THE WOODLANDS, Texas,
Dec. 10, 2019 /PRNewswire/ -- TETRA
Technologies, Inc. ("TETRA") (NYSE: TTI) announced that it is
implementing a series of cost reduction actions in response to the
slowdown in North America onshore
drilling and completions activity. In addition to reducing
field staff and field operating costs to align with lower activity,
management is restructuring its support functions to reduce
selling, general and administrative expenses at the corporate level
and at its North America onshore
operations by an estimated $8 million
to $10 million, on an annualized
basis.
TETRA also announced that it has entered into a long-term raw
material supply agreement with favorable pricing for its
North America chemicals operations
that is expected to reduce its cost to produce calcium chloride at
certain of its chemical production plants. As a result of
this reduction in the cost of raw materials, as well as general
market conditions in the oil and gas industry, TETRA is expected to
reduce its dependence on calcium chloride produced at its
El Dorado, Arkansas facility,
which uses a different production process, using mechanical
evaporation, and to record a non-cash impairment charge of between
$80 million and $100 million in the fourth quarter of 2019 to
write-down the value of its El
Dorado assets. This favorable long-term supply
agreement, in conjunction with TETRA's broad network of
North America chemical plants and
distribution facilities, is expected to help TETRA continue to
maintain adjusted EBITDA margins of 20%, or higher, for the
Completion Fluids and Products segment.
Company Overview
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.
Non-GAAP Financial Measure
This press release includes a non-GAAP financial measure,
Adjusted EBITDA margin, that is used as a supplemental financial
measure by management. Adjusted EBITDA margin is calculated
as Income or Loss Before Taxes + Interest Income or Expense +
Depreciation, Depletion and Amortization + Stock Option Expense +
Special Items, expressed as a percent of Revenue.
Cautionary Statement Regarding Forward Looking Statements
This press release includes certain statements that are or may
be deemed to be forward-looking statements. Generally, the use of
words such as "may," "will," "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 2019, estimated savings from cost reduction
initiatives, estimated goodwill and intangible asset impairments,
estimated earnings, and statements regarding our 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 in light of our experience and our perception of
historical trends, current conditions, expected future developments
and other factors we believe are appropriate in the circumstances.
Such statements are subject to a number of risks and uncertainties,
many of which are beyond our control. Investors are cautioned that
any such statements are not guarantees of future performance 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 Annual
Reports on Form 10-K for the year ended December 31, 2018, for TETRA Technologies, Inc.
("TTI") as well as other risks identified from time to time in the
reports on Form 10-Q and Form 8-K filed by TETRA with the
Securities and Exchange Commission. Statements in this presentation
are made as of the date on the cover unless stated otherwise
herein. TETRA is under no obligation to update or keep current the
information contained in this document.
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SOURCE TETRA Technologies, Inc.