8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): March 20, 2009

Flotek Industries, Inc.

(Exact name of registrant as specified in its charter)

Delaware	001-13270	90-0023731
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)
2930 W. Sam Houston Pkwy N., Suite 300 Houston, Texas		77043
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (713) 849-9911

Not applicable

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 7.01 Regulation FD Disclosure.

On March 20, 2009, Flotek Industries, Inc. (the “Company”) issued a press release announcing that Jesse E. Neyman, Senior Vice President and Chief Financial Officer of the Company, and Steven A. Reeves, Executive Vice President and Chief Operating Officer of the Company, will participate in the 37th Annual Howard Weil Energy Conference being held in New Orleans, Louisiana, on March 24 and March 25, 2009.

A copy of the press release announcing the Company’s participation in the 37th Annual Howard Weil Energy Conference is being furnished herewith as Exhibit 99.1. The Company’s slide presentation to be used at the 37th Annual Howard Weil Energy Conference is available on the Company’s website at www.flotekind.com. A copy of the slide presentation is being furnished herewith as Exhibit 99.2.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit Number	Description
99.1	Press Release, dated as of March 20, 2009
99.2	Flotek Slide Presentation

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	FLOTEK INDUSTRIES, INC.
Date: March 23, 2009	By:	/s/ Jesse E. Neyman
		Jesse E. Neyman Chief Financial Officer

EXHIBIT INDEX

Exhibit Number	Description
99.1	Press Release, dated as of March 20, 2009
99.2	Flotek Slide Presentation

EX-99.1

Exhibit 99.1

Press Release	CONTACT:	Brian Shannon
March 20, 2009		713.849.9911
		bshannon@flotekind.com

Flotek Industries to Participate in the Howard Weil Energy Conference

HOUSTON, March 20, 2009—Flotek Industries, Inc. (NYSE: FTK), a technology driven growth company serving the oil, gas, and mining industries, announced today that it will be participating in the 37^th Annual Howard Weil Energy Conference in New Orleans.

Chief Operating Officer Steve Reeves and Chief Financial Officer Jesse “Jempy” Neyman will be speaking to investors on Tuesday, March 24 and Wednesday, March 25, 2009. For your convenience, a copy of the materials will be available at www.flotekind.com on the Investor Relations page.

About Flotek Industries, Inc.

Flotek is a global developer and distributor of innovative specialty chemicals and downhole drilling and production equipment. Flotek manages automated bulk material handling, loading and blending facilities. It serves major and independent companies in the domestic and international oilfield service industry. Flotek Industries, Inc. 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.

EX-99.2

www.flotekind.com

Flotek

Industries, Inc.

A Technology-Driven

Growth Company

Steve Reeves, EVP & COO

Jempy

Neyman, Sr. VP & CFO

37

th

Annual Howard Weil Energy Conference

March 22-26, 2009

Exhibit 99.2

2

Forward Looking Statements and

Non-GAAP Disclosures

Certain

statements

and

information

included

in

this

presentation

constitute

“forward–looking statements”

within the meaning of the Private Securities Litigation Reform Act of 1995.  These statements are based

on certain assumptions and analyses made by the Company’s management in light of its experience and

its perception of historical trends, current conditions, expected future developments and other factors it

believes are appropriate under the circumstances. These statements involve known and unknown risks

and uncertainties, some of which are outlined in the Company’s 10-K, which may cause the actual

performance

of

Flotek

to

be

materially

different

from

any

future

results

expressed

or

implied

in

this

presentation

and

the

forward-looking

statements.

Flotek

undertakes

no

obligation

to

update

any

of

its

forward-looking statements for any reason.

Flotek

has used the non-GAAP financial measure of earnings before interest, taxes, depreciation and

amortization (EBITDA) in this presentation.  We have used this because we believe that EBITDA

provides useful information to investors as it represents the measure of pre-tax cash flow of Flotek, prior

to any debt service requirements. A non-GAAP financial measure is a numerical measure of financial

performance, financial position, or cash flows that either 1) excludes amounts, or is subject to

adjustments that have the effect of excluding amounts, that are included in the most directly comparable

measure calculated and presented in accordance with GAAP in the statement of income, balance sheet

or statement of cash flows, or 2) includes amounts, or is subject to adjustments that have the effect of

including amounts, that are excluded from the most directly comparable measure so calculated and

presented. 

Introduction

Business Segments

–

Product overview

–

Application overview

–

Technology overview

Financial Overview

–

Segment performance

–

FLOTEK performance

–

Capital structure

3

Drilling Products Segment

CAVO mud motor line

Open-bearing and sealed-

bearing options

Directional drilling and

workovers

Compliments Teledrift

MWD technology 

4

4

Drilling Products Segment

Teledrift MWD products

Real-time depth, azimuth,

gamma and tool-facing

measurement

Proprietary, technology-

oriented downhole rental

tools

2009 release of TelePulse

MWD system

5

5

Drilling Products Segment

Full suite of oilfield drilling and mining tools

Leading provider of

downhole rental tools

Complete bottom hole

assembly

Centralizer and drill bits

sales

Margin protection by

bundling with technology

products

6

Drilling Products Segment

Complementary

technologies

–

motors,

telemetry

and

drill string tools

7

21.9

36.8

56.8

98.3

$0

$20

$40

$60

$80

$100

$120

2005

2006

2007

2008

In $M

Revenue

Chemicals & Logistics Segment

Proprietary specialty

chemicals

–

For drilling, cementing,

stimulation, acidizing and

production

–

Customers include major

service companies,

independents and drilling

contractors

Logistics

–

Design, project manage and

operate automated bulk

handling/loading facilities

8

8

Proprietary /

Patented

75%

Other

Products

12.5%

Licensed 

Products

12.5%

Micro-emulsion (ME) Frac Additive

Patented technology

“Green”

chemicals

enhance unconventional

gas production*

–

Well economics/viability

–

Actual production rates

–

Recoverable reserves

–

Well lifecycle

Independent studies prove

performance

9

9

* The

Oil

&

Gas

Journal,

“Trends

in

Unconventional

Gas”

Dec

17,

2007

Green River Basin

Independent 24-well study*

+ 33% estimated 20-year gas

recovery

+ 40% estimated NPV

Shut-ins recovered 100% of

prior prod. vs. losses up to 50%

without ME

Increased production and

enhanced recovery

Effective fracture half-length

over 1.5 times longer

10

Avg EGR = 9.8 BCF

Avg EGR = 7.3 BCF

0%

100%

Cumulative Frequency (% less than)

MMCF

*2008 Performance Sciences, Inc., Dr. Jim Crafton PhD

Study available at www.flotekind.com, Investor Relations page under Studies/White papers

Barnett Shale Production Enhancement

250-well study* (SPE 100434, 2006)

41% increase in

flowback

47% increase in gas

production

Less formation damage

11

Production Enhancement**

6,430

129,873

190,802

9,090

0

50,000

100,000

150,000

200,000

250,000

Conv. surfactant

Micro-emulsion

*Study available at www.flotekind.com, Investor Relations page under Studies/White papers

** Six

month

average

cumulative

water

and

gas

production

in

Barnett

Shale

fracs

in

12

wells

with conventional surfactant (CS) and in 12 wells with ME.

180 day avg. bbl

water returned

180 day avg.

MCF gas

Micro-emulsion (ME) Sales

12

12

$4.2

$8.2

$26.0

$56.4

$77.4

$0

$10

$20

$30

$40

$50

$60

$70

$80

2004

2005

2006

2007

2008

ME Gross Revenue Growth

In $M

13

Chemicals & Logistics Segment

Patented proprietary specialty chemicals

Revenue

In $M

$29.6

$50.5

$86.3

$109.4

$0

$20

$40

$60

$80

$100

$120

2005

2006

2007

2008

Artificial Lift Segment

Petrovalve rod pump system

Unique horizontal

installation

Optimizes rod pump

efficiency

Increases flow per stroke

Improves economics and

extends well life

Eliminates gas locking

14

Artificial Lift

Petrovalve vs. traditional ball and seat valve

15

15

Petrovalve seats perfectly,

unlike ball and seat valve

Ball valve deteriorates, increasing

maintenance, reducing production

Artificial Lift Segment

Gas Separator

Patented downhole

technology enhances

production and improves

efficiency of coal bed

methane wells

Enhances production by

reducing solution gas lost

in water recovery

Reduces environmental

impact

16

Artificial Lift Segment

Patented pumping system components widely used in

unconventional

horizontal

and

coalbed

methane

wells

17

$1.4

$13.3

$14.9

$18.4

$0

$5

$10

$15

$20

2005

2006

2007

2008

Revenue

In $M

Flotek

Revenue by Business Segment

Steady growth over time

18

Quarterly Revenue by Segment

$0

$10

$20

$30

$40

$50

$60

$70

Dec-05

Mar-06

Jun-06

Sep-06

Dec-06

Mar-07

Jun-07

Sep-07

Dec-07

Mar-08

Jun-08

Sep-08

Dec-08

Chemicals & Logistics

Drilling Products

Artificial Lift

In $M

$60.0M

$37.8M

$16.0M

2008 Financial Highlights

2008 vs. 2007

–

Includes Impairment

charge of $67.7 million

related to goodwill and

other intangible assets

–

43% revenue growth to

$226 million

–

Gross profit margin

remained constant at 40%

–

Loss from Operations of

$30.8 million

–

Net loss of $31.9 million

19

2008 vs. 2007

Adjusted Excluding the Effect of Impairment of

Goodwill and Other Intangible Assets

In $M

158.0

37.1

29.7

49.7

37.1

16.7

16.4

226.1

34%

-1.7%

24%

43%

-50

0

50

100

150

200

250

Total Revenue

EBITDA

Income from

Operations

Net Income

-10%

0%

10%

20%

30%

40%

50%

2007

2008

Difference

20

$12.0

$21.7

$37.1

$49.7

$0

$10

$20

$30

$40

$50

$60

2005

2006

2007

2008*

Strong Revenue and EBITDA Growth...

Revenue

EBITDA

$226.1

$158.0

$100.6

$52.9

$0

$50

$100

$150

$200

$250

2005

2006

2007

2008

In $M

In $M

*adjusted excluding the effect of impairment of

goodwill and other intangible assets

21

...Has Sustained Earnings and EPS

$0.85

$0.88

$0.61

$0.47

$0.00

$0.10

$0.20

$0.30

$0.40

$0.50

$0.60

$0.70

$0.80

$0.90

$1.00

2005

2006

2007

2008*

$7.7

$11.4

$16.7

$16.4

$0

$5

$10

$15

$20

2005

2006

2007

2008*

In $M

Diluted EPS

Net Income

*adjusted excluding the effect of impairment of

goodwill and other intangible assets

Capital Structure

$115M Convertible Bonds Maturing in 2028

–

5.25% interest

–

No maintenance covenants

–

Cannot be put until 2013

–

Strike price of $22.75

$40M Term Loan

–

Paid down $2M a quarter

–

Balance as of 12/31/08 is $34M

$15M Revolver

–

Used for cash management

–

Balance is usually between $0-$5M

22

Why Invest with Flotek?

Sound Fundamentals

–

Strong cash flow

–

Manageable debt service, working capital and capital expenditures

Proven growth

–

Strong organic growth and acquisition record

–

Expansion internationally and select domestic basins

Technology driven

–

Patented products applicable to unconventional plays

–

Electromechanical and Chemical R&D programs

Proven management

–

CEO, COO and CFO all have 30+ yrs. experience

–

Understanding of industry cycles

23

EBITDA Reconciliation

This presentation contains references to EBITDA and Adjusted EBITDA. 

EBITDA is a non-GAAP financial measure that we define as net income (the

most directly comparable GAAP financial measure) before interest, taxes,

depreciation and amortization. Adjusted EBITDA is EBITDA adjusted for certain

non-cash activities. EBITDA and Adjusted EBITDA, as used and defined

in this

presentation,

may

not

be

comparable

to

similarly

titled

measures

employed

by

other companies and is not a measure of performance calculated in accordance

with GAAP. EBITDA or Adjusted EBITDA should not be considered in

isolation or

as a substitute for operating income, net income or loss, cash flows provided by

operating, investing and financing activities, or other income or cash flow

statement data prepared in accordance with GAAP.

Reconciliations of this financial measure to net income, the most directly

comparable GAAP financial measure for the years ended December 31, 2008,

2007, 2006 and 2005 are provided in the table below.

24

25

EBITDA Reconciliation

($ in millions)

2005

2006

2007

2008

Net Income

$7.7

$11.4

$16.7

($31.9)

Interest Expense

0.8

1.0

3.5

10.2

Income Taxes

1.7

6.6

10.4

(9.1)

Depreciation and Amortization

1.8

2.8

6.5

12.8

EBITDA

12.0

21.7

37.1

(18.0)

Impairment of Goodwill  Intangibles

_

_

_

67.7

Adjusted EBITDA

$12.0

$21.7

$37.1

$49.7

Reconciliation of non-GAAP Measures to

GAAP Measures

We evaluate our results of operations before certain impairment items, and also view our results as

adjusted for certain non-cash activities, as it is not indicative of our core operating activities.  We believe

our presentation of financial measures before, or excluding, this item, which is a non-GAAP measure,

enhances

our

investor’s

overall

understanding

of

our

recurring

operational

performance

and

provides

useful information to both investors and management to evaluate the ongoing operations and prospects

of Flotek

Industries.  Whenever we use non-GAAP financial measures, we designate these measures,

which

exclude

the

effect

of

certain

impairment

items

and

other

charges

as

“adjusted”

and

provide

a

reconciliation of non-GAAP financial measures to the most closely applicable GAAP financial measure. 

Investors are encouraged to review the related GAAP financial measures and the reconciliation of these

non-GAAP financial measures to their most directly comparable GAAP financial measure.  In the tables

below, we reconcile our financial measures before certain impairment items and other charges to our

reported GAAP financial results for the fourth quarter and full year of both 2008 and 2007.

Although we believe the non-GAAP financial measures enhance an investor’s understanding of our

performance,

our

management

does

not

itself,

nor

does

it

suggest

that

investors

should,

consider

such

non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in

accordance with GAAP.  The non-GAAP financial measures we use may not be consistent with the

presentation of similar companies in our industry.  However, we present such non-GAAP financial

measures

in

reporting

our

financial

results

to

provide

investors

with

an

additional

tool

to

evaluate

our

operating

results

in

a

manner

that

focuses

on

what

we

believe

to

be

our

ongoing

business

operations.

26

27

GAAP to non-GAAP Reconciliation

2008

(in thousands, except per share amounts)

Income From Operations

$    (30,751)

Impairment of Goodwill & Intangible Assets

67,695

Adjusted Income from Operations

36,944

Total other income (expense) 

$    (10,329)

Income tax provision (effect of $19.3 million tax benefit)

(10,177) 

Adjusted Net Income 

$

16,438

Diluted loss per common share

$        (1.69)

Effect of Impairment

3.58

Effect of Tax Benefit from Impairment

(1.02)

Basic earnings per common share before Impairment

$

0.87

Effect of Dilution

(0.02)

Diluted earnings per common share  before Impairment

$

0.85

Weighted average

common

shares

used

in

computing

basic

earnings

per

common

share

18,867

Incremental common shares from stock options, warrants and restricted stock

460

Weighted average common shares used in computing diluted earnings per common share

19,327

28

Contact Us

Flotek

Industries, Inc.

2930 W. Sam Houston Parkway N. Suite 300

Houston, Texas 77043

713-849-9911

www.flotekind.com

Brian Shannon, Investor Relations Manager

At Flotek

Industries,

our

mission

is

to

provide

the

customers

we

serve

with

the

best

value to

enhance their performance. This will be done with the utmost dignity, integrity, and

character.

Character

of

the

organization

and

its

people

matters

greatly

at

Flotek

where

values

will not be compromised. We will strive daily to achieve the highest standards of

quality, loyalty, and service to be, with God’s grace, the best in our industry. This is our

commitment to our customers, stockholders and ourselves.