HOUSTON, May 3, 2016 /PRNewswire/ -- Flotek Industries,
Inc. ("Flotek" or the "Company") (FTK) today announced results
for the three months ended March 31,
2016.
As reported on Form 10-Q filed with the U.S. Securities and
Exchange Commission, Flotek reported revenue for the three months
ended March 31, 2016 of $72.3 million, a decrease of $10.1 million, or 12.2%, compared to the same
period of 2015. The decrease in revenue was driven by the continued
decline in drilling activity, as indicated by the 57.8% reduction
in average North American rig count for the three months ended
March 31, 2016, versus the same
period of 2015. Sequentially, total average North American
active drilling rig count decreased by 21.4% when compared to the
fourth quarter, 2015. Moreover, from December 31, 2015, to April 1, 2016, the absolute rig count declined
282 rigs, or 36.1%, from 781 to 499 rigs working, according to
Baker Hughes, Inc. rig count statistics.
Flotek reported a Loss from Operations of $46.0 million for the quarter ended March 31, 2016. Excluding the impairment
charges taken during the quarter, Flotek reported a Loss from
Operations of $5.6 million for the
quarter ended March 31,
2016.
The Company recorded an income tax benefit of $16.4 million, for the three months ended
March 31, 2016, compared to an income
tax benefit of $0.4 million for the
comparable period in 2015.
For the quarter ended March 31,
2016, the Company reported a net loss of $30.2 million or $(0.55) per common share (fully diluted),
compared to a net loss of $1.5
million or $(0.03) per common
share (fully diluted) for the quarter ended March 31, 2015. Excluding non-recurring, non-cash
charges taken during the quarter, Flotek reported a net loss from
continuing operations of $4.6
million, or $(0.08) per common
share (fully diluted) for the three months ended March 31, 2016.
Adjusted Earnings Before Interest, Taxes, Depreciation and
Amortization, or adjusted EBITDA (a non-GAAP measure of financial
performance), for the quarter ended March
31, 2016 was $(1.4)
million, compared to $3.1
million for the quarter ended March
31, 2015.
For the quarter ended March 31,
2016, Flotek's non-cash share-based compensation expense was
approximately $2.4 million
($1.5 million, net of tax at
35%). For the quarter ended March 31,
2015, non-cash share-based compensation was $3.5 million ($2.3
million, net of tax at 35%).
A presentation of non-cash share based compensation and a
reconciliation of GAAP net income to adjusted EBITDA can be found
at the conclusion of this release.
Consolidated gross margin increased to 34.5% for the quarter
ended March 31, 2016, from 32.2% for
the corresponding 2015 period.
"While the tumult in the oilfield continued in the first quarter
of the year, Flotek's Energy Chemistry Technologies segment
continued its resilience as CnF® volumes more than doubled
year-over-year and significantly outpaced overall oilfield activity
during the first three months of 2016," said John Chisholm, Flotek's President, Chairman and
Chief Executive Officer. "While our other energy businesses felt
the impact of strong industry headwinds, our ability to generate
new opportunities with our core CnF® completion fluids, combined
with new international prospects, created solid relative results
for our Company."
"Moreover, as the sequential data suggest, not only did CnF®
completion chemistry sales volumes outperform the market on a
relative basis, revenues declined even less, a sign that Flotek's
value-added chemistry has significant value in the eyes of our
clients."
"During the quarter, we reassessed our Drilling and Production
Technologies segments," added Chisholm. "As a result of a
careful review of the current business environment, our long-term
view of the businesses and resulting changes in our approach toward
the businesses, we recorded a $40.4
million non-cash impairment charge on long-lived assets and
inventory. This accounting treatment is consistent with our ongoing
strategic review of the businesses, which continues
today."
"With our continued focus on Flotek's core chemistry business,
our evaluation and resizing of our Drilling and Production
Technologies businesses and our commitment to cost containment
today and in the future, we continue to believe that the industry
challenges before us also present opportunities in working with our
current and prospective clients to show the compelling economic
benefits of CnF® chemistries in even the most challenging economic
and operating environments," added Chisholm. "The past year has
proved that Flotek can make a positive difference for our clients
through our portfolio of oilfield technologies – regardless of
market conditions and that, in turn, over time will make a positive
difference for our shareholders. We continue to see growing
interest in our completion chemistries and believe such interest,
if sustained, should lead to larger sales volumes in the months
ahead."
"That said, we know the operating environment is challenging,
and may become even more challenging, which could impact our
short-term results," concluded Chisholm. "As such, we continue to
carefully assess each business segment and are looking even more
carefully at operations to make certain we balance prudence in the
current environment while not sacrificing opportunities for
long-term growth. In short we are focused on balancing short-term
liquidity with long-term opportunity."
A complete review of the Company's first quarter financial
results and quarter-end financial position can be found in the
Company's quarterly report filed with the U.S. Securities and
Exchange Commission this afternoon.
First Quarter 2016 – Segment Results
Energy Chemistry Technologies segment reported revenue of
$44.7 million for the three months
ended March 31, 2016. Energy
Chemistry Technologies revenue for the three months ended
March 31, 2016, decreased
$2.0 million, or 4.2%, compared to
the same period in 2015. Segment revenue for the three months
ended March 31, 2016, decreased
$5.6 million, or 11.2%, compared to
fourth quarter, 2015.
Income from operations of $8.0
million for the Energy Chemistry Technologies segment
increased $1.2 million, or 17.5%, for
the three months ended March 31,
2016, compared to the same period of 2015. Income from
operations for the segment decreased $2.9
million, or 26.5%, compared to fourth quarter, 2015.
Drilling Technologies reported revenue of $6.5 million for the three months ended
March 31, 2016, a decrease of
$12.2 million, or 65.5%, relative to
the same period in 2015. Segment revenue for the three months ended
March 31, 2016, decreased
$3.8 million, or 37.1%, compared to
fourth quarter, 2015.
During the first quarter of 2016, as a result of the sequential
decline in segment revenue and expectations for future drilling
activity, the Company determined the carrying amount of certain
long-lived assets exceeded their respective fair values and that
some inventory was either not usable in future operations or the
carrying value exceeded its market value. As a result, an
impairment charge of $36.5 million
was recorded to reflect the reduced value of inventory and
long-lived assets in the Drilling Technologies segment.
Loss from operations in the Drilling Technologies segment for
the three months ended March 31,
2016, increased by $40.3
million versus the same period of 2015, primarily resulting
from the first quarter impairment charge. Loss from
operations, excluding the impairment, for the three months ended
March 31, 2016, increased by
$3.8 million versus the same period
of 2015, primarily due to reductions in revenue and pricing
pressure that resulted in customer price concessions.
Revenue for the Production Technologies segment of $2.0 million for the three months ended
March 31, 2016, decreased by
$1.6 million, or 43.4%, from the same
period in 2015. Segment revenue for the three months ended
March 31, 2016, decreased
$0.9 million, or 29.8%, compared to
fourth quarter, 2015.
As a result of the introduction of newer and proprietary
technology, as well as lower demand for older technologies, the
Company evaluated its Production Technologies inventory for
impairment during the first quarter of 2016. This evaluation led to
the recording of an impairment charge of $3.9 million for inventory in the first quarter,
2016.
Loss from operations in the Production Technologies segment
increased $4.9 million for the three
months ended March 31, 2016, versus
the same period in 2015. Loss from operations, excluding the
impairment, increased by $1.0 million
for the three months ended March 31,
2016, versus the same period in 2015.
Consumer and Industrial Chemistry Technologies ("CICT") revenue
of $19.1 million for the three months
ended March 31, 2016, increased
$5.7 million, or 42.1%, compared to
the same period in 2015. Segment revenue for the three months ended
March 31, 2016, increased
$5.6 million, or 41.0%, compared to
fourth quarter, 2015.
Income from operations for the CICT segment of $3.4 million increased $1.0 million, or 42.3%, for the three months
ended March 31, 2016, compared to the
same period of 2015. Income from operations for the segment
increased $1.4 million, or 73.8%,
compared to fourth quarter, 2015.
First Quarter, 2016 - Financial Metrics
Accounts receivable, net of the allowance for doubtful accounts,
at March 31, 2016, was $45.6 million, compared to $49.2 million at December
31, 2015. The Company's allowance for doubtful accounts was
1.9% of accounts receivable at March 31,
2016.
Depreciation and amortization expense not included in gross
margin, for the quarter ended March 31,
2016, was essentially flat for the three months ended
March 31, 2016, versus the same
period of 2015.
Interest and other expense was essentially flat for the three
months ended March 31, 2016, versus
the same period of 2015.
As noted, after a review of the financial performance in the
Company's Drilling Technologies and Production Technologies
segments, and given the changes in current business markets and
future business opportunities, Flotek determined that a long-lived
asset and inventory impairment charge of approximately $40.4 million was justified. The impairment
charge is based on an assessment of the current business
performance, management's view of future business opportunities
and, as a result, the appropriate valuation of the long-lived
assets and inventory subject to review.
As a result of the impairment charge, Flotek and its lending
group, led by PNC Bank, entered into an Amendment to the Company's
existing credit facility to provide additional financial
flexibility as the Company navigates through the current cyclical
trough.
Under the Amendment, the financial covenants to maintain a fixed
charge coverage ratio and a ratio of funded debt to adjusted EBITDA
were suspended until June 30, 2017.
These financial covenants will be reinstated to require compliance
with these ratios for the twelve-month period ending June 30, 2017, and continuing as of the last day
of each fiscal quarter. The Amendment establishes a requirement to
maintain certain minimum adjusted EBITDA levels for the periods
ending September 30, 2016,
December 31, 2016, and March 31, 2017. In addition, until June 30, 2017, the Company is required to
maintain under its revolving credit facility a minimum monthly
average undrawn availability of $10.0
million, including a continuing undrawn availability of
$5.0 million. The Amendment reduces
the annual limit on capital expenditures during 2016 to
approximately $25 million. The annual
capital expenditure limit returns to approximately $32 million beginning in the fiscal year,
2017.
"We appreciate our long-standing relationship with PNC and their
understanding of our long-term business objectives and willingness
to work with us during these challenging industry times," said
Robert Schmitz, Flotek's Chief
Financial Officer. "Excluding the impairment, the covenants would
not have come into play during the quarter. However, this Amendment
provides Flotek with additional financial flexibility as we
navigate through the cyclical trough without jeopardizing our
liquidity needs in the coming quarters."
Operational and Project Updates
Flotek's plans to complete construction of its new 50,000-plus
square foot Global Research and Innovation headquarters in
Houston remain on-track with
opening scheduled for late summer. The state-of-the-art facility
will bring all of Flotek's research and innovation team under one
roof and provide unprecedented access to the Company's theoretical
and applied research to Flotek's clients.
Flotek's diverse, world-class research team continues to be a
cornerstone of Flotek's success. Not only does our client analysis
effort – including core samples, drill cuttings and fluid analysis
– continue to proliferate, the Company's product research and
innovation group continues to enhance Flotek's existing CnF®
completion chemistries with additional and improved formulations to
meet the specific needs of our clients.
Moreover, Flotek recently introduced a new multi-patented
pressure reduction chemistry technology that the Company believes
should change the way completions are executed. Building on years
of experience in developing customized completion fluids, Flotek's
new, patented PrFTM fluid technology has undergone
commercial validations and is being marketed commercially. As the
next generation of pressure and friction reduction technology,
Flotek has created a more efficacious chemistry that should reduce
overall well costs while improving performance and reducing damage
to production structures caused by legacy friction reducing
fluids.
"Over two years in development and building off our CnF®
experiences, our new Pressure reducing FluidTM,
PrFTM, is the result of the tenacity and creativity of
our exceptional research chemists," said Chisholm. "The
commercialization of this new chemistry – which will contain at
least 25% less polyacrylamide and require up to 50% less volume
than traditional friction reducers – is underway with over a dozen
opportunities across multiple operating basins. In short, while our
enthusiasm is measured as a result of current fundamentals, we
strongly believe we will continue our chemistry success as we focus
on one fundamental question: What chemistry technologies can Flotek
design, create and innovate that give the reservoir a better
opportunity to produce hydrocarbons? That singular focus serves as
the mantra for Flotek chemistry and is the reason we believe so
strongly in our future success."
Flotek's hallmark CnF® completion chemistry continues to gain
heightened acceptance among exploration and production companies in
North America, even in a period of
significantly reduced completion activity.
"Flotek's ability to continue to penetrate new opportunities
while growing relationships with existing clients should be clear
from the relative success seen in our first quarter results," said
Chisholm. "While market headwinds in the first quarter had an
impact on the opportunity set available to Flotek, we continue to
see strong interest in CnF® from both existing and new clients and
are having initial success in our effort to adjust loading levels
higher."
One of the most prolific users of Flotek's completion
chemistries has begun validations using two gallons of CnF®
chemistry per thousand gallons of fluids which, based on both
laboratory and practical experience, should yield even better
production results. Other clients are also working toward similar
levels, which could have a meaningful impact on well performance
and client revenue over time.
In addition, a number of new prospects have emerged in the
Permian Basin, a result of "peer marketing," where existing CnF®
chemistry users have referred prospective clients to Flotek, a
result of successes with CnF® chemistries.
"As positive experiences with CnF® become better known in key
basins, referrals are one of the most powerful and effective
sources of new business and, as importantly, provide strong support
for the efficacy of Flotek's CnF® completion chemistries," added
Chisholm. "As the overall completion market begins to recover – a
view, while cautious, of which we are growing incrementally more
optimistic – those referrals should provide a springboard for
additional business."
Flotek's international business continues to grow, now under the
leadership of Nicolas Lopez who
spent nearly two decades in various leadership positions at the
largest global integrated service company. During the quarter,
Flotek completed its first three wells with CnF® completion
chemistry with Argentina's largest
energy company. The wells are completing evaluation and early
results show improved productivity versus the established
benchmarks. In addition, the Company's CnF® completion chemistries
are being used ubiquitously in acid recipes for new wells by a
major operator in Abu Dhabi.
While Flotek continues to face strong headwinds in its domestic
Drilling Technologies segment, international opportunities continue
to present themselves. For example, the Company's new ProPulse
tools are gaining traction in the Middle
East. In addition, Saudi Aramco showed signs of strength
with Teledrift® in the first quarter, after moderating activity
toward the end of last year.
In South America, Argentina remains an active market with Flotek
motors and Teledrift® products. We remain cautiously optimistic
about increasing market penetration in Argentina throughout the balance of the
year.
Flotek's Production Technologies segment is beginning to gain
traction with both the Company's HYDRA-LIFTTM product
line as well as its new Electric Submersible Pump products. The
Company has installed its first domestic HYDRA-LIFTTM
unit with additional units on order. With greater stroke length
when compared to standard surface pumping units, the
HYDRA-LIFTTM stands to not only provide better
production leverage but do so more efficiently than traditional
surface pumping systems.
Away from the energy sector, Flotek's Consumer and Industrial
Chemistry Technologies segment posted solid results with
year-over-year sales growing over 42% and sequential sales up 41%,
in large part a result of improved pricing and market share.
In anticipation of one of the smallest orange crops in modern
history combined with increased demand for the Company's flavor and
fragrance chemistries, Flotek's Florida Chemical subsidiary built
inventory during the quarter.
"Our decision to grow citrus oil inventories in the quarter was
driven by anticipation of the smallest Florida citrus crop in nearly 50 years and
increased demand for our specialty oils, largely used by the
beverage and other consumer industries," said Josh Snively, Flotek's Executive Vice President
of Research and Innovation and President of Florida Chemical. "We
continue to source citrus oil from all major global growing regions
and have short- and long-term supply and pricing agreements in most
major markets. Such supply diversity and strategic supply chain
management not only provides Flotek with security of supply but
stable and advantageous pricing as well."
"Growth in volumes is the result of increased demand from
existing customers as well as new customers looking for specific
flavor, fragrance and industrial chemistries derived from citrus
oil," added Snively. "We believe Flotek is well positioned to
support our internal and external demand despite the challenges
within the citrus industry which we believe should benefit our
revenue and profits in the coming quarters."
In addition, Florida Chemical has recently joined a consortium
of citrus stakeholders from the scientific, academic and commercial
arenas that is working together to develop solutions to citrus
greening. Florida Chemical – combined with the Flotek chemistry
research team – is actively involved in developing chemistries that
combat greening and will work with the Citrus Research Development
Foundation on a wide range of solutions to address this industry
challenge.
"Florida Chemical has been an integral part of the Florida citrus industry for over seven decades
and has been very involved in many of the innovations in the
business from its inception," concluded Snively. "As the industry
works toward solutions to address the greening challenge, it is
only natural that Florida Chemical – along with Flotek's scientists
– takes a leading role in this process. In a relatively short
period of time, we expect our chemistry research team, along with
the consortium, should make significant progress in addressing the
greening issue."
Overall, while Flotek's oil and gas businesses will continue to
face challenges in the months ahead, the Company believes there are
opportunities for growth ahead.
"There is no question the oil and gas industry is a difficult
business today, certainly more challenging than anytime over the
past two decades," concluded Chisholm. "However, our chemistry
technologies have opportunities to experience growth even with
current market fundamentals, and we will continue to explore all
options to create value in our other oilfield related businesses.
In contrast, in large part due to the leadership of Josh Snively and his team, our non-energy
business is operating at near optimal levels, a position I am
confident will continue in the coming months. In short, I am
confident we have the right people in the right places to help
Flotek not only survive, but grow, in the months and years
ahead."
Update on Regulatory and Data Issues
As previously disclosed, the Securities and Exchange Commission
is conducting a fact-finding
inquiry with which the Company is fully cooperating. There have not
been any allegations of wrongdoing. Various shareholder lawsuits
have also been filed which the Company
will seek to dismiss.
In addition, the special technology committee continues to work
with MHA Petroleum Consultants as they complete their analysis on
the performance of Flotek's CnF® completion chemistries in various
basins. MHA is currently reviewing data in the South Texas and Permian/Delaware Basins with
the results scheduled to be released upon completion of their
analysis. While the Company is eager for this work to be completed,
the Committee has charged MHA with providing complete and accurate
data, a process that is rigorous and time-consuming.
Conference Call Details
Flotek will host a conference call on Wednesday, May 4, 2016, at 7:30 AM CT (8:30 AM
ET) to discuss its operating results for the three months
ended March 31, 2016. To
participate in the call participants should dial 888-222-7894
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 a portfolio of
innovative oilfield technologies, including specialty chemicals and
down-hole drilling and production equipment. 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
filings 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
|
|
|
|
|
|
3/31/2016
|
|
3/31/2015
|
|
|
|
|
|
(in thousands,
except per share data)
|
GAAP Net Income
(Loss) and Reconciliation to Adjusted EBITDA
(Non-GAAP)
|
|
|
|
|
|
|
|
|
Net Income (Loss)
(GAAP)
|
|
|
$ (30,185)
|
|
$ (1,515)
|
|
|
|
|
|
|
|
|
|
Interest
Expense
|
|
|
489
|
|
407
|
|
|
|
|
|
|
|
|
|
Income Tax (Benefit)
Expense
|
|
(16,437)
|
|
(406)
|
|
|
|
|
|
|
|
|
|
Depreciation and
Amortization
|
|
4,289
|
|
4,570
|
|
|
|
|
|
|
|
|
EBITDA
(Non-GAAP)
|
|
|
$ (41,844)
|
|
$ 3,056
|
|
|
|
|
|
|
|
|
|
Impairment of
inventory and long-lived assets
|
40,435
|
|
-
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
(Non-GAAP)
|
|
|
$ (1,409)
|
|
$ 3,056
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Select Non-Cash
Items Impacting Earnings
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Compensation
Expense
|
|
|
$ 2,365
|
|
$ 3,462
|
|
|
|
|
|
|
|
|
|
Less income tax
effect at 35%
|
|
(828)
|
|
(1,212)
|
|
|
|
|
|
|
|
|
|
Stock Compensation
Expense, net of tax
|
$ 1,537
|
|
$ 2,250
|
|
|
|
|
|
|
|
|
Weighted Average
Shares Outstanding (Fully Diluted)
|
54,744
|
|
54,448
|
|
|
|
|
|
|
|
|
Stock Compensation
Expense Per Share (Fully Diluted)
|
$ 0.03
|
|
$ 0.04
|
Flotek Industries,
Inc.
Reconciliation of Earnings Per Share Adjusted For
Impairment
|
|
|
Three Months
Ended
|
|
3/31/2016
|
|
(in thousands,
except per share data)
|
Reconciliation of
Earnings Per Share Adjusted For Impairment
|
|
|
Income (loss)
before income taxes (as reported)
|
$
(46,622)
|
|
|
Impairment of
inventory and long-lived assets
|
40,435
|
|
|
Income (loss)
before taxes (excluding impairment)
|
$
(6,187)
|
|
|
Income tax benefit
(expense)
|
1,573
|
|
|
Net income (loss)
(excluding impairment)
|
$
(4,614)
|
|
|
Earnings (loss)
per common share:
|
|
Basic earnings
(loss) per common share
|
$
(0.08)
|
Diluted earnings
(loss) per common share
|
$
(0.08)
|
|
|
Weighted average
common shares:
|
|
Weighted average
common shares used in computing basic earnings (loss) per common
share
|
54,744
|
Weighted average
common shares used in computing diluted earnings (loss) per common
share
|
54,744
|
Flotek Industries,
Inc.
Unaudited Consolidated Balance Sheets
|
|
|
3/31/2016
|
|
12/31/2015
|
ASSETS
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$ 2,480
|
|
$ 2,208
|
Accounts receivable,
net of allowance for doubtful accounts of $874 and $1,189 at March
31, 2016 and December 31, 2015, respectively
|
45,631
|
|
49,197
|
Inventories,
net
|
81,084
|
|
85,492
|
Income taxes
receivable
|
14,948
|
|
4,700
|
Deferred tax assets,
net
|
4,139
|
|
2,649
|
Other current
assets
|
6,148
|
|
7,496
|
Total current
assets
|
154,430
|
|
151,742
|
Property and
equipment, net
|
78,337
|
|
91,913
|
Goodwill
|
72,820
|
|
72,820
|
Deferred tax assets,
net
|
3
|
|
17,229
|
Other intangible
assets, net
|
58,992
|
|
69,386
|
TOTAL
ASSETS
|
$ 364,582
|
|
$ 403,090
|
LIABILITIES AND
EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$ 25,244
|
|
$ 19,444
|
Accrued
liabilities
|
9,676
|
|
12,894
|
Income taxes
payable
|
197
|
|
2,263
|
Interest
payable
|
141
|
|
111
|
Current portion of
long-term debt
|
44,765
|
|
32,291
|
Total current
liabilities
|
80,023
|
|
67,003
|
Long-term debt, less
current portion
|
16,470
|
|
18,255
|
Deferred tax
liabilities, net
|
1,755
|
|
23,823
|
Total
liabilities
|
98,248
|
|
109,081
|
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; 56,715,304 shares issued
and 53,726,328 shares outstanding at March 31, 2016; 56,220,214
shares issued and 53,536,101 shares outstanding at
December 31, 2015
|
6
|
|
6
|
Additional paid-in
capital
|
275,797
|
|
273,451
|
Accumulated other
comprehensive income (loss)
|
(919)
|
|
(1,237)
|
Retained
earnings
|
9,115
|
|
39,300
|
Treasury stock, at
cost; 1,850,173 and 1,784,897 shares at March 31, 2016 and
December 31, 2015, respectively
|
(18,023)
|
|
(17,869)
|
Flotek Industries,
Inc. stockholders' equity
|
265,976
|
|
293,651
|
Noncontrolling
interests
|
358
|
|
358
|
Total
equity
|
266,334
|
|
294,009
|
TOTAL LIABILITIES
AND EQUITY
|
$ 364,582
|
|
$ 403,090
|
Flotek Industries,
Inc.
Unaudited Consolidated Statements of Operations
|
|
|
Three Months
Ended
|
|
3/31/2016
|
|
3/31/2015
|
|
(in thousands,
except per share data)
|
Revenue
|
$ 72,289
|
|
$ 82,373
|
Cost of
revenue
|
47,360
|
|
55,846
|
Gross
profit
|
24,929
|
|
26,527
|
Expenses:
|
|
|
|
Selling, general and
administrative
|
25,453
|
|
23,568
|
Depreciation and
amortization
|
2,798
|
|
2,676
|
Research and
development
|
2,256
|
|
1,572
|
Impairment of
inventory and long-lived assets
|
40,435
|
|
-
|
Total
expenses
|
70,942
|
|
27,816
|
Loss from
operations
|
(46,013)
|
|
(1,289)
|
Other
expense
|
|
|
|
Interest
expense
|
(489)
|
|
(407)
|
Other expense,
net
|
(120)
|
|
(225)
|
Total other
expense
|
(609)
|
|
(632)
|
Loss before income
taxes
|
(46,622)
|
|
(1,921)
|
Income tax
benefit
|
16,437
|
|
406
|
Net
loss
|
$ (30,185)
|
|
$ (1,515)
|
|
|
|
|
Loss per common
share
|
|
|
|
Basic loss per common
share
|
$ (0.55)
|
|
$ (0.03)
|
Diluted loss per
common share
|
$ (0.55)
|
|
$ (0.03)
|
Weighted average
common shares:
|
|
|
|
Weighted average
common shares used in computing basic loss per common
share
|
54,744
|
|
54,448
|
Weighted average
common shares used in computing diluted loss per common
share
|
54,744
|
|
54,448
|
Flotek Industries,
Inc.
Unaudited Consolidated Statements of Cash Flows
|
|
|
Quarter
Ended
|
|
3/31/2016
|
|
3/31/2015
|
|
|
Cash flows from
operating activities:
|
|
|
|
Net loss
|
$ (30,185)
|
|
$ (1,515)
|
Adjustments to
reconcile net loss to net cash (used in) provided by operating
activities:
|
|
|
|
Impairment of
inventory and long-lived assets
|
40,435
|
|
-
|
Depreciation and
amortization
|
4,289
|
|
4,570
|
Amortization of
deferred financing costs
|
87
|
|
86
|
Gain on sale of
assets
|
(468)
|
|
(1,223)
|
Stock compensation
expense
|
2,365
|
|
3,462
|
Deferred income tax
benefit
|
(6,898)
|
|
(2,367)
|
Reduction in (excess)
tax benefit related to share-based awards
|
365
|
|
(87)
|
Changes in current
assets and liabilities:
|
|
|
|
Accounts receivable,
net
|
3,099
|
|
22,484
|
Inventories
|
(11,984)
|
|
(12,065)
|
Income taxes
receivable
|
(10,308)
|
|
-
|
Other current
assets
|
242
|
|
644
|
Accounts
payable
|
6,274
|
|
(4,618)
|
Accrued
liabilities
|
(2,078)
|
|
(3,774)
|
Income taxes
payable
|
(1,817)
|
|
618
|
Interest
payable
|
30
|
|
13
|
Net cash (used in)
provided by operating activities
|
(6,552)
|
|
6,228
|
Cash flows from
investing activities:
|
|
|
|
Capital
expenditures
|
(4,213)
|
|
(5,590)
|
Proceeds from sale of
assets
|
593
|
|
1,315
|
Payments for
acquisitions, net of cash acquired
|
-
|
|
(1,250)
|
Purchase of patents
and other intangible assets
|
(132)
|
|
(115)
|
Net cash used in
investing activities
|
(3,752)
|
|
(5,640)
|
Cash flows from
financing activities:
|
|
|
|
Repayments of
indebtedness
|
(1,785)
|
|
(4,786)
|
Borrowings on
revolving credit facility
|
96,000
|
|
112,151
|
Repayments on
revolving credit facility
|
(83,526)
|
|
(103,376)
|
Reduction in (excess)
tax benefit related to share-based awards
|
(365)
|
|
87
|
Purchase of treasury
stock related to share-based awards
|
(154)
|
|
(1,055)
|
Proceeds from sale of
common stock
|
212
|
|
256
|
Repurchase of common
stock
|
-
|
|
(2,651)
|
Proceeds from
exercise of stock options
|
134
|
|
22
|
Proceeds from
noncontrolling interest
|
-
|
|
7
|
Net cash provided by
financing activities
|
10,516
|
|
655
|
Effect of changes in
exchange rates on cash and cash equivalents
|
60
|
|
(10)
|
Net increase in
cash and cash equivalents
|
272
|
|
1,233
|
Cash and cash
equivalents at the beginning of period
|
2,208
|
|
1,266
|
Cash and cash
equivalents at the end of period
|
$ 2,480
|
|
$ 2,499
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/flotek-industries-inc-announces-first-quarter-2016-financial-and-operating-results-and-conference-call-information-300262107.html
SOURCE Flotek Industries, Inc.