Forum Energy Technologies, Inc. (NYSE:FET) Q4 2019 Earnings Conference Call - Final Transcript

Feb 13, 2020 • 10:00 am ET


Forum Energy Technologies, Inc. (NYSE:FET) Q4 2019 Earnings Conference Call - Final Transcript


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Good morning, ladies and gentlemen, and welcome to the Forum Energy Technologies' Fourth Quarter and Full Year 2019 Earnings Conference Call. My name is Annie, and I will be your coordinator for today's call. [Operator Instructions] I will now turn the conference call over to Bill Austin, Vice President of Corporate Development and Investor Relations. Please proceed, sir.

Bill Austin

Thank you, Annie. Good morning, and welcome to Forum Energy Technologies' Fourth Quarter 2019 Earnings Conference Call. With us today to present formal remarks are Cris Gaut, Forum's Chairman and Chief Executive Officer; as well as Pablo Mercado, our Chief Financial Officer; and Lyle Williams, Senior Vice President of Operations. We issued our earnings release last night and it is available on our website. The statements made during this conference call, including the answers to your questions, may include forward-looking statements. These statements involve risks and uncertainties that may cause actual results or events to differ materially from those expressed or implied in such statements. Those risks include, among other things, matters that we have described in our earnings release and in our filings with the Securities and Exchange Commission.

We do not undertake any ongoing obligation, other than that imposed by law, to publicly update or revise any forward-looking statements to reflect future events, information or circumstances that arise after this call. In addition, this conference call contains time-sensitive information that reflects management's best judgment only as of the date of the live call. Management statements may include non-GAAP financial measures. For a reconciliation of these measures, refer to our earnings release. This call is being recorded. A replay of the call will be available on our website for two weeks following the call.

I'm now pleased to turn the call over to Cris Gaut, our Chief Executive Officer.

C. Christopher Gaut

Thanks, Bill. And by the way, we are welcoming Bill Austin back to Forum. He is now our VP of Corporate Development and Investor Relations. Good morning, everyone. When I assumed the role of CEO a little over one year ago, I laid out a plan that would focus on three things, and those are: generating strong free cash flow to reduce net debt; emphasizing our winning products to improve on our market position; and third, improving operating and cost efficiency. 2019 was certainly a challenging year for our industry and for the oilfield equipment sector. However, I believe our team has done an admirable job on these objectives. I would like to report on our 2019 progress in each of these areas. Forum generated $90 million of free cash flow during the year, representing a greater than 70% annualized free cash flow yield on our current equity market capitalization and a greater than 120% conversion rate of EBITDA to cash.

Over the year, we reduced our net debt by $130 million through a combination of strong free cash flow and divestitures of noncore assets. We ended the year with net debt of $342 million, $58 million of cash from the balance sheet