HOUSTON--(BUSINESS WIRE)--Forum Energy Technologies, Inc. (NYSE: FET) today announced fourth quarter 2016 revenue of $147 million, an increase of $9 million, or 6%, from the third quarter 2016. Net loss for the quarter was $13 million, or $0.14 per diluted share, compared to a net loss of $18 million, or $0.20 per diluted share, for the third quarter 2016. Excluding $3 million or $0.02 per share of special items, the adjusted net loss was $0.16 per diluted share in the fourth quarter of 2016. See Tables 1-5 for a reconciliation of GAAP to non-GAAP financial information.
New inbound orders in the quarter were $183 million, a 26% increase from the third quarter 2016, resulting in a book to bill ratio of 124%.
Forum’s total revenue for the full year 2016 was $588 million, a decrease of $486 million, or 45%, from 2015. Net loss was $82 million, or $0.90 per diluted share. Excluding $0.14 per share of special items, adjusted net loss was $0.76 per diluted share for the full year 2016. Forum generated cash flow from operating activities of $64 million and free cash flow of $58 million for the full year 2016.
Drilling & Subsea operations focus primarily on manufactured equipment and consumable products for global drilling and subsea contractors. The segment revenue was $55 million, an 8% increase from the third quarter 2016, due to a 27% improvement in sales of drilling consumable products and capital equipment led by the increase in the U.S. land rig count, partially offset by lower demand for subsea equipment. New inbound orders in the fourth quarter were $65 million, a 39% increase from the third quarter 2016, resulting in a book to bill ratio of 118%.
Completions segment revenue was $35 million, a 5% increase sequentially, as customer spending improved on downhole completion products and pressure pumping consumable equipment. New inbound orders in the fourth quarter were $38 million, an 18% increase from the third quarter 2016, resulting in a book to bill ratio of 109%. The Completions segment designs and manufactures products for the well construction, completion, stimulation and intervention markets primarily in North America.
The Production & Infrastructure segment manufactures well site production equipment, desalination refinery equipment, and a wide range of valves for upstream, midstream and downstream oil and gas customers. Production & Infrastructure segment revenue was $57 million, a 6% increase from the third quarter 2016, primarily due to improved sales of our production equipment and midstream valves in the U.S. New inbound orders in the fourth quarter were $79 million, a 21% increase from the third quarter 2016, primarily due to increased orders for well site production equipment, resulting in a book to bill ratio of 138%.
Review and Outlook
Cris Gaut, Forum’s Chairman and Chief Executive Officer, remarked, "We are beginning to see the impact of increased U.S. land activity on our business, and this was the driver of the improved revenue and orders we saw in the fourth quarter. Forum’s fourth quarter 2016 revenue saw growth in each product line except for Subsea and was the first sequential increase in revenue since the severe downturn began in the third quarter 2014. The 26% sequential increase in orders from the third quarter 2016 was driven by increased U.S. land demand, including for some longer lead time items that will be delivered over the course of 2017. We are ramping up our manufacturing volumes and incurring the upfront costs necessary to respond to the recovery.
"Our financial condition remains strong. Once again, our free cash flow significantly exceeded our net income in 2016, including strong free cash flow performance in the fourth quarter. With the proceeds from our equity offering, we ended the year with $234 million of cash on hand and nothing drawn on our bank credit facility. We are well positioned to actively pursue targeted acquisitions, such as the one we closed last month."
During the first quarter of 2017, Forum acquired the assets of Cooper Valves and a 100% ownership interest in Innovative Valve Components. Cooper Valves manufactures Accuseal® metal seated ball valves engineered to meet Class VI shut off standards for use in severe service applications, as well as a full line of cast and forged gate, globe, and check valves. Innovative Valve Components, in partnership with Cooper Valves, commercialized critical service valves and components for the power generation industry.
Forum received net proceeds of $85 million from the sale of 4,025,000 shares of Common Stock on December 8, 2016.
Forum received several awards, totaling $16 million, from one large independent operator for well site production equipment to support completion activity in five separate shale basins.
Conference Call Information
Forum's conference call is scheduled for Friday, February 10, 2017 at 9:00 AM CST. During the call, the Company intends to discuss fourth quarter 2016 results. To participate in the earnings conference call, please call 855-757-8876 within North America, or 631-485-4851 outside of North America. The access code is 50034686. The call will also be broadcast through the Investor Relations link on Forum’s website at www.f-e-t.com. Participants are encouraged to log in to the webcast or dial in to the conference call approximately ten minutes prior to the start time. A replay of the call will be available for two weeks after the call and may be accessed by dialing 855-859-2056 within North America, or 404-537-3406 outside of North America. The access code is 50034686.
Forum Energy Technologies is a global oilfield products company, serving the drilling, subsea, completions, production and infrastructure sectors of the oil and natural gas industry. The Company’s products include highly engineered capital equipment as well as products that are consumed in the drilling, well construction, production and transportation of oil and natural gas. Forum is headquartered in Houston, TX with manufacturing and distribution facilities strategically located around the globe. For more information, please visit www.f-e-t.com.
Forward Looking Statements and Other Legal Disclosure
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the company expects, believes or anticipates will or may occur in the future are forward-looking statements. Without limiting the generality of the foregoing, forward-looking statements contained in this press release specifically include the expectations of plans, strategies, objectives and anticipated financial and operating results of the company, including any statement about the company's future financial position, liquidity and capital resources, operations, performance, acquisitions, returns, capital expenditure budgets, new product development activities, costs and other guidance included in this press release.
These statements are based on certain assumptions made by the company based on management's experience and perception of historical trends, current conditions, anticipated future developments and other factors believed to be appropriate. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the company, which may cause actual results to differ materially from those implied or expressed by the forward-looking statements. Among other things, these include the volatility of oil and natural gas prices, oilfield development activity levels, the availability of raw materials and specialized equipment, the company's ability to deliver backlog in a timely fashion, the availability of skilled and qualified labor, competition in the oil and gas industry, governmental regulation and taxation of the oil and natural gas industry, the company's ability to implement new technologies and services, the availability and terms of capital, and uncertainties regarding environmental regulations or litigation and other legal or regulatory developments affecting the company's business, and other important factors that could cause actual results to differ materially from those projected as described in the company's filings with the Securities and Exchange Commission.
Any forward-looking statement speaks only as of the date on which such statement is made and the company undertakes no obligation to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by applicable law.
Mark Traylor - Vice President, Investor Relations
Donna Smith - Director, Marketing & Communications