KILGORE, Texas--(BUSINESS WIRE)--Martin Midstream Partners L.P. (Nasdaq:MMLP) ("MMLP" or the "Partnership") today announced its financial results for the first quarter of 2022.
Bob Bondurant, President and Chief Executive Officer of Martin Midstream GP LLC, the general partner of the Partnership stated, “The Partnership experienced an exceptional quarter benefiting from increased refinery utilization and strong demand for our products and services. For the period, we generated $40.0 million in adjusted EBITDA which exceeded the high end of our first quarter guidance by approximately $10.0 million. During the quarter, we successfully managed supply chain challenges, labor availability and fluctuating commodity prices as the Russian invasion of Ukraine created global market instability. Looking forward, the outlook remains solid for our refinery services business model and as a result we are increasing our 2022 adjusted EBITDA guidance range to $110 - $120 million.
“On March 31 2022, the Partnership’s adjusted leverage ratio was 3.87 times compared to 4.19 times on December 31, 2021. For the past few years we have been focused on reducing leverage to enhance the balance sheet and return value to our unitholders. During that time, we have made significant progress toward our adjusted leverage goal of 3.75 times and believe the Partnership is in an excellent position as we look to improve our capital structure this year.”
FIRST QUARTER 2022 OPERATING RESULTS BY BUSINESS SEGMENT
TERMINALLING AND STORAGE (“T&S”)
T&S Operating Income for the three months ended March 31, 2022 and 2021 was $3.9 million and $3.4 million, respectively.
Adjusted segment EBITDA for T&S was $11.6 million and $10.6 million, for the three months ended March 31, 2022 and 2021, respectively, reflecting strong demand in our lubricant and specialty products divisions.
TRANSPORTATION
Transportation Operating Income for the three months ended March 31, 2022 was $7.0 million compared to an operating loss of $1.3 million for the three months ended March 31, 2021.
Adjusted segment EBITDA for Transportation was $10.5 million and $2.7 million for the three months ended March 31, 2022 and 2021, respectively, reflecting higher land transportation rates and load count counterbalanced by rising labor and operating costs, coupled with increased marine day rates and fleet utilization.
SULFUR SERVICES
Sulfur Services Operating Income for the three months ended March 31, 2022 and 2021 was $12.7 million and $6.4 million, respectively.
Adjusted segment EBITDA for Sulfur Services was $15.3 million and $9.2 million for the three months ended March 31, 2022 and 2021, respectively, reflecting strong demand for agricultural products.
NATURAL GAS LIQUIDS (“NGL”)
NGL Operating Income for the three months ended March 31, 2022 and 2021 was $6.0 million and $11.1 million, respectively.
Adjusted segment EBITDA for NGL was $6.6 million and $12.2 million for the three months ended March 31, 2022 and 2021, respectively, primarily reflecting a decrease in volumes as the first quarter of 2021 benefited from an increased seasonal demand.
UNALLOCATED SELLING, GENERAL AND ADMINISTRATIVE EXPENSE (“USGA”)
USGA expenses included in operating income for the three months ended March 31, 2022 and 2021 were $4.2 million and $3.9 million, respectively.
USGA expenses included in adjusted EBITDA for the three months ended March 31, 2022 and 2021 were $4.1 million and $3.7 million, respectively, primarily reflecting an increase in employee related expenses.
CAPITALIZATION
At March 31, 2022, the Partnership had $489 million of total debt outstanding, including $143 million drawn on its $275 million revolving credit facility, $54 million of senior secured 1.5 lien notes due 2024 and $292 million of senior secured second lien notes due 2025. At March 31, 2022, the Partnership had liquidity of approximately $107 million from available capacity under its revolving credit facility, an increase of $14 million from December 31, 2021. The Partnership’s adjusted leverage ratio, as calculated under the revolving credit facility, was 3.9 times and 4.2 times on March 31, 2022 and December 31, 2021, respectively. The Partnership was in compliance with all debt covenants as of March 31, 2022.
QUARTERLY CASH DISTRIBUTION
The Partnership has declared a quarterly cash distribution of $0.005 per unit for the quarter ended March 31, 2022. The distribution is payable on May 13, 2022 to common unitholders of record as of the close of business on May 6, 2022. The ex-dividend date for the cash distribution is May 5, 2022.
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.
RESULTS OF OPERATIONS
The Partnership had net income for the three months ended March 31, 2022 of $11.5 million, or $0.29 per limited partner unit. The Partnership had net income for the three months ended March 31, 2021 of $2.5 million, or $0.06 per limited partner unit. Adjusted EBITDA for the three months ended March 31, 2022 was $40.0 million compared to $30.9 million for the three months ended March 31, 2021. Net cash provided by operating activities for the three months ended March 31, 2022 was $28.4 million, compared to $3.9 million for the three months ended March 31, 2021. Distributable cash flow for the three months ended March 31, 2022 was $20.9 million compared to $12.8 million for the three months ended March 31, 2021.
Revenues for the three months ended March 31, 2022 were $279.2 million compared to $201.0 million for the three months ended March 31, 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 first quarter 2022 to the Partnership's adjusted EBITDA for the first quarter 2021.
2022 REVISED FINANCIAL GUIDANCE
The Partnership now expects to generate adjusted EBITDA between $110 million and $120 million for full-year 2022, compared to the original adjusted EBITDA guidance of between $100 million and $110 million. Revised guidance assumptions include a slight contraction in margins in the second half of the year as continued supply chain disruptions and rising inflation impact all segments with margin-based business lines. Offsetting these negative items, we expect demand for our land transportation assets to continue to increase, and anticipate increasing utilization in our inland marine division and the benefit of a full year term contract for our offshore unit.
Distributable cash flow is now expected to be between $37 million and $47 million for full-year 2022, compared to the original distributable cash flow guidance of between $31 million and $41 million. Adjusted free cash flow is now expected to be between $29 million and $39 million, compared to the original adjusted free cash flow guidance of between $23 million and $33 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, April 21, 2022
Time: 8:00 a.m. CT (please dial in by 7:55 a.m.)
Dial In #: (833) 900-2398
Conference ID: 8536096
Replay Dial In # (800) 770-2030 – Conference ID: 8536096
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
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 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 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) |
|||||||
|
March 31, 2022 |
|
December 31, 2021 |
||||
|
(Unaudited) |
|
(Audited) |
||||
Assets |
|
|
|
||||
Cash |
$ |
312 |
|
|
$ |
52 |
|
Accounts and other receivables, less allowance for doubtful accounts of $272 and $311, respectively |
|
84,063 |
|
|
|
84,199 |
|
Inventories |
|
54,278 |
|
|
|
62,120 |
|
Due from affiliates |
|
20,925 |
|
|
|
14,409 |
|
Fair value of derivatives |
|
175 |
|
|
|
— |
|
Other current assets |
|
10,403 |
|
|
|
12,908 |
|
Total current assets |
|
170,156 |
|
|
|
173,688 |
|
|
|
|
|
||||
Property, plant and equipment, at cost |
|
903,095 |
|
|
|
898,770 |
|
Accumulated depreciation |
|
(562,485 |
) |
|
|
(553,300 |
) |
Property, plant and equipment, net |
|
340,610 |
|
|
|
345,470 |
|
|
|
|
|
||||
Goodwill |
|
16,823 |
|
|
|
16,823 |
|
Right-of-use assets |
|
25,238 |
|
|
|
21,861 |
|
Deferred income taxes, net |
|
18,900 |
|
|
|
19,821 |
|
Other assets, net |
|
2,381 |
|
|
|
2,198 |
|
Total assets |
$ |
574,108 |
|
|
$ |
579,861 |
|
|
|
|
|
||||
Liabilities and Partners’ Capital (Deficit) |
|
|
|
||||
Current installments of long-term debt and finance lease obligations |
$ |
226 |
|
|
$ |
280 |
|
Trade and other accounts payable |
|
77,276 |
|
|
|
70,342 |
|
Product exchange payables |
|
685 |
|
|
|
1,406 |
|
Due to affiliates |
|
3,400 |
|
|
|
1,824 |
|
Income taxes payable |
|
925 |
|
|
|
385 |
|
Other accrued liabilities |
|
18,719 |
|
|
|
29,850 |
|
Total current liabilities |
|
101,231 |
|
|
|
104,087 |
|
|
|
|
|
||||
Long-term debt, net |
|
483,151 |
|
|
|
498,871 |
|
Finance lease obligations |
|
3 |
|
|
|
9 |
|
Operating lease liabilities |
|
18,841 |
|
|
|
15,704 |
|
Other long-term obligations |
|
8,861 |
|
|
|
9,227 |
|
Total liabilities |
|
612,087 |
|
|
|
627,898 |
|
|
|
|
|
||||
Commitments and contingencies |
|
|
|
||||
Partners’ capital (deficit) |
|
(37,539 |
) |
|
|
(48,853 |
) |
Accumulated other comprehensive income (loss) |
|
(440 |
) |
|
|
816 |
|
Total partners’ capital (deficit) |
|
(37,979 |
) |
|
|
(48,037 |
) |
Total liabilities and partners' capital (deficit) |
$ |
574,108 |
|
|
$ |
579,861 |
|
MARTIN MIDSTREAM PARTNERS L.P. CONSOLIDATED AND CONDENSED STATEMENTS OF OPERATIONS (Unaudited) (Dollars in thousands, except per unit amounts) |
|||||||
|
Three Months Ended |
||||||
|
March 31, |
||||||
|
2022 |
|
2021 |
||||
Revenues: |
|
|
|
||||
Terminalling and storage * |
$ |
19,413 |
|
|
$ |
18,378 |
|
Transportation * |
|
46,710 |
|
|
|
29,815 |
|
Sulfur services |
|
3,084 |
|
|
|
2,950 |
|
Product sales: * |
|
|
|
||||
Natural gas liquids |
|
120,563 |
|
|
|
98,085 |
|
Sulfur services |
|
56,039 |
|
|
|
31,885 |
|
Terminalling and storage |
|
33,392 |
|
|
|
19,861 |
|
|
|
209,994 |
|
|
|
149,831 |
|
Total revenues |
|
279,201 |
|
|
|
200,974 |
|
|
|
|
|
||||
Costs and expenses: |
|
|
|
||||
Cost of products sold: (excluding depreciation and amortization) |
|
|
|
||||
Natural gas liquids * |
|
107,098 |
|
|
|
79,135 |
|
Sulfur services * |
|
37,785 |
|
|
|
21,214 |
|
Terminalling and storage * |
|
26,699 |
|
|
|
14,502 |
|
|
|
171,582 |
|
|
|
114,851 |
|
Expenses: |
|
|
|
||||
Operating expenses * |
|
56,495 |
|
|
|
44,634 |
|
Selling, general and administrative * |
|
11,203 |
|
|
|
10,609 |
|
Depreciation and amortization |
|
14,486 |
|
|
|
14,434 |
|
Total costs and expenses |
|
253,766 |
|
|
|
184,528 |
|
|
|
|
|
||||
Other operating income (loss), net |
|
14 |
|
|
|
(760 |
) |
Operating income |
|
25,449 |
|
|
|
15,686 |
|
|
|
|
|
||||
Other income (expense): |
|
|
|
||||
Interest expense, net |
|
(12,429 |
) |
|
|
(12,953 |
) |
Other, net |
|
(1 |
) |
|
|
— |
|
Total other expense |
|
(12,430 |
) |
|
|
(12,953 |
) |
|
|
|
|
||||
Net income before taxes |
|
13,019 |
|
|
|
2,733 |
|
Income tax expense |
|
(1,541 |
) |
|
|
(222 |
) |
Net income |
|
11,478 |
|
|
|
2,511 |
|
Less general partner's interest in net income |
|
(229 |
) |
|
|
(50 |
) |
Less income allocable to unvested restricted units |
|
(30 |
) |
|
|
(10 |
) |
Limited partners' interest in net income |
$ |
11,219 |
|
|
$ |
2,451 |
|
|
|
|
|
||||
Net income per unit attributable to limited partners - basic |
$ |
0.29 |
|
|
$ |
0.06 |
|
Net income per unit attributable to limited partners - diluted |
$ |
0.29 |
|
|
$ |
0.06 |
|
Weighted average limited partner units - basic |
|
38,722,246 |
|
|
|
38,692,609 |
|
Weighted average limited partner units - diluted |
|
38,738,843 |
|
|
|
38,705,641 |
|
*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 |
||||
|
March 31, |
||||
|
2022 |
|
2021 |
||
Revenues:* |
|
|
|
||
Terminalling and storage |
$ |
16,204 |
|
$ |
15,306 |
Transportation |
|
6,288 |
|
|
4,010 |
Product Sales |
|
321 |
|
|
114 |
Costs and expenses:* |
|
|
|
||
Cost of products sold: (excluding depreciation and amortization) |
|
|
|
||
Sulfur services |
|
2,676 |
|
|
2,535 |
Terminalling and storage |
|
9,651 |
|
|
4,568 |
Expenses: |
|
|
|
||
Operating expenses |
|
21,380 |
|
|
18,368 |
Selling, general and administrative |
|
8,808 |
|
|
8,680 |
MARTIN MIDSTREAM PARTNERS L.P. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) (Dollars in thousands) |
||||||
|
Three Months Ended |
|||||
|
March 31, |
|||||
|
2022 |
|
2021 |
|||
|
|
|
|
|||
Net income |
$ |
11,478 |
|
|
$ |
2,511 |
Changes in fair values of commodity cash flow hedges |
|
(440 |
) |
|
|
— |
Comprehensive income |
$ |
11,038 |
|
|
$ |
2,511 |
MARTIN MIDSTREAM PARTNERS L.P. CONSOLIDATED AND CONDENSED STATEMENTS OF CAPITAL (DEFICIT) (Unaudited) (Dollars in thousands) |
||||||||||||||||||
|
Partners’ Capital (Deficit) |
|
|
|||||||||||||||
|
Common Limited |
|
General
|
|
Accumulated
|
|
|
|||||||||||
|
Units |
|
Amount |
|
|
|
Total |
|||||||||||
Balances - January 1, 2021 |
38,851,174 |
|
|
$ |
(48,776 |
) |
|
$ |
1,905 |
|
|
$ |
— |
|
|
$ |
(46,871 |
) |
Net income |
— |
|
|
|
2,461 |
|
|
|
50 |
|
|
|
— |
|
|
|
2,511 |
|
Issuance of restricted units |
42,168 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Forfeiture of restricted units |
(83,436 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Cash distributions |
— |
|
|
|
(193 |
) |
|
|
(4 |
) |
|
|
— |
|
|
|
(197 |
) |
Unit-based compensation |
— |
|
|
|
240 |
|
|
|
— |
|
|
|
— |
|
|
|
240 |
|
Purchase of treasury units |
(7,156 |
) |
|
|
(17 |
) |
|
|
— |
|
|
|
— |
|
|
|
(17 |
) |
Balances - March 31, 2021 |
38,802,750 |
|
|
$ |
(46,285 |
) |
|
$ |
1,951 |
|
|
$ |
— |
|
|
$ |
(44,334 |
) |
|
|
|
|
|
|
|
|
|
|
|||||||||
Balances - January 1, 2022 |
38,802,750 |
|
|
$ |
(50,741 |
) |
|
$ |
1,888 |
|
|
$ |
816 |
|
|
$ |
(48,037 |
) |
Net income |
— |
|
|
|
11,249 |
|
|
|
229 |
|
|
|
— |
|
|
|
11,478 |
|
Issuance of restricted units |
34,200 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Cash distributions |
— |
|
|
|
(194 |
) |
|
|
(4 |
) |
|
|
— |
|
|
|
(198 |
) |
Unit-based compensation |
— |
|
|
|
34 |
|
|
|
— |
|
|
|
— |
|
|
|
34 |
|
Changes in fair values of commodity cash flow hedges |
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1,256 |
) |
|
|
(1,256 |
) |
Balances - March 31, 2022 |
38,836,950 |
|
|
$ |
(39,652 |
) |
|
$ |
2,113 |
|
|
$ |
(440 |
) |
|
$ |
(37,979 |
) |
MARTIN MIDSTREAM PARTNERS L.P. CONSOLIDATED AND CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in thousands) |
|||||||
|
Three Months Ended |
||||||
|
March 31, |
||||||
|
2022 |
|
2021 |
||||
Cash flows from operating activities: |
|
|
|
||||
Net income |
$ |
11,478 |
|
|
$ |
2,511 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
||||
Depreciation and amortization |
|
14,486 |
|
|
|
14,434 |
|
Amortization of deferred debt issuance costs |
|
783 |
|
|
|
755 |
|
Deferred income tax expense |
|
921 |
|
|
|
75 |
|
(Gain) loss on sale of property, plant and equipment, net |
|
(14 |
) |
|
|
760 |
|
Derivative (income) loss |
|
(816 |
) |
|
|
1,436 |
|
Net cash paid for commodity derivatives |
|
(615 |
) |
|
|
(1,655 |
) |
Non cash unit-based compensation |
|
34 |
|
|
|
240 |
|
Change in current assets and liabilities, excluding effects of acquisitions and dispositions: |
|
|
|
||||
Accounts and other receivables |
|
136 |
|
|
|
(12,484 |
) |
Inventories |
|
7,842 |
|
|
|
15,070 |
|
Due from affiliates |
|
(6,516 |
) |
|
|
(7,406 |
) |
Other current assets |
|
2,434 |
|
|
|
633 |
|
Trade and other accounts payable |
|
8,650 |
|
|
|
1,984 |
|
Product exchange payables |
|
(721 |
) |
|
|
(136 |
) |
Due to affiliates |
|
1,576 |
|
|
|
779 |
|
Income taxes payable |
|
540 |
|
|
|
140 |
|
Other accrued liabilities |
|
(11,002 |
) |
|
|
(13,370 |
) |
Change in other non-current assets and liabilities |
|
(821 |
) |
|
|
88 |
|
Net cash provided by operating activities |
|
28,375 |
|
|
|
3,854 |
|
|
|
|
|
||||
Cash flows from investing activities: |
|
|
|
||||
Payments for property, plant and equipment |
|
(10,216 |
) |
|
|
(2,514 |
) |
Payments for plant turnaround costs |
|
(1,435 |
) |
|
|
(1,674 |
) |
Proceeds from sale of property, plant and equipment |
|
297 |
|
|
|
3 |
|
Net cash used in investing activities |
|
(11,354 |
) |
|
|
(4,185 |
) |
|
|
|
|
||||
Cash flows from financing activities: |
|
|
|
||||
Payments of long-term debt |
|
(120,000 |
) |
|
|
(87,790 |
) |
Payments under finance lease obligations |
|
(59 |
) |
|
|
(2,431 |
) |
Proceeds from long-term debt |
|
103,500 |
|
|
|
87,000 |
|
Purchase of treasury units |
|
— |
|
|
|
(17 |
) |
Payment of debt issuance costs |
|
(4 |
) |
|
|
(80 |
) |
Cash distributions paid |
|
(198 |
) |
|
|
(197 |
) |
Net cash used in financing activities |
|
(16,761 |
) |
|
|
(3,515 |
) |
|
|
|
|
||||
Net increase (decrease) in cash |
|
260 |
|
|
|
(3,846 |
) |
Cash at beginning of period |
|
52 |
|
|
|
4,958 |
|
Cash at end of period |
$ |
312 |
|
|
$ |
1,112 |
|
Non-cash additions to property, plant and equipment |
$ |
1,514 |
|
|
$ |
2,855 |
|
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 March 31, 2022 and 2021 |
|||||||||||||
|
Three Months Ended
|
|
Variance |
|
Percent Change |
||||||||
|
2022 |
|
2021 |
|
|
||||||||
|
(In thousands, except BBL per day) |
|
|
||||||||||
Revenues: |
|
|
|
|
|
|
|
||||||
Services |
$ |
20,956 |
|
|
$ |
19,959 |
|
|
$ |
997 |
|
5 |
% |
Products |
|
33,427 |
|
|
|
19,875 |
|
|
|
13,552 |
|
68 |
% |
Total revenues |
|
54,383 |
|
|
|
39,834 |
|
|
|
14,549 |
|
37 |
% |
|
|
|
|
|
|
|
|
||||||
Cost of products sold |
|
27,197 |
|
|
|
14,941 |
|
|
|
12,256 |
|
82 |
% |
Operating expenses |
|
13,912 |
|
|
|
12,793 |
|
|
|
1,119 |
|
9 |
% |
Selling, general and administrative expenses |
|
1,711 |
|
|
|
1,499 |
|
|
|
212 |
|
14 |
% |
Depreciation and amortization |
|
7,606 |
|
|
|
7,105 |
|
|
|
501 |
|
7 |
% |
|
|
3,957 |
|
|
|
3,496 |
|
|
|
461 |
|
13 |
% |
Other operating loss, net |
|
(43 |
) |
|
|
(66 |
) |
|
|
23 |
|
35 |
% |
Operating income |
$ |
3,914 |
|
|
$ |
3,430 |
|
|
$ |
484 |
|
14 |
% |
|
|
|
|
|
|
|
|
||||||
Shore-based throughput volumes (guaranteed minimum) (gallons) |
|
20,000 |
|
|
|
20,000 |
|
|
|
— |
|
— |
% |
Smackover refinery throughput volumes (guaranteed minimum) (BBL per day) |
|
6,500 |
|
|
|
6,500 |
|
|
|
— |
|
— |
% |
Transportation Segment |
|||||||||||||
Comparative Results of Operations for the Three Months Ended March 31, 2022 and 2021 |
|||||||||||||
|
Three Months Ended
|
|
Variance |
|
Percent Change |
||||||||
|
2022 |
|
2021 |
|
|
||||||||
|
(In thousands) |
|
|
||||||||||
Revenues |
$ |
51,897 |
|
$ |
33,969 |
|
|
$ |
17,928 |
|
|
53 |
% |
Operating expenses |
|
39,202 |
|
|
29,504 |
|
|
|
9,698 |
|
|
33 |
% |
Selling, general and administrative expenses |
|
2,170 |
|
|
1,800 |
|
|
|
370 |
|
|
21 |
% |
Depreciation and amortization |
|
3,573 |
|
|
3,998 |
|
|
|
(425 |
) |
|
(11 |
) % |
|
|
6,952 |
|
|
(1,333 |
) |
|
|
8,285 |
|
|
622 |
% |
Other operating income, net |
|
29 |
|
|
(4 |
) |
|
|
33 |
|
|
825 |
% |
Operating income |
$ |
6,981 |
|
$ |
(1,337 |
) |
|
$ |
8,318 |
|
|
622 |
% |
Sulfur Services Segment |
||||||||||||
Comparative Results of Operations for the Three Months Ended March 31, 2022 and 2021 |
||||||||||||
|
Three Months Ended
|
|
Variance |
|
Percent Change |
|||||||
|
2022 |
|
2021 |
|
|
|||||||
|
(In thousands) |
|
|
|||||||||
Revenues: |
|
|
|
|
|
|
|
|||||
Services |
$ |
3,084 |
|
$ |
2,950 |
|
$ |
134 |
|
|
5 |
% |
Products |
|
56,039 |
|
|
31,885 |
|
|
24,154 |
|
|
76 |
% |
Total revenues |
|
59,123 |
|
|
34,835 |
|
|
24,288 |
|
|
70 |
% |
|
|
|
|
|
|
|
|
|||||
Cost of products sold |
|
39,258 |
|
|
22,423 |
|
|
16,835 |
|
|
75 |
% |
Operating expenses |
|
3,028 |
|
|
2,009 |
|
|
1,019 |
|
|
51 |
% |
Selling, general and administrative expenses |
|
1,504 |
|
|
1,241 |
|
|
263 |
|
|
21 |
% |
Depreciation and amortization |
|
2,709 |
|
|
2,720 |
|
|
(11 |
) |
|
— |
% |
|
|
12,624 |
|
|
6,442 |
|
|
6,182 |
|
|
96 |
% |
Other operating income, net |
|
28 |
|
|
— |
|
|
28 |
|
|
|
|
Operating income |
$ |
12,652 |
|
$ |
6,442 |
|
$ |
6,210 |
|
|
96 |
% |
|
|
|
|
|
|
|
|
|||||
Sulfur (long tons) |
|
114 |
|
|
73 |
|
|
41 |
|
|
56 |
% |
Fertilizer (long tons) |
|
84 |
|
|
95 |
|
|
(11 |
) |
|
(12 |
) % |
Total sulfur services volumes (long tons) |
|
198 |
|
|
168 |
|
|
30 |
|
|
18 |
% |
Natural Gas Liquids Segment |
|||||||||||||
Comparative Results of Operations for the Three Months Ended March 31, 2022 and 2021 |
|||||||||||||
|
Three Months Ended
|
|
Variance |
|
Percent Change |
||||||||
|
2022 |
|
2021 |
|
|
||||||||
|
(In thousands) |
|
|
||||||||||
Products revenues |
$ |
120,566 |
|
$ |
98,085 |
|
|
$ |
22,481 |
|
|
23 |
% |
Cost of products sold |
|
111,156 |
|
|
82,512 |
|
|
|
28,644 |
|
|
35 |
% |
Operating expenses |
|
1,066 |
|
|
995 |
|
|
|
71 |
|
|
7 |
% |
Selling, general and administrative expenses |
|
1,722 |
|
|
2,207 |
|
|
|
(485 |
) |
|
(22 |
) % |
Depreciation and amortization |
|
598 |
|
|
611 |
|
|
|
(13 |
) |
|
(2 |
) % |
|
|
6,024 |
|
|
11,760 |
|
|
|
(5,736 |
) |
|
(49 |
) % |
Other operating loss, net |
|
— |
|
|
(690 |
) |
|
|
690 |
|
|
100 |
% |
Operating income |
$ |
6,024 |
|
$ |
11,070 |
|
|
$ |
(5,046 |
) |
|
(46 |
) % |
|
|
|
|
|
|
|
|
||||||
NGL sales volumes (Bbls) |
|
1,597 |
|
|
2,145 |
|
|
|
(548 |
) |
|
(26 |
) % |
Unallocated Selling, General and Administrative Expenses |
|||||||||||
Comparative Results of Operations for the Three and Three Months Ended March 31, 2022 and 2021 |
|||||||||||
|
Three Months Ended
|
|
Variance |
|
Percent Change |
||||||
|
2022 |
|
2021 |
|
|
||||||
|
(In thousands) |
|
|
||||||||
Indirect selling, general and administrative expenses |
$ |
4,122 |
|
$ |
3,919 |
|
$ |
203 |
|
5 |
% |
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 years ended March 31, 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 March 31, |
||||||
|
|||||||
|
2022 |
|
2021 |
||||
|
(in thousands) |
||||||
Net income |
$ |
11,478 |
|
|
$ |
2,511 |
|
Adjustments: |
|
|
|
||||
Interest expense |
|
12,429 |
|
|
|
12,953 |
|
Income tax expense |
|
1,541 |
|
|
|
222 |
|
Depreciation and amortization |
|
14,486 |
|
|
|
14,434 |
|
EBITDA |
|
39,934 |
|
|
|
30,120 |
|
Adjustments: |
|
|
|
||||
(Gain) loss on disposition of property, plant and equipment |
|
(14 |
) |
|
|
760 |
|
Unrealized mark-to-market on commodity derivatives |
|
— |
|
|
|
(219 |
) |
Unit-based compensation |
|
34 |
|
|
|
240 |
|
Adjusted EBITDA |
|
39,954 |
|
|
|
30,901 |
|
Reconciliation of Net Cash provided by Operating Activities to Adjusted EBITDA, Distributable Cash Flow, and Adjusted Free Cash Flow |
|||||||
|
Three Months Ended March 31, |
||||||
|
|||||||
|
2022 |
|
2021 |
||||
|
(in thousands) |
||||||
Net cash provided by operating activities |
$ |
28,375 |
|
|
$ |
3,854 |
|
Interest expense 1 |
|
11,646 |
|
|
|
12,198 |
|
Current income tax expense |
|
620 |
|
|
|
147 |
|
Commodity cash flow hedging gains reclassified to earnings |
|
816 |
|
|
|
— |
|
Net cash paid for closed commodity derivative positions included in AOCI |
|
615 |
|
|
|
— |
|
Changes in operating assets and liabilities which (provided) used cash: |
|
|
|
||||
Accounts and other receivables, inventories, and other current assets |
|
(3,896 |
) |
|
|
4,187 |
|
Trade, accounts and other payables, and other current liabilities |
|
957 |
|
|
|
10,603 |
|
Other |
|
821 |
|
|
|
(88 |
) |
Adjusted EBITDA |
|
39,954 |
|
|
|
30,901 |
|
Adjustments: |
|
|
|
||||
Interest expense |
|
(12,429 |
) |
|
|
(12,953 |
) |
Income tax expense |
|
(1,541 |
) |
|
|
(222 |
) |
Deferred income taxes |
|
921 |
|
|
|
75 |
|
Amortization of deferred debt issuance costs |
|
783 |
|
|
|
755 |
|
Payments for plant turnaround costs |
|
(1,435 |
) |
|
|
(1,674 |
) |
Maintenance capital expenditures |
|
(5,399 |
) |
|
|
(4,071 |
) |
Distributable Cash Flow |
|
20,854 |
|
|
|
12,811 |
|
Principal payments under finance lease obligations |
|
(59 |
) |
|
|
(2,431 |
) |
Expansion capital expenditures |
|
(3,101 |
) |
|
|
(830 |
) |
Adjusted Free Cash Flow |
$ |
17,694 |
|
|
$ |
9,550 |
|
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. |
|||||||