Forum Energy Technologies (FET) JP Morgan Energy, Power and Renewables Conference summary

Company Overview and Strategy

• Manufactures critical equipment and consumables for oil, gas, industrial, and renewable sectors, focusing on safety and efficiency improvements.

• Operates globally with a capital-light model, leveraging manufacturing hubs in the U.S., Canada, UK, Germany, and Saudi Arabia.

• Strategy centers on growing profitable market share, developing differentiated products, utilizing global footprint, and expanding in energy transition, including biogas, hydrogen, geothermal, methane capture, carbon capture, and offshore wind.

• Nearly 75% of sales are activity-based consumables with high margins and frequent replacement cycles.

• Focuses on niche markets with fewer competitors, leveraging technology, IP, and deep customer relationships.

Product Innovation and Market Expansion

• Recent product launches include FR120 Iron Roughneck, PumpSaver Plus, Enviro-Lite greaseless cable, FastConnect, and advanced radiators and pumps, all aimed at increasing efficiency, safety, and emissions reduction.

• Innovation is a core value, with product development driven by market needs, customer feedback, and collaboration.

• About 45% of sales are international, and 20% are for offshore applications, with no need for additional CapEx to support growth.

• Offshore wind and ROV demand are rising, with dual-use products serving both traditional and renewable markets.

• Continuous innovation and collaboration with customers are expanding the total addressable market and supporting growth strategy.

Financial Performance and Outlook

• 2024 guidance reaffirmed: adjusted EBITDA of $100–$121 million and free cash flow of $40–$60 million, reflecting significant improvement over prior years.

• Operating leverage allows for 30–40% of incremental revenue to convert to EBITDA, supporting margin expansion.

• Capital-light model enables 50% revenue growth without increasing CapEx.

• Net leverage at 2.3x EBITDA, with plans to retire $134 million in senior secured notes by year-end and seller notes by mid-2025, targeting net leverage of ~1x EBITDA within 5–6 quarters.

• Maintains a disciplined, asset-light balance sheet with $121 million in liquidity as of March 31, 2024, and a focus on strong cash conversion.