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Flotek Industries Reports 2013 Results

February 18, 2014

Flotek Industries, Inc. (FTK) announced results for the 12- months ended December 31, 2013.

In a release on February 12, the Company reported revenue for the year ended December 31, 2013 of $371.1 million, an increase of $58.2 million, or 18.6 percent, compared to the year ended December 31, 2012. The increase in revenue was the result of the acquisition of Florida Chemical Company and gains in Energy Chemical Technologies and Artificial Lift Technologies which were partially offset by moderation in the Drilling Technologies segment, the result of a decline in the total average North American drilling rig count of nearly 7.5 percent.

Income Before Income Taxes for the twelve-months ending December 31, 2013 was $57.0 million, compared to $45.5 million in the same period of 2012.

For the year ended December 31, 2013, the Company reported net income attributable to common shareholders of $36.2 million or $0.67 per share (fully diluted). That compares to net income attributable to common shareholders of $49.8 million or $0.97 per share (fully diluted) for the 12 months ended December 31, 2012. Results for the year ended December 31, 2012 included a reduction of deferred federal income tax expense of $18.6 million. This increase in income resulted because it was no longer necessary for the Company to record an allowance for its deferred tax asset.

Earnings Before Interest, Taxes, Depreciation and Amortization, or EBITDA, for the 12 months ended December 31, 2013 was $74.2 compared to $65.1 for the twelve months ended December 31, 2012.

For the period ended December 31, 2013, Flotek's non-cash share- based compensation expense was approximately $10.9 million. For the period ended December 31, 2012, non-cash share-based compensation was $13.4 million.

For the three months ended December 31, 2013, Flotek posted revenue of $100.8 million, an increase of $24.1 million, or 31.4 percent, compared to $76.7 million in the same period of 2012.

Operating income for the three months ended December 31, 2013 was $17.6 million, compared to $11.7 million in the same period of 2012. Income Before Taxes for the fourth quarter, 2013 was $17.2 million versus $8.9 million in the fourth quarter of 2012.

In the fourth quarter, 2013 Flotek recorded income tax expense of $6.2 million, compared to an income tax credit of $14.3 million in the fourth quarter of 2012.

On a GAAP basis, Flotek posted Earnings per Share (fully diluted) for the three months ended December 31, 2013 of $.20 compared to Earnings per Share (fully diluted) of $.44 for the three months ended December 31, 2012.

Consolidated gross margins for the three months ended December 31, 2013 were 39.5 percent compared to 40.8 percent in the same period 2012.

"For the first time in Flotek's history, the Company achieved quarterly revenues in excess of $100 million, a testament to the dedication and effort of the entire Flotek team," said John Chisholm, Flotek Chairman, President and Chief Executive Officer. "Moreover, Flotek's sales of CnF additives reached record levels in the fourth quarter, an indication our efforts to communicate the positive impact our leading completion chemistry has on well performance and return on investment to exploration companies is resonating with our clients."

Chisholm added, "We are also pleased that our fourth quarter results show a continuing trend in operating efficiency with a consistent decline in SG&A costs during the year. As a percentage of revenue, SG&A was 19.1 percent in the fourth quarter, compared to 24 percent in the fourth quarter of 2012 and 20 percent in the third quarter of 2013. We believe costs, as a percent of revenue, should continue to improve as we complete our integration of Florida Chemical and leverage our existing infrastructure in the coming year."

"In addition, I want to especially thank our finance team led by Rich Walton and Rob Schmitz for their extraordinary effort in completing our year-end accounting process and preparing these results for our shareholders in record time," said Chisholm. "Being best-in-class should also include communication with our stakeholders and our team is committed to being timely and accurate in this process. While new reporting systems help, it is the people that make it happen. Moreover, our ability to file our annual report with the U.S. Securities and Exchange Commission, with audited financials, couldn't have happened without the commitment of our independent auditors to commit the resources to complete their comprehensive and critical review of Flotek's financial results. We appreciate Hein & Associates' efforts to complete the process within our time parameters."

More company information:

www.flotekind.com

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