Tetra Technologies, Inc. · NYSE:TTI
Tetra Technologies — 21st Annual Energy Conference – Piper Sandler (virtual) (March 2021)
28 slides from Tetra Technologies's conference presentation, Mar 22, 2021
Slide 1: Company Overview
Company Overview March 2021 ©2021 TETRA Technologies, Inc. 1
Slide 2: Disclaimer
Disclaimer Forward-Looking Statements The information in this presentation includes “forward-looking statements.” All statements, other than statements of historical fact included in this presentation, regarding our management, strategy, future operations, financial position, estimated revenues and
Slide 3: Investment Highlights
Investment Highlights Geographically diverse global leader in onshore water management, high- value completion fluids and related industrial chemicals • Diverse revenue stream from O&G, industrial, US & international, onshore & offshore • Business model that generates EBITDA and free cash flow in do
Slide 4: Recent Highlights
Recent Highlights Generating Cash and Reducing Net Debt • Divested CCLP and deconsolidated $639M of reported $189 debt; generated $30.7M of cash while maintaining 11% 2019 2020 $133 equity position Free Cash Flow $59 • Seven consecutive quarters of positive adj. free cash flow Net Debt • Q4 Adj. EBI
Slide 5: Environmental, Social and Governance (ESG)
Environmental, Social and Governance (ESG) Operations Low Carbon Energy Governance Health & Safety • Innovative • Strong culture of QHS&E environmentally-friendly • Significant bromine • Separate chair and CEO drives product & service (non-zinc) CS Neptune® reserves with high delivery fluids technol
Slide 6: Business Segments
Business Segments 2020 Completion Fluids & Products Revenue • Over 30% market share* for high value completion fluids Deepwater • Innovation leader with TETRA CS Neptune® Onshore & 23% Shallow Water • Global infrastructure with 20-year bromine 37% supply agreement Industrial 40% • Diverse and stable
Slide 7: Focused on the Environment & Low Carbon Energy
Focused on the Environment & Low Carbon Energy Existing Value Add Solutions Low Carbon Energy Growth Opportunities Zinc-Free Fluid Water Treatment Lithium Energy Storage Carbon Capture Over 50 patents issued Leading service provider Global lithium-ion Potential market of $60 Investments projected to
Slide 8: Completion Fluids & Products
Completion Fluids & Products ©2021 TETRA Technologies, Inc. 8
Slide 9: Diverse Fluids Revenue Stream
Diverse Fluids Revenue Stream • Only vertically integrated completion fluids Stable Non-Oil and Gas Revenue service provider $110 M $106 M $97 M » Long-term bromine and acid supply agreements » Plants and facilities fully built, require minimal capital » Broad global logistics and distribution netwo
Slide 10: TETRA's Global Fluids Network Serving Key Deepwater Markets
TETRA’s Global Fluids Network Serving Key Deepwater Markets Top Four Countries for Projected Number of Deepwater Wells Between 2021-2025 * 403 North Sea & Europe 229 157 136 All North America Middle East Shale Basins Norway Brazil U.S. UK Corporate Headquarters & Technology Center • Approximately 29
Slide 11: CS Neptune Fluids Technology
CS Neptune® Fluids Technology • Prestigious E&P Special Meritorious Engineering Award winner for Innovation in Drilling Fluids and Stimulation category • Co-authored SPE technical paper with major operator for successful multiple Gulf of Mexico projects • Zinc-free & priority pollutants-free, does n
Slide 12: Resilient High Value Fluids Business Model
Resilient High Value Fluids Business Model Revenue , Adjusted EBITDA and Adjusted EBITDA Margins Vertically integrated with technology, cost and logistics advantages $300 $279 30% $257 28% $243 $250 25% 25% $ millions $200 20% 18% $150 15% • Third party report on GOM Completions Fluids recognizes $1
Slide 13: Low Carbon Energy Opportunities
Low Carbon Energy Opportunities Lithium • 27,000 acres of brine leases in Arkansas with inferred lithium carbonate equivalent resources of 890,000 tons and an estimated 3.9 million tons of bromine resources • $3.1M of earnings in 2020 from Standard Lithium agreement (TSX:SLL) • SLL agreement for roy
Slide 14: Water & Flowback Services
Water & Flowback Services ©2021 TETRA Technologies, Inc. 14
Slide 15: Water Management
Water Management Water Services Market (2021) Capital Intensity Service Segment Market 2021 – 2025 • Market estimated to be over $20B Size % CAGR • Focused on value-added, differentiated, Disposal 32% 3% environmentally-friendly offerings in the Acquisition 8% 5% highest return on investment water m
Slide 16: Digital & Integrated Water Management Solution
Digital & Integrated Water Management Solution Oil Recovery Recycling Sourcing Temporary Transfer Storage Pit Lining Poly Pipe & Pipeline Treatment Flowback Blending Distribution Automation (Real-Time Monitoring & Control) ©2021 TETRA Technologies, Inc. 16
Slide 17: Differentiating through Technology and Digitization
Differentiating through Technology and Digitization TETRA SteelTM 1200 BlueLinxTM Automated Lay Flat Hose Control System • Leader in produced water market • Safer and improved service quality • Transferred ~ 100M bbls of • Entire system digitization and produced water in Permian basin in automation
Slide 18: Water & Flowback Services
Water & Flowback Services Revenue , Adjusted EBITDA and Adjusted EBITDA Margins Market share gains from technologies, digitizing $350 $303 $282 25% operations and integrated solutions $300 21% 20% $250 $ millions $200 15% 13% $150 $135 10% • Q4 sequential revenue growth of 46% vs 7% frac 8% $100 $50
Slide 19: Financial Overview and Summary
Financial Overview and Summary ©2021 TETRA Technologies, Inc. 19
Slide 20: Financial Trends
Financial Trends $ millions Revenue Adjusted EBITDA $600 $560 $561 1200 13.0% $80 11.8% 15% 11.5% $500 1000 $378 $60 $400 800 10% $300 600 $40 $200 400 5% $20 $100 200 $66 $65 $49 $- 0 $- 0% 2018 2019 2020 2018 2019 2020 (1) Adjusted EBITDA Adjusted EBITDA Margins Rev Total US Rigcount 2020 Revenue
Slide 21: Enhanced Capital Structure
Enhanced Capital Structure Balance Sheet and Liquidity(1) • Deconsolidation of CSI Compressco allows TETRA to “screen” better $ millions • Potential to be included in the Russell 2000 Cash $ 67 Debt • Net debt has been reduced to $120M as of ABL ( Aug, 2023 maturity) $ - 3/1/2021 Term Loan $ 200 Net
Slide 22: Market Performance & Capital Allocation
Market Performance & Capital Allocation 2021 Share Performance vs OSX As of 3/19/2021 344% Capital Allocation Priorities • Focused on two core segments targeting TTI organic investments with cash paybacks less than 18 months 127% • Reduce outstanding debt, targeting OSX 100% leverage ratio below 2.0
Slide 23: Investment Highlights
Investment Highlights • Build on core competencies of fluids and aqueous chemistry » Industry leading position on high value completion fluids » Vertically Integrated chemicals business participating in multiple industry segments » Market leading position for treating and recycling produced water »
Slide 24: Appendix
Appendix ©2021 TETRA Technologies, Inc. 24
Slide 25: Market Capitalization and Enterprise value
Market Capitalization and Enterprise value (thousands, except per share amounts) Market Capitalization: TTI Market price per share on 03/19/2021 $ 2.95 Shares outstanding as of 03/03/2021 126,636 Market Capitalization $ 373,576 Enterprise Value: TTI Market capitalization based on 03/19/2021 Stock Pr
Slide 26: Non-GAAP Reconciliation
Non-GAAP Reconciliation Completion Fluids & Products - Adj. EBITDA and Adj. EBITDA Margin Reconciliation '($ in Mil) 2018 2019 2020 Income (Loss) Before Taxes $30.6 ($34.0) $55.3 Interest Income/Expense ($0.6) ($0.7) ($0.9) DD&A $15.3 $13.5 $7.4 Stock Option expense - - - Special Items $0.1 $91.1 $6
Slide 27: Non-GAAP Reconciliation
Non-GAAP Reconciliation TTI excl. Disc. Operations - Adj. EBITDA and Ad. EBITDA Margin Reconciliation '($ in Mil) 2016 2017 2018 2019 2020 Income (Loss) Before Taxes ($88.0) ($6.8) ($2.9) ($128.1) ($25.1) Interest Income/Expense $21.0 $15.2 $19.6 $20.8 $18.3 DD&A $45.0 $34.9 $44.4 $47.6 $38.5 Stock
Slide 28: Non-GAAP Reconciliation
Non-GAAP Reconciliation TETRA Adjusted Free Cash Flow Reconciliation From Continuing Operations (in $ Millions) 2018 2019 2020 TTI incl. Discontinued Operations Cash from operations $ 46.6 $ 90.2 $ 76.9 Capital Expenditures, net of sales proceeds (140.8) (95.4) 6.8 Free Cash Flow (94.2) (5.2) 83.7 A
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