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Martin Midstream Partners Reports Second Quarter 2019 Financial Results and Revised Guidance

  • Quarterly Distribution Coverage Ratio of 1.31 times

  • Second Quarter Net Loss from Continuing Operations of $10.6 million

  • Improved Pro-Forma Total Leverage to 5.12 times

  • Revised Guidance for 2019

KILGORE, Texas, July 24, 2019 (GLOBE NEWSWIRE) -- Martin Midstream Partners L.P. (MMLP) (the “Partnership”) announced today its financial results for the second quarter of 2019.

Ruben Martin, President and Chief Executive Officer of Martin Midstream GP LLC, the general partner of the Partnership, said, "During the second quarter, the Partnership continued to execute on announced strategic initiatives designed to strengthen the balance sheet and increase liquidity. Since mid-2018 the Partnership, through a series of divestitures and the acquisition of Martin Transport, Inc., has received net proceeds of approximately $283.0 million, used to reduce borrowings under the revolving credit facility. As a result, the Partnership will benefit approximately $15.6 million from interest expense savings.

"Addressing the second quarter of 2019, the Partnership generated adjusted EBITDA of approximately $25.2 million, which does not include adjusted EBITDA from discontinued operations, and a total distribution coverage ratio of 1.31 times, as the Partnership continued to encounter challenges across all four operating segments. The Terminalling and Storage segment faced reduced contract renewal rates as a result of ongoing depressed activity in the Gulf of Mexico. The Sulfur segment experienced weak demand for fertilizer products in the last month of the quarter attributable to a shortened planting season caused by rain and flooding. Historically, the second quarter is the weakest for our continuing operations in the Natural Gas Liquids segment as prices contract during the seasonal buying period, negatively impacting inventory valuation. Finally, the Transportation segment saw softness in the land division compared to guidance attributable to reduced demand in the refining and chemicals sector, offset by solid performance in the marine division due to continuing strong fleet utilization and increasing day rates.

"In conclusion, while the Partnership experienced headwinds within our operating environments, we have effectively executed our strategic initiatives to strengthen the balance sheet by reducing leverage. In addition, we successfully amended and extended our revolving credit facility recently which improves liquidity and, coupled with the Partnership’s commitment to capital discipline, provides support for near term opportunities and long term success."

The Partnership reported a net loss from continuing operations for the second quarter 2019 of $10.6 million, a loss of $0.27 per limited partner unit. The Partnership had a net loss from continuing operations for the second quarter 2018 of $9.5 million, or $0.31 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. The Partnership had a net loss from continuing operations for the six months ended June 30, 2018 of $1.5 million, or $0.17 per limited partner unit.

Adjusted EBITDA from continuing operations for the second quarter of 2019 was $25.2 million compared to the second quarter of 2018 of $22.7 million. Adjusted EBITDA from continuing operations for the six months ended June 30, 2019 was $50.8 million compared to the six months ended June 30, 2018 of $58.8 million.

Distributable cash flow from continuing operations for the second quarter of 2019 was $8.0 million compared to the second quarter of 2018 of $4.7 million. Distributable cash flow from continuing operations for the six months ended June 30, 2019 was $12.7 million compared to the six months ended June 30, 2018 of $23.4 million.

The Partnership had a net loss from discontinued operations for the three months ended June 30, 2019 of $180.6 million, a loss of $4.55 per limited partner unit. The Partnership's net loss from discontinued operations for the three months ended June 30, 2019 includes a non-cash charge related to the disposition of its natural gas storage assets of $178.8 million. The Partnership had net income from discontinued operations for the three months ended June 30, 2018 of $4.9 million, or $0.13 per limited partner unit. The Partnership had a net loss from discontinued operations for the six months ended June 30, 2019 of $179.5 million, a loss of $4.52 per limited partner unit. The Partnership's loss from discontinued operations for the six months ended June 30, 2019 includes a non-cash charge related to the disposition of its natural gas storage assets of $178.8 million. The Partnership had net income from discontinued operations for the six months ended June 30, 2018 of $12.0 million, or $0.31 per limited partner unit.

Adjusted EBITDA from discontinued operations for the second quarter of 2019 was $5.5 million compared to the second quarter 2018 of $10.1 million. Adjusted EBITDA from discontinued operations for the six months ended June 30, 2019 was $10.7 million compared to the six months ended June 30, 2018 of $21.2 million.

Distributable cash flow from discontinued operations for the second quarter of 2019 was $4.9 million compared to the second quarter of 2018 of $9.6 million. Distributable cash flow from discontinued operations for the six months ended June 30, 2019 was $9.8 million compared to the six months ended June 30, 2018 of $20.5 million.

Revenues for the second quarter of 2019 were $187.3 million compared to the second quarter of 2018 of $227.2 million. Revenues for the six months ended June 30, 2019 were $427.4 million compared to the six months ended June 30, 2018 of $518.9 million.

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

Included with this press release are the Partnership's consolidated and condensed financial statements as of and for the three and six months ended June 30, 2019 and certain prior periods. These financial statements should be read in conjunction with the information contained in the Partnership's Quarterly Report on Form 10-Q, to be filed with the Securities and Exchange Commission on July 24, 2019.

An attachment reconciling net income to Adjusted EBITDA and with 2019 revised guidance is included at http://ml.globenewswire.com/Resource/Download/779f5bcb-6037-4c15-8903-50635dc96a4c.

Investors' Conference Call

An investors conference call to review the second quarter results will be held on Thursday, July 25, 2019 at 8:00 a.m. Central Time. The live conference call will be available by calling (877) 878-2695. For a limited time, an audio replay of the conference call will be available by calling (855) 859-2056. The conference ID is 9578957. 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 and other factors, many of which are outside the Partnership's control, which could cause actual results to differ materially from such statements. While the Partnership believes that the assumptions concerning future events are reasonable, it cautions that there are inherent difficulties in anticipating or predicting certain important factors. A discussion of these factors, including risks and uncertainties, is set forth in the Partnership's annual and quarterly reports filed from time to time with the Securities and Exchange Commission. The Partnership disclaims any intention or obligation to revise any forward-looking statements, including financial estimates, whether as a result of new information, future events, or otherwise except where required to do so by law.

Use of Non-GAAP Financial Information

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

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

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

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

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

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

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

June 30, 2019

December 31, 20181

(Unaudited)

(Unaudited)

Assets

Cash

$

2,521

$

300

Accounts and other receivables, less allowance for doubtful accounts of $618 and $576, respectively

64,606

83,488

Product exchange receivables

107

166

Inventories (Note 6)

81,220

84,265

Due from affiliates

35,598

18,845

Fair value of derivatives (Note 11)

4

Other current assets

9,638

5,889

Assets held for sale (Note 4)

5,132

5,652

Current assets - Natural Gas Storage Assets (Note 4)

9,428

Total current assets

198,822

208,037

Property, plant and equipment, at cost

880,603

886,435

Accumulated depreciation

(451,359

)

(438,602

)

Property, plant and equipment, net

429,244

447,833

Goodwill

17,785

17,785

Right-of-use assets (Note 9)

25,682

Deferred income taxes, net (Note 19)

23,925

Other assets, net (Note 10)

5,050

4,584

Non-current assets - Natural Gas Storage Assets (Note 4)

395,389

Total assets

$

700,508

$

1,073,628

Liabilities and Partners’ Capital

Current installments of finance lease obligations (Note 9)

$

6,059

$

5,409

Trade and other accounts payable

61,357

64,041

Product exchange payables

7,717

12,103

Due to affiliates

3,367

2,133

Income taxes payable

576

445

Fair value of derivatives (Note 11)

2,069

Other accrued liabilities (Note 10)

29,160

24,380

Current liabilities - Natural Gas Storage Assets (Note 4)

3,240

Total current liabilities

110,305

111,751

Long-term debt, net (Note 8 )

596,398

656,459

Finance lease obligations (Note 9)

4,259

6,272

Operating lease liabilities (Note 9)

17,913

Other long-term obligations

8,747

10,045

Non-current liabilities - Natural Gas Storage Assets (Note 4)

669

Total liabilities

737,622

785,196

Commitments and contingencies (Note 16)

Partners’ capital (deficit) (Note 12)

(37,114

)

288,432

Total partners’ capital (deficit)

(37,114

)

288,432

Total liabilities and partners' capital

$

700,508

$

1,073,628

These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in the Partnership's Quarterly Report on Form 10-Q to be filed with the Securities and Exchange Commission on July 24, 2019.

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

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

Three Months Ended

Six Months Ended

June 30,

June 30,

2019

20181

2019

20181

Revenues:

Terminalling and storage *

$

21,377

$

24,068

$

44,481

$

48,115

Transportation *

41,321

37,206

79,116

71,565

Sulfur services

2,858

2,787

5,717

5,574

Product sales: *

Natural gas liquids

57,398

90,625

173,872

249,787

Sulfur services

32,998

35,684

61,732

70,584

Terminalling and storage

31,371

36,794

62,438

73,257

121,767

163,103

298,042

393,628

Total revenues

187,323

227,164

427,356

518,882

Costs and expenses:

Cost of products sold: (excluding depreciation and amortization)

Natural gas liquids *

53,546

84,542

159,736

223,165

Sulfur services *

22,124

26,886

41,820

49,104

Terminalling and storage *

26,118

32,286

52,989

64,266

101,788

143,714

254,545

336,535

Expenses:

Operating expenses *

53,579

52,915

105,428

105,741

Selling, general and administrative *

10,226

8,894

20,426

18,833

Depreciation and amortization

15,087

16,946

29,988

32,258

Total costs and expenses

180,680

222,469

410,387

493,367

Other operating loss

(1,633

)

(206

)

(2,353

)

(198

)

Operating income

5,010

4,489

14,616

25,317

Other income (expense):

Interest expense, net

(14,986

)

(13,815

)

(28,657

)

(26,545

)

Other, net

1

5

4

5

Total other expense

(14,985

)

(13,810

)

(28,653

)

(26,540

)

Net loss before taxes

(9,975

)

(9,321

)

(14,037

)

(1,223

)

Income tax expense

(639

)

(132

)

(1,335

)

(281

)

Loss from continuing operations

(10,614

)

(9,453

)

(15,372

)

(1,504

)

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

(180,568

)

4,927

(179,466

)

12,014

Net income (loss)

(191,182

)

(4,526

)

(194,838

)

10,510

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

3,824

145

3,897

(111

)

Less pre-acquisition (income) allocated to the general partner

(2,720

)

(4,938

)

Less (income) loss allocable to unvested restricted units

65

6

67

(2

)

Limited partners' interest in net income (loss)

$

(187,293

)

$

(7,095

)

$

(190,874

)

$

5,459

These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in the Partnership's Quarterly Report on Form 10-Q to be filed with the Securities and Exchange Commission on July 24, 2019.

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

*Related Party Transactions Shown Below

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

*Related Party Transactions Included Above

Three Months Ended

Six Months Ended

June 30,

June 30,

2019

20181

2019

20181

Revenues:*

Terminalling and storage

$

17,477

$

20,485

$

36,449

$

40,493

Transportation

5,856

7,066

11,499

13,759

Product Sales

286

377

707

1,001

Costs and expenses:*

Cost of products sold: (excluding depreciation and amortization)

Sulfur services

2,884

2,492

5,458

5,340

Terminalling and storage

7,203

7,089

13,112

12,668

Expenses:

Operating expenses

24,407

23,758

46,943

46,846

Selling, general and administrative

8,558

6,692

17,093

14,618

These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in the Partnership's Quarterly Report on Form 10-Q to be filed with the Securities and Exchange Commission on July 24, 2019.

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

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

Three Months Ended

Six Months Ended

June 30,

June 30,

2019

20181

2019

20181

Allocation of net income (loss) attributable to:

Limited partner interest:

Continuing operations

$

(10,398

)

$

(11,857

)

$

(15,060

)

$

(6,426

)

Discontinued operations

(176,895

)

4,762

(175,814

)

11,885

$

(187,293

)

$

(7,095

)

$

(190,874

)

$

5,459

General partner interest:

Continuing operations

$

(212

)

$

(303

)

$

(307

)

$

(16

)

Discontinued operations

(3,612

)

158

(3,590

)

127

$

(3,824

)

$

(145

)

$

(3,897

)

$

111

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

Basic:

Continuing operations

$

(0.27

)

$

(0.31

)

$

(0.39

)

$

(0.17

)

Discontinued operations

(4.55

)

0.13

(4.52

)

0.31

$

(4.82

)

$

(0.18

)

$

(4.91

)

$

0.14

Weighted average limited partner units - basic

38,871

38,722

38,912

38,829

Diluted:

Continuing operations

$

(0.27

)

$

(0.31

)

$

(0.39

)

$

(0.17

)

Discontinued operations

(4.55

)

0.13

(4.52

)

0.31

$

(4.82

)

$

(0.18

)

$

(4.91

)

$

0.14

Weighted average limited partner units - diluted

38,871

38,722

38,912

38,834

These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in the Partnership's Quarterly Report on Form 10-Q to be filed with the Securities and Exchange Commission on July 24, 2019.

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

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

Partners’ Capital

Parent Net
Investment1

Common Limited

General
Partner
Amount

Units

Amount

Total

Balances - January 1, 2018

$

24,240

38,444,612

$

290,927

$

7,314

$

322,481

Net income

4,938

5,461

111

10,510

Issuance of common units, net

(118

)

(118

)

Issuance of restricted units

633,425

Forfeiture of restricted units

(7,000

)

Cash distributions

(38,433

)

(784

)

(39,217

)

Deemed contribution to Martin Resource Management Corporation

(8,857

)

(8,857

)

Unit-based compensation

520

520

Purchase of treasury units

(18,800

)

(273

)

(273

)

Excess purchase price over carrying value of acquired assets

(26

)

(26

)

Balances - June 30, 2018

$

20,321

39,052,237

$

258,058

$

6,641

$

285,020

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 of issuance related costs

(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

Excess purchase price over carrying value of acquired assets

(102,393

)

(102,393

)

Deferred taxes on acquired assets and liabilities

24,781

24,781

Contribution to parent

(23,720

)

(23,720

)

Purchase of treasury units

(31,504

)

(392

)

(392

)

Balances - June 30, 2019

$

38,863,389

$

(39,255

)

$

2,141

$

(37,114

)

These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in the Partnership's Quarterly Report on Form 10-Q to be filed with the Securities and Exchange Commission on July 24, 2019.

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

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

Six Months Ended

June 30,

2019

20181

Cash flows from operating activities:

Net income (loss)

$

(194,838

)

$

10,510

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

179,466

(12,014

)

Net loss from continuing operations

(15,372

)

(1,504

)

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

Depreciation and amortization

29,988

32,258

Amortization of deferred debt issuance costs

2,478

1,689

Amortization of premium on notes payable

(153

)

(153

)

Deferred taxes

856

Loss on sale of property, plant and equipment

2,353

198

Derivative loss (gain)

2,322

(2,069

)

Net cash received (paid) for commodity derivatives

(249

)

2,569

Unit-based compensation

715

520

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

Accounts and other receivables

28,073

44,772

Product exchange receivables

59

(145

)

Inventories

3,044

(15,482

)

Due from affiliates

(15,947

)

3,241

Other current assets

(3,061

)

60

Trade and other accounts payable

(2,800

)

(16,155

)

Product exchange payables

(4,386

)

1,196

Due to affiliates

428

(495

)

Income taxes payable

131

(103

)

Other accrued liabilities

(3,043

)

(6,158

)

Change in other non-current assets and liabilities

(693

)

931

Net cash provided by continuing operating activities

24,743

45,170

Net cash provided by discontinued operating activities

7,770

23,999

Net cash provided by operating activities

32,513

69,169

Cash flows from investing activities:

Payments for property, plant and equipment

(14,102

)

(22,450

)

Acquisitions

(23,720

)

Payments for plant turnaround costs

(4,742

)

Proceeds from sale of property, plant and equipment

659

500

Net cash used in continuing investing activities

(41,905

)

(21,950

)

Net cash provided by (used in) discontinued investing activities

209,155

(15,139

)

Net cash provided by (used in) investing activities

167,250

(37,089

)

Cash flows from financing activities:

Payments of long-term debt and finance lease obligations

(362,672

)

(199,765

)

Proceeds from long-term debt

298,000

218,000

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

(259

)

(118

)

Purchase of treasury units

(392

)

(273

)

Deemed distribution to Martin Resource Management Corporation

(8,857

)

Payment of debt issuance costs

(386

)

(1,240

)

Excess purchase price over carrying value of acquired assets

(102,393

)

(26

)

Cash distributions paid

(29,440

)

(39,217

)

Net cash used in financing activities

(197,542

)

(31,496

)

Net increase in cash

2,221

584

Cash at beginning of period

300

89

Cash at end of period

$

2,521

$

673

Non-cash additions to property, plant and equipment

$

2,248

$

1,811

These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in the Partnership's Quarterly Report on Form 10-Q to be filed with the Securities and Exchange Commission on July 24, 2019.

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

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

Terminalling and Storage Segment

Comparative Results of Operations for the Three Months Ended June 30, 2019 and 2018

Three Months Ended
June 30,

Variance

Percent
Change

2019

2018

(In thousands, except BBL per day)

Revenues:

Services

$

22,966

$

25,491

$

(2,525

)

(10

)%

Products

31,385

36,823

(5,438

)

(15

)%

Total revenues

54,351

62,314

(7,963

)

(13

)%

Cost of products sold

27,497

33,596

(6,099

)

(18

)%

Operating expenses

13,257

12,909

348

3

%

Selling, general and administrative expenses

1,378

1,334

44

3

%

Depreciation and amortization

7,826

11,690

(3,864

)

(33

)%

4,393

2,785

1,608

58

%

Other operating income (loss)

7

(36

)

43

119

%

Operating income

$

4,400

$

2,749

$

1,651

60

%

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, 2019 and 2018

Six Months Ended
June 30,

Variance

Percent
Change

2019

2018

(In thousands, except BBL per day)

Revenues:

Services

$

47,766

$

50,994

$

(3,228

)

(6

)%

Products

62,477

73,303

(10,826

)

(15

)%

Total revenues

110,243

124,297

(14,054

)

(11

)%

Cost of products sold

55,774

67,098

(11,324

)

(17

)%

Operating expenses

26,610

26,356

254

1

%

Selling, general and administrative expenses

2,727

2,590

137

5

%

Depreciation and amortization

15,663

21,849

(6,186

)

(28

)%

9,469

6,404

3,065

48

%

Other operating income (loss)

17

(36

)

53

147

%

Operating income

$

9,486

$

6,368

$

3,118

49

%

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, 2019 and 2018

Three Months Ended
June 30,

Variance

Percent
Change

2019

2018

(In thousands)

Revenues

$

47,233

$

43,553

$

3,680

8

%

Operating expenses

36,512

36,055

457

1

%

Selling, general and administrative expenses

1,980

1,452

528

36

%

Depreciation and amortization

3,778

2,550

1,228

48

%

4,963

3,496

1,467

42

%

Other operating loss

(1,649

)

(186

)

(1,463

)

(787

)%

Operating income

$

3,314

$

3,310

$

4

%


Comparative Results of Operations for the Six Months Ended June 30, 2019 and 2018

Six Months Ended
June 30,

Variance

Percent
Change

2019

2018

(In thousands)

Revenues

$

92,419

$

85,490

$

6,929

8

%

Operating expenses

71,777

71,495

282

%

Selling, general and administrative expenses

4,065

2,868

1,197

42

%

Depreciation and amortization

7,348

5,016

2,332

46

%

$

9,229

$

6,111

$

3,118

51

%

Other operating loss

(2,385

)

(176

)

(2,209

)

(1,255

)%

Operating income

$

6,844

$

5,935

$

909

15

%


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, 2019 and 2018

Three Months Ended
June 30,

Variance

Percent
Change

2019

2018

(In thousands)

Revenues:

Services

$

2,858

$

2,787

$

71

3

%

Products

32,998

35,684

(2,686

)

(8

)%

Total revenues

35,856

38,471

(2,615

)

(7

)%

Cost of products sold

23,676

28,829

(5,153

)

(18

)%

Operating expenses

2,789

2,929

(140

)

(5

)%

Selling, general and administrative expenses

1,251

1,046

205

20

%

Depreciation and amortization

2,854

2,086

768

37

%

5,286

3,581

1,705

48

%

Other operating income (loss)

(1

)

16

(17

)

(106

)%

Operating income

$

5,285

$

3,597

$

1,688

47

%

Sulfur (long tons)

182

178

4

2

%

Fertilizer (long tons)

88

93

(5

)

(5

)%

Total sulfur services volumes (long tons)

270

271

(1

)

%


Comparative Results of Operations for the Six Months Ended June 30, 2019 and 2018

Six Months Ended
June 30,

Variance

Percent
Change

2019

2018

(In thousands)

Revenues:

Services

$

5,717

$

5,574

$

143

3

%

Products

61,732

70,584

(8,852

)

(13

)%

Total revenues

67,449

76,158

(8,709

)

(11

)%

Cost of products sold

45,242

52,816

(7,574

)

(14

)%

Operating expenses

4,952

5,841

(889

)

(15

)%

Selling, general and administrative expenses

2,429

2,081

348

17

%

Depreciation and amortization

5,722

4,150

1,572

38

%

9,104

11,270

(2,166

)

(19

)%

Other operating income (loss)

(1

)

14

(15

)

(107

)%

Operating income

$

9,103

$

11,284

$

(2,181

)

(19

)%

Sulfur (long tons)

291

354

(63

)

(18

)%

Fertilizer (long tons)

155

181

(26

)

(14

)%

Total sulfur services volumes (long tons)

446

535

(89

)

(17

)%


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, 2019 and 2018

Three Months Ended
June 30,

Variance

Percent
Change

2019

2018

(In thousands)

Products Revenues

$

57,398

$

90,643

$

(33,245

)

(37

)%

Cost of products sold

57,392

88,389

(30,997

)

(35

)%

Operating expenses

1,680

1,717

(37

)

(2

)%

Selling, general and administrative expenses

1,097

738

359

49

%

Depreciation and amortization

629

620

9

1

%

(3,400

)

(821

)

(2,579

)

(314

)%

Other operating income

10

10

Operating loss

$

(3,390

)

$

(821

)

$

(2,569

)

(313

)%

NGL sales volumes (Bbls)

1,457

1,743

(286

)

(16

)%


Comparative Results of Operations for the Six Months Ended June 30, 2019 and 2018

Six Months Ended
June 30,

Variance

Percent
Change

2019

2018

(In thousands)

Products Revenues

$

173,872

$

249,806

$

(75,934

)

(30

)%

Cost of products sold

168,701

232,122

(63,421

)

(27

)%

Operating expenses

3,386

3,389

(3

)

%

Selling, general and administrative expenses

2,197

2,745

(548

)

(20

)%

Depreciation and amortization

1,255

1,243

12

1

%

(1,667

)

10,307

(11,974

)

(116

)%

Other operating income

16

16

Operating income (loss)

$

(1,651

)

$

10,307

$

(11,958

)

(116

)%

NGL sales volumes (Bbls)

4,364

5,184

(820

)

(16

)%

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, 2019 and 2018, which represents EBITDA, Adjusted EBITDA and Distributable Cash Flow.

Reconciliation of EBITDA, Adjusted EBITDA, and Distributable Cash Flow

Three Months Ended

Six Months Ended

June 30,

June 30,

2019

20181

2019

20181

(in thousands)

(in thousands)

Net income (loss)

$

(191,182

)

$

(4,526

)

$

(194,838

)

$

10,510

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

180,568

(4,927

)

179,466

(12,014

)

Loss from continuing operations

(10,614

)

(9,453

)

(15,372

)

(1,504

)

Adjustments:

Interest expense, net

14,986

13,815

28,657

26,545

Income tax expense

639

132

1,335

281

Depreciation and amortization

15,087

16,946

29,988

32,258

EBITDA from Continuing Operations

20,098

21,440

44,608

57,580

Adjustments:

Loss on sale of property, plant and equipment

1,633

206

2,353

198

Unrealized mark-to-market on commodity derivatives

2,220

654

2,073

500

Transaction costs associated with acquisitions

40

224

Non-cash insurance related accruals

500

500

Lower of cost or market adjustments

303

303

Unit-based compensation

363

388

715

520

Adjusted EBITDA from Continuing Operations

25,157

22,688

50,776

58,798

Adjustments:

Interest expense, net

(14,986

)

(13,815

)

(28,657

)

(26,545

)

Income tax expense

(639

)

(132

)

(1,335

)

(281

)

Amortization of debt premium

(76

)

(76

)

(153

)

(153

)

Amortization of deferred debt issuance costs

1,583

870

2,478

1,689

Deferred income taxes

487

856

Payments for plant turnaround costs

(915

)

(4,742

)

Maintenance capital expenditures

(2,628

)

(4,857

)

(6,487

)

(10,100

)

Distributable Cash Flow from Continuing Operations

$

7,983

$

4,678

$

12,736

$

23,408

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

$

(180,568

)

$

4,927

$

(179,466

)

$

12,014

Adjustments:

Depreciation and amortization

4,080

4,684

8,161

9,362

EBITDA from Discontinued Operations

(176,488

)

9,611

(171,305

)

21,376

Equity in earnings of unconsolidated entities

(1,131

)

(2,726

)

Distributions from unconsolidated entities

1,500

3,000

Loss on sale of property, plant and equipment

178,781

120

178,781

120

Non-cash insurance related accruals

3,213

3,213

Adjusted EBITDA from Discontinued Operations

5,506

10,100

10,689

21,770

Maintenance capital expenditures

(576

)

(512

)

(912

)

(1,271

)

Distributable Cash Flow from Discontinued Operations

$

4,930

$

9,588

$

9,777

$

20,499

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