TETRA TECHNOLOGIES INC 10-Q

Item 1. Financial Statements. TETRA Technologies, Inc. and Subsidiaries Consolidated Statements of Operations (In Thousands, Except Per Share Amounts) (Unaudited) Three Months Ended March 31, 2025 2024 Revenues: Product sales $ 88,169 $ 73,337 Services 68,971 77,635 Total revenues 157,140 150,972 Cost of revenues: Cost of product sales 49,765 45,406 Cost of services 54,800 65,708 Depreciation, amortization and accretion 9,151 8,756 Impairments and other charges 518 — Total cost of revenues 114,234 119,870 Gross profit 42,906 31,102 General and administrative expense 24,134 22,298 Interest expense, net 4,724 5,952 Loss on debt extinguishment — 5,535 Other (income) expense, net 8,962 ( 3,978 ) Net income before taxes 5,086 1,295 Provision for income taxes 1,037 380 Net income attributable to TETRA stockholders $ 4,049 $ 915 Basic net income per common share: Net income attributable to TETRA stockholders $ 0.03 $ 0.01 Weighted average basic shares outstanding 132,350 130,453 Diluted net income per common share: Net income attributable to TETRA stockholders $ 0.03 $ 0.01 Weighted average diluted shares outstanding 133,757 132,123 See Notes to Consolidated Financial Statements 1 TETRA Technologies, Inc. and Subsidiaries Consolidated Statements of Comprehensive Income (Loss) (In Thousands) (Unaudited) Three Months Ended March 31, 2025 2024 Net income $ 4,049 $ 915 Foreign currency translation adjustment from continuing operations, net of taxes of $ 0 in 2025 and 2024 3,876 ( 1,634 ) Reclassification of non-cash cumulative foreign currency translation adjustment loss to net income from dissolution of Canadian subsidiary 9,516 — Unrealized gain on investment 281 237 Comprehensive income (loss) attributable to TETRA stockholders $ 17,722 $ ( 482 ) See Notes to Consolidated Financial Statements 2 TETRA Technologies, Inc. and Subsidiaries Consolidated Balance Sheets (In Thousands) March 31, 2025 December 31, 2024 (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 41,000 $ 36,987 Restricted cash 50 221 Trade accounts receivable, net of allowances of $ 537 in 2025 and $ 626 in 2024 120,902 104,813 Inventories 106,486 101,697 Prepaid expenses and other current assets 22,616 25,910 Total current assets 291,054 269,628 Property, plant and equipment: Land and building 24,671 24,475 Machinery and equipment 327,680 323,044 Automobiles and trucks 10,540 10,325 Chemical plants 72,198 69,815 Construction in progress 41,423 34,910 Total property, plant and equipment 476,512 462,569 Less accumulated depreciation ( 327,237 ) ( 320,409 ) Net property, plant and equipment 149,275 142,160 Other assets: Patents, trademarks and other intangible assets, net of accumulated amortization of $ 56,745 in 2025 and $ 55,421 in 2024 24,072 24,923 Deferred tax assets, net 97,181 98,149 Operating lease right-of-use assets 30,584 29,797 Investments 9,686 28,159 Other assets 12,233 12,379 Total other assets 173,756 193,407 Total assets $ 614,085 $ 605,195 See Notes to Consolidated Financial Statements 3 TETRA Technologies, Inc. and Subsidiaries Consolidated Balance Sheets (In Thousands, Except Share Amounts) March 31, 2025 December 31, 2024 (Unaudited) LIABILITIES AND EQUITY Current liabilities: Trade accounts payable $ 41,042 $ 43,103 Compensation and employee benefits 19,594 23,022 Operating lease liabilities, current portion 9,325 8,861 Accrued taxes 10,695 12,493 Accrued liabilities and other 27,886 30,040 Current liabilities associated with discontinued operations 5,830 5,830 Total current liabilities 114,372 123,349 Long-term debt, net 180,095 179,696 Operating lease liabilities 25,291 25,041 Asset retirement obligations 15,082 14,786 Deferred income taxes 3,849 4,912 Other liabilities 3,653 4,104 Total long-term liabilities 227,970 228,539 Commitments and contingencies (Note 6) Equity: TETRA stockholders’ equity: Common stock, par value 0.01 per share; 250,000,000 shares authorized at March 31, 2025 and December 31, 2024; 136,207,612 shares issued at March 31, 2025 and 134,951,081 shares issued at December 31, 2024 1,362 1,350 Additional paid-in capital 493,424 492,722 Treasury stock, at cost; 3,138,675 shares held at March 31, 2025 and December 31, 2024 ( 19,957 ) ( 19,957 ) Accumulated other comprehensive loss ( 37,449 ) ( 51,122 ) Retained deficit ( 164,376 ) ( 168,425 ) Total TETRA stockholders’ equity 273,004 254,568 Noncontrolling interests ( 1,261 ) ( 1,261 ) Total equity 271,743 253,307 Total liabilities and equity $ 614,085 $ 605,195 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 Unrealized Gain (Loss) on Investment Balance at December 31, 2024 $ 1,350 $ 492,722 $ ( 19,957 ) $ ( 52,957 ) $ 1,835 $ ( 168,425 ) $ ( 1,261 ) $ 253,307 Net income for first quarter 2025 — — — — — 4,049 — 4,049 Reclassification of non-cash cumulative foreign currency translation adjustment loss to net income from dissolution of Canadian subsidiary — — — 9,516 — — — 9,516 Translation adjustment, net of taxes of $ 0 — — — 3,876 — — — 3,876 Other comprehensive income — — — — 281 — — 281 Comprehensive income 17,722 Equity-based compensation — 1,860 — — — — — 1,860 Other 12 ( 1,158 ) — — — — — ( 1,146 ) Balance at March 31, 2025 $ 1,362 $ 493,424 $ ( 19,957 ) $ ( 39,565 ) $ 2,116 $ ( 164,376 ) $ ( 1,261 ) $ 271,743 Common Stock Par Value Additional Paid-In Capital Treasury Stock Accumulated Other Comprehensive Income (Loss) Retained Deficit Noncontrolling Interest Total Equity Currency Translation Unrealized Gain (Loss) on Investment Balance at December 31, 2023 $ 1,332 $ 489,156 $ ( 19,957 ) $ ( 45,886 ) $ 655 $ ( 276,709 ) $ ( 1,257 ) $ 147,334 Net income for first quarter 2024 — — — — — 915 — 915 Translation adjustment, net of taxes of $ 0 — — — ( 1,634 ) — — — ( 1,634 ) Other comprehensive income — — — — 237 — — 237 Comprehensive loss ( 482 ) Equity-based compensation — 1,623 — — — — — 1,623 Other 11 ( 2,339 ) — — — — — ( 2,328 ) Balance at March 31, 2024 $ 1,343 $ 488,440 $ ( 19,957 ) $ ( 47,520 ) $ 892 $ ( 275,794 ) $ ( 1,257 ) $ 146,147 See Notes to Consolidated Financial Statements 5 TETRA Technologies, Inc. and Subsidiaries Consolidated Statements of Cash Flows (In Thousands, Unaudited) Three Months Ended March 31, 2025 2024 Operating activities: Net income $ 4,049 $ 915 Reconciliation of net income to net cash provided by (used in) operating activities: Depreciation, amortization and accretion 9,151 8,755 Impairments and other charges 518 — Gain on investments ( 257 ) ( 2,795 ) Equity-based compensation expense 1,860 1,623 Recovery of credit losses ( 85 ) ( 115 ) Amortization and expense of financing costs 495 380 Loss on debt extinguishment — 5,535 Gain on sale of assets ( 113 ) ( 29 ) Non-cash cumulative foreign currency translation adjustment loss from dissolution of Canadian subsidiary 9,516 — Other non-cash credits ( 128 ) ( 553 ) Changes in operating assets and liabilities: Accounts receivable ( 15,584 ) ( 19,605 ) Inventories ( 2,663 ) 1,542 Prepaid expenses and other current assets 6,158 ( 3,918 ) Trade accounts payable and accrued expenses ( 9,277 ) ( 5,577 ) Other 295 26 Net cash provided by (used in) operating activities 3,935 ( 13,816 ) Investing activities: Purchases of property, plant and equipment, net ( 17,956 ) ( 15,827 ) Proceeds from sale of investments 19,011 — Proceeds from sale of property, plant and equipment 182 251 Other investing activities 108 ( 172 ) Net cash provided by (used in) investing activities 1,345 ( 15,748 ) Financing activities: Proceeds from credit agreements and long-term debt 96 184,456 Principal payments on credit agreements and long-term debt ( 96 ) ( 163,215 ) Payments on financing lease obligations ( 931 ) ( 277 ) Debt issuance costs — ( 5,277 ) Shares withheld for taxes on equity-based compensation ( 1,158 ) ( 2,339 ) Net cash provided by (used in) financing activities ( 2,089 ) 13,348 Effect of exchange rate changes on cash 651 ( 330 ) Increase (decrease) in cash and cash equivalents 3,842 ( 16,546 ) Cash, cash equivalents and restricted cash at beginning of period 37,208 52,485 Cash, cash equivalents and restricted cash at end of period $ 41,050 $ 35,939 Reconciliation of cash, cash equivalents and restricted cash to the consolidated balance sheets Cash and cash equivalents at end of period $ 41,000 $ 35,939 Restricted cash at end of period 50 — Total cash, cash equivalents and restricted cash at end of period shown in the consolidated statements of cash flows $ 41,050 $ 35,939 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 an energy services and solutions company with operations on six continents focused on developing environmentally conscious services and solutions that help make people's lives better. In addition to providing products and services to the oil and gas industry and calcium chloride for diverse applications, TETRA is expanding into the low-carbon energy market with chemistry expertise, key mineral acreage, and global infrastructure, helping to meet the demand for sustainable energy in the twenty-first century. We were incorporated in Delaware in 1981. Our products and services are delivered through two reporting segments – Completion Fluids & Products Division and Water & Flowback Services Division. Our Completion Fluids & Products Division manufactures and markets clear brine fluids (“CBFs”), additives, and associated products and services to the oil and gas industry for use in well drilling, completion, and workover operations in the United States and in certain countries in Latin America, Europe, Asia, the Middle East, and Africa. The Division also markets liquid and dry calcium chloride products manufactured at its production facilities or purchased from third-party suppliers to a variety of markets outside the energy industry. Calcium chloride is used in the oil and gas industry, and also has broad industrial applications to the agricultural, road, food and beverage, and lithium production markets. Our Completion Fluids & Products Division also markets TETRA PureFlow, an ultra-pure zinc bromide, as well as TETRA PureFlow Plus, an ultra-pure zinc bromide/zinc chloride blend, to battery technology companies. Our Water & Flowback Services Division provides onshore oil and gas operators with comprehensive water management services. The Division also provides frac flowback, production well testing, and other associated services in many of the major oil and gas producing regions in the United States, as well as in oil and gas basins in certain countries in Latin America, Europe, and the Middle East. We are also developing and pilot testing technologies to treat and desalinate produced water from oil wells for beneficial reuse, including surface discharge. Unless the context requires otherwise, when we refer to “we,” “us,” and “our,” we are describing TETRA Technologies, Inc. and its subsidiaries on a consolidated basis. Presentation Our unaudited consolidated financial statements include the accounts of our wholly owned or controlled 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 March 31, 2025 are not necessarily indicative of results that may be expected for the twelve months ended December 31, 2025. 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, 2024 and notes thereto included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 25, 2025 (the “ 202 4 Annual Report ”). Discontinued Operations In early 2018, we closed a series of related transactions that resulted in the disposition of our former Offshore segment. Our former Offshore segment is reported as discontinued operations for all periods presented. We may be required to satisfy certain decommissioning liabilities under third-party indemnity agreements and corporate guarantees for which costs may be significant. During the three months ended September 30, 2024, we accrued $ 5.8 million of decommissioning expense and liability associated with our former Offshore segment for which costs might be above the value of surety bonds on properties previously disposed. See Note 6 - “Commitments and Contingencies” for additional discussion of contingencies related to discontinued operations. 7 Significant Accounting Policies Our significant accounting policies are described in the notes to our consolidated financial statements for the year ended December 31, 2024 included in our 202 4 Annual Report . Other than reporting restricted cash as described below, there have been no significant changes in our accounting policies or the application thereof during the first quarter of 2025. Out-of-Period Correction During the three months ended March 31, 2025, we recorded an adjustment to our deferred tax liability related to a correction to our 2024 tax provision. This adjustment increased income tax benefit by $ 1.2 million and increased net income per share attributable to TETRA stockholders by $ 0.01 in the consolidated statement of operations for the three months ended March 31, 2025. The Company assessed the impact of this out-of-period adjustment and concluded that it was not material to the financial statements previously issued for any interim or annual period, and the adjustment during the quarter ended March 31, 2025 is not expected to be material to the annual financial statements for 2025. Restricted Cash Restricted cash is classified as a current asset when it is expected to be repaid or settled in the next twelve-month period. In connection with the May 2024 amendment to our ABL Credit Agreement, our former administrative agent required us to collateralize our outstanding letters of credit until the letters of credit expired in March 2025. Restricted cash as of March 31, 2025 consists of less than $ 0.1 million held in escrow in connection with our Arkansas development. 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. Mineral Resources Arrangement 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. In June 2023, we entered into a memorandum of understanding (“MOU”) with Saltwerx LLC (“Saltwerx”), an indirect wholly owned subsidiary of ExxonMobil Corporation, relating to the Evergreen Unit, and potential bromine and lithium production from brine produced from the unit. We completed an initial preliminary economic assessment in early 2023 for the extraction of the brine and for a bromine processing plant. On January 8, 2024, we announced the completion of a technical resources report for the Evergreen Unit in Arkansas. During the three months ended March 31, 2025 and March 31, 2024, we capitalized approximately $ 11.2 million and $ 4.1 million, respectively, of costs associated with the development of our properties in Arkansas. Foreign Currency Translation We have designated the Euro, the British pound, the Canadian dollar, the Brazilian real as the functional currencies for our operations in Finland and Sweden, the United Kingdom, Canada and Brazil, respectively. The United States dollar is the designated functional currency for most 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) losses are included in other (income) expense, net and totaled $ 8.8 million and $( 0.2 ) million during the three months ended March 31, 2025 and March 31, 2024, respectively. Foreign currency exchange losses during the three months ended March 31, 2025 include recognition of a $ 9.5 million cumulative foreign currency translation adjustment loss, which was reclassified from accumulated other comprehensive loss due to the dissolution of our former subsidiary in Canada during the three months ended March 31, 2025. 8 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 investments. See Note 7 - “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). Supplemental Cash Flow Information Supplemental cash flow information is as follows: Three Months Ended March 31, 2025 2024 (in thousands) Interest paid $ 4,999 $ 5,406 Income taxes paid $ 3,360 $ 433 March 31, 2025 December 31, 2024 (in thousands) Accrued capital expenditures $ 5,292 $ 7,131 New Accounting Pronouncements Standards not yet adopted In November 2024, the FASB issued Accounting Standards Update (“ASU”) 2024-03, “Income Statement–Reporting Comprehensive Income–Expense Disaggregation Disclosures (Subtopic 220-40)” ("ASU 2024-03"). ASU 2024-03 requires additional disclosures about certain expenses included in the income statement, including purchases of inventory, employee compensation, intangible asset amortization and depreciation. ASU 2024-03 is effective for annual periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027 with early adoption permitted. The Company is currently evaluating the impact of ASU 2024-03 on its financial statements and related disclosures . In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” The new standard requires companies to disclose specific categories in the income tax rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. ASU 2023-09 is effective for annual reporting periods beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the expected impact of these standards but does not expect them to have a significant impact on its consolidated financial statements upon adoption as the standards expand disclosures only. NOTE 2 – REVENUE Revenue from Contracts with Customers Our contract asset balances, primarily associated with contractual invoicing milestones and/or customer documentation requirements, were $ 26.3 million and $ 30.4 million as of March 31, 2025 and December 31, 2024, 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 $ 0.6 million and $ 0.4 million as of March 31, 2025 and December 31, 2024, respectively, and vary based on the timing of invoicing and performance obligations being met. Unearned income is included in accrued liabilities and other in our consolidated balance sheets. We recognized approximately $ 0.1 million and $ 0.1 million during the three months ended 9 March 31, 2025 and March 31, 2024, respectively, deferred in unearned income as of the beginning of the period. During the three months ended March 31, 2025 and March 31, 2024, contract costs were not significant. We disaggregate revenue from contracts with customers into Product Sales and Services within each segment, as noted in our two reportable segments in Note 9 - “Industry Segments.” In addition, we disaggregate revenue from contracts with customers by geography based on the following table below. Three Months Ended March 31, 2025 2024 (in thousands) Completion Fluids & Products United States $ 61,144 $ 41,437 International 31,874 35,845 93,018 77,282 Water & Flowback Services United States 55,878 64,711 International 8,244 8,979 64,122 73,690 Total Revenue United States 117,022 106,148 International 40,118 44,824 $ 157,140 $ 150,972 NOTE 3 – INVENTORIES Components of inventories as of March 31, 2025 and December 31, 2024 are as follows: March 31, 2025 December 31, 2024 (in thousands) Finished goods $ 89,804 $ 90,919 Raw materials 7,023 1,599 Parts and supplies 7,681 7,297 Work in progress 1,978 1,882 Total inventories $ 106,486 $ 101,697 Finished goods inventories include newly manufactured clear brine fluids as well as used brines that are repurchased from certain customers for recycling . NOTE 4 – INVESTMENTS Our investments as of March 31, 2025 and December 31, 2024 consist of the following: March 31, 2025 December 31, 2024 (in thousands) Investment in Kodiak $ — $ 18,393 Investment in Standard Lithium 1,016 1,168 Other investments 8,670 8,598 Total Investments $ 9,686 $ 28,159 In January 2025, we sold our Kodiak Gas Services, Inc. (NYSE: KGS) (“ Kodiak”) shares for proceeds of $ 19.0 million, net of transaction and broker fees. During the three months ended March 31, 2025, we recorded a net gain of $ 0.6 million from the sale of our Kodiak shares. 10 In addition, we are party to agreements whereby Standard Lithium has the right to explore for, and an option to acquire the rights to produce and extract, lithium in our Arkansas leases and other additional potential resources in the Mojave region of California. The Company received stock of Standard Lithium under the terms of the arrangements. We also hold investments in convertible notes, common units and preferred units issued by two privately-held companies. These convertible notes, common units and preferred units are not publicly traded and may not be offered, sold, transferred or pledged until such common units are registered pursuant to an effective registration statement or pursuant to an exemption from registration. Our exposure to potential losses is limited to our investments, including capitalized and accrued interest associated with the convertible notes. See Note 7 - “Fair Value Measurements” for further information. NOTE 5 – LONG-TERM DEBT AND OTHER BORROWINGS Consolidated long-term debt as of March 31, 2025 and December 31, 2024 consists of the following: Scheduled Maturity March 31, 2025 December 31, 2024 (in thousands) Term Credit Agreement (1) January 1, 2030 $ 180,095 $ 179,696 Total long-term debt $ 180,095 $ 179,696 (1) Net of unamortized discount of $ 4.8 million and $ 5.0 million as of March 31, 2025 and December 31, 2024, respectively, and net of unamortized deferred financing costs of $ 5.1 million and $ 5.3 million as of March 31, 2025 and December 31, 2024, respectively. Term Credit Agreement Pricing on the Term Credit Agreement is the secured overnight financing rate (“SOFR”) plus 5.75 %. The interest rate per annum on borrowings under the Term Credit Agreement is 10.17 % as of March 31, 2025 and the maturity date of the Term Credit Agreement is January 1, 2030. The Term Credit Agreement includes a $ 75 million delayed-draw term loan available until January 12, 2026 to provide capital to advance our Arkansas bromine processing project. The Company is required to pay a commitment fee on the unutilized commitments with respect to the delayed-draw term loan at the rate of 1.5 % per annum. The Term Credit Agreement contains certain affirmative and negative covenants, including covenants that restrict the ability of the Company and certain of its subsidiaries to take certain actions including, among other things and subject to certain significant exceptions, the incurrence of debt, the granting of liens, engaging in mergers and other fundamental changes, the making of investments, entering into transactions with affiliates, the payment of dividends and other restricted payments, the prepayment of other indebtedness and the sale of assets. The Term Credit Agreement also requires the Company to maintain a Leverage Ratio (as defined in the Term Credit Agreement) of not more than 4.0 to 1.0 as of the end of each fiscal quarter and Liquidity (as defined in the Term Credit Agreement) of not less than $ 50.0 million at all times. All obligations under the Term Credit Agreement and the guarantees of those obligations are secured, subject to certain exceptions, by a security interest on substantially all of the property of the Company and its domestic subsidiaries, subject to the lien priorities set forth in the intercreditor agreement with the agent under our ABL Credit Agreement. Our Term Credit Agreement requires us to offer to prepay a percentage of Excess Cash Flow (as defined in the Term Credit Agreement) within five business days of filing our Annual Report. The Term Credit Agreement includes customary events of default including non-payment of principal, interest or fees, violation of covenants, inaccuracy of representations or warranties, cross-default to other material indebtedness, bankruptcy and insolvency events, invalidity or impairment of security interests or invalidity of loan documents, certain ERISA events, unsatisfied or unstayed judgments and change of control. 11 ABL Credit Agreement As of March 31, 2025, we had no borrowings outstanding and $ 0.2 million letters of credit or guarantees under our ABL Credit Agreement. Deferred financing costs of $ 1.0 million and $ 1.0 million as of March 31, 2025 and December 31, 2024, respectively, were classified as other long-term assets on the accompanying consolidated balance sheet as there was no outstanding balance on our ABL Credit Agreement. As of March 31, 2025, our ABL Credit Agreement provides, with certain restrictions, for a senior secured revolving credit facility of up to $ 100.0 million with a $ 25.0 million accordion. The credit facility is subject to a borrowing base determined monthly 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 $ 11.5 million. The ABL Credit Agreement matures on May 13, 2029. Subject to compliance with the covenants, borrowing base, and other provisions of the ABL Credit Agreement that may limit borrowings, we had availability of $ 87.1 million under this agreement. Borrowings under the ABL Credit Agreement bear interest at a rate per annum equal to, at the option of TETRA, either (i) the standard overnight financing rate plus 0.10 %, (ii) a base rate plus a margin based on a fixed charge coverage ratio, or (iii) the Daily Simple Risk Free Rate plus 0.10 %. The base rate is determined by reference to the highest of (a) the prime rate of interest as announced from time to time by Bank of America, N.A. (b) the Federal Funds Effective Rate (as defined in the ABL Credit Agreement) plus 0.5 % per annum and (c) the standard overnight financing rate (adjusted to reflect any required bank reserves) for a one-month period on such day plus 1.0 % per annum, provided that the base rate shall not be less than 1.0 %. Borrowings outstanding have an applicable margin ranging from 2.00 % to 2.50 % per annum for SOFR-based loans and 1.00 % to 1.50 % per annum for base-rate loans, based upon the applicable fixed charge coverage ratio. In addition to paying interest on the outstanding principal under the ABL Credit Agreement, TETRA is required to pay a commitment fee in respect of the unutilized commitments at an applicable rate of 0.375 % per annum. TETRA is also required to pay a customary letter of credit fee equal to the applicable margin on loans and fronting fees. All obligations under the ABL Credit Agreement and the guarantees of those obligations are secured, subject to certain exceptions, by a security interest for the benefit of the ABL Lenders on substantially all of the personal property of TETRA and certain subsidiaries of TETRA, the equity interests in certain domestic subsidiaries, and a maximum of 65 % of the equity interests in certain foreign subsidiaries. Swedish Credit Facility In January 2022, the Company entered into a revolving credit facility for seasonal working capital needs of subsidiaries in Sweden (“Swedish Credit Facility”). As of March 31, 2025, we had no balance outstanding and availability of approximately $ 5.0 million under the Swedish Credit Facility. During each year, all outstanding loans under the Swedish Credit Facility must be repaid for at least 30 consecutive days. Borrowings bear interest at a rate of 2.95 % per annum. The Swedish Credit Facility expires on December 31, 2025 and the Company intends to renew it annually. Finland Credit Agreement In January 2022, the Company also entered into an agreement guaranteed by certain accounts receivable and inventory in Finland (“Finland Credit Agreement”). As of March 31, 2025, there were $ 1.5 million of letters of credit outstanding against the Finland Credit Agreement. The Finland Credit Agreement expires on January 31, 2026 and the Company intends to renew it annually. Covenants Our credit agreements contain certain affirmative and negative covenants, including covenants that restrict the ability to pay dividends or other restricted payments. As of March 31, 2025, we are in compliance with all covenants under the credit agreements. 12 NOTE 6 – 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 March 31, 2025. For additional discussion of our legal proceedings, please see our 202 4 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 March 31, 2025, 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 $ 55.9 million, including $ 17.4 million for the remainder of 2025, $ 22.2 million in 2026, $ 15.4 million in 2027, and $ 0.9 million in 2028. As of March 31, 2025, our Water & Flowback Services division had an obligation to purchase equipment for approximately $ 4.0 million during the year ending December 31, 2025. As of March 31, 2025, we also have commitments of $ 23.8 million related to long-lead power infrastructure for our Completion Fluids & Products Division’s proposed bromine plant in Arkansas, including $ 10.3 million due during the remainder of 2025 and $ 13.5 million due over five years beginning after electric service is available. Contingencies Related to Discontinued Operations In early 2018, we closed the Maritech Asset Purchase and Sale Agreement (“Maritech APA") and Maritech Membership Interest Purchase Agreement (“Maritech MIPA”) with Orinoco Natural Resources, LLC (“Orinoco”) that together provided for the purchase by Orinoco of all of Maritech’s remaining oil and gas properties and related assets and all outstanding membership interests of Maritech. Under the Maritech APA, Orinoco assumed responsibility for all of Maritech’s decommissioning liabilities related to the leases sold to Orinoco (the “Orinoco Lease Liabilities”) and, under the Maritech MIPA, Orinoco assumed all other liabilities of Maritech, including the decommissioning liabilities associated with Maritech’s interests in oil and gas properties previously sold by Maritech and select infrastructure still operated by Maritech (the “Legacy Liabilities”), subject to certain limited exceptions unrelated to the decommissioning liabilities. To the extent that Maritech or Orinoco fails to satisfy decommissioning liabilities associated with any of the Orinoco Lease Liabilities or the Legacy Liabilities, we may be required to satisfy such liabilities under third party indemnity agreements and corporate guarantees that we previously provided to the U.S. Department of the Interior (“BSEE”) and other parties, respectively, for which costs may be significant. Pursuant to a Bonding Agreement entered into as part of these Orinoco transactions (the “Bonding Agreement”), Orinoco provided non-revocable performance bonds from a surety company in an aggregate amount of $ 46.8 million to cover the performance by Orinoco and Maritech of certain specific asset retirement obligations of Maritech (the “Initial Bonds”) and agreed to replace the Initial Bonds with other non-revocable performance bonds in the aggregate sum of $ 47.0 million (collectively, the “Replacement Bonds”). In the event Orinoco does not provide the Replacement Bonds, Orinoco is required to make certain cash escrow payments to us. To date, no cash escrow payments have been made. On August 16, 2024, we issued a letter to Orinoco and the bond company demanding realignment of the existing bonds and/or issuance of Replacement Bonds pursuant to the terms of the Bonding Agreement to better align bond coverage with the more likely liability risks. To date, no written response has been received. The payment obligations of Orinoco under the Bonding Agreement were guaranteed by Thomas M. Clarke and Ana M. Clarke pursuant to a separate guaranty agreement (the “Clarke Bonding Guaranty Agreement”). Orinoco has not delivered the Replacement Bonds and neither it nor the Clarkes has made any of the agreed upon cash escrow payments. We filed a lawsuit against Orinoco and the Clarkes to enforce the terms of the Bonding 13 Agreement and the Clarke Bonding Guaranty Agreement. The trial court initially granted summary judgment in favor of Orinoco and the Clarkes, dismissing our claims against Orinoco under the Bonding Agreement and against the Clarkes under the Clarke Bonding Guaranty Agreement. We filed an appeal with the trial court requesting a new trial on the summary judgment or modification of the judgment. On November 5, 2019, the trial court signed an order granting our motion for a new trial and vacating the prior summary judgment order. The parties are awaiting direction from the court on a new scheduling order and/or trial setting. The Initial Bonds, which are non-revocable, remain in effect. In addition, Maritech and certain other interest owners have received decommissioning orders from BSEE and could receive additional decommissioning orders in the future. Such decommissioning orders received by Maritech and other interest owners relate to asset retirement obligations for certain properties in the Gulf of America. From time to time, we also receive demand notices from third parties related to certain corporate guarantees or other arrangements covering such decommissioning liabilities. While the ultimate outcome of such matters cannot be predicted at this time, if Maritech or other interest owners default, BSEE or third parties may seek to enforce certain corporate guarantees or third party indemnity agreements against us for a portion of such decommissioning obligations, which may be significant. On February 13, 2025, Arena Energy, LLC filed a complaint in U.S. District Court for the Southern District of Texas seeking indemnification from us and Maritech for decommissioning costs related to a Maritech oil and gas platform in the Gulf of America. We intend to vigorously defend against the claims brought by Arena Energy, LLC but we are presently unable to predict the duration, scope or result of this proceeding. If we become liable in the future for any decommissioning liability associated with any property covered by either an Initial Bond or Replacement Bond while such bonds are outstanding and any payment made to us under such bond is insufficient to satisfy such liability, the Bonding Agreement provides that Orinoco will pay us an amount equal to such deficiency. If Orinoco fails to pay any such amount, such amount must be paid by the Clarkes under the Clarke Bonding Guaranty Agreement. Our financial condition and results of operations may be negatively affected if we become liable for a significant portion of the decommissioning liabilities and Orinoco or the Clarkes are unable to cover any such deficiency. With respect to certain properties in the Gulf of America, we have been advised that the cost of the decommissioning work to plug and abandon certain wells is projected to be significantly higher than the approximately $ 10.7 million bond supporting the liability, which was put in place by Maritech and other interest owners based on earlier cost estimates. We have also been advised more recently that Maritech’s prior working interest with respect those plugging and abandonment (“P&A”) costs are expected to exceed its share of the bond. In September 2024, P&A operations commenced pursuant to a cost sharing agreement among certain parties for decommissioning certain properties in the Gulf of America. While Maritech is not a party to this cost sharing agreement, a predecessor of Maritech has advised us that it expects to seek reimbursement from us for the portion of decommissioning costs it has contractually agreed to pay pursuant to the terms of the cost sharing agreement. While the ultimate outcome of this matter cannot be predicted, we could potentially be liable for an estimated amount in the range of $ 5.8 million to $ 19.4 million, depending on the outcome of negotiations and whether other partners or property owners in the chain of title fulfill their respective obligations under their agreements. Additionally, we understand that in connection with the P&A operations being performed, Maritech and the other named obligees have made a demand on the related bond. We have made efforts to protect Maritech’s proportionate share of the bond proceeds (approximately $ 3.9 million), including demanding that the surety segregate or ensure that Maritech’s share is applied solely to satisfy its proportionate share of the decommissioning costs. We accrued a liability of $ 5.8 million related to this obligation during the year ended December 31, 2024. NOTE 7 – FAIR VALUE MEASUREMENTS Financial Instruments Investments Our investments in Kodiak and Standard Lithium are recorded in investments on our consolidated balance sheets based on the quoted market stock price (Level 1 fair value measurements). The stock component of consideration received from 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. Changes in the value of stock are recorded in other (income) expense, net in our consolidated statements of operations. 14 We also hold investments in convertible notes, common units, and preferred units issued by two privately-held companies. Our investment in certain preferred units were recorded based on observable market-based inputs for preferred units issued to several investors during August through October 2024 (Level 2 fair value measurement). Our investment in convertible notes, common units, and certain preferred units are recorded in our consolidated financial statements based on internal valuations with assistance from a third-party valuation specialist (Level 3 fair value measurement). The valuations are impacted by key assumptions, including the assumed probability and timing of potential debt or equity offerings. One of the convertible notes includes an option to convert the note into equity interests. The change in the fair value of the embedded option, as well as the preferred units and common units, are included in other (income) expense, net in our consolidated statements of operations. The change in the fair value of the convertible note, excluding the embedded option, is included in other comprehensive income (loss) in our consolidated statements of comprehensive income. The change in our investments for the three-month periods ended March 31, 2025 and March 31, 2024 are as follows: Three Months Ended March 31, 2025 Fair Value Measurements Using Quoted Prices in Active Markets for Identical Assets or Liabilities Significant Other Observable Inputs Significant Unobservable Inputs (Level 1) (Level 2) (Level 3) Total (in thousands) Investment balance at beginning of period $ 19,561 $ 1,388 $ 7,210 $ 28,159 Sale of investments ( 19,011 ) — — ( 19,011 ) Reclassification between Level 2 and Level 3 fair value — ( 1,388 ) 1,388 — Unrealized gain on equity securities 466 — — 466 Unrealized loss on embedded option — — ( 209 ) ( 209 ) Unrealized gain on convertible note, excluding embedded option — — 281 281 Investment balance at end of period $ 1,016 $ — $ 8,670 $ 9,686 Three Months Ended March 31, 2024 Fair Value Measurements Using Quoted Prices in Active Markets for Identical Assets or Liabilities Significant Unobservable Inputs (Level 1) (Level 3) Total (in thousands) Investment balance at beginning of period $ 10,154 $ 7,200 $ 17,354 Unrealized gain on equity securities 2,994 — 2,994 Unrealized loss on embedded option — ( 199 ) ( 199 ) Unrealized gain on convertible note, excluding embedded option — 237 237 Investment balance at end of period $ 13,148 $ 7,238 $ 20,386 15 Recurring fair value measurements by valuation hierarchy as of March 31, 2025 and December 31, 2024 are as follows: Fair Value Measurements Using Total as of Quoted Prices in Active Markets for Identical Assets or Liabilities Significant Unobservable Inputs Description March 31, 2025 (Level 1) (Level 3) (in thousands) Investment in Standard Lithium $ 1,016 $ 1,016 $ — Other investments 8,670 — 8,670 Total investments $ 9,686 Fair Value Measurements Using Total as of Quoted Prices in Active Markets for Identical Assets or Liabilities Significant Other Observable Inputs Significant Unobservable Inputs Description December 31, 2024 (Level 1) (Level 2) (Level 3) (in thousands) Investment in Kodiak $ 18,393 $ 18,393 $ — $ — Investment in Standard Lithium 1,168 1,168 — — Other investments 8,598 — 1,388 7,210 Investments $ 28,159 Other The fair values of cash, restricted cash, accounts receivable, accounts payable, accrued liabilities, short-term borrowings and long-term debt approximate their carrying amounts. See Note 5 - “Long-Term Debt and Other Borrowings” for further discussion. NOTE 8 – NET INCOME PER SHARE The following is a reconciliation of the weighted average number of common shares outstanding with the number of shares used in the computations of net income per common and common equivalent share: Three Months Ended March 31, 2025 2024 (in thousands) Number of weighted average common shares outstanding 132,350 130,453 Assumed vesting of equity awards 1,407 1,670 Average diluted shares outstanding 133,757 132,123 16 NOTE 9 – INDUSTRY SEGMENTS We manage our operations through two segments: Completion Fluids & Products Division and Water & Flowback Services Division. Summarized financial information concerning the business segments is as follows: Three Months Ended March 31, 2025 Completion Fluids & Products Water & Flowback Services Corporate Total (in thousands) Revenue $ 93,018 $ 64,122 $ — $ 157,140 Cost of product sales and services 54,315 50,250 — 104,565 Depreciation, amortization and accretion 2,177 6,880 94 9,151 Impairments and other charges — 518 — 518 General and administrative expense 6,683 5,735 11,716 24,134 Interest (income) expense, net ( 115 ) ( 7 ) 4,846 4,724 Other (income) expense, net ( 719 ) 9,634 47 8,962 Net income (loss) before taxes $ 30,677 $ ( 8,888 ) $ ( 16,703 ) $ 5,086 Capital expenditures $ 13,843 $ 4,064 $ 49 $ 17,956 March 31, 2025 Total assets $ 318,848 $ 162,365 $ 132,872 $ 614,085 Three Months Ended March 31, 2024 Completion Fluids & Products Water & Flowback Services Corporate Total (in thousands) Revenue $ 77,282 $ 73,690 $ — $ 150,972 Cost of product sales and services 48,464 62,650 — 111,114 Depreciation, amortization and accretion 2,387 6,288 81 8,756 General and administrative expense 6,693 4,503 11,102 22,298 Interest (income) expense, net ( 269 ) 76 6,145 5,952 Loss on debt extinguishment — — 5,535 5,535 Other (income) expense, net 215 ( 548 ) ( 3,645 ) ( 3,978 ) Net income (loss) before taxes $ 19,792 $ 721 $ ( 19,218 ) $ 1,295 Capital expenditures $ 7,705 $ 8,045 $ 77 $ 15,827 December 31, 2024 Total assets $ 290,788 $ 158,475 $ 155,932 $ 605,195 17