TETRA Technologies, Inc. Announces Strong Second Quarter Improvements in Revenue and Results
THE WOODLANDS, Texas, Aug. 8, 2019 /PRNewswire/ -- TETRA Technologies, Inc. ("TETRA") (NYSE:TTI) announced consolidated second quarter net loss before discontinued operations of $8.2 million, compared to $18.7 million in the first quarter of 2019 and $12.1 million in the same quarter of last year. Net loss per share before discontinued operations((1)) during the second quarter was $0.06 per share and compared to a net loss per share of $0.09 in the first quarter of this year and a net loss per share of $0.05 in the second quarter of 2018. Adjusted per share((2)) loss in the second quarter before discontinued operations and excluding special items, was a loss of $0.02 and compares to adjusted per share loss of $0.04 in the first quarter and adjusted earnings per share of $0.03 in the second quarter of 2018.
Brady M. Murphy, TETRA's Chief Executive Officer, stated, "I'm very pleased with our second quarter performance. We achieved sequential Adjusted EBITDA((2)) improvement across all three of our segments and record high gross margins and utilization for our compression services equipment since the acquisition of Compressor Systems, Inc. in 2014. In a challenging macro environment we exceeded $50 million of Adjusted EBITDA, the highest Adjusted EBITDA since the third quarter of 2015.
"Consolidated revenue was $289 million in the second quarter, increasing 18% sequentially and was up 11% year on year despite the North America land rig count declining 5% from the second quarter of last year. Adjusted EBITDA of $50 million was up 38% sequentially and 8% from the second quarter of last year.
"Our Completion Fluids & Products Division is experiencing high demand for our services and products in both the Gulf of Mexico and international offshore markets, with meaningful pricing improvements as reflected in our $14.6 million net income before taxes and 22.4% Adjusted EBITDA as a percent of revenue, which is up sequentially by 560 basis points. During the second quarter we signed a contract to provide TETRA CS Neptune® completion fluids for a deepwater Gulf of Mexico project, with the project expected to be completed towards the end of the third quarter. Furthermore, working with Halliburton and through some of our own initiatives we have been technically qualified or are in the process of qualifying TETRA CS Neptune® completion fluids with six major operators for future projects.
"Water & Flowback Services net income before taxes was $2.5 million. Adjusted EBITDA as a percent of revenue improved sequentially to 14.9% on slightly lower revenue from the first quarter of 2019, as we continue to focus on integrated projects utilizing our automation capabilities. We are also expanding our first large water treatment and recycling facility in the Permian Basin to be able to treat up to 100,000 barrels per day, up from current capacity of 60,000 barrels per day.
"Compression revenue increased sequentially on much higher new equipment shipments and stronger after-market services. Compression services gross margins and utilization were at record highs since the acquisition of Compressor Systems, Inc., driven by increased prices, higher utilization of equipment, cost actions and the deployment of new service equipment at much higher pricing. The overall fundamentals for the Compression business have not changed and the Compression segment remains one of the strongest segments in the industry."
Operating Segments
Completion Fluids & Products
Completion Fluids & Products revenue was $79.8 million in the second quarter of 2019, an increase of 30% from the first quarter of 2019 on stronger offshore fluids sales in the Gulf of Mexico and Eastern Hemisphere, in addition to the seasonally strong Northern Europe industrial chemicals business. Completion Fluids & Products income before taxes was $14.6 million, or 18.3% of revenue. Adjusted EBITDA of $17.9 million increased by $7.5 million sequentially and was 22.4% of revenue. The improvements also included a small amount of TETRA CS Neptune® completion fluids revenue.
Water and Flowback Services
Water & Flowback Services second quarter 2019 revenue decreased 7% sequentially to $73.1 million. Income before taxes was $2.5 million, or 3.4% of revenue. However, Adjusted EBITDA increased 8% sequentially to $10.9 million, despite the sequential revenue drop. Adjusted EBITDA as a percent of revenue improved to 14.9% in the second quarter of 2019 from 12.8% in the first quarter driven by our transition towards integrated projects with automation and a reduction in the first quarter transition costs from smaller independents to major operators. In addition to a ramp up in the recycling projects, we successfully launched our second generation sand cyclone equipment and technology during the second quarter, which is designed to achieve more than 85% sand recovery efficiency. Early results indicate that in some cases, we are able to achieve up to 95% sand recovery efficiencies with this technology. Our new automated de-sanding unit and technology is currently seeing good results in field trials and we expect to launch this technology shortly as well.
Compression
Second quarter Compression revenue increased 31% from the first quarter of 2019, to $136 million, and was 36% above the second quarter of last year. Compression services gross margins were 52.7%, up 450 basis points from the first quarter of 2019 and overall fleet utilization was 89.1%, both of which are the highest since the acquisition of Compressor System, Inc. As of June 30, 2019, total active operating horsepower was 1,029,045, a sequential improvement of over 11,500 horsepower. In the second quarter we also took an impairment charge to write-off 441 low horsepower GasJack units with a total of 20,286 horsepower, which we have decided to dispose. That impairment is reflected in our compression services fleet's horsepower and utilization metrics. Compression net loss before taxes was $3.5 million, an improvement from the net loss of $7.8 million in first quarter of 2019. Second quarter 2019 Adjusted EBITDA of $32.8 million increased 26% from the first quarter of 2019 primarily due to higher new equipment sales and aftermarket activity. We received new equipment orders of $18 million in the second quarter of 2019, up from $11 million in the first quarter of this year. New equipment sales backlog decreased to $60 million at June 30, 2019 from $94 million at the end of the previous quarter.
A summary of key financial metrics for the second quarter is as follows:
Second Quarter 2019 Results
Three Months Ended
June 30, March 31, June 30,
2019 2019 2018
(In Thousands, Except per Share Amounts)
Revenue $
288,796 $
243,728 $
260,072
Loss before
discontinued
operations (8,201) (18,674) (12,132)
Adjusted EBITDA
before
discontinued
operations (2) 50,084 36,331 46,285
GAAP EPS before
discontinued
operations
attributable to
TETRA
stockholders (0.06) (0.09) (0.05)
Adjusted EPS
attributable to
TETRA
stockholders (2) (0.02) (0.04) 0.03
GAAP net cash
provided (used)
by operating
activities 30,965 7,412 19,134
TETRA only
adjusted free
cash flow from
continuing
operations (2) $3,117 $
(34,920) $
18,018
---
(1) Refers to net loss per share before
discontinued operations
attributable to TETRA
stockholders.
(2) These financial measures are not in
accordance with generally accepted
accounting principles in the
United States ("GAAP"). Please see
Schedules E, F, G, H, I and J for
reconciliations of these non-GAAP
financial measures to the most
directly comparable GAAP measure.)
Free Cash Flow and Balance Sheet
Consolidated cash provided from operating activities for the second quarter was $31.0 million. TETRA only adjusted free cash flow from continuing operations in the second quarter was $3.1 million and compares to a use of cash of $34.9 million in first quarter of 2019 (see Schedules I and J for a reconciliation of these non-GAAP financial measures). We have historically consumed cash in the first quarter of the year and have generated cash in the second half of the year, reflecting the seasonality of some of our businesses. We continue to believe that TETRA only adjusted free cash flow from continuing operations will be positive for the full year and above last year's levels. Consolidated net debt was $830 million, while TETRA only net debt was $200 million (see Schedule H for a reconciliation of these non-GAAP financial measures). At the end of the second quarter of 2019, TETRA only non-restricted cash was $22 million.
Special items
Special items in the second quarter, including Discontinued Operations are detailed on Schedule F, and include the following:
-- $2.3 million non-cash expense related to an impairment of low horsepower
compression equipment to be disposed of
-- $1.8 million expense related to the retirement of our prior CEO
-- $1.5 million non-cash income for TETRA stock warrant fair value
adjustment
-- $0.5 million expense related to the cash redemption of CSI Compressco's
Series A Convertible Preferred Units
-- $0.4 million non-cash income for the fair value adjustment of the
SwiftWater earn-out obligation
-- $0.1 million non-cash expense for the fair value adjustment of CSI
Compressco's Series A Convertible Preferred Units
-- $0.2 million expense for other charges
Additionally, a normalized tax rate of 21% is reflected in Adjusted Net Income, as shown on Schedule F.
Conference Call
TETRA will host a conference call to discuss these results today, August 8, 2019, at 10:30 a.m. EST. The phone number for the call is 1-888-347-5303. 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 10127860, for one week following the conference call and the archived webcast call will be available through the Company's website for 30 days following the conference call.
Investor Contact
For further information: Elijio Serrano, CFO, TETRA Technologies, Inc., The Woodlands, Texas, Phone: 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: Statement Regarding Use of Non-GAAP Financial Measures
Schedule F: Special Items
Schedule G: Non-GAAP Reconciliation to GAAP Financials
Schedule H: Non-GAAP Reconciliation of TETRA Net Debt
Schedule I: Non-GAAP Reconciliation to TETRA Only Adjusted Free Cash Flow
Schedule J: Non-GAAP Reconciliation to TETRA Only 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, production well testing, 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," "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 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 2019, including levels of CSI Compressco's 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 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, June 30,
2019 2018 2019 2018
---
(In Thousands, Except per Share Amounts)
Revenues $
288,796 $
260,072 $
532,524 $
459,453
Cost of sales,
services, and rentals 206,302 183,292 383,046 328,249
Depreciation,
amortization, and
accretion 31,817 28,979 62,445 55,420
Impairments and other
charges 2,311 2,457
Total cost of revenues 240,430 212,271 447,948 383,669
Gross profit 48,366 47,801 84,576 75,784
General and
administrative
expense 36,295 33,617 70,572 64,420
Interest expense, net 18,529 18,379 36,908 33,352
Warrants fair value
adjustment (income)
expense (1,520) 2,195 (1,113) 201
CCLP Series A
Preferred Units fair
value adjustment
(income) expense 146 (512) 1,309 846
Other (income)
expense, net 627 3,808 (324) 6,584
Loss before taxes and
discontinued
operations (5,711) (9,686) (22,776) (29,619)
Provision for income
taxes 2,490 2,446 4,099 3,570
Loss before
discontinued
operations (8,201) (12,132) (26,875) (33,189)
Discontinued operations:
Loss from discontinued
operations (including
2018 loss on disposal
of $31.5 million),
net of taxes (345) (21) (771) (41,727)
Net loss (8,546) (12,153) (27,646) (74,916)
Less: loss
attributable to
noncontrolling
interest 1,633 6,188 9,895 15,303
Net loss attributable
to TETRA stockholders $
(6,913) $
(5,965) $
(17,751) $
(59,613)
Basic per share information:
---
Loss before
discontinued
operations
attributable to TETRA
stockholders $
(0.06) $
(0.05) $
(0.13) $
(0.14)
Loss from discontinued
operations
attributable to TETRA
stockholders $
0.00 $
0.00 $
(0.01) $
(0.33)
Net loss attributable
to TETRA stockholders $
(0.06) $
(0.05) $
(0.14) $
(0.47)
Weighted average
shares outstanding 125,612 122,474 125,646 125,553
===
Diluted per share information:
---
Loss before
discontinued
operations
attributable to TETRA
stockholders $
(0.06) $
(0.05) $
(0.13) $
(0.14)
Loss from discontinued
operations
attributable to TETRA
stockholders $
0.00 $
0.00 $
(0.01) $
(0.33)
Net loss attributable
to TETRA stockholders $
(0.06) $
(0.05) $
(0.14) $
(0.47)
Weighted average
shares outstanding 125,612 122,474 125,646 125,553
Schedule B: Financial Results By Segment (Unaudited)(1)
Three Months Ended Six Months Ended
June 30, June 30,
2019 2018 2019 2018
---
(In Thousands)
Revenues by segment:
---
Completion Fluids &
Products Division $
79,767 $
76,556 $
141,348 $
129,660
Water & Flowback
Services Division 73,124 83,646 151,802 144,721
Compression Division 135,905 99,924 239,374 185,346
Eliminations and
other - (54) (274)
Total revenues $
288,796 $
260,072 $
532,524 $
459,453
Gross profit (loss) by segment:
---
Completion Fluids &
Products Division $
19,809 $
14,396 $
30,472 $
21,082
Water & Flowback
Services Division 7,490 18,631 16,341 30,035
Compression Division 21,235 14,933 38,094 24,973
Corporate overhead
and eliminations (168) (159) (331) (306)
Total gross profit $
48,366 $
47,801 $
84,576 $
75,784
Income (loss) before taxes by segment:
---
Completion Fluids &
Products Division $
14,614 $
9,981 $
20,800 $
12,430
Water & Flowback
Services Division 2,460 8,311 4,691 14,859
Compression Division (3,483) (8,655) (11,284) (22,673)
Corporate overhead
and eliminations (19,302) (19,323) (36,983) (34,235)
Total income (loss)
before taxes $
(5,711) $
(9,686) $
(22,776) $
(29,619)
Please note that the above results by Segment include special charges and expenses. Please see Schedule F for details of those special charges and expenses.
(1) Excludes discontinued operations
Schedule C: Consolidated Balance Sheet (Unaudited)
June 30, 2019 December 31, 2018
---
(In Thousands)
Balance Sheet:
---
Cash (excluding
restricted cash) $
25,979 $
40,038
Accounts
receivable, net 195,424 187,592
Inventories 138,424 143,571
Assets of
discontinued
operations - 1,354
Note receivable,
including
accrued interest 7,627 7,544
Other current
assets 25,392 20,592
PP&E, net 860,435 853,931
Operating lease
right-of-use
assets 57,924
Other assets 127,981 130,905
Total assets $
1,439,186 $
1,385,527
Liabilities of
discontinued
operations $
2,510 $
4,145
Other current
liabilities 204,952 196,206
Long-term debt
(1) 856,482 815,560
Long-term
portion of asset
retirement
obligations 12,468 12,202
CCLP Series A
Preferred 7,894 27,019
Warrants
liability 960 2,073
Operating lease
liabilities 47,398
Other long-term
liabilities 11,831 15,573
Equity 294,691 312,749
Total liabilities
and equity $
1,439,186 $
1,385,527
(1) Please see Schedule D for the
individual debt obligations of
TETRA and CSI Compressco LP.
Schedule D: Long-Term Debt (Unaudited)
TETRA Technologies Inc. and its subsidiaries, other than CSI Compressco LP and its subsidiaries, are obligated under an asset-based bank credit agreement and term credit agreement, neither of which are obligations of CSI Compressco LP and its subsidiaries. CSI Compressco LP and its subsidiaries are obligated under a separate asset-based bank credit agreement and two series of senior notes, neither of which are obligations of TETRA and its other subsidiaries. Amounts presented are net of deferred financing costs.
June 30, 2019 December 31, 2018
(In Thousands)
TETRA
---
Asset-Based Credit
Agreement $
18,507
$
Term Credit Agreement 203,602 182,547
TETRA total debt 222,109 182,547
Less current portion
TETRA total long-
term debt $
222,109 $
182,547
CSI Compressco LP
---
CCLP Credit Agreement
7.25% Senior Notes 290,615 289,797
7.50% Senior Secured
Notes 343,758 343,216
Total debt 634,373 633,013
Less current portion
CCLP total long-term
debt $
634,373 $
633,013
Consolidated total
long-term debt $
856,482 $
815,560
Schedule E: Statement Regarding Use of Non-GAAP Financial Measures
In addition to financial results determined in accordance with 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 and special charges; adjusted diluted earnings (loss) per share before discontinued operations; consolidated and segment adjusted EBITDA; and TETRA only adjusted free cash flow and TETRA only free cash flow from continuing operations; and segment adjusted EBITDA as a percent of revenue. 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 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 before discontinued operations 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 before discontinued operations (and Adjusted EBITDA before discontinued operations as a percent of revenue) is defined as earnings before interest, taxes, depreciation, amortization, impairments and certain non-cash charges and non-recurring adjustments. Adjusted EBITDA before discontinued operations (and Adjusted EBITDA before discontinued operations 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 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 cost of equipment sold, and including cash distributions to TETRA from CSI Compressco LP. TETRA only adjusted free cash flow from continuing operations is defined as TETRA only adjusted free cash flow less discontinued operations EBITDA and discontinued operations capital expenditures. 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.
TETRA only adjusted free cash flow and TETRA only 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.
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 F: Special Items (Unaudited)
Three Months Ended
June 30, 2019
IncCome (loss) Provision Noncont. Net Income Diluted EPS
before taxes (Benefit) for Interest Attributable
and Tax to TETRA
discontinued Stockholders
operations
(In Thousands, Except per Share Amounts)
Income (loss)
attributable to TETRA
stockholders,
excluding special
items and discontinued
operations $
(2,545) $
(530) $
(11) $
(2,004) $
(0.02)
Stock Warrant fair
value adjustment 1,520 319 1,201 0.01
Convertible Series A
preferred fair value
adjustments (146) (35) (74) (37) (0.00)
5% Cash Redemption on
CCLP Series A
Preferred (546) (115) (278) (153) (0.00)
SwiftWater Earnout
adjustment 400 84 316 0.00
Lee Plant Facility
Vandalism 289 61 228 0.00
CEO Retirement (1,843) (387) (1,456) (0.01)
Transaction Expense (376) (79) (168) (129) (0.00)
Inventory Adjustment (153) (32) (68) (53) (0.00)
Impairments and other
charges (2,311) (485) (1,034) (792) (0.01)
Effect of deferred tax
valuation allowance
and other related tax
adjustments 3,689 (3,689) (0.03)
Net income (loss)
before discontinued
operations (5,711) 2,490 (1,633) (6,568) (0.06)
Loss from discontinued
operations (345) 0.00
Net Income (loss)
attributable to TETRA
stockholders, as
reported $
(6,913) $
(0.06)
Three Months Ended
March 31, 2019
Income (loss) Provision Noncont. Net Income Diluted EPS
before taxes (Benefit) for Interest Attributable
and Tax to TETRA
discontinued Stockholders
operations
(In Thousands, Except per Share Amounts)
Income (loss)
attributable to TETRA
stockholders,
excluding special
items and discontinued
operations $
(14,841) $
(3,324) $
(6,472) $
(5,045) $
(0.04)
Stock Warrant fair
value adjustment (407) (85) (322) 0.00
Convertible Series A
preferred fair value
adjustments (1,163) (244) (1,333) 414 0.00
5% Cash Redemption on
CCLP Series A
Preferred (372) (78) (457) 163 0.00
SwiftWater Earnout
adjustment 400 84 316 0.00
Lee Plant Facility
Vandalism (536) (113) (423) 0.00
Impairments and other
charges (146) (31) (115) 0.00
Effect of deferred tax
valuation allowance
and other related tax
adjustments 5,400 (5,400) (0.04)
Net income (loss)
before discontinued
operations (17,065) 1,609 (8,262) (10,412) (0.09)
Loss from discontinued
operations (426) (0.00)
Net Income (loss)
attributable to TETRA
stockholders, as
reported $
(10,838) $
(0.09)
Three Months Ended
June 30, 2018
Income (loss) Provision Noncont. Net Income Diluted EPS
before taxes (Benefit) for Interest Attributable
and Tax to TETRA
discontinued Stockholders
operations
(In Thousands, Except per Share Amounts)
Income (loss)
attributable to TETRA
stockholders,
excluding unusual
charges $
(3,620) $
(343) $
(6,593) $
3,316 $
0.03
Severance expense (43) (9) (9) (25) 0.00
Stock warrant fair
value adjustment (2,195) (461) (1,734) (0.01)
Convertible Series A
preferred fair value
adjustments 512 108 414 (10) 0.00
Transaction costs (40) (8) (32) 0.00
SwiftWater Earnout
Adjustment (4,300) (903) (3,397) (0.03)
Effect of deferred tax
valuation allowance
and other related tax
adjustments 4,062 (4,062) (0.03)
Net income (loss)
before discontinued
operations (9,686) 2,446 (6,188) (5,944) (0.05)
Loss from Discontinued
Operations (21) 0.00
Net Income (loss)
attributable to TETRA
stockholders, as
reported (5,965) $
(0.05)
()
Schedule G: Non-GAAP Reconciliation to GAAP Financials (Unaudited)
*
Three Months Ended
June 30, 2019
Net Income
Tax
Income Impairments Adjusted Adjusted Adjusted Equity Adjusted
(Loss), Provision (Loss) & Special Income Interest Depreciation Comp. EBITDA
as Before Charges (Loss) Expense, & Expense
reported Tax, as Before Net Amortization
Reported Tax
---
(In Thousands)
Completion Fluids & Products Division $
14,614 $
(289) $
14,325 $
(157) $
3,723
$ $
17,891
Water & Flowback Services Division 2,460 (400) 2,060 (8) 8,871 10,923
Compression Division (3,483) 3,607 124 12,998 19,054 590 32,766
Eliminations and other 1 1 (3) (2)
Subtotal 13,592 2,918 16,510 12,833 31,645 590 61,578
Corporate and other (19,303) 268 (19,035) 5,696 172 1,673 (11,494)
TETRA excluding
Discontinued Operations $
(8,201) $
2,490 $
(5,711) $
3,186 $
(2,525) $
18,529 $
31,817 $
2,263 $
50,084
March 31, 2019
Net
Tax
Income Impairments Adjusted Interest Adjusted Equity Adjusted
Income Provision (Loss) & Special Income Expense Depreciation Comp. EBITDA
(Loss), Before Charges (Loss) & Expense
as Tax, as Before Amortization
reported Reported Tax
---
(In Thousands)
Completion Fluids & Products Division $
6,186 $
683 $
6,869 $
(179) $
3,665
$ $
10,355
Water & Flowback Services Division 2,231 (400) 1,831 4 8,267 10,102
Compression Division (7,801) 1,610 (6,191) 13,213 18,532 365 25,919
Eliminations and other 6 6 (1) (4) 1
Subtotal 622 1,893 2,515 13,037 30,460 365 46,377
Corporate and other (17,687) 331 (17,356) 5,342 168 1,800 (10,046)
TETRA excluding
Discontinued Operations $
(18,674) $
1,609 $
(17,065) $
2,224 $
(14,841) $
18,379 $
30,628 $
2,165 $
36,331
Three Months Ended
June 30, 2018
Net
Tax Income Impairments Adjusted Interest Adjusted Equity Adjusted
Income Provision (Loss) & Special Charges Income Expense Depreciation & Comp. EBITDA
(Loss), Before (Loss) Amortization Expense
as Tax, as Before
reported Reported Tax
(In Thousands)
Completion Fluids &
Products Division $
9,981
$ $
9,981 $
(131) $
3,875
$ $
13,725
Water & Flowback
Services Division 8,311 4,330 12,641 (1) 7,497 20,137
Compression Division (8,655) (499) (9,154) 13,634 17,448 496 22,424
Eliminations and other 4 4 (5) (1)
Subtotal 9,641 3,831 13,472 13,502 28,815 496 56,285
Corporate and other (19,327) 2,236 (17,091) 4,877 164 2,050 (10,000)
TETRA excluding
Discontinued Operations $
(12,132) $
2,446 $
(9,686) $
6,067 $
(3,619) $
18,379 $
28,979 $
2,546 $
46,285
*Excludes the impact from
discontinued operations.
Schedule H: Non-GAAP Reconciliation of TETRA Net Debt (Unaudited)
The cash and debt positions of TETRA and CSI Compressco LP as of June 30, 2019, 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.
June 30, 2019
TETRA CCLP Consolidated
(In Millions)
Non-restricted cash $
21.7 $
4.3 $
26.0
Carrying value of long-term debt:
Asset-Based Credit Agreement 18.5 18.5
Term Credit Agreement 203.6 203.6
Senior Notes outstanding 634.4 634.4
Net debt $
200.4 $
630.1 $
830.5
()
Schedule I: Non-GAAP Reconciliation to TETRA Only Adjusted Free Cash Flow (Unaudited)
*
Three Months Ended
June 30, 2019 March 31, 2019 June 30, 2018
---
(In Thousands)
Consolidated
Net cash provided
(used) by operating
activities $
30,965 $
7,412 $
19,134
ARO settlements -
Capital expenditures,
net of sales proceeds (27,345) (32,045) (38,318)
Consolidated adjusted
free cash flow $
3,620 $
(24,633) $
(19,184)
CSI Compressco LP
Net cash provided
(used) by operating
activities $
8,710 $
31,632 $
(3,908)
Capital expenditures,
net of sales proceeds (16,434) (23,152) (30,223)
CSI Compressco free
cash flow $
(7,724) $
8,480 $
(34,131)
TETRA Only
Cash from operating
activities $
22,255 $
(24,220) $
23,042
ARO settlements -
Investment in CCLP
Compressors (8,740) (2,402)
Capital expenditures,
net of sales proceeds (10,911) (8,893) (8,095)
Free cash flow before
ARO settlements 2,604 (35,515) 14,947
Distributions from CSI
Compressco LP 168 169 2,992
Adjusted TETRA only
free cash flow $
2,772 $
(35,346) $
17,939
*Includes the impact from
discontinued operations. See
schedule J to exclude the
impact from discontinued
operations.
Schedule J: Non-GAAP Reconciliation to TETRA Only Adjusted Free Cash Flow From Continuing Operations (Unaudited)
Three Months Ended
Jun 30, 2019 Mar 31, 2019 Jun 30, 2018
---
(In Thousands)
TETRA Only
Cash from operating activities $22,255 $(24,220) $23,042
Less: Discontinued operations operating activities (adjusted EBITDA) (345) (426) (21)
Cash from continued operating activities 22,600 (23,794) 23,063
Less: Continuing operations capital expenditures (10,911) (8,893) (8,037)
Less: Investment in CCLP Compressors (8,740) (2,402)
__
Plus: Distributions from CSI Compressco LP 168 169 2,992
TETRA only adjusted free cash flow from continuing operations $3,117 $(34,920) $18,018
---
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SOURCE TETRA Technologies, Inc.
