Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil Hydroworld Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries Martin Midstream Partners Reports Second Quarter 2022 Financial Results, Increases Annual Guidance and Declares Quarterly Cash Distribution By: Martin Midstream Partners L.P. via Business Wire July 20, 2022 at 16:01 PM EDT Announces increased 2022 financial guidance Reported net income of $6.6 million and $18.1 million for the three and six months ended June 30, 2022, respectively Reported adjusted EBITDA of $38.3 million and $78.3 million for the three and six months ended June 30, 2022, respectively Declares quarterly distribution of $0.005, or $0.02 per unit annually Martin Midstream Partners L.P. (Nasdaq:MMLP) ("MMLP" or the "Partnership") today announced its financial results for the second quarter of 2022. Bob Bondurant, President and Chief Executive Officer of Martin Midstream GP LLC, the general partner of the Partnership stated, “The Partnership experienced another outstanding quarter with elevated demand for our land transportation assets, and robust margins in our lubricants and fertilizer businesses. Overall, each of our four business segments performed above expectations beating the high range of guidance for the quarter by $13 million. We now expect the current refinery utilization levels to remain strong through year end which will bring continued solid demand for our diversified products and services. Based on this expectation, we are raising our 2022 adjusted EBITDA guidance range to $126 - $135 million. “The current operating environment for our business segments has provided the opportunity for consistent leverage reduction as year over year we have reduced outstanding debt and improved financial results. As a result, on June 30, 2022, the Partnership’s adjusted leverage ratio was 3.46 times compared to 3.87 times at March 31, 2022. While that is an important milestone, our current guidance indicates that the Partnership will exit 2022 with approximately the same adjusted leverage ratio announced today, as higher commodity prices continue to increase our working capital needs specifically within the natural gas liquids segment. Our focus will remain on conservative capital management to meet the goal of a sustained leverage ratio below 3.75 times.” SECOND QUARTER 2022 OPERATING RESULTS BY BUSINESS SEGMENT TERMINALLING AND STORAGE (“T&S”) T&S Operating Income for the three months ended June 30, 2022 and 2021 was $5.2 million and $3.7 million, respectively. Adjusted segment EBITDA for T&S was $12.9 million and $10.6 million, for the three months ended June 30, 2022 and 2021, respectively, reflecting continued strength in our lubricant and specialty products divisions. TRANSPORTATION Transportation Operating Income for the three months ended June 30, 2022 and 2021 was $11.3 million and $0.7 million, respectively. Adjusted segment EBITDA for Transportation was $14.6 million and $5.0 million for the three months ended June 30, 2022 and 2021, respectively, reflecting increased demand for land transportation services coupled with improving marine fleet utilization and higher day rates. SULFUR SERVICES Sulfur Services Operating Income for the three months ended June 30, 2022 and 2021 was $9.1 million and $6.3 million, respectively. Adjusted segment EBITDA for Sulfur Services was $13.9 million and $8.9 million for the three months ended June 30, 2022 and 2021, respectively, reflecting sustained demand for fertilizer products. NATURAL GAS LIQUIDS (“NGL”) NGL Operating Income for the three months ended June 30, 2022 and 2021 was $0.3 million and $0.7 million, respectively. Adjusted segment EBITDA for NGL was $1.3 million and $1.7 million for the three months ended June 30, 2022 and 2021, respectively, primarily reflecting a seasonal decrease in NGL sales volumes. UNALLOCATED SELLING, GENERAL AND ADMINISTRATIVE EXPENSE (“USGA”) USGA expenses included in operating income for the three months ended June 30, 2022 and 2021 were $4.4 million and $3.8 million, respectively. USGA expenses included in adjusted EBITDA for the three months ended June 30, 2022 and 2021 were $4.3 million and $3.7 million, respectively, primarily reflecting an increase in employee related expenses. CAPITALIZATION At June 30, 2022, the Partnership had $494 million of total debt outstanding, including $149 million drawn on its $275 million revolving credit facility, $54 million of senior secured 1.5 lien notes due 2024 and $291 million of senior secured second lien notes due 2025. At June 30, 2022, the Partnership had liquidity of approximately $87 million from available capacity under its revolving credit facility. The Partnership’s adjusted leverage ratio, as calculated under the revolving credit facility, was 3.46 times and 3.87 times on June 30, 2022 and March 31, 2022, respectively. The Partnership was in compliance with all debt covenants as of June 30, 2022. QUARTERLY CASH DISTRIBUTION The Partnership has declared a quarterly cash distribution of $0.005 per unit for the quarter ended June 30, 2022. The distribution is payable on August 12, 2022 to common unitholders of record as of the close of business on August 5, 2022. The ex-dividend date for the cash distribution is August 4, 2022. QUALIFIED NOTICE TO NOMINEES This release serves as qualified notice to nominees as provided for under Treasury Regulation Section 1.1446-4(b)(4) and (d). Please note that 100 percent of the Partnership's distributions to foreign investors are attributable to income that is effectively connected with a United States trade or business. Accordingly, all of the Partnership's distributions to foreign investors are subject to federal income tax withholding at the highest effective tax rate for individuals or corporations, as applicable. Nominees, and not the Partnership, are treated as withholding agents responsible for withholding on the distributions received by them on behalf of foreign investors. RESULTS OF OPERATIONS The Partnership had net income for the three months ended June 30, 2022 of $6.6 million, or $0.17 per limited partner unit. The Partnership had a net loss for the three months ended June 30, 2021 of $6.6 million, a loss of $0.17 per limited partner unit. Adjusted EBITDA for the three months ended June 30, 2022 was $38.3 million compared to $22.5 million for the three months ended June 30, 2021. Net cash provided by (used in) operating activities for the three months ended June 30, 2022 was ($2.5) million, compared to $2.2 million for the three months ended June 30, 2021. Distributable cash flow for the three months ended June 30, 2022 was $22.3 million compared to $7.3 million for the three months ended June 30, 2021. Revenues for the three months ended June 30, 2022 were $267.0 million compared to $184.3 million for the three months ended June 30, 2021. The Partnership had net income for the six months ended June 30, 2022 of $18.1 million, or $0.46 per limited partner unit. The Partnership had a net loss for the six months ended June 30, 2021 of $4.1 million, a loss of $0.10 per limited partner unit. Adjusted EBITDA for the six months ended June 30, 2022 was $78.3 million compared to $53.4 million for the six months ended June 30, 2021. Net cash provided by operating activities for the six months ended June 30, 2022 was $28.5 million, compared to $6.1 million for the six months ended June 30, 2021. Distributable cash flow for the six months ended June 30, 2022 was $38.5 million compared to $15.6 million for the six months ended June 30, 2021. Revenues for the six months ended June 30, 2022 were $546.2 million compared to $385.3 million for the six months ended June 30, 2021. EBITDA, adjusted EBITDA, distributable cash flow and adjusted free cash flow 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, Distributable Cash Flow and Adjusted Free Cash Flow" in order to show the components of these non-GAAP financial measures and their reconciliation to the most comparable GAAP measurement. An attachment included in the Current Report on Form 8-K to which this announcement is included, contains a comparison of the Partnership’s adjusted EBITDA for the second quarter 2022 to the Partnership's adjusted EBITDA for the second quarter 2021. 2022 REVISED FINANCIAL GUIDANCE The Partnership now expects to generate adjusted EBITDA between $126 million and $135 million for full-year 2022, compared to the previously revised adjusted EBITDA guidance of between $110 million and $120 million. This increased guidance reflects our expectation that current refinery utilization levels will remain consistent through year-end 2022 which will bring continued solid demand for our diversified products and services. Distributable cash flow is now expected to be between $53 million and $62 million for full-year 2022, compared to the revised distributable cash flow guidance of between $37 million and $47 million. Adjusted free cash flow is now expected to be between $44 million and $53 million, compared to the revised adjusted free cash flow guidance of between $29 million and $39 million. MMLP does not intend at this time to provide financial guidance beyond 2022. The Partnership has not provided comparable GAAP financial information on a forward-looking basis because it would require the Partnership to create estimated ranges on a GAAP basis, which would entail unreasonable effort as the adjustments required to reconcile forward-looking non-GAAP measures cannot be predicted with a reasonable degree of certainty but may include, among others, costs related to debt amendments and unusual charges, expenses and gains. Some or all of those adjustments could be significant. Investors' Conference Call Date: Thursday, July 21, 2022 Time: 8:00 a.m. CT (please dial in by 7:55 a.m.) Dial In #: (888) 330-2384 Conference ID: 8536096 Replay Dial In # (800) 770-2030 – Conference ID: 8536096 A webcast of the conference call along with the Second Quarter 2022 Earnings Summary and Revised Guidance Presentation will also be available by visiting the Events and Presentations section under Investor Relations on our website at www.MMLP.com. About Martin Midstream Partners MMLP, headquartered in Kilgore, Texas, is a publicly traded limited partnership with a diverse set of operations focused primarily in the Gulf Coast region of the United States. MMLP’s primary business lines include: (1) terminalling, processing, storage, and packaging services for petroleum products and by-products; (2) land and marine transportation services for petroleum products and by-products, chemicals, and specialty products; (3) sulfur and sulfur-based products processing, manufacturing, marketing and distribution; and (4) natural gas liquids marketing, distribution, and transportation services. To learn more, visit www.MMLP.com. Follow Martin Midstream Partners L.P. on LinkedIn and Facebook. 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, including (i) the current and potential impacts of the COVID-19 pandemic generally (including variants of the virus), on an industry-specific basis, and on the Partnership’s specific operations and business, (ii) the effects of the continued volatility of commodity prices and the related macroeconomic and political environment, and (iii) 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 “SEC”). 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 except where required to do so by law. Use of Non-GAAP Financial Information To assist the Partnership's management in assessing its business, it uses the following non-GAAP financial measures: earnings before interest, taxes, and depreciation and amortization ("EBITDA"), adjusted EBITDA (as defined below) distributable cash flow available to common unitholders (“distributable cash flow”), and free cash flow after growth capital expenditures and principal payments under finance lease obligations ("adjusted free cash flow"). 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. 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. EBITDA and Adjusted EBITDA. The Partnership defines adjusted EBITDA as EBITDA before unit-based compensation expenses, gains and losses on the disposition of property, plant and equipment, impairment and other similar non-cash adjustments. Adjusted EBITDA is used as a supplemental performance and liquidity measure by the Partnership's management and by external users of its financial statements, such as investors, commercial banks, research analysts, and others, to assess: the financial performance of the Partnership's assets without regard to financing methods, capital structure, or historical cost basis; the ability of the Partnership's assets to generate cash sufficient to pay interest costs, support its indebtedness, and make cash distributions to its unitholders; and its operating performance and return on capital as compared to those of other companies in the midstream energy sector, without regard to financing methods or capital structure. The GAAP measures most directly comparable to adjusted EBITDA are net income (loss) and net cash provided by (used in) operating activities. Adjusted EBITDA should not be considered an alternative to, or more meaningful than, net income (loss), operating income (loss), net cash provided by (used in) operating activities, or any other measure of financial performance presented in accordance with GAAP. Adjusted EBITDA may not be comparable to similarly titled measures of other companies because other companies may not calculate adjusted EBITDA in the same manner. Adjusted EBITDA does not include interest expense, income tax expense, and depreciation and amortization. Because the Partnership has borrowed money to finance its operations, interest expense is a necessary element of its costs and its ability to generate cash available for distribution. Because the Partnership has capital assets, depreciation and amortization are also necessary elements of its costs. Therefore, any measures that exclude these elements have material limitations. To compensate for these limitations, the Partnership believes that it is important to consider net income (loss) and net cash provided by (used in) operating activities as determined under GAAP, as well as adjusted EBITDA, to evaluate its overall performance. Distributable Cash Flow. The Partnership defines distributable cash flow as net cash provided by (used in) operating activities less cash received (plus cash paid) for closed commodity derivative positions included in accumulated other comprehensive income (loss), plus changes in operating assets and liabilities which (provided) used cash, less maintenance capital expenditures and plant turnaround costs. 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 us 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 its 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. Adjusted Free Cash Flow. The Partnership defines adjusted free cash flow as distributable cash flow less growth capital expenditures and principal payments under finance lease obligations. Adjusted free cash flow is a significant performance measure used by the Partnership's management and by external users of its financial statements and represents how much cash flow a business generates during a specified time period after accounting for all capital expenditures, including expenditures for growth and maintenance capital projects. The Partnership believes that adjusted free cash flow is important to investors, lenders, commercial banks and research analysts since it reflects the amount of cash available for reducing debt, investing in additional capital projects, paying distributions, and similar matters. The Partnership's calculation of adjusted free cash flow may or may not be comparable to similarly titled measures used by other entities. The GAAP measure most directly comparable to distributable cash flow and adjusted free cash flow is net cash provided by (used in) operating activities. Distributable cash flow and adjusted free cash flow should not be considered alternatives to, or more meaningful than, net income (loss), operating income (loss), net cash provided by (used in) operating activities, or any other measure of liquidity presented in accordance with GAAP. Distributable cash flow and adjusted free cash flow have important limitations because they exclude some items that affect net income (loss), operating income (loss), and net cash provided by (used in) operating activities. Distributable cash flow and adjusted free cash flow may not be comparable to similarly titled measures of other companies because other companies may not calculate these non-GAAP metrics in the same manner. To compensate for these limitations, the Partnership believes that it is important to consider net cash provided by (used in) operating activities determined under GAAP, as well as distributable cash flow and adjusted free cash flow, to evaluate its overall liquidity. MMLP-F MARTIN MIDSTREAM PARTNERS L.P. CONSOLIDATED AND CONDENSED BALANCE SHEETS (Dollars in thousands) June 30, 2022 December 31, 2021 (Unaudited) (Audited) Assets Cash $ 43 $ 52 Accounts and other receivables, less allowance for doubtful accounts of $559 and $311, respectively 73,485 84,199 Inventories 117,845 62,120 Due from affiliates 16,558 14,409 Other current assets 29,554 12,908 Total current assets 237,485 173,688 Property, plant and equipment, at cost 898,379 898,770 Accumulated depreciation (566,799 ) (553,300 ) Property, plant and equipment, net 331,580 345,470 Goodwill 16,823 16,823 Right-of-use assets 30,249 21,861 Deferred income taxes, net 17,517 19,821 Other assets, net 2,507 2,198 Total assets $ 636,161 $ 579,861 Liabilities and Partners’ Capital (Deficit) Current installments of long-term debt and finance lease obligations $ 169 $ 280 Trade and other accounts payable 105,156 70,342 Product exchange payables 537 1,406 Due to affiliates 9,764 1,824 Income taxes payable 753 385 Other accrued liabilities 31,513 29,850 Total current liabilities 147,892 104,087 Long-term debt, net 489,325 498,871 Finance lease obligations — 9 Operating lease liabilities 22,455 15,704 Other long-term obligations 7,343 9,227 Total liabilities 667,015 627,898 Commitments and contingencies Partners’ capital (deficit) (31,021 ) (48,853 ) Accumulated other comprehensive income (loss) 167 816 Total partners’ capital (deficit) (30,854 ) (48,037 ) Total liabilities and partners' capital (deficit) $ 636,161 $ 579,861 MARTIN MIDSTREAM PARTNERS L.P. CONSOLIDATED AND CONDENSED STATEMENTS OF OPERATIONS (Unaudited) (Dollars in thousands, except per unit amounts) Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 Revenues: Terminalling and storage * $ 20,439 $ 18,702 $ 39,852 $ 37,080 Transportation * 55,832 34,926 102,542 64,741 Sulfur services 3,084 2,949 6,168 5,899 Product sales: * Natural gas liquids 97,580 67,232 218,143 165,317 Sulfur services 53,869 35,337 109,908 67,222 Terminalling and storage 36,192 25,147 69,584 45,008 187,641 127,716 397,635 277,547 Total revenues 266,996 184,293 546,197 385,267 Costs and expenses: Cost of products sold: (excluding depreciation and amortization) Natural gas liquids * 91,584 61,590 198,682 140,725 Sulfur services * 37,063 24,177 74,848 45,391 Terminalling and storage * 28,279 20,226 54,978 34,728 156,926 105,993 328,508 220,844 Expenses: Operating expenses * 64,082 47,313 120,577 91,947 Selling, general and administrative * 9,944 8,960 21,147 19,569 Depreciation and amortization 14,800 14,483 29,286 28,917 Total costs and expenses 245,752 176,749 499,518 361,277 Other operating income (loss), net 246 89 260 (671 ) Operating income 21,490 7,633 46,939 23,319 Other income (expense): Interest expense, net (12,846 ) (13,309 ) (25,275 ) (26,262 ) Other, net (1 ) (1 ) (2 ) (1 ) Total other expense (12,847 ) (13,310 ) (25,277 ) (26,263 ) Net income before taxes 8,643 (5,677 ) 21,662 (2,944 ) Income tax expense (2,037 ) (935 ) (3,578 ) (1,157 ) Net income 6,606 (6,612 ) 18,084 (4,101 ) Less general partner's interest in net income (132 ) 132 (362 ) 82 Less income allocable to unvested restricted units (21 ) 20 (51 ) 10 Limited partners' interest in net income $ 6,453 $ (6,460 ) $ 17,671 $ (4,009 ) Net income per unit attributable to limited partners - basic $ 0.17 $ (0.17 ) $ 0.46 $ (0.10 ) Net income per unit attributable to limited partners - diluted $ 0.17 $ (0.17 ) $ 0.46 $ (0.10 ) Weighted average limited partner units - basic 38,729,118 38,687,874 38,725,701 38,690,228 Weighted average limited partner units - diluted 38,750,153 38,687,874 38,753,197 38,690,228 *Related Party Transactions Shown Below MARTIN MIDSTREAM PARTNERS L.P. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Dollars in thousands, except per unit amounts) *Related Party Transactions Included Above Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 Revenues:* Terminalling and storage $ 17,416 $ 15,569 $ 33,620 $ 30,875 Transportation 7,463 4,889 13,751 8,899 Product Sales 95 71 416 185 Costs and expenses:* Cost of products sold: (excluding depreciation and amortization) Sulfur services 2,592 2,403 5,268 4,938 Terminalling and storage 10,209 7,036 19,860 11,604 Expenses: Operating expenses 23,446 19,590 44,826 37,958 Selling, general and administrative 7,498 7,285 16,306 15,965 MARTIN MIDSTREAM PARTNERS L.P. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) (Dollars in thousands) Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 Net income $ 6,606 $ (6,612 ) $ 18,084 $ (4,101 ) Changes in fair values of commodity cash flow hedges 167 — 167 — Commodity cash flow hedging (gains) losses reclassified to earnings 440 — (816 ) — Comprehensive income $ 7,213 $ (6,612 ) $ 17,435 $ (4,101 ) MARTIN MIDSTREAM PARTNERS L.P. CONSOLIDATED AND CONDENSED STATEMENTS OF CAPITAL (DEFICIT) (Unaudited) (Dollars in thousands) Partners’ Capital (Deficit) Common Limited General Partner Amount Accumulated Other Comprehensive Income (Loss) Units Amount Total Balances - January 1, 2021 38,851,174 $ (48,776 ) $ 1,905 $ — $ (46,871 ) Net income — (4,019 ) (82 ) — (4,101 ) Issuance of restricted units 42,168 — — — — Forfeiture of restricted units (83,436 ) — — — — Cash distributions — (388 ) (8 ) — (396 ) Unit-based compensation — 288 — — 288 Purchase of treasury units (7,156 ) (17 ) — — (17 ) Balances - June 30, 2021 38,802,750 $ (52,912 ) $ 1,815 $ — $ (51,097 ) Balances - January 1, 2022 38,802,750 $ (50,741 ) $ 1,888 $ 816 $ (48,037 ) Net income — 17,722 362 — 18,084 Issuance of restricted units 48,000 — — — — Cash distributions — (388 ) (8 ) — (396 ) Unit-based compensation — 79 — — 79 Gain reclassified from AOCI into income on commodity cash flow hedges — — — (816 ) (816 ) Gain recognized in AOCI on commodity cash flow hedges — — — 167 167 Excess purchase price over carrying value of acquired assets — 65 — — 65 Balances - June 30, 2022 38,850,750 $ (33,263 ) $ 2,242 $ 167 $ (30,854 ) MARTIN MIDSTREAM PARTNERS L.P. CONSOLIDATED AND CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in thousands) Six Months Ended June 30, 2022 2021 Cash flows from operating activities: Net income (loss) $ 18,084 $ (4,101 ) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 29,286 28,917 Amortization of deferred debt issuance costs 1,568 1,521 Deferred income tax expense 2,304 758 (Gain) loss on sale of property, plant and equipment, net (260 ) 671 Derivative (income) loss (734 ) 884 Net cash paid for commodity derivatives 85 (679 ) Non cash unit-based compensation 79 288 Change in current assets and liabilities, excluding effects of acquisitions and dispositions: Accounts and other receivables 10,714 (2,303 ) Inventories (55,725 ) (17,572 ) Due from affiliates (2,149 ) (5,812 ) Other current assets (17,741 ) 1,435 Trade and other accounts payable 37,688 3,335 Product exchange payables (869 ) 327 Due to affiliates 7,940 1,504 Income taxes payable 368 (248 ) Other accrued liabilities (2,332 ) (3,053 ) Change in other non-current assets and liabilities 145 213 Net cash provided by operating activities 28,451 6,085 Cash flows from investing activities: Payments for property, plant and equipment (14,634 ) (8,200 ) Payments for plant turnaround costs (1,600 ) (1,694 ) Proceeds from sale of property, plant and equipment 689 133 Net cash used in investing activities (15,545 ) (9,761 ) Cash flows from financing activities: Payments of long-term debt (217,589 ) (144,790 ) Payments under finance lease obligations (119 ) (2,591 ) Proceeds from long-term debt 206,500 147,500 Purchase of treasury units — (17 ) Payment of debt issuance costs (26 ) (307 ) Excess purchase price over carrying value of acquired assets (1,285 ) — Cash distributions paid (396 ) (396 ) Net cash used in financing activities (12,915 ) (601 ) Net increase (decrease) in cash (9 ) (4,277 ) Cash at beginning of period 52 4,958 Cash at end of period $ 43 $ 681 Non-cash additions to property, plant and equipment $ 1,705 $ 2,855 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, 2022 and 2021 Three Months Ended June 30, Variance Percent Change 2022 2021 (In thousands, except BBL per day) Revenues: Services $ 22,190 $ 20,358 $ 1,832 9 % Products 36,220 25,166 11,054 44 % Total revenues 58,410 45,524 12,886 28 % Cost of products sold 28,955 20,759 8,196 39 % Operating expenses 14,925 12,664 2,261 18 % Selling, general and administrative expenses 1,654 1,468 186 13 % Depreciation and amortization 7,731 6,996 735 11 % 5,145 3,637 1,508 41 % Other operating income, net 8 61 (53 ) (87 ) % Operating income $ 5,153 $ 3,698 $ 1,455 39 % Shore-based throughput volumes (guaranteed minimum) (gallons) 20,000 20,000 — — % Smackover refinery throughput volumes (guaranteed minimum BBL per day) 6,500 6,500 — — % Comparative Results of Operations for the Six Months Ended June 30, 2022 and 2021 Six Months Ended June 30, Variance Percent Change 2022 2021 (In thousands, except BBL per day) Revenues: Services $ 43,146 $ 40,317 $ 2,829 7 % Products 69,647 45,041 24,606 55 % Total revenues 112,793 85,358 27,435 32 % Cost of products sold 56,152 35,700 20,452 57 % Operating expenses 28,837 25,457 3,380 13 % Selling, general and administrative expenses 3,365 2,967 398 13 % Depreciation and amortization 15,337 14,101 1,236 9 % 9,102 7,133 1,969 28 % Other operating loss, net (35 ) (5 ) (30 ) (600 ) % Operating income $ 9,067 $ 7,128 $ 1,939 27 % Shore-based throughput volumes (guaranteed minimum) (gallons) 40,000 40,000 — — % Smackover refinery throughput volumes (guaranteed minimum) (BBL per day) 6,500 6,500 — — % Transportation Segment Comparative Results of Operations for the Three Months Ended June 30, 2022 and 2021 Three Months Ended June 30, Variance Percent Change 2022 2021 (In thousands) Revenues $ 60,902 $ 38,349 $ 22,553 59 % Operating expenses 44,528 31,485 13,043 41 % Selling, general and administrative expenses 1,788 1,858 (70 ) (4 ) % Depreciation and amortization 3,590 4,331 (741 ) (17 ) % 10,996 675 10,321 1,529 % Other operating income, net 254 21 233 1,110 % Operating income $ 11,250 $ 696 $ 10,554 1,516 % Comparative Results of Operations for the Six Months Ended June 30, 2022 and 2021 Six Months Ended June 30, Variance Percent Change 2022 2021 (In thousands) Revenues $ 112,799 $ 72,318 $ 40,481 56 % Operating expenses 83,730 60,989 22,741 37 % Selling, general and administrative expenses 3,958 3,658 300 8 % Depreciation and amortization 7,163 8,329 (1,166 ) (14 ) % $ 17,948 $ (658 ) $ 18,606 2,828 % Other operating income (loss), net 283 17 266 1,565 % Operating income $ 18,231 $ (641 ) $ 18,872 2,944 % Sulfur Services Segment Comparative Results of Operations for the Three Months Ended June 30, 2022 and 2021 Three Months Ended June 30, Variance Percent Change 2022 2021 (In thousands) Revenues: Services $ 3,084 $ 2,949 $ 135 5 % Products 53,869 35,337 18,532 52 % Total revenues 56,953 38,286 18,667 49 % Cost of products sold 39,181 25,397 13,784 54 % Operating expenses 4,227 2,804 1,423 51 % Selling, general and administrative expenses 1,537 1,215 322 27 % Depreciation and amortization 2,882 2,568 314 12 % 9,126 6,302 2,824 45 % Other operating income, net 8 6 2 33 % Operating income $ 9,134 $ 6,308 $ 2,826 45 % Sulfur (long tons) 118 146 (28 ) (19 ) % Fertilizer (long tons) 62 84 (22 ) (26 ) % Total sulfur services volumes (long tons) 180 230 (50 ) (22 ) % Comparative Results of Operations for the Six Months Ended June 30, 2022 and 2021 Six Months Ended June 30, Variance Percent Change 2022 2021 (In thousands) Revenues: Services $ 6,168 $ 5,899 $ 269 5 % Products 109,908 67,222 42,686 64 % Total revenues 116,076 73,121 42,955 59 % Cost of products sold 78,439 47,820 30,619 64 % Operating expenses 7,255 4,813 2,442 51 % Selling, general and administrative expenses 3,041 2,456 585 24 % Depreciation and amortization 5,591 5,288 303 6 % 21,750 12,744 9,006 71 % Other operating income, net 36 6 30 500 % Operating income $ 21,786 $ 12,750 $ 9,036 71 % Sulfur (long tons) 232 219 13 6 % Fertilizer (long tons) 146 179 (33 ) (18 ) % Total sulfur services volumes (long tons) 378 398 (20 ) (5 ) % Natural Gas Liquids Segment Comparative Results of Operations for the Three Months Ended June 30, 2022 and 2021 Three Months Ended June 30, Variance Percent Change 2022 2021 (In thousands) Products revenues $ 97,580 $ 67,232 $ 30,348 45 % Cost of products sold 94,898 64,176 30,722 48 % Operating expenses 1,121 1,061 60 6 % Selling, general and administrative expenses 597 697 (100 ) (14 ) % Depreciation and amortization 597 588 9 2 % 367 710 (343 ) (48 ) % Other operating income (loss), net (24 ) 1 (25 ) (2,500 ) % Operating income $ 343 $ 711 $ (368 ) (52 ) % NGL sales volumes (Bbls) 1,153 1,259 (106 ) (8 ) % Comparative Results of Operations for the Six Months Ended June 30, 2022 and 2021 Six Months Ended June 30, Variance Percent Change 2022 2021 (In thousands) Products revenues $ 218,146 $ 165,317 $ 52,829 32 % Cost of products sold 206,054 146,688 59,366 40 % Operating expenses 2,187 2,056 131 6 % Selling, general and administrative expenses 2,319 2,904 (585 ) (20 ) % Depreciation and amortization 1,195 1,199 (4 ) — % 6,391 12,470 (6,079 ) (49 ) % Other operating loss, net (24 ) (689 ) 665 97 % Operating income $ 6,367 $ 11,781 $ (5,414 ) (46 ) % NGL sales volumes (Bbls) 2,750 3,404 (654 ) (19 ) % Unallocated Selling, General and Administrative Expenses Comparative Results of Operations for the Three and Six Months Ended June 30, 2022 and 2021 Three Months Ended June 30, Variance Percent Change Six Months Ended June 30, Variance Percent Change 2022 2021 2022 2021 (In thousands) (In thousands) Indirect selling, general and administrative expenses $ 4,390 $ 3,780 $ 610 16 % $ 8,512 $ 7,699 $ 813 11 % Non-GAAP Financial Measures The following tables reconcile the non-GAAP financial measurements used by management to our most directly comparable GAAP measures for the three and six months ended June 30, 2022 and 2021, which represents EBITDA, Adjusted EBITDA, Distributable Cash Flow, and Adjusted Free Cash Flow: Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 (in thousands) (in thousands) Net income 6,606 (6,612 ) 18,084 (4,101 ) Adjustments: Interest expense 12,846 13,309 25,275 26,262 Income tax expense 2,037 935 3,578 1,157 Depreciation and amortization 14,800 14,483 29,286 28,917 EBITDA 36,289 22,115 76,223 52,235 Adjustments: (Gain) loss on disposition of property, plant and equipment (246 ) (89 ) (260 ) 671 Unrealized mark-to-market on commodity derivatives — 424 — 205 Lower of cost or market and other non-cash adjustments 2,242 — 2,242 — Unit-based compensation 45 48 79 288 Adjusted EBITDA 38,330 22,498 78,284 53,399 Reconciliation of Net Cash provided by Operating Activities to Adjusted EBITDA, Distributable Cash Flow, and Adjusted Free Cash Flow Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 (in thousands) (in thousands) Net cash provided by operating activities $ (2,494 ) $ 2,231 $ 28,451 $ 6,085 Interest expense 1 12,061 12,543 23,707 24,741 Current income tax expense 654 252 1,274 399 Lower of cost or market and other non-cash adjustments 2,242 — 2,242 — Commodity cash flow hedging gains reclassified to earnings (82 ) — 734 — Net cash paid for closed commodity derivative positions included in AOCI (700 ) — (85 ) — Changes in operating assets and liabilities which (provided) used cash: Accounts and other receivables, inventories, and other current assets 68,797 20,065 64,901 24,252 Trade, accounts and other payables, and other current liabilities (41,182 ) (12,468 ) (42,795 ) (1,865 ) Other (966 ) (125 ) (145 ) (213 ) Adjusted EBITDA 38,330 22,498 78,284 53,399 Adjustments: Interest expense (12,846 ) (13,309 ) (25,275 ) (26,262 ) Income tax expense (2,037 ) (935 ) (3,578 ) (1,157 ) Deferred income taxes 1,383 683 2,304 758 Amortization of deferred debt issuance costs 785 766 1,568 1,521 Payments for plant turnaround costs (165 ) (20 ) (1,600 ) (1,694 ) Maintenance capital expenditures (3,155 ) (2,370 ) (8,554 ) (6,441 ) Distributable Cash Flow 22,295 7,313 43,149 20,124 Principal payments under finance lease obligations (60 ) (160 ) (119 ) (2,591 ) Expansion capital expenditures (1,455 ) (1,147 ) (4,556 ) (1,977 ) Adjusted Free Cash Flow $ 20,780 $ 6,006 $ 38,474 $ 15,556 1 Net of amortization of debt issuance costs and discount, which are included in interest expense but not included in net cash provided by operating activities. View source version on businesswire.com: https://www.businesswire.com/news/home/20220720005721/en/Contacts Sharon Taylor - Vice President & Chief Financial Officer (877) 256-6644 investor.relations@mmlp.com Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
Martin Midstream Partners Reports Second Quarter 2022 Financial Results, Increases Annual Guidance and Declares Quarterly Cash Distribution By: Martin Midstream Partners L.P. via Business Wire July 20, 2022 at 16:01 PM EDT Announces increased 2022 financial guidance Reported net income of $6.6 million and $18.1 million for the three and six months ended June 30, 2022, respectively Reported adjusted EBITDA of $38.3 million and $78.3 million for the three and six months ended June 30, 2022, respectively Declares quarterly distribution of $0.005, or $0.02 per unit annually Martin Midstream Partners L.P. (Nasdaq:MMLP) ("MMLP" or the "Partnership") today announced its financial results for the second quarter of 2022. Bob Bondurant, President and Chief Executive Officer of Martin Midstream GP LLC, the general partner of the Partnership stated, “The Partnership experienced another outstanding quarter with elevated demand for our land transportation assets, and robust margins in our lubricants and fertilizer businesses. Overall, each of our four business segments performed above expectations beating the high range of guidance for the quarter by $13 million. We now expect the current refinery utilization levels to remain strong through year end which will bring continued solid demand for our diversified products and services. Based on this expectation, we are raising our 2022 adjusted EBITDA guidance range to $126 - $135 million. “The current operating environment for our business segments has provided the opportunity for consistent leverage reduction as year over year we have reduced outstanding debt and improved financial results. As a result, on June 30, 2022, the Partnership’s adjusted leverage ratio was 3.46 times compared to 3.87 times at March 31, 2022. While that is an important milestone, our current guidance indicates that the Partnership will exit 2022 with approximately the same adjusted leverage ratio announced today, as higher commodity prices continue to increase our working capital needs specifically within the natural gas liquids segment. Our focus will remain on conservative capital management to meet the goal of a sustained leverage ratio below 3.75 times.” SECOND QUARTER 2022 OPERATING RESULTS BY BUSINESS SEGMENT TERMINALLING AND STORAGE (“T&S”) T&S Operating Income for the three months ended June 30, 2022 and 2021 was $5.2 million and $3.7 million, respectively. Adjusted segment EBITDA for T&S was $12.9 million and $10.6 million, for the three months ended June 30, 2022 and 2021, respectively, reflecting continued strength in our lubricant and specialty products divisions. TRANSPORTATION Transportation Operating Income for the three months ended June 30, 2022 and 2021 was $11.3 million and $0.7 million, respectively. Adjusted segment EBITDA for Transportation was $14.6 million and $5.0 million for the three months ended June 30, 2022 and 2021, respectively, reflecting increased demand for land transportation services coupled with improving marine fleet utilization and higher day rates. SULFUR SERVICES Sulfur Services Operating Income for the three months ended June 30, 2022 and 2021 was $9.1 million and $6.3 million, respectively. Adjusted segment EBITDA for Sulfur Services was $13.9 million and $8.9 million for the three months ended June 30, 2022 and 2021, respectively, reflecting sustained demand for fertilizer products. NATURAL GAS LIQUIDS (“NGL”) NGL Operating Income for the three months ended June 30, 2022 and 2021 was $0.3 million and $0.7 million, respectively. Adjusted segment EBITDA for NGL was $1.3 million and $1.7 million for the three months ended June 30, 2022 and 2021, respectively, primarily reflecting a seasonal decrease in NGL sales volumes. UNALLOCATED SELLING, GENERAL AND ADMINISTRATIVE EXPENSE (“USGA”) USGA expenses included in operating income for the three months ended June 30, 2022 and 2021 were $4.4 million and $3.8 million, respectively. USGA expenses included in adjusted EBITDA for the three months ended June 30, 2022 and 2021 were $4.3 million and $3.7 million, respectively, primarily reflecting an increase in employee related expenses. CAPITALIZATION At June 30, 2022, the Partnership had $494 million of total debt outstanding, including $149 million drawn on its $275 million revolving credit facility, $54 million of senior secured 1.5 lien notes due 2024 and $291 million of senior secured second lien notes due 2025. At June 30, 2022, the Partnership had liquidity of approximately $87 million from available capacity under its revolving credit facility. The Partnership’s adjusted leverage ratio, as calculated under the revolving credit facility, was 3.46 times and 3.87 times on June 30, 2022 and March 31, 2022, respectively. The Partnership was in compliance with all debt covenants as of June 30, 2022. QUARTERLY CASH DISTRIBUTION The Partnership has declared a quarterly cash distribution of $0.005 per unit for the quarter ended June 30, 2022. The distribution is payable on August 12, 2022 to common unitholders of record as of the close of business on August 5, 2022. The ex-dividend date for the cash distribution is August 4, 2022. QUALIFIED NOTICE TO NOMINEES This release serves as qualified notice to nominees as provided for under Treasury Regulation Section 1.1446-4(b)(4) and (d). Please note that 100 percent of the Partnership's distributions to foreign investors are attributable to income that is effectively connected with a United States trade or business. Accordingly, all of the Partnership's distributions to foreign investors are subject to federal income tax withholding at the highest effective tax rate for individuals or corporations, as applicable. Nominees, and not the Partnership, are treated as withholding agents responsible for withholding on the distributions received by them on behalf of foreign investors. RESULTS OF OPERATIONS The Partnership had net income for the three months ended June 30, 2022 of $6.6 million, or $0.17 per limited partner unit. The Partnership had a net loss for the three months ended June 30, 2021 of $6.6 million, a loss of $0.17 per limited partner unit. Adjusted EBITDA for the three months ended June 30, 2022 was $38.3 million compared to $22.5 million for the three months ended June 30, 2021. Net cash provided by (used in) operating activities for the three months ended June 30, 2022 was ($2.5) million, compared to $2.2 million for the three months ended June 30, 2021. Distributable cash flow for the three months ended June 30, 2022 was $22.3 million compared to $7.3 million for the three months ended June 30, 2021. Revenues for the three months ended June 30, 2022 were $267.0 million compared to $184.3 million for the three months ended June 30, 2021. The Partnership had net income for the six months ended June 30, 2022 of $18.1 million, or $0.46 per limited partner unit. The Partnership had a net loss for the six months ended June 30, 2021 of $4.1 million, a loss of $0.10 per limited partner unit. Adjusted EBITDA for the six months ended June 30, 2022 was $78.3 million compared to $53.4 million for the six months ended June 30, 2021. Net cash provided by operating activities for the six months ended June 30, 2022 was $28.5 million, compared to $6.1 million for the six months ended June 30, 2021. Distributable cash flow for the six months ended June 30, 2022 was $38.5 million compared to $15.6 million for the six months ended June 30, 2021. Revenues for the six months ended June 30, 2022 were $546.2 million compared to $385.3 million for the six months ended June 30, 2021. EBITDA, adjusted EBITDA, distributable cash flow and adjusted free cash flow 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, Distributable Cash Flow and Adjusted Free Cash Flow" in order to show the components of these non-GAAP financial measures and their reconciliation to the most comparable GAAP measurement. An attachment included in the Current Report on Form 8-K to which this announcement is included, contains a comparison of the Partnership’s adjusted EBITDA for the second quarter 2022 to the Partnership's adjusted EBITDA for the second quarter 2021. 2022 REVISED FINANCIAL GUIDANCE The Partnership now expects to generate adjusted EBITDA between $126 million and $135 million for full-year 2022, compared to the previously revised adjusted EBITDA guidance of between $110 million and $120 million. This increased guidance reflects our expectation that current refinery utilization levels will remain consistent through year-end 2022 which will bring continued solid demand for our diversified products and services. Distributable cash flow is now expected to be between $53 million and $62 million for full-year 2022, compared to the revised distributable cash flow guidance of between $37 million and $47 million. Adjusted free cash flow is now expected to be between $44 million and $53 million, compared to the revised adjusted free cash flow guidance of between $29 million and $39 million. MMLP does not intend at this time to provide financial guidance beyond 2022. The Partnership has not provided comparable GAAP financial information on a forward-looking basis because it would require the Partnership to create estimated ranges on a GAAP basis, which would entail unreasonable effort as the adjustments required to reconcile forward-looking non-GAAP measures cannot be predicted with a reasonable degree of certainty but may include, among others, costs related to debt amendments and unusual charges, expenses and gains. Some or all of those adjustments could be significant. Investors' Conference Call Date: Thursday, July 21, 2022 Time: 8:00 a.m. CT (please dial in by 7:55 a.m.) Dial In #: (888) 330-2384 Conference ID: 8536096 Replay Dial In # (800) 770-2030 – Conference ID: 8536096 A webcast of the conference call along with the Second Quarter 2022 Earnings Summary and Revised Guidance Presentation will also be available by visiting the Events and Presentations section under Investor Relations on our website at www.MMLP.com. About Martin Midstream Partners MMLP, headquartered in Kilgore, Texas, is a publicly traded limited partnership with a diverse set of operations focused primarily in the Gulf Coast region of the United States. MMLP’s primary business lines include: (1) terminalling, processing, storage, and packaging services for petroleum products and by-products; (2) land and marine transportation services for petroleum products and by-products, chemicals, and specialty products; (3) sulfur and sulfur-based products processing, manufacturing, marketing and distribution; and (4) natural gas liquids marketing, distribution, and transportation services. To learn more, visit www.MMLP.com. Follow Martin Midstream Partners L.P. on LinkedIn and Facebook. 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, including (i) the current and potential impacts of the COVID-19 pandemic generally (including variants of the virus), on an industry-specific basis, and on the Partnership’s specific operations and business, (ii) the effects of the continued volatility of commodity prices and the related macroeconomic and political environment, and (iii) 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 “SEC”). 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 except where required to do so by law. Use of Non-GAAP Financial Information To assist the Partnership's management in assessing its business, it uses the following non-GAAP financial measures: earnings before interest, taxes, and depreciation and amortization ("EBITDA"), adjusted EBITDA (as defined below) distributable cash flow available to common unitholders (“distributable cash flow”), and free cash flow after growth capital expenditures and principal payments under finance lease obligations ("adjusted free cash flow"). 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. 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. EBITDA and Adjusted EBITDA. The Partnership defines adjusted EBITDA as EBITDA before unit-based compensation expenses, gains and losses on the disposition of property, plant and equipment, impairment and other similar non-cash adjustments. Adjusted EBITDA is used as a supplemental performance and liquidity measure by the Partnership's management and by external users of its financial statements, such as investors, commercial banks, research analysts, and others, to assess: the financial performance of the Partnership's assets without regard to financing methods, capital structure, or historical cost basis; the ability of the Partnership's assets to generate cash sufficient to pay interest costs, support its indebtedness, and make cash distributions to its unitholders; and its operating performance and return on capital as compared to those of other companies in the midstream energy sector, without regard to financing methods or capital structure. The GAAP measures most directly comparable to adjusted EBITDA are net income (loss) and net cash provided by (used in) operating activities. Adjusted EBITDA should not be considered an alternative to, or more meaningful than, net income (loss), operating income (loss), net cash provided by (used in) operating activities, or any other measure of financial performance presented in accordance with GAAP. Adjusted EBITDA may not be comparable to similarly titled measures of other companies because other companies may not calculate adjusted EBITDA in the same manner. Adjusted EBITDA does not include interest expense, income tax expense, and depreciation and amortization. Because the Partnership has borrowed money to finance its operations, interest expense is a necessary element of its costs and its ability to generate cash available for distribution. Because the Partnership has capital assets, depreciation and amortization are also necessary elements of its costs. Therefore, any measures that exclude these elements have material limitations. To compensate for these limitations, the Partnership believes that it is important to consider net income (loss) and net cash provided by (used in) operating activities as determined under GAAP, as well as adjusted EBITDA, to evaluate its overall performance. Distributable Cash Flow. The Partnership defines distributable cash flow as net cash provided by (used in) operating activities less cash received (plus cash paid) for closed commodity derivative positions included in accumulated other comprehensive income (loss), plus changes in operating assets and liabilities which (provided) used cash, less maintenance capital expenditures and plant turnaround costs. 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 us 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 its 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. Adjusted Free Cash Flow. The Partnership defines adjusted free cash flow as distributable cash flow less growth capital expenditures and principal payments under finance lease obligations. Adjusted free cash flow is a significant performance measure used by the Partnership's management and by external users of its financial statements and represents how much cash flow a business generates during a specified time period after accounting for all capital expenditures, including expenditures for growth and maintenance capital projects. The Partnership believes that adjusted free cash flow is important to investors, lenders, commercial banks and research analysts since it reflects the amount of cash available for reducing debt, investing in additional capital projects, paying distributions, and similar matters. The Partnership's calculation of adjusted free cash flow may or may not be comparable to similarly titled measures used by other entities. The GAAP measure most directly comparable to distributable cash flow and adjusted free cash flow is net cash provided by (used in) operating activities. Distributable cash flow and adjusted free cash flow should not be considered alternatives to, or more meaningful than, net income (loss), operating income (loss), net cash provided by (used in) operating activities, or any other measure of liquidity presented in accordance with GAAP. Distributable cash flow and adjusted free cash flow have important limitations because they exclude some items that affect net income (loss), operating income (loss), and net cash provided by (used in) operating activities. Distributable cash flow and adjusted free cash flow may not be comparable to similarly titled measures of other companies because other companies may not calculate these non-GAAP metrics in the same manner. To compensate for these limitations, the Partnership believes that it is important to consider net cash provided by (used in) operating activities determined under GAAP, as well as distributable cash flow and adjusted free cash flow, to evaluate its overall liquidity. MMLP-F MARTIN MIDSTREAM PARTNERS L.P. CONSOLIDATED AND CONDENSED BALANCE SHEETS (Dollars in thousands) June 30, 2022 December 31, 2021 (Unaudited) (Audited) Assets Cash $ 43 $ 52 Accounts and other receivables, less allowance for doubtful accounts of $559 and $311, respectively 73,485 84,199 Inventories 117,845 62,120 Due from affiliates 16,558 14,409 Other current assets 29,554 12,908 Total current assets 237,485 173,688 Property, plant and equipment, at cost 898,379 898,770 Accumulated depreciation (566,799 ) (553,300 ) Property, plant and equipment, net 331,580 345,470 Goodwill 16,823 16,823 Right-of-use assets 30,249 21,861 Deferred income taxes, net 17,517 19,821 Other assets, net 2,507 2,198 Total assets $ 636,161 $ 579,861 Liabilities and Partners’ Capital (Deficit) Current installments of long-term debt and finance lease obligations $ 169 $ 280 Trade and other accounts payable 105,156 70,342 Product exchange payables 537 1,406 Due to affiliates 9,764 1,824 Income taxes payable 753 385 Other accrued liabilities 31,513 29,850 Total current liabilities 147,892 104,087 Long-term debt, net 489,325 498,871 Finance lease obligations — 9 Operating lease liabilities 22,455 15,704 Other long-term obligations 7,343 9,227 Total liabilities 667,015 627,898 Commitments and contingencies Partners’ capital (deficit) (31,021 ) (48,853 ) Accumulated other comprehensive income (loss) 167 816 Total partners’ capital (deficit) (30,854 ) (48,037 ) Total liabilities and partners' capital (deficit) $ 636,161 $ 579,861 MARTIN MIDSTREAM PARTNERS L.P. CONSOLIDATED AND CONDENSED STATEMENTS OF OPERATIONS (Unaudited) (Dollars in thousands, except per unit amounts) Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 Revenues: Terminalling and storage * $ 20,439 $ 18,702 $ 39,852 $ 37,080 Transportation * 55,832 34,926 102,542 64,741 Sulfur services 3,084 2,949 6,168 5,899 Product sales: * Natural gas liquids 97,580 67,232 218,143 165,317 Sulfur services 53,869 35,337 109,908 67,222 Terminalling and storage 36,192 25,147 69,584 45,008 187,641 127,716 397,635 277,547 Total revenues 266,996 184,293 546,197 385,267 Costs and expenses: Cost of products sold: (excluding depreciation and amortization) Natural gas liquids * 91,584 61,590 198,682 140,725 Sulfur services * 37,063 24,177 74,848 45,391 Terminalling and storage * 28,279 20,226 54,978 34,728 156,926 105,993 328,508 220,844 Expenses: Operating expenses * 64,082 47,313 120,577 91,947 Selling, general and administrative * 9,944 8,960 21,147 19,569 Depreciation and amortization 14,800 14,483 29,286 28,917 Total costs and expenses 245,752 176,749 499,518 361,277 Other operating income (loss), net 246 89 260 (671 ) Operating income 21,490 7,633 46,939 23,319 Other income (expense): Interest expense, net (12,846 ) (13,309 ) (25,275 ) (26,262 ) Other, net (1 ) (1 ) (2 ) (1 ) Total other expense (12,847 ) (13,310 ) (25,277 ) (26,263 ) Net income before taxes 8,643 (5,677 ) 21,662 (2,944 ) Income tax expense (2,037 ) (935 ) (3,578 ) (1,157 ) Net income 6,606 (6,612 ) 18,084 (4,101 ) Less general partner's interest in net income (132 ) 132 (362 ) 82 Less income allocable to unvested restricted units (21 ) 20 (51 ) 10 Limited partners' interest in net income $ 6,453 $ (6,460 ) $ 17,671 $ (4,009 ) Net income per unit attributable to limited partners - basic $ 0.17 $ (0.17 ) $ 0.46 $ (0.10 ) Net income per unit attributable to limited partners - diluted $ 0.17 $ (0.17 ) $ 0.46 $ (0.10 ) Weighted average limited partner units - basic 38,729,118 38,687,874 38,725,701 38,690,228 Weighted average limited partner units - diluted 38,750,153 38,687,874 38,753,197 38,690,228 *Related Party Transactions Shown Below MARTIN MIDSTREAM PARTNERS L.P. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Dollars in thousands, except per unit amounts) *Related Party Transactions Included Above Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 Revenues:* Terminalling and storage $ 17,416 $ 15,569 $ 33,620 $ 30,875 Transportation 7,463 4,889 13,751 8,899 Product Sales 95 71 416 185 Costs and expenses:* Cost of products sold: (excluding depreciation and amortization) Sulfur services 2,592 2,403 5,268 4,938 Terminalling and storage 10,209 7,036 19,860 11,604 Expenses: Operating expenses 23,446 19,590 44,826 37,958 Selling, general and administrative 7,498 7,285 16,306 15,965 MARTIN MIDSTREAM PARTNERS L.P. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) (Dollars in thousands) Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 Net income $ 6,606 $ (6,612 ) $ 18,084 $ (4,101 ) Changes in fair values of commodity cash flow hedges 167 — 167 — Commodity cash flow hedging (gains) losses reclassified to earnings 440 — (816 ) — Comprehensive income $ 7,213 $ (6,612 ) $ 17,435 $ (4,101 ) MARTIN MIDSTREAM PARTNERS L.P. CONSOLIDATED AND CONDENSED STATEMENTS OF CAPITAL (DEFICIT) (Unaudited) (Dollars in thousands) Partners’ Capital (Deficit) Common Limited General Partner Amount Accumulated Other Comprehensive Income (Loss) Units Amount Total Balances - January 1, 2021 38,851,174 $ (48,776 ) $ 1,905 $ — $ (46,871 ) Net income — (4,019 ) (82 ) — (4,101 ) Issuance of restricted units 42,168 — — — — Forfeiture of restricted units (83,436 ) — — — — Cash distributions — (388 ) (8 ) — (396 ) Unit-based compensation — 288 — — 288 Purchase of treasury units (7,156 ) (17 ) — — (17 ) Balances - June 30, 2021 38,802,750 $ (52,912 ) $ 1,815 $ — $ (51,097 ) Balances - January 1, 2022 38,802,750 $ (50,741 ) $ 1,888 $ 816 $ (48,037 ) Net income — 17,722 362 — 18,084 Issuance of restricted units 48,000 — — — — Cash distributions — (388 ) (8 ) — (396 ) Unit-based compensation — 79 — — 79 Gain reclassified from AOCI into income on commodity cash flow hedges — — — (816 ) (816 ) Gain recognized in AOCI on commodity cash flow hedges — — — 167 167 Excess purchase price over carrying value of acquired assets — 65 — — 65 Balances - June 30, 2022 38,850,750 $ (33,263 ) $ 2,242 $ 167 $ (30,854 ) MARTIN MIDSTREAM PARTNERS L.P. CONSOLIDATED AND CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in thousands) Six Months Ended June 30, 2022 2021 Cash flows from operating activities: Net income (loss) $ 18,084 $ (4,101 ) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 29,286 28,917 Amortization of deferred debt issuance costs 1,568 1,521 Deferred income tax expense 2,304 758 (Gain) loss on sale of property, plant and equipment, net (260 ) 671 Derivative (income) loss (734 ) 884 Net cash paid for commodity derivatives 85 (679 ) Non cash unit-based compensation 79 288 Change in current assets and liabilities, excluding effects of acquisitions and dispositions: Accounts and other receivables 10,714 (2,303 ) Inventories (55,725 ) (17,572 ) Due from affiliates (2,149 ) (5,812 ) Other current assets (17,741 ) 1,435 Trade and other accounts payable 37,688 3,335 Product exchange payables (869 ) 327 Due to affiliates 7,940 1,504 Income taxes payable 368 (248 ) Other accrued liabilities (2,332 ) (3,053 ) Change in other non-current assets and liabilities 145 213 Net cash provided by operating activities 28,451 6,085 Cash flows from investing activities: Payments for property, plant and equipment (14,634 ) (8,200 ) Payments for plant turnaround costs (1,600 ) (1,694 ) Proceeds from sale of property, plant and equipment 689 133 Net cash used in investing activities (15,545 ) (9,761 ) Cash flows from financing activities: Payments of long-term debt (217,589 ) (144,790 ) Payments under finance lease obligations (119 ) (2,591 ) Proceeds from long-term debt 206,500 147,500 Purchase of treasury units — (17 ) Payment of debt issuance costs (26 ) (307 ) Excess purchase price over carrying value of acquired assets (1,285 ) — Cash distributions paid (396 ) (396 ) Net cash used in financing activities (12,915 ) (601 ) Net increase (decrease) in cash (9 ) (4,277 ) Cash at beginning of period 52 4,958 Cash at end of period $ 43 $ 681 Non-cash additions to property, plant and equipment $ 1,705 $ 2,855 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, 2022 and 2021 Three Months Ended June 30, Variance Percent Change 2022 2021 (In thousands, except BBL per day) Revenues: Services $ 22,190 $ 20,358 $ 1,832 9 % Products 36,220 25,166 11,054 44 % Total revenues 58,410 45,524 12,886 28 % Cost of products sold 28,955 20,759 8,196 39 % Operating expenses 14,925 12,664 2,261 18 % Selling, general and administrative expenses 1,654 1,468 186 13 % Depreciation and amortization 7,731 6,996 735 11 % 5,145 3,637 1,508 41 % Other operating income, net 8 61 (53 ) (87 ) % Operating income $ 5,153 $ 3,698 $ 1,455 39 % Shore-based throughput volumes (guaranteed minimum) (gallons) 20,000 20,000 — — % Smackover refinery throughput volumes (guaranteed minimum BBL per day) 6,500 6,500 — — % Comparative Results of Operations for the Six Months Ended June 30, 2022 and 2021 Six Months Ended June 30, Variance Percent Change 2022 2021 (In thousands, except BBL per day) Revenues: Services $ 43,146 $ 40,317 $ 2,829 7 % Products 69,647 45,041 24,606 55 % Total revenues 112,793 85,358 27,435 32 % Cost of products sold 56,152 35,700 20,452 57 % Operating expenses 28,837 25,457 3,380 13 % Selling, general and administrative expenses 3,365 2,967 398 13 % Depreciation and amortization 15,337 14,101 1,236 9 % 9,102 7,133 1,969 28 % Other operating loss, net (35 ) (5 ) (30 ) (600 ) % Operating income $ 9,067 $ 7,128 $ 1,939 27 % Shore-based throughput volumes (guaranteed minimum) (gallons) 40,000 40,000 — — % Smackover refinery throughput volumes (guaranteed minimum) (BBL per day) 6,500 6,500 — — % Transportation Segment Comparative Results of Operations for the Three Months Ended June 30, 2022 and 2021 Three Months Ended June 30, Variance Percent Change 2022 2021 (In thousands) Revenues $ 60,902 $ 38,349 $ 22,553 59 % Operating expenses 44,528 31,485 13,043 41 % Selling, general and administrative expenses 1,788 1,858 (70 ) (4 ) % Depreciation and amortization 3,590 4,331 (741 ) (17 ) % 10,996 675 10,321 1,529 % Other operating income, net 254 21 233 1,110 % Operating income $ 11,250 $ 696 $ 10,554 1,516 % Comparative Results of Operations for the Six Months Ended June 30, 2022 and 2021 Six Months Ended June 30, Variance Percent Change 2022 2021 (In thousands) Revenues $ 112,799 $ 72,318 $ 40,481 56 % Operating expenses 83,730 60,989 22,741 37 % Selling, general and administrative expenses 3,958 3,658 300 8 % Depreciation and amortization 7,163 8,329 (1,166 ) (14 ) % $ 17,948 $ (658 ) $ 18,606 2,828 % Other operating income (loss), net 283 17 266 1,565 % Operating income $ 18,231 $ (641 ) $ 18,872 2,944 % Sulfur Services Segment Comparative Results of Operations for the Three Months Ended June 30, 2022 and 2021 Three Months Ended June 30, Variance Percent Change 2022 2021 (In thousands) Revenues: Services $ 3,084 $ 2,949 $ 135 5 % Products 53,869 35,337 18,532 52 % Total revenues 56,953 38,286 18,667 49 % Cost of products sold 39,181 25,397 13,784 54 % Operating expenses 4,227 2,804 1,423 51 % Selling, general and administrative expenses 1,537 1,215 322 27 % Depreciation and amortization 2,882 2,568 314 12 % 9,126 6,302 2,824 45 % Other operating income, net 8 6 2 33 % Operating income $ 9,134 $ 6,308 $ 2,826 45 % Sulfur (long tons) 118 146 (28 ) (19 ) % Fertilizer (long tons) 62 84 (22 ) (26 ) % Total sulfur services volumes (long tons) 180 230 (50 ) (22 ) % Comparative Results of Operations for the Six Months Ended June 30, 2022 and 2021 Six Months Ended June 30, Variance Percent Change 2022 2021 (In thousands) Revenues: Services $ 6,168 $ 5,899 $ 269 5 % Products 109,908 67,222 42,686 64 % Total revenues 116,076 73,121 42,955 59 % Cost of products sold 78,439 47,820 30,619 64 % Operating expenses 7,255 4,813 2,442 51 % Selling, general and administrative expenses 3,041 2,456 585 24 % Depreciation and amortization 5,591 5,288 303 6 % 21,750 12,744 9,006 71 % Other operating income, net 36 6 30 500 % Operating income $ 21,786 $ 12,750 $ 9,036 71 % Sulfur (long tons) 232 219 13 6 % Fertilizer (long tons) 146 179 (33 ) (18 ) % Total sulfur services volumes (long tons) 378 398 (20 ) (5 ) % Natural Gas Liquids Segment Comparative Results of Operations for the Three Months Ended June 30, 2022 and 2021 Three Months Ended June 30, Variance Percent Change 2022 2021 (In thousands) Products revenues $ 97,580 $ 67,232 $ 30,348 45 % Cost of products sold 94,898 64,176 30,722 48 % Operating expenses 1,121 1,061 60 6 % Selling, general and administrative expenses 597 697 (100 ) (14 ) % Depreciation and amortization 597 588 9 2 % 367 710 (343 ) (48 ) % Other operating income (loss), net (24 ) 1 (25 ) (2,500 ) % Operating income $ 343 $ 711 $ (368 ) (52 ) % NGL sales volumes (Bbls) 1,153 1,259 (106 ) (8 ) % Comparative Results of Operations for the Six Months Ended June 30, 2022 and 2021 Six Months Ended June 30, Variance Percent Change 2022 2021 (In thousands) Products revenues $ 218,146 $ 165,317 $ 52,829 32 % Cost of products sold 206,054 146,688 59,366 40 % Operating expenses 2,187 2,056 131 6 % Selling, general and administrative expenses 2,319 2,904 (585 ) (20 ) % Depreciation and amortization 1,195 1,199 (4 ) — % 6,391 12,470 (6,079 ) (49 ) % Other operating loss, net (24 ) (689 ) 665 97 % Operating income $ 6,367 $ 11,781 $ (5,414 ) (46 ) % NGL sales volumes (Bbls) 2,750 3,404 (654 ) (19 ) % Unallocated Selling, General and Administrative Expenses Comparative Results of Operations for the Three and Six Months Ended June 30, 2022 and 2021 Three Months Ended June 30, Variance Percent Change Six Months Ended June 30, Variance Percent Change 2022 2021 2022 2021 (In thousands) (In thousands) Indirect selling, general and administrative expenses $ 4,390 $ 3,780 $ 610 16 % $ 8,512 $ 7,699 $ 813 11 % Non-GAAP Financial Measures The following tables reconcile the non-GAAP financial measurements used by management to our most directly comparable GAAP measures for the three and six months ended June 30, 2022 and 2021, which represents EBITDA, Adjusted EBITDA, Distributable Cash Flow, and Adjusted Free Cash Flow: Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 (in thousands) (in thousands) Net income 6,606 (6,612 ) 18,084 (4,101 ) Adjustments: Interest expense 12,846 13,309 25,275 26,262 Income tax expense 2,037 935 3,578 1,157 Depreciation and amortization 14,800 14,483 29,286 28,917 EBITDA 36,289 22,115 76,223 52,235 Adjustments: (Gain) loss on disposition of property, plant and equipment (246 ) (89 ) (260 ) 671 Unrealized mark-to-market on commodity derivatives — 424 — 205 Lower of cost or market and other non-cash adjustments 2,242 — 2,242 — Unit-based compensation 45 48 79 288 Adjusted EBITDA 38,330 22,498 78,284 53,399 Reconciliation of Net Cash provided by Operating Activities to Adjusted EBITDA, Distributable Cash Flow, and Adjusted Free Cash Flow Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 (in thousands) (in thousands) Net cash provided by operating activities $ (2,494 ) $ 2,231 $ 28,451 $ 6,085 Interest expense 1 12,061 12,543 23,707 24,741 Current income tax expense 654 252 1,274 399 Lower of cost or market and other non-cash adjustments 2,242 — 2,242 — Commodity cash flow hedging gains reclassified to earnings (82 ) — 734 — Net cash paid for closed commodity derivative positions included in AOCI (700 ) — (85 ) — Changes in operating assets and liabilities which (provided) used cash: Accounts and other receivables, inventories, and other current assets 68,797 20,065 64,901 24,252 Trade, accounts and other payables, and other current liabilities (41,182 ) (12,468 ) (42,795 ) (1,865 ) Other (966 ) (125 ) (145 ) (213 ) Adjusted EBITDA 38,330 22,498 78,284 53,399 Adjustments: Interest expense (12,846 ) (13,309 ) (25,275 ) (26,262 ) Income tax expense (2,037 ) (935 ) (3,578 ) (1,157 ) Deferred income taxes 1,383 683 2,304 758 Amortization of deferred debt issuance costs 785 766 1,568 1,521 Payments for plant turnaround costs (165 ) (20 ) (1,600 ) (1,694 ) Maintenance capital expenditures (3,155 ) (2,370 ) (8,554 ) (6,441 ) Distributable Cash Flow 22,295 7,313 43,149 20,124 Principal payments under finance lease obligations (60 ) (160 ) (119 ) (2,591 ) Expansion capital expenditures (1,455 ) (1,147 ) (4,556 ) (1,977 ) Adjusted Free Cash Flow $ 20,780 $ 6,006 $ 38,474 $ 15,556 1 Net of amortization of debt issuance costs and discount, which are included in interest expense but not included in net cash provided by operating activities. View source version on businesswire.com: https://www.businesswire.com/news/home/20220720005721/en/Contacts Sharon Taylor - Vice President & Chief Financial Officer (877) 256-6644 investor.relations@mmlp.com
Announces increased 2022 financial guidance Reported net income of $6.6 million and $18.1 million for the three and six months ended June 30, 2022, respectively Reported adjusted EBITDA of $38.3 million and $78.3 million for the three and six months ended June 30, 2022, respectively Declares quarterly distribution of $0.005, or $0.02 per unit annually
Martin Midstream Partners L.P. (Nasdaq:MMLP) ("MMLP" or the "Partnership") today announced its financial results for the second quarter of 2022. Bob Bondurant, President and Chief Executive Officer of Martin Midstream GP LLC, the general partner of the Partnership stated, “The Partnership experienced another outstanding quarter with elevated demand for our land transportation assets, and robust margins in our lubricants and fertilizer businesses. Overall, each of our four business segments performed above expectations beating the high range of guidance for the quarter by $13 million. We now expect the current refinery utilization levels to remain strong through year end which will bring continued solid demand for our diversified products and services. Based on this expectation, we are raising our 2022 adjusted EBITDA guidance range to $126 - $135 million. “The current operating environment for our business segments has provided the opportunity for consistent leverage reduction as year over year we have reduced outstanding debt and improved financial results. As a result, on June 30, 2022, the Partnership’s adjusted leverage ratio was 3.46 times compared to 3.87 times at March 31, 2022. While that is an important milestone, our current guidance indicates that the Partnership will exit 2022 with approximately the same adjusted leverage ratio announced today, as higher commodity prices continue to increase our working capital needs specifically within the natural gas liquids segment. Our focus will remain on conservative capital management to meet the goal of a sustained leverage ratio below 3.75 times.” SECOND QUARTER 2022 OPERATING RESULTS BY BUSINESS SEGMENT TERMINALLING AND STORAGE (“T&S”) T&S Operating Income for the three months ended June 30, 2022 and 2021 was $5.2 million and $3.7 million, respectively. Adjusted segment EBITDA for T&S was $12.9 million and $10.6 million, for the three months ended June 30, 2022 and 2021, respectively, reflecting continued strength in our lubricant and specialty products divisions. TRANSPORTATION Transportation Operating Income for the three months ended June 30, 2022 and 2021 was $11.3 million and $0.7 million, respectively. Adjusted segment EBITDA for Transportation was $14.6 million and $5.0 million for the three months ended June 30, 2022 and 2021, respectively, reflecting increased demand for land transportation services coupled with improving marine fleet utilization and higher day rates. SULFUR SERVICES Sulfur Services Operating Income for the three months ended June 30, 2022 and 2021 was $9.1 million and $6.3 million, respectively. Adjusted segment EBITDA for Sulfur Services was $13.9 million and $8.9 million for the three months ended June 30, 2022 and 2021, respectively, reflecting sustained demand for fertilizer products. NATURAL GAS LIQUIDS (“NGL”) NGL Operating Income for the three months ended June 30, 2022 and 2021 was $0.3 million and $0.7 million, respectively. Adjusted segment EBITDA for NGL was $1.3 million and $1.7 million for the three months ended June 30, 2022 and 2021, respectively, primarily reflecting a seasonal decrease in NGL sales volumes. UNALLOCATED SELLING, GENERAL AND ADMINISTRATIVE EXPENSE (“USGA”) USGA expenses included in operating income for the three months ended June 30, 2022 and 2021 were $4.4 million and $3.8 million, respectively. USGA expenses included in adjusted EBITDA for the three months ended June 30, 2022 and 2021 were $4.3 million and $3.7 million, respectively, primarily reflecting an increase in employee related expenses. CAPITALIZATION At June 30, 2022, the Partnership had $494 million of total debt outstanding, including $149 million drawn on its $275 million revolving credit facility, $54 million of senior secured 1.5 lien notes due 2024 and $291 million of senior secured second lien notes due 2025. At June 30, 2022, the Partnership had liquidity of approximately $87 million from available capacity under its revolving credit facility. The Partnership’s adjusted leverage ratio, as calculated under the revolving credit facility, was 3.46 times and 3.87 times on June 30, 2022 and March 31, 2022, respectively. The Partnership was in compliance with all debt covenants as of June 30, 2022. QUARTERLY CASH DISTRIBUTION The Partnership has declared a quarterly cash distribution of $0.005 per unit for the quarter ended June 30, 2022. The distribution is payable on August 12, 2022 to common unitholders of record as of the close of business on August 5, 2022. The ex-dividend date for the cash distribution is August 4, 2022. QUALIFIED NOTICE TO NOMINEES This release serves as qualified notice to nominees as provided for under Treasury Regulation Section 1.1446-4(b)(4) and (d). Please note that 100 percent of the Partnership's distributions to foreign investors are attributable to income that is effectively connected with a United States trade or business. Accordingly, all of the Partnership's distributions to foreign investors are subject to federal income tax withholding at the highest effective tax rate for individuals or corporations, as applicable. Nominees, and not the Partnership, are treated as withholding agents responsible for withholding on the distributions received by them on behalf of foreign investors. RESULTS OF OPERATIONS The Partnership had net income for the three months ended June 30, 2022 of $6.6 million, or $0.17 per limited partner unit. The Partnership had a net loss for the three months ended June 30, 2021 of $6.6 million, a loss of $0.17 per limited partner unit. Adjusted EBITDA for the three months ended June 30, 2022 was $38.3 million compared to $22.5 million for the three months ended June 30, 2021. Net cash provided by (used in) operating activities for the three months ended June 30, 2022 was ($2.5) million, compared to $2.2 million for the three months ended June 30, 2021. Distributable cash flow for the three months ended June 30, 2022 was $22.3 million compared to $7.3 million for the three months ended June 30, 2021. Revenues for the three months ended June 30, 2022 were $267.0 million compared to $184.3 million for the three months ended June 30, 2021. The Partnership had net income for the six months ended June 30, 2022 of $18.1 million, or $0.46 per limited partner unit. The Partnership had a net loss for the six months ended June 30, 2021 of $4.1 million, a loss of $0.10 per limited partner unit. Adjusted EBITDA for the six months ended June 30, 2022 was $78.3 million compared to $53.4 million for the six months ended June 30, 2021. Net cash provided by operating activities for the six months ended June 30, 2022 was $28.5 million, compared to $6.1 million for the six months ended June 30, 2021. Distributable cash flow for the six months ended June 30, 2022 was $38.5 million compared to $15.6 million for the six months ended June 30, 2021. Revenues for the six months ended June 30, 2022 were $546.2 million compared to $385.3 million for the six months ended June 30, 2021. EBITDA, adjusted EBITDA, distributable cash flow and adjusted free cash flow 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, Distributable Cash Flow and Adjusted Free Cash Flow" in order to show the components of these non-GAAP financial measures and their reconciliation to the most comparable GAAP measurement. An attachment included in the Current Report on Form 8-K to which this announcement is included, contains a comparison of the Partnership’s adjusted EBITDA for the second quarter 2022 to the Partnership's adjusted EBITDA for the second quarter 2021. 2022 REVISED FINANCIAL GUIDANCE The Partnership now expects to generate adjusted EBITDA between $126 million and $135 million for full-year 2022, compared to the previously revised adjusted EBITDA guidance of between $110 million and $120 million. This increased guidance reflects our expectation that current refinery utilization levels will remain consistent through year-end 2022 which will bring continued solid demand for our diversified products and services. Distributable cash flow is now expected to be between $53 million and $62 million for full-year 2022, compared to the revised distributable cash flow guidance of between $37 million and $47 million. Adjusted free cash flow is now expected to be between $44 million and $53 million, compared to the revised adjusted free cash flow guidance of between $29 million and $39 million. MMLP does not intend at this time to provide financial guidance beyond 2022. The Partnership has not provided comparable GAAP financial information on a forward-looking basis because it would require the Partnership to create estimated ranges on a GAAP basis, which would entail unreasonable effort as the adjustments required to reconcile forward-looking non-GAAP measures cannot be predicted with a reasonable degree of certainty but may include, among others, costs related to debt amendments and unusual charges, expenses and gains. Some or all of those adjustments could be significant. Investors' Conference Call Date: Thursday, July 21, 2022 Time: 8:00 a.m. CT (please dial in by 7:55 a.m.) Dial In #: (888) 330-2384 Conference ID: 8536096 Replay Dial In # (800) 770-2030 – Conference ID: 8536096 A webcast of the conference call along with the Second Quarter 2022 Earnings Summary and Revised Guidance Presentation will also be available by visiting the Events and Presentations section under Investor Relations on our website at www.MMLP.com. About Martin Midstream Partners MMLP, headquartered in Kilgore, Texas, is a publicly traded limited partnership with a diverse set of operations focused primarily in the Gulf Coast region of the United States. MMLP’s primary business lines include: (1) terminalling, processing, storage, and packaging services for petroleum products and by-products; (2) land and marine transportation services for petroleum products and by-products, chemicals, and specialty products; (3) sulfur and sulfur-based products processing, manufacturing, marketing and distribution; and (4) natural gas liquids marketing, distribution, and transportation services. To learn more, visit www.MMLP.com. Follow Martin Midstream Partners L.P. on LinkedIn and Facebook. 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, including (i) the current and potential impacts of the COVID-19 pandemic generally (including variants of the virus), on an industry-specific basis, and on the Partnership’s specific operations and business, (ii) the effects of the continued volatility of commodity prices and the related macroeconomic and political environment, and (iii) 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 “SEC”). 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 except where required to do so by law. Use of Non-GAAP Financial Information To assist the Partnership's management in assessing its business, it uses the following non-GAAP financial measures: earnings before interest, taxes, and depreciation and amortization ("EBITDA"), adjusted EBITDA (as defined below) distributable cash flow available to common unitholders (“distributable cash flow”), and free cash flow after growth capital expenditures and principal payments under finance lease obligations ("adjusted free cash flow"). 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. 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. EBITDA and Adjusted EBITDA. The Partnership defines adjusted EBITDA as EBITDA before unit-based compensation expenses, gains and losses on the disposition of property, plant and equipment, impairment and other similar non-cash adjustments. Adjusted EBITDA is used as a supplemental performance and liquidity measure by the Partnership's management and by external users of its financial statements, such as investors, commercial banks, research analysts, and others, to assess: the financial performance of the Partnership's assets without regard to financing methods, capital structure, or historical cost basis; the ability of the Partnership's assets to generate cash sufficient to pay interest costs, support its indebtedness, and make cash distributions to its unitholders; and its operating performance and return on capital as compared to those of other companies in the midstream energy sector, without regard to financing methods or capital structure. The GAAP measures most directly comparable to adjusted EBITDA are net income (loss) and net cash provided by (used in) operating activities. Adjusted EBITDA should not be considered an alternative to, or more meaningful than, net income (loss), operating income (loss), net cash provided by (used in) operating activities, or any other measure of financial performance presented in accordance with GAAP. Adjusted EBITDA may not be comparable to similarly titled measures of other companies because other companies may not calculate adjusted EBITDA in the same manner. Adjusted EBITDA does not include interest expense, income tax expense, and depreciation and amortization. Because the Partnership has borrowed money to finance its operations, interest expense is a necessary element of its costs and its ability to generate cash available for distribution. Because the Partnership has capital assets, depreciation and amortization are also necessary elements of its costs. Therefore, any measures that exclude these elements have material limitations. To compensate for these limitations, the Partnership believes that it is important to consider net income (loss) and net cash provided by (used in) operating activities as determined under GAAP, as well as adjusted EBITDA, to evaluate its overall performance. Distributable Cash Flow. The Partnership defines distributable cash flow as net cash provided by (used in) operating activities less cash received (plus cash paid) for closed commodity derivative positions included in accumulated other comprehensive income (loss), plus changes in operating assets and liabilities which (provided) used cash, less maintenance capital expenditures and plant turnaround costs. 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 us 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 its 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. Adjusted Free Cash Flow. The Partnership defines adjusted free cash flow as distributable cash flow less growth capital expenditures and principal payments under finance lease obligations. Adjusted free cash flow is a significant performance measure used by the Partnership's management and by external users of its financial statements and represents how much cash flow a business generates during a specified time period after accounting for all capital expenditures, including expenditures for growth and maintenance capital projects. The Partnership believes that adjusted free cash flow is important to investors, lenders, commercial banks and research analysts since it reflects the amount of cash available for reducing debt, investing in additional capital projects, paying distributions, and similar matters. The Partnership's calculation of adjusted free cash flow may or may not be comparable to similarly titled measures used by other entities. The GAAP measure most directly comparable to distributable cash flow and adjusted free cash flow is net cash provided by (used in) operating activities. Distributable cash flow and adjusted free cash flow should not be considered alternatives to, or more meaningful than, net income (loss), operating income (loss), net cash provided by (used in) operating activities, or any other measure of liquidity presented in accordance with GAAP. Distributable cash flow and adjusted free cash flow have important limitations because they exclude some items that affect net income (loss), operating income (loss), and net cash provided by (used in) operating activities. Distributable cash flow and adjusted free cash flow may not be comparable to similarly titled measures of other companies because other companies may not calculate these non-GAAP metrics in the same manner. To compensate for these limitations, the Partnership believes that it is important to consider net cash provided by (used in) operating activities determined under GAAP, as well as distributable cash flow and adjusted free cash flow, to evaluate its overall liquidity. MMLP-F MARTIN MIDSTREAM PARTNERS L.P. CONSOLIDATED AND CONDENSED BALANCE SHEETS (Dollars in thousands) June 30, 2022 December 31, 2021 (Unaudited) (Audited) Assets Cash $ 43 $ 52 Accounts and other receivables, less allowance for doubtful accounts of $559 and $311, respectively 73,485 84,199 Inventories 117,845 62,120 Due from affiliates 16,558 14,409 Other current assets 29,554 12,908 Total current assets 237,485 173,688 Property, plant and equipment, at cost 898,379 898,770 Accumulated depreciation (566,799 ) (553,300 ) Property, plant and equipment, net 331,580 345,470 Goodwill 16,823 16,823 Right-of-use assets 30,249 21,861 Deferred income taxes, net 17,517 19,821 Other assets, net 2,507 2,198 Total assets $ 636,161 $ 579,861 Liabilities and Partners’ Capital (Deficit) Current installments of long-term debt and finance lease obligations $ 169 $ 280 Trade and other accounts payable 105,156 70,342 Product exchange payables 537 1,406 Due to affiliates 9,764 1,824 Income taxes payable 753 385 Other accrued liabilities 31,513 29,850 Total current liabilities 147,892 104,087 Long-term debt, net 489,325 498,871 Finance lease obligations — 9 Operating lease liabilities 22,455 15,704 Other long-term obligations 7,343 9,227 Total liabilities 667,015 627,898 Commitments and contingencies Partners’ capital (deficit) (31,021 ) (48,853 ) Accumulated other comprehensive income (loss) 167 816 Total partners’ capital (deficit) (30,854 ) (48,037 ) Total liabilities and partners' capital (deficit) $ 636,161 $ 579,861 MARTIN MIDSTREAM PARTNERS L.P. CONSOLIDATED AND CONDENSED STATEMENTS OF OPERATIONS (Unaudited) (Dollars in thousands, except per unit amounts) Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 Revenues: Terminalling and storage * $ 20,439 $ 18,702 $ 39,852 $ 37,080 Transportation * 55,832 34,926 102,542 64,741 Sulfur services 3,084 2,949 6,168 5,899 Product sales: * Natural gas liquids 97,580 67,232 218,143 165,317 Sulfur services 53,869 35,337 109,908 67,222 Terminalling and storage 36,192 25,147 69,584 45,008 187,641 127,716 397,635 277,547 Total revenues 266,996 184,293 546,197 385,267 Costs and expenses: Cost of products sold: (excluding depreciation and amortization) Natural gas liquids * 91,584 61,590 198,682 140,725 Sulfur services * 37,063 24,177 74,848 45,391 Terminalling and storage * 28,279 20,226 54,978 34,728 156,926 105,993 328,508 220,844 Expenses: Operating expenses * 64,082 47,313 120,577 91,947 Selling, general and administrative * 9,944 8,960 21,147 19,569 Depreciation and amortization 14,800 14,483 29,286 28,917 Total costs and expenses 245,752 176,749 499,518 361,277 Other operating income (loss), net 246 89 260 (671 ) Operating income 21,490 7,633 46,939 23,319 Other income (expense): Interest expense, net (12,846 ) (13,309 ) (25,275 ) (26,262 ) Other, net (1 ) (1 ) (2 ) (1 ) Total other expense (12,847 ) (13,310 ) (25,277 ) (26,263 ) Net income before taxes 8,643 (5,677 ) 21,662 (2,944 ) Income tax expense (2,037 ) (935 ) (3,578 ) (1,157 ) Net income 6,606 (6,612 ) 18,084 (4,101 ) Less general partner's interest in net income (132 ) 132 (362 ) 82 Less income allocable to unvested restricted units (21 ) 20 (51 ) 10 Limited partners' interest in net income $ 6,453 $ (6,460 ) $ 17,671 $ (4,009 ) Net income per unit attributable to limited partners - basic $ 0.17 $ (0.17 ) $ 0.46 $ (0.10 ) Net income per unit attributable to limited partners - diluted $ 0.17 $ (0.17 ) $ 0.46 $ (0.10 ) Weighted average limited partner units - basic 38,729,118 38,687,874 38,725,701 38,690,228 Weighted average limited partner units - diluted 38,750,153 38,687,874 38,753,197 38,690,228 *Related Party Transactions Shown Below MARTIN MIDSTREAM PARTNERS L.P. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Dollars in thousands, except per unit amounts) *Related Party Transactions Included Above Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 Revenues:* Terminalling and storage $ 17,416 $ 15,569 $ 33,620 $ 30,875 Transportation 7,463 4,889 13,751 8,899 Product Sales 95 71 416 185 Costs and expenses:* Cost of products sold: (excluding depreciation and amortization) Sulfur services 2,592 2,403 5,268 4,938 Terminalling and storage 10,209 7,036 19,860 11,604 Expenses: Operating expenses 23,446 19,590 44,826 37,958 Selling, general and administrative 7,498 7,285 16,306 15,965 MARTIN MIDSTREAM PARTNERS L.P. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) (Dollars in thousands) Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 Net income $ 6,606 $ (6,612 ) $ 18,084 $ (4,101 ) Changes in fair values of commodity cash flow hedges 167 — 167 — Commodity cash flow hedging (gains) losses reclassified to earnings 440 — (816 ) — Comprehensive income $ 7,213 $ (6,612 ) $ 17,435 $ (4,101 ) MARTIN MIDSTREAM PARTNERS L.P. CONSOLIDATED AND CONDENSED STATEMENTS OF CAPITAL (DEFICIT) (Unaudited) (Dollars in thousands) Partners’ Capital (Deficit) Common Limited General Partner Amount Accumulated Other Comprehensive Income (Loss) Units Amount Total Balances - January 1, 2021 38,851,174 $ (48,776 ) $ 1,905 $ — $ (46,871 ) Net income — (4,019 ) (82 ) — (4,101 ) Issuance of restricted units 42,168 — — — — Forfeiture of restricted units (83,436 ) — — — — Cash distributions — (388 ) (8 ) — (396 ) Unit-based compensation — 288 — — 288 Purchase of treasury units (7,156 ) (17 ) — — (17 ) Balances - June 30, 2021 38,802,750 $ (52,912 ) $ 1,815 $ — $ (51,097 ) Balances - January 1, 2022 38,802,750 $ (50,741 ) $ 1,888 $ 816 $ (48,037 ) Net income — 17,722 362 — 18,084 Issuance of restricted units 48,000 — — — — Cash distributions — (388 ) (8 ) — (396 ) Unit-based compensation — 79 — — 79 Gain reclassified from AOCI into income on commodity cash flow hedges — — — (816 ) (816 ) Gain recognized in AOCI on commodity cash flow hedges — — — 167 167 Excess purchase price over carrying value of acquired assets — 65 — — 65 Balances - June 30, 2022 38,850,750 $ (33,263 ) $ 2,242 $ 167 $ (30,854 ) MARTIN MIDSTREAM PARTNERS L.P. CONSOLIDATED AND CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in thousands) Six Months Ended June 30, 2022 2021 Cash flows from operating activities: Net income (loss) $ 18,084 $ (4,101 ) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 29,286 28,917 Amortization of deferred debt issuance costs 1,568 1,521 Deferred income tax expense 2,304 758 (Gain) loss on sale of property, plant and equipment, net (260 ) 671 Derivative (income) loss (734 ) 884 Net cash paid for commodity derivatives 85 (679 ) Non cash unit-based compensation 79 288 Change in current assets and liabilities, excluding effects of acquisitions and dispositions: Accounts and other receivables 10,714 (2,303 ) Inventories (55,725 ) (17,572 ) Due from affiliates (2,149 ) (5,812 ) Other current assets (17,741 ) 1,435 Trade and other accounts payable 37,688 3,335 Product exchange payables (869 ) 327 Due to affiliates 7,940 1,504 Income taxes payable 368 (248 ) Other accrued liabilities (2,332 ) (3,053 ) Change in other non-current assets and liabilities 145 213 Net cash provided by operating activities 28,451 6,085 Cash flows from investing activities: Payments for property, plant and equipment (14,634 ) (8,200 ) Payments for plant turnaround costs (1,600 ) (1,694 ) Proceeds from sale of property, plant and equipment 689 133 Net cash used in investing activities (15,545 ) (9,761 ) Cash flows from financing activities: Payments of long-term debt (217,589 ) (144,790 ) Payments under finance lease obligations (119 ) (2,591 ) Proceeds from long-term debt 206,500 147,500 Purchase of treasury units — (17 ) Payment of debt issuance costs (26 ) (307 ) Excess purchase price over carrying value of acquired assets (1,285 ) — Cash distributions paid (396 ) (396 ) Net cash used in financing activities (12,915 ) (601 ) Net increase (decrease) in cash (9 ) (4,277 ) Cash at beginning of period 52 4,958 Cash at end of period $ 43 $ 681 Non-cash additions to property, plant and equipment $ 1,705 $ 2,855 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, 2022 and 2021 Three Months Ended June 30, Variance Percent Change 2022 2021 (In thousands, except BBL per day) Revenues: Services $ 22,190 $ 20,358 $ 1,832 9 % Products 36,220 25,166 11,054 44 % Total revenues 58,410 45,524 12,886 28 % Cost of products sold 28,955 20,759 8,196 39 % Operating expenses 14,925 12,664 2,261 18 % Selling, general and administrative expenses 1,654 1,468 186 13 % Depreciation and amortization 7,731 6,996 735 11 % 5,145 3,637 1,508 41 % Other operating income, net 8 61 (53 ) (87 ) % Operating income $ 5,153 $ 3,698 $ 1,455 39 % Shore-based throughput volumes (guaranteed minimum) (gallons) 20,000 20,000 — — % Smackover refinery throughput volumes (guaranteed minimum BBL per day) 6,500 6,500 — — % Comparative Results of Operations for the Six Months Ended June 30, 2022 and 2021 Six Months Ended June 30, Variance Percent Change 2022 2021 (In thousands, except BBL per day) Revenues: Services $ 43,146 $ 40,317 $ 2,829 7 % Products 69,647 45,041 24,606 55 % Total revenues 112,793 85,358 27,435 32 % Cost of products sold 56,152 35,700 20,452 57 % Operating expenses 28,837 25,457 3,380 13 % Selling, general and administrative expenses 3,365 2,967 398 13 % Depreciation and amortization 15,337 14,101 1,236 9 % 9,102 7,133 1,969 28 % Other operating loss, net (35 ) (5 ) (30 ) (600 ) % Operating income $ 9,067 $ 7,128 $ 1,939 27 % Shore-based throughput volumes (guaranteed minimum) (gallons) 40,000 40,000 — — % Smackover refinery throughput volumes (guaranteed minimum) (BBL per day) 6,500 6,500 — — % Transportation Segment Comparative Results of Operations for the Three Months Ended June 30, 2022 and 2021 Three Months Ended June 30, Variance Percent Change 2022 2021 (In thousands) Revenues $ 60,902 $ 38,349 $ 22,553 59 % Operating expenses 44,528 31,485 13,043 41 % Selling, general and administrative expenses 1,788 1,858 (70 ) (4 ) % Depreciation and amortization 3,590 4,331 (741 ) (17 ) % 10,996 675 10,321 1,529 % Other operating income, net 254 21 233 1,110 % Operating income $ 11,250 $ 696 $ 10,554 1,516 % Comparative Results of Operations for the Six Months Ended June 30, 2022 and 2021 Six Months Ended June 30, Variance Percent Change 2022 2021 (In thousands) Revenues $ 112,799 $ 72,318 $ 40,481 56 % Operating expenses 83,730 60,989 22,741 37 % Selling, general and administrative expenses 3,958 3,658 300 8 % Depreciation and amortization 7,163 8,329 (1,166 ) (14 ) % $ 17,948 $ (658 ) $ 18,606 2,828 % Other operating income (loss), net 283 17 266 1,565 % Operating income $ 18,231 $ (641 ) $ 18,872 2,944 % Sulfur Services Segment Comparative Results of Operations for the Three Months Ended June 30, 2022 and 2021 Three Months Ended June 30, Variance Percent Change 2022 2021 (In thousands) Revenues: Services $ 3,084 $ 2,949 $ 135 5 % Products 53,869 35,337 18,532 52 % Total revenues 56,953 38,286 18,667 49 % Cost of products sold 39,181 25,397 13,784 54 % Operating expenses 4,227 2,804 1,423 51 % Selling, general and administrative expenses 1,537 1,215 322 27 % Depreciation and amortization 2,882 2,568 314 12 % 9,126 6,302 2,824 45 % Other operating income, net 8 6 2 33 % Operating income $ 9,134 $ 6,308 $ 2,826 45 % Sulfur (long tons) 118 146 (28 ) (19 ) % Fertilizer (long tons) 62 84 (22 ) (26 ) % Total sulfur services volumes (long tons) 180 230 (50 ) (22 ) % Comparative Results of Operations for the Six Months Ended June 30, 2022 and 2021 Six Months Ended June 30, Variance Percent Change 2022 2021 (In thousands) Revenues: Services $ 6,168 $ 5,899 $ 269 5 % Products 109,908 67,222 42,686 64 % Total revenues 116,076 73,121 42,955 59 % Cost of products sold 78,439 47,820 30,619 64 % Operating expenses 7,255 4,813 2,442 51 % Selling, general and administrative expenses 3,041 2,456 585 24 % Depreciation and amortization 5,591 5,288 303 6 % 21,750 12,744 9,006 71 % Other operating income, net 36 6 30 500 % Operating income $ 21,786 $ 12,750 $ 9,036 71 % Sulfur (long tons) 232 219 13 6 % Fertilizer (long tons) 146 179 (33 ) (18 ) % Total sulfur services volumes (long tons) 378 398 (20 ) (5 ) % Natural Gas Liquids Segment Comparative Results of Operations for the Three Months Ended June 30, 2022 and 2021 Three Months Ended June 30, Variance Percent Change 2022 2021 (In thousands) Products revenues $ 97,580 $ 67,232 $ 30,348 45 % Cost of products sold 94,898 64,176 30,722 48 % Operating expenses 1,121 1,061 60 6 % Selling, general and administrative expenses 597 697 (100 ) (14 ) % Depreciation and amortization 597 588 9 2 % 367 710 (343 ) (48 ) % Other operating income (loss), net (24 ) 1 (25 ) (2,500 ) % Operating income $ 343 $ 711 $ (368 ) (52 ) % NGL sales volumes (Bbls) 1,153 1,259 (106 ) (8 ) % Comparative Results of Operations for the Six Months Ended June 30, 2022 and 2021 Six Months Ended June 30, Variance Percent Change 2022 2021 (In thousands) Products revenues $ 218,146 $ 165,317 $ 52,829 32 % Cost of products sold 206,054 146,688 59,366 40 % Operating expenses 2,187 2,056 131 6 % Selling, general and administrative expenses 2,319 2,904 (585 ) (20 ) % Depreciation and amortization 1,195 1,199 (4 ) — % 6,391 12,470 (6,079 ) (49 ) % Other operating loss, net (24 ) (689 ) 665 97 % Operating income $ 6,367 $ 11,781 $ (5,414 ) (46 ) % NGL sales volumes (Bbls) 2,750 3,404 (654 ) (19 ) % Unallocated Selling, General and Administrative Expenses Comparative Results of Operations for the Three and Six Months Ended June 30, 2022 and 2021 Three Months Ended June 30, Variance Percent Change Six Months Ended June 30, Variance Percent Change 2022 2021 2022 2021 (In thousands) (In thousands) Indirect selling, general and administrative expenses $ 4,390 $ 3,780 $ 610 16 % $ 8,512 $ 7,699 $ 813 11 % Non-GAAP Financial Measures The following tables reconcile the non-GAAP financial measurements used by management to our most directly comparable GAAP measures for the three and six months ended June 30, 2022 and 2021, which represents EBITDA, Adjusted EBITDA, Distributable Cash Flow, and Adjusted Free Cash Flow: Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 (in thousands) (in thousands) Net income 6,606 (6,612 ) 18,084 (4,101 ) Adjustments: Interest expense 12,846 13,309 25,275 26,262 Income tax expense 2,037 935 3,578 1,157 Depreciation and amortization 14,800 14,483 29,286 28,917 EBITDA 36,289 22,115 76,223 52,235 Adjustments: (Gain) loss on disposition of property, plant and equipment (246 ) (89 ) (260 ) 671 Unrealized mark-to-market on commodity derivatives — 424 — 205 Lower of cost or market and other non-cash adjustments 2,242 — 2,242 — Unit-based compensation 45 48 79 288 Adjusted EBITDA 38,330 22,498 78,284 53,399 Reconciliation of Net Cash provided by Operating Activities to Adjusted EBITDA, Distributable Cash Flow, and Adjusted Free Cash Flow Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 (in thousands) (in thousands) Net cash provided by operating activities $ (2,494 ) $ 2,231 $ 28,451 $ 6,085 Interest expense 1 12,061 12,543 23,707 24,741 Current income tax expense 654 252 1,274 399 Lower of cost or market and other non-cash adjustments 2,242 — 2,242 — Commodity cash flow hedging gains reclassified to earnings (82 ) — 734 — Net cash paid for closed commodity derivative positions included in AOCI (700 ) — (85 ) — Changes in operating assets and liabilities which (provided) used cash: Accounts and other receivables, inventories, and other current assets 68,797 20,065 64,901 24,252 Trade, accounts and other payables, and other current liabilities (41,182 ) (12,468 ) (42,795 ) (1,865 ) Other (966 ) (125 ) (145 ) (213 ) Adjusted EBITDA 38,330 22,498 78,284 53,399 Adjustments: Interest expense (12,846 ) (13,309 ) (25,275 ) (26,262 ) Income tax expense (2,037 ) (935 ) (3,578 ) (1,157 ) Deferred income taxes 1,383 683 2,304 758 Amortization of deferred debt issuance costs 785 766 1,568 1,521 Payments for plant turnaround costs (165 ) (20 ) (1,600 ) (1,694 ) Maintenance capital expenditures (3,155 ) (2,370 ) (8,554 ) (6,441 ) Distributable Cash Flow 22,295 7,313 43,149 20,124 Principal payments under finance lease obligations (60 ) (160 ) (119 ) (2,591 ) Expansion capital expenditures (1,455 ) (1,147 ) (4,556 ) (1,977 ) Adjusted Free Cash Flow $ 20,780 $ 6,006 $ 38,474 $ 15,556 1 Net of amortization of debt issuance costs and discount, which are included in interest expense but not included in net cash provided by operating activities. 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