Martin Midstream Partners Reports 2018 Third Quarter Financial Results
- Third Quarter Net Income of
$39.4 Million including$48.6 Million Gain from Sale of Interest in WTLPG - Agreement to
Acquire Martin Transport, Inc. for$135.0 Million Plus a Potential$10.0 Million Earn-Out - Acquisition is Expected to Strengthen Distribution Coverage Ratio
- Management Reiterates Support for Current Distribution Level
“MTI transports petroleum products, liquid petroleum gas, chemicals, sulfur and other products, as well as owns twenty-three terminals located throughout the
“In the first twelve months of operation, the acquisition is expected to contribute approximately
“For the twelve months ended
“As expected during the third quarter, our debt level rose due to the seasonal butane inventory build in our
“Looking ahead to the fourth quarter, our butane optimization business will begin capturing cash flows from forward sales, the marine transportation division looks to continue improved performance relative to guidance, and the beginning of seasonal demand for fertilizer products should all provide cash flow strength. Added together with anticipated lower than forecasted maintenance capital expenditures, our distribution coverage ratio will rebound, as it historically does, in the fourth quarter. However, due to market weakness that has affected fertilizer margins throughout 2018, at this time we are lowering our estimate to approximately 0.90 times at year end 2018.”
The Partnership had a net loss from continuing operations for the third quarter 2018 of
The Partnership had a net loss from continuing operations for the nine months ended
The Partnership's distributable cash flow from continuing operations for the third quarter 2018 was
The Partnership's distributable cash flow from continuing operations for the nine months ended
Revenues for the third quarter 2018 were
On
The Partnership had net income from discontinued operations for the three months ended
The Partnership had net income from discontinued operations for the nine months ended
Distributable cash flow and adjusted EBITDA from discontinued operations were
Distributable cash flow and adjusted EBITDA from discontinued operations were
Distributable cash flow, EBITDA and adjusted EBITDA are non-GAAP financial measures which are explained in greater detail below under the heading "Use of Non-GAAP Financial Information." The Partnership has also included below a table entitled "Reconciliation of EBITDA, Adjusted EBITDA, and Distributable Cash Flow" in order to show the components of these non-GAAP financial measures and their reconciliation to the most comparable GAAP measurement.
Included with this press release are the Partnership's consolidated and condensed financial statements as of and for the three and nine months ended
An attachment accompanying this announcement is available at http://resource.globenewswire.com/Resource/Download/11d265c1-1ed8-4b41-870c-121bc4484f21.
About
MTI was incorporated in 1988 to transport petroleum products, liquid petroleum gas, molten sulfur, sulfuric acid, paper mill liquids, chemical, dry bulk and various other bulk liquid commodities. As of the end of
As a member of the Responsible Care Partnership Program, MTI is dedicated to the safe operations of its transportation fleet and providing quality service to its customers.
Advisors
The following advisors served in their respective roles for the transaction:
Investors' Conference Call
A conference call to review the third quarter results will be held on Thursday, October 25, 2018 at 8:00 a.m. Central Time. The live conference call will be available by calling (877) 878-2695. For a limited time, an audio replay of the conference call will be available by calling (855) 859-2056. The conference ID is 2995789. An archive of the replay will be on Martin Midstream Partners’ website at www.martinmidstream.com.
About
The Partnership is a publicly traded limited partnership with a diverse set of operations focused primarily in the
Forward-Looking Statements
Statements about the Partnership's outlook and all other statements in this release other than historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements and all references to financial estimates rely on a number of assumptions concerning future events and are subject to a number of uncertainties and other factors, many of which are outside the Partnership's control, which could cause actual results to differ materially from such statements. While the Partnership believes that the assumptions concerning future events are reasonable, it cautions that there are inherent difficulties in anticipating or predicting certain important factors. A discussion of these factors, including risks and uncertainties, is set forth in the Partnership's annual and quarterly reports filed from time to time with the
Use of Non-GAAP Financial Information
The Partnership's management uses a variety of financial and operational measurements other than its financial statements prepared in accordance with United States Generally Accepted Accounting Principles ("GAAP") to analyze its performance. These include: (1) net income before interest expense, income tax expense, and depreciation and amortization ("EBITDA"), (2) adjusted EBITDA and (3) distributable cash flow. The Partnership's management views these measures as important performance measures of core profitability for its operations and the ability to generate and distribute cash flow, and as key components of its internal financial reporting. The Partnership's management believes investors benefit from having access to the same financial measures that management uses.
EBITDA and Adjusted EBITDA. 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. Distributable cash flow is a significant performance measure used by the Partnership's management and by external users of its financial statements, such as investors, commercial banks and research analysts, to compare basic cash flows generated by the Partnership to the cash distributions it expects to pay unitholders. Distributable cash flow is also an important financial measure for the Partnership's unitholders since it serves as an indicator of the Partnership's success in providing a cash return on investment. Specifically, this financial measure indicates to investors whether or not the Partnership is generating cash flow at a level that can sustain or support an increase in its quarterly distribution rates. Distributable cash flow is also a quantitative standard used throughout the investment community with respect to publicly-traded partnerships because the value of a unit of such an entity is generally determined by the unit's yield, which in turn is based on the amount of cash distributions the entity pays to a unitholder.
EBITDA, adjusted EBITDA and distributable 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.
Additional information concerning the Partnership is available on the Partnership's website at www.martinmidstream.com or by contacting:
(877) 256-6644
CONSOLIDATED AND CONDENSED BALANCE SHEETS
(Dollars in thousands)
September 30, 2018 |
December 31, 2017 |
||||||
(Unaudited) | (Audited) | ||||||
Assets | |||||||
Cash | $ | 3,186 | $ | 27 | |||
Accounts and other receivables, less allowance for doubtful accounts of $347 and $314, respectively | 72,280 | 107,242 | |||||
Product exchange receivables | 185 | 29 | |||||
Inventories (Note 6) | 134,059 | 97,252 | |||||
Due from affiliates | 22,933 | 23,668 | |||||
Other current assets | 4,921 | 4,866 | |||||
Assets held for sale (Note 4) | 6,152 | 9,579 | |||||
Total current assets | 243,716 | 242,663 | |||||
Property, plant and equipment, at cost | 1,279,365 | 1,253,065 | |||||
Accumulated depreciation | (465,079 | ) | (421,137 | ) | |||
Property, plant and equipment, net | 814,286 | 831,928 | |||||
Goodwill | 17,296 | 17,296 | |||||
Investment in WTLPG (Note 7) | — | 128,810 | |||||
Other assets, net (Note 9) | 25,751 | 32,801 | |||||
Total assets | $ | 1,101,049 | $ | 1,253,498 | |||
Liabilities and Partners’ Capital | |||||||
Trade and other accounts payable | $ | 71,176 | $ | 92,567 | |||
Product exchange payables | 9,647 | 11,751 | |||||
Due to affiliates | 3,651 | 3,168 | |||||
Income taxes payable | 448 | 510 | |||||
Fair value of derivatives (Note 10) | 2,968 | 72 | |||||
Other accrued liabilities (Note 9) | 18,876 | 26,340 | |||||
Total current liabilities | 106,766 | 134,408 | |||||
Long-term debt, net (Note 8) | 698,680 | 812,632 | |||||
Other long-term obligations | 10,718 | 8,217 | |||||
Total liabilities | 816,164 | 955,257 | |||||
Commitments and contingencies (Note 15) | |||||||
Partners’ capital (Note 11) | 284,885 | 298,241 | |||||
Total partners’ capital | 284,885 | 298,241 | |||||
Total liabilities and partners' capital | $ | 1,101,049 | $ | 1,253,498 |
These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in the Partnership's Quarterly Report on Form 10-Q to be filed with the
CONSOLIDATED AND CONDENSED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per unit amounts)
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Revenues: | |||||||||||||||
Terminalling and storage * | $ | 24,354 | $ | 25,752 | $ | 72,508 | $ | 75,105 | |||||||
Marine transportation * | 12,727 | 11,407 | 36,920 | 36,661 | |||||||||||
Natural gas services* | 11,232 | 14,253 | 40,392 | 43,756 | |||||||||||
Sulfur services | 2,787 | 2,850 | 8,361 | 8,550 | |||||||||||
Product sales: * | |||||||||||||||
Natural gas services | 101,919 | 83,831 | 351,725 | 284,154 | |||||||||||
Sulfur services | 27,981 | 24,174 | 98,565 | 95,728 | |||||||||||
Terminalling and storage | 38,047 | 30,861 | 111,351 | 96,421 | |||||||||||
167,947 | 138,866 | 561,641 | 476,303 | ||||||||||||
Total revenues | 219,047 | 193,128 | 719,822 | 640,375 | |||||||||||
Costs and expenses: | |||||||||||||||
Cost of products sold: (excluding depreciation and amortization) | |||||||||||||||
Natural gas services * | 99,346 | 77,368 | 329,945 | 255,745 | |||||||||||
Sulfur services * | 21,363 | 19,716 | 73,998 | 65,406 | |||||||||||
Terminalling and storage * | 33,801 | 27,372 | 99,967 | 85,398 | |||||||||||
154,510 | 124,456 | 503,910 | 406,549 | ||||||||||||
Expenses: | |||||||||||||||
Operating expenses * | 32,628 | 43,552 | 95,592 | 109,478 | |||||||||||
Selling, general and administrative * | 9,257 | 9,085 | 27,339 | 27,816 | |||||||||||
Depreciation and amortization | 18,741 | 20,286 | 58,842 | 65,948 | |||||||||||
Total costs and expenses | 215,136 | 197,379 | 685,683 | 609,791 | |||||||||||
Other operating loss | (384 | ) | (187 | ) | (876 | ) | (327 | ) | |||||||
Operating income (loss) | 3,527 | (4,438 | ) | 33,263 | 30,257 | ||||||||||
Other income (expense): | |||||||||||||||
Interest expense, net | (13,140 | ) | (12,538 | ) | (39,591 | ) | (34,677 | ) | |||||||
Other, net | 18 | 55 | 18 | 605 | |||||||||||
Total other expense | (13,122 | ) | (12,483 | ) | (39,573 | ) | (34,072 | ) | |||||||
Net loss before taxes | (9,595 | ) | (16,921 | ) | (6,310 | ) | (3,815 | ) | |||||||
Income tax expense | (91 | ) | (108 | ) | (372 | ) | (301 | ) | |||||||
Loss from continuing operations | (9,686 | ) | (17,029 | ) | (6,682 | ) | (4,116 | ) | |||||||
Income from discontinued operations, net of income taxes | 49,132 | 743 | 51,700 | 2,402 | |||||||||||
Net income (loss) | 39,446 | (16,286 | ) | 45,018 | (1,714 | ) | |||||||||
Less general partner's interest in net (income) loss | (789 | ) | 325 | (900 | ) | 34 | |||||||||
Less (income) loss allocable to unvested restricted units | (27 | ) | 38 | (29 | ) | — | |||||||||
Limited partners' interest in net income (loss) | $ | 38,630 | $ | (15,923 | ) | $ | 44,089 | $ | (1,680 | ) | |||||
These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in the Partnership's Quarterly Report on Form 10-Q to be filed with the
*Related Party Transactions Shown Below
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per unit amounts)
*Related Party Transactions Included Above
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Revenues:* | |||||||||||||||
Terminalling and storage | $ | 19,619 | $ | 21,910 | $ | 60,151 | $ | 61,945 | |||||||
Marine transportation | 4,009 | 4,098 | 11,727 | 12,610 | |||||||||||
Natural gas services | — | 4 | — | 122 | |||||||||||
Product Sales | 180 | 828 | 1,248 | 2,982 | |||||||||||
Costs and expenses:* | |||||||||||||||
Cost of products sold: (excluding depreciation and amortization) | |||||||||||||||
Natural gas services | 2,856 | 3,033 | 10,273 | 14,836 | |||||||||||
Sulfur services | 4,337 | 3,555 | 13,208 | 10,997 | |||||||||||
Terminalling and storage | 7,392 | 4,817 | 21,959 | 14,003 | |||||||||||
Expenses: | |||||||||||||||
Operating expenses | 14,051 | 15,858 | 41,774 | 48,686 | |||||||||||
Selling, general and administrative | 6,834 | 6,495 | 21,053 | 20,563 |
These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in the Partnership's Quarterly Report on Form 10-Q to be filed with the
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per unit amounts)
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Allocation of net income (loss) attributable to: | |||||||||||||||
Limited partner interest: | |||||||||||||||
Continuing operations | $ | (9,486 | ) | $ | (16,649 | ) | $ | (6,544 | ) | $ | (4,034 | ) | |||
Discontinued operations | 48,116 | 726 | 50,633 | 2,354 | |||||||||||
$ | 38,630 | $ | (15,923 | ) | $ | 44,089 | $ | (1,680 | ) | ||||||
General partner interest: | |||||||||||||||
Continuing operations | $ | (193 | ) | $ | (340 | ) | $ | (134 | ) | $ | (82 | ) | |||
Discontinued operations | 982 | 15 | 1,034 | 48 | |||||||||||
$ | 789 | $ | (325 | ) | $ | 900 | $ | (34 | ) | ||||||
Net income (loss) per unit attributable to limited partners: | |||||||||||||||
Basic: | |||||||||||||||
Continuing operations | $ | (0.24 | ) | $ | (0.44 | ) | $ | (0.17 | ) | $ | (0.10 | ) | |||
Discontinued operations | 1.24 | 0.02 | 1.30 | 0.06 | |||||||||||
$ | 1.00 | $ | (0.42 | ) | $ | 1.13 | $ | (0.04 | ) | ||||||
Weighted average limited partner units - basic | 38,712 | 38,357 | 38,877 | 38,016 | |||||||||||
Diluted: | |||||||||||||||
Continuing operations | $ | (0.24 | ) | $ | (0.44 | ) | $ | (0.17 | ) | $ | (0.10 | ) | |||
Discontinued operations | 1.24 | 0.02 | 1.30 | 0.06 | |||||||||||
$ | 1.00 | $ | (0.42 | ) | $ | 1.13 | $ | (0.04 | ) | ||||||
Weighted average limited partner units - diluted | 38,738 | 38,357 | 38,889 | 38,016 |
These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in the Partnership's Quarterly Report on Form 10-Q to be filed with the
CONSOLIDATED AND CONDENSED STATEMENTS OF CAPITAL
(Dollars in thousands)
Partners’ Capital | ||||||||||||||
Common Limited | General Partner Amount |
|||||||||||||
Units | Amount | Total | ||||||||||||
Balances - January 1, 2017 | 35,452,062 | $ | 304,594 | $ | 7,412 | $ | 312,006 | |||||||
Net income | — | (1,680 | ) | (34 | ) | (1,714 | ) | |||||||
Issuance of common units, net | 2,990,000 | 51,061 | — | 51,061 | ||||||||||
Issuance of restricted units | 12,000 | — | — | — | ||||||||||
Forfeiture of restricted units | (5,750 | ) | — | — | — | |||||||||
General partner contribution | — | — | 1,098 | 1,098 | ||||||||||
Cash distributions | — | (56,177 | ) | (1,146 | ) | (57,323 | ) | |||||||
Unit-based compensation | — | 518 | — | 518 | ||||||||||
Purchase of treasury units | (200 | ) | (4 | ) | — | (4 | ) | |||||||
Excess purchase price over carrying value of acquired assets | — | (7,887 | ) | — | (7,887 | ) | ||||||||
Reimbursement of excess purchase price over carrying value of acquired assets | — | 1,125 | — | 1,125 | ||||||||||
Balances - September 30, 2017 | 38,448,112 | $ | 291,550 | $ | 7,330 | $ | 298,880 | |||||||
Balances - January 1, 2018 | 38,444,612 | $ | 290,927 | $ | 7,314 | $ | 298,241 | |||||||
Net income | — | 44,118 | 900 | 45,018 | ||||||||||
Issuance of common units, net of issuance related costs | — | (118 | ) | — | (118 | ) | ||||||||
Issuance of restricted units | 633,425 | — | — | — | ||||||||||
Forfeiture of restricted units | (23,000 | ) | — | — | — | |||||||||
Cash distributions | — | (57,653 | ) | (1,176 | ) | (58,829 | ) | |||||||
Unit-based compensation | — | 872 | — | 872 | ||||||||||
Excess purchase price over carrying value of acquired assets | — | (26 | ) | — | (26 | ) | ||||||||
Purchase of treasury units | (18,800 | ) | (273 | ) | — | (273 | ) | |||||||
Balances - September 30, 2018 | 39,036,237 | $ | 277,847 | $ | 7,038 | $ | 284,885 |
These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in the Partnership's Quarterly Report on Form 10-Q to be filed with the
CONSOLIDATED AND CONDENSED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
Nine Months Ended | |||||||
September 30, | |||||||
2018 | 2017 | ||||||
Cash flows from operating activities: | |||||||
Net income (loss) | $ | 45,018 | $ | (1,714 | ) | ||
Less: Income from discontinued operations, net of income taxes | (51,700 | ) | (2,402 | ) | |||
Net loss from continuing operations | (6,682 | ) | (4,116 | ) | |||
Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||
Depreciation and amortization | 58,842 | 65,948 | |||||
Amortization of deferred debt issuance costs | 2,563 | 2,170 | |||||
Amortization of premium on notes payable | (230 | ) | (230 | ) | |||
Loss on sale of property, plant and equipment | 876 | 327 | |||||
Derivative loss | 198 | 2,392 | |||||
Net cash received (paid) for commodity derivatives | 2,698 | (6,429 | ) | ||||
Unit-based compensation | 872 | 518 | |||||
Change in current assets and liabilities, excluding effects of acquisitions and dispositions: | |||||||
Accounts and other receivables | 35,191 | 16,381 | |||||
Product exchange receivables | (156 | ) | 173 | ||||
Inventories | (37,147 | ) | (48,022 | ) | |||
Due from affiliates | 735 | (1,917 | ) | ||||
Other current assets | 556 | (411 | ) | ||||
Trade and other accounts payable | (18,230 | ) | 2,222 | ||||
Product exchange payables | (2,104 | ) | 1,910 | ||||
Due to affiliates | 483 | (5,169 | ) | ||||
Income taxes payable | (62 | ) | (420 | ) | |||
Other accrued liabilities | (9,726 | ) | (3,766 | ) | |||
Change in other non-current assets and liabilities | 610 | 1,941 | |||||
Net cash provided by continuing operating activities | 29,287 | 23,502 | |||||
Net cash provided by discontinued operating activities | 3,254 | 4,055 | |||||
Net cash provided by operating activities | 32,541 | 27,557 | |||||
Cash flows from investing activities: | |||||||
Payments for property, plant and equipment | (31,497 | ) | (30,014 | ) | |||
Acquisitions | — | (19,533 | ) | ||||
Payments for plant turnaround costs | (879 | ) | (1,583 | ) | |||
Proceeds from sale of property, plant and equipment | 1,269 | 1,604 | |||||
Proceeds from repayment of Note receivable - affiliate | — | 15,000 | |||||
Other | — | (900 | ) | ||||
Net cash used in continuing investing activities | (31,107 | ) | (35,426 | ) | |||
Net cash provided by (used in) discontinuing investing activities | 177,256 | (145 | ) | ||||
Net cash provided by (used in) investing activities | 146,149 | (35,571 | ) | ||||
Cash flows from financing activities: | |||||||
Payments of long-term debt | (460,000 | ) | (242,000 | ) | |||
Proceeds from long-term debt | 345,000 | 262,000 | |||||
Proceeds from issuance of common units, net of issuance related costs | (118 | ) | 51,061 | ||||
General partner contribution | — | 1,098 | |||||
Purchase of treasury units | (273 | ) | (4 | ) | |||
Payment of debt issuance costs | (1,285 | ) | (56 | ) | |||
Excess purchase price over carrying value of acquired assets | (26 | ) | (7,887 | ) | |||
Reimbursement of excess purchase price over carrying value of acquired assets | — | 1,125 | |||||
Cash distributions paid | (58,829 | ) | (57,323 | ) | |||
Net cash (used in) provided by financing activities | (175,531 | ) | 8,014 | ||||
Net increase in cash | 3,159 | — | |||||
Cash at beginning of period | 27 | 15 | |||||
Cash at end of period | $ | 3,186 | $ | 15 | |||
Non-cash additions to property, plant and equipment | $ | 938 | $ | 1,367 |
These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in the Partnership's Quarterly Report on Form 10-Q to be filed with the
SEGMENT OPERATING INCOME
(Dollars and volumes in thousands, except BBL per day)
Terminalling and Storage Segment | ||||||||||||||
Comparative Results of Operations for the Three Months Ended September 30, 2018 and 2017 | ||||||||||||||
Three Months Ended September 30, |
Variance | Percent Change |
||||||||||||
2018 | 2017 | |||||||||||||
(In thousands, except BBL per day) | ||||||||||||||
Revenues: | ||||||||||||||
Services | $ | 25,955 | $ | 26,944 | $ | (989 | ) | (4 | )% | |||||
Products | 38,047 | 30,861 | 7,186 | 23 | % | |||||||||
Total revenues | 64,002 | 57,805 | 6,197 | 11 | % | |||||||||
Cost of products sold | 34,400 | 27,971 | 6,429 | 23 | % | |||||||||
Operating expenses | 13,890 | 24,242 | (10,352 | ) | (43 | )% | ||||||||
Selling, general and administrative expenses | 1,304 | 1,668 | (364 | ) | (22 | )% | ||||||||
Depreciation and amortization | 9,311 | 10,192 | (881 | ) | (9 | )% | ||||||||
5,097 | (6,268 | ) | 11,365 | 181 | % | |||||||||
Other operating loss | (361 | ) | (187 | ) | (174 | ) | (93 | )% | ||||||
Operating income (loss) | $ | 4,736 | $ | (6,455 | ) | $ | 11,191 | 173 | % | |||||
Lubricant sales volumes (gallons) | 6,326 | 5,217 | 1,109 | 21 | % | |||||||||
Shore-based throughput volumes (guaranteed minimum) (gallons) | 20,000 | 41,666 | (21,666 | ) | (52 | )% | ||||||||
Smackover refinery throughput volumes (guaranteed minimum BBL per day) | 6,500 | 6,500 | — | — | % | |||||||||
Comparative Results of Operations for the Nine Months Ended September 30, 2018 and 2017 | ||||||||||||||
Nine Months Ended September 30, |
Variance | Percent Change |
||||||||||||
2018 | 2017 | |||||||||||||
(In thousands, except BBL per day) | ||||||||||||||
Revenues: | ||||||||||||||
Services | $ | 76,949 | $ | 79,523 | $ | (2,574 | ) | (3 | )% | |||||
Products | 111,350 | 96,421 | 14,929 | 15 | % | |||||||||
Total revenues | 188,299 | 175,944 | 12,355 | 7 | % | |||||||||
Cost of products sold | 101,498 | 87,139 | 14,359 | 16 | % | |||||||||
Operating expenses | 40,246 | 51,402 | (11,156 | ) | (22 | )% | ||||||||
Selling, general and administrative expenses | 3,894 | 4,437 | (543 | ) | (12 | )% | ||||||||
Depreciation and amortization | 31,160 | 35,996 | (4,836 | ) | (13 | )% | ||||||||
11,501 | (3,030 | ) | 14,531 | 480 | % | |||||||||
Other operating loss | (397 | ) | (190 | ) | (207 | ) | (109 | )% | ||||||
Operating income (loss) | $ | 11,104 | $ | (3,220 | ) | $ | 14,324 | 445 | % | |||||
Lubricant sales volumes (gallons) | 18,644 | 15,912 | 2,732 | 17 | % | |||||||||
Shore-based throughput volumes (guaranteed minimum) (gallons) | 60,000 | 124,998 | (64,998 | ) | (52 | )% | ||||||||
Smackover refinery throughput volumes (guaranteed minimum) (BBL per day) | 6,500 | 6,500 | — | — | % |
SEGMENT OPERATING INCOME
(Dollars and volumes in thousands, except BBL per day)
Natural Gas Services Segment
Comparative Results of Operations for the Three Months Ended September 30, 2018 and 2017 | ||||||||||||||
Three Months Ended September 30, |
Variance | Percent Change |
||||||||||||
2018 | 2017 | |||||||||||||
(In thousands) | ||||||||||||||
Revenues: | ||||||||||||||
Services | $ | 11,232 | $ | 14,253 | $ | (3,021 | ) | (21 | )% | |||||
Products | 101,919 | 84,057 | 17,862 | 21 | % | |||||||||
Total revenues | 113,151 | 98,310 | 14,841 | 15 | % | |||||||||
Cost of products sold | 100,298 | 78,138 | 22,160 | 28 | % | |||||||||
Operating expenses | 6,162 | 5,528 | 634 | 11 | % | |||||||||
Selling, general and administrative expenses | 2,038 | 1,843 | 195 | 11 | % | |||||||||
Depreciation and amortization | 5,316 | 6,274 | (958 | ) | (15 | )% | ||||||||
(663 | ) | 6,527 | (7,190 | ) | (110 | )% | ||||||||
Other operating income | — | 2 | (2 | ) | (100 | )% | ||||||||
Operating income (loss) | $ | (663 | ) | $ | 6,529 | $ | (7,192 | ) | (110 | )% | ||||
NGL sales volumes (Bbls) | 1,774 | 1,943 | (169 | ) | (9 | )% | ||||||||
Comparative Results of Operations for the Nine Months Ended
Nine Months Ended September 30, |
Variance | Percent Change |
||||||||||||
2018 | 2017 | |||||||||||||
(In thousands) | ||||||||||||||
Revenues: | ||||||||||||||
Services | $ | 40,392 | $ | 43,756 | $ | (3,364 | ) | (8 | )% | |||||
Products | 351,725 | 284,380 | 67,345 | 24 | % | |||||||||
Total revenues | 392,117 | 328,136 | 63,981 | 19 | % | |||||||||
Cost of products sold | 332,440 | 258,444 | 73,996 | 29 | % | |||||||||
Operating expenses | 17,837 | 16,753 | 1,084 | 6 | % | |||||||||
Selling, general and administrative expenses | 6,709 | 6,910 | (201 | ) | (3 | )% | ||||||||
Depreciation and amortization | 15,921 | 18,640 | (2,719 | ) | (15 | )% | ||||||||
19,210 | 27,389 | (8,179 | ) | (30 | )% | |||||||||
Other operating income (loss) | (120 | ) | 7 | (127 | ) | (1,814 | )% | |||||||
Operating income | $ | 19,090 | $ | 27,396 | $ | (8,306 | ) | (30 | )% | |||||
NGL sales volumes (Bbls) | 6,958 | 6,547 | 411 | 6 | % |
SEGMENT OPERATING INCOME
(Dollars and volumes in thousands, except BBL per day)
Sulfur Services Segment | ||||||||||||||
Comparative Results of Operations for the Three Months Ended September 30, 2018 and 2017 | ||||||||||||||
Three Months Ended September 30, |
Variance | Percent Change |
||||||||||||
2018 | 2017 | |||||||||||||
(In thousands) | ||||||||||||||
Revenues: | ||||||||||||||
Services | $ | 2,787 | $ | 2,850 | $ | (63 | ) | (2 | )% | |||||
Products | 27,981 | 24,174 | 3,807 | 16 | % | |||||||||
Total revenues | 30,768 | 27,024 | 3,744 | 14 | % | |||||||||
Cost of products sold | 21,454 | 19,807 | 1,647 | 8 | % | |||||||||
Operating expenses | 2,960 | 3,557 | (597 | ) | (17 | )% | ||||||||
Selling, general and administrative expenses | 1,149 | 1,071 | 78 | 7 | % | |||||||||
Depreciation and amortization | 2,113 | 2,020 | 93 | 5 | % | |||||||||
3,092 | 569 | 2,523 | 443 | % | ||||||||||
Other operating loss | — | (2 | ) | 2 | 100 | % | ||||||||
Operating income | $ | 3,092 | $ | 567 | $ | 2,525 | 445 | % | ||||||
Sulfur (long tons) | 166 | 198 | (32 | ) | (16 | )% | ||||||||
Fertilizer (long tons) | 50 | 52 | (2 | ) | (4 | )% | ||||||||
Total sulfur services volumes (long tons) | 216 | 250 | (34 | ) | (14 | )% | ||||||||
Comparative Results of Operations for the Nine Months Ended
Nine Months Ended September 30, |
Variance | Percent Change |
||||||||||||
2018 | 2017 | |||||||||||||
(In thousands) | ||||||||||||||
Revenues: | ||||||||||||||
Services | $ | 8,361 | $ | 8,550 | $ | (189 | ) | (2 | )% | |||||
Products | 98,565 | 95,728 | 2,837 | 3 | % | |||||||||
Total revenues | 106,926 | 104,278 | 2,648 | 3 | % | |||||||||
Cost of products sold | 74,270 | 65,678 | 8,592 | 13 | % | |||||||||
Operating expenses | 8,801 | 10,221 | (1,420 | ) | (14 | )% | ||||||||
Selling, general and administrative expenses | 3,230 | 3,099 | 131 | 4 | % | |||||||||
Depreciation and amortization | 6,263 | 6,083 | 180 | 3 | % | |||||||||
14,362 | 19,197 | (4,835 | ) | (25 | )% | |||||||||
Other operating income (loss) | 14 | (24 | ) | 38 | 158 | % | ||||||||
Operating income | $ | 14,376 | $ | 19,173 | $ | (4,797 | ) | (25 | )% | |||||
Sulfur (long tons) | 520 | 607 | (87 | ) | (14 | )% | ||||||||
Fertilizer (long tons) | 231 | 217 | 14 | 6 | % | |||||||||
Total sulfur services volumes (long tons) | 751 | 824 | (73 | ) | (9 | )% |
SEGMENT OPERATING INCOME
(Dollars and volumes in thousands, except BBL per day)
Marine Transportation Segment | ||||||||||||||
Comparative Results of Operations for the Three Months Ended September 30, 2018 and 2017 | ||||||||||||||
Three Months Ended September 30, |
Variance | Percent Change |
||||||||||||
2018 | 2017 | |||||||||||||
(In thousands) | ||||||||||||||
Revenues | $ | 13,570 | $ | 12,400 | $ | 1,170 | 9 | % | ||||||
Operating expenses | 10,418 | 11,176 | (758 | ) | (7 | )% | ||||||||
Selling, general and administrative expenses | 378 | 112 | 266 | 238 | % | |||||||||
Depreciation and amortization | 2,001 | 1,800 | 201 | 11 | % | |||||||||
773 | (688 | ) | 1,461 | 212 | % | |||||||||
Other operating loss | (23 | ) | — | (23 | ) | |||||||||
Operating income (loss) | $ | 750 | $ | (688 | ) | $ | 1,438 | 209 | % | |||||
Comparative Results of Operations for the Nine Months Ended
Nine Months Ended September 30, |
Variance | Percent Change |
||||||||||||
2018 | 2017 | |||||||||||||
(In thousands) | ||||||||||||||
Revenues | $ | 38,766 | $ | 38,958 | $ | (192 | ) | — | % | |||||
Operating expenses | 30,696 | 33,331 | (2,635 | ) | (8 | )% | ||||||||
Selling, general and administrative expenses | 541 | 287 | 254 | 89 | % | |||||||||
Depreciation and amortization | 5,498 | 5,229 | 269 | 5 | % | |||||||||
$ | 2,031 | $ | 111 | $ | 1,920 | 1,730 | % | |||||||
Other operating loss | (373 | ) | (120 | ) | (253 | ) | (211 | )% | ||||||
Operating income (loss) | $ | 1,658 | $ | (9 | ) | $ | 1,667 | 18,522 | % | |||||
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
Reconciliation of EBITDA, Adjusted EBITDA, and Distributable Cash Flow
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
(in thousands) | |||||||||||||||
Net income (loss) | $ | 39,446 | $ | (16,286 | ) | $ | 45,018 | $ | (1,714 | ) | |||||
Less: Income from discontinued operations, net of income taxes | (49,132 | ) | (743 | ) | (51,700 | ) | (2,402 | ) | |||||||
Loss from continuing operations | (9,686 | ) | (17,029 | ) | (6,682 | ) | (4,116 | ) | |||||||
Adjustments: | |||||||||||||||
Interest expense, net | 13,140 | 12,538 | 39,591 | 34,677 | |||||||||||
Income tax expense | 91 | 108 | 372 | 301 | |||||||||||
Depreciation and amortization | 18,741 | 20,286 | 58,842 | 65,948 | |||||||||||
EBITDA | 22,286 | 15,903 | 92,123 | 96,810 | |||||||||||
Adjustments: | |||||||||||||||
(Gain) loss on sale of property, plant and equipment | 384 | 187 | 876 | 327 | |||||||||||
Unrealized mark-to-market on commodity derivatives | 2,396 | — | 2,896 | (4,037 | ) | ||||||||||
Hurricane damage repair accrual | — | 3,725 | — | 3,725 | |||||||||||
Asset retirement obligation revision | — | 5,547 | — | 5,547 | |||||||||||
Unit-based compensation | 352 | 113 | 872 | 518 | |||||||||||
Adjusted EBITDA | 25,418 | 25,475 | 96,767 | 102,890 | |||||||||||
Adjustments: | |||||||||||||||
Interest expense, net | (13,140 | ) | (12,538 | ) | (39,591 | ) | (34,677 | ) | |||||||
Income tax expense | (91 | ) | (108 | ) | (372 | ) | (301 | ) | |||||||
Amortization of debt premium | (77 | ) | (77 | ) | (230 | ) | (230 | ) | |||||||
Amortization of deferred debt issuance costs | 874 | 725 | 2,563 | 2,170 | |||||||||||
Payments for plant turnaround costs | (879 | ) | 8 | (879 | ) | (1,583 | ) | ||||||||
Maintenance capital expenditures | (5,247 | ) | (5,208 | ) | (16,619 | ) | (12,494 | ) | |||||||
Distributable Cash Flow | $ | 6,858 | $ | 8,277 | $ | 41,639 | $ | 55,775 |
Source: Martin Midstream Partners L.P.