8-K
TETRA TECHNOLOGIES INC (TTI)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported): February 25, 2025
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
(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 | New York Stock Exchange | ||||
| Preferred Share Purchase Right | N/A | New York Stock Exchange | 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. | ☐ |
Item 2.02. Results of Operations and Financial Condition.
On February 25, 2025, TETRA Technologies, Inc., a Delaware corporation (the “Company”), issued a news release announcing its financial results for the fourth quarter and total year ended December 31, 2024. The news release is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.
The information furnished in this Item 2.02 and in Exhibit 99.1 to this Current Report shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit Number | Description |
|---|---|
| 99.1 | News Release dated February 25, 2025issued by TETRA Technologies, Inc. |
| 104 | Cover Page Interactive Data File (embedded within the inline XBRL document) |
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: | February 25, 2025 |
| --- | --- |
3
Document
Exhibit 99.1
TETRA TECHNOLOGIES, INC. ANNOUNCES
FOURTH QUARTER AND TOTAL YEAR 2024 RESULTS AND
PROVIDES FIRST-HALF 2025 GUIDANCE
Fourth Quarter Financial Highlights
•Fourth quarter GAAP income from continuing operations was $102 million and GAAP diluted earnings per share from continuing operations was $0.77, inclusive of a non-cash $97.5 million favorable valuation allowance adjustment to deferred tax assets in the United States.
•Excluding unusual and non-recurring credits and expenses, adjusted income from continuing operations was $3.9 million, a 16% sequential improvement. Adjusted diluted net income per share from continuing operations was $0.03. Fourth quarter Adjusted EBITDA was $22.8 million.
•Fourth quarter revenue of $134.5 million decreased 5% sequentially.
•Fourth quarter net cash provided by operating activities was $5.6 million while adjusted free cash flow was a use of $9.3 million.
THE WOODLANDS, Texas, February 25, 2025 / PR Newswire / - TETRA Technologies, Inc. (“TETRA” or the “Company”) (NYSE:TTI) today announced fourth quarter and total year 2024 results.
Brady Murphy, TETRA’s President and Chief Executive Officer, stated, “Our fourth quarter results were in-line with our expectations as strong offshore activity led by deepwater Gulf of America as well as continued strength in our industrial chemicals business did not quite offset weaker than normal year-end U.S. onshore activity. Adjusted EBITDA margins of 17.0% improved from 16.6% in the third quarter and from 15.8% in the fourth quarter of 2023 despite lower revenue quarter over quarter and year over year. Our strategic focus on produced water has resulted in record high treatment and recycling volumes in the fourth quarter and the commercial announcement of TETRA Oasis Total Desalination Solution (TDS), an end-to-end desalination for beneficial re-use solution has been very well received. In early January we monetized our entire equity investment in Kodiak Gas Services Inc., generating approximately $19 million in cash proceeds. We enter 2025 with a strong and growing base business, a robust backlog of deep-water projects, momentum with our produced water desalination solution, stronger demand for our TETRA PureFlow battery electrolyte, a solid balance sheet and the necessary liquidity to continue to fund our growth initiatives.
In the past week we finished the completion work for the first of three TETRA CS Neptune wells that are scheduled for the first half of the year. When combining the TETRA CS Neptune three well project, the start of deepwater offshore projects in Brazil, our normal seasonal industrial calcium chemicals peak in the second quarter, and an expected material ramp up in Eos electrolyte orders, we expect net income before taxes in the first half of 2025 to be between $19 million and $34 million and adjusted EBITDA to be between $55 million and $65 million, which would be near or above a ten-year record high. This would compare to $13.8 million of net income before taxes and $53 million of Adjusted EBITDA from the first half of 2024. For the full year of 2025 we anticipate high single digit to low double-digit revenue growth and expect to generate over $50 million of free cash flow from our base business. The combination of these, plus advances with our produced water beneficial re-use solution, our Arkansas resource position and strategic partnerships, provides us the opportunity to continue to drive long-term shareholder value creation, aided by the tax loss carryforward.
In the fourth quarter we recognized a favorable adjustment of $97.5 million to deferred tax assets valuation allowance. This adjustment reflects TETRA’s profitable position in the United States over the recent years and an expectation of stronger profits in the coming years in the United States from the initiatives underway. In the past three years we have realized cash tax savings on approximately $97 million of U.S. income by utilizing our federal tax loss carryforward. We estimate that our U.S. federal tax loss carryforward can offset approximately $345 million of taxable pretax income in the United States in 2025 and beyond. The utilization of the loss carryforward and other deferred tax assets is expected to provide TETRA a cash flow tax benefit of approximately $97.5 million in the coming years.”
Certain assumptions underlying the valuation of our deferred tax assets are set forth in the Cautionary Statement Regarding Forward-Looking Statements.
Fourth Quarter Results
Fourth quarter 2024 revenue of $135 million decreased 5% from the third quarter of 2024, which included an early production facility (“EPF”) expansion sale in Argentina in the third quarter. Net income from continuing operations was $102 million, inclusive of $98 million of non-recurring net tax credits and compares to net income from continuing operations of $2.8 million in the third quarter of 2024, inclusive of $0.5 million of non-recurring charges and expenses. Diluted net income per share from continuing operations in the fourth quarter was $0.77 and compares to net income per share of $0.02 in the third quarter of 2024. Adjusted net income per share from continuing operations was $0.03 excluding unusual and non-recurring items in the fourth quarter, consistent with $0.03 in the third quarter 2024.
Fourth quarter Adjusted EBITDA of $22.8 million (17.0% of revenue) decreased 3% from the third quarter of 2024. The fourth quarter results included unrealized mark-to-market gains on investments of approximately $5 million which offset approximately $1 million of foreign exchange losses, mainly in Latin America. In January 2025, TETRA monetized its equity investment in Kodiak Gas Services, Inc. at an average price of $42.24, realizing cash proceeds of approximately $19 million.
Fourth quarter cash flow from operating activities was $5.6 million and compares to $19.9 million in the third quarter of 2024. Adjusted free cash flow was a use of $9.3 million in the fourth quarter of 2024 and compares to $6.3 million positive free cash flow in the third quarter of 2024. Fourth quarter and total year base business free cash flow was impacted by capital investments to increase our capacity in the Gulf of America and Brazil plus a buildup of inventory for the TETRA CS Neptune and Brazil projects and also for a buildup on calcium chloride inventory for the seasonal peak in northern Europe. These investments are expected to be monetized in the first half of 2025. Working capital at the end of year was $109 million. Working capital is defined as current assets, excluding cash and restricted cash, less current liabilities.
Brady Murphy, further stated, "As we look to the first half of 2025, including our traditional northern Europe seasonal industrial chemicals ramp up in the second quarter, we are seeing strong activity in our offshore completion fluids business given the robust backlog of deep-water projects in the Gulf of America and Brazil. We expect our Water & Flowback Services revenue to be flat to down slightly reflecting announcements by E&P operators to reduce capital spending in North America. We remain focused on our deploying our differentiating technologies, automation and on cost controls while minimizing capital expenditures in this segment. This segment will benefit from continued increases in treating produced water to bring a solution to address the disposal restrictions in the Permian Basin.”
Water & Flowback Services revenue for the fourth quarter was $66 million, down 14% quarter over quarter. Net income before taxes was $2.1 million (down from $4.7 million in the third quarter) while Adjusted EBITDA was $8.9 million (down from $11 million in the third quarter) reflecting a slowdown in US onshore activity and the third quarter EPF sale in Argentina. In December, TETRA announced the commercial launch of TETRA Oasis TDS, an end-to-end water treatment and desalination technology for beneficial re-use and mineral extraction applications for oil and gas well produced water. During the fourth quarter TETRA completed a commercial pilot project for the desalination of produced water for a major Delaware Basin oil and gas operator. The desalinated water was tested against published Texas Railroad Commission ("TRRC") standards for beneficial re-use water at both TETRA's laboratory and an independent third-party laboratory. Subsequently, the treated water was sent to a third party for Whole Effluent Toxicity ("WET") testing where it successfully passed all test parameters.
Completion Fluids & Products fourth-quarter 2024 revenue of $69 million increased 6% from the third quarter. Net income before taxes was $17.3 million in the fourth quarter (25.2% of revenue) compares to $19.1 million (29% of revenue) in the third quarter. Adjusted EBITDA of $19 million decreased $1.8 million sequentially. Completion Fluids & Products Adjusted EBITDA margins were 27.3% in the fourth quarter compared to 31.7% in the third quarter as margins were impacted by lower utilization and lower production volumes. The fourth quarter included $0.6 million in unrealized mark-to-market loss from investments. Excluding unrealized mark-to-market losses from investments, Adjusted EBITDA margins were 28%.
Strategic Initiatives Update
Brady Murphy stated, “In 2024, we invested $22 million on our strategic initiatives in Arkansas, net of reimbursement from our Evergreen Unit partner, to advance engineering and reservoir studies and began laying the
groundwork for plant site preparation and power infrastructure for our bromine project. We have ongoing negotiations with various bromine providers for bridging supply agreements that, if and when finalized, will give us flexibility on the timing of a plant start-up, allowing us to accumulate additional cash from our base business while also expecting to result in overall lower Arkansas project capital investments than previously communicated. These initiatives are expected to provide the volumes necessary for the stronger deepwater market plus the growing long-duration battery storage requirements. If and when the bridging supply agreement is finalized, we will announce our revised Arkansas investment and timing plans.
We are prioritizing our strategic initiatives on projects that can immediately impact our near-term results, with a focus on TETRA CS Neptune fluids in the Gulf of America, TETRA PureFlow Plus electrolyte shipments to Eos Energy Enterprises, and further advancing our water desalination commercial pilot units that are expected to subsequently transition into long duration contracts for commercial desalination plants. Long term we believe that lithium prices will rebound to levels that support increased investment in supply, especially from the U.S., and we remain focused on completing all the engineering studies required to define the lithium project economics. Until then, no investments are expected to be made on our lithium initiatives.”
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 from continuing operations, adjusted EBITDA, and adjusted EBITDA margin (Adjusted EBITDA as a percent of revenue) on consolidated and segment basis, adjusted income/(loss) from continuing operations, adjusted free cash flow from continuing operations, and net debt. Please see Schedules D through K for definitions and reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures.
(1) Base business adjusted free cash flow is defined as total adjusted free cash flow prior to TETRA’s investments in the Arkansas bromine and lithium projects. See Schedule H.
A summary of key financial metrics for the fourth quarter are as follows:
| Fourth Quarter 2024 Results | ||||||
|---|---|---|---|---|---|---|
| Three Months Ended | ||||||
| December 31, 2024 | September 30, 2024 | December 31, 2023 | ||||
| (in thousands, except per share amounts) | ||||||
| Revenue | $ | 134,504 | $ | 141,700 | $ | 153,126 |
| Income (loss) from continuing operations | 102,233 | 2,832 | (4,239) | |||
| Adjusted EBITDA before discontinued operations | 22,825 | 23,501 | 24,142 | |||
| GAAP diluted income earnings (loss) per share from continuing operations | 0.77 | 0.02 | (0.03) | |||
| Adjusted income from continuing operations | 0.03 | 0.03 | 0.03 | |||
| Net cash provided by operating activities | 5,635 | 19,870 | 18,875 | |||
| Total adjusted free cash flow(1) | $ | (9,324) | $ | 6,331 | $ | 20,073 |
(1) For the three months ended December 31, 2024, September 30, 2024 and December 31, 2023, total adjusted free cash flow includes $0.2 million of net reimbursements, $8.7 million of net payments and $2.0 million of net payments, respectively, for the Arkansas bromine and lithium projects.
At the end of the fourth quarter, unrestricted cash was $37 million and availability under our credit agreements was $75.0 million. Liquidity at the end of the year was $182.2 million. As of February 25, liquidity was $207 million. Liquidity is defined as unrestricted cash plus availability under our revolving credit facilities and includes the delayed draw feature. Long-term debt was $180 million, while net debt was $143 million. TETRA’s net leverage ratio was 1.77X at the end of the fourth quarter of 2024.
Fourth Quarter Non-Recurring Charges and Expenses
Fourth quarter 2024 non-recurring credits, charges and expenses are reflected on Schedule E and include a favorable adjustment of $97.5 million valuation allowance for deferred tax assets in the United States. This adjustment reflects TETRA being in a three-year cumulative positive pre-tax income position in the U.S. and expectations of continued favorable pre-tax income in the United States. TETRA has been utilizing the U.S. tax loss carryforward in the last three years and is expected to continue to do so into the future with increased profits coming from the CS Neptune projects, ramp up of long-duration battery electrolyte sales, plus realized gains on the sale of marketable securities. Non-recurring charges include $0.9 million of restructuring charges and other expenses.
Total Year Results
Total year revenue of $599 million decreased $27 million from 2023 with international operations driving the decline. Income from continuing operations improved by 3.5 times from income of $25.5 million in 2023 (inclusive of $8.8 million of unusual charges) to $113.6 million in 2024 (inclusive of $91.6 million of unusual benefits net of charges). Adjusted EBITDA decreased by $7 million on a revenue decrease of $27 million. Adjusted EBITDA in 2024 was $99 million compared to $107 million in 2023, and Adjusted EBITDA margins decreased 50 basis points to 16.6% from 17.1% in 2023. 2024 included unrealized gains on investments of $8.6 million while 2023 included unrealized gains on investments of $0.5 million. 2024 also included $2.4 million of foreign exchange losses.
A summary of key financial metrics for the total year are as follows:
| Twelve Months Ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| December 31, 2024 | December 31, 2023 | Change | % Change | ||||||||
| (In Millions) | |||||||||||
| Revenue | $ | 599.1 | $ | 626.3 | $ | (27.2) | (4) | % | |||
| Operating income from continuing operations | $ | 28.7 | $ | 31.7 | $ | (3.0) | (9) | % | |||
| % of revenue | 4.8 | % | 5.1 | % | (0.3) | % | |||||
| Adjusted EBITDA | $ | 99.4 | $ | 106.8 | $ | (7.4) | (7) | % | |||
| Adjusted EBITDA margin | 16.6 | % | 17.1 | % | (0.5) | % | |||||
| Cash flow from operations | $ | 36.5 | $ | 70.2 | $ | (33.7) | (48) | % | |||
| Adjusted free cash flow | $ | (23.2) | $ | 40.8 | $ | (64.0) | NM(1) | ||||
| Net debt | $ | 142.7 | $ | 105.0 | $ | 37.7 | 36 | % |
(1) Percent change is not meaningful
Completion Fluids & Products total year revenue for 2024 of $311 million decreased $1.7 million from 2023. Income before taxes was $82.9 million (27% of revenue) inclusive of $1.8 million of non-recurring credits. Adjusted EBITDA was $90.1 million (28.9% of revenue).
Water & Flowback Services total year revenue for 2024 of $288 million decreased $25.4 million from 2023. Income before taxes was $10.7 million (4% of revenue) inclusive of $1.7 million of unusual charges. Adjusted EBITDA was $38.1 million (13.2% of revenue).
Total Year Non-Recurring Charges and Expenses
Total year non-recurring credits, net of charges and expenses were $91.7 million, which are reflected on Schedules E and F and include the following: (a) $97.5 million favorable valuation adjustment to deferred taxes, (b) favorable $1.8 million adjustment to completion fluids buy-backs, (c) $1.4 million of unfavorable foreign exchange losses from prior year, (d) $5.5 million loss on debt extinguishment from the refinancing of our term loan in January 2024 and (e) $757,000 of other expenses and charges.
Conference Call
TETRA will host a conference call to discuss these results on February 26, 2025, at 10:30 a.m. Eastern Time. The phone number for the call is 1-800-836-8184. The conference call will also be available by live audio webcast. A replay of the conference call will be available at 1-888-660-6345 conference number 37885#, for one week following the conference call and the archived webcast will be available through the Company's website for thirty days following the conference call.
Investor Contact
For further information, please contact Elijio Serrano, CFO, TETRA Technologies, Inc. at (281) 367-1983 or via email at eserrano@onetetra.com.
Financial Statements, Schedules and Non-GAAP Reconciliation Schedules (Unaudited)
Schedule A: Consolidated Income Statement
Schedule B: Condensed Consolidated Balance Sheet
Schedule C: Consolidated Statements of Cash Flows
Schedule D: Statement Regarding Use of Non-GAAP Financial Measures
Schedule E: Non-GAAP Reconciliation of Adjusted Net Income (Loss) From Continuing Operations
Schedule F: Non-GAAP Reconciliation of Adjusted EBITDA
Schedule G: Non-GAAP Reconciliation of Net Debt
Schedule H: Non-GAAP Reconciliation to Total Adjusted Free Cash Flow and
Base Business Adjusted Free Cash Flow
Schedule I: Non-GAAP Reconciliation to Net Leverage Ratio
Schedule J: Non-GAAP Reconciliation to Return on Net Capital Employed
Schedule K: Non-GAAP Reconciliation of Adjusted EBITDA for Projected First Half 2025 and Actual First Half 2024
Company Overview
TETRA Technologies, Inc. is an energy services and solutions company focused on developing environmentally conscious services and solutions that help make people's lives better. With operations on six continents, the Company's portfolio consists of Energy Services, Industrial Chemicals, and Lithium Ventures. In addition to providing products and services to the oil and gas industry and calcium chloride for diverse applications, TETRA is expanding into the low-carbon energy market with chemistry expertise, key mineral acreage, and global infrastructure, helping to meet the demand for sustainable energy in the twenty-first century. Visit the Company's website at www.onetetra.com for more information.
Cautionary Statement Regarding Forward Looking Statements
This news release includes certain statements that are deemed to be forward-looking statements. Generally, the use of words such as “may,” “see,” “expectation,” “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 economic and operating conditions that are outside of our control, including statements concerning current trends in the oil and gas industry; potential revenue associated with prospective energy storage projects; measured, indicated and inferred mineral resources of lithium and/or bromine, the potential extraction of lithium and bromine from our Evergreen Unit and other leased acreage, the economic viability thereof, the demand for such resources, the timing and costs of such activities, and the expected production, profits and returns from such activities; the accuracy of our resources report, feasibility study and economic assessment regarding our lithium and bromine acreage; projections or forecasts concerning the Company's business activities, profitability, estimated future financial results, 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. With respect to the Company’s disclosures of measured, indicated and inferred mineral resources, including bromine and lithium carbonate equivalent concentrations, it is uncertain if all such resources will ever be economically developed. Investors are cautioned that mineral resources do not have demonstrated economic value and further exploration may not result in the estimation of a mineral reserve. Further, there are a number of uncertainties related to processing lithium, which is an inherently difficult process. Therefore, you are cautioned not to assume that all or any part of our resources can be economically or legally commercialized.
The discussions regarding the loss carryforwards and pretax income associated with the valuation of the deferred tax assets, including our NOLs, assume that activity from deepwater Gulf of America and United States onshore calcium chloride and zinc bromide sales continue consistent with the recent years; and that US onshore oil & gas activity is flat in the immediate years. We cannot guarantee that we will realize the full benefits of the NOLs or
that we will achieve the full estimates of pretax income included herein. Investors are cautioned that such estimates are not guarantees of future performance and that actual results or developments may differ from those projected concerning the valuation of the deferred tax assets.
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 several risks and uncertainties, many of which are beyond the control of the Company. With respect to the Company’s disclosures regarding the potential joint venture for the Evergreen Unit, it is uncertain about the ability of the parties to successfully negotiate one or more definitive agreements, the future relationship between the parties, and the ability to successfully and economically produce lithium and bromine from the Evergreen Unit. 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 Company's Annual Reports on Form 10-K, 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. Investors should not place undue reliance on forward-looking statements. Each forward-looking statement speaks only as of the date of the particular statement, and the Company undertakes no obligation to update or revise any forward-looking statements, except as may be required by law.
Schedule A: Consolidated Income Statement (Unaudited)
| Three Months Ended | Twelve Months Ended | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| December 31, 2024 | September 30, 2024 | December 31, 2023 | December 31, 2024 | December 31, 2023 | ||||||
| (in thousands, except per share amounts) | ||||||||||
| Revenues | $ | 134,504 | $ | 141,700 | $ | 153,126 | $ | 599,111 | $ | 626,262 |
| Cost of product sales and services | 94,015 | 98,391 | 112,070 | 423,428 | 438,172 | |||||
| Depreciation, amortization, and accretion | 9,354 | 8,837 | 8,624 | 35,721 | 34,329 | |||||
| Impairments and other charges | — | 109 | 2,189 | 109 | 2,966 | |||||
| Insurance recoveries | — | — | — | — | (2,850) | |||||
| Total cost of revenues | 103,369 | 107,337 | 122,883 | 459,258 | 472,617 | |||||
| Gross profit | 31,135 | 34,363 | 30,243 | 139,853 | 153,645 | |||||
| Exploration and pre-development costs | — | — | 5,283 | — | 12,119 | |||||
| General and administrative expense | 23,128 | 22,406 | 23,336 | 89,969 | 96,590 | |||||
| Interest expense, net | 5,232 | 5,096 | 5,677 | 22,465 | 22,349 | |||||
| Loss on debt extinguishment | — | — | — | 5,535 | — | |||||
| Other income, net | (4,617) | (715) | (422) | (6,858) | (9,112) | |||||
| Income (loss) before taxes and discontinued operations | 7,392 | 7,576 | (3,631) | 28,742 | 31,699 | |||||
| Provision (benefit) for income taxes | (94,841) | 4,744 | 608 | (84,878) | 6,220 | |||||
| Income (loss) from continuing operations | 102,233 | 2,832 | (4,239) | 113,620 | 25,479 | |||||
| Income (loss) from discontinued operations, net of taxes | 490 | (5,830) | 346 | (5,340) | 278 | |||||
| Net income (loss) | 102,723 | (2,998) | (3,893) | 108,280 | 25,757 | |||||
| Loss attributable to noncontrolling interest | 1 | — | 2 | 4 | 27 | |||||
| Net income (loss) attributable to TETRA stockholders | $ | 102,724 | $ | (2,998) | $ | (3,891) | $ | 108,284 | $ | 25,784 |
| Basic net income (loss) per common share: | ||||||||||
| Income (loss) from continuing operations | $ | 0.78 | $ | 0.02 | $ | (0.03) | $ | 0.87 | $ | 0.20 |
| Loss from discontinued operations | 0.00 | (0.04) | 0.00 | (0.04) | 0.00 | |||||
| Net income (loss) attributable to TETRA stockholders | $ | 0.78 | $ | (0.02) | $ | (0.03) | $ | 0.83 | $ | 0.20 |
| Weighted average basic shares outstanding | 131,809 | 131,579 | 130,079 | 131,279 | 129,568 | |||||
| Diluted net income (loss) per common share: | ||||||||||
| Income (loss) from continuing operations | $ | 0.77 | $ | 0.02 | $ | (0.03) | $ | 0.86 | $ | 0.20 |
| Loss from discontinued operations | 0.00 | (0.04) | 0.00 | (0.04) | 0.00 | |||||
| Net income (loss) attributable to TETRA stockholders | $ | 0.77 | $ | (0.02) | $ | (0.03) | $ | 0.82 | $ | 0.20 |
| Weighted average diluted shares outstanding | 132,812 | 132,029 | 130,079 | 132,231 | 131,243 |
Schedule B: Condensed Consolidated Balance Sheet (Unaudited)
| December 31,<br>2024 | December 31,<br>2023 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| (in thousands) | ||||||||||
| ASSETS | ||||||||||
| Current assets: | ||||||||||
| Cash and cash equivalents | $ | 36,987 | $ | 52,485 | ||||||
| Restricted cash | 221 | — | ||||||||
| Trade accounts receivable, net | 104,813 | 111,798 | ||||||||
| Inventories | 101,697 | 96,536 | ||||||||
| Prepaid expenses and other current assets | 25,910 | 21,196 | ||||||||
| Total current assets | 269,628 | 282,015 | ||||||||
| Plant, property, and equipment, net | 142,160 | 107,716 | ||||||||
| Deferred tax assets | 98,149 | 910 | ||||||||
| Operating lease right-of-use assets | 29,797 | 31,915 | ||||||||
| Investments | 28,159 | 17,354 | ||||||||
| Patents, trademarks and other intangible assets, net | 24,923 | 29,132 | ||||||||
| Other assets | 12,379 | 9,919 | ||||||||
| Total long-term assets | 335,567 | 196,946 | ||||||||
| Total assets | $ | 605,195 | $ | 478,961 | LIABILITIES AND EQUITY | |||||
| --- | --- | --- | --- | --- | ||||||
| Current liabilities: | ||||||||||
| Trade accounts payable | $ | 43,103 | $ | 52,290 | ||||||
| Compensation and employee benefits | 23,022 | 26,918 | ||||||||
| Operating lease liabilities, current portion | 8,861 | 9,101 | ||||||||
| Accrued taxes | 12,493 | 10,350 | ||||||||
| Accrued liabilities and other | 30,040 | 27,303 | ||||||||
| Current liabilities associated with discontinued operations | 5,830 | — | ||||||||
| Total current liabilities | 123,349 | 125,962 | ||||||||
| Long-term debt, net | 179,696 | 157,505 | ||||||||
| Operating lease liabilities | 25,041 | 27,538 | ||||||||
| Asset retirement obligations | 14,786 | 14,199 | ||||||||
| Deferred income taxes | 4,912 | 2,279 | ||||||||
| Other liabilities | 4,104 | 4,144 | ||||||||
| Total long-term liabilities | 228,539 | 205,665 | ||||||||
| TETRA stockholders' equity | 254,568 | 148,591 | ||||||||
| Noncontrolling interests | (1,261) | (1,257) | ||||||||
| Total equity | 253,307 | 147,334 | ||||||||
| Total liabilities and equity | $ | 605,195 | $ | 478,961 |
Schedule C: Consolidated Statements of Cash Flows (Unaudited)
| Three Months Ended | Twelve Months Ended | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| December 31, 2024 | September 30, 2024 | December 31, 2023 | December 31, 2024 | December 31, 2023 | ||||||
| (in thousands) | ||||||||||
| Operating activities: | ||||||||||
| Net income (loss) | $ | 102,723 | $ | (2,998) | $ | (3,893) | $ | 108,280 | $ | 25,757 |
| Reconciliation of net income (loss) to net cash provided by operating activities: | ||||||||||
| Depreciation, amortization, and accretion | 9,354 | 8,837 | 8,624 | 35,721 | 34,329 | |||||
| Impairments and other charges | — | 109 | 2,189 | 109 | 2,966 | |||||
| Gain on investments | (5,013) | (750) | (696) | (8,604) | (539) | |||||
| Provision (benefit) for deferred taxes | (95,522) | 967 | 71 | (94,455) | (734) | |||||
| Equity-based compensation expense | 1,668 | 1,481 | 6,423 | 6,572 | 10,622 | |||||
| Provision for credit losses | 254 | 130 | 95 | 217 | 285 | |||||
| Loss on debt extinguishment | — | — | — | 5,535 | — | |||||
| Amortization and expense of financing costs | 266 | 239 | 726 | 1,389 | 3,433 | |||||
| Insurance recoveries associated with damaged equipment | — | — | — | — | (2,850) | |||||
| Gain on sale of assets | (196) | (75) | (130) | (338) | (562) | |||||
| Other non-cash charges and credits | (316) | 26 | (315) | (1,076) | (1,231) | |||||
| Changes in operating assets and liabilities: | ||||||||||
| Accounts receivable | 2,693 | 26,634 | 12,565 | 5,702 | 20,165 | |||||
| Inventories | (6,826) | (13,953) | (3,215) | (8,784) | (23,205) | |||||
| Prepaid expenses and other current assets | (5,344) | 1,930 | 863 | (6,574) | 2,176 | |||||
| Trade accounts payable and accrued expenses | 1,744 | 606 | (3,021) | (4,140) | (128) | |||||
| Other | 150 | (3,313) | (1,411) | (3,034) | (278) | |||||
| Net cash provided by operating activities | 5,635 | 19,870 | 18,875 | 36,520 | 70,206 | |||||
| Investing activities: | ||||||||||
| Purchases of property, plant, and equipment | (14,888) | (14,573) | (7,912) | (60,680) | (38,152) | |||||
| Purchases of investments | — | (1,021) | — | (1,021) | (350) | |||||
| Proceeds from sale of investment | — | — | 3,900 | — | 3,900 | |||||
| Proceeds from sale of property, plant, and equipment | 261 | 2,284 | 6,003 | 2,917 | 6,661 | |||||
| Proceeds from insurance recoveries associated with damaged equipment | — | — | — | — | 2,850 | |||||
| Other investing activities | 12 | (93) | (100) | (275) | (1,936) | |||||
| Net cash provided by (used in) investing activities | (14,615) | (13,403) | 1,891 | (59,059) | (27,027) | |||||
| Financing activities: | ||||||||||
| Proceeds from credit agreement and long-term debt | 98 | 109 | 145 | 184,820 | 97,529 | |||||
| Principal payments on credit agreement and long-term debt | (98) | (109) | (2,056) | (163,579) | (100,497) | |||||
| Payments on finance lease obligations | (384) | (414) | (858) | (1,438) | (1,695) | |||||
| Debt issuance costs | (692) | — | — | (6,648) | — | |||||
| Shares withheld for taxes on equity-based compensation | (53) | (566) | — | (3,006) | — | |||||
| Other financing activities | — | — | — | (1,280) | — | |||||
| Net cash provided by (used in) financing activities | (1,129) | (980) | (2,769) | 8,869 | (4,663) | |||||
| Effect of exchange rate changes on cash | (1,696) | 774 | 662 | (1,607) | 377 | |||||
| Increase (decrease) in cash and cash equivalents and restricted cash | (11,805) | 6,261 | 18,659 | (15,277) | 38,893 | |||||
| Cash and cash equivalents at beginning of period | 49,013 | 42,752 | 33,826 | 52,485 | 13,592 | |||||
| Cash and cash equivalents and restricted cash at end of period associated with continuing operations | $ | 37,208 | $ | 49,013 | $ | 52,485 | $ | 37,208 | $ | 52,485 |
Schedule D: Statement Regarding Use of Non-GAAP Financial Measures
In addition to financial results determined in accordance with U.S. GAAP, this press release may include the following non-GAAP financial measures for the Company: adjusted net income per share, consolidated and segment Adjusted EBITDA, segment Adjusted EBITDA as a percent of revenue (“Adjusted EBITDA margin”), adjusted net income, total adjusted free cash flow, base business adjusted free cash flow, net debt, net leverage ratio, and return on net capital employed. The following schedules provide reconciliations of these non-GAAP financial measures to their most directly comparable U.S. GAAP measures. The non-GAAP financial measures should be considered in addition to, not as a substitute for, financial measures prepared in accordance with U.S. 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 and credits 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 net income is defined as the Company’s income (loss) before noncontrolling interests and discontinued operations, excluding unusual tax provision, unusual foreign exchange losses and certain special or other charges (or credits), and including noncontrolling interest attributable to continued operations. Adjusted net income 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 net income per share is defined as the Company’s diluted net income per share attributable to TETRA stockholders excluding certain special or other charges (or credits). Adjusted net income 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 is defined as net income (loss) before taxes and discontinued operations, excluding impairments, exploration and pre-development costs, certain special, non-recurring or other charges (or credits), including loss on debt extinguishment, interest, depreciation and amortization, income from collaborative arrangement and certain non-cash items such as equity-based compensation expense. The most directly comparable GAAP financial measure is net income (loss) before taxes and discontinued operations. Exploration and pre-development costs represent expenditures incurred to evaluate potential future development of TETRA’s lithium and bromine properties in Arkansas. Such costs include exploratory drilling and associated engineering studies. Income from collaborative arrangement represents the portion of exploration and pre-development costs that are reimbursable by our Evergreen Unit partner. We began capitalizing exploration and pre-development costs in January 2024 and therefore these costs are only excluded for periods prior to January 1, 2024. Exploration and pre-development costs and the associated income from collaborative arrangement were excluded from Adjusted EBITDA in prior periods because they did not relate to the Company’s current business operations. Adjustments to long-term incentives represent cumulative adjustments to valuation of long-term cash incentive compensation awards that are related to prior years. These costs are excluded from Adjusted EBITDA because they do not relate
to the current year and are considered to be outside of normal operations. Long-term incentives are earned over a three-year period and the costs are recorded over the three-year period they are earned. The amounts accrued or incurred are based on a cumulative of the three-year period. Equity-based compensation expense represents compensation that has been or will be paid in equity and is excluded from Adjusted EBITDA because it is a non-cash item. Adjusted EBITDA 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 and 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.
Total adjusted free cash flow is defined as cash from operations less capital expenditures net of sales proceeds and cost of equipment sold, less payments on financing lease obligations and including cash distributions to TETRA from investments and cash from sales of investments. Base business adjusted free cash flow is defined as Total adjusted free cash flow excluding TETRA’s investments in the Arkansas bromine and lithium projects. 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.
Total adjusted free cash flow does 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.
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 balance sheet. 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.
Net leverage ratio is defined as debt excluding financing fees & discount on term loan and including letters of credit and guarantees, less cash divided by trailing twelve months adjusted EBITDA for credit facilities. Adjusted EBITDA for credit facilities consists of adjusted EBITDA described above, less non-cash (gain) loss on sale of investments, (gain) loss on sales of assets and excluding certain special or other charges (or credits). Management primarily uses this metric to assess TETRA’s ability to borrow, reduce debt, add to cash balances, pay distributions, and fund investing and financing activities.
Return on net capital employed is defined as Adjusted EBIT divided by average net capital employed. Adjusted EBIT is defined as net income (loss) before taxes and discontinued operations, interest, and certain non-cash charges, and non-recurring adjustments. Net capital employed is defined as assets, excluding assets associated with the Arkansas bromine and lithium development, plus impaired assets, less cash and cash equivalents and restricted cash, and less current liabilities, excluding current liabilities associated with discontinued operations. Average net capital employed is calculated as the average of the beginning and ending net capital
employed for the respective periods. Return on net capital employed is used by management as a supplemental financial measure to assess the financial performance of the Company relative to assets, without regard to financing methods or capital structure.
Schedule E: Non-GAAP Reconciliation of Adjusted Net Income (Loss) From Continuing Operations (Unaudited)
| Three Months Ended | Twelve Months Ended | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| December 31, 2024 | September 30, 2024 | December 31, 2023 | December 31, 2024 | December 31, 2023 | ||||||
| (in thousands, except per share amounts) | ||||||||||
| Income (loss) before taxes and discontinued operations | $ | 7,392 | $ | 7,576 | $ | (3,631) | $ | 28,742 | $ | 31,699 |
| Provision (benefit) for income taxes | (94,841) | 4,744 | 608 | (84,878) | 6,220 | |||||
| Noncontrolling interest attributed to continuing operations | 1 | — | 2 | 4 | 27 | |||||
| Income (loss) from continuing operations | 102,232 | 2,832 | (4,241) | 113,616 | 25,452 | |||||
| Completion fluids buy-back allowance adjustment | (1,776) | — | — | (1,776) | — | |||||
| Exploration, pre-development costs and collaborative arrangements | — | — | 2,684 | — | 2,838 | |||||
| Insurance (recoveries) expenditures | — | — | — | — | (2,678) | |||||
| Adjustment to long-term incentives | — | — | 281 | — | 1,526 | |||||
| Transaction, restructuring, and other expenses | 852 | 592 | 258 | 1,349 | 502 | |||||
| Impairments and other charges | — | 109 | 2,189 | 109 | 2,966 | |||||
| Former CEO stock appreciation right expense | 103 | (190) | (789) | (701) | 237 | |||||
| Unusual foreign exchange loss | — | — | 2,444 | 1,387 | 2,444 | |||||
| Loss on debt extinguishment | — | — | — | 5,535 | — | |||||
| Unusual tax provision | (97,522) | — | 951 | (97,522) | 951 | |||||
| Adjusted income from continuing operations | $ | 3,889 | $ | 3,343 | $ | 3,777 | $ | 21,997 | $ | 34,238 |
| Diluted per share information | ||||||||||
| Income (loss) from continuing operations | $ | 0.77 | $ | 0.02 | $ | (0.03) | $ | 0.86 | $ | 0.20 |
| Adjusted income from continuing operations | $ | 0.03 | $ | 0.03 | $ | 0.03 | $ | 0.17 | $ | 0.26 |
| Diluted weighted average shares outstanding | 132,812 | 132,029 | 130,079 | 132,231 | 131,243 |
Schedule F: Non-GAAP Reconciliation of Adjusted EBITDA (Unaudited)
| Three Months Ended December 31, 2024 | ||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Completion Fluids & Products | Water & Flowback Services | Corporate SG&A | Other and Eliminations | Total | ||||||||||||||||||||||||
| (in thousands, except percents) | ||||||||||||||||||||||||||||
| Revenues | $ | 68,869 | $ | 65,635 | $ | — | $ | — | $ | 134,504 | ||||||||||||||||||
| Net income (loss) before taxes and <br>discontinued operations | 17,331 | 2,149 | (12,529) | 441 | 7,392 | |||||||||||||||||||||||
| Completion fluids buy-back allowance adjustment | (1,776) | — | — | — | (1,776) | |||||||||||||||||||||||
| Former CEO stock appreciation right expense | — | — | 103 | — | 103 | |||||||||||||||||||||||
| Transaction, restructuring and other expenses | 56 | 146 | 650 | — | 852 | |||||||||||||||||||||||
| Interest (income) expense, net | 633 | (75) | — | 4,674 | 5,232 | |||||||||||||||||||||||
| Depreciation, amortization, and accretion | 2,569 | 6,686 | — | 99 | 9,354 | |||||||||||||||||||||||
| Equity-based compensation expense | — | — | 1,668 | — | 1,668 | |||||||||||||||||||||||
| Adjusted EBITDA | $ | 18,813 | $ | 8,906 | $ | (10,108) | $ | 5,214 | $ | 22,825 | ||||||||||||||||||
| Adjusted EBITDA as a % of revenue | 27.3 | % | 13.6 | % | 17.0 | % | Three Months Ended September 30, 2024 | |||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |||||||||||||||
| Completion Fluids & Products | Water & Flowback Services | Corporate SG&A | Other and Eliminations | Total | ||||||||||||||||||||||||
| (in thousands, except percents) | ||||||||||||||||||||||||||||
| Revenues | $ | 65,131 | $ | 76,569 | $ | — | $ | — | $ | 141,700 | ||||||||||||||||||
| Net income (loss) before taxes and <br>discontinued operations | 19,119 | 4,674 | (10,779) | (5,438) | 7,576 | |||||||||||||||||||||||
| Impairments and other charges | — | — | 109 | — | 109 | |||||||||||||||||||||||
| Former CEO stock appreciation right expense | — | — | (190) | — | (190) | |||||||||||||||||||||||
| Transaction, restructuring and other expenses | 39 | 203 | 350 | — | 592 | |||||||||||||||||||||||
| Interest (income) expense, net | (942) | (5) | — | 6,043 | 5,096 | |||||||||||||||||||||||
| Depreciation, amortization, and accretion | 2,416 | 6,328 | — | 93 | 8,837 | |||||||||||||||||||||||
| Equity-based compensation expense | — | — | 1,481 | — | 1,481 | |||||||||||||||||||||||
| Adjusted EBITDA | $ | 20,632 | $ | 11,200 | $ | (9,029) | $ | 698 | $ | 23,501 | ||||||||||||||||||
| Adjusted EBITDA as a % of revenue | 31.7 | % | 14.6 | % | 16.6 | % | ||||||||||||||||||||||
| Three Months Ended December 31, 2023 | ||||||||||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |||||||||||||||
| Completion Fluids & Products | Water & Flowback Services | Corporate SG&A | Other and Eliminations | Total | ||||||||||||||||||||||||
| (in thousands, except percents) | ||||||||||||||||||||||||||||
| Revenues | $ | 72,556 | $ | 80,570 | $ | — | $ | — | $ | 153,126 | ||||||||||||||||||
| Net income (loss) before taxes and <br>discontinued operations | 10,984 | 2,855 | (11,929) | (5,541) | (3,631) | |||||||||||||||||||||||
| Impairments and other charges | 2,189 | — | — | — | 2,189 | |||||||||||||||||||||||
| Exploration and pre-development costs and collaborative arrangements | 2,684 | — | — | — | 2,684 | |||||||||||||||||||||||
| Adjustment to long-term incentives | — | — | 281 | — | 281 | |||||||||||||||||||||||
| Former CEO stock appreciation right expense | — | — | (789) | — | (789) | |||||||||||||||||||||||
| Transaction, restructuring and other expenses | 3 | — | 255 | — | 258 | |||||||||||||||||||||||
| Unusual foreign exchange loss | — | 2,444 | — | — | 2,444 | |||||||||||||||||||||||
| Interest (income) expense, net | (47) | (38) | — | 5,762 | 5,677 | |||||||||||||||||||||||
| Depreciation, amortization, and accretion | 2,508 | 6,019 | — | 96 | 8,623 | |||||||||||||||||||||||
| Equity-based compensation expense | — | — | 6,406 | — | 6,406 | |||||||||||||||||||||||
| Adjusted EBITDA | $ | 18,321 | $ | 11,280 | $ | (5,776) | $ | 317 | $ | 24,142 | ||||||||||||||||||
| Adjusted EBITDA as a % of revenue | 25.3 | % | 14.0 | % | 15.8 | % | ||||||||||||||||||||||
| Year Ended December 31, 2024 | ||||||||||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||||||||||||||
| Completion Fluids & Products | Water & Flowback Services | Corporate SG&A | Other and Eliminations | Total | ||||||||||||||||||||||||
| (in thousands, except percents) | ||||||||||||||||||||||||||||
| Revenue | $ | 311,301 | $ | 287,810 | $ | — | $ | — | $ | 599,111 | ||||||||||||||||||
| Net income (loss) before taxes and discontinued operations | 82,895 | 10,700 | (45,099) | (19,754) | 28,742 | |||||||||||||||||||||||
| Completion fluids buy-back allowance adjustment | (1,776) | — | — | — | (1,776) | |||||||||||||||||||||||
| Impairments and other charges | — | — | — | 109 | 109 | |||||||||||||||||||||||
| Former CEO stock appreciation right expense | — | — | (701) | — | (701) | |||||||||||||||||||||||
| Transaction, restructuring, and other expenses | (26) | 349 | 1,026 | — | 1,349 | |||||||||||||||||||||||
| Loss on debt extinguishment | — | — | — | 5,535 | 5,535 | |||||||||||||||||||||||
| Unusual foreign exchange (gain) loss | — | 1,387 | — | — | 1,387 | |||||||||||||||||||||||
| Interest (income) expense, net | (713) | 64 | — | 23,114 | 22,465 | |||||||||||||||||||||||
| Depreciation, amortization, and accretion | 9,733 | 25,631 | — | 357 | 35,721 | |||||||||||||||||||||||
| Equity-based compensation expense | — | — | 6,572 | — | 6,572 | |||||||||||||||||||||||
| Adjusted EBITDA | $ | 90,113 | $ | 38,131 | $ | (38,202) | $ | 9,361 | $ | 99,403 | ||||||||||||||||||
| Adjusted EBITDA as % of revenue | 28.9 | % | 13.2 | % | 16.6 | % | ||||||||||||||||||||||
| Year Ended December 31, 2023 | ||||||||||||||||||||||||||||
| Completion Fluids & Products | Water & Flowback Services | Corporate SG&A | Other and Eliminations | Total | ||||||||||||||||||||||||
| (in thousands, except percents) | ||||||||||||||||||||||||||||
| Revenue | $ | 313,030 | $ | 313,232 | $ | — | $ | — | $ | 626,262 | ||||||||||||||||||
| Net income (loss) before taxes and discontinued operations | 78,314 | 25,724 | (49,135) | (23,204) | $ | 31,699 | ||||||||||||||||||||||
| Insurance recoveries | (2,678) | — | — | — | (2,678) | |||||||||||||||||||||||
| Impairments and other charges | 2,189 | — | 777 | — | 2,966 | |||||||||||||||||||||||
| Exploration, pre-development costs | 2,838 | — | — | — | 2,838 | |||||||||||||||||||||||
| Adjustments to long-term incentives | — | — | 1,526 | — | 1,526 | |||||||||||||||||||||||
| Former CEO stock appreciation right expense | — | — | 237 | — | 237 | |||||||||||||||||||||||
| Transaction, restructuring and other expenses | — | — | 502 | — | 502 | |||||||||||||||||||||||
| Unusual foreign exchange (gain) loss | — | 2,444 | — | — | 2,444 | |||||||||||||||||||||||
| Interest (income) expense, net | (647) | 205 | — | 22,791 | 22,349 | |||||||||||||||||||||||
| Depreciation, amortization, and accretion | 9,053 | 24,876 | — | 400 | 34,329 | |||||||||||||||||||||||
| Equity-based compensation expense | — | — | 10,622 | — | 10,622 | |||||||||||||||||||||||
| Adjusted EBITDA | $ | 89,069 | $ | 53,249 | $ | (35,471) | $ | (13) | $ | 106,834 | ||||||||||||||||||
| 6749800000.0 | % | 4343300000.0 | % | $ | (33,687) | $ | 867 | |||||||||||||||||||||
| Adjusted EBITDA as % of revenue | 28.5 | % | 17.0 | % | 17.1 | % |
Schedule G: Non-GAAP Reconciliation of Net Debt (Unaudited)
The following reconciliation of net debt is presented as a supplement to financial results prepared in accordance with GAAP.
| December 31,<br>2024 | December 31,<br>2023 | |||
|---|---|---|---|---|
| (in thousands) | ||||
| Unrestricted Cash | $ | 36,987 | $ | 52,485 |
| Term Credit Agreement | 179,696 | 157,505 | ||
| Net debt | $ | 142,709 | $ | 105,020 |
Schedule H: Non-GAAP Reconciliation to Total Adjusted Free Cash Flow From Continuing Operations (Unaudited)
| Three Months Ended | Twelve Months Ended | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| December 31, 2024 | September 30, 2024 | December 31, 2023 | December 31, 2024 | December 31, 2023 | ||||||
| (in thousands) | ||||||||||
| Net cash provided by operating activities | $ | 5,635 | $ | 19,870 | $ | 18,875 | $ | 36,520 | $ | 70,206 |
| Capital expenditures, net of proceeds from asset sales | (14,627) | (12,289) | (1,909) | (57,763) | (31,491) | |||||
| Payments on financing lease obligations | (384) | (414) | (845) | (1,438) | (1,682) | |||||
| Purchases of investments | — | (1,021) | — | (1,021) | (350) | |||||
| Distributions from investments | 52 | 185 | 52 | 462 | 209 | |||||
| Proceeds from sale of investment | — | — | 3,900 | — | 3,900 | |||||
| Total Adjusted Free Cash Flow | $ | (9,324) | $ | 6,331 | $ | 20,073 | $ | (23,240) | $ | 40,792 |
| Total Adjusted Free Cash Flow | $ | (9,324) | $ | 6,331 | $ | 20,073 | $ | (23,240) | $ | 40,792 |
| Less Investments in Arkansas | $ | 220 | $ | (8,659) | $ | (1,972) | $ | (22,371) | $ | (4,792) |
| Base Business Adjusted Free Cash Flow | $ | (9,544) | $ | 14,990 | $ | 22,045 | $ | (869) | $ | 45,584 |
Schedule I: Non-GAAP Reconciliation to Net Leverage Ratio (Unaudited)
| Three Months Ended | Twelve Months Ended | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| December 31, 2024 | September 30, 2024 | June 30,<br>2024 | March 31,<br>2024 | December 31, 2024 | ||||||
| (in thousands) | ||||||||||
| Net income (loss) before taxes and<br><br>discontinued operations | $ | 7,392 | $ | 7,576 | $ | 12,479 | $ | 1,295 | $ | 28,742 |
| Completion fluids buy-back allowance adjustment | (1,776) | — | — | — | (1,776) | |||||
| Impairments and other charges | — | 109 | — | — | 109 | |||||
| Former CEO stock appreciation right expense | 103 | (190) | (428) | (186) | (701) | |||||
| Transaction, restructuring and other expenses | 852 | 592 | 37 | (135) | 1,346 | |||||
| Loss on debt extinguishment | — | — | — | 5,535 | 5,535 | |||||
| Unusual foreign exchange loss | — | — | 1,387 | — | 1,387 | |||||
| Interest (income) expense, net | 5,232 | 5,096 | 6,185 | 5,952 | 22,465 | |||||
| Depreciation, amortization, and accretion | 9,354 | 8,837 | 8,774 | 8,756 | 35,721 | |||||
| Equity-based compensation expense | 1,668 | 1,481 | 1,800 | 1,623 | 6,572 | |||||
| Non-cash (gain) loss on investments | (5,013) | (750) | (46) | (2,795) | (8,604) | |||||
| (Gain) loss on sale of assets | (196) | (75) | (38) | (29) | (338) | |||||
| Other debt covenant adjustments | 384 | 362 | 275 | 28 | 1,049 | |||||
| Debt covenant adjusted EBITDA | $ | 18,000 | $ | 23,038 | $ | 30,425 | $ | 20,044 | $ | 91,507 |
| December 31, 2024 | ||||||||||
| (in thousands, except ratio) | ||||||||||
| Term credit agreement | $ | 190,000 | ||||||||
| Capital lease obligations | 7,793 | |||||||||
| Other obligations | 1,280 | |||||||||
| ABL letters of credit and guarantees | 175 | |||||||||
| Total debt and commitments | 199,248 | |||||||||
| Unrestricted cash | 36,987 | |||||||||
| Net debt and commitments | $ | 162,261 | ||||||||
| Net leverage ratio | 1.77 |
Schedule J: Non-GAAP Reconciliation to Return on Net Capital Employed (Unaudited)
| Three Months Ended | Twelve Months Ended | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| December 31, 2024 | September 30, 2024 | June 30,<br>2024 | March 31,<br>2024 | December 31, 2024 | |||||||
| (in thousands) | |||||||||||
| Net income (loss) before taxes and<br><br>discontinued operations | $ | 7,392 | $ | 7,576 | $ | 12,479 | $ | 1,295 | $ | 28,742 | |
| Completion fluids buy-back allowance adjustment | (1,776) | — | — | — | (1,776) | ||||||
| Impairments and other charges | — | 109 | — | — | 109 | ||||||
| Former CEO stock appreciation right expense (credit) | 103 | (190) | (428) | (186) | (701) | ||||||
| Transaction, restructuring and other expenses | 852 | 592 | 37 | (135) | 1,346 | ||||||
| Loss on debt extinguishment | — | — | — | 5,535 | 5,535 | ||||||
| Unusual foreign exchange loss | — | — | 1,387 | — | 1,387 | ||||||
| Interest expense, net | 5,232 | 5,096 | 6,185 | 5,952 | 22,465 | ||||||
| Adjusted EBIT | $ | 11,803 | $ | 13,183 | $ | 19,660 | $ | 12,461 | $ | 57,107 | |
| December 31, 2024 | December 31, 2023 | ||||||||||
| (in thousands, except ratio) | |||||||||||
| Consolidated total assets | $ | 605,195 | $ | 478,961 | |||||||
| Plus: assets impaired in last twelve months | 109 | 2,966 | |||||||||
| Less: cash, cash equivalents and restricted cash | 37,208 | 52,485 | |||||||||
| Adjusted assets employed | $ | 568,096 | $ | 429,442 | |||||||
| Consolidated current liabilities | $ | 123,349 | $ | 125,962 | |||||||
| Less: current liabilities associated with discontinued operations | 5,830 | — | |||||||||
| Adjusted current liabilities | $ | 117,519 | $ | 125,962 | |||||||
| Net capital employed | $ | 450,577 | $ | 303,480 | |||||||
| Average net capital employed | $ | 377,029 | |||||||||
| Return on net capital employed for the <br>twelve months ended December 31, 2024 | 15.1 | % |
Schedule K: Non-GAAP Reconciliation of Adjusted EBITDA for Projected First Half 2025 and Actual First Half 2024
| Six Months Ended | ||||||
|---|---|---|---|---|---|---|
| June 30, 2024 | June 30, 2025 | |||||
| (in thousands) | Actual | Projected Range - Low to High | ||||
| Revenue | $ | 322,907 | $ | 325,000 | $ | 355,000 |
| Net income before taxes and<br><br>discontinued operations | 13,774 | 19,000 | 34,000 | |||
| Former CEO stock appreciation right expense | (614) | — | — | |||
| Transaction, restructuring and other expenses | (98) | — | — | |||
| Loss on debt extinguishment | 5,535 | — | — | |||
| Unusual foreign exchange loss | 1,387 | — | — | |||
| Interest (income) expense, net | 12,137 | 11,000 | 9,000 | |||
| Depreciation, amortization, and accretion | 17,530 | 21,000 | 19,000 | |||
| Equity-based compensation expense | 3,423 | 4,000 | 3,000 | |||
| Adjusted EBITDA | $ | 53,074 | $ | 55,000 | $ | 65,000 |