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Martin Midstream Partners Reports 2018 Fourth Quarter Financial Results

Martin Midstream Partners Reports 2018 Fourth Quarter Financial Results
Martin Midstream Partners Reports 2018 Fourth Quarter Financial Results
  • Net income of $44.1 million for 2018

  • Adjusted Leverage Ratio 4.61x at December 31, 2018

  • Financial Guidance for 2019

KILGORE, Texas, Feb. 13, 2019 (GLOBE NEWSWIRE) -- Martin Midstream Partners L.P. (MMLP) (the “Partnership”) announced today its financial results for the three months and year ended December 31, 2018.

Ruben Martin, President and Chief Executive Officer of Martin Midstream GP LLC, the general partner of the Partnership, said, “Looking back at 2018, the Partnership deployed two strategic initiatives undertaken specifically to strengthen its balance sheet, reduce leverage and improve its distribution coverage ratio.  In the second quarter, we announced the first initiative - the sale of our partnership interest in the West Texas LPG Pipeline Limited Partnership (“WTLPG”).  The transaction closed on July 31, 2018 and the net proceeds of approximately $193.7 million were used to reduce outstanding borrowings under the revolving credit facility, lowering our adjusted leverage ratio from 5.46 times to 4.61 times at June 30, 2018 and December 31, 2018, respectively.  We announced the second initiative in conjunction with our third quarter earnings release and on January 1, 2019, we closed the acquisition of Martin Transport, Inc. (“MTI”) for $135.0 million.  MTI is expected to contribute approximately $23.6 million and $14.7 million of EBITDA and distributable cash flow, respectively, to the Partnership in 2019, contributing to an estimated distribution coverage of 1.1 times at December 31, 2019.

“With these strategic initiatives in position, we entered the fourth quarter of 2018 with optimism, as historically this quarter has been strong for our Natural Gas Services segment.  During this quarter, our butane optimization business begins its cyclical upswing as demand for butane increases with refineries entering the winter gasoline-blending season.  Though fundamentals remained constant in this cycle, we did not envision nor did we foresee the unprecedented, in terms of speed, drop in commodity prices that occurred from mid-October through December.  Although our carrying cost of refinery grade butane inventory at the end of the third quarter was well positioned, this dramatic pricing collapse in the fourth quarter resulted in a $13.5 million shortfall when compared to revised guidance for the butane optimization business.  This shortfall was slightly offset by modest outperformance in the remaining Natural Gas Services businesses, resulting in an overall shortfall of $12.7 million for the year compared to revised guidance.

“In our Terminalling and Storage segment results were slightly below revised fourth quarter and full year guidance estimates, primarily attributable to lower throughput volumes at our shore-based terminals, reduced lube margins, and unscheduled repairs and maintenance in our specialty terminals.  For the full year 2018, the Terminalling and Storage segment missed revised guidance by approximately $1.2 million.

“Our Sulfur Services segment was also slightly below fourth quarter revised guidance as the fertilizer business experienced reduced sales volumes due to weather conditions in South Texas, which were slightly offset by an increase in sulfur storage and transportation volumes.  For the full year 2018, the Sulfur Services segment shortfall to revised guidance was approximately $0.7 million.

“The Marine Transportation segment finished slightly above revised guidance expectations for both fourth quarter and full year 2018.  During the quarter, we benefitted from improved day rates and strong fleet utilization, which resulted in the Marine Transportation segment exceeding 2018 revised full year guidance by approximately $0.5 million.

“In total, the Partnership generated a Net Loss and Adjusted EBITDA of $0.9 million and $26.9 million, respectively, for the fourth quarter and Net Income and Adjusted EBITDA of $44.1 million and $126.9 million (which includes distributions from WTLPG of $3.2 million), respectively, for full year 2018.  Based on this performance, the Partnership’s distributable cash flow was approximately $9.4 million for the quarter and approximately $54.3 million for full year 2018, resulting in a distribution coverage ratio of 0.69 times, well below our targeted distribution coverage ratio of 1.25 times or greater.

“As we enter 2019, management remains committed to initiating strategies that reduce leverage and increase our distribution coverage ratio.  The Partnership expects to generate annual distributable cash flow of $85.6 million in 2019, resulting in a distribution coverage ratio of approximately 1.1 times, as stated earlier.  We estimate Net Income and Adjusted EBITDA to be $43.6 million and $159.5 million, respectively, for 2019, with the strongest quarters, due to the cyclical nature of our fertilizer and butane optimization businesses, being the first and fourth.  Management’s expectation is that the majority of the Partnership estimated adjusted EBITDA will be generated by fee-based services, with margin activities contributing approximately 38% of the total adjusted EBITDA estimate.  We are forecasting maintenance capital expenditures for 2019 to be between $20.0 million and $23.0 million, which includes a turnaround at the refinery of approximately $3.5 million.

“To conclude, Martin Midstream Partners remains a well-built company with strategically located assets integrated throughout the refinery services value chain.  Although 2018 proved to be a difficult year due to the speed of the commodity price collapse in the fourth quarter, the strategic positioning that occurred during the last half of 2018 will strengthen the company in 2019 and forward.  Further, we are actively pursuing strategic initiatives that will significantly reduce our leverage and narrow our focus to operating assets that serve the refinery services industry.”

The Partnership had a net loss from continuing operations for the fourth quarter 2018 of $0.9 million, a loss of $0.04 per limited partner unit.  The Partnership had net income from continuing operations for the fourth quarter 2017 of $17.1 million, or $0.47 per limited partner unit.  The Partnership's adjusted EBITDA from continuing operations for the fourth quarter 2018 was $26.9 million compared to adjusted EBITDA from continuing operations for the fourth quarter 2017 of $48.1 million.

The Partnership had a net loss from continuing operations for the year ended December 31, 2018 of $7.6 million, a loss of $0.19 per limited partner unit.  Net income from continuing operations for the year ended December 31, 2017 was $13.0 million, or $0.33 per limited partner unit. The Partnership's adjusted EBITDA from continuing operations for the year ended December 31, 2018 was $123.7 million compared to adjusted EBITDA for the year ended December 31, 2017 of $151.0 million.

The Partnership's distributable cash flow from continuing operations for the fourth quarter of 2018 was $9.4 million compared to distributable cash flow from continuing operations for the fourth quarter of 2017 of $30.1 million.

The Partnership's distributable cash flow from continuing operations for the year ended December 31, 2018 was $51.0 million compared to distributable cash flow from continuing operations for the year ended December 31, 2017 of $85.9 million.

Revenues for the fourth quarter of 2018 were $252.8 million compared to $305.7 million for the fourth quarter of 2017.  Revenues for the year ended December 31, 2018 were $972.7 million compared to $946.1 million for the year ended December 31, 2017.

As discussed above, on July 31, 2018, the Partnership divested of its 20 percent non-operating interest in WTLPG.  The Partnership recorded a gain on the disposition of $48.6 million.  The Partnership has presented the results of operations and cash flows relating to its investment in WTLPG as discontinued operations for the years ended December 31, 2018 and 2017.

The Partnership had net income from discontinued operations for the three months ended December 31, 2018 of $0.0 million, or $0.00 per limited partner unit.  The Partnership had net income from discontinued operations for the three months ended December 31, 2017 of $1.7 million, or $0.04 per limited partner unit.

The Partnership had net income from discontinued operations for the year ended December 31, 2018 of $51.7 million, or $1.30 per limited partner unit.  The Partnership had net income from discontinued operations for the year ended December 31, 2017 of $4.1 million, or $0.11 per limited partner unit.

Distributable cash flow and adjusted EBITDA from discontinued operations were $0.0 million for the three months ended December 31, 2018.  Distributable cash flow and adjusted EBITDA from discontinued operations were $1.2 million for the three months ended December 31, 2017.

Distributable cash flow and adjusted EBITDA from discontinued operations were $3.3 million for the year ended December 31, 2018.  Distributable cash flow and adjusted EBITDA from discontinued operations were $5.2 million for the year ended December 31, 2017.

Distributable cash flow, EBITDA and adjusted EBITDA 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 financial statements as of and for the year ended December 31, 2018 and certain prior periods.  These financial statements should be read in conjunction with the information contained in the Partnership's Annual Report on Form 10-K, to be filed with the SEC on February 19, 2019.

An attachment accompanying this announcement is available at http://resource.globenewswire.com/Resource/Download/88f9cd58-8d80-4df0-9518-c61ac53c78b2

2019 Guidance

The Partnership will discuss 2019 guidance during the investors’ conference call scheduled for Thursday, February 14, 2019 at 8:00 a.m.  Details of the conference call are below.  A presentation to accompany this discussion is available at http://resource.globenewswire.com/Resource/Download/8a631312-00a5-4730-b43d-4f1c214879aa

Investors' Conference Call

An investors conference call to review the fourth quarter results and 2019 guidance will be held on Thursday, February 14, 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 4780178. 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) land and marine 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.

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 and Adjusted EBITDA.  Certain items excluded from EBITDA and adjusted EBITDA 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 and adjusted EBITDA 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.  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 and distributable cash flow 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
ir@mmlp.com

 

 

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

 

 

 

December 31,

 

2018

 

2017

Assets

 

 

 

Cash

$

237

 

 

$

27

 

Trade and accrued accounts receivable, less allowance for doubtful accounts of $291 and $314, respectively

79,031

 

 

107,242

 

Product exchange receivables

166

 

 

29

 

Inventories (Note 7)

85,068

 

 

97,252

 

Due from affiliates

18,609

 

 

23,668

 

Fair value of derivatives (Note 13)

4

 

 

 

Other current assets

5,275

 

 

4,866

 

Assets held for sale (Note 5)

5,652

 

 

9,579

 

Total current assets

194,042

 

 

242,663

 

 

 

 

 

Property, plant and equipment, at cost

1,264,730

 

 

1,253,065

 

Accumulated depreciation

(466,381

)

 

(421,137

)

Property, plant and equipment, net (Note 8)

798,349

 

 

831,928

 

 

 

 

 

Goodwill (Note 9)

17,296

 

 

17,296

 

Investment in WTLPG (Note 11)

 

 

128,810

 

Intangibles and other assets, net (Note 15)

23,711

 

 

32,801

 

 

$

1,033,398

 

 

$

1,253,498

 

Liabilities and Partners’ Capital

 

 

 

Trade and other accounts payable

$

63,157

 

 

$

92,567

 

Product exchange payables

13,237

 

 

11,751

 

Due to affiliates

2,459

 

 

3,168

 

Income taxes payable

445

 

 

510

 

Fair value of derivatives (Note 13)

 

 

72

 

Other accrued liabilities (Note 15)

22,215

 

 

26,340

 

Total current liabilities

101,513

 

 

134,408

 

 

 

 

 

Long-term debt, net (Note 16)

656,459

 

 

812,632

 

Other long-term obligations

10,714

 

 

8,217

 

Total liabilities

768,686

 

 

955,257

 

Commitments and contingencies (Note 22)

 

 

 

Partners’ capital (Note 17)

264,712

 

 

298,241

 

Total partners’ capital

264,712

 

 

298,241

 

 

$

1,033,398

 

 

$

1,253,498

 

These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in the Partnership's Annual Report on Form 10-K to be filed with the Securities and Exchange Commission on February 19, 2019.

 

 

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

 

 

 

Year Ended December 31,

 

2018

 

2017

 

2016

Revenues:

 

 

 

 

 

Terminalling and storage  *

$

96,287

 

 

$

99,705

 

 

$

123,132

 

Marine transportation  *

50,370

 

 

48,579

 

 

58,290

 

Natural gas storage services *

52,109

 

 

58,817

 

 

61,133

 

Sulfur services

11,148

 

 

10,952

 

 

10,800

 

Product sales: *

 

 

 

 

 

Natural gas services

496,026

 

 

473,865

 

 

330,200

 

Sulfur services

121,388

 

 

123,732

 

 

130,258

 

Terminalling and storage

145,327

 

 

130,466

 

 

113,578

 

 

762,741

 

 

728,063

 

 

574,036

 

Total revenues

972,655

 

 

946,116

 

 

827,391

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

Cost of products sold: (excluding depreciation and amortization)

 

 

 

 

 

Natural gas services *

463,939

 

 

421,444

 

 

289,516

 

Sulfur services *

90,418

 

 

82,338

 

 

87,963

 

Terminalling and storage *

130,253

 

 

116,495

 

 

100,714

 

 

684,610

 

 

620,277

 

 

478,193

 

Expenses:

 

 

 

 

 

Operating expenses  *

128,337

 

 

140,177

 

 

152,325

 

Selling, general and administrative  *

37,677

 

 

38,764

 

 

34,320

 

Impairment of long-lived assets

 

 

2,225

 

 

26,953

 

Impairment of goodwill

 

 

 

 

4,145

 

Depreciation and amortization

76,866

 

 

85,195

 

 

92,132

 

   Total costs and expenses

927,490

 

 

886,638

 

 

788,068

 

Other operating income (loss), net

(379

)

 

523

 

 

33,400

 

Operating income

44,786

 

 

60,001

 

 

72,723

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

Interest expense, net

(52,037

)

 

(47,743

)

 

(46,100

)

Other, net

25

 

 

1,101

 

 

1,106

 

Total other income (expense)

(52,012

)

 

(46,642

)

 

(44,994

)

Net income before taxes

(7,226

)

 

13,359

 

 

27,729

 

Income tax expense

(369

)

 

(352

)

 

(726

)

Income from continuing operations

(7,595

)

 

13,007

 

 

27,003

 

Income from discontinued operations, net of income taxes

51,700

 

 

4,128

 

 

4,649

 

Net income

44,105

 

 

17,135

 

 

31,652

 

Less general partner's interest in net income

(882

)

 

(343

)

 

(8,419

)

Less income allocable to unvested restricted units

(28

)

 

(42

)

 

(90

)

Limited partner's interest in net income

$

43,195

 

 

$

16,750

 

 

$

23,143

 

These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in the Partnership's Annual Report on Form 10-K to be filed with the Securities and Exchange Commission on February 19, 2019.

*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

Year Ended December 31,

 

2018

 

2017

 

2016

Revenues:

 

 

 

 

 

Terminalling and storage

$

79,219

 

 

$

82,205

 

 

$

82,437

 

Marine transportation

15,442

 

 

16,801

 

 

21,767

 

Natural gas services

 

 

122

 

 

699

 

Product sales

1,407

 

 

3,578

 

 

3,034

 

Costs and expenses:

 

 

 

 

 

Cost of products sold: (excluding depreciation and amortization)

 

 

 

 

 

Natural gas services

14,816

 

 

18,946

 

 

22,886

 

Sulfur services

17,418

 

 

15,564

 

 

15,339

 

Terminalling and storage

28,304

 

 

17,612

 

 

13,838

 

Expenses:

 

 

 

 

 

Operating expenses

55,528

 

 

64,344

 

 

70,841

 

Selling, general and administrative

28,246

 

 

29,416

 

 

25,890

 

These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in the Partnership's Annual Report on Form 10-K to be filed with the Securities and Exchange Commission on February 19, 2019.

 

 

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

 

 

 

Year Ended December 31,

 

2018

 

2017

 

2016

Allocation of net income attributable to:

 

 

 

 

 

Limited partner interest:

 

 

 

 

 

Continuing operations

$

(7,438

)

 

$

12,715

 

 

$

19,744

 

Discontinued operations

50,633

 

 

4,035

 

 

3,399

 

 

$

43,195

 

 

$

16,750

 

 

$

23,143

 

General partner interest:

 

 

 

 

 

Continuing operations

$

(152

)

 

$

260

 

 

$

7,182

 

Discontinued operations

1,034

 

 

83

 

 

1,237

 

 

$

882

 

 

$

343

 

 

$

8,419

 

 

 

 

 

 

 

Net income per unit attributable to limited partners:

 

 

 

 

 

Basic:

 

 

 

 

 

Continuing operations

$

(0.19

)

 

$

0.33

 

 

$

0.55

 

Discontinued operations

1.30

 

 

0.11

 

 

0.10

 

 

$

1.11

 

 

$

0.44

 

 

$

0.65

 

 

 

 

 

 

 

Weighted average limited partner units - basic

38,907

 

 

38,102

 

 

35,347

 

 

 

 

 

 

 

Diluted:

 

 

 

 

 

Continuing operations

$

(0.19

)

 

$

0.33

 

 

$

0.55

 

Discontinued operations

1.30

 

 

0.11

 

 

0.10

 

 

$

1.11

 

 

$

0.44

 

 

$

0.65

 

 

 

 

 

 

 

Weighted average limited partner units - diluted

38,923

 

 

38,165

 

 

35,375

 

These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in the Partnership's Annual Report on Form 10-K to be filed with the Securities and Exchange Commission on February 19, 2019.

 

 

 

 

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

 

 

 

 

 

Partners’ Capital

 

 

 

Common

 

General
Partner

 

 

 

Units

 

Amount

 

Amount

 

Total

Balances – December 31, 2015

35,456,612

 

 

$

380,845

 

 

$

13,034

 

 

$

393,879

 

 

 

 

 

 

 

 

 

Net income

 

 

23,233

 

 

8,419

 

 

31,652

 

Issuance of common units, net

 

 

(29

)

 

 

 

(29

)

Issuance of restricted units

13,800

 

 

 

 

 

 

 

Forfeiture of restricted units

(2,250

)

 

 

 

 

 

 

Cash distributions

 

 

(104,137

)

 

(14,041

)

 

(118,178

)

Reimbursement of excess purchase price over carrying value of acquired assets

 

 

4,125

 

 

 

 

4,125

 

Unit-based compensation

 

 

904

 

 

 

 

904

 

Purchase of treasury units

(16,100

)

 

(347

)

 

 

 

(347

)

Balances – December 31, 2016

35,452,062

 

 

304,594

 

 

7,412

 

 

312,006

 

 

 

 

 

 

 

 

 

Net income

 

 

16,792

 

 

343

 

 

17,135

 

Issuance of common units, net

2,990,000

 

 

51,056

 

 

 

 

51,056

 

Issuance of restricted units

12,000

 

 

 

 

 

 

 

Forfeiture of restricted units

(9,250

)

 

 

 

 

 

 

General partner contribution

 

 

 

 

1,098

 

 

1,098

 

Cash distributions

 

 

(75,399

)

 

(1,539

)

 

(76,938

)

Reimbursement of excess purchase price over carrying value of acquired assets

 

 

1,125

 

 

 

 

1,125

 

Excess purchase price over carrying value of acquired assets

 

 

(7,887

)

 

 

 

(7,887

)

Unit-based compensation

 

 

650

 

 

 

 

650

 

Purchase of treasury units

(200

)

 

(4

)

 

 

 

(4

)

Balances – December 31, 2017

38,444,612

 

 

290,927

 

 

7,314

 

 

298,241

 

 

 

 

 

 

 

 

 

Net income

 

 

43,223

 

 

882

 

 

44,105

 

Issuance of common units, net

 

 

(118

)

 

 

 

(118

)

Issuance of time-based restricted units

315,500

 

 

 

 

 

 

 

Issuance of performance-based restricted units

317,925

 

 

 

 

 

 

 

Forfeiture of restricted units

(27,000

)

 

 

 

 

 

 

Cash distributions

 

 

(76,872

)

 

(1,569

)

 

(78,441

)

Excess purchase price over carrying value of acquired assets

 

 

(26

)

 

 

 

(26

)

Unit-based compensation

 

 

1,224

 

 

 

 

1,224

 

Purchase of treasury units

(18,800

)

 

(273

)

 

 

 

(273

)

Balances – December 31, 2018

39,032,237

 

 

$

258,085

 

 

$

6,627

 

 

$

264,712

 

These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in the Partnership's Annual Report on Form 10-K to be filed with the Securities and Exchange Commission on February 19, 2019.

 

 

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

 

 

 

Year Ended December 31,

 

2018

 

2017

 

2016

Cash flows from operating activities:

 

 

 

 

 

Net income

$

44,105

 

 

$

17,135

 

 

$

31,652

 

Less:  Income from discontinued operations

(51,700

)

 

(4,128

)

 

(4,649

)

Net income (loss) from continuing operations

(7,595

)

 

13,007

 

 

27,003

 

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

 

 

 

 

 

Depreciation and amortization

76,866

 

 

85,195

 

 

92,132

 

Amortization and write-off of deferred debt issue costs

3,445

 

 

2,897

 

 

3,684

 

Amortization of premium on notes payable

(306

)

 

(306

)

 

(306

)

(Gain) loss on disposition or sale of property, plant, and equipment

379

 

 

(523

)

 

(33,400

)

Impairment of long lived assets

 

 

2,225

 

 

26,953

 

Impairment of goodwill

 

 

 

 

4,145

 

Derivative (income) loss

(14,024

)

 

1,304

 

 

4,133

 

Net cash (paid) received for commodity derivatives

13,948

 

 

(5,136

)

 

(550

)

Net cash received for interest rate derivatives

 

 

 

 

160

 

Net premiums received on derivatives that settled during the year on interest rate swaption contracts

 

 

 

 

630

 

Unit-based compensation

1,224

 

 

650

 

 

904

 

Change in current assets and liabilities, excluding effects of acquisitions and dispositions:

 

 

 

 

 

Accounts and other receivables

28,440

 

 

(26,739

)

 

(6,153

)

Product exchange receivables

(137

)

 

178

 

 

843

 

Inventories

11,844

 

 

(14,656

)

 

(6,761

)

Due from affiliates

5,059

 

 

(12,096

)

 

(1,441

)

Other current assets

1,178

 

 

(1,699

)

 

2,478

 

Trade and other accounts payable

(27,478

)

 

20,037

 

 

3,254

 

Product exchange payables

1,486

 

 

4,391

 

 

(5,372

)

Due to affiliates

(709

)

 

(5,306

)

 

2,736

 

Income taxes payable

(65

)

 

(360

)

 

(115

)

Other accrued liabilities

(6,415

)

 

(3,187

)

 

686

 

Change in other non-current assets and liabilities

332

 

 

2,416

 

 

(12,230

)

Net cash provided by continuing operating activities

87,472

 

 

62,292

 

 

103,413

 

Net cash provided by discontinued operating activities

3,254

 

 

5,214

 

 

7,435

 

Net cash provided by operating activities

90,726

 

 

67,506

 

 

110,848

 

Cash flows from investing activities:

 

 

 

 

 

Payments for property, plant, and equipment

(37,090

)

 

(39,749

)

 

(40,455

)

Acquisitions, net of cash acquired

 

 

(19,533

)

 

(2,150

)

Payments for plant turnaround costs

(1,893

)

 

(1,583

)

 

(2,061

)

Proceeds from sale of property, plant, and equipment

9,381

 

 

8,377

 

 

108,505

 

Proceeds from repayment of Note receivable - affiliate

 

 

15,000

 

 

 

Net cash provided by (used in) continuing investing activities

(29,602

)

 

(37,488

)

 

63,839

 

Net cash provided by (used in) discontinued investing activities

177,256

 

 

(390

)

 

 

Net cash provided by (used in) investing activities

147,654

 

 

(37,878

)

 

63,839

 

Cash flows from financing activities:

 

 

 

 

 

Payments of long-term debt

(557,000

)

 

(339,000

)

 

(386,700

)

Proceeds from long-term debt

399,000

 

 

341,000

 

 

331,700

 

Net proceeds from issuance of common units

(118

)

 

51,056

 

 

(29

)

General partner contributions

 

 

1,098

 

 

 

Excess purchase price over carrying value of acquired assets

(26

)

 

(7,887

)

 

 

Reimbursement of excess purchase price over carrying value of acquired assets

 

 

1,125

 

 

4,125

 

Purchase of treasury units

(273

)

 

(4

)

 

(347

)

Payments of debt issuance costs

(1,312

)

 

(66

)

 

(5,274

)

Cash distributions paid

(78,441

)

 

(76,938

)

 

(118,178

)

Net cash used in financing activities

(238,170

)

 

(29,616

)

 

(174,703

)

 

 

 

 

 

 

Net increase (decrease) in cash

210

 

 

12

 

 

(16

)

Cash at beginning of year

27

 

 

15

 

 

31

 

Cash at end of year

$

237

 

 

$

27

 

 

$

15

 

 

 

 

 

 

 

These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in the Partnership's Annual Report on Form 10-K to be filed with the Securities and Exchange Commission on February 19, 2019.

 

 

 

 

 

 

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 Twelve Months Ended December 31, 2018 and 2017

 


Year Ended
December 31,

 

 

 

 

 

 

 


2018

 


2017

 


Variance

 

Percent
Change

 

 

 

 

 

 

 

 

 

 

 

 

 

(In thousands) 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

Services

$

102,514

 

$

105,703

 

$

(3,189

)

 

(3)%

Products

 

145,326

 

 

130,466

 

 

14,860

 

 

11%

Total revenues

 

247,840

 

 

236,169

 

 

11,671

 

 

5%

 

 

 

 

 

 

 

 

 

 

 

 

Cost of products sold

 

132,384

 

 

118,832

 

 

13,552

 

 

11%

Operating expenses

 

54,129

 

 

63,191

 

 

(9,062

)

 

(14)%

Selling, general and administrative expenses

 

5,327

 

 

5,832

 

 

(505

)

 

(9)%

Impairment of long-lived assets

 

 

 

600

 

 

(600

)

 

(100)%

Depreciation and amortization

 

39,508

 

 

45,160

 

 

(5,652

)

 

(13)%

 

 

16,492

 

 

2,554

 

 

13,938

 

 

546%

Other operating income, net

 

1,328

 

 

751

 

 

577

 

 

77%

Operating income

$

17,820

 

$

3,305