UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

~~WASHINGTON,~~Washington, D.C. 20549

~~FORM~~Form 10-Q

~~___________________________________~~



☑						QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended March 31, ~~2023~~2024



☐						TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission File Number 001-35504

FORUM ENERGY TECHNOLOGIES, INC.

(Exact name of registrant as specified in its charter)




Delaware									61-1488595
(State or other jurisdiction of									(I.R.S. Employer Identification No.)
incorporation or organization)

10344 Sam Houston Park Drive

Suite 300

Houston

Texas

77064

(Address of Principal Executive Offices)

(Zip Code)


(281)			949-2500

(Registrant’s telephone number, including area code)


~~______________________________________________~~

~~(Former name, former address and former fiscal year, if changed since last report)~~

Securities registered pursuant to Section 12(b) of the Act


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock	FET	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of large accelerated filer, accelerated filer, smaller reporting company, and emerging growth company in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

☑

Non-accelerated filer

☐

Smaller reporting company

☑

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No þ

As of April ~~28, 2023,~~26, 2024, there were ~~10,149,539~~12,283,670 common shares outstanding.

Table of Contents


PART I - FINANCIAL INFORMATION			34
Item 1. Financial Statements (Unaudited)			34
Condensed consolidated statements of comprehensive loss			34
Condensed consolidated balance sheets			45
Condensed consolidated statements of cash flows			56
Condensed consolidated statements of changes in stockholders’ equity			67
Notes to condensed consolidated financial statements			89
Item 2. Management's discussion and analysis of financial condition and results of operations			1620
Item 3. Quantitative and qualitative disclosures about market risk			2427
Item 4. Controls and procedures			2428
PART II - OTHER INFORMATION			2529
Item 1. Legal proceedings			2529
Item 1A. Risk factors			2529
Item 2. Unregistered sales of equity securities and use of proceeds			2529
Item 3. Defaults Upon Senior Securities			2529
Item 4. Mine Safety Disclosures			2529
Item 5. Other Information			2529
Item 6. Exhibits			2630
SIGNATURES			2731

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

Forum Energy Technologies, Inc. and Subsidiaries

Condensed Consolidated Statements of Comprehensive Income (Loss)

(Unaudited)




		Three Months Ended March 31,						Three Months Ended March 31,
(in thousands, except per share information)	(in thousands, except per share information)		2023		2022		(in thousands, except per share information)		2024	2023
Revenue	Revenue		$	188,957	$	155,174
Cost of sales	Cost of sales		136,855		116,555
Gross profit	Gross profit		52,102		38,619
Operating expenses	Operating expenses
Selling, general and administrative expenses	Selling, general and administrative expenses		45,511		44,305
Loss (gain) on disposal of assets and other			(260)		22
Selling, general and administrative expenses
Selling, general and administrative expenses
Transaction expenses
Gain on disposal of assets and other
Total operating expenses	Total operating expenses		45,251		44,327
Operating income (loss)			6,851		(5,708)
Other expense (income)
Operating income
Other expense
Interest expense	Interest expense		4,549		7,624
Foreign exchange and other losses (gains), net			2,972		(5,986)
Interest expense
Interest expense
Foreign exchange and other losses, net

Total other expense
Total other expense
Total other expense	Total other expense		7,521		1,638
Loss before income taxes	Loss before income taxes		(670)		(7,346)
Income tax expense	Income tax expense		2,816		1,853
Net loss	Net loss		$	(3,486)	$	(9,199)

Weighted average shares outstanding	Weighted average shares outstanding
Weighted average shares outstanding
Weighted average shares outstanding
Basic
Basic
Basic	Basic		10,179		5,683
Diluted	Diluted		10,179		5,683
Loss per share	Loss per share
Basic	Basic		$	(0.34)	$	(1.62)
Basic
Basic
Diluted	Diluted		$	(0.34)	$	(1.62)

Other comprehensive income (loss), net of tax of $0:	Other comprehensive income (loss), net of tax of $0:
Other comprehensive income (loss), net of tax of $0:
Other comprehensive income (loss), net of tax of $0:
Net loss
Net loss
Net loss	Net loss		$	(3,486)	$	(9,199)
Change in foreign currency translation	Change in foreign currency translation		4,158		(6,992)
Gain on pension liability			15		30
Gain (loss) on pension liability
Comprehensive income (loss)	Comprehensive income (loss)		$	687	$	(16,161)

The accompanying notes are an integral part of these condensed consolidated financial statements.

Forum Energy Technologies, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(Unaudited)
(in thousands, except share information) March 31, 2023 December 31, 2022
Assets
Current assets
Cash and cash equivalents $ 46,764 $ 51,029
Accounts receivable—trade, net of allowances of $11,102 and $10,690 164,033 154,247
Inventories, net 287,614 269,828
Prepaid expenses and other current assets 23,196 21,957
Accrued revenue 671 665
Costs and estimated profits in excess of billings 14,538 15,139
Total current assets 536,816 512,865
Property and equipment, net of accumulated depreciation 62,596 62,963
Operating lease assets 57,039 57,270
Deferred financing costs, net 1,086 1,166
Intangible assets, net 185,629 191,481
Deferred income taxes, net 99 184
Other long-term assets 6,691 8,828
Total assets $ 849,956 $ 834,757
Liabilities and equity
Current liabilities
Current portion of long-term debt $ 988 $ 782
Accounts payable—trade 129,934 118,261
Accrued liabilities 58,839 76,544
Deferred revenue 13,420 14,401
Billings in excess of costs and profits recognized 421 305
Total current liabilities 203,602 210,293
Long-term debt, net of current portion 151,999 239,128
Deferred income taxes, net 1,051 902
Operating lease liabilities 64,299 64,626
Other long-term liabilities 12,162 12,773
Total liabilities 433,113 527,722
Commitments and contingencies
Equity
Common stock, $0.01 par value, 14,800,000 shares authorized, 10,858,424 and 6,223,454 shares issued 109 62
Additional paid-in capital 1,366,184 1,253,613
Treasury stock at cost, 708,885 and 570,247 shares (142,057) (138,560)
Retained deficit (684,081) (680,595)
Accumulated other comprehensive loss (123,312) (127,485)
Total equity 416,843 307,035
Total liabilities and equity $ 849,956 $ 834,757

~~The accompanying notes are an integral part of these condensed consolidated financial statements.~~

~~Forum Energy Technologies, Inc. and Subsidiaries~~

~~Condensed Consolidated Statements of Cash Flows~~

~~(Unaudited)~~
Three Months Ended March 31,
(in thousands) 2023 2022
Cash flows from operating activities
Net loss $ (3,486) $ (9,199)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation expense 2,570 3,423
Amortization of intangible assets 6,016 6,218
Inventory write down 892 194
Stock-based compensation expense 841 2,151
Deferred income taxes 421 (266)
Noncash losses and other, net 1,398 2,283
Changes in operating assets and liabilities
Accounts receivable—trade (10,047) (9,168)
Inventories (18,123) (23,031)
Prepaid expenses and other assets 1,037 1,298
Cost and estimated profit in excess of billings 769 (6,871)
Accounts payable, deferred revenue and other accrued liabilities (5,527) 11,851
Billings in excess of costs and estimated profits earned 111 (3,758)
Net cash used in operating activities $ (23,128) $ (24,875)
Cash flows from investing activities
Capital expenditures for property and equipment (1,083) (860)
Proceeds from sale of property and equipment 264 118
Net cash used in investing activities $ (819) $ (742)
Cash flows from financing activities
Borrowings on Credit Facility 119,426 95,883
Repayments on Credit Facility (94,426) (95,883)
Payment of capital lease obligations (273) (239)
Repurchases of stock (5,370) (360)
Net cash provided by (used in) financing activities $ 19,357 $ (599)
Effect of exchange rate changes on cash 325 (40)
Net decrease in cash, cash equivalents and restricted cash (4,265) (26,256)
Cash, cash equivalents and restricted cash at beginning of period 51,029 46,858
Cash, cash equivalents and restricted cash at end of period $ 46,764 $ 20,602
Noncash activities
Operating lease right of use assets obtained in exchange for lease obligations $ 1,835 $ 1,320
Finance lease right of use assets obtained in exchange for lease obligations 926 100
Conversion of debt to common stock 113,650 —


(in thousands, except share information)	March 31, 2024		December 31, 2023
Assets
Current assets
Cash and cash equivalents	$	48,488	$	46,165
Accounts receivable—trade, net of allowances of $9,983 and $10,850	161,978		146,747
Inventories, net	303,003		299,639
Prepaid expenses and other current assets	20,893		21,887
Costs and estimated profits in excess of billings	10,488		13,365
Accrued revenue	1,935		1,801
Total current assets	546,785		529,604
Property and equipment, net of accumulated depreciation	87,660		61,401
Operating lease assets	54,818		55,399
Deferred financing costs, net	2,585		1,159
Intangible assets, net	261,405		167,970
Goodwill	63,202		—
Deferred income taxes, net	130		368
Other long-term assets	4,804		5,160
Total assets	$	1,021,389	$	821,061
Liabilities and equity
Current liabilities
Current portion of long-term debt	$	5,150	$	1,186
Accounts payable—trade	108,254		125,918
Accrued liabilities	64,937		62,463
Deferred revenue	10,276		10,551
Billings in excess of costs and profits recognized	4,480		4,221
Total current liabilities	193,097		204,339
Long-term debt, net of current portion	282,302		129,567
Deferred income taxes, net	28,183		940
Operating lease liabilities	59,898		61,450
Other long-term liabilities	11,707		12,132
Total liabilities	575,187		408,428
Commitments and contingencies
Equity
Common stock, $0.01 par value, 14,800,000 shares authorized, 12,992,570 and 10,901,878 shares issued	130		109
Additional paid-in capital	1,413,970		1,369,288
Treasury stock at cost, 708,900 and 708,900 shares	(142,057)		(142,057)
Retained deficit	(709,786)		(699,471)
Accumulated other comprehensive loss	(116,055)		(115,236)
Total equity	446,202		412,633
Total liabilities and equity	$	1,021,389	$	821,061

The accompanying notes are an integral part of these condensed consolidated financial statements.

Forum Energy Technologies, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Unaudited)


	Three Months Ended March 31,
(in thousands)	2024		2023
Cash flows from operating activities
Net loss	$	(10,315)	$	(3,486)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation expense	4,072		2,570
Amortization of intangible assets	9,766		6,016
Inventory write down	534		892
Stock-based compensation expense	1,573		841

Deferred income taxes	(1,002)		421
Noncash losses and other, net	1,299		1,398
Changes in operating assets and liabilities
Accounts receivable—trade	8,783		(10,047)
Inventories	8,577		(18,123)
Prepaid expenses and other assets	2,694		1,037
Cost and estimated profit in excess of billings	2,822		769
Accounts payable, deferred revenue and other accrued liabilities	(24,071)		(5,527)
Billings in excess of costs and estimated profits earned	291		111
Net cash provided by (used in) operating activities	5,023		(23,128)
Cash flows from investing activities
Capital expenditures for property and equipment	(2,910)		(1,083)
Proceeds from sale of property and equipment	177		264
Payments related to business acquisition, net of cash acquired	(150,086)		—
Net cash used in investing activities	(152,819)		(819)
Cash flows from financing activities
Borrowings on Credit Facility	245,167		119,426
Repayments on Credit Facility	(148,696)		(94,426)
Proceeds from issuance of Seller Term Loan	59,677		—
Payment of capital lease obligations	(147)		(273)
Deferred financing costs	(3,070)		—
Repurchases of stock	—		(3,497)
Payment of withheld taxes on stock-based compensation plans	(1,090)		(1,873)
Net cash provided by financing activities	151,841		19,357

Effect of exchange rate changes on cash	(1,722)		325

Net increase (decrease) in cash, cash equivalents and restricted cash	2,323		(4,265)
Cash, cash equivalents and restricted cash at beginning of period	46,165		51,029
Cash, cash equivalents and restricted cash at end of period	$	48,488	$	46,764

Noncash activities
Operating lease right of use assets obtained in exchange for lease obligations	$	2,775	$	1,835
Finance lease right of use assets obtained in exchange for lease obligations	750		926
Stock issuance related to business acquisition	44,220		—
Conversion of debt to common stock	—		113,650

The accompanying notes are an integral part of these condensed consolidated financial statements.

Forum Energy Technologies, Inc. and Subsidiaries

Condensed Consolidated Statements of Changes in Stockholders’ Equity

(Unaudited)


Three Months Ended March 31, 2023
Three Months Ended March 31, 2024
Three Months Ended March 31, 2024
Three Months Ended March 31, 2024
(in thousands)	(in thousands)	Common stock		Additional paid-in capital		Treasury stock		Retained deficit		Accumulated other comprehensive income / (loss)		Total equity
Balance at December 31, 2022		$	62	$	1,253,613	$	(138,560)	$	(680,595)	$	(127,485)	$	307,035
(in thousands)
(in thousands)
Balance at December 31, 2023
Balance at December 31, 2023
Balance at December 31, 2023
Stock-based compensation expense
Stock-based compensation expense
Stock-based compensation expense	Stock-based compensation expense	—		841		—		—		—		841
Restricted stock issuance, net of forfeitures	Restricted stock issuance, net of forfeitures	1		(1,874)		—		—		—		(1,873)
Conversion of debt to common stock		46		113,604		—		—		—		113,650
Treasury stock		—		—		(3,497)		—		—		(3,497)
Restricted stock issuance, net of forfeitures
Restricted stock issuance, net of forfeitures
Stock issuance related to business acquisition
Stock issuance related to business acquisition
Stock issuance related to business acquisition

Currency translation adjustment

Currency translation adjustment

Currency translation adjustment	Currency translation adjustment	—		—		—		—		4,158		4,158
Change in pension liability	Change in pension liability	—		—		—		—		15		15
Change in pension liability
Change in pension liability
Net loss	Net loss	—		—		—		(3,486)		—		(3,486)
Balance at March 31, 2023		$	109	$	1,366,184	$	(142,057)	$	(684,081)	$	(123,312)	$	416,843
Net loss
Net loss
Balance at March 31, 2024
Balance at March 31, 2024
Balance at March 31, 2024

The accompanying notes are an integral part of these condensed consolidated financial statements.

Forum Energy Technologies, Inc. and subsidiaries

Condensed Consolidated Statements of Changes in Stockholders’ Equity

(Unaudited)

														Three Months Ended March 31, 2022
Three Months Ended March 31, 2023														Three Months Ended March 31, 2023
(in thousands)	(in thousands)	Common stock		Additional paid-in capital		Treasury stock		Retained deficit		Accumulated other comprehensive income / (loss)		Total equity		(in thousands)	Common stock	Additional paid-in capital	Treasury stock	Retained deficit	Accumulated other comprehensive income / (loss)	Total equity
Balance at December 31, 2021		$	61	$	1,249,962	$	(135,562)	$	(684,307)	$	(101,028)	$	329,126
Balance at December 31, 2022
Stock-based compensation expense	Stock-based compensation expense	—		2,151		—		—		—		2,151
Restricted stock issuance, net of forfeitures	Restricted stock issuance, net of forfeitures	1		(361)		—		—		—		(360)
Conversion of debt to common stock
Treasury stock
Currency translation adjustment	Currency translation adjustment	—		—		—		—		(6,992)		(6,992)
Change in pension liability	Change in pension liability	—		—		—		—		30		30
Net loss	Net loss	—		—		—		(9,199)		—		(9,199)
Balance at March 31, 2022		$	62	$	1,251,752	$	(135,562)	$	(693,506)	$	(107,990)	$	314,756
Balance at March 31, 2023

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

Forum Energy Technologies, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

1. Organization and Basis of Presentation

Forum Energy Technologies, Inc. (the “Company,” “FET,” “we,” “our,” or “us”), a Delaware corporation, is a global manufacturing company serving the oil, natural gas, industrial and renewable energy industries. With headquarters located in Houston, Texas, FET provides value added solutions that increase the safety and efficiency of energy exploration and production.

Basis of Presentation

The Company's accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany transactions have been eliminated in consolidation.

In management's opinion, all adjustments, consisting of normal recurring adjustments, necessary for the fair statement of the Company’s financial position, results of operations and cash flows have been included. Operating results for the three months ended March 31, ~~2023~~2024 are not necessarily indicative of the results that may be expected for the year ending December 31, ~~2023~~2024 or any other interim period.

These interim financial statements are unaudited and have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Accordingly, they do not include all of the information and notes required by accounting principles generally accepted in the United States of America (“U.S. GAAP”) for complete consolidated financial statements and should be read in conjunction with the audited consolidated financial statements for the year ended December 31, ~~2022,~~2023, which are included in the Company’s ~~2022~~2023 Annual Report on Form 10-K filed with the SEC on ~~February 28, 2023.~~March 5, 2024.

Change of Segment

In the first quarter 2024, following the Variperm Holdings Ltd. ("Variperm") acquisition, we aligned our reportable segments with business activity drivers, our customer base, and the manner in which we review and evaluate operating performance. FET now operates in the following two reportable segments: (1) Drilling and Completions and (2) Artificial Lift and Downhole. Refer to Note 10 Business Segments for the product lines making up each segment. Our historical results of operations were recast retrospectively to reflect these changes in accordance with U.S. GAAP.

2. Recent Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board ("FASB"), which the Company adopts as of the specified effective date. Unless otherwise discussed, management believes that the impact of recently issued standards, which are not yet effective, will not have a material impact on the Company's consolidated financial statements upon adoption.

Accounting ~~Standard~~Standards Issued But Not Yet Adopted ~~in 2023~~

~~Inflation Reduction Act of 2022.~~Segment Reporting (Topic 280). In August 2022, the Inflation Reduction Act of 2022 (“IRA”) was signed into law. The IRA, among other provisions, imposes a 15% corporate alternative minimum tax on the adjusted financial statement income of certain large corporationsNovember 2023, FASB issued ASU 2023-07, which improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant expenses. This update is effective retrospectively for ~~tax~~fiscal years beginning after December ~~31, 2022~~15, 2023, and ~~a 1% excise tax on stock repurchases made by publicly traded U.S. corporations~~interim periods within fiscal years after December ~~31, 2022.~~15, 2024. Early adoption is permitted. The ~~adoption~~Company is in the process of ~~this standard did not~~evaluating the impact it may have ~~a material impact~~ on our consolidated financial statements.

~~Reference Rate Reform~~Income Taxes (Topic ~~848)~~740). . In ~~March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2020-04~~, which provides temporary, optional practical expedients and exceptions to enable a smoother transition to the new reference rates which will replace the London Interbank Offered Rate (“LIBOR”) and other reference rates expected to be discontinued. In January 2021, theDecember 2023, FASB issued ASU ~~2021-01,~~2023-09, which ~~expanded the scope to include derivative instruments impacted by the discounting transition. In~~improves income tax disclosures. This update is effective for fiscal years beginning after December 2022, the FASB issued ASU 2022-06, which extended the temporary accounting rules from December 31, 2022 to December 31, 2024. Effective April 2023, the Company transitioned its Credit Facility from LIBOR to the Secured Overnight Financing Rate.15, 2025. Early adoption is permitted. This update should be applied prospectively but retrospective application is permitted. The Company ~~plans to adopt~~is in the ~~guidance prospectively in second quarter 2023 and does not expect~~process of evaluating the impact it tomay have ~~a material impact~~ on ~~the Company's~~our consolidated financial statements.

3. Revenue

Revenue is recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to receive in exchange for those goods or services. For a detailed discussion of our revenue recognition policies, refer to the Company’s ~~2022~~2023 Annual Report on Form 10-K.

~~Disaggregated Revenue~~

~~Refer to Note 9~~ ~~Business Segments~~ ~~for disaggregated revenue by product line and geography.~~

Table of Contents

Forum Energy Technologies, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

Disaggregated Revenue

Refer to Note 10 Business Segments for disaggregated revenue by product line and geography.

Contract Balances

Contract balances are determined on a contract by contract basis. Contract assets represent revenue recognized for goods and services provided to our customers when payment is conditioned on something other than the passage of time. Similarly, the Company records a contract liability when we receive consideration, or such consideration is unconditionally due, from a customer prior to transferring goods or services to the customer under the terms of a sales contract. Such contract liabilities typically result from billings in excess of costs incurred on construction contracts and advance payments received on product sales.

The following table reflects the changes in our contract assets and contract liabilities balances for the three months ended March 31, ~~2023~~2024 (in thousands):


		March 31, 2023		December 31, 2022			Decrease
						$			%
	March 31, 2024																March 31, 2024					December 31, 2023					Decrease
					$																						$					%
Accrued revenue	Accrued revenue	$	671	$	665
Costs and estimated profits in excess of billings	Costs and estimated profits in excess of billings	14,538		15,139
Costs and estimated profits in excess of billings
Costs and estimated profits in excess of billings
Contract assets - current
Contract assets - current
Contract assets - current	Contract assets - current	15,209		15,804
Contract assets - noncurrent	Contract assets - noncurrent	2,413		2,638
Contract assets - noncurrent
Contract assets - noncurrent
Contract assets
Contract assets
Contract assets	Contract assets	$	17,622	$	18,442		$	(820)		(4)	%	$	13,493			$	$	16,994			$	$	(3,501)			(21)		(21)		%

Deferred revenue	Deferred revenue	$	13,420	$	14,401
Deferred revenue
Deferred revenue
Billings in excess of costs and profits recognized
Billings in excess of costs and profits recognized
Billings in excess of costs and profits recognized	Billings in excess of costs and profits recognized	421		305
Contract liabilities	Contract liabilities	$	13,841	$	14,706		$	(865)		(6)	%
Contract liabilities
Contract liabilities														$	14,756				$	14,772				$	(16)				—		%

During the three months ended March 31, ~~2023,~~2024, our contract assets decreased by ~~$0.8~~$3.5 million and our contract liabilities decreased ~~by $0.9 million~~nominally primarily due to the timing of milestone billings for projects in our Subsea ~~Technologies~~ product line. The noncurrent portion of contract assets is recorded on the consolidated balance sheets as other long-term assets.

During the three months ended March 31, ~~2023,~~2024, we recognized ~~$7.3~~$5.5 million of revenue that was included in the contract ~~liability~~liabilities balance at the beginning of the period.

Substantially all of our contracts are less than one year in duration. As such, we have elected to apply the practical expedient which allows an entity to exclude disclosures about its remaining performance obligations if ~~the performance~~such obligation is part of a contract that has an original expected duration of one year or less.

Table of Contents

Forum Energy Technologies, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

4. Acquisition

On January 4, 2024, the Company and its wholly owned subsidiary acquired all of the issued and outstanding common shares of Variperm (the “Variperm Acquisition”). Variperm, headquartered in Canada, is a manufacturer of downhole technology solutions, providing sand and flow control products for heavy oil applications.

Total consideration for the Variperm Acquisition includes approximately $150.0 million of cash and 2.0 million shares of the Company’s common stock determined using the market price at closing date, which was subject to customary purchase price adjustments. In connection with the closing, to fund the cash portion of the purchase price, the Company borrowed $90.0 million under its senior secured asset-based lending facility (“Credit Facility”) on January 2, 2024 and entered into a $60.0 million second lien seller term loan credit agreement (“Seller Term Loan”) on January 4, 2024. In March 2024, in connection with the finalization of working capital adjustments, the principal amount of the Seller Term Loan was reduced by $0.3 million.

During the three months ended March 31, 2024, the Company recognized acquisition-related costs of $5.9 million for consulting fees and other costs expensed as transaction expenses. The acquisition of business on the statement of cash flow is presented net of the cash and cash equivalents acquired.

The following table summarizes the fair value of identified assets acquired and liabilities assumed at the date of acquisition. The preliminary allocation of consideration transferred is based on management's estimates, judgments and assumptions. These estimates, judgments and assumptions are subject to change upon final valuation and should be treated as preliminary values. Management estimated that consideration paid exceeded the fair value of the net assets acquired. Therefore, goodwill of $63.9 million was recorded, most of which is not expected to be deductible for income tax purposes. The final allocation of purchase consideration could include changes in the estimated fair value of inventories; property, plant and equipment; intangible assets comprising of customer relationships, backlog and trade names; deferred income taxes; and leases. The Company has preliminarily estimated the useful lives of customer relationships, backlog and trade names as approximately eight years, two years and eight years, respectively.

The following table summarizes the fair values of the assets acquired and liabilities assumed at the date of the acquisition (in thousands):


Cash and cash equivalents	$	4,388
Accounts receivable—trade	24,036
Inventories	13,422

Property and equipment	26,213
Intangible assets	104,600





Prepaid expenses and other assets	3,718
Total assets acquired	176,377


Current liabilities	11,760


Long-term liabilities	29,864
Total liabilities assumed	41,624
Total identifiable net assets acquired	134,753
Goodwill	63,941
Total purchase consideration	$	198,694

The excess of the total equity value of Variperm based on the purchase consideration over net assets acquired was recorded as goodwill. The goodwill is primarily attributable to revenue synergies and assembled workforce expected to be realized from the acquisition. Intangible assets acquired as a result of the Variperm Acquisition are amortized on a straight-line basis to reflect the pattern in which the economic benefits of the intangible assets are realized. Acquired goodwill and intangibles relate to our Downhole reporting unit and Downhole asset group.

The fair value for trade names were estimated using the income approach, specifically the relief-from-royalty method which estimates the cost savings that accrue to the owner of the intangible assets that would otherwise be payable as royalties or licenses fees on revenues earned through the use of the asset. The fair value of customer relationships and backlog were estimated using the multi-period excess earnings method. The excess earning

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(Unaudited)

method model estimates revenues and cash flows derived from the asset and then deducts portions of the cash flow that can be attributed to supporting assets. The resulting cash flow, which is attributable solely to the asset acquired, is then discounted at a rate of return commensurate with the risk of the asset to calculate the present value.

Unaudited Pro Forma Financial Information

The acquired Variperm business contributed revenues and net income of $27.4 million and $4.4 million, respectively, to the Company for the period from January 4, 2024 to March 31, 2024. The following unaudited pro forma summary presents the results of operations of the Company as if the acquisition of Variperm occurred on January 1, 2023:


	Three Months Ended
	March 31,
		2024		2023
Revenue		$	202,392	$	226,700
Net income (loss)		(7,148)		(5,587)

The amounts have been calculated after applying the Company's accounting policies and adjusting the results of Variperm to reflect additional depreciation, amortization, and other purchase accounting adjustments assuming the fair value adjustments to the property, plant and equipment and intangibles assets and other purchase accounting adjustments have been applied on January 1, 2023. The pro forma amounts do not include any potential cost savings or other expected benefits of the acquisition, and are presented for illustrative purposes only and are not necessarily indicative of results that would have been achieved if the acquisition had occurred as of January 1, 2023 or of future operating performance.

5. Inventories

The Company's significant components of inventory at March 31, ~~2023~~2024 and December 31, ~~2022~~2023 were as follows (in thousands):

March 31, 2023 December 31, 2022
Raw materials and parts $ 95,435 $ 94,182
Work in process 34,240 27,489
Finished goods 197,566 187,448
Total inventories 327,241 309,119
Less: inventory reserve (39,627) (39,291)
Inventories, net $ 287,614 $ 269,828


	March 31, 2024		December 31, 2023
Raw materials and parts	$	99,096	$	92,563
Work in process	27,574		28,693
Finished goods	212,782		216,570
Total inventories	339,452		337,826
Less: inventory reserve	(36,449)		(38,187)
Inventories, net	$	303,003	$	299,639

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5. 6. Goodwill and Intangible Assets

Goodwill

The changes in the carrying amount of goodwill from December 31, 2023 to March 31, 2024, were as follows (in thousands):


	Artificial Lift and Downhole
Goodwill, December 31, 2023	$	—
Acquisitions	63,941
Impact on non-U.S. local currency translation	(739)
Goodwill, March 31, 2024	$	63,202

Goodwill is not amortized and is tested for impairment at least annually or when events and circumstances indicate that fair value may be below its carrying value.

Intangible Assets

Intangible assets consisted of the following as of March 31, ~~2023~~2024 and December 31, ~~2022,~~2023, respectively (in thousands):


		March 31, 2023
		Gross Carrying Amount		Accumulated Amortization		Net Intangibles		Amortization Period (In Years)
	March 31, 2024																					March 31, 2024
	Gross Carrying Amount												Gross Carrying Amount				Accumulated Amortization					Net Intangibles					Amortization Period (In Years)
Customer relationships	Customer relationships	$	266,996	$	(151,891)	$	115,105	10 - 35	Customer relationships	$	366,577	$		$	(171,760)	$		$	194,817		10 - 35				10 - 35
Patents and technology	Patents and technology	88,984		(36,794)		52,190		5 - 19	Patents and technology	88,983		(42,533)			(42,533)		46,450			46,450			5 - 19			5 - 19
Non-compete agreements		188		(188)		—		5
Trade names	Trade names	42,710		(27,599)		15,111		7 - 19	Trade names	46,677		(29,423)			(29,423)		17,254			17,254			7 - 19			7 - 19
Trademarks	Trademarks	5,089		(1,866)		3,223		15	Trademarks	5,089		(2,205)			(2,205)		2,884			2,884			15			15
Non-compete agreements									Non-compete agreements	189				(189)				—						5
Total intangible assets	Total intangible assets	$	403,967	$	(218,338)	$	185,629


		December 31, 2022
		Gross Carrying Amount		Accumulated Amortization		Net Intangibles		Amortization Period (In Years)
	December 31, 2023																					December 31, 2023
	Gross Carrying Amount												Gross Carrying Amount				Accumulated Amortization					Net Intangibles					Amortization Period (In Years)
Customer relationships	Customer relationships	$	266,537	$	(147,496)	$	119,041	10 - 35	Customer relationships	$	267,838	$		$	(164,672)	$		$	103,166		10 - 35				10 - 35
Patents and technology	Patents and technology	88,863		(35,298)		53,565		5 - 19	Patents and technology	89,151		(41,189)			(41,189)		47,962			47,962			5 - 19			5 - 19
Non-compete agreements		188		(188)		—		5
Trade names	Trade names	42,638		(27,071)		15,567		7 - 19	Trade names	42,847		(28,974)			(28,974)		13,873			13,873			7 - 19			7 - 19
Trademarks	Trademarks	5,089		(1,781)		3,308		15	Trademarks	5,089		(2,120)			(2,120)		2,969			2,969			15			15
Non-compete agreements									Non-compete agreements	190				(190)				—						5
Total intangible assets	Total intangible assets	$	403,315	$	(211,834)	$	191,481

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(Unaudited)

7. Debt

~~Notes payable and lines of credit~~Debt as of March 31, ~~2023~~2024 and December 31, ~~2022~~2023 consisted of the following (in thousands):


		March 31, 2023		December 31, 2022
	March 31, 2024					March 31, 2024	December 31, 2023
2025 Notes	2025 Notes	$	134,208	$	256,970
Seller Term Loan
Credit Facility
Other debt
Long-term debt, principal amount
Unamortized debt discount	Unamortized debt discount	(7,143)		(15,314)
Debt issuance cost	Debt issuance cost	(1,753)		(3,759)
Credit Facility		25,000		—
Other debt		2,675		2,013
Total debt		152,987		239,910
Long-term debt, carrying value
Less: current portion	Less: current portion	(988)		(782)
Long-term debt, net of current portion	Long-term debt, net of current portion	$	151,999	$	239,128

2025 Notes

~~In August 2020, we exchanged $315.5 million principal amount of our previous 6.25% unsecured notes due 2021 for new~~Our 9.00% convertible secured notes due August 2025 ~~(the “2025~~(“2025 Notes”)~~. The 2025 Notes~~, of which $134.2 million principal amount was outstanding at March 31, 2024, pay interest at the rate of 9.00%, of which 6.25% is payable in cash and 2.75% is payable in cash or additional notes, at the Company’s option. The 2025 Notes are secured by a first lien on substantially all of the Company’s assets, except for Credit Facility priority collateral, which secures the 2025 Notes on a second lien basis. ~~During the quarter ended March 31,~~In January 2023, $122.8 million or 48% of the then-outstanding principal amount of the 2025 Notes mandatorily converted into approximately 4.5 million shares of common stock.

Seller Term Loan

~~Table~~On January 4, 2024, the Company entered into the Seller Term Loan in connection with the closing of ~~Contents~~the Variperm Acquisition, which had an initial principal amount of $60.0 million and matures in December 2026. In March 2024, in connection with the finalization of purchase price adjustments, the principal amount of the Seller Term Loan was reduced by $0.3 million. The Seller Term Loan bears interest at the rate of (i) 11.00% per year for the period commencing on the Closing Date to (but excluding) the first anniversary of the Closing Date, (ii) 17.00% per annum for the period commencing on the first anniversary of the Closing Date to (but excluding) the second anniversary of the Closing Date and (iii) 17.50% per annum for the period commencing on the second anniversary of the Closing Date to (but excluding) the maturity date. The Company has an option to prepay the Seller Term Loan anytime without premium or penalty.

~~Forum Energy Technologies, Inc.~~The Seller Term Loan requires the Company to maintain a fixed charge coverage ratio of at least 1.00 to 1.00 as of the last day of each fiscal quarter commencing at the time excess availability is less than the greater of (x) 12.5% of the Line Cap and ~~Subsidiaries~~(y) $31.25 million and continuing until excess availability exceeds the greater of (x) 12.5% of the Line Cap and (y) $31.25 million for 60 consecutive days. “Line Cap” has the meaning set forth in the Credit Facility.

~~Notes~~Subject to ~~Condensed Consolidated Financial Statements (Continued)~~customary exceptions, all obligations under the Seller Term Loan are guaranteed, jointly and severally, by our wholly owned U.S. and Canadian subsidiaries and are secured by substantially all assets of each such entity and the Company, subject to customary exclusions pursuant to certain intercreditor arrangements.

~~(Unaudited)~~

The Seller Term Loan also contains customary representations and warranties and affirmative and negative covenants, as well as customary events of default, with corresponding grace periods, including, without limitation, payment defaults, cross-defaults to other agreements evidencing indebtedness and bankruptcy-related defaults.

Credit Facility

~~In September 2021, we amended our senior secured revolving credit facility (~~“~~Credit Facility”) to, among other things, extend the maturity date to September 2026, reduce the aggregate amount of the commitment under the~~Our Credit Facility, ~~and change the interest rate applicable~~which has a maturity date, subject to ~~outstanding loans. Following such amendment, our Credit Facility~~certain exceptions, of September 2028, provides revolving credit commitments of ~~$179.0~~$250.0 million (with a sublimit of up to ~~$45.0~~$70.0 million available for the issuance of letters of credit for the account of the Company and certain of its domestic subsidiaries) (the “U.S. Line”), of which up to ~~$20.0~~$50.0 million is available to certain of our Canadian subsidiaries for loans in U.S. or Canadian dollars (with a sublimit of up to ~~$3.0~~$10.0 million available for the issuance of letters of credit for the account of our Canadian

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subsidiaries) (the “Canadian Line”). Lender commitments under the Credit Facility, subject to certain limitations, may be increased by an additional $100.0 million.

Availability under the Credit Facility is subject to a borrowing base calculated by reference to eligible accounts receivable in the U.S., Canada and certain other jurisdictions (subject to a cap) and eligible inventory in the U.S. and Canada. Such eligible accounts receivable and eligible inventory serve as priority collateral for the Credit Facility, which is also secured on a second lien basis by substantially all of the Company's other assets. The amount of eligible inventory included in the borrowing base is restricted to the lesser of $125.0 million (subject to a quarterly reduction of $0.5 million) and 80.0% of the total borrowing base. Our borrowing capacity under the Credit Facility could be reduced or eliminated, depending on future fluctuations in our receivables and inventory. As of March 31, ~~2023,~~2024, our total borrowing base was ~~$178.3~~$189.1 million, of which ~~$25.0~~$96.5 million amount was drawn and ~~$24.0~~$21.0 million was used ~~for~~as security offor outstanding letters of credit, resulting in remaining availability of ~~$129.3~~$71.6 million.

~~Prior to the amendment discussed below, borrowings~~Borrowings under the U.S. Line ~~were subject to an~~bear interest at a rate equal to, at ~~the Company's~~our option, either (a) the ~~LIBOR,~~Secured Overnight Financing Rate (“SOFR”), subject to a floor of 0.00%, plus a margin of 2.25% to 2.75%, or (b) a base rate plus a margin of 1.25% to 1.75%, in each case based upon the Company's quarterly total net leverage ~~ratio, with the~~ratio. The U.S. Line base rate is determined by reference to the greatest of (i) the federal funds rate plus 0.50% per annum, (ii) the one-month adjusted ~~LIBOR~~term SOFR plus 1.00% per annum, and (iii) the ~~rate~~“prime rate” of interest announced ~~from time to time,~~ by Wells Fargo ~~at its principal office in San Francisco as its prime rate,~~Bank, National Association, subject to a floor of 0.00%.

Borrowings under the Canadian Line ~~were subject to an~~bear interest at a rate ~~during the reporting period~~ equal to, at our ~~subsidiary's~~Canadian borrowers’ option, either (a) ~~the~~ Canadian ~~Dollar Offered~~Overnight Repo Rate Average (“~~CDOR”~~CORRA”), subject to a floor of 0.00%, plus a margin of 2.25% to 2.75%, or (b) a base rate plus a margin of 1.25% to 1.75%, in each case based upon the Company's quarterly net leverage ratio. The Canadian ~~line~~Line base rate is determined by reference to the greater of (i) the Floor, (ii) the one-month ~~CDOR plus 1.00%~~CORRA, and ~~(ii)~~(iii) the prime rate for Canadian dollar commercial loans made in Canada as reported by Thomson Reuters, subject to a floor of 0.00%.

The weighted average interest rate under the Credit Facility was approximately 8.34% and 7.96% for the three months ended March 31, ~~2023.~~2024 and 2023, respectively.

The Credit Facility also provides for a commitment fee in the amount of (a) 0.375% on the unused portion of revolving commitments if average usage of the Credit Facility is greater than 50% and (b) 0.500% on the unused portion of revolving commitments if average usage of the Credit Facility is less than or equal to 50%.

If excess availability under the Credit Facility falls below the greater of 12.5% of the borrowing base and ~~$22.4~~$31.25 million, we will be required to maintain a fixed charge coverage ratio of at least 1.00:1.00 as of the end of each fiscal quarter until excess availability under the Credit Facility exceeds such ~~thresholds~~threshold for ~~at least~~ 60 consecutive days. ~~Furthermore,~~

Subject to customary exceptions, all obligations under the Credit Facility ~~includes~~are guaranteed, jointly and severally, by our wholly-owned U.S. subsidiaries and, in the case of the Canadian Line, our wholly-owned Canadian subsidiaries, and are secured by substantially all assets of each such entity and the Company, subject to customary exclusions.

The Credit Facility contains various covenants that, among other things, limit our ability (none of which are absolute) to incur additional indebtedness or issue certain preferred shares, grant certain liens, make certain loans and investments, pay dividends, make distributions or make other restricted payments, enter into mergers or acquisitions unless certain conditions are satisfied, change our lines of business, prepay certain indebtedness, enter into certain affiliate transactions or engage in certain asset dispositions.

If an ~~obligation to prepay outstanding loans with cash on hand in excess~~event of ~~certain thresholds and includes a cross-default to the 2025 Notes.~~

~~In April 2023,~~default exists under the Credit Facility, ~~was amended~~the lenders will have the right to accelerate the maturity of the obligations outstanding under the Credit Facility and exercise other rights and remedies. Obligations outstanding under the Credit Facility, however, will be automatically accelerated upon an event of default arising from a bankruptcy or insolvency event. An event of default includes, among other things, ~~(a) replace~~nonpayment of principal, interest, fees or other amounts within certain grace periods; representations and warranties proving to be untrue in any material respect; failure to perform or otherwise comply with covenants in the ~~interest rate benchmark for borrowings denominated~~Credit Facility or other loan documents, subject, in ~~U.S. dollars from LIBOR~~certain instances, to grace periods; cross-defaults to certain other indebtedness if such default occurs at the ~~Secured Overnight Financing Rate; (b) reset existing capacity under~~final maturity of such indebtedness or if the ~~general "Permitted Dispositions" basket; and (c) increase~~effect of such default is to cause, or permit the ~~domestic letter~~holders of ~~credit sublimit from $45.0 million~~such indebtedness to ~~$70.0 million.~~

~~Deferred Loan Costs~~

~~We have incurred loan costs that have been deferred and are amortized to interest expense over~~cause, the ~~term~~acceleration of such indebtedness; bankruptcy or insolvency events; material monetary judgment defaults; invalidity or unenforceability of the ~~2025 Notes~~Credit Facility or any other loan document; and the occurrence of a Change of Control (as defined in the Credit ~~Facility. In connection with the September 2021 Credit Facility amendment, we deferred approximately $1.6 million of loan costs that will be amortized over the facility's remaining life.~~Facility).

Other Debt

Other debt consists ~~primarily~~ of various finance leases of equipment.

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Letters of Credit and Guarantees

We execute letters of credit in the normal course of business to secure the delivery of product from specific vendors and also to guarantee our fulfillment of performance obligations relating to certain large contracts. WeThe Company had ~~$24.0~~$21.0 million and ~~$21.8~~$20.3 million in total outstanding letters of credit as of March 31, ~~2023~~2024 and December 31, ~~2022,~~2023, respectively.

7.8. Income Taxes

For interim periods, our income tax expense or benefit is computed based on our estimated annual effective tax rate and any discrete items that impact the interim periods. For the three months ended March 31, ~~2023~~2024 and ~~2022,~~2023, the Company recorded a tax expense of ~~$2.8~~$3.5 million and ~~$1.9~~$2.8 million, respectively. The estimated annual effective tax rates for all periods were impacted by losses in jurisdictions where the recording of a tax benefit is not available. Furthermore, the tax expense or benefit recorded can vary from period to period depending on the Company’s relative mix of earnings and losses by jurisdiction. Finally, the Company believes that it is reasonably possible that a decrease of approximately $1.5 million of noncurrent unrecognized tax benefits may occur by the end of 2024 as a result of a lapse of the statute of limitations.

The Organization for Economic Co-operation and Development (“OECD”) introduced Base Erosion and Profit Shifting (“BEPS”) Pillar 2 rules that impose a global minimum tax rate of 15%. Numerous countries, including European Union member states, have enacted, or are expected to enact, legislation to be effective January 1, 2024 with general implementation of a global minimum tax by January 1, 2025. Based on current enacted legislation, we do not expect a material impact on our future effective tax rate.

We have deferred tax assets related to net operating loss and other tax carryforwards in the U.S. and in certain states and foreign jurisdictions. We recognize deferred tax assets to the extent that we believe these assets are more likely than not to be realized. In making such a determination, we consider all available positive and negative evidence, including, but not limited to, our recent history of pretax losses over the prior three year period, the goodwill and intangible asset impairments for various reporting units, the future reversals of existing taxable temporary differences, the projected future taxable income ~~tax-planning~~or loss and ~~recent operating results.~~tax-planning. We believe that there is a reasonable possibility that within the next 12 months, a portion of the valuation allowance will no longer be needed. Release of the valuation allowance would result in the recognition of certain deferred tax assets and a decrease to income tax expense for the period the release is recorded. However, the exact timing and amount of the valuation allowance release are subject to change on the basis of the level of profitability that we are able to actually achieve. As of March 31, ~~2023,~~2024, we do not anticipate being able to fully utilize all of the losses prior to their expiration in the following jurisdictions: the U.S., the U.K., Germany, Singapore, China and Saudi Arabia. As a result, we have certain valuation allowances against our deferred tax assets as of March 31, ~~2023.~~2024.

8.9. Fair Value Measurements

The Company had ~~$25.0~~$96.5 million ofand $59.7 million borrowings outstanding under the Credit Facility and Seller Term Loan as of March 31, ~~2023.~~2024. The Credit Facility incurs interest at a variable interest rate, and therefore, the carrying amount approximates fair value. The Company has an option to prepay the Seller Term Loan anytime without premium or penalty, therefore, the carrying amount approximates fair value. The fair value of the debt is classified as a Level 2 measurement because interest rates charged are similar to other financial instruments with similar terms and maturities.

The fair value of our 2025 Notes is estimated using Level 2 inputs in the fair value hierarchy and is based on quoted prices for those or similar instruments. At March 31, 2024, the fair value and the carrying value of our 2025 Notes approximated $134.1 million and $128.8 million, respectively. At December 31, 2023, the fair value and the carrying value of our 2025 Notes approximated ~~$130.3~~$130.9 million and ~~$125.3 million, respectively. At December 31, 2022, the fair value and the carrying value of our 2025 Notes approximated $272.8 million and $237.9~~$127.9 million, respectively.

There were no other significant outstanding financial instruments as of March 31, ~~2023~~2024 and December 31, ~~2022~~2023 that required measuring the amounts at fair value on a recurring basis. We did not change our valuation techniques associated with recurring fair value measurements from prior periods, and there were no transfers between levels of the fair value hierarchy during the three months ended March 31, ~~2023.~~2024.

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9.10. Business Segments

~~The Company reports~~In the first quarter 2024, following the Variperm Acquisition, we aligned our reportable segments with business activity drivers, our customer base, and the manner in which we review and evaluate operating performance. FET now operates in the following two reportable segments: (1) Drilling and Completions and (2) Artificial Lift and Downhole. Our historical results of operations were recast retrospectively to reflect these changes in accordance with U.S. GAAP.

The Drilling and Completions segment designs, manufactures and supplies products and solutions to the ~~following three reporting segments: Drilling &~~drilling, subsea, coiled tubing, well stimulation and intervention markets, including applications in oil and natural gas, renewable energy, defense and communications. The Artificial Lift and Downhole ~~Completions,~~segment designs, manufactures and ~~Production.~~ supplies products and solutions for the artificial lift, production and infrastructure markets.

The Company’s reportable segments are strategic units that offer distinct products and services. They are managed separately since each business segment requires different marketing strategies. Operating segments have not been aggregated as part of a reportable segment. The Company evaluates the performance of its reportable segments based on operating income. This segmentation is representative of the manner in which our Chief Operating Decision Maker and our board of directors make decisions on how to allocate resources and assess performance. We consider the Chief Operating Decision Maker to be the Chief Executive Officer.

The amounts indicated below as “Corporate” relate to costs and assets not allocated to the reportable segments.

Summary financial data by segment follows (in thousands):

Three Months Ended March 31,
2023 2022
Revenue
Drilling & Downhole $ 76,794 $ 71,260
Completions 73,667 52,542
Production 38,995 31,505
Eliminations (499) (133)
Total revenue $ 188,957 $ 155,174
Segment operating income (loss)
Drilling & Downhole $ 8,438 $ 5,986
Completions 3,556 (715)
Production 1,629 (1,752)
Corporate (7,032) (9,205)
Total segment operating income (loss) 6,591 (5,686)
Loss (gain) on disposal of assets and other (260) 22
Operating income (loss) $ 6,851 $ (5,708)


	Three Months Ended
	March 31,
		2024		2023
Revenue
Drilling and Completions		$	119,071	$	126,764
Artificial Lift and Downhole		83,342		62,207
Eliminations		(21)		(14)
Total revenue		$	202,392	$	188,957

Segment operating income
Drilling and Completions		$	4,559	$	4,990
Artificial Lift and Downhole		11,786		8,633
Corporate		(7,252)		(7,032)
Segment operating income		9,093		6,591
Transaction expenses		5,921		—
Gain on disposal of assets and other		(28)		(260)
Operating income		$	3,200	$	6,851

A summary of consolidated assets by reportable segment is as follows (in thousands):

March 31, 2023 December 31, 2022
Drilling & Downhole $ 348,581 $ 340,819
Completions 373,222 366,771
Production 98,427 95,089
Corporate 29,726 32,078
Total assets $ 849,956 $ 834,757


	March 31, 2024		December 31, 2023
Drilling and Completions	$	593,294	$	615,033
Artificial Lift and Downhole	413,533		178,785
Corporate	14,562		27,243
Total assets	$	1,021,389	$	821,061

Corporate assets primarily include cash, certain prepaid assets and deferred loan costs.

~~The following table presents our revenues disaggregated by product line (in thousands):~~

Three Months Ended March 31,
2023 2022
Drilling Technologies $ 40,777 $ 29,235
Downhole Technologies 23,211 19,564
Subsea Technologies 12,806 22,461
Stimulation and Intervention 47,326 30,159
Coiled Tubing 26,341 22,383
Production Equipment 19,896 15,167
Valve Solutions 19,099 16,338
Eliminations (499) (133)
Total revenue $ 188,957 $ 155,174

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The following table presents our revenues disaggregated by product line (in thousands):


	Three Months Ended
		March 31,
		2024		2023
Drilling		$	36,472	$	40,307
Subsea		21,835		12,806
Stimulation and Intervention		38,560		47,310
Coiled Tubing		22,204		26,341
Downhole		52,243		23,211
Production Equipment		18,482		19,896
Valve Solutions		12,617		19,100
Eliminations		(21)		(14)
Total revenue		$	202,392	$	188,957

The following table presents our revenues disaggregated by geography (in thousands):
Three Months Ended March 31,
2023 2022
United States $ 129,186 $ 97,232
Middle East 17,982 11,153
Canada 13,668 11,389
Europe & Africa 11,672 15,377
Latin America 8,768 10,964
Asia-Pacific 7,681 9,059
Total revenue $ 188,957 $ 155,174


	Three Months Ended
	March 31,
		2024		2023
United States		$	111,317	$	129,186
Canada		35,639		13,668
Europe & Africa		21,602		11,672
Middle East		17,355		17,982
Asia-Pacific		10,168		7,681
Latin America		6,311		8,768
Total revenue		$	202,392	$	188,957

~~10.~~11. Commitments and Contingencies

In the ordinary course of business, the Company is, and in the future could be, involved in various pending or threatened legal actions, some of which may or may not be covered by insurance. Management has reviewed such pending judicial and legal proceedings, the reasonably anticipated costs and expenses in connection with such proceedings, and the availability and limits of insurance coverage, and has established reserves that are believed to be appropriate in light of those outcomes that are believed to be probable and can be estimated. The reserves accrued at March 31, ~~2023~~2024 and December 31, ~~2022,~~2023, respectively, are immaterial. In the opinion of management, the Company’s ultimate liability, if any, with respect to these actions is not expected to have a material adverse effect on the Company’s financial position, results of operations or cash flows.

In October of 2017, one of our subsidiaries, Global Tubing LLC (“Global Tubing”), filed suit against Tenaris Coiled Tubes, LLC and Tenaris, S.A. (together “Tenaris”) in the United States District Court for the Southern District of Texas seeking a declaration that its DURACOILTM ~~products do not infringe certain Tenaris patents related to coiled tubing. Tenaris filed counterclaims against Global Tubing alleging DURACOIL~~TM products infringe three patents. Tenaris sought unspecified damages and a permanent injunction. In response, Global Tubing alleged that its products do not infringe and the Tenaris patents are invalid and unenforceable. On March 20, 2023, the court agreed with Global Tubing, finding all patents unenforceable and dismissing all Tenaris infringement claims. Global Tubing intends to seek an award of its attorneys’ fees and costs incurred as a result of the litigation.

For further disclosure regarding certain litigation matters, refer to Note 12 of the notes to the consolidated financial statements included in Item 8 of the Company’s ~~2022~~2023 Annual Report on Form 10-K filed with the SEC on ~~February 28, 2023.~~March 5, 2024.

1418

Table of Contents

Forum Energy Technologies, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

~~11.~~12. Earnings (Loss) Per Share

The calculation of basic and diluted earnings per share for each period presented was as follows (dollars and shares in thousands, except per share amounts):

Three Months Ended March 31,
2023 2022
Net loss $ (3,486) $ (9,199)
Weighted average shares outstanding - basic 10,179 5,683
Dilutive effect of stock options and restricted stock — —
Dilutive effect of convertible notes due 2025 — —
Weighted average shares outstanding - diluted 10,179 5,683
Loss per share
Basic $ (0.34) $ (1.62)
Diluted $ (0.34) $ (1.62)


	Three Months Ended
	March 31,
		2024		2023
Net loss		$	(10,315)	$	(3,486)



Weighted average shares outstanding - basic		12,201		10,179
Dilutive effect of stock options and restricted stock		—		—

Weighted average shares outstanding - diluted		12,201		10,179

Loss per share
Basic		$	(0.85)	$	(0.34)
Diluted		$	(0.85)	$	(0.34)

For the three months ended March 31, ~~2023~~2024 and ~~2022,~~2023, we excluded all potentially dilutive restricted shares and stock options in calculating diluted earnings per share as the effect was anti-dilutive due to net losses incurred for these periods. Diluted earnings per share was calculated using treasury stock method for the restricted shares and stock options.

~~12.~~13. Stockholders' Equity

Stock-based compensation

During the three months ended March 31, ~~2023,~~2024, the Company granted ~~86,912 time-based restricted stock units to employees that vest ratably over three years.~~

~~In addition, during the three months ended March 31, 2023, the Company granted 86,912~~86,391 performance restricted stock units ~~to employees~~ (assuming target performance) to an employee that vest based upon the Company's total shareholder return compared to the total shareholder return of ~~the Company's common stock as compared to~~ a group of peer companies over three different performance periods. The performance periods run from January 1, ~~2023 through December 31, 2023, January 1, 2023~~2024 through December 31, 2024, ~~and~~ January 1, ~~2023~~2024 through December 31, 2025 and January 1, 2024 through December 31, 2026, and 1/3 of each award is allocated to each performance period. The performance restricted stock units may settle for between 0% and 200% of the target units granted.

Also, the Company granted ~~in shares of~~20,000 time-based restricted stock units to employees that vest after 1 year.

Liability-classified awards

During the ~~Company’s common stock.~~three months ended March 31, 2024, the Company granted 82,406 performance restricted stock units (assuming target performance) to employees with same terms as the performance restricted stock units above.

Also, during the three months ended March 31, 2024, the Company granted 168,797 time-based restricted stock units to employees that vest ratably over three years.

~~13.~~14. Related Party Transactions

The Company has sold and purchased inventory, services and fixed assets to and from affiliates of ~~a former director.~~certain directors. The dollar amounts of these related party activities are not significant to the Company’s unaudited condensed consolidated financial statements.

1519

Item 2. Management’s discussion and analysis of financial condition and results of operations

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond the Company’s control. All statements, other than statements of historical fact, included in this Quarterly Report on Form 10-Q regarding our strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans and objectives of management are forward-looking statements. When used in this Quarterly Report on Form 10-Q, the words “will,” “could,” “believe,” “anticipate,” “intend,” “estimate,” “expect,” “may,” “continue,” “predict,” “potential,” “project” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words.

All forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q. We disclaim any obligation to update or revise these statements unless required by law, and you should not place undue reliance on these forward-looking statements. Although we believe that our plans, intentions and expectations reflected in or suggested by the forward-looking statements we make in this Quarterly Report on Form 10-Q are reasonable, forward-looking statements are not guarantees of future performance and involve risks and uncertainties that may cause actual results to differ materially from our plans, intentions or expectations. This may be the result of various factors, including, but not limited to, those factors discussed in “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K filed with the SEC on ~~February 28, 2023,~~March 5, 2024, and elsewhere in this Quarterly Report on Form 10-Q. These cautionary statements qualify all forward-looking statements attributable to us or persons acting on our behalf.

Overview

We are a global manufacturing company serving the oil, natural gas, industrial and renewable energy industries. With headquarters ~~located~~ in Houston, Texas, FET provides value added solutions aimed at improving the safety, efficiency, and environmental impact of our ~~customers'~~customers’ operations. Our highly engineered products include capital equipment and consumable products. FET’s customers include oil and natural gas operators, land and offshore drilling contractors, oilfield service companies, pipeline and refinery operators, and renewable energy and new energy companies. Consumable products are used by our customers in drilling, well construction and ~~completions~~completion activities and at processing centers and refineries. Our capital products are directed at drilling rig equipment for constructing new ~~and~~or upgrading existing rigs, subsea construction and development projects, pressure pumping equipment, the placement of production equipment on new producing wells, downstream capital projects and capital equipment for renewable energy projects. For the three months ended March 31, ~~2023,~~2024, approximately ~~65%~~80% of our revenue was derived from consumable products and activity-based equipment, while the balance was primarily derived from capital products with a small amount from rental and other services.

We expect that the world’s long-term energy demand will continue to rise for many decades. We also expect hydrocarbons will continue to play a vital role in meeting the world’s long-term energy needs while renewable energy sources develop to scale. As such, we remain focused on serving our customers in both oil and natural gas as well as renewable energy applications. We are continuing to develop products to help oil and gas operators lower expenses, increase production and reduce their emissions while also deploying our technologies in renewable energy applications.

In the first quarter 2024, following the Variperm Acquisition, we aligned our reportable segments with business activity drivers, our customer base, and the manner in which we review and evaluate operating performance. FET now operates in the following two reportable segments: (1) Drilling and Completions and (2) Artificial Lift and Downhole. Refer to Note 10 Business Segments for the product lines making up each segment. Our historical results of operations were recast retrospectively to reflect these changes in accordance with U.S. GAAP.

A summary of the products and services offered by each segment is as follows:

•Drilling ~~& Downhole~~and Completions. This segment designs, manufactures and supplies products and ~~provides related services~~solutions to the drilling, subsea, coiled tubing, well ~~construction, artificial lift~~stimulation and ~~subsea energy construction~~intervention markets, including applications in the oil and natural gas, renewable energy, defense and ~~communications.~~communications industries. The products and ~~related services~~solutions consist primarily ~~of:~~of (i) capital equipment and ~~a broad line of expendable~~consumable products ~~consumed~~used in the drilling process; (ii) ~~well construction casing and cementing~~capital equipment and ~~protection~~aftermarket products ~~for artificial lift equipment and cables; and (iii)~~including subsea remotely operated vehicles (“ROVs”) and trenchers, submarine rescue vehicles, specialty components and tooling, and ~~complementary subsea~~ technical ~~services.~~

•~~Completions.~~ This segment designs, manufactures and supplies products and provides related services to the coiled tubing, well stimulation and intervention markets. The products and related services consist primarily of: (i)services; (iii) capital equipment and consumable products sold to the pressure pumping ~~hydraulic fracturing and flowback services markets,~~market, including hydraulic fracturing pumps, cooling systems, and high-pressure flexible hoses and flow ~~iron as well as~~iron; (iv) wireline cable and pressure control equipment used in the well completion and intervention service markets; and ~~(ii)~~(v) coiled tubing strings and pressure control equipment used in coiled tubing operations, as well as coiled line pipe and related services.

•~~Production~~Artificial Lift and Downhole. This segment designs, manufactures and supplies products and ~~provides related equipment and services~~solutions for the artificial lift, well construction, production and infrastructure markets. The products and ~~related services~~solutions consist primarily of: (i) products designed to safeguard artificial lift equipment and downhole cables: (ii) well construction casing and cementing equipment; (iii) customized downhole technology solutions, providing sand and flow control products for heavy oil applications; (iv) engineered process systems, production equipment, as well as specialty separation equipment; and ~~(ii)~~(v) a wide range of industrial valves focused on ~~serving~~ oil and natural gas ~~customers~~ as well as power generation, renewable energy and other general industrial applications.

Market Conditions

~~Demand~~Generally, demand for our products and services is directly related to our ~~customers'~~customers’ capital and operating budgets. These budgets are heavily influenced by current and expected energy prices. In addition, demand for our capital products is driven by the utilization of service company equipment. Utilization is a function of equipment capacity and durability in demanding environments.

~~Recent inflationary pressures, rising interest rates and volatility in the banking sector have created a heightened concern of a global recession. Oil~~Compared to fourth quarter 2023, oil and natural gas prices ~~softened~~have remained relatively flat despite tightened supply from OPEC+ production cuts and continued geopolitical tensions in Ukraine and the ~~first quarter 2023 in part as~~Middle East. These tensions could lead to a ~~result of such recessionary fears. Despite~~disruption to world energy markets and international supply chains. Although these near-term macroeconomic events have presented challenges, we expect that the ~~world's~~world’s long-term energy demand will continue to rise and may outpace global supply as ~~China's economy recovers from the COVID-19 pandemic shutdowns and~~ OPEC+ remains committed to maintaining stable oil prices. We expect that hydrocarbons will continue to play a vital role in meeting the ~~world's~~world’s long-term energy needs while renewable energy sources ~~continue to develop.~~become increasingly prominent.

The price of oil has varied dramatically over the last several years. ~~The spot prices for WTI~~Average West Texas Intermediate (“WTI”) and United Kingdom Brent ~~fell from $61.14 and $67.77 per barrel, respectively, as of December 31, 2019 to lows below $15.00 per barrel in April 2020. Since that time,~~(“Brent”) oil prices ~~rebounded to highs above $120.00 per barrel in March 2022 but have softened~~were slightly higher in the first quarter ~~2023 to an average of $75.93 and $81.07, for WTI and Brent, respectively. In addition, natural gas prices have decreased by 43.5% comparing the first quarter 2023~~2024 compared to the first quarter ~~2022.~~2023. In addition, average natural gas prices were 18.6% lower in the first quarter 2024 compared to the first quarter 2023.

Our revenues, over the long-term, are highly correlated to the global drilling rig count, which ~~has increased to 1,896 rigs as of the end of~~decreased 5.3%during the first quarter ~~2023 from a low of 1,030 rigs in the third quarter 2020. The~~2024 compared to average ~~U.S.~~global rig count ~~for the~~during first quarter ~~2023~~2023. The decrease was ~~2.1% lower and 20.1% higher compared to the fourth quarter 2022 and first quarter 2022, respectively. The~~driven by decline in North America rig count of 15.3%, offset by growth in international rig count ~~for the~~of 5.5%compared to first quarter ~~2023 was 0.9% higher and 11.2% higher compared to the fourth quarter 2022 and first quarter 2022, respectively.~~

~~Global drilling and completions activity remains below pre-pandemic levels. However, international~~2023. International markets are expected to ~~grow throughout 2023 and~~continue to outpace the U.S. in 2024. In the U.S., publicly owned exploration and production companies are expected to continue to exercise disciplined capital spending while privately owned exploration and production companies fluctuate their activity in response to changes in oil and natural gas prices.

The table below shows average crude oil and natural gas prices for ~~West Texas Intermediate crude oil (“WTI”), United Kingdom~~WTI, Brent, ~~crude oil (“Brent”),~~ and Henry ~~Hub natural gas:~~Hub:

Three Months Ended
March 31, December 31, March 31,
2023 2022 2022
Average global oil, $/bbl
West Texas Intermediate $ 75.93 $ 82.79 $ 95.18
United Kingdom Brent $ 81.07 $ 88.72 $ 100.87
Average North American Natural Gas, $/Mcf
Henry Hub $ 2.64 $ 5.55 $ 4.67


	Three Months Ended
	March 31,		December 31,		March 31,
	2024		2023		2023
Average global oil, $/bbl
West Texas Intermediate	$	77.50	$	78.53	$	75.93
United Kingdom Brent	$	82.92	$	84.01	$	81.07

Average North American Natural Gas, $/Mcf
Henry Hub	$	2.15	$	2.74	$	2.64

The table below shows the average number of active drilling rigs operating by geographic area and drilling for different purposes, based on the weekly rig count information published by Baker Hughes Company.


			Three Months Ended
			March 31,	December 31,	March 31,
			2023	2022	2022
			Three Months Ended
			Three Months Ended
			Three Months Ended
		March 31,				March 31,	December 31,		March 31,
		2024				2024		2023
Active Rigs by Location	Active Rigs by Location
United States
United States
United States	United States		760	776	633
Canada	Canada		221	187	198
International	International		915	907	823
Global Active Rigs	Global Active Rigs		1,896	1,870	1,654

Land vs. Offshore Rigs	Land vs. Offshore Rigs
Land vs. Offshore Rigs
Land vs. Offshore Rigs
Land
Land
Land	Land		1,655	1,634	1,446
Offshore	Offshore		241	236	208
Global Active Rigs	Global Active Rigs		1,896	1,870	1,654

U.S. Commodity Target	U.S. Commodity Target
U.S. Commodity Target
U.S. Commodity Target
Oil/Gas
Oil/Gas
Oil/Gas	Oil/Gas		603	618	510
Gas	Gas		155	156	122
Unclassified	Unclassified		2	2	1
Total U.S. Active Rigs	Total U.S. Active Rigs		760	776	633

U.S. Well Path	U.S. Well Path
U.S. Well Path
U.S. Well Path
Horizontal
Horizontal
Horizontal	Horizontal		697	708	575
Vertical	Vertical		18	24	24
Directional	Directional		45	44	34
Total U.S. Active Rigs	Total U.S. Active Rigs		760	776	633

The table below shows the amount of total inbound orders by segment:

(in millions of dollars) Three Months Ended
March 31, December 31, March 31,
2023 2022 2022
Drilling & Downhole $ 81.0 $ 87.2 $ 70.9
Completions 66.0 81.4 53.7
Production 31.9 46.5 40.4
Total Orders $ 178.9 $ 215.1 $ 165.0


	Three Months Ended
	March 31,		December 31,		March 31,
(in millions of dollars)	2024		2023		2023
Drilling and Completions	$	116.6	$	113.8	$	121.3
Artificial Lift and Downhole	87.8		46.5		57.6
Total Orders	$	204.4	$	160.3	$	178.9

1822

Results of operations

Three months ended March 31, ~~2023~~2024 compared with three months ended March 31, ~~2022~~2023


		Three Months Ended March 31,						Change
	Three Months Ended March 31,																			Three Months Ended March 31,									Change
(in thousands of dollars, except per share information)	(in thousands of dollars, except per share information)	2023			2022			$		%		(in thousands of dollars, except per share information)	2024					2023						$						%
Revenue	Revenue
Drilling & Downhole		$	76,794		$	71,260		$	5,534	7.8	%
Completions		73,667			52,542			21,125		40.2	%
Production		38,995			31,505			7,490		23.8	%
Drilling and Completions
Drilling and Completions
Drilling and Completions													$	119,071				$	126,764					$	(7,693)					(6.1)		%
Artificial Lift and Downhole												Artificial Lift and Downhole	83,342					62,207						21,135						34.0		%
Eliminations	Eliminations	(499)			(133)			(366)		*		Eliminations	(21)			(14)			(14)				(7)			(7)		*						*
Total revenue	Total revenue	188,957			155,174			33,783		21.8	%	Total revenue	202,392			188,957			188,957				13,435			13,435		7.1					7.1		%
Segment operating income (loss)
Drilling & Downhole		8,438			5,986			2,452		41.0	%
Segment operating income
Drilling and Completions
Drilling and Completions
Drilling and Completions													4,559					4,990						(431)						(8.6)		%
Operating margin %	Operating margin %	11.0		%	8.4		%
Completions		3,556			(715)			4,271		*
Operating margin %		4.8		%	(1.4)		%
Production		1,629			(1,752)			3,381		193.0	%
Artificial Lift and Downhole
Artificial Lift and Downhole
Artificial Lift and Downhole													11,786					8,633						3,153						36.5		%
Operating margin %	Operating margin %	4.2		%	(5.6)		%
Corporate	Corporate	(7,032)			(9,205)			2,173		23.6	%
Total segment operating income (loss)		6,591			(5,686)			12,277		215.9	%
Corporate
Corporate													(7,252)					(7,032)						(220)						(3.1)		%
Total segment operating income												Total segment operating income	9,093					6,591						2,502						38.0		%
Operating margin %	Operating margin %	3.5		%	(3.7)		%
Loss (gain) on disposal of assets and other		(260)			22			(282)		*
Operating income (loss)		6,851			(5,708)			12,559		220.0	%
Transaction expenses
Transaction expenses
Transaction expenses													5,921					—						5,921						*
Gain on disposal of assets and other												Gain on disposal of assets and other	(28)					(260)						232						*
Operating income												Operating income	3,200					6,851						(3,651)						(53.3)		%
Interest expense	Interest expense	4,549			7,624			(3,075)		(40.3)	%	Interest expense	8,760			4,549			4,549				4,211			4,211		92.6					92.6		%
Foreign exchange losses (gains) and other, net		2,972			(5,986)			8,958		*
Foreign exchange losses and other, net												Foreign exchange losses and other, net	1,227					2,972						(1,745)						*

Total other expense
Total other expense
Total other expense	Total other expense	7,521			1,638			5,883		359.2	%	9,987			7,521		7,521				2,466			2,466			32.8				32.8		%
Loss before income taxes	Loss before income taxes	(670)			(7,346)			6,676		90.9	%	Loss before income taxes	(6,787)			(670)			(670)				(6,117)			(6,117)		(913.0)					(913.0)		%
Income tax expense	Income tax expense	2,816			1,853			963		52.0	%	Income tax expense	3,528			2,816			2,816				712			712		25.3					25.3		%
Net loss	Net loss	$	(3,486)		$	(9,199)		$	5,713	62.1	%	Net loss	$	(10,315)		$		$	(3,486)			$		$	(6,829)		(195.9)				(195.9)		%

Weighted average shares outstanding	Weighted average shares outstanding
Weighted average shares outstanding
Weighted average shares outstanding
Basic
Basic
Basic	Basic	10,179			5,683
Diluted	Diluted	10,179			5,683
Diluted
Diluted
Loss per share
Loss per share
Loss per share	Loss per share
Basic	Basic	$	(0.34)		$	(1.62)
Basic
Basic
Diluted
Diluted
Diluted	Diluted	$	(0.34)		$	(1.62)
* not meaningful	* not meaningful
* not meaningful
* not meaningful

1923

Revenue

Our revenue for the three months ended March 31, ~~2023~~2024 was ~~$189.0~~$202.4 million, an increase of ~~$33.8~~$13.4 million, or ~~21.8%~~7.1%, compared to the three months ended March 31, ~~2022.~~2023. For the three months ended March 31, ~~2023,~~2024, our Drilling ~~& Downhole,~~and Completions and ~~Production~~Artificial Lift and Downhole segments comprised ~~40.6%, 38.8%,~~58.8% and ~~20.6%~~41.2% of our total revenue, respectively, which compared to ~~45.9%, 33.8%,~~67.1% and ~~20.3%~~32.9% of our total revenue, respectively, for the three months ended March 31, ~~2022.~~2023. The overall increase in revenue is primarily related to ~~increases~~the revenue contributed from the acquired Variperm business, partially offset by the decline in ~~market activity~~overall global drilling and ~~global rig count~~completions activities in ~~the first quarter 2023~~2024 compared to ~~the first quarter 2022.~~2023. The changes in revenue by operating segment consisted of the following:

Drilling ~~& Downhole~~and Completions segment — Revenue was ~~$76.8~~$119.1 million for the three months ended March 31, ~~2023, an increase~~2024, a decrease of ~~$5.5~~$7.7 million, or ~~7.8%~~6.1%, compared to the three months ended March 31, ~~2022. This increase~~2023. Due to the decline in overall global drilling and completions activities, the decrease in revenue was led by ~~a $11.5~~an $8.8 million, or ~~39.5%~~18.5%, decrease in the Stimulation & Intervention product line, a $4.1 million,or 15.7%, decrease in the Coiled Tubing product line, and a $3.8 million, or 9.5%, decrease in the Drilling product line. The decrease was partially offset by an increase of $9.0 million, or 70.5%, in ~~revenue for~~ our ~~Drilling Technologies~~Subsea product line due to higher ~~sales volumes of both consumable products~~project revenue recognized from ROVs and capital equipment driven by increased market activity and global rig count. Revenue for our Downhole Technologies product line increased by $3.6 million, or 18.6%, primarily due to higher sales volumes of artificial lift products and casing equipment in the first quarter 2023 compared to the first quarter 2022. Revenue for our Subsea Technologies product line decreased by $9.7 million, or 43.0%, from lower volumes of ROVs partially offset by an increase in after-market part sales and service.cable management systems.

~~Completions~~Artificial Lift and Downhole segment — Revenue was ~~$73.7~~$83.3 million for the three months ended March 31, ~~2023,~~2024, an increase of $21.1 million, or ~~40.2%~~34.0%, compared to the three months ended March 31, 2022. This significant improvement includes a revenue increase of $17.2 million, or 56.9%, for our Stimulation & Intervention product line primarily due to higher demand of power ends, radiators and wireline cable.2023. Revenue for our ~~Coiled Tubing~~Downhole product line increased by ~~$4.0~~$29.0 million, or ~~17.7% in the first quarter 2023 compared to the first quarter 2022. These higher revenue levels were driven by increased hydraulic fracturing and well intervention service activity levels.~~

~~Production segment~~ — Revenue was $39.0 million for the three months ended March 31, 2023, an increase of $7.5 million, or 23.8%, compared to the three months ended March 31, 2022. The increase was driven by a $4.7 million, or 31.2%125.1%, primarily due to ~~increased demand for our processing~~revenue contributed from the acquired Variperm business and an increase in casing equipment ~~and technologies within our Production Equipment product line, and a $2.8~~sales. This increase was partially offset by an $6.5 million, or ~~16.9%, increase~~33.9% decrease, in sales of our valve products, and $1.4 million, or 7.1%, decrease in sales within our ~~Valve Solutions~~Production Equipment product line.

Segment operating income (loss) and segment operating margin percentage

Segment operating income for the three months ended March 31, ~~2023~~2024 was ~~$6.6~~$9.1 million, a ~~$12.3~~$2.5 million ~~improvement~~increase compared to ~~a loss of $5.7~~$6.6 million for the three months ended March 31, ~~2022.~~2023. For the three months ended March 31, ~~2023,~~2024, segment operating margin percentage was ~~3.5%~~4.5% compared to ~~(3.7)%~~3.5% for the three months ended March 31, ~~2022.~~2023. Segment operating margin percentage is calculated by dividing segment operating income ~~(loss)~~ by revenue for the period. The change in operating income ~~(loss)~~ for each segment is explained as follows:

Drilling &and Completions segment — Segment operating income was $4.6 million, or 3.8%, for the three months ended March 31, 2024 compared to $5.0 million, or 3.9%, for the three months ended March 31, 2023. The $0.4 million decrease in segment operating results is primarily attributable to lower demand for capital equipment that was nearly offset by higher project revenue in Subsea product line.

Artificial Lift and Downhole segment — Segment operating income was ~~$8.4~~$11.8 million, or ~~11.0%~~14.1%, for the three months ended March 31, ~~2023~~2024 compared to ~~operating income of $6.0~~$8.6 million, or ~~8.4%~~13.9%, for the three months ended March 31, ~~2022.~~2023. The ~~$2.5~~$3.2 million ~~improvement in segment operating results is primarily attributable to higher gross profit from the 7.8%~~ increase ~~in segment revenues, favorable product mix and improved operating leverage. These gains were partially offset by higher freight and employee related costs.~~

~~Completions segment~~ — Segment operating income was $3.6 million, or 4.8%, for the three months ended March 31, 2023 compared to segment operating loss of $0.7 million, or (1.4)%, for the three months ended March 31, 2022. The $4.3 million improvement in segment operating results was primarily ~~due to higher gross profit from~~driven by the ~~40.2%~~acquisition of Variperm and an increase in ~~revenues discussed above and~~project revenue recognized from ~~favorable product mix. These gains were~~process oil treatment equipment, partially offset by ~~higher steel, freight and employee related costs.~~

~~Production segment~~ ~~— Segment operating income was $1.6 million, or 4.2%, for~~ the ~~three months ended March 31, 2023 compared to a loss~~decline in sales of $1.8 million, or (5.6)%, for the three months ended March 31, 2022. The $3.4 million improvement in segment operating results was driven by the 23.8% increase in revenues discussed above as well as lower depreciation and freight costs.our valve products.

Corporate — Selling, general and administrative expenses for Corporate were $7.3 million for the three months ended March 31, 2024 compared to $7.0 million for the three months ended March 31, ~~2023 compared to $9.2 million for the three months ended March 31, 2022.~~2023. Corporate costs include, among other items, payroll related costs for management, administration, finance, legal, and human resources personnel; professional fees for legal, accounting and related services; and marketing costs. This decline was primarily due to a $2.7 million charge recognized in the three months ended March 31, 2022 related to a modification of long-term incentive awards associated with the executive leadership transition.

Other items not included in segment operating income (loss)

~~Gain~~Transaction expenses, gain (loss) on the disposal of assets and other isare not included in segment operating income, ~~(loss),~~ but isare included in total operating ~~loss.~~income.

Other income and expense

Other income and expense includes interest expense and foreign exchange gains (losses) and other. We incurred ~~$4.5~~$8.8 million of interest expense during the three months ended March 31, ~~2023, a decrease~~2024, an increase of ~~$3.1~~$4.2 million compared to the three months ended March 31, ~~2022, mainly~~2023, due to the ~~decline~~increased borrowings under our revolving Credit Facility and borrowings under the Seller Term Loan entered into in connection with the ~~balance of 2025 Notes upon conversion of $122.8 million aggregate principal amount of our 2025 Notes to common stock in January 2023.~~Variperm Acquisition. See Note 67 Debt for further details related to the ~~our 2025 Notes~~Credit Facility and ~~Credit Facility.~~Seller Term Loan.

The foreign exchange gains (losses) are primarily the result of movements in the British pound, Euro and Canadian dollar relative to the U.S. dollar. These movements in exchange rates create foreign exchange gains or losses when applied to monetary assets or liabilities denominated in currencies other than the location’s functional currency, primarily U.S. dollar denominated cash, trade account receivables and net intercompany receivable balances for our entities using a functional currency other than the U.S. dollar.

Taxes

We recorded tax expense of ~~$2.8~~$3.5 million and ~~tax expense of $1.9~~$2.8 million for the three months ended March 31, ~~2023~~2024 and ~~2022,~~2023, respectively. The estimated annual effective tax rates for the three months ended March 31, ~~2023~~2024 and ~~2022~~2023 were impacted by losses in jurisdictions where the recording of a tax benefit is not available. Furthermore, the tax expense or benefit recorded can vary from period to period depending on the Company’s relative mix of earnings and losses by jurisdiction.

Liquidity and capital resources

Sources and uses of liquidity

Our internal sources of liquidity are cash on hand and cash flows from operations, while our primary external sources include trade credit, the Credit Facility, the 2025 Notes and the ~~2025 Notes.~~Seller Term Loan. Our primary uses of capital have been for inventory, sales on credit to our customers, maintenance and growth capital expenditures, debt repayments and ~~debt repayments.~~the acquisition of Variperm. We continually monitor other potential capital sources, including equity and debt financing, to meet our investment and target liquidity requirements. Our future success and growth will be highly dependent on our ability to generate positive operating cash flow and access outside sources of capital.

As of March 31, ~~2023,~~2024, we had $134.2 million principal amount of 2025 Notes outstanding, ~~and $25.0~~$96.5 million of borrowings ~~outstanding~~ under our revolving Credit ~~Facility.~~Facility and $59.7 million principal amount of the Seller Term Loan outstanding. The 2025 Notes mature in August 2025 and, subject to certain exceptions, the Credit Facility matures in September 2028 and the Seller Term Loan matures in December 2026. See Note 67 Debt for further details related to the terms for our ~~2025 Notes and Credit Facility.~~debt arrangements.

As of March 31, ~~2023,~~2024, we had cash and cash equivalents of ~~$46.8~~$48.5 million and ~~$129.3~~$71.6 million of availability under the Credit Facility. We anticipate that our future working capital requirements for our operations will fluctuate directionally with revenues. Furthermore, availability under the Credit Facility will fluctuate directionally based on the level of our eligible accounts receivable and inventory subject to applicable sublimits. In addition, we ~~continue to~~ expect total ~~2023~~2024 capital expenditures to be ~~less than $15.0~~approximately $10.0 million, ~~consisting~~primarily for replacement of ~~among other items, replacing~~ end of life machinery and equipment.

We expect our available cash on-hand, cash generated by operations, and estimated availability under the Credit Facility to be adequate to fund current operations during the next 12 months. In addition, based on existing market conditions and our expected liquidity needs, among other factors, we may use a portion of our cash flows from operations, proceeds from divestitures, securities offerings or other eligible capital to reduce ~~the principal amount of our 2025 Notes~~ outstanding debt or repurchase shares of our common stock under our repurchase program.

In November 2021, our board of directors approved a program for the repurchase of outstanding shares of our common stock with an aggregate purchase amount of up to $10.0 million. Shares may be repurchased under the program from time to time, in amounts and at prices that the company deems appropriate, subject to market and business conditions, applicable legal requirements and other considerations. During the ~~first quarter 2023,~~three months ended March 31, 2024, we ~~repurchased approximately 139 thousand~~did not repurchase shares of our common stock ~~for aggregate consideration of approximately $3.5 million with~~and the remaining authorization under this program ofis $2.4 million.

In January 2024, we completed the Variperm Acquisition for consideration of approximately $150.0 million of cash (subject to customary purchase price adjustments) and 2.0 million shares of our common stock. We may pursue additional acquisitions in the future, which may be funded with cash and/or equity.

Our cash flows for the three months ended March 31, ~~2023~~2024 and ~~2022~~2023 are presented below (in millions):

Three Months Ended March 31,
2023 2022
Net cash used in operating activities $ (23.1) $ (24.9)
Net cash used in investing activities (0.8) (0.7)
Net cash provided by (used in) financing activities 19.3 (0.6)
Effect of exchange rate changes on cash 0.3 (0.1)
Net decrease in cash, cash equivalents and restricted cash $ (4.3) $ (26.3)


	Three Months Ended March 31,
	2024		2023
Net cash provided by (used in) operating activities	$	5.0	$	(23.1)
Net cash used in investing activities	(152.8)		(0.8)
Net cash provided by financing activities	151.8		19.3
Effect of exchange rate changes on cash	(1.7)		0.3
Net increase (decrease) in cash, cash equivalents and restricted cash	$	2.3	$	(4.3)

Net cash ~~used in~~provided by (used in) operating activities

Net cash ~~used in~~provided by operating activities was $5.0 million for the three months ended March 31, 2024 compared to net cash used inoperating activities of $23.1 million for the three months ended March 31, ~~2023 compared~~2023. This improvement in operating cash flow usage is primarily attributable to ~~$24.9~~an increase in cash provided from working capital, mainly accounts receivable and inventories. It was offset by an increase in cash used for accounts payable and accrued liabilities of $24.1 million for the three months ended March 31, ~~2022. This increase in operating cash flows is primarily attributable to the improvement in net income adjusted for non-cash items, which provided $8.7 million of cash for the three months endedMarch 31, 2023~~2024 compared to ~~provided $4.8~~$5.5 million for the three months ended March 31, ~~2022.~~2023.

Net cash used in investing activities

Net cash used in investing activities was $152.8 million for the three months ended March 31, 2024, mainly related to Variperm Acquisition of $150.1 million and $2.9 million of capital expenditures, partially offset by $0.2 million of proceeds from the sale of property and equipment. Net cash used in investing activities was $0.8 million for the three months ended March 31, 2023, including $1.1 million of capital expenditures, partially offset by $0.3 million of proceeds from the sale of property and equipment. Net cash used in investing activities was $0.7 million for the three months ended March 31, 2022, including $0.9 million of capital expenditures, partially offset by $0.1 million of proceeds from the sale of property and equipment.

Net cash provided by ~~(used in)~~ financing activities

Net cash provided by financing activities was ~~$19.4~~$151.8 million for the three months ended March 31, ~~2023~~2024 compared to ~~$0.6~~$19.4 million of cash ~~used in~~provided by financing activities for the three months ended March 31, ~~2022,~~2023, respectively. The change in net cash provided by ~~(used in)~~ financing activities primarily resulted from $96.5 million in borrowings from the revolving Credit Facility and net $59.7 million from the Seller Term Loan during the three months ended March 31, 2024 compared to a net $25.0 million of ~~net~~ borrowings on the revolving Credit Facility ~~offset by $5.4 million of repurchases of common stock under our share repurchase program and long-term incentive awards~~ during the three months ended March 31, 2023.

Supplemental Guarantor Financial Information

The Company’s 2025 Notes are guaranteed by our domestic subsidiaries which are 100% owned, directly or indirectly, by the Company. The guarantees are full and unconditional, joint and several.

The guarantees of the 2025 Notes are (i) pari passu in right of payment with all existing and future senior indebtedness of such guarantor, including all obligations under our Credit ~~Facility;~~Facility and the Seller Term Loan; (ii) secured by certain collateral of such guarantor, subject to permitted liens under the indenture governing the 2025 Notes; (iii) effectively senior to all unsecured indebtedness of that guarantor, to the extent of the value of the collateral securing the 2025 Notes (after giving effect to the liens securing our Credit Facility and any other senior liens on the collateral); and (iv) senior in right of payment to any future subordinated indebtedness of that guarantor.

In the event of a bankruptcy, liquidation or reorganization of any of the non-guarantor subsidiaries of the 2025 Notes, the non-guarantor subsidiaries of such notes will pay the holders of their debt and their trade creditors before they will be able to distribute any of their assets to the Company or to any guarantors.

The 2025 Notes guarantees shall each be released upon (i) any sale or other disposition of all or substantially all of the assets of such guarantor (by merger, consolidation or otherwise) to a person that is not (either before or after giving effect to such transaction) the Company or a subsidiary, if the sale or other disposition does not violate the applicable provisions of the indenture governing such notes; (ii) any sale, exchange or transfer (by merger, consolidation or otherwise) of the equity interests of such guarantor after which the applicable guarantor is no longer a subsidiary, which sale, exchange or transfer does not violate the applicable provisions of the indenture governing such notes; (iii) legal or covenant defeasance or satisfaction and discharge of the indenture governing such notes; or (iv) dissolution of such guarantor, provided no default or event of default has occurred that is continuing.

The obligations of each guarantor of the 2025 Notes under its guarantee will be limited to the maximum amount as will, after giving effect to all other contingent and fixed liabilities of such guarantor (including, without limitation, any

guarantees under the Credit Facility) and any collections from or payments made by or on behalf of any other guarantor in respect of the obligations of such other guarantor under its guarantee or pursuant to its contribution obligations under the applicable indenture, result in the obligations of such guarantor under its guarantee not constituting a fraudulent conveyance, fraudulent preference or fraudulent transfer or otherwise reviewable transaction under applicable law. Nonetheless, in the event of the bankruptcy, insolvency or financial difficulty of a guarantor, such guarantor’s obligations under its guarantee may be subject to review and avoidance under applicable fraudulent conveyance, fraudulent preference, fraudulent transfer and insolvency laws.

We are presenting the following summarized financial information for the Company and the subsidiary guarantors ~~(collectively referred to as the “Obligated Group”)~~ pursuant to Rule 13-01 of Regulation S-X, Guarantors and Issuers of Guaranteed Securities Registered or Being Registered. For purposes of the following summarized financial information, transactions between the Company and the subsidiary guarantors, presented on a combined basis, have been eliminated and information for the non-guarantor subsidiaries have been excluded. Amounts due to the non-guarantor subsidiaries and other related parties, as applicable, have been separately presented within the summarized financial information below.

Summarized financial information for the year-to-date interim period and the most recent annual period was as follows (in thousands):


			Three Months Ended March 31,
			Three Months Ended
			Three Months Ended
			Three Months Ended
		March 31,								March 31,
Summarized Statements of Operations	Summarized Statements of Operations			2023		2022		Summarized Statements of Operations	2024		2023
Revenue	Revenue			$	151,263	$	116,360
Cost of sales	Cost of sales			116,471		90,525
Operating income (loss)				2,667		(2,643)
Operating income
Net loss	Net loss			(3,486)		(9,199)

March 31, 2023

December 31, 2022

March 31, 2024

December 31, 2023

Summarized Balance Sheet

Current assets

397,664

378,812

Non-current assets

271,288

279,389

Current liabilities

160,534

175,155

Current liabilities

Payables to non-guarantor subsidiaries

145,730

132,839

Non-current liabilities

204,644

293,150

Critical accounting policies and estimates

There have been no material changes in our critical accounting policies and procedures during the three months ended March 31, ~~2023.~~2024. For a detailed discussion of our critical accounting policies and estimates, refer to our ~~2022~~2023 Annual Report on Form 10-K. For recent accounting pronouncements, refer to Note 2 Recent Accounting Pronouncements.

Item 3. Quantitative and qualitative disclosures about market risk

Not required under Regulation S-K for “smaller reporting companies.”

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures as defined under Rules 13a-15(e) and 15d-15(e) of the Exchange Act. Our disclosure controls and procedures have been designed to provide reasonable assurance that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC's rules and forms. Our disclosure controls and procedures include controls and procedures designed to provide reasonable assurance that information required to be disclosed in reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Our management, under the supervision and with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures pursuant to Exchange Act Rule 13a-15(b) as of March 31, ~~2023.~~2024. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of March 31, ~~2023.~~2024.

Changes in Internal Control over Financial Reporting

~~There~~In January 2024, we completed the acquisition of Variperm. We are currently integrating Variperm into our internal controls over financial reporting. Except for the inclusion of Variperm, there have been no changes in our internal control over financial reporting during the quarter ended March 31, ~~2023~~2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II — OTHER INFORMATION

Item 1. Legal Proceedings

Information related to Item 1. Legal Proceedings is included in Note 1011 Commitments and Contingencies, which is incorporated herein by reference.

Item 1A. Risk Factors

For additional information about our risk factors, see “Risk Factors” in Item 1A of our ~~2022~~2023 Annual Report on Form 10-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

~~The following table is a summary of our repurchases of our common stock during the three months ended March 31, 2023.~~

Period Total number of shares purchased (a) Average price paid per share Total number of shares purchased as part of publicly announced plan or programs (a) Maximum value of shares that may yet be purchased under the plan or program (in thousands) (a)
January 1, 2023 - January 31, 2023 — $ — — $ 5,941
February 1, 2023 - February 28, 2023 — $ — — 5,941
March 1, 2023 - March 31, 2023 138,638 $ 25.22 138,638 2,444
Total 138,638 $ 25.22 138,638

~~(a)~~ In November 2021, our board of directors approved a program for the repurchase of outstanding shares of our common stock with an aggregate purchase amount of up to $10.0 million. Shares may be repurchased under the program from time to time, in amounts and at prices that the Company deems appropriate, subject to market and business conditions, applicable legal requirements and other considerations. The program may be executed using open market purchases pursuant to Rule 10b-18 under the Exchange Act, in privately negotiated agreements, or by way of issuer tender offers, Rule 10b5-1 plans or other transactions. From the inception of the program through March 31, ~~2023,~~2024, we have repurchased approximately 298 thousand shares of our common stock for aggregate consideration of approximately $7.6 million. Remaining authorization under this program is $2.4 million.

No shares were purchased during the three months ended March 31, 2024.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

~~None~~Rule 10b5-1 Trading Plan

During the quarter ended March 31, 2024, no director or Section 16 officer adopted or terminated any Rule 10b5-1 trading arrangements or non-Rule 10b5-1 trading arrangements.

2529

Item 6. Exhibits


Exhibit
Number		DESCRIPTION

4.1*	—	First Supplemental Indenture, dated as of January 4, 2024, by and among Forum, the subsidiary guarantors party thereto and U.S. Bank Trust Company, National Association (as successor to U.S. Bank National Association), as trustee (incorporated by reference to Exhibit 4.1 to Forum’s Current Report on Form 8-K filed on January 8, 2024).

10.1**#	—	Form of ~~2023~~2024 Performance Restricted Stock Unit ~~Agreement.~~Agreement - Executive.

10.2**#	—	Form of ~~2023~~2024 Restricted Stock Unit ~~Agreement.~~Agreement - Executive.

10.3**#	—	Form of 2024 Performance Restricted Stock Unit Agreement (with Cash Settlement Option) - Executive.

10.4**#	—	Form of 2024 Restricted Stock Unit Agreement (with Cash Settlement Option) - Executive.

10.5**#	—	Form of 2024 Restricted Stock Unit Agreement - Non Executive Director .

10.6**#	—	Form of 2024 Restricted Stock Award Agreement - Non Executive Dir ector .

10.7**#	—	Form of 2024 Cash Award Agreement - Executive .

10.8*	—	Second Lien Seller Term Loan Credit Agreement, dated as of January 4, 2024, by and among Forum, the lenders party thereto, and Variperm Energy Services Partnership (“VES Partnership”), as administrative and collateral agent for each of the lenders (incorporated by reference to Exhibit 10.1 to Forum’s Current Report on Form 8-K filed on January 8, 2024).

10.9*	—	Amendment No. 1 to Second Lien Seller Term Loan Credit Agreement, dated as of April 10, 2024, by and among Forum, the lenders party thereto, and VES Partnership, as administrative and collateral agent for each of the lenders.

10.10*	—	Investor Rights Agreement, dated as of January 4, 2024, by and among Forum, the Sellers and James Nurcombe (incorporated by reference to Exhibit 10.2 to Forum’s Current Report on Form 8-K filed on January 8, 2024).

22.1*	—	Subsidiary guarantors of the Company's Convertible Secured Notes due 2025.

31.1**	—	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2**	—	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1**	—	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2**	—	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS**	—	Inline XBRL Instance ~~Document~~Document.

101.SCH**	—	Inline XBRL Taxonomy Extension Schema Document.

101.CAL**	—	Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.LAB**	—	Inline XBRL Taxonomy Extension Label Linkbase Document.

101.PRE**	—	Inline XBRL Taxonomy Extension Presentation Linkbase Document.

101.DEF**	—	Inline XBRL Taxonomy Extension Definition Linkbase Document.

104**	—	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

*Previously filed.

**Filed herewith.

#Identifies management contracts and compensatory plans or arrangements.

2630

SIGNATURES

As required by Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has authorized this report to be signed on its behalf by the undersigned authorized individuals.

FORUM ENERGY TECHNOLOGIES, INC.

Date:

May ~~5, 2023~~3, 2024

By:

/s/ D. Lyle Williams, Jr.

D. Lyle Williams, Jr.

Executive Vice President and Chief Financial Officer

(As Duly Authorized Officer and Principal Financial Officer)

By:

/s/ Katherine C. Keller

Katherine C. Keller

Senior Vice President and ~~Principal~~Chief Accounting Officer

(As Duly Authorized Officer and Principal Accounting Officer)

2731


Period	Total number of shares purchased (a)	Average price paid per share		Total number of shares purchased as part of publicly announced plan or programs (a)	Maximum value of shares that may yet be purchased under the plan or program (in thousands) (a)
January 1, 2023 - January 31, 2023	—	$	—	—	$	5,941
February 1, 2023 - February 28, 2023	—	$	—	—	5,941
March 1, 2023 - March 31, 2023	138,638	$	25.22	138,638	2,444
Total	138,638	$	25.22	138,638