Close

Form 8-K TETRA TECHNOLOGIES INC For: Nov 07

FREE Breaking News Alerts from StreetInsider.com!

E-mail Address

StreetInsider.com Top Tickers, 4/25/2024

1. META
2. CMG
3. LRCX
4. IBM
5. SPY
6. HCP
7. BA
8. SNAP
9. TMUS
10. BSX


November 7, 2016 7:36 AM EST




UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549





FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of report (date of earliest event reported): November 7, 2016


TETRA Technologies, Inc.
(Exact name of registrant as specified in its charter)

Delaware
1-13455
74-2148293
(State or other jurisdiction
(Commission File Number)
(IRS Employer
of incorporation)
 
Identification No.)
 
 
 
24955 Interstate 45 North
The Woodlands, Texas 77380
(Address of Principal Executive Offices and Zip Code)
 
 
 
Registrant’s telephone number, including area code: (281) 367-1983


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))




Item 2.02. Results of Operations and Financial Condition.

On November 7, 2016, TETRA Technologies, Inc. (the “Company”) issued a press release announcing its financial results for the quarter ended September 30, 2016. The press release is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.

The information furnished in this Item 2.02 and in Exhibit 99.1 to this Current Report shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.
Exhibit Number
 
Description
99.1
 
Press Release dated November 7, 2016 issued by TETRA Technologies, Inc.


1



SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
TETRA Technologies, Inc.
 
 
By:
/s/Stuart M. Brightman
 
Stuart M. Brightman
 
President & Chief Executive Officer
Date: November 7, 2016
 




2




EXHIBIT INDEX

Exhibit Number
 
Description
99.1
 
Press Release dated November 7, 2016 issued by TETRA Technologies, Inc.







3


EXHIBIT 99.1
FOR IMMEDIATE RELEASE


TETRA TECHNOLOGIES, INC.
ANNOUNCES THIRD QUARTER 2016 RESULTS
AND UPDATES FINANCIAL GUIDANCE

The Woodlands, Texas (November 7, 2016) - TETRA Technologies, Inc. (NYSE: TTI) (TETRA or the Company) today announced a consolidated third quarter 2016 net loss per share attributable to TETRA stockholders of $0.16, which compares to a net loss per share of $0.32 in the second quarter of 2016 and earnings per share of $0.12 in the third quarter of 2015.

TETRA's adjusted per share results attributable to TETRA stockholders for the third quarter of 2016, excluding Maritech and other charges, were a loss of $0.05, which compares to adjusted loss per share of $0.15 in the second quarter of 2016 and adjusted earnings per share of $0.17 in the third quarter of 2015, also excluding Maritech and other charges. Third quarter 2016 revenue of $176.6 million increased by 1% sequentially and declined 42% from the third quarter of 2015 primarily as a result of lower 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.)

Third Quarter 2016 Results
 
Three Months Ended
 
September 30, 2016
 
June 30, 2016
 
September 30, 2015
 
(In Thousands, Except per Share Amounts)
Revenue
$
176,553

 
$
175,660

 
$
305,144

Net income (loss) attributable to TETRA stockholders
(15,009
)
 
(26,574
)
 
9,755

Adjusted EBITDA(1)
36,927

 
32,949

 
76,421

Diluted EPS attributable to TETRA stockholders
(0.16
)
 
(0.32
)
 
0.12

Adjusted diluted EPS attributable to TETRA stockholders(1)
(0.05
)
 
(0.15
)
 
0.17

Consolidated net cash provided (used) by operating activities
(7,933
)
 
8,336

 
36,065

TETRA only adjusted free cash flow(1)
$
(13,924
)
 
$
(8,773
)
 
$
30,176

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

Highlights of the 2016 third quarter include:

•
Fluids operating margin improved sequentially to 14.1% from 0.7%, with income before tax improving to $8.8 million. Adjusted EBITDA margins improved sequentially to 26.2% from 13.6%, with adjusted EBITDA doubling to $16.4 million.
•
Offshore Services operating margin improved sequentially to 6.4% from 0.1%, with income before tax improving to $1.9 million. Adjusted EBITDA margins improved sequentially to 16.0% from 11.3%, with adjusted EBITDA improving by 58% to $4.7 million.
•
Production Testing revenues increased sequentially by 13% driven by North America land activity. Production Testing loss before tax was reduced to $4.2 million while Adjusted EBITDA loss was $452,000.
•
Compression operating margin deteriorated sequentially to a loss of 22.3% from a loss of 5.3%, with loss before tax deteriorating to $15.8 million primarily due to expenses from the recent equity offering and a non-cash charge from a revaluation of the convertible preferred notes. Adjusted EBITDA margins of 32.7% improved sequentially by 30 basis points.
•
CSI Compressco completed a convertible preferred equity offering for a total of $80 million and further amended its credit facility leverage covenants (to 5.95X through June, 2018) to provide incremental financial flexibility to manage through this downturn, converting their credit facility to an asset-based facility and reducing the amount of the credit facility from $340 million to $315 million.




•
TETRA only adjusted free cash flow was a use of cash of $13.9 million as customers delayed payments into the fourth quarter.
(1)
Non-GAAP financial measures are reconciled to GAAP in the schedules below.

Stuart M. Brightman, TETRA's President and Chief Executive Officer, stated, “Despite a continued challenging market environment we saw sequential adjusted EBITDA margin improvements in Fluids, Compression and Offshore Services, reflecting our market position in each of these segments. We also experienced sequential revenue improvements in Production Testing (up 13%), Offshore Services (up 12%) and Fluids (up 3%). Our Fluids division executed one TETRA CS Neptune® deep water Gulf of Mexico project during the third quarter, and expects to start another in the fourth quarter. While we are seeing improvements in activity on the U.S. onshore side that are benefiting our production testing, calcium chloride sales, water management and wellhead compression, we believe the offshore markets will continue to be challenging.

“Our Fluids Division’s revenues for the third quarter of 2016 were $62.6 million compared to $60.8 million in the second quarter of 2016. The traditional seasonal decline in Northern Europe chemical sales was more than offset by a TETRA CS Neptune project in the Gulf of Mexico and a strong rebound of water management activity in U.S. onshore markets, mainly in the Permian and Midcontinent Basins. Sequentially, water management revenue improved significantly, as onshore completions activity continues to rebound in these areas. This mix resulted in adjusted EBITDA margins improving to 26.2% in the third quarter compared to 13.6% in the second quarter. Going into the end of this year and early into next year, our expectations for the Fluids Division are that we will see increasing activity in the onshore North America markets but weaker deep water Gulf of Mexico activity.

“Third quarter 2016 revenue for our Production Testing Division improved 13% over the second quarter led by stronger activity levels in North America land and Saudi Arabia with the North America improvements reflecting the higher rig count and completions activity. Adjusted EBITDA was a loss of $452,000 compared to an adjusted EBITDA loss of $164,000 in the second quarter reflecting continued pricing pressures. We expect going into next year that we will continue to see improving activity in North America land, mainly in the Permian Basin, and internationally in Saudi Arabia.

“For the third quarter of 2016 our Compression Division reported adjusted EBITDA of $23.1 million, at 32.7% of revenue, compared to the second quarter of $24.7 million, or 32.4% of revenue. Utilization was 75.2%, compared to 75.8% in the second quarter, as the rate of decline in utilization appears to be slowing down given stronger activity levels in the Permian Basin. On October 21, 2016, CSI Compressco LP declared a cash distribution attributable to the third quarter of 2016 of $0.3775 per common unit, unchanged from the distribution attributable to the second quarter of this year. This distribution resulted in a coverage ratio of 0.99x for the third quarter of 2016.

“Our Offshore Service segment reported adjusted EBITDA of $4.7 million, or 16.0% of revenue, a 58% sequential improvement of $1.7 million over the second quarter and reflecting the seasonal peak of decommissioning activity in the Gulf of Mexico. We expect the fourth quarter of this year and the first quarter of next year to be weaker reflecting the weakness in customer spend during this downturn and the seasonal low of this market."

Free Cash Flow and Balance Sheet

TETRA only adjusted free cash flow in the third quarter was a use of cash of $13.9 million primarily as a result of delayed payments by a significant customer at quarter-end (which has been subsequently collected). TETRA only day’s sales outstanding increased from 61 days at the end of the second quarter to 73 days at the end of September.

During the third quarter, CSI Compressco completed offerings of its Series A Convertible Preferred Units for an aggregate of $80 million. This $80 million is reflected as a liability for U.S. GAAP reporting purposes although it is considered equity for reporting compliance with CSI Compressco’s revolving credit agreement.

CSI Compressco announced on November 4, 2016 an additional amendment to its credit facility whereby, among other changes, the leverage covenant has been increased from 5.75X to 5.95X through June, 2018 and to 5.75X through December 31, 2018 and the credit facility was changed to an asset-based facility. The credit limit was also reduced to $315 million from $340 million.





Special Charges and Maritech

Maritech reported a pre-tax loss of $0.6 million in the third quarter of 2016.

Special charges were $10.5 million in the quarter, which included the following:

•
$9.3 million related to the recent offerings by CSI Compressco of its Series A Convertible Preferred units (transaction related expenses of $3.0 million and a non-cash charge of $6.3 million for a mark to market valuation of the related liability).
•
$1.4 million of bad debt expenses and increased bad debt reserves to reflect the deteriorating financial conditions of some of our customers.

Financial Guidance
    
The forecast for full year 2016 TETRA only adjusted free cash flow will be impacted by the timing of year-end collections from some large projects that will negatively impact working capital as these projects are being pushed towards the end of the quarter. Partially as a result of these potential deferred collections, total year projected free cash flow is expected to be between $5 million and $15 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 third quarter 2016 results today, November 7, 2016, 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.

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: 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 (NASDAQ: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 Compressco 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 Compressco 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 September 30,
 
Nine months ended September 30,
 
2016
 
2015
 
2016
 
2015
 
(In Thousands)
Revenues
$
176,553

 
$
305,144

 
$
521,542

 
$
872,555

 
 
 
 
 
 
 
 
Cost of sales, services, and rentals
115,948

 
195,701

 
361,982

 
569,755

Depreciation, amortization, and accretion
31,852

 
38,909

 
98,997

 
116,319

Impairments of long-lived assets
—

 
—

 
10,927

 
—

Total cost of revenues
147,800

 
234,610

 
471,906

 
686,074

Gross profit
28,753

 
70,534

 
49,636

 
186,481

 
 
 
 
 
 
 
 
General and administrative expense
28,589

 
40,910

 
89,381

 
113,651

Goodwill impairment
—

 
—

 
106,205

 
—

Interest expense, net
14,325

 
13,196

 
43,299

 
40,231

Other (income) expense, net
8,424

 
1,005

 
9,930

 
1,123

Income (loss) before taxes
(22,585
)
 
15,423

 
(199,179
)
 
31,476

Provision (benefit) for income taxes
1,443

 
4,687

 
1,804

 
8,997

Net income (loss)
(24,028
)
 
10,736

 
(200,983
)
 
22,479

Net (income) loss attributable to noncontrolling interest
9,019

 
(981
)
 
71,075

 
(2,247
)
Net income (loss) attributable to TETRA stockholders
$
(15,009
)
 
$
9,755

 
$
(129,908
)
 
$
20,232

 
 
 
 
 
 
 
 
Basic per share information:
 
 
 
 
 
 
 
Net income (loss) attributable to TETRA stockholders
$
(0.16
)
 
$
0.12

 
$
(1.53
)
 
$
0.26

Weighted average shares outstanding
91,746
 
79,219
 
85,093
 
79,098
 
 
 
 
 
 
 
 
Diluted per share information:
 
 
 
 
 
 
 
Net income (loss) attributable to TETRA stockholders
$
(0.16
)
 
$
0.12

 
$
(1.53
)
 
$
0.25

Weighted average shares outstanding
91,746

 
79,792
 
85,093
 
79,455




Schedule B: Financial Results By Segment (Unaudited)

 
Three Months Ended
September 30, 2016
 
Nine Months Ended
September 30, 2016
 
2016
 
2015
 
2016
 
2015
 
(In Thousands)
Revenues by segment:
 
 
 
 
 
 
 
Fluids Division
$
62,610

 
$
110,587

 
$
182,556

 
$
332,850

Production Testing Division
15,065

 
28,942

 
48,320

 
100,885

Compression Division
70,718

 
128,926

 
228,504

 
358,270

Offshore Division
 
 
 
 
 
 
 
Offshore Services
29,239

 
37,882

 
65,604

 
85,396

Maritech
238

 
475

 
575

 
2,375

Intersegment eliminations
(297
)
 
(429
)
 
(813
)
 
(3,609
)
Offshore Division total
29,180

 
37,928

 
65,366

 
84,162

Eliminations and other
(1,020
)
 
(1,239
)
 
(3,204
)
 
(3,612
)
Total revenues
$
176,553

 
$
305,144

 
$
521,542

 
$
872,555

 
 
 
 
 
 
 
 
Gross profit (loss) by segment:
 
 
 
 
 
 
 
Fluids Division
$
15,369

 
$
41,704

 
$
29,445

 
$
107,424

Production Testing Division
(2,032
)
 
926

 
(8,054
)
 
7,703

Compression Division
12,353

 
22,163

 
33,035

 
66,100

Offshore Division
 
 
 
 
 
 
 
Offshore Services
3,459

 
7,296

 
(763
)
 
6,017

Maritech
(297
)
 
(1,331
)
 
(3,709
)
 
(30
)
Intersegment eliminations
—

 
—

 
—

 
—

Offshore Division total
3,162

 
5,965

 
(4,472
)
 
5,987

Corporate overhead and eliminations
(99
)
 
(224
)
 
(318
)
 
(733
)
Total gross profit
$
28,753

 
$
70,534

 
$
49,636

 
$
186,481

 
 
 
 
 
 
 
 
Income (loss) before taxes by segment:
 
 
 
 
 
 
 
Fluids Division
$
8,835

 
$
33,215

 
$
8,931

 
$
83,535

Production Testing Division
(4,222
)
 
(4,528
)
 
(27,924
)
 
(4,961
)
Compression Division
(15,766
)
 
2,070

 
(124,506
)
 
5,974

Offshore Division
 

 
 
 
 
 
 
Offshore Services
1,879

 
4,576

 
(5,792
)
 
(1,977
)
Maritech
(643
)
 
(1,649
)
 
(4,664
)
 
(987
)
Intersegment eliminations
—

 
—

 
—

 
—

Offshore Division total
1,236

 
2,927

 
(10,456
)
 
(2,964
)
Corporate overhead and eliminations
(12,668
)
 
(18,261
)
 
(45,224
)
 
(50,108
)
Total income (loss) before taxes
$
(22,585
)
 
$
15,423

 
$
(199,179
)
 
$
31,476


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)
 
September 30, 2016
 
December 31, 2015
 
(In Thousands)
Balance Sheet:
 
 
 
Cash (excluding restricted cash)
$
22,210

 
$
23,057

Accounts receivable, net
120,175

 
184,172

Inventories
128,405

 
117,009

Other current assets
26,649

 
29,791

PP&E, net
977,455

 
1,048,004

Other assets
97,156

 
234,169

Total assets
$
1,372,050

 
$
1,636,202

 
 
 
 
Current portion of decommissioning liabilities
$
376

 
$
14,570

Other current liabilities
114,526

 
170,676

Long-term debt (1)
738,032

 
853,228

Long-term portion of decommissioning liabilities
54,962

 
42,879

CCLP Series A Preferred
77,018

 
—

Other long-term liabilities
29,902

 
40,669

Equity
357,234

 
514,180

Total liabilities and equity
$
1,372,050

 
$
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.
 
September 30, 2016
 
December 31, 2015
 
(In Thousands)
TETRA
 
 
 
Bank revolving line of credit facility
$
125,849

 
$
21,572

TETRA Senior Notes at various rates
116,492

 
264,998

Other debt
—

 
50

TETRA total debt
242,341

 
286,620

Less current portion
—

 
(50
)
TETRA total long-term debt
$
242,341

 
$
286,570

 
 
 
 
CSI Compressco LP
 
 
 
CCLP Bank Credit Facility
$
176,567

 
$
229,555

CCLP 7.25% Senior Notes
319,124

 
337,103

CCLP total debt
495,691

 
566,658

Less current portion
—

 
—

CCLP total long-term debt
$
495,691

 
$
566,658

Consolidated total long-term debt
$
738,032

 
$
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 (and Adjusted EBITDA as a percent of revenue) is defined as before interest, taxes, depreciation, amortization, impairments and special charges, and equity compensation. 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 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: Third Quarter Special Charges
 
Three Months Ended
 
September 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
$
(11,428
)
$
(3,428
)
$
(3,019
)
$
(4,981
)
$
(0.05
)
Severance expense
(210
)
(63
)
(33
)
(114
)
0.00

Debt refinancing gain on early retirement
397

119

309

(31
)
0.00

Allowance for doubtful accounts
(1,361
)
(408
)
(416
)
(537
)
(0.01
)
Equity related expenses
(9,340
)
(2,802
)
(5,860
)
(678
)
(0.01
)
Effect of deferred tax valuation allowance and other related tax adj.
—

8,025

—

(8,025
)
(0.09
)
Maritech profit (loss)
(643
)
—

—

(643
)
(0.01
)
Net Income (loss) attributable to TETRA stockholders, as reported
$
(22,585
)
$
1,443

$
(9,019
)
$
(15,009
)
$
(0.16
)
 
 
 
 
 
 
 
June 30, 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
$
(20,511
)
$
(6,154
)
$
(2,011
)
$
(12,346
)
$
(0.15
)
Asset impairments
(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
)
 
 
 
 
 
 
 
September 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
$
21,117

$
6,335

$
960

$
13,822

$
0.17

Severance expense
(375
)
(113
)
21

(283
)
0.00

Allowance for bad debt
(2,570
)
(771
)
—

(1,799
)
(0.02
)
Brazil VAT audit
(1,100
)
(330
)
—

(770
)
(0.01
)
Effect of deferred tax valuation allowance and other related tax adj.
—

(434
)
—

434

0.01

Maritech profit (loss)
(1,649
)
—

—

(1,649
)
(0.02
)
Net Income (loss) attributable to TETRA stockholders, as reported
$
15,423

$
4,687

$
981

$
9,755

$
0.12






Schedule F: Non-GAAP Reconciliation to GAAP Financials
 
Three Months Ended
 
September 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
$
8,835

$
701

$
9,536

$
8

$
6,873

$
—

$
16,417

Production Testing Division
(4,222
)
26

(4,196
)
(147
)
3,891

—

(452
)
Compression Division
(15,766
)
10,497

(5,269
)
9,763

17,830

774

23,098

Offshore Services Segment
1,879

11

1,890

—

2,793

—

4,683

Eliminations and other
(2
)
—

(2
)
—

(4
)
—

(6
)
Subtotal
(9,276
)
11,235

1,959

9,624

31,383

774

43,740

Corporate and other
(12,666
)
(721
)
(13,387
)
4,699

101

1,774

(6,813
)
TETRA excluding Maritech
(21,942
)
10,514

(11,428
)
14,323

31,484

2,548

36,927

Maritech
(643
)
—

(643
)
2

368

—

(273
)
Total TETRA
$
(22,585
)
$
10,514

$
(12,071
)
$
14,325

$
31,852

$
2,548

$
36,654

 
 
 
 
 
 
 
 
 
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
 
 
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

 
 
 
 
 
 
 
 
 
September 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
$
33,215

$
360

$
33,575

$
(15
)
$
8,735

$
—

$
42,295

Production Testing Division
(4,528
)
3,124

(1,404
)
4

5,999

—

4,599

Compression Division
2,070

43

2,113

8,897

20,648

455

32,113

Offshore Services Segment
4,576

507

5,083

—

2,879

—

7,962

Eliminations and other
5

—

5

—

(1
)
—

4

Subtotal
35,338

4,034

39,372

8,886

38,260

455

86,973

Corporate and other
(18,266
)
12

(18,255
)
4,310

230

3,163

(10,551
)
TETRA excluding Maritech
17,072

4,046

21,117

13,196

38,490

3,618

76,421

Maritech
(1,649
)
—

(1,649
)
—

419

—

(1,230
)
Total TETRA
$
15,423

$
4,046

$
19,468

$
13,196

$
38,909

$
3,618

$
75,191

(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 Adjusted Free Cash Flow
 
Three Months Ended
 
September 30, 2016
 
June 30, 2016
 
September 30, 2015
 
(In Thousands)
Consolidated
 
 
 
 
 
Net cash provided by operating activities
$
(7,933
)
 
$
8,336

 
$
36,065

ARO settlements
324

 
64

 
785

Capital expenditures, net of sales proceeds
(5,727
)
 
(4,732
)
 
(21,915
)
Consolidated adjusted free cash flow
(13,336
)
 
3,668

 
14,935

 
 
 
 
 
 
CSI Compressco LP
 
 
 
 
 
Net cash provided by operating activities
9,958

 
20,469

 
11,340

Capital expenditures, net of sales proceeds
(3,796
)
 
(2,453
)
 
(18,906
)
CSI Compressco free cash flow
6,162

 
18,016

 
(7,566
)
 
 
 
 
 
 
TETRA Only
 
 
 
 
 
Cash from operating activities
(17,891
)
 
(12,133
)
 
24,725

ARO settlements
324

 
64

 
785

Capital expenditures, net of sales proceeds
(1,931
)
 
(2,279
)
 
(3,009
)
Free cash flow before ARO settlements
(19,498
)
 
(14,348
)
 
22,501

Distributions from CSI Compressco LP
5,574

 
5,575

 
7,675

Adjusted free cash flow
(13,924
)
 
(8,773
)
 
30,176


Schedule H: Non-GAAP Reconciliation of TETRA Net Debt

The cash and debt positions of TETRA and CSI Compressco LP as of September 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.

 
September 30, 2016
 
TETRA
 
CCLP
 
Consolidated
 
(In Millions)
 
 
Non-restricted cash
$
8.8

 
$
13.4

 
$
22.2

 
 
 
 
 
 
Revolver debt outstanding
125.8

 
176.6

 
302.4

Senior Notes outstanding
116.5

 
319.1

 
435.6

Net Debt

$
233.5

 
$
482.3

 
$
715.8





Serious News for Serious Traders! Try StreetInsider.com Premium Free!

You May Also Be Interested In





Related Categories

SEC Filings