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CST: 21/08/2019 22:44:22   

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

28 Days ago

  • 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. (Nasdaq: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.

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