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FTK, Flotek Industries Inc.
A chemicals business, converting feedstocks into products at a spread the cycle moves.
Flotek Industries Inc. is committed to delivering products and services that endeavor to maximize customer returns by leveraging chemistry as the common value creation platform.
The business
What it sells, where the money comes from, the kind of company it is.
Next report By 11/8 · the 10-Q for the quarter ended late September · due within 40 days of period end · has filed ~38 days after · the wire records it on arrival
The business in brief
read the 10-K →What this business is and what moves its needle, from its own SEC filings.
- What moves the needle
- Operating margin has reached 12% at its best but run negative through the cycle (median −18%) on a 12% gross margin — so the question is which reading is truer: whether the median was pulled below zero by one-off charges, by the cycle, or by spending it is still growing into, and whether it settles back at a profit. Inventory runs near 13% of sales, so how fast it turns back into cash — and the risk of writing it down when demand softens — sits alongside the margin. Read this kind of business on the spread and utilization. On its own account, the filing leans hardest on pricing power & competition, set against the numbers in what the filing emphasizes, below.
- Is it a good business?
- Return on capital has rarely cleared the cost of capital (median −4%, above 15% in 2 of 9 years). Owner earnings, the cash-based check, have been thin too. This is price-taker territory, where the balance sheet and the cycle matter more than any multiple; the rest is in the 10-K.
Every line is arithmetic on the company's filings, shown in full in the sections below.
The record
Ten years of arithmetic, read across the cycle.
The record, 2016–2025
realized figures from each filing · older years to the left| 2016’16 | 2017’17 | 2018’18 | 2019’19 | 2020’20 | 2021’21 | 2022’22 | 2023’23 | 2024’24 | 2025’25 | TTMTTMJun 2026 | |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Income statement | |||||||||||
| $188M | $243M | $178M | $119M | $53M | $43M | $136M | $188M | $187M | $237M | $293M | RevenueRevenue |
| — | $28M | — | — | ($29M) | $3M | ($7M) | $24M | $39M | $60M | $72M | Gross profitGross prof. |
| — | 12% | — | — | −54% | 8% | −5% | 13% | 21% | 25% | 25% | Gross marginGross mgn |
| 23% | 17% | 18% | 23% | 43% | 47% | 20% | 15% | 13% | 12% | 10% | SG&A / revenueSG&A/rev |
| 5% | 5% | 6% | 7% | 14% | 13% | 3% | 1% | 1% | 1% | 1% | R&D / revenueR&D/rev |
| ($17M) | ($10M) | ($70M) | ($76M) | ($144M) | ($31M) | ($35M) | $23M | $12M | $23M | $38M | Operating incomeOp. inc. |
| −9.0% | −4.2% | −39.3% | −63.3% | −270.3% | −72.7% | −26.0% | 12.3% | 6.5% | 9.8% | 12.8% | Operating marginOp. mgn |
| ($7M) | ($11M) | ($81M) | ($76M) | ($143M) | ($31M) | ($42M) | $25M | $11M | $20M | — | Pretax incomePretax |
| ($49M) | ($27M) | ($70M) | ($34M) | ($136M) | ($31M) | ($42M) | $25M | $10M | $31M | $38M | Net incomeNet inc. |
| Cash flow & returns | |||||||||||
| $2M | $12M | ($21M) | ($5M) | ($48M) | ($26M) | ($45M) | ($11M) | $3M | $7M | ($2M) | Operating cash flowOp. cash |
| $8M | $10M | $9M | $8M | $3M | $1M | — | — | — | — | — | Depreciation & amortizationD&A |
| $32M | $19M | $33M | $17M | $82M | ($82K) | ($6M) | ($36M) | ($9M) | ($26M) | ($43M) | Working capital & otherWC & other |
| $13M | $4M | $4M | $2M | $1M | $39K | $421K | — | — | — | — | CapexCapex |
| 6.9% | 1.7% | 2.0% | 2.0% | 2.7% | 0.1% | 0.3% | — | — | — | — | Capex / revenueCapex/rev |
| ($6M) | $8M | ($24M) | ($7M) | ($49M) | ($26M) | ($45M) | — | — | — | — | Owner earningsOwner earn. |
| −3.3% | 3.4% | −13.7% | −5.8% | −92.7% | −59.8% | −33.1% | — | — | — | — | Owner earnings marginOE mgn |
| ($11M) | $8M | ($24M) | ($7M) | ($49M) | ($26M) | ($45M) | — | — | — | — | Free cash flowFCF |
| −5.9% | 3.4% | −13.7% | −5.8% | −92.7% | −59.8% | −33.1% | — | — | — | — | Free cash flow marginFCF mgn |
| $8M | $0 | $0 | $0 | $26M | $0 | — | — | — | — | $0 | AcquisitionsAcquis. |
| $0 | $5M | $0 | $0 | — | — | — | — | — | — | — | BuybacksBuybacks |
| ($22M) | $15M | ($2M) | $153M | ($18M) | $112K | $5M | ($1M) | ($2M) | ($2M) | — | Investing cash flowInv. cash |
| $23M | ($27M) | $21M | ($50M) | $4M | ($372K) | $38M | $6M | ($3M) | ($4M) | — | Financing cash flowFin. cash |
| ($3K) | $151K | ($88K) | $5K | ($102K) | $100K | $100K | ($54K) | $124K | ($155K) | — | Exchange-rate effectFX |
| $3M | ($239K) | ($2M) | $98M | ($62M) | ($26M) | ($934K) | ($6M) | ($1M) | $1M | — | Change in cashΔ cash |
| -4% | -3% | -22% | -83% | -801% | -185% | — | 24% | 10% | 16% | 23% | ROICROIC |
| -17% | -10% | -35% | -20% | -289% | -151% | -1630% | 24% | 9% | 27% | 29% | Return on equityROE |
| −17% | −10% | −35% | −20% | −289% | −151% | n/m | 24% | 9% | 27% | 29% | Retained to equityRetained/eq |
| Balance sheet | |||||||||||
| $5M | $5M | $3M | $101M | $39M | $12M | $12M | $6M | $4M | $6M | $4M | Cash & investmentsCash+inv |
| $47M | $35M | $37M | $16M | $12M | $12M | $19M | — | — | — | — | ReceivablesReceiv. |
| $58M | $32M | $27M | $23M | $12M | $9M | $16M | $13M | $13M | $11M | $27M | InventoryInvent. |
| $30M | $10M | $15M | $16M | $6M | $8M | $33M | $32M | $38M | $48M | $75M | Accounts payablePayables |
| $75M | $57M | $49M | $23M | $18M | $14M | $1M | ($19M) | ($25M) | ($38M) | ($48M) | Operating working capitalOper. WC |
| $189M | $138M | $195M | $154M | $66M | $43M | $80M | $76M | $96M | $111M | $168M | Current assetsCur. assets |
| $88M | $65M | $84M | $41M | $29M | $19M | $151M | $48M | $50M | $62M | $94M | Current liabilitiesCur. liab. |
| 2.2× | 2.1× | 2.3× | 3.7× | 2.3× | 2.3× | 0.5× | 1.6× | 1.9× | 1.8× | 1.8× | Current ratioCurr. ratio |
| $75M | $53M | $45M | $40M | $9M | $5M | $5M | $5M | $6M | $20M | — | Net PP&ENet PP&E |
| $57M | $37M | $0 | $0 | $8M | $0 | — | — | — | — | — | GoodwillGoodwill |
| $383M | $330M | $286M | $231M | $86M | $50M | $165M | $158M | $171M | $220M | $268M | Total assetsAssets |
| $48M | $28M | $50M | $0 | $6M | $5M | $3M | $60K | $0 | $40M | $40M | Total debtDebt |
| $44M | $23M | $47M | ($101M) | ($33M) | ($7M) | ($10M) | ($6M) | ($4M) | $34M | $36M | Net debt / (cash)Net debt |
| -8.6× | -4.8× | -24.4× | -37.4× | -2394.1× | -403.3× | -5.0× | 8.1× | 11.1× | 5.9× | 6.9× | Interest coverageInt. cov. |
| $96M | $65M | $84M | $59M | $39M | $30M | $162M | $56M | $57M | $107M | — | Total liabilitiesTotal liab. |
| $287M | $265M | $202M | $172M | $47M | $20M | $3M | $102M | $114M | $113M | $129M | Shareholders’ equityEquity |
| 6.1% | 4.4% | 4.0% | 3.5% | 5.7% | 8.7% | 2.4% | −0.1% | 0.7% | 1.0% | 1.1% | Stock comp / revenueSBC/rev |
| — | — | $37M | — | $12M | $8M | — | — | — | — | — | Goodwill written downGW imp. |
| Per share | |||||||||||
| 56.1M | 57.6M | 58.0M | 58.8M | 68.3M | 73.4M | 12.4M | 28.4M | 30.9M | 36.2M | 38.4M | Shares out (diluted)Shares |
| $3.36 | $4.22 | $3.07 | $2.03 | $0.78 | $0.59 | $10.97 | $6.63 | $6.05 | $6.56 | $7.63 | Revenue / shareRev/sh |
| $-0.88 | $-0.48 | $-1.21 | $-0.58 | $-2.00 | $-0.42 | $-3.41 | $0.87 | $0.34 | $0.84 | $0.99 | EPS (diluted)EPS |
| $-0.11 | $0.14 | $-0.42 | $-0.12 | $-0.72 | $-0.35 | $-3.63 | — | — | — | — | Owner earnings / shareOE/sh |
| $-0.20 | $0.14 | $-0.42 | $-0.12 | $-0.72 | $-0.35 | $-3.63 | — | — | — | — | Free cash flow / shareFCF/sh |
| $0.23 | $0.07 | $0.06 | $0.04 | $0.02 | $0.00 | $0.03 | — | — | — | — | Cap. spending / shareCapex/sh |
| $5.12 | $4.60 | $3.48 | $2.93 | $0.69 | $0.28 | $0.21 | $3.59 | $3.69 | $3.13 | $3.36 | Book value / shareBVPS |
The diluted share count moved ×1/5.91 into 2022 — shares retired, not a split the totals corroborate — and the per-share figures carry the counts as filed.
The diluted share count moved ×2.29 into 2023 — shares issued, not a split the totals corroborate — and the per-share figures carry the counts as filed.
| 9-yr | 5-yr | |
|---|---|---|
| Revenue / share | +7.7%/yr | +53.2%/yr |
| Capital spending / share | −27.5%/yr (6-yr) | −14.2%/yr |
| Book value / share | −5.3%/yr | +35.3%/yr |
The year, in the company's words
the filing →Verbatim from the 10-K's management discussion. Each sentence is shown only because its subject, direction, and stated figures check out against the filed numbers on this page. The words are the company's; the arithmetic is the record's.
- Operating income+90.6%
“Operating income increased by $11.0 million to $23.2 million for the year ended December 31, 2025 versus the same period in 2024. The increase in 2025 is primarily due to a $20.4 million increase in gross profit resulting from higher product sales and rental revenues, partially offset by $4.4 million in Asset Acquisition expenses, a $3.3 million increase in SG&A expenses and a $0.9 million increase in depreciation expense.”
✓ figure matches the filed record
Where the cash went
ReinvestBuybacksDividendsAcquisitionsRetainedBeyond op. cashEach year's outlays against its operating cash: the mix, and how it drifts. The hatched cap is spending beyond that year's operating cash — financed from the balance sheet or borrowing, not operations.
Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.
In fiscal 2022 the business reported a $42M loss but ($45M) of owner earnings: $3M less than the profit line, taken out by capital spending and the timing of cash.
| FY2022 | FY2021 | FY2020 | FY2019 | FY2018 | |
|---|---|---|---|---|---|
| Reported net income | ($42M) | ($31M) | ($136M) | ($34M) | ($70M) |
| Depreciation & amortizationnon-cash charge added back | — | +$1M | +$3M | +$8M | +$9M |
| Stock-based compensationreal costnon-cash, but a real cost | +$3M | +$4M | +$3M | +$4M | +$7M |
| Working capital & othertiming of cash in and out, other non-cash items | −$6M | −$82K | +$82M | +$17M | +$33M |
| Cash from operations | ($45M) | ($26M) | ($48M) | ($5M) | ($21M) |
| Capital expenditurecash put back in to keep running and to grow | −$421K | −$39K | −$1M | −$2M | −$4M |
| Owner earnings | ($45M) | ($26M) | ($49M) | ($7M) | ($24M) |
| Owner-earnings marginowner earnings ÷ revenue | -33% | -60% | -93% | -6% | -14% |
Owner earnings is the cash an owner could pull out without starving the business: operating cash less the capital it must spend to hold its position . The cash-flow statement also adds stock comp back as non-cash, but it is a real cost paid in shares; counted as the expense it is (less $3M), owner earnings is nearer ($48M).
Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.
Quality & stewardship
Returns, the balance sheet, capital allocation, and pay.
Owner’s Scorecard
Will it survive?
- ComfortableOperating income $23M ÷ interest expense $4M
What this means
Operating profit covers interest with the kind of margin Graham wanted for a defensive holding. Necessary, not sufficient, it says solvent, not cheap.
- How heavy is the debt, net of cash? $56M · 2.4× operating profitMeaningful net debtCash $6M − debt $62M
What this means
Netting $6M of cash and short-term investments against $62M of debt leaves $56M owed, about 2.4× a year's operating profit (2.7× on the gross debt, before the cash). Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.
- Not enough data
What this means
The filing data didn't include the inputs for this check.
Is it a good business?
- Below average through the cycle9-yr median, range -801%–24%; 14% latest = NOPAT $23M ÷ invested capital $169MIndustry peers: median 10%
What this means
The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; a return below the cost of capital (~8%) erodes value as a business grows rather than building it — the test Buffett weighs most. The headline is the median of the last 9 years (it ran 14% most recently), so one peak or trough year doesn't set the verdict. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.
- Not enough dataIndustry peers: median 8%
What this means
The filing data didn't include the inputs for this check.
- Thinly cash-backedCash from ops $7M ÷ net income $31M
What this means
How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.
How is the cash used?
- Not enough data
What this means
The filing data didn't include the inputs for this check.
- Investing or harvesting? —Not enough data
What this means
The filing data didn't include the inputs for this check.
The promise and the pay packet
- Is the buyback buying ownership, or mopping up? 1.0%Stock pay, share count unreadStock compensation $2M (fiscal 2025), 1.0% of revenue · no repurchases · the share count is not comparable across these years (a split or a first listing sits in the record), so the drift is withheld
What this means
Stock handed to employees is a real cost paid in the owner's own currency: it is charged against profit, but the shares it creates are permanent. Many companies repurchase stock at the same time, which looks like a return of capital and often is not — if the count barely moves, the cash merely cancelled the pay packet and bought the owner nothing. The three states worth telling apart are a count genuinely shrinking, a count standing still despite large repurchases, and a count rising because the issuance was never offset at all.
Graham’s defensive tests · 0 of 4 met
Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.
- Adequate size MissRevenue ≥ $2B · $237M
What this means
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
- Strong liquidity NearCurrent ratio ≥ 2× · 1.80×
What this means
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
- Conservative debt NearDebt ≤ working capital · $62M vs $49M WC
What this means
Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.
- Earnings stability MissA profit every year (10-yr record) · 7 loss years
What this means
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
- Dividend record —Uninterrupted dividends · no dividend line tagged in the data
What this means
An unbroken dividend was Graham's mark of durability. This record carries no dividends-paid line in any year — common for partnerships, whose distributions file under tags the chain doesn't read — so the criterion is withheld rather than judged on silence.
- Earnings growth —Earnings +33% over the record · —
What this means
Earnings were negative early in the record, a growth rate isn't meaningful.
- Moderate price —P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price
What this means
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are $0.60/share (latest year $0.84), the averaged base the calculator's gate runs on, and book value is $3.12/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.
Durability & moat, 2016–2025
Whether the record’s returns held, and what the capital reinvested earned.
- Profitable years 3 of 10
What this means
Lost money in 7 year(s), look at what happened there before trusting the average.
- Return on capital ≥ 15% 2 of 9 yrs
What this means
A moat shows up as a high return on invested capital that holds year after year, not one good vintage.
- Operating margin −18% → 10% (3-yr avg ends)
In the filing’s words The record and the words agree: the margin widened and the filing attributes the gain to its own pricing, not volume alone.
What this means
Through the cycle the operating margin widened — about −18% early to 10% lately, median −26% — pricing power intact or improving.
- Reinvestment, incremental ROIC returns capital
What this means
The capital base barely grew: this business returns cash through dividends and buybacks rather than reinvesting. Judge it on the cash returned, not on compounding.
- Worst year 2020 · −270.3% op. margin
What this means
Operations went underwater in 2020, understand why before trusting the good years.
- Share count −4.8%/yr
What this means
The share count is shrinking, buybacks are quietly growing your slice of the business.
All figures as filed; the source filing is linked above.
Current Position
as of the latest quarter, Jun 30, 2026Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.
- Cash & short-term investments$4M
- Inventory$27M
- Other current assets$137M
- Accounts payable$75M
- Other current liabilities$20M
From the company's latest filing.
Management, ownership & pay
read the proxy →From the proxy: how much of the business the people running it own, and how they are paid.
- Insider ownership2.4%
The stake all directors and executive officers hold together, per the 2026 proxy: skin in the game, the first thing Munger reads.
- Stock-based compensation$2M
The slice of the business handed to employees in shares in fiscal 2025, 1.0% of revenue, equal to 9.9% of operating profit. Buffett's oldest accounting fight: this is compensation, compensation is an expense, real whether or not the headline earnings admit it. One trap: the cash-flow statement adds SBC back, so the operating cash, and the owner earnings drawn from it, are flattered by exactly this amount; counted as the cost it is, what an owner keeps is lower.
What an owner would ask, FY2025
read the 10-K →- Which reported numbers are a judgment call?Management names Income taxes as critical estimates
each rests partly on management's judgment; the filing's note sets out the assumptionsverify →
The questions the record and the charts do not answer on their own; each carries the figure and the place to look.
Peers, Chemicals
The same industry, side by side on owner economics. Each column names the period it is read over, and a median resting on fewer than three years carries that count beside it; the group median at the foot is the line to read each figure against.
| Company | Revenuelatest FY, USD | Gross marginmedian over the record | Op. marginmedian over the record | ROICmedian over the record | Owner earn. marginmedian over the record |
|---|---|---|---|---|---|
| OECOrion S.A. | $1.8B | 25% | 10.0% | 10% | 3% |
| PRMPerimeter Solutions SA | $653M | 44% | 10.2% | 3% | 8% |
| REXREX American Resources Corporation | $650M | 11% | 6.8% | 13% | 8% |
| WDFCWD-40 Co. | $620M | 55% | 18.5% | 27% | 14% |
| FTKFlotek Industries Inc. | $237M | 12% | -17.5% | -4% | -14% |
| GEVOGevo Inc. | $161M | -37%4y | -97.9% | -22% | -104% |
| FSIFlexible Solutions International Inc. | $39M | 32% | 12.5% | 12% | 8% |
| ASPIASP Isotopes Inc. | $24M | 32% | -443.6%2y | -81% | -290%2y |
| Group median | — | 29% | 8.4% | 6% | 5% |
The price
What a price has to assume.
What the price implies
reverse-DCFFlotek Industries Inc. is profitable, but its owner-earnings base could not be formed from this filing’s tagged data (operating cash flow or capital spending is missing), so the owner-earnings reverse-DCF has no base to grow. We read the price from both ends instead: type a price to see the profitability it demands, then set the mature margin you would believe and weigh the two against each other. Nothing leaves your browser unless you enter it in your notebook.
Revenue, delivered42%/yr’20→’25
Enter a price to run it.
A dated snapshot of the price you typed, the assumptions you set, and what the page showed for them. A snapshot is never edited after it is saved. Your notebook is yours alone — the commitment states what is stored and what we will never do.
Two reads of one future. From your price: the owner earnings the company must reach, valued at a mature multiple and discounted back at your rate, expressed as the margin it implies on revenue grown at your rate. From your belief: the mature margin you would credit, set on the dial above. When the margin the price demands runs above the one you would believe, you are paying for a future taken on faith. For a deep cyclical at a trough, normalized through-cycle earnings are the better lens; this mode is for the genuinely unprofitable, and for the profitable business whose capital spending currently outruns its cash.
Manual order: ← FTI its page in the Manual FTNT →
Industry order: ← FSI the Chemicals chapter FUL →