Document

UNITED STATES
 
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K
 
CURRENT REPORT
 
Pursuant to Section 13 or 15(d)
 
of the Securities Exchange Act of 1934
 
Date of report (date of earliest event reported): July 27, 2020
 
MARTIN MIDSTREAM PARTNERS L.P.
(Exact name of Registrant as specified in its charter)
Delaware 
000-50056

 
05-0527861

 (State of incorporation
or organization)
(Commission file number)(I.R.S. employer identification number)
4200 Stone Road 
Kilgore, Texas 75662
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (903) 983-6200
 
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Units representing limited partnership interestsMMLPThe NASDAQ Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the
Exchange Act. o



Item 2.02 Results of Operations and Financial Condition.
 
       On July 27, 2020, the Partnership issued a press release reporting its financial results for the quarter ended June 30, 2020.   A copy of the press release is furnished as Exhibit 99.1 to this Report and will be published on the Partnership's website at www.MMLP.com. In accordance with General Instruction B.2 of Form 8-K, the information set forth herein and in the press release is deemed to be “furnished” and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). 
Item 9.01 Financial Statements and Exhibits.
 
(d)   Exhibits
 
   In accordance with General Instruction B.2 of Form 8-K, the information set forth in the attached Exhibit 99.1 and Exhibit 99.2 are deemed to be “furnished” and shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act.
Exhibit
Number
Description
99.1
99.2
104
Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document (contained in Exhibit 101).




 SIGNATURES
 
     Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
MARTIN MIDSTREAM PARTNERS L.P.
 
By: Martin Midstream GP LLC,
Its General Partner
 
Date: July 27, 2020 By: /s/ Robert D. Bondurant  
 
Robert D. Bondurant
  
Executive Vice President, Treasurer, Principal Accounting Officer and
Chief Financial Officer 
 
 

Document

EXHIBIT 99.1

MARTIN MIDSTREAM PARTNERS REPORTS SECOND QUARTER 2020 FINANCIAL RESULTS AND DECLARES QUARTERLY CASH DISTRIBUTION

Reported net loss of $2.2 million and net income of $6.6 million for the three and six months ended June 30, 2020, respectively
Reported adjusted EBITDA of $23.9 million and $54.9 million for the three and six months ended June 30, 2020, respectively
Generated distributable cash flow of $12.5 million and $30.8 million for the three and six months ended June 30, 2020, resulting in a quarterly distribution coverage ratio of 5.10 times and 6.26 times, respectively
As previously disclosed, exchange offer and cash tender offer early participation of $335.5 million aggregate principal amount, or 92.045% of all outstanding senior unsecured notes
Adjusts quarterly cash distribution to $0.005 or $0.020 per unit annually as required by the credit facility amendment dated July 8, 2020

KILGORE, Texas, July 27, 2020 (GLOBE NEWSWIRE) -- Martin Midstream Partners L.P. (Nasdaq:MMLP) (the "Partnership") today announced its financial results for the second quarter of 2020.

"We are pleased with our second quarter results as we continue to navigate through the crisis brought on by the COVID-19 pandemic," commented Ruben Martin, President and Chief Executive Officer of Martin Midstream GP LLC, the general partner of the Partnership. "Entering into the quarter we were beginning to see the negative impacts of reduced refinery utilization on our businesses. However, as expected, the performance of our fertilizer division offset a portion of the impact as sales were strong through the corn planting season. Overall we remain confident in our diversified business model during these challenging times and fully expect to meet our guidance, although the uncertainty around containment of the virus and the length of the disruption to our economy and society continues to blur our line of sight for the near future. I want to commend our team for their commitment to safe and reliable operations that protect the health of our workforce and business partners while continuing to deliver positive results.

"Finally, I would like to thank our lenders and noteholders for the support they have given the Partnership through the amendment of our revolving credit facility and the refinancing of our senior notes by the exchange offer that was launched July 9th. As previously announced, the early participation results were 92.045%, slightly below the 95.0% requirement under the Restructuring Support Agreement. However, we are optimistic the threshold percentage will be met prior to the expiration date and anticipate settling the exchange on August 12th. Although we regret the need to reduce the cash distribution due to leverage covenant conditions contained in the revolving credit facility, the Partnership’s extended debt maturity profile and improved liquidity allow us to continue to strengthen our balance sheet and reduce leverage while focusing on our long-term vision for the business."

SECOND QUARTER 2020 OPERATING RESULTS BY BUSINESS SEGMENT

TERMINALLING AND STORAGE (“T&S”)

T&S Operating Income for the three months ended June 30, 2020 and 2019 was $3.3 million and $4.4 million, respectively.

Adjusted segment EBITDA for T&S was $10.6 million and $12.3 million for the three month periods ended June 30, 2020 and 2019, respectively, reflecting reduced volumes in the lubricants business related to lower demand in the oil field and construction industries due to COVID-19, expired capital recovery fees at the Smackover Refinery and decreased fees related to a crude pipeline gathering rate adjustment.

TRANSPORTATION




Transportation Operating Income for the three months ended June 30, 2020 and 2019 was $0.6 million and $3.3 million, respectively.

Adjusted segment EBITDA for Transportation was $4.9 and $8.7 for the three months ended June 30, 2020 and 2019, respectively, reflecting lower land transportation load count and lower marine utilization related to demand destruction and lower refinery utilization as a result of COVID-19.

SULFUR SERVICES

Sulfur Services Operating Income for the three months ended June 30, 2020 and 2019 was $7.4 million and $5.3 million, respectively.

Adjusted segment EBITDA for Sulfur Services was $10.8 and $8.6 for the three months ended June 30, 2020 and 2019 respectively, reflecting increased volumes in the fertilizer business slightly offset by reduced sulfur volumes due to lower refinery utilization impacted by demand destruction around COVID-19.

NATURAL GAS LIQUIDS (“NGL”)

NGL Operating Income (Loss) for the three months ended June 30, 2020 and 2019 was $1.1 million and $(3.4) million, respectively.

Adjusted segment EBITDA from continuing operations for NGL was $1.6 million and $(0.2) million for the three months ended June 30, 2020 and 2019, respectively, reflecting an increase in volumes and margins in 2020 and losses in 2019 from commodity hedging contracts related to activities in the butane optimization business.

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

USGA expenses included in operating income were $4.4 million and $4.6 million for the three months ended June 30, 2020 and 2019 respectively.

USGA expenses included in adjusted EBITDA were $4.0 million and $4.3 million for the three months ended June 30, 2020 and 2019 respectively, reflecting a decrease in professional fees.


2020 FINANCIAL GUIDANCE UPDATE

The majority of our refinery services are focused on the Gulf Coast Region whose states have reopened their economies. However, the impact on refinery utilization due to demand destruction related to the current increase in COVID-19 cases remains unclear. As a result, the Partnership is not providing detailed segment guidance for 2020 but instead providing an estimated range for Adjusted EBITDA, Expansion Capital Expenditures and Maintenance Capital Expenditures.

MMLP 2020 Guidance$ millions
Adjusted EBITDA$95 - 107
Expansion Capital Expenditures
$10 - 131
Maintenance Capital Expenditures$14 - 16

1 On July 9, 2020, the Partnership executed a long-term terminalling service agreement with a third-party customer that requires upgrades to a tank at our Tampa terminal. Expansion Cap Ex guidance range increased by ~$2.0 million related to those upgrades.




The Partnership has not provided comparable GAAP financial information on a forward-looking basis because it would require the Partnership to create estimated ranges on a GAAP basis, which would entail unreasonable effort as the adjustments required to reconcile forward-looking non-GAAP measures cannot be predicted with a reasonable degree of certainty but may include, among others, costs related to debt amendments and unusual charges, expenses and gains. Some or all of those adjustments could be significant.

LIQUIDITY

At June 30, 2020, the Partnership had $181 million drawn on its $400 million revolving credit facility, an $11 million increase from March 31, 2020. Accordingly, the Partnership’s leverage ratio, as calculated under the revolving credit facility, was 4.8 times on June 30, 2020 compared to 4.7 times on March 31, 2020. The Partnership is in compliance with all debt covenants as of June 30, 2020.

QUARTERLY CASH DISTRIBUTION

The Partnership has declared a quarterly cash distribution of $0.005 per unit for the quarter ended June 30, 2020. The distribution is payable on August 14, 2020 to common unitholders of record as of the close of business on August 7, 2020. The ex-dividend date for the cash distribution is August 6, 2020.

COVID-19 RESPONSE

The Partnership initiated protocols in response to the COVID-19 pandemic which include work from home initiatives to protect the health and safety of our employees as well as the communities where we operate, travel restrictions, and training personnel regarding preventative measures when accessing docks, vessels and operating locations. At this time all facilities are operational and monitored closely.

RESULTS OF OPERATIONS

The Partnership had a net loss from continuing operations for the three months ended June 30, 2020 of $2.2 million, a loss of $0.06 per limited partner unit. The Partnership had a net loss from continuing operations for the three months ended June 30, 2019 of $10.6 million, a loss of $0.27 per limited partner unit. Adjusted EBITDA from continuing operations for the three months ended June 30, 2020 was $23.9 million compared to the three months ended June 30, 2019 of $23.5 million. Distributable cash flow from continuing operations for the three months ended June 30, 2020 was $12.5 million compared to the three months ended June 30, 2019 of $6.4 million.

The Partnership had no net income from discontinued operations for the three months ended June 30, 2020 compared to a loss of $180.6 million, or $4.55 per limited partner unit for the three months ended June 30, 2019.  The Partnership had no adjusted EBITDA from discontinued operations for the three months ended June 30, 2020 compared to $5.5 million for the three months ended June 30, 2019. The Partnership had no distributable cash flow from discontinued operations for the three months ended June 30, 2020 compared to $4.9 million for the three months ended June 30, 2019.

The Partnership had net income from continuing operations for the six months ended June 30, 2020 of $6.6 million, or $0.17 per limited partner unit. The Partnership had a net loss from continuing operations for the six months ended June 30, 2019 of $15.4 million, a loss of $0.39 per limited partner unit. Adjusted EBITDA from continuing operations for the six months ended June 30, 2020 was $54.9 million compared to the six months ended June 30, 2019 of $50.8 million. Distributable cash flow from continuing operations for the six months ended June 30, 2020 was $30.8 million compared to the six months ended June 30, 2019 of $12.7 million.

The Partnership had no net income from discontinued operations for the six months ended June 30, 2020 compared to a loss of $179.5 million, or $4.52 per limited partner unit for the six months ended June 30, 2019.  The Partnership had no adjusted EBITDA from discontinued operations for the six months ended June 30, 2020 compared to $10.7 million for the six months ended June 30, 2019. The Partnership had no distributable cash flow



from discontinued operations for the six months ended June 30, 2020 compared to $9.8 million for the six months ended June 30, 2019.

Revenues for the three months ended June 30, 2020 were $140.6 million compared to the three months ended June 30, 2019 of $187.3 million. Revenues for the six months ended June 30, 2020 were $339.5 million compared to the six months ended June 30, 2019 of $427.4 million.

Distributable cash flow from continuing operations, distributable cash flow from discontinued operations, EBITDA, adjusted EBITDA from continuing operations, and adjusted EBITDA from discontinued operations 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 from continuing operations, 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.

An attachment accompanying this announcement and included in the Current Report on Form 8-K to which this announcement is included, contains a comparison of the Partnership’s Adjusted EBITDA for the second quarter 2020 to the Partnership's Adjusted EBITDA for 2019.

Investors' Conference Call

An investors conference call to review the second quarter results will be held on Tuesday, July 28, 2020 at 8:00 a.m. Central Time. The live conference call will be available by calling (877) 878-2695. For a limited time, an audio replay of the conference call will be available by calling (855) 859-2056. The conference ID is 9677403. An archive of the replay will be on Martin Midstream Partners’ website at www.MMLP.com.

About Martin Midstream Partners

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

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, including (i) the current and potential impacts of the COVID-19 pandemic generally, on an industry-specific basis, and on the Partnership’s specific operations and business, (ii) the Partnership’s ability to refinance its senior unsecured notes due February 15, 2021 prior to August 19, 2020, (iii) the Partnership’s pursuit of strategic alternatives, (iv) the effects of the continued volatility of commodity prices and the related macroeconomic and political environment, and (v) other factors, many of which are outside its control, which could cause actual results to differ materially from such statements. While the Partnership believes that the assumptions concerning future events are reasonable, it cautions that there are inherent difficulties in anticipating or predicting certain important factors. A discussion of these factors, including risks and uncertainties, is set forth in the Partnership’s annual and quarterly reports filed from time to time with the Securities and Exchange Commission. The Partnership disclaims any intention or obligation to revise any forward-looking statements, including financial estimates, whether as a result of new information, future events, or otherwise except where required to do so by law.




Use of Non-GAAP Financial Information

The Partnership's management uses a variety of financial and operational measurements other than its financial statements prepared in accordance with United States Generally Accepted Accounting Principles ("GAAP") to analyze its performance. These include: (1) net income before interest expense, income tax expense, and depreciation and amortization ("EBITDA"), (2) adjusted EBITDA 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, Adjusted EBITDA from Continuing Operations, and Adjusted EBITDA from Discontinued Operations. Certain items excluded from EBITDA, adjusted EBITDA from continuing operations, and adjusted EBITDA from discontinued operations 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, adjusted EBITDA from continuing operations, and adjusted EBITDA from discontinued operations 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 and Distributable Cash Flow from Discontinued Operations. 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 from continuing operations, adjusted EBITDA from discontinued operations, distributable cash flow, and distributable cash flow from discontinued operations, 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.MMLP.com or by contacting:

Sharon Taylor - Head of Investor Relations
(877) 256-6644




MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED BALANCE SHEETS
(Dollars in thousands)
 June 30, 2020December 31, 2019
(Unaudited)(Audited)
Assets  
Cash$52  $2,856  
Accounts and other receivables, less allowance for doubtful accounts of $516 and $532, respectively
48,517  87,254  
Inventories 65,668  62,540  
Due from affiliates18,889  17,829  
Other current assets9,605  5,833  
Assets held for sale—  5,052  
Total current assets142,731  181,364  
Property, plant and equipment, at cost899,225  884,728  
Accumulated depreciation(493,115) (467,531) 
Property, plant and equipment, net406,110  417,197  
Goodwill17,705  17,705  
Right-of-use assets 24,554  23,901  
Deferred income taxes, net 22,404  23,422  
Other assets, net 3,475  3,567  
Total assets$616,979  $667,156  
Liabilities and Partners’ Capital (Deficit)  
Current installments of long-term debt and finance lease obligations $368,150  $6,758  
Trade and other accounts payable45,785  64,802  
Product exchange payables5,133  4,322  
Due to affiliates444  1,470  
Income taxes payable498  472  
Fair value of derivatives —  667  
Other accrued liabilities26,496  28,789  
Total current liabilities446,506  107,280  
Long-term debt, net 176,794  569,788  
Finance lease obligations405  717  
Operating lease liabilities 17,081  16,656  
Other long-term obligations10,000  8,911  
Total liabilities650,786  703,352  
Commitments and contingencies
Partners’ capital (deficit) (33,807) (36,196) 
Total partners’ capital (deficit)(33,807) (36,196) 
Total liabilities and partners' capital (deficit)$616,979  $667,156  






MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per unit amounts)
Three Months EndedSix Months Ended
June 30,June 30,
2020201920202019
Revenues:  
Terminalling and storage  *$19,908  $21,377  $40,382  $44,481  
Transportation  *31,485  41,321  70,426  79,116  
Sulfur services2,914  2,858  5,829  5,717  
Product sales: *
Natural gas liquids30,299  57,398  112,510  173,872  
Sulfur services30,506  32,998  55,914  61,732  
Terminalling and storage25,526  31,371  54,460  62,438  
 86,331  121,767  222,884  298,042  
Total revenues140,638  187,323  339,521  427,356  
Costs and expenses:    
Cost of products sold: (excluding depreciation and amortization)
    
Natural gas liquids *24,293  53,546  94,128  159,736  
Sulfur services *17,559  22,124  32,854  41,820  
Terminalling and storage *21,438  26,118  45,118  52,989  
 63,290  101,788  172,100  254,545  
Expenses:    
Operating expenses  *44,202  53,579  95,484  105,428  
Selling, general and administrative  *9,858  10,226  20,320  20,426  
Depreciation and amortization15,343  15,087  30,582  29,988  
Total costs and expenses132,693  180,680  318,486  410,387  
Other operating income (loss), net15  (1,633) 2,525  (2,353) 
Operating income7,960  5,010  23,560  14,616  
Other income (expense):    
Interest expense, net(9,377) (14,986) (19,302) (28,657) 
Gain on retirement of senior unsecured notes—  —  3,484  —  
Other, net    
Total other expense(9,373) (14,985) (15,811) (28,653) 
Net income (loss) before taxes(1,413) (9,975) 7,749  (14,037) 
Income tax expense(790) (639) (1,137) (1,335) 
Income (loss) from continuing operations(2,203) (10,614) 6,612  (15,372) 
Income from discontinued operations, net of income taxes
—  (180,568) —  (179,466) 
Net income (loss)(2,203) (191,182) 6,612  (194,838) 
Less general partner's interest in net (income) loss44  3,824  (132) 3,897  
Less (income) loss allocable to unvested restricted units10  65  (45) 67  
Limited partners' interest in net income (loss)$(2,149) $(187,293) $6,435  $(190,874) 



*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 EndedSix Months Ended
June 30,June 30,
2020201920202019
Revenues:*    
Terminalling and storage$15,942  $17,477  $31,816  $36,449  
Transportation5,393  5,856  11,287  11,499  
Product Sales38  286  130  707  
Costs and expenses:*
Cost of products sold: (excluding depreciation and amortization)
Sulfur services2,554  2,884  5,321  5,458  
Terminalling and storage4,249  7,203  10,026  13,112  
Expenses:
Operating expenses19,440  24,407  41,211  46,943  
Selling, general and administrative8,055  8,558  16,367  17,093  









MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per unit amounts)
Three Months EndedSix Months Ended
 June 30,June 30,
 2020201920202019
Allocation of net income (loss) attributable to:    
   Limited partner interest:    
 Continuing operations$(2,149) $(10,398) $6,435  $(15,060) 
 Discontinued operations—  (176,895) —  (175,814) 
 $(2,149) $(187,293) $6,435  $(190,874) 
   General partner interest:    
  Continuing operations$(44) $(212) $132  $(307) 
  Discontinued operations—  (3,612) —  (3,590) 
 $(44) $(3,824) $132  $(3,897) 
    
Net income (loss) per unit attributable to limited partners:
Basic:    
Continuing operations$(0.06) $(0.27) $0.17  $(0.39) 
Discontinued operations—  (4.55) —  (4.52) 
 $(0.06) $(4.82) $0.17  $(4.91) 
Weighted average limited partner units - basic38,662  38,871  38,651  38,912  
Diluted:    
Continuing operations$(0.06) $(0.27) $0.17  $(0.39) 
Discontinued operations—  (4.55) —  (4.52) 
 $(0.06) $(4.82) $0.17  $(4.91) 
Weighted average limited partner units - diluted38,662  38,871  38,652  38,912  









MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED STATEMENTS OF CAPITAL (DEFICIT)
(Dollars in thousands)
 Partners’ Capital (Deficit)
 Parent Net InvestmentCommon LimitedGeneral Partner Amount 
 UnitsAmountTotal
Balances - January 1, 2019$23,720  39,032,237  $258,085  $6,627  $288,432  
Net loss—  —  (190,941) (3,897) (194,838) 
Issuance of common units, net—  —  (259) —  (259) 
Issuance of restricted units—  16,944  —  —  —  
Forfeiture of restricted units—  (154,288) —  —  —  
Cash distributions—  —  (28,851) (589) (29,440) 
Unit-based compensation—  —  715  —  715  
Purchase of treasury units—  (31,504) (392) —  (392) 
Excess purchase price over carrying value of acquired assets
—  —  (102,393) —  (102,393) 
Deferred taxes on acquired assets and liabilities—  —  24,781  —  24,781  
Contribution to parent(23,720) —  —  —  (23,720) 
Balances - June 30, 2019$—  38,863,389  $(39,255) $2,141  $(37,114) 
Balances - January 1, 2020$—  38,863,389  $(38,342) $2,146  $(36,196) 
Net income—  —  6,480  132  6,612  
Issuance of restricted units—  81,000  —  —  —  
Forfeiture of restricted units—  (84,134) —  —  —  
Cash distributions—  —  (4,825) (98) (4,923) 
Unit-based compensation—  —  709  —  709  
Purchase of treasury units—  (7,748) (9) —  (9) 
Balances - June 30, 2020$—  38,852,507  $(35,987) $2,180  $(33,807) 









MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
 Six Months Ended
June 30,
 20202019
Cash flows from operating activities:  
Net income (loss)$6,612  $(194,838) 
Less: Loss from discontinued operations, net of income taxes—  179,466  
Net income (loss) from continuing operations6,612  (15,372) 
Adjustments to reconcile net loss to net cash provided by operating activities:  
Depreciation and amortization30,582  29,988  
Amortization and write-off of deferred debt issuance costs991  2,478  
Amortization of premium on notes payable(153) (153) 
Deferred income tax expense1,018  856  
Loss on sale of property, plant and equipment, net175  2,353  
Gain on retirement of senior unsecured notes(3,484) —  
Derivative (income) loss(1,463) 2,322  
Net cash paid for commodity derivatives796  (249) 
Unit-based compensation709  715  
Change in current assets and liabilities, excluding effects of acquisitions and dispositions:  
Accounts and other receivables37,180  28,073  
Product exchange receivables—  59  
Inventories(3,128) 3,044  
Due from affiliates(1,060) (15,947) 
Other current assets(5,547) (3,061) 
Trade and other accounts payable(16,502) (2,800) 
Product exchange payables811  (4,386) 
Due to affiliates(1,026) 428  
Income taxes payable26  131  
Other accrued liabilities(2,452) (3,043) 
Change in other non-current assets and liabilities541  (693) 
Net cash provided by continuing operating activities44,626  24,743  
Net cash provided by discontinued operating activities—  7,770  
Net cash provided by operating activities44,626  32,513  
Cash flows from investing activities:  
Payments for property, plant and equipment(19,053) (14,102) 
Acquisitions—  (23,720) 
Payments for plant turnaround costs(231) (4,742) 
Proceeds from involuntary conversion of property, plant and equipment1,768  —  
Proceeds from sale of property, plant and equipment4,369  659  
Net cash used in continuing investing activities(13,147) (41,905) 
Net cash provided by discontinued investing activities—  209,155  
Net cash provided by (used in) investing activities(13,147) 167,250  
Cash flows from financing activities:  
Payments of long-term debt and finance lease obligations(160,082) (362,672) 
Proceeds from long-term debt131,000  298,000  
Proceeds from issuance of common units, net of issuance related costs—  (259) 
Purchase of treasury units(9) (392) 
Payment of debt issuance costs(269) (386) 
Excess purchase price over carrying value of acquired assets—  (102,393) 
Cash distributions paid(4,923) (29,440) 
Net cash used in financing activities(34,283) (197,542) 
Net increase (decrease) in cash(2,804) 2,221  
Cash at beginning of period2,856  300  
Cash at end of period$52  $2,521  
Non-cash additions to property, plant and equipment$1,276  $2,248  




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, 2020 and 2019
 Three Months Ended June 30,VariancePercent Change
 20202019
(In thousands, except BBL per day)
Revenues:  
Services$21,436  $22,966  $(1,530) (7)%
Products25,540  31,385  (5,845) (19)%
Total revenues46,976  54,351  (7,375) (14)%
Cost of products sold22,697  27,497  (4,800) (17)%
Operating expenses12,254  13,257  (1,003) (8)%
Selling, general and administrative expenses1,398  1,378  20  %
Depreciation and amortization7,272  7,826  (554) (7)%
 3,355  4,393  (1,038) (24)%
Other operating income (loss), net(3)  (10) (143)%
Operating income$3,352  $4,400  $(1,048) (24)%
Shore-based throughput volumes (guaranteed minimum) (gallons)20,000  20,000  —  — %
Smackover refinery throughput volumes (guaranteed minimum BBL per day)6,500  6,500  —  — %

Comparative Results of Operations for the Six Months Ended June 30, 2020 and 2019
 Six Months Ended June 30,VariancePercent Change
 20202019
 (In thousands, except BBL per day)
Revenues:  
Services$43,603  $47,766  $(4,163) (9)%
Products54,507  62,477  (7,970) (13)%
Total revenues98,110  110,243  (12,133) (11)%
Cost of products sold47,685  55,774  (8,089) (15)%
Operating expenses25,205  26,610  (1,405) (5)%
Selling, general and administrative expenses3,057  2,727  330  12 %
Depreciation and amortization14,728  15,663  (935) (6)%
 7,435  9,469  (2,034) (21)%
Other operating income (loss), net(3,054) 17  (3,071) (18,065)%
Operating income$4,381  $9,486  $(5,105) (54)%
Shore-based throughput volumes (guaranteed minimum) (gallons)40,000  40,000  —  — %
Smackover refinery throughput volumes (guaranteed minimum) (BBL per day)6,500  6,500  —  — %






MARTIN MIDSTREAM PARTNERS L.P.
SEGMENT OPERATING INCOME
(Dollars and volumes in thousands, except BBL per day)

Transportation Segment

        Comparative Results of Operations for the Three Months Ended June 30, 2020 and 2019
 Three Months Ended June 30,VariancePercent Change
 20202019
 (In thousands)
Revenues$35,259  $47,233  $(11,974) (25)%
Operating expenses28,331  36,512  (8,181) (22)%
Selling, general and administrative expenses2,058  1,980  78  %
Depreciation and amortization4,328  3,778  550  15 %
 542  4,963  (4,421) (89)%
Other operating income (loss), net13  (1,649) 1,662  101 %
Operating income$555  $3,314  $(2,759) (83)%

Comparative Results of Operations for the Six Months Ended June 30, 2020 and 2019
 Six Months Ended June 30,VariancePercent Change
 20202019
 (In thousands)
Revenues$80,433  $92,419  $(11,986) (13)%
Operating expenses63,493  71,777  (8,284) (12)%
Selling, general and administrative expenses4,193  4,065  128  %
Depreciation and amortization8,608  7,348  1,260  17 %
$4,139  $9,229  $(5,090) (55)%
Other operating loss, net(1,195) (2,385) 1,190  50 %
Operating income$2,944  $6,844  $(3,900) (57)%



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, 2020 and 2019
 Three Months Ended June 30,VariancePercent Change
 20202019
 (In thousands)
Revenues:  
Services$2,914  $2,858  $56  %
Products30,506  32,998  (2,492) (8)%
Total revenues33,420  35,856  (2,436) (7)%
Cost of products sold18,601  23,676  (5,075) (21)%
Operating expenses3,142  2,789  353  13 %
Selling, general and administrative expenses1,166  1,251  (85) (7)%
Depreciation and amortization3,131  2,854  277  10 %
 7,380  5,286  2,094  40 %
Other operating income (loss), net (1)  600 %
Operating income$7,385  $5,285  $2,100  40 %
Sulfur (long tons)166  182  (16) (9)%
Fertilizer (long tons)91  88   %
Total sulfur services volumes (long tons)257  270  (13) (5)%

Comparative Results of Operations for the Six Months Ended June 30, 2020 and 2019 
 Six Months Ended June 30,VariancePercent Change
 20202019
 (In thousands)
Revenues:  
Services$5,829  $5,717  $112  %
Products55,927  61,732  (5,805) (9)%
Total revenues61,756  67,449  (5,693) (8)%
Cost of products sold35,405  45,242  (9,837) (22)%
Operating expenses6,052  4,952  1,100  22 %
Selling, general and administrative expenses2,369  2,429  (60) (2)%
Depreciation and amortization6,025  5,722  303  %
 11,905  9,104  2,801  31 %
Other operating income (loss), net6,776  (1) 6,777  677,700 %
Operating income$18,681  $9,103  $9,578  105 %
Sulfur (long tons)349  291  58  20 %
Fertilizer (long tons)165  155  10  %
Total sulfur services volumes (long tons)514  446  68  15 %





MARTIN MIDSTREAM PARTNERS L.P.
SEGMENT OPERATING INCOME
(Dollars and volumes in thousands, except BBL per day)


Natural Gas Liquids Segment

Comparative Results of Operations for the Three Months Ended June 30, 2020 and 2019
 Three Months Ended June 30,VariancePercent Change
 20202019
 (In thousands)
Products Revenues$30,300  $57,398  $(27,098) (47)%
Cost of products sold26,579  57,392  (30,813) (54)%
Operating expenses1,150  1,680  (530) (32)%
Selling, general and administrative expenses930  1,097  (167) (15)%
Depreciation and amortization612  629  (17) (3)%
 1,029  (3,400) 4,429  130 %
Other operating income (loss), net—  10  (10) (100)%
Operating income (loss)$1,029  $(3,390) $4,419  130 %
NGL sales volumes (Bbls)1,698  1,457  241  17 %

Comparative Results of Operations for the Six Months Ended June 30, 2020 and 2019
 Six Months Ended June 30,VariancePercent Change
 20202019
 (In thousands)
Products Revenues$112,515  $173,872  $(61,357) (35)%
Cost of products sold100,839  168,701  (67,862) (40)%
Operating expenses2,089  3,386  (1,297) (38)%
Selling, general and administrative expenses2,077  2,197  (120) (5)%
Depreciation and amortization1,221  1,255  (34) (3)%
 6,289  (1,667) 7,956  477 %
Other operating income (loss), net(2) 16  (18) (113)%
Operating income (loss)$6,287  $(1,651) $7,938  481 %
NGL sales volumes (Bbls)4,143  4,364  (221) (5)%




Unallocated Selling, General and Administrative Expenses

Comparative Results of Operations for the Three and Six Months Ended June 30, 2020 and 2019

 Three Months Ended June 30,VariancePercent ChangeSix Months Ended June 30,VariancePercent Change
 2020201920202019
 (In thousands)(In thousands)
Unallocated selling, general and administrative expenses
$4,361  $4,599  $(238) (5)%$8,733  $9,166  $(433) (5)%



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, 2020 and 2019.

Reconciliation of EBITDA, Adjusted EBITDA, and Distributable Cash Flow
Three Months EndedSix Months Ended
June 30,June 30,
 2020201920202019
(in thousands)(in thousands)
Net income (loss)$(2,203) $(191,182) $6,612  $(194,838) 
Less: Loss from discontinued operations, net of income taxes
—  180,568  —  179,466  
Income (loss) from continuing operations(2,203) (10,614) 6,612  (15,372) 
Adjustments:
Interest expense, net9,377  14,986  19,302  28,657  
Income tax expense790  639  1,137  1,335  
Depreciation and amortization15,343  15,087  30,582  29,988  
EBITDA from Continuing Operations23,307  20,098  57,633  44,608  
Adjustments:
(Gain) loss on sale of property, plant and equipment, net(15) 1,633  175  2,353  
Unrealized mark-to-market on commodity derivatives—  2,220  (669) 2,073  
Transaction costs associated with acquisitions—  40  —  224  
Non-cash insurance related accruals250  500  250  500  
Lower of cost or market adjustments—  303  335  303  
Gain on repurchase of senior unsecured notes—  —  (3,484) —  
Unit-based compensation363  363  709  715  
Adjusted EBITDA from Continuing Operations23,905  25,157  54,949  50,776  
Adjustments:
Interest expense, net(9,377) (14,986) (19,302) (28,657) 
Income tax expense(790) (639) (1,137) (1,335) 
Amortization of debt premium(76) (76) (153) (153) 
Amortization of deferred debt issuance costs499  1,583  991  2,478  
Deferred income tax expense732  487  1,018  856  
Payments for plant turnaround costs(81) (915) (231) (4,742) 
Maintenance capital expenditures(2,280) (2,628) (5,306) (6,487) 
Distributable Cash Flow from Continuing Operations$12,532  $7,983  $30,829  $12,736  
Loss from discontinued operations, net of income taxes$—  $(180,568) $—  $(179,466) 
Adjustments: