TETRA Technologies, Inc. (NYSE:TTI) Q4 2020 Earnings Conference Call February 25, 2021 10:30 AM ET Company Participants Elijio Serrano - Chief Financial Officer Brady M. Murphy - Chief Executive Officer Conference Call Participants Stephen Gengaro - Stifel Samantha Hoh - Evercore ISI Operator Good morning, and welcome to TETRA Technologies Fourth Quarter and Full Year 2020 Results Conference Call. The speakers for today's call are, Mr. Brady M. Murphy, Chief Executive Officer; and Mr. Elijio Serrano, Chief ...

TETRA Technologies, Inc. (NYSE:TTI) Q3 2020 Earnings Conference Call November 3, 2020 9:30 AM ET Company Participants Elijio Serrano – Chief Financial Officer Brady Murphy – Chief Executive Officer Conference Call Participants Jim Roumell – Roumell Asset Management Stephen Gengaro – Stifel Joseph Von Meister – Intermarket Operator Good morning, and welcome to TETRA Technologies Third Quarter 2020 Results Conference Call. The speakers for today’s call are Brady Murphy, Chief Executive Officer; and Elijio Ser ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2020 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to . Commission File Number 1-13455 TETRA Technologies, Inc. (Exact name of registrant as specified in its charter) Delaware 74-2148293 (State or Other Jur ...

©2020 TETRA Technologies, Inc. 1 THE MICROCAP RODEO The Best Ideas Bowl October 14, 2020 Forward Looking Statements & Non-GAAP Measures Forward-Looking Statements This presentation includes certain statements that are or may be deemed to be forward-looking statements. Generally, the use of words such as "may," "will," "see", "expect," "intend," "estimate," "projects," "anticipate," "believe," "assume," "could," "should," "plans," "targets" or similar expressions that convey the uncertainty of future events, ...

PART I—FINANCIAL INFORMATION [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) TETRA Technologies reported a significant Q2 2020 revenue decline and net loss, with total assets decreasing to **$1.19 billion** and positive operating cash flow for the first six months Financial Metrics ($ in thousands) | Financial Metric | Three Months Ended June 30, 2020 | Three Months Ended June 30, 2019 | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :--- | :--- | :--- | :--- | :--- | | **Total Revenues** | $192,441 | $288,796 | $415,383 | $532,524 | | **Gross Profit** | $20,321 | $48,366 | $59,738 | $84,576 | | **Loss Before Taxes** | $(35,129) | $(5,711) | $(44,206) | $(22,776) | | **Net Loss Attributable to TETRA Stockholders** | $(21,255) | $(6,913) | $(22,806) | $(17,751) | | **Net Loss Per Share (Basic & Diluted)** | $(0.17) | $(0.06) | $(0.18) | $(0.14) | Balance Sheet Items ($ in thousands) | Balance Sheet Item | June 30, 2020 (Unaudited) | December 31, 2019 | | :--- | :--- | :--- | | **Total Current Assets** | $308,987 | $351,354 | | **Total Assets** | $1,188,594 | $1,271,922 | | **Total Current Liabilities** | $147,327 | $188,723 | | **Long-term Debt, net** | $843,292 | $842,871 | | **Total Equity** | $112,686 | $162,826 | | **Total Liabilities and Equity** | $1,188,594 | $1,271,922 | Cash Flow Activities ($ in thousands) | Cash Flow Activity (Six Months Ended June 30) | 2020 | 2019 | | :--- | :--- | :--- | | **Net Cash Provided by Operating Activities** | $60,387 | $38,377 | | **Net Cash Used in Investing Activities** | $(14,063) | $(71,254) | | **Net Cash Provided by (Used in) Financing Activities** | $(6,486) | $18,715 | | **Increase (Decrease) in Cash** | $39,012 | $(14,057) | [Notes to Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) This section details company structure, accounting policies, and financial items, including **$14.3 million** in asset impairments, separate debt structures for TETRA and CCLP, and ongoing litigation - The company operates through **three divisions**: Completion Fluids & Products, Water & Flowback Services, and Compression, with **separate capital structures** for TETRA and its subsidiary CSI Compressco LP (CCLP) without cross-default provisions[28](index=28&type=chunk)[30](index=30&type=chunk) - Significant impairments were recorded due to the COVID-19 pandemic and oil price decline, including **$5.4 million** in Q1 2020 for the Midland manufacturing facility and an additional **$9.0 million** in Q2 2020 for non-core compressor equipment and inventory[63](index=63&type=chunk)[64](index=64&type=chunk)[65](index=65&type=chunk) - The company is involved in litigation regarding decommissioning liabilities for the divested Maritech segment and a separate lawsuit for a **$7.5 million** promissory note default related to the Offshore Division sale[92](index=92&type=chunk)[94](index=94&type=chunk) - Subsequent to the quarter end, on July 2, 2020, the company completed the sale of its Midland manufacturing facility for **$17.0 million**[107](index=107&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=32&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the severe impact of COVID-19 and low commodity prices on operations, leading to a **33.4%** Q2 2020 consolidated revenue decline, cost reductions, and separate liquidity management for TETRA and CCLP - The business was **significantly impacted** by depressed commodity prices and the COVID-19 pandemic, leading to reduced demand, especially for the Water & Flowback Services and Compression divisions[113](index=113&type=chunk)[114](index=114&type=chunk) - The company shut down its Midland manufacturing facility, which was sold on July 2, 2020, for **$17.0 million**, and no longer intends to fabricate new compressor packages[116](index=116&type=chunk) - **Cost reduction measures** have been implemented, including reductions in capital expenditures, workforce and salary reductions, suspension of 401(k) matching, and reduced SG&A expenses[119](index=119&type=chunk) - CCLP completed a debt exchange offer, resulting in a permanent reduction of **$9.6 million** in long-term debt and an extension of maturity dates for certain remaining debt balances[118](index=118&type=chunk) [Results of Operations](index=35&type=section&id=Results%20of%20Operations) Q2 2020 consolidated revenue decreased **33.4%** to **$192.4 million**, with significant declines in Water & Flowback Services and Compression, while Completion Fluids & Products saw gross profit increase **5.1%** Consolidated Performance (Q2 2020 vs Q2 2019, $ in thousands) | Metric (Q2 2020 vs Q2 2019) | Amount | % Change | | :--- | :--- | :--- | | **Consolidated Revenues** | $(96,355) | (33.4)% | | **Consolidated Gross Profit** | $(28,045) | (58.0)% | | **Net Loss Attributable to TETRA** | $(14,342) | 207.5% | Division Performance (Q2 2020 vs Q2 2019) | Division Performance (Q2 2020 vs Q2 2019) | Revenue Change | Gross Profit Change | | :--- | :--- | :--- | | **Completion Fluids & Products** | (10.6)% | +5.1% | | **Water & Flowback Services** | (66.2)% | (164.6)% | | **Compression** | (29.1)% | (78.8)% | [Liquidity and Capital Resources](index=43&type=section&id=Liquidity%20and%20Capital%20Resources) TETRA and CCLP maintain separate capital structures; consolidated debt was **$843.3 million** as of June 30, 2020, with **$60.4 million** cash from operations and significantly reduced capital expenditures - The company and its subsidiary CCLP have **separate capital structures** with no cross-default provisions or cross-guarantees between their respective debt agreements[163](index=163&type=chunk)[164](index=164&type=chunk) Debt and Cash Balances (June 30, 2020, $ in millions) | Entity | Total Long-Term Debt (Net) | Cash Balance | | :--- | :--- | :--- | | **TETRA** | $205.7 | $50.0 | | **CCLP** | $637.6 | $6.8 | | **Consolidated** | $843.3 | $56.7 | - Capital expenditures for the first six months of 2020 were **$19.6 million**, with full-year 2020 planned capex reduced to **$10-$15 million** for TETRA (ex-Compression) and **$28-$35 million** for the Compression Division[168](index=168&type=chunk)[169](index=169&type=chunk)[170](index=170&type=chunk) - CCLP completed an exchange offer for its 7.25% Senior Notes due 2022, exchanging **$215.2 million** of old notes for new 7.50% First Lien Notes and 10.00%/10.75% Second Lien Notes, extending maturities to 2025 and 2026[178](index=178&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=49&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section is marked 'Not Applicable', indicating no new or material changes to the company's market risk disclosures from the last annual report - The company has indicated that there are **no new quantitative and qualitative disclosures** about market risk to report for this period[197](index=197&type=chunk) [Controls and Procedures](index=49&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of June 30, 2020, with no material changes to internal control over financial reporting - Based on an evaluation by management, the CEO and CFO concluded that the company's disclosure controls and procedures were **effective** as of June 30, 2020[198](index=198&type=chunk) - **No changes** in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, these controls[199](index=199&type=chunk) PART II—OTHER INFORMATION [Legal Proceedings](index=49&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various lawsuits and governmental proceedings, which management does not expect to have a material adverse impact on financial condition or results - The company is a defendant in **various lawsuits** and governmental proceedings arising from normal business operations[201](index=201&type=chunk) - Management does not expect these legal proceedings to have a **no material adverse impact** on the company's financial condition or results[201](index=201&type=chunk) [Risk Factors](index=49&type=section&id=Item%201A.%20Risk%20Factors) This section updates risk factors, highlighting significant negative impacts of the COVID-19 pandemic, including declining demand, operational disruptions, potential customer defaults, and future asset impairment charges - The primary updated risk factor relates to the **negative impacts of the COVID-19 pandemic** on the business, financial condition, and liquidity[202](index=202&type=chunk)[203](index=203&type=chunk) - Specific risks from the pandemic include **declining demand** for products as customers cut budgets, **operational challenges** with remote work, **supply chain disruptions**, and **increased cybersecurity threats**[206](index=206&type=chunk) - The company warns of potential financial impacts such as **late customer payments**, **contractual defaults** from bankruptcies, **higher future borrowing costs**, and the need for **significant asset impairment charges**[206](index=206&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=50&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered equity sales occurred; no shares were repurchased under the **$20 million** program, with **$14.3 million** remaining, though **11,590** shares were acquired for employee equity awards - **No shares were purchased** as part of the publicly announced stock repurchase program during the quarter[209](index=209&type=chunk) - As of June 30, 2020, approximately **$14.3 million** remained authorized for future repurchases under the existing plan[209](index=209&type=chunk) - The company acquired **11,590 shares** during the quarter, not as part of the buyback program, but in connection with the exercise or vesting of employee equity awards[209](index=209&type=chunk)[210](index=210&type=chunk)

TETRA Technologies, Inc. (NYSE:TTI) Q2 2020 Earnings Conference Call August 4, 2020 9:30 AM ET Company Participants Brady Murphy - Chief Executive Officer Elijio Serrano - Chief Financial Officer Jacek Mucha - Vice President of Finance, Treasurer Conference Call Participants Stephen Gengaro - Stifel Operator Good day and welcome to the TETRA Technologies Incorporated Second Quarter 2020 results conference call. [Operator Instructions] please note this event is being recorded. I would now like to turn the c ...

1 ©2020 TETRA Technologies, Inc. TETRA Technologies, Inc. Stifel 2020 Cross Sector Insight Conference June 8, 2020 Forward Looking Statements & Non-GAAP Measures Forward-Looking Statements This presentation includes certain statements that are or may be deemed to be forward-looking statements. Generally, the use of words such as "may," "will," "see", "expect," "intend," "estimate," "projects," "anticipate," "believe," "assume," "could," "should," "plans," "targets" or similar expressions that convey the unc ...

PART I—FINANCIAL INFORMATION [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The company reported decreased revenue but a significantly improved net loss in Q1 2020 compared to the prior year [Consolidated Statements of Operations](index=3&type=section&id=Consolidated%20Statements%20of%20Operations) Q1 2020 operations resulted in lower revenue but higher gross profit and a reduced net loss year-over-year Consolidated Statements of Operations (In Thousands) | Financial Metric | Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | | :--- | :--- | :--- | | **Total Revenues** | $222,942 | $243,728 | | **Gross Profit** | $39,417 | $36,210 | | **Loss before taxes** | $(9,077) | $(17,065) | | **Net Loss** | $(10,376) | $(19,100) | | **Net loss attributable to TETRA stockholders** | $(1,551) | $(10,838) | | **Net loss per common share (Basic & Diluted)** | $(0.01) | $(0.09) | [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) The balance sheet reflects stable total assets at approximately $1.27 billion alongside a slight increase in total liabilities Consolidated Balance Sheets (In Thousands) | Balance Sheet Item | March 31, 2020 (Unaudited) | December 31, 2019 | | :--- | :--- | :--- | | **Total Current Assets** | $363,980 | $351,354 | | **Net Property, Plant, and Equipment** | $740,247 | $758,637 | | **Total Assets** | $1,269,764 | $1,271,922 | | **Total Current Liabilities** | $195,196 | $188,723 | | **Long-term Debt, net** | $845,842 | $842,871 | | **Total Liabilities** | $1,122,833 | $1,109,096 | | **Total TETRA Stockholders' Equity** | $27,628 | $34,373 | | **Total Equity** | $146,931 | $162,826 | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow increased significantly, while cash used in investing and provided by financing activities decreased Consolidated Statements of Cash Flows (In Thousands) | Cash Flow Activity | Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $22,176 | $7,412 | | **Net cash used in investing activities** | $(10,615) | $(31,726) | | **Net cash provided by financing activities** | $1,138 | $21,312 | | **Increase (decrease) in cash and cash equivalents** | $11,759 | $(3,169) | [Notes to Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail divisional performance, a $5.4 million impairment charge, facility shutdowns, and subsidiary debt structures - The company operates through three divisions: Completion Fluids & Products, Water & Flowback Services, and Compression, and consolidates its subsidiary CSI Compressco LP (CCLP)[25](index=25&type=chunk)[27](index=27&type=chunk)[91](index=91&type=chunk) - The company recorded a **$5.4 million impairment charge** related to its Compression Division's Midland manufacturing facility due to the COVID-19 pandemic and declining oil prices[59](index=59&type=chunk) - Subsequent to quarter-end, the company announced plans to **shut down its Midland manufacturing facility and its El Dorado chemical production facility** to rationalize its manufacturing base[93](index=93&type=chunk)[96](index=96&type=chunk) - CCLP, a subsidiary, commenced an exchange offer for its **7.25% Senior Notes due 2022** in April 2020[97](index=97&type=chunk) Segment Performance (In Thousands) | Segment | Q1 2020 Revenue | Q1 2019 Revenue | Q1 2020 Income (Loss) Before Taxes | Q1 2019 Income (Loss) Before Taxes | | :--- | :--- | :--- | :--- | :--- | | Completion Fluids & Products | $75,237 | $61,581 | $19,396 | $6,186 | | Water & Flowback Services | $57,467 | $78,678 | $(2,244) | $2,231 | | Compression | $90,238 | $103,469 | $(12,790) | $(7,801) | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses market impacts from COVID-19, divisional performance variations, and implemented cost-cutting measures - The COVID-19 pandemic and oil price decline negatively impacted the Water & Flowback and Compression divisions, prompting **reductions in capital expenditures and workforce adjustments**[101](index=101&type=chunk)[102](index=102&type=chunk)[106](index=106&type=chunk) - The Completion Fluids & Products division experienced strong demand, with **revenue increasing 22.2% YoY to $75.2 million**, driven by a TETRA CS Neptune sale[100](index=100&type=chunk)[121](index=121&type=chunk) - The company maintains separate capital structures for TETRA and its subsidiary CCLP, with **$40.8 million and $20.4 million available under their respective credit facilities**[68](index=68&type=chunk)[135](index=135&type=chunk)[136](index=136&type=chunk) Key Financial Metrics | Metric | Q1 2020 | Q1 2019 | Change (%) | | :--- | :--- | :--- | :--- | | **Revenues** | $222.9M | $243.7M | (8.5)% | | **Gross Profit** | $39.4M | $36.2M | 8.9% | | **Gross Profit Margin** | 17.7% | 14.9% | +2.8 ppt | | **G&A Expense** | $30.5M | $34.3M | (10.9)% | [Quantitative and Qualitative Disclosures about Market Risk](index=41&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) No applicable quantitative and qualitative disclosures about market risk were reported for this period - The company states that there are no applicable quantitative and qualitative disclosures about market risk for this reporting period[171](index=171&type=chunk) [Controls and Procedures](index=41&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective with no material changes to internal controls - Based on an evaluation, the CEO and CFO concluded that the company's **disclosure controls and procedures were effective** as of March 31, 2020[172](index=172&type=chunk) - There were **no changes in internal control over financial reporting** during the quarter that materially affected, or are reasonably likely to materially affect, internal controls[173](index=173&type=chunk) PART II—OTHER INFORMATION [Legal Proceedings](index=41&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in ordinary course legal proceedings not expected to have a material adverse impact - The company is a defendant in several lawsuits and governmental proceedings from the ordinary course of business, but management **does not expect a material adverse impact**[175](index=175&type=chunk) [Risk Factors](index=42&type=section&id=Item%201A.%20Risk%20Factors) Key risks include the adverse impact of COVID-19 and potential delisting from the NYSE due to low stock price - The COVID-19 pandemic and oil oversupply have **materially reduced demand** for the company's products and services, negatively impacting financial condition[177](index=177&type=chunk)[178](index=178&type=chunk) - On March 26, 2020, the company was notified by the NYSE of **non-compliance with the minimum $1.00 average closing price requirement**, facing potential delisting[181](index=181&type=chunk)[182](index=182&type=chunk) - The company is also at risk of violating other NYSE listing criteria, such as the **minimum average market capitalization requirement of $15.0 million**[184](index=184&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=43&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No shares were repurchased under the formal program, though some were acquired via employee equity awards - **No shares were purchased** under the publicly announced repurchase program during the quarter; 73,436 shares were acquired in connection with employee equity awards[186](index=186&type=chunk)[187](index=187&type=chunk) - As of March 31, 2020, approximately **$14.3 million remains available** for future repurchases under the authorized stock buyback program[186](index=186&type=chunk) [Defaults Upon Senior Securities](index=43&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities were reported during the period - None[188](index=188&type=chunk) [Mine Safety Disclosures](index=43&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) No mine safety disclosures were reported for the period - None[189](index=189&type=chunk) [Other Information](index=43&type=section&id=Item%205.%20Other%20Information) No other information was reported for the period - None[190](index=190&type=chunk) [Exhibits](index=44&type=section&id=Item%206.%20Exhibits) This section lists filed exhibits, including required CEO/CFO certifications and interactive XBRL data files - The exhibits filed with the report include **certifications from the CEO and CFO** as required by the Sarbanes-Oxley Act of 2002[192](index=192&type=chunk) - **Interactive data files (XBRL)** containing the company's financial statements and notes are also included as exhibits[194](index=194&type=chunk)

TETRA Technologies, Inc. (NYSE:TTI) Q1 2020 Earnings Conference Call May 5, 2020 9:30 AM ET Company Representatives Brady Murphy - Chief Executive Officer Elijio Serrano - Chief Financial Officer Jacek Mucha - Vice President of Finance, Treasurer Conference Call Participants Stephen Gengaro - Stifel Praveen Narra - Raymond James Operator Good morning and welcome to the TETRA Technologies, First Quarter 2020 Results Conference Call. The speakers for today's call are Brady M. Murphy, Chief Executive Officer; ...

Part I [Business](index=5&type=section&id=Item%201.%20Business) TETRA Technologies, Inc. is a diversified oil and gas services company with three divisions, focusing on completion fluids, water management, and natural gas compression services [Company Overview](index=5&type=section&id=Item%201.%20Business%20-%20Overview) TETRA Technologies operates three primary divisions providing specialized products and services for well drilling, completion, water management, and natural gas compression - TETRA operates through three primary reporting segments: Completion Fluids & Products, Water & Flowback Services, and Compression[15](index=15&type=chunk) - The Completion Fluids & Products Division manufactures and markets clear brine fluids (CBFs) and calcium chloride products for both energy and non-energy markets globally[16](index=16&type=chunk) - The Water & Flowback Services Division offers comprehensive water management, frac flowback, and production well testing services to onshore and offshore operators[17](index=17&type=chunk) - The Compression Division provides natural gas compression services and equipment, primarily through its partially owned subsidiary, CSI Compressco LP (CCLP)[18](index=18&type=chunk)[35](index=35&type=chunk) [Products and Services](index=6&type=section&id=Item%201.%20Business%20-%20Products%20and%20Services) Divisions offer specialized products including environmentally friendly completion fluids, integrated water management solutions, and natural gas compression services with a large fleet - The Completion Fluids & Products Division's flagship technology is TETRA CS Neptune®, an environmentally friendly, high-density completion fluid[21](index=21&type=chunk) - The Water & Flowback Services Division provides a 'Last Mile' infrastructure solution for water management, utilizing automation to enhance safety and efficiency[27](index=27&type=chunk) Compression Services Fleet by Horsepower (as of Dec 31, 2019) | Range of Horsepower Per Package | Number of Packages | Aggregate Horsepower | % of Total Aggregate Horsepower | | :--- | :--- | :--- | :--- | | Low horsepower (0-100) | 3,265 | 153,062 | 13.0% | | Medium-horsepower (101-1,000) | 1,554 | 436,058 | 37.0% | | High-horsepower (1,001 and over) | 426 | 588,625 | 50.0% | | **Total** | **5,245** | **1,177,745** | **100.0%** | [Market Overview and Competition](index=9&type=section&id=Item%201.%20Business%20-%20Market%20and%20Competition) The company's market demand is highly sensitive to volatile oil and gas prices, facing intense competition across its completion fluids, water management, and compression services segments - Demand for the company's products and services is significantly dependent on oil and natural gas prices and production levels[43](index=43&type=chunk) - Key competitors in the non-energy calcium chloride markets include Occidental Chemical Corporation, Vitro, and NedMag[47](index=47&type=chunk) - Major competitors in the compression services business include Archrock, Kodiak Gas Services, and USA Compression[53](index=53&type=chunk) - No single customer accounted for **10% or more** of total consolidated revenues in 2019[54](index=54&type=chunk) [Other Business Matters](index=11&type=section&id=Item%201.%20Business%20-%20Other%20Business%20Matters) The company reported a **$35.5 million** compression equipment backlog, employed **2,600** people, holds numerous patents, and operates under extensive environmental regulations - The Compression Division's equipment sales backlog was **$35.5 million** as of December 31, 2019, all expected to be recognized in 2020[55](index=55&type=chunk) - As of December 31, 2019, the company had approximately **2,600 employees**[57](index=57&type=chunk) - The company owned or licensed **31 issued U.S. patents** and **32 foreign patents**, with additional applications pending, expiring at various times through 2035[58](index=58&type=chunk) - The company is subject to numerous environmental laws and regulations, including the Clean Water Act, Clean Air Act, and CERCLA, which can impose significant costs and liabilities[64](index=64&type=chunk) [Risk Factors](index=13&type=section&id=Item%201A.%20Risk%20Factors) Significant risks include volatile oil and gas markets, COVID-19 impacts, intense competition, potential asset impairments, financing challenges, and substantial decommissioning liabilities from a former subsidiary - Demand for products and services is highly sensitive to volatile oil and gas prices. A severe drop in oil prices began in February 2020, which could materially adversely affect the business[72](index=72&type=chunk)[74](index=74&type=chunk) - The COVID-19 pandemic poses a significant risk by reducing global economic activity, depressing oil demand, and potentially disrupting operations and workforce availability[76](index=76&type=chunk) - The company has continuing exposure to potentially significant abandonment and decommissioning obligations associated with oil and gas properties previously owned by its former subsidiary, Maritech[104](index=104&type=chunk) - As of December 31, 2019, the company's stockholders' equity was **$34.4 million**, and its market capitalization was **$46.5 million** as of March 12, 2020, putting it at risk of failing to meet NYSE continued listing standards which require market capitalization and stockholders' equity to be above **$50 million**[97](index=97&type=chunk) - During the two-year period ending December 31, 2019, the company recorded **$98.8 million** in impairments of long-lived assets, including a **$91.6 million** impairment of its El Dorado, Arkansas plant in Q4 2019[84](index=84&type=chunk) - In Q4 2019, the company recorded a full goodwill impairment of **$25.9 million** for its Water Management reporting unit[86](index=86&type=chunk) [Unresolved Staff Comments](index=26&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) There are no unresolved staff comments - None[140](index=140&type=chunk) [Properties](index=26&type=section&id=Item%202.%20Properties) Company properties include chemical plants, service centers, and fabrication facilities, with corporate headquarters leased in The Woodlands, Texas - The Completion Fluids & Products Division operates seven chemical production plants with a total capacity of over **1.5 million equivalent liquid tons per year**[142](index=142&type=chunk) - The Compression Division's main facilities include owned offices and fabrication facilities in Midland, Texas, on **38.5 acres** of land[147](index=147&type=chunk) - The company's corporate headquarters is a leased **153,000 square foot** office building in The Woodlands, Texas, with a lease expiring in 2027[148](index=148&type=chunk) [Legal Proceedings](index=27&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in ordinary course legal proceedings, which management does not expect to materially adversely affect its financial condition or operations - Management does not expect any ongoing legal proceedings to have a material adverse effect on the company's financial condition[149](index=149&type=chunk) [Mine Safety Disclosures](index=27&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) There are no mine safety disclosures - None[150](index=150&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities](index=27&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity,%20Related%20Stockholder%20Matters,%20and%20Issuer%20Purchases%20of%20Equity%20Securities) TETRA's common stock trades on the NYSE under 'TTI', with a **$14.3 million** remaining stock repurchase authorization, though no repurchases occurred from 2006-2019 - The company's common stock is traded on the NYSE under the symbol 'TTI'[152](index=152&type=chunk) - A stock repurchase program authorized in 2004 has approximately **$14.3 million** remaining, but no shares were repurchased between 2006 and 2019[153](index=153&type=chunk)[154](index=154&type=chunk) [Selected Financial Data](index=28&type=section&id=Item%206.%20Selected%20Financial%20Data) Selected financial data shows 2019 revenues of **$1.038 billion** and a net loss attributable to stockholders of **$147.4 million**, significantly impacted by impairments Selected Consolidated Financial Data (2015-2019) | Metric | 2019 (In Thousands) | 2018 (In Thousands) | 2017 (In Thousands) | 2016 (In Thousands) | 2015 (In Thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | | **Revenues** | $1,037,933 | $998,775 | $723,098 | $617,391 | $1,010,641 | | **Gross profit** | $91,799 | $162,298 | $108,390 | $60,839 | $181,157 | | **Goodwill impairment** | $25,784 | $— | $— | $106,205 | $177,006 | | **Net loss** | $(160,500) | $(84,240) | $(62,183) | $(239,393) | $(209,467) | | **Net loss attributable to TETRA stockholders** | $(147,413) | $(61,617) | $(39,048) | $(161,462) | $(126,183) | | **Total assets** | $1,271,922 | $1,385,527 | $1,308,614 | $1,315,540 | $1,636,202 | | **Long-term debt, net** | $842,871 | $815,560 | $629,855 | $623,730 | $853,228 | | **Total equity** | $162,826 | $312,749 | $352,561 | $400,466 | $514,180 | [Management's Discussion and Analysis of Financial Condition and Results of Operation](index=29&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operation) Consolidated revenues rose **3.9%** to **$1.04 billion** in 2019, but gross profit declined **43.4%** due to significant impairments, while operating cash flow improved to **$90.2 million** [Results of Operations](index=33&type=section&id=Item%207.%20MD%26A%20-%20Results%20of%20Operations) Consolidated revenues increased **3.9%** in 2019, but gross profit decreased **43.4%** due to impairments, despite revenue growth in Completion Fluids and Compression divisions Consolidated Results Comparison (2019 vs. 2018) | Metric | 2019 (In Thousands) | 2018 (In Thousands) | Change (In Thousands) | % Change | | :--- | :--- | :--- | :--- | :--- | | **Revenues** | $1,037,933 | $998,775 | $39,158 | 3.9% | | **Gross profit** | $91,799 | $162,298 | $(70,499) | (43.4)% | | **Goodwill impairment** | $25,784 | $— | $25,784 | 100.0% | | **Loss before taxes** | $(144,123) | $(36,426) | $(107,697) | 295.7% | | **Net loss attributable to TETRA** | $(147,413) | $(61,617) | $(85,796) | 139.2% | - The Completion Fluids & Products division's gross profit decrease was driven by a **$91.8 million** impairment of its El Dorado, Arkansas production plant[176](index=176&type=chunk)[186](index=186&type=chunk) - The Water & Flowback Services division recorded a full goodwill impairment of **$25.8 million** in Q4 2019 due to a declining energy industry outlook[163](index=163&type=chunk)[173](index=173&type=chunk) - The Compression Division's gross profit increased due to higher fleet utilization, which reached **90.1%** in 2019, and improved customer contract pricing[165](index=165&type=chunk)[194](index=194&type=chunk) [Liquidity and Capital Resources](index=38&type=section&id=Item%207.%20MD%26A%20-%20Liquidity%20and%20Capital%20Resources) Liquidity is managed through separate capital structures, with consolidated debt at **$842.9 million** and operating cash flow at **$90.2 million** in 2019, supporting significant capital expenditures - The company emphasizes that TETRA and its subsidiary CCLP have separate capital structures with no cross-default or cross-collateralization provisions[198](index=198&type=chunk) Condensed Consolidating Balance Sheet (Dec 31, 2019) | (In Thousands) | TETRA (In Thousands) | CCLP (In Thousands) | Consolidated (In Thousands) | | :--- | :--- | :--- | :--- | | **Total assets** | $390,242 | $822,246 | $1,271,922 | | **Long-term debt, net** | $204,633 | $638,238 | $842,871 | | **Total equity** | $34,373 | $48,991 | $162,826 | Consolidated Cash Flow Summary | (In Thousands) | 2019 (In Thousands) | 2018 (In Thousands) | | :--- | :--- | :--- | | **Operating activities** | $90,232 | $46,586 | | **Investing activities** | $(106,442) | $(188,646) | | **Financing activities** | $(5,925) | $154,994 | - As of December 31, 2019, TETRA had **$63.3 million** available under its ABL Credit Agreement, and CCLP had **$17.2 million** available under its credit agreement[201](index=201&type=chunk) [Commitments and Contingencies](index=44&type=section&id=Item%207.%20MD%26A%20-%20Commitments%20and%20Contingencies) The company has **$1.37 billion** in contractual obligations and significant contingent liabilities related to decommissioning from a former subsidiary and uncollectible receivables from a bankrupt buyer Consolidated Contractual Cash Obligations (as of Dec 31, 2019) | Obligation | Total (In Thousands) | | :--- | :--- | | Long-term debt - TETRA | $221,500 | | Long-term debt - CCLP | $649,430 | | Interest on debt - TETRA | $99,148 | | Interest on debt - CCLP | $197,628 | | Purchase obligations | $94,950 | | Operating leases | $93,821 | | **Total** | **$1,368,679** | - The company faces **significant contingent liabilities** for decommissioning obligations from its former Maritech subsidiary, which were assumed by Orinoco Natural Resources, LLC in a 2018 sale. TETRA is in a legal dispute with Orinoco over failure to provide required replacement performance bonds[244](index=244&type=chunk)[246](index=246&type=chunk) - Following the bankruptcy of Epic Companies, which acquired the Offshore Services business, TETRA recorded a full reserve of **$7.5 million** for a promissory note and **$1.5 million** for other receivables in Q3 2019[248](index=248&type=chunk)[249](index=249&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=46&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This item is not applicable - Not Applicable[254](index=254&type=chunk) [Financial Statements and Supplementary Data](index=46&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) Financial statements and supplementary data are provided in Item 15 of this report - The required financial statements and supplementary data are located in Item 15 of the Form 10-K[255](index=255&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=46&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) There are no changes in or disagreements with accountants on accounting and financial disclosure - None[256](index=256&type=chunk) [Controls and Procedures](index=47&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2019 - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of December 31, 2019[257](index=257&type=chunk) - Management concluded that the company's internal control over financial reporting was effective as of December 31, 2019, based on the COSO framework[261](index=261&type=chunk) - No material changes were made to the company's internal control over financial reporting during the fourth quarter of 2019[263](index=263&type=chunk) [Other Information](index=49&type=section&id=Item%209B.%20Other%20Information) There is no other information to report - None[274](index=274&type=chunk) Part III [Directors, Executive Officers, and Corporate Governance](index=49&type=section&id=Item%2010.%20Directors,%20Executive%20Officers,%20and%20Corporate%20Governance) Information regarding directors, executive officers, and corporate governance is incorporated by reference from the definitive proxy statement - Information is incorporated by reference from the registrant's proxy statement[276](index=276&type=chunk) [Executive Compensation](index=49&type=section&id=Item%2011.%20Executive%20Compensation) Executive compensation information is incorporated by reference from the definitive proxy statement - Information is incorporated by reference from the registrant's proxy statement[277](index=277&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=49&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Security ownership and related stockholder matters information is incorporated by reference from the definitive proxy statement - Information is incorporated by reference from the registrant's proxy statement[278](index=278&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=49&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions,%20and%20Director%20Independence) Information on certain relationships, related transactions, and director independence is incorporated by reference from the definitive proxy statement - Information is incorporated by reference from the registrant's proxy statement[279](index=279&type=chunk) [Principal Accounting Fees and Services](index=49&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Principal accounting fees and services information is incorporated by reference from the definitive proxy statement - Information is incorporated by reference from the registrant's proxy statement[280](index=280&type=chunk) Part IV [Exhibits, Financial Statement Schedules](index=50&type=section&id=Item%2015.%20Exhibits,%20Financial%20Statement%20Schedules) This section details the consolidated financial statements, independent auditor reports, and a comprehensive list of exhibits filed with the Form 10-K - This item contains the list of financial statements, financial statement schedules, and exhibits filed with the Form 10-K[283](index=283&type=chunk) [Form 10-K Summary](index=55&type=section&id=Item%2016.%20Form%2010-K%20Summary) There is no Form 10-K summary - None[289](index=289&type=chunk)