UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d)
OF
THE SECURITIES EXCHANGE ACT OF 1934
Date
of Report (Date of earliest event reported): January 4,
2007
FLOTEK
INDUSTRIES, INC.
Delaware
(State
or Other Jurisdiction of Incorporation)
001-13270
(Commission File Number)
90-0023731
(IRS
Employer Identification Number)
7030
Empire Central Drive, Houston, Texas (Address
of Principal Executive Offices)
77040
(Zip
Code)
Registrant’s
Telephone Number, including Area Code: (713)
849-9911
(Former
Name or Former Address, if Changed Since Last Report)
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
o
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM
1.01 Entry
into a Material Definitive Agreement.
On
January 4, 2007, the Company amended its senior credit facility with Wells
Fargo Bank, N.A. in Houston (the “Senior Credit Facility”). The Senior
Credit Facility consists of a revolving line of credit, an equipment term
loan and two real estate term loans. The amended credit agreement is comprised
of $36 million in term loans and a $20 million revolving credit facility, and
provides for borrowing through August 8, 2009. This represents a $10 million
increase in working capital availability within the revolving credit facility.
Additionally, the Company’s interest rate on funds borrowed under the Senior
Credit Facility was reduced approximately 150 basis points as a result of
the new financing.
Borrowings
under the Senior Credit Facility are subject to certain covenants and a material
adverse change subjective acceleration clause. Affirmative covenants include
compliance with laws, various reporting requirements, visitation rights,
maintenance of insurance, maintenance of properties, keeping of records and
books of account, preservation of existence of assets, notification of adverse
events, ERISA compliance, joinder agreement with new subsidiaries, borrowing
base audits, and use of treasury management services. Negative covenants include
limitations associated with liens, indebtedness, change in nature of business,
transactions with affiliates, investments, distributions, subordinate debt,
leverage ratio, fixed charge coverage ratio, consolidated net income,
prohibition of fundamental changes, asset sales and capital expenditures.
All Senior Credit Facility borrowings are collateralized by
substantially all of our assets.
ITEM
2.01 Completion
of Acquisition or Disposition of Assets.
On
January 4, 2007, the Company completed its acquisition of substantially all
the
assets of Triumph Drilling Tools, Inc. (“Triumph”) as reported in its Current
Report on Form 8-K filed with the SEC on December 6, 2006. The Company paid
aggregate consideration of $31 million in cash, consisting of $25
million to the former stockholder and $6 million in the repayment
of debt of Triumph.
Triumph’s
rental products include stabilizers, drill collars, drilling jars, roller
reamers and other specialized drilling tools. Triumph also provides bottom
hole
assembly design, inspection services and other related technical services.
Triumph services numerous drilling contractors, directional drilling companies,
major and independent operators. Triumph
is a leading regional provider of down-hole rental equipment to the oil and
gas
industry. Triumph maintains an extensive inventory of drilling tools for lease
or sublease to customers in Texas, New Mexico, Louisiana, Oklahoma and
Arkansas.
ITEM
9.01 Financial
Statements and Exhibits
(a)
and
(b) In accordance with the requirements of Item 9.01, audited financial
statements of Triumph and unaudited proforma financial statements will be filed
with the SEC within 71 days after the date of this filing..
(d)
The
Asset Purchase Agreement on the purchase of assets of Triumph and the amended
Senior Credit Facility will be filed as exhibits to the next periodic report
filed with the SEC by the Company.
SIGNATURES
Pursuant
to the requirements of the Securities and Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
|
Date: January
10, 2007
/s/
Lisa
G.Meier
Lisa
G. Meier
Chief
Financial Officer & Vice
President
|