Martin Midstream Partners Reports Fourth Quarter and Full Year 2023 Financial Results and Releases 2024 Guidance
- The Partnership exceeded full-year adjusted EBITDA guidance by $2.5 million, excluding losses related to the exit of the butane optimization business.
- Reported net income of $0.5 million for the fourth quarter and a net loss of $4.5 million for the year ended December 31, 2023.
- Adjusted EBITDA of $29.2 million for the fourth quarter and $117.7 million for the year ended December 31, 2023.
- 2024 adjusted EBITDA Guidance of $116.1 million, growth capital expenditures of $17.4 million, and maintenance capital expenditures of $32.0 million.
- The Partnership focused on debt reduction, stability in earnings, and diversified refinery services assets in 2023.
- None.
Insights
The adjusted leverage ratio of 3.75 times reported by Martin Midstream Partners L.P. (MMLP) is a critical indicator of the company's financial health, particularly in terms of its debt management. A leverage ratio, in simple terms, is a measure of the company's debt compared to its earnings before interest, taxes, depreciation and amortization (EBITDA). A ratio of 3.75 suggests that the company has $3.75 in debt for every $1 of EBITDA. This ratio is significant because it is a benchmark used by credit rating agencies and investors to assess the risk associated with the company's debt. MMLP's achievement in reducing its leverage from 4.53 times to 3.75 times year-over-year reflects a successful strategy in debt reduction and operational efficiency.
Furthermore, the report indicates a net income of $0.5 million for Q4 and a net loss of $4.5 million for the year, which includes a substantial impact from the extinguishment of debt. This financial maneuver suggests a strategic decision to improve the company's long-term financial position, despite the short-term impact on net income. The reported adjusted EBITDA figures, especially the growth from the fourth quarter, are indicative of the company's operational performance excluding the butane optimization business, which appears to have been a drag on profitability.
The provided 2024 adjusted EBITDA guidance and capital expenditure plans reflect management's forward-looking strategy and signal to investors the expected financial trajectory and investment in growth and maintenance. The emphasis on the semiconductor industry through the DSM Semichem joint venture may indicate a strategic pivot towards high-demand sectors, which could have positive implications for future revenue streams.
From a market perspective, MMLP's exit from the butane optimization business and the focus on diversified refinery services assets align with broader industry trends where companies are streamlining operations to focus on core, more profitable segments. This strategic shift is likely to be well-received by the market as it can lead to improved margins and reduced volatility in earnings. The emphasis on the semiconductor industry through the investment in an oleum tower for the production of electronic grade sulfuric acid is particularly noteworthy given the current global demand for semiconductors and the potential for significant returns on investment.
The company's performance in its various operating segments, with some meeting or exceeding guidance, provides a nuanced view of the underlying business dynamics. For instance, the downturn in the lubricants business and the regulatory downtime in marine transportation offer insights into sector-specific challenges that the company is navigating. These details may inform investors about the company's resilience and adaptability in the face of industry-specific headwinds.
The compliance with debt covenants as of December 31, 2023, is a reassuring sign for investors and creditors, indicating that MMLP is operating within the agreed-upon financial boundaries set by its lenders. This compliance is critical as it prevents potential legal complications that could arise from covenant breaches, such as accelerated debt repayment demands or restrictions on company operations. Moreover, the adherence to these covenants may also reflect positively on the company's governance and risk management practices.
Additionally, the mention of pending legislation (H.R. 7024) that could retroactively impact MMLP's taxable income for 2023 introduces a layer of tax-related uncertainty. While not directly impacting the financial results, this legislative consideration could have future implications for the company's tax strategy and financial planning. Investors may need to monitor legislative developments closely as they could influence the timing and content of tax packages, which are essential for informed investment decision-making.
- Total adjusted leverage of 3.75 times as of December 31, 2023
-
Reported net income of
$0.5 million $4.5 million $5.1 million
-
Reported adjusted EBITDA of
$29.2 million $117.7 million $15.1 million
-
Releases 2024 adjusted EBITDA Guidance of
$116.1 million $17.4 million $32.0 million
“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
“In the fourth quarter, we reduced debt by
“During 2023, we started construction on an oleum tower located within our
FOURTH QUARTER 2023 OPERATING RESULTS BY BUSINESS SEGMENT
TERMINALLING AND STORAGE ("T&S")
T&S operating income was
Adjusted segment EBITDA for T&S was
TRANSPORTATION
Transportation operating income was
Adjusted segment EBITDA for Transportation was
SULFUR SERVICES
Sulfur Services operating income was
Adjusted segment EBITDA for Sulfur Services was
SPECIALTY PRODUCTS
Specialty Products operating income (loss) was
Adjusted segment EBITDA for Specialty Products was
UNALLOCATED SELLING, GENERAL AND ADMINISTRATIVE EXPENSE ("USGA")
USGA expenses included in operating income were
USGA expenses included in adjusted EBITDA were
CAPITALIZATION
At December 31, 2023, the Partnership had
RESULTS OF OPERATIONS
The Partnership had net income of
The Partnership had a net loss of
Revenues were
Revenues were
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
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
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
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 |
|
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
|
|
Accumulated
|
|
|
|||||||||||
|
|
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
|
|
Variance |
|
Percent
|
||||||||||
|
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
|
|
Variance |
|
Percent
|
||||||||||
|
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
|
|||||||||||||||
2023 |
2022 |
Variance |
Percent
|
||||||||||||
|
(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
|
|||||||||||||||
2023 |
2022 |
Variance |
Percent
|
||||||||||||
|
(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
|
|
Year Ended
|
|||||||||||||
|
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. |
||||||||||||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20240214462592/en/
Sharon Taylor - Executive Vice President & Chief Financial Officer
(877) 256-6644
ir@martinmlp.com
Source: Martin Midstream Partners L.P.
FAQ
What was Martin Midstream Partners L.P.'s (MMLP) total adjusted leverage as of December 31, 2023?
What was the reported net income for the fourth quarter of 2023?
What was the net loss for the year ended December 31, 2023?
What was the adjusted EBITDA for the fourth quarter of 2023?
What is the 2024 adjusted EBITDA guidance for Martin Midstream Partners L.P. (MMLP)?
