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Martin Midstream Partners Reports Second Quarter 2020 Financial Results and Declares Quarterly Cash Distribution

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  • Reported net loss of $2.2 million and net income of $6.6 million for the three and six months ended June 30, 2020, respectively

  • Reported adjusted EBITDA of $23.9 million and $54.9 million for the three and six months ended June 30, 2020, respectively

  • Generated distributable cash flow of $12.5 million and $30.8 million for the three and six months ended June 30, 2020, resulting in a quarterly distribution coverage ratio of 5.10 times and 6.26 times, respectively

  • As previously disclosed, exchange offer and cash tender offer early participation of $335.5 million aggregate principal amount, or 92.045% of all outstanding senior unsecured notes

  • Adjusts quarterly cash distribution to $0.005 or $0.020 per unit annually as required by the credit facility amendment dated July 8, 2020

KILGORE, Texas, July 27, 2020 (GLOBE NEWSWIRE) -- Martin Midstream Partners L.P. (Nasdaq:MMLP) (the "Partnership") today announced its financial results for the second quarter of 2020.

"We are pleased with our second quarter results as we continue to navigate through the crisis brought on by the COVID-19 pandemic," commented Ruben Martin, President and Chief Executive Officer of Martin Midstream GP LLC, the general partner of the Partnership. "Entering into the quarter we were beginning to see the negative impacts of reduced refinery utilization on our businesses. However, as expected, the performance of our fertilizer division offset a portion of the impact as sales were strong through the corn planting season. Overall we remain confident in our diversified business model during these challenging times and fully expect to meet our guidance, although the uncertainty around containment of the virus and the length of the disruption to our economy and society continues to blur our line of sight for the near future. I want to commend our team for their commitment to safe and reliable operations that protect the health of our workforce and business partners while continuing to deliver positive results.

"Finally, I would like to thank our lenders and noteholders for the support they have given the Partnership through the amendment of our revolving credit facility and the refinancing of our senior notes by the exchange offer that was launched July 9th. As previously announced, the early participation results were 92.045%, slightly below the 95.0% requirement under the Restructuring Support Agreement. However, we are optimistic the threshold percentage will be met prior to the expiration date and anticipate settling the exchange on August 12th. Although we regret the need to reduce the cash distribution due to leverage covenant conditions contained in the revolving credit facility, the Partnership’s extended debt maturity profile and improved liquidity allow us to continue to strengthen our balance sheet and reduce leverage while focusing on our long-term vision for the business."

SECOND QUARTER 2020 OPERATING RESULTS BY BUSINESS SEGMENT

TERMINALLING AND STORAGE (“T&S”)

T&S Operating Income for the three months ended June 30, 2020 and 2019 was $3.3 million and $4.4 million, respectively.

Adjusted segment EBITDA for T&S was $10.6 million and $12.3 million for the three month periods ended June 30, 2020 and 2019, respectively, reflecting reduced volumes in the lubricants business related to lower demand in the oil field and construction industries due to COVID-19, expired capital recovery fees at the Smackover Refinery and decreased fees related to a crude pipeline gathering rate adjustment.

TRANSPORTATION

Transportation Operating Income for the three months ended June 30, 2020 and 2019 was $0.6 million and $3.3 million, respectively.

Adjusted segment EBITDA for Transportation was $4.9 and $8.7 for the three months ended June 30, 2020 and 2019, respectively, reflecting lower land transportation load count and lower marine utilization 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 June 30, 2020 and 2019 was $7.4 million and $5.3 million, respectively.

Adjusted segment EBITDA for Sulfur Services was $10.8 and $8.6 for the three months ended June 30, 2020 and 2019 respectively, reflecting increased volumes in the fertilizer business slightly offset by reduced sulfur volumes due to lower refinery utilization impacted by demand destruction around COVID-19.

NATURAL GAS LIQUIDS (“NGL”)

NGL Operating Income (Loss) for the three months ended June 30, 2020 and 2019 was $1.1 million and $(3.4) million, respectively.

Adjusted segment EBITDA from continuing operations for NGL was $1.6 million and $(0.2) million for the three months ended June 30, 2020 and 2019, respectively, reflecting an increase in volumes and margins in 2020 and losses in 2019 from commodity hedging contracts related to activities in the butane optimization business.

UNALLOCATED SELLING, GENERAL AND ADMINISTRATIVE EXPENSE (“USGA”)

USGA expenses included in operating income were $4.4 million and $4.6 million for the three months ended June 30, 2020 and 2019 respectively.

USGA expenses included in adjusted EBITDA were $4.0 million and $4.3 million for the three months ended June 30, 2020 and 2019 respectively, reflecting a decrease in professional fees.

2020 FINANCIAL GUIDANCE UPDATE

The majority of our refinery services are focused on the Gulf Coast Region whose states have reopened their economies. However, the impact on refinery utilization due to demand destruction related to the current increase in COVID-19 cases remains unclear. As a result, the Partnership is not providing detailed segment guidance for 2020 but instead providing an estimated range for Adjusted EBITDA, Expansion Capital Expenditures and Maintenance Capital Expenditures.

MMLP 2020 Guidance

$ millions

Adjusted EBITDA

$95 - 107

Expansion Capital Expenditures

$10 - 131

Maintenance Capital Expenditures

$14 - 16

1 On July 9, 2020, the Partnership executed a long-term terminalling service agreement with a third-party customer that requires upgrades to a tank at our Tampa terminal. Expansion Cap Ex guidance range increased by ~$2.0 million related to those upgrades.

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 June 30, 2020, the Partnership had $181 million drawn on its $400 million revolving credit facility, an $11 million increase from March 31, 2020. Accordingly, the Partnership’s leverage ratio, as calculated under the revolving credit facility, was 4.8 times on June 30, 2020 compared to 4.7 times on March 31, 2020. The Partnership is in compliance with all debt covenants as of June 30, 2020.

QUARTERLY CASH DISTRIBUTION

The Partnership has declared a quarterly cash distribution of $0.005 per unit for the quarter ended June 30, 2020. The distribution is payable on August 14, 2020 to common unitholders of record as of the close of business on August 7, 2020. The ex-dividend date for the cash distribution is August 6, 2020.

COVID-19 RESPONSE

The Partnership initiated 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 June 30, 2020 of $2.2 million, a loss of $0.06 per limited partner unit. The Partnership had a net loss from continuing operations for the three months ended June 30, 2019 of $10.6 million, a loss of $0.27 per limited partner unit. Adjusted EBITDA from continuing operations for the three months ended June 30, 2020 was $23.9 million compared to the three months ended June 30, 2019 of $23.5 million. Distributable cash flow from continuing operations for the three months ended June 30, 2020 was $12.5 million compared to the three months ended June 30, 2019 of $6.4 million.

The Partnership had no net income from discontinued operations for the three months ended June 30, 2020 compared to a loss of $180.6 million, or $4.55 per limited partner unit for the three months ended June 30, 2019. The Partnership had no adjusted EBITDA from discontinued operations for the three months ended June 30, 2020 compared to $5.5 million for the three months ended June 30, 2019. The Partnership had no distributable cash flow from discontinued operations for the three months ended June 30, 2020 compared to $4.9 million for the three months ended June 30, 2019.

The Partnership had net income from continuing operations for the six months ended June 30, 2020 of $6.6 million, or $0.17 per limited partner unit. The Partnership had a net loss from continuing operations for the six months ended June 30, 2019 of $15.4 million, a loss of $0.39 per limited partner unit. Adjusted EBITDA from continuing operations for the six months ended June 30, 2020 was $54.9 million compared to the six months ended June 30, 2019 of $50.8 million. Distributable cash flow from continuing operations for the six months ended June 30, 2020 was $30.8 million compared to the six months ended June 30, 2019 of $12.7 million.

The Partnership had no net income from discontinued operations for the six months ended June 30, 2020 compared to a loss of $179.5 million, or $4.52 per limited partner unit for the six months ended June 30, 2019. The Partnership had no adjusted EBITDA from discontinued operations for the six months ended June 30, 2020 compared to $10.7 million for the six months ended June 30, 2019. The Partnership had no distributable cash flow from discontinued operations for the six months ended June 30, 2020 compared to $9.8 million for the six months ended June 30, 2019.

Revenues for the three months ended June 30, 2020 were $140.6 million compared to the three months ended June 30, 2019 of $187.3 million. Revenues for the six months ended June 30, 2020 were $339.5 million compared to the six months ended June 30, 2019 of $427.4 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 accompanying this announcement and 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 second quarter 2020 to the Partnership's Adjusted EBITDA for 2019 and is available at http://ml.globenewswire.com/Resource/Download/aada0f04-add2-4687-a0f4-8dd1597d80e3.

Investors' Conference Call

An investors conference call to review the second quarter results will be held on Tuesday, July 28, 2020 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 9677403. An archive of the replay will be on Martin Midstream Partners’ website at www.MMLP.com.

About Martin Midstream Partners

Martin Midstream Partners L.P. 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.

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, 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 Partnership’s ability to refinance its senior unsecured notes due February 15, 2021 prior to August 19, 2020, (iii) the Partnership’s pursuit of strategic alternatives, (iv) the effects of the continued volatility of commodity prices and the related macroeconomic and political environment, and (v) 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.

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)

June 30, 2020

December 31,
2019

(Unaudited)

(Audited)

Assets

Cash

$

52

$

2,856

Accounts and other receivables, less allowance for doubtful accounts of $516 and $532, respectively

48,517

87,254

Inventories

65,668

62,540

Due from affiliates

18,889

17,829

Other current assets

9,605

5,833

Assets held for sale

5,052

Total current assets

142,731

181,364

Property, plant and equipment, at cost

899,225

884,728

Accumulated depreciation

(493,115

)

(467,531

)

Property, plant and equipment, net

406,110

417,197

Goodwill

17,705

17,705

Right-of-use assets

24,554

23,901

Deferred income taxes, net

22,404

23,422

Other assets, net

3,475

3,567

Total assets

$

616,979

$

667,156

Liabilities and Partners’ Capital (Deficit)

Current installments of long-term debt and finance lease obligations

$

368,150

$

6,758

Trade and other accounts payable

45,785

64,802

Product exchange payables

5,133

4,322

Due to affiliates

444

1,470

Income taxes payable

498

472

Fair value of derivatives

667

Other accrued liabilities

26,496

28,789

Total current liabilities

446,506

107,280

Long-term debt, net

176,794

569,788

Finance lease obligations

405

717

Operating lease liabilities

17,081

16,656

Other long-term obligations

10,000

8,911

Total liabilities

650,786

703,352

Commitments and contingencies

Partners’ capital (deficit)

(33,807

)

(36,196

)

Total partners’ capital (deficit)

(33,807

)

(36,196

)

Total liabilities and partners' capital (deficit)

$

616,979

$

667,156


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

Three Months Ended

Six Months Ended

June 30,

June 30,

2020

2019

2020

2019

Revenues:

Terminalling and storage *

$

19,908

$

21,377

$

40,382

$

44,481

Transportation *

31,485

41,321

70,426

79,116

Sulfur services

2,914

2,858

5,829

5,717

Product sales: *

Natural gas liquids

30,299

57,398

112,510

173,872

Sulfur services

30,506

32,998

55,914

61,732

Terminalling and storage

25,526

31,371

54,460

62,438

86,331

121,767

222,884

298,042

Total revenues

140,638

187,323

339,521

427,356

Costs and expenses:

Cost of products sold: (excluding depreciation and amortization)

Natural gas liquids *

24,293

53,546

94,128

159,736

Sulfur services *

17,559

22,124

32,854

41,820

Terminalling and storage *

21,438

26,118

45,118

52,989

63,290

101,788

172,100

254,545

Expenses:

Operating expenses *

44,202

53,579

95,484

105,428

Selling, general and administrative *

9,858

10,226

20,320

20,426

Depreciation and amortization

15,343

15,087

30,582

29,988

Total costs and expenses

132,693

180,680

318,486

410,387

Other operating income (loss), net

15

(1,633

)

2,525

(2,353

)

Operating income

7,960

5,010

23,560

14,616

Other income (expense):

Interest expense, net

(9,377

)

(14,986

)

(19,302

)

(28,657

)

Gain on retirement of senior unsecured notes

3,484

Other, net

4

1

7

4

Total other expense

(9,373

)

(14,985

)

(15,811

)

(28,653

)

Net income (loss) before taxes

(1,413

)

(9,975

)

7,749

(14,037

)

Income tax expense

(790

)

(639

)

(1,137

)

(1,335

)

Income (loss) from continuing operations

(2,203

)

(10,614

)

6,612

(15,372

)

Income from discontinued operations, net of income taxes

(180,568

)

(179,466

)

Net income (loss)

(2,203

)

(191,182

)

6,612

(194,838

)

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

44

3,824

(132

)

3,897

Less (income) loss allocable to unvested restricted units

10

65

(45

)

67

Limited partners' interest in net income (loss)

$

(2,149

)

$

(187,293

)

$

6,435

$

(190,874

)

*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

Six Months Ended

June 30,

June 30,

2020

2019

2020

2019

Revenues:*

Terminalling and storage

$

15,942

$

17,477

$

31,816

$

36,449

Transportation

5,393

5,856

11,287

11,499

Product Sales

38

286

130

707

Costs and expenses:*

Cost of products sold: (excluding depreciation and amortization)

Sulfur services

2,554

2,884

5,321

5,458

Terminalling and storage

4,249

7,203

10,026

13,112

Expenses:

Operating expenses

19,440

24,407

41,211

46,943

Selling, general and administrative

8,055

8,558

16,367

17,093

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

Three Months Ended

Six Months Ended

June 30,

June 30,

2020

2019

2020

2019

Allocation of net income (loss) attributable to:

Limited partner interest:

Continuing operations

$

(2,149

)

$

(10,398

)

$

6,435

$

(15,060

)

Discontinued operations

(176,895

)

(175,814

)

$

(2,149

)

$

(187,293

)

$

6,435

$

(190,874

)

General partner interest:

Continuing operations

$

(44

)

$

(212

)

$

132

$

(307

)

Discontinued operations

(3,612

)

(3,590

)

$

(44

)

$

(3,824

)

$

132

$

(3,897

)

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

Basic:

Continuing operations

$

(0.06

)

$

(0.27

)

$

0.17

$

(0.39

)

Discontinued operations

(4.55

)

(4.52

)

$

(0.06

)

$

(4.82

)

$

0.17

$

(4.91

)

Weighted average limited partner units - basic

38,662

38,871

38,651

38,912

Diluted:

Continuing operations

$

(0.06

)

$

(0.27

)

$

0.17

$

(0.39

)

Discontinued operations

(4.55

)

(4.52

)

$

(0.06

)

$

(4.82

)

$

0.17

$

(4.91

)

Weighted average limited partner units - diluted

38,662

38,871

38,652

38,912



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

Partners’ Capital (Deficit)

Parent Net
Investment

Common Limited

General
Partner
Amount

Units

Amount

Total

Balances - January 1, 2019

$

23,720

39,032,237

$

258,085

$

6,627

$

288,432

Net loss

(190,941

)

(3,897

)

(194,838

)

Issuance of common units, net

(259

)

(259

)

Issuance of restricted units

16,944

Forfeiture of restricted units

(154,288

)

Cash distributions

(28,851

)

(589

)

(29,440

)

Unit-based compensation

715

715

Purchase of treasury units

(31,504

)

(392

)

(392

)

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

)

Balances - June 30, 2019

$

38,863,389

$

(39,255

)

$

2,141

$

(37,114

)

Balances - January 1, 2020

$

38,863,389

$

(38,342

)

$

2,146

$

(36,196

)

Net income

6,480

132

6,612

Issuance of restricted units

81,000

Forfeiture of restricted units

(84,134

)

Cash distributions

(4,825

)

(98

)

(4,923

)

Unit-based compensation

709

709

Purchase of treasury units

(7,748

)

(9

)

(9

)

Balances - June 30, 2020

$

38,852,507

$

(35,987

)

$

2,180

$

(33,807

)



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

Six Months Ended

June 30,

2020

2019

Cash flows from operating activities:

Net income (loss)

$

6,612

$

(194,838

)

Less: Loss from discontinued operations, net of income taxes

179,466

Net income (loss) from continuing operations

6,612

(15,372

)

Adjustments to reconcile net loss to net cash provided by operating activities:

Depreciation and amortization

30,582

29,988

Amortization and write-off of deferred debt issuance costs

991

2,478

Amortization of premium on notes payable

(153

)

(153

)

Deferred income tax expense

1,018

856

Loss on sale of property, plant and equipment, net

175

2,353

Gain on retirement of senior unsecured notes

(3,484

)

Derivative (income) loss

(1,463

)

2,322

Net cash paid for commodity derivatives

796

(249

)

Unit-based compensation

709

715

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

Accounts and other receivables

37,180

28,073

Product exchange receivables

59

Inventories

(3,128

)

3,044

Due from affiliates

(1,060

)

(15,947

)

Other current assets

(5,547

)

(3,061

)

Trade and other accounts payable

(16,502

)

(2,800

)

Product exchange payables

811

(4,386

)

Due to affiliates

(1,026

)

428

Income taxes payable

26

131

Other accrued liabilities

(2,452

)

(3,043

)

Change in other non-current assets and liabilities

541

(693

)

Net cash provided by continuing operating activities

44,626

24,743

Net cash provided by discontinued operating activities

7,770

Net cash provided by operating activities

44,626

32,513

Cash flows from investing activities:

Payments for property, plant and equipment

(19,053

)

(14,102

)

Acquisitions

(23,720

)

Payments for plant turnaround costs

(231

)

(4,742

)

Proceeds from involuntary conversion of property, plant and equipment

1,768

Proceeds from sale of property, plant and equipment

4,369

659

Net cash used in continuing investing activities

(13,147

)

(41,905

)

Net cash provided by discontinued investing activities

209,155

Net cash provided by (used in) investing activities

(13,147

)

167,250

Cash flows from financing activities:

Payments of long-term debt and finance lease obligations

(160,082

)

(362,672

)

Proceeds from long-term debt

131,000

298,000

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

(259

)

Purchase of treasury units

(9

)

(392

)

Payment of debt issuance costs

(269

)

(386

)

Excess purchase price over carrying value of acquired assets

(102,393

)

Cash distributions paid

(4,923

)

(29,440

)

Net cash used in financing activities

(34,283

)

(197,542

)

Net increase (decrease) in cash

(2,804

)

2,221

Cash at beginning of period

2,856

300

Cash at end of period

$

52

$

2,521

Non-cash additions to property, plant and equipment

$

1,276

$

2,248



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 June 30, 2020 and 2019

Three Months Ended
June 30,

Variance

Percent
Change

2020

2019

(In thousands, except BBL per day)

Revenues:

Services

$

21,436

$

22,966

$

(1,530

)

(7

)

%

Products

25,540

31,385

(5,845

)

(19

)

%

Total revenues

46,976

54,351

(7,375

)

(14

)

%

Cost of products sold

22,697

27,497

(4,800

)

(17

)

%

Operating expenses

12,254

13,257

(1,003

)

(8

)

%

Selling, general and administrative expenses

1,398

1,378

20

1

%

Depreciation and amortization

7,272

7,826

(554

)

(7

)

%

3,355

4,393

(1,038

)

(24

)

%

Other operating income (loss), net

(3

)

7

(10

)

(143

)

%

Operating income

$

3,352

$

4,400

$

(1,048

)

(24

)

%

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

20,000

20,000

%

Smackover refinery throughput volumes (guaranteed minimum BBL per day)

6,500

6,500

%

Comparative Results of Operations for the Six Months Ended June 30, 2020 and 2019

Six Months Ended June
30,

Variance

Percent
Change

2020

2019

(In thousands, except BBL per day)

Revenues:

Services

$

43,603

$

47,766

$

(4,163

)

(9

)

%

Products

54,507

62,477

(7,970

)

(13

)

%

Total revenues

98,110

110,243

(12,133

)

(11

)

%

Cost of products sold

47,685

55,774

(8,089

)

(15

)

%

Operating expenses

25,205

26,610

(1,405

)

(5

)

%

Selling, general and administrative expenses

3,057

2,727

330

12

%

Depreciation and amortization

14,728

15,663

(935

)

(6

)

%

7,435

9,469

(2,034

)

(21

)

%

Other operating income (loss), net

(3,054

)

17

(3,071

)

(18,065

)

%

Operating income

$

4,381

$

9,486

$

(5,105

)

(54

)

%

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

40,000

40,000

%

Smackover refinery throughput volumes (guaranteed minimum) (BBL per day)

6,500

6,500

%

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

Transportation Segment

Comparative Results of Operations for the Three Months Ended June 30, 2020 and 2019

Three Months Ended
June 30,

Variance

Percent
Change

2020

2019

(In thousands)

Revenues

$

35,259

$

47,233

$

(11,974

)

(25

)

%

Operating expenses

28,331

36,512

(8,181

)

(22

)

%

Selling, general and administrative expenses

2,058

1,980

78

4

%

Depreciation and amortization

4,328

3,778

550

15

%

542

4,963

(4,421

)

(89

)

%

Other operating income (loss), net

13

(1,649

)

1,662

101

%

Operating income

$

555

$

3,314

$

(2,759

)

(83

)

%

Comparative Results of Operations for the Six Months Ended June 30, 2020 and 2019

Six Months Ended
June 30,

Variance

Percent
Change

2020

2019

(In thousands)

Revenues

$

80,433

$

92,419

$

(11,986

)

(13

)

%

Operating expenses

63,493

71,777

(8,284

)

(12

)

%

Selling, general and administrative expenses

4,193

4,065

128

3

%

Depreciation and amortization

8,608

7,348

1,260

17

%

$

4,139

$

9,229

$

(5,090

)

(55

)

%

Other operating loss, net

(1,195

)

(2,385

)

1,190

50

%

Operating income

$

2,944

$

6,844

$

(3,900

)

(57

)

%

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 June 30, 2020 and 2019

Three Months Ended
June 30,

Variance

Percent
Change

2020

2019

(In thousands)

Revenues:

Services

$

2,914

$

2,858

$

56

2

%

Products

30,506

32,998

(2,492

)

(8

)

%

Total revenues

33,420

35,856

(2,436

)

(7

)

%

Cost of products sold

18,601

23,676

(5,075

)

(21

)

%

Operating expenses

3,142

2,789

353

13

%

Selling, general and administrative expenses

1,166

1,251

(85

)

(7

)

%

Depreciation and amortization

3,131

2,854

277

10

%

7,380

5,286

2,094

40

%

Other operating income (loss), net

5

(1

)

6

600

%

Operating income

$

7,385

$

5,285

$

2,100

40

%

Sulfur (long tons)

166

182

(16

)

(9

)

%

Fertilizer (long tons)

91

88

3

3

%

Total sulfur services volumes (long tons)

257

270

(13

)

(5

)

%

Comparative Results of Operations for the Six Months Ended June 30, 2020 and 2019

Six Months Ended June
30,

Variance

Percent
Change

2020

2019

(In thousands)

Revenues:

Services

$

5,829

$

5,717

$

112

2

%

Products

55,927

61,732

(5,805

)

(9

)

%

Total revenues

61,756

67,449

(5,693

)

(8

)

%

Cost of products sold

35,405

45,242

(9,837

)

(22

)

%

Operating expenses

6,052

4,952

1,100

22

%

Selling, general and administrative expenses

2,369

2,429

(60

)

(2

)

%

Depreciation and amortization

6,025

5,722

303

5

%

11,905

9,104

2,801

31

%

Other operating income (loss), net

6,776

(1

)

6,777

677,700

%

Operating income

$

18,681

$

9,103

$

9,578

105

%

Sulfur (long tons)

349

291

58

20

%

Fertilizer (long tons)

165

155

10

6

%

Total sulfur services volumes (long tons)

514

446

68

15

%

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

Natural Gas Liquids Segment

Comparative Results of Operations for the Three Months Ended June 30, 2020 and 2019

Three Months Ended
June 30,

Variance

Percent
Change

2020

2019

(In thousands)

Products Revenues

$

30,300

$

57,398

$

(27,098

)

(47

)

%

Cost of products sold

26,579

57,392

(30,813

)

(54

)

%

Operating expenses

1,150

1,680

(530

)

(32

)

%

Selling, general and administrative expenses

930

1,097

(167

)

(15

)

%

Depreciation and amortization

612

629

(17

)

(3

)

%

1,029

(3,400

)

4,429

130

%

Other operating income (loss), net

10

(10

)

(100

)

%

Operating income (loss)

$

1,029

$

(3,390

)

$

4,419

130

%

NGL sales volumes (Bbls)

1,698

1,457

241

17

%

Comparative Results of Operations for the Six Months Ended June 30, 2020 and 2019

Six Months Ended June
30,

Variance

Percent
Change

2020

2019

(In thousands)

Products Revenues

$

112,515

$

173,872

$

(61,357

)

(35

)

%

Cost of products sold

100,839

168,701

(67,862

)

(40

)

%

Operating expenses

2,089

3,386

(1,297

)

(38

)

%

Selling, general and administrative expenses

2,077

2,197

(120

)

(5

)

%

Depreciation and amortization

1,221

1,255

(34

)

(3

)

%

6,289

(1,667

)

7,956

477

%

Other operating income (loss), net

(2

)

16

(18

)

(113

)

%

Operating income (loss)

$

6,287

$

(1,651

)

$

7,938

481

%

NGL sales volumes (Bbls)

4,143

4,364

(221

)

(5

)

%

Unallocated Selling, General and Administrative Expenses

Comparative Results of Operations for the Three and Six Months Ended June 30, 2020 and 2019

Three Months Ended
June 30,

Variance

Percent
Change

Six Months Ended
June 30,

Variance

Percent
Change

2020

2019

2020

2019

(In thousands)

(In thousands)

Unallocated selling, general and administrative expenses

$

4,361

$

4,599

$

(238

)

(5

)

%

$

8,733

$

9,166

$

(433

)

(5

)

%



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 and six months ended June 30, 2020 and 2019.

Reconciliation of EBITDA, Adjusted EBITDA, and Distributable Cash Flow

Three Months Ended

Six Months Ended

June 30,

June 30,

2020

2019

2020

2019

(in thousands)

(in thousands)

Net income (loss)

$

(2,203

)

$

(191,182

)

$

6,612

$

(194,838

)

Less: Loss from discontinued operations, net of income taxes

180,568

179,466

Income (loss) from continuing operations

(2,203

)

(10,614

)

6,612

(15,372

)

Adjustments:

Interest expense, net

9,377

14,986

19,302

28,657

Income tax expense

790

639

1,137

1,335

Depreciation and amortization

15,343

15,087

30,582

29,988

EBITDA from Continuing Operations

23,307

20,098

57,633

44,608

Adjustments:

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

(15

)

1,633

175

2,353

Unrealized mark-to-market on commodity derivatives

2,220

(669

)

2,073

Transaction costs associated with acquisitions

40

224

Non-cash insurance related accruals

250

500

250

500

Lower of cost or market adjustments

303

335

303

Gain on repurchase of senior unsecured notes

(3,484

)

Unit-based compensation

363

363

709

715

Adjusted EBITDA from Continuing Operations

23,905

25,157

54,949

50,776

Adjustments:

Interest expense, net

(9,377

)

(14,986

)

(19,302

)

(28,657

)

Income tax expense

(790

)

(639

)

(1,137

)

(1,335

)

Amortization of debt premium

(76

)

(76

)

(153

)

(153

)

Amortization of deferred debt issuance costs

499

1,583

991

2,478

Deferred income tax expense

732

487

1,018

856

Payments for plant turnaround costs

(81

)

(915

)

(231

)

(4,742

)

Maintenance capital expenditures

(2,280

)

(2,628

)

(5,306

)

(6,487

)

Distributable Cash Flow from Continuing Operations

$

12,532

$

7,983

$

30,829

$

12,736

Loss from discontinued operations, net of income taxes

$

$

(180,568

)

$

$

(179,466

)

Adjustments:

Depreciation and amortization

4,080

8,161

EBITDA from Discontinued Operations

(176,488

)

(171,305

)

Loss on sale of property, plant and equipment, net

178,781

178,781

Non-cash insurance related accruals

3,213

3,213

EBITDA and Adjusted EBITDA from Discontinued Operations

5,506

10,689

Maintenance capital expenditures

(576

)

(912

)

Distributable Cash Flow from Discontinued Operations

$

$

4,930

$

$

9,777