Form 8-K - Current report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

August 8, 2023

Date of Report (Date of earliest event reported)

Flotek Industries, Inc.

(Exact name of registrant as specified in its charter)


Delaware	001-13270	90-0023731
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

8846 N. Sam Houston Parkway W. Houston, TX, 77064

(Address of principal executive office and zip code)

(713) 849-9911

(Registrant’s telephone number, including area code)

(Not applicable)

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of Exchange on which registered
Common Stock, $0.0001 par value	FTK	NYSE

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02. Results of Operations and Financial Condition

On August 8, 2023, Flotek Industries, Inc. (the “Company”) issued a press release providing its financial results for the quarter ended June 30, 2023 and announcing that it will hold a conference call to discuss its operating results. The press release is furnished herewith as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.

The information furnished pursuant to Item 2.02 of this Current Report on Form 8-K and in Exhibit 99.1 shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is not subject to the liabilities of that section and is not deemed incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act, except as otherwise expressly stated in such filing.

Item 7.01 Regulation FD Disclosure

On August 8, 2023, the Company provided on its website a presentation containing information relating to its current operations and financial results. A copy of the presentation is attached hereto as Exhibit 99.2 and is incorporated herein by reference.

The information furnished pursuant to Item 7.01 of this Current Report on 8-K and in Exhibit 99.2 shall not be deemed to be “filed” for the purposes of Section 18 of the Exchange Act, is not subject to the liabilities of that section and is not deemed incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act, except as otherwise expressly stated in such filing.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

The following exhibits are included with this Current Report on Form 8-K:

Exhibit No. Description

99.1 Press release dated August 8, 202 3

99.2 Presentation of Flotek Industries, Inc.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


	FLOTEK INDUSTRIES, INC.
Date: August 8, 2023	/s/ Bond Clement
	Name:	Bond Clement
	Title:	Chief Financial Officer

EXHIBIT 99.1

Flotek Reports Second Quarter 2023 Results Highlighted by

108% Sequential Growth in Gross Profit

HOUSTON - August 8, 2023 - Flotek Industries, Inc. (“Flotek” or the “Company”) (NYSE: FTK) today announced significantly improved operational and financial results for the second quarter ended June 30, 2023. The second quarter results further build upon the Company’s turn-around momentum as nearly all financial metrics showed strong sequential growth.

Financial Summary


(in thousands)	Q2 2023		Q2 2022		Percent Change	Q1 2023		Percent Change

Total Revenues	$	50,594	$	29,373	72%	$	48,007		5%
Gross Profit (Loss)	$	3,904	$	(2,305)	269%	$	1,880		108%
Adjusted Gross Profit (Loss) (1)	$	5,091	$	(1,578)	423%	$	2,647		92%
Net Income (Loss)	$	(21)	$	6,240	NM	$	21,343		NM
Adjusted EBITDA (1)	$	(2,004)	$	(7,242)	72%	$	(3,851)		48%

(1)A non-GAAP financial measure. See the “Unaudited Reconciliation of Non-GAAP Items and Non-Cash Items Impacting Earnings” section in this release for more information, including reconciliations to the most comparable GAAP measures.

Second Quarter 2023 Highlights

•Reported gross profit of $3.9 million and adjusted gross profit(1) of $5.1 million marking the second consecutive quarter of positive results in both metrics. Second quarter of 2023 gross profit and adjusted gross profit(1) increased 108% and 92%, respectively, as compared to first quarter of 2023 results. Gross profit margin and adjusted gross profit margin(1) for the second quarter of 2023 increased to 8% and 10%, respectively.

•Achieved strong growth in total revenues of 72% from the second quarter of 2022, resulting from Flotek’s strategic 10-year supply agreement with ProFrac Holdings, LLC (“ProFrac”). Second quarter of 2023 total revenues increased 5% sequentially despite an industry-wide slowdown in upstream activity and benefited from a 68% increase in transactional (non-ProFrac) chemistry business compared to the first quarter of 2023.

•Improved adjusted EBITDA(1) for the eighth consecutive quarter reporting a 48% sequential increase.

•Appointed Dr. Ryan Ezell to the role of Chief Executive Officer to lead Flotek into its next phase of profitable growth.

•Appointed Mr. Harsha V. Agadi to the role of Chairman of the Board of Flotek.

August 2023 Update

•Reiterate full year 2023 guidance for total revenues of $210 million to $230 million and an adjusted gross profit margin of 8% to 10%.

•Report considerable progress toward securing an asset-based loan (“ABL”). See balance sheet and liquidity discussion below.

Management Commentary

Chief Executive Officer Ryan Ezell commented, “Our second quarter results highlight our operational excellence and the rapid improvement in Flotek’s business fundamentals as we execute our corporate strategy. Our cost control initiatives continue to enhance profitability as demonstrated by adjusted gross profit nearly doubling from the first quarter with the associated margin increasing to 10%. Accordingly, we have high confidence in adjusted EBITDA turning positive before year-end.

“Operationally, even as the industry experienced less well stimulation activity during the quarter, our differentiated chemistry solutions, highlighted by the performance of our transactional chemistry business, enabled us to grow revenues and margins. Looking ahead, we are well positioned with a strong balance sheet that will be enhanced by the credit facility that we are actively pursuing. This will augment our liquidity and support our growth and path to sustained profitability.”

Second Quarter 2023 Financial Results

•Revenue: Flotek reported total revenues of $50.6 million for the second quarter of 2023, which was an increase of 72% compared to total revenues of $29.4 million for the second quarter of 2022 and a 5% increase compared to total revenues of $48.0 million for the first quarter of 2023. Second quarter of 2023 revenues benefited from a 68% sequential increase in transactional chemistry revenue.

•Gross Profit (Loss): The Company generated gross profit of $3.9 million as compared to a gross loss of $2.3 million for the second quarter of 2022 and gross profit of $1.9 million for the first quarter of 2023. The improvement in second quarter of 2023 gross profit was the result of the increase in transactional chemistry revenue during the quarter and continuing initiatives to drive further cost improvements with respect to freight logistics and materials.

•Adjusted Gross Profit (Loss) (Non-GAAP)(1): Flotek generated adjusted gross profit of $5.1 million during the second quarter of 2023 compared to adjusted gross loss of $1.6 million for the second quarter of 2022 and gross profit of $2.6 million for the first quarter of 2023. Adjusted gross profit (loss) primarily excludes non-cash items, including amortization of contract assets, which reduces both revenue and gross profit.

•Selling, General and Administrative (“SG&A”) Expense: SG&A expense totaled $8.4 million for the second quarter of 2023 compared to $6.8 million for the second quarter of 2022 and $6.5 million for the first quarter of 2023. Second quarter of 2023 SG&A included legal costs incurred in connection with the settlement of a portion of ongoing legacy litigation, as well as the final costs associated with the CEO transition. SG&A during the first quarter of 2023 included a $1.1 million credit to stock compensation

expense related to head-count reductions. Excluding non-cash stock compensation, second quarter SG&A increased $0.5 million sequentially.

•Severance Costs: Flotek recorded a $2.3 million credit to severance expenses during the second quarter of 2023 in connection with the settlement of a portion of ongoing legacy litigation. The Company had accrued certain severance payments in connection with this litigation in prior years and reversed the accrual during the second quarter after reaching the settlement.

•Net Income (Loss) and EPS: Flotek reported a net loss of $21 thousand, or $0 per basic share, for the second quarter of 2023. This compares to net income of $6.2 million, or $0.08 per basic share, for the second quarter of 2022 and net income of $21.3 million, or $0.22 per basic share, in the first quarter of 2023. Net income/(loss) during the second quarter of 2023 and 2022 and the first quarter of 2023 included non-cash gains on the fair value measurement of convertible notes totaling $3.9 million, $17.2 million, and $26.1 million, respectively.

•Adjusted EBITDA (Non-GAAP)(1): Adjusted EBITDA was negative $2.0 million in the second quarter of 2023 as compared to negative $7.2 million in the second quarter of 2022 and negative $3.9 million in the first quarter of 2023. Adjusted EBITDA continues to trend upward and the Company expects to report positive adjusted EBITDA during 2023.

(1)See the “Unaudited Reconciliation of Non-GAAP Items and Non-Cash Items Impacting Earnings” section in this release for more information, including reconciliations to the most comparable GAAP measures.

Balance Sheet and Liquidity

Flotek has received credit approval from a prospective lender in connection with a proposed ABL. The Company is reviewing the loan documents as well as completing final administrative matters prior to closing. The proposed ABL would provide credit availability based upon eligible accounts receivable, inventory and real estate values. The Company expects to provide an update before the end of August 2023.

Cash and cash equivalents were $8.8 million as of June 30, 2023, compared to $12.4 million as of March 31, 2023. Cash and cash equivalents were used during the quarter for working capital purposes.

Conference Call Details

Flotek will host a conference call on August 9, 2023, at 9:00 a.m. CDT (10:00 a.m. EDT) to discuss its second quarter 2023 results. Participants may access the call through Flotek’s website at www.flotekind.com under “Webcasts’’ or by telephone toll free at 1-844-835-9986 (international toll: 1-412-317-5270) approximately five minutes prior to the start of the call. Following the conclusion of the conference call, a recording of the call will be available on the Company’s website.

Upcoming Investor Event

Members of the Company’s management are scheduled to participate in EnerCom Denver – The Energy Investment Conference to be held in Denver, Colorado, August 14-16, 2023. Ryan Ezell, Chief Executive Officer of Flotek, will present on August 15, 2023, at 8:50 a.m. MT and

will be joined by Bond Clement, Chief Financial Officer, in hosting meetings with investors throughout the day. Dr. Ezell will also participate in a service industry panel discussion on August 16 at 9:50 a.m. MT. A live webcast of the events will be available on the conference website at www.enercomdenver.com. Presentation slides will be posted on the Investor Relations section of Flotek’s corporate website at www.flotekind.com prior to the start of the presentation.

About Flotek Industries, Inc.

Flotek Industries, Inc. is an advanced technology-driven, green chemical and data analytics company providing unique and innovative completion solutions that have a proven, positive impact on sustainability and reducing the overall environmental impact of energy on air, land, water and people. Flotek has an intellectual property portfolio of over 170 patents and a global presence in more than 15 countries throughout North America, Latin America, the Middle East and North Africa. Flotek has established collaborative partnerships focused on sustainable and optimized chemistry and data solutions which improve well performance and allow its customers to generate higher returns on invested capital.

Flotek is based 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 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 will, continue, 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. Further information about the risks and uncertainties that may impact the company are set forth in the Company’s most recent filing with the Securities and Exchange Commission on Form 10-K (including, without limitation, in the “Risk Factors” section thereof), 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.

Company Contact

Bond Clement

Chief Financial Officer

E: ir@flotekind.com

P: (713) 726-5322

FLOTEK INDUSTRIES, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)


	Three Months Ended			Six Months Ended
	6/30/2023	6/30/2022	3/31/2023	6/30/2023	6/30/2022

Revenue:
Revenue from external customers	$ 17,820	$ 12,824	$ 11,652	$ 29,472	$ 23,206
Revenue from related party	32,774	16,549	36,355	69,130	19,046
Total revenues	50,594	29,373	48,007	98,602	42,252
Cost of goods sold	46,690	31,678	46,127	92,817	45,036
Gross profit (loss)	3,904	(2,305)	1,880	5,785	(2,784)
Operating costs and expenses:
Selling, general, and administrative	8,351	6,821	6,451	14,803	11,707
Depreciation	174	182	176	349	377
Research and development	860	1,115	614	1,474	2,530
Severance costs	(2,279)	610	2,223	(56)	603
Gain on sale of property and equipment	—	(1,914)	—	—	(1,906)
Gain on lease termination	—	—	—	—	(584)
Gain in fair value of Contract Consideration Convertible Notes Payable	(3,874)	(17,158)	(26,095)	(29,969)	(13,266)
Total operating costs and expenses	3,232	(10,344)	(16,631)	(13,399)	(539)
Income (loss) from operations	672	8,039	18,511	19,184	(2,245)
Other income (expense):
Paycheck protection plan loan forgiveness	—	—	4,522	4,522	—
Interest expense	(705)	(1,597)	(1,672)	(2,377)	(2,265)
Other income (expense) , net	19	(104)	(9)	9	120
Total other income (expense), net	(686)	(1,701)	2,841	2,154	(2,145)
Income (loss) before income taxes	(14)	6,338	21,352	21,338	(4,390)
Income tax expense	(7)	(98)	(9)	(16)	(94)
Net income (loss)	$ (21)	$ 6,240	$ 21,343	$ 21,322	$ (4,484)

Income (loss) per common share:
Basic	$ —	$ 0.08	$ 0.22	$ 0.18	$ (0.06)
Diluted	$ (0.02)	$ (0.05)	$ (0.02)	$ (0.04)	$ (0.12)

Weighted average common shares:
Weighted average common shares used in computing basic income (loss) per common share	143,433	74,861	98,808	121,244	73,476
Weighted average common shares used in computing diluted loss per common share	169,500	124,335	158,441	164,165	107,086

FLOTEK INDUSTRIES, INC.UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)



	June 30, 2023	December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents	$ 8,841	$ 12,290
Restricted cash	101	100
Accounts receivable, net of allowance for credit losses of $682 and $623 at June 30, 2023 and December 31, 2022, respectively	16,855	19,136
Accounts receivable, related party, net of allowance for credit losses of $0 at June 30, 2023 and December 31, 2022, respectively	23,033	22,683
Inventories, net	18,397	15,720
Other current assets	4,051	4,045
Current contract asset	7,716	7,113
Total current assets	78,994	81,087
Long-term contract assets	69,583	72,576
Property and equipment, net	4,753	4,826
Operating lease right-of-use assets	4,279	5,900
Deferred tax assets, net	404	404
Other long-term assets	17	17
TOTAL ASSETS	$ 158,030	$ 164,810
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$ 44,949	$ 33,375
Accrued liabilities	5,178	8,984
Income taxes payable	12	97
Interest payable	—	130
Current portion of operating lease liabilities	2,902	3,328
Current portion of finance lease liabilities	37	36
Current portion of long-term debt	179	2,052
Convertible notes payable	—	19,799
Contract Consideration Convertible Notes Payable	—	83,570
Total current liabilities	53,257	151,371
Deferred revenue, long-term	35	44
Long-term operating lease liabilities	6,584	8,044
Long-term finance lease liabilities	3	19
Long-term debt	149	2,736
TOTAL LIABILITIES	60,028	162,214
Stockholders’ equity:
Common stock, $0.0001 par value, 240,000,000 shares authorized; 158,220,075 shares issued and 151,541,446 shares outstanding at June 30, 2023; 83,915,918 shares issued and 77,788,391 shares outstanding at December 31, 2022	15	8
Additional paid-in capital	462,517	388,177
Accumulated other comprehensive income	147	181
Accumulated deficit	(330,197)	(351,519)
Treasury stock, at cost; 6,678,629 and 6,127,527 shares at June 30, 2023 and December 31, 2022, respectively	(34,480)	(34,251)
Total stockholders’ equity	98,002	2,596
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$ 158,030	$ 164,810

FLOTEK INDUSTRIES, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)


	Six months ended June 30,
	2023	2022
Cash flows from operating activities:
Net income (loss)	$ 21,322	$ (4,484)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Change in fair value of contingent consideration	(324)	(134)
Change in fair value of Contract Consideration Convertible Notes Payable	(29,969)	(13,266)
Amortization of convertible note issuance costs	83	414
Payment-in-kind interest expense	2,284	1,819
Amortization of contract assets	2,390	737
Depreciation and amortization	349	377
Provision for credit losses, net of recoveries	63	87
Provision for excess and obsolete inventory	497	769
Gain on sale of property and equipment	—	(1,906)
Gain on lease termination	—	(584)
Non-cash lease expense	1,621	112
Stock compensation expense	(836)	1,591
Deferred income tax (benefit) expense	—	(5)
Paycheck protection plan loan forgiveness	(4,522)	—
Changes in current assets and liabilities:
Accounts receivable	2,218	(21,741)
Accounts receivable, related party	(350)	11,600
Inventories	(3,158)	(4,521)
Income taxes receivable	—	7
Other assets	(6)	(232)
Contract assets, net	—	(3,600)
Accounts payable	11,574	12,154
Accrued liabilities	(3,491)	(2,924)
Operating lease liabilities	(1,886)	(308)
Income taxes payable	(85)	99
Interest payable	(8)	24
Net cash used in operating activities	(2,234)	(23,915)
Cash flows from investing activities:
Capital expenditures	(292)	(5)
Proceeds from sale of assets	—	4,194
Net cash (used in) provided by investing activities	(292)	4,189
Cash flows from financing activities:
Payment for forfeited stock options	(617)	—
Payments on long term debt	(60)	—
Proceeds from issuance of convertible notes	—	21,150
Payment of issuance costs of convertible notes	—	(1,084)
Proceeds from issuance of warrants	—	19,500
Payments to tax authorities for shares withheld from employees	(229)	(138)
Proceeds from issuance of stock	33	24
Payments for finance leases	(15)	(21)
Net cash (used in) provided by financing activities	(888)	39,431
Effect of changes in exchange rates on cash and cash equivalents	(34)	95
Net change in cash and cash equivalents and restricted cash	(3,448)	19,800
Cash and cash equivalents at the beginning of period	12,290	11,534
Restricted cash at the beginning of period	100	1,790
Cash and cash equivalents and restricted cash at beginning of period	12,390	13,324
Cash and cash equivalents at end of period	8,841	33,084
Restricted cash at the end of period	101	40
Cash and cash equivalents and restricted cash at end of period	$ 8,942	$ 33,124

FLOTEK INDUSTRIES, INC.

UNAUDITED RECONCILIATION OF NON-GAAP ITEMS AND NON-CASH ITEMS IMPACTING EARNINGS

(in thousands)


	Three Months Ended			Six Months Ended
	6/30/2023	6/30/2022	3/31/2023	6/30/2023	6/30/2022

Gross profit (loss)	$ 3,904	$ (2,305)	$ 1,880	$ 5,785	$ (2,784)
Stock compensation expense	2	218	(139)	$ (137)	$ 374
Severance and retirement	11	—	15	$ 26	$ 3
Contingent liability revaluation	35	(228)	(359)	$ (324)	$ (134)
Amortization of contract assets	1,139	737	1,250	$ 2,389	$ 737
Adjusted Gross profit (loss)	$ 5,091	$ (1,578)	$ 2,647	$ 7,739	$ (1,804)

Net income (loss)	$ (21)	$ 6,240	$ 21,343	$ 21,322	$ (4,484)
Interest expense	705	1,597	1,672	2,377	2,265
Income tax expense	7	98	9	16	94
Depreciation and amortization	174	182	176	349	377
EBITDA (Non-GAAP)	$ 865	$ 8,117	$ 23,200	$ 24,064	$ (1,748)
Stock compensation expense	274	852	(1,112)	(838)	1,591
Severance and retirement	(2,268)	610	2,238	(30)	606
Contingent liability revaluation	35	(228)	(359)	(324)	(134)
Gain on disposal of assets	—	(1,914)	—	—	(1,906)
Gain on lease termination	—	—	—	—	(584)
Contract Consideration Convertible Notes Payable revaluation adjustment	(3,874)	(17,158)	(26,095)	(29,969)	(13,266)
Amortization of contract assets	1,139	737	1,250	2,389	737
PPP loan forgiveness	—	—	(4,522)	(4,522)	—
Non-Recurring professional fees	1,825	1,742	1,549	3,376	2,017
Adjusted EBITDA (Non-GAAP)	$ (2,004)	$ (7,242)	$ (3,851)	$ (5,854)	$ (12,687)

(1) Management believes that adjusted gross profit and adjusted EBITDA for the three and six months ended June 30, 2023, and 2022, and the three months ended March 31, 2023, are 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 analyses 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.

Investor Presentation August 2023 EXHIBIT 99.2

Forward-Looking Statements Certain statements set forth in this presentation 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 will, continue, 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 presentation. Although forward- looking statements in this presentation 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. Further information about the risks and uncertainties that may impact the Company are set forth in the Company’s most recent filing with the Securities and Exchange Commission on Form 10-K (including, without limitation, in the "Risk Factors" section thereof), 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 presentation. 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 presentation. // 2

Corporate Snapshot Abu Dhabi, UAE Raceland, LAMarlow, OK Houston, TX (HQ) Headquarters Field Office // 3 FTK Global Presence Founded: 1985 Employees: 143 Corporate Headquarters: Houston Countries with Clients: >15 Patents: >170 Long-Term Debt ($mm): $0.2 2Q 2023 Adj. Gross Profit Margin: 10% 2023 GUIDANCE Revenue ($mm): $210-$230 Adj. Gross Profit Margin: 8-10%

Flotek: A Purpose-Driven Company // 4 Our completion solutions have a proven, positive impact on sustainability and reducing the overall environmental impact of energy on air, land, water and people Who We Are An advanced technology-driven, green chemical and data analytics company providing unique and innovative completion solutions Our Vision We strive to be the collaborative partner of choice for solutions that reduce the environmental impact of energy on air, water, land and people Compelling Value Proposition We collaborate and deliver sustainable, optimized chemistry and data solutions that maximize our customer’s value

Our Strategic Priorities Industry-Leading Innovation Track record of delivering fit-for-purpose optimized chemistry and data solutions Capital-light Growth Modest capital required to support robust growth objectives Environmental Leadership Focus on reducing impact on people, land, air, and water // 5 Sustainable Revenue 10-year contract with ProFrac generates a guaranteed minimum of $2B+ Enhanced Profitability Expect adjusted EBITDA* to turn positive before year-end Strong Balance Sheet Minimal debt with potential near-term liquidity enhancement * Adjusted EBITDA is a non-GAAP measure. See the Appendix in this presentation for a reconciliation to the nearest GAAP measure.

Flotek is a Compelling Investment Choice // 6 • New leadership team with deep industry expertise poised to execute strategy • Complementary business segments drive rapid revenue expansion and significant improvement in profitability • Greater than 60% growth in annual revenue* • Greater than $20 MM annual improvement in gross margin* • $2B backlog of future revenue over the next decade supported by ProFrac partnership • Cost control initiatives enhance profitability and underpin transition to positive adjusted EBITDA** prior to year-end • Enhanced liquidity potential through proposed asset-based loan (“ABL”) facility * Based on mid point of 2023 guidance ** Adjusted EBITDA is a non-GAAP measure. See the Appendix in this presentation for a reconciliation to the nearest GAAP measure. SIGNIFICANT IMPROVEMENT IN BUSINESS FUNDAMENTALS NOT REFLECTED IN SHARE PRICE

Second Quarter 2023 Highlights // 7 • Strong margin improvement contributes to 108% growth in gross profit compared to 1Q 2023 • Adjusted gross profit* was positive for second consecutive quarter and up $6.7 MM or 423% from 2Q 2022 • Reported improvement in adj. EBITDA* for eighth consecutive quarter; adj. EBITDA* is expected to turn positive before year-end • Delivered strong revenue growth of 72% compared to 2Q 2022 • Transactional chemistry business revenues up 68% sequentially - highlighting strong business fundamentals • Received credit approval from lender in connection with ABL * Adjusted Gross Profit (Loss) and Adjusted EBITDA are non-GAAP measures. See the Appendix in this presentation for a reconciliation to the nearest GAAP measure. Reiterate full year 2023 revenue of $210MM – $230MM and adjusted gross profit* margin of 8% – 10% OPERATIONAL EXCELLENCE AND RAPID IMPROVEMENT IN BUSINESS FUNDAMENTALS

$0 $50,000 $100,000 $150,000 $200,000 $250,000 2020 2021 2022 2023E Strong Growth in Revenue Continues MANAGING FOR RAPID GROWTH // 8 • 2Q 2023 total revenues increased 72% YoY • Delivered growth despite industry-wide activity slowdown • Expect $210MM to $230MM for FY 2023 versus $136MM in 2022 - greater than 60% growth in annual revenues* • Transactional chemistry business increased 68% compared to 1Q 2023 • Achieved market share of ~10% of active U.S. frac fleet • Revenue growth supported by ProFrac contract and strong growth in transactional chemistry business Annual Consolidated Revenue (000’s) $210 $230 }Guidance Range * Based on mid point of 2023 revenue guidance .

Rapid Improvement in Data Analytics Business STRONG GROWTH IN REVENUE Revenue (MM) // 9 • 1H 2023 revenue nearly equals full year 2022 • 2023 full-year revenue expected to nearly double from 2022 • In Q1 2023 received first prototype of next generation JP3 flow cell sensor for proprietary Verax analyzer • Results in step change in manufacturing and operational costs moving forward • Provides potential entrance into new vertical markets • Natural gas infrastructure transmission monitoring • Chain of custody verification • Continuous BTU monitoring to facilitate field gas usage for powering rigs and frac spreads $0.0 $2.0 $4.0 $6.0 $8.0 $10.0 $12.0 2021 2022 1H2023 2023E

Cost Control Initiatives Continue to Enhance Profitability RAPID IMPROVEMENT IN MARGINS Quarterly Consolidated Gross Profit (Loss) (000’s) // 10 • 2Q 2023 gross profit positive for second consecutive quarter and up six-fold sequentially • Adjusted gross profit* margin increased to 10% • Anticipate greater than $20 MM** increase in 2023 adjusted gross profit* compared to 2022 • Delivered efficiencies across all aspects of business supply chain • Improved costs associated with freight logistics and materials $(2,500) $(1,500) $(500) $500 $1,500 $2,500 $3,500 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 • Adjusted Gross Profit (Loss) and Adjusted EBITDA are non-GAAP measures. See the Appendix in this presentation for a reconciliation to the nearest GAAP measure. ** Based on the mid point of 2023 guidance.

Path to Profitability ANTICIPATE REACHING POSITIVE ADJUSTED EBITDA IN 2023 // 11 Quarterly Adjusted EBITDA*/Revenue * Adjusted EBITDA is a non-GAAP metric. See the Appendix in this presentation for a reconciliation to nearest GAAP measure -80% -70% -60% -50% -40% -30% -20% -10% 0% 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 • 2Q 2023 adj. EBITDA* improved 48% sequentially • 1H 2023 adj. EBITDA* improved by $6.8 MM from 1H 2022 • Improved adj. EBITDA* for eighth consecutive quarter • Adj. EBITDA* expected to turn positive before year-end

• Global presence in over 15 countries • Establishing collaborative partnerships with E&P operators and oil field service providers • Extensive experience with proven solutions in over 20,000 completion wells worldwide • Fit-for-purpose optimized chemistry and data solutions allow customers to maximize the value of their business • High margin data analytics segment driving revenue growth and increased profitability • Increasing market share across both segments Complementary Segments Deliver Sustainable Growth Sustainable chemistry solutions to maximize customer’s value chain while minimizing their environmental impact Transforming business through real-time data, monitoring and visualization across the energy value chain utilizing proprietary JP3 unit Chemical Technologies Data Analytics // 12 GENERATING VALUE VIA DIRECT AND IN-DIRECT CHANNELS

Chemical Technologies Business Overview // 13 • Technologically advanced products and services that significantly improve well performance and maximize value of customer’s business • Extensive portfolio of customized solutions that support operations across the value chain • Industry leader in delivering innovative products that increase performance while reducing costs • Strong presence across all major U.S. shale basins • Creative solutions to reduce the environmental impact of energy on air, water, land and people

Strong Presence Across in All Key Basins // 14 Permian Basin EagleFord Haynesville Bakken Mid-Continent Denver-Julesburg Marcellus/Utica FLOTEK CHEMISTRY USED ON OVER 20,000 WELLS IN ALL MAJOR U.S. SHALE BASINS Gulf of Mexico San Joaquin

Chemical Technology Applications // 15 Positioned to capitalize on strong growth cycle of responsible energy production via collaborative partnership with customers Drilling & Cementing Fluids to protect the reservoir and environment Enhancing maximum efficiency of productivity STIMULATION Drilling & Cementing Fluids to protect the reservoir and environment Chemistries for enduring performance PRODUCTION Sustainable chemistry maximizing recovery REMEDIATION Drilling & Cementing Fluids to protect the reservoir and environment Effective solutions for gre ter recovery ENHANCED WATER FLOODING Fluids to protect the reservoir and the environment DRILLING & CEMENTING Chemistries that minimize formation damage and extend asset life OFFSHORE A STRONG POSITION OF EXPERTISE IN ENERGY CHEMISTRY

0 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 0 5 10 15 20 C u m u la tiv e P ro d u c tio n (B O E) Months Permian Basin Average Cumulative BOE Flotek PCM Non-Flotek 25 +26% Uplift The Flotek Advantage // 16 • Prescribed Chemistry Management (PCM) • Proprietary energy chemistry solutions • Dedicated chemistry management team • Customized solutions to each well’s geology • World class lab testing capabilities • AI enabled and digital twinning analytics of over 20,000 wells • Leveraging over 170 active patents to design the best chemistry for each well • Strong well performance with 75,000 BOE more uplift than competition * Data derived from 2019-2023 Enverus Prism Platform (1,878 wells) ** Similar Results from all basins, example is highlighting the most productive basin in the U.S. (Permian) 75 MBOE} * DELIVERING THE BEST UPLIFT PERFORMANCE IN INDUSTRY

Leveraging New Markets Diversifies Customer Base // 17 PROVIDES SIGNIFICANT FUTURE GROWTH OPPORTUNITY Industrial Geothermal Agricultural Solar Hydrogen As smart systems develop, so will the demand for green chemistry solutions Positioned to capitalize on proprietary patents, technology advancements and collaborative partnerships with customers

Data Analytics Business Overview // 18 • Provides accurate, real-time visibility into chemical composition flowing directly through a well-head, pipeline, power generator, refinery, and more. • Robust platform based on NIR Spectroscopy; doesn’t utilize consumables and there are no moving parts • Ability to operate in highly variable field conditions • Field trial of next generation JP3 Spectrometer Prototype in progress • Remote monitoring enables operators to access data remotely through JP3’s VIPER web app • Assists customers on path to net zero emissions

// 19 One Technology Platform Multiple Applications Data Analytics: Extensive Industry Applications Upstream • Realtime product quality analysis to meet pipeline and storage specs • Continuous BTU monitoring to facilitate field gas utilization in powering electric rigs and frac fleets • Flare monitoring and methane detection Midstream • Gas processing plant control and optimization • Pipeline batch detection to optimize pipeline transmix processes • Vapor pressure controls to achieve product specifications • Emerging market in carbon capture Downstream • Realtime measurement to optimize distillation tower efficiency • Crude feedstock blending • Chemical property and quality measurement in pipelines and terminals • Refined product specification measurement to optimize mix of products

// 20 JP3 Units Deployed Extensive Deployment and Utilization of JP3 Units 81 customers across all key basins 306 field units deployed with 635 individual measurement points

Asset-Based Loan Update • Received credit approval regarding a proposed ABL • Credit supported by eligible A/R, inventory and real estate • Reviewing loan documents and completing final administrative matters • Anticipate update on ABL process before the end of August • Borrowings expected to be used to support working capital // 21 MEANINGFULLY ENHANCES LIQUIDITY

Summary // 22 • Significant improvement in business fundamentals not reflected in share price • New leadership team with deep industry expertise poised to execute strategy • Complementary business segments drive rapid revenue expansion and significant improvement in profitability • Greater than 60% growth in annual revenues* • Greater than $20 MM annual improvement in gross margin* • $2B backlog of future revenue over the next decade supported by ProFrac partnership • Cost control initiatives enhance profitability and underpin transition to positive adjusted EBITDA** before year-end • Enhanced liquidity potential through proposed ABL facility * Based on mid point of 2023 guidance ** Adjusted EBITDA is a non-GAAP measure. See the Appendix in this presentation for a reconciliation to the nearest GAAP measure.

Appendix

An Industry Leader in Sustainable Solutions // 24 Green Chemistry DATA ANALYTICS INNOVATION COLLABORATION CHEMISTRY A Global Partner in Sustainability and Profitability • Empower customers with a social license to operate • Deliver value in the new sustainability-focused world • Reduce the total cost of ownership and environmental risk • Transform businesses by reducing their carbon footprint, energy consumption and emissions • Market expansion opportunities through sustainable partnerships and adjacent markets IMPROVING PERFORMANCE THROUGH GREEN CHEMICAL SOLUTIONS

Recent Financials Unaudited Condensed Consolidated Statement of Operations (in thousands, except share data) // 25

Unaudited Condensed Consolidated Balance Sheets (in thousands, except share data) // 26

Unaudited Condensed Consolidated Statements of Cash Flows (in thousands) // 27

Unaudited Reconciliation of Non-GAAP Items and Non-Cash Items Impacting Earnings (in thousands)(1) // 28 (1) Management believes that adjusted gross profit and adjusted EBITDA for the three and six months ended June 30, 2023, and 2022, and the three months ended March 31, 2023, are 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 analyses 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.

Investor Contact Bond Clement Chief Financial Officer ir@flotekind.com (713) 726-5322

Cover	Aug. 08, 2023
Cover [Abstract]
Document Type	8-K
Document Period End Date	Aug. 08, 2023
Entity Registrant Name	Flotek Industries, Inc.
Entity Incorporation, State or Country Code	DE
Entity File Number	001-13270
Entity Tax Identification Number	90-0023731
Entity Address, Address Line One	8846 N. Sam Houston Parkway W
Entity Address, City or Town	Houston
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	77064
City Area Code	(713)
Local Phone Number	849-9911
Soliciting Material	false
Written Communications	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, $0.0001 par value
Trading Symbol	FTK
Security Exchange Name	NYSE
Entity Emerging Growth Company	false
Entity Central Index Key	0000928054
Amendment Flag	false