Flotek Industries (FTK) Q4 2008 earnings summary

Executive summary

• Record 2008 revenue reached $226 million, but the global downturn and weakening energy sector drove results below revised guidance.

• Teledrift expanded drilling technology and international reach; its 2008 sales and profit exceeded expectations.

Financial highlights

• Revenue was a record $226 million in 2008, up from $158.0 million in 2007.

• Net loss was $31.9 million, or $1.69 per diluted share, versus 2007 net income of $16.7 million, or $0.88 per diluted share.

• Results included a $67.7 million non-cash goodwill and intangible asset impairment charge in Q4 2008.

Outlook and guidance

• Results fell short of revised 2008 guidance amid continued deterioration in the global economy and energy-service markets.

• Plans included improving liquidity, scaling operations to market conditions, renegotiating bank facilities, reducing capex and overhead, and consolidating underused facilities.

• 2009 plans included curtailing chemical R&D activities not expected to deliver near-term revenue, with the ability to resume as conditions improve.