TETRA TECHNOLOGIES, INC. ANNOUNCES FIRST QUARTER 2025 RESULTS AND UPDATES FIRST-HALF 2025 GUIDANCE

2025-04-29

NYSE - New York Stock Exchange · Bromine · Lithium · Zinc · Salt · Sodium · United States

PR Newswire

First Quarter 2025 Financial Highlights

Revenue of $157 million increased 17% sequentially Net income before taxes and discontinued operations of $5.1 million decreased $2.3 million sequentially from $7.4 million as the prior quarter included $5 million of unrealized mark-to-market gains Adjusted EBITDA of $32.3 million increased $9.4 million sequentially from $22.8 million GAAP earnings per share were $0.03 . Adjusted earnings per share were $0.11 Net cash provided by operating activities was $3.9 million , while free cash flow from the base business was $15.4 million , including $19 million of cash proceeds from the sale of shares in Kodiak Gas Services, LLC. Capital expenditures were $18 million , including $11.2 million related to the Arkansas bromine facility

THE WOODLANDS, Texas , April 29, 2025 /PRNewswire/ -- TETRA Technologies, Inc. ("TETRA" or the "Company") (NYSE:TTI) announced first quarter 2025 financial results.

Brady Murphy , TETRA President and Chief Executive Officer, stated, "We are very pleased with our record first-quarter Adjusted EBITDA of $32.3 million , which increased 41% sequentially and also compared to last year, led by strong performance from Completion Fluids and Products. Total revenue of $157 million increased 17% sequentially and 4% from last year. During the quarter, we successfully completed the first of the three scheduled TETRA CS Neptune wells and made significant progress on the second well which was subsequently completed in April.

As a result of the stronger deepwater activity and a start of the seasonally strong calcium chloride business in Northern Europe , Completion Fluids & Products adjusted EBITDA margins increased to 35.7% from 27.3% in the fourth quarter. Revenues for Water & Flowback Services declined 2% sequentially, outperforming US frac activity that declined approximately 10%. Adjusted EBITDA margins on Water & Flowback of 13.0% were down slightly from 13.6% in the fourth quarter but improved 340 basis points year on year despite much lower frac activity levels as cost control actions and continued focused on automation and technology allowed us to maintain mid-teen margins in a weaker environment.

With respect to the Company's outlook, Brady Murphy , further stated, "In the second quarter, we expect to see the full benefit of our European industrial chemicals seasonal peak, the first well from our recently awarded multi-well, multi-year deepwater Brazil project and the completion of the three well TETRA CS Neptune project. With regards to tariffs, we source a high percentage of our products and materials from the U.S. Therefore, we do not anticipate much, if any, impact to our financials from the announced tariffs. However, the recent pull-back in oil prices does create more uncertainty for our U.S. Water & Flowback segment for the second half of the year."

"Given our first quarter performance and strong second quarter outlook, we have increased the lower end of our previously communicated first half 2025 Adjusted EBITDA guidance, and we are now expecting first half 2025 Adjusted EBITDA to be between $57 million and $65 million (previously $55 million to $65 million ). We are also revising our revenue guidance to be between $315 million and $345 million (previously $325 million to $355 million ) and net income before taxes and discontinued operations to be between $10.5 million and $23.2 million . We expect adjusted net income before taxes and discontinued operations to be between $24 million and $35 million . Attainment of the Adjusted EBITDA guidance for the first half of the year would be near or above a ten-year record for TETRA, which would be achieved despite the uncertain environment the industry is experiencing and does not assume a material deterioration in the overall business environment from the current levels.

In the first quarter, we generated $3.9 million of cash from operating activities and $4.2 million of free cash flow, after investing $11.2 million for our Arkansas bromine project. The first quarter included $19 million of cash proceeds from the sale of our shares in Kodiak. The first quarter historically consumes cash as a result of changes in working capital. We have a strong free cash flow generating base business that should enable us to navigate through the near-term macro uncertainty and position the Company to capitalize on its emerging growth opportunities for the coming years."

First Quarter Highlights

| | Three Months Ended | | | | | | | March 31, 2025 | | December 31, 2024 | | March 31, 2024 | | | (in thousands, except per share amounts) | | | | | | Revenue | $ 157,140 | | $ 134,504 | | $ 150,972 | | Net income | $ 4,049 | | $ 102,723 | | $ 915 | | Adjusted EBITDA | $ 32,267 | | $ 22,825 | | $ 22,840 | | Net income per share from continuing operations | $ 0.03 | | $ 0.78 | | $ 0.01 | | Net income per share attributable to TETRA stockholders | $ 0.03 | | $ 0.78 | | $ 0.01 | | Adjusted net income per share | $ 0.11 | | $ 0.03 | | $ 0.05 | | Net cash provided by (used in) operating activities | $ 3,935 | | $ 5,635 | | $ (13,816) | | Total adjusted free cash flow (1) | $ 4,241 | | $ (9,324) | | $ (29,617) |

| | | | (1) | For the three months ended March 31, 2025, December 31, 2024 and March 31, 2024, total adjusted free cash flow includes $11.2 million, $0.2 million and $4.1 million, respectively, of investments in the Arkansas bromine and lithium projects. Base business adjusted free cash flow is defined as total adjusted free cash flow prior to TETRA's investments in the Arkansas bromine and lithium projects. See Schedule G. |

Completion Fluids & Products

Revenue of $93 million Net income before taxes of $30.7 million Adjusted EBITDA of $33.2 million with Adjusted EBITDA margins of 35.7%

Completion Fluids & Products revenue increased 35% sequentially and 20% year over year. Net income before taxes increased 77% sequentially and 55% from last year. Adjusted EBITDA increased 77% sequentially and 53% from last year. Completion Fluids & Products experienced impressive revenue and earnings growth and margin improvements driven by a combination of stronger volumes for our deepwater completion fluids, and our proprietary TETRA CS Neptune fluid used to complete a high pressure, high temperature (HPHT) project in the U.S. Gulf of America.

The outlook for the Completion Fluids & Products business continues to be robust as we expect to complete two TETRA CS Neptune wells during the second quarter and benefit from the seasonality of the industrial chemicals business in Europe . Additionally, we expect to see an increase of battery electrolyte sales to Eos Energy Enterprises, Inc. ("Eos") as they ramp up production of their batteries from the first automated production line. As such, we expect first half 2025 results for the Completion Fluids and Products segment to exceed first half of 2024 and be at or near record highs for TETRA.

Water & Flowback Services

Revenue of $64 million Net loss before taxes of $8.9 million Adjusted EBITDA of $8.3 million with Adjusted EBITDA margins of 13.0%

"Water and Flowback Services revenue was down 2% sequentially and down 13% year over year as the fourth quarter 2024 slowdown in U.S. onshore completion activity carried over to the first quarter. Adjusted EBITDA margins were down only slightly from the fourth quarter as our focus on leveraging technology and automation plus cost reductions offset the weaker volumes. Entering the second quarter, our patented automated TETRA SandStorm and Auto-Drillout units are nearly 100% utilized which we expect to continue to enhance margins throughout the year.

Although the recent pull back in oil prices has created a higher degree of uncertainty regarding the outlook for U.S. frac activity, we believe our focus on cost reductions, automation and technology, plus the continued emphasis on treatment and recycling of produced water, and our favorable mix of super majors and large independent oil & gas operators will result in less volatility than what we experienced in prior cycles. We have proactively taken actions to reduce costs, right size our support structure, and close underperforming service lines within Water and Flowback Services. We are also minimizing capital expenditures during this period of uncertainty."

Emerging Growth Initiatives

Desalination

"With the announcement of our commercial launch of TETRA Oasis TDS and our collaboration with EOG Resources, Inc, we are very encouraged by our prospects for desalination of produced water for beneficial reuse. During the quarter, we announced a commercial pilot with EOG for a grasslands study from Delaware Basin produced water. We continue to see growing momentum across the customer base and regulatory support for this much needed industry solution. Rystad Energy estimates that in the Permian Basin alone, over 6.3 billion barrels of produced water are discharged into saltwater disposal wells per year that could be recycled and re-used for agricultural or industrial purposes, including semi-conductor chip manufacturing and data-center cooling. Such re-use will enable oil & gas operators to mitigate the risk associated with reducing disposal well pore space and the transport of produced water."

Energy Storage Electrolyte

"As the contracted strategic supplier of electrolyte products for Eos' Z3™ utility scale battery energy storage system ("BESS"), we are well positioned to benefit as Eos scales its manufacturing capabilities and delivers on its backlog. We believe that the high-purity characteristics of our patented TETRA PureFlow ultra-pure zinc bromide electrolyte, flame retardant characteristics and, mostly U.S., but 100% North America content makes it ideal for large scale utility use. We are encouraged by the progress of Eos implementing their automated production lines that is expected to result in a significant step change in electrolyte volume requirements from TETRA."

Arkansas Evergreen Brine Production Unit

"On April 24, 2025 , we announced that the Arkansas Oil and Gas Commission ("AOGC") approved our Evergreen Unit expansion, which will allow us to further optimize long-term brine flow for bromine, plus the potential for future lithium and other critical minerals extraction. We completed the drilling and sampling operations for our final test well on the Evergreen Unit that indicated good reservoir results. The test well results also identified encouraging levels of magnesium and manganese, both of which are currently listed as U.S. critical minerals that are largely supplied from countries outside the U.S."

"We are continuing to advance the bromine project with critical milestone investments funded from our base business free cash flow, including $11.2 million of capital expenditures in the first quarter. We are planning to commence drilling of the Evergreen Unit's first of five planned production wells in the coming months while finalizing the plant engineering and plant site preparation for erecting the bromine tower later this year."

"We are also encouraged that on April 22, 2025 , the AOGC approved Standard Lithium's SWA Lithium application to establish a unit for acreage under an option agreement between Standard Lithium, SWA Lithium and TETRA. Under the option agreement, TETRA is entitled to a 2.5% royalty on gross revenues from the lithium that Standard Lithium produces from the TETRA option acreage. In addition, TETRA maintains the rights to the bromine and other mineral interests that will meet the planned phase two bromine plant production capacity."

Balance Sheet, Cash Flow, and RONCE

Cash from operating activities generated during the first quarter of 2025 was $3.9 million . Total adjusted free cash flow was $4.2 million , and base business adjusted free cash flow was $15.4 million . Total capital expenditures were $18 million , including $11.2 million associated with the expansion of our Arkansas bromine facility.

Liquidity at the end of the first quarter was $208 million, inclusive of an unused $75 million delayed draw feature under our Term Credit Agreement. Liquidity as of April 28, 2025 , had further improved to $220 million . Liquidity is defined as unrestricted cash plus availability under the ABL Credit Agreement, the Swedish Credit Facility and the delayed draw from our Term Credit Agreement.

As of March 31, 2025 , the company had cash and cash equivalents of $41 million , long-term debt of $180 million consisting of borrowings outstanding under our term loan, net debt of $139 million and a net leverage ratio (Net Debt/TTM Adjusted EBITDA) of 1.5X. TETRA has no near-term maturities. The unused ABL Credit Agreement has a maturity of 2029 and the Term Credit Agreement has a maturity of 2030.

Return on net capital employed ("RONCE") was 16.4% at the end of the first quarter of 2025.

Non-recurring Charges and Expenses (see Schedules E and F)

Non-recurring credits, net of charges and expenses were $10.3 million , which are reflected on Schedules E and F and include the following:

$9.5 million of non-cash cumulative accounting foreign exchange losses from the closure of our Canadian operations legal entity $1.9 million of unusual legal and advisor fees plus severance and restructuring charges as we downsized our Water Management & Flowback operations $1.2 million tax credit from our Argentina operations (Schedule E only)

Management believes that the exclusion of the special charges and credits from the historical results of operations enables management to evaluate more effectively the Company's operations over the prior periods and to identify operating trends that could be obscured by the excluded items.

Conference Call

TETRA will host a conference call to discuss these results tomorrow, April 30, 2025 , at 10:30 a.m. Eastern Time . The phone number for the call is 1-800-836-8184. The conference call will also be available by live audio webcast . A replay of the conference call will be available at 1-888-660-6345 conference number 17932#, for one week following the conference call and the archived webcast will be available through the Company's website for thirty days following the conference call.

Investor Contact

For further information, please contact Elijio Serrano , CFO, TETRA Technologies, Inc. at (281) 367-1983 or via email at eserrano@onetetra.com or Kurt Hallead , Treasurer and Vice President of Investor Relations at (281) 367-1983 or via email at khallead@onetetra.com .

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

Company Overview

TETRA Technologies, Inc. is an energy services and solutions company focused on developing environmentally conscious services and solutions that help make people's lives better. With operations on six continents, the Company's portfolio consists of Energy Services, Industrial Chemicals, and Critical Minerals. In addition to providing products and services to the oil and gas industry and calcium chloride for diverse applications, TETRA is expanding into the low-carbon energy market with chemistry expertise, key mineral acreage, and global infrastructure, helping to meet the demand for sustainable energy in the twenty-first century. Visit the Company's website at www.onetetra.com for more information or connect with us on LinkedIn.

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

Schedule A: Consolidated Income Statement

Schedule B: Condensed Consolidated Balance Sheet

Schedule C: Consolidated Statements of Cash Flows

Schedule D: Statement Regarding Use of Non-GAAP Financial Measures

Schedule E: Non-GAAP Reconciliation of Adjusted Net Income

Schedule F: Non-GAAP Reconciliation of Adjusted EBITDA

Schedule G: Non-GAAP Reconciliation to Adjusted Free Cash Flow

Schedule H: Non-GAAP Reconciliation of Net Debt

Schedule I: Non-GAAP Reconciliation to Net Leverage Ratio

Schedule J: Non-GAAP Reconciliation to Return on Net Capital Employed

Schedule K: Non-GAAP Reconciliation of Adjusted EBITDA for Projected First Half 2025 and Actual First Half 2024

| Schedule A: Consolidated Income Statement (Unaudited) | | | | | | | | | | | | | | | Three Months Ended | | | | | | | March 31, 2025 | | December 31, 2024 | | March 31, 2024 | | | (in thousands, except per share amounts) | | | | | | Revenues | $ 157,140 | | $ 134,504 | | $ 150,972 | | | | | | | | | Cost of sales, services and rentals | 104,565 | | 94,015 | | 111,114 | | Depreciation, amortization and accretion | 9,151 | | 9,354 | | 8,756 | | Impairments and other charges | 518 | | — | | — | | Total cost of revenues | 114,234 | | 103,369 | | 119,870 | | Gross profit | 42,906 | | 31,135 | | 31,102 | | General and administrative expense | 24,134 | | 23,128 | | 22,298 | | Interest expense, net | 4,724 | | 5,232 | | 5,952 | | Loss on debt extinguishment | — | | — | | 5,535 | | Other (income) expense, net | 8,962 | | (4,617) | | (3,978) | | Income before taxes and discontinued operations | 5,086 | | 7,392 | | 1,295 | | Provision (benefit) for income taxes | 1,037 | | (94,841) | | 380 | | Net income before discontinued operations | 4,049 | | 102,233 | | 915 | | Discontinued operations: | | | | | | | Income from discontinued operations, net of taxes | — | | 490 | | — | | Net income | 4,049 | | 102,723 | | 915 | | Loss attributable to noncontrolling interest | — | | 1 | | — | | Net income attributable to TETRA stockholders | $ 4,049 | | $ 102,724 | | $ 915 | | | | | | | | | Basic per share information: | | | | | | | Net income attributable to TETRA stockholders | $ 0.03 | | $ 0.78 | | $ 0.01 | | Weighted average shares outstanding | 132,350 | | 131,809 | | 130,453 | | | | | | | | | Diluted per share information: | | | | | | | Net income attributable to TETRA stockholders | $ 0.03 | | $ 0.77 | | $ 0.01 | | Weighted average shares outstanding | 133,757 | | 132,812 | | 132,123 |

| Schedule B: Condensed Consolidated Balance Sheet (Unaudited) | | | | | | | | | | | March 31, 2025 | | December 31, 2024 | | | (in thousands) | | | | | (unaudited) | | | | ASSETS | | | | | Current assets: | | | | | Cash and cash equivalents | $ 41,000 | | $ 36,987 | | Restricted cash | 50 | | 221 | | Trade accounts receivable | 120,902 | | 104,813 | | Inventories | 106,486 | | 101,697 | | Prepaid expenses and other current assets | 22,616 | | 25,910 | | Total current assets | 291,054 | | 269,628 | | Property, plant and equipment, net | 149,275 | | 142,160 | | Other intangible assets, net | 24,072 | | 24,923 | | Deferred tax assets, net | 97,181 | | 98,149 | | Operating lease right-of-use assets | 30,584 | | 29,797 | | Investments | 9,686 | | 28,159 | | Other assets | 12,233 | | 12,379 | | Total long-term assets | 323,031 | | 335,567 | | Total assets | $ 614,085 | | $ 605,195 | | | | | | | LIABILITIES AND EQUITY | | | | | Current liabilities: | | | | | Trade accounts payable | $ 41,042 | | $ 43,103 | | Compensation and employee benefits | 19,594 | | 23,022 | | Operating lease liabilities, current portion | 9,325 | | 8,861 | | Accrued taxes | 10,695 | | 12,493 | | Accrued liabilities and other | 27,886 | | 30,040 | | Current liabilities associated with discontinued operations | 5,830 | | 5,830 | | Total current liabilities | 114,372 | | 123,349 | | Long-term debt, net | 180,095 | | 179,696 | | Operating lease liabilities | 25,291 | | 25,041 | | Asset retirement obligations | 15,082 | | 14,786 | | Deferred income taxes | 3,849 | | 4,912 | | Other liabilities | 3,653 | | 4,104 | | Total long-term liabilities | 227,970 | | 228,539 | | Commitments and contingencies | | | | | TETRA stockholders' equity | 273,004 | | 254,568 | | Noncontrolling interests | (1,261) | | (1,261) | | Total equity | 271,743 | | 253,307 | | Total liabilities and equity | $ 614,085 | | $ 605,195 |