Business Wire | Aug 6, 2020 05:31PM EDT

Forum Energy Technologies Announces Second Quarter 2020 Results

Aug. 06, 2020

HOUSTON--(BUSINESS WIRE)--Aug. 06, 2020--Forum Energy Technologies, Inc. (NYSE: FET) today announced second quarter 2020 revenue of $113 million, a decrease of $69 million from the first quarter 2020. Net loss for the quarter was $5 million, or $0.05 per diluted share, compared to a net loss of $37 million, or $0.33 per diluted share, for the first quarter 2020. Excluding $27 million, or $0.24 per share of special items, adjusted net loss was $0.29 per diluted share in the second quarter 2020, compared to an adjusted net loss of $0.20 per diluted share in the first quarter 2020. Adjusted EBITDA was $(11.6) million in the second quarter 2020, a decrease of approximately $16.1 million from the first quarter 2020.

Special items in the second quarter 2020, on a pre-tax basis, included a $36 million gain on extinguishment of debt, repurchased by the company at a substantial discount, partially offset by $4 million of restructuring and other charges, $4 million of inventory and other impairments and $1 million of foreign exchange losses. See Tables 1-3 for a reconciliation of GAAP to non-GAAP financial information.

Cris Gaut, Chairman and Chief Executive Officer, remarked, "The dislocation caused by the COVID-19 pandemic and the resulting collapse in energy demand has been dramatic. With little ongoing work for drilling and completions services, customer spending has been exceptionally weak, impacting demand for many of Forum's products.

"In response to these challenges, our management team moved swiftly to restructure the company to weather the storm. Early in the second quarter, we completed significant structural cost reductions, which represent a step change in the rate of continuous cost actions undertaken since the downturn began in 2014. Our results reflect the impact of removing approximately $100 million of cost on an annualized basis in the second quarter 2020 compared to the immediately preceding quarter. On a year-over-year basis, the cost reductions on an annualized basis are close to $150 million. This swift and significant action allowed Forum to significantly offset lower sales volume and pricing limiting our decremental margins to 23% compared to the first quarter. We now have a much leaner cost structure to weather the downturn and benefit from any incremental activity increases.

"Earlier this week, Forum successfully closed the exchange offer for our outstanding notes. This transaction extends our maturity to 2025 and maintains our current cash interest cost. In addition, the new notes preserve equity value for our current shareholders and provide a deleveraging opportunity through a partial, mandatory conversion to equity at a significant premium to the current stock price. Forum now has ample runway to take advantage of the opportunities a market recovery will present."

Segment Results

Drilling & Downhole segment revenue was $47 million, a decrease of $29 million, or 38%, from the first quarter 2020, due to lower sales of drilling and downhole products in North America, resulting from the significant slowdown in drilling and completions activity. Orders in the second quarter were $42 million, a 40% decrease from the first quarter, primarily due to lower orders for downhole and drilling consumable short cycle products. Segment adjusted EBITDA was $(3) million, down $10 million from the first quarter, resulting primarily from the significant decline in revenues partially offset by cost reduction actions taken in the second quarter. Drilling & Downhole operations focus primarily on capital equipment and consumable products for global drilling, well construction, artificial lift and subsea markets.

Completions segment revenue was $18 million, a sequential decrease of $33 million, or 65%, due to the severe slowdown in well completions activity and cannibalization of equipment by our service company customers. Orders in the second quarter were $14 million, a decrease of $36 million, or 72%, from the first quarter 2020. Segment adjusted EBITDA was $(6) million, down $10 million from the first quarter, as a result of the loss of operating leverage on lower sales volumes partially offset by significant cost reductions implemented in the second quarter. The Completions segment designs and manufactures products for the coiled tubing, stimulation and intervention markets.

Production segment revenue was $49 million, a decrease of $7 million, or 13% from the first quarter 2020, due to lower sales for our Valve Solutions product line. Orders in the second quarter were $29 million, a 43% decrease sequentially, due to lower orders for surface production equipment as operators slowed their completions activity and fewer bookings from our valve distribution customers due to their ongoing inventory destocking. Segment adjusted EBITDA was $2.1 million, an increase of $2 million sequentially, as a result of cost reductions from restructuring actions implemented in the second quarter. The Production segment manufactures land well site production equipment, desalination process equipment, and a wide range of valves for upstream, midstream and process industry customers.

Forum Energy Technologies is a global oilfield products company, serving the drilling, downhole, subsea, completions and production sectors of the oil and natural gas industry. The Company's products include highly engineered capital equipment as well as products that are consumed in the drilling, well construction, production and transportation of oil and natural gas. Forum is headquartered in Houston, TX with manufacturing and distribution facilities strategically located around the globe. For more information, please visit www.f-e-t.com.

Forward Looking Statements and Other Legal Disclosure

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are forward-looking statements. Without limiting the generality of the foregoing, forward-looking statements contained in this press release specifically include the expectations of plans, strategies, objectives and anticipated financial and operating results of the Company, including any statement about the Company's future financial position, liquidity and capital resources, operations, performance, acquisitions, returns, capital expenditure budgets, new product development activities, costs and other guidance included in this press release.

These statements are based on certain assumptions made by the Company based on management's experience and perception of historical trends, current conditions, anticipated future developments and other factors believed to be appropriate. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company, which may cause actual results to differ materially from those implied or expressed by the forward-looking statements. Among other things, these include the severity and duration of the COVID-19 pandemic and related repercussions resulting from the negative impact on demand for oil and gas, the volatility of oil and natural gas prices, oilfield development activity levels, the availability of raw materials and specialized equipment, the Company's ability to deliver backlog in a timely fashion, the availability of skilled and qualified labor, competition in the oil and gas industry, governmental regulation and taxation of the oil and natural gas industry, the Company's ability to implement new technologies and services, the availability and terms of capital, and uncertainties regarding environmental regulations or litigation and other legal or regulatory developments affecting the Company's business, and other important factors that could cause actual results to differ materially from those projected as described in the Company's filings with the U.S. Securities and Exchange Commission.

Any forward-looking statement speaks only as of the date on which such statement is made and the Company undertakes no obligation to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by applicable law.

Forum Energy Technologies, Inc.

Condensed consolidated statements of income (loss)

(Unaudited)



Three months ended

June 30, March 31,

(in millions, except per share information) 2020 2019 2020

Revenue $ 113.3 $ 245.6 $ 182.6

Cost of sales 100.4 182.4 160.5

Gross profit 12.9 63.2 22.1

Operating expenses

Selling, general and administrative expenses 48.3 62.9 60.2

Transaction expenses 0.2 0.1 -

Impairments of intangibles, property and 0.1 - 17.3 equipment

Loss (gain) on disposal of assets and other (0.7 ) 0.1 -

Total operating expenses 47.9 63.1 77.5

Earnings from equity investment - 0.6 -

Operating income (loss) (35.0 ) 0.7 (55.4 )

Other expense (income)

Interest expense 6.4 8.2 6.7

Gain on extinguishment of debt (36.3 ) - (7.5 )

Deferred loan costs written off 0.1 - 1.8

Foreign exchange losses (gains) and other, 0.7 (2.2 ) (4.9 )net

Total other (income) expense, net (29.1 ) 6.0 (3.9 )

Loss before income taxes (5.9 ) (5.3 ) (51.5 )

Income tax expense (benefit) (0.4 ) 8.4 (14.4 )

Net loss ^(1) $ (5.5 ) $ (13.7 ) $ (37.1 )



Weighted average shares outstanding

Basic 111.6 110.0 111.2

Diluted 111.6 110.0 111.2



Loss per share

Basic $ (0.05 ) $ (0.12 ) $ (0.33 )

Diluted $ (0.05 ) $ (0.12 ) $ (0.33 )



^(1) Refer to Table 1 for schedule of adjusting items.

Forum Energy Technologies, Inc.

Condensed consolidated statements of income (loss)

(Unaudited)



Six months ended

June 30,

(in millions, except per share information) 2020 2019

Revenue $ 295.9 $ 517.5

Cost of sales 260.9 384.2

Gross profit 35.0 133.3

Operating expenses

Selling, general and administrative expenses 108.5 131.8

Transaction expenses 0.2 0.7

Impairments of goodwill, intangibles, property and 17.4 - equipment

Contingent consideration benefit - (4.6 )

Loss (gain) on disposal of assets and other (0.7 ) 0.1

Total operating expenses 125.4 128.0

Loss from equity investment - (0.3 )

Operating income (loss) (90.4 ) 5.0

Other expense (income)

Interest expense 13.1 16.4

Foreign exchange losses (gains) and other, net (4.4 ) 0.1

Gain on extinguishment of debt (43.7 ) -

Deferred loan costs written off 2.0 -

Total other (income) expense, net (33.0 ) 16.5

Loss before income taxes (57.4 ) (11.5 )

Income tax expense (benefit) (14.8 ) 10.1

Net income (loss) ^(1) $ (42.6 ) $ (21.6 )



Weighted average shares outstanding

Basic 111.4 109.8

Diluted 111.4 109.8



Loss per share

Basic $ (0.38 ) $ (0.20 )

Diluted $ (0.38 ) $ (0.20 )



^(1) Refer to Table 2 for schedule of adjusting items.

Forum Energy Technologies, Inc.

Condensed consolidated balance sheets

(Unaudited)



(in millions of dollars) June 30, December 31, 2020 2019

Assets

Current assets

Cash and cash equivalents $ 109.7 $ 57.9

Accounts receivable-trade, net 89.3 154.2

Inventories, net 377.6 414.6

Other current assets 53.2 39.2

Total current assets 629.8 665.9

Property and equipment, net of accumulated 131.5 154.8depreciation

Operating lease assets 35.5 48.7

Intangible assets, net 253.0 272.3

Other long-term assets 17.1 18.3

Total assets $ 1,066.9 $ 1,160.0

Liabilities and equity

Current liabilities

Current portion of long-term debt $ 1.3 $ 0.7

Other current liabilities 146.9 196.2

Total current liabilities 148.2 196.9

Long-term debt, net of current portion 412.4 398.9

Other long-term liabilities 65.3 78.2

Total liabilities 625.9 674.0

Total equity 441.0 486.0

Total liabilities and equity $ 1,066.9 $ 1,160.0

Forum Energy Technologies, Inc.

Condensed consolidated cash flow information

(Unaudited)

Six Months Ended June 30,

(in millions of dollars) 2020 2019

Cash flows from operating activities

Net loss $ (42.6 ) $ (21.6 )

Impairments of intangible assets, property and 17.4 - equipment

Depreciation and amortization 26.7 32.7

Impairments of operating lease assets 9.3 2.0

Inventory write down 16.4 1.6

Gain on extinguishment of debt (43.7 ) -

Other noncash items and changes in working capital 14.4 26.1

Net cash provided by (used in) operating activities (2.1 ) 40.8



Cash flows from investing activities

Capital expenditures for property and equipment (1.5 ) (9.2 )

Proceeds from sale of business, property and equipment 1.3 0.4

Net cash used in investing activities (0.2 ) (8.8 )



Cash flows from financing activities

Borrowings of debt 85.0 82.0

Repayments of debt (28.2 ) (123.1 )

Repurchases of stock (0.1 ) (1.0 )

Deferred financing costs (2.3 ) -

Net cash provided by (used in) financing activities 54.4 (42.1 )



Effect of exchange rate changes on cash (0.3 ) 0.2

Net increase (decrease) in cash, cash equivalents and $ 51.8 $ (9.9 )restricted cash

Forum Energy Technologies, Inc.

Supplemental schedule - Segment information

(Unaudited)



As Reported As Adjusted ^(4)

Three months ended Three months ended

(in millions June 30, June 30, March 31, June 30, June 30, March 31,of dollars) 2020 2019 2020 2020 2019 2020

Revenue

Drilling & $ 47.2 $ 82.4 $ 76.6 $ 47.2 $ 82.4 $ 76.6 Downhole

Completions 17.6 81.5 50.8 17.6 81.5 50.8

Production 48.6 83.3 55.6 48.6 83.3 55.6

Eliminations (0.1 ) (1.6 ) (0.4 ) (0.1 ) (1.6 ) (0.4 )

Total $ 113.3 $ 245.6 $ 182.6 $ 113.3 $ 245.6 $ 182.6 revenue



Operatingincome (loss)

Drilling &Downhole ^ $ (9.4 ) $ 1.3 $ (4.1 ) $ (7.8 ) $ 2.0 $ 1.0 (1)

Operating ) ) )income (19.9 % 1.6 % (5.4 % (16.5 % 2.4 % 1.3 %margin %

Completions (17.8 ) 2.8 (17.3 ) (13.2 ) 2.9 (4.2 )

Operating ) ) ) )income (101.1 % 3.4 % (34.1 % (75.0 % 3.6 % (8.3 %margin %

Production (1.1 ) 3.6 (8.2 ) (0.7 ) 3.6 (2.2 )

Operating ) ) ) )income (2.3 % 4.3 % (14.7 % (1.4 % 4.3 % (4.0 %margin %

Corporate (7.2 ) (6.8 ) (8.5 ) (5.7 ) (6.7 ) (7.5 )

Totalsegmentoperating (35.5 ) 0.9 (38.1 ) (27.4 ) 1.8 (12.9 )income(loss)

Other itemsnot insegment 0.5 (0.2 ) (17.3 ) 0.7 0.1 - operatingincome ^(2)

Totaloperating $ (35.0 ) $ 0.7 $ (55.4 ) $ (26.7 ) $ 1.9 $ (12.9 )income(loss)

Operating ) ) ) )income (30.9 % 0.3 % (30.3 % (23.6 % 0.8 % (7.1 %margin %



EBITDA ^(3)

Drilling & $ (5.3 ) $ 8.1 $ (1.0 ) $ (3.2 ) $ 8.1 $ 6.5 Downhole

EBITDA (11.2 ) 9.8 % (1.3 ) (6.8 ) 9.8 % 8.5 %Margin % % % %

Completions (11.9 ) 11.3 (19.9 ) (6.2 ) 12.7 3.7

EBITDA (67.6 ) 13.9 % (39.2 ) (35.2 ) 15.6 % 7.3 %Margin % % % %

Production 1.3 5.2 (6.5 ) 2.1 6.1 0.3

EBITDA 2.7 % 6.2 % (11.7 ) 4.3 % 7.3 % 0.5 %Margin % %

Corporate 28.9 (5.4 ) (3.2 ) (4.3 ) (4.2 ) (6.0 )

Total EBITDA $ 13.0 $ 19.2 $ (30.6 ) $ (11.6 ) $ 22.7 $ 4.5

EBITDA 11.5 % 7.8 % (16.8 ) (10.2 ) 9.2 % 2.5 %Margin % % %



^(1) Includes earnings (loss) from equity investment for the three months endedJune 30, 2019.

^(2) Includes transaction expenses, gain/(loss) on disposal of assets, andimpairments of intangibles, property and equipment.

^(3) The Company believes that the presentation of EBITDA is useful to theCompany's investors because EBITDA is an appropriate measure of evaluating theCompany's operating performance and liquidity that reflects the resourcesavailable for strategic opportunities including, among others, investing in thebusiness, strengthening the balance sheet, repurchasing the Company'ssecurities and making strategic acquisitions. In addition, EBITDA is a widelyused benchmark in the investment community. See the attached separate schedulefor the reconciliation of GAAP to non-GAAP financial information.

^(4) Refer to Table 1 for schedule of adjusting items.

Forum Energy Technologies, Inc.

Supplemental schedule - Segment information

(Unaudited)



As Reported As Adjusted ^(4)

Six months ended Six months ended

(in millions of dollars) June 30, June 30, June 30, June 30, 2020 2019 2020 2019

Revenue

Drilling & Downhole $ 123.8 $ 168.3 $ 123.8 $ 168.3

Completions 68.4 176.2 68.4 176.2

Production 104.2 175.3 104.2 175.3

Eliminations (0.5 ) (2.3 ) (0.5 ) (2.3 )

Total revenue $ 295.9 $ 517.5 $ 295.9 $ 517.5



Operating income (loss)

Drilling & Downhole ^(1) $ (13.5 ) $ (1.2 ) $ (6.7 ) $ 2.3

Operating income margin % (10.9 )% (0.7 )% (5.4 )% 1.4 %

Completions (35.1 ) 9.7 (17.4 ) 10.5

Operating income margin % (51.3 )% 5.5 % (25.4 )% 6.0 %

Production (9.2 ) 7.9 (2.9 ) 8.2

Operating income margin % (8.8 )% 4.5 % (2.8 )% 4.7 %

Corporate (15.7 ) (15.2 ) (13.3 ) (14.1 )

Total segment operating (73.5 ) 1.2 (40.3 ) 6.9 income (loss)

Other items not in segment (16.9 ) 3.8 0.7 0.2 operating income (loss) ^(2)

Total operating income (loss) $ (90.4 ) $ 5.0 $ (39.6 ) $ 7.1

Operating income margin % (30.6 )% 1.0 % (13.4 )% 1.4 %



EBITDA ^(3)

Drilling & Downhole $ (6.2 ) $ 10.1 $ 3.3 $ 14.4

EBITDA Margin % (5.0 )% 6.0 % (3.6 )% 8.6 %

Completions (31.8 ) 26.9 (2.5 ) 30.1

EBITDA Margin % (46.5 )% 15.3 % (3.7 )% 17.1 %

Production (5.3 ) 11.6 2.4 13.1

EBITDA Margin % (5.1 )% 6.6 % 2.3 % 7.5 %

Corporate 25.7 (11.0 ) (10.3 ) (9.3 )

Total EBITDA $ (17.6 ) $ 37.6 $ (7.1 ) $ 48.3

EBITDA Margin % (5.9 )% 7.3 % (2.4 )% 9.3 %



^(1) Includes earnings (loss) from equity investment for the six months endedJune 30, 2019.

^(2) Includes transaction expenses, gain (loss) on disposal of assets,contingent consideration benefit, and impairments of intangibles, property andequipment.

^(3) The Company believes that the presentation of EBITDA is useful to theCompany's investors because EBITDA is an appropriate measure of evaluating theCompany's operating performance and liquidity that reflects the resourcesavailable for strategic opportunities including, among others, investing in thebusiness, strengthening the balance sheet, repurchasing the Company'ssecurities and making strategic acquisitions. In addition, EBITDA is a widelyused benchmark in the investment community. See the attached separate schedulefor the reconciliation of GAAP to non-GAAP financial information.

^(4) Refer to Table 2 for schedule of adjusting items.

Forum Energy Technologies, Inc.

Supplemental schedule - Orders information

(Unaudited)





Three months ended

(in millions of dollars) June 30, 2020 June 30, 2019 March 31, 2020

Orders

Drilling & Downhole $ 42.3 $ 78.3 $ 70.0

Completions 14.2 70.7 49.9

Production 29.1 75.6 50.7

Total orders $ 85.6 $ 224.6 $ 170.6



Revenue

Drilling & Downhole $ 47.2 $ 82.4 $ 76.6

Completions 17.6 81.5 50.8

Production 48.6 83.3 55.6

Eliminations (0.1 ) (1.6 ) (0.4 )

Total revenue $ 113.3 $ 245.6 $ 182.6



Book to bill ratio ^(1)

Drilling & Downhole 0.90 0.95 0.91

Completions 0.81 0.87 0.98

Production 0.60 0.91 0.91

Total book to bill ratio 0.76 0.91 0.93



^(1) The book-to-bill ratio is calculated by dividing the dollar value oforders received in a given period by the revenue earned in that same period.The Company believes that this ratio is useful to investors because itprovides an indication of whether the demand for our products, in the marketsin which the Company operates, is strengthening or declining. A ratio ofgreater than one is indicative of improving market demand, while a ratio ofless than one would suggest weakening demand. In addition, the Companybelieves the book-to-bill ratio provides more meaningful insight into futurerevenues for our business than other measures, such as order backlog, becausethe majority of the Company's products are activity based consumable items orshorter cycle capital equipment, neither of which are typically ordered bycustomers far in advance.

Forum Energy Technologies, Inc.

Reconciliation of GAAP to non-GAAP financial information

(Unaudited)

Table 1 - Adjusting items



Three months ended

June 30, 2020 June 30, 2019 March 31, 2020

(in millions, except per Operating EBITDA ^ Net Operating EBITDA ^ Net Operating EBITDA ^ Netshare information) income (1) income income (1) income income (1) income (loss) (loss) (loss) (loss) (loss) (loss)

As reported $ (35.0) $ 13.0 $ (5.5) $ 0.7 $ 19.2 $ (13.7) $ (55.4) $ (30.6) $ (37.1)

% of revenue (30.9) % 11.5 % 0.3 % 7.8 % (30.3) % (16.8) %

Restructuring charges and 4.1 4.1 4.1 1.0 1.0 1.0 5.4 5.4 5.4 other

Transaction expenses 0.2 0.2 0.2 0.1 0.1 0.1 - - -

Inventory and otherworking capital 4.1 4.1 4.1 - - - 10.3 10.3 10.3 adjustments

Impairments ofintangibles, property and 0.1 0.1 0.1 - - - 17.3 17.3 17.3 equipment

Stock-based compensation - 2.6 - - 4.4 - - 3.2 - expense

Impairments of operating (0.2) (0.2) (0.2) (0.5) (0.5) (0.5) 9.5 9.5 9.5 lease assets

Amortization of basisdifference for equity - - - 0.5 0.5 0.5 - - - method investment^ (2)

Gain on extinguishment of - (36.2) (36.2) - - - - (7.5) (7.5) debt

Deferred loan costs - 0.2 0.2 - - - - 1.8 1.8 written off

Loss (gain) on foreign - 0.5 0.5 - (2.1) (2.1) - (4.9) (4.9) exchange, net^ (3)

Impact of U.S. CARES Act - - - - - - - - (16.6)

Valuation allowance on - - - - - 5.9 - - - deferred tax assets

As adjusted ^(1) $ (26.7) $ (11.6) $ (32.7) $ 1.8 $ 22.6 $ (8.8) $ (12.9) $ 4.5 $ (21.8)

% of revenue (23.6) % (10.2) % 0.7 % 9.2 % (7.1) % 2.5 %



Diluted shares 111.6 110.0 111.2 outstanding as reported

Diluted shares 111.6 110.0 111.2 outstanding as adjusted



Diluted EPS - as reported $ (0.05) $ (0.12) $ (0.33)

Diluted EPS - as adjusted $ (0.29) $ (0.08) $ (0.20)



(1) The Company believes that the presentation of EBITDA, adjusted EBITDA,adjusted operating income, adjusted net income and adjusted diluted EPS areuseful to the Company's investors because (i) each of these financial metricsare useful to investors to assess and understand operating performance,especially when comparing those results with previous and subsequent periods orforecasting performance for future periods, primarily because management viewsthe excluded items to be outside of the Company's normal operating results and(ii) EBITDA is an appropriate measure of evaluating the Company's operatingperformance and liquidity that reflects the resources available for strategicopportunities including, among others, investing in the business, strengtheningthe balance sheet, repurchasing the Company's securities and making strategicacquisitions. In addition, these benchmarks are widely used in the investmentcommunity. See the attached separate schedule for the reconciliation of GAAP tonon-GAAP financial information.



(2) The difference between the fair value of our interest in Ashtead and thebook value of the underlying net assets resulted in a basis differencenon-operating gain, which was allocated to fixed assets, intangible assets andgoodwill based on their respective fair values as of the transaction date. Thisamount represents the amortization of the basis difference gain associated withintangible assets and property, plant and equipment which is included in equityearnings (loss) over the estimated life of the respective assets.



(3) Foreign exchange, net primarily relates to cash and receivables denominatedin U.S. dollars by some of our non-U.S. subsidiaries that report in a localcurrency, and therefore the loss has no economic impact in dollar terms.

Forum Energy Technologies, Inc.

Reconciliation of GAAP to non-GAAP financial information

(Unaudited)

Table 2 - Adjusting items



Six months ended

June 30, 2020 June 30, 2019

(in millions, Operating Net income Operating Net incomeexcept per income EBITDA ^ EBITDA ^ share (loss) (1) (loss) income (1) (loss)information) (loss)

As reported $ (90.4) $ (17.6) $ (42.6) $ 5.0 $ 37.6 $ (21.6)

% of revenue (30.6) % (5.9) % 1.0 % 7.3 %

Restructuringcharges and 9.5 9.5 9.5 3.1 3.1 3.1 other

Transaction 0.2 0.2 0.2 0.7 0.7 0.7 expenses

Inventory andother working 14.4 14.4 14.4 (0.1) (0.1) (0.1) capitaladjustments

Impairments ofintangibles, 17.4 17.4 17.4 - - - property andequipment

Impairments ofoperating 9.3 9.3 9.3 2.0 2.0 2.0 lease assets

Stock-basedcompensation - 5.8 - - 8.3 - expense

Contingentconsideration - - - (4.6) (4.6) (4.6) benefit

Gain onextinguishment - (43.7) (43.7) - - - of debt

Deferred loancosts written - 2.0 2.0 - - - off

Amortizationof basisdifference for - - - 0.9 0.9 0.9 equity methodinvestment (2)

Loss (gain) onforeign - (4.4) (4.4) - 0.4 0.4 exchange, net(3)

Income taxexpense - - - - - (0.1) (benefit) ofadjustments

Impact of U.S. - - (16.6) - - - CARES Act

Valuationallowance on - - - - - 5.9 deferred taxassets

As adjusted ^ $ (39.6) $ (7.1) $ (54.5) $ 7.0 $ 48.3 $ (13.4) (1)

% of revenue (13.4) % (2.4) % 1.4 % 9.3 %



Diluted sharesoutstanding as 111.4 109.8 reported

Diluted sharesoutstanding as 111.4 109.8 adjusted



Diluted EPS - $ (0.38) $ (0.20) as reported

Diluted EPS - $ (0.49) $ (0.12) as adjusted



(1) The Company believes that the presentation of EBITDA, adjusted EBITDA,adjusted operating income, adjusted net income and adjusted diluted EPS areuseful to the Company's investors because (i) each of these financial metricsare useful to investors to assess and understand operating performance,especially when comparing those results with previous and subsequent periods orforecasting performance for future periods, primarily because management viewsthe excluded items to be outside of the Company's normal operating results and(ii) EBITDA is an appropriate measure of evaluating the Company's operatingperformance and liquidity that reflects the resources available for strategicopportunities including, among others, investing in the business, strengtheningthe balance sheet, repurchasing the Company's securities and making strategicacquisitions. In addition, these benchmarks are widely used in the investmentcommunity. See the attached separate schedule for the reconciliation of GAAP tonon-GAAP financial information.



(2) The difference between the fair value of our interest in Ashtead and thebook value of the underlying net assets resulted in a basis differencenon-operating gain, which was allocated to fixed assets, intangible assets andgoodwill based on their respective fair values as of the transaction date. Thisamount represents the amortization of the basis difference gain associated withintangible assets and property, plant and equipment which is included in equityearnings (loss) over the estimated life of the respective assets.



(3) Foreign exchange, net primarily relates to cash and receivables denominatedin U.S. dollars by some of our non-U.S. subsidiaries that report in a localcurrency, and therefore the loss has no economic impact in dollar terms.

Forum Energy Technologies, Inc.

Reconciliation of GAAP to non-GAAP financial information

(Unaudited)



Table 3 - Adjusting Items

Three months ended

(in millions of dollars) June 30, 2020 June 30, March 31, 2020 2019

EBITDA reconciliation ^(1)

Net loss $ (5.5 ) $ (13.7 ) $ (37.1 )

Interest expense 6.4 8.2 6.7

Depreciation and amortization 12.5 16.3 14.2

Income tax expense (benefit) (0.4 ) 8.4 (14.4 )

EBITDA $ 13.0 $ 19.2 $ (30.6 )



^(1) The Company believes that the presentation of EBITDA is useful toinvestors because EBITDA is an appropriate measure of evaluating the Company'soperating performance and liquidity that reflects the resources available forstrategic opportunities including, among others, investing in the business,strengthening the balance sheet, repurchasing the Company's securities andmaking strategic acquisitions. In addition, EBITDA is a widely used benchmarkin the investment community.

Forum Energy Technologies, Inc.

Reconciliation of GAAP to non-GAAP financial information

(Unaudited)



Table 4 - Adjusting Items

Six months ended

(in millions of dollars) June 30, 2020 June 30, 2019

EBITDA reconciliation ^(1)

Net loss $ (42.6 ) $ (21.6 )

Interest expense 13.1 16.4

Depreciation and amortization 26.7 32.7

Income tax expense (benefit) (14.8 ) 10.1

EBITDA $ (17.6 ) $ 37.6



^(1) The Company believes that the presentation of EBITDA is useful toinvestors because EBITDA is an appropriate measure of evaluating the Company'soperating performance and liquidity that reflects the resources available forstrategic opportunities including, among others, investing in the business,strengthening the balance sheet, repurchasing the Company's securities andmaking strategic acquisitions. In addition, EBITDA is a widely used benchmarkin the investment community.

Table 5 - Adjusting items

Six months ended

(in millions of dollars) June 30, June 30, 2020 2019

Free cash flow, before acquisitions, reconciliation ^(1)

Net cash provided by (used in) operating activities $ (2.1 ) $ 40.8

Capital expenditures for property and equipment (1.5 ) (9.2 )

Proceeds from sale of property and equipment 0.7 0.4

Free cash flow, before acquisitions $ (2.9 ) $ 32.0



^(1) The Company believes free cash flow, before acquisitions is an importantmeasure because it encompasses both profitability and capital management inevaluating results.

Forum Energy Technologies, Inc.

Supplemental schedule - Product line revenue

(Unaudited)

Three months ended

(in millions of June 30, 2020 June 30, 2019 March 31, 2020dollars)

Revenue: $ % $ % $ %

Drilling Technologies $ 20.0 17.7 % $ 37.3 15.3 % $ 36.5 19.9 %

Downhole Technologies 12.7 11.2 % 28.8 11.7 % 25.0 13.7 %

Subsea Technologies 14.5 12.8 % 16.3 6.6 % 15.1 8.3 %

Drilling & Downhole 47.2 41.7 % 82.4 33.6 % 76.6 41.9 %



Stimulation and 8.5 7.5 % 46.9 19.1 % 24.5 13.4 %Intervention

Coiled Tubing 9.1 8.0 % 34.6 14.1 % 26.3 14.4 %

Completions 17.6 15.5 % 81.5 33.2 % 50.8 27.8 %



Production Equipment 19.4 17.1 % 33.0 13.4 % 18.7 10.2 %

Valve Solutions 29.2 25.8 % 50.3 20.6 % 36.9 20.2 %

Production 48.6 42.9 % 83.3 34.0 % 55.6 30.4 %

Eliminations (0.1 ) (0.1 ) % (1.6 ) (0.8 ) % (0.4 ) (0.1 )%

Total Revenue $ 113.3 100.0 % $ 245.6 100.0 % $ 182.6 100.0 %

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CONTACT: Lyle Williams Executive Vice President and Chief Financial Officer 713.351.7920 lyle.williams@f-e-t.com