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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): July 31, 2024
 
TETRA Technologies, Inc.
(Exact Name of Registrant as Specified in Charter)
 
Delaware1-1345574-2148293
(State or Other Jurisdiction of Incorporation)(Commission File Number)(I.R.S. Employer Identification No.)
24955 Interstate 45 North
The Woodlands, Texas 77380
(Address of Principal Executive Offices, and Zip Code)

(281) 367-1983
Registrant’s Telephone Number, Including Area Code

                
(Former Name or Former Address, if Changed Since Last Report) 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
  ☐Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
  ☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
  ☐Pre-commencement communication pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
  ☐Pre-commencement communication pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common StockTTINew York Stock Exchange
Preferred Share Purchase RightN/ANew 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 July 31, 2024, TETRA Technologies, Inc., a Delaware corporation (the “Company”), issued a news release announcing its financial results for the second quarter of 2024 and a three-well deepwater TETRA CS Neptune fluids project in the Gulf of Mexico. 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 NumberDescription
99.1
104Cover Page Interactive Data File (embedded within the inline XBRL document)


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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: July 31, 2024
 
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Exhibit 99.1

image.jpg

TETRA TECHNOLOGIES, INC. SECURES THREE WELL
TETRA CS NEPTUNE FLUIDS DEEPWATER GULF OF MEXICO PROJECT AND
ANNOUNCES SECOND QUARTER 2024 FINANCIAL RESULTS

•Secured a three-well deepwater TETRA CS Neptune fluids project in the Gulf of Mexico with a super major operator that is scheduled to begin late in the fourth quarter of 2024.
•Second quarter revenue of $172 million increased 14% sequentially. Second quarter net income of $7.6 million.
•Second quarter net income per share was $0.06 and net income per share excluding unusual items was $0.07.
•Adjusted EBITDA of $30.2 million increased 32% sequentially, despite $1.1 million in foreign exchange losses.
•Second quarter net cash provided by operating activities of $24.8 million with total adjusted free cash flow of $9.4 million and base business adjusted free cash flow(1) of $19.2 million.

THE WOODLANDS, Texas, July 31, 2024 / PR Newswire / - TETRA Technologies, Inc. (“TETRA” or the “Company”) (NYSE:TTI) today announced second quarter 2024 financial results.

Brady Murphy, TETRA President and Chief Executive Officer, stated, “Despite overall lower US onshore completions activity in the second quarter, our results included sequential improvements in revenue of 14% and Adjusted EBITDA of 32% driven by strong performance from our Completion Fluids & Products Division. We achieved net cash provided by operating activities of $24.8 million, base business adjusted free cash flow(1) of $19.2 million, a 560 basis points sequential improvement in Water & Flowback Services Adjusted EBITDA margins (to 15.2%), and the award of a three-well TETRA CS Neptune fluids deepwater Gulf of Mexico project that is expected to begin late in the fourth quarter. The second-quarter results were achieved despite $1.1 million of foreign exchange losses.

Second quarter 2024 revenue of $172 million decreased 2% from the second quarter of 2023 but increased 14% from the first quarter of 2024. Net income of $7.6 million, inclusive of $1.0 million of non-recurring charges, compares to net income of $18.2 million in the second quarter of 2023, inclusive of $0.9 million of non-recurring
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credits, and to net income of $0.9 million in the first quarter of 2024, inclusive of $5.2 million of non-recurring charges.

“Second-quarter cash flow provided by operating activities was $24.8 million and compares to cash provided by operating activities of $28.4 million in the second quarter of 2023 and cash used in operating activities of $13.8 million in the first quarter of 2024. Base business adjusted free cash flow was $19.2 million while investments in our Arkansas bromine and lithium projects were $9.8 million, resulting in total adjusted free cash flow of $9.4 million in the second quarter of 2024 and compares to total adjusted free cash flow of $17.7 million in the second quarter of 2023 and a $29.6 million use of cash in the first quarter of 2024. Working capital at the end of the second quarter was $127 million and represents a $7.2 million decrease from the prior quarter end. Working capital is defined as current assets, excluding cash and restricted cash, less current liabilities. Our investments in Kodiak Gas Services, Inc. (“Kodiak”) and Standard Lithium Ltd. (“Standard Lithium”) were $12.3 million and $1.0 million, respectively as of June 30, 2024.

“Completion Fluids & Products experienced a strong quarter with revenue of $100 million, a sequential improvement of 29% driven primarily by strong seasonal European industrial chemicals volumes, with 28.9% adjusted EBITDA margins. Offshore completion fluids international activity was stronger in the second quarter relative to the first quarter while the timing of deepwater projects resulted in sequentially lower volumes in the Gulf of Mexico. Since the Gulf of Mexico is one of our largest deepwater markets, it had an impact on overall segment activity. Net income before taxes for the quarter was $26.7 million (26.6% of revenue) and compares to $19.8 million (25.6% of revenue) in the first quarter of 2024. Adjusted EBITDA was $28.9 million and compares to $21.8 million (28.1% of revenue) in the first quarter of 2024.

“We are very pleased to have secured a three-well deepwater Gulf of Mexico TETRA CS Neptune fluids project for a super major oil and gas operator. This multi-well award is a great milestone for the Company as it represents the second super major deepwater operator in the Gulf of Mexico to utilize TETRA CS Neptune fluids for their completion program and is the first TETRA CS Neptune fluids job in the Gulf of Mexico since the fourth quarter of 2019. Since that time, we have been diligently working a potential pipeline of TETRA CS Neptune fluids opportunities with numerous deepwater operators and it is very gratifying to see the hard and innovative work of our team paying off. We expect the first well completion will start in the fourth quarter of this year and the remaining wells to carry over through the first half of 2025.

“Water & Flowback Services revenue of $72 million declined 2% from the first quarter. Despite the slight revenue decline, Adjusted EBITDA margins of 15.2% improved sequentially by 560 basis points consistent with our expectations as we continue to focus on deploying automated technologies across all phases of this segment, including TETRA BlueLinx Automated Control System, TETRA SandStorm Advanced Cyclone Technology, and TETRA Automated Drillout Systems. Water & Flowback Services net income before taxes for the quarter was $3.2 million and compares to $0.7 million in the first quarter of 2024. Adjusted EBITDA of $10.9 million increased $3.9 million sequentially.”

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(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.

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 net income per share, Adjusted EBITDA, and Adjusted EBITDA Margin (Adjusted EBITDA as a percent of revenue) on consolidated and segment basis, 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. Please see Schedules E through J for reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures.

Second Quarter Results and Highlights

A summary of key financial metrics for the second quarter are as follows:
Three Months Ended
June 30,
2024		March 31, 2024June 30,
2023
(in thousands, except per share amounts)
Revenue$171,935 $150,972 $175,463 
Net income
7,640 915 18,197 
Adjusted EBITDA30,234 22,840 36,046 
Net income per share attributable to TETRA stockholders0.06 0.01 0.14 
Adjusted net income per share0.07 0.05 0.13 
Net cash provided by (used in) operating activities24,831 (13,816)28,372 
Total adjusted free cash flow(1)
$9,369 $(29,617)$17,711 
(1)     For the three months ended June 30, 2024, March 31, 2024 and June 30, 2023, total adjusted free cash flow includes $9.8 million, $4.1 million and $2.3 million, respectively, of investments in the Arkansas bromine and lithium projects.

Strategic Initiatives Update

Brady Murphy stated, “For our strategic initiatives, we invested $9.8 million, net of reimbursement from our partner, in Arkansas to advance engineering and reservoir studies and began laying the groundwork to put in place power infrastructure for our bromine project. This additional analysis and work has positioned us to publish a definitive feasibility study, that is in the final stages of review, for bromine from our Evergreen Brine Unit to meet the growing demands for oil and gas offshore completion fluids and the new market opportunity for our TETRA PureFlow+ electrolyte for the long duration energy storage market. The zinc bromide electrolyte demand is expected to grow materially beginning in 2025. Our produced water desalination for beneficial re-use continues to gain significant customer interest and despite some regulatory permitting delays on previously announced projects, we are seeing broader industry commitment to desalination solutions. We have expanded our confidential non-disclosure discussions for our proprietary solution with seven different operators across the Permian Basin, South Texas, Mid-Continent and Appalachia regions. We expect to have additional commercial pilot units in place in 2025 that over time are expected to convert into large scale production facilities.”

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Free Cash Flow, Balance Sheet and Income Taxes

    Cash provided by operating activities was $24.8 million in the second quarter and base business adjusted free cash flow, which excludes investments in Arkansas, was $19.2 million. Inclusive of $9.8 million of investments in Arkansas, total adjusted free cash flow was $9.4 million. At the end of the second quarter, unrestricted cash was $38 million and TETRA held an aggregate of $13.3 million in marketable securities between its holdings in Kodiak and Standard Lithium. Liquidity at the end of the second quarter was $180 million, inclusive of a $75 million delayed draw feature to fund our Arkansas bromine project. Liquidity is defined as unrestricted cash plus availability under the delayed draw from our Term Credit Agreement and availability under our credit agreements. Long-term debt, primarily with a January 2030 maturity, was $180 million, while net debt was $142 million. TETRA’s net leverage ratio was 1.6X at the end of the second quarter of 2024. TETRA’s return on net capital employed was 17.4% at the end of the second quarter of 2024.

Non-recurring Charges and Expenses

Non-recurring credits, charges and expenses are reflected on Schedule E and include the following:

•$1.4 million of prior year unusual foreign exchange losses
•$0.4 million of non-cash stock appreciation right credits

Unrealized gains on investments totaling $46,000 are included in both reported and adjusted earnings.

Conference Call

TETRA will host a conference call to discuss these results tomorrow, August 1, 2024 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 03425#, 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.

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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
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

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 recovery of the oil and gas industry; customer delays for international completion fluids related to global shipping and logistics issues; 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 Brine Unit and other leased acreage, the economic viability thereof, the demand for such resources, the timing and costs of such activities, and the expected revenues, 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 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. With respect to the Company’s disclosures of measured, indicated and inferred mineral resources, including bromine and lithium
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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. 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 Brine 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 Brine 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.
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Schedule A: Consolidated Income Statement (Unaudited)
Three Months Ended
June 30,
2024		March 31, 2024June 30,
2023
(in thousands, except per share amounts)
Revenues$171,935 $150,972 $175,463 
Cost of sales, services, and rentals119,908 111,114 117,074 
Depreciation, amortization, and accretion8,774 8,756 8,457 
Impairments and other charges— — 777 
Total cost of revenues128,682 119,870 126,308 
Gross profit43,253 31,102 49,155 
Exploration and pre-development costs— — 2,341 
General and administrative expense22,137 22,298 26,225 
Interest expense, net6,185 5,952 5,944 
Loss on debt extinguishment— 5,535 — 
Other income (expense), net
2,452 (3,978)(6,435)
Income before taxes and discontinued operations
12,479 1,295 21,080 
Provision for income taxes4,839 380 2,875 
Income before discontinued operations
7,640 915 18,205 
Discontinued operations:
Loss from discontinued operations, net of taxes
— — (8)
Net income
7,640 915 18,197 
Loss attributable to noncontrolling interest
3 — 18 
Net income attributable to TETRA stockholders
$7,643 $915 $18,215 
Basic per share information:
Net income attributable to TETRA stockholders
$0.06 $0.01 $0.14 
Weighted average shares outstanding131,263130,453 129,460
Diluted per share information:
Net income attributable to TETRA stockholders
$0.06 $0.01 $0.14 
Weighted average shares outstanding132,169 132,123 129,925

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Schedule B: Condensed Consolidated Balance Sheet (Unaudited)
 June 30,
2024		December 31,
2023
(in thousands)
 (unaudited) 
ASSETS  
Current assets:  
Cash and cash equivalents$37,713$52,485
Restricted cash5,039—
Trade accounts receivable140,805111,798
Inventories
82,78096,536
Prepaid expenses and other current assets
23,28421,196
Total current assets
289,621282,015
Property, plant, and equipment, net121,584107,716
Other intangible assets, net27,02629,132
Operating lease right-of-use assets30,21731,915
Investments20,42717,354
Other assets10,85010,829
Total long-term assets210,104196,946
Total assets$499,725$478,961
LIABILITIES AND EQUITY  
Current liabilities:  
Trade accounts payable
$53,069$52,290
Compensation and employee benefits17,11126,918
Operating lease liabilities, current portion8,5959,101
Accrued taxes13,97710,350
Accrued liabilities and other27,58427,303
Total current liabilities
120,336125,962
Long-term debt, net179,670157,505
Operating lease liabilities25,95727,538
Asset retirement obligations14,77214,199
Deferred income taxes2,2842,279
Other liabilities3,1284,144
Total long-term liabilities225,811205,665
Commitments and contingencies  
TETRA stockholders’ equity154,838148,591
Noncontrolling interests(1,260)(1,257)
Total equity153,578147,334
Total liabilities and equity$499,725$478,961
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Schedule C: Consolidated Statements of Cash Flows (Unaudited)
 Three Months Ended
 June 30, 2024March 31, 2024June 30, 2023
(in thousands)
Operating activities:  
Net income
$7,640 $915 $18,197 
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation, amortization, and accretion
8,775 8,755 8,457 
Impairments and other charges— — 777 
Gain on investments
(46)(2,795)(908)
Equity-based compensation expense
1,800 1,623 1,492 
Provision for (recovery of) credit losses(52)(115)741 
Amortization and expense of financing costs504 380 897 
Loss on debt extinguishment
— 5,535 — 
Gain on sale of assets
(38)(29)(111)
Other non-cash credits(133)(553)(637)
Changes in operating assets and liabilities:
  
Accounts receivable
(4,020)(19,605)(13,140)
Inventories
10,453 1,542 2,764 
Prepaid expenses and other current assets
758 (3,918)(2,254)
Trade accounts payable and accrued expenses
(913)(5,577)11,622 
Other
103 26 475 
Net cash provided by (used in) operating activities
24,831 (13,816)28,372 
Investing activities:  
Purchases of property, plant, and equipment, net
(15,392)(15,827)(10,490)
Proceeds from sale of property, plant, and equipment121 251 208 
Purchase of investments
— — (250)
Other investing activities
(22)(172)(275)
Net cash used in investing activities
(15,293)(15,748)(10,807)
Financing activities:  
Proceeds from credit agreements and long-term debt157 184,456 44,413 
Principal payments on credit agreements and long-term debt(157)(163,215)(50,875)
Payments on financing lease obligations(363)(277)(431)
Debt issuance costs
(679)(5,277)— 
Shares withheld for taxes on equity-based compensation(48)(2,339)— 
Other financing activities
(1,280)— — 
Net cash provided by (used in) financing activities
(2,370)13,348 (6,893)
Effect of exchange rate changes on cash(355)(330)320 
Increase (decrease) in cash and cash equivalents
6,813 (16,546)10,992 
Cash and cash equivalents at beginning of period 35,939 52,485 16,683 
Cash, cash equivalents and restricted cash at end of period
$42,752 $35,939 $27,675 
Supplemental cash flow information: 
Interest paid
$5,424 $5,406 $4,899 
Income taxes paid$2,558 $433 $654 
Accrued capital expenditures at end of period
$8,073 $3,908 $3,142 
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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 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 strategic 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
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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 discontinued operations, 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.
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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 (Unaudited)
Three Months Ended
June 30, 2024March 31, 2024June 30, 2023
(in thousands, except per share amounts)
Income before taxes and discontinued operations
$12,479 $1,295 $21,080 
Provision for income taxes
4,839 380 2,875 
Loss attributed to noncontrolling interest
3 — 18 
Income from continuing operations
7,643 915 18,223 
Insurance recoveries
— — (5)
Impairments and other charges— — 777 
Exploration and pre-development costs— — 2,341 
Adjustment to long-term incentives— — 322 
Former CEO stock appreciation right credit
(428)(186)329 
Transaction, legal, and other expenses37 (135)57 
Loss on debt extinguishment
— 5,535 — 
Income from collaborative arrangements
— — (4,749)
Unusual foreign exchange loss1,387 — — 
Adjusted net income$8,639 $6,129 $17,295 
Diluted per share information
Net income attributable to TETRA stockholders
$0.06 0$0.01 $0.14 
Adjusted net income$0.07 $0.05 $0.13 
Diluted weighted average shares outstanding132,169 132,123 129,925 
12

Schedule F: Non-GAAP Reconciliation of Adjusted EBITDA (Unaudited)
Three Months Ended June 30, 2024
Completion Fluids & ProductsWater & Flowback ServicesCorporate SG&A
Corporate Other
Total
(in thousands, except percents)
Revenues$100,019 $71,916 $— $— $171,935 
Net income (loss) before taxes and
discontinued operations		26,653 3,156 (10,689)(6,641)12,479 
Former CEO stock appreciation right credit
— — (428)— (428)
Transaction, restructuring, and other expenses
37 — — — 37 
Unusual foreign exchange loss
— 1,387 — — 1,387 
Interest (income) expense, net
(135)68 — 6,252 6,185 
Depreciation, amortization, and accretion
2,361 6,329 — 84 8,774 
Equity-based compensation expense— — 1,800 — 1,800 
Adjusted EBITDA$28,916 $10,940 $(9,317)$(305)$30,234 
Adjusted EBITDA as a % of revenue28.9 %15.2 %17.6 %
Three Months Ended March 31, 2024
Completion Fluids & ProductsWater & Flowback ServicesCorporate SG&A
Corporate Other
Total
(in thousands, except percents)
Revenues$77,282 $73,690 $— $— $150,972 
Net income (loss) before taxes and
discontinued operations		19,792 721 (11,101)(8,117)1,295 
Former CEO stock appreciation right credit
— — (186)— (186)
Transaction, restructuring, and other expenses
(159)— 24 — (135)
Loss on debt extinguishment— — — 5,535 5,535 
Interest (income) expense, net
(269)76 — 6,145 5,952 
Depreciation, amortization, and accretion
2,387 6,288 — 81 8,756 
Equity-based compensation expense— — 1,623 — 1,623 
Adjusted EBITDA$21,751 $7,085 $(9,640)$3,644 $22,840 
Adjusted EBITDA as a % of revenue28.1 %9.6 %15.1 %
13

Three Months Ended June 30, 2023
Completion Fluids & ProductsWater & Flowback ServicesCorporate SG&A
Corporate Other
Total
(in thousands, except percents)
Revenues$98,222 $77,241 $— $— $175,463 
Net income (loss) before taxes and
discontinued operations		31,956 8,014 (12,595)(6,295)21,080 
Insurance recoveries(5)— — — (5)
Impairments and other charges— — 777 — 777 
Exploration and pre-development costs, and collaborative arrangements
(2,408)— — — (2,408)
Adjustment to long-term incentives
— — 322 — 322 
Former CEO stock appreciation right credit
— — 329 — 329 
Transaction, restructuring, and other expenses
— — 57 — 57 
Interest (income) expense, net104 27 — 5,813 5,944 
Depreciation, amortization, and accretion
2,193 6,172 — 93 8,458 
Equity-based compensation expense— — 1,492 — 1,492 
Adjusted EBITDA$31,840 $14,213 $(9,618)$(389)$36,046 
Adjusted EBITDA as a % of revenue32.4 %18.4 %20.5 %
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.
June 30,
2024		December 31,
2023
(in thousands)
Unrestricted Cash$37,713$52,485 
Term Credit Agreement$179,670 $157,505 
Net debt$141,957 $105,020 
Schedule H: Non-GAAP Reconciliation to Total Adjusted Free Cash Flow and
Base Business Adjusted Free Cash Flow (Unaudited)
Three Months EndedSix Months Ended
June 30, 2024March 31, 2024June 30, 2023June 30, 2024June 30, 2023
(in thousands)
Net cash provided by (used in) operating activities$24,831 $(13,816)$28,372 $11,015 $37,357 
Capital expenditures, net of proceeds from asset sales
(15,271)(15,576)(10,282)(30,847)(22,777)
Payments on financing lease obligations(363)(277)(431)(640)(689)
Distributions from investments172 52 52 224 104 
Total Adjusted Free Cash Flow
$9,369 $(29,617)$17,711 $(20,248)$13,995 
Total Adjusted Free Cash Flow$9,369 $(29,617)$17,711 $(20,248)$13,995 
Less Investments in Arkansas
(9,829)(4,103)(2,341)(13,932)(3,175)
Base Business Adjusted Free Cash Flow
$19,198 $(25,514)$20,052 $(6,316)$17,170 

14

Schedule I: Non-GAAP Reconciliation to Net Leverage Ratio (Unaudited)
Three Months EndedTwelve Months Ended
June 30, 2024March 31, 2024December 31,
2023		September 30, 2023June 30, 2024
(in thousands)
Net income (loss) before taxes and
discontinued operations		12,479 $1,295 $(3,631)$6,716 $16,859 
Insurance recoveries— — 3 174 177 
Impairments and other charges— — 2,189 — 2,189 
Exploration, pre-development costs, and collaborative arrangements
— — 2,684 1,842 4,526 
Adjustment to long-term incentives— — 281 501 782 
Former CEO stock appreciation right expense (credit)(428)(186)(789)1,073 (330)
Transaction, restructuring, and other expenses
37 (135)255 108 265 
Unusual foreign exchange loss
1,387 — 2,444 — 3,831 
Loss on debt extinguishment
— 5,535 — — 5,535 
Interest expense, net
6,185 5,952 5,677 5,636 23,450 
Depreciation, amortization, and accretion
8,774 8,756 8,623 8,578 34,731 
Equity compensation expense1,800 1,623 6,406 1,431 11,260 
Unrealized (gain) loss on investments
(46)(2,795)(696)560 (2,977)
Gain on sale of assets(38)(29)(129)(151)(347)
Other debt covenant adjustments275 28 333 (393)243 
Debt covenant adjusted EBITDA$30,425 $20,044 $23,650 $26,075 $100,194 
June 30, 2024
(in thousands, except ratio)
Term credit agreement$190,000 
Capital lease obligations
3,992 
Other obligations
1,280 
Letters of credit and guarantees
543 
Total debt and commitments195,815 
Unrestricted cash37,713 
Debt covenant net debt and commitments$158,102 
Net leverage ratio1.6 

15

Schedule J: Non-GAAP Reconciliation to Return on Net Capital Employed
Three Months EndedTwelve Months Ended
June 30, 2024March 31, 2024December 31,
2023		September 30, 2023June 30, 2024
(in thousands)
Net income (loss) before taxes and
discontinued operations		$12,479 $1,295 $(3,631)$6,716 $16,859 
Insurance recoveries— — 3 174 177 
Impairments and other charges— — 2,189 — 2,189 
Exploration, pre-development costs, and collaborative arrangements
— — 2,684 1,842 4,526 
Adjustment to long-term incentives— — 281 500 781 
Former CEO stock appreciation right expense (credit)(428)(186)(789)1,074 (329)
Transaction, restructuring, and other expenses
37 (135)255 108 265 
Loss on debt extinguishment
— 5,535 — — 5,535 
Unusual foreign exchange loss
1,387 — 2,444 — 3,831 
Interest expense, net
6,185 5,952 5,677 5,636 23,450 
Adjusted EBIT$19,660 $12,461 $9,113 $16,050 $57,284 
June 30, 2024June 30,
2023
(in thousands, except ratio)
Consolidated total assets$499,725 $469,992 
Plus: assets impaired in last twelve months2,189 1,319 
Less: cash, cash equivalents, and restricted cash
42,752 27,675 
Adjusted assets employed$459,162 $443,636 
Consolidated current liabilities$120,336 $125,831 
Less: current liabilities associated with discontinued operations— 414 
Adjusted current liabilities$120,336 $125,417 
Net capital employed$338,826 $318,219 
Average net capital employed$328,523 
Return on net capital employed for the
twelve months ended June 30, 2024
17.4 %

16
v3.24.2
Cover
Jul. 31, 2024
Cover [Abstract]  
Document Type 8-K
Entity File Number 1-13455
Entity Tax Identification Number 74-2148293
Entity Incorporation, State or Country Code DE
Entity Address, Address Line One 24955 Interstate 45 North
Entity Address, City or Town The Woodlands
Entity Address, State or Province TX
Entity Address, Postal Zip Code 77380
City Area Code 281
Local Phone Number 367-1983
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Entity Emerging Growth Company false
Entity Registrant Name TETRA Technologies, Inc.
Entity Central Index Key 0000844965
Amendment Flag false
Document Period End Date Jul. 31, 2024
Series A Preferred Stock  
Cover [Abstract]  
Trading Symbol N/A
Security Exchange Name NYSE
Title of 12(b) Security Preferred Share Purchase Right
Document Information [Line Items]  
Trading Symbol N/A
Title of 12(b) Security Preferred Share Purchase Right
Security Exchange Name NYSE
Common Class A  
Cover [Abstract]  
Title of 12(b) Security Common Stock
Document Information [Line Items]  
Title of 12(b) Security Common Stock
Common Stock  
Cover [Abstract]  
Trading Symbol TTI
Security Exchange Name NYSE
Document Information [Line Items]  
Trading Symbol TTI
Security Exchange Name NYSE
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