Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2017 | Jul. 28, 2017 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | FLOTEK INDUSTRIES INC/CN/ | |
Entity Central Index Key | 928,054 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 57,332,720 |
Unaudited Condensed Consolidate
Unaudited Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 3,422 | $ 4,823 |
Accounts receivable, net of allowance for doubtful accounts of $994 and $664 at June 30, 2017 and December 31, 2016, respectively | 60,089 | 47,152 |
Inventories | 78,410 | 58,283 |
Income taxes receivable | 3,872 | 12,752 |
Assets held for sale | 7,197 | 43,900 |
Other current assets | 6,079 | 21,708 |
Total current assets | 159,069 | 188,618 |
Property and equipment, net | 74,396 | 74,691 |
Goodwill | 56,660 | 56,660 |
Deferred tax assets, net | 19,972 | 12,894 |
Other intangible assets, net | 49,080 | 50,352 |
TOTAL ASSETS | 359,177 | 383,215 |
Current liabilities: | ||
Accounts payable | 28,554 | 29,960 |
Accrued liabilities | 8,488 | 12,170 |
Interest payable | 21 | 24 |
Liabilities held for sale | 2,416 | 4,961 |
Current portion of long-term debt | 42,716 | 40,566 |
Total current liabilities | 82,195 | 87,681 |
Long-term debt, less current portion | 0 | 7,833 |
Total liabilities | 82,195 | 95,514 |
Commitments and contingencies | ||
Equity: | ||
Cumulative convertible preferred stock, $0.0001 par value, 100,000 shares authorized; no shares issued and outstanding | 0 | 0 |
Common stock, $0.0001 par value, 80,000,000 shares authorized; 60,504,613 shares issued and 57,313,766 shares outstanding at June 30, 2017; 59,684,669 shares issued and 56,972,580 shares outstanding at December 31, 2016 | 6 | 6 |
Additional paid-in capital | 331,126 | 318,392 |
Accumulated other comprehensive income (loss) | (970) | (956) |
Retained earnings (accumulated deficit) | (25,633) | (9,830) |
Treasury stock, at cost; 2,709,680 and 2,028,847 shares at June 30, 2017 and December 31, 2016, respectively | (27,905) | (20,269) |
Flotek Industries, Inc. stockholders’ equity | 276,624 | 287,343 |
Noncontrolling interests | 358 | 358 |
Total equity | 276,982 | 287,701 |
TOTAL LIABILITIES AND EQUITY | $ 359,177 | $ 383,215 |
Unaudited Condensed Consolidat3
Unaudited Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 994 | $ 664 |
Cumulative convertible preferred stock, at par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Cumulative convertible preferred stock, shares authorized (in shares) | 100,000 | 100,000 |
Cumulative convertible preferred stock, shares issued (in shares) | 0 | 0 |
Cumulative convertible preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 80,000,000 | 80,000,000 |
Common stock, shares issued (in shares) | 60,504,613 | 59,684,669 |
Common stock, shares outstanding (in shares) | 57,313,766 | 56,972,580 |
Treasury stock, shares (in shares) | 2,709,680 | 2,028,847 |
Unaudited Condensed Consolidat4
Unaudited Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Revenue | $ 85,177 | $ 64,079 | $ 165,131 | $ 127,890 |
Cost of revenue | 59,086 | 42,361 | 111,298 | 82,379 |
Gross profit | 26,091 | 21,718 | 53,833 | 45,511 |
Expenses: | ||||
Depreciation and amortization | 2,479 | 1,905 | 4,924 | 3,806 |
Research and development | 4,109 | 2,048 | 7,250 | 3,995 |
Loss (gain) on disposal of long-lived assets | 214 | (15) | 412 | (15) |
Total expenses | 27,343 | 21,562 | 55,707 | 44,987 |
(Loss) income from operations | (1,252) | 156 | (1,874) | 524 |
Other (expense) income: | ||||
Interest expense | (549) | (610) | (1,145) | (1,018) |
Other (expense) income, net | 237 | (47) | 391 | (53) |
Total other expense | (312) | (657) | (754) | (1,071) |
Loss before income taxes | (1,564) | (501) | (2,628) | (547) |
Income tax benefit | 442 | 390 | 762 | 407 |
Loss from continuing operations | (1,122) | (111) | (1,866) | (140) |
Loss from discontinued operations, net of tax | (2,704) | (2,169) | (13,937) | (32,325) |
Net loss | $ (3,826) | $ (2,280) | $ (15,803) | $ (32,465) |
Basic earnings (loss) per common share: | ||||
Continuing operations (in dollars per share) | $ (0.02) | $ 0 | $ (0.03) | $ 0 |
Discontinued operations, net of tax (in dollars per share) | (0.05) | (0.04) | (0.24) | (0.59) |
Basic earnings (loss) per common share (in dollars per share) | (0.07) | (0.04) | (0.27) | (0.59) |
Diluted earnings (loss) per common share: | ||||
Continuing operations (in dollars per share) | (0.02) | 0 | (0.03) | 0 |
Discontinued operations, net of tax (in dollars per share) | (0.05) | (0.04) | (0.24) | (0.59) |
Diluted earnings (loss) per common share (in dollars per share) | $ (0.07) | $ (0.04) | $ (0.27) | $ (0.59) |
Weighted average common shares: | ||||
Weighted average common shares used in computing basic earnings (loss) per common share (in shares) | 57,854 | 54,910 | 57,764 | 54,827 |
Weighted average common shares used in computing diluted earnings (loss) per common share (in shares) | 57,854 | 54,910 | 57,764 | 54,827 |
Corporate | ||||
Revenue | $ 0 | $ 0 | $ 0 | $ 0 |
Gross profit | 0 | 0 | 0 | 0 |
Expenses: | ||||
General, selling and administrative | 11,155 | 9,557 | 23,426 | 20,096 |
(Loss) income from operations | (11,767) | (10,114) | (24,643) | (21,148) |
Operating Segments | ||||
Expenses: | ||||
General, selling and administrative | $ 9,386 | $ 8,067 | $ 19,695 | $ 17,105 |
Unaudited Condensed Consolidat5
Unaudited Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Statement of Comprehensive Income [Abstract] | ||||
Loss from continuing operations | $ (1,122) | $ (111) | $ (1,866) | $ (140) |
Loss from discontinued operations, net of tax | (2,704) | (2,169) | (13,937) | (32,325) |
Net loss | (3,826) | (2,280) | (15,803) | (32,465) |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustment | (5) | 7 | (14) | 324 |
Comprehensive income (loss) | $ (3,831) | $ (2,273) | $ (15,817) | $ (32,141) |
Unaudited Condensed Consolidat6
Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Cash flows from operating activities: | ||
Net loss | $ (15,803) | $ (32,465) |
Loss from discontinued operations, net of tax | (13,937) | (32,325) |
Loss from continuing operations | (1,866) | (140) |
Adjustments to reconcile loss from continuing operations to net cash used in operating activities: | ||
Depreciation and amortization | 6,023 | 4,651 |
Amortization of deferred financing costs | 253 | 205 |
Loss (gain) on sale of assets | 412 | (15) |
Stock compensation expense | 6,653 | 5,128 |
Deferred income tax benefit | (7,329) | (8,076) |
Reduction in tax benefit related to share-based awards | 315 | 954 |
Changes in current assets and liabilities: | ||
Accounts receivable, net | (12,874) | (51) |
Inventories | (20,023) | (7,624) |
Income taxes receivable | 8,619 | (11,535) |
Other current assets | 14,185 | (414) |
Accounts payable | (1,418) | 3,622 |
Accrued liabilities | (180) | 11,685 |
Income taxes payable | (10) | (1,759) |
Interest payable | (3) | 74 |
Net cash used in operating activities | (7,243) | (3,295) |
Cash flows from investing activities: | ||
Capital expenditures | (4,508) | (8,238) |
Proceeds from sales of businesses | 17,490 | 0 |
Proceeds from sale of assets | 310 | 24 |
Purchase of patents and other intangible assets | (247) | (140) |
Net cash provided by (used in) investing activities | 13,045 | (8,354) |
Cash flows from financing activities: | ||
Repayments of indebtedness | (9,833) | (3,571) |
Borrowings on revolving credit facility | 224,757 | 171,397 |
Repayments on revolving credit facility | (220,607) | (153,460) |
Debt issuance costs | (106) | (147) |
Reduction in tax benefit related to share-based awards | 0 | (954) |
Purchase of treasury stock related to share-based awards | (1,335) | (609) |
Proceeds from sale of common stock | 368 | 446 |
Repurchase of common stock | (487) | 0 |
Proceeds from exercise of stock options | 20 | 134 |
Net cash (used in) provided by financing activities | (7,223) | 13,236 |
Discontinued operations: | ||
Net cash used in operating activities | (794) | (59) |
Net cash provided by investing activities | 794 | 51 |
Net cash flows used in discontinued operations | 0 | (8) |
Effect of changes in exchange rates on cash and cash equivalents | 20 | 53 |
Net (decrease) increase in cash and cash equivalents | (1,401) | 1,632 |
Cash and cash equivalents at the beginning of period | 4,823 | 2,208 |
Cash and cash equivalents at the end of period | $ 3,422 | $ 3,840 |
Unaudited Condensed Consolidat7
Unaudited Condensed Consolidated Statement of Equity - 6 months ended Jun. 30, 2017 - USD ($) $ in Thousands | Total | Common Stock | Treasury Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings (Accumulated Deficit) | Non-controlling Interests |
Beginning balance (in shares) at Dec. 31, 2016 | 59,685,000 | 2,029,000 | |||||
Beginning balance at Dec. 31, 2016 | $ 287,701 | $ 6 | $ (20,269) | $ 318,392 | $ (956) | $ (9,830) | $ 358 |
Increase (Decrease) in Equity [Roll Forward] | |||||||
Net loss | (15,803) | (15,803) | |||||
Foreign currency translation adjustment | (14) | (14) | |||||
Stock issued in payment of stock purchase plan (in shares) | (40,000) | ||||||
Stock issued under employee stock purchase plan | 368 | 368 | |||||
Common stock issued in payment of accrued liability | $ 188 | 188 | |||||
Stock options exercised (in shares) | 651,188 | 651,000 | |||||
Stock options exercised | $ 5,834 | 5,834 | |||||
Stock surrendered for exercise of stock options (in shares) | 470,000 | ||||||
Exercise of stock options by common stock surrender | $ 5,814 | $ 5,814 | |||||
Restricted stock granted (in shares) | 168,756 | 169,000 | |||||
Restricted stock forfeited (in shares) | 76,000 | ||||||
Treasury stock purchased (in shares) | 125,000 | ||||||
Treasury stock purchased | $ (1,335) | $ (1,335) | |||||
Stock compensation expense | 6,344 | 6,344 | |||||
Treasury stock purchased (in shares) | 50,000 | ||||||
Treasury stock purchased | (487) | $ (487) | |||||
Ending balance (in shares) at Jun. 30, 2017 | 60,505,000 | 2,710,000 | |||||
Ending balance at Jun. 30, 2017 | $ 276,982 | $ 6 | $ (27,905) | $ 331,126 | $ (970) | $ (25,633) | $ 358 |
Organization and Significant Ac
Organization and Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Significant Accounting Policies | Organization and Significant Accounting Policies Organization and Nature of Operations Flotek Industries, Inc. (“Flotek” or the “Company”) is a global, diversified, technology-driven company that develops and supplies chemistry and services to the oil and gas industries, and high value compounds to companies that make cleaning products, cosmetics, food and beverages, and other products that are sold in consumer and industrial markets. The Company’s oilfield business includes specialty chemistries and logistics which enable its customers in pursuing improved efficiencies in the drilling and completion of their wells. The Company also provides automated bulk material handling, loading facilities, and blending capabilities. The Company processes citrus oil to produce (1) high value compounds used as additives by companies in the flavors and fragrances markets and (2) environmentally friendly chemistries for use in numerous industries around the world, including the oil and gas (“O&G”) industry. Flotek operates in over 20 domestic and international markets. Customers include major integrated O&G companies, oilfield services companies, independent O&G companies, pressure-pumping service companies, national and state-owned oil companies, and international supply chain management companies. The Company also serves customers who purchase non-energy-related citrus oil and related products, including household and commercial cleaning product companies, fragrance and cosmetic companies, and food manufacturing companies. Flotek was initially incorporated under the laws of the Province of British Columbia on May 17, 1985. On October 23, 2001, Flotek changed its corporate domicile to the state of Delaware. Basis of Presentation The accompanying Unaudited Condensed Consolidated Financial Statements and accompanying footnotes (collectively the “Financial Statements”) reflect all adjustments, in the opinion of management, necessary for fair presentation of the financial condition and results of operations for the periods presented. All such adjustments are normal and recurring in nature. The Financial Statements, including selected notes, have been prepared in accordance with applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting and do not include all information and disclosures required by accounting principles generally accepted in the United States of America (“U.S. GAAP”) for comprehensive financial statement reporting. These interim Financial Statements should be read in conjunction with the audited consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016 (“Annual Report”). A copy of the Annual Report is available on the SEC’s website, www.sec.gov , under the Company’s ticker symbol (“FTK”) or on Flotek’s website, www.flotekind.com . The results of operations for the three and six months ended June 30, 2017 , are not necessarily indicative of the results to be expected for the year ending December 31, 2017 . During the fourth quarter of 2016, the Company classified the Drilling Technologies and Production Technologies segments as held for sale based on management’s intention to sell these businesses. The Company’s historical financial statements have been revised to present the operating results of the Drilling Technologies and Production Technologies segments as discontinued operations. The results of operations of Drilling Technologies and Production Technologies are presented as “Loss from discontinued operations” in the statement of operations and the related cash flows of these segments has been reclassified to discontinued operations for all periods presented. The assets and liabilities of the Drilling Technologies and Production Technologies segments have been reclassified to “Assets held for sale” and “Liabilities held for sale”, respectively, in the consolidated balance sheets for all periods presented. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and reported amounts of revenue and expenses. Actual results could differ from these estimates. Reclassifications Certain prior period amounts have been reclassified to conform to the current period presentation. The reclassifications did not impact net income (loss). |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 6 Months Ended |
Jun. 30, 2017 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Application of New Accounting Standards Effective January 1, 2017, the Company adopted the accounting guidance in Accounting Standards Update (“ASU”) No. 2015-11, “ Simplifying the Measurement of Inventory .” This standard requires management to measure inventory at the lower of cost or net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Implementation of this standard did not have a material effect on the consolidated financial statements and related disclosures. Effective January 1, 2017, the Company adopted the accounting guidance in ASU No. 2015-17, “ Balance Sheet Classification of Deferred Taxes .” This standard eliminated the requirement for organizations to present deferred tax assets and liabilities as current and noncurrent in a classified balance sheet. Instead, organizations are now required to classify all deferred tax assets and liabilities as noncurrent. Implementation of this standard did not have a material effect on the consolidated financial statements and related disclosures. The Company applied this standard retrospectively and, therefore, prior periods presented were adjusted. Effective January 1, 2017, the Company adopted the accounting guidance in ASU No. 2016-09, “ Improvements to Employee Share-Based Payment Accounting .” This standard simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The new guidance requires excess tax benefits and deficiencies to be recognized in the income statement rather than in additional paid-in capital. As a result of applying this change, the Company recognized $0.3 million of excess tax benefit in the provision for incomes taxes during the six months ended June 30, 2017 . The Company applied this standard prospectively, where applicable, and, therefore, prior periods presented were not adjusted. New Accounting Requirements and Disclosures In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2014-09, “ Revenue from Contracts with Customers .” The ASU will supersede most of the existing revenue recognition requirements in U.S. GAAP and will require entities to recognize revenue at an amount that reflects the consideration to which the Company expects to be entitled in exchange for transferring goods or services to a customer. The new standard also requires significantly expanded disclosures regarding the qualitative and quantitative information of an entity’s nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. In August 2015, the FASB issued ASU No. 2015-14, which deferred the effective date by one year to annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. In March 2016, the FASB issued ASU No. 2016-08, which improves the operability and understandability of the implementation guidance on principal versus agent considerations. In April 2016, the FASB issued ASU No. 2016-10, which clarifies identifying performance obligations and the licensing implementation guidance. In May 2016, the FASB issued ASU No. 2016-11, which rescinds certain SEC Staff Observer comments that are codified in Topic 605, Revenue Recognition, effective upon adoption of ASU 2014-09, and ASU No. 2016-12, which reduces the potential for diversity in practice at initial application and reduces the cost and complexity of applying Topic 606 both at transition and on an ongoing basis. In December 2016, the FASB issued ASU No. 2016-20, which provides technical corrections and improvements to the original guidance issued. The Company intends to adopt the new standard in the first quarter of 2018 using the modified retrospective method. The Company has identified key contract types representative of its business for comparing historical accounting policies and practices to the new standard and is continuing to evaluate the impact these pronouncements will have on the consolidated financial statements and related disclosures. In February 2016, the FASB issued ASU No. 2016-02, “ Leases .” This standard requires the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous U.S. GAAP. The pronouncement is effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period and should be applied using a modified retrospective transition approach, with early application permitted. The Company is currently evaluating the impact the pronouncement will have on the consolidated financial statements and related disclosures. In June 2016, the FASB issued ASU No. 2016-13, “ Measurement of Credit Losses on Financial Instruments .” This standard replaces the incurred loss impairment methodology in current U.S. GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The pronouncement is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, with early adoption for the fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently evaluating the impact the pronouncement will have on the consolidated financial statements and related disclosures. In August 2016, the FASB issued ASU No. 2016-15, “ Classification of Certain Cash Receipts and Cash Payments. ” This standard addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice. The pronouncement is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact the pronouncement will have on the consolidated financial statements and related disclosures. In January 2017, the FASB issued ASU No. 2017-01, “ Clarifying the Definition of a Business. ” This standard provides additional guidance on whether an integrated set of assets and activities constitutes a business. The pronouncement is effective for annual periods beginning after December 15, 2017, including interim periods within those periods, with early adoption permitted in specific instances. The Company is currently evaluating the impact the pronouncement will have on the consolidated financial statements and related disclosures. In January 2017, the FASB issued ASU No. 2017-04, “ Simplifying the Test for Goodwill Impairment .” This standard eliminates Step 2 from the goodwill impairment test. An entity will now recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. The pronouncement is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact the pronouncement will have on the consolidated financial statements and related disclosures. In May 2017, the FASB issued ASU No. 2017-09, “ Scope of Modification Accounting .” This standard provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting under Topic 718. The pronouncement is effective for annual periods beginning after December 15, 2017, including interim periods within those periods, with early adoption permitted. The Company is currently evaluating the impact the pronouncement will have on the consolidated financial statements and related disclosures. |
Discontinued Operations
Discontinued Operations | 6 Months Ended |
Jun. 30, 2017 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | Discontinued Operations During the fourth quarter 2016, the Company initiated a strategic restructuring of its business to enable a greater focus on its core businesses in energy chemistry and consumer and industrial chemistry. The Company executed a plan to sell or otherwise dispose of the Drilling Technologies and Production Technologies segments. An investment banking advisory services firm was engaged and actively marketed these segments. The Company met all of the criteria to classify the Drilling Technologies and Production Technologies segments’ assets and liabilities as held for sale in the fourth quarter 2016. Effective December 31, 2016, the Company classified the assets, liabilities, and results of operations for these two segments as “Discontinued Operations” for all periods presented. Disposal of the Drilling Technologies and Production Technologies reporting segments represented a strategic shift that would have a major effect on the Company’s operations and financial results. On May 22, 2017 , the Company completed the sale of substantially all of the assets and transfer of certain specified liabilities and obligations of the Company’s Drilling Technologies segment to National Oilwell Varco, L.P. (“NOV”) for $17.0 million in cash consideration, subject to normal working capital adjustments, with $1.5 million held back by NOV for up to 18 months to satisfy potential indemnification claims. On May 23, 2017 , the Company completed the sale of substantially all of the assets and transfer of certain specified liabilities and obligations of the Company’s Production Technologies segment to Raptor Lift Solutions, LLC (“Raptor Lift”) for $2.9 million in cash consideration, with $0.4 million held back by Raptor Lift to satisfy potential indemnification claims. The following summarized financial information has been segregated from continuing operations and reported as Discontinued Operations for the three and six months ended June 30, 2017 and 2016 (in thousands): Three months ended June 30, Six months ended June 30, 2017 2016 2017 2016 Drilling Technologies Revenue $ 4,737 $ 6,372 $ 11,534 $ 12,829 Cost of revenue (2,603 ) (4,155 ) (7,259 ) (9,587 ) Selling, general and administrative (2,740 ) (3,495 ) (5,771 ) (8,155 ) Depreciation and amortization — (337 ) — (1,085 ) Research and development (6 ) (22 ) (6 ) (65 ) Gain (loss) on disposal of long-lived assets (12 ) 19 62 16 Impairment of inventory and long-lived assets — — — (36,522 ) Loss from operations (624 ) (1,618 ) (1,440 ) (42,569 ) Other expense (46 ) (69 ) (117 ) (243 ) Loss on sale of businesses (1,365 ) — (1,365 ) — Loss on write-down of assets held for sale (272 ) — (6,831 ) — Loss before income taxes (2,307 ) (1,687 ) (9,753 ) (42,812 ) Income tax benefit 158 456 3,147 14,881 Net loss from discontinued operations $ (2,149 ) $ (1,231 ) $ (6,606 ) $ (27,931 ) Production Technologies Revenue $ 849 $ 1,868 $ 4,002 $ 3,889 Cost of revenue (707 ) (1,882 ) (3,189 ) (3,793 ) Selling, general and administrative (802 ) (897 ) (1,675 ) (2,051 ) Depreciation and amortization — (149 ) — (298 ) Research and development (92 ) (201 ) (363 ) (467 ) Loss on disposal of long-lived assets — — — (59 ) Impairment of inventory — — — (3,913 ) Loss from operations (752 ) (1,261 ) (1,225 ) (6,692 ) Other expense (16 ) (23 ) (52 ) (44 ) Gain on sale of businesses 171 — 171 — Loss on write-down of assets held for sale — — (9,718 ) — Loss before income taxes (597 ) (1,284 ) (10,824 ) (6,736 ) Income tax benefit 42 346 3,493 2,342 Net loss from discontinued operations $ (555 ) $ (938 ) $ (7,331 ) $ (4,394 ) Drilling Technologies and Production Technologies Loss from discontinued operations, net of tax $ (2,704 ) $ (2,169 ) $ (13,937 ) $ (32,325 ) The assets and liabilities held for sale on the Consolidated Balance Sheets as of June 30, 2017 and December 31, 2016 are as follows (in thousands): Drilling Technologies Production Technologies June 30, 2017 December 31, 2016 June 30, 2017 December 31, 2016 Assets: Accounts receivable, net $ 2,448 $ 5,072 $ 539 $ 1,784 Inventories 1,942 9,078 — 8,115 Other current assets 1,595 278 697 370 Long-term receivable — — — 4,179 Property and equipment, net 880 11,277 — 3,978 Goodwill — 15,333 — 1,689 Other intangible assets, net — 7,395 — 484 Assets held for sale 6,865 48,433 1,236 20,599 Valuation allowance (904 ) (18,971 ) — (6,161 ) Assets held for sale, net $ 5,961 $ 29,462 $ 1,236 $ 14,438 Liabilities: Accounts payable $ 388 $ 2,472 $ 40 $ 914 Accrued liabilities 1,607 1,190 381 385 Liabilities held for sale $ 1,995 $ 3,662 $ 421 $ 1,299 |
Impairment of Inventory and Lon
Impairment of Inventory and Long-Lived Assets for Discontinued Operations | 6 Months Ended |
Jun. 30, 2017 | |
Asset Impairment Charges [Abstract] | |
Impairment of Inventory and Long-Lived Assets for Discontinued Operations | Impairment of Inventory and Long-Lived Assets for Discontinued Operations During the three months ended March 31, 2016 , as a result of changes in the oil and gas industry that occurred since the beginning of 2016 and the corresponding impact on the Company’s business outlook, the Company evaluated the direction of its business activities. Crude oil prices, which appeared to have stabilized during the fourth quarter of 2015, fell further during the first quarter of 2016, decreasing approximately 21% from average prices seen in the fourth quarter of 2015. The U.S. drilling rig count declined from 698 at December 31, 2015 to 450 at April 1, 2016, a decline of 35.5% . Due to the decreased rig activity and its impact on management’s expectations for future market activity, the Company further refocused operations of its Drilling Technologies segment. The Company decided to exit the business of building and repairing motors in all domestic markets. In addition, changes in drilling technique, including further escalation of the move to a dominance of pad drilling, reduced the marketability of certain other inventory items. The focus of the Production Technologies segment was shifted to its new technologies for electric submersible pumps for the oil and gas industry and for hydraulic pumping units. Inventory associated with older technologies for these items has been evaluated for impairment. As a result of these changes in focus and projected declines in asset utilization, the Company recorded a pre-tax impairment of inventories as noted below. Changes in the business climate noted above and increasing operating losses experienced within the Drilling Technologies and Production Technologies segments during the three months ended March 31, 2016 , caused the Company to test asset groups within these two segments for recoverability. Recoverability of the carrying value of the asset groups was based upon estimated future cash flows while taking into consideration various assumptions and estimates, including future use of the assets, remaining useful life of the assets, and eventual disposition of the assets. Undiscounted estimated cash flows of two asset groups associated with domestic operations in the Drilling Technologies segment did not exceed the carrying value of the respective asset groups. Therefore, the Company performed an analysis of discounted future cash flows to determine the fair value of each of these two asset groups. As a result of this testing, the Company recorded a pre-tax impairment of long-lived assets as noted below. The Company recorded impairment charges during the three months ended March 31, 2016 , as follows (in thousands): Drilling Technologies: Inventories $ 12,653 Long-lived assets: Property and equipment 14,642 Intangible assets other than goodwill 9,227 Production Technologies: Inventories 3,913 Total impairment $ 40,435 Based on the changes in the business climate discussed above and continuing operating losses experienced during the three months ended March 31, 2016 and June 30, 2016 , goodwill within the Teledrift and Production Technologies reporting units was tested for impairment during these periods. However, no impairments of goodwill were recorded based upon this testing. |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 6 Months Ended |
Jun. 30, 2017 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Cash Flow Information | Supplemental Cash Flow Information Supplemental cash flow information is as follows (in thousands): Six months ended June 30, 2017 2016 Supplemental non-cash investing and financing activities: Value of common stock issued in payment of accrued liability $ 188 $ — Exercise of stock options by common stock surrender 5,814 — Supplemental cash payment information: Interest paid $ 1,069 $ 921 Income taxes received, net of payments (paid, net of refunds) 9,489 (3,429 ) |
Revenue
Revenue | 6 Months Ended |
Jun. 30, 2017 | |
Revenue [Abstract] | |
Revenue | Revenue The Company differentiates revenue and cost of revenue based on whether the source of revenue is attributable to products or services. Revenue and cost of revenue by source are as follows (in thousands): Three months ended June 30, Six months ended June 30, 2017 2016 2017 2016 Revenue: Products $ 83,835 $ 62,561 $ 162,350 $ 124,560 Services 1,342 1,518 2,781 3,330 $ 85,177 $ 64,079 $ 165,131 $ 127,890 Cost of revenue: Products $ 57,052 $ 41,692 $ 107,741 $ 80,936 Services 1,522 172 2,458 598 Depreciation 512 497 1,099 845 $ 59,086 $ 42,361 $ 111,298 $ 82,379 |
Inventories
Inventories | 6 Months Ended |
Jun. 30, 2017 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories are as follows (in thousands): June 30, 2017 December 31, 2016 Raw materials $ 42,668 $ 28,626 Work-in-process 2,933 2,918 Finished goods 32,809 26,739 Inventories $ 78,410 $ 58,283 |
Property and Equipment
Property and Equipment | 6 Months Ended |
Jun. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment are as follows (in thousands): June 30, 2017 December 31, 2016 Land $ 6,551 $ 5,837 Buildings and leasehold improvements 43,052 42,986 Machinery, equipment and rental tools 38,213 36,187 Equipment in progress 5,091 3,235 Furniture and fixtures 2,026 1,969 Transportation equipment 2,449 3,059 Computer equipment and software 12,069 11,844 Property and equipment 109,451 105,117 Less accumulated depreciation (35,055 ) (30,426 ) Property and equipment, net $ 74,396 $ 74,691 Depreciation expense, including expense recorded in cost of revenue, totaled $2.3 million and $1.7 million for the three months ended June 30, 2017 and 2016 , respectively, and $4.7 million and $3.2 million for the six months ended June 30, 2017 and 2016 , respectively. During the three and six months ended June 30, 2017 and 2016 , no impairments were recognized related to property and equipment. |
Goodwill
Goodwill | 6 Months Ended |
Jun. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill Changes in the carrying value of goodwill for each reporting unit are as follows (in thousands): Energy Chemistry Technologies Consumer and Industrial Chemistry Technologies Total Balance at December 31, 2016 $ 37,180 $ 19,480 $ 56,660 Goodwill impairment recognized — — — Balance at June 30, 2017 $ 37,180 $ 19,480 $ 56,660 During the three and six months ended June 30, 2017 and 2016 , no impairments of goodwill were recognized. |
Other Intangible Assets
Other Intangible Assets | 6 Months Ended |
Jun. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Other Intangible Assets | Other Intangible Assets Other intangible assets are as follows (in thousands): June 30, 2017 December 31, 2016 Cost Accumulated Amortization Cost Accumulated Amortization Finite-lived intangible assets: Patents and technology $ 17,099 $ 5,060 $ 16,815 $ 4,537 Customer lists 30,877 7,343 30,877 6,518 Trademarks and brand names 1,517 1,092 1,467 1,069 Total finite-lived intangible assets acquired 49,493 13,495 49,159 12,124 Deferred financing costs 1,822 370 1,804 117 Total amortizable intangible assets 51,315 $ 13,865 50,963 $ 12,241 Indefinite-lived intangible assets: Trademarks and brand names 11,630 11,630 Total other intangible assets $ 62,945 $ 62,593 Carrying value: Other intangible assets, net $ 49,080 $ 50,352 Finite-lived intangible assets acquired are amortized on a straight-line basis over two to 20 years . Amortization of finite-lived intangible assets acquired totaled $0.7 million and $0.7 million for the three months ended June 30, 2017 and 2016 , respectively, and $1.4 million and $1.4 million for the six months ended June 30, 2017 and 2016 , respectively. Amortization of deferred financing costs was $0.1 million and $0.1 million for the three months ended June 30, 2017 and 2016 , respectively, and $0.3 million and $0.2 million for the six months ended June 30, 2017 and 2016 , respectively. |
Long-Term Debt and Credit Facil
Long-Term Debt and Credit Facility | 6 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
Long-Term Debt and Credit Facility | Long-Term Debt and Credit Facility Long-term debt is as follows (in thousands): June 30, 2017 December 31, 2016 Long-term debt: Borrowings under revolving credit facility $ 42,716 $ 38,566 Term loan — 9,833 Total long-term debt 42,716 48,399 Less current portion of long-term debt (42,716 ) (40,566 ) Long-term debt, less current portion $ — $ 7,833 Credit Facility On May 10, 2013 , the Company and certain of its subsidiaries (the “Borrowers”) entered into an Amended and Restated Revolving Credit, Term Loan and Security Agreement (the “Credit Facility”) with PNC Bank, National Association (“PNC Bank”). The Company may borrow under the Credit Facility for working capital, permitted acquisitions, capital expenditures and other corporate purposes. The Credit Facility, as amended, continues in effect until May 10, 2020. Under terms of the Credit Facility, as amended, the Company has total borrowing availability of $65 million ; initially, up to $55 million under a revolving credit facility with borrowing of $10 million under a term loan. The revolving credit facility limit will increase by each term loan principal payment, therefore, total borrowing capacity will remain at $65 million throughout the term of the Credit Facility. The Credit Facility is secured by substantially all of the Company’s domestic real and personal property, including accounts receivable, inventory, land, buildings, equipment and other intangible assets. The Credit Facility contains customary representations, warranties, and both affirmative and negative covenants. The Company was in compliance with all debt covenants at June 30, 2017 . The Credit Facility restricts the payment of cash dividends on common stock and limits the amount that may be used to repurchase common stock and preferred stock. In the event of default, PNC Bank may accelerate the maturity date of any outstanding amounts borrowed under the Credit Facility. The Credit Facility contains financial covenants to maintain a fixed charge coverage ratio and a leverage ratio, as well as establishes an annual limit on capital expenditures. The fixed charge coverage ratio is the ratio of (a) earnings before interest, taxes, depreciation, and amortization (“EBITDA”), adjusted for non-cash stock-based compensation and the loss from discontinued operations, less cash paid for taxes during the period to (b) all debt payments during the period. The fixed charge coverage ratio requirement began for the quarter ended March 31, 2017 at 1.00 to 1.00 and increases to 1.10 to 1.00 for the year ending December 31, 2017, and thereafter. The leverage ratio (funded debt to adjusted EBITDA) requirement begins for the six months ending June 30, 2017, at not greater than 5.50 to 1.10 and reduces to not greater than 4.00 to 1.00 for the year ending March 31, 2018, and thereafter. The annual limit on capital expenditures for 2017 is $20 million . The annual limit on capital expenditures for 2017 is reduced if the undrawn availability under the revolving credit facility falls below $10 million at month-end for April, May, or June 2017 or below $15 million at any other month-end. Beginning with fiscal year 2017, the Credit Facility includes a provision that 25% of EBITDA minus cash paid for taxes, dividends, debt payments, and unfunded capital expenditures, not to exceed $3.0 million for any year, be paid on the outstanding balance within 60 days of the fiscal year end. Each of the Company’s domestic subsidiaries is fully obligated for Credit Facility indebtedness as a borrower or as a guarantor. (a) Revolving Credit Facility Under the revolving credit facility, the Company may initially borrow up to $55 million through May 10, 2020 . This includes a sublimit of $10 million that may be used for letters of credit. As of May 22, 2017 , the revolving credit facility limit increased to $65 million upon payment in full of the outstanding term loan principal balance. The revolving credit facility is secured by substantially all of the Company’s domestic accounts receivable and inventory. At June 30, 2017 , eligible accounts receivable and inventory securing the revolving credit facility provided total borrowing capacity of $64.9 million under the revolving credit facility. Available borrowing capacity, net of outstanding borrowings, was $22.2 million at June 30, 2017 . The interest rate on advances under the revolving credit facility varies based on the fixed charge coverage ratio. Rates range (a) between PNC Bank’s base lending rate plus 1.5% to 2.0% or (b) between the London Interbank Offered Rate (LIBOR) plus 2.5% to 3.0% . PNC Bank’s base lending rate was 4.25% at June 30, 2017 . The Company is required to pay a monthly facility fee of 0.25% per annum, on any unused amount under the commitment based on daily averages. At June 30, 2017 , $42.7 million was outstanding under the revolving credit facility, with $7.7 million borrowed as base rate loans at an interest rate of 5.75% and $35.0 million borrowed as LIBOR loans at an interest rate of 3.73% . Borrowing under the revolving credit agreement is classified as current debt as a result of the required lockbox arrangement and the subjective acceleration clause. (b) Term Loan The amount borrowed under the term loan was reset to $10 million effective as of September 30, 2016 . Monthly principal payments of $0.2 million were required. On May 22, 2017 , the Company repaid the outstanding balance of the term loan and the liens on land, buildings, equipment, and other intangible assets were released. |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 6 Months Ended |
Jun. 30, 2017 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) Per Share | Earnings (Loss) Per Share Basic earnings (loss) per common share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding for the period. Diluted earnings (loss) per common share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding combined with dilutive common share equivalents outstanding, if the effect is dilutive. Potentially dilutive securities were excluded from the calculation of diluted loss per share for the three and six months ended June 30, 2017 and 2016 , since including them would have an anti-dilutive effect on loss per share due to the net loss incurred during the period. Securities convertible into shares of common stock that were not considered in the diluted loss per share calculations were 12,100 stock options and 1.3 million restricted stock units for the three and six months ended June 30, 2017 , and 0.7 million stock options and 0.8 million restricted stock units for the three and six months ended June 30, 2016 . Basic and diluted earnings (loss) per common share are as follows (in thousands, except per share data): Three months ended June 30, Six months ended June 30, 2017 2016 2017 2016 Loss from continuing operations $ (1,122 ) $ (111 ) $ (1,866 ) $ (140 ) Loss from discontinued operations, net of tax (2,704 ) (2,169 ) (13,937 ) (32,325 ) Net loss - Basic and Diluted $ (3,826 ) $ (2,280 ) $ (15,803 ) $ (32,465 ) Weighted average common shares outstanding - Basic 57,854 54,910 57,764 54,827 Assumed conversions: Incremental common shares from stock options — — — — Incremental common shares from restricted stock units — — — — Weighted average common shares outstanding - Diluted 57,854 54,910 57,764 54,827 Basic earnings (loss) per common share: Continuing operations $ (0.02 ) $ — $ (0.03 ) $ — Discontinued operations, net of tax (0.05 ) (0.04 ) (0.24 ) (0.59 ) Basic earnings (loss) per common share $ (0.07 ) $ (0.04 ) $ (0.27 ) $ (0.59 ) Diluted earnings (loss) per common share: Continuing operations $ (0.02 ) $ — $ (0.03 ) $ — Discontinued operations, net of tax (0.05 ) (0.04 ) (0.24 ) (0.59 ) Diluted earnings (loss) per common share $ (0.07 ) $ (0.04 ) $ (0.27 ) $ (0.59 ) |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Fair value is defined as the amount that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company categorizes financial assets and liabilities into the three levels of the fair value hierarchy. The hierarchy prioritizes the inputs to valuation techniques used to measure fair value and bases categorization within the hierarchy on the lowest level of input that is available and significant to the fair value measurement. • Level 1 — Quoted prices in active markets for identical assets or liabilities; • Level 2 — Observable inputs other than Level 1, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and • Level 3 — Significant unobservable inputs that are supported by little or no market activity or that are based on the reporting entity’s assumptions about the inputs. Fair Value of Other Financial Instruments The carrying amounts of certain financial instruments, including cash and cash equivalents, accounts receivable, accounts payable, and accrued expenses, approximate fair value due to the short-term nature of these accounts. The Company had no cash equivalents at June 30, 2017 or December 31, 2016 . The carrying value and estimated fair value of the Company’s long-term debt are as follows (in thousands): June 30, 2017 December 31, 2016 Carrying Value Fair Value Carrying Value Fair Value Term loan $ — $ — $ 9,833 $ 9,833 Borrowings under revolving credit facility 42,716 42,716 38,566 38,566 The carrying value of the term loan and borrowings under the revolving credit facility approximate their fair value because the interest rates are variable. Assets Measured at Fair Value on a Nonrecurring Basis The Company’s non-financial assets, including property and equipment, goodwill, and other intangible assets are measured at fair value on a non-recurring basis and are subject to fair value adjustment in certain circumstances. No impairments of any of these assets were recognized during the three and six months ended June 30, 2017 and 2016 . |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes A reconciliation of the U.S. federal statutory tax rate to the Company’s effective income tax rate is as follows: Three months ended June 30, Six months ended June 30, 2017 2016 2017 2016 U.S. federal statutory tax rate (35.0 )% (35.0 )% (35.0 )% (35.0 )% State income taxes, net of federal benefit (4.8 ) (4.8 ) (3.8 ) (4.7 ) Non-U.S. income taxed at different rates (0.1 ) (40.8 ) 0.1 (37.2 ) Excess tax benefit related to stock-based awards 13.4 — 10.7 — Other (1.8 ) 2.8 (1.0 ) 2.5 Effective income tax rate (28.3 )% (77.8 )% (29.0 )% (74.4 )% Fluctuations in effective tax rates have historically been impacted by permanent tax differences with no associated income tax impact, changes in state apportionment factors, including the effect on state deferred tax assets and liabilities, and non-U.S. income taxed at different rates. Changes in the effective tax rate during the three and six months ended June 30, 2017 , included the Company implementing ASU No. 2016-09 which requires accounting for excess tax benefits and tax deficiencies as discrete items in the period in which they occur. In January 2017, the Internal Revenue Service notified the Company that it will examine the Company’s federal tax returns for the year ended December 31, 2014. No adjustments have been asserted, and management believes that sustained adjustments, if any, would not have a material effect on the Company’s financial position, results of operations, or liquidity. |
Common Stock
Common Stock | 6 Months Ended |
Jun. 30, 2017 | |
Equity [Abstract] | |
Common Stock | Common Stock The Company’s Certificate of Incorporation, as amended November 9, 2009, authorizes the Company to issue up to 80 million shares of common stock, par value $0.0001 per share, and 100,000 shares of one or more series of preferred stock, par value $0.0001 per share. A reconciliation of changes in common shares issued during the six months ended June 30, 2017 is as follows: Shares issued at December 31, 2016 59,684,669 Issued as restricted stock award grants 168,756 Issued upon exercise of stock options 651,188 Shares issued at June 30, 2017 60,504,613 Stock Repurchase Program In November 2012, the Company’s Board of Directors authorized the repurchase of up to $25 million of the Company’s common stock. Repurchases may be made in the open market or through privately negotiated transactions. During the three and six months ended June 30, 2017 , the Company repurchased 50,000 shares of its outstanding common stock on the open market at a cost of $0.5 million , inclusive of transaction costs, or an average price of $9.76 per share. During the three and six months ended June 30, 2016 , the Company did not repurchase any shares of its outstanding common stock. In June 2015, the Company’s Board of Directors authorized the repurchase of up to an additional $50 million of the Company’s common stock. Repurchases may be made in the open market or through privately negotiated transactions. Through June 30, 2017 , the Company has not repurchased any of its common stock under this authorization. As of June 30, 2017 , the Company has $54.4 million remaining under its share repurchase programs. A covenant under the Company’s Credit Facility limits the amount that may be used to repurchase the Company’s common stock. As of June 30, 2017 , this covenant limits additional share repurchases to $4.4 million . |
Business Segment, Geographic an
Business Segment, Geographic and Major Customer Information | 6 Months Ended |
Jun. 30, 2017 | |
Segment Reporting [Abstract] | |
Business Segment, Geographic and Major Customer Information | Business Segment, Geographic and Major Customer Information Segment Information Operating segments are defined as components of an enterprise for which separate financial information is available that is regularly evaluated by chief operating decision-makers in deciding how to allocate resources and assess performance. The operations of the Company are categorized into two reportable segments: Energy Chemistry Technologies and Consumer and Industrial Chemistry Technologies. • Energy Chemistry Technologies designs, develops, manufactures, packages, and markets specialty chemistries used in oil and natural gas well drilling, cementing, completion, and stimulation. In addition, the Company’s chemistries are used in specialized enhanced and improved oil recovery markets. Activities in this segment also include construction and management of automated material handling facilities and management of loading facilities and blending operations for oilfield services companies. • Consumer and Industrial Chemistry Technologies designs, develops, and manufactures products that are sold to companies in the flavor and fragrance industry and the specialty chemical industry. These technologies are used by beverage and food companies, fragrance companies, and companies providing household and industrial cleaning products. The Company evaluates performance based upon a variety of criteria. The primary financial measure is segment operating income. Various functions, including certain sales and marketing activities and general and administrative activities, are provided centrally by the corporate office. Costs associated with corporate office functions, other corporate income and expense items, and income taxes are not allocated to reportable segments. Summarized financial information of the reportable segments is as follows (in thousands): As of and for the three months ended June 30, Energy Chemistry Technologies Consumer and Industrial Chemistry Technologies Corporate and Other Total 2017 Net revenue from external customers $ 65,875 $ 19,302 $ — $ 85,177 Gross profit 22,804 3,287 — 26,091 Income (loss) from operations 9,299 1,216 (11,767 ) (1,252 ) Depreciation and amortization 1,795 583 613 2,991 Capital expenditures 1,956 397 278 2,631 2016 Net revenue from external customers $ 43,385 $ 20,694 $ — $ 64,079 Gross profit 17,660 4,058 — 21,718 Income (loss) from operations 7,584 2,686 (10,114 ) 156 Depreciation and amortization 1,237 608 557 2,402 Capital expenditures 3,685 204 559 4,448 As of and for the six months ended June 30, Energy Chemistry Technologies Consumer and Industrial Chemistry Technologies Corporate and Other Total 2017 Net revenue from external customers $ 126,640 $ 38,491 $ — $ 165,131 Gross profit 45,106 8,727 — 53,833 Income (loss) from operations 17,848 4,921 (24,643 ) (1,874 ) Depreciation and amortization 3,644 1,162 1,217 6,023 Capital expenditures 2,470 897 1,141 4,508 2016 Net revenue from external customers $ 88,064 $ 39,826 $ — $ 127,890 Gross profit 36,429 9,082 — 45,511 Income (loss) from operations 15,597 6,075 (21,148 ) 524 Depreciation and amortization 2,480 1,118 1,053 4,651 Capital expenditures 6,699 346 1,193 8,238 Assets of the Company by reportable segments are as follows (in thousands): June 30, 2017 December 31, 2016 Energy Chemistry Technologies $ 195,963 $ 184,328 Consumer and Industrial Chemistry Technologies 117,037 98,105 Corporate and Other 38,980 56,882 Total segments 351,980 339,315 Held for sale 7,197 43,900 Total assets $ 359,177 $ 383,215 Geographic Information Revenue by country is based on the location where services are provided and products are used. No individual country other than the United States (“U.S.”) accounted for more than 10% of revenue. Revenue by geographic location is as follows (in thousands): Three months ended June 30, Six months ended June 30, 2017 2016 2017 2016 U.S. $ 71,836 $ 49,381 $ 136,485 $ 101,987 Other countries 13,341 14,698 28,646 25,903 Total $ 85,177 $ 64,079 $ 165,131 $ 127,890 Long-lived assets held in countries other than the U.S. are not considered material to the consolidated financial statements. Major Customers Revenue from major customers, as a percentage of consolidated revenue, is as follows: Three months ended June 30, Six months ended June 30, 2017 2016 2017 2016 Customer A 13.3 % 17.5 % 12.7 % 20.7 % Customer B 10.1 % 13.3 % 9.9 % 12.8 % Over 95% of the revenue from these customers was for sales in the Energy Chemistry Technologies segment. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Class Action Litigation On March 30, 2017, the U.S. District Court for the Southern District of Texas granted the Company’s motion to dismiss the four consolidated putative securities class action lawsuits that were filed in November 2015, against the Company and certain of its officers. The lawsuits were previously consolidated into a single case, and a consolidated amended complaint had been filed. The consolidated amended complaint asserted that the Company made false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. The complaint sought an award of damages in an unspecified amount on behalf of a putative class consisting of persons who purchased the Company’s common stock between October 23, 2014 and November 9, 2015, inclusive. The lead plaintiff appealed the District Court’s decision granting the motion to dismiss. In January 2016, three derivative lawsuits were filed, two in the District Court of Harris County, Texas (which have since been consolidated into one case) and one in the United States District Court for the Southern District of Texas, on behalf of the Company against certain of its officers and its current directors. The lawsuits allege violations of law, breaches of fiduciary duty, and unjust enrichment against the defendants. The Company believes the lawsuits are without merit and intends to vigorously defend against all claims asserted. Discovery has not yet commenced. At this time, the Company is unable to reasonably estimate the outcome of this litigation. In addition, as previously disclosed, the U.S. Securities and Exchange Commission has opened an inquiry related to similar issues to those raised in the above-described litigation. Other Litigation The Company is subject to routine litigation and other claims that arise in the normal course of business. Management is not aware of any pending or threatened lawsuits or proceedings that are expected to have a material effect on the Company’s financial position, results of operations or liquidity. Concentrations and Credit Risk The majority of the Company’s revenue is derived from the oil and gas industry. Customers include major oilfield services companies, major integrated oil and natural gas companies, independent oil and natural gas companies, pressure pumping service companies, and state-owned national oil companies. This concentration of customers in one industry increases credit and business risks. The Company is subject to concentrations of credit risk within trade accounts receivable, as the Company does not generally require collateral as support for trade receivables. In addition, the majority of the Company’s cash is maintained at a major financial institution and balances often exceed insurable amounts. |
Organization and Significant 25
Organization and Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying Unaudited Condensed Consolidated Financial Statements and accompanying footnotes (collectively the “Financial Statements”) reflect all adjustments, in the opinion of management, necessary for fair presentation of the financial condition and results of operations for the periods presented. All such adjustments are normal and recurring in nature. The Financial Statements, including selected notes, have been prepared in accordance with applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting and do not include all information and disclosures required by accounting principles generally accepted in the United States of America (“U.S. GAAP”) for comprehensive financial statement reporting. These interim Financial Statements should be read in conjunction with the audited consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016 (“Annual Report”). A copy of the Annual Report is available on the SEC’s website, www.sec.gov , under the Company’s ticker symbol (“FTK”) or on Flotek’s website, www.flotekind.com . The results of operations for the three and six months ended June 30, 2017 , are not necessarily indicative of the results to be expected for the year ending December 31, 2017 . |
Discontinued Operations | During the fourth quarter of 2016, the Company classified the Drilling Technologies and Production Technologies segments as held for sale based on management’s intention to sell these businesses. The Company’s historical financial statements have been revised to present the operating results of the Drilling Technologies and Production Technologies segments as discontinued operations. The results of operations of Drilling Technologies and Production Technologies are presented as “Loss from discontinued operations” in the statement of operations and the related cash flows of these segments has been reclassified to discontinued operations for all periods presented. The assets and liabilities of the Drilling Technologies and Production Technologies segments have been reclassified to “Assets held for sale” and “Liabilities held for sale”, respectively, in the consolidated balance sheets for all periods presented. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and reported amounts of revenue and expenses. Actual results could differ from these estimates. |
Reclassifications | Reclassifications Certain prior period amounts have been reclassified to conform to the current period presentation. The reclassifications did not impact net income (loss). |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Application of New Accounting Standards Effective January 1, 2017, the Company adopted the accounting guidance in Accounting Standards Update (“ASU”) No. 2015-11, “ Simplifying the Measurement of Inventory .” This standard requires management to measure inventory at the lower of cost or net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Implementation of this standard did not have a material effect on the consolidated financial statements and related disclosures. Effective January 1, 2017, the Company adopted the accounting guidance in ASU No. 2015-17, “ Balance Sheet Classification of Deferred Taxes .” This standard eliminated the requirement for organizations to present deferred tax assets and liabilities as current and noncurrent in a classified balance sheet. Instead, organizations are now required to classify all deferred tax assets and liabilities as noncurrent. Implementation of this standard did not have a material effect on the consolidated financial statements and related disclosures. The Company applied this standard retrospectively and, therefore, prior periods presented were adjusted. Effective January 1, 2017, the Company adopted the accounting guidance in ASU No. 2016-09, “ Improvements to Employee Share-Based Payment Accounting .” This standard simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The new guidance requires excess tax benefits and deficiencies to be recognized in the income statement rather than in additional paid-in capital. As a result of applying this change, the Company recognized $0.3 million of excess tax benefit in the provision for incomes taxes during the six months ended June 30, 2017 . The Company applied this standard prospectively, where applicable, and, therefore, prior periods presented were not adjusted. New Accounting Requirements and Disclosures In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2014-09, “ Revenue from Contracts with Customers .” The ASU will supersede most of the existing revenue recognition requirements in U.S. GAAP and will require entities to recognize revenue at an amount that reflects the consideration to which the Company expects to be entitled in exchange for transferring goods or services to a customer. The new standard also requires significantly expanded disclosures regarding the qualitative and quantitative information of an entity’s nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. In August 2015, the FASB issued ASU No. 2015-14, which deferred the effective date by one year to annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. In March 2016, the FASB issued ASU No. 2016-08, which improves the operability and understandability of the implementation guidance on principal versus agent considerations. In April 2016, the FASB issued ASU No. 2016-10, which clarifies identifying performance obligations and the licensing implementation guidance. In May 2016, the FASB issued ASU No. 2016-11, which rescinds certain SEC Staff Observer comments that are codified in Topic 605, Revenue Recognition, effective upon adoption of ASU 2014-09, and ASU No. 2016-12, which reduces the potential for diversity in practice at initial application and reduces the cost and complexity of applying Topic 606 both at transition and on an ongoing basis. In December 2016, the FASB issued ASU No. 2016-20, which provides technical corrections and improvements to the original guidance issued. The Company intends to adopt the new standard in the first quarter of 2018 using the modified retrospective method. The Company has identified key contract types representative of its business for comparing historical accounting policies and practices to the new standard and is continuing to evaluate the impact these pronouncements will have on the consolidated financial statements and related disclosures. In February 2016, the FASB issued ASU No. 2016-02, “ Leases .” This standard requires the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous U.S. GAAP. The pronouncement is effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period and should be applied using a modified retrospective transition approach, with early application permitted. The Company is currently evaluating the impact the pronouncement will have on the consolidated financial statements and related disclosures. In June 2016, the FASB issued ASU No. 2016-13, “ Measurement of Credit Losses on Financial Instruments .” This standard replaces the incurred loss impairment methodology in current U.S. GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The pronouncement is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, with early adoption for the fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently evaluating the impact the pronouncement will have on the consolidated financial statements and related disclosures. In August 2016, the FASB issued ASU No. 2016-15, “ Classification of Certain Cash Receipts and Cash Payments. ” This standard addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice. The pronouncement is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact the pronouncement will have on the consolidated financial statements and related disclosures. In January 2017, the FASB issued ASU No. 2017-01, “ Clarifying the Definition of a Business. ” This standard provides additional guidance on whether an integrated set of assets and activities constitutes a business. The pronouncement is effective for annual periods beginning after December 15, 2017, including interim periods within those periods, with early adoption permitted in specific instances. The Company is currently evaluating the impact the pronouncement will have on the consolidated financial statements and related disclosures. In January 2017, the FASB issued ASU No. 2017-04, “ Simplifying the Test for Goodwill Impairment .” This standard eliminates Step 2 from the goodwill impairment test. An entity will now recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. The pronouncement is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact the pronouncement will have on the consolidated financial statements and related disclosures. In May 2017, the FASB issued ASU No. 2017-09, “ Scope of Modification Accounting .” This standard provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting under Topic 718. The pronouncement is effective for annual periods beginning after December 15, 2017, including interim periods within those periods, with early adoption permitted. The Company is currently evaluating the impact the pronouncement will have on the consolidated financial statements and related disclosures. |
Earnings (Loss) Per Share | Earnings (Loss) Per Share Basic earnings (loss) per common share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding for the period. Diluted earnings (loss) per common share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding combined with dilutive common share equivalents outstanding, if the effect is dilutive. Potentially dilutive securities were excluded from the calculation of diluted loss per share for the three and six months ended June 30, 2017 and 2016 , since including them would have an anti-dilutive effect on loss per share due to the net loss incurred during the period. |
Fair Value Measurements | Fair Value Measurements Fair value is defined as the amount that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company categorizes financial assets and liabilities into the three levels of the fair value hierarchy. The hierarchy prioritizes the inputs to valuation techniques used to measure fair value and bases categorization within the hierarchy on the lowest level of input that is available and significant to the fair value measurement. • Level 1 — Quoted prices in active markets for identical assets or liabilities; • Level 2 — Observable inputs other than Level 1, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and • Level 3 — Significant unobservable inputs that are supported by little or no market activity or that are based on the reporting entity’s assumptions about the inputs. |
Segment Information | Segment Information Operating segments are defined as components of an enterprise for which separate financial information is available that is regularly evaluated by chief operating decision-makers in deciding how to allocate resources and assess performance. The operations of the Company are categorized into two reportable segments: Energy Chemistry Technologies and Consumer and Industrial Chemistry Technologies. • Energy Chemistry Technologies designs, develops, manufactures, packages, and markets specialty chemistries used in oil and natural gas well drilling, cementing, completion, and stimulation. In addition, the Company’s chemistries are used in specialized enhanced and improved oil recovery markets. Activities in this segment also include construction and management of automated material handling facilities and management of loading facilities and blending operations for oilfield services companies. • Consumer and Industrial Chemistry Technologies designs, develops, and manufactures products that are sold to companies in the flavor and fragrance industry and the specialty chemical industry. These technologies are used by beverage and food companies, fragrance companies, and companies providing household and industrial cleaning products. The Company evaluates performance based upon a variety of criteria. The primary financial measure is segment operating income. Various functions, including certain sales and marketing activities and general and administrative activities, are provided centrally by the corporate office. Costs associated with corporate office functions, other corporate income and expense items, and income taxes are not allocated to reportable segments. |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Summary of financial information has been segregated from continuing operations | The following summarized financial information has been segregated from continuing operations and reported as Discontinued Operations for the three and six months ended June 30, 2017 and 2016 (in thousands): Three months ended June 30, Six months ended June 30, 2017 2016 2017 2016 Drilling Technologies Revenue $ 4,737 $ 6,372 $ 11,534 $ 12,829 Cost of revenue (2,603 ) (4,155 ) (7,259 ) (9,587 ) Selling, general and administrative (2,740 ) (3,495 ) (5,771 ) (8,155 ) Depreciation and amortization — (337 ) — (1,085 ) Research and development (6 ) (22 ) (6 ) (65 ) Gain (loss) on disposal of long-lived assets (12 ) 19 62 16 Impairment of inventory and long-lived assets — — — (36,522 ) Loss from operations (624 ) (1,618 ) (1,440 ) (42,569 ) Other expense (46 ) (69 ) (117 ) (243 ) Loss on sale of businesses (1,365 ) — (1,365 ) — Loss on write-down of assets held for sale (272 ) — (6,831 ) — Loss before income taxes (2,307 ) (1,687 ) (9,753 ) (42,812 ) Income tax benefit 158 456 3,147 14,881 Net loss from discontinued operations $ (2,149 ) $ (1,231 ) $ (6,606 ) $ (27,931 ) Production Technologies Revenue $ 849 $ 1,868 $ 4,002 $ 3,889 Cost of revenue (707 ) (1,882 ) (3,189 ) (3,793 ) Selling, general and administrative (802 ) (897 ) (1,675 ) (2,051 ) Depreciation and amortization — (149 ) — (298 ) Research and development (92 ) (201 ) (363 ) (467 ) Loss on disposal of long-lived assets — — — (59 ) Impairment of inventory — — — (3,913 ) Loss from operations (752 ) (1,261 ) (1,225 ) (6,692 ) Other expense (16 ) (23 ) (52 ) (44 ) Gain on sale of businesses 171 — 171 — Loss on write-down of assets held for sale — — (9,718 ) — Loss before income taxes (597 ) (1,284 ) (10,824 ) (6,736 ) Income tax benefit 42 346 3,493 2,342 Net loss from discontinued operations $ (555 ) $ (938 ) $ (7,331 ) $ (4,394 ) Drilling Technologies and Production Technologies Loss from discontinued operations, net of tax $ (2,704 ) $ (2,169 ) $ (13,937 ) $ (32,325 ) The assets and liabilities held for sale on the Consolidated Balance Sheets as of June 30, 2017 and December 31, 2016 are as follows (in thousands): Drilling Technologies Production Technologies June 30, 2017 December 31, 2016 June 30, 2017 December 31, 2016 Assets: Accounts receivable, net $ 2,448 $ 5,072 $ 539 $ 1,784 Inventories 1,942 9,078 — 8,115 Other current assets 1,595 278 697 370 Long-term receivable — — — 4,179 Property and equipment, net 880 11,277 — 3,978 Goodwill — 15,333 — 1,689 Other intangible assets, net — 7,395 — 484 Assets held for sale 6,865 48,433 1,236 20,599 Valuation allowance (904 ) (18,971 ) — (6,161 ) Assets held for sale, net $ 5,961 $ 29,462 $ 1,236 $ 14,438 Liabilities: Accounts payable $ 388 $ 2,472 $ 40 $ 914 Accrued liabilities 1,607 1,190 381 385 Liabilities held for sale $ 1,995 $ 3,662 $ 421 $ 1,299 |
Impairment of Inventory and L27
Impairment of Inventory and Long-Lived Assets for Discontinued Operations (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Asset Impairment Charges [Abstract] | |
Schedule of asset impairment charges | The Company recorded impairment charges during the three months ended March 31, 2016 , as follows (in thousands): Drilling Technologies: Inventories $ 12,653 Long-lived assets: Property and equipment 14,642 Intangible assets other than goodwill 9,227 Production Technologies: Inventories 3,913 Total impairment $ 40,435 |
Supplemental Cash Flow Inform28
Supplemental Cash Flow Information (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Supplemental Cash Flow Elements [Abstract] | |
Components of supplemental cash flow information | Supplemental cash flow information is as follows (in thousands): Six months ended June 30, 2017 2016 Supplemental non-cash investing and financing activities: Value of common stock issued in payment of accrued liability $ 188 $ — Exercise of stock options by common stock surrender 5,814 — Supplemental cash payment information: Interest paid $ 1,069 $ 921 Income taxes received, net of payments (paid, net of refunds) 9,489 (3,429 ) |
Revenue (Tables)
Revenue (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Revenue [Abstract] | |
Differentiation of revenue and cost of revenue | Revenue and cost of revenue by source are as follows (in thousands): Three months ended June 30, Six months ended June 30, 2017 2016 2017 2016 Revenue: Products $ 83,835 $ 62,561 $ 162,350 $ 124,560 Services 1,342 1,518 2,781 3,330 $ 85,177 $ 64,079 $ 165,131 $ 127,890 Cost of revenue: Products $ 57,052 $ 41,692 $ 107,741 $ 80,936 Services 1,522 172 2,458 598 Depreciation 512 497 1,099 845 $ 59,086 $ 42,361 $ 111,298 $ 82,379 |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Inventory Disclosure [Abstract] | |
Components of inventory | Inventories are as follows (in thousands): June 30, 2017 December 31, 2016 Raw materials $ 42,668 $ 28,626 Work-in-process 2,933 2,918 Finished goods 32,809 26,739 Inventories $ 78,410 $ 58,283 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Components of property and equipment | Property and equipment are as follows (in thousands): June 30, 2017 December 31, 2016 Land $ 6,551 $ 5,837 Buildings and leasehold improvements 43,052 42,986 Machinery, equipment and rental tools 38,213 36,187 Equipment in progress 5,091 3,235 Furniture and fixtures 2,026 1,969 Transportation equipment 2,449 3,059 Computer equipment and software 12,069 11,844 Property and equipment 109,451 105,117 Less accumulated depreciation (35,055 ) (30,426 ) Property and equipment, net $ 74,396 $ 74,691 |
Goodwill (Tables)
Goodwill (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Changes in the carrying value of goodwill | Changes in the carrying value of goodwill for each reporting unit are as follows (in thousands): Energy Chemistry Technologies Consumer and Industrial Chemistry Technologies Total Balance at December 31, 2016 $ 37,180 $ 19,480 $ 56,660 Goodwill impairment recognized — — — Balance at June 30, 2017 $ 37,180 $ 19,480 $ 56,660 |
Other Intangible Assets (Tables
Other Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of other intangible assets | Other intangible assets are as follows (in thousands): June 30, 2017 December 31, 2016 Cost Accumulated Amortization Cost Accumulated Amortization Finite-lived intangible assets: Patents and technology $ 17,099 $ 5,060 $ 16,815 $ 4,537 Customer lists 30,877 7,343 30,877 6,518 Trademarks and brand names 1,517 1,092 1,467 1,069 Total finite-lived intangible assets acquired 49,493 13,495 49,159 12,124 Deferred financing costs 1,822 370 1,804 117 Total amortizable intangible assets 51,315 $ 13,865 50,963 $ 12,241 Indefinite-lived intangible assets: Trademarks and brand names 11,630 11,630 Total other intangible assets $ 62,945 $ 62,593 Carrying value: Other intangible assets, net $ 49,080 $ 50,352 |
Long-Term Debt and Credit Fac34
Long-Term Debt and Credit Facility (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
Components of long-term debt | Long-term debt is as follows (in thousands): June 30, 2017 December 31, 2016 Long-term debt: Borrowings under revolving credit facility $ 42,716 $ 38,566 Term loan — 9,833 Total long-term debt 42,716 48,399 Less current portion of long-term debt (42,716 ) (40,566 ) Long-term debt, less current portion $ — $ 7,833 |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Earnings Per Share [Abstract] | |
Components of basic and diluted earnings per common share | Basic and diluted earnings (loss) per common share are as follows (in thousands, except per share data): Three months ended June 30, Six months ended June 30, 2017 2016 2017 2016 Loss from continuing operations $ (1,122 ) $ (111 ) $ (1,866 ) $ (140 ) Loss from discontinued operations, net of tax (2,704 ) (2,169 ) (13,937 ) (32,325 ) Net loss - Basic and Diluted $ (3,826 ) $ (2,280 ) $ (15,803 ) $ (32,465 ) Weighted average common shares outstanding - Basic 57,854 54,910 57,764 54,827 Assumed conversions: Incremental common shares from stock options — — — — Incremental common shares from restricted stock units — — — — Weighted average common shares outstanding - Diluted 57,854 54,910 57,764 54,827 Basic earnings (loss) per common share: Continuing operations $ (0.02 ) $ — $ (0.03 ) $ — Discontinued operations, net of tax (0.05 ) (0.04 ) (0.24 ) (0.59 ) Basic earnings (loss) per common share $ (0.07 ) $ (0.04 ) $ (0.27 ) $ (0.59 ) Diluted earnings (loss) per common share: Continuing operations $ (0.02 ) $ — $ (0.03 ) $ — Discontinued operations, net of tax (0.05 ) (0.04 ) (0.24 ) (0.59 ) Diluted earnings (loss) per common share $ (0.07 ) $ (0.04 ) $ (0.27 ) $ (0.59 ) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Carrying value and estimated fair value of long-term debt | The carrying value and estimated fair value of the Company’s long-term debt are as follows (in thousands): June 30, 2017 December 31, 2016 Carrying Value Fair Value Carrying Value Fair Value Term loan $ — $ — $ 9,833 $ 9,833 Borrowings under revolving credit facility 42,716 42,716 38,566 38,566 |
Income Taxes (Tables)
Income Taxes (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Reconciliation of effective tax rate to the U.S. federal statutory tax rate | A reconciliation of the U.S. federal statutory tax rate to the Company’s effective income tax rate is as follows: Three months ended June 30, Six months ended June 30, 2017 2016 2017 2016 U.S. federal statutory tax rate (35.0 )% (35.0 )% (35.0 )% (35.0 )% State income taxes, net of federal benefit (4.8 ) (4.8 ) (3.8 ) (4.7 ) Non-U.S. income taxed at different rates (0.1 ) (40.8 ) 0.1 (37.2 ) Excess tax benefit related to stock-based awards 13.4 — 10.7 — Other (1.8 ) 2.8 (1.0 ) 2.5 Effective income tax rate (28.3 )% (77.8 )% (29.0 )% (74.4 )% |
Common Stock (Tables)
Common Stock (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Equity [Abstract] | |
Schedule of reconciliation of changes in common shares issued | A reconciliation of changes in common shares issued during the six months ended June 30, 2017 is as follows: Shares issued at December 31, 2016 59,684,669 Issued as restricted stock award grants 168,756 Issued upon exercise of stock options 651,188 Shares issued at June 30, 2017 60,504,613 |
Business Segment, Geographic 39
Business Segment, Geographic and Major Customer Information (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Segment Reporting [Abstract] | |
Financial information regarding reportable segments | Summarized financial information of the reportable segments is as follows (in thousands): As of and for the three months ended June 30, Energy Chemistry Technologies Consumer and Industrial Chemistry Technologies Corporate and Other Total 2017 Net revenue from external customers $ 65,875 $ 19,302 $ — $ 85,177 Gross profit 22,804 3,287 — 26,091 Income (loss) from operations 9,299 1,216 (11,767 ) (1,252 ) Depreciation and amortization 1,795 583 613 2,991 Capital expenditures 1,956 397 278 2,631 2016 Net revenue from external customers $ 43,385 $ 20,694 $ — $ 64,079 Gross profit 17,660 4,058 — 21,718 Income (loss) from operations 7,584 2,686 (10,114 ) 156 Depreciation and amortization 1,237 608 557 2,402 Capital expenditures 3,685 204 559 4,448 As of and for the six months ended June 30, Energy Chemistry Technologies Consumer and Industrial Chemistry Technologies Corporate and Other Total 2017 Net revenue from external customers $ 126,640 $ 38,491 $ — $ 165,131 Gross profit 45,106 8,727 — 53,833 Income (loss) from operations 17,848 4,921 (24,643 ) (1,874 ) Depreciation and amortization 3,644 1,162 1,217 6,023 Capital expenditures 2,470 897 1,141 4,508 2016 Net revenue from external customers $ 88,064 $ 39,826 $ — $ 127,890 Gross profit 36,429 9,082 — 45,511 Income (loss) from operations 15,597 6,075 (21,148 ) 524 Depreciation and amortization 2,480 1,118 1,053 4,651 Capital expenditures 6,699 346 1,193 8,238 Assets of the Company by reportable segments are as follows (in thousands): June 30, 2017 December 31, 2016 Energy Chemistry Technologies $ 195,963 $ 184,328 Consumer and Industrial Chemistry Technologies 117,037 98,105 Corporate and Other 38,980 56,882 Total segments 351,980 339,315 Held for sale 7,197 43,900 Total assets $ 359,177 $ 383,215 |
Revenue by geographic location | Revenue by geographic location is as follows (in thousands): Three months ended June 30, Six months ended June 30, 2017 2016 2017 2016 U.S. $ 71,836 $ 49,381 $ 136,485 $ 101,987 Other countries 13,341 14,698 28,646 25,903 Total $ 85,177 $ 64,079 $ 165,131 $ 127,890 |
Revenue by major customer | Revenue from major customers, as a percentage of consolidated revenue, is as follows: Three months ended June 30, Six months ended June 30, 2017 2016 2017 2016 Customer A 13.3 % 17.5 % 12.7 % 20.7 % Customer B 10.1 % 13.3 % 9.9 % 12.8 % |
Organization and Significant 40
Organization and Significant Accounting Policies (Details) | Jun. 30, 2017country |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of countries Flotek actively markets products and services, over 20 countries (country) | 20 |
Recent Accounting Pronounceme41
Recent Accounting Pronouncements (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2017USD ($) | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Employee share-based compensation, excess tax benefit | $ 0.3 |
Discontinued Operations - Addit
Discontinued Operations - Additional Disclosures (Details) $ in Millions | May 22, 2017USD ($) | Dec. 31, 2016segment | May 23, 2017USD ($) |
Discontinued Operations and Disposal Groups [Abstract] | |||
Number of segments with assets and liabilities classified as discontinued operations (segment) | segment | 2 | ||
Production Technologies | Discontinued Operations, Disposed of by Sale | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Cash consideration | $ 2.9 | ||
Escrow deposit | $ 0.4 | ||
National Oilwell Varco, L.P. | Drilling Technologies | Discontinued Operations, Disposed of by Sale | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Cash consideration | $ 17 | ||
Escrow deposit | $ 1.5 | ||
Term of escrow deposit | 18 months |
Discontinued Operations - Summa
Discontinued Operations - Summary Of Financial Information That Has Been Segregated From Continuing Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Discontinued Operations: | |||||
Gain (loss) from discontinued operations | $ (2,704) | $ (2,169) | $ (13,937) | $ (32,325) | |
Net loss from discontinued operations | (2,704) | (2,169) | (13,937) | (32,325) | |
Assets: | |||||
Assets held for sale | 7,197 | 7,197 | $ 43,900 | ||
Drilling Technologies | Discontinued Operations, Held-for-sale | |||||
Discontinued Operations: | |||||
Revenue | 4,737 | 6,372 | 11,534 | 12,829 | |
Cost of revenue | (2,603) | (4,155) | (7,259) | (9,587) | |
Selling, general and administrative | (2,740) | (3,495) | (5,771) | (8,155) | |
Depreciation and amortization | 0 | (337) | 0 | (1,085) | |
Research and development | (6) | (22) | (6) | (65) | |
Gain (loss) on disposal of long-lived assets | (12) | 19 | 62 | 16 | |
Impairment of inventory and long-lived assets | 0 | 0 | 0 | (36,522) | |
Loss from operations | (624) | (1,618) | (1,440) | (42,569) | |
Other expense | (46) | (69) | (117) | (243) | |
Gain (loss) from discontinued operations | (1,365) | 0 | (1,365) | 0 | |
Loss on write-down of assets held for sale | (272) | 0 | (6,831) | 0 | |
Loss before income taxes | (2,307) | (1,687) | (9,753) | (42,812) | |
Income tax benefit | 158 | 456 | 3,147 | 14,881 | |
Net loss from discontinued operations | (2,149) | (1,231) | (6,606) | (27,931) | |
Assets: | |||||
Accounts receivable, net | 2,448 | 2,448 | 5,072 | ||
Inventories | 1,942 | 1,942 | 9,078 | ||
Other current assets | 1,595 | 1,595 | 278 | ||
Long-term receivable | 0 | 0 | 0 | ||
Property and equipment, net | 880 | 880 | 11,277 | ||
Goodwill | 0 | 0 | 15,333 | ||
Other intangible assets, net | 0 | 0 | 7,395 | ||
Assets held for sale | 6,865 | 6,865 | 48,433 | ||
Valuation allowance | (904) | (904) | (18,971) | ||
Assets held for sale, net | 5,961 | 5,961 | 29,462 | ||
Liabilities: | |||||
Accounts payable | 388 | 388 | 2,472 | ||
Accrued liabilities | 1,607 | 1,607 | 1,190 | ||
Liabilities held for sale | 1,995 | 1,995 | 3,662 | ||
Production Technologies | Discontinued Operations, Held-for-sale | |||||
Discontinued Operations: | |||||
Revenue | 849 | 1,868 | 4,002 | 3,889 | |
Cost of revenue | (707) | (1,882) | (3,189) | (3,793) | |
Selling, general and administrative | (802) | (897) | (1,675) | (2,051) | |
Depreciation and amortization | 0 | (149) | 0 | (298) | |
Research and development | (92) | (201) | (363) | (467) | |
Gain (loss) on disposal of long-lived assets | 0 | 0 | 0 | (59) | |
Impairment of inventory and long-lived assets | 0 | 0 | 0 | (3,913) | |
Loss from operations | (752) | (1,261) | (1,225) | (6,692) | |
Other expense | (16) | (23) | (52) | (44) | |
Gain (loss) from discontinued operations | 171 | 0 | 171 | 0 | |
Loss on write-down of assets held for sale | 0 | 0 | (9,718) | 0 | |
Loss before income taxes | (597) | (1,284) | (10,824) | (6,736) | |
Income tax benefit | 42 | 346 | 3,493 | 2,342 | |
Net loss from discontinued operations | (555) | $ (938) | (7,331) | $ (4,394) | |
Assets: | |||||
Accounts receivable, net | 539 | 539 | 1,784 | ||
Inventories | 0 | 0 | 8,115 | ||
Other current assets | 697 | 697 | 370 | ||
Long-term receivable | 0 | 0 | 4,179 | ||
Property and equipment, net | 0 | 0 | 3,978 | ||
Goodwill | 0 | 0 | 1,689 | ||
Other intangible assets, net | 0 | 0 | 484 | ||
Assets held for sale | 1,236 | 1,236 | 20,599 | ||
Valuation allowance | 0 | 0 | (6,161) | ||
Assets held for sale, net | 1,236 | 1,236 | 14,438 | ||
Liabilities: | |||||
Accounts payable | 40 | 40 | 914 | ||
Accrued liabilities | 381 | 381 | 385 | ||
Liabilities held for sale | $ 421 | $ 421 | $ 1,299 |
Impairment of Inventory and L44
Impairment of Inventory and Long-Lived Assets for Discontinued Operations - Additional Disclosures (Details) | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2017USD ($) | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($)segment | Jun. 30, 2017USD ($) | Jun. 30, 2016USD ($) | Apr. 01, 2016rig | Dec. 31, 2015rig | |
Property, Plant and Equipment [Line Items] | |||||||
Decrease in crude oil prices | 21.00% | ||||||
Number of segments tested for goodwill (segment) | segment | 2 | ||||||
Impairments of goodwill | $ | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | ||
UNITED STATES | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Number of drilling rigs (rig) | rig | 450 | 698 | |||||
Decrease in number of drilling rigs | 35.50% |
Impairment of Inventory and L45
Impairment of Inventory and Long-Lived Assets for Discontinued Operations - Schedule of asset impairment charges (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Mar. 31, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Segment Reporting Information [Line Items] | |||||
Property and equipment | $ 0 | $ 0 | $ 0 | $ 0 | |
Discontinued Operations, Held-for-sale | |||||
Segment Reporting Information [Line Items] | |||||
Total impairment | $ 40,435,000 | ||||
Discontinued Operations, Held-for-sale | Drilling Technologies | |||||
Segment Reporting Information [Line Items] | |||||
Inventories | 12,653,000 | ||||
Property and equipment | 14,642,000 | ||||
Intangible assets other than goodwill | 9,227,000 | ||||
Discontinued Operations, Held-for-sale | Production Technologies | |||||
Segment Reporting Information [Line Items] | |||||
Inventories | $ 3,913,000 |
Supplemental Cash Flow Inform46
Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Supplemental non-cash investing and financing activities: | ||
Value of common stock issued in payment of accrued liability | $ 188 | $ 0 |
Exercise of stock options by common stock surrender | 5,814 | 0 |
Supplemental cash payment information: | ||
Interest paid | 1,069 | 921 |
Income taxes received, net of payments (paid, net of refunds) | $ 9,489 | $ (3,429) |
Revenue (Details)
Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Revenue: | ||||
Products | $ 83,835 | $ 62,561 | $ 162,350 | $ 124,560 |
Services | 1,342 | 1,518 | 2,781 | 3,330 |
Total revenue | 85,177 | 64,079 | 165,131 | 127,890 |
Cost of revenue: | ||||
Products | 57,052 | 41,692 | 107,741 | 80,936 |
Services | 1,522 | 172 | 2,458 | 598 |
Depreciation | 512 | 497 | 1,099 | 845 |
Total cost of revenue | $ 59,086 | $ 42,361 | $ 111,298 | $ 82,379 |
Inventories - Components of Inv
Inventories - Components of Inventory (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Components of Inventory | ||
Raw materials | $ 42,668 | $ 28,626 |
Work-in-process | 2,933 | 2,918 |
Finished goods | 32,809 | 26,739 |
Inventories | $ 78,410 | $ 58,283 |
Property and Equipment - Compon
Property and Equipment - Components of Property and Equipment (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Components of Property, Plant and Equipment | ||
Property and equipment | $ 109,451 | $ 105,117 |
Less accumulated depreciation | (35,055) | (30,426) |
Property and equipment, net | 74,396 | 74,691 |
Land | ||
Components of Property, Plant and Equipment | ||
Property and equipment | 6,551 | 5,837 |
Buildings and leasehold improvements | ||
Components of Property, Plant and Equipment | ||
Property and equipment | 43,052 | 42,986 |
Machinery, equipment and rental tools | ||
Components of Property, Plant and Equipment | ||
Property and equipment | 38,213 | 36,187 |
Equipment in progress | ||
Components of Property, Plant and Equipment | ||
Property and equipment | 5,091 | 3,235 |
Furniture and fixtures | ||
Components of Property, Plant and Equipment | ||
Property and equipment | 2,026 | 1,969 |
Transportation equipment | ||
Components of Property, Plant and Equipment | ||
Property and equipment | 2,449 | 3,059 |
Computer equipment and software | ||
Components of Property, Plant and Equipment | ||
Property and equipment | $ 12,069 | $ 11,844 |
Property and Equipment - Additi
Property and Equipment - Additional Disclosures (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense, inclusive of expense captured in cost of revenue | $ 2,300,000 | $ 1,700,000 | $ 4,700,000 | $ 3,200,000 |
Impairment of property and equipment | $ 0 | $ 0 | $ 0 | $ 0 |
Goodwill - Carrying Value of Go
Goodwill - Carrying Value of Goodwill (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Mar. 31, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Goodwill [Roll Forward] | |||||
Balance, beginning of period | $ 56,660,000 | ||||
Goodwill impairment recognized | $ 0 | $ 0 | $ 0 | 0 | $ 0 |
Balance, end of period | 56,660,000 | 56,660,000 | |||
Energy Chemistry Technologies | |||||
Goodwill [Roll Forward] | |||||
Balance, beginning of period | 37,180,000 | ||||
Goodwill impairment recognized | 0 | ||||
Balance, end of period | 37,180,000 | 37,180,000 | |||
Consumer and Industrial Chemistry Technologies | |||||
Goodwill [Roll Forward] | |||||
Balance, beginning of period | 19,480,000 | ||||
Goodwill impairment recognized | 0 | ||||
Balance, end of period | $ 19,480,000 | $ 19,480,000 |
Goodwill - Additional Disclosur
Goodwill - Additional Disclosures (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Mar. 31, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||||
Impairments of goodwill | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 |
Other Intangible Assets - Sched
Other Intangible Assets - Schedule of other intangible assets (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Schedule of Finite and Indefinite Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, Cost | $ 51,315 | $ 50,963 |
Finite-lived intangible assets, Accumulated Amortization | 13,865 | 12,241 |
Total other intangible assets | 62,945 | 62,593 |
Other intangible assets, net | 49,080 | 50,352 |
Trademarks and brand names | ||
Schedule of Finite and Indefinite Lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets, Trademarks and brand names | 11,630 | 11,630 |
Acquired Intangible Assets [Member] | ||
Schedule of Finite and Indefinite Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, Cost | 49,493 | 49,159 |
Finite-lived intangible assets, Accumulated Amortization | 13,495 | 12,124 |
Patents and technology | ||
Schedule of Finite and Indefinite Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, Cost | 17,099 | 16,815 |
Finite-lived intangible assets, Accumulated Amortization | 5,060 | 4,537 |
Customer lists | ||
Schedule of Finite and Indefinite Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, Cost | 30,877 | 30,877 |
Finite-lived intangible assets, Accumulated Amortization | 7,343 | 6,518 |
Trademarks and brand names | ||
Schedule of Finite and Indefinite Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, Cost | 1,517 | 1,467 |
Finite-lived intangible assets, Accumulated Amortization | 1,092 | 1,069 |
Deferred financing costs | ||
Schedule of Finite and Indefinite Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, Cost | 1,822 | 1,804 |
Finite-lived intangible assets, Accumulated Amortization | $ 370 | $ 117 |
Other Intangible Assets - Addit
Other Intangible Assets - Additional Disclosures (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Schedule of Finite and Indefinite Lived Intangible Assets [Line Items] | ||||
Amortization of finite-lived intangible assets | $ 700 | $ 700 | $ 1,400 | $ 1,400 |
Amortization of deferred financing costs | $ 100 | $ 100 | $ 253 | $ 205 |
Minimum | ||||
Schedule of Finite and Indefinite Lived Intangible Assets [Line Items] | ||||
Amortization period | 2 years | |||
Maximum | ||||
Schedule of Finite and Indefinite Lived Intangible Assets [Line Items] | ||||
Amortization period | 20 years |
Long-Term Debt and Credit Fac55
Long-Term Debt and Credit Facility - Components of Long-term debt (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Long-term debt: | ||
Long-term debt | $ 42,716 | $ 48,399 |
Less current portion of long-term debt | (42,716) | (40,566) |
Long-term debt, less current portion | 0 | 7,833 |
Borrowings under revolving credit facility | ||
Long-term debt: | ||
Long-term debt | 42,716 | 38,566 |
Term loan | ||
Long-term debt: | ||
Long-term debt | $ 0 | $ 9,833 |
Long-Term Debt and Credit Fac56
Long-Term Debt and Credit Facility - Additional Disclosures (Details) - USD ($) | Sep. 30, 2016 | Jun. 30, 2017 | May 22, 2017 | Dec. 31, 2016 | May 10, 2013 |
Line of Credit Facility [Line Items] | |||||
Amount borrowed | $ 42,716,000 | $ 48,399,000 | |||
Term loan | |||||
Line of Credit Facility [Line Items] | |||||
Amount borrowed | 0 | $ 9,833,000 | |||
Credit Facility | |||||
Line of Credit Facility [Line Items] | |||||
Limit on capital expenditures | $ 20,000,000 | ||||
Covenant, percent of adjusted EBITDA which must be prepaid | 25.00% | ||||
Credit facility ceiling value applicable to 25% of adjusting EBITDA which must be paid | $ 3,000,000 | ||||
Covenant, maximum number of days from year end by which prepayment of 25% of adjusted EBITDA is due | 60 days | ||||
Credit Facility | Line of Credit | |||||
Line of Credit Facility [Line Items] | |||||
Maximum borrowing capacity | $ 65,000,000 | ||||
Credit Facility | Line of Credit | Borrowings under revolving credit facility | |||||
Line of Credit Facility [Line Items] | |||||
Maximum borrowing capacity | 55,000,000 | ||||
Credit facility, availability | $ 64,900,000 | ||||
Credit facility, available borrowing capacity, net of outstanding borrowings | $ 22,200,000 | ||||
Credit facility, commitment fee percentage | 0.25% | ||||
Credit facility, amount outstanding | $ 42,700,000 | ||||
Credit Facility | Line of Credit | Borrowings under revolving credit facility | PNC Bank Base Rate | |||||
Line of Credit Facility [Line Items] | |||||
Base lending rate | 4.25% | ||||
Credit facility, amount outstanding | $ 7,700,000 | ||||
Credit facility, interest rate at period end | 5.75% | ||||
Credit Facility | Line of Credit | Borrowings under revolving credit facility | LIBOR | |||||
Line of Credit Facility [Line Items] | |||||
Credit facility, amount outstanding | $ 35,000,000 | ||||
Credit facility, interest rate at period end | 3.73% | ||||
Credit Facility | Line of Credit | Borrowings under revolving credit facility | Minimum | |||||
Line of Credit Facility [Line Items] | |||||
Fixed coverage charge ratio requirement | 1 | ||||
Leverage ratio requirement | 4 | ||||
Undrawn availability required | $ 10,000,000 | ||||
Credit Facility | Line of Credit | Borrowings under revolving credit facility | Minimum | PNC Bank Base Rate | |||||
Line of Credit Facility [Line Items] | |||||
Credit facility, variable percentage rate spread | 1.50% | ||||
Credit Facility | Line of Credit | Borrowings under revolving credit facility | Minimum | LIBOR | |||||
Line of Credit Facility [Line Items] | |||||
Credit facility, variable percentage rate spread | 2.50% | ||||
Credit Facility | Line of Credit | Borrowings under revolving credit facility | Maximum | |||||
Line of Credit Facility [Line Items] | |||||
Fixed coverage charge ratio requirement | 1.10 | ||||
Leverage ratio requirement | 5.5 | ||||
Undrawn availability required | $ 15,000,000 | ||||
Credit Facility | Line of Credit | Borrowings under revolving credit facility | Maximum | PNC Bank Base Rate | |||||
Line of Credit Facility [Line Items] | |||||
Credit facility, variable percentage rate spread | 2.00% | ||||
Credit Facility | Line of Credit | Borrowings under revolving credit facility | Maximum | LIBOR | |||||
Line of Credit Facility [Line Items] | |||||
Credit facility, variable percentage rate spread | 3.00% | ||||
Credit Facility | Term loan | |||||
Line of Credit Facility [Line Items] | |||||
Debt, face amount | $ 10,000,000 | 10,000,000 | |||
Monthly principal payments | $ 200,000 | ||||
Credit Facility | Letter of Credit | Borrowings under revolving credit facility | |||||
Line of Credit Facility [Line Items] | |||||
Maximum borrowing capacity | $ 65,000,000 | $ 10,000,000 |
Earnings (Loss) Per Share - Add
Earnings (Loss) Per Share - Additional Disclosures (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Stock Options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities excluded from calculation of earnings per share (in shares) | 12,100 | 700,000 | 700,000 | 700,000 |
Restricted Stock Units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities excluded from calculation of earnings per share (in shares) | 1,300,000 | 800,000 | 1,200,000 | 800,000 |
Earnings (Loss) Per Share - Bas
Earnings (Loss) Per Share - Basic and Diluted Earnings per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Class of Stock [Line Items] | ||||
Loss from continuing operations | $ (1,122) | $ (111) | $ (1,866) | $ (140) |
Loss from discontinued operations, net of tax | (2,704) | (2,169) | (13,937) | (32,325) |
Net loss | $ (3,826) | $ (2,280) | $ (15,803) | $ (32,465) |
Weighted average common shares outstanding - Basic (in shares) | 57,854 | 54,910 | 57,764 | 54,827 |
Assumed conversions: | ||||
Weighted average common shares outstanding - Diluted (in shares) | 57,854 | 54,910 | 57,764 | 54,827 |
Basic earnings (loss) per common share: | ||||
Continuing operations (in dollars per share) | $ (0.02) | $ 0 | $ (0.03) | $ 0 |
Discontinued operations, net of tax (in dollars per share) | (0.05) | (0.04) | (0.24) | (0.59) |
Basic earnings (loss) per common share (in dollars per share) | (0.07) | (0.04) | (0.27) | (0.59) |
Earnings Per Share, Diluted [Abstract] | ||||
Continuing operations (in dollars per share) | (0.02) | 0 | (0.03) | 0 |
Discontinued operations, net of tax (in dollars per share) | (0.05) | (0.04) | (0.24) | (0.59) |
Diluted earnings (loss) per common share (in dollars per share) | $ (0.07) | $ (0.04) | $ (0.27) | $ (0.59) |
Stock Options | ||||
Assumed conversions: | ||||
Incremental common shares from stock options and restricted stock units (in shares) | 0 | 0 | 0 | 0 |
Restricted Stock Units | ||||
Assumed conversions: | ||||
Incremental common shares from stock options and restricted stock units (in shares) | 0 | 0 | 0 | 0 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Disclosures (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2017 | Jun. 30, 2016 | Mar. 31, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | ||||||
Cash equivalents | $ 0 | $ 0 | $ 0 | |||
Impairments of goodwill | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value of Other Financial Instruments (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Carrying Value | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Borrowings under revolving credit facility | $ 42,716 | $ 38,566 |
Carrying Value | Term loan | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Term loan | 0 | 9,833 |
Fair Value | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Borrowings under revolving credit facility | 42,716 | 38,566 |
Fair Value | Term loan | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Term loan | $ 0 | $ 9,833 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Effective Tax Rate (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Income Tax Disclosure [Abstract] | ||||
U.S. federal statutory tax rate | (35.00%) | (35.00%) | (35.00%) | (35.00%) |
State income taxes, net of federal benefit | (4.80%) | (4.80%) | (3.80%) | (4.70%) |
Non-U.S. income taxed at different rates | (0.10%) | (40.80%) | 0.10% | (37.20%) |
Excess tax benefit related to stock-based awards | 13.40% | (0.00%) | 10.70% | (0.00%) |
Other | (1.80%) | 2.80% | (1.00%) | 2.50% |
Effective income tax rate | (28.30%) | (77.80%) | (29.00%) | (74.40%) |
Common Stock - Reconciliation o
Common Stock - Reconciliation of Changes in Common Shares Issued and Additional Disclosures (Details) | Nov. 09, 2009series$ / sharesshares | Jun. 30, 2017$ / sharesshares | Dec. 31, 2016$ / sharesshares |
Stockholders' Equity, Number of Shares, Par Value and Other Disclosures [Abstract] | |||
Common stock, shares authorized (in shares) | 80,000,000 | 80,000,000 | 80,000,000 |
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 100,000 | 100,000 | 100,000 |
Preferred stock, minimum number of series authorized (series) | series | 1 | ||
Preferred stock, at par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Reconciliation of changes in common shares issued | |||
Shares issued, beginning balance (in shares) | 59,684,669 | ||
Issued as restricted stock award grants (in shares) | 168,756 | ||
Issued upon exercise of stock options (in shares) | 651,188 | ||
Shares issued, ending balance (in shares) | 60,504,613 |
Common Stock - Stock Repurchase
Common Stock - Stock Repurchase Program (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 25 Months Ended | ||||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2015 | Nov. 30, 2012 | |
Equity, Class of Treasury Stock [Line Items] | |||||||
Cost of repurchase of common stock | $ 487,000 | ||||||
Stock repurchase program, remaining amount | $ 54,400,000 | 54,400,000 | $ 54,400,000 | ||||
Credit Facility | |||||||
Equity, Class of Treasury Stock [Line Items] | |||||||
Share repurchase covenant | $ 4,400,000 | ||||||
Share Repurchase Program, November 2012 | |||||||
Equity, Class of Treasury Stock [Line Items] | |||||||
Stock repurchase program, authorized amount (up to) | $ 25,000,000 | ||||||
Repurchase of common stock during period (in shares) | 50,000 | 0 | 50,000 | 0 | |||
Cost of repurchase of common stock | $ 500,000 | $ 500,000 | |||||
Average common stock repurchase price (in dollars per share) | $ 9.76 | $ 9.76 | |||||
Share Repurchase Program, June 2015 | |||||||
Equity, Class of Treasury Stock [Line Items] | |||||||
Stock repurchase program, authorized amount (up to) | $ 50,000,000 | ||||||
Repurchase of common stock during period (in shares) | 0 |
Business Segment, Geographic 64
Business Segment, Geographic and Major Customer Information - Additional Disclosures (Details) | 6 Months Ended |
Jun. 30, 2017segment | |
Segment Reporting Information [Line Items] | |
Number of reportable segments (segment) | 2 |
Customer Concentration Risk | Minimum | Sales | Major Customers | Energy Chemistry Technologies | |
Segment Reporting Information [Line Items] | |
Percentage of revenue by major customers | 95.00% |
Business Segment, Geographic 65
Business Segment, Geographic and Major Customer Information - Reportable Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Summarized financial information regarding reportable segments | ||||
Net revenue from external customers | $ 85,177 | $ 64,079 | $ 165,131 | $ 127,890 |
Gross profit | 26,091 | 21,718 | 53,833 | 45,511 |
Income (loss) from operations | (1,252) | 156 | (1,874) | 524 |
Depreciation and amortization | 2,991 | 2,402 | 6,023 | 4,651 |
Capital expenditures | 2,631 | 4,448 | 4,508 | 8,238 |
Operating Segments | Energy Chemistry Technologies | ||||
Summarized financial information regarding reportable segments | ||||
Net revenue from external customers | 65,875 | 43,385 | 126,640 | 88,064 |
Gross profit | 22,804 | 17,660 | 45,106 | 36,429 |
Income (loss) from operations | 9,299 | 7,584 | 17,848 | 15,597 |
Depreciation and amortization | 1,795 | 1,237 | 3,644 | 2,480 |
Capital expenditures | 1,956 | 3,685 | 2,470 | 6,699 |
Operating Segments | Consumer and Industrial Chemistry Technologies | ||||
Summarized financial information regarding reportable segments | ||||
Net revenue from external customers | 19,302 | 20,694 | 38,491 | 39,826 |
Gross profit | 3,287 | 4,058 | 8,727 | 9,082 |
Income (loss) from operations | 1,216 | 2,686 | 4,921 | 6,075 |
Depreciation and amortization | 583 | 608 | 1,162 | 1,118 |
Capital expenditures | 397 | 204 | 897 | 346 |
Corporate and Other | ||||
Summarized financial information regarding reportable segments | ||||
Net revenue from external customers | 0 | 0 | 0 | 0 |
Gross profit | 0 | 0 | 0 | 0 |
Income (loss) from operations | (11,767) | (10,114) | (24,643) | (21,148) |
Depreciation and amortization | 613 | 557 | 1,217 | 1,053 |
Capital expenditures | $ 278 | $ 559 | $ 1,141 | $ 1,193 |
Business Segment, Geographic 66
Business Segment, Geographic and Major Customer Information - Assets by Reportable Segments (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Segment Reporting Information [Line Items] | ||
Assets | $ 359,177 | $ 383,215 |
Held for sale | 7,197 | 43,900 |
Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Assets | 351,980 | 339,315 |
Operating Segments | Energy Chemistry Technologies | ||
Segment Reporting Information [Line Items] | ||
Assets | 195,963 | 184,328 |
Operating Segments | Consumer and Industrial Chemistry Technologies | ||
Segment Reporting Information [Line Items] | ||
Assets | 117,037 | 98,105 |
Corporate and Other | ||
Segment Reporting Information [Line Items] | ||
Assets | $ 38,980 | $ 56,882 |
Business Segment, Geographic 67
Business Segment, Geographic and Major Customer Information - Geographic Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenue | $ 85,177 | $ 64,079 | $ 165,131 | $ 127,890 |
U.S. | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenue | 71,836 | 49,381 | 136,485 | 101,987 |
Other countries | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenue | $ 13,341 | $ 14,698 | $ 28,646 | $ 25,903 |
Business Segment, Geographic 68
Business Segment, Geographic and Major Customer Information - Major Customers (Details) - Customer Concentration Risk - Sales | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Customer A | ||||
Segment Reporting Information [Line Items] | ||||
Percentage of revenue by major customers | 13.30% | 17.50% | 12.70% | 20.70% |
Customer B | ||||
Segment Reporting Information [Line Items] | ||||
Percentage of revenue by major customers | 10.10% | 13.30% | 9.90% | 12.80% |
Commitments and Contingencies (
Commitments and Contingencies (Details) - lawsuit | Mar. 30, 2017 | Jan. 31, 2016 | Jun. 30, 2017 |
Punitive Lawsuits Filed in the United States District Court for the Southern District of Texas | |||
Loss Contingencies [Line Items] | |||
Number of lawsuits dismissed (lawsuit) | 4 | ||
Number of lawsuits filed (lawsuit) | 1 | ||
Derivative Lawsuit Against Officers and Directors | |||
Loss Contingencies [Line Items] | |||
Number of lawsuits filed (lawsuit) | 3 | ||
Derivative Lawsuit Filed in District Court of Harris County, Texas | |||
Loss Contingencies [Line Items] | |||
Number of lawsuits filed (lawsuit) | 2 | 1 |