TTI - Earnings call transcript Q2 2021 | TETRA Technologies, Inc.

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Operator

Good morning, and welcome to TETRA Technologies Second Quarter 2021 Results Conference Call. The speakers for today's call are Brady Murphy, Chief Executive Officer; and Elijio Serrano, Chief Financial Officer. All participants will be in listen-only mode. [Operator Instructions] After today's presentation there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded. the to turn now will conference Mr. over I Serrano. go ahead. Please

Elijio Serrano

remind Good Thank call. you to may conference be morning. These are for be statements Kate. may I that contain call joining like deemed results thank or XXXX And you, that this quarter TETRA would forward-looking. to you statements second uncertainties, statements and many company. of a number on based certain and assumptions based beyond number are on which a analysis factors. of are are These the are risk the to and made by TETRA of subject of control

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

to nearest cash non-GAAP accordance our EBITDA, measure. website adjusted with of refer EBITDA, in complete considered for should gross margin, In measures. a reconciliations GAAP net prepared non-GAAP release the flow, are EBITDA within or adjusted to GAAP This and reconciliation for of public the and not period. addition, the refer financial course adjusted for free in liquidity information financial our context today's not press Please of financial or be to substitute debt, to financial the other may call, measures results the we

turn announcement XX-Q that's to yesterday, over In morning addition website. release available website, our it filed to on our earlier that now this out I'll our went also press Brady. and posted we our to

Brady Murphy

Technologies quarter Thanks, Elijio. everyone. call. And XXXX earnings to good welcome second morning, And TETRA

had our press we've months. very have a busy from may few seen recent you As announcements,

announcements Elijio provide and cash the additional as quarter, the back some information for over color sheet to highlights well to some summarize will it I balance on recent our turning so some on liquidity. flow, before And as

being increase a were Flowback with - June year-on-year, quarter. EBITDA Fluids part EBITDA year-on-year the and while & an Fluids For of revenue Completion in quarter of $XX saw latter XX% activity month XX% up our The Completion we new the February with grew quarter since of Water material down XX%, for adjusted sequentially. and in highest while grew the we the million, finished financials, sequentially, we by X% the second of the revenue completion as XXXX,

Our in continued Lithium coming second million continue equity to and increase. strategic as $X.X the has million CSI with Compressco Year-to-date equity investments Standard of quarter. values contribute this added $X.X to EBITDA in their

improve much recycling in recycling we in sight While deployed Ahead pressures, business get the fuel and impacted supported quarter, and Argentina, of inflation of project ability started that materials for broad labor, fully have the pricing in two line our July. quarter. third customers to for place, in margins by projects, projects, agreements particularly new and key Sandstorm to a increases Water our to second Flowback pricing

was over $X.X first So of positive Completion the customer while fluids first June the our operation. North $X.X straight We're to monovalent to our first compared Adjusted also as the the to and mid previous XX% target, our has inclusive of Sea, job from our guidance first that much ninth the quarter in international ever the were a the of second improved Lithium. future our first announce adjustment investment Fluids outlook. that for announcements in completed and quarter. number it fluids quarter, quarter our in activity is due quarter recent seasonal the XXs. well in the increase our more results of the significant recent which in as our European industrial news offshore July, Standard very in EBITDA of & July, with increased completion margins our adjusted margins Neptune million stronger row favorable quarter month million XX% Revenue above us increased during line optimistic pleased we chemicals Products the sequentially, CS marking EBITDA XX.X%, the mark-to-mark northern and were in business for for in high-density EBITDA uptick

our for a the of the considerably our Mexico While we higher North Gulf Sea market, But lower potential significant Gulf for project, smaller the this into be believe And fluid with Mexico applications it accepted acceptance our frequency have Neptune jobs. was smaller previously, will highlighting than we typical in most than jobs. milestone proprietary markets. of of new there's prior jobs discussed of volumes of project was as technology once

CS market position. free another is As increase secured zinc will in of of for “delivered last Completion year, one use quarter in during Fluids zinc in the reminder, deepwater Completion of value market such two gives a both for Brazil, the of us second overall Sea, as Neptune strong Gulf share firm our it, and a we awards, known continued confidence the leaving markets for solution, TETRA in Also best a industry the banned independent Mexico”. Mexico concluded our in that and which for North research the Gulf in Recall offering. Fluids the quarter, the third strength well a

the of As of starting in award in quarter. some deepwater of of represents most the the complex world, the helped the recent this we Gulf TETRA will these wells claim. third Mexico the validate benefits awards Mexico see feel Gulf

first quarter Brazil work the in of start XXXX. the most While will likely

products also Mexico for offshore award our into we Fluids years, major over been in a major and first has started and three in continue that will in late June quarter. will services. to Mexico market in third Completion award believe that We This open received the our and continue

major at over was this this February. market. from years, in impacted to returns on expecting & recent opportunities in by moving in full the XX% mid a of second first second over facility and growth Flowback XXX%, that several a and The to plant based European quarter quarter strong Kokkola our capacity be in success expansion winter services decision XXXX. sales small driven in a increase XX% materially first northern that EBITDA The capacity see increase Kokkola first offshore international has by activity with these that has decade. the to will our chemicals are our key increase - industrial investment to and our half we're project business in our The and storms been offshore relatively we markets, to international capacity Water in for With adjusted and generating activity increased we year, capital facility revenue was the with the and ongoing business, fluid that by forward increased rebounded half. by chemicals sequentially improvements, Finland compared completion the Also in and negatively investment about of overall awards the the

quicker second the price in mentioned comments, As pressures my to obtain impacted than our able profitability with were we inflationary increases our customers. opening in quarter

with we're June was increase change. from held the majors lead Regarding data derived strong, customers, of count. is that independent rig privately of large very by well-capitalized revenue comprised only we've market the enjoy XXXX of of been a our base first that very this fortunate the half super this operators In US the and operators publicly We well seeing years customer this by recovery, This the clearly traded comprised publicly in largely over in companies. activity. responded major of the XX% XX% and traded end to the out pointed

were including quarter, new held continue management operators, second we As projects water for awarded produced our two and to multiple independent base. recycling in integrated we grow jobs, water privately the customer

these transfer, quarter, recycling, pricing in to for in dates fleet asset In our for Argentina. water quarter for the priority allow before cost near deploying second actively out or us water of our ever deployment July, acceptable with treatment, were meet sand of US clear we will management absorbing assets the first is assets sand we the from that we units second management maximum fact, as contracts, we our to utilization a To existing contract operations, and Argentina. Sandstorm. Also pulled close without mobilization the an we're revenue operations. international of to new rate add Sandstorm water generate our at and running return will The

replenished mid again at July, full we're all now And and of by fleet US CapEx, assets our second Sandstorm are has maximum utilization. in operating the However, revenue. been Argentina our quarter

we have positive. good the line expanding in low view net expectations been third Southwest of seen a business energy carbon is and but as sight acres release and very Smackover and very of first, acreage all have geological reasons, bromine we've leases We from to bromine much growth of by very this in assess of continued the completed with view in companies a initiatives, the we may Formation a the in active lot as improved our quarter, supporting rich these new developments, yesterday them you margins. technical is of news Addressing our firm our For approximate concentrations. With targets announcement, of with exploration that as brine our lithium preliminary we positive an XX,XXX lithium to independent from consulting assessment report Arkansas. regards announced, very

acquire respect Standard previously agreement lithium Lithium Lithium acres XX,XXX to Standard with an total, to with has reminder, entered a rights. option into approximately that As had of the TETRA Lithium, option to a payments. after replace Standard Pursuant rights. annual payments the cash TETRA royalty the Lithium production, to will cash annual make initiates payment maintain agreement must these commercial to to acquire option Standard the option whereby

approximately the in this resource XXX,XXX on on to the during assessment. quarter. clarify, tons where Lithium Standard TETRA In preliminary all inferred Standard of and This quarter, To by the mineral the acreage TETRA As where bromine exploration Lithium assessment wholly the economic the previously acreage TETRA expected the is the announced Lithium TETRA, completed all the option. assessment a and Standard the category. commencement holds Standard for indicated lithium includes to further leases and announced which Lithium XX,XXX assets third sometime LCE equivalent that owned is be rights subject by not second target of of scope work the acres, has the lithium the initiated net of

brine bromine XX,XXX price assessment to per $XX,XXX Using market the tons amounts $X,XXX and future XXX,XXX estimates target per between of elemental market market the The and and in is target the and X.XX exploration price an exploration lithium. Lithium ton, of in X.XX and per XX,XXX lithium bromine elemental has significant tons approximately These of and approximately LCE. current between lithium and current elemental for of of U.S million to is ton TETRA. China. the X.X, to of a bromine, technical prices LCE represents to ton For $X,XXX source exploratory the estimated XX,XXX potential Equivalent contain contain target conversion estimated tons identified Carbonate of is to current value

evolve the economic accelerate developments, of to evaluation as Related we a these of that a assets. chemistry. with plan initiatives, electrolyte our part to energy discussions we to these with so bromine key zinc-bromide And of full utilize multiple continue our companies storage feasibility their

storage lithium bromine explore to things, the that Fluids well Completion oil a other develop Anson outlook Basin plans a purity forecast southern bromine high we base first gas bromide our share, received potential considerably both and among Utah. for for we've manufacturing bromine gas Project it a market, demands by collaboration purchase resources, more combined for Australian off-take publicly meet recovering believe TETRA yesterday, a process been of customer our our the memorandum on of bromine bring meet we based business With projections, with of grow with a three PureFlow in year operational to TETRA's [ph] of understanding ahead to future year in and work Accordingly, with to zinc to continuing is their for energy to and growth minerals we end traded with potential potential. clear licensing PureFlow the and our or executed an extraction The our relationship from manufacturers arrangement what include, agreement multi be to has Our will management zinc-bromine patented market expectations. to Paradox Brine commercial energy and plants. announced oil order qualified need for company, storage, growing and we through

business $X to the construction a excited COX diligence a a in successful a that I'm mineralization in to SkyCycle announced the our Antonio improvements company Flowback also CarbonFree continued leading San investment to considerable plant, this its equity pilot engagement specifications with chloride. Finally, are plant, plants fully segments, CarbonFree continue our commercializing around recently for allow and strategic in and for had the we upside make of seeing improvements a in working to services, note. in Fluids, engineering year. have and we term on progress continue In and and a SkyCycle and relationship, industrial participate substantial continues source the we overall, to pricing us the CarbonFree announce globe. agreed after we technology half to volumes in will due form provide increased This convertible expect we make million second solid design as to SkyCycle jointly in proprietary business, the our advance international quarter, long to our activity with to of closing, and of Fluor, help calcium sequential Water manufacturer and it the plants plans

potentially at putting flow of the market Our believe low over to top potential some base than will we'll it that, these additional our multi With faster clear business had are of initiatives. provide energy we improvement up and year then Elijio multiple speeds and be signs revenue, recovery. we what cash is that, us showing to what opportunities a for the anticipating, I'll to carbon moving and a near been the in in EBITDA turn communicate to it questions. from future open position On

Elijio Serrano

Brady. restructuring stock This term charges. adjustment fair of long stock and expenses, include non-recurring expense, charges compensation, quarter, of million related expenses. of In expenses to warrant right $XXX,XXX other non-cash $X.X non-cash the value and $XXX,XXX you, we appreciation Thank of million $XXX,XXX of incurred second $X.X

that the mark-to-market Compressco, quarter own own The million a second we Lithium. million included units adjustments also Standard to in CSI gain that the $X.X X.X on shares to and in common we

increased adjustments have we the of own entities. yesterday June, from $XX.X of million. that this equity equity publicly the Standard for traded market million, close in investments, of monetizing of year might this of or this mark-to-market continue of the market holdings the not the or [ph] beginning value to us two see end will these as to We The of We the $X.X value was any by CSI have Lithium. restrictions holdings do prohibit the XX%. Compressco From

evaluate million, recognize marketable sheet, the another million $XX July, you does us monetize have I position, must securities of at balance increased our appropriate time. almost $X.X As investments the in and now the numbers this In liquidity one value cash we that available just to mentioned. to of reflected

Given marketable, are adjustments adjusted we're in this this including mark-to-market our EBITDA.

a flow of generated in adjusted of $X.X operations and Second build this of perspective, in was a month year-to-date quarter the April. free June year, first accounts mainly toward the of Despite adjusted that $X.X from receivable we higher flow compares read month we cash use on operations in quarter. from the of capital XX% in To a you quarter. free to continuing cash flow million basis. the the revenue million We working cash the of quarter, up are [ph] end continuing free some give than second positive revenue was saw the cash rapid up in

expense our free year maturities payments month, amended XX, reduced an the September have ABL $XX.X months of the July. again, million $X.X availability amendment million part and by our the we million Into paid before before recent to another million and post-closing borrowing plus this will increased million. annualized second not by us June this ABL approximately this of $X.X quarter, Compressco facility. And we earlier, Total approximately mentioned And capacity and cash streams the operations the this Other the $XX Lithium. Europe net down investment be credit while liquidity excluding just the debt our pay the amendment XXXX, in steady chloride unrestricted down, as expect Also produced to we're ABL, the that the CapEx pendings we at cash do consistently our increase July, production Kokkola on based as of the interest to save of not on under have XX, the In before extending to our was the availability by $X.X investment $X.X $X.X do end that XXXX. we $XXX.X excess significant. XX.X. revolving all $XXX.X predictable in expect calcium million. facility. base than per facility XXXX making I an maturity Northern July, unrestricted increase of as TETRA. cash amendment, on We over in it last available mentioned. With And $XX.X our loan available, our borrowing In June have Again further was This payment flow. in is earlier million outstanding million debt had $XXX million to received transaction. of requirements. next by was our basis. of million. the our for increased credit until loan Spartan a quarter million $X.X controlling this a second May $XX.X on a of by we Standard of interest anniversary to years under week scheduled Brady May value we the cash defined potential two at million. was end term six cash $XXX,XXX and our XXXX, sale This Compressco And as in from on any and million reduction month term further CSI the year. of in Liquidity payment reduced of We from million CSI $XXX is was

earlier, to million Compressco and XX $X the CarbonFree. a XXXX of of we that [ph] refinancing million additional upon TETRA due the agreed million obtainment of investment EBITDA have an of $X.X mentioned And notes $XXX in We in in make CSI the trailing achieving also of after month payment due Spartan, to Brady had XXXX. a

quarter payment the year. technology. before participate they this opportunity an This carbon We to in be capture the end provides the their as third to made us upside equity this of of SkyCycle commercialize expect

to many addition developed on that calcium XXXX. significant price. were added consistent a we XX, all chloride And with providing new that jointly We to to June potentially of stockholders, Russell with impact our our opportunity volumes an stock what In have the read and XX-Q TETRA of in taken sell to for metrics. supporting And and you up filed we operational we the have with finally passive to release communicating including the additional we been base [ph] which welcome seen last we'll positive CarbonFree. we it who the were and positions holders have previously TETRA. open for issued night, details encourage financial I press Kate, all index that our yesterday, that, that stockholders, questions.

Operator

go [Operator Please question Stephen is from first Instructions] of Stifel. ahead. The Gengaro

Stephen Gengaro

Thanks, and gentlemen. good morning,

Brady Murphy

Morning.

Stephen Gengaro

I start few I you. to And you don't if have things what with a mind. like would

front, expansion expectations have Maybe on can want I guess, Flowback don't the of of quarters? of second in around Water And pieces should Fluids it, Flowback give to Water know the impacted the those seems and a with & lot But just positive like moving impacts margin segments? you good about expect that around margin and parameters some kinds help on third But the And revenue for on fourth third. half you can give you the a there's two a expect the here & quarter talked and You on with you the the precise it guidance. ranges year. with think on you maybe both and - particularly us up. step pretty I second I sense?

Brady Murphy

lot we we we'll we see that third have from again, and what the third QX. the close margins now. growth from we of go that, business hold a Flowback think year. we I'll also with through where And for doubling we we quarter. our pretty of But moving in continue the feel that fourth in see parts is EBITDA quarter Water fairly But over have in ended double-digit as spoken Stephen. & of make confident the second quarter or sight third to for we the doubling QX, & on some off Flowback do line Again, potentially feel we the associated And good Sure, for progress the to range Water Yeah. quarter. quarter. about. What

On two awards about the talked Completion the that we know, Fluid two side, you we've the - had.

For we you that can see material tell award until through we our in you an see impact Europe, most that year, and will Mexico this year. plus Fluids the in as The three Gulf for the in the award, we'll you positive the award, our impact and of definitely see reduction for and know from go of likely QX impact, of If seasonality for But see will Mexico the of increase that Completion our QX we rest will Gulf that the throughout not year overcome combined QX, in Brazil next I helps. the us business, the rest of year. period. activity

Stephen Gengaro

anything, And Yeah, chemicals to season, look margins of that quarter the Or was does a the normal second quarter? help. sort European because speaking there that was good? pretty

Brady Murphy

European Yeah, lot so business. pretty a in and normal QX, for and that business. to we've our our a Stephen, done profitability it much improve quarter margins was

Stephen Gengaro

thank Great, you.

how sort income quarters, other about the spoke over Can low the three guidance and release and The about the statement to little in know the of were they recently. you the what carbon carbon I give was last we when curious us you announced initiatives I several of this think any niches? think you couple together should how components timing we I when night. about of we bit unfold on you low some of the the But thing on years. think know, And next, main about when a about

Brady Murphy

able to Sure. a at we'll And prepared we'll hope give in to terms, that. through terms. But that to them to not do specific shortly. general We're point. or speak revenue you walk general guidance this We on be EBITDA in

we're price, TETRA. important that an a yesterday's million meaningful you agreement, see. close accumulated we'll that's to We've at think today. I Lithium continue that value note to Standard seeing And million to to know, $XX X.X it's benefit the shares

to had we the price Over If the for X.X plus closed million that's another of just shares. years. acquire value, the take another million three get the million potential million $X.X That's $X.X. another cash we $XX.X three in - yesterday, that we next years, next

So that if assuming years, I amount time add what what to the about million to and we I of value we've before it producing up Standard takes over accumulated $XX next those they see ready three to producing escalate if already they - get And TETRA numbers start course, up of talking meaningfully. We're potential start then, lithium. lithium, of production. for Lithium when

that's the material anticipated Arkansas, now leases, a On side, come two would. we to energy advanced, ramp. we've in leases with it into agreement the on that on very for as own demands additional mentioned these storage to could our companies, point again, PureFlow both see calls, bromine will our XXXX. We in strategic and based will XXXX that supply, announced much be And really the Anson. we've of It's in their need with QX business quicker than to start at and mineral opportunities, to talking material that XXXX, meaningful that orders is have additional well as secured with why us we carried we've as believe which

get to that clearly period, we supply. bromine XXXX As will additional need we that

as we know, And additional is their still plan where pilot they've to capacity itself selected contractor. build, capacity capacity. Fluor at demonstrated that. well need as then above will actual the CarbonFree, the to But the the specifications. plant has you bromine Our They've look we

startup first or that by end XXXX. potential to next the their year, the operations and them And of quarter with signing between of expect the now plant if year, project be first end will, construction offer, the know, as again, We to that years rollout if could plan, the double. our two sales as chloride that calcium and after we of solution the expect they within next unique looking forward successful, you they're production three because they of fully

for types So carbon as again, out. low of play material energy these projects us opportunities

Elijio Serrano

had data calcium we from revenue think of until we of have Stephen, that previously about million I chloride. points Number are a communicated And produce one, I couple that $XXX globally relevant.

not XXX,XXX And under we acreage, and earlier the that issued those Standard got context Standard also, is could we've it XX,XXX the the not we've XX,XXX some got ton press the is that's talking of you lithium is, mine value the which And or that equivalent of of and in future. comment. then yesterday at appreciated that give which XXX% of morning will a owns tons we is And that in one understood release fully into think Lithium agreement I to leased that and between a outside Arkansas, still to Brady's think things of investors that yet agreement. Lithium all So not sell understood indicated TETRA rights significant of carbonate appreciated. I fully

Stephen Gengaro

Okay, great. back very line. No, that's helpful. Thank in you. I'll get

Brady Murphy

Thanks, Stephen.

Operator

is go Hoh Samantha of next question The from ISI. Please Evercore ahead.

Samantha Hoh

your margin? impact was the assets have you if and to Thanks the maybe EBITDA that - on side Argentina from some Water you Hey, Sandstorm for moving to segment. the providing maybe the impact guidance margin to way, on just XQ of and guys. EBITDA from what Flowback Brady, asked another I handy, revenue know, wondering was

Brady Murphy

believe a We is equipment of units for in with units, the then quarter, about that was all production. backfill number of significant revenue - impact of set that those we those clearing the main we for the in Samantha the But quarter, was customers months obviously the lost and for customs units. up the two and probably back we'll getting transit, for then full and month third have

Samantha Hoh

then more bromine [indiscernible] order. And things just great. the maybe a little on Okay, bit

time start books, in actually or see getting of production know, that fulfilled? lag you just some delivering that Do is terms mechanics the what So that on have of the of there in revenue? order you you inventory your sort that got was that, can you some before first hit we available that

Brady Murphy

Samantha. Thanks, Right.

- terms also know, pleased order So, because their you energy at a you PureFlow starting get we be sets we as they bit our their at it as is larger systems. quantity, our to order order the confirms first we're first sets a qualification of things the point point for the it for believe delivery, both commercial into year. significant, which quarter of where technical think systems storage what it a benchmark, we will of But Obviously this will the and in, smaller up of know, was started firstly, with. next ramp be this

Elijio Serrano

to is and into that process immediate to we zinc we Samantha significant the it opportunities. The sure of we that meet just convert it's understood to take appreciated, that benefit today sector. patented And bromide apply zinc [ph] into PureFlow volumes oil the bromide and make our have gas sell produce some and and that of

Samantha Hoh

for the you the change chemistry have different customers? to Do

Brady Murphy

No, supplied chemistry specifications there. market, between There in for energy will are storage storage, than we change supplied purity oil significantly and the to don't the to highlighted expect purity higher is energy gas we what's change oil required gas. for what Elijio and level, as the we what and the a the

Samantha Hoh

does you end CarbonFree the MLU? Do the investment, Right, the for by how guys that still around change of that finalized terms think year? you'll the have discussion the

Brady Murphy

are work of making you side, point, various I parameters to that TETRA places sure volumes, world, source would very be working general specifications, do. specifications, some chloride concepts with the understanding say would that work on know, is the their want of can CarbonFree, volumes and we Yeah, their their working in towards. this specifications, to calcium to some the of we we our excellent. all collaboration around well. in understanding the That The going provided at the to we MOU towards, set kind CarbonFree is with collaboration what And guidelines

agreement expect the way are place, progressing fully we year. a definitive things certainly So to end would before in the the of have

Samantha Hoh

next What's the and of the on new Arkansas terms to the business step of, Standard Lithium And then in assessment you the for energy even have yourself? your actually develop know, reserves. to maybe just on would this them you that stay or you piece, topic, actually, take

Brady Murphy

Right, right.

So some will our you'll notice exploration on to move were deployed. That's the company the it is based geological next wells the resource have some was estimates we us leases. of effort in to require fluids target an inferred the results, sampling these in going step of go with for and that ahead the that provided, we

as agreement. but lithium bromine we extensive. outside report both that, they not of the in And bit the well little Standard the will for a then as the of be that Lithium leases, our with involved execute So leases in inferred have time the resource

Now which completed in inferred tons a economic study, already have, quarter. they're the recall the agreement feasibility lithium, third resource substantial know, we step the amount which Standard is they within that, acreage report, And to XXX,XXX that have the, you into Lithium expect they've of a moving lithium. the for of

see them you of but of know, a sooner than they're at would progressing So agreement excited ahead path, down that in bit the little moving, to us, least expire. certainly rather development we're terms

Samantha Hoh

just maybe one And one. great. final Okay,

include On the assume know to have calcium a next chloride we incremental for was your you plant time expansion in at that that said CapEx capital you rate, investment. Can in Finland, it run summer? stay no, you have then that? very small And capacity about I that this available would

Elijio Serrano

Right.

expect and to the year. next the so CapEx about between subsequent And will year. to this fully year, we by significant, operational be the year time And participate will this it next have able season, peak be to in be spread not it

be not it's CapEx. going to going – to move on So the not the needle

Samantha Hoh

it And guys. really much, XXXX see so you numbers. Thank we'll more in

Brady Murphy

Samantha. you, Thank

Operator

follow Stephen The up ahead. next of go from is Stifel. Please a Gengaro question

Stephen Gengaro

a we based how of moving bit been Thanks. year-to-date, mind. generation back more on in referenced think one I It's and the we bit. pieces. cash drain, about are think, And the free has working and, know the half up. just I that? Elijio know kind is, think how of a The if that of should forward do a don't about receivables know I year going But you two I you But different capital

Elijio Serrano

pulls AR. might remain that December strong, end an all the of on Brady as allow the to in growth, of us If pulls AR, So, offshore have some terms mentioned, in in to ramp December, side, And with then, got awards to we to opportunities rate monetize of the until year. years, that before we've not December, back has of modestly it'll the way in and back we in side, some the opportunity the and the the EBITDA the we December. close of activity Stephen, during on prior year, continue expect up monetize as if all continues occurred - spike it that pricing onshore depending to

So at up, of the some of can magnitude the it of the AR and end the year, or will monetize. much depend we how on timing determine ramp the the of to speed that

that we have demonstrated got that site. a an there very We we've can doesn't from concerns AR invoice collect, base timely quickly, strong customer present out

of uptake and speed So it activity. depends really the the on

Stephen Gengaro

July think about, quarters, that we Fluids But you'd and these when have I jobs, you know for here, - the when margins these, contracts? of a I the you next the I the And obviously see CS think jump different. in when Gulf you Okay, year core. going deepwater to will thanks. broader know. completed that you these - you've margins I'm know, be you [ph] the But when sustained know in are we have of And the I margins Brazil back job bit rises here Neptune plus sharp meaningful wasn't think a in that magnitude. And prior and you Fluids know, we the announced that projects referenced, because in over

Brady Murphy

So I EBITDA XX% we quarter, the margins. XX.X%, almost think reported for

EBITDA we've Our XX.X%. guidance until target our QX But really Stephen is where over to we of see spikes, numbers our over We see point of this margin. some XX% won't won't that, schedule of certainly could some maintain XXs, deliver XXXX, looks we're we you which at mid type like the seen right prior of Neptune large now the see of more Mexico in the know, Gulf jobs. that wells, to jumped you on

Stephen Gengaro

right. All Okay.

the improvement a time. then mid based plus-ish back thinking be half the year. may still from on in we're it And So XXs there

Brady Murphy

Right.

Stephen Gengaro

were Gulf going quarter. in But awards I the to the start the third helping Gulf, thought

Brady Murphy

I We of couple committed of year the I first a Neptune for Neptune visibility jobs likely don't believe Mexico, of for point, of had but most is the quarter we year. any this at Gulf opportunities. next would say Stephen, projects,

Stephen Gengaro

It's Okay. as not not it job. you help. - just is deepwater awarded Neptune not impact. as project It's But just does that Gulf the eye opening margin about

Brady Murphy

impact big I'm on EBITDA the see, in and QX was about we're Yeah, our QX definitely of Mexico will I the impact which we Neptune clarify. margins the awards Such will our speaking maintain I of results, will type Gulf seeing on specific. numbers. our already mid and sorry. XXs a

Stephen Gengaro

not if and shot just reasonable? net-net, if these just give if kind or But EBITDA stayed Or Okay, as okay. could you on if model, use to this too at that. double a way you million Is more, in a in of and reference low? I based take take And year, point, my this one but or you're match initiatives on that you could sure I'm working on? $XX then you willing based Is not. that still that's everything new EBITDA plus-ish if adjusted i.e., EBITDA we're do else - carbon XXXX same am that off? that, the But

Elijio Serrano

So we've consistently Stephen, can data that generating let margins made you in a that low indicated the we mid type of with calcium I that been me He think are important. reiterate see our can couple and initiatives off EBITDA take points That's double if from that profitability, we've opportunity Brady the into our bit XX% PureFlow Lithium indicated carbon ballpark. sell chloride business opportunity up. storage chloride [ph] Fluids step a the to that value is gain the in that of there. then Standard the to agreement, in significant the calcium past, a To data market quite and business, the CarbonFree

collectively, for you a when So add opportunity I those, think us. there's all there up significant

Brady Murphy

would XXXX. PureFlow by I The will pretty that. projections be agree with material now, right Yeah, itself

I components CarbonFree XXXX. be - royalties XXXX, main by PureFlow will be say contributing we're although pressed hard two any getting think think actually we pretty the will by meaningfully it's it'd lithium be possible. will to that But and be

forecasts. you're yet but those from to what's prepared model, off not too possible. far you a have We lay don't think I know, yet, We're out our all numbers the

Stephen Gengaro

Yeah, no. It does it's one. a I help. understand And long

a color of you've So, given around it. lot good

So that's very helpful.

Brady Murphy

you. Thank Okay.

Stephen Gengaro

All you. right. Thank

Operator

at time. for the concludes our There back closing are [Operator like to conference Mr. This to Instructions] no would I question-and-answer this other over turn remarks. questions Murphy session.

Brady Murphy

Thank Thank everyone's in And you, now, we Kate. you. close call. for interest the and appreciate TETRA. attention will We

Operator

today's has now concluded. Thank conference you presentation. attending The for

You may now disconnect.

TETRA (TTI) 3 Aug 212021 Q2 Earnings call transcript