Forum Energy Technologies, Inc.

Good morning, ladies and gentlemen, and welcome to the Forum Energy Technologies first quarter 2026 earnings conference call. My name is Daniel, and I will 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. 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, Daniel. Good morning, everyone, and welcome to FET's first quarter 2026 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. Today, 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 reconciliation 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 first quarter 2026 to fourth quarter 2025. I will now turn the call over to Neil.

Thank you, Rob, and good morning, everyone. Our first quarter results reinforced our confidence in the path we presented with FET 2030. Year over year, we increased revenue 8%, EBITDA 14%, and net income 300%. The execution of our beat the market strategy drove these results. Impressively, we grew revenue per global rig 12% from a year ago and positioned our company for future gains with strong bookings. Orders were up 10% year over year with a book to bill of 106%. We entered the year with our highest backlog in 11 years and we grew that backlog again. Compared to the first quarter of last year, our backlog is up 44%. Also, following the completion of our structural cost saving initiatives, we are now a more efficient organization. These efforts have achieved 15 million of annualized savings. In addition, we continued our share repurchase program and strengthened the balance sheet by extending our credit facility's maturity to 2031. Overall, this was the kind of start we wanted to see, providing momentum into the second quarter and beyond. Looking ahead, our results should increase substantially, driven by market share gains, backlog conversion, and cost savings. We are forecasting second quarter EBITDA of between 24 and 30 million, which at the midpoint is up 32% from a year ago. These results would deliver incremental margins of 51%, with EBITDA margins approaching 13%. This sequential improvement is driven solely by the execution of our plan. Turning to the full year, we are raising the midpoint of our EBITDA guidance to 103 million, up 20% compared with 2025. Importantly, while we are seeing signs of increased activity, which is consistent with some analysts' expectations, our forecast conservatively assumes a flat market. Should the market pick up, I would expect to see further upside to our forecast. During the first quarter, we continued gaining market share through innovation and new customer adoption. This is a key part of our strategy, so let me provide an update on a few products we have recently commercialized. First, Duracoil 95, coil tubing for sour service environments, is continuing to gain traction and is now active on three continents. This is an ideal product for Venezuela and the Middle East, especially if work over activity accelerates to bring production back online. Another innovation I want to mention is Unity, our next generation operating system for remote ROV operations. We recently had the opportunity to showcase this technology at a large international trade show. In a real-time demonstration, our customers were able to control an ROV positioned hundreds of miles away from a terminal in our booth. It was a powerful demonstration of Unity's capabilities and has ignited interest in our product. The next product I want to highlight is Duraline, our manifold system for multi-well frac applications. Compared to our competition, Duraline is significantly safer and more efficient. Also, it is a great example of technology developed for U.S. shale applications that can be exported to international locations. In the first quarter, we received a significant order for multiple systems to be deployed in Argentina this year. Another innovative area for FET is rig floor automation. We have developed patent-pending software for the FR-120 iron roughneck that automates the drill pipe makeup and breakout process with the push of a button. Our solution dramatically simplifies rig floor operations reduces non-productive time, and increases drilling efficiency by 30%. This software will be packaged with new iron roughnecks and sold as an upgrade to existing ones. I am very excited about this development. Shifting to the power generation and data center markets, we have seen increased interest in the cooling solutions offered by our global heat transfer product family. Based on customer feedback, we have developed a stationary power cooling solution. This new design gives us an opportunity to address a bigger part of the market. And since its introduction, we have developed a strong commercial funnel. These innovations are great examples of how our product pipeline is supporting both near-term share gains and the long-term ambitions of FET 2030. Shifting to the Middle East conflict and its impact. First and foremost, I am thankful all our employees in the region are safe. That is our primary concern. Also operationally, we have not suffered any facility damage. We have experienced some disruptions that are having a slight impact on our business, particularly around logistics and freight costs. However, Our teams did an excellent job finding creative solutions to these challenges, and we were able to increase revenue in the Middle East during the quarter. While uncertainty remains high, we are not forecasting any material negative impact from the conflict. For context, Middle East revenue is only 10% of our total, limiting the company's exposure. At the same time, This conflict is creating medium to longer-term tailwinds for our industry. A significant portion of the world's oil and gas supply has been disrupted for 62 days and counting. Even if oil shipments through the Strait of Hormuz resume quickly, global oil inventories will be meaningfully reduced, barring a material downturn in global demand. We expect investment in oil and gas production to increase over time to replace depleted inventories and support energy security. Some analysts have suggested that our industry will experience a prolonged upcycle beginning later this year or early 2027. This upcycle aligns with the growth market scenario of our FET 2030 vision. Under this scenario, our addressable markets grow at a rate of 9% annually, and we expand our market share to 22% by 2030. The combination of market expansion and share gains doubles revenue to $1.6 billion, quadruples EBITDA, and nearly triples free cash flow in that time frame. This scenario underscores our strategies long-term value creation potential, while our near-term focus remains on disciplined execution and cash flow generation. Now, to provide more detail on our first quarter results and near-term financial outlook, I will turn the call over to Lyle.