Forum Energy Technologies Announces Mandatory Conversion of 9.00% Convertible Senior Secured Notes
December 29 2022 - 7:00AM
Business Wire
- Approximately $123 million, or 48%, of 9.00% Convertible Senior
Secured Notes due August 2025 to convert into approximately 4.5
million shares of FET common stock
- Over $11 million reduction in annualized interest payments
Forum Energy Technologies, Inc. (NYSE: FET) today announced the
satisfaction of the mandatory conversion requirements under its
9.00% Convertible Senior Secured Notes due August 2025 (the “2025
Notes”). In connection with the conversion, $122.8 million or 47.8%
of the 2025 Notes will convert into approximately 4.5 million
shares of FET common stock on January 3, 2023, with a settlement
date of January 5, 2023. The remaining approximately $134.2 million
in aggregate principal of the 2025 Notes are not subject to any
optional or further mandatory conversion provisions. FET’s
annualized interest payments will decline by over $11 million
following the conversion.
As adjusted for the conversion and the recently announced sale
leaseback, FET’s net debt would have been approximately $93 million
as of September 30, 2022, or 2.0 times trailing twelve months
Adjusted EBITDA. Availability under FET’s ABL credit facility would
remain $127 million as of that date. See Table 1 for Adjusted
EBITDA to Net Income reconciliation.
Neal Lux, President and Chief Executive Officer, remarked,
“First, I would like to welcome our newest shareholders to the FET
family. In addition, I want to thank FET’s employees for their hard
work and dedication to achieve this important milestone.
“From the third quarter 2020 to the third quarter 2022, and
including our recently announced sale-leaseback transaction, we
have reduced our net debt by approximately $215 million. As we look
ahead, we will continue to execute our strategy of delivering
technology that makes energy production more efficient, safer and
cleaner. The strong macro environment and our ability to capture
market share position us to increase revenue and profit margins.
Importantly, the reduction in cash interest associated with this
debt conversion will bolster our free cash flow generation. The
future is brighter than ever for FET.”
FET is a global company, serving the oil, natural gas,
industrial and renewable energy industries. FET provides value
added solutions that increase the safety and efficiency of energy
exploration and production. We are an environmentally and socially
responsible company headquartered in Houston, TX with
manufacturing, distribution and service facilities strategically
located throughout the world. 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 natural 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, impacts associated with COVID-19, and other important
factors that could cause actual results to differ materially from
those projected as described in the company's filings with the U.S.
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.
Table 1.
Three Months Ended Adjusted EBITDA reconciliation (1)
September 30,2022 June 30,2022 March 31,2022
December 30,2021 Net income (loss)
16.5
9.3
(9.2)
(19.6)
Interest expense
8.1
7.8
7.6
7.9
Depreciation and amortization
9.1
9.5
9.6
10.2
Income tax expense
1.3
1.7
1.9
-3.1
Restructuring, transaction and other costs
1.0
1.4
3.7
1.8
Inventory and other working capital adjustments
(0.8)
(2.1)
-
3.3
Gain on foreign exchange, net (2)
(18.2)
(12.8)
(5.8)
1.8
Stock-based compensation expense
0.8
0.7
1.1
1.9
Adjusted EBITDA
$ 17.8
$ 15.5
$ 8.9
$ 4.2
(1) The company believes that the presentation of
EBITDA is useful to investors because EBITDA is an appropriate
measure of evaluating the company's operating performance and
liquidity that reflects the resources available for strategic
opportunities including, among others, investing in the business,
strengthening the balance sheet, repurchasing the company's
securities and making strategic acquisitions. In addition, EBITDA
is a widely used benchmark in the investment community. (2)
Foreign exchange, net primarily relates to cash and receivables
denominated in U.S. dollars by some of our non-U.S. subsidiaries
that report in a local currency, and therefore the loss has no
economic impact in dollar terms.
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Company Contact
Rob Kukla Director Investor Relations 281.994.3763
Rob.Kukla@f-e-t.com
Forum Energy Technologies (NYSE:FET)
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