- Total adjusted leverage of 3.75 times as of December 31,
2023
- Reported net income of $0.5 million for the fourth quarter and
net loss of $4.5 million, which includes a $5.1 million impact from
the loss on extinguishment of debt, for the year ended December 31,
2023
- Reported adjusted EBITDA of $29.2 million and $117.7 million,
after giving effect to the May 2023 exit of the butane optimization
business, which incurred adjusted EBITDA of zero and negative
adjusted EBITDA of $15.1 million, for the fourth quarter and year
ended December 31, 2023, respectively
- Releases 2024 adjusted EBITDA Guidance of $116.1 million,
growth capital expenditures of $17.4 million, and maintenance
capital expenditures of $32.0 million
Martin Midstream Partners L.P. (Nasdaq:MMLP) (“MMLP” or the
“Partnership”) today announced its financial results for the three
months and year ended December 31, 2023.
“Fiscal year 2023 was significant for the Partnership as we
focused on debt reduction and stability in our earnings by
concentrating on our diversified refinery services assets and
exiting the butane optimization business,” said Bob Bondurant,
President and Chief Executive Officer of Martin Midstream GP LLC,
the general partner of the Partnership. “We exceeded our full year
adjusted EBITDA guidance by $2.5 million, excluding losses related
to the exit of our butane optimization business, and met our
long-term goal of adjusted leverage at or below 3.75 times. The
Partnership had a strong fourth quarter, as each of our four
operating segments either met or exceeded guidance, even as we
experienced headwinds in the lubricants business and downtime in
our marine transportation business due to accelerated regulatory
inspections, demonstrating the value of our diversified business
model.”
“In the fourth quarter, we reduced debt by $20.0 million,
bringing 2023 full year debt reduction to $73.5 million, resulting
in leverage of 3.75 times at December 31, 2023 compared to 4.53
times at December 31, 2022. While we have reached our stated
adjusted leverage goal of 3.75 times, timing of our future cash
flows and capital expenditures may result in a nominal short-term
increase in the ratio. As such the Partnership intends to continue
to concentrate on debt reduction to maintain our adjusted leverage
at or below 3.75 times on a sustainable basis.”
“During 2023, we started construction on an oleum tower located
within our Plainview, Texas sulfuric acid plant. The expansion will
provide feedstock to our joint venture, DSM Semichem LLC, to
produce electronic level sulfuric acid used for applications in the
semiconductor industry. We anticipate the project to be complete in
the first half of 2024 with a capital spend of $10.4 million this
year, which along with our $6.5 million of cash contribution to the
joint venture, makes up the majority of our anticipated growth
capital expenditures for the year. We anticipate this project will
begin returning cash flows to the Partnership by the fourth quarter
of 2024.”
FOURTH QUARTER 2023 OPERATING RESULTS BY BUSINESS SEGMENT
TERMINALLING AND STORAGE ("T&S")
T&S operating income was $3.9 million and $1.4 million for
the three months ended December 31, 2023 and 2022,
respectively.
Adjusted segment EBITDA for T&S was $9.0 million and $7.3
million for the three months ended December 31, 2023 and 2022,
respectively, reflecting contractual index-based fee increases
combined with reduced operating expenses across our divisions.
TRANSPORTATION
Transportation operating income was $8.6 million and $11.1
million for the three months ended December 31, 2023 and 2022,
respectively.
Adjusted segment EBITDA for Transportation was $12.0 million and
$14.7 million for the three months ended December 31, 2023 and
2022, respectively, primarily reflecting slightly higher mileage in
our land transportation division, offset by downtime associated
with regulatory maintenance in our marine transportation division,
and increased expenses across both divisions.
SULFUR SERVICES
Sulfur Services operating income was $4.8 million and $9.1
million for the three months ended December 31, 2023 and 2022,
respectively.
Adjusted segment EBITDA for Sulfur Services was $7.4 million and
$5.7 million for the three months ended December 31, 2023 and 2022,
respectively, primarily reflecting increased fertilizer sales
volume and increased operating fees associated with higher prilled
sulfur volume.
SPECIALTY PRODUCTS
Specialty Products operating income (loss) was $4.0 million and
$(0.9) million for the three months ended December 31, 2023 and
2022, respectively. Butane optimization operating income (loss) was
$0.0 million and $(4.7) million for the three months ended December
31, 2023 and 2022, respectively.
Adjusted segment EBITDA for Specialty Products was $4.9 million
and $(5.8) million for the three months ended December 31, 2023 and
2022, respectively. Included in the Specialty Products
results is adjusted EBITDA of $0.0 million and $(10.7) million for
the three months ended December 31, 2023 and 2022, respectively,
attributable to the butane optimization business. Adjusted
Segment EBITDA for Specialty Products after giving effect to the
May 2023 exit of the butane optimization business was $4.9 million
and $4.9 million for the three months ended December 31, 2023 and
2022, respectively, reflecting improved volumes and margins in our
grease business offset by higher product costs in our lubricants
business.
UNALLOCATED SELLING, GENERAL AND ADMINISTRATIVE EXPENSE
("USGA")
USGA expenses included in operating income were $4.1 million for
each of the three months ended December 31, 2023 and 2022,
respectively.
USGA expenses included in adjusted EBITDA were $4.1 million for
each of the three months ended December 31, 2023 and 2022,
respectively.
CAPITALIZATION
At December 31, 2023, the Partnership had $442.5 million of
total debt outstanding, including $42.5 million drawn on its $175.0
million revolving credit facility maturing in 2027 and $400.0
million of senior secured second lien notes due 2028. At December
31, 2023, the Partnership had liquidity of approximately $109.0
million from available capacity under its revolving credit
facility. The Partnership’s leverage ratio, as calculated under the
revolving credit facility, was 3.75 times at December 31, 2023,
compared to 3.95 times at September 30, 2023, a reduction of 0.20
times. The Partnership was in compliance with all debt covenants as
of December 31, 2023.
RESULTS OF OPERATIONS
The Partnership had net income of $0.5 million, or $0.01 per
limited partner unit, for the three months ended December 31, 2023.
The Partnership had a net loss of $0.4 million, a loss of $0.01 per
limited partner unit, for the three months ended December 31, 2022.
Adjusted EBITDA was $29.2 million for the three months ended
December 31, 2023 compared to $17.8 million for the three months
ended December 31, 2022. Adjusted EBITDA after giving effect to the
May 2023 exit of the butane optimization business for the three
months ended December 31, 2023 was $29.2 million compared to $17.8
million for the three months ended December 31, 2022. Net cash
provided by operating activities was $31.4 million for the three
months ended December 31, 2023 compared to $32.9 million for the
three months ended December 31, 2022. Distributable cash flow was
$8.5 million for the three months ended December 31, 2023 compared
to $9.0 million for the three months ended December 31, 2022.
The Partnership had a net loss of $4.5 million, a loss of $0.11
per limited partner unit, for the year ended December 31, 2023. The
Partnership had a net loss of $10.3 million, a loss of $0.26 per
limited partner unit, for the year ended December 31, 2022.
Adjusted EBITDA for the year ended December 31, 2023 was $102.6
million compared to $114.9 million for the year ended December 31,
2022. Adjusted EBITDA after giving effect to the May 2023 exit of
the butane optimization business for the year ended December 31,
2023 was $117.7 million compared to $122.0 million for the year
ended December 31, 2022. Net cash provided by operating activities
was $137.5 million for the year ended December 31, 2023 compared to
$16.1 million for the year ended December 31, 2022. Distributable
cash flow was $32.8 million for the year ended December 31, 2023
compared to $45.1 million for the year ended December 31, 2022.
Revenues were $181.1 million for the three months ended December
31, 2023 compared to $243.4 million for the three months ended
December 31, 2022. Revenues associated with our butane optimization
business were $0.0 million for the three months ended December 31,
2023 and $55.9 million for the three months ended December 31,
2022.
Revenues were $798.0 million for the year ended December 31,
2023 compared to $1.019 billion for the year ended December 31,
2022. Revenues associated with our butane optimization business
were $70.5 million for the year ended December 31, 2023 and $172.8
million for the year ended December 31, 2022.
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 fourth quarter 2023 to the
Partnership's adjusted EBITDA guidance for the fourth quarter
2023.
2024 FINANCIAL GUIDANCE
The Partnership expects full year 2024 Adjusted EBITDA of
approximately $116.1 million, growth capital expenditures of
approximately $17.4 million, with $16.9 million dedicated to the
DSM Semichem joint venture, and maintenance capital expenditures of
$32.0 million. More detailed 2024 Financial Guidance is provided as
an attachment included in the Current Report on Form 8-K to which
this press release is included.
MMLP does not intend at this time to provide financial guidance
beyond 2024.
The Partnership has not provided comparable GAAP financial
information on a forward-looking basis because it would require the
Partnership to create estimated ranges on a GAAP basis, which would
entail unreasonable effort as the adjustments required to reconcile
forward-looking non-GAAP measures cannot be predicted with a
reasonable degree of certainty but may include, among others, costs
related to debt amendments and unusual charges, expenses and gains.
Some or all of those adjustments could be significant.
2023 K-1 TAX PACKAGES
The timing of the availability of MMLP’s K-1 tax packages for
2023 is dependent upon whether and/or when recently proposed
legislation (H.R. 7024), which includes proposed changes in tax law
which would be applied retroactively to the 2023 tax year, is
enacted. As currently written, certain provisions in H.R. 7024
would lower MMLP’s taxable income for 2023 compared to existing tax
law. Barring any changes in tax law, MMLP’s K-1 tax packages,
including all information to fiduciaries for common units owned in
tax exempt accounts, could be made available online through our
website at www.MMLP.com on or before February 29, 2024 and the
mailing of the tax packages would be completed by March 8, 2024.
Should deliberations over the passage of H.R. 7024 impact this
timeline, we will issue a press release to update our investors on
the timing of the availability of the K-1 tax packages.
INVESTORS CONFERENCE CALL
Date: Thursday, February 15, 2024 Time: 8:00 a.m.
CT (please dial in by 7:55 a.m.) Dial In #: (888)
330-2384 Conference ID: 8536096 Replay Dial In #
(800) 770-2030 – Conference ID: 8536096
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 LP, headquartered in Kilgore, Texas,
is a publicly traded limited partnership with a diverse set of
operations focused primarily in the Gulf Coast region of the United
States. MMLP’s primary business lines include: (1) terminalling,
processing, and storage 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) marketing,
distribution, and transportation services for natural gas liquids
and blending and packaging services for specialty lubricants and
grease. To learn more, visit www.MMLP.com. Follow Martin Midstream
Partners L.P. on LinkedIn, Facebook, and X (formerly known as
Twitter).
Forward-Looking Statements
Statements about the Partnership’s outlook and all other
statements in this release other than historical facts are
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. These forward-looking
statements and all references to financial estimates rely on a
number of assumptions concerning future events and are subject to a
number of uncertainties, including (i) the effects of the continued
volatility of commodity prices and the related macroeconomic and
political environment and (ii) 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 “SEC”). 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
To assist management in assessing our business, we use the
following non-GAAP financial measures: earnings before interest,
taxes, and depreciation and amortization ("EBITDA"), adjusted
EBITDA (as defined below), distributable cash flow available to
common unitholders (“distributable cash flow”), and free cash flow
after growth capital expenditures and principal payments under
finance lease obligations ("adjusted free cash flow"). Our
management uses a variety of financial and operational measurements
other than our financial statements prepared in accordance with
U.S. GAAP to analyze our performance.
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.
EBITDA and adjusted EBITDA. We define 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. Adjusted EBITDA is used as a
supplemental performance and liquidity measure by our management
and by external users of our financial statements, such as
investors, commercial banks, research analysts, and others, to
assess:
- the financial performance of our assets without regard to
financing methods, capital structure, or historical cost
basis;
- the ability of our assets to generate cash sufficient to pay
interest costs, support our indebtedness, and make cash
distributions to our unitholders; and
- our operating performance and return on capital as compared to
those of other companies in the midstream energy sector, without
regard to financing methods or capital structure.
The GAAP measures most directly comparable to adjusted EBITDA
are net income (loss) and net cash provided by (used in) operating
activities. Adjusted EBITDA should not be considered an alternative
to, or more meaningful than, net income (loss), operating income
(loss), net cash provided by (used in) operating activities, or any
other measure of financial performance presented in accordance with
GAAP. Adjusted EBITDA may not be comparable to similarly titled
measures of other companies because other companies may not
calculate adjusted EBITDA in the same manner.
Adjusted EBITDA does not include interest expense, income tax
expense, and depreciation and amortization. Because we have
borrowed money to finance our operations, interest expense is a
necessary element of our costs and our ability to generate cash
available for distribution. Because we have capital assets,
depreciation and amortization are also necessary elements of our
costs. Therefore, any measures that exclude these elements have
material limitations. To compensate for these limitations, we
believe that it is important to consider net income (loss) and net
cash provided by (used in) operating activities as determined under
GAAP, as well as adjusted EBITDA, to evaluate our overall
performance.
Distributable cash flow and adjusted free cash flow. We define
distributable cash flow as net cash provided by (used in) operating
activities less cash received (plus cash paid) for closed commodity
derivative positions included in Accumulated Other Comprehensive
Income (Loss), plus changes in operating assets and liabilities
which (provided) used cash, less maintenance capital expenditures
and plant turnaround costs. Distributable cash flow is a
significant performance measure used by our management and by
external users of our financial statements, such as investors,
commercial banks and research analysts, to compare basic cash flows
generated by us to the cash distributions we expect to pay
unitholders. Distributable cash flow is also an important financial
measure for our unitholders since it serves as an indicator of our
success in providing a cash return on investment. Specifically,
this financial measure indicates to investors whether or not we are
generating cash flow at a level that can sustain or support an
increase in our 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.
We define adjusted free cash flow 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 our 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. We believe 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. Our calculation of adjusted
free cash flow may or may not be comparable to similarly titled
measures used by other entities.
The GAAP measure most directly comparable to distributable cash
flow and adjusted free cash flow is net cash provided by (used in)
operating activities. Distributable cash flow and adjusted free
cash flow should not be considered alternatives to, or more
meaningful than, net income (loss), operating income (loss), Net
cash provided by (used in) operating activities, or any other
measure of liquidity presented in accordance with GAAP.
Distributable cash flow and adjusted free cash flow have important
limitations because they exclude some items that affect net income
(loss), operating income (loss), and net cash provided by (used in)
operating activities. Distributable cash flow and adjusted free
cash flow may not be comparable to similarly titled measures of
other companies because other companies may not calculate these
non-GAAP metrics in the same manner. To compensate for these
limitations, we believe that it is important to consider net cash
provided by (used in) operating activities determined under GAAP,
as well as distributable cash flow and adjusted free cash flow, to
evaluate our overall liquidity.
MMLP-F
MARTIN MIDSTREAM PARTNERS
L.P.
CONSOLIDATED BALANCE
SHEETS
(Dollars in thousands)
December 31,
2023
2022
Assets
Cash
$
54
$
45
Trade and accrued accounts receivable,
less allowance for doubtful accounts of $530 and $496,
respectively
53,293
79,641
Inventories
43,822
109,798
Due from affiliates
7,924
8,010
Other current assets
9,220
13,633
Total current assets
114,313
211,127
Property, plant and equipment, at cost
918,786
903,535
Accumulated depreciation
(612,993
)
(584,245
)
Property, plant and equipment, net
305,793
319,290
Goodwill
16,671
16,671
Right-of-use assets
60,359
34,963
Deferred income taxes, net
10,200
14,386
Intangibles and other assets, net
2,039
2,414
$
509,375
$
598,851
Liabilities and Partners’
Capital (Deficit)
Current portion of long term debt and
finance lease obligations
$
—
$
9
Trade and other accounts payable
51,653
68,198
Product exchange payables
426
32
Due to affiliates
6,334
8,947
Income taxes payable
652
665
Other accrued liabilities
41,499
33,074
Total current liabilities
100,564
110,925
Long-term debt, net
421,173
512,871
Operating lease liabilities
45,684
26,268
Other long-term obligations
6,578
8,232
Total liabilities
573,999
658,296
Commitments and contingencies
Partners’ capital (deficit)
(64,624
)
(59,445
)
Total partners’ capital (deficit)
(64,624
)
(59,445
)
$
509,375
$
598,851
MARTIN MIDSTREAM PARTNERS
L.P.
CONSOLIDATED STATEMENTS OF
OPERATIONS
(Dollars in thousands, except
per unit amounts)
Year Ended December
31,
2023
2022
2021
Revenues:
Terminalling and storage *
$
86,514
$
80,193
$
75,223
Transportation *
223,677
219,008
144,314
Sulfur services
13,430
12,337
11,799
Product sales: *
Specialty products
346,777
540,513
517,852
Sulfur services
127,565
166,827
133,243
474,342
707,340
651,095
Total revenues
797,963
1,018,878
882,431
Costs and expenses:
Cost of products sold: (excluding
depreciation and amortization)
Specialty products *
305,903
503,225
443,896
Sulfur services *
83,702
120,062
89,134
Terminalling and storage *
75
19
68
389,680
623,306
533,098
Expenses:
Operating expenses *
252,211
251,886
193,952
Selling, general and administrative *
40,826
41,812
41,012
Depreciation and amortization
49,895
56,280
56,751
Total costs and expenses
732,612
973,284
824,813
Other operating income (loss), net
1,373
5,669
(534
)
Gain on involuntary conversion of
property, plant and equipment
—
—
196
Operating income
66,724
51,263
57,280
Other income (expense):
Interest expense, net
(60,290
)
(53,665
)
(54,107
)
Loss on extinguishment of debt
(5,121
)
—
—
Other, net
56
(5
)
(4
)
Total other income (expense)
(65,355
)
(53,670
)
(54,111
)
Net income (loss) before taxes
1,369
(2,407
)
3,169
Income tax expense
(5,918
)
(7,927
)
(3,380
)
Net loss
(4,549
)
(10,334
)
(211
)
Less general partner's interest in net
loss
91
207
4
Less loss allocable to unvested restricted
units
14
40
—
Limited partners' interest in net loss
$
(4,444
)
$
(10,087
)
$
(207
)
Net loss per unit attributable to limited
partners - basic and diluted
$
(0.11
)
$
(0.26
)
$
(0.01
)
Weighted average limited partner units -
basic and diluted
38,771,657
38,726,048
38,689,041
*Related Party Transactions Shown
Below
MARTIN MIDSTREAM PARTNERS
L.P.
CONSOLIDATED STATEMENTS OF
OPERATIONS
(Dollars in thousands, except
per unit amounts)
*Related Party Transactions Included
Above
Year Ended December
31,
2023
2022
2021
Revenues:
Terminalling and storage
$
72,138
$
66,867
$
62,677
Transportation
29,276
28,393
20,046
Product sales
8,767
554
479
Costs and expenses:
Cost of products sold: (excluding
depreciation and amortization)
Specialty products
35,930
39,356
27,856
Sulfur services
11,182
10,717
9,980
Terminalling and storage
75
19
10
Expenses:
Operating expenses
100,851
93,630
78,607
Selling, general and administrative
32,021
31,758
32,924
MARTIN MIDSTREAM PARTNERS
L.P.
CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME (LOSS)
(Dollars in thousands
Year Ended December
31,
2023
2022
2021
Net loss
$
(4,549
)
$
(10,334
)
$
(211
)
Changes in fair values of commodity cash
flow hedges
$
—
$
(816
)
$
816
Comprehensive income (loss)
$
(4,549
)
$
(11,150
)
$
605
MARTIN MIDSTREAM PARTNERS
L.P.
CONSOLIDATED STATEMENTS OF
CAPITAL
(Dollars in thousands)
Partners’ Capital
(Deficit)
Common
General Partner Amount
Accumulated Other
Comprehensive Income
Units
Amount
Total
Balances – December 31, 2020
38,851,174
$
(48,776
)
$
1,905
$
—
(46,871
)
Net loss
—
(207
)
(4
)
—
(211
)
Issuance of time-based restricted
units
42,168
—
—
—
—
General partner contribution
—
—
3
—
3
Cash distributions
—
(775
)
(16
)
—
(791
)
Changes in fair values of commodity cash
flow hedges
—
—
—
816
816
Excess carrying value of the assets over
the purchase price paid by Martin Resource Management
—
(1,350
)
—
—
(1,350
)
Unit-based compensation
—
384
—
—
384
Purchase of treasury units
(7,156
)
(17
)
—
—
(17
)
Balances – December 31, 2021
38,802,750
(50,741
)
1,888
816
(48,037
)
Net loss
—
(10,127
)
(207
)
—
(10,334
)
Issuance of time-based restricted
units
48,000
—
—
—
—
Cash distributions
—
(777
)
(16
)
—
(793
)
Changes in fair values of commodity cash
flow hedges
—
—
—
(816
)
(816
)
Excess purchase price over carrying value
of acquired assets
—
374
—
—
374
Unit-based compensation
—
161
—
—
161
Balances – December 31, 2022
38,850,750
(61,110
)
1,665
—
(59,445
)
Net loss
—
(4,458
)
(91
)
—
(4,549
)
Issuance of time-based restricted
units
64,056
—
—
—
—
Cash distributions
—
(777
)
(16
)
—
(793
)
Unit-based compensation
—
163
—
—
163
Balances – December 31, 2023
38,914,806
$
(66,182
)
$
1,558
$
—
$
(64,624
)
MARTIN MIDSTREAM PARTNERS
L.P.
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(Dollars in thousands)
Year Ended December
31,
2023
2022
2021
Cash flows from operating activities:
Net loss
$
(4,549
)
$
(10,334
)
$
(211
)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization
49,895
56,280
56,751
Amortization and write-off of deferred
debt issue costs
3,978
3,152
3,367
Amortization of discount on notes
payable
2,200
—
—
Deferred income tax expense
4,186
5,744
2,432
(Gain) loss on disposition or sale of
property, plant, and equipment
(1,373
)
(5,669
)
534
Gain on involuntary conversion of
property, plant and equipment
—
—
(196
)
Loss on extinguishment of debt
5,121
—
—
Derivative (income) loss
—
(901
)
5,593
Net cash received (paid) for commodity
derivatives
—
85
(4,984
)
Unit-based compensation
163
161
384
Change in current assets and liabilities,
excluding effects of acquisitions and dispositions:
Accounts and other receivables
26,348
4,579
(31,448
)
Inventories
65,976
(47,678
)
(8,334
)
Due from affiliates
86
6,399
398
Other current assets
4,739
(1,479
)
(3,552
)
Trade and other accounts payable
(17,539
)
486
14,331
Product exchange payables
394
(1,374
)
1,033
Due to affiliates
(2,613
)
7,123
1,389
Income taxes payable
(13
)
280
(171
)
Other accrued liabilities
2,880
(2,087
)
(2,236
)
Change in other non-current assets and
liabilities
(2,411
)
1,381
649
Net cash provided by operating
activities
137,468
16,148
35,729
Cash flows from investing activities:
Payments for property, plant, and
equipment
(34,317
)
(27,237
)
(16,059
)
Payments for plant turnaround costs
(4,825
)
(5,176
)
(4,109
)
Proceeds from sale of property, plant, and
equipment
5,482
7,769
643
Proceeds from involuntary conversion of
property, plant and equipment
—
—
284
Net cash used in investing activities
(33,660
)
(24,644
)
(19,241
)
Cash flows from financing activities:
Payments of long-term debt
(632,197
)
(393,740
)
(333,790
)
Payments under finance lease
obligations
(9
)
(279
)
(2,707
)
Proceeds from long-term debt
543,489
404,650
316,500
General partner contributions
—
—
3
Excess purchase price over carrying value
of acquired assets
—
(1,285
)
—
Purchase of treasury units
—
—
(17
)
Payments of debt issuance costs
(14,289
)
(64
)
(592
)
Cash distributions paid
(793
)
(793
)
(791
)
Net cash provided by (used in) financing
activities
(103,799
)
8,489
(21,394
)
Net increase (decrease) in cash
9
(7
)
(4,906
)
Cash at beginning of year
45
52
4,958
Cash at end of year
$
54
$
45
$
52
MARTIN MIDSTREAM PARTNERS
L.P.
SEGMENT OPERATING
INCOME
(Dollars and volumes in
thousands, except BBL per day)
Terminalling and Storage
Segment
Comparative Results of Operations for
the Years Ended December 31, 2023 and 2022
Year Ended December
31,
Variance
Percent Change
2023
2022
(In thousands)
Revenues
$
95,459
$
92,612
$
2,847
3
%
Cost of products sold
75
19
56
295
%
Operating expenses
57,393
63,177
(5,784
)
(9
)%
Selling, general and administrative
expenses
2,070
1,967
103
5
%
Depreciation and amortization
21,030
26,094
(5,064
)
(19
)%
14,891
1,355
13,536
999
%
Other operating loss, net
(359
)
(166
)
(193
)
(116
)%
Operating income
$
14,532
$
1,189
$
13,343
1,122
%
Shore-based throughput volumes
(gallons)
162,363
85,017
77,346
91
%
Smackover refinery throughput volumes
(guaranteed minimum BBL per day)
6,500
6,500
—
—
%
Transportation Segment
Comparative Results of
Operations for the Years Ended December 31, 2023 and 2022
Year Ended December
31,
Variance
Percent Change
2023
2022
(In thousands)
Revenues
$
240,926
$
239,275
$
1,651
1
%
Operating expenses
184,334
176,198
8,136
5
%
Selling, general and administrative
expenses
9,787
8,215
1,572
19
%
Depreciation and amortization
14,879
14,567
312
2
%
31,926
40,295
(8,369
)
(21
)%
Other operating income, net
1,775
1,062
713
67
%
Operating income
$
33,701
$
41,357
$
(7,656
)
(19
)%
MARTIN MIDSTREAM PARTNERS
L.P.
SEGMENT OPERATING
INCOME
(Dollars and volumes in
thousands, except BBL per day)
Sulfur Services Segment
Comparative Results of Operations for
the Years Ended December 31, 2023 and 2022
Year Ended December
31,
2023
2022
Variance
Percent Change
(In thousands)
Revenues:
Services
$
13,430
$
12,337
$
1,093
9
%
Products
127,565
166,827
(39,262
)
(24
)%
Total revenues
140,995
179,164
(38,169
)
(21
)%
Cost of products sold
93,842
127,018
(33,176
)
(26
)%
Operating expenses
13,143
15,335
(2,192
)
(14
)%
Selling, general and administrative
expenses
5,925
6,081
(156
)
(3
)%
Depreciation and amortization
10,690
11,099
(409
)
(4
)%
17,395
19,631
(2,236
)
(11
)%
Other operating income, net
17
4,555
(4,538
)
(100
)%
Operating income
$
17,412
$
24,186
$
(6,774
)
(28
)%
Sulfur (long tons)
478.0
452.0
26.0
6
%
Fertilizer (long tons)
254.0
211.0
43.0
20
%
Sulfur services volumes (long tons)
732.0
663.0
69.0
10
%
Specialty Products Segment
Comparative Results of Operations for
the Years Ended December 31, 2023 and 2022
Year Ended December
31,
2023
2022
Variance
Percent Change
(In thousands)
Products revenues
$
346,863
$
540,636
(193,773
)
(36
)%
Cost of products sold
319,200
526,043
(206,843
)
(39
)%
Operating expenses
78
118
(40
)
(34
)%
Selling, general and administrative
expenses
7,120
8,728
(1,608
)
(18
)%
Depreciation and amortization
3,296
4,520
(1,224
)
(27
)%
17,169
1,227
15,942
1,299
%
Other operating income (loss), net
(60
)
218
(278
)
(128
)%
Operating income
$
17,109
$
1,445
$
15,664
1,084
%
NGL sales volumes (Bbls)
3,681
5,791
(2,110
)
(36
)%
Other specialty products volumes
(Bbls)
367
391
(24
)
(6
Total specialty products volumes
(Bbls)
4,048
6,182
(2,134
)
(35
)%
Non-GAAP Financial Measures
The following table reconciles the non-GAAP financial
measurements used by management to our most directly comparable
GAAP measures for the quarter and years ended December 31, 2023 and
2022, which represents EBITDA, adjusted EBITDA, adjusted EBITDA
after giving effect to the exit of the butane optimization
business, distributable cash flow, and adjusted free cash flow:
Reconciliation of Net Loss to
EBITDA, Adjusted EBITDA, and Adjusted EBITDA After Giving Effect to
the Exit of the Butane Optimization Business
Three Months Ended December
31,
Year Ended December
31,
2023
2022
2023
2022
(in thousands)
Net income (loss)
$
517
$
(375
)
$
(4,549
)
$
(10,334
)
Adjustments:
Interest expense
14,376
14,484
60,290
53,665
Income tax expense
2,299
2,458
5,918
7,927
Depreciation and amortization
12,224
13,273
49,895
56,280
EBITDA
29,416
29,840
111,554
107,538
Adjustments:
Gain on disposition of property, plant and
equipment
(277
)
(4,619
)
(1,373
)
(5,669
)
Loss on extinguishment of debt
—
—
5,121
—
Lower of cost or net realizable value and
other non-cash adjustments
—
(7,476
)
(12,850
)
12,850
Unit-based compensation
36
36
163
161
Adjusted EBITDA
29,175
17,781
102,615
114,880
Adjustments:
Plus: net loss associated with butane
optimization business
—
4,736
2,256
20,015
Plus: lower of cost or net realizable
value and other non-cash adjustments
—
5,976
12,850
(12,850
)
Adjusted EBITDA after giving effect to
the exit of the butane optimization business
$
29,175
$
28,493
$
117,721
122,045
Reconciliation of Net Cash
Provided by Operating Activities to Adjusted EBITDA, Adjusted
EBITDA After Giving Effect to the Exit of the Butane Optimization
Business, Distributable Cash Flow, and Adjusted Free Cash
Flow
Three Months Ended December
31,
Year Ended December
31,
2023
2022
2023
2022
(in thousands)
(in thousands)
Net cash provided by operating
activities
$
31,403
$
32,904
$
137,468
$
16,148
Interest expense 1
13,004
13,688
54,112
50,513
Current income tax expense
435
325
1,732
2,183
Lower of cost or net realizable value and
other non-cash adjustments
—
(7,476
)
(12,850
)
12,850
Commodity cash flow hedging gains
reclassified to earnings
—
—
—
901
Net cash received for closed commodity
derivative positions included in AOCI
—
—
—
(85
)
Changes in operating assets and
liabilities which (provided) used cash:
Accounts and other receivables,
inventories, and other current assets
1,336
(21,071
)
(97,149
)
38,179
Trade, accounts and other payables, and
other current liabilities
(18,394
)
(324
)
16,891
(4,428
)
Other
1,391
(265
)
2,411
(1,381
)
Adjusted EBITDA
29,175
17,781
102,615
114,880
Plus: net loss associated with butane
optimization business
—
4,735
2,256
20,015
Plus: lower of cost or net realizable
value and other non-cash adjustments
—
5,976
12,850
(12,850
)
Adjusted EBITDA after giving effect to
the exit of the butane optimization business
29,175
28,492
117,721
122,045
Adjustments:
Interest expense
(14,376
)
(14,484
)
(60,290
)
(53,665
)
Income tax expense
(2,299
)
(2,458
)
(5,918
)
(7,927
)
Deferred income taxes
1,864
2,133
4,186
5,744
Amortization of deferred debt issuance
costs
772
796
3,978
3,152
Amortization of discount on notes
payable
600
—
2,200
—
Payments for plant turnaround costs
(2,458
)
(914
)
(4,825
)
(5,176
)
Maintenance capital expenditures
(4,689
)
(4,526
)
(24,277
)
(19,074
)
Distributable Cash Flow
8,589
9,039
32,775
45,099
Principal payments under finance lease
obligations
—
(99
)
(9
)
(279
)
Expansion capital expenditures
(4,908
)
(1,401
)
(11,034
)
(6,883
)
Adjusted Free Cash Flow
$
3,681
$
7,539
$
21,732
37,937
(1) Net of amortization of debt issuance
costs and discount and premium, which are included in interest
expense but not included in net cash provided by operating
activities.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240214462592/en/
Sharon Taylor - Executive Vice President & Chief Financial
Officer (877) 256-6644 ir@martinmlp.com
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