HOUSTON, Nov. 11, 2019 /PRNewswire/ -- Flotek
Industries, Inc. ("Flotek" or the "Company") (NYSE: FTK) today
announced results for the three months ended September 30, 2019. As the results of the
Company's Consumer and Industrial Chemistry Technologies ("CICT")
segment are presented as discontinued operations for all periods,
the financial discussion and comparisons substantially relate to
Flotek's continuing operations, or its Energy Chemistry
Technologies ("ECT") segment.
Third Quarter and Recent Highlights
- Generated revenue of $21.9
million, a net loss from continuing operations of
$11.2 million and an adjusted
earnings before interest, taxes, depreciation and amortization
("adjusted EBITDA") loss of $8.1
million, in comparison to revenue of $34.7 million, a net loss from continuing
operations of $13.0 million and an
adjusted EBITDA loss of $9.6 million
for the second quarter of 2019.
- Revenue and results for the third quarter were directly
impacted by a continued volatile macro-environment for U.S. onshore
drilling and completion activity and the transition in Flotek's
sales force, partially offset by Flotek's previously announced cost
reduction efforts.
- Reduced operating and corporate general administrative expenses
from the second quarter, including benefiting from cost-cutting
initiatives that were implemented in mid-July. Flotek has also
identified and executed on more than $3.5
million of additional annualized cost reductions in the
fourth quarter that are primarily related to operating expenses.
During 2019, the Company has executed on a series of cost-cutting
initiatives that reduce Flotek's annual fixed cash costs by
approximately $30 million across the
enterprise.
- Identified and began to implement strategies to drive greater
profitability through order-to-cash efficiencies, including process
enhancements to sales, manufacturing, supply chain and logistics.
While the full process transformation is scheduled for completion
by the end of the fourth quarter, Flotek currently estimates these
targeted improvements could reduce operating expenses by more than
$5 million on annualized basis.
- The Company's Strategic Capital Committee continues to evaluate
alternatives for the optimal allocation of the net proceeds from
the sale of Florida Chemical Company, LLC to Archer-Daniels-Midland
Company (the "Transaction") in the first quarter of 2019.
Adjusted EBITDA is a Non-GAAP financial measure and is
described and reconciled to the closest GAAP measure in the
attached tables at the end of this release.
Elizabeth Wilkinson, Flotek's
Chief Financial Officer, commented, "Supporting our drive to
achieve long-term profitability, we have made significant progress
during 2019 in optimizing our cost structure and these efforts will
continue. We have also identified further operational changes that
improve the effectiveness and efficiency of our sales,
manufacturing, supply chain and logistics processes and will lower
our breakeven revenue level by more than 10%, even in the current
operating environment. In addition to these efforts, we remain
extremely focused on leveraging our enhanced sales team and are
increasingly engaging with operators of scale that are seeking to
deploy reservoir-centric chemistries to improve their asset
productivity."
Third Quarter 2019 Financial Results
For the three months ended September 30,
2019, Flotek reported revenue of $21.9 million versus $34.7
million for the second quarter and $53.7 million for the same period in 2018.
Primarily impacting sequential revenue was the prevously discussed
environment for U.S. land oil and gas development operations.
Flotek reported a loss from continuing operations for the three
months ended September 30, 2019 of
$11.2 million, or $0.19 loss per diluted share, compared to a loss
of $13.0 million, or $0.22 loss per diluted share, for the second
quarter, and a loss of $4.8 million,
or $0.08 loss per diluted share, in
the same period of 2018.
Adjusted net loss from continuing operations for the three
months ended September 30, 2019 was
$10.7 million, or $0.18 per diluted share, versus $12.3 million, or $0.21 per diluted share, for the second quarter,
and $4.4 million, or $0.08 per diluted share, in the same period of
2018. (See the 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, 2019 was a loss of $9.9 million compared to a loss of $11.7 million for the second quarter, and a loss
of $2.2 million for the same period
in 2018. (See the Reconciliation of Non-GAAP Items and Non-Cash
Items Impacting Earnings at the conclusion of this release.)
Adjusted EBITDA for the three months ended September 30, 2019 was a loss of $8.1 million versus a loss of $9.6 million for the second quarter and a
positive $0.5 million for the same
period in 2018. Contributing to the decreased loss from the second
quarter were lower operating expenses as a percent of revenue
primarily due to the Company's cost reduction efforts, including
improved logistics efficiencies and lower personnel expenses.
Management believes that adjusted EBITDA provides useful
information to investors to better assess and understand operating
performance and cash flows. (See the Reconciliation of Non-GAAP
Items and Non-Cash Items Impacting Earnings at the conclusion of
this release.)
Balance Sheet and Liquidity
As of September 30, 2019, the
Company had cash and equivalents of $107.0
million as compared to $97.5
million at June 30, 2019.
Significantly contributing to the sequential quarterly net increase
in cash and equivalents was a decrease in net accounts receivable,
with a days sales outstanding of 70 days at the end of the third
quarter compared to 85 days as of June 30,
2019. In addition, as scheduled, Flotek collected
$3.3 million of the indemnity escrow
established at the closing of the Transaction earlier this year
and managed its inventory balances to a slightly lower level.
At September 30, 2019, the Company
had no outstanding debt and $12.5
million in escrowed funds on the balance sheet, reflecting
both the Company's estimate of its claim to the post-closing
adjustment working capital escrow and the remaining balance of the
indemnity escrow related to the Transaction.
Outlook
John Chisholm, Flotek's Chief
Executive Officer, concluded, "2019 has clearly been challenging
for substantially all oilfield service providers with U.S. onshore
operations as E&P companies strive to operate within cash flow
and generate attractive returns for their shareholders. The result
has been an intense focus on drilling and completion costs by
operators as they execute their extensive well inventory
development programs. In this environment, oilfield service
providers have been under pressure to lower costs, while providing
E&Ps superior offerings and technical differentiation.
"We have responded by transitioning our business into a
reservoir-centric chemistry services company that partners with our
clients to increase asset productivity. The Company is taking a
number of proactive measures to enhance its offerings along with
its operations and sales capabilities. As E&Ps face increasing
complexity surrounding well spacing and optimized completions
variables, Flotek is working alongside its clients' subsurface
teams to validate the positive impact that fluid chemistries
tailored for the reservoir have in increasing hydrocarbon recovery
and enhancing the total cost of ownership of their assets. We look
forward to continuing our close collaboration with our clients as
they seek differentiated and cost-effective solutions for their
complex technical challenges."
Conference Call Details
Flotek will host a conference call on Tuesday, November 12, at 9:00 AM CT (10:00 AM
ET) to discuss its operating results for the three months
ended September 30, 2019. To
participate in the call, participants should dial 844-835-9986
approximately five minutes prior to the start of the call. The call
can also be accessed from Flotek's website at www.flotekind.com. In
addition, the Company has updated its corporate presentation, which
is also available on its website.
About Flotek Industries, Inc.
Flotek develops and delivers prescriptive, reservoir-centric
chemistry technologies to oil and gas clients designed to address
every challenge in the lifecycle of the reservoir and maximize
recovery in both new and mature fields. Flotek's inspired chemists
draw from the power of bio-derived solvents to deliver solutions
that enhance energy production. 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 website 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,
2019
|
|
December 31,
2018
|
ASSETS
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
106,994
|
|
$
3,044
|
Restricted
cash
|
663
|
|
—
|
Accounts receivable,
net of allowance for doubtful accounts of $1,520 and $1,190 at
September 30, 2019 and December 31, 2018, respectively
|
15,014
|
|
37,047
|
Inventories,
net
|
24,333
|
|
27,289
|
Income taxes
receivable
|
313
|
|
3,161
|
Assets held for
sale
|
—
|
|
118,470
|
Other current
assets
|
19,181
|
|
5,771
|
Total current
assets
|
166,498
|
|
194,782
|
Property and
equipment, net
|
41,180
|
|
45,485
|
Operating lease
right-of-use assets
|
17,625
|
|
—
|
Deferred tax assets,
net
|
476
|
|
18,663
|
Other intangible
assets, net
|
23,578
|
|
26,827
|
Other long-term
assets
|
—
|
|
126
|
TOTAL
ASSETS
|
$
249,357
|
|
$
285,883
|
LIABILITIES AND
STOCKHOLDERS' & EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
10,578
|
|
$
15,011
|
Accrued
liabilities
|
7,797
|
|
10,335
|
Income taxes
payable
|
276
|
|
—
|
Interest
payable
|
—
|
|
8
|
Liabilities held for
sale
|
—
|
|
9,174
|
Current portion of
lease liabilities
|
762
|
|
—
|
Long-term debt,
classified as current
|
—
|
|
49,731
|
Total current
liabilities
|
19,413
|
|
84,259
|
Long-term operating
lease liabilities
|
17,945
|
|
—
|
Long-term finance
lease liabilities
|
172
|
|
—
|
Deferred tax
liabilities, net
|
116
|
|
—
|
Total
liabilities
|
37,646
|
|
84,259
|
Commitments and
contingencies
|
|
|
|
Stockholders' &
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; 63,038,397 shares issued
and 58,909,280 shares outstanding at September 30, 2019; 62,162,875
shares issued and 57,342,279 shares outstanding at
December 31, 2018
|
6
|
|
6
|
Additional paid-in
capital
|
346,392
|
|
343,536
|
Accumulated other
comprehensive loss
|
(962)
|
|
(1,116)
|
Retained earnings
(accumulated deficit)
|
(100,281)
|
|
(107,565)
|
Treasury stock, at
cost 4,129,117 and 3,770,224 shares at September 30, 2019 and
December 31, 2018, respectively
|
(33,444)
|
|
(33,237)
|
|
211,711
|
|
201,624
|
|
$
249,357
|
|
$
285,883
|
Flotek Industries,
Inc.
|
Unaudited
Condensed Consolidated Statements of Operations
|
(in thousands,
except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
9/30/2019
|
|
9/30/2018
|
|
6/30/2019
|
|
9/30/2019
|
|
9/30/2018
|
|
|
|
|
|
|
|
|
Revenue
|
$
21,879
|
|
$
53,709
|
|
$
34,692
|
|
$
99,827
|
|
$ 134,324
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
|
Operating expenses
(excluding depreciation and amortization)
|
23,689
|
|
45,647
|
|
38,306
|
|
106,593
|
|
117,848
|
Corporate general and
administrative
|
5,685
|
|
7,476
|
|
6,054
|
|
19,020
|
|
24,634
|
Depreciation and
amortization
|
2,058
|
|
2,259
|
|
2,119
|
|
6,437
|
|
6,935
|
Research and
development
|
2,297
|
|
2,350
|
|
2,076
|
|
6,657
|
|
8,054
|
(Gain)/loss on
disposal of long-lived assets
|
3
|
|
57
|
|
(4)
|
|
1,096
|
|
119
|
Impairment of
goodwill
|
—
|
|
—
|
|
—
|
|
—
|
|
37,180
|
Total costs and
expenses
|
33,732
|
|
57,789
|
|
48,551
|
|
139,803
|
|
194,770
|
Loss from
operations
|
(11,853)
|
|
(4,080)
|
|
(13,859)
|
|
(39,976)
|
|
(60,446)
|
Other (expense)
income:
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
(1)
|
|
(746)
|
|
(16)
|
|
(2,014)
|
|
(1,902)
|
Loss on sale of
business
|
|
|
(360)
|
|
—
|
|
—
|
|
(360)
|
Loss on write-down of
assets held for sale
|
—
|
|
—
|
|
—
|
|
—
|
|
(2,580)
|
Other income
(expense), net
|
436
|
|
10
|
|
693
|
|
1,236
|
|
(2,599)
|
Total other
expense
|
435
|
|
(1,096)
|
|
677
|
|
(778)
|
|
(7,441)
|
Loss before income
taxes
|
(11,418)
|
|
(5,176)
|
|
(13,182)
|
|
(40,754)
|
|
(67,887)
|
Income tax benefit
(expense)
|
191
|
|
333
|
|
192
|
|
1,157
|
|
(15,545)
|
Loss from
continuing operations
|
(11,227)
|
|
(4,843)
|
|
(12,990)
|
|
(39,597)
|
|
(83,432)
|
Income (loss) from
discontinued operations, net of tax
|
117
|
|
911
|
|
(1,608)
|
|
46,881
|
|
4,176
|
Net income
(loss)
|
(11,110)
|
|
(3,932)
|
|
(14,598)
|
|
7,284
|
|
(79,256)
|
Net income
attributable to noncontrolling interests
|
—
|
|
—
|
|
—
|
|
—
|
|
357
|
Net income (loss)
attributable to Flotek Industries, Inc. (Flotek)
|
$ (11,110)
|
|
$
(3,932)
|
|
$ (14,598)
|
|
$
7,284
|
|
$ (78,899)
|
|
|
|
|
|
|
|
|
|
|
Amounts
attributable to Flotek shareholders:
|
|
|
|
|
|
|
|
|
|
Loss from continuing
operations
|
$ (11,227)
|
|
$
(4,843)
|
|
$ (12,990)
|
|
$ (39,597)
|
|
$ (83,075)
|
Income (loss) from
discontinued operations, net of tax
|
117
|
|
911
|
|
(1,608)
|
|
46,881
|
|
4,176
|
Net income (loss)
attributable to Flotek
|
$ (11,110)
|
|
$
(3,932)
|
|
$ (14,598)
|
|
$
7,284
|
|
$ (78,899)
|
Basic earnings
(loss) per common share:
|
|
|
|
|
|
|
|
|
|
Continuing
operations
|
$
(0.19)
|
|
$
(0.08)
|
|
$
(0.22)
|
|
$
(0.67)
|
|
$
(1.44)
|
Discontinued
operations, net of tax
|
-
|
|
0.02
|
|
(0.03)
|
|
0.80
|
|
0.07
|
Basic earnings (loss)
per common share
|
$
(0.19)
|
|
$
(0.06)
|
|
$
(0.25)
|
|
$
0.13
|
|
$
(1.37)
|
Diluted earnings
(loss) per common share:
|
|
|
|
|
|
|
|
|
|
Continuing
operations
|
$
(0.19)
|
|
$
(0.08)
|
|
$
(0.22)
|
|
$
(0.67)
|
|
$
(1.44)
|
Discontinued
operations, net of tax
|
-
|
|
0.02
|
|
(0.03)
|
|
0.80
|
|
0.07
|
Diluted earnings
(loss) per common share
|
$
(0.19)
|
|
$
(0.06)
|
|
$
(0.25)
|
|
$
0.13
|
|
$
(1.37)
|
Weighted average
common shares:
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares used in computing basic earnings (loss) per common
share
|
59,004
|
|
58,319
|
|
58,608
|
|
58,725
|
|
57,820
|
Weighted average
common shares used in computing diluted earnings (loss) per common
share
|
59,004
|
|
53,319
|
|
58,608
|
|
58,725
|
|
57,820
|
Flotek Industries,
Inc.
|
Unaudited
Condensed Consolidated Statements of Cash Flows
|
(in
thousands)
|
|
|
|
|
|
Nine Months
Ended
|
|
9/30/2019
|
|
9/30/2018
|
Cash flows from
operating activities:
|
|
|
|
Net income (loss)
attributable to Flotek Industries, Inc. (Flotek)
|
$
7,284
|
|
$ (78,899)
|
Income from
discontinued operations, net of tax
|
46,881
|
|
4,176
|
Loss from continuing
operations
|
(39,597)
|
|
(83,075)
|
Adjustments to
reconcile loss from continuing operations to net cash (used in)
operating activities:
|
|
|
|
Depreciation and
amortization
|
6,437
|
|
6,935
|
Amortization of
deferred financing costs
|
1,428
|
|
294
|
Provision for
doubtful accounts
|
426
|
|
176
|
Provision for excess
and obsolete inventory
|
-
|
|
1,817
|
Impairment of
goodwill
|
-
|
|
37,180
|
Loss on sale of
business
|
-
|
|
360
|
Loss on write-down of
assets held for sale
|
-
|
|
2,580
|
Loss on disposal of
long-lived assets
|
1,096
|
|
119
|
Non-cash lease
expense
|
813
|
|
-
|
Stock compensation
expense
|
2,829
|
|
6,594
|
Deferred income tax
provision
|
17,983
|
|
15,358
|
Reduction in tax
benefit related to share-based awards
|
24
|
|
312
|
Changes in current
assets and liabilities:
|
|
|
|
Restricted
cash
|
(663)
|
|
-
|
Accounts receivable,
net
|
21,629
|
|
(10,392)
|
Inventories,
net
|
3,000
|
|
(1,490)
|
Income taxes
receivable
|
2,853
|
|
58
|
Other current
assets
|
(14,974)
|
|
1,759
|
Accounts
payable
|
(4,434)
|
|
5,672
|
Accrued
liabilities
|
(13,122)
|
|
(9,001)
|
Income taxes
payable
|
595
|
|
-
|
Interest
payable
|
(8)
|
|
(37)
|
Net cash (used in)
operating activities
|
(13,685)
|
|
(24,781)
|
Cash flows from
investing activities:
|
|
|
|
Capital
expenditures
|
(1,869)
|
|
(3,965)
|
Proceeds from sales
of businesses
|
169,722
|
|
1,665
|
Proceeds from sale of
assets
|
234
|
|
361
|
Purchase of patents
and other intangible assets
|
(590)
|
|
(1,466)
|
Net cash (used in)
provided by investing activities
|
167,497
|
|
(3,405)
|
Cash flows from
financing activities:
|
|
|
|
Borrowings on
revolving credit facility
|
42,984
|
|
213,612
|
Repayments on
revolving credit facility
|
(92,715)
|
|
(188,160)
|
Debt issuance
costs
|
-
|
|
(98)
|
Purchase of treasury
stock related to share-based awards
|
(207)
|
|
(91)
|
Proceeds from sale of
common stock
|
7
|
|
341
|
Payments for finance
leases
|
51
|
|
-
|
Loss from
noncontrolling interest
|
-
|
|
(357)
|
Net cash (used in)
provided by financing activities
|
(49,880)
|
|
25,247
|
Discontinued
operations:
|
|
|
|
Net cash (used in)
provided by operating activities
|
(321)
|
|
880
|
Net cash (used in)
provided by investing activities
|
337
|
|
(630)
|
Net cash flows
provided by discontinued operations
|
16
|
|
250
|
Effect of changes in
exchange rates on cash and cash equivalents
|
2
|
|
(66)
|
Net increase
(decrease) in cash and cash equivalents
|
103,950
|
|
(2,755)
|
Cash and cash
equivalents at the beginning of period
|
3,044
|
|
4,584
|
Cash and cash
equivalents at the end of period
|
$ 106,994
|
|
$
1,829
|
Flotek Industries,
Inc.
|
Unaudited
Reconciliation of Non-GAAP Items and Non-Cash Items Impacting
Earnings
|
(in thousands,
except per share data)
|
|
GAAP Loss from
Continuing Operations and Reconciliation to Adjusted Net Loss
(Non-GAAP)
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
9/30/2019
|
|
9/30/2018
|
|
6/30/2019
|
|
9/30/2019
|
|
9/30/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from
Continuing Operations (GAAP)
|
$(11,227)
|
|
$
(4,843)
|
|
$(12,990)
|
|
$(39,597)
|
|
$(83,432)
|
|
|
|
|
|
|
|
|
|
|
|
|
Select Items
Impacting Earnings, net of tax
|
525
|
|
412
|
|
729
|
|
4,619
|
|
34,066
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net Loss
(Non-GAAP)
|
$(10,702)
|
|
$
(4,431)
|
|
$(12,261)
|
|
$(34,978)
|
|
$(49,366)
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average
Shares Outstanding (Fully Diluted)
|
59,004
|
|
58,319
|
|
58,608
|
|
58,725
|
|
57,820
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Loss Per
Share (Fully Diluted)
|
$
(0.18)
|
|
$
(0.08)
|
|
$
(0.21)
|
|
$
(0.60)
|
|
$
(0.85)
|
|
|
|
|
|
|
|
|
|
|
|
Select Items
Impacting Earnings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance and
Retirement
|
658
|
|
105
|
|
356
|
|
2,735
|
|
227
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholder-Related
Activities
|
4
|
|
-
|
|
71
|
|
656
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Operations Related
Contract Termination
|
-
|
|
-
|
|
500
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventory
Write-down
|
-
|
|
-
|
|
-
|
|
-
|
|
1,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment of
Goodwill
|
-
|
|
-
|
|
-
|
|
-
|
|
37,180
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred Financing
Costs
|
-
|
|
-
|
|
-
|
|
1,360
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on Sale of
Business
|
-
|
|
360
|
|
-
|
|
-
|
|
360
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on Write-down of
Assets Held for Sale
|
-
|
|
-
|
|
-
|
|
-
|
|
2,580
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss (Gain) on
Disposal of Assets
|
3
|
|
57
|
|
(4)
|
|
1,096
|
|
119
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinuation of
Corporate Projects
|
-
|
|
-
|
|
-
|
|
-
|
|
1,220
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses Relating to
Closing of Business Venture
|
-
|
|
-
|
|
-
|
|
-
|
|
436
|
|
|
|
|
|
|
|
|
|
|
|
Total Select
Items
|
$
665
|
|
$
522
|
|
$
923
|
|
$
5,847
|
|
$
43,122
|
|
|
|
|
|
|
|
|
|
|
|
|
Less income tax
effect (21%)
|
(140)
|
|
(110)
|
|
(194)
|
|
(1,228)
|
|
(9,056)
|
|
|
|
|
|
|
|
|
|
|
|
|
Select Items
Impacting Earnings, net of tax
|
$
525
|
|
$
412
|
|
$
729
|
|
$
4,619
|
|
$
34,066
|
|
* Management believes
that adjusted Net Income for the three and nine months ended
September 30, 2019 and September 30, 2018, and the three months
ended June 30, 2019, 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 Loss from
Continuing Operations and Reconciliation to Adjusted EBITDA
(Non-GAAP)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
9/30/2019
|
|
9/30/2018
|
|
6/30/2019
|
|
9/30/2019
|
|
9/30/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from
Continuing Operations (GAAP)
|
$(11,227)
|
|
$
(4,843)
|
|
$(12,990)
|
|
$(39,597)
|
|
$(83,432)
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
Expense
|
1
|
|
746
|
|
16
|
|
2,014
|
|
1,902
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
Income
|
(571)
|
|
(53)
|
|
(685)
|
|
(1,483)
|
|
(288)
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Tax Benefit
Expense
|
(191)
|
|
(333)
|
|
(192)
|
|
(1,157)
|
|
15,545
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
Amortization
|
2,058
|
|
2,259
|
|
2,119
|
|
6,437
|
|
6,935
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
(Non-GAAP)
|
$
(9,930)
|
|
$
(2,224)
|
|
$(11,732)
|
|
$(33,786)
|
|
$(59,338)
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Compensation
Expense
|
1,160
|
|
2,185
|
|
1,213
|
|
2,829
|
|
6,594
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance and
Retirement
|
658
|
|
105
|
|
356
|
|
2,735
|
|
227
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholder-Related
Activities
|
4
|
|
-
|
|
71
|
|
656
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Operations Related
Contract Termination
|
-
|
|
-
|
|
500
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventory
Write-down
|
-
|
|
-
|
|
-
|
|
-
|
|
1,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment of
Goodwill
|
-
|
|
-
|
|
-
|
|
-
|
|
37,180
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on Sale of
Business
|
-
|
|
360
|
|
-
|
|
-
|
|
360
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on Write-down of
Assets Held for Sale
|
-
|
|
-
|
|
-
|
|
-
|
|
2,580
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss (Gain) on
Disposal of Assets
|
3
|
|
57
|
|
(4)
|
|
1,096
|
|
119
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinuation of
Corporate Projects
|
-
|
|
-
|
|
-
|
|
-
|
|
1,220
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses Relating to
Closing of Business Venture
|
-
|
|
-
|
|
-
|
|
-
|
|
436
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
(Non-GAAP)
|
$
(8,105)
|
|
$
483
|
|
$
(9,596)
|
|
$(26,470)
|
|
$
(9,622)
|
|
* Management believes
that adjusted EBITDA for the three and nine months ended September
30, 2019 and September 30, 2018, and the three months ended June
30, 2019, 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.
|
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SOURCE Flotek Industries, Inc.