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Martin Midstream Partners Reports 2010 Third Quarter Financial Results

The Partnership's distribution equivalents from unconsolidated entities is calculated as distributions from unconsolidated entities (as reported in statements of cash flows), plus return of investments from unconsolidated entities (as reported in statements of cash flows), plus distributions in-kind from unconsolidated entities (as reported in statements of cash flows). For the quarter ended September 30, 2010, the Partnership's distributions from unconsolidated entities, return of investments from unconsolidated entities and distributions in-kind from equity investments were $0.0 million, $1.7 million and $3.0 million, respectively. For the nine months ended September 30, 2010, the Partnership's distributions from unconsolidated entities, return of investments from unconsolidated entities and distributions in-kind from equity investments were $0.0 million, $2.4 million and $7.5 million, respectively.

The Partnership's invested cash in unconsolidated entities is calculated as distributions from (contributions to) unconsolidated entities for operations (as reported in statements of cash flows), plus expansion capital expenditures in unconsolidated entities (as reported under the caption "Liquidity and Capital Resources" in the Partnership's Annual Report on Form 10-K filed with the SEC on March 4, 2010). For the quarter ended September 30, 2010, the Partnership's distributions from (contributions to) unconsolidated entities for operations and expansion capital expenditures in unconsolidated entities were $(0.3) million and $1.0 million, respectively. For the nine months ended September 30, 2010, the Partnership's distributions from unconsolidated entities for operations and expansion capital expenditures in unconsolidated entities were $0.6 million and $2.0 million, respectively.

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

 

 

MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED BALANCE SHEETS
(Dollars in thousands)
     
     
  September 30, December 31,
  2010 2009
  (Unaudited) (Audited)
Assets    
Cash  $18,740 $5,956
Accounts and other receivables, less allowance for doubtful accounts of $2,025 and $1,025, respectively  61,242 77,413
Product exchange receivables  2,760 4,132
Inventories  51,276 35,510
Due from affiliates  5,268 3,051
Fair value of derivatives  2,155 1,872
Other current assets  2,290 1,340
Total current assets  143,731 129,274
     
Property, plant and equipment, at cost  601,964 584,036
Accumulated depreciation  (190,246) (162,121)
Property, plant and equipment, net  411,718 421,915
     
Goodwill  37,268 37,268
Investment in unconsolidated entities  97,579 80,582
Fair value of derivatives  111
Other assets, net  23,464 16,900
  $713,871 $685,939
Liabilities and Partners' Capital    
Current portion of capital lease obligations  $125 $111
Trade and other accounts payable  65,930 71,911
Product exchange payables  12,151 7,986
Due to affiliates  14,277 13,810
Income taxes payable  563 454
Fair value of derivatives  123 7,227
Other accrued liabilities  14,625 5,000
Total current liabilities  107,794 106,499
     
Long-term debt and capital leases, less current maturities  313,448 304,372
Deferred income taxes  8,154 8,628
Other long-term obligations  1,113 1,489
Total liabilities  430,509 420,988
     
Partners' capital  281,532 267,027
Accumulated other comprehensive income (loss)  1,830 (2,076)
Total partners' capital  283,362 264,951
Commitments and contingencies     
  $713,871 $685,939
     
These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in MMLP's Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 3, 2010.    
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,
  2010 2009¹ 2010 2009¹
Revenues:        
Terminalling and storage *  $17,357 $17,012 $50,062 $53,671
Marine transportation *  21,468 17,785 57,458 49,222
Product sales: *        
Natural gas services  107,842 103,061 397,855 268,749
Sulfur services  36,658 15,100 113,945 61,029
Terminalling and storage  12,062 6,314 30,687 28,853
  156,562 124,475 542,487 358,631
Total revenues  195,387 159,272 650,007 461,524
         
Costs and expenses:        
Cost of products sold: (excluding depreciation and amortization)         
Natural gas services *  102,487 96,358 379,433 248,693
Sulfur services *  30,505 7,716 86,855 34,742
Terminalling and storage  11,363 5,535 28,771 25,558
  144,355 109,609 495,059 308,993
Expenses:        
Operating expenses *  29,017 28,560 86,314 84,648
Selling, general and administrative *  4,542 4,581 14,650 13,754
Depreciation and amortization  10,175 10,439 30,066 29,256
Total costs and expenses  188,089 153,189 626,089 436,651
         
Other operating income  405 (22) 450 5,051
Operating income  7,703 6,061 24,368 29,924
         
Other income (expense):        
Equity in earnings of unconsolidated entities  2,951 2,139 7,469 5,227
Interest expense  (6,051) (4,300) (22,248) (13,587)
Other, net  34 133 117 347
Total other income (expense)  (3,066) (2,028) (14,662) (8,013)
Net income before taxes  4,637 4,033 9,706 21,911
Income tax benefit (expense)  (1) 242 (224) (1,664)
Net income  $4,636 $4,275 $9,482 $20,247
         
General partner's interest in net income  $1,000 $800 $2,832 $2,475
Limited partners' interest in net income  $3,359 $3,717 $5,819 $14,837
         
Net income per limited partner unit - basic and diluted  $0.19 $0.26 $0.33 $1.02
         
Weighted average limited partner units - basic  17,700,875 14,532,826 17,466,200 14,532,826
Weighted average limited partner units - diluted  17,701,719 14,538,231 17,467,514 14,536,792
¹ Financial information for 2009 has been revised to include results attributable to the Cross assets.   
         
*Related Party Transactions Included Above        
Revenues:        
Terminalling and storage  $12,292 $4,363 $34,579 $13,134
Marine transportation  7,968 4,776 20,948 14,529
Product Sales  5,265 1,340 8,647 4,384
Costs and expenses:        
Cost of products sold: (excluding depreciation and amortization)        
Natural gas services  16,353 17,211 57,721 38,552
Sulfur services  4,212 2,756 11,448 9,106
Expenses:        
Operating expenses  12,215 8,942 35,986 26,850
Selling, general and administrative  2,704 1,637 8,141 4,822
MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED STATEMENTS OF CAPITAL
(Unaudited)
(Dollars in thousands)
                 
                 
    Partners' Capital    
                 
              Accumulated   
              Other   
  Martin Resource          General  Comprehensive  
  Management Net Common Subordinated Partner Income  
  Investment ¹ Units Amount Units Amount Amount (Loss) Total
Balances – January 1, 2009  $11,665 13,688,152 $239,333 850,674 ($3,688) $4,004 ($4,935) $246,379
                 
Net income  2,935  — 13,969 868 2,475 20,247
                 
Cash distributions   — (30,799) (1,914) (2,884) (35,597)
                 
Unit-based compensation   — 59  —  — 59
                 
Purchase of treasury units  (77)  — (77)
                 
Adjustment in fair value of derivatives  —   —  —  —  —   — 1,870 1,870
                 
                 
Balances – September 30, 2009  $14,600 13,688,152 $222,485 850,674 ($4,734) $3,595 ($3,065) $232,881
                 
                 
Balances – January 1, 2010  $ — 16,057,832 $245,683 889,444 $16,613 $4,731 ($2,076) $264,951
                 
Net income   —  — 6,650 2,832 9,482
                 
Recognition of beneficial conversion feature    (831) 831
   —              
                 
Follow-on public offerings   — 2,650,000 78,600 78,600
                 
Redemption of common units    (1,000,000) (28,070) (28,070)
                 
General partner contribution   — 1,089 1,089
                 
Contributions to parent   — (4,369) (4,369)
                 
Cash distributions   —  — (38,605)  — (3,580) (42,185)
                 
Unit-based compensation   — 3,500 66  — 66
                 
Purchase of treasury units   — (3,500) (108)  — (108)
                 
Adjustment in fair value of derivatives  —   —  —  —  —  — 3,906 3,906
                 
                 
Balances – September 30, 2010  $ — 17,707,832 $259,016 889,444 $17,444 $5,072 $1,830 $283,362
These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in MMLP's Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 3, 2010.
                 
1 Financial information for 2009 has been revised to include balances attributable to the Cross assets acquired in November 2009.  
MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
     
  Nine Months Ended
  September 30,
  2010 2009¹
Cash flows from operating activities:    
Net income  $9,482 $20,247
Adjustments to reconcile net income to net cash provided by operating activities:    
Depreciation and amortization  30,066 29,256
Amortization of deferred debt issuance costs  3,676 842
Amortization of debt discount  181
Deferred taxes  (474) 179
Gain on sale of property, plant and equipment  (450) (5,051)
Equity in earnings of unconsolidated entities  (7,469) (5,227)
Distributions from unconsolidated entities  650
Distributions in-kind from equity investments  7,524 3,990
Non-cash mark-to-market on derivatives  (3,592) 2,332
Other  66 59
Change in current assets and liabilities, excluding effects of acquisitions and dispositions:    
Accounts and other receivables  16,171 7,390
Product exchange receivables  1,372 (1,212)
Inventories  (15,766) 2,055
Due from affiliates  (2,217) 1,707
Other current assets  (950) 1,161
Trade and other accounts payable  (5,633) (25,566)
Product exchange payables  4,165 8,162
Due to affiliates  467 2,287
Income taxes payable  109 1,753
 Other accrued liabilities  9,625 (523)
Change in other non-current assets and liabilities  (3,865) (2,265)
Net cash provided by operating activities  42,488 42,226
Cash flows from investing activities:    
Payments for property, plant and equipment  (12,616) (33,698)
Acquisitions  (7,331)
Payments for plant turnaround costs  (1,090)
Proceeds from sale of property, plant and equipment  1,944 21,713
Investment in unconsolidated entities  (20,110)
Return of investments from unconsolidated entities  2,430 660
Distributions from (contributions to) unconsolidated entities for operations  628 (833)
Net cash used in investing activities  (36,145) (12,158)
Cash flows from financing activities:    
Payments of long-term debt and capital lease obligations  (383,360) (84,953)
Proceeds from long-term debt  392,269 88,500
Net proceeds from follow on offering  78,600
Redemption of common units  (28,070)
 General partner contribution  1,089
 Distributions to parent  (4,369)
Payments of debt issuance costs  (7,425)
Purchase of treasury units  (108) (77)
Cash distributions paid  (42,185) (35,597)
Net cash provided by (used in) financing activities  6,441 (32,127)
Net increase in cash  12,784 (2,059)
Cash at beginning of period  5,956 7,983
Cash at end of period  $18,740 $5,924
     
These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in MMLP's Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 3, 2010.
     
1 Financial information for 2009 has been revised to include balances attributable to the Cross assets acquired in November 2009.
MARTIN MIDSTREAM PARTNERS L.P.
DISTRIBUTABLE CASH FLOW
Unaudited Non-GAAP Financial Measure
(Dollars in thousands)
  Three months  Nine months
  Ended  Ended
  September 30, September 30,
  2010 2010
     
Net income  $4,636 $9,482
     
Adjustments to reconcile net income to distributable cash flow:    
Depreciation and amortization  10,175 30,066
(Gain) loss on sale of property, plant and equipment  (405) (450)
Amortization of debt discount  88 181
Amortization of deferred debt issuance costs  1,013 3,676
Deferred taxes  (185) (474)
Early extinguishments of interest rate swaps  3,850
Distribution equivalents from unconsolidated entities 1 4,683 9,954
Invested cash in unconsolidated entities 2 711 2,623
Equity in earnings of unconsolidated entities  (2,951) (7,469)
Non-cash mark-to-market on derivatives  (942) (3,592)
Payments for plant turnaround costs  (28) (1,090)
Maintenance capital expenditures  (626) (2,941)
Unit-based compensation  28 66
 Distributable cash flow  16,196 43,881
1 Distribution equivalents from unconsolidated entities:    
Distributions from unconsolidated entities  $ — $ —
 Return of investments from unconsolidated entities  1,690 2,430
 Distributions in-kind from equity investments  2,993 7,524
 Distributions equivalents from unconsolidated entities  $4,683 $9,954
     
     
 2 Invested cash in unconsolidated entities:     
 Distributions from (contributions to) unconsolidated entities for operations  ($253) $629
Expansion capital expenditures in unconsolidated entities  964 1,994
Invested cash in unconsolidated entities  $711 $2,623
CONTACT:  Martin Midstream Partners L.P.
          Joe McCreery, Vice President - Finance and Head of 
           Investor Relations
          (903) 812-7989
          joe.mccreery@martinmlp.com

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