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TTI Tetra

Filed: 2 Aug 21, 5:09pm

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-Q
 (Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 
For the quarterly period ended June 30, 2021
or 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from            to           .
 
Commission File Number 1-13455
TETRA Technologies, Inc.
(Exact name of registrant as specified in its charter)
 
Delaware74-2148293
(State or Other Jurisdiction of Incorporation or Organization)(I.R.S. Employer Identification No.)
  
24955 Interstate 45 North 
The Woodlands,
Texas77380
(Address of Principal Executive Offices)(Zip Code)
(281) 367-1983
(Registrant’s Telephone Number, Including Area Code)

_______________________________________________________________________
Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report
 
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common StockTTINew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes   No
 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes   No
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes   No

 As of July 30, 2021, there were 126,604,901 shares outstanding of the Company’s Common Stock, $0.01 par value per share.







PART I
FINANCIAL INFORMATION
 
Item 1. Financial Statements.
 
TETRA Technologies, Inc. and Subsidiaries
Consolidated Statements of Operations
(In Thousands, Except Per Share Amounts)
(Unaudited)
Three Months Ended
June 30,
Six Months Ended
June 30,
2021202020212020
Revenues:  
Product sales$62,583$67,251$107,615 $137,466 
Services39,74328,81972,035 91,307 
Total revenues102,32696,070179,650 228,773 
Cost of revenues:  
Cost of product sales42,47745,03174,460 90,319 
Cost of services34,73125,57663,362 74,403 
Depreciation, amortization, and accretion8,2369,72617,187 19,277 
Impairments and other charges4490449 
Insurance recoveries0(74)(110)(74)
Total cost of revenues85,89380,259155,348 183,925 
Gross profit16,43315,81124,302 44,848 
General and administrative expense17,35123,86237,363 44,210 
Interest expense, net3,8864,6048,290 9,896 
Warrants fair value adjustment expense (income)2,698113,021 (327)
Other income, net(2,232)(541)(7,327)(520)
Loss before taxes and discontinued operations(5,270)(12,125)(17,045)(8,411)
Provision for income taxes1,3841,0541,552 1,776 
Loss before discontinued operations(6,654)(13,179)(18,597)(10,187)
Discontinued operations:
Income (loss) from discontinued operations, net of taxes(126)(23,788)120,864 (37,156)
Net income (loss)(6,780)(36,967)102,267 (47,343)
Less: (income) loss attributable to noncontrolling interest(1)
2715,712(306)24,537 
Net income (loss) attributable to TETRA stockholders$(6,753)$(21,255)$101,961 $(22,806)
Basic and diluted net income (loss) per common share: 
Loss from continuing operations$(0.05)$(0.11)$(0.15)$(0.08)
Income (loss) from discontinued operations0(0.06)0.96 (0.10)
Net income (loss) attributable to TETRA stockholders$(0.05)$(0.17)$0.81 $(0.18)
Average shares outstanding126,583125,886126,365 125,736 

(1)     (Income) loss attributable to noncontrolling interest includes 0 and $15,781 loss for the three-month periods ended June 30, 2021 and 2020, respectively, and $333 income and $24,615 loss for the six-month periods ended June 30, 2021 and 2020, respectively, related to discontinued operations.

See Notes to Consolidated Financial Statements
1

TETRA Technologies, Inc. and Subsidiaries
Consolidated Statements of Comprehensive Income (Loss)
(In Thousands)
(Unaudited)
 
Three Months Ended
June 30,
Six Months Ended
June 30,
2021202020212020
Net income (loss)$(6,780)$(36,967)$102,267 $(47,343)
Foreign currency translation adjustment from continuing operations, net of taxes of $0 in 2021 and 20202,157 1,095 (622)(5,372)
Comprehensive income (loss)(4,623)(35,872)101,645 (52,715)
Less: Comprehensive income (loss) attributable to noncontrolling interest27 15,597 (306)24,651 
Comprehensive income (loss) attributable to TETRA stockholders$(4,596)$(20,275)$101,339 $(28,064)
 

See Notes to Consolidated Financial Statements
2

TETRA Technologies, Inc. and Subsidiaries
Consolidated Balance Sheets
(In Thousands)
 
 June 30,
2021
December 31,
2020
 (Unaudited) 
ASSETS  
Current assets:  
Cash and cash equivalents$50,314$67,252
Restricted cash6565
Trade accounts receivable, net of allowances of $6,640 in 2021 and $6,824 in 202079,46764,078
Inventories70,07176,658
Assets of discontinued operations0710,006
Prepaid expenses and other current assets15,88113,487
Total current assets215,798931,546
Property, plant, and equipment:  
Land and building26,47726,506
Machinery and equipment361,254365,296
Automobiles and trucks16,82018,446
Chemical plants62,01562,714
Construction in progress4,0921,526
Total property, plant, and equipment470,658474,488
Less accumulated depreciation(379,235)(377,632)
Net property, plant, and equipment91,42396,856
Other assets:  
Patents, trademarks and other intangible assets, net of accumulated amortization of $68,520 in 2021 and $66,078 in 202039,23741,487
Deferred tax assets, net4452
Operating lease right-of-use assets39,51743,448
Investments16,2212,675
Other assets14,56916,775
Total other assets109,588104,437
Total assets$416,809$1,132,839
 

See Notes to Consolidated Financial Statements
3

TETRA Technologies, Inc. and Subsidiaries
Consolidated Balance Sheets
(In Thousands, Except Share Amounts)
 
 June 30,
2021
December 31,
2020
 (Unaudited) 
LIABILITIES AND EQUITY  
Current liabilities:  
Trade accounts payable$38,868$22,573
Unearned income3,0192,675
Accrued liabilities and other44,06938,791
Liabilities of discontinued operations1,601734,039
Current portion of long-term debt8,1570
Total current liabilities95,714798,078
Long-term debt, net163,603199,894
Deferred income taxes1,9391,942
Asset retirement obligations12,69912,484
Warrants liability3,219198
Operating lease liabilities33,78637,569
Other liabilities6,79211,612
Total long-term liabilities222,038263,699
Commitments and contingencies
Equity:  
TETRA stockholders’ equity:  
Common stock, par value 0.01 per share; 250,000,000 shares authorized at June 30, 2021 and December 31, 2020; 129,729,406 shares issued at June 30, 2021 and 128,930,047 shares issued at December 31, 20201,2971,289
Additional paid-in capital473,872472,134
Treasury stock, at cost; 3,133,674 shares held at June 30, 2021, and 2,953,976 shares held at December 31, 2020(19,939)(19,484)
Accumulated other comprehensive (loss)(43,368)(49,914)
Retained deficit(311,704)(413,665)
Total TETRA stockholders’ equity100,158(9,640)
Noncontrolling interests(1,101)80,702
Total equity99,05771,062
Total liabilities and equity$416,809$1,132,839
 

See Notes to Consolidated Financial Statements
4

TETRA Technologies, Inc. and Subsidiaries
Consolidated Statements of Equity
(In Thousands)
(Unaudited)
Common Stock
Par Value
Additional Paid-In
Capital
Treasury
Stock
Accumulated Other 
Comprehensive Income (Loss)
Retained
Deficit
Noncontrolling
Interest
Total
Equity
Currency
Translation
Balance at December 31, 2020$1,289 $472,134 $(19,484)$(49,914)$(413,665)$80,702 $71,062 
Net income for first quarter 2021— — — — 108,714 333 109,047 
Translation adjustment, net of taxes of $0— — — (2,779)— (2,779)
Comprehensive income106,268 
Deconsolidation of CSI Compressco— — — 7,168 — (82,775)(75,607)
Equity award activity— — — — 
Treasury stock activity, net— — (449)— — — (449)
Equity compensation expense— 962 — — — 580 1,542 
Other— (574)— — — 219 (355)
Balance at March 31, 2021$1,295 $472,522 $(19,933)$(45,525)$(304,951)$(941)$102,467 
Net loss for second quarter 2021— — — — (6,753)(27)(6,780)
Translation adjustment, net of taxes of $0— — — 2,157 — 2,157 
Comprehensive loss(4,623)
Dividend— — — — — (119)(119)
Equity award activity— — — — 
Treasury stock activity, net— — (6)— — — (6)
Equity compensation expense— 1,592 — — — 1,592 
Other— (242)— — — (14)(256)
Balance at June 30, 2021$1,297 $473,872 $(19,939)$(43,368)$(311,704)$(1,101)$99,057 

Common Stock
Par Value
Additional Paid-In
Capital
Treasury
Stock
Accumulated Other 
Comprehensive Loss
Retained
Deficit
Noncontrolling
Interest
Total
Equity
Currency
Translation
Balance at December 31, 2019$1,283 $466,959 $(19,164)$(52,183)$(362,522)$128,453 $162,826 
Net loss for first quarter 2020— — — — (1,551)(8,825)(10,376)
Translation adjustment, net of taxes of $0— — — (6,238)— (229)(6,467)
Comprehensive loss(16,843)
Distributions to public unitholders— — — — — (309)(309)
Equity award activity— — — — — 
Treasury stock activity, net— — (89)— — — (89)
Equity compensation expense— 1,145 — — — 228 1,373 
Other— (16)— — — (15)(31)
Balance at March 31, 2020$1,287 $468,088 $(19,253)$(58,421)$(364,073)$119,303 $146,931 
Net loss for second quarter 2020— — — — (21,255)(15,712)(36,967)
Translation adjustment, net of taxes of $0— — — 980 — 115 1,095 
Comprehensive loss(35,872)
Distributions to public unitholders— — — — — (311)(311)
Equity award activity— — — — — 
Treasury stock activity, net— — (181)— — — (181)
Equity compensation expense— 1,685 — — — 449 2,134 
Other— — — — (20)(16)
Balance at June 30, 2020$1,288 $469,777 $(19,434)$(57,441)$(385,328)$103,824 $112,686 

See Notes to Consolidated Financial Statements
5

TETRA Technologies, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(In Thousands, Unaudited)
 Six Months Ended
June 30,
 20212020
Operating activities:  
Net income (loss)$102,267 $(47,343)
Reconciliation of net income (loss) to net cash provided by operating activities:
Depreciation, amortization, and accretion17,215 59,302 
Gain on GP Sale(120,574)
Impairment and other charges449 14,348 
Gain on retained CSI Compressco units and Standard Lithium shares(5,613)(183)
Equity-based compensation expense2,554 2,896 
Amortization and expense of financing costs and deferred financing gains1,429 2,755 
Debt-related expenses4,754 
Warrants fair value adjustment3,021 (326)
Gain on sale of assets(275)(2,019)
Other non-cash charges(70)5,380
Changes in operating assets and liabilities:  
Accounts receivable(15,694)55,552 
Inventories5,456 10,733 
Prepaid expenses and other current assets(2,442)(3,038)
Trade accounts payable and accrued expenses21,295 (42,853)
Other(1,411)429 
Net cash provided by operating activities7,607 60,387 
Investing activities:  
Purchases of property, plant, and equipment, net(12,489)(19,608)
Proceeds from sale of CCLP, net of cash divested18 
Proceeds on sale of property, plant, and equipment754 5,311 
Insurance recoveries associated with damaged equipment110 591 
Other investing activities1,156 (357)
Net cash used in investing activities(10,451)(14,063)
Financing activities:  
Proceeds from long-term debt338,343 
Principal payments on long-term debt(29,320)(341,364)
CSI Compressco distributions(620)
Tax remittances on equity based compensation(341)
Debt issuance costs and other financing activities(455)(2,504)
Net cash used in financing activities(29,775)(6,486)
Effect of exchange rate changes on cash(896)(826)
(Decrease) increase in cash and cash equivalents(33,515)39,012 
Cash and cash equivalents and restricted cash at beginning of period83,894 17,768 
Cash and cash equivalents at beginning of period associated with discontinued operations16,577 2,370 
Cash and cash equivalents and restricted cash at beginning of period associated with continuing operations67,317 15,398 
Cash and cash equivalents and restricted cash at end of period50,379 56,780 
Cash and cash equivalents at end of period associated with discontinued operations6,757 
Cash and cash equivalents and restricted cash at end of period associated with continuing operations$50,379 $50,023 

See Notes to Consolidated Financial Statements
6

TETRA Technologies, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Unaudited)
NOTE 1 – ORGANIZATION, BASIS OF PRESENTATION, AND SIGNIFICANT ACCOUNTING POLICIES

Organization 

We are a geographically diversified oil and gas services company, focused on completion fluids and associated products and services, water management, frac flowback and production well testing. We were incorporated in Delaware in 1981. We are composed of 2 divisions – Completion Fluids & Products and Water & Flowback Services. Unless the context requires otherwise, when we refer to “we,” “us,” and “our,” we are describing TETRA Technologies, Inc. and its consolidated subsidiaries on a consolidated basis.

Presentation  

Our unaudited consolidated financial statements include the accounts of our wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The information furnished reflects all normal recurring adjustments, which are, in the opinion of management, necessary to provide a fair statement of the results for the interim periods. Operating results for the period ended June 30, 2021 are not necessarily indicative of results that may be expected for the twelve months ended December 31, 2021.
 
The accompanying unaudited consolidated financial statements have been prepared in accordance with Rule 10-01 of Regulation S-X for interim financial statements required to be filed with the U.S. Securities and Exchange Commission (“SEC”) and do not include all information and footnotes required by U.S. generally accepted accounting principles (“U.S. GAAP”) for complete financial statements. These financial statements should be read in conjunction with the financial statements for the year ended December 31, 2020 and notes thereto included in our Annual Report on Form 10-K, which we filed with the SEC on March 5, 2021.

Significant Accounting Policies

    Our significant accounting policies are described in the notes to our consolidated financial statements for the year ended December 31, 2020 included in our Annual Report on Form 10-K. There have been no significant changes in our accounting policies or the application thereof during the second quarter of 2021.

Use of Estimates
 
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclose contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues, expenses, and impairments during the reporting period. Actual results could differ from those estimates, and such differences could be material.

Reclassifications

    Certain previously reported financial information has been reclassified to conform to the current year's presentation. For a discussion of the reclassification of the financial presentation of our former Compression Division as discontinued operations, see Note 2 - “Discontinued Operations”. Other than the discontinued operations presentation, the impact of reclassifications was not significant to the prior year's overall presentation. Unless otherwise noted, amounts and disclosures throughout these Notes to Consolidated Financial Statements relate solely to continuing operations and exclude all discontinued operations.

Impairments and Other Charges

Impairments of long-lived assets, including identified intangible assets, are determined periodically when indicators of impairment are present. If such indicators are present, the determination of the amount of impairment is based on our judgment as to the future undiscounted operating cash flows to be generated from the relevant assets throughout their remaining estimated useful lives. If these undiscounted cash flows are less than the carrying amount of the related assets, an impairment is recognized for the excess of the carrying value over fair value. Fair
7

value of intangible assets is generally determined using the discounted present value of future cash flows using discount rates commensurate with the risks inherent with the specific assets. Assets held for disposal are recorded at the lower of carrying value or estimated fair value less estimated selling costs. During 2021, we recorded an impairment charge of $0.4 million related to idle equipment in our Canada office within our Water & Flowback Services Division. There were no impairments associated with continuing operations during the six months ended June 30, 2020.

Foreign Currency Translation
 
    We have designated the Euro, the British pound, the Norwegian krone, the Canadian dollar, the Brazilian real, and the Mexican peso as the functional currencies for our operations in Finland and Sweden, the United Kingdom, Norway, Canada, Brazil, and certain of our operations in Mexico, respectively. The United States dollar is the designated functional currency for all of our other non-U.S. operations. The cumulative translation effects of translating the applicable accounts from the functional currencies into the United States dollar at current exchange rates are included as a separate component of equity. Foreign currency exchange (gains) and losses are included in other (income) expense, net and totaled $(0.2) million and $(1.0) million during the three and six months ended June 30, 2021, respectively, and $0.8 million and $0.9 million for the three and six months ended June 30, 2020, respectively.

Fair Value Measurements
 
We utilize fair value measurements to account for certain items and account balances within our consolidated financial statements. Fair value measurements are utilized on a recurring basis in the determination of the carrying values of certain assets, including our interest in Standard Lithium Ltd. (“Standard Lithium”) and our retained interest in CSI Compressco and liabilities, including the liabilities for the warrants to purchase 11.2 million shares of our common stock (the “Warrants”). See Note 8 - “Fair Value Measurements” for further discussion. Fair value measurements are also utilized on a nonrecurring basis in certain circumstances, including the impairment of long-lived assets (a Level 3 fair value measurement).
8


Supplemental Cash Flow Information

Supplemental cash flow information from continuing and discontinued operations is as follows:
Six Months Ended
June 30,
20212020
(in thousands)
Supplemental cash flow information(1):
 
Interest paid$7,577 $35,127 
Income taxes paid853 2,195 
Decrease in accrued capital expenditures1,434 1,820 
(1) Prior-year information includes the activity for CSI Compressco for the full period. Current-year information includes activity for CSI Compressco for January only.

New Accounting Pronouncements
Standards adopted in 2021

In December 2019, the FASB issued Accounting Standards Update (“ASU”) 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” ASU 2019-12 simplifies the accounting for income taxes by eliminating certain exceptions related to intraperiod tax allocation, interim period income tax calculation methodology, and the recognition of deferred tax liabilities for outside basis differences. It also simplifies certain aspects of accounting for franchise taxes and clarifies the accounting for transactions that results in a step-up in the tax basis of goodwill. On January 1, 2021, we adopted ASU 2019-12. The adoption of this standard did not have a material impact on our consolidated financial statements.

Standards not yet adopted

    In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 amends the impairment model to utilize an expected loss methodology in place of the currently used incurred loss methodology, which will result in the more timely recognition of losses on financial instruments not accounted for at fair value through net income. The provisions require credit impairments to be measured over the contractual life of an asset and developed with consideration for past events, current conditions, and forecasts of future economic information. Credit impairment will be accounted for as an allowance for credit losses deducted from the amortized cost basis at each reporting date. We are continuing to work through our implementation plan which includes evaluating the impact on our allowance for doubtful accounts methodology, identifying new reporting requirements, and implementing changes to business processes, systems, and controls to support adoption of the standard. Upon adoption, the allowance for doubtful accounts is expected to increase with an offsetting adjustment to retained earnings. Updates at each reporting date after initial adoption will be recorded through selling, general, and administrative expense. ASU 2016-13 has an effective date of the first quarter of fiscal 2023. We continue to assess the potential effects of these changes to our consolidated financial statements.

    In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848)”, which provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by the discontinuation of the London Interbank Offered Rate (“LIBOR”) or by another reference rate expected to be discontinued. The amendments are effective for all entities as of March 12, 2020 through December 31, 2022. Entities may elect to apply the amendments for contract modifications as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or prospectively from a date within an interim period that includes or is subsequent to March 12, 2020. As of June 30, 2021, we have not modified our credit agreements to remove references to LIBOR. We are currently evaluating the impacts of the provisions of ASU 2020-04 on our consolidated financial statements.
9

NOTE 2 – DISCONTINUED OPERATIONS

    On January 29, 2021, we entered into the Purchase and Sale Agreement with Spartan Energy Partners, LP (“Spartan”) pursuant to which we sold the general partner of CSI Compressco, including the IDRs in CSI Compressco and approximately 23.1% of the outstanding limited partner interests in CSI Compressco, in exchange for the combination of $13.4 million in cash paid at closing, $0.5 million in cash payable on the six-month anniversary of the closing and $3.1 million in contingent consideration in the form of cash and/or CSI Compressco common units if CSI Compressco achieves certain financial targets on or before December 31, 2022. Throughout this Quarterly Report, we refer to the transaction with Spartan as the “GP Sale.” As a result of these transactions, we no longer consolidate CSI Compressco as of January 29, 2021. We recognized a primarily non-cash accounting gain of $120.6 million during the six-month period ended June 30, 2021 related to the GP Sale. The gain is included in income (loss) from discontinued operations, net of taxes in our consolidated statement of operations. We will also continue to provide back-office support to CSI Compressco under a Transition Services Agreement for up to one year until CSI Compressco has completed a full separation from our back-office support functions. Our interest in CSI Compressco and the general partner represented substantially all of our Compression Division.

In addition, on March 1, 2018, we closed a series of related transactions that resulted in the disposition of our Offshore Division, consisting of our Offshore Services and Maritech segments. Our former Compression and Offshore Divisions are reported as discontinued operations for all periods presented. Our consolidated balance sheets and consolidated statements of operations report discontinued operations separate from continuing operations. Our consolidated statements of comprehensive income, statements of equity and statements of cash flows combine continuing and discontinued operations. Our current-year consolidated statement of operations, statement of comprehensive income, statement of equity and statement of cash flows include CSI Compressco activity for January 1 through January 29. Our consolidated statements of cash flows for the six-month periods ended June 30, 2021 and June 30, 2020 included $3.0 million and $11.2 million, respectively, of capital expenditures related to our former Compression division, as well as $271.8 million of proceeds from long-term debt, $273.9 million of payments of long-term debt, $3.6 million from proceeds from sale of property, plant and equipment, and $1.4 million from amortization of deferred financing discounts, costs and gains for the six-month period ended June 30, 2020. Our current-year results do not include CSI Compressco depreciation or amortization as the assets were considered held for sale. A summary of financial information related to our discontinued operations is as follows:

Reconciliation of the Line Items Constituting Pretax Loss from Discontinued Operations to the After-Tax Loss from Discontinued Operations
(in thousands)
Three Months Ended
June 30, 2021
CompressionOffshore ServicesTotal
Major classes of line items constituting loss from discontinued operations
General and administrative expense$$$
Other expense, net121 121 
Pretax loss from discontinued operations(121)(5)(126)
Loss from discontinued operations attributable to TETRA stockholders$(126)
10

Three Months Ended
June 30, 2020
CompressionOffshore ServicesTotal
Major classes of line items constituting loss from discontinued operations
Revenue$96,371 $$96,371 
Cost of revenues62,768 (274)62,494 
Depreciation, amortization, and accretion20,116 20,116 
Impairments and other charges8,977 8,977 
General and administrative expense10,152 111 10,263 
Interest expense, net12,982 12,982 
Other expense, net4,380 4,380 
Pretax income (loss) from discontinued operations(23,004)163 (22,841)
Income tax provision947 
Total loss from discontinued operations(23,788)
Loss from discontinued operations attributable to noncontrolling interest15,781 
Loss from discontinued operations attributable to TETRA stockholders$(8,007)

Six Months Ended
June 30, 2021
CompressionOffshore ServicesTotal
Major classes of line items constituting income from discontinued operations
Revenue$18,968 $$18,968 
Cost of revenues11,474 28 11,502 
General and administrative expense2,795 2,795 
Interest expense, net4,336 4,336 
Other expense, net15 15 
Pretax income (loss) from discontinued operations348 (28)320 
Pretax gain on disposal of discontinued operations120,574 
Total pretax income from discontinued operations120,894 
Income tax provision30 
Total income from discontinued operations120,864 
Income from discontinued operations attributable to noncontrolling interest(333)
Income from discontinued operations attributable to TETRA stockholders$120,531 

Six Months Ended
June 30, 2020
CompressionOffshore ServicesTotal
Major classes of line items constituting loss from discontinued operations
Revenue$186,610 $$186,610 
Cost of revenues117,347 (334)117,013 
Depreciation, amortization, and accretion40,025 40,025 
Impairments and other charges14,348 14,348 
General and administrative expense20,341 316 20,657 
Interest expense, net25,546 25,546 
Other expense, net4,798 4,798 
Pretax (loss) income from discontinued operations(35,795)18 (35,777)
Income tax provision1,379 
Total income from discontinued operations(37,156)
Loss from discontinued operations attributable to noncontrolling interest24,615 
Loss from discontinued operations attributable to TETRA stockholders$(12,541)
    
11

Reconciliation of Major Classes of Assets and Liabilities of the Discontinued Operations to Amounts Presented Separately in the Statement of Financial Position
(in thousands)
June 30, 2021
Offshore ServicesMaritechTotal
Carrying amounts of major classes of liabilities included as part of discontinued operations
Trade payables$1,223 $$1,223 
Accrued liabilities and other150 228 378 
Total liabilities associated with discontinued operations$1,373 $228 $1,601 

December 31, 2020
CompressionOffshore ServicesMaritechTotal
Carrying amounts of major classes of assets included as part of discontinued operations
Cash and cash equivalents$16,577 $$$16,577 
Trade receivables43,837 43,837 
Inventories31,220 31,220 
Other current assets5,231 5,231 
Property, plant, and equipment551,401 551,401 
Other assets61,740 61,740 
Total assets associated with discontinued operations$710,006 $$$710,006 
Carrying amounts of major classes of liabilities included as part of discontinued operations
Trade payables$19,766 $1,222 $$20,988 
Unearned Income269 269 
Accrued liabilities and other36,318 352 228 36,898 
Long-term debt, net638,631 638,631 
Other liabilities37,253 37,253 
Total liabilities associated with discontinued operations$732,237 $1,574 $228 $734,039 

NOTE 3 – REVENUE FROM CONTRACTS WITH CUSTOMERS
    
Our contract asset balances, primarily associated with customer documentation requirements, were $19.3 million and $12.8 million as of June 30, 2021 and December 31, 2020, respectively. Contract assets, along with billed trade accounts receivable, are included in trade accounts receivable in our consolidated balance sheets.

    Unearned income includes amounts in which the Company was contractually allowed to invoice prior to satisfying the associated performance obligations. Unearned income balances were $3.0 million and $2.7 million as of June 30, 2021 and December 31, 2020, respectively, and vary based on the timing of invoicing and performance obligations being met. Revenues recognized during the six-month periods ended June 30, 2021 and June 30, 2020 deferred as of the end of the preceding year were not significant. During the six-month periods ended June 30, 2021 and June 30, 2020, contract costs were not significant.

12

    We disaggregate revenue from contracts with customers into Product Sales and Services within each segment, as noted in our two reportable segments in Note 10. In addition, we disaggregate revenue from contracts with customers by geography based on the following table below.
Three Months Ended
June 30,
Six Months Ended
June 30,
2021202020212020
 (In Thousands)
Completion Fluids & Products
United States$25,229 $32,102 $49,824 $70,060 
International39,378 39,244 61,304 76,523 
64,607 71,346 111,128 146,583 
Water & Flowback Services
United States35,463 22,867 64,395 77,250 
International2,256 1,857 4,127 4,940 
37,719 24,724 68,522 82,190 
Total Revenue
United States60,692 54,969 114,219 147,310 
International41,634 41,101 65,431 81,463 
$102,326 $96,070 $179,650 $228,773 
NOTE 4 – INVENTORIES

Components of inventories as of June 30, 2021 and December 31, 2020 are as follows: 
 June 30, 2021December 31, 2020
 (In Thousands)
Finished goods$59,814 $68,121 
Raw materials3,783 2,910 
Parts and supplies4,554 4,001 
Work in progress1,920 1,626 
Total inventories$70,071 $76,658 

Finished goods inventories include newly manufactured clear brine fluids as well as used brines that are repurchased from certain customers for recycling.
NOTE 5 – INVESTMENTS
Following the closing of the GP Sale, we continue to own approximately 10.9% of the outstanding CSI Compressco common units. In addition, we are party to agreements in which Standard Lithium has the right to explore, produce and extract lithium in our Arkansas leases as well as additional potential resources in the Mojave region of California. The Company receives cash and stock of Standard Lithium (NYSE:SLI) under the terms of the arrangements. The cash and stock component of consideration received is initially recorded as unearned income based on the quoted market price at the time the stock is received, then recognized in income over the contract term. See Note 8 - “Fair Value Measurements” for further information.
Our investments as of June 30, 2021 and December 31, 2020, consist of the following:
June 30, 2021December 31, 2020
(In Thousands)
Investment in CSI Compressco$9,638 $
Investment in Standard Lithium6,583 2,675 
Total Investments$16,221 $2,675 
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NOTE 6 – LONG-TERM DEBT AND OTHER BORROWINGS
 
Consolidated long-term debt as of June 30, 2021 and December 31, 2020, consists of the following:
 Scheduled MaturityJune 30, 2021December 31, 2020
  (In Thousands)
Asset-based credit agreementSeptember 10, 2023$$
Term credit agreement (1)
September 10, 2025171,760 199,894 
Total debt 171,760 199,894 
Less current portion (8,157)
Total long-term debt $163,603 $199,894 
(1) Net of unamortized discount of $5.0 million and $5.5 million as of June 30, 2021 and December 31, 2020, respectively, and net of unamortized deferred financing costs of $7.5 million and $8.2 million as of June 30, 2021 and December 31, 2020, respectively.

    As of June 30, 2021, we had 0 outstanding balance and $6.2 million in letters of credit against our asset-based credit agreement (“ABL Credit Agreement”). Because there was no outstanding balance on this ABL Credit Agreement, associated deferred financing costs of $0.9 million as of June 30, 2021, were classified as other long-term assets on the accompanying consolidated balance sheet. As of June 30, 2021, subject to compliance with the covenants, borrowing base, and other provisions of the ABL Credit Agreement that may limit borrowings, we had an availability of $31.7 million under this agreement. See Note 11 - “Subsequent Events” for additional information.

Our credit agreements contain certain affirmative and negative covenants, including covenants that restrict the ability to pay dividends or other restricted payments. As of June 30, 2021, we are in compliance with all covenants under the credit agreements. Our term credit agreement requires us to offer to prepay a percentage of Excess Cash Flow (as defined in the term credit agreement) following the conclusion of each calendar year. Within five business days of filing our Annual Report for the year ending December 31, 2021, the minimum amount we will be required to offer to prepay pursuant to this obligation is $8.2 million, which is reported as a current liability in our consolidated balance sheet
NOTE 7 – COMMITMENTS AND CONTINGENCIES
 
Litigation
 
We are named defendants in several lawsuits and respondents in certain governmental proceedings arising in the ordinary course of business. While the outcome of lawsuits or other proceedings against us cannot be predicted with certainty, management does not consider it reasonably possible that a loss resulting from such lawsuits or other proceedings in excess of any amounts accrued has been incurred that is expected to have a material adverse impact on our financial condition, results of operations, or liquidity.

There have been no material developments in our legal proceedings during the quarter ended June 30, 2021. For a discussion of our legal proceedings, please see our Annual Report on Form 10-K for the year ended December 31, 2020.

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NOTE 8 – FAIR VALUE MEASUREMENTS
 
Financial Instruments

Investments

Our retained investment in CSI Compressco and our investment in Standard Lithium are recorded based on the quoted market stock price in active markets (a Level 1 fair value measurement). The stock component of consideration received for our arrangement with Standard Lithium is initially recorded as unearned income based on the quoted market price at the time the stock is received, then recognized in income over the contract term. The unearned income associated with the stock component of this agreement is not significant as of June 30, 2021 or December 31, 2020. Changes in the value of stock are recorded in other income (expense) in our consolidated statements of operations

Warrants

The Warrants are valued using a Black Scholes option valuation model that includes estimates of the volatility of the Warrants (a Level 3 fair value measurement). The Warrants are accounted for as a derivative liability and increases (or decreases) in the fair value of the Warrants are generally associated with increases (or decreases) in the trading price of our common stock and by increases in the volatility of our common stock price, resulting in adjustments to earnings for the associated valuation losses (gains), and resulting in future volatility of our earnings during the period the Warrants are outstanding. The fair value of the Warrants and associated liability increased during the second quarter of 2021 primarily due to the increase in TETRA’s stock price. The estimated volatility as of June 30, 2021 was 60%. The outstanding Warrants expire by December 31, 2021.

Recurring and nonrecurring fair value measurements by valuation hierarchy as of June 30, 2021 and December 31, 2020, are as follows:
  Fair Value Measurements Using
Total as ofQuoted Prices in Active Markets for Identical Assets or LiabilitiesSignificant Other Observable InputsSignificant Unobservable Inputs
DescriptionJune 30, 2021(Level 1)(Level 2)(Level 3)
(In Thousands)
Investment in CSI Compressco$9,638 $9,638 $$
Investment in Standard Lithium6,583 6,583 
Warrants liability(3,219)(3,219)
Net asset$13,002 
   Fair Value Measurements Using
Total as ofQuoted Prices in Active Markets for Identical Assets or LiabilitiesSignificant Other Observable InputsSignificant Unobservable Inputs
DescriptionDecember 31, 2020(Level 1)(Level 2)(Level 3)
(In Thousands)
Investment in Standard Lithium$2,675 $2,675 $
Warrants liability(198)(198)
Net asset$2,477 

The fair values of cash, restricted cash, accounts receivable, accounts payable, accrued liabilities, short-term borrowings and long-term debt pursuant to TETRA’s ABL Credit Agreement and term credit agreement approximate their carrying amounts. See Note 6 - “Long-Term Debt and Other Borrowings” for further discussion.
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NOTE 9 – NET INCOME (LOSS) PER SHARE

The average diluted shares outstanding excludes the impact of certain outstanding equity awards and warrants of 2,013,000 and 1,740,000 shares for the three and six-month periods ended June 30, 2021, respectively, and 16,000 and 11,000 shares for the three and six-month periods ended June 30, 2020, respectively, as the inclusion of these shares would have been anti-dilutive due to the net loss from continuing operations recorded during these periods.
NOTE 10 – INDUSTRY SEGMENTS
 
We manage our operations through 2 Divisions: Completion Fluids & Products and Water & Flowback Services.

 Summarized financial information concerning the business segments is as follows:
Three Months Ended
June 30,
Six Months Ended
June 30,
 2021202020212020
 (In Thousands)
Revenues from external customers    
Product sales  
Completion Fluids & Products Division$62,565 $67,243 $107,583 $137,433 
Water & Flowback Services Division18 32 33 
Consolidated$62,583 $67,251 $107,615 $137,466 
Services  
Completion Fluids & Products Division$2,042 $4,103 $3,545 $9,150 
Water & Flowback Services Division37,701 24,716 68,490 82,157 
Consolidated$39,743 $28,819 $72,035 $91,307 
Total revenues  
Completion Fluids & Products Division$64,607 $71,346 $111,128 $146,583 
Water & Flowback Services Division37,719 24,724 68,522 82,190 
Consolidated$102,326 $96,070 $179,650 $228,773 
Income (loss) before taxes  
Completion Fluids & Products Division$16,427 $13,202 $25,438 $32,598 
Water & Flowback Services Division(4,978)(8,418)(10,458)(10,662)
Interdivision eliminations
Corporate Overhead(1)
(16,722)(16,911)(32,031)(30,354)
Consolidated$(5,270)$(12,125)$(17,045)$(8,411)
(1) Amounts reflected include the following general corporate expenses:
 Three Months Ended
June 30,
Six Months Ended
June 30,
 2021202020212020
 (In Thousands)
General and administrative expense$9,543 $11,611 $22,564 $19,692 
Depreciation and amortization248 175 418 372 
Interest expense4,044 4,749 9,107 10,204 
Warrants fair value adjustment (income) expense2,698 11 3,021 (327)
Other general corporate income, net189 365 (3,079)413 
Total$16,722 $16,911 $32,031 $30,354 
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NOTE 11 – SUBSEQUENT EVENTS

On July 30, 2021, we entered into an amendment of the ABL Credit Agreement that, among other things, extended the term of the credit facility to May 31, 2025 and revised our commitment to $80.0 million, with a $20.0 million accordion. The amendment increased the availability by adding the value of accrued Unites States receivables, increased the forward rates on accounts receivable for investment grade customers and incorporated a new $15.0 million sub-facility subject to a borrowing base consisting of certain trade receivables and inventory in the United Kingdom. The amendment resulted in an increase of approximately $9.4 million to the borrowing base as of July 30, 2021, compared to the borrowing base prior to the amendment. In connection with the amendment, we also elected to repay the $8.2 million under our term credit agreement that would have become due in 2022.

In May 2021, we signed a memorandum of understanding (“MOU”) with CarbonFree Chemicals Holdings, LLC (“CarbonFree”), a carbon capture company with patented technologies that capture CO2 and mineralize emissions to make commercial, carbon-negative chemicals. During the one-year MOU period, both Companies will work towards a definitive agreement that might include investments by TETRA into CarbonFree, a joint venture, or other commercial arrangements. On July 23, 2021, we entered into a commitment to invest $5.0 million in a convertible note to be issued by CarbonFree. Our investment in Carbon Free is contingent on certain conditions and is expected to be completed during the third quarter of 2021.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of financial condition and results of operations should be read in conjunction with our unaudited consolidated financial statements and accompanying notes included in this Quarterly Report. In addition, the following discussion and analysis also should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2020 filed with the SEC on March 5, 2021 (“2020 Annual Report”). This discussion includes forward-looking statements that involve certain risks and uncertainties.
Business Overview  
We are a geographically diversified oil and gas services company, focused on completion fluids and associated products and services, comprehensive water management, frac flowback and production well testing. We operate through two reporting segments organized into two Divisions - Completion Fluids & Products and Water & Flowback Services. In January, we announced our commitment to pursue low carbon energy initiatives that would leverage our fluids and aqueous chemistry core competencies, our significant bromine and lithium assets (including our approximately 31,100 net acres of brine leases in Arkansas) and technologies, and our leading calcium chloride production capabilities.
After declining to historic lows due to depressed oil prices resulting from Russia and Saudi Arabia’s price war and the COVID-19 pandemic last year, toward the end of 2020 and into the first quarter of 2021, customer activity levels in the North America onshore business began to recover as oil prices returned to over $60 per barrel. Customer activity levels continued to improve during the second quarter as oil prices remained constructive, increasing into the $70 per barrel range by the end of the quarter.
Although activity during the second quarter of 2021 for offshore and international customers remained below prior year levels, our Completion Fluids and Products business delivered higher revenues sequentially compared to the first quarter as activity began to ramp back up in the Gulf of Mexico and internationally. The continued rollout of COVID-19 vaccines and fiscal stimulus policies are expected to support an ongoing global economic recovery and further improve the oil demand outlook which, together with continued discipline from United States operators, should provide support for oil and gas prices and further increases in offshore activity both in the Gulf of Mexico and internationally during the second half of the year. However, the current market conditions resulting from the COVID-19 pandemic could rapidly change and there could be a new outbreak of a COVID-19 variant or the vaccines may not be as effective as anticipated, which could negatively impact the demand for our services and products and our future revenues, results of operations and cash flows.

With activity levels expected to further increase during the second half of the year, we are continuing to tightly manage our cost structure. Many of the cost reduction initiatives executed in response to unprecedented industry conditions last year remained in effect as of the end of the second quarter.
On January 29, 2021 as previously announced in our 2020 Annual Report, we closed the sale of the general partner of CSI Compressco, including incentive distribution rights (“IDRs”) in CSI Compressco and approximately 23.1% of the outstanding limited partner interests in CSI Compressco, referred to as the “GP Sale.” We recorded a book gain of $120.6 million during 2021 in connection with the GP Sale. This gain, most of which was non-cash, was a function of CSI Compressco having a negative carrying value within our consolidated balance sheet due to our share of cumulative losses and distributions. We have reflected the operations of our former Compression Division as discontinued operations for all periods presented. Following the closing of the transaction, we continue to own approximately 10.9% of the outstanding CSI Compressco common units. See Note 2 – “Discontinued Operations” in the Notes to Consolidated Financial Statements for further information.
During the first quarter of 2021, we used proceeds from the GP sale and available cash on hand to pay down $29.3 million on our term loan, which matures in September 2025.
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Results of Operations

The following information should be read in conjunction with the Consolidated Financial Statements and the associated Notes contained elsewhere in this report.

Three months ended June 30, 2021 compared with three months ended June 30, 2020.

Consolidated Comparisons
Three Months Ended
June 30,
Period to Period Change
 202120202021 vs 2020% Change
 (In Thousands, Except Percentages)
Revenues$102,326 $96,070 $6,256 6.5 %
Gross profit16,433 15,811 622 3.9 %
Gross profit as a percentage of revenue16.1 %16.5 %  
General and administrative expense17,351 23,862 (6,511)(27.3)%
General and administrative expense as a percentage of revenue17.0 %24.8 %  
Interest expense, net3,886 4,604 (718)(15.6)%
Warrants fair value adjustment expense2,698 11 2,687 
NM(1)
Other income, net(2,232)(541)(1,691)(312.6)%
Loss before taxes and discontinued operations(5,270)(12,125)6,855 (56.5)%
Loss before taxes and discontinued operations as a percentage of revenue(5.2)%(12.6)%  
Provision for income taxes1,384 1,054 330 31.3 %
Loss before discontinued operations(6,654)(13,179)6,525 (49.5)%
Discontinued operations:
Loss from discontinued operations, net of taxes(126)(23,788)23,662 (99.5)%
Net loss(6,780)(36,967)30,187 (81.7)%
Loss attributable to noncontrolling interest27 15,712 (15,685)(99.8)%
Net loss attributable to TETRA stockholders$(6,753)$(21,255)$14,502 (68.2)%
 (1) Percent change is not meaningful

Consolidated revenues increased in the current year quarter primarily due to improving industry conditions compared to the prior year quarter which had been significantly affected by the impact of the COVID-19 pandemic and reduced demand for oil and gas. See Divisional Comparisons section below for a more detailed discussion of the change in our revenue.

Consolidated gross profit increased in the current year quarter primarily due to the increase in revenue, partially offset by an increase in costs associated with the higher activity levels described above, resulting in relatively stable margins.

Consolidated general and administrative expenses decreased for the current quarter compared to the prior year quarter, primarily due to cost reduction actions taken during the last twelve months, including reduced compensation of $2.6 million. In addition, prior year bad debt expense was $3.8 million, which included a significant reserve related to a customer bankruptcy.

Increases (or decreases) in the fair value of the Warrants are generally associated with increases (or decreases) in the trading price of our common stock, resulting in adjustments to earnings for the associated valuation losses (gains), and resulting in future volatility of our earnings during the period the Warrants are outstanding. The increase in TETRA’s stock price over the last three months resulted in the fair-value adjustment expense in the current period of $2.7 million.

Consolidated other income, net, increased in the current quarter, compared to the prior year quarter primarily due to a $1.2 million increase in income related to unit and stock price appreciation of our investments in CSI Compressco and Standard Lithium. In addition, other income, net, includes foreign currency gains of
19

$0.2 million in the current year quarter compared to foreign currency losses of $0.8 million in the prior year quarter. These increases in other income were partially offset by a $0.6 million decrease in gains associated with the sale of assets.
 
Consolidated provision for income taxes was $1.4 million during the current quarter, compared to $1.1 million during the prior year quarter. Our consolidated effective tax rate for the current quarter of negative 26.3% was primarily the result of losses generated in entities for which no related tax benefit has been recorded. The losses generated by these entities do not result in tax benefits due to offsetting valuation allowances being recorded against the related net deferred tax assets. We establish a valuation allowance to reduce the deferred tax assets when it is more likely than not that some portion or all of the deferred tax assets will not be realized. Included in our deferred tax assets are net operating loss carryforwards and tax credits that are available to offset future income tax liabilities in the United States as well as in certain non-U.S. jurisdictions.

Income from discontinued operations, net of taxes, was nominal compared to a loss of $23.8 million for the prior year quarter. The current period includes a $(0.1) million adjustment to the gain recognized from the GP Sale completed in January 2021, while the prior year reflects CSI Compressco‘s full quarter results, including $9.0 million of asset impairments.

Income (loss) attributable to noncontrolling interest improved $15.7 million from the prior year quarter as CSI Compressco’s results were included in the prior year, while the continuing noncontrolling interest is immaterial for TETRA.

Divisional Comparisons
 
Completion Fluids & Products Division
Three Months Ended
June 30,
Period to Period Change
 202120202021 vs 2020% Change
 (In Thousands, Except Percentages)
Revenues$64,607 $71,346 $(6,739)(9.4)%
Gross profit18,543 20,819 (2,276)(10.9)%
Gross profit as a percentage of revenue28.7 %29.2 %  
General and administrative expense4,598 8,442 (3,844)(45.5)%
General and administrative expense as a percentage of revenue7.1 %11.8 %  
Interest income, net(162)(143)(19)13.3 %
Other income, net(2,320)(682)(1,638)240.2 %
Income before taxes$16,427 $13,202 $3,225 24.4 %
Income before taxes as a percentage of revenue25.4 %18.5 %  
 
Revenues for our Completion Fluids & Products Division decreased compared to the prior year quarter primarily due to lower offshore activity in the Gulf of Mexico and internationally. The timing of the reduction in offshore activity during 2020 due to the effects of the COVID-19 pandemic lagged onshore and did not significantly impact the prior year quarter for this division.

Completion Fluids & Products Division gross profit for the current year quarter decreased in relation to decreased revenues mentioned above although margins remained relatively stable.

Pretax income for our Completion Fluids & Products Division increased compared to the prior year period driven by a decrease in general and administrative expense and an increase in other income. The decrease in general and administrative expense was a result of decreased bad debt expense of $3.0 million associated with a customer bankruptcy in the prior year, and decreased wage and benefit related expenses of $0.8 million. The increase in other income, net, was primarily due to a $1.1 million increase in income from our investment in Standard Lithium, including an increase in the Standard Lithium stock price as well as income associated with additional shares received in May 2021. Foreign currency fluctuations were favorable compared with the prior year quarter by $0.4 million.

20

Water & Flowback Services Division
Three Months Ended
June 30,
Period to Period Change
 202120202021 vs 2020% Change
 (In Thousands, Except Percentages)
Revenues$37,719 $24,724 $12,995 52.6 %
Gross loss(1,865)(4,836)2,971 (61.4)%
Gross loss as a percentage of revenue(4.9)%(19.6)%  
General and administrative expense3,209 3,809 (600)(15.8)%
General and administrative expense as a percentage of revenue8.5 %15.4 %  
Interest income, net(2)(300.0)%
Other income, net(100)(225)125 (55.6)%
Loss before taxes$(4,978)$(8,418)$3,440 (40.9)%
Income (loss) before taxes as a percentage of revenue(13.2)%(34.0)%  
 
Revenues for our Water & Flowback Services Division increased due to higher customer drilling and completion activity compared to the prior year quarter. Revenues for the prior year quarter had been significantly impacted by industry-wide reductions in rig and frac count resulting from historically low oil prices due to the price war between Russia and Saudi Arabia, as well as the global pandemic.

Gross loss for our Water & Flowback Services Division improved in the current quarter compared to the prior year quarter, primarily due to higher revenues resulting from the increased activity levels described above. Additionally, the decrease in capital expenditures over the past twelve months has resulted in a decrease in depreciation expense as assets become fully depreciated.

The Water & Flowback Services Division reported a lower pretax loss in the current quarter primarily due to an improvement in the gross loss described above, as well as a decrease in general and administrative expense. General and administrative expense for our Water & Flowback Services Division decreased primarily due a decrease in bad debt expense of $0.7 million.

Corporate Overhead
Three Months Ended
June 30,
Period to Period Change
 202120202021 vs 2020% Change
 (In Thousands, Except Percentages)
General and administrative expense$9,544 $11,611 $(2,067)(17.8)%
Interest expense, net4,043 4,749 (706)(14.9)%
Warrants fair value adjustment expense2,698 11 2,687 NM
Depreciation and amortization248 175 73 41.7 %
Other expense, net189 365 (176)(48.2)%
(Loss) before taxes$(16,722)$(16,911)$189 1.1 %

Corporate Overhead pretax loss decreased due to lower general and administrative expense and interest expense, offset by a $2.7 million fair value adjustment for the outstanding Warrants liability in the current quarter resulting primarily from the increase in TETRA’s stock price. General and administrative expense decreased primarily due to lower salary and employee expenses of $1.7 million and reduced professional expenses of $0.7 million. Salary and employee expenses were lower due to staffing reductions, despite continued appreciation in our stock price, which resulted in $1.3 million of additional expense related to certain long-term incentive compensation awards. The increase in TETRA’s stock price over the last twelve months resulted in the Warrants fair-value adjustment expense in the current period of $2.7 million.
21

Six months ended June 30, 2021 compared with six months ended June 30, 2020.

Consolidated Comparisons
Six Months Ended June 30,Period to Period Change
 202120202021 vs 2020% Change
 (In Thousands, Except Percentages)
Revenues$179,650 $228,773 $(49,123)(21.5)%
Gross profit24,302 44,848 (20,546)(45.8)%
Gross profit as a percentage of revenue13.5 %19.6 %  
General and administrative expense37,363 44,210 (6,847)(15.5)%
General and administrative expense as a percentage of revenue20.8 %19.3 %  
Interest expense, net8,290 9,896 (1,606)(16.2)%
Warrants fair value adjustment expense (income)3,021 (327)3,348 NM
Other income, net(7,327)(520)(6,807)NM
Loss before taxes and discontinued operations(17,045)(8,411)(8,634)102.7 %
Loss before taxes and discontinued operations as a percentage of revenue(9.5)%(3.7)%  
Provision for income taxes1,552 1,776 (224)(12.6)%
Loss before discontinued operations(18,597)(10,187)(8,410)82.6 %
Discontinued operations:
Income (loss) from discontinued operations, net of taxes120,864 (37,156)158,020 (425.3)%
Net income (loss)102,267 (47,343)149,610 (316.0)%
(Income) loss attributable to noncontrolling interest(306)24,537 (24,843)(101.2)%
Net income (loss) attributable to TETRA stockholders$101,961 $(22,806)$124,767 (547.1)%

Consolidated revenues decreased in the current year period compared to the prior year period primarily due to the effects of the COVID-19 pandemic and the impact of the associated decline in oil prices on customer activity levels. The first quarter of the prior year period was not affected by the decline in oil prices or the pandemic. United States onshore activity was significantly impacted in the second quarter of 2020, but the significant ramp down in offshore and international activity did not occur until the second half of 2020. Gross profit as a percentage of revenue declined primarily due to the impact of fixed costs including rent, depreciation and amortization, which do not vary with revenue, as well as product mix. In addition, our revenues were negatively impacted by historic cold weather during February of 2021, which temporarily shut down operations in several southern states within the United States. See Divisional Comparisons section below for additional discussion.

Consolidated general and administrative expenses decreased primarily due to decreased bad debt expense of $4.7 million and decreased salary and employee expenses of $3.1 million, partially offset by increased professional services fees of $1.2 million related to the GP Sale. Salary and employee expenses were lower despite appreciation in our stock price since the start of the year, which resulted in $4.7 million of additional expense related to certain long-term incentive compensation awards. The decrease in our salary and employee expenses stemmed from our restructuring efforts and headcount reductions in response to the decline in activity levels.
 
Consolidated interest expense, net, decreased in the current year period primarily due to $29.3 million of repayments of our term credit facility during the first quarter of 2021.

The increase in TETRA’s stock price over the last six months resulted in the Warrants fair-value adjustment expense in the current year period of $3.0 million.

Consolidated other income, net, increased primarily due to a $5.4 million increase in unit and stock price appreciation of our investments in CSI Compressco and Standard Lithium. Additionally, the current year period includes foreign currency gains of $1.0 million, compared with foreign currency losses of $0.9 million in the prior year period.

22

Our consolidated provision for income taxes for the current year period is primarily attributable to taxes in certain non-U.S. jurisdictions and Texas gross margin taxes. Our consolidated effective tax rate for the six-month period ended June 30, 2021 of negative 9.1% was primarily the result of losses generated in entities for which no related tax benefit has been recorded. The losses generated by these entities do not result in tax benefits due to offsetting valuation allowances being recorded against the related net deferred tax assets. We establish a valuation allowance to reduce the deferred tax assets when it is more likely than not that some portion or all of the deferred tax assets will not be realized. Included in our deferred tax assets are net operating loss carryforwards and tax credits that are available to offset future income tax liabilities in the United States as well as in certain non-U.S. jurisdictions.

Income from discontinued operations, net of taxes, was $120.9 million compared to a loss of $37.2 million for the prior year, including $14.3 million of asset impairments. The current year income includes a $120.6 million primarily non-cash accounting gain from the deconsolidation of CSI Compressco. This gain is offset by a $0.01 million tax provision after taking into consideration utilization of net operating loss and credit carryforwards.

Income (loss) attributable to noncontrolling interest improved from a $24.5 million loss in the prior year to $0.3 million of income for the first 29 days of January primarily due to the GP Sale in January 2021, and no depreciation or amortization recognized by TETRA for CSI Compressco in the current year.

Divisional Comparisons
 
Completion Fluids & Products Division
Six Months Ended June 30,Period to Period Change
 202120202021 vs 2020% Change
 (In Thousands, Except Percentages)
Revenues$111,128 $146,583 $(35,455)(24.2)%
Gross profit30,194 46,783 (16,589)(35.5)%
Gross profit as a percentage of revenue27.2 %31.9 % 
General and administrative expense8,904 14,375 (5,471)(38.1)%
General and administrative expense as a percentage of revenue8.0 %9.8 %  
Interest income, net(300)(297)(3)1.0 %
Other (income) expense, net(3,848)107 (3,955)NM
Income before taxes$25,438 $32,598 $(7,160)(22.0)%
Income before taxes as a percentage of revenue22.9 %22.2 %  
 
Revenues for our Completion Fluids & Products Division decreased primarily due to lower activity in the North Sea and some deferral of activity in the Gulf of Mexico as several projects were delayed into future quarters. In addition, the prior year period benefited from a large international order. The COVID-19 pandemic and associated reduction in oil prices did not have a significant impact on offshore activity until the second half of 2020. In addition, the first quarter of 2020 reflected increased division product sales revenues in the Gulf of Mexico, including product sales associated with a TETRA CS Neptune completion fluid sale, and increased international product sales as well as domestic manufactured products sales.

Gross profit for our Completion Fluids & Products Division decreased compared to the prior year period due to lower revenue and product mix. Completion Fluids & Products Division profitability in future periods will continue to be affected by the mix of its products and services, market demand for our products and services, drilling and completions activity and commodity prices.

Pretax income for our Completion Fluids & Products Division decreased due to the reduction in gross profit described above. General and administrative expense decreased primarily due to a lower bad debt expense of $3.0 million and decreased salary and employee-related expenses of $2.1 million. Other (income) expense, net, improved primarily due to a $2.4 million increase in income from our investment in Standard Lithium, most of which was represented by an increase in the Standard Lithium stock price. In addition, foreign currency fluctuations were favorable compared with the prior year period by $1.4 million.

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Water & Flowback Services Division
Six Months Ended June 30,Period to Period Change
 202120202021 vs 2020% Change
 (In Thousands, Except Percentages)
Revenues$68,522 $82,190 $(13,668)(16.6)%
Gross profit (loss)(5,479)(1,569)(3,910)249.2 %
Gross profit as a percentage of revenue(8.0)%(1.9)%  
General and administrative expense5,895 10,143 (4,248)(41.9)%
General and administrative expense as a percentage of revenue8.6 %12.3 %  
Interest income, net(518)(11)(507)NM
Other income, net(398)(1,039)641 (61.7)%
Income (loss) before taxes$(10,458)$(10,662)$204 1.9 %
Income (loss) before taxes as a percentage of revenue(15.3)%(13.0)%  
 
    Revenues for our Water & Flowback Services Division decreased in the current year period compared to the prior year period. Although customer activity levels continued to increase from recent lows in response to an improving commodity price environment, they remained well below the level of the first quarter of 2020. Additionally, the current year was negatively impacted by severe weather that caused extended shut downs in certain locations during the first quarter.

The Water & Flowback Services Division reported a deterioration in gross profit (loss) during the current year period compared to the prior year period primarily due to lower revenues resulting from the decreased activity levels described above. In addition, we have incurred some start-up costs associated with a ramp up in activity levels.
 
The Water & Flowback Services Division reported a lower pretax loss with the increase in gross loss described above, more than offset by a decrease in general and administrative expense. General and administrative expenses decreased primarily due to decreased salary and benefit related expenses of $2.4 million and a decrease in bad debt expense of $1.7 million.

Corporate Overhead
Six Months Ended June 30,Period to Period Change
 202120202021 vs 2020% Change
 (In Thousands, Except Percentages)
General and administrative expense$22,564 $19,692 $2,872 14.6 %
Interest expense, net9,107 10,204 (1,097)(10.8)%
Warrants fair value adjustment income3,021 (327)3,348 NM
Depreciation and amortization418 372 46 12.4 %
Other (income) expense, net(3,079)413 (3,492)NM
(Loss) before taxes$(32,031)$(30,354)$(1,677)(5.5)%

Corporate Overhead pretax loss increased due to an increase in general and administrative expense and the $3.0 million current period Warrants fair value expense from the increase in TETRA’s stock price, offset by an improvement in other (income) expense, net.

General and administrative expense for our Corporate Overhead for the current year period includes $4.7 million of expense related to certain long-term incentive compensation awards resulting from the significant appreciation in our stock price since the beginning of the year and $1.2 million of transaction expenses related to the GP Sale. Excluding these items, general and administrative expense would have been $16.7 million, or $3.0 million lower than prior year.

Corporate other (income) expense, net changed from $0.4 million expense in the prior year period to $3.1 million income in the current year period. This change was primarily due to a $3.0 million increase in the market value of the CSI Compressco units we continue to own following the closing of the GP Sale.
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How we Evaluate Operations
    We use U.S. GAAP financial measures such as revenues, gross profit, income (loss) before taxes, and net cash provided by operating activities, as well as certain non-GAAP financial measures, including Adjusted EBITDA, as performance measures for our business.
    Adjusted EBITDA. We view Adjusted EBITDA as one of our primary management tools, and we track it on a monthly basis, both in dollars and as a percentage of revenues (typically compared to the prior month, prior year period, and to budget). We define Adjusted EBITDA as earnings before interest, taxes, depreciation, amortization, impairments and certain other non-cash charges and non-recurring adjustments.
    Adjusted EBITDA is used as a supplemental financial measure by our management to:
evaluate the financial performance of our assets without regard to financing methods, capital structure, or historical cost basis; and
determine our ability to incur and service debt and fund capital expenditures.

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 The following table reconciles net income (loss) to Adjusted EBITDA for the periods indicated:
Three Months Ended
June 30, 2021
Completion Fluids & ProductsWater & Flowback ServicesCorporate SG&AOther and EliminationsTotal
(In Thousands, Except Percents)
Revenue$64,607 $37,719 $ $ $102,326 
Net income (loss) before taxes and discontinued operations16,427 (4,978)(9,543)(7,176)(5,270)
Adjustment to long-term incentives— — 627 — 627 
Transactions and other expenses(391)145 (99)— (345)
Former CEO stock appreciation right expense— — 714 — 714 
Restructuring expenses291 742 — — 1,033 
Stock warrant fair value adjustment— — — 2,698 2,698 
Adjusted income (loss) before taxes and discontinued operations$16,327 $(4,091)$(8,301)$(4,478)$(543)
Adjusted interest expense, net(162)— 4,044 3,885 
Adjusted depreciation and amortization1,701 6,087 — 245 8,033 
Equity compensation expense— — 1,592 — 1,592 
Adjusted EBITDA$17,866 $1,999 $(6,709)$(189)$12,967 
Adjusted EBITDA as % of revenue27.7 %5.3 %12.7 %
Three Months Ended
June 30, 2020
Completion Fluids & ProductsWater & Flowback ServicesCorporate SG&AOther and EliminationsTotal
(In Thousands, Except Percents)
Revenue$71,346 $24,724 $ $ $96,070 
Net income (loss) before taxes and discontinued operations13,202 (8,418)(11,611)(5,298)(12,125)
Severance569 1,016 334 — 1,919 
Transaction and other expenses(90)— 276 — 186 
Restructuring and severance expenses31 187 — — 218 
Stock warrant fair value adjustment— — — 11 11 
Allowance for bad debt2,800 — — — 2,800 
Adjusted income (loss) before taxes and discontinued operations$16,512 $(7,215)$(11,001)$(5,287)$(6,991)
Adjusted interest expense, net(143)(2)— 4,749 4,604 
Adjusted depreciation and amortization1,934 7,617 — 175 9,726 
Equity compensation expense— — 1,602 — 1,602 
Adjusted EBITDA$18,303 $400 $(9,399)$(363)$8,941 
Adjusted EBITDA as % of revenue25.7 %1.6 %9.3 %

Adjusted EBITDA is a financial measure that is not in accordance with U.S. GAAP and should not be considered an alternative to net income, operating income, cash provided by operating activities, or any other measure of financial performance presented in accordance with U.S. GAAP. This measure may not be comparable to similarly titled financial metrics of other companies, as other companies may not calculate Adjusted EBITDA in the same manner as we do. Management compensates for the limitations of Adjusted EBITDA as an analytical tool by reviewing the comparable U.S. GAAP measures, understanding the differences between the measures, and incorporating this knowledge into management’s decision-making processes.
Liquidity and Capital Resources
    
    We believe that our capital structure allows us to meet our financial obligations despite current uncertain operating conditions and financial markets. Our liquidity at the end of second quarter was $82.0 million. Liquidity is defined as unrestricted cash plus availability under the revolving credit facility. Information about the terms and covenants of our debt agreements can be found in our 2020 Annual Report and in Note 6 - Long Term Debt and Other Borrowings.
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Our consolidated sources and uses of cash, which include cash activity from our former Compression Division, for January 2021 prior to the closing of the GP sale and for the six months ended 2020 are as follows:
Six Months Ended
June 30,
20212020
(In Thousands)
Operating activities$7,607 $60,387 
Investing activities(10,451)(14,063)
Financing activities(29,775)(6,486)

Operating Activities
 
Consolidated cash flows provided by operating activities decreased $52.8 million compared to the first six months of 2020. Current year cash flows provided by operating activities include $0.9 million generated by CSI Compressco in January prior to closing of the GP Sale, compared to $13.4 million during the six-month period ending June 30, 2020. Operating cash flows decreased primarily due to including the results of CSI Compressco for one month during the current year compared to six months during the prior year, as well as a decrease in revenue, and the effect of working capital movements at the end of the quarter, particularly related to growth in accounts receivable. We continue to monitor customer credit risk in the current environment and focus on serving larger capitalized oil and gas operators and national oil companies.

Investing Activities
 
Total cash capital expenditures during the first six months of 2021 were $12.5 million. Our Water & Flowback Services Division spent $7.9 million on capital expenditures, primarily to maintain, automate and upgrade its water management and flowback equipment fleet. Our Completion Fluids & Products Division spent $1.5 million on capital expenditures. Our former Compression Division spent $3.0 million in January of 2021 primarily to maintain its compression fleet.

Historically, a significant majority of our planned capital expenditures have been related to identified opportunities to grow and expand our existing businesses. However, such expenditures have recently been, and may continue to be, postponed or canceled as we are reviewing all capital expenditure plans carefully in an effort to conserve cash. We currently have no long-term capital expenditure commitments. The deferral of capital projects could affect our ability to expand our operations in the future. If the forecasted demand for our products and services increases or decreases, the amount of planned expenditures on growth and expansion may be adjusted.
 
Financing Activities 
 
As a result of TETRA’s strong cash flow from operations in 2020 and the proceeds from the GP Sale, during the first six months of 2021, we repaid $29.3 million on our term credit agreement. We may supplement our existing cash balances and cash flow from operating activities with short-term borrowings, long-term borrowings, issuances of equity and debt securities, and other sources of capital. We are aggressively managing our working capital and capital expenditure needs in order to maximize our liquidity in the current environment.

Long-Term Debt

Asset-Based Credit Agreement. As of June 30, 2021, our ABL Credit Agreement provides for a senior secured revolving credit facility of up to $100.0 million, subject to a borrowing base to be determined by reference to the value of inventory and accounts receivable, and includes a sublimit of $20.0 million for letters of credit and a swingline loan sublimit of $10.0 million. The amounts we may borrow under the ABL Credit Agreement are derived from our accounts receivable and certain inventory. Changes in demand for our products and services have an
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impact on our eligible accounts receivable and the value of our inventory, which could result in significant changes to our borrowing base and therefore our availability under our ABL Credit Agreement.

On July 30, 2021, we entered into an amendment of the ABL Credit Agreement that, among other things, extended the term of the credit facility to May 31, 2025 and revised our commitment to $80.0 million with a $20.0 million accordion. The amendment increased the availability by adding the value of accrued United States receivables, increased the forward rates on accounts receivable for investment grade customers and incorporated a new $15.0 million sub-facility subject to a borrowing base consisting of certain trade receivables and inventory in the United Kingdom. The amendment resulted in an approximate $9.4 million increase to the borrowing base as of July 30, 2021, compared to the borrowing base prior to the amendment.
    
    Term Credit Agreement.    The term credit agreement is scheduled to mature on September 10, 2025. Our term credit agreement requires us to offer to prepay a percentage of Excess Cash Flow (as defined in the term credit agreement) following the conclusion of each calendar year. Within five business days of filing our Annual Report for the year ending December 31, 2021, the minimum amount we will be required to offer to prepay pursuant to this obligation is $8.2 million. In connection with the July 30, 2021 ABL Credit Agreement amendment, we elected to repay the $8.2 million under our term credit agreement that would have become due in 2022. As of July 30, 2021, $176.1 million in aggregate principal amount of our term credit agreement is outstanding.

Other Sources and Uses

    In addition to the aforementioned credit facilities, we fund our respective short-term liquidity requirements from cash generated by our respective operations and from short-term vendor financing. Should additional capital be required, the ability to raise such capital through the issuance of additional debt or equity securities may currently be limited. Instability or volatility in the capital markets at the times we need to access capital may affect the cost of capital and the ability to raise capital for an indeterminable length of time. If it is necessary to issue additional equity to fund our capital needs, additional dilution of our common stockholders will occur. We periodically evaluate engaging in strategic transactions and may consider divesting non-core assets where our evaluation suggests such transaction is in the best interest of our business. In challenging economic environments, we may experience increased delays and failures by customers to pay our invoices. Given the nature and significance of the pandemic and disruption in the oil and gas industry, we could experience delayed customer payments and payment defaults associated with customer liquidity issues and bankruptcies. If our customers delay paying or fail to pay us a significant amount of our outstanding receivables, it could have an adverse effect on our liquidity. An increase of aged unpaid receivable would also negatively affect our borrowing availability under the ABL Credit Agreement.

Off Balance Sheet Arrangements
 
As of June 30, 2021, we had no “off balance sheet arrangements” that may have a current or future material effect on our consolidated financial condition or results of operations. 
Critical Accounting Policies and Estimates
 
    There have been no material changes or developments in the evaluation of the accounting estimates and
the underlying assumptions or methodologies pertaining to our Critical Accounting Policies and Estimates disclosed
in our 2020 Annual Report. In preparing our consolidated financial statements, we make assumptions, estimates, and judgments that affect the amounts reported. These judgments and estimates may change as new events occur, as new information is acquired, and as changes in our operating environments are encountered. Actual results are likely to differ from our current estimates, and those differences may be material.
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Commitments and Contingencies
 
Investment

In May 2021, we signed a MOU with CarbonFree, a carbon capture company with patented technologies that capture CO2 and mineralize emissions to make commercial, carbon-negative chemicals. TETRA and CarbonFree have been jointly sharing and leveraging both Companies' technical resources and expertise as CarbonFree continues to advance their carbon capture mineralization pilot plant, processes, and technologies. During the one-year MOU period, both Companies will work towards a definitive agreement that might include investments by TETRA into CarbonFree, a joint venture, or other commercial arrangements that will leverage each Company's strength to advance this market-leading technology. On July 23, 2021, we entered into a commitment to invest $5.0 million in a convertible note to be issued by CarbonFree. Our investment in Carbon Free is contingent on certain conditions and is expected to be completed during the third quarter of 2021.

Litigation
 
For information regarding litigation, see - Note 7 - “Commitments and Contingencies” in the Notes to Consolidated Financial Statements.

Long-Term Debt

For information on our credit agreements, see Note 6 - “Long-Term Debt and Other Borrowings” and Note 11 - “Subsequent Events” in the Notes to Consolidated Financial Statements.

Leases

We have operating leases for some of our transportation equipment, office space, warehouse space, operating locations, and machinery and equipment. Our leases have remaining lease terms ranging from 1 to 16 years. Information about the terms and covenants of our lease agreements can be found in our 2020 Annual Report.

Product Purchase Obligations

In the normal course of our Completion Fluids & Products Division operations, we enter into supply agreements with certain manufacturers of various raw materials and finished products. Some of these agreements have terms and conditions that specify a minimum or maximum level of purchases over the term of the agreement. Other agreements require us to purchase the entire output of the raw material or finished product produced by the manufacturer. Our purchase obligations under these agreements apply only with regard to raw materials and finished products that meet specifications set forth in the agreements. We recognize a liability for the purchase of such products at the time we receive them. As of June 30, 2021, the aggregate amount of the fixed and determinable portion of the purchase obligation pursuant to our Completion Fluids & Products Division’s supply agreements was approximately $80.7 million, including $4.8 million for the remainder of 2021, $9.5 million per year from 2022 to 2025 and $37.9 million thereafter, extending through 2029.

Cautionary Statement for Purposes of Forward-Looking Statements
 
This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements in this Quarterly Report are identifiable by the use of the following words, the negative of such words, and other similar words: “anticipates”, “assumes”, “believes”, “budgets”, “could”, “estimates”, “expects”, “forecasts”, “goal”, “intends”, “may”, “might”, “plans”, “predicts”, “projects”, “schedules”, “seeks”, “should”, “targets”, “will”, and “would”.

    Management believes that these forward-looking statements are reasonable as and when made. However, caution should be taken not to place undue reliance on any such forward-looking statements because such statements speak only as of the date when made. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. In addition, forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our historical experience and our present expectations or projections. These risks
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and uncertainties include, but are not limited to, those described in Part II, “Item 1A. Risk Factors” and elsewhere in this report and in our Annual Report on Form 10-K for the year ended December 31, 2020, and those described from time to time in our future reports filed with the SEC.
Item 3. Quantitative and Qualitative Disclosures about Market Risk.
Not Applicable.
Item 4. Controls and Procedures.
 
Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended. Based on this evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of June 30, 2021, the end of the period covered by this quarterly report.

There were no changes in our internal control over financial reporting that occurred during the quarter ended June 30, 2021, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II
OTHER INFORMATION
Item 1. Legal Proceedings.
 
For information regarding litigation, see - Note 7 - “Commitments and Contingencies” in the Notes to Consolidated Financial Statements.
Item 1A. Risk Factors.

As of the date of this filing, TETRA and its operations continue to be subject to the risk factors previously disclosed in the “Risk Factors” sections contained in the 2020 Annual Report.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
 
(a) None.
 
(b) None.
 
(c) Purchases of Equity Securities by the Issuer and Affiliated Purchasers.
PeriodTotal Number
of Shares Purchased
Average
Price
Paid per Share
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(1)
Maximum Number (or Approximate Dollar Value) of Shares that May Yet be Purchased Under the Publicly Announced Plans or Programs(1)
April 1 – April 30, 20211,258 (2)$2.51 — $14,327,000 
May 1 – May 31, 2021988 (2)2.95 — 14,327,000 
June 1 – June 30, 2021— — — 14,327,000 
Total2,246   — $14,327,000 
(1)In January 2004, our Board of Directors authorized the repurchase of up to $20 million of our common stock. Purchases will be made from time to time in open market transactions at prevailing market prices. The repurchase program may continue until the authorized limit is reached, at which time the Board of Directors may review the option of increasing the authorized limit.
(2)Shares we received in connection with the exercise of certain employee stock options or the vesting of certain shares of employee restricted stock. These shares were not acquired pursuant to the stock repurchase program.
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Item 3. Defaults Upon Senior Securities.
 
None.
Item 4. Mine Safety Disclosures.
 
None.
Item 5. Other Information.
 
None.
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Item 6. Exhibits.
 
Exhibits:
*    Filed with this report.
**    Furnished with this report.
***    Management contract or compensatory plan or arrangement.
+    Attached as Exhibit 101 to this report are the following documents formatted in XBRL (Extensible Business Reporting Language): (i) Consolidated Statements of Operations for the three and six-month periods ended June 30, 2021 and 2020; (ii) Consolidated Statements of Comprehensive Income for the three and six-month periods ended June 30, 2021 and 2020; (iii) Consolidated Balance Sheets as of June 30, 2021 and December 31, 2020; (iv) Consolidated Statements of Equity for the six-month periods ended June 30, 2021 and 2020 ; (v) Consolidated Statements of Cash Flows for the six-month periods ended June 30, 2021 and 2020; and (vi) Notes to Consolidated Financial Statements for the six months ended June 30, 2021.
 

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SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
 
 
TETRA Technologies, Inc.
 
   
Date:August 2, 2021By:/s/Brady M. Murphy
  Brady M. Murphy
  President and Chief Executive Officer
Principal Executive Officer
   
Date:August 2, 2021By:/s/Elijio V. Serrano
  Elijio V. Serrano
  Senior Vice President and Chief Financial Officer
  Principal Financial Officer
   
Date:August 2, 2021By:/s/Richard D. O’Brien
  Richard D. O’Brien
  Vice President – Finance and Global Controller
  Principal Accounting Officer

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