- Hurricane Harvey Impact Estimated at $6.0 Million
- Quarterly Distribution Coverage Ratio Meets Internal Forecast
- Year to Date Distribution Coverage Ratio of 1.04x and Trailing Twelve Months Coverage Ratio of 1.27x
KILGORE, Texas, Oct. 25, 2017 (GLOBE NEWSWIRE) -- Martin Midstream Partners L.P. (Nasdaq:MMLP) (the "Partnership") announced today its financial results for the quarter ended September 30, 2017.
Ruben Martin, President and Chief Executive Officer of Martin Midstream GP LLC, the general partner of the Partnership said, “For the third quarter ended September 30, 2017, the Partnership generated a distribution coverage ratio of 0.51 times, matching our internal forecast. Annually, the third quarter is our weakest, coinciding with seasonal troughs in the fertilizer and butane businesses. Although cash flow from operations was below our guidance levels, so too was maintenance capital expenditures offsetting the impact to distributable cash flow thus, meeting our estimate.
“Highlighting the third quarter was continued strength in our Cardinal Gas Storage division where interruptible services remained stronger than forecasted. Also, within the Natural Gas Services segment early season butane sales were above our expectations. This was offset by lower throughput revenue within our Specialty Terminals division and weaker asset utilization in our Marine Transportation segment.
“During the third quarter, maintenance capital spending was lower than anticipated at approximately $5.2 million. Accordingly, we are reducing our full year maintenance capital expenditure guidance to approximately $20 million. Some scheduled fourth quarter maintenance capital expenditures will likely be preceded in priority by Hurricane Harvey related repairs and maintenance. Generally speaking, the Partnership was fortunate to have weathered the impact of storm damage from Hurricane Harvey with only modest disruption. Of the utmost importance was the safety of our employees and their families and we were very fortunate on that front. Pertaining to the financial impact and condition of our assets, we estimate the storm will have an approximate $6.0 million negative impact to our business. This estimate includes total expenses to repair damaged assets affecting cash flow in the third quarter, fourth quarter and first quarter 2018 of $1.0 million, $3.5 million, and $0.4 million, respectively, in addition to the impact of business interruption of approximately $1.1 million in the third quarter 2017. Because we incurred storm damage at multiple locations, we will not be filing an insurance claim associated with these interruptions and repair expenditures. In essence, each location’s damage was in an amount below the deductible for that specific location.
“As expected during the third quarter, our debt level rose based on working capital increases of approximately $45 million in our Natural Gas Services segment primarily attributed to our butane inventory build. Based on current market conditions, we anticipate a strong butane sales season during the fourth quarter 2017 and first quarter 2018. Looking ahead, we should realize significant working capital debt reduction due to butane inventory depletion, reducing the Partnership’s leverage over the next two quarters.”
The Partnership had a net loss for the third quarter 2017 of $16.3 million, a loss of $0.42 per limited partner unit. This loss includes the effects of estimated hurricane repair costs of $4.9 million and the expense associated with the upward revision of asset retirement obligations of $5.5 million. The Partnership had a net loss for the third quarter 2016 of $0.9 million, a loss of $0.03 per limited partner unit. The Partnership's adjusted EBITDA for the third quarter 2017 was $27.1 million compared to adjusted EBITDA from for the third quarter 2016 of $33.3 million.
The Partnership had a net loss for the nine months ended September 30, 2017 of $1.7 million, a loss of $0.04 per limited partner unit. The Partnership had net income for the nine months ended September 30, 2016 of $13.8 million, or $0.16 per limited partner unit. The Partnership's adjusted EBITDA for the nine months ended September 30, 2017 was $106.9 million compared to adjusted EBITDA for the nine months ended September 30, 2016 of $124.2 million.
The Partnership's distributable cash flow for the third quarter 2017 was $9.9 million compared to distributable cash flow for the third quarter 2016 of $19.9 million.
The Partnership's distributable cash flow for the nine months ended September 30, 2017 was $59.8 million compared to distributable cash flow for the nine months ended September 30, 2016 of $77.9 million.
Revenues for the third quarter 2017 were $193.1 million compared to the third quarter 2016 of $174.5 million. Revenues for the nine months ended September 30, 2017 were $640.4 million compared to the nine months ended September 30, 2016 of $590.5 million.
Distributable cash flow, EBITDA and adjusted EBITDA are non-GAAP financial measures which are explained in greater detail below under the heading "Use of Non-GAAP Financial Information." The Partnership has also included below a table entitled "Reconciliation of EBITDA, Adjusted EBITDA, and Distributable Cash Flow" in order to show the components of these non-GAAP financial measures and their reconciliation to the most comparable GAAP measurement.
Included with this press release are the Partnership's consolidated and condensed financial statements as of and for the three and nine months ended September 30, 2017 and certain prior periods. These financial statements should be read in conjunction with the information contained in the Partnership's Quarterly Report on Form 10-Q, to be filed with the Securities and Exchange Commission on October 25, 2017.
An attachment accompanying this announcement is available at http://www.globenewswire.com/NewsRoom/AttachmentNg/0ff92a73-c811-4f59-8574-a85c689ef18c.
Investors' Conference Call
An investors’ conference call to review the third quarter results will be held on Thursday, October 26, 2017, at 8:00 a.m. Central Time. The conference call can be accessed by calling (877) 878-2695. An audio replay of the conference call will be available by calling (855) 859-2056 from 11:00 a.m. Central Time on October 26, 2017 through 10:59 p.m. Central Time on November 6, 2017. The access code for the conference call and the audio replay is Conference ID No. 98725323. The audio replay of the conference call will also be archived on Martin Midstream Partners’ website at www.martinmidstream.com.
About Martin Midstream Partners
The Partnership is a publicly traded limited partnership with a diverse set of operations focused primarily in the United States Gulf Coast region. The Partnership's primary business segments include: (1) terminalling, storage and packaging services for petroleum products and by-products; (2) natural gas services, including liquids transportation and distribution services and natural gas storage; (3) sulfur and sulfur-based products processing, manufacturing, marketing and distribution; and (4) marine transportation services for petroleum products and by-products.
Forward-Looking Statements
Statements about the Partnership's outlook and all other statements in this release other than historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements and all references to financial estimates rely on a number of assumptions concerning future events and are subject to a number of uncertainties and other factors, many of which are outside the Partnership's control, which could cause actual results to differ materially from such statements. While the Partnership believes that the assumptions concerning future events are reasonable, it cautions that there are inherent difficulties in anticipating or predicting certain important factors. A discussion of these factors, including risks and uncertainties, is set forth in the Partnership's annual and quarterly reports filed from time to time with the Securities and Exchange Commission. The Partnership disclaims any intention or obligation to revise any forward-looking statements, including financial estimates, whether as a result of new information, future events, or otherwise.
Use of Non-GAAP Financial Information
The Partnership's management uses a variety of financial and operational measurements other than its financial statements prepared in accordance with United States Generally Accepted Accounting Principles (“GAAP”) to analyze its performance. These include: (1) net income before interest expense, income tax expense, and depreciation and amortization (“EBITDA”), (2) adjusted EBITDA and (3) distributable cash flow. The Partnership's management views these measures as important performance measures of core profitability for its operations and the ability to generate and distribute cash flow, and as key components of its internal financial reporting. The Partnership's management believes investors benefit from having access to the same financial measures that management uses.
EBITDA and Adjusted EBITDA. Certain items excluded from EBITDA and adjusted EBITDA are significant components in understanding and assessing an entity's financial performance, such as cost of capital and historical costs of depreciable assets. The Partnership has included information concerning EBITDA and adjusted EBITDA because it provides investors and management with additional information to better understand the following: financial performance of the Partnership's assets without regard to financing methods, capital structure or historical cost basis; the Partnership's operating performance and return on capital as compared to those of other similarly situated entities; and the viability of acquisitions and capital expenditure projects. The Partnership's method of computing adjusted EBITDA may not be the same method used to compute similar measures reported by other entities. The economic substance behind the Partnership's use of adjusted EBITDA is to measure the ability of the Partnership's assets to generate cash sufficient to pay interest costs, support its indebtedness and make distributions to its unitholders.
Distributable Cash Flow. Distributable cash flow is a significant performance measure used by the Partnership's management and by external users of its financial statements, such as investors, commercial banks and research analysts, to compare basic cash flows generated by the Partnership to the cash distributions it expects to pay unitholders. Distributable cash flow is also an important financial measure for the Partnership's unitholders since it serves as an indicator of the Partnership's success in providing a cash return on investment. Specifically, this financial measure indicates to investors whether or not the Partnership is generating cash flow at a level that can sustain or support an increase in its quarterly distribution rates. Distributable cash flow is also a quantitative standard used throughout the investment community with respect to publicly-traded partnerships because the value of a unit of such an entity is generally determined by the unit's yield, which in turn is based on the amount of cash distributions the entity pays to a unitholder.
EBITDA, adjusted EBITDA and distributable cash flow should not be considered alternatives to, or more meaningful than, net income, cash flows from operating activities, or any other measure presented in accordance with GAAP. The Partnership's method of computing these measures may not be the same method used to compute similar measures reported by other entities.
Additional information concerning the Partnership is available on the Partnership's website at www.martinmidstream.com or by contacting:
Joe McCreery, IRC - Vice President - Finance & Head of Investor Relations
(903) 988-6425
| MARTIN MIDSTREAM PARTNERS L.P. | ||||||||
| CONSOLIDATED AND CONDENSED BALANCE SHEETS | ||||||||
| (Dollars in thousands) | ||||||||
| September 30, 2017 | December 31, 2016 | |||||||
| (Unaudited) | (Audited) | |||||||
| Assets | ||||||||
| Cash | $ | 15 | $ | 15 | ||||
| Accounts and other receivables, less allowance for doubtful accounts of $319 and $372, respectively | 64,127 | 80,508 | ||||||
| Product exchange receivables | 34 | 207 | ||||||
| Inventories | 130,618 | 82,631 | ||||||
| Due from affiliates | 13,484 | 11,567 | ||||||
| Fair value of derivatives | 133 | — | ||||||
| Other current assets | 3,703 | 3,296 | ||||||
| Assets held for sale | 13,764 | 15,779 | ||||||
| Total current assets | 225,878 | 194,003 | ||||||
| Property, plant and equipment, at cost | 1,248,093 | 1,224,277 | ||||||
| Accumulated depreciation | (408,426 | ) | (378,593 | ) | ||||
| Property, plant and equipment, net | 839,667 | 845,684 | ||||||
| Goodwill | 17,296 | 17,296 | ||||||
| Investment in WTLPG | 127,998 | 129,506 | ||||||
| Note receivable - affiliate | — | 15,000 | ||||||
| Other assets, net | 37,211 | 44,874 | ||||||
| Total assets | $ | 1,248,050 | $ | 1,246,363 | ||||
| Liabilities and Partners’ Capital | ||||||||
| Trade and other accounts payable | $ | 72,019 | $ | 70,249 | ||||
| Product exchange payables | 9,270 | 7,360 | ||||||
| Due to affiliates | 3,305 | 8,474 | ||||||
| Income taxes payable | 450 | 870 | ||||||
| Fair value of derivatives | — | 3,904 | ||||||
| Other accrued liabilities | 25,710 | 26,717 | ||||||
| Total current liabilities | 110,754 | 117,574 | ||||||
| Long-term debt, net | 829,991 | 808,107 | ||||||
| Other long-term obligations | 8,425 | 8,676 | ||||||
| Total liabilities | 949,170 | 934,357 | ||||||
| Commitments and contingencies (Note 17) | ||||||||
| Partners’ capital | 298,880 | 312,006 | ||||||
| Total partners’ capital | 298,880 | 312,006 | ||||||
| Total liabilities and partners' capital | $ | 1,248,050 | $ | 1,246,363 | ||||
These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in the Partnership's Quarterly Report on Form 10-Q to be filed with the Securities and Exchange Commission on October 25, 2017.
| MARTIN MIDSTREAM PARTNERS L.P. | ||||||||||||||||
| CONSOLIDATED AND CONDENSED STATEMENTS OF OPERATIONS | ||||||||||||||||
| (Dollars in thousands, except per unit amounts) | ||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
| Revenues: | ||||||||||||||||
| Terminalling and storage * | $ | 25,752 | $ | 30,770 | $ | 75,105 | $ | 93,565 | ||||||||
| Marine transportation * | 11,407 | 13,846 | 36,661 | 44,531 | ||||||||||||
| Natural gas services* | 14,253 | 14,618 | 43,756 | 46,118 | ||||||||||||
| Sulfur services | 2,850 | 2,700 | 8,550 | 8,100 | ||||||||||||
| Product sales: * | ||||||||||||||||
| Natural gas services | 83,831 | 57,378 | 284,154 | 207,368 | ||||||||||||
| Sulfur services | 24,174 | 26,396 | 95,728 | 105,459 | ||||||||||||
| Terminalling and storage | 30,861 | 28,829 | 96,421 | 85,349 | ||||||||||||
| 138,866 | 112,603 | 476,303 | 398,176 | |||||||||||||
| Total revenues | 193,128 | 174,537 | 640,375 | 590,490 | ||||||||||||
| Costs and expenses: | ||||||||||||||||
| Cost of products sold: (excluding depreciation and amortization) | ||||||||||||||||
| Natural gas services * | 77,368 | 50,658 | 255,745 | 184,781 | ||||||||||||
| Sulfur services * | 19,716 | 21,510 | 65,406 | 73,734 | ||||||||||||
| Terminalling and storage * | 25,852 | 23,540 | 80,312 | 70,306 | ||||||||||||
| 122,936 | 95,708 | 401,463 | 328,821 | |||||||||||||
| Expenses: | ||||||||||||||||
| Operating expenses * | 45,072 | 39,488 | 114,564 | 121,542 | ||||||||||||
| Selling, general and administrative * | 9,131 | 8,049 | 27,961 | 24,364 | ||||||||||||
| Loss on impairment of goodwill | — | — | — | 4,145 | ||||||||||||
| Depreciation and amortization | 20,286 | 22,129 | 65,948 | 66,266 | ||||||||||||
| Total costs and expenses | 197,425 | 165,374 | 609,936 | 545,138 | ||||||||||||
| Other operating income (loss) | (187 | ) | 13 | (327 | ) | (1,582 | ) | |||||||||
| Operating income (loss) | (4,484 | ) | 9,176 | 30,112 | 43,770 | |||||||||||
| Other income (expense): | ||||||||||||||||
| Equity in earnings of WTLPG | 789 | 1,120 | 2,547 | 3,602 | ||||||||||||
| Interest expense, net | (12,538 | ) | (11,779 | ) | (34,677 | ) | (34,046 | ) | ||||||||
| Other, net | 55 | 730 | 605 | 866 | ||||||||||||
| Total other expense | (11,694 | ) | (9,929 | ) | (31,525 | ) | (29,578 | ) | ||||||||
| Net income (loss) before taxes | (16,178 | ) | (753 | ) | (1,413 | ) | 14,192 | |||||||||
| Income tax expense | (108 | ) | (180 | ) | (301 | ) | (422 | ) | ||||||||
| Net income (loss) | (16,286 | ) | (933 | ) | (1,714 | ) | 13,770 | |||||||||
| Less general partner's interest in net income (loss) | 325 | 18 | 34 | (8,062 | ) | |||||||||||
| Less (income) loss allocable to unvested restricted units | 38 | 3 | — | (36 | ) | |||||||||||
| Limited partners' interest in net income (loss) | $ | (15,923 | ) | $ | (912 | ) | $ | (1,680 | ) | $ | 5,672 | |||||
| Net income (loss) per unit attributable to limited partners - basic | $ | (0.42 | ) | $ | (0.03 | ) | $ | (0.04 | ) | $ | 0.16 | |||||
| Net income (loss) per unit attributable to limited partners - diluted | $ | (0.42 | ) | $ | (0.03 | ) | $ | (0.04 | ) | $ | 0.16 | |||||
| Weighted average limited partner units - basic | 38,357 | 35,346 | 38,016 | 35,358 | ||||||||||||
| Weighted average limited partner units - diluted | 38,357 | 35,346 | 38,016 | 35,381 | ||||||||||||
These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in the Partnership's Quarterly Report on Form 10-Q to be filed with the Securities and Exchange Commission on October 25, 2017.
*Related Party Transactions Shown Below
| MARTIN MIDSTREAM PARTNERS L.P. | ||||||||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
| (Dollars in thousands, except per unit amounts) | ||||||||||||||||
| *Related Party Transactions Included Above | ||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
| Revenues:* | ||||||||||||||||
| Terminalling and storage | $ | 21,910 | $ | 20,649 | $ | 61,945 | $ | 62,197 | ||||||||
| Marine transportation | 4,098 | 4,861 | 12,610 | 17,308 | ||||||||||||
| Natural gas services | 4 | 132 | 122 | 574 | ||||||||||||
| Product Sales | 828 | 723 | 2,982 | 2,391 | ||||||||||||
| Costs and expenses:* | ||||||||||||||||
| Cost of products sold: (excluding depreciation and amortization) | ||||||||||||||||
| Natural gas services | 3,033 | 2,946 | 14,836 | 10,829 | ||||||||||||
| Sulfur services | 3,555 | 3,678 | 10,997 | 11,300 | ||||||||||||
| Terminalling and storage | 4,817 | 3,766 | 14,003 | 11,232 | ||||||||||||
| Expenses: | ||||||||||||||||
| Operating expenses | 15,858 | 17,810 | 48,686 | 53,255 | ||||||||||||
| Selling, general and administrative | 6,495 | 5,748 | 20,563 | 18,091 | ||||||||||||
These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in the Partnership's Quarterly Report on Form 10-Q to be filed with the Securities and Exchange Commission on October 25, 2017.
| MARTIN MIDSTREAM PARTNERS L.P. | |||||||||||||||
| CONSOLIDATED AND CONDENSED STATEMENTS OF CAPITAL | |||||||||||||||
| (Dollars in thousands) | |||||||||||||||
| Partners’ Capital | |||||||||||||||
| Common Limited | General Partner Amount | ||||||||||||||
| Units | Amount | Total | |||||||||||||
| Balances - January 1, 2016 | 35,456,612 | $ | 380,845 | $ | 13,034 | $ | 393,879 | ||||||||
| Net income | — | 5,708 | 8,062 | 13,770 | |||||||||||
| Issuance of common units, net | — | (28 | ) | — | (28 | ) | |||||||||
| Issuance of restricted units | 13,800 | — | — | — | |||||||||||
| Forfeiture of restricted units | (500 | ) | — | — | — | ||||||||||
| Cash distributions | — | (86,410 | ) | (13,680 | ) | (100,090 | ) | ||||||||
| Reimbursement of excess purchase price over carrying value of acquired assets | — | 3,000 | — | 3,000 | |||||||||||
| Unit-based compensation | — | 712 | — | 712 | |||||||||||
| Purchase of treasury units | (15,200 | ) | (330 | ) | — | (330 | ) | ||||||||
| Balances - September 30, 2016 | 35,454,712 | $ | 303,497 | $ | 7,416 | $ | 310,913 | ||||||||
| Balances - January 1, 2017 | 35,452,062 | $ | 304,594 | $ | 7,412 | $ | 312,006 | ||||||||
| Net loss | — | (1,680 | ) | (34 | ) | (1,714 | ) | ||||||||
| Issuance of common units, net of issuance related costs | 2,990,000 | 51,061 | — | 51,061 | |||||||||||
| Issuance of restricted units | 12,000 | — | — | — | |||||||||||
| Forfeiture of restricted units | (5,750 | ) | — | — | — | ||||||||||
| General partner contribution | — | — | 1,098 | 1,098 | |||||||||||
| Cash distributions | — | (56,177 | ) | (1,146 | ) | (57,323 | ) | ||||||||
| Unit-based compensation | — | 518 | — | 518 | |||||||||||
| Excess purchase price over carrying value of acquired assets | — | (7,887 | ) | — | (7,887 | ) | |||||||||
| Reimbursement of excess purchase price over carrying value of acquired assets | — | 1,125 | — | 1,125 | |||||||||||
| Purchase of treasury units | (200 | ) | (4 | ) | — | (4 | ) | ||||||||
| Balances - September 30, 2017 | 38,448,112 | $ | 291,550 | $ | 7,330 | $ | 298,880 | ||||||||
These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in the Partnership's Quarterly Report on Form 10-Q to be filed with the Securities and Exchange Commission on October 25, 2017.
| MARTIN MIDSTREAM PARTNERS L.P. | ||||||||
| CONSOLIDATED AND CONDENSED STATEMENTS OF CASH FLOWS | ||||||||
| (Dollars in thousands) | ||||||||
| Nine Months Ended | ||||||||
| September 30, | ||||||||
| 2017 | 2016 | |||||||
| Cash flows from operating activities: | ||||||||
| Net income (loss) | $ | (1,714 | ) | $ | 13,770 | |||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 65,948 | 66,266 | ||||||
| Amortization of deferred debt issuance costs | 2,170 | 2,965 | ||||||
| Amortization of premium on notes payable | (230 | ) | (230 | ) | ||||
| Loss on sale of property, plant and equipment | 327 | 1,582 | ||||||
| Loss on impairment of goodwill | — | 4,145 | ||||||
| Equity in earnings of WTLPG | (2,547 | ) | (3,602 | ) | ||||
| Derivative (income) loss | 2,392 | (1,867 | ) | |||||
| Net cash (paid) received for commodity derivatives | (6,429 | ) | 1,666 | |||||
| Net cash received for interest rate derivatives | — | 160 | ||||||
| Net premiums received on derivatives that settled during the year on interest rate swaption contracts | — | 630 | ||||||
| Unit-based compensation | 518 | 712 | ||||||
| Cash distributions from WTLPG | 4,200 | 6,100 | ||||||
| Change in current assets and liabilities, excluding effects of acquisitions and dispositions: | ||||||||
| Accounts and other receivables | 16,381 | 28,028 | ||||||
| Product exchange receivables | 173 | 891 | ||||||
| Inventories | (48,022 | ) | (31,606 | ) | ||||
| Due from affiliates | (1,917 | ) | 1,932 | |||||
| Other current assets | (411 | ) | (4,693 | ) | ||||
| Trade and other accounts payable | 2,222 | (15,782 | ) | |||||
| Product exchange payables | 1,910 | (2,544 | ) | |||||
| Due to affiliates | (5,169 | ) | (1,859 | ) | ||||
| Income taxes payable | (420 | ) | (435 | ) | ||||
| Other accrued liabilities | (3,766 | ) | (3,729 | ) | ||||
| Change in other non-current assets and liabilities | 1,941 | (765 | ) | |||||
| Net cash provided by operating activities | 27,557 | 61,735 | ||||||
| Cash flows from investing activities: | ||||||||
| Payments for property, plant and equipment | (30,014 | ) | (31,884 | ) | ||||
| Acquisitions | (19,533 | ) | — | |||||
| Acquisition of intangible assets | — | (2,150 | ) | |||||
| Payments for plant turnaround costs | (1,583 | ) | (1,614 | ) | ||||
| Proceeds from sale of property, plant and equipment | 1,604 | 2,174 | ||||||
| Proceeds from involuntary conversion of property, plant and equipment | — | 23,400 | ||||||
| Proceeds from repayment of Note receivable - affiliate | 15,000 | — | ||||||
| Contributions to WTLPG | (145 | ) | — | |||||
| Other | (900 | ) | — | |||||
| Net cash used in investing activities | (35,571 | ) | (10,074 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Payments of long-term debt | (242,000 | ) | (219,700 | ) | ||||
| Proceeds from long-term debt | 262,000 | 270,700 | ||||||
| Proceeds from issuance of common units, net of issuance related costs | 51,061 | (28 | ) | |||||
| General partner contribution | 1,098 | — | ||||||
| Purchase of treasury units | (4 | ) | (330 | ) | ||||
| Payment of debt issuance costs | (56 | ) | (5,234 | ) | ||||
| Excess purchase price over carrying value of acquired assets | (7,887 | ) | — | |||||
| Reimbursement of excess purchase price over carrying value of acquired assets | 1,125 | 3,000 | ||||||
| Cash distributions paid | (57,323 | ) | (100,090 | ) | ||||
| Net cash provided by (used in) financing activities | 8,014 | (51,682 | ) | |||||
| Net increase (decrease) in cash | — | (21 | ) | |||||
| Cash at beginning of period | 15 | 31 | ||||||
| Cash at end of period | $ | 15 | $ | 10 | ||||
| Non-cash additions to property, plant and equipment | $ | 1,367 | $ | 1,068 | ||||
These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in the Partnership's Quarterly Report on Form 10-Q to be filed with the Securities and Exchange Commission on October 25, 2017.
| MARTIN MIDSTREAM PARTNERS L.P. | |||||||||||||||
| SEGMENT OPERATING INCOME | |||||||||||||||
| (Dollars and volumes in thousands, except BBL per day) | |||||||||||||||
| Terminalling and Storage Segment | |||||||||||||||
| Comparative Results of Operations for the Three Months Ended September 30, 2017 and 2016 | |||||||||||||||
| Three Months Ended September 30, | Variance | Percent Change | |||||||||||||
| 2017 | 2016 | ||||||||||||||
| (In thousands, except BBL per day) | |||||||||||||||
| Revenues: | |||||||||||||||
| Services | $ | 26,944 | $ | 32,114 | $ | (5,170 | ) | (16 | )% | ||||||
| Products | 30,861 | 28,829 | 2,032 | 7 | % | ||||||||||
| Total revenues | 57,805 | 60,943 | (3,138 | ) | (5 | )% | |||||||||
| Cost of products sold | 26,451 | 24,118 | 2,333 | 10 | % | ||||||||||
| Operating expenses | 25,762 | 18,299 | 7,463 | 41 | % | ||||||||||
| Selling, general and administrative expenses | 1,668 | 1,439 | 229 | 16 | % | ||||||||||
| Depreciation and amortization | 10,192 | 10,828 | (636 | ) | (6 | )% | |||||||||
| (6,268 | ) | 6,259 | (12,527 | ) | (200 | )% | |||||||||
| Other operating income (loss) | (187 | ) | 254 | (441 | ) | (174 | )% | ||||||||
| Operating income (loss) | $ | (6,455 | ) | $ | 6,513 | $ | (12,968 | ) | (199 | )% | |||||
| Lubricant sales volumes (gallons) | 5,217 | 5,196 | 21 | — | % | ||||||||||
| Shore-based throughput volumes (guaranteed minimum) (gallons) | 41,666 | 50,000 | (8,334 | ) | (17 | )% | |||||||||
| Smackover refinery throughput volumes (guaranteed minimum BBL per day) | 6,500 | 6,500 | — | — | % | ||||||||||
| Corpus Christi crude terminal (BBL per day) | — | 65,116 | (65,116 | ) | (100 | )% | |||||||||
| Comparative Results of Operations for the Nine Months Ended September 30, 2017 and 2016 | |||||||||||||||
| Nine Months Ended September 30, | Variance | Percent Change | |||||||||||||
| 2017 | 2016 | ||||||||||||||
| (In thousands, except BBL per day) | |||||||||||||||
| Revenues: | |||||||||||||||
| Services | $ | 79,523 | $ | 97,663 | $ | (18,140 | ) | (19 | )% | ||||||
| Products | 96,421 | 85,351 | 11,070 | 13 | % | ||||||||||
| Total revenues | 175,944 | 183,014 | (7,070 | ) | (4 | )% | |||||||||
| Cost of products sold | 82,053 | 71,939 | 10,114 | 14 | % | ||||||||||
| Operating expenses | 56,488 | 54,740 | 1,748 | 3 | % | ||||||||||
| Selling, general and administrative expenses | 4,437 | 3,546 | 891 | 25 | % | ||||||||||
| Depreciation and amortization | 35,996 | 30,904 | 5,092 | 16 | % | ||||||||||
| (3,030 | ) | 21,885 | (24,915 | ) | (114 | )% | |||||||||
| Other operating income (loss) | (190 | ) | 354 | (544 | ) | (154 | )% | ||||||||
| Operating income (loss) | $ | (3,220 | ) | $ | 22,239 | $ | (25,459 | ) | (114 | )% | |||||
| Lubricant sales volumes (gallons) | 15,912 | 15,536 | 376 | 2 | % | ||||||||||
| Shore-based throughput volumes (guaranteed minimum) (gallons) | 124,998 | 150,000 | (25,002 | ) | (17 | )% | |||||||||
| Smackover refinery throughput volumes (guaranteed minimum) (BBL per day) | 6,500 | 6,500 | — | — | % | ||||||||||
| Corpus Christi crude terminal (BBL per day) | — | 77,394 | (77,394 | ) | (100 | )% | |||||||||
| Natural Gas Services Segment | |||||||||||||||
| Comparative Results of Operations for the Three Months Ended September 30, 2017 and 2016 | |||||||||||||||
| Three Months Ended September 30, | Variance | Percent Change | |||||||||||||
| 2017 | 2016 | ||||||||||||||
| (In thousands) | |||||||||||||||
| Revenues: | |||||||||||||||
| Services | $ | 14,253 | $ | 14,618 | $ | (365 | ) | (2 | )% | ||||||
| Products | 84,057 | 57,378 | 26,679 | 46 | % | ||||||||||
| Total revenues | 98,310 | 71,996 | 26,314 | 37 | % | ||||||||||
| Cost of products sold | 78,138 | 51,353 | 26,785 | 52 | % | ||||||||||
| Operating expenses | 5,528 | 5,822 | (294 | ) | (5 | )% | |||||||||
| Selling, general and administrative expenses | 1,889 | 1,309 | 580 | 44 | % | ||||||||||
| Depreciation and amortization | 6,274 | 7,050 | (776 | ) | (11 | )% | |||||||||
| 6,481 | 6,462 | 19 | — | % | |||||||||||
| Other operating income (loss) | 2 | (7 | ) | 9 | (129 | )% | |||||||||
| Operating income | $ | 6,483 | $ | 6,455 | $ | 28 | — | % | |||||||
| Distributions from WTLPG | $ | 1,700 | $ | 1,800 | $ | (100 | ) | (6 | )% | ||||||
| NGL sales volumes (Bbls) | 1,943 | 1,592 | 351 | 22 | % | ||||||||||
| Comparative Results of Operations for the Nine Months Ended September 30, 2017 and 2016 | |||||||||||||||
| Nine Months Ended September 30, | Variance | Percent Change | |||||||||||||
| 2017 | 2016 | ||||||||||||||
| (In thousands) | |||||||||||||||
| Revenues: | |||||||||||||||
| Services | $ | 43,756 | $ | 46,118 | $ | (2,362 | ) | (5 | )% | ||||||
| Products | 284,380 | 207,368 | 77,012 | 37 | % | ||||||||||
| Total revenues | 328,136 | 253,486 | 74,650 | 29 | % | ||||||||||
| Cost of products sold | 258,444 | 186,934 | 71,510 | 38 | % | ||||||||||
| Operating expenses | 16,753 | 17,479 | (726 | ) | (4 | )% | |||||||||
| Selling, general and administrative expenses | 7,055 | 5,420 | 1,635 | 30 | % | ||||||||||
| Depreciation and amortization | 18,640 | 21,007 | (2,367 | ) | (11 | )% | |||||||||
| 27,244 | 22,646 | 4,598 | 20 | % | |||||||||||
| Other operating income (loss) | 7 | (103 | ) | 110 | (107 | )% | |||||||||
| Operating income | $ | 27,251 | $ | 22,543 | $ | 4,708 | 21 | % | |||||||
| Distributions from WTLPG | $ | 4,200 | $ | 6,100 | $ | (1,900 | ) | (31 | )% | ||||||
| NGL sales volumes (Bbls) | 6,547 | 6,520 | 27 | — | % | ||||||||||
| MARTIN MIDSTREAM PARTNERS L.P. | |||||||||||||||
| SEGMENT OPERATING INCOME | |||||||||||||||
| (Dollars and volumes in thousands, except BBL per day) | |||||||||||||||
| Sulfur Services Segment | |||||||||||||||
| Comparative Results of Operations for the Three Months Ended September 30, 2017 and 2016 | |||||||||||||||
| Three Months Ended September 30, | Variance | Percent Change | |||||||||||||
| 2017 | 2016 | ||||||||||||||
| (In thousands) | |||||||||||||||
| Revenues: | |||||||||||||||
| Services | $ | 2,850 | $ | 2,700 | $ | 150 | 6 | % | |||||||
| Products | 24,174 | 26,396 | (2,222 | ) | (8 | )% | |||||||||
| Total revenues | 27,024 | 29,096 | (2,072 | ) | (7 | )% | |||||||||
| Cost of products sold | 19,807 | 21,601 | (1,794 | ) | (8 | )% | |||||||||
| Operating expenses | 3,557 | 4,089 | (532 | ) | (13 | )% | |||||||||
| Selling, general and administrative expenses | 1,071 | 946 | 125 | 13 | % | ||||||||||
| Depreciation and amortization | 2,020 | 1,997 | 23 | 1 | % | ||||||||||
| 569 | 463 | 106 | 23 | % | |||||||||||
| Other operating loss | (2 | ) | (234 | ) | 232 | (99 | )% | ||||||||
| Operating income | $ | 567 | $ | 229 | $ | 338 | 148 | % | |||||||
| Sulfur (long tons) | 198 | 241 | (43 | ) | (18 | )% | |||||||||
| Fertilizer (long tons) | 52 | 47 | 5 | 11 | % | ||||||||||
| Total sulfur services volumes (long tons) | 250 | 288 | (38 | ) | (13 | )% | |||||||||
| Comparative Results of Operations for the Nine Months Ended September 30, 2017 and 2016 | |||||||||||||||
| Nine Months Ended September 30, | Variance | Percent Change | |||||||||||||
| 2017 | 2016 | ||||||||||||||
| (In thousands) | |||||||||||||||
| Revenues: | |||||||||||||||
| Services | $ | 8,550 | $ | 8,100 | $ | 450 | 6 | % | |||||||
| Products | 95,728 | 105,459 | (9,731 | ) | (9 | )% | |||||||||
| Total revenues | 104,278 | 113,559 | (9,281 | ) | (8 | )% | |||||||||
| Cost of products sold | 65,678 | 74,006 | (8,328 | ) | (11 | )% | |||||||||
| Operating expenses | 10,221 | 10,288 | (67 | ) | (1 | )% | |||||||||
| Selling, general and administrative expenses | 3,099 | 2,834 | 265 | 9 | % | ||||||||||
| Depreciation and amortization | 6,083 | 5,978 | 105 | 2 | % | ||||||||||
| 19,197 | 20,453 | (1,256 | ) | (6 | )% | ||||||||||
| Other operating loss | (24 | ) | (266 | ) | 242 | (91 | )% | ||||||||
| Operating income | $ | 19,173 | $ | 20,187 | $ | (1,014 | ) | (5 | )% | ||||||
| Sulfur (long tons) | 607 | 579 | 28 | 5 | % | ||||||||||
| Fertilizer (long tons) | 217 | 217 | — | — | % | ||||||||||
| Total sulfur services volumes (long tons) | 824 | 796 | 28 | 4 | % | ||||||||||
| MARTIN MIDSTREAM PARTNERS L.P. | |||||||||||||||
| SEGMENT OPERATING INCOME | |||||||||||||||
| (Dollars and volumes in thousands, except BBL per day) | |||||||||||||||
| Marine Transportation Segment | |||||||||||||||
| Comparative Results of Operations for the Three Months Ended September 30, 2017 and 2016 | |||||||||||||||
| Three Months Ended September 30, | Variance | Percent Change | |||||||||||||
| 2017 | 2016 | ||||||||||||||
| (In thousands) | |||||||||||||||
| Revenues | $ | 12,400 | $ | 14,920 | $ | (2,520 | ) | (17 | )% | ||||||
| Operating expenses | 11,176 | 12,332 | (1,156 | ) | (9 | )% | |||||||||
| Selling, general and administrative expenses | 112 | 149 | (37 | ) | (25 | )% | |||||||||
| Depreciation and amortization | 1,800 | 2,254 | (454 | ) | (20 | )% | |||||||||
| Operating income (loss) | $ | (688 | ) | $ | 185 | $ | (873 | ) | (472 | )% | |||||
| Comparative Results of Operations for the Nine Months Ended September 30, 2017 and 2016 | |||||||||||||||
| Nine Months Ended September 30, | Variance | Percent Change | |||||||||||||
| 2017 | 2016 | ||||||||||||||
| (In thousands) | |||||||||||||||
| Revenues | $ | 38,958 | $ | 46,854 | $ | (7,896 | ) | (17 | )% | ||||||
| Operating expenses | 33,331 | 41,400 | (8,069 | ) | (19 | )% | |||||||||
| Selling, general and administrative expenses | 287 | (112 | ) | 399 | (356 | )% | |||||||||
| Loss on impairment of goodwill | — | 4,145 | (4,145 | ) | (100 | )% | |||||||||
| Depreciation and amortization | 5,229 | 8,377 | (3,148 | ) | (38 | )% | |||||||||
| $ | 111 | $ | (6,956 | ) | $ | 7,067 | (102 | )% | |||||||
| Other operating loss | (120 | ) | (1,567 | ) | 1,447 | (92 | )% | ||||||||
| Operating loss | $ | (9 | ) | $ | (8,523 | ) | $ | 8,514 | (100 | )% | |||||
Non-GAAP Financial Measures
The following table reconciles the non-GAAP financial measurements used by management to our most directly comparable GAAP measures for the three and nine months ended September 30, 2017 and 2016, which represents EBITDA, Adjusted EBITDA and Distributable Cash Flow.
| Reconciliation of EBITDA, Adjusted EBITDA, and Distributable Cash Flow | |||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||
| September 30, | September 30, | ||||||||||||||
| 2017 | 2016 | 2017 | 2016 | ||||||||||||
| (in thousands) | |||||||||||||||
| Net income (loss) | $ | (16,286 | ) | $ | (933 | ) | $ | (1,714 | ) | $ | 13,770 | ||||
| Adjustments: | |||||||||||||||
| Interest expense, net | 12,538 | 11,779 | 34,677 | 34,046 | |||||||||||
| Income tax expense | 108 | 180 | 301 | 422 | |||||||||||
| Depreciation and amortization | 20,286 | 22,129 | 65,948 | 66,266 | |||||||||||
| EBITDA | 16,646 | 33,155 | 99,212 | 114,504 | |||||||||||
| Adjustments: | |||||||||||||||
| Equity in earnings of WTLPG | (789 | ) | (1,120 | ) | (2,547 | ) | (3,602 | ) | |||||||
| (Gain) loss on sale of property, plant and equipment | 187 | (13 | ) | 327 | 1,582 | ||||||||||
| Loss on impairment of goodwill | — | — | — | 4,145 | |||||||||||
| Unrealized mark-to-market on commodity derivatives | — | (742 | ) | (4,037 | ) | 795 | |||||||||
| Hurricane damage repair accrual | 3,725 | — | 3,725 | — | |||||||||||
| Asset retirement obligation revision | 5,547 | — | 5,547 | — | |||||||||||
| Distributions from WTLPG | 1,700 | 1,800 | 4,200 | 6,100 | |||||||||||
| Unit-based compensation | 113 | 226 | 518 | 712 | |||||||||||
| Adjusted EBITDA | 27,129 | 33,306 | 106,945 | 124,236 | |||||||||||
| Adjustments: | |||||||||||||||
| Interest expense, net | (12,538 | ) | (11,779 | ) | (34,677 | ) | (34,046 | ) | |||||||
| Income tax expense | (108 | ) | (180 | ) | (301 | ) | (422 | ) | |||||||
| Amortization of debt premium | (77 | ) | (77 | ) | (230 | ) | (230 | ) | |||||||
| Amortization of deferred debt issuance costs | 725 | 718 | 2,170 | 2,965 | |||||||||||
| Non-cash mark-to-market on interest rate derivatives | — | — | — | (206 | ) | ||||||||||
| Payments for plant turnaround costs | 8 | (430 | ) | (1,583 | ) | (1,614 | ) | ||||||||
| Maintenance capital expenditures | (5,208 | ) | (1,609 | ) | (12,494 | ) | (12,818 | ) | |||||||
| Distributable Cash Flow | $ | 9,931 | $ | 19,949 | $ | 59,830 | $ | 77,865 | |||||||
