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Flotek Industries (FTK)
Q1 2013 Earnings Call
May 10, 2013 8:30 am ET
Glenn Neslony - Vice President and Treasurer
John W. Chisholm - Chairman, Chief Executive Officer and President
H. Richard Walton - Chief Financial Officer, Chief Accounting Officer and Executive Vice President
Steven A. Reeves - Executive Vice President of Operations
Marc Kevin Fisher - Executive Vice President of Global Business Development
Michael R. Marino - Stephens Inc., Research Division
Brian Uhlmer - Global Hunter Securities, LLC, Research Division
Rudolf A. Hokanson - Barrington Research Associates, Inc., Research Division
Previous Statements by FTK
» Flotek Industries Management Discusses Q4 2012 Results - Earnings Call Transcript
» Flotek Industries Management Discusses Q3 2012 Results - Earnings Call Transcript
» Flotek Industries Management Discusses Q2 2012 Results - Earnings Call Transcript
Thank you, and good morning. Today's call is being webcast and a replay will be available on Flotek's website. Our earnings and operational update, press release, as well as our annual report with the U.S. Securities and Exchange Commission were filed and distributed last evening and are also available on the Flotek website.
Before I turn the call over to Flotek's Chairman, President and Chief Executive Officer, John Chisholm, I wish to remind everyone participating in this call, listening to the replay or reading a transcript of this call of the following: Some of the comments made during this teleconference may constitute forward-looking statements within the meaning of section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, reflecting Flotek's views about future events and their potential impact on performance. Words such as expects, anticipates, intends, plans, believes, seeks, estimates and similar expressions or variations of such words are intended to identify forward-looking statements but are not the exclusive means of identifying forward-looking statements on this call.
These matters involve risks and uncertainties that could impact operations and the financial results and cause our actual results to differ from such forward-looking statements. These risks are discussed in Flotek's filings with the U.S. Securities and Exchange Commission.
Now I'd like to introduce Mr. John Chisholm, Flotek's Chairman of the Board, President and Chief Executive Officer.
John W. Chisholm
Glenn, thank you. I would also like to welcome each of you to Flotek's First Quarter 2013 Conference Call. With me today are Rich Walton, Flotek's Chief Financial Officer; Steve Reeves, our Executive Vice President of Operations; Kevin Fisher, our Executive Vice President of Global Business Development; Chris Edmonds, our Senior Director of Corporate Finance and Strategy; and Glenn Neslony, Flotek's Vice President and Treasurer.
I'm also delighted to introduce Josh Snively, President of Florida Chemical in his first call as a member of the Flotek leadership team. More on Josh in just a moment.
Last evening, we filed our quarterly report with the U.S. Securities and Exchange Commission. While we won't take your valuable time to regurgitate those filings, we will provide a summary of the results, attempt to add some color regarding current operations, as well as a sense of our future and then be happy to answer your questions.
However, before doing so, I'm pleased to tell you that this morning, Flotek announced an agreement to acquire Florida Chemical Company, the world's largest processor of citrus oils and a pioneer in solvent chemical synthesis and flavor and fragrance applications from citrus oils from facilities in Florida and Texas.
Since its founding in 1942, the privately held company has been an innovator in creating high performance bio-based products for a variety of industries, including applications in the oil and gas business.
Under the terms of the agreement, Flotek will pay $49.5 million in cash and 3,284,180 shares of Flotek common stock for the outstanding shares of Florida Chemical. In conjunction with the acquisition, Flotek has entered into an amended and restated credit agreement with PNC Bank. Under the terms of the facility, PNC has agreed to increase the company's total availability to $125 million, comprised of a $15 million term loan and a $75 million revolving credit facility.
Flotek intends to fund the cash portion of the acquisition through the proceeds from both the term loan and revolving credit facility.
In my nearly 4 years at the helm of Flotek, there has never been one singular event that I believe to be more important, indeed more transformational to the future of Flotek than our announcement of the acquisition of Florida Chemical this morning. Not only is the transaction accretive for Flotek's shareholders from an earnings perspective, it immediately creates the global leader in advanced industrial and consumer renewable and sustainable chemistry.
Not only has Florida Chemical been a key supplier and partner to Flotek for over 15 years, they've been a leading innovator of renewable and sustainable chemistry for the oilfield, industrial and consumer staple industries.
Flotek intends to leverage the vast expertise of Florida Chemical's world-class research facilities and chemists with its own research expertise to create a leading global research team in renewable and sustainable chemistries for the oilfield as well as other industrial and consumer applications.
Moreover, this strategic acquisition enables Flotek to secure supply of key raw materials, as well as direct control over raw material costs and inventory.
Over the course of the next several weeks, we pledge to provide more information regarding our exciting growth objectives with Florida Chemical beyond the financial and operational information we provided this morning and what is available in the Florida Chemical websites.