PR Newswire | Aug 2, 2021 05:00PM EDT

Low Carbon Energy Milestones And Secures Multiple Deepwater Awards

08/02 16:00 CDT

TETRA Technologies, Inc. Announces Second Quarter 2021 Results, Attainment Of Low Carbon Energy Milestones And Secures Multiple Deepwater Awards THE WOODLANDS, Texas, Aug. 2, 2021

THE WOODLANDS, Texas, Aug. 2, 2021 /PRNewswire/ -- TETRA Technologies, Inc. ("TETRA" or the "Company") (NYSE:TTI) today announced second quarter 2021 results.

Second quarter 2021 revenue was $102 million, a sequential increase of 32% over the first quarter of 2021 reflecting improvements by all business segments, including the seasonal peak in Northern Europe chemicals sales. Net loss before discontinued operations was $6.7 million, inclusive of $4.7 million of non-recurring charges and expenses. This compares to a net loss before discontinued operations of $11.9 million in the first quarter, inclusive of $6.6 million of non-recurring charges and expenses. Net loss per share from continuing operations in the second quarter was $0.05. Excluding the non-recurring charges and expenses, the net loss per share from continuing operations was $0.02. Adjusted EBITDA, excluding non-recurring charges, was $13.0 million, which includes a $1.6 million benefit from the increase in TETRA's equity ownership in CSI Compressco LP and Standard Lithium, where we own approximately 10.9% and 1.1%, respectively. Second quarter adjusted EBITDA was up 44% from the first quarter of 2021 reflecting stronger operational performance from both business segments. Cash flow from operating activities was $1.8 million in the second quarter of 2021 and compared to $5.8 million in the first quarter of 2021, while adjusted free cash flow from continuing operations was a use of cash of $4.5 million reflecting a buildup in working capital from the higher activity levels towards the end of the second quarter. This compares to $5.4 million of adjusted free cash flow from continuing operations in the first quarter of 2021.

Brady Murphy, TETRA's Chief Executive Officer, stated, "We achieved good overall revenue and EBITDA progression from the first quarter, and even more so as the quarter progressed, and with some great wins and key milestones in all of our business segments, I am very encouraged with the outlook going forward. By early June we saw meaningful increase in demand for international and Gulf of Mexico Completion Fluids, which is consistent with what we believe to be the start of strong, multi-year international and offshore recovery. We exited the quarter with June being our highest revenue and Adjusted EBITDA month since March 2020 reflecting sequential improvements in all of our business groups. Completion Fluids and Products Adjusted EBITDA margin of 27.7% was an improvement of 400 basis points from the first quarter of 2021. Although faced with some inflationary headwinds in our Water and Flowback business ahead of our ability to get broad based price increases, the third quarter EBITDA and related margins are expected to benefit from two newly awarded recycling projects, a fully deployed SandstormTM project in Argentina and continued improvement and alignment of service pricing. Going into the second half of the year, we expect to see a continued recovery in our North American onshore business with higher prices plus continued stronger activity in our international fluids business with the potential for strong market recovery in all of our segments heading into 2022."

"The second quarter, and also more recently in July, we received a lot of positive news for our oil and gas related business as well as our low carbon energy opportunities. In July we completed our first international TETRA CS Neptune(r) fluids job in the North Sea, which also was our first ever high-density monovalent operation. While the revenue from this project was considerably smaller than our typical TETRA CS Neptune(r) fluids projects in the Gulf of Mexico, it reflects acceptance of this proprietary technology into new markets. We were awarded a three-year completion fluids and services contract with one of the most active deepwater super major operators in the Gulf of Mexico (GoM) that represents a significant market share increase for this customer and for our GoM operations. We have also received a multi-year major completion fluids award through partnering with a major integrated service company for deepwater work in Brazil. We are expecting our international and offshore fluids sales to increase materially in the second half of the year from the first half due to major project awards and overall increased customer activity. With the ongoing growth and success of our Northern European industrial chemicals business, we are proceeding with a planned expansion for our Kokkola calcium chloride plant in Finland to increase capacity by over 25% by mid-2022.

"Each of our low carbon energy business initiatives continues to advance at an accelerated pace. Following diligence and successful CO2 mineralization to design specifications in a San Antonio SkyCycle pilot plant, we have agreed to make a $5 million investment in CarbonFree in the form of a convertible note. This will allow us to participate in the equity upside as CarbonFree continues to make progress in commercializing its SkyCycle proprietary technology and we continue to advance our long term business relationship. Our PureFlowTM high purity zinc bromide has been qualified by three energy storage manufacturers, and we have received our first commercial purchase order well ahead of our year end expectations. We expect that this will be the first of many opportunities for TETRA to expand our PureFlow sales into the energy storage markets. In regard to lithium activities, Standard Lithium announced in the second quarter that they launched an engineering feasibility study to extract lithium from the brine, which would also include bromine, underlying the TETRA Arkansas leases as part of the 2017 agreement between Standard Lithium and TETRA. According to Standard Lithium, the results of this study are expected to be completed in the third quarter of 2021. As previously announced by Standard Lithium, this acreage has 890,000 tons of LCE equivalent at the inferred resource category. As we announced earlier today, we completed a preliminary exploratory study of the bromine and lithium in our Arkansas leases that includes the leases outside of the Standard Lithium agreement. The study indicates a rich brine concentration for both lithium and bromine and supports our actions to further evaluate a full economic feasibility of these assets. Finally, we have executed a memorandum of understanding to work with Anson Resources, an Australian publicly traded minerals company, to explore a business relationship for lithium and bromine extraction from their Paradox Basin Brine Project in southern Utah. The collaboration will include, among other things, the potential off-take agreement of bromine to meet our growing demands for both oil and gas and energy storage, potential licensing of TETRA's patented bromine derivative manufacturing process, as well as operational management of the plant(s).

"We have reduced our term loan by $36.3 million from $220.5 million as of September 30, 2020, to $184.2 million as of June 30, 2021 and reduced it by another $8.2 million in July. This will save us approximately $3.2 million per year, on an annualized basis, in interest expense. In July, we amended our Asset Based Loan ("ABL") extending the maturity to May 2025 and increased our availability for our ABL by approximately $9.4 million. With this amendment, we do not have any maturities until May 2025 other than our requirement to offer to prepay a percentage of excess cash flow following the conclusion of each calendar year. During the first half of 2021, we have recorded mark to market gains of $5.6 million on our equity holdings of CSI Compressco LP and Standard Lithium. As of July 30, 2021, the market value of these investments was $17.8 million, with no restrictions on our ability to monetize these investments. Additionally, in July we received an expected payment of $548,000 from our sale of our controlling interest in CSI Compressco."

This press release includes the following financial measures that are not presented in accordance with generally accepted accounting principles in the United States ("GAAP"): Adjusted earnings per share from continuing operations, Adjusted EBITDA, and Adjusted EBITDA Margin (Adjusted EBITDA as a percent of revenue) on consolidated and segment basis, Adjusted income/(loss) before tax, adjusted free cash flow from continuing operations, and net debt. Please see Schedules E through H for reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures.

Second Quarter Results and HighlightsA summary of key financial metrics for the second quarter are as follows:

Second Quarter 2021 Results

Three Months Ended

June 30, 2021March 31, 2021June 30, 2020

(In Thousands, Except per Share Amounts)

Revenue $102,326 $77,324 $96,070

Loss before discontinued operations(6,654) (11,943) (13,179)

Adjusted EBITDA before discontinued12,967 8,981 8,941 operations

GAAP EPS from continuing operations(0.05) (0.10) (0.11)

Adjusted EPS from continuing (0.02) (0.04) (0.06) operations

GAAP net cash provided by operating1,788 5,819 38,211 activities

Adjusted free cash flow from $(4,450) $5,369 $31,350 continuing operations

Completion Fluids & Products second quarter of 2021 revenue of $64.6 million increased 39% from the first quarter of 2021 driven by the seasonal increase for our Northern Europe industrial chemicals business and stronger offshore completion fluid sales. Completion Fluids & Products income before taxes was $16.4 million in the second quarter (25.4% of revenue) compared to $9.0 million (19.4% of revenue) in the first quarter of 2021. Adjusted EBITDA of $17.9 million increased $6.8 million sequentially. Second quarter Adjusted EBITDA included $1.5 million favorable mark to market adjustment from TETRA's investment in Standard Lithium. TETRA's value of the 1.6 million shares that we own in Standard Lithium was $9.7 million as of July 31, 2021.

Water & Flowback Services revenue was $37.7 million in the second quarter of 2021, an increase of 22% from the first quarter of 2021, and loss before taxes was $5.0 million. Adjusted EBITDA of $2.0 million (5.3% of revenue) increased 123% sequentially as we saw a rebound in Water Management and Flowback testing from the first quarter that was negatively impacted by winter storms.

Free Cash Flow and Balance Sheet

Cash from operating activities was $1.8 million in the second quarter while adjusted free cash flow from continuing operations was a use of cash of $4.5 million. Liquidity at the end of second quarter was $82.0 million. Liquidity is defined as unrestricted cash plus availability under the revolving credit facility. At the end of the second quarter unrestricted cash was $50.3 million and availability under our credit facility was $31.7 million. Debt was $171.8 million before the $8.2 million paydown in July, while net debt was $121.4 million.

Non-recurring Charges and Expenses Items

Non-recurring charges and expenses are reflected on Schedule E and include $1.3 million of cumulative adjustments to long-term incentives and appreciation right expenses, $0.7 million of restructuring and transaction expenses, and $2.7 million of stock warrant fair value adjustment expense.

Conference Call

TETRA will host a conference call to discuss these results tomorrow, August 3, 2021, at 10:30 a.m. Eastern Time. The phone number for the call is 1-888-347-5303. The conference call will also be available by live audio webcast and may be accessed through the Company's investor relations website at http://ir.tetratec.com/events-and-webcasts. A replay of the conference call will be available at 1-877-344-7529 conference number 10158935, 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: Elijio Serrano, CFO, TETRA Technologies, Inc., The Woodlands, Texas, Phone: 281.367.1983, www.tetratec.com

Financial Statements, Schedules and Non-GAAP Reconciliation Schedules (Unaudited)

Schedule A: Consolidated Income StatementSchedule B: Condensed Consolidated Balance SheetSchedule C: Consolidated Statements of Cash FlowsSchedule D: Statement Regarding Use of Non-GAAP Financial MeasuresSchedule E: Non-GAAP Reconciliation of Adjusted Income (Loss) From Continuing OperationsSchedule F: Non-GAAP Reconciliation of Adjusted EBITDASchedule G: Non-GAAP Reconciliation of Net DebtSchedule H: Non-GAAP Reconciliation to Adjusted Free Cash Flow From Continuing Operations

Company Overview and Forward-Looking Statements

TETRA Technologies, Inc. is a geographically diversified oil and gas services company, focused on completion fluids and associated products and services, water management, frac flowback, and production well testing. TETRA owns an 10.9% equity interest in CSI Compressco LP (NASDAQ: CCLP) and approximately 1.1% equity interest in Standard Lithium (NYSE: SLI).

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 the anticipated recovery of the oil and gas industry; curtailments in production and completion activities related to extreme winter weather; potential revenue associated with prospective energy storage projects or our pending carbon capture partnership; 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. 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 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.

Schedule A: Consolidated Income Statement (Unaudited)



Three Months Ended Six Months Ended

June 30, March 31, June 30, June 30, June 30, 2021 2021 2020 2021 2020

(In Thousands, Except per Share Amounts)

Revenues $102,326$77,324 $96,070 $179,650$228,773



Cost of sales, services, and rentals 77,208 60,614 70,607 137,822 164,722

Depreciation, amortization, and accretion 8,236 8,951 9,726 17,187 19,277

Impairments and other charges 449 - - 449 -

Insurance recoveries - (110) (74) (110) (74)

Total cost of revenues 85,893 69,455 80,259 155,348 183,925

Gross profit 16,433 7,869 15,811 24,302 44,848



General and administrative expense 17,351 20,012 23,862 37,363 44,210

Interest expense, net 3,886 4,404 4,604 8,290 9,896

Warrants fair value adjustment expense (income) 2,698 323 11 3,021 (327)

Other income, net (2,232) (5,095) (541) (7,327) (520)

Loss before taxes and discontinued operations (5,270) (11,775) (12,125) (17,045) (8,411)

Provision for income taxes 1,384 168 1,054 1,552 1,776

Loss before discontinued operations (6,654) (11,943) (13,179) (18,597) (10,187)

Discontinued operations:

Income (loss) from discontinued operations, net of taxes (126) 120,990 (23,788) 120,864 (37,156)

Net income (loss) (6,780) 109,047 (36,967) 102,267 (47,343)

Less: (income) loss attributable to noncontrolling interest^(1)27 (333) 15,712 (306) 24,537

Net income (loss) attributable to TETRA stockholders $(6,753)$108,714$(21,255)$101,961$(22,806)



Basic and diluted per share information:

Loss from continuing operations $(0.05) $(0.10) $(0.11) $(0.15) $(0.08)

Income (loss) from discontinued operations $0.00 $0.96 $(0.06) $0.96 $(0.10)

Net income (loss) attributable to TETRA stockholders $(0.05) $0.86 $(0.17) $0.81 $(0.18)

Weighted average shares outstanding 126,583 126,149 125,886 126,365 125,736

(Income) loss attributable to noncontrolling interest includes zero,^ $333 income and $15,781 loss for the three-month periods ended June 30,(1) 2021, March 31, 2021 and June 30, 2020, respectively, and $333 income and $24,615 loss for the six-month periods ended June 30, 2021 and 2020, respectively, related to discontinued operations.

Schedule B: Condensed Consolidated Balance Sheet (Unaudited)



June 30, December 31, 2021 2020

(In Thousands)

(Unaudited)

ASSETS

Current assets:

Cash and cash equivalents $50,314 $67,252

Restricted cash 65 65

Trade accounts receivable 79,467 64,078

Inventories 70,071 76,658

Assets of discontinued operations - 710,006

Prepaid expenses and other current assets 15,881 13,487

Total current assets 215,798 931,546

Property, plant, and equipment, net 91,423 96,856

Patents, trademarks and other intangible assets, 39,237 41,487 net

Deferred tax assets, net 44 52

Operating lease right-of-use assets 39,517 43,448

Investments 16,221 2,675

Other assets 14,569 16,775

Total long-term assets 201,011 201,293

Total assets $416,809 $1,132,839



LIABILITIES AND EQUITY

Current liabilities:

Trade accounts payable $38,868 $22,573

Unearned income 3,019 2,675

Accrued liabilities and other 44,069 38,791

Liabilities of discontinued operations 1,601 734,039

Current portion of long-term debt 8,157 -

Total current liabilities 95,714 798,078

Long-term debt, net 163,603 199,894

Deferred income taxes 1,939 1,942

Asset retirement obligations 12,699 12,484

Warrants liability 3,219 198

Operating lease liabilities 33,786 37,569

Other liabilities 6,792 11,612

Total long-term liabilities 222,038 263,699

Commitments and contingencies

TETRA stockholders' equity 100,158 (9,640)

Noncontrolling interests (1,101) 80,702

Total equity 99,057 71,062

Total liabilities and equity $416,809 $1,132,839

Schedule C: Consolidated Statements of Cash Flows (Unaudited)



Six Months Ended June 30,

2021 2020

(In Thousands)

Operating activities:

Net income (loss) $102,267$(47,343)

Reconciliation of net income (loss) to net cash provided by operating activities:

Depreciation, amortization, and accretion 17,215 59,302

Gain on GP Sale (120,574)-

Impairment and other charges 449 14,348

Gain on retained CSI Compressco units and Standard (5,613) (183) Lithium shares

Equity-based compensation expense 2,554 2,896

Amortization and expense of financing costs and 1,429 2,755 deferred financing gains

Debt-related expenses - 4,754

Warrants fair value adjustment 3,021 (326)

Gain on sale of assets (275) (2,019)

Other non-cash charges (70) 5,380

Changes in operating assets and liabilities:

Accounts receivable (15,694) 55,552

Inventories 5,456 10,733

Prepaid expenses and other current assets (2,442) (3,038)

Trade accounts payable and accrued expenses 21,295 (42,853)

Other (1,411) 429

Net cash provided by operating activities 7,607 60,387

Investing activities:

Purchases of property, plant, and equipment, net (12,489) (19,608)

Proceeds from sale of CCLP, net of cash divested 18 -

Proceeds on sale of property, plant, and equipment 754 5,311

Insurance recoveries associated with damaged equipment110 591

Other investing activities 1,156 (357)

Net cash used in investing activities (10,451) (14,063)

Financing activities:

Proceeds from long-term debt - 338,343

Principal payments on long-term debt (29,320) (341,364)

CSI Compressco distributions - (620)

Tax remittances on equity based compensation - (341)

Debt issuance costs and other financing activities (455) (2,504)

Net cash provided by (used in) financing activities (29,775) (6,486)

Effect of exchange rate changes on cash (896) (826)

(Decrease) increase in cash and cash equivalents (33,515) 39,012

Cash and cash equivalents and restricted cash at 83,894 17,768 beginning of period

Cash and cash equivalents at beginning of period 16,577 2,370 associated with discontinued operations

Cash and cash equivalents and restricted cash at beginning of period associated with continuing 67,317 15,398 operations

Cash and cash equivalents and restricted cash at end 50,379 56,780 of period

Cash and cash equivalents at end of period associated - 6,757 with discontinued operations

Cash and cash equivalents and restricted cash at end $50,379 $50,023 of period associated with continuing operations

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: net debt; adjusted consolidated and segment income (loss) before taxes, special charges and discontinued operations; adjusted diluted earnings (loss) per share from continuing operations; consolidated and segment adjusted EBITDA; adjusted free cash flow and free cash flow from continuing operations; and segment adjusted EBITDA as a percent of revenue ("Adjusted EBITDA margin"). 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 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 (loss) from continuing operations 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 income (loss) from continuing operations 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 (loss) per share from continuing operations is defined as the Company's diluted earnings (loss) per share excluding certain special or other charges (or credits), discontinued operations and noncontrolling interest attributable to discontinued operations. Adjusted diluted earnings (loss) 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 (and Adjusted EBITDA as a percent of revenue) is defined as earnings before interest, taxes, depreciation, amortization, impairments and certain non-cash charges, non-recurring adjustments and discontinued operations. Adjusted EBITDA (and Adjusted EBITDA margin) 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. Adjusted free cash flow from continuing operations is defined as cash from operations less discontinued operations EBITDA and discontinued operations capital expenditures, less capital expenditures net of sales proceeds and cost of equipment sold and including cash distributions to TETRA from CSI Compressco LP and cash from other investments. 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.

Adjusted free cash flow from continuing operations do 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.

Schedule E: Non-GAAP Reconciliation of Adjusted Income (Loss) From Continuing Operations (Unaudited)



Three Months Ended

June 30, March 31, June 30, 2021 2021 2020

(In Thousands, Except per Share Amounts)



Loss before taxes and discontinued operations $ (5,270)$ (11,775) $ (12,125)

(Provision) benefit for income taxes (1,384) (168) (1,054)

Noncontrolling interest attributed to continuing operations27 - (69)

Loss from continuing operations (6,627) (11,943) (13,248)

Adjustment to long-term incentives 627 2,897 -

Transaction and other expenses (345) 2,550 186

Impairments and other charges - - -

Former CEO stock appreciation right expense 714 509 -

Restructuring charges 1,033 340 218

Debt refinancing - - -

Stock warrant fair value adjustment 2,698 323 11

Severance expenses - - 1,920

Bad debt - - 2,800

Adjusted income (loss) from continuing operations $ (1,900)$ (5,324) $ (8,113)



Basic and diluted per share information

Loss from continuing operations $ (0.05) $ (0.10) $ (0.11)

Adjusted income (loss) from continuing operations $ (0.02) $ (0.04) $ (0.06)

Diluted weighted average shares outstanding 126,583 126,149 125,886

Schedule F: Non-GAAP Reconciliation of Adjusted EBITDA (Unaudited)



Three Months Ended June 30, 2021

CompletionWater & Corporate Other and Fluids & Flowback SG&A EliminationsTotal Products Services

(In Thousands, Except Percents)

Revenues $64,607 $37,719 $- $- $102,326

Net income (loss) before taxes and 16,427 (4,978) (9,543) (7,176) (5,270) discontinued operations

Adjustment to long-term incentives - - 627 - 627

Transaction and other expenses (391) 145 (99) - (345)

Former CEO stock appreciation right expense - - 714 - 714

Restructuring expenses 291 742 - - 1,033

Stock warrant fair value adjustment - - - 2,698 2,698

Adjusted income (loss) before taxes and $16,327 $(4,091) $(8,301)$(4,478) $(543) discontinued operations



Adjusted interest expense, net (162) 3 - 4,044 3,885

Adjusted depreciation and amortization 1,701 6,087 - 245 8,033

Equity compensation expense - - 1,592 - 1,592

Adjusted EBITDA $17,866 $1,999 $(6,709)$(189) $12,967



Adjusted EBITDA as a % of revenue 27.7 %5.3 % 12.7 %



Three Months Ended March 31, 2021

CompletionWater & Corporate Other and Fluids & Flowback SG&A EliminationsTotal Products Services

(In Thousands, Except Percents)

Revenues $46,522 $30,802 $- $- $77,324

Net income (loss) before taxes and 9,010 (5,480) (13,020) (2,285) (11,775) discontinued operations

Adjustment to long-term incentives 281 - 2,616 - 2,897

Transaction and other expenses - - 2,550 - 2,550

Former CEO stock appreciation right expense - - 509 - 509

Restructuring and severance expenses 181 - 160 - 341

Stock warrant fair value adjustment - - - 323 323

Adjusted income (loss) before taxes and $9,472 $(5,480) $(7,185)$(1,962) $(5,155) discontinued operations

Adjusted interest expense, net (138) (522) - 5,064 4,404

Adjusted depreciation and amortization 1,705 6,899 - 166 8,770

Equity compensation expense - - 962 - 962

Adjusted EBITDA $11,039 $897 $(6,223)$3,268 $8,981



Adjusted EBITDA as a % of revenue 23.7 %2.9 % 11.6 %



Three Months Ended June 30, 2020

CompletionWater & Corporate Other and Fluids & Flowback SG&A EliminationsTotal Products Services

(In Thousands, Except Percents)

Revenues $71,346 $24,724 $- $- $96,070

Net income (loss) before taxes and 13,202 (8,418) (11,611) (5,298) (12,125) discontinued operations

Severance 569 1,016 334 - 1,919

Transaction and other expenses (90) - 276 - 186

Restructuring and severance expenses 31 187 - - 218

Stock warrant fair value adjustment - - - 11 11

Allowance for bad debt 2,800 - - - 2,800

Adjusted income (loss) before taxes and 16,512 (7,215) -(11,001) (5,287) (6,991) discontinued operations

Adjusted interest expense, net (143) (2) - 4,749 4,604

Adjusted depreciation and amortization 1,934 7,617 - 175 9,726

Equity compensation expense - - 1,602 - 1,602

Adjusted EBITDA $18,303 $400 $(9,399)$(363) $8,941



Adjusted EBITDA as a % of revenue 25.7 %1.6 % 9.3 %



Schedule G: Non-GAAP Reconciliation of TETRA Net Debt (Unaudited)



The following reconciliation of net debt is presented as a supplement to financial results prepared in accordance with GAAP.



June 30, December 31, 2021 2020

(In Thousands)

Non-restricted cash $ 50,314 $ 67,252



Asset-Based Credit Agreement - -

Term Credit Agreement $ 171,760 $ 199,894

Net debt $ 121,446 $ 132,642

Schedule H: Non-GAAP Reconciliation to Adjusted Free Cash Flow From Continuing Operations (Unaudited)



Three Months Ended Six Months Ended

June 30, March 31,June 30, June 30,June 30, 2021 2021 2020 2021 2020

(In Thousands)

Cash from operating activities $1,788 $5,819 $38,211$7,607$60,387

Discontinued operations operating activities (adjusted EBITDA income (loss))- (416) 4,823 (416) 18,180

Cash from continued operating activities 1,788 6,235 33,388 8,023 42,207

Less: Continuing operations capital expenditures (6,290) (3,220) (2,207) (9,510)(6,689)

Distributions from CSI Compressco LP ^(1) 52 - 169 52 338

Cash (distributed to partners) received from other investments - 2,354 - 2,354 -

Adjusted Free Cash Flow From Continuing Operations $(4,450)$5,369 $31,350$919 $35,856





^(1) Following the GP Sale on January 29, 2021, TETRA retained a 10.9% limited partner interest in CCLP.

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SOURCE TETRA Technologies, Inc.