HOUSTON, Nov. 2, 2016 /PRNewswire/ -- Flotek
Industries, Inc. ("Flotek" or the "Company") (FTK) today
announced results for the three months ended September 30, 2016.
As reported on Form 10-Q filed with the U.S. Securities and
Exchange Commission, Flotek reported revenue for the three months
ended September 30, 2016, of
$73.7 million, a decrease of
$14.3 million, or 16.2%, compared to
the same period of 2015. The decrease in revenue was driven by the
continued decline in drilling activity, as indicated by the 43.2%
reduction in average North American rig count for the three months
ended September 30, 2016, versus the
same period of 2015. Sequentially, revenue increased
$1.4 million, or 1.9%, when compared
to the second quarter, 2016.
According to data collected by the U.S. Energy Information
Administration ("EIA"), completions in the seven most prolific
areas in the lower 48 states decreased 41.4% and 48.0% for the
three and nine months ended September 30,
2016, respectively, when compared to the same periods of
2015. Sequentially, completions decreased 1.3% when compared to the
second quarter of 2016.
Flotek reported a Loss from Operations of $4.3 million for the quarter ended September 30, 2016.
The Company recorded an income tax benefit of $2.2 million, for the three months ended
September 30, 2016.
For the quarter ended September 30,
2016, the Company reported a net loss of $2.7 million or $(0.05) per common share (fully diluted),
compared to net income of $2.0
million, or $0.04 per common
share (fully diluted) in the third quarter of 2015.
Adjusted Earnings Before Interest, Taxes, Depreciation and
Amortization, or adjusted EBITDA (a non-GAAP measure of financial
performance), for the quarter ended September 30, 2016, was $(0.8) million, compared to $7.3 million for the quarter ended September 30, 2015.
For the quarter ended September 30,
2016, Flotek's non-cash share-based compensation expense was
approximately $3.7 million
($2.4 million, net of tax at
35%). For the quarter ended September
30, 2015, non-cash share-based compensation was $3.6 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. Management believes that
adjusted EBITDA provides useful information to investors to assess
and understand operating performance.
Consolidated gross margin decreased to 34.4% for the quarter
ended September 30, 2016, from 35.5%
for the corresponding 2015 period. However, consolidated gross
margins increased sequentially, up from 33.1% for the quarter ended
June 30, 2016.
"The ongoing search for stability in oilfield activity continued
in the third quarter as overall drilling and completion activity
remained choppy in the July through September period," said
John Chisholm, Flotek's Chairman,
President and Chief Executive Officer. "While we saw a slow but
steady improvement in business from the beginning to the end of the
quarter, we remain guarded in our assessment of overall oilfield
activity. That said, we continued to hold our own in energy
chemistry with new opportunities which allowed us to hold our core
CnF® business steady even as a large client experienced a transient
decrease in completion activity. Moreover, we did experience modest
improvement in our drilling technologies business, the result of
continued expense rationalization, moderate market share growth in
our U.S. operations and ongoing international opportunities."
"While a handful of headwinds – including holidays and continued
oil price volatility – could impact the fourth quarter, we continue
to see nascent signs of new business development into the New Year
as clients and prospects are adjusting to a new pricing reality and
search for ways to improve the productivity of each and every new
well, enhancing the potential opportunities for expansion of the
use of CnF® in key basins such as the Permian," added Chisholm.
"Moreover, we are optimistic that our expanded chemistry offerings
and Prescriptive Chemistry Management™ program, or PCM, will expand
our reach to new clients and geographies as we enter the New
Year."
"That said, predicting the exact direction of business activity
is always difficult and is made even more so by the most pronounced
downturn in the industry in my career," added Chisholm. "Given the
continued uncertainty and our desire to maximize our flexibility,
we are pleased to have renegotiated our credit facility with PNC
Bank. We believe the new facility provides more than adequate
flexibility into the foreseeable future – including extending the
maturity into 2020 – as well as streamlines the credit with PNC as
the sole lender. PNC has been a great partner and continues to be
willing to work with Flotek throughout the cycle."
"While we still have work to do, we are making progress in our
review of strategic opportunities for our non-chemistry energy
businesses and have advanced discussions with parties about
possible options. We remain encouraged by the interest and will
look to push to a resolution in early 2017."
"Nothing is likely to showcase Flotek's future more than our new
Global Research and Innovation Center, which opened in the third
quarter," concluded Chisholm. "Our focus on client collaboration
centered on addressing their most arduous challenges will fit
nicely with our new, state-of-the art facility, which we also hope
to use as an industry-wide focal point for advanced continuing
education and interactive learning."
"Make no mistake, 2016 has presented challenges to Flotek and
the industry that are greater than most expected. However, even
with the continued challenges in the short-term environment, we
continue to look ahead optimistically, knowing that such challenges
present longer-term opportunities," added Chisholm. "We look ahead
into 2017 with a sense of optimism that, as the market finds its
footing, Flotek is well positioned to expand its leadership in
oilfield chemistry technology, both here and in new global
markets."
A complete review of the Company's third 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.
Third Quarter 2016 – Segment Results
Energy Chemistry Technologies segment reported revenue of
$45.0 million for the three months
ended September 30, 2016. Energy
Chemistry Technologies revenue for the three months ended
September 30, 2016, decreased
$15.2 million, or 25.2%, compared to
the same period in 2015. Energy Chemistry Technologies
revenue for the nine months ended September
30, 2016, decreased $30.2
million, or 18.5%, versus the same period in 2015.
Segment revenue for the three months ended September 30, 2016, increased $1.6 million, or 3.8%, compared to second
quarter, 2016.
Income from operations of $6.2
million for the Energy Chemistry Technologies segment
decreased $8.1 million, or 56.6%, for
the three months ended September 30,
2016, compared to the same period of 2015. Income from
operations for the Energy Chemistry segment for the nine months
ended September 30, 2016, decreased
$11.2 million, or 34.0%, compared to
same period of 2015. Income from operations for the segment
decreased $1.4 million, or 18.3%,
compared to second quarter, 2016.
Consumer and Industrial Chemistry Technologies ("CICT") revenue
of $19.3 million for the three months
ended September 30, 2016, increased
$5.4 million, or 39.2%, compared to
the same period in 2015. CICT revenue for the nine months ended
September 30, 2016, increased
$16.3 million, or 38.1%, versus the
same period in 2015. Segment revenue for the three months
ended September 30, 2016, decreased
$1.4 million, or 6.7%, compared to
second quarter, 2016.
Income from operations for the CICT segment of $2.4 million for the three months ended
September 30, 2016, increased
$0.7 million, or 40.8%, compared to
the same period of 2015. Income from operations for the CICT
segment for the nine months ended September
30, 2016, increased $1.7
million, or 25.3%, compared to same period of 2015.
Income from operations for the segment decreased $0.3 million compared to second quarter,
2016.
Drilling Technologies reported revenue of $7.2 million for the three months ended
September 30, 2016, a decrease of
$3.6 million, or 33.4%, relative to
the same period in 2015. Drilling Technologies revenue for
the nine months ended September 30,
2016, decreased $21.8 million,
or 52.1%, versus the same period in 2015. Segment revenue for
the three months ended September 30,
2016, increased $0.8 million,
or 13.0%, compared to second quarter, 2016.
Loss from operations for the three months ended
September 30, 2016, improved by
$1.7 million versus the same period
of 2015, on a 33.4% revenue decrease, due to a 33% year-over- year
headcount reduction, (and approximately 50% from peak personnel
levels) field location closures, and other operational cost
improvements. Loss from operations for the nine months ended
September 30, 2016, increased by $18.9
million versus the same period of 2015, primarily resulting
from the second quarter 2015 and first quarter 2016 impairment
charges. Loss from operations, excluding impairments, for the nine
months ended September 30, 2016,
increased by $2.0 million, versus the
same period of 2015, primarily due to reductions in revenue and
pricing pressure that resulted in customer price concessions,
partially offset by cost reductions throughout the year.
Revenue for the Production Technologies segment of $2.1 million for the three months ended
September 30, 2016, decreased by
$0.9 million, or 30.4%, from the same
period in 2015. Production Technologies revenue for the nine months
ended September 30, 2016, decreased
$3.4 million, or 35.8%, versus the
same period in 2015. Segment revenue for the three months
ended September 30, 2016, increased
$0.3 million, or 14.8%, compared to
second quarter, 2016.
Loss from operations increased $0.3
million and $4.9 million for
the three and nine months ended September 30, 2016,
respectively, versus the same periods in 2015. Loss from
operations, excluding impairments, increased by $1.7 million for the nine months ended
September 30, 2016, versus the same period in 2015. These
increased losses were due to lower revenue volume and increased
costs as the segment continues to market and pursue new product
strategies.
Third Quarter, 2016 - Financial Metrics
Accounts receivable, net of the allowance for doubtful accounts,
at September 30, 2016, was
$53.7 million, compared to
$49.2 million at December 31, 2015. The Company's allowance for
doubtful accounts was 1.8% of accounts receivable at September 30, 2016.
Depreciation and amortization expense not included in gross
margin, for the quarter ended September 30,
2016, decreased $0.1 million
versus the same period of 2015.
Interest and other expense for the three months ended
September 30, 2016, increased
$0.3 million versus the same period
of 2015.
Operational and Project Updates
As noted, Flotek and PNC Bank have reached an agreement to
change the Company's credit facility, providing $65 million in total credit and extending the
maturity until May, 2020. These changes provide Flotek with
additional financial flexibility as well as a streamlined lending
and administration process.
"PNC's willingness to work with us and provide a holistic credit
facility that meets our financial and strategic needs is an
indication of the quality of our lending partner as well as the
relationship we have built over the past five years," said
Chisholm. "While the reality of oilfield credit risk does
incrementally increase our borrowing costs, the terms of this
restated facility remain favorable relative to many of our oilfield
brethren, especially given that our ongoing interest rates remain
unchanged. We appreciate PNC's willingness to find ways to continue
to meet our needs, even as credit in our industry continues to
tighten."
Flotek's recent acquisition of International Polymerics, Inc.
("IPI") has generated meaningful interest from existing and
prospective clients. The Company has made progress in transferring
IPI into the Flotek systems which will allow for near-complete
sales, operational and financial integration in the coming months.
In addition, IPI's Monahans, Texas
facility – in the heart of the Permian Basin – is being
transitioned to handle the full suite of Flotek chemistry logistics
which should provide an additional competitive advantage as Flotek
continues to focus on Permian Basin growth.
"The IPI purchase should provide similar benefits to the
acquisition of Florida Chemical as we grow our operational and
logistics footprint in the Permian Basin," said Chisholm. "In
addition, the opportunities to offer both natural polymer and slick
water delivery systems to our clients – in combination with CnF® -
should expand our opportunities with both existing and prospective
clients, especially as the market finds its footing. While we
believe there are immediate strategic benefits resulting from IPI's
assets, the long-term benefits should be even more compelling as we
continue the development of our Prescriptive Chemistry Management™
service."
On the international front, Flotek continues to expand its
reach, most recently in China. The
Company announced today it has signed a cooperative agreement with
Anton Oilfield Services Group, a Beijing-based publicly-traded, integrated
oilfield services provider with primary exposure in China as well as other global markets in the
Middle East, Central Asia and the Americas. Under the terms
of the Agreement, Flotek will provide Anton with exclusive rights to use certain
Flotek chemistry in China and
other key Anton markets in
exchange for certain purchase commitments. In addition,
Anton has appointed John Chisholm as a non-executive director, an
appointment that has been approved by the Flotek Board of
Directors.
"We are pleased that a Company with Anton's reach has selected Flotek as a
strategic partner, especially in one of the key global hydrocarbon
growth markets outside of North
America," said Chisholm. "Our discussions quickly led me to
understand that the cultures of Anton and Flotek fit well together, especially
given Anton's desire to advance
oilfield technology to the next level in China and other Eastern Hemisphere markets.
Anton's belief in the efficacy of
Flotek's chemistry and their commitment to work side-by-side to
promote Flotek technology in the Eastern Hemisphere should be a key
component of our growth in Asia
and beyond. I am honored to be asked to join Anton's Board, another indication of the level
of commitment to cooperation between our companies that, I believe,
will benefit Flotek in the coming months and for years to come."
Flotek's Argentinian initiative continues to progress with teams
from Flotek and YPF scheduled to meet again this month to review
results from the initial pilot wells using CnF® chemistry and
develop well design for the next series of wells to be drilled in
the New Year. In addition, Flotek and Y-TEC, the technology
arm of YPF, continue to work on plans for broader collaboration on
both oilfield and industrial chemistry applications.
"We continue to be pleased with the progress in Argentina and also recognize that we are in
the early stages of the development of a long-term partnership with
Y-TEC and YPF," added Chisholm. "International relationships
require time and patience to develop, but it is hard not to be
enthusiastic given our early experiences."
On the non-chemistry front, international Teledrift®
activity continues to show steady progress with revenues of
approximately $2.9 million in the
third quarter versus $2.0 million in
the previous quarter.
"While the process of exploring strategic options for our
non-chemistry energy businesses is progressing, we also continue to
work hard to create a structure for those businesses that minimize
costs and maximize opportunities," added Chisholm. "We believe that
focus – in the face of incredible headwinds – not only serves our
stakeholders well but exemplifies the value of the professionals
who lead these business efforts. The reduction in costs and
operating improvements should not be overlooked."
Flotek's Consumer and Industrial Chemistry Technologies posted
another solid quarter, with year-over-year sales up 39.2% compared
to same period in 2015. CICT's nine month results for
revenue, operating income and EBITDA are all at record nine month
highs since Flotek's acquisition of Florida Chemical Company in May
2013. CICT continues to experience strong demand for its
flavor compounds, which could provide unique growth opportunities
for the next several years. As such, Flotek is considering
expanding capabilities to meet growing client demand, including the
recent addition of Dr. David
McKeithan, a veteran of citrus chemistry and a former
client, who will further our research and innovation efforts in the
flavor and fragrance arena.
"Our CICT segment has provided Flotek with important
diversification during this protracted downturn in the energy
market," said Josh Snively, Flotek's
Executive Vice President of Research and Innovation and President
of Florida Chemical. "CICT's internal value goes beyond the
segment's operating performance, as CICT provides strategic
procurement terms for internal raw material needs, a key benefit of
the Florida Chemical acquisition. As current citrus prices
remain firm and above historic levels, we believe Flotek is well
positioned to meet both internal and external demand with
competitive pricing advantages."
Concluding Thoughts
On a personnel note, Rob Schmitz
– Flotek's Chief Financial Officer – announced that he will retire
in the first quarter of 2017, after completion of Flotek's year-end
close and the Company's annual report filing. The Company will
begin transition planning immediately with Chief Financial Officer
Emeritus Rich Walton leading the
process.
"Rob arrived at Flotek at a critical point in the Company's
evolution and was an integral part – along with Rich Walton – in developing the accounting and
financial infrastructure that allowed Flotek to accelerate its
regulatory filings, improve its financial transparency and develop
an accounting management program that continues to provide numerous
internal leadership and external messaging benefits," said
John Chisholm. "Rob's leadership and
dedication to excellence has been a key component of Flotek's
success and, in his absence, will remain a hallmark of Flotek's
finance and accounting systems. He will be missed."
"Finally, there is little doubt that the last two years have
been an arduous journey for those in the oilfield," concluded
Chisholm. "However, I sincerely believe that the Flotek team has
pressed forward with a sense of mission and – while our results
have been impacted by the cyclical quagmire – we still have a lot
to be thankful for and proud of. Consider this: In the first nine
months of 2016 we have nearly equaled the total volume of CnF® sold
in all of 2014 with only about one-third the total completion
activity. For Flotek, that is a sign of progress, a testament to
the focus of our people and the result of a tireless focus on
execution. We continue to believe we are among the best positioned
companies in the oilfield to compete through the trough and emerge
strong as we enter the New Year."
Update on Legal Matters
As previously disclosed, the Securities and Exchange Commission
is conducting a fact-finding inquiry with which the Company is
fully cooperating. Various shareholder lawsuits have also
been filed which the Company is seeking to dismiss. The
Company will provide updates as appropriate but is unable to
predict the timing of such updates or outcomes.
Conference Call Details
Flotek will host a conference call on Thursday, November 3, 2016, at 7:30 AM CDT (8:30 AM
EDT) to discuss its operating results for the three months
ended September 30, 2016. To
participate in the call participants should dial 800-701-9749
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. The Company also serves commercial and industrial
markets with a portfolio of diverse chemistry technologies.
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
|
|
Nine Months
Ended
|
|
|
|
|
|
9/30/2016
|
|
9/30/2015
|
|
9/30/2016
|
|
9/30/2015
|
|
|
|
|
|
(in thousands,
except per share data)
|
GAAP Net Income
(Loss) and Reconciliation to Adjusted EBITDA
(Non-GAAP)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss)
(GAAP)
|
|
|
$
(2,746)
|
|
$
1,975
|
|
$ (35,211)
|
|
$ (12,087)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
Expense
|
|
|
611
|
|
476
|
|
1,811
|
|
1,303
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Tax (Benefit)
Expense
|
|
(2,209)
|
|
400
|
|
(19,840)
|
|
(6,490)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
Amortization
|
|
3,549
|
|
4,433
|
|
11,069
|
|
13,613
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
(Non-GAAP)
|
|
|
$
(795)
|
|
$
7,284
|
|
$ (42,171)
|
|
$
(3,661)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment of
inventory and long-lived assets
|
-
|
|
-
|
|
40,435
|
|
20,372
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
(Non-GAAP)
|
|
|
$
(795)
|
|
$
7,284
|
|
$
(1,736)
|
|
$
16,711
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Select Non-Cash
Items Impacting Earnings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Compensation
Expense
|
|
|
$
3,676
|
|
$
3,569
|
|
$
9,362
|
|
$
10,479
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less income tax
effect at 35%
|
|
(1,287)
|
|
(1,249)
|
|
(3,277)
|
|
(3,668)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Compensation
Expense, net of tax
|
$
2,389
|
|
$
2,320
|
|
$
6,085
|
|
$
6,811
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average
Shares Outstanding (Fully Diluted)
|
56,899
|
|
54,947
|
|
55,523
|
|
54,430
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Compensation
Expense Per Share (Fully Diluted)
|
$
0.04
|
|
$
0.04
|
|
$
0.11
|
|
$
0.13
|
*Management believes that adjusted EBITDA for the three and nine
months ended September 30, 2016, and
September 30, 2015, is useful to
investors to assess and understand operating performance,
especially when comparing those results with previous and
subsequent periods. Management views the impairment of
inventory and long-lived assets to be outside of the Company's
normal operating results. Management analyzes operating
results without the impact of this item as an indicator of
performance, to identify underlying trends in the business and to
establish operational goals.
Flotek Industries,
Inc.
|
Reconciliation of
Earnings Per Share Adjusted For Impairment
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
9/30/2016
|
9/30/2015
|
|
9/30/2016
|
9/30/2015
|
|
(in thousands,
except per share data)
|
Reconciliation of
Earnings Per Share Adjusted For Impairment
|
|
|
|
|
|
|
|
|
|
|
Income (loss)
before income taxes (as reported)
|
$
(4,955)
|
$
2,375
|
|
$
(55,051)
|
$
(18,577)
|
|
|
|
|
|
|
Impairment of
inventory and long-lived assets
|
-
|
-
|
|
40,435
|
20,372
|
|
|
|
|
|
|
Income (loss)
before taxes (excluding impairment)
|
$
(4,955)
|
$
2,375
|
|
$
(14,616)
|
$
1,795
|
|
|
|
|
|
|
Income tax benefit
(expense)
|
2,209
|
(400)
|
|
4,975
|
(249)
|
|
|
|
|
|
|
Net income (loss)
(excluding impairment)
|
$
(2,746)
|
$
1,975
|
|
$
(9,641)
|
$
1,546
|
|
|
|
|
|
|
Earnings (loss)
per common share:
|
|
|
|
|
|
Basic earnings
(loss) per common share
|
$
(0.05)
|
$
0.04
|
|
$
(0.17)
|
$
0.03
|
Diluted earnings
(loss) per common share
|
$
(0.05)
|
$
0.04
|
|
$
(0.17)
|
$
0.03
|
|
|
|
|
|
|
Weighted average
common shares:
|
|
|
|
|
|
Weighted average common shares used in
computing basic earnings (loss) per common share
|
56,899
|
54,578
|
|
55,523
|
54,430
|
Weighted average common shares used in
computing diluted earnings (loss) per common
share
|
56,899
|
54,947
|
|
55,523
|
55,035
|
Flotek Industries,
Inc.
|
Unaudited
Consolidated Balance Sheets
|
|
|
9/30/2016
|
|
12/31/2015
|
|
(in thousands,
except share data)
|
ASSETS
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
3,474
|
|
$
2,208
|
Accounts receivable, net of allowance for doubtful
accounts of $1,003 and $1,189 at September 30, 2016 and
December 31, 2015, respectively
|
53,652
|
|
49,197
|
Inventories
|
73,986
|
|
85,492
|
Income taxes
receivable
|
18,192
|
|
4,700
|
Deferred tax assets,
net
|
2,352
|
|
2,649
|
Other current
assets
|
9,099
|
|
7,496
|
Total current
assets
|
160,755
|
|
151,742
|
Property and
equipment, net
|
89,154
|
|
91,913
|
Goodwill
|
73,682
|
|
72,820
|
Deferred tax assets,
net
|
-
|
|
17,229
|
Other intangible
assets, net
|
58,949
|
|
69,386
|
TOTAL
ASSETS
|
$ 382,540
|
|
$
403,090
|
LIABILITIES AND
EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
26,072
|
|
$
19,444
|
Accrued
liabilities
|
11,826
|
|
12,894
|
Income taxes
payable
|
-
|
|
2,263
|
Interest
payable
|
156
|
|
111
|
Current portion of
long-term debt
|
34,562
|
|
32,291
|
Total current
liabilities
|
72,616
|
|
67,003
|
Long-term debt, less
current portion
|
8,000
|
|
18,255
|
Deferred tax
liabilities, net
|
1,205
|
|
23,823
|
Total
liabilities
|
81,821
|
|
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; 59,604,669 shares
issued and 56,698,874 shares outstanding at September 30,
2016; 56,220,214 shares issued and 53,536,101 shares outstanding
at December 31, 2015
|
6
|
|
6
|
Additional paid-in
capital
|
316,091
|
|
273,451
|
Accumulated other
comprehensive income (loss)
|
(981)
|
|
(1,237)
|
Retained
earnings
|
4,089
|
|
39,300
|
Treasury stock, at cost; 1,893,612 and 1,784,897
shares at September 30, 2016 and December 31,
2015, respectively
|
(18,844)
|
|
(17,869)
|
Flotek Industries,
Inc. stockholders' equity
|
300,361
|
|
293,651
|
Noncontrolling
interests
|
358
|
|
358
|
Total
equity
|
300,719
|
|
294,009
|
TOTAL LIABILITIES
AND EQUITY
|
$ 382,540
|
|
$
403,090
|
Flotek Industries,
Inc.
|
Unaudited
Consolidated Statements of Operations
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
9/30/2016
|
|
9/30/2015
|
|
9/30/2016
|
|
9/30/2015
|
|
(in thousands,
except per share data)
|
|
(in thousands,
except per share data)
|
Revenue
|
$
73,679
|
|
$
87,942
|
|
$ 218,287
|
|
$ 257,346
|
Cost of
revenue
|
48,313
|
|
56,715
|
|
144,071
|
|
170,340
|
Gross
profit
|
25,366
|
|
31,227
|
|
74,216
|
|
87,006
|
Expenses:
|
|
|
|
|
|
|
|
Selling, general and
administrative
|
24,424
|
|
23,634
|
|
71,859
|
|
70,223
|
Depreciation and
amortization
|
2,706
|
|
2,785
|
|
7,896
|
|
8,258
|
Research and
development
|
2,531
|
|
2,031
|
|
7,059
|
|
5,273
|
Impairment of
inventory and long-lived assets
|
-
|
|
-
|
|
40,435
|
|
20,372
|
Total
expenses
|
29,661
|
|
28,450
|
|
127,249
|
|
104,126
|
(Loss) income from
operations
|
(4,295)
|
|
2,777
|
|
(53,033)
|
|
(17,120)
|
Other (expense)
income
|
|
|
|
|
|
|
|
Interest
expense
|
(611)
|
|
(476)
|
|
(1,811)
|
|
(1,303)
|
Other (expense)
income, net
|
(49)
|
|
74
|
|
(207)
|
|
(154)
|
Total other
expense
|
(660)
|
|
(402)
|
|
(2,018)
|
|
(1,457)
|
(Loss) income
before income taxes
|
(4,955)
|
|
2,375
|
|
(55,051)
|
|
(18,577)
|
Income tax benefit
(expense)
|
2,209
|
|
(400)
|
|
19,840
|
|
6,490
|
Net (loss)
income
|
$
(2,746)
|
|
$
1,975
|
|
$ (35,211)
|
|
$ (12,087)
|
|
|
|
|
|
|
|
|
(Loss) earnings
per common share
|
|
|
|
|
|
|
|
Basic (loss) earnings
per common share
|
$
(0.05)
|
|
$
0.04
|
|
$
(0.63)
|
|
$
(0.22)
|
Diluted (loss)
earnings per common share
|
$
(0.05)
|
|
$
0.04
|
|
$
(0.63)
|
|
$
(0.22)
|
Weighted average
common shares:
|
|
|
|
|
|
|
|
Weighted average common shares used in
computing basic (loss) per common share
|
56,899
|
|
54,578
|
|
55,523
|
|
54,430
|
Weighted average common shares used in
computing diluted (loss) per common share
|
56,899
|
|
54,947
|
|
55,523
|
|
54,430
|
Flotek Industries,
Inc.
|
Unaudited
Consolidated Statements of Cash Flows
|
|
|
Nine Months
Ended
|
|
9/30/2016
|
|
9/30/2015
|
|
(in
thousands)
|
Cash flows from
operating activities:
|
|
|
|
Net loss
|
$ (35,211)
|
|
$ (12,087)
|
Adjustments to
reconcile net loss to net cash (used in) provided by operating
activities:
|
|
|
|
Impairment of
inventory and long-lived assets
|
40,435
|
|
20,372
|
Depreciation and
amortization
|
11,069
|
|
13,613
|
Amortization of
deferred financing costs
|
308
|
|
260
|
Gain on sale of
assets
|
(1,094)
|
|
(3,010)
|
Stock compensation
expense
|
9,479
|
|
10,479
|
Deferred income tax
benefit
|
(6,309)
|
|
(8,696)
|
Reduction in (excess)
tax benefit related to share-based awards
|
883
|
|
(2,154)
|
Changes in current
assets and liabilities:
|
|
|
|
Accounts receivable,
net
|
(3,744)
|
|
26,276
|
Inventories
|
(4,108)
|
|
(16,456)
|
Income taxes
receivable
|
(13,687)
|
|
(3,104)
|
Other current
assets
|
(1,076)
|
|
1,402
|
Accounts
payable
|
6,417
|
|
(11,080)
|
Accrued
liabilities
|
(2,515)
|
|
(1,462)
|
Income taxes
payable
|
(1,807)
|
|
2,943
|
Interest
payable
|
45
|
|
-
|
Net cash (used in)
provided by operating activities
|
(915)
|
|
17,296
|
Cash flows from
investing activities:
|
|
|
|
Capital
expenditures
|
(11,621)
|
|
(11,078)
|
Proceeds from sale of
assets
|
1,201
|
|
3,225
|
Payments for
acquisition, net of cash acquired
|
(7,863)
|
|
(1,250)
|
Purchase of patents
and other intangible assets
|
(396)
|
|
(434)
|
Net cash used in
investing activities
|
(18,679)
|
|
(9,537)
|
Cash flows from
financing activities:
|
|
|
|
Repayments of
indebtedness
|
(15,398)
|
|
(8,357)
|
Borrowings on
revolving credit facility
|
256,738
|
|
291,916
|
Repayments on
revolving credit facility
|
(249,324)
|
|
(279,832)
|
Debt issuance
costs
|
(147)
|
|
(10)
|
(Reduction in) excess
tax benefit related to share-based awards
|
(883)
|
|
2,154
|
Purchase of treasury
stock related to share-based awards
|
(925)
|
|
(5,376)
|
Proceeds from sale of
common stock
|
30,610
|
|
779
|
Repurchase of common
stock
|
-
|
|
(7,299)
|
Proceeds from
exercise of stock options
|
134
|
|
22
|
Proceeds from
noncontrolling interest
|
-
|
|
7
|
Net cash provided by
(used in) financing activities
|
20,805
|
|
(5,996)
|
Effect of changes in
exchange rates on cash and cash equivalents
|
55
|
|
(31)
|
Net increase in
cash and cash equivalents
|
1,266
|
|
1,732
|
Cash and cash
equivalents at the beginning of period
|
2,208
|
|
1,266
|
Cash and cash
equivalents at the end of period
|
$
3,474
|
|
$
2,998
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/flotek-industries-inc-announces-third-quarter-2016-financial-and-operating-results-and-conference-call-information-300356179.html
SOURCE Flotek Industries, Inc.