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

May 11, 2009 | About:
10qk

Tetra Technologies Inc. (TTI) filed Quarterly Report for the period ended 2009-03-31.

TETRA Technologies Inc. is an energy services company with an integrated chemicals operation that supplies chemical products to energy markets as well as other markets. TETRA is comprised of three divisions - Fluids Well Abandonment/Decommissioning and Testing & Services. Tetra Technologies Inc. has a market cap of $637.45 million; its shares were traded at around $8.47 with a P/E ratio of 10.08 and P/S ratio of 0.63. Tetra Technologies Inc. had an annual average earning growth of 12% over the past 10 years.

Highlight of Business Operations:

General and Administrative Expenses – General and administrative expenses were $24.6 million during the first quarter of 2009 compared to $25.1 million during the first quarter of 2008, a decrease of $0.5 million or 2.1%. This decrease was primarily due to approximately $0.9 million of decreased salary, benefits, contract labor costs, and other associated employee expenses, and approximately $0.8 million of decreased professional fees, partially offset by approximately $0.3 million of increased bad debt expenses and approximately $0.9 million of increased insurance, taxes, and other general expenses. General and administrative expenses as a percentage of revenue were 12.6% during the first quarter of 2009 compared to 11.1% during the prior year period.

Fluids Division income before taxes during the first quarter of 2009 totaled $12.2 million compared to $6.8 million in the corresponding prior year period, an increase of $5.3 million or 77.6%. This increase was generated by the $3.8 million increase in gross profit discussed above, plus approximately $0.8 million of decreased administrative expenses and approximately $0.7 million of increased other income, primarily from foreign currency gains.

Offshore Division – Revenues from our Offshore Division, which was previously known as the Well Abandonment and Decommissioning (WA&D) Division, decreased from $105.5 million during the first quarter of 2008 to $81.6 million during the first quarter of 2009, a decrease of $23.9 million or 22.7%. Offshore Division gross profit during the first quarter of 2009 totaled $10.2 million compared to $9.3 million during the prior year first quarter, an increase of $1.0 million or 10.4%. Offshore Division income before taxes was $8.2 million during the first quarter of 2009 compared to $3.5 million during the prior year period, an increase of $4.7 million or 134.2%.

Offshore Services segment loss before taxes decreased from $4.1 million during the first quarter of 2008 to $0.6 million during the current year quarter, an increase in earnings of $3.5 million or 84.3%. This increase was due to the $2.9 million increase in gross profit described above, plus approximately $0.3 million of decreased administrative expenses and $0.3 million of decreased other expense.

Production Enhancement Division – Beginning in the fourth quarter of 2008, our Production Enhancement Division consists of two separate reporting segments: the Production Testing segment and the Compressco segment. Production Enhancement Division revenues decreased from $52.6 million during the first quarter of 2008 to $50.0 million during the current year quarter, a decrease of $2.6 million or 4.9%. Production Enhancement Division gross profit decreased from $20.1 million during the first quarter of 2008 to $16.8 million during the current year period, a decrease of 16.5%. Production Enhancement Division gross profit as a percentage of revenue also decreased from 38.3% during the first quarter of 2008 to 33.6% during the first quarter of 2009. Production Enhancement Division income before taxes decreased during the first quarter of 2009 to $12.4 million, compared to $15.4 million during the first quarter of 2008, a decrease of $3.0 million.

Corporate Overhead – Corporate Overhead includes corporate general and administrative expense, interest income and expense, and other income and expense. Such expenses and income are not allocated to our operating divisions, as they relate to our general corporate activities. Corporate overhead increased from $14.4 million during the first quarter of 2008 to $14.6 million during the first quarter of 2009, primarily due to increased administrative and depreciation expense. Corporate administrative costs increased approximately $1.2 million due to approximately $1.3 million of increased salaries and other general employee expenses, primarily due to increased equity compensation expense. Approximately $0.4 million of increased office and other general expenses was largely offset by approximately $0.4 million of decreased professional fee expense. Corporate interest expense decreased by approximately $1.2 million during the first quarter of 2009 due to lower interest rates on the outstanding balance of our bank credit facility, as well as from an increase in the amount of interest capitalized on construction projects during the period.

Read the The complete ReportTTI is in the portfolios of Ron Baron of Baron Funds.

Rating: 4.0/5 (1 vote)

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