U.S. Markets closed

Martin Midstream Partners Announces Strategic Initiatives

Reports First Quarter 2019 Financial Results and Cash Distribution

KILGORE, Texas, April 24, 2019 (GLOBE NEWSWIRE) -- Martin Midstream Partners L.P. (MMLP) (the "Partnership") announced today strategic initiatives designed to strengthen the balance sheet by reducing leverage and allowing the Partnership to retain earnings to fund growth opportunities.  These initiatives consist of:

  • The previously announced marketing of the Partnership’s gas storage assets.

  • The active negotiation of the sale of certain non-core assets and/or businesses.

  • The announcement of the Partnership’s quarterly cash distribution of $0.25 per unit or $1.00 per unit on an annual basis.

"As we have stated for multiple quarters, the Partnership is committed to strengthening our balance sheet, reducing leverage and increasing our coverage ratio.  The cash distribution announcement today, while difficult, assists us as we move forward toward those goals", said Ruben Martin, President and Chief Executive Officer of Martin Midstream GP LLC, the general partner of the Partnership.  "The decision was not made lightly or without considerable debate, as I, as well as the other members of our Board and Executive Management team, realize the implications of such a decision for our unitholders and our Partnership.  However, this decision allows us to retain approximately $39.3 million annually enhancing the Partnership’s financial flexibility to pursue desirable growth opportunities that build long-term value for our unitholders."

The Partnership also announced today its financial results for the first quarter of 2019.  The Partnership reported a net loss for the first quarter 2019 of $3.7 million, a loss of $0.09 per limited partner unit.  The Partnership had a net income from continuing operations for the first quarter 2018 of $13.5 million, or $0.29 per limited partner unit.

"In the first quarter of 2019, the Partnership earned adjusted EBITDA of $30.8 million, which was below guidance by approximately $7.1 million," said Mr. Martin.  "Through most of the quarter we experienced extreme weather patterns throughout our geographic footprint that negatively impacted the majority of our business segments.

"Beginning with Sulfur Services, the segment missed guidance by approximately $3.0 million as the fertilizer business experienced weak sales activity up through mid-March as farmers were not able to plant acreage due to weather related disruptions affecting field conditions.  Fertilizer activity did increase in late March and we believe will continue to accelerate into the second quarter as the agricultural market deals with a shorter planting season.  Within the Natural Gas Services segment, warm winter weather drove propane sales volumes lower than estimated and the weak butane pricing environment that began in the fourth quarter of 2018 carried over into the first quarter of 2019, contributing to an approximate $2.8 million miss for the segment when compared to guidance.  And finally, our Transportation and Terminalling and Storage segments modestly missed guidance by approximately $0.6 million and $0.7 million, respectively.

"Based on this performance, the Partnership's distributable cash flow from continuing operations for the first quarter of 2019 was approximately $9.6 million.  Distributable cash flow was also negatively affected by approximately $1.9 million of maintenance capital expenditures planned for the second quarter of 2019 that were accelerated into the first quarter for scheduling purposes."

Revenues for the first quarter 2019 were $251.0 million compared to the first quarter 2018 of $307.1 million.

The Partnership had net income from discontinued operations related to its previously owned investment in West Texas LPG Pipeline for the three months ended March 31, 2018 of $1.5 million, or $0.04 per limited partner unit.  Distributable cash flow and adjusted EBITDA from discontinued operations were $1.4 million for the three months ended March 31, 2018.

Distributable cash flow, distributable cash flow from discontinued operations, EBITDA, adjusted EBITDA, and adjusted EBITDA from discontinued operations are non-GAAP financial measures which are explained in greater detail below under the heading "Use of Non-GAAP Financial Information."  The Partnership has also included below a table entitled "Reconciliation of EBITDA, Adjusted EBITDA, and Distributable Cash Flow" in order to show the components of these non-GAAP financial measures and their reconciliation to the most comparable GAAP measurement.

Included with this press release are the Partnership's consolidated and condensed financial statements as of and for the three months ended March 31, 2019 and certain prior periods.  These financial statements should be read in conjunction with the information contained in the Partnership's Quarterly Report on Form 10-Q, to be filed with the Securities and Exchange Commission on April 26, 2019.

An attachment accompanying this announcement is attached to this press release at http://ml.globenewswire.com/Resource/Download/e3a94d3c-e0a3-423e-be4d-89994d115e51.

Investors' Conference Call

A conference call to review the first quarter results will be held on Thursday, April 25, 2019 at 8:00 a.m. Central Time.  The live conference call will be available by calling (877) 878-2695. For a limited time, an audio replay of the conference call will be available by calling (855) 859-2056.  The conference ID is 7797871.  An archive of the replay will be on Martin Midstream Partners’ website at www.MMLP.com.

About Martin Midstream Partners

The Partnership is a publicly traded limited partnership with a diverse set of operations focused primarily in the United States Gulf Coast region. The Partnership's primary business segments include: (1) natural gas services, including liquids transportation and distribution services and natural gas storage; (2) terminalling, storage and packaging services for petroleum products and by-products; (3) sulfur and sulfur-based products processing, manufacturing, marketing and distribution; and (4) transportation services for petroleum products and by-products.

Forward-Looking Statements

Statements about the Partnership's outlook and all other statements in this release other than historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  These forward-looking statements and all references to financial estimates rely on a number of assumptions concerning future events and are subject to a number of uncertainties and other factors, many of which are outside the Partnership's control, which could cause actual results to differ materially from such statements.  While the Partnership believes that the assumptions concerning future events are reasonable, it cautions that there are inherent difficulties in anticipating or predicting certain important factors.  A discussion of these factors, including risks and uncertainties, is set forth in the Partnership's annual and quarterly reports filed from time to time with the Securities and Exchange Commission.  The Partnership disclaims any intention or obligation to revise any forward-looking statements, including financial estimates, whether as a result of new information, future events, or otherwise except where required to do so by law.

Use of Non-GAAP Financial Information

The Partnership's management uses a variety of financial and operational measurements other than its financial statements prepared in accordance with United States Generally Accepted Accounting Principles ("GAAP") to analyze its performance. These include: (1) net income before interest expense, income tax expense, and depreciation and amortization ("EBITDA"), (2) adjusted EBITDA and (3) distributable cash flow.  The Partnership's management views these measures as important performance measures of core profitability for its operations and the ability to generate and distribute cash flow, and as key components of its internal financial reporting. The Partnership's management believes investors benefit from having access to the same financial measures that management uses.

EBITDA, Adjusted EBITDA, and Adjusted EBITDA from Discontinued Operations.  Certain items excluded from EBITDA, adjusted EBITDA, and adjusted EBITDA from discontinued operations are significant components in understanding and assessing an entity's financial performance, such as cost of capital and historical costs of depreciable assets. The Partnership has included information concerning EBITDA, adjusted EBITDA, and adjusted EBITDA from discontinued operations because it provides investors and management with additional information to better understand the following: financial performance of the Partnership's assets without regard to financing methods, capital structure or historical cost basis; the Partnership's operating performance and return on capital as compared to those of other similarly situated entities; and the viability of acquisitions and capital expenditure projects.  The Partnership's method of computing adjusted EBITDA may not be the same method used to compute similar measures reported by other entities. The economic substance behind the Partnership's use of adjusted EBITDA is to measure the ability of the Partnership's assets to generate cash sufficient to pay interest costs, support its indebtedness and make distributions to its unitholders.

Distributable Cash Flow and Distributable Cash Flow from Discontinued Operations.  Distributable cash flow is a significant performance measure used by the Partnership's management and by external users of its financial statements, such as investors, commercial banks and research analysts, to compare basic cash flows generated by the Partnership to the cash distributions it expects to pay unitholders.  Distributable cash flow is also an important financial measure for the Partnership's unitholders since it serves as an indicator of the Partnership's success in providing a cash return on investment. Specifically, this financial measure indicates to investors whether or not the Partnership is generating cash flow at a level that can sustain or support an increase in its quarterly distribution rates.  Distributable cash flow is also a quantitative standard used throughout the investment community with respect to publicly-traded partnerships because the value of a unit of such an entity is generally determined by the unit's yield, which in turn is based on the amount of cash distributions the entity pays to a unitholder.

EBITDA, adjusted EBITDA, adjusted EBITDA from discontinued operations, distributable cash flow, and distributable cash flow from discontinued operations, should not be considered alternatives to, or more meaningful than, net income, cash flows from operating activities, or any other measure presented in accordance with GAAP. The Partnership's method of computing these measures may not be the same method used to compute similar measures reported by other entities.

Additional information concerning the Partnership is available on the Partnership's website at www.MMLP.com or by contacting:

Sharon Taylor - Head of Investor Relations
(877) 256-6644




MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED BALANCE SHEETS
(Dollars in thousands)

  March 31,
2019
  December 31,
20181
  (Unaudited)   (Unaudited)
Assets      
Cash $ 227     $ 300  
Accounts and other receivables, less allowance for doubtful accounts of $675 and $576, respectively 77,420     90,757  
Product exchange receivables 181     166  
Inventories (Note 6) 70,541     86,207  
Due from affiliates 27,035     18,845  
Fair value of derivatives (Note 10) 150     4  
Other current assets 7,135     6,106  
Assets held for sale (Note 4) 5,502     5,652  
Total current assets 188,191     208,037  
       
Property, plant and equipment, at cost 1,311,020     1,311,573  
Accumulated depreciation (498,138 )   (487,840 )
Property, plant and equipment, net 812,882     823,733  
       
Goodwill 17,785     17,785  
Right-of-use assets (Note 9) 28,109      
Deferred income taxes, net (Note 19) 24,412      
Other assets, net (Note 10) 23,689     24,073  
Total assets $ 1,095,068     $ 1,073,628  
       
Liabilities and Partners’ Capital      
Current installments of long-term debt and finance lease obligations (Notes 8 and 9) $ 406,650     $ 5,409  
Trade and other accounts payable 76,488     65,723  
Product exchange payables 14,234     13,237  
Due to affiliates 4,103     2,135  
Income taxes payable 989     445  
Other accrued liabilities (Note 10) 22,150     24,802  
Total current liabilities 524,614     111,751  
       
Long-term debt and finance lease obligations, net (Notes 8 and 9) 377,976     662,731  
Operating lease liabilities (Note 9) 19,734      
Other long-term obligations 8,953     10,714  
Total liabilities 931,277     785,196  
       
Commitments and contingencies (Note 16)      
Partners’ capital (Note 12) 163,791     288,432  
Total partners’ capital 163,791     288,432  
Total liabilities and partners' capital $ 1,095,068     $ 1,073,628  

These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in the Partnership's Quarterly Report on Form 10-Q to be filed with the Securities and Exchange Commission on April 26, 2019.

1 Financial information for 2018 has been revised to include results attributable to Martin Transport, Inc. ("MTI") acquired from Martin Resource Management Corporation. See Note 1 – Nature of Operations and Basis of Presentation.


MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per unit amounts)

  Three Months Ended
  March 31,
  2019   20181
Revenues:      
Terminalling and storage * $ 23,104     $ 24,047  
Transportation * 37,795     34,359  
Natural gas services* 10,934     15,356  
Sulfur services 2,859     2,787  
Product sales: *      
Natural gas services 116,474     159,162  
Sulfur services 28,734     34,900  
Terminalling and storage 31,067     36,463  
  176,275     230,525  
Total revenues 250,967     307,074  
       
Costs and expenses:      
Cost of products sold: (excluding depreciation and amortization)      
Natural gas services * 106,190     138,638  
Sulfur services * 19,696     22,218  
Terminalling and storage * 26,871     31,980  
  152,757     192,836  
Expenses:      
Operating expenses * 56,656     56,934  
Selling, general and administrative * 11,144     10,939  
Depreciation and amortization 18,982     19,990  
Total costs and expenses 239,539     280,699  
       
Other operating loss (720 )   8  
Operating income (loss) 10,708     26,383  
       
Other income (expense):      
Interest expense, net (13,671 )   (12,730 )
Other, net 3      
Total other expense (13,668 )   (12,730 )
       
Net income (loss) before taxes (2,960 )   13,653  
Income tax expense (696 )   (149 )
Income (loss) from continuing operations (3,656 )   13,504  
Income from discontinued operations, net of income taxes     1,532  
Net income (loss) (3,656 )   15,036  
Less general partner's interest in net (income) loss 73     (256 )
Less pre-acquisition (income) allocated to the general partner     (2,218 )
Less (income) loss allocable to unvested restricted units 2     (8 )
Limited partners' interest in net income (loss) $ (3,581 )   $ 12,554  
       

These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in the Partnership's Quarterly Report on Form 10-Q to be filed with the Securities and Exchange Commission on April 26, 2019.

1 Financial information for 2018 has been revised to include results attributable to MTI acquired from Martin Resource Management Corporation. See Note 1 – Nature of Operations and Basis of Presentation.

*Related Party Transactions Shown Below

MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per unit amounts)

*Related Party Transactions Included Above

  Three Months Ended
  March 31,
  2019   20181
Revenues:*      
Terminalling and storage $ 18,972     $ 20,008  
Transportation 5,643     6,693  
Product Sales 421     624  
Costs and expenses:*      
Cost of products sold: (excluding depreciation and amortization)      
Sulfur services 2,574     2,848  
Terminalling and storage 5,909     5,579  
Expenses:      
Operating expenses 22,536     23,088  
Selling, general and administrative 8,535     7,926  

These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in the Partnership's Quarterly Report on Form 10-Q to be filed with the Securities and Exchange Commission on April 26, 2019.

1 Financial information for 2018 has been revised to include results attributable to MTI acquired from Martin Resource Management Corporation. See Note 1 – Nature of Operations and Basis of Presentation.

MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per unit amounts)

  Three Months Ended
  March 31,
  2019   20181
Allocation of net income (loss) attributable to:      
  Limited partner interest:      
 Continuing operations $ (3,581 )   $ 11,054  
 Discontinued operations     1,500  
  $ (3,581 )   $ 12,554  
  General partner interest:      
  Continuing operations $ (73 )   $ 225  
  Discontinued operations     31  
  $ (73 )   $ 256  
       
Net income (loss) per unit attributable to limited partners:      
Basic:      
Continuing operations $ (0.09 )   $ 0.29  
Discontinued operations     0.04  
  $ (0.09 )   $ 0.33  
Weighted average limited partner units - basic 38,682     38,621  
Diluted:      
Continuing operations $ (0.09 )   $ 0.29  
Discontinued operations     0.03  
  $ (0.09 )   $ 0.32  
Weighted average limited partner units - diluted 38,682     38,630  

These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in the Partnership's Quarterly Report on Form 10-Q to be filed with the Securities and Exchange Commission on April 26, 2019.

1 Financial information for 2018 has been revised to include results attributable to MTI acquired from Martin Resource Management Corporation. See Note 1 – Nature of Operations and Basis of Presentation.


MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED STATEMENTS OF CAPITAL
(Dollars in thousands)

      Partners’ Capital    
  Parent Net
Investment1
  Common Limited   General
Partner
Amount
   
    Units   Amount     Total
Balances - January 1, 2018 $ 24,240     38,444,612     $ 290,927     $ 7,314     $ 322,481  
Net income 2,218         12,562     256     15,036  
Issuance of common units, net         (101 )       (101 )
Issuance of restricted units     633,425              
Forfeiture of restricted units     (7,000 )            
Cash distributions         (19,213 )   (392 )   (19,605 )
Deemed distribution to Martin Resource Management
  Corporation
(2,342 )               (2,342 )
Unit-based compensation         132         132  
Purchase of treasury units     (18,800 )   (273 )       (273 )
Excess purchase price over carrying value of acquired
  assets
        (26 )       (26 )
Balances - March 31, 2018 $ 24,116     39,052,237     $ 284,008     $ 7,178     $ 315,302  
                   
Balances - January 1, 2019 $ 23,720     39,032,237     $ 258,085     $ 6,627     $ 288,432  
Net loss         (3,583 )   (73 )   (3,656 )
Issuance of restricted units     16,944              
Forfeiture of restricted units     (118,087 )            
Cash distributions         (19,221 )   (392 )   (19,613 )
Unit-based compensation         352         352  
Excess purchase price over carrying value of acquired assets         (102,393 )       (102,393 )
Deferred taxes on acquired assets and liabilities         24,781         24,781  
Contribution to parent (23,720 )               (23,720 )
Purchase of treasury units     (31,504 )   (392 )       (392 )
Balances - March 31, 2019 $     38,899,590     $ 157,629     $ 6,162     $ 163,791  

These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in the Partnership's Quarterly Report on Form 10-Q to be filed with the Securities and Exchange Commission on April 26, 2019.

1 Financial information for 2018 has been revised to include results attributable to MTI acquired from Martin Resource Management Corporation. See Note 1 – Nature of Operations and Basis of Presentation.


MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED STATEMENTS OF CASH FLOWS
(Dollars in thousands)

  Three Months Ended
  March 31,
  2019   20181
Cash flows from operating activities:      
Net income (loss) $ (3,656 )   $ 15,036  
Less:  Income from discontinued operations, net of income taxes     (1,532 )
Net income (loss) from continuing operations (3,656 )   13,504  
Adjustments to reconcile net income (loss) to net cash provided by operating activities:      
Depreciation and amortization 18,982     19,990  
Amortization of deferred debt issuance costs 895     819  
Amortization of premium on notes payable (77 )   (77 )
Deferred taxes 369      
Loss on sale of property, plant and equipment 720     (8 )
Derivative loss 239     (2,470 )
Net cash received (paid) for commodity derivatives (385 )   2,316  
Unit-based compensation 352     132  
Change in current assets and liabilities, excluding effects of acquisitions and dispositions:      
   Accounts and other receivables 13,335     22,120  
   Product exchange receivables (15 )   (46 )
   Inventories 15,665     23,306  
   Due from affiliates (7,384 )   (1,844 )
   Other current assets (250 )   (931 )
   Trade and other accounts payable 10,933     (2,711 )
   Product exchange payables 997     (1,551 )
   Due to affiliates 1,162     (2,181 )
   Income taxes payable 544     149  
   Other accrued liabilities (11,038 )   (13,234 )
Change in other non-current assets and liabilities (785 )   609  
      Net cash provided by continuing operating activities 40,603     57,892  
      Net cash provided by discontinued operating activities     1,437  
      Net cash provided by operating activities 40,603     59,329  
       
Cash flows from investing activities:      
Payments for property, plant and equipment (6,973 )   (16,557 )
Acquisitions (23,720 )    
Payments for plant turnaround costs (3,827 )    
Proceeds from sale of property, plant and equipment 574     (32 )
   Net cash used in continuing investing activities (33,946 )   (16,589 )
   Net cash used in discontinuing investing activities     (1,739 )
   Net cash used in investing activities (33,946 )   (18,328 )
       
Cash flows from financing activities:      
Payments of long-term debt and finance lease obligations (89,255 )   (101,261 )
Proceeds from long-term debt 205,000     84,000  
Proceeds from issuance of common units, net of issuance related costs     (101 )
Purchase of treasury units (392 )   (273 )
Deemed distribution to Martin Resource Management Corporation     (2,342 )
Payment of debt issuance costs (77 )   (1,236 )
Excess purchase price over carrying value of acquired assets (102,393 )   (26 )
Cash distributions paid (19,613 )   (19,605 )
   Net cash used in financing activities (6,730 )   (40,844 )
       
   Net increase (decrease) in cash (73 )   157  
Cash at beginning of period 300     89  
Cash at end of period $ 227     $ 246  
Non-cash additions to property, plant and equipment $ 2,001     $ 1,905  

These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in the Partnership's Quarterly Report on Form 10-Q to be filed with the Securities and Exchange Commission on April 26, 2019.

1 Financial information for 2018 has been revised to include results attributable to MTI acquired from Martin Resource Management Corporation. See Note 1 – Nature of Operations and Basis of Presentation.


MARTIN MIDSTREAM PARTNERS L.P.
SEGMENT OPERATING INCOME
(Dollars and volumes in thousands, except BBL per day)


Terminalling and Storage Segment

Comparative Results of Operations for the Three Months Ended March 31, 2019 and 2018

  Three Months Ended
March 31,
  Variance   Percent
Change
  2019   2018    
           
  (In thousands, except BBL per day)    
Revenues:              
Services $ 24,800     $ 25,503     $ (703 )   (3 )%
Products 31,092     36,480     (5,388 )   (15 )%
Total revenues 55,892     61,983     (6,091 )   (10 )%
               
Cost of products sold 28,277     33,502     (5,225 )   (16 )%
Operating expenses 13,353     13,447     (94 )   (1 )%
Selling, general and administrative expenses 1,349     1,256     93     7  %
Depreciation and amortization 7,837     10,159     (2,322 )   (23 )%
  5,076     3,619     1,457     40  %
Other operating income 10         10      
Operating income $ 5,086     $ 3,619     $ 1,467     41  %
               
Shore-based throughput volumes (guaranteed minimum) (gallons) 20,000     20,000          %
Smackover refinery throughput volumes (guaranteed minimum) (BBL per day) 6,500     6,500          %


Natural Gas Services Segment

Comparative Results of Operations for the Three Months Ended March 31, 2019 and 2018

  Three Months Ended
March 31,
  Variance   Percent
Change
  2019   2018    
           
  (In thousands)    
Revenues:              
Services $ 10,934     $ 15,356     $ (4,422 )   (29 )%
Products 116,474     159,163     (42,689 )   (27 )%
Total revenues 127,408     174,519     (47,111 )   (27 )%
               
Cost of products sold 111,309     143,748     (32,439 )   (23 )%
Operating expenses 6,513     5,780     733     13 %
Selling, general and administrative expenses 2,044     3,007     (963 )   (32 )%
Depreciation and amortization 4,707     5,301     (594 )   (11 )%
  2,835     16,683     (13,848 )   (83 )%
Other operating income 6         6      
Operating income $ 2,841     $ 16,683     $ (13,842 )   (83 )%
               
NGL sales volumes (Bbls) 2,907     3,441     (534 )   (16 )%



MARTIN MIDSTREAM PARTNERS L.P.

SEGMENT OPERATING INCOME
(Dollars and volumes in thousands, except BBL per day)

Sulfur Services Segment

Comparative Results of Operations for the Three Months Ended March 31, 2019 and 2018

  Three Months Ended
March 31,
  Variance   Percent
Change
  2019   2018    
           
  (In thousands)    
Revenues:              
Services $ 2,859     $ 2,787     $ 72     3  %
Products 28,734     34,900     (6,166 )   (18 )%
Total revenues 31,593     37,687     (6,094 )   (16 )%
               
Cost of products sold 21,566     23,987     (2,421 )   (10 )%
Operating expenses 2,163     2,912     (749 )   (26 )%
Selling, general and administrative expenses 1,178     1,035     143     14  %
Depreciation and amortization 2,868     2,064     804     39  %
  3,818     7,689     (3,871 )   (50 )%
Other operating loss     (2 )   2     100  %
Operating income $ 3,818     $ 7,687     $ (3,869 )   (50 )%
               
Sulfur (long tons) 109     176     (67 )   (38 )%
Fertilizer (long tons) 67     88     (21 )   (24 )%
Total sulfur services volumes (long tons) 176     264     (88 )   (33 )%


Transportation Segment

Comparative Results of Operations for the Three Months Ended March 31, 2019 and 2018

  Three Months Ended
March 31,
  Variance   Percent
Change
  2019   2018    
           
  (In thousands)    
Revenues $ 45,186     $ 41,937     $ 3,249     8  %
Operating expenses 35,265     35,440     (175 )    %
Selling, general and administrative expenses 2,085     1,416     669     47  %
Depreciation and amortization 3,570     2,466     1,104     45  %
  $ 4,266     $ 2,615     $ 1,651     63  %
Other operating income (loss) (736 )   10     (746 )   (7,460 )%
Operating income $ 3,530     $ 2,625     $ 905     34  %


Non-GAAP Financial Measures

The following table reconciles the non-GAAP financial measurements used by management to our most directly comparable GAAP measures for the three months ended March 31, 2019 and 2018, which represents EBITDA, Adjusted EBITDA and Distributable Cash Flow.

Reconciliation of EBITDA, Adjusted EBITDA, and Distributable Cash Flow

    Three Months Ended
    March 31,
    2019   20181
         
    (in thousands)
Net income (loss)   $ (3,656 )   $ 15,036  
Less:  Income from discontinued operations, net of income taxes       (1,532 )
Income (loss) from continuing operations   (3,656 )   13,504  
Adjustments:        
   Interest expense, net   13,671     12,730  
   Income tax expense   696     149  
   Depreciation and amortization   18,982     19,990  
EBITDA   29,693     46,373  
Adjustments:        
   (Gain) loss on sale of property, plant and equipment   720     (8 )
   Unrealized mark-to-market on commodity derivatives   (147 )   (154 )
   Transaction costs associated with acquisitions   184      
   Unit-based compensation   352     132  
Adjusted EBITDA   30,802     46,343  
Adjustments:        
   Interest expense, net   (13,671 )   (12,730 )
   Income tax expense   (696 )   (149 )
   Amortization of debt premium   (77 )   (77 )
   Amortization of deferred debt issuance costs   895     819  
   Deferred income taxes   369      
   Payments for plant turnaround costs   (3,827 )    
   Maintenance capital expenditures   (4,195 )   (6,002 )
Distributable Cash Flow   $ 9,600     $ 28,204  
         
Income from discontinued operations   $     $ 1,532  
Adjustments:        
   Equity in earnings       (1,595 )
   Distributions from unconsolidated entities       1,500  
Adjusted EBITDA and Distributable Cash Flow from Discontinued Operations   $     $ 1,437  

1 Financial information for 2018 has been revised to include results attributable to MTI acquired from Martin Resource Management Corporation. See Note 1 – Nature of Operations and Basis of Presentation.