Flotek Industries increases, extends credit facility, edits covenants

By Wendy Van Sickle

Columbus, Ohio, Oct. 3 – Flotek Industries, Inc. entered into a 10th amendment to its revolving credit, term loan and security agreement on Friday with PNC Bank, NA as administrative agent, according to an 8-K filing with the Securities and Exchange Commission.

Under the amendment

• The maturity was extended to May 10, 2022;

• The maximum loan amount was increased to $75 million;

• The maximum revolving advance amount was increased to $75 million;

• The eligible inventory cap in the revolving advances calculation increased to $52 million from $45 million;

• The availability block of $5 million, applied as a reduction of gross collateral value, was removed;

• The maximum leverage ratio for the extended term of the loan was set at 3.5 times as of June 30, 2018 and 3 times as of Sept. 30, 2018 and for each fiscal quarter thereafter;

• The requirement to maintain undrawn availability of at least $10 million at the end of each month was removed;

• Certain restrictions to capital expenditures were established for 2018 and thereafter, based on undrawn availability measured at month-end; and

• The limitation on repurchases or redemptions of issued common stock or preferred stock by the company was increased to $35 million from $25 million if there is undrawn availability of at least $20 million under the credit facility.

Flotek is a Houston-based developer and distributor of oilfield technologies, including specialty chemicals and down-hole drilling and production equipment.

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