Martin Midstream Partners Reports 2013 Third Quarter Financial Results

KILGORE, Texas, Oct. 30, 2013 (GLOBE NEWSWIRE) -- Martin Midstream Partners L.P. (Nasdaq:MMLP) (the "Partnership") announced today its financial results for the third quarter ended September 30, 2013.

The Partnership's adjusted EBITDA for the third quarter of 2013 was $26.8 million. This compared to adjusted EBITDA for the third quarter of 2012 of $27.7 million. The Partnership's adjusted EBITDA for the nine months ended September 30, 2013 was $99.4 million. This compared to adjusted EBITDA for the nine months ended September 30, 2012 of $89.3 million. 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 comparable GAAP measurement.

The Partnership's distributable cash flow for the third quarter of 2013 was $13.3 million. This compared to distributable cash flow for the third quarter of 2012 of $19.6 million. The Partnership's distributable cash flow for the nine months ended September 30, 2013 was $62.8 million. This compared to distributable cash flow for the nine months ended September 30, 2012 of $59.7 million. Distributable cash flow is a non-GAAP financial measure which is explained in greater detail below under "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 this non-GAAP financial measure and its reconciliation to the most comparable GAAP measurement.

The Partnership reported net income for the third quarter of 2013 of $0.2 million, or $0.01 per limited partner unit. This compared to net income for the third quarter of 2012 of $72.2 million, or $3.07 per limited partner unit. The Partnership reported net income for the nine months ended September 30, 2013 of $25.9 million, or $0.95 per limited partner unit. This compared to net income for the nine months ended September 30, 2012 of $94.7 million, or $3.73 per limited partner unit. Revenues for the third quarter of 2013 were $359.6 million compared to $354.1 million for the third quarter of 2012.

The Partnership reported income from continuing operations for the third quarter of 2013 of $0.2 million, or $0.01 per limited partner unit. This compared to income from continuing operations for the third quarter of 2012 of $8.6 million, or $0.44 per limited partner unit. The Partnership reported no income from discontinued operations for the third quarter of 2013. This compared to income from discontinued operations for the third quarter of 2012 of $63.6 million, or $2.63 per limited partner unit.

The Partnership reported income from continuing operations for the nine months ended September 30, 2013 of $25.9 million, or $0.95 per limited partner unit. This compared to the income from continuing operations for the nine months ended September 30, 2012 of $27.4 million, or $0.94 per limited partner unit. The Partnership reported no income from discontinued operations for the nine months ended September 30, 2013. This compared to income from discontinued operations for the nine months ended September 30, 2012 of $67.3 million, or $2.79 per limited partner unit. Revenues for the nine months ended September 30, 2013 were $1,151.5 million compared to $1,036.3 million for the nine months ended September 30, 2012.

Included with this press release are the Partnership's consolidated financial statements as of and for the three and nine months ended September 30, 2013 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 November 4, 2013.

Ruben Martin, President and Chief Executive Officer of Martin Midstream GP LLC, the general partner of Martin Midstream Partners, said, "For the third quarter our distribution coverage ratio was below expectations as we experienced more than our normal seasonal weakness during the period. However, on a trailing twelve month basis our coverage ratio was 1.02 times.

"Looking across our segments, we increased our cash flow in the third quarter in three of our four business segments, but we experienced more than our normal seasonal downturn in our Sulfur Services segment, primarily in our fertilizer business. Our performance trailed our forecast due to weaker seasonal demand as pricing for several of our key fertilizer products fell sharply. This was a result of much weaker agricultural product prices and a later than normal harvest. Looking ahead, we expect these softer market conditions to continue in the near term until spring fertilizer application commences next year.

"Our third-quarter seasonality is also more apparent now than in years past due to the inclusion of the butane business as part of our Natural Gas Services segment. Now that the refinery's butane blending season has begun, our fourth quarter cash flow and first quarter 2014 will improve significantly reflective of the normal sales cycle in this business. In addition, we expect to realize balance sheet improvements due to falling butane-related working capital requirements beginning in the fourth quarter.

"Our Marine Transportation segment showed modestly improved results versus the second quarter as we experienced increased utilization from our inland fleet. Several vessels came out of dry dock from earlier in the year and are back on day rate. Our offshore fleet remains near full utilization. The outlook is favorable as we have achieved recent success re-contracting offshore marine assets with improved terms and day rates.

"In our Terminalling and Storage segment, we are pleased to announce that our new dock at the Partnership's Corpus Christi Crude Terminal (CCCT) will be completed in November. This newly constructed asset will allow our customer significantly improved loading access resulting in higher through-put across the terminal. We expect a significant increase in barrels through CCCT when construction of the new dock is complete. In addition, the construction of our final three tanks comprising 300,000 barrels of storage remains on schedule for completion in the second quarter of 2014. Upon completion of the additional storage, we expect a subsequent increase in barrels through CCCT from our customer.

"Lastly, during the quarter, the parent of our general partner closed its transaction with Alinda Capital Partners, effectively selling a 49% voting and 50% economic interest in our general partner. While the Alinda partnership is brand new, an immediate positive impact and favorable market reaction is evident. Further, we have gained access to multiple acquisition opportunities that previously would have been unattainable for the Partnership on a stand-alone basis. I am confident that Alinda will assist in the Partnership's continued growth."

Investors' Conference Call

An investors' conference call to review the third quarter results will be held on Thursday, October 31, 2013, 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 October 31, 2013 through 10:59 p.m. Central Time on November 6, 2013. The access code for the conference call and the audio replay is Conference ID No. 90801714. The audio replay of the conference call will also be archived on Martin Midstream Partners' website at www.martinmidstream.com .

Quarterly Cash Distribution

The quarterly cash distribution of $0.7825 per common units which was announced on October 24, 2013 is payable on November 14, 2013 to common unitholders of record as of the close of business on November 7, 2013. The ex-dividend date for the cash distribution is November 5, 2013. This distribution reflects an annualized distribution rate of $3.13 per unit.

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: terminalling and storage services for petroleum products and by-products including the refining, blending and packaging of finished products; natural gas services, including liquids distribution services and natural gas storage; sulfur and sulfur-based products processing, manufacturing, marketing and distribution; and marine transportation services for petroleum products and by-products. The Partnership is based in Kilgore, Texas and was founded in 2002.

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 its control, which could cause actual results to differ materially from such statements. While the Partnership believes that the assumptions concerning future events are reasonable, it cautions that there are inherent difficulties in anticipating or predicting certain important factors. A discussion of these factors, including risks and uncertainties, is set forth in the Partnership's annual and quarterly reports filed from time to time with the Securities and Exchange Commission. The Partnership disclaims any intention or obligation to revise any forward-looking statements, including financial estimates, whether as a result of new information, future events, or otherwise.

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 historic 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 unit holders.

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

     
MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED BALANCE SHEETS
(Dollars in thousands)
     
  September 30, 2013 December 31, 2012
  (Unaudited) (Audited)
Assets
Cash $ 45 $ 5,162
Accounts and other receivables, less allowance for doubtful accounts of $2,864 and $2,805, respectively 147,609 190,652
Product exchange receivables 3,635 3,416
Inventories 106,783 95,987
Due from affiliates 18,531 13,343
Other current assets 9,141 2,777
Assets held for sale 750 3,578
Total current assets 286,494 314,915
     
Property, plant and equipment, at cost 900,175 767,344
Accumulated depreciation (291,638) (256,963)
Property, plant and equipment, net 608,537 510,381
     
Goodwill 19,616 19,616
Investment in unconsolidated entities 181,586 154,309
Debt issuance costs, net 16,469 10,244
Other assets, net 7,500 3,531
  $ 1,120,202 $ 1,012,996
     
Liabilities and Partners' Capital
Current installments of long-term debt and capital lease obligations $ 3,173 $ 3,206
Trade and other accounts payable 110,617 140,045
Product exchange payables 13,123 12,187
Due to affiliates 2,791 3,316
Income taxes payable 1,121 10,239
Other accrued liabilities 18,331 9,489
Total current liabilities 149,156 178,482
     
Long-term debt and capital lease obligations, less current installments 648,004 474,992
Other long-term obligations 2,236 1,560
Total liabilities 799,396 655,034
     
Partners' capital 320,806 357,962
Commitments and contingencies    
  $ 1,120,202 $ 1,012,996
     
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 November 4, 2013.
     
         
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,
  2013 2012 1 2013 2012 1
Revenues:        
Terminalling and storage * $ 28,956 $ 23,875 $ 85,267 $ 65,107
Marine transportation * 24,217 22,102 74,694 63,678
Sulfur services 3,001 2,926 9,003 8,777
Product sales: *        
Natural gas services 204,296 190,738 650,605 527,666
Sulfur services 39,096 57,670 164,375 193,464
Terminalling and storage 60,050 56,779 167,546 177,570
  303,442 305,187 982,526 898,700
Total revenues 359,616 354,090 1,151,490 1,036,262
         
Costs and expenses:        
Cost of products sold: (excluding depreciation and amortization)        
Natural gas services * 196,308 185,686 626,609 515,928
Sulfur services * 33,994 47,272 131,577 149,582
Terminalling and storage * 52,718 52,161 146,806 160,271
  283,020 285,119 904,992 825,781
Expenses:        
Operating expenses * 43,444 36,654 129,839 108,108
Selling, general and administrative * 7,211 5,774 20,624 17,184
Depreciation and amortization 13,698 10,292 37,944 30,315
Total costs and expenses 347,373 337,839 1,093,399 981,388
         
Other operating income (5) 796 368
Operating income 12,243 16,246 58,887 55,242
         
Other income (expense):        
Equity in earnings (loss) of unconsolidated entities (577) (775) (878) 256
Interest expense (11,060) (6,789) (31,058) (23,284)
Debt prepayment premium (2,470)
Other, net (111) 505 (134) 1,054
Total other expense (11,748) (7,059) (32,070) (24,444)
         
Net income before taxes 495 9,187 26,817 30,798
Income tax expense (303) (541) (910) (3,366)
Income from continuing operations 192 8,646 25,907 27,432
Income from discontinued operations, net of income taxes 63,603 67,312
Net income 192 72,249 25,907 94,744
Less general partner's interest in net income (4) (1,448) (518) (4,603)
Less pre-acquisition income allocated to Parent 152 (4,622)
Less income allocable to unvested restricted units (1) (67)
Limited partners' interest in net income $ 187 $ 70,953 $ 25,322 $ 85,519
         
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 November 4, 2013.
         
1 Financial information for 2012 has been revised to include results attributable to the Redbird Class A interests and the Blending and Packaging Assets acquired from Cross prior to October 2, 2012. 
*Related Party Transactions Shown Below
         
         
MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except per unit amounts)
         
*Related Party Transactions Included Above
         
  Three Months Ended Nine Months Ended
  September 30, September 30,
  2013 2012 1 2013 2012 1
Revenues:        
Terminalling and storage $ 18,044 $ 18,531 $ 52,857 $ 48,611
Marine transportation 5,943 3,979 18,828 13,282
Product Sales 964 1,637 4,012 5,784
Costs and expenses:        
Cost of products sold: (excluding depreciation and amortization)      
Natural gas services 7,799 6,761 23,391 18,783
Sulfur services 4,539 4,111 13,514 12,512
Terminalling and storage 13,488 13,165 39,638 36,509
Expenses:        
Operating expenses 17,902 14,100 53,410 42,308
Selling, general and administrative 4,356 2,764 12,944 8,258
         
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 November 4, 2013.
         
1 Financial information for 2012 has been revised to include results attributable to the Redbird Class A interests and the Blending and Packaging Assets acquired from Cross prior to October 2, 2012. 
         
         
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,
  2013 2012 1 2013 2012 1
Allocation of net income attributable to:        
Limited partner interest:        
Continuing operations $ 187 $ 10,128 $ 25,322 $ 21,645
Discontinued operations 60,825 63,874
  $ 187 $ 70,953 $ 25,322 $ 85,519
General partner interest:        
Continuing operations $ 4 $ (1,330) $ 518 $ 1,165
Discontinued operations 2,778 3,438
  $ 4 $ 1,448 $ 518 $ 4,603
         
Net income per unit attributable to limited partners:        
Basic:        
Continuing operations $ 0.01 $ 0.44 $ 0.95 $ 0.94
Discontinued operations 2.63 2.79
  $ 0.01 $ 3.07 $ 0.95 $ 3.73
Weighted average limited partner units - basic 26,552 23,101 26,561 22,929
Diluted:        
Continuing operations $ 0.01 $ 0.44 $ 0.95 $ 0.94
Discontinued operations 2.63 2.79
  $ 0.01 $ 3.07 $ 0.95 $ 3.73
Weighted average limited partner units - diluted 26,579 23,105 26,581 22,932
         
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 November 4, 2013.
         
1 Financial information for 2012 has been revised to include results attributable to the Redbird Class A interests and the Blending and Packaging Assets acquired from Cross prior to October 2, 2012. 
         
         
MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
(Dollars in thousands)
         
  Three Months Ended Nine Months Ended
  September 30, September 30,
  2013 2012 1 2013 2012 1
Net income $ 192 $ 72,249 $ 25,907 $ 94,744
Other comprehensive income adjustments:        
Changes in fair values of commodity cash flow hedges 126
Commodity cash flow hedging losses reclassified to earnings (63) (752)
Other comprehensive income (63) (626)
Comprehensive income $ 192 $ 72,186 $ 25,907 $ 94,118
         
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 November 4, 2013.
         
1 Financial information for 2012 has been revised to include results attributable to the Redbird Class A interests and the Blending and Packaging Assets acquired from Cross prior to October 2, 2012.
         
             
MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED STATEMENTS OF CAPITAL
(Unaudited)
(Dollars in thousands)
             
  Partners' Capital  
    Common Limited General Partner Accumulated Other Comprehensive Income  
  Parent Net Investment 1 Units Amount Amount (Loss) Total
Balances - January 1, 2012 $ 51,571 $ 20,471,776 $ 279,562 $ 5,428 $ 626 $ 337,187
             
Net income 4,622 85,519 4,603 94,744
             
Follow-on public offering 2,645,000 91,361 91,361
             
General partner contribution 1,951 1,951
             
Cash distributions (52,880) (5,452 (58,332)
             
Unit-based compensation 6,250 379 379
             
Purchase of treasury units   (6,250) (221 (221)
             
Adjustment in fair value of derivatives (626) (626)
             
Balances - September 30, 2012 $ 56,193 23,116,776 $ 403,720 $ 6,530 $ — $ 466,443
             
Balances - January 1, 2013 $ — 26,566,776 $ 349,490 $ 8,472 $ — $ 357,962
             
Net income 25,389 518 25,907
             
Issuance of restricted units 63,750
             
Forfeiture of restricted units (250)
             
General partner contribution 37 37
             
Cash distributions (61,902) (1,384) (63,286)
             
Unit-based compensation 737 737
             
Excess purchase price over carrying value of acquired assets (301) (301)
             
Purchase of treasury units (6,000) (250) (250)
             
Balances - September 30, 2013 $ — 26,624,276 $ 313,163 $ 7,643 $ — $ 320,806
             
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 November 4, 2013.
             
1 Financial information for 2012 has been revised to include results attributable to the Redbird Class A interests and the Blending and Packaging Assets acquired from Cross prior to October 2, 2012. 
             
     
MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
     
  Nine Months Ended
  September 30,
  2013 2012 1
Cash flows from operating activities:    
Net income $ 25,907 $ 94,744
Less: Income from discontinued operations (67,312)
Net income from continuing operations 25,907 27,432
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 37,944 30,315
Amortization of deferred debt issuance costs 2,890 2,611
Amortization of debt discount 230 504
Deferred taxes 402
(Gain) loss on sale of property, plant and equipment (796) 7
Gain on sale of equity method investment (486)
Equity in (earnings) loss of unconsolidated entities 878 (256)
Unit-based compensation 737 379
Preferred dividends on MET investment 1,171
Other 7
Change in current assets and liabilities, excluding effects of acquisitions and dispositions:
Accounts and other receivables 43,043 (10,352)
Product exchange receivables (219) 12,190
Inventories (8,362) (41,736)
Due from affiliates (5,188) (27,795)
Other current assets (6,358) 1,996
Trade and other accounts payable (29,641) (16,808)
Product exchange payables 936 (9,405)
Due to affiliates (525) 21,040
Income taxes payable (440) 154
Other accrued liabilities 8,842 1,353
Change in other non-current assets and liabilities (210) (1,126)
Net cash provided by (used in) continuing operating activities 70,846 (9,581)
Net cash provided by (used in) discontinued operating activities (8,678) 120
Net cash provided by (used in) operating activities 62,168 (9,461)
Cash flows from investing activities:    
Payments for property, plant and equipment (68,591 (71,550)
Acquisitions (73,921)
Payments for plant turnaround costs (2,578)
Proceeds from sale of property, plant and equipment 4,719 33
Proceeds from sale of equity method investment 531
Investment in unconsolidated subsidiaries (775)
Milestone distributions from ECP 2,208
Return of investments from unconsolidated entities 1,551 5,133
Contributions to unconsolidated entities (30,877) (22,786)
Net cash used in continuing investing activities (167,119) (89,784)
Net cash provided by discontinued investing activities 271,181
Net cash provided by (used in) investing activities (167,119) 181,397
Cash flows from financing activities:    
Payments of long-term debt (518,000) (547,000)
Payments of notes payable and capital lease obligations (251) (6,522)
Proceeds from long-term debt 691,000 349,000
Net proceeds from follow on offering 91,361
General partner contribution 37 1,951
Purchase of treasury units (250) (221)
Decrease in affiliate funding of investments in unconsolidated entities (2,208)
Payment of debt issuance costs (9,115) (204)
Excess purchase price over carrying value of acquired assets (301)
Cash distributions paid (63,286) (58,332)
Net cash provided by (used in) financing activities 99,834 (172,175)
Net decrease in cash (5,117) (239)
Cash at beginning of period 5,162 266
Cash at end of period $ 45 $ 27
     
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 filed with the Securities and Exchange Commission on November 4, 2013.
1 Financial information for 2012 has been revised to include results attributable to the Redbird Class A interests and the Blending and Packaging Assets acquired from Cross prior to October 2, 2012 .
     
         
MARTIN MIDSTREAM PARTNERS L.P.
SEGMENT OPERATING INCOME
(Unaudited) 
(Dollars and volumes in thousands, except BBL per day)
         
Terminalling and Storage Segment
         
Comparative Results of Operations for the Three Months Ended September 30, 2013 and 2012 
         
  Three Months Ended September 30,    
  2013 2012 Variance Percent Change
  (In thousands, except BBL per day)  
Revenues:        
Services $ 30,151 $ 25,066 $ 5,085 20%
Products 60,054 56,779 3,275 6%
Total revenues 90,205 81,845 8,360 10%
         
Cost of products sold 53,215 52,697 518 1%
Operating expenses 19,427 14,372 5,055 35%
Selling, general and administrative expenses 979 1,434 (455) (32)%
Depreciation and amortization 8,532 5,829 2,703 46%
  8,052 7,513 539 7%
Other operating income  
Operating income $ 8,052 $ 7,513 $ 539 7%
         
Lubricant sales volumes (gallons) 10,638 9,475 1,163 12%
Shore-based throughput volumes (gallons) 65,516 54,728 10,788 20%
Smackover refinery throughput volumes (BBL per day) 6,878 7,404 (526) (7)%
Corpus Christi crude terminal (BBL per day) 101,921 49,400 52,521 106%
         
         
Comparative Results of Operations for the Nine Months Ended September 30, 2013 and 2012
         
  Nine Months Ended September 30,    
  2013 2012 Variance Percent Change
  (In thousands, except BBL per day)  
Revenues:        
Services $ 88,770 $ 68,649 $ 20,121 29%
Products 167,550 177,570 (10,020) (6)%
Total revenues 256,320 246,219 10,101 4%
         
Cost of products sold 148,624 161,850 (13,226) (8)%
Operating expenses 54,860 42,339 12,521 30%
Selling, general and administrative expenses 2,422 3,898 (1,476) (38)%
Depreciation and amortization 22,925 16,028 6,897 43%
  27,489 22,104 5,385 24%
Other operating income 168 395 (227) (57)%
Operating income $ 27,657 $ 22,499 $ 5,158 23%
         
Lubricant sales volumes (gallons) 29,885 29,319 566 2%
Shore-based throughput volumes (gallons) 207,533 165,701 41,832 25%
Smackover refinery throughput volumes (BBL per day) 6,780 5,879 901 15%
Corpus Christi crude terminal (BBL per day) 105,759 40,122 65,637 164%
         
         
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 September 30, 2013 and 2012 
         
  Three Months Ended September 30,    
  2013 2012   Variance Percent Change 
  (In thousands)  
Revenues:        
Marine transportation $ 630 $ — $ 630  
Products 204,296 190,738 13,558 7%
Total revenues 204,926 190,738 14,188 7%
         
Cost of products sold 196,719 186,080 10,639 6%
Operating expenses 1,863 847 1,016 120%
Selling, general and administrative expenses 1,156 786 370 47%
Depreciation and amortization 598 149 449 301%
Operating income $ 4,590 $ 2,876 $ 1,714 60%
         
Distributions from unconsolidated entities $ 761 $ 836 $ (75) (9)%
         
NGL sales volumes (Bbls) 3,162 3,092 70 2%
         
         
Comparative Results of Operations for the Nine Months Ended September 30, 2013 and 2012  
         
  Nine Months Ended September 30,    
  2013 2012 Variance  Percent Change 
  (In thousands)  
Revenues:        
Marine transportation $ 2,475 $ — $ 2,475  
Products 650,605 527,666 122,939 23%
Total revenues 653,080 527,666 125,414 24%
         
Cost of products sold 627,748 517,083 110,665 21%
Operating expenses 3,834 2,603 1,231 47%
Selling, general and administrative expenses 2,800 2,242 558 25%
Depreciation and amortization 1,444 436 1,008 231%
Operating income $ 17,254 $ 5,302 $ 11,952 225%
         
Distributions from unconsolidated entities $ 2,722 $ 3,114 $ (392) (13)%
         
NGL sales volumes (Bbls) 9,883 7,825 2,058 26%
         
         
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 September 30, 2013 and 2012 
         
  Three Months Ended September 30,    
  2013 2012 Variance Percent Change
  (In thousands)  
Revenues:        
Services $ 3,001 $ 2,926 $ 75 3%
Products 39,096 57,670 (18,574) (32)%
Total revenues 42,097 60,596 (18,499) (31)%
         
Cost of products sold 34,085 47,362 (13,277) (28)%
Operating expenses 4,166 4,357 (191) (4)%
Selling, general and administrative expenses 1,069 1,008 61 6%
Depreciation and amortization 2,024 1,750 274 16%
  753 6,119 (5,366) (88)%
Other operating income (5) 5 (100)%
Operating income $ 753 $ 6,114 $ (5,361) (88)%
         
Sulfur (long tons) 211.8 200.8 11 5%
Fertilizer (long tons) 44.8 61.2 (16.4) (27)%
Total sulfur services volumes (long tons) 256.6 262 (5.4) (2)%
         
         
Comparative Results of Operations for the Nine Months Ended September 30, 2013 and 2012
         
  Nine Months Ended September 30,    
  2013 2012 Variance Percent Change
  (In thousands)  
Revenues:        
Services $ 9,003 $ 8,777 $ 226 3%
Products 164,375 193,464 (29,089) (15)%
Total revenues 173,378 202,241 (28,863) (14)%
         
Cost of products sold 131,849 149,853 (18,004) (12)%
Operating expenses 12,791 13,164 (373) (3)%
Selling, general and administrative expenses 3,132 2,945 187 6%
Depreciation and amortization 5,947 5,325 622 12%
  19,659 30,954 (11,295) (36)%
Other operating loss (27) 27 (100)%
Operating income $ 19,659 $ 30,927 $ (11,268) $ (36)%
         
Sulfur (long tons) 614.9 781.2 (166.3) (21)%
Fertilizer (long tons) 219.8 238.7 (18.9) (8)%
Total sulfur services volumes (long tons) 834.7 1,019.90 (185.2) (18)%
         
         
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 September 30, 2013 and 2012 
         
  Three Months Ended September 30,    
  2013 2012 Variance Percent Change
  (In thousands)  
Revenues $ 24,751 $ 22,879 $ 1,872 8%
Operating expenses 19,352 18,026 1,326 7%
Selling, general and administrative expenses 228 580 (352) (61)%
Depreciation and amortization 2,544 2,564 (20) (1)%
Operating income $ 2,627 $ 1,709 $ 918 54%
         
         
Comparative Results of Operations for the Nine Months Ended September 30, 2013 and 2012 
         
  Nine Months Ended September 30,    
  2013 2012 Variance Percent Change
  (In thousands)  
Revenues $ 75,004 $ 65,912 $ 9,092 14%
Operating expenses 61,417 52,773 8,644 16%
Selling, general and administrative expenses 1,000 1,366 (366) (27)%
Depreciation and amortization 7,628 8,526 (898) (11)%
  4,959 3,247 1,712 53%
Other operating income 628 628  
Operating income $ 5,587 $ 3,247 $ 2,340 72%
         

Non-GAAP Financial Measures

The following table reconciles the non-GAAP financial measurements used by management to our most directly comparable GAAP measures for the three and nine months ended September 30, 2013 and 2012, which represents EBITDA, Adjusted EBITDA and Distributable Cash Flow from continuing operations.
         
Reconciliation of EBITDA, Adjusted EBITDA, and Distributable Cash Flow
         
  Three Months Ended Nine Months Ended
  September 30, September 30,
  2013 2012 2013 2012
         
Net income $ 192 $ 72,249 $ 25,907 $ 94,744
Less: Income from discontinued operations, net of income taxes (63,603) (67,312)
Income from continuing operations 192 8,646 25,907 27,432
Adjustments:        
Interest expense 11,060 6,789 31,058 23,284
Income tax expense 303 541 910 3,366
Depreciation and amortization 13,698 10,292 37,944 30,315
EBITDA 25,253 26,268 95,819 84,397
Adjustments:        
Equity in (earnings) loss of unconsolidated entities 577 775 878 (256)
(Gain) loss on sale of property, plant and equipment 4 (796) 7
(Gain) loss on equity method investment (486) (486)
Debt prepayment premium 2,470
Distributions from unconsolidated entities 761 836 2,722 3,114
Mont Belvieu indemnity escrow payment (375)
Unit-based compensation 258 261 737 379
Adjusted EBITDA 26,849 27,658 99,360 89,250
Adjustments:        
Interest expense (11,060) (6,789) (31,058) (23,284)
Income tax expense (303) (541) (910) (3,366)
Amortization of deferred debt issuance costs 815 680 2,890 2,611
Amortization of debt discount 77 77 230 504
Payments of installment notes payable and capital lease obligations (91) (81) (251) (256)
Deferred income taxes 135 402
Payments for plant turnaround costs (175) (2,578)
Maintenance capital expenditures (2,973) (1,325) (7,473) (3,603)
Distributable Cash Flow $ 13,314 $ 19,639 $ 62,788 $ 59,680
         
CONTACT: Robert D. Bondurant,          Executive Vice President          and Chief Financial Officer of Martin         Midstream GP LLC, the Partnership's general          partner at (903) 983-6200

Martin Midstream Partners L.P. logo

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