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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 302021, 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.