Martin Midstream Partners L.p. · NASDAQ:MMLP
Martin Midstream Partners L.p — Wells Fargo Securities Midstream & Utilities Symposium 2019
37 slides from Martin Midstream Partners L.p's conference presentation, Dec 11, 2019
Slide 1: Martin Midstream Partners L.P. – Wells Fargo Midstream & Utilities Symposium
Martin Midstream Partners L.P. Wells Fargo Securities Midstream & Utilities Symposium December 11-12, 2019
Slide 2: Company Information and Forward-Looking Statements
Company Information Martin Midstream Partners L.P. Forward-Looking Statements NASDAQ Ticker MMLP This presentation includes “forward-looking statements” within the meaning of federal securities laws. All statements, other than statements of historical fact, included in this Unit Price (1) $4.19 pres
Slide 3: Presentation Outline
Presentation Outline 1. Company Overview 4 2. Operating Segment Detail 16 3. Financial Overview 29 Appendix 33 3
Slide 4: Company Overview
Company Overview
Slide 5: Martin Midstream at a Glance
Martin Midstream at a Glance Diversified Specialty Services Midstream Business with Operations Strategically Located along the Gulf Coast • Operates four key business segments: Terminalling & Storage, Sulfur, Transportation and Natural Gas Liquids Key Stats • Provides specialty services to major and
Slide 6: Credit Highlights
Credit Highlights 1 Diversified business model provides specialty product handling services • Provides specialty product handling services for hard-to-handle products including molten sulfur, asphalt, sulfuric acid, liquid ammonia and other specialty products • Diversified operations provide cash fl
Slide 7: Diversified Business Model
1 Diversified Business Model Terminalling & Sulfur Transportation Natural Gas Liquids Storage Operates 33 terminal Aggregates, stores and Tank truck Purchases NGLs facilities with aggregate transports molten sulfur transportation services primarily from refineries storage capacity of and con
Slide 8: Vertically Integrated Services Provided for Gulf Coast-Centric Footprint
2 Vertically Integrated Services Provided for Gulf Coast-Centric Asset & Operational Footprint MO WV TN CA AR AL IL MS NE HQ: Kilgore, TX TX LA FL Corporate Locations Natural Gas Liquids Sulfur Terminalling & Storage Land and Marine Transportation Services 8
Slide 9: Cash Flow Stability from Continuing Operations
3 Cash Flow Stability from Continuing Operations Continuing operations offer proven historical stability and benefit from diversification and fixed-fee contracts Adjusted Segment EBITDA from (2) $143mm $136mm $133mm $137mm $125mm Continuing Operations (1) (Pre-Unallocated SG&A) - Oil stabilization i
Slide 10: Strong Fee-Based Contracts with Limited Commodity Exposure
3 Strong Fee-Based Contracts with Limited Commodity Exposure Segment Breakdown 2019E Contract Mix Margin Based EBITDA Protection from Fixed Fee EBITDA Commodity Volume-Risk Price-Risk Price Volatility Smackover Refinery Martin Lubricants Terminalling & Specialty Terminals Storage Shore-Based Shore
Slide 11: Long-Term Relationships, Key Customers
3 Long-Term Relationships, Key Customers • Martin’s fixed fee and margin business provides a combination of long-term, Key customers represent spot and evergreen contracts with key customers 42% of revenue • Evergreen and spot contracts are anchored by long-term relationships with major and independ
Slide 12: Continued Capital Discipline to Strengthen Balance Sheet
4 Continued Capital Discipline to Strengthen Balance Sheet Strategic Improvements to Capital Structure Total Debt / PF Covenant Compliance EBITDA (1) Sold Underperforming Assets Increase in leverage from irregular events • Acquisition of Martin Transport (Debt increase) • Sale of non-core assets i
Slide 13: Strategic Initiatives
4 Strategic Initiatives Objective: De-lever MMLP by divesting non-core assets and businesses, creating the ability to focus on a streamlined corporate strategy and position the Partnership for growth Asset sales to strengthen the balance sheet, and streamline MMLP’s business model which provides c
Slide 14: Growth Strategy
4 Growth Strategy 3 2 Strategic Alliances Utilize industry knowledge, network of 1 customers and suppliers, and strategic Internal Organic Growth asset base to expand commercial alliances to drive revenue and cash flow Attract new customers with existing growth products and services to efficiently g
Slide 15: Experienced Management Team and Strong Parent Support
5 Experienced and Incentivized Management Team and Strong Parent Support Martin Resource Management Corporation (“MRMC”) has significantly assisted in MMLP’s growth and is committed to the Partnership Martin Key Resource Operating Management 100% Subsidiaries ─ MRMC has provided over $551mm in ass
Slide 16: Operating Segment Detail
Operating Segment Detail
Slide 17: Terminalling & Storage
Terminalling & Storage • Operates 33 terminal facilities with aggregate storage capacity of 2.9mm barrels • 7,700 bpd capacity naphthenic lube refinery located in Smackover, Arkansas • Processes crude oil into finished products including naphthenic lubricants, distillates and Smackover asphalt Refin
Slide 18: Terminalling & Storage
Terminalling & Storage Contract Overview Key Customer(s) / Smackover Refinery Remaining Weighted Refined Products Average Contract Life Fee-based 6,500 bpd minimum Napthenic Crude Oil (MRMC) volume commitment from MRMC Supplied by Cross Oil • Lubricants to process napthenic crude oil into (MRMC) • D
Slide 19: Terminalling & Storage
Terminalling & Storage Segment Strategy Adj. EBITDA from Continuing Operations ($mm) (1) • Well positioned for energy export projects at Beaumont terminal • IMO 2020 expected to create additional value for storage and terminalling assets • Capitalize on any increase in Gulf of Mexico drilling • Grow
Slide 20: Sulfur
Sulfur • Stores and prills molten sulfur, manufactures and markets sulfur-based fertilizers and related sulfur products (sulfuric acid) to wholesale fertilizer distributors and industrial users • Aggregates, stores and transports molten sulfur from U.S. Gulf Coast refineries to the Tampa market for
Slide 21: Sulfur
Sulfur Contract Overview Key Customer(s) / Molten Sulfur Remaining Weighted Molten Sulfur Molten Sulfur Average Contract Life Fee-based monthly • Domestic reservation for handling and Chemical transportation of molten Production sulfur • Industrial Stanolind 3rd Party Refinery Terminal: Terminal: Ap
Slide 22: Sulfur
Sulfur Segment Strategy Adj. EBITDA from Continuing Operations ($mm) (1) • Largest factor influencing sulfur-based fertilizers in the U.S. is corn acres planted ─ Significant challenges during the 2018 and 2019 planting season due to flooding and persistent rainfall. In response, corn prices are cur
Slide 23: Transportation
Transportation • MTI, a subsidiary of MMLP, operates tank truck transportation services catering to petroleum, petrochemical and chemical industries primarily across the Southeast U.S. • Truck and trailer fleet made Trailers Fleet by Products Capability up of 544 tank trucks and 1% 1% Lubricants and
Slide 24: Transportation
Transportation Key Customer(s) / Contract Overview Remaining Weighted Land Transportation Average Contract Life Fee-based, spot contracts for Products Handled tank truck transportation catering • Petroleum to petroleum, petrochemical and • General Chemicals chemical industries • LPGs • Molten Sulfur
Slide 25: Transportation
Transportation Segment Strategy Adj. EBITDA from Continuing Operations ($mm) (1) • Benefit from increased refinery utilization and expansion on the Gulf Coast • Refinery demand driven by new chemical plants as well as refinery retrofits • Expand services in the Land Transportation segment to drive f
Slide 26: Natural Gas Liquids
Natural Gas Liquids • Purchases NGLs primarily from refineries and natural gas processors then stores and transports NGLs for delivery to refineries, industrial NGL users and wholesale delivery to propane retailers • Network of underground storage facilities in Louisiana and Mississippi Butane • ~1.
Slide 27: Natural Gas Liquids
Natural Gas Liquids Contract Overview Rail/ Retail Terminal Key Customer(s) / Butane Remaining Weighted Average Contract Life Margin spread generates revenue by purchasing and Gulf Coast & storing butane during Midwest summer months and selling to refiners in the winter for Refineries gasoline blend
Slide 28: Natural Gas Liquids – Butane Strategy
Natural Gas Liquids Butane Strategy Adj. EBITDA from Continuing Operations ($mm) (1) MMLP purchases at discount to Mont Belvieu price in the summer • months Natural GasatLiquids and sells premium to Mont Belvieu price in the winter months (refinery blending season) Sale Months Sale Months Avg. 10-ye
Slide 29: Financial Overview
Financial Overview
Slide 30: Pro Forma Capitalization
Pro Forma Capitalization ($ in millions) Recent Financial Updates Capitalization as of September 30, 2019 9/30/2019 • Amended RCF reduced Current commitments to $400mm and extended maturity to August 2023 Cash $1.8 Cash & Equivalents $1.8 • Proceeds from the sale of the Cardinal Gas Storage assets a
Slide 31: Performance Metrics
Performance Metrics Revenue ($mm) PF Adjusted EBITDA ($mm) (1) (2) PF Distributable Cash Flow ($mm) Capital Expenditures ($mm) (3) $135mm acquisition of Martin Transport in (4) January 2019 at an (3) attractive 5.7x multiple Note: (1) Discontinued Operations Revenue is related to the Cardinal Gas St
Slide 32: Credit Profile
Credit Profile Total Debt ($mm) (1) Total Debt / PF Covenant Compliance EBITDA (2) PF Covenant Compliance EBITDA / Adj. Interest Expense (2) Note: (1) Total debt is net of Inventory Sublimit, subject to a cap on Inventory Sublimit deductions as prescribed by Credit Agreement. (2) Leverage, PF Covena
Slide 33: Appendix
Appendix
Slide 34: MMLP Covenant Compliance Consolidated EBITDA Reconciliation
MMLP Covenant Compliance Consolidated EBITDA Reconciliation $ millions 2015 2016 2017 2018 2019E Consolidated Net Income (Loss) $50.2 $36.7 $22.3 $(7.3) $(9.7) Consolidated Interest Expense Add Back 40.5 44.0 45.9 49.5 47.8 Depreciation and Amortization 96.7 95.5 87.8 80.0 63.8 Provision for Income
Slide 35: 2019E Revised Guidance & Adjusted EBITDA Reconciliation
MMLP 2019E Revised Guidance & Adjusted EBITDA from Continuing Operations Reconciliation $ millions 1Q19A 2Q19A 3Q19A 4Q19E Terminalling & Storage 2019E Adjusted EBITDA Adjusted EBITDA Adjusted EBITDA Adjusted EBITDA Smackover Refinery $5.0 $5.3 $5.7 $5.1 $21.1 Martin Lubricants $2.5 $3.8 $4.5 $2.6 $
Slide 36: Continuing Operations Adjusted EBITDA Reconciliation
MMLP Continuing Operations Adjusted EBITDA Reconciliation $ millions 2015 2016 2017 2018 Net income (loss) $38.4 $31.0 $19.9 $55.7 Interest expense add back 43.3 46.1 47.8 52.3 Depreciation and amortization 92.3 93.9 87.5 80.3 Income tax expense 1.0 0.7 0.2 0.6 Less: Income from discontinued operati
Slide 37: Disclaimers
Disclaimers Non-GAAP Financial Measures This presentation includes certain non-GAAP financial measures such as EBITDA and Adjusted EBITDA and Adjusted Segment EBITDA from Continuing Operations. These non-GAAP financial measures are not meant to be considered in isolation or as a substitute for resul
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