What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-02-25 compared with 2025-02-25 · 111 added, 189 removed, 133 unchanged (69% of the section changed)

11 unchanged sentences

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.

We operate through two reporting segments - Completion Fluids & Products Division and Water & Flowback Services Division.

Completion Fluids & Products Division activity for 2024 decreased slightly compared to 2023.

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

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

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

Our Water & Flowback Services Division activity also decreased compared to 2023 reflecting a slowdown in onshore activity in the Unites States and lower offshore completions fluids activity, as well as lower service revenues following the sale of early production facilities in Latin America.

We initiated a series of cost reduction actions in the second half of 2024 to adjust to market levels.

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

In August 2024, we published a definitive feasibility study and updated 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 base business.

These initiatives are expected to provide us the 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 are prioritizing our strategic investments on projects that can immediately impact our near-term results, with a focus on TETRA CS Neptune fluids in the Gulf of America, TETRA PureFlow+ electrolyte shipments to Eos Energy Enterprises, and further advancing our water desalination commercial pilot units that are expected to subsequently transition into long-term contracts for commercial desalination plants.

We currently operate through two reporting segments - Completion Fluids & Products and Water & Flowback Services.

Completion Fluids & Products Segment activity for 2025 increased compared to 2024, driven by stronger volumes for our deepwater completions fluids products, including the completion of three-well deepwater wells in the Gulf of America using our proprietary TETRA Neptune fluids.

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

The segment also benefited from increased activity levels from a new multi-well, multi-year deep water completion fluids contract in Brazil and continued strong results from our industrial calcium chloride business.

Looking forward into 2026, we expect to see incremental growth in our base completion fluids products and industrial chloride business.

We completed installation of our bulk electrolyte tanker loading system at our West Memphis plant and expect a significant increase in TETRA PureFlow Plus battery electrolyte revenue as Eos Energy Enterprises ramps up its production in early 2026.

Our Water & Flowback Services Segment activity decreased compared to 2024 reflecting a slowdown in onshore activity in the Unites States, as well as lower service revenues following the sale of early production facilities in Latin America.

We continued cost reduction actions during 2025 to adjust to market levels and continued deployment of automation technology.

We also secured contracts in Argentina in late 2025, allowing us to further diversify our revenue base to offset the weaker United States onshore environment.

Results of Operations

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

Consolidated Comparisons

Consolidated Results of Operations

December 31, Period to Period Change

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Revenues $ 630,932 $ 599,111 $ 31,821 5.3 %

Gross profit 139,853 153,645 (13,792) (9.0) %

Gross profit as a percentage of revenue

Cost of product sales and services

433,722 423,428 10,294 2.4 %

Exploration and pre-development costs — 12,119 (12,119) (100.0) %

Depreciation, amortization and accretion

37,099 35,721 1,378 3.9 %

Impairments and other charges

4,162 109 4,053 NM (1)

Gross profit 155,949 139,853 16,096 11.5 %

General and administrative expense 100,559 89,969 10,590 11.8 %

General and administrative expense as a percentage of revenue

Operating income

55,390 49,884 5,506 11.0 %

Interest expense, net

17,327 22,465 (5,138) (22.9) %

Loss on debt extinguishment

— 5,535 (5,535) (100.0) %

Other income, net (6,858) (9,112) 2,254 (24.7) %

Income before taxes and discontinued operations

Other expense (income), net

11,561 (6,858) 18,419 (268.6) %

Income before taxes and discontinued operations as a percentage of revenue

Provision (benefit) for income taxes

(84,878) 6,220 (91,098) NM (1)

Income before discontinued operations

Income from continuing operations before income taxes

26,502 28,742 (2,240) (7.8) %

Income (loss) from discontinued operations, net of taxes

(5,340) 278 (5,618) NM (1)

Net income 108,280 25,757 82,523 320.4 %

Loss attributable to noncontrolling interest

Income tax expense (benefit)

22,295 (84,878) 107,173 (126.3) %

Income from continuing operations

4,207 113,620 (109,413) (96.3) %

Loss from discontinued operations, net of income taxes

(1,209) (5,340) 4,131 (77.4) %

2,998 108,280 (105,282) (97.2) %

Less loss attributable to noncontrolling interest

Net income attributable to TETRA stockholders

$ 3,005 $ 108,284 $ (105,279) (97.2) %

(1) Percent change is not meaningful

Consolidated revenues for 2024 decreased compared to the prior year due to lower activity in both our Completion Fluids & Products and Water & Flowback Services divisions, where revenue decreased by $1.7 million and $25.4 million, respectively.

The decrease in our Completion Fluids & Products division is primarily due to lower completion fluid sales volumes from international markets.

The decrease in our Water & Flowback Services division is primarily from an overall decline in the US market for our production testing and water management services.

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

Consolidated gross profit as a percentage of revenue decreased slightly due to a decrease in revenue, an increase in operating costs and the effect of changes in product mix.

See Divisional Comparisons section below for additional discussion.

Exploration and Pre-Development Costs

Exploration and pre-development costs decreased $12.1 million compared to the prior year due to the capitalization of costs beginning in January 2024 following project developments, including the completion of a technical resources report, compared to expensing of costs associated with the front-end engineering and design study and appraisal costs associated with the activity in the prior year.

Consolidated revenues for 2025 increased compared to the prior year primarily due to higher activity in our Completion Fluids & Products Segment offset by lower activity in our Water & Flowback Services Segment, where revenue increased by $65.2 million and decreased $33.3 million, respectively.

The increase in our Completion Fluids & Products Segment is primarily due to the completion of three TETRA Neptune wells in the Gulf of America and higher completion fluid sales volumes from international markets.

The decrease in our Water & Flowback Services Segment is primarily from an overall decline in the market for our production testing and water management services in the United States.

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

Impairments and other charges

Consolidated impairments and other charges increased primarily due to a $3.6 million impairment of the right of use asset for our former corporate office lease following our move to our new corporate office space in December 2025.

Consolidated gross profit as a percentage of revenue increased slightly due to an increase in revenue, an increase in operating costs and the effect of changes in product mix.

See Segment Comparisons section below for additional discussion.

General and Administrative Expense

Consolidated general and administrative expenses decreased during 2024 compared to the prior year primarily due to a $7.4 million decrease in employee compensation from a reduction in equity-based compensation expense and incentive compensation as a result of lower operational margin performance.

Consolidated general and administrative expenses increased during 2025 compared to the prior year primarily due to a $6.8 million increase in equity-based compensation expense and incentive compensation expense as a result of higher shareholder return and operational margin performance and a $3.6 million increase in professional expense.

Interest Expense, Net

Consolidated interest expense, net, decreased $5.1 million during 2025 due to an increase in the interest expense capitalized for our Arkansas development as well as lower interest rates on our Term Credit Agreement.

Loss on Early Extinguishment of Debt

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

Other Income, net

Consolidated other income, net decreased during 2024 compared to the prior year primarily due to a $9.3 million reimbursement from our partner associated with the collaborative arrangement related to our Arkansas resource development opportunity prior to capitalization of net pre-development costs beginning in January 2024, and a $1.0 million increase in unrealized losses on our convertible note embedded option.

These decreases were partially offset by a $8.3 million increase in unrealized gains due to the change in the stock price of the Kodiak Gas Services, Inc.

KGS) (“Kodiak”) shares we received in exchange for CSI Compressco LP (“CSI Compressco’) common units we owned in connection with Kodiak’s acquisition of CSI Compressco in April 2024.

Consolidated loss on debt extinguishment decreased during 2025 as a result of $5.5 million from non-cash unamortized finance costs expensed in connection with the repayment of our prior Term Credit Agreement in January 2024.

Other Expense, net

Consolidated other expense, net, increased during 2025 compared to the prior year other income, net primarily due to a $9.2 million decrease in gains on our investment in Kodiak Gas Services Inc.

KGS, “Kodiak”) stock which we sold in January 2025, a $6.5 million increase in other expenses, which included the non-cash accrual of $5.9 million of operating expenses related to our former corporate office lease through the contractual lease end date in 2027 and a $4.5 million increase in foreign exchange losses.

These increases were partially offset by a $2.9 million increase in unrealized gains on our investment in Standard Lithium stock due to changes in their stock price.

Provision for Income Tax

Our consolidated effective tax rate for the year ended December 31, 2024 and December 31, 2023 was (295.3)% and 19.6%, respectively.

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

Consolidated income tax expense increased $107.2 million primarily due to the reversal of the valuation allowance during the prior year related to our United States deferred tax assets (federal and state).

We establish a valuation allowance to reduce the deferred tax assets when it is more likely than not that some portion or all of the deferred tax assets will not be realized.

As of each reporting date, management considers new evidence, both positive and negative, that could affect its view of the future realization of deferred tax assets.

As of December 31, 2024, in part because in the current year we achieved three years of cumulative pretax income in the United States tax jurisdiction, management determined that there is sufficient positive evidence to conclude that it is more likely than not that additional deferred taxes of $97.5 million are realizable.

As of December 31, 2024, in part because in the current year we achieved three years of cumulative pretax income in the United States tax jurisdiction, management determined that there was sufficient positive evidence to conclude that it is more likely than not that additional deferred taxes of $97.5 million are realizable.

We therefore reduced the valuation allowance accordingly.

Divisional Comparisons

Completion Fluids & Products Division

Our consolidated effective tax rate for the year ended December 31, 2025 and 2024 was 84.1% and (295.3)%, respectively.

The change in our effective tax rate was primarily the result of the reversal of the valuation allowance in the prior year.

In addition, we elected to change the United States tax classification of our Brazilian subsidiary from a partnership to a corporation.

While this tax election is expected to yield future tax benefits, the tax election resulted in recognition of approximately $6.9 million of federal deferred tax expense in the current year.

Our current-year effective tax rate also increased because we did not recognize a tax benefit on the $9.5 million cumulative translation adjustment loss related to the dissolution of our Canadian subsidiary as the loss was recognized for tax purposes in a prior year when the loss was not expected to be recognized under generally accepted accounting principles.

See Note 2 - “Basis of Presentation and Significant Accounting Policies” and Note 15 - “Income Taxes” in the Notes to Consolidated Financial Statements for further information on our income taxes.

Completion Fluids & Products Segment

December 31, Period to Period Change

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Gross profit $ 138,633 $ 109,305 $ 29,328 26.8 %

Gross profit as a percentage of revenue 35.1 % 34.4 %

Exploration and pre-development costs — 12,119 (12,119) (100.0) %

General and administrative expense 25,754 28,003 (2,249) (8.0) %

General and administrative expense as a percentage of revenue 8.3 % 8.9 %

Interest income, net

(713) (646) 67 10.4 %

Other (income) loss, net 1,369 (10,106) 11,475 (113.5) %

Income before taxes and discontinued operations $ 82,895 $ 78,314 $ 4,581 5.8 %

Income before taxes and discontinued operations as a percentage of revenue 26.6 % 25.0 %

The Completion Fluids & Products Division revenues decreased slightly primarily due to a decline of international brominated product sales, particularly in Europe and Latin America, offset by increased volumes and continued favorable pricing for industrial chemicals sales.

The Completion Fluids & Products Division gross profit during 2024 increased compared to the prior year despite slightly lower revenues due to pricing improvements.

Completion Fluids & Products Division profitability in future periods will continue to be affected by the mix of its products and services, market demand for our products and services, drilling and completions activity and commodity prices.

The Completion Fluids & Products Division pretax income increased during 2024 compared to the prior year primarily due to the increase in gross profit, along with a decrease in general and administrative expenses primarily due to a $1.9 million decrease in employee compensation and a $0.9 million decrease in professional services as well as a $0.6 million decrease in unrealized losses from our investment in Standard Lithium shares, which is included in other (income) loss, net.

These changes were partially offset by a $12.1 million decrease in exploration and pre-development costs and a $9.3 million decrease in other income from reimbursements from our partner due to the capitalization of costs net of reimbursements beginning in January 2024.

In addition, the unrealized losses on our convertible notes embedded derivative increased $1.0 million as the notes approach their maturity.

Water & Flowback Services Division

Operating income $ 111,034 $ 83,551 $ 27,483 32.9 %

The Completion Fluids & Products Segment revenues increased primarily due to the successful completion of three TETRA Neptune wells in the Gulf of America, higher international brominated product sales, particularly in Europe, and higher completion fluid sales in Latin America.

The Completion Fluids & Products Segment gross profit during 2025 increased compared to the prior year due to the increase in revenues mentioned above, particularly the higher-margin Neptune fluids.

Completion Fluids & Products Segment profitability in future periods will continue to be affected by the mix of its products and services, market demand for our products and services, drilling and completions activity and commodity prices.

The Completion Fluids & Products Segment operating income increased during 2025 compared to the prior year primarily due to the increase in gross profit, partially offset by a slight increase in general and administrative expenses primarily related to a $0.9 million increase in insurance cost and a $0.9 million increase in professional services.

Water & Flowback Services Segment

December 31, Period to Period Change

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Gross profit $ 21,238 $ 31,014 $ (9,776) (31.5) %

Gross profit as a percentage of revenue 10.8 % 15.0 %

General and administrative expense 19,116 19,452 (336) (1.7) %

General and administrative expense as a percentage of revenue 6.6 % 6.2 %

Interest expense, net

64 205 (141) (68.8) %

Other expense, net

1,134 1,757 (623) (35.5) %

Income before taxes and discontinued operations

$ 10,700 $ 25,724 $ (15,024) (58.4) %

Income before taxes and discontinued operations as a percentage of revenue

The Water & Flowback Services Division revenues decreased during 2024 compared to the prior year primarily due to an overall decline in the United States market from both our production testing and water management services.

This was partially offset by improved international market conditions in Latin America including an early production facility expansion as well as a full year of operation of an additional early production facility.

The Water & Flowback Services Division gross profit decreased due to lower revenues resulting from the decreased activity levels described above and operating cost inflation.

The Water & Flowback Services Division income before taxes decreased during 2024 compared to the prior year primarily due the decrease in gross profit, partially offset by a $0.4 million increase in other income, a $0.3 million decrease in general and administrative expenses from headcount reductions, and a $0.2 million increase in unrealized gain on our investment.

Operating (loss) income $ (33) $ 11,898 $ (11,931) (100.3) %

The Water & Flowback Services Segment revenues decreased during 2025 compared to the prior year primarily due to an overall decline in the United States market from both our production testing and water management services.

These declines were partially offset by increased flowback activity from improving TETRA SandStorm and auto-drillout utilization in key markets in the United States.

The Water & Flowback Services Segment gross profit decreased due to lower revenues resulting from the decreased activity levels described above and operating cost inflation.

The Water & Flowback Services Segment operating income decreased during 2025 compared to the prior year primarily due to the decrease in gross profit and an increase in general and administrative expense primarily related to a $1.5 million increase in labor and benefits expense and a $0.5 million increase in professional services.

Corporate Overhead

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(In Thousands, Except Percentages)

Depreciation and amortization $ 357 $ 400 $ (43) (10.8) %

General and administrative expense $ 51,689 $ 45,099 $ 6,590 14.6 %

Interest expense, net

Impairments and other charges

18,007 23,114 (5,107) (22.1) %

Loss on debt extinguishment

5,535 — 5,535 100.0 %

Other income, net

(9,361) (763) 8,598 1,126.9 %

Loss before taxes and discontinued operations

$ (64,853) $ (72,339) $ 7,486 10.3 %

Corporate Overhead loss before taxes decreased during 2024 compared to the prior year primarily due to an $8.3 million increase in unrealized gain on our investment in Kodiak, which acquired CSI Compressco in April 2024.

General administrative expenses decreased primarily due to a $4.5 million decrease in salary related expenses.

Impairments decreased $0.7 million primarily from an impairment of our corporate office lease in the prior year.

These were partially offset by a $5.5 million loss on debt extinguishment from non-cash unamortized finance costs expensed in connection with the repayment of our prior Term Credit Agreement in January 2024 and a $1.0 million increase in professional services.

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 and discontinued operations, excluding impairments, exploration and pre-development costs, certain special, non-recurring or other charges (or credits), interest, depreciation and amortization, income from collaborative arrangement and certain non-cash items such as equity-based compensation expense.

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

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

Such costs include exploratory drilling and associated engineering studies.

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

Exploration and pre-development costs, net of the associated income from collaborative arrangement are excluded from Adjusted EBITDA because they do not relate to the Company’s current business operations.

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

These costs are excluded from Adjusted EBITDA because they do not relate to the current year 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.

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 flows from 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 entities, as other entities may not calculate Adjusted EBITDA in the same manner as we do.

Management compensates for the limitations of Adjusted EBITDA as analytical tools by reviewing

the comparable U.S.

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

The following table reconciles net income (loss) to Adjusted EBITDA for the periods indicated:

December 31, 2024

Completion Fluids & Products Water & Flowback Services Corporate SG&A Other and Eliminations Total

(In Thousands, Except Percents)

Revenue $ 311,301 $ 287,810 $ — $ — $ 599,111

Net income (loss) before taxes and discontinued operations 82,895 10,700 (45,099) (19,754) 28,742

Completion fluids buy-back allowance adjustment

(1,776) — — — (1,776)

Impairments and other charges — — — 109 109

Former CEO stock appreciation right credit

— — (701) — (701)

Transaction, restructuring and other (income) expenses

(26) 349 1,026 — 1,349

Depreciation and amortization 371 357 14 3.9 %

Impairments and other charges 3,551 109 3,442 NM (1)

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

— — — 5,535 5,535

Unusual foreign exchange loss

— 1,387 — — 1,387

Interest (income) expense, net

(713) 64 — 23,114 22,465

Depreciation, amortization, and accretion

9,733 25,631 — 357 35,721

Equity-based compensation expense — — 6,572 — 6,572

Adjusted EBITDA $ 90,113 $ 38,131 $ (38,202) $ 9,361 $ 99,403

Adjusted EBITDA as % of revenue 28.9 % 13.2 % 16.6 %

December 31, 2023

Completion Fluids & Products Water & Flowback Services Corporate SG&A Other and Eliminations Total

(In Thousands, Except Percents)

Revenue $ 313,030 $ 313,232 $ — $ — $ 626,262

Net income (loss) before taxes and discontinued operations 78,314 25,724 (49,135) (23,204) $ 31,699

Insurance recoveries

(2,678) — — — (2,678)

Impairments and other charges

2,189 — 777 — 2,966

Exploration, pre-development costs, and collaborative arrangements

2,838 — — — 2,838

Adjustment to long-term incentives — — 1,526 — 1,526

Former CEO stock appreciation right expense — — 237 — 237

Transaction, restructuring, and other expenses

— — 502 — 502

Unusual foreign exchange loss

— 2,444 — — 2,444

Interest (income) expense, net

Other expense (income), net

5,512 (9,361) 14,873 (158.9) %

Depreciation, amortization, and accretion

Loss from continuing operations before income taxes

$ (79,130) $ (64,853) $ (14,277) 22.0 %

Equity-based compensation expense — — 10,622 — 10,622

Adjusted EBITDA $ 89,069 $ 53,249 $ (35,471) $ (13) $ 106,834

Adjusted EBITDA as % of revenue 28.5 % 17.0 % 17.1 %

(1) Percent change is not meaningful

Corporate Overhead loss from continuing operations before income taxes increased during 2025 compared to the prior year primarily due to a $6.6 million increase in general and administrative expense from higher equity-based compensation expense, incentive compensation expense and professional fees;

the non-cash accrual of $5.9 million of operating expenses related to our former corporate office lease through the expiration in 2027 and the $3.6 million impairment of the right of use asset for our former corporate office lease.

These expense increases were partially offset by a $5.1 million decrease in interest expense, net, due to an increase in the interest expense capitalized for our Arkansas project as well as lower interest rates on our Term Credit Agreement, a $9.2 million decrease in gains on our investment in Kodiak stock which we sold in January 2025, and the $5.5 million loss on debt extinguishment from non-cash unamortized finance costs expensed in connection with the repayment of our prior Term Credit Agreement in January 2024.

Liquidity and Capital Resources

We believe that our capital structure allows us to meet our financial obligations and fund future growth as needed, despite uncertain operating conditions and financial markets.

Our liquidity at the end of the fourth quarter of 2024 was $182.2 million consisting of $37.0 million of unrestricted cash, $75.0 million of availability under our delayed draw term loan and $70.2 million of availability under our credit agreements.

We believe that our capital structure allows us to meet our financial obligations and fund near-term growth as needed, despite uncertain operating conditions and financial markets.

Our liquidity as of December 31, 2025 was $220.8 million consisting of $72.6 million of unrestricted cash, $75.0 million of availability under our delayed-draw term loan and $73.2 million of availability under our credit agreements.

Liquidity is defined as unrestricted cash plus availability under the delayed draw from our Term Credit Agreement and availability under our revolving credit facilities.

The $75.0 million delayed-draw provision of the Term Credit Agreement expired on January 12, 2026.

Our consolidated sources and uses of cash for the years ended December 31, 2025 and 2024 are as follows:

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Operating Activities

Consolidated cash flows provided by operating activities totaled $36.5 million during 2024 compared to $70.2 million during the prior year, a decrease of $33.7 million.

Operating cash flows decreased compared to the prior year primarily due to decreased activity levels from changes in market conditions and product mix, as well as the effect of working capital movements.

We continue to monitor customer credit risk in the current environment and focus on serving larger capitalized oil and gas operators and national oil companies.

Consolidated cash flows provided by operating activities totaled $100.4 million during 2025 compared to $36.5 million during the prior year, an increase of $63.9 million.

Operating cash flows increased compared to the prior year primarily driven by continued strength in our offshore completion fluids and industrial calcium chloride businesses plus a strong focus on working capital management.

Investing Activities

Total cash capital expenditures during 2025 were $80.8 million.

Our Water & Flowback Services Division spent $23.4 million on capital expenditures, primarily to deploy additional SandStorm units to meet increased demands and maintain, automate and upgrade its water management and flowback equipment fleet.

Water and Flowback Services Division capital expenditures also included expenditures for expansion of an early production facility in Argentina.

Our Completion Fluids & Products Division spent $37.0 million on capital expenditures during 2024, including $22.4 million on our strategic initiatives in Arkansas, net of reimbursement from our Evergreen Unit partner, to advance engineering and reservoir studies and began laying the groundwork for plant site preparation and power infrastructure for our bromine project.

We also made additional investments to support higher activity levels in the United States and Europe.

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.

Our Completion Fluids & Products Segment spent $59.8 million on capital expenditures during 2025, including $45.2 million on our Arkansas projects, net of reimbursement from our Evergreen Unit partner, to advance engineering and reservoir studies and to complete Phase I of our bromine processing plant, excluding capitalized interest.

We also made additional investments to support strategic opportunities in the United States and Europe.

Our Water & Flowback Services Segment spent $21.0 million on capital expenditures, primarily to deploy additional TETRA SandStorm units to meet increased demands and maintain, automate and upgrade its water management and flowback equipment fleet.

Water & Flowback Services Segment capital expenditures also included expenditures for early production facilities in Argentina.

Investing activities during 2025 also included $19.0 million in proceeds from the sale of our Kodiak stock, net of broker commissions and fees, as well as $0.6 million in proceeds from asset sales.

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 and other minerals contained in the brine.

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

Properties” in this Annual Report.

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 technical resources report with respect to bromine from our Evergreen Brine Unit.

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

The extraction of bromine, lithium and other minerals from these brine leases will likely require a significant amount of time and capital.

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

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Financing Activities

During the year ended December 31, 2024, consolidated net cash used in financing activities was $8.9 million, consisting of $184.8 million borrowings under our new Term Credit Agreement and revolving credit facilities and $163.6 million repayments of our Term Credit Agreement and revolving credit facilities, $6.6 million debt issuance costs associated with our new term loan in January 2024 and the ABL Amendment in May 2024, as well as $1.4 million of payments of finance lease obligations.

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.

During the year ended December 31, 2025, consolidated net cash used in financing activities was $5.4 million, consisting of $4.7 million of payments of finance lease obligations, $1.3 million final payment for a seller-financed plant purchase in Latin America and $0.4 million borrowings offset by $0.4 million of repayments of our revolving credit facility.

Financing cash flows also included $3.9 million in proceeds from exercise of stock options, partially offset by $3.2 million for payroll taxes paid upon vesting of equity-based compensation awards.

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.

Term Credit Agreement.

On January 12, 2024, the Company entered into a definitive agreement for a $265.0 million credit facility consisting of a $190.0 million funded term loan and a $75.0 million delayed-draw term loan (collectively the “Term Credit Agreement”) that refinanced the Company’s prior Term Credit Agreement and provided capital to advance the Company’s Arkansas bromine processing project.

The maturity date of the New Term Credit Agreement is January 1, 2030.

The $75.0 million delayed-draw provision of the term loan expired on January 12, 2026.

The maturity date of the Term Credit Agreement is January 1, 2030.

Asset-Based Credit Agreement .

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In connection with the ABL Amendment, Bank of America, N.A.

became successor administrative agent to JPMorgan Chase Bank, N.A.

became successor administrative agent to JPMorgan

Chase Bank, N.A.

approximately $0.9 million of fees were incurred in connection with the ABL Amendment, which were deferred and will be amortized over the term of the ABL Credit Agreement.

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As of December 31, 2025, we had no balance outstanding under the ABL Credit Agreement and, subject to compliance with the covenants, borrowing base, and other provisions of the agreement that may limit borrowings, we had availability of $67.7 million under the ABL Credit Agreement.

As of February 25, 2025, we have no outstanding borrowings under our ABL Credit Agreement and $0.2 million letters of credit, resulting in $79.8 million of availability.

Swedish Credit Facility.

In January 2022, the Company entered into a revolving credit facility for seasonal working capital needs of subsidiaries in Sweden and Finland (“Swedish Credit Facility”).

The Company has a revolving credit facility for seasonal working capital needs of subsidiaries in Sweden and Finland (“Swedish Credit Facility”).

As of December 31, 2025, we had no balance outstanding and availability of approximately $5.4 million under the Swedish Credit Facility.

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Finland Credit Agreement.

In January 2022, the Company entered into an agreement guaranteed by certain accounts receivable and inventory in Finland (“Finland Credit Agreement”).

The Company has an agreement guaranteed by certain accounts receivable and inventory in Finland (“Finland Credit Agreement”).

As of December 31, 2025, we had $1.6 million of letters of credit outstanding against the Finland Credit Agreement.

The Finland Credit Agreement has been renewed by the Company through January 31, 2026.

The Finland Credit Agreement has been renewed by the Company through December 31, 2026.

As of December 31, 2025, we are in compliance with all covenants of our debt agreements.

See Note 10 - “Long-Term Debt and Other Borrowings” and Note 18 - “Subsequent Events” in the Notes to Consolidated Financial Statements for further information.

See Note 10 - “Long-Term Debt and Other Borrowings.”

Other Sources and Uses of Cash

In May 2025, we filed a universal shelf Registration Statement on Form S-3 with the SEC, which was declared effective by the SEC.

Pursuant to this registration statement, we have the ability to sell debt or equity securities in one or more public offerings up to an aggregate public offering price of $400 million.

This shelf registration statement currently provides us additional flexibility with regards to potential financing that we may undertake when market conditions permit or our financial condition may require.

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

In addition, as of December 31, 2024, the market value of our equity holdings of Kodiak and Standard Lithium were $18.4 million and $1.2 million, respectively, with no holding restrictions on our ability to monetize our investments.

In January 2025, we sold our Kodiak shares for proceeds of $19.0 million, net of transaction and broker fees.

Should additional capital be required, the ability to raise such capital through the issuance of additional debt or equity securities may currently be limited.

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

In addition, as of December 31, 2025, the market value of our equity holdings of Standard Lithium was $3.6 million with no holding restrictions on our ability to monetize our investments.

Should additional capital be required, the ability to raise such capital through the issuance of additional debt or equity securities may be limited by instability or volatility in the capital markets at the times we need to access capital may affect the cost of capital and the ability to raise capital for an indeterminable length of time.

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

We periodically evaluate engaging in strategic transactions and may consider divesting non-core assets where our evaluation

suggests such transaction is in the best interest of our business.

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

In challenging economic environments, we may experience increased delays and failures by customers to pay our invoices.

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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.

In the normal course of our Completion Fluids & Products Segment operations, we enter into supply agreements with certain manufacturers of various raw materials and finished products.

For information on product purchase obligations, see - Note 11 - “Commitments and Contingencies” in the Notes to Consolidated Financial Statements.

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Critical accounting estimates are estimates that require us to make assumptions about matters that were highly uncertain at the time the accounting estimate was made and if different estimates that we reasonably could have used in the current period, or changes in the accounting estimate that are reasonably likely occur from period to period, have a material impact on the presentation of our financial condition, changes in financial condition or results of operations.

We believe that of our significant accounting policies described in Note 2 - Basis of

Presentation and Significant Accounting Policies in Part II, Item 8 of this Annual Report on Form 10-K, the critical accounting estimates, assumptions, and judgments that have the most significant impact on our consolidated financial statements are described below.

We believe that of our significant accounting policies described in Note 2 - Basis of Presentation and Significant Accounting Policies in Part II, Item 8 of this Annual Report on Form 10-K, the critical accounting estimates, assumptions, and judgments that have the most significant impact on our consolidated financial statements are described below.

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis amounts.

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A portion of the carrying value of certain deferred tax assets are subject to a valuation allowance.

Loss Contingencies

We and certain of our subsidiaries are involved, in the normal course of business, in lawsuits, claims and other legal proceedings and audits.

We accrue reserves for these matters when we believe it is probable that a liability has been incurred and the liability can be reasonably estimated.

In addition, we disclose exposure to certain losses in excess of the amount recorded on the balance sheet for these matters if it is reasonably possible that an additional material loss may be incurred.

We review such loss contingencies on an ongoing basis.

Loss contingencies are based on judgments made by management with respect to the likely outcome of these matters and are adjusted as appropriate.

Management’s judgments could change based on new information, changes in, or interpretations of, laws or regulations, changes in management’s plans or intentions, opinions regarding the outcome of legal proceedings or other factors.

See Note 11 - Commitments and Contingencies - Litigation and Contingencies of Discontinued Operations in the Notes to Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K for additional information.

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-K

Item 7. Management’s Discussion and Analysis