- Total adjusted leverage of 3.95 times as of September 30,
2023
- Reported net loss of $1.1 million and $5.1 million for the
three and nine months ended September 30, 2023, respectively, which
includes a $5.1 million impact from the loss on extinguishment of
debt for the nine months ended September 30, 2023
- Reported adjusted EBITDA of $26.2 million and $88.6 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 three and nine months
ended September 30, 2023, respectively
- Reaffirms 2023 Annual Adjusted EBITDA Guidance of $115.4
million
- Declares quarterly cash distribution of $0.005 per common unit
for the quarter ended September 30, 2023, or $0.020 per common unit
annually
Martin Midstream Partners L.P. (Nasdaq:MMLP) (“MMLP” or the
"Partnership") today announced its financial results for the third
quarter of 2023.
Bob Bondurant, President and Chief Executive Officer of Martin
Midstream GP LLC, the general partner of the Partnership, stated,
“The Partnership’s financial results for the third quarter met
guidance as both the Specialty Products and Sulfur Services
segments outperformed but were offset by the Transportation segment
as certain industrial customers experienced challenges that
negatively impacted the ground transportation business. Our full
year 2023 adjusted EBITDA outlook, which does not include losses
related to the butane optimization business, remains unchanged at
$115.4 million, confirming the recent operational restructuring of
our refinery services business model to deliver stable and
sustainable cash flows. Looking to the future, we anticipate
increased earnings related to the joint venture with Samsung
C&T America and Dongjin USA, even as delays in the construction
of semiconductor manufacturing facilities may result in deferred
demand for electronic level sulfuric acid.
“During the first nine months of 2023, the Partnership,
utilizing free cash flow and a significant reduction in working
capital due to the exit from the butane optimization business,
reduced total debt by $53.6 million. As a result, adjusted leverage
was decreased to 3.95 times at September 30, 2023 compared to 4.53
times at December 31, 2022.”
THIRD QUARTER 2023 OPERATING RESULTS BY BUSINESS SEGMENT
TERMINALLING AND STORAGE (“T&S”)
T&S operating income (loss) for the three months ended
September 30, 2023 and 2022 was $3.1 million and ($0.1) million,
respectively.
Adjusted segment EBITDA for T&S was $8.2 million and $6.2
million for the three months ended September 30, 2023 and 2022,
respectively, reflecting contractual index-based fee increases
combined with reduced operating expenses across our divisions.
TRANSPORTATION
Transportation operating income for the three months ended
September 30, 2023 and 2022 was $6.7 million and $12.1 million,
respectively.
Adjusted segment EBITDA for Transportation was $9.5 million and
$15.1 million for the three months ended September 30, 2023 and
2022, respectively, primarily reflecting increased expenses
combined with lower mileage in our land transportation
division.
SULFUR SERVICES
Sulfur Services operating income (loss) for the three months
ended September 30, 2023 and 2022 was $2.7 million and ($6.7)
million, including a ($3.3) million inventory valuation write down,
respectively.
Adjusted segment EBITDA for Sulfur Services was $5.4 million and
($4.2) million for the three months ended September 30, 2023 and
2022, respectively, reflecting increased volumes and margins in
both our fertilizer and sulfur businesses.
SPECIALTY PRODUCTS
Specialty Products operating income (loss) for the three months
ended September 30, 2023 and 2022 was $6.0 million and ($13.3)
million, respectively. Included in the Specialty Products results
is an operating loss of $20.0 million for the three months ended
September 30, 2022, attributable to the butane optimization
business.
Adjusted segment EBITDA for Specialty Products was $6.8 million
and $6.0 million for the three months ended September 30, 2023 and
2022, respectively. Included in the Specialty Products results is
negative adjusted EBITDA of ($1.6) million for the three months
ended September 30, 2022, 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 $6.8 million and $7.6 million for the three months
ended September 30, 2023 and 2022, respectively, reflecting reduced
NGL margins.
UNALLOCATED SELLING, GENERAL AND ADMINISTRATIVE EXPENSE
(“USGA”)
USGA expenses included in operating income for the three months
ended September 30, 2023 and 2022 were $3.8 million and $4.3
million, respectively.
USGA expenses included in adjusted EBITDA for the three months
ended September 30, 2023 and 2022 were $3.8 million and $4.2
million, respectively, reflecting a reduction in employee-related
expenses.
CAPITALIZATION
At September 30, 2023, the Partnership had $462.5 million of
total debt outstanding, including $62.5 million drawn on its $175
million revolving credit facility maturing in 2027 and $400 million
of senior secured second lien notes due 2028. At September 30,
2023, the Partnership had liquidity of approximately $84.1 million
from available capacity under its revolving credit facility. The
Partnership’s leverage ratio, as calculated under the revolving
credit facility, was 3.95 times at September 30, 2023, compared to
4.14 times at June 30, 2023, a reduction of 0.19 times. The
Partnership was in compliance with all debt covenants as of
September 30, 2023.
QUARTERLY CASH DISTRIBUTION
The Partnership has declared a quarterly cash distribution of
$0.005 per unit for the quarter ended September 30, 2023. The
distribution is payable on November 14, 2023 to common unitholders
of record as of the close of business on November 7, 2023. The
ex-dividend date for the cash distribution is November 6, 2023.
QUALIFIED NOTICE TO NOMINEES
Partnership:
Martin Midstream Partners
L.P.
Unit Class:
Common
CUSIP #:
573331105
RE:
Qualified Notice Pursuant to U.S.
Treasury Regulation §1.1446-4
Record Date:
November 7, 2023
Payable Date:
November 14, 2023
Per Unit Amount:
$0.005
Section I: This announcement is intended to be a
qualified notice under Treasury Regulation Section 1.1446-4(b).
Brokers and nominees should treat one hundred percent (100.0%) of
the Partnership's distributions to non-U.S. investors as being
attributable to income that is effectively connected with a United
States trade or business. Accordingly, the Partnership's
distributions to non-U.S. investors are subject to federal income
tax withholding at the highest applicable effective tax rate.
Section II: The entire amount of the distribution
realized per U.S. Treasury Regulation 1.1446(f)-4(c)(2)(iii) is in
excess of cumulative net taxable income.
RESULTS OF OPERATIONS
The Partnership had a net loss for the three months ended
September 30, 2023 of $1.1 million, a loss of $0.03 per limited
partner unit. The Partnership had a net loss for the three months
ended September 30, 2022 of $28.0 million, a loss of $0.71 per
limited partner unit. Adjusted EBITDA for the three months ended
September 30, 2023 was $26.2 million compared to $18.8 million for
the three months ended September 30, 2022. Adjusted EBITDA after
giving effect to the May 2023 exit of the butane optimization
business for the three months ended September 30, 2023 was $26.2
million compared to $20.4 million for the three months ended
September 30, 2022. Net cash provided by (used in) operating
activities for the three months ended September 30, 2023 was $7.3
million, compared to ($45.2) million for the three months ended
September 30, 2022. Distributable cash flow for the three months
ended September 30, 2023 was $5.0 million compared to $(2.0)
million for the three months ended September 30, 2022.
The Partnership had a net loss for the nine months ended
September 30, 2023 of $5.1 million, a loss of $0.13 per limited
partner unit. The Partnership had a net loss for the nine months
ended September 30, 2022 of $10.0 million, a loss of $0.25 per
limited partner unit. Adjusted EBITDA for the nine months ended
September 30, 2023 was $73.4 million compared to $97.1 million for
the nine months ended September 30, 2022. Adjusted EBITDA after
giving effect to the May 2023 exit of the butane optimization
business for the nine months ended September 30, 2023 was $88.6
million compared to $93.6 million for the nine months ended
September 30, 2022. Net cash provided by (used in) operating
activities for the nine months ended September 30, 2023 was $106.1
million compared to ($16.8) million for the nine months ended
September 30, 2022. Distributable cash flow for the nine months
ended September 30, 2023 was $24.2 million compared to $36.1
million for the nine months ended September 30, 2022.
Revenues for the three months ended September 30, 2023 were
$176.7 million compared to $229.3 million for the three months
ended September 30, 2022. Revenues for the nine months ended
September 30, 2023 were $616.9 million compared to $775.5 million
for the nine months ended September 30, 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 third quarter 2023 to the
Partnership's adjusted EBITDA guidance for the third quarter
2023.
Investors' Conference Call
Date: Thursday, October 19, 2023 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 along with the Third Quarter
2023 Earnings Summary 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
MMLP, 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.
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. 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.
Adjusted free cash flow. 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 AND CONDENSED
BALANCE SHEETS
(Dollars in thousands)
September 30, 2023
December 31, 2022
(Unaudited)
(Audited)
Assets
Cash
$
54
$
45
Accounts and other receivables, less
allowance for doubtful accounts of $496 and $496, respectively
60,451
79,641
Inventories
41,699
109,798
Due from affiliates
2,096
8,010
Other current assets
7,647
13,633
Total current assets
111,947
211,127
Property, plant and equipment, at cost
909,946
903,535
Accumulated depreciation
(602,834
)
(584,245
)
Property, plant and equipment, net
307,112
319,290
Goodwill
16,671
16,671
Right-of-use assets
58,174
34,963
Deferred income taxes, net
12,064
14,386
Other assets, net
1,933
2,414
Total assets
$
507,901
$
598,851
Liabilities and Partners’
Capital (Deficit)
Current installments of long-term debt and
finance lease obligations
$
—
$
9
Trade and other accounts payable
43,909
68,198
Product exchange payables
775
32
Due to affiliates
8,143
8,947
Income taxes payable
461
665
Other accrued liabilities
27,687
33,074
Total current liabilities
80,975
110,925
Long-term debt, net
439,824
512,871
Operating lease liabilities
44,108
26,268
Other long-term obligations
7,973
8,232
Total liabilities
572,880
658,296
Commitments and contingencies
Partners’ capital (deficit)
(64,979
)
(59,445
)
Total liabilities and partners' capital
(deficit)
$
507,901
$
598,851
MARTIN MIDSTREAM PARTNERS
L.P.
CONSOLIDATED AND CONDENSED
STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except
per unit amounts)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2023
2022
2023
2022
Revenues:
Terminalling and storage *
$
22,202
$
19,988
$
64,744
$
59,808
Transportation *
55,223
58,993
165,696
161,535
Sulfur services
3,358
3,085
10,073
9,253
Product sales: *
Specialty products
66,695
121,456
277,836
409,215
Sulfur services
29,219
25,783
98,513
135,691
95,914
147,239
376,349
544,906
Total revenues
176,697
229,305
616,862
775,502
Costs and expenses:
Cost of products sold: (excluding
depreciation and amortization)
Specialty products *
56,298
126,951
245,863
380,602
Sulfur services *
19,461
25,230
66,932
100,078
Terminalling and storage *
23
6
54
15
75,782
152,187
312,849
480,695
Expenses:
Operating expenses *
64,375
66,158
187,857
186,735
Selling, general and administrative *
10,424
10,273
30,043
31,420
Depreciation and amortization
12,223
13,721
37,671
43,007
Total costs and expenses
162,804
242,339
568,420
741,857
Other operating income, net
811
790
1,096
1,050
Operating income (loss)
14,704
(12,244
)
49,538
34,695
Other income (expense):
Interest expense, net
(14,994
)
(13,906
)
(45,914
)
(39,181
)
Loss on extinguishment of debt
—
—
(5,121
)
—
Other, net
17
(2
)
50
(4
)
Total other expense
(14,977
)
(13,908
)
(50,985
)
(39,185
)
Net loss before taxes
(273
)
(26,152
)
(1,447
)
(4,490
)
Income tax expense
(788
)
(1,891
)
(3,619
)
(5,469
)
Net loss
(1,061
)
(28,043
)
(5,066
)
(9,959
)
Less general partner's interest in net
loss
21
561
101
199
Less loss allocable to unvested restricted
units
4
90
16
39
Limited partners' interest in net loss
$
(1,036
)
$
(27,392
)
$
(4,949
)
$
(9,721
)
Net loss per unit attributable to limited
partners - basic
$
(0.03
)
$
(0.71
)
$
(0.13
)
$
(0.25
)
Net loss per unit attributable to limited
partners - diluted
$
(0.03
)
$
(0.71
)
$
(0.13
)
$
(0.25
)
Weighted average limited partner units -
basic
38,772,266
38,726,388
38,771,451
38,725,933
Weighted average limited partner units -
diluted
38,772,266
38,726,388
38,771,451
38,725,933
*Related Party Transactions Shown
Below
MARTIN MIDSTREAM PARTNERS
L.P.
CONSOLIDATED STATEMENTS OF
OPERATIONS
(Unaudited)
(Dollars in thousands, except
per unit amounts)
*Related Party Transactions Included
Above
Three Months Ended
Nine Months Ended
September 30,
September 30,
2023
2022
2023
2022
Revenues:*
Terminalling and storage
$
18,542
$
16,065
$
54,121
$
49,685
Transportation
7,426
7,111
20,214
20,862
Product Sales
122
63
8,544
486
Costs and expenses:*
Cost of products sold: (excluding
depreciation and amortization)
Specialty products
9,896
10,196
27,324
30,047
Sulfur services
2,787
2,616
8,139
7,884
Terminalling and storage
23
5
54
14
Expenses:
Operating expenses
25,606
23,856
74,491
68,682
Selling, general and administrative
8,477
7,627
23,549
23,933
MARTIN MIDSTREAM PARTNERS
L.P.
CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME (LOSS)
(Unaudited)
(Dollars in thousands)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2023
2022
2023
2022
Net loss
$
(1,061
)
$
(28,043
)
$
(5,066
)
$
(9,959
)
Commodity cash flow hedging (gains)
reclassified to earnings
—
(167
)
—
(816
)
Comprehensive loss
$
(1,061
)
$
(28,210
)
$
(5,066
)
$
(10,775
)
MARTIN MIDSTREAM PARTNERS
L.P.
CONSOLIDATED AND CONDENSED
STATEMENTS OF CAPITAL (DEFICIT)
(Unaudited)
(Dollars in thousands)
Partners’ Capital
(Deficit)
Common Limited
General Partner Amount
Accumulated Other
Comprehensive Income (Loss)
Units
Amount
Total
Balances - June 30, 2023
38,914,806
$
(65,334
)
$
1,577
$
—
$
(63,757
)
Net loss
—
(1,040
)
(21
)
—
(1,061
)
Cash distributions
—
(194
)
(4
)
—
(198
)
Unit-based compensation
—
37
—
—
37
Balances - September 30, 2023
38,914,806
(66,531
)
1,552
—
$
(64,979
)
Balances - December 31, 2022
38,850,750
$
(61,110
)
$
1,665
$
—
$
(59,445
)
Net loss
—
(4,965
)
(101
)
—
(5,066
)
Issuance of restricted units
64,056
—
—
—
—
Cash distributions
—
(583
)
(12
)
—
(595
)
Unit-based compensation
—
127
—
—
127
Balances - September 30, 2023
38,914,806
$
(66,531
)
$
1,552
$
—
$
(64,979
)
Partners’ Capital
(Deficit)
Common Limited
General Partner Amount
Accumulated Other
Comprehensive Income (Loss)
Units
Amount
Total
Balances - June 30, 2022
38,850,750
$
(33,263
)
$
2,242
$
167
$
(30,854
)
Net loss
—
(27,482
)
(561
)
—
(28,043
)
Issuance of restricted units
—
—
—
—
—
Cash distributions
—
(195
)
(4
)
—
(199
)
Unit-based compensation
—
46
—
—
46
Gain recognized in AOCI on commodity cash
flow hedges
—
—
—
(167
)
(167
)
Balances - September 30, 2022
38,850,750
$
(60,894
)
$
1,677
$
—
$
(59,217
)
Balances - December 31, 2021
38,802,750
$
(50,741
)
$
1,888
$
816
$
(48,037
)
Net income
—
(9,760
)
(199
)
—
(9,959
)
Issuance of restricted units
48,000
—
—
—
—
Cash distributions
—
(583
)
(12
)
—
(595
)
Unit-based compensation
—
125
—
—
125
Excess purchase price over carrying value
of acquired assets
—
65
—
—
65
Gain reclassified from AOCI into income on
commodity cash flow hedges
—
—
—
(816
)
(816
)
Balances - September 30, 2022
38,850,750
$
(60,894
)
$
1,677
$
—
$
(59,217
)
MARTIN MIDSTREAM PARTNERS
L.P.
CONSOLIDATED AND CONDENSED
STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
Nine Months Ended
September 30,
2023
2022
Cash flows from operating activities:
Net loss
$
(5,066
)
$
(9,959
)
Adjustments to reconcile net loss to net
cash provided by (used in) operating activities:
Depreciation and amortization
37,671
43,007
Amortization of deferred debt issuance
costs
3,206
2,356
Amortization of debt discount
1,600
—
Deferred income tax expense
2,322
3,611
Gain on disposition or sale of property,
plant and equipment, net
(1,096
)
(1,050
)
Loss on extinguishment of debt
5,121
—
Derivative income
—
(901
)
Net cash paid for commodity
derivatives
—
85
Non cash unit-based compensation
127
125
Change in current assets and liabilities,
excluding effects of acquisitions and dispositions:
Accounts and other receivables
19,190
7,076
Inventories
68,099
(73,518
)
Due from affiliates
5,914
12,016
Other current assets
5,282
(4,824
)
Trade and other accounts payable
(24,709
)
6,053
Product exchange payables
743
(695
)
Due to affiliates
(804
)
11,953
Income taxes payable
(204
)
228
Other accrued liabilities
(10,311
)
(13,435
)
Change in other non-current assets and
liabilities
(1,020
)
1,116
Net cash provided by (used in) operating
activities
106,065
(16,756
)
Cash flows from investing activities:
Payments for property, plant and
equipment
(25,294
)
(21,019
)
Payments for plant turnaround costs
(2,367
)
(4,262
)
Proceeds from sale of property, plant and
equipment
5,183
2,209
Net cash used in investing activities
(22,478
)
(23,072
)
Cash flows from financing activities:
Payments of long-term debt
(579,197
)
(299,089
)
Payments under finance lease
obligations
(9
)
(180
)
Proceeds from long-term debt
510,489
341,000
Payment of debt issuance costs
(14,266
)
(30
)
Excess purchase price over carrying value
of acquired assets
—
(1,285
)
Cash distributions paid
(595
)
(595
)
Net cash provided by (used in) financing
activities
(83,578
)
39,821
Net increase (decrease) in cash
9
(7
)
Cash at beginning of period
45
52
Cash at end of period
$
54
$
45
Non-cash additions to property, plant and
equipment
$
2,369
$
2,240
MARTIN MIDSTREAM PARTNERS
L.P.
SEGMENT OPERATING
INCOME
(Unaudited)
(Dollars and volumes in
thousands, except BBL per day)
Terminalling and Storage
Segment
Comparative Results of Operations for
the Three Months Ended September 30, 2023 and 2022
Three Months Ended September
30,
Variance
Percent Change
2023
2022
(In thousands, except BBL per
day)
Revenues
$
23,973
$
23,034
$
939
4
%
Cost of products sold
23
6
17
283
%
Operating expenses
15,078
16,418
(1,340
)
(8
)%
Selling, general and administrative
expenses
628
457
171
37
%
Depreciation and amortization
5,102
6,200
(1,098
)
(18
)%
3,142
(47
)
3,189
6,785
%
Other operating loss, net
(35
)
—
(35
)
Operating income (loss)
$
3,107
$
(47
)
$
3,154
6,711
%
Shore-based throughput volumes
(gallons)
40,655
14,658
25,997
177
%
Smackover refinery throughput volumes
(guaranteed minimum BBL per day)
6,500
6,500
—
—
%
Comparative Results of Operations for
the Nine Months Ended September 30, 2023 and 2022
Nine Months Ended September
30,
Variance
Percent Change
2023
2022
(In thousands, except BBL per
day)
Revenues
$
71,798
$
69,027
$
2,771
4
%
Cost of products sold
54
15
39
260
%
Operating expenses
43,318
47,372
(4,054
)
(9
)%
Selling, general and administrative
expenses
1,510
1,491
19
1
%
Depreciation and amortization
15,896
20,372
(4,476
)
(22
)%
11,020
(223
)
11,243
5,042
%
Other operating loss, net
(359
)
(35
)
(324
)
(926
)%
Operating income (loss)
$
10,661
$
(258
)
$
10,919
4,232
%
Shore-based throughput volumes
(gallons)
126,438
42,201
84,237
200
%
Smackover refinery throughput volumes
(guaranteed minimum) (BBL per day)
6,500
6,500
—
—
%
Transportation Segment
Comparative Results of Operations for
the Three Months Ended September 30, 2023 and 2022
Three Months Ended September
30,
Variance
Percent Change
2023
2022
(In thousands)
Revenues
$
58,541
$
63,514
$
(4,973
)
(8
)%
Operating expenses
46,465
46,499
(34
)
—
%
Selling, general and administrative
expenses
2,571
1,962
609
31
%
Depreciation and amortization
3,674
3,598
76
2
%
5,831
11,455
(5,624
)
(49
)%
Other operating income, net
846
618
228
37
%
Operating income
$
6,677
$
12,073
$
(5,396
)
(45
)%
Comparative Results of Operations for
the Nine Months Ended September 30, 2023 and 2022
Nine Months Ended September
30,
Variance
Percent Change
2023
2022
(In thousands)
Revenues
$
178,875
$
176,313
$
2,562
1
%
Operating expenses
136,940
130,229
6,711
5
%
Selling, general and administrative
expenses
7,101
5,920
1,181
20
%
Depreciation and amortization
11,196
10,761
435
4
%
$
23,638
$
29,403
$
(5,765
)
(20
)%
Other operating income, net
1,497
901
596
66
%
Operating income
$
25,135
$
30,304
$
(5,169
)
(17
)%
Sulfur Services Segment
Comparative Results of Operations for
the Three Months Ended September 30, 2023 and 2022
Three Months Ended September
30,
Variance
Percent Change
2023
2022
(In thousands)
Revenues:
Services
$
3,358
$
3,085
$
273
9
%
Products
29,219
25,783
3,436
13
%
Total revenues
32,577
28,868
3,709
13
%
Cost of products sold
21,972
27,201
(5,229
)
(19
)%
Operating expenses
3,510
3,978
(468
)
(12
)%
Selling, general and administrative
expenses
1,713
1,509
204
14
%
Depreciation and amortization
2,639
2,786
(147
)
(5
)%
2,743
(6,606
)
9,349
142
%
Other operating loss, net
—
(70
)
70
100
%
Operating income (loss)
$
2,743
$
(6,676
)
$
9,419
141
%
Sulfur (long tons)
155
95
60
63
%
Fertilizer (long tons)
58
24
34
142
%
Total sulfur services volumes (long
tons)
213
119
94
79
%
Comparative Results of Operations for
the Nine Months Ended September 30, 2023 and 2022
Nine Months Ended September
30,
Variance
Percent Change
2023
2022
(In thousands)
Revenues:
Services
$
10,073
$
9,253
$
820
9
%
Products
98,513
135,691
(37,178
)
(27
)%
Total revenues
108,586
144,944
(36,358
)
(25
)%
Cost of products sold
74,062
105,640
(31,578
)
(30
)%
Operating expenses
9,595
11,233
(1,638
)
(15
)%
Selling, general and administrative
expenses
4,292
4,550
(258
)
(6
)%
Depreciation and amortization
8,072
8,377
(305
)
(4
)%
12,565
15,144
(2,579
)
(17
)%
Other operating income (loss), net
17
(34
)
51
150
%
Operating income
$
12,582
$
15,110
$
(2,528
)
(17
)%
Sulfur (long tons)
352
327
25
8
%
Fertilizer (long tons)
192
170
22
13
%
Total sulfur services volumes (long
tons)
544
497
47
9
%
Specialty Products Segment
Comparative Results of Operations for
the Three Months Ended September 30, 2023 and 2022
Three Months Ended September
30,
Variance
Percent Change
2023
2022
(In thousands)
Products revenues
$
66,720
$
121,484
$
(54,764
)
(45
)%
Cost of products sold
58,177
131,790
(73,613
)
(56
)%
Operating expenses
23
26
(3
)
(12
)%
Selling, general and administrative
expenses
1,698
2,107
(409
)
(19
)%
Depreciation and amortization
808
1,137
(329
)
(29
)%
6,014
(13,576
)
19,590
144
%
Other operating income, net
—
242
(242
)
(100
)%
Operating income (loss)
$
6,014
$
(13,334
)
$
19,348
145
%
NGL sales volumes (Bbls)
509
1,180
(671
)
(57
)%
Other specialty products volumes
(Bbls)
106
110
(4
)
(4
)%
Total specialty products volumes
(Bbls)
615
1,290
(675
)
(52
)%
Comparative Results of Operations for
the Nine Months Ended September 30, 2023 and 2022
Nine Months Ended September
30,
Variance
Percent Change
2023
2022
(In thousands)
Products revenues
$
277,895
$
409,310
$
(131,415
)
(32
)%
Cost of products sold
256,898
396,865
(139,967
)
(35
)%
Operating expenses
55
98
(43
)
(44
)%
Selling, general and administrative
expenses
5,287
6,757
(1,470
)
(22
)%
Depreciation and amortization
2,507
3,497
(990
)
(28
)%
13,148
2,093
11,055
528
%
Other operating income (loss), net
(59
)
218
(277
)
(127
)%
Operating income
$
13,089
$
2,311
$
10,778
466
%
NGL sales volumes (Bbls)
3,027
3,930
(903
)
(23
)%
Other specialty products volumes
(Bbls)
280
311
(31
)
(10
)%
Total specialty products volumes
(Bbls)
3,307
4,241
(934
)
(22
)%
Unallocated Selling, General and
Administrative Expenses
Comparative Results of Operations for
the Three and Nine Months Ended September 30, 2023 and 2022
Three Months Ended
Nine Months Ended
September 30,
Variance
Percent Change
September 30,
Variance
Percent Change
2023
2022
2023
2022
(In thousands)
(In thousands)
Indirect selling, general and
administrative expenses
$
3,837
$
4,260
$
(423
)
(10
)%
$
11,929
$
12,772
$
(843
)
(7
)%
Non-GAAP Financial Measures
The following tables reconcile the non-GAAP financial
measurements used by management to our most directly comparable
GAAP measures for the three and nine months ended September 30,
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
Nine Months Ended
September 30,
September 30,
2023
2022
2023
2022
(in thousands)
(in thousands)
Net loss
$
(1,061
)
$
(28,043
)
$
(5,066
)
$
(9,959
)
Adjustments:
Interest expense
14,994
13,906
45,914
39,181
Income tax expense
788
1,891
3,619
5,469
Depreciation and amortization
12,223
13,721
37,671
43,007
EBITDA
26,944
1,475
82,138
77,698
Adjustments:
Gain on disposition or sale of property,
plant and equipment
(811
)
(790
)
(1,096
)
(1,050
)
Loss on extinguishment of debt
—
—
5,121
—
Lower of cost or net realizable value and
other non-cash adjustments
—
18,084
(12,850
)
20,326
Unit-based compensation
37
46
127
125
Adjusted EBITDA
$
26,170
$
18,815
$
73,440
$
97,099
Adjustments:
Less: net loss associated with butane
optimization business
—
20,032
2,255
15,280
Plus: lower of cost or net realizable
value and other non-cash adjustments
—
$
(18,457
)
12,850
(18,826
)
Adjusted EBITDA after giving effect to
the exit of the butane optimization business
$
26,170
$
20,390
$
88,545
$
93,553
Reconciliation of Net Cash
Provided by (Used in) 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
Nine Months Ended
September 30,
September 30,
2023
2022
2023
2022
(in thousands)
(in thousands)
Net cash provided by (used in)
operating activities
$
7,291
$
(45,207
)
$
106,065
$
(16,756
)
Interest expense 1
13,623
13,118
41,108
36,825
Current income tax expense
333
584
1,297
1,858
Lower of cost or net realizable value and
other non-cash adjustments
—
18,084
(12,850
)
20,326
Commodity cash flow hedging gains
reclassified to earnings
—
167
—
901
Net cash paid 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
(5,983
)
(5,651
)
(98,485
)
59,250
Trade, accounts and other payables, and
other current liabilities
11,155
38,691
35,285
(4,104
)
Other
(249
)
(971
)
1,020
(1,116
)
Adjusted EBITDA
26,170
18,815
73,440
97,099
Adjustments:
Less: net loss associated with butane
optimization business
—
20,032
2,255
15,280
Plus: lower of cost or net realizable
value and other non-cash adjustments
—
(18,457
)
12,850
(18,826
)
Adjusted EBITDA after giving effect to
the exit of the butane optimization business
26,170
20,390
88,545
93,553
Adjustments:
Interest expense
(14,994
)
(13,906
)
(45,914
)
(39,181
)
Income tax expense
(788
)
(1,891
)
(3,619
)
(5,469
)
Deferred income taxes
455
1,307
2,322
3,611
Amortization of debt discount
600
—
1,600
—
Amortization of deferred debt issuance
costs
771
788
3,206
2,356
Payments for plant turnaround costs
(1,706
)
(2,662
)
(2,367
)
(4,262
)
Maintenance capital expenditures
(5,516
)
(5,994
)
(19,588
)
(14,548
)
Distributable cash flow
4,992
(1,968
)
24,185
36,060
Principal payments under finance lease
obligations
—
(61
)
(9
)
(180
)
Expansion capital expenditures
(3,444
)
(926
)
(6,126
)
(5,482
)
Adjusted free cash flow
$
1,548
$
(2,955
)
$
18,050
$
30,398
1 Net of amortization of debt issuance
costs and discount, which are included in interest expense but not
included in net cash provided by (used in) operating
activities.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231018892173/en/
Sharon Taylor - Executive Vice President & Chief Financial
Officer (877) 256-6644 investor.relations@mmlp.com
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