- Revises Fourth Quarter Guidance
- Reported net loss of $10.0 million, including a $24.0 million inventory valuation write down, for the nine months ended September 30, 2022
- Reported net loss of $28.0 million, including a $21.8 million inventory valuation write down, for the three months ended September 30, 2022
- Reported adjusted EBITDA of $18.8 million and $97.1 million for the three and nine months ended September 30, 2022, respectively
KILGORE, Texas--(BUSINESS WIRE)-- Martin Midstream Partners L.P. (Nasdaq:MMLP) ("MMLP" or the "Partnership") today announced its financial results for the third quarter of 2022.
Bob Bondurant, President and Chief Executive Officer of Martin Midstream GP LLC, the general partner of the Partnership, stated, "During the third quarter, which is typically the Partnership’s weakest quarter due to seasonal lows in the fertilizer and butane businesses, both the Transportation and the Terminalling and Storage segments continued to outperform our internal projections. In the Transportation segment, demand for reliable, experienced tank truck hauling continues to be strong and our expansion in Florida has been positive. On the marine side, rates have now recovered to pre-pandemic levels and asset utilization has improved. In the Terminalling and Storage segment, the underlying drivers of the lubricants and specialty products businesses are positive resulting in higher than anticipated sales volumes. However, the Sulfur and Natural Gas Liquids segments experienced volatility during the third quarter. In the Sulfur segment, both the fertilizer and sulfur groups faced pricing instability resulting in lower fertilizer sales volumes. In addition, the pure sulfur business was impacted by unplanned maintenance expense related to the marine assets deployed in support of the business. Finally, within the NGL segment the butane blending market was negatively impacted by steeply falling prices in September, resulting in a significant non-cash inventory value adjustment.
“Although the markets and the factors that influence them are unpredictable at this time, the Partnership has been able to improve our financial results year over year. However, as commodity prices continue to move erratically from the risk of a global recession and fears of weak oil demand, we are revising our fourth quarter adjusted EBITDA guidance to between $19 and $24 million, resulting in a range of $116 to $121 million for full year 2022.”
THIRD QUARTER 2022 OPERATING RESULTS BY BUSINESS SEGMENT
TERMINALLING AND STORAGE (“T&S”)
T&S Operating Income for the three months ended September 30, 2022 and 2021 was $5.6 million and $4.4 million, respectively.
Adjusted segment EBITDA for T&S was $12.3 million and $11.2 million, for the three months ended September 30, 2022 and 2021, respectively, reflecting continued strength in our lubricant and specialty products divisions.
TRANSPORTATION
Transportation Operating Income for the three months ended September 30, 2022 and 2021 was $12.1 million and $3.9 million, respectively.
Adjusted segment EBITDA for Transportation was $15.1 million and $7.6 million for the three months ended September 30, 2022 and 2021, respectively, reflecting robust demand for land transportation services coupled with improving marine fleet utilization and higher day rates.
SULFUR SERVICES
Sulfur Services Operating Income (Loss) for the three months ended September 30, 2022 and 2021 was $(6.7) million, including a $(3.3) million inventory valuation write down, and $2.3 million, respectively.
Adjusted segment EBITDA for Sulfur Services was $(4.2) million and $4.9 million for the three months ended September 30, 2022 and 2021, respectively, reflecting decreased fertilizer sales volumes related to pricing instability and higher operating expenses in the sulfur business due to marine asset maintenance expense.
NATURAL GAS LIQUIDS (“NGL”)
NGL Operating Income (Loss) for the three months ended September 30, 2022 and 2021 was $(19.0) million, including an $(18.5) million inventory valuation write down, and $1.6 million, respectively, as the butane blending market was negatively impacted by steeply falling prices in September 2022.
Adjusted segment EBITDA for NGL was $(0.2) million and $1.8 million for the three months ended September 30, 2022 and 2021, respectively, primarily reflecting decreased NGL sales volumes and margins.
UNALLOCATED SELLING, GENERAL AND ADMINISTRATIVE EXPENSE (“USGA”)
USGA expenses included in operating income for the three months ended September 30, 2022 and 2021 were $4.3 million and $4.1 million, respectively.
USGA expenses included in adjusted EBITDA for the three months ended September 30, 2022 and 2021 were $4.2 million and $4.0 million, respectively, primarily reflecting an increase in employee related expenses.
CAPITALIZATION
At September 30, 2022, the Partnership had $547 million of total debt outstanding, including $202 million drawn on its $275 million revolving credit facility, $54 million of senior secured 1.5 lien notes due 2024 and $291 million of senior secured second lien notes due 2025. At September 30, 2022, the Partnership had liquidity of approximately $44 million from available capacity under its revolving credit facility. The Partnership’s adjusted leverage ratio, as calculated under the revolving credit facility, was 3.63 times and 3.46 times on September 30, 2022 and June 30, 2022, respectively. The Partnership was in compliance with all debt covenants as of September 30, 2022.
The Partnership’s revolving credit facility matures on August 31, 2023, therefore the outstanding borrowings under the facility are presented as a current liability on the September 30, 2022 financial statements. The Partnership is in the process of refinancing the credit facility, and although no assurance of success can be given, management presently believes the measures being taken will enable the Partnership to successfully extend the maturity of the credit facility.
RESULTS OF OPERATIONS
The Partnership had a net loss for the three months ended September 30, 2022 of $28.0 million, a loss of $0.71 per limited partner unit. 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. Adjusted EBITDA for the three months ended September 30, 2022 was $18.8 million compared to $21.5 million for the three months ended September 30, 2021. Net cash provided by (used in) operating activities for the three months ended September 30, 2022 was ($45.2) million, compared to $(18.5) million for the three months ended September 30, 2021. Distributable cash flow for the three months ended September 30, 2022 was $(3.5) million compared to $5.2 million for the three months ended September 30, 2021.
Revenues for the three months ended September 30, 2022 were $229.3 million compared to $211.3 million for the three months ended September 30, 2021.
The Partnership had a net loss for the nine months ended September 30, 2022 of $10.0 million, a loss of $0.25 per limited partner unit. 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. Adjusted EBITDA for the nine months ended September 30, 2022 was $97.1 million compared to $74.9 million for the nine months ended September 30, 2021. Net cash provided by (used in) operating activities for the nine months ended September 30, 2022 was $(16.8) million, compared to $(12.4) million for the nine months ended September 30, 2021. Distributable cash flow for the nine months ended September 30, 2022 was $39.6 million compared to $25.3 million for the nine months ended September 30, 2021.
Revenues for the nine months ended September 30, 2022 were $775.5 million compared to $596.5 million for the nine months ended September 30, 2021.
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 2022 to the Partnership's adjusted EBITDA for the third quarter 2021.
2022 REVISED FINANCIAL GUIDANCE
The Partnership now expects to generate adjusted EBITDA between $116 million and $121 million for full-year 2022, compared to the previously revised adjusted EBITDA guidance of between $126 million and $135 million. This decreased guidance reflects our expectation that the seasonal uplift in commodity prices, specifically normal butane prices as a percentage of crude oil, will be lower than historical patterns at least through year-end 2022.
Distributable cash flow is now expected to be between $38 million and $43 million for full-year 2022, compared to the previous distributable cash flow guidance of between $53 million and $62 million. Adjusted free cash flow is now expected to be between $29 million and $34 million, compared to the previous adjusted free cash flow guidance of between $44 million and $53 million.
MMLP does not intend at this time to provide financial guidance beyond 2022.
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.
Investors' Conference Call
Date: Thursday, November 3 2022 Time: 8:00 a.m. CT (please dial in by 7:55 a.m.) Dial In #: (888) 330-2384 Conference ID: 8536096
Replay Dial In # (800) 770-2030 – Conference ID: 8536096
A webcast of the conference call along with the Third Quarter 2022 Earnings Summary and Revised Guidance Presentation 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
MMLP, headquartered in Kilgore, Texas, is a publicly traded limited partnership with a diverse set of operations focused primarily in the Gulf Coast region of the United States. MMLP’s four primary business lines include: (1) terminalling, processing, storage, and packaging services for petroleum products and by-products, including the refining of naphthenic crude oil; (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 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 (including variants of the virus), 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 “SEC”). 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
To assist the Partnership's management in assessing its business, it uses the following non-GAAP financial measures: earnings before interest, taxes, and depreciation and amortization ("EBITDA"), adjusted EBITDA (as defined below) distributable cash flow available to common unitholders (“distributable cash flow”), and free cash flow after growth capital expenditures and principal payments under finance lease obligations ("adjusted free cash flow"). 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.
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.
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. Adjusted EBITDA is used as a supplemental performance and liquidity measure by the Partnership's management and by external users of its financial statements, such as investors, commercial banks, research analysts, and others, to assess:
- the financial performance of the Partnership's assets without regard to financing methods, capital structure, or historical cost basis;
- the ability of the Partnership's assets to generate cash sufficient to pay interest costs, support its indebtedness, and make cash distributions to its unitholders; and
- its operating performance and return on capital as compared to those of other companies in the midstream energy sector, without regard to financing methods or capital structure.
The GAAP measures most directly comparable to adjusted EBITDA are net income (loss) and net cash provided by (used in) operating activities. Adjusted EBITDA should not be considered an alternative to, or more meaningful than, net income (loss), operating income (loss), net cash provided by (used in) operating activities, or any other measure of financial performance presented in accordance with GAAP. Adjusted EBITDA may not be comparable to similarly titled measures of other companies because other companies may not calculate adjusted EBITDA in the same manner.
Adjusted EBITDA does not include interest expense, income tax expense, and depreciation and amortization. Because the Partnership has borrowed money to finance its operations, interest expense is a necessary element of its costs and its ability to generate cash available for distribution. Because the Partnership has capital assets, depreciation and amortization are also necessary elements of its costs. Therefore, any measures that exclude these elements have material limitations. To compensate for these limitations, the Partnership believes that it is important to consider net income (loss) and net cash provided by (used in) operating activities as determined under GAAP, as well as adjusted EBITDA, to evaluate its overall performance.
Distributable Cash Flow. The Partnership defines distributable cash flow as net cash provided by (used in) operating activities less cash received (plus cash paid) for closed commodity derivative positions included in accumulated other comprehensive income (loss), plus changes in operating assets and liabilities which (provided) used cash, less 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 us 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 its 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. The Partnership defines adjusted free cash flow 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 its 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.
The GAAP measure most directly comparable to distributable cash flow and adjusted free cash flow is net cash provided by (used in) operating activities. Distributable cash flow and adjusted free cash flow should not be considered alternatives to, or more meaningful than, net income (loss), operating income (loss), net cash provided by (used in) operating activities, or any other measure of liquidity presented in accordance with GAAP. Distributable cash flow and adjusted free cash flow have important limitations because they exclude some items that affect net income (loss), operating income (loss), and net cash provided by (used in) operating activities. Distributable cash flow and adjusted free cash flow may not be comparable to similarly titled measures of other companies because other companies may not calculate these non-GAAP metrics in the same manner. To compensate for these limitations, the Partnership believes that it is important to consider net cash provided by (used in) operating activities determined under GAAP, as well as distributable cash flow and adjusted free cash flow, to evaluate its overall liquidity.
MMLP-F
|
MARTIN MIDSTREAM PARTNERS L.P. CONSOLIDATED AND CONDENSED BALANCE SHEETS (Dollars in thousands) |
|||||||
September 30, 2022 |
December 31, 2021 |
||||||
(Unaudited) |
(Audited) |
||||||
Assets |
|||||||
Cash |
$ |
45 |
$ |
52 |
|||
Accounts and other receivables, less allowance for doubtful accounts of $448 and $311, respectively |
77,148 |
84,199 |
|||||
Inventories |
135,638 |
62,120 |
|||||
Due from affiliates |
2,393 |
14,409 |
|||||
Other current assets |
17,134 |
12,908 |
|||||
Total current assets |
232,358 |
173,688 |
|||||
Property, plant and equipment, at cost |
904,159 |
898,770 |
|||||
Accumulated depreciation |
(578,277 |
) |
(553,300 |
) |
|||
Property, plant and equipment, net |
325,882 |
345,470 |
|||||
Goodwill |
16,823 |
16,823 |
|||||
Right-of-use assets |
33,817 |
21,861 |
|||||
Deferred income taxes, net |
16,210 |
19,821 |
|||||
Other assets, net |
2,895 |
2,198 |
|||||
Total assets |
$ |
627,985 |
$ |
579,861 |
|||
Liabilities and Partners’ Capital (Deficit) |
|||||||
Current installments of long-term debt and finance lease obligations |
$ |
200,651 |
$ |
280 |
|||
Trade and other accounts payable |
74,056 |
70,342 |
|||||
Product exchange payables |
711 |
1,406 |
|||||
Due to affiliates |
13,777 |
1,824 |
|||||
Income taxes payable |
613 |
385 |
|||||
Other accrued liabilities |
21,020 |
29,850 |
|||||
Total current liabilities |
310,828 |
104,087 |
|||||
Long-term debt, net |
342,566 |
498,871 |
|||||
Finance lease obligations |
— |
9 |
|||||
Operating lease liabilities |
25,485 |
15,704 |
|||||
Other long-term obligations |
8,323 |
9,227 |
|||||
Total liabilities |
687,202 |
627,898 |
|||||
Commitments and contingencies |
|||||||
Partners’ capital (deficit) |
(59,217 |
) |
(48,853 |
) |
|||
Accumulated other comprehensive income (loss) |
— |
816 |
|||||
Total partners’ capital (deficit) |
(59,217 |
) |
(48,037 |
) |
|||
Total liabilities and partners' capital (deficit) |
$ |
627,985 |
$ |
579,861 |
|||
|
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, |
||||||||||||||
2022 |
2021 |
2022 |
2021 |
||||||||||||
Revenues: |
|||||||||||||||
Terminalling and storage * |
$ |
20,007 |
$ |
18,980 |
$ |
59,859 |
$ |
56,060 |
|||||||
Transportation * |
58,993 |
39,079 |
161,535 |
103,820 |
|||||||||||
Sulfur services |
3,085 |
2,950 |
9,253 |
8,849 |
|||||||||||
Product sales: * |
|||||||||||||||
Natural gas liquids |
80,891 |
91,764 |
299,034 |
257,081 |
|||||||||||
Sulfur services |
25,783 |
27,887 |
135,691 |
95,109 |
|||||||||||
Terminalling and storage |
40,546 |
30,598 |
110,130 |
75,606 |
|||||||||||
147,220 |
150,249 |
544,855 |
427,796 |
||||||||||||
Total revenues |
229,305 |
211,258 |
775,502 |
596,525 |
|||||||||||
Costs and expenses: |
|||||||||||||||
Cost of products sold: (excluding depreciation and amortization) |
|||||||||||||||
Natural gas liquids * |
94,668 |
85,137 |
293,350 |
225,862 |
|||||||||||
Sulfur services * |
25,230 |
20,266 |
100,078 |
65,657 |
|||||||||||
Terminalling and storage * |
32,289 |
24,167 |
87,267 |
58,895 |
|||||||||||
152,187 |
129,570 |
480,695 |
350,414 |
||||||||||||
Expenses: |
|||||||||||||||
Operating expenses * |
66,158 |
50,098 |
186,735 |
142,045 |
|||||||||||
Selling, general and administrative * |
10,273 |
9,739 |
31,420 |
29,308 |
|||||||||||
Depreciation and amortization |
13,721 |
13,945 |
43,007 |
42,862 |
|||||||||||
Total costs and expenses |
242,339 |
203,352 |
741,857 |
564,629 |
|||||||||||
Other operating income (loss), net |
790 |
61 |
1,050 |
(610 |
) |
||||||||||
Gain on involuntary conversion of property, plant and equipment |
— |
186 |
— |
186 |
|||||||||||
Operating income (loss) |
(12,244 |
) |
8,153 |
34,695 |
31,472 |
||||||||||
Other income (expense): |
|||||||||||||||
Interest expense, net |
(13,906 |
) |
(14,110 |
) |
(39,181 |
) |
(40,372 |
) |
|||||||
Other, net |
(2 |
) |
— |
(4 |
) |
(1 |
) |
||||||||
Total other expense |
(13,908 |
) |
(14,110 |
) |
(39,185 |
) |
(40,373 |
) |
|||||||
Net loss before taxes |
(26,152 |
) |
(5,957 |
) |
(4,490 |
) |
(8,901 |
) |
|||||||
Income tax expense |
(1,891 |
) |
(954 |
) |
(5,469 |
) |
(2,111 |
) |
|||||||
Net loss |
(28,043 |
) |
(6,911 |
) |
(9,959 |
) |
(11,012 |
) |
|||||||
Less general partner's interest in net loss |
561 |
138 |
199 |
220 |
|||||||||||
Less loss allocable to unvested restricted units |
90 |
20 |
39 |
30 |
|||||||||||
Limited partners' interest in net loss |
$ |
(27,392 |
) |
$ |
(6,753 |
) |
$ |
(9,721 |
) |
$ |
(10,762 |
) |
|||
Net loss per unit attributable to limited partners - basic |
$ |
(0.71 |
) |
$ |
(0.17 |
) |
$ |
(0.25 |
) |
$ |
(0.28 |
) |
|||
Net loss per unit attributable to limited partners - diluted |
$ |
(0.71 |
) |
$ |
(0.17 |
) |
$ |
(0.25 |
) |
$ |
(0.28 |
) |
|||
Weighted average limited partner units - basic |
38,726,388 |
38,687,874 |
38,725,933 |
38,689,434 |
|||||||||||
Weighted average limited partner units - diluted |
38,726,388 |
38,687,874 |
38,725,933 |
38,689,434 |
|||||||||||
|
*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, |
||||||||||||||
2022 |
2021 |
2022 |
2021 |
||||||||||||
Revenues:* |
|||||||||||||||
Terminalling and storage |
$ |
16,065 |
$ |
15,866 |
$ |
49,685 |
$ |
46,741 |
|||||||
Transportation |
7,111 |
5,564 |
20,862 |
14,463 |
|||||||||||
Product Sales |
61 |
68 |
477 |
253 |
|||||||||||
Costs and expenses:* |
|||||||||||||||
Cost of products sold: (excluding depreciation and amortization) |
|||||||||||||||
Sulfur services |
2,616 |
2,441 |
7,884 |
7,379 |
|||||||||||
Terminalling and storage |
10,202 |
7,259 |
30,062 |
18,863 |
|||||||||||
Expenses: |
|||||||||||||||
Operating expenses |
23,856 |
20,088 |
68,682 |
58,046 |
|||||||||||
Selling, general and administrative |
7,626 |
7,659 |
23,932 |
23,624 |
|||||||||||
|
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, |
||||||||||||||
2022 |
2021 |
2022 |
2021 |
||||||||||||
Net loss |
$ |
(28,043 |
) |
$ |
(6,911 |
) |
$ |
(9,959 |
) |
$ |
(11,012 |
) |
|||
Changes in fair values of commodity cash flow hedges |
— |
(5,999 |
) |
— |
(5,999 |
) |
|||||||||
Commodity cash flow hedging (gains) reclassified to earnings |
(167 |
) |
— |
(816 |
) |
— |
|||||||||
Comprehensive loss |
$ |
(28,210 |
) |
$ |
(12,910 |
) |
$ |
(10,775 |
) |
$ |
(17,011 |
) |
|||
|
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, 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 |
) |
— |
— |
— |
— |
|||||||||||||
General partner contribution |
— |
— |
— |
— |
— |
||||||||||||||
Cash distributions |
— |
(581 |
) |
(12 |
) |
— |
(593 |
) |
|||||||||||
Unit-based compensation |
— |
336 |
— |
— |
336 |
||||||||||||||
Purchase of treasury units |
(7,156 |
) |
(17 |
) |
— |
— |
(17 |
) |
|||||||||||
Gain recognized in AOCI on commodity cash flow hedges |
— |
— |
— |
(5,999 |
) |
(5,999 |
) |
||||||||||||
Balances - September 30, 2021 |
38,802,750 |
$ |
(59,830 |
) |
$ |
1,673 |
$ |
(5,999 |
) |
$ |
(64,156 |
) |
|||||||
Balances - January 1, 2022 |
38,802,750 |
$ |
(50,741 |
) |
$ |
1,888 |
$ |
816 |
$ |
(48,037 |
) |
||||||||
Net loss |
— |
(9,760 |
) |
(199 |
) |
— |
(9,959 |
) |
|||||||||||
Issuance of restricted units |
48,000 |
— |
— |
— |
— |
||||||||||||||
Cash distributions |
— |
(583 |
) |
(12 |
) |
— |
(595 |
) |
|||||||||||
Unit-based compensation |
— |
125 |
— |
— |
125 |
||||||||||||||
Gain reclassified from AOCI into income on commodity cash flow hedges |
— |
— |
— |
(816 |
) |
(816 |
) |
||||||||||||
Excess purchase price over carrying value of acquired assets |
— |
65 |
— |
— |
65 |
||||||||||||||
Balances - September 30, 2022 |
38,850,750 |
$ |
(60,894 |
) |
$ |
1,677 |
$ |
— |
$ |
(59,217 |
) |
||||||||
|
MARTIN MIDSTREAM PARTNERS L.P. CONSOLIDATED AND CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in thousands) |
|||||||
Nine Months Ended |
|||||||
September 30, |
|||||||
2022 |
2021 |
||||||
Cash flows from operating activities: |
|||||||
Net loss |
$ |
(9,959 |
) |
$ |
(11,012 |
) |
|
Adjustments to reconcile net loss to net cash provided by operating activities: |
|||||||
Depreciation and amortization |
43,007 |
42,862 |
|||||
Amortization of deferred debt issuance costs |
2,356 |
2,585 |
|||||
Deferred income tax expense |
3,611 |
1,419 |
|||||
(Gain) loss on sale of property, plant and equipment, net |
(1,050 |
) |
610 |
||||
Gain on involuntary conversion of property, plant and equipment |
— |
(186 |
) |
||||
Derivative (income) loss |
(901 |
) |
1,825 |
||||
Net cash paid for commodity derivatives |
85 |
(2,982 |
) |
||||
Non cash unit-based compensation |
125 |
336 |
|||||
Change in current assets and liabilities, excluding effects of acquisitions and dispositions: |
|||||||
Accounts and other receivables |
7,076 |
(22,924 |
) |
||||
Inventories |
(73,518 |
) |
(44,353 |
) |
|||
Due from affiliates |
12,016 |
4,674 |
|||||
Other current assets |
(4,824 |
) |
(1,912 |
) |
|||
Trade and other accounts payable |
6,053 |
21,092 |
|||||
Product exchange payables |
(695 |
) |
1,014 |
||||
Due to affiliates |
11,953 |
5,034 |
|||||
Income taxes payable |
228 |
(155 |
) |
||||
Other accrued liabilities |
(13,435 |
) |
(10,536 |
) |
|||
Change in other non-current assets and liabilities |
1,116 |
203 |
|||||
Net cash used in operating activities |
(16,756 |
) |
(12,406 |
) |
|||
Cash flows from investing activities: |
|||||||
Payments for property, plant and equipment |
(21,019 |
) |
(11,449 |
) |
|||
Payments for plant turnaround costs |
(4,262 |
) |
(2,679 |
) |
|||
Proceeds from involuntary conversion of property, plant and equipment |
— |
274 |
|||||
Proceeds from sale of property, plant and equipment |
2,209 |
225 |
|||||
Net cash used in investing activities |
(23,072 |
) |
(13,629 |
) |
|||
Cash flows from financing activities: |
|||||||
Payments of long-term debt |
(299,089 |
) |
(211,790 |
) |
|||
Payments under finance lease obligations |
(180 |
) |
(2,648 |
) |
|||
Proceeds from long-term debt |
341,000 |
243,500 |
|||||
Purchase of treasury units |
— |
(17 |
) |
||||
Payment of debt issuance costs |
(30 |
) |
(592 |
) |
|||
Excess purchase price over carrying value of acquired assets |
(1,285 |
) |
— |
||||
Cash distributions paid |
(595 |
) |
(593 |
) |
|||
Net cash provided by financing activities |
39,821 |
27,860 |
|||||
Net increase (decrease) in cash |
(7 |
) |
1,825 |
||||
Cash at beginning of period |
52 |
4,958 |
|||||
Cash at end of period |
$ |
45 |
$ |
6,783 |
|||
Non-cash additions to property, plant and equipment |
$ |
2,240 |
$ |
749 |
|||
|
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, 2022 and 2021 |
||||||||||||||
Three Months Ended September 30, |
||||||||||||||
2022 |
2021 |
Variance |
Percent Change |
|||||||||||
(In thousands, except BBL per day) |
||||||||||||||
Revenues: |
||||||||||||||
Services |
$ |
21,578 |
$ |
20,628 |
$ |
950 |
5 |
% |
||||||
Products |
40,571 |
30,598 |
9,973 |
33 |
% |
|||||||||
Total revenues |
62,149 |
51,226 |
10,923 |
21 |
% |
|||||||||
Cost of products sold |
32,998 |
24,618 |
8,380 |
34 |
% |
|||||||||
Operating expenses |
15,232 |
13,789 |
1,443 |
10 |
% |
|||||||||
Selling, general and administrative expenses |
1,596 |
1,528 |
68 |
4 |
% |
|||||||||
Depreciation and amortization |
6,747 |
7,049 |
(302 |
) |
(4 |
) % |
||||||||
5,576 |
4,242 |
1,334 |
31 |
% |
||||||||||
Other operating income, net |
— |
11 |
(11 |
) |
(100 |
) % |
||||||||
Gain on involuntary conversion of property, plant and equipment |
— |
186 |
(186 |
) |
(100 |
) % |
||||||||
Operating income |
$ |
5,576 |
$ |
4,439 |
$ |
1,137 |
26 |
% |
||||||
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, 2022 and 2021 |
||||||||||||||
Nine Months Ended September 30, |
||||||||||||||
2022 |
2021 |
Variance |
Percent Change |
|||||||||||
(In thousands, except BBL per day) |
||||||||||||||
Revenues: |
||||||||||||||
Services |
$ |
64,724 |
$ |
60,945 |
$ |
3,779 |
6 |
% |
||||||
Products |
110,218 |
75,639 |
34,579 |
46 |
% |
|||||||||
Total revenues |
174,942 |
136,584 |
38,358 |
28 |
% |
|||||||||
Cost of products sold |
89,150 |
60,318 |
28,832 |
48 |
% |
|||||||||
Operating expenses |
44,069 |
39,246 |
4,823 |
12 |
% |
|||||||||
Selling, general and administrative expenses |
4,961 |
4,495 |
466 |
10 |
% |
|||||||||
Depreciation and amortization |
22,084 |
21,150 |
934 |
4 |
% |
|||||||||
14,678 |
11,375 |
3,303 |
29 |
% |
||||||||||
Other operating income (loss), net |
(35 |
) |
6 |
(41 |
) |
(683 |
) % |
|||||||
Gain on involuntary conversion of property, plant and equipment |
— |
186 |
(186 |
) |
(100 |
) % |
||||||||
Operating income |
$ |
14,643 |
$ |
11,567 |
$ |
3,076 |
27 |
% |
||||||
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, 2022 and 2021 |
||||||||||||||
Three Months Ended September 30, |
||||||||||||||
2022 |
2021 |
Variance |
Percent Change |
|||||||||||
(In thousands) |
||||||||||||||
Revenues |
$ |
63,514 |
$ |
42,568 |
$ |
20,946 |
49 |
% |
||||||
Operating expenses |
46,499 |
33,053 |
13,446 |
41 |
% |
|||||||||
Selling, general and administrative expenses |
1,962 |
1,920 |
42 |
2 |
% |
|||||||||
Depreciation and amortization |
3,598 |
3,710 |
(112 |
) |
(3 |
) % |
||||||||
11,455 |
3,885 |
7,570 |
195 |
% |
||||||||||
Other operating income, net |
618 |
42 |
576 |
1,371 |
% |
|||||||||
Operating income |
$ |
12,073 |
$ |
3,927 |
$ |
8,146 |
207 |
% |
||||||
|
Comparative Results of Operations for the Nine Months Ended September 30, 2022 and 2021 |
||||||||||||||
Nine Months Ended September 30, |
||||||||||||||
2022 |
2021 |
Variance |
Percent Change |
|||||||||||
(In thousands) |
||||||||||||||
Revenues |
$ |
176,313 |
$ |
114,886 |
$ |
61,427 |
53 |
% |
||||||
Operating expenses |
130,229 |
94,042 |
36,187 |
38 |
% |
|||||||||
Selling, general and administrative expenses |
5,920 |
5,578 |
342 |
6 |
% |
|||||||||
Depreciation and amortization |
10,761 |
12,039 |
(1,278 |
) |
(11 |
) % |
||||||||
$ |
29,403 |
$ |
3,227 |
$ |
26,176 |
811 |
% |
|||||||
Other operating income, net |
901 |
59 |
842 |
1,427 |
% |
|||||||||
Operating income |
$ |
30,304 |
$ |
3,286 |
$ |
27,018 |
822 |
% |
||||||
|
Sulfur Services Segment |
||||||||||||||
Comparative Results of Operations for the Three Months Ended September 30, 2022 and 2021 |
||||||||||||||
Three Months Ended September 30, |
||||||||||||||
2022 |
2021 |
Variance |
Percent Change |
|||||||||||
(In thousands) |
||||||||||||||
Revenues: |
||||||||||||||
Services |
$ |
3,085 |
$ |
2,950 |
$ |
135 |
5 |
% |
||||||
Products |
25,783 |
27,887 |
(2,104 |
) |
(8 |
) % |
||||||||
Total revenues |
28,868 |
30,837 |
(1,969 |
) |
(6 |
) % |
||||||||
Cost of products sold |
27,201 |
21,799 |
5,402 |
25 |
% |
|||||||||
Operating expenses |
3,978 |
2,849 |
1,129 |
40 |
% |
|||||||||
Selling, general and administrative expenses |
1,509 |
1,321 |
188 |
14 |
% |
|||||||||
Depreciation and amortization |
2,786 |
2,594 |
192 |
7 |
% |
|||||||||
(6,606 |
) |
2,274 |
(8,880 |
) |
(391 |
) % |
||||||||
Other operating income, net |
(70 |
) |
8 |
(78 |
) |
(975 |
) % |
|||||||
Operating income |
$ |
(6,676 |
) |
$ |
2,282 |
$ |
(8,958 |
) |
(393 |
) % |
||||
Sulfur (long tons) |
95 |
145 |
(50 |
) |
(34 |
) % |
||||||||
Fertilizer (long tons) |
24 |
57 |
(33 |
) |
(58 |
) % |
||||||||
Total sulfur services volumes (long tons) |
119 |
202 |
(83 |
) |
(41 |
) % |
||||||||
Comparative Results of Operations for the Nine Months Ended September 30, 2022 and 2021 |
||||||||||||||
Nine Months Ended September 30, |
||||||||||||||
2022 |
2021 |
Variance |
Percent Change |
|||||||||||
(In thousands) |
||||||||||||||
Revenues: |
||||||||||||||
Services |
$ |
9,253 |
$ |
8,849 |
$ |
404 |
5 |
% |
||||||
Products |
135,691 |
95,109 |
40,582 |
43 |
% |
|||||||||
Total revenues |
144,944 |
103,958 |
40,986 |
39 |
% |
|||||||||
Cost of products sold |
105,640 |
69,619 |
36,021 |
52 |
% |
|||||||||
Operating expenses |
11,233 |
7,662 |
3,571 |
47 |
% |
|||||||||
Selling, general and administrative expenses |
4,550 |
3,777 |
773 |
20 |
% |
|||||||||
Depreciation and amortization |
8,377 |
7,882 |
495 |
6 |
% |
|||||||||
15,144 |
15,018 |
126 |
1 |
% |
||||||||||
Other operating income (loss), net |
(34 |
) |
14 |
(48 |
) |
(343 |
) % |
|||||||
Operating income |
$ |
15,110 |
$ |
15,032 |
$ |
78 |
1 |
% |
||||||
Sulfur (long tons) |
327 |
364 |
(37 |
) |
(10 |
) % |
||||||||
Fertilizer (long tons) |
170 |
236 |
(66 |
) |
(28 |
) % |
||||||||
Total sulfur services volumes (long tons) |
497 |
600 |
(103 |
) |
(17 |
) % |
||||||||
|
Natural Gas Liquids Segment |
||||||||||||||
Comparative Results of Operations for the Three Months Ended September 30, 2022 and 2021 |
||||||||||||||
Three Months Ended September 30, |
||||||||||||||
2022 |
2021 |
Variance |
Percent Change |
|||||||||||
(In thousands) |
||||||||||||||
Products revenues |
$ |
80,891 |
$ |
91,764 |
$ |
(10,873 |
) |
(12 |
) % |
|||||
Cost of products sold |
97,322 |
87,551 |
9,771 |
11 |
% |
|||||||||
Operating expenses |
1,210 |
1,088 |
122 |
11 |
% |
|||||||||
Selling, general and administrative expenses |
968 |
954 |
14 |
1 |
% |
|||||||||
Depreciation and amortization |
590 |
592 |
(2 |
) |
— |
% |
||||||||
(19,199 |
) |
1,579 |
(20,778 |
) |
(1,316 |
) % |
||||||||
Other operating income, net |
242 |
— |
242 |
|||||||||||
Operating income (loss) |
$ |
(18,957 |
) |
$ |
1,579 |
$ |
(20,536 |
) |
(1,301 |
) % |
||||
NGL sales volumes (Bbls) |
1,180 |
1,435 |
(255 |
) |
(18 |
) % |
||||||||
|
Comparative Results of Operations for the Nine Months Ended September 30, 2022 and 2021 |
||||||||||||||
Nine Months Ended September 30, |
||||||||||||||
2022 |
2021 |
Variance |
Percent Change |
|||||||||||
(In thousands) |
||||||||||||||
Products revenues |
$ |
299,037 |
$ |
257,081 |
$ |
41,956 |
16 |
% |
||||||
Cost of products sold |
303,376 |
234,239 |
69,137 |
30 |
% |
|||||||||
Operating expenses |
3,397 |
3,144 |
253 |
8 |
% |
|||||||||
Selling, general and administrative expenses |
3,287 |
3,858 |
(571 |
) |
(15 |
) % |
||||||||
Depreciation and amortization |
1,785 |
1,791 |
(6 |
) |
— |
% |
||||||||
(12,808 |
) |
14,049 |
(26,857 |
) |
(191 |
) % |
||||||||
Other operating income (loss), net |
218 |
(689 |
) |
907 |
132 |
% |
||||||||
Operating income (loss) |
$ |
(12,590 |
) |
$ |
13,360 |
$ |
(25,950 |
) |
(194 |
) % |
||||
NGL sales volumes (Bbls) |
3,930 |
4,839 |
(909 |
) |
(19 |
) % |
||||||||
|
Unallocated Selling, General and Administrative Expenses |
|||||||||||||||||||||||||||||
Comparative Results of Operations for the Three and Nine Months Ended September 30, 2022 and 2021 |
|||||||||||||||||||||||||||||
Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||||||||||||||||||||||||
2022 |
2021 |
Variance |
Percent Change |
2022 |
2021 |
Variance |
Percent Change |
||||||||||||||||||||||
(In thousands) |
(In thousands) |
||||||||||||||||||||||||||||
Indirect selling, general and administrative expenses |
$ |
4,260 |
$ |
4,074 |
$ |
186 |
5 |
% |
$ |
12,772 |
$ |
11,773 |
$ |
999 |
8 |
% |
|||||||||||||
Non-GAAP Financial Measures
The following tables reconcile the non-GAAP financial measurements used by management to our most directly comparable GAAP measures for the three and nine months ended September 30, 2022 and 2021, which represents EBITDA, Adjusted EBITDA, Distributable Cash Flow, and Adjusted Free Cash Flow:
|
Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA |
|||||||||||||||
Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||||||||||
2022 |
2021 |
2022 |
2021 |
||||||||||||
(in thousands) |
(in thousands) |
||||||||||||||
Net loss |
$ |
(28,043 |
) |
$ |
(6,911 |
) |
$ |
(9,959 |
) |
$ |
(11,012 |
) |
|||
Adjustments: |
|||||||||||||||
Interest expense |
13,906 |
14,110 |
39,181 |
40,372 |
|||||||||||
Income tax expense |
1,891 |
954 |
5,469 |
2,111 |
|||||||||||
Depreciation and amortization |
13,721 |
13,945 |
43,007 |
42,862 |
|||||||||||
EBITDA |
1,475 |
22,098 |
77,698 |
74,333 |
|||||||||||
Adjustments: |
|||||||||||||||
(Gain) loss on disposition of property, plant and equipment |
(790 |
) |
(61 |
) |
(1,050 |
) |
610 |
||||||||
Gain on involuntary conversion of property, plant and equipment |
— |
(186 |
) |
— |
(186 |
) |
|||||||||
Unrealized mark-to-market on commodity derivatives |
— |
(412 |
) |
— |
(207 |
) |
|||||||||
Lower of cost or market and other non-cash adjustments |
18,084 |
— |
20,326 |
— |
|||||||||||
Unit-based compensation |
46 |
48 |
125 |
336 |
|||||||||||
Adjusted EBITDA |
$ |
18,815 |
$ |
21,487 |
$ |
97,099 |
$ |
74,886 |
|||||||
|
Reconciliation of Net Cash provided by Operating Activities to Adjusted EBITDA, Distributable Cash Flow, and Adjusted Free Cash Flow |
|||||||||||||||
Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||||||||||
2022 |
2021 |
2022 |
2021 |
||||||||||||
(in thousands) |
(in thousands) |
||||||||||||||
Net cash provided by operating activities |
$ |
(45,207 |
) |
$ |
(18,491 |
) |
$ |
(16,756 |
) |
$ |
(12,406 |
) |
|||
Interest expense 1 |
13,118 |
13,046 |
36,825 |
37,787 |
|||||||||||
Current income tax expense |
584 |
293 |
1,858 |
692 |
|||||||||||
Lower of cost or market and other non-cash adjustments |
18,084 |
— |
20,326 |
— |
|||||||||||
Commodity cash flow hedging gains reclassified to earnings |
167 |
— |
901 |
— |
|||||||||||
Net cash paid for closed commodity derivative positions included in AOCI |
— |
950 |
(85 |
) |
950 |
||||||||||
Changes in operating assets and liabilities which (provided) used cash: |
|||||||||||||||
Accounts and other receivables, inventories, and other current assets |
(5,651 |
) |
40,263 |
59,250 |
64,515 |
||||||||||
Trade, accounts and other payables, and other current liabilities |
38,691 |
(14,584 |
) |
(4,104 |
) |
(16,449 |
) |
||||||||
Other |
(971 |
) |
10 |
(1,116 |
) |
(203 |
) |
||||||||
Adjusted EBITDA |
18,815 |
21,487 |
97,099 |
74,886 |
|||||||||||
Adjustments: |
|||||||||||||||
Interest expense |
(13,906 |
) |
(14,110 |
) |
(39,181 |
) |
(40,372 |
) |
|||||||
Income tax expense |
(1,891 |
) |
(954 |
) |
(5,469 |
) |
(2,111 |
) |
|||||||
Deferred income taxes |
1,307 |
661 |
3,611 |
1,419 |
|||||||||||
Amortization of deferred debt issuance costs |
788 |
1,064 |
2,356 |
2,585 |
|||||||||||
Payments for plant turnaround costs |
(2,662 |
) |
(985 |
) |
(4,262 |
) |
(2,679 |
) |
|||||||
Maintenance capital expenditures |
(5,994 |
) |
(1,945 |
) |
(14,548 |
) |
(8,386 |
) |
|||||||
Distributable Cash Flow |
(3,543 |
) |
5,218 |
39,606 |
25,342 |
||||||||||
Principal payments under finance lease obligations |
(61 |
) |
(753 |
) |
(180 |
) |
(3,344 |
) |
|||||||
Expansion capital expenditures |
(926 |
) |
(671 |
) |
(5,482 |
) |
(2,648 |
) |
|||||||
Adjusted Free Cash Flow |
$ |
(4,530 |
) |
$ |
3,794 |
$ |
33,944 |
$ |
19,350 |
||||||
1 Net of amortization of debt issuance costs and discount, which are included in interest expense but not included in net cash provided by operating activities. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20221102005743/en/
Sharon Taylor - Vice President & Chief Financial Officer (877) 256-6644 investor.relations@mmlp.com
Source: Martin Midstream Partners L.P.