July 26, 2017

Martin Midstream Partners Reports 2017 Second Quarter Financial Results

  • Net Income of $14.6 million for the First Six Months of 2017
  • Quarterly Distribution Coverage Ratio Exceeds Forecast
  • Improved Second Quarter Leverage Compared to a Year Ago
  • Full Year Distribution Coverage Ratio of 1.2 Times Affirmed

KILGORE, Texas, July 26, 2017 (GLOBE NEWSWIRE) --  Martin Midstream Partners L.P. (Nasdaq:MMLP) (the "Partnership") announced today its financial results for the quarter ended June 30, 2017.

Ruben Martin, President and Chief Executive Officer of Martin Midstream GP LLC, the general partner of the Partnership said, "For the second quarter ended June 30, 2017, the Partnership generated a distribution coverage ratio of 1.00 times.  This was above our forecasted ratio for the quarter, based on lower than anticipated maintenance capital expenditures.

"Looking across our operating segments, overall performance was consistent with forecasted levels during the second quarter.  Through six months ended June 30, 2017, our Adjusted EBITDA of $79.8 million is approximately $0.9 million ahead of our Adjusted EBITDA guidance level.  Further, we expect performance for the next two quarters to be in line with our previously released estimates, as well as slightly reducing our maintenance capital expenditures to $22.2 million for the full year 2017.  Thus, we affirm our projected distribution coverage ratio of 1.2 times.

"Our long-stated goal has been, and will continue to be, an improved leverage profile.  During the second quarter, we improved our leverage ratio when looking at a year-over-year basis."

The Partnership had net income for the second quarter of 2017 of $1.0 million, or $0.03 per limited partner unit.  The Partnership had a net loss for the second quarter of 2016 of $1.2 million, a loss of $0.14 per limited partner unit.  The Partnership's adjusted EBITDA for the second quarter of 2017 was $33.0 million compared to adjusted EBITDA from for the second quarter of 2016 of $41.6 million.

The Partnership had net income for the six months ended June 30, 2017 of $14.6 million, or $0.38 per limited partner unit.  The Partnership had net income for the six months ended June 30, 2016 of $14.7 million, or $0.19 per limited partner unit.  The Partnership's adjusted EBITDA for the six months ended June 30, 2017 was $79.8 million compared to adjusted EBITDA for the six months ended June 30, 2016 of $90.9 million.

The Partnership's distributable cash flow for the second quarter of 2017 was $19.6 million compared to distributable cash flow for the second quarter of 2016 of $25.4 million.

The Partnership's distributable cash flow for the six months ended June 30, 2017 was $49.9 million compared to distributable cash flow for the six months ended June 30, 2016 of $57.9 million.

Revenues for the second quarter of 2017 were $193.9 million compared to the second quarter of 2016 of $190.3 million. Revenues for the six months ended June 30, 2017 were $447.2 million compared to the six months ended June 30, 2016 of $416.0 million.

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 six months ended June 30, 2017 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 July 26, 2017.

An attachment accompanying this announcement is available at http://www.globenewswire.com/NewsRoom/AttachmentNg/1483b7a7-b482-4d33-8eb8-d68fcc4d636c.

Investors' Conference Call

An investors' conference call to review the second quarter results will be held on Thursday, July 27, 2017, at 8:00 a.m. Central Time.  The conference call can be accessed by calling (877) 878-2695.  An audio replay of the conference call will be available by calling (855) 859-2056 from 11:00 a.m. Central Time on July 27, 2017 through 10:59 p.m. Central Time on August 7, 2017.  The access code for the conference call and the audio replay is Conference ID No. 53345764.  The audio replay of the conference call will also be archived on Martin Midstream Partners' website at www.martinmidstream.com.

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 CONDENSE BALANCE SHEETS
(Dollars in thousands)
 
 June 30, 2017 December 31, 2016
 (Unaudited) (Audited)
Assets   
Cash$32  $15 
Accounts and other receivables, less allowance for doubtful accounts of $238 and $372, respectively50,986  80,508 
Product exchange receivables220  207 
Inventories101,696  82,631 
Due from affiliates21,293  11,567 
Fair value of derivatives133   
Other current assets4,756  3,296 
Assets held for sale13,764  15,779 
Total current assets192,880  194,003 
    
Property, plant and equipment, at cost1,248,328  1,224,277 
Accumulated depreciation(399,684) (378,593)
Property, plant and equipment, net848,644  845,684 
    
Goodwill17,296  17,296 
Investment in WTLPG128,909  129,506 
Note receivable - affiliate  15,000 
Other assets, net38,791  44,874 
Total assets$1,226,520  $1,246,363 
    
Liabilities and Partners' Capital   
Trade and other accounts payable$68,029  $70,249 
Product exchange payables7,606  7,360 
Due to affiliates2,700  8,474 
Income taxes payable402   870 
Fair value of derivatives  3,904 
Other accrued liabilities26,689  26,717 
Total current liabilities105,426  117,574 
    
Long-term debt, net780,359  808,107 
Other long-term obligations6,055  8,676 
Total liabilities891,840  934,357 
    
Commitments and contingencies (Note 17)   
Partners' capital334,680  312,006 
Total partners' capital334,680  312,006 
Total liabilities and partners' capital$1,226,520  $1,246,363 

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 July 26, 2017.


MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per unit amounts)
 
 Three Months Ended Six Months Ended
 June 30, June 30,
 2017 2016 2017 2016
Revenues:       
Terminalling and storage *$24,695  $31,090  $49,353  $62,795 
Marine transportation *12,433  14,339  25,254  30,685 
Natural gas services*14,838  15,403  29,503  31,500 
Sulfur services2,850  2,700  5,700  5,400 
Product sales: *       
Natural gas services73,666  58,899  200,323  149,990 
Sulfur services32,027  39,588  71,554   79,063 
Terminalling and storage33,413  28,329  65,560  56,520 
 139,106  126,816  337,437   285,573 
   Total revenues193,922  190,348  447,247  415,953 
        
Costs and expenses:       
Cost of products sold: (excluding depreciation and amortization)       
Natural gas services *70,198  55,579  178,377  134,123 
Sulfur services *21,207  24,700  45,690  52,224 
Terminalling and storage *28,014  22,934  54,460  46,766 
 119,419  103,213  278,527  233,113 
Expenses:       
Operating expenses *34,435  40,822  69,492  82,054 
Selling, general and administrative *8,909  8,144  18,830  16,315 
Loss on impairment of goodwill  4,145    4,145 
Depreciation and amortization20,326  22,089  45,662  44,137 
   Total costs and expenses183,089  178,413  412,511  379,764 
        
Other operating income (loss)15  (1,679)  (140) (1,595)
Operating income10,848  10,256  34,596  34,594 
        
Other income (expense):       
Equity in earnings of WTLPG853  805  1,758  2,482 
Interest expense, net(11,219) (12,155) (22,139) (22,267)
Other, net520  74  550  136 
   Total other expense(9,846) (11,276) (19,831) (19,649)
        
Net income (loss) before taxes1,002  (1,020) 14,765  14,945 
Income tax expense(13) (191) (193) (242)
Net income (loss)989  (1,211) 14,572  14,703 
Less general partner's interest in net income(19) (3,869) (291) (8,080)
Less (income) loss allocable to unvested restricted units(3) 4  (38) (39)
Limited partners' interest in net income (loss)$967  $(5,076) $14,243  $6,584 
        
Net income (loss) per unit attributable to limited partners - basic$0.03  $(0.14) $0.38  $0.19 
Net income (loss) per unit attributable to limited partners - diluted$0.03  $(0.14) $0.38  $0.19 
Weighted average limited partner units - basic38,357  35,346  37,842  35,366 
Weighted average limited partner units - diluted38,414  35,346  37,895  35,380 

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 July 26, 2017.

*Related Party Transactions Shown Below

MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per unit amounts)
 
*Related Party Transactions Included Above
 
 Three Months Ended Six Months Ended
 June 30, June 30,
 2017 2016 2017 2016
Revenues:*       
Terminalling and storage$20,331  $20,590  $40,035  $41,548 
Marine transportation4,187  6,036  8,512  12,447 
Natural gas services6  129  118  442 
Product Sales724  968  2,154  1,668 
Costs and expenses:*       
Cost of products sold: (excluding depreciation and amortization)       
Natural gas services2,909  4,498  11,803  7,883 
Sulfur services3,767  3,810  7,442  7,622 
Terminalling and storage4,119  4,081  9,186  7,466 
Expenses:        
Operating expenses16,452  18,088  32,828  35,445 
Selling, general and administrative6,500  6,911  14,068  12,343 

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 July 26, 2017.

MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED STATEMENTS OF CAPITAL
(Dollars in thousands)
 
 Partners' Capital  
 Common Limited General
Partner
Amount
  
 Units Amount  Total
Balances - January 1, 201635,456,612  $380,845  $13,034  $393,879 
Net income  6,623  8,080  14,703 
Issuance of restricted units13,800       
Forfeiture of restricted units(250)      
Cash distributions   (57,603) (9,119) (66,722)
Reimbursement of excess purchase price over carrying
   value of acquired assets
  1,875    1,875 
Unit-based compensation  486    486 
Purchase of treasury units(15,200) (330)    (330)
Balances - June 30, 201635,454,962  $ 331,896  $11,995  $343,891 
        
Balances - January 1, 201735,452,062  $304,594  $7,412  $312,006 
Net income  14,281  291  14,572 
Issuance of common units, net of issuance related costs2,990,000  51,071    51,071  
Issuance of restricted units12,000       
Forfeiture of restricted units(1,750)      
General partner contribution    1,098  1,098 
Cash distributions  (36,952) (754) (37,706)
Unit-based compensation  405    405 
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 
Purchase of treasury units(200) (4)    (4)
Balances - June 30, 201738,452,112  $326,633  $8,047  $334,680 

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 Securities and Exchange Commission on July 26, 2017.

MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
 
 Six Months Ended
 June 30,
 2017 2016
Cash flows from operating activities:   
Net income$14,572  $14,703 
Adjustments to reconcile net income to net cash provided by operating activities:   
Depreciation and amortization45,662  44,137 
Amortization of deferred debt issuance costs1,445  2,247 
Amortization of premium on notes payable(153) (153)
Loss on sale of property, plant and equipment140  1,595 
Loss on impairment of goodwill   4,145 
Equity in earnings of WTLPG(1,758) (2,482)
Derivative (income) loss2,392  (1,125)
Net cash (paid) received for commodity derivatives(6,429) 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 
Unit-based compensation405  486 
Cash distributions from WTLPG2,500  4,300 
Change in current assets and liabilities, excluding effects of acquisitions and dispositions:   
Accounts and other receivables29,522  23,995 
Product exchange receivables(13) 932 
Inventories(19,065) (14,766)
Due from affiliates(9,726) 2,154 
Other current assets(1,372) 509 
Trade and other accounts payable(4,067) (3,429)
Product exchange payables 246  (3,923)
Due to affiliates(5,774) (1,879)
Income taxes payable(468) (615)
Other accrued liabilities(2,761) 2,130 
Change in other non-current assets and liabilities490  (614)
   Net cash provided by operating activities45,788  74,803 
    
Cash flows from investing activities:   
Payments for property, plant and equipment(19,756) (27,844)
Acquisitions(19,533)  
Acquisition of intangible assets  (2,150)
Payments for plant turnaround costs(1,591) (1,184)
Proceeds from sale of property, plant and equipment1,597  655 
Proceeds from involuntary conversion of property, plant and equipment  9,100 
Proceeds from repayment of Note receivable - affiliate15,000   
Contributions to WTLPG(145 )  
   Net cash used in investing activities(24,428) (21,423)
    
Cash flows from financing activities:   
Payments of long-term debt(184,000) (163,700)
Proceeds from long-term debt155,000  180,700 
Proceeds from issuance of common units, net of issuance related costs51,071   
General partner contribution1,098   
Purchase of treasury units(4) (330)
Payment of debt issuance costs(40) (5,206)
Excess purchase price over carrying value of acquired assets(7,887)  
Reimbursement of excess purchase price over carrying value of acquired assets1,125  1,875 
Cash distributions paid(37,706) (66,722)
   Net cash used in financing activities(21,343) (53,383)
    
   Net increase (decrease) in cash17  (3)
Cash at beginning of period15  31 
Cash at end of period$32  $28 
Non-cash additions to property, plant and equipment$3,666  $989 

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 July 26, 2017.

MARTIN MIDSTREAM PARTNERS L.P.
SEGMENT OPERATING INCOME
(Dollars and volumes in thousands, except BBL per day)
 
Terminalling and Storage Segment
 
Comparative Results of Operations for the Three Months Ended June 30, 2017 and 2016
 
 Three Months Ended
June 30,
 Variance Percent
Change

 2017 2016  
                
 (In thousands, except BBL per day)    
Revenues:       
Services$26,148  $32,392   $(6,244) (19)%
Products33,413  28,329  5,084  18%
Total revenues59,561  60,721  (1,160) (2)%
        
Cost of products sold28,591   23,471  5,120  22%
Operating expenses15,081  17,725  (2,644) (15)%
Selling, general and administrative expenses1,444  1,007  437  43%
Depreciation and amortization10,327  10,078  249  2%
 4,118  8,440  (4,322) (51)%
Other operating income10    10   
Operating income$4,128  $8,440  $(4,312) (51)%
        
Lubricant sales volumes (gallons)5,361  5,194  167   3%
Shore-based throughput volumes (guaranteed minimum) (gallons)41,666  50,000  (8,334) (17)%
Smackover refinery throughput volumes (guaranteed minimum BBL per day)6,500  6,500    %
Corpus Christi crude terminal (BBL per day)  74,565  (74,565) (100)%


Comparative Results of Operations for the Six Months Ended June 30, 2017 and 2016
 
 Six Months Ended
June 30,
 Variance Percent
Change

 2017 2016  
                
 (In thousands, except BBL per day)    
Revenues:       
Services$52,579  $65,549  $(12,970) (20)%
Products65,560  56,522  9,038  16%
Total revenues118,139  122,071  (3,932) (3)%
         
Cost of products sold55,602  47,821  7,781  16%
Operating expenses30,726  36,441  (5,715) (16)%
Selling, general and administrative expenses2,769   2,107  662  31%
Depreciation and amortization25,804  20,076  5,728  29%
 3,238  15,626  (12,388) (79)%
Other operating income (loss)(3) 100  (103) (103)%
Operating income$3,235  $15,726  $(12,491) (79)%
        
Lubricant sales volumes (gallons)10,695  10,340  355  3%
Shore-based throughput volumes (guaranteed minimum) (gallons)83,333  100,000  (16,667) (17)%
Smackover refinery throughput volumes (guaranteed minimum) (BBL per day)6,500  6,500    %
Corpus Christi crude terminal (BBL per day)  83,600  (83,600) (100)%


Natural Gas Services Segment
 
 Comparative Results of Operations for the Three Months Ended June 30, 2017 and 2016
 
 Three Months Ended
June 30,
 Variance Percent
Change

 2017 2016  
                      
 (In thousands)     
Revenues:          
Services$14,838  $15,403  $(565) (4)%
Products73,666  58,899  14,767  25%
Total revenues88,504  74,302  14,202  19%
        
Cost of products sold71,003  56,233  14,770  26%
Operating expenses5,567  6,138  (571)  (9)%
Selling, general and administrative expenses2,115  1,807  308  17%
Depreciation and amortization6,205  6,983  (778) (11)%
 3,614  3,141  473  15%
Other operating income (loss)5  (96) 101  (105)%
Operating income$3,619  $3,045  $574  19%
        
Distributions from WTLPG$1,300  $1,800  $(500) (28)%
        
NGL sales volumes (Bbls)1,794  1,726  68  4%


Comparative Results of Operations for the Six Months Ended June 30, 2017 and 2016
 
 Six Months Ended
June 30,
 Variance Percent
Change

 2017 2016  
                
 (In thousands)     
Revenues:          
Services$29,503  $31,500  $(1,997) (6)%
Products200,323  149,990  50,333  34%
Total revenues229,826  181,490  48,336  27%
        
Cost of products sold180,306  135,581  44,725  33%
Operating expenses11,225  11,657  (432) (4)%
Selling, general and administrative expenses5,166  4,111  1,055   26%
Depreciation and amortization12,366  13,957  (1,591) (11)%
 20,763  16,184  4,579  28%
Other operating income (loss)5  (96) 101  (105)%
Operating income$20,768  $16,088  $4,680  29%
        
Distributions from WTLPG$2,500  $4,300  $(1,800) (42)%
        
NGL sales volumes (Bbls)4,604  4,928  (324) (7)%


MARTIN MIDSTREAM PARTNERS L.P.
SEGMENT OPERATING INCOME
(Dollars and volumes in thousands, except BBL per day)
 
Sulfur Services Segment
 
 Comparative Results of Operations for the Three Months Ended June 30, 2017 and 2016
 
 Three Months Ended
June 30,
 Variance Percent
Change

 2017 2016  
                   
 (In thousands)     
Revenues:          
Services$2,850  $2,700  $150  6%
Products32,027  39,588  (7,561) (19)%
Total revenues34,877  42,288  (7,411) (18)%
        
Cost of products sold21,297  24,790  (3,493) (14)%
Operating expenses3,417  3,442  (25) (1)%
Selling, general and administrative expenses1,007  930  77  8%
Depreciation and amortization2,030  2,011  19  1%
 7,126  11,115  (3,989) (36)%
Other operating loss  (16) 16  (100)%
Operating income$7,126  $11,099  $(3,973) (36)%
        
Sulfur (long tons)192  181  11  6%
Fertilizer (long tons)71  87  (16 ) (18)%
Total sulfur services volumes (long tons)263  268  (5) (2)%


Comparative Results of Operations for the Six Months Ended June 30, 2017 and 2016 
 
 Six Months Ended
June 30,
 Variance Percent
Change

  2017 2016  
                   
 (In thousands)     
Revenues:          
Services$5,700  $5,400  $300  6%
Products71,554  79,063  (7,509) (9)%
Total revenues77,254  84,463  (7,209) (9)%
        
Cost of products sold45,871  52,405  (6,534) (12)%
Operating expenses6,664  6,199  465  8%
Selling, general and administrative expenses2,028  1,888  140  7%
Depreciation and amortization4,063  3,981  82   2%
 18,628  19,990  (1,362) (7)%
Other operating loss(22) (32) 10  (31)%
Operating income$18,606  $19,958  $ (1,352) (7)%
        
Sulfur (long tons)409  338  71  21%
Fertilizer (long tons)165  170  (5) (3)%
Total sulfur services volumes (long tons)574  508  66  13%


MARTIN MIDSTREAM PARTNERS L.P.
SEGMENT OPERATING INCOME
(Dollars and volumes in thousands, except BBL per day)
 
Marine Transportation Segment
 
Comparative Results of Operations for the Three Months Ended June 30, 2017 and 2016
 
 Three Months Ended
June 30,
 Variance Percent
Change

 2017 2016  
                  
 (In thousands)    
Revenues$13,144  $15,032   $(1,888) (13)%
Operating expenses11,062  14,231  (3,169) (22)%
Selling, general and administrative expenses71  158  (87) (55)%
Loss on impairment of goodwill  4,145  (4,145) (100)%
Depreciation and amortization1,764  3,017  (1,253) (42)%
 247  (6,519) 6,766  (104)%
Other operating loss  (1,567) 1,567   (100)%
Operating income (loss)$247  $(8,086) $8,333  (103)%


Comparative Results of Operations for the Six Months Ended June 30, 2017 and 2016
 
 Six Months Ended
June 30,
 Variance Percent
Change

 2017 2016  
                   
 (In thousands)    
Revenues$26,558  $31,934  $(5,376) (17)%
Operating expenses22,155  29,068  (6,913) (24)%
Selling, general and administrative expenses175  (261) 436  (167)%
Loss on impairment of goodwill  4,145  (4,145) (100)%
Depreciation and amortization3,429  6,123  (2,694) (44)%
 $799  $(7,141)  $7,940  (111)%
Other operating loss(120) (1,567 ) 1,447  (92)%
Operating income (loss)$679   $(8,708) $9,387  (108)%


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 six months ended June 30, 2017 and 2016, which represents EBITDA, Adjusted EBITDA and Distributable Cash Flow.

 
Reconciliation of EBITDA, Adjusted EBITDA, and Distributable Cash Flow
 
 Three Months Ended Six Months Ended
 June 30, June 30,
 2017 2016 2017 2016
 
    (in thousands)
Net income (loss)$ 989  $(1,211 $ 14,572  $ 14,703
Adjustments:        
Interest expense, net11,219  12,155  22,139  22,267 
Income tax expense13  191  193  242 
Depreciation and amortization20,326  22,089  45,662  44,137 
EBITDA32,547  33,224  82,566  81,349 
Adjustments:       
Equity in earnings of WTLPG(853) (805) (1,758) (2,482 )
(Gain) loss on sale of property, plant and equipment(15) 1,679  140  1,595 
Loss on impairment of goodwill  4,145    4,145 
Unrealized mark-to-market on commodity derivatives(200 ) 1,327  (4,037) 1,537 
Distributions from WTLPG1,300  1,800  2,500  4,300 
Unit-based compensation219  264  405  486 
Adjusted EBITDA32,998  41,634  79,816  90,930 
Adjustments:       
Interest expense, net(11,219) (12,155) (22,139) (22,267)
Income tax expense(13) (191) (193) (242)
Amortization of debt premium(76)  (76) (153) (153)
Amortization of deferred debt issuance costs724  1,532  1,445  2,247 
Non-cash mark-to-market on interest rate derivatives      (206)
Payments for plant turnaround costs(197) (193) (1,591) (1,184)
Maintenance capital expenditures(2,618) (5,165) (7,286) (11,209)
Distributable Cash Flow$19,599  $25,386  $49,899  $57,916 


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Source: Martin Midstream Partners L.P.

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