Flotek Industries Inc. (NYSE:FTK) Q3 2017 Earnings Conference Call Transcript
Nov 08, 2017 • 10:30 am ET
Good morning and welcome to the Flotek Industries, Inc. Third Quarter 2017 Earnings Conference Call. All participants will be in a listen-only mode. There will be an opportunity for you to ask questions at the end of the Company's prepared remarks, and operator will provide instructions on how to ask your question at that time. (Operator Instructions) This conference is being recorded.
At this time, I would like to turn the conference over to Matt Marietta, Flotek's SVP of Corporate Development and IR. Mr. Marietta, you may begin.
Thank you and good morning on behalf of the Flotek team. Joining me this morning are John Chisholm, Flotek's Chairman, President and CEO; Rich Walton, our CFO; and Josh Snively, EVP and our Head of Operations, as well as other members of our leadership team and Board.
Our earnings press release was distributed this morning, and is available on the Flotek website. In addition, today's call is being webcast and a replay will be available on our website.
(Forward-Looking Cautionary Statements)
With that, it is my pleasure to turn the call over to John for opening remarks, followed by a financial review from Rich, and insights into our operations given by Josh followed by our outlook. We will open for Q&A after the remarks. And with that, John?
Thank you, Matt, and thank you all for joining today's call hosted from our Global Research and Innovation Center, headquarters in Houston.
I'll begin by giving a summary of our quarterly results, followed by an overview of our business segments, and ongoing strategic initiatives aimed at maximizing our ability to generate free cash flow in future periods regardless of the commodity price scenario. Rich will then review our financial highlights for the quarter, and provide additional financial details followed by Josh, whose role at Flotek was recently expanded to oversee operations for our entire organization. We are pleased, Josh has accepted this critical role, and we're confident in his vast experience in chemistry manufacturing, efficiency improvements, as we believe this change will further integrate our organization. Josh will provide an operational overview on our Energy Chemistry Technologies segment, and an update around our citrus end markets, and ongoing initiatives at Florida Chemical, our integrated operating subsidiary within our Consumer and Industrial Chemistry Technologies segment. Finally, I'll end with closing remarks, and outlook before taking your questions.
Overall, Flotek's third quarter results were below expectations, primarily due to challenges we faced related to Hurricane Harvey, but also impacted by client slowdowns in the Rockies region in our ECT segment. Our CICT segment performed relatively in line with our expectations, while we were able to execute higher-than-expected sales after Hurricane Irma created disruptions in the global citrus marketplace. The third quarter was disappointing. However, our ability to extract cash from our business highlights the shift we've made from a diversified oilfield equipment provider, which requires higher CapEx into an asset-light pure-play specialty chemistry technology company.
For continuing operations, which encompasses our Energy Chemistry Technology or ECT, and