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TransMontaigne Partners L.P. Announces Financial Results For The Quarter Ended June 30, 2012

TransMontaigne Partners L.P. (NYSE:TLP) today announced its financial results for the quarter ended June 30, 2012.

FINANCIAL RESULTS

An overview of the financial performance for the quarter ended June 30, 2012, as compared to the quarter ended June 30, 2011, includes:

  • Distributable cash flow generated during the quarter ended June 30, 2012 was $16.5 million compared to $11.0 million for the quarter ended June 30, 2011.
  • The distribution declared per limited partner unit was $0.64 per unit for the quarter ended June 30, 2012, as compared to $0.62 per unit for the quarter ended June 30, 2011.
  • Operating income for the quarter ended June 30, 2012 was $12.5 million compared to $17.7 million for the quarter ended June 30, 2011, principally due to the following:
    • A one-time gain for the prior year quarter ended June 30, 2011 of approximately $9.6 million from the contribution of the Brownsville light petroleum product storage business to the Frontera joint venture, in exchange for a cash payment of approximately $25.6 million and a 50% ownership interest.
    • A decrease in direct general and administrative expenses of approximately $1.6 million for the quarter ended June 30, 2012, which is primarily the result of a settlement with our predecessor auditor, KPMG LLP, for reimbursement of audit and legal expenses that resulted from a change in our independent auditor and re-audits of prior periods, as previously disclosed.
    • Revenue was $38.4 million compared to $36.8 million due to increases in revenue at the Gulf Coast, Midwest, River and Southeast terminals of approximately $0.3 million, $0.3 million, $0.7 million and $0.5 million, respectively, offset by a decrease in revenue at the Brownsville terminals of approximately $0.2 million.
    • Direct operating costs and expenses were $16.2 million compared to $17.6 million due to decreases in direct operating costs and expenses at the Gulf Coast, Brownsville and Southeast terminals of approximately $0.5 million, $0.7 million and $0.6 million, respectively, offset by an increase in direct operating costs and expenses at the River terminals of approximately $0.3 million. The direct operating costs and expenses for the Midwest terminals was consistent period over period.
    • An increase in depreciation and amortization expense of approximately $0.2 million.
  • Quarterly net earnings decreased to $11.7 million from $17.0 million and net earnings per limited partner unit - basic decreased to $0.71 per unit from $1.10 per unit due principally to the one-time gain recorded in the prior year as discussed above.

Our terminaling services agreements are structured as either throughput agreements or storage agreements. Most of our throughput agreements contain provisions that require our customers to throughput a minimum volume of product at our facilities over a stipulated period of time, which results in a fixed amount of revenue to be recognized by us. Our storage agreements require our customers to make minimum payments based on the volume of storage capacity made available to the customer under the agreement, which results in a fixed amount of revenue to be recognized by us. We refer to the fixed amount of revenue recognized pursuant to our terminaling services agreements as being “firm commitments.” Revenue recognized in excess of firm commitments and revenue recognized based solely on the volume of product distributed or injected are referred to as “variable.” Our revenue was as follows (in thousands):

  Three months ended June 30,   Six months ended June 30,
2012   2011 2012   2011
Firm Commitments:
Terminaling services fees, net:
External customers $ 7,999 $ 7,578 $ 15,804 $ 16,932
Affiliates   20,681       20,072       41,443       39,865  
Total firm commitments   28,680       27,650       57,247       56,797  
Variable:
Terminaling services fees, net:
External customers 695 447 1,423 1,541
Affiliates   (53 )     (73 )     (60 )     (56 )
Total 642 374 1,363 1,485
Pipeline transportation fees 1,199 1,213 2,726 2,173
Management fees and reimbursed costs 1,288 1,112 2,743 1,583
Other   6,633     6,483     13,196     13,930  
Total variable   9,762     9,182     20,028     19,171  
Total revenue $ 38,442   $ 36,832   $ 77,275   $ 75,968  
 

The amount of revenue recognized as “firm commitments” based on the remaining contractual terms of the terminaling services agreements that generated “firm commitments” for the six months ended June 30, 2012 was as follows (in thousands):

  At June 30, 2012
Remaining terms on terminaling services agreements that generated “firm commitments”:
Less than 1 year remaining $ 8,002
1 year or more, but less than 3 years remaining 40,827
3 years or more, but less than 5 years remaining 6,088
5 years or more remaining   2,330
Total firm commitments for the six months ended June 30, 2012 $ 57,247
 

RECENT DEVELOPMENTS

On July 10, 2012 we received approximately $2.2 million from our predecessor auditor, KPMG LLP, as reimbursement of additional costs incurred by us due to the determination that they were not “independent” within the meaning of the rules of applicable regulatory agencies.

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