HOUSTON, Aug. 7, 2019 /PRNewswire/ -- Flotek
Industries, Inc. ("Flotek" or the "Company") (NYSE: FTK) today
announced results for the three months ended June 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.
Second Quarter and Recent Highlights
- Quarter ending cash level of $97.5
million was neutral with the first quarter.
- Generated revenue of $34.7
million, a net loss from continuing operations of
$13.0 million and an adjusted
earnings before interest, taxes, depreciation and amortization
("adjusted EBITDA") loss of $9.6
million, in comparison to revenue of $43.3 million, a net loss from continuing
operations of $15.4 million and an
adjusted EBITDA loss of $8.3 million
for the first quarter of 2019.
- Within the context of the continued volatile macro-environment
for U.S. onshore drilling and completion activity, second quarter
operational results were directly impacted by the substantial
turnover of Flotek's sales team and commencement of the rebuilding
and development of a more technically oriented sales organization,
deferral of completion activity to the third quarter of 2019 by
certain clients, and utilization of performance-driven pricing
programs for a limited number of strategic clients.
- Continued to further optimize the cost structure across the
business through the identification of more than $5 million of annualized cost-cutting initiatives
that were implemented in mid-July and primarily associated with ECT
personnel and other operating expenses. To date for 2019, Flotek
has announced and executed on initiatives that reduce its annual
cash costs by more than $25 million
spread across the enterprise.
- Under the oversight of the Strategic Capital Committee,
continues to evaluate alternatives for the optimal allocation of
the net proceeds from the sale of Florida Chemical Company, LLC
("FCC") to Archer-Daniels-Midland Company ("ADM") (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.
John Chisholm, Flotek's President
and Chief Executive Officer, commented, "As discussed on our first
quarter call, we expected during the second quarter that the
oilfield services sector would – and in fact, did – continue to
operate in a volatile environment for U.S. onshore drilling and
completions activity. We anticipate a similar backdrop for the
third quarter, which is in-line with the consensus of other
oilfield service providers with U.S. land operations. While this
has impacted our results, it should not overshadow the important
progress we made during the second quarter on a number of key
fronts.
''First, I am extremely pleased with the progress we have made
to rebuild and reshape our sales organization since Mark Lewis joined the Company as Senior Vice
President of Global Sales & Business Development at the end of
April. In just a few short months, we have recruited a first-class
team of seasoned sales professionals with the diverse technical
backgrounds necessary to succeed in today's environment where
geologists, geophysicists, and reservoir and petroleum engineers
are not only influencing, but are increasingly responsible for, the
selection of chemistry technology. We look forward to seeing the
impact of our new sales team's efforts within the coming
quarters.
"Through our ongoing cost optimization initiatives, during the
second quarter we identified cost-cutting opportunities that we
implemented in mid-July. Also, in the second quarter, we conducted
an assessment to identify and prioritize additional opportunities
to reduce costs and drive greater profitability in the coming
months through order-to-cash efficiencies, including process
enhancements to sales, supply chain and logistics.
"As we further collaborate with oil and gas operators to
identify and define industry challenges, we are encouraged by the
opportunities to partner with our clients to provide
reservoir-centric chemistry solutions that drive greater capital
effectiveness and return on investment. We are also pleased with
the progress of our performance-driven pricing programs, which we
have utilized on a limited basis, and expect to see the positive
impact on revenue and profitability from these programs toward the
end of this year.
"Finally, our Strategic Capital Committee continued to make
important progress in the second quarter in its detailed review
that began with a deep-dive into the business and later moved into
an evaluation of the alternative possible uses for the significant
amount of cash on our balance sheet as a result of the sale of
Florida Chemical Company."
Second Quarter 2019 Financial Results
For the three months ended June 30,
2019, Flotek reported revenue of $34.7 million versus $43.3
million for the first quarter and $39.5 million for the same period in 2018. As
previously discussed, impacting sequential revenue was a continued
volatile macro-environment for U.S. onshore drilling and
completions activity, as well as the transition of personnel in the
Company's sales organization, the nearer-term impact related to the
deferral of completion activity to the third quarter of 2019 by
certain clients, and utilization of performance-driven pricing
programs for a limited number of strategic clients.
Flotek reported a loss from continuing operations for the three
months ended June 30, 2019 of
$13.0 million, or $0.22 loss per diluted share, compared to a loss
of $15.4 million, or $0.26 loss per diluted share, for the first
quarter, and a loss of $68.6 million,
or $1.19 loss per diluted share, in
the same period of 2018. Included in results for last year's second
quarter was $37.2 million in
before-tax charges related to impairment of goodwill for certain
assets.
Adjusted earnings from continuing operations for the three
months ended June 30, 2019 was a loss
of $12.3 million, or $0.21 loss per diluted share, versus a loss of
$11.6 million, or $0.20 loss per diluted share, for the first
quarter, and a loss of $36.2 million,
or $0.63 loss 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 June
30, 2019 was a loss of $11.7
million compared to a loss of $12.1
million for the first quarter, and a loss of $49.9 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 June 30, 2019 was a loss of $9.6 million versus a loss of $8.3 million for the first quarter and a loss of
$6.0 million for the same period in
2018. Contributing to the increased loss from the first quarter
were tighter operating margins partially offset by lower corporate
general and administrative and research and innovation 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 June 30, 2019, the Company
had cash and equivalents of $97.5
million as compared to $96.8
million at March 31, 2019. At
the end of the second quarter of 2019, Flotek also had no
outstanding debt and $15.7 million in
escrowed funds on the balance sheet, reflecting a revised estimate
of post-closing working capital adjustments related to the
Transaction. As of December 31, 2018,
the Company had cash and equivalents of $3.0
million and debt of $49.7
million.
Outlook
Mr. Chisholm concluded, "Over the last couple of years, we have
successfully transitioned our business and taken approximately
$21 million, or 44%, out of
annualized spending related to corporate general and administrative
and research and innovation support functions, excluding
stock-based compensation expense. These optimization efforts have
and will continue as we focus on managing our business to sustained
long-term profitability in a $50 to
$60 per barrel WTI price environment.
We continue to see a notable shift in purchasing behaviors in which
E&P companies are seeking greater transparency, control and
efficacy in their fluid systems. Moreover, as they see diminishing
returns on mechanical factors in their completion designs, they are
seeking partners who can provide technical expertise to help drive
greater value from their assets.
"In this environment, we have taken a number of proactive
measures to enhance our operations and sales capabilities,
resulting in deeper technical relationships with leading operators
who recognize that best-in-class, reservoir-centric chemistries
will be critical as they execute on their extensive inventory
development programs. We are beginning to see increased client
inquiries and technical report requests, which further supports our
optimism and positive longer-term outlook."
Conference Call Details
Flotek will host a conference call on Thursday, August 8, at 9:00 AM CT (10:00 AM
ET) to discuss its operating results for the three months
ended June 30, 2019. To participate
in the call, participants should dial 844-835-9986 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, 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)
|
|
|
|
June 30,
2019
|
|
December 31,
2018
|
ASSETS
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
97,509
|
|
$
3,044
|
Restricted
cash
|
661
|
|
-
|
Accounts receivable,
net of allowance for doubtful accounts of $1,676 and $1,190 at June
30, 2019 and December 31, 2018, respectively
|
30,694
|
|
37,047
|
Inventories,
net
|
26,442
|
|
27,289
|
Income taxes
receivable
|
3,467
|
|
3,161
|
Assets held for
sale
|
-
|
|
118,470
|
Other current
assets
|
20,406
|
|
5,771
|
Total current
assets
|
179,179
|
|
194,782
|
Property and
equipment, net
|
41,760
|
|
45,485
|
Operating lease
right-of-use assets
|
17,982
|
|
-
|
Deferred tax assets,
net
|
605
|
|
18,663
|
Other intangible
assets, net
|
24,290
|
|
26,827
|
Other long-term
assets
|
-
|
|
126
|
TOTAL
ASSETS
|
$
263,816
|
|
$
285,883
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
10,858
|
|
$
15,011
|
Accrued
liabilities
|
11,141
|
|
10,335
|
Income taxes
payable
|
862
|
|
-
|
Interest
payable
|
-
|
|
8
|
Liabilities held for
sale
|
-
|
|
9,174
|
Current portion of
lease liabilities
|
714
|
|
-
|
Long-term debt,
classified as current
|
-
|
|
49,731
|
Total current
liabilities
|
23,575
|
|
84,259
|
Long-term operating
lease liabilities
|
18,256
|
|
-
|
Long-term finance
lease liabilities
|
193
|
|
-
|
Deferred tax
liabilities, net
|
116
|
|
-
|
Total
liabilities
|
42,140
|
|
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; 62,955,872 shares issued
and 57,688,578 shares outstanding at June 30, 2019; 62,162,875
shares issued and 57,342,279 shares outstanding at
December 31, 2018
|
6
|
|
6
|
Additional paid-in
capital
|
345,217
|
|
343,536
|
Accumulated other
comprehensive loss
|
(998)
|
|
(1,116)
|
Retained earnings
(accumulated deficit)
|
(89,171)
|
|
(107,565)
|
Treasury stock, at
cost 3,947,982 and 3,770,224 shares at June 30, 2019 and
December 31, 2018, respectively
|
(33,378)
|
|
(33,237)
|
Total stockholders'
equity
|
221,676
|
|
201,624
|
TOTAL LIABILITIES
AND STOCKHOLDERS' EQUITY
|
$
263,816
|
|
$
285,883
|
Flotek Industries,
Inc.
|
Unaudited
Condensed Consolidated Statements of Operations
|
(in thousands,
except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
6/30/2019
|
|
6/30/2018
|
|
3/31/2019
|
|
6/30/2019
|
|
6/30/2018
|
|
|
|
|
|
|
|
|
Revenue
|
$
34,692
|
|
$
39,546
|
|
$
43,256
|
|
$
77,949
|
|
$
80,615
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
|
Operating expenses
(excluding depreciation and amortization)
|
38,306
|
|
35,544
|
|
44,599
|
|
82,904
|
|
72,199
|
Corporate general and
administrative
|
6,054
|
|
8,665
|
|
7,281
|
|
13,335
|
|
17,158
|
Depreciation and
amortization
|
2,119
|
|
2,343
|
|
2,260
|
|
4,379
|
|
4,676
|
Research and
development
|
2,076
|
|
2,949
|
|
2,285
|
|
4,360
|
|
5,704
|
(Gain)/loss on
disposal of long-lived assets
|
(4)
|
|
5
|
|
1,097
|
|
1,093
|
|
62
|
Impairment of
goodwill
|
-
|
|
37,180
|
|
-
|
|
-
|
|
37,180
|
Total costs and
expenses
|
48,551
|
|
86,686
|
|
57,522
|
|
106,071
|
|
136,979
|
Loss from
operations
|
(13,859)
|
|
(47,140)
|
|
(14,266)
|
|
(28,122)
|
|
(56,364)
|
Other (expense)
income:
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
(16)
|
|
(640)
|
|
(1,998)
|
|
(2,014)
|
|
(1,156)
|
Loss on write-down of
assets held for sale
|
-
|
|
(2,580)
|
|
-
|
|
-
|
|
(2,580)
|
Other income
(expense), net
|
693
|
|
(2,499)
|
|
110
|
|
800
|
|
(2,609)
|
Total other
expense
|
677
|
|
(5,719)
|
|
(1,888)
|
|
(1,214)
|
|
(6,345)
|
Loss before income
taxes
|
(13,182)
|
|
(52,859)
|
|
(16,154)
|
|
(29,336)
|
|
(62,709)
|
Income tax benefit
(expense)
|
192
|
|
(16,128)
|
|
774
|
|
966
|
|
(15,807)
|
Loss from
continuing operations
|
(12,990)
|
|
(68,987)
|
|
(15,380)
|
|
(28,370)
|
|
(78,516)
|
Income (loss) from
discontinued operations, net of tax
|
(1,608)
|
|
(6,404)
|
|
48,372
|
|
46,764
|
|
3,192
|
Net income
(loss)
|
(14,598)
|
|
(75,391)
|
|
32,992
|
|
18,394
|
|
(75,324)
|
Net income
attributable to noncontrolling interests
|
-
|
|
357
|
|
-
|
|
-
|
|
357
|
Net income (loss)
attributable to Flotek Industries, Inc. (Flotek)
|
$ (14,598)
|
|
$ (75,034)
|
|
$
32,992
|
|
$
18,394
|
|
$ (74,967)
|
|
|
|
|
|
|
|
|
|
|
Amounts
attributable to Flotek shareholders:
|
|
|
|
|
|
|
|
|
|
Loss from continuing
operations
|
$ (12,990)
|
|
$ (68,630)
|
|
$ (15,380)
|
|
$ (28,370)
|
|
$ (78,159)
|
Income (loss) from
discontinued operations, net of tax
|
(1,608)
|
|
(6,404)
|
|
48,372
|
|
46,764
|
|
3,192
|
Net income (loss)
attributable to Flotek
|
$ (14,598)
|
|
$ (75,034)
|
|
$
32,992
|
|
$
18,394
|
|
$ (74,967)
|
Basic earnings
(loss) per common share:
|
|
|
|
|
|
|
|
|
|
Continuing
operations
|
$
(0.22)
|
|
$
(1.19)
|
|
$
(0.26)
|
|
$
(0.49)
|
|
$
(1.36)
|
Discontinued
operations, net of tax
|
(0.03)
|
|
(0.11)
|
|
0.83
|
|
0.80
|
|
0.06
|
Basic earnings (loss)
per common share
|
$
(0.25)
|
|
$
(1.30)
|
|
$
0.57
|
|
$
0.31
|
|
$
(1.30)
|
Diluted earnings
(loss) per common share:
|
|
|
|
|
|
|
|
|
|
Continuing
operations
|
$
(0.22)
|
|
$
(1.19)
|
|
$
(0.26)
|
|
$
(0.49)
|
|
$
(1.36)
|
Discontinued
operations, net of tax
|
(0.03)
|
|
(0.11)
|
|
0.83
|
|
0.80
|
|
0.06
|
Diluted earnings
(loss) per common share
|
$
(0.25)
|
|
$
(1.30)
|
|
$
0.57
|
|
$
0.31
|
|
$
(1.30)
|
Weighted average
common shares:
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares used in computing basic earnings (loss) per common
share
|
58,608
|
|
57,869
|
|
58,373
|
|
58,491
|
|
57,566
|
Weighted average
common shares used in computing diluted earnings (loss) per common
share
|
58,608
|
|
57,869
|
|
58,373
|
|
58,491
|
|
57,566
|
Flotek Industries,
Inc.
|
Unaudited
Condensed Consolidated Statements of Cash Flows
|
(in
thousands)
|
|
Six Months
Ended
|
|
6/30/2019
|
|
6/30/2018
|
Cash flows from
operating activities:
|
|
|
|
Net income (loss)
attributable to Flotek Industries, Inc. (Flotek)
|
$
18,394
|
|
$ (74,967)
|
Income from
discontinued operations, net of tax
|
46,764
|
|
3,192
|
Loss from continuing
operations
|
(28,370)
|
|
(78,159)
|
Adjustments to
reconcile loss from continuing operations to net cash (used in)
operating activities:
|
|
|
|
Depreciation and
amortization
|
4,379
|
|
4,676
|
Amortization of
deferred financing costs
|
1,428
|
|
192
|
Provision for
doubtful accounts
|
102
|
|
(471)
|
Provision for excess
and obsolete inventory
|
-
|
|
1,942
|
Impairment of
goodwill
|
-
|
|
37,180
|
Loss on write-down of
assets held for sale
|
-
|
|
2,580
|
Loss on disposal of
long-lived assets
|
1,093
|
|
62
|
Non-cash lease
expense
|
464
|
|
-
|
Stock compensation
expense
|
1,669
|
|
4,385
|
Deferred income tax
provision
|
17,855
|
|
15,459
|
Reduction in tax
benefit related to share-based awards
|
24
|
|
72
|
Changes in current
assets and liabilities:
|
|
|
|
Restricted
cash
|
(661)
|
|
-
|
Accounts receivable,
net
|
6,289
|
|
5,881
|
Inventories,
net
|
907
|
|
(2,080)
|
Income taxes
receivable
|
(281)
|
|
63
|
Other current
assets
|
(16,209)
|
|
1,151
|
Accounts
payable
|
(4,157)
|
|
4,325
|
Accrued
liabilities
|
(10,216)
|
|
(16,889)
|
Income taxes
payable
|
1,182
|
|
-
|
Interest
payable
|
(8)
|
|
(19)
|
Net cash (used in)
operating activities
|
(24,510)
|
|
(19,650)
|
Cash flows from
investing activities:
|
|
|
|
Capital
expenditures
|
(767)
|
|
(2,631)
|
Proceeds from sales
of businesses
|
169,722
|
|
-
|
Proceeds from sale of
assets
|
140
|
|
90
|
Purchase of patents
and other intangible assets
|
(227)
|
|
(181)
|
Net cash provided by
(used in) investing activities
|
168,868
|
|
(2,722)
|
Cash flows from
financing activities:
|
|
|
|
Borrowings on
revolving credit facility
|
42,984
|
|
146,038
|
Repayments on
revolving credit facility
|
(92,715)
|
|
(124,862)
|
Debt issuance
costs
|
-
|
|
(98)
|
Purchase of treasury
stock related to share-based awards
|
(142)
|
|
(24)
|
Proceeds from sale of
common stock
|
-
|
|
247
|
Payments for finance
leases
|
(38)
|
|
-
|
Loss from
noncontrolling interest
|
-
|
|
(357)
|
Net cash (used in)
provided by financing activities
|
(49,911)
|
|
20,944
|
Discontinued
operations:
|
|
|
|
Net cash (used in)
provided by operating activities
|
(321)
|
|
644
|
Net cash provided by
(used in) investing activities
|
337
|
|
(630)
|
Net cash flows
provided by discontinued operations
|
16
|
|
14
|
Effect of changes in
exchange rates on cash and cash equivalents
|
2
|
|
(74)
|
Net increase
(decrease) in cash and cash equivalents
|
94,465
|
|
(1,488)
|
Cash and cash
equivalents at the beginning of period
|
3,044
|
|
4,584
|
Cash and cash
equivalents at the end of period
|
$
97,509
|
|
$
3,096
|
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
|
|
Six Months
Ended
|
|
6/30/2019
|
|
6/30/2018
|
|
3/31/2019
|
|
6/30/2019
|
|
6/30/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from
Continuing Operations (GAAP)
|
$
(12,990)
|
|
$
(68,987)
|
|
$
(15,380)
|
|
$
(28,370)
|
|
$
(78,516)
|
|
|
|
|
|
|
|
|
|
|
|
Deferred Tax Asset
Valuation Allowance
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Select Items
Impacting Earnings, net of tax
|
729
|
|
32,806
|
|
3,760
|
|
4,094
|
|
33,654
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net Loss
(Non-GAAP)
|
$
(12,261)
|
|
$
(36,181)
|
|
$
(11,620)
|
|
$
(24,276)
|
|
$
(44,862)
|
|
|
|
|
|
|
|
|
|
|
Weighted Average
Shares Outstanding (Fully Diluted)
|
58,608
|
|
57,869
|
|
58,373
|
|
58,491
|
|
57,566
|
|
|
|
|
|
|
|
|
|
|
Adjusted Loss Per
Share (Fully Diluted)
|
$
(0.21)
|
|
$
(0.63)
|
|
$
(0.20)
|
|
$
(0.42)
|
|
$
(0.78)
|
|
|
|
|
|
|
|
|
|
|
Select Items
Impacting Earnings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance and
Retirement
|
356
|
|
105
|
|
1,721
|
|
2,077
|
|
122
|
|
|
|
|
|
|
|
|
|
|
|
Shareholder-Related
Activities
|
71
|
|
-
|
|
581
|
|
652
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Operations Related
Contract Termination
|
500
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Inventory
Write-down
|
-
|
|
-
|
|
-
|
|
-
|
|
1,000
|
|
|
|
|
|
|
|
|
|
|
|
Impairment of
Goodwill
|
-
|
|
37,180
|
|
-
|
|
-
|
|
37,180
|
|
|
|
|
|
|
|
|
|
|
|
Deferred Financing
Costs
|
-
|
|
-
|
|
1,360
|
|
1,360
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Loss on Write-down of
Assets Held for Sale
|
-
|
|
2,580
|
|
-
|
|
-
|
|
2,580
|
|
|
|
|
|
|
|
|
|
|
|
Loss (Gain) on
Disposal of Assets
|
(4)
|
|
5
|
|
1,097
|
|
1,093
|
|
62
|
|
|
|
|
|
|
|
|
|
|
|
Discontinuation of
Corporate Projects
|
-
|
|
1,220
|
|
-
|
|
-
|
|
1,220
|
|
|
|
|
|
|
|
|
|
|
|
Expenses Relating to
Closing of Business Venture
|
-
|
|
436
|
|
-
|
|
-
|
|
436
|
|
|
|
|
|
|
|
|
|
|
Total Select
Items
|
$
923
|
|
$
41,526
|
|
$
4,759
|
|
$
5,182
|
|
$
42,600
|
|
|
|
|
|
|
|
|
|
|
|
Less income tax
effect (21%)
|
(194)
|
|
(8,720)
|
|
(999)
|
|
(1,088)
|
|
(8,946)
|
|
|
|
|
|
|
|
|
|
|
|
Select Items
Impacting Earnings, net of tax
|
$
729
|
|
$
32,806
|
|
$
3,760
|
|
$
4,094
|
|
$
33,654
|
|
|
|
|
|
|
|
|
|
|
* Management believes
that adjusted Net Income for the three and six months ended June
30, 2019 and June 30, 2018, and the three months ended March 31,
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
|
|
Six Months
Ended
|
|
|
6/30/2019
|
|
6/30/2018
|
|
3/31/2019
|
|
6/30/2019
|
|
6/30/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from
Continuing Operations (GAAP)
|
$
(12,990)
|
|
$
(68,987)
|
|
$
(15,380)
|
|
$
(28,370)
|
|
$
(78,516)
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
Expense
|
16
|
|
640
|
|
1,998
|
|
2,014
|
|
1,156
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
Income
|
(685)
|
|
(52)
|
|
(226)
|
|
(912)
|
|
(235)
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Tax Benefit
Expense
|
(192)
|
|
16,128
|
|
(774)
|
|
(966)
|
|
15,807
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
Amortization
|
2,119
|
|
2,343
|
|
2,260
|
|
4,379
|
|
4,676
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
(Non-GAAP)
|
$
(11,732)
|
|
$
(49,928)
|
|
$
(12,122)
|
|
$
(23,855)
|
|
$
(57,112)
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Compensation
Expense
|
1,213
|
|
2,357
|
|
456
|
|
1,669
|
|
4,257
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance and
Retirement
|
356
|
|
105
|
|
1,721
|
|
2,077
|
|
122
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholder-Related
Activities
|
71
|
|
-
|
|
581
|
|
652
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Operations Related
Contract Termination
|
500
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss (Gain) on
Disposal of Assets
|
(4)
|
|
5
|
|
1,097
|
|
1,093
|
|
62
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinuation of
Corporate Projects
|
-
|
|
1,220
|
|
-
|
|
-
|
|
1,220
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses Relating to
Closing of Business Venture
|
-
|
|
436
|
|
-
|
|
-
|
|
436
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
(Non-GAAP)
|
$
(9,596)
|
|
$
(6,045)
|
|
$
(8,267)
|
|
$
(18,364)
|
|
$
(10,255)
|
|
|
|
|
|
|
|
|
|
|
|
* Management believes
that adjusted EBITDA for the three and six months ended June 30,
2019 and June 30, 2018, and the three months ended March 31, 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.
|
View original content to download
multimedia:http://www.prnewswire.com/news-releases/flotek-announces-second-quarter-2019-results-300898474.html
SOURCE Flotek Industries, Inc.