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

  • Third quarter 2021 financial performance beats internal projections despite impact from Hurricane Ida
  • Reported net loss of $6.9 million and $11.0 million for the three and nine months ended September 30, 2021, respectively
  • Reported adjusted EBITDA of $21.5 million and $74.9 million for the three and nine months ended September 30, 2021, respectively
  • Generated distributable cash flow of $5.2 and $25.3 million for the three and nine months ended September 30, 2021, respectively
  • Declares quarterly distribution of $0.005 or $0.02 per unit annually 

Martin Midstream Partners L.P. (Nasdaq:MMLP) (the "Partnership") today announced its financial results for the third quarter of 2021.

Bob Bondurant, President and Chief Executive Officer of Martin Midstream GP LLC, the general partner of the Partnership stated, “The Partnership’s third quarter performance exceeded our expectations, and we now expect to meet the top end of the range of our 2021 financial guidance for adjusted EBITDA of $95 to $102 million.

“On August 29, 2021, Hurricane Ida made landfall in Louisiana as a Category 4 storm with sustained winds of 150 miles per hour. Despite this extremely dangerous event, I am happy to report there were no injuries to our employees, although some did suffer damage to homes and property. The Partnership sustained minimal damage to assets in and around Port Fourchon. Further, in the days and weeks following the storm we were able to provide alternative storage and terminalling services from our Galveston terminal as needed.

“Turning to our results, in the Terminalling and Storage segment, demand for lubricants and grease products remains strong and our distribution lanes have been able to fulfill customer requirements even as the supply chain has been disordered. Within the Sulfur Services segment, the pure sulfur business continues to improve along with increased refinery utilization. Further downstream fertilizer sales and margins are outperforming as commodity prices remain strong for corn and cotton. In Transportation, our marine equipment utilization continues to increase as fundamentals in the industry improve and demand for trucking services remains elevated resulting in improved economics for the business segment.

“Finally, as is typical, the Natural Gas Liquids segment substantially increased butane inventory volumes in the third quarter to meet our customers' requirements throughout the winter gasoline blending season. Since this inventory build is concurrent with our weakest cash flow quarter due to the seasonality of both the fertilizer and butane businesses, a temporary rise in leverage occurs. Accordingly, at September 30, 2021, leverage increased to 5.5 times from 5.3 times at June 30, 2021. However, this increase is transitory and leverage is expected to significantly decrease by year-end, driven by the Partnership’s reduced working capital needs and strong financial performance.”

THIRD QUARTER 2021 OPERATING RESULTS BY BUSINESS SEGMENT

TERMINALLING AND STORAGE (“T&S”)

T&S Operating Income for the three months ended September 30, 2021 and 2020 was $4.4 million and $7.0 million, respectively.

Adjusted segment EBITDA for T&S was $11.2 million and $14.2 million, for the three month periods ended September 30, 2021 and 2020, respectively, reflecting increased utilities expense coupled with expired capital recovery fees at the Smackover Refinery, the disposition of our Mega Lubricants business in the 4th quarter of 2020, and increased utilities and repairs and maintenance expense at our Specialty Terminals.

TRANSPORTATION

Transportation Operating Income for the three months ended September 30, 2021 and 2020 was $3.9 million and $1.1 million, respectively.

Adjusted segment EBITDA for Transportation was $7.6 million and $5.5 million for the three months ended September 30, 2021 and 2020, respectively, reflecting higher rates counterbalanced by rising labor and operating costs along with increased land transportation load count, offset by lower marine day rates coupled with a reduction in marine equipment.

SULFUR SERVICES

Sulfur Services Operating Income for the three months ended September 30, 2021 and 2020 was $2.3 million and $5.6 million, respectively.

Adjusted segment EBITDA for Sulfur Services was $4.9 million and $4.2 million for the three months ended September 30, 2021 and 2020, respectively, reflecting increased fertilizer volumes and margins offset by lower sulfur volumes during the third quarter of 2021.

NATURAL GAS LIQUIDS (“NGL”)

NGL Operating Income for the three months ended September 30, 2021 and 2020 was $1.6 million and $1.8 million, respectively.

Adjusted segment EBITDA for NGL was $1.8 million and $2.8 million for the three months ended September 30, 2021 and 2020, respectively, primarily reflecting a decrease in volumes as 2020 benefited from an increased seasonal demand, offset by higher NGL margins.

UNALLOCATED SELLING, GENERAL AND ADMINISTRATIVE EXPENSE (“USGA”)

USGA expenses included in operating income for the three months ended September 30, 2021 and 2020 were $4.0 million and $4.5 million, respectively.

USGA expenses included in adjusted EBITDA for the three months ended September 30, 2021 and 2020 were $4.0 million and $4.2 million, respectively, primarily reflecting a reduction in overhead allocated from Martin Resource Management.

LIQUIDITY

At September 30, 2021, the Partnership had $208.5 million drawn on its $275 million revolving credit facility, an increase of $29 million from June 30, 2021. The Partnership’s leverage ratio, as calculated under the revolving credit facility, was 5.5 times and 5.3 times on September 30, 2021 and June 30, 2021, respectively. The Partnership was in compliance with all debt covenants as of September 30, 2021.

QUARTERLY CASH DISTRIBUTION

The Partnership has declared a quarterly cash distribution of $0.005 per unit for the quarter ended September 30, 2021. The distribution is payable on November 12, 2021 to common unitholders of record as of the close of business on November 5, 2021. The ex-dividend date for the cash distribution is November 4, 2021.

QUALIFIED NOTICE TO NOMINEES

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

COVID-19 RESPONSE

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

RESULTS OF OPERATIONS

The Partnership had a net loss for the three months ended September 30, 2021 of $6.9 million, a loss of $0.17 per limited partner unit. The Partnership had a net loss for the three months ended September 30, 2020 of $10.8 million, a loss of $0.27 per limited partner unit. Adjusted EBITDA for the three months ended September 30, 2021 was $21.5 million compared to the three months ended September 30, 2020 of $22.5 million. Distributable cash flow for the three months ended September 30, 2021 was $5.2 million compared to the three months ended September 30, 2020 of $8.1 million.

The Partnership had a net loss for the nine months ended September 30, 2021 of $11.0 million, a loss of $0.28 per limited partner unit. The Partnership had a net loss for the nine months ended September 30, 2020 of $4.2 million, a loss of $0.11 per limited partner unit. Adjusted EBITDA for the nine months ended September 30, 2021 was $74.9 million compared to the nine months ended September 30, 2020 of $77.5 million. Distributable cash flow for the nine months ended September 30, 2021 was $25.3 million compared to the nine months ended September 30, 2020 of $38.9 million.

Revenues for the three months ended September 30, 2021 were $211.3 million compared to the three months ended September 30, 2020 of $152.5 million. Revenues for the nine months ended September 30, 2021 were $596.5 million compared to the nine months ended September 30, 2020 of $492.1 million.

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

An attachment included in the Current Report on Form 8-K to which this announcement is included, contains a comparison of the Partnership’s adjusted EBITDA for the third quarter 2021 to the Partnership's adjusted EBITDA for the third quarter 2020.

Investors' Conference Call

 

Date: Thursday, October 21, 2021

Time: 8:00 a.m. CT (please dial in by 7:55 a.m.)

Dial In #: (833) 900-2251

Conference ID: 8571037

 

Replay Dial In # (800) 585-8367 – Conference ID: 8571037

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

About Martin Midstream Partners

Martin Midstream Partners L.P., headquartered in Kilgore, Texas, is a publicly traded limited partnership with a diverse set of operations focused primarily in the United States Gulf Coast region. The Partnership's primary business lines include: (1) terminalling, processing, storage, and packaging services for petroleum products and by-products; (2) land and marine transportation services for petroleum products and by-products, chemicals, and specialty products; (3) sulfur and sulfur-based products processing, manufacturing, marketing and distribution; and (4) natural gas liquids marketing, distribution and transportation services. To learn more, visit www.MMLP.com. Follow Martin Midstream Partners L.P. on LinkedIn and Facebook.

Forward-Looking Statements

Statements about the Partnership’s outlook and all other statements in this release other than historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements and all references to guidance or to financial or operational estimates or projections rely on a number of assumptions concerning future events and are subject to a number of uncertainties, including (i) the current and potential impacts of the COVID-19 pandemic generally, on an industry-specific basis, and on the Partnership’s specific operations and business, (ii) the effects of the continued volatility of commodity prices and the related macroeconomic and political environment, and (iii) other factors, many of which are outside its control, which could cause actual results to differ materially from such statements. While the Partnership believes that the assumptions concerning future events are reasonable, it cautions that there are inherent difficulties in anticipating or predicting certain important factors. A discussion of these factors, including risks and uncertainties, is set forth in the Partnership’s annual and quarterly reports filed from time to time with the Securities and Exchange Commission. The Partnership disclaims any intention or obligation to revise any forward-looking statements, including financial estimates, whether as a result of new information, future events, or otherwise except where required to do so by law.

Use of Non-GAAP Financial Information

The Partnership's management uses a variety of financial and operational measurements other than its financial statements prepared in accordance with United States Generally Accepted Accounting Principles ("GAAP") to analyze its performance. These include: (1) net income before interest expense, income tax expense, and depreciation and amortization ("EBITDA"), (2) adjusted EBITDA, (3) distributable cash flow and (4) adjusted free cash flow. The Partnership's management views these measures as important performance measures of core profitability for its operations and the ability to generate and distribute cash flow, and as key components of its internal financial reporting. The Partnership's management believes investors benefit from having access to the same financial measures that management uses.

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

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

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

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

MMLP-F

MARTIN MIDSTREAM PARTNERS L.P.

CONSOLIDATED AND CONDENSED BALANCE SHEETS

(Dollars in thousands)

 

September 30,

2021

 

December 31,

2020

 

(Unaudited)

 

(Audited)

Assets

 

 

 

Cash

$

6,783

 

 

$

4,958

 

Accounts and other receivables, less allowance for doubtful accounts of $272 and $261, respectively

75,676

 

 

52,748

 

Inventories

98,139

 

 

54,122

 

Due from affiliates

10,133

 

 

14,807

 

Other current assets

10,441

 

 

8,991

 

Total current assets

201,172

 

 

135,626

 

 

 

 

 

Property, plant and equipment, at cost

894,767

 

 

889,108

 

Accumulated depreciation

(543,309)

 

 

(509,237)

 

Property, plant and equipment, net

351,458

 

 

379,871

 

 

 

 

 

Goodwill

16,823

 

 

16,823

 

Right-of-use assets

21,267

 

 

22,260

 

Deferred income taxes, net

20,834

 

 

22,253

 

Other assets, net

2,684

 

 

2,805

 

Total assets

$

614,238

 

 

$

579,638

 

 

 

 

 

Liabilities and Partners’ Capital (Deficit)

 

 

 

Current installments of long-term debt and finance lease obligations

$

240

 

 

$

31,497

 

Trade and other accounts payable

73,273

 

 

51,900

 

Product exchange payables

1,387

 

 

373

 

Due to affiliates

5,469

 

 

435

 

Income taxes payable

401

 

 

556

 

Fair value of derivatives

5,049

 

 

207

 

Other accrued liabilities

21,696

 

 

34,407

 

Total current liabilities

107,515

 

 

119,375

 

 

 

 

 

Long-term debt, net

547,090

 

 

484,597

 

Finance lease obligations

108

 

 

289

 

Operating lease liabilities

14,960

 

 

15,181

 

Other long-term obligations

8,721

 

 

7,067

 

Total liabilities

678,394

 

 

626,509

 

 

 

 

 

Commitments and contingencies

 

 

 

Partners’ capital (deficit)

(58,157)

 

 

(46,871)

 

Accumulated other comprehensive loss

(5,999)

 

 

 

Total partners’ capital (deficit)

(64,156)

 

 

(46,871)

 

Total liabilities and partners' capital (deficit)

$

614,238

 

 

$

579,638

 

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,

 

2021

 

2020

 

2021

 

2020

Revenues:

 

 

 

 

 

 

 

Terminalling and storage *

$

18,980

 

 

$

20,706

 

 

$

56,060

 

 

$

61,088

 

Transportation *

39,079

 

 

31,938

 

 

103,820

 

 

102,364

 

Sulfur services

2,950

 

 

2,915

 

 

8,849

 

 

8,744

 

Product sales: *

 

 

 

 

 

 

 

Natural gas liquids

91,764

 

 

52,350

 

 

257,081

 

 

164,860

 

Sulfur services

27,887

 

 

18,965

 

 

95,109

 

 

74,879

 

Terminalling and storage

30,598

 

 

25,659

 

 

75,606

 

 

80,119

 

 

150,249

 

 

96,974

 

 

427,796

 

 

319,858

 

Total revenues

211,258

 

 

152,533

 

 

596,525

 

 

492,054

 

 

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

 

 

Cost of products sold: (excluding depreciation and amortization)

 

 

 

 

 

 

 

Natural gas liquids *

85,137

 

 

44,908

 

 

225,862

 

 

139,036

 

Sulfur services *

20,266

 

 

13,313

 

 

65,657

 

 

46,167

 

Terminalling and storage *

24,167

 

 

19,124

 

 

58,895

 

 

64,242

 

 

129,570

 

 

77,345

 

 

350,414

 

 

249,445

 

Expenses:

 

 

 

 

 

 

 

Operating expenses *

50,098

 

 

43,105

 

 

142,045

 

 

138,589

 

Selling, general and administrative *

9,739

 

 

10,339

 

 

29,308

 

 

30,659

 

Depreciation and amortization

13,945

 

 

15,276

 

 

42,862

 

 

45,858

 

Total costs and expenses

203,352

 

 

146,065

 

 

564,629

 

 

464,551

 

 

 

 

 

 

 

 

 

Other operating income (loss), net

61

 

 

23

 

 

(610)

 

 

2,548

 

Gain on involuntary conversion of property, plant and equipment

186

 

 

4,522

 

 

186

 

 

4,522

 

Operating income

8,153

 

 

11,013

 

 

31,472

 

 

34,573

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

Interest expense, net

(14,110)

 

 

(12,943)

 

 

(40,372)

 

 

(32,245)

 

Gain on retirement of senior unsecured notes

 

 

 

 

 

 

3,484

 

Loss on exchange of senior unsecured notes

 

 

(8,516)

 

 

 

 

(8,516)

 

Other, net

 

 

 

 

(1)

 

 

7

 

Total other expense

(14,110)

 

 

(21,459)

 

 

(40,373)

 

 

(37,270)

 

 

 

 

 

 

 

 

 

Net loss before taxes

(5,957)

 

 

(10,446)

 

 

(8,901)

 

 

(2,697)

 

Income tax expense

(954)

 

 

(373)

 

 

(2,111)

 

 

(1,510)

 

Net loss

(6,911)

 

 

(10,819)

 

 

(11,012)

 

 

(4,207)

 

Less general partner's interest in net loss

138

 

 

216

 

 

220

 

 

84

 

Less loss allocable to unvested restricted units

20

 

 

53

 

 

30

 

 

8

 

Limited partners' interest in net loss

$

(6,753)

 

 

$

(10,550)

 

 

$

(10,762)

 

 

$

(4,115)

 

 

 

 

 

 

 

 

 

Net loss per unit attributable to limited partners - basic

$

(0.17)

 

 

$

(0.27)

 

 

$

(0.28)

 

 

$

(0.11)

 

Net loss per unit attributable to limited partners - diluted

$

(0.17)

 

 

$

(0.27)

 

 

$

(0.28)

 

 

$

(0.11)

 

Weighted average limited partner units - basic

38,687,874

 

38,661,852

 

38,689,434

 

38,654,891

Weighted average limited partner units - diluted

38,687,874

 

38,661,852

 

38,689,434

 

38,654,891

 

*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,

 

2021

 

2020

 

2021

 

2020

Revenues:*

 

 

 

 

 

 

 

Terminalling and storage

$

15,866

 

 

$

15,902

 

 

$

46,741

 

 

$

47,718

 

Transportation

5,564

 

 

5,514

 

 

14,463

 

 

16,801

 

Product Sales

68

 

 

69

 

 

253

 

 

199

 

Costs and expenses:*

 

 

 

 

 

 

 

Cost of products sold: (excluding depreciation and amortization)

 

 

 

 

 

 

 

Sulfur services

2,441

 

 

2,512

 

 

7,379

 

 

7,833

 

Terminalling and storage

7,259

 

 

4,303

 

 

18,863

 

 

14,329

 

Expenses:

 

 

 

 

 

 

 

Operating expenses

20,088

 

 

18,915

 

 

58,046

 

 

60,126

 

Selling, general and administrative

7,659

 

 

8,356

 

 

23,624

 

 

24,723

 

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,

 

2021

 

2020

 

2021

 

2020

 

 

 

 

 

 

 

 

Net loss

$

(6,911)

 

 

$

(10,819)

 

 

$

(11,012)

 

 

$

(4,207)

 

Changes in fair values of commodity cash flow hedges

(5,999)

 

 

 

 

(5,999)

 

 

 

Comprehensive loss

$

(12,910)

 

 

$

(10,819)

 

 

$

(17,011)

 

 

$

(4,207)

 

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 - January 1, 2020

38,863,389

 

 

$

(38,342)

 

 

$

2,146

 

 

$

 

 

$

(36,196)

 

Net loss

 

 

(4,123)

 

 

(84)

 

 

 

 

(4,207)

 

Issuance of restricted units

81,000

 

 

 

 

 

 

 

 

 

Forfeiture of restricted units

(84,134)

 

 

 

 

 

 

 

 

 

Cash distributions

 

 

(5,019)

 

 

(102)

 

 

 

 

(5,121)

 

Unit-based compensation

 

 

1,070

 

 

 

 

 

 

1,070

 

Purchase of treasury units

(7,748)

 

 

(9)

 

 

 

 

 

 

(9)

 

Balances - September 30, 2020

38,852,507

 

 

$

(46,423)

 

 

$

1,960

 

 

$

 

 

$

(44,463)

 

 

 

 

 

 

 

 

 

 

 

Balances - January 1, 2021

38,851,174

 

 

$

(48,776)

 

 

$

1,905

 

 

$

 

 

$

(46,871)

 

Net loss

 

 

(10,792)

 

 

(220)

 

 

 

 

(11,012)

 

Issuance of restricted units

42,168

 

 

 

 

 

 

 

 

 

Forfeiture of restricted units

(83,436)

 

 

 

 

 

 

 

 

 

Cash distributions

 

 

(581)

 

 

(12)

 

 

 

 

(593)

 

Unit-based compensation

 

 

336

 

 

 

 

 

 

336

 

Changes in fair values of commodity cash flow hedges

 

 

 

 

 

 

(5,999)

 

 

(5,999)

 

Purchase of treasury units

(7,156)

 

 

(17)

 

 

 

 

 

 

(17)

 

Balances - September 30, 2021

38,802,750

 

 

$

(59,830)

 

 

$

1,673

 

 

$

(5,999)

 

 

$

(64,156)

 

MARTIN MIDSTREAM PARTNERS L.P.

CONSOLIDATED AND CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)

(Dollars in thousands)

 

 

Nine Months Ended

 

September 30,

 

2021

 

2020

Cash flows from operating activities:

 

 

 

Net loss

$

(11,012)

 

 

$

(4,207)

 

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

 

 

 

Depreciation and amortization

42,862

 

 

45,858

 

Amortization of deferred debt issuance costs

2,585

 

 

2,674

 

Amortization of premium on notes payable

 

 

(191)

 

Deferred income tax expense

1,419

 

 

1,202

 

Loss on sale of property, plant and equipment, net

610

 

 

153

 

Gain on involuntary conversion of property, plant and equipment

(186)

 

 

(4,522)

 

Non-cash impact related to exchange of senior unsecured notes

 

 

(749)

 

Gain on retirement of senior unsecured notes

 

 

(3,484)

 

Derivative (income) loss

1,825

 

 

(815)

 

Net cash received (paid) for commodity derivatives

(2,982)

 

 

539

 

Non-cash unit-based compensation

336

 

 

1,070

 

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

 

 

 

Accounts and other receivables

(22,924)

 

 

30,012

 

Product exchange receivables

 

 

(212)

 

Inventories

(44,353)

 

 

(15,184)

 

Due from affiliates

4,674

 

 

(1,103)

 

Other current assets

(1,912)

 

 

(6,130)

 

Trade and other accounts payable

21,092

 

 

(17,117)

 

Product exchange payables

1,014

 

 

(1,278)

 

Due to affiliates

5,034

 

 

(1,003)

 

Income taxes payable

(155)

 

 

(137)

 

Other accrued liabilities

(10,536)

 

 

(5,534)

 

Change in other non-current assets and liabilities

203

 

 

(692)

 

Net cash provided by (used in) operating activities

(12,406)

 

 

19,150

 

 

 

 

 

Cash flows from investing activities:

 

 

 

Payments for property, plant and equipment

(11,449)

 

 

(23,705)

 

Payments for plant turnaround costs

(2,679)

 

 

(637)

 

Proceeds from involuntary conversion of property, plant and equipment

274

 

 

7,203

 

Proceeds from sale of property, plant and equipment

225

 

 

4,392

 

Net cash used in investing activities

(13,629)

 

 

(12,747)

 

 

 

 

 

Cash flows from financing activities:

 

 

 

Payments of long-term debt

(211,790)

 

 

(253,637)

 

Payments under finance lease obligations

(2,648)

 

 

(4,021)

 

Proceeds from long-term debt

243,500

 

 

259,019

 

Purchase of treasury units

(17)

 

 

(9)

 

Payment of debt issuance costs

(592)

 

 

(3,628)

 

Cash distributions paid

(593)

 

 

(5,121)

 

Net cash provided by (used in) financing activities

27,860

 

 

(7,397)

 

 

 

 

 

Net increase (decrease) in cash

1,825

 

 

(994)

 

Cash at beginning of period

4,958

 

 

2,856

 

Cash at end of period

$

6,783

 

 

$

1,862

 

Non-cash additions to property, plant and equipment

$

749

 

 

$

1,432

 

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, 2021 and 2020

 

 

Three Months Ended

September 30,

 

Variance

 

Percent

Change

 

2021

 

2020

 

 

 

(In thousands, except BBL per day)

 

 

Revenues:

 

 

 

 

 

 

 

Services

$

20,628

 

 

$

22,512

 

 

$

(1,884)

 

 

(8)

%

Products

30,598

 

 

25,676

 

 

4,922

 

 

19

%

Total revenues

51,226

 

 

48,188

 

 

3,038

 

 

6

%

 

 

 

 

 

 

 

 

Cost of products sold

24,618

 

 

20,381

 

 

4,237

 

 

21

%

Operating expenses

13,789

 

 

12,064

 

 

1,725

 

 

14

%

Selling, general and administrative expenses

1,528

 

 

1,537

 

 

(9)

 

 

(1)

%

Depreciation and amortization

7,049

 

 

7,294

 

 

(245)

 

 

(3)

%

 

4,242

 

 

6,912

 

 

(2,670)

 

 

(39)

%

Other operating income, net

11

 

 

1

 

 

10

 

 

1,000

%

Gain on involuntary conversion of property, plant and equipment

186

 

 

62

 

 

124

 

 

200

%

Operating income

$

4,439

 

 

$

6,975

 

 

$

(2,536)

 

 

(36)

%

 

 

 

 

 

 

 

 

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 Nine Months Ended September 30, 2021 and 2020

 

 

Nine Months Ended

September 30,

 

Variance

 

Percent

Change

 

2021

 

2020

 

 

 

(In thousands, except BBL per day)

 

 

Revenues:

 

 

 

 

 

 

 

Services

$

60,945

 

 

$

66,115

 

 

$

(5,170)

 

 

(8)

%

Products

75,639

 

 

80,183

 

 

(4,544)

 

 

(6)

%

Total revenues

136,584

 

 

146,298

 

 

(9,714)

 

 

(7)

%

 

 

 

 

 

 

 

 

Cost of products sold

60,318

 

 

68,066

 

 

(7,748)

 

 

(11)

%

Operating expenses

39,246

 

 

37,269

 

 

1,977

 

 

5

%

Selling, general and administrative expenses

4,495

 

 

4,594

 

 

(99)

 

 

(2)

%

Depreciation and amortization

21,150

 

 

22,022

 

 

(872)

 

 

(4)

%

 

11,375

 

 

14,347

 

 

(2,972)

 

 

(21)

%

Other operating income (loss), net

6

 

 

(3,053)

 

 

3,059

 

 

100

%

Gain on involuntary conversion of property, plant and equipment

186

 

 

62

 

 

124

 

 

200

%

Operating income

$

11,567

 

 

$

11,356

 

 

$

211

 

 

2

%

 

 

 

 

 

 

 

 

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

60,000

 

 

60,000

 

 

 

 

%

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

6,500

 

 

6,500

 

 

 

 

%

Transportation Segment

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

 

 

Three Months Ended

September 30,

 

Variance

 

Percent Change

 

2021

 

2020

 

 

 

(In thousands)

 

 

Revenues

$

42,568

 

 

$

35,712

 

 

$

6,856

 

 

19

%

Operating expenses

33,053

 

 

28,144

 

 

4,909

 

 

17

%

Selling, general and administrative expenses

1,920

 

 

2,050

 

 

(130)

 

 

(6)

%

Depreciation and amortization

3,710

 

 

4,412

 

 

(702)

 

 

(16)

%

 

3,885

 

 

1,106

 

 

2,779

 

 

251

%

Other operating income, net

42

 

 

21

 

 

21

 

 

100

%

Operating income

$

3,927

 

 

$

1,127

 

 

$

2,800

 

 

248

%

Comparative Results of Operations for the Nine Months Ended September 30, 2021 and 2020

 

 

Nine Months Ended

September 30,

 

Variance

 

Percent Change

 

2021

 

2020

 

 

 

(In thousands)

 

 

Revenues

$

114,886

 

 

$

116,145

 

 

$

(1,259)

 

 

(1)

%

Operating expenses

94,042

 

 

91,637

 

 

2,405

 

 

3

%

Selling, general and administrative expenses

5,578

 

 

6,243

 

 

(665)

 

 

(11)

%

Depreciation and amortization

12,039

 

 

13,020

 

 

(981)

 

 

(8)

%

 

$

3,227

 

 

$

5,245

 

 

$

(2,018)

 

 

(38)

%

Other operating income (loss), net

59

 

 

(1,174)

 

 

1,233

 

 

105

%

Operating income

$

3,286

 

 

$

4,071

 

 

$

(785)

 

 

(19)

%

Sulfur Services Segment

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

 

 

Three Months Ended

September 30,

 

Variance

 

Percent Change

 

2021

 

2020

 

 

 

(In thousands)

 

 

Revenues:

 

 

 

 

 

 

 

Services

$

2,950

 

 

$

2,915

 

 

$

35

 

 

1

%

Products

27,887

 

 

18,965

 

 

8,922

 

 

47

%

Total revenues

30,837

 

 

21,880

 

 

8,957

 

 

41

%

 

 

 

 

 

 

 

 

Cost of products sold

21,799

 

 

14,141

 

 

7,658

 

 

54

%

Operating expenses

2,849

 

 

2,501

 

 

348

 

 

14

%

Selling, general and administrative expenses

1,321

 

 

1,166

 

 

155

 

 

13

%

Depreciation and amortization

2,594

 

 

2,953

 

 

(359)

 

 

(12)

%

 

2,274

 

 

1,119

 

 

1,155

 

 

103

%

Other operating income, net

8

 

 

1

 

 

7

 

 

700

%

Operating income

$

2,282

 

 

$

1,120

 

 

$

1,162

 

 

104

%

 

 

 

 

 

 

 

 

Sulfur (long tons)

145

 

 

154

 

 

(9)

 

 

(6)

%

Fertilizer (long tons)

57

 

 

44

 

 

13

 

 

30

%

Total sulfur services volumes (long tons)

202

 

 

198

 

 

4

 

 

2

%

Comparative Results of Operations for the Nine Months Ended September 30, 2021 and 2020

 

 

Nine Months Ended

September 30,

 

Variance

 

Percent

Change

 

2021

 

2020

 

 

 

(In thousands)

 

 

Revenues:

 

 

 

 

 

 

 

Services

$

8,849

 

 

$

8,744

 

 

$

105

 

 

1

%

Products

95,109

 

 

74,892

 

 

20,217

 

 

27

%

Total revenues

103,958

 

 

83,636

 

 

20,322

 

 

24

%

 

 

 

 

 

 

 

 

Cost of products sold

69,619

 

 

49,546

 

 

20,073

 

 

41

%

Operating expenses

7,662

 

 

8,553

 

 

(891)

 

 

(10)

%

Selling, general and administrative expenses

3,777

 

 

3,535

 

 

242

 

 

7

%

Depreciation and amortization

7,882

 

 

8,978

 

 

(1,096)

 

 

(12)

%

 

15,018

 

 

13,024

 

 

1,994

 

 

15

%

Other operating income, net

14

 

 

6,777

 

 

(6,763)

 

 

(100)

%

Gain on involuntary conversion of property, plant and equipment

 

 

4,460

 

 

(4,460)

 

 

(100)

%

Operating income

$

15,032

 

 

$

24,261

 

 

$

(9,229)

 

 

(38)

%

 

 

 

 

 

 

 

 

Sulfur (long tons)

364

 

 

503

 

 

(139)

 

 

(28)

%

Fertilizer (long tons)

236

 

 

209

 

 

27

 

 

13

%

Total sulfur services volumes (long tons)

600

 

 

712

 

 

(112)

 

 

(16)

%

Natural Gas Liquids Segment

 

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

 

 

Three Months Ended

September 30,

 

Variance

 

Percent

Change

 

2021

 

2020

 

 

 

(In thousands)

 

 

Products revenues

$

91,764

 

 

$

52,350

 

 

$

39,414

 

 

75

%

Cost of products sold

87,551

 

 

47,723

 

 

39,828

 

 

83

%

Operating expenses

1,088

 

 

1,039

 

 

49

 

 

5

%

Selling, general and administrative expenses

954

 

 

1,117

 

 

(163)

 

 

(15)

%

Depreciation and amortization

592

 

 

617

 

 

(25)

 

 

(4)

%

Operating income

$

1,579

 

 

$

1,854

 

 

$

(275)

 

 

(15)

%

 

 

 

 

 

 

 

 

NGL sales volumes (Bbls)

1,435

 

 

1,723

 

 

(288)

 

 

(17)

%

Comparative Results of Operations for the Nine Months Ended September 30, 2021 and 2020
 

 

Nine Months Ended

September 30,

 

Variance

 

Percent Change

 

2021

 

2020

 

 

 

(In thousands)

 

 

Products revenues

$

257,081

 

 

$

164,865

 

 

$

92,216

 

 

56

%

Cost of products sold

234,239

 

 

148,562

 

 

85,677

 

 

58

%

Operating expenses

3,144

 

 

3,128

 

 

16

 

 

1

%

Selling, general and administrative expenses

3,858

 

 

3,194

 

 

664

 

 

21

%

Depreciation and amortization

1,791

 

 

1,838

 

 

(47)

 

 

(3)

%

 

14,049

 

 

8,143

 

 

5,906

 

 

73

%

Other operating loss, net

(689)

 

 

(2)

 

 

(687)

 

 

(34,350)

%

Operating income

$

13,360

 

 

$

8,141

 

 

$

5,219

 

 

64

%

 

 

 

 

 

 

 

 

NGL sales volumes (Bbls)

4,839

 

 

5,892

 

 

(1,053)

 

 

(18)

%

Unallocated Selling, General and Administrative Expenses

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

 

 

Three Months Ended

September 30,

 

Variance

 

Percent

Change

 

Nine Months Ended

September 30,

 

Variance

 

Percent

Change

 

2021

 

2020

 

 

 

2021

 

2020

 

 

 

(In thousands)

 

 

 

(In thousands)

 

 

Unallocated selling, general and administrative expenses

$

4,074

 

 

$

4,523

 

 

$

(449)

 

 

(10)

%

 

$

11,773

 

 

$

13,256

 

 

$

(1,483)

 

 

(11)

%

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 nine months ended September 30, 2021 and 2020.

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

 

 

Three Months Ended

 

Nine Months Ended

 

September 30,

 

September 30,

 

2021

 

2020

 

2021

 

2020

 

(in thousands)

 

(in thousands)

Net loss

$

(6,911)

 

 

$

(10,819)

 

 

$

(11,012)

 

 

$

(4,207)

 

Adjustments:

 

 

 

 

 

 

 

Interest expense, net

14,110

 

 

12,943

 

 

40,372

 

 

32,245

 

Income tax expense

954

 

 

373

 

 

2,111

 

 

1,510

 

Depreciation and amortization

13,945

 

 

15,276

 

 

42,862

 

 

45,858

 

EBITDA

22,098

 

 

17,773

 

 

74,333

 

 

75,406

 

Adjustments:

 

 

 

 

 

 

 

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

(61)

 

 

(22)

 

 

610

 

 

153

 

Gain on involuntary conversion of property, plant and equipment

(186)

 

 

(4,522)

 

 

(186)

 

 

(4,522)

 

Unrealized mark-to-market on commodity derivatives

(412)

 

 

393

 

 

(207)

 

 

(276)

 

Non-cash insurance related accruals

 

 

 

 

 

 

250

 

Lower of cost or market adjustments

 

 

35

 

 

 

 

370

 

Loss on exchange of senior unsecured notes

 

 

8,516

 

 

 

 

8,516

 

Gain on repurchase of senior unsecured notes

 

 

 

 

 

 

(3,484)

 

Non-cash unit-based compensation

48

 

 

361

 

 

336

 

 

1,070

 

Adjusted EBITDA

21,487

 

 

22,534

 

 

74,886

 

 

77,483

 

Adjustments:

 

 

 

 

 

 

 

Interest expense, net

(14,110)

 

 

(12,943)

 

 

(40,372)

 

 

(32,245)

 

Income tax expense

(954)

 

 

(373)

 

 

(2,111)

 

 

(1,510)

 

Amortization of debt premium

 

 

(38)

 

 

 

 

(191)

 

Amortization of deferred debt issuance costs

1,064

 

 

1,683

 

 

2,585

 

 

2,674

 

Deferred income tax expense

661

 

 

184

 

 

1,419

 

 

1,202

 

Payments for plant turnaround costs

(985)

 

 

(406)

 

 

(2,679)

 

 

(637)

 

Maintenance capital expenditures

(1,945)

 

 

(2,576)

 

 

(8,386)

 

 

(7,882)

 

Distributable Cash Flow

$

5,218

 

 

$

8,065

 

 

$

25,342

 

 

$

38,894

 

Adjustments:

 

 

 

 

 

 

 

Expansion capital expenditures

$

(1,367)

 

 

$

(1,951)

 

 

$

(3,344)

 

 

$

(9,882)

 

Principal payments under finance lease obligations

(57)

 

 

(799)

 

 

(2,648)

 

 

(4,021)

 

Adjusted Free Cash Flow

$

3,794

 

 

$

5,315

 

 

$

19,350

 

 

$

24,991

 

 

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