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    Eric Carlson • Private Investor

    Eric Carlson's questions to Forum Energy Technologies Inc (FET) leadership

    Eric Carlson's questions to Forum Energy Technologies Inc (FET) leadership • Q2 2025

    Question

    Eric Carlson asked about the evolution of the capital return strategy once debt targets are met, the balance between organic growth and acquisitions versus cash returns, and FET's competitive positioning given its strong balance sheet and cash generation.

    Answer

    EVP & CFO D. Lyle Williams reiterated the capital allocation framework, suggesting a continued focus on net debt reduction even after the revolver is paid down. President & CEO Neal Lux emphasized the strength of organic opportunities, setting a high bar for M&A, and noted that FET's strong balance sheet provides a competitive advantage against smaller, less capitalized peers.

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    Eric Carlson's questions to Forum Energy Technologies Inc (FET) leadership • Q1 2025

    Question

    Eric Carlson, an analyst, highlighted the company's strong cash generation and low valuation, asking how management plans to execute meaningful buybacks. He also inquired about the evolution of their cash management philosophy for a market upturn and the potential for one-off cash generators like sale-leasebacks.

    Answer

    President and CEO Neal Lux and CFO Lyle Williams addressed the valuation and strategy. Lux emphasized the stock's significant undervaluation, with a forward free cash flow yield over 25%, making buybacks extremely compelling. He explained the company's mindset has shifted from pure EBITDA growth to disciplined free cash flow generation with high returns on working capital. Williams noted that while they constantly evaluate assets, the opportunity for further large sale-leaseback transactions is limited as most suitable real estate has already been monetized.

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    Eric Carlson's questions to Forum Energy Technologies Inc (FET) leadership • Q4 2024

    Question

    Eric Carlson asked for clarity on the normalized income statement following a large impairment charge, questioned the capital deployment strategy given the stock's valuation discount, and inquired about the execution of the buyback and potential for other one-off cash generation.

    Answer

    CFO Lyle Williams explained that the income statement is set for a much-improved 2025, with lower forward interest, tax, and amortization expenses. President and CEO Neal Lux stated that the hurdle for an acquisition would be high, as it must provide better relative value than repurchasing FET's own stock. Williams detailed that buybacks are limited by a 1.5x net leverage test and will likely be weighted to the second half of the year. He also confirmed that the 2025 free cash flow guidance does not assume any further asset monetizations.

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    Eric Carlson's questions to Forum Energy Technologies Inc (FET) leadership • Q3 2024

    Question

    Eric Carlson questioned the durability of FET's strong free cash flow, the mechanics of the debt refinancing, the timeline to reach leverage targets for shareholder returns, and the rationale for M&A versus share buybacks given the company's valuation. He also asked about the Middle East outlook.

    Answer

    CFO Lyle Williams affirmed the free cash flow is durable and not a one-time event, highlighting how lower interest expense will provide a tailwind. He detailed the path to reaching the 1.5x net leverage required for shareholder distributions. CEO Neal Lux agreed that FET's own stock presents a compelling investment with its high free cash flow yield, setting a high hurdle for any M&A. Both executives expressed excitement about the strong opportunity pipeline in the Middle East, driven by unconventional resource development.

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