Flotek Industries, Inc. · NYSE:FTK
Flotek Industries — Q2 2023 Earnings Presentation
29 slides from Flotek Industries's earnings presentation, Aug 8, 2023
Slide 1: Investor Presentation August 2023
Investor Presentation August 2023 EXHIBIT 99.2
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: Corporate Snapshot
Corporate Snapshot Abu Dhabi, UAE Raceland, LAMarlow, OK Houston, TX (HQ) Headquarters Field Office // 3 FTK Global Presence Founded: 1985 Employees: 143 Corporate Headquarters: Houston Countries with Clients: >15 Patents: >170 Long-Term Debt ($mm): $0.2 2Q 2023 Adj. Gross Profit Margin: 10% 2023 GU
Slide 4: Flotek: A Purpose-Driven Company
Flotek: A Purpose-Driven Company // 4 Our completion solutions have a proven, positive impact on sustainability and reducing the overall environmental impact of energy on air, land, water and people Who We Are An advanced technology-driven, green chemical and data analytics company providing unique
Slide 5: Our Strategic Priorities
Our Strategic Priorities Industry-Leading Innovation Track record of delivering fit-for-purpose optimized chemistry and data solutions Capital-light Growth Modest capital required to support robust growth objectives Environmental Leadership Focus on reducing impact on people, land, air, and water //
Slide 6: Flotek is a Compelling Investment Choice
Flotek is a Compelling Investment Choice // 6 • New leadership team with deep industry expertise poised to execute strategy • Complementary business segments drive rapid revenue expansion and significant improvement in profitability • Greater than 60% growth in annual revenue* • Greater than $20 MM
Slide 7: Second Quarter 2023 Highlights
Second Quarter 2023 Highlights // 7 • Strong margin improvement contributes to 108% growth in gross profit compared to 1Q 2023 • Adjusted gross profit* was positive for second consecutive quarter and up $6.7 MM or 423% from 2Q 2022 • Reported improvement in adj. EBITDA* for eighth consecutive quarte
Slide 8: Strong Growth in Revenue Continues
$0 $50,000 $100,000 $150,000 $200,000 $250,000 2020 2021 2022 2023E Strong Growth in Revenue Continues MANAGING FOR RAPID GROWTH // 8 • 2Q 2023 total revenues increased 72% YoY • Delivered growth despite industry-wide activity slowdown • Expect $210MM to $230MM for FY 2023 versus $136MM in 2022 - gr
Slide 9: Rapid Improvement in Data Analytics Business
Rapid Improvement in Data Analytics Business STRONG GROWTH IN REVENUE Revenue (MM) // 9 • 1H 2023 revenue nearly equals full year 2022 • 2023 full-year revenue expected to nearly double from 2022 • In Q1 2023 received first prototype of next generation JP3 flow cell sensor for proprietary Verax anal
Slide 10: Cost Control Initiatives Continue to Enhance Profitability
Cost Control Initiatives Continue to Enhance Profitability RAPID IMPROVEMENT IN MARGINS Quarterly Consolidated Gross Profit (Loss) (000’s) // 10 • 2Q 2023 gross profit positive for second consecutive quarter and up six-fold sequentially • Adjusted gross profit* margin increased to 10% • Anticipate g
Slide 11: Path to Profitability
Path to Profitability ANTICIPATE REACHING POSITIVE ADJUSTED EBITDA IN 2023 // 11 Quarterly Adjusted EBITDA*/Revenue * Adjusted EBITDA is a non-GAAP metric. See the Appendix in this presentation for a reconciliation to nearest GAAP measure -80% -70% -60% -50% -40% -30% -20% -10% 0% 2Q21 3Q21 4Q21 1Q2
Slide 12: Complementary Segments Deliver Sustainable Growth
• Global presence in over 15 countries • Establishing collaborative partnerships with E&P operators and oil field service providers • Extensive experience with proven solutions in over 20,000 completion wells worldwide • Fit-for-purpose optimized chemistry and data solutions allow customers to maxim
Slide 13: Chemical Technologies Business Overview
Chemical Technologies Business Overview // 13 • Technologically advanced products and services that significantly improve well performance and maximize value of customer’s business • Extensive portfolio of customized solutions that support operations across the value chain • Industry leader in deliv
Slide 14: Strong Presence Across All Key Basins
Strong Presence Across in All Key Basins // 14 Permian Basin EagleFord Haynesville Bakken Mid-Continent Denver-Julesburg Marcellus/Utica FLOTEK CHEMISTRY USED ON OVER 20,000 WELLS IN ALL MAJOR U.S. SHALE BASINS Gulf of Mexico San Joaquin
Slide 15: Chemical Technology Applications
Chemical Technology Applications // 15 Positioned to capitalize on strong growth cycle of responsible energy production via collaborative partnership with customers Drilling & Cementing Fluids to protect the reservoir and environment Enhancing maximum efficiency of productivity STIMULATION Drilling
Slide 16: The Flotek Advantage
0 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 0 5 10 15 20 C u m u la tiv e P ro d u c tio n (B O E) Months Permian Basin Average Cumulative BOE Flotek PCM Non-Flotek 25 +26% Uplift The Flotek Advantage // 16 • Prescribed Chemistry Management (PCM) • Proprietary energy chemistry s
Slide 17: Leveraging New Markets Diversifies Customer Base
Leveraging New Markets Diversifies Customer Base // 17 PROVIDES SIGNIFICANT FUTURE GROWTH OPPORTUNITY Industrial Geothermal Agricultural Solar Hydrogen As smart systems develop, so will the demand for green chemistry solutions Positioned to capitalize on proprietary patents, technology advancements
Slide 18: Data Analytics Business Overview
Data Analytics Business Overview // 18 • Provides accurate, real-time visibility into chemical composition flowing directly through a well-head, pipeline, power generator, refinery, and more. • Robust platform based on NIR Spectroscopy; doesn’t utilize consumables and there are no moving parts • Abi
Slide 19: One Technology Platform Multiple Applications
// 19 One Technology Platform Multiple Applications Data Analytics: Extensive Industry Applications Upstream • Realtime product quality analysis to meet pipeline and storage specs • Continuous BTU monitoring to facilitate field gas utilization in powering electric rigs and frac fleets • Flare monito
Slide 20: Extensive Deployment and Utilization of JP3 Units
// 20 JP3 Units Deployed Extensive Deployment and Utilization of JP3 Units 81 customers across all key basins 306 field units deployed with 635 individual measurement points
Slide 21: Asset-Based Loan Update
Asset-Based Loan Update • Received credit approval regarding a proposed ABL • Credit supported by eligible A/R, inventory and real estate • Reviewing loan documents and completing final administrative matters • Anticipate update on ABL process before the end of August • Borrowings expected to be use
Slide 22: Summary
Summary // 22 • Significant improvement in business fundamentals not reflected in share price • New leadership team with deep industry expertise poised to execute strategy • Complementary business segments drive rapid revenue expansion and significant improvement in profitability • Greater than 60%
Slide 23: Appendix
C) FLOTEK Appendix
Slide 24: An Industry Leader in Sustainable Solutions
An Industry Leader in Sustainable Solutions // 24 Green Chemistry DATA ANALYTICS INNOVATION COLLABORATION CHEMISTRY A Global Partner in Sustainability and Profitability • Empower customers with a social license to operate • Deliver value in the new sustainability-focused world • Reduce the total cos
Slide 25: Recent Financials: Statement of Operations
Recent Financials Unaudited Condensed Consolidated Statement of Operations (in thousands, except share data) // 25
Slide 26: Unaudited Condensed Consolidated Balance Sheets
Unaudited Condensed Consolidated Balance Sheets (in thousands, except share data) // 26
Slide 27: Unaudited Condensed Consolidated Statements of Cash Flows
Unaudited Condensed Consolidated Statements of Cash Flows (in thousands) // 27
Slide 28: Reconciliation of Non-GAAP Items and Non-Cash Items
Unaudited Reconciliation of Non-GAAP Items and Non-Cash Items Impacting Earnings (in thousands)(1) // 28 (1) Management believes that adjusted gross profit and adjusted EBITDA for the three and six months ended June 30, 2023, and 2022, and the three months ended March 31, 2023, are useful to investo
Slide 29: Investor Contact
Investor Contact Bond Clement Chief Financial Officer ir@flotekind.com (713) 726-5322