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Inside Flotek Industries’ New 2017 Capex Plan

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Jul. 5 2017, Updated 10:37 a.m. ET

Flotek’s operating cash flows

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Flotek’s free cash flow

In 1Q17, FTK’s capital expenditure or capex fell 51% in 1Q17 over 1Q16. Despite its lower capex, this negative CFO led to negative FCF (free cash flow) in 1Q17. In 1Q17, FTK’s FCF was -$4.4 million, compared with -$10.3 million in 1Q16. FCF’s capex has been negative for five out of the past 13 quarters.

Peer comparison

By comparison, Halliburton’s (HAL) 1Q17 FCF was a -$416 million, while Nabors Industries’ (NBR) 1Q17 FCF came in at -$258 million, and Weatherford International’s (WFT) 1Q17 FCF stood at -$221 million.

FTK’s 2017 capex plan

Flotek plans to spend between $10 million and $14 million on capex in 2017. This would be a reduction from the planned capex range of $15 million–$20 million it disclosed earlier in its 2016 Form 10-K. FTK’s capex totaled $14 million in 2Q16.

FTK’s capex is subject to a maximum limit of $20 million in 2017, according to the credit facility agreement with PNC Bank, FTK’s primary lender.

Notably, Flotek Industries makes up 0.13% of the iShares Micro-Cap ETF (IWC). IWC has risen 4% so far this, compared with the 5% fall in FTK’s stock. SPX-INDEX has risen 8%.

You can learn more about the oilfield equipment and services industry in Market Realist’s The Oilfield Equipment and Services Industry: A Primer.

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