October 25, 2017

Martin Midstream Partners Reports 2017 Third Quarter Financial Results

  • Hurricane Harvey Impact Estimated at $6.0 Million
  • Quarterly Distribution Coverage Ratio Meets Internal Forecast
  • Year to Date Distribution Coverage Ratio of 1.04x and Trailing Twelve Months Coverage Ratio of 1.27x

KILGORE, Texas, Oct. 25, 2017 (GLOBE NEWSWIRE) --  Martin Midstream Partners L.P. (Nasdaq:MMLP) (the "Partnership") announced today its financial results for the quarter ended September 30, 2017.

Ruben Martin, President and Chief Executive Officer of Martin Midstream GP LLC, the general partner of the Partnership said, "For the third quarter ended September 30, 2017, the Partnership generated a distribution coverage ratio of 0.51 times, matching our internal forecast.  Annually, the third quarter is our weakest, coinciding with seasonal troughs in the fertilizer and butane businesses.  Although cash flow from operations was below our guidance levels, so too was maintenance capital expenditures offsetting the impact to distributable cash flow thus, meeting our estimate.

"Highlighting the third quarter was continued strength in our Cardinal Gas Storage division where interruptible services remained stronger than forecasted.  Also, within the Natural Gas Services segment early season butane sales were above our expectations.  This was offset by lower throughput revenue within our Specialty Terminals division and weaker asset utilization in our Marine Transportation segment.

"During the third quarter, maintenance capital spending was lower than anticipated at approximately $5.2 million.  Accordingly, we are reducing our full year maintenance capital expenditure guidance to approximately $20 million.  Some scheduled fourth quarter maintenance capital expenditures will likely be preceded in priority by Hurricane Harvey related repairs and maintenance.  Generally speaking, the Partnership was fortunate to have weathered the impact of storm damage from Hurricane Harvey with only modest disruption.  Of the utmost importance was the safety of our employees and their families and we were very fortunate on that front.  Pertaining to the financial impact and condition of our assets, we estimate the storm will have an approximate $6.0 million negative impact to our business.  This estimate includes total expenses to repair damaged assets affecting cash flow in the third quarter, fourth quarter and first quarter 2018 of $1.0 million, $3.5 million, and $0.4 million, respectively, in addition to the impact of business interruption of approximately $1.1 million in the third quarter 2017.  Because we incurred storm damage at multiple locations, we will not be filing an insurance claim associated with these interruptions and repair expenditures.  In essence, each location's damage was in an amount below the deductible for that specific location.

"As expected during the third quarter, our debt level rose based on working capital increases of approximately $45 million in our Natural Gas Services segment primarily attributed to our butane inventory build.  Based on current market conditions, we anticipate a strong butane sales season during the fourth quarter 2017 and first quarter 2018.  Looking ahead, we should realize significant working capital debt reduction due to butane inventory depletion, reducing the Partnership's leverage over the next two quarters."

The Partnership had a net loss for the third quarter 2017 of $16.3 million, a loss of $0.42 per limited partner unit.  This loss includes the effects of estimated hurricane repair costs of $4.9 million and the expense associated with the upward revision of asset retirement obligations of $5.5 million.  The Partnership had a net loss for the third quarter 2016 of $0.9 million, a loss of $0.03 per limited partner unit.  The Partnership's adjusted EBITDA for the third quarter 2017 was $27.1 million compared to adjusted EBITDA from for the third quarter 2016 of $33.3 million.

The Partnership had a net loss for the nine months ended September 30, 2017 of $1.7 million, a loss of $0.04 per limited partner unit.  The Partnership had net income for the nine months ended September 30, 2016 of $13.8 million, or $0.16 per limited partner unit.  The Partnership's adjusted EBITDA for the nine months ended September 30, 2017 was $106.9 million compared to adjusted EBITDA for the nine months ended September 30, 2016 of $124.2 million.

The Partnership's distributable cash flow for the third quarter 2017 was $9.9 million compared to distributable cash flow for the third quarter 2016 of $19.9 million.

The Partnership's distributable cash flow for the nine months ended September 30, 2017 was $59.8 million compared to distributable cash flow for the nine months ended September 30, 2016 of $77.9 million.

Revenues for the third quarter 2017 were $193.1 million compared to the third quarter 2016 of $174.5 million. Revenues for the nine months ended  September 30, 2017 were $640.4 million compared to the nine months ended September 30, 2016 of $590.5 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 nine months ended September 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 October 25, 2017.

An attachment accompanying this announcement is available at http://www.globenewswire.com/NewsRoom/AttachmentNg/0ff92a73-c811-4f59-8574-a85c689ef18c.

Investors' Conference Call

An investors' conference call to review the third quarter results will be held on Thursday, October 26, 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 October 26, 2017 through 10:59 p.m. Central Time on November 6, 2017.  The access code for the conference call and the audio replay is Conference ID No. 98725323.  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 CONDENSED BALANCE SHEETS
(Dollars in thousands)
 
  September 30, 2017 December 31, 2016
  (Unaudited) (Audited)
Assets    
Cash $15  $15 
Accounts and other receivables, less allowance for doubtful accounts of $319 and $372, respectively 64,127  80,508 
Product exchange receivables 34  207 
Inventories 130,618  82,631 
Due from affiliates 13,484  11,567 
Fair value of derivatives 133   
Other current assets 3,703  3,296 
Assets held for sale 13,764  15,779 
Total current assets 225,878  194,003 
     
Property, plant and equipment, at cost 1,248,093  1,224,277 
Accumulated depreciation (408,426) (378,593)
Property, plant and equipment, net 839,667  845,684 
     
Goodwill 17,296  17,296 
Investment in WTLPG 127,998  129,506 
Note receivable - affiliate   15,000 
Other assets, net 37,211  44,874 
Total assets $1,248,050  $1,246,363 
      
Liabilities and Partners' Capital    
Trade and other accounts payable $72,019  $70,249 
Product exchange payables 9,270  7,360 
Due to affiliates 3,305  8,474 
Income taxes payable 450  870 
Fair value of derivatives   3,904 
Other accrued liabilities 25,710  26,717 
Total current liabilities 110,754  117,574 
     
Long-term debt, net 829,991   808,107 
Other long-term obligations 8,425  8,676 
Total liabilities 949,170  934,357 
     
Commitments and contingencies (Note 17)     
Partners' capital 298,880  312,006 
Total partners' capital 298,880  312,006 
Total liabilities and partners' capital $1,248,050  $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 October 25, 2017.

 
 
MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per unit amounts)
 
  Three Months Ended Nine Months Ended
  September 30, September 30,
  2017 2016 2017 2016
Revenues:        
Terminalling and storage * $25,752  $30,770  $75,105  $93,565 
Marine transportation * 11,407  13,846  36,661  44,531 
Natural gas services* 14,253  14,618  43,756  46,118 
Sulfur services 2,850  2,700  8,550  8,100 
Product sales: *        
Natural gas services 83,831  57,378  284,154  207,368 
Sulfur services 24,174  26,396  95,728  105,459 
Terminalling and storage 30,861  28,829  96,421  85,349 
  138,866  112,603  476,303  398,176 
Total revenues 193,128  174,537  640,375  590,490 
          
Costs and expenses:        
Cost of products sold: (excluding depreciation and amortization)        
Natural gas services * 77,368   50,658  255,745  184,781 
Sulfur services * 19,716  21,510  65,406  73,734 
Terminalling and storage * 25,852  23,540  80,312  70,306 
  122,936  95,708  401,463  328,821 
Expenses:        
Operating expenses * 45,072  39,488  114,564  121,542 
Selling, general and administrative * 9,131  8,049  27,961  24,364 
Loss on impairment of goodwill        4,145 
Depreciation and amortization 20,286  22,129  65,948  66,266 
Total costs and expenses 197,425  165,374  609,936  545,138 
         
Other operating income (loss) (187) 13  (327) (1,582)
Operating income (loss) (4,484) 9,176  30,112  43,770 
         
Other income (expense):         
Equity in earnings of WTLPG 789  1,120  2,547  3,602 
Interest expense, net (12,538) (11,779) (34,677) (34,046)
Other, net 55  730  605   866 
Total other expense (11,694) (9,929)  (31,525) (29,578)
         
Net income (loss) before taxes (16,178) (753) (1,413) 14,192 
Income tax expense  (108) (180) (301) (422)
Net income (loss) (16,286) (933) (1,714)  13,770 
Less general partner's interest in net income (loss) 325  18  34  (8,062)
Less (income) loss allocable to unvested restricted units 38  3    (36)
Limited partners' interest in net income (loss) $(15,923) $(912) $(1,680) $5,672 
         
Net income (loss) per unit attributable to limited partners - basic $(0.42) $(0.03) $(0.04) $0.16 
Net income (loss) per unit attributable to limited partners - diluted $(0.42) $(0.03 ) $(0.04) $0.16 
Weighted average limited partner units - basic 38,357  35,346  38,016  35,358 
Weighted average limited partner units - diluted 38,357  35,346  38,016  35,381 

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 25, 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 Nine Months Ended
  September 30, September 30,
  2017 2016 2017 2016
Revenues:*        
Terminalling and storage $21,910  $20,649  $61,945  $62,197 
Marine transportation 4,098   4,861  12,610  17,308 
Natural gas services 4  132  122  574 
Product Sales 828  723  2,982  2,391 
Costs and expenses:*        
Cost of products sold: (excluding depreciation and amortization)        
Natural gas services 3,033  2,946  14,836  10,829 
Sulfur services 3,555  3,678  10,997  11,300 
Terminalling and storage 4,817  3,766  14,003  11,232 
Expenses:        
Operating expenses 15,858  17,810  48,686  53,255 
Selling, general and administrative 6,495  5,748  20,563  18,091 

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 25, 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, 2016 35,456,612  $380,845  $13,034  $393,879 
Net income   5,708  8,062  13,770 
Issuance of common units, net   (28)   (28)
Issuance of restricted units 13,800       
Forfeiture of restricted units (500)      
Cash distributions   (86,410) (13,680 ) (100,090)
Reimbursement of excess purchase price over carrying value of acquired assets   3,000    3,000 
Unit-based compensation   712    712 
Purchase of treasury units (15,200) (330)   (330)
Balances - September 30, 2016 35,454,712  $303,497   $7,416  $310,913 
         
Balances - January 1, 2017 35,452,062  $304,594  $7,412  $312,006 
Net loss   (1,680) (34) (1,714)
Issuance of common units, net of issuance related costs 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 
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 - September 30, 2017  38,448,112  $291,550  $7,330  $298,880 

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 25, 2017.

 
 
MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
 
  Nine Months Ended
  September 30,
  2017 2016
Cash flows from operating activities:    
Net income (loss) $(1,714) $13,770 
Adjustments to reconcile net income (loss) to net cash provided by operating activities:    
Depreciation and amortization 65,948  66,266 
Amortization of deferred debt issuance costs 2,170  2,965 
Amortization of premium on notes payable (230) (230)
Loss on sale of property, plant and equipment 327  1,582 
Loss on impairment of goodwill   4,145 
Equity in earnings of WTLPG (2,547) (3,602)
Derivative (income) loss 2,392  (1,867)
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 compensation 518  712 
Cash distributions from WTLPG 4,200  6,100 
Change in current assets and liabilities, excluding effects of acquisitions and dispositions:    
Accounts and other receivables 16,381  28,028 
Product exchange receivables 173  891 
Inventories (48,022) (31,606)
Due from affiliates (1,917) 1,932 
Other current assets (411) (4,693)
Trade and other accounts payable 2,222  (15,782)
Product exchange payables 1,910  (2,544)
Due to affiliates (5,169) (1,859)
Income taxes payable (420) (435)
Other accrued liabilities (3,766) (3,729)
Change in other non-current assets and liabilities 1,941  (765)
Net cash provided by operating activities 27,557  61,735 
     
Cash flows from investing activities:    
Payments for property, plant and equipment (30,014)  (31,884)
Acquisitions (19,533)  
Acquisition of intangible assets    (2,150)
Payments for plant turnaround costs (1,583) (1,614)
Proceeds from sale of property, plant and equipment 1,604  2,174 
Proceeds from involuntary conversion of property, plant and equipment   23,400 
Proceeds from repayment of Note receivable - affiliate 15,000   
Contributions to WTLPG (145)  
Other (900)  
Net cash used in investing activities (35,571)  (10,074)
     
Cash flows from financing activities:    
Payments of long-term debt (242,000) (219,700)
Proceeds from long-term debt 262,000  270,700 
Proceeds from issuance of common units, net of issuance related costs 51,061  (28)
General partner contribution 1,098   
Purchase of treasury units (4) (330)
Payment of debt issuance costs (56) (5,234)
Excess purchase price over carrying value of acquired assets (7,887)  
Reimbursement of excess purchase price over carrying value of acquired assets  1,125  3,000 
Cash distributions paid (57,323) (100,090)
Net cash provided by (used in) financing activities 8,014  (51,682)
      
Net increase (decrease) in cash   (21)
Cash at beginning of period 15  31 
Cash at end of period $15  $10 
Non-cash additions to property, plant and equipment $1,367  $1,068 

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 25, 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 September 30, 2017 and 2016
 
  Three Months Ended
September 30 ,
 Variance Percent
Change
  2017 2016  
  (In thousands, except BBL per day)  
Revenues:         
Services $26,944  $32,114  $(5,170) (16)%
Products 30,861  28,829  2,032  7%
Total revenues 57,805  60,943  (3,138)  (5)%
         
Cost of products sold 26,451  24,118  2,333  10%
Operating expenses 25,762  18,299  7,463  41%
Selling, general and administrative expenses 1,668  1,439  229  16%
Depreciation and amortization 10,192  10,828  (636) (6)%
  (6,268) 6,259  (12,527) (200)%
Other operating income (loss) (187) 254  (441) (174)%
Operating income (loss) $(6,455) $6,513  $(12,968) (199)%
         
Lubricant sales volumes (gallons) 5,217  5,196  21  %
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)   65,116  (65,116) (100)%


 
Comparative Results of Operations for the Nine Months Ended September 30, 2017 and 2016
 
  Nine Months Ended
September 30,
 Variance Percent
Change
   2017 2016  
  (In thousands, except BBL per day)  
Revenues:        
Services $79,523  $97,663  $(18,140) (19)%
Products 96,421  85,351  11,070  13%
Total revenues 175,944  183,014  (7,070) (4)%
         
Cost of products sold 82,053  71,939  10,114   14%
Operating expenses 56,488  54,740  1,748  3 %
Selling, general and administrative expenses 4,437  3,546  891  25%
Depreciation and amortization 35,996  30,904  5,092  16%
  (3,030) 21,885  (24,915) (114)%
Other operating income (loss) (190) 354  (544) (154)%
Operating income (loss)  $(3,220) $22,239  $(25,459) (114)%
         
Lubricant sales volumes (gallons) 15,912  15,536  376  2%
Shore-based throughput volumes (guaranteed minimum) (gallons) 124,998  150,000   (25,002) (17)%
Smackover refinery throughput volumes (guaranteed minimum) (BBL per day) 6,500  6,500    %
Corpus Christi crude terminal (BBL per day)   77,394  (77,394) (100)%


 
Natural Gas Services Segment
 
Comparative Results of Operations for the Three Months Ended September 30, 2017 and 2016
 
  Three Months Ended
September 30,
 Variance Percent
Change
  2017 2016  
  (In thousands)  
Revenues:        
Services $14,253  $14,618  $(365) (2)%
Products 84,057  57,378  26,679  46%
Total revenues 98,310  71,996  26,314   37%
         
Cost of products sold 78,138  51,353  26,785  52%
Operating expenses 5,528  5,822  (294) (5)%
Selling, general and administrative expenses 1,889  1,309  580  44%
Depreciation and amortization 6,274  7,050  (776) (11)%
  6,481  6,462  19  %
Other operating income (loss) 2  (7) 9  (129)%
Operating income $6,483  $6,455  $28  %
         
Distributions from WTLPG $1,700  $1,800  $(100) (6)%
         
NGL sales volumes (Bbls) 1,943  1,592   351  22%


 
 
Comparative Results of Operations for the Nine Months Ended September 30, 2017 and 2016
 
  Nine Months Ended
September 30,
 Variance Percent
Change
  2017 2016  
  (In thousands)   
Revenues:        
Services $43,756   $46,118  $(2,362) (5)%
Products 284,380  207,368  77,012  37%
Total revenues 328,136  253,486  74,650  29%
         
Cost of products sold 258,444  186,934  71,510  38%
Operating expenses 16,753  17,479  (726)  (4)%
Selling, general and administrative expenses 7,055  5,420  1,635  30%
Depreciation and amortization 18,640  21,007  (2,367) (11)%
  27,244  22,646  4,598  20%
Other operating income (loss) 7  (103) 110  (107)%
Operating income $27,251  $22,543  $4,708  21%
          
Distributions from WTLPG $4,200  $6,100  $(1,900 ) (31)%
         
NGL sales volumes (Bbls) 6,547  6,520  27  %


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 September 30, 2017 and 2016
 
  Three Months Ended
September 30,
  Variance Percent
Change
  2017 2016  
  (In thousands)  
Revenues:        
Services $2,850  $2,700  $150  6%
Products 24,174  26,396  (2,222) (8)%
Total revenues 27,024  29,096  (2,072) (7)%
         
Cost of products sold 19,807  21,601   (1,794) (8)%
Operating expenses 3,557  4,089  (532) (13)%
Selling, general and administrative expenses 1,071  946  125  13%
Depreciation and amortization 2,020  1,997  23   1%
  569  463  106  23%
Other operating loss (2) (234) 232   (99)%
Operating income $567  $229  $338  148%
         
Sulfur (long tons) 198  241  (43) (18)%
Fertilizer (long tons) 52  47  5  11%
Total sulfur services volumes (long tons) 250  288  (38) (13)%


Comparative Results of Operations for the Nine Months Ended September 30, 2017 and 2016   
 
  Nine Months Ended
September 30,
 Variance Percent
Change
  2017  2016  
  (In thousands)  
Revenues:        
Services $8,550  $8,100  $450  6%
Products 95,728  105,459  (9,731) (9)%
Total revenues 104,278  113,559  (9,281) (8)%
         
Cost of products sold 65,678  74,006  (8,328) (11)%
Operating expenses 10,221  10,288  (67) (1)%
Selling, general and administrative expenses 3,099  2,834  265  9%
Depreciation and amortization 6,083  5,978  105  2%
  19,197  20,453  (1,256) (6)%
Other operating loss (24) (266) 242  (91)%
Operating income $ 19,173  $20,187  $(1,014) (5)%
         
Sulfur (long tons) 607  579  28  5%
Fertilizer (long tons) 217  217    %
Total sulfur services volumes (long tons) 824  796  28  4%


 
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 September 30, 2017 and 2016
 
  Three Months Ended
September 30,
 Variance Percent
Change
  2017 2016  
  (In thousands)   
Revenues $12,400  $14,920  $(2,520) (17)%
Operating expenses 11,176  12,332  (1,156) (9)%
Selling, general and administrative expenses 112  149  (37) (25)%
Depreciation and amortization 1,800  2,254  (454) (20)%
Operating income (loss) $(688) $185  $(873) (472)%


Comparative Results of Operations for the Nine Months Ended September 30, 2017 and 2016
 
  Nine Months Ended
September 30,
 Variance Percent
Change
  2017 2016  
   (In thousands)  
Revenues $38,958  $46,854  $(7,896) (17)%
Operating expenses 33,331  41,400  (8,069)  (19)%
Selling, general and administrative expenses 287  (112) 399  (356)%
Loss on impairment of goodwill   4,145  (4,145) (100)%
Depreciation and amortization 5,229  8,377  (3,148) (38)%
  $111  $(6,956) $7,067  (102)%
Other operating loss (120) (1,567)  1,447  (92)%
Operating loss $(9) $(8,523) $8,514  (100)%

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, 2017 and 2016, which represents EBITDA, Adjusted EBITDA and Distributable Cash Flow.

 
Reconciliation of EBITDA, Adjusted EBITDA, and Distributable Cash Flow
 
 Three Months Ended Nine Months Ended
 September 30, September 30,
 2017 2016 2017 2016
 (in thousands)
Net income (loss)$(16,286) $(933) $(1,714) $13,770 
Adjustments:       
Interest expense, net12,538  11,779  34,677  34,046 
Income tax expense108  180  301  422 
Depreciation and amortization20,286  22,129  65,948  66,266 
EBITDA16,646  33,155  99,212  114,504 
Adjustments:       
Equity in earnings of WTLPG(789) (1,120) (2,547) (3,602)
(Gain) loss on sale of property, plant and equipment187  (13) 327  1,582 
Loss on impairment of goodwill      4,145 
Unrealized mark-to-market on commodity derivatives  (742) (4,037) 795 
Hurricane damage repair accrual3,725    3,725   
Asset retirement obligation revision5,547    5,547   
Distributions from WTLPG1,700  1,800  4,200  6,100 
Unit-based compensation113  226  518  712 
Adjusted EBITDA27,129  33,306  106,945  124,236 
Adjustments:       
Interest expense, net(12,538) (11,779) (34,677) (34,046)
Income tax expense(108) (180) (301) (422)
Amortization of debt premium(77) (77) (230) (230 )
Amortization of deferred debt issuance costs725  718  2,170  2,965 
Non-cash mark-to-market on interest rate derivatives      (206)
Payments for plant turnaround costs8  (430) (1,583) (1,614)
Maintenance capital expenditures(5,208) (1,609) (12,494) (12,818)
Distributable Cash Flow $9,931  $19,949  $59,830  $77,865 

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Source: Martin Midstream Partners L.P.

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