928054--3/19/2008--FLOTEK_INDUSTRIES

related topics

{stock, price, share}

{acquisition, growth, future}

{operation, natural, condition}

{debt, indebtedness, cash}

{personnel, key, retain}

{cost, operation, labor}

{competitive, industry, competition}

{product, market, service}

{condition, economic, financial}

{gas, price, oil}

{provision, law, control}

{control, financial, internal}

{cost, regulation, environmental}

{property, intellectual, protect}

{operation, international, foreign}

{loss, insurance, financial}

{customer, product, revenue}

{stock, price, operating}

Risks Related to Our Business We intend to pursue strategic acquisitions, which could have an adverse impact on our business. Difficulties in integrating acquired businesses may result in reduced revenues and income. If we do not manage the potential difficulties associated with expansion successfully, our operating results could be adversely affected. Our business depends primarily on domestic spending by the oil and gas industry, and this spending and our business may be adversely affected by industry conditions that are beyond our control. Our future success and profitability may be adversely affected if we or our suppliers fail to develop and introduce new and innovative products and services that appeal to our customers. Our senior credit facility contains certain covenants that could limit our flexibility and prevent us from taking certain actions, which could adversely affect our ability to execute our business strategy. We may not be able to generate sufficient cash flows to meet our debt service obligations and other liquidity needs. Failure to maintain effective disclosure controls and procedures and internal controls over financial reporting could have an adverse effect on our operations and the trading price of our common stock. Our ability to grow and compete in the future will be adversely affected if adequate capital is not available. If we lose the services of key members of our management, we may not be able to manage our operations and implement our growth strategy effectively. Our current insurance policies may not be adequate to protect our business from all potential risks. We are subject to complex foreign, federal, state and local environmental, health and safety laws and regulations, which expose us to costs and liabilities that could have a material adverse effect on our business, financial condition and results of operations. If we are unable to adequately protect our intellectual property rights or are found to infringe intellectual property rights of others, our business is likely to be adversely affected. We and our customers are subject to risks associated with doing business outside of the United States which may expose us to political, foreign exchange and other uncertainties. The loss of certain key customers could have a material adverse effect on our results of operation and could result in a decline in our revenue. Risks Related to Our Industry Volatility or decline in oil and natural gas prices may result in reduced demand for our products and services which may adversely affect our business, financial condition and results of operation. Competition from new and existing competitors within our industry could have an adverse effect on our results of operations. Our industry has experienced a high rate of employee turnover. Any difficulty we experience attracting or retaining personnel could adversely affect our business. Severe weather could have a material adverse impact on our business. A terrorist attack or armed conflict could harm our business. Risks Related to Our Common Stock The market price of our common stock has been and may continue to be volatile. An active market for our common stock may not continue to exist or may not continue to exist at current trading levels. We have no plans to pay dividends on our common stock, and therefore, investors will have to look to stock appreciation for return on their investments. Certain anti-takeover provisions of our charter documents under Delaware law could discourage or prevent others from acquiring our company, which may adversely affect the market price of our common stock. Future issuance of additional shares of our common stock could cause dilution of ownership interests and adversely affect our stock price. We may issue shares of preferred stock or debt securities with greater rights than our common stock.

Full 10-K form ▸

928054--3/19/2008--FLOTEK_INDUSTRIES_INC/CN/