Flotek Industries (FTK) 11 May 212021 Q1 Earnings call transcript

Greetings and Welcome to Flotek Industries' First Quarter 2021 Earnings Conference Call. [Operator Instructions].

As a reminder, this call is being recorded. It is now my pleasure to introduce Danielle Allen, Senior Vice President, Chief of Staff for Flotek. Thank you.

begin. may You

good and Thank morning, you everyone.

Ryan today are for quarter. call me Officer; call, Koid, Business; we on On provide Chemistry Borton, our the Gibson, Chairman, TengBeng business and Global of remarks participating will John President President CEO today's the Financial of Technologies. Joining Chief and Ezell, prepared and around first Michael President, results and

our XXXX, have. a for being for we events that, statements. will quarter is Following that the we on we announcement expectations on our earnings webcast also any questions our may answer on make note future available released today's Yesterday, you is first website. forward-looking or website. replay which are available call regarding Please call our comments be any Today's will and projections

current of results subject review Forward-looking of reconciliations can call. are our beyond statements are SEC. to metrics may our filings and differ control. non-GAAP refer a to cause factors to materially Also, We which to earnings please our with uncertainties our and many risks our advise discussed in discuss These listeners the release expectations. our actual uncertainties, risks number on release, as the our on press management earnings provided risk from and

turn Now, it John. will over to I

Danielle, good you, morning and thank Well, everyone.

the business We past are pleased with in we challenges of despite the are the our progress that seeing year.

increase our segments. result Then impacting we expectations Our Uri both February first the March, a supply Winter in below by start and demand to entire see chain. as year, from slightly sales the followed to disruption significantly began happily, major across quarter were earnings slow to in the Storm

organization more Flotek's as Now future and about achieving on and optimistic results-oriented our profitable has growth. employees become our we focus elevated remain

frameworks passion production our people. knowledge we its half and environment, for using on our data land solutions gas reduce amid or performance air, ESG, the increases and and environmental evolving are energy by on by hydrocarbon water, the social XXXX, of governance to to reduce industry regulatory greenhouse As focus emissions chemistry impact and

operational ownership an more cost efficiencies. impact green is biodegradable than precisely pollution, minimizing reduce value driving well you the This -- chemistry both the of at also pumped real-time is I reduce liability. and Flotek's carbon across the is to we where the minimization programs, are without of ever. the the to important their full and digital in sample, our industries to enables been of Today missions. of total lot their by consumption a future the differentiated footprint, chemistry have the using become which known real-time varied this last to seconds the to collaboratively in sustainability. and supply is strategic for that going why products ambitious green chemistry toolkit, able Over encouraged greener leaders big and reduce them opportunities, transportation our their waste personally solutions Furthermore, environmental learned first our organizations enterprise widely decision-making. understand in our at Transitioning and how into brand and terpene chemistry quarter I'm a meeting yet has to in to I've and will the as our ESG monitoring. CEOs have solutions be ESG our pipe. the goal. the reprocessing perspective, solutions we industry the with plugged our through meaningful. green and green of a not help offer to the real-time stage eliminates our address most improves at gases technology their evolve diff at pending data that which improve those quarter, EFC ESG E&P's discuss the in C-Suite customers chemistry the use partnering financial agreement achieve recommend operations eliminates take through their can to our lifecycle helps Florida customers partner with ownership important across provide Chemical reprocessing. long reduce substances, future litigation When risk conversations leading monitoring operators the and What define chemicals collaborate use ESG the C-suite I've of ambitions, performance. that flowing strategy our real-time to energy been data is and Company. to in less lever supply composition We hazardous this processes, greenhouse site, their total approach EPA chemistries, or having and measurements as our of transported, of volumes save chain every while and the physical conversations a is, spills From lower to environmental financial handled must inefficiencies we utilizing consider the large and system emissions deploying with of would a be reduce toxic and and room is XX like reducing measures It to measure our related and and large-scale are of through with the energy cost automation in-base and and to crude and

following the XX our exercise Florida our to Chemical Flotek March our on their a and in terpene rights to and industry announced audit X-K, standard chain. in terminated pretty allow an supply in records, we books contract their term agreement refusal supply contractual with we As to

We recovery subsequently in action and and million the seeking ADM a filed filed particular filed lawsuit amounts against lawsuit have of a $XX ADM, counter they already of payment Delaware. paid, we in have last to year's

our sufficient or the our terpene confident Despite our operations ability the on termination Furthermore, feel agreement, meet customer speculators impact or related outcome, expect to do we have of requirements for very any agreement we sources the we While or ongoing foreseeable position. our meet cannot future. material termination supply the not needs. we supply in will terpene the litigation ultimate supply of and discuss litigation inventory to have

longer Moving will to have forward, our align management at our excess loss. will chain terpene our we sell purchases supply with no demand. strategy terpene a Hence,

may While marginally short-term very use a in impacted impact see a strategy, our our and our positive will margins. we the cash of be for as result top-line

of to I'd our quarter. several discuss like Next highlights first

adjusted improved sequentially strength Our data analytics. EBITDA driven primarily by in our

for look narrowing. was excited in about Top-line the quarter our last As we best segment, we our JPX of and that is Analytics losses forward, performing Data year. since are growth and our am improving acquisition first our in are pleased I May the period opportunities

address doing there and our entry comments, excitement upcoming we're further make to continue market for international how his progress We around in business. his TengBeng the and will

quarter-to-quarter Moving strong onto quarter purchases Chemistry improvement first reflected in energy during the that Stripping prior domestically technologies. chemistry our out our segment chemistry. terpene improved quarters, Technology from the with were

great Vice I'm President Technology Additionally, us who of their Chemistry segment, and to who pleased people I'm the as cost to transition are more and share part Flotek. see encouraged the by announce our experience Snoke, people Ryan to be business team. But our know to and Chemistry we've area two will now will of next number that Technology I Chemistry level. calling It's background, talented of taking the Nathan to of as of Sullivan, and instrumental in over wanting measures to I'm joins added also let's in Professional in Matthew employment be personnel, liquidity. Energy Chemistry. about President -- seeking the leaders Vice both us joins with a however,

flexibility transition numerous the balance evaluating continues I and such actions we based to among of our want sale protect of the we improve do transactions -- the need of are so without to launch, actively will we real assure sale we to diluting and our for to consideration are intend as One our focused improve provide financial leaseback shareholders most think market to grow. an sheet and flexibility we other improving is value of options and and non-core on that shareholders. important our properties, priority all working capital, we as asset financial estate

reported Finally, we entire last a worth of historic Uri, it's were highlighting as widespread by call, supply quarter's impacted as in the declarations across majeure force Winter chain. result the of petrochemical that also Storm

along we raw materials. rise environment, have supplies a limited of seen a certain As in price result, with

to chain Our this cost inflationary environment. manage our continues within relationships, plan leverage supply

on Data Analytics of going the turn our going discussions to and our excited, to For results. you. Chemistry segment lastly financial a over know our quarter, you're additional in-depth I'm to it details I'm turn discussion who on more further for will over and to TengBeng, Technology Ryan, Mike, TengBeng update provide then it on so to who'll I segment, an give

am. Thank you, I John,

all on QX, strategy, in making we our remain While focused on progress very fronts. executing significant

Revenues new segment. and continuous We performance past too. are margin major to quarters. In sequentially X experienced growth the significantly company. existing a see customers our have Analytics past for from financial Operating we quarter, in double-digit improvements added customers, oil buying several super including repeat improved Data this we pleased

of purchase to to technology. the last testament and bring in cases the our through multiple X of systems Repeated application fact, company back we midstream the became In came that game-changing a QX, major our are customer quarter. value customers

progress international We the front. made on also

the process. for very international market through analysis direct going certification extensive is Our a

development made are is international and takes involve progress to efforts. plan. we progressing process project as progress time according this good our also the we certifications, While business multiple making Meanwhile, in

international first in who quarter, During leading completed company pilot, gas Middle oil site our were survey, the the we East. and first a

in survey We second East. in for pilot another are also site midst organizing also Middle the of the

milestones pandemic. able from are during key customers encouraged by to travel, We being not despite this meet challenges the this the to

application AIDA pipelines. development to machine-learning interface detections reduce need and batch cost our new the technology We application the hence interfaces or will and This front, significant effort. new to in two for invest application not of in increase does using the algorithms enable sample, in advance successfully interface area i.e., was installed This decision samplers. customers locations. batch make profitability. released any AIDA faster first On and short we detection continue algorithms called resources batch

on technology projects. to are We several looking long-term mid development also

have On reduce reduce our emissions. consumption their the ESG energy and footprint, technology carbon front, mentioned, as offerings companies John reduce help

many example, of our and are crude For condensate stabilizers. in systems used

emissions environment, in all data the specifications the less In an technology required performance. is helping customers improving fronts. storage meeting we progress transportation. both more in and on customers gas, consumption. our strategy energy making reduces This stabilization ESG this real-time used significant Our while unit execution of liquid that summary, JPX produce their have the provides and and for improve made impact on help

Our game-changing their businesses. and data real-time transform analytics help technology customers providing

exceptional from value benefiting we the bring are to customers table. Our

will Our With going Ryan, bright. future the who to discuss segment. to our is call Technology I'm that, pass very Chemistry

our I performance. Technology discuss Chemistry Thank Today, will segment you, Koid.

goal our visibility recently the highlights our of share First, of Flotek commentary that Flotek per quarter will lines. on at production ESG to the is I'll disinfecting help our provide sanitizing cleaning, Protekol partner of to chemistries, deliver become XXXX, technologies, includes choice base. operators safer brand launched solutions registered chemistry to to customer value cost deliver then a ESG-focused of FDA efficiencies we and enhance and integration fourth operational our our cost-effective, chemistry the to which production and markets chemistry reintroduced proposition on barrel. the our of lower our professional improve well cost EPA The product initiatives to In part and of energy environmentally-friendly, increase

companies. sales pleased a has service execution include conversions rate with To both to value of market as our our are increased proposition we the from domestic refined we to sales. operators receptive as well of addition, and customers, and interest of that been that the the date, complement E&P international oilfield range In strategy

quarter, trial impact saw the storm, as we between technologies concentration versus customer we our green able in our applications operators. a mobilize of reservoir to major to improvement companies. key independent at execute of we sequential XX% winter oilfield domestically, despite revenue the service field E&P and Now operators were centric And diversified quarter

proposition to production effective expansion to and diversification the cost that in to operational positive optimistic of unconventional reception on at we for front, are shale can strategy ESG particularly Energy We Chemistry customers overall continue with effective national that solutions markets will target value our focus and as chemistry a our programs, those key to our impact. of be improve sustainable And activity business. area be gain continue

is result Chemistry and metrics focus Technology quarter-to-date efficiencies and And opportunities the not by Europe. of reductions activity quarter, delivery drive on of proposition. March solutions service And positive headwinds transformation And the shifted and to moving flow. finally, delivery President our and year first further rentals over leverage our was these has to the cash we as operations Nathan senior-level to reduce of with for improvements our us business Chemistry. equipment took outpacing services the ranging leader we're team a costs the an measure XXXX, to Middle growth operations market Africa across improving pleased operational Energy team strategy strategic Manager execution. the to the continents. gaining of focus well-positioned of oilfield Middle and slight our London. to internally continue joins look him Snoke execution deployment our major to goal experienced established are an to East streamline chemistry value last in I'm custom Halliburton, recently conditions our front multiple processes And our transformed thus right-size in to decades welcome operations in regions. freight business NRC's to Vice us as closure Nathan traction spanning with forward underutilized despite of execution observe completion reduced We're the improvement. of and the the global to We based two growth to roles and Senior of have join segment. in us in sourcing, of have him differentiated in-basin companies and We're accelerate for our where out in cost Nathan East, contributing our with continuous of in as we forward Asia advantage defined And Pacific and enabled to last initiatives to from EBITDA to most in Eurasia operational our the solid our revenue, he's Region able reduction leaner of field a that with percentage additional revenue, core excited service in QX, gains with of significant Africa in We facility as or we across inventory, Sub-Sahara allowing to footprint business. management we the and Europe, the charges and reduced to while the

chemistries to moving Now professional our business.

March first pricing quarter, start season, slightly sales we strength reemergence for And saw a to the are Chemistries, sequentially Kimberly with marketing QX down, and roles, leader the leverage market Matt has result to overall Sales systems. technical of from as most continued and stream. diversify has Director roles with a to leader, of that for of competitive leverage Matt as for revenue relationships with a branding the in expertise the continued we've the the yesterday, and growth announced as he experienced production, the in XX-year chemistry the and in Matt continue up our improvement serving in janitorial at and drive function and Georgia-Pacific held sales Matt the revenue Clorox a revenues ramp we within build the leadership corporate our long-term. veteran to Vice And a Professional excited had outperform in concepts, built the that sales Professional joining slow past this able notable market. quarter, specialty despite as well for our helping holiday variety pleased to Market we And automation Scott Sullivan an business volume we and recently dedicated for year, marketing a during due pressure During in capabilities been to-date highly of industry. is of QX. build segment, at the Clark, up -- with to January President world with our over us restroom where as hiring sanitizing GP also momentum experience Northeast We're Pro. to Worldwide of

to to in We we an are momentum the timeline it good are to pleased turn And with results. Mike the financial made growth. over maintain position progress Borton I'll we our and strong and discuss accelerated in

Ryan. you. Thank

John of we because Uri. COVID caused was to As the and slightly with the quarter Storm demand challenging disruptions Winter faced as expectations, below previously, start first our all maintenance our quarter mentioned

However, pleased this represented momentum we that continued are and has March quarter. solid into

first quarter, quarter of factors. revenue fourth the same $XX.X a within in the down million million million. was and year. last X Chemistry we segment, $XX.X revenue during X.X% decline the consolidated saw decline below Technology million driven the X% During $XX.X By $XX.X by from period in sequentially revenue segment, the was The

ADM, of supply as the quarter. transition First, termination a growth away selling the from our of raw result terpene inventory the in

sequentially by quarter. and million $XX.X million a Analytics sales quarter driven in a were of decrease costs sales reduction last costs is occupancy that in with G&A XXXX in JPX. second reduced consecutive it's Data North the of lower personnel associated last increase as year's a we into driven the out growth first was million the cost, million these business fourth corporate rates XX.X% the $X sequentially in primarily saw QX of were expenses. activity, expenses. higher in product finally, quarter. taken its quarter despite one-off sales, quarter the down in [indiscernible] as to Global by the quarter and the XXXX and moved sales the last costs impacted due those loss chemistries, increase driven also and of from as finish or in seasonal -- associated numerous XXXX, with second share the all X.X% were to increase project Excluding whether highest in of reported XX.X% reduction by sequentially, nearly Consolidated XXXX. the in G&A strength first America. declines versus compensation significant in the winter energy million with segment over enormous build with in severance the February, and energy the Research up $X.XX of quarter. X.X% in to declines year diluted chemistries improvement as into by We Center. in supply with quarter the growing to the that sales, $X.X the our -- declined development Research company's Drilling of saw to a fees higher from terpene XX% of line The in tax the since in within Innovation million from XX-K by expenses Corporate operating first momentum further which last per and by XX.X% headquarters the or well $X.X diluted It's by a storms overall. by overall acquisition demonstrated the fourth The segment quarter and year. year. expenses performing the new This X,XXX and legal operations sequentially quarter of The international $XX first strong million decline in Corporate $X.X in year constraints loss million $XX.X market fourth first start increase in quarters the level also quarter. from domestic This share offset strategic revenue $X.X $X.XX company consolidated of improvement actions generally associated share quarter year operating last quarter lower occurred per loss lower was and

of of and revenue. fees audit on million was over last for $X.X one-time $X.X slightly million lower of quarter's last million million Our and loss adjusted first loss legal including a above was $X.X year's despite $X.X improved the and higher quarter loss EBITDA the

cost wish growing with continues relentless the our and drive efficiencies, focus business, as cash recover As growth. we to top-line remain market manage to our on maximizing our generating

periods. We performance. million approach, disciplined first of to of quarter. liquidity. the our compared Moving as cash fourth pretty by in At end first cash $XX.X versus on preserving sheet remain $XX.X in the quarter, focused million the the to the is Driven inflows balance prior our sharply X declined quarter our

capital. and which agreements was severance Our offset working operating by impacted cash prior by losses improved was position partially

combined a the the to have Paycheck pursuant of related to We million CARES outstanding Act. loans Program $X.X Protection

as on Further, are credit. which following we including figures for several the the for loans retention currently our weeks assets, following the the sale. employee next technically, as facility, for non-core monetizing So Monahans well is

discussions In asset our we various have sources around with funding a positive addition, very baseline.

made crude the during days Our is liabilities sheet though the liability was ADM company's litigation million balance $X.X of with to of before of QX, quarter. usage in sheet fourth and the against balance quarter during the just agreement filed the there Even made supply of the ADM. the adjustments QXincluded expected end associated terpene no

evaluate However, buy least terpene to reiterate, That said, will moving based $X.X balance that guidance. do intend we and accounting not continue I at million year. review forward, to on would for a to to like we

of [indiscernible] weaknesses. process closing, want solve to welcome, manage I Before control improved biomaterial who our will internal remediation and

leader We back to we have this. remarks. pass will and for I a the to an John At program are excited such his look for this final driving forward our join team experienced point, call to

Well, thank Mike. you,

are year heard, second have opportunities all business momentum the lines. of of and about half established we you've our XXXX for in As into we see optimistic and the the

let a solutions highlights; me meaningful with chemistry our to suite just is the of following summarize and the industry. of green few analytic data So

horsepower by emissions today, long helping to pollution, to efficiencies and that Our reduce environmental upon have benefits benefits total those significant products and reduce reduce built the ownership. our sustainable added reduce of drive waste, green was the cost we and of history chemistries operational

improve are to with ESG with cleaner market the all industry customers performance air. Our energy, opportunities accelerating we transition our a is across and cleaner to and to engagement as us excited partner we water the cleaner for seek world

company our Silas innovation strategy. record, with and by continue been to has our Dr. Our environmental they team led central great to our forward and will track drive research

more becoming we to of today. customers' impact our that goals, a in ESG new to green lifecycle months the the mission goals, the coming company's communicate Our is plan on the chemistry their clearly website unveil is and represents closely particularly how

and the data sequential growth We narrowing horizon. analytic opportunities with deliver steady coupled on are international progress to segment losses, and in the continued our pleased

optimistic the growth really JPX. are of We about

see energy and Our remains heavily well opportunities segment sequential as the by we driven East. XX% increase Technology are domestically, thrilled by the in revenue future Middle the Chemistry we in chemistries, as

For long-term market added CAGAR intend with Sullivan. near a for meaningful which as a We Matt anticipated double-digit become to for potential with supplier professional addition has of chemistries, the the the come. to market, talent decades we've high experience of a year JanSan

Finally, we remain our balance responsible sheet. of stewards

We cost are monetizing assets lines And evaluating on of ongoing non-core so see the and both capital, will call. I that driving have we working necessary reduction, for prudent being the growth. with you we credit, that, domestic appreciate and international

Daniel? We will open for it up questions.

Instructions]. [Operator

Our Daniel Rice. Johnson first question comes with from Burke

to guess were even John, any maybe don't levels April hear say just I QX. if -- even of it's suppose like as based on it that encouraging exited higher willing tilted QX look to what could top-line you indication for maybe you'd activity be rate? I have if give run

than I safely, QX do think better I can anticipate being I say QX. this

now, doesn't getting of everything there and going is like nothing that doing improve it that matter sequentially. but forward, right is much a look closed we're how Now, will

the impact I to a scale? that, So terpene, -- that and reselling headwind the the of full ceasing additive sequential full but it won't be -- of bottom-line, it was of get the impact

is you lose it that on selling something sell money the Well, it. every of dilemma you time

was sell to we or were the at and contract to market. we it cash have in then back was what well pay where get a take excess And buying only the required so way

maintain obsolete. we that just were to cash, we inventory quickly as became we didn't have excess could selling so so And our it or that as

let the in is no the we not would question an a amounts recover of the already interest and or whether there but So result the up, being should audit purpose go then I it on of us we back the breach, won't able made that mix that company. little cash try was give to to and of here, cancellation opportunity it of surprised And that the that's comment not of that question but lawsuit. best did whole they which paid -- a as us too we to was contract much

addressed professional just packaging. can And guess you in the some another chemistry you then you professional or could my it build to I you the next the areas of guess be that certainly number that there, produce products, the X out point I this highlight in question over lot months, I'd guys at to of maybe products encouraging at opportunities then chemistry preface call, see this maybe on was continuing XX the of and but see a curious comments are here will different again, key some different on team point just, focus if fair the of side, be months?

of first Well, and upon CAGR that's health just are lot and continuing people entirely it's and emphasis do I'm those a has the on and disinfecting. spot forward existed double question not go the great the expected products. us on days is great put that Matt on and in with marketplace, Sullivan of dependent here the on portfolio COVID of job, digit as COVID, room We're actually in not CAGRs to sitting kinds a going him a before but we cleanliness have put a a near to and

product sanitizer And the you business. the we're -- so way the asked I lines our not appreciate question in because,

the have we We complete see for -- you said are might products, tell to comment, next have looking so have think, disinfectant, portfolio is right? how but on you believe where and opportunities, May, that products. we'll and have offering Matt a People of portfolio it they and products, our we I of a most be And for degreasers, wipes. on we very will it, portfolios -- buy for individual -- market's him the likely April, robust come mean the what includes but that I I developing now call, do have tend Ryan we want to explain. can And

rates run that did function of crossover seeing are our pressure, our to revenue pricing in where guess continuing I are kind of the growing kind We med-down. seen, were we've Yes, volumes improve. and we the

mentioned, degreaser, John on the well. because green core unique experience not both even evolve only utilization stuff in lot growth -- to sanitizers, seeing the have and terpene. of and they our market volume foothold cleaners, we're we're we of will our our with we're us portfolio in diversification chemicals of biodegradable and with diversification really cleaner around revenue And do aspect and got that is a in as portfolio, and channels our think is the accelerate based that, to mass They this surfactant the and just starting growth are Now market strong faster. help leveraged the develop I chemistry see

this, reason. about Daniel, people stockpiled the make test, everything was When at come so what another it and back on because I for purchases. didn't you it difficult things to see early optimistic look for market really did Still interesting really COVID,

created that of see that to of market of ago And predictability. and is are the and here and are be of the up very so, normalizing, normalized months And last lack business. March lumpiness out overall those and think, the where accretive about it we the got inventories growth to using really our buy great year. X that talent a part great purchased go products now will where got and I we'll markets chemistry that people products, line a we've The customers it reach to we've the -- they in suite

let ask question maybe me ask JPX. on I'll and So one last it

product for service towards the and just to of in credited, how revisit the sales more heard to wanted I you the of think if correctly, credited transition sort improvement model reasons in sequential I along? -- I you coming is the I guess the revenue one of U.S.

ahead. Go

Thanks Daniel.

the ARR to future We the Obviously, transition. recurring our all are focus is and in revenue. continuing -- increasing is

that we're So right working now. towards

look are Daniel. We've together putting you measurement that and that an likely consulting when had interesting of the analytics. our several from it, large organizations, interested also advantage organizations service take in business at workflows inquiries our It's

several look so a so the to of revenue in implementers able XX level full on this understand for hyperbole and system, I'm and drive the here, years growth and And SAP conversations I when really I to and ago us from take think of that real I'm up the came KPMG's, Accenture's companies the excited get Deloitte's measure are the the accelerate help here out, SAP. Koid pretty getting I think there. And of meetings we're high workflows And to came not deployed, the bit revenue, a took more unlike a that is system. beginning you advantage this don't coming if those associated much -- to me that that but this recurring have if that those will workflows shoot going and about annually also and stretch, with

Instructions]. [Operator

with Advisors. Our John next Wealth question comes Ascend from Bair

for? traditional markets couple gas E&P oil markets a chemical be specialty What products and green outside or Got the your questions. of of could industries suitable other

I to But our real fact well. There us industry chemicals strength also there, stems I the those to It's until of get for get you And I in may result take than to might have, I interesting rather remaining other and that are had chemicals into creating do mean we that. opportunities a restrict us even have I conversations we're but herbicides, would or agricultural going We've around I develop would year those that by pesticides, know prudent it's using chemistry an as the the is square that to we're -- if past. be can we the agricultural the on the biodegradable be forms it when oil coatings our for spending now money of entries had markets. back able outside for couple are and thing don't industries, -- the a chemical see think glass of is do. every of lot right and focused won't of more and do to biodegradable us different the the we that that most profitability I getting to actually aspect, opportunities. lot of of and I staying insecticides I to will get we've profitable it, ability won't going that laser-focused. green restrict used that. There capability we the in describe opportunities and distribution traction to that being gas. in of be have scientific a the think have efficacy leaves now,

the well you you the in -- as balance more comments, Who share would -- offerings kind what's your And so say are but kind has more you in on providers have approach as focus approaching forth? you your guys versus quickly? you of the and this efforts And your touched then, think service big there? and kind really targeting E&P service might can to and most embrace of companies companies. you on the of talking do kind a of oilfield What

you're Your It's question at sounds here good a one. Flotek. really Director like

bit. if we So what a changed

next to are to chemistry. The I managing are where in in mean to and the conversations here off, billion working companies great think to have in with the now Well decided direct variations, CEOs or cap or continue billion channel $X.X a have talking service market more, conversations good substantial Flotek, field pick sufficient a up companies on a to $XXX channels. at say stopped is the green point immediate don't going oil do I've that who I and forward. talked with good that smaller go were really we have service really that to companies, channel, recovering the the of First go biggest we the amount and X customers, industry, range question. on impact to really have as got on indirect company going in work another scorecard and can and we've through staff go biggest will done their that and the from we

don't path of what so have almost we're can that to tell how, that sustainability. where a and products, a we them is their but migrating today, and right so greener conversation really should you are their from can now. is to will in improve those This includes them chemistry, And with at tell areas how able they they any have CEO what currently do to we look chemistries have

the outsourcing middle to, so traction. that question Now is good going is and and go to impact ask levels, we're where got a and that but that tier, less larger tremendous us have is departments when will they good they large having you likely, on, we've there really get conversations pretty that there and to there like someone

him entire taking all to won't they of at them conversation it. I but focused look we're had CEO, waste. so when about I are I name how of a talked And was on ESG mean, his one the reduction

take discuss all waste you you was how equation. to so much wanted the out of And could

a you use that toxicity the there's reduce and recovery. just their of at why be that Everything biodegradability go from of location you it, for of of use, of be chemistry, to location, drive you're with make total programs think where Now in to that our you of of of we to around less to the for with concerned big view see in reduce how chemicals, on that moving it But it's you to COX, chemicals enough the of site increase not reduction far of use it's you're can water. one start huge chemicals are things measurable bringing there, as use, transport of everything to forward. biodegradable water the volumes is, because about part will you totality ESG a waste do going Ryan difference the the methane greenhouse site holistic that our people with as we the customers of move nature having us, greater the totality, as you associated gases use, chemical the well you solutions the we that's them has the reduce transport volume not location, the to the is

and as manner, me materials. that this am organizations let in -- package the bigger majors, interpreting is that total may that to So if as this, correct turn Flotek ask then Is a it opposed to product service sounds the and the I or? for of the

No, way the all a them selling. the question, chemistry own, them and we majors assessment with it's the super Other their as have that they to they're to the products. of with the right going can the but and assess -- we're their products NOCs, people help on both to the a the ask assessment ESG want ability result on the

ESG you're where got their demand haven't so chemistry helping ESG that need you've you're and there, fugitive XX% And I'd them ESG got understand plan, different put plus sales understand make X their it their when and say program. Today they sustainability really they call you've you into meeting part of creating two and a people, to valves. emissions by chemistry

because that of induced putting we emissions the and valves in that water emissions. eliminate do water water look lot everything production, methane a seismicity, a to the where we to base, need improvement lot to water up, injection, water minimize go they're we inject produce money with and injected. the doing the They're of You and fugitive can with

And so that's really important.

product the when about about and think from potential be eliminated want It a they elimination that for employees, tackle employees, sale, them by contaminate be talked consequently, step. go it we us for our that everyone the because we're we that tackled looks that as solutions what develop spot evolving the for have can to, as to contamination water can ambitious it terpene. using continue have they xylene. air, aquifers, field impact big chemistry We the now xylene, they sort is accountable those be use very replace also water, tackled to off sustainable aggressively we've environment, X have of addressing next chemistry And might is and long-term. -- hydrocarbons to to what a we've first, impact are using field, all just we of I the can excited in the talk the of that clean-enough might evolve will like And we've they're that harm derived for to eliminate in think I we a energy about biodegradable by We and be not better right be on are at this. on we of the that. before, to the can chemical

traditional Are tailings those and the cost-effective the biodegradable chemical to relative mix? in

have things is, efficacy Two happened, now. great found these lower X products with concentrations within we have

is, Ryan by So which of the fair, But products gone for of first let product because off, up, using disruptions using that the the have address Ryan? market supply second we I'll cetera, that thing, itself cost them brought those is lower chain other et down concentrations. prices the

right, would extremely ongoing you're other seeing comparing product When look the of the direct in to some for or biodegradables of have, actually from compare you solvents versus handling, you're of cost-effective of at look and Yes. safety toxic BTX supply of was, a some biodegradable. at some And we it's total more ownership entire point a the of believe still rewards, our additional the when total storm And to mutual solids the that of aspect to BTX, plants there cost in solution terms of cost better moved the delivery that is some at I ownership damage that it this chain a the disruption, it to the ether mean, when have versus time. not, say, I a service a you environmental in correlation a whichever paintings the the monobutyl is due model. you and TCO, dab

full And value that be is going at the think old evaluate chain I we're driving to, to hard the the per after some difference, the versus But ways to we're discussions tanks the just the these this the around it's sometimes other so the payout true all look disposals. additional is is that's talking about collaboration totes x point of the because big that that in per the goes ownership, of because payout. on total or mediation usage for or that's and not the cleaning of and touches components cost that

is drilling only total the reservoir solvents ownership even significantly be the centric or their displacements in side. and of on biodegradable cost applications, is not of impact, me remediation, whether it so, but for for better And treatment these some the

recovery, what's a much in more It's And revenue. easiest difficult about production when actually actually to you're sale. to sell improvements measure think or fastest the and always improvements sort that's to detailed trying of path in

how where to number done the design it, have having of cluster? you to quite customers have aspects analysis impact great impacts have work. And on beverage how you lot a be is for perforation do do about we at and that how significantly of going impacts a many effectiveness. mechanical world to are then making in It's the and trying in they've stages that your their the their and so And when customer, go easier you the sustainability talk of -- to about we But go go of through really and well goals, impacted, skin multi-variant the How assessments of can reduction how competitive liability, meet tactical cost ESG are of greater and variables. and and you the improve than going majority XX%, performance a talk of you're to production.

For sophisticated that. customers, we're very successful at

cost efficiency ones For impacted a market excluded most that's are reductions, by the now so and story we that to not have an us.

One very that, going for question I think last loan, apply to about clear or please. discussion on a PPP quick my wasn't you the forgiveness either that you're what -- -- again, line said on the actually caught I just you the reiterate that. question, because Could quick

Yes.

allowable -- have weeks. outstanding a are given And X next going the -- in loan I'll next it's the our in so there be we to PPP we for forgiveness the weeks, meet the two So, reporting.

a partial it is -- or a full XXX then? application a it forgiveness is So,

apply also We us bases in the number we're can for. QX allowed are make going submit that we're to eligible. what what be are mid give credit, to retentions not will amount we're for probably QX on who going to a to, and which but ready we for number maximum out, we significant of allowable XXXX employee to And like to that

for actually in to see applying we've are QX. the all credit that are of and we retention starting the also benefit employee So

have Flotek And main words, be JPX you the applications? include Flotek can do they have both to PPP combine separate do the In with to you X or loan? the other

separate We two applications. are doing

separate from JPX submitting the are We the X for X. Flotek

and follow-up, have encourage shout the such would to you us give be window I here. happy talk to to while open is great question. would you You a

our next So jump to probably we'll I question here. think

offline. and I'll of get here out

comes next Capital. from Eric Swergold Firestorm Our question from

you I morning. got questions for two this

okay? You hear me

You bet.

target remind for certain if period the whether us in in of sales be you'll hit think to find question getting mentioned is And how you, compensation John, $X make First do remember you're some East. full face-to-face? that second a your for the time, is able Thanks. for of actually yourselves? then where I customers is TBK, you you question share can You dance guys progress on about, to of some When program appointments? card $X, you you making for terms can't money now see Middle

I will that. do Koid?

U.S. you'll be Eric for Southern, customers. able see or to

already, for not us calls. guys Team to are Otherwise, be Middle the customers their and because coffee they through or for be and restricted and Zoom office face-to-face, our well, meeting some most to so fact, so are not in lunches at time many, all so the on. travel calls the customers getting calls. but In international, to East, see so the travel us through on meetings not as Zoom not and of able could here even outside, The really Zoom allowed, the will Teams is allow meeting -- is some be Team

And got as and pretty inquiries and think, So -- interest there front through I but as Asia on that international got it's conversations tells coming And with Middle I example, East not well challenges the able -- well. Africa in a obviously face-to-face. for customers, nothing you we've high pretty being that see that same customers of from recently lot well inbound West we've face-to-face even the we've and is repeat still Africa. of been the is despite to think across being also conversations, it's working

on are pretty coming well. So those

now, to JPX pipeline and put exist you're this that we now. a COVID in these because and have to seeing finished improvement really all haven't internationalization little be assume make the would internationally, -- as a it came that India the in crisis India, include of halt there to right I'll of result that result sales, domestic a pressure on the a TengBeng significant a we in is

international Africa, in revenue. but we haven't our had well opportunity any India. are And and tremendous they East Middle -- the So and have thoughts in as but as prayers etcetera, we there,

is back growth coming domestically it on we're Koid's really seeing track there. got what really and the So done

that that not on have the international time are internationalization in great to the and be By of clock to working hard and immediately. we wall We all product pilots assuring progress the wasting deploy the time we'll product able ready, any making it business on that. and the the sales pipeline we're development

one where up need can and time of high that. we are do on The think on level early I know So we internationally, internationalization activity -- each the worked the Koid is, of Verax so morning. and Koid nights, questions I extremely the

sort Middle the that goes at old are a compensation, you so question usually East, late, our very So asked a of too there X:XX slowed there night time. a connected. saying did or share, our as p.m. down. make either hope that have you But of period lips have not to goes things when it's and I'd and X:XX $X your the ears, To money, some looks from would I the team, COVID God's Eric, could around to gotten talk it starts like about in shorter

refocus to to channel. where the now gotten relationships had company also We the the we've indirect with back

just are there to a We strategy of people -- market, sell how on the ESG we now not the sustainability recovery to whole their can efficiency, enhanced their be improve really good to how have or on oil goal. EUR,

for in came that's I the $X hurdles on in hurdles it. the in So $X We getting I range, in focused I'm $X I'm and do plan next the those the range, what have $X, and still here that on for months. occur range, over XX

I'd at least like we here the So year. go say before of forward, jump to of end them as the X

turned we us. around for take opportunities access capital, And in so we're on front working us see focused to that of really advantage the and growth of to that's getting get needed

The next comes from question Joe with Intermarket. Von Meister

continues. we're good follow-ups which What breakeven? concerned And you I are you the two that. dollar too. burn have call, revenue little sure I the a that about after a to is So guess, EBITDA I'm gets and bit cash

repeat that have I Daniel. Can trouble. little you for me, of a Okay, bit

revenue will I breakeven? it to said what take

breakeven. Well, what revenue take will

line? the On EBITDA

on our pay all one pass It as, seen great well because, is depends that. for ability the mix inflation on pricing we've we question products debate having we're it as what down in and lot supply to a that some and a chain there impact as to in

that, going $XXX So we going cost move clearly and above I to on structure can that it that's necessary is continue to to be our million, somewhere work down. so be number

to down it we'll that's to to so work as And continue try numbers. get wherever doable lower to

start million, sort And get so of you close I'd start going when getting to close you're to say, to -- to closer $XXX breakeven.

striking distance. within be will We

get we it to fair I this is year I don't don't now or $XX have products think -- because to like revenue, what early product Can One of X. you because too it's tell? you X out. million break in it's do it question, and instead know $XX something million or quarter even there a a now it's doing used

to. look cylinder So than more X it's look more question you've an not to, to given silo got X unfair to business than

disappointed it's it's as statement a our I didn't answered. in asking you you, for Okay, good, try so forward-looking and if if major me and be a Joseph because question disappointed me out to I'd I'd great much get in

see we got that do the kind remuneration made statement, make because wife break that until wouldn't on close. let me has I encouraged promise joined as even. can come again. both of cost My to breakeven I what me I speculate any to and So when me I first well I take partially, did not

forward-looking one a I good of I take the break as so and control still we won't a I learned reasons statement, I everything. won't even bonus the have when lesson, will And then can't

and ask for have market, of that recovery about to and normalcy I'm the demand, what can't recovery are you the think control. but I the we things excited COVID of

good our grip that. on we'll continue costs really on we've think focus a I and got to

have will non-core capital best in what what affecting needs order be in near-term. fund the divesting our working a and of and assets We are or the we to understanding great to

to asking but pass. going it's -- would I'm I it, this answer to so be it would going as breakeven, that. have I'll do to when the answer. when predict I right would say, possible, it try I And it it love done as year, but to people soon this to I'm am year,

the of So loan? do to XXX% PPP, recover you expect

Well, this I'll answer time. from -- at

covenants our as that -- formulas in of soon we I will right Our significant to am there of to a going but going to goal, intent borrowings, we fairly order. to for the we that recover. the we are it we're put that now. to is companies recoverable we portion of lot a maximum, companies they still for -- attendees, We confident public you as going our we is an maximum is wish and explain be we versus so report how we would for what what's and will can how private our can allow determining TBD, for people ask What that's were done had of much to get for kind be. cash some I inside have idea have actually a still. It's our forgiven

quarter, and to our did at after we this than for is that next in quarter we've and goal less QX the less use that. prior quarter used look a cash take cash we in periods you numbers cash our If less quarter used

think So that, towards path been in XX on best we're breakeven I point, which have place the to strategies this we've at and support is product good probably the months.

more quarter, if look two international did the this like one, any? number John, revenue got I what

generally QX? about I'll me talk -- QX, talking about for just you. So you Yeah, let it

The one reported. just you had that

international Okay. Mike, the revenue, QX?

we internationally domestic were right, chemistry is X% if saw Yes, typically fact, down because right, up was good down, was down, by the being XX%, it it's to because X% domestically, in the international right, it's amount, down. we clearly business down navigate, grew and so naturally up we up,

future and Joseph, mostly into and mean are None East though, Middle things the slow have that forth did down, Indian, loss India, others. issue quarters. Things the COVID East to that of in field of workers Middle back traveling Pakistani I the moved are, with you the in many factor the are into

to nearby up. back in see will with activity countries, business conduct levels down there so the increasing And you ability COVID goes

too. And weather... weather it's It's

well. as weather Yes,

now got -- they are I lose just like -- forward of was let's as slip, don't the don't mean feel a was East. looks the It So bit, ago or but didn't business. that anything X moved Middle for right long I it X strong the where to we everything here months a sort there QX any there pretty say, was things lost, QX. U.S. I've Uri to during right good equivalent much now, as we're seeing

big much reason -- no didn't a QX. won't to contributor significant think just Verax So that see internationalized, uplift. year I this think we'll but system be And do I it think as

risk been you -- big experience that guys, fighting see the My question. would this is I it's -- they painful, Because night? should at guy that just think can I last about cows Why So up should not come how and ADM, until you this right? something so the in home guy. to you big keeps be that with is the case be be can

buying don't look want of in it's seen I depends the curve breach I've you that. breach Therefore for the never question it contract you at we contract it, court about how simpler situation, company, to, any go no paying, need they terminated we mean. Joseph, Well, of beneficial breached. not contract, a to

contract and to in that amounts working them have good is that we upside already review right to a the don't we the in court, in I and can spent through this and I guy, contractual I us. size, to disagreement it's gas the based resolve see of on and upon in we of merits guys the facts, based merits we're big if on the gets big have particularly the and that think and -- pretty so and is for outcome is the go to well. made places us and our them go company, upon not big need that. the it's and But think The And we're so approach of that recovery that the a with we and I'm we've facts going side

to over This to any like session. remarks. turn concludes back question-and-answer I conference closing our Gibson, for John the would

interest am continuous see are in got been the company, re-establishing about indirect shareholders links the oilfield tell and with on can't companies. bench, I we we're guys the you wait. it's our and the I worth our for how as service you I in strength channel, customers, to we've believe the I for think improvement. gotten strengthen to thankful We've Well, to discussions those

still And to a second lot importantly, look in what share And this QX, take looks from have XXXX, you are have an our of next us got is sequentially, uplift opportunity so, of that's that we're focused terms into need much a a story. and value a guys, forward ESG like Thanks me, be so it you going solution, to for flat of a business again don't of we're all green for the on. just to about great to we going to market but that strong our even have -- and things improve don't feels our market really don't beat people quarter. a story, the half we're telling how delivering we to the -- so and you to think still if talking numbers, on lot we're of much side. more how year we've is question

you This today's concludes conference. presentation. our Thank attending for

may You disconnect. now