Forum Energy Technologies, Inc. today announced third quarter 2013 revenue of $390 million compared to $348 million for the third quarter 2012. Net income for the third quarter 2013 was $33 million or $0.35 per diluted share compared to $41 million or $0.44 per diluted share for the year earlier period.
The Company’s third quarter results include $12 million in pre-tax charges ($0.09 per diluted share) associated with several non-recurring and non-operational items. Excluding these items, adjusted fully-diluted earnings per share for the third quarter 2013 were $0.44. See Table 1 for a reconciliation of GAAP to non-GAAP financial information.
Third Quarter Results by Segment
Drilling & Subsea
Drilling & Subsea revenue in the third quarter 2013 was $248 million, an increase of $45 million, or 22%, from the third quarter 2012 primarily due to the contribution of six acquisitions completed since the third quarter of 2012. Although the decline in the North America land rig count reduced the demand for drilling equipment and products in this region, orders continue to be strong outside of North America. Sales of subsea equipment increased over the prior year period as we delivered on the high order volumes received earlier in 2013. The Company continues to experience strong demand for drillable composite fracturing plugs and downhole protection systems.
Production & Infrastructure
Production & Infrastructure revenue in the third quarter 2013 was $143 million, a decrease of $1 million from the third quarter 2012. The segment benefited from increased demand for pressure pumping consumable products, partially offset by lower sales of valves. Demand for production and processing systems was little changed over the prior year.
Review and Outlook
Cris Gaut, Chairman and Chief Executive Officer of Forum, remarked, “Forum had a good third quarter. We had record revenue of $390 million and improved sequential operating income and margins. Our focus continues to be on adjusting our business for a flat U.S. land rig count, executing the delivery of orders to international markets, and integrating our recent acquisitions.
“Our Drilling & Subsea segment achieved a significant improvement in operating margins compared to the first half of this year due to the restructuring of the business during the third quarter and to an increase in revenues. Orders continued at a very strong pace for drilling capital equipment, especially for international customers.
“The Production & Infrastructure segment had a sequential decline in revenue as both our production equipment and valves experienced declines from the record levels they had in the first half of 2013.
“We are pleased with the integration progress and performance of the recent additions of Blohm + Voss Oil Tools and Moffat 2000, and our investment in Global Tubing.
“As previously announced, during the third quarter Forum issued $300 million of 6.250% senior unsecured notes due 2021. These bonds will increase interest expense approximately $3 million a quarter or $0.02 per share after tax.
“Forum expects diluted earnings per share for the fourth quarter 2013 of $0.42 to $0.46.”
Third Quarter 2013 Acquisitions
Blohm + Voss Oil Tools, with locations in Hamburg, Germany and Willis, Texas, manufactures a comprehensive range of pipe handling equipment used on offshore and onshore drilling rigs worldwide.
Moffat 2000, based in Newcastle, England, is a leading manufacturer of subsea pipeline inspection launching and receiving systems, and subsea connectors.
Global Tubing, located in Dayton, Texas, provides coiled tubing strings and related services to customers worldwide. Global Tubing’s high-quality coiled tubing strings are critical consumable components of coiled tubing units that perform an increasing number of well completion and intervention activities. Forum acquired Global Tubing jointly with Quantum Energy Partners.
Press Release, October 25, 2013