Flotek(FTK) - 2020 Q1 - Quarterly Report

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 Presents Flotek Industries, Inc.'s unaudited condensed consolidated financial statements for Q1 2020, with detailed accounting notes Unaudited Condensed Consolidated Balance Sheets 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 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 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 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 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 Provides detailed explanations of significant accounting policies and other financial information for Flotek's Q1 2020 statements Note 1 — Organization and Significant Accounting Policies 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