UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~June 30, 2022~~March 31, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission File Number 1-13455

TETRA Technologies, Inc.

(Exact name of registrant as specified in its charter)


Delaware			74-2148293
(State or Other Jurisdiction of Incorporation or Organization)			(I.R.S. Employer Identification No.)

24955 Interstate 45 North
The Woodlands,
Texas			77380
(Address of Principal Executive Offices)			(Zip Code)

(281) 367-1983

(Registrant’s Telephone Number, Including Area Code)

_______________________________________________________________________

Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	TTI	New York Stock Exchange
Preferred Share Purchase Right	N/A	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of ~~July 29, 2022,~~April 28, 2023, there were ~~128,255,427~~129,399,384 shares outstanding of the Company’s Common Stock, $0.01 par value per share.


TETRA Technologies, Inc. and Subsidiaries
Table of Contents
			Page
PART I—FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Statements of Operations			1
Consolidated Statements of Comprehensive Income			2
Consolidated Balance Sheets			3
Consolidated Statements of Equity			5
Consolidated Statements of Cash Flows			6
Notes to Consolidated Financial Statements			7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			17
Item 3. Quantitative and Qualitative Disclosures about Market Risk			3031
Item 4. Controls and Procedures			3032

PART II—OTHER INFORMATION
Item 1. Legal Proceedings			3133
Item 1A. Risk Factors			3133
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			3134
Item 3. Defaults Upon Senior Securities			3134
Item 4. Mine Safety Disclosures			3134
Item 5. Other Information			3234
Item 6. Exhibits			3335
SIGNATURES			3436

Table of Contents

PART I

FINANCIAL INFORMATION

Item 1. Financial Statements.

TETRA Technologies, Inc. and Subsidiaries

Consolidated Statements of Operations

(In Thousands, Except Per Share Amounts)

(Unaudited)


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended March 31,
		2022		2021		2022		2021			2023		2022
Revenues:	Revenues:									Revenues:
Product sales	Product sales	$	70,301	$	62,583	$	140,356	$	107,615	Product sales	$	65,535	$	70,055
Services	Services	70,415		39,743		130,397		72,035		Services	80,674		59,982
Total revenues	Total revenues	140,716		102,326		270,753		179,650		Total revenues	146,209		130,037
Cost of revenues:	Cost of revenues:									Cost of revenues:
Cost of product sales	Cost of product sales	48,341		42,477		94,345		74,460		Cost of product sales	42,395		46,004
Cost of services	Cost of services	54,258		34,731		101,942		63,362		Cost of services	61,671		47,684
Depreciation, amortization, and accretion	Depreciation, amortization, and accretion	7,748		8,236		15,427		17,187		Depreciation, amortization, and accretion	8,670		7,679
Impairments and other charges		2,262		449		2,262		449

Insurance recoveries	Insurance recoveries	—		—		(3,750)		(110)		Insurance recoveries	(2,850)		(3,750)
Total cost of revenues	Total cost of revenues	112,609		85,893		210,226		155,348		Total cost of revenues	109,886		97,617
Gross profit	Gross profit	28,107		16,433		60,527		24,302		Gross profit	36,323		32,420
Exploration and appraisal costs		634		—		2,564		—
Exploration and pre-development costs										Exploration and pre-development costs	720		1,930
General and administrative expense	General and administrative expense	23,620		17,351		44,263		37,363		General and administrative expense	23,191		20,643
Interest expense, net	Interest expense, net	3,610		3,886		6,934		8,290		Interest expense, net	5,092		3,324

Other (income) expense, net		(1,037)		466		(3,448)		(4,306)
Income (loss) before taxes and discontinued operations		1,280		(5,270)		10,214		(17,045)
(Benefit) provision for income taxes		(479)		1,384		721		1,552
Income (loss) before discontinued operations		1,759		(6,654)		9,493		(18,597)
Discontinued operations:
(Loss) income from discontinued operations, net of taxes		(34)		(126)		(49)		120,864
Net income (loss)		1,725		(6,780)		9,444		102,267
Less: loss (income) attributable to noncontrolling interests(1)		20		27		21		(306)
Net income (loss) attributable to TETRA stockholders		$	1,745	$	(6,753)	$	9,465	$	101,961
Basic net income (loss) per common share:
Income (loss) from continuing operations		$	0.01	$	(0.05)	$	0.07	$	(0.15)
Other income, net										Other income, net	(214)		(2,411)
Income before taxes and discontinued operations										Income before taxes and discontinued operations	7,534		8,934
Provision for income taxes										Provision for income taxes	1,489		1,200
Income before discontinued operations										Income before discontinued operations	6,045		7,734

Loss from discontinued operations, net of taxes										Loss from discontinued operations, net of taxes	(12)		(15)
Net income										Net income	6,033		7,719
Loss attributable to noncontrolling interests										Loss attributable to noncontrolling interests	7		1
Net income attributable to TETRA stockholders										Net income attributable to TETRA stockholders	$	6,040	$	7,720
Basic net income per common share:										Basic net income per common share:
Income from continuing operations										Income from continuing operations	$	0.05	$	0.06
Income from discontinued operations	Income from discontinued operations	—		—		—		0.96		Income from discontinued operations	—		—
Net income (loss) attributable to TETRA stockholders		$	0.01	$	(0.05)	$	0.07	$	0.81
Net income attributable to TETRA stockholders										Net income attributable to TETRA stockholders	$	0.05	$	0.06
Weighted average basic shares outstanding	Weighted average basic shares outstanding	127,992		126,583		127,627		126,365		Weighted average basic shares outstanding	128,940		127,259
Diluted net income (loss) per common share:
Income (loss) from continuing operations		$	0.01	$	(0.05)	$	0.07	$	(0.15)
Diluted net income per common share:										Diluted net income per common share:
Income from continuing operations										Income from continuing operations	$	0.05	$	0.06
Income from discontinued operations	Income from discontinued operations	—		—		—		0.96		Income from discontinued operations	—		—
Net income (loss) attributable to TETRA stockholders		$	0.01	$	(0.05)	$	0.07	$	0.81
Net income attributable to TETRA stockholders										Net income attributable to TETRA stockholders	$	0.05	$	0.06
Weighted average diluted shares outstanding	Weighted average diluted shares outstanding	130,099		126,583		129,654		126,365		Weighted average diluted shares outstanding	129,975		129,211

~~(1)~~ (Income) loss attributable to noncontrolling interests includes zero for the three months ended June 30, 2022 and 2021, respectively, and zero and $(333) income for the six months ended June 30, 2022 and 2021, respectively, related to discontinued operations.

See Notes to Consolidated Financial Statements

Table of Contents

TETRA Technologies, Inc. and Subsidiaries

Consolidated Statements of Comprehensive Income

(In Thousands)

(Unaudited)

Three Months Ended
June 30, Six Months Ended
June 30,
2022 2021 2022 2021
Net income (loss) $ 1,725 $ (6,780) $ 9,444 $ 102,267
Foreign currency translation adjustment from continuing operations, net of taxes of $0 in 2022 and 2021 (3,414) 2,157 (3,222) (622)
Comprehensive income (loss) (1,689) (4,623) 6,222 101,645
Less: Comprehensive (income) loss attributable to noncontrolling interests 20 27 21 (306)
Comprehensive income (loss) attributable to TETRA stockholders $ (1,669) $ (4,596) $ 6,243 $ 101,339


	Three Months Ended March 31,
	2023		2022
Net income	$	6,033	$	7,719
Foreign currency translation adjustment from continuing operations, net of taxes of $0 in 2023 and 2022	1,421		192
Unrealized gain on investment in CarbonFree	121		—
Comprehensive income	7,575		7,911
Less: Comprehensive loss attributable to noncontrolling interests	7		1
Comprehensive income attributable to TETRA stockholders	$	7,582	$	7,912

See Notes to Consolidated Financial Statements

Table of Contents

TETRA Technologies, Inc. and Subsidiaries

Consolidated Balance Sheets

(In Thousands)


		June 30, 2022		December 31, 2021			March 31, 2023		December 31, 2022
		(Unaudited)					(Unaudited)
ASSETS	ASSETS					ASSETS
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	36,332	$	31,551	Cash and cash equivalents	$	16,683	$	13,592

Trade accounts receivable, net of allowances of $541 in 2022 and $289 in 2021		104,062		91,202
Trade accounts receivable, net of allowances of $517 in 2023 and $538 in 2022						Trade accounts receivable, net of allowances of $517 in 2023 and $538 in 2022	117,604		129,631
Inventories	Inventories	62,604		69,098		Inventories	83,941		72,113

Prepaid expenses and other current assets	Prepaid expenses and other current assets	20,698		18,539		Prepaid expenses and other current assets	18,587		23,112
Total current assets	Total current assets	223,696		210,390		Total current assets	236,815		238,448
Property, plant, and equipment:	Property, plant, and equipment:					Property, plant, and equipment:
Land and building	Land and building	24,420		26,380		Land and building	24,336		25,723
Machinery and equipment	Machinery and equipment	342,274		345,454		Machinery and equipment	313,968		318,693
Automobiles and trucks	Automobiles and trucks	14,079		16,174		Automobiles and trucks	11,112		11,832
Chemical plants	Chemical plants	59,402		61,565		Chemical plants	63,757		63,528
Construction in progress	Construction in progress	12,776		5,349		Construction in progress	9,657		7,660
Total property, plant, and equipment	Total property, plant, and equipment	452,951		454,922		Total property, plant, and equipment	422,830		427,436
Less accumulated depreciation	Less accumulated depreciation	(358,233)		(365,946)		Less accumulated depreciation	(317,579)		(325,856)
Net property, plant, and equipment	Net property, plant, and equipment	94,718		88,976		Net property, plant, and equipment	105,251		101,580
Other assets:	Other assets:					Other assets:
Patents, trademarks and other intangible assets, net of accumulated amortization of $45,022 in 2022 and $44,323 in 2021		34,752		36,958
Patents, trademarks and other intangible assets, net of accumulated amortization of $48,241 in 2023 and $46,996 in 2022						Patents, trademarks and other intangible assets, net of accumulated amortization of $48,241 in 2023 and $46,996 in 2022	32,005		32,955

Operating lease right-of-use assets	Operating lease right-of-use assets	35,127		36,973		Operating lease right-of-use assets	33,973		33,818
Investments	Investments	14,167		11,233		Investments	13,902		14,286
Other assets	Other assets	14,154		13,736		Other assets	13,638		13,279
Total other assets	Total other assets	98,200		98,900		Total other assets	93,518		94,338
Total assets	Total assets	$	416,614	$	398,266	Total assets	$	435,584	$	434,366

See Notes to Consolidated Financial Statements

Table of Contents

TETRA Technologies, Inc. and Subsidiaries

Consolidated Balance Sheets

(In Thousands, Except Share Amounts)


		June 30, 2022		December 31, 2021			March 31, 2023		December 31, 2022
		(Unaudited)					(Unaudited)
LIABILITIES AND EQUITY	LIABILITIES AND EQUITY					LIABILITIES AND EQUITY
Current liabilities:	Current liabilities:					Current liabilities:
Trade accounts payable	Trade accounts payable	$	44,999	$	37,943	Trade accounts payable	$	49,334	$	49,121
Current portion of long-term debt	Current portion of long-term debt	11		—		Current portion of long-term debt	2,162		3
Compensation and employee benefits	Compensation and employee benefits	23,485		20,811		Compensation and employee benefits	19,700		30,958
Operating lease liabilities, current portion	Operating lease liabilities, current portion	8,255		8,108		Operating lease liabilities, current portion	8,249		7,795
Accrued taxes	Accrued taxes	7,295		7,085		Accrued taxes	8,961		9,913
Accrued liabilities and other	Accrued liabilities and other	24,155		21,810		Accrued liabilities and other	22,127		25,557
Current liabilities associated with discontinued operations	Current liabilities associated with discontinued operations	1,367		1,385		Current liabilities associated with discontinued operations	914		920
Total current liabilities	Total current liabilities	109,567		97,142		Total current liabilities	111,447		124,267
Long-term debt, net	Long-term debt, net	153,191		151,936		Long-term debt, net	160,510		156,455
Operating lease liabilities	Operating lease liabilities	29,160		31,429		Operating lease liabilities	27,716		28,108
Asset retirement obligations	Asset retirement obligations	13,244		12,984		Asset retirement obligations	13,828		13,671
Deferred income taxes	Deferred income taxes	1,432		1,669		Deferred income taxes	2,059		2,038

Other liabilities	Other liabilities	4,484		4,543		Other liabilities	3,871		3,430
Total long-term liabilities	Total long-term liabilities	201,511		202,561		Total long-term liabilities	207,984		203,702
Commitments and contingencies		0		0
Commitments and contingencies (Note 7)						Commitments and contingencies (Note 7)
Equity:	Equity:					Equity:
TETRA stockholders’ equity:	TETRA stockholders’ equity:					TETRA stockholders’ equity:
Common stock, par value 0.01 per share; 250,000,000 shares authorized at June 30, 2022 and December 31, 2021; 131,394,102 shares issued at June 30, 2022 and 130,075,838 shares issued at December 31, 2021		1,314		1,301
Common stock, par value 0.01 per share; 250,000,000 shares authorized at March 31, 2023 and December 31, 2022; 132,522,347 shares issued at March 31, 2023 and 131,800,975 shares issued at December 31, 2022						Common stock, par value 0.01 per share; 250,000,000 shares authorized at March 31, 2023 and December 31, 2022; 132,522,347 shares issued at March 31, 2023 and 131,800,975 shares issued at December 31, 2022	1,325		1,318
Additional paid-in capital	Additional paid-in capital	476,381		475,624		Additional paid-in capital	479,993		477,820
Treasury stock, at cost; 3,138,675 shares held at June 30, 2022, and at December 31, 2021		(19,957)		(19,957)
Treasury stock, at cost; 3,138,675 shares held at March 31, 2023 and December 31, 2022						Treasury stock, at cost; 3,138,675 shares held at March 31, 2023 and December 31, 2022	(19,957)		(19,957)
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(50,154)		(46,932)		Accumulated other comprehensive loss	(47,521)		(49,063)
Retained deficit	Retained deficit	(300,867)		(310,332)		Retained deficit	(296,453)		(302,493)
Total TETRA stockholders’ equity	Total TETRA stockholders’ equity	106,717		99,704		Total TETRA stockholders’ equity	117,387		107,625
Noncontrolling interests	Noncontrolling interests	(1,181)		(1,141)		Noncontrolling interests	(1,234)		(1,228)
Total equity	Total equity	105,536		98,563		Total equity	116,153		106,397
Total liabilities and equity	Total liabilities and equity	$	416,614	$	398,266	Total liabilities and equity	$	435,584	$	434,366

See Notes to Consolidated Financial Statements

Table of Contents

TETRA Technologies, Inc. and Subsidiaries

Consolidated Statements of Equity

(In Thousands)

(Unaudited)

Common Stock
Par Value Additional Paid-In
Capital Treasury
Stock Accumulated Other
Comprehensive Income (Loss) Retained
Deficit Noncontrolling
Interest Total
Equity
Currency
Translation
Balance at December 31, 2021 $ 1,301 $ 475,624 $ (19,957) $ (46,932) $ (310,332) $ (1,141) $ 98,563
Net income for first quarter 2022 — — — — 7,720 (1) 7,719
Translation adjustment,
net of taxes of $0
— — — 192 — — 192
Comprehensive income 7,911
Equity compensation expense — 1,104 — — — — 1,104
Other 7 (673) — — — (10) (676)
Balance at March 31, 2022 $ 1,308 $ 476,055 $ (19,957) $ (46,740) $ (302,612) $ (1,152) $ 106,902
Net income for second quarter 2022 — — — — 1,745 (20) 1,725
Translation adjustment,
net of taxes of $0
— — — (3,414) — — (3,414)
Comprehensive loss (1,689)
Equity compensation expense — 1,159 — — — — 1,159
Other 6 (833) — — — (9) (836)
Balance at June 30, 2022 $ 1,314 $ 476,381 $ (19,957) $ (50,154) $ (300,867) $ (1,181) $ 105,536


	Common Stock Par Value		Additional Paid-In Capital		Treasury Stock		Accumulated Other Comprehensive Income (Loss)				Retained Deficit		Noncontrolling Interest		Total Equity
							Currency Translation		Unrealized Gain (Loss) on Investment

Balance at December 31, 2022	$	1,318	$	477,820	$	(19,957)	$	(48,991)	$	(72)	$	(302,493)	$	(1,228)	$	106,397
Net income (loss) for first quarter 2023	—		—		—		—		—		6,040		(7)		6,033
Translation adjustment, net of taxes of $0	—		—		—		1,421		—		—		—		1,421
Other comprehensive income	—		—		—		—		121		—		—		121
Comprehensive income															7,575



Treasury stock activity, net	—		—		—		—		—		—		—		—
Equity-based compensation(1)	—		3,514		—		—		—		—		—		3,514

Other	7		(1,341)		—		—		—		—		1		(1,333)
Balance at March 31, 2023	$	1,325	$	479,993	$	(19,957)	$	(47,570)	$	49	$	(296,453)	$	(1,234)	$	116,153

(1) Equity-based compensation for the three months ended March 31, 2023 includes $2.3 million for a portion of short-term incentive compensation that was settled through grants of restricted stock units rather than cash.

Common Stock
Par Value Additional Paid-In
Capital Treasury
Stock Accumulated Other
Comprehensive Loss Retained
Deficit Noncontrolling
Interest Total
Equity
Currency
Translation
Balance at December 31, 2020 $ 1,289 $ 472,134 $ (19,484) $ (49,914) $ (413,665) $ 80,702 $ 71,062
Net income for first quarter 2021 — — — — 108,714 333 109,047
Translation adjustment, net of taxes of $0 — — — (2,779) — — (2,779)
Comprehensive income 106,268
Deconsolidation of CSI Compressco — — — 7,168 — (82,775) (75,607)
Equity award activity 6 — — — — — 6
Treasury stock activity, net — — (449) — — — (449)
Equity compensation expense — 962 — — — 580 1,542
Other — (574) — — — 219 (355)
Balance at March 31, 2021 $ 1,295 $ 472,522 $ (19,933) $ (45,525) $ (304,951) $ (941) $ 102,467
Net loss for second quarter 2021 — — — — (6,753) (27) (6,780)
Translation adjustment, net of taxes of $0 — — — 2,157 — — 2,157
Comprehensive loss (4,623)
Dividend — — — — — (119) (119)
Equity award activity 2 — — — — — 2
Treasury stock activity, net — — (6) — — — (6)
Equity compensation expense — 1,592 — — — — 1,592
Other — (242) — — — (14) (256)
Balance at June 30, 2021 $ 1,297 $ 473,872 $ (19,939) $ (43,368) $ (311,704) $ (1,101) $ 99,057


	Common Stock Par Value		Additional Paid-In Capital		Treasury Stock		Accumulated Other Comprehensive Loss		Retained Deficit		Noncontrolling Interest		Total Equity
							Currency Translation

Balance at December 31, 2021	$	1,301	$	475,624	$	(19,957)	$	(46,932)	$	(310,332)	$	(1,141)	$	98,563
Net income (loss) for first quarter 2022	—		—		—		—		7,720		(1)		7,719
Translation adjustment, net of taxes of $0	—		—		—		192		—		—		192
Comprehensive income													7,911



Equity compensation expense	—		1,104		—		—		—		—		1,104
Other	7		(673)		—		—		—		(10)		(676)
Balance at March 31, 2022	$	1,308	$	476,055	$	(19,957)	$	(46,740)	$	(302,612)	$	(1,152)	$	106,902

See Notes to Consolidated Financial Statements

Table of Contents

TETRA Technologies, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(In Thousands, Unaudited)


		Six Months Ended June 30,					Three Months Ended March 31,
		2022		2021			2023		2022
Operating activities:	Operating activities:					Operating activities:
Net income	Net income	$	9,444	$	102,267	Net income	$	6,033	$	7,719
Reconciliation of net income to net cash provided by operating activities:	Reconciliation of net income to net cash provided by operating activities:					Reconciliation of net income to net cash provided by operating activities:
Depreciation, amortization, and accretion	Depreciation, amortization, and accretion	15,427		17,215		Depreciation, amortization, and accretion	8,670		7,679
Gain on GP Sale		—		(120,574)
Impairment and other charges		2,262		449
Gain on investments		(390)		(5,613)

Loss (gain) on investments						Loss (gain) on investments	505		(1,100)
Equity-based compensation expense	Equity-based compensation expense	2,263		2,554		Equity-based compensation expense	1,276		1,104
Provision for doubtful accounts		244		216
Provision for (recovery of) credit losses						Provision for (recovery of) credit losses	(21)		61

Amortization and expense of financing costs	Amortization and expense of financing costs	1,573		1,429		Amortization and expense of financing costs	884		780
Insurance recoveries associated with damaged equipment	Insurance recoveries associated with damaged equipment	(3,750)		(110)		Insurance recoveries associated with damaged equipment	(2,850)		(3,750)

Warrants fair value adjustment		—		3,021

Gain on sale of assets	Gain on sale of assets	(719)		(275)		Gain on sale of assets	(170)		(218)
Other non-cash charges		(313)		(176)
Other non-cash credits						Other non-cash credits	(100)		(101)
Changes in operating assets and liabilities:	Changes in operating assets and liabilities:					Changes in operating assets and liabilities:
Accounts receivable	Accounts receivable	(14,581)		(15,694)		Accounts receivable	12,626		(13,185)
Inventories	Inventories	4,519		5,456		Inventories	(11,313)		4,579
Prepaid expenses and other current assets	Prepaid expenses and other current assets	(2,282)		(2,442)		Prepaid expenses and other current assets	4,496		2,510
Trade accounts payable and accrued expenses	Trade accounts payable and accrued expenses	11,185		21,295		Trade accounts payable and accrued expenses	(11,179)		9
Other	Other	(1,079)		(1,411)		Other	128		(153)
Net cash provided by operating activities	Net cash provided by operating activities	23,803		7,607		Net cash provided by operating activities	8,985		5,934
Investing activities:	Investing activities:					Investing activities:
Purchases of property, plant, and equipment, net	Purchases of property, plant, and equipment, net	(20,412)		(12,489)		Purchases of property, plant, and equipment, net	(12,784)		(9,305)
Proceeds from GP Sale, net of cash divested		—		18

Proceeds from sale of property, plant, and equipment	Proceeds from sale of property, plant, and equipment	1,194		754		Proceeds from sale of property, plant, and equipment	289		416
Proceeds from insurance recoveries associated with damaged equipment	Proceeds from insurance recoveries associated with damaged equipment	3,750		110		Proceeds from insurance recoveries associated with damaged equipment	2,850		3,750
Other investing activities	Other investing activities	(451)		1,156		Other investing activities	(1,552)		(453)
Net cash used in investing activities	Net cash used in investing activities	(15,919)		(10,451)		Net cash used in investing activities	(11,197)		(5,592)
Financing activities:	Financing activities:					Financing activities:
Proceeds from long-term debt		1,667		—
Principal payments on long-term debt		(3,267)		(29,320)
Proceeds from long-term debt and credit agreements						Proceeds from long-term debt and credit agreements	52,756		1,533
Principal payments on long-term debt and credit agreements						Principal payments on long-term debt and credit agreements	(47,362)		(811)
Payments on financing lease obligations	Payments on financing lease obligations	(1,174)		—		Payments on financing lease obligations	(258)		—

Debt issuance costs and other financing activities		—		(455)
Net cash used in financing activities		(2,774)		(29,775)

Net cash provided by financing activities						Net cash provided by financing activities	5,136		722
Effect of exchange rate changes on cash	Effect of exchange rate changes on cash	(329)		(896)		Effect of exchange rate changes on cash	167		236
Increase (decrease) in cash and cash equivalents		4,781		(33,515)
Cash and cash equivalents and restricted cash at beginning of period		31,551		83,894
Cash and cash equivalents at beginning of period associated with discontinued operations		—		16,577
Cash and cash equivalents and restricted cash at beginning of period associated with continuing operations		31,551		67,317

Cash and cash equivalents and restricted cash at end of period associated with continuing operations		$	36,332	$	50,379
Increase in cash and cash equivalents						Increase in cash and cash equivalents	3,091		1,300
Cash and cash equivalents at beginning of period						Cash and cash equivalents at beginning of period	13,592		31,551

Cash and cash equivalents at end of period						Cash and cash equivalents at end of period	$	16,683	$	32,851

See Notes to Consolidated Financial Statements

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TETRA Technologies, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

NOTE 1 – ORGANIZATION, BASIS OF PRESENTATION, AND SIGNIFICANT ACCOUNTING POLICIES

Organization

We are an industrial and oil and gas products and services company operating on six continents, focused on bromine-based completion fluids, calcium chloride, water management solutions, frac flowback and production well testing services. We were incorporated in Delaware in 1981 and are composed of 2two segments – Completion Fluids & Products Division and Water & Flowback Services Division. Unless the context requires otherwise, when we refer to “we,” “us,” and “our,” we are describing TETRA Technologies, Inc. and its subsidiaries on a consolidated basis.

Presentation

Our unaudited consolidated financial statements include the accounts of our wholly owned or controlled subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The information furnished reflects all normal recurring adjustments, which are, in the opinion of management, necessary to provide a fair statement of the results for the interim periods. Operating results for the period ended ~~June 30, 2022~~March 31, 2023 are not necessarily indicative of results that may be expected for the twelve months ended December 31, ~~2022.~~2023.

We have reflected the operations of our former Compression Division and Offshore Division as discontinued operations for all periods presented. See Note 2 - “Discontinued Operations” for further information. Unless otherwise noted, amounts and disclosures throughout these Notes to Consolidated Financial Statements relate solely to continuing operations and exclude all discontinued operations.

The accompanying unaudited consolidated financial statements have been prepared in accordance with Rule 10-01 of Regulation S-X for interim financial statements required to be filed with the U.S. Securities and Exchange Commission (“SEC”) and do not include all information and footnotes required by U.S. generally accepted accounting principles (“U.S. GAAP”) for complete financial statements. These financial statements should be read in conjunction with the financial statements for the year ended December 31, ~~2021~~2022 and notes thereto included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on February ~~28, 2022~~27, 2023 (the “~~2021~~2022 Annual Report”).

Tax Benefits Preservation Plan

On February 28, 2023, the Board of Directors adopted a Tax Benefits Preservation Plan (the “Tax Plan”) designed to protect the availability of the Company’s net operating loss carryforwards and other tax attributes (collectively, the “Tax Attributes”), which may be utilized in certain circumstances to reduce the Company’s future income tax obligations. The Tax Plan is intended to reduce the likelihood that any changes in the Company’s investor base would limit the Company’s future use of its Tax Attributes as a result of the Company experiencing an “ownership change” under Section 382 (“Section 382”) of the Internal Revenue Code of 1986, as amended (the “Code”). If a corporation experiences an “ownership change,” any NOLs, losses or deductions attributable to a “net unrealized built-in loss” and other Tax Attributes could be substantially limited, and timing of the usage of such Tax Attributes could be substantially delayed. A corporation generally will experience an ownership change if one or more stockholders (or group of stockholders) who are each deemed to own at least 5% of the corporation’s stock increase their ownership by more than 50 percentage points over their lowest ownership percentage within a testing period (generally, a rolling three-year period).

In adopting the Tax Plan, the Board of Directors declared a dividend of one Series A Junior Participating Preferred Stock purchase right (the “Rights”) for each outstanding share of Common Stock pursuant to the terms of the Tax Plan. Initially, each Right entitles the registered holder to purchase from the Company one one-thousandth of a share of Series A Junior Participating Preferred Stock, par value $0.01 per share, of the Company (the “Preferred Stock”) at a price of $20.00 per one one-thousandth of a share of Preferred Stock (the “Purchase Price”), subject to adjustment. The Rights will cause substantial dilution to a person or group that acquires 4.99% or more of the Common Stock (or to a person or group that already owns 4.99% or more of the Company’s Common Stock if

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such person or group acquires additional shares representing 2% of the Company’s then outstanding shares of Common Stock) without prior approval from the Board of Directors.

The Rights will expire at the earliest of: (i) the close of business on February 28, 2026 (the “Final Expiration Date”); (ii) the time at which the Rights are redeemed pursuant to the Tax Plan, (iii) the time at which the Rights are exchanged pursuant to the Tax Plan; (iv) the closing of any merger or other acquisition transaction involving the Company pursuant to an agreement as described in the penultimate paragraph of Section 1.3 of the Tax Plan; (v) the close of business on the effective date of the repeal of Section 382 of the Code if the Board determines that the Tax Plan is no longer necessary or desirable for the preservation of the Tax Attributes; or (vi) the close of business on the first day of a taxable year of the Company following a Board determination that no Tax Attributes may be carried forward or otherwise utilized.

The Tax Plan adopted by the Board of Directors is similar to plans adopted by other publicly held companies with significant NOLs or other substantial tax benefits and is not designed to prevent any action that the Board of Directors determines to be in the best interest of the Company and its stockholders. As discussed further in the Company’s definitive proxy statement for the annual meeting of stockholders, which is anticipated to be held on May 24, 2023, the Company intends to submit the Tax Plan to our stockholders for ratification at such meeting.

The Rights are in all respects subject to and governed by the provisions of the Tax Plan. The foregoing summary provides only a general description of the Tax Plan and does not purport to be complete. The Tax Plan, which specifies the terms of the Rights and includes as Exhibit A the Form of Certificate of Designation of Series A Junior Participating Preferred Stock of the Company and as Exhibit B the Form of Right Certificate, is attached to the Company’s Current Report on Form 8-K, which was filed with the SEC on March 1, 2023, as Exhibit 4.1 and is incorporated herein by reference. The foregoing summary should be read together with the entire Tax Plan and is qualified in its entirety by reference to the Tax Plan.

Significant Accounting Policies

Our significant accounting policies are described in the notes to our consolidated financial statements for the year ended December 31, ~~2021~~2022 included in our ~~2021~~2022 Annual Report. There have been no significant changes in our accounting policies or the application thereof during the ~~second~~first quarter of ~~2022.~~2023.

Use of Estimates

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

Reclassifications

Certain previously reported financial information has been reclassified to conform to the current year's presentation. The impact of reclassifications was not significant to the prior year's overall presentation.

Foreign Currency Translation

We have designated the Euro, the British pound, the Canadian dollar, the Brazilian real, and the Mexican peso as the functional currencies for our operations in Finland and Sweden, the United Kingdom, Canada, Brazil,

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and certain of our operations in Mexico, respectively. The United States dollar is the designated functional currency for all of our other non-U.S. operations. The cumulative translation effects of translating the applicable accounts from the functional currencies into the United States dollar at current exchange rates are included as a separate component of equity. Foreign currency exchange (gains) and losses are included in other (income) expense, net and totaled ~~$(0.8)~~$0.2 million and ~~$(1.6)~~$(0.8) million during the three ~~and six~~ months ended ~~June 30,~~March 31, 2023 and 2022, ~~respectively, and $(0.2) million and $(1.0) million during the three and six months ended June 30, 2021,~~ respectively.

Fair Value Measurements

We utilize fair value measurements to account for certain items and account balances within our consolidated financial statements. Fair value measurements are utilized on a recurring basis in the determination of the carrying values of certain investments. See Note 8 - “Fair Value Measurements” for further discussion. Fair

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value measurements are also utilized on a nonrecurring basis in certain circumstances, including the impairment of long-lived assets (a Level 3 fair value measurement).

Supplemental Cash Flow Information

Supplemental cash flow information ~~from continuing and discontinued operations~~ is as follows:

Six Months Ended
June 30,
2022 2021
(in thousands)
Supplemental cash flow information(1):

Interest paid $ 8,056 $ 7,577
Income taxes paid 1,470 853
Decrease in accrued capital expenditures 1,712 1,434

~~(1)~~ ~~Prior-year information includes the activity for CSI Compressco for January only.~~


	Three Months Ended March 31,
	2023		2022
	(in thousands)
Interest paid	$	4,513	$	3,096
Income taxes paid	$	1,358	$	741

	March 31, 2023		December 31, 2022
	(in thousands)
Accrued capital expenditures	$	2,490	$	4,901

New Accounting Pronouncements

~~Standards not yet~~Standard adopted during 2023

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial ~~Instruments.”~~Instruments”. ASU 2016-13 amends the impairment model to utilize an expected loss methodology in place of the ~~currently used~~previously-used incurred loss methodology, which will result in the more timely recognition of losses on financial instruments not accounted for at fair value through net income. The provisions require credit impairments to be measured over the contractual life of an asset and developed with consideration for past events, current conditions, and forecasts of future economic information. Credit impairment will be accounted for as an allowance for credit losses deducted from the amortized cost basis at each reporting date. We are continuing to work through our implementation plan which includes evaluating the impact on our allowance for doubtful accounts methodology, identifying new reporting requirements, and implementing changes to business processes, systems, and controls to support adoption of the standard. Upon adoption, the allowance for doubtful accounts is expected to increase with an offsetting adjustment to retained earnings. Updates at each reporting date after initial adoption will be recorded through selling, general, and administrative expense. On January 1, 2023, we adopted ASU ~~2016-13 will become effective for us in the first quarter~~2016-13. The adoption of ~~fiscal 2023. We continue to assess the potential effects of these changes to~~this standard did not have a material impact on our consolidated financial statements.

Standard not yet adopted

In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848)”, which provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by the discontinuation of the London Interbank Offered Rate (“LIBOR”) or by another reference rate expected to be discontinued. In December 2022, the FASB issued ASU 2022-06, “Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848.” Entities may elect to apply the amendments for contract modifications made on or before December 31, ~~2022.~~2024. During the three months ended September 30, 2021, our asset-based credit agreement and term credit agreement were amended to allow replacement of LIBOR with another benchmark rate, such as the secured overnight financing rate (“SOFR”) in the event that LIBOR cannot be determined or does not fairly reflect the cost to our lenders of funding our loans. If LIBOR is not available, we cannot predict what alternative index would be negotiated with our lenders. We will assess the impact of adopting ASU 2020-04, as extended by ASU 2022-06, on our consolidated financial statements ~~if or~~ when our contracts are modified to eliminate references to LIBOR.

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NOTE 2 – DISCONTINUED OPERATIONS

On January 29, 2021, we entered into the Purchase and Sale Agreement with Spartan Energy Partners, LP (“Spartan”) pursuant to which we sold the general partner of CSI Compressco, including the incentive distribution rights (“IDRs”) in CSI Compressco LP, (“CSI Compressco”), and approximately 23.1% of the outstanding limited partner interests in CSI Compressco, in exchange for the combination of $13.9 million in cash and $3.1 million in contingent consideration in the form of cash and/or CSI Compressco common units if CSI Compressco achieves certain financial targets on or before December 31, 2022. Throughout this Quarterly Report, we refer to this transaction as the “GP Sale.”Following the closing of the transaction, we retained an interest in CSI Compressco representing approximately 3.7% of the outstanding common units as of June 30, 2022. As a result of these transactions, we no longer consolidate CSI Compressco as of January 29, 2021. We recognized a primarily non-cash accounting gain of $120.6 million during the three-month period ended March 31, 2021 related to the GP Sale. The gain is included in income (loss) from discontinued operations, net of taxes in our consolidated statement of operations. We provided back-office support to CSI Compressco under a Transition Services Agreement that ended during the three-month period ended March 31, 2022. During the three months ended June 30, 2022, we sold equipment to CSI Compressco for approximately $0.3 million. Our interest in CSI Compressco and the general partner represented substantially all of our Compression Division.

~~In addition, on~~ March 1, 2018, we closed a series of related transactions that resulted in the disposition of our Offshore Division, consisting of our Offshore Services and Maritech segments. Our former ~~Compression and~~ Offshore ~~Divisions are~~Division is reported as discontinued operations for all periods presented. Our consolidated balance sheets and consolidated statements of operations report discontinued operations separate from continuing operations. Our consolidated statements of comprehensive income, statements of equity and statements of cash flows combine continuing and discontinued operations. Our ~~prior-year consolidated statement of~~loss from discontinued operations ~~statement of comprehensive income, statement of equity and statement of cash flows include CSI Compressco activity for January 1 through January 29 in 2021. Our consolidated statements of cash flows~~ for the ~~six-month period~~three months ended ~~June 30, 2021 included $3.0 million,~~March 31, 2023 and 2022 consist of ~~capital expenditures related to~~general and administrative expense associated with ongoing litigation for our former ~~Compression division.~~Offshore Division. A summary of additional financial information related to our discontinued operations is as follows:

~~Reconciliation of the Line Items Constituting Pretax Loss from Discontinued Operations to the After-Tax Loss from Discontinued Operations~~

~~(in thousands, unaudited)~~

Three Months Ended
June 30, 2022
Offshore Services Maritech Total
Major classes of line items constituting loss from discontinued operations
Cost of revenues $ 54 $ — $ 54
General and administrative expense 8 — $ 8
Other expense, net — (28) (28)
Pretax income (loss) from discontinued operations (62) 28 (34)
Loss from discontinued operations attributable to TETRA stockholders $ (34)

Three Months Ended
June 30, 2021
Compression Offshore Services Total
Major classes of line items constituting loss from discontinued operations
General and administrative expense — 5 5
Other (income) expense, net 121 — 121
Pretax loss from discontinued operations (121) (5) (126)
Loss from discontinued operations attributable to TETRA stockholders $ (126)

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Six Months Ended
June 30, 2022
Offshore Services Maritech Total
Major classes of line items constituting income from discontinued operations
Cost of revenues 55 — 55
General and administrative expense 22 — 22
Other expense, net — (28) (28)
Pretax income (loss) from discontinued operations (77) 28 (49)
Loss from discontinued operations attributable to TETRA stockholders $ (49)

Six Months Ended
June 30, 2021
Compression Offshore Services Total
Major classes of line items constituting loss from discontinued operations
Revenue $ 18,968 $ — $ 18,968
Cost of revenues 11,474 28 11,502
General and administrative expense 2,795 — 2,795
Interest expense, net 4,336 — 4,336
Other expense, net 15 — 15
Pretax income (loss) from discontinued operations 348 (28) 320
Pretax gain on disposal of discontinued operations 120,574
Total pretax income from discontinued operations 120,894
Income tax provision 30
Total income from discontinued operations 120,864
Income from discontinued operations attributable to noncontrolling interest (333)
Income from discontinued operations attributable to TETRA stockholders $ 120,531

Reconciliation of Major Classes of Assets and Liabilities of the Discontinued Operations to Amounts Presented Separately in the Statement of Financial Position

(in thousands)


		June 30, 2022							March 31, 2023
		Offshore Services		Maritech		Total			Offshore Services		Maritech		Total

		(unaudited)							(unaudited)

Carrying amounts of major classes of liabilities included as part of discontinued operations	Carrying amounts of major classes of liabilities included as part of discontinued operations							Carrying amounts of major classes of liabilities included as part of discontinued operations
Trade payables	Trade payables	$	1,272	$	—	$	1,272	Trade payables	$	319	$	—	$	319

Accrued liabilities and other	Accrued liabilities and other	—		95		95		Accrued liabilities and other	500		95		595

Total liabilities associated with discontinued operations	Total liabilities associated with discontinued operations	$	1,272	$	95	$	1,367	Total liabilities associated with discontinued operations	$	819	$	95	$	914

December 31, 2021
Offshore Services Maritech Total
Carrying amounts of major classes of liabilities included as part of discontinued operations
Trade payables $ 1,157 $ — $ 1,157
Accrued liabilities and other — 228 228
Total liabilities associated with discontinued operations $ 1,157 $ 228 $ 1,385


	December 31, 2022
	Offshore Services		Maritech		Total









Carrying amounts of major classes of liabilities included as part of discontinued operations
Trade payables	$	319	$	—	$	319

Accrued liabilities and other	506		95		601


Total liabilities associated with discontinued operations	$	825	$	95	$	920

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NOTE 3 – REVENUE FROM CONTRACTS WITH CUSTOMERS

Our contract asset balances, primarily associated with contractual invoicing milestones and/or customer documentation requirements, were ~~$32.2~~$28.8 million and ~~$20.5~~$33.1 million as of ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, respectively. Contract assets, along with billed trade accounts receivable, are included in trade accounts receivable in our consolidated balance sheets.

Unearned income includes amounts in which the Company was contractually allowed to invoice prior to satisfying the associated performance obligations. We are also party to agreements in which Standard Lithium Ltd. (NYSE: SLI) (“Standard Lithium”) has the right to explore, and an option to acquire the rights to produce and extract lithium in our Arkansas leases as well as other potential resources in the Mojave region of California. The Company receives cash and stock of Standard Lithium under the terms of the arrangements. The cash and stock component of consideration received is initially recorded as unearned income based on the quoted market price at the time the stock is received, then recognized in income over the contract term. Unearned income balances were ~~$7.9~~$4.2 million and ~~$3.2~~$3.7 million as of ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, respectively, and vary based on the timing of invoicing and performance obligations being met and the timing of the receipt of stock and ~~shares~~cash from Standard Lithium. Unearned income is included in accrued liabilities and other in our consolidated balance sheets. WeDuring the three-month periods ended March 31, 2023 and March 31, 2022, contract costs were not significant.

During the three-month periods ended March 31, 2023 and March 31, 2022, we recognized approximately ~~$0.8~~$0.7 million and ~~$0.5~~$0.3 million of revenue, respectively, deferred in unearned income as of the beginning of the period. We also recognized approximately $0.9 million and $0.6 million of income during the ~~six-month~~three-month periods ended ~~June 30,~~March 31, 2023 and March 31, 2022, ~~and June 30, 2021,~~ respectively, related to the Standard Lithium arrangements. These amounts are included in other income, net in our consolidated statements of operations. Other revenue recognized during the three-month and six-month periods ended June 30, 2022 and the three-month period ended June 30, 2021 deferred as of the beginning of the period was not significant. During the six-month period ended June 30, 2021, we recognized approximately $1.4 million of revenue deferred as of the preceding year end. During the three-month and six-month periods ended June 30, 2022 and June 30, 2021, contract costs were not significant.

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We disaggregate revenue from contracts with customers into Product Sales and Services within each segment, as noted in our 2two reportable segments in Note 10 - “Industry Segments.” In addition, we disaggregate revenue from contracts with customers by geography based on the following table below.


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended March 31,
		2022		2021		2022		2021			2023		2022
		(in thousands)									(in thousands)
Completion Fluids & Products	Completion Fluids & Products									Completion Fluids & Products
United States	United States	$	34,344	$	25,229	$	73,188	$	49,824	United States	$	32,824	$	38,843
International	International	40,454		39,378		74,804		61,304		International	36,218		34,351
		74,798		64,607		147,992		111,128			69,042		73,194
Water & Flowback Services	Water & Flowback Services									Water & Flowback Services
United States	United States	61,654		35,463		114,417		64,395		United States	68,338		52,763
International	International	4,264		2,256		8,344		4,127		International	8,829		4,080
		65,918		37,719		122,761		68,522			77,167		56,843

Total Revenue	Total Revenue									Total Revenue
United States	United States	95,998		60,692		187,605		114,219		United States	101,162		91,606
International	International	44,718		41,634		83,148		65,431		International	45,047		38,431
		$	140,716	$	102,326	$	270,753	$	179,650		$	146,209	$	130,037

NOTE 4 – INVENTORIES

Components of inventories as of ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021~~2022 are as follows:


		June 30, 2022		December 31, 2021			March 31, 2023		December 31, 2022
		(in thousands)					(in thousands)
Finished goods	Finished goods	$	52,924	$	59,925	Finished goods	$	71,590	$	60,481
Raw materials	Raw materials	2,872		2,827		Raw materials	4,521		3,734
Parts and supplies	Parts and supplies	5,048		4,713		Parts and supplies	6,063		6,432
Work in progress	Work in progress	1,760		1,633		Work in progress	1,767		1,466
Total inventories	Total inventories	$	62,604	$	69,098	Total inventories	$	83,941	$	72,113

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Finished goods inventories include newly manufactured clear brine fluids as well as used brines that are repurchased from certain customers for recycling.

NOTE 5 – INVESTMENTS

Our investments as of March 31, 2023 and December 31, 2022 consist of the following:


	March 31, 2023		December 31, 2022
	(in thousands)
Investment in CSI Compressco	$	6,443	$	6,967
Investment in CarbonFree	5,939		6,139
Investment in Standard Lithium	1,520		1,180
Total Investments	$	13,902	$	14,286

Following the ~~closing~~January 2021 sale of the ~~GP Sale,~~general partner of CSI Compressco LP (“CSI Compressco”), we continue to own approximately 3.7% of the outstanding CSI Compressco common units (NASDAQ: CCLP) as of ~~June 30, 2022.~~ March 31, 2023.

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We have an intellectual property joint development agreement in place with CarbonFree to evaluate potential new technologies. CarbonFree is a carbon capture company with patented technologies that capture CO2 and mineralize emissions to make commercial, carbon-negative chemicals. In December 2021, we invested $5.0 million in a convertible note issued by CarbonFree. Our exposure to potential losses by CarbonFree is limited to our investment in the convertible note and associated capitalized and accrued interest.

In addition, we are party to agreements in which Standard Lithium has the right to explore, and an option to acquire the rights to produce and extract lithium in our Arkansas leases as well as additional potential resources in the Mojave region of California. The Company receives cash and stock of Standard Lithium ~~(NYSE:SLI)~~ under the terms of the arrangements. The cash and stock component of consideration received is initially recorded as unearned income based on the quoted market price at the time the stock is received, then recognized in income over the contract term.

See Note 8 - “Fair Value Measurements” for further information.

~~In May 2021, we signed a memorandum of understanding (“MOU”) with CarbonFree, a carbon capture company with patented technologies that capture CO~~2 and mineralize emissions to make commercial, carbon-negative chemicals. Although the MOU expired in May 2022 at the end of its twelve-month term, we have an intellectual property joint development agreement in place with CarbonFree to evaluate potential new technologies. In December 2021, we invested $5.0 million in a convertible note issued by CarbonFree. Our exposure to potential losses by CarbonFree is limited to our investment in the convertible note and associated accrued interest.

~~Our investments as of June 30, 2022 and December 31, 2021, consist of the following:~~

June 30, 2022 December 31, 2021
(in thousands)
Investment in CSI Compressco $ 6,862 $ 6,233
Investment in CarbonFree 5,609 5,000
Investment in Standard Lithium $ 1,696 $ —
Total Investments $ 14,167 $ 11,233

NOTE 6 – LONG-TERM DEBT AND OTHER BORROWINGS

Consolidated long-term debt as of ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022 consists of the following:


		Scheduled Maturity	June 30, 2022		December 31, 2021			Scheduled Maturity	March 31, 2023		December 31, 2022

			(in thousands)						(in thousands)
Term Credit Agreement(1)							Term Credit Agreement(1)	September 10, 2025	$	155,282	$	154,570
Asset-Based Credit Agreement(2)							Asset-Based Credit Agreement(2)	May 31, 2025	5,229		1,885
Argentina Credit Agreement							Argentina Credit Agreement	October 19, 2023	1,700		—
Swedish Credit Facility	Swedish Credit Facility	December 31, 2022	$	11	$	—	Swedish Credit Facility	December 31, 2023	461		3
Asset-based credit agreement(1)		May 31, 2025	—		67
Term credit agreement(2)		September 10, 2025	153,191		151,869
Total debt	Total debt		153,202		151,936		Total debt		162,672		156,458
Less current portion	Less current portion		(11)		—		Less current portion		(2,162)		(3)
Total long-term debt	Total long-term debt		$	153,191	$	151,936	Total long-term debt		$	160,510	$	156,455

(1) Net of unamortized ~~deferred financing costs~~discount of ~~zero~~$3.1 million and ~~$1.5~~$3.4 million as of ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021, respectively. Deferred financing costs of $1.3 million as of June 30,~~ 2022, ~~were classified as other long-term assets on the accompanying consolidated balance sheet as there was no outstanding balance on our asset-based credit agreement.~~

~~(2)~~ ~~Net of unamortized discount of $4.0 million and $4.5 million as of June 30, 2022 and December 31, 2021,~~ respectively, and net of unamortized deferred financing costs of ~~$5.9~~$4.7 million and ~~$6.7~~$5.1 million as of ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, respectively.

(2) Net of unamortized deferred financing costs of $1.0 million and $1.1 million as of March 31, 2023 and December 31, 2022, respectively.

~~Swedish Credit Facility~~

In January 2022, the Company entered into a revolving credit facility for seasonal working capital needs of subsidiaries in Sweden (“Swedish Credit Facility”). As of June 30, 2022, we had less than US$0.1 million outstanding and availability of approximately US$4.9 million under the Swedish Credit Facility. During each year, all outstanding loans under the Swedish Credit Facility must be repaid for at least 30 consecutive days. Borrowings bear interest at a rate of 2.95% per annum. The Swedish Credit Facility expires on December 31, 2022 and the Company intends to renew it annually.

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~~Finland~~Term Credit Agreement

~~The Company also entered into a new~~ As of March 31, 2023, we had $155.3 million outstanding, net of unamortized discounts and unamortized deferred financing costs under our term credit agreement ~~guaranteed by certain accounts receivable and inventory in Finland~~ (“~~Finland~~Term Credit Agreement”). The Term Credit Agreement requires us to offer to prepay a percentage of Excess Cash Flow (as defined in the Term Credit Agreement) within five business days of filing our Annual Report. As of ~~June 30,~~ March 31, 2023, the interest rate per annum on borrowings under the Term Credit Agreement is 10.88%. For additional information on our Term Credit agreement, see our 2022 ~~there were US$1.4 million of letters of credit outstanding against the Finland Credit Agreement.~~Annual Report.

ABL Credit Agreement

As of ~~June 30, 2022,~~March 31, 2023, our asset-based credit agreement (“ABL Credit ~~Agreement’~~Agreement”) provides for a senior secured revolving credit facility of up to $80.0 million, with a $20.0 million accordion. The credit facility is subject to a borrowing base determined monthly by reference to the value of inventory and accounts receivable, and includes a sublimit of $20.0 million for letters of credit, a swingline loan sublimit of $11.5 million, and a $15.0 million sub-facility subject to a borrowing base consisting of certain trade receivables and inventory in the United Kingdom.

As of ~~June 30, 2022,~~March 31, 2023, we had ~~zero~~$6.2 million outstanding and ~~$6.0~~$8.3 million in letters of credit and guarantees under our ABL Credit Agreement, respectively. Subject to compliance with the covenants, borrowing base, and other provisions of the ABL Credit Agreement that may limit borrowings, we had availability of ~~$61.8~~$65.4 million under this agreement.

~~Term~~

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Argentina Credit Agreement

In January 2023, the Company entered into a revolving credit facility for certain working capital and capital expenditure needs for its subsidiary in Argentina (“Argentina Credit Facility”). As of ~~June 30, 2022~~March 31, 2023, we had ~~$153.2~~$1.7 million outstanding ~~net~~and availability of ~~unamortized discounts~~approximately $0.3 million under the Argentina Credit Agreement. Borrowings bear interest at a rate of 2.50% per annum. The Argentina Credit Facility expires on October 19, 2023 and ~~unamortized deferred financing costs~~is backed by a letter of credit under our ~~term~~ABL Credit Agreement.

Swedish Credit Facility

In January 2022, the Company entered into a revolving credit facility for seasonal working capital needs of subsidiaries in Sweden (“Swedish Credit Facility”). As of March 31, 2023, we had $0.5 million outstanding and availability of approximately $4.4 million under the Swedish Credit Facility. During each year, all outstanding loans under the Swedish Credit Facility must be repaid for at least 30 consecutive days. Borrowings bear interest at a rate of 2.95% per annum. The Swedish Credit Facility expires on December 31, 2023 and the Company intends to renew it annually.

Finland Credit Agreement

In January 2022, the Company also entered into an agreement guaranteed by certain accounts receivable and inventory in Finland (“~~Term~~Finland Credit Agreement”). As of March 31, 2023, there were $1.5 million of letters of credit outstanding against the Finland Credit Agreement. The ~~Term~~Finland Credit Agreement ~~requires us~~expires on January 31, 2024 and the Company intends to offer to prepay a percentage of Excess Cash Flow (as defined in the Term Credit Agreement) within five business days of filing our Annual Report. As of June 30, 2022, the interest rate per annum on borrowings under the Term Credit Agreement is 7.92%. For additional information on our Term Credit agreement, see our renew it annually.

~~2021 Annual Report~~.

Covenants

Our credit agreements contain certain affirmative and negative covenants, including covenants that restrict the ability to pay dividends or other restricted payments. As of ~~June 30, 2022,~~March 31, 2023, we are in compliance with all covenants under the credit agreements.

NOTE 7 – COMMITMENTS AND CONTINGENCIES

Litigation

We are named defendants in several lawsuits and respondents in certain governmental proceedings arising in the ordinary course of business. While the outcome of lawsuits or other proceedings against us cannot be predicted with certainty, management does not consider it reasonably possible that a loss resulting from such lawsuits or other proceedings in excess of any amounts accrued has been incurred that is expected to have a material adverse impact on our financial condition, results of operations, or liquidity.

We have a Bromine Requirements Sales Agreement (“Sales Agreement”) to purchase a certain volume of elemental bromine from LANXESS Corporation (formerly Chemtura Corporation) (“LANXESS”), included in Product Purchase Obligations below. LANXESS notified us of a proposed non-ordinary course increase to the price of bromine, which we believe is not justified nor appropriate under the Sales Agreement. After lengthy discussions, we and LANXESS were unable to reach an agreement regarding the validity of the proposed price increase; therefore, we filed for arbitration in May 2022 seeking declaratory relief, among other relief, declaring that the proposed price increase is invalid. In September 2022, LANXESS filed a counterclaim with the American Arbitration Association seeking declaratory relief, among other relief, declaring that the proposed price increase was valid and seeking damages in the amount of the price increase from July 1, 2022 forward. In October 2022, we filed a reply to LANXESS’ counterclaim disputing the counterclaim and amending our original demand. The arbitration is currently pending, and the final hearing is set to begin on March 4, 2024. Discussions with LANXESS regarding this arbitration are ongoing. We are unable to predict the duration, scope, or impact of this proceeding on our consolidated financial statements.

There have been no other material developments in our legal proceedings during the quarter ended ~~June 30, 2022.~~March 31, 2023. For aadditional discussion of our legal proceedings, please see our ~~2021~~2022 Annual Report.

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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. Some of these agreements have terms and conditions that specify a minimum or maximum level of purchases over the term of the agreement. Other agreements require us to purchase the entire output of the raw material or finished product produced by the manufacturer. Our purchase obligations under these agreements apply only with regard to raw materials and finished products that meet specifications set forth in the agreements. We recognize a liability for the purchase of such products at the time we receive them. As of ~~June 30, 2022,~~March 31, 2023, the aggregate amount of the fixed and determinable portion of the purchase obligation pursuant to our Completion Fluids & Products Division’s supply agreements was approximately ~~$104.6~~$113.9 million, including ~~$3.0~~$11.4 million for the remainder of ~~2022,~~2023, an average of ~~$15.7~~$17.9 million per year from ~~2023~~2024 to ~~2026~~2027 and ~~$40.2~~$30.8 million thereafter, extending through 2029.

Asset Purchase Obligation

In March 2023, we signed a purchase and sale agreement to acquire a chemical plant in Brazil to expand our completion fluids operational capacity. The new facility is adjacent to our existing facility. and the purchase price is $3.2 million, consisting of $0.6 million due at closing and two payments of $1.3 million due on each of the first and second anniversary of closing. The acquisition is expected to close during the second quarter of 2023, subject to government approval. This investment, in addition to the Gulf of Mexico and North Sea investments during the fourth quarter of 2022, complete our planned expansions in three of our key offshore markets.

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NOTE 8 – FAIR VALUE MEASUREMENTS

Financial Instruments

Investments

We retained an interest in CSI Compressco ~~(NASDAQ: CCLP)~~ representing approximately 3.7% of CSI Compressco’s outstanding common units as of ~~June 30, 2022.~~

InMarch 31, 2023 and in December 2021, we invested in a $5.0 million convertible note issued by CarbonFree. In addition, we receive cash and stock of Standard Lithium under the terms of our arrangements as noted in Note 5 - “Investments.”

Our ~~investment~~investments in ~~CarbonFree is~~CSI Compressco and Standard Lithium are recorded in investments on our consolidated balance sheets based on the quoted market stock price (Level 1 fair value measurements). The stock component of consideration received from Standard Lithium is initially recorded as unearned income based on the quoted market price at the time the stock is received, then recognized in income over the contract term. Changes in the value of stock are recorded in other (income) expense, net in our consolidated statements of operations.

Our investment in CarbonFree is recorded in our consolidated financial statements based on an internal valuation with assistance from a third-party valuation specialist (a Level 3 fair value measurement). The valuation is impacted by key assumptions, including the assumed probability and timing of potential debt or equity offerings.

~~We are party~~ The convertible note includes an option to ~~agreements in which Standard Lithium has~~convert the ~~right to explore, produce and extract lithium in our Arkansas leases as well as additional potential resources~~note into equity interests issued by CarbonFree. The change in the ~~Mojave region of California. The Company receives cash and stock of Standard Lithium (NYSE:SLI) under the terms~~fair value of the ~~arrangements. The cash and stock component of consideration received~~embedded option is ~~initially recorded as unearned income based on the quoted market price at the time the stock is received, then recognized in income over the contract term.~~

Our investments in CSI Compressco and Standard Lithium are recorded based on the quoted market stock price in active markets (a Level 1 fair value measurement). Changes in the value of stock are recordedincluded in other ~~income (expense)~~(income) expense, net in our consolidated statements of operations. The change in the fair value of the convertible note, excluding the embedded option, is included in other comprehensive income (loss) in our consolidated statements of comprehensive income. The change in our investment in CarbonFree for the three-month period ended March 31, 2023 is as follows:


	Three Months Ended March 31, 2023
	(in thousands)
Balance at beginning of period	$	6,139
Change in fair value of embedded option	(321)
Change in fair value of convertible note, excluding embedded option	121
Balance at end of period	$	5,939

Recurring ~~and nonrecurring~~ fair value measurements by valuation hierarchy as of ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022 are as follows:

Fair Value Measurements Using
Total as of Quoted Prices in Active Markets for Identical Assets or Liabilities Significant Other Observable Inputs Significant Unobservable Inputs
Description June 30, 2022 (Level 1) (Level 2) (Level 3)
(in thousands)
Investment in CSI Compressco $ 6,862 $ 6,862 $ — $ —
Investment in CarbonFree 5,609 — — 5,609
Investment in Standard Lithium 1,696 1,696 — —
Investments $ 14,167

Fair Value Measurements Using
Total as of Quoted Prices in Active Markets for Identical Assets or Liabilities Significant Other Observable Inputs Significant Unobservable Inputs
Description December 31, 2021 (Level 1) (Level 2) (Level 3)
(in thousands)
Investment in CSI Compressco $ 6,233 $ 6,233 $ — $ —
Investment in CarbonFree $ 5,000 $ — — $ 5,000
Investments $ 11,233

~~Impairments~~

During the second quarter of 2022, our Completion Fluids & Products and Water & Flowback Services Divisions each recorded certain inventory and long-lived tangible asset impairments. Our Water & Flowback Services Division recorded impairments, including $1.3 million of equipment, $0.2 million of inventory, and $0.5 million for land and buildings. The Completion Fluids & Products Division also recorded a $0.2 million impairment related to obsolete inventory. The inventory and equipment were written down to zero or scrap value. The fair value of land and buildings of $0.4 million was estimated based on recent sales price per square acre or square foot of comparable properties (a Level 3 fair value measurement) in accordance with the fair value hierarchy.


			Fair Value Measurements Using
	Total as of		Quoted Prices in Active Markets for Identical Assets or Liabilities		Significant Other Observable Inputs		Significant Unobservable Inputs
Description	March 31, 2023		(Level 1)		(Level 2)		(Level 3)
	(in thousands)
Investment in CSI Compressco	$	6,443	$	6,443	$	—	$	—
Investment in CarbonFree	5,939		—		—		5,939
Investment in Standard Lithium	1,520		1,520		—		—

Investments	$	13,902

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			Fair Value Measurements Using
	Total as of		Quoted Prices in Active Markets for Identical Assets or Liabilities		Significant Other Observable Inputs		Significant Unobservable Inputs
Description	December 31, 2022		(Level 1)		(Level 2)		(Level 3)
	(in thousands)
Investment in CSI Compressco	$	6,967	$	6,967	$	—	$	—
Investment in CarbonFree	6,139		—		—		6,139
Investment in Standard Lithium	1,180		1,180		—		—

Investments	$	14,286

Other

The fair values of cash, restricted cash, accounts receivable, accounts payable, accrued liabilities, short-term borrowings and long-term debt pursuant to ~~TETRA’s~~our Term Credit Agreement, ABL Credit Agreement, ~~Swedish~~Argentina Credit Agreement, and ~~Term~~Swedish Credit Agreement approximate their carrying amounts. See Note 6 - “Long-Term Debt and Other Borrowings” for further discussion.

NOTE 9 – NET INCOME ~~(LOSS)~~ PER SHARE

The following is a reconciliation of the weighted average number of common shares outstanding with the number of shares used in the computations of net income ~~(loss)~~ per common and common equivalent share:

Three Months Ended
June 30, Six Months Ended
June 30,
2022 2021 2022 2021
(in thousands)
Number of weighted average common shares outstanding 127,992 126,583 127,627 126,365
Assumed exercise of equity awards and warrants 2,107 — 2,027 —
Average diluted shares outstanding 130,099 126,583 129,654 126,365

The average diluted shares outstanding excludes the impact of certain outstanding equity awards and warrants of 2,013,000 and 1,740,000 shares for the three and six-month periods ended June 30, 2021, respectively, as the inclusion of these shares would have been anti-dilutive due to the net loss from continuing operations recorded during these periods.


	Three Months Ended March 31,
	2023	2022
	(in thousands)
Number of weighted average common shares outstanding	128,940	127,259
Assumed vesting of equity awards	1,035	1,952
Average diluted shares outstanding	129,975	129,211

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NOTE 10 – INDUSTRY SEGMENTS

We manage our operations through 2two segments: Completion Fluids & Products Division and Water & Flowback Services Division.

Summarized financial information concerning the business segments is as follows:


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended March 31,
		2022		2021		2022		2021			2023		2022

		(in thousands)									(in thousands)
Revenues from external customers	Revenues from external customers									Revenues from external customers
Product sales	Product sales									Product sales
Completion Fluids & Products Division	Completion Fluids & Products Division	$	70,227	$	62,565	$	140,115	$	107,583	Completion Fluids & Products Division	$	65,515	$	69,888
Water & Flowback Services Division	Water & Flowback Services Division	74		18		241		32		Water & Flowback Services Division	20		167
Consolidated	Consolidated	$	70,301	$	62,583	$	140,356	$	107,615	Consolidated	$	65,535	$	70,055

Services	Services									Services
Completion Fluids & Products Division	Completion Fluids & Products Division	$	4,571	$	2,042	$	7,877	$	3,545	Completion Fluids & Products Division	$	3,527	$	3,306
Water & Flowback Services Division	Water & Flowback Services Division	65,844		37,701		122,520		68,490		Water & Flowback Services Division	77,147		56,676
Consolidated	Consolidated	$	70,415	$	39,743	$	130,397	$	72,035	Consolidated	$	80,674	$	59,982

Total revenues	Total revenues									Total revenues
Completion Fluids & Products Division	Completion Fluids & Products Division	$	74,798	$	64,607	$	147,992	$	111,128	Completion Fluids & Products Division	$	69,042	$	73,194
Water & Flowback Services Division	Water & Flowback Services Division	65,918		37,719		122,761		68,522		Water & Flowback Services Division	77,167		56,843

Consolidated	Consolidated	$	140,716	$	102,326	$	270,753	$	179,650	Consolidated	$	146,209	$	130,037

Income (loss) before taxes	Income (loss) before taxes									Income (loss) before taxes
Completion Fluids & Products Division	Completion Fluids & Products Division	$	15,261	$	16,427	$	34,553	$	25,438	Completion Fluids & Products Division	$	18,442	$	19,292
Water & Flowback Services Division	Water & Flowback Services Division	1,644		(4,978)		4,326		(10,458)		Water & Flowback Services Division	6,378		2,682
Interdivision eliminations		3		3		6		6
Interdivision Eliminations										Interdivision Eliminations	—		3
Corporate Overhead(1)	Corporate Overhead(1)	(15,628)		(16,722)		(28,671)		(32,031)		Corporate Overhead(1)	(17,286)		(13,043)
Consolidated	Consolidated	$	1,280	$	(5,270)	$	10,214	$	(17,045)	Consolidated	$	7,534	$	8,934

(1) Amounts reflected include the following general corporate expenses:


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended March 31,
		2022		2021		2022		2021			2023		2022

		(in thousands)									(in thousands)
General and administrative expense	General and administrative expense	$	11,542	$	9,543	$	21,888	$	22,564	General and administrative expense	$	11,059	$	10,346
Depreciation and amortization	Depreciation and amortization	172		248		363		418		Depreciation and amortization	109		191
Interest expense	Interest expense	3,894		4,044		7,541		9,107		Interest expense	5,460		3,647
Warrants fair value adjustment (income) expense		—		2,698		—		3,021
Other general corporate income, net		20		189		(1,121)		(3,079)

Other general corporate (income) expense, net										Other general corporate (income) expense, net	658		(1,141)
Total	Total	$	15,628	$	16,722	$	28,671	$	32,031	Total	$	17,286	$	13,043

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

The following discussion and analysis of financial condition and results of operations should be read in conjunction with our unaudited consolidated financial statements and accompanying notes included in this Quarterly Report. In addition, the following discussion and analysis should also ~~should~~ be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, ~~2021~~2022 filed with the Securities and Exchange Commission (“SEC”) on February ~~28,~~ 27, 2023 (“2022 ~~(“2021~~ Annual Report”). This discussion includes forward-looking statements that involve certain risks and uncertainties.

Business Overview

We are an industrial and oil and gas products and services company operating on six continents, focused on bromine-based completion fluids, calcium chloride, water management solutions, frac flowback and production well testing services. 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 are composed of two segments – Completion Fluids & Products Division and Water & Flowback Services Division.

Customer activity levels continued to trend upward as sustained high oil prices increased to an average of approximately $109 per barrel for the second quarter of 2022, and natural gas prices averaged $7.50 per million Btu. As a result, second quarterFirst-quarter consolidated revenue of ~~$270.8~~$146.2 million ~~is very~~was comparable to ~~the~~fourth-quarter levels and greater than pre-pandemic ~~period, but~~levels, although with significantly fewer operating frac crews in the United States.

Completion Fluids & Products Division revenues ~~were slightly higher~~increased 4% sequentially ~~with the seasonal increase for our Northern Europe industrial chemicals business partially offset by lower Gulf of Mexico and international fluid sales as the first quarter benefited~~despite significant projects that had previously moved up from sales pulling forward from the second quarter. However with much higher oil prices continuing to drive demand, revenues were significantly higher compared to the prior year quarter, primarily due to higher completions activity in the Gulf of Mexico and international markets. While drilling and completion activity has not returned to pre-pandemic levels, we have continued to successfully leverage opportunities to expand integrated services to completion fluids customers, resulting in Completion Fluids & Products revenues reaching near pre-pandemic levels. Our Completion Fluids & Products Division also continued to ship TETRA's high purity zinc bromine solution, TETRA PureFlow® ~~to Eos Energy Enterprises, Inc. ("Eos") (NASDAQ: EOSE) under our recent strategic partnership. Our sales to Eos increased materially during the second quarter compared to~~ the first quarter of ~~2022 as Eos expands its production~~2023 into the fourth quarter of 2022. The stronger performance was also driven by improved pricing and volumes in the industrial chemicals business where capacity is almost back to ~~meet its growing backlog and~~levels experienced prior to ~~service its increasing number of identified opportunities~~

We have not historically directly purchased any significant volumes of raw materials from Russia nor from Ukraine. Additionally, we have not historically sold any significant volumes of product to Russia or to Ukraine. However, one of our raw material providers sourced one of their raw materials from Russia or Ukraine. Because of the ~~ongoing conflict between Russia and~~ Russia/Ukraine ~~toward the end of~~conflict. Results for the first quarter of 2023 also reflect a full-quarter contribution from the fluids acquisition late last year in the North Sea, which performed above expectations. The outlook for international and offshore markets activity growth remains strong. With the planned expansion of our ~~primary European supplier of certain raw materials advised us of supply constraints with one of their suppliers of a key raw material used~~Brazil completion fluids blending and storage facility in ~~their manufacturing process. This raw material is a widely used, global commodity but~~ the disruption to the current supply chain has caused some impact on their production which in turn has caused a reduction in delivered volumes of certain raw materials to our plant in Finland where we manufacture calcium chloride, which has decreased our calcium chloride production volumes and had some impact on second quarter ~~margins. Our supplier has sourced their material from an alternative location~~of 2023, we have now completed or committed to three strategic investments to grow our market position and resumed supplying reduced volumes to us. We are also continuing to work with secondary and tertiary raw material providers on options to address the situation and mitigate the financial impact and we are told from our primary provider that they expect improved deliveries and a more normalized supply chain as they progress through the second half of the year. The exact financial impact remains difficult to quantify at this time and is dependent on our ability to find alternative sources of certain raw materials from suppliers not directly or indirectly impacted by the conflict or the ability of our primary supplier to source alternative raw material sources.add capacity in key offshore markets.

Our Water & Flowback Services revenues ~~improved over the first quarter and~~increased significantly compared to the ~~second~~first quarter of ~~2021 due to a combination of continued increases~~the prior year, driven primarily by growth in ~~customer activity levels and continued price recovery, particularly~~our domestic TETRA SandStormTM business, as well as from the first two early production facilities in ~~the United States onshore land business. The second quarter revenue for our United States land business was the highest since~~Latin America that became operational in the third quarter of ~~2019, despite significantly lower drilling~~2022. The early production facilities are longer-term, high-margin projects with stable and ~~fracking activity compared to prior years. We continue to add~~predictable cash flows and we anticipate commencing operation on a third early production facility in the second quarter of 2023. Our fleet of TETRA SandStormTM ~~(“SandStorm”) units to United States onshore markets~~advanced cyclone technology separators remains at rates approaching pre-pandemic pricing. We continue to see strong utilization for our SandStorm technology and continue to invest additional capital for new units as activity remains strong. During the quarter, we secured a patent on this unique sand filtration technology. Our focus on produced water treatment and recycling continues to generate results with four new recycling projects added during the second quarter. Revenue growth

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~~was a result of the continued increase in the number of integrated projects and customers,~~ high utilization with continued market penetration and positive pricing progression. Water & Flowback Services revenues decreased slightly compared to the fourth quarter due to the timing of ~~SandStorm units and market share gains with private oil and gas operators.~~certain customer completion schedules.

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. During ~~the first quarter of~~ 2022, we completed the ~~drilling of our Arkansas exploration well and, during the second quarter of 2022, we secured samples for multiple Smackover formation brine zones. Ongoing~~maiden inferred bromine and lithium ~~fluid analysis from these samples is being used to progress a~~brine resource estimation report for ~~both the bromine and lithium in~~ our ~~approximately 31,100 net acre brine leases in Arkansas. The resource report is expected to be completed~~leased acreage in the ~~third quarter of 2022. We are also~~Smackover Formation in the process of completing an engagement agreement with an engineering firm to begin work on a Preliminary Economic Assessment (“PEA”) to determine the economics of developing 3,600 net acres under which we hold exclusive brine rights to meet the demand for bromine-based fluids for both a growing oil and gas marketSouthwest Arkansas, as well as a ~~rapidly growing energy storage market. In addition~~front-end engineering and design study for the design of a brine-to-bromine processing plant, pipeline and related assets. Additional steps are required before making a decision to develop the bromine ~~we plan~~assets, including further studies to ~~ultimately extract lithium from~~analyze the ~~same brine feed, which we expect will greatly benefit~~resource and completion of a pre-feasibility and/or feasibility study. A second exploratory well on our acreage in Arkansas is in progress as of April 28, 2023 with the ~~financial returns for~~intent to improve the ~~project.~~

~~Substantially all~~accuracy of our former Compression Division’s operations were conducted through our partially-owned CSI Compressco subsidiary. On January 29, 2021, we closed the sale of the general partner of CSI Compressco, which included the sale of the incentive distribution rights (“IDRs”) in CSI Compresscolithium and approximately 23.1% of the outstanding limited partner interests in CSI Compressco, referred to as the “GP Sale.” We recorded a book gain of $120.6 million during 2021 in connection with the GP Sale. This gain, most of which was non-cash, was a function of CSI Compressco having a negative carrying value within our consolidated balance sheet due to our share of cumulative losses and distributions. We have reflected the operations of our former Compression Division as discontinued operations for all periods presented. See Note 2 – “Discontinued Operations” in the Notes to Consolidated Financial Statements for further information.bromine resource estimates.

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Results of Operations

The following information should be read in conjunction with the Consolidated Financial Statements and the associated Notes contained elsewhere in this report. In November 2020, the SEC issued a final rule to modernize and simplify Management’s Discussion and Analysis and certain financial disclosure requirements in SEC Regulation S-K. As permitted by this final rule, theThe analysis herein reflects the optional approach to discuss results of operations on a sequential-quarter basis, which we believe ~~will provide~~provides information that is most useful in assessing our quarterly results of ~~operations going forward.~~operations.

Three months ended ~~June 30, 2022~~March 31, 2023 compared with three months ended ~~March~~December 31, 2022.

Consolidated Comparisons

Three Months Ended Period to Period Change
June 30, March 31, $ Change % Change
2022 2022
(in thousands, except percentages)
Revenues $ 140,716 $ 130,037 $ 10,679 8.2 %
Gross profit 28,107 32,420 (4,313) (13.3) %
Gross profit as a percentage of revenue 20.0 % 24.9 %
Exploration and appraisal costs 634 1,930 (1,296) (67.2) %
General and administrative expense 23,620 20,643 2,977 14.4 %
General and administrative expense as a percentage of revenue 16.8 % 15.9 %
Interest expense, net 3,610 3,324 286 8.6 %
Other income, net (1,037) (2,411) 1,374 (57.0) %
Income before taxes and discontinued operations 1,280 8,934 (7,654) (85.7) %
Income before taxes and discontinued operations as a percentage of revenue 0.9 % 6.9 %
(Benefit) provision for income taxes (479) 1,200 (1,679)
NM(1)
Income before discontinued operations 1,759 7,734 (5,975) (77.3) %
Discontinued operations:
Loss from discontinued operations, net of taxes (34) (15) (19) 126.7 %
Net income 1,725 7,719 (5,994) (77.7) %
Loss attributable to noncontrolling interests 20 1 19 NM
Net income attributable to TETRA stockholders $ 1,745 $ 7,720 $ (5,975) (77.4) %


	Three Months Ended						Period to Period Change
	March 31,			December 31,			$ Change		% Change
	2023			2022
	(in thousands, except percentages)
Revenues	$	146,209		$	147,448		$	(1,239)	(0.8)	%
Gross profit	36,323			31,111			5,212		16.8	%
Gross profit as a percentage of revenue	24.8		%	21.1		%
Exploration and pre-development costs	720			3,135			(2,415)		(77.0)	%
General and administrative expense	23,191			23,846			(655)		(2.7)	%
General and administrative expense as a percentage of revenue	15.9		%	16.2		%
Interest expense, net	5,092			4,900			192		3.9	%

Other (income) expense, net	(214)			393			(607)		(154.5)	%
Income (loss) before taxes and discontinued operations	7,534			(1,163)			8,697		NM(1)
Income (loss) before taxes and discontinued operations as a percentage of revenue	5.2		%	(0.8)		%
Provision for income taxes	1,489			666			823		123.6	%
Income (loss) before discontinued operations	6,045			(1,829)			7,874		(430.5)	%
Discontinued operations:
Loss from discontinued operations, net of taxes	(12)			(75)			63		(84.0)	%
Net income (loss)	6,033			(1,904)			7,937		(416.9)	%
Loss attributable to noncontrolling interests	7			—			7		100.0	%
Net income (loss) attributable to TETRA stockholders	$	6,040		$	(1,904)		$	7,944	(417.2)	%

(1) Percent change is not meaningful

Consolidated revenues~~increased~~ are comparable between the current and previous quarters, with the decrease in revenues from the~~current quarter primarily due to~~ Water & Flowback Services division mostly offset by an increase in overall activity for ~~both~~ the Completion Fluids & Products division. See Divisional Comparisons section below for a more detailed discussion of the change in our revenues.

Consolidated gross profit as a percentage of revenue increased primarily due to our Completion Fluids & Products division benefiting from increased overall activity levels and margins, as well as a $2.9 million insurance settlement received in March 2023, which was related to damage to our Lake Charles facility during Hurricane Laura in 2020. See Divisional Comparisons section below for additional discussion.

Consolidated exploration and pre-development costs decreased primarily due to completion of the front-end engineering and design study for our potential brine to bromine processing plant in Southwest Arkansas during the prior quarter.

Consolidated other (income) expense, net, increased in the current quarter, compared to the prior quarter primarily due to a $0.9 million increase in unrealized gain from our Standard Lithium shares received in April 2022 and a $1.5 million decrease in foreign exchange losses compared to the previous quarter. These changes are partially offset by a $1.4 million increase in unrealized loss due to the change in the unit price of the CSI Compressco common units we own and a $0.4 million increase in unrealized loss from the change in fair value of the CarbonFree convertible note embedded option.

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Consolidated provision for income tax was $1.5 million during the current quarter, compared to a $0.7 million provision during the prior quarter. Our consolidated effective tax rate for the three months ended March 31, 2023 was 19.8% due to income generated during the quarter, partially offset by the utilization of net operating loss carryforwards in the United States and certain other non-U.S. jurisdictions for which a valuation allowance had been established. We establish a valuation allowance to reduce the deferred tax assets when it is more likely than not that some portion or all of the deferred tax assets will not be realized. Included in our deferred tax assets are net operating loss carryforwards and tax credits that are available to offset future income tax liabilities in the United States and certain other non-U.S. jurisdictions.

Divisional Comparisons

Completion Fluids & Products Division


	Three Months Ended						Period to Period Change
	March 31,			December 31,			$ Change		% Change
	2023			2022
	(in thousands, except percentages)
Revenues	$	69,042		$	66,219		$	2,823	4.3	%
Gross profit	25,010			19,993			5,017		25.1	%
Gross profit as a percentage of revenue	36.2		%	30.2		%
Exploration and pre-development costs	720			3,135			(2,415)		(77.0)	%
General and administrative expense	7,173			6,730			443		6.6	%
General and administrative expense as a percentage of revenue	10.4		%	10.2		%
Interest income, net	(395)			(304)			(91)		29.9	%
Other income, net	(930)			(24)			(906)		NM(1)
Income before taxes and discontinued operations	$	18,442		$	10,456		$	7,986	76.4	%
Income before taxes and discontinued operations as a percentage of revenue	26.7		%	15.8		%

(1) Percent change is not meaningful

Revenues for our Completion Fluids & Products Division increased primarily due to increased pricing for industrial chemical sales, as well as higher sales volume in Europe.

Gross profit for our Completion Fluids & Products Division increased compared to the prior quarter period primarily due to the pricing and sales volume impact mentioned above, as well as a $2.9 million insurance settlement received in March 2023 related to damage to our Lake Charles facility during Hurricane Laura in 2020. Gross profit as a percentage of revenue improved compared to the prior quarter due to the insurance settlement related to our Lake Charles facility and the shift to a higher margin mix of products. 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, drilling and completions activity, supply chain challenges and inflationary pressures.

Income before taxes and discontinued operations for our Completion Fluids & Products Division increased primarily due to the $5.0 million higher gross profit described above, a $2.4 million decrease in exploration and pre-development costs associated with front-end engineering design for our potential Southwest Arkansas bromine development, a $0.4 million decrease in foreign exchange losses and a $0.9 million increase in unrealized gain from our investment in Standard Lithium shares received in April 2022. These changes were partially offset by the $0.4 million unrealized loss from the change in fair value of the CarbonFree convertible note embedded option.

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Water & Flowback Services Division


	Three Months Ended						Period to Period Change
	March 31,			December 31,			$ Change		% Change
	2023			2022
	(in thousands, except percentages)
Revenues	$	77,167		$	81,229		$	(4,062)	(5.0)	%
Gross profit	11,422			11,281			141		1.2	%
Gross profit as a percentage of revenue	14.8		%	13.9		%
General and administrative expense	4,959			5,895			(936)		(15.9)	%
General and administrative expense as a percentage of revenue	6.4		%	7.3		%

Interest income, net	27			140			(113)		(80.7)	%
Other income, net	58			322			(264)		(82.0)	%
Income before taxes and discontinued operations	$	6,378		$	4,924		$	1,454	29.5	%
Income before taxes and discontinued operations as a percentage of revenue	8.3		%	6.1		%

Revenues for our Water & Flowback Services Division decreased in the current quarter compared to the prior quarter, primarily in our Production Testing business due to the lower overall customer activity in the North America onshore business impacted by the timing of customer completion schedules.

Gross profit for our Water & Flowback Services Division remained flat compared to the prior quarter as the effect of lower revenue was offset by a more profitable sales mix. Gross profit as a percentage of revenue increased reflecting the continued margin expansion efforts driven by investments in technology, integration, digitalization and the benefit of our early production facilities in Argentina. Our SandStorm fleet remains at high utilization with continued market penetration and positive pricing progression.

The Water & Flowback Services Division income before taxes and discontinued operations increased due to a decrease in general and administrative expenses, including a $0.4 million decrease in wages and benefits, a $0.3 million decrease in general expenses and a $0.3 million decrease in professional fees, as well as a $0.3 million decrease in foreign exchange losses.

Corporate Overhead


	Three Months Ended				Period to Period Change
	March 31,		December 31,		$ Change		% Change
	2023		2022
	(in thousands, except percentages)
Depreciation and amortization	$	109	$	163	$	(54)	(33.1)	%
General and administrative expense	11,059		11,221		(162)		(1.4)	%
Interest expense, net	5,460		5,064		396		7.8	%

Other expense, net	658		95		563		592.6	%
Loss before taxes and discontinued operations	$	(17,286)	$	(16,543)	$	(743)	4.5	%

Corporate overhead loss before taxes and discontinued operations increased primarily due to a $0.4 million increase in interest expense due to an increase in the interest rate on our Term Credit Agreement and higher borrowings under our ABL Credit Agreement. Other expense, net increased primarily due to a $1.4 million decrease in unrealized gains related to unit price changes of our investment in CSI Compressco, partially offset by a $0.8 million decrease in foreign exchange losses.

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Three months ended March 31, 2023 compared with three months ended March 31, 2022.

Consolidated Comparisons


	Three Months Ended
	March 31,						Period to Period Change
	2023			2022			$ Change		% Change
	(in thousands, except percentages)
Revenues	$	146,209		$	130,037		$	16,172	12.4	%
Gross profit	36,323			32,420			3,903		12.0	%
Gross profit as a percentage of revenue	24.8		%	24.9		%
Exploration and pre-development costs	720			1,930			(1,210)		(62.7)	%
General and administrative expense	23,191			20,643			2,548		12.3	%
General and administrative expense as a percentage of revenue	15.9		%	15.9		%
Interest expense, net	5,092			3,324			1,768		53.2	%

Other income, net	(214)			(2,411)			2,197		(91.1)	%
Income before taxes and discontinued operations	7,534			8,934			(1,400)		15.7	%
Income before taxes and discontinued operations as a percentage of revenue	5.2		%	6.9		%
Provision for income taxes	1,489			1,200			289		24.1	%
Income before discontinued operations	6,045			7,734			(1,689)		21.8	%
Discontinued operations:
Loss from discontinued operations, net of taxes	(12)			(15)			3		(20.0)	%
Net income	6,033			7,719			(1,686)		(21.8)	%
Loss attributable to noncontrolling interests	7			1			6		600.0	%
Net income attributable to TETRA stockholders	$	6,040		$	7,720		$	(1,680)	(21.8)	%

Consolidated revenues increased in the current year primarily due to improving industry conditions compared to the prior year for our Water & Flowback Services division, as ~~sustained high commodity prices continued for both crude oil and natural gas.~~well as the first two early production facilities in Argentina that commenced operations in the third quarter of 2022, partially offset by lower revenues from our Completion Fluids & Products division. See Divisional Comparisons section below for a more detailed discussion of the change in our revenues.

Consolidated gross profit increased in the current year primarily due to the increase in revenue, partially offset by an increase in costs associated with the higher Water & Flowback Services division activity levels described above. Gross profit as a percentage of revenue decreased ~~primarily~~slightly due to a $2.9 million insurance settlement received in March 2023 associated with damage to our Lake Charles facility in 2020, compared to the $3.8 million insurance settlement received in March ~~2022 from prior damage to our Lake Charles facility, and $2.3 million of impairments recognized in the current quarter. See Divisional Comparisons section below for additional discussion.~~2022.

Consolidated exploration and ~~appraisal~~pre-development costs decreased as$1.2 million compared to the ~~drilling~~prior year following completion of the front-end engineering and design study during the fourth quarter of 2022 associated with our exploratory brine well in ~~Arkansas was completed during the first quarter of 2022 and sample analysis continued during the second quarter.~~Arkansas.

Consolidated general and administrative expenses increased compared to the prior year, primarily due to ~~$2.3~~$2.1 million of increased ~~salary~~wage and ~~employee expenses. Higher salary~~benefit-related expenses ~~were mainly due to~~driven by divisional headcount additions as operational activity levels increased, as well as higher short and long-term ~~variable~~ incentive ~~costs driven~~expense and higher travel expenses, partially offset by ~~strong year-to-date financial and stock price performance, as well as divisional headcount additions~~lower stock-based compensation expense. In addition, professional fees increased $0.5 million compared to ~~support increased activity levels.~~the prior year.

19Consolidated interest expense, net, increased in the current year primarily due to an increase in the interest rate on our Term Credit Agreement and higher borrowings under our ABL Credit Agreement.

~~Table of Contents~~

Consolidated other income, net, decreased in the current ~~quarter,~~year, compared to the prior ~~quarter~~year primarily due to ~~the change~~a $1.6 million net decrease in ~~the unit price of the~~unrealized gains on investments in CSI Compressco, ~~common units we retained, from a $1.1 million gain in the prior quarter to a $0.5 million loss in the current period,~~Standard Lithium and CarbonFree, and a ~~$0.8~~$1.0 million ~~unrealized loss from our investment~~decrease in Standard Lithium shares received in April 2022. These decreases are partially offset by a $0.6 million unrealized gain on our investment in CarbonFree recognized during the second quarter, as well as a $0.3 million increase in gains on asset sales.foreign exchange gains.

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Consolidated ~~benefit~~provision for income ~~tax~~taxes was ~~$0.5~~$1.5 million during the current ~~quarter,~~year, compared to a $1.2 million ~~expense~~ during the prior ~~quarter.~~year. Our consolidated effective tax rate for the ~~three months ended June 30, 2022~~current year was ~~negative 37.4% due primarily~~19.8% during the current year, compared to 13.4% during the prior year. The increase in our tax provision and effective tax rate compared to the ~~impact that changes~~prior year was primarily due to income generated in ~~the full-year forecast had on our interim reporting under Accounting Standards Codification 740, Income Taxes.~~certain non-U.S. jurisdictions for which a net operating loss carryforward is not available for offset. We establish a valuation allowance to reduce the deferred tax assets when it is more likely than not that some portion or all of the deferred tax assets will not be realized. Included in our deferred tax assets are net operating loss carryforwards and tax credits that are available to offset future income tax liabilities in the United States as well as in certain non-U.S. jurisdictions.

Divisional Comparisons

Completion Fluids & Products Division


		Three Months Ended						Period to Period Change								Three Months Ended
		June 30,			March 31,			$ Change					% Change			March 31,									Period to Period Change
		2022			2022							2023					2022					$ Change				% Change
		(in thousands, except percentages)														(in thousands, except percentages)
Revenues	Revenues	$	74,798		$	73,194				$	1,604					2.2		%	Revenues	$	69,042			$	73,194		$	(4,152)		(5.7)	%
Gross profit	Gross profit	22,062			26,147			(4,085)					(15.6)	%	Gross profit	25,010					26,147				(1,137)			(4.3)	%
Gross profit as a percentage of revenue	Gross profit as a percentage of revenue	29.5		%	35.7		%								Gross profit as a percentage of revenue	36.2		%			35.7		%
Exploration and appraisal costs		635			1,930			(1,295)					(67.1)	%
Exploration and pre-development costs															Exploration and pre-development costs	720					1,930				(1,210)			(62.7)	%
General and administrative expense	General and administrative expense	6,184			6,059			125					2.1	%	General and administrative expense	7,173					6,059				1,114			18.4	%
General and administrative expense as a percentage of revenue	General and administrative expense as a percentage of revenue	8.3		%	8.3		%								General and administrative expense as a percentage of revenue	10.4		%			8.3		%
Interest income, net	Interest income, net	(283)			(323)			40					(12.4)	%	Interest income, net	(395)					(323)				(72)			22.3	%
Other (income) expense, net		265			(811)			1,076					(132.7)	%
Income before taxes		$	15,261		$	19,292		$	(4,031)				(20.9)	%
Income before taxes as a percentage of revenue		20.4		%	26.4		%
Other income, net															Other income, net	(930)					(811)				(119)			14.7	%
Income before taxes and discontinued operations															Income before taxes and discontinued operations	$	18,442				$	19,292			$	(850)		(4.4)	%
Income before taxes and discontinued operations as a percentage of revenue															Income before taxes and discontinued operations as a percentage of revenue	26.7		%			26.4		%

Revenues for our Completion Fluids & Products Division ~~increased slightly as~~decreased compared to the ~~seasonal uplift from our Northern European chemicals business was~~prior year primarily due to lower activity in the Gulf of Mexico due to the timing of projects, partially offset by ~~lower Gulf of Mexico~~higher sales volumes in Latin America and ~~international fluid sales as~~onshore in the ~~first quarter benefited from sales pulled forward from the second quarter.~~United States.

Gross profit for our Completion Fluids & Products Division decreased compared to the prior ~~quarter period~~year due to a $3.8 million insurance settlement received in March 2022 from damage to our Lake Charles facility. 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, supply chain challenges and inflationary pressures.

Pretax income for our Completion Fluids & Products Division decreased primarily due to the $4.1 million lower gross profit described above, a $1.1 million increase in foreign exchange losses and a $0.8 million unrealized loss from our investment in Standard Lithium shares received in April 2022. These decreases were partially offset by a $1.3 million decrease in costs associated with the conclusion of our exploratory brine well drilled during the first quarter of 2022 as well as $0.6 million unrealized gain on our investment in CarbonFree recognized during the second quarter.

~~Table of Contents~~

~~Water & Flowback Services Division~~

Three Months Ended Period to Period Change
June 30, March 31, $ Change % Change
2022 2022
(in thousands, except percentages)
Revenues $ 65,918 $ 56,843 $ 9,075 16.0 %
Gross profit 6,214 6,462 (248) (3.8) %
Gross profit as a percentage of revenue 9.4 % 11.4 %
General and administrative expense 5,894 4,238 1,656 39.1 %
General and administrative expense as a percentage of revenue 8.9 % 7.5 %
Interest income, net (2) — (2) NM
Other income, net (1,322) (458) (864) 188.6 %
Income before taxes $ 1,644 $ 2,682 $ (1,038) (38.7) %
Income before taxes as a percentage of revenue 2.5 % 4.7 %

Revenues for our Water & Flowback Services Division increased for both water management and production testing in the current quarter compared to the prior quarter, primarily due to the continued higher overall customer activity in the North America onshore business. The higher customer activity can be attributed to sustained high commodity prices.

Gross profit for our Water & Flowback Services Division decreased compared to the prior quarter due to impairment expenses for obsolete assets and inventory. Excluding the impairment, gross profit is consistent with increased activity level with similar pricing fall through. We expect the third-quarter Adjusted EBITDA margins to further improve reflecting continued better pricing for our United States onshore land business, stronger activity levels and the commencement of operations of two early production facilities in Argentina.

The Water & Flowback Services Division pretax income decreased due to a decrease in gross profit and an increase in general and administrative expense. General and administrative expense increased due to higher compensation and benefits from higher salaries, additional headcountrevenues, as well as a $0.5 million increase professional services from contract labor. Income for our Water & Flowback Services Division also increased due to a $0.2 million increase in gains on sales of assets and $0.7 million increase in foreign exchange gains.

~~Corporate Overhead~~

Three Months Ended Period to Period Change
June 30, March 31, $ Change % Change
2022 2022
(in thousands, except percentages)
Depreciation and amortization $ 171 $ 191 $ (20) (10.5) %
General and administrative expense 11,542 10,346 1,196 11.6 %
Interest expense, net 3,895 3,647 248 6.8 %
Other (income) expense, net 20 (1,141) 1,161 (101.8) %
Loss before taxes $ (15,628) $ (13,043) $ (2,585) 19.8 %

~~Corporate overhead pretax loss increased due to a $1.2 million increase in general and administrative expense and a $1.2~~$0.9 million decrease in ~~other (income) expense, net. General and administrative expense increased~~insurance settlements received in 2023 compared to the prior quarter primarily due to higher salary costs associated with the impact of higher stock price on certain long-term incentive awards and the impact of current year financial performance on accrued short-term incentives. Other (income) expense, net decreased compared to the prior quarter, from a $1.1 million gain in the prior quarter to a $0.5 million loss in the current period, due to the change in the unit price of the CSI Compressco common units we retained. These changes were partially offset by a $0.5 million increase in foreign exchange gains.

~~Table of Contents~~

~~Six months ended June 30, 2022 compared with six months ended June 30, 2021.~~

~~Consolidated Comparisons~~

Six months ended
June 30, Period to Period Change
2022 2021 $ Change % Change
(in thousands, except percentages)
Revenues $ 270,753 $ 179,650 $ 91,103 50.7 %
Gross profit 60,527 24,302 36,225 149.1 %
Gross profit as a percentage of revenue 22.4 % 13.5 %
Exploration and appraisal costs 2,564 — 2,564 100.0 %
General and administrative expense 44,263 37,363 6,900 18.5 %
General and administrative expense as a percentage of revenue 16.3 % 20.8 %
Interest expense, net 6,934 8,290 (1,356) (16.4) %
Other income, net (3,448) (4,306) 858 (19.9) %
Income (loss) before taxes and discontinued operations 10,214 (17,045) 27,259 159.9 %
Income (loss) before taxes and discontinued operations as a percentage of revenue 3.8 % (9.5) %
(Benefit) provision for income taxes 721 1,552 (831) (53.5) %
Income (loss) before discontinued operations 9,493 (18,597) 28,090 151.0 %
Discontinued operations:
Income (loss) from discontinued operations, net of taxes (49) 120,864 (120,913) (100.0) %
Net income 9,444 102,267 (92,823) (90.8) %
Loss (income) attributable to noncontrolling interests 21 (306) 327 (106.9) %
Net income attributable to TETRA stockholders $ 9,465 $ 101,961 $ (92,496) (90.7) %

~~Consolidated revenues increased in the current year~~ ~~primarily~~ ~~due to improving industry conditions compared to the prior year for~~ ~~both the Completion Fluids & Products division and the Water Management & Flowback division. See Divisional Comparisons section below for a more detailed discussion of the change in our revenues.~~

~~Consolidated gross profit increased in the current year primarily due to the increase in revenue, partially offset by an increase in costs associated with~~ the higher activity levels described above. Gross profit as a percentage of revenue also increased, primarily due to the significant improvement in profitability for our Water and Flowback Services Division, as well as a $3.8 million insurance settlement received in March 2022 associated with damage to our Lake Charles facility in 2020.

~~Consolidated exploration and appraisal costs were $2.6 million during the current year due to the exploration and sample analysis costs associated with our exploratory brine well in Arkansas.~~

~~Consolidated general and administrative expenses increased~~ ~~compared to~~ the prior year, primarily due to $7.6 million of increased wage and benefit related expenses driven by reinstatement of full salaries and 401K match as well as higher short and long-term incentive expenses, and divisional headcount additions as operational activity levels increased. Higher wage and benefit related expenses were partially offset by a $1.5 million decrease in professional fees primarily due to the GP Sale in the first quarter of the prior year.

~~Consolidated interest expense, net, decreased in the current year primarily due to $50.5 million of repayments of our term credit facility during 2021.~~

~~Consolidated other income, net, decreased in the current year,~~ ~~compared to~~ the prior year primarily due to a $5.2 million net decrease in unrealized gains on investments in CSI Compressco, Standard Lithium and CarbonFree, partially offset by a $3.0 million warrants fair value adjustment recognized in the prior year, a $0.6 million increase in foreign exchange gains, and a $0.3 million increase in gains on sales of assets.

~~Table of Contents~~

Consolidated provision for income taxes was $0.7 million during the current year, compared to $1.6 million during the prior year. Our consolidated effective tax rate for the current year of 7.1% was primarily due to income generated during the current year, partially offset by the utilization of net operating loss carryforwards in the United States as well as in certain non-U.S. jurisdictions for which a valuation allowance had been established. We establish a valuation allowance to reduce the deferred tax assets when it is more likely than not that some portion or all of the deferred tax assets will not be realized. Included in our deferred tax assets are net operating loss carryforwards and tax credits that are available to offset future income tax liabilities in the United States as well as in certain non-U.S. jurisdictions.

Consolidated loss from discontinued operations, net of taxes, for the prior year includes a $120.6 million primarily non-cash accounting gain from the deconsolidation of CSI Compressco. This gain is net of a $0.01 million tax provision after taking into consideration utilization of net operating loss and credit carryforwards.

Consolidated loss (income) attributable to noncontrolling interests included $0.3 million income from the prior year associated with CSI Compressco’s results for the month of January, prior to the GP Sale.

~~Divisional Comparisons~~

~~Completion Fluids & Products Division~~

Six months ended
June 30, Period to Period Change
2022 2021 $ Change % Change
(in thousands, except percentages)
Revenues $ 147,992 $ 111,128 $ 36,864 33.2 %
Gross profit 48,209 30,194 18,015 59.7 %
Gross profit as a percentage of revenue 32.6 % 27.2 %
Exploration and appraisal costs 2,564 — 2,564 100.0 %
General and administrative expense 12,243 8,904 3,339 37.5 %
General and administrative expense as a percentage of revenue 8.3 % 8.0 %
Interest income, net (606) (300) (306) 102.0 %
Other income, net (545) (3,848) 3,303 (85.8) %
Income before taxes $ 34,553 $ 25,438 $ 9,115 35.8 %
Income before taxes as a percentage of revenue 23.3 % 22.9 %

Revenues for our Completion Fluids & Products Division increased compared to the prior year primarily due to increased International and Gulf of Mexico completion fluids product sales as a result of increased activity following the significant improvement in commodity prices and leveraging opportunities to expand services to completion fluids customers.

Gross profit for our Completion Fluids & Products Division increased compared to the prior year due to more revenues from higher-margin completion fluids services and products, as well as a $3.8 million insurance settlement received in March 2022 from damage to our Lake Charles facility in 2020.

~~Pretax income~~Income before taxes and discontinued operations for our Completion Fluids & Products Division ~~increased~~decreased compared to the prior year driven by ~~higher~~lower gross profit, ~~partially offset by $2.6 million of costs associated with the exploratory brine well drilled during the current year and~~ a ~~$3.3~~$1.1 million increase in general and administrative costs due to ~~reinstatement of full salaries and 401K match as well as~~ higher ~~short and long-term~~short-term incentive expenses, and divisional headcount additions during 2022 to support higher activity ~~levels. In addition, other income, net decreased due to the $3.5~~levels, partially offset by a $1.2 million decrease in ~~income from our Standard Lithium shares, most of which were sold during~~costs associated with the ~~fourth quarter of 2021, Other income, net also includes a $0.6 million unrealized gain on our investment in CarbonFree recognized during~~exploratory brine project compared to the ~~second quarter.~~

prior period.

Table of Contents

Water & Flowback Services Division

Six months ended
June 30, Period to Period Change
2022 2021 $ Change % Change
(in thousands, except percentages)
Revenues $ 122,761 $ 68,522 $ 54,239 79.2 %
Gross profit (loss) 12,676 (5,479) 18,155 NM
Gross profit (loss) as a percentage of revenue 10.3 % (8.0) %
General and administrative expense 10,132 5,895 4,237 71.9 %
General and administrative expense as a percentage of revenue 8.3 % 8.6 %
Interest income, net (1) (518) 517 (99.8) %
Other income, net (1,781) (398) (1,383) 347.5 %
Income (loss) before taxes $ 4,326 $ (10,458) $ 14,784 NM
Income (loss) before taxes as a percentage of revenue 3.5 % (15.3) %


	Three Months Ended
	March 31,						Period to Period Change
	2023			2022			$ Change		% Change
	(in thousands, except percentages)
Revenues	$	77,167		$	56,843		$	20,324	35.8	%
Gross profit	11,422			6,462			4,960		(76.8)	%
Gross profit as a percentage of revenue	14.8		%	11.4		%
General and administrative expense	4,959			4,238			721		17.0	%
General and administrative expense as a percentage of revenue	6.4		%	7.5		%
Interest expense, net	27			—			27		100.0	%
Other (income) expense, net	58			(458)			516		(112.7)	%
Income before taxes and discontinued operations	$	6,378		$	2,682		$	3,696	(137.8)	%
Income before taxes and discontinued operations as a percentage of revenue	8.3		%	4.7		%

Revenues for our Water & Flowback Services Division increased significantly for both water management and production testing due to ~~much~~ overall higher customer drilling and completion activity. Customer activity levels have continued to improve, primarily in our North America land business, as commodity prices recovered during 2022 and remained strong. Revenues have ~~not only recovered but remained high for both crude oil and natural gas compared~~also increased in Latin America due to two early production facilities that began operations in the ~~prior year period.~~third quarter of 2022.

Gross profit for our Water & Flowback Services Division improved substantially from ~~a loss in~~ the prior ~~year to double-digit profit in the current~~ year primarily due to higher revenues resulting from the increased activity levels described above and pricing improvements as activity levels ~~improved.~~improved and new higher-margin projects commenced.

~~Pretax income~~Income before taxes and discontinued operations for our Water & Flowback Services Division increased in the current year primarily due to an improvement in the gross profit described above, ~~and a $0.9 million increase in foreign exchange gains,~~partially offset by ~~an increase in general and administrative expense primarily due~~ a ~~$3.2~~$0.7 million increase in salary and employee expense ~~due to reinstatement of full salaries and 401K match as well as~~from higher short and long-term incentive expenses, and divisional headcount additions to support higher activity ~~levels;~~levels, partially offset by a ~~$0.6~~$0.3 million ~~increase~~decrease in ~~general expenses primarily due to increased rent to support higher activity; and a $0.4 million increase in professional services also supporting higher activity.~~foreign exchange gains.

Corporate Overhead


		Six months ended									Three Months Ended
		June 30,				Period to Period Change					March 31,				Period to Period Change
		2022		2021		$ Change		% Change			2023		2022		$ Change		% Change
		(in thousands, except percentages)									(in thousands, except percentages)
Depreciation and amortization	Depreciation and amortization	363		418		(55)		(13.2)	%	Depreciation and amortization	$	109	$	191	$	(82)	(42.9)	%
General and administrative expense	General and administrative expense	$	21,888	$	22,564	$	(676)	(3.0)	%	General and administrative expense	11,059		10,346		713		6.9	%
Interest expense, net	Interest expense, net	7,541		9,107		(1,566)		(17.2)	%	Interest expense, net	5,460		3,647		1,813		49.7	%
Other income, net		(1,121)		(58)		(1,063)		NM
Loss before taxes		$	(28,671)	$	(32,031)	$	3,360	(10.5)	%
Other (income) expense, net										Other (income) expense, net	658		(1,141)		1,799		(157.7)	%
Loss before taxes and discontinued operations										Loss before taxes and discontinued operations	$	(17,286)	$	(13,043)	$	(4,243)	32.5	%

Corporate overhead ~~pretax~~ loss before taxes and discontinued operations increased due to a $0.7 million increase in general and administrative expense, as well as a $1.8 million increase in interest expense, net due to an increase in the interest rate on our Term Credit Agreement and higher borrowings under our ABL Credit Agreement, and a $1.8 million decrease in other income, net. Corporate general and administrative expenses increased compared to the prior year, primarily due to increased wage and benefit-related expenses driven by higher short and long-term incentive expenses. Other income, net decreased primarily due to a $1.6 million decrease in interest expense, net due to lower debt levels, as well as a $1.1 million increase in other income, net. Other income, net increased primarily due to a $3.0 million warrants fair value adjustment recognized in the prior year and a $0.6 million increase in foreign exchangeunrealized gains ~~partially offset by a $2.4 million decrease in income~~ related to unit price changes of our investment in CSI ~~Compressco.~~Compressco, and a $0.4 million decrease in foreign exchange gains.

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Non-GAAP Financial Measures

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

Adjusted EBITDA. We ~~view Adjusted EBITDA as one of our primary management tools, and we track~~it~~on a monthly basis, both in dollars and as a percentage of revenues(typically compared to the prior month,prior yearperiod,and to budget). We~~ define Adjusted EBITDA as ~~earnings~~net income (loss) before ~~interest,~~ taxes ~~depreciation, amortization,~~and discontinued operations, excluding impairments, exploration and ~~appraisal~~pre-development costs, certain special, non-recurring or other charges (or credits), interest, depreciation and amortization and certain ~~other~~ non-cash ~~charges~~items such as equity-based compensation expense. The most directly comparable GAAP financial measure is net income (loss) before taxes and ~~non-recurring adjustments.~~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 and are excluded from Adjusted EBITDA because they do not relate to the Company’s current business operations. Adjustments to long-term incentives represent cumulative 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 ~~by our management to:~~

•~~evaluate the~~to assess financial performance, without regard to charges or credits that are considered by management to be outside of ~~our assets~~its normal operations and without regard to financing methods, capital structure or historical cost ~~basis;~~basis, and

•~~determine our~~ to assess the Company’s ability to incur and service debt and fund capital expenditures.

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The following ~~table~~tables ~~reconciles~~reconcile net income (loss) before taxes and discontinued operations to Adjusted EBITDA for the periods indicated:


		Three Months Ended												Three Months Ended
		June 30, 2022												March 31, 2023
		Completion Fluids & Products			Water & Flowback Services			Corporate SG&A		Other and Eliminations		Total				Completion Fluids & Products			Water & Flowback Services			Corporate SG&A		Other and Eliminations		Total
		(in thousands, except percentages)												(in thousands, except percentages)
Revenue	Revenue	$	74,798		$	65,918		$	—	$	—	$	140,716		Revenue	$	69,042		$	77,167		$	—	$	—	$	146,209
Net income (loss) before taxes and discontinued operations	Net income (loss) before taxes and discontinued operations	15,261			1,644			(11,542)		(4,083)		1,280			Net income (loss) before taxes and discontinued operations	18,442			6,378			(11,059)		(6,227)		7,534
Impairments		220			2,042			—		—		2,262
Exploration and appraisal costs		634			—			—		—		634
Insurance recoveries															Insurance recoveries	(2,850)			—			—		—		(2,850)

Exploration and pre-development costs															Exploration and pre-development costs	720			—			—		—		720
Adjustment to long-term incentives	Adjustment to long-term incentives	—			—			1,450		—		1,450			Adjustment to long-term incentives	—			—			353		—		353

Former CEO stock appreciation right expense (credit)															Former CEO stock appreciation right expense (credit)	—			—			(307)		—		(307)
Transactions and other expenses	Transactions and other expenses	—			556			—		—		556			Transactions and other expenses	—			—			82		—		82

Adjusted income (loss) before taxes and discontinued operations		$	16,115		$	4,242		$	(10,092)	$	(4,083)	$	6,182

Interest expense, net		(283)			(2)			—		3,895		3,610
Depreciation and amortization		1,873			5,705			—		168		7,746
Equity compensation expense		—			—			1,159		—		1,159
Interest (income) expense, net															Interest (income) expense, net	(395)			27			—		5,460		5,092
Depreciation, amortization and accretion															Depreciation, amortization and accretion	2,052			6,509			—		109		8,670
Equity-based compensation expense															Equity-based compensation expense	17			—			1,276		—		1,293
Adjusted EBITDA	Adjusted EBITDA	$	17,705		$	9,945		$	(8,933)	$	(20)	$	18,697		Adjusted EBITDA	$	17,986		$	12,914		$	(9,655)	$	(658)	$	20,587

Adjusted EBITDA as % of revenue	Adjusted EBITDA as % of revenue	23.7		%	15.1		%					13.3		%	Adjusted EBITDA as % of revenue	26.1		%	16.7		%					14.1		%

		Three Months Ended												Three Months Ended
		March 31, 2022												December 31, 2022
		Completion Fluids & Products			Water & Flowback Services			Corporate SG&A		Other and Eliminations		Total				Completion Fluids & Products			Water & Flowback Services			Corporate SG&A		Other and Eliminations		Total
		(in thousands, except percentages)												(in thousands, except percentages)
Revenue	Revenue	$	73,194		$	56,843		$	—	$	—	$	130,037		Revenue	$	66,219		$	81,229		$	—	$	—	$	147,448
Net income (loss) before taxes and discontinued operations	Net income (loss) before taxes and discontinued operations	19,292			2,682			(10,346)		(2,694)		8,934			Net income (loss) before taxes and discontinued operations	10,456			4,924			(11,221)		(5,322)		(1,163)
Insurance settlement		(3,750)			—			—		—		(3,750)
Exploration and appraisal costs		1,930			—			—		—		1,930
Impairments															Impairments	342			200			—		—		542
Exploration and pre-development costs															Exploration and pre-development costs	3,135			—			—		—		3,135
Adjustment to long-term incentives	Adjustment to long-term incentives	—			—			784		—		784			Adjustment to long-term incentives	—			—			131		—		131

Former CEO stock appreciation right expense		—			—			472		—		472
Transactions and other expenses															Transactions and other expenses	576			—			—		—		576
Former CEO stock appreciation right expense (credit)															Former CEO stock appreciation right expense (credit)	—			—			(57)		—		(57)

Adjusted income (loss) before taxes and discontinued operations		$	17,472		$	2,682		$	(9,090)	$	(2,694)	$	8,370

Interest expense, net		(323)			—			—		3,647		3,324
Depreciation and amortization		1,948			5,543			—		188		7,679
Equity compensation expense		—			—			1,104		—		1,104
Interest (income) expense, net															Interest (income) expense, net	(304)			140			—		5,064		4,900
Depreciation, amortization and accretion															Depreciation, amortization and accretion	1,787			6,808			—		163		8,758
Equity-based compensation expense															Equity-based compensation expense	—			—			3,519		—		3,519
Adjusted EBITDA	Adjusted EBITDA	$	19,097		$	8,225		$	(7,986)	$	1,141	$	20,477		Adjusted EBITDA	$	15,992		$	12,072		$	(7,628)	$	(95)	$	20,341

Adjusted EBITDA as % of revenue	Adjusted EBITDA as % of revenue	26.1		%	14.5		%					15.7		%	Adjusted EBITDA as % of revenue	24.2		%	14.9		%					13.8		%

2526

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	Three Months Ended March 31, 2022
	Completion Fluids & Products			Water & Flowback Services			Corporate SG&A		Other and Eliminations		Total
	(in thousands, except percents)
Revenues	$	73,194		$	56,843		$	—	$	—	$	130,037
Net income (loss) before taxes and discontinued operations	19,292			2,682			(10,346)		(2,694)		8,934
Insurance settlement	(3,750)			—			—		—		(3,750)
Exploration and pre-development costs	1,930			—			—		—		1,930
Adjustment to long-term incentives	—			—			784		—		784

Former CEO stock appreciation right expense	—			—			472		—		472




Interest (income) expense, net	(323)			—			—		3,647		3,324
Depreciation, amortization and accretion	1,948			5,543			—		188		7,679
Equity-based compensation expense	—			—			1,104		—		1,104
Adjusted EBITDA	$	19,097		$	8,225		$	(7,986)	$	1,141	$	20,477

Adjusted EBITDA as a % of revenue	26.1		%	14.5		%					15.7		%

Adjusted EBITDA is a financial measure that is not in accordance with U.S. GAAP and should not be considered an alternative to net income, operating income, cash provided by operating activities, or any other measure of financial performance presented in accordance with U.S. GAAP. This measure may not be comparable to similarly titled financial metrics of other companies, as other companies may not calculate Adjusted EBITDA in the same manner as we do. Management compensates for the limitations of Adjusted EBITDA as an analytical tool by reviewing the comparable U.S. GAAP measures, understanding the differences between the measures, and incorporating this knowledge into management’s decision-making processes.

Liquidity and Capital Resources

We believe that our capital structure allows us to meet our financial ~~obligations despite current uncertain operating conditions and financial markets.~~obligations. Our liquidity at the end of the ~~second~~first quarter was ~~$103.0~~$86.7 million. Liquidity is defined as unrestricted cash plus availability under the ABL Credit Agreement, ~~Swedish~~Argentina Credit Facility and ~~Finland~~Swedish Credit ~~Agreement.~~Facility. Information about the terms and covenants of our debt agreements can be found in our ~~2021~~2022 Annual Report and in Note 6 - Long Term Debt and Other Borrowings.

Our consolidated sources and uses of cash ~~which include cash activity from our former Compression Division for January 2021 prior to the closing of the GP sale,~~ are as follows:


		Six Months Ended June 30,					Three Months Ended March 31,
		2022		2021			2023		2022
		(in thousands)					(in thousands)
Operating activities	Operating activities	$	23,803	$	7,607	Operating activities	$	8,985	$	5,934
Investing activities	Investing activities	(15,919)		(10,451)		Investing activities	$	(11,197)	$	(5,592)
Financing activities	Financing activities	(2,774)		(29,775)		Financing activities	$	5,136	$	722

Operating Activities

Consolidated cash flows provided by operating activities increased compared to the first ~~six~~three months of ~~2021~~2022 primarily due to an increase in cash profit ~~partially offset by the effect of~~and working capital ~~movements and $0.9 million of prior-year cash flows provided by operating activities generated by CSI Compressco in January prior to closing of the GP Sale.~~changes.

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Investing Activities

Total cash capital expenditures during the first ~~six~~three months of ~~2022~~2023 were ~~$20.4~~$12.8 million, which reflects ~~front-loading our expected full year~~increased expenditures to accommodate industry-wide activity ~~recoveries.~~recoveries as well as traditional front-loading of expected annual expenditures. Our Water & Flowback Services Division spent ~~$15.9~~$10.3 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 related to construction of the third early production ~~facilities~~facility in ~~Argentina, including approximately $2.0 million of costs that were reimbursed by customers.~~Argentina. Our Completion Fluids & Products Division spent ~~$4.4~~$2.4 million on capital ~~expenditures.~~expenditures, primarily supporting higher activity levels in the United States and Europe.

Investing activities during the first ~~six~~three months of 2023 and 2022 included a$2.9 million and $3.8 million, respectively, for insurance ~~settlement received in March 2022~~settlements from damage to our Lake Charles facility in 2020.

Historically, a significant majority of our planned capital expenditures have been related to identified opportunities to grow and expand our existing businesses. We are also focused on enhancing shareholder value by capitalizing on our key mineral assets, brine mineral extraction expertise, and 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. We currently have no long-term capital expenditure ~~commitments.~~commitments, other than the asset purchase obligation described in Note 7 - “Commitments and Contingencies” in the Notes to Consolidated Financial Statements. If the forecasted demand for our products and services increases or decreases, the amount of planned expenditures on growth and expansion may be adjusted.

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Lithium and Bromine ~~Exploration Targets~~Inferred Resources

We have rights to the brine underlying our approximately ~~31,100 net~~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. With respect to approximately ~~27,500~~35,000 acres of that total acreage, we ~~had previously entered into an agreement granting~~granted Standard Lithium an option to acquire the lithium rights. The agreements governing this option contemplate a 2.5% royalty that Standard Lithium would pay us based on gross lithium revenues. Additional information on these ~~exploration targets~~inferred resources is described in Part I, “Item 2. Properties” in our ~~2021~~2022 Annual Report.

~~In August 2021,~~During early 2023, we ~~announced~~completed an initial economic assessment for a bromine extraction plant. We expect an initial economic assessment to follow in late 2023 for a lithium extraction plant, subject to the progress of early engineering. Only upon completion of an indicated resources study, pre-feasibility and/or feasibility study and attainment of capital commitment from either a ~~preliminary technical assessment by an independent geological consulting firm to assess lithium and bromine exploration targets~~joint venture partner, governments grants or loans, or other cost-effective sources of capital that will not over-lever TETRA, in our approximately 31,100 net acres. During the first six months 2022, we incurred $2.6 million to complete the drilling of our Arkansas exploration well and obtain and analyze fluid samples for multiple Smackover formation brine zones. Ongoing bromine and lithium fluid analysis from these samples is being used to progress a resource report for both the bromine and lithium in our approximately 31,100 net acre brine leases in Arkansas. The resource report is expected to be completed in the third quarter of 2022. We have engaged an engineering firm to begin work on a PEA to determine the economics of developing 3,600 net acres under which we hold exclusive brine rights to meet the demand for bromine-based fluids for both a growing oil and gas market as well as a rapidly growing energy storage market. In addition to confirmation of a successful recapitalization of the ~~bromine,~~long-duration zinc-bromide battery storage manufacturers, would we ~~plan~~proceed to ~~ultimately extract lithium from the same brine feed which we expect will greatly benefit the financial returns for the project.~~a final investment decision.

Financing Activities

As a result of TETRA’s strong cash flow from operations in 2020 and the proceeds from the GP Sale, during the first six months of 2021, we repaid $29.3 million on our term credit agreement. We repaid an additional $21.0 million on our term credit agreement during 2021 using proceeds from the sale of Standard Lithium shares and cash flows from operations. Our financing activities for the ~~fist six~~first three months of ~~2022~~2023 include ~~$1.2~~$52.8 million of borrowings and $47.4 million of repayments under the ABL Credit Agreement, Argentina Credit Facility and Swedish Credit Facility, as well as $0.3 million of capital lease payments associated with equipment leased primarily for the early production facilities in Argentina. 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.

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Long-Term Debt

Term Credit Agreement. The Term Credit Agreement is scheduled to mature on September 10, 2025. Our Term Credit Agreement requires us to offer to prepay a percentage of Excess Cash Flow (as defined in the Term Credit Agreement) within five business days of filing our Annual Report. As of March 31, 2023, $163.1 million in aggregate principal amount of our Term Credit Agreement is outstanding.

Asset-Based Credit Agreement. As of ~~June 30, 2022,~~March 31, 2023, our ABL Credit Agreement provides for a senior secured revolving credit facility of up to $80.0 million, with a $20.0 million accordion. The credit facility is subject to a borrowing base to be determined by reference to the value of inventory and accounts receivable, and includes a sublimit of $20.0 million for letters of credit, a swingline loan sublimit of $11.5 million, and a $15.0 million sub-facility subject to a borrowing base consisting of certain trade receivables and inventory in the United Kingdom. The amounts we may borrow under the ABL Credit Agreement are derived from our accounts receivable, certain accrued receivables and certain inventory. Changes in demand for our products and services have an impact on our eligible accounts receivable, accrued receivables and the value of our inventory, which could result in significant changes to our borrowing base and therefore our availability under our ABL Credit Agreement. As of ~~June 30, 2022,~~March 31, 2023, we had ~~zero~~$6.2 million outstanding and~~$6.0~~ $8.3 million in letters of credit and guarantees against our ABL Credit Agreement and availability of ~~$61.8~~$65.4 million, subject to compliance with the covenants, borrowing base, and other provisions of the ABL Credit Agreement.

Argentina Credit Facility. In January 2023, the Company entered into a revolving credit facility for certain working capital and capital expenditure needs for its subsidiary in Argentina (“Argentina Credit Facility”). As of March 31, 2023, we had $1.7 million outstanding and availability of approximately $0.3 million under the Argentina Credit Agreement. Borrowings bear interest at a rate of 2.50% per annum. The Argentina Credit Facility expires on October 19, 2023 and is backed by a letter of credit under our ABL Credit Agreement.

Swedish Credit Facility. In January 2022, the Company entered into a revolving credit facility for seasonal working capital needs of subsidiaries in Sweden. As of ~~June 30, 2022,~~March 31, 2023, we had ~~less than $0.1~~$0.5 million outstanding and availability of approximately ~~$4.9~~$4.4 million ~~United States dollars~~ under this agreement. During each year, all outstanding loans under the Swedish Credit Facility must be repaid for at least 30 consecutive days. Borrowings

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bear interest at a rate of 2.95% per annum. The Swedish Credit Facility expires on December 31, ~~2022~~2023 and the Company intends to renew it annually.

Finland Credit Agreement. ~~The~~In January 2022, the Company also entered into a ~~new~~ credit agreement guaranteed by certain accounts receivable and inventory in Finland (“Finland Credit Agreement”). As of ~~June 30, 2022,~~March 31, 2023, there were ~~US$1.4~~$1.5 million of letters of credit outstanding against the Finland Credit Agreement.

~~Term~~ The Finland Credit Agreement. ~~The Term Credit Agreement is scheduled~~ expires on January 31, 2024 and the Company intends to mature on September 10, 2025. Our Term Credit Agreement requires us to offer to prepay a percentage of Excess Cash Flow (as defined in the Term Credit Agreement) within five business days of filing our Annual Report. As of July 29, 2022, $163.1 million in aggregate principal amount of our Term Credit Agreement is outstanding.renew it annually.

Other Sources and Uses of Cash

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 ~~June 30, 2022,~~March 31, 2023, the market value of our investments in CSI Compressco and Standard Lithium were ~~$6.9~~$6.4 million and ~~$1.7~~$1.5 million, respectively, with no holding restrictions on our ability to monetize our ~~interest.~~interests. We also hold an investment in a convertible ~~notes~~note issued by CarbonFree valued at ~~$5.6~~$5.9 million as of ~~June 30, 2022, excluding accrued interest.~~March 31, 2023. 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~~lithium in our Arkansas leases as well as additional potential resources in the Mojave region of California. We received an additional 400,000 shares of Standard Lithium stock ~~during the second quarter of 2022~~in April 2023 under the terms of this agreement.

On May 5, 2022, we filed a universal shelf Registration Statement on Form S-3 with the SEC. On May 17, 2022, the Registration Statement on Form S-3 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.

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

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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 transactions are in the best interest of our business. In challenging economic environments, we may experience increased delays and failures by customers to pay our invoices. If our customers delay paying or fail to pay us a significant amount of our outstanding receivables, it could have an adverse effect on our liquidity. An increase of unpaid receivables would also negatively affect our borrowing availability under the ABL Credit Agreement.

As of ~~June 30, 2022,~~March 31, 2023, we had no “off balance sheet arrangements” that may have a current or future material effect on our consolidated financial condition or results of operations.

Critical Accounting Policies and Estimates

There have been no material changes or developments in the evaluation of the accounting estimates and

the underlying assumptions or methodologies pertaining to our Critical Accounting Policies and Estimates disclosed

in our ~~2021~~2022 Annual Report. In preparing our consolidated financial statements, we make assumptions, estimates, and judgments that affect the amounts reported. These judgments and estimates may change as new events occur, as new information is acquired, and as changes in our operating environments are encountered. Actual results are likely to differ from our current estimates, and those differences may be material.

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Commitments and Contingencies

Litigation

For information regarding litigation, see - Note 7 - “Commitments and Contingencies” in the Notes to Consolidated Financial Statements and Part II, “Item 1. Legal Proceedings” in this report.

Long-Term Debt

For information on our credit agreements, see our ~~2021~~2022 Annual Report and Note 6 - “Long-Term Debt and Other Borrowings” in the Notes to Consolidated Financial Statements.

Leases

We have operating leases for some of our transportation equipment, office space, warehouse space, operating locations, and machinery and equipment. We have finance leases for certain facility storage tanks and equipment rentals. Information about the terms ~~and covenants~~ of our lease agreements can be found in our ~~2021~~2022 Annual Report.

Product and Asset Purchase Obligations

For information on product and asset purchase obligations, see - Note 7 - “Commitments and Contingencies” in the Notes to Consolidated Financial Statements.

Cautionary Statement for Purposes of Forward-Looking Statements

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

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These forward-looking statements include statements concerning the ~~exploration targets~~inferred mineral resources of lithium and bromine, the potential extraction of lithium and bromine from the leased acreage, ~~and~~the development of the assets including construction of bromine extraction plants, the economic viability thereof, the demand for such resources, and the timing and cost of such ~~activities,~~activities; the ability to obtain an indicated or measured resources report and an initial economic assessment, indicated or measured resources report, and/or pre-feasibility or feasibility studies regarding our lithium and bromine acreage; statements regarding the Company's beliefs, expectations, plans, goals, future events and ~~performance,~~performance; and other statements that are not purely historical. With respect to the Company's disclosures of inferred mineral resources, including bromine and lithium carbonate equivalent concentrations, it is uncertain if further exploration will ever result in the estimation of a higher category of mineral resource or a mineral reserve. Inferred mineral resources are considered to have the lowest level of geological confidence of all mineral resources. Investors are cautioned that inferred mineral resources do not have demonstrated economic value. Inferred mineral resources have a high degree of uncertainty as to their existence and as to whether they can be economically or legally commercialized. A significant amount of exploration must be completed in order to determine whether an inferred mineral resource may be upgraded to a higher category. Therefore, investors are cautioned not to assume that all or any part of an inferred mineral resource exists, that it can be economically or legally commercialized, or that it will ever be upgraded to a higher category. Investors should not place undue reliance on forward-looking statements. Each forward-looking statement speaks only as of the date of the particular statement, and the Company undertakes no obligation to update or revise any forward-looking statements, except as may be required by law.

Management believes that these forward-looking statements are reasonable as and when made. However, caution should be taken not to place undue reliance on any such forward-looking statements because such statements speak only as of the date ~~when~~on which they are made. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. In addition, forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our historical experience and our present expectations, forecasts or projections. These risks and uncertainties include, but are not limited to, those described in Part II, “Item 1A. Risk Factors” and elsewhere in this report and in our ~~2021~~2022 Annual Report, and those described from time to time in our future reports filed with the SEC.

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Item 3. Quantitative and Qualitative Disclosures about Market Risk.

Interest Rate Risk

The interest on our borrowings is subject to market risk exposure related to changes in applicable interest rates. ~~Borrowings under our Swedish Credit Facility bear interest at a fixed rate of 2.95%. Borrowings under our ABL Credit Agreement bear interest at an agreed-upon percentage rate spread above LIBOR.~~ Borrowings under the Term Credit Agreement bear interest at a rate per annum equal to, at the option of TETRA, either (i) LIBOR (subject to a 1% floor) plus a margin of 6.25% per annum or (ii) a base rate plus a margin of 5.25% per annum. Borrowings under our ABL Credit Agreement bear interest at an agreed-upon percentage rate spread above LIBOR. Borrowings under our Argentina Credit Facility and Swedish Credit Facility bear interest at fixed rates of 2.50% and 2.95%, respectively. The following table sets forth as of ~~June 30, 2022,~~March 31, 2023, the principal amount due under our long-term debt obligations and their respective weighted average interest rates. We are not a party to an interest rate swap contract or other derivative instrument designed to hedge our exposure to interest rate fluctuation risk.

Interest

June 30, 2022

Interest

March 31, 2023

Scheduled Maturity

Rate

Scheduled Maturity

Rate

(in thousands)

Term Credit Agreement

September 10, 2025

10.88%

163,072

Asset-Based Credit Agreement

May 31, 2025

8.75%

6,200

Argentina Credit Facility

October 19, 2023

2.50%

1,700

Swedish Credit Facility

December 31, 2022

2.95%

Swedish Credit Facility

December 31, 2023

2.95%

461

Asset-based credit agreement

September 10, 2023

4.75%

—

Term credit agreement

September 10, 2025

7.92%

163,071

TETRA total debt, including current portion

163,082

TETRA total debt, including current portion

171,433

Exchange Rate Risk

We ~~are exposed to fluctuations between the U.S. dollar and the euro with regard to our euro-denominated operating activities. We also~~ have currency exchange rate risk exposure related to revenues, expenses, operating receivables, and payables denominated in foreign currencies. We may enter into ~~30-day~~short-term foreign-currency forward derivative contracts as part of a program designed to mitigate the currency exchange rate risk exposure on selected

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transactions of certain foreign subsidiaries. Although contracts pursuant to this program will serve as an economic hedge of the cash flow of our currency exchange risk exposure, they are not expected to be formally designated as hedge contracts or qualify for hedge accounting treatment. Accordingly, any change in the fair value of these derivative instruments during a period will be included in the determination of earnings for that period. As of ~~June 30, 2022,~~March 31, 2023, we did not have any foreign currency exchange contracts outstanding.

Item 4. Controls and Procedures.

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended. Based on this evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of ~~June 30, 2022,~~March 31, 2023, the end of the period covered by this quarterly report.

There were no changes in our internal ~~control~~controls over financial reporting that occurred during the quarter ended ~~June 30, 2022,~~March 31, 2023, that have materially affected, or are reasonably likely to materially affect, our internal ~~control~~controls over financial reporting.

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PART II

OTHER INFORMATION

Item 1. Legal Proceedings.

On May 31, 2022, TETRA filed a demand for arbitration with the American Arbitration Association (“AAA”) under a certain Bromine Requirements Sales Agreement between TETRA and LANXESS Corporation (formerly Chemtura Corporation, “LANXESS”) (the “Sales Agreement”).

Under the Sales Agreement, TETRA agreed to purchase a certain volume of elemental bromine. LANXESS notified TETRA of a proposed non-ordinary course increase to the price of bromine, which TETRA believes is not justified nor appropriate under the Sales Agreement. After lengthy discussions, TETRA and LANXESS were unable to reach an agreement regarding the validity of the proposed price increase; therefore, TETRA filed for arbitration seeking declaratory relief, among other relief, declaring that the proposed price increase is invalid.

On September 19, 2022, LANXESS filed a counterclaim with the AAA seeking declaratory relief, among other relief, declaring that the proposed price increase was valid and seeking damages in the amount of the price increase from July 1, 2022 forward.

On October 4, 2022, TETRA filed a reply to LANXESS’ counterclaim disputing the counterclaim and amending its original demand.

The arbitration is currently pending, and nothe final hearing ~~date has been set.~~is set to begin on March 4, 2024. TETRA is presently unable to predict the duration, scope, or result of this proceeding. Discussions with LANXESS regarding this arbitration are ongoing.

For more information regarding litigation, see “Item 1. Legal Proceedings” in our ~~2021~~2022 Annual Report and Note 7 - “Commitments and Contingencies” in the Notes to Consolidated Financial Statements.

Item 1A. Risk Factors.

As of the date of this filing, TETRA and its operations continue to be subject to the risk factors previously disclosed in the “Risk Factors” sections contained in our ~~2021~~2022 Annual Report. In addition, we are subject to the following supplemental risk factor.

We may not be able to utilize all or a portion of our net operating loss carryforwards or other tax benefits to offset future taxable income for U.S. federal, state or foreign tax purposes, which could adversely affect our financial position, results of operations and cash flows. We have adopted a Tax Benefits Preservation Plan that is designed to protect our Tax Attributes.

As of December 31, 2022, we had United States. federal, state, and foreign deferred tax assets associated with net operating loss carryforwards (“NOLs”) equal to approximately $86.2 million, $11.1 million, and $7.8 million, respectively. In those countries and states in which NOLs are subject to an expiration period, our NOLs, if not utilized, will expire at various dates from 2023 through 2042.

We may be limited in the portion of our NOLs that we can use in the future to offset taxable income for United States, federal, state, and foreign income tax purposes. Utilization of these NOLs depends on many factors, including our future taxable income, which cannot be assured.

Under Section 382 (“Section 382”) of the Internal Revenue Code of 1986, as amended (the “Code”), if a corporation experiences an “ownership change,” any NOLs, losses or deductions attributable to a “net unrealized built-in loss” and other tax attributes (“Tax Attributes”) could be substantially limited, and timing of the usage of such Tax Attributes could be substantially delayed. A corporation generally will experience an ownership change if one or more stockholders (or group of stockholders) who are each deemed to own at least 5% of the corporation’s stock increase their ownership by more than 50 percentage points over their lowest ownership percentage within a testing period (generally, a rolling three-year period). Utilization of our Tax Attributes may be subject to a significant annual limitation as a result of prior or future “ownership changes.” Determining the limitations under Section 382 is

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technical and highly complex, and no assurance can be given that upon further analysis our ability to take advantage of our NOLs or other Tax Attributes may be limited to a greater extent than we currently anticipate.

The Board of Directors has adopted the Tax Plan to protect the availability of the Company’s Tax Attributes. The Tax Plan is designed to reduce the likelihood that we experience an ownership change by deterring certain acquisitions of our common stock. There can be no assurances, however, that the deterrent mechanism will be effective, and, therefore, such acquisitions may still occur. In addition, the Tax Plan could adversely affect the marketability of our common stock by discouraging existing or potential investors from acquiring our common stock or additional shares of our common stock. If the Company is unable to use the Tax Attributes in years in which it has taxable income, the Company will pay significantly more in cash tax than if it were able to utilize the Tax Attributes, and those tax costs would negatively impact the Company’s financial position, results of operations and cash flows.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

~~(a)~~ None.

~~(b) None.~~

~~(c) Purchases of Equity Securities by the Issuer and Affiliated Purchasers.~~

~~Period~~

Total Number
of Shares Purchased

Average
Price
Paid per Share

~~Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(1)~~

~~Maximum Number (or Approximate Dollar Value) of Shares that May Yet be Purchased Under the Publicly Announced Plans or Programs(1)~~

~~April 1 – April 30, 2022~~

—

~~May 1 – May 31, 2022~~

—

~~June 1 – June 30, 2022~~

—

~~Total~~

—

~~(1)In January 2004, our Board of Directors authorized the repurchase of up to $20 million of our common stock.On October 28, 2021, our Board of Directors terminated the repurchase program.~~

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

None.

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Item 5. Other Information.

None.

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Item 6. Exhibits.

Exhibits:


3.1			Certificate of Designation of Series A Junior Participating Preferred Stock (incorporated by reference to Exhibit 3.1 to the Company’s Form 8-K filed on March 1, 2023 (SEC File No. 001-13455).
3.2			Restated Certificate of Incorporation of TETRA Technologies, Inc. (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-8 filed on December 22, 2016 (SEC File No. 333-215283)).
3.3			Certificate of Amendment of Restated Certificate of Incorporation of TETRA Technologies, Inc. (incorporated by reference to Exhibit 3.1 to the Company's Quarterly Report filed on August 9, 2017 (SEC File No. 001-13455)).
4.1			Tax Benefits Preservation Plan dated as of February 28, 2023, between TETRA Technologies, Inc. and Computershare Trust Company, N.A. as Rights Agent (incorporated by reference to Exhibit 4.1 to the Company’s Form 8-K filed on March 1, 2023 (SEC File No. 001-13455).
31.1*			Certification Pursuant to Rule 13a-14(a) or 15d-14(a) of the Exchange Act, As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*			Certification Pursuant to Rule 13a-14(a) or 15d-14(a) of the Exchange Act, As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**			Certification Furnished Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**			Certification Furnished Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
~~10.1*+~~			~~Bromine Requirements Sales Agreement between Chemtura Corporation and TETRA Technologies, Inc. dated December 18, 2006.~~
~~10.2*+~~			~~Amendment to Bromine Requirements Sales Agreement between Chemtura Corporation and TETRA Technologies, Inc. dated June 6, 2008.~~
~~10.3*+~~			~~Second Amendment to Bromine Requirements Sales Agreement between Chemtura Corporation and TETRA Technologies, Inc. dated November 12, 2009.~~
101.SCH++			XBRL Taxonomy Extension Schema Document.
101.CAL++			XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF++			XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB++			XBRL Taxonomy Extension Label Linkbase Document.
101.PRE++			XBRL Taxonomy Extension Presentation Linkbase Document.
104*			Cover Page Interactive Data File - the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL documents

* Filed with this report.

** Furnished with this report.

+ Portions have been omitted pursuant to Regulation S-K Item 601(b)(10)(iv), because the omitted information is both not material and is the type that the Company treats as private or confidential.

++ Attached as Exhibit 101 to this report are the following documents formatted in XBRL (Extensible Business Reporting Language): (i) Consolidated Statements of Operations for the ~~three and six-month~~three-month periods ended ~~June 30, 2022~~March 31, 2023 and ~~2021;~~2022; (ii) Consolidated Statements of Comprehensive Income for the ~~three and six-month~~three-month periods ended ~~June 30, 2022~~March 31, 2023 and ~~2021;~~2022; (iii) Consolidated Balance Sheets as of ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021;~~2022; (iv) Consolidated Statements of Equity for the ~~six-month~~three-month periods ended ~~June 30,~~March 31, 2023 and 2022 ~~and 2021~~ ; (v) Consolidated Statements of Cash Flows for the ~~six-month~~three-month periods ended ~~June 30, 2022~~March 31, 2023 and ~~2021;~~2022; and (vi) Notes to Consolidated Financial Statements for the ~~six~~three months ended ~~June 30, 2022.~~

March 31, 2023.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		TETRA Technologies, Inc.

Date:	~~August 2, 2022~~May 1, 2023	By:	/s/Brady M. Murphy
			Brady M. Murphy
			President and Chief Executive Officer
			Principal Executive Officer

Date:	~~August 2, 2022~~May 1, 2023	By:	/s/Elijio V. Serrano
			Elijio V. Serrano
			Senior Vice President and Chief Financial Officer
			Principal Financial Officer

Date:	~~August 2, 2022~~May 1, 2023	By:	/s/Richard D. O’Brien
			Richard D. O’Brien
			Vice President – Finance and Global Controller
			Principal Accounting Officer

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	Three Months Ended June 30, 2022
	Offshore Services		Maritech		Total
Major classes of line items constituting loss from discontinued operations

Cost of revenues	$	54	$	—	$	54

General and administrative expense	8		—		$	8

Other expense, net	—		(28)		(28)
Pretax income (loss) from discontinued operations	(62)		28		(34)





Loss from discontinued operations attributable to TETRA stockholders					$	(34)


	Three Months Ended June 30, 2021
	Compression	Offshore Services	Total
Major classes of line items constituting loss from discontinued operations




General and administrative expense	—	5	5

Other (income) expense, net	121	—	121
Pretax loss from discontinued operations	(121)	(5)	(126)





Loss from discontinued operations attributable to TETRA stockholders			$	(126)


	Six Months Ended June 30, 2022
	Offshore Services	Maritech	Total
Major classes of line items constituting income from discontinued operations

Cost of revenues	55	—	55


General and administrative expense	22	—	22

Other expense, net	—	(28)	(28)
Pretax income (loss) from discontinued operations	(77)	28	(49)





Loss from discontinued operations attributable to TETRA stockholders			$	(49)


	Six Months Ended June 30, 2021
	Compression		Offshore Services		Total
Major classes of line items constituting loss from discontinued operations
Revenue	$	18,968	$	—	$	18,968
Cost of revenues	11,474		28		11,502


General and administrative expense	2,795		—		2,795
Interest expense, net	4,336		—		4,336
Other expense, net	15		—		15
Pretax income (loss) from discontinued operations	348		(28)		320
Pretax gain on disposal of discontinued operations					120,574
Total pretax income from discontinued operations					120,894
Income tax provision					30
Total income from discontinued operations					120,864
Income from discontinued operations attributable to noncontrolling interest					(333)
Income from discontinued operations attributable to TETRA stockholders					$	120,531