THE WOODLANDS, Texas,
Feb. 26, 2016 /PRNewswire/
-- TETRA Technologies, Inc. (NYSE: TTI) today announced fourth
quarter 2015 adjusted earnings per share of $0.01, excluding Maritech and other charges,
which compares to $0.09 per share in
the fourth quarter of 2014, also excluding Maritech and other
charges. Fourth quarter 2015 revenue of $258 million declined 18% from the fourth quarter
of 2014 primarily as a result of a 61% reduction in the North
American rig count.
Consolidated GAAP fourth quarter 2015 earnings per share
attributable to TETRA stockholders including Maritech and other
charges was a loss of $(1.84), which
compares to a loss of $(1.90) in the
fourth quarter of 2014. (Adjusted earnings per share is a non-GAAP
financial measure that is reconciled to the nearest GAAP measure in
the schedule.)
Highlights of the 2015 fourth quarter include:
- TETRA fourth quarter free cash flow(1) of
$52 million, excluding CSI Compressco
and $5 million of Maritech asset
retirement obligation (ARO) expenditures, and $3 million of costs associated with the issuance
of $125 million of 11% Senior Notes
completed in the fourth quarter. For the full year ending
December 31, 2015, TETRA free cash
flow(1) was $120 million,
excluding CSI Compressco and $10
million of Maritech ARO expenditures, and $3 million of costs associated with the note
issuance.
- During 2015, TETRA reduced total debt outstanding by
$102 million and improved its debt to
EBITDA leverage ratio(3) from a high of 3.38x in 2014 to
1.86x at year-end 2015.
- Continued strength in our Fluids Division driven by offshore
activities and the continued success of our zinc-free heavy
completion fluid.
- Adjusted EBITDA(2) of $28.4
million for CSI Compressco LP, demonstrating continued
profitability in the current environment.
- Continued reduction in operating expenses across all of our
businesses.
- Robust earnings in our Offshore Services segment during what is
typically a seasonally slow quarter.
(1)
|
Non-GAAP financial
measure that is reconciled to GAAP in Schedule G.
|
(2)
|
Adjusted EBITDA is a
non-GAAP financial measure that is reconciled to GAAP in Schedule
F.
|
(3)
|
Leverage ratio is
defined by TETRA's credit agreement as outstanding debt plus
letters of credit, divided by trailing twelve-month EBITDA
excluding unusual charges, Maritech losses, and CSI Compressco
distributions.
|
Adjusted Fourth
Quarter 2015 Results, Excluding Special Charges and
Maritech
|
|
|
(Non-GAAP
financial measures are reconciled to GAAP in the schedules
below)
|
|
|
|
Three Months
Ended
|
|
Change
|
|
Dec. 31,
2015
|
|
Dec. 31,
2014
|
|
2015 vs.
2014
|
|
(In Thousands, Except
per Share Amounts)
|
|
|
Adjusted
revenue
|
$
|
257,527
|
|
$
|
315,092
|
|
(18)%
|
Adjusted income
before taxes(1)
|
658
|
|
14,203
|
|
(95)%
|
Adjusted net income
attributable to TETRA shareholders(2)
|
950
|
|
7,047
|
|
(87)%
|
Adjusted diluted EPS
attributable to TETRA shareholders(3)
|
$
|
0.01
|
|
$
|
0.09
|
|
(87)%
|
Adjusted free cash
flow
|
$
|
52,448
|
|
$
|
57,042
|
|
(8)%
|
Adjusted pretax
operating margin
|
0.3%
|
|
4.5%
|
|
-418 bps
|
Adjusted
EBITDA
|
$
|
54,306
|
|
$
|
67,566
|
|
(20)%
|
|
|
(1)
|
Income before taxes,
including special charges and Maritech was a loss of $(233) million
in the fourth quarter of 2015 and a loss of $(120) million in the
fourth quarter of 2014.
|
(2)
|
Net income
attributable to TETRA shareholders, including special charges and
Maritech was a loss of $(146) million in the fourth quarter of
2015, and a loss of $(150) million in the fourth quarter of
2014.
|
(3)
|
Diluted EPS,
including special charges and Maritech, was a loss of $(1.84) in
the fourth quarter of 2015, and a loss of $(1.90) in the fourth
quarter of 2014. See Schedule E for details.
|
Analysis of Fourth Quarter Results
Stuart M. Brightman, TETRA's
President and Chief Executive Officer, stated, "The markets we
serve became increasingly challenging as we exited the fourth
quarter of 2015 and moved into 2016. Despite this unfavorable
environment, in the fourth quarter we were able to generate
adjusted earnings per share of $0.01
and adjusted free cash flow of $52
million (see schedule G for a reconciliation of free cash
flow to GAAP cash from operations). We continue to take the actions
necessary to ensure the long-term health of the company and
continue to generate free cash flow.
"Our Fluids Division generated $17.2
million of adjusted income before taxes in the fourth
quarter of 2015 compared to $19.1
million in the fourth quarter of 2014. The Division's
results for 2015's fourth quarter included a $3.5 million favorable benefit from the
resolution of a completion fluids project completed in the third
quarter of 2015. We continue to benefit from positive results for
our completion fluids business in the Gulf of Mexico, driven by the introduction of
our zinc-free heavy completion fluids. Our chemicals business
continues to be an area of strength due to the diversity of our
end-user markets. On a sequential basis, compared to the third
quarter of 2015, our onshore completion fluids businesses continued
to suffer from decreased demand in a very challenging market.
Certain areas of our international operations in the Fluids
Division began to evidence the impact of market pressures in the
fourth quarter, and we expect this to be a more challenging
environment in 2016.
"Our Production Testing Division's fourth quarter results were a
sequential improvement over the third quarter of 2015, with an
adjusted pretax loss of $(0.9)
million compared to an adjusted pretax loss of $(1.4) million in the third quarter of 2015. Our
U.S. activity continued to decrease and the market continued to be
more challenging in the fourth quarter. Despite this, we were able
to generate sequentially improved results due to several
international projects that occurred during the fourth quarter. We
expect this business to continue to experience reduced demand
during the first half of 2016, and we will continue to focus on
offsetting the impact with our international operations.
"For the fourth quarter of 2015, our Compression Division
reported an adjusted pretax loss of $(0.9)
million, compared to adjusted income before taxes of
$2.1 million in the third quarter of
2015. During the fourth quarter of 2015, the Division benefited
from spot sales of compression equipment as well as continued
demand for our large horsepower compression services. Adjusted
EBITDA of $28.4 million for the
fourth quarter of 2015 is slightly below adjusted EBITDA of
$31.4 million for the third quarter
of 2015. Aggressive cost actions have been taken in areas of
reduced demand, most notably, resources associated with our
fabrication business. On January 22,
2016, CSI Compressco LP declared a decreased distribution of
$0.3775 attributable to the fourth
quarter of 2015. This proactive decision to decrease the
distribution was taken to provide a buffer against anticipated
lower activity levels over the course of 2016.
"Our Offshore Services segment reported adjusted income before
taxes of $2.6 million for the fourth
quarter of 2015, compared to an adjusted pretax loss of
$(3.1) million in the fourth quarter
of 2014. This significant improvement was driven by benefits from
ongoing cost actions and the execution of several small projects
during the quarter. Our responsiveness to our customers enabled us
to secure this business during a season in which activity is
typically reduced.
"During the fourth quarter TETRA, excluding the operations of
CSI Compressco, had $52 million of
free cash flow, which includes distributions from CSI Compressco
but excludes $5 million spent on
Maritech asset retirement obligations (see schedule G for a
reconciliation to GAAP cash from operations). For the full year
2015, such free cash flow was $120
million. As we noted throughout 2015, our ability to
generate cash in this very challenging environment was driven by
earnings, our minimization of capital expenditures, and continued
improvements in working capital. We exited 2015 with a leverage
ratio of 1.86x, representing our fifth consecutive quarter of
improvement in the leverage ratio."
Divisional revenues, adjusted income (loss) before taxes,
adjusted income (loss) before taxes as a percent of revenue, and
adjusted EBITDA (all of which are non-GAAP financial measures that
are reconciled to GAAP in the schedules below) for the three months
ended December 31, 2015 and
December 31, 2014 are summarized in
the table below:
Segment
Results
|
Three Months
Ended
|
|
December 31,
2015
|
|
December 31,
2014
|
|
Revenue
|
Adjusted
(Loss)
Income
Before
Taxes(1)
|
Adjusted
Income
(Loss)
Before
Taxes as a
Percent of
Revenue(2)
|
Adjusted
EBITDA(3)
|
|
Revenue
|
Adjusted
Income
Before
Taxes(1)
|
Adjusted
Income
(Loss)
Before
Taxes as a
Percent of
Revenue(2)
|
Adjusted
EBITDA(3)
|
|
(In
Thousands)
|
Fluids
Division
|
$
|
91,194
|
|
$
|
17,213
|
|
18.9%
|
|
$
|
25,911
|
|
|
$
|
110,271
|
|
$
|
19,109
|
|
17.3%
|
|
$
|
27,523
|
|
Production Testing
Division
|
33,017
|
|
(866)
|
|
(2.6)%
|
|
4,679
|
|
|
56,633
|
|
8,790
|
|
15.5%
|
|
15,499
|
|
Compression
Division
|
99,369
|
|
7,234
|
|
7.3%
|
|
28,382
|
|
|
124,829
|
|
13,812
|
|
11.1%
|
|
34,492
|
|
Offshore Services
segment
|
36,798
|
|
2,577
|
|
7.0%
|
|
5,505
|
|
|
42,296
|
|
(3,059)
|
|
(7.2)%
|
|
92
|
|
Eliminations and
other
|
(1,108)
|
|
4
|
|
(0.4)%
|
|
—
|
|
|
(1,392)
|
|
3
|
|
—
|
|
—
|
|
Subtotal
|
259,270
|
|
26,162
|
|
10.1%
|
|
64,477
|
|
|
332,637
|
|
38,655
|
|
11.6%
|
|
77,606
|
|
Corporate and
other
|
(1,743)
|
|
(12,164)
|
|
|
(10,171)
|
|
|
(17,545)
|
|
(11,631)
|
|
|
(10,040)
|
|
Interest expense, net
- Compression Division
|
—
|
|
(8,110)
|
|
|
—
|
|
|
—
|
|
(7,662)
|
|
|
—
|
|
Interest expense, net
- TTI, excluding Compression Division
|
—
|
|
(5,230)
|
|
|
—
|
|
|
—
|
|
(5,159)
|
|
|
—
|
|
Special charges and
Maritech(4)
|
63
|
|
(233,897)
|
|
|
—
|
|
|
758
|
|
(134,070)
|
|
|
—
|
|
As
reported
|
257,590
|
|
(233,239)
|
|
(90.5)%
|
|
54,306
|
|
|
315,850
|
|
(119,867)
|
|
(38.0)%
|
|
67,566
|
|
|
|
(1)
|
See Schedule F for
reconciliation.
|
(2)
|
GAAP income (loss)
before taxes as a percent of revenue for fourth quarter 2015 are:
Fluids Division, 3.0%; Production Testing Division, (153.7)%;
Compression Division, (153.7)%; and, Offshore Services segment,
4.8%. GAAP income (loss) before taxes as a percent of revenue for
fourth quarter 2014 are: Fluids Division, 11.5%; Production Testing
Division, (117.5)%; Compression Division, 2.6%; and, Offshore
Services segment, 49.0%. Refer to Schedule B for GAAP dollar
amounts.
|
(3)
|
Adjusted income
before taxes and adjusted EBITDA are non-GAAP financial measures
that are defined and reconciled to the nearest GAAP financial
measures in Schedule F.
|
(4)
|
See Schedule E for
special charges and reconciliations.
|
Debt, Cost, and Cash Actions
Given the uncertain market environment and despite our strong
2015 cash generation and improvements in our capital structure,
over the past 90 days the Company has implemented an incremental
series of actions to ensure we remain strong through a prolonged
downturn. These actions have included:
- During the fourth quarter we secured $125.0 million of 11% senior notes maturing in
seven years. The proceeds from this transaction were used to pay
down $115.0 million of senior notes
due from April 2016 through
December 2020, and associated
transaction fees. Following this transaction, TETRA has
$46.9 of outstanding debt maturing in
December 2017, with no subsequent
maturities until 2019. The strength of our balance sheet and
ongoing actions to support it continue to be a primary focus for
our management group.
- Since October 1, 2015, we have
reduced headcount by 9.5% for TETRA, and 16% for CSI Compressco. In
addition, we have recently implemented salary reductions in
North America that approximate 5%
of annual base pay, to counter continued pricing pressures.
- A 25% reduction in CSI Compressco LP's distribution
attributable to the fourth quarter of 2015, and a reduction of
total capital expenditures from $95
million in 2015 to $20 to $30
million in 2016. Given the pricing pressures in our
industry, we remain focused on capital returns and will resume
investments in growth capital when market pricing supports
appropriate returns.
Special Charges and Maritech
During the fourth quarter of 2015, due to changes in the current
market environment, the fair value of certain of our identified
assets and goodwill has decreased. As a result, we recorded
$231 million of impairments and other
charges, primarily for our Compression and Production Testing
Divisions.
Maritech reported a pre-tax loss of $(2.8) million in the fourth quarter of 2015.
First Quarter Financial Guidance
Given the continued weakness in commodity prices and the
seasonality of our operations, we expect a first quarter GAAP loss
attributable to TETRA stockholders of between $0.21 to $0.29 per share and first quarter
adjusted EPS to be a loss of between $0.15
to $0.20 per share reflecting a normalized tax rate of
30%. Additionally, we expect first quarter TETRA only free
cash flow of between break-even and $10
million (TETRA only cash flow from operations of
$1 million to $11 million, less
anticipated TETRA only capital expenditures of $6 million, plus $5
million of distributions from CSI Compressco LP) as the
first quarter has historically been TETRA's weakest quarter given
the seasonality of our operations.
Conference Call
TETRA will host a conference call to discuss fourth quarter 2015
results today, February 26, 2015, at
10:30 am ET. The phone number for the
call is (888) 347-5303. The conference will also be available by
live audio webcast and may be accessed through TETRA's website at
www.tetratec.com.
Financial Statements, Schedules and Non-GAAP Reconciliation
Schedules (Unaudited)
Schedule A: Consolidated Income Statement
Schedule B: Financial Results By Segment
Schedule C: Consolidated Balance Sheet
Schedule D: Long-Term Debt
Schedule E: Fourth Quarter Special Charges
Schedule F: Non-GAAP Reconciliation to GAAP Financials
Schedule G: Non-GAAP Reconciliation to Free Cash Flow
Schedule H: Non-GAAP Reconciliation of TETRA Net Debt
Company Overview and Forward Looking Statements
TETRA is a geographically diversified oil and gas services
company, focused on completion fluids and associated products and
services, water management, frac flowback, production well testing,
offshore rig cooling, compression services and equipment, and
selected offshore services including well plugging and abandonment,
decommissioning, and diving. TETRA owns an equity interest,
including all of the general partner interest, in CSI Compressco LP
(NADAQ: CCLP), a master limited partnership.
This press release includes certain statements that are deemed
to be forward-looking statements. Generally, the use of words such
as "may," "expect," "intend," "estimate," "projects," "anticipate,"
"believe," "assume," "could," "should," "plans," "targets" or
similar expressions that convey the uncertainty of future events,
activities, expectations or outcomes identify forward-looking
statements that the Company intends to be included within the safe
harbor protections provided by the federal securities laws. These
forward-looking statements include statements concerning expected
results of operational business segments for 2015, anticipated
benefits from CSI Compressco following the acquisition of CSI in
2014, including increases in cash distributions per unit,
projections concerning the Company's business activities, financial
guidance, estimated earnings, earnings per share, and statements
regarding the Company's beliefs, expectations, plans, goals, future
events and performance, and other statements that are not purely
historical. These forward-looking statements are based on certain
assumptions and analyses made by the Company in light of its
experience and its perception of historical trends, current
conditions, expected future developments and other factors it
believes are appropriate in the circumstances. Such statements are
subject to a number of risks and uncertainties, many of which are
beyond the control of the Company, including the ability of CSI
Compressco to successfully integrate the operations of CSI and
recognize the anticipated benefits of the acquisition. Investors
are cautioned that any such statements are not guarantees of future
performances or results and that actual results or developments may
differ materially from those projected in the forward-looking
statements. Some of the factors that could affect actual results
are described in the section titled "Risk Factors" contained in the
Company's Annual Report on Form 10-K for the year ended
December 31, 2014, as well as other
risks identified from time to time in its reports on Form 10-Q and
Form 8-K filed with the Securities and Exchange Commission.
Schedule A: Consolidated Income Statement (Unaudited)
|
Three Months
Ended
December 31,
|
|
Twelve Months
Ended
December 31,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
(In
Thousands)
|
Revenues
|
$
|
257,590
|
|
|
$
|
315,850
|
|
|
$
|
1,130,145
|
|
|
$
|
1,077,567
|
|
|
|
|
|
|
|
|
|
Cost of sales,
services, and rentals
|
171,981
|
|
|
242,402
|
|
|
741,736
|
|
|
830,769
|
|
Depreciation,
amortization, and accretion
|
38,696
|
|
|
38,631
|
|
|
155,015
|
|
|
116,912
|
|
Impairments of
long-lived assets
|
44,158
|
|
|
34,842
|
|
|
44,158
|
|
|
34,842
|
|
Total cost of
revenues
|
254,835
|
|
|
315,875
|
|
|
940,909
|
|
|
982,523
|
|
Gross profit
(loss)
|
2,755
|
|
|
(25)
|
|
|
189,236
|
|
|
95,044
|
|
|
|
|
|
|
|
|
|
General and
administrative expense
|
44,161
|
|
|
39,900
|
|
|
157,812
|
|
|
142,689
|
|
Goodwill
impairment
|
177,006
|
|
|
64,295
|
|
|
177,006
|
|
|
64,295
|
|
Interest expense,
net
|
13,087
|
|
|
12,805
|
|
|
50,514
|
|
|
31,998
|
|
Other (income)
expense, net
|
1,740
|
|
|
2,842
|
|
|
5,667
|
|
|
13,933
|
|
Income (loss) before
taxes
|
(233,239)
|
|
|
(119,867)
|
|
|
(201,763)
|
|
|
(157,871)
|
|
Provision (benefit)
for income taxes
|
(1,293)
|
|
|
27,601
|
|
|
7,704
|
|
|
9,704
|
|
Net income
(loss)
|
(231,946)
|
|
|
(147,468)
|
|
|
(209,467)
|
|
|
(167,575)
|
|
Net income (loss)
attributable to noncontrolling interest
|
85,531
|
|
|
(2,282)
|
|
|
83,284
|
|
|
(2,103)
|
|
Net income (loss)
attributable to TETRA stockholders
|
$
|
(146,415)
|
|
|
$
|
(149,750)
|
|
|
$
|
(126,183)
|
|
|
$
|
(169,678)
|
|
|
|
|
|
|
|
|
|
Basic per share
information:
|
|
|
|
|
|
|
|
Net income (loss)
attributable to TETRA stockholders
|
$
|
(1.84)
|
|
|
$
|
(1.90)
|
|
|
$
|
(1.59)
|
|
|
$
|
(2.16)
|
|
Weighted average shares
outstanding
|
79,380
|
|
|
78,877
|
|
|
79,169
|
|
|
78,600
|
|
|
|
|
|
|
|
|
|
Diluted per share
information:
|
|
|
|
|
|
|
|
Net income (loss)
attributable to TETRA stockholders
|
$
|
(1.84)
|
|
|
$
|
(1.90)
|
|
|
$
|
(1.59)
|
|
|
$
|
(2.16)
|
|
Weighted average shares
outstanding
|
79,380
|
|
|
78,877
|
|
|
79,169
|
|
|
78,600
|
|
Schedule B: Financial Results By Segment (Unaudited)
|
Three Months
Ended
December 31, 2015
|
|
Twelve Months
Ended
December 31, 2015
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
(In
Thousands)
|
Revenues by
segment:
|
|
|
|
|
|
|
|
Fluids
Division
|
$
|
91,194
|
|
|
$
|
110,271
|
|
|
$
|
424,044
|
|
|
$
|
437,362
|
|
Production Testing
Division
|
33,017
|
|
|
56,633
|
|
|
133,904
|
|
|
192,824
|
|
Compression
Division
|
99,369
|
|
|
124,829
|
|
|
457,639
|
|
|
282,505
|
|
Offshore
Division
|
|
|
|
|
|
|
|
Offshore
Services
|
36,798
|
|
|
42,296
|
|
|
122,194
|
|
|
195,372
|
|
Maritech
|
63
|
|
|
758
|
|
|
2,438
|
|
|
4,722
|
|
Intersegment
eliminations
|
(1,108)
|
|
|
(17,542)
|
|
|
(4,669)
|
|
|
(30,595)
|
|
Offshore Division
total
|
35,753
|
|
|
25,512
|
|
|
119,963
|
|
|
169,499
|
|
Eliminations and
other
|
(1,743)
|
|
|
(1,395)
|
|
|
(5,405)
|
|
|
(4,623)
|
|
Total
revenues
|
$
|
257,590
|
|
|
$
|
315,850
|
|
|
$
|
1,130,145
|
|
|
$
|
1,077,567
|
|
|
|
|
|
|
|
|
|
Gross profit
(loss) by segment:
|
|
|
|
|
|
|
|
Fluids
Division
|
$
|
4,545
|
|
|
$
|
21,161
|
|
|
$
|
111,969
|
|
|
$
|
97,806
|
|
Production Testing
Division
|
(10,749)
|
|
|
(1,959)
|
|
|
(3,046)
|
|
|
12,610
|
|
Compression
Division
|
7,035
|
|
|
25,606
|
|
|
73,135
|
|
|
66,527
|
|
Offshore
Division
|
|
|
|
|
|
|
|
Offshore
Services
|
4,585
|
|
|
(13,943)
|
|
|
10,602
|
|
|
(10,314)
|
|
Maritech
|
(2,493)
|
|
|
(30,634)
|
|
|
(2,523)
|
|
|
(69,861)
|
|
Intersegment
eliminations
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Offshore Division
total
|
2,092
|
|
|
(44,577)
|
|
|
8,079
|
|
|
(80,175)
|
|
Corporate overhead and
eliminations
|
(168)
|
|
|
(256)
|
|
|
(901)
|
|
|
(1,724)
|
|
Total gross
profit
|
$
|
2,755
|
|
|
$
|
(25)
|
|
|
$
|
189,236
|
|
|
$
|
95,044
|
|
|
|
|
|
|
|
|
|
Income (loss)
before taxes by segment:
|
|
|
|
|
|
|
|
Fluids
Division
|
$
|
(2,746)
|
|
|
$
|
12,628
|
|
|
$
|
80,789
|
|
|
$
|
64,705
|
|
Production Testing
Division
|
(50,759)
|
|
|
(66,547)
|
|
|
(55,720)
|
|
|
(66,156)
|
|
Compression
Division
|
(152,772)
|
|
|
3,237
|
|
|
(146,798)
|
|
|
7,340
|
|
Offshore
Division
|
|
|
|
|
|
|
|
Offshore
Services
|
1,782
|
|
|
(20,713)
|
|
|
(195)
|
|
|
(26,251)
|
|
Maritech
|
(2,846)
|
|
|
(30,948)
|
|
|
(3,833)
|
|
|
(71,154)
|
|
Intersegment
eliminations
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Offshore Division
total
|
(1,064)
|
|
|
(51,661)
|
|
|
(4,028)
|
|
|
(97,405)
|
|
Corporate overhead and
eliminations
|
(25,898)
|
|
|
(17,524)
|
|
|
(76,005)
|
|
|
(66,355)
|
|
Total income (loss)
before taxes
|
$
|
(233,239)
|
|
|
$
|
(119,867)
|
|
|
$
|
(201,763)
|
|
|
$
|
(157,871)
|
|
Please note that the above results by Segment are inclusive of
the special charges and expenses. Please see Schedule E for details
of those special charges and expenses.
Schedule C: Consolidated Balance Sheet (Unaudited)
|
December 31,
2015
|
|
December 31,
2014
|
|
(In
Thousands)
|
Balance
Sheet:
|
|
|
|
Cash (excluding
restricted cash)
|
$
|
23,057
|
|
|
$
|
48,384
|
|
Accounts receivable,
net
|
182,343
|
|
|
226,966
|
|
Inventories
|
117,009
|
|
|
189,357
|
|
Other current
assets
|
31,166
|
|
|
35,752
|
|
PP&E,
net
|
1,048,004
|
|
|
1,124,192
|
|
Other
assets
|
239,413
|
|
|
444,182
|
|
Total
assets
|
$
|
1,640,992
|
|
|
$
|
2,068,833
|
|
|
|
|
|
Current portion of
decommissioning liabilities
|
$
|
14,570
|
|
|
$
|
12,758
|
|
Other current
liabilities
|
168,847
|
|
|
365,702
|
|
Long-term debt
(1)
|
873,402
|
|
|
844,961
|
|
Long-term portion of
decommissioning liabilities
|
42,879
|
|
|
49,983
|
|
Other long-term
liabilities
|
27,114
|
|
|
29,828
|
|
Equity
|
514,180
|
|
|
765,601
|
|
Total liabilities and
equity
|
$
|
1,640,992
|
|
|
$
|
2,068,833
|
|
|
|
(1)
|
Please see Schedule D
for the individual debt obligations of TETRA and CSI Compressco
LP.
|
Schedule D: Long-Term Debt
TETRA Technologies, Inc. and its subsidiaries, excluding CSI
Compressco LP and its subsidiaries, are obligated under a bank
credit agreement and senior notes, neither of which are obligations
of CSI Compressco LP and its subsidiaries. CSI Compressco LP
and its subsidiaries are obligated under a separate bank credit
agreement and senior notes, neither of which are obligations of
TETRA and its other subsidiaries.
|
December 31,
2015
|
|
December 31,
2014
|
|
(In
Thousands)
|
TETRA
|
|
|
|
Bank revolving line
of credit facility
|
$
|
22,850
|
|
|
$
|
90,000
|
|
TETRA Senior Notes at
various rates
|
270,071
|
|
|
305,000
|
|
Other debt
|
50
|
|
|
74
|
|
TETRA total
debt
|
292,971
|
|
|
395,074
|
|
Less current
portion
|
(50)
|
|
|
(90,074)
|
|
TETRA total
long-term debt
|
$
|
292,921
|
|
|
$
|
305,000
|
|
|
|
|
|
CSI Compressco
LP
|
|
|
|
CCLP Bank Credit
Facility
|
$
|
235,000
|
|
|
$
|
195,000
|
|
CCLP 7.25% Senior
Notes
|
345,481
|
|
|
344,961
|
|
CCLP total
debt
|
580,481
|
|
|
539,961
|
|
Less current
portion
|
—
|
|
|
—
|
|
CCLP total
long-term debt
|
$
|
580,481
|
|
|
$
|
539,961
|
|
Consolidated total
long-term debt
|
$
|
873,402
|
|
|
$
|
844,961
|
|
Non-GAAP Financial Measures
In addition to financial results determined in accordance with
GAAP, this press release includes the following non-GAAP financial
measures for the Company: net debt, adjusted consolidated and
segment income before taxes, excluding the Maritech segment and
special charges; Adjusted EBITDA; and free cash flow. The
following schedules provide reconciliations of these non-GAAP
financial measures to their most directly comparable GAAP
measures. The non-GAAP financial measures should be
considered in addition to, not as a substitute for, financial
measures prepared in accordance with GAAP, as more fully discussed
in the Company's financial statements and filings with the
Securities and Exchange Commission.
Management believes that following the sale of essentially all
of Maritech's oil and gas properties, it is helpful to show the
Company's results excluding the impact of the costs and charges
relating to the decommissioning of Maritech's remaining properties
since these results will show the Company's historical results of
operations on a basis consistent with expected future
operations. Management also believes that the exclusion of
the special charges from the historical results of operations
enables management to evaluate more effectively the Company's
operations over the prior periods and to identify operating trends
that could be obscured by the excluded items.
Adjusted income before taxes (and adjusted income before taxes
as a percent of revenue) is defined as the Company's (or its
Segments') income before taxes excluding certain special or other
charges (or credits). Adjusted income before taxes (and adjusted
income before taxes as a percent of revenue) 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 diluted earnings per share is defined as the Company's
diluted earnings per share excluding certain special or other
charges (or credits) and using a normalized effective income tax
rate. Adjusted diluted earnings 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 adjusted income before interest,
taxes, depreciation, amortization and equity compensation. Adjusted
EBITDA is used by management as a supplemental financial measure to
assess the financial performance of the Company's assets, without
regard to financing methods, capital structure or historical cost
basis and to assess the Company's ability to incur and service debt
and fund capital expenditures.
Free Cash Flow is a non-GAAP measure that the Company defines as
cash from operations, excluding cash settlements of Maritech ARO,
less capital expenditures. Management uses this supplemental
financial measure to:
- assess the Company's ability to retire debt;
- evaluate the capacity of the Company to further invest and
grow; and
- to measure the performance of the Company as compared to its
peer group of companies.
TETRA free cash flow does not necessarily imply residual cash
flow available for discretionary expenditures, as it excludes cash
requirements for debt service or other non-discretionary
expenditures that are not deducted.
TETRA net debt is defined as the sum of long-term and short-term
debt on its consolidated balance sheet, less cash, excluding
restricted cash on the consolidated balance sheet and excluding the
debt and cash of CSI Compressco LP. Management views net debt as a
measure of TETRA's ability to reduce debt, add to cash balances,
pay dividends, repurchase stock, and fund investing and financing
activities.
Schedule E: Fourth Quarter Special Charges
|
Three Months
Ended
|
|
December 31,
2015
|
|
Income
(Loss) Before
Tax
|
Provision
(Benefit) for
Tax
|
Noncont.
Interest
|
Net Income
Attributable
to TETRA
Stockholders
|
Diluted
EPS
|
|
(In Thousands, Except
per Share Amounts)
|
Income attributable to
TETRA stockholders, excluding special charges and
Maritech
|
658
|
|
199
|
|
(491)
|
|
950
|
|
0.01
|
|
Transaction related
costs
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Asset impairment,
including inventory adjustments
|
(44,182)
|
|
(13,255)
|
|
(6,612)
|
|
(24,315)
|
|
(0.30)
|
|
Goodwill
impairment
|
(177,006)
|
|
(53,102)
|
|
(78,151)
|
|
(45,753)
|
|
(0.57)
|
|
Effect of deferred tax
valuation allowance and other related tax adjustment
|
—
|
|
67,824
|
|
—
|
|
(67,824)
|
|
(0.84)
|
|
Other
charges
|
(9,862)
|
|
(2,959)
|
|
(277)
|
|
(6,626)
|
|
(0.10)
|
|
Maritech profit
(loss)
|
(2,847)
|
|
—
|
|
—
|
|
(2,847)
|
|
(0.04)
|
|
Net income (loss)
attributable to TETRA stockholders, as reported
|
(233,239)
|
|
(1,293)
|
|
(85,531)
|
|
(146,415)
|
|
(1.84)
|
|
|
|
|
|
|
|
|
December 31,
2014
|
|
Income
(Loss) Before
Tax
|
Provision
(Benefit) for
Tax
|
Noncont.
Interest
|
Net Income
Attributable
to TETRA
Stockholders
|
Diluted
EPS
|
|
(In Thousands, Except
per Share Amounts)
|
Income attributable
to TETRA stockholders, excluding Special charges and
Maritech
|
14,203
|
|
4,324
|
|
2,832
|
|
7,047
|
|
0.09
|
|
Transaction related
costs
|
(1,687)
|
|
(597)
|
|
(550)
|
|
(540)
|
|
(0.01)
|
|
Asset impairment,
including inventory adjustments
|
(37,140)
|
|
(12,784)
|
|
—
|
|
(24,356)
|
|
(0.31)
|
|
Goodwill
impairment
|
(64,295)
|
|
(15,682)
|
|
—
|
|
(48,613)
|
|
(0.62)
|
|
Effect of deferred
tax valuation allowance and other related adjustments
|
—
|
|
63,172
|
|
—
|
|
(63,172)
|
|
(0.79)
|
|
Maritech
loss
|
(30,948)
|
|
(10,832)
|
|
—
|
|
(20,116)
|
|
(0.26)
|
|
Net income (loss)
attributable to TETRA stockholders, as reported
|
(119,867)
|
|
27,601
|
|
2,282
|
|
(149,750)
|
|
(1.90)
|
|
|
|
|
|
|
|
|
Twelve Months
Ended
|
|
December 31,
2015
|
|
Income
(Loss) Before
Tax
|
Provision
(Benefit) for
Tax
|
Noncont.
Interest
|
Net Income
Attributable
to TETRA
Stockholders
|
Diluted
EPS
|
Income attributable to
TETRA stockholders, excluding Special charges and
Maritech
|
39,512
|
|
11,802
|
|
1,962
|
|
25,748
|
|
0.32
|
|
Transaction related
costs
|
(208)
|
|
(62)
|
|
(73)
|
|
(73)
|
|
—
|
|
Asset impairment,
including inventory adjustments
|
(44,158)
|
|
(13,247)
|
|
(6,612)
|
|
(24,299)
|
|
(0.30)
|
|
Goodwill
impairment
|
(177,006)
|
|
(53,102)
|
|
(78,193)
|
|
(45,711)
|
|
(0.57)
|
|
Effect of deferred tax
valuation allowance and other related tax adjustments
|
—
|
|
67,082
|
|
—
|
|
(67,082)
|
|
(0.85)
|
|
Other
charges
|
(16,071)
|
|
(4,769)
|
|
(368)
|
|
(10,934)
|
|
(0.14)
|
|
Maritech profit
(loss)
|
(3,832)
|
|
—
|
|
—
|
|
(3,832)
|
|
(0.05)
|
|
Net Income (loss)
attributable to TETRA stockholders, as reported
|
(201,763)
|
|
7,704
|
|
(83,284)
|
|
(126,183)
|
|
(1.59)
|
|
|
|
December 31,
2014
|
|
Income
(Loss) Before
Tax
|
Provision
(Benefit) for
Tax
|
Noncont.
Interest
|
Net Income
Attributable
to TETRA
Stockholders
|
Diluted
EPS
|
Income attributable to
TETRA stockholders, excluding Special charges and
Maritech
|
34,968
|
|
6,325
|
|
6,822
|
|
21,821
|
|
0.27
|
|
Transaction related
costs
|
(15,060)
|
|
(5,389)
|
|
(4,719)
|
|
(4,952)
|
|
(0.06)
|
|
Asset impairment,
including inventory adjustments
|
(37,140)
|
|
(12,784)
|
|
—
|
|
(24,356)
|
|
(0.31)
|
|
Goodwill
impairment
|
(64,295)
|
|
(15,682)
|
|
—
|
|
(48,613)
|
|
(0.61)
|
|
Severance
expense
|
(784)
|
|
(290)
|
|
—
|
|
(494)
|
|
(0.01)
|
|
Federal and State
deferred tax valuation allowance and other related
adjustments
|
—
|
|
60,500
|
|
—
|
|
(60,500)
|
|
(0.76)
|
|
Maritech
loss
|
(71,154)
|
|
(21,346)
|
|
—
|
|
(49,808)
|
|
(0.63)
|
|
Other
|
(4,406)
|
|
(1,630)
|
|
—
|
|
(2,776)
|
|
(0.05)
|
|
Net Income (loss)
attributable to TETRA stockholders, as reported
|
(157,871)
|
|
9,704
|
|
2,103
|
|
(169,678)
|
|
(2.16)
|
|
Schedule F: Non-GAAP Reconciliation to GAAP
Financials
|
Three Months
Ended
|
|
December 31,
2015
|
|
Income
(Loss)
Before Tax,
as Reported
|
Impairments
& Special
Charges
|
Adjusted
Income
Before Tax
|
Interest
Expense,
Net
|
Depreciation
&
Amortization
|
Equity
Comp.
Expense
|
Adjusted
EBITDA
|
|
(In
Thousands)
|
Fluids
Division
|
$
|
(2,745)
|
|
$
|
19,958
|
|
$
|
17,213
|
|
$
|
(158)
|
|
$
|
8,856
|
|
$
|
—
|
|
$
|
25,911
|
|
Production Testing
Division
|
(50,759)
|
|
49,893
|
|
(866)
|
|
(98)
|
|
5,643
|
|
—
|
|
4,679
|
|
Compression
Division
|
(152,772)
|
|
151,896
|
|
(876)
|
|
8,110
|
|
20,643
|
|
505
|
|
28,382
|
|
Offshore Services
Segment
|
1,782
|
|
795
|
|
2,577
|
|
—
|
2,928
|
|
—
|
|
5,505
|
|
Eliminations and
other
|
4
|
|
—
|
4
|
|
—
|
(4)
|
|
—
|
|
—
|
|
Subtotal
|
(204,490)
|
|
222,542
|
|
18,052
|
|
7,854
|
|
38,066
|
|
505
|
|
64,477
|
|
Corporate and
other
|
(25,902)
|
|
8,508
|
|
(17,394)
|
|
5,230
|
|
171
|
|
1,822
|
|
(10,171)
|
|
TETRA excl
Maritech
|
(230,392)
|
|
231,050
|
|
658
|
|
13,084
|
|
38,237
|
|
2,327
|
|
54,306
|
|
Maritech
|
(2,847)
|
|
—
|
|
(2,847)
|
|
3
|
|
435
|
|
—
|
|
(2,409)
|
|
Consolidated
|
$
|
(233,239)
|
|
$
|
231,050
|
|
$
|
(2,189)
|
|
$
|
13,087
|
|
$
|
38,672
|
|
$
|
2,327
|
|
$
|
51,897
|
|
|
|
|
|
|
|
|
|
|
December 31,
2014
|
|
Income
(Loss)
Before Tax,
as Reported
|
Impairments
& Special
Charges
|
Adjusted
Income
Before Tax
|
Interest
Expense,
Net
|
Depreciation
&
Amortization
|
Equity
Comp.
Expense
|
Adjusted
EBITDA
|
|
(In
Thousands)
|
Fluids
Division
|
$
|
12,628
|
|
$
|
6,481
|
|
$
|
19,109
|
|
$
|
(14)
|
|
$
|
8,428
|
|
$
|
—
|
|
$
|
27,523
|
|
Production Testing
Division
|
(66,547)
|
|
75,337
|
|
8,790
|
|
(2)
|
|
6,711
|
|
—
|
|
15,499
|
|
Compression
Division
|
3,237
|
|
2,913
|
|
6,150
|
|
7,662
|
|
20,055
|
|
625
|
|
34,492
|
|
Offshore Services
Segment
|
(20,713)
|
|
17,654
|
|
(3,059)
|
|
—
|
|
3,151
|
|
—
|
|
92
|
|
Eliminations and
other
|
3
|
|
—
|
|
3
|
|
—
|
|
(3)
|
|
—
|
|
—
|
|
Subtotal
|
(71,392)
|
|
102,385
|
|
30,993
|
|
7,646
|
|
38,342
|
|
625
|
|
77,606
|
|
Corporate and
other
|
(17,527)
|
|
737
|
|
(16,790)
|
|
5,159
|
|
250
|
|
1,341
|
|
(10,040)
|
|
TETRA excl
Maritech
|
(88,919)
|
|
103,122
|
|
14,203
|
|
12,805
|
|
38,592
|
|
1,966
|
|
67,566
|
|
Maritech
|
(30,948)
|
|
—
|
|
(30,948)
|
|
—
|
|
39
|
|
—
|
|
(30,909)
|
|
Consolidated
|
$
|
(119,867)
|
|
$
|
103,122
|
|
$
|
(16,745)
|
|
$
|
12,805
|
|
$
|
38,631
|
|
$
|
1,966
|
|
$
|
36,657
|
|
|
|
|
Year
Ended
|
|
December 31,
2015
|
|
Income
(Loss)
Before Tax,
as Reported
|
Impairments
& Special
Charges
|
Adjusted
Income
Before Tax
|
Interest
Expense,
Net
|
Depreciation
&
Amortization
|
Equity
Comp.
Expense
|
Adjusted
EBITDA
|
|
(In
Thousands)
|
Fluids
Division
|
$
|
80,789
|
|
$
|
20,599
|
|
$
|
101,388
|
|
$
|
(258)
|
|
$
|
35,125
|
|
$
|
—
|
|
$
|
136,255
|
|
Production Testing
Division
|
(55,720)
|
|
54,530
|
|
(1,190)
|
|
(89)
|
|
24,094
|
|
—
|
|
22,815
|
|
Compression
Division
|
(146,798)
|
|
152,390
|
|
5,592
|
|
32,178
|
|
82,024
|
|
2,164
|
|
121,958
|
|
Offshore Services
Segment
|
(195)
|
|
1,344
|
|
1,149
|
|
—
|
|
11,500
|
|
—
|
|
12,649
|
|
Eliminations and
other
|
(1)
|
|
—
|
|
(1)
|
|
—
|
|
(14)
|
|
—
|
|
(15)
|
|
Subtotal
|
(121,925)
|
|
228,863
|
|
106,938
|
|
31,831
|
|
152,729
|
|
2,164
|
|
293,662
|
|
Corporate and
other
|
(76,005)
|
|
8,579
|
|
(67,426)
|
|
18,654
|
|
911
|
|
7,978
|
|
(39,883)
|
|
TETRA excl
Maritech
|
(197,930)
|
|
237,442
|
|
39,512
|
|
50,485
|
|
153,640
|
|
10,142
|
|
253,779
|
|
Maritech
|
(3,833)
|
|
—
|
|
(3,833)
|
|
29
|
|
1,375
|
|
—
|
|
(2,429)
|
|
Consolidated
|
$
|
(201,763)
|
|
$
|
237,442
|
|
$
|
35,679
|
|
$
|
50,514
|
|
$
|
155,015
|
|
$
|
10,142
|
|
$
|
251,350
|
|
|
|
|
|
|
|
|
|
|
December 31,
2014
|
|
Income
(Loss)
Before Tax,
as Reported
|
Impairments
& Special
Charges
|
Adjusted
Income
Before Tax
|
Interest
Expense,
Net
|
Depreciation
&
Amortization
|
Equity
Comp.
Expense
|
Adjusted
EBITDA
|
|
(In
Thousands)
|
Fluids
Division
|
$
|
64,705
|
|
$
|
4,229
|
|
$
|
68,934
|
|
$
|
(250)
|
|
$
|
31,279
|
|
$
|
—
|
|
$
|
99,963
|
|
Production Testing
Division
|
(66,168)
|
|
77,095
|
|
10,927
|
|
(31)
|
|
29,336
|
|
—
|
|
40,232
|
|
Compression
Division
|
7,340
|
|
17,022
|
|
24,362
|
|
12,964
|
|
41,097
|
|
1,544
|
|
79,967
|
|
Offshore Services
Segment
|
(26,251)
|
|
19,784
|
|
(6,467)
|
|
36
|
|
13,327
|
|
—
|
|
6,896
|
|
Eliminations and
other
|
12
|
|
—
|
|
12
|
|
—
|
|
(12)
|
|
—
|
|
—
|
|
Subtotal
|
(20,362)
|
|
118,130
|
|
97,768
|
|
12,719
|
|
115,027
|
|
1,544
|
|
227,058
|
|
Corporate and
other
|
(66,355)
|
|
3,554
|
|
(62,801)
|
|
19,268
|
|
1,725
|
|
5,231
|
|
(36,577)
|
|
TETRA excl
Maritech
|
(86,717)
|
|
121,684
|
|
34,967
|
|
31,987
|
|
116,752
|
|
6,775
|
|
190,481
|
|
Maritech
|
(71,154)
|
|
—
|
|
(71,154)
|
|
11
|
|
160
|
|
—
|
|
(70,983)
|
|
Consolidated
|
$
|
(157,871)
|
|
$
|
121,684
|
|
$
|
(36,187)
|
|
$
|
31,998
|
|
$
|
116,912
|
|
$
|
6,775
|
|
$
|
119,498
|
|
Schedule G: Non-GAAP Reconciliation to Free Cash Flow
|
Three Months
Ended
December 31,
|
|
Twelve Months
Ended
December 31,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
(In
Thousands)
|
TETRA
Consolidated
|
|
|
|
|
|
|
|
Cash from
operations
|
$
|
77,724
|
|
|
$
|
56,708
|
|
|
$
|
195,951
|
|
|
$
|
108,645
|
|
ARO
settlements
|
5,109
|
|
|
23,010
|
|
|
10,305
|
|
|
63,319
|
|
Capital expenditures,
net of sales proceeds
|
(22,221)
|
|
|
(34,994)
|
|
|
(113,462)
|
|
|
(114,082)
|
|
Free cash flow before
ARO settlements
|
60,612
|
|
|
44,724
|
|
|
92,794
|
|
|
57,882
|
|
|
|
|
|
|
|
|
|
CSI Compressco
LP
|
|
|
|
|
|
|
|
Cash from
operations
|
38,351
|
|
|
13,478
|
|
|
101,893
|
|
|
44,819
|
|
Capital expenditures,
net of sales proceeds
|
(19,274)
|
|
|
(19,317)
|
|
|
(95,272)
|
|
|
(48,137)
|
|
Free cash
flow
|
19,077
|
|
|
(5,839)
|
|
|
6,621
|
|
|
(3,318)
|
|
|
|
|
|
|
|
|
|
TTI
Only
|
|
|
|
|
|
|
|
Cash from
operations
|
39,373
|
|
|
43,230
|
|
|
94,058
|
|
|
63,826
|
|
ARO
settlements
|
5,109
|
|
|
23,010
|
|
|
10,305
|
|
|
63,319
|
|
Capital expenditures,
net of sales proceeds
|
(2,947)
|
|
|
(15,677)
|
|
|
(18,190)
|
|
|
(65,945)
|
|
Free cash flow before
ARO settlements
|
41,535
|
|
|
50,563
|
|
|
86,173
|
|
|
61,200
|
|
Distributions from CSI
Compressco LP
|
7,877
|
|
|
6,479
|
|
|
30,544
|
|
|
24,118
|
|
Free cash flow before
ARO settlements and after distributions from CSI Compressco
LP
|
49,412
|
|
|
57,042
|
|
|
116,717
|
|
|
85,318
|
|
Debt restructuring
costs
|
$
|
3,036
|
|
|
$
|
—
|
|
|
$
|
3,036
|
|
|
$
|
—
|
|
Adjusted free cash flow
before ARO settlements and after distributions from CSI
Compressco LP
|
52,448
|
|
|
57,042
|
|
|
119,753
|
|
|
85,318
|
|
Schedule H: Non-GAAP Reconciliation of TETRA Net Debt
The cash and debt positions of TETRA and CSI Compressco LP as of
December 31, 2015, are shown below.
TETRA and CSI Compressco LP's debt agreements are distinct and
separate with no cross default provisions, no cross collateral
provisions and no cross guarantees. Management believes that the
most appropriate method to analyze the debt positions of each
company is to view them separately, as noted below.
The following reconciliation of net debt is presented as a
supplement to financial results prepared in accordance with GAAP.
The Company defines net debt as the sum of long-term and short-term
debt on its consolidated balance sheet, less cash, excluding
restricted cash on the consolidated balance sheet and excluding the
debt and cash of CSI Compressco LP. Management views net debt as a
measure of TETRA's ability to reduce debt, add to cash balances,
pay dividends, repurchase stock, and fund investing and financing
activities.
|
December 31,
2015
|
|
December 31,
2014
|
|
TETRA
|
|
CCLP
|
|
TETRA
|
|
CCLP
|
|
(In
Millions)
|
Non-restricted
cash
|
$
|
12.4
|
|
|
$
|
10.6
|
|
|
$
|
14.3
|
|
|
$
|
34.1
|
|
|
|
|
|
|
|
|
|
Revolver debt
outstanding
|
22.9
|
|
|
235.0
|
|
|
90.0
|
|
|
195.0
|
|
Senior Notes
outstanding
|
270.1
|
|
|
345.5
|
|
|
305.0
|
|
|
345.0
|
|
Net debt
|
$
|
280.6
|
|
|
$
|
569.9
|
|
|
$
|
380.7
|
|
|
$
|
505.9
|
|
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SOURCE TETRA Technologies, Inc.