Flotek Industries, Inc. (NYSE:FTK) Q3 2020 Earnings Conference Call November 17, 2020 12:00 PM ET Company Participants Danielle Allen - Senior Vice President, Chief of Staff John Gibson - Chairman, President & Chief Executive Officer TengBeng Koid - President of Global Business Ryan Ezell - President of Chemistry Technologies Michael Borton - Chief Financial Officer James Silas - Senior Vice President, Research & Innovation Conference Call Participants Joseph Von Meister - Intermarket Daniel Burke - Johnson ...

Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2020 UNITED STATES SECURITIES AND EXCHANGE COMMISSION or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 1-13270 FLOTEK INDUSTRIES, INC. | Large accelerated filer | ☐ | Accelerated Filer | ☒ | | --- | --- | --- | --- | | Non-accelerated filer | ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2020 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 1-13270 FLOTEK INDUSTRIES, INC. (Exact name of registrant as specified in its charter) | Delaware | | | 90-0023731 | | --- | --- | --- | --- | | ...

Flotek Industries, Inc. (NYSE:FTK) Q2 2020 Earnings Conference Call August 6, 2020 10:00 AM ET Company Participants Danielle Allen - Senior Vice President, Chief of Staff John Gibson - Chairman, Chief Executive Officer and President Michael Borton - Chief Financial Officer TengBeng Koid - President of Global Business Ryan Ezell - President of Chemistry Technologies Conference Call Participants Daniel Burke - Johnson Rice Eric Swergold - Firestorm capital Operator Ladies and gentlemen, greetings and welcome ...

PART I—FINANCIAL INFORMATION This section presents Flotek Industries, Inc.'s financial information, including consolidated financial statements and management's discussion [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) Presents Flotek Industries, Inc.'s unaudited condensed consolidated financial statements for Q1 2020, with detailed accounting notes [Unaudited Condensed Consolidated Balance Sheets](index=4&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) Details Flotek's financial position, including assets, liabilities, and equity, for Q1 2020 and year-end 2019 | Metric (in thousands) | March 31, 2020 | December 31, 2019 | Change (vs. Dec 31, 2019) | | :-------------------- | :------------- | :---------------- | :------------------------ | | **Assets** | | | | | Cash and cash equivalents | $80,263 | $100,575 | -$20,312 (-20.2%) | | Accounts receivable, net | $13,297 | $15,638 | -$2,341 (-15.0%) | | Inventories, net | $16,322 | $23,210 | -$6,888 (-29.7%) | | Total current assets | $126,186 | $153,908 | -$27,722 (-18.0%) | | Property and equipment, net | $7,946 | $39,829 | -$31,883 (-80.1%) | | Operating lease right-of-use assets | $2,473 | $16,388 | -$13,915 (-84.9%) | | Other intangible assets, net | $0 | $20,323 | -$20,323 (-100.0%) | | **TOTAL ASSETS** | **$136,774** | **$230,600** | **-$93,826 (-40.7%)** | | **Liabilities** | | | | | Accounts payable | $8,556 | $16,231 | -$7,675 (-47.3%) | | Accrued liabilities | $8,320 | $24,552 | -$16,232 (-66.1%) | | Total current liabilities | $18,171 | $41,324 | -$23,153 (-56.0%) | | **Total liabilities** | **$28,069** | **$58,571** | **-$30,502 (-52.1%)** | | **Stockholders' Equity** | | | | | Total stockholders' equity | $108,705 | $172,029 | -$63,324 (-36.8%) | | **TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY** | **$136,774** | **$230,600** | **-$93,826 (-40.7%)** | [Unaudited Condensed Consolidated Statements of Operations](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) Presents Flotek's consolidated statements of operations, detailing revenue, expenses, and net income/loss for Q1 2020 and 2019 | Metric (in thousands, except per share data) | Three months ended March 31, 2020 | Three months ended March 31, 2019 | Change (YoY) | | :------------------------------------------- | :-------------------------------- | :-------------------------------- | :----------- | | Revenue | $19,416 | $43,256 | -$23,840 (-55.1%) | | Operating expenses (excluding D&A) | $22,841 | $43,968 | -$21,127 (-48.1%) | | Corporate general and administrative | $4,493 | $7,281 | -$2,788 (-38.3%) | | Depreciation and amortization | $2,191 | $2,260 | -$69 (-3.1%) | | Research and development | $2,555 | $2,285 | +$270 (+11.8%) | | Impairment of fixed and long-lived assets | $57,454 | $0 | +$57,454 (N/A) | | Total costs and expenses | $89,501 | $56,891 | +$32,610 (+57.3%) | | Loss from operations | $(70,085) | $(13,635) | -$56,450 (-414.0%) | | Interest expense | $(4) | $(1,998) | +$1,994 (-99.8%) | | Loss before income taxes | $(70,136) | $(15,523) | -$54,613 (-351.8%) | | Income tax benefit | $6,169 | $311 | +$5,858 (+1883.6%) | | Loss from continuing operations | $(63,967) | $(15,212) | -$48,755 (-320.5%) | | Income from discontinued operations, net of tax | $0 | $46,074 | -$46,074 (-100.0%) | | Net (loss) income | $(63,967) | $30,862 | -$94,829 (-307.3%) | | Basic earnings (loss) per common share: Continuing operations | $(1.07) | $(0.26) | -$0.81 (-311.5%) | | Basic earnings (loss) per common share | $(1.07) | $0.53 | -$1.60 (-301.9%) | [Unaudited Condensed Consolidated Statements of Comprehensive Income](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) Presents Flotek's consolidated statements of comprehensive income, detailing net income/loss and other comprehensive income for Q1 2020 and 2019 | Metric (in thousands) | Three months ended March 31, 2020 | Three months ended March 31, 2019 | Change (YoY) | | :-------------------- | :-------------------------------- | :-------------------------------- | :----------- | | Net (loss) income | $(63,967) | $30,862 | -$94,829 (-307.3%) | | Foreign currency translation adjustment | $(123) | $94 | -$217 (-230.9%) | | Comprehensive (loss) income | $(64,090) | $30,956 | -$95,046 (-307.0%) | [Unaudited Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Presents Flotek's consolidated statements of cash flows, detailing operating, investing, and financing activities for Q1 2020 and 2019 | Metric (in thousands) | Three months ended March 31, 2020 | Three months ended March 31, 2019 | Change (YoY) | | :-------------------- | :-------------------------------- | :-------------------------------- | :----------- | | Net cash used in operating activities | $(20,496) | $(25,061) | +$4,565 (+18.2%) | | Net cash (used in) provided by investing activities | $41 | $169,290 | -$169,249 (-99.9%) | | Net cash provided by (used in) financing activities | $253 | $(49,862) | +$50,115 (N/A) | | Net (decrease) increase in cash and cash equivalents and restricted cash | $(20,311) | $94,369 | -$114,680 (-121.5%) | | Cash and cash equivalents and restricted cash at end of period | $80,927 | $97,413 | -$16,486 (-16.9%) | [Unaudited Condensed Consolidated Statement of Stockholders' Equity](index=10&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Stockholders'%20Equity) Presents Flotek's consolidated statement of stockholders' equity, detailing changes in equity for Q1 2020 | Metric (in thousands) | Balance, December 31, 2019 | Balance, March 31, 2020 | Change (QoQ) | | :-------------------- | :------------------------- | :---------------------- | :----------- | | Total Stockholders' Equity | $172,029 | $108,705 | -$63,324 (-36.8%) | | Net loss | N/A | $(63,967) | N/A | | Foreign currency translation adjustment | N/A | $(123) | N/A | | Restricted stock granted | N/A | $338 | N/A | | Treasury stock purchased | N/A | $(45) | N/A | | Stock compensation expense | N/A | $462 | N/A | [Notes to Unaudited Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Provides detailed explanations of significant accounting policies and other financial information for Flotek's Q1 2020 statements [Note 1 — Organization and Significant Accounting Policies](index=11&type=section&id=Note%201%20%E2%80%94%20Organization%20and%20Significant%20Accounting%20Policies) Describes Flotek's business, the impact of market conditions, and cost-reduction measures implemented in response - Flotek Industries, Inc. is a global, diversified, technology-driven company

Flotek Industries, Inc. (NYSE:FTK) Q1 2020 Earnings Conference Call May 19, 2020 10:00 AM ET Corporate Participants Danielle Allen - Senior Vice President, Chief of Staff John Gibson - Chairman, Chief Executive Officer and President Elizabeth Wilkinson - Chief Financial Officer Matt Thomas - President, JP3 Conference Call participants Daniel Burke - Johnson Rice Brian Bode - Excelsior Capital Partners Peter Rabover - Artko Capital Vishal Mishra - Mishra Capital Operator Greetings and welcome to Flotek Indus ...

| --- | --- | --- | --- | --- | --- | --- | --- | --- | |---------------------------------------|-------|----------------------------------------------------------------|-------|-------|-------|-------|-------|-------| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Acquisition of JP3 Data and Analytics | | Maximizing Value of the Full Hydrocarbon Stream with Real-Time | | | | | | | | May 18, 2020 | | | | | | | | | ...

Flotek Industries Inc. (NYSE:FTK) Q4 2019 Earnings Conference Call March 6, 2020 10:00 AM ET Company Participants Danielle Allen - Senior Vice President, Global Communications John Gibson - Chairman, Chief Executive Officer and President Ryan Ezell - Senior Vice President, Operations Nick Bigney - Senior Vice President, General Counsel and Corporate Secretary Elizabeth Wilkinson - Chief Financial Officer Mark Lewis - Senior Vice President, Global Business Development Conference Call Participants Daniel Burk ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2019 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 1-13270 https://files.reportify.cc FLOTEK INDUSTRIES, INC. (Exact name of registrant as specified in its charter) Delaware 90-0023731 (State of othe ...

[PART I—FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%E2%80%94FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The financial statements reflect a significant structural change due to the sale of the Consumer and Industrial Chemistry Technologies (CICT) segment, now classified as discontinued operations [Notes to Unaudited Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) The notes detail significant corporate events and accounting policies, including the sale of the CICT segment, debt repayment, and adoption of new lease accounting standards - On February 28, 2019, the company completed the sale of its CICT segment to Archer-Daniels-Midland Company (ADM) for **$175.0 million** in cash[41](index=41&type=chunk)[42](index=42&type=chunk) - Concurrent with the CICT sale, the company executed a long-term supply agreement for terpene through September 2023, with a remaining minimum commitment of **$72 million** as of September 30, 2019[44](index=44&type=chunk) - On March 1, 2019, the company repaid the outstanding balance and terminated its Credit Facility with PNC Bank, expensing the remaining **$1.4 million** in deferred financing costs[68](index=68&type=chunk) - The company now operates under one reportable segment: Energy Chemistry Technologies, which generated **$99.8 million** in revenue and had a loss from operations of **$19.0 million** for the nine months ended September 30, 2019[81](index=81&type=chunk)[85](index=85&type=chunk) - An IRS examination concerning employment taxes related to the CEO's compensation resulted in the company recording a liability, with the CEO's affiliated companies agreeing to indemnify the company for any such taxes[92](index=92&type=chunk)[93](index=93&type=chunk) Income from Discontinued Operations (CICT Segment) (in thousands) | Metric | Nine Months Ended Sep 30, 2019 | Nine Months Ended Sep 30, 2018 | | :--- | :--- | :--- | | Revenue | $11,031 | $56,267 | | Gain on sale of business | $67,842 | $0 | | Net income from discontinued operations | $46,881 | $4,176 | - The Consumer and Industrial Chemistry Technologies (CICT) segment was classified as held for sale in Q4 2018 and its results are presented as discontinued operations, with the sale completed on February 28, 2019[27](index=27&type=chunk)[39](index=39&type=chunk)[42](index=42&type=chunk) Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | September 30, 2019 | December 31, 2018 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $106,994 | $3,044 | | Accounts receivable, net | $15,014 | $37,047 | | Inventories, net | $24,333 | $27,289 | | Assets held for sale | $0 | $118,470 | | Total Assets | $249,357 | $285,883 | | **Liabilities & Equity** | | | | Total current liabilities | $19,413 | $84,259 | | Long-term debt, classified as current | $0 | $49,731 | | Total Liabilities | $37,646 | $84,259 | | Total stockholders' equity | $211,711 | $201,624 | Condensed Consolidated Statements of Operations Highlights (in thousands) | Metric | Three Months Ended Sep 30, 2019 | Three Months Ended Sep 30, 2018 | Nine Months Ended Sep 30, 2019 | Nine Months Ended Sep 30, 2018 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $21,879 | $53,709 | $99,827 | $134,324 | | Loss from continuing operations | $(11,227) | $(4,843) | $(39,597) | $(83,432) | | Income from discontinued operations, net of tax | $117 | $911 | $46,881 | $4,176 | | Net Income (Loss) | $(11,110) | $(3,932) | $7,284 | $(79,256) | Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Cash Flow Activity | Nine Months Ended Sep 30, 2019 | Nine Months Ended Sep 30, 2018 | | :--- | :--- | :--- | | Net cash used in operating activities | $(13,685) | $(24,781) | | Net cash (used in) provided by investing activities | $167,497 | $(3,405) | | Net cash (used in) provided by financing activities | $(49,880) | $25,247 | | Net increase (decrease) in cash | $103,950 | $(2,755) | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the 59.3% year-over-year revenue decline to market volatility and sales organization transition, while the company's financial position strengthened significantly post-CICT sale - The decrease in revenue was attributed to a volatile macro-environment for U.S. onshore activity, transition of sales personnel, and deferral of completion activity by clients[119](index=119&type=chunk) - The company's strategy focuses on promoting its Complex nano-Fluid® (CnF®) chemistries and Prescriptive Chemistry Management® (PCM®) offering, targeting E&P companies that are increasingly sourcing consumables directly[111](index=111&type=chunk) - As of September 30, 2019, the company had **$107.0 million** in cash and cash equivalents and had terminated its credit facility, with a Strategic Capital Committee evaluating the deployment of net proceeds from the CICT sale[141](index=141&type=chunk) Consolidated Results of Operations Highlights (in thousands) | Metric | Three Months Ended Sep 30, 2019 | Three Months Ended Sep 30, 2018 | | :--- | :--- | :--- | | Revenue | $21,879 | $53,709 | | % Change | -59.3% | | | Loss from operations | $(11,853) | $(4,080) | | Loss from continuing operations | $(11,227) | $(4,843) | North American Drilling Activity (% Change Y-o-Y) | Metric | Q3 2019 vs Q3 2018 | YTD 2019 vs YTD 2018 | | :--- | :--- | :--- | | Average U.S. Active Drilling Rigs | -12.5% | -3.3% | | Average Canada Active Drilling Rigs | -36.8% | -32.3% | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=30&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company states that there have been no material changes to the quantitative or qualitative disclosures about market risk from those set forth in its Annual Report - There have been no material changes to the quantitative or qualitative disclosures about market risk, which include exposure to interest rates, commodity prices, and foreign currency exchange rates[155](index=155&type=chunk) [Item 4. Controls and Procedures](index=30&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of September 30, 2019, with no material changes in internal control over financial reporting during the third quarter - Based on an evaluation as of September 30, 2019, the principal executive and financial officers concluded that the company's disclosure controls and procedures were effective[157](index=157&type=chunk) - There were no changes in the company's internal control over financial reporting during the third quarter of 2019 that had a material effect[158](index=158&type=chunk) [PART II—OTHER INFORMATION](index=32&type=section&id=PART%20II%E2%80%94OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=32&type=section&id=Item%201.%20Legal%20Proceedings) The company is subject to routine litigation in the normal course of business, with no pending or threatened lawsuits expected to have a material effect on its financial position - Management is not aware of any pending or threatened lawsuits expected to have a material effect on the Company's financial position, results of operations or liquidity[161](index=161&type=chunk) [Item 1A. Risk Factors](index=32&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's 2018 Annual Report on Form 10-K and the Quarterly Report on Form 10-Q for the quarter ended March 31, 2019 - There have been no material changes to the risk factors detailed in the Company's 2018 Annual Report on Form 10-K and the Q1 2019 Form 10-Q[162](index=162&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=33&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During the third quarter of 2019, the company repurchased 29,397 shares to satisfy tax withholding requirements, with **$49.7 million** remaining available under the authorized repurchase program - During Q3 2019, the company repurchased **29,397 shares** to satisfy tax withholding obligations related to vested restricted shares, not as part of its public repurchase program[164](index=164&type=chunk)[165](index=165&type=chunk) - As of September 30, 2019, **$49.7 million** remained available for share repurchases under the Board's authorization from June 2015[166](index=166&type=chunk) [Item 3. Defaults Upon Senior Securities](index=33&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reports no defaults upon senior securities - None[167](index=167&type=chunk) [Item 4. Mine Safety Disclosures](index=33&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[168](index=168&type=chunk) [Item 5. Other Information](index=33&type=section&id=Item%205.%20Other%20Information) The company reports no other information for this item - None[169](index=169&type=chunk) [Item 6. Exhibits](index=34&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including the Share Purchase Agreement with ADM, corporate governance documents, officer certifications, and XBRL data files