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Tetra Technologies Inc. Reports Operating Results (10-Q)

May 10, 2012 | About:
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10qk

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Tetra Technologies Inc. (TTI) filed Quarterly Report for the period ended 2012-03-31.

Tetra Tech Del has a market cap of $680.6 million; its shares were traded at around $7.37 with a P/E ratio of 11 and P/S ratio of 0.8. Tetra Tech Del had an annual average earning growth of 6% over the past 10 years.

Highlight of Business Operations:

Consolidated other income increased during the first quarter of 2012 compared to the prior year period, primarily due to approximately $3.2 million of increased gains on sales of assets and $0.5 million of increased earnings from unconsolidated joint ventures. These increases were partially offset by approximately $0.6 million of decreased minority interest income, and approximately $0.3 million of decreased other income.

The increase in Fluids Division revenues during the first quarter of 2012 compared to the prior year period was primarily due to a $2.0 million net increase in product sales revenues. This increase was due to $5.9 million of increased clear brine fluids (CBFs) product sales revenues, particularly domestically. Partially offsetting this increase in CBF sales was approximately $3.9 million of decreased revenue from manufactured products, primarily from decreased industrial demand due to weather, particularly in Europe. Manufactured product sales revenues also decreased due to the reduced sales of dry calcium chloride following the shutdown of our Lake Charles pellet plant during mid-2011. Onshore domestic industry activity levels were increased as compared to the prior year period, primarily in unconventional shale reservoir markets.

The increase in Compressco revenues compared to the prior year period was due to an increase of approximately $2.1 million of service revenues resulting from increased demand, particularly in Latin America. Partially offsetting this increase was a $1.3 million decrease from sales of compressor units and parts during the first quarter. Compressco has reduced the rate at which it fabricates new compressor units for its domestic operations until demand increases and inventories of available units are reduced.

Revenues from our Offshore Services segment decreased during the first quarter of 2012 compared to the prior year quarter. Increased decommissioning and abandonment services revenues, including those from the heavy lift barge purchased during 2011, were partially offset by decreased diving and cutting services activity during the current year period. Diving services revenues were negatively affected by certain vessel repairs scheduled during the current year period. The most significant decrease, however, was due to the 2011 sale of the segment s onshore abandonment operations, which generated approximately $3.3 million in revenues during the prior year period. Approximately $7.3 million of Offshore Services revenues were from work performed for Maritech during the first quarter of 2012, compared to $5.6 million of such work in the prior year period, reflecting Maritech s plans to aggressively decommission and abandon its remaining oil and gas platform structures. These intercompany revenues are eliminated in consolidation.

Under the Credit Agreement, which matures on October 29, 2015, the revolving credit facility is unsecured and guaranteed by certain of our material U.S. subsidiaries (excluding Compressco). Borrowings generally bear interest at the British Bankers Association LIBOR rate plus 1.5% to 2.5%, depending on one of our financial ratios. We pay a commitment fee ranging from 0.225% to 0.500% on unused portions of the facility. The Credit Agreement contains customary covenants and other restrictions, including certain financial ratio covenants involving our levels of debt and interest cost compared to a defined measure of our operating cash flows over a twelve month period. In addition, the Credit Agreement includes limitations on aggregate asset sales, individual acquisitions, and aggregate annual acquisitions and capital expenditures. Access to our revolving credit line is dependent upon our compliance with the financial ratio covenants set forth in the Credit Agreement. Significant deterioration of the financial ratios could result in a default by us under the Credit Agreement and, if not remedied, could result in termination of the agreement and acceleration of any outstanding balances. Compressco is an unrestricted subsidiary and is not a borrower or a guarantor under our bank credit facility.

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