Martin Midstream Partners Reports Third Quarter 2021 Financial Results and Declares Quarterly Cash Distribution
Martin Midstream Partners L.P. (Nasdaq:MMLP) (the "Partnership") today announced its financial results for the third quarter of 2021.
Bob Bondurant, President and Chief Executive Officer of Martin Midstream GP LLC, the general partner of the Partnership stated, “The Partnership’s third quarter performance exceeded our expectations, and we now expect to meet the top end of the range of our 2021 financial guidance for adjusted EBITDA of $95 to $102 million.
“On August 29, 2021, Hurricane Ida made landfall in Louisiana as a Category 4 storm with sustained winds of 150 miles per hour. Despite this extremely dangerous event, I am happy to report there were no injuries to our employees, although some did suffer damage to homes and property. The Partnership sustained minimal damage to assets in and around Port Fourchon. Further, in the days and weeks following the storm we were able to provide alternative storage and terminalling services from our Galveston terminal as needed.
“Turning to our results, in the Terminalling and Storage segment, demand for lubricants and grease products remains strong and our distribution lanes have been able to fulfill customer requirements even as the supply chain has been disordered. Within the Sulfur Services segment, the pure sulfur business continues to improve along with increased refinery utilization. Further downstream fertilizer sales and margins are outperforming as commodity prices remain strong for corn and cotton. In Transportation, our marine equipment utilization continues to increase as fundamentals in the industry improve and demand for trucking services remains elevated resulting in improved economics for the business segment.
“Finally, as is typical, the Natural Gas Liquids segment substantially increased butane inventory volumes in the third quarter to meet our customers' requirements throughout the winter gasoline blending season. Since this inventory build is concurrent with our weakest cash flow quarter due to the seasonality of both the fertilizer and butane businesses, a temporary rise in leverage occurs. Accordingly, at September 30, 2021, leverage increased to 5.5 times from 5.3 times at June 30, 2021. However, this increase is transitory and leverage is expected to significantly decrease by year-end, driven by the Partnership’s reduced working capital needs and strong financial performance.”
THIRD QUARTER 2021 OPERATING RESULTS BY BUSINESS SEGMENT
TERMINALLING AND STORAGE (“T&S”)
T&S Operating Income for the three months ended September 30, 2021 and 2020 was $4.4 million and $7.0 million, respectively.
Adjusted segment EBITDA for T&S was $11.2 million and $14.2 million, for the three month periods ended September 30, 2021 and 2020, respectively, reflecting increased utilities expense coupled with expired capital recovery fees at the Smackover Refinery, the disposition of our Mega Lubricants business in the 4th quarter of 2020, and increased utilities and repairs and maintenance expense at our Specialty Terminals.
TRANSPORTATION
Transportation Operating Income for the three months ended September 30, 2021 and 2020 was $3.9 million and $1.1 million, respectively.
Adjusted segment EBITDA for Transportation was $7.6 million and $5.5 million for the three months ended September 30, 2021 and 2020, respectively, reflecting higher rates counterbalanced by rising labor and operating costs along with increased land transportation load count, offset by lower marine day rates coupled with a reduction in marine equipment.
SULFUR SERVICES
Sulfur Services Operating Income for the three months ended September 30, 2021 and 2020 was $2.3 million and $5.6 million, respectively.
Adjusted segment EBITDA for Sulfur Services was $4.9 million and $4.2 million for the three months ended September 30, 2021 and 2020, respectively, reflecting increased fertilizer volumes and margins offset by lower sulfur volumes during the third quarter of 2021.
NATURAL GAS LIQUIDS (“NGL”)
NGL Operating Income for the three months ended September 30, 2021 and 2020 was $1.6 million and $1.8 million, respectively.
Adjusted segment EBITDA for NGL was $1.8 million and $2.8 million for the three months ended September 30, 2021 and 2020, respectively, primarily reflecting a decrease in volumes as 2020 benefited from an increased seasonal demand, offset by higher NGL margins.
UNALLOCATED SELLING, GENERAL AND ADMINISTRATIVE EXPENSE (“USGA”)
USGA expenses included in operating income for the three months ended September 30, 2021 and 2020 were $4.0 million and $4.5 million, respectively.
USGA expenses included in adjusted EBITDA for the three months ended September 30, 2021 and 2020 were $4.0 million and $4.2 million, respectively, primarily reflecting a reduction in overhead allocated from Martin Resource Management.
LIQUIDITY
At September 30, 2021, the Partnership had $208.5 million drawn on its $275 million revolving credit facility, an increase of $29 million from June 30, 2021. The Partnership’s leverage ratio, as calculated under the revolving credit facility, was 5.5 times and 5.3 times on September 30, 2021 and June 30, 2021, respectively. The Partnership was in compliance with all debt covenants as of September 30, 2021.
QUARTERLY CASH DISTRIBUTION
The Partnership has declared a quarterly cash distribution of $0.005 per unit for the quarter ended September 30, 2021. The distribution is payable on November 12, 2021 to common unitholders of record as of the close of business on November 5, 2021. The ex-dividend date for the cash distribution is November 4, 2021.
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.
COVID-19 RESPONSE
The Partnership continues to evaluate protocols in response to the COVID-19 pandemic, including the impact of variants of COVID-19, such as the Delta variant. Where possible, employee work from home initiatives remain and travel restrictions have been lifted. Employees are encouraged to continue to exercise safety measures to protect the welfare of each other and the communities they serve.
RESULTS OF OPERATIONS
The Partnership had a net loss for the three months ended September 30, 2021 of $6.9 million, a loss of $0.17 per limited partner unit. The Partnership had a net loss for the three months ended September 30, 2020 of $10.8 million, a loss of $0.27 per limited partner unit. Adjusted EBITDA for the three months ended September 30, 2021 was $21.5 million compared to the three months ended September 30, 2020 of $22.5 million. Distributable cash flow for the three months ended September 30, 2021 was $5.2 million compared to the three months ended September 30, 2020 of $8.1 million.
The Partnership had a net loss for the nine months ended September 30, 2021 of $11.0 million, a loss of $0.28 per limited partner unit. The Partnership had a net loss for the nine months ended September 30, 2020 of $4.2 million, a loss of $0.11 per limited partner unit. Adjusted EBITDA for the nine months ended September 30, 2021 was $74.9 million compared to the nine months ended September 30, 2020 of $77.5 million. Distributable cash flow for the nine months ended September 30, 2021 was $25.3 million compared to the nine months ended September 30, 2020 of $38.9 million.
Revenues for the three months ended September 30, 2021 were $211.3 million compared to the three months ended September 30, 2020 of $152.5 million. Revenues for the nine months ended September 30, 2021 were $596.5 million compared to the nine months ended September 30, 2020 of $492.1 million.
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 third quarter 2021 to the Partnership's adjusted EBITDA for the third quarter 2020.
Investors' Conference Call
Date: Thursday, October 21, 2021
Time: 8:00 a.m. CT (please dial in by 7:55 a.m.)
Dial In #: (833) 900-2251
Conference ID: 8571037
Replay Dial In # (800) 585-8367 – Conference ID: 8571037
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 L.P., headquartered in Kilgore, Texas, 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 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 guidance or to financial or operational estimates or projections 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, 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 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, (3) distributable cash flow and (4) adjusted free 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. 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. 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. The Partnership defines Distributable Cash Flow as Adjusted EBITDA less cash paid for interest, cash paid for income taxes, 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 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.
Adjusted Free Cash Flow. Adjusted free cash flow is defined 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 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. 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.
EBITDA, adjusted EBITDA, distributable cash flow, and adjusted free 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.
MMLP-F
MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED BALANCE SHEETS
(Dollars in thousands)
September 30,
2021
December 31,
2020
(Unaudited)
(Audited)
Assets
Cash
$
6,783
$
4,958
Accounts and other receivables, less allowance for doubtful accounts of $272 and $261, respectively
75,676
52,748
Inventories
98,139
54,122
Due from affiliates
10,133
14,807
Other current assets
10,441
8,991
Total current assets
201,172
135,626
Property, plant and equipment, at cost
894,767
889,108
Accumulated depreciation
(543,309)
(509,237)
Property, plant and equipment, net
351,458
379,871
Goodwill
16,823
16,823
Right-of-use assets
21,267
22,260
Deferred income taxes, net
20,834
22,253
Other assets, net
2,684
2,805
Total assets
$
614,238
$
579,638
Liabilities and Partners’ Capital (Deficit)
Current installments of long-term debt and finance lease obligations
$
240
$
31,497
Trade and other accounts payable
73,273
51,900
Product exchange payables
1,387
373
Due to affiliates
5,469
435
Income taxes payable
401
556
Fair value of derivatives
5,049
207
Other accrued liabilities
21,696
34,407
Total current liabilities
107,515
119,375
Long-term debt, net
547,090
484,597
Finance lease obligations
108
289
Operating lease liabilities
14,960
15,181
Other long-term obligations
8,721
7,067
Total liabilities
678,394
626,509
Commitments and contingencies
Partners’ capital (deficit)
(58,157)
(46,871)
Accumulated other comprehensive loss
(5,999)
—
Total partners’ capital (deficit)
(64,156)
(46,871)
Total liabilities and partners' capital (deficit)
$
614,238
$
579,638
MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except per unit amounts)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2021
2020
2021
2020
Revenues:
Terminalling and storage *
$
18,980
$
20,706
$
56,060
$
61,088
Transportation *
39,079
31,938
103,820
102,364
Sulfur services
2,950
2,915
8,849
8,744
Product sales: *
Natural gas liquids
91,764
52,350
257,081
164,860
Sulfur services
27,887
18,965
95,109
74,879
Terminalling and storage
30,598
25,659
75,606
80,119
150,249
96,974
427,796
319,858
Total revenues
211,258
152,533
596,525
492,054
Costs and expenses:
Cost of products sold: (excluding depreciation and amortization)
Natural gas liquids *
85,137
44,908
225,862
139,036
Sulfur services *
20,266
13,313
65,657
46,167
Terminalling and storage *
24,167
19,124
58,895
64,242
129,570
77,345
350,414
249,445
Expenses:
Operating expenses *
50,098
43,105
142,045
138,589
Selling, general and administrative *
9,739
10,339
29,308
30,659
Depreciation and amortization
13,945
15,276
42,862
45,858
Total costs and expenses
203,352
146,065
564,629
464,551
Other operating income (loss), net
61
23
(610)
2,548
Gain on involuntary conversion of property, plant and equipment
186
4,522
186
4,522
Operating income
8,153
11,013
31,472
34,573
Other income (expense):
Interest expense, net
(14,110)
(12,943)
(40,372)
(32,245)
Gain on retirement of senior unsecured notes
—
—
—
3,484
Loss on exchange of senior unsecured notes
—
(8,516)
—
(8,516)
Other, net
—
—
(1)
7
Total other expense
(14,110)
(21,459)
(40,373)
(37,270)
Net loss before taxes
(5,957)
(10,446)
(8,901)
(2,697)
Income tax expense
(954)
(373)
(2,111)
(1,510)
Net loss
(6,911)
(10,819)
(11,012)
(4,207)
Less general partner's interest in net loss
138
216
220
84
Less loss allocable to unvested restricted units
20
53
30
8
Limited partners' interest in net loss
$
(6,753)
$
(10,550)
$
(10,762)
$
(4,115)
Net loss per unit attributable to limited partners - basic
$
(0.17)
$
(0.27)
$
(0.28)
$
(0.11)
Net loss per unit attributable to limited partners - diluted
$
(0.17)
$
(0.27)
$
(0.28)
$
(0.11)
Weighted average limited partner units - basic
38,687,874
38,661,852
38,689,434
38,654,891
Weighted average limited partner units - diluted
38,687,874
38,661,852
38,689,434
38,654,891
*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
Nine Months Ended
September 30,
September 30,
2021
2020
2021
2020
Revenues:*
Terminalling and storage
$
15,866
$
15,902
$
46,741
$
47,718
Transportation
5,564
5,514
14,463
16,801
Product Sales
68
69
253
199
Costs and expenses:*
Cost of products sold: (excluding depreciation and amortization)
Sulfur services
2,441
2,512
7,379
7,833
Terminalling and storage
7,259
4,303
18,863
14,329
Expenses:
Operating expenses
20,088
18,915
58,046
60,126
Selling, general and administrative
7,659
8,356
23,624
24,723
MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited)
(Dollars in thousands)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2021
2020
2021
2020
Net loss
$
(6,911)
$
(10,819)
$
(11,012)
$
(4,207)
Changes in fair values of commodity cash flow hedges
(5,999)
—
(5,999)
—
Comprehensive loss
$
(12,910)
$
(10,819)
$
(17,011)
$
(4,207)
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, 2020
38,863,389
$
(38,342)
$
2,146
$
—
$
(36,196)
Net loss
—
(4,123)
(84)
—
(4,207)
Issuance of restricted units
81,000
—
—
—
—
Forfeiture of restricted units
(84,134)
—
—
—
—
Cash distributions
—
(5,019)
(102)
—
(5,121)
Unit-based compensation
—
1,070
—
—
1,070
Purchase of treasury units
(7,748)
(9)
—
—
(9)
Balances - September 30, 2020
38,852,507
$
(46,423)
$
1,960
$
—
$
(44,463)
Balances - January 1, 2021
38,851,174
$
(48,776)
$
1,905
$
—
$
(46,871)
Net loss
—
(10,792)
(220)
—
(11,012)
Issuance of restricted units
42,168
—
—
—
—
Forfeiture of restricted units
(83,436)
—
—
—
—
Cash distributions
—
(581)
(12)
—
(593)
Unit-based compensation
—
336
—
—
336
Changes in fair values of commodity cash flow hedges
—
—
—
(5,999)
(5,999)
Purchase of treasury units
(7,156)
(17)
—
—
(17)
Balances - September 30, 2021
38,802,750
$
(59,830)
$
1,673
$
(5,999)
$
(64,156)
MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
Nine Months Ended
September 30,
2021
2020
Cash flows from operating activities:
Net loss
$
(11,012)
$
(4,207)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization
42,862
45,858
Amortization of deferred debt issuance costs
2,585
2,674
Amortization of premium on notes payable
—
(191)
Deferred income tax expense
1,419
1,202
Loss on sale of property, plant and equipment, net
610
153
Gain on involuntary conversion of property, plant and equipment
(186)
(4,522)
Non-cash impact related to exchange of senior unsecured notes
—
(749)
Gain on retirement of senior unsecured notes
—
(3,484)
Derivative (income) loss
1,825
(815)
Net cash received (paid) for commodity derivatives
(2,982)
539
Non-cash unit-based compensation
336
1,070
Change in current assets and liabilities, excluding effects of acquisitions and dispositions:
Accounts and other receivables
(22,924)
30,012
Product exchange receivables
—
(212)
Inventories
(44,353)
(15,184)
Due from affiliates
4,674
(1,103)
Other current assets
(1,912)
(6,130)
Trade and other accounts payable
21,092
(17,117)
Product exchange payables
1,014
(1,278)
Due to affiliates
5,034
(1,003)
Income taxes payable
(155)
(137)
Other accrued liabilities
(10,536)
(5,534)
Change in other non-current assets and liabilities
203
(692)
Net cash provided by (used in) operating activities
(12,406)
19,150
Cash flows from investing activities:
Payments for property, plant and equipment
(11,449)
(23,705)
Payments for plant turnaround costs
(2,679)
(637)
Proceeds from involuntary conversion of property, plant and equipment
274
7,203
Proceeds from sale of property, plant and equipment
225
4,392
Net cash used in investing activities
(13,629)
(12,747)
Cash flows from financing activities:
Payments of long-term debt
(211,790)
(253,637)
Payments under finance lease obligations
(2,648)
(4,021)
Proceeds from long-term debt
243,500
259,019
Purchase of treasury units
(17)
(9)
Payment of debt issuance costs
(592)
(3,628)
Cash distributions paid
(593)
(5,121)
Net cash provided by (used in) financing activities
27,860
(7,397)
Net increase (decrease) in cash
1,825
(994)
Cash at beginning of period
4,958
2,856
Cash at end of period
$
6,783
$
1,862
Non-cash additions to property, plant and equipment
$
749
$
1,432
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 September 30, 2021 and 2020
Three Months Ended
September 30,
Variance
Percent
Change
2021
2020
(In thousands, except BBL per day)
Revenues:
Services
$
20,628
$
22,512
$
(1,884)
(8)
%
Products
30,598
25,676
4,922
19
%
Total revenues
51,226
48,188
3,038
6
%
Cost of products sold
24,618
20,381
4,237
21
%
Operating expenses
13,789
12,064
1,725
14
%
Selling, general and administrative expenses
1,528
1,537
(9)
(1)
%
Depreciation and amortization
7,049
7,294
(245)
(3)
%
4,242
6,912
(2,670)
(39)
%
Other operating income, net
11
1
10
1,000
%
Gain on involuntary conversion of property, plant and equipment
186
62
124
200
%
Operating income
$
4,439
$
6,975
$
(2,536)
(36)
%
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 Nine Months Ended September 30, 2021 and 2020
Nine Months Ended
September 30,
Variance
Percent
Change
2021
2020
(In thousands, except BBL per day)
Revenues:
Services
$
60,945
$
66,115
$
(5,170)
(8)
%
Products
75,639
80,183
(4,544)
(6)
%
Total revenues
136,584
146,298
(9,714)
(7)
%
Cost of products sold
60,318
68,066
(7,748)
(11)
%
Operating expenses
39,246
37,269
1,977
5
%
Selling, general and administrative expenses
4,495
4,594
(99)
(2)
%
Depreciation and amortization
21,150
22,022
(872)
(4)
%
11,375
14,347
(2,972)
(21)
%
Other operating income (loss), net
6
(3,053)
3,059
100
%
Gain on involuntary conversion of property, plant and equipment
186
62
124
200
%
Operating income
$
11,567
$
11,356
$
211
2
%
Shore-based throughput volumes (guaranteed minimum) (gallons)
60,000
60,000
—
—
%
Smackover refinery throughput volumes (guaranteed minimum) (BBL per day)
6,500
6,500
—
—
%
Transportation Segment
Comparative Results of Operations for the Three Months Ended September 30, 2021 and 2020
Three Months Ended
September 30,
Variance
Percent Change
2021
2020
(In thousands)
Revenues
$
42,568
$
35,712
$
6,856
19
%
Operating expenses
33,053
28,144
4,909
17
%
Selling, general and administrative expenses
1,920
2,050
(130)
(6)
%
Depreciation and amortization
3,710
4,412
(702)
(16)
%
3,885
1,106
2,779
251
%
Other operating income, net
42
21
21
100
%
Operating income
$
3,927
$
1,127
$
2,800
248
%
Comparative Results of Operations for the Nine Months Ended September 30, 2021 and 2020
Nine Months Ended
September 30,
Variance
Percent Change
2021
2020
(In thousands)
Revenues
$
114,886
$
116,145
$
(1,259)
(1)
%
Operating expenses
94,042
91,637
2,405
3
%
Selling, general and administrative expenses
5,578
6,243
(665)
(11)
%
Depreciation and amortization
12,039
13,020
(981)
(8)
%
$
3,227
$
5,245
$
(2,018)
(38)
%
Other operating income (loss), net
59
(1,174)
1,233
105
%
Operating income
$
3,286
$
4,071
$
(785)
(19)
%
Sulfur Services Segment
Comparative Results of Operations for the Three Months Ended September 30, 2021 and 2020
Three Months Ended
September 30,
Variance
Percent Change
2021
2020
(In thousands)
Revenues:
Services
$
2,950
$
2,915
$
35
1
%
Products
27,887
18,965
8,922
47
%
Total revenues
30,837
21,880
8,957
41
%
Cost of products sold
21,799
14,141
7,658
54
%
Operating expenses
2,849
2,501
348
14
%
Selling, general and administrative expenses
1,321
1,166
155
13
%
Depreciation and amortization
2,594
2,953
(359)
(12)
%
2,274
1,119
1,155
103
%
Other operating income, net
8
1
7
700
%
Operating income
$
2,282
$
1,120
$
1,162
104
%
Sulfur (long tons)
145
154
(9)
(6)
%
Fertilizer (long tons)
57
44
13
30
%
Total sulfur services volumes (long tons)
202
198
4
2
%
Comparative Results of Operations for the Nine Months Ended September 30, 2021 and 2020
Nine Months Ended
September 30,
Variance
Percent
Change
2021
2020
(In thousands)
Revenues:
Services
$
8,849
$
8,744
$
105
1
%
Products
95,109
74,892
20,217
27
%
Total revenues
103,958
83,636
20,322
24
%
Cost of products sold
69,619
49,546
20,073
41
%
Operating expenses
7,662
8,553
(891)
(10)
%
Selling, general and administrative expenses
3,777
3,535
242
7
%
Depreciation and amortization
7,882
8,978
(1,096)
(12)
%
15,018
13,024
1,994
15
%
Other operating income, net
14
6,777
(6,763)
(100)
%
Gain on involuntary conversion of property, plant and equipment
—
4,460
(4,460)
(100)
%
Operating income
$
15,032
$
24,261
$
(9,229)
(38)
%
Sulfur (long tons)
364
503
(139)
(28)
%
Fertilizer (long tons)
236
209
27
13
%
Total sulfur services volumes (long tons)
600
712
(112)
(16)
%
Natural Gas Liquids Segment
Comparative Results of Operations for the Three Months Ended September 30, 2021 and 2020
Three Months Ended
September 30,
Variance
Percent
Change
2021
2020
(In thousands)
Products revenues
$
91,764
$
52,350
$
39,414
75
%
Cost of products sold
87,551
47,723
39,828
83
%
Operating expenses
1,088
1,039
49
5
%
Selling, general and administrative expenses
954
1,117
(163)
(15)
%
Depreciation and amortization
592
617
(25)
(4)
%
Operating income
$
1,579
$
1,854
$
(275)
(15)
%
NGL sales volumes (Bbls)
1,435
1,723
(288)
(17)
%
Comparative Results of Operations for the Nine Months Ended September 30, 2021 and 2020
Nine Months Ended
September 30,
Variance
Percent Change
2021
2020
(In thousands)
Products revenues
$
257,081
$
164,865
$
92,216
56
%
Cost of products sold
234,239
148,562
85,677
58
%
Operating expenses
3,144
3,128
16
1
%
Selling, general and administrative expenses
3,858
3,194
664
21
%
Depreciation and amortization
1,791
1,838
(47)
(3)
%
14,049
8,143
5,906
73
%
Other operating loss, net
(689)
(2)
(687)
(34,350)
%
Operating income
$
13,360
$
8,141
$
5,219
64
%
NGL sales volumes (Bbls)
4,839
5,892
(1,053)
(18)
%
Unallocated Selling, General and Administrative ExpensesComparative Results of Operations for the Three and Nine Months Ended September 30, 2021 and 2020
Three Months Ended
September 30,
Variance
Percent
Change
Nine Months Ended
September 30,
Variance
Percent
Change
2021
2020
2021
2020
(In thousands)
(In thousands)
Unallocated selling, general and administrative expenses
$
4,074
$
4,523
$
(449)
(10)
%
$
11,773
$
13,256
$
(1,483)
(11)
%
Non-GAAP Financial Measures
The following table reconciles the non-GAAP financial measurements used by management to our most directly comparable GAAP measures for the three and nine months ended September 30, 2021 and 2020.
Reconciliation of EBITDA, Adjusted EBITDA, Distributable Cash Flow and Adjusted Free Cash Flow
Three Months Ended
Nine Months Ended
September 30,
September 30,
2021
2020
2021
2020
(in thousands)
(in thousands)
Net loss
$
(6,911)
$
(10,819)
$
(11,012)
$
(4,207)
Adjustments:
Interest expense, net
14,110
12,943
40,372
32,245
Income tax expense
954
373
2,111
1,510
Depreciation and amortization
13,945
15,276
42,862
45,858
EBITDA
22,098
17,773
74,333
75,406
Adjustments:
(Gain) loss on sale of property, plant and equipment, net
(61)
(22)
610
153
Gain on involuntary conversion of property, plant and equipment
(186)
(4,522)
(186)
(4,522)
Unrealized mark-to-market on commodity derivatives
(412)
393
(207)
(276)
Non-cash insurance related accruals
—
—
—
250
Lower of cost or market adjustments
—
35
—
370
Loss on exchange of senior unsecured notes
—
8,516
—
8,516
Gain on repurchase of senior unsecured notes
—
—
—
(3,484)
Non-cash unit-based compensation
48
361
336
1,070
Adjusted EBITDA
21,487
22,534
74,886
77,483
Adjustments:
Interest expense, net
(14,110)
(12,943)
(40,372)
(32,245)
Income tax expense
(954)
(373)
(2,111)
(1,510)
Amortization of debt premium
—
(38)
—
(191)
Amortization of deferred debt issuance costs
1,064
1,683
2,585
2,674
Deferred income tax expense
661
184
1,419
1,202
Payments for plant turnaround costs
(985)
(406)
(2,679)
(637)
Maintenance capital expenditures
(1,945)
(2,576)
(8,386)
(7,882)
Distributable Cash Flow
$
5,218
$
8,065
$
25,342
$
38,894
Adjustments:
Expansion capital expenditures
$
(1,367)
$
(1,951)
$
(3,344)
$
(9,882)
Principal payments under finance lease obligations
(57)
(799)
(2,648)
(4,021)
Adjusted Free Cash Flow
$
3,794
$
5,315
$
19,350
$
24,991
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