TETRA Technologies, Inc. (NYSE:TTI) Q4 2022 Earnings Conference Call February 28, 2023 10:30 AM ET

Company Participants

Brady Murphy - CEO

Elijio Serrano - CFO

Conference Call Participants

Stephen Gengaro - Stifel

Tim Moore - EF Hutton

Martin Malloy - Johnson Rice

Samantha Hoh - Evercore ISI

Operator

Good morning, and welcome to TETRA Technologies Fourth Quarter 2022 Results Conference Call. The speakers for today's call are Brady Murphy, Chief Executive Officer; and Elijio Serrano, Chief Financial Officer. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to Mr. Serrano. Please go ahead sir.

Elijio Serrano

Thank you, [indiscernible].Good morning, and thank you for joining TETRA's Fourth Quarter 2022 Results Call.

I would like to remind you that this conference call may contain statements that are or may be deemed to be forward-looking. 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 are cautioned that such statements are not guarantees of future performance and that actual results may differ materially from those projected in the forward-looking statements.

In addition, in the course of the call, we may refer to EBITDA, adjusted EBITDA, adjusted EBITDA gross margins, free cash flow, net debt, net leverage ratio, liquidity or other non-GAAP financial measures. Please refer to yesterday's press release or to our public website for reconciliations of non-GAAP financial measures to the nearest GAAP measures.

These reconciliations are not a substitute for financial information prepared in accordance with GAAP and as should be considered within the context of our complete financial results for the period. In addition to our press release announcement that went out yesterday, we encourage you to refer to our 10-K that will be filed yesterday.

Brady I will turn it over to you.

Brady Murphy

Thanks, Elijio, and good morning, everyone. Welcome to TETRA's fourth quarter 2022 earnings call. I'll summarize some highlights for the fourth quarter, comment on the current outlook as well as provided an update on our strategic initiatives before turning it back to Elijio to discuss cash flow, working capital and the balance sheet, liquidity and add some color to the SK 1300 section 19 economic analysis that we issued last night.

We closed out a strong year in 2022 with a strong fourth quarter growing revenue sequentially 9% over the third quarter and 42% for the full year over 2021. Adjusted EBITDA of $20.3 million increased from $18.6 million in the third quarter and for the full year excluding market-to-market gains in 2021. Our adjusted EBITDA for 2022 more than doubled, increasing by 112% over 2021 with almost a 30% follow through on incremental EBITDA to incremental revenue.