TETRA Technologies, Inc. Announces Second Quarter 2021 Results, Attainment Of Low Carbon Energy Milestones And Secures Multiple Deepwater Awards

THE WOODLANDS, Texas, Aug. 2, 2021 /PRNewswire/ — TETRA Technologies, Inc. (“TETRA” or the “Company”) (NYSE:TTI) today announced second quarter 2021 results.

Second quarter 2021 revenue was $102 million, a sequential increase of 32% over the first quarter of 2021 reflecting improvements by all business segments, including the seasonal peak in Northern Europe chemicals sales.  Net loss before discontinued operations was $6.7 million, inclusive of $4.7 million of non-recurring charges and expenses. This compares to a net loss before discontinued operations of $11.9 million in the first quarter, inclusive of $6.6 million of non-recurring charges and expenses.  Net loss per share from continuing operations in the second quarter was $0.05.  Excluding the non-recurring charges and expenses, the net loss per share from continuing operations was $0.02.  Adjusted EBITDA, excluding non-recurring charges, was $13.0 million, which includes a $1.6 million benefit from the increase in TETRA’s equity ownership in CSI Compressco LP and Standard Lithium, where we own approximately 10.9% and 1.1%, respectively.   Second quarter adjusted EBITDA was up 44% from the first quarter of 2021 reflecting stronger operational performance from both business segments.  Cash flow from operating activities was $1.8 million in the second quarter of 2021 and compared to $5.8 million in the first quarter of 2021, while adjusted free cash flow from continuing operations was a use of cash of $4.5 million reflecting a buildup in working capital from the higher activity levels towards the end of the second quarter.  This compares to $5.4 million of adjusted free cash flow from continuing operations in the first quarter of 2021.

Brady Murphy, TETRA’s Chief Executive Officer, stated, “We achieved good overall revenue and EBITDA progression from the first quarter, and even more so as the quarter progressed, and with some great wins and key milestones in all of our business segments, I am very encouraged with the outlook going forward.  By early June we saw meaningful increase in demand for international and Gulf of Mexico Completion Fluids, which is consistent with what we believe to be the start of strong, multi-year international and offshore recovery.  We exited the quarter with June being our highest revenue and Adjusted EBITDA month since March 2020 reflecting sequential improvements in all of our business groups.  Completion Fluids and Products Adjusted EBITDA margin of 27.7% was an improvement of 400 basis points from the first quarter of 2021.  Although faced with some inflationary headwinds in our Water and Flowback business ahead of our ability to get broad based price increases, the third quarter EBITDA and related margins are expected to benefit from two newly awarded recycling projects, a fully deployed SandstormTM project in Argentina and continued improvement and alignment of service pricing.  Going into the second half of the year, we expect to see a continued recovery in our North American onshore business with higher prices plus continued stronger activity in our international fluids business with the potential for strong market recovery in all of our segments heading into 2022.”

“The second quarter, and also more recently in July, we received a lot of positive news for our oil and gas related business as well as our low carbon energy opportunities. In July we completed our first international TETRA CS Neptune® fluids job in the North Sea, which also was our first ever high-density monovalent operation. While the revenue from this project was considerably smaller than our typical TETRA CS Neptune® fluids projects in the Gulf of Mexico, it reflects acceptance of this proprietary technology into new markets. We were awarded a three-year completion fluids and services contract with one of the most active deepwater super major operators in the Gulf of Mexico (GoM) that represents a significant market share increase for this customer and for our GoM operations.  We have also received a multi-year major completion fluids award through partnering with a major integrated service company for deepwater work in Brazil.   We are expecting our international and offshore fluids sales to increase materially in the second half of the year from the first half due to major project awards and overall increased customer activity.  With the ongoing growth and success of our Northern European industrial chemicals business, we are proceeding with a planned expansion for our Kokkola calcium chloride plant in Finland to increase capacity by over 25% by mid-2022.

“Each of our low carbon energy business initiatives continues to advance at an accelerated pace.  Following diligence and successful CO2 mineralization to design specifications in a San Antonio SkyCycle pilot plant, we have agreed to make a $5 million investment in CarbonFree in the form of a convertible note.  This will allow us to participate in the equity upside as CarbonFree continues to make progress in commercializing its SkyCycle proprietary technology and we continue to advance our long term business relationship. Our PureFlowTM high purity zinc bromide has been qualified by three energy storage manufacturers, and we have received our first commercial purchase order well ahead of our year end expectations.  We expect that this will be the first of many opportunities for TETRA to expand our PureFlow sales into the energy storage markets. In regard to lithium activities, Standard Lithium announced in the second quarter that they launched an engineering feasibility study to extract lithium from the brine, which would also include bromine, underlying the TETRA Arkansas leases as part of the 2017 agreement between Standard Lithium and TETRA.  According to Standard Lithium, the results of this study are expected to be completed in the third quarter of 2021.  As previously announced by Standard Lithium, this acreage has 890,000 tons of LCE equivalent at the inferred resource category.    As we announced earlier today, we completed a preliminary exploratory study of the bromine and lithium in our Arkansas leases that includes the leases outside of the Standard Lithium agreement.   The study indicates a rich brine concentration for both lithium and bromine and supports our actions to further evaluate a full economic feasibility of these assets.  Finally, we have executed a memorandum of understanding to work with Anson Resources, an Australian publicly traded minerals company, to explore a business relationship for lithium and bromine extraction from their Paradox Basin Brine Project in southern Utah. The collaboration will include, among other things, the potential off-take agreement of bromine to meet our growing demands for both oil and gas and energy storage, potential licensing of TETRA’s patented bromine derivative manufacturing process, as well as operational management of the plant(s).   

“We have reduced our term loan by $36.3 million from $220.5 million as of September 30, 2020, to $184.2 million as of June 30, 2021 and reduced it by another $8.2 million in July.  This will save us approximately $3.2 million per year, on an annualized basis, in interest expense.  In July, we amended our Asset Based Loan (“ABL”) extending the maturity to May 2025 and increased our availability for our ABL by approximately $9.4 million.  With this amendment, we do not have any maturities until May 2025 other than our requirement to offer to prepay a percentage of excess cash flow following the conclusion of each calendar year.  During the first half of 2021, we have recorded mark to market gains of $5.6 million on our equity holdings of CSI Compressco LP and Standard Lithium.  As of July 30, 2021, the market value of these investments was $17.8 million, with no restrictions on our ability to monetize these investments.  Additionally, in July we received an expected payment of $548,000 from our sale of our controlling interest in CSI Compressco.”

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.

Second Quarter Results and Highlights
A summary of key financial metrics for the second quarter are as follows:

Second Quarter 2021 Results


Three Months Ended


June 30, 2021


March 31, 2021


June 30, 2020


(In Thousands, Except per Share Amounts)

Revenue

$

102,326



$

77,324



$

96,070


Loss before discontinued operations

(6,654)



(11,943)


(13,179)


Adjusted EBITDA before discontinued operations

12,967



8,981



8,941


GAAP EPS from continuing operations

(0.05)



(0.10)



(0.11)


Adjusted EPS  from continuing operations

(0.02)



(0.04)



(0.06)


GAAP net cash provided by operating activities

1,788



5,819



38,211


Adjusted free cash flow from continuing operations

$

(4,450)



$

5,369



$

31,350


Completion Fluids & Products second quarter of 2021 revenue of $64.6 million increased 39% from the first quarter of 2021 driven by the seasonal increase for our Northern Europe industrial chemicals business and stronger offshore completion fluid sales. Completion Fluids & Products income before taxes was $16.4 million in the second quarter (25.4% of revenue) compared to $9.0 million (19.4% of revenue) in the first quarter of 2021.  Adjusted EBITDA of $17.9 million increased $6.8 million sequentially.  Second quarter Adjusted EBITDA included $1.5 million favorable mark to market adjustment from TETRA’s investment in Standard Lithium.  TETRA’s value of the 1.6 million shares that we own in Standard Lithium was $9.7 million as of July 31, 2021.

Water & Flowback Services revenue was $37.7 million in the second quarter of 2021, an increase of 22% from the first quarter of 2021, and loss before taxes was $5.0 million.  Adjusted EBITDA of $2.0 million (5.3% of revenue) increased 123% sequentially as we saw a rebound in Water Management and Flowback testing from the first quarter that was negatively impacted by winter storms.

Free Cash Flow and Balance Sheet

Cash from operating activities was $1.8 million in the second quarter while adjusted free cash flow from continuing operations was a use of cash of $4.5 million.  Liquidity at the end of second quarter was $82.0 million.  Liquidity is defined as unrestricted cash plus availability under the revolving credit facility.  At the end of the second quarter unrestricted cash was $50.3 million and availability under our credit facility was $31.7 million.  Debt was $171.8 million before the $8.2 million paydown in July, while net debt was $121.4 million.

Non-recurring Charges and Expenses Items

Non-recurring charges and expenses are reflected on Schedule E and include $1.3 million of cumulative adjustments to long-term incentives and appreciation right expenses, $0.7 million of restructuring and transaction expenses, and $2.7 million of stock warrant fair value adjustment expense.

Conference Call

TETRA will host a conference call to discuss these results tomorrow, August 3, 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 10158935, 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 a geographically diversified oil and gas services company, focused on completion fluids and associated products and services, water management, frac flowback, and production well testing.  TETRA owns an 10.9% equity interest in CSI Compressco LP (NASDAQ: CCLP) and approximately 1.1% equity interest in Standard Lithium (NYSE: SLI).

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; curtailments in production and completion activities related to extreme winter weather; potential revenue associated with prospective energy storage projects or our pending carbon capture partnership; 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


Six Months Ended


June 30,
2021


March 31,
2021


June 30,
2020


June 30,
2021


June 30,
2020


(In Thousands, Except per Share Amounts)

Revenues

$

102,326



$

77,324



$

96,070



$

179,650



$

228,773












Cost of sales, services, and rentals

77,208



60,614



70,607



137,822



164,722


Depreciation, amortization, and accretion

8,236



8,951



9,726



17,187



19,277


Impairments and other charges

449







449




Insurance recoveries



(110)



(74)



(110)



(74)


Total cost of revenues

85,893



69,455



80,259



155,348



183,925


Gross profit

16,433



7,869



15,811



24,302



44,848












General and administrative expense

17,351



20,012



23,862



37,363



44,210


Interest expense, net

3,886



4,404



4,604



8,290



9,896


Warrants fair value adjustment expense (income)

2,698



323



11



3,021



(327)


Other income, net

(2,232)



(5,095)



(541)



(7,327)



(520)


Loss before taxes and discontinued operations

(5,270)



(11,775)



(12,125)



(17,045)



(8,411)


Provision for income taxes

1,384



168



1,054



1,552



1,776


Loss before discontinued operations

(6,654)



(11,943)



(13,179)



(18,597)



(10,187)


Discontinued operations:










Income (loss) from discontinued operations, net of taxes

(126)



120,990



(23,788)



120,864



(37,156)


Net income (loss)

(6,780)



109,047



(36,967)



102,267



(47,343)


Less: (income) loss attributable to noncontrolling interest(1)

27



(333)



15,712



(306)



24,537


Net income (loss) attributable to TETRA stockholders

$

(6,753)



$

108,714



$

(21,255)



$

101,961



$

(22,806)












Basic and diluted per share information:










Loss from continuing operations

$

(0.05)



$

(0.10)



$

(0.11)



$

(0.15)



$

(0.08)


Income (loss) from discontinued operations

$

0.00



$

0.96



$

(0.06)



$

0.96



$

(0.10)


Net income (loss) attributable to TETRA stockholders

$

(0.05)



$

0.86



$

(0.17)



$

0.81



$

(0.18)


Weighted average shares outstanding

126,583


126,149



125,886


126,365



125,736



(1)

(Income) loss attributable to noncontrolling interest includes zero, $333 income and $15,781 loss for the three-month periods ended June 30, 2021, March 31, 2021 and June 30, 2020, respectively, and $333 income and $24,615 loss for the six-month periods ended June 30, 2021 and 2020, respectively, related to discontinued operations.

Schedule B: Condensed Consolidated Balance Sheet (Unaudited)



June 30,
2021


December 31,
2020


(In Thousands)


(Unaudited)



ASSETS




Current assets:




Cash and cash equivalents

$

50,314


$

67,252

Restricted cash

65


65

Trade accounts receivable

79,467


64,078

Inventories

70,071


76,658

Assets of discontinued operations


710,006

Prepaid expenses and other current assets

15,881


13,487

Total current assets

215,798


931,546

Property, plant, and equipment, net

91,423


96,856

Patents, trademarks and other intangible assets, net

39,237


41,487

Deferred tax assets, net

44


52

Operating lease right-of-use assets

39,517


43,448

Investments

16,221


2,675

Other assets

14,569


16,775

Total long-term assets

201,011


201,293

Total assets

$

416,809


$

1,132,839





LIABILITIES AND EQUITY




Current liabilities:




Trade accounts payable

$

38,868


$

22,573

Unearned income

3,019


2,675

Accrued liabilities and other

44,069


38,791

Liabilities of discontinued operations

1,601


734,039

Current portion of long-term debt

8,157


Total current liabilities

95,714


798,078

Long-term debt, net

163,603


199,894

Deferred income taxes

1,939


1,942

Asset retirement obligations

12,699


12,484

Warrants liability

3,219


198

Operating lease liabilities

33,786


37,569

Other liabilities

6,792


11,612

Total long-term liabilities

222,038


263,699

Commitments and contingencies




TETRA stockholders’ equity

100,158


(9,640)

Noncontrolling interests

(1,101)


80,702

Total equity

99,057


71,062

Total liabilities and equity

$

416,809


$

1,132,839

Schedule C: Consolidated Statements of Cash Flows (Unaudited)



Six Months Ended
June 30,


2021


2020


(In Thousands)

Operating activities:




Net income (loss)

$

102,267



$

(47,343)


Reconciliation of net income (loss) to net cash provided by operating activities:




Depreciation, amortization, and accretion

17,215



59,302


Gain on GP Sale

(120,574)




Impairment and other charges

449



14,348


Gain on retained CSI Compressco units and Standard Lithium shares

(5,613)



(183)


Equity-based compensation expense

2,554



2,896


Amortization and expense of financing costs and deferred financing gains

1,429



2,755


Debt-related expenses



4,754


Warrants fair value adjustment

3,021



(326)


Gain on sale of assets

(275)



(2,019)


Other non-cash charges

(70)



5,380

Changes in operating assets and liabilities:




Accounts receivable

(15,694)



55,552


Inventories

5,456



10,733


Prepaid expenses and other current assets

(2,442)



(3,038)


Trade accounts payable and accrued expenses

21,295



(42,853)


Other

(1,411)



429


Net cash provided by operating activities

7,607



60,387


Investing activities:




Purchases of property, plant, and equipment, net

(12,489)



(19,608)


Proceeds from sale of CCLP, net of cash divested

18




Proceeds on sale of property, plant, and equipment

754



5,311


Insurance recoveries associated with damaged equipment

110



591


Other investing activities

1,156



(357)


Net cash used in investing activities

(10,451)



(14,063)


Financing activities:




Proceeds from long-term debt



338,343


Principal payments on long-term debt

(29,320)



(341,364)


CSI Compressco distributions



(620)


Tax remittances on equity based compensation



(341)


Debt issuance costs and other financing activities

(455)



(2,504)


Net cash provided by (used in) financing activities

(29,775)



(6,486)


Effect of exchange rate changes on cash

(896)



(826)


(Decrease) increase in cash and cash equivalents

(33,515)



39,012


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

50,379



56,780


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

$

50,379



$

50,023


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.

Schedule E: Non-GAAP Reconciliation of Adjusted Income (Loss) From Continuing Operations (Unaudited)



Three Months Ended


June 30,
2021


March 31,
2021


June 30,
2020


(In Thousands, Except per Share Amounts)







Loss before taxes and discontinued operations

$

(5,270)



$

(11,775)



$

(12,125)


(Provision) benefit for income taxes

(1,384)



(168)



(1,054)


Noncontrolling interest attributed to continuing operations

27





(69)


Loss from continuing operations

(6,627)



(11,943)



(13,248)


Adjustment to long-term incentives

627



2,897




Transaction and other expenses

(345)



2,550



186


Impairments and other charges






Former CEO stock appreciation right expense

714



509




Restructuring charges

1,033



340



218


Debt refinancing






Stock warrant fair value adjustment

2,698



323



11


Severance expenses





1,920


Bad debt





2,800


Adjusted income (loss) from continuing operations

$

(1,900)



$

(5,324)



$

(8,113)








Basic and diluted per share information






Loss from continuing operations

$

(0.05)



$

(0.10)



$

(0.11)


Adjusted income (loss) from continuing operations

$

(0.02)



$

(0.04)



$

(0.06)


Diluted weighted average shares outstanding

126,583



126,149



125,886


Schedule F: Non-GAAP Reconciliation of Adjusted EBITDA (Unaudited)



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 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 March 31, 2021


Completion
Fluids &
Products


Water &
Flowback
Services


Corporate
SG&A


Other and
Eliminations


Total


(In Thousands, Except Percents)

Revenues

$

46,522



$

30,802



$



$



$

77,324


Net income (loss) before taxes and

discontinued operations

9,010



(5,480)



(13,020)



(2,285)



(11,775)


Adjustment to long-term incentives

281





2,616





2,897


Transaction and other expenses





2,550





2,550


Former CEO stock appreciation right expense





509





509


Restructuring and severance expenses

181





160





341


Stock warrant fair value adjustment







323



323


Adjusted income (loss) before taxes and discontinued operations

$

9,472



$

(5,480)



$

(7,185)



$

(1,962)



$

(5,155)


Adjusted interest expense, net

(138)



(522)





5,064



4,404


Adjusted depreciation and amortization

1,705



6,899





166



8,770


Equity compensation expense





962





962


Adjusted EBITDA

$

11,039



$

897



$

(6,223)



$

3,268



$

8,981












Adjusted EBITDA as a % of revenue

23.7

%


2.9

%






11.6

%



Three Months Ended June 30, 2020


Completion
Fluids &
Products


Water &
Flowback
Services


Corporate
SG&A


Other and
Eliminations


Total


(In Thousands, Except Percents)

Revenues

$

71,346



$

24,724



$



$



$

96,070


Net income (loss) before taxes and

discontinued operations

13,202



(8,418)



(11,611)



(5,298)



(12,125)


Severance

569



1,016



334





1,919


Transaction and other expenses

(90)





276





186


Restructuring and severance expenses

31



187







218


Stock warrant fair value adjustment







11



11


Allowance for bad debt

2,800









2,800


Adjusted income (loss) before taxes and discontinued operations

16,512



(7,215)


(11,001)



(5,287)



(6,991)


Adjusted interest expense, net

(143)



(2)





4,749



4,604


Adjusted depreciation and amortization

1,934



7,617





175



9,726


Equity compensation expense





1,602





1,602


Adjusted EBITDA

$

18,303



$

400



$

(9,399)



$

(363)



$

8,941












Adjusted EBITDA as a % of revenue

25.7

%


1.6

%






9.3

%





















Schedule G: Non-GAAP Reconciliation of TETRA Net Debt (Unaudited)


The following reconciliation of net debt is presented as a supplement to financial results prepared in accordance with GAAP.



June 30,
2021


December 31,
2020


(In Thousands)

Non-restricted cash

$

50,314



$

67,252






Asset-Based Credit Agreement




Term Credit Agreement

$

171,760



$

199,894


Net debt

$

121,446



$

132,642


Schedule H: Non-GAAP Reconciliation to Adjusted Free Cash Flow From Continuing Operations (Unaudited)



Three Months Ended


Six Months Ended


June 30,
2021


March 31,
2021


June 30,
2020


June 30,
2021


June 30,
2020


(In Thousands)

Cash from operating activities

$

1,788



$

5,819



$

38,211



$

7,607



$

60,387


Discontinued operations operating activities (adjusted EBITDA income (loss))



(416)



4,823



(416)



18,180


Cash from continued operating activities

1,788



6,235



33,388



8,023



42,207


Less: Continuing operations capital expenditures

(6,290)



(3,220)



(2,207)



(9,510)



(6,689)


Distributions from CSI Compressco LP (1)

52





169



52



338


Cash (distributed to partners) received from other investments




2,354







2,354





Adjusted Free Cash Flow From Continuing Operations

$

(4,450)



$

5,369



$

31,350



$

919



$

35,856














(1) 

Following the GP Sale on January 29, 2021, TETRA retained a 10.9% limited partner interest in CCLP.

SOURCE TETRA Technologies, Inc.

Related Links

http://www.tetratec.com

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