Martin Midstream Partners Reports Fourth Quarter and Full Year 2023 Financial Results and Releases 2024 Guidance

  • Total adjusted leverage of 3.75 times as of December 31, 2023
  • Reported net income of $0.5 million for the fourth quarter and net loss of $4.5 million, which includes a $5.1 million impact from the loss on extinguishment of debt, for the year ended December 31, 2023
  • Reported adjusted EBITDA of $29.2 million and $117.7 million, after giving effect to the May 2023 exit of the butane optimization business, which incurred adjusted EBITDA of zero and negative adjusted EBITDA of $15.1 million, for the fourth quarter and year ended December 31, 2023, respectively
  • Releases 2024 adjusted EBITDA Guidance of $116.1 million, growth capital expenditures of $17.4 million, and maintenance capital expenditures of $32.0 million

KILGORE, Texas--()--Martin Midstream Partners L.P. (Nasdaq:MMLP) (“MMLP” or the “Partnership”) today announced its financial results for the three months and year ended December 31, 2023.

“Fiscal year 2023 was significant for the Partnership as we focused on debt reduction and stability in our earnings by concentrating on our diversified refinery services assets and exiting the butane optimization business,” said Bob Bondurant, President and Chief Executive Officer of Martin Midstream GP LLC, the general partner of the Partnership. “We exceeded our full year adjusted EBITDA guidance by $2.5 million, excluding losses related to the exit of our butane optimization business, and met our long-term goal of adjusted leverage at or below 3.75 times. The Partnership had a strong fourth quarter, as each of our four operating segments either met or exceeded guidance, even as we experienced headwinds in the lubricants business and downtime in our marine transportation business due to accelerated regulatory inspections, demonstrating the value of our diversified business model.”

“In the fourth quarter, we reduced debt by $20.0 million, bringing 2023 full year debt reduction to $73.5 million, resulting in leverage of 3.75 times at December 31, 2023 compared to 4.53 times at December 31, 2022. While we have reached our stated adjusted leverage goal of 3.75 times, timing of our future cash flows and capital expenditures may result in a nominal short-term increase in the ratio. As such the Partnership intends to continue to concentrate on debt reduction to maintain our adjusted leverage at or below 3.75 times on a sustainable basis.”

“During 2023, we started construction on an oleum tower located within our Plainview, Texas sulfuric acid plant. The expansion will provide feedstock to our joint venture, DSM Semichem LLC, to produce electronic level sulfuric acid used for applications in the semiconductor industry. We anticipate the project to be complete in the first half of 2024 with a capital spend of $10.4 million this year, which along with our $6.5 million of cash contribution to the joint venture, makes up the majority of our anticipated growth capital expenditures for the year. We anticipate this project will begin returning cash flows to the Partnership by the fourth quarter of 2024.”

FOURTH QUARTER 2023 OPERATING RESULTS BY BUSINESS SEGMENT

TERMINALLING AND STORAGE ("T&S")

T&S operating income was $3.9 million and $1.4 million for the three months ended December 31, 2023 and 2022, respectively.

Adjusted segment EBITDA for T&S was $9.0 million and $7.3 million for the three months ended December 31, 2023 and 2022, respectively, reflecting contractual index-based fee increases combined with reduced operating expenses across our divisions.

TRANSPORTATION

Transportation operating income was $8.6 million and $11.1 million for the three months ended December 31, 2023 and 2022, respectively.

Adjusted segment EBITDA for Transportation was $12.0 million and $14.7 million for the three months ended December 31, 2023 and 2022, respectively, primarily reflecting slightly higher mileage in our land transportation division, offset by downtime associated with regulatory maintenance in our marine transportation division, and increased expenses across both divisions.

SULFUR SERVICES

Sulfur Services operating income was $4.8 million and $9.1 million for the three months ended December 31, 2023 and 2022, respectively.

Adjusted segment EBITDA for Sulfur Services was $7.4 million and $5.7 million for the three months ended December 31, 2023 and 2022, respectively, primarily reflecting increased fertilizer sales volume and increased operating fees associated with higher prilled sulfur volume.

SPECIALTY PRODUCTS

Specialty Products operating income (loss) was $4.0 million and $(0.9) million for the three months ended December 31, 2023 and 2022, respectively. Butane optimization operating income (loss) was $0.0 million and $(4.7) million for the three months ended December 31, 2023 and 2022, respectively.

Adjusted segment EBITDA for Specialty Products was $4.9 million and $(5.8) million for the three months ended December 31, 2023 and 2022, respectively.  Included in the Specialty Products results is adjusted EBITDA of $0.0 million and $(10.7) million for the three months ended December 31, 2023 and 2022, respectively, attributable to the butane optimization business.  Adjusted Segment EBITDA for Specialty Products after giving effect to the May 2023 exit of the butane optimization business was $4.9 million and $4.9 million for the three months ended December 31, 2023 and 2022, respectively, reflecting improved volumes and margins in our grease business offset by higher product costs in our lubricants business.

UNALLOCATED SELLING, GENERAL AND ADMINISTRATIVE EXPENSE ("USGA")

USGA expenses included in operating income were $4.1 million for each of the three months ended December 31, 2023 and 2022, respectively.

USGA expenses included in adjusted EBITDA were $4.1 million for each of the three months ended December 31, 2023 and 2022, respectively.

CAPITALIZATION

At December 31, 2023, the Partnership had $442.5 million of total debt outstanding, including $42.5 million drawn on its $175.0 million revolving credit facility maturing in 2027 and $400.0 million of senior secured second lien notes due 2028. At December 31, 2023, the Partnership had liquidity of approximately $109.0 million from available capacity under its revolving credit facility. The Partnership’s leverage ratio, as calculated under the revolving credit facility, was 3.75 times at December 31, 2023, compared to 3.95 times at September 30, 2023, a reduction of 0.20 times. The Partnership was in compliance with all debt covenants as of December 31, 2023.

RESULTS OF OPERATIONS

The Partnership had net income of $0.5 million, or $0.01 per limited partner unit, for the three months ended December 31, 2023. The Partnership had a net loss of $0.4 million, a loss of $0.01 per limited partner unit, for the three months ended December 31, 2022. Adjusted EBITDA was $29.2 million for the three months ended December 31, 2023 compared to $17.8 million for the three months ended December 31, 2022. Adjusted EBITDA after giving effect to the May 2023 exit of the butane optimization business for the three months ended December 31, 2023 was $29.2 million compared to $17.8 million for the three months ended December 31, 2022. Net cash provided by operating activities was $31.4 million for the three months ended December 31, 2023 compared to $32.9 million for the three months ended December 31, 2022. Distributable cash flow was $8.5 million for the three months ended December 31, 2023 compared to $9.0 million for the three months ended December 31, 2022.

The Partnership had a net loss of $4.5 million, a loss of $0.11 per limited partner unit, for the year ended December 31, 2023. The Partnership had a net loss of $10.3 million, a loss of $0.26 per limited partner unit, for the year ended December 31, 2022. Adjusted EBITDA for the year ended December 31, 2023 was $102.6 million compared to $114.9 million for the year ended December 31, 2022. Adjusted EBITDA after giving effect to the May 2023 exit of the butane optimization business for the year ended December 31, 2023 was $117.7 million compared to $122.0 million for the year ended December 31, 2022. Net cash provided by operating activities was $137.5 million for the year ended December 31, 2023 compared to $16.1 million for the year ended December 31, 2022. Distributable cash flow was $32.8 million for the year ended December 31, 2023 compared to $45.1 million for the year ended December 31, 2022.

Revenues were $181.1 million for the three months ended December 31, 2023 compared to $243.4 million for the three months ended December 31, 2022. Revenues associated with our butane optimization business were $0.0 million for the three months ended December 31, 2023 and $55.9 million for the three months ended December 31, 2022.

Revenues were $798.0 million for the year ended December 31, 2023 compared to $1.019 billion for the year ended December 31, 2022. Revenues associated with our butane optimization business were $70.5 million for the year ended December 31, 2023 and $172.8 million for the year ended December 31, 2022.

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 fourth quarter 2023 to the Partnership's adjusted EBITDA guidance for the fourth quarter 2023.

2024 FINANCIAL GUIDANCE

The Partnership expects full year 2024 Adjusted EBITDA of approximately $116.1 million, growth capital expenditures of approximately $17.4 million, with $16.9 million dedicated to the DSM Semichem joint venture, and maintenance capital expenditures of $32.0 million. More detailed 2024 Financial Guidance is provided as an attachment included in the Current Report on Form 8-K to which this press release is included.

MMLP does not intend at this time to provide financial guidance beyond 2024.

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.

2023 K-1 TAX PACKAGES

The timing of the availability of MMLP’s K-1 tax packages for 2023 is dependent upon whether and/or when recently proposed legislation (H.R. 7024), which includes proposed changes in tax law which would be applied retroactively to the 2023 tax year, is enacted. As currently written, certain provisions in H.R. 7024 would lower MMLP’s taxable income for 2023 compared to existing tax law. Barring any changes in tax law, MMLP’s K-1 tax packages, including all information to fiduciaries for common units owned in tax exempt accounts, could be made available online through our website at www.MMLP.com on or before February 29, 2024 and the mailing of the tax packages would be completed by March 8, 2024. Should deliberations over the passage of H.R. 7024 impact this timeline, we will issue a press release to update our investors on the timing of the availability of the K-1 tax packages.

INVESTORS CONFERENCE CALL

Date: Thursday, February 15, 2024
Time: 8:00 a.m. CT (please dial in by 7:55 a.m.)
Dial In #: (888) 330-2384
Conference ID: 8536096
Replay Dial In # (800) 770-2030 – Conference ID: 8536096

A webcast of the conference call 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 LP, 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 and (ii) 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), 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 and 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.

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 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 and adjusted free 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.

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 BALANCE SHEETS

(Dollars in thousands)

   

 

 

December 31,

 

 

2023

 

2022

Assets

 

 

 

 

Cash

 

$

54

 

 

$

45

 

Trade and accrued accounts receivable, less allowance for doubtful accounts of $530 and $496, respectively

 

 

53,293

 

 

 

79,641

 

Inventories

 

 

43,822

 

 

 

109,798

 

Due from affiliates

 

 

7,924

 

 

 

8,010

 

Other current assets

 

 

9,220

 

 

 

13,633

 

Total current assets

 

 

114,313

 

 

 

211,127

 

 

 

 

 

 

Property, plant and equipment, at cost

 

 

918,786

 

 

 

903,535

 

Accumulated depreciation

 

 

(612,993

)

 

 

(584,245

)

Property, plant and equipment, net

 

 

305,793

 

 

 

319,290

 

 

 

 

 

 

Goodwill

 

 

16,671

 

 

 

16,671

 

Right-of-use assets

 

 

60,359

 

 

 

34,963

 

Deferred income taxes, net

 

 

10,200

 

 

 

14,386

 

Intangibles and other assets, net

 

 

2,039

 

 

 

2,414

 

 

 

$

509,375

 

 

$

598,851

 

Liabilities and Partners’ Capital (Deficit)

 

 

 

 

Current portion of long term debt and finance lease obligations

 

$

 

 

$

9

 

Trade and other accounts payable

 

 

51,653

 

 

 

68,198

 

Product exchange payables

 

 

426

 

 

 

32

 

Due to affiliates

 

 

6,334

 

 

 

8,947

 

Income taxes payable

 

 

652

 

 

 

665

 

Other accrued liabilities

 

 

41,499

 

 

 

33,074

 

Total current liabilities

 

 

100,564

 

 

 

110,925

 

 

 

 

 

 

Long-term debt, net

 

 

421,173

 

 

 

512,871

 

Operating lease liabilities

 

 

45,684

 

 

 

26,268

 

Other long-term obligations

 

 

6,578

 

 

 

8,232

 

Total liabilities

 

 

573,999

 

 

 

658,296

 

Commitments and contingencies

 

 

 

 

Partners’ capital (deficit)

 

 

(64,624

)

 

 

(59,445

)

Total partners’ capital (deficit)

 

 

(64,624

)

 

 

(59,445

)

 

 

$

509,375

 

 

$

598,851

 

MARTIN MIDSTREAM PARTNERS L.P.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars in thousands, except per unit amounts)

 

 

 

Year Ended December 31,

 

 

2023

 

2022

 

2021

Revenues:

 

 

 

 

 

 

Terminalling and storage *

 

$

86,514

 

 

$

80,193

 

 

$

75,223

 

Transportation *

 

 

223,677

 

 

 

219,008

 

 

 

144,314

 

Sulfur services

 

 

13,430

 

 

 

12,337

 

 

 

11,799

 

Product sales: *

 

 

 

 

 

 

Specialty products

 

 

346,777

 

 

 

540,513

 

 

 

517,852

 

Sulfur services

 

 

127,565

 

 

 

166,827

 

 

 

133,243

 

 

 

 

474,342

 

 

 

707,340

 

 

 

651,095

 

Total revenues

 

 

797,963

 

 

 

1,018,878

 

 

 

882,431

 

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

 

Cost of products sold: (excluding depreciation and amortization)

 

 

 

 

 

 

Specialty products *

 

 

305,903

 

 

 

503,225

 

 

 

443,896

 

Sulfur services *

 

 

83,702

 

 

 

120,062

 

 

 

89,134

 

Terminalling and storage *

 

 

75

 

 

 

19

 

 

 

68

 

 

 

 

389,680

 

 

 

623,306

 

 

 

533,098

 

Expenses:

 

 

 

 

 

 

Operating expenses *

 

 

252,211

 

 

 

251,886

 

 

 

193,952

 

Selling, general and administrative *

 

 

40,826

 

 

 

41,812

 

 

 

41,012

 

Depreciation and amortization

 

 

49,895

 

 

 

56,280

 

 

 

56,751

 

Total costs and expenses

 

 

732,612

 

 

 

973,284

 

 

 

824,813

 

Other operating income (loss), net

 

 

1,373

 

 

 

5,669

 

 

 

(534

)

Gain on involuntary conversion of property, plant and equipment

 

 

 

 

 

 

 

 

196

 

Operating income

 

 

66,724

 

 

 

51,263

 

 

 

57,280

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

Interest expense, net

 

 

(60,290

)

 

 

(53,665

)

 

 

(54,107

)

Loss on extinguishment of debt

 

 

(5,121

)

 

 

 

 

 

 

Other, net

 

 

56

 

 

 

(5

)

 

 

(4

)

Total other income (expense)

 

 

(65,355

)

 

 

(53,670

)

 

 

(54,111

)

Net income (loss) before taxes

 

 

1,369

 

 

 

(2,407

)

 

 

3,169

 

Income tax expense

 

 

(5,918

)

 

 

(7,927

)

 

 

(3,380

)

Net loss

 

 

(4,549

)

 

 

(10,334

)

 

 

(211

)

Less general partner's interest in net loss

 

 

91

 

 

 

207

 

 

 

4

 

Less loss allocable to unvested restricted units

 

 

14

 

 

 

40

 

 

 

 

Limited partners' interest in net loss

 

$

(4,444

)

 

$

(10,087

)

 

$

(207

)

 

 

 

 

 

 

 

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

 

$

(0.11

)

 

$

(0.26

)

 

$

(0.01

)

Weighted average limited partner units - basic and diluted

 

 

38,771,657

 

 

 

38,726,048

 

 

 

38,689,041

 

 

*Related Party Transactions Shown Below

 

MARTIN MIDSTREAM PARTNERS L.P.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars in thousands, except per unit amounts)

 

*Related Party Transactions Included Above

 
 

 

 

Year Ended December 31,

 

 

2023

 

2022

 

2021

Revenues:

 

 

 

 

 

 

Terminalling and storage

 

$

72,138

 

$

66,867

 

$

62,677

Transportation

 

 

29,276

 

 

28,393

 

 

20,046

Product sales

 

 

8,767

 

 

554

 

 

479

Costs and expenses:

 

 

 

 

 

 

Cost of products sold: (excluding depreciation and amortization)

 

 

 

 

 

 

Specialty products

 

 

35,930

 

 

39,356

 

 

27,856

Sulfur services

 

 

11,182

 

 

10,717

 

 

9,980

Terminalling and storage

 

 

75

 

 

19

 

 

10

Expenses:

 

 

 

 

 

 

Operating expenses

 

 

100,851

 

 

93,630

 

 

78,607

Selling, general and administrative

 

 

32,021

 

 

31,758

 

 

32,924

MARTIN MIDSTREAM PARTNERS L.P.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Dollars in thousands

 

 

 

Year Ended December 31,

 

 

2023

 

2022

 

2021

 

 

 

 

 

 

 

Net loss

 

$

(4,549

)

 

$

(10,334

)

 

$

(211

)

Changes in fair values of commodity cash flow hedges

 

$

 

 

$

(816

)

 

$

816

 

Comprehensive income (loss)

 

$

(4,549

)

 

$

(11,150

)

 

$

605

 

MARTIN MIDSTREAM PARTNERS L.P.

CONSOLIDATED STATEMENTS OF CAPITAL

(Dollars in thousands)

 

 

 

Partners’ Capital (Deficit)

 

 

 

 

Common

 

General Partner
Amount

 

Accumulated
Other
Comprehensive
Income

 

 

 

 

Units

 

Amount

 

 

 

Total

Balances – December 31, 2020

 

38,851,174

 

 

$

(48,776

)

 

$

1,905

 

 

$

 

 

 

(46,871

)

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

 

 

(207

)

 

 

(4

)

 

 

 

 

 

(211

)

Issuance of time-based restricted units

 

42,168

 

 

 

 

 

 

 

 

 

 

 

 

 

General partner contribution

 

 

 

 

 

 

 

3

 

 

 

 

 

 

3

 

Cash distributions

 

 

 

 

(775

)

 

 

(16

)

 

 

 

 

 

(791

)

Changes in fair values of commodity cash flow hedges

 

 

 

 

 

 

 

 

 

 

816

 

 

 

816

 

Excess carrying value of the assets over the purchase price paid by Martin Resource Management

 

 

 

 

(1,350

)

 

 

 

 

 

 

 

 

(1,350

)

Unit-based compensation

 

 

 

 

384

 

 

 

 

 

 

 

 

 

384

 

Purchase of treasury units

 

(7,156

)

 

 

(17

)

 

 

 

 

 

 

 

 

(17

)

Balances – December 31, 2021

 

38,802,750

 

 

 

(50,741

)

 

 

1,888

 

 

 

816

 

 

 

(48,037

)

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

 

 

(10,127

)

 

 

(207

)

 

 

 

 

 

(10,334

)

Issuance of time-based restricted units

 

48,000

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash distributions

 

 

 

 

(777

)

 

 

(16

)

 

 

 

 

 

(793

)

Changes in fair values of commodity cash flow hedges

 

 

 

 

 

 

 

 

 

 

(816

)

 

 

(816

)

Excess purchase price over carrying value of acquired assets

 

 

 

 

374

 

 

 

 

 

 

 

 

 

374

 

Unit-based compensation

 

 

 

 

161

 

 

 

 

 

 

 

 

 

161

 

Balances – December 31, 2022

 

38,850,750

 

 

 

(61,110

)

 

 

1,665

 

 

 

 

 

 

(59,445

)

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

 

 

(4,458

)

 

 

(91

)

 

 

 

 

 

(4,549

)

Issuance of time-based restricted units

 

64,056

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash distributions

 

 

 

 

(777

)

 

 

(16

)

 

 

 

 

 

(793

)

Unit-based compensation

 

 

 

 

163

 

 

 

 

 

 

 

 

 

163

 

Balances – December 31, 2023

 

38,914,806

 

 

$

(66,182

)

 

$

1,558

 

 

$

 

 

$

(64,624

)

MARTIN MIDSTREAM PARTNERS L.P.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

 

 

 

Year Ended December 31,

 

 

2023

 

2022

 

2021

Cash flows from operating activities:

 

 

 

 

 

 

Net loss

 

$

(4,549

)

 

$

(10,334

)

 

$

(211

)

Adjustments to reconcile net loss to net cash provided by operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

49,895

 

 

 

56,280

 

 

 

56,751

 

Amortization and write-off of deferred debt issue costs

 

 

3,978

 

 

 

3,152

 

 

 

3,367

 

Amortization of discount on notes payable

 

 

2,200

 

 

 

 

 

 

 

Deferred income tax expense

 

 

4,186

 

 

 

5,744

 

 

 

2,432

 

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

 

 

(1,373

)

 

 

(5,669

)

 

 

534

 

Gain on involuntary conversion of property, plant and equipment

 

 

 

 

 

 

 

 

(196

)

Loss on extinguishment of debt

 

 

5,121

 

 

 

 

 

 

 

Derivative (income) loss

 

 

 

 

 

(901

)

 

 

5,593

 

Net cash received (paid) for commodity derivatives

 

 

 

 

 

85

 

 

 

(4,984

)

Unit-based compensation

 

 

163

 

 

 

161

 

 

 

384

 

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

 

 

 

 

 

 

Accounts and other receivables

 

 

26,348

 

 

 

4,579

 

 

 

(31,448

)

Inventories

 

 

65,976

 

 

 

(47,678

)

 

 

(8,334

)

Due from affiliates

 

 

86

 

 

 

6,399

 

 

 

398

 

Other current assets

 

 

4,739

 

 

 

(1,479

)

 

 

(3,552

)

Trade and other accounts payable

 

 

(17,539

)

 

 

486

 

 

 

14,331

 

Product exchange payables

 

 

394

 

 

 

(1,374

)

 

 

1,033

 

Due to affiliates

 

 

(2,613

)

 

 

7,123

 

 

 

1,389

 

Income taxes payable

 

 

(13

)

 

 

280

 

 

 

(171

)

Other accrued liabilities

 

 

2,880

 

 

 

(2,087

)

 

 

(2,236

)

Change in other non-current assets and liabilities

 

 

(2,411

)

 

 

1,381

 

 

 

649

 

Net cash provided by operating activities

 

 

137,468

 

 

 

16,148

 

 

 

35,729

 

Cash flows from investing activities:

 

 

 

 

 

 

Payments for property, plant, and equipment

 

 

(34,317

)

 

 

(27,237

)

 

 

(16,059

)

Payments for plant turnaround costs

 

 

(4,825

)

 

 

(5,176

)

 

 

(4,109

)

Proceeds from sale of property, plant, and equipment

 

 

5,482

 

 

 

7,769

 

 

 

643

 

Proceeds from involuntary conversion of property, plant and equipment

 

 

 

 

 

 

 

 

284

 

Net cash used in investing activities

 

 

(33,660

)

 

 

(24,644

)

 

 

(19,241

)

Cash flows from financing activities:

 

 

 

 

 

 

Payments of long-term debt

 

 

(632,197

)

 

 

(393,740

)

 

 

(333,790

)

Payments under finance lease obligations

 

 

(9

)

 

 

(279

)

 

 

(2,707

)

Proceeds from long-term debt

 

 

543,489

 

 

 

404,650

 

 

 

316,500

 

General partner contributions

 

 

 

 

 

 

 

 

3

 

Excess purchase price over carrying value of acquired assets

 

 

 

 

 

(1,285

)

 

 

 

Purchase of treasury units

 

 

 

 

 

 

 

 

(17

)

Payments of debt issuance costs

 

 

(14,289

)

 

 

(64

)

 

 

(592

)

Cash distributions paid

 

 

(793

)

 

 

(793

)

 

 

(791

)

Net cash provided by (used in) financing activities

 

 

(103,799

)

 

 

8,489

 

 

 

(21,394

)

 

 

 

 

 

 

 

Net increase (decrease) in cash

 

 

9

 

 

 

(7

)

 

 

(4,906

)

Cash at beginning of year

 

 

45

 

 

 

52

 

 

 

4,958

 

Cash at end of year

 

$

54

 

 

$

45

 

 

$

52

 

 

 

 

 

 

 

 

MARTIN MIDSTREAM PARTNERS L.P.

SEGMENT OPERATING INCOME

(Dollars and volumes in thousands, except BBL per day)

Terminalling and Storage Segment

Comparative Results of Operations for the Years Ended December 31, 2023 and 2022

 

 

 

Year Ended
December 31,

 

Variance

 

Percent
Change

 

 

2023

 

2022

 

 

 

 

(In thousands)

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$

    95,459

 

 

$

    92,612

 

 

$

      2,847

 

 

3

%

Cost of products sold

 

 

              75

 

 

 

              19

 

 

 

              56

 

 

295

%

Operating expenses

 

 

      57,393

 

 

 

      63,177

 

 

 

      (5,784

)

 

(9

)%

Selling, general and administrative expenses

 

 

        2,070

 

 

 

        1,967

 

 

 

            103

 

 

5

%

Depreciation and amortization

 

 

      21,030

 

 

 

      26,094

 

 

 

      (5,064

)

 

(19

)%

 

 

 

      14,891

 

 

 

        1,355

 

 

 

      13,536

 

 

999

%

Other operating loss, net

 

 

          (359

)

 

 

          (166

)

 

 

          (193

)

 

(116

)%

Operating income

 

$

    14,532

 

 

$

      1,189

 

 

$

    13,343

 

 

1,122

%

 

 

 

 

 

 

 

 

 

Shore-based throughput volumes  (gallons)

 

 

    162,363

 

 

 

      85,017

 

 

 

      77,346

 

 

91

%

Smackover refinery throughput volumes (guaranteed minimum BBL per day)

 

 

        6,500

 

 

 

        6,500

 

 

 

              —

 

 

%

 

Transportation Segment

 

Comparative Results of Operations for the Years Ended December 31, 2023 and 2022

 

 

 

Year Ended
December 31,

 

Variance

 

Percent
Change

 

 

2023

 

2022

 

 

 

 

(In thousands)

 

 

Revenues

 

$

  240,926

 

 

$

  239,275

 

 

$

      1,651

 

 

1

%

Operating expenses

 

 

    184,334

 

 

 

    176,198

 

 

 

        8,136

 

 

5

%

Selling, general and administrative expenses

 

 

        9,787

 

 

 

        8,215

 

 

 

        1,572

 

 

19

%

Depreciation and amortization

 

 

      14,879

 

 

 

      14,567

 

 

 

            312

 

 

2

%

 

 

 

      31,926

 

 

 

      40,295

 

 

 

      (8,369

)

 

(21

)%

Other operating income, net

 

 

        1,775

 

 

 

        1,062

 

 

 

            713

 

 

67

%

Operating income

 

$

    33,701

 

 

$

    41,357

 

 

$

    (7,656

)

 

(19

)%

MARTIN MIDSTREAM PARTNERS L.P.

SEGMENT OPERATING INCOME

(Dollars and volumes in thousands, except BBL per day)

 

Sulfur Services Segment

 

Comparative Results of Operations for the Years Ended December 31, 2023 and 2022

 

Year Ended
December 31,

 

2023

2022

Variance

Percent
Change

 

 

(In thousands)

 

Revenues:

 

 

 

 

 

Services

 

$

    13,430

 

 

$

    12,337

 

$

      1,093

 

9

%

Products

 

 

127,565

 

 

 

166,827

 

 

(39,262

)

(24

)%

Total revenues

 

 

140,995

 

 

 

179,164

 

 

(38,169

)

(21

)%

 

 

 

 

 

 

Cost of products sold

 

 

93,842

 

 

 

127,018

 

 

(33,176

)

(26

)%

Operating expenses

 

 

13,143

 

 

 

15,335

 

 

(2,192

)

(14

)%

Selling, general and administrative expenses

 

 

5,925

 

 

 

6,081

 

 

(156

)

(3

)%

Depreciation and amortization

 

 

10,690

 

 

 

11,099

 

 

(409

)

(4

)%

 

 

 

17,395

 

 

 

19,631

 

 

(2,236

)

(11

)%

Other operating income, net

 

 

17

 

 

 

4,555

 

 

(4,538

)

(100

)%

Operating income

 

$

    17,412

 

 

$

    24,186

 

$

    (6,774

)

(28

)%

 

 

 

 

 

 

Sulfur (long tons)

 

 

478.0

 

 

 

452.0

 

 

26.0

 

6

%

Fertilizer (long tons)

 

 

254.0

 

 

 

211.0

 

 

43.0

 

20

%

Sulfur services volumes (long tons)

 

 

732.0

 

 

 

663.0

 

 

69.0

 

10

%

   

Specialty Products Segment

 

Comparative Results of Operations for the Years Ended December 31, 2023 and 2022

   

Year Ended
December 31,

 

2023

2022

Variance

Percent
Change

 

 

(In thousands)

 

Products revenues

 

$

  346,863

 

 

$

  540,636

 

 

(193,773

)

(36

)%

Cost of products sold

 

 

319,200

 

 

 

526,043

 

 

(206,843

)

(39

)%

Operating expenses

 

 

78

 

 

 

118

 

 

(40

)

(34

)%

Selling, general and administrative expenses

 

 

7,120

 

 

 

8,728

 

 

(1,608

)

(18

)%

Depreciation and amortization

 

 

3,296

 

 

 

4,520

 

 

(1,224

)

(27

)%

 

 

 

17,169

 

 

 

1,227

 

 

15,942

 

1,299

%

Other operating income (loss), net

 

 

(60

)

 

 

218

 

 

(278

)

(128

)%

Operating income

 

$

    17,109

 

 

$

      1,445

 

$

    15,664

 

1,084

%

 

 

 

 

 

 

 

NGL sales volumes (Bbls)

 

 

3,681

 

 

 

5,791

 

 

(2,110

)

(36

)%

Other specialty products volumes (Bbls)

 

 

367

 

 

 

391

 

 

(24

)

(6

 

Total specialty products volumes (Bbls)

 

 

4,048

 

 

 

6,182

 

 

(2,134

)

(35

)%

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 quarter and years ended December 31, 2023 and 2022, which represents EBITDA, adjusted EBITDA, adjusted EBITDA after giving effect to the exit of the butane optimization business, distributable cash flow, and adjusted free cash flow:

Reconciliation of Net Loss to EBITDA, Adjusted EBITDA, and Adjusted EBITDA After Giving Effect to the Exit of the Butane Optimization Business

 

 

 

Three Months Ended
December 31,

 

Year Ended
December 31,

 

 

2023

 

2022

 

2023

 

2022

 

 

(in thousands)

Net income (loss)

 

$

517

 

 

$

(375

)

 

$

(4,549

)

 

$

(10,334

)

Adjustments:

 

 

 

 

 

 

 

 

Interest expense

 

 

14,376

 

 

 

14,484

 

 

 

60,290

 

 

 

53,665

 

Income tax expense

 

 

2,299

 

 

 

2,458

 

 

 

5,918

 

 

 

7,927

 

Depreciation and amortization

 

 

12,224

 

 

 

13,273

 

 

 

49,895

 

 

 

56,280

 

EBITDA

 

 

29,416

 

 

 

29,840

 

 

 

111,554

 

 

 

107,538

 

Adjustments:

 

 

 

 

 

 

 

 

Gain on disposition of property, plant and equipment

 

 

(277

)

 

 

(4,619

)

 

 

(1,373

)

 

 

(5,669

)

Loss on extinguishment of debt

 

 

 

 

 

 

 

 

5,121

 

 

 

 

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

 

 

 

 

 

(7,476

)

 

 

(12,850

)

 

 

12,850

 

Unit-based compensation

 

 

36

 

 

 

36

 

 

 

163

 

 

 

161

 

Adjusted EBITDA

 

 

29,175

 

 

 

17,781

 

 

 

102,615

 

 

 

114,880

 

Adjustments:

 

 

 

 

 

 

 

 

Plus: net loss associated with butane optimization business

 

 

 

 

 

4,736

 

 

 

2,256

 

 

 

20,015

 

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

 

 

 

 

 

5,976

 

 

 

12,850

 

 

 

(12,850

)

Adjusted EBITDA after giving effect to the exit of the butane optimization business

 

$

29,175

 

 

$

28,493

 

 

$

117,721

 

 

 

122,045

 

Reconciliation of Net Cash Provided by Operating Activities to Adjusted EBITDA, Adjusted EBITDA After Giving Effect to the Exit of the Butane Optimization Business, Distributable Cash Flow, and Adjusted Free Cash Flow

 

 

 

Three Months Ended December 31,

 

Year Ended December 31,

 

 

2023

 

2022

 

2023

 

2022

 

 

(in thousands)

 

(in thousands)

Net cash provided by operating activities

 

$

31,403

 

 

$

32,904

 

 

$

137,468

 

 

$

16,148

 

Interest expense 1

 

 

13,004

 

 

 

13,688

 

 

 

54,112

 

 

 

50,513

 

Current income tax expense

 

 

435

 

 

 

325

 

 

 

1,732

 

 

 

2,183

 

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

 

 

 

 

 

(7,476

)

 

 

(12,850

)

 

 

12,850

 

Commodity cash flow hedging gains reclassified to earnings

 

 

 

 

 

 

 

 

 

 

 

901

 

Net cash received for closed commodity derivative positions included in AOCI

 

 

 

 

 

 

 

 

 

 

 

(85

)

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

 

 

 

 

 

 

 

 

Accounts and other receivables, inventories, and other current assets

 

 

1,336

 

 

 

(21,071

)

 

 

(97,149

)

 

 

38,179

 

Trade, accounts and other payables, and other current liabilities

 

 

(18,394

)

 

 

(324

)

 

 

16,891

 

 

 

(4,428

)

Other

 

 

1,391

 

 

 

(265

)

 

 

2,411

 

 

 

(1,381

)

Adjusted EBITDA

 

 

29,175

 

 

 

17,781

 

 

 

102,615

 

 

 

114,880

 

Plus: net loss associated with butane optimization business

 

 

 

 

 

4,735

 

 

 

2,256

 

 

 

20,015

 

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

 

 

 

 

 

5,976

 

 

 

12,850

 

 

 

(12,850

)

Adjusted EBITDA after giving effect to the exit of the butane optimization business

 

 

29,175

 

 

 

28,492

 

 

 

117,721

 

 

 

122,045

 

Adjustments:

 

 

 

 

 

 

 

 

Interest expense

 

 

(14,376

)

 

 

(14,484

)

 

 

(60,290

)

 

 

(53,665

)

Income tax expense

 

 

(2,299

)

 

 

(2,458

)

 

 

(5,918

)

 

 

(7,927

)

Deferred income taxes

 

 

1,864

 

 

 

2,133

 

 

 

4,186

 

 

 

5,744

 

Amortization of deferred debt issuance costs

 

 

772

 

 

 

796

 

 

 

3,978

 

 

 

3,152

 

Amortization of discount on notes payable

 

 

600

 

 

 

 

 

 

2,200

 

 

 

 

Payments for plant turnaround costs

 

 

(2,458

)

 

 

(914

)

 

 

(4,825

)

 

 

(5,176

)

Maintenance capital expenditures

 

 

(4,689

)

 

 

(4,526

)

 

 

(24,277

)

 

 

(19,074

)

Distributable Cash Flow

 

 

8,589

 

 

 

9,039

 

 

 

32,775

 

 

 

45,099

 

Principal payments under finance lease obligations

 

 

 

 

 

(99

)

 

 

(9

)

 

 

(279

)

Expansion capital expenditures

 

 

(4,908

)

 

 

(1,401

)

 

 

(11,034

)

 

 

(6,883

)

Adjusted Free Cash Flow

 

$

3,681

 

 

$

7,539

 

 

$

21,732

 

 

 

37,937

 

 

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

 

Contacts

Sharon Taylor - Executive Vice President & Chief Financial Officer
(877) 256-6644
ir@martinmlp.com

Social Media Profiles

Contacts

Sharon Taylor - Executive Vice President & Chief Financial Officer
(877) 256-6644
ir@martinmlp.com