Tetra Technologies, Inc.
TETRA Technologies, Inc. Announces Second Quarter 2016 Results
TETRA Technologies, Inc. Announces Second Quarter 2016 Results

THE WOODLANDS, TexasAug. 8, 2016 /PRNewswire/ -- TETRA Technologies, Inc. (NYSE:TTI) (TETRA or the Company) today announced a consolidated second quarter 2016 net loss per share attributable to TETRA stockholders of $(0.32), which compares to earnings of $0.19 in the second quarter of 2015.

TETRA's adjusted per share results attributable to TETRA stockholders for the second quarter of 2016, excluding Maritech and other charges, were a loss of $(0.15), which compares to adjusted diluted earnings per share attributable to TETRA stockholders of $0.17 in the second quarter of 2015, also excluding Maritech and other charges. Second quarter 2016 revenue of $175.7 million declined 44% from the second quarter of 2015 primarily as a result of a 50% reduction in the North American rig count. (Adjusted diluted earnings (loss) per share is a non-GAAP financial measure that is reconciled to the nearest GAAP measure in the accompanying schedules.)

Second Quarter 2016 Results

 

Three Months Ended

 

June 30, 2016

 

March 31, 2016

 

June 30, 2015

 

(In Thousands, Except per Share Amounts)

Revenue

$

175,660

   

$

169,329

   

$

316,319

 

Net income (loss) attributable to TETRA stockholders

(26,574)

   

(88,325)

   

14,925

 

Adjusted EBITDA(1)

32,949

   

19,424

   

74,542

 

Diluted EPS attributable to TETRA stockholders

(0.32)

   

(1.11)

   

0.19

 

Adjusted diluted EPS attributable to TETRA stockholders(1)

(0.15)

   

(0.24)

   

0.17

 

Consolidated net cash provided by operating activities

8,336

   

25,261

   

54,347

 

TETRA only adjusted free cash flow(1)

$

(8,773)

   

$

18,488

   

$

42,868

 
 
   

(1)

Non-GAAP financial measures are reconciled to GAAP in the schedules below.

 

 

Highlights of the 2016 second quarter include:

  • Completion of public equity offering, raising $60 million in net proceeds to repay outstanding debt.
  • Amendment of credit facility and debt agreements, providing enhanced financial flexibility.
  • For our Compression Division, net cash provided by operating activities was $20.5 million, loss before tax was $(4.0) million, and adjusted EBITDA(1) was $24.7 million.
  • A growing backlog in our Offshore Services segment as we exited the second quarter.
  • Continued aggressive reduction of expenses across the company, including salary reductions and reduced workweek schedules.

(1)   Non-GAAP financial measures are reconciled to GAAP in the schedules below.

Analysis of Second Quarter Results

Stuart M. Brightman, TETRA's President and Chief Executive Officer, stated, "During the second quarter of 2016, most of our markets continued to experience a decline in activity and high levels of competitiveness. Even with this unfavorable environment, our results improved sequentially, compared to the first quarter of 2016, as a result of seasonal improvements in several of our businesses combined with the ongoing positive impact of cost reductions.

"Also during the second quarter we completed a public equity offering, raising $60 million in net proceeds that were used primarily to repay outstanding debt, and we successfully negotiated the amendment of our primary debt agreements, providing us with enhanced financial flexibility. These two actions represent important steps for our long-term success, as they strengthen our balance sheet, provide additional liquidity, and better position us to respond rapidly when activity levels rebound.  

"Our Fluids Division's revenues for the second quarter of 2016 were $60.8 million compared to $123.0 million in the second quarter of 2015. Similar to what we saw in the first quarter of this year, the decrease was predominately the result of continued lower demand in North America, a lack of major projects in the Gulf of Mexico, and continued pricing pressure in many international markets. Our seasonal increase in activity in the European chemical business somewhat mitigated this trend. Overall, this resulted in pretax income of $0.4 million and adjusted pretax income of $1.0 million for the Fluids Division in the second quarter of 2016, compared to pretax income of $32.6 million and adjusted pretax income of $32.8 million in the second quarter of 2015. Going forward into the second half of this year, our expectations for the Fluids Division are that we will see slightly improved activity in North America and an increase in offshore activity associated with projects currently in our backlog.

"Second quarter 2016 results for our Production Testing Division represent a sequential decrease from the first quarter of 2016, with a pretax loss of $(4.3) million and an adjusted pretax loss of $(4.2) million in this year's second quarter compared to a pretax loss of $(19.3) million and an adjusted pretax loss of $(2.3) million in this year's first quarter. Similar to the Fluids Division, this was driven primarily by a continued reduction in activity in North America and in certain international markets. Also similar to the Fluids Division, we expect to see a slight increase in activity for Production Testing in the second half of this year with a modest increase in completions activity.

"For the second quarter of 2016 our Compression Division reported a pretax loss of $(4.0) million and an adjusted pretax loss of $(3.1) million compared to a pretax loss of $(104.7) million and an adjusted pretax loss of $(4.3) million in the first quarter of 2016. During the second quarter, the Division experienced a continued decrease in utilization of our compression services and a continued reduction in equipment sales. Adjusted EBITDA of $24.7 million for the second quarter of this year represented an improvement over adjusted EBITDA of $23.6 million in the first quarter of this year, primarily due to the continued benefit of cost reduction actions. On July 22, 2016CSI Compressco LP declared a distribution attributable to the second quarter of 2016 of $0.3775 per unit, unchanged from the distribution attributable to the first quarter of this year. This distribution resulted in a coverage ratio of 1.19x for the second quarter of 2016.

"Our Offshore Service segment reported pretax income of $37,000 and adjusted pretax income of $93,000 in the second quarter of 2016 compared to pretax income of $2.1 million in the second quarter of 2015. The segment's improvement on a sequential basis, compared to the pretax loss of $(7.7) million reported in the first quarter of 2016, is due to the normal seasonal activity of the second quarter. In addition, the backlog for our major assets continued to firm-up during the second quarter, and we expect the third quarter to show a typical seasonal improvement over the second quarter, sequentially."

Special Charges and Maritech

Maritech reported a pre-tax loss of $(3.4) million in the second quarter of 2016. The primary contributor to this loss was the write-off of a receivable of $2.8 million associated with the uncertainty of our ability to collect future reimbursements for P&A work performed on certain Maritech properties. 

Financial Guidance

Given the operating environment and expectations of a prolonged downturn, the management team remains focused on adjusted free cash flow. The forecast for full year 2016 TETRA only adjusted free cash flow is a range of $30 to $50 million. No reconciliation of the forecasted range of adjusted free cash flow for the full year 2016 is included in this release because the reconciliation would require presenting forecasted information for CSI Compressco that is not publicly disclosed.

Conference Call

TETRA will host a conference call to discuss second quarter 2016 results today, August 8, 2016, at 10:30 am ET. The phone number for the call is (888) 347-5303. The conference will also be available by live audio webcast and may be accessed through TETRA's website at www.tetratec.com.

Financial Statements, Schedules and Non-GAAP Reconciliation Schedules (Unaudited)

Schedule A: Consolidated Income Statement  
Schedule B: Financial Results By Segment  
Schedule C: Consolidated Balance Sheet  
Schedule D: Long-Term Debt  
Schedule E: Second Quarter Special Charges  
Schedule F: Non-GAAP Reconciliation to GAAP Financials  
Schedule G: Non-GAAP Reconciliation to Adjusted Free Cash Flow  
Schedule H: Non-GAAP Reconciliation of TETRA Net Debt

Company Overview and Forward Looking Statements

TETRA is a geographically diversified oil and gas services company, focused on completion fluids and associated products and services, water management, frac flowback, production well testing, offshore rig cooling, compression services and equipment, and selected offshore services including well plugging and abandonment, decommissioning, and diving. TETRA owns an equity interest, including all of the general partner interest, in CSI Compressco LP (NADAQ:CCLP), a master limited partnership.

This press release includes certain statements that are deemed to be forward-looking statements. Generally, the use of words such as "may," "expect," "intend," "estimate," "projects," "anticipate," "believe," "assume," "could," "should," "plans," "targets" or similar expressions that convey the uncertainty of future events, activities, expectations or outcomes identify forward-looking statements that the Company intends to be included within the safe harbor protections provided by the federal securities laws. These forward-looking statements include statements concerning expected results of operational business segments for 2016, anticipated benefits from CSI Compressco following the acquisition of CSI in 2014, including increases in cash distributions per unit, projections concerning the Company's business activities, financial guidance, estimated earnings, earnings per share, and statements regarding the Company's beliefs, expectations, plans, goals, future events and performance, and other statements that are not purely historical. These forward-looking statements are based on certain assumptions and analyses made by the Company in light of its experience and its perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate in the circumstances. Such statements are subject to a number of risks and uncertainties, many of which are beyond the control of the Company, including the ability of CSI Compressco to successfully integrate the operations of CSI and recognize the anticipated benefits of the acquisition. Investors are cautioned that any such statements are not guarantees of future performances or results and that actual results or developments may differ materially from those projected in the forward-looking statements. Some of the factors that could affect actual results are described in the section titled "Risk Factors" contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2015, 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
 June 30,

 

Six Months Ended
 June 30,

 

2016

 

2015

 

2016

 

2015

 

(In Thousands)

Revenues

$

175,660

   

$

316,319

   

$

344,989

   

$

567,411

 
               

Cost of sales, services, and rentals

125,593

   

207,391

   

246,034

   

374,054

 

Depreciation, amortization, and accretion

33,538

   

39,067

   

67,145

   

77,410

 

Impairments of long-lived assets

257

   

   

10,927

   

 

Total cost of revenues

159,388

   

246,458

   

324,106

   

451,464

 

Gross profit

16,272

   

69,861

   

20,883

   

115,947

 
               

General and administrative expense

27,181

   

37,472

   

60,792

   

72,741

 

Goodwill impairment

   

   

106,205

   

 

Interest expense, net

14,335

   

13,319

   

28,974

   

27,035

 

Other (income) expense, net

2,210

   

962

   

1,506

   

118

 

Income (loss) before taxes

(27,454)

   

18,108

   

(176,594)

   

16,053

 

Provision (benefit) for income taxes

1,770

   

2,741

   

361

   

4,310

 

Net income (loss)

(29,224)

   

15,367

   

(176,955)

   

11,743

 

Net (income) loss attributable to noncontrolling interest

2,650

   

(442)

   

62,056

   

(1,266)

 

Net income (loss) attributable to TETRA stockholders

$

(26,574)

   

$

14,925

   

$

(114,899)

   

$

10,477

 
               

Basic per share information:

             

Net income (loss) attributable to TETRA stockholders

$

(0.32)

   

$

0.19

   

$

(1.42)

   

$

0.13

 

Weighted average shares outstanding

81,842

   

79,165

   

80,631

   

79,037

 
               

Diluted per share information:

             

Net income (loss) attributable to TETRA stockholders

$

(0.32)

   

$

0.19

   

$

(1.42)

   

$

0.13

 

Weighted average shares outstanding

81,842

   

79,915

   

80,631

   

79,506

 
 

 

Schedule B: Financial Results By Segment (Unaudited)

 
 

Three Months Ended
 June 30,

 

Six Months Ended 
June 30,

 

2016

 

2015

 

2016

 

2015

 

(In Thousands)

Revenues by segment:

             

Fluids Division

$

60,833

   

$

122,974

   

$

119,946

   

$

222,263

 

Production Testing Division

13,384

   

34,842

   

33,255

   

71,943

 

Compression Division

76,091

   

126,455

   

157,786

   

229,344

 

Offshore Division

             

Offshore Services

26,119

   

35,731

   

36,365

   

47,514

 

Maritech

248

   

394

   

337

   

1,900

 

Intersegment eliminations

7

   

(2,909)

   

(516)

   

(3,180)

 

Offshore Division total

26,374

   

33,216

   

36,186

   

46,234

 

Eliminations and other

(1,022)

   

(1,168)

   

(2,184)

   

(2,373)

 

Total revenues

$

175,660

   

$

316,319

   

$

344,989

   

$

567,411

 
               

Gross profit (loss) by segment:

             

Fluids Division

$

6,585

   

$

40,355

   

$

14,076

   

$

65,720

 

Production Testing Division

(2,598)

   

3,918

   

(6,022)

   

6,777

 

Compression Division

13,727

   

21,150

   

20,682

   

43,937

 

Offshore Division

             

Offshore Services

1,767

   

4,691

   

(4,222)

   

(1,279)

 

Maritech

(3,097)

   

2

   

(3,412)

   

1,301

 

Intersegment eliminations

   

   

   

 

Offshore Division total

(1,330)

   

4,693

   

(7,634)

   

22

 

Corporate overhead and eliminations

(112)

   

(255)

   

(219)

   

(509)

 

Total gross profit

$

16,272

   

$

69,861

   

$

20,883

   

$

115,947

 
               

Income (loss) before taxes by segment:

             

Fluids Division

$

454

   

$

32,583

   

$

96

   

$

50,320

 

Production Testing Division

(4,328)

   

(472)

   

(23,702)

   

(433)

 

Compression Division

(4,040)

   

1,498

   

(108,740)

   

3,904

 

Offshore Division

             

Offshore Services

37

   

2,095

   

(7,671)

   

(6,553)

 

Maritech

(3,401)

   

(313)

   

(4,021)

   

662

 

Intersegment eliminations

   

   

   

 

Offshore Division total

(3,364)

   

1,782

   

(11,692)

   

(5,891)

 

Corporate overhead and eliminations

(16,176)

   

(17,283)

   

(32,556)

   

(31,847)

 

Total income (loss) before taxes

$

(27,454)

   

$

18,108

   

$

(176,594)

   

$

16,053

 
 
 

Please note that the above results by Segment are inclusive of the special charges and expenses. Please see Schedule E for details of those special charges and expenses.

 

 

Schedule C: Consolidated Balance Sheet (Unaudited)

 
 

June 30, 2016

 

December 31, 2015

 

(In Thousands)

Balance Sheet:

     

Cash (excluding restricted cash)

$

23,917

   

$

23,057

 

Accounts receivable, net

110,685

   

184,172

 

Inventories

124,315

   

117,009

 

Other current assets

28,753

   

29,791

 

PP&E, net

1,000,169

   

1,048,004

 

Other assets

98,584

   

234,169

 

Total assets

$

1,386,423

   

$

1,636,202

 
       

Current portion of decommissioning liabilities

$

3,291

   

$

14,570

 

Other current liabilities

128,139

   

170,676

 

Long-term debt (1)

788,222

   

853,228

 

Long-term portion of decommissioning liabilities

51,732

   

42,879

 

Other long-term liabilities

27,255

   

40,669

 

Equity

387,784

   

514,180

 

Total liabilities and equity

$

1,386,423

   

$

1,636,202

 
 
   

(1)

 Please see Schedule D for the individual debt obligations of TETRA and CSI Compressco LP.

 

 

Schedule D: Long-Term Debt

 

TETRA Technologies Inc. and its subsidiaries, excluding CSI Compressco LP and its subsidiaries, are obligated under a bank credit agreement and senior notes, neither of which are obligations of CSI Compressco LP and its subsidiaries. CSI Compressco LP and its subsidiaries are obligated under a separate bank credit agreement and senior notes, neither of which are obligations of TETRA and its other subsidiaries. Amounts presented are net of deferred financing costs.

 
 
 

June 30, 2016

 

December 31, 2015

 

(In Thousands)

TETRA

     

Bank revolving line of credit facility

$

101,604

   

$

21,572

 

TETRA Senior Notes at various rates

117,446

   

264,998

 

Other debt

   

50

 

TETRA total debt

219,050

   

286,620

 

Less current portion

   

(50)

 

TETRA total long-term debt

$

219,050

   

$

286,570

 
       

CSI Compressco LP

     

CCLP Bank Credit Facility

$

231,171

   

$

229,555

 

CCLP 7.25% Senior Notes

338,001

   

337,103

 

CCLP total debt

569,172

   

566,658

 

Less current portion

   

 

CCLP total long-term debt

$

569,172

   

$

566,658

 

Consolidated total long-term debt

$

788,222

   

$

853,228

 
 

 

Non-GAAP Financial Measures         

In addition to financial results determined in accordance with GAAP, this press release includes the following non-GAAP financial measures for the Company: net debt, adjusted consolidated and segment income (loss) before taxes, excluding the Maritech segment and special charges; adjusted EBITDA; and adjusted free cash flow. The following schedules provide reconciliations of these non-GAAP financial measures to their most directly comparable GAAP measures. The non-GAAP financial measures should be considered in addition to, not as a substitute for, financial measures prepared in accordance with GAAP, as more fully discussed in the Company's financial statements and filings with the Securities and Exchange Commission.

Management believes that following the sale of essentially all of Maritech's oil and gas properties, it is helpful to show the Company's results excluding the impact of the costs and charges relating to the decommissioning of Maritech's remaining properties since these results will show the Company's historical results of operations on a basis consistent with expected future operations.  Management also believes that the exclusion of the special charges from the historical results of operations enables management to evaluate more effectively the Company's operations over the prior periods and to identify operating trends that could be obscured by the excluded items.

Adjusted income (loss) before taxes (and adjusted income (loss) before taxes as a percent of revenue) is defined as the Company's (or its Segments') income (loss) before taxes excluding certain special or other charges (or credits). Adjusted income (loss) before taxes (and adjusted income (loss) before taxes as a percent of revenue) is used by management as a supplemental financial measure to assess financial performance, without regard to charges or credits that are considered by management to be outside of its normal operations.

Adjusted diluted earnings (loss) per share is defined as the Company's diluted earnings (loss) per share excluding certain special or other charges (or credits) and using a normalized effective income tax rate. Adjusted diluted earnings (loss) per share is used by management as a supplemental financial measure to assess financial performance, without regard to charges or credits that are considered by management to be outside of its normal operations.

Adjusted EBITDA is defined as adjusted income before interest, taxes, depreciation, amortization, impairments and special charges, and equity compensation. Adjusted EBITDA is used by management as a supplemental financial measure to assess the financial performance of the Company's assets, without regard to financing methods, capital structure or historical cost basis and to assess the Company's ability to incur and service debt and fund capital expenditures.

TETRA only adjusted free cash flow is a non-GAAP measure that the Company defines as cash from TETRA's operations, excluding cash settlements of Maritech AROs, less capital expenditures net of sales proceeds, and including cash distributions to TETRA from CSI Compressco LP. Management uses this supplemental financial measure to:

  • assess the Company's ability to retire debt;
  • evaluate the capacity of the Company to further invest and grow; and
  • to measure the performance of the Company as compared to its peer group of companies.

TETRA only adjusted free cash flow does not necessarily imply residual cash flow available for discretionary expenditures, as it excludes cash requirements for debt service or other non-discretionary expenditures that are not deducted.

TETRA net debt is defined as the sum of long-term and short-term debt on its consolidated balance sheet, less cash, excluding restricted cash on the consolidated balance sheet and excluding the debt and cash of CSI Compressco LP. Management views TETRA net debt as a measure of TETRA's ability to reduce debt, add to cash balances, pay dividends, repurchase stock, and fund investing and financing activities.

Schedule E: Second Quarter Special Charges

 
 

Three Months Ended

 

June 30, 2016

 

Income 
(Loss) Before 
Tax

Provision 
(Benefit) for 
Tax

Noncont. 
Interest

Net Income 
Attributable to 
TETRA 
Stockholders

EPS

 

(In Thousands, Except per Share Amounts)

Income (loss) attributable to TETRA stockholders, excluding unusual charges and Maritech

$

(20,511)

 

$

(6,154)

 

$

(2,011)

 

$

(12,346)

 

$

(0.15)

 

Asset impairments and writeoffs

(365)

 

(109)

 

 

(256)

 

0.00

 

Severance expense

(595)

 

(179)

 

(170)

 

(246)

 

0.00

 

Debt refinancing cost

(2,582)

 

(775)

 

(469)

 

(1,338)

 

(0.02)

 

Effect of deferred tax valuation allowance and other related tax adj.

 

8,987

 

 

(8,987)

 

(0.11)

 

Maritech profit (loss)

(3,401)

 

 

 

(3,401)

 

(0.04)

 

Net income (loss) attributable to TETRA stockholders, as reported

$

(27,454)

 

$

1,770

 

$

(2,650)

 

$

(26,574)

 

$

(0.32)

 
           
 

March 31, 2016

 

Income 
(Loss) Before 
Tax

Provision 
(Benefit) 
for Tax

Noncont. 
Interest

Net Income 
Attributable to 
TETRA 
Stockholders

EPS

   

Income (loss) attributable to TETRA stockholders, excluding unusual charges and Maritech

$

(30,890)

 

$

(9,266)

 

$

(2,391)

 

$

(19,233)

 

$

(0.24)

 

Asset impairments and writeoffs

(10,670)

 

(3,201)

 

(4,465)

 

(3,004)

 

(0.04)

 

Severance expense

(755)

 

(226)

 

(138)

 

(391)

 

0.00

 

Goodwill writeoff

(106,205)

 

(31,862)

 

(52,412)

 

(21,931)

 

(0.28)

 

Effect of deferred tax valuation allowance and other related tax adj.

 

43,146

 

 

(43,146)

 

(0.54)

 

Maritech profit (loss)

(620)

 

 

 

(620)

 

(0.01)

 

Net Income (loss) attributable to TETRA stockholders, as reported

$

(149,140)

 

$

(1,409)

 

$

(59,406)

 

$

(88,325)

 

$

(1.11)

 
           
 

June 30, 2015

 

Income 
(Loss) Before 
Tax

Provision 
(Benefit) for 
Tax

Noncont. 
Interest

Net Income 
Attributable to 
TETRA 
Stockholders

EPS

           

Income (loss) attributable to TETRA stockholders, excluding unusual charges and Maritech

$

19,841

 

$

5,953

 

$

464

 

$

13,424

 

$

0.17

 

Severance expense

(320)

 

(96)

 

(22)

 

(202)

 

0.00

 

Allowance for bad debt

(1,100)

 

(330)

 

 

(770)

 

(0.01)

 

Effect of deferred tax valuation allowance and other related tax adj.

 

(2,786)

 

 

2,786

 

0.03

 

Maritech profit (loss)

(313)

 

 

 

(313)

 

0.00

 

Net Income (loss) attributable to TETRA stockholders, as reported

$

18,108

 

$

2,741

 

$

442

 

$

14,925

 

$

0.19

 
 

 

Schedule F: Non-GAAP Reconciliation to GAAP Financials

 
 

Three Months Ended

 

June 30, 2016

 

Income 
(Loss) 
Before Tax, 
as Reported

Impairments 
& Special 
Charges

Adjusted 
Income 
(Loss) 
Before Tax

Adjusted 
Interest 
Expense, 
Net(1)

Depreciation 

Amortization

Equity 
Comp. 
Expense

Adjusted 
EBITDA

 

(In Thousands)

Fluids Division

$

454

 

$

501

 

$

955

 

$

2

 

$

7,326

 

$

 

$

8,283

 

Production Testing Division

(4,328)

 

131

 

(4,197)

 

(143)

 

4,176

 

 

(164)

 

Compression Division

(4,040)

 

984

 

(3,056)

 

8,148

 

18,753

 

825

 

24,670

 

Offshore Services Segment

37

 

56

 

93

 

 

2,865

 

 

2,958

 

Eliminations and other

3

 

 

3

 

 

(3)

 

 

 

Subtotal

(7,874)

 

1,672

 

(6,202)

 

8,007

 

33,117

 

825

 

35,747

 

Corporate and other

(16,179)

 

1,870

 

(14,309)

 

5,596

 

112

 

5,803

 

(2,798)

 

TETRA excluding Maritech

(24,053)

 

3,542

 

(20,511)

 

13,603

 

33,229

 

6,628

 

32,949

 

Maritech

(3,401)

 

 

(3,401)

 

10

 

309

 

 

(3,082)

 

Total TETRA

$

(27,454)

 

$

3,542

 

$

(23,912)

 

$

13,613

 

$

33,538

 

$

6,628

 

$

29,867

 
               
 

March 31, 2016

 

Income 
(Loss) 
Before Tax, 
as Reported

Impairments 
& Special 
Charges

Adjusted 
Income 
(Loss) 
Before Tax

Adjusted 
Interest 
Expense, 
Net(1)

Depreciation 

Amortization

Equity 
Comp. 
Expense

Adjusted 
EBITDA

   

Fluids Division

$

(358)

 

$

114

 

$

(244)

 

$

(26)

 

$

7,396

 

$

 

$

7,126

 

Production Testing Division

(19,374)

 

17,073

 

(2,301)

 

(189)

 

4,592

 

 

2,102

 

Compression Division

(104,700)

 

100,443

 

(4,257)

 

8,802

 

18,464

 

636

 

23,645

 

Offshore Services Segment

(7,708)

 

 

(7,708)

 

 

2,739

 

 

(4,969)

 

Eliminations and other

4

 

 

4

 

 

(4)

 

 

 

Subtotal

(132,136)

 

117,630

 

(14,506)

 

8,587

 

33,187

 

636

 

27,904

 

Corporate and other

(16,384)

 

 

(16,384)

 

6,052

 

115

 

1,737

 

(8,480)

 

TETRA excluding Maritech

(148,520)

 

117,630

 

(30,890)

 

14,639

 

33,302

 

2,373

 

19,424

 

Maritech

(620)

 

 

(620)

 

 

305

 

 

(315)

 

Total TETRA

$

(149,140)

 

$

117,630

 

$

(31,510)

 

$

14,639

 

$

33,607

 

$

2,373

 

$

19,109

 
               
 

June 30, 2015

 

Income 
(Loss) 
Before Tax, 
as Reported

Impairments 
& Special 
Charges

Adjusted 
Income 
(Loss) 
Before Tax

Interest 
Expense, 
Net

Depreciation 

Amortization

Equity 
Comp. 
Expense

Adjusted 
EBITDA

               

Fluids Division

$

32,583

 

$

171

 

$

32,754

 

$

(76)

 

$

8,813

 

$

 

$

41,491

 

Production Testing Division

(472)

 

1,147

 

675

 

14

 

6,168

 

 

6,857

 

Compression Division

1,498

 

45

 

1,543

 

8,658

 

20,686

 

727

 

31,614

 

Offshore Services Segment

2,095

 

32

 

2,127

 

 

2,888

 

 

5,015

 

Eliminations and other

(12)

 

 

(12)

 

 

(3)

 

 

(15)

 

Subtotal

35,692

 

1,395

 

37,087

 

8,596

 

38,552

 

727

 

84,962

 

Corporate and other

(17,271)

 

25

 

(17,246)

 

4,697

 

255

 

1,874

 

(10,420)

 

TETRA excluding Maritech

18,421

 

1,420

 

19,841

 

13,293

 

38,807

 

2,601

 

74,542

 

Maritech

(313)

 

 

(313)

 

26

 

260

 

 

(27)

 

Total TETRA

$

18,108

 

$

1,420

 

$

19,528

 

$

13,319

 

$

39,067

 

$

2,601

 

$

74,515

 
 
   

(1)

Adjusted interest expense, net, for the three month period ended June 30, 2016, excludes $0.7 million of interest expense related to CCLP debt refinancing.

 

 

Schedule G: Non-GAAP Reconciliation to Free Cash Flow

 
 

Three Months Ended

 

June 30, 2016

 

March 31, 2016

 

June 30, 2015

 

(In Thousands)

Consolidated

         

Net cash provided by operating activities

$

8,336

   

$

25,261

   

$

54,347

 

ARO settlements

64

   

3,379

   

3,845

 

Capital expenditures, net of sales proceeds

(4,732)

   

(1,985)

   

(23,188)

 

Consolidated adjusted free cash flow

3,668

   

26,655

   

35,004

 
           

CSI Compressco LP

         

Net cash provided by operating activities

20,469

   

15,095

   

19,721

 

Capital expenditures, net of sales proceeds

(2,453)

   

(1,353)

   

(19,934)

 

  CSI Compressco free cash flow

18,016

   

13,742

   

(213)

 
           

TETRA Only

         

Cash from operating activities

(12,133)

   

10,166

   

34,626

 

ARO settlements

64

   

3,379

   

3,845

 

Capital expenditures, net of sales proceeds

(2,279)

   

(632)

   

(3,254)

 

Free cash flow before ARO settlements

(14,348)

   

12,913

   

35,217

 

Distributions from CSI Compressco LP

5,575

   

5,575

   

7,651

 

Adjusted free cash flow

(8,773)

   

18,488

   

42,868

 
 

 

Schedule H: Non-GAAP Reconciliation of TETRA Net Debt 

 

The cash and debt positions of TETRA and CSI Compressco LP as of June 30, 2016, are shown below. TETRA and CSI Compressco LP's debt agreements are distinct and separate with no cross default provisions, no cross collateral provisions and no cross guarantees. Management believes that the most appropriate method to analyze the debt positions of each company is to view them separately, as noted below.

 

The following reconciliation of net debt is presented as a supplement to financial results prepared in accordance with GAAP. The Company defines net debt as the sum of long-term and short-term debt on its consolidated balance sheet, less cash, excluding restricted cash on the consolidated balance sheet and excluding the debt and cash of CSI Compressco LP. Management views TETRA net debt as a measure of TETRA's ability to reduce debt, add to cash balances, pay dividends, repurchase stock, and fund investing and financing activities.

 
 
 

June 30, 2016

 

TETRA

 

CCLP

 

(In Millions)

Non-restricted cash

$

7.2

   

$

16.7

 
       

Revolver debt outstanding

101.6

   

231.2

 

Senior Notes outstanding

117.4

   

338.0

 

Net debt

$

211.8

   

$

552.5

 

 

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SOURCE TETRA Technologies, Inc.

Investor Contacts: TETRA Technologies, Inc., The Woodlands, Texas, Stuart M. Brightman, 281/367-1983, Fax: 281/364-4346, www.tetratec.com