Exhibit 99.1
For Immediate Release
TETRA TECHNOLOGIES, INC.
ANNOUNCES FOURTH QUARTER 2004 EARNINGS
February 25, 2005 (The Woodlands, Texas), TETRA Technologies, Inc. (“TETRA” or the “Company”) (NYSE:TTI) today announced that its fourth quarter 2004 earnings were $0.25 per share versus fourth quarter 2003 earnings of $0.18 per share. All financial data in this release is reported in U.S. dollars, and all per share amounts are fully diluted.
Consolidated revenues for the quarter ended December 31, 2004 were $109,204,000 versus the $75,151,000 reported in the fourth quarter of 2003. Total gross profit was $25,360,000 (23.2% gross profit margin) in the fourth quarter of 2004 versus the $17,147,000 (22.8% gross profit margin) reported in the comparable period of 2003. Income before discontinued operations and cumulative effect of change in accounting principle was $5,940,000 in the fourth quarter of 2004 and $4,273,000 in the fourth quarter of 2003. Net income was $5,932,000 in 2004’s fourth quarter versus $4,233,000 in the comparable period in 2003.
Consolidated results per share for the fourth quarter of 2004 were earnings of $0.25 with 23,936,000 weighted average diluted common shares outstanding versus $0.18 with 23,456,000 weighted average diluted common shares outstanding in the fourth quarter of 2003.
Divisional pretax earnings from continuing operations in the fourth quarter of 2004 versus the fourth quarter of 2003 were: Fluids – $4,714,000 in 4Q 2004 and $2,949,000 in 4Q 2003; Well Abandonment & Decommissioning – $5,416,000 in 4Q 2004 and $4,173,000 in 4Q 2003; and, Production Enhancement (previously Testing & Services) – $4,482,000 in 4Q 2004 and $1,881,000 in 4Q 2003.
Financial data for the full year 2004, comparable data for 2003 and data relating to net income, as well as discontinued operations, are available in the accompanying exhibit to this press release.
Geoffrey M. Hertel, Chief Executive Officer, stated, “As discussed in our January 13, 2005 press release, the improved fourth quarter earnings were gratifying, especially when considering the extremely slow start we experienced in October and November. Early in the fourth quarter, we were consumed with integration activities associated with the three largest acquisitions in our history (all of which closed in the third quarter of 2004) and Sarbanes-Oxley 404 compliance. While the direct out-of-pocket costs associated with these activities were significant, the real impact was manifested in the temporary removal of operating personnel from their normal revenue generating activities. By December, most of these issues had been dealt with. Approximately 40% of fourth quarter revenues and well over half of fourth quarter earnings were generated in historically “holiday affected” December. This should bode well for 2005.
“We enter 2005 in a much different place than we were in one year ago. Our domestic testing equipment has been redeployed into a strengthening market. Our international testing equipment is once again operating at high rates. Our Inland Water abandonment and decommissioning assets have been “right sized” for today’s market, and are operating profitably. The Kemira calcium chloride asset purchase (now renamed and abbreviated TCE) replicates a proven strategy in a new geography. Also, Compressco is functioning above the operating and financial estimates made at the time of its purchase.
“Three other factors have recently worked to enhance opportunities for TETRA. First, the Gulf of Mexico (GOM) rig count has been firming. Any strength in that indicator could bode well for our fluids business, which is significantly impacted by GOM activity. Next, our newly acquired heavy lift derrick barge, the Arapaho, when combined with our Southern Hercules derrick barge, increases our ability to secure substantial decommissioning projects. Finally, the recent bankruptcy and closure of the General Chemical Canada, Ltd. calcium chloride operation has left the North American markets for this product short of supply. This will increase TETRA’s sales of calcium chloride into the future.
“During 2004, many abandonment and decommissioning projects were put on hold, as oil and gas producers bundled up and sold numerous GOM properties, enjoyed the benefits of higher commodity prices and evaluated properties acquired in 2003. Even with the temporary delay caused by these activities, our Maritech strategy, devised and implemented to help base-load our WA&D Division, continued to perform. At year-end, TETRA estimates that properties in which Maritech has a working interest had potential undiscounted gross well abandonment and decommissioning future work of $167.1 million (up 27.8% versus 12/31/2003 estimates). Of this amount, $129.3 million (up 56.9%) relates to properties operated by Maritech. At year-end 2004, our net book value (cost) of oil and gas properties was $33.7 million (up $10.0 million from 12/31/2003). At the same time, the estimated undiscounted future net cash flow before income taxes and after abandonment costs for proven reserves from these properties, as determined by Ryder Scott Company, L.P., our outside petroleum engineering firm, was $120.8 million (up $34.6 million). This is after Maritech produced approximately 4.1 BCF of natural gas and about a half million barrels of oil in 2004.
“Many of the numerous properties sold in the GOM in 2003 and 2004 are nearing the end of their productive lives. We believe that a significant amount of well abandonment and decommissioning work will emanate from these properties in 2005 through 2007.
“We believe that TETRA is poised to deliver dramatic profitability increases in 2005. Our estimated earnings range of $1.30 – $1.60 per share is a 71% – 110% increase, year over year. This press release explains some of the reasons for our confidence. We are excited about our future,” concluded Hertel.
TETRA is an oil and gas services company, including an integrated calcium chloride and brominated products manufacturing operation that supplies feedstocks to energy markets, as well as other markets.
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This press release includes certain statements that are deemed to be forward-looking statements. These statements are based on certain assumptions and analyses made by the Company in light of its experience and its perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate in the circumstances. Such statements are subject to a number of risks and uncertainties, many of which are beyond the control of the Company. Investors are cautioned that any such statements are not guarantees of future performances and that actual results or developments may differ materially from those projected in the forward-looking statements. Some of the factors that could affect actual results are described in the section titled “Certain Business Risks” contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2003.
Three Months Ended | Twelve Months Ended | |||||||
December 31, | December 31, | |||||||
2004 | 2003 | 2004 | 2003 | |||||
(In Thousands) | ||||||||
Revenues | ||||||||
Fluids Division | $50,160 | $31,166 | $152,674 | $119,449 | ||||
WA&D Division | 36,968 | 31,257 | 134,519 | 153,483 | ||||
Production Enhancement Division | 22,114 | 12,806 | 66,353 | 47,122 | ||||
Eliminations and other | (38 | ) | (78 | ) | (360 | ) | (1,385 | ) |
Total revenues | 109,204 | 75,151 | 353,186 | 318,669 | ||||
| ||||||||
Gross profit | ||||||||
Fluids Division | 8,917 | 6,426 | 30,688 | 27,185 | ||||
WA&D Division | 8,796 | 7,318 | 30,618 | 35,412 | ||||
Production Enhancement Division | 7,620 | 3,406 | 20,056 | 11,209 | ||||
Eliminations and other | 27 | (3 | ) | 7 | (10 | ) | ||
Total gross profit | 25,360 | 17,147 | 81,369 | 73,796 | ||||
| ||||||||
General and administrative expense | 15,566 | 11,011 | 53,799 | 44,718 | ||||
Operating income | 9,794 | 6,136 | 27,570 | 29,078 | ||||
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Interest expense (income), net | 1,457 | (64 | ) | 1,676 | 312 | |||
Other expense (income) | (126 | ) | (64 | ) | (465 | ) | (565 | ) |
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** Income before taxes, discontinued operations and cumulative effect of change in accounting principle | 8,463 | 6,264 | 26,359 | 29,331 | ||||
Provision for income taxes | 2,523 | 1,991 | 8,303 | 9,931 | ||||
Income before discontinued operations and cumulative effect of change in accounting principle | 5,940 | 4,273 | 18,056 | 19,400 | ||||
| ||||||||
Discontinued operations: | ||||||||
Income (loss) from discontinued operations, net of taxes | (8 | ) | (71 | ) | (357 | ) | 112 | |
Net gain on disposal of discontinued operations, net of taxes | – | 31 | – | 3,616 | ||||
Income (loss) from discontinued operations | (8 | ) | (40 | ) | (357 | ) | 3,728 | |
| ||||||||
Net income before cumulative effect of accounting change | 5,932 | 4,233 | 17,699 | 23,128 | ||||
Cumulative effect of change in accounting principle, net of taxes | – | – | – | (1,464 | ) | |||
| ||||||||
Net income | 5,932 | 4,233 | 17,699 | 21,664 | ||||
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Three Months Ended |
| Twelve Months Ended | ||||||
December 31, | December 31, | |||||||
2004 | 2003 | 2004 | 2003 | |||||
(In Thousands) | ||||||||
** Income before taxes, discontinued operations and cumulative effect of change in accounting principle |
|
|
|
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|
|
| |
Fluids Division | 4,714 | 2,949 | 15,904 | 13,996 | ||||
WA&D Division | 5,416 | 4,173 | 17,133 | 23,472 | ||||
Production Enhancement Division | 4,482 | 1,881 | 11,150 | 6,420 | ||||
Corporate overhead (includes interest expense) | (6,149 | ) | (2,739 | ) | (17,828 | ) | (14,557 | ) |
Total | 8,463 |
| 6,264 |
| 26,359 |
| 29,331 | |
Three Months Ended | Twelve Months Ended | |||||||
December 31, | December 31, | |||||||
2004 | 2003 | 2004 | 2003 | |||||
(In Thousands, Except Per Share Amounts) | ||||||||
Basic per share information: | ||||||||
Income before discontinued operations and cumulative effect of change in accounting principle | $0.26 | $0.19 | $0.81 | $0.89 | ||||
Income (loss) from discontinued operations | $0.00 | $0.00 | $(0.02 | ) | $0.00 | |||
Net gain on disposal of discontinued operations, net of taxes | $– | $0.00 | $– | $0.17 | ||||
Cumulative effect of change in accounting principle, net of taxes | $– | $– | $– | $(0.07 | ) | |||
Net income | $0.26 | $0.19 | $0.79 | $0.99 | ||||
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| |||||||
Weighted average shares outstanding | 22,514 | 22,108 | 22,371 | 21,850 | ||||
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Diluted per share information: | ||||||||
Income before discontinued operations and cumulative effect of change in accounting principle | $0.25 | $0.18 | $0.76 | $0.84 | ||||
Income (loss) from discontinued operations | $0.00 | $0.00 | $(0.01 | ) | $0.00 | |||
Net gain on disposal of discontinued operations, net of taxes | $– | $0.00 | $– | $0.16 | ||||
Cumulative effect of change in accounting principle, net of taxes | $– | $– | $– | $(0.06 | ) | |||
Net income | $0.25 | $0.18 | $0.75 | $0.94 | ||||
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Weighted average shares outstanding | 23,936 | 23,456 | 23,733 | 23,005 | ||||
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Depreciation, depletion and amortization (B) | $9,905 | $6,885 | $32,551 | $31,153 | ||||
(A) Information presented for each period reflects TETRA's Damp Rid, Inc. and Norwegian process services operations as discontinued operations.
(B) DD&A information for 2003 includes a loss from the relinquishment of oil and gas property.
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Balance Sheet | December 31, 2004 | December 31, 2003 | |||
(In Thousands) | |||||
Cash | $6,103 | $16,925 | |||
Accounts receivable, net | 86,544 | 70,769 | |||
Inventories | 54,104 | 35,116 | |||
Other current assets | 11,145 | 13,991 | |||
PP&E, net | 223,020 | 144,098 | |||
Other assets | 128,072 | 28,700 | |||
Total assets | $508,988 | $309,599 | |||
| |||||
Current portion of long-term debt | 4 | 8 | |||
Other current liabilities | 60,840 | 44,681 | |||
Long-term debt | 143,754 | 4 | |||
Other long-term liabilities | 68,209 | 54,137 | |||
Equity | 236,181 | 210,769 | |||
Total liabilities and equity | $508,988 | $309,599 | |||
Contact:
TETRA Technologies, Inc., The Woodlands, Texas
Geoffrey M. Hertel, 281/367-1983
Fax: 281/364-4346
www.tetratec.com
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