tti-8ka_20200807.htm

0001564590-20-038065.txt : 20200807 0001564590-20-038065.hdr.sgml : 20200807 20200807070230 ACCESSION NUMBER: 0001564590-20-038065 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20200807 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20200807 DATE AS OF CHANGE: 20200807 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TETRA TECHNOLOGIES INC CENTRAL INDEX KEY: 0000844965 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 742148293 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-13455 FILM NUMBER: 201083697 BUSINESS ADDRESS: STREET 1: 24955 INTERSTATE 45 NORTH CITY: THE WOODLANDS STATE: TX ZIP: 77380 BUSINESS PHONE: 2813671983 MAIL ADDRESS: STREET 1: 24955 INTERSTATE 45 NORTH CITY: THE WOODLANDS STATE: TX ZIP: 77380 8-K/A 1 tti-8ka_20200807.htm 8-K/A tti-8ka_20200807.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K/A

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of report (Date of earliest event reported): August 7, 2020 (August 4, 2020)

TETRA Technologies, Inc.

(Exact Name of Registrant as Specified in Charter)

Delaware	1-13455	74-2148293
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

24955 Interstate 45 North

The Woodlands, Texas 77380

(Address of Principal Executive Offices, and Zip Code)

(281) 367-1983

Registrant’s Telephone Number, Including Area Code

(Former Name or Former Address, if Changed Since Last Report)

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 communication 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 communication pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐

Pre-commencement communication pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	TTI	NYSE

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
	Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Explanatory Note

On August 4, 2020, TETRA Technologies, Inc. (“TETRA” or the “Company”) filed a Current Report on Form 8-K furnishing under Items 2.02 and 9.01 of Form 8-K the Company’s press release announcing its unaudited financial results for the three and six months ended June 30, 2020 (the “Original Filing”). The full text of the press release was included as Exhibit 99.1 to the Original Filing. The purpose of this Current Report on Form 8-K/A is to reflect the impact of a subsequent bankruptcy announcement by one of the Company’s off-shore completion fluids customers on the Company’s results and to amend the financial tables that were included in Exhibit 99.1 to the Original Filing accordingly.

Item 2.02. Results of Operations and Financial Condition.

On August 4, 2020, after TETRA had released earnings but before the Company had filed its Form 10-Q for the three and six months ended June 30, 2020, one of the Company’s offshore completion fluids customers announced it had filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code (the “Customer Bankruptcy”). As a result of the Customer Bankruptcy, TETRA recorded bad debt expense of approximately $2.8 million in the three and six months ended June 30, 2020 to reflect TETRA’s assessment of the collectability of the outstanding receivable from that customer.

On August 7, 2020, TETRA issued a news release announcing its amended financial results for the three and six months ended June 30, 2020. The press release and amended financial results are furnished as Exhibit 99.1 to this Current Report on Form 8-K/A.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

Exhibit Number		Description
99.1		News Release dated August 7, 2020 issued by TETRA Technologies, Inc.

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/Brady M. Murphy
	Brady M. Murphy
	President and Chief Executive Officer

Date: August 7, 2020

EX-99.1 2 tti-ex991_6.htm EX-99.1 tti-ex991_6.htm

Exhibit 99.1

TETRA TECHNOLOGIES, INC. ANNOUNCES UPDATE

TO SECOND QUARTER 2020 RESULTS

THE WOODLANDS, Texas, August 7, 2020 / PR Newswire / - On August 4, 2020, TETRA Technologies, Inc. (“TETRA” or the “Company”) (NYSE:TTI), after TETRA had released earnings but before the Company had filed its Form 10-Q for the three and six months ended June 30, 2020, one of TETRA’s offshore completion fluids customers announced it had filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code (the “Customer Bankruptcy”). As a result of the Customer Bankruptcy, TETRA recorded bad debt expense of approximately $2.8 million in the three and six months ended June 30, 2020 to reflect TETRA’s assessment of the collectability of the outstanding receivable from that customer. TETRA recorded this charge in the general and administrative expense line of the Consolidated Statements of Operations. Due to the timing of the Customer Bankruptcy announcement, our August 4th earnings release did not take into account this significant unusual bad debt expense. Please note such bad debt expense does not impact the Company’s previously reported revenues, Adjusted EBITDA, Adjusted EBITDA margins, cash from operations or adjusted free cash flow.

The attached schedules have been updated from what was previously released to reflect this bad debt reserve.

This press release includes the following financial measures that are not presented in accordance with generally accepted accounting principles in the United States (“GAAP”): Adjusted earnings per share attributable to TETRA stockholders, Adjusted EBITDA, and Adjusted EBITDA Margin (Adjusted EBITDA as a percent of revenue) on consolidated and segment basis, Adjusted income (loss) before tax, TETRA-only adjusted free cash flow from continuing operations, and net debt. Please see Schedules E-K for reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures.

Investor Contact

For further information: Elijio Serrano, CFO, TETRA Technologies, Inc., The Woodlands, Texas, Phone: 281.367.1983, 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

Schedule K: Non-GAAP Reconciliation to TETRA Adjusted EBITDA Margins and Adjusted Income (Loss) Before Tax Margins

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.

Schedule A: Consolidated Income Statement (Unaudited)

	Three Months Ended									Six Months Ended
	Jun 30, 2020			Mar 31, 2020			Jun 30, 2019			Jun 30, 2020			Jun 30, 2019
	(In Thousands, Except per Share Amounts)
Revenues	$	192,441		$	222,942		$	288,796		$	415,383		$	532,524

Cost of sales, services, and rentals	133,892			148,694			206,302			282,586			383,046
Depreciation, amortization, and accretion	29,842			29,460			31,817			59,302			62,445
Impairments and other charges	8,977			5,371			2,311			14,348			2,457
Insurance recoveries	(591		)	—			—			(591		)	—
Total cost of revenues	172,120			183,525			240,430			355,645			447,948
Gross profit	20,321			39,417			48,366			59,738			84,576

General and administrative expense	34,014			30,537			36,295			64,551			70,572
Interest expense, net	17,586			17,856			18,529			35,442			36,908
Warrants fair value adjustment (income) expense	11			(338		)	(1,520		)	(327		)	(1,113		)
CCLP Series A Preferred Units fair value adjustment (income) expense	—			—			146			—			1,309
Other (income) expense, net	3,839			439			627			4,278			(324		)
Loss before taxes and discontinued operations	(35,129		)	(9,077		)	(5,711		)	(44,206		)	(22,776		)
Provision for income taxes	2,001			1,154			2,490			3,155			4,099
Loss before discontinued operations	(37,130		)	(10,231		)	(8,201		)	(47,361		)	(26,875		)
Discontinued operations:
Loss from discontinued operations, net of taxes	163			(145		)	(345		)	18			(771		)
Net loss	(36,967		)	(10,376		)	(8,546		)	(47,343		)	(27,646		)
Less: loss attributable to noncontrolling interest	15,712			8,825			1,633			24,537			9,895
Net loss attributable to TETRA stockholders	$	(21,255	)	$	(1,551	)	$	(6,913	)	$	(22,806	)	$	(17,751	)

Basic per share information:
Loss before discontinued operations attributable to TETRA stockholders	$	(0.17	)	$	(0.01	)	$	(0.06	)	$	(0.18	)	$	(0.13	)
Income (loss) from discontinued operations attributable to TETRA stockholders	$	0.00		$	0.00		$	0.00		$	0.00		$	(0.01	)
Net loss attributable to TETRA stockholders	$	(0.17	)	$	(0.01	)	$	(0.06	)	$	(0.18	)	$	(0.14	)
Weighted average shares outstanding	125,886			125,587			125,612			125,736			125,646

Diluted per share information:
Loss before discontinued operations attributable to TETRA stockholders	$	(0.17	)	$	(0.01	)	$	(0.06	)	$	(0.18	)	$	(0.13	)
Income (loss) from discontinued operations attributable to TETRA stockholders	$	0.00		$	0.00		$	0.00		$	0.00		$	(0.01	)
Net loss attributable to TETRA stockholders	$	(0.17	)	$	(0.01	)	$	(0.06	)	$	(0.18	)	$	(0.14	)
Weighted average shares outstanding	125,886			125,587			125,612			125,736			125,646

Schedule B: Financial Results By Segment (Unaudited)

	Three Months Ended									Six Months Ended
	Jun 30, 2020			Mar 31, 2020			Jun 30, 2019			Jun 30, 2020			Jun 30, 2019
	(In Thousands)
Revenues by segment:
Completion Fluids & Products Division	$	71,346		$	75,237		$	79,767		$	146,583		$	141,348
Water & Flowback Services Division	24,723			57,467			73,124			82,190			151,802
Compression Division	96,372			90,238			135,905			186,610			239,374
Eliminations and other	—			—			—			—			—
Total revenues	$	192,441		$	222,942		$	288,796		$	415,383		$	532,524

Gross profit (loss) by segment:
Completion Fluids & Products Division	$	20,819		$	25,964		$	19,809		$	46,783		$	30,472
Water & Flowback Services Division	(4,836		)	3,267			7,490			(1,569		)	16,341
Compression Division	4,511			10,380			21,235			14,890			38,094
Corporate overhead and eliminations	(173		)	(194		)	(168		)	(366		)	(331		)
Total gross profit	$	20,321		$	39,417		$	48,366		$	59,738		$	84,576

Income (loss) before taxes by segment:
Completion Fluids & Products Division	$	13,202		$	19,396		$	14,614		$	32,598		$	20,800
Water & Flowback Services Division	(8,418		)	(2,244		)	2,460			(10,662		)	4,691
Compression Division	(23,006		)	(12,790		)	(3,483		)	(35,796		)	(11,284		)
Corporate overhead and eliminations	(16,907		)	(13,439		)	(19,302		)	(30,346		)	(36,983		)
Total income (loss) before taxes	$	(35,129	)	$	(9,077	)	$	(5,711	)	$	(44,206	)	$	(22,776	)

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 (June 30, 2020 Unaudited)

	June 30, 2020		December 31, 2019
	(In Thousands)
Balance Sheet:
Cash (excluding restricted cash)	$	56,722	$	17,704
Accounts receivable, net	114,306		175,918
Inventories	115,506		136,510
Other current assets	22,453		21,222
PP&E, net	713,584		758,637
Operating lease right-of-use assets	75,524		68,131
Other assets	90,499		93,800
Total assets	$	1,188,594	$	1,271,922

Liabilities of discontinued operations	$	1,873	$	2,098
Other current liabilities	145,454		186,625
Long-term debt ⁽¹⁾	843,292		842,871
Long-term portion of asset retirement obligations	12,862		12,762
Warrants liability	123		449
Operating lease liabilities	60,693		53,919
Other long-term liabilities	11,611		10,372
Equity	112,686		162,826
Total liabilities and equity	$	1,188,594	$	1,271,922

(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 a 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 exclude deferred financing costs.

	June 30, 2020		December 31, 2019		June 30, 2019
	(In Thousands)
TETRA
Asset-Based Credit Agreement	$	—	$	1,000	$	20,000
Term Credit Agreement	220,500		220,500		220,500
TETRA total debt	220,500		221,500		240,500
Less current portion	—		—		—
TETRA total long-term debt	$	220,500	$	221,500	$	240,500

CSI Compressco LP
CCLP Credit Agreement	1,477		3,500		—
7.25% Senior Notes	80,722		295,930		295,930
7.50% Senior Notes	400,000		350,000		350,000
Second Lien Notes	155,529		—		—
Total debt	637,728		649,430		645,930
Less current portion	—		—		—
CCLP total long-term debt	$	637,728	$	649,430	$	645,930
Consolidated total long-term debt	$	858,228	$	870,930	$	886,430

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; net income (loss) before taxes, Adjusted income (loss) before tax, Adjusted income (loss) before tax as a % of revenue, TETRA only adjusted free cash flow and TETRA only free cash flow from continuing operations; and segment adjusted EBITDA as a percent of revenue (“Adjusted EBITDA margin”). 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). 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 margin) 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.

Adjusted income before tax is defined as earnings (loss) before interest, taxes, impairments and certain non-cash charges and non-recurring adjustments. Adjusted income before tax (and Adjusted income before tax as a percent of revenue or Adjusted income before tax margin which is Adjusted income before tax divided by revenue) is used by management as a supplemental financial measure to assess the financial performance of the Company’s normalized profitability while excluding any unusual, non-recurring items and tax benefits or detriment.

TETRA only adjusted free cash flow is a non-GAAP measure that the Company defines as cash from TETRA’s operations, 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, 2020
	Income (loss) before taxes and discontinued operations			Provision (Benefit) for Tax		Non-cont. Interest			Net Income Attributable to TETRA Stockholders			Diluted EPS
	(In Thousands, Except per Share Amounts)
Income (loss) attributable to TETRA stockholders, excluding special items and discontinued operations	$	(14,258	)	$	2,001	$	(5,171	)	$	(11,088	)	$	(0.09	)
Stock Warrant fair value adjustment	(11		)	—		—			(11		)	0.00
Transaction and other expenses	(895		)	—		(475		)	(420		)	0.00
Impairments and other charges	(8,922		)	—		(5,977		)	(2,945		)	(0.02		)
Restructuring charges	(486		)	—		(179		)	(307		)	0.00
Debt Refinancing	(4,754		)	—		(3,184		)	(1,570		)	(0.01		)
Severance	(3,003		)	—		(726		)	(2,277		)	(0.02		)
Bad Debt	(2,800		)	—		—		—	(2,800		)	(0.02		)
Net income (loss) before discontinued operations	(35,129		)	2,001		(15,712		)	(21,418		)	(0.17		)
Loss from discontinued operations									163			0.00
Net Income (loss) attributable to TETRA stockholders, as reported									$	(21,255	)	$	(0.17	)

	Three Months Ended
	March 31, 2020
	Income (loss) before taxes and discontinued operations			Provision (Benefit) for Tax		Non-cont. Interest			Net Income Attributable to TETRA Stockholders			Diluted EPS
	(In Thousands, Except per Share Amounts)
Income (loss) attributable to TETRA stockholders, excluding special items and discontinued operations	$	(976	)	$	1,154	$	(4,892	)	$	2,762		$	0.02
Stock Warrant fair value adjustment	338			—		—			338			0.00
Transaction and other expenses	(457		)	—		(216		)	(241		)	0.00
Impairments and other charges	(5,371		)	—		(3,538		)	(1,833		)	(0.01		)
Restructuring charges	(259		)	—		—			(259		)	0.00
Severance	(1,334		)	—		(179		)	(1,155		)	(0.01		)
Bad debt	(1,018		)	—		—			(1,018		)	(0.01		)
Net income (loss) before discontinued operations	(9,077		)	1,154		(8,825		)	(1,406		)	(0.01		)
Loss from discontinued operations									(145		)	0.00
Net Income (loss) attributable to TETRA stockholders, as reported									$	(1,551	)	$	(0.01	)

	Three Months Ended
	June 30, 2019
	Income (loss) before taxes and discontinued operations			Provision (Benefit) for Tax			Non-cont. Interest			Net Income Attributable to TETRA Stockholders			Diluted EPS
	(In Thousands, Except per Share Amounts)
Income (loss) attributable to TETRA stockholders, excluding unusual charges	$	(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
Earnout Adjustment	400			84			—			316			0.00
Lee Plant Facility Expenses	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	)

Schedule G: Non-GAAP Reconciliation to GAAP Financials (Unaudited)^*

	Three Months Ended
	June 30, 2020
	Net Income (Loss), as reported			Tax Provision		Income (Loss) Before Tax, as Reported			Impairments & Special Charges		Adjusted Income (Loss) Before Tax			Interest Expense			Adjusted Depreciation & Amortization			Equity Comp. Expense		Adjusted EBITDA
	(In Thousands)
Completion Fluids & Products Division						$	13,202		$	3,310	$	16,512		$	(143	)	$	1,934		$	—	$	18,303
Water & Flowback Services Division						(8,418		)	1,203		(7,215		)	(2		)	7,617			—		400
Compression Division						(23,006		)	15,736		(7,270		)	12,982			20,116			488		26,316
Eliminations and other						2			—		2			—			—			—		2
Subtotal						(18,220		)	20,249		2,029			12,837			29,667			488		45,021
Corporate and other						(16,909		)	621		(16,288		)	4,749			175			1,602		(9,762		)
TETRA excluding Discontinued Operations	$	(37,130	)	$	2,001	$	(35,129	)	$	20,870	$	(14,259	)	$	17,586		$	29,842		$	2,090	$	35,259

	March 31, 2020
	Net Income (Loss), as reported			Tax Provision		Income (Loss) Before Tax, as Reported			Impairments & Special Charges		Adjusted Income (Loss) Before Tax			Adjusted Interest Expense, Net			Adjusted Depreciation & Amortization			Equity Comp. Expense		Adjusted EBITDA
	(In Thousands)
Completion Fluids & Products Division						$	19,396		$	450	$	19,846		$	(154	)	$	1,934		$	—	$	21,626
Water & Flowback Services Division						(2,244		)	1,607		(637		)	(9		)	7,425			—		6,779
Compression Division						(12,790		)	5,971		(6,819		)	12,564			19,908			324		25,977
Eliminations and other						5			—		5			—			(4		)	—		1
Subtotal						4,367			8,028		12,395			12,401			29,263			324		54,383
Corporate and other						(13,444		)	73		(13,371		)	5,455			197			1,145		(6,574		)
TETRA excluding Discontinued Operations	$	(10,231	)	$	1,154	$	(9,077	)	$	8,101	$	(976	)	$	17,856		$	29,460		$	1,469	$	47,809

	Three Months Ended
	June 30, 2019
	Net Income (Loss), as reported			Tax Provision		Income (Loss) Before Tax, as Reported			Impairments & Special Charges			Adjusted Income (Loss) Before Tax			Interest Expense			Adjusted Depreciation & Amortization			Equity Comp. Expense		Adjusted EBITDA
	(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

* 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, 2020, are shown below. TETRA and CSI Compressco LP’s debt agreements are distinct and separate with no cross-default provisions. 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. Amounts presented are net of deferred financing costs.

	June 30, 2020
	TETRA		CCLP		Consolidated
	(In Millions)
Non-restricted cash	$	50.0	$	6.8	$	56.7

Carrying value of long-term debt:
Asset-Based Credit Agreement	—		0.7		0.7
Term Credit Agreement	205.7		—		205.7
Senior Notes outstanding	—		636.8		636.8
Net debt	$	155.7	$	630.7	$	786.5

Schedule I: Non-GAAP Reconciliation to TETRA Only Adjusted Free Cash Flow (Unaudited)

	Three Months Ended									Six Months Ended
	Jun 30, 2020			Mar 31, 2020			Jun 30, 2019			Jun 30, 2020			Jun 30, 2019
	(In Thousands)
Consolidated
Net cash provided (used) by operating activities	$	38,211		$	22,176		$	30,965		$	60,387		$	38,377
Capital expenditures, net of sales proceeds	(3,332		)	(10,965		)	(27,345		)	(14,297		)	(59,390		)
Consolidated adjusted free cash flow	$	34,879		$	11,211		$	3,620		46,090			(21,013		)

CSI Compressco LP
Net cash provided (used) by operating activities	$	4,823		$	13,357		$	8,710		18,180			40,342
Capital expenditures, net of sales proceeds	(1,125		)	(6,483		)	(16,434		)	(7,608		)	(39,586		)
CSI Compressco free cash flow	$	3,698		$	6,874		$	(7,724	)	10,572			756

TETRA Only
Cash from operating activities	$	33,388		$	8,819		$	22,255		42,207			(1,965		)
Investment in CCLP Compressors	—			—			(8,740		)	—			(11,142		)
Capital expenditures, net of sales proceeds	(2,207		)	(4,482		)	(10,911		)	(6,689		)	(19,804		)
Free cash flow	31,181			4,337			2,604			35,518			(32,911		)
Distributions from CSI Compressco LP	169			169			168			338			337
TETRA Only Adjusted Free Cash Flow	$	31,350		$	4,506		$	2,772		35,856			(32,574		)

Schedule J: Non-GAAP Reconciliation to TETRA Only Adjusted Free Cash Flow From Continuing Operations (unaudited)

	Three Months Ended									Six Months Ended
	Jun 30, 2020			Mar 31, 2020			Jun 30, 2019			Jun 30, 2020			Jun 30, 2019
	(In Thousands)
TETRA Only
Cash from operating activities	$	33,388		$	8,819		$	22,255		$	42,207		$	(1,965	)
Less: Discontinued operations operating activities (adjusted EBITDA)	163			(145		)	(345		)	18			(771		)
Cash from continued operating activities	33,225			8,964			22,600			42,189			(1,194		)
Less: Continuing operations capital expenditures	(2,207		)	(4,482		)	(10,911		)	(6,689		)	(19,804		)
Less: Investment in CCLP Compressors	—			—			(8,740		)	—			(11,142		)
Distributions from CSI Compressco LP	169			169			168			338			337
TETRA Only Adjusted Free Cash Flow From Continuing Operations	$	31,187		$	4,651		$	3,117		$	35,838		$	(31,803	)

Schedule K: Non-GAAP Reconciliation to TETRA Adjusted EBITDA Margins and Adjusted Income (Loss) before tax margins (Unaudited)

	Three Months Ended
	Jun 30, 2020			Mar 31, 2020			Jun 30, 2019
	(In Thousands)

Consolidated
Revenue	$	192,441		$	222,942		$	288,796
Income (loss) before tax	(35,129		)	(9,077		)	(5,711		)
Adjusted income (loss) before tax (Schedule G)	(14,259		)	(976		)	(2,525		)
Adjusted EBITDA (Schedule G)	35,259			47,809			50,084
Income (Loss) Before Tax Margin	(18.3		)%	(4.1		)%	(2.0		)%
Adjusted Income (Loss) Before Tax Margin	(7.4		)%	(0.4		)%	(0.9		)%
Adjusted EBITDA Margin	18.3		%	21.4		%	17.3		%

Completion Fluids & Products
Revenue	$	71,346		$	75,237		$	79,767
Income (loss) before tax	13,202			19,396			14,614
Adjusted income (loss) before tax (Schedule G)	16,512			19,846			14,325
Adjusted EBITDA (Schedule G)	18,303			21,626			17,891
Income (Loss) Before Tax Margin	18.5		%	25.8		%	18.3		%
Adjusted Income (Loss) Before Tax Margin	23.1		%	26.4		%	18.0		%
Adjusted EBITDA Margin	25.7		%	28.7		%	22.4		%

Water & Flowback Services
Revenue	$	24,723		$	57,467		$	73,124
Income (loss) before tax	(8,418		)	(2,244		)	2,460
Adjusted income (loss) before tax (Schedule G)	(7,215		)	(637		)	2,060
Adjusted EBITDA (Schedule G)	400			6,779			10,923
Income (Loss) Before Tax Margin	(34.0		)%	(3.9		)%	3.4		%
Adjusted Income (Loss) Before Tax Margin	(29.2		)%	(1.1		)%	2.8		%
Adjusted EBITDA Margin	1.6		%	11.8		%	14.9		%

Compression
Revenue	$	96,372		$	90,238		$	135,905
Income (loss) before tax	(23,006		)	(12,790		)	(3,483		)
Adjusted income (loss) before tax (Schedule G)	(7,270		)	(6,819		)	124
Adjusted EBITDA (Schedule G)	26,316			25,977			32,766
Income (Loss) Before Tax Margin	(23.9		)%	(14.2		)%	(2.6		)%
Adjusted Income (Loss) Before Tax Margin	(7.5		)%	(7.6		)%	0.1		%
Adjusted EBITDA Margin	27.3		%	28.8		%	24.1		%

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