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Martin Midstream Partners Reports 2016 First Quarter Financial Results

  • Maintained leverage profile in challenging environments
  • Maintained quarterly distribution of $0.8125
  • New $664 million amended and extended revolving credit facility due March 2020

Martin Midstream Partners L.P. MMLP, +3.74% (the "Partnership") announced today its financial results for the quarter ended March 31, 2016.

Ruben Martin, President and Chief Executive Officer of Martin Midstream GP LLC, the general partner of MMLP, said, "In this challenging environment the portfolio effect of our diverse model provided cumulatively solid first quarter 2016 results. The Partnership finished the quarter with a 0.98 times distribution coverage ratio, inclusive of paying all incentive distribution rights to our general partner. Our adjusted EBITDA was $49.3 million, and our distributable cash flow was $32.5 million. Our maintenance capital expenditures were $7.0 million, approximately 40% of forecasted maintenance capital costs for 2016. This heavy maintenance capital quarter was primarily the result of our refinery turnaround and the dry-docking of our offshore sulfur tow.

"Across our businesses, within the Natural Gas Services segment, our Cardinal Gas Storage division exceeded forecast based on higher than expected interruptible services revenue during the quarter. Our Terminalling and Storage segment performed better than anticipated due to high utilization and strong throughput at our legacy specialty terminals combined with lower operating costs. On the pure sulfur side of our Sulfur Services business, we also exceeded forecast based on reduced costs. Likewise, our fertilizer business performed well late in the quarter and we expect continued strength as some fertilizer application has been delayed into the second quarter of the year.

"While we are facing challenges in several areas, including throughput reductions at our Corpus Christi Crude Terminal, a weaker than anticipated inland marine market and reduced cash flow from our West Texas LPG joint venture, we will again rely on our diverse cash flow model and expect that continued high levels of refinery utilization will serve the Partnership well for the remainder of 2016.

"Additionally, today we closed a two-year extension to the Partnership's revolving credit facility with our lending syndicate. We were pleased to achieve this extension in the face of a difficult energy lending environment. The Partnership's credit facility will now mature in March 2020."

The Partnership's distributable cash flow from continuing operations for the first quarter of 2016 was $32.5 million compared to distributable cash flow from continuing operations for the first quarter of 2015 of $37.1 million, a decrease of 12%.

The Partnership's adjusted EBITDA from continuing operations for the first quarter of 2016 was $49.3 million compared to adjusted EBITDA from continuing operations for the first quarter of 2015 of $50.4 million, a decrease of 2%. Net income for the first quarter of 2016 was $15.9 million, or $0.33 per limited partner unit. Net income for the first quarter of 2015 was $17.2 million, or $0.37 per limited partner unit.

Revenues for the first quarter of 2016 were $225.6 million compared to $305.4 million for the first quarter of 2015. 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.

Distributable cash flow and EBITDA from discontinued operations were negative $0.2 million for the first quarter of 2015. Discontinued operations for the first quarter 2015 were $1.2 million, or $0.03 per limited partner unit.

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 months ended March 31, 2016 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 April 28, 2016.

Quarterly Cash Distribution

The quarterly cash distribution of $0.8125 per common unit, which was announced on April 21, 2016, is payable on May 13, 2016 to common unitholders of record as of the close of business on May 6, 2016. The ex-dividend date for the cash distribution is May 4, 2016. This distribution reflects an annualized distribution rate of $3.25 per unit.

Investors' Conference Call

An investors' conference call to review the first quarter results will be held on Thursday, April 28, 2016, at 8:00 a.m. Central Time. The conference call can be accessed by calling (877) 878-2695. Additionally, an accompanying slide and live webcast will be available by visiting Martin Midstream Partners' website at www.martinmidstream.com. An audio replay of the conference call will be available by calling (855) 859-2056 from 11:00 a.m. Central Time on April 28, 2016 through 10:59 p.m. Central Time on May 9, 2016. The access code for the conference call and the audio replay is Conference ID No. 88395885. The audio replay will also be archived under the Events and Presentations section of the Partnership's website.

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...


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