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Martin Midstream Partners Reports Third Quarter 2024 Financial Results and Declares Quarterly Cash Distribution

  • Reported net loss of $3.3 million and net income of $3.7 million for the three and nine months ended September 30, 2024, respectively
  • Adjusted EBITDA of $25.1 million and $87.3 million for the three and nine months ended September 30, 2024, respectively
  • Declares quarterly cash dividend of $0.005 per common unit
  • On October 3, 2024, entered into a definitive agreement and plan of merger with Martin Resource Management Corporation (“MRMC”) whereby MRMC would acquire all outstanding common units of the Partnership not already owned by MRMC and its subsidiaries

Martin Midstream Partners L.P. (Nasdaq: MMLP) (“MMLP” or the “Partnership”) today announced its financial results for the third quarter of 2024.

Bob Bondurant, President and Chief Executive Officer of Martin Midstream GP LLC, the general partner of the Partnership (the "General Partner"), stated, “I am pleased with the Partnership’s third quarter financial results of $25.1 million in adjusted EBITDA despite the slight miss of $1.3 million when compared to guidance targeting $26.4 million in adjusted EBITDA. During the quarter, the Partnership recorded an additional $1.4 million in expense, when compared to guidance, related to our long-term incentive plans which are tied to the fair market value of our common units. With the exception of the Specialty Products division, financial results were above guidance in all remaining segments when allowing for this additional cost.”

“As we look to the coming months leading up to the potential merger with MRMC, our team will remain dedicated to the execution of our long-term strategy; and focused on enhancing the value we provide to our customers, suppliers, and the communities where we live and where our businesses operate.”

THIRD QUARTER 2024 OPERATING RESULTS BY BUSINESS SEGMENT

 

 

Operating Income

(Loss) ($M)

 

Credit Adjusted

EBITDA ($M)

 

Adjusted EBITDA ($M)

 

Three Months Ended September 30,

 

2024

 

2023

 

2024

 

2023

 

2024

 

2023

 

(Amounts may not add or recalculate due to rounding)

Business Segment:

 

 

 

 

 

 

 

 

 

 

 

Terminalling and Storage

$

2.7

 

 

$

3.1

 

 

$

8.4

 

 

$

8.2

 

 

$

8.4

 

 

$

8.2

 

Transportation

 

8.6

 

 

 

6.7

 

 

 

11.6

 

 

 

9.5

 

 

 

11.6

 

 

 

9.5

 

Sulfur Services

 

1.3

 

 

 

2.7

 

 

 

4.2

 

 

 

5.4

 

 

 

4.2

 

 

 

5.4

 

Specialty Products

 

3.9

 

 

 

6.0

 

 

 

4.6

 

 

 

6.8

 

 

 

4.6

 

 

 

6.8

 

Unallocated Selling, General and Administrative Expense

 

(3.7

)

 

 

(3.8

)

 

 

(3.7

)

 

 

(3.8

)

 

 

(3.7

)

 

 

(3.8

)

 

$

12.7

 

 

$

14.7

 

 

$

25.1

 

 

$

26.2

 

 

$

25.1

 

 

$

26.2

 

Terminalling and storage adjusted EBITDA increased $0.2 million, primarily reflecting increased throughput at our shore based terminals, offset by increased employee-related expenses.

Transportation adjusted EBITDA increased $2.1 million, primarily reflecting higher day rates and utilization in our marine division.

Sulfur services adjusted EBITDA decreased $1.2 million, primarily reflecting decreased fertilizer volumes and margins, offset by higher margins in our sulfur division.

Specialty products adjusted EBITDA decreased $2.2 million, primarily reflecting decreased margins in our lubricants and grease divisions coupled with higher employee-related expenses.

Unallocated selling, general, and administrative expense decreased $0.1 million, reflecting reduced overhead expenses allocated from MRMC.

CAPITALIZATION

 

 

September 30,

2024

 

December 31,

2023

 

($ in millions)

Debt Outstanding:

 

 

 

Revolving Credit Facility, Due February 2027 1

$

86.5

 

$

42.5

Finance lease obligations

 

0.1

 

 

11.50% Senior Secured Notes, Due February 2028

 

400.0

 

 

400.0

Total Debt Outstanding:

$

486.6

 

$

442.5

 

 

 

 

Summary Credit Metrics:

 

 

 

Revolving Credit Facility - Total Capacity

$

150.0

 

$

175.0

Revolving Credit Facility - Available Liquidity

$

54.4

 

$

109.0

Total Adjusted Leverage Ratio 2

4.14x

 

3.75x

Senior Leverage Ratio 2

0.74x

 

0.36x

Interest Coverage Ratio 2

2.23x

 

2.19x

1 The Partnership was in compliance with all debt covenants as of September 30, 2024 and December 31, 2023.

2 As calculated under the Partnership's revolving credit facility.

RESULTS OF OPERATIONS SUMMARY

(in millions, except per unit amounts)

 

Period

 

Net

Income


(Loss)

 

Net

Income

(Loss)

Per Unit

 

Adjusted

EBITDA

 

Credit

Adjusted

EBITDA

 

Net Cash

Provided by

(Used in)

Operating

Activities

 

Distributable

Cash Flow

 

Revenues

 

Three Months Ended September 30, 2024

 

$

(3.3

)

 

$

(0.08

)

 

$

25.1

 

$

25.1

 

$

(15.8

)

 

$

2.4

 

$

170.9

Three Months Ended September 30, 2023

 

$

3.7

 

 

$

0.09

 

 

$

26.2

 

$

26.2

 

$

7.3

 

 

$

5.0

 

$

176.7

Reconciliation of Net Income (Loss) to Adjusted EBITDA and Credit Adjusted EBITDA

(in millions)

 

Transportation

 

Terminalling

& Storage

 

Sulfur

Services

 

Specialty

Products

 

SG&A

 

Interest

Expense

 

3Q 2024

Actual

Net income (loss)

 

$

8.6

 

 

$

2.7

 

$

1.3

 

$

3.9

 

 

$

(5.1

)

 

$

(14.6

)

 

$

(3.3

)

Interest expense add back

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

14.6

 

 

 

14.6

 

Income tax expense

 

 

 

 

 

 

 

 

 

 

 

 

1.4

 

 

 

 

 

 

1.4

 

Operating Income (loss)

 

 

8.6

 

 

 

2.7

 

 

1.3

 

 

3.9

 

 

 

(3.7

)

 

 

 

 

 

12.7

 

Depreciation and amortization

 

 

3.2

 

 

 

5.7

 

 

2.9

 

 

0.8

 

 

 

 

 

 

 

 

 

12.6

 

Gain on sale or disposition of property, plant, and equipment

 

 

(0.1

)

 

 

 

 

 

 

(0.1

)

 

 

 

 

 

 

 

 

(0.2

)

Unit-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

 

11.6

 

 

 

8.4

 

 

4.2

 

 

4.6

 

 

 

(3.7

)

 

 

 

 

 

25.1

 

Less: net income (loss) associated with butane optimization business

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Plus: lower of cost or net realizable value and other non-cash adjustments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Credit Adjusted EBITDA

 

$

11.6

 

 

$

8.4

 

$

4.2

 

$

4.6

 

 

$

(3.7

)

 

$

 

 

$

25.1

 

EBITDA, adjusted EBITDA, Credit 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 tables entitled "Reconciliation of Net Income (Loss) to EBITDA, Adjusted EBITDA, and Credit Adjusted EBITDA” and “Reconciliation of Net Cash Provided by Operating Activities to Adjusted EBITDA, Credit 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 2024 to the Partnership's adjusted EBITDA guidance for the third quarter 2024.

QUARTERLY CASH DISTRIBUTION

The Partnership has declared a quarterly cash distribution of $0.005 per unit for the quarter ended September 30, 2024. The distribution is payable on November 14, 2024, to common unitholders of record as of the close of business on November 7, 2024. The ex-dividend date for the cash distribution is November 7, 2024.

Qualified Notice to Nominees

This release is intended to serve as qualified notice under Treasury Regulation Section 1.1446-4(b)(4) and (d). Brokers and nominees should treat one hundred percent (100%) of MMLP’s distributions to non-U.S. investors as being attributable to income that is effectively connected with a United States trade or business. Accordingly, MMLP’s distributions to non-U.S. investors are subject to federal income tax withholding at the highest applicable effective tax rate. For purposes of Treasury Regulation section 1.1446(f)-4(c)(2)(iii), brokers and nominees should treat one hundred percent (100%) of the distributions as being in excess of cumulative net income for purposes of determining the amount to withhold. Nominees, and not Martin Midstream Partners L.P., are treated as withholding agents responsible for any necessary withholding on amounts received by them on behalf of foreign investors.

MERGER AGREEMENT WITH MARTIN RESOURCE MANAGEMENT CORPORATION

On October 3, 2024, the Partnership announced that it has entered into a definitive agreement and plan of merger (“Merger Agreement”) pursuant to which MRMC would acquire all of the outstanding common units of MMLP not already owned by MRMC and its subsidiaries (the “Public Common Units”). The Merger Agreement follows the offer made by MRMC in May 2024 to acquire the Public Common Units.

Investors' Conference Call

Date: Thursday, October 17, 2024

Time: 8:00 a.m. CT (please dial in by 7:55 a.m.)

Dial In #: (800) 715-9871

Conference ID: 8536096

Replay Dial In # (800) 770-2030 – Conference ID: 8536096

A webcast of the conference call along with the Third Quarter 2024 Earnings Summary will also be available by visiting the Events and Presentations section under Investor Relations on our website at www.MMLP.com.

About Martin Midstream Partners

Martin Midstream Partners L.P., headquartered in Kilgore, Texas, is a publicly traded limited partnership with a diverse set of operations focused primarily in the Gulf Coast region of the United States. MMLP’s primary business lines include: (1) terminalling, processing, and storage 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) marketing, distribution, and transportation services for natural gas liquids and blending and packaging services for specialty lubricants and grease. To learn more, visit www.MMLP.com. Follow Martin Midstream Partners L.P. on LinkedIn, Facebook, and X (formerly known as Twitter).

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 effects of the continued volatility of commodity prices and the related macroeconomic and political environment, (ii) the ability of the parties to consummate the transactions contemplated by the Merger Agreement in the anticipated timeframe or at all, including MRMC’s ability to fund the aggregate merger consideration; risks related to the satisfaction or waiver of the conditions to closing the transaction in the anticipated timeframe or at all; risks related to obtaining the requisite regulatory approval and Partnership unitholder approval; disruption from the transaction making it more difficult to maintain business and operational relationships; significant transaction costs associated with the transaction; and the risk of litigation and/or regulatory actions related to the transaction, (iii) uncertainties relating to the Partnership’s future cash flows and operations, (iv) the Partnership’s ability to pay future distributions, (v) future market conditions, (vi) current and future governmental regulation, (vii) future taxation, and (viii) 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 management in assessing our business, we use the following non-GAAP financial measures: earnings before interest, taxes, and depreciation and amortization ("EBITDA"), adjusted EBITDA (as defined below), Credit 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"). Our management uses a variety of financial and operational measurements other than our financial statements prepared in accordance with U.S. GAAP to analyze our 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, Adjusted EBITDA and Credit Adjusted EBITDA. We define 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 our management and by external users of our financial statements, such as investors, commercial banks, research analysts, and others, to assess:

  • the financial performance of our assets without regard to financing methods, capital structure, or historical cost basis;
  • the ability of our assets to generate cash sufficient to pay interest costs, support our indebtedness, and make cash distributions to our unitholders; and
  • our 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.

We define Credit Adjusted EBITDA as Adjusted EBITDA excluding net income (loss) and the lower of cost or net realizable value and other non-cash adjustments associated with the butane optimization business, which we exited during the second quarter of 2023. Credit Adjusted EBITDA is used as a supplemental performance and liquidity measure by our management and by external users of our financial statements, such as investors, commercial banks, research analysts, and others to provide additional information regarding the calculation of, and compliance with, certain financial covenants in the Partnership’s Third Amended and Restated Credit Agreement.

The GAAP measures most directly comparable to adjusted EBITDA and Credit Adjusted EBITDA are net income (loss) and net cash provided by (used in) operating activities. Adjusted EBITDA and Credit 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 and Credit 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 we have borrowed money to finance our operations, interest expense is a necessary element of our costs and our ability to generate cash available for distribution. Because we have capital assets, depreciation and amortization are also necessary elements of our costs. Therefore, any measures that exclude these elements have material limitations. To compensate for these limitations, we believe 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 our overall performance.

Distributable Cash Flow. We define 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 our management and by external users of our financial statements, such as investors, commercial banks and research analysts, to compare basic cash flows generated by us to the cash distributions we expect to pay unitholders. Distributable Cash Flow is also an important financial measure for our unitholders since it serves as an indicator of our success in providing a cash return on investment. Specifically, this financial measure indicates to investors whether or not we are generating cash flow at a level that can sustain or support an increase in our 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. We define 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 our management and by external users of our financial statements and represents how much cash flow a business generates during a specified time period after accounting for all capital expenditures, including expenditures for growth and maintenance capital projects. We believe 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. Our 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, we believe 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 our overall liquidity.

MMLP-F

MARTIN MIDSTREAM PARTNERS L.P.

CONSOLIDATED AND CONDENSED BALANCE SHEETS

(Dollars in thousands)

 

 

September 30,

2024

 

December 31,

2023

 

(Unaudited)

 

(Audited)

Assets

 

 

 

Cash

$

56

 

 

$

54

 

Accounts and other receivables, less allowance for doubtful accounts of $704 and $530, respectively

 

70,041

 

 

 

53,293

 

Inventories

 

43,037

 

 

 

43,822

 

Due from affiliates

 

23,522

 

 

 

7,924

 

Other current assets

 

12,156

 

 

 

9,220

 

Total current assets

 

148,812

 

 

 

114,313

 

 

 

 

 

Property, plant and equipment, at cost

 

948,185

 

 

 

918,786

 

Accumulated depreciation

 

(640,407

)

 

 

(612,993

)

Property, plant and equipment, net

 

307,778

 

 

 

305,793

 

 

 

 

 

Goodwill

 

16,671

 

 

 

16,671

 

Right-of-use assets

 

61,521

 

 

 

60,359

 

Investment in DSM Semichem LLC

 

7,624

 

 

 

 

Deferred income taxes, net

 

10,043

 

 

 

10,200

 

Other assets, net

 

2,308

 

 

 

2,039

 

Total assets

$

554,757

 

 

$

509,375

 

 

 

 

 

Liabilities and Partners’ Capital (Deficit)

 

 

 

Current installments of long-term debt and finance lease obligations

$

14

 

 

$

 

Trade and other accounts payable

 

60,995

 

 

 

51,653

 

Product exchange payables

 

 

 

 

426

 

Due to affiliates

 

1,388

 

 

 

6,334

 

Income taxes payable

 

1,315

 

 

 

652

 

Other accrued liabilities

 

31,157

 

 

 

41,499

 

Total current liabilities

 

94,869

 

 

 

100,564

 

 

 

 

 

Long-term debt, net

 

469,269

 

 

 

421,173

 

Finance lease obligations

 

58

 

 

 

 

Operating lease liabilities

 

44,549

 

 

 

45,684

 

Other long-term obligations

 

7,354

 

 

 

6,578

 

Total liabilities

 

616,099

 

 

 

573,999

 

 

 

 

 

Commitments and contingencies

 

 

 

Partners’ capital (deficit)

 

(61,342

)

 

 

(64,624

)

Total liabilities and partners' capital (deficit)

$

554,757

 

 

$

509,375

 

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,

 

2024

 

2023

 

2024

 

2023

Revenues:

 

 

 

 

 

 

 

Terminalling and storage *

$

22,562

 

 

$

22,202

 

 

$

67,454

 

 

$

64,744

 

Transportation *

 

56,506

 

 

 

55,223

 

 

 

172,489

 

 

 

165,696

 

Sulfur services

 

3,477

 

 

 

3,358

 

 

 

10,431

 

 

 

10,073

 

Product sales: *

 

 

 

 

 

 

 

Specialty products

 

67,206

 

 

 

66,695

 

 

 

200,819

 

 

 

277,836

 

Sulfur services

 

21,183

 

 

 

29,219

 

 

 

85,102

 

 

 

98,513

 

 

 

88,389

 

 

 

95,914

 

 

 

285,921

 

 

 

376,349

 

Total revenues

 

170,934

 

 

 

176,697

 

 

 

536,295

 

 

 

616,862

 

 

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

 

 

Cost of products sold: (excluding depreciation and amortization)

 

 

 

 

 

 

 

Specialty products *

 

58,409

 

 

 

56,298

 

 

 

173,192

 

 

 

245,863

 

Sulfur services *

 

12,545

 

 

 

19,461

 

 

 

52,178

 

 

 

66,932

 

Terminalling and storage *

 

23

 

 

 

23

 

 

 

65

 

 

 

54

 

 

 

70,977

 

 

 

75,782

 

 

 

225,435

 

 

 

312,849

 

Expenses:

 

 

 

 

 

 

 

Operating expenses *

 

62,363

 

 

 

64,375

 

 

 

191,655

 

 

 

187,857

 

Selling, general and administrative *

 

12,494

 

 

 

10,424

 

 

 

32,108

 

 

 

30,043

 

Depreciation and amortization

 

12,608

 

 

 

12,223

 

 

 

37,944

 

 

 

37,671

 

Total costs and expenses

 

158,442

 

 

 

162,804

 

 

 

487,142

 

 

 

568,420

 

 

 

 

 

 

 

 

 

Gain on disposition or sale of property, plant and equipment

 

159

 

 

 

811

 

 

 

1,320

 

 

 

1,096

 

Operating income

 

12,651

 

 

 

14,704

 

 

 

50,473

 

 

 

49,538

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

Interest expense, net

 

(14,592

)

 

 

(14,994

)

 

 

(42,811

)

 

 

(45,914

)

Loss on extinguishment of debt

 

 

 

 

 

 

 

 

 

 

(5,121

)

Equity in earnings (loss) of DSM Semichem LLC

 

(314

)

 

 

 

 

 

(314

)

 

 

 

Other, net

 

2

 

 

 

17

 

 

 

20

 

 

 

50

 

Total other expense

 

(14,904

)

 

 

(14,977

)

 

 

(43,105

)

 

 

(50,985

)

 

 

 

 

 

 

 

 

Net income (loss) before taxes

 

(2,253

)

 

 

(273

)

 

 

7,368

 

 

 

(1,447

)

Income tax expense

 

(1,066

)

 

 

(788

)

 

 

(3,634

)

 

 

(3,619

)

Net income (loss)

 

(3,319

)

 

 

(1,061

)

 

 

3,734

 

 

 

(5,066

)

Less general partner's interest in net income (loss)

 

66

 

 

 

21

 

 

 

(75

)

 

 

101

 

Less income (loss) allocable to unvested restricted units

 

14

 

 

 

4

 

 

 

(14

)

 

 

16

 

Limited partners' interest in net income (loss)

$

(3,239

)

 

$

(1,036

)

 

$

3,645

 

 

$

(4,949

)

 

 

 

 

 

 

 

 

Net income (loss) per unit attributable to limited partners - basic and diluted

$

(0.08

)

 

$

(0.03

)

 

$

0.09

 

 

$

(0.13

)

Weighted average limited partner units - basic

 

38,832,222

 

 

 

38,772,266

 

 

 

38,831,064

 

 

 

38,771,451

 

Weighted average limited partner units - diluted

 

38,832,222

 

 

 

38,772,266

 

 

 

38,909,976

 

 

 

38,771,451

 

*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,

 

2024

 

2023

 

2024

 

2023

Revenues:*

 

 

 

 

 

 

 

Terminalling and storage

$

17,785

 

$

18,542

 

$

54,412

 

$

54,121

Transportation

 

7,975

 

 

7,426

 

 

24,894

 

 

20,214

Product Sales

 

91

 

 

122

 

 

343

 

 

8,544

Costs and expenses:*

 

 

 

 

 

 

 

Cost of products sold: (excluding depreciation and amortization)

 

 

 

 

 

 

 

Specialty products

 

8,401

 

 

9,896

 

 

23,342

 

 

27,324

Sulfur services

 

3,014

 

 

2,787

 

 

8,926

 

 

8,139

Terminalling and storage

 

23

 

 

23

 

 

65

 

 

54

Expenses:

 

 

 

 

 

 

 

Operating expenses

 

26,153

 

 

25,606

 

 

79,077

 

 

74,491

Selling, general and administrative

 

12,215

 

 

8,477

 

 

27,716

 

 

23,549

MARTIN MIDSTREAM PARTNERS L.P.

CONSOLIDATED AND CONDENSED STATEMENTS OF CAPITAL (DEFICIT)

(Unaudited)

(Dollars in thousands)

 

 

 

Partners’ Capital (Deficit)

 

 

 

Common Limited

 

General

Partner

Amount

 

 

 

 

Units

 

Amount

 

 

Total

Balances - June 30, 2024

 

39,001,086

 

$

(59,557

)

 

$

1,691

 

 

$

(57,866

)

Net loss

 

 

 

(3,253

)

 

 

(66

)

 

 

(3,319

)

Cash distributions

 

 

 

(195

)

 

 

(4

)

 

 

(199

)

Unit-based compensation

 

 

 

42

 

 

 

 

 

 

42

 

Balances - September 30, 2024

 

39,001,086

 

 

(62,963

)

 

 

1,621

 

 

 

(61,342

)

 

 

 

 

 

 

 

 

 

Balances - December 31, 2023

 

38,914,806

 

$

(66,182

)

 

$

1,558

 

 

$

(64,624

)

Net income

 

 

 

3,659

 

 

 

75

 

 

 

3,734

 

Issuance of restricted units

 

86,280

 

 

 

 

 

 

 

 

 

Cash distributions

 

 

 

(585

)

 

 

(12

)

 

 

(597

)

Unit-based compensation

 

 

 

145

 

 

 

 

 

 

145

 

Balances - September 30, 2024

 

39,001,086

 

$

(62,963

)

 

$

1,621

 

 

$

(61,342

)

 

 

Partners’ Capital (Deficit)

 

 

 

Common Limited

 

General

Partner

Amount

 

 

 

 

Units

 

Amount

 

 

Total

Balances - June 30, 2023

 

38,914,806

 

$

(65,334

)

 

$

1,577

 

 

$

(63,757

)

Net loss

 

 

 

(1,040

)

 

 

(21

)

 

 

(1,061

)

Cash distributions

 

 

 

(194

)

 

 

(4

)

 

 

(198

)

Unit-based compensation

 

 

 

37

 

 

 

 

 

 

37

 

Balances - September 30, 2023

 

38,914,806

 

 

(66,531

)

 

 

1,552

 

 

 

(64,979

)

 

 

 

 

 

 

 

 

 

Balances - December 31, 2022

 

38,850,750

 

$

(61,110

)

 

$

1,665

 

 

$

(59,445

)

Net loss

 

 

 

(4,965

)

 

 

(101

)

 

 

(5,066

)

Issuance of restricted units

 

64,056

 

 

 

 

 

 

 

 

 

Cash distributions

 

 

 

(583

)

 

 

(12

)

 

 

(595

)

Unit-based compensation

 

 

 

127

 

 

 

 

 

 

127

 

Balances - September 30, 2023

 

38,914,806

 

$

(66,531

)

 

$

1,552

 

 

$

(64,979

)

MARTIN MIDSTREAM PARTNERS L.P.

CONSOLIDATED AND CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)

(Dollars in thousands)

 

 

Nine Months Ended

 

September 30,

 

2024

 

2023

Cash flows from operating activities:

 

 

 

Net income (loss)

$

3,734

 

 

$

(5,066

)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

 

 

 

Depreciation and amortization

 

37,944

 

 

 

37,671

 

Amortization of deferred debt issuance costs

 

2,311

 

 

 

3,206

 

Amortization of debt discount

 

1,800

 

 

 

1,600

 

Deferred income tax expense

 

157

 

 

 

2,322

 

Gain on disposition or sale of property, plant and equipment, net

 

(1,320

)

 

 

(1,096

)

Loss on extinguishment of debt

 

 

 

 

5,121

 

Equity in (earnings) loss of DSM Semichem LLC

 

314

 

 

 

 

Non cash unit-based compensation

 

145

 

 

 

127

 

Change in current assets and liabilities, excluding effects of acquisitions and dispositions:

 

 

 

Accounts and other receivables

 

(16,748

)

 

 

19,190

 

Inventories

 

591

 

 

 

68,099

 

Due from affiliates

 

(15,598

)

 

 

5,914

 

Other current assets

 

(373

)

 

 

5,282

 

Trade and other accounts payable

 

9,867

 

 

 

(24,709

)

Product exchange payables

 

(426

)

 

 

743

 

Due to affiliates

 

(4,946

)

 

 

(804

)

Income taxes payable

 

663

 

 

 

(204

)

Other accrued liabilities

 

(12,632

)

 

 

(10,311

)

Change in other non-current assets and liabilities

 

701

 

 

 

(1,020

)

Net cash provided by operating activities

 

6,184

 

 

 

106,065

 

 

 

 

 

Cash flows from investing activities:

 

 

 

Payments for property, plant and equipment

 

(34,058

)

 

 

(25,294

)

Payments for plant turnaround costs

 

(9,599

)

 

 

(2,367

)

Investment in DSM Semichem LLC

 

(6,938

)

 

 

 

Proceeds from sale of property, plant and equipment

 

953

 

 

 

5,183

 

Net cash used in investing activities

 

(49,642

)

 

 

(22,478

)

 

 

 

 

Cash flows from financing activities:

 

 

 

Payments of long-term debt

 

(173,000

)

 

 

(579,197

)

Payments under finance lease obligations

 

(5

)

 

 

(9

)

Proceeds from long-term debt

 

217,077

 

 

 

510,489

 

Payment of debt issuance costs

 

(15

)

 

 

(14,266

)

Cash distributions paid

 

(597

)

 

 

(595

)

Net cash provided by (used in) financing activities

 

43,460

 

 

 

(83,578

)

 

 

 

 

Net increase in cash

 

2

 

 

 

9

 

Cash at beginning of period

 

54

 

 

 

45

 

Cash at end of period

$

56

 

 

$

54

 

 

 

 

 

Non-cash additions to property, plant and equipment

$

2,418

 

 

$

2,369

 

Non-cash contribution of land to DSM Semichem LLC

$

1,000

 

 

$

 

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, 2024 and 2023

 

 

Three Months Ended

September 30,

 

Variance

 

Percent

Change

 

2024

 

2023

 

 

 

(In thousands, except BBL per day)

 

 

 

 

 

 

 

 

 

 

Revenues

$

24,414

 

 

$

23,973

 

 

$

441

 

 

2

%

Cost of products sold

 

23

 

 

 

23

 

 

 

 

 

%

Operating expenses

 

14,857

 

 

 

15,078

 

 

 

(221

)

 

(1

)%

Selling, general and administrative expenses

 

1,130

 

 

 

628

 

 

 

502

 

 

80

%

Depreciation and amortization

 

5,695

 

 

 

5,102

 

 

 

593

 

 

12

%

 

 

2,709

 

 

 

3,142

 

 

 

(433

)

 

(14

)%

Loss on disposition or sale of property, plant and equipment

 

(34

)

 

 

(35

)

 

 

1

 

 

3

%

Operating income

$

2,675

 

 

$

3,107

 

 

$

(432

)

 

(14

)%

 

 

 

 

 

 

 

 

Shore-based throughput volumes (gallons)

 

42,242

 

 

 

40,655

 

 

 

1,587

 

 

4

%

Smackover refinery throughput volumes (guaranteed minimum BBL per day)

 

6,500

 

 

 

6,500

 

 

 

 

 

%

Comparative Results of Operations for the Nine Months Ended September 30, 2024 and 2023

 

 

Nine Months Ended

September 30,

 

Variance

 

Percent

Change

 

 

2024

 

 

2023

 

 

 

 

(In thousands, except BBL per day)

 

 

 

 

 

 

 

 

 

 

Revenues

$

73,101

 

$

71,798

 

 

$

1,303

 

 

2

%

Cost of products sold

 

65

 

 

54

 

 

 

11

 

 

20

%

Operating expenses

 

45,414

 

 

43,318

 

 

 

2,096

 

 

5

%

Selling, general and administrative expenses

 

2,232

 

 

1,510

 

 

 

722

 

 

48

%

Depreciation and amortization

 

16,819

 

 

15,896

 

 

 

923

 

 

6

%

 

 

8,571

 

 

11,020

 

 

 

(2,449

)

 

(22

)%

Gain (loss) on disposition or sale of property, plant and equipment

 

1,063

 

 

(359

)

 

 

1,422

 

 

396

%

Operating income

$

9,634

 

$

10,661

 

 

$

(1,027

)

 

(10

)%

 

 

 

 

 

 

 

 

Shore-based throughput volumes (gallons)

 

130,502

 

 

126,438

 

 

 

4,064

 

 

3

%

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, 2024 and 2023

 

 

Three Months Ended

September 30,

 

Variance

 

Percent

Change

 

2024

 

2023

 

 

 

(In thousands)

 

 

Revenues

$

60,196

 

$

58,541

 

$

1,655

 

 

3

%

Operating expenses

 

45,138

 

 

46,465

 

 

(1,327

)

 

(3

)%

Selling, general and administrative expenses

 

3,423

 

 

2,571

 

 

852

 

 

33

%

Depreciation and amortization

 

3,182

 

 

3,674

 

 

(492

)

 

(13

)%

 

 

8,453

 

 

5,831

 

 

2,622

 

 

45

%

Gain on disposition or sale of property, plant and equipment

 

130

 

 

846

 

 

(716

)

 

(85

)%

Operating income

$

8,583

 

$

6,677

 

$

1,906

 

 

29

%

Comparative Results of Operations for the Nine Months Ended September 30, 2024 and 2023

 

 

Nine Months Ended

September 30,

 

Variance

 

Percent

Change

 

2024

 

2023

 

 

 

(In thousands)

 

 

Revenues

$

183,705

 

$

178,875

 

$

4,830

 

 

3

%

Operating expenses

 

139,562

 

 

136,940

 

 

2,622

 

 

2

%

Selling, general and administrative expenses

 

8,150

 

 

7,101

 

 

1,049

 

 

15

%

Depreciation and amortization

 

10,039

 

 

11,196

 

 

(1,157

)

 

(10

)%

 

$

25,954

 

$

23,638

 

$

2,316

 

 

10

%

Gain on disposition or sale of property, plant and equipment

 

496

 

 

1,497

 

 

(1,001

)

 

(67

)%

Operating income

$

26,450

 

$

25,135

 

$

1,315

 

 

5

%

Sulfur Services Segment

Comparative Results of Operations for the Three Months Ended September 30, 2024 and 2023

 

 

Three Months Ended

September 30,

 

Variance

 

Percent

Change

 

2024

 

2023

 

 

 

(In thousands)

 

 

Revenues:

 

 

 

 

 

 

 

Services

$

3,477

 

$

3,358

 

$

119

 

 

4

%

Products

 

21,183

 

 

29,219

 

 

(8,036

)

 

(28

)%

Total revenues

 

24,660

 

 

32,577

 

 

(7,917

)

 

(24

)%

 

 

 

 

 

 

 

 

Cost of products sold

 

15,292

 

 

21,972

 

 

(6,680

)

 

(30

)%

Operating expenses

 

3,089

 

 

3,510

 

 

(421

)

 

(12

)%

Selling, general and administrative expenses

 

2,091

 

 

1,713

 

 

378

 

 

22

%

Depreciation and amortization

 

2,937

 

 

2,639

 

 

298

 

 

11

%

 

 

1,251

 

 

2,743

 

 

(1,492

)

 

(54

)%

Gain on disposition or sale of property, plant and equipment

 

3

 

 

 

 

3

 

 

 

Operating income

$

1,254

 

$

2,743

 

$

(1,489

)

 

(54

)%

 

 

 

 

 

 

 

 

Sulfur (long tons)

 

113

 

 

155

 

 

(42

)

 

(27

)%

Fertilizer (long tons)

 

29

 

 

58

 

 

(29

)

 

(50

)%

Total sulfur services volumes (long tons)

 

142

 

 

213

 

 

(71

)

 

(33

)%

Comparative Results of Operations for the Nine Months Ended September 30, 2024 and 2023

 

 

Nine Months Ended

September 30,

 

Variance

 

Percent

Change

 

2024

 

2023

 

 

 

(In thousands)

 

 

Revenues:

 

 

 

 

 

 

 

Services

$

10,431

 

 

$

10,073

 

$

358

 

 

4

%

Products

 

85,103

 

 

 

98,513

 

 

(13,410

)

 

(14

)%

Total revenues

 

95,534

 

 

 

108,586

 

 

(13,052

)

 

(12

)%

 

 

 

 

 

 

 

 

Cost of products sold

 

60,246

 

 

 

74,062

 

 

(13,816

)

 

(19

)%

Operating expenses

 

8,773

 

 

 

9,595

 

 

(822

)

 

(9

)%

Selling, general and administrative expenses

 

5,111

 

 

 

4,292

 

 

819

 

 

19

%

Depreciation and amortization

 

8,697

 

 

 

8,072

 

 

625

 

 

8

%

 

 

12,707

 

 

 

12,565

 

 

142

 

 

1

%

Gain (loss) on disposition or sale of property, plant and equipment

 

(305

)

 

 

17

 

 

(322

)

 

(1,894

)%

Operating income

$

12,402

 

 

$

12,582

 

$

(180

)

 

(1

)%

 

 

 

 

 

 

 

 

Sulfur (long tons)

 

296

 

 

 

352

 

 

(56

)

 

(16

)%

Fertilizer (long tons)

 

165

 

 

 

192

 

 

(27

)

 

(14

)%

Total sulfur services volumes (long tons)

 

461

 

 

 

544

 

 

(83

)

 

(15

)%

Specialty Products Segment

Comparative Results of Operations for the Three Months Ended September 30, 2024 and 2023

 

 

Three Months Ended

September 30,

 

Variance

 

Percent

Change

 

2024

 

2023

 

 

 

(In thousands)

 

 

Products revenues

$

67,225

 

$

66,720

 

$

505

 

 

1

%

Cost of products sold

 

60,445

 

 

58,177

 

 

2,268

 

 

4

%

Operating expenses

 

30

 

 

23

 

 

7

 

 

30

%

Selling, general and administrative expenses

 

2,135

 

 

1,698

 

 

437

 

 

26

%

Depreciation and amortization

 

794

 

 

808

 

 

(14

)

 

(2

)%

 

 

3,821

 

 

6,014

 

 

(2,193

)

 

(36

)%

Gain on disposition or sale of property, plant and equipment

 

60

 

 

 

 

60

 

 

 

Operating income

$

3,881

 

$

6,014

 

$

(2,133

)

 

(35

)%

 

 

 

 

 

 

 

 

NGL sales volumes (Bbls)

 

582

 

 

509

 

 

73

 

 

14

%

Other specialty products volumes (Bbls)

 

91

 

 

106

 

 

(15

)

 

(14

)%

Total specialty products volumes (Bbls)

 

673

 

 

615

 

 

58

 

 

9

%

Comparative Results of Operations for the Nine Months Ended September 30, 2024 and 2023

 

 

Nine Months Ended

September 30,

 

Variance

 

Percent

Change

 

2024

 

2023

 

 

 

(In thousands)

 

 

Products revenues

$

200,888

 

$

277,895

 

 

$

(77,007

)

 

(28

)%

Cost of products sold

 

179,800

 

 

256,898

 

 

 

(77,098

)

 

(30

)%

Operating expenses

 

81

 

 

55

 

 

 

26

 

 

47

%

Selling, general and administrative expenses

 

5,300

 

 

5,287

 

 

 

13

 

 

%

Depreciation and amortization

 

2,389

 

 

2,507

 

 

 

(118

)

 

(5

)%

 

 

13,318

 

 

13,148

 

 

 

170

 

 

1

%

Gain (loss) on disposition or sale of property, plant and equipment

 

66

 

 

(59

)

 

 

125

 

 

212

%

Operating income

$

13,384

 

$

13,089

 

 

$

295

 

 

2

%

 

 

 

 

 

 

 

 

NGL sales volumes (Bbls)

 

1,744

 

 

3,027

 

 

 

(1,283

)

 

(42

)%

Other specialty products volumes (Bbls)

 

263

 

 

280

 

 

 

(17

)

 

(6

)%

Total specialty products volumes (Bbls)

 

2,007

 

 

3,307

 

 

 

(1,300

)

 

(39

)%

Unallocated Selling, General and Administrative Expenses

Comparative Results of Operations for the Three and Nine Months Ended September 30, 2024 and 2023

 

 

Three Months Ended

September 30,

 

Variance

 

Percent

Change

 

Nine Months Ended

September 30,

 

Variance

 

Percent

Change

 

2024

 

2023

 

 

 

2024

 

2023

 

 

 

(In thousands)

 

 

 

(In thousands)

 

 

Indirect selling, general and administrative expenses

$

3,742

 

$

3,837

 

$

(95

)

 

(2

)%

 

$

11,397

 

$

11,929

 

$

(532

)

 

(4

)%

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, 2024 and 2023, which represents EBITDA, adjusted EBITDA, Credit Adjusted EBITDA, distributable cash flow, and adjusted free cash flow:

Reconciliation of Net Income (Loss) to EBITDA, Adjusted EBITDA, and Credit Adjusted EBITDA

 

 

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

 

 

 

2024

 

2023

 

2024

 

2023

 

(in thousands)

 

(in thousands)

Net income (loss)

$

(3,319

)

 

$

(1,061

)

 

$

3,734

 

 

$

(5,066

)

Adjustments:

 

 

 

 

 

 

 

Interest expense

 

14,592

 

 

 

14,994

 

 

 

42,811

 

 

 

45,914

 

Income tax expense

 

1,066

 

 

 

788

 

 

 

3,634

 

 

 

3,619

 

Depreciation and amortization

 

12,608

 

 

 

12,223

 

 

 

37,944

 

 

 

37,671

 

EBITDA

 

24,947

 

 

 

26,944

 

 

 

88,123

 

 

 

82,138

 

Adjustments:

 

 

 

 

 

 

 

Gain on disposition or sale of property, plant and equipment

 

(159

)

 

 

(811

)

 

 

(1,320

)

 

 

(1,096

)

Loss on extinguishment of debt

 

 

 

 

 

 

 

 

 

 

5,121

 

Equity in (earnings) loss of DSM Semichem LLC

 

314

 

 

 

 

 

 

314

 

 

 

 

Lower of cost or net realizable value and other non-cash adjustments

 

 

 

 

 

 

 

 

 

 

(12,850

)

Unit-based compensation

 

42

 

 

 

37

 

 

 

145

 

 

 

127

 

Adjusted EBITDA

$

25,144

 

 

$

26,170

 

 

$

87,262

 

 

$

73,440

 

Adjustments:

 

 

 

 

 

 

 

Less: net loss associated with butane optimization business

 

 

 

 

 

 

 

 

 

 

2,255

 

Plus: lower of cost or net realizable value and other non-cash adjustments

 

 

 

$

 

 

 

 

 

 

12,850

 

Credit Adjusted EBITDA

$

25,144

 

 

$

26,170

 

 

$

87,262

 

 

$

88,545

 

Reconciliation of Net Cash Provided by Operating Activities to Adjusted EBITDA, Credit Adjusted EBITDA,

Distributable Cash Flow, and Adjusted Free Cash Flow

 

 

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

 

 

 

2024

 

2023

 

2024

 

2023

 

(in thousands)

 

(in thousands)

Net cash provided by (used in) operating activities

$

(15,753

)

 

$

7,291

 

 

$

6,184

 

 

$

106,065

 

Interest expense 1

 

13,220

 

 

 

13,623

 

 

 

38,700

 

 

 

41,108

 

Current income tax expense

 

935

 

 

 

333

 

 

 

3,477

 

 

 

1,297

 

Lower of cost or net realizable value and other non-cash adjustments

 

 

 

 

 

 

 

 

 

 

(12,850

)

Changes in operating assets and liabilities which (provided) used cash:

 

 

 

 

 

 

 

Accounts and other receivables, inventories, and other current assets

 

22,489

 

 

 

(5,983

)

 

 

32,128

 

 

 

(98,485

)

Trade, accounts and other payables, and other current liabilities

 

4,032

 

 

 

11,155

 

 

 

7,474

 

 

 

35,285

 

Other

 

221

 

 

 

(249

)

 

 

(701

)

 

 

1,020

 

Adjusted EBITDA

 

25,144

 

 

 

26,170

 

 

 

87,262

 

 

 

73,440

 

Adjustments:

 

 

 

 

 

 

 

Less: net loss associated with butane optimization business

 

 

 

 

 

 

 

 

 

 

2,255

 

Plus: lower of cost or net realizable value and other non-cash adjustments

 

 

 

 

 

 

 

 

 

 

12,850

 

Credit Adjusted EBITDA

 

25,144

 

 

 

26,170

 

 

 

87,262

 

 

 

88,545

 

Adjustments:

 

 

 

 

 

 

 

Interest expense

 

(14,592

)

 

 

(14,994

)

 

 

(42,811

)

 

 

(45,914

)

Income tax expense

 

(1,066

)

 

 

(788

)

 

 

(3,634

)

 

 

(3,619

)

Deferred income taxes

 

131

 

 

 

455

 

 

 

157

 

 

 

2,322

 

Amortization of debt discount

 

600

 

 

 

600

 

 

 

1,800

 

 

 

1,600

 

Amortization of deferred debt issuance costs

 

772

 

 

 

771

 

 

 

2,311

 

 

 

3,206

 

Payments for plant turnaround costs

 

(2,894

)

 

 

(1,706

)

 

 

(9,599

)

 

 

(2,367

)

Maintenance capital expenditures

 

(5,738

)

 

 

(5,516

)

 

 

(17,949

)

 

 

(19,588

)

Distributable cash flow

 

2,357

 

 

 

4,992

 

 

 

17,537

 

 

 

24,185

 

Principal payments under finance lease obligations

 

(4

)

 

 

 

 

 

(5

)

 

 

(9

)

Investment in DSM Semichem LLC

 

 

 

 

 

 

 

(6,938

)

 

 

 

Expansion capital expenditures

 

(3,903

)

 

 

(3,444

)

 

 

(15,584

)

 

 

(6,126

)

Adjusted free cash flow

$

(1,550

)

 

$

1,548

 

 

$

(4,990

)

 

$

18,050

 

1 Net of amortization of debt issuance costs and discount, which are included in interest expense but not included in net cash provided by (used in) operating activities.

Contacts

Sharon Taylor - Executive Vice President & Chief Financial Officer

(877) 256-6644

ir@mmlp.com

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