HOUSTON, July 22, 2015 /PRNewswire/ -- Flotek
Industries, Inc. (NYSE: FTK) ("Flotek" or the "Company")
today announced results for the three months ended June 30, 2015.
As reported on Form 10-Q filed with the U.S. Securities and
Exchange Commission, Flotek reported that revenue for the three
months ended June 30, 2015, was
$87.0 million compared to
$105.3 million for the three months
ended June 30, 2014 and $82.4 million for the first quarter of 2015.
Second quarter, 2015 revenue increased 5.6% sequentially but
decreased 17.4% when compared to the same period in 2014. The
decrease in year-over-year revenue was driven by the steep decline
in oilfield activity; however, the increase in sequential revenue
was driven almost entirely by increased sales of Flotek's Complex
nano-Fluid® completion chemistries as the Company's marketing
campaign and new direct distribution model provided significant
revenue opportunities during the quarter.
For the three months ended June 30,
2015, the Company reported net income (excluding non-cash
charges) of $1.1 million, or
$0.02 per common share (fully
diluted), compared to net income of $11.0
million, or $0.20 per common
share (fully diluted) for the same period in 2014 and a net loss of
$1.5 million or $0.03 per common share (fully diluted) in the
first quarter of this year.
During the second quarter, as a result of decreased rig activity
and Flotek's expectations for future market activity, the Company
refocused its Drilling Technologies segment to concentrate on
products and markets that leadership believes have the best
opportunity for profitable growth in the future. As a result, the
Company recorded a pre-tax impairment charge of $20.4 million in the second quarter of 2015.
Including these charges, the Company reported a net loss of
$12.5 million, or $0.23 per common share (fully diluted) for the
three months ended June 30, 2015,
compared to net income of $11.0
million, or $0.20 per common
share (fully diluted) for the same period in 2014.
"In an operating environment that is arguably the most difficult
in decades, Flotek posted exceptionally strong results in the
second quarter of 2015, a testament to both the hard work and
effort of the entire Flotek team and the resilience and critical
importance of performance-optimizing technology in the oilfield,"
said John Chisholm, Flotek's
Chairman, President and Chief Executive Officer. "A return to
profitability and significant growth in our energy chemistry
business are the clear highlights in the quarter, which are the
result of a number of key strategic initiatives executed adroitly
by the Flotek team: the introduction and growth of FracMax™,
Flotek's patent-pending data analytics technology that uses public
data to validate the efficacy of Flotek's Complex nano-Fluid® suite
of completion chemistries; the introduction of new, innovative CnF®
chemistries that create even greater efficiencies for operators;
and a new marketing and distribution strategy that provides
exploration and production companies the opportunity to interact
with and purchase Flotek's advanced chemistries directly from the
Company."
Chisholm added, "We are rapidly approaching the 'tipping point'
in nearly every domestic basin where clients consider the use of
CnF® as the rule rather than the exception in the quest to maximize
oil and natural gas production. In fact, on a volume basis, Flotek
sold more CnF® chemistry to U.S. operators and service companies in
the second quarter than in any quarter in the history of Flotek.
Those who have been skeptical of operators' willingness to invest
in technology to maximize production have underestimated the profit
motives of operators as well as the persuasive nature of empirical
data that show the optimization impact of Flotek's advanced
completion chemistries."
Second quarter, 2015 CnF® sales, by volume, were 76% above first
quarter levels and 34% above volumes in the second quarter of 2014.
Second quarter, 2015 CnF® revenues were 48% above first quarter
levels and just 1% below second quarter, 2014 revenues, when
industry activity was nearly twice current levels. Gross margins
also rose sequentially as a result of an increase in CnF® sales as
well as pricing stabilization during the quarter.
Moreover, CnF® volumes sold into U.S. markets were at a record
high in the second quarter, soaring nearly 113% above first quarter
levels and over 40% above year-ago volumes. For further comparison,
CnF® domestic volumes in the second quarter were nearly 6.5% higher
than fourth quarter, 2014 volumes which was the previous quarterly
record for domestic CnF® sales.
"The significant increase in CnF® usage - in an environment
where the rig count has been slashed by 50%, nearly half of all
pressure pumping equipment is idle and the number of frac stages
per well continues to decline – is a clear indication that
operators are working to maximize production through the use of
advanced technologies, especially chemistry," added Chisholm. "Even
as industry challenges mount, CnF® validation projects continue to
accelerate with an increasing number of those projects coming
directly through Flotek; existing clients are increasing their use
of CnF®; and validation clients are continuing to use Flotek
chemistries on an everyday basis."
"While we are incredibly pleased with our progress in the second
quarter, we are not satisfied and will continue to pursue all
avenues to spread the message that wells completed with Flotek's
CnF® chemistry are significantly more productive than those
without," concluded Chisholm. "We are encouraged by the early
results from July and the opportunity set in front of us,
especially armed with FracMax™ and our new initiative to engage
with and market directly to the ultimate beneficiaries of the our
chemistry, the exploration and production companies. The 'Flotek
Store' is open for business and will have a positive impact on our
business in the second half of the year as clients are able to
participate in the complete Flotek experience."
Other Operational Highlights
While the exceptional performance of Flotek's Energy Chemistry
Technologies segment was an important highlight in the quarter,
several other items deserve mention:
- Improved sales in the Company's Consumer and Industrial
Chemistry Technologies segment led to meaningful improvement in
both revenue and margins. Demand for flavor and fragrance compounds
continues to improve as does pricing. Flotek's inventory was well
positioned to take advantage of demand opportunities and remains
well positioned to benefit from pricing strength in the second half
of the year.
- Flotek's EOGA subsidiary continues to gain traction in its
Enhanced Oil Recovery activities. Recently, Kinder Morgan has begun the use of Flotek's CnF®
to improve field performance at its Katz WAG (water
alternating-gas) Flood. Initial use of CnF® for conformance in the
Katz project yielded early positive results related to CO2
efficiency, with additional work expected. In addition, EOGA
continues to work with gel conformance at Kinder Morgan's SACROC
project.
- Flotek's axial vibration technology, the Stemulator®, continues
to gain market acceptance even in a challenging drilling
environment and was a highlight of the quarter in the drilling
technologies business. The Company's Teledrift®
Measurement-While-Drilling ("MWD") technology faces challenges from
the declining rig count but has been partially offset by the
introduction of TelePulse™, the Company's new MWD
technology, which has received an initial positive reception.
- In Production Technologies, the Company's acquisition of
International Artificial Lift in early 2015 is providing new
opportunities for Flotek as the Company is deploying its first
hydraulic lift units into Mexico.
In addition, Flotek has forged a new supply chain relationship with
an Asian supplier of pump equipment that should accelerate new pump
system sales in the second half of 2015.
- Flotek's recently announced partnership with Solazyme has
gained commercial interest in both domestic and international
markets. The Encapso™ drilling fluid additive was successfully
pumped in a job in Columbia and is being scheduled for additional
jobs in South America and the
Middle East. In North America, the companies are jointly
working with several clients to identify applications for Encapso™
and expect commercial success in the second half of 2015.
Financial Update
A complete review and discussion of the Company's quarter-end
financial performance and position can be found in the Company's
quarterly report on Form 10-Q filed with the U.S. Securities and
Exchange Commission today.
Adjusted Earnings Before Interest, Taxes, Depreciation and
Amortization, or Adjusted EBITDA (a non-GAAP measure of financial
performance), for the three months ended June 30, 2015 was $6.4
million compared to $22.0
million for the three months ended June 30, 2014.
The Company recorded stock-based compensation expense during the
quarter of $3.4 million ($2.2 million, net of tax at 35%). That compares
to stock-based compensation expense in the second quarter of 2014
of $2.4 million ($1.6 million, net of tax at 35%).
A presentation of stock-based compensation and a reconciliation
of GAAP net income to EBITDA can be found at the conclusion of this
release.
Cash balances remained relatively flat compared to cash balances
as of March 31, 2015.
Inventories were $84.6 million,
after the effect of the impairment charge, as of June 30, 2015, a decrease from $86.0 million as of December 31, 2014.
Outstanding receivables, net as of June
30, 2015, were $56.5 million,
compared to $78.6 million as of
December 31, 2014. The Company's
allowance for doubtful accounts represented 1.5% of receivables at
June 30, 2015.
Depreciation and amortization expense, excluding depreciation
and amortization included in cost of sales, for the three months
ended June 30, 2015, increased by
$0.3 million when compared to the
same period in 2014.
Interest and other expense decreased $0.2
million for the three months ended June 30, 2015 as compared to the same period of
2014.
During the three months ended June 30,
2015, the Company repurchased 367,129 shares of its
outstanding common stock on the open market at a cost of
$4.6 million, inclusive of
transaction costs, or an average price of $12.55 per share.
The Company recorded an income tax benefit of $6.5 million, yielding an effective tax rate of
34.1% for the three months ended June 30,
2015, compared to an income tax provision of $6.0 million reflecting an effective tax rate of
35.1% for the comparable period in 2014.
Balance Sheet Adjustments and Credit Facility
Amendments
During the second quarter, a result of decreased rig activity
and Flotek's expectations for future market activity, the Company
refocused its Drilling Technologies segment to concentrate on
products and markets that leadership believes have the best
opportunity for profitable growth in the future. As a result, the
Company recorded a pre-tax impairment charge of $20.4 million in the second quarter of 2015.
Given the changes to drilling techniques – from vertical to
horizontal wells and a shift in focus to pad drilling – the Company
has decided to exit several business lines within the Drilling
Technologies segment, including the construction and servicing of
drilling motors in the South region. In addition, the change in
drilling techniques has made it less likely that the Company will
utilize other drilling equipment in the near future. As a result of
this strategic review and restructuring, certain inventory and
rental equipment related to motors, float equipment, cutters, drill
pipe and steel, power segments and certain other spare parts and
fixed assets have been impaired. In addition, certain
inventory in the Production Technologies segment – primarily older
electric submersible pumps –were included in the impairment as the
segment continues to evolve to oil production markets and away from
weaker coal bed methane markets.
"While it is always difficult to adjust businesses, the cyclical
nadir in oilfield activity provided an opportunity to take a
critical look at our business and assess the best strategy to
optimize future performance," said Chisholm. "This was a deliberate
exercise by Flotek leadership that, I believe, will lead to a more
focused and profitable enterprise as we emerge from the trough of
the cycle. It will also result in greater efficiencies and focus in
our Drilling Technologies segment that will benefit both clients
and shareholders over time."
A complete review of the accounting treatment of these
adjustments can be found in the Company's quarterly report on Form
10-Q filed with the U.S. Securities and Exchange Commission
today.
In addition, the Company entered into an agreement with PNC
Bank, the Company's lead senior lender, to amend the current credit
facility (the "Amendment"). Among other things, the Amendment
alters the definition of adjusted EBITDA used in the calculation of
the Fixed Charge Coverage Ratio, providing for the exclusion of the
certain non-cash expenses from the calculation and excluded certain
levels of capital expenditures related to the construction of the
Company's new Research and Innovation facility in 2015 and 2016.
The Amendment provides Flotek with added financial and strategic
flexibility, including the ability to take the charges necessary to
refocus its Drilling Technologies segment.
"PNC is an important partner for Flotek, and we appreciate their
willingness to work with us as we work to optimize our business
today and position the business for optimal growth in the future,"
added Chisholm. "PNC's willingness to take the time to understand
our business strategy and the related financial needs is a key
component of our success, both in the past and into the
future."
A complete description of the Amendments to the Flotek Credit
Facility can be found in an 8-K to be filed with the U.S.
Securities and Exchange Commission.
Segment Details
Energy Chemistry Technologies segment reported revenue of
$56.5 million for the three months
ended June 30, 2015. Energy
Chemistry Technologies revenue for the three months ended
June 30, 2015, decreased $6.1 million, or 9.8%, relative to the comparable
period of 2014, compared to a 51.0% decline in market activity as
measured by average North American rig count. Revenue for the six
months ended June 30, 2015, decreased
$21.9 million, or 17.5%, relative to
the comparable period of 2014, compared to a 37.5% decline in
market activity. The Energy Chemistry Technologies segment
substantially outperformed the market activity indicators due to
substantial increases in CnF® sales volumes during the quarter.
CnF® sales volumes increased 76% for the three months ended
June 30, 2015 compared to the three
months ended March 31, 2015, and
increased 34% compared to the three months ended June 30, 2014. The increased sales of CnF® during
the second quarter of 2015 were due to Flotek's aggressive
promotion of the benefits of CnF® in completions and re-stimulation
efforts by leveraging the quantitative evidence demonstrated
through the patent pending FracMax™ analytical platform. These
strategic sales and marketing efforts are ensuring that Flotek
remains the leader in the customized chemistry solutions for the
energy industry and is poised to take even greater advantage of any
market recovery.
Income from operations for the Energy Chemistry Technologies
segment of $11.9 million decreased
$7.3 million, or 37.9%, for the three
months ended June 30, 2015, and
decreased $22.1 million, or 54.1%,
for the six months ended June 30,
2015, relative to the comparable periods of 2014. The
decrease in income from operations for both periods is primarily
attributable to the decrease in gross margin and increased
headcount during late 2014 and in the first half of 2015. Headcount
has increased in the sales organization in pursuit of growth
opportunities, and in R&I, related to new product development
and increased demand for existing product support as the segment
continues to refocus and reposition for growth in the market.
Drilling Technologies revenue of $12.3
million for the three months ended June 30, 2015, decreased $14.9 million, or 54.7%, relative to the same
period in 2014, primarily due to decreased actuated tool rentals,
Teledrift® tool rentals, and product sales. Revenue for the six
months ended June 30, 2015, decreased
$21.1 million, or 40.5%, relative to
the same period in 2014, due to a decrease in Teledrift® domestic
rental revenue, decreased product sales, and decreased actuated
tool rentals. The primary cause of the revenue decline was the
dramatic decline in drilling rig activity in North America over the first six months of
2015.
Rental revenue for the three months ended June 30, 2015, decreased $6.2 million, or 41.7%, compared to the same
period of 2014. This decrease can be attributed to a sales volume
decrease in actuated tool rental revenue, particularly in the
competitive motor rental market, and decreased Teledrift® tool
rental revenue domestically. Rental revenue for the six months
ended June 30, 2015, decreased by
$8.3 million, or 28.7%, compared to
the same period of 2014. This decline in revenue is due to a
decrease in Teledrift® domestic tool rentals, motor rentals and
other tool rentals which can be attributed to competitive pricing
pressure and decreasing rig counts. This decrease is partially
offset by an increase in Teledrift® international revenue.
Product sales revenue for the three months ended June 30, 2015, compared to the same periods of
2014 decreased by $6.1 million, or
69.0%, and also decreased for the six months ended June 30, 2015, by $8.9
million, or 53.6%. This is primarily due to decreased float,
centralizer and motor equipment sales in domestic locations.
Service revenue for the three and six months ended June 30, 2015, decreased $2.5 million, or 75.0%, and $4.0 million, or 58.8%, respectively, relative to
comparable periods of 2014. This was primarily related to a decline
in Teledrift® domestic service revenue as the volume of jobs and
service pricing both declined in 2015.
During the second quarter of 2015, as a result of decreased rig
activity and its impact on leadership's expectations for future
market activity, the Company refocused the Drilling Technologies
segment to businesses and markets that have the best opportunity
for profitable growth in the future. As a result, a pre-tax
impairment charge of $19.6 million
was recorded to reflect the reduced value of inventory and rental
equipment associated with product lines and markets the Company
plans to exit or de-emphasize in the future.
Income from operations for the three months and six months ended
June 30, 2015, respectively,
decreased by $25.5 million and
$29.5 million primarily resulting
from the impairment charge. Income from operations excluding the
impairment charge for the three months ended June 30, 2015, decreased by $5.9 million, or 141.2%, compared to the same
period of 2014. Drilling Technologies income from operations
excluding the impairment charge for the six months ended
June 30, 2015, decreased by
$9.9 million, or 131.5%, over the
same period of 2014. The decreases in income from operations for
the three and six month periods ending June
30, 2015, were primarily due to reductions in revenue and
pricing pressure that resulted in customer price reductions,
partially offset by reductions in direct and indirect costs
resulting primarily from headcount reductions and other cost
reduction measures.
Revenue for the Production Technologies segment of $2.7 million for the three months ended
June 30, 2015, decreased by
$0.1 million, or 4.7%, from the same
period in 2014 due to decreased sales of international valve
equipment and domestic sales of electric submersible pumps in the
CBM market offset by increased sales of rod pump equipment. For the
six months ended June 30, 2015,
revenue increased by $1.2 million, or
22.8%, relative to the same period in 2014 as sales of rod pump
equipment in domestic oil markets increased.
As a result of the shift in focus towards oil production markets
and away from CBM markets, the Company evaluated its CBM inventory
during the second quarter of 2015. This evaluation led to the
recording of an impairment of $0.8
million in CBM inventory.
Income from operations decreased $2.0
million for the three months ended June 30, 2015, compared to the same period in
2014, and decreased $2.5 million for
the six months ended June 30, 2015,
compared to the same period in 2014. Income from operations
excluding the impairment decreased by $1.2
million for the three months ended June 30, 2015 compared to the same period in 2014
and decreased by $1.7 million for the
six months ended June 30, 2015
compared to the same period in 2014. This decrease is primarily due
to product mix and increases in SG&A costs attributable to
employee-related expenses as the segment continues to refocus and
reposition for growth.
CICT revenue of $15.5 million
increased $2.9 million, or 22.8%, and
$3.3 million, or 12.9%, for the three
and six months ended June 30, 2015,
respectively, versus the comparable periods of 2014, primarily due
to increased flavor and fragrance and terpene sales.
Income from operations for the CICT segment increased
$1.7 million, or 176.0%, for the
three months ended June 30, 2015, and
increased $1.8 million, or 53.1%, for
the six months ended June 30, 2015,
compared to the same periods of 2014. The increases in income from
operations were primarily due to the increased flavor and fragrance
and terpene sales, increased sales of higher margin flavor and
fragrance products and reductions in SG&A expenses resulting
from cost control measures.
Third Quarter Outlook
"While we are very pleased with our second quarter results, we
understand that cyclical headwinds remain which will continue to
provide challenges to our industry in the coming months," concluded
Chisholm. "However, as our second quarter results show, a more
difficult environment has created an opportunity for Flotek to
demonstrate the importance of performance adding technology in
maximizing operator performance and, as a result new opportunities
for Flotek's advanced chemistry technologies. Through the use of
FracMax™ and the 'Flotek Store', we believe the third quarter
should build on the success of the last three months and provide
opportunities for profitable growth in the second half of the
year."
Conference Call Details
Flotek will host a conference call on Thursday, July 23, 2015, at 8:00 a.m. EDT to discuss its operating results
for the three months ended June 30,
2015.
To participate in the call, participants should dial
800-743-4304 approximately 5 minutes prior to the start of the
call. The call can also be accessed from Flotek's website
at www.flotekind.com.
About Flotek Industries, Inc.
Flotek is a global developer and distributor of innovative
specialty chemicals and down-hole drilling and production
equipment. Flotek manages automated bulk material handling, loading
and blending facilities. It serves major and independent companies
in the domestic and international oilfield service industry. Flotek
Industries, Inc. is a publicly traded company headquartered in
Houston, Texas, and its common
shares are traded on the New York Stock Exchange under the ticker
symbol "FTK."
For additional information, please visit Flotek's web site
at www.flotekind.com.
Forward-Looking Statements
Certain statements set forth in this Press Release constitute
forward-looking statements (within the meaning of Section 27A of
the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934) regarding Flotek Industries, Inc.'s business,
financial condition, results of operations and prospects. Words
such as expects, anticipates, intends, plans, believes, seeks,
estimates and similar expressions or variations of such words are
intended to identify forward-looking statements, but are not the
exclusive means of identifying forward-looking statements in this
Press Release.
Although forward-looking statements in this Press Release
reflect the good faith judgment of management, such statements can
only be based on facts and factors currently known to management.
Consequently, forward-looking statements are inherently subject to
risks and uncertainties, and actual results and outcomes may differ
materially from the results and outcomes discussed in the
forward-looking statements. Factors that could cause or contribute
to such differences in results and outcomes include, but are not
limited to, demand for oil and natural gas drilling services in the
areas and markets in which the Company operates, competition,
obsolescence of products and services, the Company's ability to
obtain financing to support its operations, environmental and other
casualty risks, and the impact of government regulation.
Further information about the risks and uncertainties that may
impact the Company are set forth in the Company's most recent
filing on Form 10-K (including without limitation in the "Risk
Factors" Section), and in the Company's other SEC filings and
publicly available documents. Readers are urged not to place undue
reliance on these forward-looking statements, which speak only as
of the date of this Press Release. The Company undertakes no
obligation to revise or update any forward-looking statements in
order to reflect any event or circumstance that may arise after the
date of this Press Release.
Flotek Industries,
Inc.
Reconciliation of
Non-GAAP Items and Non-Cash Items Impacting Earnings
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
|
|
|
6/30/2015
|
|
6/30/2014
|
|
6/30/2015
|
|
6/30/2014
|
|
|
|
|
|
(in thousands,
except per share data)
|
|
(in thousands,
except per share data)
|
GAAP Net Income
(Loss) and Reconciliation to Adjusted EBITDA
(Non-GAAP)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss)
(GAAP)
|
$ (12,547)
|
|
$ 11,041
|
|
$ (14,062)
|
|
$ 23,058
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
Expense
|
420
|
|
381
|
|
828
|
|
836
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Tax (Benefit)
Expense
|
(6,483)
|
|
5,981
|
|
(6,889)
|
|
12,361
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
Amortization
|
4,610
|
|
4,595
|
|
9,181
|
|
8,814
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment of
inventory and rental equipment
|
20,372
|
|
-
|
|
20,372
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
(Non-GAAP)
|
$ 6,372
|
|
$ 21,998
|
|
$ 9,430
|
|
$ 45,069
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Select Non-Cash
Items Impacting Earnings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Compensation
Expense
|
$ 3,449
|
|
$ 2,422
|
|
$ 6,910
|
|
$ 4,756
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less income tax
effect at 35%
|
(1,207)
|
|
(848)
|
|
(2,419)
|
|
(1,665)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Compensation
Expense, net of tax
|
$ 2,242
|
|
$ 1,574
|
|
$ 4,491
|
|
$ 3,091
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average
Shares Outstanding (Fully Diluted)
|
54,264
|
|
55,533
|
|
54,356
|
|
55,473
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Compensation
Expense Per Share (Fully Diluted)
|
$ 0.04
|
|
$ 0.03
|
|
$ 0.08
|
|
$ 0.06
|
Flotek Industries,
Inc.
Reconciliation of
Earnings Per Share Adjusted For Impairment
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
6/30/2015
|
|
6/30/2015
|
|
(in thousands,
except per share data)
|
Reconciliation of
Earnings Per Share Adjusted For Impairment
|
|
|
|
|
|
|
|
Income (loss)
before income taxes (as reported)
|
(19,030)
|
|
(20,951)
|
|
|
|
|
Impairment of
inventory and rental equipment
|
20,372
|
|
20,372
|
|
|
|
|
Income (loss)
before taxes (excluding impairment)
|
$
1,342
|
|
$
(579)
|
|
|
|
|
Income tax benefit
(expense)
|
(255)
|
|
151
|
|
|
|
|
Net income
(loss)
|
$
1,087
|
|
$
(428)
|
|
|
|
|
Earnings (loss)
per common share:
|
|
|
|
Basic earnings (loss)
per common share
|
$
0.02
|
|
$
(0.01)
|
Diluted earnings
(loss) per common share
|
$
0.02
|
|
$
(0.01)
|
Weighted average
common shares:
|
|
|
|
Weighted average
common shares used in computing basic earnings (loss) per common
share
|
54,264
|
|
54,356
|
Weighted average
common shares used in computing diluted earnings (loss) per common
share
|
54,957
|
|
54,356
|
Flotek Industries,
Inc.
Unaudited
Consolidated Balance Sheets
|
|
|
|
6/30/2015
|
|
12/31/2014
|
ASSETS
|
(in thousands,
except per share data)
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$ 2,475
|
|
$ 1,266
|
Accounts receivable,
net of allowance for doubtful accounts of $825 and $847 at June 30,
2015 and December 31, 2014, respectively
|
56,466
|
|
78,624
|
Inventories
|
84,601
|
|
85,958
|
Income taxes
receivable
|
947
|
|
—
|
Deferred tax assets,
net
|
2,602
|
|
2,696
|
Other current
assets
|
6,011
|
|
11,055
|
Total current
assets
|
153,102
|
|
179,599
|
Property and
equipment, net
|
86,996
|
|
86,111
|
Goodwill
|
72,820
|
|
71,131
|
Deferred tax assets,
net
|
18,871
|
|
12,907
|
Other intangible
assets, net
|
71,604
|
|
73,528
|
TOTAL
ASSETS
|
$403,393
|
|
$ 423,276
|
LIABILITIES AND
EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$ 27,140
|
|
$ 33,185
|
Accrued
liabilities
|
11,276
|
|
12,314
|
Income taxes
payable
|
—
|
|
1,307
|
Interest
payable
|
106
|
|
93
|
Current portion of
long-term debt
|
30,332
|
|
18,643
|
Total current
liabilities
|
68,854
|
|
65,542
|
Long-term debt, less
current portion
|
21,827
|
|
25,398
|
Deferred tax
liabilities, net
|
22,537
|
|
25,982
|
Total
liabilities
|
113,218
|
|
116,922
|
Commitments and
contingencies
|
|
|
|
Equity:
|
|
|
|
Cumulative
convertible preferred stock, $0.0001 par value, 100,000 shares
authorized; no shares issued and outstanding
|
—
|
|
—
|
Common stock, $0.0001
par value, 80,000,000 shares
authorized;
55,917,984 shares issued and 53,608,401 shares outstanding at June
30, 2015; 54,633,726 shares issued and 53,357,811 shares
outstanding at December 31, 2014
|
6
|
|
5
|
Additional paid-in
capital
|
265,997
|
|
254,233
|
Accumulated other
comprehensive income (loss)
|
(666)
|
|
(502)
|
Retained
earnings
|
38,700
|
|
52,762
|
Treasury stock, at
cost; 1,458,061 and 449,397 shares at June 30, 2015 and
December 31, 2014, respectively
|
(14,220)
|
|
(495)
|
Flotek Industries,
Inc. stockholders' equity
|
289,817
|
|
306,003
|
Noncontrolling
interests
|
358
|
|
351
|
Total
equity
|
290,175
|
|
306,354
|
TOTAL LIABILITIES
AND EQUITY
|
$403,393
|
|
$ 423,276
|
Flotek Industries,
Inc.
Unaudited
Consolidated Statements of Operations
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
6/30/2015
|
|
6/30/2014
|
|
6/30/2015
|
|
6/30/2014
|
|
(in thousands,
except per share data)
|
|
(in thousands,
except per share data)
|
Revenue
|
$ 87,030
|
|
$ 105,318
|
|
$ 169,904
|
|
$ 207,893
|
Cost of
revenue
|
57,778
|
|
63,008
|
|
113,625
|
|
121,903
|
Gross
margin
|
29,252
|
|
42,310
|
|
55,779
|
|
85,990
|
Expenses:
|
|
|
|
|
|
|
|
Selling, general and
administrative
|
23,021
|
|
20,854
|
|
46,588
|
|
42,426
|
Depreciation and
amortization
|
2,797
|
|
2,501
|
|
5,473
|
|
4,785
|
Research and
development
|
1,670
|
|
1,280
|
|
3,242
|
|
2,306
|
Impairment of
inventory and rental equipment
|
20,372
|
|
-
|
|
20,372
|
|
-
|
Total
expenses
|
47,860
|
|
24,635
|
|
75,675
|
|
49,517
|
Income (loss) from
operations
|
(18,608)
|
|
17,675
|
|
(19,986)
|
|
36,473
|
Other income
(expense):
|
|
|
|
|
|
|
|
Interest
expense
|
(420)
|
|
(381)
|
|
(828)
|
|
(836)
|
Other income
(expense), net
|
(2)
|
|
(272)
|
|
(227)
|
|
(218)
|
Total other income
(expense)
|
(422)
|
|
(653)
|
|
(1,055)
|
|
(1,054)
|
Income (loss)
before income taxes
|
(19,030)
|
|
17,022
|
|
(20,951)
|
|
35,419
|
Income tax benefit
(expense)
|
6,483
|
|
(5,981)
|
|
6,889
|
|
(12,361)
|
Net income
(loss)
|
$ (12,547)
|
|
$ 11,041
|
|
$ (14,062)
|
|
$ 23,058
|
|
|
|
|
|
|
|
|
Earnings (loss)
per common share:
|
|
|
|
|
|
|
|
Basic earnings (loss)
per common share
|
$ (0.23)
|
|
$ 0.20
|
|
$ (0.26)
|
|
$ 0.42
|
Diluted earnings
(loss) per common share
|
$ (0.23)
|
|
$ 0.20
|
|
$ (0.26)
|
|
$ 0.42
|
Weighted average
common shares:
|
|
|
|
|
|
|
|
Weighted average
common shares used in computing basic earnings (loss) per common
share
|
54,264
|
|
54,645
|
|
54,356
|
|
54,299
|
Weighted average
common shares used in computing diluted earnings (loss) per common
share
|
54,264
|
|
55,533
|
|
54,356
|
|
55,473
|
Flotek Industries,
Inc.
Unaudited
Consolidated Statements of Cash Flows
|
|
|
Six Months
Ended
|
|
6/30/2015
|
|
6/30/2014
|
|
(in thousands,
except per share data)
|
Cash flows from
operating activities:
|
|
|
|
Net income
(loss)
|
$ (14,062)
|
|
$ 23,058
|
Adjustments to
reconcile net income (loss) to net cash provided by operating
activities:
|
|
|
|
Impairment of
inventory and rental equipment
|
20,372
|
|
-
|
Depreciation and
amortization
|
9,181
|
|
8,814
|
Amortization of
deferred financing costs
|
173
|
|
148
|
Gain on sale of
assets
|
(2,023)
|
|
(1,389)
|
Stock compensation
expense
|
6,910
|
|
4,756
|
Deferred income tax
benefit
|
(9,315)
|
|
(446)
|
Excess tax benefit
related to share-based awards
|
(2,149)
|
|
(3,373)
|
Changes in current
assets and liabilities, net of acquisitions:
|
|
|
|
Accounts receivable,
net
|
22,158
|
|
(549)
|
Inventories
|
(16,474)
|
|
(18,828)
|
Income taxes
receivable
|
(947)
|
|
-
|
Other current
assets
|
3,864
|
|
(5,323)
|
Accounts
payable
|
(6,045)
|
|
10,737
|
Accrued
liabilities
|
(1,038)
|
|
(683)
|
Income taxes
payable
|
842
|
|
1,540
|
Interest
payable
|
13
|
|
(22)
|
Net cash provided by
operating activities
|
11,460
|
|
18,440
|
Cash flows from
investing activities:
|
|
|
|
Capital
expenditures
|
(8,963)
|
|
(9,245)
|
Proceeds from sale of
assets
|
2,188
|
|
1,982
|
Payments for
acquisitions, net of cash acquired
|
(1,250)
|
|
(5,704)
|
Purchase of patents
and other intangible assets
|
(292)
|
|
(595)
|
Net cash used in
investing activities
|
(8,317)
|
|
(13,562)
|
Cash flows from
financing activities:
|
|
|
|
Repayments of
indebtedness
|
(6,571)
|
|
(6,720)
|
Borrowings on
revolving credit facility
|
204,150
|
|
204,750
|
Repayments on
revolving credit facility
|
(189,461)
|
|
(203,226)
|
Debt issuance
costs
|
(10)
|
|
(127)
|
Excess tax benefit
related to share-based awards
|
2,149
|
|
3,373
|
Purchase of treasury
stock related to share-based awards
|
(5,339)
|
|
(5,961)
|
Proceeds from sale of
common stock
|
543
|
|
505
|
Repurchase of common
stock
|
(7,260)
|
|
-
|
Proceeds from
exercise of stock options
|
22
|
|
450
|
Proceeds from
exercise of stock warrants
|
-
|
|
1,545
|
Proceeds from
noncontrolling interest
|
7
|
|
-
|
Net cash used in
financing activities
|
(1,770)
|
|
(5,411)
|
Effect of changes in
exchange rates on cash and cash equivalents
|
(164)
|
|
29
|
Net increase
(decrease) in cash and cash equivalents
|
1,209
|
|
(504)
|
Cash and cash
equivalents at the beginning of period
|
1,266
|
|
2,730
|
Cash and cash
equivalents at the end of period
|
$ 2,475
|
|
$ 2,226
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/flotek-industries-inc-announces-second-quarter-2015-financial-and-operating-results-and-conference-call-information-300117330.html
SOURCE Flotek Industries, Inc.