Forum Energy Technologies Reports Preliminary Full Year 2023 Results and Issues 2024 Guidance
Revenue: $739 million in 2023, marking a 6% increase from the previous year.
Adjusted EBITDA: Estimated between $67 and $69 million for the full year 2023.
Free Cash Flow: $9 million for Q4 2023, with a forecast of $40 to $60 million for 2024.
Orders and Book-to-Bill Ratio: Orders totaled $724 million with a book-to-bill ratio of 98% in 2023.
2024 Guidance: Anticipates revenue between $200 to $220 million and adjusted EBITDA of $23 to $27 million for Q1 2024.
On February 20, 2024, Forum Energy Technologies Inc (NYSE:FET) announced a delay in the release of its fourth quarter and full year 2023 earnings report and investor conference call, citing additional time needed to finalize the valuation allowance reserve release. Despite this delay, the company has provided preliminary results for 2023 and guidance for 2024. The full earnings report is expected to be issued around March 1, 2024. The preliminary results and future projections were detailed in FET's 8-K filing.
Company Overview
Forum Energy Technologies Inc is a global company serving the oil, natural gas, industrial, and renewable energy industries. Headquartered in Houston, Texas, FET is committed to providing solutions that enhance the safety, efficiency, and environmental impact of its customers' operations. The company's product portfolio includes highly engineered capital equipment and consumable products essential for drilling, well construction, production, and transportation of oil and natural gas.
Preliminary Financial Results and 2024 Outlook
FET reported a 6% year-over-year increase in revenue for 2023, totaling $739 million. The orders for the year amounted to $724 million, with a book-to-bill ratio of 98%. Adjusted EBITDA is expected to be between $67 and $69 million. The fourth quarter of 2023 saw revenues of $185 million, a $6 million increase from the previous quarter, and an adjusted EBITDA range of $15 to $17 million. The company generated $9 million in free cash flow during the fourth quarter.
Looking ahead to 2024, FET forecasts adjusted EBITDA to be between $100 and $120 million and free cash flow to range from $40 to $60 million. The company's guidance assumes a flat global market, with an average rig count down by 5% in the U.S., a slight increase internationally, and stability in Canada. The anticipated commissioning of the Trans Mountain pipeline expansion is expected to boost oil sands activity in the latter half of the year. For the first quarter of 2024, FET projects revenue to be between $200 and $220 million and adjusted EBITDA to range from $23 to $27 million.
Financial Performance Metrics
Key financial metrics such as revenue growth and adjusted EBITDA are crucial indicators of FET's operational efficiency and market position. The company's ability to generate free cash flow is also a significant measure of its financial health, reflecting its capacity to fund operations, invest in growth, and return value to shareholders.
"We are forecasting 2024 adjusted EBITDA of $100 to $120 million and free cash flow of $40 to $60 million. Overall, our forecast assumes a flat global market during the year," stated Forum Energy Technologies in their preliminary results announcement.
The company's performance in these areas is particularly important in the volatile oil and gas industry, where market conditions can change rapidly. FET's focus on delivering value-added solutions and maintaining financial discipline positions it to navigate the industry's cyclical nature effectively.
Analysis of Company's Performance
Despite the delay in the full earnings report, the preliminary results suggest that FET has managed to achieve growth in a challenging market environment. The increase in revenue and the stable book-to-bill ratio indicate sustained demand for the company's products and services. The provided guidance for 2024 reflects cautious optimism, with a realistic assessment of market conditions and potential industry developments.
Investors and stakeholders will be looking forward to the finalized earnings report to gain a complete understanding of FET's financial position and strategic direction. The company's ability to meet its projected financial targets in 2024 will be a key factor in assessing its long-term viability and success in the competitive oil and gas sector.
For more detailed information and updates on Forum Energy Technologies Inc's financial performance, please visit GuruFocus.com.
Explore the complete 8-K earnings release (here) from Forum Energy Technologies Inc for further details.
This article first appeared on GuruFocus.
