Financial Performance - Flotek Industries reported its strongest quarter in the past decade, driven by complementary segments[9, 30] - First quarter 2025 revenue increased by 37% to $55.4 million compared to $40.4 million in the first quarter 2024[10, 30] - Net income for the first quarter 2025 was $5.4 million, a 244% increase from $1.6 million in the first quarter 2024[10, 30] - Adjusted EBITDA for the first quarter 2025 increased by 93% to $7.8 million compared to $4.0 million in the first quarter 2024[10, 30] - Adjusted EBITDA margin improved to 14% in the first quarter 2025, up from 10% in the first quarter 2024[10] - Diluted income per share increased to $0.17 in the first quarter 2025, up from $0.05 in the first quarter 2024[10, 30] Data Analytics - PWRtek Acquisition - The acquisition of PWRtek LLC includes 30 real-time gas monitoring and fuel optimization assets for mobile power generation[17] - PWRtek acquisition brings a 6-year agreement with $160 million in recurring revenue backlog and an expected $20 million in segment operating income in 2026[17] - Data Analytics recurring contracted backlog is $164 million[27] Chemistry Technologies - External chemistry revenue grew by 88% in the first quarter 2025 compared to the first quarter 2024, making up 42% of total chemistry revenues[31, 40]

Financial Performance - Flotek reported total revenues of $55.4 million for Q1 2025, a 37% increase from $40.4 million in Q1 2024[1] - Gross profit for Q1 2025 was $12.4 million, up 41% from $8.8 million in Q1 2024, with a gross profit margin of 23%[1][4] - Net income reached $5.4 million in Q1 2025, a 244% increase compared to $1.6 million in Q1 2024, resulting in diluted earnings per share of $0.17[1][13] - Adjusted EBITDA for Q1 2025 was $7.8 million, representing a 93% increase from $4.0 million in Q1 2024[1][13] - Total revenues for Q1 2025 increased to $55,362,000, a 37.1% rise from $40,374,000 in Q1 2024[18] - Net income for Q1 2025 was $5,380,000, compared to $1,562,000 in Q1 2024, representing a 244.5% increase[18] - Gross profit for Q1 2025 reached $12,449,000, up 41.5% from $8,821,000 in Q1 2024[18] - Operating income for Q1 2025 was $5,567,000, a significant increase from $2,108,000 in Q1 2024, marking a 164.5% growth[18] - Adjusted EBITDA for Q1 2025 was $7,780,000, up from $4,026,000 in Q1 2024, indicating a 93.5% increase[22] - The company reported a basic income per common share of $0.18 for Q1 2025, compared to $0.05 in Q1 2024, a 260% increase[18] Revenue Expectations - Flotek expects total revenue for 2025 to be between $200 million and $220 million, reflecting a 12% increase compared to 2024[3][4] Operational Highlights - The company acquired 30 real-time gas monitoring and dual fuel optimization assets for mobile power generation, along with a $160 million multi-year contract[4] - External chemistry revenue increased by 88% and Data Analytics revenue rose by 57% in Q1 2025 compared to Q1 2024[4] - Selling, General and Administrative (SG&A) expenses were $6.3 million in Q1 2025, representing 11% of total revenues, down from 15% in Q1 2024[7] - Flotek has achieved five consecutive quarters of growth in revenue, gross profit, net income, and adjusted EBITDA[4][5] Cash Flow and Assets - Cash provided by operating activities for Q1 2025 was $7,313,000, compared to $3,887,000 in Q1 2024, reflecting an 88.5% increase[20] - Cash and cash equivalents at the end of Q1 2025 were $6,253,000, up from $5,219,000 at the end of Q1 2024, a 19.8% increase[20] - The company experienced a decrease in accounts receivable by $2,489,000 in Q1 2025, compared to an increase of $2,937,000 in Q1 2024[20] Research and Development - Research and development expenses for Q1 2025 were $355,000, slightly down from $406,000 in Q1 2024[18] Strategic Goals - The company aims to leverage innovative data and chemistry solutions to enhance customer value and drive future growth[5][6]

HOUSTON, April 28, 2025 /PRNewswire/ -- Flotek Industries, Inc. ("Flotek") (NYSE: FTK) and ProFrac Holding Corp. (NASDAQ: ACDC) ("ProFrac") today jointly announced Flotek's acquisition of power generation assets and related intellectual property (the "Acquired Assets") from ProFrac GDM, LLC ("ProFrac GDM"), a subsidiary of ProFrac, for $105 million. Flotek concurrently entered into an agreement for a six-year dry lease of the Acquired Assets with ProFrac GDM (the "Lease Agreement"). ESD Skid for Gas Con ...

Industry Overview - Crude oil prices have declined nearly 15% year to date, reaching $61.99 per barrel, the lowest since 2021, driven by recession concerns and OPEC+'s unexpected decision to accelerate production cuts [1][4] - The U.S. tariffs imposed during the Trump administration are negatively impacting energy markets, with tariff rates on key trade partners ranging from 10% to 34%, leading to revised global economic growth projections [3] - OPEC+ has raised crude output by 411,000 barrels per day in May, significantly exceeding expectations, which has added pressure on crude prices amid existing macroeconomic uncertainties [4] Investment Opportunities - The current pullback in the energy sector may present a strategic buying opportunity for long-term investors, as the decline is seen as driven by short-term volatility rather than fundamental issues [2][5] - Identified companies such as Prairie Operating Co. (PROP), HighPeak Energy (HPK), and Flotek Industries (FTK) are highlighted as potential investments that could benefit from a recovery in oil prices [2][5] Company Analysis - **Prairie Operating Co. (PROP)**: An independent oil and gas company focused on the DJ Basin, with a Zacks Rank 1. The company is expected to see a 334.3% increase in 2025 earnings, with forecasts rising from $2.44 to $4.92 per share over the past 60 days [10][11] - **HighPeak Energy (HPK)**: A rapidly growing independent oil and gas producer in the Midland Basin, also holding a Zacks Rank 1. The company anticipates a 156.7% increase in 2025 earnings, with estimates jumping 93% in the last 60 days [12][13] - **Flotek Industries (FTK)**: Specializes in advanced chemical technologies and data analytics for the energy sector, holding a Zacks Rank of 2. The company expects a 38.2% increase in 2025 earnings, with a 9.3% rise in estimates over the past 60 days [14][15]

Company Announcement - Flotek Industries, Inc. plans to release its first quarter 2025 financial and operating results on May 6, 2025, after market close [1] - The earnings conference call is scheduled for May 7, 2025, at 9:00 a.m. CST (10:00 a.m. EST) [1] Access Information - Participants can access the earnings call via Flotek's website, by telephone, or through a webcast link [2] - A recording of the conference call will be available on the Company's website after the call concludes [2] Company Overview - Flotek Industries is a leading chemistry and data technology company servicing the Energy industry [3] - The Company holds over 130 patents and has more than 20 years of field and laboratory data, with a global presence in over 59 countries [3] - Flotek focuses on sustainable and optimized chemistry and data solutions to minimize environmental impact [4]

Group 1 - Flotek Industries (NYSE: FTK) has successfully doubled its share price over the last six months, a notable achievement compared to other companies in the Oilfield Services (OFS) sector [1] - The investment analysis provided by The Daily Drilling Report includes a model portfolio covering all segments of upstream oilfield activity, with weekly updates and ideas for both U.S. and international energy companies [1] Group 2 - The article highlights the expertise of an international oil industry veteran with 40 years of experience, emphasizing their specialization in the upstream oil sector [2]

Core Viewpoint - The article emphasizes the importance of timing and sustainability in stock trends for successful short-term investing, highlighting the need for strong fundamentals to maintain momentum [1][2]. Group 1: Stock Performance - Flotek Industries (FTK) has shown a solid price increase of 28.7% over the past 12 weeks, indicating investor confidence in its potential upside [4]. - FTK has also maintained a price increase of 4.4% over the last four weeks, suggesting that the upward trend is still intact [5]. - Currently, FTK is trading at 87.1% of its 52-week high-low range, indicating it may be on the verge of a breakout [5]. Group 2: Fundamental Strength - FTK holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises [6]. - The stock has an Average Broker Recommendation of 1 (Strong Buy), reflecting high optimism from the brokerage community regarding its near-term price performance [7]. Group 3: Investment Strategy - The "Recent Price Strength" screen is a useful tool for identifying stocks like FTK that are on an uptrend supported by strong fundamentals [3]. - The article suggests that investors should consider other stocks that meet similar criteria for potential investment opportunities [8].

Financial Performance - Total revenues for the year ended December 31, 2024, decreased by $1.0 million to $187.0 million compared to 2023, primarily due to decreased activity under the ProFrac Agreement[158]. - Total revenues for 2024 were $187,025, a slight decrease of 0.55% from $188,058 in 2023[210]. - Consolidated net income for 2024 was $10.5 million, down from $24.9 million in 2023[177]. - Net income for 2024 was $10,498, down 57.6% compared to $24,713 in 2023[212]. - Basic income per share decreased to $0.36 in 2024 from $1.00 in 2023, reflecting a decline of 64%[210]. - Gross profit for the year ended December 31, 2024, increased by $15.1 million to $39.4 million, resulting in a gross profit margin of 21.1% compared to 12.9% in 2023[158]. - Gross profit increased significantly to $39,386 in 2024, up 62.5% from $24,263 in 2023[210]. - Revenue from external customers increased by $4.2 million, or 7%, in the Chemistry Technologies segment for the year ended December 31, 2024, driven by increased sales with both new and existing customers[165]. - Research and development expenses decreased to $1,714 in 2024 from $2,486 in 2023, a reduction of 30.9%[210]. - Research and development expenses decreased by $0.8 million, or 31%, for the year ended December 31, 2024, due to lower personnel costs from headcount optimization[162]. - Operating income for the year ended December 31, 2024, decreased by $11.0 million to $12.2 million, primarily due to a $30.0 million gain in fair value of the Contract Consideration Convertible Notes Payable in 2023[163]. Customer and Revenue Concentration - Revenues from the ProFrac Agreement represented 62% and 65% of total revenues during 2024 and 2023, respectively[68]. - Revenue from the Company's three largest customers accounted for 75% and 73% of consolidated revenue for the years ended December 31, 2024 and 2023, respectively, indicating a significant customer concentration risk[79]. - The Company has seen an increase in concentration risk due to the ProFrac Agreement, which may impact customer relationships and revenue stability[86]. - As of December 31, 2024, amounts due from ProFrac Services, LLC totaled $52.4 million, including $32.4 million related to 2024 Contract Shortfall Fees[69]. - Contract Shortfall Fees recorded for the year ended December 31, 2024, amounted to $32.4 million due to unmet minimum purchase requirements under the ProFrac Agreement[171]. Innovation and Technology - The Environmental Protection Agency designated the Company's near-infrared spectrometer as an approved measurement technology, potentially opening new growth opportunities in the Data Analytics segment[20]. - The EPA approved the company's near-infrared spectrometer measurement system for flare monitoring, which could facilitate future growth opportunities[58]. - The Company is focused on driving innovation between the Chemistry Technologies and Digital Analytics segments to enhance efficiencies for E&P operators[55]. - The Company's Data Analytics segment provides real-time insights every fifteen seconds, enhancing operational efficiency and reducing emissions for customers[25]. - The company has gained traction with Verax™ analyzers in North American markets for critical applications requiring real-time compositional information[56]. Financial Condition and Risks - The Company may face downward pressure on prices due to increased competition, which could adversely impact revenues, margins, and operating results[74]. - The Company’s financial condition may be adversely impacted if it fails to develop and introduce new products or differentiate existing products[71]. - The Company’s ability to access capital markets is dependent on investor willingness and could affect its growth and competitive position[72]. - The principal supply issues for the next twelve months include fluctuating shipping costs, labor shortages, and availability of raw materials[59]. - The Company may not be able to pass along price increases to customers, potentially resulting in adverse impacts on margins and operating profits[83]. - The Company is exposed to potential allegations of patent infringement, which could lead to costly litigation and adversely affect financial results[77]. - The Company relies on a combination of patents, trademarks, and other methods to protect intellectual property, but there is no assurance that these measures will be effective[75]. - The Company is subject to complex environmental regulations, which could result in significant liabilities and impact financial condition[95]. - Regulatory pressures and environmental activism could reduce demand for the Company's products and services, adversely affecting financial condition and results of operations[101]. - The Company may face difficulties in sourcing key technical components for its products, which could hinder its ability to supply equipment or services[84]. - The Company may experience conflicts of interest due to its relationship with ProFrac Services LLC, which is both a major customer and the largest shareholder[121]. Capital Structure and Shareholder Matters - The Company is currently authorized to issue up to 240,000,000 shares of common stock, which may lead to dilution of current stockholders' ownership interests if additional shares are issued[123]. - As of December 31, 2024, ProFrac Holdings, LLC and its affiliates owned approximately 51% of the Company's common stock, potentially discouraging unsolicited acquisition proposals[127]. - The Company has no current plans to pay dividends on its common stock, requiring investors to rely on stock appreciation for returns[128]. - The Company has never declared or paid cash dividends on its common stock, and there are no current plans to do so[143]. - The Company may issue additional securities in connection with future acquisitions, which could adversely affect the trading price of its common stock[124]. - The Company may issue shares of preferred stock or debt securities with greater rights than its common stock, subject to NYSE rules[125]. - The Company's certificate of incorporation contains anti-takeover provisions that could discourage or prevent others from acquiring the Company[126]. Operational Performance - The Company achieved a total recordable incident rate (TRIR) of 0.50 for the year ended December 31, 2024, indicating a strong safety performance[46]. - The Company operates three manufacturing facilities and a research facility in the U.S., with two owned and the remainder leased[138]. - The Company’s operations are not significantly affected by seasonality, but weather conditions can impact client activity levels and operational performance[28]. - The Company could be adversely affected by severe weather conditions, leading to service curtailment and loss of productivity[116]. - Changes in laws and regulations related to hydraulic fracturing may negatively impact the Company's operations and revenue generation[103]. - The market price of the Company's common stock has been volatile, influenced by various external factors[118]. - The Company has not identified any risks from known cybersecurity threats that have materially affected its business as of December 31, 2024[137]. - The Company has established a Cybersecurity Incident Response Team (CIRT) to enhance its cyber incident response capabilities[134]. Cash Flow and Liquidity - The Company had unrestricted cash and cash equivalents of $4.4 million as of December 31, 2024, down from $5.9 million in 2023[171]. - Net cash provided by operating activities was $3.4 million in 2024, a significant improvement from a cash used of $11.3 million in 2023[177]. - Changes in working capital used $18.5 million of cash in 2024, compared to $13.2 million in 2023[178]. - Net cash used in investing activities was $1.8 million in 2024, primarily for capital additions, compared to $1.0 million in 2023[179]. - Net cash used in financing activities was $3.1 million in 2024, mainly due to $2.7 million in net payments on the ABL[180]. - The Asset Based Loan (ABL) provides up to $20.0 million of credit availability, with an interest rate of 9.5% as of December 31, 2024[172][174]. - The interest rate under the ABL was 9.5% in 2024, down from 11.0% in 2023, with a weighted-average interest rate of 10.8% for the year[193]. Inventory and Assets - The reserve for excess and obsolete inventory was $5.2 million in 2024, representing 28.2% of inventory, down from $6.1 million or 32.3% in 2023[187]. - Total current assets rose to $96,456 in 2024, an increase of 26.2% from $76,447 in 2023[207]. - Total assets increased to $170,796 in 2024, up 8.5% from $157,513 in 2023[207]. - Total liabilities increased slightly to $56,896 in 2024, compared to $55,553 in 2023[207]. - Cash and cash equivalents decreased to $4,404 in 2024 from $5,851 in 2023, a decline of 24.8%[207]. - Contract assets, net, were recorded at $69.0 million as of December 31, 2024[201].

Financial Data and Key Metrics Changes - Q4 2024 total revenues increased by 20% compared to Q4 2023, driven by a 21% rise in external customer revenue [11][25] - Q4 2024 net income was $4.4 million, and adjusted EBITDA was $7 million, representing increases of 111% and 78% respectively compared to Q4 2023 [13][25] - Full year 2024 adjusted EBITDA reached $20.3 million, up $18 million from 2023, marking the highest level since 2017 [13][36] - The stock performance in 2024 improved by 140%, ranking in the top three among oilfield service stocks [14] Business Line Data and Key Metrics Changes - External customer chemistry revenue increased by 50% sequentially in Q4 2024, with total chemistry revenues up 18% compared to Q4 2023 [27][28] - Data analytics service revenue grew by 124% year-over-year in Q4 2024, contributing to a total revenue increase of 74% in the data analytics segment compared to Q4 2023 [29][30] - International chemistry revenue in Q4 was approximately $4.5 million, with a total of $9.2 million for the year, indicating a nearly 300% sequential increase [46] Market Data and Key Metrics Changes - The international market contributed significantly to revenue growth, particularly in Saudi Arabia and the UAE, with a focus on slickwater fracturing systems [44][46] - The demand for oil and gas is expected to expand over the next decade, with a projected 15% increase in electricity demand in the US by 2030 [22] Company Strategy and Development Direction - The company aims to enhance shareholder value through continuous improvement, market share expansion, and innovative products [10][15] - Flotek is focusing on technology leadership by integrating data and chemistry solutions to address industry challenges [16][22] - The company plans to expand its addressable market through new technologies and applications, particularly in data analytics and power generation solutions [20][22] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about sustaining profitability momentum into early 2025 despite historical challenges in Q1 [23] - The company anticipates that international business will help smooth out seasonal fluctuations in revenue [58] - Management highlighted the importance of regulatory compliance and sustainability programs in driving growth [51][54] Other Important Information - The company achieved zero lost time incidents in field operations, emphasizing a commitment to safety [15] - SG&A costs declined by 11% in 2024, indicating improved operational efficiency [31] Q&A Session Summary Question: Contribution of international revenue in Q4 - Management noted that international chemistry revenue was about $4.5 million in Q4, with significant contributions from the UAE [46] Question: Margins on international sales - Management indicated that while some components have good margins, the majority of strong margins come from value-add technologies [48] Question: Impact of EPA regulations on business development - Management reported continued growth in flare monitoring services despite regulatory delays, with major players expanding their commitments [51] Question: Expectations for Q1 revenue - Management expects international business to help smooth out typical Q1 seasonality, with optimism for better performance compared to previous years [58] Question: Details on data analytics products - Management provided insights into the Expect custody transfer solution and its potential for real-time monitoring and transparency in gas quality [62][66] Question: Working capital expectations - Management confirmed expectations for a significant reduction in accounts receivable in Q1 due to shortfall payments [112]

Flotek Industries, Inc. (NYSE:FTK) Q4 2024 Earnings Conference Call March 11, 2025 10:00 AM ET Company Participants Mike Critelli - Director, Finance & IR Ryan Ezell - CEO & Director Bond Clement - CFO Conference Call Participants Jeff Grampp - Alliance Global Partners Donald Crist - Johnson Rice Gerry Sweeney - ROTH Capital Josh Jayne - Daniel Energy Partners Operator Good morning, ladies and gentlemen, and welcome to Flotek Industries, Inc. Fourth Quarter and Full Year 2024 Earnings Conference Call. At th ...