Forum Energy Technologies, Inc.

Good morning, ladies and gentlemen, and welcome to the Forum Energy Technologies fourth quarter and full year 2025 earnings conference call. My name is Gigi, and I'll be your coordinator for today's call. There is a process for entering the question and answer queue. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. A link with instructions can be found on the company's investor relations website under the events section. At this time, all participants are in a listen-only mode, and all lines have been placed on mute to prevent any background noise. This conference call is being recorded for replay purposes and will be available on the company's website. I will now turn the conference over to Rob Kukla, Director of Investor Relations. Please proceed, sir.

Thank you, Gigi. Good morning, everyone, and welcome to FET's fourth quarter and full year 2025 earnings conference call. With me today are Neil Lux, our President and Chief Executive Officer, and Lyle Williams, our Chief Financial Officer. Yesterday, we issued our earnings release, which is available on our website. We are relying on federal safe harbor protections for forward-looking statements. Listeners are cautioned that our remarks today will contain information other than historical information. These remarks should be considered in the context of all factors that affect our business, including those disclosed in FET's Form 10-K and other SEC filings. Finally, management statements may include non-GAAP financial measures. For reconciliations of these measures, please refer to our earnings release and website. During today's call, all statements related to EBITDA refer to adjusted EBITDA. And unless otherwise noted, All comparisons are fourth quarter 2025 to third quarter 2025. I will now turn the call over to Neil.

Thank you, Rob, and good morning, everyone. Our fourth quarter and full year results once again display why FET is a great business and a compelling long-term investment. Despite a challenging backdrop, including lower global drilling activity, tariffs, and geopolitical uncertainty, our teams executed with discipline and focus. I am extremely proud of what we achieved in 2025, and we are on the right track to realize our strategic vision, FET 2030. Let me discuss some of the highlights from last year, starting with market share gains. We continued to execute our beat the market strategy. through customer engagement, product innovation, and geographic expansion. Since the strategy's inception in 2022, revenue per global rig has grown 20%. In 2025, we increased it again, despite a sizable decline in global rig count. These gains reflect disciplined commercial execution a product portfolio that continues to resonate with customers and the benefits of our global footprint. Our commercial teams delivered a full-year book-to-bill of 113%, with orders well diversified across products and markets and geographies. The subsea product line performed exceptionally well, with a nearly 190% book-to-bill, supported by awards in the energy and defense markets. Also, capital equipment orders for drilling products increased internationally, while we saw continued strength in wireline, coil tubing, and sand and flow control products. As a result, we enter 2026 with our highest year-end backlog in 11 years, up 46% since the start of 2025, providing both visibility and resilience. A key driver of our market share gains and backlog growth is innovation. New product development remains central to our ability to beat the market and expand our addressable markets. During 2025, we commercialized 10 new products by collaborating with our customers to address specific operational challenges and improve their efficiencies. One innovative example is our Secura Series stage collars, which helped us rapidly grow share in the Middle East with one of the largest oil companies in the world. We are expanding on that line with Secura Slim, the smallest diameter stage collar in the industry designed for complex wells. With Secura Slim, our customers can eliminate a casing strength, significantly reducing costs and improving efficiency while maintaining well integrity. Another important product launch was Duracoil 95, a differentiated coil tubing solution for improved performance in corrosive environments. Developed with Middle East applications in mind, Duracoil 95 expands our portfolio and supports continued international share gains. The last example I will provide is our Duraline manifold system. which allows operators and service companies to rig up significantly faster and more safely with far fewer man-hours. This is made possible by our proprietary Duralock connectors, high-pressure hoses, and patent-pending crane systems. We recently commissioned a system for shale development in Argentina and have line of sight for additional sales. Collectively, these innovations strengthen our technology pipeline and support future growth. In addition to our focus on growth, we are maintaining our margin and cost discipline. During the year, our teams mitigated trade and tariff policy impacts through pricing actions, supply chain optimization, and leveraging our global manufacturing footprint. In parallel, we executed significant structural cost reductions and consolidated four manufacturing plants into two. These actions deliver approximately $15 million of ongoing annualized savings. The combination of market share gains, innovation, and cost discipline have translated directly into strong financial results. Free cash flow generation was a defining strength in 2025. Over the course of the year, we delivered 80 million of free cash flow, the top end of our increased guidance range. This performance enabled disciplined execution of our capital returns framework. We reduced net debt by 28% and repurchased approximately 11% of our shares outstanding. This is an incredible result for our investors. Looking to the future, we remain confident in our bullish long-term outlook. Over the next five years, oil demand is expected to increase along with global economic growth. and natural gas demand is forecast to grow rapidly through LNG exports and AI-driven electricity demand. The energy industry must supply these needs while also overcoming rapid declines in existing production. To meet this enormous challenge, our customers need to be significantly more efficient while also adding new capacity. Under this scenario, FET's addressable markets would expand by more than 50%. This expansion, combined with our targeted market share gains, could double revenue in five years. And with our strong operating leverage and capitalized business model, our EBITDA and free cash flow would grow significantly. The next step in this exciting journey starts now. While the general consensus for our industry is relatively flat activity, we expect to beat the market through share gains, strong backlog conversion, and benefits from structural cost reductions. We are forecasting revenue growth of 6% and EBITDA to increase by 16%. For full year 2026, we are guiding revenue between 800 and 880 million and EBITDA of 90 to 110 million. For adjusted net income, we are guiding between $18 and $38 million. In addition, we expect to convert 65% of EBITDA into free cash flow or between $55 and $75 million. This is a great start to executing FET 2030. To provide more detail on our fourth quarter results and near-term outlook, I will now turn the call over to Lyle.