Summary of TETRA Technologies (TTI) Conference Call Company Overview - TETRA Technologies has been operating for over 40 years, providing diverse revenue streams from energy services and industrial chemicals across the United States and 23 other countries [3][4] - The company is recognized as an industry innovation leader, particularly in completion fluids, oil and gas water treatment, and water management services [4] Financial Performance - TETRA reported a strong first quarter with adjusted EBITDA margins of 36% for completion fluids and 13% for water and flowback services [5] - The industrial chemicals segment achieved its highest first-quarter revenue and adjusted EBITDA in history [5] - Trailing twelve months revenue reached $327 million, reflecting a nearly 50% growth since the second year of COVID in 2021 [7] - The company has a solid balance sheet with a leverage ratio of 1.5 times and no debt maturities until 2029 and 2030 [29] Market Position and Growth Strategies - TETRA is positioned in key markets, including deepwater and unconventional markets in North America, Latin America, and the Middle East [4] - The company is focusing on three emerging growth strategies: 1. **Electrolytes for Energy Storage**: TETRA has developed a zinc bromide-based electrolyte for long-duration energy storage, partnering with Eos Technologies [13][14] 2. **Produced Water Desalination**: The company is introducing a desalination solution for produced water, targeting markets such as agriculture and industry [18][20] 3. **Critical Minerals Production**: TETRA has secured over 40,000 acres of brine leases in Arkansas, rich in lithium, bromine, magnesium, and manganese [22][24] Industry Trends and Challenges - The deepwater market is projected to grow at a 7% CAGR through 2028, with TETRA maintaining a strong market share [9] - The company is addressing challenges in the Permian Basin, where produced water disposal capacity is becoming limited, necessitating innovative solutions [19][20] - TETRA's technology investments are expected to enhance margins and operational efficiency, particularly in the water and flowback segment [11][12] Key Collaborations and Innovations - TETRA has collaborated with EOG Resources for produced water beneficial reuse and desalination pilot projects, achieving a 92% desalination rate in initial tests [21][20] - The company is leveraging automation technologies to reduce manpower requirements in operations, enhancing efficiency [12] Conclusion - TETRA Technologies is well-positioned for growth with a solid financial foundation, innovative technologies, and strategic partnerships, despite facing industry challenges [30]

Financial Data and Key Metrics Changes - The company reported a record first quarter adjusted EBITDA of $32.3 million, with adjusted EBITDA margins of 20.5% [5] - Total revenue reached $157 million, reflecting a 17% sequential increase and a 4% year-over-year increase [5] - Adjusted EBITDA increased by 41% sequentially and year-over-year [5] Business Line Data and Key Metrics Changes - The Completion Fluids and Products segment generated $93 million in revenue, a 35% sequential increase, with adjusted EBITDA of $33.2 million, up 77% sequentially [20] - The Water and Flowback Services segment saw revenue decline by 2% sequentially to $64 million, but it was up 13% year-over-year, with adjusted EBITDA of $8.3 million [20][21] Market Data and Key Metrics Changes - Offshore deepwater operations increased by 60% year-over-year, with 24 deepwater projects completed in the quarter compared to 15 in the same period last year [6] - The company noted a decline in U.S. Frac activity by approximately 10%, but the Water and Flowback Services segment outperformed this decline [8] Company Strategy and Development Direction - The company is focusing on emerging growth initiatives, including desalination of produced water and energy storage solutions [12][14] - The Arkansas Evergreen Brine Production Unit expansion was approved, allowing for optimization of bromine and lithium extraction [15][16] - The company plans to self-fund its bromine project without issuing equity or increasing debt [17][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong second quarter outlook despite macroeconomic uncertainties [28] - The company anticipates adjusted EBITDA guidance for the first half of 2025 to be between $57 million and $65 million, up from the previous range [11] - Management highlighted the importance of monitoring customer plans and activity levels in response to the uncertain oil price environment [11] Other Important Information - The company generated strong free cash flow in the first quarter, with a year-over-year improvement of $41 million [12] - Liquidity at the end of the quarter was approximately $219 million, with a net leverage ratio improvement to 1.5 times [24] Q&A Session Summary Question: What are the biggest holdups for prospective customers on Oasis commercial pilots? - Management indicated that customers need to be comfortable with the technology and evolving environmental regulations, with expectations for multiple pilot projects in 2026 [33][34] Question: Can you provide specifics on regulatory support for beneficial reuse? - Management noted engagement with the Texas Railroad Commission and legislative support for surface discharge and beneficial reuse of produced water [35][36] Question: Will the first production well for Evergreen be left uncompleted until the processing facility is ready? - Management confirmed that the first well will be drilled and put on standby until the processing facility is operational [39] Question: What is the outlook for the deepwater market compared to previous quarters? - Management stated that there have been no changes to scheduled deepwater projects for the year, despite some uncertainty in the market [99][100]

TETRA (TTI) Q4 2024 Earnings Call February 26, 2025 10:30 AM ET Company Participants Julian Higuera - Director of FP&A and Investor RelationsBrady Murphy - CEOElijio V. Serrano - Senior VP & CFOKurt Hallead - Head of Global EnergyBobby Brooks - Vice PresidentStephen Gengaro - Managing Director Conference Call Participants Tim Moore - Managing Director, Senior Research Analyst Operator Good morning and welcome to TETRA Technologies Fourth Quarter twenty twenty four Results Conference Call. All participants a ...