Attached files
| file | filename |
|---|---|
| EX-99.2 - EXHIBIT 99.2 - MARTIN MIDSTREAM PARTNERS L.P. | a2q16earningsslidefinal8.htm |
| 8-K - 8-K - MARTIN MIDSTREAM PARTNERS L.P. | a2016630form8k-earningsrel.htm |
EXHIBIT 99.1
MARTIN MIDSTREAM PARTNERS REPORTS
2016 SECOND QUARTER FINANCIAL RESULTS
• | Maintained distribution of $0.8125 |
• | Strong second quarter sulfur services and fertilizer performance |
• | Challenging marine fundamentals continue |
KILGORE, Texas, July 27, 2016 (GlobeNewswire) -- Martin Midstream Partners L.P. (Nasdaq: MMLP) (the "Partnership") announced today its financial results for the quarter ended June 30, 2016.
Ruben Martin, President and Chief Executive Officer of Martin Midstream GP LLC, the general partner of the Partnership said, "The challenging environment we referenced at the end of the first quarter continued into second-quarter 2016 results. The Partnership’s distributable cash flow for the second-quarter 2016 did not meet our internal forecast. Higher than anticipated maintenance capital expenditures of $5.4 million and weak operating results from our Marine Transportation segment resulted in a distribution coverage ratio of 0.76 times. We expect maintenance capital and turnaround expenditures to be significantly lower in the second half of the year, as we have spent approximately $12.4 million of the budgeted $18.9 million through the first six months of 2016.
"Across our businesses, Natural Gas Services segment results were lower than anticipated from a combination of the seasonally weaker refinery grade butane and legacy natural gas liquids businesses. Further, distributions from the West Texas LPG pipeline were weaker than forecast due to the previously announced revision to prior tariffs mandated by the Railroad Commission of Texas and elevated maintenance capital expenditures at the joint venture. This was offset by outperformance in our Cardinal Gas Storage division where interruptible revenue continued to be strong.
"Our Terminalling and Storage segment exceeded planned performance during the second quarter benefiting from a modest recovery in our lubricants platform, including strong performance in our grease business. In addition, our legacy specialty terminals and the Smackover refinery were stronger in the second quarter based on lower operating expenses and lower than anticipated repair and maintenance expenses.
"Within our Sulfur Services segment, as expected, the delayed first-quarter fertilizer application pushed volumes into the second quarter producing enhanced results. Through two quarters, we have achieved our full year cash flow guidance in fertilizer. While we expect usual segment seasonality heading into the third and fourth quarters, overall fertilizer fundamentals continue to be strong.
"In our Marine Transportation segment, we continue to see an abundance of supply of marine equipment in our predominantly Gulf Coast by-product and refined product markets. This translated to lower than anticipated utilization and day rates particularly in our inland business. Further, regulatory dry-docking and repair and maintenance expenses continued into the second quarter. Additionally, we encountered higher than anticipated maintenance capital expenditures associated with our marine assets that are housed within our Sulfur Services segment further decreasing distributable cash flow.
"Looking forward, management is focused on multiple initiatives to improve our leverage profile and distribution coverage ratio both near and long-term. We look forward to providing more details on these initiatives prior to the end of the year.”
As a result of a $4.1 million non-cash goodwill impairment charge in the Partnership's Marine Transportation segment, the Partnership had a net loss for the second quarter of 2016 of $1.2 million, a loss of $0.14 per limited partner unit. Net income for the second quarter of 2015 was $11.0 million, or $0.19 per limited partner unit. The Partnership's adjusted EBITDA from continuing operations for the second quarter of 2016 was $41.6 million compared to adjusted EBITDA from continuing operations for the second quarter of 2015 of $45.0 million, a decrease of 8%.
Net income from continuing operations for the six months ended June 30, 2016 was $14.7 million, or $0.19 per limited partner unit. Net income from continuing operations for the six months ended of 2015 was $27.0 million, or $0.54 per limited partner unit. Net income for the six months ended June 30, 2016 was negatively impacted by a non-cash goodwill impairment charge in the Partnership's Marine Transportation segment of $4.1 million, or $0.12 per limited partner unit. The Partnership's adjusted EBITDA from continuing operations for the six months ended June 30, 2016 was $90.9 million compared to adjusted EBITDA from continuing operations for the six months ended June 30, 2015 of $95.4 million, a decrease of 5%.
The Partnership's distributable cash flow from continuing operations for the second quarter of 2016 was $25.4 million compared to distributable cash flow from continuing operations for the second quarter of 2015 of $31.9 million, a decrease of 20%.
The Partnership's distributable cash flow from continuing operations for the six months ended June 30, 2016 was $57.9 million compared to distributable cash flow from continuing operations for the six months ended June 30, 2015 of $69.0 million, a decrease of 16%.
Revenues for the second quarter of 2016 were $190.3 million compared to $251.1 million for the second quarter of 2015. Revenues for the six months ended June 30, 2016 were $416.0 million compared to $556.5 million for the six months ended June 30, 2015.
On February 12, 2015, the Partnership exited the natural gas liquids floating storage and trans-loading businesses as a result of the sale of its six liquefied petroleum gas pressure barges, collectively referred to as the "Floating Storage Assets", for $41.3 million. The Partnership recorded a gain on the disposition of $1.5 million.
The Partnership had no net income, distributable cash flow or adjusted EBITDA from discontinued operations related to the Floating Storage Assets for the three and six months ended June 30, 2016.
The Partnership had no net income, distributable cash flow or adjusted EBITDA from discontinued operations related to the Floating Storage Assets for the three months ended June 30, 2015. The Partnership had net income from discontinued operations for the six months ended June 30, 2015 of $1.2 million, or $0.02 per limited partner unit. Distributable cash flow and adjusted EBITDA from discontinued operations were $1.2 million for the six months ended June 30, 2015.
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 directly comparable GAAP measurement.
Included with this press release are the Partnership's consolidated and condensed financial statements as of and for the three and six months ended June 30, 2016 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 July 27, 2016.
An attachment accompanying this announcement is available at http://www.globenewswire.com/NewsRoom/AttachmentNg/3876e52d-3b2c-450e-964d-b9a884a37d8b.
Quarterly Cash Distribution
The quarterly cash distribution of $0.8125 per common unit, which was announced on July 21, 2016, is payable on August 12, 2016 to common unitholders of record as of the close of business on August 5, 2016. The ex-dividend date for the cash distribution is August 3, 2016. This distribution reflects an annualized distribution rate of $3.25 per unit.
Investors' Conference Call
An investors' conference call to review the second quarter results will be held on Thursday, July 28, 2016, at 8:00 a.m. Central Time. The conference call can be accessed by calling (877) 878-2695. Additionally, an accompanying slide and live webcast will be available by visiting Martin Midstream Partners’ website at www.martinmidstream.com. An audio replay of the conference call will be available by calling (855) 859-2056 from 11:00 a.m. Central Time on July 28, 2016 through 10:59 p.m. Central Time on August 8, 2016. The access code for the conference call and the audio replay is Conference ID No. 40605761. The audio replay will also be archived under the Events and Presentations section of the Partnership’s website.
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.
Contact: Joe McCreery, IRC, Head of Investor Relations, at (903) 988-6425 and (877) 256-6644.
MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED BALANCE SHEETS
(Dollars in thousands)
June 30, 2016 | December 31, 2015 | ||||||
(Unaudited) | (Audited) | ||||||
Assets | |||||||
Cash | $ | 28 | $ | 31 | |||
Accounts and other receivables, less allowance for doubtful accounts of $372 and $430, respectively | 50,360 | 74,355 | |||||
Product exchange receivables | 118 | 1,050 | |||||
Inventories | 90,636 | 75,870 | |||||
Due from affiliates | 7,972 | 10,126 | |||||
Fair value of derivatives | — | 675 | |||||
Other current assets | 5,129 | 5,718 | |||||
Total current assets | 154,243 | 167,825 | |||||
Property, plant and equipment, at cost | 1,391,544 | 1,387,814 | |||||
Accumulated depreciation | (422,465 | ) | (404,574 | ) | |||
Property, plant and equipment, net | 969,079 | 983,240 | |||||
Goodwill | 19,657 | 23,802 | |||||
Investment in WTLPG | 130,474 | 132,292 | |||||
Note receivable - Martin Energy Trading LLC | 15,000 | 15,000 | |||||
Other assets, net | 53,279 | 58,314 | |||||
Total assets | $ | 1,341,732 | $ | 1,380,473 | |||
Liabilities and Partners’ Capital | |||||||
Trade and other accounts payable | $ | 81,836 | $ | 81,180 | |||
Product exchange payables | 8,809 | 12,732 | |||||
Due to affiliates | 3,859 | 5,738 | |||||
Income taxes payable | 370 | 985 | |||||
Fair value of derivatives | 862 | — | |||||
Other accrued liabilities | 20,663 | 18,533 | |||||
Total current liabilities | 116,399 | 119,168 | |||||
Long-term debt, net | 878,891 | 865,003 | |||||
Fair value of derivatives | — | 206 | |||||
Other long-term obligations | 2,551 | 2,217 | |||||
Total liabilities | 997,841 | 986,594 | |||||
Commitments and contingencies (Note 16) | |||||||
Partners’ capital | 343,891 | 393,879 | |||||
Total partners’ capital | 343,891 | 393,879 | |||||
Total liabilities and partners' capital | $ | 1,341,732 | $ | 1,380,473 | |||
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 July 27, 2016.
MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars and units in thousands, except per unit amounts)
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Revenues: | |||||||||||||||
Terminalling and storage * | $ | 31,090 | $ | 33,453 | $ | 62,795 | $ | 67,250 | |||||||
Marine transportation * | 14,339 | 20,343 | 30,685 | 40,979 | |||||||||||
Natural gas services* | 15,403 | 16,564 | 31,500 | 33,051 | |||||||||||
Sulfur services | 2,700 | 3,090 | 5,400 | 6,180 | |||||||||||
Product sales: * | |||||||||||||||
Natural gas services | 58,899 | 97,786 | 149,990 | 244,089 | |||||||||||
Sulfur services | 39,588 | 45,284 | 79,063 | 95,331 | |||||||||||
Terminalling and storage | 28,329 | 34,579 | 56,520 | 69,572 | |||||||||||
126,816 | 177,649 | 285,573 | 408,992 | ||||||||||||
Total revenues | 190,348 | 251,099 | 415,953 | 556,452 | |||||||||||
Costs and expenses: | |||||||||||||||
Cost of products sold: (excluding depreciation and amortization) | |||||||||||||||
Natural gas services * | 55,579 | 88,623 | 134,123 | 226,330 | |||||||||||
Sulfur services * | 24,700 | 33,518 | 52,224 | 69,541 | |||||||||||
Terminalling and storage * | 22,934 | 29,658 | 46,766 | 59,740 | |||||||||||
103,213 | 151,799 | 233,113 | 355,611 | ||||||||||||
Expenses: | |||||||||||||||
Operating expenses * | 40,822 | 47,783 | 82,054 | 93,089 | |||||||||||
Selling, general and administrative * | 8,144 | 9,035 | 16,315 | 17,841 | |||||||||||
Loss on impairment of goodwill | 4,145 | — | 4,145 | — | |||||||||||
Depreciation and amortization | 22,089 | 22,685 | 44,137 | 45,402 | |||||||||||
Total costs and expenses | 178,413 | 231,302 | 379,764 | 511,943 | |||||||||||
Other operating loss | (1,679 | ) | (167 | ) | (1,595 | ) | (177 | ) | |||||||
Operating income | 10,256 | 19,630 | 34,594 | 44,332 | |||||||||||
Other income (expense): | |||||||||||||||
Equity in earnings of WTLPG | 805 | 1,649 | 2,482 | 3,389 | |||||||||||
Interest expense, net | (12,155 | ) | (9,925 | ) | (22,267 | ) | (20,471 | ) | |||||||
Other, net | 74 | (79 | ) | 136 | 358 | ||||||||||
Total other expense | (11,276 | ) | (8,355 | ) | (19,649 | ) | (16,724 | ) | |||||||
Net income (loss) before taxes | (1,020 | ) | 11,275 | 14,945 | 27,608 | ||||||||||
Income tax expense | (191 | ) | (314 | ) | (242 | ) | (614 | ) | |||||||
Income (loss) from continuing operations | (1,211 | ) | 10,961 | 14,703 | 26,994 | ||||||||||
Income from discontinued operations, net of income taxes | — | — | — | 1,215 | |||||||||||
Net income (loss) | (1,211 | ) | 10,961 | 14,703 | 28,209 | ||||||||||
Less general partner's interest in net income | (3,869 | ) | (4,113 | ) | (8,080 | ) | (8,351 | ) | |||||||
Less (income) loss allocable to unvested restricted units | 4 | (44 | ) | (39 | ) | (111 | ) | ||||||||
Limited partners' interest in net income (loss) | $ | (5,076 | ) | $ | 6,804 | $ | 6,584 | $ | 19,747 | ||||||
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 July 27, 2016.
*Related Party Transactions Shown Below
MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars and units in thousands, except per unit amounts)
*Related Party Transactions Included Above
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Revenues:* | |||||||||||||||
Terminalling and storage | $ | 20,590 | $ | 23,061 | $ | 41,548 | $ | 43,535 | |||||||
Marine transportation | 6,036 | 6,622 | 12,447 | 13,367 | |||||||||||
Natural gas services | 129 | — | 442 | — | |||||||||||
Product Sales | 968 | 1,759 | 1,668 | 3,348 | |||||||||||
Costs and expenses:* | |||||||||||||||
Cost of products sold: (excluding depreciation and amortization) | |||||||||||||||
Natural gas services | 4,498 | 6,810 | 7,883 | 13,728 | |||||||||||
Sulfur services | 3,810 | 3,618 | 7,622 | 7,242 | |||||||||||
Terminalling and storage | 4,081 | 5,632 | 7,466 | 11,034 | |||||||||||
Expenses: | |||||||||||||||
Operating expenses | 18,088 | 18,915 | 35,445 | 39,315 | |||||||||||
Selling, general and administrative | 6,911 | 5,849 | 12,343 | 11,843 | |||||||||||
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 July 27, 2016.
MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars and units in thousands, except per unit amounts)
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Allocation of net income (loss) attributable to: | |||||||||||||||
Limited partner interest: | |||||||||||||||
Continuing operations | $ | (5,076 | ) | $ | 6,804 | $ | 6,584 | $ | 18,896 | ||||||
Discontinued operations | — | — | — | 851 | |||||||||||
$ | (5,076 | ) | $ | 6,804 | $ | 6,584 | $ | 19,747 | |||||||
General partner interest: | |||||||||||||||
Continuing operations | $ | 3,869 | $ | 4,113 | $ | 8,080 | $ | 7,992 | |||||||
Discontinued operations | — | — | — | 359 | |||||||||||
$ | 3,869 | $ | 4,113 | $ | 8,080 | $ | 8,351 | ||||||||
Net income (loss) per unit attributable to limited partners: | |||||||||||||||
Basic: | |||||||||||||||
Continuing operations | $ | (0.14 | ) | $ | 0.19 | $ | 0.19 | $ | 0.54 | ||||||
Discontinued operations | — | — | — | 0.02 | |||||||||||
$ | (0.14 | ) | $ | 0.19 | $ | 0.19 | $ | 0.56 | |||||||
Weighted average limited partner units - basic | 35,346 | 35,308 | 35,366 | 35,316 | |||||||||||
Diluted: | |||||||||||||||
Continuing operations | $ | (0.14 | ) | $ | 0.19 | $ | 0.19 | $ | 0.54 | ||||||
Discontinued operations | — | — | — | 0.02 | |||||||||||
$ | (0.14 | ) | $ | 0.19 | $ | 0.19 | $ | 0.56 | |||||||
Weighted average limited partner units - diluted | 35,346 | 35,376 | 35,380 | 35,372 | |||||||||||
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 July 27, 2016.
MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED STATEMENTS OF CAPITAL
(Unaudited)
(Dollars in thousands)
Partners’ Capital | ||||||||||||||
Common Limited | General Partner Amount | |||||||||||||
Units | Amount | Total | ||||||||||||
Balances - January 1, 2015 | 35,365,912 | $ | 470,943 | $ | 14,728 | $ | 485,671 | |||||||
Net income | — | 19,858 | 8,351 | 28,209 | ||||||||||
Issuance of common units, net | — | (269 | ) | — | (269 | ) | ||||||||
Issuance of restricted units | 91,950 | — | — | — | ||||||||||
Forfeiture of restricted units | (1,000 | ) | — | — | — | |||||||||
General partner contribution | — | — | 55 | 55 | ||||||||||
Cash distributions | — | (57,612 | ) | (8,965 | ) | (66,577 | ) | |||||||
Reimbursement of excess purchase price over carrying value of acquired assets | — | 750 | — | 750 | ||||||||||
Unit-based compensation | — | 750 | — | 750 | ||||||||||
Balances - June 30, 2015 | 35,456,862 | $ | 434,420 | $ | 14,169 | $ | 448,589 | |||||||
Balances - January 1, 2016 | 35,456,612 | $ | 380,845 | $ | 13,034 | $ | 393,879 | |||||||
Net income | — | 6,623 | 8,080 | 14,703 | ||||||||||
Issuance of restricted units | 13,800 | — | — | — | ||||||||||
Forfeiture of restricted units | (250 | ) | — | — | — | |||||||||
Cash distributions | — | (57,603 | ) | (9,119 | ) | (66,722 | ) | |||||||
Unit-based compensation | — | 486 | — | 486 | ||||||||||
Reimbursement of excess purchase price over carrying value of acquired assets | — | 1,875 | — | 1,875 | ||||||||||
Purchase of treasury units | (15,200 | ) | (330 | ) | — | (330 | ) | |||||||
Balances - June 30, 2016 | 35,454,962 | $ | 331,896 | $ | 11,995 | $ | 343,891 | |||||||
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 July 27, 2016.
MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
Six Months Ended | |||||||
June 30, | |||||||
2016 | 2015 | ||||||
Cash flows from operating activities: | |||||||
Net income | $ | 14,703 | $ | 28,209 | |||
Less: Income from discontinued operations, net of income taxes | — | (1,215 | ) | ||||
Net income from continuing operations | 14,703 | 26,994 | |||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 44,137 | 45,402 | |||||
Amortization of deferred debt issuance costs | 2,247 | 1,742 | |||||
Amortization of premium on notes payable | (153 | ) | (164 | ) | |||
Loss (gain) on sale of property, plant and equipment | 1,595 | 165 | |||||
Loss on impairment of goodwill | 4,145 | — | |||||
Equity in earnings of unconsolidated entities | (2,482 | ) | (3,389 | ) | |||
Derivative income | (1,125 | ) | (1,745 | ) | |||
Net cash received for commodity derivatives | 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 | 1,745 | |||||
Unit-based compensation | 486 | 750 | |||||
Cash distributions from WTLPG | 4,300 | 4,400 | |||||
Change in current assets and liabilities, excluding effects of acquisitions and dispositions: | |||||||
Accounts and other receivables | 23,995 | 58,689 | |||||
Product exchange receivables | 932 | 2,752 | |||||
Inventories | (14,766 | ) | 12,204 | ||||
Due from affiliates | 2,154 | 3,800 | |||||
Other current assets | 509 | (711 | ) | ||||
Trade and other accounts payable | (3,429 | ) | (46,283 | ) | |||
Product exchange payables | (3,923 | ) | 2,308 | ||||
Due to affiliates | (1,879 | ) | (118 | ) | |||
Income taxes payable | (615 | ) | (438 | ) | |||
Other accrued liabilities | 2,130 | (959 | ) | ||||
Change in other non-current assets and liabilities | (614 | ) | (1,709 | ) | |||
Net cash provided by continuing operating activities | 74,803 | 105,435 | |||||
Net cash used in discontinued operating activities | — | (1,351 | ) | ||||
Net cash provided by operating activities | 74,803 | 104,084 | |||||
Cash flows from investing activities: | |||||||
Payments for property, plant and equipment | (27,844 | ) | (28,027 | ) | |||
Acquisition of intangible assets | (2,150 | ) | — | ||||
Payments for plant turnaround costs | (1,184 | ) | (1,754 | ) | |||
Proceeds from sale of property, plant and equipment | 655 | 776 | |||||
Proceeds from involuntary conversion of property, plant and equipment | 9,100 | — | |||||
Net cash used in continuing investing activities | (21,423 | ) | (29,005 | ) | |||
Net cash provided by discontinued investing activities | — | 41,250 | |||||
Net cash provided by (used in) investing activities | (21,423 | ) | 12,245 | ||||
Cash flows from financing activities: | |||||||
Payments of long-term debt | (163,700 | ) | (151,000 | ) | |||
Proceeds from long-term debt | 180,700 | 101,000 | |||||
Proceeds from issuance of common units, net of issuance related costs | — | (269 | ) | ||||
General partner contribution | — | 55 | |||||
Purchase of treasury units | (330 | ) | — | ||||
Payment of debt issuance costs | (5,206 | ) | (306 | ) | |||
Reimbursement of excess purchase price over carrying value of acquired assets | 1,875 | 750 | |||||
Cash distributions paid | (66,722 | ) | (66,577 | ) | |||
Net cash used in financing activities | (53,383 | ) | (116,347 | ) | |||
Net decrease in cash | (3 | ) | (18 | ) | |||
Cash at beginning of period | 31 | 42 | |||||
Cash at end of period | $ | 28 | $ | 24 | |||
Non-cash additions to property, plant and equipment | $ | 989 | $ | 3,767 | |||
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 July 27, 2016.
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 June 30, 2016 and 2015
Three Months Ended June 30, | Variance | Percent Change | ||||||||||||
2016 | 2015 | |||||||||||||
(In thousands, except BBL per day) | ||||||||||||||
Revenues: | ||||||||||||||
Services | $ | 32,392 | $ | 34,708 | $ | (2,316 | ) | (7 | )% | |||||
Products | 28,329 | 34,579 | (6,250 | ) | (18 | )% | ||||||||
Total revenues | 60,721 | 69,287 | (8,566 | ) | (12 | )% | ||||||||
Cost of products sold | 23,471 | 30,150 | (6,679 | ) | (22 | )% | ||||||||
Operating expenses | 17,725 | 22,326 | (4,601 | ) | (21 | )% | ||||||||
Selling, general and administrative expenses | 1,007 | 938 | 69 | 7 | % | |||||||||
Depreciation and amortization | 10,078 | 9,617 | 461 | 5 | % | |||||||||
8,440 | 6,256 | 2,184 | 35 | % | ||||||||||
Other operating loss | — | (195 | ) | 195 | (100 | )% | ||||||||
Operating income | $ | 8,440 | $ | 6,061 | $ | 2,379 | 39 | % | ||||||
Lubricant sales volumes (gallons) | 5,194 | 5,984 | (790 | ) | (13 | )% | ||||||||
Shore-based throughput volumes (gallons) | 26,187 | 43,836 | (17,649 | ) | (40 | )% | ||||||||
Smackover refinery throughput volumes (BBL per day) | 6,567 | 6,524 | 43 | 1 | % | |||||||||
Corpus Christi crude terminal (BBL per day) | 74,565 | 169,787 | (95,222 | ) | (56 | )% | ||||||||
Comparative Results of Operations for the Six Months Ended June 30, 2016 and 2015
Six Months Ended June 30, | Variance | Percent Change | ||||||||||||
2016 | 2015 | |||||||||||||
(In thousands, except BBL per day) | ||||||||||||||
Revenues: | ||||||||||||||
Services | $ | 65,549 | $ | 69,749 | $ | (4,200 | ) | (6 | )% | |||||
Products | 56,522 | 69,572 | (13,050 | ) | (19 | )% | ||||||||
Total revenues | 122,071 | 139,321 | (17,250 | ) | (12 | )% | ||||||||
Cost of products sold | 47,821 | 61,311 | (13,490 | ) | (22 | )% | ||||||||
Operating expenses | 36,441 | 42,679 | (6,238 | ) | (15 | )% | ||||||||
Selling, general and administrative expenses | 2,107 | 1,811 | 296 | 16 | % | |||||||||
Depreciation and amortization | 20,076 | 19,406 | 670 | 3 | % | |||||||||
15,626 | 14,114 | 1,512 | 11 | % | ||||||||||
Other operating income (loss) | 100 | (201 | ) | 301 | (150 | )% | ||||||||
Operating income | $ | 15,726 | $ | 13,913 | $ | 1,813 | 13 | % | ||||||
Lubricant sales volumes (gallons) | 10,340 | 12,033 | (1,693 | ) | (14 | )% | ||||||||
Shore-based throughput volumes (gallons) | 51,746 | 86,360 | (34,614 | ) | (40 | )% | ||||||||
Smackover refinery throughput volumes (BBL per day) | 5,503 | 6,033 | (530 | ) | (9 | )% | ||||||||
Corpus Christi crude terminal (BBL per day) | 83,600 | 175,151 | (91,551 | ) | (52 | )% | ||||||||
MARTIN MIDSTREAM PARTNERS L.P.
SEGMENT OPERATING INCOME
(Unaudited)
(Dollars and volumes in thousands, except BBL per day)
Natural Gas Services Segment
Comparative Results of Operations for the Three Months Ended June 30, 2016 and 2015
Three Months Ended June 30, | Variance | Percent Change | ||||||||||||
2016 | 2015 | |||||||||||||
(In thousands) | ||||||||||||||
Revenues: | ||||||||||||||
Services | $ | 15,403 | $ | 16,564 | $ | (1,161 | ) | (7 | )% | |||||
Products | 58,899 | 97,786 | (38,887 | ) | (40 | )% | ||||||||
Total revenues | 74,302 | 114,350 | (40,048 | ) | (35 | )% | ||||||||
Cost of products sold | 56,233 | 89,074 | (32,841 | ) | (37 | )% | ||||||||
Operating expenses | 6,138 | 5,727 | 411 | 7 | % | |||||||||
Selling, general and administrative expenses | 1,807 | 2,364 | (557 | ) | (24 | )% | ||||||||
Depreciation and amortization | 6,983 | 8,373 | (1,390 | ) | (17 | )% | ||||||||
3,141 | 8,812 | (5,671 | ) | (64 | )% | |||||||||
Other operating loss | (96 | ) | (3 | ) | (93 | ) | 3,100 | % | ||||||
Operating income | $ | 3,045 | $ | 8,809 | $ | (5,764 | ) | (65 | )% | |||||
Distributions from unconsolidated entities | $ | 1,800 | $ | 2,300 | $ | (500 | ) | (22 | )% | |||||
NGL sales volumes (Bbls) | 1,726 | 3,220 | (1,494 | ) | (46 | )% | ||||||||
Comparative Results of Operations for the Six Months Ended June 30, 2016 and 2015
Six Months Ended June 30, | Variance | Percent Change | ||||||||||||
2016 | 2015 | |||||||||||||
(In thousands) | ||||||||||||||
Revenues: | ||||||||||||||
Services | $ | 31,500 | $ | 33,051 | $ | (1,551 | ) | (5 | )% | |||||
Products | 149,990 | 244,089 | (94,099 | ) | (39 | )% | ||||||||
Total revenues | 181,490 | 277,140 | (95,650 | ) | (35 | )% | ||||||||
Cost of products sold | 135,581 | 227,241 | (91,660 | ) | (40 | )% | ||||||||
Operating expenses | 11,657 | 11,416 | 241 | 2 | % | |||||||||
Selling, general and administrative expenses | 4,111 | 4,465 | (354 | ) | (8 | )% | ||||||||
Depreciation and amortization | 13,957 | 16,775 | (2,818 | ) | (17 | )% | ||||||||
16,184 | 17,243 | (1,059 | ) | (6 | )% | |||||||||
Other operating loss | (96 | ) | (7 | ) | (89 | ) | 1,271 | % | ||||||
Operating income | $ | 16,088 | $ | 17,236 | $ | (1,148 | ) | (7 | )% | |||||
Distributions from unconsolidated entities | $ | 4,300 | $ | 4,400 | $ | (100 | ) | (2 | )% | |||||
NGL sales volumes (Bbls) | 4,928 | 7,089 | (2,161 | ) | (30 | )% | ||||||||
MARTIN MIDSTREAM PARTNERS L.P.
SEGMENT OPERATING INCOME
(Unaudited)
(Dollars and volumes in thousands, except BBL per day)
Sulfur Services Segment
Comparative Results of Operations for the Three Months Ended June 30, 2016 and 2015
Three Months Ended June 30, | Variance | Percent Change | ||||||||||||
2016 | 2015 | |||||||||||||
(In thousands) | ||||||||||||||
Revenues: | ||||||||||||||
Services | $ | 2,700 | $ | 3,090 | $ | (390 | ) | (13 | )% | |||||
Products | 39,588 | 45,284 | (5,696 | ) | (13 | )% | ||||||||
Total revenues | 42,288 | 48,374 | (6,086 | ) | (13 | )% | ||||||||
Cost of products sold | 24,790 | 33,613 | (8,823 | ) | (26 | )% | ||||||||
Operating expenses | 3,442 | 3,987 | (545 | ) | (14 | )% | ||||||||
Selling, general and administrative expenses | 930 | 863 | 67 | 8 | % | |||||||||
Depreciation and amortization | 2,011 | 2,105 | (94 | ) | (4 | )% | ||||||||
11,115 | 7,806 | 3,309 | 42 | % | ||||||||||
Other operating loss | (16 | ) | — | (16 | ) | |||||||||
Operating income | $ | 11,099 | $ | 7,806 | $ | 3,293 | 42 | % | ||||||
Sulfur (long tons) | 181 | 222 | (41 | ) | (18 | )% | ||||||||
Fertilizer (long tons) | 87 | 82 | 5 | 6 | % | |||||||||
Total sulfur services volumes (long tons) | 268 | 304 | (36 | ) | (12 | )% | ||||||||
Comparative Results of Operations for the Six Months Ended June 30, 2016 and 2015
Six Months Ended June 30, | Variance | Percent Change | ||||||||||||
2016 | 2015 | |||||||||||||
(In thousands) | ||||||||||||||
Revenues: | ||||||||||||||
Services | $ | 5,400 | $ | 6,180 | $ | (780 | ) | (13 | )% | |||||
Products | 79,063 | 95,331 | (16,268 | ) | (17 | )% | ||||||||
Total revenues | 84,463 | 101,511 | (17,048 | ) | (17 | )% | ||||||||
Cost of products sold | 52,405 | 69,726 | (17,321 | ) | (25 | )% | ||||||||
Operating expenses | 6,199 | 8,270 | (2,071 | ) | (25 | )% | ||||||||
Selling, general and administrative expenses | 1,888 | 1,925 | (37 | ) | (2 | )% | ||||||||
Depreciation and amortization | 3,981 | 4,231 | (250 | ) | (6 | )% | ||||||||
19,990 | 17,359 | 2,631 | 15 | % | ||||||||||
Other operating loss | (32 | ) | — | (32 | ) | |||||||||
Operating income | $ | 19,958 | $ | 17,359 | $ | 2,599 | 15 | % | ||||||
Sulfur (long tons) | 338 | 438 | (100 | ) | (23 | )% | ||||||||
Fertilizer (long tons) | 170 | 178 | (8 | ) | (4 | )% | ||||||||
Total sulfur services volumes (long tons) | 508 | 616 | (108 | ) | (18 | )% | ||||||||
MARTIN MIDSTREAM PARTNERS L.P.
SEGMENT OPERATING INCOME
(Unaudited)
(Dollars and volumes in thousands, except BBL per day)
Marine Transportation Segment
Comparative Results of Operations for the Three Months Ended June 30, 2016 and 2015
Three Months Ended June 30, | Variance | Percent Change | |||||||||||
2016 | 2015 | ||||||||||||
(In thousands) | |||||||||||||
Revenues | $ | 15,032 | $ | 20,886 | $ | (5,854 | ) | (28)% | |||||
Operating expenses | 14,231 | 16,523 | (2,292 | ) | (14)% | ||||||||
Selling, general and administrative expenses | 158 | 350 | (192 | ) | (55)% | ||||||||
Loss on impairment of goodwill | 4,145 | — | 4,145 | ||||||||||
Depreciation and amortization | 3,017 | 2,590 | 427 | 16% | |||||||||
(6,519 | ) | 1,423 | (7,942 | ) | (558)% | ||||||||
Other operating income (loss) | (1,567 | ) | 31 | (1,598 | ) | (5,155)% | |||||||
Operating income (loss) | $ | (8,086 | ) | $ | 1,454 | $ | (9,540 | ) | (656)% | ||||
Comparative Results of Operations for the Six Months Ended June 30, 2016 and 2015
Six Months Ended June 30, | Variance | Percent Change | |||||||||||
2016 | 2015 | ||||||||||||
(In thousands) | |||||||||||||
Revenues | $ | 31,934 | $ | 42,832 | $ | (10,898 | ) | (25)% | |||||
Operating expenses | 29,068 | 32,429 | (3,361 | ) | (10)% | ||||||||
Selling, general and administrative expenses | (261 | ) | 310 | (571 | ) | (184)% | |||||||
Loss on impairment of goodwill | 4,145 | — | 4,145 | ||||||||||
Depreciation and amortization | 6,123 | 4,990 | 1,133 | 23% | |||||||||
Operating income | $ | (7,141 | ) | $ | 5,103 | $ | (12,244 | ) | (240)% | ||||
Other operating income (loss) | (1,567 | ) | 31 | (1,598 | ) | (5,155)% | |||||||
Operating income (loss) | $ | (8,708 | ) | $ | 5,134 | $ | (13,842 | ) | (270)% | ||||
Distributions from Unconsolidated Entities
Comparative Results of Operations for the Three Months Ended June 30, 2016 and 2015
Three Months Ended June 30, | Variance | Percent Change | |||||||||||
2016 | 2015 | ||||||||||||
(In thousands) | |||||||||||||
Distributions from WTLPG | $ | 1,800 | $ | 2,300 | $ | (500 | ) | (22)% | |||||
Comparative Results of Operations for the Six Months Ended June 30, 2016 and 2015
Six Months Ended June 30, | Variance | Percent Change | ||||||||||||
2016 | 2015 | |||||||||||||
(In thousands) | ||||||||||||||
Distributions from WTLPG | $ | 4,300 | $ | 4,400 | $ | (100 | ) | (2 | )% | |||||
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 six months ended June 30, 2016 and 2015.
Reconciliation of EBITDA, Adjusted EBITDA, and Distributable Cash Flow
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
(in thousands) | |||||||||||||||
Net income (loss) | $ | (1,211 | ) | $ | 10,961 | $ | 14,703 | $ | 28,209 | ||||||
Less: Income from discontinued operations, net of income taxes | — | — | — | (1,215 | ) | ||||||||||
Income (loss) from continuing operations | (1,211 | ) | 10,961 | 14,703 | 26,994 | ||||||||||
Adjustments: | |||||||||||||||
Interest expense | 12,155 | 9,925 | 22,267 | 20,471 | |||||||||||
Income tax expense | 191 | 314 | 242 | 614 | |||||||||||
Depreciation and amortization | 22,089 | 22,685 | 44,137 | 45,402 | |||||||||||
EBITDA | 33,224 | 43,885 | 81,349 | 93,481 | |||||||||||
Adjustments: | |||||||||||||||
Equity in earnings of unconsolidated entities | (805 | ) | (1,649 | ) | (2,482 | ) | (3,389 | ) | |||||||
(Gain) loss on sale of property, plant and equipment | 1,679 | 153 | 1,595 | 165 | |||||||||||
Loss on impairment of goodwill | 4,145 | — | 4,145 | — | |||||||||||
Unrealized mark-to-market on commodity derivatives | 1,327 | — | 1,537 | — | |||||||||||
Distributions from unconsolidated entities | 1,800 | 2,300 | 4,300 | 4,400 | |||||||||||
Unit-based compensation | 264 | 351 | 486 | 750 | |||||||||||
Adjusted EBITDA | 41,634 | 45,040 | 90,930 | 95,407 | |||||||||||
Adjustments: | |||||||||||||||
Interest expense | (12,155 | ) | (9,925 | ) | (22,267 | ) | (20,471 | ) | |||||||
Income tax expense | (191 | ) | (314 | ) | (242 | ) | (614 | ) | |||||||
Amortization of debt premium | (76 | ) | (82 | ) | (153 | ) | (164 | ) | |||||||
Amortization of deferred debt issuance costs | 1,532 | 874 | 2,247 | 1,742 | |||||||||||
Non-cash mark-to-market on interest rate derivatives | — | — | (206 | ) | — | ||||||||||
Payments for plant turnaround costs | (193 | ) | (286 | ) | (1,184 | ) | (1,754 | ) | |||||||
Maintenance capital expenditures | (5,165 | ) | (3,424 | ) | (11,209 | ) | (5,183 | ) | |||||||
Distributable Cash Flow | $ | 25,386 | $ | 31,883 | $ | 57,916 | $ | 68,963 | |||||||