TETRA Technologies(TTI) - 2023 Q3 - Quarterly Report

PART I—FINANCIAL INFORMATION This section presents TETRA Technologies, Inc.'s unaudited financial statements and management's analysis of operations Item 1. Financial Statements This section presents TETRA Technologies, Inc.'s unaudited consolidated financial statements and detailed notes Consolidated Statements of Operations This statement details the company's revenues, gross profit, and net income attributable to stockholders Net Income Attributable to TETRA Stockholders | Period | 2023 (in thousands) | 2022 (in thousands) | Change (YoY) | | :----------------------- | :------------------ | :------------------ | :----------- | | Three Months Ended Sep 30 | $5,420 | $278 | +1842.4% | | Nine Months Ended Sep 30 | $29,675 | $9,743 | +204.6% | Total Revenues | Period | 2023 (in thousands) | 2022 (in thousands) | Change (YoY) | | :----------------------- | :------------------ | :------------------ | :----------- | | Three Months Ended Sep 30 | $151,464 | $135,012 | +12.2% | | Nine Months Ended Sep 30 | $473,136 | $405,765 | +16.6% | Gross Profit | Period | 2023 (in thousands) | 2022 (in thousands) | Change (YoY) | | :----------------------- | :------------------ | :------------------ | :----------- | | Three Months Ended Sep 30 | $37,924 | $29,473 | +28.7% | | Nine Months Ended Sep 30 | $123,402 | $90,000 | +37.1% | Basic Net Income Per Common Share (Continuing Operations) | Period | 2023 | 2022 | Change (YoY) | | :----------------------- | :--- | :--- | :----------- | | Three Months Ended Sep 30 | $0.04 | $0.00 | N/A | | Nine Months Ended Sep 30 | $0.23 | $0.08 | +187.5% | Consolidated Statements of Comprehensive Income This statement presents the company's net income and other comprehensive income components Comprehensive Income (Loss) Attributable to TETRA Stockholders | Period | 2023 (in thousands) | 2022 (in thousands) | Change (YoY) | | :----------------------- | :------------------ | :------------------ | :----------- | | Three Months Ended Sep 30 | $2,816 | $(3,901) | N/A (from loss to gain) | | Nine Months Ended Sep 30 | $29,865 | $2,342 | +1175.2% | Net Income | Period | 2023 (in thousands) | 2022 (in thousands) | Change (YoY) | | :----------------------- | :------------------ | :------------------ | :----------- | | Three Months Ended Sep 30 | $5,420 | $256 | +2017.2% | | Nine Months Ended Sep 30 | $29,650 | $9,700 | +205.7% | Consolidated Balance Sheets This statement provides a snapshot of the company's assets, liabilities, and equity at specific points in time Total Assets | Date | Amount (in thousands) | Change (vs Dec 31, 2022) | | :---------------- | :-------------------- | :----------------------- | | Sep 30, 2023 | $472,419 | +$38,053 | | Dec 31, 2022 | $434,366 | | Total Equity | Date | Amount (in thousands) | Change (vs Dec 31, 2022) | | :---------------- | :-------------------- | :----------------------- | | Sep 30, 2023 | $141,137 | +$34,740 | | Dec 31, 2022 | $106,397 | | Cash and Cash Equivalents | Date | Amount (in thousands) | Change (vs Dec 31, 2022) | | :---------------- | :-------------------- | :----------------------- | | Sep 30, 2023 | $33,826 | +$20,234 | | Dec 31, 2022 | $13,592 | | Consolidated Statements of Equity This statement tracks changes in the company's equity, including retained deficit and equity-based compensation Total TETRA Stockholders' Equity | Date | Amount (in thousands) | Change (vs Dec 31, 2022) | | :---------------- | :-------------------- | :----------------------- | | Sep 30, 2023 | $142,393 | +$34,768 | | Dec 31, 2022 | $107,625 | | Retained Deficit | Date | Amount (in thousands) | Change (vs Dec 31, 2022) | | :---------------- | :-------------------- | :----------------------- | | Sep 30, 2023 | $(272,818) | +$29,675 (reduction in deficit) | | Dec 31, 2022 | $(302,493) | | - Equity-based compensation for the nine months ended September 30, 2023, totaled $6.4 million[17] Consolidated Statements of Cash Flows This statement reports the cash generated and used by operating, investing, and financing activities Net Cash Provided by Operating Activities | Period | 2023 (in thousands) | 2022 (in thousands) | Change (YoY) | | :----------------------- | :------------------ | :------------------ | :----------- | | Nine Months Ended Sep 30 | $51,331 | $25,948 | +97.8% | Net Cash Used in Investing Activities | Period | 2023 (in thousands) | 2022 (in thousands) | Change (YoY) | | :----------------------- | :------------------ | :------------------ | :----------- | | Nine Months Ended Sep 30 | $(28,918) | $(28,280) | +2.3% | Net Cash Used in Financing Activities | Period | 2023 (in thousands) | 2022 (in thousands) | Change (YoY) | | :----------------------- | :------------------ | :------------------ | :----------- | | Nine Months Ended Sep 30 | $(1,894) | $(2,771) | -31.7% | Cash and Cash Equivalents at End of Period | Date | Amount (in thousands) | Change (YoY) | | :---------------- | :-------------------- | :----------- | | Sep 30, 2023 | $33,826 | +34.0% | | Sep 30, 2022 | $25,247 | | Notes to Consolidated Financial Statements These notes provide detailed explanations and additional information supporting the consolidated financial statements NOTE 1 – ORGANIZATION, BASIS OF PRESENTATION, AND SIGNIFICANT ACCOUNTING POLICIES This note outlines TETRA's business segments, Tax Benefits Preservation Plan, and lithium and bromine resource development - TETRA operates in two segments: Completion Fluids & Products Division and Water & Flowback Services Division[23] - A Tax Benefits Preservation Plan was adopted on February 28, 2023, to protect the company's net operating loss carryforwards (NOLs) and other tax attributes from potential ownership changes under Section 382 of the Internal Revenue Code[27] - The company holds rights to bromine and lithium in the Smackover Formation in Southwest Arkansas. Standard Lithium Ltd. exercised its option to acquire lithium rights in these leases on October 6, 2023[33] - In June 2023, TETRA entered into an MOU with Saltwerx LLC for a newly-proposed brine unit in Arkansas for potential bromine and lithium production, which was unanimously approved by the Arkansas Oil & Gas Commission on September 26, 2023[34] Exploration and Pre-development Costs for Lithium and Bromine Properties | Period | Amount (in thousands) | | :----------------------- | :-------------------- | | Three Months Ended Sep 30, 2023 | $3,800 | | Nine Months Ended Sep 30, 2023 | $6,800 | | Three Months Ended Sep 30, 2022 | $900 | | Nine Months Ended Sep 30, 2022 | $3,500 | - The adoption of ASU 2016-13 (Credit Losses) and amendments to credit agreements (replacing LIBOR/Eurodollar with SOFR) did not have a material impact on the consolidated financial statements[41][42] NOTE 2 – DISCONTINUED OPERATIONS This note details the classification and financial impact of the company's discontinued Compression and Offshore