Forum Energy Raises Outlook as Margins Expand
Quarterly revenue reached $226.2 million, rising 8% sequentially and 13% from a year earlier.
Oilfield-products maker Forum Energy Technologies (FET) lifted adjusted EBITDA 39% sequentially to $31.7 million, breaking a three-quarter stretch in which the measure held near $23 million.
The improvement marked an acceleration in both growth and profitability. Sequential revenue growth increased to 8% from roughly 3% in each of the prior two quarters, while adjusted EBITDA margin widened 300 basis points to 14.0%.
Revenue rose 13% from a year earlier to $226.2 million. Net income increased 176% sequentially to $12.4 million, and diluted earnings climbed to $1.05 a share from $0.39. Gross margin expanded about 230 basis points sequentially to 31.5%.
Drilling and Completions revenue increased 10% sequentially to $139.0 million, outpacing the 6% growth in Artificial Lift and Downhole. The segment's adjusted EBITDA rose 29% to $16.5 million as cost management and improved plant utilization following a facility consolidation lifted its margin to 11.9%.
Artificial Lift and Downhole adjusted EBITDA increased 30% to $21.7 million, with its margin widening to 24.8% on higher volume and favorable product mix. Downhole revenue rose 21% sequentially and Coiled Tubing gained 25%, while delayed deliveries contributed to a 28% decline in Production Equipment revenue.
Orders increased 7% sequentially to $235.9 million but remained 10% below the year-earlier level. Book-to-bill eased to 1.04 from 1.06 in the prior quarter, remaining above one. Revenue per active rig rose 13% sequentially even as the average global rig count declined, and Forum Energy gained 13% in market share.
Forum Energy now expects full-year revenue of $870 million to $910 million and adjusted EBITDA of $115 million to $125 million, raising the prior guidance midpoints by 6% and 17%, respectively. The company also increased its adjusted-net-income range to $42 million to $52 million and its free-cash-flow range to $57 million to $77 million.
Free cash flow before acquisitions improved to $9.7 million from $1.4 million sequentially. Net leverage declined to 1.1 times from 1.4 times as net debt fell and trailing adjusted EBITDA increased, giving the higher full-year outlook support from both earnings and cash generation.