Forum Energy Technologies, Inc. announced second quarter 2014 revenue of $428 million compared to $368 million for the second quarter 2013.
Net income for the quarter was $40 million or $0.41 per diluted share compared to $30 million or $0.32 per diluted share for the prior year period. Included in the second quarter 2014 results was $0.03 per share of non-operational items, and excluding these items adjusted diluted earnings per share were $0.44. See table I for a reconciliation of GAAP to non-GAAP financial information.
Second Quarter Results by Segment
Drilling & Subsea
Drilling & Subsea segment revenue in the second quarter 2014 was $279 million, an increase of $70 million, or 34%, from the second quarter 2013. The increase was primarily due to the contributions from acquisitions closed subsequent to the second quarter 2013, and increased sales of subsea remotely operated vehicles, drilling equipment, and downhole products. Operating income for the segment in the second quarter 2014 was $50 million, an increase of $18 million, or 53%, over the prior year period. Operating margins also improved by 230 basis points over the same period.
Production & Infrastructure
Production & Infrastructure segment revenue in the second quarter 2014 was $149 million, a decrease of $9 million from the second quarter 2013. The segment experienced lower demand for valves, primarily in Canada, and lower orders of production processing systems compared to the prior year. Pressure pumping consumable product revenue increased 30% from the prior year period. Segment operating income increased 18% due to the addition of the Global Tubing joint venture acquired in the third quarter 2013 and improved operating contribution from pressure pumping consumable products.
Review and Outlook
Cris Gaut, Forum’s Chairman and Chief Executive Officer, remarked, “Our second quarter 2014 results included record revenue of $428 million and improved operating income and margins over the first quarter 2014. We are experiencing the benefits of our focus on improving operating execution and increasing our margins.
“Our Drilling & Subsea segment second quarter 2014 revenue increased $18 million sequentially primarily due to the strong demand for subsea equipment and products. We are pleased with the recent acquisition of Quality Wireline & Cable by Forum.
“The Production & Infrastructure segment experienced a sequential increase in revenue of $7 million compared to the first quarter 2014 on increased sales of pressure pumping consumable products, valves, and production and processing systems.
“Orders received in the second quarter 2014 were $441 million, 4% above our record revenue.
“Forum expects diluted earnings per share for the third quarter 2014 of $0.42 to $0.48.”
Forum closed the acquisition of Quality Wireline & Cable, Inc. (“Quality”) during the second quarter of 2014. Based in Calgary, Alberta, Quality is a leading manufacturer of wireline cable, a critical consumable product used on wireline units to perform various well completion and intervention activities.
Forum signed a contract with Marine Platforms Limited to supply four work-class ROV systems, each complete with a Dynacon Launch and Recovery System. The order includes three Perry™ heavy work-class XLX Evo 200HP ROVs, the latest generation of the Perry XLX series.
Forum recently received a $5 million contract to supply cementing hardware and casing accessories to an international service company in the Middle East.
Press Release, July 25, 2014