Flotek Industries, Inc. (FTK, NYSE)
Industry: Oil & Gas Equipment & Services
Annual report, fiscal year 2011






overriding theme: the keys to success are desire and effort. As Rachel Tedrow so eloquently states, "You can only get what you want out of life if you put forth the effort."

Through the efforts of Lakia, Rachel, Cesar and the hundreds of other Flotek employees, 2011 was a successful year for your Company:

Flotek reported revenue for the year ended December 31, 2011 of $258.8 million, an increase of $111.8 million, or 76%, compared to $147.0 million for the same period in 2010. The Company posted net income attributable to common shareholders of $26.5 million or $0.56 per diluted share. That compares to a net loss attributable to common shareholders of $50.0 million, or ($1.94) per diluted common share in 2010. 2011 results include a gain of approximately $9.6 million in non-cash income related to the adjustment certain warrant liabilities.

As of December 31, 2011, the Company's cash balance was $46.7 million, compared to $19.9 million as of December 31, 2010. Cash increased as a result of improved operating metrics, expense control and additional capital resulting from the exercise of outstanding warrants.

During 2011 Flotek took several steps to improve its balance sheet. First, the Company repaid its $40 million senior credit facility. Second, the Company arranged for a traditional $35 million revolving credit.

The following table shows the financial performance of Flotek in the past year:

| Financial Performance | Financial Performance |
|---|---|
| Revenue | $1,000,000 |
| Net Income | $100,000 |
| Net Assets | $1,000,000 |
| Net Debt | $1,000,000 |
| Net Cash Flow | $1,000,000 |

These financial achievements are the direct result of the partnership efforts of our Flotek team members. The Company has achieved a number of objectives in 2011:

• In Flotek's Chemicals and Logistics business, our efforts to reach the ultimate beneficiaries of our products – exploration and production companies – resulted in increased sales and new relationships which will provide the building blocks for additional growth in 2012 and beyond. In addition, our work on custom

outrate is reit:cnshup and additional business opportunities.






In the Company’s artificial lift business, opportunities to apply our patented technology to oil production helped offset anemic natural gas prices and the lack of activity in Coal Bed Methane, our traditional source of revenue. In addition, international sales of our patented Petrovalve production system helped boost revenues in the second-half of 2011.

• International sales continued to climb. Our joint venture with Basin Supply – while still in the early stages – has presented opportunities in the Middle East, South America and Russia. While we remain deliberate in executing our international strategy, we believe significant growth is ahead in 2012 and beyond.

In short, 2011 was a year full of opportunities for Flotek. And, through the commitment and dedication of our people, we were able to seize those opportunities resulting in the best year for the Company in recent history.

However, as we strive to make a difference, we can't just look back, we must also look forward and strive to improve each and every day. We are committed to just that: to dream big, execute with a sense of purpose and perfection and continually evaluate our efforts on every front – embracing our successes and learning from our missteps.

We can't promise perfection but we can strive for it, and I pledge to you we will do so each and every day in everything we do. We realize that our success in 2011 only raises expectations for 2012 which will challenge the Flotek team to constantly improve. We cannot afford to be satisfied with where we have been but, rather, Flotek must create a compelling vision for a successful future.

Leadership is about creating and communicating a vision and creating a passion within your team to dream and achieve. In doing so, you transform work into mission and achievement into celebration. In short, you make a difference in the lives of each and every member of your team. And, in turn, they make a difference in the lives of those they touch – their clients, their communities and each other.

At Flotek, I pledge to you, our shareholders, that everything we do will be based on our belief that it is in the best interests of our stakeholders. First and foremost, we will work tirelessly to add value and continue to earn your trust. In short, we will make a difference.

Thank you for your continued interest in and support of Flotek.

With Appreciation,



John W. Chisholm

Chairman, President and Chief Executive Officer



## Corporate Directory

## Board of Directors

John W. Chisholm
Chairman of the Board, Chief Executive Officer, and President

John S. Reiland
Director
Chairman, Audit Committee
Member, Compensation Committee
Member, Governance & Nominating Committee

Kenneth T. Hern
Lead Independent Director
Chairman, Governance & Nominating Committee
Member, Compensation Committee
Member, Audit Committee

Richard O. Wilson
Director
Member, Compensation Committee
Member, Governance & Nominating Committee
Member, Audit Committee

L.V. "Bud" McGuire
Director
Member, Governance & Nominating Committee
Member, Governance & Nominating Committee

L. Melvin Cooper
Director
Member, Compensation Committee
Member, Audit Committee
Member, Governance & Nominating Committee

## Executive Officers

John W. Chisholm
Chairman and President





© 2012 Flotek Industries, Inc.

## Shareholder Information

## Annual Meeting

May 18, 2012 – 1:00pm CDT
Flotek Industries, Inc. Headquarters
2930 W. Sam Houston Pkwy. N.
Suite 300
Houston, TX 77043

## Stock Exchange Listing

The Company's common stock trades on the New York Stock Exchange, under the symbol "FTK."

## Transfer Agent

American Stock Transfer & Trust Company
6201 15th Ave.
Brooklyn, New York 11219
800-937-5449

## Auditors...

1 Ken Grant Associates, LP
500 DeKalb St Suite 2900
Houston, TX 77002
713-650-9814



Flotek Industries, Inc.
2930 W. Sam Houston Pkwy. N.
Suite 300
Houston, TX 77043



Making a Difference...

Environment. Community. Shareholders. Employees. Clients.