Forum Energy Technologies, Inc. (NYSE:FET) Q3 2023 Earnings Call Transcript

Daniel Pickering: Yes. Perfect. And then don’t laugh because you just – you’ve now had this announced for a grand total of 12 hours or something like that. But I’m assuming that Variperm was not the only potential acquisition that you guys have been looking at. It’s a big one. You’ve now got that in place. But as we think about your history of making acquisitions as you success begets success. So as you think about sort of looking into 2024 and the other things you’ve had on the list here, does this sort of take you out of the acquisition game for a while as you integrate Variperm? Or do we keep thinking about are there other potential things like this out there for you?

Lyle Williams: I think our near-term focus will be the successful closing and integration of Variperm, but the thesis that we have is still in place that we think there are a number of good businesses that are out there and consolidation absolutely makes sense. We’re going to continue to analyze and screen and identify good fits and where they make sense. We don’t want to let good opportunities get by.

Daniel Pickering: And Lyle, you’ve mentioned several times, it doesn’t hurt to have an increased float for your business. We’re taking debt up here to 1.9 times. Is there any thought and I know you’ve got some flexibility on this seller note, is there any thought that you need more equity as a component of this transaction in other words, is 1.9 times uncomfortable? Is it a comfortable level? How do you think about this mix of cash? But there’s a lot of debt here, debt versus equity.

Lyle Williams: Yes. No, Dan, great question. And as mentioned, we really are pleased with the mix that we have on equity and cash/debt consideration for the transaction. 1.9 times is a comfortable number for us and primarily because as we look forward both FET and Variperm are well set to generate cash, free cash flow going forward and manage that debt. And so we feel very good about the directionality where we stand and where we can take it. And then just as a reminder, hitting on the fact that we would expect net leverage to drop by the end of next year to between 1 and 1.3 times. I think that’s indicative of what can happen with that cash flow and with even modest growth and EBITDA, we could get there.

Daniel Pickering: Great. Thank you guys. Appreciate it.

Lyle Williams: Thank you.

Neal Lux: Thanks, Dan.

Operator: Thank you. I would now like to turn the conference back over to Neal Lux, CEO for closing remarks.

Neal Lux: Thank you, Giji. And thank you all who are on the call today for your support and participation. We look forward to talking to you again next year in early March to discuss FET’s fourth quarter and full year results. Thank you.

Operator: This concludes today’s conference call. Thank you for participating. You may now disconnect.