TETRA Technologies, Inc. Announces Fourth Quarter And Full Year 2017 Results
THE WOODLANDS, Texas, Feb. 28, 2018 /PRNewswire/ -- TETRA Technologies, Inc. ("TETRA" or the "Company") (NYSE:TTI) announced consolidated fourth quarter 2017 net loss per share attributable to TETRA stockholders of $0.25, which compares to consolidated earnings of $0.03 per share attributable to TETRA stockholders in the third quarter of 2017 and net loss per share of $0.33 in the fourth quarter of 2016.
TETRA's adjusted per share results attributable to TETRA stockholders for the fourth quarter of 2017, excluding Maritech and special items, were a loss per share of $0.04, which compares to adjusted earnings per share of $0.04 in the third quarter of 2017 and adjusted loss of $0.16 in the fourth quarter of 2016, also excluding Maritech and special items. Fourth quarter 2017 revenue of $228 million increased 5% from the third quarter of 2017 and 31% from the fourth quarter of last year.
(Adjusted earnings/loss per share is a non-GAAP financial measure that is reconciled to the nearest GAAP measure in the accompanying schedules.)
Fourth Quarter 2017 Results
Three Months Ended
December 31, September 30, December 31,
2017 2017 2016
---- ---- ----
(In Thousands, Except per Share Amounts)
Revenue $227,644 $216,364 $173,222
Net income (loss) (34,974) (1,338) (38,410)
Net income (loss)
attributable to
TETRA
stockholders (28,739) 3,145 (31,554)
Adjusted EBITDA
excluding
Maritech(1) 30,197 45,054 14,946
EPS attributable
to TETRA
stockholders (0.25) 0.03 (0.33)
Adjusted diluted
EPS attributable
to TETRA
stockholders(1) (0.04) 0.04 (0.16)
Consolidated net
cash provided
(used) by
operating
activities 27,761 37,395 28,316
TETRA only
adjusted free
cash flow(1) $4,338 $17,818 $16,028
-------------- ------ ------- -------
(1) Non-GAAP financial
measures are reconciled to
GAAP in the schedules
below.
Highlights include:
-- Announced on February 14 an agreement to expand our Permian Basin water
management operations with the acquisition of SwiftWater Energy
Services. This acquisition is expected to be immediately accretive to
cash flow and EBITDA and we expect to close this transaction this week.
-- Announced additions to the executive team with the appointment on
February 12, 2018 of Brady Murphy as TETRA's President and Chief
Operating Officer and the appointment on November 20, 2017 of Owen
Serjeant as CSI Compressco's President. Our new executives will support
TETRA and CSI Compressco in their efforts to take advantage of a
recovering market.
-- Production Testing revenue doubled in the fourth quarter from the third
quarter, increasing to $37.8 million on the sale of an early production
facility and stronger US onshore shale related activity. Loss before tax
was $10.9 million, inclusive of a $14.6 million non-cash write-off of
intangible assets. Loss before tax was $10.9 million including an
impairment charge of $14.3 million for intangible assets. Excluding
unusual charges, adjusted EBITDA improved from $1.1 million in the third
quarter to $6.6 million in the fourth quarter, to 17.5% of revenue.
-- Fluids revenue of $79.8 million declined 14.5% from the third quarter,
as the fourth quarter included the final part of a significant CS
Neptune project that started in the third quarter. Profit before tax in
the fourth quarter was $7.6 million (9.5% of revenue), while adjusted
EBITDA was $13.6 million (17.1% of revenue). Water management revenue in
North America was the highest since the third quarter of 2014,
reflecting stronger fracking activity.
-- Compression Division revenues increased 16% from the third quarter,
reflecting higher new equipment sales and improved utilization of the
service compression fleet. Early in January, CSI Compressco secured a
$67 million order, the largest in the CSI Compressco's history, to
fabricate and sell 45 large compressors to a midstream operator in the
Permian Basin.
Total 2017 Results
Twelve months ended
December 31, December 31,
2017 2016
---- ----
(In Thousands, Except per Share
Amounts)
Revenue $820,378 $694,764
Net income
(loss) (62,183) (239,393)
Net income
(loss)
attributable
to TETRA
stockholders (39,048) (161,462)
Adjusted
EBITDA
excluding
Maritech(1) 121,941 104,243
EPS
attributable
to TETRA
stockholders (0.34) (1.85)
Adjusted
diluted
EPS
attributable
to TETRA
stockholders(1) (0.21) (0.60)
Consolidated
net cash
provided
(used) by
operating
activities 64,595 55,659
TETRA only
adjusted
free cash
flow(1) $14,399 $13,500
---------- ------- -------
(1) Non-GAAP financial
measures are reconciled to
GAAP in the schedules
below.
Stuart M. Brightman, TETRA's Chief Executive Officer, stated, "Over the past 90 days we have taken a series of actions to ensure we take advantage of a recovering market. We announced the acquisition of SwiftWater Energy Services to expand our Permian Basin water management operations and to add incremental resources and services offerings. We have also added two strong executives to the management team."
"We were pleased with our fourth quarter results, with consolidated adjusted EBITDA of $30.2 million and cash flow provided from operating activities of $27.8 million. We continue to see a strong rebound in the US North America shale plays that is driving better results for our services compression fleet for gathering systems, gas lift and aftermarket services; from water management and flowback testing reflecting the intensity of fracking operations, and from fluids to support stronger drilling activity."
"Fluids Division reported revenue of $79.8 million for the fourth quarter of 2017, up 24.7% from the same quarter of 2016. During the fourth quarter we completed a Gulf of Mexico CS Neptune(®) project that was started in the third quarter. We continue to advance work on securing the next CS Neptune completion fluids projects while working with several operators on the timing for projects in from multiple international markets. Our US onshore water management activity increased to its highest revenue levels since the third quarter of 2014. The addition of SwiftWater in the Permian Basin will make us one of the largest water management companies in that region and will significantly expand our headcount and water transfer capabilities, in addition to adding incremental service offerings. We expect to continue to invest growth capital in this area and look for additional acquisition opportunities to capitalize on the demands from our customers. Fluids Division profit before taxes was $7.6 million (9.5% of revenue), while adjusted EBITDA was $13.6 million (17.1% of revenue)."
"Fourth quarter 2017 Compression Division revenue increased 16% sequentially to $83 million. Overall utilization of our service fleet improved sequentially by 180 basis points to 82.3%. Utilization of our larger horsepower equipment (greater than 800 HP, which are typically deployed on gathering systems) was 92.3%, up from 90.1% at the end of the third quarter of 2017. New equipment orders were $16 million, resulting in a backlog of $47.5 million at the end of the year. In early January, we received an order to fabricate and sell 45 large horsepower compressors to a midstream operator in the Permian Basin. This order, the largest in CSI Compressco's history, is expected to be delivered in the second half of 2018 and the first half of 2019 and reflects increasing demand from the industry to build gathering systems and gas processing facilities. Compression Division loss before taxes was $9.7 million, compared to a loss of $7 million in the third quarter of 2017. Adjusted EBITDA was $19.2 million, compared to $20.9 million in the third quarter of 2017. On January 22, 2018, CSI Compressco LP declared a cash distribution attributable to the fourth quarter of 2017 of $0.1875 per outstanding common unit. The distribution coverage ratio was 0.73X for the fourth quarter of 2017."
"Fourth quarter 2017 revenue for the Production Testing Division doubled sequentially to $37.8 million, and was 147% above the same quarter of 2016, led by the sale of early production facilities overseas and significantly stronger activity in the US shale plays. Production Testing loss before taxes was $10.9 million (which includes a $14.6 million intangible asset impairment from our international operations), while adjusted EBITDA was $6.6 million (17.5% of revenue)."
"Our Offshore Services segment reported revenue of $27.5 million, up 130% compared to the prior year quarter, with a loss before taxes of $2.4 million. Adjusted EBITDA was $0.6 million, reflecting the seasonal fourth quarter ramp down of activity, inclement weather conditions and customer delays of certain projects into 2018."
Free Cash Flow and Balance Sheet
Consolidated net cash provided by operating activities for the fourth quarter of 2017 was $27.8 million, compared to $37.4 million in the third quarter of 2017. TETRA only adjusted free cash flow in the fourth quarter was $4.3 million, a decrease of $13.5 million from the third quarter. Consolidated debt was $629.9 million and TETRA only debt was $117.7 million. At the end of the fourth quarter, no amounts were outstanding on TETRA's revolving credit facility and TETRA only cash on hand was $18.5 million. With a strong balance sheet, TETRA is positioned to invest opportunistically into the recovering market.
Special items and Maritech
Special items, including Maritech, that were incurred in the fourth quarter, as detailed on Schedule E, include the following:
-- A non-cash expense of $14.6 million for the impairment of intangible
assets
-- A $6.3 million non-cash expense for a fair value adjustment of the
outstanding TETRA warrants
-- A $1.4 million non-cash expense for a fair value adjustment of the CSI
Compressco Series A Convertible Preferred units
-- A $1.6 million charge for transaction related expenses and other special
charges
-- A Maritech pre-tax loss of $0.5 million
Additionally, a normalized tax rate of 30% is reflected in Adjusted Net Income, as shown on Schedule E.
Conference Call
TETRA will host a conference call to discuss these results today, February 28, 2018, at 10:30 a.m. ET. The phone number for the call is 888-347-5303. The conference will also be available by live audio webcast and may be accessed through TETRA's website at www.tetratec.com. A replay of the conference call will be available at 1-877-344-7529, conference number 10115719, for one week following the conference call and the archived web call will be available through the Company's website for thirty days following the conference call.
Investor Contact
TETRA Technologies, Inc., The Woodlands, Texas
Stuart M. Brightman, 281-367-1983
Fax: 281-364-4346
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: Special Items
Schedule F: Non-GAAP Reconciliation to GAAP Financials
Schedule G: Non-GAAP Reconciliation to TETRA Only 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, frack flowback, production well testing, offshore rig cooling, offshore decommissioning and compression services and equipment. TETRA owns an equity interest, including all of the general partner interest, in CSI Compressco LP (NASDAQ:CCLP), a master limited partnership.
This news release includes certain statements that are deemed to be forward-looking statements. Generally, the use of words such as "may," "expect," "intend," "estimate," "projects," "anticipate," "believe," "assume," "could," "should," "plans," "targets" or similar expressions that convey the uncertainty of future events, activities, expectations or outcomes identify forward-looking statements that the Company intends to be included within the safe harbor protections provided by the federal securities laws. These forward-looking statements include statements concerning the anticipated recovery of the oil and gas industry, expected benefits from the acquisition of SwiftWater Energy Services and expected results of operational business segments for 2018, including levels of cash distributions per unit, projections concerning the Company's business activities, financial guidance, estimated earnings, earnings per share, and statements regarding the Company's beliefs, expectations, plans, goals, future events and performance, and other statements that are not purely historical. These forward-looking statements are based on certain assumptions and analyses made by the Company in light of its experience and its perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate in the circumstances. Such statements are subject to a number of risks and uncertainties, many of which are beyond the control of the Company. Investors are cautioned that any such statements are not guarantees of future performances or results and that actual results or developments may differ materially from those projected in the forward-looking statements. Some of the factors that could affect actual results are described in the section titled "Risk Factors" contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2016, 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 Twelve Months Ended
December 31, December 31,
2017 2016 2017 2016
---- ---- ---- ----
(In Thousands, Except per Share Amounts)
Revenues $227,644 $173,222 $820,378 $694,764
Cost of sales,
services, and
rentals 168,743 133,598 591,871 495,580
Depreciation,
amortization, and
accretion 28,861 30,598 116,159 129,595
Impairments of long-
lived assets 14,876 7,245 14,876 18,172
Insurance Recoveries - - (2,352) -
--- --- ------ ---
Total cost of
revenues 212,480 171,441 720,554 643,347
------- ------- ------- -------
Gross profit 15,164 1,781 99,824 51,417
General and
administrative
expense 31,009 26,583 121,905 115,964
Goodwill impairment - - - 106,205
Interest expense,
net 14,497 15,327 57,246 58,626
(Gain) loss on sales
of assets (69) (115) (674) (2,357)
Warrants fair value
adjustment 6,267 2,106 (5,301) 2,106
CCLP Series A
Preferred fair
value adjustment 1,365 (1,891) (2,975) 4,404
Litigation
arbitration award
expense (income),
net 37 - (10,027) -
Other (income)
expense, net 122 (2,318) 633 3,559
--- ------ --- -----
Loss before taxes (38,064) (37,911) (60,983) (237,090)
Provision (benefit)
for income taxes (3,090) 499 1,200 2,303
------ --- ----- -----
Net loss (34,974) (38,410) (62,183) (239,393)
Net (income) loss
attributable to
non-controlling
interest 6,235 6,856 23,135 77,931
----- ----- ------ ------
Net loss
attributable to
TETRA stockholders $(28,739) $(31,554) $(39,048) $(161,462)
======== ======== ======== =========
Basic per share
information:
---------------
Net loss
attributable to
TETRA stockholders $(0.25) $(0.33) $(0.34) $(1.85)
====== ====== ====== ======
Weighted average
shares outstanding 114,696 95,992 114,499 87,286
======= ====== ======= ======
Diluted per share
information:
-----------------
Net loss
attributable to
TETRA stockholders $(0.25) $(0.33) $(0.34) $(1.85)
====== ====== ====== ======
Weighted average
shares outstanding 114,696 95,992 114,499 87,286
======= ====== ======= ======
Schedule B: Financial Results By Segment (Unaudited)
---------------------------------------------------
Three Months Ended Twelve Months Ended
December 31, December 31,
2017 2016 2017 2016
---- ---- ---- ----
(In Thousands)
Revenues by segment:
--------------------
Fluids Division $79,848 $64,039 $335,331 $246,595
Production Testing
Division 37,766 15,298 94,142 63,618
Compression Division 83,105 82,870 295,587 311,374
Offshore Division
Offshore Services 27,451 11,921 96,741 77,525
Maritech 111 176 538 751
Intersegment
eliminations - (90) - (903)
--- --- --- ----
Offshore Division total 27,562 12,007 97,279 77,373
Eliminations and other (637) (992) (1,961) (4,196)
---- ---- ------ ------
Total revenues $227,644 $173,222 $820,378 $694,764
======== ======== ======== ========
Gross profit (loss) by
segment:
----------------------
Fluids Division $14,011 $7,443 $81,839 $36,888
Production Testing
Division (8,124) (5,263) (8,498) (13,317)
Compression Division 10,403 4,646 35,114 37,681
Offshore Division
Offshore Services (1,108) (4,811) (6,612) (5,574)
Maritech (279) (138) (1,954) (3,847)
Intersegment
eliminations 1 - 1 -
---
Offshore Division total (1,386) (4,949) (8,565) (9,421)
Corporate overhead and
eliminations 260 (96) (66) (414)
--- ---
Total gross profit $15,164 $1,781 $99,824 $51,417
======= ====== ======= =======
Income (loss) before
taxes by segment:
--------------------
Fluids Division $7,587 $1,499 $68,540 $10,430
Production Testing
Division (10,900) (7,547) (17,465) (35,471)
Compression Division (9,719) (11,821) (37,246) (136,327)
Offshore Division
Offshore Services (2,439) (6,233) (14,767) (12,025)
Maritech (474) 2,823 (2,172) (1,841)
Intersegment
eliminations - - - -
Offshore Division total (2,913) (3,410) (16,939) (13,866)
Corporate overhead and
eliminations (22,119) (16,632) (57,873) (61,856)
------- ------- ------- -------
Total loss before taxes $(38,064) $(37,911) $(60,983) $(237,090)
======== ======== ======== =========
Please note that the above results by Segment include special charges and expenses. Please see Schedule E for details of those special items.
Schedule C: Consolidated Balance Sheet (Unaudited)
-------------------------------------------------
December 31, 2017 December 31, 2016
----------------- -----------------
(In Thousands)
Balance Sheet:
--------------
Cash (excluding restricted
cash) $26,128 $29,840
Accounts receivable, net 172,977 114,284
Inventories 120,054 106,546
Other current assets 19,195 25,121
PP&E, net 895,305 945,451
Other assets 74,955 94,298
------ ------
Total assets $1,308,614 $1,315,540
========== ==========
Current portion of
decommissioning
liabilities $477 $1,451
Other current liabilities 172,237 115,434
Long-term debt (1) 629,855 623,730
Long-term portion of
decommissioning
liabilities 57,925 54,027
CCLP Series A Preferred 61,436 77,062
Warrant liability 13,202 18,503
Other long-term liabilities 19,921 24,867
Equity 352,561 400,466
------- -------
Total liabilities and
equity $1,308,614 $1,315,540
========== ==========
(1) Please see Schedule D for
the separate debt obligations
of TETRA and CSI Compressco LP.
Schedule D: Long-Term Debt
TETRA Technologies Inc. and its subsidiaries, other than CSI Compressco LP and its subsidiaries, are obligated under a bank credit agreement and senior note, 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.
December 31, December 31,
2017 2016
------------- -------------
(In Thousands)
TETRA
-----
Bank
revolving
line of
credit
facility $ - $3,229
TETRA 11%
Senior
Note 117,679 116,411
TETRA
total
debt 117,679 119,640
Less
current
portion - -
TETRA
total
long-
term debt $117,679 $119,640
-------- --------
CSI
Compressco
LP
-----------
CCLP Bank
Credit
Facility $223,985 $217,467
CCLP 7.25%
Senior
Notes 288,191 286,623
-------
CCLP total
debt 512,176 504,090
Less
current
portion - -
--- ---
CCLP total
long-
term debt $512,176 $504,090
-------- --------
Consolidated
total
long-
term debt $629,855 $623,730
======== ========
Non-GAAP Financial Measures
In addition to financial results determined in accordance with GAAP, this news 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; consolidated and segment adjusted EBITDA; and TETRA only 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 the segment's) income (loss) before taxes, excluding certain special or other charges (or credits). Adjusted income (loss) before taxes (and adjusted income (loss) before taxes as a percent of revenue) is used by management as a supplemental financial measure to assess financial performance, without regard to charges or credits that are considered by management to be outside of its normal operations.
Adjusted diluted earnings (loss) per share 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 (and Adjusted EBITDA as a percent of revenue) is defined as earnings before interest, taxes, depreciation, amortization, impairments and special charges or credits, equity compensation, and allocated corporate overhead charges to our CSI Compressco LP subsidiary, pursuant to our Omnibus Agreement, which were reimbursed with CSI Compressco LP common units. Adjusted EBITDA (and Adjusted EBITDA as a percent of revenue) is used by management as a supplemental financial measure to assess the financial performance of the Company's assets, without regard to financing methods, capital structure or historical cost basis and to assess the Company's ability to incur and service debt and fund capital expenditures.
TETRA only adjusted free cash flow is defined as cash from TETRA's operations, excluding cash settlements of Maritech AROs, less capital expenditures net of sales proceeds and cost of equipment sold, and including cash distributions to TETRA from CSI Compressco LP and debt restructuring costs. 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 the carrying value of long-term and short-term debt on its consolidated balance sheet, less cash, excluding restricted cash on the consolidated balance sheet and excluding the debt and cash of CSI Compressco LP. Management views TETRA net debt as a measure of TETRA's ability to reduce debt, add to cash balances, pay dividends, repurchase stock, and fund investing and financing activities.
Schedule E: Special Items, including Maritech
---------------------------------------------
Three Months Ended
------------------
December 31, 2017
Income Provision Noncont. Net Income EPS
(Loss) Before (Benefit) for Tax Interest Attributable to
Tax TETRA Stockholders
--- ------------------
(In Thousands, Except per Share Amounts)
Income (loss) attributable
to TETRA stockholders,
excluding unusual charges
and Maritech $(13,657) $(4,098) $(5,150) $(4,409) $(0.04)
Asset impairments,
including inventory
adjustments (14,784) (4,435) - (10,349) (0.09)
Severance expense (104) (31) - (73) 0.00
Stock Warrant Fair Value
Adjustment (6,266) (1,880) - (4,386) (0.04)
Bad debt expense from
customer bankruptcies (100) (30) - (70) 0.00
CCLP Series A Preferred
fair value adjustment (1,365) (410) (965) 10 0.00
Offshore Services
arbitration ruling (239) (72) - (167) 0.00
Software implementation (194) (58) (120) (16) 0.00
Transaction Costs (881) (264) - (617) (0.02)
Effect of Deferred Tax
Valuation Allowance and
other related tax adj. - 8,188 - (8,188) (0.08)
Maritech profit (loss) (474) - - (474) 0.00
---- --- --- ---- ----
Net Income (loss)
attributable to TETRA
stockholders, as reported $(38,064) $(3,090) $(6,235) $(28,739) $(0.25)
Three Months Ended
------------------
September 30, 2017
Income Provision Noncont. Interest Net Income Diluted EPS
(Loss) Before Tax (Benefit) for Tax Attributable
to TETRA
Stockholders
-------------
(In Thousands, Except per Share Amounts)
Income (loss) attributable
to TETRA stockholders,
excluding unusual charges
and Maritech $(204) $(60) $(4,934) $4,790 $0.04
Severance expense (24) (7) (5) (12) 0.00
Stock warrant fair value
adjustment 47 14 - 33 0.00
Convertible Series A
preferred offering cost
and fair value adjustments 1,137 341 827 (31) 0.00
Software Implementation (583) (175) (371) (37) 0.00
Effect of deferred tax
valuation allowance and
other related tax adj. - 684 - (684) (0.01)
Maritech profit (loss) (914) - - (914) (0.01)
---- --- --- ---- -----
Net Income (loss)
attributable to TETRA
stockholders, as reported $(541) $797 $(4,483) $3,145 $0.03
Three Months Ended
------------------
December 31, 2016
Income Provision Noncont. Interest Net Income EPS
(Loss) Before Tax (Benefit) for Tax Attributable to
TETRA Stockholders
------------------
(In Thousands, Except per Share Amounts)
Income (loss) attributable
to TETRA stockholders,
excluding unusual charges
and Maritech $(32,000) $(9,599) $(7,012) $(15,389) $(0.16)
Asset impairments,
including inventory
adjustments (7,245) (2,174) (1,373) (3,698) (0.04)
Non-Maritech ARO adjustment (282) (85) - (197) 0.00
Severance expense (179) (54) - (125) 0.00
Debt refinancing cost, net 346 104 319 (77) 0.00
Convertible Series A
Preferred offering cost
and fair value adjustments 1,806 542 1,210 54 0.00
Common stock warrants
issuance cost and fair
value adjustments (3,061) (918) - (2,143) (0.02)
Allowance for doubtful
accounts (119) (36) - (83) 0.00
Effect of deferred tax
valuation allowance and
other related tax adj. - 12,719 - (12,719) (0.14)
Maritech profit (loss) 2,823 - - 2,823 0.03
----- --- --- ----- ----
Net Income (loss)
attributable to TETRA
stockholders, as reported $(37,911) $499 $(6,856) $(31,554) $(0.33)
Twelve Months Ended
-------------------
December 31, 2017
Income Provision Noncont. Interest Net Income EPS
(Loss) (Benefit) for Attributable
Before Tax Tax to TETRA
Stockholders
---------- --- -------------
(In Thousands, Except per Share Amounts)
Income (loss) attributable
to TETRA stockholders,
excluding unusual charges
and Maritech $(57,533) $(17,261) $(16,237) $(24,035) $(0.21)
Asset impairments,
including inventory
adjustments (14,784) (4,435) - (10,349) (0.09)
Severance expense (1,126) (338) (38) (750) (0.01)
Stock Warrant Fair Value
Adjustment 5,302 1,591 - 3,711 0.03
Bad debt expense from
customer bankruptcies (543) (163) - (380) 0.00
CCLP Series A Preferred
fair value adjustment 2,975 893 (5,307) 7,389 0.06
Offshore Services
arbitration ruling (3,370) (1,011) - (2,359) (0.02)
Legal Award 12,879 3,864 - 9,015 0.08
Software implementation (974) (292) (1,553) 871 0.01
Transaction Costs (1,637) (491) - (1,146) (0.01)
Effect of Deferred Tax
Valuation Allowance and
other related tax adj - 18,843 - (18,843) (0.16)
Maritech profit (loss) (2,172) - - (2,172) (0.02)
------ --- --- ------ -----
Net Income (loss)
attributable to TETRA
stockholders, as reported $(60,983) $1,200 $(23,135) $(39,048) $(0.34)
Twelve Months Ended
-------------------
December 31, 2016
Income Provision Noncont. Net Income EPS
(Loss) (Benefit) for Interest Attributable
Before Tax Tax to TETRA
Stockholders
------------
(In Thousands, Except per Share Amounts)
Income (loss) attributable
to TETRA stockholders,
excluding unusual charges
and Maritech $(94,831) $(28,447) $(14,433) $(51,951) $(0.60)
Asset impairments,
including inventory
adjustments (18,280) (5,484) (5,838) (6,958) (0.08)
Non-Maritech ARO adjustment (282) (85) - (197) 0.00
Severance expense (1,737) (521) (341) (875) (0.01)
Goodwill write-off (106,205) (31,862) (52,412) (21,931) (0.25)
Debt refinancing cost, net (1,839) (552) 159 (1,446) (0.02)
Convertible Series A
Preferred offering cost
and fair value adjustments (7,534) (2,260) (4,650) (624) (0.01)
Common stock warrants
issuance cost and fair
value adjustments (3,061) (918) - (2,143) (0.02)
Allowance for doubtful
accounts (1,480) (444) (416) (620) (0.01)
Effect of deferred tax
valuation allowance and
other related tax adj. - 72,876 - (72,876) (0.83)
Maritech profit (loss) (1,841) - - (1,841) (0.02)
Net Income (loss)
attributable to TETRA
stockholders, as reported $(237,090) $2,303 $(77,931) $(161,462) $(1.85)
Schedule F: Non-GAAP Reconciliation to GAAP Financials
------------------------------------------------------
Three Months Ended
------------------
December 31, 2017
Net Tax Income Impairments Adjusted Adjusted Adjusted Equity Omnibus Equity Adjusted EBITDA
Income Provision (Loss) & Special Charges Income Interest
Expense, Depreciation Comp. Expense
(Loss), as
reported Before (Loss) Net &
Tax, as Before Amortization(2)
Reported Tax
-------- ---
(In Thousands)
Fluids Division $7,588 $183 $7,771 $(85) $5,935 $ - - $13,621
Production Testing
Division (10,900) 15,112 4,212 (3) 2,410 - - 6,619
Compression Division (9,719) 1,559 (8,160) 10,985 17,280 (934) - 19,171
Offshore Services
Segment (2,438) 256 (2,182) - 2,746 - - 564
Eliminations and
other 5 - 5 - (5) - - -
--- --- --- --- --- --- --- ---
Subtotal (15,464) 17,110 1,646 10,897 28,366 (934) - 39,975
Corporate and other (22,126) 7,147 (14,979) 3,600 182 1,419 - (9,778)
------- ----- ------- ----- --- ----- --- ------
TETRA excluding
Maritech (37,590) 24,257 (13,333) 14,497 28,548 485 - 30,197
Maritech (474) - (474) - 313 - (161)
---- --- ---- --- --- --- ----
Total TETRA $(34,974) $(3,090) $(38,064) $24,257 $(13,807) $14,497 $28,861 $485 $ - $30,036
Three Months Ended
------------------
September 30, 2017
Net Tax Income Impairments Adjusted Interest Adjusted Equity Omnibus Equity Adjusted EBITDA
Income Provision (Loss) & Special Charges Income Expense Depreciation Comp.
(Loss), Before (Loss) & Expense
Tax, as Before Amortization
as Reported Tax
reported
--------
(In Thousands)
Fluids Division $24,891 $12 $24,903 $(8) $5,937 $ - $ - $30,832
Production Testing
Division (1,405) - (1,405) (47) 2,518 - - 1,066
Compression Division (7,014) (545) (7,559) 10,811 17,361 261 - 20,874
Offshore Services
Segment 452 4 456 - 2,886 - - 3,342
Eliminations and
other - 2 2 (1) (4) - - (3)
--- --- --- --- --- --- --- ---
Subtotal 16,924 (527) 16,397 10,755 28,698 261 - 56,111
Corporate and other (16,551) (46) (16,597) 3,899 129 1,512 - (11,032)
------- --- ------- ----- --- ----- --- -------
TETRA excluding
Maritech 373 (573) (200) 14,654 28,827 1,773 - 45,079
Maritech (914) - (914) - 373 - - (541)
---- --- ---- --- --- --- --- ----
Total TETRA $(1,338) $797 $(541) $(573) $(1,114) $14,654 $29,200 $1,773 $ - $44,538
Three Months Ended
------------------
December 31, 2016
Net Tax Income Impairments Adjusted Adjusted Depreciation Adjusted Omnibus
Equity(3) Adjusted EBITDA
Income Provision (Loss) & Special Charges Income Interest
Expense, & Equity
(Loss), as
reported Before (Loss) Net(1) Amortization(2) Comp.
Tax, as Before Expense
Reported Tax
-------- ---
(In Thousands)
Fluids Division $1,499 $634 $2,133 $12 $6,460 $ - $ - $8,605
Production Testing
Division (7,547) 3,596 (3,951) (115) 3,579 - - (487)
Compression Division (11,821) (268) (12,089) 10,303 17,111 792 1,576 17,693
Offshore Services
Segment (6,233) 1,216 (5,017) - 2,689 - - (2,328)
Eliminations and
other 5 - 5 - (5) - - -
--- --- --- --- --- --- --- ---
Subtotal (24,097) 5,178 (18,919) 10,200 29,834 792 1,576 23,483
Corporate and other (16,637) 3,558 (13,079) 4,609 103 1,406 (1,576) (8,537)
------- ----- ------- ----- --- ----- ------ ------
TETRA excluding
Maritech (40,734) 8,736 (31,998) 14,809 29,937 2,198 - 14,946
Maritech 2,823 - 2,823 - 379 - - 3,202
----- --- ----- --- --- --- --- -----
Total TETRA $(38,410) $499 $(37,911) $8,736 $(29,175) $14,809 $30,316 $2,198 $ - $18,148
(1) Adjusted interest expense, net, for the three month period ended December 31, 2016, excludes $0.5
million of certain interest expense which is included as a special charge.
(2) Adjusted depreciation & amortization, net, for the three month period ended December 31, 2016 excludes $0.3 million of certain accretion expense which is included as a
special charge.
(3) Reimbursement from CCLP under Omnibus Agreement for 2016 Q4 that was settled with common units.
Twelve Months Ended
-------------------
December 31, 2017
Net Tax Income Impairment Adjusted Adjusted Adjusted Equity Omnibus Adjusted
Income Provision (Loss) & Special Charges Income Interest Depreciation &
Expense, Amortization(2) Comp. Equity (3) EBITDA
(Loss), as
reported Before (Loss) Net Expense
Tax, as Before
Reported Tax
-------- ---
(In Thousands)
Fluids Division $68,540 $(12,557) $55,983 $(53) $23,797 - - $79,727
Production Testing
Division (17,465) 15,382 (2,083) (296) 10,612 - - 8,233
Compression Division (37,246) (1,937) (39,183) 42,082 69,142 1,255 1,745 75,041
Offshore Services
Segment (14,767) 4,124 (10,643) - 10,678 - - 35
Eliminations and
other (152) - (152) - (19) - - (171)
---- --- ---- --- --- --- --- ----
Subtotal (1,090) 5,012 3,922 41,733 114,210 1,255 1,745 162,865
Corporate and other (57,721) (3,841) (61,562) 15,513 521 3,028 1,576 (40,924)
------- ------ ------- ------ --- ----- ----- -------
TETRA excluding
Maritech (58,811) 1,171 (57,640) 57,246 114,731 4,283 3,321 121,941
Maritech (2,172) - (2,172) - 1,428 - - (744)
------ --- ------ --- ----- --- --- ----
Total TETRA $(62,183) $1,200 $(60,983) $1,171 $(59,812) $57,246 $116,159 $4,283 $3,321 $121,197
Twelve Months Ended
-------------------
December 31, 2016
Net Tax Income Impairment Adjusted Adjusted Depreciation & Adjusted Omnibus
Amortization(2) Equity(3) Adjusted
Income Provision (Loss) & Special Charges Income Interest
Expense, Equity EBITDA
(Loss), as Before (Loss) Net(1) Comp.
reported Tax, as Before Expense
Reported Tax
-------- ---
(In Thousands)
Fluids Division $10,430 $1,950 $12,380 $(4) $28,056 $ - $ - $40,432
Production Testing
Division (35,471) 20,826 (14,645) (594) 16,238 - - 999
Compression Division (136,327) 111,656 (24,671) 37,016 72,159 3,028 1,576 89,108
Offshore Services
Segment (12,025) 1,283 (10,742) - 11,086 - - 344
Eliminations and
other 8 - 8 - (17) - - (10)
--- --- --- --- --- --- --- ---
Subtotal (173,385) 135,715 (37,670) 36,418 127,522 3,028 1,576 130,874
Corporate and other (61,864) 4,706 (57,158) 20,955 429 10,719 (1,576) (26,631)
------- ----- ------- ------ --- ------ ------ -------
TETRA excluding
Maritech (235,249) 140,421 (94,828) 57,373 127,751 13,747 - 104,243
Maritech (1,841) - (1,841) 12 1,362 - - (467)
------ --- ------ --- ----- --- --- ----
Total TETRA $(239,393) $2,303 $(237,090) $140,421 $(96,669) $57,385 $129,313 $13,747 $ - $103,776
(1) Adjusted interest expense, net, for the
twelve month period ended December 31,
2016, excludes $1.2 million of certain
interest expense which is included as
a special charge.
(2) Adjusted depreciation & amortization,
net, for the twelve month period ended
December 31, 2016 excludes $0.3
million of certain accretion expense
which is included as a special charge.
(3) Reimbursement from CCLP under Omnibus
Agreement for 2016 Q4 that was settled
with common units.
Schedule G: Non-GAAP Reconciliation to TETRA Only Adjusted Free Cash Flow
-------------------------------------------------------------------------
Three Months Ended Twelve Months Ended
December 31, December 31, December 31, December 31,
2017 2016 2017 2016
---- ---- ---- ----
(In Thousands)
Consolidated
Net cash provided by
operating activities $27,761 $28,316 $64,595 $55,659
ARO settlements 15 271 565 4,040
Capital expenditures,
net of sales proceeds (23,260) (5,268) (51,061) (17,712)
------- ------ ------- -------
Consolidated adjusted
free cash flow 4,516 23,319 14,099 41,987
CSI Compressco LP
Net cash provided by
operating activities 14,496 15,922 39,068 61,444
Capital expenditures,
net of sales proceeds (11,413) (3,057) (25,126) (10,659)
------- ------ ------- -------
CSI Compressco free
cash flow 3,083 12,865 13,942 50,785
TETRA Only
Cash from operating
activities(1) 13,265 12,394 27,559 (5,785)
ARO settlements 15 271 565 4,040
Capital expenditures,
net of sales
proceeds(1) (11,847) (2,211) (27,967) (7,053)
------- ------ ------- ------
Free cash flow before
ARO settlements 1,433 10,454 157 (8,798)
Distributions from CSI
Compressco LP 2,905 5,574 14,242 22,298
----- ----- ------ ------
Adjusted free cash
flow 4,338 16,028 14,399 13,500
(1) TETRA only cash from operating
activities and capital
expenditures, net of sales
proceeds, for the twelve months
ended December 31, 2017, includes
the elimination of an
intercompany equipment sale of
$2.0 million.
Schedule H: Non-GAAP Reconciliation of TETRA Net Debt
The cash and debt positions of TETRA and CSI Compressco LP as of December 31, 2017, are shown below. TETRA and CSI Compressco LP's credit and debt agreements are distinct and separate with no cross default provisions, no cross collateral provisions and no cross guarantees. Management believes that the most appropriate method to analyze the debt positions of each company is to view them separately, as noted below.
The following reconciliation of net debt is presented as a supplement to financial results prepared in accordance with GAAP.
December 31, 2017
TETRA CCLP Consolidated
----- ---- ------------
(In Millions)
Non-restricted
cash $18.5 $7.6 $26.1
Carrying value
of long-term
debt:
Revolver debt
outstanding - 224.0 224.0
Senior Notes
outstanding 117.7 288.2 405.9
----- ----- -----
Net debt $99.2 $504.6 $603.8
View original content with multimedia:http://www.prnewswire.com/news-releases/tetra-technologies-inc-announces-fourth-quarter-and-full-year-2017-results-300605580.html
SOURCE TETRA Technologies, Inc.
