The following is a summary of the TETRA Technologies, Inc. (TTI) Q3 2024 Earnings Call Transcript:

Financial Performance:

• Despite disruptions caused by hurricanes and lower customer activity, TETRA Technologies reported Q3 adjusted EBITDA of $23.5 million, in line with expectations. Revenue for the quarter was $142 million, down 6% year-on-year and from the first quarter. Adjusted EBITDA was down $2.5 million year-on-year but up $700,000 from Q1 2024.

• Completion Fluids & Products segment achieved a 31.7% adjusted EBITDA margin, with high-value completion fluids sales significantly contributing.

• The company generated over $7 million of trailing 12 months total adjusted free cash flow after a $23 million investment in Arkansas, showcasing strong financial management amid investments.

Business Progress:

• TETRA secured significant new contracts including a major deepwater completion fluid award in Brazil, setting a foundation for substantial 2025 prospects.

• Notable advancements in automated technologies for Water & Flowback Services and produced water recycling, enhancing operational efficiencies and customer engagements.

• Expanded manufacturing and blending capacity to meet anticipated demand for TETRA X, a new corrosion inhibitor, and Eos Energy's battery requirements.

• Progress on the Arkansas bromine project continues, with an emphasis on staged capital deployment to ensure financial stability while expanding production capabilities.

Opportunities:

• The introduction of TETRA X and the expansion into broader markets for high-temperature corrosion control presents new revenue streams beyond oil and gas sectors.

• Strategic positioning in deepwater markets like Brazil, combined with ongoing leadership in heavy fluid solutions sets the stage for market dominance and expansion.

• Advancements in water treatment technologies and recycling projects, particularly in response to regulatory environment favoring sustainable practices, open new business fronts in agricultural and industrial applications.

Risks:

• Seasonal fluctuations and macro uncertainties, like the impacts of hurricanes, continue to present challenges to stable revenue streams, particularly affecting the Water & Flowback Services segment in the U.S.

• The high cost of new technology deployments and expansion initiatives like the Arkansas bromine project may strain cash flows if not managed with strategic phased investments.

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