Tetra Technologies Inc (TTI) Reports Mixed Fourth Quarter and Robust Annual Financial Results ...
Revenue: Q4 revenue increased by 4% year-over-year to $153.1 million.
Net Loss: Q4 net loss before discontinued operations was $4.2 million, with a net loss per share of $0.03.
Adjusted Net Income: Adjusted net income from continuing operations for Q4 was $3.8 million, a 51% improvement year-over-year.
Adjusted EBITDA: Q4 Adjusted EBITDA rose by 19% year-over-year to $24.1 million.
Cash Flow: Net cash provided by operating activities for the year was $70 million, a $51 million year-over-year improvement.
Leverage and Liquidity: Net leverage ratio was 1.13X with liquidity at $126 million as of December 2023.
Strategic Milestones: Achieved significant strategic milestones including approval for future bromine and lithium production.
Tetra Technologies Inc (NYSE:TTI), a diversified oil and gas services company, announced its financial results for the fourth quarter and the full year of 2023 on February 27, 2024. The company, which specializes in completion fluids, water management, and various other services, released its 8-K filing detailing a year of significant financial achievements despite a mixed fourth quarter.
Annual Performance Highlights
The company's annual income from continuing operations saw a remarkable 235% increase compared to the previous year, reaching $25.5 million. This growth was supported by a 37% increase in Adjusted EBITDA, which totaled $106.8 million for the year. The return on net capital employed improved significantly by 710 basis points to 20.5%. The company also reported a substantial improvement in cash flow from operations, which was up by 2.7 times, and a nearly 40% conversion rate of Adjusted EBITDA to adjusted free cash flow.
Fourth Quarter Financials
For the fourth quarter, TTI reported a revenue of $153.1 million, a 4% increase year-over-year, and a 1% increase from the previous quarter. The net loss before discontinued operations stood at $4.2 million, with a net loss per share of $0.03. However, when adjusted for non-recurring charges and expenses, the adjusted net income from continuing operations was $3.8 million, translating to adjusted net income per share of $0.03.
The company's Adjusted EBITDA for the quarter was $24.1 million, marking a 19% increase from the same period last year. The net cash provided by operating activities was $19 million, while the adjusted free cash flow was $20 million, demonstrating the company's ability to generate cash effectively.
Challenges and Strategic Milestones
Despite the positive annual results, TTI faced challenges in the fourth quarter, including a slowdown in the Water & Flowback Services business and customer destocking activities in the industrial chemicals business. However, the company achieved several strategic milestones, such as the approval of the Evergreen Brine Unit for future bromine and lithium production and the completion of a lithium and bromine resource report, indicating significant potential for these resources in the U.S.
Financial Position and Outlook
As of December 2023, TTI's net leverage ratio was 1.13X, with liquidity at $126 million. The company's strategic initiatives and strong base business position it for further growth in 2024, with expectations to continue generating robust free cash flow to fund investments in Arkansas projects.
Overall, Tetra Technologies Inc's financial results reflect a company that has effectively navigated market challenges while laying the groundwork for future growth through strategic investments and operational improvements. The company's focus on financial discipline and strategic milestones bodes well for its long-term prospects and ability to deliver shareholder value.
For further details, investors and interested parties are encouraged to review the full 8-K filing.
Explore the complete 8-K earnings release (here) from Tetra Technologies Inc for further details.
This article first appeared on GuruFocus.
