TTI
#Two data points, <UNK>.
The first one is that the free cash flow was very little from working capital improvement.
However, revenue increased sequentially over $60 million, yet we were able to keep, for example, receivables flat to down slightly.
And therefore had no working capital burn as a result of that.
So it is almost exclusively from cash earnings in the second quarter, and we think that we'll see, in the third quarter, very little from working capital improvement.
Yes.
We are always going to be focused on optimizing the business.
The way you do that is, in the short term, with the financial results and managing the business.
I think our results, compared to last year, on much lower revenue, in a market that is worse from a competitive point of view, clearly shows that we are managing it very tightly and effectively.
As we continue to do that, we need to see, hopefully, some of the deferred spending by our customers will begin to reverse over a period of time.
And we will get a little bit of help on the volume.
But until that happens, it is just focus on the business.
But we always look at the full range of options of all our businesses.
This one clearly, when you look at the capital allocation, we haven't put a lot of capital back into the business, because in the short term there is not a payback for that.
But we look at all the alternatives that go with that.
Thanks, <UNK>.
Thank you.
No, the second half of the year will be slightly below those numbers.
Yes.
We may not have been clear in the way we described it.
That 24% is looking at it versus June 30 of last year.
So it is compared to where we were a year ago.
But the general question, of how we are getting the through-put with the work force reduction ---+ it is several things.
I think the team has done a really good job of not just reducing people and activity, but structurally changing significant parts of the Company, in terms of how we are organized, flattening the organization, consolidating facilities.
At the same time, from an overall back-office point of view, continuing to centralize, and really taking a lot of the support functions out of the divisions, and bringing them into a common centralized corporate pool.
So those are all structural enhancements that will continue whenever the volumes pick up.
I think we also benefited, on those type of metrics, by Gulf of Mexico being a significant portion of the growth.
It doesn't typically have the labor intensity of some of our other businesses.
And I think more importantly, it highlights our ability to really respond to market activity, because we are vertically integrated.
I think it is very important to highlight, on the fluids, that we have been building out this strategy for years and years.
And when we do find a new product opportunity, a new customer opportunity, a new market expansion, our ability to respond to it is immediate.
Yes.
I think we have got around $50 million, in round numbers, left to do as of June 30.
And we will do $4 million or $5 million, the balance of the year.
We are scheduled to do most of the remainder next year.
There's a couple of properties we don't operate that I'm sure ---+ may get kicked out.
And I expect the majority of the work we do will be middle to the second half of the year.
We certainly don't want to be working in the first quarter, with the weather; just like everybody else defers that until they get a better weather environment.
So we will be pragmatic in meeting our obligations, but also being aware of the overall market environment out there, and a continued focus on the balance sheet.
Yes.
I think we are of similar opinion to the masses; that, that is not going to be a major solution for us.
We're going to have to self-help, and do all the things we talked about from a cost and customer expansion, and the guys need to invest wisely into the areas where is there is continued strength.
And that is what they are doing.
I think Tim and his team over at the MLP, are very focused on leveraging our strengths.
You heard <UNK> mention we will have an ERP implementation over the next year, to really get the Compressco and CSI groups fully effective and efficiently on a common system, across all the functions.
It will be the same system as Tetra, and it allows us another incremental piece of efficiency.
Thanks, <UNK>.
Good morning, <UNK>.
Yes, I think if you look at the business in the second quarter, and the progression we see for the balance of the year, overall, I would characterize it as just incredibly low demand.
There is just a deferral of spending by our customers that is ---+ as you recall, it started last summer, and accelerated as the commodity prices came down, and that has continued.
So there is no increase in demand taking place at all, other than the seasonality of where we are at.
We had very good utilization through the second quarter, on our major diving and heavy lift assets.
We expect that the majority of those assets will continue to work through the third quarter, into the fourth quarter.
We have a couple of gaps on our barge schedule that we are working on filling, but that is reflected in the overall guidance that we talked about.
On our P&A business, we have very wisely staffed that, and scaled that, at a much lower level than we had a year ago, because of the unpredictability of the demand.
And I think that is ---+ beyond the obvious help on the cost side, I think that has helped us stabilize the business, from a labor, workforce point of view, predictability.
We feel really good about that.
Our diving business has real low demand.
There aren't a lot of construction projects.
We had a third party that we leased through the end of last year, that we had stated we released.
And we don't anticipate the need for a third-party additional asset in the near term.
Hopefully, next year, we will see a couple of projects come to fruition that would give us the opportunity to match a third-party lease to that particular project.
But overall, other than the typical seasonal progression, where the first quarter is the worst, second quarter is significantly better, third quarter is a little bit better, fourth quarter comes down again.
It is a tough business.
And to get to breakeven or above in that business ---+ and again, realize we have virtually zero internal work for Maritech embedded in that business, so it is all third party, in an incredibly tough market ---+ is a real credit to that leadership team.
It is not an easy job, and the guys have done a phenomenal job managing an incredibly difficult situation.
Thanks.
Thank you for all the questions.
And again, thank you to our entire team at Tetra.
Everybody in the company, around the world, did a phenomenal job in a very tough market.
We are all proud of the group.
And we look forward to meeting our guidance for the third quarter, and talking about it in early November.
So thanks.
