Flotek Industries, Inc. · NYSE:FTK
Flotek Industries — Houston Energy Financial Forum 2008
20 slides from Flotek Industries's conference presentation, Nov 17, 2008
Slide 1: Flotek Industries, Inc.: A Technology-Driven Growth Company
Exhibit 99.2 Flotek Industries, Inc. A Technology-Driven Growth Company Jerry Dumas, Chairman & CEO Houston Energy Financial Forum November 18-20, 2008 www.flotekind.com
Slide 2: Flotek Overview
Flotek Overview Flotek’s business is comprised of three segments Drilling Products Segment Leading provider of downhole rental tools to the energy and mining industries Complete bottom hole assembly including motores, MWD and stabilization tools Chemicals & Logistic Segment Provide chemicals for dri
Slide 3: Flotek Growth Engines
Flotek Growth Engines Sustainable Earnings Growth Growth Strategy: Core Business Growth: Diversified revenue base with Specialized products for low capital requirements unconventional oil & gas Attractive acquisitions in Artificial lift—a $6.6B market * strategic markets Stimulation chemicals—a Orga
Slide 4: Focused, Balanced Growth Strategy
Focused, Balanced Growth Strategy We take a balanced approach to growth of our three business segments Acquisitions and organic growth Quarterly Revenue (By Segment) Demonstrated acquisition track record In $M – Completed 12 acquisitions since 2001 $70 Significant organic growth – 65% of revenue gro
Slide 5: Third Quarter 2008 Financial Highlights
Third Quarter 2008 Financial Highlights 3Q 2008 vs. 3Q 2007 In $M 2007 vs. 2008 – 50% revenue growth 70 50% 49% 50% – 49% increase EBITDA 60 62.8 42% 45% – 42% growth in income from 40% operations 50 35% – 16% increase in net income; 40 30% 41.7 15% increase in diluted 25% earning per share 30 20% –
Slide 6: Third Quarter 2008 Product Highlights
Third Quarter 2008 Product Highlights New Technologies In $M 2007 vs. 2008 – StimLube & StimLube CAT 70 50% 49% 50% friction reducers 45% – AMB-100 biocide 60 62.8 42% 40% – New TeleShot MWD tool 50 35% – Flotek Shock Subs and Drilling Jars 30% 40 41.7 – Field Testing TelePulse MWD for 25% use in di
Slide 7: Proprietary, Technology-Driven Products
Proprietary, Technology-Driven Products Flotek continues to shift offerings toward specialty, away from commodity Focus on high market growth Historical Margins Deliver strong profitability 50% 50% 42.7% 42.9% Customer-focused R&D efforts 41.5% 40.9% 40% 40% in chemistry and mechanical areas 30% 30%
Slide 8: Drilling Products Segment
Drilling Products Segment Complementary technologies – motors, telemetry and drill string components Teledrift: Revenue Leading designer and manufacturer of In $M wireless survey and measurement while $60 $56.8 drilling (MWD) tools $50 Increases our offering of proprietary, technology-oriented downh
Slide 9: Teledrift
Teledrift Extraordinary technology Compliments mud motor technology Aggressive directional rental opportunity “Franchise” technology – a proven industry standard Gross profit and EBITDA margins 9
Slide 10: Chemicals & Logistics Segment
Chemicals & Logistics Segment We offer a full spectrum of specialty chemicals for drilling and cementing, stimulation, acidizing and production Proprietary Specialty Chemicals Proprietary / For drilling, cementing, completion and production: Patent-Pending 75% 75% specialty products by revenue Custo
Slide 11: Chemicals Group
Chemicals Group Growing global demand for oilfield chemicals* 5.9% yearly demand increase for oilfield chemicals – $14.5B market by 2010 Largest market is North America – Nearly 60% of total demand in 2010 North Sea demand for high value, environmental products – Biodegradable capillary foamer – Mic
Slide 12: Key Technology
Key Technology Patented Micro-emulsion chemistry for drilling, fracturing and acidizing “Green” chemicals enhance unconventional gas production* Well economics/viability Actual production rates Recoverable reserves Well lifecycle Flotek MICRO-emulsions flow more readily than standard MACRO- emulsion
Slide 13: Micro-emulsion (ME) Performance
Micro-emulsion (ME) Performance Independent 24-well Green River ME Gross Revenue Growth Basin, Wyoming study* In $M $60 $56 ME clearly outperformed non-ME wells $50 Effective fracture half-length $40 over 1.5 times longer $30 $26 20 year estimated gas recovery $20 33% more $8 Estimated NPV 40% more
Slide 14: Artificial Lift Segment
Artificial Lift Segment We provide pumping system components widely used in unconventional horizontal and coalbed methane wells Petrovalve optimizes rod pumping efficiency: Increase flow per stroke Producer can slow pump rate while maintaining production volume Can be placed at production zone Reven
Slide 15: Artificial Lift – Coal Bed Methane
Artificial Lift – Coal Bed Methane Gas Separator – Patented downhole technology to enhance production and improve efficiency of coal bed methane wells. Improves production by reducing solution gas lost in water recovery separator Reduces environmental impact water/gas 15
Slide 16: Strong Revenue and EBITDA Growth...
Strong Revenue and EBITDA Growth... Revenue EBITDA In $M In $M $158.0 $160 $40 $37.10 $140 $120 $30 $100.6 $100 $21.70 $80 $20 $60 $52.9 $12.00 $40 $10 $21.9 $20 $3.70 $0 $0 2004 2005 2006 2007 2004 2005 2006 2007 16
Slide 17: ...Has Led To Strong Earnings and EPS Growth
...Has Led To Strong Earnings and EPS Growth Net Income Annual EPS In $M $20 $1.00 $0.88 $16.7 $0.90 $0.80 $15 $0.70 $0.61 $11.4 $0.60 $0.47 $10 $0.50 $7.7 $0.40 $0.30 $5 $0.20 $0.15 $2.2 $0.10 $0 $0.00 2004 2005 2006 2007 2004 2005 2006 2007 17
Slide 18: EBITDA Reconciliation
EBITDA Reconciliation ($ in millions) 2004 2005 2006 2007 Net Income $2.2 $7.7 $11.4 $16.7 Interest Expense 0.7 0.8 1.0 3.5 Income Taxes 0.2 1.7 6.6 10.4 Depreciation and Amortization 0.7 1.8 2.8 6.5 EBITDA $3.7 $12.0 $21.7 $37.1 18
Slide 19: Forward Looking Statements and Non-GAAP Disclosures
Forward Looking Statements and Non-GAAP Disclosures Certain statements and information included in this presentation constitute “forward–looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on certain assumptions and analyses made
Slide 20: Contact Us
Contact Us Flotek Industries, Inc. 2930 W. Sam Houston Parkway N. Suite 300 Houston, Texas 77043 713-849-9911 www.flotekind.com Brian Shannon, Investor Relations Manager At Flotek Industries, our mission is to provide the customers we serve with the best value to enhance their performance. This will
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