0001176334-15-000082.txt : 20150729 0001176334-15-000082.hdr.sgml : 20150729 20150729160814 ACCESSION NUMBER: 0001176334-15-000082 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20150729 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20150729 DATE AS OF CHANGE: 20150729 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MARTIN MIDSTREAM PARTNERS LP CENTRAL INDEX KEY: 0001176334 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-PETROLEUM BULK STATIONS & TERMINALS [5171] IRS NUMBER: 050527861 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-50056 FILM NUMBER: 151012826 BUSINESS ADDRESS: STREET 1: 4200 STONE ROAD CITY: KILGORE STATE: TX ZIP: 75662 BUSINESS PHONE: 9039836252 MAIL ADDRESS: STREET 1: PO BOX 191 CITY: KILGORE STATE: TX ZIP: 75663 8-K 1 a2015630form8k-earningsrel.htm 8-K 2015.6.30 Form 8K - Earnings Release


UNITED STATES
 
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT
 
Pursuant to Section 13 or 15(d)
 
of the Securities Exchange Act of 1934
 
Date of report (date of earliest event reported): July 29, 2015
 
MARTIN MIDSTREAM PARTNERS L.P.
(Exact name of Registrant as specified in its charter)
DELAWARE
(State of incorporation
or organization)
 
000-50056
(Commission file number)
 
05-0527861
(I.R.S. employer identification number)
 
 
 
4200 STONE ROAD
 
 
KILGORE, TEXAS
(Address of principal executive offices)
 
75662
(Zip code)
 
Registrant's telephone number, including area code: (903) 983-6200
 
(Former name or former address, if changed since last report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o
 
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o
 
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o
 
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o
 
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 
 




Item 2.02
 
Results of Operations and Financial Condition.
 
          On July 29, 2015, Martin Midstream Partners L.P. (the “Partnership”) issued a press release reporting its financial results for the quarter ended June 30, 2015.   A copy of the press release is furnished as Exhibit 99.1 to this Current Report and will be published on the Partnership's website at www.martinmidstream.com. In accordance with General Instruction B.2 of Form 8-K, the information set forth herein and in the press release is deemed to be “furnished” and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). 

Item 9.01
 
Financial Statements and Exhibits.
 
(d)      Exhibits
 
          In accordance with General Instruction B.2 of Form 8-K, the information set forth in the attached Exhibit 99.1 is deemed to be “furnished” and shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act.

Exhibit
Number
 
Description
99.1
 
Press release dated July 29, 2015

























 




 SIGNATURES
 
     Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
MARTIN MIDSTREAM PARTNERS L.P.
 
By: Martin Midstream GP LLC,
Its General Partner
 
Date: July 29, 2015
 
By: /s/ Robert D. Bondurant  
 
 
Robert D. Bondurant
 
 
Executive Vice President, Treasurer, Principal Accounting Officer and
Chief Financial Officer 
 
 











































 INDEX TO EXHIBITS

Exhibit
 
 
Number
 
Description
 
99.1

 
 
Press release dated July 29, 2015
 





















































 EX-99.1 2 exhibit99_1q22015.htm EXHIBIT 99.1 EXHIBIT 99_1 Q2 2015

EXHIBIT 99.1


MARTIN MIDSTREAM PARTNERS REPORTS
INCREASED DISTRIBUTABLE CASH FLOW AND ADJUSTED EBITDA
IN 2015 SECOND QUARTER RESULTS

•
Distributable cash flow from continuing operations increased 58% compared to the second quarter of 2014
•
Adjusted EBITDA of $45.0 million representing an increase of 37% compared to the second quarter of 2014
•
Incremental distributions from West Texas LPG Pipeline System of $4 to $6 million projected annually

KILGORE, Texas, July 29, 2015 (GlobeNewswire) -- Martin Midstream Partners L.P. (Nasdaq: MMLP) (the "Partnership") announced today its financial results for the quarter ended June 30, 2015.

Ruben Martin, President and Chief Executive Officer of Martin Midstream GP LLC, the general partner of Martin Midstream Partners, said, “The Partnership had a strong second quarter for 2015. Cash flow from operations exceeded plan and the positive impact of stable cash flows from acquisitions made during 2014 helped to reduce the impact of seasonal cash flow swings we’ve historically seen during the summer months. Also, and as anticipated, some cash flow specific to our fertilizer business was delayed due to wet weather. We typically realize this cash flow as fertilizers are applied during the first quarter of the year. Accordingly, our second quarter 2015 distribution coverage ratio was 0.96 times which exceeded internal forecast and compares favorably to second quarter 2014 coverage of 0.88 times. For the most recent twelve months ended June 30, 2015, our coverage ratio from continuing operations was 1.01 times.

"Looking across our segments, Terminalling and Storage met expectations based on strong performance from our traditional tankage assets, as well as the shore-based and specialty terminals. However, performance was offset by a weaker than expected quarter across our Martin Lubricants platform due to reduced demand and lower margins for our products.

"Natural Gas Services performed well during the second quarter as our Cardinal Gas Storage division exceeded plan in each of the first three quarters since being fully acquired last year. Our natural gas liquids ("NGL") businesses also achieved their quarterly cash flow forecasts in light of the current price environment. NGL pricing reduced the working capital requirement we normally see in this segment on an absolute basis, thus helping the Partnership’s balance sheet and leverage metrics at quarter end. During the quarter, we brought on line our new NGL rail car handling facility at our Arcadia, Louisiana NGL storage location. This rail terminal gives us nationwide access to source liquids as part of our NGL storage, handling and distribution businesses. During the first month of operations, customer demand exceeded our expectations. Cash flow from this asset will primarily be realized during the fourth quarter this year and first quarter next year upon liquids withdrawal.

"The Partnership anticipates an increase in the distribution it receives from its 20 percent ownership of the West Texas LPG Pipeline System of between $4 and $6 million per year which is attributable to the tariff revisions that became effective July 1, 2015. The actual increase will depend primarily on actual throughput and the number of incentive rate plans executed by shippers on the pipeline.

"In the Fertilizer division of our Sulfur Services Segment, as mentioned, cash flow was strong based on delayed first quarter activity pushed into early summer. We also benefited from both additional shipments pushing volume higher and improved pricing on our sulfur inventory position at quarter end.

"Lastly, Marine Transportation cash flow was slightly below internal expectations for the quarter as strong asset utilization was offset by higher than expected repair and maintenance expense."




The Partnership's distributable cash flow from continuing operations for the second quarter of 2015 was $31.9 million compared to distributable cash flow from continuing operations for the second quarter of 2014 of $20.1 million, an increase of 58%.

The Partnership's distributable cash flow from continuing operations for the six months ended June 30, 2015 was $69.0 million compared to distributable cash flow from continuing operations for the six months ended June 30, 2014 of $41.8 million, an increase of 65%.

The Partnership's adjusted EBITDA from continuing operations for the second quarter of 2015 was $45.0 million compared to adjusted EBITDA from continuing operations for the second quarter of 2014 of $32.8 million, an increase of 37%. Net income for the second quarter of 2015 was $11.0 million, or $0.19 per limited partner unit. The Partnership had a net loss for the second quarter of 2014 of $1.0 million, or $0.01 per limited partner unit.

The Partnership's adjusted EBITDA from continuing operations for the six months ended June 30, 2015 was $95.4 million compared to adjusted EBITDA from continuing operations for the six months ended June 30, 2014 of $71.9 million, an increase of 33%. Net income for the six months ended June 30, 2015 was $28.2 million, or $0.54 per limited partner unit. Net income for six months ended June 30, 2014 was $10.8 million, or $0.45 per limited partner unit.

Revenues for the second quarter of 2015 were $251.1 million compared to $403.3 million for the second quarter of 2014. Revenues for the six months ended June 30, 2015 were $556.5 million compared to $888.1 million for the six months ended June 30, 2014. The decline in revenues is attributable primarily to significantly lower natural gas liquids prices.
    
On February 12, 2015, the Partnership exited the natural gas liquids floating storage and trans-loading businesses as a result of the sale of its six liquefied petroleum gas pressure barges, collectively referred to as the "Floating Storage Assets", for $41.3 million. The Partnership recorded a gain on the disposition of $1.5 million.

The Partnership had no net income, distributable cash flow or adjusted EBITDA from discontinued operations related to the Floating Storage Assets in the second quarter of 2015. Distributable cash flow and EBITDA from discontinued operations were negative $0.9 million for the second quarter of 2014. Discontinued operations resulted in a loss of $1.3 million, or $0.04 per limited partner unit, for the second quarter of 2014.

Distributable cash flow and adjusted EBITDA from discontinued operations were $1.2 million for the six months ended June 30, 2015. The Partnership had net income from discontinued operations for the six months ended June 30, 2015 of $1.2 million, or $0.02 per limited partner unit.

Distributable cash flow and adjusted EBITDA from discontinued operations were negative $1.1 million for the six months ended June 30, 2014. Discontinued operations resulted in a loss of $1.9 million, or $0.07 per limited partner unit, for the six months ended June 30, 2014.

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 directly comparable GAAP measurement.

Included with this press release are the Partnership's consolidated financial statements as of and for the three and six months ended June 30, 2015 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 July 29, 2015.
    



Quarterly Cash Distribution
 
The quarterly cash distribution of $0.8125 per common unit, which was announced on July 23, 2015, is payable on August 14, 2015 to common unitholders of record as of the close of business on August 7, 2015. The ex-dividend date for the cash distribution is August 5, 2015. This distribution reflects an annualized distribution rate of $3.25 per unit.

Investors' Conference Call
  
An investors' conference call to review the second quarter results will be held on Thursday, July 30, 2015, at 8:00 a.m. Central Time. The conference call can be accessed by calling (877) 878-2695. An audio replay of the conference call will be available by calling (855) 859-2056 from 11:00 a.m. Central Time on July 30, 2015 through 10:59 p.m. Central Time on August 11, 2015. The access code for the conference call and the audio replay is Conference ID No. 87432839. 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) terminalling, storage and packaging services for petroleum products and by-products; (2) natural gas services, including liquids transportation and distribution services and natural gas storage; (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.

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.

Contact: Joe McCreery, Head of Investor Relations, at (903) 988-6425 and (877) 256-6644.



MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED BALANCE SHEETS
(Unaudited)
(Dollars in thousands)


 
 
June 30, 2015
 
December 31, 2014
Assets
 
 
 
Cash
$
24

 
$
42

Accounts and other receivables, less allowance for doubtful accounts of $352 and $1,620, respectively
75,175

 
134,173

Product exchange receivables
294

 
3,046

Inventories
76,563

 
88,718

Due from affiliates
10,712

 
14,512

Other current assets
7,646

 
6,772

Assets held for sale
—

 
40,488

Total current assets
170,414

 
287,751

 
 
 
 
Property, plant and equipment, at cost
1,374,805

 
1,343,674

Accumulated depreciation
(377,652
)
 
(345,397
)
Property, plant and equipment, net
997,153

 
998,277

 
 
 
 
Goodwill
23,802

 
23,802

Investment in unconsolidated entities
133,495

 
134,506

Note receivable - Martin Energy Trading LLC
15,000

 
15,000

Other assets, net
71,646

 
81,465

Total Assets
$
1,411,510

 
$
1,540,801

 
 
 
 
Liabilities and Partners’ Capital
 

 
 

Trade and other accounts payable
$
81,950

 
$
125,332

Product exchange payables
12,704

 
10,396

Due to affiliates
4,754

 
4,872

Income taxes payable
736

 
1,174

Other accrued liabilities
20,344

 
21,801

Total current liabilities
120,488

 
163,575

 
 
 
 
Long-term debt, net
840,159

 
888,887

Other long-term obligations
2,274

 
2,668

Total liabilities
962,921

 
1,055,130

 
 
 
 
Commitments and contingencies


 


Partners’ capital
448,589

 
485,671

Total Liabilities and Partners' Capital
$
1,411,510

 
$
1,540,801


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 July 29, 2015.



MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars and units in thousands, except per unit amounts)

 
Three Months Ended
 
Six Months Ended
 
June 30,
 
June 30,
 
2015
 
2014
 
2015
 
2014
Revenues:
 
 
 
 
 
 
 
Terminalling and storage  *
$
33,453

 
$
34,167

 
$
67,250

 
$
65,968

Marine transportation  *
20,343

 
22,084

 
40,979

 
45,198

Natural gas services
16,564

 
—

 
33,051

 
—

Sulfur services
3,090

 
3,038

 
6,180

 
6,075

Product sales: *
 
 
 
 
 
 
 
Natural gas services
97,786

 
232,986

 
244,089

 
554,400

Sulfur services
45,284

 
59,543

 
95,331

 
110,713

Terminalling and storage
34,579

 
51,443

 
69,572

 
105,716

 
177,649

 
343,972

 
408,992

 
770,829

Total revenues
251,099

 
403,261

 
556,452

 
888,070

 
 
 
 
 
 
 
 
Costs and expenses:
 

 
 

 
 

 
 

Cost of products sold: (excluding depreciation and amortization)
 

 
 

 
 

 
 

Natural gas services *
88,623

 
223,314

 
226,330

 
532,733

Sulfur services *
33,518

 
45,315

 
69,541

 
83,168

Terminalling and storage *
29,658

 
46,806

 
59,740

 
94,835

 
151,799

 
315,435

 
355,611

 
710,736

Expenses:
 

 
 

 
 

 
 

Operating expenses  *
47,783

 
47,111

 
93,089

 
90,011

Selling, general and administrative  *
9,035

 
8,605

 
17,841

 
17,061

Depreciation and amortization
22,685

 
14,212

 
45,402

 
27,820

Total costs and expenses
231,302

 
385,363

 
511,943

 
845,628

Other operating income (loss)
(167
)
 
99

 
(177
)
 
54

Operating income
19,630

 
17,997

 
44,332

 
42,496

 
 
 
 
 
 
 
 
Other income (expense):
 

 
 

 
 

 
 

Equity in earnings of unconsolidated entities
1,649

 
1,938

 
3,389

 
1,642

Interest expense, net
(9,925
)
 
(11,441
)
 
(20,471
)
 
(22,892
)
Debt prepayment premium
—

 
(7,767
)
 
—

 
(7,767
)
Other, net
(79
)
 
(49
)
 
358

 
(117
)
Total other expense
(8,355
)
 
(17,319
)
 
(16,724
)
 
(29,134
)
 
 
 
 
 
 
 
 
Net income before taxes
11,275

 
678

 
27,608

 
13,362

Income tax expense
(314
)
 
(354
)
 
(614
)
 
(654
)
Income from continuing operations
10,961

 
324

 
26,994

 
12,708

Income (loss) from discontinued operations, net of income taxes
—

 
(1,292
)
 
1,215

 
(1,881
)
Net income (loss)
10,961

 
(968
)
 
28,209

 
10,827

Less general partner's interest in net (income) loss
(4,113
)
 
19

 
(8,351
)
 
(217
)
Less (income) loss allocable to unvested restricted units
(44
)
 
3

 
(111
)
 
(29
)
Limited partners' interest in net income (loss)
$
6,804

 
$
(946
)
 
$
19,747

 
$
10,581


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 July 29, 2015.

*Related Party Transactions Shown Below




MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars and units in thousands, except per unit amounts)

*Related Party Transactions Included Above
 
Three Months Ended
 
Six Months Ended
 
June 30,
 
June 30,
 
2015
 
2014
 
2015
 
2014
Revenues:*
 
 
 
 
 
 
 
Terminalling and storage
$
23,061

 
$
18,743

 
$
43,535

 
$
36,753

Marine transportation
6,622

 
6,415

 
13,367

 
12,264

Product Sales
1,759

 
3,709

 
3,348

 
5,601

Costs and expenses:*
 
 
 
 
 
 
 
Cost of products sold: (excluding depreciation and amortization)
 
 
 
 
 
 
 
Natural gas services
6,810

 
10,808

 
13,728

 
19,261

Sulfur services
3,618

 
4,452

 
7,242

 
9,317

Terminalling and storage
5,632

 
6,553

 
11,034

 
16,397

Expenses:
 
 
 
 
 
 
 
Operating expenses
18,915

 
19,248

 
39,315

 
37,487

Selling, general and administrative
5,849

 
5,489

 
11,843

 
10,873


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 July 29, 2015.


MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars and units in thousands, except per unit amounts)

 
Three Months Ended
 
Six Months Ended
 
June 30,
 
June 30,
 
2015
 
2014
 
2015
 
2014
Allocation of net income (loss) attributable to:
 
 
 
 
 
 
 
Limited partner interest:
 
 
 
 
 
 
 
 Continuing operations
$
6,804

 
$
316

 
$
18,896

 
$
12,419

 Discontinued operations
—

 
(1,262
)
 
851

 
(1,838
)
 
$
6,804

 
$
(946
)
 
$
19,747

 
$
10,581

General partner interest:
 
 
 
 
 
 
 
  Continuing operations
$
4,113

 
$
8

 
$
7,992

 
$
255

  Discontinued operations
—

 
(27
)
 
359

 
(38
)
 
$
4,113

 
$
(19
)
 
$
8,351

 
$
217

 
 
 
 
 
 
 
 
Net income (loss) per unit attributable to limited partners:
 
 
 
 
 
 
 
Basic:
 
 
 
 
 
 
 
Continuing operations
$
0.19

 
$
0.01

 
$
0.54

 
$
0.45

Discontinued operations
—

 
(0.04
)
 
0.02

 
(0.07
)
 
$
0.19

 
$
(0.03
)
 
$
0.56

 
$
0.38

 
 
 
 
 
 
 
 
Weighted average limited partner units - basic
35,308

 
28,924

 
35,316

 
27,757

 
 
 
 
 
 
 
 
Diluted:
 
 
 
 
 
 
 
Continuing operations
$
0.19

 
$
0.01

 
$
0.54

 
$
0.45

Discontinued operations
—

 
(0.04
)
 
0.02

 
(0.07
)
 
$
0.19

 
$
(0.03
)
 
$
0.56

 
$
0.38

 
 
 
 
 
 
 
 
Weighted average limited partner units - diluted
35,376

 
28,958

 
35,372

 
27,791


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 July 29, 2015.



MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED STATEMENTS OF CAPITAL
(Unaudited)
(Dollars in thousands)


 
Partners’ Capital
 
 
 
Common Limited
 
General Partner Amount
 
 
 
Units
 
Amount
 
 
Total
Balances - January 1, 2014
26,625,026

 
$
254,028

 
$
6,389

 
$
260,417

Net income
—

 
10,610

 
217

 
10,827

Issuance of common units
4,017,156

 
160,514

 
—

 
160,514

Issuance of restricted units
6,900

 
—

 
—

 
—

Forfeiture of restricted units
(3,250
)
 
—

 
—

 
—

General partner contribution
—

 
—

 
3,407

 
3,407

Cash distributions
—

 
(42,192
)
 
(953
)
 
(43,145
)
Excess purchase price over carrying value of acquired assets
—

 
(5,397
)
 
—

 
(5,397
)
Unit-based compensation
—

 
387

 
—

 
387

Purchase of treasury units
(6,400
)
 
(277
)
 
—

 
(277
)
Balances - June 30, 2014
30,639,432

 
$
377,673

 
$
9,060

 
$
386,733

 
 
 
 
 
 
 
 
Balances - January 1, 2015
35,365,912

 
$
470,943

 
$
14,728

 
$
485,671

Net income
—

 
19,858

 
8,351

 
28,209

Issuance of common units
—

 
(269
)
 
—

 
(269
)
Issuance of restricted units
91,950

 
—

 
—

 
—

Forfeiture of restricted units
(1,000
)
 
—

 
—

 
—

General partner contribution
—

 
—

 
55

 
55

Cash distributions
—

 
(57,612
)
 
(8,965
)
 
(66,577
)
Unit-based compensation
—

 
750

 
—

 
750

Reimbursement of excess purchase price over carrying value of acquired assets
—

 
750

 
—

 
750

Balances - June 30, 2015
35,456,862

 
$
434,420

 
$
14,169

 
$
448,589


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 July 29, 2015.
 


MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)


 
Six Months Ended
 
June 30,
 
2015
 
2014
Cash flows from operating activities:
 
 
 
Net income
$
28,209

 
$
10,827

Less: (Income) loss from discontinued operations, net of income taxes
(1,215
)
 
1,881

Net income from continuing operations
26,994

 
12,708

Adjustments to reconcile net income to net cash provided by operating activities:
 

 
 

Depreciation and amortization
45,402

 
27,820

Amortization of deferred debt issuance costs
1,742

 
4,588

Amortization of debt discount
—

 
1,305

Amortization of premium on notes payable
(164
)
 
(82
)
Loss (gain) on sale of property, plant and equipment
165

 
(54
)
Equity in earnings of unconsolidated entities
(3,389
)
 
(1,642
)
Non-cash mark-to-market on derivatives
—

 
(547
)
Unit-based compensation
750

 
387

Preferred dividends on MET investment
—

 
1,116

Return on investment
4,400

 
—

Change in current assets and liabilities, excluding effects of acquisitions and dispositions:
 

 
 

Accounts and other receivables
58,689

 
16,305

Product exchange receivables
2,752

 
(1,437
)
Inventories
12,204

 
(15,648
)
Due from affiliates
3,800

 
(9,816
)
Other current assets
(711
)
 
(1,430
)
Trade and other accounts payable
(46,283
)
 
(23,460
)
Product exchange payables
2,308

 
12,483

Due to affiliates
(118
)
 
3,959

Income taxes payable
(438
)
 
(386
)
Other accrued liabilities
(959
)
 
(1,449
)
Change in other non-current assets and liabilities
(1,709
)
 
587

Net cash provided by continuing operating activities
105,435

 
25,307

Net cash used in discontinued operating activities
(1,351
)
 
(4,358
)
Net cash provided by operating activities
104,084

 
20,949

Cash flows from investing activities:
 

 
 

Payments for property, plant and equipment
(28,027
)
 
(41,237
)
Acquisitions, less cash acquired
—

 
(1,991
)
Payments for plant turnaround costs
(1,754
)
 
(3,910
)
Proceeds from sale of property, plant and equipment
776

 
702

Proceeds from involuntary conversion of property, plant and equipment
—

 
2,475

Investment in unconsolidated entities
—

 
(134,413
)
Return of investments from unconsolidated entities
—

 
2,425

Contributions to unconsolidated entities
—

 
(3,070
)
Net cash used in continuing investing activities
(29,005
)
 
(179,019
)
Net cash provided by discontinued investing activities
41,250

 
—

Net cash provided by (used in) investing activities
12,245

 
(179,019
)
Cash flows from financing activities:
 

 
 

Payments of long-term debt
(151,000
)
 
(885,000
)
Proceeds from long-term debt
101,000

 
917,250

Proceeds from issuance of common units, net of issuance related costs
(269
)
 
160,514

General partner contribution
55

 
3,407

Purchase of treasury units
—

 
(277
)
Payment of debt issuance costs
(306
)
 
(3,120
)
Excess purchase price over carrying value of acquired assets
—

 
(5,397
)
Reimbursement of excess purchase price over carrying value of acquired assets
750

 
—

Cash distributions paid
(66,577
)
 
(43,145
)
Net cash provided by (used in) financing activities
(116,347
)
 
144,232

Net decrease in cash
(18
)
 
(13,838
)
Cash at beginning of period
42

 
16,542

Cash at end of period
$
24

 
$
2,704

Non-cash additions to property, plant and equipment
$
3,767

 
$
3,111


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 July 29, 2015.


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, 2015 and 2014
 
Three Months Ended June 30,
 
Variance
 
Percent Change
 
2015
 
2014
 
 
 
(In thousands, except BBL per day)
 
 
Revenues:
 
 
 
 
 
 
 
Services
$
34,708

 
$
35,474

 
$
(766
)
 
(2)%
Products
34,579

 
51,443

 
(16,864
)
 
(33)%
Total revenues
69,287

 
86,917

 
(17,630
)
 
(20)%
 
 
 
 
 
 
 
 
Cost of products sold
30,150

 
47,310

 
(17,160
)
 
(36)%
Operating expenses
22,326

 
20,370

 
1,956

 
10%
Selling, general and administrative expenses
938

 
731

 
207

 
28%
Depreciation and amortization
9,617

 
9,415

 
202

 
2%
 
6,256

 
9,091

 
(2,835
)
 
(31)%
Other operating income (loss)
(195
)
 
83

 
(278
)
 
 
Operating income
$
6,061

 
$
9,174

 
$
(3,113
)
 
(34)%
 
 
 
 
 
 
 
 
Lubricant sales volumes (gallons)
5,984

 
8,814

 
(2,830
)
 
(32)%
Shore-based throughput volumes (gallons)
43,836

 
61,466

 
(17,630
)
 
(29)%
Smackover refinery throughput volumes (BBL per day)
6,524

 
7,102

 
(578
)
 
(8)%
Corpus Christi crude terminal (BBL per day)
169,787

 
166,971

 
2,816

 
2%

Comparative Results of Operations for the Six Months Ended June 30, 2015 and 2014
 
Six Months Ended June 30,
 
Variance
 
Percent Change
 
2015
 
2014
 
 
 
(In thousands, except BBL per day)
 
 
Revenues:
 
 
 
 
 
 
 
Services
$
69,749

 
$
68,498

 
$
1,251

 
2%
Products
69,572

 
105,716

 
(36,144
)
 
(34)%
Total revenues
139,321

 
174,214

 
(34,893
)
 
(20)%
 
 
 
 
 
 
 
 
Cost of products sold
61,311

 
95,835

 
(34,524
)
 
(36)%
Operating expenses
42,679

 
40,122

 
2,557

 
6%
Selling, general and administrative expenses
1,811

 
1,698

 
113

 
7%
Depreciation and amortization
19,406

 
18,390

 
1,016

 
6%
 
14,114

 
18,169

 
(4,055
)
 
(22)%
Other operating income (loss)
(201
)
 
38

 
(239
)
 
(629)%
Operating income
$
13,913

 
$
18,207

 
$
(4,294
)
 
(24)%
 
 
 
 
 
 
 
 
Lubricant sales volumes (gallons)
12,033

 
17,977

 
(5,944
)
 
(33)%
Shore-based throughput volumes (gallons)
86,360

 
122,618

 
(36,258
)
 
(30)%
Smackover refinery throughput volumes (BBL per day)
6,033

 
5,132

 
901

 
18%
Corpus Christi crude terminal (BBL per day)
175,151

 
153,732

 
21,419

 
14%



MARTIN MIDSTREAM PARTNERS L.P.
SEGMENT OPERATING INCOME
(Unaudited)
(Dollars and volumes in thousands, except BBL per day)



Natural Gas Services Segment

Comparative Results of Operations for the Three Months Ended June 30, 2015 and 2014
 
Three Months Ended June 30,
 
Variance
 
Percent Change
 
2015
 
2014
 
 
 
(In thousands)
 
 
Revenues:
 
 
 
 
 
 
 
Services
$
16,564

 
$
—

 
$
16,564

 
 
Products
97,786

 
232,986

 
(135,200
)
 
(58)%
Total revenues
114,350

 
232,986

 
(118,636
)
 
(51)%
 
 
 
 
 
 
 
 
Cost of products sold
89,074

 
223,806

 
(134,732
)
 
(60)%
Operating expenses
5,727

 
1,173

 
4,554

 
388%
Selling, general and administrative expenses
2,364

 
1,601

 
763

 
48%
Depreciation and amortization
8,373

 
293

 
8,080

 
2,758%
 
8,812

 
6,113

 
2,699

 
44%
Other operating income (loss)
(3
)
 
—

 
(3
)
 
 
Operating income
$
8,809

 
$
6,113

 
$
2,696

 
44%
 
 
 
 
 
 
 
 
Distributions from unconsolidated entities
$
2,300

 
$
561

 
$
1,739

 
310%
 
 
 
 
 
 
 
 
NGL sales volumes (Bbls)
3,220

 
3,728

 
(508
)
 
(14)%

Comparative Results of Operations for the Six Months Ended June 30, 2015 and 2014
 
Six Months Ended June 30,
 
Variance
 
Percent Change
 
2015
 
2014
 
 
 
(In thousands)
 
 
Revenues:
 
 
 
 
 
 
 
Services
$
33,051

 
$
—

 
$
33,051

 

Products
244,089

 
554,400

 
(310,311
)
 
(56)%
Total revenues
277,140

 
554,400

 
(277,260
)
 
(50)%
 
 
 
 
 
 
 
 
Cost of products sold
227,241

 
533,667

 
(306,426
)
 
(57)%
Operating expenses
11,416

 
2,092

 
9,324

 
446%
Selling, general and administrative expenses
4,465

 
2,887

 
1,578

 
55%
Depreciation and amortization
16,775

 
413

 
16,362

 
3,962%
 
17,243

 
15,341

 
1,902

 
12%
Other operating income (loss)
(7
)
 
—

 
(7
)
 
 
Operating income
$
17,236

 
$
15,341

 
$
1,895

 
12%
 
 
 
 
 
 
 
 
Distributions from unconsolidated entities
$
4,400

 
$
1,341

 
$
3,059

 
228%
 
 
 
 
 
 
 
 
NGL sales volumes (Bbls)
7,089

 
11,741

 
(4,652
)
 
(40)%



MARTIN MIDSTREAM PARTNERS L.P.
SEGMENT OPERATING INCOME
(Unaudited)
(Dollars and volumes in thousands, except BBL per day)

    
Sulfur Services Segment

Comparative Results of Operations for the Three Months Ended June 30, 2015 and 2014
 
Three Months Ended June 30,
 
Variance
 
Percent Change
 
2015
 
2014
 
 
 
(In thousands)
 
 
Revenues:
 
 
 
 
 
 
 
Services
$
3,090

 
$
3,038

 
$
52

 
2%
Products
45,284

 
59,543

 
(14,259
)
 
(24)%
Total revenues
48,374

 
62,581

 
(14,207
)
 
(23)%
 
 
 
 
 
 
 
 
Cost of products sold
33,613

 
45,406

 
(11,793
)
 
(26)%
Operating expenses
3,987

 
4,809

 
(822
)
 
(17)%
Selling, general and administrative expenses
863

 
1,123

 
(260
)
 
(23)%
Depreciation and amortization
2,105

 
2,031

 
74

 
4%
Operating income
$
7,806

 
$
9,212

 
$
(1,406
)
 
(15)%
 
 
 
 
 
 
 
 
Sulfur (long tons)
222

 
204

 
18

 
9%
Fertilizer (long tons)
82

 
90

 
(8
)
 
(9)%
Total sulfur services volumes (long tons)
304

 
294

 
10

 
3%

Comparative Results of Operations for the Six Months Ended June 30, 2015 and 2014    
 
Six Months Ended June 30,
 
Variance
 
Percent Change
 
2015
 
2014
 
 
 
(In thousands)
 
 
Revenues:
 
 
 
 
 
 
 
Services
$
6,180

 
$
6,075

 
$
105

 
2%
Products
95,331

 
110,713

 
(15,382
)
 
(14)%
Total revenues
101,511

 
116,788

 
(15,277
)
 
(13)%
 
 
 
 
 
 
 
 
Cost of products sold
69,726

 
83,349

 
(13,623
)
 
(16)%
Operating expenses
8,270

 
8,786

 
(516
)
 
(6)%
Selling, general and administrative expenses
1,925

 
2,238

 
(313
)
 
(14)%
Depreciation and amortization
4,231

 
4,014

 
217

 
5%
Operating income
$
17,359

 
$
18,401

 
$
(1,042
)
 
(6)%
 
 
 
 
 
 
 
 
Sulfur (long tons)
438

 
395

 
43

 
11%
Fertilizer (long tons)
178

 
181

 
(3
)
 
(2)%
Total sulfur services volumes (long tons)
616

 
576

 
40

 
7%




MARTIN MIDSTREAM PARTNERS L.P.
SEGMENT OPERATING INCOME
(Unaudited)
(Dollars and volumes in thousands, except BBL per day)

Marine Transportation Segment

Comparative Results of Operations for the Three Months Ended June 30, 2015 and 2014
 
Three Months Ended June 30,
 
Variance
 
Percent Change
 
2015
 
2014
 
 
 
(In thousands)
 
 
Revenues
$
20,886

 
$
23,282

 
$
(2,396
)
 
(10)%
Operating expenses
16,523

 
22,177

 
(5,654
)
 
(25)%
Selling, general and administrative expenses
350

 
312

 
38

 
12%
Depreciation and amortization
2,590

 
2,473

 
117

 
5%
 
1,423

 
(1,680
)
 
3,103

 
(185)%
Other operating income
31

 
16

 
15

 
94%
Operating income (loss)
$
1,454

 
$
(1,664
)
 
$
3,118

 
(187)%

Comparative Results of Operations for the Six Months Ended June 30, 2015 and 2014
 
Six Months Ended June 30,
 
Variance
 
Percent Change
 
2015
 
2014
 
 
 
(In thousands)
 
 
Revenues
$
42,832

 
$
47,396

 
$
(4,564
)
 
(10)%
Operating expenses
32,429

 
41,624

 
(9,195
)
 
(22)%
Selling, general and administrative expenses
310

 
503

 
(193
)
 
(38)%
Depreciation and amortization
4,990

 
5,003

 
(13
)
 
—%
  Operating income  
$
5,103

 
$
266

 
$
4,837

 
1,818%
Other operating income
31

 
16

 
15

 
94%
Operating income
$
5,134

 
$
282

 
$
4,852

 
1,721%
 









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 six months ended June 30, 2015 and 2014.

Reconciliation of EBITDA, Adjusted EBITDA, and Distributable Cash Flow
 
Three Months Ended
 
Six Months Ended
 
June 30,
 
June 30,
 
2015
 
2014
 
2015
 
2014
 
(in thousands)
Net income
$
10,961

 
$
(968
)
 
$
28,209

 
$
10,827

Less: (Income) loss from discontinued operations, net of income taxes
—

 
1,292

 
(1,215
)
 
1,881

Income from continuing operations
10,961

 
324

 
26,994

 
12,708

Adjustments:
 
 
 
 
 
 
 
Interest expense
9,925

 
11,441

 
20,471

 
22,892

Income tax expense
314

 
354

 
614

 
654

Depreciation and amortization
22,685

 
14,212

 
45,402

 
27,820

EBITDA
43,885

 
26,331

 
93,481

 
64,074

Adjustments:
 
 
 
 
 
 
 
Equity in earnings of unconsolidated entities
(1,649
)
 
(1,938
)
 
(3,389
)
 
(1,642
)
(Gain) loss on sale of property, plant and equipment
153

 
(99
)
 
165

 
(54
)
Debt prepayment premium
—

 
7,767

 
—

 
7,767

Distributions from unconsolidated entities
2,300

 
561

 
4,400

 
1,341

Unit-based compensation
351

 
208

 
750

 
387

Adjusted EBITDA
45,040

 
32,830

 
95,407

 
71,873

Adjustments:
 
 
 
 
 
 
 
Interest expense
(9,925
)
 
(11,441
)
 
(20,471
)
 
(22,892
)
Income tax expense
(314
)
 
(354
)
 
(614
)
 
(654
)
Amortization of debt discount
—

 
1,228

 
—

 
1,305

Amortization of debt premium
(82
)
 
(82
)
 
(164
)
 
(82
)
Amortization of deferred debt issuance costs
874

 
3,778

 
1,742

 
4,588

Non-cash mark-to-market on derivatives
—

 
547

 
—

 
547

Payments for plant turnaround costs
(286
)
 
(1,746
)
 
(1,754
)
 
(3,910
)
Maintenance capital expenditures
(3,424
)
 
(4,616
)
 
(5,183
)
 
(8,954
)
Distributable Cash Flow
$
31,883

 
$
20,144

 
$
68,963

 
$
41,821