Flotek Provides Strong 2025 Outlook in Connection with Announcing Robust First Quarter 2025 Revenue and Profit Growth

Three Months Ended March 31,

2025

2024

% Change

Total Revenues

$                    55,362

$                    40,374

37 %

Gross Profit

$                    12,449

$                      8,821

41 %

Net Income

$                      5,380

$                      1,562

244 %

Diluted Income (Loss) Per Share

$                        0.17

$                        0.05

240 %

Adjusted EBITDA ⁽¹⁾

$                      7,780

$                      4,026

93 %

Three Months Ended March 31,

2025

2024

% Change

Chemistry Technologies:

External Revenues

$                    22,009

$                    11,685

88 %

Related Party Revenues

30,729

27,014

14 %

Total

$                    52,738

$                    38,699

36 %

Data Analytics:

Product Revenues

$                      1,662

$                          933

78 %

Service Revenues

962

742

30 %

Total

$                      2,624

$                       1,675

57 %

(1)

See the "Unaudited Reconciliation of Non-GAAP Items and Non-Cash Items Impacting Earnings" section in this release for more information about this measure, including reconciliations to the most comparable GAAP measures.

(2)

A non-GAAP financial measure. See the "Unaudited Reconciliation of Non-GAAP Items and Non-Cash Items Impacting Earnings" section in this release for more information about this measure. We are unable to reconcile this forward-looking non-GAAP financial measure to the most directly comparable GAAP financial measure without unreasonable efforts, as we are unable to predict with a reasonable degree of certainty the impact of certain items that would be expected to impact the GAAP financial measure, including, among other items, certain stock-based compensation costs and the impact of the revaluation of certain liabilities, which is based upon our future stock price. These items do not impact the non-GAAP financial measure.

FLOTEK INDUSTRIES, INC.

 UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

March 31, 2025

December 31, 2024

ASSETS

Current assets:

Cash and cash equivalents

$                          6,253

$                          4,404

Restricted cash

102

102

Accounts receivable, net of allowance for credit losses of $460 and $447 at

March 31, 2025 and December 31, 2024, respectively

19,809

17,386

Accounts receivable, related party, net of allowance for credit losses of $0 at

each of March 31, 2025 and December 31, 2024, respectively

48,246

52,370

Inventories, net

13,691

13,303

Other current assets

3,464

2,952

Current contract asset

5,782

5,939

Total current assets

97,347

96,456

Long-term contract asset

61,781

63,105

Property and equipment, net

6,426

6,178

Operating lease right-of-use assets

3,008

3,326

Deferred tax assets, net

38

51

Other long-term assets

1,637

1,680

TOTAL ASSETS

$                      170,237

$                      170,796

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable

$                        38,967

$                        38,073

Accrued liabilities

3,975

5,912

Income taxes payable

130

48

Current portion of operating lease liabilities

1,316

1,486

Asset-based loan

—

4,789

Current portion of long-term debt

15

60

Total current liabilities

44,403

50,368

Deferred revenue, long-term

14

14

Long-term operating lease liabilities

6,116

6,514

TOTAL LIABILITIES

50,533

56,896

Commitments and contingencies

Stockholders' equity:

Preferred stock, $0.0001 par value, 100,000 shares authorized; no shares

   issued and outstanding

—

—

Common stock, $0.0001 par value, 240,000,000 shares authorized;

   30,940,761 shares issued and 29,826,816 shares outstanding at March

   31, 2025; 30,938,073 shares issued and 29,826,508 shares outstanding

   at December 31, 2024

3

3

Additional paid-in capital

465,112

464,620

Accumulated other comprehensive income

206

251

Accumulated deficit

(310,928)

(316,308)

Treasury stock, at cost; 1,113,945 and 1,111,565 shares at March 31, 2025

   and December 31, 2024, respectively

(34,689)

(34,666)

Total stockholders' equity

119,704

113,900

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$                      170,237

$                      170,796

FLOTEK INDUSTRIES, INC.

Unaudited Condensed Consolidated Statements of Operations

(in thousands, except per share data)

Three Months Ended March 31,

2025

2024

Revenue:

Revenue from external customers

$                      24,423

$                      13,180

Revenue from related party

30,939

27,194

Total revenues

55,362

40,374

Cost of goods sold

42,913

31,553

Gross profit

12,449

8,821

Operating costs and expenses:

Selling, general, and administrative

6,282

6,087

Depreciation

252

220

Research and development

355

406

Gain on sale of property and equipment

(7)

—

Total operating costs and expenses

6,882

6,713

Income from operations

5,567

2,108

Other income (expense):

Interest expense

(229)

(278)

Other income (expense), net

106

(26)

Total other expense

(123)

(304)

Income before income taxes

5,444

1,804

Income tax expense

(64)

(242)

Net income

$                         5,380

$                         1,562

Income per common share:

Basic

$                           0.18

$                           0.05

Diluted

$                           0.17

$                           0.05

Weighted average common shares:

Weighted average common shares used in

   computing basic income per common share

29,683

29,431

Weighted average common shares used in

   computing diluted income per common share

31,752

30,316

FLOTEK INDUSTRIES, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

Three Months Ended March 31,

2025

2024

Cash flows from operating activities:

Net income

$                    5,380

$                    1,562

Adjustments to reconcile net income to net cash provided by operating activities:

Change in fair value of contingent consideration

(125)

(26)

Amortization of contract asset

1,482

1,267

Depreciation

252

220

Amortization of asset-based loan origination costs

71

85

Provision for credit losses, net of recoveries

66

32

Provision for excess and obsolete inventory

64

285

Gain on sale of property and equipment

(7)

—

Non-cash lease expense

318

694

Stock compensation expense

461

311

Deferred income tax expense

14

209

Changes in current assets and liabilities:

Accounts receivable

(2,489)

2,937

Accounts receivable, related party

4,124

(4,086)

Inventories

(354)

(1,318)

Other assets

(540)

856

Accounts payable

893

4,246

Accrued liabilities

(1,811)

(2,499)

Operating lease liabilities

(568)

(921)

Income taxes payable

82

33

Net cash provided by operating activities

7,313

3,887

Cash flows from investing activities:

Capital expenditures

(598)

(152)

Proceeds from sale of assets

7

—

Net cash used in investing activities

(591)

(152)

Cash flows from financing activities:

Payments on long term debt

(45)

(45)

Proceeds from asset-based loan

53,345

38,800

Payments on asset-based loan

(58,136)

(43,181)

Payments to tax authorities for shares withheld from employees

(23)

(9)

Proceeds from issuance of stock under Employee Stock Purchase Plan

31

33

Payments for finance leases

—

(9)

Net cash used in financing activities

(4,828)

(4,411)

Effect of changes in exchange rates on cash and cash equivalents

(45)

42

Net change in cash and cash equivalents and restricted cash

1,849

(634)

Cash and cash equivalents at the beginning of period

4,404

5,851

Restricted cash at the beginning of period

102

102

Cash and cash equivalents and restricted cash at beginning of period

4,506

5,953

Cash and cash equivalents at end of period

6,253

5,219

Restricted cash at the end of period

102

100

Cash and cash equivalents and restricted cash at end of period

$                    6,355

$                    5,319

FLOTEK INDUSTRIES, INC.

Unaudited Reconciliation of Non-GAAP Items and Non-Cash Items Impacting Earnings

(in thousands)

Three Months Ended March 31,

Twelve Months Ended

December 31,

2025

2024

2024

Gross profit

$                      12,449

$                         8,821

$                              39,386

Stock compensation expense

21

4

24

Severance and retirement

38

9

11

Contingent liability revaluation

(125)

(26)

71

Amortization of contract asset

1,482

1,267

5,612

Adjusted Gross profit (Non-GAAP) ⁽¹⁾

$                      13,865

$                      10,075

$                              45,104

Net income

$                         5,380

$                         1,562

$                              10,498

Interest expense

229

278

1,095

Income tax expense

64

242

649

Depreciation and amortization

252

220

891

EBITDA (Non-GAAP) ⁽¹⁾

$                         5,925

$                         2,302

$                              13,133

Stock compensation expense

461

311

1,366

Severance and retirement

44

12

39

Contingent liability revaluation

(125)

(26)

71

Gain on disposal of asset

(7)

—

(124)

Amortization of contract asset

1,482

1,267

5,612

Non-Recurring professional fees

—

160

230

Adjusted EBITDA (Non-GAAP) ⁽¹⁾

$                         7,780

$                         4,026

$                              20,327

(1)

Management believes that adjusted gross profit, EBITDA and adjusted EBITDA for the three months ended March 31, 2025 and 2024, and for the twelve months ended December 31,2024 are useful to investors to assess and understand operating performance, especially when comparing those results with previous and subsequent periods.  Management views the income and expenses noted above to be outside of the Company's normal operating results.  Management analyzes operating results without the impact of the above items as an indicator of performance, to identify underlying trends in the business and cash flow from continuing operations, and to establish financial and operational goals, excluding certain non-cash or non-recurring items.