THE WOODLANDS, Texas,
Feb. 28, 2019 /PRNewswire/
-- TETRA Technologies, Inc. ("TETRA" or the "Company")
(NYSE:TTI) today announced consolidated fourth quarter 2018
earnings per share before discontinued operations attributable to
TETRA stockholders of $0.04.
This compares to a consolidated net loss of $0.06 per share before discontinued operations
attributable to TETRA stockholders in the third quarter of 2018,
and a consolidated net loss per share before discontinued
operations attributable to TETRA stockholders of $0.22 in the fourth quarter of 2017.
TETRA's adjusted per share results attributable to TETRA
stockholders for the fourth quarter of 2018(1), before
discontinued operations and excluding special items, was a net loss
per share of $0.01. This
compares to an adjusted loss per share of $0.02 in the third quarter of 2018(1)
and adjusted loss per share of $0.03
in the fourth quarter of 2017(1), before discontinued
operations and excluding special items.
Fourth quarter 2018 revenue before discontinued operations was
$282 million, an increase of 10% over
the third quarter of 2018 and 41% over the fourth quarter of last
year.
Total year 2018 revenue before discontinued operations was
$999 million, an increase of 38% over
2017.
(1)
|
Adjusted
earnings/loss per share is not a generally accepted accounting
principle in the United States ("GAAP"). Please see Schedule F for
the reconciliations of these non-GAAP financial measures to the
most directly comparable GAAP measure.)
|
|
|
Fourth
Quarter 2018 Results
|
|
Three Months
Ended
|
|
December 31,
2018
|
|
September 30,
2018
|
|
December 31,
2017
|
|
(In Thousands, Except
per Share Amounts)
|
Revenue before
discontinued operations
|
$
|
282,471
|
|
|
$
|
256,851
|
|
|
$
|
200,081
|
|
Income (Loss) before
discontinued operations
|
3,316
|
|
|
(12,852)
|
|
|
(31,726)
|
|
Adjusted EBITDA
before discontinued operations(2)
|
46,609
|
|
|
41,803
|
|
|
29,635
|
|
GAAP EPS before
discontinued operations attributable to TETRA
stockholders
|
0.04
|
|
|
(0.06)
|
|
|
(0.22)
|
|
Adjusted EPS
attributable to TETRA stockholders(2)
|
(0.01)
|
|
|
(0.02)
|
|
|
(0.03)
|
|
GAAP net cash
provided by operating activities
|
44,953
|
|
|
13,760
|
|
|
27,761
|
|
TETRA only adjusted
free cash flow from continuing operations(2)
|
$
|
15,598
|
|
|
$
|
(558)
|
|
|
$
|
4,361
|
|
Total 2018
Results
|
|
Twelve Months
Ended
|
|
December 31,
2018
|
|
December 31,
2017
|
|
(In Thousands, Except
per Share Amounts)
|
Revenue before
discontinued operations
|
$
|
998,775
|
|
|
$
|
723,098
|
|
Net loss before
discontinued operations
|
(42,725)
|
|
|
(44,794)
|
|
Adjusted EBITDA
before discontinued operations(2)
|
160,918
|
|
|
122,066
|
|
GAAP EPS before
discontinued operations attributable to TETRA
stockholders
|
(0.16)
|
|
|
(0.19)
|
|
Adjusted EPS
attributable to TETRA stockholders(2)
|
(0.05)
|
|
|
(0.14)
|
|
GAAP net cash
provided by operating activities
|
46,586
|
|
|
64,595
|
|
TETRA only adjusted
free cash flow from continuing operations(2)
|
$
|
3,101
|
|
|
$
|
24,455
|
|
|
|
(2)
|
These measures are
not presented in accordance with GAAP. Please see the accompanying
schedules for the reconciliations of these non-GAAP financial
measures to the most directly comparable GAAP measures.
|
Fourth Quarter Highlights include:
- Consolidated profit before taxes and before discontinued
operations was $6.1 million, a
$19.1 million sequential improvement.
Consolidated Adjusted EBITDA before discontinued operations of
$46.6 million (16.5% of revenue)
increased sequentially by $4.8
million primarily due to much stronger results in our
Compression segment, which benefitted from one of the strongest new
equipment sales quarters in its history.
- Water & Flowback Services profit before taxes was
$8.0 million, 10.1% of revenue.
Adjusted EBITDA of $15.9 million was
unchanged from the third quarter despite a year-end slowdown in
activity by many operators. Revenue increased sequentially by
$1.2 million. Adjusted EBITDA margins
were 19.9% in the fourth quarter compared to 20.3% in the third
quarter 2018.
- Completion Fluids & Products profit before taxes was
$9.5 million, 14.7% of revenue.
Adjusted EBITDA of $13.0 million
compares to $12.5 million in the
third quarter, driven by strong Gulf of
Mexico and international offshore activity.
- Compression net loss before taxes was $3.3 million. Adjusted EBITDA increased to
$29.2 million from $24.6 million in the third quarter due to one of
the highest new equipment sales quarters in the segment's history
and stronger after-market activity. The Compression segment
continues to see improving activity levels from service equipment
being deployed into gathering and centralized gas lift systems and
higher demand for aftermarket services. Utilization of the service
fleet increased from 86.3% at the end of the third quarter to 86.6%
at the end of the fourth quarter.
- Completed an acquisition in the Water & Flowback segment in
the Appalachian region to increase our water management offerings
and balance out our production testing business there, further
boosting our integrated projects strategy.
Stuart M. Brightman, TETRA's
Chief Executive Officer, stated, "In the fourth quarter we saw
several of our segments perform at or above our expectations, which
was encouraging given the challenges our industry experienced as
oil prices declined to the low $40s/bbl range and from Permian
Basin take away constraints. Water & Flowback Services
revenue in the United States
increased sequentially led by strong Permian and Mid-Con
activity. We continue to make progress and gain traction with
our integrated water management offerings and are very pleased with
the traction we are gaining by bundling our multiple service
offerings with automation. US offshore completion fluids
revenue increased significantly and had the strongest quarter of
the year. Compression revenue increased sequentially by 20%
on higher new equipment sales and stronger aftermarket
services. We do not expect new equipment sales to continue
early in 2019 at the fourth quarter levels, but given the lead time
necessary to fabricate new equipment, we already have in the
backlog the vast majority of new equipment sales that we expect to
recognize in 2019.
"Water & Flowback Services fourth quarter 2018 revenue
increased 1.5% sequentially to $79.8
million primarily due to strong Permian and Mid-Con
activity, while the rest of the lower 48 slightly declined as
customers exhausted their budgets or scaled back activity for the
holidays. Although quarter on quarter the rig count was only
up modestly, the inventory of drilled but uncompleted wells (DUC's)
continued to increase at a faster pace, especially in the Permian
where they increased 18% since September
2018 according to the EIA. While some customers scaled
back in December for the holidays, others continued through the end
of the year and into January. Despite the slower completion
activity in the fourth quarter, we continue to gain momentum and
market share by integrating and automating our water management
solutions. We are now providing more than 16 different integrated
solution projects across multiple basins, up from 11 that we
reported in the prior quarter. These integrated solutions are
allowing us to differentiate ourselves and to provide more cost
effective and efficient solutions to our customers. When fully
implemented, these systems can reduce wellsite personnel
requirements by up to 40%. In the fourth quarter, we expanded
these offerings into a fourth region and had at least one
integrated project in each of the Permian, Appalachian, Mid-Con and
the Rockies regions. In December, we completed an acquisition
in this segment that broadens our footprint in the Appalachian
region and is expected to provide our customers an enhanced, more
efficient, diverse and strategically positioned portfolio of
integrated water management services in the Marcellus and Utica
basins. That acquisition was almost completely integrated
within two months of closing and has already generated revenue and
earnings above our initial expectations. The purchase price
included $7.7 million at closing,
funded from cash on hand and a $1.5
million earn-out to be paid in 2019 upon the attainment of
certain financial targets.
"Completion Fluids & Products revenue was $64.7 million for the fourth quarter of 2018, an
increase of 2.5% from the third quarter of 2018 driven by strong
offshore fluids sales. During the fourth quarter, we
experienced stronger completion fluid sales volumes in the
Gulf of Mexico and internationally
offshore than in previous quarters in 2018. On our conference
call last quarter, we reported that the TETRA CS
Neptune® completion fluid projects anticipated for the
fourth quarter of 2018 were pushed into 2019. One of the
anticipated projects was not completed by our customer as the
customer decided to cancel the completion phase of the well.
The drilling phase of the second project continues but usage of the
TETRA CS Neptune® fluids will be dependent on the
formation pressures encountered and the completion would likely not
be before the second half of 2019. We are also currently in
advanced discussions for a Gulf of
Mexico project scheduled for this year and believe that the
downhole pressures will require TETRA CS Neptune®
completion fluid as the solution. Beyond 2019 we are in
discussions with two other major Gulf of
Mexico deepwater operators for their lower tertiary
development projects. These lower tertiary development projects
will likely require our generation three TETRA CS
Neptune® fluid, capable of achieving a density of
17 lbs/gallon. The third generation technology is increasing
the number of TETRA CS Neptune® completion fluid
applications by significantly widening the downhole pressure window
and we continue to make strides in the development of this solution
as well as in testing it with our customers.
"Our overall pipeline for the TETRA CS Neptune®
completion fluid projects continues to build and our relationship
with Halliburton to identify additional TETRA CS
Neptune® completion fluid opportunities continues to
gain traction.
"Fourth quarter 2018 Compression revenue increased 19.8%
sequentially to $138.1 million,
reflecting a strong market environment. Compression and
related services gross margin was 43.6%. Compression and
related services gross margins excluding the impact of a tax
contingency of $2.1 million was 47.1%
(see Schedule K for reconciliation of this non-GAAP financial
measure), which decreased slightly from the third quarter due to
slightly higher labor and inventory-related costs. New
equipment orders of $18.0 million
were received in the fourth quarter while total orders received in
2018 were $188 million. Our new
equipment sales backlog was $105.2
million at the end of the fourth quarter, a decrease of
$35 million from the end of the third
quarter, which is primarily a function of strong equipment sales in
the fourth quarter. We expect to deliver all of the backlog by
year-end 2019. Compression loss before taxes for the fourth quarter
of 2018 was $3.3 million compared to
a $7.8 million loss for the third
quarter of 2018. Adjusted EBITDA was $29.2 million in the fourth quarter, compared to
$24.6 million in the third
quarter. On December 20, 2018,
CSI Compressco LP, a partially owned subsidiary (the
"Partnership"), announced plans to reduce the quarterly common unit
distribution for the fourth quarter from the $0.1875 per unit ($0.75 per unit per year) previously paid to
$0.01 per unit ($0.04 per unit per year) for up to the following
four quarters. The Partnership's intention is to review this
reduction in the distribution in the second half of 2019. The
Partnership intends to use the savings from the reduced
distributions to cash redeem the remaining outstanding Series A
Convertible Preferred Units to avoid diluting the Partnership's
existing common unit holders as a result of the low trading price
of the common units despite a strong earnings environment and
outlook. On January 22, 2019,
the Partnership declared a cash distribution attributable to the
fourth quarter of 2018 of $0.01 per
outstanding common unit, which was paid on February 14, 2019 to common unitholders of record
as of the close of business on February
1, 2019. The distribution coverage ratio for the
fourth quarter of 2018 was 28x.The Partnership's goal as stated at
the May 31, 2018 investor conference
in New York City continues to be
to improve its EBITDA leverage ratio from the current levels to
4.5x or below and it believes it is making progress towards that
goal."
Free Cash Flow and Balance Sheet
Consolidated net cash from operating activities for the fourth
quarter of 2018 was $45.0
million. TETRA only adjusted free cash flow in the
fourth quarter was $15.3
million. Consolidated net debt was $775.5 million, while TETRA only net debt was
$158.3 million (see Schedules H and I
for reconciliations of these non-GAAP financial measures). At
the end of the fourth quarter TETRA only non-restricted cash was
$24.2 million.
Special items
Special items, including Discontinued Operations, incurred in
the fourth quarter, as detailed on Schedule F, include the
following:
- $11.2 million non-cash gain for
TETRA stock warrant fair value adjustment
- $2.1 million non-cash gain for
the fair value adjustment of CSI Compressco's Series A Convertible
Preferred Units
- $0.8 million of transaction
expenses related to acquisition activities
- $0.3 million non-cash expense for
a fair value adjustment of the SwiftWater earn-out obligation
- $2.1 million expense for CSI
Compressco non-income tax contingency
- $0.7 million non-cash expense for
fixed assets/intangible impairment and other charges
Additionally, a normalized tax rate of 21% is reflected in
Adjusted Net Income, as shown on Schedule F.
Conference Call
TETRA will host a conference call to discuss these results
today, February 28, 2018, at
10:30 a.m. ET. The phone number for
the call is 1-888-347-5303. The conference will also be available
by live audio webcast and may be accessed through TETRA's website
at www.tetratec.com. A replay of the conference call will be
available at 1-877-344-7529 conference number 10127858, for one
week following the conference call and the archived webcast call
will be available through the Company's website for 30 days
following the conference call.
Investor Contact
TETRA Technologies, Inc., The Woodlands,
Texas
Stuart M. Brightman
Ph: 281-367-1983
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: Statement Regarding Use of Non-GAAP Financial
Measures
Schedule F: Special Items
Schedule G: Non-GAAP Reconciliation to GAAP Financials
Schedule H: Non-GAAP Reconciliation of TETRA Net Debt
Schedule I: Non-GAAP Reconciliation to TETRA Only Adjusted Free
Cash Flow
Schedule J: Non-GAAP Reconciliation to TETRA Only Adjusted Cash
Flow From Continuing Operations
Schedule K: Non-GAAP Reconciliation to Compression and Related
Services Gross Profit and Gross Margin Excluding the Impact of Tax
Contingency
Company Overview and Forward-Looking Statements
TETRA Technologies, Inc. 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, and compression services and equipment. TETRA
owns an equity interest, including all of the general partner
interest, in CSI Compressco LP (NASDAQ:CCLP), a master limited
partnership.
This news 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 benefits
from the acquisition of SwiftWater Energy Services and expected
results of operational business segments for 2019, including levels
of CSI Compressco's 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. 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 Reports on Form 10-K, 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
December 31,
|
|
Twelve Months
Ended
December 31,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
(In Thousands, Except
per Share Amounts)
|
Revenues
|
$
|
282,471
|
|
|
$
|
200,081
|
|
|
$
|
998,775
|
|
|
$
|
723,098
|
|
|
|
|
|
|
|
|
|
Cost of sales,
services, and rentals
|
206,561
|
|
|
142,852
|
|
|
717,931
|
|
|
498,131
|
|
Depreciation,
amortization, and accretion
|
30,045
|
|
|
25,803
|
|
|
114,925
|
|
|
104,053
|
|
Impairments and other
charges
|
681
|
|
|
14,876
|
|
|
3,621
|
|
|
14,876
|
|
Insurance
recoveries
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,352)
|
|
Total cost of
revenues
|
237,287
|
|
|
183,531
|
|
|
836,477
|
|
|
614,708
|
|
Gross profit
|
45,184
|
|
|
16,550
|
|
|
162,298
|
|
|
108,390
|
|
|
|
|
|
|
|
|
|
General and
administrative expense
|
33,580
|
|
|
29,518
|
|
|
132,446
|
|
|
115,414
|
|
Interest expense,
net
|
18,700
|
|
|
14,497
|
|
|
70,946
|
|
|
57,246
|
|
Warrants fair value
adjustment (income) expense
|
(11,151)
|
|
|
6,267
|
|
|
(11,129)
|
|
|
(5,301)
|
|
CCLP Series A
Preferred fair value adjustment
|
(2,077)
|
|
|
1,365
|
|
|
(733)
|
|
|
(2,975)
|
|
Litigation
arbitration award (income)
|
—
|
|
|
—
|
|
|
—
|
|
|
(12,816)
|
|
Other (income)
expense, net
|
(9)
|
|
|
54
|
|
|
7,194
|
|
|
865
|
|
Income (loss) before
taxes and discontinued operations
|
6,141
|
|
|
(35,151)
|
|
|
(36,426)
|
|
|
(44,043)
|
|
Provision for income
taxes
|
2,825
|
|
|
(3,425)
|
|
|
6,299
|
|
|
751
|
|
Income (Loss) before
discontinued operations
|
3,316
|
|
|
(31,726)
|
|
|
(42,725)
|
|
|
(44,794)
|
|
Discontinued
operations:
|
|
|
|
|
|
|
|
Loss from discontinued
operations, net of taxes
|
(584)
|
|
|
(3,248)
|
|
|
(41,515)
|
|
|
(17,389)
|
|
Net income
(loss)
|
2,732
|
|
|
(34,974)
|
|
|
(84,240)
|
|
|
(62,183)
|
|
Net (income) loss
attributable to noncontrolling interest
|
2,200
|
|
|
6,235
|
|
|
22,623
|
|
|
23,135
|
|
Net income (loss)
attributable to TETRA stockholders
|
$
|
4,932
|
|
|
$
|
(28,739)
|
|
|
$
|
(61,617)
|
|
|
$
|
(39,048)
|
|
|
|
|
|
|
|
|
|
Basic per share
information:
|
|
|
|
|
|
|
|
Net income (loss)
attributable to TETRA stockholders
|
$
|
0.04
|
|
|
$
|
(0.25)
|
|
|
$
|
(0.50)
|
|
|
$
|
(0.34)
|
|
Weighted average shares
outstanding
|
125,717
|
|
|
114,696
|
|
|
124,101
|
|
|
114,499
|
|
|
|
|
|
|
|
|
|
Diluted per share
information:
|
|
|
|
|
|
|
|
Net income (loss)
attributable to TETRA stockholders
|
$
|
0.04
|
|
|
$
|
(0.25)
|
|
|
$
|
(0.50)
|
|
|
$
|
(0.34)
|
|
Weighted average shares
outstanding
|
125,789
|
|
|
114,696
|
|
|
124,101
|
|
|
114,499
|
|
Schedule B:
Financial Results By Segment (Unaudited)
|
|
|
|
|
|
Three Months
Ended
December 31,
|
|
Twelve Months
Ended
December 31,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
(In
Thousands)
|
Revenues by
segment:
|
|
|
|
|
|
|
|
Completion Fluids &
Products
|
$
|
64,675
|
|
|
$
|
56,305
|
|
|
$
|
257,408
|
|
|
$
|
257,851
|
|
Water & Flowback
Services
|
79,783
|
|
|
61,308
|
|
|
303,072
|
|
|
171,621
|
|
Compression
|
138,066
|
|
|
83,105
|
|
|
438,673
|
|
|
295,587
|
|
Eliminations and
other
|
(53)
|
|
|
(637)
|
|
|
(378)
|
|
|
(1,961)
|
|
Total
revenues
|
$
|
282,471
|
|
|
$
|
200,081
|
|
|
$
|
998,775
|
|
|
$
|
723,098
|
|
|
|
|
|
|
|
|
|
Gross profit
(loss) by segment:
|
|
|
|
|
|
|
|
Completion Fluids &
Products
|
$
|
14,464
|
|
|
$
|
10,918
|
|
|
$
|
48,675
|
|
|
$
|
71,022
|
|
Water & Flowback
Services
|
13,691
|
|
|
(5,031)
|
|
|
55,247
|
|
|
2,319
|
|
Compression
|
17,197
|
|
|
10,403
|
|
|
59,017
|
|
|
35,114
|
|
Eliminations and
other
|
(168)
|
|
|
260
|
|
|
(641)
|
|
|
(65)
|
|
Total gross
profit
|
$
|
45,184
|
|
|
$
|
16,550
|
|
|
$
|
162,298
|
|
|
$
|
108,390
|
|
|
|
|
|
|
|
|
|
Income (loss)
before taxes and discontinued operations by segment:
|
|
|
|
|
|
|
|
Completion Fluids &
Products
|
$
|
9,480
|
|
|
$
|
6,406
|
|
|
$
|
30,623
|
|
|
$
|
63,891
|
|
Water & Flowback
Services
|
8,044
|
|
|
(9,718)
|
|
|
28,712
|
|
|
(12,816)
|
|
Compression
|
(3,280)
|
|
|
(9,719)
|
|
|
(33,797)
|
|
|
(37,246)
|
|
Eliminations and
other
|
(8,103)
|
|
|
(22,120)
|
|
|
(61,964)
|
|
|
(57,872)
|
|
Total income (loss)
before taxes and discontinued operations
|
$
|
6,141
|
|
|
$
|
(35,151)
|
|
|
$
|
(36,426)
|
|
|
$
|
(44,043)
|
|
Please note that the above results by Segment include special
charges and expenses. Please see Schedule F for details of those
special charges and expenses.
Schedule C:
Consolidated Balance Sheet (Unaudited)
|
|
|
|
|
|
December 31,
2018
|
|
December 31,
2017
|
|
(In
Thousands)
|
Balance
Sheet:
|
|
|
|
Cash (excluding
restricted cash)
|
$
|
40,038
|
|
|
$
|
26,128
|
|
Accounts receivable,
net
|
187,592
|
|
|
144,051
|
|
Inventories
|
143,571
|
|
|
115,438
|
|
Assets of
discontinued operations
|
1,354
|
|
|
34,879
|
|
Note receivable,
including accrued interest
|
7,544
|
|
|
—
|
|
Other current
assets
|
20,592
|
|
|
17,858
|
|
PP&E,
net
|
853,931
|
|
|
809,432
|
|
Long-term assets of
discontinued operations
|
—
|
|
|
86,255
|
|
Other
assets
|
130,905
|
|
|
74,573
|
|
Total
assets
|
$
|
1,385,527
|
|
|
$
|
1,308,614
|
|
|
|
|
|
Liabilities of
discontinued operations
|
$
|
4,145
|
|
|
$
|
25,688
|
|
Other current
liabilities
|
196,206
|
|
|
148,026
|
|
Long-term debt
(1)
|
815,560
|
|
|
629,855
|
|
Long-term portion of
asset retirement obligations
|
12,202
|
|
|
11,738
|
|
CCLP Series A
Preferred
|
27,019
|
|
|
61,436
|
|
Warrants
liability
|
2,073
|
|
|
13,202
|
|
Long-term liability
of discontinued operations
|
—
|
|
|
48,225
|
|
Other long-term
liabilities
|
15,573
|
|
|
17,883
|
|
Equity
|
312,749
|
|
|
352,561
|
|
Total liabilities and
equity
|
$
|
1,385,527
|
|
|
$
|
1,308,614
|
|
|
(1) Please see
Schedule D for the individual debt obligations of TETRA and CSI
Compressco LP.
|
Schedule D: Long-Term Debt (Unaudited)
TETRA Technologies Inc. and its subsidiaries, other than CSI
Compressco LP and its subsidiaries, are obligated under an
asset-based bank credit agreement and term credit agreement,
neither of which are obligations of CSI Compressco LP and its
subsidiaries. CSI Compressco LP and its subsidiaries are obligated
under a separate asset-based bank credit agreement and two series
of senior notes, neither of which are obligations of TETRA and its
other subsidiaries. Amounts presented are net of deferred financing
costs.
|
December 31,
2018
|
|
December 31,
2017
|
|
(In
Thousands)
|
TETRA
|
|
|
|
Term credit
agreement
|
$
182,547
|
|
|
$
—
|
|
TETRA asset-based
credit agreement
|
—
|
|
|
—
|
|
TETRA 11% Senior
Note
|
—
|
|
|
117,679
|
|
TETRA total
debt
|
182,547
|
|
|
117,679
|
|
Less current
portion
|
—
|
|
|
—
|
|
TETRA total
long-term debt
|
$
|
182,547
|
|
|
$
|
117,679
|
|
|
|
|
|
CSI Compressco
LP
|
|
|
|
CCLP Prior Credit
Facility
|
$
|
—
|
|
|
$
|
223,985
|
|
CCLP asset-based
credit agreement
|
—
|
|
|
—
|
|
7.25% Senior
Notes
|
289,797
|
|
|
288,191
|
|
7.50% Senior Secured
Notes
|
343,216
|
|
|
—
|
|
CCLP total
debt
|
633,013
|
|
|
512,176
|
|
Less current
portion
|
—
|
|
|
—
|
|
CCLP total
long-term debt
|
$
|
633,013
|
|
|
$
|
512,176
|
|
Consolidated total
long-term debt
|
$
|
815,560
|
|
|
$
|
629,855
|
|
Schedule E: Statement Regarding Use of 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, and special charges;
consolidated and segment adjusted EBITDA; and TETRA only adjusted
free cash flow and TETRA only free cash flow from continuing
operations. 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 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 before discontinued
operations 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 before discontinued operations (and Adjusted
EBITDA before discontinued operations as a percent of revenue) is
defined as earnings before interest, taxes, depreciation,
amortization, impairments and certain non-cash charges and
non-recurring adjustments. Adjusted EBITDA before discontinued
operations (and Adjusted EBITDA before discontinued operations 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 a non-GAAP measure that
the Company defines 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. TETRA only adjusted
free cash flow from continuing operations is defined as TETRA only
adjusted free cash flow less discontinued operations EBITDA and
discontinued operations capital expenditures. 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.
TETRA only adjusted free cash flow and TETRA only adjusted free
cash flow from continuing operations 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 F:
Special Items (Unaudited)
|
|
|
|
Three Months
Ended
|
|
December 31,
2018
|
|
Income (Loss)
Before Tax
|
Provision
(Benefit) for Tax
|
Noncont.
Interest
|
Net Income
Attributable to TETRA Stockholders
|
EPS
|
|
(In Thousands, Except
per Share Amounts)
|
Loss attributable to
TETRA stockholders, excluding special items and discontinued
operations
|
$
|
(3,822)
|
|
$
|
(803)
|
|
$
|
(1,909)
|
|
$
|
(1,110)
|
|
$
|
(0.01)
|
|
Stock Warrant fair
value adjustment
|
11,150
|
|
2,342
|
|
—
|
|
8,808
|
|
0.07
|
|
Convertible Series A
preferred fair value adjustments
|
2,077
|
|
436
|
|
1,662
|
|
(21)
|
|
0.00
|
|
Other costs and
expenses
|
(773)
|
|
(162)
|
|
—
|
|
(611)
|
|
0.00
|
|
Earnout
adjustment
|
300
|
|
63
|
|
—
|
|
237
|
|
0.00
|
|
Non-income tax
contingency
|
(2,110)
|
|
(443)
|
|
(1,476)
|
|
(191)
|
|
0.00
|
|
Impairments and other
charges
|
(681)
|
|
(143)
|
|
(477)
|
|
(61)
|
|
0.00
|
|
Effect of deferred tax
valuation allowance and other related tax adjustments
|
—
|
|
1,535
|
|
—
|
|
(1,535)
|
|
(0.01)
|
|
Net income (loss)
before discontinued operations
|
6,141
|
|
2,825
|
|
(2,200)
|
|
5,516
|
|
0.04
|
|
Loss from discontinued
operations
|
|
|
|
(584)
|
|
0.00
|
|
Net Income (loss)
attributable to TETRA stockholders, as reported
|
|
|
|
$
|
4,932
|
|
$
|
0.04
|
|
|
|
|
|
|
Three Months
Ended
|
|
September 30,
2018
|
|
Income (Loss)
Before Tax
|
Provision
(Benefit) for Tax
|
Noncont.
Interest
|
Net Income
Attributable to TETRA Stockholders
|
EPS
|
|
(In Thousands, Except
per Share Amounts)
|
Loss attributable to
TETRA stockholders, excluding special items and discontinued
operations
|
$
|
(8,823)
|
|
$
|
(1,854)
|
|
$
|
(4,646)
|
|
$
|
(2,323)
|
|
$
|
(0.02)
|
|
Stock warrant fair
value adjustment
|
179
|
|
38
|
|
—
|
|
141
|
|
0.00
|
|
Convertible Series A
preferred fair value adjustments
|
(498)
|
|
(105)
|
|
(362)
|
|
(31)
|
|
0.00
|
|
Other costs and
expenses
|
(426)
|
|
(89)
|
|
(112)
|
|
(225)
|
|
0.00
|
|
Earnout
adjustment
|
600
|
|
126
|
|
—
|
|
474
|
|
0.00
|
|
Financing
costs
|
(1,040)
|
|
(218)
|
|
—
|
|
(822)
|
|
(0.01)
|
|
Impairments and other
charges
|
(2,940)
|
|
(617)
|
|
—
|
|
(2,323)
|
|
(0.02)
|
|
Effect of deferred tax
valuation allowance and other related tax adjustments
|
—
|
|
2,623
|
|
—
|
|
(2,623)
|
|
(0.02)
|
|
Net income (loss)
before discontinued operations
|
(12,948)
|
|
(96)
|
|
(5,120)
|
|
(7,732)
|
|
(0.06)
|
|
Loss from discontinued
operations
|
|
|
|
796
|
|
0.00
|
|
Net Income (loss)
attributable to TETRA stockholders, as reported
|
|
|
|
$
|
(6,936)
|
|
$
|
(0.06)
|
|
|
|
|
|
|
Three Months
Ended
|
|
December 31,
2017
|
|
Income (Loss)
Before Tax
|
Provision
(Benefit) for Tax
|
Noncont.
Interest
|
Net Income
Attributable to TETRA Stockholders
|
EPS
|
|
(In Thousands, Except
per Share Amounts)
|
Loss attributable to
TETRA stockholders, excluding special items and discontinued
operations
|
$
|
(11,474)
|
|
$
|
(3,442)
|
|
$
|
(5,150)
|
|
$
|
(2,882)
|
|
$
|
(0.03)
|
|
Impairments and other
charges, including inventory adjustments
|
(14,784)
|
|
(4,435)
|
|
—
|
|
(10,349)
|
|
(0.09)
|
|
Severance
expense
|
(87)
|
|
(26)
|
|
—
|
|
(61)
|
|
0.00
|
|
Stock Warrant fair
value adjustment
|
(6,266)
|
|
(1,880)
|
|
—
|
|
(4,386)
|
|
(0.04)
|
|
Bad debt expense from
customer bankruptcies
|
(100)
|
|
(30)
|
|
—
|
|
(70)
|
|
0.00
|
|
CCLP series A
Preferred fair value adjustment
|
(1,365)
|
|
(410)
|
|
(965)
|
|
10
|
|
0.00
|
|
Software
implementation
|
(194)
|
|
(58)
|
|
(120)
|
|
(16)
|
|
0.00
|
|
Transaction
costs
|
(881)
|
|
(264)
|
|
—
|
|
(617)
|
|
(0.01)
|
|
Effect of deferred
tax valuation allowance and other related tax
adjustments
|
—
|
|
7,120
|
|
—
|
|
(7,120)
|
|
(0.06)
|
|
Net income (loss)
before discontinued operations
|
(35,151)
|
|
(3,425)
|
|
(6,235)
|
|
(25,491)
|
|
(0.22)
|
|
Loss from discontinued
operations
|
|
|
|
(3,248)
|
|
(0.03)
|
|
Net Income (loss)
attributable to TETRA stockholders, as reported
|
|
|
|
$
|
(28,739)
|
|
$
|
(0.25)
|
|
|
|
|
|
|
Twelve Months
Ended
|
|
December 31,
2018
|
|
Income (Loss)
Before Tax
|
Provision
(Benefit) for Tax
|
Noncont.
Interest
|
Net Income
Attributable to TETRA Stockholders
|
EPS
|
|
(In Thousands, Except
per Share Amounts)
|
Loss attributable to
TETRA stockholders, excluding special items and discontinued
operations
|
$
|
(32,334)
|
|
$
|
(6,734)
|
|
$
|
(19,044)
|
|
$
|
(6,556)
|
|
$
|
(0.05)
|
|
Severance
expense
|
(116)
|
|
(24)
|
|
(9)
|
|
(83)
|
|
0.00
|
|
Stock Warrant fair
value adjustment
|
11,129
|
|
2,338
|
|
1,662
|
|
7,129
|
|
0.06
|
|
Convertible Series A
preferred fair value adjustments
|
733
|
|
154
|
|
(929)
|
|
1,508
|
|
0.01
|
|
Prior debt issuance
costs
|
(3,541)
|
|
(744)
|
|
(2,238)
|
|
(559)
|
|
0.00
|
|
Other costs and
expenses
|
(2,126)
|
|
(445)
|
|
(112)
|
|
(1,569)
|
|
(0.01)
|
|
Earnout
adjustment
|
(3,400)
|
|
(714)
|
|
—
|
|
(2,686)
|
|
(0.02)
|
|
Financing
costs
|
(1,040)
|
|
(218)
|
|
—
|
|
(822)
|
|
(0.01)
|
|
Non-income tax
contingency
|
(2,110)
|
|
(443)
|
|
(1,476)
|
|
(191)
|
|
0.00
|
|
Impairments and other
charges
|
(3,621)
|
|
(760)
|
|
(477)
|
|
(2,384)
|
|
(0.02)
|
|
Effect of Deferred Tax
Valuation Allowance and other related tax adjustments
|
—
|
|
13,889
|
|
—
|
|
(13,889)
|
|
(0.11)
|
|
Net Income (loss)
before discontinued operations
|
(36,426)
|
|
6,299
|
|
(22,623)
|
|
(20,102)
|
|
(0.16)
|
|
Loss from discontinued
operations
|
|
|
|
(41,515)
|
|
(0.34)
|
|
Net Income (loss)
attributable to TETRA stockholders, as reported
|
|
|
|
$
|
(61,617)
|
|
$
|
(0.50)
|
|
|
|
|
|
|
Twelve Months
Ended
|
|
December 31,
2017
|
|
Income (Loss)
Before Tax
|
Provision
(Benefit) for Tax
|
Noncont.
Interest
|
Net Income
Attributable to TETRA Stockholders
|
EPS
|
|
(In Thousands, Except
per Share Amounts)
|
Loss attributable to
TETRA stockholders, excluding special items and discontinued
operations
|
$
|
(46,564)
|
|
$
|
(13,969)
|
|
$
|
(16,237)
|
|
$
|
(16,358)
|
|
$
|
(0.14)
|
|
Impairments and other
charges, including inventory adjustments
|
(14,784)
|
|
(4,435)
|
|
—
|
|
(10,349)
|
|
(0.09)
|
|
Severance
expense
|
(1,036)
|
|
(311)
|
|
(38)
|
|
(687)
|
|
(0.01)
|
|
Stock Warrant fair
value adjustment
|
5,301
|
|
1,591
|
|
—
|
|
3,710
|
|
0.03
|
|
Bad debt expense from
customer bankruptcies
|
(203)
|
|
(61)
|
|
—
|
|
(142)
|
|
0.00
|
|
CCLP series A
Preferred fair value adjustment
|
2,975
|
|
893
|
|
(5,307)
|
|
7,389
|
|
0.06
|
|
Legal
Award
|
12,879
|
|
3,864
|
|
—
|
|
9,015
|
|
0.08
|
|
Software
implementation
|
(974)
|
|
(292)
|
|
(1,553)
|
|
871
|
|
0.01
|
|
Transaction
costs
|
(1,637)
|
|
(491)
|
|
—
|
|
(1,146)
|
|
(0.01)
|
|
Effect of deferred
tax valuation allowance and other related tax
adjustments
|
—
|
|
13,962
|
|
—
|
|
(13,962)
|
|
(0.12)
|
|
Net Income (loss)
before discontinued operations
|
(44,043)
|
|
751
|
|
(23,135)
|
|
(21,659)
|
|
(0.19)
|
|
Loss from
discontinued operations
|
|
|
|
(17,389)
|
|
(0.15)
|
|
Net Income (loss)
attributable to TETRA stockholders, as reported
|
|
|
|
$
|
(39,048)
|
|
$
|
(0.34)
|
|
Schedule G:
Non-GAAP Reconciliation to GAAP Financials
(Unaudited)
|
|
|
|
Three Months
Ended
|
|
December 31,
2018
|
|
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
|
Adjusted
EBITDA
|
|
(In
Thousands)
|
Completion Fluids &
Products
|
|
|
$
|
9,480
|
|
$
|
—
|
|
$
|
9,480
|
|
$
|
(164)
|
|
$
|
3,723
|
|
$
|
—
|
|
$
|
13,039
|
|
Water & Flowback
Services
|
|
|
8,043
|
|
(300)
|
|
7,743
|
|
10
|
|
8,151
|
|
—
|
|
15,904
|
|
Compression
|
|
|
(3,282)
|
|
714
|
|
(2,568)
|
|
13,367
|
|
18,004
|
|
380
|
|
29,183
|
|
Eliminations and
other
|
|
|
4
|
|
—
|
|
4
|
|
—
|
|
(4)
|
|
—
|
|
—
|
|
Subtotal
|
|
|
14,245
|
|
414
|
|
14,659
|
|
13,213
|
|
29,874
|
|
380
|
|
58,126
|
|
Corporate and
other
|
|
|
(8,104)
|
|
(10,377)
|
|
(18,481)
|
|
5,487
|
|
171
|
|
1,306
|
|
(11,517)
|
|
TETRA excluding
Discontinued Operations
|
$
|
3,316
|
|
$
|
2,825
|
|
$
|
6,141
|
|
$
|
(9,963)
|
|
$
|
(3,822)
|
|
$
|
18,700
|
|
$
|
30,045
|
|
$
|
1,686
|
|
$
|
46,609
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
September 30,
2018
|
|
Net Income (Loss), as
reported
|
Tax
Provision
|
Income (Loss) Before
Tax, as Reported
|
Impairments &
Special Charges
|
Adjusted Income
(Loss) Before Tax
|
Interest
Expense
|
Depreciation & Amortization
|
Equity Comp.
Expense
|
Adjusted
EBITDA
|
|
(In
Thousands)
|
Completion Fluids &
Products
|
|
|
$
|
8,713
|
|
$
|
—
|
|
$
|
8,713
|
|
$
|
(70)
|
|
$
|
3,846
|
|
$
|
—
|
|
$
|
12,489
|
|
Water & Flowback
Services
|
|
|
5,809
|
|
2,340
|
|
8,149
|
|
5
|
|
7,765
|
|
—
|
|
15,919
|
|
Compression
|
|
|
(7,844)
|
|
675
|
|
(7,169)
|
|
13,690
|
|
17,682
|
|
367
|
|
24,570
|
|
Eliminations and
other
|
|
|
5
|
|
—
|
|
5
|
|
1
|
|
(5)
|
|
—
|
|
1
|
|
Subtotal
|
|
|
6,683
|
|
3,015
|
|
9,698
|
|
13,626
|
|
29,288
|
|
367
|
|
52,979
|
|
Corporate and
other
|
|
|
(19,631)
|
|
1,111
|
|
(18,520)
|
|
5,268
|
|
172
|
|
1,904
|
|
(11,176)
|
|
TETRA excluding
Discontinued Operations
|
$
|
(12,852)
|
|
$
|
(96)
|
|
$
|
(12,948)
|
|
$
|
4,126
|
|
$
|
(8,822)
|
|
$
|
18,894
|
|
$
|
29,460
|
|
$
|
2,271
|
|
$
|
41,803
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
December 31,
2017
|
|
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
|
Adjusted Equity Comp.
Expense
|
Adjusted
EBITDA
|
|
(In
Thousands)
|
Completion Fluids &
Products
|
|
|
$
|
6,407
|
|
$
|
83
|
|
$
|
6,490
|
|
$
|
(85)
|
|
$
|
4,019
|
|
$
|
—
|
|
$
|
10,424
|
|
Water & Flowback
Services
|
|
|
(9,718)
|
|
15,212
|
|
5,494
|
|
(3)
|
|
4,327
|
|
—
|
|
9,818
|
|
Compression
|
|
|
(9,719)
|
|
1,559
|
|
(8,160)
|
|
10,985
|
|
17,280
|
|
(934)
|
|
19,171
|
|
Eliminations and
other
|
|
|
5
|
|
—
|
|
5
|
|
—
|
|
(5)
|
|
—
|
|
—
|
|
Subtotal
|
|
|
(13,025)
|
|
16,854
|
|
3,829
|
|
10,897
|
|
25,621
|
|
(934)
|
|
39,413
|
|
Corporate and
other
|
|
|
(22,126)
|
|
7,147
|
|
(14,979)
|
|
3,600
|
|
182
|
|
1,419
|
|
(9,778)
|
|
TETRA excluding
Discontinued Operations
|
$
|
(31,726)
|
|
$
|
(3,425)
|
|
$
|
(35,151)
|
|
$
|
24,001
|
|
$
|
(11,150)
|
|
$
|
14,497
|
|
$
|
25,803
|
|
$
485
|
$
|
29,635
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months
Ended
|
|
December 31,
2018
|
|
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)
|
Completion Fluids &
Products
|
|
|
$
|
30,623
|
|
$
|
70
|
|
$
|
30,693
|
|
$
|
(599)
|
|
$
|
15,345
|
|
$
|
—
|
|
$
|
—
|
|
$
|
45,439
|
|
Water & Flowback
Services
|
|
|
28,712
|
|
6,373
|
|
35,085
|
|
—
|
|
28,439
|
|
—
|
|
—
|
|
63,524
|
|
Compression
|
|
|
(33,797)
|
|
5,788
|
|
(28,009)
|
|
51,905
|
|
70,500
|
|
639
|
|
—
|
|
95,035
|
|
Eliminations and
other
|
|
|
11
|
|
—
|
|
11
|
|
—
|
|
(17)
|
|
—
|
|
—
|
|
(6)
|
|
Subtotal
|
|
|
25,549
|
|
12,231
|
|
37,780
|
|
51,306
|
|
114,267
|
|
639
|
|
—
|
|
203,992
|
|
Corporate and
other
|
|
|
(61,975)
|
|
(8,137)
|
|
(70,112)
|
|
19,640
|
|
658
|
|
6,740
|
|
—
|
|
(43,074)
|
|
TETRA excluding
Discontinued Operations
|
$
|
(42,725)
|
|
$
|
6,299
|
|
$
|
(36,426)
|
|
$
|
4,094
|
|
$
|
(32,332)
|
|
$
|
70,946
|
|
$
|
114,925
|
|
$
|
7,379
|
|
$
|
—
|
|
$
|
160,918
|
|
|
|
|
Twelve Months
Ended
|
|
December 31,
2017
|
|
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
|
Adjusted Equity Comp.
Expense
|
Omnibus
Equity
|
Adjusted
EBITDA
|
|
(In
Thousands)
|
Completion Fluids &
Products
|
|
|
$
|
63,891
|
|
$
|
(12,657)
|
|
$
|
51,234
|
|
$
|
(53)
|
|
$
|
16,298
|
|
$
|
—
|
|
$
|
—
|
|
$
|
67,479
|
|
Water & Flowback
Services
|
|
|
(12,816)
|
|
15,482
|
|
2,666
|
|
(296)
|
|
18,092
|
|
—
|
|
—
|
|
20,462
|
|
Compression
|
|
|
(37,246)
|
|
(1,937)
|
|
(39,183)
|
|
42,082
|
|
69,142
|
|
1,255
|
|
1,745
|
|
75,041
|
|
Eliminations and
other
|
|
|
(151)
|
|
—
|
|
(151)
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(151)
|
|
Subtotal
|
|
|
13,678
|
|
888
|
|
14,566
|
|
41,733
|
|
103,532
|
|
1,255
|
|
1,745
|
|
162,831
|
|
Corporate and
other
|
|
|
(57,721)
|
|
(3,841)
|
|
(61,562)
|
|
15,513
|
|
521
|
|
6,508
|
|
(1,745)
|
|
(40,765)
|
|
TETRA excluding
Discontinued Operations
|
$
|
(44,794)
|
|
$
|
751
|
|
$
|
(44,043)
|
|
$
|
(2,953)
|
|
$
|
(46,996)
|
|
$
|
57,246
|
|
$
|
104,053
|
|
$
|
7,763
|
|
$
|
—
|
|
$
|
122,066
|
|
Schedule H:
Non-GAAP Reconciliation of TETRA Net Debt
(Unaudited)
|
|
|
The cash and debt
positions of TETRA and CSI Compressco LP as of December 31, 2018,
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.
|
|
|
|
December 31,
2018
|
|
TETRA
|
|
CCLP
|
|
Consolidated
|
|
(In
Millions)
|
Non-restricted
cash
|
$
|
24.2
|
|
|
$
|
15.9
|
|
|
$
|
40.0
|
|
|
|
|
|
|
|
Carrying value of
long-term debt:
|
|
|
|
|
|
Term Credit
Agreement
|
182.5
|
|
|
—
|
|
|
182.5
|
|
Senior Notes
outstanding
|
—
|
|
|
633.0
|
|
|
633.0
|
|
Net debt
|
$
|
158.3
|
|
|
$
|
617.1
|
|
|
$
|
775.5
|
|
Schedule I:
Non-GAAP Reconciliation to TETRA Only Adjusted Free Cash Flow
(Unaudited)
|
|
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
December 31,
2018
|
|
December 31,
2017
|
|
December 31,
2018
|
|
December 31,
2017
|
|
(In
Thousands)
|
Consolidated
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
$
|
44,953
|
|
|
$
|
27,761
|
|
|
$
|
46,586
|
|
|
$
|
64,595
|
|
ARO
settlements
|
35
|
|
|
15
|
|
|
35
|
|
|
565
|
|
Capital expenditures,
net of sales proceeds
|
(34,487)
|
|
|
(23,260)
|
|
|
(140,793)
|
|
|
(51,061)
|
|
Consolidated adjusted
free cash flow
|
10,501
|
|
|
4,516
|
|
|
(94,172)
|
|
|
14,099
|
|
|
|
|
|
|
|
|
|
CSI Compressco
LP
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
23,605
|
|
|
14,496
|
|
|
30,121
|
|
|
39,068
|
|
Capital expenditures,
net of sales proceeds
|
(25,325)
|
|
|
(11,413)
|
|
|
(103,489)
|
|
|
(25,126)
|
|
CSI Compressco free
cash flow
|
(1,720)
|
|
|
3,083
|
|
|
(73,368)
|
|
|
13,942
|
|
|
|
|
|
|
|
|
|
TETRA
Only
|
|
|
|
|
|
|
|
Cash from operating
activities
|
21,348
|
|
|
13,265
|
|
|
16,465
|
|
|
27,559
|
|
ARO
settlements
|
35
|
|
|
15
|
|
|
35
|
|
|
565
|
|
Capital expenditures,
net of sales proceeds
|
(9,162)
|
|
|
(11,847)
|
|
|
(37,304)
|
|
|
(27,967)
|
|
Free cash flow before
ARO settlements
|
12,221
|
|
|
1,433
|
|
|
(20,804)
|
|
|
157
|
|
Distributions from CSI
Compressco LP
|
3,087
|
|
|
2,905
|
|
|
12,070
|
|
|
14,242
|
|
Adjusted free cash
flow
|
15,308
|
|
|
4,338
|
|
|
(8,734)
|
|
|
14,399
|
|
|
|
*
|
Includes the impact
from discontinued operations. See schedule J to exclude the
impact from discontinued operations.
|
Schedule J:
Non-GAAP Reconciliation to TETRA Only Adjusted Cash Flow From
Continuing Operations (Unaudited)
|
|
|
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
|
Dec 31,
2018
|
|
Sep 30,
2018
|
|
Dec 31,
2017
|
|
Dec 31,
2018
|
|
Dec 31,
2017
|
|
|
|
|
|
|
|
|
|
|
(In
Thousands)
|
|
TETRA
Only
|
|
|
|
|
|
|
|
|
|
|
Cash from operating
activities
|
$
21,348
|
|
$
2,971
|
|
$
13,265
|
|
$
16,465
|
|
$
27,559
|
|
Less: Discontinued
operations operating activities (adjusted
EBITDA)(1)
|
(325)
|
|
(1,704)
|
|
146
|
|
(10,184)
|
|
(4,835)
|
|
Cash from continued
operating activities
|
21,673
|
|
4,675
|
|
13,119
|
|
26,649
|
|
32,394
|
|
Less: Continuing
operations capital expenditures(2)
|
(9,162)
|
|
(8,270)
|
|
(11,663)
|
|
(35,618)
|
|
(22,181)
|
|
Plus: Distributions
from CSI Compressco LP
|
3,087
|
|
3,037
|
|
2,905
|
|
12,070
|
|
14,242
|
|
TETRA only adjusted
free cash flow from continuing operations
|
$
15,598
|
|
$
(558)
|
|
$
4,361
|
|
$
3,101
|
|
$
24,455
|
|
|
|
|
|
|
|
|
|
|
|
(1) Reconciled to loss from
discontinued operations as follows:
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
|
Dec 31,
2018
|
|
Sep 30,
2018
|
|
Dec 31,
2017
|
|
Dec 31,
2018
|
|
Dec 31,
2017
|
|
(In
Thousands)
|
|
Loss from
discontinued operations
|
(325)
|
|
796
|
|
(3,248)
|
|
(7,443)
|
|
(17,389)
|
Plus:
Income tax provision (benefit)
|
-
|
|
-
|
|
335
|
|
(2,326)
|
|
448
|
Plus:
Depreciation & amortization
|
-
|
|
-
|
|
3,059
|
|
2,085
|
|
12,106
|
Less: non-recurring
legal settlement payment
|
-
|
|
2,500
|
|
-
|
|
2,500
|
|
-
|
Less: Discontinued
operations adjusted EBITDA
|
(325)
|
|
(1,704)
|
|
146
|
|
(10,184)
|
|
(4,835)
|
|
|
|
|
|
|
|
|
|
|
|
(2) Reconciled to TETRA only capital
expenditures as follows:
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
|
Dec 31,
2018
|
|
Sep 30,
2018
|
|
Dec 31,
2017
|
|
Dec 31,
2018
|
|
Dec 31,
2017
|
|
(In
Thousands)
|
|
TETRA
only capital expenditures
|
(9,162)
|
|
(8,270)
|
|
(11,847)
|
|
(37,304)
|
|
(27,967)
|
Less: Discontinued
operations capital expenditures
|
-
|
|
-
|
|
(184)
|
|
(1,686)
|
|
(5,786)
|
Plus: Continuing
operations capital expenditures
|
(9,162)
|
|
(8,270)
|
|
(11,663)
|
|
(35,618)
|
|
(22,181)
|
Schedule K –
Non-GAAP Reconciliation to Compression and Related Services Gross
Profit and Gross Margin Excluding the Impact of Tax Contingency
(Unaudited)
|
|
|
|
Three Months
Ended
|
|
Dec 31,
2018
|
|
Sep 30,
2018
|
|
|
|
|
Revenue of
Compression and related services
|
$
60,582
|
|
$
58,869
|
|
|
|
|
Cost of Compression
and related services, excluding depreciation
|
34,165
|
|
31,074
|
|
|
|
|
Gross Profit of
Compression and related services
|
26,417
|
|
27,795
|
|
|
|
|
Gross
Margin
|
43.6%
|
|
47.2%
|
|
|
|
|
Non-income tax
contingency
|
2,110
|
|
-
|
|
|
|
|
Gross Profit
excluding the impact of tax contingency
|
28,527
|
|
27,795
|
|
|
|
|
Gross Margin
excluding the impact of tax contingency
|
47.1%
|
|
47.2%
|
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SOURCE TETRA Technologies, Inc.