Hello, everybody. Welcome to the 17th Annual Ideas Conference. My name is Erke. I'm with Three Part. Today we have Forum Energy Technologies, traded on the New York Stock Exchange under the ticker FET. On behalf of the company, we have Neal Lux, CEO. Thank you] Hey, appreciate the introduction. Maybe before I get started, just do a quick introduction of myself. You know, I joined FET in 2017. I'd like to say I was adopted into the company when they acquired a company I helped found, which is one of our largest product lines today called Global Tubing. I've stayed in this industry about 20 years, had a number of different operating roles. My background is an engineer. I like to think I've gone from an engineer to an entrepreneur to an executive, but stayed focused on innovation. I have a couple of patents to my name that have continued to generate revenue over time, profitable revenue, thankfully. It's part of our company's DNA. The T in FET is Technology, and it's a big part of what we do. We'll talk a little bit about that. All right, to get started, I think you all know this slide here. I won't spend a lot of time on it. I really want to start with today who we are. Spend a little time on who we are, but most of the discussion, most of the presentation is going to be why. Why are we a great company and a great, better investment? Starting with who we are, we are a manufacturer with a global reach. We service really two primary segments. We call them our Artificial and Downhole segment and Drilling and Completions segment. Within each segment, our customer base is a little different. With Artificial and Downhole, we generally sell our products to operators. These are the owners of the property, the producers of the oil and gas. In that segment, we sell products that increase production, that help wellbore efficiency, that remove impurities from the well stream. That is really our focus in Artificial and Downhole. Drilling and Completion side. I want to make sure it's keeping up with me. Drilling and Completion side, we generally sell to the world's largest oil field service companies. These are companies like Halliburton, Baker Hughes, Schlumberger, DOF, Subsea. In this product line, in this segment, excuse me, we provide products that help our customers drill faster, more efficiently with better tools, complete and fract more wells, or work in deep water subsea environments. Really kind of the spread there. As a global manufacturer, about half of our sales are outside the United States. The split is 49-51 international in the United States. The types of products we sell, about 3/4 of our products are what we call activity-based consumables. These are not nuts and bolts or nails and screws. These are high dollar, tens of thousands, if not hundreds of thousands of dollar unit prices that our customers have to have in order to do the work efficiently. The great thing about these products is they wear out in three to six months, and they got to come back to us to get another consumable. Great opportunity there. The other quarter of our sales is our Capital Equipment. This is equipment that we like to think of as component type equipment, that if a customer has a rig and they have a specialized tool, our tool is generally a replacement for that that allows them more capability. A good example is an Iron Roughneck. Drilling rigs, almost all of them have an Iron Roughneck. Most of them have an 80,000 foot-pound Iron Roughneck. We provide a 120,000 foot-pound Iron Roughneck. As the wells have gotten longer and more difficult, the drill pipe has gotten bigger, and the requirements for how much torque you can provide have gotten higher. That is our capital equipment opportunities. We can provide that capital equipment to that rig. We do not need a whole new rig build cycle to drive our capital sales. We just need more activity at a higher intensity, and that is our opportunity. Just quickly summarizing our financial performance since 2021, again, we have grown revenue about 15% from 2021 to 2024. The story really is on the EBITDA line, growing from $20 million to $100 million from 2021 to 2024, and increasing our margins from 4% to 12%, tripling our margins over that time, done through innovation, market share, and portfolio optimization. That is FET at a glance. That is who we are. I think more importantly for you all, for those that are watching, is why FET? Why are we a great company? Why are we a better investment? Again, global manufacturer, but why? Why are we a better investment? We have a track record of outperformance. We are an incredible value. We've had significant capital returns and plan more in the future, and we are poised for growth. Let me step through each one of those, starting with our track record. Looking at our annualized stock price performance over five years, we've returned about 19% annually versus the Russell at 10%. Significant outperformance there. Over a one-year span, we've had a 73% return versus 9% for the Russell. We've done that through strong financial growth, balance sheet fortification, and meaningful capital returns, which I'll touch on a little bit later. In addition to our returns outperformance, if you look at some key financial metrics, revenue growth, we've doubled or almost doubled the revenue growth versus our index, the Russell 2000, 15 to 8. We've done this through market share gains and acquisitions. With our business model, we've generated a significant amount of cash flow growth, growing at a compound annual growth rate of 73%, again, versus the Russell negative. High operating leverage, capital-light business model. That's our outperformance. Let's go to value. Again, looking at FET versus the Russell 2000, hit a few key valuation metrics. Adjusted cash flow yield. You're getting almost four times cash flow per share with FET than you would with the Russell 2000. Advantage FET. Looking at enterprise value to EBITDA, price to sales, they're almost three times higher, more overvalued than what we are. Again, advantage FET. Are we doing it with leverage? No. We have about a third of the leverage of the Russell 2000. Again, advantage FET. We think this is an incredible value today. Capital returns. This has been an important topic for us, for our investors, and I'm going to spend a few minutes here. Starts with our framework. What are we using our cash for? First, we're using about 50% of our Free Cash Flow to reduce our net debt. Since 2019, we have had significant deleveraging from $344 million at the end of 2019 to about $114 million at the end of the third quarter. Reduced our net leverage ratio from 3.9 to 1.3 times. We are in a great financial position. The other half of our framework is allocated to strategic investments. This is a combination of either buying ourselves with share repurchases or acquisitions, strategic acquisitions. A few slides ago talked about our incredible value, 20% plus Free Cash Flow yield. It's hard to find companies with that kind of Free Cash Flow yield. We've been buying ourselves. We've been executing a share price, share repurchase plan. Since the start of this year, we have retired 7% of our shares. We've bought 7% of our shares outstanding this year. 1.1 million shares since October. We've had significant capital returns. Okay. I think kind of the first three, I think, make us interesting. I think the real reason that I'm here, that I'm excited, I think the reason you're here is we want growth. We have that. We are poised for growth. I think I'm going to spend a lot more time talking about how do we grow this business. It begins with our beat the market strategy. This strategy has a few parts. First, we compete in targeted markets. We want to compete where we can win, where we have limited competition, where our customers value what we provide. Again, this is a differentiated product offering. We are going to utilize our competitive advantages. We, over time, have invested a significant amount in our manufacturing know-how and our intellectual property and our brands. We have some brands that go back decades, if not 30 or 40 years. We are trusted with our customers. On top of that, we have industry experts that help us execute product development and our commercial efforts. A lot of our team have worked for our customer base or in the industry. Part of our product development framework is that we get feedback from how our products are utilized in the field, and we can improve upon them. That is how we innovate continuously. We have our experts, and we develop differentiated technology. It does two things. It extends our lead in the markets we compete in today, and it opens up new addressable markets. That is where you can get the growth. We will spend a little time on that in a second. Finally, we leverage our global footprint. We have key manufacturing and distribution sites around the world. We can rapidly respond to customer demand, whether it is in Saudi Arabia, UAE, the Middle East, Asia, or South America. We are well located to respond to customer demand. Again, as a manufacturer, we do not have to be in every part of the globe. We just have to be close enough that we can send our products on a boat or on a truck and get them to where demand is. It also gives us an efficient and robust supply chain. A big question we hear from investors is tariffs. By having manufacturing sites and distribution sites around the world and close to our customers, we've been able to minimize the impact of tariffs significantly. Beat the market strategy. Since we implemented it in 2022, we've grown our share, as we define by average revenue per rig, by 20%. We've beaten the market that way. As we entered this year, we've continued to do our beat the market strategy, but we wanted to refine it a little bit. By doing that, we looked at how do we want to categorize the products and the markets we address. The first thing we did is we said, "Okay, we have one group of products and markets that we address. We call our leadership markets. Those markets make up about two-thirds of our revenue today. And then the other third is our growth markets." I'm going to start, though, by talking about our leadership ones. In the leadership markets, these are markets where we have meaningful market share, where our solutions have been adopted, where customers know they can just call us and we'll deliver the product they need. We have broad geographic exposure. We've sold in the U.S., we've sold in the Middle East, we've sold in Europe, Africa, Latin America, broad geographic exposure. When we look at those addressable markets for these products, it's about $1.5 billion, and we have about 36% market share. Strong market share. Again, we're that one or two in that position. Few examples. Coiled tubing. We are one of three global providers of Quench and Temper coiled tubing. One of three. Few competitors. Very similar. Cased Hole Wireline. We are one of three manufacturers of specialized armored cable for downhole high-pressure applications. One of three. ROVs or Remotely Operated Vehicles. We believe we have sold our vehicles and have the highest install base of these robotic vehicles that help install subsea equipment today. Sand and Flow Control Products. These are products that are utilized in the thermal oil sands to increase production and minimize sand inflow. We think we are by far the market leader in this product line today. Our goal, as we think about the next five years, is we want to sustain our edge in this market. Quite honestly, I think we can do a little better, but our bottom line goal is we're going to sustain our edge by continuously developing and staying close to our customers. The exciting part, though, of the growth story is the opportunity for new customer acquisition. This comes from our growth markets. These markets, again, they're targeted. We want to compete where we can win, and they have few competitors, so that's good. The innovations that we have here, the products we have here, are in the early stages of adoption. We may be in a trial stage, or we may have to expand our reach where we have great sales in the U.S., and we need to operate, we need to sell those products into other markets, the Middle East, and so on. When we look at our addressable markets for the growth market opportunity, it's about a $3 billion addressable market. Our share is much lower, again, because of the reasons I just said. Much lower share. Few examples that we're excited about: the Defense Industry. Our products work really well: deepwater, underwater. The Defense Industry is looking for ways to be stealthy without being seen by satellites. They've come to us and said, "Can we take that knowledge that you have and apply it to different applications?" We just recently sold a rescue submarine. This is a submarine that mates to a disabled sub and rescues the sailor. It's taking the technology we've developed for oil and gas and applying it for defense. Incredibly exciting. Another opportunity for us is Coiled Line Pipe. This is a product that we produce at the same facility as our Coiled Tubing facility, which is used in downhole applications, but we have a new application for it by adding a coating to that product. We are taking and getting better utilization of an existing asset and addressing a growing market. This product saves our customers time and money by reducing the number of welds on the site. The last two really are really downhole tools that I think are a great opportunity for us. I'll focus on the Pump Protection. We sell tools that extend the life of Downhole Pumps for operators. Our tools prevent sand and gas from entering the pump and disabling that pump. When a pump's disabled, the operator has to call out a workover rig. Like for those here who were earlier Ranger, they had to pull out all the tubing and all the insides of the well, take the pump out, and replace it. Our tools delay that operation by months or years. It saves the operator a lot of money. Also, with that tool, we have had significant market share gains in the United States. However, we have had very little internationally. That market is four times larger than the U.S. Our goal here, especially on the pump protection, is to take a product that has really good run history, really great customer success, and apply it to a market that is much larger internationally. That is a big part of our growth strategy. Ultimately, what we want to do over the next five years is grow our share from 8% to 16% in these growth markets. In a flat market, if we do not believe the energy industry is going to grow for the next five years, we think we can still grow our revenue 30%, around 30% to a billion dollars. Significant growth in these markets. Flat market, though, is not our baseline. I think for the reasons here, I think our industry is poised for growth. Our market specifically, whether it is global GDP growth, urbanization, should drive Oil and Natural Gas demand. We are going to need to increase supply. Again, about 90% of EMP's investment is just to overcome decline rates. If you have growth on top of that, we need a lot more supply. We think rig count over time is going to grow modestly. More importantly, our customers are going to have to be more efficient. We call that service intensity. They're going to drill more wells with the same amount of rigs. They're going to complete more stages, but they're going to have to do it in a very service-intensive fashion. That is going to drive demand for our products. Again, remember, activity-based consumables are a big part of our sales. We believe under this scenario that our markets will grow 9% a year. In that scenario, with our market share gains and the market growth, our revenue will double to $1.6 billion in the next five years. Massive growth. What does that look like? Again, on the far left, beginning with our historical, we've been growing our revenue about 13% CAGR through this year, through our estimate for this year. We continue that growth for the next five years to 2030. Revenue, $1.6 billion versus $780 million this year. With our operating leverage, again, 25%-35% of our incremental revenue turns into EBITDA. We will quadruple under that scenario our EBITDA in 2030. Massive change. With our capital-light business model, 60%-70% of that incremental EBITDA turns into Free Cash Flow. By 2030, we have the opportunity to increase our Free Cash Flow by three times. Significant, significant number. Why FET? Track record of outperformance. We are an incredible value. We've had significant capital returns, and we expect that in the future. On top of that base, we are poised for growth. With that, I'll take a few questions. [Quiet room.] Thank you. Hi. You were talking a little bit in terms of the market leadership and what we're looking at. Can you give an example of some of those markets? What do you see in terms of the market share? Yes. I think you asked about our leadership markets and some examples of share there. A good example is our Cased Hole Wireline product line in our leadership market. Within that market, we address the market with what we call our QWC brand. It's been around a long time. The opportunity we have there is with service intensity. These cables are used to actuate perforating guns or to set plugs in the Fracturing Operation, as well as get longer. As frac crews get more efficient, you'll run that same cable in many more times per day. The impact for us is that that cable will wear out faster. We will sell more cables per year to that operator. In addition, as the wells get longer, the laterals get longer, our cables get longer. Our price per cable will go up. That's the kind of opportunity we have in our leadership markets, very similar with Coiled Tubing as well. Yes. You mentioned that after sales is outside the United States. In terms of the competition you get for manufacturing of some of the leadership market products like Coiled Tubing, the ROVs, do you see a lot of competition out there, like in the outside U.S. in this area? Yeah. Great. The question was, do we see a lot of competition for our products internationally? I would say we try to focus on, again, even whether it's U.S. or outside the U.S., we view it, we want to have very few competitors as part of our strategy. We want to go in areas where we have one or two competitors in leadership positions. When you think about ROVs, I think he also asked about ROVs and Coil Tubing. Those are very specialized manufacturing items. For Coil Tubing, we are one of three manufacturers of Quench and Temper Coil Tubing. The hard part about what we do is we got to produce 35,000 feet continuously of tubing without a defect and do it by heating it to almost 2,000 degrees Fahrenheit and quickly quenching it to 100 degrees Fahrenheit in less than 15 feet. You have to be very knowledged and specialized to do that. It's hard to replicate. Internationally, we generally do not have competition in the specific areas that we focus on. I think you also mentioned ROVs. If you think about a customer who has an offshore vessel that works at 5,000 ft, 7,000 ft, 8,000 ft deep, it's not worth saving a few pennies, a few dollars buying a knockoff brand of robotics when you can buy one that has 30 or 40 years of run life, plus the innovation that we add. I think our goal is always to outrun the competition. First of all, we focus on markets where we have few competitors. Internationally or in the U.S., it doesn't change our approach. Yes, sir. Are there any particular geographies that you're not represented in that you'd like to be represented in? The second question is, how does the price of oil affect the growth of the manufacturing industry? More sensitive as the price goes up, or maybe it's more sensitive as the price goes down? Just make sure I summarize. Again, geographies that we want to be in, that we're not in, and price of oil impact on our growth outlook. Is that pretty good? Okay. Geographies, I think we address the global—there's really not a geography we don't address with some of our product lines. I do see opportunities for us to expand our geographic reach. I think the example I used was with our Pump Protection product line, where we're very strong in the U.S., but we're newer in the Middle East. We're in the trial stage for some big national oil companies. I would like to see that grow. That's part of our five-year plan. What we do is we monitor our progress, right? If you have zero sales in Saudi Arabia today, the first thing you need to do is get qualified. We're pushing our commercial teams to get a trial and get a qualification. Once you get qualified, then you need to get into their program, and you need to get as a standard operating procedure. That would be step two. Step three, you're then selling continuously to that company. That's part of our five-year plan that's in there. With regards to the price of oil, I think there's a threshold price where we need to be above for activity. We're only commodity-sensitive if it comes to the decision whether to spend money or not to spend money. If there's a level where there's money being spent, we're in good shape. I think what we've tried to do as leaders of our company, obviously, we got to deliver the quarter in front of us. We got to deliver what we've promised to our investors this year. It is incumbent on us to look ahead five years. As we look ahead five years and we think about the world GDP growing, we think about urbanization continuing, we think about AI power demand, that will drive demand for Oil and Gas. We have to replace what's declining, and we're going to have to grow to meet those new demands. We see strong, resilient end markets over time. Does that happen in Q1? Not sure. Q2 of 2026? Not sure. I feel strongly that by 2030, we're going to have to make that investment as an industry, and we're going to be there for it. Okay. Appreciate the time. If there are any other questions, please reach out to Rob Kukla in the back or myself, and we'd be happy to spend time with you. Thank you for your time today.