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Martin Midstream Partners Reports 2014 Second Quarter Financial Results

July 30, 2014

KILGORE, Texas, July 30, 2014 (GLOBE NEWSWIRE) -- Martin Midstream Partners L.P. (Nasdaq:MMLP) (the "Partnership") announced today its financial results for the second quarter ended June 30, 2014.

The Partnership reported a net loss for the second quarter of 2014 of $1.0 million, or $0.03 per limited partner unit, primarily due to costs incurred related to the refinance of our 8.875% senior notes, which negatively impacted earnings by $11.6 million, or $0.40 per limited partner unit but had no impact on distributable cash flow. This compared to net income for the second quarter of 2013 of $9.1 million, or $0.33 per limited partner unit. The Partnership reported net income for the six months ended June 30, 2014 of $10.8 million, or $0.38 per limited partner unit. Net income for the six months ended June 30, 2014 was negatively impacted by costs incurred related to the refinance of our 8.875% senior notes of $11.6 million, or $0.42 per limited partner unit. This compared to net income for the six months ended June 30, 2013 of $25.7 million, or $0.95 per limited partner unit. Revenues for the second quarter of 2014 were $418.9 million compared to $358.2 million for the second quarter of 2013. Revenues for the six months ended June 30, 2014 were $916.0 million compared to revenues of $791.9 million for the six months ended June 30, 2013.

The Partnership's adjusted EBITDA for the second quarter of 2014 was $31.9 million. This compared to adjusted EBITDA for the second quarter of 2013 of $33.8 million. The Partnership's adjusted EBITDA for the six months ended June 30, 2014 was $70.8 million. This compared to adjusted EBITDA for the six months ended June 30, 2013 of $72.5 million. EBITDA and adjusted EBITDA are non-GAAP financial measures which are explained in greater detail below under the heading "Use of Non-GAAP Financial Information." The Partnership has also included below a table entitled "Reconciliation of EBITDA, Adjusted EBITDA, and Distributable Cash Flow" in order to show the components of these non-GAAP financial measures and their reconciliation to the most comparable GAAP measurement.

The Partnership's distributable cash flow for the second quarter of 2014 was $19.2 million. This compared to distributable cash flow for the second quarter of 2013 of $20.6 million. The Partnership's distributable cash flow for the six months ended June 30, 2014 was $40.7 million. This compared to distributable cash flow for the six months ended June 30, 2013 of $49.5 million. The reduction in distributable cash flow over the prior six month period is due to increased maintenance capital expenditures and turnaround costs of $8.4 million, which were heavily weighted in the first six months of 2014. Distributable cash flow is a non-GAAP financial measure which is explained in greater detail below under "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 this non-GAAP financial measure and its reconciliation to the most comparable GAAP measurement.

Included with this press release are the Partnership's consolidated financial statements as of and for the three and six months ended June 30, 2014 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 31, 2014.

Ruben Martin, President and Chief Executive Officer of Martin Midstream GP LLC, the general partner of Martin Midstream Partners, said, "We finished the quarter with a 0.88 times distribution coverage ratio which is better than we forecasted for the seasonally weaker second quarter. I'm pleased that based on our second quarter performance combined with visibility for the second half of the year, we were able to increase the cash distribution payable to unit holders by 0.6% over the previous quarter. Our distribution is now $3.17 on an annualized basis.

"The diverse nature of our operations generated stronger than anticipated cash flow in our terminalling business, natural gas liquids business and our Sulfur Services segment. However, this was offset by weakness in our Marine Transportation segment primarily attributed to higher repair and maintenance and dry docking costs in our offshore fleet. Although these costs are typically incurred only every three to five years, our entire offshore fleet was impacted this year. Additionally, we restructured certain debt components on our balance sheet to lower our future financing costs, which negatively impacted net income. While this created a loss for the quarter, it had no negative impact on distributable cash flow.

"Lastly, during the quarter we were pleased to upsize our revolving credit facility to $900 million. This larger facility will provide ample liquidity for us to execute on potential acquisitions as well as organic growth projects."

Quarterly Cash Distribution

The quarterly cash distribution of $0.7925 per common unit, which was announced on July 24, 2014, is payable on August 14, 2014 to common unitholders of record as of the close of business on August 7, 2014. The ex-dividend date for the cash distribution is August 5, 2014. This distribution reflects an annualized distribution rate of $3.17 per unit.

Investors' Conference Call

An investors' conference call to review the second quarter results will be held on Thursday, July 31, 2014, at 8:00 a.m. Central Time. The conference call can be accessed by calling (877) 878-2695. An audio replay of the conference call will be available by calling (855) 859-2056 from 11:00 a.m. Central Time on July 31, 2014 through 10:59 p.m. Central Time on August 12, 2014. The access code for the conference call and the audio replay is Conference ID No. 77992607. The audio replay of the conference call will also be archived on Martin Midstream Partners' website at www.martinmidstream.com.

About Martin Midstream Partners

The Partnership is a publicly traded limited partnership with a diverse set of operations focused primarily in the United States Gulf Coast region. The Partnership's primary business segments include: (1) terminalling, storage and packaging services for petroleum products and by-products; (2) natural gas services, including liquids 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 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 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 historic 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.

 
MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED BALANCE SHEETS
(Dollars in thousands)
     
 June 30,

2013
December 31,

2013
 (Unaudited)(Audited)
Assets    
Cash  $ 2,704  $ 16,542
Accounts and other receivables, less allowance for doubtful accounts of $1,807 and $2,492, respectively 145,418 163,855
Product exchange receivables 4,164 2,727
Inventories 113,346 94,902
Due from affiliates 21,915 12,099
Other current assets 11,173 7,353
Total current assets 298,720 297,478
     
Property, plant and equipment, at cost 970,170 929,183
Accumulated depreciation (329,772) (304,808)
Property, plant and equipment, net 640,398 624,375
     
Goodwill 23,802 23,802
Investment in unconsolidated entities 266,445 128,662
Debt issuance costs, net 14,191 15,659
Fair value of derivatives 547
Other assets, net 6,653 7,943
   $ 1,250,756  $ 1,097,919
     
Liabilities and Partners' Capital    
Trade and other accounts payable  $ 121,578  $ 142,951
Product exchange payables 22,078 9,595
Due to affiliates 6,555 2,596
Income taxes payable 818 1,204
Other accrued liabilities 18,806 20,242
Total current liabilities 169,835 176,588
     
Long-term debt 692,168 658,695
Other long-term obligations 2,020 2,219
Total liabilities 864,023 837,502
     
Commitments and contingencies    
Partners' capital 386,733 260,417
   $ 1,250,756  $ 1,097,919
     
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 31, 2014.
 
 
MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except per unit amounts)
         
 Three Months EndedSix Months Ended
 June 30,June 30,
 2014201320142013
Revenues:        
Terminalling and storage *  $ 34,167  $ 27,420  $ 65,968  $ 56,311
Marine transportation * 22,153 25,497 45,563 50,477
Sulfur services 3,038 3,001 6,075 6,002
Product sales: *        
Natural gas services 248,601 187,200 581,938 446,309
Sulfur services 59,543 57,895 110,713 125,279
Terminalling and storage 51,443 57,175 105,716 107,496
  359,587 302,270 798,367 679,084
Total revenues 418,945 358,188 915,973 791,874
         
Costs and expenses:        
Cost of products sold: (excluding depreciation and amortization)        
Natural gas services * 238,622 181,523 559,320 430,301
Sulfur services * 45,315 44,786 83,168 97,583
Terminalling and storage * 46,806 50,273 94,835 94,088
  330,743 276,582 737,323 621,972
Expenses:        
Operating expenses * 48,256 43,035 92,152 86,395
Selling, general and administrative * 8,745 6,383 17,351 13,413
Depreciation and amortization 14,594 12,353 28,586 24,246
Total costs and expenses 402,338 338,353 875,412 746,026
         
Other operating income 99 424 54 796
Operating income 16,706 20,259 40,615 46,644
         
Other income (expense):        
Equity in earnings (loss) of unconsolidated entities 1,938 73 1,642 (301)
Interest expense (11,441) (10,940) (22,892) (19,998)
Debt prepayment premium (7,767) (7,767)
Other, net (50) (14) (117) (23)
Total other expense (17,320) (10,881) (29,134) (20,322)
         
Net income (loss) before taxes (614) 9,378 11,481 26,322
Income tax expense (354) (300) (654) (607)
Net income (loss) (968) 9,078 10,827 25,715
Less general partner's interest in net income 19 (181) (217) (514)
Less (income) loss allocable to unvested restricted units 3 (23) (29) (66)
Limited partners' interest in net income (loss)$ (946)$ 8,874  $ 10,581$ 25,135
         
Net income (loss) per unit attributable to limited partners - basic  $ (0.03)  $ 0.33  $ 0.38  $ 0.95
Weighted average limited partner units - basic 28,924 26,558 27,757 26,561
         
Net income (loss) per unit attributable to limited partners - diluted  $ (0.03)  $ 0.33  $ 0.38  $ 0.95
Weighted average limited partner units - diluted 28,924 26,579 27,791 26,577
         
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 31, 2014.
         
*Related Party Transactions Shown Below
 
 
MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except per unit amounts)
         
*Related Party Transactions Included Above
         
         
 Three Months EndedSix Months Ended
 June 30,June 30,
 2014201320142013
Revenues:        
Terminalling and storage  $ 18,743  $ 17,485  $ 36,753  $ 34,813
Marine transportation 6,415 6,042 12,264 12,885
Product Sales 3,709 1,839 5,601 3,048
Costs and expenses:        
Cost of products sold: (excluding depreciation and amortization)        
Natural gas services 10,808 7,036 19,261 15,592
Sulfur services 4,452 4,441 9,317 8,975
Terminalling and storage 6,553 14,189 16,397 26,150
Expenses:        
Operating expenses 19,248 17,534 37,487 35,508
Selling, general and administrative 5,489 4,170 10,873 8,588
         
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 31, 2014.
 
 
MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED STATEMENTS OF CAPITAL
(Unaudited)
(Dollars in thousands)
         
 Partners' Capital  
   General  
 Common LimitedPartner  
 UnitsAmount AmountTotal
Balances - January 1, 2013 26,566,776  $ 349,490  $ 8,472  $ 357,962
Net income 25,201 514 25,715
Issuance of restricted units 63,750
Forfeiture of restricted units (250)
General partner contribution 37 37
Cash distributions (41,135) (917) (42,052)
Unit-based compensation 479 479
Purchase of treasury units (6,000) (250) (250)
Balances - June 30, 2013 26,624,276  $ 333,785  $ 8,106  $ 341,891
         
Balances - January 1, 2014 26,625,026  $ 254,028  $ 6,389  $ 260,417
Net income 10,610 217 10,827
Issuance of common units 4,017,156 160,514 160,514
Issuance of restricted units 6,900
Forfeiture of restricted units (3,250)
General partner contribution 3,407 3,407
Cash distributions (42,192) (953) (43,145)
Unit-based compensation 387 387
Excess purchase price over carrying value of acquired assets (5,397) (5,397)
Purchase of treasury units (6,400) (277) (277)
Balances - June 30, 2014 30,639,432  $ 377,673  $ 9,060  $ 386,733
         
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 July31, 2014.
 
 
MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
     
 Six Months Ended
 June 30,
 20142013
Cash flows from operating activities:    
Net income  $ 10,827  $ 25,715
Adjustments to reconcile net income to net cash provided by operating activities:    
Depreciation and amortization 28,586 24,246
Amortization of deferred debt issuance costs 4,588 2,075
Amortization of debt discount 1,305 153
Amortization of premium on notes payable (82)
Gain on sale of property, plant and equipment (54) (796)
Equity in (earnings) loss of unconsolidated entities (1,642) 301
Non-cash mark-to-market on derivatives (547)
Unit-based compensation 387 479
Preferred dividends on MET investment 1,116
Other 6
Change in current assets and liabilities, excluding effects of acquisitions and dispositions:    
Accounts and other receivables 15,962 66,658
Product exchange receivables (1,437) 1,694
Inventories (18,444) 4,946
Due from affiliates (9,816) (17,657)
Other current assets (1,430) (3,530)
Trade and other accounts payable (23,574) (29,256)
Product exchange payables 12,483 (1,211)
Due to affiliates 3,959 89
Income taxes payable (386) 53
Other accrued liabilities (1,449) 7,694
Change in other non-current assets and liabilities 597 (563)
Net cash provided by continuing operating activities 20,949 81,096
Net cash used in discontinued operating activities (8,678)
Net cash provided by operating activities 20,949 72,418
Cash flows from investing activities:    
Payments for property, plant and equipment (41,237) (28,621)
Acquisitions (1,991) (63,004)
Payments for plant turnaround costs (3,910)
Proceeds from sale of property, plant and equipment 702 4,719
Proceeds from involuntary conversion of property, plant and equipment 2,475
Investment in unconsolidated entities (134,413) (15,000)
Return of investments from unconsolidated entities 2,425 1,357
Contributions to unconsolidated entities (3,070) (15,578)
Net cash used in investing activities (179,019) (116,127)
Cash flows from financing activities:    
Payments of long-term debt (885,000) (439,000)
Payments of notes payable and capital lease obligations (160)
Proceeds from long-term debt 917,250 529,000
Net proceeds from issuance of common units 160,514
General partner contribution 3,407 37
Purchase of treasury units (277) (250)
Payment of debt issuance costs (3,120) (9,011)
Excess purchase price over carrying value of acquired assets (5,397)
Cash distributions paid (43,145) (42,052)
Net cash provided by financing activities 144,232 38,564
Net decrease in cash (13,838) (5,145)
Cash at beginning of period 16,542 5,162
Cash at end of period  $ 2,704  $ 17
Non-cash additions to property, plant and equipment  $ 3,111 $ — 
     
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 31, 2014.
 
 
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, 2014 and 2013 
         
 Three Months Ended   
 June 30,  Percent
 20142013 Variance Change
 (In thousands, except BBL per day)
Revenues:        
Services$ 35,474$ 28,587$ 6,887 24%
Products 51,443 57,175 (5,732) (10)%
Total revenues 86,917 85,762 1,155 1%
         
Cost of products sold 47,310 51,139 (3,829) (7)%
Operating expenses 20,370 17,739 2,631 15%
Selling, general and administrative expenses 731 748 (17) (2)%
Depreciation and amortization 9,415 7,297 2,118 29%
  9,091 8,839 252 3%
Other operating income 83 97 (14) (14)%
Operating income$ 9,174$ 8,936$ 238 3%
         
Lubricant sales volumes (gallons) 8,814 10,450 (1,636) (16)%
Shore-based throughput volumes (gallons) 61,466 67,069 (5,603) (8)%
Smackover refinery throughput volumes (BBL per day) 7,102 7,010 92 1%
Corpus Christi crude terminal (BBL per day) 166,971 105,986 60,985 58%
         
         
Comparative Results of Operations for the Six Months Ended June 30, 2014 and 2013    
         
 Six Months Ended    
 June 30,   Percent
 20142013 VarianceChange
 (In thousands, except BBL per day)
Revenues:        
Services$ 68,498$ 58,619$ 9,879 17%
Products 105,716 107,496 (1,780) (2)%
Total revenues 174,214 166,115 8,099 5%
         
Cost of products sold 95,835 95,409 426 —%
Operating expenses 40,122 35,433 4,689 13%
Selling, general and administrative expenses 1,698 1,443 255 18%
Depreciation and amortization 18,390 14,393 3,997 28%
  18,169 19,437 (1,268) (7)%
Other operating income 38 168 (130) (77)%
Operating income$ 18,207$ 19,605$ (1,398) (7)%
         
Lubricant sales volumes (gallons) 17,977 19,247 (1,270) (7)%
Shore-based throughput volumes (gallons) 122,618 142,017 (19,399) (14)%
Smackover refinery throughput volumes (BBL per day) 5,132 6,730 (1,598) (24)%
Corpus Christi crude terminal (BBL per day) 153,732 107,677 46,055 43%
 
 
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, 2014 and 2013 
         
 Three Months Ended    
 June 30,  Percent
 20142013 Variance Change
 (In thousands)  
Revenues:        
Marine transportation$ 69$ 1,515$ (1,446) (95)%
Products 248,601 187,200 61,401 33%
Total revenues 248,670 188,715 59,955 32%
         
Cost of products sold 239,114 181,893 57,221 31%
Operating expenses 2,318 990 1,328 134%
Selling, general and administrative expenses 1,741 718 1,023 142%
Depreciation and amortization 675 554 121 22%
Operating income$ 4,822$ 4,560$ 262 6%
         
Distributions from unconsolidated entities$ 561$ 1,436$ (875) (61)%
         
NGL sales volumes (Bbls) 4,039 3,016 1,023 34%
         
 
Comparative Results of Operations for the Six Months Ended June 30, 2014 and 2013
         
 Six Months Ended    
 June 30,  Percent
 20142013 Variance Change
 (In thousands)  
Revenues:        
Marine transportation$ 365$ 1,845$ (1,480) (80)%
Products 581,938 446,309 135,629 30%
Total revenues 582,303 448,154 134,149 30%
         
Cost of products sold 560,254 431,029 129,225 30%
Operating expenses 4,233 1,971 2,262 115%
Selling, general and administrative expenses 3,177 1,644 1,533 93%
Depreciation and amortization 1,179 846 333 39%
Operating income$ 13,460$ 12,664$ 796 6%
         
Distributions from unconsolidated entities$ 1,341$ 1,961$ (620) (32)%
         
NGL sales volumes (Bbls) 8,997 6,721 2,276 34%
 
 
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, 2014 and 2013 
         
 Three Months Ended    
 June 30,  Percent
 20142013 Variance Change
 (In thousands)  
Revenues:        
Services$ 3,038$ 3,001$ 37 1%
Products 59,543 57,895 1,648 3%
Total revenues 62,581 60,896 1,685 3%
         
Cost of products sold 45,406 44,877 529 1%
Operating expenses 4,809 4,186 623 15%
Selling, general and administrative expenses 1,123 1,016 107 11%
Depreciation and amortization 2,031 1,957 74 4%
Operating income$ 9,212$ 8,860$ 352 4%
         
Sulfur (long tons) 204.1 209.1 (5.0) (2)%
Fertilizer (long tons) 89.8 71.3 18.5 26%
Total sulfur services volumes (long tons) 293.9 280.4 13.5 5%
         
         
Comparative Results of Operations for the Six Months Ended June 30, 2014 and 2013
         
 Six Months Ended    
 June 30,  Percent
 20142013 Variance Change
 (In thousands)  
Revenues:        
Services$ 6,075$ 6,002$ 73 1%
Products 110,713 125,279 (14,566) (12)%
Total revenues 116,788 131,281 (14,493) (11)%
         
Cost of products sold 83,349 97,764 (14,415) (15)%
Operating expenses 8,786 8,625 161 2%
Selling, general and administrative expenses 2,238 2,063 175 8%
Depreciation and amortization 4,014 3,923 91 2%
Operating income$ 18,401$ 18,906$ (505) (3)%
         
Sulfur (long tons) 394.5 403.1 (8.6) (2)%
Fertilizer (long tons) 181.0 175.0 6.0 3%
Total sulfur services volumes (long tons) 575.5 578.1 (2.6) —%
 
 
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, 2014 and 2013 
         
 Three Months Ended    
 June 30,  Percent
 20142013Variance  Change
 (In thousands)  
Revenues$ 23,282$ 25,021$ (1,739) (7)%
Operating expenses 22,177 20,999 1,178 6%
Selling, general and administrative expenses 312 353 (41) (12)%
Depreciation and amortization 2,473 2,545 (72) (3)%
  (1,680) 1,124 (2,804) (249)%
Other operating income 16 327 (311) (95)%
Operating income$ (1,664)$ 1,451$ (3,115) (215)%
         
         
Comparative Results of Operations for the Six Months Ended June 30, 2014 and 2013 
         
 Six Months Ended    
 June 30,  Percent
 20142013 Variance Change
 (In thousands)  
Revenues$ 47,396$ 50,253$ (2,857) (6)%
Operating expenses 41,624 42,065 (441) (1)%
Selling, general and administrative expenses 503 772 (269) (35)%
Depreciation and amortization 5,003 5,084 (81) (2)%
  266 2,332 (2,066) (89)%
Other operating income 16 628 (612) (97)%
Operating income$ 282$ 2,960$ (2,678) (90)%


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, 2014 and 2013, which represents EBITDA, Adjusted EBITDA and Distributable Cash Flow from continuing operations.

Reconciliation of EBITDA, Adjusted EBITDA, and Distributable Cash Flow
         
 Three Months EndedSix Months Ended
 June 30,June 30,
 2014201320142013
         
Net income (loss)$ (968)$ 9,078$ 10,827$ 25,715
Adjustments:        
Interest expense 11,441 10,940 22,892 19,998
Income tax expense 354 300 654 607
Depreciation and amortization 14,594 12,353 28,586 24,246
EBITDA 25,421 32,671 62,959 70,566
Adjustments:        
Equity in (earnings) loss of unconsolidated entities (1,938) (73) (1,642) 301
Gain on sale of property, plant and equipment (99) (424) (54) (796)
Debt prepayment premium 7,767 7,767
Distributions from unconsolidated entities 561 1,436 1,341 1,961
Unit-based compensation 208 223 387 479
Adjusted EBITDA 31,920 33,833 70,758 72,511
Adjustments:        
Interest expense (11,441) (10,940) (22,892) (19,998)
Income tax expense (354) (300) (654) (607)
Amortization of debt discount 1,228 77 1,305 153
Amortization of debt premium (82) (82)
Amortization of deferred debt issuance costs 3,778 806 4,588 2,075
Non-cash mark-to-market on derivatives 547 547
Payments of installment notes payable and capital lease obligations (79) (160)
Payments for plant turnaround costs (1,746) (3,910)
Maintenance capital expenditures (4,616) (2,822) (8,954) (4,500)
Distributable Cash Flow  $ 19,234  $ 20,575  $ 40,706  $ 49,474

CONTACT: Joe McCreery, Head of Investor Relations (903) 988-6425 and (877) 256-6644



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Source: Martin Midstream Partners L.P.


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