Flotek Industries (FTK) Q4 2004 earnings summary

Executive summary

• FY2004 described as the strongest year to date, with higher profitability in all segments and record EPS of $0.32; diluted EPS was $0.31.

• Improved operating performance strengthened cash flow and the balance sheet; debt was reduced by $1.25 million during 2004.

Financial highlights

• Chemical & Logistics revenue rose 50.9% YoY; gross margin increased 80.7% to 41.5%.

• Biodegradable specialty-chemical sales more than tripled, from $1.1 million in 2003 to $4.0 million in 2004.

• MTI revenue reached $1.9 million vs. $1.7 million in 2003; fully burdened operating income increased 1,200%.

Outlook and guidance

• 2005 growth expected from production-tool market penetration in Russia and the Middle East, plus renewed Venezuelan customer activity.

• Petrovalve expected continued growth in 2005; Turbeco anticipated additional growth from California and Rocky Mountain coverage and planned to target Mexico.

• Strategy centers on organic growth through product development and geographic expansion, with selective strategic vertical acquisitions.