FORUM ENERGY TECHNOLOGIES, INC. Q4 FY2024 earnings call

• Congratulated board members Chris Scott and Leslie Weier, and noted Chris Scott's retirement. • Reflected on progress over the last three years: revenue up 51%, market share (revenue per rig) up 19%, EBITDA increased five times, margins expanded 800 basis points, net debt down 30%, net leverage improved. • Financially, delivered meaningful growth with revenue and EBITDA up 10% and 49% respectively, generated $105 million in free cash flow. • Verapyrm contributed meaningfully to financial results. • Executed $100 million senior secured bond offering, refinanced long-term debt, and announced $75 million share repurchase program. • Made progress on beat the market strategy, capturing profitable market share, leveraging global footprint, developing differentiated technologies. • Highlighted new products like FR 120 SC, FastConnect, Powertron, PumpSaver Plus, MagnaGuard, Unity. • Announced exceeding safety performance expectations in 2024.

Drilling and Completion segment: Revenue decreased by 10% with lower US completions-related activity; segment EBITDA decreased 34% due to lower sales volumes and unfavorable product mix; orders were $103 million, down 20% from the third quarter. Artificial Lift and Downhole segment: Revenue was up 7%, primarily related to increased sales of refinery desalting technology and artificial lift products; sales increases in higher-margin products led to EBITDA growth of 11%; orders in the quarter were up 14%, with increased demand across production equipment and downhole product lines.

• Anticipates global drilling and completion activity in 2025 will decrease 2% to 5% from 2024 levels; North America rig count and frac fleet count forecasted to soften; international activity generally flat; expects beat the market strategy to partially or fully offset market decline, with adjusted EBITDA guidance range $85 million to $105 million. • 2025 free cash flow guidance $40 million to $60 million, with 50% allocated to net debt reduction and 50% to strategic investments including share repurchases. • First-quarter 2025 revenue expected in range of $185 million to $205 million and EBITDA in range of $20 million to $24 million.

• Geopolitical and macroeconomic uncertainties may impact market activity in 2025. • Uncertainty regarding tariffs may lead to short-term impacts and variability in business results, as pass-through of tariff impacts may not be immediate.

Q: John Daniel asked about a new product tied to mobile power (Powertron) and coil wireline completion orders.

A: Neal Lux said Powertron is a heat exchanger for mobile power, with good quotation start; on coil wireline completion, consumable items are consuming well, capital-type products may spike in a few quarters as equipment ages.

Q: Dave Storms asked about puts and takes on guidance and pockets of market strength.

A: Neal Lux said guidance range accounts for market decline and beat the market strategy; consumables had good start, capital products slower initially, international (Canada, Saudi, Kuwait, Oman, Abu Dhabi) could be bright spots.

Q: Jeff Robertson asked about market share growth areas and the Unity remote control system.

A: Neal Lux said focus on growing profitable market share in high-margin areas like artificial lift and downhole; Unity system is being tested, with potential to save personnel and upgrade existing ROVs.

Q: Steve Ferrazzani asked about tariff impact and balance sheet.

A: Lyle Williams said no tariff impact in guidance, but can pass on tariff increases, monitoring daily; balance sheet strong, Verapyrm outperformed, open to acquisitions with right terms.

Q: Eric Carlson asked about earnings statement, relative value, and stock buyback deployment.

A: Lyle Williams said 2025 expected to have improved net income and EPS due to lower interest, taxes, and amortization; stock buyback makes sense due to undervaluation, with 50% of free cash flow for buybacks, limited by net leverage ratio, and focused on second half.