October 26, 2016

Martin Midstream Partners Reports 2016 Third Quarter Financial Results

  • Announced divestiture of Corpus Christi, Texas terminalling assets
  • Distribution declared creates coverage ratio of 1.1 times for the November 2016 distribution
  • Clear path to balance sheet improvement

KILGORE, Texas, Oct. 26, 2016 (GLOBE NEWSWIRE) -- Martin Midstream Partners L.P. (Nasdaq:MMLP) (the "Partnership") announced today its financial results for the quarter ended September 30, 2016.

Ruben Martin, President and Chief Executive Officer of Martin Midstream GP LLC, the general partner of the Partnership said, "As we announced last week, we have outlined a path forward to improve our leverage profile and distribution coverage ratio. We believe the divestiture of our Corpus Christi terminalling assets is a solid first step to lowering our cost of capital and returning to a growth trajectory.  We expect the sale to close by year-end and receive net proceeds of approximately $93 million.

"For the third quarter ended September 30, 2016, our seasonally weaker quarter due to our fertilizer and butane businesses, the distribution coverage ratio was 1.10 times based on the quarterly distribution of $0.50 announced last week.  Highlighting the third quarter was continued strength in our Cardinal Gas Storage division where interruptible services were again strong and are expected to continue during the fourth quarter. Also, we saw a modestly improved performance in our inland marine transportation segment. Although this is not yet a recovery, utilization of our fleet improved during the third quarter.  As anticipated, our maintenance capital expenditures normalized and were lower in the third quarter compared to the levels achieved in the first six months of 2016.

"Looking toward the fourth quarter, we anticipate strong performance in our butane business based on current storage levels and contracted sales back to refineries.  On that basis, we should realize significant working capital debt reduction due to butane inventory depletion, further strengthening the Partnership's leverage ratio.  Additionally, for 2017 and 2018, we expect a stronger distribution coverage ratio of at least 1.2 times."

The Partnership had a net loss for the third quarter of 2016 of $0.9 million, a loss of $0.03 per limited partner unit.  Net income for the third quarter of 2015 was $3.3 million, which led to a loss of $0.02 per limited partner unit.  The Partnership's adjusted EBITDA from continuing operations for the third quarter of 2016 was $33.3 million compared to adjusted EBITDA from continuing operations for the third quarter of 2015 of $41.4 million, a decrease of 20%.

Net income from continuing operations for the nine months ended September 30, 2016 was $13.8 million, or $0.16 per limited partner unit.  Net income from continuing operations for the nine months ended September 30, 2015 was $30.3 million, or $0.52 per limited partner unit.  Net income for the nine months ended September 30, 2016 was negatively impacted by a non-cash goodwill impairment charge in the Partnership's Marine Transportation segment of $4.1 million, or $0.12 per limited partner unit. The Partnership's adjusted EBITDA from continuing operations for the nine months ended September 30, 2016 was $124.2 million compared to adjusted EBITDA from continuing operations for the nine months ended September 30, 2015 of $136.8 million, a decrease of 9%.

The Partnership's distributable cash flow from continuing operations for the third quarter of 2016 was $19.9 million compared to distributable cash flow from continuing operations for the third quarter of 2015 of $29.1 million, a decrease of 32%.

The Partnership's distributable cash flow from continuing operations for the nine months ended September 30, 2016 was $77.9 million compared to distributable cash flow from continuing operations for the nine months ended September 30, 2015 of $98.1 million, a decrease of 21%.

Revenues for the third quarter of 2016 were $174.5 million compared to $226.0 million for the third quarter of 2015.  Revenues for the nine months ended September 30, 2016 were $590.5 million compared to $782.5 million for the nine months ended September 30, 2015.
           
On February 12, 2015, the Partnership exited the natural gas liquids floating storage and trans-loading businesses as a result of the sale of its six liquefied petroleum gas pressure barges, collectively referred to as the "Floating Storage Assets", for $41.3 million.  The Partnership recorded a gain on the disposition of $1.5 million.

The Partnership had no net income, distributable cash flow or adjusted EBITDA from discontinued operations related to the Floating Storage Assets for the three and nine months ended September 30, 2016.

The Partnership had no net income, distributable cash flow or adjusted EBITDA from discontinued operations related to the Floating Storage Assets for the three months ended September 30, 2015.  The Partnership had net income from discontinued operations for the nine months ended September 30, 2015 of $1.2 million, or $0.02 per limited partner unit.  Distributable cash flow and adjusted EBITDA from discontinued operations were $1.2 million for the nine months ended September 30, 2015.

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 directly 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 September 30, 2016 and certain prior periods.  These financial statements should be read in conjunction with the information contained in the Partnership's Quarterly Report on Form 10-Q, to be filed with the Securities and Exchange Commission on October 26, 2016.

An attachment accompanying this announcement is available at http://www.globenewswire.com/NewsRoom/AttachmentNg/de5152db-7f6f-4f6d-b723-bb6e41d94a33 .

Quarterly Cash Distribution

The quarterly cash distribution of $0.50 per common unit, which was announced on October 20, 2016, is payable on November 14, 2016 to common unitholders of record as of the close of business on November 7, 2016.  The ex-dividend date for the cash distribution is November 3, 2016.  The current distribution level represents total distributions to common unitholders of approximately $18.1 million for the quarter and reflects an annualized distribution rate of $2.00 per unit.

Investors' Conference Call

An investors' conference call to review the third quarter results will be held on Thursday, October 27, 2016, at 8:00 a.m. Central Time. The conference call can be accessed by calling (877) 878-2695. Additionally, an accompanying slide and live webcast will be available by visiting Martin Midstream Partners' website at www.martinmidstream.com.  An audio replay of the conference call will be available by calling (855) 859-2056 from 11:00 a.m. Central Time on October 27, 2016 through 10:59 p.m. Central Time on November 7, 2016.  The access code for the conference call and the audio replay is Conference ID No.94610525.  The audio replay will also be archived under the Events and Presentations section of the Partnership's website.

About Martin Midstream Partners
           
The Partnership 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 segments include: (1) terminalling, storage and packaging services for petroleum products and by-products; (2) natural gas services, including liquids transportation and distribution services and natural gas storage; (3) sulfur and sulfur-based products processing, manufacturing, marketing and distribution; and (4) marine transportation services for petroleum products and by-products.

Forward-Looking Statements

Statements about the Partnership's outlook and all other statements in this release other than historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  These forward-looking statements and all references to financial estimates rely on a number of assumptions concerning future events and are subject to a number of uncertainties and other factors, many of which are outside the Partnership's control, which could cause actual results to differ materially from such statements.  While the Partnership believes that the assumptions concerning future events are reasonable, it cautions that there are inherent difficulties in anticipating or predicting certain important factors.  A discussion of these factors, including risks and uncertainties, is set forth in the Partnership's annual and quarterly reports filed from time to time with the Securities and Exchange Commission.  The Partnership disclaims any intention or obligation to revise any forward-looking statements, including financial estimates, whether as a result of new information, future events, or otherwise.

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:

Joe McCreery, IRC - Vice President - Finance & Head of Investor Relations
(903) 988-6425


MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED BALANCE SHEETS
(Dollars in thousands)
 
  September 30, 2016 December 31, 2015
  (Unaudited) (Audited)
Assets     
Cash $10  $31 
Accounts and other receivables, less allowance for doubtful accounts of $453 and $430, respectively 46,327  74,355 
Product exchange receivables 159  1,050 
Inventories 107,476  75,870 
Due from affiliates 8,194  10,126 
Fair value of derivatives 89  675 
Other current assets 4,439  5,718 
Assets held for sale 73,197   
Total current assets 239,891  167,825 
     
Property, plant and equipment, at cost 1,301,233  1,387,814 
Accumulated depreciation (411,821) (404,574)
Property, plant and equipment, net 889,412  983,240 
     
Goodwill 17,296  23,802 
Investment in WTLPG 129,794  132,292 
Note receivable - Martin Energy Trading LLC 15,000  15,000 
Other assets, net 48,951  58,314 
Total assets $1,340,344  $1,380,473 
     
Liabilities and Partners' Capital    
Trade and other accounts payable $60,462  $81,180 
Product exchange payables 10,188  12,732 
Due to affiliates  3,879  5,738 
Income taxes payable 550  985 
Fair value of derivatives 209   
Other accrued liabilities 14,804  18,533 
Liabilities held for sale 23,400   
Total current liabilities 113,492  119,168 
     
Long-term debt, net 913,504  865,003 
Fair value of derivatives   206 
Other long-term obligations 2,435  2,217 
Total liabilities 1,029,431  986,594 
     
Commitments and contingencies (Note 16)     
Partners' capital 310,913  393,879 
Total partners' capital 310,913  393,879 
Total liabilities and partners' capital $1,340,344  $1,380,473 
         

These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in the Partnership's Quarterly Report on Form 10-Q to be filed with the Securities and Exchange Commission on October 26, 2016.

MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars and units in thousands, except per unit amounts)
 
  Three Months Ended Nine Months Ended
  September 30, September 30,
  2016 2015 2016 2015
Revenues:        
Terminalling and storage * $30,770  $33,578  $93,565  $100,828 
Marine transportation * 13,846  18,977  44,531  59,956 
Natural gas services* 14,618   17,120  46,118  50,171 
Sulfur services 2,700  3,090  8,100  9,270 
Product sales: *        
Natural gas services  57,378  86,714  207,368  330,803 
Sulfur services 26,396   33,213  105,459  128,544 
Terminalling and storage 28,829  33,329  85,349  102,901 
  112,603  153,256  398,176  562,248 
Total revenues 174,537  226,021  590,490  782,473 
          
Costs and expenses:        
Cost of products sold: (excluding depreciation and amortization)        
Natural gas services * 50,658  80,709  184,781  307,039 
Sulfur services * 21,510  26,144  73,734  95,685 
Terminalling and storage * 23,540  28,237  70,306  87,977 
  95,708  135,090  328,821  490,701 
Expenses:        
Operating expenses * 39,488  45,310  121,542  138,399 
Selling, general and administrative * 8,049  8,666  24,364  26,507 
Loss on impairment of goodwill     4,145   
Depreciation and amortization 22,129  23,335  66,266  68,737 
Total costs and expenses 165,374  212,401  545,138  724,344 
         
Other operating income (loss) 13  (1,586) (1,582) (1,763)
Operating income 9,176  12,034  43,770  56,366 
         
Other income (expense):        
Equity in earnings of WTLPG 1,120  2,363  3,602  5,752 
Interest expense, net (11,779) (11,994) (34,046) (32,465)
Gain on retirement of senior unsecured notes   728    728 
Other, net 730  399  866  757 
Total other expense (9,929) (8,504) (29,578) (25,228)
          
Net income (loss) before taxes (753) 3,530  14,192  31,138 
Income tax expense (180) (200) (422)  (814)
Income (loss) from continuing operations (933) 3,330  13,770  30,324 
Income from discontinued operations, net of income taxes       1,215 
Net income (loss) (933) 3,330  13,770   31,539 
Less general partner's interest in net (income) loss 18  (3,959) (8,062) (12,310)
Less (income) loss allocable to unvested restricted units 3  (16) (36 ) (127)
Limited partners' interest in net income (loss) $(912) $(645) $5,672  $19,102 
                  

These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in the Partnership's Quarterly Report on Form 10-Q to be filed with the Securities and Exchange Commission on October 26, 2016.

*Related Party Transactions Shown Below

 

MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars and units in thousands, except per unit amounts)
 
*Related Party Transactions Included Above
 
  Three Months Ended Nine Months Ended
  September 30, September 30,
  2016 2015  2016 2015
Revenues:*        
Terminalling and storage $20,649  $15,091  $62,197  $58,626  
Marine transportation 4,861  6,552  17,308  19,919 
Natural gas services 132    574   
Product Sales 723  1,731  2,391  5,079 
Costs and expenses:*        
Cost of products sold: (excluding depreciation and amortization)        
Natural gas services 2,946  6,470  10,829  20,198 
Sulfur services 3,678   3,387  11,300  10,629 
Terminalling and storage 3,766  3,227  11,232  14,261 
Expenses:        
Operating expenses 17,810  19,290  53,255  58,605 
Selling, general and administrative 5,748  5,922  18,091  17,765 
             

These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in the Partnership's Quarterly Report on Form 10-Q to be filed with the Securities and Exchange Commission on October 26, 2016.

MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars and units in thousands, except per unit amounts)
 
  Three Months Ended Nine Months Ended
  September 30, September 30,
  2016 2015  2016 2015
Allocation of net income (loss) attributable to:        
Limited partner interest:        
Continuing operations $(912) $(645) $5,672  $18,366 
Discontinued operations        736 
  $(912) $(645) $5,672  $19,102 
General partner interest:        
Continuing operations $(18) $3,959  $8,062  $11,836 
Discontinued operations       474 
  $(18) $3,959  $8,062  $12,310 
         
Net income (loss) per unit attributable to limited partners:        
Basic:        
Continuing operations $(0.03) $(0.02) $0.16  $0.52 
Discontinued operations       0.02 
  $(0.03) $(0.02) $0.16  $0.54 
         
Weighted average limited partner units - basic 35,346  35,308  35,358   35,309 
         
Diluted:        
Continuing operations $(0.03) $(0.02) $0.16  $0.52 
Discontinued operations        0.02 
  $(0.03) $(0.02) $0.16  $0.54 
         
Weighted average limited partner units - diluted 35,346  35,308  35,381  35,369 
             

These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in the Partnership's Quarterly Report on Form 10-Q to be filed with the Securities and Exchange Commission on October 26, 2016.

MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED STATEMENTS OF CAPITAL
(Unaudited)
(Dollars in thousands)
 
  Partners' Capital  
  Common Limited General
Partner
Amount
  
  Units Amount  Total
Balances - January 1, 2015 35,365,912  $470,943  $14,728  $485,671 
Net income   19,229  12,310  31,539 
Issuance of common units, net   (330)   (330)
Issuance of restricted units 91,950        
Forfeiture of restricted units (1,250)      
General partner contribution      55  55 
Cash distributions   (86,420) (13,526) (99,946)
Reimbursement of excess purchase price over carrying value of acquired assets   1,500     1,500 
Unit-based compensation   1,080    1,080 
Balances - September 30, 2015 35,456,612  $406,002  $13,567  $419,569 
         
Balances - January 1, 2016 35,456,612  $380,845  $13,034  $393,879 
Net income   5,708  8,062  13,770 
Issuance of common units, net of issuance related costs   (28)   (28)
Issuance of restricted units 13,800       
Forfeiture of restricted units  (500)      
Cash distributions   (86,410) (13,680) (100,090)
Unit-based compensation   712    712 
Reimbursement of excess purchase price over carrying value of acquired assets   3,000    3,000 
Purchase of treasury units (15,200) (330)   (330)
Balances - September 30, 2016 35,454,712   $303,497  $7,416  $310,913 
                

These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in the Partnership's Quarterly Report on Form 10-Q to be filed with the Securities and Exchange Commission on October 26, 2016.

MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
 
  Nine Months Ended
  September 30,
  2016 2015
Cash flows from operating activities:    
Net income $13,770  $31,539 
Less:  Income from discontinued operations, net of income taxes   (1,215)
Net income from continuing operations 13,770   30,324 
Adjustments to reconcile net income to net cash provided by operating activities:    
Depreciation and amortization 66,266  68,737 
Amortization and write-off of deferred debt issuance costs 2,965  4,142 
Amortization of premium on notes payable (230)  (246)
Loss on sale of property, plant and equipment 1,582  1,751 
Loss on impairment of goodwill 4,145   
Gain on retirement of senior unsecured notes   (728)
Equity in earnings of unconsolidated entities (3,602)  (5,752)
Derivative income (1,867) (2,137)
Net cash received for commodity derivatives 1,666   
Net cash received for interest rate derivatives 160   
Net premiums received on derivatives that settled during the year on interest rate swaption contracts 630   2,495 
Unit-based compensation 712  1,080 
Cash distributions from WTLPG 6,100  7,800 
Change in current assets and liabilities, excluding effects of acquisitions and dispositions:    
Accounts and other receivables 28,028  69,967 
Product exchange receivables 891  909 
Inventories (31,606) (3,134)
Due from affiliates 1,932  3,348 
Other current assets (4,693) 354 
Trade and other accounts payable (15,782) (59,124)
Product exchange payables (2,544) 6,360 
Due to affiliates (1,859) (1,935)
Income taxes payable (435) (386)
Other accrued liabilities (3,729) (8,490)
Change in other non-current assets and liabilities (765) (999)
Net cash provided by continuing operating activities 61,735  114,336 
Net cash used in discontinued operating activities   (1,352)
Net cash provided by operating activities 61,735  112,984 
Cash flows from investing activities:     
Payments for property, plant and equipment (31,884) (40,123)
Acquisition of intangible assets (2,150)  
Payments for plant turnaround costs (1,614) (1,754)
Proceeds from sale of property, plant and equipment 2,174  1,985 
Proceeds from involuntary conversion of property, plant and equipment 23,400   
Net cash used in continuing investing activities (10,074) (39,892)
Net cash provided by discontinued investing activities   41,250 
Net cash provided by (used in) investing activities (10,074) 1,358 
Cash flows from financing activities:    
Payments of long-term debt (219,700) (224,310)
Proceeds from long-term debt 270,700  209,000 
Proceeds from issuance of common units, net of issuance related costs (28) (330)
General partner contribution   55 
Purchase of treasury units (330)  
Payment of debt issuance costs (5,234) (340)
Reimbursement of excess purchase price over carrying value of acquired assets 3,000  1,500 
Cash distributions paid (100,090) (99,946)
Net cash used in financing activities (51,682) (114,371)
Net decrease in cash (21) (29)
Cash at beginning of period 31  42 
Cash at end of period $10  $13 
Non-cash additions to property, plant and equipment $1,068  $4,389 
         

 

MARTIN MIDSTREAM PARTNERS L.P. 
CONSOLIDATED AND CONDENSED STATEMENTS OF CASH FLOWS 
(Unaudited) 
(Dollars in thousands)

These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in the Partnership's Quarterly Report on Form 10-Q to be filed with the Securities and Exchange Commission on October 26, 2016.

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, 2016 and 2015
 
  Three Months Ended
September 30,
 Variance Percent
Change
  2016 2015  
                
  (In thousands, except BBL per day)
   
Revenues:        
Services $32,114  $35,144  $(3,030) (9)%
Products  28,829  33,329  (4,500) (14)%
Total revenues 60,943   68,473  (7,530) (11)%
         
Cost of products sold 24,118  28,765  (4,647) (16)%
Operating expenses 18,299  20,268  (1,969) (10)%
Selling, general and administrative expenses 1,439  995  444  45%
Depreciation and amortization 10,828  9,624  1,204  13%
  6,259  8,821  (2,562) (29)%
Other operating income 254  2  252  12,600%
Operating income $6,513  $8,823  $(2,310) (26)%
         
Lubricant sales volumes (gallons) 5,196  5,974  (778) (13)%
Shore-based throughput volumes (gallons) 25,313  36,383  (11,070) (30)%
Smackover refinery throughput volumes (BBL per day) 5,924  6,205  (281) (5)%
Corpus Christi crude terminal (BBL per day) 65,116  148,377  (83,261) (56)%
             


Comparative Results of Operations for the Nine Months Ended September 30, 2016 and 2015
 
  Nine Months Ended
September 30,
 Variance Percent
Change
  2016 2015  
                
  (In thousands, except BBL per day)
   
Revenues:        
Services $97,663  $104,893  $(7,230) (7)%
Products 85,351  102,901  (17,550) (17)%
Total revenues  183,014  207,794  (24,780) (12)%
         
Cost of products sold 71,939  90,076  (18,137) (20)%
Operating expenses 54,740  62,947  (8,207)  (13)%
Selling, general and administrative expenses 3,546  2,806  740  26%
Depreciation and amortization 30,904  29,030  1,874  6 %
  21,885  22,935  (1,050) (5)%
Other operating income (loss) 354  (199) 553  (278)%
Operating income $22,239  $22,736  $(497) (2)%
         
Lubricant sales volumes (gallons) 15,536  18,007  (2,471) (14)%
Shore-based throughput volumes (gallons) 77,059  122,743  (45,684) (37)%
Smackover refinery throughput volumes (BBL per day) 5,644  6,091   (447) (7)%
Corpus Christi crude terminal (BBL per day) 77,394  166,129  (88,735) (53)%
             


MARTIN MIDSTREAM PARTNERS L.P.
SEGMENT OPERATING INCOME
(Unaudited)
(Dollars and volumes in thousands, except BBL per day)
 
Natural Gas Services Segment
 
Comparative Results of Operations for the Three Months Ended September 30, 2016 and 2015
 
  Three Months Ended
September 30,
 Variance Percent
Change
  2016 2015  
                 
  (In thousands)
   
Revenues:        
Services $14,618  $17,120  $(2,502) (15)%
Products 57,378   86,714  (29,336) (34)%
Total revenues 71,996  103,834  (31,838) (31)%
         
Cost of products sold 51,353  81,472  (30,119 ) (37)%
Operating expenses 5,822  6,489  (667) (10)%
Selling, general and administrative expenses 1,309  1,848  (539) (29)%
Depreciation and amortization 7,050  8,522  (1,472)  (17)%
  6,462  5,503  959  17%
Other operating loss (7)   (7)   
Operating income $6,455  $5,503  $952  17%
         
Distributions from unconsolidated entities $1,800  $3,400  $(1,600) (47)%
         
NGL sales volumes (Bbls) 1,592  3,138  (1,546)  (49)%
             


Comparative Results of Operations for the Nine Months Ended September 30, 2016 and 2015
 
 Nine Months Ended
September 30,
 Variance Percent
Change
 2016 2015  
               
 (In thousands)
   
Revenues:       
Services$46,118  $50,171  $(4,053) (8)%
Products207,368  330,803  (123,435) (37)%
Total revenues253,486  380,974  (127,488) (33)%
         
Cost of products sold186,934  308,713  (121,779) (39)%
Operating expenses17,479  17,905  (426) (2)%
Selling, general and administrative expenses5,420  6,313  (893) (14)%
Depreciation and amortization21,007  25,297  (4,290) (17)%
 22,646  22,746  (100) %
Other operating loss(103) (7) (96) 1,371%
Operating income$ 22,543  $22,739  $(196) (1)%
        
Distributions from unconsolidated entities$6,100   $7,800  $(1,700) (22)%
        
NGL sales volumes (Bbls)6,520  10,227  (3,707) (36)%
            


MARTIN MIDSTREAM PARTNERS L.P.
SEGMENT OPERATING INCOME
(Unaudited)
(Dollars and volumes in thousands, except BBL per day)
 
Sulfur Services Segment
 
Comparative Results of Operations for the Three Months Ended September 30, 2016 and 2015
 
  Three Months Ended
September 30,
 Variance Percent
Change
  2016 2015  
                
  (In thousands)
   
Revenues:        
Services $2,700  $3,090  $(390) (13)%
Products 26,396  33,213  (6,817) (21)%
Total revenues 29,096  36,303  (7,207) (20)%
         
Cost of products sold 21,601  26,235  (4,634) (18)%
Operating expenses 4,089  3,427  662  19%
Selling, general and administrative expenses 946  934  12  1%
Depreciation and amortization 1,997  2,129  (132) (6)%
  463  3,578  (3,115) (87)%
Other operating loss (234) (5) (229) 4,580%
Operating income $229  $3,573  $(3,344) (94)%
         
Sulfur (long tons) 241  203  38  19%
Fertilizer (long tons) 47  51  (4) (8)%
Total sulfur services volumes (long tons)  288  254  34  13%
             

        

Comparative Results of Operations for the Nine Months Ended September 30, 2016 and 2015  
 
  Nine Months Ended
September 30,
 Variance Percent
Change
  2016 2015  
                
  (In thousands)
   
Revenues:        
Services $8,100  $9,270  $(1,170) (13)%
Products 105,459  128,544  (23,085) (18)%
Total revenues 113,559  137,814  (24,255) (18)%
         
Cost of products sold 74,006  95,961  (21,955) (23)%
Operating expenses 10,288  11,697  (1,409) (12)%
Selling, general and administrative expenses 2,834  2,859  (25) (1)%
Depreciation and amortization 5,978  6,360  (382) (6)%
  20,453  20,937   (484) (2)%
Other operating loss (266) (5) (261) 5,220%
Operating income $20,187  $20,932  $(745) (4)%
         
Sulfur (long tons) 579  641  (62) (10)%
Fertilizer (long tons) 217  229  (12) (5)%
Total sulfur services volumes (long tons) 796  870  (74) (9)%
              

             

MARTIN MIDSTREAM PARTNERS L.P.
SEGMENT OPERATING INCOME
(Unaudited)
(Dollars and volumes in thousands, except BBL per day)
 
Marine Transportation Segment
 
Comparative Results of Operations for the Three Months Ended September 30, 2016 and 2015
 
  Three Months Ended
September 30,
 Variance Percent
Change
  2016 2015  
                 
  (In thousands)
    
Revenues $14,920  $19,522   $(4,602)  (24)%
Operating expenses 12,332  15,855   (3,523)  (22)%
Selling, general and administrative expenses 149   (59) 208   (353)%
Depreciation and amortization 2,254  3,060  (806)  (26)%
  185  666  (481)  (72)%
Other operating loss   (1,583) 1,583   (100)%
Operating income (loss) $185  $(917) $1,102   (120)%
                      


Comparative Results of Operations for the Nine Months Ended September 30, 2016 and 2015
 
  Nine Months Ended
September 30,
 Variance Percent
Change
  2016 2015  
                 
  (In thousands)
    
Revenues $46,854  $62,354  $(15,500)  (25)%
Operating expenses 41,400  48,284  (6,884)  (14)%
Selling, general and administrative expenses (112) 251  (363)  (145)%
Loss on impairment of goodwill 4,145    4,145   
Depreciation and amortization 8,377  8,050  327   4%
Operating income $(6,956) $5,769  $(12,725)  (221)%
Other operating loss (1,567)  (1,552) (15)  1%
Operating income (loss) $(8,523) $4,217  $(12,740)  (302)%
                 


Distributions from Unconsolidated Entities
 
Comparative Results of Operations for the Three Months Ended September 30, 2016 and 2015
 
  Three Months Ended
September 30,
 Variance Percent
Change
  2016 2015  
                  
  (In thousands)
    
Distributions from WTLPG $1,800  $3,400   $(1,600)  (47)%
                  

               

Comparative Results of Operations for the Nine Months Ended September 30, 2016 and 2015
 
  Nine Months Ended
September 30,
 Variance Percent
Change
  2016 2015  
                
  (In thousands)
   
Distributions from WTLPG $6,100  $7,800  $(1,700) (22)%
                


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, 2016 and 2015.

Reconciliation of EBITDA, Adjusted EBITDA, and Distributable Cash Flow
 
  Three Months Ended Nine Months Ended
  September 30, September 30,
  2016 2015 2016 2015
  (in thousands)
Net income (loss) $(933) $3,330  $ 13,770  $31,539 
Less:  Income from discontinued operations, net of income taxes       (1,215)
Income (loss) from continuing operations (933)  3,330  13,770  30,324 
Adjustments:        
Interest expense 11,779  11,994  34,046  32,465 
Income tax expense 180  200  422  814 
Depreciation and amortization 22,129  23,335  66,266  68,737 
EBITDA 33,155  38,859  114,504  132,340 
Adjustments:        
Equity in earnings of unconsolidated entities (1,120) (2,363) (3,602) (5,752)
(Gain) loss on sale of property, plant and equipment (13) 1,586  1,582  1,751 
Loss on impairment of goodwill     4,145   
Unrealized mark-to-market on commodity derivatives (742) 358  795  358 
Gain on retirement of senior unsecured notes   (728)   (728)
Distributions from unconsolidated entities 1,800  3,400  6,100  7,800 
Unit-based compensation 226  330  712  1,080 
Adjusted EBITDA 33,306  41,442  124,236  136,849 
Adjustments:        
Interest expense (11,779) (11,994) (34,046) (32,465)
Income tax expense (180) (200) (422) (814)
Amortization of debt premium (77) (82) (230) (246)
Amortization of deferred debt issuance costs 718  2,400  2,965  4,142 
Non-cash mark-to-market on interest rate derivatives     (206)  
Payments for plant turnaround costs  (430)   (1,614) (1,754)
Maintenance capital expenditures (1,609) (2,438) (12,818) (7,621)
Distributable Cash Flow $19,949  $29,128  $77,865  $98,091 
                 

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Source: Martin Midstream Partners L.P.

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