What changed in this filing

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Item 1. Financial Statements

2022-05-06 compared with 2021-11-05 · 66 added, 168 removed, 333 unchanged (41% of the section changed)

3 unchanged sentences

Condensed Consolidated Statements of Comprehensive Loss

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

(in thousands, except per share information) 2022 2021

4 unchanged sentences

Selling, general and administrative expenses 44,305 41,474

Impairments of intangible assets, property and equipment — 2,962 — 20,394

Loss (gain) on disposal of assets and other 22 ( 909 )

4 unchanged sentences

Foreign exchange and other losses (gains), net ( 5,986 ) 3,470

Loss (gain) on extinguishment of debt 196 ( 28,734 ) 5,290 ( 72,478 )

Deferred loan costs written off — 303 — 2,262

Total other expense (income), net 3,362 ( 16,513 ) 27,924 ( 49,530 )

Loss on extinguishment of debt — 933

Total other expense 1,638 13,565

Loss before income taxes ( 7,346 ) ( 27,945 )

Income tax expense (benefit) 849 1,017 3,756 ( 13,757 )

Income tax expense 1,853 1,718

Net loss ( 9,199 ) ( 29,663 )

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( 6,992 ) 3,152

Gain (loss) on pension liability 45 ( 55 ) 101 ( 56 )

Gain on pension liability 30 77

Comprehensive loss $ ( 16,161 ) $ ( 26,434 )

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Condensed Consolidated Balance Sheets

(in thousands, except share information) September 30, 2021 December 31, 2020

(in thousands, except share information) March 31, 2022 December 31, 2021

Current assets

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Additional paid-in capital 1,251,752 1,249,962

Treasury stock at cost, 410,922 and 410,877 shares

Treasury stock at cost, 467,153 shares

( 135,562 ) ( 135,562 )

7 unchanged sentences

Condensed Consolidated Statements of Cash Flows

Nine Months Ended September 30,

Three Months Ended March 31,

(in thousands) 2022 2021

1 unchanged sentence

Net loss $ ( 9,199 ) $ ( 29,663 )

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation expense 3,423 4,953

Amortization of intangible assets 6,218 6,357

Impairments of intangible assets, property and equipment — 20,394

Impairments of operating lease assets — 14,096

Inventory write down 194 1,410

Stock-based compensation expense 2,151 1,896

Loss (gain) on extinguishment of debt 5,290 ( 72,478 )

Deferred loan costs written off — 2,262

Loss on extinguishment of debt — 933

Deferred income taxes ( 266 ) 265

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Billings in excess of costs and estimated profits earned ( 3,758 ) 766

Net cash provided by (used in) operating activities $ ( 8,100 ) $ 1,701

Net cash used in operating activities $ ( 24,875 ) $ ( 1,338 )

Cash flows from investing activities

1 unchanged sentence

Proceeds from sale of property and equipment 118 1,499

Net working capital settlement from sale of business ( 1,283 ) 600

Net cash provided by investing activities $ 4,544 $ 2,019

Net cash provided by (used in) investing activities $ ( 742 ) $ 1,110

Cash flows from financing activities

1 unchanged sentence

Repayments on revolving Credit Facility ( 95,883 ) ( 13,126 )

Cash paid to repurchase 2025 Notes and 2021 Notes ( 58,596 ) ( 27,615 )

Bond exchange early participation payment — ( 3,500 )

Cash paid to repurchase 2025 Notes — ( 13,711 )

Payment of capital lease obligations ( 239 ) ( 482 )

Repurchases of stock ( 360 ) ( 139 )

Deferred financing costs ( 1,464 ) ( 9,358 )

Net cash used in financing activities $ ( 599 ) $ ( 27,458 )

10 unchanged sentences

Condensed Consolidated Statements of Changes in Stockholders’ Equity

Nine Months Ended September 30, 2021

Three Months Ended March 31, 2022

(in thousands) Common stock Additional paid-in capital Treasury stock Retained

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Balance at March 31, 2022 $ 62 $ 1,251,752 $ ( 135,562 ) $ ( 693,506 ) $ ( 107,990 ) $ 314,756

Stock-based compensation expense — 1,914 — — — 1,914

Restricted stock issuance, net of forfeitures — ( 2 ) — — — ( 2 )

Currency translation adjustment — — — — 66 66

Change in pension liability — — — — ( 21 ) ( 21 )

Net loss — — — ( 21,806 ) — ( 21,806 )

Balance at June 30, 2021 $ 60 $ 1,246,389 $ ( 134,499 ) $ ( 653,125 ) $ ( 97,115 ) $ 361,710

Stock-based compensation expense — 1,881 — — — 1,881

Restricted stock issuance, net of forfeitures 1 ( 209 ) — — — ( 208 )

Treasury stock — — ( 1 ) — — ( 1 )

Currency translation adjustment — — — — ( 5,822 ) ( 5,822 )

Change in pension liability — — — — 45 45

Net loss — — — ( 11,587 ) — ( 11,587 )

Balance at September 30, 2021 $ 61 $ 1,248,061 $ ( 134,500 ) $ ( 664,712 ) $ ( 102,892 ) $ 346,018

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

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Condensed Consolidated Statements of Changes in Stockholders’ Equity

Nine Months Ended September 30, 2020

Three Months Ended March 31, 2021

(in thousands) Common stock Additional paid-in capital Treasury stock Retained

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Restricted stock issuance, net of forfeitures — ( 139 ) — — — ( 139 )

Shares issued in employee stock purchase plan 2 344 — — — 346

Adjustment for adoption of ASU 2016-13

— — — ( 1,398 ) — ( 1,398 )

Treasury stock — — ( 6 ) — — ( 6 )

Currency translation adjustment — — — — 3,152 3,152

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Balance at March 31, 2021 $ 60 $ 1,244,477 $ ( 134,499 ) $ ( 631,319 ) $ ( 97,160 ) $ 381,559

Stock-based compensation expense — 2,537 — — — 2,537

Restricted stock issuance, net of forfeitures — ( 2 ) — — — ( 2 )

Currency translation adjustment — — — — 1,900 1,900

Change in pension liability — — — — ( 22 ) ( 22 )

Net loss — — — ( 5,494 ) — ( 5,494 )

Balance at June 30, 2020 $ 1,196 $ 1,237,574 $ ( 134,499 ) $ ( 547,405 ) $ ( 115,885 ) $ 440,981

Stock-based compensation expense — 1,966 — — — 1,966

Restricted stock issuance, net of forfeitures — ( 1 ) — — — ( 1 )

Currency translation adjustment — — — — 5,942 5,942

Change in pension liability — — — — ( 55 ) ( 55 )

Net loss — — — ( 21,551 ) — ( 21,551 )

Balance at September 30, 2020 $ 1,196 $ 1,239,539 $ ( 134,499 ) $ ( 568,956 ) $ ( 109,998 ) $ 427,282

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

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All intercompany transactions have been eliminated in consolidation.

Certain reclassifications have been made to prior year amounts to conform with the current year presentation.

In the opinion of management, 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 nine months ended September 30, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021 or any other interim period.

Operating results for the three months ended March 31, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022 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 (the “SEC”) regarding interim financial reporting.

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and world economies which led to significant reductions in demand for crude oil.

During the first nine months of 2021, distribution of vaccines resulted in reopening of certain economies and increasing demand for oil and natural gas.

During 2021, distribution of vaccines resulted in reopening of certain economies and increasing demand for oil and natural gas.

However, ongoing COVID-19 outbreaks and related work restrictions continue to contribute to disruptions in global supply chains which have led to inflationary pressures for certain goods and services.

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Accounting Standards Adopted in 2022

In December 2019, the FASB issued ASU No.

2019-12 Income Taxes (Topic 740) - Disclosure Framework - Simplifying the Accounting for Income Taxes, which simplified the accounting for income taxes by removing certain exceptions to the general principles of Topic 740 and clarifying and amending existing guidance.

We adopted this new standard as of January 1, 2021.

The adoption of this new standard did not have a material impact on our unaudited condensed consolidated financial statements.

Accounting Standards Issued But Not Yet Adopted

Convertible Debt.

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This update reduces the number of accounting models for convertible debt instruments resulting in fewer embedded conversion features being separately recognized from the host contract as compared with current GAAP.

Convertible instruments that continue to be subject to separation models are (1) those with embedded conversion features that are not clearly and closely related to the host contract, that meet the definition of a derivative, and that do not qualify for a scope exception from derivative accounting and (2) convertible debt instruments issued with substantial premiums for which the premiums are recorded as paid-in-capital.

In addition, this update also makes targeted changes to the disclosures for convertible instruments and earnings-per-share guidance.

This guidance may be adopted through either a modified retrospective or fully retrospective method

Forum Energy Technologies, Inc.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Continued)

of transition.

This guidance will be effective for us in the first quarter of 2022.

We are currently evaluating the impact of this new guidance.

However, we currently expect that the adoption of this guidance will not have a material impact on our consolidated financial statements.

We adopted this new standard as of January 1, 2022.

The adoption of this new standard did not have a material impact on our unaudited condensed consolidated financial statements.

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.

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

Forum Energy Technologies, Inc.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Continued)

Contract Balances

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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 nine months ended September 30, 2021 (in thousands):

September 30, 2021 December 31, 2020 Increase

The following table reflects the changes in our contract assets and contract liabilities balances for the three months ended March 31, 2022 (in thousands):

March 31, 2022 December 31, 2021 Increase / (Decrease)

Accrued revenue $ 1,240 $ 2,245

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Contract liabilities $ 13,755 $ 16,981 $ ( 3,226 ) ( 19 ) %

During the nine months ended September 30, 2021, our contract assets increased by $ 3.7 million due to increasing project activity for process oil treatment equipment in our Production Equipment product line and our contract liabilities increased by $ 4.0 million primarily due to higher customer advance payments for projects in our Subsea product line.

During the nine months ended September 30, 2021, we recognized $ 7.4 million of revenue that was included in the contract liability balance at the beginning of the period.

During the three months ended March 31, 2022, our contract assets increased by $ 5.7 million due to increasing project activity for process oil treatment equipment in our Production Equipment product line and our contract liabilities decreased by $ 3.2 million primarily due to lower customer advance payments for projects in our Subsea product line.

During the three months ended March 31, 2022, we recognized $ 10.8 million of revenue that was included in the contract liability balance at the beginning of the period.

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

2020 Disposition of ABZ and Quadrant Valves

On December 31, 2020, we sold certain assets of our ABZ and Quadrant valve brands for cash consideration of $ 104.6 million.

This transaction was accounted for as a disposition of a business.

We recognized a gain on disposition of $ 88.4 million based on the difference in cash received less $ 14.9 million of net book value of assets sold and $ 1.3 million of cash paid in the second quarter 2021 for the net working capital settlement related to this disposition.

Pro forma results of operations for this disposition have not been presented because the effects were not material to the consolidated financial statements.

2021 Acquisition of Hawker Equipment Solutions

On December 20, 2021, we acquired certain assets of Hawker Equipment Solutions, LLC (“Hawker”) for total cash consideration of $ 5.1 million, of which, $ 3.4 million was paid in the fourth quarter of 2021 with the balance expected to be paid over the next five years .

Hawker is a manufacturer of hydraulic pickup and laydown units.

This acquisition is included in the Drilling product line within the Drilling and Downhole segment.

The fair values of the assets acquired and liabilities assumed, as well as the pro forma results of operations for this acquisition, have not been presented because they are not material to the consolidated financial statements.

Forum Energy Technologies, Inc.

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Notes to Condensed Consolidated Financial Statements (Continued)

Our significant components of inventory at September 30, 2021 and December 31, 2020 were as follows (in thousands):

September 30, 2021 December 31, 2020

Our significant components of inventory at March 31, 2022 and December 31, 2021 were as follows (in thousands):

March 31, 2022 December 31, 2021

Raw materials and parts $ 103,917 $ 97,053

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Intangible Assets

Intangible assets consisted of the following as of September 30, 2021 and December 31, 2020, respectively (in thousands):

September 30, 2021

Intangible assets consisted of the following as of March 31, 2022 and December 31, 2021, respectively (in thousands):

March 31, 2022

Gross Carrying Amount Accumulated Amortization Net Intangibles Amortization Period (In Years)

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Notes to Condensed Consolidated Financial Statements (Continued)

Impairments of Long-Lived Assets

Long-lived assets with definite lives are tested for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable.

During the nine months ended September 30, 2021, there were no impairments of long-lived assets.

During the nine months ended September 30, 2020, the COVID-19 pandemic and associated preventative actions taken around the world to mitigate its spread caused oil demand to deteriorate and economic activity to decrease.

As a result, oil prices declined significantly during the period and created an extremely challenging market for all sub-sectors of the oil and natural gas industry.

In addition, responses to the spread of COVID-19, including significant government restrictions on movement, resulted in sharp declines in global economic activity.

As a result, during the nine months ended September 30, 2020, we determined that certain long-lived assets were impaired as their carrying values exceeded their fair values.

The amount of the impairment charges were measured as the difference between the carrying value and the estimated fair value of the assets.

The fair value was determined either through analysis of discounted future cash flows or, for certain real estate, based on a third party's sales price estimate (classified within level 3 of the fair value hierarchy).

Following is a summary of impairment charges recognized in our segments during the nine months ended September 30, 2020 (in thousands):

Impairments of:

Drilling & Downhole Completions Production Corporate Total Impairments

Property and equipment (1)

1,069 9,608 4,460 15,137

Intangible assets (2)

5,257 — — 5,257

Operating lease right of use assets (3)

4,544 6,140 1,914 1,498 14,096

Total impairments $ 10,870 $ 15,748 $ 6,374 $ 1,498 $ 34,490

(1) These charges are included in Impairments of intangible assets, property and equipment in the condensed consolidated statements of comprehensive loss.

(2) These charges are included in Impairments of intangible assets, property and equipment in the condensed consolidated statements of comprehensive loss and primarily include customer relationships, technology and distributor relationships.

(3) $ 10.4 million of these charges are included in Cost of sales and $ 3.7 million are included in Selling, general and administrative expenses in the condensed consolidated statements of comprehensive loss.

Notes payable and lines of credit as of September 30, 2021 and December 31, 2020 consisted of the following (in thousands):

September 30, 2021 December 31, 2020

Notes payable and lines of credit as of March 31, 2022 and December 31, 2021 consisted of the following (in thousands):

March 31, 2022 December 31, 2021

2025 Notes 256,970 256,970

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Long-term debt $ 233,742 $ 232,370

Forum Energy Technologies, Inc.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Continued)

In August 2020, we exchanged $ 315.5 million principal amount of our previous 6.25 % unsecured notes due 2021 (“2021 Notes”) for new 9.00 % convertible secured notes due August 2025 (the “2025 Notes”).

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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.

As of September 30, 2021, approximately $ 116.0 million principal amount of the 2025 Notes is mandatorily convertible into shares of our common stock at a conversion rate of 37.0370 shares per $ 1,000 principal amount of 2025 Notes converted, equivalent to a conversion price of $ 27.00 per share, subject, however, to the condition that the average of the daily trading prices for the common stock over the preceding 20 -trading day period is at least $ 30.00 per share.

As of March 31, 2022, approximately $ 116.0 million principal amount of the 2025 Notes is mandatorily convertible into shares of our common stock at a conversion rate of 37.0370 shares per $1,000 principal amount of 2025 Notes converted, equivalent to a conversion price of $ 27.00 per share, subject, however, to the condition that the average of the daily trading prices for the common stock over the preceding 20 -trading day period is at least $ 30.00 per share.

Holders of the 2025 Notes also have optional conversion rights in the event that the Company elects to redeem the 2025 Notes in cash and at the final maturity of the new notes.

Any interest that the Company elects to pay in additional notes is also subject to the mandatory and optional conversion rights.

During the nine months ended September 30, 2021, we repurchased an aggregate $ 59.9 million of principal amount of our 2025 Notes for $ 58.6 million.

During the three months ended March 31, 2021, we repurchased an aggregate $ 16.5 million of principal amount of our 2025 Notes for $ 15.6 million.

The net carrying value of the extinguished debt, including unamortized debt discount and debt issuance costs, was $ 14.7 million, resulting in a $ 0.9 million loss on extinguishment of debt.

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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.

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.

Such eligible accounts receivable and eligible inventory serve as priority collateral for the Credit

Forum Energy Technologies, Inc.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Continued)

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 $ 127.0 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 September 30, 2021, our total borrowing base was $ 146.0 million, of which no amounts were drawn and $ 15.2 million was used for security of outstanding letters of credit, resulting in remaining availability of $ 130.8 million.

As of March 31, 2022, our total borrowing base was $ 158.8 million, of which no amounts were drawn and $ 17.6 million was used for security of outstanding letters of credit, resulting in remaining availability of $ 141.2 million.

Borrowings under the U.S.

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Borrowings under the Canadian Line bear interest at a rate equal to, at Forum Canada’s option, either (a) the CDOR rate, 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 base rate is

Forum Energy Technologies, Inc.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Continued)

determined by reference to the greater of (i) the one-month CDOR rate plus 1.00 % and (ii) the prime rate for Canadian dollar commercial loans made in Canada as reported by Thomson Reuters, subject to a floor of 0.00 %.

The Canadian line base rate is determined by reference to the greater of (i) the one-month CDOR rate plus 1.00 % and (ii) the prime rate for Canadian dollar commercial loans made in Canada as reported by Thomson Reuters, subject to a floor of 0.00 %.

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

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We have incurred loan costs that have been deferred and are amortized to interest expense over the term of the 2025 Notes and the Credit Facility.

In the first quarter of 2020, we wrote-off $ 1.8 million of deferred loan costs for the termination of previous discussions related to a potential exchange offer for our 2021 Notes.

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.

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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.

We had $ 15.2 million and $ 15.6 million in total outstanding letters of credit as of September 30, 2021 and December 31, 2020, respectively.

We had $ 17.6 million and $ 18.7 million in total outstanding letters of credit as of March 31, 2022 and December 31, 2021, respectively.

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 and nine months ended September 30, 2021, we recorded a tax expense of $ 0.8 million and $ 3.8 million, respectively, compared to a tax expense of $ 1.0 million and a tax benefit of $ 13.8 million for the three and nine months ended September 30, 2020, respectively.

The estimated annual effective tax rates for the nine months ended September 30, 2021 and 2020 were impacted by losses in jurisdictions where the recording of a tax benefit is not available.

For the three months ended March 31, 2022 and March 31, 2021, we recorded tax expense of $ 1.9 million and $ 1.7 million, respectively.

The estimated annual effective tax rates for the three months ended March 31, 2022 and 2021 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.

The tax benefit for the nine months ended September 30, 2020 includes a $ 16.6 million benefit related to a carryback claim for U.S.

federal tax losses based on provisions in the U.S.

Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), which was signed into law on March 27, 2020.

The CARES Act provided relief to corporate taxpayers by permitting a five-year carryback of 2018-2020 net operating losses (“NOLs”), increased the 30% limitation on interest expense deductibility to 50% of adjusted taxable income for 2019 and 2020, and accelerated refunds for minimum tax credit carryforwards, among other provisions.

The tax effects of changes in tax laws are recognized in the period in which the law is enacted.

We have deferred tax assets related to net operating loss and other tax carryforwards in the U.S.

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In making such a determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning and recent operating results.

As of September 30, 2021, 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 September 30, 2021.

As of March 31, 2022, 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

Forum Energy Technologies, Inc.

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Notes to Condensed Consolidated Financial Statements (Continued)

Saudi Arabia.

As a result, we have certain valuation allowances against our deferred tax assets as of March 31, 2022.

Fair Value Measurements

The Company had zero and $ 13.1 million of borrowings outstanding under the Credit Facility as of September 30, 2021 and December 31, 2020, respectively.

The Company had no borrowings outstanding under the Credit Facility as of March 31, 2022 and December 31, 2021.

The Credit Facility incurs interest at a variable interest rate, and therefore, the carrying amount approximates fair value.

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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 September 30, 2021, the fair value and the carrying value of our 2025 Notes approximated $ 240.7 million and $ 230.7 million, respectively.

At March 31, 2022, the fair value and the carrying value of our 2025 Notes approximated $ 250.5 million and $ 233.4 million, respectively.

At December 31, 2021, the fair value and the carrying value of our 2025 Notes approximated $ 225.0 million and $ 232.0 million, respectively.

There were no other outstanding financial assets as of September 30, 2021 and December 31, 2020 that required measuring the amounts at fair value.

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 nine months ended September 30, 2021.

There were no other significant outstanding financial instruments as of March 31, 2022 and December 31, 2021 that required measuring the amounts at fair value on a recurring basis.

Business Segments

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Summary financial data by segment follows (in thousands):

Three Months Ended

September 30, Nine Months Ended September 30,

2021 2020 2021 2020

Three Months Ended March 31,

Drilling & Downhole 71,260 48,656

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Segment operating loss ( 5,686 ) ( 15,289 )

Impairments of intangible assets, property and equipment — 2,962 — 20,394

Loss (gain) on disposal of assets and other 22 ( 909 )

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

September 30, 2021 December 31, 2020

March 31, 2022 December 31, 2021

Drilling & Downhole $ 313,151 $ 313,493

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

Three Months Ended

September 30, Nine Months Ended September 30,

2021 2020 2021 2020

Three Months Ended March 31,

Drilling Technologies $ 29,235 $ 18,520

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

Three Months Ended

September 30, Nine Months Ended September 30,

2021 2020 2021 2020

Three Months Ended March 31,

United States $ 97,232 $ 68,314

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Management 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 September 30, 2021 and December 31, 2020, respectively, are immaterial.

The reserves accrued at March 31, 2022 and December 31, 2021, 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.

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For further disclosure regarding certain litigation matters, refer to Note 13 of the notes to the consolidated financial statements included in Item 8 of the Company’s 2021 Annual Report on Form 10-K filed with the SEC on March 4, 2022.

There have been no material changes related to these matters during the nine months ended September 30, 2021.

There have been no material changes related to these matters during the three months ended March 31, 2022.

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

September 30, Nine Months Ended September 30,

2021 2020 2021 2020

Three Months Ended March 31,

Net loss ( 9,199 ) ( 29,663 )

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Stock-based compensation

During the nine months ended September 30, 2021, the Company granted 73,839 restricted stock units to employees that vest ratably over three years and 3,093 restricted shares to a non-employee director that vest over one year .

The Company also granted 66,524 contingent restricted stock units to employees that vest ratably over three years dependent upon achieving a minimum stock price of $ 23.49 for 20 trading days during each performance period.

During the three months ended March 31, 2022, the Company granted 101,111 restricted stock units to employees that vest ratably over three years .

Liability-classified awards

During the nine months ended September 30, 2021, the Company granted 66,524 cash-settled phantom stock units to employees that vest ratably over three years .

These awards have a maximum payout that is calculated based on five times the stock price on the date of grant.

The Company also granted 73,839 cash-settled contingent phantom stock units to employees that vest ratably over three years dependent upon achieving a minimum stock price of $ 23.49 for 20 trading days during each performance period.

These awards also have a maximum payout that is calculated based on five times the stock price on the date of grant.

Reverse stock split

In order to bring the Company into compliance with the listing requirements of the New York Stock Exchange, our Board of Directors approved a 1-for-20 reverse stock split (the “Reverse Stock Split”) of the Company’s issued and outstanding shares of common stock, par value $ 0.01 per share, accompanied by a corresponding decrease in the Company’s authorized shares of common stock.

The Company's stockholders previously approved the Reverse Stock Split at the annual meeting of stockholders on May 12, 2020.

Forum Energy Technologies, Inc.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Continued)

The effective time of the Reverse Stock Split was after market close on November 9, 2020, with the common stock trading on a post-split basis under the Company’s existing trading symbol, “FET,” at the market open on November 10, 2020.

No fractional shares of common stock were issued as a result of the Reverse Stock Split.

Instead, any stockholder who would have been entitled to a fractional share received a cash payment in lieu of such fractional shares.

Following the completion of the Reverse Stock Split, the number of authorized shares of common stock was reduced from 296,000,000 to 14,800,000 .

Unless otherwise indicated, the number of shares of common stock outstanding and per-share amounts in these consolidated financial statements and accompanying notes have been retroactively adjusted to reflect the effect of the Reverse Stock Split.

The par value of our common stock remains at $ 0.01 per share.

During the three months ended March 31, 2022, the Company granted 101,111 cash-settled contingent restricted stock units to employees that vest ratably over three years dependent upon achieving a minimum stock price of $ 23.68 for 20 trading days during each performance period.

Related Party Transactions

2 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements