Flotek Industries, Inc. reported its financial results for the third quarter and the nine months ended September 30, 2024, highlighting a mixed performance in revenue and profitability compared to the previous fiscal period. Total revenue for the three months ended September 30, 2024, was $49.7 million, an increase of 5% from $47.3 million in the same period of 2023. However, for the nine months ended September 30, 2024, total revenue decreased to $136.3 million from $145.9 million in 2023, primarily due to lower related party activity under the ProFrac Agreement.
The company’s gross profit for the third quarter was $9.1 million, slightly up from $9.0 million in the prior year. Net income for the third quarter increased significantly to $2.5 million, compared to $1.3 million in 2023. For the nine-month period, net income was $6.1 million, a substantial decline from $22.6 million in the same period last year, largely attributed to a $30 million gain in fair value of convertible notes in 2023 that did not recur in 2024.
Flotek's operating segments include Chemistry Technologies (CT) and Data Analytics (DA). The CT segment reported a decrease in revenue from external customers for the third quarter, down 14% to $14.1 million, while related party revenue increased by 12.7% to $33.0 million. For the nine months, CT revenue from external customers increased by 3%, but related party revenue decreased by 11%. The DA segment saw a 67% increase in revenue from external customers for the third quarter, although it experienced a 7% decline for the nine-month period.
The company has made strategic moves to enhance its financial position, including entering into a revolving loan and security agreement for an Asset Based Loan (ABL), which was amended in August 2024 to extend maturity and increase credit availability. As of September 30, 2024, Flotek had $1.4 million outstanding under the ABL, with $12 million available for borrowing.
Flotek's cash and cash equivalents decreased to $5.0 million as of September 30, 2024, from $5.9 million at the end of 2023. The company reported net cash provided by operating activities of $5.9 million for the nine months ended September 30, 2024, a significant improvement from net cash used in operating activities of $9.2 million in the same period of 2023.
Overall, Flotek Industries continues to navigate a challenging market environment while focusing on its strategic initiatives and maintaining financial stability.
About FLOTEK INDUSTRIES INC/CN/
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