THE WOODLANDS, Texas,
Feb. 27, 2015 /PRNewswire/
-- TETRA Technologies, Inc. (NYSE:TTI) today announced fourth
quarter 2014 earnings per share of $0.09, excluding Maritech and other charges,
which compares to $0.12 per share in
the fourth quarter of 2013, also excluding Maritech and other
charges. Fourth quarter 2014 revenue of $316 million increased 40% from the fourth
quarter of 2013 primarily as a result of the acquisition of
Compressor Systems, Inc. ("CSI") on August
4, 2014 by CSI Compressco LP.
Consolidated GAAP fourth quarter 2014 earnings per share to
TETRA stockholders including Maritech and other charges was a loss
of $(1.90) with 78.9 million weighted
average common shares outstanding, which compares to the fourth
quarter of 2013 loss of $(0.13) with
78.2 million weighted average common shares outstanding.
Highlights of the 2014 fourth quarter include:
- Fourth quarter adjusted free cash flow, excluding the CSI
Compressco LP free cash flow and Maritech asset retirement
obligations (ARO) cash settlements, was $57
million due to lower capital expenditures and improvements
in working capital management as well as adjusted earnings being
consistent with the fourth quarter guidance that was provided on
November 7, 2014. Adjusted
TETRA free cash flow for 2014 was $86
million(1);
- Adjusted Production Testing pre-tax margins were 15.5%, up
sequentially from 6.8% in the third quarter of 2014 reflecting the
cumulative impact of actions to expand and diversify the customer
base, reposition equipment and cost reductions (2);
- Continued improvements in the Fluids Division driven by
stronger completion fluids volumes onshore and offshore
(Gulf of Mexico and
internationally) in addition to improved results in chemical
product sales;
- The Compression Division reported adjusted EBITDA of
$34 million, inclusive of results
from the acquisition of CSI, which are consistent with our
acquisition economics. On January 22,
2015, CSI Compressco LP declared a quarterly distribution of
$0.485 per unit, with a coverage
ratio of 1.71x (2);
- Fourth quarter goodwill and other asset impairments,
transaction costs, and Maritech's net loss totaled $1.99 per share.
(1)See Schedule H for details. (2) See Schedule B
for GAAP amount details.
Fourth Quarter
Results, excluding unusual charges and Maritech
|
Stated in
thousands, except per share amounts
|
|
Three Months
Ended
|
|
Change
|
|
Dec. 31,
2014
|
|
Dec. 31,
2013
|
|
Year-on-year
|
Revenue
|
$315,093
|
|
$224,068
|
|
41%
|
Income before taxes
and discontinued operations(1)
|
14,204
|
|
12,463
|
|
14%
|
Net income
attributable to TETRA shareholders(1)
|
7,048
|
|
9,215
|
|
-24%
|
Diluted EPS
attributable to TETRA shareholders(1)
|
$0.09
|
|
$0.12
|
|
-24%
|
Adjusted Pretax
operating margin
|
4.5%
|
|
5.6%
|
|
-105
bps
|
Adjusted
EBITDA
|
67,605
|
|
39,099
|
|
73%
|
(1) Income
before taxes and discontinued operations, including unusual charges
and Maritech was a loss of $(119.9) million in the fourth quarter
of 2014 and a loss of $(17.6) million in the fourth quarter of
2013. Net income attributable to TETRA shareholders,
including unusual charges and Maritech was a loss of $(149.7)
million in the fourth quarter of 2014, and a loss of $(10.3)
million in the fourth quarter of 2013. Diluted EPS, including
unusual charges and Maritech was a loss of $(1.90) in the fourth
quarter of 2014, and a loss of $(0.13) in the fourth quarter of
2013. See Schedules E and G for details.
|
Analysis of Fourth Quarter Results
Stuart M. Brightman, TETRA's
President and Chief Executive Officer, stated, "Revenues in our
Fluids Division for the fourth quarter of 2014 increased by 4.7%
sequentially and 24% compared to the fourth quarter of 2013, and
profitability showed a similar improvement versus both comparable
periods. Excluding $6.5 million of
asset impairment charges, the Fluids Division reported adjusted
pretax profits of $19 million in the
fourth quarter of 2014. This outstanding performance was
driven by strength in Gulf of
Mexico completion services and expansion in US land
operations, chemicals product sales, and our international
operations.
"Our Production Testing Division's fourth quarter results also
improved sequentially, as well as compared to 2013's fourth
quarter, with adjusted pretax earnings for the Division of
$8.8 million, which were 15.5% of
revenue, excluding $75 million of
goodwill and other asset impairments. The Production Testing
Division's adjusted pretax earnings for the fourth quarter of 2013
were $0.7 million. This continued
trend of increasing profitability was driven by improvement in our
North American operations due to the aggregate impact of cost
reductions, the redeployment of assets to more favorable basins,
and continued expansion of our customer base. Our improved fourth
quarter results in Production Testing clearly demonstrates the
benefit of our aggressive pursuit of these actions over the past
year.
"Our Compression Division closed its first complete quarter
following the August 2014 acquisition
of Compressor Systems, Inc. with results that were consistent with
our expectations for revenue expansion and cost reduction, and
verified the successful execution of our integration strategy.
Excluding transaction costs and asset impairments of $2.9 million, the Compression Division's pretax
earnings for the fourth quarter of 2014 were $6.2 million. Adjusted EBITDA was
$34.5 million excluding the noted
transaction and other expenses. CSI Compressco LP previously
reported a fourth quarter distribution of $0.485 per unit and distribution coverage ratio
of 1.71x.
"Our Offshore Services Segment had an adjusted pretax loss of
$(3.1) million for the fourth
quarter, excluding $18 million of
asset impairments and goodwill charges. During the fourth quarter,
the Segment continued to see significant project delays and reduced
demand in a very competitive market environment. We have continued
to reduce personnel and leased-asset costs for this Segment,
in-line with market activity. We expect demand to continue to be
soft in a low-commodity-price environment during 2015.
"Maritech made significant progress on several of its remaining
abandonment and decommissioning projects during the fourth quarter.
We will continue work on the reduction of Maritech's remaining
asset retirement obligations as practical during 2015.
"During the fourth quarter of 2014, we generated $57 million of free cash flow, excluding CSI
Compressco LP free cash flow and Maritech ARO cash settlements, and
$86 million for the total year 2014,
which marks the second consecutive year above our $80 million annual target (as shown in Schedule
H). This gives us additional confidence in our ability to remain
cash flow positive, even in challenging market conditions, during
2015."
Divisional revenues, adjusted pretax earnings/(loss), adjusted
pretax margins, and adjusted EBITDA for the fourth quarter of 2014
versus the fourth quarter of 2013 are summarized in the table
below:
Segment
Results
|
|
|
|
Stated in
thousands
|
|
|
|
|
Three Months
Ended
|
|
Dec. 31,
2014
|
|
Dec. 31,
2013
|
|
Revenue
|
Income
Before
Taxes(1)
|
% of
Revenue(2)
|
Adjusted
EBITDA(2)
|
|
Revenue
|
Income
Before
Taxes(1)
|
% of
Revenue(2)
|
Adjusted
EBITDA(2)
|
Fluids
Division
|
$110,271
|
$19,109
|
17.3%
|
$27,523
|
|
$88,782
|
$13,734
|
15.5%
|
$19,614
|
Production Testing
Division
|
56,632
|
8,790
|
15.5%
|
15,500
|
|
46,563
|
671
|
1.4%
|
7,501
|
Compression
Division
|
124,830
|
13,814
|
11.1%
|
34,494
|
|
32,714
|
6,855
|
21.0%
|
10,949
|
Offshore Services
Segment
|
42,296
|
(3,059)
|
-7.2%
|
92
|
|
67,273
|
7,097
|
10.5%
|
10,610
|
Eliminations &
Other
|
(18,936)
|
3
|
0.0%
|
0
|
|
(11,264)
|
(105)
|
|
(106)
|
Subtotal
|
315,093
|
38,657
|
12.3%
|
77,609
|
|
224,068
|
28,252
|
12.6%
|
48,567
|
Corporate &
Other
|
-
|
(11,634)
|
|
(10,005)
|
|
-
|
(11,262)
|
|
(9,468)
|
Interest expense, net
- Compression Division
|
-
|
(7,662)
|
|
-
|
|
-
|
(166)
|
|
-
|
Interest expense, net
- TTI
|
-
|
(5,158)
|
|
-
|
|
-
|
(4,361)
|
|
-
|
Unsual charges &
Maritech(3)
|
757
|
(134,070)
|
|
-
|
|
1,366
|
(30,110)
|
|
-
|
As
reported
|
315,850
|
(119,867)
|
-38.0%
|
67,605
|
|
225,435
|
(17,646)
|
-7.8%
|
39,099
|
(1)
Segment Income Before Taxes are adjusted. Refer to Schedule G
for details.
|
(2) GAAP
pre-tax margins for fourth quarter 2014 are: Fluids Division -
11.5%, Production Testing Division - (117.5)% , Compression
Division - 2.6% and Offshore Services Segment - (49.0)%. GAAP
pre-tax margins for fourth quarter 2013 are: Fluids Division -
15.5%, Production Testing Division - 1.4% , Compression Division -
19.5% and Offshore Services Segment - (3.3)%. Refer to
Schedule B for GAAP amounts.
|
(3) EBITDA
is a non-GAAP financial measure that is defined and reconciled to
the nearest GAAP financial measure in Schedule G.
|
(4) Refer
to Schedule E for details.
|
Unusual and Other Charges and Maritech
During the fourth quarter 2014, the Maritech ARO's were revised
to reflect primarily the expected costs to complete certain
remaining wells. This adjustment resulted in a pretax loss
for the fourth quarter in the Maritech segment of $(31) million. On a per share basis, this
amounts to $(0.25) per share.
Additionally, in anticipation of a continued period of weak oil
prices and reduced activity levels, TETRA adjusted the carrying
value of goodwill and certain intangible assets, deferred taxes and
certain assets for the Offshore Services Segment, Production
Testing Division and Fluids Division. These non-cash charges
total $1.74 per share, and are
detailed on Schedule E.
Net Debt
At December 31, 2014 the cash and
debt positions of TETRA and CSI Compressco LP are noted
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. The management
believes that the most appropriate method to analyze the debt
positions of each company is to view them as noted below:
|
As of December 31,
2014
|
Stated in
millions
|
TETRA
|
|
CSI Compressco
LP
|
|
|
|
|
Non Restricted
Cash
|
$14
|
|
$34
|
|
|
|
|
Revolver debt
outstanding
|
90
|
|
195
|
Current portion of
Long-term debt
|
90
|
|
-
|
Long-term
debt
|
215
|
|
345
|
Net Debt
|
381
|
|
506
|
Conference Call
TETRA will host a conference call to discuss fourth quarter 2014
results today, February 27, 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
Schedule A – Consolidated Income Statement - Unaudited
Schedule B – Financial Results By Segment - Unaudited
Schedule C – Consolidated Balance Sheet - Unaudited
Schedule D – Long Term and Net Debt
Schedule E – Fourth Quarter Unusual Charges
Schedule F – Total Year Unusual Charges
Schedule G – Reconciliation to GAAP Financials
Schedule H – Free Cash Flow Reconciliation to GAAP
Schedule A – Consolidated Income Statement -
Unaudited
|
Three Months
Ended
December
31,
|
|
Twelve Months
Ended
December
31,
|
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
2013
|
|
|
(In
Thousands)
|
Revenues
|
$
|
315,850
|
|
|
$
|
225,435
|
|
|
$
|
1,077,567
|
|
|
$
|
909,398
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of Sales,
Service and Rentals
|
242,402
|
|
|
176,829
|
|
|
830,769
|
|
|
683,443
|
|
Depreciation,
Amortization, and Accretion
|
38,631
|
|
|
20,487
|
|
|
116,912
|
|
|
80,985
|
|
Impairments of
long-lived assets
|
34,842
|
|
|
9,578
|
|
|
34,842
|
|
|
9,578
|
|
Total Cost of
Revenues
|
315,875
|
|
|
206,894
|
|
|
982,523
|
|
|
774,006
|
|
Gross profit
(loss)
|
(25)
|
|
|
18,541
|
|
|
95,044
|
|
|
135,392
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and
administrative expense
|
39,900
|
|
|
32,434
|
|
|
142,689
|
|
|
131,466
|
|
Goodwill
impairment
|
64,295
|
|
|
—
|
|
|
64,295
|
|
|
—
|
|
Interest expense,
net
|
12,805
|
|
|
4,536
|
|
|
31,998
|
|
|
17,121
|
|
(Gain) loss on sale
of assets
|
537
|
|
|
(278)
|
|
|
(11)
|
|
|
(5,776)
|
|
Other (income)
expense
|
2,305
|
|
|
(505)
|
|
|
13,944
|
|
|
(7,291)
|
|
Income (loss) before
taxes and discontinued operations
|
(119,867)
|
|
|
(17,646)
|
|
|
(157,871)
|
|
|
(128)
|
|
Provision (benefit)
for income taxes
|
27,601
|
|
|
(8,526)
|
|
|
9,704
|
|
|
(3,454)
|
|
Income (loss)
before discontinued operations
|
(147,468)
|
|
|
(9,120)
|
|
|
(167,575)
|
|
|
3,326
|
|
Income from
discontinued operations, net of taxes
|
—
|
|
|
(1)
|
|
|
—
|
|
|
(1)
|
|
Net income
(loss)
|
(147,468)
|
|
|
(9,121)
|
|
|
(167,575)
|
|
|
3,325
|
|
Net (income)
attributable to noncontrolling interest
|
(2,282)
|
|
|
(1,208)
|
|
|
(2,103)
|
|
|
(3,172)
|
|
Net income (loss)
attributable to TETRA stockholders
|
$
|
(149,750)
|
|
|
$
|
(10,329)
|
|
|
$
|
(169,678)
|
|
|
$
|
153
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic per share
information:
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to TETRA stockholders
|
$
|
(1.90)
|
|
|
$
|
(0.13)
|
|
|
$
|
(2.16)
|
|
|
$
|
0.00
|
|
Weighted average shares
outstanding
|
78,887
|
|
|
78,211
|
|
|
78,600
|
|
|
77,954
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted per share
information:
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to TETRA stockholders
|
$
|
(1.90)
|
|
|
$
|
(0.13)
|
|
|
$
|
(2.16)
|
|
|
$
|
0.00
|
|
Weighted average shares
outstanding
|
78,877
|
|
|
78,211
|
|
|
78,600
|
|
|
78,840
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Schedule B – Financial Results by Segment - Unaudited
|
Three Months
Ended
December
31,
|
|
Twelve Months
Ended
December
31,
|
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
2013
|
|
|
(In
Thousands)
|
Revenues by
segment:
|
|
|
|
|
|
|
|
|
|
|
|
Fluids
Division
|
$
|
110,271
|
|
|
$
|
88,782
|
|
|
$
|
437,362
|
|
|
$
|
382,663
|
|
Production Testing
Division
|
56,633
|
|
|
46,563
|
|
|
192,824
|
|
|
195,983
|
|
Compression
Division
|
124,829
|
|
|
32,714
|
|
|
282,505
|
|
|
121,287
|
|
Offshore
Division
|
|
|
|
|
|
|
|
|
|
|
|
Offshore
Services
|
42,296
|
|
|
67,273
|
|
|
195,372
|
|
|
255,812
|
|
Maritech
|
758
|
|
|
1,366
|
|
|
4,722
|
|
|
5,560
|
|
Intersegment
eliminations
|
(17,542)
|
|
|
(10,383)
|
|
|
(30,595)
|
|
|
(50,122)
|
|
Offshore Division
total
|
25,512
|
|
|
58,256
|
|
|
169,499
|
|
|
211,250
|
|
Eliminations and
other
|
(1,395)
|
|
|
(880)
|
|
|
(4,623)
|
|
|
(1,785)
|
|
Total
revenues
|
$
|
315,850
|
|
|
$
|
225,435
|
|
|
$
|
1,077,567
|
|
|
$
|
909,398
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
(loss) by segment:
|
|
|
|
|
|
|
|
|
|
|
|
Fluids
Division
|
$
|
21,161
|
|
|
$
|
21,204
|
|
|
$
|
97,806
|
|
|
$
|
100,106
|
|
Production Testing
Division
|
(1,959)
|
|
|
5,882
|
|
|
12,610
|
|
|
29,566
|
|
Compression
Division
|
25,606
|
|
|
11,346
|
|
|
66,527
|
|
|
38,726
|
|
Offshore
Division
|
|
|
|
|
|
|
|
|
|
|
|
Offshore
Services
|
(13,943)
|
|
|
721
|
|
|
(10,314)
|
|
|
36,147
|
|
Maritech
|
(30,634)
|
|
|
(20,028)
|
|
|
(69,861)
|
|
|
(66,828)
|
|
Intersegment
eliminations
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Offshore Division
total
|
(44,577)
|
|
|
(19,307)
|
|
|
(80,175)
|
|
|
(30,681)
|
|
Corporate overhead and
eliminations
|
(256)
|
|
|
(584)
|
|
|
(1,724)
|
|
|
(2,325)
|
|
Total gross
profit
|
$
|
(25)
|
|
|
$
|
18,541
|
|
|
$
|
95,044
|
|
|
$
|
135,392
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss)
before taxes by segment:
|
|
|
|
|
|
|
|
|
|
|
|
Fluids
Division
|
$
|
12,628
|
|
|
$
|
13,735
|
|
|
$
|
64,705
|
|
|
$
|
69,438
|
|
Production Testing
Division
|
(66,547)
|
|
|
671
|
|
|
(66,168)
|
|
|
14,093
|
|
Compression
Division
|
3,237
|
|
|
6,367
|
|
|
7,340
|
|
|
20,200
|
|
Offshore
Division
|
|
|
|
|
|
|
|
|
|
|
|
Offshore
Services
|
(20,713)
|
|
|
(2,194)
|
|
|
(26,251)
|
|
|
22,870
|
|
Maritech
|
(30,948)
|
|
|
(20,286)
|
|
|
(71,154)
|
|
|
(64,396)
|
|
Intersegment
eliminations
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Offshore Division
total
|
(51,661)
|
|
|
(22,480)
|
|
|
(97,405)
|
|
|
(41,495)
|
|
Corporate overhead and
eliminations
|
(17,524)
|
|
|
(15,939)
|
|
|
(66,341)
|
|
|
(62,364)
|
|
Total income (loss)
before taxes
|
$
|
(119,867)
|
|
|
$
|
(17,646)
|
|
|
$
|
(157,871)
|
|
|
$
|
(128)
|
|
Please note that the above results by Segment are
inclusive of the unusual charges and expenses. Please see Schedules
E and F for details of those unusual charges and expenses.
Schedule C – Consolidated Balance Sheet -
Unaudited
|
December 31,
2014
|
|
December 31,
2013
|
|
(In
Thousands)
|
Balance
Sheet:
|
|
|
|
|
|
Cash (excluding
restricted cash)
|
$
|
48,384
|
|
|
$
|
38,754
|
|
Accounts receivable,
net
|
223,301
|
|
|
180,659
|
|
Inventories
|
189,144
|
|
|
100,792
|
|
Other current
assets
|
35,967
|
|
|
53,734
|
|
PP&E,
net
|
1,124,623
|
|
|
572,616
|
|
Other
assets
|
445,288
|
|
|
259,978
|
|
Total
assets
|
$
|
2,066,707
|
|
|
$
|
1,206,533
|
|
|
|
|
|
|
|
Current portion of
decommissioning liabilities
|
$
|
12,758
|
|
|
$
|
38,700
|
|
Other current
liabilities
|
364,163
|
|
|
134,326
|
|
Long-term
debt
|
844,961
|
|
|
387,727
|
|
Long-term portion of
decommissioning liabilities
|
49,983
|
|
|
12,204
|
|
Other long-term
liabilities
|
28,647
|
|
|
36,078
|
|
Equity
|
766,195
|
|
|
597,498
|
|
Total liabilities and
equity
|
$
|
2,066,707
|
|
|
$
|
1,206,533
|
|
Note: Please see Schedule D for the individual debt obligations
of TETRA and CSI Compressco LP, and net debt.
Schedule D - Long-Term Debt and Net 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,
2014
|
|
December 31,
2013
|
|
(In
Thousands)
|
|
|
|
|
|
|
TETRA
|
|
|
|
|
|
Bank revolving line
of credit facility
|
$
|
90,000
|
|
|
$
|
52,768
|
|
TETRA Senior Notes at
various interest rates
|
305,000
|
|
|
305,000
|
|
Other debt
|
74
|
|
|
89
|
|
TETRA Total
debt
|
395,074
|
|
|
357,857
|
|
Less current
portion
|
(90,074)
|
|
|
(89)
|
|
TETRA
Total long-term debt
|
$
|
305,000
|
|
|
$
|
357,768
|
|
|
|
|
|
|
|
CSI Compressco
LP
|
|
|
|
|
|
CSI Compressco bank
credit facility
|
$
|
195,000
|
|
|
$
|
29,959
|
|
CSI Compressco 7.25%
Senior Notes
|
344,961
|
|
|
—
|
|
CSI
Compressco long-term debt
|
539,961
|
|
|
29,959
|
|
|
|
|
|
|
|
|
|
Consolidated total
long-term debt
|
$
|
844,961
|
|
|
$
|
387,727
|
|
Non-GAAP Financial Measures
This press release includes the following non-GAAP financial
measures for the Company: net debt, consolidated and segment income
before taxes, excluding the Maritech segment and unusual 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.
The following reconciliation of net debt is also 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. A reconciliation of long-term debt to net debt as of
December 31, 2014 and December 31, 2013 is provided below.
|
December 31,
2014
|
|
December 31,
2013
|
|
(In
Thousands)
|
Net Debt –
TETRA
|
|
|
|
|
|
Total debt, excluding
CSI Compressco LP debt
|
$
|
395,074
|
|
|
$
|
357,857
|
|
Less: cash, excluding
CSI Compressco LP cash
|
(14,318)
|
|
|
(29,277)
|
|
Net debt
|
$
|
380,756
|
|
|
$
|
328,580
|
|
In addition to financial results determined in accordance with
GAAP, this press release also includes consolidated and segment
income before taxes, excluding the Maritech segment and certain
unusual charges. In addition, this press release includes the
Adjusted EBITDA of the Company segments. Schedules E, F and G
include reconciliation of these non-GAAP measures to the comparable
GAAP measures.
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 unusual 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 EBITDA is defined as the Company's adjusted earnings
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.
Schedule E – Fourth Quarter Unusual Charges
Unusual
Charges
|
|
|
|
|
|
Stated in
thousands, except per share amounts
|
|
|
|
|
|
|
Three Months
Ended
|
|
Dec. 31,
2014
|
|
Income Before
Tax
|
Tax
|
Noncont.
Interest
|
Net Income
|
Diluted
EPS
|
Income attributable
to TETRA stockholders, excluding unusual charges &
Maritech
|
$14,204
|
$4,324
|
($2,832)
|
$7,048
|
$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
Writeoff
|
(64,295)
|
(15,682)
|
-
|
(48,613)
|
($0.62)
|
Federal and State
Deferred Tax Valuation Allowance and other related tax
adj
|
-
|
63,172
|
-
|
(63,172)
|
($0.80)
|
Maritech
loss
|
(30,948)
|
(10,832)
|
-
|
(20,116)
|
($0.25)
|
Net Income (loss)
attributable to TETRA stockholders, as reported
|
($119,867)
|
$27,601
|
($2,282)
|
($149,750)
|
($1.90)
|
|
|
|
|
|
|
|
Dec. 31,
2013
|
|
Income Before
Tax
|
Tax
|
Noncont.
Interest
|
Net Income
|
Diluted
EPS
|
Income attributable
to TETRA stockholders, excluding unusual charges &
Maritech
|
$12,463
|
$2,040
|
($1,208)
|
$9,215
|
$0.12
|
Asset Impairment,
including inventory adjustments
|
(9,584)
|
(3,382)
|
-
|
(6,202)
|
($0.08)
|
Maritech
loss
|
(20,286)
|
(7,100)
|
-
|
(13,186)
|
($0.17)
|
Other
|
(239)
|
(84)
|
-
|
(156)
|
($0.00)
|
Net Income (loss)
attributable to TETRA stockholders, as reported
|
($17,646)
|
($8,526)
|
($1,208)
|
($10,329)
|
($0.13)
|
Schedule F – Total Year Unusual Charges
Unusual
Charges
|
|
|
|
|
|
Stated in
thousands, except per share amounts
|
|
|
|
|
|
Twelve Months
Ended
|
|
Dec. 31,
2014
|
|
Income Before
Tax
|
Tax
|
Noncont.
Interest
|
Net Income
|
Diluted
EPS
|
Income attributable
to TETRA stockholders, excluding unusual charges &
Maritech
|
$34,969
|
$6,326
|
($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
Writeoff
|
(64,295)
|
(15,682)
|
-
|
(48,613)
|
($0.63)
|
Workforce
reduction
|
(784)
|
(290)
|
-
|
(494)
|
($0.01)
|
Federal and State
Deferred Tax Valuation Allowance and other related tax
adj
|
-
|
60,500
|
-
|
(60,500)
|
($0.76)
|
Maritech
loss
|
(71,154)
|
(21,346)
|
-
|
(49,808)
|
($0.63)
|
Other
|
(4,406)
|
(1,630)
|
-
|
(2,776)
|
($0.03)
|
Net Income (loss)
attributable to TETRA stockholders, as reported
|
($157,871)
|
$9,704
|
($2,103)
|
($169,678)
|
($2.16)
|
|
|
|
|
|
|
|
Dec. 31,
2013
|
|
Income Before
Tax
|
Tax
|
Noncont.
Interest
|
Net Income
|
Diluted
EPS
|
Income attributable
to TETRA stockholders, excluding unusual charges &
Maritech
|
$76,437
|
$23,343
|
($3,172)
|
$49,923
|
$0.63
|
Other Acquisition
Transaction Costs
|
(392)
|
(120)
|
-
|
(272)
|
($0.00)
|
Asset Impairment,
including inventory adjustments
|
(9,584)
|
(2,927)
|
-
|
(6,657)
|
($0.08)
|
Workforce
reduction
|
(1,984)
|
(606)
|
-
|
(1,378)
|
($0.02)
|
Other related tax
adj
|
-
|
(544)
|
-
|
544
|
$0.01
|
Maritech
loss
|
(64,365)
|
(22,528)
|
-
|
(41,837)
|
($0.53)
|
Other
|
(241)
|
(73)
|
-
|
(168)
|
($0.00)
|
Net Income (loss)
attributable to TETRA stockholders, as reported
|
($128)
|
($3,454)
|
($3,172)
|
$153
|
$0.00
|
Schedule G – Reconciliation to GAAP Financials
Reconciliation to
GAAP Financials
|
|
|
|
|
|
|
|
|
Stated in
thousands
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Dec. 31,
2014
|
|
Net Income
(loss), As
Reported
|
Non
Controlling
Interest
|
Tax
Provision
|
Income (loss)
Before Tax,
As Reported
|
Impairments
& Unusual
Charges
|
Adjusted
Income
Before Tax
|
Interest
Expense, net
|
Depreciation
&
Amortization(1)
|
Stock Option
Expense
|
Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
Fluids
Division
|
$11,791
|
$0
|
$837
|
$12,628
|
$6,481
|
$19,109
|
($14)
|
$8,428
|
$0
|
$27,523
|
Production Testing
Division
|
(64,834)
|
-
|
(1,713)
|
(66,547)
|
75,337
|
8,790
|
(2)
|
6,711
|
-
|
15,500
|
Compression
Division
|
1,946
|
(2,282)
|
(989)
|
3,239
|
2,913
|
6,152
|
7,662
|
20,055
|
625
|
34,494
|
Offshore Services
Segment
|
(20,715)
|
-
|
1
|
(20,714)
|
17,654
|
(3,059)
|
-
|
3,151
|
-
|
92
|
Eliminations &
Other
|
3
|
-
|
-
|
3
|
-
|
3
|
-
|
(3)
|
-
|
0
|
Subtotal
|
(71,808)
|
(2,282)
|
(1,864)
|
(71,390)
|
102,385
|
30,995
|
7,647
|
38,343
|
625
|
77,609
|
Corporate &
Other
|
(57,826)
|
-
|
40,297
|
(17,529)
|
737
|
(16,792)
|
5,158
|
288
|
1,341
|
(10,005)
|
Maritech
|
(20,116)
|
-
|
(10,832)
|
(30,948)
|
30,948
|
-
|
-
|
-
|
-
|
-
|
Total
TETRA
|
(149,750)
|
(2,282)
|
27,601
|
(119,867)
|
134,070
|
14,204
|
12,805
|
38,631
|
1,966
|
67,605
|
|
|
|
|
|
|
|
|
|
|
|
|
Dec. 31,
2013
|
|
Net Income
(loss), As
Reported
|
Non Controlling
Interest
|
Tax
Provision
|
Income (loss)
Before Tax,
As Reported
|
Impairments
& Unusual
Charges
|
Adjusted
Income
Before Tax
|
Interest
Expense, net
|
Depreciation
&
Amortization(1)
|
Stock Option
Expense
|
Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
Fluids
Division
|
$13,557
|
$0
|
$178
|
$13,734
|
$0
|
$13,734
|
($26)
|
$5,906
|
$0
|
$19,614
|
Production Testing
Division
|
2,063
|
-
|
(1,392)
|
671
|
-
|
671
|
9
|
6,821
|
-
|
7,501
|
Compression
Division
|
5,379
|
(1,208)
|
(221)
|
6,366
|
323
|
6,689
|
166
|
3,664
|
430
|
10,949
|
Offshore Services
Segment
|
(2,200)
|
-
|
6
|
(2,194)
|
9,291
|
7,097
|
27
|
3,486
|
-
|
10,610
|
Eliminations &
Other
|
(105)
|
-
|
-
|
(105)
|
-
|
(105)
|
-
|
(1)
|
-
|
(106)
|
Subtotal
|
18,694
|
(1,208)
|
(1,430)
|
18,472
|
9,614
|
28,086
|
176
|
19,876
|
430
|
48,567
|
Corporate &
Other
|
(15,837)
|
-
|
3
|
(15,833)
|
210
|
(15,623)
|
4,361
|
611
|
1,183
|
(9,468)
|
Maritech
|
(13,186)
|
-
|
(7,100)
|
(20,286)
|
20,286
|
-
|
-
|
-
|
-
|
-
|
Total
TETRA
|
(10,329)
|
(1,208)
|
(8,526)
|
(17,646)
|
30,110
|
12,463
|
4,537
|
20,487
|
1,612
|
39,099
|
(1)
Depreciation & Amortization excludes asset impairments which
are included in "Impairments & Unusual Charges".
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation to
GAAP Financials
|
|
|
|
|
|
|
|
|
Stated in
thousands
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months
Ended
|
|
Dec. 31,
2014
|
|
Net Income
(loss), As
Reported
|
Non
Controlling
Interest
|
Tax
Provision
|
Income (loss)
Before Tax,
As Reported
|
Impairments
& Unusual
Charges
|
Adjusted
Income
Before Tax
|
Interest
Expense, net
|
Depreciation
&
Amortization(1)
|
Stock Option
Expense
|
Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
Fluids
Division
|
$59,744
|
$0
|
$4,961
|
$64,705
|
$4,229
|
$68,934
|
($250)
|
$31,924
|
$0
|
$100,608
|
Production Testing
Division
|
(66,859)
|
-
|
691
|
(66,168)
|
77,095
|
10,927
|
(31)
|
28,842
|
-
|
39,737
|
Compression
Division
|
6,411
|
(2,103)
|
(1,172)
|
7,342
|
17,022
|
24,363
|
12,964
|
41,097
|
1,544
|
79,968
|
Offshore Services
Segment
|
(26,706)
|
-
|
455
|
(26,251)
|
19,784
|
(6,467)
|
36
|
13,176
|
-
|
6,746
|
Eliminations &
Other
|
12
|
-
|
-
|
12
|
-
|
12
|
-
|
(12)
|
-
|
0
|
Subtotal
|
(27,398)
|
(2,103)
|
4,935
|
(20,360)
|
118,129
|
97,769
|
12,719
|
115,027
|
1,544
|
227,059
|
Corporate &
Other
|
(96,030)
|
-
|
29,674
|
(66,356)
|
3,554
|
(62,803)
|
19,268
|
1,885
|
5,231
|
(36,419)
|
Maritech
|
(46,250)
|
-
|
(24,904)
|
(71,154)
|
71,154
|
-
|
-
|
-
|
-
|
-
|
Total
TETRA
|
(169,678)
|
(2,103)
|
9,704
|
(157,871)
|
192,837
|
34,967
|
31,987
|
116,912
|
6,774
|
190,640
|
|
|
|
|
|
|
|
|
|
|
|
|
Dec. 31,
2013
|
|
Net Income
(loss), As
Reported
|
Non
Controlling
Interest
|
Tax
Provision
|
Income (loss)
Before Tax,
As Reported
|
Impairments
& Unusual
Charges
|
Adjusted
Income
Before Tax
|
Interest
Expense, net
|
Depreciation
&
Amortization(1)
|
Stock Option
Expense
|
Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
Fluids
Division
|
$66,976
|
$0
|
$2,461
|
$69,438
|
$424
|
$69,861
|
($148)
|
$22,508
|
$0
|
$92,221
|
Production Testing
Division
|
14,250
|
-
|
(156)
|
14,093
|
676
|
14,769
|
(34)
|
27,262
|
-
|
41,997
|
Compression
Division
|
14,770
|
(3,172)
|
2,258
|
20,199
|
925
|
21,124
|
469
|
14,511
|
1,459
|
37,563
|
Offshore Services
Segment
|
22,864
|
-
|
6
|
22,870
|
9,629
|
32,499
|
109
|
14,254
|
-
|
46,862
|
Eliminations &
Other
|
(105)
|
-
|
-
|
(105)
|
-
|
(105)
|
-
|
(1)
|
-
|
(106)
|
Subtotal
|
118,755
|
(3,172)
|
4,568
|
126,495
|
11,654
|
138,149
|
395
|
78,534
|
1,459
|
218,537
|
Corporate &
Other
|
(76,766)
|
-
|
14,505
|
(62,258)
|
547
|
(61,712)
|
16,715
|
2,451
|
5,265
|
(37,280)
|
Maritech
|
(41,837)
|
-
|
(22,528)
|
(64,365)
|
64,365
|
-
|
-
|
-
|
-
|
-
|
Total
TETRA
|
153
|
(3,172)
|
(3,454)
|
(128)
|
76,565
|
76,437
|
17,110
|
80,985
|
6,724
|
181,257
|
(1)
Depreciation & Amortization excludes asset impairments which
are included in "Impairments & Unusual Charges".
|
|
|
|
|
Schedule H – Free Cash Flow Reconciliation to GAAP
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 business to further invest and
grow;
- to measure the performance of the Company as compared to its
peer group of companies; and
- to determine the ability to pay dividends to shareholders.
Free Cash Flow
Reconciliation to GAAP Items
|
|
|
|
|
|
Stated in
thousands
|
|
|
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
Dec. 31,
2014
|
Dec. 31,
2013
|
|
Dec. 31,
2014
|
Dec. 31,
2013
|
TTI
Consolidated
|
|
|
|
|
|
Cash from
Operations
|
$58,867
|
$5,749
|
|
$110,804
|
$49,656
|
ARO
Settlements
|
23,010
|
14,743
|
|
63,319
|
114,109
|
Capital
Expenditures
|
(37,011)
|
(28,267)
|
|
(116,461)
|
(100,025)
|
Free Cash Flow
before ARO Settlements
|
44,866
|
(7,775)
|
|
57,662
|
63,740
|
|
|
|
|
|
|
CSI Compressco
LP
|
|
|
|
|
|
Cash from
Operations
|
15,636
|
6,163
|
|
46,977
|
29,135
|
Capital
Expenditures
|
(22,051)
|
(4,599)
|
|
(51,694)
|
(24,574)
|
Free Cash
Flow
|
(6,415)
|
1,564
|
|
(4,717)
|
4,561
|
|
|
|
|
|
|
TTI Only
|
|
|
|
|
|
Cash from
Operations
|
43,231
|
(414)
|
|
63,827
|
20,521
|
ARO
Settlements
|
23,010
|
14,743
|
|
63,319
|
114,109
|
Capital
Expenditures
|
(14,960)
|
(23,668)
|
|
(64,767)
|
(75,451)
|
Free Cash Flow
before ARO Settlements
|
51,281
|
(9,339)
|
|
62,379
|
59,179
|
|
|
|
|
|
|
Distributions from
CSI Compressco LP
|
5,887
|
5,582
|
|
23,526
|
22,123
|
Free Cash Flow
before ARO Settlements and after
|
|
|
|
|
|
Distributions
from CSI Compressco LP
|
57,168
|
(3,757)
|
|
85,905
|
81,302
|
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.
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 CSI acquisition,
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, 2013, 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.
Logo -
http://photos.prnewswire.com/prnh/20100917/TTLOGO
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/tetra-technologies-inc-announces-fourth-quarter-and-full-year-2014-results-300042703.html
SOURCE TETRA Technologies, Inc.