HOUSTON, Dec. 31, 2012 /PRNewswire/ -- Flotek Industries, Inc. (NYSE: FTK) ("Flotek" or the "Company") announced today that it has entered into transactions to repurchase approximately $50 million of the Company's outstanding convertible notes from existing holders.
The transactions, privately negotiated, provide for the Company to repurchase $50.312 million of the outstanding notes from institutional holders for an average of approximately 100.59% of par value plus accrued interest. The Company will fund the repurchase with cash on hand and through its recently announced term loan under the $75 million credit facility with PNC bank. The transactions are scheduled to close on December 31, 2012.
"The repurchase of nearly 90% of Flotek's remaining convertible notes further reinforces the Company's strong financial position and Flotek's continued robust cash generation," said John Chisholm, Flotek's Chairman, President and Chief Executive Officer. "With this repurchase, Flotek has reduced its debt by over $70 million in 2012 and over $120 million since March, 2009. Our outlook for the coming year suggests strong cash generation will allow us to continue to improve our balance sheet as well as fund strategic initiatives that enhance shareholder value. With this repurchase, Flotek is firmly positioned as the premier unleveraged, oilfield technology company with a plethora of compelling growth opportunities."
This repurchase leaves approximately $5 million of principal value of convertible notes that Flotek can redeem in February, 2013. The Company plans to initiate the appropriate redemption process to do so in the coming weeks. In addition, the Company intends to provide notice to the underwriter of the original convertible notes of the redemption of such notes that will result in the return of shares lent to the underwriter in conjunction with the original convertible notes offering.Upon conclusion of the redemption process, Flotek estimates it will have approximately $25 million of debt outstanding. "There is no doubt that – a result of the focus, dedication and hard work of the entire Flotek team – your Company sports the strongest financial position in its history," concluded Chisholm. "In 2013, we are resolved to further intensify our focus on creating profitable growth opportunities for our shareholders through continued innovation, attention to detail and precise execution of our growth strategies. We are enthused by the opportunities that lie ahead, especially given our strong financial position. In short, we are excited about what the future holds for Flotek in 2013 and beyond."