THE WOODLANDS, Texas,
Nov. 1, 2021 /PRNewswire/
-- TETRA Technologies, Inc. ("TETRA" or the "Company")
(NYSE:TTI) today announced third quarter 2021 results.
Third quarter 2021 revenue increased 30% from the same quarter a
year ago, to $95 million.
Compared to the second quarter of 2021, revenue declined 7% as the
second quarter reflects the seasonal peak in our Europe industrial calcium chloride business.
Excluding the $14 million of
incremental revenue from this seasonal peak, revenue increased
sequentially by 8% on stronger Water & Flowback Services
activity. The Company estimates that third quarter revenue
was negatively impacted by approximately $11
million due to Hurricane Ida in the Gulf of Mexico and delayed international
completion fluids deliveries due to global logistics and shipping
challenges.
Net income before discontinued operations was $2.5 million, including the benefit of
$6.2 million of mark-to-market gains
from TETRA's equity ownership in Standard Lithium Ltd. and CSI
Compressco LP and including $1.3 million of non-recurring credits, net
of charges. This compares to a net loss before discontinued
operations of $6.7 million in
the second quarter, including $4.7 million of non-recurring charges and
expenses. Net income per share from continuing operations in
the third quarter was $0.02.
Excluding the non-recurring credits, net income per share
from continuing operations was $0.01
in the third quarter.
Adjusted EBITDA was $15.0 million,
inclusive of the mark-to-market gains of $6.2 million and excluding non-recurring credits,
net of charges of $1.3 million.
The mark-to-market gains were largely offset by lower earnings
resulting from delays on completion fluid projects in the
Gulf of Mexico due to Hurricane
Ida, delays on international deliveries due to global shipping
issues, and inflationary costs on our chemicals production which
are expected to continue at least into the fourth quarter.
Third quarter adjusted EBITDA increased $2.1 million, or 16%, over the second quarter of
2021 reflecting higher mark-to-market gains and stronger
operational performance from Water & Flowback
Services.
Cash flow from operating activities was $2.8 million in the third quarter of 2021,
compared to $1.8 million in the
second quarter of 2021. Adjusted free cash flow from
continuing operations was $1.0 million. This compares to a use
of cash of $4.5 million of
adjusted free cash flow from continuing operations in the second
quarter of 2021.
Brady Murphy, TETRA's Chief
Executive Officer, stated, "Our third quarter results reflect
continued success in executing our strategies in an improving oil
and gas market and the rapidly evolving low carbon energy
markets. Our 30% year-on-year revenue growth would have been
even higher without the impact of Hurricane Ida and the well-known
global logistics challenges that delayed multiple completion fluid
deliveries to international customers. With the third quarter
product deliveries delayed into the fourth quarter, in addition to
the return of Gulf of Mexico
activity plus the recent Brazil
offshore awards, we expect materially higher fourth quarter
revenues for Completion Fluids & Products. Despite the
challenges presented by Hurricane Ida and the global logistics
issues, we were able to generate $15
million of adjusted EBITDA – the highest since the start of
the global pandemic in the first quarter of 2020, and $1.0 million of positive adjusted free cash
flow. Adjusted free cash flow improved sequentially by
$5.5 million reflecting aggressive
working capital management and the stronger earnings from Water
& Flowback Services. We again reduced long term debt, by
$8 million in the third
quarter. We do not have any amounts drawn on our asset-based
loan (ABL) facility. Furthermore, we amended our ABL to
increase availability by more than $10
million and extended the maturity to 2025, both to create
financial flexibility to capitalize on a recovering oil and gas
market and our low carbon initiatives.
"As anticipated, Water & Flowback Services adjusted EBITDA
margins improved sequentially from 5.3% in the second quarter to
10.9% in the third quarter - an improvement of 560 basis points on
a sequential revenue increase of 24%. Multiple factors
contributed to this improvement, including fully mobilized and
operational TETRA SandStormTM projects in Argentina, pricing improvements from many of
our U.S. operations and customers, and profitable market
penetration through our integrated water management projects –
which reached a record high in the third quarter of 55 projects for
27 different customers. This reflects the continued
acceptance of this highly efficient and differentiated offering.
During the third quarter we were awarded additional work in
Argentina with an early production
facility and additional TETRA SandStormTM units, which
we will build and operate on a multi-year contract starting in
early 2022.
"Completion Fluids & Products adjusted EBITDA margins were
35.1% in the third quarter including the benefit of mark-to-market
gains from our equity holdings in Standard Lithium. Excluding
the mark-to-market gains, adjusted EBITDA margins were 21.9%
reflecting the impact of Hurricane Ida during the quarter and
inflationary pressures in certain raw materials and logistics
costs. We were awarded another deepwater completion
fluids project in Brazil with a
major integrated service company, which is in addition to the
project we previously mentioned in our last earnings press release.
Despite a pause in Gulf of
Mexico activity from Hurricane Ida, we continue to benefit
from the recently announced three-year completion fluids and
services contract for a super major oil and gas operator.
These market share gains reflect our consistently strong services
levels across the globe, differentiated offerings for high value
complex wells and competitive advantages from our vertically
integrated business model which is especially important in today's
challenging supply chain environment.
"We continue to make good progress with our low carbon energy
initiatives. In the third quarter we received and shipped our
second TETRA PureFlowTM high purity zinc bromide order
to a publicly traded energy storage technology company. We
anticipate having a long-term strategic supplier agreement in place
with this customer before year-end, which is expected to include
material orders for 2022 and collaborative planning for longer term
product supply and demand based on the significant compound annual
growth rate (CAGR) anticipated for energy storage. Standard Lithium
completed the preliminary engineering assessment (PEA) study to
extract lithium from brine from our acreage in the Smackover
Formation in Arkansas. As a reminder TETRA maintains a
royalty stream from the commercial production of lithium by
Standard Lithium after they exercise the option and all the mineral
rights to the bromine on this acreage, which we estimate to have
exploration targets of 2.54 million to 8.58 million tons of
bromine. The Standard Lithium PEA indicates very attractive
economics as the acreage has an estimated 1,317,262 tons of Lithium
Carbonate Equivalent at the inferred resource category, which is
49% higher from what was previously estimated. In addition to
the Standard Lithium option agreement, TETRA has previously
communicated that we estimate an exploration target between 85,000
and 286,000 tons of lithium on acreage not included in the Standard
Lithium agreement, where TETRA holds 100% of the lithium rights not
subject to any option. We intend to drill a well in the
fourth quarter on our dedicated acreage to obtain lithium and
bromines samples, allowing us to move from an exploration target to
an inferred resources target phase. We then intend to move
towards a PEA study in early 2022 and believe there is significant
value in our mineral rights in the Smackover Formation in
Arkansas from a combination of our
option agreement with Standard Lithium, our bromine assets to meet
the growing demands for completion fluids and energy storage, and
our 100% TETRA lithium assets that are not subject to any
option. We will continue to evolve these assets to create
shareholder value.
"We have reduced our term loan by over $44 million from $220
million on September 30, 2020
to $176 million as of September 30,
2021. We repaid $8 million in
the third quarter of 2021 and expect to repay at least an
additional $10 million in the fourth
quarter of 2021. During the third quarter of 2021, we
recorded mark-to-market gains of $6.2 million on our equity holdings of CSI
Compressco LP and Standard Lithium. As of September 30, 2021, the market value of these
investments was $22 million, with no
holding restrictions on our ability to monetize these
investments.
This press release includes the following financial measures
that are not presented in accordance with generally accepted
accounting principles in the United
States ("GAAP"): Adjusted earnings per share from continuing
operations, Adjusted EBITDA, and Adjusted EBITDA Margin (Adjusted
EBITDA as a percent of revenue) on consolidated and segment basis,
Adjusted income/(loss) before tax, adjusted free cash flow from
continuing operations, and net debt. Please see Schedules E
through H for reconciliations of these non-GAAP financial measures
to the most directly comparable GAAP measures.
Third Quarter Results and
Highlights
A summary of key financial metrics for the third quarter are as
follows:
Third Quarter
2021 Results
|
|
Three Months
Ended
|
|
September 30,
2021
|
|
June 30,
2021
|
|
September 30,
2020
|
|
(In Thousands, Except
per Share Amounts)
|
Revenue
|
$
|
95,474
|
|
|
$
|
102,326
|
|
|
$
|
73,484
|
|
Income (loss) before
discontinued operations
|
2,495
|
|
|
(6,654)
|
|
|
(9,559)
|
|
Adjusted EBITDA
before discontinued operations
|
15,022
|
|
|
12,967
|
|
|
7,360
|
|
GAAP EPS from
continuing operations
|
0.02
|
|
|
(0.05)
|
|
|
(0.08)
|
|
Adjusted EPS from
continuing operations
|
0.01
|
|
|
(0.02)
|
|
|
(0.06)
|
|
GAAP net cash
provided by operating activities
|
2,817
|
|
|
1,788
|
|
|
4,440
|
|
Adjusted free cash
flow from continuing operations
|
$
|
1,000
|
|
|
$
|
(4,450)
|
|
|
$
|
7,499
|
|
Completion Fluids & Products third quarter 2021 revenue of
$48.7 million declined 25% from the
second quarter of 2021 reflecting the seasonal high from
Europe calcium chloride sales in
the second quarter, in addition to an estimated $11 million negative revenue impact from
Hurricane Ida in the Gulf of
Mexico plus loop currents and international shipping
delays. Completion Fluids & Products income before taxes
was $14.7 million in the third
quarter (30.1% of revenue) compared to $16.4 million (25.4% of revenue) in the
second quarter of 2021. Adjusted EBITDA of $17.1 million decreased $0.8 million sequentially. Third
quarter Adjusted EBITDA includes $6.4
million favorable mark-to-market adjustment from TETRA's
investment in Standard Lithium.
Water & Flowback Services revenue was $46.8 million in the third quarter of 2021,
an increase of 24% from the second quarter of 2021, and loss before
taxes was $1.8 million. Adjusted EBITDA of
$5.1 million (10.9% of revenue)
increased 156% sequentially due to stronger domestic activity and
some pricing improvements helping offset ongoing inflationary
pressures.
Free Cash Flow and Balance Sheet
Cash from operating activities was $2.8 million in the third quarter while
adjusted free cash flow from continuing operations was $1.0 million. Liquidity at the end of
third quarter was $90 million. Liquidity is defined as
unrestricted cash plus availability under the revolving credit
facility. At the end of the third quarter unrestricted cash
was $42 million and availability under our credit facility was
$48 million. Debt was
$164 million after the $8.2
million pay down in July, while net debt was
$122 million.
Non-recurring Charges and Expenses Items
Non-recurring charges and expenses are reflected on Schedule E
and include $3.2 million of
non-cash stock warrant fair value adjustment income, $1.6 million of legal, settlement and other
expenses and $0.2 million of
cumulative adjustments to long-term incentives and appreciation
right expenses.
Conference Call
TETRA will host a conference call to discuss these results
tomorrow, November 2, 2021, at
10:30 a.m. Eastern Time. The phone
number for the call is 1-888-347-5303. The conference call will
also be available by live audio webcast and may be accessed through
the Company's investor relations website at
http://ir.tetratec.com/events-and-webcasts. A replay of the
conference call will be available at 1-877-344-7529 conference
number 10161269, for one week following the conference call and the
archived webcast will be available through the Company's website
for thirty days following the conference call.
Investor Contact
For further information: Elijio
Serrano, CFO, TETRA Technologies, Inc., The Woodlands, Texas, Phone: (281) 367-1983,
www.tetratec.com
Financial Statements, Schedules and Non-GAAP Reconciliation
Schedules (Unaudited)
Schedule A: Consolidated Income Statement
Schedule B: Condensed Consolidated Balance Sheet
Schedule C: Consolidated Statements of Cash Flows
Schedule D: Statement Regarding Use of Non-GAAP Financial
Measures
Schedule E: Non-GAAP Reconciliation of Adjusted Income (Loss) From
Continuing Operations
Schedule F: Non-GAAP Reconciliation of Adjusted EBITDA
Schedule G: Non-GAAP Reconciliation of Net Debt
Schedule H: Non-GAAP Reconciliation to Adjusted Free Cash Flow From
Continuing Operations
Company Overview and Forward-Looking Statements
TETRA Technologies, Inc. is an industrial and oil & gas
products and services company operating on six continents focused
on bromine-based completion fluids, calcium chloride, water
management solutions, frac flowback and production well testing
services. Calcium chloride is used in the oil and gas,
industrial, agricultural, road, food and beverage markets.
TETRA is evolving its business model by expanding into the low
carbon energy markets with its chemistry expertise, key mineral
acreage and global infrastructure. Recently announced
initiatives include commercialization of TETRA
PureFlowTM an ultra-pure zinc bromide for stationary
batteries and energy storage; advancing an innovative carbon
capture utilization and storage technology with CarbonFree to
capture CO2 and mineralize emissions to make commercial,
carbon-negative chemicals; and development of TETRA's lithium and
bromine mineral acreage to meet the growing demand for oil and gas
products and energy storage. Visit the Company's website at
www.tetratec.com.
Cautionary Statement Regarding Forward Looking
Statements
This news release includes certain statements that are deemed to
be forward-looking statements. Generally, the use of words such as
"may," "see," "expectation," "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 economic and operating conditions that are
outside of our control, including statements concerning the
anticipated recovery of the oil and gas industry; the effects of
curtailments in completion fluid projects in the Gulf of Mexico related to Hurricane Ida;
customer delays for international completion fluids related to
global shipping and logistics issues; potential revenue associated
with prospective energy storage projects or our pending carbon
capture partnership; exploration targets of lithium and bromine,
the potential extraction of lithium and bromine from the leased
acreage, the economic viability thereof, and the timing and costs
of such activities; statements regarding debt reduction,
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. The potential quantity and grade of the exploration
targets included in this news release is conceptual in nature,
there has been insufficient exploration to estimate a mineral
resource, and it is uncertain if further exploration will result in
the estimation of a mineral resource. The exploration targets
expressed should not be misrepresented or misconstrued as an
estimate of a mineral resource or mineral reserve. 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
|
|
Nine Months
Ended
|
|
September
30, 2021
|
|
June 30,
2021
|
|
September
30, 2020
|
|
September
30, 2021
|
|
September
30, 2020
|
|
(In Thousands, Except
per Share Amounts)
|
Revenues
|
$
|
95,474
|
|
|
$
|
102,326
|
|
|
$
|
73,484
|
|
|
$
|
275,124
|
|
|
$
|
302,257
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales,
services, and rentals
|
71,419
|
|
|
77,208
|
|
|
53,567
|
|
|
209,241
|
|
|
218,289
|
|
Depreciation,
amortization, and accretion
|
8,308
|
|
|
8,236
|
|
|
9,657
|
|
|
25,495
|
|
|
28,934
|
|
Impairments and other
charges
|
—
|
|
|
449
|
|
|
97
|
|
|
449
|
|
|
97
|
|
Insurance
recoveries
|
—
|
|
|
—
|
|
|
(52)
|
|
|
(110)
|
|
|
(126)
|
|
Total cost of
revenues
|
79,727
|
|
|
85,893
|
|
|
63,269
|
|
|
235,075
|
|
|
247,194
|
|
Gross profit
|
15,747
|
|
|
16,433
|
|
|
10,215
|
|
|
40,049
|
|
|
55,063
|
|
|
|
|
|
|
|
|
|
|
|
General and
administrative expense
|
18,714
|
|
|
17,351
|
|
|
16,123
|
|
|
56,077
|
|
|
60,333
|
|
Interest expense,
net
|
4,083
|
|
|
3,886
|
|
|
4,338
|
|
|
12,373
|
|
|
14,234
|
|
Warrants fair value
adjustment expense (income)
|
(3,164)
|
|
|
2,698
|
|
|
—
|
|
|
(143)
|
|
|
(327)
|
|
Other income,
net
|
(6,968)
|
|
|
(2,232)
|
|
|
(788)
|
|
|
(14,295)
|
|
|
(1,308)
|
|
Income (loss) before
taxes and discontinued operations
|
3,082
|
|
|
(5,270)
|
|
|
(9,458)
|
|
|
(13,963)
|
|
|
(17,869)
|
|
Provision for income
taxes
|
587
|
|
|
1,384
|
|
|
101
|
|
|
2,139
|
|
|
1,877
|
|
Income (loss) before
discontinued operations
|
2,495
|
|
|
(6,654)
|
|
|
(9,559)
|
|
|
(16,102)
|
|
|
(19,746)
|
|
Discontinued
operations:
|
|
|
|
|
|
|
|
|
|
Income (loss) from
discontinued operations, net of taxes
|
18
|
|
|
(126)
|
|
|
(12,039)
|
|
|
120,882
|
|
|
(49,195)
|
|
Net income
(loss)
|
2,513
|
|
|
(6,780)
|
|
|
(21,598)
|
|
|
104,780
|
|
|
(68,941)
|
|
Less: (income) loss
attributable to noncontrolling interest(1)
|
—
|
|
|
27
|
|
|
8,296
|
|
|
(306)
|
|
|
32,833
|
|
Net income (loss)
attributable to TETRA stockholders
|
$
|
2,513
|
|
|
$
|
(6,753)
|
|
|
$
|
(13,302)
|
|
|
$
|
104,474
|
|
|
$
|
(36,108)
|
|
|
|
|
|
|
|
|
|
|
|
Basic per share
information:
|
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations
|
$
|
0.02
|
|
|
$
|
(0.05)
|
|
|
$
|
(0.08)
|
|
|
$
|
(0.13)
|
|
|
$
|
(0.16)
|
|
Income (loss) from
discontinued operations
|
$
|
0.00
|
|
|
$
|
0.00
|
|
|
$
|
(0.02)
|
|
|
$
|
0.96
|
|
|
$
|
(0.13)
|
|
Net income (loss)
attributable to TETRA stockholders
|
$
|
0.02
|
|
|
$
|
(0.05)
|
|
|
$
|
(0.10)
|
|
|
$
|
0.83
|
|
|
$
|
(0.29)
|
|
Weighted average shares
outstanding
|
126,733
|
|
126,583
|
|
|
125,893
|
|
126,489
|
|
|
125,789
|
|
|
|
|
|
|
|
|
|
|
Diluted per share
information:
|
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations
|
$
|
0.02
|
|
|
$
|
(0.05)
|
|
|
$
|
(0.08)
|
|
|
$
|
(0.13)
|
|
|
$
|
(0.16)
|
|
Income (loss) from
discontinued operations
|
$
|
0.00
|
|
|
$
|
0.00
|
|
|
$
|
(0.02)
|
|
|
$
|
0.96
|
|
|
$
|
(0.13)
|
|
Net income (loss)
attributable to TETRA stockholders
|
$
|
0.02
|
|
|
$
|
(0.05)
|
|
|
$
|
(0.10)
|
|
|
$
|
0.83
|
|
|
$
|
(0.29)
|
|
Weighted average shares
outstanding
|
128,694
|
|
|
126,583
|
|
|
125,893
|
|
126,489
|
|
|
125,789
|
|
|
|
(1)
|
(Income)/loss
attributable to noncontrolling interest includes zero income for
both the three-month periods ended September 30, 2021 and June
30, 2021, and $8,342 loss for the three-month period ended
September 30, 2020, and $333 income and $32,957 loss for the
nine-month periods ended September 30, 2021 and 2020, respectively,
related to discontinued operations.
|
Schedule B:
Condensed Consolidated Balance Sheet (Unaudited)
|
|
|
September
30,
2021
|
|
December
31,
2020
|
|
(In
Thousands)
|
|
(Unaudited)
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
41,863
|
|
$
|
67,252
|
Restricted
cash
|
—
|
|
65
|
Trade accounts
receivable
|
79,118
|
|
64,078
|
Inventories
|
72,286
|
|
76,658
|
Assets of discontinued
operations
|
—
|
|
710,006
|
Prepaid expenses and
other current assets
|
16,121
|
|
13,487
|
Total current
assets
|
209,388
|
|
931,546
|
Property, plant, and
equipment, net
|
87,348
|
|
96,856
|
Patents, trademarks
and other intangible assets, net
|
38,071
|
|
41,487
|
Deferred tax assets,
net
|
44
|
|
52
|
Operating lease
right-of-use assets
|
38,795
|
|
43,448
|
Investments
|
22,412
|
|
2,675
|
Other
assets
|
15,178
|
|
16,775
|
Total long-term
assets
|
201,848
|
|
201,293
|
Total
assets
|
$
|
411,236
|
|
$
|
1,132,839
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Trade accounts
payable
|
$
|
41,268
|
|
$
|
22,573
|
Unearned
income
|
1,432
|
|
2,675
|
Accrued liabilities
and other
|
48,552
|
|
38,791
|
Liabilities of
discontinued operations
|
1,327
|
|
734,039
|
Total current
liabilities
|
92,579
|
|
798,078
|
Long-term debt,
net
|
164,228
|
|
199,894
|
Deferred income
taxes
|
1,817
|
|
1,942
|
Asset retirement
obligations
|
12,840
|
|
12,484
|
Warrants
liability
|
56
|
|
198
|
Operating lease
liabilities
|
33,145
|
|
37,569
|
Other
liabilities
|
6,493
|
|
11,612
|
Total long-term
liabilities
|
218,579
|
|
263,699
|
Commitments and
contingencies
|
|
|
|
TETRA stockholders'
equity
|
101,191
|
|
(9,640)
|
Noncontrolling
interests
|
(1,113)
|
|
80,702
|
Total
equity
|
100,078
|
|
71,062
|
Total liabilities and
equity
|
$
|
411,236
|
|
$
|
1,132,839
|
Schedule C:
Consolidated Statements of Cash Flows (Unaudited)
|
|
|
Nine Months
Ended
September
30,
|
|
2021
|
|
2020
|
|
(In
Thousands)
|
Operating
activities:
|
|
|
|
Net income
(loss)
|
$
|
104,780
|
|
|
$
|
(68,941)
|
|
Reconciliation of net
income (loss) to net cash provided by operating
activities:
|
|
|
|
Depreciation,
amortization, and accretion
|
25,524
|
|
|
88,906
|
|
Gain on GP
Sale
|
(120,574)
|
|
|
—
|
|
Impairment and other
charges
|
449
|
|
|
14,445
|
|
Gain on retained CSI
Compressco units and Standard Lithium shares
|
(11,803)
|
|
|
—
|
|
Equity-based
compensation expense
|
3,611
|
|
|
4,847
|
|
Amortization and
expense of financing costs and deferred financing gains
|
2,320
|
|
|
3,698
|
|
Debt-related
expenses
|
—
|
|
|
4,777
|
|
Warrants fair value
adjustment
|
(143)
|
|
|
(326)
|
|
Gain on sale of
assets
|
(479)
|
|
|
(4,340)
|
|
Other non-cash
charges
|
(340)
|
|
|
5,814
|
|
Changes in operating
assets and liabilities:
|
|
|
|
Accounts
receivable
|
(15,246)
|
|
|
62,039
|
|
Inventories
|
2,449
|
|
|
11,780
|
|
Prepaid expenses and
other current assets
|
(2,927)
|
|
|
(916)
|
|
Trade accounts payable
and accrued expenses
|
25,231
|
|
|
(57,844)
|
|
Other
|
(2,428)
|
|
|
888
|
|
Net cash provided by
operating activities
|
10,424
|
|
|
64,827
|
|
Investing
activities:
|
|
|
|
Purchases of property,
plant, and equipment, net
|
(14,620)
|
|
|
(22,011)
|
|
Proceeds from sale of
CCLP, net of cash divested
|
566
|
|
|
—
|
|
Proceeds on sale of
property, plant, and equipment
|
1,016
|
|
|
24,704
|
|
Insurance recoveries
associated with damaged equipment
|
110
|
|
|
643
|
|
Other investing
activities
|
764
|
|
|
(576)
|
|
Net cash (used in)
provided by investing activities
|
(12,164)
|
|
|
2,760
|
|
Financing
activities:
|
|
|
|
Proceeds from
long-term debt
|
—
|
|
|
404,060
|
|
Principal payments on
long-term debt
|
(37,477)
|
|
|
(408,666)
|
|
CSI Compressco
distributions
|
—
|
|
|
(932)
|
|
Tax remittances on
equity based compensation
|
—
|
|
|
(341)
|
|
Dividend payments
attributable to noncontrolling interest
|
(99)
|
|
|
—
|
|
Debt issuance costs
and other financing activities
|
(1,080)
|
|
|
(3,897)
|
|
Net cash used in
financing activities
|
(38,656)
|
|
|
(9,776)
|
|
Effect of exchange
rate changes on cash
|
(1,635)
|
|
|
(355)
|
|
(Decrease) increase
in cash and cash equivalents
|
(42,031)
|
|
|
57,456
|
|
Cash and cash
equivalents and restricted cash at beginning of period
|
83,894
|
|
|
17,768
|
|
Cash and cash
equivalents at beginning of period associated with discontinued
operations
|
16,577
|
|
|
2,370
|
|
Cash and cash
equivalents and restricted cash at beginning of period associated
with
continuing operations
|
67,317
|
|
|
15,398
|
|
Cash and cash
equivalents and restricted cash at end of period
|
41,863
|
|
|
75,224
|
|
Cash and cash
equivalents at end of period associated with discontinued
operations
|
—
|
|
|
6,757
|
|
Cash and cash
equivalents and restricted cash at end of period associated with
continuing
operations
|
$
|
41,863
|
|
|
$
|
68,467
|
|
Schedule D: Statement Regarding Use of Non-GAAP
Financial Measures
In addition to financial results determined in accordance with
U.S. GAAP, this press release may include the following non-GAAP
financial measures for the Company: net debt; adjusted consolidated
and segment income (loss) before taxes, special charges and
discontinued operations; adjusted diluted earnings (loss) per share
from continuing operations; consolidated and segment adjusted
EBITDA; adjusted free cash flow and free cash flow from continuing
operations; and segment adjusted EBITDA as a percent of revenue
("Adjusted EBITDA margin"). The following schedules provide
reconciliations of these non-GAAP financial measures to their most
directly comparable U.S. GAAP measures. The non-GAAP financial
measures should be considered in addition to, not as a substitute
for, financial measures prepared in accordance with U.S. 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) from continuing operations is defined as
the Company's income (loss) before noncontrolling interests and
discontinued operations, excluding certain special or other charges
(or credits), and including noncontrolling interest attributable to
continued operations. Adjusted income (loss) from continuing
operations 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 from continuing
operations is defined as the Company's diluted earnings (loss) per
share excluding certain special or other charges (or credits),
discontinued operations and noncontrolling interest attributable to
discontinued operations. 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 certain non-cash charges,
non-recurring adjustments and discontinued operations. Adjusted
EBITDA (and Adjusted EBITDA margin) 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.
Adjusted free cash flow from continuing operations is defined as
cash from operations less discontinued operations EBITDA and
discontinued operations capital expenditures, less capital
expenditures net of sales proceeds and cost of equipment sold and
including cash distributions to TETRA from CSI Compressco LP and
cash from other investments. 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.
Adjusted free cash flow from continuing operations do not
necessarily imply residual cash flow available for discretionary
expenditures, as they exclude cash requirements for debt service or
other non-discretionary expenditures that are not deducted.
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 balance sheet. Management views
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.
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 balance sheet.
Management views 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:
Non-GAAP Reconciliation of Adjusted Income (Loss) From Continuing
Operations (Unaudited)
|
|
|
Three Months
Ended
|
|
September 30,
2021
|
|
June 30,
2021
|
|
September 30,
2020
|
|
(In Thousands, Except
per Share Amounts)
|
|
|
|
|
|
|
Income (loss)
before taxes and discontinued operations
|
$
|
3,082
|
|
|
$
|
(5,270)
|
|
|
$
|
(9,458)
|
|
Provision for income
taxes
|
(587)
|
|
|
(1,384)
|
|
|
(101)
|
|
Noncontrolling
interest attributed to continuing operations
|
—
|
|
|
27
|
|
|
46
|
|
Income (loss) from
continuing operations
|
2,495
|
|
|
(6,627)
|
|
|
(9,513)
|
|
Adjustment to
long-term incentives
|
656
|
|
|
627
|
|
|
—
|
|
Transaction and other
expenses
|
1,350
|
|
|
(345)
|
|
|
124
|
|
Former CEO stock
appreciation right expense
|
(466)
|
|
|
714
|
|
|
—
|
|
Restructuring
charges
|
295
|
|
|
1,033
|
|
|
665
|
|
Stock warrant fair
value adjustment
|
(3,164)
|
|
|
2,698
|
|
|
—
|
|
Severance
expenses
|
—
|
|
|
—
|
|
|
1,260
|
|
Adjusted income
(loss) from continuing operations
|
$
|
1,166
|
|
|
$
|
(1,900)
|
|
|
$
|
(7,464)
|
|
|
|
|
|
|
|
Diluted per share
information
|
|
|
|
|
|
Income (loss) from
continuing operations
|
$
|
0.02
|
|
|
$
|
(0.05)
|
|
|
$
|
(0.08)
|
|
Adjusted income (loss)
from continuing operations
|
$
|
0.01
|
|
|
$
|
(0.02)
|
|
|
$
|
(0.06)
|
|
Diluted weighted
average shares outstanding
|
128,694
|
|
|
126,583
|
|
|
125,893
|
|
Schedule F:
Non-GAAP Reconciliation of Adjusted EBITDA
(Unaudited)
|
|
|
Three Months Ended
September 30, 2021
|
|
Completion
Fluids &
Products
|
|
Water &
Flowback
Services
|
|
Corporate
SG&A
|
|
Other and
Eliminations
|
|
Total
|
|
(In Thousands, Except
Percents)
|
Revenues
|
$
|
48,691
|
|
|
$
|
46,783
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
95,474
|
|
Net income (loss)
before taxes and
discontinued
operations
|
14,675
|
|
|
(1,807)
|
|
|
(8,408)
|
|
|
(1,378)
|
|
|
3,082
|
|
Adjustment to
long-term incentives
|
—
|
|
|
—
|
|
|
656
|
|
|
—
|
|
|
656
|
|
Transaction and other
expenses
|
630
|
|
|
693
|
|
|
27
|
|
|
—
|
|
|
1,350
|
|
Former CEO stock
appreciation right expense
|
—
|
|
|
—
|
|
|
(466)
|
|
|
—
|
|
|
(466)
|
|
Restructuring
expenses
|
254
|
|
|
41
|
|
|
—
|
|
|
—
|
|
|
295
|
|
Stock warrant fair
value adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,164)
|
|
|
(3,164)
|
|
Adjusted income
(loss) before taxes and
discontinued operations
|
$
|
15,559
|
|
|
$
|
(1,073)
|
|
|
$
|
(8,191)
|
|
|
$
|
(4,542)
|
|
|
$
|
1,753
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted interest
(income) expense, net
|
(165)
|
|
|
2
|
|
|
—
|
|
|
4,246
|
|
|
4,083
|
|
Adjusted depreciation
and amortization
|
1,712
|
|
|
6,192
|
|
|
—
|
|
|
225
|
|
|
8,129
|
|
Equity compensation
expense
|
—
|
|
|
—
|
|
|
1,057
|
|
|
—
|
|
|
1,057
|
|
Adjusted
EBITDA
|
$
|
17,106
|
|
|
$
|
5,121
|
|
|
$
|
(7,134)
|
|
|
$
|
(71)
|
|
|
$
|
15,022
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA as a
% of revenue
|
35.1
|
%
|
|
10.9
|
%
|
|
|
|
|
|
15.7
|
%
|
|
Three Months Ended
June 30, 2021
|
|
Completion
Fluids &
Products
|
|
Water &
Flowback
Services
|
|
Corporate
SG&A
|
|
Other and
Eliminations
|
|
Total
|
|
(In Thousands, Except
Percents)
|
Revenues
|
$
|
64,607
|
|
|
$
|
37,719
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
102,326
|
|
Net income (loss)
before taxes and
discontinued
operations
|
16,427
|
|
|
(4,978)
|
|
|
(9,543)
|
|
|
(7,176)
|
|
|
(5,270)
|
|
Adjustment to
long-term incentives
|
—
|
|
|
—
|
|
|
627
|
|
|
—
|
|
|
627
|
|
Transaction and other
expenses
|
(391)
|
|
|
145
|
|
|
(99)
|
|
|
—
|
|
|
(345)
|
|
Former CEO stock
appreciation right expense
|
—
|
|
|
—
|
|
|
714
|
|
|
—
|
|
|
714
|
|
Restructuring
expenses
|
291
|
|
|
742
|
|
|
—
|
|
|
—
|
|
|
1,033
|
|
Stock warrant fair
value adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
2,698
|
|
|
2,698
|
|
Adjusted income
(loss) before taxes and
discontinued operations
|
$
|
16,327
|
|
|
$
|
(4,091)
|
|
|
$
|
(8,301)
|
|
|
$
|
(4,478)
|
|
|
$
|
(543)
|
|
Adjusted interest
(income) expense, net
|
(162)
|
|
|
3
|
|
|
—
|
|
|
4,044
|
|
|
3,885
|
|
Adjusted depreciation
and amortization
|
1,701
|
|
|
6,087
|
|
|
—
|
|
|
245
|
|
|
8,033
|
|
Equity compensation
expense
|
—
|
|
|
—
|
|
|
1,592
|
|
|
—
|
|
|
1,592
|
|
Adjusted
EBITDA
|
$
|
17,866
|
|
|
$
|
1,999
|
|
|
$
|
(6,709)
|
|
|
$
|
(189)
|
|
|
$
|
12,967
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA as a
% of revenue
|
27.7
|
%
|
|
5.3
|
%
|
|
|
|
|
|
12.7
|
%
|
|
Three Months Ended
September 30, 2020
|
|
Completion
Fluids &
Products
|
|
Water &
Flowback
Services
|
|
Corporate
SG&A
|
|
Other and
Eliminations
|
|
Total
|
|
(In Thousands, Except
Percents)
|
Revenues
|
$
|
51,950
|
|
|
$
|
21,534
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
73,484
|
|
Net income (loss)
before taxes and
discontinued
operations
|
11,756
|
|
|
(7,746)
|
|
|
(8,958)
|
|
|
(4,510)
|
|
|
(9,458)
|
|
Severance
|
177
|
|
|
150
|
|
|
933
|
|
|
—
|
|
|
1,260
|
|
Transaction and other
expenses
|
—
|
|
|
124
|
|
|
—
|
|
|
—
|
|
|
124
|
|
Restructuring and
severance expenses
|
665
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
665
|
|
Impairments and other
charges
|
(113)
|
|
|
—
|
|
|
97
|
|
|
—
|
|
|
(16)
|
|
Adjusted income
(loss) before taxes and
discontinued operations
|
12,485
|
|
|
(7,472)
|
|
—
|
|
(7,928)
|
|
|
(4,510)
|
|
|
(7,425)
|
|
Adjusted interest
(income) expense, net
|
(291)
|
|
|
(77)
|
|
|
—
|
|
|
4,706
|
|
|
4,338
|
|
Adjusted depreciation
and amortization
|
1,710
|
|
|
7,584
|
|
|
—
|
|
|
170
|
|
|
9,464
|
|
Equity compensation
expense
|
—
|
|
|
—
|
|
|
983
|
|
|
—
|
|
|
983
|
|
Adjusted
EBITDA
|
$
|
13,904
|
|
|
$
|
35
|
|
|
$
|
(6,945)
|
|
|
$
|
366
|
|
|
$
|
7,360
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA as a
% of revenue
|
26.8
|
%
|
|
0.2
|
%
|
|
|
|
|
|
10.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Schedule G:
Non-GAAP Reconciliation of Net Debt (Unaudited)
|
|
The following
reconciliation of net debt is presented as a supplement to
financial results prepared in accordance with GAAP.
|
|
|
September
30,
2021
|
|
December
31,
2020
|
|
(In
Thousands)
|
Non-restricted
cash
|
$
|
41,863
|
|
|
$
|
67,252
|
|
|
|
|
|
Asset-Based Credit
Agreement
|
—
|
|
|
—
|
|
Term Credit
Agreement
|
$
|
164,228
|
|
|
$
|
199,894
|
|
Net debt
|
$
|
122,365
|
|
|
$
|
132,642
|
|
Schedule H: Non-GAAP Reconciliation
to Adjusted Free Cash Flow From Continuing Operations
(Unaudited)
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30, 2021
|
|
June 30,
2021
|
|
September
30, 2020
|
|
September
30, 2021
|
|
September
30, 2020
|
|
(In
Thousands)
|
Cash from operating
activities
|
$
|
2,817
|
|
|
$
|
1,788
|
|
|
$
|
4,440
|
|
|
$
|
10,424
|
|
|
$
|
64,827
|
|
Discontinued operations
operating
activities (adjusted EBITDA)
|
—
|
|
|
—
|
|
|
(4,451)
|
|
|
(416)
|
|
|
13,729
|
|
Cash from continued
operating activities
|
2,817
|
|
|
1,788
|
|
|
8,891
|
|
|
10,840
|
|
|
51,098
|
|
Less: Continuing
operations capital
expenditures, net of proceeds from asset
sales
|
(1,869)
|
|
|
(6,290)
|
|
|
(1,560)
|
|
|
(10,624)
|
|
|
(8,249)
|
|
Distributions from CSI
Compressco LP (1)
|
52
|
|
|
52
|
|
|
168
|
|
|
104
|
|
|
506
|
|
Cash (distributed to
partners) received
from other investments
|
—
|
|
|
—
|
|
|
—
|
|
|
2,354
|
|
|
—
|
|
Adjusted Free Cash Flow
From
Continuing Operations
|
$
|
1,000
|
|
|
$
|
(4,450)
|
|
|
$
|
7,499
|
|
|
$
|
2,674
|
|
|
$
|
43,355
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Following the GP Sale
on January 29, 2021, TETRA retained a 10.9% limited partner
interest in CCLP.
|
View original content to download
multimedia:https://www.prnewswire.com/news-releases/tetra-technologies-inc-announces-third-quarter-2021-income-before-discontinued-operations-of-2-5-million-and-adjusted-ebitda-of-15-0-million-301413325.html
SOURCE TETRA Technologies, Inc.