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 adjusted income before taxes, excluding the Company’s Maritech segment and special 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 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 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. |
• | Adjusted free cash flow. Adjusted free cash flow is cash from operations, excluding cash settlements of Maritech’s asset retirement obligations, less capital expenditures net of sales proceeds, and including cash distributions to TETRA from CSI Compressco LP. Management believes this is an important supplemental financial measure because it allows management to assess the Company’s ability to retire debt, and evaluate the capacity to further invest and grow. |
Exhibit Number | Description | |
99.1 | Press Release, dated August 8, 2016, issued by TETRA Technologies, Inc. |
TETRA Technologies, Inc. | |
By: | /s/Stuart M. Brightman |
Stuart M. Brightman | |
President & Chief Executive Officer | |
Date: August 8, 2016 |
Exhibit Number | Description | |
99.1 | Press Release, dated August 8, 2016, issued by TETRA Technologies, Inc. |
Second Quarter 2016 Results | |||||||||||
Three Months Ended | |||||||||||
June 30, 2016 | March 31, 2016 | June 30, 2015 | |||||||||
(In Thousands, Except per Share Amounts) | |||||||||||
Revenue | $ | 175,660 | $ | 169,329 | $ | 316,319 | |||||
Net income (loss) attributable to TETRA stockholders | (26,574 | ) | (88,325 | ) | 14,925 | ||||||
Adjusted EBITDA(1) | 32,949 | 19,424 | 74,542 | ||||||||
Diluted EPS attributable to TETRA stockholders | (0.32 | ) | (1.11 | ) | 0.19 | ||||||
Adjusted diluted EPS attributable to TETRA stockholders(1) | (0.15 | ) | (0.24 | ) | 0.17 | ||||||
Consolidated net cash provided by operating activities | 8,336 | 25,261 | 54,347 | ||||||||
TETRA only adjusted free cash flow(1) | $ | (8,773 | ) | $ | 18,488 | $ | 42,868 |
(1) | Non-GAAP financial measures are reconciled to GAAP in the schedules below. |
• | Completion of public equity offering, raising $60 million in net proceeds to repay outstanding debt. |
• | Amendment of credit facility and debt agreements, providing enhanced financial flexibility. |
• | For our Compression Division, net cash provided by operating activities was $20.5 million, loss before tax was $(4.0) million, and adjusted EBITDA(1) was $24.7 million. |
• | A growing backlog in our Offshore Services segment as we exited the second quarter. |
• | Continued aggressive reduction of expenses across the company, including salary reductions and reduced workweek schedules. |
(1) | Non-GAAP financial measures are reconciled to GAAP in the schedules below. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
(In Thousands) | |||||||||||||||
Revenues | $ | 175,660 | $ | 316,319 | $ | 344,989 | $ | 567,411 | |||||||
Cost of sales, services, and rentals | 125,593 | 207,391 | 246,034 | 374,054 | |||||||||||
Depreciation, amortization, and accretion | 33,538 | 39,067 | 67,145 | 77,410 | |||||||||||
Impairments of long-lived assets | 257 | — | 10,927 | — | |||||||||||
Total cost of revenues | 159,388 | 246,458 | 324,106 | 451,464 | |||||||||||
Gross profit | 16,272 | 69,861 | 20,883 | 115,947 | |||||||||||
General and administrative expense | 27,181 | 37,472 | 60,792 | 72,741 | |||||||||||
Goodwill impairment | — | — | 106,205 | — | |||||||||||
Interest expense, net | 14,335 | 13,319 | 28,974 | 27,035 | |||||||||||
Other (income) expense, net | 2,210 | 962 | 1,506 | 118 | |||||||||||
Income (loss) before taxes | (27,454 | ) | 18,108 | (176,594 | ) | 16,053 | |||||||||
Provision (benefit) for income taxes | 1,770 | 2,741 | 361 | 4,310 | |||||||||||
Net income (loss) | (29,224 | ) | 15,367 | (176,955 | ) | 11,743 | |||||||||
Net (income) loss attributable to noncontrolling interest | 2,650 | (442 | ) | 62,056 | (1,266 | ) | |||||||||
Net income (loss) attributable to TETRA stockholders | $ | (26,574 | ) | $ | 14,925 | $ | (114,899 | ) | $ | 10,477 | |||||
Basic per share information: | |||||||||||||||
Net income (loss) attributable to TETRA stockholders | $ | (0.32 | ) | $ | 0.19 | $ | (1.42 | ) | $ | 0.13 | |||||
Weighted average shares outstanding | 81,842 | 79,165 | 80,631 | 79,037 | |||||||||||
Diluted per share information: | |||||||||||||||
Net income (loss) attributable to TETRA stockholders | $ | (0.32 | ) | $ | 0.19 | $ | (1.42 | ) | $ | 0.13 | |||||
Weighted average shares outstanding | 81,842 | 79,915 | 80,631 | 79,506 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
(In Thousands) | |||||||||||||||
Revenues by segment: | |||||||||||||||
Fluids Division | $ | 60,833 | $ | 122,974 | $ | 119,946 | $ | 222,263 | |||||||
Production Testing Division | 13,384 | 34,842 | 33,255 | 71,943 | |||||||||||
Compression Division | 76,091 | 126,455 | 157,786 | 229,344 | |||||||||||
Offshore Division | |||||||||||||||
Offshore Services | 26,119 | 35,731 | 36,365 | 47,514 | |||||||||||
Maritech | 248 | 394 | 337 | 1,900 | |||||||||||
Intersegment eliminations | 7 | (2,909 | ) | (516 | ) | (3,180 | ) | ||||||||
Offshore Division total | 26,374 | 33,216 | 36,186 | 46,234 | |||||||||||
Eliminations and other | (1,022 | ) | (1,168 | ) | (2,184 | ) | (2,373 | ) | |||||||
Total revenues | $ | 175,660 | $ | 316,319 | $ | 344,989 | $ | 567,411 | |||||||
Gross profit (loss) by segment: | |||||||||||||||
Fluids Division | $ | 6,585 | $ | 40,354 | $ | 14,076 | $ | 65,720 | |||||||
Production Testing Division | (2,598 | ) | 3,918 | (6,022 | ) | 6,777 | |||||||||
Compression Division | 13,727 | 21,150 | 20,682 | 43,937 | |||||||||||
Offshore Division | |||||||||||||||
Offshore Services | 1,767 | 4,690 | (4,222 | ) | (1,279 | ) | |||||||||
Maritech | (3,097 | ) | 3 | (3,412 | ) | 1,301 | |||||||||
Intersegment eliminations | — | — | — | — | |||||||||||
Offshore Division total | (1,330 | ) | 4,693 | (7,634 | ) | 22 | |||||||||
Corporate overhead and eliminations | (112 | ) | (255 | ) | (219 | ) | (509 | ) | |||||||
Total gross profit | $ | 16,272 | $ | 69,861 | $ | 20,883 | $ | 115,947 | |||||||
Income (loss) before taxes by segment: | |||||||||||||||
Fluids Division | $ | 454 | $ | 32,583 | $ | 96 | $ | 50,320 | |||||||
Production Testing Division | (4,328 | ) | (472 | ) | (23,702 | ) | (433 | ) | |||||||
Compression Division | (4,040 | ) | 1,498 | (108,740 | ) | 3,904 | |||||||||
Offshore Division | |||||||||||||||
Offshore Services | 37 | 2,095 | (7,671 | ) | (6,553 | ) | |||||||||
Maritech | (3,401 | ) | (313 | ) | (4,021 | ) | 662 | ||||||||
Intersegment eliminations | — | — | — | — | |||||||||||
Offshore Division total | (3,364 | ) | 1,782 | (11,692 | ) | (5,891 | ) | ||||||||
Corporate overhead and eliminations | (16,176 | ) | (17,283 | ) | (32,556 | ) | (31,847 | ) | |||||||
Total income (loss) before taxes | $ | (27,454 | ) | $ | 18,108 | $ | (176,594 | ) | $ | 16,053 |
June 30, 2016 | December 31, 2015 | ||||||
(In Thousands) | |||||||
Balance Sheet: | |||||||
Cash (excluding restricted cash) | $ | 23,917 | $ | 23,057 | |||
Accounts receivable, net | 110,685 | 184,172 | |||||
Inventories | 124,315 | 117,009 | |||||
Other current assets | 28,753 | 29,791 | |||||
PP&E, net | 1,000,169 | 1,048,004 | |||||
Other assets | 98,584 | 234,169 | |||||
Total assets | $ | 1,386,423 | $ | 1,636,202 | |||
Current portion of decommissioning liabilities | $ | 3,291 | $ | 14,570 | |||
Other current liabilities | 128,139 | 170,676 | |||||
Long-term debt (1) | 788,222 | 853,228 | |||||
Long-term portion of decommissioning liabilities | 51,732 | 42,879 | |||||
Other long-term liabilities | 27,255 | 40,669 | |||||
Equity | 387,784 | 514,180 | |||||
Total liabilities and equity | $ | 1,386,423 | $ | 1,636,202 |
June 30, 2016 | December 31, 2015 | ||||||
(In Thousands) | |||||||
TETRA | |||||||
Bank revolving line of credit facility | $ | 101,604 | $ | 21,572 | |||
TETRA Senior Notes at various rates | 117,446 | 264,998 | |||||
Other debt | — | 50 | |||||
TETRA total debt | 219,050 | 286,620 | |||||
Less current portion | — | (50 | ) | ||||
TETRA total long-term debt | $ | 219,050 | $ | 286,570 | |||
CSI Compressco LP | |||||||
CCLP Bank Credit Facility | $ | 231,171 | $ | 229,555 | |||
CCLP 7.25% Senior Notes | 338,001 | 337,103 | |||||
CCLP total debt | 569,172 | 566,658 | |||||
Less current portion | — | — | |||||
CCLP total long-term debt | $ | 569,172 | $ | 566,658 | |||
Consolidated total long-term debt | $ | 788,222 | $ | 853,228 |
• | 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. |
Three Months Ended | |||||||||||||||
June 30, 2016 | |||||||||||||||
Income (Loss) Before Tax | Provision (Benefit) for Tax | Noncont. Interest | Net Income Attributable to TETRA Stockholders | EPS | |||||||||||
(In Thousands, Except per Share Amounts) | |||||||||||||||
Income (loss) attributable to TETRA stockholders, excluding unusual charges and Maritech | $ | (20,511 | ) | $ | (6,154 | ) | $ | (2,011 | ) | $ | (12,346 | ) | $ | (0.15 | ) |
Asset impairments and writeoffs | (365 | ) | (109 | ) | — | (256 | ) | 0.00 | |||||||
Severance expense | (595 | ) | (179 | ) | (170 | ) | (246 | ) | 0.00 | ||||||
Debt refinancing cost | (2,582 | ) | (775 | ) | (469 | ) | (1,338 | ) | (0.02 | ) | |||||
Effect of deferred tax valuation allowance and other related tax adj. | — | 8,987 | — | (8,987 | ) | (0.11 | ) | ||||||||
Maritech profit (loss) | (3,401 | ) | — | — | (3,401 | ) | (0.04 | ) | |||||||
Net income (loss) attributable to TETRA stockholders, as reported | $ | (27,454 | ) | $ | 1,770 | $ | (2,650 | ) | $ | (26,574 | ) | $ | (0.32 | ) | |
March 31, 2016 | |||||||||||||||
Income (Loss) Before Tax | Provision (Benefit) for Tax | Noncont. Interest | Net Income Attributable to TETRA Stockholders | EPS | |||||||||||
Income (loss) attributable to TETRA stockholders, excluding unusual charges and Maritech | $ | (30,890 | ) | $ | (9,266 | ) | $ | (2,391 | ) | $ | (19,233 | ) | $ | (0.24 | ) |
Asset impairments and writeoffs | (10,670 | ) | (3,201 | ) | (4,465 | ) | (3,004 | ) | (0.04 | ) | |||||
Severance expense | (755 | ) | (226 | ) | (138 | ) | (391 | ) | 0.00 | ||||||
Goodwill writeoff | (106,205 | ) | (31,862 | ) | (52,412 | ) | (21,931 | ) | (0.28 | ) | |||||
Effect of deferred tax valuation allowance and other related tax adj. | — | 43,146 | — | (43,146 | ) | (0.54 | ) | ||||||||
Maritech profit (loss) | (620 | ) | — | — | (620 | ) | (0.01 | ) | |||||||
Net Income (loss) attributable to TETRA stockholders, as reported | $ | (149,140 | ) | $ | (1,409 | ) | $ | (59,406 | ) | $ | (88,325 | ) | $ | (1.11 | ) |
June 30, 2015 | |||||||||||||||
Income (Loss) Before Tax | Provision (Benefit) for Tax | Noncont. Interest | Net Income Attributable to TETRA Stockholders | EPS | |||||||||||
Income (loss) attributable to TETRA stockholders, excluding unusual charges and Maritech | $ | 19,841 | $ | 5,953 | $ | 464 | $ | 13,424 | $ | 0.17 | |||||
Severance expense | (320 | ) | (96 | ) | (22 | ) | (202 | ) | 0.00 | ||||||
Allowance for bad debt | (1,100 | ) | (330 | ) | — | (770 | ) | (0.01 | ) | ||||||
Effect of deferred tax valuation allowance and other related tax adj. | — | (2,786 | ) | — | 2,786 | 0.03 | |||||||||
Maritech profit (loss) | (313 | ) | — | — | (313 | ) | 0.00 | ||||||||
Net Income (loss) attributable to TETRA stockholders, as reported | $ | 18,108 | $ | 2,741 | $ | 442 | $ | 14,925 | $ | 0.19 |
Three Months Ended | |||||||||||||||||||||
June 30, 2016 | |||||||||||||||||||||
Income (Loss) Before Tax, as Reported | Impairments & Special Charges | Adjusted Income (Loss) Before Tax | Adjusted Interest Expense, Net(1) | Depreciation & Amortization | Equity Comp. Expense | Adjusted EBITDA | |||||||||||||||
(In Thousands) | |||||||||||||||||||||
Fluids Division | $ | 454 | $ | 501 | $ | 955 | $ | 2 | $ | 7,326 | $ | — | $ | 8,283 | |||||||
Production Testing Division | (4,328 | ) | 131 | (4,197 | ) | (143 | ) | 4,176 | — | (164 | ) | ||||||||||
Compression Division | (4,040 | ) | 984 | (3,056 | ) | 8,148 | 18,753 | 825 | 24,670 | ||||||||||||
Offshore Services Segment | 37 | 56 | 93 | — | 2,865 | — | 2,958 | ||||||||||||||
Eliminations and other | 3 | — | 3 | — | (3 | ) | — | — | |||||||||||||
Subtotal | (7,874 | ) | 1,672 | (6,202 | ) | 8,007 | 33,117 | 825 | 35,747 | ||||||||||||
Corporate and other | (16,179 | ) | 1,870 | (14,309 | ) | 5,596 | 112 | 5,803 | (2,798 | ) | |||||||||||
TETRA excluding Maritech | (24,053 | ) | 3,542 | (20,511 | ) | 13,603 | 33,229 | 6,628 | 32,949 | ||||||||||||
Maritech | (3,401 | ) | — | (3,401 | ) | 10 | 309 | — | (3,082 | ) | |||||||||||
Total TETRA | $ | (27,454 | ) | $ | 3,542 | $ | (23,912 | ) | $ | 13,613 | $ | 33,538 | $ | 6,628 | $ | 29,867 | |||||
March 31, 2016 | |||||||||||||||||||||
Income (Loss) Before Tax, as Reported | Impairments & Special Charges | Adjusted Income (Loss) Before Tax | Adjusted Interest Expense, Net(1) | Depreciation & Amortization | Equity Comp. Expense | Adjusted EBITDA | |||||||||||||||
Fluids Division | $ | (358 | ) | $ | 114 | $ | (244 | ) | $ | (26 | ) | $ | 7,396 | $ | — | $ | 7,126 | ||||
Production Testing Division | (19,374 | ) | 17,073 | (2,301 | ) | (189 | ) | 4,592 | — | 2,102 | |||||||||||
Compression Division | (104,700 | ) | 100,443 | (4,257 | ) | 8,802 | 18,464 | 636 | 23,645 | ||||||||||||
Offshore Services Segment | (7,708 | ) | — | (7,708 | ) | — | 2,739 | — | (4,969 | ) | |||||||||||
Eliminations and other | 4 | — | 4 | — | (4 | ) | — | — | |||||||||||||
Subtotal | (132,136 | ) | 117,630 | (14,506 | ) | 8,587 | 33,187 | 636 | 27,904 | ||||||||||||
Corporate and other | (16,384 | ) | — | (16,384 | ) | 6,052 | 115 | 1,737 | (8,480 | ) | |||||||||||
TETRA excluding Maritech | (148,520 | ) | 117,630 | (30,890 | ) | 14,639 | 33,302 | 2,373 | 19,424 | ||||||||||||
Maritech | (620 | ) | — | (620 | ) | — | 305 | — | (315 | ) | |||||||||||
Total TETRA | $ | (149,140 | ) | $ | 117,630 | $ | (31,510 | ) | $ | 14,639 | $ | 33,607 | $ | 2,373 | $ | 19,109 | |||||
June 30, 2015 | |||||||||||||||||||||
Income (Loss) Before Tax, as Reported | Impairments & Special Charges | Adjusted Income (Loss) Before Tax | Interest Expense, Net | Depreciation & Amortization | Equity Comp. Expense | Adjusted EBITDA | |||||||||||||||
Fluids Division | $ | 32,583 | $ | 171 | $ | 32,754 | $ | (76 | ) | $ | 8,813 | $ | — | $ | 41,491 | ||||||
Production Testing Division | (472 | ) | 1,147 | 675 | 14 | 6,168 | — | 6,857 | |||||||||||||
Compression Division | 1,498 | 45 | 1,543 | 8,658 | 20,686 | 727 | 31,614 | ||||||||||||||
Offshore Services Segment | 2,095 | 32 | 2,127 | — | 2,888 | — | 5,015 | ||||||||||||||
Eliminations and other | (12 | ) | — | (12 | ) | — | (3 | ) | — | (15 | ) | ||||||||||
Subtotal | 35,692 | 1,395 | 37,087 | 8,596 | 38,552 | 727 | 84,962 | ||||||||||||||
Corporate and other | (17,271 | ) | 25 | (17,246 | ) | 4,697 | 255 | 1,874 | (10,420 | ) | |||||||||||
TETRA excluding Maritech | 18,421 | 1,420 | 19,841 | 13,293 | 38,807 | 2,601 | 74,542 | ||||||||||||||
Maritech | (313 | ) | — | (313 | ) | 26 | 260 | — | (27 | ) | |||||||||||
Total TETRA | $ | 18,108 | $ | 1,420 | $ | 19,528 | $ | 13,319 | $ | 39,067 | $ | 2,601 | $ | 74,515 |
(1) | Adjusted interest expense, net, for the three month period ended June 30, 2016, excludes $0.7 million of interest expense related to CCLP debt refinancing. |
Three Months Ended | |||||||||||
June 30, 2016 | March 31, 2016 | June 30, 2015 | |||||||||
(In Thousands) | |||||||||||
Consolidated | |||||||||||
Net cash provided by operating activities | $ | 8,336 | $ | 25,261 | $ | 54,347 | |||||
ARO settlements | 64 | 3,379 | 3,845 | ||||||||
Capital expenditures, net of sales proceeds | (4,732 | ) | (1,985 | ) | (23,188 | ) | |||||
Consolidated adjusted free cash flow | 3,668 | 26,655 | 35,004 | ||||||||
CSI Compressco LP | |||||||||||
Net cash provided by operating activities | 20,469 | 15,095 | 19,721 | ||||||||
Capital expenditures, net of sales proceeds | (2,453 | ) | (1,353 | ) | (19,934 | ) | |||||
CSI Compressco free cash flow | 18,016 | 13,742 | (213 | ) | |||||||
TETRA Only | |||||||||||
Cash from operating activities | (12,133 | ) | 10,166 | 34,626 | |||||||
ARO settlements | 64 | 3,379 | 3,845 | ||||||||
Capital expenditures, net of sales proceeds | (2,279 | ) | (632 | ) | (3,254 | ) | |||||
Free cash flow before ARO settlements | (14,348 | ) | 12,913 | 35,217 | |||||||
Distributions from CSI Compressco LP | 5,575 | 5,575 | 7,651 | ||||||||
Adjusted free cash flow | (8,773 | ) | 18,488 | 42,868 |
June 30, 2016 | |||||||
TETRA | CCLP | ||||||
(In Millions) | |||||||
Non-restricted cash | $ | 7.2 | $ | 16.7 | |||
Revolver debt outstanding | 101.6 | 231.2 | |||||
Senior Notes outstanding | 117.4 | 338.0 | |||||
Net debt | $ | 211.8 | $ | 552.5 |