Wednesday, May 18, 2022
Flotek Industries (FTK)
Revenues are growing but so are costs.
Flotek Industries, Inc. creates solutions to reduce the environmental impact of energy on air, water, land and people. A technology driven, specialty green chemistry and data company, Flotek 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 www.flotekind.com.
Michael Heim, CFA, Senior Research Analyst, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Revenues are rising as industry conditions improve. Flotek reported a 6% year-over-year increase in revenues in the 2022 first quarter as drilling activity accelerated in February and March reaching the highest levels since the pandemic. Results were above our expectations for revenues of $11.8 million. As a reminder, the company’s business partnership with Profrac did not begin until April 1, 2022 and did not have an effect on the quarter.
Cost are rising faster. Cost of Goods Sold rose 11% year over year. Flotek reports higher supply costs associated with freight and other factors. Management vowed to address rising costs by “adjusting prices accordingly” but also concedes that competitive pressures remain very tight. Adjusted EBITDA for the quarter was ($5.5) million versus ($6.6) million for the same period last year and ($5.7) million in the December quarter. …
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.
