What changed in this filing

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Item 1. Financial Statements

2024-11-01 compared with 2024-08-02 · 126 added, 104 removed, 441 unchanged (34% of the section changed)

2 unchanged sentences

and Subsidiaries

Condensed Consolidated Statements of Comprehensive Income (Loss)

Three Months Ended June 30, Six Months Ended June 30,

Condensed Consolidated Statements of Comprehensive Loss

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

(in thousands, except per share information) 2024 2023 2024 2023

5 unchanged sentences

Transaction expenses 579 — 7,728 —

Loss on disposal of assets and other 220 542 192 282

Loss (gain) on disposal of assets and other ( 85 ) ( 145 ) 107 137

Total operating expenses 56,820 45,351 172,518 135,501

Operating income 8,916 5,671 20,050 18,929

Other expense

Other expense (income)

Interest expense 7,650 4,504 25,069 13,742

Foreign exchange losses and other, net 3,006 6,436 4,233 9,408

Foreign exchange losses (gains) and other, net 9,631 ( 8,279 ) 13,864 1,129

Loss on extinguishment of debt 1,839 — 2,302 —

Total other expense 12,128 11,125 22,115 18,646

Loss before income taxes ( 4,194 ) ( 4,718 ) ( 10,981 ) ( 5,388 )

Total other expense (income), net 19,120 ( 3,775 ) 41,235 14,871

Income (loss) before income taxes ( 10,204 ) 9,446 ( 21,185 ) 4,058

Income tax expense 4,611 1,477 10,641 6,154

Net loss $ ( 6,696 ) $ ( 6,579 ) $ ( 17,011 ) $ ( 10,065 )

Net income (loss) $ ( 14,815 ) $ 7,969 $ ( 31,826 ) $ ( 2,096 )

Weighted average shares outstanding

1 unchanged sentence

Diluted 12,330 10,393 12,287 10,208

Loss per share

Earnings (loss) per share

Basic $ ( 1.20 ) $ 0.78 $ ( 2.59 ) $ ( 0.21 )

1 unchanged sentence

Other comprehensive income (loss), net of tax of $ 0 :

Net loss $ ( 6,696 ) $ ( 6,579 ) $ ( 17,011 ) $ ( 10,065 )

Net income (loss) $ ( 14,815 ) $ 7,969 $ ( 31,826 ) $ ( 2,096 )

Change in foreign currency translation 14,254 ( 10,710 ) 14,071 1,197

Gain (loss) on pension liability 25 ( 36 ) 5 ( 15 )

Comprehensive income (loss) $ ( 6,080 ) $ 1,176 $ ( 17,214 ) $ 1,863

Comprehensive loss $ ( 536 ) $ ( 2,777 ) $ ( 17,750 ) $ ( 914 )

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

2 unchanged sentences

Condensed Consolidated Balance Sheets

(in thousands, except share information) June 30, 2024 December 31, 2023

(in thousands, except share information) September 30, 2024 December 31, 2023

Current assets

41 unchanged sentences

Condensed Consolidated Statements of Cash Flows

Six Months Ended June 30,

Nine Months Ended September 30,

(in thousands) 2024 2023

27 unchanged sentences

Proceeds from issuance of Seller Term Loan 59,677 —

Payment of Seller Term Loan ( 1,250 ) —

Payment of capital lease obligations ( 887 ) ( 910 )

2 unchanged sentences

Payment of withheld taxes on stock-based compensation plans ( 1,090 ) ( 2,499 )

Net cash provided by financing activities 114,908 4,123

Net cash provided by (used in) financing activities 89,427 ( 6,906 )

Effect of exchange rate changes on cash ( 47 ) 261

13 unchanged sentences

Condensed Consolidated Statements of Changes in Stockholders’ Equity

Six Months Ended June 30, 2024

Nine Months Ended September 30, 2024

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

16 unchanged sentences

Balance at June 30, 2024 $ 130 $ 1,415,838 $ ( 142,057 ) $ ( 716,482 ) $ ( 115,439 ) $ 441,990

Stock-based compensation expense — 2,076 — — — 2,076

Currency translation adjustment — — — — 14,254 14,254

Change in pension liability — — — — 25 25

Net loss — — — ( 14,815 ) — ( 14,815 )

Balance at September 30, 2024 $ 130 $ 1,417,914 $ ( 142,057 ) $ ( 731,297 ) $ ( 101,160 ) $ 443,530

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

2 unchanged sentences

Condensed Consolidated Statements of Changes in Stockholders’ Equity

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2023

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

16 unchanged sentences

Balance at June 30, 2023 $ 109 $ 1,367,441 $ ( 142,057 ) $ ( 690,660 ) $ ( 115,557 ) $ 419,276

Stock-based compensation expense — 1,247 — — — 1,247

Restricted stock issuance, net of forfeitures — ( 626 ) — — — ( 626 )

Currency translation adjustment — — — — ( 10,710 ) ( 10,710 )

Change in pension liability — — — — ( 36 ) ( 36 )

Net income — — — 7,969 — 7,969

Balance at September 30, 2023 $ 109 $ 1,368,062 $ ( 142,057 ) $ ( 682,691 ) $ ( 126,303 ) $ 417,120

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

10 unchanged sentences

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 and six months ended June 30, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024 or any other interim period.

Operating results for the three and nine months ended September 30, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 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.

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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 six months ended June 30, 2024 (in thousands):

June 30, 2024 December 31, 2023 Decrease

The following table reflects the changes in our contract assets and contract liabilities balances for the nine months ended September 30, 2024 (in thousands):

September 30, 2024 December 31, 2023 Increase / (Decrease)

Accrued revenue $ 1,250 $ 1,801

6 unchanged sentences

Contract liabilities $ 13,895 $ 14,772 $ ( 877 ) ( 6 ) %

During the six months ended June 30, 2024, our contract assets decreased by $ 2.2 million and our contract liabilities decreased nominally primarily due to the timing of milestone billings for projects in our Subsea product line.

During the nine months ended September 30, 2024, our contract assets increased by $ 0.7 million and our contract liabilities decreased $ 0.9 million primarily due to the timing of milestone billings for projects in our Subsea product line.

The noncurrent portion of contract assets is recorded on the consolidated balance sheets as other long-term assets.

During the six months ended June 30, 2024, we recognized $ 7.1 million of revenue that was included in the contract liabilities balance at the beginning of the period.

During the nine months ended September 30, 2024, we recognized $ 8.7 million of revenue that was included in the contract 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 such obligation is part of a contract that has an original expected duration of one year or less .

Forum Energy Technologies, Inc.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Continued)

On January 4, 2024, the Company and its wholly owned subsidiary acquired all of the issued and outstanding common shares of Variperm in the Variperm Acquisition.

3 unchanged sentences

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 and six months ended June 30, 2024, the Company recognized acquisition-related costs of $ 1.2 million and $ 7.1 million, respectively, for consulting fees and other costs expensed as transaction expenses.

During the quarter, the Company finalized the purchase price allocation resulting in an adjustment to goodwill of $ 2.8 million.

Adjustments primarily related to deferred income taxes.

During the three and nine months ended September 30, 2024, the Company recognized acquisition-related costs of $ 0.6 million and $ 7.7 million, respectively, 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.

Forum Energy Technologies, Inc.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Continued)

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.

The allocation of consideration transferred is based on management's estimates, judgments and assumptions.

Management estimated that consideration paid exceeded the fair value of the net assets acquired.

Therefore, goodwill of $ 66.8 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;

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 Company has 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):

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Acquired goodwill and intangibles relate to our Downhole reporting unit and Downhole asset group.

Forum Energy Technologies, Inc.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Continued)

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.

3 unchanged sentences

Unaudited Pro Forma Financial Information

The contributed revenues and net income to the Company of the acquired Variperm business, for the period from January 4, 2024 to June 30, 2024 were as follows (in thousands):

Three Months Ended June 30, 2024 Six Months Ended June 30, 2024

The contributed revenues and net income to the Company of the acquired Variperm business, for the period from January 4, 2024 to September 30, 2024 were as follows (in thousands):

Three Months Ended September 30, 2024 Nine Months Ended September 30, 2024

Revenue $ 27,378 $ 81,649

Net income (loss) 6,071 15,572

Forum Energy Technologies, Inc.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Continued)

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 (in thousands):

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

2024 2023 2024 2023

3 unchanged sentences

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.

The Company's significant components of inventory at June 30, 2024 and December 31, 2023 were as follows (in thousands):

June 30, 2024 December 31, 2023

The Company's significant components of inventory at September 30, 2024 and December 31, 2023 were as follows (in thousands):

September 30, 2024 December 31, 2023

Raw materials and parts $ 109,038 $ 92,563

4 unchanged sentences

Inventories, net $ 286,939 $ 299,639

Forum Energy Technologies, Inc.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Continued)

Goodwill and Intangible Assets

The changes in the carrying amount of goodwill from December 31, 2023 to June 30, 2024, were as follows (in thousands):

The changes in the carrying amount of goodwill from December 31, 2023 to September 30, 2024, were as follows (in thousands):

Artificial Lift and Downhole

3 unchanged sentences

local currency translation ( 1,159 )

Goodwill, June 30, 2024 $ 62,689

Goodwill, September 30, 2024 $ 65,619

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.

Forum Energy Technologies, Inc.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Continued)

Intangible Assets

Intangible assets consisted of the following as of June 30, 2024 and December 31, 2023, respectively (in thousands):

June 30, 2024

Intangible assets consisted of the following as of September 30, 2024 and December 31, 2023, respectively (in thousands):

September 30, 2024

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

13 unchanged sentences

Total intangible assets $ 405,115 $ ( 237,145 ) $ 167,970

Debt as of June 30, 2024 and December 31, 2023 consisted of the following (in thousands):

June 30, 2024 December 31, 2023

Forum Energy Technologies, Inc.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Continued)

Debt as of September 30, 2024 and December 31, 2023 consisted of the following (in thousands):

September 30, 2024 December 31, 2023

2025 Notes $ 61,212 $ 134,208

8 unchanged sentences

Long-term debt, net of current portion $ 162,154 $ 129,567

Forum Energy Technologies, Inc.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Continued)

Our 9.00 % convertible secured notes due August 2025 (“2025 Notes”), of which $ 121.2 million principal amount was outstanding at June 30, 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.

Our 9.00 % convertible secured notes due August 2025 (“2025 Notes”), of which $ 61.2 million principal amount was outstanding at September 30, 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.

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.

During the six months ended June 30, 2024, we repurchased an aggregate $ 13.0 million of principal amount of our 2025 Notes for $ 13.0 million.

In June 2024, we repurchased $ 13.0 million in aggregate principal amount of our 2025 Notes for $ 13.0 million.

The net carrying value of the extinguished debt, including unamortized debt discount and debt issuance costs, was $ 12.5 million, resulting in a $ 0.5 million loss on extinguishment of debt.

Subsequent to June 30, 2024, we issued a notice of redemption for $ 60.0 million aggregate principal amount of our 2025 Notes with a redemption date of August 16, 2024.

In August 2024, we redeemed $ 60.0 million in aggregate principal amount of our 2025 Notes for $ 60.0 million.

The net carrying value of the extinguished debt, including amortized debt discount and debt issuance costs, was $ 58.2 million, resulting in a $ 1.8 million loss on extinguishment of debt.

Seller Term Loan

8 unchanged sentences

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.

Forum Energy Technologies, Inc.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Continued)

Credit Facility

Our Credit Facility matures on the earliest of (a) September 8, 2028, (b) the date that is 91 days prior to the maturity of 2025 Senior Notes (which will not apply if the 2025 Senior Notes are repaid prior to such 91st day) and (c) the date that is 91 days prior to the maturity of the Seller Term Loan if the outstanding aggregate principal amount thereunder is equal to or greater than $ 30.0 million.

Our Credit Facility matures on the earliest of (a) September 8, 2028, (b) the date that is 91 days prior to the maturity of 2025 Notes (which will not apply if the 2025 Notes are repaid prior to such 91st day) and (c) the date that is 91 days prior to the maturity of the Seller Term Loan if the outstanding aggregate principal amount thereunder is equal to or greater than $ 30.0 million.

Th e Credit Facility provides revolving credit commitments of $ 250.0 million (with a sublimit of up to $ 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.

4 unchanged sentences

Our borrowing capacity under the Credit Facility could be reduced or eliminated, depending on future fluctuations in our receivables and inventory.

As of June 30, 2024, our total borrowing base was $ 193.4 million, of which $ 72.8 million amount was drawn and $ 17.5 million was used as security for outstanding letters of credit, resulting in remaining availability of $ 103.1 million.

As of September 30, 2024, our total borrowing base was $ 184.8 million, of which $ 109.0 million amount was drawn and $ 17.0 million was used as security for outstanding letters of credit, resulting in remaining availability of $ 58.8 million.

Borrowings under the U.S.

Forum Energy Technologies, Inc.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Continued)

margin of 1.25 % to 1.75 %, in each case based upon the Company's quarterly total net leverage ratio.

Line bear interest at a rate equal to, at our option, either (a) the 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.

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 term SOFR plus 1.00 % per annum, and (iii) the “prime rate” of interest announced by Wells Fargo Bank, National Association, subject to a floor of 0.00 %.

Borrowings under the Canadian Line bear interest at a rate equal to, at our Canadian borrowers’ option, either (a) Canadian Overnight Repo Rate Average (“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 base rate is determined by reference to the greater of (i) the Floor, (ii) the one-month CORRA, and (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 8.45 % and 8.00 % for the six months ended June 30, 2024 and 2023, respectively.

The Canadian Line base rate is determined by reference to the greater of (i) the one-month CORRA plus 1.00 % per annum 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 weighted average interest rate under the Credit Facility was approximately 8.37 % and 8.28 % for the nine months ended September 30, 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 %.

8 unchanged sentences

failure to perform or otherwise comply with covenants in the Credit Facility or other loan documents, subject, in certain instances, to grace periods;

cross-defaults to certain other indebtedness if such default occurs at the final maturity of such indebtedness or if the effect of such default is to cause, or permit the holders of such indebtedness to cause, the acceleration of such indebtedness;

cross-defaults to certain other indebtedness if such

Forum Energy Technologies, Inc.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Continued)

default occurs at the final maturity of such indebtedness or if the effect of such default is to cause, or permit the holders of such indebtedness to cause, the acceleration of such indebtedness;

bankruptcy or insolvency events;

2 unchanged sentences

and the occurrence of a Change of Control (as defined in the Credit Facility).

In October 2024, we entered into an amendment (the “Credit Agreement Amendment”) to our Credit Facility.

Pursuant to the Credit Agreement Amendment, the Credit Agreement will, upon satisfaction of conditions precedent specified therein, be modified to (i) permit the issuance of the 2029 Bonds (as defined below), (ii) permit, subject to specified conditions and up to specified amounts, redemption of the 2029 Bonds in certain circumstances and (iii) specify the extent to which collateral will be granted to secure Credit Agreement obligations by subsidiaries of Forum organized or domiciled under the laws of the United Kingdom, Germany or any territory or county thereof.

10.5 % Senior Secured Bonds due 2029

On October 24, 2024, we priced an issuance (the “Offering”) of $ 100.0 million aggregate principal amount of 10.5 % senior secured bonds due 2029 (the “2029 Bonds”).

We expect to use the net proceeds from the Offering, together with cash on hand, to redeem in full all outstanding 2025 Notes and to repay all borrowings outstanding under the Seller Term Loan.

The Offering is expected to close on November 7, 2024, subject to customary closing conditions.

Other debt consists of various finance leases of equipment.

1 unchanged sentence

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.

The Company had $ 17.5 million and $ 20.3 million in total outstanding letters of credit as of June 30, 2024 and December 31, 2023, respectively.

The Company had $ 17.0 million and $ 20.3 million in total outstanding letters of credit as of September 30, 2024 and December 31, 2023, 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 six months ended June 30, 2024, the Company recorded a tax expense of $ 2.5 million and $ 6.0 million, respectively.

For the three and six months ended June 30, 2023, the Company recorded a tax expense of $ 1.9 million and $ 4.7 million, respectively.

The estimated

Forum Energy Technologies, Inc.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Continued)

annual effective tax rates for all periods were impacted by losses in jurisdictions where the recording of a tax benefit is not available.

For the three and nine months ended September 30, 2024, the Company recorded a tax expense of $ 4.6 million and $ 10.6 million, respectively.

For the three and nine months ended September 30, 2023, the Company recorded a tax expense of $ 1.5 million and $ 6.2 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.

10 unchanged sentences

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 June 30, 2024, we do not anticipate being able to fully utilize all of the losses prior to their expiration in the following jurisdictions:

As of September 30, 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 June 30, 2024.

As a result, we have certain valuation allowances against our deferred tax assets as of September 30, 2024.

Forum Energy Technologies, Inc.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Continued)

Fair Value Measurements

The Company had $ 72.8 million and $ 59.7 million borrowings outstanding under the Credit Facility and Seller Term Loan as of June 30, 2024.

The Company had $ 109.0 million and $ 58.4 million borrowings outstanding under the Credit Facility and Seller Term Loan as of September 30, 2024.

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

2 unchanged sentences

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 June 30, 2024, the fair value and the carrying value of our 2025 Notes approximated $ 121.0 million and $ 117.2 million, respectively.

At September 30, 2024, the fair value and the carrying value of our 2025 Notes approximated $ 60.4 million and $ 59.8 million, respectively.

At December 31, 2023, the fair value and the carrying value of our 2025 Notes approximated $ 130.9 million and $ 127.9 million, respectively.

There were no other significant outstanding financial instruments as of June 30, 2024 and December 31, 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 six months ended June 30, 2024.

There were no other significant outstanding financial instruments as of September 30, 2024 and December 31, 2023 that required measuring the amounts at fair value on a recurring basis.

Business Segments

5 unchanged sentences

The Artificial Lift and Downhole segment designs, manufactures and supplies products and solutions for the artificial lift, production and infrastructure markets.

Forum Energy Technologies, Inc.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Continued)

The Company’s reportable segments are strategic units that offer distinct products and services.

5 unchanged sentences

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

Forum Energy Technologies, Inc.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Continued)

Summary financial data by segment follows (in thousands):

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

2024 2023 2024 2023

9 unchanged sentences

Transaction expenses 579 — 7,728 —

Loss on disposal of assets and other 220 542 192 282

Loss (gain) on disposal of assets and other ( 85 ) ( 145 ) 107 137

Operating income $ 8,916 $ 5,671 $ 20,050 $ 18,929

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

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Drilling and Completions $ 573,395 $ 615,033

7 unchanged sentences

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

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

2024 2023 2024 2023

9 unchanged sentences

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

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

2024 2023 2024 2023

9 unchanged sentences

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 June 30, 2024 and December 31, 2023, respectively, are immaterial.

The reserves accrued at September 30, 2024 and December 31, 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.

5 unchanged sentences

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 Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

2024 2023 2024 2023

Net loss $ ( 6,696 ) $ ( 6,579 ) $ ( 17,011 ) $ ( 10,065 )

Net income (loss) $ ( 14,815 ) $ 7,969 $ ( 31,826 ) $ ( 2,096 )

Weighted average shares outstanding - basic 12,330 10,235 12,287 10,208

1 unchanged sentence

Weighted average shares outstanding - diluted 12,330 10,393 12,287 10,208

Loss per share

Earnings (loss) per share

Basic $ ( 1.20 ) $ 0.78 $ ( 2.59 ) $ ( 0.21 )

Diluted $ ( 1.20 ) $ 0.77 $ ( 2.59 ) $ ( 0.21 )

For the three and six months ended June 30, 2024 and 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.

For the three and nine months ended September 30, 2024 and the nine months ended September 30, 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.

For the three months ended September 30, 2023, the calculation of diluted earnings per share excluded approximately 46 thousand shares that were anti-dilutive.

Diluted earnings per share was calculated using treasury stock method for the restricted shares and stock options.

1 unchanged sentence

Stock-based compensation

During the six months ended June 30, 2024, the Company granted 86,391 performance restricted stock units (assuming target performance) to employees that vest based upon the Company's total shareholder return compared to the total shareholder return of a group of peer companies over three different performance periods.

During the nine months ended September 30, 2024, the Company granted 86,391 performance restricted stock units (assuming target performance) to employees that vest based upon the Company's total shareholder return compared to the total shareholder return of a group of peer companies over three different performance periods.

The performance periods run from January 1, 2024 through December 31, 2024, January 1, 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, during the six months ended June 30, 2024, the Company granted 20,000 time-based restricted stock units to employees that vest after 1 year, and granted 49,180 shares to non-employee members of the Board of Directors that vest after 1 year.

Also, during the nine months ended September 30, 2024, the Company granted 20,000 time-based restricted stock units to employees that vest after 1 year, and granted 49,180 shares to non-employee members of the Board of Directors that vest after 1 year.

Reclassification of liability-classified awards

During the six months ended June 30, 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 six months ended June 30, 2024, the Company granted 168,797 time-based restricted stock units to employees that vest ratably over three years .

These performance and time-based restricted stock units were originally classified as cash-settled liability awards.

On May 10, 2024, shareholders approved an additional 800,000 shares to be added to the Company's Second Amended and Restated 2016 Stock and Incentive Plan and the fair value of the awards was remeasured as of the same date.

In connection with their remeasurement, the Company determined that the awards would be settled in shares instead of cash and they were classified as equity.

During the nine months ended September 30, 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 nine months ended September 30, 2024, the Company granted 168,797 time-based restricted stock units to employees that vest ratably over three years .

Forum Energy Technologies, Inc.

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements (Continued)

These performance and time-based restricted stock units were originally classified as cash-settled liability awards.

In connection with their remeasurement, the Company determined that the awards would be settled in shares instead of cash and they were classified as equity.

Related Party Transactions

1 unchanged sentence

The dollar amounts of these related party activities are not significant to the Company’s unaudited condensed consolidated financial statements.

Subsequent Events

On October 24, 2024, we priced an issuance of $ 100.0 million aggregate principal amount of 10.5 % senior secured bonds due 2029.

Refer to Note 7 Debt for additional information on the Offering.

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