HOUSTON, Aug. 7, 2018 /PRNewswire/ -- Flotek
Industries, Inc. ("Flotek" or the "Company") (NYSE: FTK) today
announced results for the three and six months ended June 30, 2018.
"The second quarter was difficult and appears to mark a trough
period in our Company's financial and operating performance; it
was, however, also dynamic with positive implications on the
future. After a challenging start to the year, we experienced
abrupt shifts in one of our key channels-to-market while
simultaneously managing through the loss of our largest client due
to cost pressures. Meanwhile, the citrus market faced
unprecedented disruption in the past few periods due to disease and
hurricanes, further testing our resolve. We recognize that
these challenges have been disappointing for our stakeholders, but
are being met and are being addressed by our leadership team, Board
and employees," said John Chisholm,
Flotek's Chairman, President and Chief Executive Officer.
"As the quarter progressed, we began to experience a positive
inflection in our sales opportunities, protected our liquidity, and
executed further SG&A reductions. We have enhanced our
Board, are finalizing the upgrade of our Enterprise Resource
Planning ("ERP") system and are executing on several other
initiatives that are designed to maximize our financial performance
which includes key updates below:"
- Received the largest single Complex nano-Fluid®
("CnF®") order in our Company's history, following a
multi-year, competitive and collaborative validation in support of
a major unconventional gas project in the Middle East.
- Prescriptive Chemistry Management®
("PCM®") platform – providing full-service, value-added
fluids systems customized for the unique complexities of our
clients' reservoirs - continues to expand, growing 33.5%
sequentially, with indications of basin and product line expansions
within our existing client base, including expansion of use of our
CnF® technology.
- Further reduction in cash SG&A, now reduced by a run-rate
of $25.2 mil. from the 4Q16 reference
point. De-layering of management and systems and process
optimization remains ongoing with further savings anticipated
through year end 2018.
- Amended our credit facility with lenders to provide ample
liquidity to execute business inflection through the second half of
2018 and deferred routine covenant testing until 1Q 2019.
- Domestic ECT revenue held relatively flat, sequentially.
- Continued targeted investment and expansion of our Consumer and
Industrial Chemistry Technologies ("CICT") segment, where we
continue to identify high margin, organic growth opportunities in
2H 2018.
"Our organizational focus is expanding our client base,
strengthening our channel-to-market strategy, product offering
expansions, lowering our fixed costs and improving operational
efficiency so that we can execute a market share strategy and
return to positive cash flow and profitability in coming periods.
We have expanded our Board depth and breadth and our new leadership
team is having success positioning Flotek operationally,
financially and competitively during these very dynamic times and
as our results inflect," stated Mr. Chisholm.
2Q Financial Snapshot
- Revenue of $59.1 million for 2Q
2018 decreased 2.4% compared to 1Q 2018 and decreased 30.6%
compared to 2Q 2017.
- Cash SG&A of $13.1 million
for 2Q 2018 (excluding stock compensation expense of $2.4 million) decreased 3.9% compared to 1Q 2018
and decreased 22.6% compared to 2Q 2017.
- Net income (loss) of ($75.0)
million for 2Q 2018, compared to $0.1
million for 1Q 2018 and net loss from continuing operations
of ($1.1) million for 2Q 2017.
- GAAP earnings (loss) per share ("EPS") of ($1.30) for 2Q 2018, compared to $0.00 for the 1Q 2018 and GAAP EPS from
continuing operations of ($0.02) for
the 2Q 2017.
- Adjusted EPS of ($0.34) for 2Q
2018, compared to $0.01 for 1Q 2018
and adjusted EPS from continuing operations of ($0.01) for 2Q 2017.
- Adjusted EPS for 2Q 2018 excludes pre-tax charges of
$37.2 million impairment to goodwill,
$2.6 million write-down of assets
held for sale, $1.2 million for
discontinuation of corporate projects, and $0.4 million related to the closing of a business
venture, and $22.8 million deferred
tax asset valuation allowance, totaling $55.5 million, or $0.96 per share, net of tax. (See our
Reconciliation of Non-GAAP Items and Non-Cash Items Impacting
Earnings at the conclusion of this release.)
- Adjusted EBITDA, a non-GAAP measure, of ($4.0) million for 2Q 2018, compared to
($1.0) million in 1Q 2018 and
$6.0 million in 2Q 2017.
- Free cash flow (operating cash flow less capital expenditures)
of ($8.7) million for 2Q 2018,
compared to ($13.5) million for 1Q
2018 and ($7.3) million for 2Q 2017
partially due to working capital investments of ($1.7) million as we fulfill a large
CnF® order.
- Net debt position of $46.0
million at 2Q end 2018 increased from $36.9 million at 1Q end 2018, principally due to
inventory build, EBITDA losses and funding of Capex.
(Please refer to GAAP reconciliation tables in this
release)
Second Quarter 2018 Results
For the three months ended
June 30, 2018, Flotek reported
revenue of $59.1 million, a decrease
of $26.1 million, or 30.6%, compared
to $85.2 million in the same period
of 2017. Revenue decreased $1.4
million, or 2.4%, compared to first quarter 2018.
On a GAAP basis, Flotek reported net income (loss) for the three
months ended June 30, 2018 of
($75.0) million, a decrease of
$73.9 million compared to income
(loss) from continuing operations of ($1.1)
million in the same period of 2017. Income (loss) decreased
$75.1 million compared to
$0.1 million in the first quarter
2018. Flotek reported income (loss) per share (fully diluted) for
the three months ended June 30, 2018
of ($1.30) compared to income (loss)
per share from continuing operations of ($0.02) in the same period 2017.
Excluding select items, which can be found in the Reconciliation
to Adjusted Net Income (Loss) table at the conclusion of this
release, totaling $55.5 million, net
of tax, or $0.96 per share, adjusted
EPS was ($0.34) for the three months
ended June 30, 2018, compared to
adjusted EPS from continuing operations of ($0.01) for the three months ended June 30, 2017. (See our Reconciliation of
Non-GAAP Items and Non-Cash Items Impacting Earnings at the
conclusion of this release.)
Earnings Before Interest, Taxes, Depreciation and Amortization
("EBITDA") for the three months ended June
30, 2018, was ($47.8) million,
compared to $2.0 million for the
three months ended June 30, 2017.
Adjusted EBITDA for the three months ended June 30, 2018, which excludes select items found
in the Reconciliation to Adjusted EBITDA at the conclusion of this
release, was ($4.0) million compared
to adjusted EBITDA for the three months ended June 30, 2017 of $6.0
million and adjusted EBITDA for the three months ended
March 31, 2018 of ($1.0) million. Management believes that adjusted
EBITDA provides useful information to investors to assess and
understand operating performance and cash flows. (See our
Reconciliation of Non-GAAP Items and Non-Cash Items Impacting
Earnings at the conclusion of this release.)
A summary income statement reflecting second quarter results can
be found at the conclusion of this release, as well as GAAP
reconciliation tables.
Second Quarter 2018 – Segment Highlights
|
2Q
2018
|
1Q
2018
|
%
Change
|
2Q
2017
|
%
Change
|
Energy Chemistry
Technologies ("ECT")
|
Revenue
|
$39.5
million
|
$41.1
million
|
(3.7%)
|
$65.9
million
|
(40.0%)
|
Income From
Operations
|
($0.7)
million
|
($0.2)
million
|
(350.5%)
|
$9.3
million
|
(108.1%)
|
Adj.
EBITDA
|
$4.2
million
|
$5.6
million
|
(25.2%)
|
$15.9
million
|
(73.5%)
|
Adj. EBITDA
Margin
|
10.6%
|
13.7%
|
(306)
bps
|
24.1%
|
(1344)
bps
|
Consumer and
Industrial Chemistry Technologies ("CICT")
|
Revenue
|
$19.5
million
|
$19.4
million
|
0.5%
|
$19.3
million
|
1.2%
|
Income From
Operations
|
$0.6
million
|
$2.4
million
|
(73.7%)
|
$1.2
million
|
(47.4%)
|
Adj.
EBITDA
|
$1.5
million
|
$3.3
million
|
(53.9%)
|
$2.1
million
|
(27.2%)
|
Adj. EBITDA
Margin
|
7.9%
|
17.2%
|
(930)
bps
|
11.0%
|
(308)
bps
|
* Percentages may
be different when calculated due to rounding.
|
** Segment adj.
EBITDA excludes stock based compensation, loss on sale of assets,
R&I allocations and select items.
|
*** Income From
Operations adjusted for impairment of goodwill.
|
Energy Chemistry Technologies Highlights ("ECT"):
- Second quarter revenue decreased 3.7% sequentially to
$39.5 million, and decreased 40.0%
year-over-year.
- Received the single largest CnF® order in Company
history, which provides for visibility of growth through the second
half of 2018.
- Second quarter adjusted EBITDA margins decreased 3.1 percentage
points sequentially to 10.6% and decreased 13.4 percentage points
year-over-year. The declines in both comparable periods were driven
primarily by startup costs associated with growth in
PCM® opportunities and lower fixed cost absorption in
plant operations.
- Seven new patents were granted during the second quarter
2018.
Consumer and Industrial Chemistry Technologies Highlights
("CICT"):
- Second quarter revenue increased 0.5% sequentially to
$19.5 million, and increased 1.2%
year-over-year.
- Second quarter adjusted EBITDA margins decreased by 9.3
percentage points sequentially to 7.9% due to lower mix of Flavor
and Fragrance products and higher mix of terpenes. Second quarter
adjusted EBITDA margins decreased 3.1 percentage points
year-over-year.
- Expansion of our plant through recently completed distillation
tower which is now fully operational.
- Japan expansion is beginning
to show signs of higher margin sales opportunities to become more
consistent in future periods.
- Showcased CICT's 100% natural citrus ingredients at the largest
domestic brewing conference and trade show, increasing the
Company's exposure to the beverage markets.
Balance Sheet and Liquidity
Net Debt increased
$9.2 million from $36.9 million at first quarter end to
$46.0 million at second quarter end,
and increased $6.7 million
year-over-year from $39.3 million at
second quarter end 2017. Working capital requirements were
$1.7 million for the second quarter
2018, primarily driven by inventory builds. Total liquidity at
quarter end was $20.1 million. The
balance on our credit facility as of June
30, 2018 was $49.1 million,
compared to $39.7 million at first
quarter end 2018. We expect working capital benefits in the
second half of 2018 as seasonal citrus oil purchasing unwinds and
as purchase orders related to a large unconventional gas project in
the Middle East are recognized as
revenue.
Flotek Outlook
In commenting about Flotek's outlook,
Chisholm added, "Our PCM® platform continues to
experience strong demand from operators, and we believe our second
quarter found a bottoming baseline of activity from which we expect
to grow moving forward. In addition, we are excited to efficiently
fulfill orders in support of a large Middle East unconventional gas project where
our CnF® technology is being utilized. Taken together,
we believe our ECT revenue could increase at least 18%-23%
sequentially. This is in fact supported by our July revenue in the
segment. In our CICT segment, we expect revenues could increase in
the mid-single digits sequentially.
We do not expect any material increases to our SG&A levels
looking ahead, but rather are working to realize the potential for
further savings. However, we do remain mindful and vigilant of the
inherent risks surrounding Permian takeaway capacity, the
mobilization of frac equipment and the unpredictability in the
timing of future international projects."
Conference Call Details
Flotek will host a conference
call on Wednesday, August 8, at
9:00 AM CT (10:00 AM ET) to discuss its operating results for
the three and six months ended June 30,
2018. To participate in the call, participants should dial
800-671-8739 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 develops and
delivers prescriptive chemistry-based technology, including
specialty chemicals, to clients in the energy, consumer industrials
and food & beverage industries. Flotek's inspired chemists draw
from the power of bio-derived solvents to deliver solutions that
enhance energy production, cleaning products, foods & beverages
and fragrances. In the oil and gas sector, Flotek serves major and
independent energy producers and oilfield service companies, both
domestic and international. 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.
|
Unaudited
Condensed Consolidated Balance Sheets
|
(in thousands,
except share data)
|
|
|
|
June 30,
2018
|
|
December 31,
2017
|
ASSETS
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$ 3,096
|
|
$ 4,584
|
Accounts receivable,
net of allowance for doubtful accounts of $820 and $733
at June 30, 2018 and December 31, 2017,
respectively
|
43,218
|
|
46,018
|
Inventories,
net
|
90,844
|
|
75,759
|
Income taxes
receivable
|
2,659
|
|
2,826
|
Assets held for
sale
|
2,250
|
|
-
|
Other current
assets
|
5,797
|
|
8,737
|
Total current
assets
|
147,864
|
|
137,924
|
Property and
equipment, net
|
66,143
|
|
68,835
|
Goodwill
|
19,480
|
|
56,660
|
Deferred tax assets,
net
|
-
|
|
12,713
|
Other intangible
assets, net
|
47,025
|
|
48,231
|
Other long-term
assets
|
531
|
|
527
|
Assets held for
sale
|
-
|
|
4,998
|
TOTAL
ASSETS
|
$ 281,043
|
|
$ 329,888
|
LIABILITIES AND
EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$ 25,646
|
|
$ 22,048
|
Accrued
liabilities
|
9,071
|
|
14,589
|
Interest
payable
|
24
|
|
43
|
Current portion of
long-term debt
|
49,126
|
|
27,950
|
Total current
liabilities
|
83,867
|
|
64,630
|
Deferred tax
liabilities, net
|
2,876
|
|
-
|
Total
liabilities
|
86,743
|
|
64,630
|
Commitments and
contingencies
|
|
|
|
Equity:
|
|
|
|
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; 61,641,525
shares issued and 56,909,623 shares
outstanding at June 30, 2018; 60,622,986 shares issued and 56,755,293 shares outstanding at
December 31, 2017
|
|
|
|
|
|
|
6
|
|
6
|
Additional paid-in
capital
|
340,618
|
|
336,067
|
Accumulated other
comprehensive income (loss)
|
(1,045)
|
|
(884)
|
Retained earnings
(accumulated deficit)
|
(112,192)
|
|
(37,225)
|
Treasury stock, at
cost; 3,606,833 and 3,621,435 shares at June 30, 2018 and
December 31, 2017,
respectively
|
(33,088)
|
|
(33,064)
|
Flotek Industries,
Inc. stockholders' equity
|
194,299
|
|
264,900
|
Noncontrolling
interests
|
1
|
|
358
|
Total
equity
|
194,300
|
|
265,258
|
TOTAL LIABILITIES
AND EQUITY
|
$ 281,043
|
|
$ 329,888
|
|
|
|
|
Flotek Industries,
Inc.
|
Unaudited
Condensed Consolidated Statements of Operations
|
(in thousands,
except per share data)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
6/30/2018
|
|
6/30/2017
|
|
6/30/2018
|
|
6/30/2017
|
|
(in thousands,
except per share data)
|
|
(in thousands,
except per share data)
|
Revenue
|
$ 59,086
|
|
$ 85,177
|
|
$ 119,602
|
|
$ 165,131
|
Costs and
expenses:
|
|
|
|
|
|
|
|
Cost of revenue
(excluding depreciation and amortization)
|
46,738
|
|
58,574
|
|
92,439
|
|
110,199
|
Corporate general and
administrative
|
8,665
|
|
11,155
|
|
17,158
|
|
23,426
|
Segment selling and
administrative
|
6,872
|
|
9,386
|
|
13,996
|
|
19,695
|
Depreciation and
amortization
|
3,025
|
|
2,991
|
|
6,027
|
|
6,023
|
Research and
development
|
3,102
|
|
4,109
|
|
6,026
|
|
7,250
|
Loss on disposal of
long-lived assets
|
5
|
|
214
|
|
62
|
|
412
|
Impairment of
goodwill
|
37,180
|
|
-
|
|
37,180
|
|
-
|
Total costs and
expenses
|
105,587
|
|
86,429
|
|
172,888
|
|
167,005
|
Loss from
operations
|
(46,501)
|
|
(1,252)
|
|
(53,286)
|
|
(1,874)
|
Other (expense)
income:
|
|
|
|
|
|
|
|
Interest
expense
|
(640)
|
|
(549)
|
|
(1,156)
|
|
(1,145)
|
Loss on write-down of
assets held for sale
|
(2,580)
|
|
-
|
|
(2,580)
|
|
-
|
Other (expense)
income, net
|
(2,133)
|
|
237
|
|
(2,417)
|
|
391
|
Total other
expense
|
(5,353)
|
|
(312)
|
|
(6,153)
|
|
(754)
|
Loss before income
taxes
|
(51,854)
|
|
(1,564)
|
|
(59,439)
|
|
(2,628)
|
Income tax (expense)
benefit
|
(23,537)
|
|
442
|
|
(15,885)
|
|
762
|
Loss from
continuing operations
|
(75,391)
|
|
(1,122)
|
|
(75,324)
|
|
(1,866)
|
Loss from
discontinued operations, net of tax
|
-
|
|
(2,704)
|
|
-
|
|
(13,937)
|
Net
loss
|
(75,391)
|
|
(3,826)
|
|
(75,324)
|
|
(15,803)
|
Net loss
attributable to noncontrolling interests
|
(357)
|
|
-
|
|
(357)
|
|
-
|
Net loss
attributable to Flotek Industries, Inc. (Flotek)
|
$ (75,034)
|
|
$ (3,826)
|
|
$ (74,967)
|
|
$ (15,803)
|
|
|
|
|
|
|
|
|
Amounts
attributable to Flotek shareholders:
|
|
|
|
|
|
|
|
Loss from continuing
operations
|
$ (75,034)
|
|
$
(1,122)
|
|
$ (74,967)
|
|
$
(1,866)
|
Loss from
discontinued operations, net of tax
|
-
|
|
(2,704)
|
|
-
|
|
(13,937)
|
Net loss attributable
to Flotek
|
$ (75,034)
|
|
$
(3,826)
|
|
$ (74,967)
|
|
$ (15,803)
|
Basic earnings
(loss) per common share:
|
|
|
|
|
|
|
|
Continuing
operations
|
$ (1.30)
|
|
$ (0.02)
|
|
$ (1.30)
|
|
$ (0.03)
|
Discontinued
operations, net of tax
|
-
|
|
(0.05)
|
|
-
|
|
(0.24)
|
Basic earnings (loss)
per common share
|
$ (1.30)
|
|
$ (0.07)
|
|
$ (1.30)
|
|
$ (0.27)
|
Diluted earnings
(loss) per common share:
|
|
|
|
|
|
|
|
Continuing
operations
|
$ (1.30)
|
|
$ (0.02)
|
|
$ (1.30)
|
|
$ (0.03)
|
Discontinued
operations, net of tax
|
-
|
|
(0.05)
|
|
-
|
|
(0.24)
|
Diluted earnings
(loss) per common share
|
$ (1.30)
|
|
$ (0.07)
|
|
$ (1.30)
|
|
$ (0.27)
|
Weighted average
common shares:
|
|
|
|
|
|
|
|
Weighted average
common shares used in computing basic earnings (loss) per common
share
|
57,869
|
|
57,854
|
|
57,566
|
|
57,764
|
Weighted average
common shares used in computing diluted earnings (loss) per common
share
|
57,869
|
|
57,854
|
|
57,566
|
|
57,764
|
|
|
|
|
|
|
|
|
Flotek Industries,
Inc.
|
Unaudited
Condensed Consolidated Statements of Cash Flows
|
(in
thousands)
|
|
Six Months
Ended
|
|
6/30/2018
|
|
6/30/2017
|
Cash flows from
operating activities:
|
|
|
|
Net loss attributable
to Flotek Industries, Inc. (Flotek)
|
$(74,967)
|
|
$ (15,803)
|
Loss from
discontinued operations, net of tax
|
-
|
|
(13,937)
|
Loss from continuing
operations
|
(74,967)
|
|
(1,866)
|
Adjustments to
reconcile loss from continuing operations to net cash used in
operating activities:
|
|
|
|
Depreciation and
amortization
|
6,027
|
|
6,023
|
Amortization of
deferred financing costs
|
192
|
|
253
|
Provision for excess
and obsolete inventory
|
1,942
|
|
280
|
Impairment of
goodwill
|
37,180
|
|
-
|
Loss on write-down of
assets held for sale
|
2,580
|
|
-
|
Loss on sale of
assets
|
62
|
|
412
|
Stock compensation
expense
|
4,385
|
|
6,653
|
Deferred income tax
provision (benefit)
|
15,587
|
|
(7,329)
|
Reduction in tax
benefit related to share-based awards
|
120
|
|
315
|
Changes in current
assets and liabilities:
|
|
|
|
Accounts receivable,
net
|
2,736
|
|
(12,874)
|
Inventories,
net
|
(17,112)
|
|
(20,303)
|
Income taxes
receivable
|
15
|
|
8,619
|
Other current
assets
|
1,147
|
|
14,185
|
Accounts
payable
|
3,675
|
|
(1,418)
|
Accrued
liabilities
|
(2,556)
|
|
(180)
|
Income taxes
payable
|
-
|
|
(10)
|
Interest
payable
|
(19)
|
|
(3)
|
Net cash used in
operating activities
|
(19,006)
|
|
(7,243)
|
Cash flows from
investing activities:
|
|
|
|
Capital
expenditures
|
(3,227)
|
|
(4,508)
|
Proceeds from sales
of businesses
|
-
|
|
17,490
|
Proceeds from sale of
assets
|
90
|
|
310
|
Purchase of patents
and other intangible assets
|
(215)
|
|
(247)
|
Net cash (used in)
provided by investing activities
|
(3,352)
|
|
13,045
|
Cash flows from
financing activities:
|
|
|
|
Repayments of
indebtedness
|
-
|
|
(9,833)
|
Borrowings on
revolving credit facility
|
146,038
|
|
224,757
|
Repayments on
revolving credit facility
|
(124,862)
|
|
(220,607)
|
Debt issuance
costs
|
(98)
|
|
(106)
|
Purchase of treasury
stock related to share-based awards
|
(24)
|
|
(1,335)
|
Proceeds from sale of
common stock
|
247
|
|
368
|
Repurchase of common
stock
|
-
|
|
(487)
|
Proceeds from
exercise of stock options
|
-
|
|
20
|
Loss from
noncontrolling interest
|
(357)
|
|
-
|
Net cash provided by
(used in) financing activities
|
20,944
|
|
(7,223)
|
Discontinued
operations:
|
|
|
|
Net cash used in
operating activities
|
-
|
|
(794)
|
Net cash provided by
investing activities
|
-
|
|
794
|
Net cash flows
provided by discontinued operations
|
-
|
|
-
|
Effect of changes in
exchange rates on cash and cash equivalents
|
(74)
|
|
20
|
Net decrease in
cash and cash equivalents
|
(1,488)
|
|
(1,401)
|
Cash and cash
equivalents at the beginning of period
|
4,584
|
|
4,823
|
Cash and cash
equivalents at the end of period
|
$ 3,096
|
|
$
3,422
|
Flotek Industries,
Inc.
|
Unaudited
Reconciliation of Non-GAAP Items and Non-Cash Items Impacting
Earnings
|
(in thousands,
except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Income (Loss)
from Continuing Operations and Reconciliation to Adjusted Net
Income (Loss) (Non-GAAP)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
|
|
|
6/30/2018
|
|
6/30/2017
|
|
6/30/2018
|
|
6/30/2017
|
|
|
|
|
|
(in thousands,
except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (Loss) from
Continuing Operations (GAAP)
|
$(75,034)
|
|
$ (1,122)
|
|
$(74,967)
|
|
$ (1,866)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred Tax Asset
Valuation Allowance
|
22,767
|
|
-
|
|
21,621
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Select Items
Impacting Earnings, net of tax
|
32,719
|
|
540
|
|
33,509
|
|
1,194
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net
Income (Loss) (Non-GAAP)
|
$(19,548)
|
|
$ (582)
|
|
$(19,837)
|
|
$ (672)
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average
Shares Outstanding (Fully Diluted)
|
57,869
|
|
57,854
|
|
57,566
|
|
57,764
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Earnings
(Loss) Per Share (Fully Diluted)
|
|
|
|
$
(0.34)
|
|
$ (0.01)
|
|
$ (0.34)
|
|
$ (0.01)
|
|
|
|
|
|
|
|
|
|
|
|
|
Select Items
Impacting Earnings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive
Retirement:
|
|
|
|
|
|
|
|
|
|
|
|
Stock Compensation
Expense
|
|
|
|
-
|
|
636
|
|
-
|
|
887
|
|
Cash
Payments
|
|
|
|
-
|
|
194
|
|
-
|
|
950
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventory
Write-down
|
|
|
|
-
|
|
-
|
|
1,000
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment of
Goodwill
|
|
|
|
37,180
|
|
-
|
|
37,180
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on Write-down of
Assets Held For Sale
|
|
|
|
2,580
|
|
-
|
|
2,580
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinuation of
Corporate Projects
|
|
|
|
1,220
|
|
-
|
|
1,220
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses Relating to
Closing of Business Venture
|
|
|
436
|
|
-
|
|
436
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Select
Items
|
|
|
$ 41,416
|
|
$ 830
|
|
$ 42,416
|
|
$ 1,837
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less income tax
effect at 21% for 2018 and 35% for 2017
|
(8,697)
|
|
(290)
|
|
(8,907)
|
|
(643)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Select Items
Impacting Earnings, net of tax
|
|
|
$ 32,719
|
|
$ 540
|
|
$ 33,509
|
|
$ 1,194
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Management believes
that adjusted Net Income for the three and six months ended June
30, 2018, and June 30, 2017, is useful to investors to assess and
understand operating performance, especially when comparing those
results with previous and subsequent periods. Management views the
expenses noted above to be outside of the Company's normal
operating results. Management analyzes operating results without
the impact of the above items as an indicator of performance, to
identify underlying trends in the business and cash flow from
continuing operations, and to establish operational
goals.
|
Flotek Industries,
Inc.
|
Unaudited
Reconciliation of Non-GAAP Items and Non-Cash Items Impacting
Earnings
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Income (Loss)
from Continuing Operations and Reconciliation to Adjusted EBITDA
(Non-GAAP)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
|
|
|
6/30/2018
|
|
6/30/2017
|
|
6/30/2018
|
|
6/30/2017
|
|
|
|
|
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (Loss) from
Continuing Operations (GAAP)
|
$ (75,034)
|
|
$ (1,122)
|
|
$(74,967)
|
|
$ (1,866)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
Expense
|
|
|
640
|
|
549
|
|
1,156
|
|
1,145
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Tax Expense
(Benefit)
|
|
23,537
|
|
(442)
|
|
15,885
|
|
(762)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
Amortization
|
|
3,025
|
|
2,991
|
|
6,027
|
|
6,023
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
(Non-GAAP)
|
|
|
|
$ (47,832)
|
|
$ 1,976
|
|
$(51,899)
|
|
$ 4,540
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Compensation
Expense
|
|
2,421
|
|
3,604
|
|
4,385
|
|
6,653
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on Sale of
Assets
|
|
|
|
5
|
|
214
|
|
62
|
|
412
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Executive
Retirement Expense
|
|
-
|
|
194
|
|
-
|
|
950
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventory
Write-down
|
|
|
-
|
|
-
|
|
1,000
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment of
Goodwill
|
|
37,180
|
|
-
|
|
37,180
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on Write-down of
Assets Held For Sale
|
2,580
|
|
-
|
|
2,580
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinuation of
Corporate Projects
|
1,220
|
|
-
|
|
1,220
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses Relating to
Closing of Business Venture
|
436
|
|
-
|
|
436
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
(Non-GAAP)
|
|
|
$ (3,990)
|
|
$ 5,988
|
|
$ (5,036)
|
|
$ 12,555
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Management believes
that adjusted EBITDA for the three and six months ended June 30,
2018, and June 30, 2017, is useful to investors to assess and
understand operating performance, especially when comparing those
results with previous and subsequent periods. Management views the
expenses noted above to be outside of the Company's normal
operating results. Management analyzes operating results without
the impact of the above items as an indicator of performance, to
identify underlying trends in the business and cash flow from
continuing operations, and to establish operational
goals.
|
Flotek Industries,
Inc.
|
Unaudited
Reconciliation of Non-GAAP Items and Non-Cash Items Impacting
Earnings
|
(in
thousands)
|
|
GAAP Segment Net
Income and Reconciliation to Segment Adjusted EBITDA
(Non-GAAP)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Energy Chemistry
Technologies
|
|
Consumer and
Industrial Chemistry Technologies
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
|
|
|
6/30/2018
|
|
6/30/2017
|
|
6/30/2018
|
|
6/30/2017
|
|
6/30/2018
|
|
6/30/2017
|
|
6/30/2018
|
|
6/30/2017
|
|
|
|
|
|
(in
thousands)
|
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Net Income
(GAAP)
|
|
|
$(37,930)
|
|
$ 9,300
|
|
$(38,096)
|
|
$ 17,848
|
|
$
640
|
|
$ 1,217
|
|
$ 3,079
|
|
$ 4,921
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest Expense
(a)
|
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Tax Expense
(a)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
Amortization
|
|
1,797
|
|
1,795
|
|
3,566
|
|
3,644
|
|
682
|
|
583
|
|
1,351
|
|
1,162
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment EBITDA
(Non-GAAP)
|
|
|
$(36,133)
|
|
$ 11,095
|
|
$(34,530)
|
|
$ 21,492
|
|
$ 1,322
|
|
$ 1,800
|
|
$ 4,430
|
|
$ 6,083
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Compensation
Expense
|
|
200
|
|
562
|
|
406
|
|
1,068
|
|
64
|
|
190
|
|
128
|
|
291
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
R&I
Allocation
|
|
|
2,949
|
|
3,985
|
|
5,704
|
|
7,019
|
|
153
|
|
124
|
|
322
|
|
230
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on Sale of
Assets
|
|
5
|
|
214
|
|
62
|
|
412
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventory
Write-down
|
|
|
-
|
|
-
|
|
1,000
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment of
Goodwill
|
|
37,180
|
|
-
|
|
37,180
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Adjusted
EBITDA (Non-GAAP)
|
|
$ 4,201
|
|
$ 15,856
|
|
$ 9,822
|
|
$ 29,991
|
|
$ 1,539
|
|
$ 2,114
|
|
$ 4,880
|
|
$ 6,604
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Interest
Expense and Tax Expense are recorded at the Corporate level and not
allocated to segments.
|
|
* Management believes
that adjusted EBITDA for the three and six months ended June 30,
2018, and June 30, 2017, is useful to investors to assess and
understand operating performance, especially when comparing those
results with previous and subsequent periods. Management analyzes
operating results without the impact of the above items as an
indicator of performance, to identify underlying trends in the
business and cash flow from continuing operations, and to establish
operational goals.
|
View original content with
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SOURCE Flotek Industries, Inc.