Service & Supply | Oilfield Services | Third Quarter (3Q) Update
TETRA Technologies Revenue Continues To Decline, Net Loss
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TETRA Technologies today announced third quarter 2020 results.
Third quarter 2020 revenue of $153 million decreased 21% from the second quarter of 2020 and compares to a 36% decline in US onshore rig activity. Net loss before discontinued operations for the third quarter of 2020 was $21 million, inclusive of $2.9 million of non-recurring charges and expenses. This compares to a net loss before discontinued operations of $37 million in the second quarter of 2020, inclusive of $20.9 million of non-recurring charges and expenses. Net loss per share attributable to TETRA stockholders in the third quarter of 2020 was $0.10. Excluding the non-recurring charges and expenses, the net loss per share attributable to TETRA stockholders was $0.09. Consolidated Adjusted EBITDA before discontinued operations was $30.3 million and compares to $35.3 million in the second quarter of 2020. Consolidated cash provided by operating activities in the third quarter of 2020 was $4.4 million, compared to $38.2 million in the second quarter of 2020. TETRA only cash from operating activities was $8.9 million, compared to $33.4 million in the second quarter of 2020, while TETRA only adjusted free cash flow from continuing operations was $7.7 million, compared to $31.2 million in the second quarter of 2020.
Financial Highlights
- Completion Fluids & Products income before taxes was $11.8 million, or 22.6% of revenue, while Adjusted EBITDA was $13.9 million, or 26.8% of revenue.
- Water & Flowback Services loss before taxes was $7.7 million, while Adjusted EBITDA was positive at $35,000 despite North America land completion activity hitting historical lows during the quarter.
- Compression loss before taxes was $11.3 million, or (14.3)% of revenue, while Adjusted EBITDA was $22.9 million, or 29.0% of revenue.
Operating Segments
Completion Fluids & Products Division
Completion Fluids & Products revenue was $52.0 million in the third quarter of 2020, a decrease of 27% from the second quarter of 2020, primarily driven by decreased activity in the Gulf of Mexico and reflects the seasonally high second quarter Northern European industrial sales. Completion Fluids & Products income before taxes was $11.8 million in the third quarter (22.6% of revenue), and adjusted income before taxes was $12.5 million (24.0% of revenue). Adjusted EBITDA of $13.9 million (26.8% of revenue - a 110 basis point sequential increase) decreased by $4.4 million sequentially.
Water & Flowback Services Division
Water & Flowback Services third quarter 2020 revenue of $21.5 million decreased 13% from the second quarter of 2020, driven by the reduction in U.S. land activity. Water & Flowback Services loss before tax was $7.7 million, primarily due to extremely low activity across all US land basins, where frac spread counts bottomed out at approximately 70, down from the peak of approximately 298 in the first quarter. The frac crew count is currently estimated to be 120. Adjusted EBITDA decreased $0.4 million sequentially to slightly above breakeven. With the continued success of implementing our technology and automation to meet our customer's needs, we continue to gain market share and expand our customer base.
Compression Division
Third quarter Compression revenue decreased 18% from the second quarter of 2020 driven by lower equipment sales. Compression Services gross margins decreased 200 basis points from the second quarter of 2020. Overall fleet utilization was 80.3%, down from 82.1% at the end of the second quarter. As of September 30, 2020, total active operating horsepower decreased 25,758 sequentially from 967,505 in the second quarter to 941,747. Net loss before taxes was $11.3 million, an improvement of $11.7 million sequentially. Third quarter 2020 Adjusted EBITDA of $22.9 million decreased 13% from the second quarter of 2020.
A summary of key financial metrics for the third quarter are as follows:
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Third Quarter 2020 Results |
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Three Months Ended |
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Sep 30, 2020 |
Jun 30, 2020 |
Sep 30, 2019 |
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(In Thousands, Except per Share Amounts) |
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Revenue |
$ |
152,601 |
$ |
192,441 |
$ |
245,947 |
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|
Loss before discontinued operations |
(21,425) |
(37,130) |
(9,079) |
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Adjusted EBITDA before discontinued operations |
30,302 |
35,259 |
46,157 |
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GAAP EPS before discontinued operations attributable to TETRA stockholders |
(0.10) |
(0.17) |
(0.06) |
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Adjusted EPS attributable to TETRA stockholders |
(0.09) |
(0.09) |
(0.02) |
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GAAP net cash provided (used) by operating activities |
4,440 |
38,211 |
46,605 |
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TETRA only adjusted free cash flow from continuing operations |
$ |
7,672 |
$ |
31,187 |
$ |
9,749 |
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