Martin Midstream Partners Reports Fourth Quarter and Full Year 2022 Financial Results and Releases 2023 Financial Guidance
Martin Midstream Partners L.P. (Nasdaq:MMLP) ("MMLP" or the "Partnership") today announced its financial results for the fourth quarter and year ended December 31, 2022.
Bob Bondurant, President and Chief Executive Officer of Martin Midstream GP LLC, the general partner of the Partnership, stated, "Despite the challenges we faced in the second half of 2022 due to fluctuating commodity prices, the Partnership had another solid year. While results were slightly lower than our guidance range, all of our business segments, with the exception of the NGL segment, outperformed compared to our internal forecast; with the Transportation segment leading the way. During the last month we announced our intent to exit the butane optimization business which will substantially lower our working capital needs, reduce volatility in our earnings, and lessen our exposure to commodity prices in the future. We anticipate that by the end of the second quarter of 2023, all remaining butane inventory volumes will be sold. We intend to redeploy our underground butane storage assets by utilizing them in a fee-based business model, providing our customers reliable storage and logistics services, while minimizing the impact to our employees.
“In January of 2023, we announced our plan to refinance the Partnership’s capital structure. On February 8, 2023, we closed and funded $400 million of new second lien notes due 2028, and used a portion of the proceeds to repay all of our outstanding notes due in 2024 and 2025, with the remainder being used to pay down borrowings under our revolving credit facility. Concurrently, we amended our revolving credit facility lowering the bank commitments to $200 million and extending the maturity to 2027.
“In summary, with the planned exit from the butane optimization business and the extension of our debt maturities, we have substantially lowered the risk profile of the Partnership. We remain committed to capital discipline and continued strengthening of our balance sheet through meaningful debt reduction.”
FOURTH QUARTER 2022 OPERATING RESULTS BY BUSINESS SEGMENT
TERMINALLING AND STORAGE ("T&S")
T&S operating income was $4.3 million and $3.9 million for the three months ended December 31, 2022 and 2021, respectively.
Adjusted segment EBITDA for T&S was $10.5 million and $11.0 million for the three months ended December 31, 2022 and 2021, respectively, reflecting higher employee-related expenses at our specialty terminals coupled with lower volumes in our lubricant and specialty products divisions, offset by increased throughput revenue at our shore-based terminals and Smackover Refinery.
TRANSPORTATION
Transportation operating income was $11.1 million and $5.1 million for the three months ended December 31, 2022 and 2021, respectively.
Adjusted segment EBITDA for Transportation was $14.7 million and $8.8 million for the three months ended December 31, 2022 and 2021, respectively, reflecting robust demand for land transportation services coupled with improving marine fleet utilization and higher day rates.
SULFUR SERVICES
Sulfur Services operating income was $9.1 million and $8.9 million for the three months ended December 31, 2022 and 2021, respectively.
Adjusted segment EBITDA for Sulfur Services was $5.7 million and $11.4 million for the three months ended December 31, 2022 and 2021, respectively, due to decreased fertilizer sales volumes related to continued pricing instability. Additionally, the Sulfur Services segment saw reduced adjusted EBITDA of $0.5 million related to the sale of our Stockton, California, Sulfur prilling terminal on October 7, 2022.
NATURAL GAS LIQUIDS ("NGL")
NGL operating income (loss) was $(3.7) million and $12.2 million for the three months ended December 31, 2022 and 2021, respectively. Butane optimization operating income (loss) was $(4.7) million and $11.0 million for the three months ended December 31, 2022 and 2021, respectively.
Adjusted segment EBITDA for NGL was $(9.1) million and $12.8 million for the three months ended December 31, 2022 and 2021, respectively, primarily reflecting decreased NGL sales volumes and margins. Included in the NGL results is adjusted EBITDA of $(10.7) million and $11.0 million for the three months ended December 31, 2022 and 2021, respectively, attributable to the butane optimization business that the Partnership intends to exit.
UNALLOCATED SELLING, GENERAL AND ADMINISTRATIVE EXPENSE ("USGA")
USGA expenses included in operating income were $4.1 million and $4.3 million for the three months ended December 31, 2022 and 2021, respectively.
USGA expenses included in adjusted EBITDA were $4.1 million and $4.3 million for the three months ended December 31, 2022 and 2021, respectively, primarily reflecting an increase in employee-related expenses.
CAPITALIZATION
At December 31, 2022, the Partnership had $516 million of total debt outstanding, including $171 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 December 31, 2022, the Partnership had liquidity of approximately $63 million from available capacity under its revolving credit facility. The Partnership’s adjusted leverage ratio, as calculated under the revolving credit facility, was 4.27 times and 3.63 times on December 31, 2022 and September 30, 2022, respectively. The Partnership was in compliance with all debt covenants as of December 31, 2022.
On January 30, 2023 the Partnership announced its intent to offer $400 million in new 5-year senior secured second lien notes due 2028 and announced an amendment to its revolving credit facility effective upon the close of the note offering. Concurrently, the Partnership announced a cash tender for all its then outstanding 1.5 lien notes due 2024 and its second lien notes due 2025. On February 8, 2023, the Partnership announced its $400 million 5-year senior secured second lien notes offering closed and funded, all validly tendered notes were accepted and paid, and as such the revolving credit facility amendment was effective with the maturity extended to 2027. Also on February 8, 2023, the Partnership exercised its optional redemption rights with respect to the existing notes due 2024 and 2025 that remained outstanding following the tender offer, and satisfied and discharged its obligations under the indentures governing such notes.
For more detailed information on the $400 million senior secured second lien notes, and the amended and extended credit facility, see the Current Report on Form 8-K filed with the U.S. Securities and Exchange Commission on February 8, 2023 or at the Partnership’s website www.MMLP.com.
RESULTS OF OPERATIONS
The Partnership had a net loss of $0.4 million, a loss of $0.01 per limited partner unit, for the three months ended December 31, 2022. The Partnership had net income of $10.8 million, or $0.27 per limited partner unit, for the three months ended December 31, 2021. Adjusted EBITDA was $17.8 million for the three months ended December 31, 2022 compared to $39.7 million for the three months ended December 31, 2021. Net cash provided by operating activities was $32.9 million for the three months ended December 31, 2022 compared to $48.1 million for the three months ended December 31, 2021. Distributable cash flow was $(1.7) million for the three months ended December 31, 2022 compared to $19.3 million for the three months ended December 31, 2021.
The Partnership had a net loss of $10.3 million, a loss of $0.26 per limited partner unit, for the year ended December 31, 2022. The Partnership had a net loss of $0.2 million, a loss of $0.01 per limited partner unit, for the year ended December 31, 2021. Adjusted EBITDA was $114.9 million for the year ended December 31, 2022 compared to $114.5 million for the year ended December 31, 2021. Net cash provided by operating activities was $16.1 million for the year ended December 31, 2022 compared to $35.7 million for the year ended December 31, 2021. Distributable cash flow was $37.9 million for the year ended December 31, 2022 compared to $44.6 million for the year ended December 31, 2021.
Revenues were $243.4 million for the three months ended December 31, 2022 compared to $285.9 million for the three months ended December 31, 2021. Revenues were $1.019 billion for the year ended December 31, 2022 compared to $882.4 million for the year ended December 31, 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 fourth quarter 2022 to the Partnership's adjusted EBITDA for the fourth quarter 2021.
2023 FINANCIAL GUIDANCE
The Partnership expects full year 2023 Adjusted EBITDA of approximately $115.3 million after giving effect to the exit of the butane optimization business, growth capital expenditures of approximately $17.5 million with $12.5 million dedicated to the DSM Semichem joint venture, maintenance capital expenditures of $26.6 million, and projected year-end leverage of 4.0x. More detailed 2023 Financial Guidance is provided as an attachment included in the Current Report on Form 8-K to which this press release is included.
MMLP does not intend at this time to provide financial guidance beyond 2023.
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.
2022 K-1 TAX PACKAGES
The MMLP K-1 tax packages are expected to be available online through our website at www.mmlp.com or www.taxpackagesupport.com/martinmidstream after 5:00 p.m. Central Standard Time on February 28, 2023. Mailing of the tax packages is currently expected to be complete the week of March 6, 2023. In an effort to be environmentally friendly, the Partnership encourages its unitholders to sign up for electronic delivery of their MMLP tax package.
INVESTORS CONFERENCE CALL
Date: Thursday, February 16, 2023
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
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 four primary business lines include: (1) terminalling, processing, storage, and packaging services for petroleum products and by-products, including the refining of naphthenic crude oil; (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, Twitter, 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 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 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 BALANCE SHEETS
(Dollars in thousands)
December 31,
2022
2021
Assets
Cash
$
45
$
52
Trade and accrued accounts receivable, less allowance for doubtful accounts of $496 and $311, respectively
79,641
84,199
Inventories
109,798
62,120
Due from affiliates
8,010
14,409
Other current assets
13,633
12,908
Total current assets
211,127
173,688
Property, plant and equipment, at cost
903,535
898,770
Accumulated depreciation
(584,245
)
(553,300
)
Property, plant and equipment, net
319,290
345,470
Goodwill
16,671
16,823
Right-of-use assets
34,963
21,861
Deferred income taxes, net
14,386
19,821
Intangibles and other assets, net
2,414
2,198
$
598,851
$
579,861
Liabilities and Partners’ Capital (Deficit)
Current portion of long term debt and finance lease obligations
$
9
$
280
Trade and other accounts payable
68,198
70,342
Product exchange payables
32
1,406
Due to affiliates
8,947
1,824
Income taxes payable
665
385
Other accrued liabilities
33,074
29,850
Total current liabilities
110,925
104,087
Long-term debt, net
512,871
498,871
Finance lease obligations
—
9
Operating lease liabilities
26,268
15,704
Other long-term obligations
8,232
9,227
Total liabilities
658,296
627,898
Commitments and contingencies
Partners’ capital (deficit)
(59,445
)
(48,853
)
Accumulated other comprehensive income
—
816
Total partners’ capital (deficit)
(59,445
)
(48,037
)
$
598,851
$
579,861
MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per unit amounts)
Year Ended December 31,
2022
2021
2020
Revenues:
Terminalling and storage *
$
80,268
$
75,223
$
80,864
Transportation *
219,008
144,314
132,492
Sulfur services
12,337
11,799
11,659
Product sales: *
Natural gas liquids
398,422
414,043
247,479
Sulfur services
166,827
133,243
96,348
Terminalling and storage
142,016
103,809
103,300
707,265
651,095
447,127
Total revenues
1,018,878
882,431
672,142
Costs and expenses:
Cost of products sold: (excluding depreciation and amortization)
Natural gas liquids *
389,504
362,706
215,895
Sulfur services *
120,062
89,134
58,515
Terminalling and storage *
113,740
81,258
82,516
623,306
533,098
356,926
Expenses:
Operating expenses *
251,886
193,952
183,747
Selling, general and administrative *
41,812
41,012
40,900
Depreciation and amortization
56,280
56,751
61,462
Total costs and expenses
973,284
824,813
643,035
Other operating income (loss), net
5,669
(534
)
12,488
Gain on involuntary conversion of property, plant and equipment
—
196
4,907
Operating income
51,263
57,280
46,502
Other income (expense):
Interest expense, net
(53,665
)
(54,107
)
(46,210
)
Gain on retirement of senior unsecured notes
—
—
3,484
Loss on exchange of senior unsecured notes
—
—
(8,817
)
Other, net
(5
)
(4
)
6
Total other income (expense)
(53,670
)
(54,111
)
(51,537
)
Net income (loss) before taxes
(2,407
)
3,169
(5,035
)
Income tax expense
(7,927
)
(3,380
)
(1,736
)
Net loss
(10,334
)
(211
)
(6,771
)
Less general partner's interest in net loss
207
4
135
Less loss allocable to unvested restricted units
40
—
21
Limited partners' interest in net loss
$
(10,087
)
$
(207
)
$
(6,615
)
*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,
2022
2021
2020
Revenues:
Terminalling and storage
$
66,867
$
62,677
$
63,823
Transportation
28,393
20,046
21,997
Product sales
554
479
317
Costs and expenses:
Cost of products sold: (excluding depreciation and amortization)
Sulfur services
10,717
9,980
10,519
Terminalling and storage
39,375
27,866
18,429
Expenses:
Operating expenses
93,630
78,607
80,075
Selling, general and administrative
31,758
32,924
32,886
MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per unit amounts)
Year Ended December 31,
2022
2021
2020
Allocation of net income (loss) attributable to:
Limited partner interest:
$
(10,127
)
$
(207
)
$
(6,615
)
General partner interest:
$
(207
)
$
(4
)
$
(135
)
Net loss per unit attributable to limited partners:
Basic:
$
(0.26
)
$
(0.01
)
$
(0.17
)
Weighted average limited partner units - basic
38,726,048
38,689,041
38,656,559
Diluted:
$
(0.26
)
$
(0.01
)
$
(0.17
)
Weighted average limited partner units - diluted
38,726,048
38,689,041
38,656,559
MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Dollars in thousands)
Year Ended December 31,
2022
2021
2020
Net loss
$
(10,334
)
$
(211
)
$
(6,771
)
Changes in fair values of commodity cash flow hedges
$
(816
)
$
816
$
—
Comprehensive income (loss)
$
(11,150
)
$
605
$
(6,771
)
MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED STATEMENTS OF CAPITAL
(Dollars in thousands)
Partners’ Capital (Deficit)
Common
General
Partner
Amount
Accumulated
Other
Comprehensive
Income
Units
Amount
Total
Balances – December 31, 2019
38,863,389
$
(38,342
)
$
2,146
$
—
(36,196
)
Net loss
—
(6,636
)
(135
)
—
(6,771
)
Issuance of time-based restricted units
81,000
—
—
—
—
Forfeiture of restricted units
(85,467
)
—
—
—
—
Cash distributions
—
(5,211
)
(106
)
—
(5,317
)
Unit-based compensation
—
1,422
—
—
1,422
Purchase of treasury units
(7,748
)
(9
)
—
—
(9
)
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
—
—
—
—
Forfeiture of restricted units
(83,436
)
—
—
—
—
General partner contribution
—
—
3
—
3
Cash distributions
—
(775
)
(16
)
—
(791
)
Changes in fair values of commodity cash flow hedges
—
—
—
816
816
Excess purchase price over carrying value of acquired assets
—
(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
)
MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
Year Ended December 31,
2022
2021
2020
Cash flows from operating activities:
Net loss
$
(10,334
)
$
(211
)
$
(6,771
)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization
56,280
56,751
61,462
Amortization and write-off of deferred debt issue costs
3,152
3,367
3,422
Amortization of premium on notes payable
—
—
(191
)
Deferred income tax expense
5,744
2,432
1,169
(Gain) loss on disposition or sale of property, plant, and equipment
(5,669
)
534
(9,788
)
Gain on involuntary conversion of property, plant and equipment
—
(196
)
(4,907
)
Gain on retirement of senior unsecured notes
—
—
(3,484
)
Non-cash impact related to exchange of senior unsecured notes
—
—
(749
)
Derivative income
(901
)
5,593
8,209
Net cash paid for commodity derivatives
85
(4,984
)
(8,669
)
Unit-based compensation
161
384
1,422
Change in current assets and liabilities, excluding effects of acquisitions and dispositions:
Accounts and other receivables
4,579
(31,448
)
30,741
Inventories
(47,678
)
(8,334
)
5,264
Due from affiliates
6,399
398
2,932
Other current assets
(1,479
)
(3,552
)
(5,733
)
Trade and other accounts payable
486
14,331
(7,318
)
Product exchange payables
(1,374
)
1,033
(3,949
)
Due to affiliates
7,123
1,389
(1,035
)
Income taxes payable
280
(171
)
84
Other accrued liabilities
(2,087
)
(2,236
)
4,144
Change in other non-current assets and liabilities
1,381
649
(1,470
)
Net cash provided by operating activities
16,148
35,729
64,785
Cash flows from investing activities:
Payments for property, plant, and equipment
(27,237
)
(16,059
)
(28,622
)
Payments for plant turnaround costs
(5,176
)
(4,109
)
(1,478
)
Proceeds from sale of property, plant, and equipment
7,769
643
25,154
Proceeds from involuntary conversion of property, plant and equipment
—
284
7,550
Net cash provided by (used in) investing activities
(24,644
)
(19,241
)
2,604
Cash flows from financing activities:
Payments of long-term debt
(393,740
)
(333,790
)
(333,637
)
Payments under finance lease obligations
(279
)
(2,707
)
(4,562
)
Proceeds from long-term debt
404,650
316,500
282,019
General partner contributions
—
3
—
Excess purchase price over carrying value of acquired assets
(1,285
)
—
—
Purchase of treasury units
—
(17
)
(9
)
Payments of debt issuance costs
(64
)
(592
)
(3,781
)
Cash distributions paid
(793
)
(791
)
(5,317
)
Net cash provided by (used in) financing activities
8,489
(21,394
)
(65,287
)
Net increase (decrease) in cash
(7
)
(4,906
)
2,102
Cash at beginning of year
52
4,958
2,856
Cash at end of year
$
45
$
52
$
4,958
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, 2022 and 2021
Year Ended
December 31,
Variance
Percent
Change
2022
2021
(In thousands)
Revenues:
Services
$
86,664
$
81,762
$
4,902
6
%
Products
142,129
103,867
38,262
37
%
Total revenues
228,793
185,629
43,164
23
%
Cost of products sold
116,117
83,081
33,036
40
%
Operating expenses
58,748
52,972
5,776
11
%
Selling, general and administrative expenses
6,626
6,052
574
9
%
Depreciation and amortization
28,234
28,210
24
—
%
19,068
15,314
3,754
25
%
Other operating loss, net
(166
)
(48
)
(118
)
(246
)%
Gain on involuntary conversion of property, plant and equipment
—
196
(196
)
(100
)%
Operating income
$
18,902
$
15,462
$
3,440
22
%
Shore-based throughput volumes (gallons)
85,569
50,526
35,043
69
%
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, 2022 and 2021
Year Ended
December 31,
Variance
Percent
Change
2022
2021
(In thousands)
Revenues
$
239,275
$
161,180
$
78,095
48
%
Operating expenses
176,198
129,449
46,749
36
%
Selling, general and administrative expenses
8,215
7,670
545
7
%
Depreciation and amortization
14,567
15,719
(1,152
)
(7
)%
40,295
8,342
31,953
383
%
Other operating income, net
1,062
74
988
1,335
%
Operating income
$
41,357
$
8,416
$
32,941
391
%
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, 2022 and 2021
Year Ended
December 31,
Variance
Percent
Change
2022
2021
(In thousands)
Revenues:
Services
$
12,337
$
11,799
$
538
5
%
Products
166,827
133,243
33,584
25
%
Total revenues
179,164
145,042
34,122
24
%
Cost of products sold
127,018
95,287
31,731
33
%
Operating expenses
15,335
10,203
5,132
50
%
Selling, general and administrative expenses
6,081
5,284
797
15
%
Depreciation and amortization
11,099
10,432
667
6
%
19,631
23,836
(4,205
)
(18
)%
Other operating income, net
4,555
129
4,426
3,431
%
Operating income
$
24,186
$
23,965
$
221
1
%
Sulfur (long tons)
452.0
456.0
(4.0
)
(1
)%
Fertilizer (long tons)
211.0
301.0
(90.0
)
(30
)%
Sulfur services volumes (long tons)
663.0
757.0
(94.0
)
(12
)%
Natural Gas Services Segment
Comparative Results of Operations for the Years Ended December 31, 2022 and 2021
Year Ended
December 31,
Variance
Percent
Change
2022
2021
(In thousands)
Products Revenues
$
398,425
$
414,043
(15,618
)
(4
)%
Cost of products sold
403,922
375,239
28,683
8
%
Operating expenses
4,540
4,061
479
12
%
Selling, general and administrative expenses
4,069
6,098
(2,029
)
(33
)%
Depreciation and amortization
2,380
2,390
(10
)
—
%
(16,486
)
26,255
(42,741
)
(163
)%
Other operating income (loss), net
218
(689
)
907
132
%
Operating income (loss)
$
(16,268
)
$
25,566
$
(41,834
)
(164
)%
NGLs Volumes (barrels)
5,791
7,121
(1,330
)
(19
)%
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, 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
December 31,
Year Ended December 31,
2022
2021
2022
2021
(in thousands)
(in thousands)
Net income (loss)
$
(375
)
$
10,801
$
(10,334
)
$
(211
)
Adjustments:
Interest expense
14,484
13,735
53,665
54,107
Income tax expense
2,458
1,269
7,927
3,380
Depreciation and amortization
13,273
13,889
56,280
56,751
EBITDA
29,840
39,694
107,538
114,027
Adjustments:
(Gain) loss on disposition of property, plant and equipment
(4,619
)
(76
)
(5,669
)
534
Gain on involuntary conversion of property, plant and equipment
—
(10
)
—
(196
)
Unrealized mark-to-market on commodity derivatives
—
—
—
(207
)
Lower of cost or market and other non-cash adjustments
(7,476
)
—
12,850
—
Unit-based compensation
36
48
161
384
Adjusted EBITDA
$
17,781
$
39,656
$
114,880
$
114,542
Reconciliation of Net Cash provided by Operating Activities to Adjusted EBITDA, Distributable Cash Flow, and Adjusted Free Cash Flow
Three Months Ended
December 31,
Year Ended December 31,
2022
2021
2022
2021
(in thousands)
(in thousands)
Net cash provided by operating activities
$
32,904
$
48,135
$
16,148
$
35,729
Interest expense (1)
13,688
12,953
50,513
50,740
Current income tax expense
325
256
2,183
948
Lower of cost or market and other non-cash adjustments
(7,476
)
—
12,850
—
Commodity cash flow hedging gains reclassified to earnings
—
—
901
—
Net cash received for closed commodity derivative positions included in AOCI
—
(1,766
)
(85
)
(816
)
Changes in operating assets and liabilities which (provided) used cash:
Accounts and other receivables, inventories, and other current assets
(21,071
)
(21,579
)
38,179
42,936
Trade, accounts and other payables, and other current liabilities
(324
)
2,103
(4,428
)
(14,346
)
Other
(265
)
(446
)
(1,381
)
(649
)
Adjusted EBITDA
17,781
39,656
114,880
114,542
Adjustments:
Interest expense
(14,484
)
(13,735
)
(53,665
)
(54,107
)
Income tax expense
(2,458
)
(1,269
)
(7,927
)
(3,380
)
Deferred income taxes
2,133
1,013
5,744
2,432
Amortization of deferred debt issuance costs
796
782
3,152
3,367
Payments for plant turnaround costs
(914
)
(1,430
)
(5,176
)
(4,109
)
Maintenance capital expenditures
(4,526
)
(5,729
)
(19,074
)
(14,115
)
Distributable cash flow
(1,672
)
19,288
37,934
44,630
Principal payments under finance lease obligations
(99
)
(59
)
(279
)
(2,707
)
Expansion capital expenditures
(1,401
)
(1,361
)
(6,883
)
(4,705
)
Adjusted free cash flow
(3,172
)
17,868
30,772
37,218
(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.
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