What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-04-29 compared with 2024-10-29 · 166 added, 157 removed, 248 unchanged (57% of the section changed)

8 unchanged sentences

We are composed of two segments – Completion Fluids & Products Division and Water & Flowback Services Division.

Consolidated revenue for the first nine months of 2024 of $464.6 million decreased slightly compared to the prior year due to weaker activity in our Water & Flowback Services Division, partially offset by an increase in fluids shipments from our Completion Fluids & Products Division.

Completion Fluids & Products Division revenues for the first nine months of 2024 increased slightly compared to the first nine months of 2023, despite a 34.9% sequential decrease in revenues for the third quarter following traditionally strong seasonal European industrial chemicals volumes in the second quarter as well as three third-quarter hurricanes which shifted some of our planned Gulf of Mexico deepwater work into early 2025.

We were awarded a three-well TETRA CS Neptune fluids project in the Gulf of Mexico that is expected to begin in the first quarter of 2025.

Consolidated revenue for the first three months of 2025 of $157.1 million increased compared to the prior year due to strong results from our Completion Fluids & Products Division, which offset expected weaker United States onshore activity in our Water & Flowback Services Division.

Completion Fluids & Products Division revenues for the first three months of 2025 increased compared to both the last three months of 2024 and the first three months of 2024, led by deepwater Gulf of America as we completed the first of the three scheduled CS Neptune wells and made significant progress on the second well.

TETRA CS Neptune fluids projects are historically higher revenue and margin projects.

We also recently secured a significant multi-well, multi-year deep water completion fluids contract in Brazil.

Our Water & Flowback Services revenues decreased 4.5% compared to the first nine months of 2023 reflecting weaker onshore activity in the Unites States and lower offshore completions fluids activity, primarily in the Gulf of Mexico and Middle East.

Water & Flowback Services revenues increased 6.5% sequentially, driven by the sale of an early production facility expansion in Argentina, which partially offset weaker onshore activity.

Adjusted EBITDA margins remained stable at 14.6% for the third quarter of 2024 mainly as a result of the early production facility expansion sale.

Investments in technologies including BlueLinx automation, TETRA SandStorm sand filtration and TETRA Automated Drillout Systems Technology have allowed us to gain market share as the North America onshore market weakens.

We are committed to pursuing low-carbon energy initiatives that leverage our fluids and aqueous chemistry core competencies, our significant bromine and lithium assets and technologies, and our leading calcium chloride production capabilities.

In June 2023, we entered into the MOU with Saltwerx, an indirect wholly owned subsidiary of ExxonMobil Corporation, relating to a newly formed Evergreen Brine Unit (the “Evergreen Unit”) and potential bromine and lithium production from brine produced from the unit.

We and Saltwerx continue to evaluate the development of the Evergreen Unit, including the negotiation of the joint venture for the Evergreen Unit.

The extraction of lithium and bromine from these brine leases would likely require a significant amount of time and capital, which we are not able to estimate at this time.

We completed an initial preliminary economic assessment in early 2023 for a bromine extraction plant.

On January 8, 2024, we announced the completion of a technical resources report (the “Resources Report”) for our Evergreen Unit in Arkansas.

In August 2024, we published a definitive feasibility study with compelling economics for the production of bromine from our Evergreen Unit to meet the growing demands for oil and gas offshore completion fluids and the new market for the TETRA PureFlow+ electrolyte in the long duration energy storage market.

We believe that lithium prices will improve to levels that support increased supply investment.

We and Saltwerx continue to evaluate the development of the Evergreen Unit and are continuing to advance the engineering studies required to define the lithium project economics.

We are prioritizing our strategic initiatives on projects that can immediately impact our near-term results, focused on TETRA CS Neptune fluids in the Gulf of Mexico, TETRA PureFlow+ electrolyte shipments and further

advancing our water desalination pilot units that are expected to transition into long-duration contracts for commercial desalination plants.

The Completion Fluids & Products division also benefited from an early start to the seasonally strong calcium chloride business in Northern Europe in the first quarter, for which we expect to continue to benefit through the second quarter.

We also expect to begin the multi-year deep water completion fluids contract in Brazil during the second quarter.

Our Water & Flowback Services revenues decreased slightly compared to the last three months of 2024 and decreased 13.0% compared to the first three months of 2024, reflecting weaker onshore activity in the United States, as well as lower service revenues following the sale of early production facilities in Latin America in 2024.

Water & Flowback Services gross profit margins were relatively flat despite much lower customer activity levels as our cost control actions and continued focused on automation contributed to stable margins in a weaker environment.

We remain committed to pursuing low-carbon energy initiatives that leverage our completion fluids and aqueous chemistry core competencies, our significant bromine and lithium assets and technologies, and our leading calcium chloride production capabilities.

In August 2024, we published a definitive feasibility study and updated our technical resources report with respect to bromine from our Evergreen Brine Unit.

We have ongoing negotiations with various bromine providers for bridging supply agreements that, if and when finalized, will give us flexibility on the timing of a plant start-up, allowing us to accumulate additional cash from our existing base business.

These initiatives are expected to provide us the bromine supply volumes necessary for the growing deepwater market plus the growing long-duration battery requirements, while deferring investments in Arkansas or scaling up our bromine production at lower levels than previously anticipated.

If and when the bridging supply agreement is finalized, we will announce our revised Arkansas investment and timing plans.

We continue to advance our development efforts in Arkansas and anticipate this continue throughout the duration of 2025.

We are prioritizing our strategic initiatives on projects that can immediately impact our near-term results, focused on TETRA CS Neptune fluids in the Gulf of America, TETRA PureFlow+ electrolyte shipments and our recently announced TETRA Oasis Total Desalination Solution ("TDS"), an end-to-end water treatment and desalination solution for re-use and mineral extraction applications for produced water from oil and gas wells.

We are commencing a pilot project that is expected to begin in the first half of 2025 and includes a rangeland grass growth study in a greenhouse using TDS processed water.

Results of Operations

1 unchanged sentence

The analysis herein reflects the optional approach to discuss results of operations on a sequential-quarter basis, which we believe provides information that is most useful in assessing our quarterly results of operations.

Three months ended September 30, 2024 compared with three months ended June 30, 2024.

Three months ended March 31, 2025 compared with three months ended December 31, 2024.

Consolidated Comparisons

Three Months Ended Period to Period Change

September 30, June 30, $ Change % Change

March 31, December 31, $ Change % Change

(in thousands, except percentages)

12 unchanged sentences

Income before taxes and discontinued operations as a percentage of revenue

Provision for income taxes 4,744 4,839 (95) (2.0) %

Income (loss) before discontinued operations

Provision (benefit) for income taxes

1,037 (94,841) 95,878 (101.1) %

Net income before discontinued operations

4,049 102,233 (98,184) (96.0) %

Discontinued operations:

Loss from discontinued operations, net of taxes (5,830) — 5,830 100.0 %

Income from discontinued operations, net of taxes

— 490 490 100.0 %

4,049 102,723 (98,674) (96.1) %

Loss attributable to noncontrolling interests — 1 (1) 100.0 %

Net income (loss) attributable to TETRA stockholders

Net income attributable to TETRA stockholders

$ 4,049 $ 102,724 $ (98,675) (96.1) %

(1) Percent change is not meaningful

Consolidated revenues decreased between the current and previous quarters primarily due to lower activity for the Completion Fluids & Products division, primarily due to lower sales volumes following the traditionally strong Northern European industrial chemicals seasonal impact in the second quarter.

Overall completion fluids activity was lower in the third quarter as three hurricanes impacted the timing of deepwater projects, resulting in sequentially lower volumes in the Gulf of Mexico.

These decreases were slightly offset by higher revenues for our Water & Flowback Services division from the early production facility expansion sale.

Consolidated revenues increased between the current and previous quarters primarily due to higher activity for the Completion Fluids & Products division, driven by increased pricing and volume sales in the Northern European industrial chemicals market.

See Divisional Comparisons section below for a more detailed discussion of the change in our revenues.

Consolidated gross profit decreased primarily due to weaker activity levels from the Completion Fluids & Products Division.

Consolidated gross profit increased primarily due to stronger activity levels from the Completion Fluids & Products Division driven by the first CS Neptune well and an early start to the seasonal calcium chloride business in Northern Europe.

See Divisional Comparisons section below for additional discussion.

Consolidated other (income) expense, net, decreased compared to the prior quarter primarily due to a $2.1 million decrease in foreign exchange losses partially due to a $1.4 million out-of-period correction in the prior quarter for the remeasurement of a prepaid tax balance, and a $0.7 million net increase in unrealized gains on investments.

Consolidated provision for income tax was $4.7 million during the current quarter, compared to $4.8 million during the prior quarter.

Our consolidated effective tax rate for the three months ended September 30, 2024 was 62.6% due to a significant portion of income being generated in jurisdictions for which we were not able to utilize our net operating losses for which we had established valuation allowances.

Argentina being one of these jurisdictions,

the increase in the Argentinian taxes were significantly impacted by the sale of the early production facility expansion as well an inflation adjustment to Argentinian taxable income required to be made under local law.

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 and certain other non-U.S.

jurisdictions.

Loss from discontinued operations increased $5.8 million due to the accrual for decommissioning obligations associated with our former Offshore division recorded during the current quarter.

See Note 6 - “Commitments and Contingencies” in the Notes to Consolidated Financial Statements for additional information.

Consolidated interest expense, net decreased compared to the prior quarter primarily due to an increase in the interest expense capitalized for our Arkansas development.

Consolidated other (income) expense, net, changed compared to the prior quarter primarily due to a $7.8 million increase in foreign exchange losses, including recognition of $9.5 million cumulative currency translation adjustment loss associated with the dissolution of a former subsidiary in Canada, partially offset by increased foreign exchange gains in Brazil.

Consolidated other (income) expense, net also includes a $4.8 million net decrease in unrealized gains on investments.

Consolidated provision for income tax was $1.0 million expense during the current quarter, compared to $94.8 million benefit during the prior quarter.

The change in our tax provision compared to the prior quarter tax benefit was primarily due to the reversal of the valuation allowance related to our United States deferred tax assets (federal and state) during the prior quarter.

Our consolidated effective tax rate for the three months ended March 31, 2025 was 20.4%, which approximates our statutory tax rate in the United States.

Divisional Comparisons

1 unchanged sentence

Three Months Ended Period to Period Change

September 30, June 30, $ Change % Change

March 31, December 31, $ Change % Change

(in thousands, except percentages)

5 unchanged sentences

General and administrative expense as a percentage of revenue

Interest income, net

Interest (income) expense, net

(115) 633 748 (118.2) %

Other expense, net 159 122 37 30.3 %

Income before taxes and discontinued operations $ 19,119 $ 26,653 $ (7,534) (28.3) %

Income before taxes and discontinued operations as a percentage of revenue 29.4 % 26.6 %

Revenues for our Completion Fluids & Products Division decreased primarily due to weaker volumes for industrial chemical sales following the traditional seasonal uplift in Northern Europe in the prior quarter and lower completion fluids volumes as hurricanes in the Gulf of Mexico impacted the timing of deepwater projects, as well as lower sales in the Middle East as we transition from a term ending contract to a new two-year fluids award that will start in 2025.

Gross profit for our Completion Fluids & Products Division decreased compared to the prior quarter consistent with lower revenues.

Other (income) expense, net (719) 871 (1,590) (182.5) %

Net income before taxes and discontinued operations

$ 30,677 $ 17,332 $ 13,345 77.0 %

Net income before taxes and discontinued operations as a percentage of revenue

33.0 % 25.2 %

Revenues for our Completion Fluids & Products Division increased driven by completion of the first of the three scheduled CS Neptune wells.

We also benefited from an early start to the seasonally strong calcium chloride business in Northern Europe.

Gross profit for our Completion Fluids & Products Division increased compared to the prior quarter primarily due to the increase in revenues mentioned above.

Profit margins improved as CS Neptune fluids generate higher margins than other projects.

Our profitability in future periods will continue to be affected by the mix of our products and services, market demand for our products and services, and drilling and completions activity.

Completion Fluids & Products Division general and administrative expense decreased $0.9 million, primarily due to a $0.6 million reduction in compensation expense including short-term incentive compensation.

Other expense, net increased primarily due to a $0.5 million increase in unrealized losses from our investment in CarbonFree convertible note embedded option, partially offset by a $0.3 million decrease in foreign exchange losses and a $0.2 million increase in unrealized gains from our investment in Standard Lithium shares due to an increase in the share price.

Completion Fluids & Products Division general and administrative expense increased $0.7 million, primarily due to a $0.3 million increase in compensation expense including short-term incentive compensation and a $0.3 million increase in professional services fees.

Other expense, net increased primarily due to a $1.7 million increase in foreign exchange gain, primarily in Brazil.

Water & Flowback Services Division

Three Months Ended Period to Period Change

September 30, June 30, $ Change % Change

March 31, December 31, $ Change % Change

(in thousands, except percentages)

2 unchanged sentences

Gross profit as a percentage of revenue

13.3 % 13.5 %

General and administrative expense 5,735 4,583 1,152 25.1 %

General and administrative expense as a percentage of revenue

Interest (income) expense, net

Interest income, net

(7) (75) 68 (90.7) %

Other (income) expense, net 9,634 (275) 9,909 NM (1)

Income before taxes and discontinued operations $ 4,674 $ 3,156 $ 1,518 48.1 %

Income before taxes and discontinued operations as a percentage of revenue 6.1 % 4.4 %

Net income (loss) before taxes and discontinued operations

$ (8,888) $ 2,149 $ (11,037) (513.6) %

Net income (loss) before taxes and discontinued operations as a percentage of revenue

(13.9) % 3.3 %

(1) Percent change is not meaningful

Revenues for our Water & Flowback Services Division increased in the current quarter compared to the prior quarter, primarily due to the sale of an early production facility expansion in Argentina, partially offset by weaker activity in North America as completions activity continues to slow down.

Gross profit for our Water & Flowback Services Division increased compared to the previous quarter primarily due to the sale of the early production facility expansion, offsetting weaker United States onshore activity.

The Water & Flowback Services Division income before taxes and discontinued operations improved due to the higher gross profits described above, a $1.8 million decrease in foreign exchange losses primarily due to a $1.4 million out-of-period correction in the prior quarter for remeasurement of a prepaid tax balance, and a $0.2 million increase in unrealized gains from our investment in KMX Technologies.

These improvements were partially offset by a $1.1 million increase in general and administrative expense, primarily an increase in compensation expense, including of $0.2 million severance expense associated with headcount reductions, and a $0.3 million increase in allowance for credit losses.

Revenues for our Water & Flowback Services Division declined slightly compared to the prior quarter, primarily due to lower overall customer activity in the North America onshore business.

Gross profit for our Water & Flowback Services Division remained comparable to the previous quarter as our cost control actions and continued focused on automation contributed to stable margins in a weaker environment.

The Water & Flowback Services Division net loss before taxes and discontinued operations this quarter compared to a gain from the previous quarter is primarily due to recognition of a $9.5 million cumulative currency translation adjustment loss associated with the dissolution of a former subsidiary in Canada and a $1.2 million increase in general and administrative expense due to an increase in compensation expense.

Corporate Overhead

Three Months Ended Period to Period Change

September 30, June 30, $ Change % Change

March 31, December 31, $ Change % Change

(in thousands, except percentages)

Depreciation and amortization $ 94 $ 99 $ (5) (5.1) %

Impairments and other charges 109 — 109 100.0 %

General and administrative expense 11,716 12,529 (813) (6.5) %

1 unchanged sentence

Other (income) expense, net 47 (5,213) (5,260) NM (1)

Loss before taxes and discontinued operations $ (16,217) $ (17,330) $ (1,113) (6.4) %

Net loss before taxes and discontinued operations

$ (16,703) $ (12,089) $ 4,614 38.2 %

(1) Percent change is not meaningful

Corporate overhead loss before taxes and discontinued operations decreased compared to the prior quarter including a $0.7 million increase in unrealized gains related to unit price changes of our investment in Kodiak.

During the third quarter, we implemented headcount reductions reflecting the slowdown in onshore activity.

Nine months ended September 30, 2024 compared with nine months ended September 30, 2023.

Corporate overhead net loss before taxes and discontinued operations increased compared to the prior quarter is primarily due to a $4.7 million decrease in unrealized gains related to unit price changes of our investment in Kodiak, which we sold in January 2025.

Kodiak acquired CSI Compressco LP (“CSI Compressco”) in April 2024.

Three months ended March 31, 2025 compared with three months ended March 31, 2024.

Consolidated Comparisons

Nine Months Ended

September 30, Period to Period Change

Three Months Ended

March 31, Period to Period Change

2025 2024 $ Change % Change

4 unchanged sentences

27.3 % 20.6 %

Exploration and pre-development costs — 6,836 (6,836) 100.0 %

General and administrative expense 24,134 22,298 1,836 8.2 %

4 unchanged sentences

— 5,535 (5,535) 100.0 %

Other income, net

Other (income) expense, net

8,962 (3,978) (12,940) (325.3) %

Income before taxes and discontinued operations 21,350 35,330 (13,980) (39.6) %

Income before taxes and discontinued operations as a percentage of revenue 4.6 % 7.5 %

Net income before taxes

5,086 1,295 3,791 292.7 %

Net income before taxes as a percentage of revenue

Provision for income taxes

1,037 380 657 172.9 %

Income before discontinued operations 11,387 29,718 (18,331) (61.7) %

Discontinued operations:

Loss from discontinued operations, net of taxes

(5,830) (68) 5,762 NM (1)

Net income 5,557 29,650 (24,093) (81.3) %

Loss attributable to noncontrolling interests 3 25 (22) (88.0) %

Net income attributable to TETRA stockholders $ 4,049 $ 915 $ 3,134 342.5 %

(1) Percent change is not meaningful

Consolidated revenues decreased compared to the prior year due to weaker United States onshore activity from our Water & Flowback Services Division, partially offset by stronger activity from our Completion Fluids & Products Division.

Consolidated revenues increased compared to the prior year due to stronger activity from our Completion Fluids & Products Division partially offset by lower revenues from our Water & Flowback Services Division.

See Divisional Comparisons section below for a more detailed discussion of the change in our revenues.

Consolidated gross profit decreased in the current year primarily due to weaker activity and margin contraction from our Water & Flowback Services Division, slightly offset by stable European and North American fluids sales volumes and favorable pricing from our Completion Fluids & Products Division.

Consolidated exploration and pre-development costs decreased $6.8 million due to the capitalization of certain pre-development costs related to our leased acreage in Arkansas beginning in January 2024.

Consolidated general and administrative expenses decreased compared to the prior year due to a $6.4 million decrease in compensation expense primarily from lower incentive compensation and from headcount reductions.

Consolidated loss on debt extinguishment increased $5.5 million from non-cash unamortized finance costs expensed in connection with the repayment of our prior Term Credit Agreement in January 2024.

Consolidated other income, net, decreased in the current year compared to the prior year primarily due to a $6.7 million decrease in income from collaborative arrangements representing the portion of exploration and pre-development costs that were reimbursable by Saltwerx included in other income, net prior to capitalization of net pre-development costs beginning in January 2024.

In addition, a $2.6 million increase in foreign exchange loss including the $1.4 million out-of-period correction in the second quarter of 2024 for remeasurement of a prepaid tax balance, was partially offset by $3.7 million increase in net unrealized gains on investments.

Consolidated provision for income taxes was $10.0 million during the current year, compared to $5.6 million during the prior year.

Our consolidated effective tax rate for the current year is 46.7%, compared to 15.9% during

the prior year.

Our effective tax rate increase was primarily the result of a significant portion of income generated in jurisdictions, mainly Argentina, for which we were not able to utilize net operating losses for which we had established valuation allowances.

The increase in the Argentinian taxes were significantly impacted by the sale of the early production facility expansion as well an inflation adjustment to Argentinian taxable income required under local law to be made.

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.

Loss from discontinued operations increased $5.8 million primarily due to the accrual for decommissioning obligations associated with our former Offshore division recorded during the current quarter.

See Note 6 - “Commitments and Contingencies” in the Notes to Consolidated Financial Statements for additional information.

Consolidated gross profit increased in the current year primarily due to strong margins from our Completion Fluids & Products and stable margins from our Water & Flowback Services Divisions.

Consolidated general and administrative expenses increased compared to the prior year due to higher professional services and other expenses.

Interest expense, net decreased $1.2 million due to an increase in the interest expense capitalized for our Arkansas development as well as lower interest rates on our Term Credit Agreement.

Consolidated loss on debt extinguishment decreased $5.5 million from non-cash unamortized finance costs expensed in connection with the repayment of our prior Term Credit Agreement in January 2024.

Consolidated other expense, net, changed compared to the prior year primarily due to a $9.0 million increase in foreign exchange loss, including recognition of the cumulative currency translation adjustment loss associated with the dissolution of a former subsidiary in Canada, and a $2.5 million decrease in net unrealized gain on investments.

Consolidated provision for income taxes was $1.0 million expense during the current year, compared to $0.4 million expense during the prior year.

Our consolidated effective tax rate for the current year is 20.4%, compared to 29.3% during the prior year.

Our effective tax rate for the current year approximates our statutory tax rate in the United States.

Divisional Comparisons

Completion Fluids & Products Division

Nine Months Ended

September 30, Period to Period Change

Three Months Ended

March 31, Period to Period Change

2025 2024 $ Change % Change

4 unchanged sentences

39.3 % 34.2 %

Exploration and pre-development costs — 6,836 (6,836) (100.0) %

General and administrative expense 6,683 6,693 (10) (0.1) %

2 unchanged sentences

Other (income) expense, net (719) 215 934 NM (1)

Income before taxes and discontinued operations $ 65,564 $ 67,330 $ (1,766) (2.6) %

Income before taxes and discontinued operations as a percentage of revenue 27.0 % 28.0 %

Net income before taxes $ 30,677 $ 19,792 $ 10,885 55.0 %

Net income before taxes as a percentage of revenue

33.0 % 25.6 %

(1) Percent change is not meaningful

Revenues for our Completion Fluids & Products Division increased slightly compared to the prior year primarily due to the strength of industrial chemical sales activity and favorable pricing.

Gross profit for our Completion Fluids & Products Division decreased compared to the prior year due to an unfavorable mix of fluid sales.

Revenues for our Completion Fluids & Products Division increased primarily due to completion of the first of the three scheduled CS Neptune wells.

We also benefited from an early start to the seasonally strong calcium chloride business in Northern Europe.

Gross profit for our Completion Fluids & Products Division increased compared to the prior year due to higher revenues.

Profit margins improved as CS Neptune fluids generate higher margins than other projects.

Our profitability in future periods will continue to be affected by the timing of and the mix of our products and services, market demand for our products and services, and drilling and completions activity.

Consolidated exploration and pre-development costs decreased $6.8 million due to the capitalization of costs beginning in January 2024 following project developments, including the completion of a technical resources report, compared to expensing of costs associated with the front-end engineering and design study and appraisal costs associated with the activity in the prior year.

Income before taxes and discontinued operations for our Completion Fluids & Products Division decreased compared to the prior year driven by lower gross profit and a $6.7 million decrease in income from collaborative arrangements representing the portion of exploration and pre-development costs related to our Arkansas development that were reimbursable by Saltwerx and included in other income, net prior to capitalization of net pre-development costs beginning in January 2024.

Other (income) expense, net also decreased $1.1 million from lower cash and shares received from our arrangement with Standard Lithium and $0.8 million from increased unrealized losses from our CarbonFree convertible note embedded option.

These changes were partially offset by a $1.8 million decrease in general and administrative expense from lower compensation expense, professional services and provision for credit losses on trade accounts receivable, and a $0.4 million decrease in foreign exchange losses.

Net income before taxes for our Completion Fluids & Products Division increased compared to the prior year driven by higher gross profit.

Other (income) expense, net improved, primarily from an $0.8 million increase in foreign exchange gains, primarily in Brazil.

Water & Flowback Services Division

Nine Months Ended

September 30, Period to Period Change

Three Months Ended

March 31, Period to Period Change

2025 2024 $ Change % Change

5 unchanged sentences

General and administrative expense as a percentage of revenue

Interest expense, net

Interest (income) expense, net

(7) 76 (83) (109.2)%

Other (income) expense, net 9,634 (548) (10,182) NM (1)

Income before taxes and discontinued operations $ 8,551 $ 22,869 $ (14,318) (62.6) %

Income before taxes and discontinued operations as a percentage of revenue 3.8 % 9.8 %

Net income (loss) before taxes

$ (8,888) $ 721 $ (9,609) (1,332.7) %

Net income (loss) before taxes as a percentage of revenue

(13.9) % 1.0 %

(1) Percent change is not meaningful

Revenues for our Water & Flowback Services Division decreased primarily for water management due to lower United States drilling and completion activity, partially offset by revenue from the sale of the early production facility expansion in Argentina during the third quarter of 2024.

Gross profit for our Water & Flowback Services Division decreased from the prior year primarily due to lower revenues resulting from the decreased United States onshore activity levels described above and operating cost inflation.

Income before taxes and discontinued operations for our Water & Flowback Services Division decreased primarily due to a decline in the gross profit described above and a $2.6 million increase in foreign exchange losses including the $1.4 million out-of-period correction in the second quarter of 2024 for remeasurement of a prepaid tax balance, partially offset by a $0.2 million increase in unrealized gains from our investment in KMX Technologies.

Revenues for our Water & Flowback Services Division decreased primarily from lower United States drilling and completion activity.

Gross profit for our Water & Flowback Services Division increased slightly from the prior year despite the decrease in revenues primarily due to continuous efforts to increase margins through streamlining operations and automation.

Net income (loss) before taxes for our Water & Flowback Services Division decreased primarily due to recognition of the $9.5 million cumulative currency translation adjustment loss associated with the dissolution of a former subsidiary in Canada, as well as a $1.2 million increase in general and administrative expense due to higher compensation expense.

Corporate Overhead

Nine Months Ended

September 30, Period to Period Change

Three Months Ended

March 31, Period to Period Change

2025 2024 $ Change % Change

1 unchanged sentence

Depreciation and amortization $ 94 $ 81 $ 13 16.0 %

Impairments and other charges 109 777 (668) (86.0) %

General and administrative expense 11,716 11,102 614 5.5 %

2 unchanged sentences

— 5,535 (5,535) 100.0 %

Other income, net (4,147) (446) 3,701 829.8 %

Loss before taxes and discontinued operations $ (52,765) $ (54,869) $ (2,104) (3.8) %

Corporate overhead loss before taxes and discontinued operations decreased primarily due to a $4.3 million increase in unrealized gains related to unit price changes of our investment in Kodiak, which acquired CSI Compressco in April 2024, and a $4.6 million decrease in general and administrative expenses primarily from lower variable compensation costs, partially offset by a $5.5 million loss associated with the early extinguishment of our prior term credit agreement in January 2024 and a $1.4 million increase in interest expense, net due to an increase in borrowing on our Term Credit Agreement.

Other (income) expense, net 47 (3,645) (3,692) (101.3) %

Net loss before taxes

$ (16,703) $ (19,218) $ (2,515) (13.1) %

Corporate overhead net loss before taxes decreased primarily due to a $5.5 million loss associated with the early extinguishment of our prior term credit agreement in January 2024 and a $3.0 million decrease in unrealized gains related to share price changes of our investment in Kodiak and a $1.3 million decrease in interest expense, net due to an increase in the interest expense capitalized for our Arkansas development as well as lower interest rates on our Term Credit Agreement, partially offset by a $0.6 million increase in general and administrative expenses primarily from an increase in professional services.

Non-GAAP Financial Measures

1 unchanged sentence

Adjusted EBITDA .

We define Adjusted EBITDA as net income (loss) before taxes and discontinued operations, excluding impairments, exploration and pre-development costs, certain special, non-recurring or other charges (or credits), including loss on debt extinguishment, interest, depreciation and amortization, income from collaborative arrangement and certain non-cash items such as equity-based compensation expense.

We define Adjusted EBITDA as net income (loss) before taxes and discontinued operations, excluding impairments, certain special, non-recurring or other charges (or credits), including loss on debt extinguishment, interest, depreciation and amortization and certain non-cash items such as equity-based compensation expense and foreign currency translation adjustments not associated with current operations.

The most directly comparable GAAP financial measure is net income (loss) before taxes and discontinued operations.

Exploration and pre-development costs represent expenditures incurred to evaluate potential future development of TETRA’s lithium and bromine properties in Arkansas.

Such costs include exploratory drilling and associated engineering studies.

Income from collaborative arrangement represents the portion of exploration and pre-development costs that are reimbursable by our Evergreen Unit partner.

We began capitalizing certain exploration and pre-development costs in January 2024 and therefore these costs are only excluded to the extent they were expensed.

Exploration and pre-development costs and the associated income from collaborative arrangement were excluded from Adjusted EBITDA in prior periods because they did not relate to the Company’s current business operations.

Adjustments to long-term incentives represent adjustments to valuation of long-term cash incentive compensation awards that are related to prior years.

6 unchanged sentences

Three Months Ended

September 30, 2024

March 31, 2025

Completion Fluids & Products Water & Flowback Services Corporate SG&A Corporate Other

1 unchanged sentence

Revenue $ 93,018 $ 64,122 $ — $ — $ 157,140

Net income (loss) before taxes and discontinued operations 19,119 4,674 (10,779) (5,438) 7,576

Net income (loss) before taxes

30,677 (8,888) (11,716) (4,987) 5,086

Cost of product sales and services adjustment

477 — — — 477

Impairments and other charges — 518 — — 518

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— 302 784 — 1,086

Non-cash cumulative foreign currency translation adjustment loss from dissolution of Canadian subsidiary

— 9,516 — — 9,516

Interest (income) expense, net (115) (7) — 4,846 4,724

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Three Months Ended

June 30, 2024

December 31, 2024

Completion Fluids & Products Water & Flowback Services Corporate SG&A Corporate Other

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Net income (loss) before taxes and discontinued operations 17,331 2,149 (12,529) 441 7,392

Cost of product sales and services adjustment

(1,776) — — — (1,776)

Former CEO stock appreciation right expense — — 103 — 103

Transaction, restructuring and other expenses

Unusual foreign exchange loss

56 146 650 — 852

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Adjusted EBITDA as % of revenue 27.3 % 13.6 % 17.0 %

Three Months Ended

March 31, 2024

Completion Fluids & Products Water & Flowback Services Corporate SG&A Corporate Other

(in thousands, except percentages)

Revenue $ 77,282 $ 73,690 $ — $ — $ 150,972

Net income (loss) before taxes

19,792 721 (11,101) (8,117) 1,295

Former CEO stock appreciation right credit

— — (186) — (186)

Transaction, restructuring and other (income) expenses

(159) — 24 — (135)

Loss on debt extinguishment

— — — 5,535 5,535

Interest (income) expense, net (269) 76 — 6,145 5,952

Depreciation, amortization and accretion

2,387 6,288 — 81 8,756

Equity-based compensation expense — 1,623 — 1,623

Adjusted EBITDA $ 21,751 $ 7,085 $ (9,640) $ 3,644 $ 22,840

Adjusted EBITDA as % of revenue 28.1 % 9.6 % 15.1 %

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.

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.

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.

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We believe that our capital structure allows us to meet our financial obligations on both a short-term and long-term basis.

Our liquidity at the end of the third quarter was $196.5 million.

Our liquidity at the end of the first quarter was $208.1 million.

Liquidity is defined as unrestricted cash plus availability of $75 million under the delayed draw from our Term Credit Agreement and availability under our credit agreements.

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Our consolidated sources and uses of cash are as follows:

Nine Months Ended

September 30,

Three Months Ended

(in thousands)

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Operating Activities

Consolidated cash flows provided by operating activities decreased compared to the first nine months of 2023 primarily due to a decrease in gross profit and working capital changes.

Consolidated cash flows provided by operating activities increased compared to the first three months of 2024 primarily due to an increase in gross profit and working capital changes.

Investing Activities

Total cash capital expenditures during the first nine months of 2024 were $45.8 million, which reflects increased expenditures for advancement of our Arkansas brine resource development and additions to accommodate industry-wide activity.

Our Completion Fluids & Products Division spent $29.3 million on capital expenditures, including $22.6 million for our Arkansas brine resource development, and additional investments to support projected activity levels in the United States and Europe.

Total cash capital expenditures during the first three months of 2025 were $18.0 million, which reflects increased expenditures for advancement of our Arkansas brine resource development and additions to accommodate industry-wide activity.

Our Completion Fluids & Products Division spent $13.8 million on capital expenditures, including $11.2 million for our Arkansas brine resource development.

Our Water & Flowback Services Division spent $4.1 million on capital expenditures to maintain, automate and upgrade its water management and flowback equipment fleet.

Water and Flowback Services Division capital expenditures also included expenditures related to expansion of early production facilities in Argentina.

Investing activities during the first nine months of 2023 also included $2.9 million of proceeds for insurance settlements from damage to our Lake Charles facility in 2020.

Historically, a significant majority of our planned capital expenditures have been related to identified opportunities to grow and expand our existing businesses.

We are also focused on enhancing shareholder value by capitalizing on our key mineral assets, brine mineral extraction expertise, and aqueous chemistry competency to expand our offerings into the low carbon energy markets.

However, we continue to review all capital expenditure plans carefully in an effort to conserve cash.

As of September 30, 2024, we have commitments of $5.6 million related to long-lead infrastructure for our Completion Fluids & Products Division’s planned bromine plant in Arkansas.

We currently have no other significant long-term capital expenditure commitments.

If the forecasted demand for our products and services increases or decreases, the amount of planned expenditures on growth and expansion may be adjusted.

Lithium and Bromine Resources

Investing activities during the first three months of 2025 also included $19.0 million of proceeds from the sale of our Kodiak shares, net of broker commissions and fees.

We have rights to the brine underlying our approximately 40,000 gross acres of brine leases in the Smackover Formation in Southwest Arkansas, including rights to the bromine and lithium contained in the brine.

Additional information on these inferred, indicated and measured resources is described in Part I, “Item 2.

Additional information on these resources is described in Part I, “Item 2.

Properties” in our 2024 Annual Report .

The extraction of lithium and bromine from these brine leases and the work needed to undertake these operations would likely require a significant amount of time and capital.

We believe that lithium prices will improve to levels that support increased supply investment.

We and Saltwerx continue to evaluate the development of the Evergreen Unit

and are continuing to advance the engineering studies required to define the lithium project economics, including the negotiation of the joint venture for the Evergreen Unit.

The extraction of lithium and bromine from these brine leases will likely require a significant amount of time and capital, which are subject to further analysis and consideration.

In August 2024, we published a definitive feasibility study and updated our technical resources report with respect to bromine from our Evergreen Brine Unit.

These initiatives are expected to provide us the bromine supply volumes necessary for the growing deepwater market plus the growing long-duration battery storage requirements, while deferring investments in Arkansas or scaling up our bromine production at lower levels than previously anticipated.

If and when the bridging supply agreement is finalized, we will announce our revised Arkansas investment and timing plans.

Historically, a significant majority of our planned capital expenditures have been related to identified opportunities to grow and expand our existing businesses.

We are also focused on enhancing shareholder value by capitalizing on our key mineral assets, brine mineral extraction expertise, and deep chemistry competency to expand our offerings into the low carbon energy markets.

However, we continue to review all capital expenditure plans carefully in an effort to conserve cash.

If the forecasted demand for our products and services increases or

decreases, or we proceed with development of brine resources in Arkansas, the amount of planned expenditures on growth and expansion may be adjusted.

Financing Activities

Our financing activities for the first nine months of 2024 include $184.7 million of borrowings primarily under our new Term Credit Agreement, net of discount, and $163.5 million of repayments primarily for our prior term credit agreement, and $6.0 million of debt issuance costs associated with our new term loan in January 2024 and the ABL Amendment in May 2024, as well as $1.1 million of capital lease payments associated with equipment leased primarily for the early production facilities in Argentina.

Our financing activities for the first three months of 2025 include $0.9 million of capital lease payments associated with equipment leased primarily for the early production facilities in Argentina and equipment leases in the United States.

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.

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In addition to our credit facilities, we fund our short-term liquidity requirements from cash generated by our operations and from short-term vendor financing.

In addition, as of September 30, 2024, the market value of our investments in Kodiak and Standard Lithium were $13.1 million and $1.3 million, respectively, with no holding restrictions on our ability to monetize our interests.

In addition, as of March 31, 2025, the market value of our investment in Standard Lithium was $1.0 million, with no holding restrictions on our ability to monetize our interests.

In addition, we are party to agreements in which Standard Lithium has the right to explore for, and an option to acquire the right to produce and extract lithium in our Arkansas leases as well as additional potential resources, in the Mojave region of California.

Standard Lithium exercised its option with respect to our Arkansas leases on October 6, 2023.

We also hold an investment in a convertible note and common units issued by CarbonFree valued at $6.8 million as of September 30, 2024.

TETRA is entitled to a 2.5% royalty on gross revenues from the lithium that Standard Lithium produces from the TETRA option acreage.

In addition, TETRA maintains the rights to the bromine and other minerals extracted from the brine produced by Standard Lithium in their approved unit.

In May 2022, we filed a universal shelf Registration Statement on Form S-3 with the SEC, which was declared effective by the SEC.

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An increase in unpaid aged receivables would also negatively affect our borrowing availability under the ABL Credit Agreement.

As of September 30, 2024, 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.

As of March 31, 2025, 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

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For information on our credit agreements, see Note 5 - “Long-Term Debt and Other Borrowings” in the Notes to Consolidated Financial Statements.

We have operating leases for some of our transportation equipment, office space, warehouse space, operating locations, and machinery and equipment.

We have operating leases for some of our transportation equipment, office space, warehouse space, operating locations and machinery and equipment, as well as a sales-type lease and subleases for certain facilities.

We have finance leases for certain facility storage tanks and equipment rentals.

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global or national health concerns, including the outbreak of pandemics or epidemics such as the coronavirus (COVID-19);

acts of terrorism, war or political or civil unrest in the United States or elsewhere, including the current conflict between Russia and Ukraine, the conflict in the Israel-Gaza region and continued hostilities in the Middle East, maritime piracy attacks, changes in laws and regulations, or the imposition of economic or trade sanctions affecting international commercial transactions;

and statements regarding our beliefs, expectations, plans, goals, future events and performance and other statements that are not purely historical.

These statements include statements concerning the mineral resource estimates and reserve estimates of lithium and bromine, the potential extraction of lithium and bromine from the leased acreage, the development of the assets including construction of lithium and bromine extraction plants, the economic viability thereof, the demand for such resources, and the timing and cost of such activities;

These statements include statements concerning the mineral resource and reserve estimates of lithium and bromine, the potential extraction of lithium, bromine and other minerals from our Evergreen Unit and other leased acreage, the ability to obtain local governmental and regulatory approvals, the development of the assets including construction of lithium and/or bromine extraction plants, the economic viability thereof, the demand for such resources, and the timing and cost of such activities, and the expected revenues including any royalties, profits and returns from such activities;

the timing and success of our bromine production wells and the construction of our bromine processing facility and related engineering activities;

the accuracy of our resources report, feasibility study and economic assessment regarding our lithium and bromine acreage;

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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, forecasts or projections.

These risks and uncertainties include, but are not limited to, those described in Part II, “Item 1A.

Factors which may cause actual results to differ materially from current expectations include, but are not limited to:

changes in general economic conditions;

opportunity risks, such as mineral extraction, demand therefor, or realizing industrial and other benefits expected from bromine processing;

our ability to develop a bromine processing facility and risks inherent in the construction such facility;

equipment supply, equipment defects and/or our ability to timely obtain equipment components;

competition from existing or new competitors;

risks associated with changes in laws and regulations, or the imposition of economic or trade sanctions affecting international commercial transactions, including legislative, regulatory and policy changes, such as unexpected changes in tariffs, trade barriers, price and exchange controls;

and the other factors described in Part II, “Item 1A.

Risk Factors” and elsewhere in this report and in our 202 4 Annual Report , and those described from time to time in our future reports filed with the SEC.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis