TTI - Earnings call transcript Q1 2019 | TETRA Technologies, Inc.

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Operator

Good morning and welcome to TETRA Technologies First Quarter 2019 Results Conference Call. The speakers for today are Brady M. Murphy, Chief Executive Officer and Elijio Serrano, Chief Financial Officer for TETRA Technologies, Incorporated. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. this being note, Please Instructions] event recorded. is [Operator conference Mr. will now to the turn I over Murphy. ahead. go Please

Brady Murphy

turn Thank details, you, our then key based contain and the you welcome and statements deemed your earnings Company. These factors. must Elijio is this Nancy. questions. And to in uncertainties, beyond These turn certain will conference which control quarter Technologies TETRA also risks by some first your will remind highlight subject on address that for are forward-looking call. it the statements are XXXX are analysis be be first are I I conference available be statements a over many be Elijio a any call this may will number and followed items number may Serrano, based attendance which of of Chief on by assumptions certain in to Officer of to Financial or additional morning the of are of TETRA to few statements. a that made to questions. and

You differ the performance for results that actual and projected of may are guarantees future that such statements are in forward-looking cautioned statements. those materially not

of with at complete nearest measures. for within Stu and be is Chairman the following per X for financial course substitute earnings we GAAP the reconciliations period. financial of of the refer May share, first Well flow, as net not to accordance debt, backlog, Board of context website adjusted to are reconciliations for financial In ratio of retirement free should information CEO Please the our addition, adjusted release may effective or coverage the in other Compressco measures our call a considered conference previous prepared cash tax my CSI measures. this this Brightman's TETRA this before and Shareholder EBITDA, the of results XXXX to the call, his May, announced very talented of a refer employees non-GAAP and financial These non-GAAP GAAP to or the in business market public to morning's TETRA, is years. adjusted news or future. honored to assist and management of very an of to remain energy management Board remain XXXX us team foundation his the TETRA over full appropriate. and very advantage and bright providing Over wish the in today were for in him and and as retirement. well through support, consult of May, the and excited from Stu on evolving Meeting. and company Directors Stu the TETRA energized Stu, team three XX-year the tenure will take I'm great services positioned best with CEO Board company in a take instrumental They're great evolving in the coming as a available segments. profit

you'll Looking are priority forward of us. several that see there from areas

that we're contractors what customers. cycle this always priority of want all in, safe I for working us our for First and the of environment a No our and of will be matter part all employees, operations. market ensure

of At be innovate and shareholders be service segments to higher in and ability focused our of our offerings. will realized we'll the business for the on is by on this value various capabilities, Second, and returns very generating TETRA's capital. differentiate creating each core

water fluid TETRA XX completion innovations continues Water divisions to including offerings CS fluid composition strength in and capital. years high shale gain our From and Services We any market density & zinc-free, cost unique Flowback will such and and improve returns fluid offerings to Water solutions to that fluids. as deepwater loop TETRA margins value for division treatment markets. Flowback our above high our Steel, Automation leverage generate nearly the recycling from to Neptune innovated of to share produced and closed bring

best division our is long-term growth is the which compression markets consistent participating Our in a and industry. production growth North gas in of one America cycle,

agreement to compression our more Water the CS project operator for first opportunities In continued quarter quarter year transition participate provide North revenues margins operators. to and are segment Flowback markets last independent significant Gulf shift customer quarter mostly key major prices our negatively for and the returns by experienced in a greater finalizing seen our results. on in continue experienced improvements that margins crude Mexico. in key the of because and services in with in With We Comparing concentration by new than commentary to this in that, fourth a lift. service large and the Neptune profile. and first compression gathering end XXXX. in in customers we for of We Water happened of Services independent I'll quarter of XX% Flowback revenue at offering gas operators this both rely with and now were driven and the Services the quarter and smaller gas We some we've from smaller impacted lower shift the major our America on drop in shift operators major believe

integrated operators and a expected to sales, partially of improved quarter XXXX. after XXXX of prices The results was with of feel was mentioned revenue strong the at for the the which in revenue E&P revise customers us TETRA offset a The as the differentiation came when and in our While the believe experienced from cost Completion Overall the quality rest in we timing transition. demand the by Fluids due run slowdown although of will and will the strong mobilization which for spending equipment for in largely overhauls, margins. continues is sales transition many the we we and part of demand perform their the within on and showcase segment and sheets. added this seasonally which business international through market aftermarket Gulf we the to Products last had additional meaningful weaker balance supply sequential a believe, and of capital help this job demobilization in we good end improved call. international on the sequential quarter drop plans. transition segment good crude the outlook margins saw led believe This and about year operators quality We we for offerings services and compression our well is in quarter, some in quarterly decrease technology Mexico impact is deliver long and outpacing of our XXXX and with challenging quarter of a downward shipments to

a to our for part strategy and of the showcase equipment stay previously Flowback key jobs in we projects Water time, of which services segment technology and on is solutions allows As overall effectively integrated our extended to us personnel. our mentioned, our increase periods utilize more and

the to provider. introduced each We utilize lowest this cost technology our integrate closed-loop a this New of additions strategy offerings service year large and end most last at in and steady quarter Day first automation Two safest made the water multiple We at in quarter have to the XX QX management per recycling since XX progress year, year. and QX efficient service We've York. end XXXX of Analyst XX we the projects. at ability barrel were almost these of were of be the ago in projects in

will operations that us. this Our work delivering operators but continue reflected this we first for already bid with to add and pursue that highly on evaluate this project the we as of We've overall and affected offset at strategic I improved as and smaller in to switching cost this the continue customer for integrated solutions to look by important seven, returns mix operator. last It's quarter. summer note, were expand We're a we'll by to awards customer before cash North right the strategic with operators. acquisitions. our our also for the them in We from acquisitions pleased focused two on the traction year large is any reduction XXXX the offering. integrated of seen values. recycling started business. our opportunities with mentioned America projects margins the opportunity to completed our for and year and some Projects We're at projects four our strategy mix The similar change footprint future

cost down mixed high incurred flowback and First from repair was Flowback additional quarter and aforementioned adjusted quarter Again cost sequentially three-year revenue for and Water EBITDA our Services. million the some revenue in of after the on fourth reflecting equipment a activity higher the $X.X and shift XXXX. modestly down was

the previous margins the EBITDA adjusted XX.X% which margins we in below XX.X% Our were segment achieved of quarter.

recovered EBITDA adjusted quarter during to not the to improve fourth quarter expect levels. but We the second margins yet

produced We offerings. in will and technology our proprietary invest water automation continue to treatment Steel, as recycling such TETRA

We opportunities major as expect the and we frac flowback post to build with for Also have the differentiated treating more the and water. more out operators. move we into share market relationship as produced offerings

the $XX.X mostly grow of the duration revenue expected This decreased organically and opportunities to continue fourth Completion demand us in Mexico will stream we to in segment Products fluid our despite operations. million offset our capital aid international segment strong X.X%. of giving consistent as short-term in We expect is look future longer quarter to for that we'll challenges some of saw quarter we by first We weaker or see growth. more revenue to inorganic $XX.X and to and from Fluids continue modestly million Gulf projects predictability sales. a some the add more

XXX sequentially Our margins basis were seasonal, first of from chemicals benefited part points industrial our EBITDA of business were basis points early better activity. performed of XXXX. XXX European but down well XX.X% the start and our than an Adjusted

without segment in CS sales previously the and XX% environment of and of in segment XX.X% which last our completion activity low-teens Neptune. the type EBITDA drilling to margins Excluding in market cost has quarters fluid integration advantage, low Most margins believe benefit we this can wells we've for something and supply several of years. generate EBITDA we're in given the without market the are with Neptune mostly deepwater the comfortable in depressed vertical CS margins seen it's adjusted this deepwater quarter in of for this and been [indiscernible] the benefit completion benefit

coming of signs deepwater activity seeing However back. we're

As the our Neptune. half benefit existing this with we the CS Neptune drilling details. and on of field for the have wells With in lower Mexico development improves field production process excluding a even activity completion should of to fluid where some real CS respect sales see are and fluid pressures to segment and technical other this that in in earnings last finalizing that strengthens the call of and fluid pleased and in for the the need has is Gulf terms in an this this for Mexico to of we Gulf scheduled project agreement commercial I'm started we the project contract on CS project year. generation the our announce be reached density in the that for expected is were and we This reported second discussions advanced tertiary require of the Drilling Neptune one completion range. year. for benefit

the As with accurately timing wells with prior challenge projects, to a completion these on predict. being are complex deepwater exact

Gulf We Neptune this size similar be to wells. as of expect Mexico previously our CS project

these now disclose the done and revenue specific profitability As will of we we've customer previously, projects.

relationship operators other and continue of for discussions across have some Halliburton. additional some the CS those with [indiscernible] globe We Neptune projects are discussions off to directly with advanced

As projects are and earlier. predict timing of in see as projects such mentioned for XXXX for these year a difficult of additional this list although projects potential always increase, to complex we the opportunities

this deepwater for the we'll have particularly more drilling As opportunities offshore proprietary increases sector activity fluid.

applications. broader continue reservoir as also on densities work drilling generation will CS of higher the that well designs next and fluid applications have with We to Neptune as

was sequentially revenue second entirely first and up to compression to $X.X EBITDA high of quarter. For and aftermarket Compression this sequentially million rebounding was million the down this from million, record in last year. service function quarter quarters equipment adjusted but $X.X time $XX.X segment, decreased we before had million previously was the XX% communicated the $XXX.X in while a sales our decline previous will which

profitability. and market be Our with supply price contracts high gives to us put we single-digit revenue demand equipment and ability to horsepower compression what we're to service to strengthen which and line prices fleet units rollover increases large in pricing. the for as contracts into believe getting end as on increase to of rollover. outpace continues the we be service continues average to new horsepower On improve high equipment and added our The high

our equipment All contracts we speculation that on attached demands. is range capital. new not or XX% XX% service the horsepower as in put to of through On driving anticipation are XX% the new fall do larger the equipment to margins build on in returns the we are client anything customer

We all expect added surpass one of to expect the in comments equipment and mark. Over gathering questions. quarter With the systems XXXX. then horsepower I'll as million starting the utilization entire on gas backlog strongest in focus cash the XX.X% first equipment on turn have quarter up another the the and balance $XX XX.X% compression open flow essentially fleet of bullish overall revenues and with the some in significantly full We which is In XX which ended remain be that for aftermarket second the Utilization is delivered the on to history gas and oil provide space quarter up in X,XXX and levels. basis million they points in sequentially. large March higher and XX, $XX.X backlog was quarter with we'll and utilization for industry lift pick additional Elijio up XXXX May horsepower sales the horsepower million of is of of is of equipment. first expected to to financial and be April CSI centralized time first as it over the the a operating sheet to for spectrum. over the it higher CSI and

Elijio Serrano

of quarter sheet. operations $XXX continuing was revenue Good $XXX the quarter quarter and to $XX.X million $XX.X compared the quarter yesterday. flow to EBITDA to And in CSI quarter flow $XXX quarter cash million the of Brady. for to and strategy no first from to last first morning, million year operations free cash quarter to year. ago. fourth from adjusted million consumed and first compared $XX.X fourth everybody. this you XXXX. that $XX.X the first Consolidated the operations XXXX. from compressed [indiscernible] This a the the I'm We was of Consolidated the in few first and the in million minutes compares In million TETRA-only the for million. first $XX.X to going balance continuing million in Thank of free TETRA's continuing spend market on compares a communicated was quarter, had of

XXXX, million of reminder, cash adjusted during flow year $X a profited. EBITDA X.X positive of entire And TETRA-only years. For cash the downturn, one as every full [ph] generated year the free was TETRA those was free flow for and

the First that cash capital. flow. from the drive in half There that on half had This we year. four timing historically consumed driven items of cash cash of working year, changes primarily the in second free have is the generated are

other taxes either payable, items for bonuses such includes or and the The taxes, year. prior timing first incentive of first for of being benefit payments premiums, the the type paid in and the income year. quarter year coming prior insurance other the full property prepayment are year, such for to This as the items that

expenditures The them sequence second is and of timing how during capital the we year.

Industrial [indiscernible] Northern The third business. Europe is Chemicals

Northern amount receivables Europe third the the we agreement be second inventory a significant reached any Neptune Industrial The For we've first completed the for on of monetize expect convert that second year. in then that the mentioned half major those driver business of Brady timing quarter. fourth project build project. inventory quarter, chemicals to is and the we in quarter receivables in to the CS our in

we of will of four above be still consume flow adds timing we the flow. these It free target. $X generated of XXXX. generate to free project in that we confirmation cash expectations cash flow XXXX is cash of confidence items The so free in Neptune that million impact when our Some a achieving this CS and of our

and agreed TETRA-only, return to expenditures to approximately For we've million be year full buy equipment CSI XX supporting high we to to opportunities. that capital Compressco of the their expect lease addition $XX in

This made investment vast million were to is first strong. will TETRA $XX the the year. on million. be the capital Compressco be lease While expenditures $X.X will remains sheet quarter million equipment majority TETRA-only $XX making balance investment. on in returns the CSI throughout of TETRA's the

We us acquisitions. can term have delayed with $XXX [indiscernible] available to be an outstanding million option a to loan used finance that

of base cash an We outstanding in which asset for capital on had place also $XXX.X of use working hand. end $XX revolver of the March, At have inclusive we'll we million debt of primarily needs. million net

a no like Compressco. with cost cost cost guarantees on CSI have There again collaterals a covenant. no and separate. no between minutes default, the structure on I and that spend everyone TETRA, CSI Compressco. always are significant to TETRA We are and of couple And debt maintenance now debt Compressco's distinct CSI I'll remind debt no as would

operating earlier. cash of at essentially $XXX million XXXX, million of holders The Series to new The free strong over in For of and debt environment net generating free should of or expense, near on growth to free flow flow on maintenance hand flow is XXXX of was prior form capital cash debt the beyond. year allowing the capital guidance $X in and opportunities of March, adjusted XX% million of $XXX to XXXX. the cash. Compressco million cash price that in after at from the distribution. the cash covenants of million CSI end for quarter. CSI capital. are of obtained $XX debt increase net In down A its the million The cash redeeming A of as to equity million to-date. interest yesterday balance without guidance deployed we Compressco EBITDA. of preferred between units structure to a flow are was the maturities. reaffirmed term $XX implemented that continue maintenance returned and $XXX end generated taxes spent returns balance securities $XX Compressco's and for of I $XX $XX.X of had cash A that that and units no The was over Series redemption the generate on increase they're December At mentioned approximately was and $XX.X CSI million in end very of unrestricted is unchanged the of [Indiscernible] expecting million the preferred Series cash given XXXX cash inclusive that CSI last be we on million free Compressco

the deployed. how deploy and determination increases to CSI bonds unsecured quarter those of will free how Once unit XXXX CSI Compressco's higher flow that continued make A Series outstanding of the redeemed determination the finalize a On August common the is They their being redemption we'll of are the as of plans will a price XXXX, trading XX% ability and holders. of assess CSI we'll and partner once is Compressco cash preferred also cash that to deployment the price the through how the of being the fully CSI deployed. approximately cash. this units to fourth unit are complete carefully for and unit value push CCLP be most the are equipment of To create free will the all general this determined, of will end make returns Compressco the trading, Compressco. TETRA price the CCLP the of is generate on flow year.

flow to XX-XX holders. capital commit towards free that, their free moving into of path improve leverage cash ratio towards to unsecured bonds committed CSI times cash a retiring towards likely stakeholders will we better. the the and holders cash Compressco If CSI towards equity are Compressco unsecured traded is CSI the ratio. will CCLP's bond or X.X invest high being capital. flow and bonds, X.X their CSI growth in to not flow available times going move to material opportunities opportunity return However, take the accelerating Compressco some their are discount, of through Compressco leverage to returning growth of split cash and free both all

comments Compressco As is part distribution. high focus of growth versus will metrics customers oil, of with to to the CSI The while Returning we improve the advantage of continue on expect enhance evaluate our taking CSI balance will all XX-XX have leverage consolidate, and quarter our value drill holder also stakeholder return their of unit strong TETRA opportunities of major Those across customers. segments. that second Compressco be amount the to price periods up for to sheet return volatility. to profitability sequentially to

the further With business Northern with contributor the the Flowback this sales the towards for I'll for CS equipment news and each turn major major release Compressco's being from and mentioned it the our release rest supporting We and among Europe of Water transition morning news The EBITDA the Brady timing seasonality encouraged back driver Compressco of the drivers. to the for With deployed yesterday Services. I to CSI earlier. and being equipment Chemicals other Neptune operators year, the from read of details. and main all quarter to you increase Brady. project that CSI expect for

Brady Murphy

open we'll for up questions now. Operator, it

Operator

from [Operator first question with Please go the ahead. Praveen Narra James. Raymond Instructions] comes

Praveen Narra

I to multiple, it guess took took service go to how pads from many start projects, guess hear long curios think how and that? how it's much for how trial using adopting either customers to integrated multiple. about see time number nice operators to I'll a it I we integrated be or the on of single could you

Brady Murphy

morning, Praveen. Good

these end in serviced end early of projects of those started were of at year of operators the so we we We I think were the all year. on some varies last the of QX XX it unique customers. the say year, basically them on through

operators five had we multiple adopt second As or different offering. you move integrated a into QX,

you the clients with feel customer five base transitioning first in from a the multiple gives of that quarter. for timing unique XX now a So to

Praveen Narra

integrated percentage you sense the helpful have of and Okay, project? these I projects as guess us now a are to that's that you going. now, what give segment then revenues several for Could

Brady Murphy

revenue North Elijio it's revenue becoming mean our projects of know But recycling I particularly actually can of meaningful percentage which we I maybe tracking don't been percentage the of portion it's overall grow, America don't I at added. our this the a our the on the for but overall and it's fastest comment revenue mentioned part. the to point. overall growing continuing have

Elijio Serrano

suggest small still the from now a sustainable [indiscernible] the overall But continuous that key transfer revenue month-to-month it's jobs. we it it's percentage that opportunity would typically as of with less segment. part see the a of water I Praveen with is

Praveen Narra

I just Great one and then guess more if I could.

You dynamics. mentioned you look I stabilizing could you it's is whether all some or guess pricing looking across how competitive at segments pricing guys talk about how it?

Brady Murphy

premium Our jacket think, double-digit has pricing. has TETRA pressures and degradation transfer our so the some that We pricing on pricing We're resilient Steel flowback single in seen any range. to pretty been to quarter first still in the area close see business a lines, in the did some what's pressures market. in getting really our we particular

Elijio Serrano

QX in higher priced in QX and the equipment is delivered that QX are year we've in started being equipment we the last in that on a when there started Praveen and that customer equipment early with was ordering year, side, beyond, to year rates commitments that an compression at we QX and and and we could come now QX attain pricing deploying. of we been than on starting what rebound And last and next those saw and early getting equipment delivered some

getting that year, in and placed on for last were of benefit premium QX orders QX that that So now of we're pricing compression just the side.

Praveen Narra

guys. you thank Perfect, much very

Operator

question from Sean comes Morgan. next go Please The Meakim JP from ahead.

Sean Meakim

you're just I think go in So project change the some for I type need the be to around deepwater. to we that's specific the the lot you'll the to when for just about a uncertainty what this revenue? would but project, Neptune of helpful these to was lot see for no know begins, it's think you how parameters go looks should you project Neptune and understand And there's on of long a it into so give us project. but go, until inherent this you another how to cadence then just Could that get going project a given more think this be between be maybe deal, again when the But timing in be meant I like. of, like that can able recognize a for not will us

Brady Murphy

commenced. existing are confidence drilling so particular have productive There's We're there, we're high familiar field. so production pressure mentioned to and with Right, level I as familiar pretty what the this fairly regimes that well Sean be. has we projected with be your will the

that standpoint, deepwater is you as different level our than But fairly is confidence high. I the from it So think a know, regimes well anticipated. pressure could be

they pressures, So to we'll they've know until got they've complete through the drilled to the really wont' that reservoir, sure zones taken the want make Neptune. and be ready mobilize on

as much little this point. a at bit as that's give but So about gives color, I probably you can hope that of

Sean Meakim

from is Can to TETRA? how long drilling give timing takes and commence towards you make generic a it completion going revenue into that for that

Brady Murphy

if to we But point we've the right The seen the that would again probably bit. is latter projects some is phase projected these QX, well. at But we as of this the little move can plan as drilling they completion deployed it. stay recognize of for on understand before revenue when a completion part fluid

Sean Meakim

just Got a the helpful. basis so just okay. you maybe transitional us rate excluding of to on a run to give maybe developing one flowback. a get And the very some new some above of E&P's, of sense That's while trying ramp Can XXXX you've then more try it, do on have quarter? strategy to the up we or maintain had activity. and than an if of pursue what based the other we to that say is the don't margin more these differential work of also you'll the mix it change impact go and Is back we on all drive the in can project activity other trying issues to margin in bit in private half some fair win back transitory? relationships type words customer in been Does

Brady Murphy

Absolutely. Yes. Right.

and and margin going I highest the forward. in mob for quarter, important of equipment mobilizing, margins very the the revenue de-mob cost same manpower significantly our in From pretty to have higher go relationship be I de-mobilizing were to more who shift impact you're Let we your getting of so think that stay because as back full they're we shift that me them. to independence work. to of demonstrate plans reduce like We to them, with had answer with value the their contact feel in clearly able they we the and you have see so the revenue when E&P's services QX we saw fact and in for the type be that and and second quickly the the ready think terms plan in a that and that a higher going your standpoint, support we'll not unusual transition But to QX. really was you to the business smaller of some and first their them cost you're activity had part of part us with we obviously in the clearly to larger to obviously impacts offering we

cost in margin jacket somewhat we we the that progression gear and in as QX. terms was lowest of single the down to but largest pricing impact the sequencing flowback think I had the second then quarter the QX, in line that from the of repair overall contributor think part said, a I previously that's was transfer QX from record

Sean Meakim

Brady. Thanks a it. lot, Got

Operator

comes The go Stifel. question Stephen Please ahead. Gengaro from from next

Stephen Gengaro

next roadmap a Just that to contributors with that bigger picture bit family two products capital you of just your understand TETRA products I going remarks we and questions, first are whether to capital just this, on that think help about it's to etc.? needs us cost think over outlook the returns you market capital, so about mean prepared in on guessed sort I TETRA specific, two-year. there on perspective. of you a within meet that what can returns from the you one talk guess in sort when little which whether forward. the your say - are a to the driven, about it's happen,

Brady Murphy

than temporary CSI let for I'll got fluids side that. starting everybody separate to and and within that their capital for much the segments with Compressco Well million know, pretty and cash structure distinct business. add start then and that them and me a $XX as Brady you we've kept we're three first let providing this in distinct Stephen support we the lived them, TETRA separate flow. other

out. We've the to globe You a we've know that network built the very manufacturing forth back we've and distribution barges we got got move fully facilities. vertical a and point, network integration opportunities on equipment good built got that of across out

to have move rebounds deepwater going don't more so out more manufacturing product tank seen you've sold product downturn to with to under the hold add barges have be really run to and capacity. cost to capital goods maintenance during of to that have a It's move we year. add can more We system farms there. around. that the $X the we through And don't business million this don't add We

the little and rebound incremental to required starts fluids starts deepwater capital on benefit the to very benefits, deepwater business. there's the the So

some on time XX the requirements being we've coming investing couple have of treatment getting into in the re-mobilizing that the terms best operating all capital. in getting out Water the [indiscernible] we recycling, getting coming a we to every move side, unit integrated negotiate and various that and multiple pricing de-mobilizing as and and in project instead investment now months. that technology projects. getting the are got XX utilization at and of months We're of who's in of Those with and are consistent the added there from returns months from been value in we've Now we're and Flowback we mentioned on this TETRA rate water the testing that previously Steel aggressively

turn a we Compressco is that large expect what been mentioning CSI in don't here So water capital, add the out when that's five-year starting return market of this think The - doing side, on the core be capital. built customers. look starting sheet fully capital toward so have see XX in Those XX-month patterns as to on for you returns we rates to more at Compressco the that period equipment. We're business. look compare are and services to focus position others to especially expectations out, months spending to we're attaining the in more to we're segment, and remain balance holding. fall standalone returns there. of I on operators payback on concentrate side in are the how at business then our We're their that top networks pricing consistent It on CSI XX% we XX% that flowback range XX-year it. getting that those XX compression XX% the on the when we're we've our fluids that think through We we Compressco with CSI to already XX the

Stephen Gengaro

Okay, talk will those drag enough portions entire the thank capital? you. segments of to you part across those about the be that when But businesses,

Brady Murphy

We believe so.

Stephen Gengaro

second also, sort Okay, segments. it the the I when you and thank and assume million, of there on EBITDA improvement pieces about $XX current quarter follow-up we was or the segments non-related about just sequential on which three you. a And moving see as then consensus think consensus - $XX we is like about in? follow-up, the think the that, million comments think biggest to as you Any think

Elijio Serrano

with started biggest got We've segments a the quarter our We impact our the first see. ended quarter. were going we We compression from third is of the it. better we rate the that run pass performing side encouraged, be what first think at at and a numbers three of to than April first

somewhere to million then to first QX then sales to mentioned quarter and we double going deployed we're second around expecting the to yesterday gets $XX equipment and equipment also QX that quarter. from is $XX million the in be range more range equipment As sales compared in almost

translate up So in we ramp to a into those that nice very think will EBITDA QX. QX

The opportunity the smaller second will significant completed a benefit. gaining have that on versus upside. we on will major expect or significant benefit towards third traction to we've offshore think that's second as some we to Then if be we we area transition that's independent that profitability, be the now that the incremental the seen converting get favor the a completion see timing on fluids of our in

Stephen Gengaro

also then the the side. fluid on seasonal get And impact, right you

Elijio Serrano

revenue have between with million improved and revenue seen of QX that. very $XX EBITDA of from through fall we historically to anywhere and $XX Yes a nice QX through million

Stephen Gengaro

for Okay, great. you the color. Thank

Operator

question next comes The ahead. Please from John Watson Energy. from Simmons go

John Watson

cost and about being on we the about line? QX, EBITDA the as On that de-mob should mob $X in million think

Elijio Serrano

start million more generating granularity. go out as focus the it the new it But level project other. was cost of the it going pocket into on downtime revenue equipment people on not but before wasn't our actual as - opportunities that We're high. of not wouldn't to suggest and much that $X were I one got to transitioning we've we from that of de-mobilizing

John Watson

in quarter? in I it. you and your got you first Okay, Elijio Thanks talk through charge regarding some the means? flowback. Can repair the you that then repair repair cost the us the through color equipment cost us your some for customer. back flowback think of what to give Can higher

Elijio Serrano

seen testing quarter recent side fourth one peak quarters of history. mentioned the the Brady that were in the in on we've the that high. was of volumes incredibly It flowback

to another all job we one move to complete we pressure have equipment. test the As and

any was went charge pressure modeled a process But to doing you have or periodically what pressure through it and come believe we different the project cycle coming to go really and up to a of go comes and test that that clean equipment to off have that's through once was in, repairs and specifically that we we it than due then have everything the be customer customer. We debris on through that if will through. it and caused in done, to the we

John Watson

water in quarter? Are more that flowback. any one just the and Elijio we facility Thanks be anticipating there helpful. second and within should that's sales Okay,

Elijio Serrano

this at Not time.

John Watson

Okay, I'll great. back. color turn for Thanks guys. the it

Operator

next Instructions] our question Please Curran from from comes Riley B. Thomas ahead. go [Operator FBR.

Thomas Curran

services Could two share just split the and segments and the for was you treatment? quarter between quarter Elijio and last water division. and flowback revenue services with flowback this water what the us

Elijio Serrano

providing revenue also. the that stopped segment. would And is within I inclusive stream flowback suggest is treatment greatest granularity, of water water but We've the that that

Thomas Curran

quarters? both In

Elijio Serrano

Correct.

Thomas Curran

specifically give us you at point then automation and water Brady, could with have an your update for what on Where to that plan concluded? Okay side? would expect and the at you you're

Brady Murphy

really automated entire taking our The a is software have manifold, TETRA. - on change current aware Sure. of of operation even the again recycling components able and that holistic testing and may whether be be it's offering automated pumps, it I automation closed-loop we distribution in program the mean to it's whether lot providing the in a the you run phase quarter system trial of it's be to step our will as believe stages final location of that we couple this clients even whether our deploying we're units. that's capabilities that software run another overall We're we that to of remotely in next speak.

Thomas Curran

for in that stand each? just automated are and pumps your currently Great percentage of of Where you do the point. this at terms manifolds and

Brady Murphy

the Yes portion solution really working XXX%. able again to pumps a on a The so of not remains working automate that portion on we're rest fleet have we that Those so that a of be we rental. deployed equipment well, have capability, own, those manifolds nearly recycling with automated. XXX% to our of that for the solution be are our are but that's always pumps we automation on that. we're that But of would are

Thomas Curran

taking All my for right, thanks questions.

Elijio Serrano

one quarter. benefits to the Thomas, and now that in so to company business Northeast the in fourth ten question add with the Remember months we I'm water to going just sequentially and the month the cornered lot first asked. the a modestly the Therefore in in more transfer versus done acquisition that now water raised. point data three got treatment integrated testing management you did was of three in you the of quarter the we've increased bit towards more quarter acquisition and it an full production one attribute projects first quarter, we plus the question the months fourth little water

Thomas Curran

you Thank that it's helpful. I reminder, the for appreciate responses.

Operator

comes Wells Please question The from from go Sullivan next ahead. Fargo. Cole

Cole Sullivan

pipeline it for like could of still was point? there in looked Neptune international second that an last that this the in something the project be half Is that's the at the the was year. call On veins

Brady Murphy

significant have projects. fairly Yes, international we of list a actually pipeline

some us into few we're or in whether a hopefully a year of predict well. this don't could that again into quite projects Halliburton the secured little coming the multiple list projects difficult Now years of at this until We order, to comment for bit actually come but still a through point. the one this we have that falls but XXXX, tracking relationship and growing those year, through as like

Cole Sullivan

quarter kind see just and looks that in commentary like kind the on that the way is quickly do to any XQ offshore XXXX, It up there in completion guys made second of XXXX How that? you you activity on then expectations. ticking fluids. and frame of the Okay overall versus is

Brady Murphy

Yes will on to believe internationally some XXXX, the seeing continue business we we're our us. clearly offshore and fluids for increased outpace side opportunities activity

that we XXXX business from the feel plans be in Gulf fairly certainly will base the looks strong. bromine also with but that case, up demand even with Neptune We of be our will Mexico potentially clearly our project CS the have

should increased be seeing activity. would we say, So we yes year-over-year

Cole Sullivan

turn I'll it back. right, All

Operator

question-and-answer our concludes turn conference for closing over would I like to Mr. the remarks. any Murphy session. to This

Brady Murphy

concludes our interest to This call. morning. appreciate in We join TETRA and thank taking Technologies you your this for your time us

Operator

The now day. conference Have and line. your may you a good disconnect is concluded

TETRA (TTI) 9 May 192019 Q1 Earnings call transcript