THE WOODLANDS, Texas,
Aug. 7, 2015 /PRNewswire/
-- TETRA Technologies, Inc. (NYSE:TTI) today announced
second quarter 2015 earnings per share of $0.16, excluding Maritech and other charges,
which compares to earnings of $0.10
per share in the second quarter of 2014, also excluding Maritech
and other charges. Second quarter 2015 revenue excluding Maritech
of $315.9 million increased 31% from
the second quarter of 2014 primarily as a result of the acquisition
of Compressor Systems, Inc. ("CSI") on August 4, 2014 by CSI Compressco LP.
Consolidated GAAP second quarter 2015 earnings per share
attributable to TETRA stockholders including Maritech and other
charges were earnings of $0.19, which
compares to a loss of $(0.03) in the
second quarter of 2014.
Highlights include:
- Record second quarter 2015 revenue, adjusted EBITDA, and
operating income for the Fluids Division (adjusted EBITDA is a
non-GAAP financial measure that is reconciled to the nearest GAAP
measure in Schedule F).
- Second quarter free cash flow of $43
million(1), excluding the impact of $4 million of Maritech asset retirement
obligation expenditures.
- A $38 million reduction in TETRA
net debt(2) compared to the end of the first quarter of
2015, and an improvement in debt leverage ratio to
2.38x(3), marking the third consecutive quarter of debt
improvements.
- The successful launch and completion of the first commercial
application of our heavy zinc-free completion fluid.
- All TETRA Divisions excluding Maritech were profitable at the
pretax income level in 2Q 2015, excluding the impact of a reserve
for bad debts in Production Testing.
- DSOs improved by 13 days from 68 days at the end of
March 2015.
- Continued reduction in operating expenses through staff
reductions, multiple cost management initiatives including supplier
consolidations and price reductions, and efficiency improvements
driven by recent systems implementation initiatives.
(1)
|
Refer to Schedule G
for reconciliation.
|
(2)
|
Refer to Schedule H
for reconciliation.
|
(3)
|
Leverage ratio is
defined by TETRA's credit agreement as outstanding debt plus
letters of credit, divided by trailing twelve-month EBITDA
excluding unusual charges, Maritech losses, and CSI Compressco
distributions.
|
Second Quarter
2015 Results, Excluding Unusual Charges and
Maritech
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Change
|
|
June 30,
2015
|
|
June 30,
2014
|
|
2015 vs.
2014
|
|
(In Thousands, Except
per Share Amounts)
|
|
|
Revenue
|
$
|
315,925
|
|
|
$
|
240,942
|
|
|
31%
|
Income before
taxes(1)
|
18,741
|
|
|
12,792
|
|
|
47%
|
Net income
attributable to TETRA shareholders(2)
|
12,654
|
|
|
8,356
|
|
|
51%
|
Diluted EPS
attributable to TETRA shareholders(3)
|
$
|
0.16
|
|
|
$
|
0.10
|
|
|
60%
|
Adjusted pretax
operating margin
|
5.9%
|
|
|
5.3%
|
|
|
62 bps
|
Adjusted
EBITDA
|
$
|
72,463
|
|
|
$
|
40,783
|
|
|
78%
|
|
|
(1)
|
Income before taxes,
including unusual charges and Maritech was $18.1 million in the
second quarter of 2015 and a loss of $(2.5) million in the second
quarter of 2014.
|
(2)
|
Net income
attributable to TETRA shareholders, including unusual charges and
Maritech was $14.9 million in the second quarter of 2015, and a
loss of $(2.5) million in the second quarter of
2014.
|
(3)
|
Diluted EPS,
including unusual charges and Maritech, was $0.19 in the second
quarter of 2015, and a loss of $(0.03) in the second quarter of
2014. See Schedule E for details.
|
Analysis of Second Quarter 2015 Results
Stuart M. Brightman, TETRA's
President and Chief Executive Officer, stated, "Our second quarter
results were clearly exceptional in a very challenging market
environment. I attribute these results to our diversification of
our customer base and introduction of new products into the market,
as well as our continued focus on cost reductions across the
organization.
"Revenues in our Fluids Division for the second quarter of 2015
increased 23.9% sequentially, and 5.4% compared to the second
quarter of 2014. Adjusted pretax margins for the Division improved
sequentially on pretax profits of $32.8
million in the second quarter of 2015. Similar to the first
quarter of this year, the exceptional second quarter improvement
was driven by completion products and services in the Gulf of Mexico, continued strength in our U.S.
land operations, and strength in our chemicals manufacturing
segment sales, as well as the Division's international operations.
Our Gulf of Mexico fluids business
benefitted in the second quarter from the expansion of our customer
base, sales of new products, and the accelerated timing of a couple
of projects. All of these items contributed to a record quarter for
the Fluids Division in both revenues and pretax profits, despite
the challenging market environment for our water management
business. Second quarter results for this Division were also
favorably impacted by a $2.6 million
insurance settlement.
"Excluding the impact of an adjustment for bad debt, our
Production Testing Division's second quarter 2015 pretax earnings
represent a modest sequential improvement over the first quarter of
this year, in an even more challenging market. This improvement was
driven by ongoing cost reductions, profitable new business, and the
strength of our international business. We expect Production
Testing to continue to operate in a challenging domestic market
environment for the balance of 2015. We will continue to take
necessary cost actions as required to manage this impact.
"For the second quarter of 2015 our Compression Division
reported adjusted pretax earnings of $1.5
million, a decrease from the $6.4
million of adjusted pretax earnings reported in the second
quarter of 2014. During the current year's quarter our equipment
and parts sales revenues increased to $49.0
million, a 170% increase sequentially over the first quarter
of this year. Utilization for compression services trended down
during the second quarter, reflecting lower oil-related activity,
mainly in lower horsepower applications. On July 21, we declared a distribution of
$0.50 per unit attributable to the
second quarter of 2015, an increase of 10.5% over the second
quarter 2014 distribution.
"Our Offshore Services segment reported an adjusted pretax
profit of $2.1 million for the second
quarter of 2015. This sequential improvement is typical of the
second quarter compared to the seasonally-slower first quarter.
However, in a continuing very challenging market environment with
weak demand, and despite second quarter 2015 revenues that were
36.5% lower than revenues for the comparable quarter of 2014, we
have been able to report a modest profit almost entirely due to the
cumulative beneficial impact of cost reductions.
"During the second quarter we had $42.9
million of consolidated free cash flow, which includes
distributions from CSI Compressco but excludes amounts spent on
Maritech asset retirement obligations (see schedule G for a
reconciliation to GAAP cash from operations). This result was
driven by improvement in our cash earnings and continued reductions
in capital expenditures, as well as a cash expense of only
$3.8 million on Maritech abandonment
and decommissioning projects during the second quarter of 2015. We
continue to be focused on generation of free cash flow and
reduction of our debt. Both of these metrics continue to improve in
a challenging market due to the effectiveness of our customer
diversification and cost reductions, as well as increased revenues
from new products."
Divisional revenues, adjusted pretax earnings/(loss), adjusted
pretax margins, and adjusted EBITDA for the three months ended
June 30, 2015 and June 30, 2014 are summarized in the table
below:
Segment
Results
|
Three Months
Ended
|
|
June 30,
2015
|
|
June 30,
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
|
$
|
122,973
|
|
$
|
32,754
|
|
26.6%
|
|
$
|
41,491
|
|
|
$
|
116,650
|
|
$
|
17,082
|
|
14.6%
|
|
$
|
24,185
|
|
Production Testing
Division
|
34,842
|
|
(425)
|
|
(1.2)%
|
|
5,757
|
|
|
42,377
|
|
(238)
|
|
(0.6)%
|
|
6,839
|
|
Compression
Division
|
126,456
|
|
9,504
|
|
7.5%
|
|
30,917
|
|
|
32,015
|
|
6,527
|
|
20.4%
|
|
10,550
|
|
Offshore Services
segment
|
35,731
|
|
2,127
|
|
6.0%
|
|
5,015
|
|
|
56,241
|
|
3,929
|
|
7.0%
|
|
7,255
|
|
Eliminations and
other
|
(4,077)
|
|
(12)
|
|
0.3%
|
|
(14)
|
|
|
(6,341)
|
|
3
|
|
—
|
|
—
|
|
Subtotal
|
315,925
|
|
43,948
|
|
13.9%
|
|
83,166
|
|
|
240,942
|
|
27,303
|
|
11.3%
|
|
48,829
|
|
Corporate and
other
|
—
|
|
(12,831)
|
|
—
|
|
(10,703)
|
|
|
—
|
|
(9,756)
|
|
—
|
|
(8,046)
|
|
Interest expense, net
- Compression Division
|
—
|
|
(7,961)
|
|
—
|
|
—
|
|
|
—
|
|
(145)
|
|
—
|
|
—
|
|
Interest expense, net
- TTI, excluding Compression Division
|
—
|
|
(4,415)
|
|
—
|
|
—
|
|
|
—
|
|
(4,610)
|
|
—
|
|
—
|
|
Unusual charges and
Maritech(4)
|
394
|
|
(633)
|
|
—
|
|
—
|
|
|
1,547
|
|
(15,286)
|
|
—
|
|
—
|
|
As
reported
|
316,319
|
|
18,108
|
|
5.7%
|
|
72,463
|
|
|
242,489
|
|
(2,494)
|
|
(1.0)%
|
|
40,783
|
|
|
|
(1)
|
Segment Income Before
Taxes are adjusted. Refer to Schedule F for
reconciliation.
|
(2)
|
GAAP pre-tax margins
for second quarter 2015 are: Fluids Division, 26.5%; Production
Testing Division, (1.4)%; Compression Division, 1.2%; and, Offshore
Services segment, 5.9%. GAAP pretax margins for second quarter 2014
are: Fluids Division, 14.6%; Production Testing Division, (0.6)%;
Compression Division, 17.1%; and, Offshore Services segment, 3.3%.
Refer to Schedule B for GAAP dollar 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 unusual charges and reconciliations.
|
Unusual and Other Charges and Maritech
During the second quarter of 2015, TETRA incurred $320,000 of severance expense as staffing levels
were adjusted to reflect the lower activity levels. From June a
year ago to June this year and excluding CSI Compressco, the total
number of TETRA employees was reduced by 24%.
Second quarter 2015 earnings were favorably impacted by
approximately $2.8 million related to
the valuation allowance on U.S. deferred tax assets for
predominately U.S. income tax loss carry-forwards that impacted
earnings per share by $0.03. The
Company remains in a position to utilize its carry-forwards to
offset future cash taxes.
Maritech reported a pre-tax loss of $313,000 in the second quarter of 2015.
Net Debt
At June 30, 2015, the cash and
debt positions of TETRA and CSI Compressco LP 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 as noted below:
|
As of June 30,
2015
|
|
TETRA
|
|
CSI Compressco
LP
|
|
(In
Millions)
|
Non-restricted
cash
|
$
|
8.7
|
|
|
$
|
33.3
|
|
|
|
|
|
Revolver debt
outstanding
|
92.9
|
|
|
233.0
|
|
Current portion of
long-term debt
|
90.0
|
|
|
—
|
|
Senior Notes
outstanding
|
175.0
|
|
|
345.2
|
|
Net debt
|
$
|
349.2
|
|
|
$
|
544.9
|
|
Third Quarter 2015 Guidance
TETRA expects third quarter 2015 earnings to be within a range
of $0.07 to $0.09 per share.
Conference Call
TETRA will host a conference call to discuss second quarter 2015
results today, August 7, 2015, at
10:30 am 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.
Financial Statements, Schedules and Non-GAAP Reconciliation
Schedules
Schedule A: Consolidated Income Statement (Unaudited)
Schedule B: Financial Results By Segment (Unaudited)
Schedule C: Consolidated Balance Sheet (Unaudited)
Schedule D: Long-Term Debt
Schedule E: Second Quarter and YTD Unusual Charges
Schedule F: Non-GAAP Reconciliation to GAAP Financials
Schedule G: Non-GAAP Reconciliation to Free Cash Flow
Schedule H: 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.
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 2015, anticipated
benefits from CSI Compressco following the CSI acquisition,
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 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, 2014, 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
June
30,
|
|
Six Months
Ended
June
30,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
(In
Thousands)
|
Revenues
|
$
|
316,319
|
|
|
$
|
242,489
|
|
|
$
|
567,411
|
|
|
$
|
455,346
|
|
|
|
|
|
|
|
|
|
Cost of sales,
services, and rentals
|
207,391
|
|
|
185,007
|
|
|
374,054
|
|
|
349,974
|
|
Depreciation,
amortization, and accretion
|
39,067
|
|
|
22,007
|
|
|
77,410
|
|
|
45,047
|
|
Total cost of
revenues
|
246,458
|
|
|
207,014
|
|
|
451,464
|
|
|
395,021
|
|
Gross profit
|
69,861
|
|
|
35,475
|
|
|
115,947
|
|
|
60,325
|
|
|
|
|
|
|
|
|
|
General and
administrative expense
|
37,472
|
|
|
32,270
|
|
|
72,741
|
|
|
65,690
|
|
Interest expense,
net
|
12,340
|
|
|
4,604
|
|
|
25,226
|
|
|
9,315
|
|
Other (income)
expense, net
|
1,941
|
|
|
1,095
|
|
|
1,927
|
|
|
(1,503)
|
|
Income (loss) before
taxes and discontinued operations
|
18,108
|
|
|
(2,494)
|
|
|
16,053
|
|
|
(13,177)
|
|
Provision (benefit)
for income taxes
|
2,741
|
|
|
(944)
|
|
|
4,310
|
|
|
(5,537)
|
|
Net income
(loss)
|
15,367
|
|
|
(1,550)
|
|
|
11,743
|
|
|
(7,640)
|
|
Less: Net income
attributable to noncontrolling interest
|
(442)
|
|
|
(907)
|
|
|
(1,266)
|
|
|
(1,751)
|
|
Net income (loss)
attributable to TETRA stockholders
|
$
|
14,925
|
|
|
$
|
(2,457)
|
|
|
$
|
10,477
|
|
|
$
|
(9,391)
|
|
|
|
|
|
|
|
|
|
Basic per share
information:
|
|
|
|
|
|
|
|
Net income (loss)
attributable to TETRA stockholders
|
$
|
0.19
|
|
|
$
|
(0.03)
|
|
|
$
|
0.13
|
|
|
$
|
(0.12)
|
|
Weighted average shares
outstanding
|
79,165
|
|
|
78,525
|
|
|
79,037
|
|
|
78,416
|
|
|
|
|
|
|
|
|
|
Diluted per share
information:
|
|
|
|
|
|
|
|
Net income (loss)
attributable to TETRA stockholders
|
$
|
0.19
|
|
|
$
|
(0.03)
|
|
|
$
|
0.13
|
|
|
$
|
(0.12)
|
|
Weighted average shares
outstanding
|
79,915
|
|
|
78,525
|
|
|
79,506
|
|
|
78,416
|
|
Schedule B: Financial Results By Segment (Unaudited)
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
(In
Thousands)
|
Revenues by
segment:
|
|
|
|
|
|
|
|
Fluids
Division
|
$
|
122,973
|
|
|
$
|
116,650
|
|
|
$
|
222,261
|
|
|
$
|
221,795
|
|
Production Testing
Division
|
34,842
|
|
|
42,377
|
|
|
71,944
|
|
|
86,015
|
|
Compression
Division
|
126,456
|
|
|
32,015
|
|
|
229,344
|
|
|
61,779
|
|
Offshore
Division
|
|
|
|
|
|
|
|
Offshore
Services
|
35,731
|
|
|
56,241
|
|
|
47,515
|
|
|
91,571
|
|
Maritech
|
394
|
|
|
1,547
|
|
|
1,900
|
|
|
2,923
|
|
Intersegment
eliminations
|
(2,909)
|
|
|
(4,934)
|
|
|
(3,180)
|
|
|
(6,721)
|
|
Offshore Division
total
|
33,216
|
|
|
52,854
|
|
|
46,235
|
|
|
87,773
|
|
Eliminations and
other
|
(1,168)
|
|
|
(1,407)
|
|
|
(2,373)
|
|
|
(2,016)
|
|
Total
revenues
|
$
|
316,319
|
|
|
$
|
242,489
|
|
|
$
|
567,411
|
|
|
$
|
455,346
|
|
|
|
|
|
|
|
|
|
Gross profit
(loss) by segment:
|
|
|
|
|
|
|
|
Fluids
Division
|
$
|
40,354
|
|
|
$
|
26,273
|
|
|
$
|
65,720
|
|
|
$
|
50,664
|
|
Production Testing
Division
|
3,918
|
|
|
4,221
|
|
|
6,777
|
|
|
6,375
|
|
Compression
Division
|
21,150
|
|
|
11,085
|
|
|
43,937
|
|
|
21,050
|
|
Offshore
Division
|
|
|
|
|
|
|
|
Offshore
Services
|
4,690
|
|
|
4,780
|
|
|
(1,279)
|
|
|
(204)
|
|
Maritech
|
3
|
|
|
(10,358)
|
|
|
1,301
|
|
|
(16,484)
|
|
Intersegment
eliminations
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Offshore Division
total
|
4,693
|
|
|
(5,578)
|
|
|
22
|
|
|
(16,688)
|
|
Corporate overhead and
eliminations
|
(254)
|
|
|
(526)
|
|
|
(509)
|
|
|
(1,076)
|
|
Total gross
profit
|
$
|
69,861
|
|
|
$
|
35,475
|
|
|
$
|
115,947
|
|
|
$
|
60,325
|
|
|
|
|
|
|
|
|
|
Income (loss)
before taxes by segment:
|
|
|
|
|
|
|
|
Fluids
Division
|
$
|
32,583
|
|
|
$
|
17,059
|
|
|
$
|
50,320
|
|
|
$
|
35,536
|
|
Production Testing
Division
|
(472)
|
|
|
(249)
|
|
|
(433)
|
|
|
(3,047)
|
|
Compression
Division
|
1,498
|
|
|
5,477
|
|
|
3,904
|
|
|
10,664
|
|
Offshore
Division
|
|
|
|
|
|
|
|
Offshore
Services
|
2,095
|
|
|
1,833
|
|
|
(6,553)
|
|
|
(6,139)
|
|
Maritech
|
(313)
|
|
|
(10,698)
|
|
|
662
|
|
|
(17,237)
|
|
Intersegment
eliminations
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Offshore Division
total
|
1,782
|
|
|
(8,865)
|
|
|
(5,891)
|
|
|
(23,376)
|
|
Corporate overhead and
eliminations
|
(17,283)
|
|
|
(15,916)
|
|
|
(31,847)
|
|
|
(32,954)
|
|
Total income (loss)
before taxes
|
$
|
18,108
|
|
|
$
|
(2,494)
|
|
|
$
|
16,053
|
|
|
$
|
(13,177)
|
|
Please note that the above results by Segment are inclusive of
the unusual charges and expenses. Please see Schedule E for details
of those unusual charges and expenses.
Schedule C: Consolidated Balance Sheet (Unaudited)
|
June 30,
2015
|
|
December 31,
2014
|
|
(In
Thousands)
|
Balance
Sheet:
|
|
|
|
Cash (excluding
restricted cash)
|
$
|
41,941
|
|
|
$
|
48,384
|
|
Accounts receivable,
net
|
190,908
|
|
|
226,966
|
|
Inventories
|
181,942
|
|
|
189,357
|
|
Other current
assets
|
36,682
|
|
|
36,144
|
|
PP&E,
net
|
1,120,814
|
|
|
1,124,192
|
|
Other
assets
|
431,358
|
|
|
442,590
|
|
Total
assets
|
$
|
2,003,645
|
|
|
$
|
2,067,633
|
|
|
|
|
|
Current portion of
decommissioning liabilities
|
$
|
11,521
|
|
|
$
|
12,758
|
|
Other current
liabilities
|
315,590
|
|
|
365,683
|
|
Long-term
debt
|
846,112
|
|
|
844,961
|
|
Long-term portion of
decommissioning liabilities
|
47,887
|
|
|
49,983
|
|
Other long-term
liabilities
|
27,491
|
|
|
28,647
|
|
Equity
|
755,044
|
|
|
765,601
|
|
Total liabilities and
equity
|
$
|
2,003,645
|
|
|
$
|
2,067,633
|
|
|
Note: 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.
|
June 30,
2015
|
|
December 31,
2014
|
|
(In
Thousands)
|
TETRA
|
|
|
|
Bank revolving line
of credit facility
|
$
|
92,900
|
|
|
$
|
90,000
|
|
TETRA Senior Notes at
various rates
|
265,000
|
|
|
305,000
|
|
Other debt
|
—
|
|
|
74
|
|
TETRA total
debt
|
357,900
|
|
|
395,074
|
|
Less current
portion
|
(90,000)
|
|
|
(90,074)
|
|
TETRA total
long-term debt
|
$
|
267,900
|
|
|
$
|
305,000
|
|
|
|
|
|
CSI Compressco
LP
|
|
|
|
CCLP Bank Credit
Facility
|
$
|
233,000
|
|
|
$
|
195,000
|
|
CCLP 7.25% Senior
Notes
|
345,212
|
|
|
344,961
|
|
CCLP total
debt
|
578,212
|
|
|
539,961
|
|
Less current
portion
|
—
|
|
|
—
|
|
CCLP total
long-term debt
|
$
|
578,212
|
|
|
$
|
539,961
|
|
Consolidated total
long-term debt
|
$
|
846,112
|
|
|
$
|
844,961
|
|
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, consolidated and segment income
before taxes, excluding the Maritech segment and unusual charges;
Adjusted EBITDA; and 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 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 is defined as the Company's adjusted income
before interest, taxes, depreciation, amortization and equity
compensation. Adjusted EBITDA 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.
Free Cash Flow is a non-GAAP measure that the Company defines as
cash from operations, excluding cash settlements of Maritech ARO,
less 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;
- to measure the performance of the Company as compared to its
peer group of companies; and
- to determine the ability of the Company to pay dividends to
shareholders.
Schedule E: Second Quarter and YTD Unusual Charges
|
Three Months
Ended
|
|
June 30,
2015
|
|
Income Before
Tax
|
Tax
|
Noncont.
Interest
|
Net
Income
|
Diluted
EPS
|
|
(In Thousands, Except
per Share Amounts)
|
Adjusted
|
$
|
18,741
|
|
$
|
5,623
|
|
$
|
464
|
|
$
|
12,654
|
|
$
|
0.16
|
|
Transaction related
costs
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Severance
expense
|
(320)
|
|
(40)
|
|
(22)
|
|
(258)
|
|
—
|
|
Deferred tax
valuation allowance and other related tax adj.
|
—
|
|
(2,842)
|
|
—
|
|
2,842
|
|
0.03
|
|
Maritech profit
(loss)
|
(313)
|
|
—
|
|
—
|
|
(313)
|
|
—
|
|
As
reported
|
$
|
18,108
|
|
$
|
2,741
|
|
$
|
442
|
|
$
|
14,925
|
|
$
|
0.19
|
|
|
|
|
|
|
|
|
June 30,
2014
|
|
Income (Loss)
Before Tax
|
Tax
|
Noncont.
Interest
|
Net Income
(Loss)
|
Diluted
EPS
|
|
(In Thousands, Except
per Share Amounts)
|
Adjusted
|
$
|
12,792
|
|
$
|
3,194
|
|
$
|
1,242
|
|
$
|
8,356
|
|
$
|
0.10
|
|
Transaction related
costs
|
(2,048)
|
|
(175)
|
|
(257)
|
|
(1,616)
|
|
(0.02)
|
|
Severance
expense
|
(115)
|
|
(10)
|
|
—
|
|
(105)
|
|
—
|
|
Maritech profit
(loss)
|
(10,698)
|
|
(3,745)
|
|
—
|
|
(6,953)
|
|
(0.09)
|
|
Other
|
(2,425)
|
|
(208)
|
|
(78)
|
|
(2,139)
|
|
(0.02)
|
|
As
reported
|
$
|
(2,494)
|
|
$
|
(944)
|
|
$
|
907
|
|
$
|
(2,457)
|
|
$
|
(0.03)
|
|
|
|
|
Six Months
Ended
|
|
June 30,
2015
|
|
Income Before
Tax
|
Tax
|
Noncont.
Interest
|
Net
Income
|
Diluted
EPS
|
|
(In Thousands, Except
per Share Amounts)
|
Adjusted
|
$
|
16,662
|
|
$
|
4,948
|
|
$
|
1,451
|
|
$
|
10,263
|
|
$
|
0.13
|
|
Transaction related
costs
|
(208)
|
|
(78)
|
|
(73)
|
|
(57)
|
|
—
|
|
Severance
expense
|
(1,063)
|
|
(195)
|
|
(112)
|
|
(756)
|
|
(0.01)
|
|
Effect of Deferred
Tax Valuation Allowance and other related tax adj
|
—
|
|
(365)
|
|
—
|
|
365
|
|
—
|
|
Maritech profit
(loss)
|
662
|
|
—
|
|
—
|
|
662
|
|
0.01
|
|
As
reported
|
$
|
16,053
|
|
$
|
4,310
|
|
$
|
1,266
|
|
$
|
10,477
|
|
$
|
0.13
|
|
|
|
|
|
|
|
|
June 30,
2014
|
|
Income
(Loss)Before Tax
|
Tax
|
Noncont.
Interest
|
Net Income
(Loss)
|
Diluted
EPS
|
|
(In Thousands, Except
per Share Amounts)
|
Adjusted
|
$
|
8,673
|
|
$
|
1,824
|
|
$
|
2,008
|
|
$
|
4,841
|
|
$
|
0.06
|
|
Transaction related
costs
|
595
|
|
(243)
|
|
(257)
|
|
1,095
|
|
0.01
|
|
Severance
expense
|
(784)
|
|
(249)
|
|
—
|
|
(535)
|
|
(0.01)
|
|
Maritech profit
(loss)
|
(17,237)
|
|
(6,033)
|
|
—
|
|
(11,204)
|
|
(0.14)
|
|
Other
|
(4,424)
|
|
(836)
|
|
—
|
|
(3,588)
|
|
(0.04)
|
|
As
reported
|
$
|
(13,177)
|
|
$
|
(5,537)
|
|
$
|
1,751
|
|
$
|
(9,391)
|
|
$
|
(0.12)
|
|
Schedule F: Non-GAAP Reconciliation to GAAP
Financials
|
Three Months
Ended
|
|
June 30,
2015
|
|
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
|
$
|
32,583
|
|
$
|
171
|
|
$
|
32,754
|
|
$
|
(76)
|
|
$
|
8,813
|
|
$
|
—
|
|
$
|
41,491
|
|
Production Testing
Division
|
(472)
|
|
47
|
|
(425)
|
|
14
|
|
6,168
|
|
—
|
|
5,757
|
|
Compression
Division
|
1,498
|
|
45
|
|
1,543
|
|
7,961
|
|
20,686
|
|
727
|
|
30,917
|
|
Offshore Services
Segment
|
2,095
|
|
32
|
|
2,127
|
|
—
|
|
2,888
|
|
—
|
|
5,015
|
|
Eliminations and
other
|
(12)
|
|
—
|
|
(12)
|
|
—
|
|
(2)
|
|
—
|
|
(14)
|
|
Subtotal
|
35,692
|
|
295
|
|
35,987
|
|
7,899
|
|
38,553
|
|
727
|
|
83,166
|
|
Corporate and
other
|
(17,271)
|
|
25
|
|
(17,246)
|
|
4,415
|
|
254
|
|
1,874
|
|
(10,703)
|
|
TETRA excl
Maritech
|
18,421
|
|
320
|
|
18,741
|
|
12,314
|
|
38,807
|
|
2,601
|
|
72,463
|
|
Maritech
|
(313)
|
|
—
|
|
(313)
|
|
26
|
|
260
|
|
—
|
|
(27)
|
|
Total
TETRA
|
$
|
18,108
|
|
$
|
320
|
|
$
|
18,428
|
|
$
|
12,340
|
|
$
|
39,067
|
|
$
|
2,601
|
|
$
|
72,436
|
|
|
|
|
|
|
|
|
|
|
June 30,
2014
|
|
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
|
$
|
17,059
|
|
$
|
23
|
|
$
|
17,082
|
|
$
|
(103)
|
|
$
|
7,206
|
|
$
|
—
|
|
$
|
24,185
|
|
Production Testing
Division
|
(249)
|
|
11
|
|
(238)
|
|
(57)
|
|
7,134
|
|
—
|
|
6,839
|
|
Compression
Division
|
5,477
|
|
905
|
|
6,382
|
|
145
|
|
3,788
|
|
235
|
|
10,550
|
|
Offshore Services
Segment
|
1,833
|
|
2,096
|
|
3,929
|
|
9
|
|
3,317
|
|
—
|
|
7,255
|
|
Eliminations and
other
|
3
|
|
—
|
|
3
|
|
—
|
|
(3)
|
|
—
|
|
—
|
|
Subtotal
|
24,123
|
|
3,035
|
|
27,158
|
|
(6)
|
|
21,442
|
|
235
|
|
48,829
|
|
Corporate and
other
|
(15,919)
|
|
1,553
|
|
(14,366)
|
|
4,610
|
|
526
|
|
1,184
|
|
(8,046)
|
|
TETRA excl
Maritech
|
8,204
|
|
4,588
|
|
12,792
|
|
4,604
|
|
21,968
|
|
1,419
|
|
40,783
|
|
Maritech
|
(10,698)
|
|
—
|
|
(10,698)
|
|
—
|
|
39
|
|
—
|
|
(10,659)
|
|
Total
TETRA
|
$
|
(2,494)
|
|
$
|
4,588
|
|
$
|
2,094
|
|
$
|
4,604
|
|
$
|
22,007
|
|
$
|
1,419
|
|
$
|
30,124
|
|
|
|
|
Six Months
Ended
|
|
June 30,
2015
|
|
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
|
$
|
50,320
|
|
$
|
284
|
|
$
|
50,604
|
|
$
|
(84)
|
|
$
|
17,532
|
|
$
|
—
|
|
$
|
68,052
|
|
Production Testing
Division
|
(433)
|
|
433
|
|
—
|
|
5
|
|
12,431
|
|
—
|
|
12,436
|
|
Compression
Division
|
3,904
|
|
452
|
|
4,356
|
|
15,867
|
|
40,731
|
|
1,204
|
|
62,158
|
|
Offshore Services
Segment
|
(6,553)
|
|
42
|
|
(6,511)
|
|
—
|
|
5,692
|
|
—
|
|
(819)
|
|
Eliminations and
other
|
(10)
|
|
—
|
|
(10)
|
|
—
|
|
(9)
|
|
—
|
|
(9)
|
|
Subtotal
|
47,228
|
|
1,211
|
|
48,439
|
|
15,788
|
|
76,377
|
|
1,204
|
|
141,808
|
|
Corporate and
other
|
(31,837)
|
|
60
|
|
(31,777)
|
|
9,412
|
|
512
|
|
2,993
|
|
(18,860)
|
|
TETRA excl
Maritech
|
15,391
|
|
1,271
|
|
16,662
|
|
25,200
|
|
76,889
|
|
4,197
|
|
122,948
|
|
Maritech
|
662
|
|
—
|
|
662
|
|
26
|
|
521
|
|
—
|
|
1,209
|
|
Total
TETRA
|
$
|
16,053
|
|
$
|
1,271
|
|
$
|
17,324
|
|
$
|
25,226
|
|
$
|
77,410
|
|
$
|
4,197
|
|
$
|
124,157
|
|
|
|
|
|
|
|
|
|
|
June 30,
2014
|
|
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
|
$
|
35,536
|
|
$
|
(2,252)
|
|
$
|
33,284
|
|
$
|
(107)
|
|
$
|
15,036
|
|
$
|
—
|
|
$
|
48,213
|
|
Production Testing
Division
|
(3,047)
|
|
1,758
|
|
(1,289)
|
|
(59)
|
|
14,697
|
|
—
|
|
13,349
|
|
Compression
Division
|
10,664
|
|
905
|
|
11,569
|
|
304
|
|
7,508
|
|
437
|
|
19,818
|
|
Offshore Services
Segment
|
(6,139)
|
|
2,130
|
|
(4,009)
|
|
36
|
|
6,649
|
|
—
|
|
2,676
|
|
Eliminations and
other
|
6
|
|
—
|
|
6
|
|
—
|
|
(6)
|
|
—
|
|
—
|
|
Subtotal
|
37,020
|
|
2,541
|
|
39,561
|
|
174
|
|
43,884
|
|
437
|
|
84,056
|
|
Corporate and
other
|
(32,960)
|
|
2,072
|
|
(30,888)
|
|
9,141
|
|
1,080
|
|
2,836
|
|
(17,831)
|
|
TETRA excl
Maritech
|
4,060
|
|
4,613
|
|
8,673
|
|
9,315
|
|
44,964
|
|
3,273
|
|
66,225
|
|
Maritech
|
(17,237)
|
|
—
|
|
(17,237)
|
|
—
|
|
83
|
|
—
|
|
(17,154)
|
|
Total
TETRA
|
$
|
(13,177)
|
|
$
|
4,613
|
|
$
|
(8,564)
|
|
$
|
9,315
|
|
$
|
45,047
|
|
$
|
3,273
|
|
$
|
49,071
|
|
Schedule G: Non-GAAP Reconciliation to Free Cash Flow
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June 30,
2015
|
|
June 30,
2014
|
|
June 30,
2015
|
|
June 30,
2014
|
|
(In
Thousands)
|
TTI
Consolidated
|
|
|
|
|
|
|
|
Cash from
operations
|
$
|
54,347
|
|
|
$
|
4,551
|
|
|
$
|
82,162
|
|
|
$
|
40,620
|
|
ARO
settlements
|
3,845
|
|
|
16,459
|
|
|
4,411
|
|
|
29,766
|
|
Capital expenditures,
net of sales proceeds
|
(23,188)
|
|
|
(23,154)
|
|
|
(69,326)
|
|
|
(47,990)
|
|
Free cash flow before
ARO settlements
|
35,004
|
|
|
(2,144)
|
|
|
17,247
|
|
|
22,396
|
|
|
|
|
|
|
|
|
|
CSI Compressco
LP
|
|
|
|
|
|
|
|
Cash from
operations
|
19,721
|
|
|
4,722
|
|
|
52,202
|
|
|
20,956
|
|
Capital expenditures,
net of sales proceeds
|
(19,934)
|
|
|
(4,878)
|
|
|
(57,092)
|
|
|
(10,882)
|
|
Free cash
flow
|
(213)
|
|
|
(156)
|
|
|
(4,890)
|
|
|
10,074
|
|
|
|
|
|
|
|
|
|
TTI
Only
|
|
|
|
|
|
|
|
Cash from
operations
|
34,626
|
|
|
(171)
|
|
|
29,960
|
|
|
19,665
|
|
ARO
settlements
|
3,845
|
|
|
16,459
|
|
|
4,411
|
|
|
29,766
|
|
Capital expenditures,
net of sales proceeds
|
(3,254)
|
|
|
(18,276)
|
|
|
(12,234)
|
|
|
(37,108)
|
|
Free cash flow before
ARO settlements
|
35,217
|
|
|
(1,988)
|
|
|
22,137
|
|
|
12,323
|
|
Distributions from CSI
Compressco LP
|
7,651
|
|
|
6,049
|
|
|
14,992
|
|
|
11,750
|
|
Free cash flow before
ARO settlements and after distributions from CSI Compressco
LP
|
$
|
42,868
|
|
|
$
|
4,061
|
|
|
$
|
37,129
|
|
|
$
|
24,073
|
|
Schedule H: Reconciliation of TETRA Net Debt
The following reconciliation of net debt is presented as a
supplement to financial results prepared in accordance with GAAP.
The Company defines net debt 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 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. A reconciliation of total debt to net debt as of
June 30, 2015 and December 31, 2014 is provided below.
|
June 30,
2015
|
|
December 31,
2014
|
|
(In
Thousands)
|
TETRA Net
Debt:
|
|
|
|
Total debt, excluding
CSI Compressco LP debt
|
$
|
357,900
|
|
|
$
|
395,074
|
|
Less: cash, excluding
CSI Compressco LP cash
|
(8,662)
|
|
|
(14,318)
|
|
Net debt
|
$
|
349,238
|
|
|
$
|
380,756
|
|
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SOURCE TETRA Technologies, Inc.