- Third quarter 2021 financial performance beats internal projections despite impact from Hurricane Ida
- Reported net loss of $6.9 million and $11.0 million for the three and nine months ended September 30, 2021, respectively
- Reported adjusted EBITDA of $21.5 million and $74.9 million for the three and nine months ended September 30, 2021, respectively
- Generated distributable cash flow of $5.2 and $25.3 million for the three and nine months ended September 30, 2021, respectively
- Declares quarterly distribution of $0.005 or $0.02 per unit annually
KILGORE, Texas--(BUSINESS WIRE)-- Martin Midstream Partners L.P. (Nasdaq:MMLP) (the "Partnership") today announced its financial results for the third quarter of 2021.
Bob Bondurant, President and Chief Executive Officer of Martin Midstream GP LLC, the general partner of the Partnership stated, “The Partnership’s third quarter performance exceeded our expectations, and we now expect to meet the top end of the range of our 2021 financial guidance for adjusted EBITDA of $95 to $102 million.
“On August 29, 2021, Hurricane Ida made landfall in Louisiana as a Category 4 storm with sustained winds of 150 miles per hour. Despite this extremely dangerous event, I am happy to report there were no injuries to our employees, although some did suffer damage to homes and property. The Partnership sustained minimal damage to assets in and around Port Fourchon. Further, in the days and weeks following the storm we were able to provide alternative storage and terminalling services from our Galveston terminal as needed.
“Turning to our results, in the Terminalling and Storage segment, demand for lubricants and grease products remains strong and our distribution lanes have been able to fulfill customer requirements even as the supply chain has been disordered. Within the Sulfur Services segment, the pure sulfur business continues to improve along with increased refinery utilization. Further downstream fertilizer sales and margins are outperforming as commodity prices remain strong for corn and cotton. In Transportation, our marine equipment utilization continues to increase as fundamentals in the industry improve and demand for trucking services remains elevated resulting in improved economics for the business segment.
“Finally, as is typical, the Natural Gas Liquids segment substantially increased butane inventory volumes in the third quarter to meet our customers' requirements throughout the winter gasoline blending season. Since this inventory build is concurrent with our weakest cash flow quarter due to the seasonality of both the fertilizer and butane businesses, a temporary rise in leverage occurs. Accordingly, at September 30, 2021, leverage increased to 5.5 times from 5.3 times at June 30, 2021. However, this increase is transitory and leverage is expected to significantly decrease by year-end, driven by the Partnership’s reduced working capital needs and strong financial performance.”
THIRD QUARTER 2021 OPERATING RESULTS BY BUSINESS SEGMENT
TERMINALLING AND STORAGE (“T&S”)
T&S Operating Income for the three months ended September 30, 2021 and 2020 was $4.4 million and $7.0 million, respectively.
Adjusted segment EBITDA for T&S was $11.2 million and $14.2 million, for the three month periods ended September 30, 2021 and 2020, respectively, reflecting increased utilities expense coupled with expired capital recovery fees at the Smackover Refinery, the disposition of our Mega Lubricants business in the 4th quarter of 2020, and increased utilities and repairs and maintenance expense at our Specialty Terminals.
TRANSPORTATION
Transportation Operating Income for the three months ended September 30, 2021 and 2020 was $3.9 million and $1.1 million, respectively.
Adjusted segment EBITDA for Transportation was $7.6 million and $5.5 million for the three months ended September 30, 2021 and 2020, respectively, reflecting higher rates counterbalanced by rising labor and operating costs along with increased land transportation load count, offset by lower marine day rates coupled with a reduction in marine equipment.
SULFUR SERVICES
Sulfur Services Operating Income for the three months ended September 30, 2021 and 2020 was $2.3 million and $5.6 million, respectively.
Adjusted segment EBITDA for Sulfur Services was $4.9 million and $4.2 million for the three months ended September 30, 2021 and 2020, respectively, reflecting increased fertilizer volumes and margins offset by lower sulfur volumes during the third quarter of 2021.
NATURAL GAS LIQUIDS (“NGL”)
NGL Operating Income for the three months ended September 30, 2021 and 2020 was $1.6 million and $1.8 million, respectively.
Adjusted segment EBITDA for NGL was $1.8 million and $2.8 million for the three months ended September 30, 2021 and 2020, respectively, primarily reflecting a decrease in volumes as 2020 benefited from an increased seasonal demand, offset by higher NGL margins.
UNALLOCATED SELLING, GENERAL AND ADMINISTRATIVE EXPENSE (“USGA”)
USGA expenses included in operating income for the three months ended September 30, 2021 and 2020 were $4.0 million and $4.5 million, respectively.
USGA expenses included in adjusted EBITDA for the three months ended September 30, 2021 and 2020 were $4.0 million and $4.2 million, respectively, primarily reflecting a reduction in overhead allocated from Martin Resource Management.
LIQUIDITY
At September 30, 2021, the Partnership had $208.5 million drawn on its $275 million revolving credit facility, an increase of $29 million from June 30, 2021. The Partnership’s leverage ratio, as calculated under the revolving credit facility, was 5.5 times and 5.3 times on September 30, 2021 and June 30, 2021, respectively. The Partnership was in compliance with all debt covenants as of September 30, 2021.
QUARTERLY CASH DISTRIBUTION
The Partnership has declared a quarterly cash distribution of $0.005 per unit for the quarter ended September 30, 2021. The distribution is payable on November 12, 2021 to common unitholders of record as of the close of business on November 5, 2021. The ex-dividend date for the cash distribution is November 4, 2021.
QUALIFIED NOTICE TO NOMINEES
This release serves as qualified notice to nominees as provided for under Treasury Regulation Section 1.1446-4(b)(4) and (d). Please note that 100 percent of the Partnership's distributions to foreign investors are attributable to income that is effectively connected with a United States trade or business. Accordingly, all of the Partnership's distributions to foreign investors are subject to federal income tax withholding at the highest effective tax rate for individuals or corporations, as applicable. Nominees, and not the Partnership, are treated as withholding agents responsible for withholding on the distributions received by them on behalf of foreign investors.
COVID-19 RESPONSE
The Partnership continues to evaluate protocols in response to the COVID-19 pandemic, including the impact of variants of COVID-19, such as the Delta variant. Where possible, employee work from home initiatives remain and travel restrictions have been lifted. Employees are encouraged to continue to exercise safety measures to protect the welfare of each other and the communities they serve.
RESULTS OF OPERATIONS
The Partnership had a net loss for the three months ended September 30, 2021 of $6.9 million, a loss of $0.17 per limited partner unit. The Partnership had a net loss for the three months ended September 30, 2020 of $10.8 million, a loss of $0.27 per limited partner unit. Adjusted EBITDA for the three months ended September 30, 2021 was $21.5 million compared to the three months ended September 30, 2020 of $22.5 million. Distributable cash flow for the three months ended September 30, 2021 was $5.2 million compared to the three months ended September 30, 2020 of $8.1 million.
The Partnership had a net loss for the nine months ended September 30, 2021 of $11.0 million, a loss of $0.28 per limited partner unit. The Partnership had a net loss for the nine months ended September 30, 2020 of $4.2 million, a loss of $0.11 per limited partner unit. Adjusted EBITDA for the nine months ended September 30, 2021 was $74.9 million compared to the nine months ended September 30, 2020 of $77.5 million. Distributable cash flow for the nine months ended September 30, 2021 was $25.3 million compared to the nine months ended September 30, 2020 of $38.9 million.
Revenues for the three months ended September 30, 2021 were $211.3 million compared to the three months ended September 30, 2020 of $152.5 million. Revenues for the nine months ended September 30, 2021 were $596.5 million compared to the nine months ended September 30, 2020 of $492.1 million.
EBITDA, adjusted EBITDA, distributable cash flow and adjusted free cash flow 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, Distributable Cash Flow and Adjusted Free 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 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 third quarter 2021 to the Partnership's adjusted EBITDA for the third quarter 2020.
Investors' Conference Call |
Date: Thursday, October 21, 2021 |
Time: 8:00 a.m. CT (please dial in by 7:55 a.m.) |
Dial In #: (833) 900-2251 |
Conference ID: 8571037 |
Replay Dial In # (800) 585-8367 – Conference ID: 8571037 |
A webcast of the conference call will also be available by visiting the Events and Presentations section under Investor Relations on our website at www.MMLP.com.
About Martin Midstream Partners
Martin Midstream Partners L.P., headquartered in Kilgore, Texas, 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. To learn more, visit www.MMLP.com. Follow Martin Midstream Partners L.P. on LinkedIn and Facebook.
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 guidance or to financial or operational estimates or projections 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 effects of the continued volatility of commodity prices and the related macroeconomic and political environment, and (iii) 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, (3) distributable cash flow and (4) adjusted free 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. The Partnership defines Adjusted EBITDA as EBITDA before unit-based compensation expenses, gains and losses on the disposition of property, plant and equipment, impairment and other similar non-cash adjustments. 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. The Partnership defines Distributable Cash Flow as Adjusted EBITDA less cash paid for interest, cash paid for income taxes, maintenance capital expenditures, and plant turnaround costs. 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.
Adjusted Free Cash Flow. Adjusted free cash flow is defined as distributable cash flow less growth capital expenditures and principal payments under finance lease obligations. Adjusted free cash flow is a significant performance measure used by the Partnership's management and by external users of our financial statements and represents how much cash flow a business generates during a specified time period after accounting for all capital expenditures, including expenditures for growth and maintenance capital projects. The Partnership believes that adjusted free cash flow is important to investors, lenders, commercial banks and research analysts since it reflects the amount of cash available for reducing debt, investing in additional capital projects, paying distributions, and similar matters. The Partnership's calculation of adjusted free cash flow may or may not be comparable to similarly titled measures used by other entities.
EBITDA, adjusted EBITDA, distributable cash flow, and adjusted free 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.
MMLP-F
MARTIN MIDSTREAM PARTNERS L.P. CONSOLIDATED AND CONDENSED BALANCE SHEETS (Dollars in thousands) |
|||||||
September 30, 2021 |
December 31, 2020 |
||||||
(Unaudited) |
(Audited) |
||||||
Assets |
|||||||
Cash |
$ |
6,783 |
$ |
4,958 |
|||
Accounts and other receivables, less allowance for doubtful accounts of $272 and $261, respectively |
75,676 |
52,748 |
|||||
Inventories |
98,139 |
54,122 |
|||||
Due from affiliates |
10,133 |
14,807 |
|||||
Other current assets |
10,441 |
8,991 |
|||||
Total current assets |
201,172 |
135,626 |
|||||
Property, plant and equipment, at cost |
894,767 |
889,108 |
|||||
Accumulated depreciation |
(543,309) |
(509,237) |
|||||
Property, plant and equipment, net |
351,458 |
379,871 |
|||||
Goodwill |
16,823 |
16,823 |
|||||
Right-of-use assets |
21,267 |
22,260 |
|||||
Deferred income taxes, net |
20,834 |
22,253 |
|||||
Other assets, net |
2,684 |
2,805 |
|||||
Total assets |
$ |
614,238 |
$ |
579,638 |
|||
Liabilities and Partners’ Capital (Deficit) |
|||||||
Current installments of long-term debt and finance lease obligations |
$ |
240 |
$ |
31,497 |
|||
Trade and other accounts payable |
73,273 |
51,900 |
|||||
Product exchange payables |
1,387 |
373 |
|||||
Due to affiliates |
5,469 |
435 |
|||||
Income taxes payable |
401 |
556 |
|||||
Fair value of derivatives |
5,049 |
207 |
|||||
Other accrued liabilities |
21,696 |
34,407 |
|||||
Total current liabilities |
107,515 |
119,375 |
|||||
Long-term debt, net |
547,090 |
484,597 |
|||||
Finance lease obligations |
108 |
289 |
|||||
Operating lease liabilities |
14,960 |
15,181 |
|||||
Other long-term obligations |
8,721 |
7,067 |
|||||
Total liabilities |
678,394 |
626,509 |
|||||
Commitments and contingencies |
|||||||
Partners’ capital (deficit) |
(58,157) |
(46,871) |
|||||
Accumulated other comprehensive loss |
(5,999) |
— |
|||||
Total partners’ capital (deficit) |
(64,156) |
(46,871) |
|||||
Total liabilities and partners' capital (deficit) |
$ |
614,238 |
$ |
579,638 |
|||
MARTIN MIDSTREAM PARTNERS L.P. CONSOLIDATED AND CONDENSED STATEMENTS OF OPERATIONS (Unaudited) (Dollars in thousands, except per unit amounts) |
|||||||||||||||
Three Months Ended |
Nine Months Ended |
||||||||||||||
September 30, |
September 30, |
||||||||||||||
2021 |
2020 |
2021 |
2020 |
||||||||||||
Revenues: |
|||||||||||||||
Terminalling and storage * |
$ |
18,980 |
$ |
20,706 |
$ |
56,060 |
$ |
61,088 |
|||||||
Transportation * |
39,079 |
31,938 |
103,820 |
102,364 |
|||||||||||
Sulfur services |
2,950 |
2,915 |
8,849 |
8,744 |
|||||||||||
Product sales: * |
|||||||||||||||
Natural gas liquids |
91,764 |
52,350 |
257,081 |
164,860 |
|||||||||||
Sulfur services |
27,887 |
18,965 |
95,109 |
74,879 |
|||||||||||
Terminalling and storage |
30,598 |
25,659 |
75,606 |
80,119 |
|||||||||||
150,249 |
96,974 |
427,796 |
319,858 |
||||||||||||
Total revenues |
211,258 |
152,533 |
596,525 |
492,054 |
|||||||||||
Costs and expenses: |
|||||||||||||||
Cost of products sold: (excluding depreciation and amortization) |
|||||||||||||||
Natural gas liquids * |
85,137 |
44,908 |
225,862 |
139,036 |
|||||||||||
Sulfur services * |
20,266 |
13,313 |
65,657 |
46,167 |
|||||||||||
Terminalling and storage * |
24,167 |
19,124 |
58,895 |
64,242 |
|||||||||||
129,570 |
77,345 |
350,414 |
249,445 |
||||||||||||
Expenses: |
|||||||||||||||
Operating expenses * |
50,098 |
43,105 |
142,045 |
138,589 |
|||||||||||
Selling, general and administrative * |
9,739 |
10,339 |
29,308 |
30,659 |
|||||||||||
Depreciation and amortization |
13,945 |
15,276 |
42,862 |
45,858 |
|||||||||||
Total costs and expenses |
203,352 |
146,065 |
564,629 |
464,551 |
|||||||||||
Other operating income (loss), net |
61 |
23 |
(610) |
2,548 |
|||||||||||
Gain on involuntary conversion of property, plant and equipment |
186 |
4,522 |
186 |
4,522 |
|||||||||||
Operating income |
8,153 |
11,013 |
31,472 |
34,573 |
|||||||||||
Other income (expense): |
|||||||||||||||
Interest expense, net |
(14,110) |
(12,943) |
(40,372) |
(32,245) |
|||||||||||
Gain on retirement of senior unsecured notes |
— |
— |
— |
3,484 |
|||||||||||
Loss on exchange of senior unsecured notes |
— |
(8,516) |
— |
(8,516) |
|||||||||||
Other, net |
— |
— |
(1) |
7 |
|||||||||||
Total other expense |
(14,110) |
(21,459) |
(40,373) |
(37,270) |
|||||||||||
Net loss before taxes |
(5,957) |
(10,446) |
(8,901) |
(2,697) |
|||||||||||
Income tax expense |
(954) |
(373) |
(2,111) |
(1,510) |
|||||||||||
Net loss |
(6,911) |
(10,819) |
(11,012) |
(4,207) |
|||||||||||
Less general partner's interest in net loss |
138 |
216 |
220 |
84 |
|||||||||||
Less loss allocable to unvested restricted units |
20 |
53 |
30 |
8 |
|||||||||||
Limited partners' interest in net loss |
$ |
(6,753) |
$ |
(10,550) |
$ |
(10,762) |
$ |
(4,115) |
|||||||
Net loss per unit attributable to limited partners - basic |
$ |
(0.17) |
$ |
(0.27) |
$ |
(0.28) |
$ |
(0.11) |
|||||||
Net loss per unit attributable to limited partners - diluted |
$ |
(0.17) |
$ |
(0.27) |
$ |
(0.28) |
$ |
(0.11) |
|||||||
Weighted average limited partner units - basic |
38,687,874 |
38,661,852 |
38,689,434 |
38,654,891 |
|||||||||||
Weighted average limited partner units - diluted |
38,687,874 |
38,661,852 |
38,689,434 |
38,654,891 |
|||||||||||
*Related Party Transactions Shown Below |
|||||||||||||||
MARTIN MIDSTREAM PARTNERS L.P. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Dollars in thousands, except per unit amounts) |
|||||||||||||||
*Related Party Transactions Included Above |
|||||||||||||||
Three Months Ended |
Nine Months Ended |
||||||||||||||
September 30, |
September 30, |
||||||||||||||
2021 |
2020 |
2021 |
2020 |
||||||||||||
Revenues:* |
|||||||||||||||
Terminalling and storage |
$ |
15,866 |
$ |
15,902 |
$ |
46,741 |
$ |
47,718 |
|||||||
Transportation |
5,564 |
5,514 |
14,463 |
16,801 |
|||||||||||
Product Sales |
68 |
69 |
253 |
199 |
|||||||||||
Costs and expenses:* |
|||||||||||||||
Cost of products sold: (excluding depreciation and amortization) |
|||||||||||||||
Sulfur services |
2,441 |
2,512 |
7,379 |
7,833 |
|||||||||||
Terminalling and storage |
7,259 |
4,303 |
18,863 |
14,329 |
|||||||||||
Expenses: |
|||||||||||||||
Operating expenses |
20,088 |
18,915 |
58,046 |
60,126 |
|||||||||||
Selling, general and administrative |
7,659 |
8,356 |
23,624 |
24,723 |
|||||||||||
MARTIN MIDSTREAM PARTNERS L.P. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) (Dollars in thousands) |
|||||||||||||||
Three Months Ended |
Nine Months Ended |
||||||||||||||
September 30, |
September 30, |
||||||||||||||
2021 |
2020 |
2021 |
2020 |
||||||||||||
Net loss |
$ |
(6,911) |
$ |
(10,819) |
$ |
(11,012) |
$ |
(4,207) |
|||||||
Changes in fair values of commodity cash flow hedges |
(5,999) |
— |
(5,999) |
— |
|||||||||||
Comprehensive loss |
$ |
(12,910) |
$ |
(10,819) |
$ |
(17,011) |
$ |
(4,207) |
|||||||
MARTIN MIDSTREAM PARTNERS L.P. CONSOLIDATED AND CONDENSED STATEMENTS OF CAPITAL (DEFICIT) (Unaudited) (Dollars in thousands) |
||||||||||||||||||
Partners’ Capital (Deficit) |
||||||||||||||||||
Common Limited |
General Partner Amount |
Accumulated Other Comprehensive Income (Loss) |
||||||||||||||||
Units |
Amount |
Total |
||||||||||||||||
Balances - January 1, 2020 |
38,863,389 |
$ |
(38,342) |
$ |
2,146 |
$ |
— |
$ |
(36,196) |
|||||||||
Net loss |
— |
(4,123) |
(84) |
— |
(4,207) |
|||||||||||||
Issuance of restricted units |
81,000 |
— |
— |
— |
— |
|||||||||||||
Forfeiture of restricted units |
(84,134) |
— |
— |
— |
— |
|||||||||||||
Cash distributions |
— |
(5,019) |
(102) |
— |
(5,121) |
|||||||||||||
Unit-based compensation |
— |
1,070 |
— |
— |
1,070 |
|||||||||||||
Purchase of treasury units |
(7,748) |
(9) |
— |
— |
(9) |
|||||||||||||
Balances - September 30, 2020 |
38,852,507 |
$ |
(46,423) |
$ |
1,960 |
$ |
— |
$ |
(44,463) |
|||||||||
Balances - January 1, 2021 |
38,851,174 |
$ |
(48,776) |
$ |
1,905 |
$ |
— |
$ |
(46,871) |
|||||||||
Net loss |
— |
(10,792) |
(220) |
— |
(11,012) |
|||||||||||||
Issuance of restricted units |
42,168 |
— |
— |
— |
— |
|||||||||||||
Forfeiture of restricted units |
(83,436) |
— |
— |
— |
— |
|||||||||||||
Cash distributions |
— |
(581) |
(12) |
— |
(593) |
|||||||||||||
Unit-based compensation |
— |
336 |
— |
— |
336 |
|||||||||||||
Changes in fair values of commodity cash flow hedges |
— |
— |
— |
(5,999) |
(5,999) |
|||||||||||||
Purchase of treasury units |
(7,156) |
(17) |
— |
— |
(17) |
|||||||||||||
Balances - September 30, 2021 |
38,802,750 |
$ |
(59,830) |
$ |
1,673 |
$ |
(5,999) |
$ |
(64,156) |
|||||||||
MARTIN MIDSTREAM PARTNERS L.P. CONSOLIDATED AND CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in thousands) |
|||||||
Nine Months Ended |
|||||||
September 30, |
|||||||
2021 |
2020 |
||||||
Cash flows from operating activities: |
|||||||
Net loss |
$ |
(11,012) |
$ |
(4,207) |
|||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |
|||||||
Depreciation and amortization |
42,862 |
45,858 |
|||||
Amortization of deferred debt issuance costs |
2,585 |
2,674 |
|||||
Amortization of premium on notes payable |
— |
(191) |
|||||
Deferred income tax expense |
1,419 |
1,202 |
|||||
Loss on sale of property, plant and equipment, net |
610 |
153 |
|||||
Gain on involuntary conversion of property, plant and equipment |
(186) |
(4,522) |
|||||
Non-cash impact related to exchange of senior unsecured notes |
— |
(749) |
|||||
Gain on retirement of senior unsecured notes |
— |
(3,484) |
|||||
Derivative (income) loss |
1,825 |
(815) |
|||||
Net cash received (paid) for commodity derivatives |
(2,982) |
539 |
|||||
Non-cash unit-based compensation |
336 |
1,070 |
|||||
Change in current assets and liabilities, excluding effects of acquisitions and dispositions: |
|||||||
Accounts and other receivables |
(22,924) |
30,012 |
|||||
Product exchange receivables |
— |
(212) |
|||||
Inventories |
(44,353) |
(15,184) |
|||||
Due from affiliates |
4,674 |
(1,103) |
|||||
Other current assets |
(1,912) |
(6,130) |
|||||
Trade and other accounts payable |
21,092 |
(17,117) |
|||||
Product exchange payables |
1,014 |
(1,278) |
|||||
Due to affiliates |
5,034 |
(1,003) |
|||||
Income taxes payable |
(155) |
(137) |
|||||
Other accrued liabilities |
(10,536) |
(5,534) |
|||||
Change in other non-current assets and liabilities |
203 |
(692) |
|||||
Net cash provided by (used in) operating activities |
(12,406) |
19,150 |
|||||
Cash flows from investing activities: |
|||||||
Payments for property, plant and equipment |
(11,449) |
(23,705) |
|||||
Payments for plant turnaround costs |
(2,679) |
(637) |
|||||
Proceeds from involuntary conversion of property, plant and equipment |
274 |
7,203 |
|||||
Proceeds from sale of property, plant and equipment |
225 |
4,392 |
|||||
Net cash used in investing activities |
(13,629) |
(12,747) |
|||||
Cash flows from financing activities: |
|||||||
Payments of long-term debt |
(211,790) |
(253,637) |
|||||
Payments under finance lease obligations |
(2,648) |
(4,021) |
|||||
Proceeds from long-term debt |
243,500 |
259,019 |
|||||
Purchase of treasury units |
(17) |
(9) |
|||||
Payment of debt issuance costs |
(592) |
(3,628) |
|||||
Cash distributions paid |
(593) |
(5,121) |
|||||
Net cash provided by (used in) financing activities |
27,860 |
(7,397) |
|||||
Net increase (decrease) in cash |
1,825 |
(994) |
|||||
Cash at beginning of period |
4,958 |
2,856 |
|||||
Cash at end of period |
$ |
6,783 |
$ |
1,862 |
|||
Non-cash additions to property, plant and equipment |
$ |
749 |
$ |
1,432 |
|||
MARTIN MIDSTREAM PARTNERS L.P. SEGMENT OPERATING INCOME (Unaudited) (Dollars and volumes in thousands, except BBL per day) |
||||||||||||||
Terminalling and Storage Segment |
||||||||||||||
Comparative Results of Operations for the Three Months Ended September 30, 2021 and 2020 |
||||||||||||||
Three Months Ended September 30, |
Variance |
Percent Change |
||||||||||||
2021 |
2020 |
|||||||||||||
(In thousands, except BBL per day) |
||||||||||||||
Revenues: |
||||||||||||||
Services |
$ |
20,628 |
$ |
22,512 |
$ |
(1,884) |
(8) |
% |
||||||
Products |
30,598 |
25,676 |
4,922 |
19 |
% |
|||||||||
Total revenues |
51,226 |
48,188 |
3,038 |
6 |
% |
|||||||||
Cost of products sold |
24,618 |
20,381 |
4,237 |
21 |
% |
|||||||||
Operating expenses |
13,789 |
12,064 |
1,725 |
14 |
% |
|||||||||
Selling, general and administrative expenses |
1,528 |
1,537 |
(9) |
(1) |
% |
|||||||||
Depreciation and amortization |
7,049 |
7,294 |
(245) |
(3) |
% |
|||||||||
4,242 |
6,912 |
(2,670) |
(39) |
% |
||||||||||
Other operating income, net |
11 |
1 |
10 |
1,000 |
% |
|||||||||
Gain on involuntary conversion of property, plant and equipment |
186 |
62 |
124 |
200 |
% |
|||||||||
Operating income |
$ |
4,439 |
$ |
6,975 |
$ |
(2,536) |
(36) |
% |
||||||
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 Nine Months Ended September 30, 2021 and 2020 |
||||||||||||||
Nine Months Ended September 30, |
Variance |
Percent Change |
||||||||||||
2021 |
2020 |
|||||||||||||
(In thousands, except BBL per day) |
||||||||||||||
Revenues: |
||||||||||||||
Services |
$ |
60,945 |
$ |
66,115 |
$ |
(5,170) |
(8) |
% |
||||||
Products |
75,639 |
80,183 |
(4,544) |
(6) |
% |
|||||||||
Total revenues |
136,584 |
146,298 |
(9,714) |
(7) |
% |
|||||||||
Cost of products sold |
60,318 |
68,066 |
(7,748) |
(11) |
% |
|||||||||
Operating expenses |
39,246 |
37,269 |
1,977 |
5 |
% |
|||||||||
Selling, general and administrative expenses |
4,495 |
4,594 |
(99) |
(2) |
% |
|||||||||
Depreciation and amortization |
21,150 |
22,022 |
(872) |
(4) |
% |
|||||||||
11,375 |
14,347 |
(2,972) |
(21) |
% |
||||||||||
Other operating income (loss), net |
6 |
(3,053) |
3,059 |
100 |
% |
|||||||||
Gain on involuntary conversion of property, plant and equipment |
186 |
62 |
124 |
200 |
% |
|||||||||
Operating income |
$ |
11,567 |
$ |
11,356 |
$ |
211 |
2 |
% |
||||||
Shore-based throughput volumes (guaranteed minimum) (gallons) |
60,000 |
60,000 |
— |
— |
% |
|||||||||
Smackover refinery throughput volumes (guaranteed minimum) (BBL per day) |
6,500 |
6,500 |
— |
— |
% |
|||||||||
Transportation Segment |
||||||||||||||
Comparative Results of Operations for the Three Months Ended September 30, 2021 and 2020 |
||||||||||||||
Three Months Ended September 30, |
Variance |
Percent Change |
||||||||||||
2021 |
2020 |
|||||||||||||
(In thousands) |
||||||||||||||
Revenues |
$ |
42,568 |
$ |
35,712 |
$ |
6,856 |
19 |
% |
||||||
Operating expenses |
33,053 |
28,144 |
4,909 |
17 |
% |
|||||||||
Selling, general and administrative expenses |
1,920 |
2,050 |
(130) |
(6) |
% |
|||||||||
Depreciation and amortization |
3,710 |
4,412 |
(702) |
(16) |
% |
|||||||||
3,885 |
1,106 |
2,779 |
251 |
% |
||||||||||
Other operating income, net |
42 |
21 |
21 |
100 |
% |
|||||||||
Operating income |
$ |
3,927 |
$ |
1,127 |
$ |
2,800 |
248 |
% |
||||||
Comparative Results of Operations for the Nine Months Ended September 30, 2021 and 2020 |
||||||||||||||
Nine Months Ended September 30, |
Variance |
Percent Change |
||||||||||||
2021 |
2020 |
|||||||||||||
(In thousands) |
||||||||||||||
Revenues |
$ |
114,886 |
$ |
116,145 |
$ |
(1,259) |
(1) |
% |
||||||
Operating expenses |
94,042 |
91,637 |
2,405 |
3 |
% |
|||||||||
Selling, general and administrative expenses |
5,578 |
6,243 |
(665) |
(11) |
% |
|||||||||
Depreciation and amortization |
12,039 |
13,020 |
(981) |
(8) |
% |
|||||||||
$ |
3,227 |
$ |
5,245 |
$ |
(2,018) |
(38) |
% |
|||||||
Other operating income (loss), net |
59 |
(1,174) |
1,233 |
105 |
% |
|||||||||
Operating income |
$ |
3,286 |
$ |
4,071 |
$ |
(785) |
(19) |
% |
||||||
Sulfur Services Segment |
||||||||||||||
Comparative Results of Operations for the Three Months Ended September 30, 2021 and 2020 |
||||||||||||||
Three Months Ended September 30, |
Variance |
Percent Change |
||||||||||||
2021 |
2020 |
|||||||||||||
(In thousands) |
||||||||||||||
Revenues: |
||||||||||||||
Services |
$ |
2,950 |
$ |
2,915 |
$ |
35 |
1 |
% |
||||||
Products |
27,887 |
18,965 |
8,922 |
47 |
% |
|||||||||
Total revenues |
30,837 |
21,880 |
8,957 |
41 |
% |
|||||||||
Cost of products sold |
21,799 |
14,141 |
7,658 |
54 |
% |
|||||||||
Operating expenses |
2,849 |
2,501 |
348 |
14 |
% |
|||||||||
Selling, general and administrative expenses |
1,321 |
1,166 |
155 |
13 |
% |
|||||||||
Depreciation and amortization |
2,594 |
2,953 |
(359) |
(12) |
% |
|||||||||
2,274 |
1,119 |
1,155 |
103 |
% |
||||||||||
Other operating income, net |
8 |
1 |
7 |
700 |
% |
|||||||||
Operating income |
$ |
2,282 |
$ |
1,120 |
$ |
1,162 |
104 |
% |
||||||
Sulfur (long tons) |
145 |
154 |
(9) |
(6) |
% |
|||||||||
Fertilizer (long tons) |
57 |
44 |
13 |
30 |
% |
|||||||||
Total sulfur services volumes (long tons) |
202 |
198 |
4 |
2 |
% |
|||||||||
Comparative Results of Operations for the Nine Months Ended September 30, 2021 and 2020 |
||||||||||||||
Nine Months Ended September 30, |
Variance |
Percent Change |
||||||||||||
2021 |
2020 |
|||||||||||||
(In thousands) |
||||||||||||||
Revenues: |
||||||||||||||
Services |
$ |
8,849 |
$ |
8,744 |
$ |
105 |
1 |
% |
||||||
Products |
95,109 |
74,892 |
20,217 |
27 |
% |
|||||||||
Total revenues |
103,958 |
83,636 |
20,322 |
24 |
% |
|||||||||
Cost of products sold |
69,619 |
49,546 |
20,073 |
41 |
% |
|||||||||
Operating expenses |
7,662 |
8,553 |
(891) |
(10) |
% |
|||||||||
Selling, general and administrative expenses |
3,777 |
3,535 |
242 |
7 |
% |
|||||||||
Depreciation and amortization |
7,882 |
8,978 |
(1,096) |
(12) |
% |
|||||||||
15,018 |
13,024 |
1,994 |
15 |
% |
||||||||||
Other operating income, net |
14 |
6,777 |
(6,763) |
(100) |
% |
|||||||||
Gain on involuntary conversion of property, plant and equipment |
— |
4,460 |
(4,460) |
(100) |
% |
|||||||||
Operating income |
$ |
15,032 |
$ |
24,261 |
$ |
(9,229) |
(38) |
% |
||||||
Sulfur (long tons) |
364 |
503 |
(139) |
(28) |
% |
|||||||||
Fertilizer (long tons) |
236 |
209 |
27 |
13 |
% |
|||||||||
Total sulfur services volumes (long tons) |
600 |
712 |
(112) |
(16) |
% |
|||||||||
Natural Gas Liquids Segment |
||||||||||||||
Comparative Results of Operations for the Three Months Ended September 30, 2021 and 2020 |
||||||||||||||
Three Months Ended September 30, |
Variance |
Percent Change |
||||||||||||
2021 |
2020 |
|||||||||||||
(In thousands) |
||||||||||||||
Products revenues |
$ |
91,764 |
$ |
52,350 |
$ |
39,414 |
75 |
% |
||||||
Cost of products sold |
87,551 |
47,723 |
39,828 |
83 |
% |
|||||||||
Operating expenses |
1,088 |
1,039 |
49 |
5 |
% |
|||||||||
Selling, general and administrative expenses |
954 |
1,117 |
(163) |
(15) |
% |
|||||||||
Depreciation and amortization |
592 |
617 |
(25) |
(4) |
% |
|||||||||
Operating income |
$ |
1,579 |
$ |
1,854 |
$ |
(275) |
(15) |
% |
||||||
NGL sales volumes (Bbls) |
1,435 |
1,723 |
(288) |
(17) |
% |
|||||||||
| Comparative Results of Operations for the Nine Months Ended September 30, 2021 and 2020 | ||||||||||||||
Nine Months Ended September 30, |
Variance |
Percent Change |
||||||||||||
2021 |
2020 |
|||||||||||||
(In thousands) |
||||||||||||||
Products revenues |
$ |
257,081 |
$ |
164,865 |
$ |
92,216 |
56 |
% |
||||||
Cost of products sold |
234,239 |
148,562 |
85,677 |
58 |
% |
|||||||||
Operating expenses |
3,144 |
3,128 |
16 |
1 |
% |
|||||||||
Selling, general and administrative expenses |
3,858 |
3,194 |
664 |
21 |
% |
|||||||||
Depreciation and amortization |
1,791 |
1,838 |
(47) |
(3) |
% |
|||||||||
14,049 |
8,143 |
5,906 |
73 |
% |
||||||||||
Other operating loss, net |
(689) |
(2) |
(687) |
(34,350) |
% |
|||||||||
Operating income |
$ |
13,360 |
$ |
8,141 |
$ |
5,219 |
64 |
% |
||||||
NGL sales volumes (Bbls) |
4,839 |
5,892 |
(1,053) |
(18) |
% |
|||||||||
| Unallocated Selling, General and Administrative Expenses | |||||||||||||||||||||||||||||
Comparative Results of Operations for the Three and Nine Months Ended September 30, 2021 and 2020 |
|||||||||||||||||||||||||||||
Three Months Ended September 30, |
Variance |
Percent Change |
Nine Months Ended September 30, |
Variance |
Percent Change |
||||||||||||||||||||||||
2021 |
2020 |
2021 |
2020 |
||||||||||||||||||||||||||
(In thousands) |
(In thousands) |
||||||||||||||||||||||||||||
Unallocated selling, general and administrative expenses |
$ |
4,074 |
$ |
4,523 |
$ |
(449) |
(10) |
% |
$ |
11,773 |
$ |
13,256 |
$ |
(1,483) |
(11) |
% |
|||||||||||||
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, 2021 and 2020.
Reconciliation of EBITDA, Adjusted EBITDA, Distributable Cash Flow and Adjusted Free Cash Flow |
|||||||||||||||
Three Months Ended |
Nine Months Ended |
||||||||||||||
September 30, |
September 30, |
||||||||||||||
2021 |
2020 |
2021 |
2020 |
||||||||||||
(in thousands) |
(in thousands) |
||||||||||||||
Net loss |
$ |
(6,911) |
$ |
(10,819) |
$ |
(11,012) |
$ |
(4,207) |
|||||||
Adjustments: |
|||||||||||||||
Interest expense, net |
14,110 |
12,943 |
40,372 |
32,245 |
|||||||||||
Income tax expense |
954 |
373 |
2,111 |
1,510 |
|||||||||||
Depreciation and amortization |
13,945 |
15,276 |
42,862 |
45,858 |
|||||||||||
EBITDA |
22,098 |
17,773 |
74,333 |
75,406 |
|||||||||||
Adjustments: |
|||||||||||||||
(Gain) loss on sale of property, plant and equipment, net |
(61) |
(22) |
610 |
153 |
|||||||||||
Gain on involuntary conversion of property, plant and equipment |
(186) |
(4,522) |
(186) |
(4,522) |
|||||||||||
Unrealized mark-to-market on commodity derivatives |
(412) |
393 |
(207) |
(276) |
|||||||||||
Non-cash insurance related accruals |
— |
— |
— |
250 |
|||||||||||
Lower of cost or market adjustments |
— |
35 |
— |
370 |
|||||||||||
Loss on exchange of senior unsecured notes |
— |
8,516 |
— |
8,516 |
|||||||||||
Gain on repurchase of senior unsecured notes |
— |
— |
— |
(3,484) |
|||||||||||
Non-cash unit-based compensation |
48 |
361 |
336 |
1,070 |
|||||||||||
Adjusted EBITDA |
21,487 |
22,534 |
74,886 |
77,483 |
|||||||||||
Adjustments: |
|||||||||||||||
Interest expense, net |
(14,110) |
(12,943) |
(40,372) |
(32,245) |
|||||||||||
Income tax expense |
(954) |
(373) |
(2,111) |
(1,510) |
|||||||||||
Amortization of debt premium |
— |
(38) |
— |
(191) |
|||||||||||
Amortization of deferred debt issuance costs |
1,064 |
1,683 |
2,585 |
2,674 |
|||||||||||
Deferred income tax expense |
661 |
184 |
1,419 |
1,202 |
|||||||||||
Payments for plant turnaround costs |
(985) |
(406) |
(2,679) |
(637) |
|||||||||||
Maintenance capital expenditures |
(1,945) |
(2,576) |
(8,386) |
(7,882) |
|||||||||||
Distributable Cash Flow |
$ |
5,218 |
$ |
8,065 |
$ |
25,342 |
$ |
38,894 |
|||||||
Adjustments: |
|||||||||||||||
Expansion capital expenditures |
$ |
(1,367) |
$ |
(1,951) |
$ |
(3,344) |
$ |
(9,882) |
|||||||
Principal payments under finance lease obligations |
(57) |
(799) |
(2,648) |
(4,021) |
|||||||||||
Adjusted Free Cash Flow |
$ |
3,794 |
$ |
5,315 |
$ |
19,350 |
$ |
24,991 |
|||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20211020005966/en/
Sharon Taylor - Vice President & Chief Financial Officer (877) 256-6644 investor.relations@mmlp.com
Source: Martin Midstream Partners L.P.