Q1 2024 Tetra Technologies Inc Earnings Call Transcript
Key Points
- Tetra Technologies Inc reported a strong year in 2023 with adjusted EBITDA growing by 37% from 2022 and operating income up by 183%.
- The company achieved significant growth in its Completion Fluids & Products segment, with revenue growing by $40 million or 15% and adjusted EBITDA growing by $22 million or 32%.
- Tetra Technologies Inc's Industrial Chemicals business posted its highest revenue and adjusted EBITDA in history, with a revenue growth of over 18% from the previous year.
- The company has secured a second quarter job in the North Sea for Tetra CS Neptune and is in discussions for additional projects in the Gulf of Mexico, indicating potential growth in 2024.
- Tetra Technologies Inc has successfully improved its balance sheet, reducing net debt by 27% and achieving a net leverage ratio of 1.1 times.
- Despite overall growth, the company experienced higher than usual year-end activity slowdowns in some segments.
- The Water & Flowback Services segment saw a decline in rig activity and active frac fleets for most of 2023, although revenue was up due to market share gains.
- The company faces uncertainties with regulatory specifications for using produced water for industrial, farming, and other applications, which could impact project timelines and costs.
- Significant investments are required for the bromine and lithium projects in Arkansas, with capital expenditures expected to continue into the next year.
- While the company is focusing on high-return projects, this strategic decision may limit the potential for higher growth in other segments like Water & Flowback Services.
Good morning and welcome to Tetra Technologies first fourth quarter 2023 Results Conference Call. (Operator Instructions)
Please note this event is being recorded. I will now turn the conference over to Regan Salus.
So I had thank you Joe. Good morning, and thank you for joining Tetra as Fourth Quarter 2023 Results Call. The speakers for today's call are Brady Murphy, Chief Executive Officer, and Elijio Serrano, Chief Financial Officer. I would like to remind you that this conference call may contain statements that are or may be deemed to be forward looking including projections, financial guidance, profitability and estimated earnings These statements are based on certain assumptions and analysis made by Tetra and are based on several factors. These statements are subject to several risks and uncertainties, many of which are beyond the control of the Company. You're cautioned that such statements are not guarantees of future performance and that actual results may differ materially from those
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