Corporate Update
May 2024
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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.
This presentation includes certain non-GAAP measures. Please refer to the reconciliations provided in the earnings press release and the appendix in this presentation for the nearest GAAP measure.
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Compelling Investment Opportunity
RETURN TO PROFITABILITY UNDERSCORES TURNAROUND EXECUTION
Market leading Oil & Gas prescriptive chemistry solutions
- Sustained growth in US and international O&G completion chemistry
- Industry leading technology improving BOE uplift by +26%
- Long-termcontracted chemistry volumes mitigates impact of industry volatility
Market disrupting real-time measurement technology
- Data analytics segment expected to grow associated revenues over 50% in 2024
- Release of next generation analyzer provides scale and new market opportunities
Leadership team with deep industry expertise to execute rapid growth strategy
Company Overview
Headquarters
Field Office
FTK Global Presence
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Founded: | 1985 |
Employees: | 143 |
Corporate Headquarters: | Houston |
Countries with Clients: | 59 |
Patents: | >170 |
1Q 2024 Results:
- | Gross Profit Margin: | 22% |
- | Net Income ($MM): | $1.6 |
- | Adj. EBITDA* ($MM): | $4.0 |
- | Debt to Adj. EBITDA*: | 0.3x |
* Adjusted EBITDA is a non-GAAP measure. See the Appendix in this presentation for a reconciliation to the nearest GAAP measure.
A Purpose-Driven Company
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
Value Proposition
We collaborate and deliver sustainable, optimized chemistry and data solutions that
maximize our customers' value
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Our completion solutions have a positive impact on sustainability and reducing the overall environmental impact of energy on air, land, water and people
Our Strategic Priorities
Industry-Leading Innovation
Track record of delivering fit-for-purpose optimized chemistry and data solutions
Sustainable Revenue Growth
10-year contracted chemistry volumes with significant market expansion opportunities
Enhanced Profitability
Generated a $7.9 million improvement in Adj. EBITDA* 1Q 2024 over 1Q 2023
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Expand Global Footprint
Sustainable growth in international revenues
Strong Balance Sheet
Debt to Adj. EBITDA* 0.3x
Environmental Leadership
Focus on reducing impact of energy on air, land, water, and people
* Adjusted EBITDA is a non-GAAP measure. See the Appendix in this presentation for a reconciliation to the nearest GAAP measure.
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1Q 2024 Highlights: Improvement in Performance
Improved profitability with lower industry fleet counts
- Delivered year-over-year growth:
• | Net income*: | $10.8 million |
• | Gross profit: | $6.9 million |
• | Adj. gross profit**: | $7.4 million |
• | Adj. EBITDA**: | $7.9 million |
- Realized gross profit margin and adj. gross profit margin** of 22% and 25%, respectively
- 11th consecutive quarter of improvement in adj. EBITDA** as a percentage of revenue
- Initiated full year 2024 guidance of adj. gross profit margin*** of 18% to 22% and adj. EBITDA*** of $10 million to $16 million
- Borrowings under Asset Based Loan declined 58% compared to year-end 2023
Poised to deliver sustained growth and further market share gains through chemistry and emerging data analytics upstream market
- 1Q 2023 net income excludes $30.6 million in non-cash gains related to the fair value adjustment of the Company's convertible notes and the partial forgiveness of the Company's PPP loan
- Adjusted gross profit and adjusted EBITDA are non-GAAP measures. See the Appendix in this presentation for a reconciliation to the nearest GAAP measure
- We are unable to reconcile this forward-lookingnon-GAAP financial measure to the most directly comparable GAAP financial measure without unreasonable efforts, as we are unable to predict with a reasonable degree of certainty
the impact of certain items that would be expected to impact the GAAP financial measure
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Strong Revenue Performance
TRANSFORMATIVE YEAR WITH SIGNIFICANT GROWTH IN ALL PROFITABILITY METRICS
Annual Segmented | External Chemistry Revenue | ||||||||||||||||||||
Total Revenue ($MM) | Quarter 1 Comparison ($MM) | ||||||||||||||||||||
$200.0 | $14.0 | ||||||||||||||||||||
$8.1 | |||||||||||||||||||||
$180.0 | $12.0 | ||||||||||||||||||||
$160.0 | |||||||||||||||||||||
$59.0 | $10.0 | ||||||||||||||||||||
$140.0 | $5.5 | ||||||||||||||||||||
$120.0 | $8.0 | ||||||||||||||||||||
$100.0 | $49.0 | ||||||||||||||||||||
$80.0 | $6.0 | $11.7 | |||||||||||||||||||
$120.9 | $9.2 | ||||||||||||||||||||
$60.0 | |||||||||||||||||||||
$4.3 | $4.0 | ||||||||||||||||||||
$40.0 | $81.6 | $2.0 | |||||||||||||||||||
$20.0 | $38.9 | ||||||||||||||||||||
$- | $- | ||||||||||||||||||||
2021 | 2022 | 2023 | 1Q23 | 1Q24 | |||||||||||||||||
ProFrac Chemistry | External Chemistry | Data Analytics | External Chemistry | ||||||||||||||||||
* ProFrac Chemistry reflects 'Chemistry Only' revenues
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External Chemistry: Operator Seasonality
($MM)
$19.0 | |
Sales | $17.0 |
$15.0 | |
Chemistry | |
$13.0 | |
External | $11.0 |
$9.0 | |
$7.0 | |
$5.0 |
External Chemistry Sales by Quarter | ||||||||||
286 | $18.0 | 290 | ||||||||
279 | $16.3 | 285 | ||||||||
280 | ||||||||||
273 | $15.5 | |||||||||
275 | 275 | |||||||||
268 | $14.1 | Fleets* | ||||||||
267 | ||||||||||
$12.1 | $13.2 | $11.7 | 265 | |||||||
270 | ||||||||||
266 | 258 | FracUS | ||||||||
$9.3 | $9.2 | 255 | ||||||||
260 | ||||||||||
255 | 250 | |||||||||
245 | ||||||||||
240 | ||||||||||
235 | ||||||||||
1Q22 | 2Q22 | 3Q22 | 4Q22 | 1Q23 | 2Q23 | 3Q23 | 4Q23 | 1Q24 | ||
External Chemistry | US Frac Fleets | * US Average Frac Fleets according to The | ||||||||
American Oil & Gas Reporter |
The last three years have experienced seasonality impacts in 1Q:
- Operator capital budgets have seen slow starts in the first quarter in each of the last 3 years
- 27% improvement in Q1 2024 sales compared Q1 2023 with 18 fewer fleets
- Expect a substantial revenue improvement in Q2 2024
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Delivering Rapid Improvement in Gross Profit
CONSISTENT GROWTH IN PROFITABILITY METRICS
Quarterly Consolidated Gross Profit (Loss)
($000's) | ||
$10,000 | ||
$7,500 | ||
$5,000 | ||
$2,500 | ||
$0 | ||
($2,500) | ||
1Q22 | 1Q23 | 1Q24 |
- 1Q 2024 gross profit was positive for the fifth consecutive quarter despite impacts of 1Q seasonality
- Delivered a $6.9 million increase in 1Q 2024 gross profit compared to 1Q 2023
- Long-termcontracted chemistry volumes protects against lower frac fleet activity
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Flotek Industries Inc. published this content on 07 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 07 May 2024 20:03:06 UTC.