Forum Energy Technologies, Inc.

Good morning, ladies and gentlemen, and welcome to the Forum Energy Technologies second quarter 2022 earnings conference call. My name is Livia, and I'll be your coordinator for today's call. As a reminder, there's new process for entering the question and answer queue. To ask a question during the Q&A session, you will need to press star 1 1. A link with instructions can be found on the company's investor relations website under the events section. At this time, all participants are on a listen-only mode, and all lines have been placed on mute to prevent any background noise. As a reminder, this conference call is being recorded for replay purposes. I will now turn the conference over to Lai Williams, Chief Financial Officer. Please proceed, sir.

Thank you, Livia. Good morning, and welcome to FET's second quarter 2022 earnings conference call. With me today is Neil Lux, our President and Chief Executive Officer. We issued our earnings release after the market closed yesterday, and it is available on our website. Before we begin, we would like to caution listeners regarding forward-looking statements. Our remarks today may contain information other than historical information. Please note that we are relying on the safe harbor protections afforded by federal law. All such remarks should be considered in the context of the many factors that affect our business, including those disclosed in our Form 10-K, along with other SEC filings. Management statements may include non-GAAP financial measures. For reconciliation of these measures, refer to our earnings release. During today's call, all statements related to EBITDA refer to adjusted EBITDA. This call is being recorded, and a replay of the call will be available on our website. I will now turn the call over to Neil.

Thank you, Lyle. We just wrapped up a great quarter with a lot of highlights. Second quarter bookings were over 200 million, the highest since June 2019. We've increased our backlog for six consecutive quarters. Gross margins were the highest in three years. Revenue and EBITDA are up. 25% and 138% respectively on a year-over-year basis. We are now more profitable than prior to the pandemic. These excellent financial results are the product of our business strategy and improving macro environment. Two years ago, we implemented a strategy to radically improve the profitability of FETs. by implementing and maintaining a lean cost structure, focusing on markets where we have meaningful share, and commercializing new products. Today, I want to thank our teams for executing on that strategy. These initiatives have served us well over the past two years and position us for outsized returns as activity accelerates in the current environment. Our market is the best it has been in many years. Macroeconomic indicators signal an extended period of growth for our industry. Oil and gas inventories remain at very low levels, worldwide spare capacity is limited, and increases in supply cannot occur until investment grows significantly. Oilfield service companies have increased spending on consumable items and replacing capital components just to maintain current activity levels. These customers will need to invest more in equipment upgrades and new builds to grow activity further. FET is meeting these demands with a differentiated portfolio of consumable and capital products. On recent calls, We have highlighted a few of our new capital products, such as the FR-120 iron roughneck for drilling rigs and Serpent Series manifold and flexible hose system for hydraulic fracturing well sites. This quarter, I want to highlight two of our consumable and aftermarket items. The first example is our quality wireline conventional and greaseless cables used by completions-focused service companies. The performance of these electric line cables is critical to the efficiency of zipper and simul-frac operations. Our teams, with many years of field experience, have developed innovative designs that can run in and out of the wellboard faster, while lasting longer than competitive offerings. This performance has allowed us to win new customers and gain share. Another example is within our drilling product line, where one of our products we offer is mud pump consumables. I recently visited a customer's drilling rig with our technical team and inspected one of our patented banded bore fluid end modules. Even though our module had taken many years of service, it was in an almost new condition. The module performed significantly better than a competitive product from a low-cost country, which tends to fail in less than a year. While I was very pleased with the durability of our product, I was even more excited to see our customer recognize its value. Our customers' teams in the field want reliability and performance over cheap and disposable. This is a change in sentiment from the last few years and will favor manufacturers of highly engineered solutions like FET. Before handing it over to Lyle, I want to summarize why FET is in an outstanding position to thrive. The market fundamentals are the best they have been in many years. There are very few industries that have the wind at their backs like we do. We have the right portfolio products to address fast-growing niche markets in traditional oil and gas and new energy applications. Over the past two years, activity increases have driven strong revenue for our drilling and completion consumable products. Demand for our capital components will add another lever of growth. FET is well positioned for this demand. We have the capacity to increase revenue by 50% or more without significant growth capex. Very few companies are in the position to excel like we are. I'll turn the call over to Lyle for more detail on our second quarter results and our updated guidance.