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 |
• | Consolidated and Segment income before taxes, excluding the Company’s Maritech segment and unusual charges. 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 TETRA’s historical results of operations on a basis consistent with expected future operations. Management also believes that the exclusion of the unusual 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 EBITDA. Adjusted EBITDA is defined as adjusted earnings before interest, taxes, depreciation, amortization and equity compensation expenses. Adjusted EBITDA may be presented on a consolidated and segment basis. Management uses Adjusted EBITDA as a supplemental financial measure to assess the financial performance of the Company’s assets, without regard to financing methods, capital structure or cost basis, and to assess the Company’s ability to incur and service debt and fund capital expenditures. |
• | Net Debt. Net Debt is defined as the sum of long-term and short-term debt on the Company’s consolidated balance sheet less cash, excluding restricted cash on the consolidated balance sheet and excluding the debt and cash of CSI Compressco LP. Management believes that Net Debt provides information concerning the Company’s ability to reduce debt, add to cash balances, pay dividends, repurchase stock, and fund investing and financing activities. |
• | Free cash flow. Free cash flow is cash from operations, excluding cash settlements of Maritech’s asset retirement obligations, less capital expenditures. Management believes this is an important supplemental financial measure because it allows management to assess the Company’s ability to retire debt, evaluate the capacity to further invest and grow and determine the ability to pay dividends. |
Exhibit Number | Description | |
99.1 | Press Release, dated May 8, 2015, issued by TETRA Technologies, Inc. |
TETRA Technologies, Inc. | |
By: | /s/Stuart M. Brightman |
Stuart M. Brightman | |
President & Chief Executive Officer | |
Date: May 8, 2015 |
Exhibit Number | Description | |
99.1 | Press Release, dated May 8, 2015, issued by TETRA Technologies, Inc. |
• | Continued strength in the Fluids Division resulted in a sequential improvement in adjusted pretax margins. This was driven primarily by increased volumes of completion fluids sold both onshore and offshore in the Gulf of Mexico and internationally, and strong sales of chemical products. |
• | On April 21, 2015, CSI Compressco declared a quarterly distribution of $0.495 per outstanding unit. For additional information, please refer to CSI Compressco’s press release dated May 7, 2015. |
• | Payment of the $90 million Senior Notes that matured on April 30, 2015 with the proceeds of the $50 million Senior Secured Note issued to Wells Fargo on that day and a $40 million drawdown on our existing revolving line of credit. |
First Quarter 2015 Results, Excluding Unusual Charges and Maritech | |||||||||
Three Months Ended | Change | ||||||||
March 31, 2015 | March 31, 2014 | 2015 vs. 2014 | |||||||
(In Thousands, Except per Share Amounts) | |||||||||
Revenue | $ | 249,586 | $ | 211,481 | 18% | ||||
Income (loss) before taxes(1) | (2,078 | ) | (4,118 | ) | 50% | ||||
Net income attributable to TETRA shareholders(2) | (2,390 | ) | (3,515 | ) | 32% | ||||
Diluted EPS attributable to TETRA shareholders(3) | $ | (0.03 | ) | $ | (0.04 | ) | 25% | ||
Adjusted Pretax operating margin | (0.8 | )% | (1.9 | )% | 111 bps | ||||
Adjusted EBITDA | $ | 50,485 | $ | 25,443 | 98% |
(1) | Income before taxes, including unusual charges and Maritech was a loss of $(2.1) million in the first quarter of 2015 and a loss of $(10.7) million in the first quarter of 2014. |
(2) | Net income attributable to TETRA shareholders, including unusual charges and Maritech was a loss of $(4.4) million in the first quarter of 2015, and a loss of $(6.9) million in the first quarter of 2014. |
(3) | Diluted EPS, including unusual charges and Maritech was a loss of $(0.06) in the first quarter of 2015, and a loss of $(0.09) in the first quarter of 2014. See Schedules E and F for details. |
Segment Results | Three Months Ended | ||||||||||||||||||||||
March 31, 2015 | March 31, 2014 | ||||||||||||||||||||||
Revenue | Income Before Taxes(1) | Pretax Margin(2) | Adjusted EBITDA(3) | Revenue | Income Before Taxes(1) | Pretax Margin(2) | Adjusted EBITDA(3) | ||||||||||||||||
(In Thousands) | |||||||||||||||||||||||
Fluids Division | $ | 99,286 | $ | 17,849 | 18.0 | % | $ | 26,560 | $ | 105,145 | $ | 16,202 | 15.4 | % | $ | 24,028 | |||||||
Production Testing Division | 37,101 | 425 | 1.1 | % | 6,679 | 43,638 | (1,051 | ) | (2.4 | )% | 6,510 | ||||||||||||
Compression Division | 102,889 | 10,717 | 10.4 | % | 31,239 | 29,764 | 5,346 | 18.0 | % | 9,268 | |||||||||||||
Offshore Services segment | 11,783 | (8,638 | ) | N/M | (5,834 | ) | 35,330 | (7,938 | ) | N/M | (4,579 | ) | |||||||||||
Eliminations and other | (1,473 | ) | 3 | (0.2 | )% | — | (2,396 | ) | 3 | — | |||||||||||||
Subtotal | 249,586 | 20,356 | 8.2 | % | 58,644 | 211,481 | 12,562 | 5.9 | % | 35,227 | |||||||||||||
Corporate and other | — | (9,531 | ) | (8,159 | ) | — | (11,991 | ) | (9,784 | ) | |||||||||||||
Interest expense, net - Compression Division | — | (7,906 | ) | — | — | (159 | ) | — | |||||||||||||||
Interest expense, net - TTI, excluding Compression Division | — | (4,997 | ) | — | — | (4,531 | ) | — | |||||||||||||||
Unusual charges and Maritech(4) | 1,506 | 24 | — | 1,376 | (6,564 | ) | — | ||||||||||||||||
As reported | 251,092 | (2,054 | ) | (0.8 | )% | 50,485 | 212,857 | (10,683 | ) | (5.0 | )% | 25,443 |
(1) | Segment Income Before Taxes are adjusted. Refer to Schedule F for details. |
(2) | GAAP pre-tax margins for first quarter 2015 are: Fluids Division, 17.9%; Production Testing Division, 0.1%; Compression Division, 2.3%; and, Offshore Services segment, (73.4)%. GAAP pretax margins for first quarter 2014 are: Fluids Division, 17.6%; Production Testing Division, (6.4)%; Compression Division, 17.4%; and, Offshore Services segment, (22.6)%. Refer to Schedule B for GAAP amounts. |
(3) | Adjusted EBITDA is a non-GAAP financial measure that is defined and reconciled to the nearest GAAP financial measure in Schedule F. |
(4) | Refer to Schedule E for details. |
As of March 31, 2015 | |||||||
TETRA | CSI Compressco LP | ||||||
(In Millions) | |||||||
Non-restricted cash | $ | 9.0 | $ | 25.0 | |||
Revolver debt outstanding | 92.0 | 208.0 | |||||
Current portion of long-term debt | 90.0 | — | |||||
Senior Notes outstanding | 215.0 | 345.0 | |||||
Net debt | $ | 388.0 | $ | 528.0 |
Three Months Ended March 31, | |||||||
2015 | 2014 | ||||||
(In Thousands) | |||||||
Revenues | $ | 251,092 | $ | 212,857 | |||
Cost of sales, services, and rentals | 166,663 | 164,967 | |||||
Depreciation, amortization, and accretion | 38,342 | 23,040 | |||||
Total cost of revenues | 205,005 | 188,007 | |||||
Gross profit (loss) | 46,087 | 24,850 | |||||
General and administrative expense | 35,269 | 33,420 | |||||
Interest expense, net | 12,886 | 4,711 | |||||
Other (income) expense, net | (14 | ) | (2,598 | ) | |||
Income before taxes and discontinued operations | (2,054 | ) | (10,683 | ) | |||
Provision for income taxes | 1,568 | (4,593 | ) | ||||
Net income | (3,622 | ) | (6,090 | ) | |||
Net (income) loss attributable to noncontrolling interest | (825 | ) | (844 | ) | |||
Net income attributable to TETRA stockholders | $ | (4,447 | ) | $ | (6,934 | ) | |
Basic per share information: | |||||||
Net income (loss) attributable to TETRA stockholders | $ | (0.06 | ) | $ | (0.09 | ) | |
Weighted average shares outstanding | 78,907 | 78,306 | |||||
Diluted per share information: | |||||||
Net income (loss) attributable to TETRA stockholders | $ | (0.06 | ) | $ | (0.09 | ) | |
Weighted average shares outstanding | 78,907 | 78,306 |
Three Months Ended March 31, | |||||||
2015 | 2014 | ||||||
(In Thousands) | |||||||
Revenues by segment: | |||||||
Fluids Division | $ | 99,286 | $ | 105,145 | |||
Production Testing Division | 37,101 | 43,638 | |||||
Compression Division | 102,889 | 29,764 | |||||
Offshore Division | |||||||
Offshore Services | 11,783 | 35,330 | |||||
Maritech | 1,506 | 1,376 | |||||
Intersegment eliminations | (271 | ) | (1,787 | ) | |||
Offshore Division total | 13,018 | 34,919 | |||||
Eliminations and other | (1,202 | ) | (609 | ) | |||
Total revenues | $ | 251,092 | $ | 212,857 | |||
Gross profit (loss) by segment: | |||||||
Fluids Division | $ | 25,365 | $ | 24,392 | |||
Production Testing Division | 2,859 | 2,154 | |||||
Compression Division | 22,787 | 9,964 | |||||
Offshore Division | |||||||
Offshore Services | (5,970 | ) | (4,983 | ) | |||
Maritech | 1,299 | (6,126 | ) | ||||
Intersegment eliminations | — | — | |||||
Offshore Division total | (4,671 | ) | (11,109 | ) | |||
Corporate overhead and eliminations | (253 | ) | (554 | ) | |||
Total gross profit | $ | 46,087 | $ | 24,847 | |||
Income (loss) before taxes by segment: | |||||||
Fluids Division | $ | 17,736 | $ | 18,477 | |||
Production Testing Division | 39 | (2,798 | ) | ||||
Compression Division | 2,404 | 5,187 | |||||
Offshore Division | |||||||
Offshore Services | (8,648 | ) | (7,972 | ) | |||
Maritech | 975 | (6,539 | ) | ||||
Intersegment eliminations | — | — | |||||
Offshore Division total | (7,673 | ) | (14,511 | ) | |||
Corporate overhead and eliminations | (14,560 | ) | (17,038 | ) | |||
Total income (loss) before taxes | $ | (2,054 | ) | $ | (10,683 | ) |
March 31, 2015 | December 31, 2014 | ||||||
(In Thousands) | |||||||
Balance Sheet: | |||||||
Cash (excluding restricted cash) | $ | 34,516 | $ | 48,384 | |||
Accounts receivable, net | 191,378 | 227,053 | |||||
Inventories | 199,835 | 189,144 | |||||
Other current assets | 33,460 | 35,967 | |||||
PP&E, net | 1,132,086 | 1,124,623 | |||||
Other assets | 437,600 | 442,665 | |||||
Total assets | $ | 2,028,875 | $ | 2,067,836 | |||
Current portion of decommissioning liabilities | $ | 9,243 | $ | 12,758 | |||
Other current liabilities | 333,306 | 365,886 | |||||
Long-term debt | 859,785 | 844,961 | |||||
Long-term portion of decommissioning liabilities | 53,397 | 49,983 | |||||
Other long-term liabilities | 28,549 | 28,647 | |||||
Equity | 744,595 | 765,601 | |||||
Total liabilities and equity | $ | 2,028,875 | $ | 2,067,836 |
March 31, 2015 | December 31, 2014 | ||||||
(In Thousands) | |||||||
TETRA | |||||||
Bank revolving line of credit facility | $ | 91,700 | $ | 90,000 | |||
TETRA Senior Notes at various rates | 305,000 | 305,000 | |||||
Other debt | — | 74 | |||||
TETRA total debt | 396,700 | 395,074 | |||||
Less current portion | (90,000 | ) | (90,074 | ) | |||
TETRA total long-term debt | $ | 306,700 | $ | 305,000 | |||
CSI Compressco LP | |||||||
CCLP Bank Credit Facility | $ | 208,000 | $ | 195,000 | |||
CCLP 7.25% Senior Notes | 345,085 | 344,961 | |||||
CCLP total debt | 553,085 | 539,961 | |||||
Less current portion | — | — | |||||
CCLP total long-term debt | $ | 553,085 | $ | 539,961 | |||
Consolidated total long-term debt | $ | 859,785 | $ | 844,961 |
• | Assess the Company’s ability to retire debt; |
• | evaluate the capacity of the business to further invest and grow; |
• | to measure the performance of the Company as compared to its peer group of companies; and |
• | to determine the ability to pay dividends to shareholders. |
Three Months Ended | |||||||||||||||
March 31, 2015 | |||||||||||||||
Income Before Tax | Tax | Noncont. Interest | Net Income | Diluted EPS | |||||||||||
(In Thousands, Except per Share Amounts) | |||||||||||||||
Income attributable to TETRA stockholders, excluding unusual charges and Maritech | $ | (2,078 | ) | $ | (676 | ) | $ | 988 | $ | (2,390 | ) | $ | (0.03 | ) | |
Transaction related costs | (208 | ) | (78 | ) | (73 | ) | (57 | ) | — | ||||||
Severance expense | (743 | ) | (155 | ) | (90 | ) | (498 | ) | (0.01 | ) | |||||
Deferred tax valuation allowance and other related tax adj. | — | 2,477 | — | (2,477 | ) | (0.03 | ) | ||||||||
Maritech profit (loss) | 975 | — | — | 975 | 0.01 | ||||||||||
Net Income (loss) attributable to TETRA stockholders, as reported | $ | (2,054 | ) | $ | 1,568 | $ | 825 | $ | (4,447 | ) | $ | (0.06 | ) | ||
March 31, 2014 | |||||||||||||||
Income Before Tax | Tax | Noncont. Interest | Net Income | Diluted EPS | |||||||||||
Income attributable to TETRA stockholders, excluding unusual charges and Maritech | $ | (4,119 | ) | $ | (1,370 | ) | $ | 766 | $ | (3,515 | ) | $ | (0.04 | ) | |
Maritech profit (loss) | (6,539 | ) | (2,288 | ) | — | (4,251 | ) | (0.05 | ) | ||||||
Other | (25 | ) | (935 | ) | 78 | 832 | — | ||||||||
Net Income (loss) attributable to TETRA stockholders, as reported | $ | (10,683 | ) | $ | (4,593 | ) | $ | 844 | $ | (6,934 | ) | $ | (0.09 | ) |
Three Months Ended | ||||||||||||||||||||||||||||||
March 31, 2015 | ||||||||||||||||||||||||||||||
Net Income (Loss) Attributable to TETRA, as Reported | Non Controlling Interest | Tax Provision | Income (Loss) Before Tax, as Reported | Impairments & Unusual Charges | Adjusted Income Before Tax | Interest Expense, Net | Depreciation & Amortization | Stock Option Expense | Adjusted EBITDA | |||||||||||||||||||||
(In Thousands) | ||||||||||||||||||||||||||||||
Fluids Division | $ | 17,001 | $ | — | $ | 735 | $ | 17,736 | $ | 113 | $ | 17,849 | $ | (8 | ) | $ | 8,719 | $ | — | $ | 26,560 | |||||||||
Production Testing Division | (592 | ) | — | 631 | 39 | 386 | 425 | (9 | ) | 6,263 | — | 6,679 | ||||||||||||||||||
Compression Division | 990 | (825 | ) | 592 | 2,404 | 407 | 2,811 | 7,906 | 20,045 | 477 | 31,239 | |||||||||||||||||||
Offshore Services Segment | (8,711 | ) | — | 63 | (8,648 | ) | 10 | (8,638 | ) | — | 2,804 | — | (5,834 | ) | ||||||||||||||||
Eliminations and other | 3 | — | — | 3 | — | 3 | — | (3 | ) | — | — | |||||||||||||||||||
Subtotal | 8,691 | (825 | ) | 2,021 | 11,534 | 916 | 12,450 | 7,889 | 37,828 | 477 | 58,644 | |||||||||||||||||||
Corporate and other | (14,113 | ) | — | (453 | ) | (14,563 | ) | 35 | (14,528 | ) | 4,997 | 253 | 1,119 | (8,159 | ) | |||||||||||||||
TETRA excl Maritech | (5,422 | ) | (825 | ) | 1,568 | (3,029 | ) | 951 | (2,078 | ) | 12,886 | 38,081 | 1,596 | 50,485 | ||||||||||||||||
Maritech | 975 | — | — | 975 | — | 975 | — | 261 | — | 1,236 | ||||||||||||||||||||
Total TETRA | $ | (4,447 | ) | $ | (825 | ) | $ | 1,568 | $ | (2,054 | ) | $ | 951 | $ | (1,103 | ) | $ | 12,886 | $ | 38,342 | $ | 1,596 | $ | 51,721 | ||||||
March 31, 2014 | ||||||||||||||||||||||||||||||
Net Income (Loss) Attributable to TETRA, as Reported | Non Controlling Interest | Tax Provision | Income (Loss) Before Tax, as Reported | Impairments & Unusual Charges | Adjusted Income Before Tax | Interest Expense, Net | Depreciation & Amortization | Stock Option Expense | Adjusted EBITDA | |||||||||||||||||||||
Fluids Division | $ | 16,864 | $ | — | $ | 1,612 | $ | 18,477 | $ | (2,275 | ) | $ | 16,202 | $ | (4 | ) | $ | 7,830 | $ | — | $ | 24,028 | ||||||||
Production Testing Division | (4,302 | ) | — | 1,504 | (2,797 | ) | 1,747 | (1,050 | ) | (2 | ) | 7,563 | — | 6,511 | ||||||||||||||||
Compression Division | 3,708 | (844 | ) | 634 | 5,186 | — | 5,186 | 159 | 3,720 | 202 | 9,267 | |||||||||||||||||||
Offshore Services Segment | (8,261 | ) | — | 289 | (7,972 | ) | 34 | (7,938 | ) | 27 | 3,331 | — | (4,579 | ) | ||||||||||||||||
Eliminations and other | 3 | — | — | 3 | — | 3 | — | (3 | ) | — | — | |||||||||||||||||||
Subtotal | 8,013 | (844 | ) | 4,040 | 12,897 | (494 | ) | 12,403 | 181 | 22,442 | 202 | 32,557 | ||||||||||||||||||
Corporate and other | (10,695 | ) | — | (6,345 | ) | (17,041 | ) | 519 | (16,522 | ) | 4,531 | 554 | 1,652 | (9,785 | ) | |||||||||||||||
TETRA excl Maritech | (2,683 | ) | (844 | ) | (2,305 | ) | (4,144 | ) | 25 | (4,119 | ) | 4,711 | 22,996 | 1,854 | 25,442 | |||||||||||||||
Maritech | (4,250 | ) | — | (2,288 | ) | (6,539 | ) | — | (6,539 | ) | — | 44 | — | (6,495 | ) | |||||||||||||||
Total TETRA | $ | (6,933 | ) | $ | (844 | ) | $ | (4,593 | ) | $ | (10,683 | ) | $ | 25 | $ | 10,658 | $ | 4,711 | $ | 23,040 | $ | 1,854 | $ | 18,947 |
Three Months Ended | |||||||
March 31, 2015 | March 31, 2014 | ||||||
(In Thousands) | |||||||
TTI Consolidated | |||||||
Cash from operations | $ | 27,815 | $ | 36,070 | |||
ARO settlements | 566 | 13,307 | |||||
Capital expenditures, net of sales proceeds | (46,138 | ) | (24,836 | ) | |||
Free cash flow before ARO settlements | (17,757 | ) | 24,541 | ||||
CSI Compressco LP | |||||||
Cash from operations | 32,481 | 16,234 | |||||
Capital expenditures, net of sales proceeds | (37,158 | ) | (6,004 | ) | |||
Free cash flow | (4,677 | ) | 10,230 | ||||
TTI Only | |||||||
Cash from operations | (4,666 | ) | 19,836 | ||||
ARO settlements | 566 | 13,307 | |||||
Capital expenditures, net of sales proceeds | (8,980 | ) | (18,832 | ) | |||
Free cash flow before ARO settlements | (13,080 | ) | 14,311 | ||||
Distributions from CSI Compressco LP | (7,341 | ) | 5,719 | ||||
Free cash flow before ARO settlements and after distributions from CSI Compressco LP | $ | (5,739 | ) | $ | 20,030 |
March 31, 2015 | December 31, 2014 | ||||||
(In Thousands) | |||||||
TETRA Net Debt: | |||||||
Total debt, excluding CSI Compressco LP debt | $ | 396,700 | $ | 395,074 | |||
Less: cash, excluding CSI Compressco LP cash | (9,045 | ) | (14,318 | ) | |||
Net debt | $ | 387,655 | $ | 380,756 |