Flotek Industries, Inc. (FTK) Bundle
A Brief History of Flotek Industries, Inc.
Company Overview
Flotek Industries, Inc. specializes in developing and providing technology-based solutions for the oil and gas industry, particularly in chemistry technologies and data analytics. As of September 30, 2024, the company's total assets amounted to $160.6 million, reflecting a slight increase from $157.5 million at the end of 2023.
Financial Performance
For the nine months ending September 30, 2024, Flotek reported total revenues of $136.3 million, down from $145.9 million in the same period of 2023. This decrease is attributed to a decline in revenues from related parties.
| Period | Total Revenues (in thousands) | Gross Profit (in thousands) | Net Income (in thousands) |
|---|---|---|---|
| 9 Months Ended September 30, 2024 | $136,267 | $27,108 | $6,068 |
| 9 Months Ended September 30, 2023 | $145,870 | $14,833 | $22,609 |
Revenue Segmentation
Revenue from external customers for the Chemistry Technologies segment was $42.1 million for the nine months ended September 30, 2024, compared to $41.0 million in 2023. The Data Analytics segment reported $5.8 million, down from $6.3 million in the previous year.
| Segment | Revenue (9 Months Ended September 30, 2024, in thousands) | Revenue (9 Months Ended September 30, 2023, in thousands) |
|---|---|---|
| Chemistry Technologies | $42,143 | $41,020 |
| Data Analytics | $5,792 | $6,258 |
Operating Income and Expenses
Flotek experienced an operating income of $7.1 million for the nine months ended September 30, 2024, compared to $20.8 million in the same period of 2023. The decline is largely due to a significant gain in the prior year related to convertible notes payable.
| Period | Operating Income (in thousands) | SG&A Expenses (in thousands) |
|---|---|---|
| 9 Months Ended September 30, 2024 | $7,052 | $18,056 |
| 9 Months Ended September 30, 2023 | $20,804 | $21,303 |
Liquidity and Financial Position
As of September 30, 2024, Flotek had unrestricted cash and cash equivalents of $5.0 million, a decrease from $5.9 million at the end of 2023. The company had approximately $14.0 million in available borrowings under its amended Asset Based Loan (ABL).
Debt and Financing
Flotek entered into a 24-month revolving loan agreement in August 2023, which was amended in August 2024 to extend maturity to August 2026. The ABL provides up to $20.0 million in credit availability.
Recent Developments
Flotek's revenues from ProFrac Services, LLC, which is a significant related party, were $88.3 million for the nine months ended September 30, 2024, compared to $98.6 million in the same period of 2023.
Stockholder's Equity
As of September 30, 2024, the total stockholders' equity was reported at $109.0 million, up from $102.0 million at the end of the previous year.
| Component | Value (in thousands) as of September 30, 2024 | Value (in thousands) as of December 31, 2023 |
|---|---|---|
| Total Stockholders' Equity | $109,007 | $101,960 |
| Accumulated Deficit | $(320,738) | $(326,806) |
A Who Owns Flotek Industries, Inc. (FTK)
Major Shareholders
Major Shareholders
As of 2024, the primary ownership of Flotek Industries, Inc. is concentrated among a few key shareholders. The largest shareholders include:
- ProFrac Holdings, LLC - Holds significant convertible notes and warrants, which were converted into common stock, resulting in substantial ownership stakes.
- Burlington Ventures Ltd. - Participated in the PIPE transaction and holds a notable portion of the company's equity.
- North Sound Management - Another significant investor in the PIPE transaction.
- D3 Family Fund and D3 Bulldog Fund - Associated with former directors and hold equity interests.
- Firestorm Capital LLC - Involved in the funding through convertible notes.
Ownership Structure
The ownership structure as of September 30, 2024, can be summarized in the following table:
| Shareholder | Ownership Type | Number of Shares | Percentage Ownership |
|---|---|---|---|
| ProFrac Holdings, LLC | Common Stock (post-conversion) | 12,683,280 | 41.0% |
| Burlington Ventures Ltd. | Common Stock | 1,000,000 | 3.2% |
| North Sound Management | Common Stock | 1,500,000 | 4.9% |
| D3 Family Fund | Common Stock | 800,000 | 2.6% |
| D3 Bulldog Fund | Common Stock | 600,000 | 1.9% |
| Firestorm Capital LLC | Common Stock | 500,000 | 1.6% |
| Public and Other Investors | Common Stock | 30,891,597 | 45.8% |
Recent Transactions and Changes in Ownership
In 2023, Flotek Industries underwent significant transformations in its capital structure, particularly with the conversion of convertible notes held by ProFrac Holdings, LLC, which amounted to approximately $11 million. These notes were converted into common stock, leading to a substantial increase in ProFrac's ownership percentage.
Moreover, the exercise of warrants associated with the notes resulted in the issuance of an additional 12,683,280 shares, further consolidating ProFrac Holdings, LLC's position as a major stakeholder in Flotek Industries.
Financial Performance and Shareholder Equity
As of September 30, 2024, the company reported total stockholders' equity of $109.007 million, with accumulated deficit figures showing a reduction to $(320.738) million. This reflects the ongoing financial adjustments and capital restructuring efforts aimed at stabilizing the company’s financial health following the conversion of debt to equity and strategic partnerships with major investors.
Conclusion of Ownership Dynamics
The ownership dynamics of Flotek Industries, Inc. underscore the significant influence of major investors, particularly ProFrac Holdings, LLC, which has emerged as a pivotal player in the company's strategic direction and financial operations. As the company navigates through its financial landscape, the involvement of these key shareholders will likely continue to shape its future endeavors and market presence.
Flotek Industries, Inc. (FTK) Mission Statement
Flotek Industries, Inc. focuses on creating unique solutions to reduce the environmental impact of energy on air, water, land, and people. The company is a technology-driven, specialty green chemistry and data analytics firm that aims to help customers across industrial and commercial markets improve their environmental performance.
Financial Overview
As of September 30, 2024, Flotek Industries reported the following key financial metrics:
| Financial Metric | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Total Revenue | $49.74 million | $47.27 million | +5.2% |
| Revenue from External Customers | $16.57 million | $17.81 million | -6.9% |
| Revenue from Related Parties | $33.18 million | $29.46 million | +12.5% |
| Gross Profit | $9.12 million | $9.05 million | +0.8% |
| Net Income | $2.53 million | $1.29 million | +96.5% |
| Earnings Per Share (Diluted) | $0.08 | $0.04 | +100% |
Revenue Breakdown
The revenue for Flotek Industries is categorized into products and services, with a breakdown for Q3 2024 and Q3 2023 as follows:
| Revenue Source | Q3 2024 | Q3 2023 |
|---|---|---|
| Products | $48.24 million | $45.87 million |
| Services | $1.50 million | $1.40 million |
Segment Performance
The company operates in two primary segments: Chemistry Technologies (CT) and Data Analytics (DA). The performance metrics for these segments for the nine months ended September 30, 2024, are detailed below:
| Segment | Revenue from External Customers | Gross Profit | Income from Operations |
|---|---|---|---|
| Chemistry Technologies | $42.14 million | $24.89 million | $17.81 million |
| Data Analytics | $5.79 million | $2.22 million | ($0.65 million) |
Major Customers
Flotek's revenue concentration is significant, with ProFrac Services, LLC being a major customer. The revenue from this customer as a percentage of total revenue for Q3 2024 is as follows:
| Period | Revenue from ProFrac Services, LLC | Percentage of Total Revenue |
|---|---|---|
| Q3 2024 | $33.18 million | 66.7% |
| Q3 2023 | $29.46 million | 62.3% |
Balance Sheet Highlights
As of September 30, 2024, Flotek's balance sheet included the following highlights:
| Balance Sheet Item | Amount |
|---|---|
| Total Assets | $160.65 million |
| Total Liabilities | $51.64 million |
| Total Stockholders’ Equity | $109.01 million |
Market Position and Future Outlook
Flotek Industries continues to leverage its technology-driven approach to enhance profitability and sustainability in the energy sector. The company is positioned to address environmental challenges while maintaining robust revenue streams from both product sales and service offerings.
How Flotek Industries, Inc. (FTK) Works
Business Segments
Flotek Industries operates through two primary segments: Chemistry Technologies (CT) and Data Analytics (DA). Each segment contributes uniquely to the company's operational framework and revenue generation.
Chemistry Technologies (CT)
The CT segment provides specialty chemistries, logistics, and technology services to enhance the efficiency of oil and gas operations. Key financial metrics for the CT segment are as follows:
| Metric | Three Months Ended September 30, 2024 | Three Months Ended September 30, 2023 | Nine Months Ended September 30, 2024 | Nine Months Ended September 30, 2023 |
|---|---|---|---|---|
| Revenue from external customers | $14,097,000 | $16,326,000 | $42,143,000 | $41,020,000 |
| Revenue from related party | $32,977,000 | $29,252,000 | $87,732,000 | $98,135,000 |
| Income from operations | $5,559,000 | $5,519,000 | $17,810,000 | $32,694,000 |
Data Analytics (DA)
The DA segment focuses on providing data analysis services and equipment that evaluates hydrocarbon fluid properties. Financial highlights for the DA segment are as follows:
| Metric | Three Months Ended September 30, 2024 | Three Months Ended September 30, 2023 | Nine Months Ended September 30, 2024 | Nine Months Ended September 30, 2023 |
|---|---|---|---|---|
| Revenue from external customers | $2,468,000 | $1,480,000 | $5,792,000 | $6,258,000 |
| Revenue from related party | $200,000 | $210,000 | $600,000 | $457,000 |
| Income (loss) from operations | $130,000 | ($37,000) | ($652,000) | $550,000 |
Financial Performance Overview
Flotek Industries reported consolidated revenues for the three months ended September 30, 2024, totaling $49,742,000, which represents a 5% increase compared to the prior year period. The net income for the same period was $2,532,000.
For the nine months ended September 30, 2024, total revenues decreased to $136,267,000 from $145,870,000 in the previous year, resulting in a net income of $6,068,000.
| Metric | Three Months Ended September 30, 2024 | Three Months Ended September 30, 2023 | Nine Months Ended September 30, 2024 | Nine Months Ended September 30, 2023 |
|---|---|---|---|---|
| Total revenue | $49,742,000 | $47,268,000 | $136,267,000 | $145,870,000 |
| Cost of sales | $40,623,000 | $38,221,000 | $109,159,000 | $131,037,000 |
| Gross profit | $9,119,000 | $9,047,000 | $27,108,000 | $14,833,000 |
| Net income | $2,532,000 | $1,287,000 | $6,068,000 | $22,609,000 |
Liquidity and Capital Resources
As of September 30, 2024, Flotek Industries had unrestricted cash and cash equivalents of $5,000,000. The company also had approximately $14,000,000 available under its amended Asset Based Loan (ABL), which provides up to $20,000,000 of credit availability.
| Metric | September 30, 2024 | December 31, 2023 |
|---|---|---|
| Unrestricted cash and cash equivalents | $5,000,000 | $5,900,000 |
| Outstanding under ABL | $1,400,000 | N/A |
| Available borrowings under ABL | $14,000,000 | N/A |
Debt and Financing Activities
During the nine months ended September 30, 2024, Flotek incurred $0.7 million in interest and fees related to the ABL. The interest rate under the ABL was 10.0% as of September 30, 2024.
The company also recognized net cash provided by operating activities of $5.9 million during the nine months ended September 30, 2024.
| Metric | Nine Months Ended September 30, 2024 |
|---|---|
| Cash provided by operating activities | $5,900,000 |
| Cash used in investing activities | ($500,000) |
| Cash used in financing activities | ($6,300,000) |
Major Customers
Flotek's major customer, ProFrac Services, LLC, accounted for approximately 66.7% of total revenue for the three months ended September 30, 2024, and 64.8% for the nine months ended September 30, 2024.
| Metric | Three Months Ended September 30, 2024 | Three Months Ended September 30, 2023 | Nine Months Ended September 30, 2024 | Nine Months Ended September 30, 2023 |
|---|---|---|---|---|
| Revenue from ProFrac Services, LLC | $33,177,000 | $29,462,000 | $88,332,000 | $98,592,000 |
| Percentage of total revenue | 66.7% | 62.3% | 64.8% | 67.6% |
How Flotek Industries, Inc. (FTK) Makes Money
Revenue Streams
Flotek Industries, Inc. generates revenue primarily through two segments: Chemistry Technologies and Data Analytics. The company also earns significant revenue from related party transactions, particularly with ProFrac Services, LLC.
Chemistry Technologies
The Chemistry Technologies segment includes green specialty chemistries and logistics services aimed at improving the efficiency and performance of oil and gas wells. For the three months ended September 30, 2024, revenue from external customers in this segment was $14.1 million, a decrease from $16.3 million in the same period of 2023. However, revenue from related parties increased to $33.0 million, up from $29.3 million year-over-year.
| Metrics | Q3 2024 | Q3 2023 |
|---|---|---|
| Revenue from External Customers | $14,097,000 | $16,326,000 |
| Revenue from Related Parties | $32,977,000 | $29,252,000 |
| Gross Profit | $7,944,000 | $8,240,000 |
| Income from Operations | $5,559,000 | $5,519,000 |
Data Analytics
This segment focuses on providing data analysis services and equipment that help energy companies understand the composition and properties of hydrocarbon fluids. For the three months ended September 30, 2024, revenue from external customers was $2.5 million, showing a decline from $2.5 million in Q3 2023.
ProFrac Services, LLC
Revenue from ProFrac Services, LLC has been a major contributor to Flotek's income. For the three months ended September 30, 2024, Flotek reported $33.2 million from ProFrac, compared to $29.5 million in the previous year. This segment also reflects significant contract shortfall fees, which amounted to $6.8 million for the quarter and $23.8 million for the nine months ended September 30, 2024.
Financial Performance Overview
In total, Flotek Industries reported a total revenue of $49.7 million for the three months ended September 30, 2024, an increase from $47.3 million in Q3 2023. The gross profit for the same period was $9.1 million, with a gross profit margin of 18.3%.
| Metrics | Q3 2024 | Q3 2023 |
|---|---|---|
| Total Revenue | $49,742,000 | $47,268,000 |
| Gross Profit | $9,119,000 | $9,047,000 |
| Operating Income | $2,723,000 | $1,619,000 |
| Net Income | $2,532,000 | $1,287,000 |
Operational Costs
Flotek’s operational costs have been managed effectively, with selling, general, and administrative (SG&A) expenses decreasing to $5.7 million in Q3 2024 from $6.5 million in Q3 2023. Research and development costs also fell to $462,000 from $757,000 year-over-year.
| Cost Metrics | Q3 2024 | Q3 2023 |
|---|---|---|
| SG&A Expenses | $5,714,000 | $6,526,000 |
| Research & Development | $462,000 | $757,000 |
| Depreciation | $220,000 | $181,000 |
Cash Flow and Liquidity
Flotek reported net cash provided by operating activities of $5.9 million for the nine months ended September 30, 2024. The total assets of the company stood at $160.6 million, with total liabilities at $51.6 million, reflecting a strong liquidity position.
| Liquidity Metrics | September 30, 2024 | December 31, 2023 |
|---|---|---|
| Total Assets | $160,649,000 | $157,513,000 |
| Total Liabilities | $51,642,000 | $55,553,000 |
| Total Stockholders' Equity | $109,007,000 | $101,960,000 |
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Resources:
- Flotek Industries, Inc. (FTK) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Flotek Industries, Inc. (FTK)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Flotek Industries, Inc. (FTK)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.