Forum Energy Technologies (FET) risk factors, FY2024 10-K

Risks Related to our Business and Operations

1. 01The success of our business largely depends on activity levels in the oil and natural gas industry, which can be affected by the amount and volatility of oil and natural gas prices
2. 02The markets in which we operate are highly competitive, including some companies that hold substantial market share and have substantially greater resources than we do, as well as a number of regional or local competitors for certain of our product lines. We may not be able to compete successfully in this environment
3. 03Given the uncertainty related to long-term commodity prices and associated customer demand, we may hold excess or obsolete inventory, and as a result, may experience a reduction in gross margins and financial results
4. 04We may not realize revenue on our current backlog due to customer order reductions, cancellations or acceptance delays, which may negatively impact our financial results
5. 05The industry in which we operate is undergoing continuing consolidation and seeking opportunities to participate in the energy transition, which may impact our results of operations
6. 06A greater focus on budgetary discipline and technological advances have caused a decline in customer spending that may remain at a low level despite an increase in commodity prices
7. 07We may be unable to employ a sufficient number of skilled and qualified workers
8. 08We rely on relationships with key suppliers to operate and maintain our business
9. 09Our business depends upon our ability to obtain key raw materials and specialized equipment from suppliers. Increased costs of raw materials and other components, and inflationary pressure, may result in increased operating expenses
10. 10A deterioration of global economic conditions could adversely affect our financial condition and results of operations
11. 11We may not be able to satisfy technical requirements, testing requirements, code requirements or other specifications under contracts and contract tenders
12. 12Our information technology infrastructure could be subject to disruption, compromise or failure and our data protection measures may be insufficient to protect our information, including as a result of cyber incidents adversely impacting our business
13. 13Our success depends on our ability to implement new technologies and services more efficiently and quickly than our competitors
14. 14We may incur liabilities, fines, penalties or additional costs, or we may be unable to sell to certain customers if we do not maintain safe operations
15. 15If we fail to maintain an effective system of internal controls, we may not be able to accurately report our financial results or prevent fraud
16. 16The impact and effects of public health crises, pandemics and epidemics could have a material adverse effect on our business, financial condition and results of operations
17. 17Facility consolidations or expansions may subject us to risks of operating inefficiencies, construction delays and cost overruns
18. 18Our acquisitions and dispositions may not result in anticipated benefits and may present risks not originally contemplated
19. 19A natural disaster, catastrophe or other event could result in severe property damage, which could curtail our operations
20. 20Our operations and our customers’ operations are subject to a variety of governmental laws and regulations that affect our and our customers’ costs, prohibit or curtail our customers’ operations in certain areas, limit the demand for our products and services or restrict our operations
21. 21Potential legislation or regulations restricting the use of hydraulic fracturing could reduce demand for our products
22. 22Our financial results could be adversely impacted by changes in regulation of oil and natural gas exploration and development activity in response to significant environmental incidents or climate change actions
23. 23Our operations are subject to environmental and operational safety laws and regulations that may expose us to significant costs and liabilities
24. 24Tariffs imposed by the U.S. government could have a further severe adverse effect on our results of operations
25. 25We are subject to litigation risks that may not be covered by insurance
26. 26The number and cost of our current and future asbestos claims could be substantially higher than we have estimated and the timing of payment of claims could be sooner than we have estimated
27. 27Our products are used in operations that are subject to potential hazards inherent in the oil and natural gas industry and, as a result, we are exposed to potential liabilities that could affect our financial condition and reputation
28. 28Climate change legislation or regulations restricting emissions of GHGs and related divestment and other efforts could increase our operating costs or reduce demand for our products

Risks Related to Our International Operations

1. 29Our exposure to currency exchange rate fluctuations may result in fluctuations in our cash flows and could have an adverse effect on our results of operations

Risks Related to Our Common Stock, Indebtedness and Financial Condition

1. 30Our common stock price has been volatile, and we expect it to continue to remain volatile in the future
2. 31Our debt agreements contain operating and financial restrictions that restrict our business and financing activities
3. 32Our variable rate indebtedness may subject us to interest rate risk, which could cause our debt service obligations to increase significantly
4. 33Our ability to access the capital and credit markets to raise capital on favorable terms is limited by our debt level, industry conditions and credit rating
5. 34Provisions in our organizational documents and under Delaware law could delay or prevent a change in control of our company, which could adversely affect the price of our common stock
6. 35During the year ended December 31, 2024, we incurred impairment charges and we may incur additional impairment charges in the future
7. 36There was no impairment of goodwill during the year ended December 31, 2024