|
•
|
The entry, and failure to pay, of one or more adverse judgments in excess of $25 million (except to the extent fully covered by an insurance policy pursuant to which the insurer has not denied coverage), upon which enforcement proceedings are commenced or that are not stayed pending appeal;
|
•
|
The occurrence of a change in control (as defined in the Credit Facility);
|
•
|
The invalidity or unenforceability of any loan document; and
|
•
|
The occurrence of certain ERISA events.
|
•
|
the time to complete infrastructure to support our and our customers’ operations, such as the construction of additional pipeline capacity in the Permian;
|
•
|
our ability to successfully manage our growth, including risks and uncertainties associated with integrating and retaining key employees of the businesses we acquire;
|
|
Page
|
|
Year ended December 31,
|
||||||||||
(in thousands, except per share information)
|
2018
|
|
2017
|
|
2016
|
||||||
Revenues
|
$
|
1,064,219
|
|
|
$
|
818,620
|
|
|
$
|
587,635
|
|
Cost of sales
|
807,847
|
|
|
629,832
|
|
|
487,900
|
|
|||
Gross profit
|
256,372
|
|
|
188,788
|
|
|
99,735
|
|
|||
Operating expenses
|
|
|
|
|
|
||||||
Selling, general and administrative expenses
|
286,980
|
|
|
253,713
|
|
|
227,008
|
|
|||
Goodwill and intangible asset impairments
|
363,522
|
|
|
69,062
|
|
|
—
|
|
|||
Transaction expenses
|
3,446
|
|
|
6,511
|
|
|
865
|
|
|||
Loss (gain) on disposal of assets and other
|
(438
|
)
|
|
2,097
|
|
|
2,638
|
|
|||
Total operating expenses
|
653,510
|
|
|
331,383
|
|
|
230,511
|
|
|||
Earnings from equity investment
|
140
|
|
|
1,000
|
|
|
1,824
|
|
|||
Operating loss
|
(396,998
|
)
|
|
(141,595
|
)
|
|
(128,952
|
)
|
|||
Other expense (income)
|
|
|
|
|
|
||||||
Interest expense
|
32,532
|
|
|
26,808
|
|
|
27,410
|
|
|||
Foreign exchange losses (gains) and other, net
|
(6,270
|
)
|
|
7,268
|
|
|
(21,341
|
)
|
|||
Gain on contribution of subsea rentals business
|
(33,506
|
)
|
|
—
|
|
|
—
|
|
|||
Gain realized on previously held equity investment
|
—
|
|
|
(120,392
|
)
|
|
—
|
|
|||
Deferred loan costs written off
|
—
|
|
|
—
|
|
|
2,978
|
|
|||
Total other expense (income), net
|
(7,244
|
)
|
|
(86,316
|
)
|
|
9,047
|
|
|||
Loss before income taxes
|
(389,754
|
)
|
|
(55,279
|
)
|
|
(137,999
|
)
|
|||
Income tax expense (benefit)
|
(15,674
|
)
|
|
4,121
|
|
|
(56,051
|
)
|
|||
Net loss
|
(374,080
|
)
|
|
(59,400
|
)
|
|
(81,948
|
)
|
|||
Less: Income attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
30
|
|
|||
Net loss attributable to common stockholders
|
(374,080
|
)
|
|
(59,400
|
)
|
|
(81,978
|
)
|
|||
|
|
|
|
|
|
||||||
Weighted average shares outstanding
|
|
|
|
|
|
||||||
Basic
|
108,771
|
|
|
98,689
|
|
|
91,226
|
|
|||
Diluted
|
108,771
|
|
|
98,689
|
|
|
91,226
|
|
|||
Loss per share
|
|
|
|
|
|
||||||
Basic
|
$
|
(3.44
|
)
|
|
$
|
(0.60
|
)
|
|
$
|
(0.90
|
)
|
Diluted
|
$
|
(3.44
|
)
|
|
$
|
(0.60
|
)
|
|
$
|
(0.90
|
)
|
|
|
|
|
|
|
||||||
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
||||||
Net loss
|
(374,080
|
)
|
|
(59,400
|
)
|
|
(81,948
|
)
|
|||
Change in foreign currency translation, net of tax of $0
|
(24,752
|
)
|
|
36,163
|
|
|
(45,722
|
)
|
|||
Gain (loss) on pension liability
|
1,489
|
|
|
107
|
|
|
(335
|
)
|
|||
Comprehensive loss
|
(397,343
|
)
|
|
(23,130
|
)
|
|
(128,005
|
)
|
|||
Less: comprehensive loss attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
(162
|
)
|
|||
Comprehensive loss attributable to common stockholders
|
$
|
(397,343
|
)
|
|
$
|
(23,130
|
)
|
|
$
|
(128,167
|
)
|
(in thousands, except share information)
|
December 31,
2018 |
|
December 31,
2017 |
||||
Assets
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
47,241
|
|
|
$
|
115,216
|
|
Accounts receivable—trade, net
|
206,055
|
|
|
202,914
|
|
||
Inventories, net
|
479,023
|
|
|
443,177
|
|
||
Prepaid expenses and other current assets
|
23,677
|
|
|
19,490
|
|
||
Costs and estimated profits in excess of billings
|
9,159
|
|
|
9,584
|
|
||
Accrued revenue
|
862
|
|
|
—
|
|
||
Total current assets
|
766,017
|
|
|
790,381
|
|
||
Property and equipment, net of accumulated depreciation
|
177,358
|
|
|
197,281
|
|
||
Deferred financing costs, net
|
2,071
|
|
|
2,900
|
|
||
Intangibles, net
|
359,048
|
|
|
443,064
|
|
||
Goodwill
|
469,647
|
|
|
755,245
|
|
||
Investment in unconsolidated subsidiary
|
44,982
|
|
|
—
|
|
||
Deferred income taxes, net
|
1,234
|
|
|
3,344
|
|
||
Other long-term assets
|
9,295
|
|
|
3,013
|
|
||
Total assets
|
$
|
1,829,652
|
|
|
$
|
2,195,228
|
|
Liabilities and Equity
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Current portion of long-term debt
|
$
|
1,167
|
|
|
$
|
1,156
|
|
Accounts payable—trade
|
143,186
|
|
|
137,684
|
|
||
Accrued liabilities
|
81,032
|
|
|
66,765
|
|
||
Deferred revenue
|
8,335
|
|
|
8,819
|
|
||
Billings in excess of costs and profits recognized
|
3,210
|
|
|
1,881
|
|
||
Total current liabilities
|
236,930
|
|
|
216,305
|
|
||
Long-term debt, net of current portion
|
517,544
|
|
|
506,750
|
|
||
Deferred income taxes, net
|
15,299
|
|
|
31,232
|
|
||
Other long-term liabilities
|
29,753
|
|
|
31,925
|
|
||
Total liabilities
|
799,526
|
|
|
786,212
|
|
||
Commitments and contingencies
|
|
|
|
|
|||
Equity
|
|
|
|
||||
Common stock, $0.01 par value, 296,000,000 shares authorized, 117,411,158 and 116,343,656 shares issued
|
1,174
|
|
|
1,163
|
|
||
Additional paid-in capital
|
1,214,928
|
|
|
1,195,339
|
|
||
Treasury stock at cost, 8,200,477 and 8,190,362 shares
|
(134,434
|
)
|
|
(134,293
|
)
|
||
Retained earnings
|
63,688
|
|
|
438,774
|
|
||
Accumulated other comprehensive loss
|
(115,230
|
)
|
|
(91,967
|
)
|
||
Total stockholders’ equity
|
1,030,126
|
|
|
1,409,016
|
|
||
Total liabilities and equity
|
$
|
1,829,652
|
|
|
$
|
2,195,228
|
|
|
Year ended December 31,
|
||||||||||
(in thousands, except share information)
|
2018
|
|
2017
|
|
2016
|
||||||
Cash flows from operating activities
|
|
|
|
|
|
||||||
Net loss
|
$
|
(374,080
|
)
|
|
$
|
(59,400
|
)
|
|
$
|
(81,948
|
)
|
Adjustments to reconcile net loss to net cash provided by (used in) investing activities:
|
|
|
|
|
|
||||||
Depreciation expense
|
33,148
|
|
|
34,401
|
|
|
35,636
|
|
|||
Amortization of intangible assets
|
41,360
|
|
|
30,728
|
|
|
26,124
|
|
|||
Goodwill and intangible asset impairments
|
363,522
|
|
|
69,062
|
|
|
—
|
|
|||
Inventory write downs
|
36,606
|
|
|
14,620
|
|
|
25,537
|
|
|||
Stock-based compensation expense
|
19,927
|
|
|
20,310
|
|
|
20,535
|
|
|||
(Earnings) loss from unconsolidated subsidiaries, net of distributions
|
(140
|
)
|
|
2,073
|
|
|
(1,421
|
)
|
|||
Gain on contribution of subsea rentals business
|
(33,506
|
)
|
|
—
|
|
|
—
|
|
|||
Gain realized on previously held equity investment
|
—
|
|
|
(120,392
|
)
|
|
—
|
|
|||
Deferred income taxes
|
(13,552
|
)
|
|
149
|
|
|
(24,418
|
)
|
|||
Deferred loan costs written off
|
—
|
|
|
—
|
|
|
2,978
|
|
|||
Provision for doubtful accounts
|
3,342
|
|
|
2,903
|
|
|
485
|
|
|||
Other
|
1,086
|
|
|
3,886
|
|
|
4,389
|
|
|||
Changes in operating assets and liabilities
|
|
|
|
|
|
||||||
Accounts receivable—trade
|
(4,833
|
)
|
|
(64,844
|
)
|
|
29,450
|
|
|||
Inventories
|
(60,903
|
)
|
|
(66,646
|
)
|
|
57,294
|
|
|||
Prepaid expenses and other current assets
|
(7,980
|
)
|
|
12,462
|
|
|
1,071
|
|
|||
Income tax receivable
|
—
|
|
|
30,929
|
|
|
(32,801
|
)
|
|||
Cost and estimated profits in excess of billings
|
1,273
|
|
|
(171
|
)
|
|
1,897
|
|
|||
Accounts payable, deferred revenue and other accrued liabilities
|
(4,192
|
)
|
|
52,142
|
|
|
3,799
|
|
|||
Billings in excess of costs and estimated profits earned
|
1,329
|
|
|
(2,245
|
)
|
|
(3,865
|
)
|
|||
Net cash provided by (used in) operating activities
|
$
|
2,407
|
|
|
$
|
(40,033
|
)
|
|
$
|
64,742
|
|
Cash flows from investing activities
|
|
|
|
|
|
||||||
Capital expenditures for property and equipment
|
(24,043
|
)
|
|
(26,709
|
)
|
|
(16,828
|
)
|
|||
Acquisition of businesses, net of cash acquired
|
(60,622
|
)
|
|
(162,189
|
)
|
|
(4,072
|
)
|
|||
Investment in unconsolidated subsidiary
|
—
|
|
|
(1,041
|
)
|
|
—
|
|
|||
Proceeds from sale of business, property and equipment
|
9,258
|
|
|
1,971
|
|
|
9,763
|
|
|||
Net cash used in investing activities
|
$
|
(75,407
|
)
|
|
$
|
(187,968
|
)
|
|
$
|
(11,137
|
)
|
Cash flows from financing activities
|
|
|
|
|
|
||||||
Borrowings of debt
|
221,980
|
|
|
107,431
|
|
|
—
|
|
|||
Repayments of debt
|
(211,783
|
)
|
|
—
|
|
|
—
|
|
|||
Repurchases of stock
|
(2,777
|
)
|
|
(4,742
|
)
|
|
(623
|
)
|
|||
Proceeds from stock issuance
|
249
|
|
|
1,491
|
|
|
87,676
|
|
|||
Payment of capital lease obligations
|
(1,147
|
)
|
|
(1,187
|
)
|
|
(92
|
)
|
|||
Deferred financing costs
|
—
|
|
|
(2,430
|
)
|
|
(766
|
)
|
|||
Net cash provided by financing activities
|
$
|
6,522
|
|
|
$
|
100,563
|
|
|
$
|
86,195
|
|
|
|
|
|
|
|
||||||
Effect of exchange rate changes on cash
|
(1,497
|
)
|
|
8,232
|
|
|
(14,627
|
)
|
|||
|
|
|
|
|
|
||||||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
(67,975
|
)
|
|
(119,206
|
)
|
|
125,173
|
|
|||
Cash, cash equivalents and restricted cash at beginning of period
|
115,216
|
|
|
234,422
|
|
|
109,249
|
|
|||
Cash, cash equivalents and restricted cash at end of period
|
$
|
47,241
|
|
|
$
|
115,216
|
|
|
$
|
234,422
|
|
Supplemental cash flow disclosures
|
|
|
|
|
|
||||||
Cash paid for interest
|
30,269
|
|
|
25,986
|
|
|
26,331
|
|
|||
Cash paid (refunded) for income taxes
|
5,560
|
|
|
(29,094
|
)
|
|
(6,273
|
)
|
|||
Noncash investing and financing activities
|
|
|
|
|
|
||||||
Acquisition via issuance of stock
|
—
|
|
|
177,972
|
|
|
—
|
|
|||
Assets contributed for equity method investment
|
18,070
|
|
|
—
|
|
|
—
|
|
|||
Note receivable related to equity method investment transaction
|
4,067
|
|
|
—
|
|
|
—
|
|
|||
Accrued purchases of property and equipment
|
1,708
|
|
|
1,398
|
|
|
797
|
|
|||
Accrued consideration for acquisition
|
4,650
|
|
|
—
|
|
|
—
|
|
|
|
Common stock
|
|
Additional
paid in capital |
|
Treasury shares
|
|
Retained
earnings |
|
Accumulated
other comprehensive income / (loss) |
|
Total
common stockholders’ equity |
|
Non
controlling Interest |
|
Total
equity |
||||||||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|||||||||||||||||||||||||||||||
|
|
(in thousands of dollars, except share information)
|
||||||||||||||||||||||||||||||||||||
Balance at December 31, 2015
|
|
98,605,902
|
|
|
$
|
986
|
|
|
$
|
891,248
|
|
|
(8,145,802
|
)
|
|
$
|
(133,318
|
)
|
|
$
|
580,152
|
|
|
$
|
(82,048
|
)
|
|
$
|
1,257,020
|
|
|
$
|
397
|
|
|
$
|
1,257,417
|
|
Restricted stock issuance, net of forfeitures
|
|
670,769
|
|
|
6
|
|
|
(1,051
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,045
|
)
|
|
—
|
|
|
(1,045
|
)
|
||||||||
Stock-based compensation expense
|
|
—
|
|
|
—
|
|
|
20,535
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20,535
|
|
|
—
|
|
|
20,535
|
|
||||||||
Exercised stock options
|
|
151,335
|
|
|
2
|
|
|
1,710
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,712
|
|
|
—
|
|
|
1,712
|
|
||||||||
Issuance of performance shares
|
|
42,443
|
|
|
1
|
|
|
(48
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(47
|
)
|
|
—
|
|
|
(47
|
)
|
||||||||
Shares issued in employee stock purchase plan
|
|
186,679
|
|
|
2
|
|
|
1,976
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,978
|
|
|
—
|
|
|
1,978
|
|
||||||||
Equity offering
|
|
4,025,000
|
|
|
40
|
|
|
85,038
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
85,078
|
|
|
—
|
|
|
85,078
|
|
||||||||
Treasury stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(29,161
|
)
|
|
(623
|
)
|
|
—
|
|
|
—
|
|
|
(623
|
)
|
|
—
|
|
|
(623
|
)
|
||||||||
Excess tax benefits
|
|
—
|
|
|
—
|
|
|
(1,239
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,239
|
)
|
|
—
|
|
|
(1,239
|
)
|
||||||||
Change in pension liability
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(335
|
)
|
|
(335
|
)
|
|
—
|
|
|
(335
|
)
|
||||||||
Currency translation adjustment
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(45,854
|
)
|
|
(45,854
|
)
|
|
132
|
|
|
(45,722
|
)
|
||||||||
Net Loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(81,978
|
)
|
|
—
|
|
|
(81,978
|
)
|
|
30
|
|
|
(81,948
|
)
|
||||||||
Balance at December 31, 2016
|
|
103,682,128
|
|
|
$
|
1,037
|
|
|
$
|
998,169
|
|
|
(8,174,963
|
)
|
|
$
|
(133,941
|
)
|
|
$
|
498,174
|
|
|
$
|
(128,237
|
)
|
|
$
|
1,235,202
|
|
|
$
|
559
|
|
|
$
|
1,235,761
|
|
Restricted stock issuance, net of forfeitures
|
|
429,321
|
|
|
3
|
|
|
(3,152
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,149
|
)
|
|
—
|
|
|
(3,149
|
)
|
||||||||
Stock-based compensation expense
|
|
—
|
|
|
—
|
|
|
20,310
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20,310
|
|
|
—
|
|
|
20,310
|
|
||||||||
Exercised stock options
|
|
161,233
|
|
|
2
|
|
|
1,489
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,491
|
|
|
—
|
|
|
1,491
|
|
||||||||
Issuance of performance shares
|
|
250,643
|
|
|
3
|
|
|
(1,244
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,241
|
)
|
|
—
|
|
|
(1,241
|
)
|
||||||||
Shares issued in employee stock purchase plan
|
|
135,882
|
|
|
1
|
|
|
1,912
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,913
|
|
|
—
|
|
|
1,913
|
|
||||||||
Shares issued for acquisition
|
|
11,684,449
|
|
|
117
|
|
|
177,855
|
|
|
|
|
|
|
|
|
|
|
177,972
|
|
|
|
|
177,972
|
|
|||||||||||||
Sale of non-controlling interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(559
|
)
|
|
(559
|
)
|
||||||||
Treasury stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(15,399
|
)
|
|
(352
|
)
|
|
—
|
|
|
—
|
|
|
(352
|
)
|
|
—
|
|
|
(352
|
)
|
||||||||
Change in pension liability
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
107
|
|
|
107
|
|
|
—
|
|
|
107
|
|
||||||||
Currency translation adjustment
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
36,163
|
|
|
36,163
|
|
|
—
|
|
|
36,163
|
|
||||||||
Net Loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(59,400
|
)
|
|
—
|
|
|
(59,400
|
)
|
|
—
|
|
|
(59,400
|
)
|
||||||||
Balance at December 31, 2017
|
|
116,343,656
|
|
|
$
|
1,163
|
|
|
$
|
1,195,339
|
|
|
(8,190,362
|
)
|
|
$
|
(134,293
|
)
|
|
$
|
438,774
|
|
|
$
|
(91,967
|
)
|
|
$
|
1,409,016
|
|
|
$
|
—
|
|
|
$
|
1,409,016
|
|
Restricted stock issuance, net of forfeitures
|
|
702,145
|
|
|
7
|
|
|
(2,370
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,363
|
)
|
|
—
|
|
|
(2,363
|
)
|
||||||||
Stock-based compensation expense
|
|
—
|
|
|
—
|
|
|
19,927
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19,927
|
|
|
—
|
|
|
19,927
|
|
||||||||
Exercised stock options
|
|
35,261
|
|
|
—
|
|
|
249
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
249
|
|
|
—
|
|
|
249
|
|
||||||||
Issuance of performance shares
|
|
156,953
|
|
|
2
|
|
|
(275
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(273
|
)
|
|
—
|
|
|
(273
|
)
|
||||||||
Shares issued in employee stock purchase plan
|
|
164,743
|
|
|
2
|
|
|
1,933
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,935
|
|
|
—
|
|
|
1,935
|
|
||||||||
Contingent shares issued for acquisition of Cooper
|
|
8,400
|
|
|
—
|
|
|
125
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
125
|
|
|
—
|
|
|
125
|
|
||||||||
Treasury stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10,115
|
)
|
|
(141
|
)
|
|
—
|
|
|
—
|
|
|
(141
|
)
|
|
—
|
|
|
(141
|
)
|
||||||||
Adjustment for adoption of ASU 2016-16 (Intra-entity asset transfers)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,006
|
)
|
|
—
|
|
|
(1,006
|
)
|
|
—
|
|
|
(1,006
|
)
|
||||||||
Change in pension liability
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,489
|
|
|
1,489
|
|
|
—
|
|
|
1,489
|
|
||||||||
Currency translation adjustment
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(24,752
|
)
|
|
(24,752
|
)
|
|
—
|
|
|
(24,752
|
)
|
||||||||
Net Loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(374,080
|
)
|
|
—
|
|
|
(374,080
|
)
|
|
—
|
|
|
(374,080
|
)
|
||||||||
Balance at December 31, 2018
|
|
117,411,158
|
|
|
$
|
1,174
|
|
|
$
|
1,214,928
|
|
|
(8,200,477
|
)
|
|
$
|
(134,434
|
)
|
|
$
|
63,688
|
|
|
$
|
(115,230
|
)
|
|
$
|
1,030,126
|
|
|
$
|
—
|
|
|
$
|
1,030,126
|
|
Period ended
|
|
Balance at beginning of period
|
|
Charged to expense
|
|
Deductions or other
|
|
Balance at end of period
|
||||||||
December 31, 2016
|
|
$
|
8,119
|
|
|
$
|
485
|
|
|
$
|
(5,273
|
)
|
|
$
|
3,331
|
|
December 31, 2017
|
|
3,331
|
|
|
2,903
|
|
|
(439
|
)
|
|
5,795
|
|
||||
December 31, 2018
|
|
5,795
|
|
|
3,342
|
|
|
(1,705
|
)
|
|
7,432
|
|
Period ended
|
|
Balance at beginning of period
|
|
Charged to expense
|
|
Deductions or other
|
|
Balance at end of period
|
||||||||
December 31, 2016
|
|
$
|
5,697
|
|
|
$
|
4,031
|
|
|
$
|
(6,504
|
)
|
|
$
|
3,224
|
|
December 31, 2017
|
|
3,224
|
|
|
3,172
|
|
|
(2,776
|
)
|
|
3,620
|
|
||||
December 31, 2018
|
|
3,620
|
|
|
1,487
|
|
|
(2,237
|
)
|
|
2,870
|
|
•
|
Level 1 - inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date;
|
•
|
Level 2 - inputs other than quoted prices included within Level 1 that are observable for the assets or liability, either directly or indirectly; and
|
•
|
Level 3 - inputs are unobservable for the asset or liability, which reflect the best judgment of management.
|
•
|
reviewed existing lease contracts and identified the relevant accounting impacts of the new standard;
|
•
|
provided internal training and awareness related to the new lease standard to key stakeholders throughout our organization;
|
•
|
implemented new processes and controls in anticipation of adopting the new guidance; and
|
•
|
implemented a new cloud based lease software management system.
|
•
|
use of the transition package of practical expedients which, among other things, allows us to carry forward the historical lease classification for existing leases;
|
•
|
making an accounting policy election that will keep leases with an initial term of 12 months or less off of the balance sheet; and
|
•
|
electing to not separate non-lease components from lease components for all classes of underlying lease assets
|
|
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
|
|
|
December 31, 2018
|
||||||||||
(in thousands, unaudited)
|
As Reported
|
|
Amount Without Adoption of ASC 606
|
|
Effect of Change
Higher/(Lower) |
||||||
Accounts receivable—trade, net
|
$
|
206,055
|
|
|
$
|
206,917
|
|
|
$
|
(862
|
)
|
Accrued revenue
|
862
|
|
|
—
|
|
|
862
|
|
|
December 31, 2018
|
|
January 1, 2018
|
|
Increase / (Decrease)
|
|||||||||
|
|
|
$
|
|
%
|
|||||||||
Accrued revenue
|
$
|
862
|
|
|
$
|
3,235
|
|
|
|
|
|
|||
Costs and estimated profits in excess of billings
|
9,159
|
|
|
9,584
|
|
|
|
|
|
|||||
Contract assets
|
$
|
10,021
|
|
|
$
|
12,819
|
|
|
$
|
(2,798
|
)
|
|
(22
|
)%
|
|
|
|
|
|
|
|
|
|||||||
Deferred revenue
|
$
|
8,335
|
|
|
$
|
8,819
|
|
|
|
|
|
|||
Billings in excess of costs and profits recognized
|
3,210
|
|
|
1,881
|
|
|
|
|
|
|||||
Contract liabilities
|
$
|
11,545
|
|
|
$
|
10,700
|
|
|
$
|
845
|
|
|
8
|
%
|
Current assets, net of cash acquired
|
|
$
|
18,655
|
|
Non-current assets
|
|
238
|
|
|
Property and equipment
|
|
2,408
|
|
|
Intangible assets (primarily customer relationships)
|
|
30,400
|
|
|
Tax-deductible goodwill
|
|
20,559
|
|
|
Current liabilities
|
|
(12,633
|
)
|
|
Long-term liabilities
|
|
$
|
(2,355
|
)
|
Net assets acquired, net of cash acquired
|
|
$
|
57,272
|
|
|
Pro Forma Year Ended December 31,
|
||||||
|
2017
|
|
2016
|
||||
Net sales
|
$
|
901,856
|
|
|
$
|
659,108
|
|
Net loss attributable to common stockholders
|
(125,204
|
)
|
|
(101,173
|
)
|
•
|
An increase in depreciation and amortization expense resulting from the fair value adjustments of property, plant and equipment and intangible assets recognized as part of the Global Tubing Acquisition;
|
•
|
Removal of earnings from equity investment;
|
•
|
In 2017, we incurred
$4.5 million
of acquisition-related costs in connection with this transaction. These expenses are included in transaction expenses on our consolidated statements of comprehensive income (loss) for the year ended December 31, 2017 and are reflected in pro forma earnings for the year ended December 31, 2016 in the table above;
|
•
|
An increase in stock based compensation costs as a result of the full vesting of pre-acquisition management incentive units and granting of additional restricted stock units to Global Tubing management;
|
•
|
Adjusted interest expense to remove the historical interest expense from Global Tubing’s historical debt and include interest expense from the amount borrowed on our Credit Facility to finance the acquisition; and
|
•
|
As a result of acquiring the remaining equity interest of Global Tubing, the Company’s previously held equity interest was remeasured to fair value, resulting in a gain of approximately
$120.4 million
. This gain has been recognized in the consolidated statement of comprehensive loss for the year ended December 31, 2017 and is excluded from the pro forma results above; and
|
•
|
Estimated tax benefits of approximately
$45 million
and
$12 million
in 2017 and 2016, respectively, to tax-effect the aforementioned pro forma adjustments using an estimated U.S. federal income tax rate of 35%.
|
|
|
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
|
|
|
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 developed technologies and customer relationships)
|
|
17,090
|
|
|
Tax-deductible goodwill
|
|
16,472
|
|
|
Non-tax deductible goodwill
|
|
3,099
|
|
|
Current liabilities
|
|
(1,329
|
)
|
|
Net assets acquired
|
|
$
|
39,191
|
|
|
December 31,
2018 |
|
December 31,
2017 |
||||
Raw materials and parts
|
$
|
212,526
|
|
|
$
|
160,093
|
|
Work in process
|
39,494
|
|
|
51,941
|
|
||
Finished goods
|
302,590
|
|
|
305,461
|
|
||
Gross inventories
|
554,610
|
|
|
517,495
|
|
||
Inventory reserve
|
(75,587
|
)
|
|
(74,318
|
)
|
||
Inventories
|
$
|
479,023
|
|
|
$
|
443,177
|
|
Period ended
|
Balance at beginning of period
|
|
Charged to expense
|
|
Deductions or other
|
|
Balance at end of period
|
||||||||
December 31, 2016
|
$
|
77,888
|
|
|
$
|
25,537
|
|
|
$
|
(35,073
|
)
|
|
$
|
68,352
|
|
December 31, 2017
|
68,352
|
|
|
14,620
|
|
|
(8,654
|
)
|
|
$
|
74,318
|
|
|||
December 31, 2018
|
74,318
|
|
|
36,606
|
|
|
(35,337
|
)
|
|
$
|
75,587
|
|
|
|
Estimated useful lives
|
|
December 31,
|
||||||
|
|
|
2018
|
|
2017
|
|||||
Land
|
|
|
|
$
|
9,755
|
|
|
$
|
12,408
|
|
Buildings and leasehold improvements
|
|
5-30
|
|
103,761
|
|
|
90,909
|
|
||
Computer equipment
|
|
3-5
|
|
54,721
|
|
|
42,074
|
|
||
Machinery & equipment
|
|
5-10
|
|
162,110
|
|
|
169,203
|
|
||
Furniture & fixtures
|
|
3-10
|
|
6,631
|
|
|
6,338
|
|
||
Vehicles
|
|
3-5
|
|
6,160
|
|
|
8,048
|
|
||
Construction in progress
|
|
|
|
9,155
|
|
|
14,589
|
|
||
|
|
|
|
352,293
|
|
|
343,569
|
|
||
Less: accumulated depreciation
|
|
|
|
(180,717
|
)
|
|
(160,787
|
)
|
||
Property & equipment, net
|
|
|
|
171,576
|
|
|
182,782
|
|
||
|
|
|
|
|
|
|
||||
Rental equipment
|
|
3-10
|
|
9,535
|
|
|
70,679
|
|
||
Less: accumulated depreciation
|
|
|
|
(3,753
|
)
|
|
(56,180
|
)
|
||
Rental equipment, net
|
|
|
|
5,782
|
|
|
14,499
|
|
||
|
|
|
|
|
|
|
||||
Total property & equipment, net
|
|
|
|
$
|
177,358
|
|
|
$
|
197,281
|
|
|
Drilling & Subsea
|
Completions
|
Production & Infrastructure
|
Total
|
||||||||
Goodwill balance at December 31, 2016
|
$
|
307,806
|
|
$
|
327,293
|
|
$
|
17,644
|
|
$
|
652,743
|
|
Acquisitions, net of dispositions
|
—
|
|
153,485
|
|
1,595
|
|
155,080
|
|
||||
Impairment
|
(68,004
|
)
|
—
|
|
—
|
|
(68,004
|
)
|
||||
Impact of non-U.S. local currency translation
|
11,652
|
|
3,567
|
|
207
|
|
15,426
|
|
||||
Goodwill balance at December 31, 2017
|
251,454
|
|
484,345
|
|
19,446
|
|
755,245
|
|
||||
Acquisitions, net of dispositions
|
—
|
|
22,312
|
|
—
|
|
22,312
|
|
||||
Impairment
|
(245,412
|
)
|
(53,377
|
)
|
—
|
|
(298,789
|
)
|
||||
Impact of non-U.S. local currency translation
|
(6,042
|
)
|
(2,849
|
)
|
(230
|
)
|
$
|
(9,121
|
)
|
|||
Goodwill balance at December 31, 2018
|
$
|
—
|
|
$
|
450,431
|
|
$
|
19,216
|
|
$
|
469,647
|
|
|
December 31, 2018
|
||||||||||||
|
Gross carrying
amount |
|
Accumulated
amortization |
|
Net intangibles
|
|
Amortization
period (in years) |
||||||
Customer relationships
|
$
|
337,546
|
|
|
$
|
(110,228
|
)
|
|
$
|
227,318
|
|
|
4 - 15
|
Patents and technology
|
104,394
|
|
|
(17,148
|
)
|
|
87,246
|
|
|
5 - 17
|
|||
Non-compete agreements
|
6,245
|
|
|
(5,600
|
)
|
|
645
|
|
|
3 - 6
|
|||
Trade names
|
47,493
|
|
|
(18,107
|
)
|
|
29,386
|
|
|
10 - 15
|
|||
Distributor relationships
|
22,160
|
|
|
(17,602
|
)
|
|
4,558
|
|
|
8 - 15
|
|||
Trademark
|
10,319
|
|
|
(424
|
)
|
|
9,895
|
|
|
15 - Indefinite
|
|||
Intangible Assets Total
|
$
|
528,157
|
|
|
$
|
(169,109
|
)
|
|
$
|
359,048
|
|
|
|
|
December 31, 2017
|
||||||||||||
|
Gross carrying
amount |
|
Accumulated
amortization |
|
Net 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
|
|||
Trademark
|
10,319
|
|
|
(85
|
)
|
|
10,234
|
|
|
15 - Indefinite
|
|||
Intangible Assets Total
|
$
|
642,917
|
|
|
$
|
(199,853
|
)
|
|
$
|
443,064
|
|
|
|
|
December 31,
2018 |
|
December 31,
2017 |
||||
6.25% Senior notes due October 2021
|
$
|
400,000
|
|
|
$
|
400,000
|
|
Unamortized debt premium
|
1,176
|
|
|
1,583
|
|
||
Debt issuance cost
|
(3,121
|
)
|
|
(4,222
|
)
|
||
Senior secured revolving credit facility
|
119,000
|
|
|
108,446
|
|
||
Other debt
|
1,656
|
|
|
2,099
|
|
||
Total debt
|
518,711
|
|
|
507,906
|
|
||
Less: current maturities
|
(1,167
|
)
|
|
(1,156
|
)
|
||
Long-term debt
|
$
|
517,544
|
|
|
$
|
506,750
|
|
•
|
at a redemption price of
101.563%
of their principal amount plus accrued and unpaid interest and additional interest, if any, for the twelve-month period beginning October 1, 2018; and then
|
•
|
at a redemption price of
100.000%
of their principal amount plus accrued interest and unpaid interest and additional interest, if any, beginning on October 1, 2019.
|
2019
|
|
$
|
1,167
|
|
2020
|
|
489
|
|
|
2021
|
|
519,000
|
|
|
2022
|
|
—
|
|
|
2023
|
|
—
|
|
|
Thereafter
|
|
—
|
|
|
Total future payment
|
|
$
|
520,656
|
|
Add: Unamortized debt premium
|
|
1,176
|
|
|
Less: Debt issuance cost
|
|
(3,121
|
)
|
|
Total debt
|
|
$
|
518,711
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
U.S.
|
$
|
(285,141
|
)
|
|
$
|
(3,015
|
)
|
|
$
|
(155,058
|
)
|
Non-U.S.
|
(104,613
|
)
|
|
(52,264
|
)
|
|
17,059
|
|
|||
Loss before income taxes
|
$
|
(389,754
|
)
|
|
$
|
(55,279
|
)
|
|
$
|
(137,999
|
)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Current
|
|
|
|
|
|
||||||
U.S. Federal and state
|
$
|
(6,932
|
)
|
|
$
|
(1,426
|
)
|
|
$
|
(38,589
|
)
|
Non-U.S.
|
4,810
|
|
|
5,398
|
|
|
6,956
|
|
|||
Total current
|
(2,122
|
)
|
|
3,972
|
|
|
(31,633
|
)
|
|||
Deferred
|
|
|
|
|
|
||||||
U.S. Federal and state
|
(21,467
|
)
|
|
6,415
|
|
|
(18,290
|
)
|
|||
Non-U.S.
|
7,915
|
|
|
(6,266
|
)
|
|
(6,128
|
)
|
|||
Total deferred
|
(13,552
|
)
|
|
149
|
|
|
(24,418
|
)
|
|||
Provision (benefit) for income taxes
|
$
|
(15,674
|
)
|
|
$
|
4,121
|
|
|
$
|
(56,051
|
)
|
|
2018
|
|
2017
|
|
2016
|
||||||||||||
Income tax expense at the statutory rate
|
$
|
(81,849
|
)
|
(21.0
|
)%
|
|
$
|
(19,348
|
)
|
(35.0
|
)%
|
|
$
|
(48,300
|
)
|
(35.0
|
)%
|
State taxes, net of federal tax benefit
|
(2,564
|
)
|
(0.7
|
)%
|
|
(294
|
)
|
(0.5
|
)%
|
|
(1,425
|
)
|
(1.0
|
)%
|
|||
Non-U.S. operations
|
(10,166
|
)
|
(2.6
|
)%
|
|
6,337
|
|
11.5
|
%
|
|
(5,791
|
)
|
(4.2
|
)%
|
|||
Domestic incentives
|
(286
|
)
|
(0.1
|
)%
|
|
(254
|
)
|
(0.5
|
)%
|
|
(170
|
)
|
(0.1
|
)%
|
|||
Prior year federal, non-U.S. and state tax
|
(2,880
|
)
|
(0.7
|
)%
|
|
(1,283
|
)
|
(2.3
|
)%
|
|
(777
|
)
|
(0.6
|
)%
|
|||
Nondeductible expenses
|
502
|
|
0.1
|
%
|
|
644
|
|
1.2
|
%
|
|
345
|
|
0.3
|
%
|
|||
Goodwill impairment
|
46,051
|
|
11.8
|
%
|
|
14,731
|
|
26.6
|
%
|
|
—
|
|
—
|
%
|
|||
Global Tubing acquisition
|
—
|
|
—
|
%
|
|
(9,160
|
)
|
(16.6
|
)%
|
|
—
|
|
—
|
%
|
|||
U.S. tax reform
|
(15,604
|
)
|
(4.0
|
)%
|
|
10,138
|
|
18.3
|
%
|
|
—
|
|
—
|
%
|
|||
Valuation allowance
|
50,005
|
|
12.8
|
%
|
|
4,523
|
|
8.2
|
%
|
|
—
|
|
—
|
%
|
|||
Other
|
1,117
|
|
0.4
|
%
|
|
(1,913
|
)
|
(3.4
|
)%
|
|
67
|
|
—
|
%
|
|||
Income tax expense (benefit)
|
$
|
(15,674
|
)
|
(4.0
|
)%
|
|
$
|
4,121
|
|
7.5
|
%
|
|
$
|
(56,051
|
)
|
(40.6
|
)%
|
–
|
$15.6 million
of tax benefit associated with U.S. tax reform, as described below,
|
–
|
$46.1 million
of tax expense associated with the impairment of non-tax deductible goodwill for our Drilling and Downhole reporting units, and
|
–
|
$50.0 million
of tax expense consisting of a full valuation allowance of
$18.4 million
against our deferred tax assets in the U.K., Germany and Singapore and a partial valuation allowance of
$31.6 million
against our deferred tax assets in the U.S. as further described below under the primary components of deferred taxes.
|
|
2018
|
|
2017
|
||||
Deferred tax assets
|
|
|
|
||||
Reserves and accruals
|
$
|
7,259
|
|
|
$
|
5,932
|
|
Inventory
|
18,694
|
|
|
20,836
|
|
||
Stock awards
|
5,637
|
|
|
6,235
|
|
||
Net operating loss and other tax carryforwards
|
66,098
|
|
|
31,164
|
|
||
Other
|
549
|
|
|
1,419
|
|
||
Gross deferred tax assets
|
98,237
|
|
|
65,586
|
|
||
Valuation allowance
|
(54,441
|
)
|
|
(4,523
|
)
|
||
Total deferred tax assets
|
43,796
|
|
|
61,063
|
|
||
Deferred tax liabilities
|
|
|
|
||||
Property and equipment
|
(9,565
|
)
|
|
(12,172
|
)
|
||
Goodwill and intangible assets
|
(42,502
|
)
|
|
(76,454
|
)
|
||
Investment in unconsolidated subsidiary
|
(5,402
|
)
|
|
—
|
|
||
Prepaid expenses and other
|
(392
|
)
|
|
(325
|
)
|
||
Total deferred tax liabilities
|
(57,861
|
)
|
|
(88,951
|
)
|
||
Net deferred tax liabilities
|
$
|
(14,065
|
)
|
|
$
|
(27,888
|
)
|
Balance at January 1, 2018
|
|
$
|
14,768
|
|
Additional based on tax positions related to current year
|
|
1,485
|
|
|
Lapse of statute of limitations
|
|
(2,999
|
)
|
|
Balance at December 31, 2018
|
|
13,254
|
|
2019
|
$
|
17,536
|
|
2020
|
14,826
|
|
|
2021
|
12,800
|
|
|
2022
|
11,202
|
|
|
2023
|
5,701
|
|
|
Thereafter
|
15,069
|
|
|
|
$
|
77,134
|
|
|
Year ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Net loss attributable to common stockholders
|
$
|
(374,080
|
)
|
|
$
|
(59,400
|
)
|
|
$
|
(81,978
|
)
|
|
|
|
|
|
|
||||||
Basic - weighted average shares outstanding
|
108,771
|
|
|
98,689
|
|
|
91,226
|
|
|||
Dilutive effect of stock options and restricted stock
|
—
|
|
|
—
|
|
|
—
|
|
|||
Diluted - weighted average shares outstanding
|
108,771
|
|
|
98,689
|
|
|
91,226
|
|
|||
|
|
|
|
|
|
||||||
Loss per share
|
|
|
|
|
|
||||||
Basic
|
$
|
(3.44
|
)
|
|
$
|
(0.60
|
)
|
|
$
|
(0.90
|
)
|
Diluted
|
$
|
(3.44
|
)
|
|
$
|
(0.60
|
)
|
|
$
|
(0.90
|
)
|
2018 Activity
|
Number of shares
(in thousands) |
|
Weighted average exercise price
|
|
Remaining weighted average contractual life in years
|
|
Intrinsic value
(in millions) |
|||||
Beginning balance
|
5,817
|
|
|
$
|
12.66
|
|
|
4.6
|
|
$
|
—
|
|
Granted
|
505
|
|
|
$
|
12.00
|
|
|
|
|
|
||
Exercised
|
(35
|
)
|
|
$
|
7.11
|
|
|
|
|
|
||
Forfeited/expired
|
(547
|
)
|
|
$
|
15.22
|
|
|
|
|
|
||
Total outstanding
|
5,740
|
|
|
$
|
12.39
|
|
|
3.7
|
|
$
|
—
|
|
Options exercisable
|
4,850
|
|
|
$
|
12.25
|
|
|
3.0
|
|
$
|
—
|
|
|
2018
|
|
2017
|
|
2016
|
Weighted average fair value
|
$5.62
|
|
$8.95
|
|
$3.85
|
Assumptions
|
|
|
|
|
|
Expected life (in years)
|
6.25
|
|
6.25
|
|
6.25
|
Volatility
|
44%
|
|
43%
|
|
40%
|
Dividend yield
|
—%
|
|
—%
|
|
—%
|
Risk free interest rate
|
2.74%
|
|
2.11%
|
|
1.40%
|
2018 Activity
|
Restricted stock (shares in thousands)
|
|
Nonvested at beginning of year
|
292
|
|
Granted
|
63
|
|
Vested
|
(124
|
)
|
Forfeited
|
(36
|
)
|
Nonvested at the end of year
|
195
|
|
2018 Activity
|
Restricted stock units (shares in thousands)
|
|
Nonvested at beginning of year
|
2,226
|
|
Granted
|
1,507
|
|
Vested
|
(856
|
)
|
Forfeited
|
(422
|
)
|
Nonvested at the end of year
|
2,455
|
|
|
|
Year ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Revenue:
|
|
|
|
|
|
|
||||||
Drilling & Subsea
|
|
$
|
229,078
|
|
|
$
|
234,742
|
|
|
$
|
224,447
|
|
Completions
|
|
477,987
|
|
|
260,191
|
|
|
131,786
|
|
|||
Production & Infrastructure
|
|
361,407
|
|
|
327,287
|
|
|
233,754
|
|
|||
Eliminations
|
|
(4,253
|
)
|
|
(3,600
|
)
|
|
(2,352
|
)
|
|||
Total revenue
|
|
$
|
1,064,219
|
|
|
$
|
818,620
|
|
|
$
|
587,635
|
|
|
|
|
|
|
|
|
||||||
Segment operating income (loss):
|
|
|
|
|
|
|
||||||
Drilling & Subsea
|
|
$
|
(33,688
|
)
|
|
$
|
(31,563
|
)
|
|
$
|
(53,055
|
)
|
Completions
|
|
32,277
|
|
|
(6,746
|
)
|
|
(45,609
|
)
|
|||
Production & Infrastructure
|
|
6,022
|
|
|
7,811
|
|
|
655
|
|
|||
Corporate
|
|
(35,079
|
)
|
|
(33,427
|
)
|
|
(27,440
|
)
|
|||
Total segment operating loss
|
|
(30,468
|
)
|
|
(63,925
|
)
|
|
(125,449
|
)
|
|||
Goodwill and intangible asset impairments
|
|
363,522
|
|
|
69,062
|
|
|
—
|
|
|||
Transaction expenses
|
|
3,446
|
|
|
6,511
|
|
|
865
|
|
|||
Loss (gain) on disposal of assets and other
|
|
(438
|
)
|
|
2,097
|
|
|
2,638
|
|
|||
Operating loss
|
|
$
|
(396,998
|
)
|
|
$
|
(141,595
|
)
|
|
$
|
(128,952
|
)
|
|
|
|
|
|
|
|
||||||
Depreciation and amortization
|
|
|
|
|
|
|
||||||
Drilling & Subsea
|
|
$
|
18,948
|
|
|
$
|
25,582
|
|
|
$
|
28,827
|
|
Completions
|
|
46,980
|
|
|
30,512
|
|
|
25,549
|
|
|||
Production & Infrastructure
|
|
8,407
|
|
|
8,608
|
|
|
6,738
|
|
|||
Corporate
|
|
173
|
|
|
427
|
|
|
646
|
|
|||
Total depreciation and amortization
|
|
$
|
74,508
|
|
|
$
|
65,129
|
|
|
$
|
61,760
|
|
|
|
Year ended December 31,
|
||||||||||
Capital expenditures
|
|
2018
|
|
2017
|
|
2016
|
||||||
Drilling & Subsea
|
|
$
|
4,218
|
|
|
$
|
5,424
|
|
|
$
|
7,774
|
|
Completions
|
|
8,846
|
|
|
6,458
|
|
|
2,557
|
|
|||
Production & Infrastructure
|
|
4,877
|
|
|
6,855
|
|
|
1,953
|
|
|||
Corporate
|
|
6,102
|
|
|
7,972
|
|
|
4,544
|
|
|||
Total capital expenditures
|
|
$
|
24,043
|
|
|
$
|
26,709
|
|
|
$
|
16,828
|
|
|
|
Year ended December 31,
|
||||||||||
Assets
|
|
2018
|
|
2017
|
|
2016
|
||||||
Drilling & Subsea
|
|
$
|
363,043
|
|
|
$
|
645,254
|
|
|
$
|
766,234
|
|
Completions
|
|
1,173,102
|
|
|
1,202,379
|
|
|
696,208
|
|
|||
Production & Infrastructure
|
|
243,354
|
|
|
251,685
|
|
|
175,940
|
|
|||
Corporate
|
|
50,153
|
|
|
95,910
|
|
|
196,810
|
|
|||
Total assets
|
|
$
|
1,829,652
|
|
|
$
|
2,195,228
|
|
|
$
|
1,835,192
|
|
|
|
Year ended December 31,
|
||||||||||
Long-lived assets:
|
|
2018
|
|
2017
|
|
2016
|
||||||
United States
|
|
$
|
868,295
|
|
|
$
|
1,087,381
|
|
|
$
|
809,545
|
|
Europe & Africa
|
|
100,451
|
|
|
213,008
|
|
|
184,768
|
|
|||
Canada
|
|
87,221
|
|
|
88,280
|
|
|
79,403
|
|
|||
Asia-Pacific
|
|
984
|
|
|
7,984
|
|
|
7,855
|
|
|||
Middle East
|
|
6,049
|
|
|
7,362
|
|
|
3,175
|
|
|||
Latin America
|
|
635
|
|
|
832
|
|
|
730
|
|
|||
Total long-lived assets
|
|
$
|
1,063,635
|
|
|
$
|
1,404,847
|
|
|
$
|
1,085,476
|
|
|
|
Year ended December 31,
|
||||||||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||||||||
Revenue:
|
|
$
|
%
|
|
$
|
%
|
|
$
|
%
|
|||||||||
United States
|
|
$
|
811,724
|
|
76.3
|
%
|
|
$
|
621,445
|
|
76.0
|
%
|
|
$
|
361,941
|
|
61.7
|
%
|
Canada
|
|
68,635
|
|
6.4
|
%
|
|
60,898
|
|
7.4
|
%
|
|
42,520
|
|
7.2
|
%
|
|||
Europe & Africa
|
|
57,632
|
|
5.4
|
%
|
|
61,134
|
|
7.5
|
%
|
|
77,847
|
|
13.2
|
%
|
|||
Middle East
|
|
54,541
|
|
5.1
|
%
|
|
25,634
|
|
3.1
|
%
|
|
25,975
|
|
4.4
|
%
|
|||
Asia-Pacific
|
|
46,503
|
|
4.4
|
%
|
|
28,694
|
|
3.5
|
%
|
|
51,880
|
|
8.8
|
%
|
|||
Latin America
|
|
25,184
|
|
2.4
|
%
|
|
20,815
|
|
2.5
|
%
|
|
27,472
|
|
4.7
|
%
|
|||
Total Revenue
|
|
$
|
1,064,219
|
|
100.0
|
%
|
|
$
|
818,620
|
|
100.0
|
%
|
|
$
|
587,635
|
|
100.0
|
%
|
|
|
Year ended December 31,
|
||||||||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||||||||
Revenue:
|
|
$
|
%
|
|
$
|
%
|
|
$
|
%
|
|||||||||
Drilling Technologies
|
|
$
|
178,293
|
|
16.6
|
%
|
|
$
|
169,045
|
|
20.6
|
%
|
|
$
|
136,033
|
|
23.3
|
%
|
Subsea Technologies
|
|
50,785
|
|
4.8
|
%
|
|
65,697
|
|
8.0
|
%
|
|
88,414
|
|
15.0
|
%
|
|||
Downhole Technologies
|
|
104,974
|
|
9.9
|
%
|
|
76,010
|
|
9.3
|
%
|
|
59,545
|
|
10.1
|
%
|
|||
Stimulation and Intervention
|
|
228,627
|
|
21.5
|
%
|
|
148,665
|
|
18.2
|
%
|
|
72,241
|
|
12.3
|
%
|
|||
Coiled Tubing
|
|
144,386
|
|
13.6
|
%
|
|
35,516
|
|
4.3
|
%
|
|
—
|
|
—
|
%
|
|||
Production Equipment
|
|
141,169
|
|
13.3
|
%
|
|
124,323
|
|
15.2
|
%
|
|
77,166
|
|
13.1
|
%
|
|||
Valve Solutions
|
|
220,238
|
|
20.7
|
%
|
|
202,964
|
|
24.8
|
%
|
|
156,588
|
|
26.6
|
%
|
|||
Eliminations
|
|
(4,253
|
)
|
(0.4
|
)%
|
|
(3,600
|
)
|
(0.4
|
)%
|
|
(2,352
|
)
|
(0.4
|
)%
|
|||
Total revenue
|
|
$
|
1,064,219
|
|
100.0
|
%
|
|
$
|
818,620
|
|
100.0
|
%
|
|
$
|
587,635
|
|
100.0
|
%
|
Condensed consolidating statements of comprehensive loss
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Year ended December 31, 2018
|
||||||||||||||||||
|
|
FET (Parent)
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
(in thousands)
|
||||||||||||||||||
Revenue
|
|
$
|
—
|
|
|
$
|
936,319
|
|
|
$
|
187,647
|
|
|
$
|
(59,747
|
)
|
|
$
|
1,064,219
|
|
Cost of sales
|
|
—
|
|
|
717,519
|
|
|
151,787
|
|
|
(61,459
|
)
|
|
807,847
|
|
|||||
Gross Profit
|
|
—
|
|
|
218,800
|
|
|
35,860
|
|
|
1,712
|
|
|
256,372
|
|
|||||
Operating Expenses
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Selling, general and administrative expenses
|
|
—
|
|
|
231,492
|
|
|
55,488
|
|
|
—
|
|
|
286,980
|
|
|||||
Goodwill and intangible assets impairment
|
|
—
|
|
|
233,635
|
|
|
129,887
|
|
|
—
|
|
|
363,522
|
|
|||||
Transaction Expenses
|
|
—
|
|
|
2,926
|
|
|
520
|
|
|
—
|
|
|
3,446
|
|
|||||
Loss (gain) on disposal of assets and other
|
|
—
|
|
|
(1,274
|
)
|
|
836
|
|
|
—
|
|
|
(438
|
)
|
|||||
Total operating expenses
|
|
—
|
|
|
466,779
|
|
|
186,731
|
|
|
—
|
|
|
653,510
|
|
|||||
Earnings (loss) from equity investment
|
|
—
|
|
|
529
|
|
|
(389
|
)
|
|
—
|
|
|
140
|
|
|||||
Equity loss from affiliate, net of tax
|
|
(348,557
|
)
|
|
(118,601
|
)
|
|
—
|
|
|
467,158
|
|
|
—
|
|
|||||
Operating loss
|
|
(348,557
|
)
|
|
(366,051
|
)
|
|
(151,260
|
)
|
|
468,870
|
|
|
(396,998
|
)
|
|||||
Other expense (income)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
|
32,307
|
|
|
158
|
|
|
67
|
|
|
—
|
|
|
32,532
|
|
|||||
Foreign exchange and other gains, net
|
|
—
|
|
|
(296
|
)
|
|
(5,974
|
)
|
|
—
|
|
|
(6,270
|
)
|
|||||
(Gain) loss on contribution of subsea rentals business
|
|
—
|
|
|
5,856
|
|
|
(39,362
|
)
|
|
—
|
|
|
(33,506
|
)
|
|||||
Total other (income) expense, net
|
|
32,307
|
|
|
5,718
|
|
|
(45,269
|
)
|
|
—
|
|
|
(7,244
|
)
|
|||||
Loss before income taxes
|
|
(380,864
|
)
|
|
(371,769
|
)
|
|
(105,991
|
)
|
|
468,870
|
|
|
(389,754
|
)
|
|||||
Income tax expense (benefit)
|
|
(6,784
|
)
|
|
(23,212
|
)
|
|
14,322
|
|
|
—
|
|
|
(15,674
|
)
|
|||||
Net loss
|
|
(374,080
|
)
|
|
(348,557
|
)
|
|
(120,313
|
)
|
|
468,870
|
|
|
(374,080
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net loss
|
|
(374,080
|
)
|
|
(348,557
|
)
|
|
(120,313
|
)
|
|
468,870
|
|
|
(374,080
|
)
|
|||||
Change in foreign currency translation, net of tax of $0
|
|
(24,752
|
)
|
|
(24,752
|
)
|
|
(24,752
|
)
|
|
49,504
|
|
|
(24,752
|
)
|
|||||
Gain on pension liability
|
|
1,489
|
|
|
1,489
|
|
|
1,489
|
|
|
(2,978
|
)
|
|
1,489
|
|
|||||
Comprehensive loss
|
|
$
|
(397,343
|
)
|
|
$
|
(371,820
|
)
|
|
$
|
(143,576
|
)
|
|
$
|
515,396
|
|
|
$
|
(397,343
|
)
|
Condensed consolidating statements of comprehensive loss
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Year ended December 31, 2017
|
||||||||||||||||||
|
|
FET (Parent)
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
(in thousands)
|
||||||||||||||||||
Revenue
|
|
$
|
—
|
|
|
$
|
703,409
|
|
|
$
|
182,417
|
|
|
$
|
(67,206
|
)
|
|
$
|
818,620
|
|
Cost of sales
|
|
—
|
|
|
550,931
|
|
|
145,743
|
|
|
(66,842
|
)
|
|
629,832
|
|
|||||
Gross Profit
|
|
—
|
|
|
152,478
|
|
|
36,674
|
|
|
(364
|
)
|
|
188,788
|
|
|||||
Operating Expenses
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Selling, general and administrative expenses
|
|
—
|
|
|
205,672
|
|
|
48,041
|
|
|
—
|
|
|
253,713
|
|
|||||
Goodwill and intangible assets impairment
|
|
—
|
|
|
33,301
|
|
|
35,761
|
|
|
—
|
|
|
69,062
|
|
|||||
Transaction Expenses
|
|
—
|
|
|
6,521
|
|
|
(10
|
)
|
|
—
|
|
|
6,511
|
|
|||||
Loss on disposal of assets and other
|
|
—
|
|
|
1,981
|
|
|
116
|
|
|
—
|
|
|
2,097
|
|
|||||
Total operating expenses
|
|
—
|
|
|
247,475
|
|
|
83,908
|
|
|
—
|
|
|
331,383
|
|
|||||
Earnings from equity investment
|
|
—
|
|
|
1,000
|
|
|
—
|
|
|
—
|
|
|
1,000
|
|
|||||
Equity loss from affiliate, net of tax
|
|
(41,253
|
)
|
|
(53,682
|
)
|
|
—
|
|
|
94,935
|
|
|
—
|
|
|||||
Operating loss
|
|
(41,253
|
)
|
|
(147,679
|
)
|
|
(47,234
|
)
|
|
94,571
|
|
|
(141,595
|
)
|
|||||
Other expense (income)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense (income)
|
|
27,919
|
|
|
(569
|
)
|
|
(542
|
)
|
|
—
|
|
|
26,808
|
|
|||||
Foreign exchange and other losses (gains), net
|
|
—
|
|
|
(118
|
)
|
|
7,386
|
|
|
—
|
|
|
7,268
|
|
|||||
Gain realized on previously held equity investment
|
|
—
|
|
|
(120,392
|
)
|
|
—
|
|
|
—
|
|
|
(120,392
|
)
|
|||||
Total other (income) expense, net
|
|
27,919
|
|
|
(121,079
|
)
|
|
6,844
|
|
|
—
|
|
|
(86,316
|
)
|
|||||
Loss before income taxes
|
|
(69,172
|
)
|
|
(26,600
|
)
|
|
(54,078
|
)
|
|
94,571
|
|
|
(55,279
|
)
|
|||||
Income tax expense (benefit)
|
|
(9,772
|
)
|
|
14,653
|
|
|
(760
|
)
|
|
—
|
|
|
4,121
|
|
|||||
Net loss
|
|
(59,400
|
)
|
|
(41,253
|
)
|
|
(53,318
|
)
|
|
94,571
|
|
|
(59,400
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net loss
|
|
(59,400
|
)
|
|
(41,253
|
)
|
|
(53,318
|
)
|
|
94,571
|
|
|
(59,400
|
)
|
|||||
Change in foreign currency translation, net of tax of $0
|
|
36,163
|
|
|
36,163
|
|
|
36,163
|
|
|
(72,326
|
)
|
|
36,163
|
|
|||||
Gain on pension liability
|
|
107
|
|
|
107
|
|
|
107
|
|
|
(214
|
)
|
|
107
|
|
|||||
Comprehensive loss
|
|
$
|
(23,130
|
)
|
|
$
|
(4,983
|
)
|
|
$
|
(17,048
|
)
|
|
$
|
22,031
|
|
|
$
|
(23,130
|
)
|
Condensed consolidating statements of comprehensive loss
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Year ended December 31, 2016
|
||||||||||||||||||
|
|
FET (Parent)
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
(in thousands)
|
||||||||||||||||||
Revenue
|
|
$
|
—
|
|
|
$
|
436,785
|
|
|
$
|
198,684
|
|
|
$
|
(47,834
|
)
|
|
$
|
587,635
|
|
Cost of sales
|
|
—
|
|
|
375,509
|
|
|
161,190
|
|
|
(48,799
|
)
|
|
487,900
|
|
|||||
Gross Profit
|
|
—
|
|
|
61,276
|
|
|
37,494
|
|
|
965
|
|
|
99,735
|
|
|||||
Operating Expenses
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Selling, general and administrative expenses
|
|
—
|
|
|
187,974
|
|
|
39,034
|
|
|
—
|
|
|
227,008
|
|
|||||
Transaction Expenses
|
|
—
|
|
|
825
|
|
|
40
|
|
|
—
|
|
|
865
|
|
|||||
Loss on disposal of assets and other
|
|
—
|
|
|
2,616
|
|
|
22
|
|
|
—
|
|
|
2,638
|
|
|||||
Total operating expenses
|
|
—
|
|
|
191,415
|
|
|
39,096
|
|
|
—
|
|
|
230,511
|
|
|||||
Earnings from equity investment
|
|
—
|
|
|
1,824
|
|
|
—
|
|
|
—
|
|
|
1,824
|
|
|||||
Equity earnings (loss) from affiliate, net of tax
|
|
(62,180
|
)
|
|
14,663
|
|
|
—
|
|
|
47,517
|
|
|
—
|
|
|||||
Operating loss
|
|
(62,180
|
)
|
|
(113,652
|
)
|
|
(1,602
|
)
|
|
48,482
|
|
|
(128,952
|
)
|
|||||
Other expense (income)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense (income)
|
|
27,480
|
|
|
(110
|
)
|
|
40
|
|
|
—
|
|
|
27,410
|
|
|||||
Foreign exchange and other gains, net
|
|
—
|
|
|
(5,264
|
)
|
|
(16,077
|
)
|
|
—
|
|
|
(21,341
|
)
|
|||||
Deferred loan costs written off
|
|
2,978
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,978
|
|
|||||
Total other (income) expense, net
|
|
30,458
|
|
|
(5,374
|
)
|
|
(16,037
|
)
|
|
—
|
|
|
9,047
|
|
|||||
Income (loss) before income taxes
|
|
(92,638
|
)
|
|
(108,278
|
)
|
|
14,435
|
|
|
48,482
|
|
|
(137,999
|
)
|
|||||
Income tax expense (benefit)
|
|
(10,660
|
)
|
|
(46,098
|
)
|
|
707
|
|
|
—
|
|
|
(56,051
|
)
|
|||||
Net income (loss)
|
|
(81,978
|
)
|
|
(62,180
|
)
|
|
13,728
|
|
|
48,482
|
|
|
(81,948
|
)
|
|||||
Less: Income attributable to noncontrolling interest
|
|
—
|
|
|
—
|
|
|
30
|
|
|
—
|
|
|
30
|
|
|||||
Net income (loss) attributable to common stockholders
|
|
(81,978
|
)
|
|
(62,180
|
)
|
|
13,698
|
|
|
48,482
|
|
|
(81,978
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income (loss)
|
|
(81,978
|
)
|
|
(62,180
|
)
|
|
13,728
|
|
|
48,482
|
|
|
(81,948
|
)
|
|||||
Change in foreign currency translation, net of tax of $0
|
|
(45,722
|
)
|
|
(45,722
|
)
|
|
(45,722
|
)
|
|
91,444
|
|
|
(45,722
|
)
|
|||||
Loss on pension liability
|
|
(335
|
)
|
|
(335
|
)
|
|
(335
|
)
|
|
670
|
|
|
(335
|
)
|
|||||
Comprehensive loss
|
|
(128,035
|
)
|
|
(108,237
|
)
|
|
(32,329
|
)
|
|
140,596
|
|
|
(128,005
|
)
|
|||||
Less: comprehensive loss attributable to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
(162
|
)
|
|
—
|
|
|
(162
|
)
|
|||||
Comprehensive loss attributable to common stockholders
|
|
$
|
(128,035
|
)
|
|
$
|
(108,237
|
)
|
|
$
|
(32,491
|
)
|
|
$
|
140,596
|
|
|
$
|
(128,167
|
)
|
Condensed consolidating balance sheets
|
|||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
December 31, 2018
|
|||||||||||||||||||
|
|
FET (Parent)
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
|||||||||||
|
|
(in thousands)
|
|||||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Current assets
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Cash and cash equivalents
|
|
$
|
—
|
|
|
$
|
24,977
|
|
|
$
|
22,264
|
|
|
$
|
—
|
|
|
$
|
47,241
|
|
|
Accounts receivable—trade, net
|
|
—
|
|
|
177,986
|
|
|
28,069
|
|
|
—
|
|
|
206,055
|
|
||||||
Inventories, net
|
|
—
|
|
|
416,237
|
|
|
69,878
|
|
|
(7,092
|
)
|
|
479,023
|
|
||||||
Prepaid expenses and other current assets
|
|
—
|
|
|
23,585
|
|
|
92
|
|
|
—
|
|
|
23,677
|
|
||||||
Costs and estimated profits in excess of billings
|
|
—
|
|
|
6,202
|
|
|
2,957
|
|
|
—
|
|
|
9,159
|
|
||||||
Accrued revenue
|
|
—
|
|
|
—
|
|
|
862
|
|
|
—
|
|
|
862
|
|
||||||
Total current assets
|
|
—
|
|
|
648,987
|
|
|
124,122
|
|
|
(7,092
|
)
|
|
766,017
|
|
||||||
Property and equipment, net of accumulated depreciation
|
|
—
|
|
|
156,434
|
|
|
20,924
|
|
|
—
|
|
|
177,358
|
|
||||||
Deferred financing costs, net
|
|
2,071
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,071
|
|
||||||
Intangible assets
|
|
—
|
|
|
320,056
|
|
|
38,992
|
|
|
—
|
|
|
359,048
|
|
||||||
Goodwill
|
|
—
|
|
|
433,415
|
|
|
36,232
|
|
|
—
|
|
|
469,647
|
|
||||||
Investment in unconsolidated subsidiary
|
|
—
|
|
|
1,222
|
|
|
43,760
|
|
|
—
|
|
|
44,982
|
|
||||||
Deferred income taxes, net
|
|
—
|
|
|
1,170
|
|
|
64
|
|
|
—
|
|
|
1,234
|
|
||||||
Other long-term assets
|
|
—
|
|
|
4,194
|
|
|
5,101
|
|
|
—
|
|
|
9,295
|
|
||||||
Investment in affiliates
|
|
877,764
|
|
|
265,714
|
|
|
—
|
|
|
(1,143,478
|
)
|
|
—
|
|
||||||
Long-term advances to affiliates
|
|
674,220
|
|
|
—
|
|
|
98,532
|
|
|
(772,752
|
)
|
|
—
|
|
||||||
Total assets
|
|
$
|
1,554,055
|
|
|
$
|
1,831,192
|
|
|
$
|
367,727
|
|
|
$
|
(1,923,322
|
)
|
|
$
|
1,829,652
|
|
|
Liabilities and equity
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Current portion of long-term debt
|
|
$
|
—
|
|
|
$
|
1,150
|
|
|
$
|
17
|
|
|
$
|
—
|
|
|
$
|
1,167
|
|
|
Accounts payable—trade
|
|
—
|
|
|
121,019
|
|
|
22,167
|
|
|
—
|
|
|
143,186
|
|
||||||
Accrued liabilities
|
|
6,873
|
|
|
40,913
|
|
|
33,246
|
|
|
—
|
|
|
81,032
|
|
||||||
Deferred revenue
|
|
—
|
|
|
4,742
|
|
|
3,593
|
|
|
—
|
|
|
8,335
|
|
||||||
Billings in excess of costs and profits recognized
|
|
—
|
|
|
84
|
|
|
3,126
|
|
|
—
|
|
|
3,210
|
|
||||||
Total current liabilities
|
|
6,873
|
|
|
167,908
|
|
|
62,149
|
|
|
—
|
|
|
236,930
|
|
||||||
Long-term debt, net of current portion
|
|
517,056
|
|
|
480
|
|
|
8
|
|
—
|
|
—
|
|
|
517,544
|
|
|||||
Deferred income taxes, net
|
|
—
|
|
|
—
|
|
|
15,299
|
|
|
—
|
|
|
15,299
|
|
||||||
Other long-term liabilities
|
|
—
|
|
|
12,288
|
|
|
17,465
|
|
|
—
|
|
|
29,753
|
|
||||||
Long-term payables to affiliates
|
|
—
|
|
|
772,752
|
|
|
—
|
|
|
(772,752
|
)
|
|
—
|
|
||||||
Total liabilities
|
|
523,929
|
|
|
953,428
|
|
|
94,921
|
|
|
(772,752
|
)
|
|
799,526
|
|
||||||
|
|
|
|
|
|
|
|
|
|
—
|
|
||||||||||
Total equity
|
|
1,030,126
|
|
|
877,764
|
|
|
272,806
|
|
|
(1,150,570
|
)
|
|
1,030,126
|
|
||||||
Total liabilities and equity
|
|
$
|
1,554,055
|
|
|
$
|
1,831,192
|
|
|
$
|
367,727
|
|
|
$
|
(1,923,322
|
)
|
|
$
|
1,829,652
|
|
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, net
|
|
—
|
|
|
374,527
|
|
|
77,454
|
|
|
(8,804
|
)
|
|
443,177
|
|
||||||
Prepaid expenses and other current assets
|
|
—
|
|
|
12,679
|
|
|
6,811
|
|
|
—
|
|
|
19,490
|
|
||||||
Costs and estimated 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
|
|
||||||
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
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Year ended December 31, 2018
|
||||||||||||||||||
|
|
FET (Parent)
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
(in thousands)
|
||||||||||||||||||
Cash flows from operating activities
|
|
$
|
10,461
|
|
|
$
|
(76
|
)
|
|
$
|
15,972
|
|
|
$
|
(23,950
|
)
|
|
$
|
2,407
|
|
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Capital expenditures for property and equipment
|
|
—
|
|
|
(20,288
|
)
|
|
(3,755
|
)
|
|
—
|
|
|
(24,043
|
)
|
|||||
Acquisition of businesses, net of cash acquired
|
|
—
|
|
|
(60,622
|
)
|
|
—
|
|
|
—
|
|
|
(60,622
|
)
|
|||||
Investment in unconsolidated subsidiary
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Proceeds from sale of business, property and equipment
|
|
—
|
|
|
5,192
|
|
|
4,066
|
|
|
—
|
|
|
9,258
|
|
|||||
Long-term loans and advances to affiliates
|
|
(18,130
|
)
|
|
9,690
|
|
|
—
|
|
|
8,440
|
|
|
—
|
|
|||||
Net cash provided by (used in) investing activities
|
|
(18,130
|
)
|
|
(66,028
|
)
|
|
311
|
|
|
8,440
|
|
|
(75,407
|
)
|
|||||
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Borrowings of debt
|
|
221,980
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
221,980
|
|
|||||
Repayments of debt
|
|
(211,783
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(211,783
|
)
|
|||||
Repurchases of stock
|
|
(2,777
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,777
|
)
|
|||||
Proceeds from stock issuance
|
|
249
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
249
|
|
|||||
Payment of capital lease obligations
|
|
—
|
|
|
(1,030
|
)
|
|
(117
|
)
|
|
—
|
|
|
(1,147
|
)
|
|||||
Long-term loans and advances to affiliates
|
|
—
|
|
|
18,130
|
|
|
(9,690
|
)
|
|
(8,440
|
)
|
|
—
|
|
|||||
Dividend paid to affiliates
|
|
—
|
|
|
—
|
|
|
(23,950
|
)
|
|
23,950
|
|
|
—
|
|
|||||
Net cash provided by (used in) financing activities
|
|
7,669
|
|
|
17,100
|
|
|
(33,757
|
)
|
|
15,510
|
|
|
6,522
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Effect of exchange rate changes on cash
|
|
—
|
|
|
—
|
|
|
(1,497
|
)
|
|
—
|
|
|
(1,497
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net decrease in cash, cash equivalents and restricted cash
|
|
—
|
|
|
(49,004
|
)
|
|
(18,971
|
)
|
|
—
|
|
|
(67,975
|
)
|
|||||
Cash, cash equivalents and restricted cash at beginning of period
|
|
—
|
|
|
73,981
|
|
|
41,235
|
|
|
—
|
|
|
115,216
|
|
|||||
Cash, cash equivalents and restricted cash at end of period
|
|
$
|
—
|
|
|
$
|
24,977
|
|
|
$
|
22,264
|
|
|
$
|
—
|
|
|
$
|
47,241
|
|
Condensed consolidating statements of cash flows
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Year ended December 31, 2017
|
||||||||||||||||||
|
|
FET (Parent)
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
(in thousands)
|
||||||||||||||||||
Cash flows from operating activities
|
|
$
|
(15,718
|
)
|
|
$
|
483
|
|
|
$
|
3,702
|
|
|
$
|
(28,500
|
)
|
|
$
|
(40,033
|
)
|
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Capital expenditures for property and equipment
|
|
—
|
|
|
(20,499
|
)
|
|
(6,210
|
)
|
|
—
|
|
|
(26,709
|
)
|
|||||
Acquisition of businesses, net of cash acquired
|
|
—
|
|
|
(157,297
|
)
|
|
(4,892
|
)
|
|
—
|
|
|
(162,189
|
)
|
|||||
Investment in unconsolidated subsidiary
|
|
—
|
|
|
(1,041
|
)
|
|
—
|
|
|
—
|
|
|
(1,041
|
)
|
|||||
Proceeds from sale of property and equipment
|
|
—
|
|
|
2,038
|
|
|
(67
|
)
|
|
—
|
|
|
1,971
|
|
|||||
Long-term loans and advances to affiliates
|
|
(86,097
|
)
|
|
22,072
|
|
|
—
|
|
|
64,025
|
|
|
—
|
|
|||||
Net cash used in investing activities
|
|
(86,097
|
)
|
|
(154,727
|
)
|
|
(11,169
|
)
|
|
64,025
|
|
|
(187,968
|
)
|
|||||
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Borrowings of debt
|
|
107,431
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
107,431
|
|
|||||
Repurchases of stock
|
|
(4,742
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,742
|
)
|
|||||
Proceeds from stock issuance
|
|
1,491
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,491
|
|
|||||
Payment of capital lease obligations
|
|
—
|
|
|
(1,147
|
)
|
|
(40
|
)
|
|
—
|
|
|
(1,187
|
)
|
|||||
Deferred financing costs
|
|
(2,430
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,430
|
)
|
|||||
Long-term loans and advances to affiliates
|
|
—
|
|
|
86,097
|
|
|
(22,072
|
)
|
|
(64,025
|
)
|
|
—
|
|
|||||
Dividend paid to affiliates
|
|
—
|
|
|
—
|
|
|
(28,500
|
)
|
|
28,500
|
|
|
—
|
|
|||||
Net cash provided by (used in) financing activities
|
|
101,750
|
|
|
84,950
|
|
|
(50,612
|
)
|
|
(35,525
|
)
|
|
100,563
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Effect of exchange rate changes on cash
|
|
—
|
|
|
—
|
|
|
8,232
|
|
|
—
|
|
|
8,232
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net decrease in cash, cash equivalents and restricted cash
|
|
(65
|
)
|
|
(69,294
|
)
|
|
(49,847
|
)
|
|
—
|
|
|
(119,206
|
)
|
|||||
Cash, cash equivalents and restricted cash at beginning of period
|
|
65
|
|
|
143,275
|
|
|
91,082
|
|
|
—
|
|
|
234,422
|
|
|||||
Cash, cash equivalents and restricted cash at end of period
|
|
$
|
—
|
|
|
$
|
73,981
|
|
|
$
|
41,235
|
|
|
$
|
—
|
|
|
$
|
115,216
|
|
Condensed consolidating statements of cash flows
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Year ended December 31, 2016
|
||||||||||||||||||
|
|
FET (Parent)
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
(in thousands)
|
||||||||||||||||||
Cash flows from operating activities
|
|
$
|
(16,882
|
)
|
|
$
|
31,055
|
|
|
$
|
73,772
|
|
|
$
|
(23,203
|
)
|
|
$
|
64,742
|
|
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Capital expenditures for property and equipment
|
|
—
|
|
|
(12,033
|
)
|
|
(4,795
|
)
|
|
—
|
|
|
(16,828
|
)
|
|||||
Acquisition of businesses, net of cash acquired
|
|
—
|
|
|
(4,072
|
)
|
|
—
|
|
|
—
|
|
|
(4,072
|
)
|
|||||
Proceeds from sale of property and equipment
|
|
—
|
|
|
9,442
|
|
|
321
|
|
|
—
|
|
|
9,763
|
|
|||||
Long-term loans and advances to affiliates
|
|
(69,340
|
)
|
|
12,912
|
|
|
—
|
|
|
56,428
|
|
|
—
|
|
|||||
Net cash provided by (used in) investing activities
|
|
(69,340
|
)
|
|
6,249
|
|
|
(4,474
|
)
|
|
56,428
|
|
|
(11,137
|
)
|
|||||
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Repurchases of stock
|
|
(623
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(623
|
)
|
|||||
Proceeds from stock issuance
|
|
87,676
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
87,676
|
|
|||||
Payment of capital lease obligations
|
|
—
|
|
|
(253
|
)
|
|
161
|
|
|
—
|
|
|
(92
|
)
|
|||||
Deferred financing costs
|
|
(766
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(766
|
)
|
|||||
Long-term loans and advances to affiliates
|
|
—
|
|
|
69,340
|
|
|
(12,912
|
)
|
|
(56,428
|
)
|
|
—
|
|
|||||
Dividend paid to affiliates
|
|
—
|
|
|
—
|
|
|
(23,203
|
)
|
|
23,203
|
|
|
—
|
|
|||||
Net cash provided by (used in) financing activities
|
|
86,287
|
|
|
69,087
|
|
|
(35,954
|
)
|
|
(33,225
|
)
|
|
86,195
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Effect of exchange rate changes on cash
|
|
—
|
|
|
—
|
|
|
(14,627
|
)
|
|
—
|
|
|
(14,627
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net increase in cash, cash equivalents and restricted cash
|
|
65
|
|
|
106,391
|
|
|
18,717
|
|
|
—
|
|
|
125,173
|
|
|||||
Cash, cash equivalents and restricted cash at beginning of period
|
|
—
|
|
|
36,884
|
|
|
72,365
|
|
|
—
|
|
|
109,249
|
|
|||||
Cash, cash equivalents and restricted cash at end of period
|
|
$
|
65
|
|
|
$
|
143,275
|
|
|
$
|
91,082
|
|
|
$
|
—
|
|
|
$
|
234,422
|
|
|
2018
|
||||||||||||||
(in thousands, except per share information)
|
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
||||||||
Revenues
|
$
|
250,231
|
|
|
$
|
274,003
|
|
|
$
|
267,037
|
|
|
$
|
272,948
|
|
Cost of sales
|
182,944
|
|
|
201,334
|
|
|
192,496
|
|
|
231,073
|
|
||||
Gross profit
|
67,287
|
|
|
72,669
|
|
|
74,541
|
|
|
41,875
|
|
||||
Total operating expenses (1)
|
73,030
|
|
|
84,721
|
|
|
72,764
|
|
|
422,995
|
|
||||
Earnings (loss) from equity investment
|
(963
|
)
|
|
350
|
|
|
659
|
|
|
94
|
|
||||
Operating income (loss)
|
(6,706
|
)
|
|
(11,702
|
)
|
|
2,436
|
|
|
(381,026
|
)
|
||||
Total other expense (income), net (2)
|
(21,868
|
)
|
|
2,001
|
|
|
6,598
|
|
|
6,025
|
|
||||
Income (loss) before income taxes
|
15,162
|
|
|
(13,703
|
)
|
|
(4,162
|
)
|
|
(387,051
|
)
|
||||
Income tax expense (benefit)
|
(12,904
|
)
|
|
1,646
|
|
|
(1,108
|
)
|
|
(3,308
|
)
|
||||
Net income (loss)
|
28,066
|
|
|
(15,349
|
)
|
|
(3,054
|
)
|
|
(383,743
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Weighted average shares outstanding
|
|
|
|
|
|
|
|
||||||||
Basic
|
108,423
|
|
|
108,714
|
|
|
108,856
|
|
|
109,082
|
|
||||
Diluted
|
110,857
|
|
|
108,714
|
|
|
108,856
|
|
|
109,082
|
|
||||
Earnings (loss) per share
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.26
|
|
|
$
|
(0.14
|
)
|
|
$
|
(0.03
|
)
|
|
$
|
(3.52
|
)
|
Diluted
|
$
|
0.25
|
|
|
$
|
(0.14
|
)
|
|
$
|
(0.03
|
)
|
|
$
|
(3.52
|
)
|
(1)
|
Total operating expenses included
$14.5 million
of intangible asset impairments for the Subsea and Downhole product lines in Q2,
$298.8 million
of goodwill impairment charges in Q4 and
$50.2 million
of intangible asset impairments in Q4. See Note
7
Goodwill and Intangible Assets
for further information related to these charges.
|
(2)
|
Total other expenses included a
$33.5 million
gain on contribution of our subsea rentals business in Q1. See Note
4
Acquisitions & Dispositions
for further information related to this gain.
|
|
2017
|
||||||||||||||
(in thousands, except per share information)
|
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
||||||||
Revenues
|
$
|
171,096
|
|
|
$
|
201,115
|
|
|
$
|
198,709
|
|
|
$
|
247,700
|
|
Cost of sales
|
132,117
|
|
|
151,860
|
|
|
151,150
|
|
|
194,705
|
|
||||
Gross profit
|
38,979
|
|
|
49,255
|
|
|
47,559
|
|
|
52,995
|
|
||||
Total operating expenses (1)
|
61,056
|
|
|
131,779
|
|
|
64,839
|
|
|
73,709
|
|
||||
Earnings (loss) from equity investment
|
1,462
|
|
|
2,568
|
|
|
3,361
|
|
|
(6,391
|
)
|
||||
Operating loss
|
(20,615
|
)
|
|
(79,956
|
)
|
|
(13,919
|
)
|
|
(27,105
|
)
|
||||
Total other expense (income), net (2)
|
8,126
|
|
|
8,987
|
|
|
8,726
|
|
|
(112,155
|
)
|
||||
Income (loss) before income taxes
|
(28,741
|
)
|
|
(88,943
|
)
|
|
(22,645
|
)
|
|
85,050
|
|
||||
Income tax expense (benefit)
|
(12,973
|
)
|
|
(11,070
|
)
|
|
(7,817
|
)
|
|
35,981
|
|
||||
Net income (loss)
|
(15,768
|
)
|
|
(77,873
|
)
|
|
(14,828
|
)
|
|
49,069
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Weighted average shares outstanding
|
|
|
|
|
|
|
|
||||||||
Basic
|
95,860
|
|
|
96,170
|
|
|
96,275
|
|
|
105,947
|
|
||||
Diluted
|
95,860
|
|
|
96,170
|
|
|
96,275
|
|
|
108,581
|
|
||||
Earnings (loss) per share
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
(0.16
|
)
|
|
$
|
(0.81
|
)
|
|
$
|
(0.15
|
)
|
|
$
|
0.46
|
|
Diluted
|
$
|
(0.16
|
)
|
|
$
|
(0.81
|
)
|
|
$
|
(0.15
|
)
|
|
$
|
0.45
|
|
(1)
|
Total operating expenses in Q2 included a
$68.0 million
goodwill impairment for our Subsea reporting unit. See Note
7
Goodwill and Intangible Assets
for further information related to this charges.
|
(2)
|
Total other expenses in Q4 included a
$120.4 million
gain realized on our previously held equity investment. See Note
4
Acquisitions & Dispositions
for further information related to this gain.
|
Index to Consolidated Financial Statements
|
Page
|
Exhibit
|
|
Number
|
DESCRIPTION
|
2.1*
|
|
|
|
3.1*
|
|
|
|
3.2*
|
|
|
|
4.1*
|
|
|
|
4.2*
|
|
|
|
4.3*
|
|
|
|
4.4*
|
|
|
|
10.1*
|
|
|
|
10.2*#
|
|
|
|
10.3*#
|
|
|
|
10.4*#
|
|
|
|
10.5*#
|
|
|
|
10.6*#
|
|
|
|
10.7*#
|
|
|
|
10.8*#
|
|
|
|
10.9*#
|
|
|
|
10.10*#
|
|
|
|
10.11*#
|
|
|
|
10.12*#
|
|
|
|
10.13*#
|
|
|
|
10.14*#
|
|
|
|
10.15*#
|
|
|
|
10.16*#
|
|
|
|
10.17*#
|
|
|
|
10.18*#
|
|
|
|
10.19*#
|
|
|
|
10.20*#
|
|
|
|
10.21*#
|
|
|
|
10.22*#
|
|
|
|
10.23*#
|
|
|
|
10.24*#
|
|
10.25*#
|
|
|
|
10.26#
|
|
|
|
10.27*#
|
|
|
|
10.28*#
|
|
|
|
10.29*#
|
|
|
|
10.30*#
|
|
|
|
10.31*#
|
|
|
|
10.32*#
|
|
|
|
10.33*#
|
|
|
|
10.34*#
|
|
|
|
10.35*#
|
|
|
|
10.36*#
|
|
|
|
10.37*#
|
|
|
|
10.38*#
|
|
|
|
10.39*#
|
|
|
|
10.40*#
|
|
|
|
10.41*#
|
|
|
|
10.42*#
|
|
|
|
10.43*#
|
|
|
|
10.44*#
|
|
|
|
10.45*#
|
|
|
|
10.46*
|
|
|
|
10.47*
|
|
|
|
10.48*
|
|
|
|
10.49*
|
|
|
|
10.50*#
|
|
|
|
10.51*#
|
|
|
|
21.1**
|
|
|
|
23.1**
|
|
|
|
31.1**
|
|
|
|
31.2**
|
|
|
|
32.1**
|
|
|
|
32.2**
|
|
|
|
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.
|
|
||
|
|
By:
|
/s/ Pablo G. Mercado
|
|
|
|
February 28, 2019
|
|
Pablo G. Mercado
|
|
|
|
|
|
Senior Vice President, Chief Financial Officer and Treasurer
|
|
|
|
|
|
(As Duly Authorized Officer and Principal Financial Officer)
|
|
|
|
|
|
|
|
|
|
February 28, 2019
|
By:
|
/s/ Tylar K. Schmitt
|
|
|
|
|
|
Tylar K. Schmitt
|
|
|
|
|
|
Vice President and Chief Accounting Officer
|
|
|
|
|
|
(As Duly Authorized Officer and Principal Accounting Officer)
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ C. Christopher Gaut
|
|
President, Chief Executive Officer and Chairman of the Board
(Principal Executive Officer)
|
|
February 28, 2019
|
C. Christopher Gaut
|
|
|
|
|
|
|
|
|
|
/s/ Pablo G. Mercado
|
Senior Vice President, Chief Financial Officer and Treasurer
(Principal Financial Officer)
|
|
February 28, 2019
|
|
Pablo G. Mercado
|
|
|
|
|
|
|
|
|
|
/s/ Tylar K. Schmitt
|
|
Vice President and Chief Accounting Officer
(Principal Accounting Officer)
|
|
February 28, 2019
|
Tylar K. Schmitt
|
|
|
|
|
|
|
|
|
|
/s/ Evelyn M. Angelle
|
|
Director
|
|
February 28, 2019
|
Evelyn M. Angelle
|
|
|
|
|
|
|
|
|
|
/s/ David C. Baldwin
|
|
Director
|
|
February 28, 2019
|
David C. Baldwin
|
|
|
|
|
|
|
|
|
|
/s/ John A. Carrig
|
|
Director
|
|
February 28, 2019
|
John A. Carrig
|
|
|
|
|
|
|
|
|
|
/s/ Michael McShane
|
|
Director
|
|
February 28, 2019
|
Michael McShane
|
|
|
|
|
|
|
|
|
|
/s/ Terence O’Toole
|
|
Director
|
|
February 28, 2019
|
Terence O’Toole
|
|
|
|
|
|
|
|
|
|
/s/ Louis A. Raspino
|
|
Director
|
|
February 28, 2019
|
Louis A. Raspino
|
|
|
|
|
|
|
|
|
|
/s/ John Schmitz
|
|
Director
|
|
February 28, 2019
|
John Schmitz
|
|
|
|
|
|
|
|
|
|
/s/ Andrew L. Waite
|
|
Director
|
|
February 28, 2019
|
Andrew L. Waite
|
|
|
|
|
If to Executive, addressed to:
|
the most recent home address for Executive in the Company’s files.
|
If to the Company, addressed to:
|
Forum Energy Technologies, Inc.
920 Memorial City Way Suite 1000 Houston, Texas 77024 Attention: General Counsel Facsimile: (713) 583-9346 |
Vesting Date
|
Vesting on Vesting Date
|
(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
|
(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.
|
(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,
|
(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.
|
Nine Company Payout Schedule
|
|
Company Ranking
|
Payout Multiplier
|
1
|
2.00
|
2
|
1.75
|
3
|
1.50
|
4
|
1.25
|
5
|
1.00
|
6
|
0.75
|
7
|
0.50
|
8
|
0.25
|
9
|
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
|
|
||
|
|
|
Name
|
|
Jurisdiction
|
FET (Barbados) SRL
|
|
Barbados
|
FET Holdings LLC
|
|
Delaware
|
FET Global Holdings Limited
|
|
United Kingdom
|
Forum Global Tubing LLC
|
|
Delaware
|
Forum International Holdings, Inc.
|
|
Delaware
|
Forum US, Inc.
|
|
Delaware
|
Forum Worldwide Holdings Limited
|
|
United Kingdom
|
Global Tubing LLC
|
|
Delaware
|
1.
|
I have reviewed this Annual Report on Form 10-K 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:
|
February 28, 2019
|
|
By: /s/ C. Christopher Gaut
|
|
|
|
C. Christopher Gaut
|
|
|
|
President, Chief Executive Officer and Chairman of the Board
|
1.
|
I have reviewed this Annual Report on Form 10-K 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:
|
February 28, 2019
|
|
By:
_/s/ Pablo G. Mercado
_________________
|
|
|
|
Pablo G. Mercado
|
|
|
|
Senior Vice President, Chief Financial Officer and Treasurer
|
Dated:
|
February 28, 2019
|
|
By: /s/ C. Christopher Gaut
|
|
|
|
C. Christopher Gaut
|
|
|
|
President, Chief Executive Officer and Chairman of the Board
|
Dated:
|
February 28, 2019
|
|
By:
/s/ Pablo G. Mercado
|
|
|
|
Pablo G. Mercado
|
|
|
|
Senior Vice President, Chief Financial Officer and Treasurer
|