THE WOODLANDS, Texas,
May 10, 2017 /PRNewswire/
-- TETRA Technologies, Inc. ("TETRA" or the "Company") (NYSE:
TTI) today announced a consolidated first quarter 2017 net loss per
share attributable to TETRA stockholders of $0.02, which compares to a loss of $0.33 per share in the fourth quarter of 2016 and
a loss of $1.11 per share in the
first quarter of 2016.
TETRA's adjusted per share results attributable to TETRA
stockholders for the first quarter of 2017, excluding Maritech and
special items, were a loss of $0.10,
which compares to adjusted loss per share of $0.16 in the fourth quarter of 2016 and an
adjusted per share loss of $0.24 in
the first quarter of 2016, also excluding Maritech and special
items. First quarter 2017 revenue of $168 million decreased 3% from the fourth quarter
of 2016 and 1% from the first quarter of last year, primarily as a
result of reduced unit sales and compression services in our
Compression Division, offset by a strong quarter in Fluids Division
water management services and fluids sales in the Gulf of
Mexico.
(Adjusted earnings/(loss) per share is a non-GAAP financial
measure that is reconciled to the nearest GAAP measure in the
accompanying schedules.)
First Quarter
2017 Results
|
|
Three Months
Ended
|
|
March 31,
2017
|
|
December 31,
2016
|
|
March 31,
2016
|
|
(In Thousands, Except
per Share Amounts)
|
Revenue
|
$
|
168,001
|
|
|
$
|
173,222
|
|
|
$
|
169,329
|
|
Net loss attributable
to TETRA stockholders
|
(2,463)
|
|
|
(31,554)
|
|
|
(88,325)
|
|
Adjusted
EBITDA(1)
|
18,275
|
|
|
14,946
|
|
|
19,423
|
|
GAAP EPS attributable
to TETRA stockholders
|
(0.02)
|
|
|
(0.33)
|
|
|
(1.11)
|
|
Adjusted EPS
attributable to TETRA stockholders(1)
|
(0.10)
|
|
|
(0.16)
|
|
|
(0.24)
|
|
Consolidated net cash
provided (used) by operating activities
|
(20,538)
|
|
|
28,316
|
|
|
25,261
|
|
TETRA only adjusted
free cash flow(1)
|
$
|
(13,847)
|
|
|
$
|
16,028
|
|
|
$
|
18,488
|
|
|
|
(1)
|
Non-GAAP financial
measures are reconciled to GAAP in the schedules below.
|
Highlights of the 2017 first quarter include:
- Fluids revenue increased by 14% sequentially despite the lack
of a significant Gulf of Mexico TETRA CS Neptune® completion fluids
project, which is currently scheduled for the second quarter of
2017. The increase was driven by strong U.S. onshore
activity, including water management, and market share gains in the
Gulf of Mexico.
- Production Testing loss before taxes was $2.1 million, while adjusted EBITDA improved to
positive earnings of $1.2 million,
reflecting improving activity levels.
- Compression activity is reflecting early signs of a recovery
with quarter-end utilization increasing sequentially by 60 basis
points to 77.0% and with the receipt of $5
million in orders for new equipment.
- To further improve its balance sheet and in light of the
prolonged downturn in the market, CSI Compressco reduced its
quarterly distribution 50% for the first quarter and amended
certain financial covenants applicable to its bank revolver.
The reduction in the distribution is expected to allow CSI
Compressco to reduce outstanding amounts on its revolver.
- Consolidated net cash used by operating activities was
$20.5 million. TETRA only
adjusted free cash flow was a use of $13.8
million, reflecting the normal seasonality in working
capital. (See Schedule G for the reconciliation of TETRA only
free cash flow to GAAP.)
- Receipt of $12.8 million in cash
from a previously announced arbitration award for the Fluids
segment. This award and its impact on earnings has been
excluded from Adjusted EBITDA.
Stuart M. Brightman, TETRA's
President and Chief Executive Officer, stated, "We believe we are
seeing the initial impact of a recovering U.S. onshore market with
another improved quarter in the Fluids Division's water management
operations, improved fluids sales in the Gulf of Mexico, and continued but modest
improvements in utilization of the compression services
fleet. We continue to believe that a recovery in the deep
water Gulf of Mexico will lag the
onshore recovery. The TETRA CS Neptune fluid project we
expected for the first half of 2017 is expected to be completed in
the second quarter.
"Fluids Division revenue for the first quarter of 2017 was
$72.9 million compared to
$64 million in the fourth quarter of
2016. The fluids sales in the Gulf of
Mexico were achieved with our strong customer base and a few
notable market share gains as we took advantage of spot sales
opportunities. This strong first quarter performance occurred
despite the lack of any significant TETRA CS Neptune fluids
activity. Fluids Division income before taxes was
$20.3 million while adjusted EBITDA
was $13.6 million.
"First quarter 2017 Compression Division revenue decreased 21%
to $65.6 million, mainly as a result
of lower equipment sales. Compression Division income before taxes
was a loss of $14.3 million while
adjusted EBITDA was $17.5 million. In
anticipation of additional demand, CSI Compressco incurred
$1 million of operating expenses to
prepare idle equipment for deployment in the second half of this
year. Overall quarter-end service fleet utilization was
77.0%, compared to 76.4% in the fourth quarter. Large horsepower
equipment (greater than 800 HP) utilization was 87.0% at the end of
the first quarter. New equipment orders were $5 million. On April 21,
2017, CSI Compressco LP declared cash distributions
attributable to the first quarter of 2017 of $0.1875 per outstanding common unit, a 50%
decrease from the distribution attributable to the fourth quarter
of 2016. This distribution resulted in a coverage ratio of 1.09x
for the first quarter of 2017.
"First quarter 2017 revenue for the Production Testing Division
improved by 41%, to $21.5 million,
led by stronger activity levels in Canada and Texas, in addition to the sale of an early
production facility in South America. Production Testing
adjusted EBITDA was $1.2 million, the
first adjusted EBITDA profitable quarter since the first quarter of
2016. We continue to expect to see additional improvements in
activity in North America and
internationally and expect to be able to better manage pricing
levels later in the year.
"Our Offshore Service segment reported revenue of $8.4 million, in what is typically its weakest
seasonal quarter of the year. Loss before taxes was
$6.3 million while adjusted EBITDA
was a loss of $3.5 million. We have
seen a significant increase in bids and quoting activity going into
the traditionally strong summer season. Our scheduled work
for the next several months is at the highest levels seen since
before the downturn as customers' improved cash flows are allowing
for decommissioning projects that were previously delayed."
Free Cash Flow and Balance Sheet
TETRA only adjusted free cash flow in the first quarter of 2017
was a use of $13.9 million. Due
to the seasonality of our business, the first two quarters of the
year have traditionally represented our weakest free cash flow
generation quarters and the last two quarters have been the
strongest. Additionally, the second half of the year will
reflect the benefit on working capital from our TETRA CS Neptune
projects. Consolidated net cash used by operating activities
for the first quarter of 2017 was a use of $20.5 million. TETRA only days sales
outstanding (excluding CSI Compressco LP) increased from 70 days at
the end of the fourth quarter to 76 days at the end of March.
TETRA only debt was $132.6 million,
while net debt increased from $111
million to $125 million in the
first quarter.
Special items and Maritech
Maritech reported a pre-tax loss of $0.7
million in the first quarter of 2017.
Consolidated first quarter earnings benefited from $16.5 million of special items, of which
$12.5 million were cash items.
Special items include:
- $12.8 million in other income
from the previously disclosed legal settlement
- $6.0 million of non-cash income
from a fair value adjustment of the outstanding TETRA warrants
- $1.6 million non-cash charge for
a fair value adjustment of the CSI Compressco Series A Convertible
Preferred units
- $0.4 million of cash severance
expense
- $0.4 million of other non-cash
special charges
Financial Guidance
We expect total year TETRA only adjusted free cash flow to be
between $20 million and $40 million
in 2017 as a result of the previously announced 50% reduction in
CSI Compressco's quarterly distribution and an increase in capital
expenditures for our Fluids water management business to take
advantage of market opportunities with improved pricing, among
other items.
No reconciliation of the forecasted range of TETRA only adjusted
free cash flow for the full year 2017 to the nearest GAAP measure
is included in this release because the reconciliation would
require presenting forecasted information for CSI Compressco that
is not publicly disclosed.
Conference Call
TETRA will host a conference call to discuss these results
today, May 10, 2017, at 10:30 a.m. ET. The phone number for the call is
888-347-5303. The conference will also be available by live audio
webcast and may be accessed through TETRA's website at
www.tetratec.com.
Investor Contact
TETRA Technologies, Inc., The
Woodlands, Texas
Stuart M. Brightman,
281/367-1983
Fax: 281/364-4346
www.tetratec.com
Financial Statements, Schedules and Non-GAAP Reconciliation
Schedules (Unaudited)
Schedule A: Consolidated Income Statement
Schedule B: Financial Results By Segment
Schedule C: Consolidated Balance Sheet
Schedule D: Long-Term Debt
Schedule E: Special Items
Schedule F: Non-GAAP Reconciliation to GAAP Financials
Schedule G: Non-GAAP Reconciliation to TETRA Only Adjusted Free
Cash Flow
Schedule H: Non-GAAP Reconciliation of TETRA Net Debt
Company Overview and Forward Looking Statements
TETRA is a geographically diversified oil and gas services
company, focused on completion fluids and associated products and
services, water management, frac flowback, production well testing,
offshore rig cooling, compression services and equipment, and
selected offshore services including well plugging and abandonment,
decommissioning, and diving. TETRA owns an equity interest,
including all of the general partner interest, in CSI Compressco LP
(NASDAQ:CCLP), a master limited partnership.
This press release includes certain statements that are deemed
to be forward-looking statements. Generally, the use of words such
as "may," "expect," "intend," "estimate," "projects," "anticipate,"
"believe," "assume," "could," "should," "plans," "targets" or
similar expressions that convey the uncertainty of future events,
activities, expectations or outcomes identify forward-looking
statements that the Company intends to be included within the safe
harbor protections provided by the federal securities laws. These
forward-looking statements include statements concerning the
anticipated recovery of the oil and gas industry, expected results
of operational business segments for 2017, anticipated benefits
from CSI Compressco following the acquisition of Compressor
Systems, Inc. (CSI) in 2014, including levels of cash distributions
per unit, projections concerning the Company's business activities,
financial guidance, estimated earnings, earnings per share, and
statements regarding the Company's beliefs, expectations, plans,
goals, future events and performance, and other statements that are
not purely historical. These forward-looking statements are based
on certain assumptions and analyses made by the Company in light of
its experience and its perception of historical trends, current
conditions, expected future developments and other factors it
believes are appropriate in the circumstances. Such statements are
subject to a number of risks and uncertainties, many of which are
beyond the control of the Company, including the ability of CSI
Compressco to successfully integrate the operations of CSI and
recognize the anticipated benefits of the acquisition. Investors
are cautioned that any such statements are not guarantees of future
performances or results and that actual results or developments may
differ materially from those projected in the forward-looking
statements. Some of the factors that could affect actual results
are described in the section titled "Risk Factors" contained in the
Company's Annual Report on Form 10-K for the year ended
December 31, 2016, as well as other
risks identified from time to time in its reports on Form 10-Q and
Form 8-K filed with the Securities and Exchange Commission.
Schedule A:
Consolidated Income Statement (Unaudited)
|
|
|
Three months ended
March 31,
|
|
2017
|
|
2016
|
|
(In Thousands, Except
per Share Amounts)
|
Revenues
|
$
|
168,001
|
|
|
$
|
169,329
|
|
|
|
|
|
Cost of sales,
services, and rentals
|
124,258
|
|
|
120,441
|
|
Depreciation,
amortization, and accretion
|
29,478
|
|
|
33,607
|
|
Impairments of
long-lived assets
|
—
|
|
|
10,670
|
|
Total cost of
revenues
|
153,736
|
|
|
164,718
|
|
Gross profit
|
14,265
|
|
|
4,611
|
|
|
|
|
|
General and
administrative expense
|
28,456
|
|
|
33,611
|
|
Goodwill
impairment
|
—
|
|
|
106,205
|
|
Interest expense,
net
|
13,767
|
|
|
14,639
|
|
Warrants fair value
adjustment
|
(5,976)
|
|
|
—
|
|
CCLP Series A
Preferred fair value adjustment
|
1,631
|
|
|
—
|
|
Other (income)
expense, net
|
(12,451)
|
|
|
(704)
|
|
Income (loss) before
taxes
|
(11,162)
|
|
|
(149,140)
|
|
Provision (benefit)
for income taxes
|
90
|
|
|
(1,409)
|
|
Net income
(loss)
|
(11,252)
|
|
|
(147,731)
|
|
Net (income) loss
attributable to noncontrolling interest
|
8,789
|
|
|
59,406
|
|
Net income (loss)
attributable to TETRA stockholders
|
$
|
(2,463)
|
|
|
$
|
(88,325)
|
|
|
|
|
|
Basic per share
information:
|
|
|
|
Net income (loss)
attributable to TETRA stockholders
|
$
|
(0.02)
|
|
|
$
|
(1.11)
|
|
Weighted average shares
outstanding
|
114,197
|
|
|
79,421
|
|
|
|
|
|
Diluted per share
information:
|
|
|
|
Net income (loss)
attributable to TETRA stockholders
|
$
|
(0.02)
|
|
|
$
|
(1.11)
|
|
Weighted average shares
outstanding
|
114,197
|
|
|
79,421
|
|
Schedule B:
Financial Results By Segment (Unaudited)
|
|
|
Three Months
Ended
March 31,
|
|
2017
|
|
2016
|
|
(In
Thousands)
|
Revenues by
segment:
|
|
|
|
Fluids
Division
|
$
|
72,895
|
|
|
$
|
59,113
|
|
Production Testing
Division
|
21,512
|
|
|
19,871
|
|
Compression
Division
|
65,559
|
|
|
81,695
|
|
Offshore
Division
|
|
|
|
Offshore
Services
|
8,361
|
|
|
10,246
|
|
Maritech
|
231
|
|
|
89
|
|
Intersegment
eliminations
|
—
|
|
(523)
|
|
Offshore Division
total
|
8,592
|
|
|
9,812
|
|
Eliminations and
other
|
(557)
|
|
|
(1,162)
|
|
Total
revenues
|
$
|
168,001
|
|
|
$
|
169,329
|
|
|
|
|
|
Gross profit
(loss) by segment:
|
|
|
|
Fluids
Division
|
$
|
13,495
|
|
|
$
|
7,491
|
|
Production Testing
Division
|
83
|
|
|
(3,417)
|
|
Compression
Division
|
6,163
|
|
|
6,955
|
|
Offshore
Division
|
|
|
|
Offshore
Services
|
(4,963)
|
|
|
(5,989)
|
|
Maritech
|
(426)
|
|
|
(315)
|
|
Intersegment
eliminations
|
—
|
|
|
—
|
|
Offshore Division
total
|
(5,389)
|
|
|
(6,304)
|
|
Corporate overhead and
eliminations
|
(87)
|
|
|
(114)
|
|
Total gross
profit
|
$
|
14,265
|
|
|
$
|
4,611
|
|
|
|
|
|
Income (loss)
before taxes by segment:
|
|
|
|
Fluids
Division
|
$
|
20,276
|
|
|
$
|
(358)
|
|
Production Testing
Division
|
(2,069)
|
|
|
(19,374)
|
|
Compression
Division
|
(14,333)
|
|
|
(104,700)
|
|
Offshore
Division
|
|
|
|
Offshore
Services
|
(6,335)
|
|
|
(7,708)
|
|
Maritech
|
(663)
|
|
|
(620)
|
|
Intersegment
eliminations
|
—
|
|
|
—
|
|
Offshore Division
total
|
(6,998)
|
|
|
(8,328)
|
|
Corporate overhead and
eliminations
|
(8,038)
|
|
|
(16,380)
|
|
Total income (loss)
before taxes
|
$
|
(11,162)
|
|
|
$
|
(149,140)
|
|
|
Please note that the
above results by Segment include special charges and expenses.
Please see Schedule E for details of those special
items.
|
Schedule C:
Consolidated Balance Sheet (Unaudited)
|
|
|
March 31,
2017
|
|
December 31,
2016
|
|
(In
Thousands)
|
Balance
Sheet:
|
|
|
|
Cash (excluding
restricted cash)
|
$
|
12,828
|
|
|
$
|
29,840
|
|
Accounts receivable,
net
|
128,050
|
|
|
114,284
|
|
Inventories
|
117,493
|
|
|
106,546
|
|
Other current
assets
|
26,098
|
|
|
25,121
|
|
PP&E,
net
|
923,673
|
|
|
945,451
|
|
Other
assets
|
91,351
|
|
|
94,298
|
|
Total
assets
|
$
|
1,299,493
|
|
|
$
|
1,315,540
|
|
|
|
|
|
Current portion of
decommissioning liabilities
|
$
|
944
|
|
|
$
|
1,451
|
|
Other current
liabilities
|
98,896
|
|
|
115,434
|
|
Long-term debt
(1)
|
640,396
|
|
|
623,730
|
|
Long-term portion of
decommissioning liabilities
|
54,538
|
|
|
54,027
|
|
CCLP Series A
Preferred
|
78,260
|
|
|
77,062
|
|
Warrant
liability
|
12,527
|
|
|
18,503
|
|
Other long-term
liabilities
|
25,005
|
|
|
24,867
|
|
Equity
|
388,927
|
|
|
400,466
|
|
Total liabilities and
equity
|
$
|
1,299,493
|
|
|
$
|
1,315,540
|
|
|
|
(1)
|
Please see Schedule D
for the individual debt obligations of TETRA and CSI Compressco
LP.
|
Schedule D:
Long-Term Debt
|
|
TETRA Technologies
Inc. and its subsidiaries, other than CSI Compressco LP and its
subsidiaries, are obligated under a bank credit agreement and a
senior note, neither of which is an obligation of CSI Compressco LP
and its subsidiaries. CSI Compressco LP and its subsidiaries are
obligated under a separate bank credit agreement and senior notes,
neither of which is an obligation of TETRA and its other
subsidiaries. Amounts presented are net of deferred financing
costs.
|
|
|
March 31,
2017
|
|
December 31,
2016
|
|
(In
Thousands)
|
TETRA
|
|
|
|
Bank revolving line
of credit facility
|
$
|
15,864
|
|
|
$
|
3,229
|
|
TETRA 11% Senior
Note
|
116,720
|
|
|
116,411
|
|
TETRA total
debt
|
132,584
|
|
|
119,640
|
|
Less current
portion
|
—
|
|
|
—
|
|
TETRA total
long-term debt
|
$
|
132,584
|
|
|
$
|
119,640
|
|
|
|
|
|
CSI Compressco
LP
|
|
|
|
Bank Credit
Facility
|
$
|
220,801
|
|
|
$
|
217,467
|
|
7.25% Senior
Notes
|
287,011
|
|
|
286,623
|
|
Total debt
|
507,812
|
|
|
504,090
|
|
Less current
portion
|
—
|
|
|
—
|
|
CCLP total
long-term debt
|
$
|
507,812
|
|
|
$
|
504,090
|
|
Consolidated total
long-term debt
|
$
|
640,396
|
|
|
$
|
623,730
|
|
Non-GAAP Financial Measures
In addition to financial results determined in accordance with
GAAP, this press release includes the following non-GAAP financial
measures for the Company: net debt, adjusted consolidated and
segment income (loss) before taxes, excluding the Maritech segment
and special charges; consolidated and segment adjusted EBITDA; and
TETRA only adjusted free cash flow. The following schedules provide
reconciliations of these non-GAAP financial measures to their most
directly comparable GAAP measures. The non-GAAP financial measures
should be considered in addition to, not as a substitute for,
financial measures prepared in accordance with GAAP, as more fully
discussed in the Company's financial statements and filings with
the Securities and Exchange Commission.
Management believes that following the sale of essentially all
of Maritech's oil and gas properties, it is helpful to show the
Company's results excluding the impact of the costs and charges
relating to the decommissioning of Maritech's remaining properties
since these results will show the Company's historical results of
operations on a basis consistent with expected future
operations. Management also believes that the exclusion of
the special charges from the historical results of operations
enables management to evaluate more effectively the Company's
operations over the prior periods and to identify operating trends
that could be obscured by the excluded items.
Adjusted income (loss) before taxes (and adjusted income (loss)
before taxes as a percent of revenue) is defined as the Company's
(or the segment's) income (loss) before taxes excluding certain
special or other charges (or credits). Adjusted income (loss)
before taxes (and adjusted income (loss) before taxes as a percent
of revenue) is used by management as a supplemental financial
measure to assess financial performance, without regard to charges
or credits that are considered by management to be outside of its
normal operations.
Adjusted diluted earnings (loss) per share is defined as the
Company's diluted earnings (loss) per share excluding certain
special or other charges (or credits) and using a normalized
effective income tax rate. Adjusted diluted earnings (loss) per
share is used by management as a supplemental financial measure to
assess financial performance, without regard to charges or credits
that are considered by management to be outside of its normal
operations.
Adjusted EBITDA (and Adjusted EBITDA as a percent of revenue) is
defined as earnings before interest, taxes, depreciation,
amortization, impairments and special charges, equity compensation,
and allocated corporate overhead charges to our CSI Compressco LP
subsidiary, pursuant to our Omnibus Agreement, which were
reimbursed with CSI Compressco LP common units. Adjusted EBITDA
(and Adjusted EBITDA as a percent of revenue) is used by management
as a supplemental financial measure to assess the financial
performance of the Company's assets, without regard to financing
methods, capital structure or historical cost basis and to assess
the Company's ability to incur and service debt and fund capital
expenditures.
TETRA only adjusted free cash flow is defined as cash from
TETRA's operations, excluding cash settlements of Maritech AROs,
less capital expenditures net of sales proceeds and cost of
equipment sold, and including cash distributions to TETRA from CSI
Compressco LP and debt restructuring costs. Management uses this
supplemental financial measure to:
- assess the Company's ability to retire debt;
- evaluate the capacity of the Company to further invest and
grow; and
- to measure the performance of the Company as compared to its
peer group of companies.
TETRA only adjusted free cash flow does not necessarily imply
residual cash flow available for discretionary expenditures, as it
excludes cash requirements for debt service or other
non-discretionary expenditures that are not deducted.
TETRA net debt is defined as the sum of the carrying value of
long-term and short-term debt on its consolidated balance sheet,
less cash, excluding restricted cash on the consolidated balance
sheet and excluding the debt and cash of CSI Compressco LP.
Management views TETRA net debt as a measure of TETRA's ability to
reduce debt, add to cash balances, pay dividends, repurchase stock,
and fund investing and financing activities.
Schedule E:
Special Items
|
|
|
|
|
|
Three Months
Ended
|
|
|
March 31,
2017
|
|
|
Income (Loss)
Before Tax
|
|
|
Provision
(Benefit) for Tax
|
|
|
Noncont.
Interest
|
|
|
Net Income
Attributable to TETRA Stockholders
|
|
|
Diluted
EPS
|
|
|
|
(In Thousands, Except
per Share Amounts)
|
|
Income (loss)
attributable to TETRA stockholders, excluding unusual charges and
Maritech
|
$
|
(26,998)
|
|
|
$
|
(8,100)
|
|
|
$
|
(7,647)
|
|
|
$
|
(11,251)
|
|
|
$
|
(0.10)
|
|
|
Severance
expense
|
(409)
|
|
|
(123)
|
|
|
(33)
|
|
|
(253)
|
|
|
|
0.00
|
|
|
Stock warrant fair
value adjustment
|
5,976
|
|
|
1,793
|
|
|
—
|
|
|
4,183
|
|
|
|
0.04
|
|
|
Allowance for bad
debt
|
(245)
|
|
|
(74)
|
|
|
—
|
|
|
(171)
|
|
|
|
0.00
|
|
|
Convertible Series A
preferred offering cost and fair
value adjustments
|
(1,631)
|
|
|
(489)
|
|
|
(1,109)
|
|
|
(33)
|
|
|
|
0.00
|
|
|
ARO adjustment
(accretion)
|
(71)
|
|
|
(21)
|
|
|
—
|
|
|
(50)
|
|
|
|
0.00
|
|
|
Legal award
|
12,879
|
|
|
3,864
|
|
|
—
|
|
|
9,015
|
|
|
|
0.08
|
|
|
Effect of deferred tax
valuation allowance and other
related tax adj
|
—
|
|
|
3,240
|
|
|
—
|
|
|
(3,240)
|
|
|
|
(0.03)
|
|
|
Maritech profit
(loss)
|
(663)
|
|
|
—
|
|
|
—
|
|
|
(663)
|
|
|
|
(0.01)
|
|
|
Net Income (loss)
attributable to TETRA stockholders, as reported
|
$
|
(11,162)
|
|
|
$
|
90
|
|
|
$
|
(8,789)
|
|
|
$
|
(2,463)
|
|
|
$
|
(0.02)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
December 31,
2016
|
|
|
Income (Loss)
Before Tax
|
|
|
Provision
(Benefit) for Tax
|
|
|
Noncont.
Interest
|
|
|
Net Income
Attributable to TETRA Stockholders
|
|
|
Diluted
EPS
|
|
|
|
(In Thousands, Except
per Share Amounts)
|
|
Income (loss)
attributable to TETRA stockholders, excluding unusual charges and
Maritech
|
$
|
(32,000)
|
|
|
$
|
(9,599)
|
|
|
$
|
(7,012)
|
|
|
$
|
(15,389)
|
|
|
$
|
(0.16)
|
|
|
Asset impairments and
write-offs
|
(7,245)
|
|
|
(2,174)
|
|
|
(1,373)
|
|
|
(3,698)
|
|
|
|
(0.04)
|
|
|
Non-Maritech ARO
adjustment
|
(282)
|
|
|
(85)
|
|
|
—
|
|
|
(197)
|
|
|
|
0.00
|
|
|
Severance
expense
|
(179)
|
|
|
(54)
|
|
|
—
|
|
|
(125)
|
|
|
|
0.00
|
|
|
Debt refinancing gain,
net
|
346
|
|
|
104
|
|
|
319
|
|
|
(77)
|
|
|
|
0.00
|
|
|
Convertible Series A
Preferred offering cost and fair value adjustments
|
1,806
|
|
|
542
|
|
|
1,210
|
|
|
54
|
|
|
|
0.00
|
|
|
Common stock warrants
issuance cost and fair value adjustments
|
(3,061)
|
|
|
(918)
|
|
|
—
|
|
|
(2,143)
|
|
|
|
(0.02)
|
|
|
Allowance for doubtful
accounts for significant bankruptcies
|
(119)
|
|
|
(36)
|
|
|
—
|
|
|
(83)
|
|
|
|
0.00
|
|
|
Effect of deferred tax
valuation allowance and other related tax adj
|
—
|
|
|
12,719
|
|
|
—
|
|
|
(12,719)
|
|
|
|
(0.14)
|
|
|
Maritech profit
(loss)
|
2,823
|
|
|
—
|
|
|
—
|
|
|
2,823
|
|
|
|
0.03
|
|
|
Net Income (loss)
attributable to TETRA stockholders, as reported
|
$
(37,911)
|
|
|
$
499
|
|
|
$
(6,856)
|
|
|
$
(31,554)
|
|
|
$
|
(0.33)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
March 31,
2016
|
|
|
Income (Loss)
Before Tax
|
|
Provision
(Benefit) for Tax
|
|
|
Noncont.
Interest
|
|
|
Net Income
Attributable to TETRA Stockholders
|
|
|
Diluted
EPS
|
|
|
Income (loss)
attributable to TETRA stockholders, excluding unusual charges and
Maritech
|
$
|
(30,890)
|
|
|
$
|
(9,266)
|
|
|
$
|
(2,391)
|
|
|
$
|
(19,233)
|
|
|
$
|
(0.24)
|
|
|
Asset impairments and
write-offs
|
(10,670)
|
|
|
(3,201)
|
|
|
(4,465)
|
|
|
(3,004)
|
|
|
|
(0.04)
|
|
|
Severance
expense
|
(755)
|
|
|
(226)
|
|
|
(138)
|
|
|
(391)
|
|
|
|
—
|
|
|
Goodwill
write-off
|
(106,205)
|
|
|
(31,862)
|
|
|
(52,412)
|
|
|
(21,931)
|
|
|
|
(0.28)
|
|
|
Effect of deferred tax
valuation allowance and other related tax adj
|
—
|
|
|
43,146
|
|
|
—
|
|
|
(43,146)
|
|
|
|
(0.54)
|
|
|
Maritech profit
(loss)
|
(620)
|
|
|
—
|
|
|
—
|
|
|
(620)
|
|
|
|
(0.01)
|
|
|
Net Income (loss)
attributable to TETRA stockholders, as reported
|
$
|
(149,140)
|
|
|
$
|
(1,409)
|
|
|
$
|
(59,406)
|
|
|
$
(88,325)
|
|
|
$
|
(1.11)
|
|
|
Schedule F:
Non-GAAP Reconciliation to GAAP Financials
|
|
|
|
Three Months
Ended
|
|
|
March 31,
2017
|
|
|
Net
Income
(Loss),
as
reported
|
Tax
Provision
|
Income
(Loss)
Before
Tax, as
Reported
|
Impairments
&
Special
(Credits)
Charges
|
Adjusted
Income
(Loss)
Before
Tax
|
Interest
Expense,
Net
|
Adjusted
Depreciation
&
Amortization
(2)
|
Equity
Comp.
Expense
|
Omnibus
Equity
(3)
|
Adjusted
EBITDA
|
|
|
(In
Thousands)
|
|
Fluids
Division
|
|
|
$
|
20,276
|
|
$
|
(12,681)
|
|
$
|
7,595
|
|
$
|
13
|
|
$
|
5,984
|
|
$
|
—
|
|
$
|
—
|
|
$
|
13,592
|
|
|
Production Testing
Division
|
|
|
(2,069)
|
|
265
|
|
(1,804)
|
|
(122)
|
|
3,085
|
|
—
|
|
—
|
|
1,159
|
|
|
Compression
Division
|
|
|
(14,333)
|
|
1,687
|
|
(12,646)
|
|
10,102
|
|
17,297
|
|
956
|
|
1,746
|
|
17,455
|
|
|
Offshore Services
Segment
|
|
|
(6,335)
|
|
206
|
|
(6,129)
|
|
—
|
|
2,584
|
|
—
|
|
—
|
|
(3,545)
|
|
|
Eliminations and
other
|
|
|
(166)
|
|
—
|
|
(166)
|
|
—
|
|
(5)
|
|
—
|
|
|
(171)
|
|
|
Subtotal
|
|
|
(2,627)
|
|
(10,523)
|
|
(13,150)
|
|
9,993
|
|
28,945
|
|
956
|
|
1,746
|
|
28,490
|
|
|
Corporate and
other
|
|
|
(7,872)
|
|
(5,976)
|
|
(13,848)
|
|
3,774
|
|
92
|
|
1,513
|
|
(1,746)
|
|
(10,215)
|
|
|
TETRA excluding
Maritech
|
|
|
(10,499)
|
|
(16,499)
|
|
(26,998)
|
|
13,767
|
|
29,037
|
|
2,469
|
|
—
|
|
18,275
|
|
|
Maritech
|
|
|
(663)
|
|
—
|
|
(663)
|
|
—
|
|
370
|
|
—
|
|
|
(293)
|
|
|
Total
TETRA
|
$
|
(11,252)
|
$
|
90
|
$
|
(11,162)
|
|
$
|
(16,499)
|
|
$
|
(27,661)
|
|
$
|
13,767
|
|
$
|
29,407
|
|
$
|
2,469
|
|
$
|
—
|
|
$
|
17,892
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
December 31,
2016
|
|
|
Net
Income
(Loss),
as
reported
|
Tax
Provision
|
Income
(Loss)
Before
Tax, as
Reported
|
Impairments
&
Special
(Credits)
Charges
|
Adjusted
Income
(Loss)
Before
Tax
|
Adjusted
Interest
Expense,
Net
(1)
|
Adjusted
Depreciation
&
Amortization
(2)
|
Equity
Comp.
Expense
|
Omnibus
Equity
(3)
|
Adjusted
EBITDA
|
|
|
(In
Thousands)
|
|
Fluids
Division
|
|
|
$
|
1,499
|
|
$
|
634
|
|
$
|
2,133
|
|
$
|
12
|
|
$
|
6,460
|
|
$
|
—
|
|
$
|
—
|
|
$
|
8,605
|
|
|
Production Testing
Division
|
|
|
(7,547)
|
|
3,596
|
|
$
|
(3,951)
|
|
(115)
|
|
3,579
|
|
—
|
|
—
|
|
(487)
|
|
|
Compression
Division
|
|
|
(11,821)
|
|
(268)
|
|
$
|
(12,089)
|
|
10,303
|
|
17,111
|
|
792
|
|
1,576
|
|
17,693
|
|
|
Offshore Services
Segment
|
|
|
(6,233)
|
|
1,216
|
|
$
|
(5,017)
|
|
—
|
|
2,689
|
|
—
|
|
—
|
|
(2,328)
|
|
|
Eliminations and
other
|
|
|
5
|
|
—
|
|
$
|
5
|
|
—
|
|
(5)
|
|
—
|
|
—
|
|
—
|
|
|
Subtotal
|
|
|
(24,097)
|
|
5,178
|
|
(18,919)
|
|
10,200
|
|
29,834
|
|
792
|
|
1,576
|
|
23,483
|
|
|
Corporate and
other
|
|
|
(16,637)
|
|
3,558
|
|
(13,079)
|
|
4,609
|
|
103
|
|
1,406
|
|
(1,576)
|
|
(8,537)
|
|
|
TETRA excluding
Maritech
|
|
|
(40,734)
|
|
8,736
|
|
(31,998)
|
|
14,809
|
|
29,937
|
|
2,198
|
|
—
|
|
14,946
|
|
|
Maritech
|
|
|
2,823
|
|
—
|
|
2,823
|
|
—
|
|
379
|
|
—
|
|
—
|
|
3,202
|
|
|
Total
TETRA
|
$
|
(38,410)
|
$
|
499
|
$
|
(37,911)
|
|
$
|
8,736
|
|
$
|
(29,175)
|
|
$
|
14,809
|
|
$
|
30,316
|
|
$
|
2,198
|
|
$
|
—
|
|
$
|
18,148
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
March 31,
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Income
(Loss),
as
reported
|
Tax
Provision
|
Income
(Loss)
Before
Tax,
as
Reported
|
Impairments
&
Special
Charges
|
Adjusted
Income
(Loss)
Before
Tax
|
Interest
Expense,
Net
|
Depreciation
&
Amortization
|
Equity
Comp.
Expense
|
Omnibus
Equity
|
Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In
Thousands)
|
|
|
|
Fluids
Division
|
|
|
$
|
(358)
|
|
$
|
114
|
|
$
|
(244)
|
|
$
|
(26)
|
|
$
|
7,396
|
|
$
|
—
|
|
$
|
—
|
|
$
|
7,126
|
|
|
Production Testing
Division
|
|
|
(19,374)
|
|
17,073
|
|
$
|
(2,301)
|
|
(189)
|
|
4,592
|
|
—
|
|
—
|
|
2,102
|
|
|
Compression
Division
|
|
|
(104,700)
|
|
100,443
|
|
$
|
(4,257)
|
|
8,802
|
|
18,464
|
|
636
|
|
—
|
|
23,645
|
|
|
Offshore Services
Segment
|
|
|
(7,708)
|
|
—
|
|
$
|
(7,708)
|
|
—
|
|
2,739
|
|
—
|
|
—
|
|
(4,969)
|
|
|
Eliminations and
other
|
|
|
4
|
|
—
|
|
$
|
4
|
|
—
|
|
(4)
|
|
—
|
|
—
|
|
—
|
|
|
Subtotal
|
|
|
(132,136)
|
|
117,630
|
|
(14,506)
|
|
8,587
|
|
33,187
|
|
636
|
|
—
|
|
27,904
|
|
|
Corporate and
other
|
|
|
(16,384)
|
|
—
|
|
(16,384)
|
|
6,052
|
|
115
|
|
1,737
|
|
—
|
|
(8,480)
|
|
|
TETRA excluding
Maritech
|
|
|
(148,520)
|
|
117,630
|
|
(30,890)
|
|
14,639
|
|
33,302
|
|
2,373
|
|
—
|
|
19,424
|
|
|
Maritech
|
|
|
(620)
|
|
—
|
|
(620)
|
|
—
|
|
305
|
|
—
|
|
—
|
|
(315)
|
|
|
Total
TETRA
|
$
|
(147,731)
|
$
|
(1,409)
|
$
|
(149,140)
|
|
$
|
117,630
|
|
$
|
(31,510)
|
|
$
|
14,639
|
|
$
|
33,607
|
|
$
|
2,373
|
|
$
|
—
|
|
$
|
19,109
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Adjusted interest
expense, net, for the three month period ended December 31, 2016,
excludes $0.5 million of certain interest expense which is included
as a special charge.
|
(2)
|
Adjusted depreciation
& amortization, net, for the three month period ended March 31,
2017, and December 31, 2016, excludes $0.1 million and $0.3
million, respectively, of certain accretion expense which is
included as a special charge.
|
(3)
|
Reimbursement from
CCLP under Omnibus Agreement that was or will be settled with
common units.
|
Schedule G:
Non-GAAP Reconciliation to TETRA Only Adjusted Free Cash
Flow
|
|
|
|
|
Three Months
Ended
|
|
|
March 31,
2017
|
|
December 31,
2016
|
|
March 31,
2016
|
|
|
(In
Thousands)
|
|
Consolidated
|
|
|
|
|
|
|
Net cash (used)
provided by operating activities
|
$
|
(20,538)
|
|
|
$
|
28,316
|
|
|
$
|
25,261
|
|
|
ARO
settlements
|
474
|
|
|
271
|
|
|
3,379
|
|
|
Capital expenditures,
net of sales proceeds
and cost of equipment sold
|
(4,812)
|
|
|
(5,268)
|
|
|
(1,985)
|
|
|
Consolidated adjusted
free cash flow
|
(24,876)
|
|
|
23,319
|
|
|
26,655
|
|
|
|
|
|
|
|
|
|
CSI Compressco
LP
|
|
|
|
|
|
|
Net cash provided by
operating activities(1)
|
1,821
|
|
|
15,922
|
|
|
15,095
|
|
|
Capital expenditures,
net of sales proceeds and cost of equipment sold
|
(7,215)
|
|
|
(3,057)
|
|
|
(1,353)
|
|
|
CSI Compressco free
cash flow
|
(5,394)
|
|
|
12,865
|
|
|
13,742
|
|
|
|
|
|
|
|
|
|
TETRA
Only
|
|
|
|
|
|
|
Cash from operating
activities
|
(20,327)
|
|
|
12,394
|
|
|
10,166
|
|
|
ARO
settlements
|
474
|
|
|
271
|
|
|
3,379
|
|
|
Capital expenditures,
net of sales proceeds and cost of equipment sold
|
371
|
|
|
(2,211)
|
|
|
(632)
|
|
|
Free cash flow before
ARO settlements
|
(19,482)
|
|
|
10,454
|
|
|
12,913
|
|
|
Distributions from CSI
Compressco LP
|
5,635
|
|
|
5,574
|
|
|
5,575
|
|
|
Adjusted free cash
flow
|
(13,847)
|
|
|
$
|
16,028
|
|
|
18,488
|
|
|
|
|
________________
|
(1)
|
TETRA only cash from
operating activities and capital expenditures, net, for the three
months ended March 31, 2017, include the elimination of an
intercompany equipment sale of $2.0 million.
|
Schedule H:
Non-GAAP Reconciliation of TETRA Net Debt
|
|
The cash and debt
positions of TETRA and CSI Compressco LP as of March 31, 2017, are
shown below. TETRA and CSI Compressco LP's debt agreements are
distinct and separate with no cross default provisions, no cross
collateral provisions and no cross guarantees. Management believes
that the most appropriate method to analyze the debt positions of
each company is to view them separately, as noted below.
|
|
The following reconciliation of net debt is presented as a
supplement to financial results prepared in accordance with GAAP.
|
|
|
March 31,
2017
|
|
TETRA
|
|
CCLP
|
|
Consolidated
|
|
(In
Millions)
|
Non-restricted
cash
|
$
|
7.4
|
|
|
$
|
5.4
|
|
|
$
|
12.8
|
|
|
|
|
|
|
|
Carrying value of
long-term debt:
|
|
|
|
|
|
Revolver debt
outstanding
|
15.9
|
|
|
220.8
|
|
|
236.7
|
|
Senior Notes
outstanding
|
116.7
|
|
|
287.0
|
|
|
403.7
|
|
Net debt
|
$
|
125.2
|
|
|
$
|
502.4
|
|
|
$
|
627.6
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/tetra-technologies-inc-announces-first-quarter-2017-results-and-provides-updated-total-year-2017-guidance-300455002.html
SOURCE TETRA Technologies, Inc.