SecProbe.io

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-4631

       DIVISION OF
CORPORATION FINANCE

Mail Stop 4631
September 14, 2009

via U.S. mail and facsimile

Jerry Dumas, Chief Executive Officer  Flotek Industries, Inc.  2930 W. Sam Houston Pkwy N. Houston, Texas   77043   RE: Flotek Industries, Inc.
  Form 10-K for the Fiscal Year Ended December 31, 2008
  Form 10-Q for the Fiscal  Quarter Ended June 30, 2009
  Proxy Statement    Filed April 29, 2008   File No. 000-52423

Dear Mr. Dumas:

We have reviewed the above referenced filings and have the following comments.
Where indicated, we think you should revise your  disclosures in future filings in response
to these comments. If you disagree, we w ill consider your explanation as to why our
comment is inapplicable or a revision is unneces sary.  Please be as detailed as necessary
in your explanation.  In some of our comme nts, we may ask you to provide us with
supplemental information so we may better understand your disclosure.  After reviewing
this information, we may or may not raise additional comments.
 Please understand that the purpose of our re view process is to assist you in your
compliance with the applicable disclosure  requirements and to  enhance the overall
disclosure in your filing.  We look forward to  working with you in these respects.  We
welcome any questions you may have about our  comments or on any other aspect of our
review.  Feel free to call us at the telephone numbers listed at the end of this letter.

Mr. Dumas
Flotek Industries, Inc.   September 14, 2009 Page 2   Form 10-K for the Fiscal Year Ended December 31, 2008

 Management’s Discussion and Analysis of Financial Condition and Results of
Operations, Page 28
 Results of Operations, page 34

1. In future annual and quarterly filings pl ease ensure the discussion of results and
operations quantifies the impact of the various underlying factors mentioned in
your analysis and discusses the underlying causes.  For example:

• On page 35 you list several factors contri buting to the 51% in crease in selling,
general and administrative costs bu t do not quantify their impacts.
• In your discussion of the operations of  Chemicals and Logistics on page 37,
you do not quantify the impact on revenue  from the increase in sales of
proprietary specialty chemicals, the effect of price increases instituted in the first quarter, the impact of the Sooner Energy Services, Inc. acquisition, or the
offsetting impact of the decrease in sale s of other chemical business.  Given
the importance of the rising cost of ra w materials during th e first part of 2008,
quantification of the effect of price increases appears particularly important to
an understanding of your operations.
• The underlying reasons for the significan t fluctuations in sales volume of
“green” chemicals is not discussed.  Th e decline in the quarter ended June 30
is not quantified.
• You do not discuss the underlying causes  of the increase in Drilling Products
revenue from the organic growth discussed on page 38.
• While gross margin was stable in calendar years 2008 and 2007, there was a
significant decline in gr oss margin during the first two quarters of 2009.
However the discussion of gross margin in the Forms 10-Q is very brief, does not provide detailed analysis, and do es not quantify the impact of the
underlying reasons.

These are examples and are not intended to be a comprehensive list.  For additional guidance, please refer to Section 501.04 of the Financial Reporting
Codification and SEC Release 33-8350.
2. We note your discussion of raw mate rials on pages 5 and 8 and throughout
MD&A.  In future filings please prov ide additional analysis of how the
fluctuations in oil and gas prices affect  your business.  Discuss the impact of
rising prices on your margins, your ab ility to recover these costs through
corresponding price increases , the impact during the pe riods presented, and the
anticipated impact in future periods.  Re garding the recent significant decline in
oil and gas prices, provide a more detailed an alysis that clarifies and to the extent

Mr. Dumas
Flotek Industries, Inc.   September 14, 2009 Page 3
possible, quantifies the link between a decl ine in oil and gas prices and specific
effects on your business.  Provide quantified information to the extent available.
We note you began presenting rig count in your March 31, 2009, Form 10-Q.  To the extent management is aware of interm ediate metrics indicative of the strength
of markets, such as rig count, well co mpletions, or industry exploration and
production expenditures, disclo sure and analysis of su ch quantified information
may assist investors in viewing the bu siness through the eyes of management.
Disclose and analyze any specific events  or trends that may impact future
operations, such as significant customer  project delays or  modifications and
adverse competitive pressures in significant markets.  Refer to Item 303(a)(3)(ii)
of Regulation S-K.
3. We note you present a non-GAAP reconcilia tion on page 34.  Please tell us and
disclose in future filings the reasons why you believe that presentation of the non-
GAAP financial measure provides useful in formation to investors regarding the
your financial condition and results of opera tions.  If you continue to present this
measure in future filings, please include th e disclosures discussed in Question 8 of
Frequently Asked Questions Regar ding the Use of Non-GAAP Financial
Measures , available on our website.  Provide us with an example of your intended
future disclosure.

Capital Resources and Liquidity, page 41

4. You state on page 39 the Dr illing Products segment re quires higher levels of
capital expenditures than your other segments.  We note capital expenditures for this segment amounted to $19.8 million for 2008 and you plan to reduce capital spending in this segment by more than 50% in 2009 from 2008 levels.   We
further note from your cash flow statement as of June 30, 2009 you’ve spent $4.9 million for capital expenditures.  In future filings please disclose your estimate for
capital expenditures for the remaining 2009 fiscal year for this segment and the
source of funds.   Please also address whether a significant decrease in capital
expenditures will impact your results of opera tions and liquidity for this segment.

5. You state on page 41 that during the year ended December 31, 2008, changes in
working capital used approximately $3.4 million in cash, principally due to an increase of $14.5 million in inventory, an increase of $8.5 million in accounts
receivable partially offset by an increa se of $12.4 million in accounts payable and
an increase of $7.5 million in accrued liabilities, includi ng interest.  In future
filings please provide a more robust liquidity discussion of  the material changes in
your operating accounts. Specifically, please discuss key drivers contributing to material increases or decreases in work ing capital.  Furthermore, given that you
have cash obligations related to your long- term debt and your history of covenant
violations; in future filings please di scuss your ability to satisfy your debt

Mr. Dumas
Flotek Industries, Inc.   September 14, 2009 Page 4
obligations and fund capital expenditures and operations.  Refer to Sections
501.03 and 04 of the Financial Reporting Codification for guidance.
 Critical Accounting Policies and Estimates, page 47

 Revenue, page 47

6. In future filings please expand your reve nue recognition policy to disclose the
amount of revenue attributable to cl aims and unapproved change orders, if
material, for each period presented.  Re fer to SOP 81-1 and the AICPA Audit and
Accounting Guide for Constructi on Contractors for guidance.
7. Please clarify whether there are material sales from services outside of your
logistics division and, if s o, revise your revenue rec ognition policy to disclose
your policy for recognizing revenue from providing these services.

Goodwill, page 48
8. Please expand your discussion of goodwill a nd impairment testing to include the
following disclosure about impairment testing of goodwill:

• Revise your disclosure to provide a description of your reporting units.  Refer
to paragraphs 30-31 of SFAS 142 for guidance.
• Provide a description of the valuation me thod used to determine the fair value
of your reporting units, the material assumptions used in the valuation
method, and the sensitivity of those assu mptions.  For example, disclosure of
the assumptions under the discounted cash flow method should include the discount rate used, projecte d revenue growth rates, and the operating profit
margin, at a minimum.
• Include a sensitivity analysis of the material assumptions using other
reasonably likely inputs.
• Clarify whether the fair value of each of your reporting units is or is not
materially in excess of the carrying value and discuss the implications on the sensitivity of your assumptions or the po ssibility of future impairment.  For
any reporting units with a carrying value th at is not materially different from
the estimated fair value, please di sclose the amount of goodwill for the
reporting unit and the amount of headroom.
 Please provide us with an example of your intended future disclosure.
Intangible and Other Assets, page 48

9. Please expand your discussion of other inta ngible assets to discuss the valuation
method used in your impairment testing a nd to disclose the significant underlying

Mr. Dumas
Flotek Industries, Inc.   September 14, 2009 Page 5
assumptions.  Include a sensitivity analys is of the material assumptions using
other reasonably likely inputs.

Note 9 – Long-term Debt, page 78

10. Please clarify the specific terms of conversion and clearly disclose other
significant terms of the notes.  The discus sion should include c oncise but specific
disclosure of the terms with significant  accounting ramifications and sufficient to
an understanding of implications of fu ture cash flows and future financial
statement impacts.
11. We note you issued 5.25% Convertible Seni or Notes on in February 2008.  You
state on page 42 the notes are guaranteed on a senior, unsecured basis by the Guarantors.  Based on the Form 8-A12B filed on February 7, 2008, it appears that
certain of your subsidiaries are guarantors of your public debt.  If so, please tell us
your consideration of providing financial statements pursuant to Rule 3-10 of
Regulation S-X

Item 9A.  Controls a nd Procedures, page 95

12. We note your statement that “There are inhe rent limitations to the effectiveness of
any system of disclosure controls and procedures, including the possibility of
human error and the circumvention or ove rriding of controls and procedures.
Accordingly, even effective disclosure controls and procedures can only provide
reasonable assurance of achieving their contro l objectives.”  Please revise to state
clearly, if true, that your disclosu re controls and procedures are designed to
provide reasonable assurance of achieving th eir objectives and that your principal
executive officer and principal financial officer concluded th at your disclosure
controls and procedures are effective at th at reasonable assurance level.  In the
alternative, remove the reference to th e level of assurance of your disclosure
controls and procedures.  Please refer to  Section II.F.4 of Management’s Reports
on Internal Control Over Financial Reporti ng and Certification of Disclosure in
Exchange Act Periodic Reports, SEC Release No. 33-8238, available on our
website at http://www.sec .gov/rules/final/33-8238.htm.

Item 15. Exhibits and Financia l Statement Schedules, page 97
13. We note that it appears you have not filed on EDGAR certain exhibits and
schedules to the credit agreements you have filed as Exhibits 10.1, 10.16 and
10.21 to your Form 10-K.  Please file comple te copies of your credit agreements.
See Item 601(b)(10) of Regulation S-K.

Exhibit 12 – Ratio of Earnings To Fixed Charges

Mr. Dumas
Flotek Industries, Inc.   September 14, 2009 Page 6
14. We note your ratio of earnings to fixed charges indicates less than a one-to-one
coverage for the year ended December 31, 2008.   In future filings where your ratio of earnings to fixed ch arges indicates less than a one-to-one coverage, please
disclose the dollar amount of the defici ency.  Refer to Item 503 of Regulation S-
K.
 Exhibit 32.1 and 32.2

15. The certifications provided under section 906 of the Sarbanes-Oxley Act are not
dated.  Please file a full amendment to the Form 10-K for the fiscal year ended December 31, 2008 that includes the prope r certifications required by Items
601(b)(32) of Regulation S-K.

Definitive Proxy Statement

 General

16. Please provide information pursuant to Item 404(a) and (b ) and 407(e)(4) of
Regulation S-K.

Compensation Discussion and Analysis, page 11
17. Please clarify the extent of your benchm arking practices.  Al though it appears that
you engage in some benchmarking of ba se salaries, explai n whether you apply
these practices to other elements of y our compensation program.  To the extent
you do benchmark other forms of compensa tion, please disclose where you target
each element of compensation and where actu al payments fall within the targeted
parameters.  Provide appropriate analysis and insight into spec ific payouts to the
extent they fall outside the targeted parameters.

Base Salary, page 14
18. We note that the base salaries of each of  the named executive officers increased in
2008.  For each named executive officer, please describe and quantify the individual performance objectiv es that served as the basis for the increases in base
compensation.

Annual Bonus Compensation, page 15

19. Please revise to describe your annual bonus compensation including, for each of
your named executive officers, the to tal amount of compensation the named
executive officers were targeted to recei ve in 2008, the factors the compensation
committee used to determine the to tal targeted amount of annual bonus
compensation and why no payouts were made in 2008.   We note disclosure that

Mr. Dumas
Flotek Industries, Inc.   September 14, 2009 Page 7
Mr. Jowett received a 2008 bonus.  Please di sclose the specific reasons why Mr.
Jowett was awarded this form and level of compensation and discuss and analyze
the reasons why the compensation comm ittee determined that the bonus was
appropriate in light of the factors it considered.

Equity Compensation, page 16

20. For each named executive officer please expand the disclosure in the last
paragraph on page 16 to include substant ive analysis and insight into how the
restricted stock and stock option awards we re determined and pr ovide insight into
why the compensation committee determined  that the levels of compensation
were appropriate in light of the fact ors considered.  Also, for each named
executive officer, please describe an d quantify the individual performance
objectives that cont ributed to awards made under this compensation program.

Summary Compensation Table, page 20
21. Please provide disclosure pursuant to the Instruction to Item 402(c)(2)(v) and (vi)
for footnotes 1 and 2 in the summary compensation table.

Option Exercises and Stock Vested, page 24
22. We note that Mr. Dumas had a significant vesting event in 2008.  Please disclose
whether this had any impact on the decisions made by the compensation
committee with respect to the 2008 compensation of Mr. Dumas.

Director Compensati on Table, page 26
23. Please provide disclosure pursuant to th e Instruction to It em 402(k)(2)(iii) and
(iv) for footnotes 2, 3, 4 and 5 in the director compensation table.
Form 10-Q for the Fiscal Quarter Ended June 30, 2009

Management’s Discussion and Analysis of Financial Condition and Results of
Operations, Page 17

24. As a result of recent net losses and decr eased sales, it appears the evaluation of
deferred tax