Thursday, March 31, 2022

Flotek Industries (FTK)
Results slightly below expectations but story has shifted to new partnership

Flotek Industries, Inc. creates solutions to reduce the environmental impact of energy on air, water, land and people. Flotek Industries, Inc. is a technology-driven, specialty chemistry and data company that helps customers across industrial, commercial and consumer markets improve their Environmental, Social and Governance performance. Flotek’s Chemistry Technologies segment develops, manufactures, packages, distributes, delivers, and markets high-quality cleaning, disinfecting and sanitizing products for commercial, governmental and personal consumer use. Additionally, Flotek empowers the energy industry to maximize the value of their hydrocarbon streams and improve return on invested capital through its real-time data platforms and green chemistry technologies. Flotek serves downstream, midstream and upstream customers, both domestic and international. Flotek 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.

Michael Heim, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Results below expectations. Flotek reported 4Q and 2021 revenues near expectations but higher COGS and SGA costs meant EBITDA and earnings were below our forecasts. Adjusted EBITDA for the fourth quarter and year were $(5.7) million and $(25.1) million respectively versus our estimates of $(4.1) and $(18.4) million. Net income was $(16.2) million and $(30.5) million versus our $(4.4) million and $(18.6) million due mainly to a $8.1 million goodwill impairment charge.

Energy Chemistry results were good but Data Analytics took a step back.  Energy Chemistry revenues in the December quarter grew 32% quarter over quarter, well above our 15% estimate. Unfortunately, Data Analytics revenues in the most recent quarter declined 27% quarter over quarter and 53% year over year versus our estimate for flat results. We still believe the Data Analytics division is a hidden ...

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.