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Martin Midstream Partners Reports Fourth Quarter and Full Year 2020 Financial Results and Releases 2021 Financial Guidance

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·18 min read
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  • Full year 2020 financial performance meets low end of guidance range despite challenges of COVID-19

  • Reported net loss of $2.6 million and $6.8 million for the fourth quarter and year ended December 31, 2020, respectively

  • Reported adjusted EBITDA of $17.4 million and $94.9 million for the fourth quarter and year ended December 31, 2020, respectively

  • Generated distributable cash flow of $0.8 million and $39.7 million for the fourth quarter and year ended December 31, 2020, respectively

  • Releases 2021 Financial Guidance

Martin Midstream Partners L.P. (Nasdaq:MMLP) (the "Partnership") today announced its financial results for the three months and year ended December 31, 2020.

"We entered 2020 with a confident outlook and for very good reason. Our fourth quarter and full year 2019 results exceeded our guidance and we were executing on our priorities of strengthening the balance sheet and reducing leverage," stated Bob Bondurant, President and Chief Executive Officer of Martin Midstream GP LLC, the general partner of the Partnership. "However, by March the impacts on refinery utilization due to demand destruction from COVID-19 were beginning to become apparent and there was, and continues to be, no clear line of sight to the end, although we do see reasons for optimism.

"Despite the difficulties associated with the pandemic and the specific challenges to our industry we were able to meet the low end of our full year guidance even though the fourth quarter fell short of our expectations. Headwinds in both our Transportation and NGL segments impacted our results significantly. In the Transportation segment, as expected, reduced refinery utilization resulted in lower demand for our marine assets. In the NGL segment, the backwardation of the butane price curve led refineries to delay purchases anticipating a lower price environment in the first quarter of 2021. This negatively impacted our fourth quarter sales volumes, specifically in December, resulting in a misalignment between physical sales and financially hedged volumes.

"As we look to 2021, I am optimistic that refinery utilization will continue to increase as demand rises as a result of widespread vaccinations, government stimulus and a rebounding economy. Our businesses remain solid with approximately 62% of our cash flows tied to fixed-fee contracts. We will continue to focus on optimizing utilization of our asset base, reducing costs, and generating consistent cash flows to meet our leverage reduction goals and return value to our unitholders."

FOURTH QUARTER 2020 OPERATING RESULTS BY BUSINESS SEGMENT

TERMINALLING AND STORAGE ("T&S")

T&S Operating Income for the three months ended December 31, 2020 and 2019 was $12.6 million and $2.6 million, respectively.

Adjusted segment EBITDA for T&S was $10.6 million and $11.5 million for the three months ended December 31, 2020 and 2019, respectively, reflecting reduced operating expenses from lower repairs and maintenance and labor cost at our Specialty Terminals, improved margins on packaged lubricants products from lower production cost and operating efficiencies. These were offset by reduced throughput volume and rates at our Shore-Based Terminals and expired capital recovery fees at the Smackover Refinery as well as decreased fees related to a crude pipeline gathering rate adjustment.

TRANSPORTATION

Transportation Operating Income for the three months ended December 31, 2020 and 2019 was an operating loss of $2.3 million and operating income of $5.5 million, respectively.

Adjusted segment EBITDA for Transportation was $1.7 million and $9.1 million for the three months ended December 31, 2020 and 2019, respectively, reflecting lower marine utilization and reduced day rates along with lower land transportation load count related to demand destruction and lower refinery utilization as a result of COVID-19.

SULFUR SERVICES

Sulfur Services Operating Income for the three months ended December 31, 2020 and 2019 was $4.7 million and $4.6 million, respectively.

Adjusted segment EBITDA for Sulfur Services was $7.4 million for both the three months ended December 31, 2020 and 2019, respectively. Within the segment, the Fertilizer division results recovered when compared to last year as a result of improved planting conditions and higher commodity prices. This was offset by lower results for the Sulfur division as margins decreased in our sulfur trading business and 2019 results benefited from business interruption insurance proceeds.

NATURAL GAS LIQUIDS ("NGL")

NGL Operating Income for the three months ended December 31, 2020 and 2019 was $1.5 million and $9.5 million, respectively.

Adjusted segment EBITDA from continuing operations for NGL was $2.0 million and $11.4 million for the three months ended December 31, 2020 and 2019, respectively, primarily as a result of reduced demand in our butane optimization business due to the impact of COVID-19 on refinery utilization and backwardation of the forward price curve delaying refinery purchases causing misalignment of our physical sales and financially hedged volumes.

UNALLOCATED SELLING, GENERAL AND ADMINISTRATIVE EXPENSE ("USGA")

USGA expenses included in operating income were $4.6 million and $4.2 million for the three months ended December 31, 2020 and 2019, respectively.

USGA expenses included in adjusted EBITDA were $4.3 million and $3.9 million for the three months ended December 31, 2020 and 2019, respectively, primarily as a result of the 2019 period including insurance recoveries related to the settlement of an insurance claim which offset legal expense during that period.

2021 FINANCIAL GUIDANCE

The Partnership expects to generate Adjusted EBITDA between $95 million and $102 million for 2021. Guidance assumptions include increases to refined product demand beginning in the second half of the year as vaccines are more widely distributed, travel restrictions are lifted and the global economy recovers from the COVID-19 pandemic.

The Partnership intends to update and provide more detailed guidance when visibility to refined product demand and refinery utilization improves throughout the year.

The Partnership has not provided comparable GAAP financial information on a forward-looking basis because it would require the Partnership to create estimated ranges on a GAAP basis, which would entail unreasonable effort as the adjustments required to reconcile forward-looking non-GAAP measures cannot be predicted with a reasonable degree of certainty but may include, among others, costs related to debt amendments and unusual charges, expenses and gains. Some or all of those adjustments could be significant.

LIQUIDITY

At December 31, 2020, the Partnership had $148 million drawn on its $300 million revolving credit facility, a $57 million decrease from September 30, 2020. The decrease was attributable to the seasonal inventory liquidation in the NGL segment as working capital declined by $23.6 million and we received net proceeds of $20.7 million from the Mega Lubricants disposition. As previously announced, on August 12, 2020, the Partnership successfully completed an exchange offer and cash tender offer for its senior unsecured notes due February 2021. At December 31, 2020, the Partnership had the following outstanding senior notes: senior unsecured notes due 2021 ("2021 Notes") of $28.8 million, senior secured notes of $53.8 million due 2024 and senior secured notes of $291.9 million due 2025, for a total of senior notes outstanding of $374.5 million. The Partnership’s leverage ratio, as calculated under the revolving credit facility, was 5.4 times on December 31, 2020 compared to 4.9 times on September 30, 2020. The Partnership is in compliance with all debt covenants as of December 31, 2020. On February 15, 2021, the 2021 Notes matured and the Partnership retired the outstanding balance of $28.8 million using its revolving credit facility.

COVID-19 RESPONSE

The Partnership initiated and continues to evaluate protocols in response to the COVID-19 pandemic which include work from home initiatives to protect the health and safety of our employees as well as the communities where we operate, travel restrictions, and training personnel regarding preventative measures when accessing docks, vessels and operating locations. At this time all facilities are operational and monitored closely.

RESULTS OF OPERATIONS

The Partnership had a net loss from continuing operations for the three months ended December 31, 2020 of $2.6 million, a loss of $0.06 per limited partner unit. The Partnership had net income from continuing operations for the three months ended December 31, 2019 of $6.6 million, or $0.14 per limited partner unit. Adjusted EBITDA from continuing operations for the three months ended December 31, 2020 was $17.4 million compared to the three months ended December 31, 2019 of $35.5 million. Distributable cash flow from continuing operations for the three months ended December 31, 2020 was $0.8 million compared to the three months ended December 31, 2019 of $20.7 million.

The Partnership had no net income, adjusted EBITDA or distributable cash flow from discontinued operations for the three months ended December 31, 2020 or 2019.

The Partnership had a net loss from continuing operations for the year ended December 31, 2020 of $6.8 million, a loss of $0.17 per limited partner unit. The Partnership had net income from continuing operations for the year ended December 31, 2019 of $4.5 million, or $0.11 per limited partner unit. Adjusted EBITDA from continuing operations for the year ended December 31, 2020 was $94.9 million compared to the year ended December 31, 2019 of $108.3 million. Distributable cash flow from continuing operations for the year ended December 31, 2020 was $39.7 million compared to the year ended December 31, 2019 of $41.8 million.

The Partnership had no net income from discontinued operations for the year ended December 31, 2020 compared to a loss of $179.5 million, or $4.55 per limited partner unit, for the year ended December 31, 2019. The Partnership had no adjusted EBITDA from discontinued operations for the year ended December 31, 2020 compared to $10.7 million for the year ended December 31, 2019. The Partnership had no distributable cash flow from discontinued operations for the year ended December 31, 2020 compared to $9.8 million for the year ended December 31, 2019.

Revenues for the three months ended December 31, 2020 were $180.1 million compared to the three months ended December 31, 2019 of $241.9 million. Revenues for the year ended December 31, 2020 were $672.1 million compared to the year ended December 31, 2019 of $847.1 million.

Distributable cash flow from continuing operations, distributable cash flow from discontinued operations, EBITDA, adjusted EBITDA from continuing operations, 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 from continuing operations, 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.

An attachment included in the Current Report on Form 8-K to which this announcement is included, contains a comparison of the Partnership’s Adjusted EBITDA for the fourth quarter 2020 to the Partnership's Adjusted EBITDA for the fourth quarter 2019.

Investors' Conference Call

Date: Tuesday, February 23, 2021
Time: 8:00 a.m. CT (please dial in by 7:55 a.m.)
Dial In #: (833) 900-2251
Conference ID: 9494038

Replay Dial In # (800) 585-8367 – Conference ID: 9494038
Webcast & Presentation: Fourth Quarter 2020 Earnings Conference Call

About Martin Midstream Partners

Martin Midstream Partners L.P., headquartered in Kilgore, Texas, 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 lines include: (1) terminalling, processing, storage, and packaging services for petroleum products and by-products; (2) land and marine transportation services for petroleum products and by-products, chemicals, and specialty products; (3) sulfur and sulfur-based products processing, manufacturing, marketing and distribution; and (4) natural gas liquids marketing, distribution and transportation services. To learn more, visit www.MMLP.com. Follow Martin Midstream Partners L.P. on LinkedIn and Facebook.

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 guidance or to financial or operational estimates or projections rely on a number of assumptions concerning future events and are subject to a number of uncertainties, including (i) the current and potential impacts of the COVID-19 pandemic generally, on an industry-specific basis, and on the Partnership’s specific operations and business, (ii) the effects of the continued volatility of commodity prices and the related macroeconomic and political environment, and (iii) other factors, many of which are outside its 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 from Continuing Operations, and Adjusted EBITDA from Discontinued Operations. Certain items excluded from EBITDA, adjusted EBITDA from continuing operations, 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 from continuing operations, 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 from continuing operations, 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.

MMLP-F

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

December 31,

2020

2019

Assets

Cash

$

4,958

$

2,856

Trade and accrued accounts receivable, less allowance for doubtful accounts of $261 and $532, respectively

52,748

87,254

Inventories

54,122

62,540

Due from affiliates

14,807

17,829

Other current assets

8,991

5,833

Assets held for sale

5,052

Total current assets

135,626

181,364

Property, plant and equipment, at cost

889,108

884,728

Accumulated depreciation

(509,237

)

(467,531

)

Property, plant and equipment, net

379,871

417,197

Goodwill

16,823

17,705

Right-of-use assets

22,260

23,901

Deferred income taxes, net

22,253

23,422

Intangibles and other assets, net

2,805

3,567

$

579,638

$

667,156

Liabilities and Partners’ Capital (Deficit)

Current portion of long term debt and finance lease obligations

$

31,497

$

6,758

Trade and other accounts payable

51,900

64,802

Product exchange payables

373

4,322

Due to affiliates

435

1,470

Income taxes payable

556

472

Fair value of derivatives

207

667

Other accrued liabilities

34,407

28,789

Total current liabilities

119,375

107,280

Long-term debt, net

484,597

569,788

Finance lease obligations

289

717

Operating lease liabilities

15,181

16,656

Other long-term obligations

7,067

8,911

Total liabilities

626,509

703,352

Commitments and contingencies

Partners’ capital (deficit)

(46,871

)

(36,196

)

Total partners’ capital (deficit)

(46,871

)

(36,196

)

$

579,638

$

667,156

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

Year Ended December 31,

2020

2019

2018

Revenues:

Terminalling and storage *

$

80,864

$

87,397

$

96,204

Transportation *

132,492

159,622

150,121

Sulfur services

11,659

11,434

11,148

Product sales: *

Natural gas liquids

247,479

366,502

496,007

Sulfur services

96,348

99,906

121,388

Terminalling and storage

103,300

122,257

145,236

447,127

588,665

762,631

Total revenues

672,142

847,118

1,020,104

Costs and expenses:

Cost of products sold: (excluding depreciation and amortization)

Natural gas liquids *

215,895

325,376

449,103

Sulfur services *

58,515

65,893

83,641

Terminalling and storage *

82,516

101,526

126,562

356,926

492,795

659,306

Expenses:

Operating expenses *

183,747

209,313

216,182

Selling, general and administrative *

40,900

41,433

39,116

Impairment of long-lived assets

Impairment of goodwill

Depreciation and amortization

61,462

60,060

61,484

Total costs and expenses

643,035

803,601

976,088

Other operating income, net

12,488

14,587

1,041

Gain on involuntary conversion of property, plant and equipment

4,907

Operating income

46,502

58,104

45,057

Other income (expense):

Interest expense, net

(46,210

)

(51,690

)

(52,349

)

Gain on retirement of senior unsecured notes

3,484

Loss on exchange of senior unsecured notes

(8,817

)

Other, net

6

6

38

Total other income (expense)

(51,537

)

(51,684

)

(52,311

)

Net income (loss) before taxes

(5,035

)

6,420

(7,254

)

Income tax expense

(1,736

)

(1,900

)

(577

)

Income (loss) from continuing operations

(6,771

)

4,520

(7,831

)

Income (loss) from discontinued operations, net of income taxes

(179,466

)

63,486

Net income (loss)

(6,771

)

(174,946

)

55,655

Less general partner's interest in net (income) loss

135

3,499

(882

)

Less pre-acquisition income allocated to the general partner

(11,550

)

Less (income) loss allocable to unvested restricted units

21

(41

)

(28

)

Limited partners' interest in net income (loss)

$

(6,615

)

$

(171,488

)

$

43,195

*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,

2020

2019

2018

Revenues:

Terminalling and storage

$

63,823

$

71,733

$

79,137

Transportation

21,997

24,243

27,588

Product sales

317

931

1,297

Costs and expenses:

Cost of products sold: (excluding depreciation and amortization)

Sulfur services

10,519

10,765

10,641

Terminalling and storage

18,429

23,859

24,613

Expenses:

Operating expenses

80,075

88,194

90,878

Selling, general and administrative

...

32,622

26,441

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

Year Ended December 31,

2020

2019

2018

Allocation of net income (loss) attributable to:

Limited partner interest:

Continuing operations

$

(6,615

)

$

4,430

$

(18,982

)

Discontinued operations

(175,918

)

62,177

$

(6,615

)

$

(171,488

)

$

43,195

General partner interest:

Continuing operations

$

(135

)

$

91

$

(387

)

Discontinued operations

(3,590

)

1,269

$

(135

)

$

(3,499

)

$

882

Net income (loss) per unit attributable to limited partners:

Basic:

Continuing operations

$

(0.17

)

$

0.11

$

(0.49

)

Discontinued operations

(4.55

)

1.60

$

(0.17

)

$

(4.44

)

$

1.11

Weighted average limited partner units - basic

38,657

38,659

38,907

Diluted:

Continuing operations

$

(0.17

)

$

0.11

$

(0.49

)

Discontinued operations

(4.55

)

1.60

$

(0.17

)

$

(4.44

)

$

1.11

Weighted average limited partner units - diluted

38,657

38,659

38,923

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

Partners’ Capital (Deficit)

Parent Net

Investment

Common

General

Partner

Units

Amount

Amount

Total

Balances – December 31, 2017

$

24,240

38,444,612

$

290,927

$

7,314

$

322,481

Net income

11,550

43,223

882

55,655

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

)

General partner contribution

Cash distributions

(76,872

)

(1,569

)

(78,441

)

Deemed distribution from Martin Resource Management Corporation

(12,070

)

(12,070

)

Reimbursement of excess purchase price over carrying value of acquired assets

Excess carrying value of the assets over the purchase price paid by Martin Resource Management

(26

)

(26

)

Unit-based compensation

1,224

1,224

Purchase of treasury units

(18,800

)

(273

)

(273

)

Balances – December 31, 2018

23,720

39,032,237

258,085

6,627

288,432

Net loss

(171,447

)

(3,499

)

(174,946

)

Issuance of common units, net

(289

)

(289

)

Issuance of time-based restricted units

16,944

Forfeiture of restricted units

(154,288

)

Cash distributions

(48,111

)

(982

)

(49,093

)

Excess purchase price over carrying value of acquired assets

(102,393

)

(102,393

)

Deferred taxes on acquired assets and liabilities

24,781

24,781

Unit-based compensation

1,424

1,424

Purchase of treasury units

(31,504

)

(392

)

(392

)

Contribution to parent

(23,720

)

(23,720

)

Balances – December 31, 2019

38,863.389

(38,342

)

2,146

(36,196

)

Net loss

(6,636

)

(135

)

(6,771

)

Issuance of time-based restricted units

81,000

Forfeiture of restricted units

(85,467

)

Cash distributions

(5,211

)

(106

)

(5,317

)

Unit-based compensation

1,422

1,422

Purchase of treasury units

(7,748

)

(9

)

(9

)

Balances – December 31, 2020

$

38,851,174

$

(48,776

)

$

1,905

$

(46,871

)

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

Year Ended December 31,

2020

2019

2018

Cash flows from operating activities:

Net income (loss)

$

(6,771

)

$

(174,946

)

$

55,655

Less: (Income) loss from discontinued operations

179,466

(63,486

)

Net income (loss) from continuing operations

(6,771

)

4,520

(7,831

)

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

Depreciation and amortization

61,462

60,060

61,484

Amortization and write-off of deferred debt issue costs

3,422

4,041

3,445

Amortization of premium on notes payable

(191

)

(306

)

(306

)

Deferred income tax expense

1,169

1,360

208

Gain on disposition or sale of property, plant, and equipment

(9,788

)

(13,332

)

(1,041

)

Gain on involuntary conversion of property, plant and equipment

(4,907

)

Gain on retirement of senior unsecured notes

(3,484

)

Non-cash impact related to exchange of senior unsecured notes

(749

)

Derivative (income) loss

8,209

5,137

(14,024

)

Net cash (paid) received for commodity derivatives

(8,669

)

(4,466

)

13,948

Unit-based compensation

1,422

1,424

1,224

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

Accounts and other receivables

30,741

62

29,085

Product exchange receivables

166

(137

)

Inventories

5,264

21,493

13,370

Due from affiliates

2,932

1,822

5,961

Other current assets

(5,733

)

(254

)

1,485

Trade and other accounts payable

(7,318

)

(898

)

(27,321

)

Product exchange payables

(3,949

)

(7,781

)

555

Due to affiliates

(1,035

)

(1,469

)

99

Income taxes payable

84

27

(65

)

Other accrued liabilities

4,144

(3,017

)

(6,636

)

Change in other non-current assets and liabilities

(1,470

)

(543

)

1,206

Net cash provided by continuing operating activities

64,785

68,046

74,709

Net cash provided by discontinued operating activities

7,769

30,321

Net cash provided by operating activities

64,785

75,815

105,030

Cash flows from investing activities:

Payments for property, plant, and equipment

(28,622

)

(30,621

)

(35,255

)

Acquisitions, net of cash acquired

(23,720

)

Payments for plant turnaround costs

(1,478

)

(5,677

)

(1,893

)

Proceeds from sale of property, plant, and equipment

25,154

20,660

11,483

Proceeds from involuntary conversion of property, plant and equipment

7,550

5,031

Net cash provided by (used in) continuing investing activities

2,604

(34,327

)

(25,665

)

Net cash provided by (used in) discontinued investing activities

209,155

173,287

Net cash provided by (used in) investing activities

2,604

174,828

147,622

Cash flows from financing activities:

Payments of long-term debt and finance lease obligations

(338,199

)

(729,514

)

(559,201

)

Proceeds from long-term debt

282,019

638,000

399,000

Proceeds from issuance of common units, net of issuance related costs

(289

)

(118

)

Deemed contribution from (distribution to) Martin Resource Management

(12,070

)

Excess purchase price over carrying value of acquired assets

(102,393

)

(26

)

Purchase of treasury units

(9

)

(392

)

(273

)

Payments of debt issuance costs

(3,781

)

(4,406

)

(1,312

)

Cash distributions paid

(5,317

)

(49,093

)

(78,441

)

Net cash used in financing activities

(65,287

)

(248,087

)

(252,441

)

Net increase in cash

2,102

2,556

211

Cash at beginning of year

2,856

300

89

Cash at end of year

$

4,958

$

2,856

$

300

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 Years Ended December 31, 2020 and 2019

Year Ended December 31,

Variance

Percent

Change

2020

2019

(In thousands)

Revenues:

Services

$

87,661

$

93,980

$

(6,319

)

(7)%

Products

103,380

122,333

(18,953

)

(15)%

Total revenues

191,041

216,313

(25,272

)

(12)%

Cost of products sold

87,495

107,081

(19,586

)

(18)%

Operating expenses

50,421

53,279

(2,858

)

(5)%

Selling, general and administrative expenses

6,159

5,997

162

3%

Depreciation and amortization

29,489

30,952

(1,463

)

(5)%

17,477

19,004

(1,527

)

(8)%

Other operating income (loss), net

6,429

(1,334

)

7,763

582%

Gain on involuntary conversion of property, plant and equipment

63

63

Operating income

$

23,969

$

17,670

$

6,299

36%

Shore-based throughput volumes (guaranteed minimum) (gallons)

80,000

80,000

—%

Smackover refinery throughput volumes (guaranteed minimum BBL per day)

6,500

6,500

—%

Transportation Segment

Comparative Results of Operations for the Years Ended December 31, 2020 and 2019

Year Ended December 31,

Variance

Percent

Change

2020

2019

(In thousands)

Revenues

$

150,285

$

183,740

$

(33,455

)

(18)%

Operating expenses

122,064

141,713

(19,649

)

(14)%

Selling, general and administrative expenses

8,245

8,199

46

1%

Depreciation and amortization

17,505

15,307

2,198

14%

2,471

18,521

(16,050

)

(87)%

Other operating loss, net

(690

)

(1,691

)

1,001

59%

Operating income

$

1,781

$

16,830

$

(15,049

)

(89)%

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 Years Ended December 31, 2020 and 2019

Year Ended December 31,

Variance

Percent

Change

2020

2019

(In thousands)

Revenues:

Services

$

11,659

$

11,434

$

225

2%

Products

96,361

99,906

(3,545

)

(4)%

Total revenues

108,020

111,340

(3,320

)

(3)%

Cost of products sold

62,920

71,806

(8,886

)

(12)%

Operating expenses

10,891

10,639

252

2%

Selling, general and administrative expenses

4,791

4,784

7

—%

Depreciation and amortization

12,012

11,332

680

6%

17,406

12,779

4,627

36%

Other operating income, net

6,751

1,210

5,541

458%

Gain on involuntary conversion of property, plant and equipment

4,844

4,844

Operating income

$

29,001

$

13,989

$

15,012

107%

Sulfur (long tons)

642.0

665.0

(23.0

)

(3)%

Fertilizer (long tons)

275.0

260.0

15.0

6%

Sulfur services volumes (long tons)

917.0

925.0

(8.0

)

(1)%

Natural Gas Services Segment

Comparative Results of Operations for the Years Ended December 31, 2020 and 2019

Year Ended December 31,

Variance

Percent

Change

2020

2019

(In thousands)

Products Revenues

$

247,484

$

366,502

(119,018

)

(32)%

Cost of products sold

228,345

341,800

(113,455

)

(33)%

Operating expenses

3,008

6,300

(3,292

)

(52)%

Selling, general and administrative expenses

4,013

4,739

(726

)

(15)%

Depreciation and amortization

2,456

2,469

(13

)

(1)%

9,662

11,194

(1,532

)

(14)%

Other operating income (loss), net

(2

)

16,402

(16,404

)

(100)%

Operating income

$

9,660

$

27,596

$

(17,936

)

(65)%

NGLs Volumes (barrels)

9,231

9,820

(589

)

(6)%

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 quarter and years ended December 31, 2020 and 2019, which represents EBITDA, Adjusted EBITDA and Distributable Cash Flow.

Reconciliation of EBITDA, Adjusted EBITDA, and Distributable Cash Flow

Three Months Ended

December 31,

Year Ended

December 31,

2020

2019

2020

2019

Net income (loss)

$

(2,564

)

$

6,642

$

(6,771

)

$

(174,946

)

Less: Loss from discontinued operations, net of income taxes

179,466

Income (loss) from continuing operations

(2,564

)

6,642

(6,771

)

4,520

Adjustments:

Interest expense

13,965

11,060

46,210

51,690

Income tax expense

226

328

1,736

1,900

Depreciation and amortization

15,604

15,063

61,462

60,060

EBITDA from Continuing Operations

27,231

33,093

102,637

118,170

Adjustments:

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

(9,941

)

617

(9,788

)

(13,332

)

Gain on involuntary conversion of property, plant and equipment

(384

)

(4,907

)

Gain on retirement of senior unsecured notes

(3,484

)

Loss on exchange of senior unsecured notes

301

8,817

Unrealized mark-to-market on commodity derivatives

(184

)

1,200

(460

)

671

Non-cash insurance related accruals

250

500

Lower of cost or market adjustments

226

370

633

Unit-based compensation

352

360

1,422

1,424

Transaction costs associated with acquisitions

224

Adjusted EBITDA from Continuing Operations

17,375

35,496

94,857

108,290

Adjustments:

Interest expense

(13,965

)

(11,060

)

(46,210

)

(51,690

)

Income tax expense

(226

)

(328

)

(1,736

)

(1,900

)

Amortization of deferred debt issuance costs

748

483

3,422

4,041

Amortization of debt premium

(76

)

(191

)

(306

)

Deferred income taxes

(33

)

260

1,169

1,360

Payments for plant turnaround costs

(841

)

(560

)

(1,478

)

(5,677

)

Maintenance capital expenditures

(2,256

)

(3,492

)

(10,138

)

(12,368

)

Distributable Cash Flow from Continuing Operations

$

802

$

20,723

$

39,695

$

41,750

Loss from discontinued operations, net of income taxes

$

$

$

$

(179,466

)

Adjustments:

Depreciation and amortization

8,161

EBITDA from Discontinued Operations

Gain on sale of property, plant and equipment, net

178,781

Non-cash insurance related accruals

3,213

Adjusted EBITDA from Discontinued Operations

$

$

$

$

10,689

Maintenance capital expenditures

$

$

$

$

(912

)

Distributable Cash Flow from Discontinued Operations

$

$

$

$

9,777

View source version on businesswire.com: https://www.businesswire.com/news/home/20210222005834/en/

Contacts

Sharon Taylor - Vice President & Chief Financial Officer
(877) 256-6644
ir@martinmlp.com