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Flotek Industries Inc.

Mon, 12 Jan 2009|

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Which -- in fact -- -- technology driven growth company. And clearly are are accompanied grown dramatically to. -- -- from the top story it basically about seven years ago. We're born ever profits in record problems. We're -- what. While one. Fears -- the stock market and real enter -- there. Where there. Wrote company -- we've had opportunity to roar company. And what nominal all feel and it's our ripper who's bigger. And we've made a decision which started -- -- -- -- very or. These companies have segments -- Americans it was driven by technologies. Me everything we offer is a lot -- more and work. We didn't have that there ought to advance we -- -- through development in our research. Because we have three chip research groups in our organization. We've got area mechanical -- would go electorally. And we got a chemical. Yeah. We have got what -- -- which are all what are called Omar and and we -- Very. And they. It. Which one. Do you work very well. We developed -- -- all which it. -- -- -- -- -- -- -- Only reason we found -- In -- -- yes. Now it's now looking at and opportunities are working and -- And some of the oil -- in the movie. We regard -- are we that we provide to Iran or. We're in the old brought home but the thing that makes our problem. Somewhat distinguish. -- -- This is work out there. For me it's -- -- -- -- But anyway with regard to our official if we have the wrought well. But what makes our -- -- product better and unique -- -- we have a patent involving system. Which allows us to operate there -- -- either -- emperor or -- proposition. No one else can do that so we're pleased about that. In addition to that we are in the election in the electrical or -- -- news electric submersible pump. But in the and they coal bed methane. We have developed and patented a device that fiscal gas separated which in fact just does that separates the gas from the water. And -- result we've seen a significant increase in the production. Our growth strategy -- -- diversified revenue base. We have made acquisitions that have been. -- -- that are added to our news and -- and -- our ability to grow. From attractive acquisitions although our organic growth. Has been about 60% and the balance of it has been the acquisition. -- Folders here. And national market. Because frankly -- North American market is. An area where we have great growth opportunity but we have the cash flow to move our pump action. And here. It's. This is well. And accuracy that at this point if you look at the -- segment breakdown. And that breakdown in old -- threw away. Shows it how are chemical business continued role model. Continues our. And or -- one of the fastest growing areas we have so we anticipate. And. This was the third quarter. 2008. -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- And and we look it up. If you. -- -- -- -- We can. -- -- -- switches day friction reducer. And generation. You. Lose -- Mark one in our. Throat aviation. Jobs. Witches and receive it is. Quite frankly it's via -- We've been at when we first aren't we had. A lot of inventory shipped -- are now. We've now real story Victoria. Corporation law equipment. Program and we that we. Buy them back to interpret and wear line that. About twenty million dollars. Here. And lose continues in money next year old and not -- -- -- -- -- -- -- -- These groups -- very position there to be able to compete. We're also the US. We've had. Success field testing we're tweaking it -- -- -- better use success -- -- so -- This user group -- people in the offshore. In the direction it's necessary not and physician. Partners. Pictures in the way are historical margins gross margins and growth and -- or work -- -- use our mark in Mercury and for more like oh wait. Again. -- it. 42 point. We. We -- -- greater it was. One we basically. If we honor actor -- wireless service. While drug and there's. It's an acquisition made. -- -- -- -- That's -- late Wednesday we're very. Voters are. Dramatically year Tuesday. So basically to. Our. Taxes. So. Our problems. They are urged our our cars and marketers -- -- and -- If you are. He's -- -- Jews and operated well. And the -- thank you or your issue and we. Bottom lot better Altria which partnered well thank one of our products that are. Competition. Until we -- something better it and we've now designer that to the product into a secondary product. But the product that we've built. It's far superior and result. Surprisingly and pleasing. We're building them as fast as we can because we don't have any of them. We call it felt we call that approach -- appropriate. And replace the old original mechanical. -- -- which is still use. But we've virtually removed it from some of the areas where the pro shop and the appropriate work. It's a franchise technology we're very pleased about that. It has outstanding -- profit margins outstanding it was origins and that Jews of these public information -- you could buy. -- Chemical group. We expect that we're working in a huge market. So we don't see any. Reduction in our ability to grow now we all are out here looking at the market for -- it 42009. And quite frankly. We're planning our budget for three or 400 rig count draw I don't know what that's gonna happen and -- Because I'll be frankly I'm quite confused because I talked to some of our customers and they tell us they're gonna increase their -- We've had some say no we're not increase it so -- -- level we've had others say oh my goodness we're gonna quick. We're not gonna drill so if I'm not quite sure where we're going all our case it through October now November we've seen little or no reduction in early -- -- that way. To a New -- do that but at this point we're budgeting to be sure that. We are ready to handle our performance -- -- recount it might fall down. The stop and think about it we were doing very well when the rig count sixteen -- So we'll go down 2000 I mean for 2000 down sixteen under we've been there before so we know how to operate. As other energy companies -- operate that level. But more importantly. Our international business is beginning ramp up -- We've built the money we spent we built the infrastructure we spent the money this year. As a result we're now beginning to see some of the fruit being collected for. So we think our international business is going to mitigate some of the downturn if it affects us in this. In this North American market. We're not real sure about that we're gearing up and as I said based on what we're seeing out there and -- right now we haven't seen that much of the decline. We are extremely pleased about our chemically just -- 75%. Of everything we -- we develop and pat either that or -- it. As a result we've got a significant processing capability. Even in this market we were able to recently raise prices and -- -- up. The prices were accepted the reason -- accepted -- our product is an outstanding product when you use it in the business. -- whales. We have now and you will be able to pick it up on our -- on our web site. We now have. It's it shows. In your review. We are able to increase reserve. Collection -- -- money on the hiker or -- pulled from a reserve bought 33. We're doing that each area in North America real. That kind of economics who -- about -- -- the -- And our chemical group or out. Selling that pushing that. Sharing that data which was done about third forty -- Colorado School of Mines group. Was not -- company. So it's an arm's length third party deal but the bottom line is. This product has been an outstanding product and now that we're adding the friction -- we feel very strong about -- simple that is. But -- proprietary patent pending and patents we have patents now on our proprietary product we also have. Number -- nations which are working. We are -- -- amount of money. In research. We have a state of the art tremendous organization. Up in the would lose. We're delighted to have people. Come out and visit and see it and I think you'll be impressed. With the caliber of people that we have out there as well as the state of the art facility with the equipment. We do not just develop products without collaborating with -- -- We're in Constant Contact with our customers. And bottom line. -- -- -- Working on something that we believe that they need that we talked to and they agree that they -- are working on something they tell us they need it we're not aware so. We're not out there just of -- we're out there for development product. And with regard to the -- six ministers small part of our business but it's a very critical part in south it was down in the Gulf of Mexico we have. A significant operation in -- and it was down. That allows us to handle products brand products under confidentiality agreement and move them down to -- -- on offshore. So it's quite -- -- facility or. This is the revenue growth that we've had. In the chemicals and frankly it continues to move along and were real. Excited about the future server -- -- alleges that. This is what I was talking about the patented mark promotion chemistry it's -- -- chemical is Mike -- is by it's biodegradable. Which obviously -- us a little bit of -- camp and the economics as I mentioned earlier and those studies are available or you look at there have been SB papers written on it. There will be additional SB papers coming out short. It increases the actual production rates when it with the most. Outstanding information we've been able to develop is increase -- recoverable reserves. This particular study was -- Green River study we're doing several of them this is the first one. This is what we're talking about. If you look at bullet point reporting your estimated -- recovered 33% more than wells it did not use that when they -- well. Now that resonates with a CFO and and -- -- -- -- Because he's got that -- balance sheet and that helps its collapse. So we are extremely. Extremely excited about that. Aspect of our chemical bad news and what it would do to add -- -- to our coach. We actually went in on a platform and and or C. Shut in wells. And by treating -- well with our product. We were able to recover -- -- percent. Our production. Now that study is being made there will be -- out there will be. As soon as we can get the operated together with our people there'll be an SB paper -- don't. Developed an author for that and that was -- North -- situation so we're now in many instances approved. Because we are biodegradable and that puts us in the -- which we see as an increasing activity -- or not. This is what I was mentioning to -- earlier it's a very simple thing. What it it's simple. Only in its design and its patented design of about that goes and wrought on everybody makes -- -- on the rock of been made the same way for 75 years. Anybody can build Rockwell with the difference is the -- lenient. And the balloting in every -- with the exception of our. Is a ball in -- -- to estimate the ball and see it bounce around it chatters ships it is set well. Are now -- guided patented about its seats perfectly for others or follow what -- -- And as results is receiving more and more and more chips. In addition to that where you have a national -- that causes. A locking gas flocking back him -- We have now developed a modification of that -- so they don't every stroke we break that back. And we have over 5000 of those 1001 particular field where they were being shut down almost every other day because about because of -- -- The gas separate this is a very interest -- product that while it's a pretty complex there's it's very simple to explain. It's nothing more then that same procedure of the same thing that occurs in abolish campaign. When you have a liquid it's under pressure. And that liquid contains. Apple's -- and and you opened the car that -- What that -- and it -- immediately increases lost. And one happens. You reduced. And when you released acts and that's. There's there's got separated. It's that's numbers this explanation. Of this piece of patented equipment and it's becoming extremely strongly. -- particular chemical bit -- -- oh this one uses artificial lift business is growing extremely rapidly. And we expect that to be the fastest growing segment and Tacoma significant interpreter there -- bottom line profit so here. This is the. Growth of our company and -- -- our growth through 07. If you saw in the following own at the and third quarter. Because up to 54 million. And -- revenue was up -- 166. -- with another quarter ago. So you can just do little addition currencies that company is moving all very very nicely this year as well. We've had strong earnings net income. We are very excited about final as a nation of away. Where only about a month and a half away from that. Being done but this is the growth we've had. And frankly. We're working very hard to see this this is the -- -- -- -- reconciliation. And the one thing that I would like to mention and my chief financial officer and discussions with an interview -- a break out. We we are extremely well finance. We have two pieces of our financing. One of them is a very but mind. Convertible -- it doesn't -- -- through 2000 Tony. As actual maintenance -- -- this goes with -- reports an -- so check it 5% of our -- extremely and that it's almost like. Borrowed capital or rented capital or rented equity if you will. So we're very. It's comfortable with liquidity I'm extremely comfortable with our ability to -- our cost next year's -- -- -- -- And to. Be able to do the capital expenditure that we would do next year fair taxes and move forward so. Flex our our liquidity. Based on what we're doing at our office and our company is not a question for us I think it is. Question it mister Damon who -- -- CFO has done remarkable. Explain. Well there's the black -- I have to and oral presentations so thank you very much for your time and if -- you wish you upwards. Understand there's -- there's. You all so. Thank.

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