Flotek Industries, Inc. · NYSE:FTK
Flotek Industries — Q3 2024 Earnings Presentation
19 slides from Flotek Industries's earnings presentation, Nov 5, 2024
Slide 1: 3rd Quarter 2024 Earnings Presentation
3rd Quarter 2024 Earnings Presentation November 5, 2024
Slide 2: Forward-Looking Statements
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 conditio
Slide 3: Flotek Industries: Chemistry as a Common Value Creation Platform
Flotek Industries CHEMISTRY AS A COMMON VALUE CREATION PLATFORM 8 Consecutive Quarters Value Creation through Data Analytics of Improved Adj. EBITDA* Chemistry & Data Technology with High ROI Long-term ‘Take or Pay’ Strong Balance Sheet Tangible Environmental, Contract Insulates Risk with Low Debt H
Slide 4: Complementary Segments Drive Growth
Complementary Segments Drive Growth CHEMISTRY AS A COMMON VALUE CREATION PLATFORM Founded: 1985 Chemistry Technologies Employees: 143 Sustainable chemistry solutions to Headquarters: Houston maximize customer’s value chain while minimizing their environmental impact Countries with Clients: >59 Paten
Slide 5: 3Q 2024 Highlights
3Q 2024 Highlights IMPROVED PROFIT AND REVENUE WITH LOWER NORTH AMERICAN FRAC FLEET COUNT • Delivered year-over-year Improvements: Revenue: 5% SG&A: 12% Net income: 97% Adj. EBITDA*: 43% • Increased FY24 adj. EBITDA** guidance range to $16.5MM to $18.5MM • Mid-point of new guidance represents a 35%
Slide 6: Chemistry Growth in a Contracting Market
Chemistry Growth in a Contracting Market CHEMISTRY SEGMENT CONTINUES TO GAIN MARKET SHARE Total Chemistry Revenue $50 275 $47.1 North America Average Frac Fleets 255 • Chemistry revenues up 7% sequentially with 253 North America Active frac fleet counts down 8% Revenue (in $MM’s) $45 250 $44.1 • Rel
Slide 7: Data Analytics Revenue Growth
Data Analytics Revenue Growth JP3 VERACAL FLARE APPLICATION BOLSTERS DATA ANALYTICS REVENUE IN 3Q24 $3.0 50% 44% $2.5 $1.0 40% • DA segment generated $1.2MM in gross 30% profit during 3Q24, an 88% increase from Revenue (in $MM’s) $2.0 2Q24 Gross Margin % 30% 25% $0.7 $1.5 $0.7 • 25% of 3Q24 segment
Slide 8: Financial Momentum Continues
Financial Momentum Continues TREND OF PROFITABILITY IMPROVEMENT REACHES 8 CONSECUTIVE QUARTERS Quarterly Adjusted EBITDA* Growth $6.0 $4.8 $4.4 $4.0 $4.0 $4.0 $3.4 TTM 3Q23 3Q24 Growth Adj. EBITDA ($MM’s) $2.0 Gross Profit: $ 12.8 MM $ 36.5 MM $ 23.7 MM $0.0 SG&A: $ 27.5 MM $ 24.6 MM ($ 2.9 MM) -$2.
Slide 9: Chemistry Technologies: Competitive Advantage
Chemistry Technologies: Competitive Advantage DELIVERING THE BEST UPLIFT PERFORMANCE IN INDUSTRY DATA SUPPORTED GEOCENTRIC CHEMISTRY MODELING • Prescriptive Chemistry Management (PCM)TM • Proprietary energy chemistry solutions • Experienced chemistry energy team • Customized solutions to each well’s
Slide 10: Data Analytics: VeraCal Flare Solution
Data Analytics: VeraCal Flare Solution INITIAL PENETRATION INTO SIGNIFICANT UPSTREAM APPLICATIONS EPA Approval on Flaring Measurement Application • Expected to unlock an estimated $220 million oil & gas upstream TAM* annually • First EPA approved alternative measurement solution • 15 tests performed
Slide 11: Investor Contact
Investor Contact: Mike Critelli Director of Finance & Investor Relations ir@flotekind.com // 11
Slide 12: Appendix
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Slide 13: Data Analytics: Measure More Strategy
Data Analytics: “Measure More Strategy” UTILIZING TECHNOLOGIES FOR EXPANSION INTO NEW MARKETS Growth Growth Upstream Midstream Downstream • Flare monitoring: comply with • Gas processing plant control and • Process Controls: real-time EPA regulations optimization measurement to optimize distillation
Slide 14: Data Analytics: Upstream Field Gas Usage
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 gas c
Slide 15: Data Analytics: Upstream Market Disruptor
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 personnel
Slide 16: Recent Financials: Statement of Operations
Recent Financials Unaudited Condensed Consolidated Statement of Operations (in thousands) // 16
Slide 17: Recent Financials: Balance Sheets
Recent Financials Unaudited Condensed Consolidated Balance Sheets (in thousands, except share data) // 17
Slide 18: Recent Financials: Statements of Cash Flows
Recent Financials Unaudited Condensed Consolidated Statements of Cash Flows (in thousands) // 18
Slide 19: Recent Financials: Non-GAAP Reconciliation
Recent Financials Unaudited Reconciliation of Non-GAAP Items & Non-Cash Items Impacting Earnings (in thousands) (1) (1) Management believes that adjusted gross profit, EBITDA and adjusted EBITDA for the periods presented above, are useful to investors to assess and understand operating performance,