FTK - Earnings call transcript Q1 2019 | Flotek Industries, Inc.

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Operator

Greetings, and welcome to the Flotek Industries First Quarter 2019 Earnings Conference Call. [Operator Instructions].

As a reminder, this conference is being recorded. It is now my pleasure to introduce Danielle Allen, Senior Vice President, Global Communications and Technology Commercialization for Flotek. Thank you. begin. may you Madam,

Danielle Allen

Chief good on We Chisholm, today's Executive Wilkinson, and and And Chairman, your with Chief our Elizabeth and me call Officer; Officer. morning, you, appreciate everyone. participation. President Financial Thank are John

which Our our available website. distributed on is earnings was press release yesterday,

on deck. In addition, available being along with replay will webcast, today's website, and our call be is our updated investor

of within this are plans, may forward-looking I exclusive statements. or to of our intended variations are identify could that expectations to discuss involve statutes such statements. actual about forward-looking but XXE this our Securities our begin estimates like expressions to believes, discussed such reconciliations press XXXX statements during impact in formal our constitute that management including and our SEC such Risks identifying cause on or reflecting results Form an differ comments words refer XX-K. of provided the and remarks, events These of forward-looking would other meaning XXA such and Words call, their potential earnings we as Section of and similar the uncertainties of release from applicable statements Before not to non-GAAP Exchange filings, Act future metrics participants on some Also, Act may of please comments risks matters in call. are anticipates, means Flotek's of the forward-looking remind expects, Securities Section views, performance. XXXX as and

questions we our may prepared any have. remarks, after Finally, you answer will

over it So will to with turn I John. that,

John Chisholm

seeing start prices industry us year. for of meaningfully clearly appreciate increase everyone has call. today's Thanks, the joining The Danielle. the from entire crude enjoyed We

for first U.S. drilling backdrop continued quarter, oilfield expect However, second for completions environment an operate to quarter. of during a and activity, similar onshore heightened the we volatility sector and in services the the

fourth were steady revenue to with first quarter. total have hold As such, quarter pleased we the

wellsite. from benefit allows which full-service our our work offerings. our fluid directly direct-to-wellsite to achieve to our to to of continued reservoir-centric directly we value quarter, holistic platform, first systems Prescriptive or provider the of a full approach, transformation the the chemistry clients PCM us During This at and to Management clients Chemistry with is our

prevention horsepower incompatibility loss reduced production expected any mitigation especially fluid $XX in in pricing hits parent environment, requirements, In barrel, backdrop, reservoir to through of current and child WTI the but and and frac impact pressure positive of technologies. industries, slower to a wells. on per short- and $XX has gas and in on and oil for Compared operators the capital both been E&P programs. benefits adopt in material other clearly drilling our the continue sustainable systems. completed increased full-service studies for customized to our ratio, long-term seeing economic We have by closely gain the benefits chemistries. in also drive our higher differentiated lower operational market list further technologies these monitor pull-through gas-to-oil incremental costs to while basins are of fluid Several chemistry with market of improved levels over and proprietary offerings. multiple shown efficiency, includes production we our traction provided most these long-term of completion a to of The to and traditionally and new penetration, combination the past To avoid PCM increased capital clients year benefits has value-add working return benefits their the

new to operators build offerings value technologies. commitment we time, our results a critical are substantiate As can Client marketplace. further the operations and some in proposition see want as related such, in longer-term and making adoption unique product studies personally their to take our the to before

impacted strategic and market pricing opportunity of operating of approach clients. have programs for limited margins current targeted the As it we would. fragmented has in we dynamic a knew we outcome-based variety number as near-term sought environment, utilized our This the to focused seize a

to we designed studies, are includes efficiencies XXXX long-term the improvement half of of into in the business these our improvement their delivery in clients sold. do aspects of the complete Further of supporting and last-mile down cost-reduction and in half changes strategic year second latter incorporate development as benefits programs. drive our initiatives related other margin currently in logistics them operations. improvement drive and underway our full increased their of This goods cost the our custom expected additional see and the expect However, chemistry enhancements offerings to

quarter have supported structure we which cost included our continued business expense year, of been has been one that across last down company. the first difficult, structure success. X. to the the XXXX, A to made our the of process model long-term that segments evolving tough adjust recognize have fully business and our During lot while that X And meet from began our decisions we reducing significant optimization cost to efforts ensure been necessity felt

opportunity take the sale Florida for critical again as ADM thank employees develop and of the opportunities this to explore our new a all continued oil gas agricultural of significant work of our as such, and significant hard The pure-play their customized, to encouraged financial performance-enhancing we and most to and new-generation with industry. ADM. I'm of industries. The first potential to dedication. provides technologies want solutions once and oil the was As sale work upstream us position quarter flexibility to chemistry the for Chemical highlight I gas the provider with about in

company. and working transaction $XX remaining Chemical This alternatives Flotek Strategic for capital net make the determine progress $XXX Committee our fees, facility. our As every committee Elizabeth its process net of their Chemical. of the and on execute deep independent we every approximately the of to every in began adjustment process, channel the Florida This receiving in analysis pleased with that Florida a product, best to I to am our resulted the after as is evaluation strategy. proceeds report of Nierenberg every million assessment of use service, includes of even to director every sold Wilkinson, $XXX sale and the Capital and continuing a proceeds balance customer distribution reminder, every a repayment from ability million. of market, the million Under credit our to on related remaining direction thorough it relates a co-chair strategy dive into David CFO,

Citi As would one takes I expect correctly, time, done this we been while us to has be progress still have process assist would is to made, in process substantial this underway. the process. note enlisted and

as months. the as Directors the it Capital shareholders. addition, We in development coming organic most a results over for the arrives committee to for well to discuss is options Board a on opportunities. focused be drives is and over a that, Elizabeth clear, value as look financial I'll and updating added newest committee. our The made forward the underway of In on as that at joining a with turn efforts well To the of that that investment perspective and inorganic to timely Committee. process we evaluating in of our fresh capital strategy shareholders more our shareholders recently detail recommendations Paul With conclusions Hobby, Strategic by deliberate our director, committee return to the

Elizabeth Wilkinson

tables segment periods. a of in financial our press for all operation as the discontinued our CICT Thanks, John. release The present operations

continuing corporate As our as business discussion and as include such, my our supporting focus I well and operations, results which energy today innovation functions. our will research on quarterly for

doubtful higher Operating John or U.S. in fourth a we These continued and the software increased XXXX, quarter and As were reversal with drilling accrual license of was the the first quarter bonus onshore writing down million longer completions and $X.X number accounts primarily to pleased of increase expense allowance volatile costs due quarter write-off in $X.X items. have either in items million discussed, the revenue million quarter from a quarter given $X.X of customer the fourth environment that noncash fourth $X.X a of nonrecurring for XXXX. no needed material to included the a to million net receivable. a of activity, due specific flat first taken primarily a for essentially

and $X.X related flat called increase EBITDA out that out operating severance quarter-over-quarter to overall our lower shareholder-related the to in increase million $X.X million rose in provided $X.X release. in logistics accrual XXXX, accounts adjustments in QX and to G&A costs and However, Corporate are offset that license adjustments bonus $X.X reflected the in note partially offset doubtful write-off fourth expense innovation nonrecurring to for called severance lower approximately The for to I Research as first the million. EBITDA. in were the quarter. reversal, table activities adjustment software Please quarter. partially costs million are shareholder-related activities costs as note would not $X.X the million costs allowance from at by quarter-over-quarter.

from primarily associated the against which needed the of software deferred with trucks statements. on we loss a the recorded We share. developed or first increased $X.XX of certain was certain unamortized with assets our reversal fourth statement. of $X.X a as million $X.XX or closing corporate miscellaneous internally reported a trailers. continuing per quarter company's loss $X.X of financial to million quarter, the million $X.XX consisting year-end for sale and of income share. operations and an the due of primarily diluted share We or versus to per financing the quarter a diluted acceleration we which basis, operations write-off for combined from subsequent tax million for tax first $XX.X continuing from benefit million allowance quarter, facility. issued quarter tax the $X.X of Florida of a quarter adjusted the to $X reported continuing the deferred result our termination operations million fourth upon a million operations valuation was per due as to during longer the of first or no quarter Interest first forklifts, $X.X diluted On primarily million from earnings the diluted compared down $X disposal share loss income benefit operating Moving of equipment million fourth recorded for $XX.X from of of in to fourth disposal the assets Chemical before loss costs a expense of quarter associated per was $X.XX of business $XX.X compared deemed credit of The continuing

certain fourth quarter. first for well as first loss the as in fourth reversal, quarter. loss partially was net million Again, lower I million increase a a mentioned, items write-off for allowance offset These the logistics costs Contributing of first higher license and reduced to for quarter increased loss the loss $X.X mentioned EBITDA quarter the the a to accounts. quarter margins the as I the doubtful product overall as included compared accrual of the a the $X.X bonus earlier. software were of in adjusted Our

company the of quarter improved of Looking position result Florida of during Chemical. the a materially the first at sheet. sale the balance The financial as

had to of XX, December escrowed of as and As outstanding. in of March the equivalents This $XX.X $XX.X and no funds cash $X XXXX. debt of of $XX.X company the compared transaction cash cash equivalents related to is debt temporarily million and million XX, cash million million plus and

during structure, As we made our cost-reduction John execute we to continuing XXXX. mentioned, on progress XXXX and cost in efforts in are optimizing important

to track. million identified call, million per To quarter the of As our incremental latter number and across of quarter $X have discussed innovation in half expense we of company. on savings $X XXXX. approximately result be on the in will This initiatives sustainable per corporate our getting research G&A of includes and and remain that fourth quarter cost earnings clear, efforts a levels

Looking continued environment activity. volatile we and for expect U.S. onshore completions the second drilling at a quarter,

near-term year this strategies John we discussed. the of second backdrop, pricing not improvement be Given the that margin by we as impacted will anticipating until half are

said, as of latter addition, do to XXXX. see full quarter. mentioned, that is In of our just neutral I we that aggressive note efforts I the will current the half until expectation our remain cash That -- will value in expect cost-reduction second not we see the

of nearer-term of view the Directors as proceeds a to additional net there. ultimately, Committee, our the from our resolution use recognize co-chair Chemical. number Board shareholders sale perspective best of would that clearly some and, remaining the wanted process As follow-on our like John's I to of on to Capital to provide as get committee We what comments of the as Florida the Strategic and a

capital our our multifaceted expectation date are spending that report ongoing a evaluation, We to I'm a in robust, happy has process XXXX. utilizing in to review resulted clear to but for as still

spending First, based evaluations, our capital maintenance on million approximately $X of XXXX. we for anticipate

have also We tell XXXX. of also projects any maintenance level expect do significant annual can planned this a our beyond capital you similar year, we of growth expenditures not for I that current operations. assuming footprint capital

spending total year, total during million our current patents capital not for the As expenditures a this that result, the to is year. including capital approximately million will capital expectation for likely maintenance $X for $X.X spend related

discussed, the of company combination. options in business the for interest John our us capital As through time our that the we deployment, a do is shareholders to feel review long-term to of for investments best to of in and return capital it future or further thorough the some various whether our shareholders, take be

proceeds the We in have most we consider as dividends undertaken taken review what from Chemical. different forefront value clear, shareholders. an best Florida To alternatives the of the our are the exhaustive a lens our repurchases and creates an of use net to both review sale thinking using -- be exhaustive of share our of the of returns

to more that relates grow in to could see increased efforts lead including number of fact, organic additional product know lines business, we presence, technical marketing and investments, we that to our and and we profitably lines would service. expanded international scale, new and need of an enhanced achieve opportunities it a existing As domestic

also working we time these manufacturing we mentioned, efforts of bottom we improve require processes our and Having full as the benefits recognize logistics In said all are line results. to further capital. and to realizing take will have that working addition, enhance that,

allow time. organic challenges the investments, our a inbound way as are well want as while take our expect integrating the operations more to position limitations to desirability inquiries operations in that as the have number of obviously to opposed on life logical market inorganic while consideration the and inherent the us you significantly We utilizing the at summary, inorganic, options customers. also Looking profitable want our complete we and completion thinking of business consider expand closely to the phase. available with of to our shareholders' received opportunities. broaden all In analysis. we growth exposure of options any consider present of appreciate the this might patience the considering into opportunity Whether the our a of would related to buying carefully it well another into remaining forms risks cycle concentrated different of are to Playing and some align existing on to or table, at we to our we and time carefully that us

our John we And cash to comments. made I turn shareholders over be on to John? finally, his now will look and John mentioned, we quarter. As of the that conclusions the it recommendations to I updating to neutral to forward Directors Board months. expect closing the in second reiterate for back coming want

John Chisholm

on Similar transparency. operators has efforts sand, of to operators directly. are Thanks chemistries well pressure completion connection spending, return capital service a oilfield lot, and more truly from their operators to generation offerings and Elizabeth. E&P cash and Heightened capital to and providers on diesel accelerating scrutiny flow source and escalated demand in process. for expanding product investor improved has the decouple price placed as economics differentiate with service frac This

significantly returns invested As unique our to more enhance of to over in facing customized both efficiency. understanding of In and system we completion operators we've products technical discussed economic and decade portfolio past, and proprietary further than critical designs have recognition are expand our capital of is reached as mechanical some environment, a reservoir fluid have and accumulated this cases, and, performance in our Chemistry applications. in-house driving the exceeded technical variables the for limits designs. enhanced in diminishing

offerings. where and differentiated the in unique his we what leveraging deep we are is prevailing where push and using Flotek right as chemicals key offerings market wells our industry and as approach application performance dosages this oversee In programs. well for sustainable wrong week, not us Vice than more will we business announced domestic international of a Flotek led products that strategic he to where and of Africa, the past, in delivery to our unique through role, to relationships completion strategies to President Senior makes a profitable operators company's Mark mitigated extensive price-per-gallon of to These set Global from and came in sizes. frac Lewis growth Sales for impact To position share its does from pursue forward driver Mark our success. As market for and in we in more acreage leverage by where differentiated competitors improved, where the stated upstream Flotek long-term sales chemistry, Americas, are Development. With that of units, systems us and is joined believe our Hughes, the production, strategies development as Business not the maximum lead as Middle business best place the experience, mechanical a hits metric the fluid industry. to operators' set will well and clearly ratio damaged he optimized the forward technologies and work and than gas impact the oil teams has both XX our last gas-to-oil future solid accounts on this is hand the advancements services chemistry Mark Baker as well gas years chemistries, experience products hand and We and of apart all enhance long-term Mark Pacific the includes where through selecting overall to position, in Europe. rather and where vision East, to Asia the technology-driven potential This fully we downstream reach to in oil the wrong lead developing clients. provide look and skill

related May. service occur Meeting proxy, our are Board most Finally, seen her Annual in have of of I slated Board. and to Richard, extensive is to the Included that want in following as to and for contributions there our expect changes thank departure our you Kate are I the Kate to

up questions. I've session. we'll role And as co-chair David join with note the Strategic our of us open to Nierenberg So for now questioning I'd asked Committee, that, Capital given his that for

can you operator, lines. now open So up the

Operator

[Operator Instructions].

Our Rice. first Georg question Johnson from comes Venturatos of

Georg Venturatos

thoughts of coming large really landscape, to particularly after trying some the obviously, and term, the with question, consolidation I kind majors independents But of you more of John, the that, in just and a that on and focus it off on Permian, longer years? roles How wanted changes a bleeds how sales few scale side. to all are production. side kind potentially front I get maybe your and get on into sales over and on overarching go kick the And that what may be fewer changing players about being strategy of higher-level to in the changed leadership wanted one? a are driving kind in of next your has to of landscape

John Chisholm

the for Thanks question.

falls and to have that wanted as what actually, Mark fact we a going of how large we're are of And felt or so X the focus driving was into experience we from be that long with has global he to players Flotek. he approaching top not And a that we that's our why basis technology, he the targeted our The reason couple with took sales Mark. that wanted multi-basin the effort. bottom for supply the weeks, term, operators to a to was a here a months, on process call of This chain for the position. C-level dealing we believe and couple X from why,

not drill disciplines geologists of they with engineers, more operators seeing more occurring involved were that those kind geophysicists then We but selection of the reservoir areas on. inside selecting is these in -- to and outright with and involved where they are and technology previously typically moved just weren't with, if influencing that with

research position and the the that level Now where process that, folks. certain with in to they're the Flotek, oil more of rock, get trying innovation, where a those being and to engaged appeal chemistry custom technical has of of suits feel the we ideally out we

to done. to organization people as So degree But reservoir evolved degree its we've constant. in with not that chemistry, whether that, and tune their sales It's more backdrop, engineering. we've is evolved that like in we're our -- is with that a in are

more girls, execution team which fellows, know completion. way now think these frontline evolving. lot the that engineers petroleum pushing for efficiency, with The are and effectiveness people but part we I call industry, we've the a we're now of the completion more big one selling really engaged a geology research, got are is is also, That's of empowered the important. of on the at of believe, into very because out reservoir would equation. that we what ladies more And other of

these a been change we the major clients, that approaching it's in way are gives hopefully, the So you and backdrop.

Georg Venturatos

to I I to item No, longer, guess were some targets neutrality helpful, you intermediate-term that's R&I provide all cash second wanted Elizabeth the on the Last in at John. Other discuss, able quarter, line. and quarter. mentioned least G&A

could process Just you an are few update that see in we of quarters. stand kind to of whether next get and still the intact wanted over if those where

Elizabeth Wilkinson

absolutely. Yes,

in earlier for the to G&A that expect we As the million mentioned, end year. improvement quarter the quarter. by a about expenses the are in but $X to really down of to see you absolutely our even should R&I $X a second to million our some and down there quarter continuing about get And get actually, call,

Georg Venturatos

a result some there, kind out counteract. to maybe has in potential items just re-queue. been of I'll called margin the of next the to efforts the wanted And side? then some the inflection to as can then back and should talk the of one, expectations of you confirm that couple But some the Okay. that the last based quarters, that sounds you what magnitude it marketing I on margin you half of starts that. see maybe and of drag maybe as -- on like, in But

John Chisholm

basis of of even -- we it points also called one want of kind Yes. has I you said What morning you number And just note. with thing I there give X to think expected want months reestablish out couple your been drag. Elizabeth in We'll out soft hundred we a had capital. circle is a the what ago because kind put to of

Now Strategic we being but from to great chemistry. oversupply to cascades a part of up I now in we that But Capital whether that think other of thing fleets that is it's expected that's put sector fracturing it want keep out that event, million this drilling meaningfully something million, volatility Committee. so level completions, see it's frac been with by there familiar work about not equipment, I associated which fewer everybody's the sand to of $X talked is takes much the whole $XX with keeping rigs. with of or to And changed an now certain which whether that's the or everything is pretty pricing it's think that

years So two fleets four to ago, would what's rigs. it is really keep two happened frac take with up

Now it's like kind one. of

a you year. improvement a that's work the through the margins. to the we can't number give itself expect I as the and we is there's on Georg, so said, certainly number we that to improve sorting harder which still why on out, drag But And that

Operator

Urban Our next Global. of question comes Seaport from Mike

Michael Urban

for around Sorry I'm today. background noise. Boston running the

undertaking on efforts the of that and around a logistics distribution. some So you're question

volume of correctly, that organic be model. little I the there, to a current of do -- of you that's I'm you get see it bit your have that you is does some at need scale? at? looking are flow Are if some underway, PCM or Or to about efforts a things point whether think distributed cash thinking more where those get and inorganic profitability you and sustainable to might of growth kind a

Elizabeth Wilkinson

arrangements. definitely policies and Well, at that both. we're logistics service and we of And different working, relates on related delivery logistics actually, some procedures across our headway working specific significant address lot engaging to indeed, obviously, a generally to in It efficiencies and tightening to our we're yes, of But looking see to just make experts eager sales expect involves to business. issues costs.

Michael Urban

need consistently do a can the things demand cash profitable -- more those you with sense you have And where Or get do you to and do and a you scale? volume, level positive? for be point, of

Elizabeth Wilkinson

Yes.

with things environment. that's to this call, positive where So we of part our $XX this adjusted us get oil the to towards that the in what we're year. I our consistent a mean in I target point to we're weaker doing endeavors EBITDA last conference after, and mean our get $XX, year cost-cutting the a even latter is

Michael Urban

you frame out plans forward, think Does there. figuring time year? the the just Okay. what terms kind has in mean And terms expecting capital we're terms in element a It's the that -- But really take rest event? committee a I -- look is conclusions a this that this proposition of are then of cover, critical Got at. what of lot quarter things some value a going fully is ground of to rough I recognize that of you. to the the lot of of here. just just we should of about in

John Chisholm

him you the would why which to him chime But that And August this. it'd be in reasons, David of co-chair asked on when to actually, great. I Sure. one in to suited, want be if David, wanted is of we the Board, there? he not ideally this is question, but foresight, It's take come

David Nierenberg

for you, question. Thank thank your John, and you, Mike,

provide slip, meets we're a from stakeholders That As you why trying early guarantee, creates also July, Board some, at conserving to in perhaps, We Hope quarter least the elimination different do. earnings project the time. the potential could deliberations. that to cash job what second end this that's heard the of however. hope of August. deliver to when we to call most at but our like the would through which from company Elizabeth's our our about do a our to go to we nice recommendations comments, at be that to while moment, some this Board takes doing have of when I able is course, mention we date this is could of

would they responsible was we so ourselves outside report that to always there's millions very we And that at decided do own the consultant's that that our to to that consultants. of dollars Otherwise, Flotek rather spend than gathering would a team expensive not reason this strategy did First, that want on become risk work did happen. for can executing. the dust, and a a be doorstop we

could new even the profitability, that made including foundation allocations, it about talked not that the the of this a the has product you Elizabeth, process vicinity capital John going the on deliberative $XX all million as a very and process beginning through going inclusive, as already CapEx we're about is virtually that of $X hearing trying the maintenance spending also this we're types finally, Elizabeth allocations. for SG&A analytical is freight, said build we've that completed stakeholders at to and that, measuring process years from very basis. regular last to and million data-driven making heard, value confidence year. though we Second, a and the you've call. and the Flotek you've from important system get the managing that from of company some be appropriate is we an heard process data reliable And how through the understandably use the committee the important performance about possible suggested connection is the X returns and be with system about has decisions out look on good data work, of wanted it's in information than the its line conversion heard that, in But having of business, rather data. that year, And yet completed company. committee

reduction level maintaining the heard, maximum you've across pressure and lower company breakeven the as intelligent Second, board conserve cost on to cash. our to is

committee, we compensation the and process, incentive is team put quarterly of uncertainties place, and for for one growth driving focus committee new environment, given might in costs. wonders later in executive C&S, and Elizabeth a on The growth to it's expense should sure we a inorganically rather We we the going committee individual making both in inorganic. compensation absorb foundation. the why, growth, capital better her if and setting the that be business more and from first the is members deliberation to make do right investments revenue purposes that make goals using placed in that on for in budgeting members add want profitability, that are we revenue company's and whatever is our than also that sales a share which sure to can and already on bias organic solid and macro And are PCM basis marketing. We R&I and our to both the focus to drive our have current sharp want rigorous because we see

we without distraction. we optimizing remain today So on have riveted what

is effort, customers, as leading of We better are, right our segment value-added about, growth to demonstrations. our heard a them however, to pursuing our approach you've initiatives an Danielle and to better now. number target improve

improve through reduce so design costs We continue improvements, of working CnF can we to the profitability.

has the done which hope that to things about use we we analogy, We for, Best a we reduce be activity. the might contiguous company's during un-cyclical more And some business, applications are of Buy that intelligently, unpredictable CnF are said, able and looking big considering to on reliance by in ways so as their word, later also to, with summer. Elizabeth talk overtime, the drillbit to and of PCM decommoditize

get speaking So bet sized as to I on activities. digestible myself, have would strategy than in we is for tuck-unders inorganic. the company growth for focused, When initially a say opposed as of and considering point our inorganic, said, rather conclusion organic preference to that the I prudently I

company. We are self-help about the now but first remain improve of really we on organic the accumulating tightly ideas that, to do solutions focused performance

that by successful way, are to acquisition do Flotek's out of share that turned a as not be. of Chemical acquisitions the We most as Florida also bias, companies the

many too do value builders. that not companies fact, In value are destroyers, acquisitions

the to But cash until The repurchases committee, we keep no business. shareholders. due builds share we of your value bat diligence, subject swing considering on repurchases long-term for back to in completing its bias the that strategy of is We for first, the growth work can done special by supplemented is fat would to of -- intend shareholders. the then the the finally, investment dividends. benefit that benefit perhaps, there is excess first share our called are a the As best it to the say will the strikes shoulder once says, you And with put Buffet pitch. at are opportunities, take

confident, the end to the strategy in my business of And the well. in as in shareholders, also the hypothesis filibuster. want of is already But on as [indiscernible] cash our act to returning this prudent place. As Flotek's many committee to ability at do people this time, that as to both a know, a authorization that and stakeholders the all behalf we, Board, confident before to execute is and strategy

Operator

Instructions]. [Operator

from Our Growth. next of question Morris Baraboo Walter comes

Walter Morris

amount sequentially of items tough the My you reversal Congratulations environment. earlier, for and a software nonrecurring they flat the holding the why Elizabeth. you on X about question another involved in the adjusted write-off, revenues EBITDA. each were as your and talked reiterate in didn't is you Could bonus item? included oilfield Reiterate of consider net not or in and area calculation dollars why those

Elizabeth Wilkinson

Okay.

about so write-off... So you're -- talking the

Walter Morris

reversal bonus. of The million $X.X write-off, software

Elizabeth Wilkinson

Yes.

Okay.

guess saying So do we bonus don't we call-out bonus accrual, a accrual adjusted bonus the Like as or is in fourth don't -- we the million occurred I I'm to what to that to thing. impact case, reversal quarter quarter, we don't not $X.X of EBITDA and business. EBITDA. fluctuates nonrecurring the accrue when take that continuing it quarter to treating really make that although doesn't our that as we a in because piece sense truly adjust that to be consider that us And it a remove of reverse

for was circumstance system. need into were be transitioned to that's another we didn't And That's a our is part software something to license. to a it continue as operating ECT, ERP JDE we which it -- an using. ERP write-off, our software of thing with product system regular a and that our therefore, integrated the happened other linked expense -- like The where booked

couldn't off that so get already previously. license was -- much had committed payment And wrote annual though even required we been we the out of making an paying that

sort doing results. the So that other it's something noncash same like as whatever habit it's of usual. I our out you make that's ongoing of part operating don't fluctuations taking, the we business, might business time, accounts. just mean at but of case and Then adjustment, where of the thing. Same pulling ongoing operations, just allowance you was of allowance in really part for it's and be another have general And doubtful one? then a what

either. be nature We that that of try to we the items that reflect really So and that that of nonrecurring, truly we call do we the terms don't thinking business. would significant don't unusual of of in make things the out what more ongoing we call out

Walter Morris

was how And did say? the you software write-off much, license

Elizabeth Wilkinson

That was $XXX,XXX.

Walter Morris

allowance doubtful the accounts? And for

Elizabeth Wilkinson

Roughly $XXX,XXX net. adjustment,

Operator

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

John Chisholm

Thank you, Nichole.

normal have our progress will profitable, financial volatility, our service today. our Just again. ahead again transforming all and efforts our long-term us true to today drives that of Flotek technologies strong joining in we the interest everyone's Underpinning and and business significant ask for weekend. industry-leading we've We completion In in shareholders stakeholders. to a remain chemistry want day, to new a to of support you Thanks our appreciate ongoing offerings. and build aggressive all a commodity cycle activity better looking leverage and benefits everyone in great the great our say and anticipated thanks is position, for business a efforts direct-to-client made

Operator

for today's The conference presentation. attending you Thank has now concluded.

now You may disconnect.

Flotek Industries (FTK) 9 May 192019 Q1 Earnings call transcript