TETRA Technologies(TTI) - 2024 Q4 - Annual Report

Financial Performance - Consolidated revenues for 2024 decreased by $27.151 million, or 4.3%, to $599.111 million compared to $626.262 million in 2023[206] - Gross profit decreased by $13.792 million, or 9.0%, resulting in a gross profit margin of 23.3% for 2024, down from 24.5% in 2023[206] - Income before discontinued operations increased significantly by $88.141 million, or 345.9%, to $113.620 million in 2024 compared to $25.479 million in 2023[206] - Net income attributable to TETRA stockholders rose by $82.500 million, or 320.0%, reaching $108.284 million in 2024, up from $25.784 million in 2023[206] - Adjusted EBITDA for 2024 was $99.4 million, representing 16.6% of total revenue, compared to $106.8 million and 17.1% in 2023, indicating a slight decline in profitability[227] - Total revenue for 2024 was $599.1 million, a decrease from $626.3 million in 2023, reflecting a challenging market environment[227] Division Performance - The Completion Fluids & Products Division reported revenues of $311.301 million, a slight decrease of $1.729 million, or 0.6%, from $313.030 million in 2023[214] - The Water & Flowback Services Division experienced a revenue decline of $25.422 million, or 8.1%, with total revenues of $287.810 million in 2024 compared to $313.232 million in 2023[217] Expenses and Costs - General and administrative expenses decreased by $6.621 million, or 6.9%, to $89.969 million in 2024 from $96.590 million in 2023[206] - Corporate overhead loss before taxes decreased by $7.5 million, or 10.3%, from $72.3 million in 2023 to $64.9 million in 2024, primarily due to an $8.3 million increase in unrealized gains on investments[222] - Operating cash flows decreased by $33.7 million, from $70.2 million in 2023 to $36.5 million in 2024, primarily due to decreased activity levels and changes in product mix[230] - General and administrative expenses decreased by $4.0 million, or 8.2%, primarily due to a $4.5 million reduction in salary-related expenses[222] Tax and Valuation - The effective tax rate for 2024 was (295.3)%, a significant change from 19.6% in 2023, primarily due to the reversal of the valuation allowance related to deferred tax assets[213] Strategic Investments and Projects - The company is focusing on strategic investments in TETRA CS Neptune fluids and water desalination projects to enhance near-term results[203] - A definitive feasibility study for bromine production was published in August 2024, with ongoing negotiations for bridging supply agreements to support future operations[202] - The company is negotiating bridging supply agreements for bromine, which may allow for flexibility in plant start-up timing and defer investments in Arkansas[232] Capital Expenditures and Liquidity - Total cash capital expenditures in 2024 were $60.7 million, with $23.4 million allocated to the Water & Flowback Services Division and $37.0 million to the Completion Fluids & Products Division[231] - Liquidity at the end of Q4 2024 was $182.2 million, consisting of $37.0 million in unrestricted cash and $145.2 million in available credit[228] - The company entered into a $265.0 million Term Credit Agreement in January 2024 to refinance prior debt and support the Arkansas bromine processing project[236] - A $5.5 million loss on debt extinguishment was recorded in 2024 due to non-cash unamortized finance costs related to the repayment of the previous Term Credit Agreement[222] Debt and Credit Facilities - The amended ABL Credit Agreement provides a senior secured revolving credit facility of up to $100.0 million with a $25.0 million accordion, maturing on May 13, 2029[238] - As of December 31, 2024, the company had no balance outstanding under the ABL Credit Agreement and $65.7 million available, increasing to $79.8 million as of February 25, 2025[239] - The Swedish Credit Facility has an availability of approximately $4.5 million as of December 31, 2024, with an interest rate of 2.95% per annum, expiring on December 31, 2025[240] - The Finland Credit Agreement had $1.4 million of letters of credit outstanding as of December 31, 2024, and has been renewed through January 31, 2026[241] - The New Term Credit Agreement consists of a $190.0 million funded term loan and a $75.0 million delayed-draw term loan, with a weighted average interest rate of 10.23%[256][257] Asset Management - The company sold its Kodiak shares for proceeds of $19.0 million in January 2025, net of transaction and broker fees[243] - As of December 31, 2024, the market value of equity holdings in Kodiak and Standard Lithium were $18.4 million and $1.2 million, respectively[243] - The company may consider divesting non-core assets and engaging in strategic transactions to enhance its business[244] Compliance and Risk - The company is in compliance with all covenants of its debt agreements as of December 31, 2024[242] - The company has currency exchange rate risk exposure related to revenues and expenses in foreign currencies, with no foreign currency exchange contracts outstanding as of December 31, 2024[258]