What Forum Energy Technologies, Inc. told the SEC could break it.

Forum Energy carries expensive secured debt: $100.0 million of 10.50% senior secured 2029 Bonds (issued November 2024) and a senior secured asset-based lending Credit Facility secured by receivables and inventory ($146.0M borrowing base, $37.3M drawn and $36.2M used for letters of credit at year-end), whose Bond Terms and facility covenants restrict dividends, additional debt, asset transfers, affiliate transactions and acquisitions; the double-digit coupon and covenant restrictions, in a cyclical oilfield market, create meaningful refinancing and financial-flexibility risk.

“On November 8, 2024, we completed the offering of $ 100.0 million aggregate principal amount of 10.50 % senior secured bonds (the “2029 Bonds”).”

Forum Energy's demand is tied to oil-and-gas E&P activity and customers' capital/operating budgets: approximately 80% of 2025 revenue came from consumable products and activity-based equipment (the rest mainly capital products), and customers tend to exhaust their capital and operating budgets in the fourth quarter, reducing Q4 demand, while its Canadian operations swing with the winter freeze (higher Q1) and thaw (lower Q2); downturns in drilling/completion activity therefore directly reduce its revenue.

“our customers are susceptible to exhausting their capital and operating budgets in the fourth quarter. As a result, we may experience decreased demand for our products in the fourth quarter.”

Forum Energy manufactures steel/aluminum-intensive oilfield equipment, so timely receipt of raw materials at acceptable prices is critical to its business; it tries to use multiple suppliers to avoid single-supplier dependence but cannot always do so, and rising steel/aluminum prices (amplified by tariffs and anti-dumping duties) raise its costs, while demand for its products is itself tied to volatile oil and natural-gas E&P activity.

“Timely receipt of raw materials is critical to our business and we may not be able to continue purchasing raw materials on a timely basis or at acceptable prices in the future. We generally try to purchase raw materials from multiple suppliers so that we are not dependent on any one supplier, but this is not always possible.”

Forum Energy is materially exposed to trade policy: U.S. Section 232 tariffs on imported steel and aluminum and Section 301 tariffs on Chinese products (including steel), plus anti-dumping duties on certain hot-rolled steel (e.g., a 24.07% margin on Japanese imports and continued AD orders on several countries) raise its input costs and have already reduced valve-product sales volumes, while retaliatory foreign tariffs add further pressure; it is also subject to the FCPA, OFAC and Commerce Department sanctions and relies on agents in countries identified as posing heightened corruption risk.

“The U.S. government imposed global tariffs on certain imported steel and aluminum products pursuant to Section 232 of the Trade Expansion Act of 1962, as well as tariffs on imports of various Chinese product (including steel) pursuant to Section 301 of the Trade Act of 1974.”