Forum Energy Technologies Inc Q1 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Josh Jayne - Daniel Energy Partners - Analyst : Thanks. Good morning. First question, I wanted to hit on, the subsidy side you talked about bookings were up 60% quarter over quarter, do the customer adoption of some new products and then you also highlighted, I think, an additional order in April. Maybe you guys could talk about more about that given at least on the rig count side we've seen a bit of a slowdown in rigs being contracted, but you seem to highlight some strength there so talk about the products that are getting adopted and the outlook there a bit more.

Question: Josh Jayne - Daniel Energy Partners - Analyst : Okay, thanks for that. And then as my follow up, another thing that sort of jumped out a little bit release was part of the increase in orders for drilling completion was for stimulation related equipment. Could you talk about what products there so strength, given that completion crews aren't moving higher and has a lot of inventory been exhausted and could you see a similar level of orders even if crew counts are sort of flat to down given the uncertainty you talked about in the second half of the year? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 02, 2025 / 3:00PM, FET.N - Q1 2025 Forum Energy Technologies Inc Earnings Call

Question: Josh Jayne - Daniel Energy Partners - Analyst : That's a lot. I'll turn it back.

Question: Dan Pickering - Pickering Energy Partners - Analyst : Morning guys. Lyle, could you remind us, so you indicated that you repurchased shares during the quarter, and you talked about that 1.5 leverage ratio which sounds like you ended the quarter slightly above the metric, but you repurchase shares during the quarter. Does that mean you, you'd paid down the facility or how did that work during the quarter and how do we think about that variability as we move into the Q2 and Q3?

Question: Dan Pickering - Pickering Energy Partners - Analyst : Okay, that's helpful. And then maybe can you spend a little bit of time talking about the cost efforts, you mentioned in the press release and the call sort of $10 million annualized, is that just tell us a little bit about how we'll start to see that. Do we think we get some of it immediately or is it longer dated? How do we expect to see it flow through?

Question: Dan Pickering - Pickering Energy Partners - Analyst : Okay, thank you, and then, maybe as you indicated we haven't seen any softness yet there's risk. What specific business lines or is it order in intake? What are you watching as you're sort of canary in the coal mine around, activity and any softness.

Question: Dan Pickering - Pickering Energy Partners - Analyst : Good. Well, I applaud you guys for being quick on the trigger here. Last question for me, you mentioned pushing price in certain areas related to rising costs is it holding? Is it sticking? Is that part of the buyer strike on the valve side, for instance, is they don't like the higher price and they're waiting to see if it'll come down just what's the reaction to price? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 02, 2025 / 3:00PM, FET.N - Q1 2025 Forum Energy Technologies Inc Earnings Call

Question: Steve Ferrazzani - Sidoti - Analyst : Morning everyone appreciate all the detail on the call. Wanted to ask about your how you can benefit from your geographical diversification in this environment. I mean, the expectation that you walk through it the US short cycle probably gets hit first, but you know when you hear the calls, certain markets that you're in are likely to hold up better. Can you talk about is there any way to target the stronger markets and you can't completely replace what you'll lose in a short cycle, but what you can do in that kind of environment.

Question: Steve Ferrazzani - Sidoti - Analyst : He never knew the flexibility was going to be this useful I'm assuming but very helpful right now no doubt good to see you're ahead of it. Can I ask? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 02, 2025 / 3:00PM, FET.N - Q1 2025 Forum Energy Technologies Inc Earnings Call

Question: Steve Ferrazzani - Sidoti - Analyst : I was going to ask about, look, steel price has been the most obvious one you can -- you can raise prices, but there's going to be a lag. Do you have any idea right now based on your 2Q guidance? What the impact is from tariffs and is there any way to quantify that and there's a lot of moving parts to that. What the impact to you is in [Q2] based on your guidance from higher costs and tariffs.

Question: Steve Ferrazzani - Sidoti - Analyst : Okay, that's helpful. Last one for me and it said I guess maybe hopefully we don't run into this scenario. There is the event where you're building cash, but the window remains closed for an extended period in that event. Do you just build is the plan to build cash or would you, would you look for alternate usage?

Question: Steve Ferrazzani - Sidoti - Analyst : Perfect. Thanks everyone, appreciate it. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 02, 2025 / 3:00PM, FET.N - Q1 2025 Forum Energy Technologies Inc Earnings Call

Question: Dave Storms - Stonegate Capital Partners - Analyst : Good Morning everyone appreciate you taking my questions. Just want to start and apologies if I missed this, but assuming the tariff levels do wane a little bit over the coming months, how much of the demand do you think could be made up and how much of those orders, are just kind of gone?

Question: Dave Storms - Stonegate Capital Partners - Analyst : That's perfect. Thank you. And then it just kind of dovetailing off of that, what kind of competition are you seeing in finding those alternate sourcing of the supply lines? I got to imagine, kind of everyone has the same plan.

Question: Dave Storms - Stonegate Capital Partners - Analyst : So that's great. And then one more for me if I could just thinking about the customers and the buyer strike any sense finger in the wind, crystal ball question on how long they could hold out, kind of maybe how much track is in front of them, before there would be capitulation. Could it be a quarter, two quarters, two years. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 02, 2025 / 3:00PM, FET.N - Q1 2025 Forum Energy Technologies Inc Earnings Call

Question: Dave Storms - Stonegate Capital Partners - Analyst : That's great, thank you very much and good luck you too.

Question: Eric Carlson - - Analyst : Hey guys, good morning. I had a long list of questions that I kind of crossed off most of them as we went here, I guess, when I think about how you've kind of managed cash over the last few years and kind of the outlook here so going to generate close to kind of 100% of current market cap in cash over 2024 and 2025 and what did you say the net that level is that currently or as if I guess of [331]?

Question: Eric Carlson - - Analyst : Okay, $148 million, so basically the potential to get kind of that net debt down to $100 million to $115 million depending how the year plays out so. Current market cap. Sorry, I'm doing quick math. You're, I mean, you're basically looking at trading by year end 3.2 times to 3.5 times EBITDA with the enterprise value under $300 million. Maybe a little context, so 2020 you had negative $20 million of EBITDA and finished the year at $230 million of enterprise value. I'm doing quick math 2021, $20 million positive EBITDA ended the year with $275 million enterprise value, so not far off what kind of year end looks like and clearly significantly better. So maybe the question would be is how do you execute buybacks in a meaningful way. Without maybe pushing market price too much and taking advantage of this while it lasts, can you source directly from some of the other large shareholders or the bondholders that still exist? Maybe talk me through execution of the buyback and maybe how that has happened so far. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 02, 2025 / 3:00PM, FET.N - Q1 2025 Forum Energy Technologies Inc Earnings Call

Question: Eric Carlson - - Analyst : Yeah, agreed, so, and then maybe the last thing is in the context of long term, maybe the, obviously the cure for low prices is low prices and kind of, a headwind turning into a tailwind ultimately I mean what have you guys learned I know like when we. Kind of came into 2023, built working capital a little bit in 2023. I mean, how have you guys changed from as headwinds turn to tailwinds and thinking about managing cash really kind of hammering home this return of capital story keeping leverage low, maybe just walk me through kind of as we turn the corner which will ultimately happen I mean how have you guys, change your mindset or yeah, as you plan for that and think about that, maybe just some color would be helpful.

Question: Eric Carlson - - Analyst : And then maybe the last thing on cash would be my last question would be, I know we've seen a few of the sale lease back transactions over the last few years. Is there anything out there potentially that could be a one-off cash generator really set you below that and that leverage show and open up a big window or? To be determined just curious if there's anything that you could see in the short term to generate kind of a one-time cash flow.

Question: Eric Carlson - - Analyst : Good, Thanks guys, appreciate it.