Tetra Technologies Inc 10-Q for FY2021 Q3

Tetra Technologies Inc (TTI)

10-Q 2021-11-01 For: 2021-09-30

Added on April 11, 2026

About this 10-Q

Tetra Technologies Inc filed this 10-Q on November 1, 2021, covering the quarter ended September 30, 2021 (FY2021 Q3).

Headline figures

Quarter ended September 30, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $95.47M; up 29.9% from $73.48M a year earlier
Net income: $2.51M; compared with a net loss of $13.3M a year earlier
Diluted EPS: $0.02; compared with -$0.10 a year earlier

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Delaware			74-2148293
(State or Other Jurisdiction of Incorporation or Organization)			(I.R.S. Employer Identification No.)

24955 Interstate 45 North
The Woodlands,
Texas			77380
(Address of Principal Executive Offices)			(Zip Code)


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


Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☒
		Emerging growth company	☐


TETRA Technologies, Inc. and Subsidiaries
Table of Contents
			Page
PART I—FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Statements of Operations			1
Consolidated Statements of Comprehensive Income (Loss)			2
Consolidated Balance Sheets			3
Consolidated Statements of Equity			5
Consolidated Statements of Cash Flows			7
Notes to Consolidated Financial Statements			8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			18
Item 3. Quantitative and Qualitative Disclosures about Market Risk			30
Item 4. Controls and Procedures			30

PART II—OTHER INFORMATION
Item 1. Legal Proceedings			31
Item 1A. Risk Factors			31
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			31
Item 3. Defaults Upon Senior Securities			31
Item 4. Mine Safety Disclosures			31
Item 5. Other Information			31
Item 6. Exhibits			32
SIGNATURES			33


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Revenues:
Product sales	$	46,340	$	50,009	$	153,955	$	187,475
Services	49,134		23,475		121,169		114,782
Total revenues	95,474		73,484		275,124		302,257
Cost of revenues:
Cost of product sales	31,805		32,342		106,265		122,661
Cost of services	39,614		21,225		102,976		95,628
Depreciation, amortization, and accretion	8,308		9,657		25,495		28,934
Impairments and other charges	—		97		449		97
Insurance recoveries	—		(52)		(110)		(126)
Total cost of revenues	79,727		63,269		235,075		247,194
Gross profit	15,747		10,215		40,049		55,063
General and administrative expense	18,714		16,123		56,077		60,333
Interest expense, net	4,083		4,338		12,373		14,234
Warrants fair value adjustment expense (income)	(3,164)		—		(143)		(327)
Other income, net	(6,968)		(788)		(14,295)		(1,308)
Income (loss) before taxes and discontinued operations	3,082		(9,458)		(13,963)		(17,869)
Provision for income taxes	587		101		2,139		1,877
Income (loss) before discontinued operations	2,495		(9,559)		(16,102)		(19,746)
Discontinued operations:
Income (loss) from discontinued operations, net of taxes	18		(12,039)		120,882		(49,195)
Net income (loss)	2,513		(21,598)		104,780		(68,941)
Less: (income) loss attributable to noncontrolling interest(1)	—		8,296		(306)		32,833
Net income (loss) attributable to TETRA stockholders	$	2,513	$	(13,302)	$	104,474	$	(36,108)
Basic net income (loss) per common share:
Income (loss) from continuing operations	$	0.02	$	(0.08)	$	(0.13)	$	(0.16)
Income (loss) from discontinued operations	—		(0.02)		0.96		(0.13)
Net income (loss) attributable to TETRA stockholders	$	0.02	$	(0.10)	$	0.83	$	(0.29)
Weighted average basic shares outstanding	126,733		125,893		126,489		125,789
Diluted net income (loss) per common share:
Income (loss) from continuing operations	$	0.02	$	(0.08)	$	(0.13)	$	(0.16)
Income (loss) from discontinued operations	—		(0.02)		0.96		(0.13)
Net income (loss) attributable to TETRA stockholders	$	0.02	$	(0.10)	$	0.83	$	(0.29)
Weighted average diluted shares outstanding	128,694		125,893		126,489		125,789


	September 30, 2021		December 31, 2020
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	41,863	$	67,252
Restricted cash	—		65
Trade accounts receivable, net of allowances of $414 in 2021 and $6,824 in 2020	79,118		64,078
Inventories	72,286		76,658
Assets of discontinued operations	—		710,006

Prepaid expenses and other current assets	16,121		13,487
Total current assets	209,388		931,546
Property, plant, and equipment:
Land and building	26,405		26,506
Machinery and equipment	343,181		365,296
Automobiles and trucks	16,335		18,446
Chemical plants	61,374		62,714
Construction in progress	4,575		1,526
Total property, plant, and equipment	451,870		474,488
Less accumulated depreciation	(364,522)		(377,632)
Net property, plant, and equipment	87,348		96,856
Other assets:
Patents, trademarks and other intangible assets, net of accumulated amortization of $69,186 in 2021 and $66,078 in 2020	38,071		41,487
Deferred tax assets, net	44		52

Operating lease right-of-use assets	38,795		43,448
Investments	22,412		2,675
Other assets	15,178		16,775
Total other assets	114,500		104,437
Total assets	$	411,236	$	1,132,839


	Common Stock Par Value		Additional Paid-In Capital		Treasury Stock		Accumulated Other Comprehensive Income (Loss)		Retained Deficit		Noncontrolling Interest		Total Equity
							Currency Translation

Balance at December 31, 2020	$	1,289	$	472,134	$	(19,484)	$	(49,914)	$	(413,665)	$	80,702	$	71,062
Net income for first quarter 2021	—		—		—		—		108,714		333		109,047
Translation adjustment, net of taxes of $0	—		—		—		(2,779)		—		—		(2,779)
Comprehensive income													106,268
Deconsolidation of CSI Compressco	—		—		—		7,168		—		(82,775)		(75,607)

Equity award activity	6		—		—		—		—		—		6
Treasury stock activity, net	—		—		(449)		—		—		—		(449)
Equity compensation expense	—		962		—		—		—		580		1,542

Other	—		(574)		—		—		—		219		(355)
Balance at March 31, 2021	$	1,295	$	472,522	$	(19,933)	$	(45,525)	$	(304,951)	$	(941)	$	102,467
Net loss for second quarter 2021	—		—		—		—		(6,753)		(27)		(6,780)
Translation adjustment, net of taxes of $0	—		—		—		2,157		—		—		2,157
Comprehensive loss													(4,623)
Dividend	—		—		—		—		—		(119)		(119)
Equity award activity	2		—		—		—		—		—		2
Treasury stock activity, net	—		—		(6)		—		—		—		(6)
Equity compensation expense	—		1,592		—		—		—		—		1,592
Other	—		(242)		—		—		—		(14)		(256)
Balance at June 30, 2021	$	1,297	$	473,872	$	(19,939)	$	(43,368)	$	(311,704)	$	(1,101)	$	99,057
Net income for third quarter 2021	—		—		—		—		2,513		—		2,513
Translation adjustment, net of taxes of $0	—		—		—		(2,150)		—		—		(2,150)
Comprehensive income													363

Equity award activity	4		—		—		—		—		—		4
Treasury stock activity, net	—		—		(6)		—		—		—		(6)
Equity compensation expense	—		1,057		—		—		—		—		1,057
Other	—		(385)		—		—		—		(12)		(397)
Balance at September 30, 2021	$	1,301	$	474,544	$	(19,945)	$	(45,518)	$	(309,191)	$	(1,113)	$	100,078


	Three Months Ended September 30, 2021
	Compression		Offshore Services		Total
Major classes of line items constituting loss from discontinued operations

Cost of revenues	$	—	$	(174)	$	(174)

General and administrative expense	—		6		6

Other expense, net	150		—		150
Pretax (loss) income from discontinued operations	(150)		168		18





Loss from discontinued operations attributable to TETRA stockholders					$	18


	Three Months Ended September 30, 2020
	Compression		Offshore Services		Total
Major classes of line items constituting loss from discontinued operations
Revenue	$	79,117	$	—	$	79,117
Cost of revenues	49,414		2		49,416
Depreciation, amortization, and accretion	19,948		—		19,948

General and administrative expense	9,133		170		9,303
Interest expense, net	13,293		—		13,293
Other expense, net	(1,348)		—		(1,348)
Pretax loss from discontinued operations	(11,323)		(172)		(11,495)


Income tax provision					544
Total loss from discontinued operations					(12,039)
Loss from discontinued operations attributable to noncontrolling interest					8,342
Loss from discontinued operations attributable to TETRA stockholders					$	(3,697)


	Nine Months Ended September 30, 2021
	Compression		Offshore Services		Total
Major classes of line items constituting income from discontinued operations
Revenue	$	18,968	$	—	$	18,968
Cost of revenues	11,474		(146)		11,328


General and administrative expense	2,796		6		2,802
Interest expense, net	4,336		—		4,336
Other expense, net	164		—		164
Pretax income from discontinued operations	198		140		338
Pretax gain on disposal of discontinued operations					120,574
Total pretax income from discontinued operations					120,912
Income tax provision					30
Total income from discontinued operations					120,882
Income from discontinued operations attributable to noncontrolling interest					(333)
Income from discontinued operations attributable to TETRA stockholders					$	120,549


	Nine Months Ended September 30, 2020
	Compression		Offshore Services		Total
Major classes of line items constituting loss from discontinued operations
Revenue	$	265,727	$	—	$	265,727
Cost of revenues	167,279		(332)		166,947
Depreciation, amortization, and accretion	59,972		—		59,972
Impairments and other charges	14,348		—		14,348
General and administrative expense	29,474		487		29,961
Interest expense, net	38,839		—		38,839
Other expense, net	2,932		—		2,932
Pretax loss from discontinued operations	(47,117)		(155)		(47,272)


Income tax provision					1,923
Total loss from discontinued operations					(49,195)
Loss from discontinued operations attributable to noncontrolling interest					32,957
Loss from discontinued operations attributable to TETRA stockholders					$	(16,238)


	September 30, 2021
	Offshore Services		Maritech		Total









Carrying amounts of major classes of liabilities included as part of discontinued operations
Trade payables	$	1,099	$	—	$	1,099

Accrued liabilities and other	—		228		228


Total liabilities associated with discontinued operations	$	1,099	$	228	$	1,327


	December 31, 2020
	Compression		Offshore Services		Maritech		Total
Carrying amounts of major classes of assets included as part of discontinued operations
Cash and cash equivalents	$	16,577	$	—	$	—	$	16,577
Trade receivables	43,837		—		—		43,837
Inventories	31,220		—		—		31,220
Other current assets	5,231		—		—		5,231
Property, plant, and equipment	551,401		—		—		551,401
Other assets	61,740		—		—		61,740
Total assets associated with discontinued operations	$	710,006	$	—	$	—	$	710,006

Carrying amounts of major classes of liabilities included as part of discontinued operations
Trade payables	$	19,766	$	1,222	$	—	$	20,988
Unearned Income	269		—		—		269
Accrued liabilities and other	36,318		352		228		36,898
Long-term debt, net	638,631		—		—		638,631
Other liabilities	37,253		—		—		37,253
Total liabilities associated with discontinued operations	$	732,237	$	1,574	$	228	$	734,039


	September 30, 2021		December 31, 2020
	(In Thousands)
Finished goods	$	62,510	$	68,121
Raw materials	3,604		2,910
Parts and supplies	4,524		4,001
Work in progress	1,648		1,626
Total inventories	$	72,286	$	76,658


	Scheduled Maturity	September 30, 2021		December 31, 2020

		(In Thousands)
Asset-based credit agreement	May 31, 2025	$	—	$	—
Term credit agreement (1)	September 10, 2025	164,228		199,894


Total long-term debt		$	164,228	$	199,894


	Nine Months Ended September 30,
	2021		2020
	(in thousands)
Supplemental cash flow information(1):
Interest paid	$	10,954	$	42,199
Income taxes paid	1,423		4,692
Increase (decrease) in accrued capital expenditures	463		(1,614)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
	(In Thousands)
Completion Fluids & Products
United States	$	22,529	$	15,013	$	72,353	$	85,073
International	26,162		36,937		87,466		113,460
	48,691		51,950		159,819		198,533
Water & Flowback Services
United States	42,234		19,767		106,630		97,016
International	4,549		1,767		8,675		6,708
	46,783		21,534		115,305		103,724




Total Revenue
United States	64,763		34,780		178,983		182,089
International	30,711		38,704		96,141		120,168
	$	95,474	$	73,484	$	275,124	$	302,257


			Fair Value Measurements Using
	Total as of		Quoted Prices in Active Markets for Identical Assets or Liabilities		Significant Other Observable Inputs		Significant Unobservable Inputs
Description	September 30, 2021		(Level 1)		(Level 2)		(Level 3)
	(In Thousands)
Investment in CSI Compressco	$	9,404	$	9,404	$	—	$	—
Investment in Standard Lithium	13,008		13,008		—		—
Warrants liability	(56)		—		—		(56)
Net asset	$	22,356


			Fair Value Measurements Using
	Total as of		Quoted Prices in Active Markets for Identical Assets or Liabilities		Significant Other Observable Inputs	Significant Unobservable Inputs
Description	December 31, 2020		(Level 1)		(Level 2)	(Level 3)
	(In Thousands)

Investment in Standard Lithium	$	2,675	$	2,675	—	$	—
Warrants liability	(198)		—		—	(198)
Net asset	$	2,477


	Three Months Ended September 30,						Period to Period Change
	2021			2020			2021 vs 2020		% Change
	(In Thousands, Except Percentages)
Revenues	$	95,474		$	73,484		$	21,990	29.9	%
Gross profit	15,747			10,215			5,532		54.2	%
Gross profit as a percentage of revenue	16.5		%	13.9		%
General and administrative expense	18,714			16,123			2,591		16.1	%
General and administrative expense as a percentage of revenue	19.6		%	21.9		%
Interest expense, net	4,083			4,338			(255)		(5.9)	%
Warrants fair value adjustment expense	(3,164)			—			(3,164)		NM(1)
Other income, net	(6,968)			(788)			(6,180)		NM
Income (loss) before taxes and discontinued operations	3,082			(9,458)			12,540		(132.6)	%
Income (loss) before taxes and discontinued operations as a percentage of revenue	3.2		%	(12.9)		%
Provision for income taxes	587			101			486		481.2	%
Income (loss) before discontinued operations	2,495			(9,559)			12,054		(126.1)	%
Discontinued operations:
Income (loss) from discontinued operations, net of taxes	18			(12,039)			12,057		(100.1)	%
Net income (loss)	2,513			(21,598)			24,111		(111.6)	%
Loss attributable to noncontrolling interest	—			8,296			(8,296)		(100.0)	%
Net income (loss) attributable to TETRA stockholders	$	2,513		$	(13,302)		$	15,815	(118.9)	%


	Nine Months Ended September 30,						Period to Period Change
	2021			2020			2021 vs 2020		% Change
	(In Thousands, Except Percentages)
Revenues	$	275,124		$	302,257		$	(27,133)	(9.0)	%
Gross profit	40,049			55,063			(15,014)		(27.3)	%
Gross profit as a percentage of revenue	14.6		%	18.2		%
General and administrative expense	56,077			60,333			(4,256)		(7.1)	%
General and administrative expense as a percentage of revenue	20.4		%	20.0		%
Interest expense, net	12,373			14,234			(1,861)		(13.1)	%
Warrants fair value adjustment expense (income)	(143)			(327)			184		(56.3)	%
Other income, net	(14,295)			(1,308)			(12,987)		NM
Income (loss) before taxes and discontinued operations	(13,963)			(17,869)			3,906		(21.9)	%
Income (loss) before taxes and discontinued operations as a percentage of revenue	(5.1)		%	(5.9)		%
Provision for income taxes	2,139			1,877			262		14.0	%
Income (loss) before discontinued operations	(16,102)			(19,746)			3,644		(18.5)	%
Discontinued operations:
Income (loss) from discontinued operations, net of taxes	120,882			(49,195)			170,077		(345.7)	%
Net income (loss)	104,780			(68,941)			173,721		(252.0)	%
(Income) loss attributable to noncontrolling interest	(306)			32,833			(33,139)		(100.9)	%
Net income (loss) attributable to TETRA stockholders	$	104,474		$	(36,108)		$	140,582	(389.3)	%


	Three Months Ended
	September 30, 2021
	Completion Fluids & Products			Water & Flowback Services			Corporate SG&A		Other and Eliminations		Total
	(In Thousands, Except Percents)
Revenue	$	48,691		$	46,783		$	—	$	—	$	95,474
Net income (loss) before taxes and discontinued operations	14,675			(1,807)			(8,408)		(1,378)		3,082
Adjustment to long-term incentives	—			—			656		—		656
Transactions and other expenses	630			693			27		—		1,350
Former CEO stock appreciation right expense	—			—			(466)		—		(466)
Restructuring expenses	254			41			—		—		295
Stock warrant fair value adjustment	—			—			—		(3,164)		(3,164)
Adjusted income (loss) before taxes and discontinued operations	$	15,559		$	(1,073)		$	(8,191)	$	(4,542)	$	1,753

Adjusted interest expense, net	(165)			2			—		4,246		4,083
Adjusted depreciation and amortization	1,712			6,192			—		225		8,129
Equity compensation expense	—			—			1,057		—		1,057
Adjusted EBITDA	$	17,106		$	5,121		$	(7,134)	$	(71)	$	15,022

Adjusted EBITDA as % of revenue	35.1		%	10.9		%					15.7		%

	Three Months Ended
	September 30, 2020
	Completion Fluids & Products			Water & Flowback Services			Corporate SG&A		Other and Eliminations		Total
	(In Thousands, Except Percents)
Revenue	$	51,950		$	21,534		$	—	$	—	$	73,484
Net income (loss) before taxes and discontinued operations	11,756			(7,746)			(8,958)		(4,510)		(9,458)
Severance	177			150			933		—		1,260
Transaction and other expenses	—			124			—		—		124
Restructuring and severance expenses	665			—			—		—		665

Impairments and other charges	(113)			—			97		—		(16)

Adjusted income (loss) before taxes and discontinued operations	$	12,485		$	(7,472)		$	(7,928)	$	(4,510)	$	(7,425)

Adjusted interest expense, net	(291)			(77)			—		4,706		4,338
Adjusted depreciation and amortization	1,710			7,584			—		170		9,464
Equity compensation expense	—			—			983		—		983
Adjusted EBITDA	$	13,904		$	35		$	(6,945)	$	366	$	7,360

Adjusted EBITDA as % of revenue	26.8		%	0.2		%					10.0		%


Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(1)	Maximum Number (or Approximate Dollar Value) of Shares that May Yet be Purchased Under the Publicly Announced Plans or Programs(1)
July 1 – July 31, 2021	1,760	(2)	$	3.14	—	$	—
August 1 – August 31, 2021	—		—		—	—
September 1 – September 30, 2021	—		—		—	—
Total	1,760				—	$	—


10.1**			Second Amendment to the Credit Agreement dated as of July 30, 2021, by and among TETRA, certain subsidiaries of TETRA party thereto, JPMorgan Chase Bank, N.A., as administrative agent, and each of the lenders and issuing banks party thereto (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed on August 2, 2021 (SEC File No. 001-13455)).
10.2**			Amendment to Credit Agreement dated as of July 30, 2021, by and among TETRA, Wilmington Trust, National Association, as administrative agent, and each of the lenders party thereto (incorporated by reference to Exhibit 10.2 to the Company’s Form 8-K filed on August 2, 2021 (SEC File No. 001-13455)).
31.1*			Certification Pursuant to Rule 13a-14(a) or 15d-14(a) of the Exchange Act, As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*			Certification Pursuant to Rule 13a-14(a) or 15d-14(a) of the Exchange Act, As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**			Certification Furnished Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**			Certification Furnished Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.SCH+			XBRL Taxonomy Extension Schema Document.
101.CAL+			XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF+			XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB+			XBRL Taxonomy Extension Label Linkbase Document.
101.PRE+			XBRL Taxonomy Extension Presentation Linkbase Document.
104*			Cover Page Interactive Data File - the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL documents


		TETRA Technologies, Inc.

Date:	November 1, 2021	By:	/s/Brady M. Murphy
			Brady M. Murphy
			President and Chief Executive Officer
			Principal Executive Officer

Date:	November 1, 2021	By:	/s/Elijio V. Serrano
			Elijio V. Serrano
			Senior Vice President and Chief Financial Officer
			Principal Financial Officer

Date:	November 1, 2021	By:	/s/Richard D. O’Brien
			Richard D. O’Brien
			Vice President – Finance and Global Controller
			Principal Accounting Officer


Dated:	November 1, 2021	/s/Brady M. Murphy
		Brady M. Murphy
		President and Chief Executive Officer
		TETRA Technologies, Inc.