Flotek Industries, Inc. · NYSE:FTK
Flotek Industries — Q4 2023 Earnings Presentation
25 slides from Flotek Industries's earnings presentation, Mar 13, 2024
Slide 1: Corporate Update
) FLOTEK — Corporate Update March 2024
Slide 2: Forward-Looking Statements
// 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 con
Slide 3: Compelling Investment Opportunity
// 3 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-term contrac
Slide 4: Company Overview
// 4 Company Overview Founded: 1985 Employees: 143 Corporate Headquarters: Houston Countries with Clients: 59 Patents: >170 Debt (12.31.23) ($mm): $7.5 Headquarters FY 2023 Gross Profit Margin: 13% Field Office FTK Global Presence
Slide 5: A Purpose-Driven Company
// 5 A Purpose-Driven Company Who We Are An advanced technology-driven, green chemical and data analytics company providing unique and innovative completion solutions Our completion solutions have a Our Vision positive impact on We strive to be the collaborative partner of sustainability and choice
Slide 6: Our Strategic Priorities
// 6 Our Strategic Priorities Industry-Leading Innovation Expand Global Footprint Track record of delivering fit-for-purpose Sustainable growth in international optimized chemistry and data solutions chemistry revenues and data analytics Sustainable Revenue Growth Strong Balance Sheet 10-year contra
Slide 7: 2023 Highlights: Improvement in Performance
// 7 2023 Highlights: Improvement in Performance TRANSFORMATIVE YEAR WITH SIGNIFICANT GROWTH IN ALL PROFITABILITY METRICS • Delivered year-over-year growth: • Revenue: $52.0 million • Gross profit: $31.0 million • Adj. EBITDA*: $27.7 million Poised to deliver sustained growth • Full year adj. EBITDA
Slide 8: Strong Revenue Performance
// 8 Strong Revenue Performance TRANSFORMATIVE YEAR WITH SIGNIFICANT GROWTH IN ALL PROFITABILITY METRICS Annual Segmented Revenue ($MM) External Chemistry Revenue ($MM) $200.0 $8.1 $20.0 $180.0 $18.0 $18.0 $16.3 $160.0 $15.5 $16.0 $59.0 $140.0 $5.5 $14.0 $120.0 $12.0 $49.0 $100.0 $10.0 $9.2 $80.0 $8
Slide 9: Delivering Rapid Improvement in Gross Profit
// 9 Delivering Rapid Improvement in Gross Profit TRANSFORMATIVE YEAR WITH SIGNIFICANT GROWTH IN ALL PROFITABILITY METRICS Quarterly Consolidated Gross Profit (Loss) (000’s) $10,000 • 4Q 2023 gross profit was positive for the $7,500 fourth consecutive quarter • Delivered a $31.0 million increase in
Slide 10: Strong Financial Momentum Continues
// 10 Strong Financial Momentum Continues TRANSFORMATIVE YEAR WITH SIGNIFICANT GROWTH IN ALL PROFITABILITY METRICS Quarterly Adjusted EBITDA*/Revenue 20% 10% 0% • 2023 adj. EBITDA* increased $27.7 -10% million over 2022 -20% • 4Q 2023 was the tenth consecutive -30% quarter of improvement -40% -50% •
Slide 11: Complementary Segments Drive Growth
// 11 Complementary Segments Drive Growth CHEMISTRY AS A COMMON VALUE CREATION PLATFORM • Global presence in 59 countries Chemistry Technologies • Establishing collaborative partnerships with Sustainable chemistry solutions to maximize E&P operators and oil field service providers customer’s value c
Slide 12: Chemistry Technologies: Competitive Advantage
// 12 Chemistry Technologies: Competitive Advantage DELIVERING THE BEST UPLIFT PERFORMANCE IN INDUSTRY CnFTM Revenue Performance • Prescriptive Chemistry Management (PCM)TM $18.0 75% growth $16.3 Revenues ($ in MM) $15.0 • Proprietary energy chemistry solutions $12.0 • Dedicated chemistry management
Slide 13: Chemistry Technologies: New Markets
// 13 Chemistry Technologies: New Markets DIVERSIFIES CUSTOMER BASE AND PROVIDES FUTURE GROWTH OPPORTUNITIES Industrial Geothermal Agricultural Solar Hydrogen As smart systems develop, so will the demand for green chemistry solutions Positioned to capitalize on proprietary patents, technology advanc
Slide 14: Data Analytics: "Measure More" Strategy
// 14 Data Analytics: “Measure More” Strategy DIVERSIFYING REAL-TIME DATA MONITORING ACROSS CHEMISTRY LANDSCAPE Introduction of the new generation JP3 Analyzer • Unlocks an estimated $700 million oil & gas upstream TAM* • 12x improvement in manufacturing/delivery time • Provides a 60% Data as a Serv
Slide 15: Data Analytics: Industry Applications
// 15 Data Analytics: Industry Applications UTILIZING TECHNOLOGIES FOR EXPANSION INTO NEW MARKETS Upstream Midstream Downstream • Realtime product measurement • Gas processing plant control and • Realtime measurement to optimize improves accuracy of payments optimization distillation tower efficienc
Slide 16: Complimentary Segments: Outlook
// 16 Complimentary Segments: Outlook THE NEXT PHASE OF TRANSFORMATION Chemistry • Prescriptive chemistry management (PCM)TM and unique patented products unlocks maximum production uplift • Pursuing strategic opportunities within production and pipeline chemistry markets leveraging real-time measure
Slide 17: Summary: Compelling Investment Opportunity
// 17 Summary: 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-te
Slide 18: Appendix
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Slide 19: Recent Financials
// 19 Recent Financials Unaudited Condensed Consolidated Statement of Operations (in thousands, except share data)
Slide 20: Unaudited Condensed Consolidated Balance Sheets
// 20 Unaudited Condensed Consolidated Balance Sheets (in thousands, except share data) December 31, 2023 December 31, 2022 ASSETS Current assets: Cash and cash equivalents $ 5,851 $ 12,290 Restricted cash 102 100 Accounts receivable, net of allowance for credit losses of $745 and $623 at December 3
Slide 21: Unaudited Condensed Consolidated Statements of Cash Flows
// 21 Unaudited Condensed Consolidated Statements of Cash Flows (in thousands)
Slide 22: Unaudited Reconciliation of Non-GAAP Items and Non-Cash Items Impacting Earnings
// 22 Unaudited Reconciliation of Non-GAAP Items and Non-Cash Items Impacting Earnings (in thousands)(1) (1) (1) Management believes that adjusted gross profit, EBITDA, and adjusted EBITDA for the three and twelve months ended December 31, 2023 and 2022, are useful to investors to assess and underst
Slide 23: Data Analytics: Upstream Field Gas Usage
// 23 Data Analytics: Upstream Field Gas Usage Delivered 70% Reduction in Diesel and CNG usage • JP3 field gas monitoring system allows frac fleets and drilling rigs to safely run on field gas displacing more expensive and higher carbon footprint diesel • Provides meaningful cost savings compared to
Slide 24: Data Analytics: Upstream Market Disruptor
// 24 Data Analytics: Upstream Market Disruptor From 3 weeks to 5 Seconds! Upstream Custody Transfer challenges: • Readings only taken every 3 to 6 weeks with gas chromatography (gc) • Revenue degradation on inconsistent readings impacted by temperature, timing, and conditions • Requires onsite pers
Slide 25: Investor Contact
Investor Contact Bond Clement Chief Financial Officer ir@flotekind.com (713) 726-5322