HOUSTON, Nov. 6, 2018 /PRNewswire/ -- Flotek Industries,
Inc. ("Flotek" or the "Company") (NYSE: FTK) today announced
results for the three and nine months ended September 30, 2018.
"The third quarter showed material improvement over the first
half of this year as our full-fluids Prescriptive Chemistry
Management® ("PCM®") business continued to
expand, diligent cost cutting measures were furthered and we
executed upon the largest single Complex nano-Fluid®
("CnF®") order in Company history. Additionally, we
delivered consolidated incremental adjusted EBITDA margins of 51%
sequentially in the third quarter, in sharp contrast to our
disappointing start to the year. As we committed to in the last
quarter, our leadership team continues to make steady progress
toward increasing our profitability," said John Chisholm, Flotek's Chairman, President and
Chief Executive Officer.
"During the quarter, domestic shale operators generally reduced
activity. At the same time, they increased their focus on
understanding mechanical limitations of proppant loading and
lateral lengths to optimize completion techniques and reservoir
performance, which we believe play into Flotek's reservoir-centric
chemistry offering. Further, as operators prioritize capital
efficiency to deliver positive free cash flow, Flotek is providing
value-added chemistry technology that delivers higher production at
a variety of price points. Meanwhile, there has been increased
direct operator interaction as we help address significant
reservoir challenges by fine-tuning fluid systems through our
chemistry applications. Additionally, we are aligning with service
companies that have taken an approach to differentiate themselves
through chemistry technology and in turn, can benefit from greater
horsepower efficiencies in proppant delivery.
"Impacting Florida Chemical, which is our Consumer and
Industrial Chemistry Technologies ("CICT") segment, global citrus
markets remained in a state of undersupply during the quarter
relative to historical averages. However, the potential for greater
crop yields points to the prospect of relief from the inflationary
cost environment of the last couple of years. There has been a
considerable increase in consumer demand for natural flavors and
fragrances, leading to growing market opportunities for our
high-margin compounds."
Key accomplishments during the quarter include some of the
updates below:
- Cash Selling, General and Administrative ("SG&A") expense
in 3Q 2018 is now reduced by a run-rate of $28.0 million from our 4Q 2016 reference point,
as another $2.8 million annually was
removed from the prior quarter.
- Identified further structural cost saving opportunities within
logistics, information technology systems and other administrative
processes which will drive greater operational efficiencies going
forward.
- PCM® platform – providing full-service, value-added
fluids systems customized for the unique complexities of our
clients' reservoirs – grew sequentially and now represents a
majority of the domestic Energy Chemistry Technologies ("ECT")
business.
- Our Global Research & Innovation Center is receiving
meaningfully increased inbound client engagements related to
reservoir challenges that have emerged over the past two years,
namely frac hits, lower child well production, cost-effective
remediation solutions and managing recycled water, all against a
backdrop of driving capital efficiency improvements.
- Domestic ECT revenue held relatively flat, sequentially.
- Despite lower revenue in our CICT segment, it was able to
expand adjusted EBITDA modestly compared to the second
quarter.
- Demand for tailored, high-margin flavor and fragrance offerings
are beginning to show a steady increase as we expected into year
end and 2019.
- Completed the upgrade to our Enterprise Resource Planning
("ERP") system.
"Flotek remains focused on expanding our client base, better
serving the needs of challenging and evolving industries, and
solidifying new and segmented channels to market with
technologically superior chemistry solutions. At the same time, we
are continuing to reduce our cash and non-cash costs, and we will
diligently manage our balance sheet to realize working capital
benefits to drive positive operating cash flow," stated Mr.
Chisholm.
3Q Financial Snapshot
- Revenue of $71.0 million for 3Q
2018 increased 20.1% compared to 2Q 2018 and decreased 10.7%
compared to 3Q 2017.
- Cash SG&A of $12.4 million
for 3Q 2018 (excluding stock compensation expense of $2.2 million) decreased 5.3% compared to 2Q 2018
and decreased 25.2% compared to 3Q 2017.
- Net income (loss) of ($3.9)
million for 3Q 2018, compared to ($75.0) million for 2Q 2018 and net loss from
continuing operations of ($3.4)
million for 3Q 2017.
- GAAP earnings (loss) per share ("EPS") of ($0.07) for 3Q 2018, compared to ($1.30) for 2Q 2018 and EPS from continuing
operations of ($0.06) for 3Q
2017.
- Adjusted EPS of ($0.06) for 3Q
2018, compared to ($0.34) for 2Q 2018
and adjusted EPS from continuing operations of ($0.06) for 3Q 2017.
- Adjusted EPS for 3Q 2018 excludes an after tax charge of
$0.4 million, or $0.01 per share, related to a loss on sale of
business and deferred tax asset valuation allowance. (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 $2.0 million for 3Q 2018, compared to
($4.0) million in 2Q 2018 and
$3.3 million in 3Q 2017, a
$6.0 million sequential
improvement.
- Free cash flow (operating cash flow less capital expenditures)
of ($6.2) million for 3Q 2018,
compared to ($8.7) million for 2Q
2018 and $6.8 million for 3Q 2017.
This was primarily due to working capital investments of
$6.5 million as our Days Sales
Outstanding ("DSOs") increased, due to the growth of our foreign
revenues which carry longer payment terms compared to our domestic
revenue.
- Net debt position of $51.6
million at end of 3Q 2018 increased from $46.0 million at end of 2Q 2018, principally due
to an increase in DSOs. We are striving to reduce net debt by year
end.
(Please refer to GAAP reconciliation tables in this
release)
Third Quarter 2018 Results
For the three months ended September 30,
2018, Flotek reported revenue of $71.0 million, an increase of $11.9 million, or 20.1%, compared to the second
quarter 2018. Revenue decreased of $8.5
million, or 10.7%, compared to the same period of 2017.
On a GAAP basis, Flotek reported net loss for the three months
ended September 30, 2018 of
$3.9 million, an increase of
$0.5 million compared to net loss
from continuing operations of $3.4
million in the same period of 2017. Net loss decreased
$71.1 million compared to net loss of
$75.0 million in the second quarter
2018. Flotek reported net loss per share (fully diluted) for the
three months ended September 30, 2018
of $0.07 compared to net loss per
share from continuing operations of $0.06 in the same period 2017.
Excluding select items totaling $0.4
million, net of tax, or $0.01
per share, adjusted EPS was ($0.06)
for the three months ended September 30,
2018, compared to adjusted EPS from continuing operations of
($0.06) for the three months ended
September 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 September 30, 2018, was ($0.6) million, compared to $0.2 million for the three months ended
September 30, 2017. Adjusted EBITDA
for the three months ended September 30,
2018, which excludes select items, was $2.0 million compared to adjusted EBITDA of
$3.3 million and ($4.0) million for the three months ended
September 30, 2017 and June 30, 2018, respectively. 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 third quarter results can
be found at the conclusion of this release, as well as GAAP
reconciliation tables.
Third Quarter 2018 – Segment Highlights
|
3Q
2018
|
2Q
2018
|
%
Change
|
3Q
2017
|
%
Change
|
Energy Chemistry
Technologies ("ECT")
|
Revenue
|
$53.7
million
|
$39.5
million
|
35.8%
|
$61.2
million
|
(12.2%)
|
Income From
Operations
|
$3.9
million
|
($0.7)
million
|
622.8%
|
$6.9
million
|
(42.9%)
|
Adj.
EBITDA
|
$8.2
million
|
$4.2
million
|
95.5%
|
$11.7
million
|
(30.0%)
|
Adj. EBITDA
Margin
|
15.3%
|
10.6%
|
467
bps
|
19.2%
|
(390)
bps
|
Consumer and
Industrial Chemistry Technologies ("CICT")
|
Revenue
|
$17.3
million
|
$19.5
million
|
(11.6%)
|
$18.3
million
|
(5.5%)
|
Income From
Operations
|
$0.9
million
|
$0.6
million
|
34.0%
|
$1.0
million
|
(12.9%)
|
Adj.
EBITDA
|
$1.6
million
|
$1.5
million
|
3.4%
|
$1.9
million
|
(14.5%)
|
Adj. EBITDA
Margin
|
9.2%
|
7.9%
|
133
bps
|
10.2%
|
(97)
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.
|
*** 2Q 2018 ECT
Income From Operations adjusted for impairment of
goodwill.
|
Energy Chemistry Technologies Highlights ("ECT"):
- Third quarter revenue increased 35.8% sequentially to
$53.7 million, and decreased 12.2%
year-over-year.
- Revenue increased sequentially due to international
CnF® sales and PCM® activity.
- Third quarter adjusted EBITDA margins increased 4.7 percentage
points sequentially to 15.3% and decreased 3.9 percentage points
year-over-year.
- The sequential increase in adjusted EBITDA was driven by higher
international revenue and continued increase in PCM®
activity.
- Third quarter incremental operating income margins increased
33.0% sequentially.
- Four new patents were granted during the third quarter
2018.
Consumer and Industrial Chemistry Technologies Highlights
("CICT"):
- Third quarter revenue decreased 11.6% sequentially to
$17.3 million, and decreased 5.5%
year-over-year.
- Revenue decreased sequentially due to lower terpene sales,
partially offset by an increase in flavor and fragrance and
Japan.
- Third quarter adjusted EBITDA margins increased by 1.3
percentage points sequentially to 9.2% and decreased 1.0 percentage
points year-over year.
- Third quarter adjusted EBITDA margins increased sequentially
despite lower revenues due to higher mix of flavor and fragrance
sales, and increased internal terpene consumption.
- Current focus on expanding varietal offerings through
investment in non-thermal extraction capabilities.
- During the fourth quarter, realized the largest weekly sales
order bookings year-to-date, providing visibility into 2019.
Balance Sheet and Liquidity
Net Debt increased $5.6 million
from $46.0 million at second quarter
end to $51.6 million at third quarter
end, and increased $16.0 million
year-over-year from $35.6 million at
third quarter end 2017. Working capital requirements were
$6.5 million for the third quarter
2018, as DSOs expanded primarily due to international revenue
growth. Total liquidity, including cash balances, at quarter end
was $17.0 million. The balance on our
credit facility as of September 30,
2018 was $53.4 million,
compared to $49.1 million at second
quarter end 2018. We expect a positive cash benefit from working
capital in the fourth quarter.
Flotek Outlook
In commenting about Flotek's outlook, Mr. Chisholm added, "As
many of our peers and clients have already reported, fourth quarter
domestic completion activity will contract for the energy industry.
However, based on what we have seen to date this quarter, we expect
that our fourth quarter domestic ECT revenue will be up
sequentially from the third quarter, while our international ECT
revenue will decline due to the timing and lumpiness of large
orders. As a result, we believe that our total ECT revenue will
decline in the high-single digit percentage range, sequentially, in
the fourth quarter.
"Within CICT, there are a number of high-margin flavor orders
that we expect to occur through year end and into 2019. As such, we
anticipate revenues to be up mid-to-high single digits sequentially
with adjusted EBITDA margins expanding by a few percentage points
in the segment.
"While we have exceeded our initial expectations on cost
reductions, we continue to reduce our cash and non-cash costs
across the board. We have put into place further initiatives to
drive lower fixed costs and greater operational efficiencies across
the organization which should begin to reflect as early as the end
of this year as we continue to focus on improved cash flow."
Conference Call and Presentation
Details
Flotek will host a conference call on Wednesday, November 7, at 9:00 AM CT (10:00 AM
ET) to discuss its operating results for the three and nine
months ended September 30, 2018. To
participate in the call, participants should dial 800-771-7943
approximately 5 minutes prior to the start of the call. In
conjunction with this release, Flotek has also released a
supplemental earnings presentation. Both the call and the
supplemental earnings presentation can 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)
|
|
|
|
September 30,
2018
|
|
December 31,
2017
|
ASSETS
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
1,829
|
|
$
4,584
|
Accounts receivable,
net of allowance for doubtful accounts of $841 and $733
at September 30, 2018 and December 31,
2017, respectively
|
55,473
|
|
46,018
|
Inventories,
net
|
93,161
|
|
75,759
|
Income taxes
receivable
|
2,441
|
|
2,826
|
Other current
assets
|
7,797
|
|
8,737
|
Total current
assets
|
160,701
|
|
137,924
|
Property and
equipment, net
|
65,094
|
|
68,835
|
Goodwill
|
19,480
|
|
56,660
|
Deferred tax assets,
net
|
-
|
|
12,713
|
Other intangible
assets, net
|
47,538
|
|
48,231
|
Other long-term
assets
|
489
|
|
527
|
Assets held for
sale
|
-
|
|
4,998
|
TOTAL
ASSETS
|
$
293,302
|
|
$
329,888
|
LIABILITIES AND
EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
30,428
|
|
$
22,048
|
Accrued
liabilities
|
14,004
|
|
14,589
|
Interest
payable
|
6
|
|
43
|
Current portion of
long-term debt
|
53,402
|
|
27,950
|
Total current
liabilities
|
97,840
|
|
64,630
|
Deferred tax
liabilities, net
|
2,646
|
|
-
|
Total
liabilities
|
100,486
|
|
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; 62,102,875
shares issued and 57,026,176 shares
outstanding at September 30, 2018; 60,622,986 shares issued and 56,755,293 shares outstanding at
December 31, 2017
|
6
|
|
6
|
Additional paid-in
capital
|
343,048
|
|
336,067
|
Accumulated other
comprehensive income (loss)
|
(960)
|
|
(884)
|
Retained earnings
(accumulated deficit)
|
(116,124)
|
|
(37,225)
|
Treasury stock, at
cost; 3,584,300 and 3,621,435 shares at September 30, 2018
and December 31, 2017,
respectively
|
(33,155)
|
|
(33,064)
|
Flotek Industries,
Inc. stockholders' equity
|
192,815
|
|
264,900
|
Noncontrolling
interests
|
1
|
|
358
|
Total
equity
|
192,816
|
|
265,258
|
TOTAL LIABILITIES
AND EQUITY
|
$
293,302
|
|
$
329,888
|
Flotek Industries,
Inc.
|
Unaudited
Condensed Consolidated Statements of Operations
|
(in thousands,
except per share data)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
9/30/2018
|
|
9/30/2017
|
|
9/30/2018
|
|
9/30/2017
|
|
(in thousands,
except per share data)
|
|
(in thousands,
except per share data)
|
Revenue
|
$
70,989
|
|
$
79,458
|
|
$ 190,591
|
|
$ 244,589
|
Costs and
expenses:
|
|
|
|
|
|
|
|
Cost of revenue
(excluding depreciation and amortization)
|
54,083
|
|
57,191
|
|
146,522
|
|
167,389
|
Corporate general and
administrative
|
7,476
|
|
10,346
|
|
24,634
|
|
33,773
|
Segment selling and
administrative
|
7,126
|
|
9,277
|
|
21,123
|
|
28,972
|
Depreciation and
amortization
|
2,957
|
|
3,067
|
|
8,984
|
|
9,091
|
Research and
development
|
2,511
|
|
2,691
|
|
8,537
|
|
9,940
|
Loss (gain) on
disposal of long-lived assets
|
58
|
|
(11)
|
|
119
|
|
401
|
Impairment of
goodwill
|
-
|
|
-
|
|
37,180
|
|
-
|
Total costs and
expenses
|
74,211
|
|
82,561
|
|
247,099
|
|
249,566
|
Loss from
operations
|
(3,222)
|
|
(3,103)
|
|
(56,508)
|
|
(4,977)
|
Other (expense)
income:
|
|
|
|
|
|
|
|
Interest
expense
|
(746)
|
|
(574)
|
|
(1,902)
|
|
(1,718)
|
Loss on sale of
business
|
(360)
|
|
-
|
|
(360)
|
|
-
|
Loss on write-down of
assets held for sale
|
-
|
|
-
|
|
(2,580)
|
|
-
|
Other income
(expense), net
|
69
|
|
273
|
|
(2,348)
|
|
664
|
Total other
expense
|
(1,037)
|
|
(301)
|
|
(7,190)
|
|
(1,054)
|
Loss before income
taxes
|
(4,259)
|
|
(3,404)
|
|
(63,698)
|
|
(6,031)
|
Income tax benefit
(expense)
|
327
|
|
(17)
|
|
(15,558)
|
|
746
|
Loss from
continuing operations
|
(3,932)
|
|
(3,421)
|
|
(79,256)
|
|
(5,285)
|
Income (loss) from
discontinued operations, net of tax
|
-
|
|
319
|
|
-
|
|
(13,621)
|
Net
loss
|
(3,932)
|
|
(3,102)
|
|
(79,256)
|
|
(18,906)
|
Net loss
attributable to noncontrolling interests
|
-
|
|
-
|
|
357
|
|
-
|
Net loss
attributable to Flotek Industries, Inc. (Flotek)
|
$
(3,932)
|
|
$
(3,102)
|
|
$ (78,899)
|
|
$ (18,906)
|
|
|
|
|
|
|
|
|
Amounts
attributable to Flotek shareholders:
|
|
|
|
|
|
|
|
Loss from continuing
operations
|
$
(3,932)
|
|
$
(3,421)
|
|
$ (78,899)
|
|
$
(5,285)
|
Income (loss) from
discontinued operations, net of tax
|
-
|
|
319
|
|
-
|
|
(13,621)
|
Net loss attributable
to Flotek
|
$
(3,932)
|
|
$
(3,102)
|
|
$ (78,899)
|
|
$ (18,906)
|
Basic earnings
(loss) per common share:
|
|
|
|
|
|
|
|
Continuing
operations
|
$
(0.07)
|
|
$
(0.06)
|
|
$
(1.36)
|
|
$
(0.09)
|
Discontinued
operations, net of tax
|
-
|
|
0.01
|
|
-
|
|
(0.24)
|
Basic earnings (loss)
per common share
|
$
(0.07)
|
|
$
(0.05)
|
|
$
(1.36)
|
|
$
(0.33)
|
Diluted earnings
(loss) per common share:
|
|
|
|
|
|
|
|
Continuing
operations
|
$
(0.07)
|
|
$
(0.06)
|
|
$
(1.36)
|
|
$
(0.09)
|
Discontinued
operations, net of tax
|
-
|
|
0.01
|
|
-
|
|
(0.24)
|
Diluted earnings
(loss) per common share
|
$
(0.07)
|
|
$
(0.05)
|
|
$
(1.36)
|
|
$
(0.33)
|
Weighted average
common shares:
|
|
|
|
|
|
|
|
Weighted average
common shares used in computing basic earnings (loss) per common
share
|
58,319
|
|
57,602
|
|
57,820
|
|
57,709
|
Weighted average
common shares used in computing diluted earnings (loss) per common
share
|
58,319
|
|
57,602
|
|
57,820
|
|
57,709
|
Flotek Industries,
Inc.
|
Unaudited
Condensed Consolidated Statements of Cash Flows
|
(in
thousands)
|
|
Nine Months
Ended
|
|
9/30/2018
|
|
9/30/2017
|
Cash flows from
operating activities:
|
|
|
|
Net loss attributable
to Flotek Industries, Inc. (Flotek)
|
$ (78,899)
|
|
$ (18,906)
|
Loss from
discontinued operations, net of tax
|
-
|
|
(13,621)
|
Loss from continuing
operations
|
(78,899)
|
|
(5,285)
|
Adjustments to
reconcile loss from continuing operations to net cash (used in)
provided by operating activities:
|
|
|
|
Depreciation and
amortization
|
8,984
|
|
9,091
|
Amortization of
deferred financing costs
|
294
|
|
376
|
Provision for excess
and obsolete inventory
|
1,817
|
|
390
|
Impairment of
goodwill
|
37,180
|
|
-
|
Loss on sale of
business
|
360
|
|
-
|
Loss on write-down of
assets held for sale
|
2,580
|
|
-
|
Loss on sale of
assets
|
119
|
|
401
|
Stock compensation
expense
|
6,570
|
|
9,679
|
Deferred income tax
provision (benefit)
|
15,359
|
|
(8,290)
|
Reduction in tax
benefit related to share-based awards
|
312
|
|
915
|
Changes in current
assets and liabilities:
|
|
|
|
Accounts receivable,
net
|
(9,512)
|
|
(8,704)
|
Inventories,
net
|
(19,276)
|
|
(12,603)
|
Income taxes
receivable
|
58
|
|
9,254
|
Other current
assets
|
1,779
|
|
12,649
|
Accounts
payable
|
8,493
|
|
(8,262)
|
Accrued
liabilities
|
(82)
|
|
1,561
|
Interest
payable
|
(37)
|
|
6
|
Net cash (used in)
provided by operating activities
|
(23,901)
|
|
1,178
|
Cash flows from
investing activities:
|
|
|
|
Capital
expenditures
|
(4,561)
|
|
(6,155)
|
Proceeds from sales
of businesses
|
1,665
|
|
18,490
|
Proceeds from sale of
assets
|
361
|
|
321
|
Purchase of patents
and other intangible assets
|
(1,500)
|
|
(817)
|
Net cash (used in)
provided by investing activities
|
(4,035)
|
|
11,839
|
Cash flows from
financing activities:
|
|
|
|
Repayments of
indebtedness
|
-
|
|
(9,833)
|
Borrowings on
revolving credit facility
|
213,612
|
|
310,021
|
Repayments on
revolving credit facility
|
(188,160)
|
|
(307,998)
|
Debt issuance
costs
|
(98)
|
|
(106)
|
Purchase of treasury
stock related to share-based awards
|
(91)
|
|
(1,500)
|
Proceeds from sale of
common stock
|
341
|
|
530
|
Repurchase of common
stock
|
-
|
|
(4,174)
|
Proceeds from
exercise of stock options
|
-
|
|
21
|
Loss from
noncontrolling interest
|
(357)
|
|
-
|
Net cash provided by
(used in) financing activities
|
25,247
|
|
(13,039)
|
Discontinued
operations:
|
|
|
|
Net cash used in
operating activities
|
-
|
|
(695)
|
Net cash provided by
investing activities
|
-
|
|
708
|
Net cash flows
provided by discontinued operations
|
-
|
|
13
|
Effect of changes in
exchange rates on cash and cash equivalents
|
(66)
|
|
128
|
Net (decrease)
increase in cash and cash equivalents
|
(2,755)
|
|
119
|
Cash and cash
equivalents at the beginning of period
|
4,584
|
|
4,823
|
Cash and cash
equivalents at the end of period
|
$
1,829
|
|
$
4,942
|
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
|
|
Nine Months
Ended
|
|
|
9/30/2018
|
|
9/30/2017
|
|
9/30/2018
|
|
9/30/2017
|
|
|
(in thousands,
except per share data)
|
|
|
|
|
|
|
|
|
|
Income (Loss) from
Continuing Operations (GAAP)
|
$
(3,932)
|
|
$
(3,421)
|
|
$ (78,899)
|
|
$
(5,285)
|
|
|
|
|
|
|
|
|
|
|
Deferred Tax Asset
Valuation Allowance
|
158
|
|
-
|
|
21,779
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Select Items
Impacting Earnings, net of tax
|
284
|
|
-
|
|
33,793
|
|
1,194
|
|
|
|
|
|
|
|
|
|
Adjusted Net
Income (Loss) (Non-GAAP)
|
$
(3,490)
|
|
$
(3,421)
|
|
$ (23,327)
|
|
$
(4,091)
|
|
|
|
|
|
|
|
|
|
Weighted Average
Shares Outstanding (Fully Diluted)
|
58,319
|
|
57,602
|
|
57,820
|
|
57,709
|
|
|
|
|
|
|
|
|
|
Adjusted Earnings
(Loss) Per Share (Fully Diluted)
|
$
(0.06)
|
|
$
(0.06)
|
|
$
(0.40)
|
|
$
(0.07)
|
|
|
|
|
|
|
|
|
|
Select Items
Impacting Earnings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive
Retirement:
|
|
|
|
|
|
|
|
|
Stock Compensation
Expense
|
-
|
|
-
|
|
-
|
|
887
|
|
Cash
Payments
|
-
|
|
-
|
|
-
|
|
950
|
|
|
|
|
|
|
|
|
|
|
Loss on Sale of
Business
|
360
|
|
-
|
|
360
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Inventory
Write-down
|
-
|
|
-
|
|
1,000
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Impairment of
Goodwill
|
-
|
|
-
|
|
37,180
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Loss on Write-down of
Assets Held For Sale
|
-
|
|
-
|
|
2,580
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Discontinuation of
Corporate Projects
|
-
|
|
-
|
|
1,220
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Expenses Relating to
Closing of Business Venture
|
-
|
|
-
|
|
436
|
|
-
|
|
|
|
|
|
|
|
|
|
Total Select
Items
|
$
360
|
|
$
-
|
|
$
42,776
|
|
$
1,837
|
|
|
|
|
|
|
|
|
|
|
Less income tax
effect at 21% for 2018 and 35% for 2017
|
(76)
|
|
-
|
|
(8,983)
|
|
(643)
|
|
|
|
|
|
|
|
|
|
|
Select Items
Impacting Earnings, net of tax
|
$
284
|
|
$
-
|
|
$
33,793
|
|
$
1,194
|
|
* Management believes
that adjusted Net Income for the three and nine months ended
September 30, 2018, and September 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
|
|
Nine Months
Ended
|
|
|
|
9/30/2018
|
|
9/30/2017
|
|
9/30/2018
|
|
9/30/2017
|
|
|
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
Income (Loss) from
Continuing Operations (GAAP)
|
|
$
(3,932)
|
|
$
(3,421)
|
|
$
(78,899)
|
|
$
(5,285)
|
|
|
|
|
|
|
|
|
|
|
|
Interest
Expense
|
|
746
|
|
574
|
|
1,902
|
|
1,718
|
|
|
|
|
|
|
|
|
|
|
|
Income Tax (Benefit)
Expense
|
|
(327)
|
|
17
|
|
15,558
|
|
(746)
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
Amortization
|
|
2,957
|
|
3,067
|
|
8,984
|
|
9,091
|
|
|
|
|
|
|
|
|
|
|
EBITDA
(Non-GAAP)
|
|
$
(556)
|
|
$
237
|
|
$
(52,455)
|
|
$
4,778
|
|
|
|
|
|
|
|
|
|
|
|
Stock Compensation
Expense
|
|
2,185
|
|
3,026
|
|
6,570
|
|
9,679
|
|
|
|
|
|
|
|
|
|
|
|
Loss (Gain) on Sale
of Assets
|
|
58
|
|
(11)
|
|
119
|
|
401
|
|
|
|
|
|
|
|
|
|
|
|
Loss on Sale of
Business
|
|
360
|
|
-
|
|
360
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Inventory
Write-down
|
|
-
|
|
-
|
|
1,000
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Impairment of
Goodwill
|
|
-
|
|
-
|
|
37,180
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Loss on Write-down of
Assets Held For Sale
|
|
-
|
|
-
|
|
2,580
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Discontinuation of
Corporate Projects
|
|
-
|
|
-
|
|
1,220
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Expenses Relating to
Closing of Business Venture
|
|
-
|
|
-
|
|
436
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Cash Executive
Retirement Expense
|
|
-
|
|
-
|
|
-
|
|
950
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
(Non-GAAP)
|
|
$
2,047
|
|
$
3,252
|
|
$
(2,990)
|
|
$
15,808
|
|
|
|
|
|
|
|
|
|
|
* Management believes
that adjusted EBITDA for the three and nine months ended September
30, 2018, and September 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
|
|
Nine Months
Ended
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
|
9/30/2018
|
|
9/30/2017
|
|
9/30/2018
|
|
9/30/2017
|
|
9/30/2018
|
|
9/30/2017
|
|
9/30/2018
|
|
9/30/2017
|
|
|
|
(in
thousands)
|
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Net Income
(GAAP)
|
|
$
3,920
|
|
$
6,867
|
|
$ (34,175)
|
|
$
24,715
|
|
$
858
|
|
$
985
|
|
$
3,937
|
|
$
5,906
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest Expense
(a)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Tax Expense
(a)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
Amortization
|
|
1,734
|
|
1,863
|
|
5,300
|
|
5,507
|
|
699
|
|
590
|
|
2,049
|
|
1,752
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment EBITDA
(Non-GAAP)
|
|
$
5,654
|
|
$
8,730
|
|
$ (28,875)
|
|
$
30,222
|
|
$
1,557
|
|
$
1,575
|
|
$
5,986
|
|
$
7,658
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Compensation
Expense
|
|
153
|
|
441
|
|
559
|
|
1,510
|
|
(128)
|
|
171
|
|
-
|
|
462
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
R&I
Allocation
|
|
2,350
|
|
2,575
|
|
8,054
|
|
9,594
|
|
161
|
|
116
|
|
483
|
|
346
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on Sale of
Assets
|
|
57
|
|
(5)
|
|
119
|
|
407
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventory
Write-down
|
|
-
|
|
-
|
|
1,000
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment of
Goodwill
|
|
-
|
|
-
|
|
37,180
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Adjusted
EBITDA (Non-GAAP)
|
|
$
8,214
|
|
$
11,741
|
|
$
18,037
|
|
$
41,733
|
|
$
1,590
|
|
$
1,862
|
|
$
6,469
|
|
$
8,466
|
|
(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 nine months ended September
30, 2018, and September 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 to download
multimedia:http://www.prnewswire.com/news-releases/flotek-industries-inc-announces-third-quarter-2018-results-300745104.html
SOURCE Flotek Industries, Inc.