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Martin Midstream Partners Reports Second Quarter 2021 Financial Results and Declares Quarterly Cash Distribution

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·16 min read
In this article:
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  • 2021 financial performance in line with annual guidance

  • Reported net loss of $6.6 million and $4.1 million for the three and six months ended June 30, 2021, respectively

  • Reported adjusted EBITDA of $22.5 million and $53.4 million for the three and six months ended June 30, 2021, respectively

  • Generated distributable cash flow of $7.3 and $20.1 million for the three and six months ended June 30, 2021, respectively

  • Declares quarterly distribution of $0.005 or $0.02 per unit annually

  • Announces Revolving Credit Facility Amendment

KILGORE, Texas, July 22, 2021--(BUSINESS WIRE)--Martin Midstream Partners L.P. (Nasdaq:MMLP) (the "Partnership") today announced its financial results for the second quarter of 2021.

"For the second quarter of 2021, the Partnership had a solid performance in line with our annual projected cash flows of between $95 million to $102 million," stated Bob Bondurant, President and Chief Executive Officer of Martin Midstream GP LLC, the general partner of the Partnership. "As the country returns to a more open economy and refinery utilization increases, we have seen heightened demand for our services particularly within the land transportation and lubricants businesses. However, the impact of COVID-19 is still reflected in a reduction in sulfur service volumes and lower marine day rates year over year. As expected, marine utilization has increased from last quarter and we anticipate the continued economic recovery will drive demand upward allowing for the further utilization of our asset base."

"Looking to the third quarter, which is seasonally our weakest due to the cyclical nature of both the fertilizer and butane businesses, we amended our revolving credit facility in response to rising commodity prices and the continued impact of COVID-19 on the Partnership’s trailing twelve month cash flows. I’d like thank our lenders for recognizing our ongoing commitment to capital discipline through their support of the amendment."

SECOND QUARTER 2021 OPERATING RESULTS BY BUSINESS SEGMENT

TERMINALLING AND STORAGE ("T&S")

T&S Operating Income for the three months ended June 30, 2021 and 2020 was $3.7 million and $3.3 million, respectively.

Adjusted segment EBITDA for T&S was $10.6 million for each of the three month periods ended June 30, 2021 and 2020, reflecting increased volumes on packaged lubricants products, offset by expired capital recovery fees at the Smackover Refinery.

TRANSPORTATION

Transportation Operating Income for the three months ended June 30, 2021 and 2020 was $0.7 million and $0.6 million, respectively.

Adjusted segment EBITDA for Transportation was $5.0 million and $4.9 million for the three months ended June 30, 2021 and 2020, respectively, reflecting higher land transportation load count and rates, offset by lower marine day rates coupled with a reduction in marine equipment.

SULFUR SERVICES

Sulfur Services Operating Income for the three months ended June 30, 2021 and 2020 was $6.3 million and $7.4 million, respectively.

Adjusted segment EBITDA for Sulfur Services was $8.9 million and $10.8 million for the three months ended June 30, 2021 and 2020, respectively, reflecting lower refinery utilization volumes during the second quarter of 2021 as a result of continued effects of COVID-19.

NATURAL GAS LIQUIDS ("NGL")

NGL Operating Income for the three months ended June 30, 2021 and 2020 was $0.7 million and $1.1 million, respectively.

Adjusted segment EBITDA for NGL was $1.7 million and $1.6 million for the three months ended June 30, 2021 and 2020, respectively, primarily reflecting increased margins in our butane optimization business, offset by a reduction in NGL margins due to rising commodity prices.

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

USGA expenses included in operating income for the three months ended June 30, 2021 and 2020 were $3.8 million and $4.4 million, respectively.

USGA expenses included in adjusted EBITDA for the three months ended June 30, 2021 and 2020 were $3.7 million and $4.0 million, respectively, primarily reflecting a reduction in overhead allocated from Martin Resource Management.

LIQUIDITY

At June 30, 2021, the Partnership had $180 million drawn on its $300 million revolving credit facility, an increase of $4 million from March 31, 2021. The Partnership’s leverage ratio, as calculated under the revolving credit facility, was 5.3 times and 5.4 times on June 30, 2021 and March 31, 2021, respectively. The Partnership is in compliance with all debt covenants as of June 30, 2021 and March 31, 2021.

REVOLVING CREDIT FACILITY AMENDMENT

The Partnership announced today the amendment of its revolving credit facility effective July 16, 2021. The amendment revises certain financial covenant ratios and reduces the aggregate amount of commitments from $300 million to $275 million, among other things.

Royal Bank of Canada serves as administrative agent and collateral agent for the facility. Baker Botts L.L.P acted as legal counsel to the Partnership.

QUARTERLY CASH DISTRIBUTION

The Partnership has declared a quarterly cash distribution of $0.005 per unit for the quarter ended June 30, 2021. The distribution is payable on August 13, 2021 to common unitholders of record as of the close of business on August 6, 2021. The ex-dividend date for the cash distribution is August 5, 2021.

QUALIFIED NOTICE TO NOMINEES

This release serves as qualified notice to nominees as provided for under Treasury Regulation Section 1.1446-4(b)(4) and (d). Please note that 100 percent of the Partnership's distributions to foreign investors are attributable to income that is effectively connected with a United States trade or business. Accordingly, all of the Partnership's distributions to foreign investors are subject to federal income tax withholding at the highest effective tax rate for individuals or corporations, as applicable. Nominees, and not the Partnership, are treated as withholding agents responsible for withholding on the distributions received by them on behalf of foreign investors.

COVID-19 RESPONSE

The Partnership continues to evaluate protocols in response to the COVID-19 pandemic, including the impact of variants of COVID-19, such as the Delta variant. Where possible, employee work from home initiatives remain and travel restrictions have been lifted. Employees are encouraged to continue to exercise safety measures to protect the welfare of each other and the communities they serve.

RESULTS OF OPERATIONS

The Partnership had a net loss for the three months ended June 30, 2021 of $6.6 million, a loss of $0.17 per limited partner unit. The Partnership had a net loss for the three months ended June 30, 2020 of $2.2 million, a loss of $0.06 per limited partner unit. Adjusted EBITDA for the three months ended June 30, 2021 was $22.5 million compared to the three months ended June 30, 2020 of $23.9 million. Distributable cash flow for the three months ended June 30, 2021 was $7.3 million compared to the three months ended June 30, 2020 of $12.5 million.

The Partnership had a net loss for the six months ended June 30, 2021 of $4.1 million, a loss of $0.10 per limited partner unit. The Partnership had net income for the six months ended June 30, 2020 of $6.6 million, or $0.17 per limited partner unit. Adjusted EBITDA for the six months ended June 30, 2021 was $53.4 million compared to the six months ended June 30, 2020 of $54.9 million. Distributable cash flow for the six months ended June 30, 2021 was $20.1 million compared to the six months ended June 30, 2020 of $30.8 million.

Revenues for the three months ended June 30, 2021 were $184.3 million compared to the three months ended June 30, 2020 of $140.6 million. Revenues for the six months ended June 30, 2021 were $385.3 million compared to the six months ended June 30, 2020 of $339.5 million.

EBITDA, adjusted EBITDA, distributable cash flow and adjusted free cash flow 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, Distributable Cash Flow and Adjusted Free 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 second quarter 2021 to the Partnership's Adjusted EBITDA for the second quarter 2020.

Investors' Conference Call

Date: Friday, July 23, 2021
Time: 8:00 a.m. CT (please dial in by 7:55 a.m.)
Dial In #: (833) 900-2251
Conference ID: 1691938

Replay Dial In # (800) 585-8367 – Conference ID: 1691938

A webcast of the conference call will also be available by visiting the Events and Presentations section under Investor Relations on our website at www.MMLP.com.

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.

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, (3) distributable cash flow and (4) adjusted free 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. The Partnership defines Adjusted EBITDA as EBITDA before unit-based compensation expenses, gains and losses on the disposition of property, plant and equipment, impairment and other similar non-cash adjustments. 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. The Partnership defines Distributable Cash Flow as Adjusted EBITDA less cash paid for interest, cash paid for income taxes, maintenance capital expenditures, and plant turnaround costs. 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.

Adjusted Free Cash Flow. Adjusted free cash flow is defined as distributable cash flow less growth capital expenditures and principal payments under finance lease obligations. Adjusted free cash flow is a significant performance measure used by the Partnership's management and by external users of our financial statements and represents how much cash flow a business generates during a specified time period after accounting for all capital expenditures, including expenditures for growth and maintenance capital projects. The Partnership believes that adjusted free cash flow is important to investors, lenders, commercial banks and research analysts since it reflects the amount of cash available for reducing debt, investing in additional capital projects, paying distributions, and similar matters. The Partnership's calculation of adjusted free cash flow may or may not be comparable to similarly titled measures used by other entities.

EBITDA, adjusted EBITDA, distributable cash flow, and adjusted free 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.

MMLP-F

MARTIN MIDSTREAM PARTNERS L.P.

CONSOLIDATED AND CONDENSED BALANCE SHEETS

(Dollars in thousands)

June 30, 2021

December 31, 2020

(Unaudited)

(Audited)

Assets

Cash

$

681

$

4,958

Accounts and other receivables, less allowance for doubtful accounts of $225 and $261, respectively

55,051

52,748

Inventories

71,358

54,122

Due from affiliates

20,619

14,807

Other current assets

6,913

8,991

Total current assets

154,622

135,626

Property, plant and equipment, at cost

891,746

889,108

Accumulated depreciation

(530,624

)

(509,237

)

Property, plant and equipment, net

361,122

379,871

Goodwill

16,823

16,823

Right-of-use assets

19,955

22,260

Deferred income taxes, net

21,495

22,253

Other assets, net

2,862

2,805

Total assets

$

576,879

$

579,638

Liabilities and Partners’ Capital (Deficit)

Current installments of long-term debt and finance lease obligations

$

236

$

31,497

Trade and other accounts payable

55,453

51,900

Product exchange payables

700

373

Due to affiliates

1,939

435

Income taxes payable

308

556

Fair value of derivatives

412

207

Other accrued liabilities

29,394

34,407

Total current liabilities

88,442

119,375

Long-term debt, net

517,311

484,597

Finance lease obligations

169

289

Operating lease liabilities

13,423

15,181

Other long-term obligations

8,631

7,067

Total liabilities

627,976

626,509

Commitments and contingencies

Partners’ capital (deficit)

(51,097

)

(46,871

)

Total partners’ capital (deficit)

(51,097

)

(46,871

)

Total liabilities and partners' capital (deficit)

$

576,879

$

579,638

MARTIN MIDSTREAM PARTNERS L.P.

CONSOLIDATED AND CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)

(Dollars in thousands, except per unit amounts)

Three Months Ended

Six Months Ended

June 30,

June 30,

2021

2020

2021

2020

Revenues:

Terminalling and storage *

$

18,702

$

19,908

$

37,080

$

40,382

Transportation *

34,926

31,485

64,741

70,426

Sulfur services

2,949

2,914

5,899

5,829

Product sales: *

Natural gas liquids

67,232

30,299

165,317

112,510

Sulfur services

35,337

30,506

67,222

55,914

Terminalling and storage

25,147

25,526

45,008

54,460

127,716

86,331

277,547

222,884

Total revenues

184,293

140,638

385,267

339,521

Costs and expenses:

Cost of products sold: (excluding depreciation and amortization)

Natural gas liquids *

61,590

24,293

140,725

94,128

Sulfur services *

24,177

17,559

45,391

32,854

Terminalling and storage *

20,226

21,438

34,728

45,118

105,993

63,290

220,844

172,100

Expenses:

Operating expenses *

47,313

44,202

91,947

95,484

Selling, general and administrative *

8,960

9,858

19,569

20,320

Depreciation and amortization

14,483

15,343

28,917

30,582

Total costs and expenses

176,749

132,693

361,277

318,486

Other operating income (loss), net

89

15

(671

)

2,525

Operating income

7,633

7,960

23,319

23,560

Other income (expense):

Interest expense, net

(13,309

)

(9,377

)

(26,262

)

(19,302

)

Gain on retirement of senior unsecured notes

3,484

Other, net

(1

)

4

(1

)

7

Total other expense

(13,310

)

(9,373

)

(26,263

)

(15,811

)

Net income (loss) before taxes

(5,677

)

(1,413

)

(2,944

)

7,749

Income tax expense

(935

)

(790

)

(1,157

)

(1,137

)

Net income (loss)

(6,612

)

(2,203

)

(4,101

)

6,612

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

132

44

82

(132

)

Less (income) loss allocable to unvested restricted units

20

10

10

(45

)

Limited partners' interest in net income (loss)

$

(6,460

)

$

(2,149

)

$

(4,009

)

$

Net income (loss) per unit attributable to limited partners - basic

$

(0.17

)

$

(0.06

)

$

(0.10

)

...

$

0.17

Net income (loss) per unit attributable to limited partners - diluted

$

(0.17

)

$

(0.06

)

$

(0.10

)

$

0.17

Weighted average limited partner units - basic

38,687,874

38,661,852

38,690,228

38,651,357

Weighted average limited partner units - diluted

38,687,874

38,661,852

38,690,228

38,651,897

*Related Party Transactions Shown Below

MARTIN MIDSTREAM PARTNERS L.P.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(Dollars in thousands, except per unit amounts)

*Related Party Transactions Included Above

Three Months Ended

Six Months Ended

June 30,

June 30,

2021

2020

2021

2020

Revenues:*

Terminalling and storage

$

15,569

$

15,942

$

30,875

$

31,816

Transportation

4,889

5,393

8,899

11,287

Product Sales

71

38

185

130

Costs and expenses:*

Cost of products sold: (excluding depreciation and amortization)

Sulfur services

2,403

2,554

4,938

5,321

Terminalling and storage

7,036

4,249

11,604

10,026

Expenses:

Operating expenses

19,590

19,440

37,958

41,211

Selling, general and administrative

7,285

8,055

15,965

16,367

MARTIN MIDSTREAM PARTNERS L.P.

CONSOLIDATED AND CONDENSED STATEMENTS OF CAPITAL (DEFICIT)

(Unaudited)

(Dollars in thousands)

Partners’ Capital (Deficit)

Common Limited

General
Partner
Amount

Units

Amount

Total

Balances - January 1, 2020

38,863,389

$

(38,342

)

$

2,146

$

(36,196

)

Net income

6,480

132

6,612

Issuance of common units, net

Issuance of restricted units

81,000

Forfeiture of restricted units

(84,134

)

General partner contribution

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

)

Balances - January 1, 2021

38,851,174

$

(48,776

)

$

1,905

$

(46,871

)

Net loss

(4,019

)

(82

)

(4,101

)

Issuance of restricted units

42,168

Forfeiture of restricted units

(83,436

)

Cash distributions

(388

)

(8

)

(396

)

Unit-based compensation

288

288

Purchase of treasury units

(7,156

)

(17

)

(17

)

Balances - June 30, 2021

38,802,750

$

(52,912

)

$

1,815

$

(51,097

)

MARTIN MIDSTREAM PARTNERS L.P.

CONSOLIDATED AND CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)

(Dollars in thousands)

Six Months Ended

June 30,

2021

2020

Cash flows from operating activities:

Net income (loss)

$

(4,101

)

$

6,612

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

Depreciation and amortization

28,917

30,582

Amortization of deferred debt issuance costs

1,521

991

Amortization of premium on notes payable

(153

)

Deferred income tax expense

758

1,018

Loss on sale of property, plant and equipment, net

671

175

Gain on retirement of senior unsecured notes

(3,484

)

Derivative (income) loss

884

(1,463

)

Net cash received (paid) for commodity derivatives

(679

)

796

Unit-based compensation

288

709

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

Accounts and other receivables

(2,303

)

37,180

Inventories

(17,572

)

(3,128

)

Due from affiliates

(5,812

)

(1,060

)

Other current assets

1,435

(5,547

)

Trade and other accounts payable

3,335

(16,502

)

Product exchange payables

327

811

Due to affiliates

1,504

(1,026

)

Income taxes payable

(248

)

26

Other accrued liabilities

(3,053

)

(2,452

)

Change in other non-current assets and liabilities

213

541

Net cash provided by operating activities

6,085

44,626

Cash flows from investing activities:

Payments for property, plant and equipment

(8,200

)

(19,053

)

Payments for plant turnaround costs

(1,694

)

(231

)

Proceeds from involuntary conversion of property, plant and equipment

4,369

Proceeds from sale of property, plant and equipment

133

1,768

Net cash used in investing activities

(9,761

)

(13,147

)

Cash flows from financing activities:

Payments of long-term debt

(144,790

)

(156,860

)

Payments under finance lease obligations

(2,591

)

(3,222

)

Proceeds from long-term debt

147,500

131,000

Purchase of treasury units

(17

)

(9

)

Payment of debt issuance costs

(307

)

(269

)

Cash distributions paid

(396

)

(4,923

)

Net cash used in financing activities

(601

)

(34,283

)

Net decrease in cash

(4,277

)

(2,804

)

Cash at beginning of period

4,958

2,856

Cash at end of period

$

681

$

52

Non-cash additions to property, plant and equipment

$

686

$

1,276

MARTIN MIDSTREAM PARTNERS L.P.

SEGMENT OPERATING INCOME

(Unaudited)

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

Terminalling and Storage Segment

Comparative Results of Operations for the Three Months Ended June 30, 2021 and 2020

Three Months Ended
June 30,

Variance

Percent
Change

2021

2020

(In thousands, except BBL per day)

Revenues:

Services

$

20,358

$

21,436

$

(1,078

)

(5

)%

Products

25,166

25,540

(374

)

(1

)%

Total revenues

45,524

46,976

(1,452

)

(3

)%

Cost of products sold

20,759

22,697

(1,938

)

(9

)%

Operating expenses

12,664

12,254

410

3

%

Selling, general and administrative expenses

1,468

1,398

70

5

%

Depreciation and amortization

6,996

7,272

(276

)

(4

)%

3,637

3,355

282

8

%

Other operating income (loss), net

61

(3

)

64

2,133

%

Operating income

$

3,698

$

3,352

$

346

10

%

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, 2021 and 2020

Six Months Ended
June 30,

Variance

Percent
Change

2021

2020

(In thousands, except BBL per day)

Revenues:

Services

$

40,317

$

43,603

$

(3,286

)

(8

)%

Products

45,041

54,507

(9,466

)

(17

)%

Total revenues

85,358

98,110

(12,752

)

(13

)%

Cost of products sold

35,700

47,685

(11,985

)

(25

)%

Operating expenses

25,457

25,205

252

1

%

Selling, general and administrative expenses

2,967

3,057

(90

)

(3

)%

Depreciation and amortization

14,101

14,728

(627

)

(4

)%

7,133

7,435

(302

)

(4

)%

Other operating loss, net

(5

)

(3,054

)

3,049

100

%

Operating income

$

7,128

$

4,381

$

2,747

63

%

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

40,000

40,000

%

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

6,500

6,500

%

Transportation Segment

Comparative Results of Operations for the Three Months Ended June 30, 2021 and 2020

Three Months Ended
June 30,

Variance

Percent
Change

2021

2020

(In thousands)

Revenues

$

38,349

$

35,259

$

3,090

9

%

Operating expenses

31,485

28,331

3,154

11

%

Selling, general and administrative expenses

1,858

2,058

(200

)

(10

)%

Depreciation and amortization

4,331

4,328

3

%

675

542

133

25

%

Other operating income, net

21

13

8

62

%

Operating income

$

696

$

555

$

141

25

%

Comparative Results of Operations for the Six Months Ended June 30, 2021 and 2020

Six Months Ended
June 30,

Variance

Percent
Change

2021

2020

(In thousands)

Revenues

$

72,318

$

80,433

$

(8,115

)

(10

)%

Operating expenses

60,989

63,493

(2,504

)

(4

)%

Selling, general and administrative expenses

3,658

4,193

(535

)

(13

)%

Depreciation and amortization

8,329

8,608

(279

)

(3

)%

$

(658

)

$

4,139

$

(4,797

)

(116

)%

Other operating income (loss), net

17

(1,195

)

1,212

101

%

Operating income (loss)

$

(641

)

$

2,944

$

(3,585

)

(122

)%

Sulfur Services Segment

Comparative Results of Operations for the Three Months Ended June 30, 2021 and 2020

Three Months Ended
June 30,

Variance

Percent
Change

2021

2020

(In thousands)

Revenues:

Services

$

2,949

$

2,914

$

35

1

%

Products

35,337

30,506

4,831

16

%

Total revenues

38,286

33,420

4,866

15

%

Cost of products sold

25,397

18,601

6,796

37

%

Operating expenses

2,804

3,142

(338

)

(11

)%

Selling, general and administrative expenses

1,215

1,166

49

4

%

Depreciation and amortization

2,568

3,131

(563

)

(18

)%

6,302

7,380

(1,078

)

(15

)%

Other operating income, net

6

5

1

20

%

Operating income

$

6,308

$

7,385

$

(1,077

)

(15

)%

Sulfur (long tons)

146

166

(20

)

(12

)%

Fertilizer (long tons)

84

91

(7

)

(8

)%

Total sulfur services volumes (long tons)

230

257

(27

)

(11

)%

Comparative Results of Operations for the Six Months Ended June 30, 2021 and 2020

Six Months Ended
June 30,

Variance

Percent
Change

2021

2020

(In thousands)

Revenues:

Services

$

5,899

$

5,829

$

70

1

%

Products

67,222

55,927

11,295

20

%

Total revenues

73,121

61,756

11,365

18

%

Cost of products sold

47,820

35,405

12,415

35

%

Operating expenses

4,813

6,052

(1,239

)

(20

)%

Selling, general and administrative expenses

2,456

2,369

87

4

%

Depreciation and amortization

5,288

6,025

(737

)

(12

)%

12,744

11,905

839

7

%

Other operating income, net

6

6,776

(6,770

)

(100

)%

Operating income

$

12,750

$

18,681

$

(5,931

)

(32

)%

Sulfur (long tons)

219

349

(130

)

(37

)%

Fertilizer (long tons)

179

165

14

8

%

Total sulfur services volumes (long tons)

398

514

(116

)

(23

)%

Natural Gas Liquids Segment

Comparative Results of Operations for the Three Months Ended June 30, 2021 and 2020

Three Months Ended
June 30,

Variance

Percent
Change

2021

2020

(In thousands)

Products Revenues

$

67,232

$

30,300

$

36,932

122

%

Cost of products sold

64,176

26,579

37,597

141

%

Operating expenses

1,061

1,150

(89

)

(8

)%

Selling, general and administrative expenses

697

930

(233

)

(25

)%

Depreciation and amortization

588

612

(24

)

(4

)%

710

1,029

(319

)

(31

)%

Other operating income, net

1

1

Operating income

$

711

$

1,029

$

(318

)

(31

)%

NGL sales volumes (Bbls)

1,259

1,698

(439

)

(26

)%

Comparative Results of Operations for the Six Months Ended June 30, 2021 and 2020

Six Months Ended
June 30,

Variance

Percent
Change

2021

2020

(In thousands)

Products Revenues

$

165,317

$

112,515

$

52,802

47

%

Cost of products sold

146,688

100,839

45,849

45

%

Operating expenses

2,056

2,089

(33

)

(2

)%

Selling, general and administrative expenses

2,904

2,077

827

40

%

Depreciation and amortization

1,199

1,221

(22

)

(2

)%

12,470

6,289

6,181

98

%

Other operating loss, net

(689

)

(2

)

(687

)

(34,350

)%

Operating income

$

11,781

$

6,287

$

5,494

87

%

NGL sales volumes (Bbls)

3,404

4,143

(739

)

(18

)%

Unallocated Selling, General and Administrative Expenses

Comparative Results of Operations for the Three and Six Months Ended June 30, 2021 and 2020

Three Months Ended
June 30,

Variance

Percent
Change

Six Months Ended
June 30,

Variance

Percent
Change

2021

2020

2021

2020

(In thousands)

(In thousands)

Unallocated selling, general and administrative expenses

$

3,780

$

4,361

$

(581

)

(13

)%

$

7,699

$

8,733

$

(1,034

)

(12

)%

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 six months ended June 30, 2021 and 2020.

Reconciliation of EBITDA, Adjusted EBITDA, Distributable Cash Flow and Adjusted Free Cash Flow

Three Months Ended

Six Months Ended

June 30,

June 30,

2021

2020

2021

2020

(in thousands)

(in thousands)

Net income (loss)

$

(6,612

)

$

(2,203

)

$

(4,101

)

$

6,612

Adjustments:

Interest expense, net

13,309

9,377

26,262

19,302

Income tax expense

935

790

1,157

1,137

Depreciation and amortization

14,483

15,343

28,917

30,582

EBITDA

22,115

23,307

52,235

57,633

Adjustments:

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

(89

)

(15

)

671

175

Unrealized mark-to-market on commodity derivatives

424

205

(669

)

Lower of cost or market adjustments

335

Gain on repurchase of senior unsecured notes

(3,484

)

Unit-based compensation

48

363

288

709

Adjusted EBITDA

22,498

23,905

53,399

54,949

Adjustments:

Interest expense, net

(13,309

)

(9,377

)

(26,262

)

(19,302

)

Income tax expense

(935

)

(790

)

(1,157

)

(1,137

)

Amortization of debt premium

(76

)

(153

)

Amortization of deferred debt issuance costs

766

499

1,521

991

Deferred income tax expense

683

732

758

1,018

Payments for plant turnaround costs

(20

)

(81

)

(1,694

)

(231

)

Maintenance capital expenditures

(2,370

)

(2,280

)

(6,441

)

(5,306

)

Distributable Cash Flow

$

7,313

$

12,532

$

20,124

$

30,829

Adjustments:

Expansion capital expenditures

$

(1,147

)

$

(2,585

)

$

(1,977

)

$

(7,931

)

Principal payments under finance lease obligations

(160

)

(1,358

)

(2,591

)

(3,222

)

Adjusted Free Cash Flow

$

6,006

$

8,589

$

15,556

$

19,676

View source version on businesswire.com: https://www.businesswire.com/news/home/20210722005883/en/

Contacts

Sharon Taylor - Vice President & Chief Financial Officer
(877) 256-6644
investor.relations@mmlp.com