UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2023
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ____ TO ____
Commission File No. 1-13455
A. Full title of the plan and address of the plan, if different from that of the issuer named below:
TETRA Technologies, Inc. 401(k) Retirement Plan
B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office:
TETRA Technologies, Inc.
24955 Interstate 45 North
The Woodlands, Texas 77380
TABLE OF CONTENTS
| Report of Independent Registered Public Accounting Firm | |||||
| Audited Financial Statements | |||||
Statements of Net Assets Available for Benefits at December 31, 2023 and 2022 | ||||||||
Statement of Changes in Net Assets Available for Benefits for the Year Ended December 31, 2023 | ||||||||
| Notes to Financial Statements | ||||||||
| Supplemental Schedule* | |||||
| Schedule H, Line 4(i) – Schedule of Assets (Held at End of Year) | ||||||||
| *Note | Other schedules required by 29 CFR 2520.103-10 of the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974, as amended, have been omitted because they are not applicable. | |||||||
Report of Independent Registered Public Accounting Firm
To the Plan Participants and the Plan Administrator of the
TETRA Technologies, Inc. 401(k) Retirement Plan
The Woodlands, Texas
Opinion on the Financial Statements
We have audited the accompanying statements of net assets available for benefits of the TETRA Technologies, Inc. 401(k) Retirement Plan (the “Plan”) as of December 31, 2023 and 2022, and the related statement of changes in net assets available for benefits for the year ended December 31, 2023, and the related notes and schedule (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2023 and 2022, and the changes in net assets available for benefits for the year ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on the Plan’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Plan in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Plan is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As a part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for purposes of expressing an opinion on the effectiveness of the Plan’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Supplemental Information
The accompanying supplemental schedule of assets (held at end of year) as of December 31, 2023 has been subjected to audit procedures performed in conjunction with the audit of the Plan’s financial statements. The supplemental information is the responsibility of the Plan’s management. Our audit procedures included determining whether the supplemental information reconciles to the financial statements or the underlying accounting and other records, as applicable and performing procedures to test the completeness and accuracy of the information presented in the supplemental information. In forming our opinion on the supplemental information, we evaluated whether the supplemental information, including its form and content, is presented in conformity with the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. In our opinion, the supplemental information is fairly stated, in all material respects, in relation to the financial statements as a whole.
/s/Calvetti Ferguson
We have served as the Plan’s auditor since 2020.
Houston, Texas
June 27, 2024
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TETRA Technologies, Inc. 401(k) Retirement Plan
Statements of Net Assets Available for Benefits
| December 31, | ||||||||||||||
| 2023 | 2022 | |||||||||||||
| ASSETS | ||||||||||||||
| Investments at fair value | $ | 90,360,319 | $ | 76,948,519 | ||||||||||
| Notes receivable from participants | 1,653,331 | 1,420,718 | ||||||||||||
| Uninvested cash | 37 | 6 | ||||||||||||
| Net assets available for benefits | $ | 92,013,687 | $ | 78,369,243 | ||||||||||
See accompanying Notes to Financial Statements.
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TETRA Technologies, Inc. 401(k) Retirement Plan
Statement of Changes in Net Assets Available for Benefits
Year Ended December 31, 2023
| Additions: | |||||
| Participant contributions | $ | 6,261,423 | |||
| Rollover contributions | 351,425 | ||||
| Employer contributions | 2,538,736 | ||||
| Interest and dividends | 3,987,686 | ||||
| Interest income on notes receivable from participants | 88,020 | ||||
| Total additions | 13,227,290 | ||||
| Deductions: | |||||
| Benefits paid to participants | 9,700,301 | ||||
| Administrative expenses | 55,848 | ||||
| Total deductions | 9,756,149 | ||||
| Net gain in fair value of investments | 10,173,303 | ||||
| Net increase | 13,644,444 | ||||
| Net assets available for benefits: | |||||
| Beginning of year | 78,369,243 | ||||
| End of year | $ | 92,013,687 | |||
See accompanying Notes to Financial Statements.
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TETRA Technologies, Inc. 401(k) Retirement Plan
Notes to Financial Statements
December 31, 2023
1. Description of Plan
The following description of the TETRA Technologies, Inc. 401(k) Retirement Plan, as amended and restated (the Plan) is provided for general information only. Participants should refer to the Plan Document and Summary Plan Description for a more complete description of the Plan’s provisions, a copy of which is available from TETRA Technologies, Inc. (the Company or Plan Administrator).
General
The Plan, which initially became effective January 1, 1990, is a profit sharing plan as defined by Section 401(a) of the Internal Revenue Code of 1986, as amended (the IRC) and contains a provision for salary reduction contributions under Section 401(k) of the IRC. Effective January 1, 2021, the Plan and related Trust Agreement were amended and restated by adopting a pre-approved defined contribution plan. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended (ERISA). The Company is the designated administrator of the Plan and the Plan is advised by the 401(k) Committee, which currently consists of certain employees of the Company. T. Rowe Price Trust Company (TRP or Trustee) is the trustee of the Plan.
Eligibility
Employees who have attained age 18 are eligible to participate in the Plan beginning on the first day of any calendar month coincident with or following completion of thirty days of service. However, the following employees or classes of employees are not eligible to participate: (i) employees who are non-resident aliens and who receive no earned income from the Company which constitutes income from sources within the United States; (ii) leased employees; and (iii) employees who are residents of Puerto Rico.
Contributions
The Company may contribute an amount equal to a specified matching percentage of the participant’s elective contribution other than “catch-up” contributions. The Company matches contributions of 50% of the first 8% of the participant's elective contributions per pay period. The maximum elective contribution limit is 70% of the employee's eligible compensation as defined by the Plan. Contributions for each participant are limited in any calendar year to annual regular pre-tax contributions and contributions on an after-tax Roth 401(k) basis up to the applicable combined contribution limits as determined pursuant to the IRC. In addition, employees who are, or will be, age 50 or older by the end of the year may make catch-up contributions up to the applicable contribution limits as determined pursuant to the IRC. Unless the employee elects otherwise, 4% of each eligible employee’s compensation is automatically contributed to the Plan on a pre-tax basis. The Plan provides an automated service which increases the employee’s elective contribution rate by 2% at the same time each year until a 6% elective contribution rate has been reached. The employee is reminded annually before any such increase takes place and can elect to change the elective contribution rate at any time by contacting TRP. Employees have the option to elect a 0% elective contribution rate or to change their elective contribution rate in accordance with the Plan. The 8% elective contribution rate is the amount needed to take advantage of the full Company match, during periods of time when the Company match is paid.
The Company may also, at the discretion of the Board of Directors, make a profit sharing contribution to the Plan at the end of each fiscal year. Such Company contribution would be allocated to Plan participants, who are employed on December 31 of such year, in the same ratio that each participant’s eligible Plan compensation bears to the total eligible Plan compensation of all participants. No profit sharing contribution was made for the 2023 or 2022 Plan years.
Participants have the right to direct the investment of their contributions, including the Company’s matching contributions and profit sharing, if any, into any of the investment options offered by the Plan. Participant contributions and Company contributions for which no participant investment direction is given are automatically allocated to age-appropriate target-date mutual funds. These target-date mutual funds provide an asset allocation and investment strategy based on a future retirement date. If the contributions of a participant are automatically
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allocated to a target-date mutual fund, the participant may elect to change such investments in accordance with the Plan.
Company Stock Fund
The Plan permits participants to invest in common stock of the Company through the Plan’s Company Stock Fund. The Company Stock Fund may also hold cash or other short-term securities. The Plan limits the amount a participant can invest in the Company Stock Fund, to encourage diversification of participants’ accounts. Each participant may direct up to a maximum of 25% of their contributions to the Company Stock Fund. In addition, a participant may transfer amounts from other investment funds into the Company Stock Fund to the extent the transfer would result in no more than 25% of the participant’s total account balance being invested in the Company Stock Fund.
Vesting
Participants are immediately vested in their elective contributions, as adjusted for earnings and losses thereon. Vesting in the matching contribution and profit sharing contribution portions of their accounts, if any, as adjusted for earnings and losses thereon, is based on years of service. Participants become 50% vested in matching contributions and profit sharing contributions after two years of service, and 100% vested after three years of service. Upon a participant’s death, disability or normal retirement, the participant becomes 100% vested in his or her entire account. Except as otherwise described herein, participants forfeit any non-vested matching contribution and profit sharing contribution portions of their accounts in the Plan upon termination of employment with the Company.
Benefit Payments and Forfeitures
Upon termination of employment for any reason, a participant’s vested balance is payable in a lump sum or installments. Amounts which are forfeited by participants due to termination of employment may be used as a credit against the Company’s matching and profit sharing contributions, if any. During 2023, $209,156 of employer contributions were funded by using forfeited non-vested accounts. Cumulative forfeitures relating to prior-period activity and available to be applied against any future Company-paid matching contributions or profit sharing were approximately $13,224 and $19,724 as of December 31, 2023 and 2022, respectively.
Plan Amendment and Termination
The Company has the right under the Plan to amend or terminate the Plan, subject to applicable law. In the event of Plan termination, participants would become 100% vested in their accounts, and would receive, within a reasonable time, any funds in their accounts as of the date of the termination.
Participant Loans
Participants, during their time of employment, may borrow from their fund accounts a minimum of $1,000, up to a maximum equal to the lesser of $50,000 or 50% of their vested account balances. Loan terms range from 1 to 5 years, or up to 15 years for the purchase of the participant’s primary residence. The loans are secured by the balances in the participants’ accounts and bear interest at rates established at the inception of the loan, set at one percentage point higher than the prime lending rate as posted in the Wall Street Journal (or similar financial publication). Principal and interest are paid ratably, generally through payroll deductions.
Administrative Expenses
Certain administrative expenses are paid by the Company.
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2. Summary of Accounting Policies
Basis of Accounting
The accompanying financial statements of the Plan have been prepared using the accrual basis of accounting in accordance with U.S. generally accepted accounting principles (U.S. GAAP). Benefit payments to participants are recorded upon distribution.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates that affect the amounts reported in the financial statements and accompanying notes and schedule. Actual results could differ from those estimates.
Notes Receivable from Participants
Notes receivable from participants represent participant loans that are recorded at their unpaid principal balance plus any accrued but unpaid interest. Interest income on notes receivable from participants is recorded when it is earned. Related fees are recorded as administrative expenses and are recorded when they are incurred. No allowance for credit losses has been recorded as of December 31, 2023 or 2022. If a participant ceases to make loan repayments and the plan administrator deems the participant loan to be a distribution, the participant loan balance is reduced and a benefit payment is recorded.
Investment Valuation and Income Recognition
The Plan’s investments are stated at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). Refer to Note 3 for further discussion and disclosure related to fair value.
Short-term investments are valued at cost, which approximates fair value. Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis and dividends are recorded on the ex-dividend date. Net appreciation includes the Plan's gains and losses on investments purchased and sold as well as held during the year.
Accounting Pronouncements
New pronouncements issued but not effective until after December 31, 2023, are not expected to have a material impact on the Plan's financial statements or disclosures.
3. Fair Value Measurements
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (i.e., an exit price). The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets and liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The level in the fair value hierarchy within which the fair value measurement is classified is determined based on the lowest priority input that is significant to the fair value measure in its entirety. The three levels of the fair value hierarchy are described below:
Level 1 – Unadjusted quoted prices in active markets that are accessible to the reporting entity at the measurement date for identical assets and liabilities.
Level 2 – Inputs other than quoted prices in active markets for identical assets and liabilities that are observable either directly or indirectly for substantially the full term of the asset or liability.
Level 3 – Unobservable inputs for the asset or liability (i.e., supported by little or no market activity). Level 3 inputs include management’s own assumption about the assumptions that market participants would use in pricing the asset or liability (including assumptions about risk).
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The following tables set forth by level within the fair value hierarchy, the Plan’s assets carried at fair value:
| Assets at Fair Value as of December 31, 2023 | ||||||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||
| TETRA Technologies, Inc. common stock | $ | 2,513,665 | $ | — | $ | — | $ | 2,513,665 | ||||||||||||||||||
| Mutual funds | 83,987,543 | — | — | 83,987,543 | ||||||||||||||||||||||
| $ | 86,501,208 | $ | — | $ | — | $ | 86,501,208 | |||||||||||||||||||
| Investments measured at net asset value: | ||||||||||||||||||||||||||
Stable Value Fund (a) | 3,859,111 | |||||||||||||||||||||||||
| Total assets at fair value | $ | 90,360,319 | ||||||||||||||||||||||||
| Assets at Fair Value as of December 31, 2022 | ||||||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||
| TETRA Technologies, Inc. common stock | $ | 2,131,385 | $ | — | $ | — | $ | 2,131,385 | ||||||||||||||||||
| Mutual funds | 69,524,626 | — | — | 69,524,626 | ||||||||||||||||||||||
| $ | 71,656,011 | $ | — | $ | — | $ | 71,656,011 | |||||||||||||||||||
| Investments measured at net asset value: | ||||||||||||||||||||||||||
Stable Value Fund (a) | 5,292,508 | |||||||||||||||||||||||||
| Total assets at fair value | $ | 76,948,519 | ||||||||||||||||||||||||
(a) This category includes a common/collective trust fund that is designed to deliver safety and stability by preserving principal and accumulating earnings. This fund is primarily invested in guaranteed investment contracts and synthetic investment contracts. Participant-directed redemptions have no restrictions, no unfunded commitments, and the redemption period is daily; however, the Plan is required to provide a one-year redemption notice to liquidate its entire share in the fund. The estimated fair value of this fund is based on the net asset value as reported by the issuer of the fund, which is determined based on the fair value of the underlying investment contracts in the fund.
The Plan’s valuation methodology used to measure the fair values of Company stock and mutual funds were derived from quoted market prices, as these instruments have active markets. Common collective trust funds are measured at net asset value as determined by the issuer. The net asset value is used as a practical expedient to estimate fair value.
4. Income Tax Status
The underlying non-standardized pre-approved profit sharing plan has received an advisory letter from the Internal Revenue Service (IRS) dated August 19, 2020, stating that the form of the Plan is qualified under Section 401 of the IRC, and therefore, the related trust is tax exempt. The Plan Administrator has determined that it is eligible to, and has chosen to, rely on the current IRS advisory letter. Once qualified, the Plan is required to operate in conformity with the IRC to maintain its qualification. The Plan Administrator believes the Plan is being operated in compliance with the applicable requirements of the IRC and, therefore, believes the Plan is qualified and the related trust is tax-exempt.
U.S. GAAP requires plan management to evaluate uncertain tax positions taken by the Plan. The financial statement effects of a tax position are recognized when the position is more likely than not, based on the technical merits, to be sustained upon examination by the IRS. The Plan Administrator has analyzed the tax positions taken by the Plan, and has concluded that as of December 31, 2023, there are no uncertain positions taken or expected to be taken. The Plan has recognized no interest or penalties related to uncertain tax positions. The Plan is subject to routine audits by taxing jurisdictions; however, there are currently no audits in progress for any tax periods.
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5. Risks and Uncertainties
The Plan provides for investments in various investment securities, that in general, are exposed to various risks, such as interest rate, credit, and overall market volatility risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect the amounts reported in the statements of net assets available for benefits and participant account balances.
6. Related Party Transactions
Certain investments of the Plan are managed by T. Rowe Price Trust Company, the Trustee of the Plan, and therefore, these transactions qualify as party-in-interest transactions. The Plan also invests in shares of the Company's common stock and these transactions also qualify as party-in-interest transactions. All of these transactions are exempt from the prohibited transactions rules under ERISA.
T. Rowe Price Retirement Plan Services, Inc. provides certain administrative services to the Plan pursuant to a Plan Recordkeeping Agreement (the “Agreement”) between the Company and T. Rowe Price Retirement Plan Services, Inc. T. Rowe Price Retirement Plan Services, Inc. receives fees and/or credits from non-proprietary investments for the provision of recordkeeping, administrative, and shareholder services T. Rowe Price Retirement Plan Services, Inc. provides to the investments. This revenue is used to offset certain amounts owed to T. Rowe Price Retirement Plan Services, Inc. for its administrative services provided to the Plan.
If the revenue received by T. Rowe Price Retirement Plan Services, Inc. from such investments does not exceed the amount owed under the Agreement, T. Rowe Price Retirement Plan Services, Inc. will bill the Company on a quarterly basis. The Plan or the Company may make a payment to T. Rowe Price Retirement Plan Services, Inc. for administrative expenses not covered by the sharing of the excess revenue.
7. Subsequent Events
The Company has evaluated subsequent events through June 27, 2024, the date these financial statements were issued. No events have occurred that required either adjustment to, or disclosure in, these financial statements.
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Supplemental Schedule
10
TETRA Technologies, Inc. 401(k) Retirement Plan
Schedule H, Line 4(i) – Schedule of Assets (Held at End of Year)
EIN: 74-2148293 PN: 001
December 31, 2023
| Identity of Issue, Borrower, | Current | ||||||||||||||||
| Lessor, or Similar Party | Description of Investment | Value | |||||||||||||||
| * | T. Rowe Price | Retirement 2025 Fund | $ | 8,943,554 | |||||||||||||
| * | T. Rowe Price | Retirement 2040 Fund | 8,808,978 | ||||||||||||||
| * | T. Rowe Price | Retirement 2030 Fund | 7,656,818 | ||||||||||||||
| * | T. Rowe Price | Retirement 2045 Fund | 7,028,208 | ||||||||||||||
| * | T. Rowe Price | Retirement 2035 Fund | 6,907,762 | ||||||||||||||
| * | T. Rowe Price | Retirement 2050 Fund | 6,210,547 | ||||||||||||||
| * | T. Rowe Price | Retirement 2055 Fund | 4,846,752 | ||||||||||||||
| Vanguard | Growth Index Admiral | 4,600,546 | |||||||||||||||
| * | T. Rowe Price | Growth Stock Fund | 4,509,332 | ||||||||||||||
| American Funds | Washington Mutual Investors Fund R6 | 4,032,022 | |||||||||||||||
| * | T. Rowe Price | Retirement 2020 Fund | 2,917,733 | ||||||||||||||
| Vanguard | Interm Term Bond Ind | 2,358,936 | |||||||||||||||
| Carillon | Eagle Mid Cap Growth | 2,214,426 | |||||||||||||||
| Vanguard | Mid-Cap Index Admiral | 2,037,176 | |||||||||||||||
| * | T. Rowe Price | Retirement 2060 Fund | 1,979,730 | ||||||||||||||
| Victory Sycamore | Established Value Fund | 1,225,459 | |||||||||||||||
| * | T. Rowe Price | Retirement 2010 Fund | 1,064,560 | ||||||||||||||
| American Funds | EuroPacific Growth R5 | 959,955 | |||||||||||||||
| Vanguard | Value Index Admiral | 876,251 | |||||||||||||||
| Vanguard | Small Cap Index Admiral | 651,229 | |||||||||||||||
| * | T. Rowe Price | Integrated U.S. Small-Cap Growth Equity Fund | 639,167 | ||||||||||||||
| * | T. Rowe Price | Retirement 2065 Fund | 636,620 | ||||||||||||||
| * | T. Rowe Price | Retirement 2015 Fund | 585,609 | ||||||||||||||
| UBVLX | Undiscovered Managers Behavioral Value L | 574,621 | |||||||||||||||
| PIMCO | Income Inst | 431,534 | |||||||||||||||
| MFS | International Intrinsic Value R4 | 320,985 | |||||||||||||||
| * | T. Rowe Price | Retirement 2005 Fund | 272,076 | ||||||||||||||
| Vanguard | Treasury Money Market | 261,066 | |||||||||||||||
| American | New World R6 | 180,771 | |||||||||||||||
| Vanguard | Developed Markets Index Admiral | 64,955 | |||||||||||||||
| MFS | Aggressive Growth Alloc R4 | 59,065 | |||||||||||||||
| MFS | Growth Allocation R4 | 47,554 | |||||||||||||||
| Vanguard | Short Term Inv Gr | 29,776 | |||||||||||||||
| Columbia | Overseas Value Instl | 19,955 | |||||||||||||||
| * | T. Rowe Price | Retire Bal Inv | 13,791 | ||||||||||||||
| MFS | Moderate Allocation R4 | 11,329 | |||||||||||||||
| PIMCO | Short-Term Inst | 8,695 | |||||||||||||||
| Total Mutual Funds | 83,987,543 | ||||||||||||||||
| * | T. Rowe Price | Stable Value Fund | 3,859,111 | ||||||||||||||
| * | TETRA Technologies, Inc. | Company Stock | 2,513,665 | ||||||||||||||
| * | Participant loans | Participant Loans with various maturities and interest rates ranging from 4.25% to 9.5% | 1,653,331 | ||||||||||||||
| Cash and cash equivalents | 37 | ||||||||||||||||
| Net assets available for benefits | $ | 92,013,687 | |||||||||||||||
* Party-in-interest
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EXHIBIT INDEX
| EXHIBIT NO. | DESCRIPTION | |||||||
| 23.1* | ||||||||
* Filed with this report.
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SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.
TETRA Technologies, Inc. 401(k) | |||||
| Retirement Plan | |||||
| By: | /s/Elijio V. Serrano | ||||
| Elijio V. Serrano | |||||
| Senior Vice President and Chief Financial Officer | |||||
| TETRA Technologies, Inc. | |||||
Date: June 27, 2024
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