What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-10-28 compared with 2025-07-29 · 120 added, 205 removed, 190 unchanged (63% of the section changed)

7 unchanged sentences

We are also developing and pilot testing technologies to treat and desalinate produced water from oil wells for beneficial reuse, including surface discharge.

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

Consolidated revenue for the first six months of 2025 of $331.0 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 six months of 2025 increased compared to both the first three months of 2025 and the first six months of 2024, led by deepwater Gulf of America as we completed the three-well CS Neptune project.

The Completion Fluids & Products division also benefited from the seasonally strong industrial chemicals calcium chloride business.

Our Water & Flowback Services revenues increased slightly compared to the first three months of 2025 and decreased 11.7% compared to the first six months of 2024, reflecting lower 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 decreased reflecting the lower onshore activity, as well as costs to close underperforming service lines in the United States.

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

Consolidated revenue for the first nine months of 2025 of $484.3 million increased compared to the prior year due to strong results from our Completion Fluids & Products Division driven by continued strength in our offshore and industrial calcium chloride businesses, which offset expected weaker United States onshore activity in our Water & Flowback Services Division.

Completion Fluids & Products Division revenues for the first nine months of 2025 increased compared to the first nine months of 2024, led by deepwater Gulf of America as we completed the three-well CS Neptune project.

The Completion Fluids & Products division also benefited from another seasonally strong industrial chemicals calcium chloride business in Northern Europe.

Our Water & Flowback Services revenues decreased slightly compared to the second quarter of 2025 and decreased 13.8% compared to the first nine months of 2024, outperforming the declining onshore activity in the United States.

Water & Flowback Services also decreased following the sale of early production facilities in Latin America in 2024.

Water & Flowback Services operating margins decreased from the prior year reflecting the lower onshore activity, as well as costs to close underperforming service lines in the United States.

We continue to take proactive actions to reduce costs, right size our support structure, minimize capital expenditures and close underperforming service lines within Water & Flowback Services.

We remain committed to pursuing initiatives that leverage our completion fluids and fluids chemistry expertise, our significant bromine and lithium assets and technologies, and our leading calcium chloride production capabilities.

In 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 we expect to complete the first phase of the project by year end, including site preparation and installation of the bromine tower.

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 and our 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.

In September 2025, we published an updated definitive feasibility study and updated our technical resources report with respect to bromine, lithium, magnesium, manganese and other key minerals from our Evergreen Brine Unit.

To meet the accelerating demand for our deepwater completion fluids and battery storage electrolyte, reduce reliance on third-party suppliers and gain access to a lower cost of supply, we continue to advance our bromine processing plant in Arkansas.

We are on target to complete site preparation, have power infrastructure in place and finish installation of the bromine tower by the end of 2025.

We expect the facility to be operational by the end of 2027 with first production in 2028.

We are prioritizing our strategic initiatives on projects that can immediately impact our near-term results, focused on TETRA CS Neptune fluids, TETRA PureFlow+ electrolyte and our 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 completed installation of our bulk electrolyte tanker loading system at our West Memphis plant and expect a significant increase in electrolyte volumes in early 2026.

Following the commercial announcement of our Oasis TDS water desalination technology, we engaged a third-party firm and launched the engineering design of a first commercial plant.

This step will facilitate commercial discussions for the multiple clients that have visited our research center to gain insight into Oasis and executed non-disclosure agreements (“NDAs”).

The front-end engineering design has been completed, and the estimated capital and operating expenses are within our internal projections.

We are very encouraged by our prospects to provide a solution that will enable the industry to desalinate and reuse produced water for agricultural, industrial, and other beneficial purposes.

2 unchanged sentences

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 June 30, 2025 compared with three months ended March 31, 2025.

Three months ended September 30, 2025 compared with three months ended June 30, 2025.

Consolidated Comparisons

Three Months Ended Period to Period Change

June 30, March 31, $ Change % Change

September 30, June 30, $ Change % Change

(in thousands, except percentages)

Revenues $ 153,239 $ 173,872 $ (20,633) (11.9) %

Gross profit 48,244 42,906 5,338 12.4 %

Gross profit as a percentage of revenue

Cost of product sales and services 107,378 116,346 (8,968) (7.7) %

Depreciation, amortization and accretion 9,491 9,189 302 3.3 %

Impairments and other charges — 93 (93) (100.0) %

36,370 48,244 (11,874) (24.6) %

General and administrative expense 25,240 25,259 (19) (0.1) %

General and administrative expense as a percentage of revenue

14.5 % 15.4 %

Operating income 11,130 22,985 (11,855) (51.6) %

Interest expense, net

Other (income) expense, net

(645) 8,962 9,607 NM (1)

Income before taxes

4,448 4,194 254 6.1 %

Income before taxes as a percentage of revenue

Provision for income taxes

Other income, net

(1,423) (645) 778 120.6 %

Income from continuing operations before taxes

8,105 19,436 (11,331) (58.3) %

Income tax expense

3,954 8,131 (4,177) (51.4) %

Net income attributable to TETRA stockholders

$ 4,151 $ 11,305 $ (7,154) (63.3) %

(1) Percent change is not meaningful

Consolidated revenues increased sequentially primarily due to higher activity for the Completion Fluids & Products division, led by deepwater Gulf of America as we completed the three-well CS Neptune project and the seasonally stronger industrial chemicals calcium chloride business in Northern Europe.

Consolidated revenues decreased sequentially as a result of lower activity for the Completion Fluids & Products division, primarily due to the three-well CS Neptune project completed in the second quarter and lower sales volumes following the strong Northern European industrial chemicals seasonal impact in the second quarter.

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

Consolidated gross profit increased primarily due to stronger activity levels from the Completion Fluids & Products Division, partially offset by weaker margins from our Water & Flowback Services Divisions.

Consolidated gross profit decreased primarily due to lower activity levels from the Completion Fluids & Products Division, partially offset by stronger operating margins from our Water & Flowback Services Divisions.

See Divisional Comparisons section below for additional discussion.

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 recognition of the $9.5 million cumulative currency translation adjustment loss associated with the dissolution of a former subsidiary in Canada in the first quarter, as well as increased foreign exchange gains in Brazil.

Consolidated other (income) expense, net also includes a $0.6 million net increase in unrealized losses on investments.

Consolidated provision for income tax was $8.1 million expense during the current quarter, compared to $1.0 million expense during the prior quarter.

The change in our tax provision compared to the prior quarter was primarily due to the higher income before taxes and the $1.2 million out-of-period tax benefit recognized in the prior quarter.

Our consolidated effective tax rate for the three months ended June 30, 2025 was 41.8%.

Consolidated general and administrative expense decreased slightly as lower professional services expenses were offset by higher incentive compensation expenses.

Consolidated other income, net, increased compared to the prior quarter primarily due to a $0.6 million increase in unrealized gains on our investment in Standard Lithium as the result of an increase in the share price and a $0.8 million decrease in losses on investments in a private company, partially offset by $0.9 million decrease in foreign exchange gains, primarily in Europe and Brazil.

Consolidated income tax expense decreased $4.2 million compared to the prior quarter primarily due to the lower income before taxes.

Our consolidated effective tax rate for the three months ended September 30, 2025 was 48.8%.

Divisional Comparisons

1 unchanged sentence

Three Months Ended Period to Period Change

June 30, March 31, $ Change % Change

September 30, June 30, $ Change % Change

(in thousands, except percentages)

Revenues $ 90,264 $ 109,445 $ (19,181) (17.5) %

Gross profit 44,637 36,526 8,111 22.2 %

Gross profit as a percentage of revenue

30,430 44,637 (14,207) (31.8) %

General and administrative expense 6,900 6,683 217 3.2 %

General and administrative expense as a percentage of revenue

Interest income, net

(302) (115) 187 162.6 %

Other income, net (94) (719) 625 86.9 %

Net income before taxes

$ 38,133 $ 30,677 $ 7,456 24.3 %

Net income before taxes as a percentage of revenue

34.8 % 33.0 %

Revenues for our Completion Fluids & Products Division increased due to the successful completion of the final two TETRA CS Neptune wells in the Gulf of America, the seasonally strong calcium chloride business in Northern Europe, higher completion fluids sales in South America and higher TETRA PureFlow+ electrolyte sales in the United States.

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 primarily due to the effect of changes in product mix, including the higher-margin CS Neptune fluid sales, which generate higher margins than other projects.

Operating income 23,437 37,737 (14,300) (37.9) %

Revenues for our Completion Fluids & Products Division decreased sequentially due to the successful completion of the final two TETRA CS Neptune wells in the Gulf of America during the prior quarter, as well as the seasonally strong calcium chloride business in Northern Europe in the second quarter, partially offset by higher revenues from deepwater projects in South America.

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

Operating margins decreased primarily due to the effect of changes in product mix, including the impact of higher-margin CS Neptune fluid sales in the second quarter.

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.

Other income, net decreased primarily due to a $0.7 million decrease in foreign exchange gains, primarily in Brazil.

Water & Flowback Services Division

Three Months Ended Period to Period Change

June 30, March 31, $ Change % Change

September 30, June 30, $ Change % Change

(in thousands, except percentages)

Revenues $ 62,975 $ 64,427 $ (1,452) (2.3) %

Gross profit 3,701 6,474 (2,773) (42.8) %

Gross profit as a percentage of revenue

General and administrative expense 4,815 5,735 (920) (16.0) %

General and administrative expense as a percentage of revenue

Interest (income) expense, net

13 (7) 20 NM (1)

Other expense, net

6,032 3,701 2,331 63.0 %

Net loss before taxes

$ (1,271) $ (8,888) $ 7,617 85.7 %

Net loss before taxes as a percentage of revenue

(2.0) % (13.9) %

Operating income (loss) 291 (1,114) 1,405 NM (1)

(1) Percent change is not meaningful

Revenues for our Water & Flowback Services Division increased slightly compared to the prior quarter driven by resilience in our international business and increased flowback activity from improving SandStorm and Auto-Drillout utilization in key markets in the United States despite an overall decline in United States onshore activity.

Gross profit for our Water & Flowback Services Division declined reflecting the weaker environment and costs to close underperforming service lines in the United States.

The Water & Flowback Services Division decrease in net loss before taxes compared to the prior quarter is primarily due recognition of a $9.4 million cumulative currency translation adjustment loss associated with the dissolution of a former subsidiary in Canada in the first quarter and a $0.9 million decrease in general and administrative expense from cost reduction efforts, partially offset by lower gross profit.

Revenues for our Water & Flowback Services Division decreased slightly compared to the prior quarter driven by decreased flowback activity in key markets in the United States related to an overall decline in United States onshore activity.

Gross profit and operating income (loss) for our Water & Flowback Services Division increased compared to the previous quarter primarily due to the non-recurrence of costs to close underperforming service lines in the United States during the prior quarter.

Our continued focus on automation, including increased utilization of our TETRA SandStorm and Auto-Drillout units, also mitigated margin erosion in a weaker environment.

This operating margin increase was partially offset by a $0.9 million increase in general and administrative expense due to an increase in compensation expense.

Corporate Overhead

Three Months Ended Period to Period Change

June 30, March 31, $ Change % Change

September 30, June 30, $ Change % Change

(in thousands, except percentages)

2 unchanged sentences

Interest expense, net

4,584 4,483 101 2.3 %

Other (income) expense, net 79 (695) (774) NM (1)

Net loss before taxes

Loss from continuing operations before taxes

$ (17,261) $ (17,426) $ (165) (0.9) %

(1) Percent change is not meaningful

Corporate overhead net loss before taxes increased compared to the prior quarter primarily due to a $1.8 million increase in general and administrative expenses due to increased wage and benefit related expenses to support higher activity levels in certain service lines, and an increase in other expense due to a $0.6 million increase in unrealized losses on investments.

These were partially offset by a $0.9 million increase in foreign exchange gains on intercompany dividends and foreign currency hedges.

Six months ended June 30, 2025 compared with six months ended June 30, 2024.

Corporate overhead loss from continuing operations before taxes slightly decreased compared to the prior quarter primarily due to a $1.0 million decrease in general and administrative expenses primarily from lower professional services expenses, partially offset by a $0.9 million decrease in foreign exchange gains on intercompany dividends and foreign currency hedges during the prior quarter.

Nine months ended September 30, 2025 compared with nine months ended September 30, 2024.

Consolidated Comparisons

Six Months Ended

June 30, Period to Period Change

Nine Months Ended

September 30, Period to Period Change

2025 2024 $ Change % Change

1 unchanged sentence

Revenues $ 484,251 $ 464,607 $ 19,644 4.2 %

Gross profit 91,150 74,355 16,795 22.6 %

Gross profit as a percentage of revenue

Cost of product sales and services 328,289 329,413 (1,124) (0.3) %

Depreciation, amortization and accretion 27,831 26,367 1,464 5.6 %

Impairments and other charges 611 109 502 460.6 %

127,520 108,718 18,802 17.3 %

General and administrative expense 74,633 66,841 7,792 11.7 %

General and administrative expense as a percentage of revenue

14.9 % 13.8 %

Operating income 52,887 41,877 11,010 26.3 %

Interest expense, net

13,366 17,233 (3,867) (22.4) %

Loss on debt extinguishment — 5,535 (5,535) (100.0) %

Other (income) expense, net 6,894 (2,241) (9,135) NM (1)

Income from continuing operations before taxes

32,627 21,350 11,277 52.8 %

Other (income) expense, net

8,317 (1,526) (9,843) NM (1)

Net income before taxes 24,522 13,774 10,748 78.0 %

Net income before taxes as a percentage of revenue

Provision for income taxes

Income tax expense

13,122 9,963 3,159 31.7 %

Net income 15,354 8,555 6,799 79.5 %

Income from continuing operations

19,505 11,387 8,118 71.3 %

Discontinued operations:

Loss from discontinued operations, net of taxes

— (5,830) (5,830) (100.0) %

19,505 5,557 13,948 251.0 %

Loss attributable to noncontrolling interests

1 unchanged sentence

Net income attributable to TETRA stockholders

$ 19,505 $ 5,560 $ 13,945 250.8 %

(1) Percent change is not meaningful

2 unchanged sentences

Consolidated gross profit increased in the current year primarily due to strong margins from our Completion Fluids & Products, partially offset by weaker margins from our Water & Flowback Services Divisions.

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

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

Interest expense, net decreased $3.9 million due to lower interest rates on our Term Credit Agreement as well as an increase in the interest expense capitalized for our Arkansas development.

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 (income) expense, net, changed compared to the prior year primarily due to a $5.7 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 in the first quarter of 2025, and a $2.9 million decrease in net unrealized gains on investments.

Consolidated provision for income taxes was $9.2 million expense during the current year, compared to $5.2 million expense during the prior year.

The change in our tax provision compared to the prior year was primarily due to the higher income before taxes.

Consolidated other (income) expense, net, changed compared to the prior year in part due to a $5.3 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 in the first quarter of 2025, partially offset by lower currency losses in South America.

In addition, investment income decreased, including a $3.9 million decrease in unrealized gains and a $0.4 million decrease in dividends from our investment in Kodiak Gas Services Inc.

(“Kodiak”) stock which we sold in January 2025, partially offset by a $1.9 million increase in unrealized gain from our investment in Standard Lithium.

Consolidated income tax expense increased $3.2 million compared to the prior year primarily due to the higher income before taxes.

Our consolidated effective tax rate for the current year is 40.2%, compared to 46.7% during the prior year.

Our effective tax rate decrease was primarily the result of a $1.2 million out-of-period adjustment recorded during the period ended March 31, 2025, which reduced the current year income tax expense.

In addition, a significant portion of prior year income was generated in jurisdictions for which we were not able to utilize net operating losses, including Argentina, where taxes were significantly impacted by the sale of the early production facility expansion as well an inflation adjustment required under local law.

Divisional Comparisons

Completion Fluids & Products Division

Six Months Ended

June 30, Period to Period Change

Nine Months Ended

September 30, Period to Period Change

2025 2024 $ Change % Change

1 unchanged sentence

Revenues $ 292,726 $ 242,432 $ 50,294 20.7 %

Gross profit 81,162 60,062 21,100 35.1 %

Gross profit as a percentage of revenue

111,592 84,453 27,139 32.1 %

General and administrative expense 13,583 13,684 (101) (0.7) %

General and administrative expense as a percentage of revenue

Interest income, net (417) (404) 13 3.2 %

Other (income) expense, net (813) 337 1,150 NM (1)

Net income before taxes $ 68,809 $ 46,445 $ 22,364 48.2 %

Net income before taxes as a percentage of revenue

34.0 % 26.2 %

(1) Percent change is not meaningful

Revenues for our Completion Fluids & Products Division increased primarily due to the three CS Neptune wells in the Gulf of America, as well as higher Northern Europe industrial chemical sales and North America ultra-pure zinc bromide electrolyte sales.

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

Profit margins improved primarily due to the effect of changes in product mix, including the higher-margin CS Neptune fluid sales.

Operating income 91,016 64,714 26,302 40.6 %

Revenues for our Completion Fluids & Products Division increased primarily due to stronger volumes from our deepwater completion fluids products and the completion of three CS Neptune wells in the Gulf of America during the first and second quarters of 2025.

Additionally, strong results from our Northern Europe industrial chemical sales and North America TETRA PureFlow ultra-pure zinc bromide electrolyte sales contributed to the increase.

Gross profit and operating income for our Completion Fluids & Products Division increased compared to the prior year due to higher revenues described above.

Operating margins improved primarily due to the effect of changes in product mix, including the higher-margin deepwater completion fluids products.

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.

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 also improved due to a $1.3 million increase in foreign exchange gains, primarily in Brazil, and a $1.0 million increase in unrealized gain from our investment in Standard Lithium shares, partially offset by a $0.8 million increase in unrealized loss from the change in fair value of our investments issued by a privately-held company.

Water & Flowback Services Division

Six Months Ended

June 30, Period to Period Change

Nine Months Ended

September 30, Period to Period Change

2025 2024 $ Change % Change

1 unchanged sentence

Revenues $ 191,525 $ 222,175 $ (30,650) (13.8) %

Gross profit 10,176 14,458 (4,282) (29.6) %

Gross profit as a percentage of revenue 7.9 % 9.9 %

General and administrative expense 10,550 8,961 1,589 17.7 %

General and administrative expense as a percentage of revenue

Interest expense, net

16,208 24,632 (8,424) (34.2) %

Other expense, net 9,778 1,476 (8,302) 562.5%

Net income (loss) before taxes

$ (10,158) $ 3,877 $ (14,035) (362.0) %

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

Operating income (loss)

(83) 10,099 (10,182) (100.8) %

Revenues for our Water & Flowback Services Division decreased due to lower United States drilling and completion activity as well as lower service revenues following the sale of early production facilities in Latin America in 2024.

Gross profit for our Water & Flowback Services Division decreased slightly from the prior year reflecting lower activity in the United States onshore market.

Net income (loss) before taxes for our Water & Flowback Services Division changed to a loss in the current year compared to income in the prior year 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 $1.6 million increase in general and administrative expense due to higher compensation expense including costs to close underperforming service lines in the United States.

Gross profit and operating income (loss) for our Water & Flowback Services Division decreased reflecting lower activity in the United States onshore market and a $1.8 million increase in general and administrative expense due to higher compensation expense and costs to close underperforming service lines in the United States.

Corporate Overhead

Six Months Ended

June 30, Period to Period Change

Nine Months Ended

September 30, Period to Period Change

2025 2024 $ Change % Change

1 unchanged sentence

Depreciation and amortization $ 280 $ 258 $ 22 8.5 %

Impairments and other charges — 109 (109) 100.0 %

General and administrative expense 37,766 32,569 5,197 16.0 %

Interest expense, net

13,913 18,440 (4,527) (24.5) %

Loss on debt extinguishment

1 unchanged sentence

Other income, net

Net loss before taxes

(569) (4,146) (3,577) (86.3) %

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 $3.1 million decrease in unrealized gains related to share price changes of our investment in Kodiak which we sold in January 2025, and a $3.1 million decrease in interest expense, net due to lower interest rates on our Term Credit Agreement as well as an increase in the interest expense capitalized for our Arkansas development, partially offset by a $3.5 million increase in general and administrative expenses primarily from an increase in professional services and compensation expenses.

Non-GAAP Financial Measures

GAAP financial measures such as revenues, gross profit, income (loss) before taxes, and net cash provided by operating activities, as well as certain non-GAAP financial measures, including Adjusted EBITDA, as performance measures for our business.

Adjusted EBITDA .

We define Adjusted EBITDA as net income (loss) before taxes, 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.

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

These costs are excluded from Adjusted EBITDA because they did not relate to the periods presented and are considered to be outside of normal operations.

Long-term incentives are earned over a three-year period and the costs are recorded over the three-year period they are earned.

The amounts accrued or incurred are based on a cumulative of the three-year period.

Equity-based compensation expense represents compensation that has been or will be paid in equity and is excluded from Adjusted EBITDA because it is a non-cash item.

Adjusted EBITDA is used by management as a supplemental financial measure to assess financial performance, without regard to charges or credits that are considered by management to be outside of its normal operations and without regard to financing methods, capital structure or historical cost basis, and to assess the Company’s ability to incur and service debt and fund capital expenditures.

The following tables reconcile net income (loss) before taxes to Adjusted EBITDA for the periods indicated:

Three Months Ended

June 30, 2025

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

(in thousands, except percentages)

Revenues $ 109,445 $ 64,427 $ — $ — $ 173,872

Net income (loss) before taxes 38,133 (1,271) (13,544) (3,882) 19,436

Impairments and other charges — 93 — — 93

Former CEO stock appreciation right credit — — (22) — (22)

Transaction, restructuring and other expenses 69 685 488 — 1,242

Interest (income) expense, net (302) 13 — 4,483 4,194

Depreciation, amortization and accretion 2,214 6,881 — 94 9,189

Equity-based compensation expense — — 1,747 — 1,747

Adjusted EBITDA $ 40,114 $ 6,401 $ (11,331) $ 695 $ 35,879

Adjusted EBITDA as a % of revenue 36.7 % 9.9 % 20.6 %

Three Months Ended

March 31, 2025

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

(in thousands, except percentages)

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

Net income (loss) before taxes 30,677 (8,888) (11,716) (4,987) 5,086

Cost of product sales and services adjustments

Loss from continuing operations before taxes

$ (51,390) $ (52,765) $ (1,375) (2.6) %

Impairments and other charges — 518 — — 518

Former CEO stock appreciation right credit — — (151) — (151)

Transaction, restructuring and other expenses — 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

Depreciation, amortization and accretion 2,177 6,880 — 94 9,151

Equity-based compensation expense — — 1,860 — 1,860

Adjusted EBITDA $ 33,216 $ 8,321 $ (9,223) $ (47) $ 32,267

Adjusted EBITDA as a % of revenue 35.7 % 13.0 % 20.5 %

Three Months Ended

June 30, 2024

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

(in thousands, except percentages)

Revenues $ 100,019 $ 71,916 $ — $ — $ 171,935

Net income (loss) before taxes 26,653 3,156 (10,689) (6,641) 12,479

Former CEO stock appreciation right credit — — (428) — (428)

Transaction, restructuring and other expenses 37 — — — 37

Unusual foreign exchange loss — 1,387 — — 1,387

Interest (income) expense, net (135) 68 — 6,252 6,185

Depreciation, amortization and accretion 2,361 6,329 — 84 8,774

Equity-based compensation expense — — 1,800 — 1,800

Adjusted EBITDA $ 28,916 $ 10,940 $ (9,317) $ (305) $ 30,234

Adjusted EBITDA as a % of revenue 28.9 % 15.2 % 17.6 %

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.

Management compensates for the limitations of Adjusted EBITDA as an analytical tool

by reviewing the comparable U.S.

GAAP measures, understanding the differences between the measures, and incorporating this knowledge into management’s decision-making processes.

Corporate overhead loss from continuing operations 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 $3.9 million decrease in unrealized gains related to share price changes of our investment in Kodiak which we sold in January 2025.

In addition, interest expense, net decreased $4.5 million due to lower interest rates on our Term Credit Agreement as well as an increase in the interest expense capitalized for our Arkansas development.

These decreases were partially offset by a $5.2 million increase in general and administrative expenses primarily from an increase in professional services and incentive compensation expenses.

Liquidity and Capital Resources

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 second quarter was $204.5 million.

Our liquidity at the end of the third 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:

Six Months Ended

Nine Months Ended

September 30,

(in thousands)

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Operating Activities

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

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

Investing Activities

Total cash capital expenditures during the first six months of 2025 were $37.4 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 $27.5 million on capital expenditures, including $22.0 million for our Arkansas brine resource development, including preparing the site and bromine tower for the plant.

Total cash capital expenditures during the first nine months of 2025 were $53.2 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 $37.2 million on capital expenditures, including $28.0 million for our Arkansas brine resource development, such as preparing the site and bromine tower for the plant.

Our Water & Flowback Services Division spent $15.9 million on capital expenditures to maintain, automate and upgrade its water management and flowback equipment fleet.

Investing activities during the first six 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.

Investing activities during the first nine months of 2025 also included $19.0 million of proceeds from the sale of our Kodiak stock, 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, lithium, magnesium, manganese and other key minerals contained in the brine.

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

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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.

We continue to advance our development efforts in Arkansas and we expect to complete the first phase of the project by year end, including site preparation and installation of the bromine tower.

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.

In September 2025, we published an updated definitive feasibility study and updated our technical resources report.

The updated definitive feasibility study and technical resources report advanced the classification of bromine and lithium resources and increased the totals in the measured and indicated mineral resources categories from our Evergreen Brine Unit.

In addition, the report identifies the presence of significant volumes of magnesium and manganese, which together with lithium, have been classified as critical minerals by the United States government.

We are on target to complete site preparation, have power infrastructure in place and finish installation of the bromine tower by the end of 2025.

We expect the facility to be operational by the end of 2027 with first production in 2028.

We are 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.

If the forecasted demand for our products and services increases or decreases, and as we proceed with development of brine resources in Arkansas, the amount and timing of planned expenditures on growth and expansion may be adjusted.

Financing Activities

Our financing activities for the first six months of 2025 include $2.1 million of capital lease payments associated with equipment leased primarily for the early production facilities in Argentina and equipment leases in the United States.

Our financing activities for the first nine months of 2025 include $3.4 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.

We are aggressively managing our working capital and capital expenditure needs in order to maximize our liquidity in the current environment.

We are aggressively managing our working capital and capital expenditure needs in order to maximize our liquidity in the current environment and fund our key growth initiatives.

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

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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 June 30, 2025, the market value of our investment in Standard Lithium was $1.6 million, with no holding restrictions on our ability to monetize our interests.

In addition, as of September 30, 2025, the market value of our investment in Standard Lithium was $2.7 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.

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Instability or volatility in the capital markets at the times we need to access capital may affect the cost of capital and the ability to raise capital for an indeterminable length of time.

If it is necessary to issue additional equity to fund our capital needs, additional dilution of our common stockholders will occur.

If it is necessary to issue additional equity to fund our capital needs, additional dilution of our common stockholders will

We periodically evaluate engaging in strategic transactions and may consider divesting non-core assets where our evaluation suggests such transactions are in the best interest of our business.

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

As of June 30, 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.

As of September 30, 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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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.

In August 2025, we entered into an operating lease agreement for new corporate office space located in Spring, Texas.

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

Information about the terms of our lease agreements can be found in our 2024 Annual Report .

Product and Asset Purchase Obligations

Information about the terms of our lease agreements can be found in our 2024 Annual Report and Corporate Office Lease in Note 1 - Organization, Basis of Presentation, and Significant Accounting Policies” in the Notes to Consolidated Financial Statements included in this Quarterly Report.

When we move out of our existing corporate office, which may occur as early as the fourth quarter of 2025, we expect to record a non-cash charge of approximately $8 million, including an approximately $5 million impairment of the right of use asset and accrual of approximately $3 million of estimated facility management and operational costs expected to be incurred between the move date and when our current least expires in December 2027, which are offset by concessions from the new lease during the same period.

The impairment amount is subject to change depending on the timing of the move to our new corporate office space and the estimate of costs for the remaining term of our existing corporate office lease.

We expect to realize savings from the new corporate office lease compared to the current lease arrangement.

Product Purchase Obligations

For information on product and asset purchase obligations, see Note 6 - “Commitments and Contingencies” in the Notes to Consolidated Financial Statements.

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the availability of raw materials and labor at reasonable prices;

risks related to acquisitions and our growth strategy;

risks related to acquisitions and our growth strategy, including our emerging growth initiatives;

restrictions under our debt agreements and the consequences of any failure to comply with debt covenants;

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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, heightened tensions with Iran, including the potential closure of the Strait of Hormuz, and other and continued hostilities in the Middle East, maritime piracy attacks;

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, heightened tensions with Iran, including any potential closure of the Strait of Hormuz, and other and continued hostilities in the Middle East, maritime piracy attacks;

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

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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