What changed in this filing

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Item 1. Financial Statements

2025-05-02 compared with 2024-11-01 · 139 added, 251 removed, 316 unchanged (55% of the section changed)

2 unchanged sentences

and Subsidiaries

Condensed Consolidated Statements of Comprehensive Loss

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

Condensed Consolidated Statements of Comprehensive Income (Loss)

Three Months Ended March 31,

(in thousands, except per share information) 2025 2024

11 unchanged sentences

Foreign exchange losses (gains) and other, net ( 1,068 ) 1,227

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

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

Total other expense 3,915 9,987

Income (loss) before income taxes 4,889 ( 6,787 )

11 unchanged sentences

Gain (loss) on pension liability 36 ( 15 )

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

Comprehensive income (loss) $ 1,642 $ ( 11,134 )

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) September 30, 2024 December 31, 2023

(in thousands, except share information) March 31, 2025 December 31, 2024

Current assets

10 unchanged sentences

Deferred financing costs, net 2,011 2,154

Intangible assets, net 242,330 167,970

Goodwill 61,703 61,653

Intangible assets, net 104,155 109,230

Deferred income taxes, net 11,851 11,445

27 unchanged sentences

Condensed Consolidated Statements of Cash Flows

Nine Months Ended September 30,

Three Months Ended March 31,

(in thousands) 2025 2024

Cash flows from operating activities

Net loss $ ( 31,826 ) $ ( 2,096 )

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

Net income (loss) $ 1,122 $ ( 10,315 )

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

Depreciation expense 3,689 4,072

2 unchanged sentences

Stock-based compensation expense 1,818 1,573

Loss on extinguishment of debt 2,302 —

Deferred income taxes ( 1,559 ) ( 1,002 )

7 unchanged sentences

Billings in excess of costs and profits recognized 1,157 291

Net cash provided by (used in) operating activities 53,675 ( 3,077 )

Net cash provided by operating activities 9,326 5,023

Cash flows from investing activities

6 unchanged sentences

Repayments on Credit Facility ( 148,585 ) ( 148,696 )

Cash paid to repurchase 2025 Notes ( 72,996 ) —

Proceeds from issuance of Seller Term Loan — 59,677

Payment of Seller Term Loan ( 1,250 ) —

Payment of capital lease obligations ( 455 ) ( 147 )

4 unchanged sentences

Effect of exchange rate changes on cash 265 ( 1,722 )

Net decrease in cash, cash equivalents and restricted cash ( 12,852 ) ( 13,878 )

Net increase (decrease) in cash, cash equivalents and restricted cash ( 13,518 ) 2,323

Cash, cash equivalents and restricted cash at beginning of period 44,661 46,165

Cash, cash equivalents and restricted cash at end of period $ 31,143 $ 48,488

Supplemental cash flow disclosures

Cash paid for interest $ 1,942 $ 1,764

Cash paid for income taxes 1,585 7,047

Noncash activities

1 unchanged sentence

Finance lease assets obtained in exchange for lease obligations 262 750

Stock issuance related to business acquisition 44,220 —

Liability awards converted to shares settled 337 —

Accrued purchases of property and equipment 814 —

Conversion of debt to common stock — 113,650

Stock issuance related to business acquisition — 44,220

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

2 unchanged sentences

Condensed Consolidated Statements of Changes in Stockholders’ Equity

Nine Months Ended September 30, 2024

Three Months Ended March 31, 2025

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

5 unchanged sentences

Restricted stock issuance, net of forfeitures 2 ( 1,323 ) — — — ( 1,321 )

Stock issuance related to business acquisition 20 44,200 — — — 44,220

Treasury stock — — ( 1,997 ) — — ( 1,997 )

Currency translation adjustment — — — — 484 484

Change in pension liability — — — — 36 36

Net loss — — — ( 10,315 ) — ( 10,315 )

Net income — — — 1,122 — 1,122

Balance at March 31, 2025 $ 132 $ 1,420,366 $ ( 144,054 ) $ ( 833,675 ) $ ( 122,727 ) $ 320,042

Stock-based compensation expense — 1,531 — — — 1,531

Liability awards converted to share settled — 337 — — — 337

Currency translation adjustment — — — — 621 621

Change in pension liability — — — — ( 5 ) ( 5 )

Net loss — — — ( 6,696 ) — ( 6,696 )

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

Nine Months Ended September 30, 2023

Three Months Ended March 31, 2024

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

5 unchanged sentences

Restricted stock issuance, net of forfeitures 1 ( 1,091 ) — — — ( 1,090 )

Conversion of debt to common stock 46 113,604 — — — 113,650

Treasury stock — — ( 3,497 ) — — ( 3,497 )

Stock issuance related to business acquisition 20 44,200 — — — 44,220

Currency translation adjustment — — — — ( 804 ) ( 804 )

2 unchanged sentences

Balance at March 31, 2024 $ 130 $ 1,413,970 $ ( 142,057 ) $ ( 709,786 ) $ ( 116,055 ) $ 446,202

Stock-based compensation expense — 1,257 — — — 1,257

Currency translation adjustment — — — — 7,749 7,749

Change in pension liability — — — — 6 6

Net loss — — — ( 6,579 ) — ( 6,579 )

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 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.

Operating results for the three months ended March 31, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025 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.

1 unchanged sentence

GAAP”) for complete consolidated financial statements and should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2024, which are included in the Company’s 2024 Annual Report on Form 10-K filed with the SEC on March 3, 2025.

Change of Segment

In the first quarter 2024, following the acquisition (the “Variperm Acquisition”) of Variperm Holdings Ltd.

("Variperm"), we aligned our reportable segments with business activity drivers and the manner in which management reviews and evaluates 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.

Recent Accounting Pronouncements

2 unchanged sentences

Accounting Standards Issued But Not Yet Adopted

Segment Reporting (Topic 280) .

In November 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 fiscal years beginning after December 15, 2023, and interim periods within fiscal years after December 15, 2024.

Early adoption is permitted.

The Company is in the process of evaluating the impact it may have on our consolidated financial statements.

Income Taxes (Topic 740).

3 unchanged sentences

This update should be applied prospectively but retrospective application is permitted.

The Company is in the process of evaluating the impact it may have on our consolidated financial statements.

The Company is currently evaluating the impact of this standard on its consolidated financial statements.

Disaggregation of Income Statement Expenses (Subtopic 220-40).

In November 2024, FASB issued ASU 2024-03 to improve financial reporting by requiring entities to disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods.

This update is effective for fiscal years beginning after December 15, 2026.

Early adoption is permitted, and this update may be applied either prospectively or retrospectively.

The Company is currently evaluating the impact of this standard on its 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.

For a detailed discussion of our revenue recognition policies, refer to the Company’s 2024 Annual Report on Form 10-K.

Disaggregated Revenue

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

Forum Energy Technologies, Inc.

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements (Continued)

Disaggregated Revenue

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

Contract Balances

3 unchanged sentences

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, 2024 (in thousands):

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

The following table reflects the changes in our contract assets and contract liabilities balances for the three months ended March 31, 2025 (in thousands):

March 31, 2025 December 31, 2024 Increase (Decrease)

Accrued revenue $ 311 $ 752

Costs and estimated profits in excess of billings 11,752 11,632

Contract assets - current 17,688 15,166

Contract assets - noncurrent — 1,828

Contract assets $ 12,063 $ 12,384 $ ( 321 ) ( 3 ) %

2 unchanged sentences

Contract liabilities $ 14,812 $ 13,100 $ 1,712 13 %

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 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.

During the three months ended March 31, 2025, our contract assets decreased by $ 0.3 million and our contract liabilities increased $ 1.7 million primarily due to the timing of milestone billings for projects in our Subsea product line.

During the three months ended March 31, 2025, we recognized $ 5.4 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.

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 included approximately $ 150.0 million of cash and 2.0 million shares of the Company’s common stock, 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 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.

The following table summarizes the fair value of identified assets acquired and liabilities assumed at the date of acquisition.

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 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):

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 32,379

Total liabilities assumed 44,139

Total identifiable net assets acquired 132,238

Goodwill 66,778

Total purchase consideration $ 199,016

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.

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.

The fair value of customer relationships and backlog were estimated using the multi-period excess earnings method.

The excess earning 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 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

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 Nine Months Ended

September 30, September 30,

2024 2023 2024 2023

Revenue $ 207,806 $ 208,939 $ 615,407 $ 651,558

Net income (loss) ( 14,427 ) 22,464 ( 27,516 ) 11,495

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.

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

The Company's significant components of inventory at March 31, 2025 and December 31, 2024 were as follows (in thousands):

March 31, 2025 December 31, 2024

Raw materials and parts $ 97,368 $ 99,185

8 unchanged sentences

Goodwill and Intangible Assets

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

The changes in the carrying amount of goodwill from December 31, 2024 to March 31, 2025, were as follows (in thousands):

Artificial Lift and Downhole

Goodwill, December 31, 2024 $ 61,653

Acquisitions 66,778

Impact on non-U.S.

local currency translation 50

Goodwill, September 30, 2024 $ 65,619

Goodwill, March 31, 2025 $ 61,703

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 September 30, 2024 and December 31, 2023, respectively (in thousands):

September 30, 2024

Intangible assets consisted of the following as of March 31, 2025 and December 31, 2024, respectively (in thousands):

March 31, 2025

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

1 unchanged sentence

Patents and technology 29,503 ( 18,509 ) 10,994 10 - 19

Trade names 46,841 ( 30,618 ) 16,223 7 - 19

Trademarks 5,089 ( 2,375 ) 2,714 15

Non-compete agreements 191 ( 191 ) — 5

Trade names and other 29,086 ( 22,920 ) 6,166 8 - 19

Total intangible assets $ 272,639 $ ( 168,484 ) $ 104,155

3 unchanged sentences

Patents and technology 29,166 ( 17,867 ) 11,299 10 - 19

Trade names 42,847 ( 28,974 ) 13,873 7 - 19

Trademarks 5,089 ( 2,120 ) 2,969 15

Non-compete agreements 190 ( 190 ) — 5

Trade names and other 28,913 ( 22,567 ) 6,346 8 - 19

Total intangible assets $ 271,069 $ ( 161,839 ) $ 109,230

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

Forum Energy Technologies, Inc.

1 unchanged sentence

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

Seller Term Loan 58,427 —

Debt as of March 31, 2025 and December 31, 2024 consisted of the following (in thousands):

March 31, 2025 December 31, 2024

2029 Bonds $ 100,000 $ 100,000

Credit Facility 73,844 90,392

1 unchanged sentence

Long-term debt, principal amount 177,271 193,765

Unamortized debt discount ( 1,266 ) ( 5,074 )

Debt issuance cost ( 5,892 ) ( 5,374 )

2 unchanged sentences

Long-term debt, net of current portion $ 169,549 $ 186,525

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.

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.

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

On January 4, 2024, the Company entered into the Seller Term Loan in connection with the closing of 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.

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 (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.

Subject to 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.

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)

The 10.5 % senior secured bonds due 2029 (“2029 Bonds”) were issued pursuant to the Bond Terms, dated as of November 5, 2024 (“Bond Terms”), between the Company and Nordic Trustee AS, as bond trustee and security agent (“Bond Trustee”).

The 2029 Bonds are the Company’s senior secured obligations and are jointly and severally guaranteed on a senior secured basis by each of the Company’s direct and indirect domestic subsidiaries that guarantees its Credit Facility and certain of the Company’s foreign subsidiaries.

The 2029 Bonds will mature on November 7, 2029.

Interest on the 2029 Bonds will accrue at a rate of 10.5 % per annum payable semi-annually in arrears on May 7 and November 7 of each year in cash, beginning May 7, 2025.

Prepayment of the 2029 Bonds prior to May 7, 2027 requires the payment of make-whole amounts, and prepayments on or after that date are subject to prepayment premiums that decline over time.

The 2029 Bonds contain the following financial covenants:

(i) a maximum leverage ratio of 4.0 x;

and (ii) a minimum liquidity test equal to $ 25.0 million, in each case, for the Company and its consolidated subsidiaries.

The Bond Terms also contain certain equity cure rights with respect to such financial covenants.

The 2029 Bonds are also subject to negative covenants as set forth in the Bond Terms.

As of March 31, 2025, the Company was in compliance with all of its 2029 Bonds financial covenants.

Upon the occurrence of certain change of control events, as specified in the Bond Terms, each holder of the 2029 Bonds will have the right to require that the Company repurchase all or some of such holder’s 2029 Bonds in cash at a purchase price equal to 101 % of the aggregate principal amount thereof.

The Bond Terms contain certain customary events of default, including, among other things:

(i) default in the payment of any amount when due;

(ii) default in the performance or breach of any other covenant in the Finance Documents, as defined in the Bond Terms, which default continues uncured for a period of 20 business days after the earlier of (1) the Company’s actual knowledge of such event or (2) the Company’s receipt of notice from the Bond Trustee;

and (iii) certain voluntary or involuntary events of bankruptcy, insolvency or reorganization of the Company.

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 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.

Our senior secured asset-based lending facility (“Credit Facility”) matures on the earliest of (a) September 8, 2028 and (b) the date that is 91 days prior to the maturity of the 2029 Bonds (which will not apply if the 2029 Bonds are repaid prior to such 91st day).

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.

2 unchanged sentences

Lender commitments under the Credit Facility, subject to certain limitations, may be increased by an additional $ 100.0 million .

Forum Energy Technologies, Inc.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Continued)

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.

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, 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.

As of March 31, 2025, our total borrowing base was $ 168.5 million, of which $ 73.8 million amount was drawn and $ 17.3 million was used as security for outstanding letters of credit, resulting in remaining availability of $ 77.4 million.

Borrowings under the U.S.

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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 weighted average interest rate under the Credit Facility was approximately 7.55 % and 8.34 % for the three months ended March 31, 2025 and 2024, 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

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;

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;

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.

As of March 31, 2025, the Company was in compliance with all of its Credit Facility financial covenants.

Forum Energy Technologies, Inc.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Continued)

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 $ 17.0 million and $ 20.3 million in total outstanding letters of credit as of September 30, 2024 and December 31, 2023, respectively.

The Company had $ 17.3 million and $ 17.8 million in total outstanding letters of credit as of March 31, 2025 and December 31, 2024, 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, 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.

For the three months ended March 31, 2025 and 2024, the Company recorded a tax expense of $ 3.8 million and $ 3.5 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.

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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 2025 as a result of a lapse of the statute of limitations.

The Organization for Economic Co-operation and Development introduced Base Erosion and Profit Shifting 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.

The Organization for Economic Co-operation and Development 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 a global minimum tax and more countries are expected to enact similar minimum tax regimes in 2025.

Based on current enacted legislation, we do not expect a material impact on our future effective tax rate.

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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 or loss and 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 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 September 30, 2024.

Forum Energy Technologies, Inc.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Continued)

As of March 31, 2025, 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., Singapore and China.

As a result, we have certain valuation allowances against our deferred tax assets as of March 31, 2025.

Fair Value Measurements

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 Company had $ 73.8 million and $ 100.0 million borrowings outstanding under the Credit Facility and 2029 Bonds as of March 31, 2025, respectively.

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 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 September 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 nine months ended September 30, 2024.

The fair value of our 2029 Bonds 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, 2025, the fair value and the carrying value of our 2029 Bonds approximated $ 102.0 million and $ 94.1 million, respectively.

At December 31, 2024, the fair value and the carrying value of our 2029 Bonds approximated $ 99.5 million and $ 94.6 million, respectively.

There were no other significant outstanding financial instruments as of March 31, 2025 and December 31, 2024 that required measuring the amounts at fair value on a recurring basis.

Forum Energy Technologies, Inc.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Continued)

Business Segments

In the first quarter 2024, following the Variperm Acquisition, we aligned our reportable segments with business activity drivers and the manner in which management reviews and evaluates operating performance.

FET now operates in the following two reportable segments:

The Company 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.

The Drilling and Completions segment designs, manufactures and supplies products and solutions to the drilling, subsea, coiled tubing, well stimulation and intervention markets, including applications in oil and natural gas, renewable energy, defense and communications.

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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, 2025 Drilling and Completions Artificial Lift and Downhole Total

Revenue from external customers $ 115,483 $ 77,796 $ 193,279

Intersegment revenue 86 — 86

Segment revenue 115,569 77,796 193,365

Elimination of intersegment revenue ( 86 )

Total consolidated revenue 193,279

Cost of sales 84,354 50,650 135,004

Selling, general and administrative expenses 21,836 19,849 41,685

Segment operating income $ 9,379 $ 7,297 $ 16,676

Three Months Ended March 31, 2024 Drilling and Completions Artificial Lift and Downhole Total

Revenue from external customers $ 119,050 $ 83,342 $ 202,392

Intersegment revenue 21 — 21

Segment revenue 119,071 83,342 202,413

Elimination of intersegment revenue ( 21 )

Total consolidated revenue 202,392

Cost of sales 88,036 50,618 138,654

Selling, general and administrative expenses 26,476 20,938 47,414

Segment operating income $ 4,559 $ 11,786 $ 16,345

Forum Energy Technologies, Inc.

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Notes to Condensed Consolidated Financial Statements (Continued)

Summary financial data by segment follows (in thousands):

Three Months Ended Nine Months Ended

September 30, September 30,

2024 2023 2024 2023

Drilling and Completions $ 123,587 $ 118,920 $ 359,683 $ 376,026

Artificial Lift and Downhole 84,226 60,357 255,737 177,681

Eliminations ( 7 ) ( 24 ) ( 13 ) ( 48 )

Total revenue $ 207,806 $ 179,253 $ 615,407 $ 553,659

Segment operating income

Drilling and Completions $ 7,030 $ 3,868 $ 14,464 $ 15,483

Artificial Lift and Downhole 10,784 8,519 36,031 24,121

Corporate ( 8,404 ) ( 6,861 ) ( 22,610 ) ( 20,538 )

A reconciliation of segment operating income to income (loss) before income taxes is as follows (in thousands):

Three Months Ended

Segment operating income $ 16,676 $ 16,345

Other corporate expenses

Transaction expenses 51 5,921

Loss (gain) on disposal of assets and other 123 ( 28 )

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

Interest expense 4,983 8,760

Foreign exchange losses (gains) and other, net ( 1,068 ) 1,227

Income (loss) before income taxes $ 4,889 $ ( 6,787 )

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

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Drilling and Completions $ 410,785 $ 418,583

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

Forum Energy Technologies, Inc.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Continued)

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

Three Months Ended Nine Months Ended

September 30, September 30,

2024 2023 2024 2023

Three Months Ended

Drilling $ 32,113 $ 36,472

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Total revenue $ 193,279 $ 202,392

Forum Energy Technologies, Inc.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Continued)

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

Three Months Ended Nine Months Ended

September 30, September 30,

2024 2023 2024 2023

Three Months Ended

United States $ 103,903 $ 111,317

Canada 31,437 35,639

Middle East 24,678 27,359 67,411 64,058

Europe & Africa 19,788 21,602

Middle East 19,645 17,355

Asia-Pacific 10,443 10,168

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

The reserves accrued at March 31, 2025 and December 31, 2024, 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.

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 2024 Annual Report on Form 10-K filed with the SEC on March 3, 2025.

Forum Energy Technologies, Inc.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Continued)

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 Nine Months Ended

September 30, September 30,

2024 2023 2024 2023

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

Three Months Ended

Net income (loss) $ 1,122 $ ( 10,315 )

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Diluted $ 0.09 $ ( 0.85 )

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.

Stockholders' Equity

Stock-based compensation

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 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 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 .

For the three months ended March 31, 2025, the diluted earnings per share excludes approximately nine thousand shares because they were anti-dilutive.

For the three months ended 2024, we excluded all potentially dilutive stock options and restricted stock in calculating diluted earnings per share as the effect was anti-dilutive due to net losses incurred for the period.

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

Forum Energy Technologies, Inc.

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Notes to Condensed Consolidated Financial Statements (Continued)

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.

Stock-based Compensation

Restricted Stock and Time-Based Restricted Stock Units

During the three months ended March 31, 2025, the Company granted 190,392 time-based restricted stock units to employees that vest after three years .

Also, during the three months ended March 31, 2025, the Company granted 34,228 time-based restricted stock and 8,557 time-based restricted stock units to non-employee members of the Board of Directors that vest after one year .

Performance Share Awards

During the three months ended March 31, 2025, the Company granted 95,197 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, 2025 through December 31, 2025, January 1, 2025 through December 31, 2026 and January 1, 2025 through December 31, 2027, and one-third 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.

During the three months ended March 31, 2025, the Company granted 95,197 performance restricted stock units (assuming target performance) to employees that vest based upon the Company's free cash flow over three different performance periods.

The performance restricted stock units may settle for between 0 % and 200 % of the target units granted.

During the three months ended March 31, 2025, the Company granted 114,000 performance restricted stock units (assuming target performance) to employees that vest based upon the Company's minimum stock price threshold of $ 21.91 per share, for 20 consecutive trading days during the period commencing on grant date of March 5, 2025 and ending on the third anniversary thereof.

Related Party Transactions

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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