What changed in this filing

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Item 1. Business

2024-03-05 compared with 2023-02-28 · 41 added, 41 removed, 197 unchanged (29% of the section changed)

Forum Energy Technologies, Inc., a Delaware corporation (the “Company,” “FET,” “Forum,” “we,” “our” or “us”), is a global company serving the oil, natural gas, industrial and renewable energy industries.

Forum Energy Technologies, Inc., a Delaware corporation (the “Company,” “FET,” “we,” “our” or “us”), is a global manufacturing company serving the oil, natural gas, industrial and renewable energy industries.

Our common shares are listed on the New York Stock Exchange (“NYSE”) under the symbol “FET.” Our principal executive offices are located at 10344 Sam Houston Park Drive, Houston, Texas 77064, our telephone number is (713) 351-7900, and our website is www.f-e-t.com.

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Information contained on or accessible from our website is not incorporated by reference into this Annual Report on Form 10-K and should not be considered part of this report or any other filing that we make with the SEC.

We are a global company serving the oil, natural gas, industrial and renewable energy industries.

FET provides value added solutions aimed at improving the safety, efficiency, and environmental impact of our customers' operations.

We are an environmentally and socially responsible company headquartered in Houston, Texas with manufacturing, distribution and service facilities strategically located throughout the world.

Our products include highly engineered capital equipment as well as consumable products.

These consumable products are used in drilling, well construction and completions activities and at processing centers and refineries.

Our engineered capital products are directed at drilling rig equipment for constructing new 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.

We are a global manufacturing company serving the oil, natural gas, industrial and renewable energy industries.

With headquarters in Houston, Texas, FET provides value added solutions aimed at improving the safety, efficiency, and environmental impact of our 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 completion activities and at processing centers and refineries.

Our capital products are directed at drilling rig equipment for constructing new 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.

In 2023, over 60% 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 design, manufacture and supply high quality reliable products that create value for our diverse customer base, which includes, among others, oil and natural gas operators, land and offshore drilling contractors, oilfield service companies, subsea construction and service companies, and pipeline and refinery operators.

In addition, we offer some of our products to renewable energy and new energy companies.

We expect that the world's long-term energy demand will continue to rise.

We also expect hydrocarbons will continue to play a vital role in meeting the world's long-term energy needs while renewable energy sources continue to develop.

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 also continuing to develop products to help oil and natural gas operators lower their emissions while also deploying our existing product technologies in renewable energy applications and seeking to develop innovative equipment.

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.

Our reporting segments align with business activity drivers and the manner in which management reviews and evaluates operating performance.

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We believe that the reporting segment structure is aligned with the key phases of the well cycle and provides operating efficiencies.

We incorporate by reference the segment and geographic information for the last two years set forth in Note 17 Business Segments , and the information with respect to an acquisition set forth in Note 4 Acquisition .

We incorporate by reference the segment and geographic information for the last two years set forth in Note 17 Business Segments , and the information with respect to our acquisition (the “Variperm Acquisition”) of Variperm Holdings Ltd.

(“Variperm”) set forth in Note 4 Acquisition .

DRILLING AND DOWNHOLE SEGMENT

Our Drilling & Downhole segment designs, manufactures and supplies products and provides related services to the drilling, well construction, artificial lift and subsea energy construction markets, including applications in oil and natural gas, renewable energy, defense, and communications.

The products and related services consist primarily of (i) capital equipment and a broad line of expendable products consumed in the drilling process;

(ii) well construction casing and cementing equipment and protection products for artificial lift equipment and cables;

and (iii) subsea remotely operated vehicles and trenchers, submarine rescue vehicles, specialty components and tooling, and complementary subsea technical services.

Our Drilling & Downhole segment designs, manufactures and supplies products and solutions to the drilling, artificial lift and subsea markets, including applications in oil and natural gas, renewable energy, defense and communications.

The products and solutions consist primarily of (i) capital equipment and consumable products used in the drilling process;

(ii) products designed to safeguard artificial lift equipment and cables, and well construction casing and cementing equipment;

and (iii) subsea remotely operated vehicles (“ROVs”) and trenchers, submarine rescue vehicles, specialty components and tooling, and technical services.

There are several factors that drive demand for our Drilling & Downhole segment.

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Our Downhole Technologies product line is impacted by the level of well completion activity and complexity of well construction and completion.

Our Subsea Technologies product line is affected by global offshore activity, defense spending, subsea equipment and pipeline installation, repair and maintenance expenditures, and growth in offshore windfarm development.

Our Subsea Technologies

product line is affected by global offshore activity, defense spending, subsea equipment and pipeline installation, repair and maintenance expenditures, and growth in offshore windfarm development.

Drilling Technologies.

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We design and manufacture capital equipment and specialty components used in the subsea sector and provide a broad suite of complementary technical services.

We have a core focus on the design

and manufacture of remotely operated vehicle (“ROV”) systems, other specialty subsea vehicles, and rescue submarines, as well as critical components of these vehicles.

We have a core focus on the design and manufacture of ROV systems, other specialty subsea vehicles, and rescue submarines, as well as critical components of these vehicles.

Many of our related technical services complement our vehicle offerings.

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We are a leading designer and manufacturer of a wide range of ROVs that we supply to the offshore subsea construction, observation and related service markets.

The market for ROVs can be segmented into three broad classes of vehicles based on size and category of operations:

The market for ROVs can be segmented

into three broad classes of vehicles based on size and category of operations:

(1) large work-class vehicles and trenchers for construction and installation activities, (2) drilling-class vehicles deployed from and for use around an offshore rig and (3) observation-class vehicles for inspection and light manipulation.

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COMPLETIONS SEGMENT

Our Completions 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) capital and consumable products sold to the pressure pumping, hydraulic fracturing and flowback services markets, including hydraulic fracturing pumps, cooling systems, high-pressure flexible hoses and flow iron as well as wireline cable and pressure control equipment used in the well completion and intervention service markets;

Our Completions segment designs, manufactures and supplies products and solutions to the coiled tubing, well stimulation and intervention markets.

The products and solutions consist primarily of:

(i) capital and consumable products sold to the pressure pumping market, including hydraulic fracturing pumps, cooling systems, high-pressure flexible hoses and flow iron, as well as wireline cable and pressure control equipment used in the well completion and intervention service markets;

and (ii) coiled tubing strings and coiled line pipe and related services.

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We perform these services and position inventory in strategic locations in North America.

We also manufacture pressure control products that are used for well intervention operations that are sold domestically and internationally to oilfield service companies and equipment rental companies.

We also manufacture pressure control products that are used for well intervention operations and sold domestically and internationally to oilfield service companies and equipment rental companies.

Products we supply include blowout preventers for coiled tubing and wireline units and our Hydraulic Latch Assembly, which is used to facilitate efficient zipper fracturing operations.

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Our primary customers in the Stimulation and Intervention product line are pressure pumping, wireline and flowback service companies.

In addition, we sell directly to pressure pumping unit original equipment manufacturers.

In addition, we sell directly to pressure pumping original equipment manufacturers.

Coiled Tubing .

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Coiled tubing strings are consumable components utilized to perform well completion and intervention activities.

Our coiled line pipe offering serves as an alternative to conventional line pipe and composite flexibles in onshore and offshore applications.

In addition, our coiled line pipe offering can be utilized for carbon capture projects to transport carbon for injection into underground storage.

Our coiled line pipe offering serves as an alternative to

conventional line pipe and flexible composite alternatives in onshore and offshore applications.

In addition, our coiled line pipe offering can be utilized to transport carbon for injection into underground storage.

The product line’s primary customers are domestic and international service companies that provide coiled tubing services and oil and gas operators.

PRODUCTION SEGMENT

Our Production segment designs, manufactures and supplies products and provides related equipment and services for production and infrastructure markets.

The products and related services consist primarily of:

Our Production segment designs, manufactures and supplies products and solutions for the production and infrastructure markets.

The products and solutions consist primarily of:

(i) engineered process systems, production equipment, as well as specialty separation equipment;

and (ii) 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.

and (ii) a wide range of industrial valves focused on oil and natural gas as well as power generation, renewable energy and other general industrial applications.

The segment’s primary market driver is the level of spending associated with new producing wells as well as spending on midstream and downstream projects.

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Business history

Forum was incorporated in 2005 and formed through a series of acquisitions.

FET was incorporated in 2005 and formed through a series of acquisitions.

In August 2010, Forum Oilfield Technologies, Inc.

was renamed Forum Energy Technologies, Inc., when four other companies were merged into Forum.

was renamed Forum Energy Technologies, Inc., when four other companies were merged into FET.

On April 17, 2012, we completed our initial public offering.

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In addition, given the geographic proximity of a number of our facilities to the Gulf Coast, we are subject to business interruptions caused by hurricanes and tropical storms.

Furthermore, a small portion of the revenue we generate from select Canadian operations often benefits from higher first quarter activity levels, as operators take advantage of the winter freeze to gain access to remote drilling and production areas.

Furthermore, a portion of the revenue we generate from Canadian operations often benefits from higher first quarter activity levels, as operators take advantage of the winter freeze to gain access to remote drilling and production areas;

however, these Canadian operations are also subject to decreased activity levels in the second quarter due to the winter thaw.

The markets in which we operate are highly competitive.

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Timely receipt of raw materials is critical to our business.

In 2021, we were negatively impacted by various transportation and other supply chain constraints, which caused manufacturing delays for some of our products.

During 2022, supply chain constraints eased;

however, raw material prices for many of our product lines were negatively impacted by inflationary pressures.

In the future, while we anticipate inflationary pressures will improve, and supply chain constraints will continue to ease, the timing of any reduction in inflation is unknown, and it is unclear whether we will be able to continue purchasing raw materials on a timely basis or at acceptable prices.

In 2022, raw material prices for many of our product lines were negatively impacted by inflationary pressures.

During 2023, inflationary pressures began to improve, but the timing of any further reduction in inflation is unknown, and it is unclear whether we will be able to continue purchasing raw materials on a timely basis or at acceptable prices in the future.

We generally try to purchase raw materials from multiple suppliers so that we are not dependent on any one supplier, but this is not always possible.

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The trend in environmental regulation has been to impose increasingly stringent restrictions and limitations on activities that may impact the environment, and thus, any changes in environmental laws and regulations or in enforcement policies that result in more stringent and costly waste handling, storage, transport, disposal, or remediation requirements could have a material adverse effect on our operations and financial position.

accidental releases or spills of regulated substances may occur in the course of our operations, and if so, we may incur significant costs and liabilities as a result of such releases or spills, including any third-party claims for damage to property, natural resources or persons.

Moreover, accidental releases or spills of regulated substances may occur in the course of our operations, and if so, we may incur significant costs and liabilities as a result of such releases or spills, including any third-party claims for damage to property, natural resources or persons.

The following is a summary of the more significant existing environmental, health and safety laws and regulations to which our business operations are subject and for which compliance may have a material adverse impact on our capital expenditures, results of operations or financial position.

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Department of Energy, are analyzing, or have been requested to review, a variety of environmental issues associated with shale development, including hydraulic fracturing.

Moreover, various political groups and officials are requesting or have discussed implementing a ban on hydraulic fracturing, or oil & gas extraction generally, on federal lands.

For more information, please read “Risk Factors-Potential legislation or regulations restricting the use of hydraulic fracturing could reduce demand for our products.”

Moreover, various political groups and officials are requesting or have discussed implementing a ban on hydraulic fracturing, or oil and gas extraction generally, on federal lands.

For more information, please see “Risk Factors-Potential legislation or regulations restricting the use of hydraulic fracturing could reduce demand for our products.”

Operating risk and insurance

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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-K

Item 1. Business