Martin Midstream Partners LP (MMLP)

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Martin Midstream Partners 1Q Net $12.8M >MMLP
4:01 pm ET April 25, 2018 (Dow Jones) Print
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April 25, 2018 16:01 ET (20:01 GMT)

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April 25, 2018 16:01 ET (20:01 GMT)

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April 25, 2018 16:01 ET (20:01 GMT)

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Martin Midstream Partners Reports 2018 First Quarter Financial Results

-- First Quarter 2018 Net Income of $12.8 million

-- Strong Quarterly Distribution Coverage Ratio of 1.36 times

-- First Quarter Distributable Cash Flow and Adjusted EBITDA Exceeds

Guidance

KILGORE, Texas, April 25, 2018 (GLOBE NEWSWIRE) -- Martin Midstream Partners L.P. (Nasdaq:MMLP) (the "Partnership") announced today its financial results for the quarter ended March 31, 2018.

Ruben Martin, President and Chief Executive Officer of Martin Midstream GP LLC, the general partner of the Partnership said, "I am pleased with our first quarter 2018 performance as the Partnership earned adjusted EBITDA of $44.7 million, approximately 2.0% ahead of our guidance. As is typical with the seasonal nature of our businesses, we followed a strong fourth quarter 2017 with sequentially strong cash flow during the first quarter this year. Correspondingly, our distribution coverage ratio for the quarter was similarly robust at 1.36 times.

"The Partnership's adjusted EBITDA for the quarter exceeded guidance by $0.8 million. Looking across our operating segments, our Natural Gas Services segment exceeded guidance based primarily on the excellent performance in our wholesale propane business. Propane saw vastly improved margins and volume demand driven by colder weather. Likewise, our Marine Transportation segment continued to benefit from improved cost measures and operational efficiencies while utilization of our equipment was solid, as cash flow exceeded guidance. Performance in our sulfur services segment was in line with our guidance level. And finally, our Terminalling and Storage segment modestly missed cash flow guidance as weakness in our shore based terminals and lubricants businesses was offset by lower operating expenses and better than forecasted cash flow at the Smackover refinery.

"During the quarter, we continued the planned expansion and extension of the WTLPG Pipeline into the Delaware Basin. During 2018, we expect to invest a total of approximately $40.0 million in this project. To accommodate financing, we successfully amended our revolving credit facility to allow for these ongoing capital expenditures; and our amendment grants us additional flexibility related to the seasonal inventory build of natural gas liquids during the second and third quarters."

The Partnership had net income for the first quarter 2018 of $12.8 million, or $0.33 per limited partner unit. The Partnership had net income for the first quarter 2017 of $13.6 million, or $0.36 per limited partner unit. The Partnership's adjusted EBITDA for the first quarter 2018 was $44.7 million compared to adjusted EBITDA from for the first quarter 2017 of $46.8 million.

The Partnership's distributable cash flow for the first quarter 2018 was $26.7 million compared to distributable cash flow for the first quarter 2017 of $30.3 million.

Revenues for the first quarter 2018 were $284.2 million compared to the first quarter 2017 of $253.3 million.

Distributable cash flow, EBITDA and adjusted EBITDA are non-GAAP financial measures which are explained in greater detail below under the heading "Use of Non-GAAP Financial Information." The Partnership has also included below a table entitled "Reconciliation of EBITDA, Adjusted EBITDA, and Distributable Cash Flow" in order to show the components of these non-GAAP financial measures and their reconciliation to the most comparable GAAP measurement.

Included with this press release are the Partnership's consolidated and condensed financial statements as of and for the three months ended March 31, 2018 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 April 25, 2018.

An attachment accompanying this announcement is available at http://resource.globenewswire.com/Resource/Download/ff94e25f-5398-478c-a83f-cda29333cb8b

Investors' Conference Call

An investors conference call to review the first quarter results will be held on Thursday, April 26, 2018 at 8:00 a.m. Central Time. The conference call can be accessed by calling [phone]. An audio replay of the conference call will be available by calling [phone] from 11:00 a.m. Central Time on April 26, 2018 through 10:59 p.m. Central Time on May 7, 2018. The access code for the conference call and the audio replay is Conference ID No. 1799846. 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) natural gas services, including liquids transportation and distribution services and natural gas storage; (2) terminalling, storage and packaging services for petroleum products and by-products; (3) sulfur and sulfur-based products processing, manufacturing, marketing and distribution; and (4) marine transportation services for petroleum products and by-products.

Forward-Looking Statements

Statements about the Partnership's outlook and all other statements in this release other than historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements and all references to financial estimates rely on a number of assumptions concerning future events and are subject to a number of uncertainties and other factors, many of which are outside the Partnership's control, which could cause actual results to differ materially from such statements. While the Partnership believes that the assumptions concerning future events are reasonable, it cautions that there are inherent difficulties in anticipating or predicting certain important factors. A discussion of these factors, including risks and uncertainties, is set forth in the Partnership's annual and quarterly reports filed from time to time with the Securities and Exchange Commission. The Partnership disclaims any intention or obligation to revise any forward-looking statements, including financial estimates, whether as a result of new information, future events, or otherwise except where required to do so by law.

Use of Non-GAAP Financial Information

The Partnership's management uses a variety of financial and operational measurements other than its financial statements prepared in accordance with United States Generally Accepted Accounting Principles ("GAAP") to analyze its performance. These include: (1) net income before interest expense, income tax expense, and depreciation and amortization ("EBITDA"), (2) adjusted EBITDA and (3) distributable cash flow. The Partnership's management views these measures as important performance measures of core profitability for its operations and the ability to generate and distribute cash flow, and as key components of its internal financial reporting. The Partnership's management believes investors benefit from having access to the same financial measures that management uses.

EBITDA and Adjusted EBITDA. Certain items excluded from EBITDA and adjusted EBITDA are significant components in understanding and assessing an entity's financial performance, such as cost of capital and historical costs of depreciable assets. The Partnership has included information concerning EBITDA and adjusted EBITDA because it provides investors and management with additional information to better understand the following: financial performance of the Partnership's assets without regard to financing methods, capital structure or historical cost basis; the Partnership's operating performance and return on capital as compared to those of other similarly situated entities; and the viability of acquisitions and capital expenditure projects. The Partnership's method of computing adjusted EBITDA may not be the same method used to compute similar measures reported by other entities. The economic substance behind the Partnership's use of adjusted EBITDA is to measure the ability of the Partnership's assets to generate cash sufficient to pay interest costs, support its indebtedness and make distributions to its unitholders.

Distributable Cash Flow. Distributable cash flow is a significant performance measure used by the Partnership's management and by external users of its financial statements, such as investors, commercial banks and research analysts, to compare basic cash flows generated by the Partnership to the cash distributions it expects to pay unitholders. Distributable cash flow is also an important financial measure for the Partnership's unitholders since it serves as an indicator of the Partnership's success in providing a cash return on investment. Specifically, this financial measure indicates to investors whether or not the Partnership is generating cash flow at a level that can sustain or support an increase in its quarterly distribution rates. Distributable cash flow is also a quantitative standard used throughout the investment community with respect to publicly-traded partnerships because the value of a unit of such an entity is generally determined by the unit's yield, which in turn is based on the amount of cash distributions the entity pays to a unitholder.

EBITDA, adjusted EBITDA and distributable cash flow should not be considered alternatives to, or more meaningful than, net income, cash flows from operating activities, or any other measure presented in accordance with GAAP. The Partnership's method of computing these measures may not be the same method used to compute similar measures reported by other entities.

Additional information concerning the Partnership is available on the Partnership's website at www.martinmidstream.com or by contacting:

Joe McCreery, IRC - Vice President - Finance & Head of Investor Relations

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MARTIN MIDSTREAM PARTNERS L.P.

CONSOLIDATED AND CONDENSED BALANCE SHEETS

(Dollars in thousands)

March 31, December 31,

2018 2017

(Unaudited) (Audited)

Assets

Cash $ 184 $ 27

Accounts and other receivables, less

allowance for doubtful accounts of $419

and $314, respectively 84,554 107,242

Product exchange receivables 75 29

Inventories (Note 6) 73,894 97,252

Due from affiliates 25,866 23,668

Fair value of derivatives (Note 10) 82 --

Other current assets 6,004 4,866

Assets held for sale (Note 4) 9,442 9,579

Total current assets 200,101 242,663

Property, plant and equipment, at cost 1,265,516 1,253,065

Accumulated depreciation (432,275) (421,137)

Property, plant and equipment, net 833,241 831,928

Goodwill 17,296 17,296

Investment in WTLPG (Note 7) 130,644 128,810

Other assets, net (Note 9) 29,779 32,801

Total assets $1,211,061 $ 1,253,498

Liabilities and Partners' Capital

Trade and other accounts payable $ 86,751 $ 92,567

Product exchange payables 10,200 11,751

Due to affiliates 1,084 3,168

Income taxes payable 659 510

Fair value of derivatives (Note 10) -- 72

Other accrued liabilities (Note 9) 15,234 26,340

Total current liabilities 113,928 134,408

Long-term debt, net (Note 8) 795,139 812,632

Other long-term obligations 10,808 8,217

Total liabilities 919,875 955,257

Commitments and contingencies (Note 15)

Partners' capital (Note 11) 291,186 298,241

Total partners' capital 291,186 298,241

Total liabilities and partners'

capital $1,211,061 $ 1,253,498

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 April 25, 2018.

MARTIN MIDSTREAM PARTNERS L.P.

CONSOLIDATED AND CONDENSED STATEMENTS OF OPERATIONS

(Dollars in thousands, except per unit amounts)