Martin Midstream Partners Reports Second Quarter 2022 Financial Results, Increases Annual Guidance and Declares Quarterly Cash Distribution

Rhea-AI Summary

Martin Midstream Partners L.P. (Nasdaq:MMLP) announced strong financial results for Q2 2022, reporting a net income of $6.6 million and adjusted EBITDA of $38.3 million. Revenues rose to $267 million, a significant increase from $184.3 million in Q2 2021. The partnership raised its 2022 adjusted EBITDA guidance from $110-$120 million to $126-$135 million due to elevated refinery utilization and robust demand across its business segments. A quarterly distribution of $0.005 per unit has also been declared, payable on August 12, 2022.

Positive

• Net income increased to $6.6 million in Q2 2022, from a net loss of $6.6 million in Q2 2021.
• Adjusted EBITDA for Q2 2022 was $38.3 million, up from $22.5 million in Q2 2021.
• Revised 2022 adjusted EBITDA guidance raised to $126-$135 million from previous $110-$120 million.
• Revenues for Q2 2022 reached $267 million, compared to $184.3 million in Q2 2021.

Negative

• Adjusted leverage ratio remains high at 3.46 times, with expectations to end 2022 near this level.
• Natural gas liquids segment experienced a seasonal decrease in sales volume, impacting income.

• Announces increased 2022 financial guidance
• Reported net income of $6.6 million and $18.1 million for the three and six months ended June 30, 2022, respectively
• Reported adjusted EBITDA of $38.3 million and $78.3 million for the three and six months ended June 30, 2022, respectively
• Declares quarterly distribution of $0.005, or $0.02 per unit annually

KILGORE, Texas--(BUSINESS WIRE)-- Martin Midstream Partners L.P. (Nasdaq:MMLP) ("MMLP" or the "Partnership") today announced its financial results for the second quarter of 2022.

Bob Bondurant, President and Chief Executive Officer of Martin Midstream GP LLC, the general partner of the Partnership stated, “The Partnership experienced another outstanding quarter with elevated demand for our land transportation assets, and robust margins in our lubricants and fertilizer businesses. Overall, each of our four business segments performed above expectations beating the high range of guidance for the quarter by $13 million. We now expect the current refinery utilization levels to remain strong through year end which will bring continued solid demand for our diversified products and services. Based on this expectation, we are raising our 2022 adjusted EBITDA guidance range to $126 - $135 million.

“The current operating environment for our business segments has provided the opportunity for consistent leverage reduction as year over year we have reduced outstanding debt and improved financial results. As a result, on June 30, 2022, the Partnership’s adjusted leverage ratio was 3.46 times compared to 3.87 times at March 31, 2022. While that is an important milestone, our current guidance indicates that the Partnership will exit 2022 with approximately the same adjusted leverage ratio announced today, as higher commodity prices continue to increase our working capital needs specifically within the natural gas liquids segment. Our focus will remain on conservative capital management to meet the goal of a sustained leverage ratio below 3.75 times.”

SECOND QUARTER 2022 OPERATING RESULTS BY BUSINESS SEGMENT

TERMINALLING AND STORAGE (“T&S”)

T&S Operating Income for the three months ended June 30, 2022 and 2021 was $5.2 million and $3.7 million, respectively.

Adjusted segment EBITDA for T&S was $12.9 million and $10.6 million, for the three months ended June 30, 2022 and 2021, respectively, reflecting continued strength in our lubricant and specialty products divisions.

TRANSPORTATION

Transportation Operating Income for the three months ended June 30, 2022 and 2021 was $11.3 million and $0.7 million, respectively.

Adjusted segment EBITDA for Transportation was $14.6 million and $5.0 million for the three months ended June 30, 2022 and 2021, respectively, reflecting increased demand for land transportation services coupled with improving marine fleet utilization and higher day rates.

SULFUR SERVICES

Sulfur Services Operating Income for the three months ended June 30, 2022 and 2021 was $9.1 million and $6.3 million, respectively.

Adjusted segment EBITDA for Sulfur Services was $13.9 million and $8.9 million for the three months ended June 30, 2022 and 2021, respectively, reflecting sustained demand for fertilizer products.

NATURAL GAS LIQUIDS (“NGL”)

NGL Operating Income for the three months ended June 30, 2022 and 2021 was $0.3 million and $0.7 million, respectively.

Adjusted segment EBITDA for NGL was $1.3 million and $1.7 million for the three months ended June 30, 2022 and 2021, respectively, primarily reflecting a seasonal decrease in NGL sales volumes.

UNALLOCATED SELLING, GENERAL AND ADMINISTRATIVE EXPENSE (“USGA”)

USGA expenses included in operating income for the three months ended June 30, 2022 and 2021 were $4.4 million and $3.8 million, respectively.

USGA expenses included in adjusted EBITDA for the three months ended June 30, 2022 and 2021 were $4.3 million and $3.7 million, respectively, primarily reflecting an increase in employee related expenses.

CAPITALIZATION

At June 30, 2022, the Partnership had $494 million of total debt outstanding, including $149 million drawn on its $275 million revolving credit facility, $54 million of senior secured 1.5 lien notes due 2024 and $291 million of senior secured second lien notes due 2025. At June 30, 2022, the Partnership had liquidity of approximately $87 million from available capacity under its revolving credit facility. The Partnership’s adjusted leverage ratio, as calculated under the revolving credit facility, was 3.46 times and 3.87 times on June 30, 2022 and March 31, 2022, respectively. The Partnership was in compliance with all debt covenants as of June 30, 2022.

QUARTERLY CASH DISTRIBUTION

The Partnership has declared a quarterly cash distribution of $0.005 per unit for the quarter ended June 30, 2022. The distribution is payable on August 12, 2022 to common unitholders of record as of the close of business on August 5, 2022. The ex-dividend date for the cash distribution is August 4, 2022.

QUALIFIED NOTICE TO NOMINEES

This release serves as qualified notice to nominees as provided for under Treasury Regulation Section 1.1446-4(b)(4) and (d). Please note that 100 percent of the Partnership's distributions to foreign investors are attributable to income that is effectively connected with a United States trade or business. Accordingly, all of the Partnership's distributions to foreign investors are subject to federal income tax withholding at the highest effective tax rate for individuals or corporations, as applicable. Nominees, and not the Partnership, are treated as withholding agents responsible for withholding on the distributions received by them on behalf of foreign investors.

RESULTS OF OPERATIONS

The Partnership had net income for the three months ended June 30, 2022 of $6.6 million, or $0.17 per limited partner unit. The Partnership had a net loss for the three months ended June 30, 2021 of $6.6 million, a loss of $0.17 per limited partner unit. Adjusted EBITDA for the three months ended June 30, 2022 was $38.3 million compared to $22.5 million for the three months ended June 30, 2021. Net cash provided by (used in) operating activities for the three months ended June 30, 2022 was ($2.5) million, compared to $2.2 million for the three months ended June 30, 2021. Distributable cash flow for the three months ended June 30, 2022 was $22.3 million compared to $7.3 million for the three months ended June 30, 2021.

Revenues for the three months ended June 30, 2022 were $267.0 million compared to $184.3 million for the three months ended June 30, 2021.

The Partnership had net income for the six months ended June 30, 2022 of $18.1 million, or $0.46 per limited partner unit. The Partnership had a net loss for the six months ended June 30, 2021 of $4.1 million, a loss of $0.10 per limited partner unit. Adjusted EBITDA for the six months ended June 30, 2022 was $78.3 million compared to $53.4 million for the six months ended June 30, 2021. Net cash provided by operating activities for the six months ended June 30, 2022 was $28.5 million, compared to $6.1 million for the six months ended June 30, 2021. Distributable cash flow for the six months ended June 30, 2022 was $38.5 million compared to $15.6 million for the six months ended June 30, 2021.

Revenues for the six months ended June 30, 2022 were $546.2 million compared to $385.3 million for the six months ended June 30, 2021.

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 second quarter 2022 to the Partnership's adjusted EBITDA for the second quarter 2021.

2022 REVISED FINANCIAL GUIDANCE

The Partnership now expects to generate adjusted EBITDA between $126 million and $135 million for full-year 2022, compared to the previously revised adjusted EBITDA guidance of between $110 million and $120 million. This increased guidance reflects our expectation that current refinery utilization levels will remain consistent through year-end 2022 which will bring continued solid demand for our diversified products and services.

Distributable cash flow is now expected to be between $53 million and $62 million for full-year 2022, compared to the revised distributable cash flow guidance of between $37 million and $47 million. Adjusted free cash flow is now expected to be between $44 million and $53 million, compared to the revised adjusted free cash flow guidance of between $29 million and $39 million.

MMLP does not intend at this time to provide financial guidance beyond 2022.

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.

Investors' Conference Call

Date: Thursday, July 21, 2022
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 along with the Second Quarter 2022 Earnings Summary and Revised Guidance Presentation 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

MMLP, 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, storage, and packaging 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) natural gas liquids marketing, distribution, and transportation services. To learn more, visit www.MMLP.com. Follow Martin Midstream Partners L.P. on LinkedIn and Facebook.

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 current and potential impacts of the COVID-19 pandemic generally (including variants of the virus), on an industry-specific basis, and on the Partnership’s specific operations and business, (ii) the effects of the continued volatility of commodity prices and the related macroeconomic and political environment, and (iii) 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 the Partnership's management in assessing its business, it uses 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"). 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.

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. The Partnership defines 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 the Partnership's management and by external users of its financial statements, such as investors, commercial banks, research analysts, and others, to assess:

• the financial performance of the Partnership's assets without regard to financing methods, capital structure, or historical cost basis;

• the ability of the Partnership's assets to generate cash sufficient to pay interest costs, support its indebtedness, and make cash distributions to its unitholders; and

• its 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 the Partnership has borrowed money to finance its operations, interest expense is a necessary element of its costs and its ability to generate cash available for distribution. Because the Partnership has capital assets, depreciation and amortization are also necessary elements of its costs. Therefore, any measures that exclude these elements have material limitations. To compensate for these limitations, the Partnership believes 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 its overall performance.

Distributable Cash Flow. The Partnership defines 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 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 us 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 its 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.

Adjusted Free Cash Flow. The Partnership defines 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 the Partnership's management and by external users of its 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. The Partnership believes 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. The Partnership's 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, the Partnership believes 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 its overall liquidity.

MMLP-F

MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED BALANCE SHEETS
(Dollars in thousands)
	June 30, 2022				December 31, 2021
	(Unaudited)				(Audited)
Assets
Cash	$	43			$	52
Accounts and other receivables, less allowance for doubtful accounts of $559 and $311, respectively		73,485				84,199
Inventories		117,845				62,120
Due from affiliates		16,558				14,409
Other current assets		29,554				12,908
Total current assets		237,485				173,688
Property, plant and equipment, at cost		898,379				898,770
Accumulated depreciation		(566,799	)			(553,300	)
Property, plant and equipment, net		331,580				345,470
Goodwill		16,823				16,823
Right-of-use assets		30,249				21,861
Deferred income taxes, net		17,517				19,821
Other assets, net		2,507				2,198
Total assets	$	636,161			$	579,861
Liabilities and Partners’ Capital (Deficit)
Current installments of long-term debt and finance lease obligations	$	169			$	280
Trade and other accounts payable		105,156				70,342
Product exchange payables		537				1,406
Due to affiliates		9,764				1,824
Income taxes payable		753				385
Other accrued liabilities		31,513				29,850
Total current liabilities		147,892				104,087
Long-term debt, net		489,325				498,871
Finance lease obligations		—				9
Operating lease liabilities		22,455				15,704
Other long-term obligations		7,343				9,227
Total liabilities		667,015				627,898
Commitments and contingencies
Partners’ capital (deficit)		(31,021	)			(48,853	)
Accumulated other comprehensive income (loss)		167				816
Total partners’ capital (deficit)		(30,854	)			(48,037	)
Total liabilities and partners' capital (deficit)	$	636,161			$	579,861

MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except per unit amounts)
	Three Months Ended								Six Months Ended
	June 30,								June 30,
	2022				2021				2022				2021
Revenues:
Terminalling and storage *	$	20,439			$	18,702			$	39,852			$	37,080
Transportation *		55,832				34,926				102,542				64,741
Sulfur services		3,084				2,949				6,168				5,899
Product sales: *
Natural gas liquids		97,580				67,232				218,143				165,317
Sulfur services		53,869				35,337				109,908				67,222
Terminalling and storage		36,192				25,147				69,584				45,008
		187,641				127,716				397,635				277,547
Total revenues		266,996				184,293				546,197				385,267
Costs and expenses:
Cost of products sold: (excluding depreciation and amortization)
Natural gas liquids *		91,584				61,590				198,682				140,725
Sulfur services *		37,063				24,177				74,848				45,391
Terminalling and storage *		28,279				20,226				54,978				34,728
		156,926				105,993				328,508				220,844
Expenses:
Operating expenses *		64,082				47,313				120,577				91,947
Selling, general and administrative *		9,944				8,960				21,147				19,569
Depreciation and amortization		14,800				14,483				29,286				28,917
Total costs and expenses		245,752				176,749				499,518				361,277
Other operating income (loss), net		246				89				260				(671	)
Operating income		21,490				7,633				46,939				23,319
Other income (expense):
Interest expense, net		(12,846	)			(13,309	)			(25,275	)			(26,262	)
Other, net		(1	)			(1	)			(2	)			(1	)
Total other expense		(12,847	)			(13,310	)			(25,277	)			(26,263	)
Net income before taxes		8,643				(5,677	)			21,662				(2,944	)
Income tax expense		(2,037	)			(935	)			(3,578	)			(1,157	)
Net income		6,606				(6,612	)			18,084				(4,101	)
Less general partner's interest in net income		(132	)			132				(362	)			82
Less income allocable to unvested restricted units		(21	)			20				(51	)			10
Limited partners' interest in net income	$	6,453			$	(6,460	)		$	17,671			$	(4,009	)
Net income per unit attributable to limited partners - basic	$	0.17			$	(0.17	)		$	0.46			$	(0.10	)
Net income per unit attributable to limited partners - diluted	$	0.17			$	(0.17	)		$	0.46			$	(0.10	)
Weighted average limited partner units - basic		38,729,118				38,687,874				38,725,701				38,690,228
Weighted average limited partner units - diluted		38,750,153				38,687,874				38,753,197				38,690,228

*Related Party Transactions Shown Below

MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except per unit amounts)
*Related Party Transactions Included Above
	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2022			2021			2022			2021
Revenues:*
Terminalling and storage	$	17,416		$	15,569		$	33,620		$	30,875
Transportation		7,463			4,889			13,751			8,899
Product Sales		95			71			416			185
Costs and expenses:*
Cost of products sold: (excluding depreciation and amortization)
Sulfur services		2,592			2,403			5,268			4,938
Terminalling and storage		10,209			7,036			19,860			11,604
Expenses:
Operating expenses		23,446			19,590			44,826			37,958
Selling, general and administrative		7,498			7,285			16,306			15,965

MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited)
(Dollars in thousands)
	Three Months Ended							Six Months Ended
	June 30,							June 30,
	2022			2021				2022				2021
Net income	$	6,606		$	(6,612	)		$	18,084			$	(4,101	)
Changes in fair values of commodity cash flow hedges		167			—				167				—
Commodity cash flow hedging (gains) losses reclassified to earnings		440			—				(816	)			—
Comprehensive income	$	7,213		$	(6,612	)		$	17,435			$	(4,101	)

MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED STATEMENTS OF CAPITAL (DEFICIT)
(Unaudited)
(Dollars in thousands)
	Partners’ Capital (Deficit)
	Common Limited							General Partner Amount				Accumulated Other Comprehensive Income (Loss)
	Units			Amount												Total
Balances - January 1, 2021	38,851,174			$	(48,776	)		$	1,905			$	—			$	(46,871	)
Net income	—				(4,019	)			(82	)			—				(4,101	)
Issuance of restricted units	42,168				—				—				—				—
Forfeiture of restricted units	(83,436	)			—				—				—				—
Cash distributions	—				(388	)			(8	)			—				(396	)
Unit-based compensation	—				288				—				—				288
Purchase of treasury units	(7,156	)			(17	)			—				—				(17	)
Balances - June 30, 2021	38,802,750			$	(52,912	)		$	1,815			$	—			$	(51,097	)
Balances - January 1, 2022	38,802,750			$	(50,741	)		$	1,888			$	816			$	(48,037	)
Net income	—				17,722				362				—				18,084
Issuance of restricted units	48,000				—				—				—				—
Cash distributions	—				(388	)			(8	)			—				(396	)
Unit-based compensation	—				79				—				—				79
Gain reclassified from AOCI into income on commodity cash flow hedges	—				—				—				(816	)			(816	)
Gain recognized in AOCI on commodity cash flow hedges	—				—				—				167				167
Excess purchase price over carrying value of acquired assets	—				65				—				—				65
Balances - June 30, 2022	38,850,750			$	(33,263	)		$	2,242			$	167			$	(30,854	)

MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
	Six Months Ended
	June 30,
	2022				2021
Cash flows from operating activities:
Net income (loss)	$	18,084			$	(4,101	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		29,286				28,917
Amortization of deferred debt issuance costs		1,568				1,521
Deferred income tax expense		2,304				758
(Gain) loss on sale of property, plant and equipment, net		(260	)			671
Derivative (income) loss		(734	)			884
Net cash paid for commodity derivatives		85				(679	)
Non cash unit-based compensation		79				288
Change in current assets and liabilities, excluding effects of acquisitions and dispositions:
Accounts and other receivables		10,714				(2,303	)
Inventories		(55,725	)			(17,572	)
Due from affiliates		(2,149	)			(5,812	)
Other current assets		(17,741	)			1,435
Trade and other accounts payable		37,688				3,335
Product exchange payables		(869	)			327
Due to affiliates		7,940				1,504
Income taxes payable		368				(248	)
Other accrued liabilities		(2,332	)			(3,053	)
Change in other non-current assets and liabilities		145				213
Net cash provided by operating activities		28,451				6,085
Cash flows from investing activities:
Payments for property, plant and equipment		(14,634	)			(8,200	)
Payments for plant turnaround costs		(1,600	)			(1,694	)
Proceeds from sale of property, plant and equipment		689				133
Net cash used in investing activities		(15,545	)			(9,761	)
Cash flows from financing activities:
Payments of long-term debt		(217,589	)			(144,790	)
Payments under finance lease obligations		(119	)			(2,591	)
Proceeds from long-term debt		206,500				147,500
Purchase of treasury units		—				(17	)
Payment of debt issuance costs		(26	)			(307	)
Excess purchase price over carrying value of acquired assets		(1,285	)			—
Cash distributions paid		(396	)			(396	)
Net cash used in financing activities		(12,915	)			(601	)
Net increase (decrease) in cash		(9	)			(4,277	)
Cash at beginning of period		52				4,958
Cash at end of period	$	43			$	681
Non-cash additions to property, plant and equipment	$	1,705			$	2,855

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, 2022 and 2021
	Three Months Ended June 30,						Variance				Percent Change
	2022			2021
	(In thousands, except BBL per day)
Revenues:
Services	$	22,190		$	20,358		$	1,832			9	%
Products		36,220			25,166			11,054			44	%
Total revenues		58,410			45,524			12,886			28	%
Cost of products sold		28,955			20,759			8,196			39	%
Operating expenses		14,925			12,664			2,261			18	%
Selling, general and administrative expenses		1,654			1,468			186			13	%
Depreciation and amortization		7,731			6,996			735			11	%
		5,145			3,637			1,508			41	%
Other operating income, net		8			61			(53	)		(87	) %
Operating income	$	5,153		$	3,698		$	1,455			39	%
Shore-based throughput volumes (guaranteed minimum) (gallons)		20,000			20,000			—			—	%
Smackover refinery throughput volumes (guaranteed minimum BBL per day)		6,500			6,500			—			—	%

Comparative Results of Operations for the Six Months Ended June 30, 2022 and 2021
	Six Months Ended June 30,								Variance				Percent Change
	2022				2021
	(In thousands, except BBL per day)
Revenues:
Services	$	43,146			$	40,317			$	2,829			7	%
Products		69,647				45,041				24,606			55	%
Total revenues		112,793				85,358				27,435			32	%
Cost of products sold		56,152				35,700				20,452			57	%
Operating expenses		28,837				25,457				3,380			13	%
Selling, general and administrative expenses		3,365				2,967				398			13	%
Depreciation and amortization		15,337				14,101				1,236			9	%
		9,102				7,133				1,969			28	%
Other operating loss, net		(35	)			(5	)			(30	)		(600	) %
Operating income	$	9,067			$	7,128			$	1,939			27	%
Shore-based throughput volumes (guaranteed minimum) (gallons)		40,000				40,000				—			—	%
Smackover refinery throughput volumes (guaranteed minimum) (BBL per day)		6,500				6,500				—			—	%

Transportation Segment
Comparative Results of Operations for the Three Months Ended June 30, 2022 and 2021
	Three Months Ended June 30,						Variance				Percent Change
	2022			2021
	(In thousands)
Revenues	$	60,902		$	38,349		$	22,553			59	%
Operating expenses		44,528			31,485			13,043			41	%
Selling, general and administrative expenses		1,788			1,858			(70	)		(4	) %
Depreciation and amortization		3,590			4,331			(741	)		(17	) %
		10,996			675			10,321			1,529	%
Other operating income, net		254			21			233			1,110	%
Operating income	$	11,250		$	696		$	10,554			1,516	%

Comparative Results of Operations for the Six Months Ended June 30, 2022 and 2021
	Six Months Ended June 30,							Variance				Percent Change
	2022			2021
	(In thousands)
Revenues	$	112,799		$	72,318			$	40,481			56	%
Operating expenses		83,730			60,989				22,741			37	%
Selling, general and administrative expenses		3,958			3,658				300			8	%
Depreciation and amortization		7,163			8,329				(1,166	)		(14	) %
	$	17,948		$	(658	)		$	18,606			2,828	%
Other operating income (loss), net		283			17				266			1,565	%
Operating income	$	18,231		$	(641	)		$	18,872			2,944	%

Sulfur Services Segment
Comparative Results of Operations for the Three Months Ended June 30, 2022 and 2021
	Three Months Ended June 30,						Variance				Percent Change
	2022			2021
	(In thousands)
Revenues:
Services	$	3,084		$	2,949		$	135			5	%
Products		53,869			35,337			18,532			52	%
Total revenues		56,953			38,286			18,667			49	%
Cost of products sold		39,181			25,397			13,784			54	%
Operating expenses		4,227			2,804			1,423			51	%
Selling, general and administrative expenses		1,537			1,215			322			27	%
Depreciation and amortization		2,882			2,568			314			12	%
		9,126			6,302			2,824			45	%
Other operating income, net		8			6			2			33	%
Operating income	$	9,134		$	6,308		$	2,826			45	%
Sulfur (long tons)		118			146			(28	)		(19	) %
Fertilizer (long tons)		62			84			(22	)		(26	) %
Total sulfur services volumes (long tons)		180			230			(50	)		(22	) %

Comparative Results of Operations for the Six Months Ended June 30, 2022 and 2021
	Six Months Ended June 30,						Variance				Percent Change
	2022			2021
	(In thousands)
Revenues:
Services	$	6,168		$	5,899		$	269			5	%
Products		109,908			67,222			42,686			64	%
Total revenues		116,076			73,121			42,955			59	%
Cost of products sold		78,439			47,820			30,619			64	%
Operating expenses		7,255			4,813			2,442			51	%
Selling, general and administrative expenses		3,041			2,456			585			24	%
Depreciation and amortization		5,591			5,288			303			6	%
		21,750			12,744			9,006			71	%
Other operating income, net		36			6			30			500	%
Operating income	$	21,786		$	12,750		$	9,036			71	%
Sulfur (long tons)		232			219			13			6	%
Fertilizer (long tons)		146			179			(33	)		(18	) %
Total sulfur services volumes (long tons)		378			398			(20	)		(5	) %

Natural Gas Liquids Segment
Comparative Results of Operations for the Three Months Ended June 30, 2022 and 2021
	Three Months Ended June 30,							Variance				Percent Change
	2022				2021
	(In thousands)
Products revenues	$	97,580			$	67,232		$	30,348			45	%
Cost of products sold		94,898				64,176			30,722			48	%
Operating expenses		1,121				1,061			60			6	%
Selling, general and administrative expenses		597				697			(100	)		(14	) %
Depreciation and amortization		597				588			9			2	%
		367				710			(343	)		(48	) %
Other operating income (loss), net		(24	)			1			(25	)		(2,500	) %
Operating income	$	343			$	711		$	(368	)		(52	) %
NGL sales volumes (Bbls)		1,153				1,259			(106	)		(8	) %

Comparative Results of Operations for the Six Months Ended June 30, 2022 and 2021
	Six Months Ended June 30,								Variance				Percent Change
	2022				2021
	(In thousands)
Products revenues	$	218,146			$	165,317			$	52,829			32	%
Cost of products sold		206,054				146,688				59,366			40	%
Operating expenses		2,187				2,056				131			6	%
Selling, general and administrative expenses		2,319				2,904				(585	)		(20	) %
Depreciation and amortization		1,195				1,199				(4	)		—	%
		6,391				12,470				(6,079	)		(49	) %
Other operating loss, net		(24	)			(689	)			665			97	%
Operating income	$	6,367			$	11,781			$	(5,414	)		(46	) %
NGL sales volumes (Bbls)		2,750				3,404				(654	)		(19	) %

Unallocated Selling, General and Administrative Expenses
Comparative Results of Operations for the Three and Six Months Ended June 30, 2022 and 2021
	Three Months Ended June 30,						Variance			Percent Change			Six Months Ended June 30,						Variance			Percent Change
	2022			2021									2022			2021
	(In thousands)												(In thousands)
Indirect selling, general and administrative expenses	$	4,390		$	3,780		$	610		16	%		$	8,512		$	7,699		$	813		11	%

Non-GAAP Financial Measures

The following tables reconcile the non-GAAP financial measurements used by management to our most directly comparable GAAP measures for the three and six months ended June 30, 2022 and 2021, which represents EBITDA, Adjusted EBITDA, Distributable Cash Flow, and Adjusted Free Cash Flow:

Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA
	Three Months Ended June 30,						Six Months Ended June 30,
	2022			2021			2022			2021
	(in thousands)						(in thousands)
Net income	6,606			(6,612	)		18,084			(4,101	)
Adjustments:
Interest expense	12,846			13,309			25,275			26,262
Income tax expense	2,037			935			3,578			1,157
Depreciation and amortization	14,800			14,483			29,286			28,917
EBITDA	36,289			22,115			76,223			52,235
Adjustments:
(Gain) loss on disposition of property, plant and equipment	(246	)		(89	)		(260	)		671
Unrealized mark-to-market on commodity derivatives	—			424			—			205
Lower of cost or market and other non-cash adjustments	2,242			—			2,242			—
Unit-based compensation	45			48			79			288
Adjusted EBITDA	38,330			22,498			78,284			53,399

Reconciliation of Net Cash provided by Operating Activities to Adjusted EBITDA, Distributable Cash Flow, and Adjusted Free Cash Flow
	Three Months Ended June 30,								Six Months Ended June 30,
	2022				2021				2022				2021
	(in thousands)								(in thousands)
Net cash provided by operating activities	$	(2,494	)		$	2,231			$	28,451			$	6,085
Interest expense 1		12,061				12,543				23,707				24,741
Current income tax expense		654				252				1,274				399
Lower of cost or market and other non-cash adjustments		2,242				—				2,242				—
Commodity cash flow hedging gains reclassified to earnings		(82	)			—				734				—
Net cash paid for closed commodity derivative positions included in AOCI		(700	)			—				(85	)			—
Changes in operating assets and liabilities which (provided) used cash:
Accounts and other receivables, inventories, and other current assets		68,797				20,065				64,901				24,252
Trade, accounts and other payables, and other current liabilities		(41,182	)			(12,468	)			(42,795	)			(1,865	)
Other		(966	)			(125	)			(145	)			(213	)
Adjusted EBITDA		38,330				22,498				78,284				53,399
Adjustments:
Interest expense		(12,846	)			(13,309	)			(25,275	)			(26,262	)
Income tax expense		(2,037	)			(935	)			(3,578	)			(1,157	)
Deferred income taxes		1,383				683				2,304				758
Amortization of deferred debt issuance costs		785				766				1,568				1,521
Payments for plant turnaround costs		(165	)			(20	)			(1,600	)			(1,694	)
Maintenance capital expenditures		(3,155	)			(2,370	)			(8,554	)			(6,441	)
Distributable Cash Flow		22,295				7,313				43,149				20,124
Principal payments under finance lease obligations		(60	)			(160	)			(119	)			(2,591	)
Expansion capital expenditures		(1,455	)			(1,147	)			(4,556	)			(1,977	)
Adjusted Free Cash Flow	$	20,780			$	6,006			$	38,474			$	15,556

¹ Net of amortization of debt issuance costs and discount, 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/20220720005721/en/

Sharon Taylor - Vice President & Chief Financial Officer

(877) 256-6644

investor.relations@mmlp.com

Source: Martin Midstream Partners L.P.

FAQ

What were the financial results for MMLP in Q2 2022?

MMLP reported a net income of $6.6 million and adjusted EBITDA of $38.3 million for Q2 2022.

How much revenue did MMLP generate in Q2 2022?

The partnership's revenue for Q2 2022 was $267 million, up from $184.3 million in Q2 2021.

What is the revised adjusted EBITDA guidance for MMLP in 2022?

MMLP revised its 2022 adjusted EBITDA guidance to between $126 million and $135 million.

When is the quarterly distribution for MMLP payable?

The quarterly distribution of $0.005 per unit is payable on August 12, 2022.