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[STK] NYSE:FTK
[IN] OIL UTI CHM
[SU] ERP CCA TNM
TO BUSINESS, AND ENERGY EDITORS:
Flotek Industries Announces Acquisition of Intellectual Property for
use of Complex nano-FluidT Chemistry in Drilling Fluids Systems;
Agreement with Tony Rea as Drilling Fluids Consultant; Select,
Preliminary First Quarter Financial Results and First Quarter Earnings
Reporting Schedule
HOUSTON, April 7, 2014 /PRNewswire/ -- Flotek Industries, Inc.
("Flotek" or the "Company") (NYSE: FTK) today announced it has entered
into an Agreement to acquire certain intellectual property that will
expand Flotek's use of its patented Complex nano-FluidT technology
into drilling fluids systems, providing a superior solution for a
myriad of challenges, especially those presented by unconventional
drilling programs.
The intellectual property - including certain patents and trade
secrets - is being acquired from Anthony Rea, via ARC Fluid
Technologies, LLC. The technology relates to the use of certain Flotek
Complex nano-FluidT chemistries in drilling fluid systems to provide
superior performance in certain conventional and unconventional
drilling applications.
"Flotek and Tony Rea have been working together for nearly a decade
exploring applications of our nanofluid chemistry into drilling fluid
systems," said John Chisholm, Chairman, President and Chief Executive
Officer of Flotek. "This agreement is a natural extension of that
relationship and one that we believe will have a marked impact on
broadening the application of our Complex nano-FluidT chemistries
across a well's life cycle."
In addition, Flotek and Rea have agreed to a two-year consulting
agreement whereby Rea will devote significant time and effort to
assisting Flotek to reach key players in the drilling fluids market as
well as exploration and production companies that will benefit from
the use of Flotek's Complex nano-FluidT technologies in the drilling
process.
"Tony's work, in collaboration with Flotek's scientific team, has
proven - in both the lab and the field - the efficacy of Complex
nano-FluidT chemistries in drilling fluid systems, especially in
certain unconventional drilling programs," added Chisholm. "We look
forward, with Tony's assistance, to quickly growing awareness of the
benefits of our chemistries in drilling fluids systems - from better
performance to a cleaner environmental footprint - and creating a new
market to expand the use of Complex nano-FluidT technologies in both
domestic and international markets."
Preliminary First Quarter Results Ahead of the Company's presentation
at the Independent Petroleum Association of America New York Oil and
Gas Investment Symposium this morning, Flotek provides the following
select, preliminary financial results from the three-months ended
March 31, 2014.
Flotek believes revenue should exceed $102 million, an increase of
over 31% from the same period in 2013. As previously noted, holidays
and severe winter weather had an impact on the first weeks of 2014.
However, despite the weakness in the first-half of January, revenue
growth accelerated consistently in the quarter, a trend - with the
exception of the impact of the annual winter break-up in Canada - the
Company expects should continue in the second quarter.
Moreover, the Company expects overall gross margins should exceed 42%
for the first quarter, compared to 41.7% in the first quarter of 2013
and 39.5% in the fourth quarter of 2013.
"While early January felt the impact of the holiday hangover and
weather-related issues, business accelerated consistently in February
and March and we finished the quarter with significant momentum," said
Chisholm. "And, while revenue growth in certain segments was muted,
energy chemistry growth was strong and key segment margins improved
nicely."
Energy Chemical Technologies revenue in the first quarter of 2014 are
expected to be approximately 40% above year-ago levels and nearly 10%
greater than segment revenues in the fourth quarter of 2013. In
addition, Energy Chemistry Technologies gross margins are expected to
remain at or above fourth quarter's robust levels.
"Flotek continues to make meaningful strides in the sale of its core
Complex nano-FluidsT technologies which should be seen in our first
quarter energy chemistry results," added Chisholm. "While our margins
will fluctuate based on product mix from quarter-to-quarter, the
overall positive trend should continue into the coming months."
Drilling Technologies segment revenue in the first quarter is expected
to be down modestly when compared to both the year-ago quarter as well
as the fourth quarter of 2013. The decline in revenue is primarily the
result of a decline in Teledrift rentals in the Mid Continent and
Southern regions due to seasonal weather patterns and transient
employment and logistics issues. Both regions regained momentum in the
later part of the quarter and are continuing to re-accelerate. In
addition, while our StemulatorT agitation tool experienced a
slower-than-expected start in January, rentals ended the quarter
strong, with March providing the strongest monthly rental revenue to
date, a trend Flotek expects to continue in the second quarter.
The Company expects Drilling Technologies segment gross margins to
increase by over 500 basis points when compared to fourth-quarter
levels.
Flotek expects Artificial Lift Technologies segment revenues to be
approximately $2.3 million as the Company begins to reposition this
business under the leadership of David McMahon. Gross margins should
be between 25-30%. Consumer and Industrial Chemistry Technologies
("CICT") revenue is expected to exceed $13 million. In addition,
Flotek expects CICT segment gross margins to exceed 31% for the
quarter.
"While we are pleased with our first look at first quarter results, we
are more excited about the opportunities ahead in the second quarter
and the balance of the year," added Chisholm. "We continue to find
ways to create efficiencies in our organization that should yield
solid bottom-line results in the quarter. In addition, our
acquisitions of Florida Chemical and EOGA, as well as our pending
acquisition of Site Lark and this morning's announced strategic
alliance with Tony Rea and ARC, not only are opportunistic uses of
capital but also provide significant strategic advantages as we
continue to build a premier oilfield technology concern with a focus
on creating value for our shareholders."
First Quarter Earnings Reporting Schedule Flotekwill host a conference
call on Tuesday, April 29, 2014 at 7:30 a.m. Central Daylight Time to
discuss its financial and operating results for the three-months ended
March 31, 2014. Flotek intends to provide dial-in information through
a press release on April 28, 2014.
Flotek plans to file its 10-Q after the market close on Monday, April
28, 2014. In addition, the Company will provide additional details
regarding operating results in a press release after the market close
on April 28, 2014.
About Flotek Industries, Inc. Flotek is a global developer and
distributor of a portfolio of innovative oilfield technologies,
including specialty chemicals and down-hole drilling and production
equipment. It serves major and independent companies in the domestic
and international oilfield service industry. Flotek Industries, Inc.
is a publicly traded company headquartered in Houston, Texas, and its
common shares are traded on the New York Stock Exchange under the
ticker symbol "FTK."
For additional information, please visit Flotek's web site at
www.flotekind.com.
Forward-Looking Statements: Certain statements set forth in this Press
Release 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 condition, results of operations and prospects.
Words such as expects, anticipates, intends, plans, believes, seeks,
estimates and similar expressions or variations of such words are
intended to identify forward-looking statements, but are not the
exclusive means of identifying forward-looking statements in this
Press Release.
Although forward-looking statements in this Press Release reflect the
good faith judgment of management, such statements can only be based
on facts and factors currently known to management. Consequently,
forward-looking statements are inherently subject to risks and
uncertainties, and actual results and outcomes may differ materially
from the results and outcomes discussed in the forward-looking
statements. Factors that could cause or contribute to such differences
in results and outcomes include, but are not limited to, demand for
oil and natural gas drilling services in the areas and markets in
which the Company operates, competition, obsolescence of products and
services, the Company's ability to obtain financing to support its
operations, environmental and other casualty risks, and the impact of
government regulation. Further information about the risks and
uncertainties that may impact the Company are set forth in the
Company's most recent filings on Form 10-K (including without
limitation in the "Risk Factors" Section), and in the Company's other
SEC filings and publicly available documents. Readers are urged not to
place undue reliance on these forward-looking statements, which speak
only as of the date of this Press Release. The Company undertakes no
obligation to revise or update any forward-looking statements in order
to reflect any event or circumstance that may arise after the date of
this Press Release.
SOURCE Flotek Industries, Inc.
-0- 04/07/2014
/CONTACT: Investor Relations, +1-713-726-5376, IR@flotekind.com
/Web Site: http://www.flotekind.com
(NYSE:FTK) /
CO: Flotek Industries, Inc.; ARC Fluid Technologies, LLC
ST: Texas
IN: OIL UTI CHM
SU: ERP CCA TNM
PRN
-- DA99350 --
0000 04/07/2014 10:55:00 EDT http://www.prnewswire.com
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