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 2024 Financial Results and Declares Quarterly Cash Distribution By: Martin Midstream Partners L.P. via Business Wire July 17, 2024 at 16:01 PM EDT Net income of $3.8 million and $7.1 million for the three and six months ended June 30, 2024, respectively Adjusted EBITDA of $31.7 million and $62.1 million for the three and six months ended June 30, 2024, respectively Total adjusted leverage of 3.88 times as of June 30, 2024 Declares quarterly cash dividend of $0.005 per common unit Martin Midstream Partners L.P. (Nasdaq: MMLP) (“MMLP” or the “Partnership”) today announced its financial results for the second quarter of 2024. Bob Bondurant, President and Chief Executive Officer of Martin Midstream GP LLC, the general partner of the Partnership, stated, “For the second quarter of 2024, the Partnership exceeded guidance by $0.5 million with adjusted EBITDA of $31.7 million compared to guidance of $31.2 million. Within our Transportation Services segment the land division continued to outperform projections assisted by higher than forecasted mileage along with lower maintenance expense. The marine division, however, was negatively impacted by a casualty loss reserve of $0.5 million from a bridge allision that occurred in May. The marine division also experienced lower fleet utilization this quarter as a result of both the allision and extended time of equipment in dry dock for regulatory inspection compared to forecasted duration.” “The Sulfur Services segment results were above guidance as the division benefited from strong fertilizer margins and high sulfur production from the Gulf Coast refineries. Results in the Specialty Products segment were in line with guidance as strength in our grease division offset underperformance by the packaged lubricants business. Finally, the Terminalling and Storage segment results were below guidance as a direct result of a $1.5 million casualty loss reserve related to the previously announced crude oil spill from a crude pipeline that connects our Sandyland Terminal to the Smackover refinery.” SECOND QUARTER 2024 OPERATING RESULTS BY BUSINESS SEGMENT Operating Income (Loss) ($M) Adjusted EBITDA, After Giving Effect to the Exit of the Butane Optimization Business ($M) Adjusted EBITDA ($M) Three Months Ended June 30, 2024 2023 2024 2023 2024 2023 (Amounts may not add or recalculate due to rounding) Business Segment: Terminalling and Storage $ 3.3 $ 4.4 $ 8.0 $ 9.6 $ 8.0 $ 9.6 Transportation 8.0 9.0 11.2 12.1 11.2 12.1 Sulfur Services 7.5 5.3 10.6 8.0 10.6 8.0 Specialty Products 4.9 2.5 5.7 5.9 5.7 (0.4 ) Unallocated Selling, General and Administrative Expense (3.8 ) (3.9 ) (3.8 ) (3.9 ) (3.8 ) (3.9 ) $ 19.9 $ 17.3 $ 31.7 $ 31.8 $ 31.7 $ 25.5 Terminalling and storage adjusted EBITDA decreased $1.6 million, primarily reflecting the $1.5 million casualty loss reserve related to the crude oil spill from a crude pipeline that connects our Sandyland Terminal to the Smackover refinery. This casualty loss reserve was coupled with higher employee-related expenses across our divisions, offset by increased throughput in our shore-based terminals and underground NGL storage divisions. Transportation adjusted EBITDA decreased $0.9 million, reflecting higher expenses in our marine division related to a casualty loss reserve of $0.5 million stemming from a bridge allision that occurred in May. This was coupled with lower fleet utilization as a result of both the allision and an acceleration of equipment into dry dock for regulatory inspection. Our marine division was positively impacted during the quarter by higher day rates. The land division experienced increased operating expenses, offset by increased mileage and transportation rates. Sulfur services adjusted EBITDA increased $2.6 million, primarily reflecting increased fertilizer margins and high sulfur production from the Gulf Coast refineries. Specialty products adjusted EBITDA, after giving effect to the exit of the butane optimization business, decreased $0.2 million, reflecting decreased margins in our NGL marketing business, offset by higher margins in our grease division. Unallocated selling, general, and administrative expense decreased $0.1 million, reflecting reduced overhead expenses allocated from Martin Resource Management. CAPITALIZATION June 30, 2024 December 31, 2023 ($ in millions) Debt Outstanding: Revolving Credit Facility, Due February 2027 1 $ 58.0 $ 42.5 Finance lease obligations 0.1 — 11.50% Senior Secured Notes, Due February 2028 400.0 400.0 Total Debt Outstanding: $ 458.1 $ 442.5 Summary Credit Metrics: Revolving Credit Facility - Total Capacity $ 150.0 $ 175.0 Revolving Credit Facility - Available Liquidity $ 82.9 $ 109.0 Total Adjusted Leverage Ratio 2 3.88x 3.75x Senior Leverage Ratio 2 0.49x 0.36x Interest Coverage Ratio 2 2.24x 2.19x 1 The Partnership was in compliance with all debt covenants as of June 30, 2024 and December 31, 2023. 2 As calculated under the Partnership's revolving credit facility. RESULTS OF OPERATIONS SUMMARY (in millions, except per unit amounts) Period Net Income Net Income Per Unit Adjusted EBITDA Adjusted EBITDA, After Giving Effect to the Exit of the Butane Optimization Business Net Cash Provided by Operating Activities Distributable Cash Flow Revenues Three Months Ended June 30, 2024 $ 3.8 $ 0.09 $ 31.7 $ 31.7 $ 11.8 $ 9.5 $ 184.5 Three Months Ended June 30, 2023 $ 1.1 $ 0.03 $ 25.5 $ 31.8 $ 49.5 $ 9.7 $ 195.6 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 2024 to the Partnership's adjusted EBITDA guidance for the second quarter 2024. QUARTERLY CASH DISTRIBUTION The Partnership has declared a quarterly cash distribution of $0.005 per unit for the quarter ended June 30, 2024. The distribution is payable on August 14, 2024 to common unitholders of record as of the close of business on August 7, 2024. The ex-dividend date for the cash distribution is August 7, 2024. Qualified Notice to Nominees This release is intended to serve as qualified notice under Treasury Regulation Section 1.1446-4(b)(4) and (d). Brokers and nominees should treat one hundred percent (100%) of MMLP’s distributions to non-U.S. investors as being attributable to income that is effectively connected with a United States trade or business. Accordingly, MMLP’s distributions to non-U.S. investors are subject to federal income tax withholding at the highest applicable effective tax rate. For purposes of Treasury Regulation section 1.1446(f)-4(c)(2)(iii), brokers and nominees should treat one hundred percent (100%) of the distributions as being in excess of cumulative net income for purposes of determining the amount to withhold. Nominees, and not Martin Midstream Partners L.P., are treated as withholding agents responsible for any necessary withholding on amounts received by them on behalf of foreign investors. Investors' Conference Call Date: Thursday, July 18, 2024 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 2024 Earnings Summary 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 Martin Midstream Partners LP, 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, and storage 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) marketing, distribution, and transportation services for natural gas liquids and blending and packaging services for specialty lubricants and grease. To learn more, visit www.MMLP.com. Follow Martin Midstream Partners L.P. on LinkedIn, Facebook, and X (formerly known as Twitter). 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 effects of the continued volatility of commodity prices and the related macroeconomic and political environment and (ii) 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 management in assessing our business, we use 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"). Our management uses a variety of financial and operational measurements other than our financial statements prepared in accordance with U.S. GAAP to analyze our 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. We define 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 our management and by external users of our financial statements, such as investors, commercial banks, research analysts, and others, to assess: the financial performance of our assets without regard to financing methods, capital structure, or historical cost basis; the ability of our assets to generate cash sufficient to pay interest costs, support our indebtedness, and make cash distributions to our unitholders; and our 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 we have borrowed money to finance our operations, interest expense is a necessary element of our costs and our ability to generate cash available for distribution. Because we have capital assets, depreciation and amortization are also necessary elements of our costs. Therefore, any measures that exclude these elements have material limitations. To compensate for these limitations, we believe 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 our overall performance. Distributable cash flow and adjusted free cash flow. We define 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 our management and by external users of our financial statements, such as investors, commercial banks and research analysts, to compare basic cash flows generated by us to the cash distributions we expect to pay unitholders. Distributable cash flow is also an important financial measure for our unitholders since it serves as an indicator of our success in providing a cash return on investment. Specifically, this financial measure indicates to investors whether or not we are generating cash flow at a level that can sustain or support an increase in our 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. We define 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 our management and by external users of our 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. We believe 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. Our 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, we believe 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 our overall liquidity. MMLP-F MARTIN MIDSTREAM PARTNERS L.P. CONSOLIDATED AND CONDENSED BALANCE SHEETS (Dollars in thousands) June 30, 2024 December 31, 2023 (Unaudited) (Audited) Assets Cash $ 55 $ 54 Accounts and other receivables, less allowance for doubtful accounts of $506 and $530, respectively 50,910 53,293 Inventories 41,597 43,822 Due from affiliates 22,151 7,924 Other current assets 10,284 9,220 Total current assets 124,997 114,313 Property, plant and equipment, at cost 939,570 918,786 Accumulated depreciation (631,219 ) (612,993 ) Property, plant and equipment, net 308,351 305,793 Goodwill 16,671 16,671 Right-of-use assets 63,768 60,359 Investment in DSM Semichem LLC 7,938 — Deferred income taxes, net 10,174 10,200 Other assets, net 3,179 2,039 Total assets $ 535,078 $ 509,375 Liabilities and Partners’ Capital (Deficit) Current installments of long-term debt and finance lease obligations $ 14 $ — Trade and other accounts payable 51,874 51,653 Product exchange payables — 426 Due to affiliates 3,269 6,334 Income taxes payable 1,374 652 Other accrued liabilities 42,178 41,499 Total current liabilities 98,709 100,564 Long-term debt, net 439,397 421,173 Finance lease obligations 62 — Operating lease liabilities 47,187 45,684 Other long-term obligations 7,589 6,578 Total liabilities 592,944 573,999 Commitments and contingencies Partners’ capital (deficit) (57,866 ) (64,624 ) Total liabilities and partners' capital (deficit) $ 535,078 $ 509,375 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, 2024 2023 2024 2023 Revenues: Terminalling and storage * $ 22,375 $ 21,684 $ 44,892 $ 42,542 Transportation * 57,676 54,750 115,983 110,473 Sulfur services 3,477 3,357 6,954 6,715 Product sales: * Specialty products 67,288 78,872 133,613 211,141 Sulfur services 33,715 36,973 63,919 69,294 101,003 115,845 197,532 280,435 Total revenues 184,531 195,636 365,361 440,165 Costs and expenses: Cost of products sold: (excluding depreciation and amortization) Specialty products * 57,553 71,570 114,783 189,565 Sulfur services * 19,234 25,654 39,633 47,471 Terminalling and storage * 24 25 42 31 76,811 97,249 154,458 237,067 Expenses: Operating expenses * 65,358 60,737 129,292 123,482 Selling, general and administrative * 10,701 8,447 19,614 19,619 Depreciation and amortization 12,687 12,547 25,336 25,448 Total costs and expenses 165,557 178,980 328,700 405,616 Other operating income (loss), net 953 673 1,161 285 Operating income 19,927 17,329 37,822 34,834 Other income (expense): Interest expense, net (14,377 ) (15,263 ) (28,219 ) (30,920 ) Loss on extinguishment of debt — — — (5,121 ) Other, net 2 11 18 33 Total other expense (14,375 ) (15,252 ) (28,201 ) (36,008 ) Net income (loss) before taxes 5,552 2,077 9,621 (1,174 ) Income tax expense (1,772 ) (996 ) (2,568 ) (2,831 ) Net income (loss) 3,780 1,081 7,053 (4,005 ) Less general partner's interest in net income (loss) (76 ) (22 ) (141 ) 80 Less income (loss) allocable to unvested restricted units (16 ) (4 ) (28 ) 12 Limited partners' interest in net income (loss) $ 3,688 $ 1,055 $ 6,884 $ (3,913 ) Net income (loss) per unit attributable to limited partners - basic and diluted $ 0.09 $ 0.03 $ 0.18 $ (0.10 ) Weighted average limited partner units - basic 38,832,222 38,772,266 38,833,039 38,771,037 Weighted average limited partner units - diluted 38,891,375 38,777,600 38,872,192 38,771,037 *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, 2024 2023 2024 2023 Revenues:* Terminalling and storage $ 18,078 $ 18,077 $ 36,627 $ 35,579 Transportation 8,318 7,277 16,919 12,788 Product Sales 123 7,497 252 8,422 Costs and expenses:* Cost of products sold: (excluding depreciation and amortization) Specialty products 8,368 7,918 14,941 17,428 Sulfur services 2,919 2,644 5,912 5,352 Terminalling and storage 24 25 42 31 Expenses: Operating expenses 26,501 25,058 52,924 48,885 Selling, general and administrative 8,638 6,556 15,501 15,072 MARTIN MIDSTREAM PARTNERS L.P. CONSOLIDATED AND CONDENSED STATEMENTS OF CAPITAL (DEFICIT) (Unaudited) (Dollars in thousands) Partners’ Capital (Deficit) Common Limited General Partner Amount Units Amount Total Balances - March 31, 2024 39,001,086 $ (63,115 ) $ 1,619 $ (61,496 ) Net income — 3,704 76 3,780 Cash distributions — (195 ) (4 ) (199 ) Unit-based compensation — 49 — 49 Balances - June 30, 2024 39,001,086 (59,557 ) 1,691 (57,866 ) Balances - December 31, 2023 38,914,806 $ (66,182 ) $ 1,558 $ (64,624 ) Net income — 6,912 141 7,053 Issuance of restricted units 86,280 — — — Cash distributions — (390 ) (8 ) (398 ) Unit-based compensation — 103 — 103 Balances - June 30, 2024 39,001,086 $ (59,557 ) $ 1,691 $ (57,866 ) Partners’ Capital (Deficit) Common Limited General Partner Amount Units Amount Total Balances - March 31, 2023 38,914,806 $ (66,236 ) $ 1,559 $ (64,677 ) Net income — 1,059 22 1,081 Cash distributions — (195 ) (4 ) (199 ) Unit-based compensation — 38 — 38 Balances - June 30, 2023 38,914,806 (65,334 ) 1,577 (63,757 ) Balances - December 31, 2022 38,850,750 $ (61,110 ) $ 1,665 $ (59,445 ) Net loss — (3,925 ) (80 ) (4,005 ) Issuance of restricted units 64,056 — — — Cash distributions — (389 ) (8 ) (397 ) Unit-based compensation — 90 — 90 Balances - June 30, 2023 38,914,806 $ (65,334 ) $ 1,577 $ (63,757 ) MARTIN MIDSTREAM PARTNERS L.P. CONSOLIDATED AND CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in thousands) Six Months Ended June 30, 2024 2023 Cash flows from operating activities: Net income (loss) $ 7,053 $ (4,005 ) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 25,336 25,448 Amortization of deferred debt issuance costs 1,539 2,435 Amortization of debt discount 1,200 1,000 Deferred income tax expense 26 1,867 Gain on disposition or sale of property, plant and equipment, net (1,161 ) (285 ) Loss on extinguishment of debt — 5,121 Non cash unit-based compensation 103 90 Change in current assets and liabilities, excluding effects of acquisitions and dispositions: Accounts and other receivables 2,383 22,619 Inventories 2,031 58,933 Due from affiliates (14,227 ) 5,654 Other current assets 174 5,296 Trade and other accounts payable 523 (19,459 ) Product exchange payables (426 ) 278 Due to affiliates (3,065 ) (6,641 ) Income taxes payable 722 (215 ) Other accrued liabilities (1,196 ) 1,907 Change in other non-current assets and liabilities 922 (1,269 ) Net cash provided by operating activities 21,937 98,774 Cash flows from investing activities: Payments for property, plant and equipment (24,194 ) (17,024 ) Payments for plant turnaround costs (6,705 ) (661 ) Investment in DSM Semichem LLC (6,938 ) — Proceeds from sale of property, plant and equipment 738 4,275 Net cash used in investing activities (37,099 ) (13,410 ) Cash flows from financing activities: Payments of long-term debt (113,000 ) (519,197 ) Payments under finance lease obligations (1 ) (9 ) Proceeds from long-term debt 128,577 448,489 Payment of debt issuance costs (15 ) (14,238 ) Cash distributions paid (398 ) (397 ) Net cash provided by (used in) financing activities 15,163 (85,352 ) Net increase in cash 1 12 Cash at beginning of period 54 45 Cash at end of period $ 55 $ 57 Non-cash additions to property, plant and equipment $ 2,641 $ 1,679 Non-cash contribution of land to DSM Semichem LLC $ 1,000 $ — 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, 2024 and 2023 Three Months Ended June 30, Variance Percent Change 2024 2023 (In thousands, except BBL per day) Revenues $ 24,402 $ 23,906 $ 496 2 % Cost of products sold 24 25 (1 ) (4 )% Operating expenses 15,522 13,932 1,590 11 % Selling, general and administrative expenses 820 333 487 146 % Depreciation and amortization 5,729 5,195 534 10 % 2,307 4,421 (2,114 ) (48 )% Other operating income, net 995 25 970 3,880 % Operating income $ 3,302 $ 4,446 $ (1,144 ) (26 )% Shore-based throughput volumes (gallons) 42,491 42,434 57 — % Smackover refinery throughput volumes (guaranteed minimum BBL per day) 6,500 6,500 — — % Comparative Results of Operations for the Six Months Ended June 30, 2024 and 2023 Six Months Ended June 30, Variance Percent Change 2024 2023 (In thousands, except BBL per day) Revenues $ 48,687 $ 47,825 $ 862 2 % Cost of products sold 42 31 11 35 % Operating expenses 30,557 28,240 2,317 8 % Selling, general and administrative expenses 1,102 882 220 25 % Depreciation and amortization 11,124 10,794 330 3 % 5,862 7,878 (2,016 ) (26 )% Other operating income (loss), net 1,097 (324 ) 1,421 439 % Operating income $ 6,959 $ 7,554 $ (595 ) (8 )% Shore-based throughput volumes (gallons) 88,260 85,783 2,477 3 % 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, 2024 and 2023 Three Months Ended June 30, Variance Percent Change 2024 2023 (In thousands) Revenues $ 61,467 $ 58,395 $ 3,072 5 % Operating expenses 47,783 44,285 3,498 8 % Selling, general and administrative expenses 2,527 1,981 546 28 % Depreciation and amortization 3,381 3,760 (379 ) (10 )% 7,776 8,369 (593 ) (7 )% Other operating income, net 260 647 (387 ) (60 )% Operating income $ 8,036 $ 9,016 $ (980 ) (11 )% Comparative Results of Operations for the Six Months Ended June 30, 2024 and 2023 Six Months Ended June 30, Variance Percent Change 2024 2023 (In thousands) Revenues $ 123,509 $ 120,334 $ 3,175 3 % Operating expenses 94,424 90,475 3,949 4 % Selling, general and administrative expenses 4,727 4,530 197 4 % Depreciation and amortization 6,857 7,522 (665 ) (9 )% $ 17,501 $ 17,807 $ (306 ) (2 )% Other operating income, net 366 651 (285 ) (44 )% Operating income $ 17,867 $ 18,458 $ (591 ) (3 )% Sulfur Services Segment Comparative Results of Operations for the Three Months Ended June 30, 2024 and 2023 Three Months Ended June 30, Variance Percent Change 2024 2023 (In thousands) Revenues: Services $ 3,477 $ 3,357 $ 120 4 % Products 33,716 36,973 (3,257 ) (9 )% Total revenues 37,193 40,330 (3,137 ) (8 )% Cost of products sold 22,183 28,141 (5,958 ) (21 )% Operating expenses 2,744 3,186 (442 ) (14 )% Selling, general and administrative expenses 1,717 962 755 78 % Depreciation and amortization 2,778 2,756 22 1 % 7,771 5,285 2,486 47 % Other operating income (loss), net (308 ) 1 (309 ) (30,900 )% Operating income $ 7,463 $ 5,286 $ 2,177 41 % Sulfur (long tons) 91 123 (32 ) (26 )% Fertilizer (long tons) 64 73 (9 ) (12 )% Total sulfur services volumes (long tons) 155 196 (41 ) (21 )% Comparative Results of Operations for the Six Months Ended June 30, 2024 and 2023 Six Months Ended June 30, Variance Percent Change 2024 2023 (In thousands) Revenues: Services $ 6,954 $ 6,715 $ 239 4 % Products 63,920 69,294 (5,374 ) (8 )% Total revenues 70,874 76,009 (5,135 ) (7 )% Cost of products sold 44,954 52,090 (7,136 ) (14 )% Operating expenses 5,684 6,085 (401 ) (7 )% Selling, general and administrative expenses 3,020 2,579 441 17 % Depreciation and amortization 5,760 5,433 327 6 % 11,456 9,822 1,634 17 % Other operating income (loss), net (308 ) 17 (325 ) (1,912 )% Operating income $ 11,148 $ 9,839 $ 1,309 13 % Sulfur (long tons) 182 197 (15 ) (8 )% Fertilizer (long tons) 136 134 2 1 % Total sulfur services volumes (long tons) 318 331 (13 ) (4 )% Specialty Products Segment Comparative Results of Operations for the Three Months Ended June 30, 2024 and 2023 Three Months Ended June 30, Variance Percent Change 2024 2023 (In thousands) Products revenues $ 67,317 $ 78,898 $ (11,581 ) (15 )% Cost of products sold 59,711 74,270 (14,559 ) (20 )% Operating expenses 26 18 8 44 % Selling, general and administrative expenses 1,842 1,299 543 42 % Depreciation and amortization 799 836 (37 ) (4 )% 4,939 2,475 2,464 100 % Other operating income, net 6 — 6 Operating income $ 4,945 $ 2,475 $ 2,470 100 % NGL sales volumes (Bbls) 540 827 (287 ) (35 )% Other specialty products volumes (Bbls) 93 90 3 3 % Total specialty products volumes (Bbls) 633 917 (284 ) (31 )% Comparative Results of Operations for the Six Months Ended June 30, 2024 and 2023 Six Months Ended June 30, Variance Percent Change 2024 2023 (In thousands) Products revenues $ 133,663 $ 211,175 $ (77,512 ) (37 )% Cost of products sold 119,355 198,721 (79,366 ) (40 )% Operating expenses 51 32 19 59 % Selling, general and administrative expenses 3,165 3,589 (424 ) (12 )% Depreciation and amortization 1,595 1,699 (104 ) (6 )% 9,497 7,134 2,363 33 % Other operating income (loss), net 6 (59 ) 65 110 % Operating income $ 9,503 $ 7,075 $ 2,428 34 % NGL sales volumes (Bbls) 1,162 2,518 (1,356 ) (54 )% Other specialty products volumes (Bbls) 172 174 (2 ) (1 )% Total specialty products volumes (Bbls) 1,334 2,692 (1,358 ) (50 )% Unallocated Selling, General and Administrative Expenses Comparative Results of Operations for the Three and Six Months Ended June 30, 2024 and 2023 Three Months Ended June 30, Variance Percent Change Six Months Ended June 30, Variance Percent Change 2024 2023 2024 2023 (In thousands) (In thousands) Indirect selling, general and administrative expenses $ 3,819 $ 3,894 $ (75 ) (2 )% $ 7,655 $ 8,092 $ (437 ) (5 )% 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, 2024 and 2023, which represents EBITDA, adjusted EBITDA, adjusted EBITDA after giving effect to the exit of the butane optimization business, distributable cash flow, and adjusted free cash flow: Reconciliation of Net Income (Loss) to EBITDA, Adjusted EBITDA, and Adjusted EBITDA After Giving Effect to the Exit of the Butane Optimization Business Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 (in thousands) (in thousands) Net income (loss) $ 3,780 $ 1,081 $ 7,053 $ (4,005 ) Adjustments: Interest expense 14,377 15,263 28,219 30,920 Income tax expense 1,772 996 2,568 2,831 Depreciation and amortization 12,687 12,547 25,336 25,448 EBITDA 32,616 29,887 63,176 55,194 Adjustments: Gain on disposition or sale of property, plant and equipment (953 ) (673 ) (1,161 ) (285 ) Loss on extinguishment of debt — — — 5,121 Lower of cost or net realizable value and other non-cash adjustments — (3,717 ) — (12,850 ) Unit-based compensation 49 38 103 90 Adjusted EBITDA $ 31,712 $ 25,535 $ 62,118 $ 47,270 Adjustments: Less: net loss associated with butane optimization business — 2,564 — 2,255 Plus: lower of cost or net realizable value and other non-cash adjustments — $ 3,717 — 12,850 Adjusted EBITDA after giving effect to the exit of the butane optimization business $ 31,712 $ 31,816 $ 62,118 $ 62,375 Reconciliation of Net Cash Provided by Operating Activities to Adjusted EBITDA, Adjusted EBITDA After Giving Effect to the Exit of the Butane Optimization Business, Distributable Cash Flow, and Adjusted Free Cash Flow Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 (in thousands) (in thousands) Net cash provided by operating activities $ 11,828 $ 49,510 $ 21,937 $ 98,774 Interest expense 1 13,004 13,903 25,480 27,485 Current income tax expense 1,420 306 2,542 964 Lower of cost or net realizable value and other non-cash adjustments — (3,717 ) — (12,850 ) Changes in operating assets and liabilities which (provided) used cash: Accounts and other receivables, inventories, and other current assets 9,919 (43,135 ) 9,639 (91,517 ) Trade, accounts and other payables, and other current liabilities (3,786 ) 7,171 3,442 23,145 Other (673 ) 1,497 (922 ) 1,269 Adjusted EBITDA 31,712 25,535 62,118 47,270 Adjustments: Less: net loss associated with butane optimization business — 2,564 — 2,255 Plus: lower of cost or net realizable value and other non-cash adjustments — 3,717 — 12,850 Adjusted EBITDA after giving effect to the exit of the butane optimization business 31,712 31,816 62,118 62,375 Adjustments: Interest expense (14,377 ) (15,263 ) (28,219 ) (30,920 ) Income tax expense (1,772 ) (996 ) (2,568 ) (2,831 ) Deferred income taxes 352 690 26 1,867 Amortization of debt discount 600 600 1,200 1,000 Amortization of deferred debt issuance costs 773 760 1,539 2,435 Payments for plant turnaround costs (745 ) (432 ) (6,705 ) (661 ) Maintenance capital expenditures (7,009 ) (7,438 ) (12,211 ) (14,072 ) Distributable cash flow 9,534 9,737 15,180 19,193 Principal payments under finance lease obligations (1 ) (3 ) (1 ) (9 ) Investment in DSM Semichem LLC (6,938 ) — (6,938 ) — Expansion capital expenditures �� (5,450 ) (1,925 ) (11,681 ) (2,682 ) Adjusted free cash flow $ (2,855 ) $ 7,809 $ (3,440 ) $ 16,502 1 Net of amortization of debt issuance costs and discount, which are included in interest expense but not included in net cash provided by (used in) operating activities. View source version on businesswire.com: https://www.businesswire.com/news/home/20240717514885/en/Contacts Sharon Taylor - Executive 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 2024 Financial Results and Declares Quarterly Cash Distribution By: Martin Midstream Partners L.P. via Business Wire July 17, 2024 at 16:01 PM EDT Net income of $3.8 million and $7.1 million for the three and six months ended June 30, 2024, respectively Adjusted EBITDA of $31.7 million and $62.1 million for the three and six months ended June 30, 2024, respectively Total adjusted leverage of 3.88 times as of June 30, 2024 Declares quarterly cash dividend of $0.005 per common unit Martin Midstream Partners L.P. (Nasdaq: MMLP) (“MMLP” or the “Partnership”) today announced its financial results for the second quarter of 2024. Bob Bondurant, President and Chief Executive Officer of Martin Midstream GP LLC, the general partner of the Partnership, stated, “For the second quarter of 2024, the Partnership exceeded guidance by $0.5 million with adjusted EBITDA of $31.7 million compared to guidance of $31.2 million. Within our Transportation Services segment the land division continued to outperform projections assisted by higher than forecasted mileage along with lower maintenance expense. The marine division, however, was negatively impacted by a casualty loss reserve of $0.5 million from a bridge allision that occurred in May. The marine division also experienced lower fleet utilization this quarter as a result of both the allision and extended time of equipment in dry dock for regulatory inspection compared to forecasted duration.” “The Sulfur Services segment results were above guidance as the division benefited from strong fertilizer margins and high sulfur production from the Gulf Coast refineries. Results in the Specialty Products segment were in line with guidance as strength in our grease division offset underperformance by the packaged lubricants business. Finally, the Terminalling and Storage segment results were below guidance as a direct result of a $1.5 million casualty loss reserve related to the previously announced crude oil spill from a crude pipeline that connects our Sandyland Terminal to the Smackover refinery.” SECOND QUARTER 2024 OPERATING RESULTS BY BUSINESS SEGMENT Operating Income (Loss) ($M) Adjusted EBITDA, After Giving Effect to the Exit of the Butane Optimization Business ($M) Adjusted EBITDA ($M) Three Months Ended June 30, 2024 2023 2024 2023 2024 2023 (Amounts may not add or recalculate due to rounding) Business Segment: Terminalling and Storage $ 3.3 $ 4.4 $ 8.0 $ 9.6 $ 8.0 $ 9.6 Transportation 8.0 9.0 11.2 12.1 11.2 12.1 Sulfur Services 7.5 5.3 10.6 8.0 10.6 8.0 Specialty Products 4.9 2.5 5.7 5.9 5.7 (0.4 ) Unallocated Selling, General and Administrative Expense (3.8 ) (3.9 ) (3.8 ) (3.9 ) (3.8 ) (3.9 ) $ 19.9 $ 17.3 $ 31.7 $ 31.8 $ 31.7 $ 25.5 Terminalling and storage adjusted EBITDA decreased $1.6 million, primarily reflecting the $1.5 million casualty loss reserve related to the crude oil spill from a crude pipeline that connects our Sandyland Terminal to the Smackover refinery. This casualty loss reserve was coupled with higher employee-related expenses across our divisions, offset by increased throughput in our shore-based terminals and underground NGL storage divisions. Transportation adjusted EBITDA decreased $0.9 million, reflecting higher expenses in our marine division related to a casualty loss reserve of $0.5 million stemming from a bridge allision that occurred in May. This was coupled with lower fleet utilization as a result of both the allision and an acceleration of equipment into dry dock for regulatory inspection. Our marine division was positively impacted during the quarter by higher day rates. The land division experienced increased operating expenses, offset by increased mileage and transportation rates. Sulfur services adjusted EBITDA increased $2.6 million, primarily reflecting increased fertilizer margins and high sulfur production from the Gulf Coast refineries. Specialty products adjusted EBITDA, after giving effect to the exit of the butane optimization business, decreased $0.2 million, reflecting decreased margins in our NGL marketing business, offset by higher margins in our grease division. Unallocated selling, general, and administrative expense decreased $0.1 million, reflecting reduced overhead expenses allocated from Martin Resource Management. CAPITALIZATION June 30, 2024 December 31, 2023 ($ in millions) Debt Outstanding: Revolving Credit Facility, Due February 2027 1 $ 58.0 $ 42.5 Finance lease obligations 0.1 — 11.50% Senior Secured Notes, Due February 2028 400.0 400.0 Total Debt Outstanding: $ 458.1 $ 442.5 Summary Credit Metrics: Revolving Credit Facility - Total Capacity $ 150.0 $ 175.0 Revolving Credit Facility - Available Liquidity $ 82.9 $ 109.0 Total Adjusted Leverage Ratio 2 3.88x 3.75x Senior Leverage Ratio 2 0.49x 0.36x Interest Coverage Ratio 2 2.24x 2.19x 1 The Partnership was in compliance with all debt covenants as of June 30, 2024 and December 31, 2023. 2 As calculated under the Partnership's revolving credit facility. RESULTS OF OPERATIONS SUMMARY (in millions, except per unit amounts) Period Net Income Net Income Per Unit Adjusted EBITDA Adjusted EBITDA, After Giving Effect to the Exit of the Butane Optimization Business Net Cash Provided by Operating Activities Distributable Cash Flow Revenues Three Months Ended June 30, 2024 $ 3.8 $ 0.09 $ 31.7 $ 31.7 $ 11.8 $ 9.5 $ 184.5 Three Months Ended June 30, 2023 $ 1.1 $ 0.03 $ 25.5 $ 31.8 $ 49.5 $ 9.7 $ 195.6 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 2024 to the Partnership's adjusted EBITDA guidance for the second quarter 2024. QUARTERLY CASH DISTRIBUTION The Partnership has declared a quarterly cash distribution of $0.005 per unit for the quarter ended June 30, 2024. The distribution is payable on August 14, 2024 to common unitholders of record as of the close of business on August 7, 2024. The ex-dividend date for the cash distribution is August 7, 2024. Qualified Notice to Nominees This release is intended to serve as qualified notice under Treasury Regulation Section 1.1446-4(b)(4) and (d). Brokers and nominees should treat one hundred percent (100%) of MMLP’s distributions to non-U.S. investors as being attributable to income that is effectively connected with a United States trade or business. Accordingly, MMLP’s distributions to non-U.S. investors are subject to federal income tax withholding at the highest applicable effective tax rate. For purposes of Treasury Regulation section 1.1446(f)-4(c)(2)(iii), brokers and nominees should treat one hundred percent (100%) of the distributions as being in excess of cumulative net income for purposes of determining the amount to withhold. Nominees, and not Martin Midstream Partners L.P., are treated as withholding agents responsible for any necessary withholding on amounts received by them on behalf of foreign investors. Investors' Conference Call Date: Thursday, July 18, 2024 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 2024 Earnings Summary 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 Martin Midstream Partners LP, 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, and storage 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) marketing, distribution, and transportation services for natural gas liquids and blending and packaging services for specialty lubricants and grease. To learn more, visit www.MMLP.com. Follow Martin Midstream Partners L.P. on LinkedIn, Facebook, and X (formerly known as Twitter). 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 effects of the continued volatility of commodity prices and the related macroeconomic and political environment and (ii) 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 management in assessing our business, we use 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"). Our management uses a variety of financial and operational measurements other than our financial statements prepared in accordance with U.S. GAAP to analyze our 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. We define 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 our management and by external users of our financial statements, such as investors, commercial banks, research analysts, and others, to assess: the financial performance of our assets without regard to financing methods, capital structure, or historical cost basis; the ability of our assets to generate cash sufficient to pay interest costs, support our indebtedness, and make cash distributions to our unitholders; and our 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 we have borrowed money to finance our operations, interest expense is a necessary element of our costs and our ability to generate cash available for distribution. Because we have capital assets, depreciation and amortization are also necessary elements of our costs. Therefore, any measures that exclude these elements have material limitations. To compensate for these limitations, we believe 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 our overall performance. Distributable cash flow and adjusted free cash flow. We define 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 our management and by external users of our financial statements, such as investors, commercial banks and research analysts, to compare basic cash flows generated by us to the cash distributions we expect to pay unitholders. Distributable cash flow is also an important financial measure for our unitholders since it serves as an indicator of our success in providing a cash return on investment. Specifically, this financial measure indicates to investors whether or not we are generating cash flow at a level that can sustain or support an increase in our 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. We define 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 our management and by external users of our 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. We believe 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. Our 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, we believe 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 our overall liquidity. MMLP-F MARTIN MIDSTREAM PARTNERS L.P. CONSOLIDATED AND CONDENSED BALANCE SHEETS (Dollars in thousands) June 30, 2024 December 31, 2023 (Unaudited) (Audited) Assets Cash $ 55 $ 54 Accounts and other receivables, less allowance for doubtful accounts of $506 and $530, respectively 50,910 53,293 Inventories 41,597 43,822 Due from affiliates 22,151 7,924 Other current assets 10,284 9,220 Total current assets 124,997 114,313 Property, plant and equipment, at cost 939,570 918,786 Accumulated depreciation (631,219 ) (612,993 ) Property, plant and equipment, net 308,351 305,793 Goodwill 16,671 16,671 Right-of-use assets 63,768 60,359 Investment in DSM Semichem LLC 7,938 — Deferred income taxes, net 10,174 10,200 Other assets, net 3,179 2,039 Total assets $ 535,078 $ 509,375 Liabilities and Partners’ Capital (Deficit) Current installments of long-term debt and finance lease obligations $ 14 $ — Trade and other accounts payable 51,874 51,653 Product exchange payables — 426 Due to affiliates 3,269 6,334 Income taxes payable 1,374 652 Other accrued liabilities 42,178 41,499 Total current liabilities 98,709 100,564 Long-term debt, net 439,397 421,173 Finance lease obligations 62 — Operating lease liabilities 47,187 45,684 Other long-term obligations 7,589 6,578 Total liabilities 592,944 573,999 Commitments and contingencies Partners’ capital (deficit) (57,866 ) (64,624 ) Total liabilities and partners' capital (deficit) $ 535,078 $ 509,375 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, 2024 2023 2024 2023 Revenues: Terminalling and storage * $ 22,375 $ 21,684 $ 44,892 $ 42,542 Transportation * 57,676 54,750 115,983 110,473 Sulfur services 3,477 3,357 6,954 6,715 Product sales: * Specialty products 67,288 78,872 133,613 211,141 Sulfur services 33,715 36,973 63,919 69,294 101,003 115,845 197,532 280,435 Total revenues 184,531 195,636 365,361 440,165 Costs and expenses: Cost of products sold: (excluding depreciation and amortization) Specialty products * 57,553 71,570 114,783 189,565 Sulfur services * 19,234 25,654 39,633 47,471 Terminalling and storage * 24 25 42 31 76,811 97,249 154,458 237,067 Expenses: Operating expenses * 65,358 60,737 129,292 123,482 Selling, general and administrative * 10,701 8,447 19,614 19,619 Depreciation and amortization 12,687 12,547 25,336 25,448 Total costs and expenses 165,557 178,980 328,700 405,616 Other operating income (loss), net 953 673 1,161 285 Operating income 19,927 17,329 37,822 34,834 Other income (expense): Interest expense, net (14,377 ) (15,263 ) (28,219 ) (30,920 ) Loss on extinguishment of debt — — — (5,121 ) Other, net 2 11 18 33 Total other expense (14,375 ) (15,252 ) (28,201 ) (36,008 ) Net income (loss) before taxes 5,552 2,077 9,621 (1,174 ) Income tax expense (1,772 ) (996 ) (2,568 ) (2,831 ) Net income (loss) 3,780 1,081 7,053 (4,005 ) Less general partner's interest in net income (loss) (76 ) (22 ) (141 ) 80 Less income (loss) allocable to unvested restricted units (16 ) (4 ) (28 ) 12 Limited partners' interest in net income (loss) $ 3,688 $ 1,055 $ 6,884 $ (3,913 ) Net income (loss) per unit attributable to limited partners - basic and diluted $ 0.09 $ 0.03 $ 0.18 $ (0.10 ) Weighted average limited partner units - basic 38,832,222 38,772,266 38,833,039 38,771,037 Weighted average limited partner units - diluted 38,891,375 38,777,600 38,872,192 38,771,037 *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, 2024 2023 2024 2023 Revenues:* Terminalling and storage $ 18,078 $ 18,077 $ 36,627 $ 35,579 Transportation 8,318 7,277 16,919 12,788 Product Sales 123 7,497 252 8,422 Costs and expenses:* Cost of products sold: (excluding depreciation and amortization) Specialty products 8,368 7,918 14,941 17,428 Sulfur services 2,919 2,644 5,912 5,352 Terminalling and storage 24 25 42 31 Expenses: Operating expenses 26,501 25,058 52,924 48,885 Selling, general and administrative 8,638 6,556 15,501 15,072 MARTIN MIDSTREAM PARTNERS L.P. CONSOLIDATED AND CONDENSED STATEMENTS OF CAPITAL (DEFICIT) (Unaudited) (Dollars in thousands) Partners’ Capital (Deficit) Common Limited General Partner Amount Units Amount Total Balances - March 31, 2024 39,001,086 $ (63,115 ) $ 1,619 $ (61,496 ) Net income — 3,704 76 3,780 Cash distributions — (195 ) (4 ) (199 ) Unit-based compensation — 49 — 49 Balances - June 30, 2024 39,001,086 (59,557 ) 1,691 (57,866 ) Balances - December 31, 2023 38,914,806 $ (66,182 ) $ 1,558 $ (64,624 ) Net income — 6,912 141 7,053 Issuance of restricted units 86,280 — — — Cash distributions — (390 ) (8 ) (398 ) Unit-based compensation — 103 — 103 Balances - June 30, 2024 39,001,086 $ (59,557 ) $ 1,691 $ (57,866 ) Partners’ Capital (Deficit) Common Limited General Partner Amount Units Amount Total Balances - March 31, 2023 38,914,806 $ (66,236 ) $ 1,559 $ (64,677 ) Net income — 1,059 22 1,081 Cash distributions — (195 ) (4 ) (199 ) Unit-based compensation — 38 — 38 Balances - June 30, 2023 38,914,806 (65,334 ) 1,577 (63,757 ) Balances - December 31, 2022 38,850,750 $ (61,110 ) $ 1,665 $ (59,445 ) Net loss — (3,925 ) (80 ) (4,005 ) Issuance of restricted units 64,056 — — — Cash distributions — (389 ) (8 ) (397 ) Unit-based compensation — 90 — 90 Balances - June 30, 2023 38,914,806 $ (65,334 ) $ 1,577 $ (63,757 ) MARTIN MIDSTREAM PARTNERS L.P. CONSOLIDATED AND CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in thousands) Six Months Ended June 30, 2024 2023 Cash flows from operating activities: Net income (loss) $ 7,053 $ (4,005 ) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 25,336 25,448 Amortization of deferred debt issuance costs 1,539 2,435 Amortization of debt discount 1,200 1,000 Deferred income tax expense 26 1,867 Gain on disposition or sale of property, plant and equipment, net (1,161 ) (285 ) Loss on extinguishment of debt — 5,121 Non cash unit-based compensation 103 90 Change in current assets and liabilities, excluding effects of acquisitions and dispositions: Accounts and other receivables 2,383 22,619 Inventories 2,031 58,933 Due from affiliates (14,227 ) 5,654 Other current assets 174 5,296 Trade and other accounts payable 523 (19,459 ) Product exchange payables (426 ) 278 Due to affiliates (3,065 ) (6,641 ) Income taxes payable 722 (215 ) Other accrued liabilities (1,196 ) 1,907 Change in other non-current assets and liabilities 922 (1,269 ) Net cash provided by operating activities 21,937 98,774 Cash flows from investing activities: Payments for property, plant and equipment (24,194 ) (17,024 ) Payments for plant turnaround costs (6,705 ) (661 ) Investment in DSM Semichem LLC (6,938 ) — Proceeds from sale of property, plant and equipment 738 4,275 Net cash used in investing activities (37,099 ) (13,410 ) Cash flows from financing activities: Payments of long-term debt (113,000 ) (519,197 ) Payments under finance lease obligations (1 ) (9 ) Proceeds from long-term debt 128,577 448,489 Payment of debt issuance costs (15 ) (14,238 ) Cash distributions paid (398 ) (397 ) Net cash provided by (used in) financing activities 15,163 (85,352 ) Net increase in cash 1 12 Cash at beginning of period 54 45 Cash at end of period $ 55 $ 57 Non-cash additions to property, plant and equipment $ 2,641 $ 1,679 Non-cash contribution of land to DSM Semichem LLC $ 1,000 $ — 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, 2024 and 2023 Three Months Ended June 30, Variance Percent Change 2024 2023 (In thousands, except BBL per day) Revenues $ 24,402 $ 23,906 $ 496 2 % Cost of products sold 24 25 (1 ) (4 )% Operating expenses 15,522 13,932 1,590 11 % Selling, general and administrative expenses 820 333 487 146 % Depreciation and amortization 5,729 5,195 534 10 % 2,307 4,421 (2,114 ) (48 )% Other operating income, net 995 25 970 3,880 % Operating income $ 3,302 $ 4,446 $ (1,144 ) (26 )% Shore-based throughput volumes (gallons) 42,491 42,434 57 — % Smackover refinery throughput volumes (guaranteed minimum BBL per day) 6,500 6,500 — — % Comparative Results of Operations for the Six Months Ended June 30, 2024 and 2023 Six Months Ended June 30, Variance Percent Change 2024 2023 (In thousands, except BBL per day) Revenues $ 48,687 $ 47,825 $ 862 2 % Cost of products sold 42 31 11 35 % Operating expenses 30,557 28,240 2,317 8 % Selling, general and administrative expenses 1,102 882 220 25 % Depreciation and amortization 11,124 10,794 330 3 % 5,862 7,878 (2,016 ) (26 )% Other operating income (loss), net 1,097 (324 ) 1,421 439 % Operating income $ 6,959 $ 7,554 $ (595 ) (8 )% Shore-based throughput volumes (gallons) 88,260 85,783 2,477 3 % 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, 2024 and 2023 Three Months Ended June 30, Variance Percent Change 2024 2023 (In thousands) Revenues $ 61,467 $ 58,395 $ 3,072 5 % Operating expenses 47,783 44,285 3,498 8 % Selling, general and administrative expenses 2,527 1,981 546 28 % Depreciation and amortization 3,381 3,760 (379 ) (10 )% 7,776 8,369 (593 ) (7 )% Other operating income, net 260 647 (387 ) (60 )% Operating income $ 8,036 $ 9,016 $ (980 ) (11 )% Comparative Results of Operations for the Six Months Ended June 30, 2024 and 2023 Six Months Ended June 30, Variance Percent Change 2024 2023 (In thousands) Revenues $ 123,509 $ 120,334 $ 3,175 3 % Operating expenses 94,424 90,475 3,949 4 % Selling, general and administrative expenses 4,727 4,530 197 4 % Depreciation and amortization 6,857 7,522 (665 ) (9 )% $ 17,501 $ 17,807 $ (306 ) (2 )% Other operating income, net 366 651 (285 ) (44 )% Operating income $ 17,867 $ 18,458 $ (591 ) (3 )% Sulfur Services Segment Comparative Results of Operations for the Three Months Ended June 30, 2024 and 2023 Three Months Ended June 30, Variance Percent Change 2024 2023 (In thousands) Revenues: Services $ 3,477 $ 3,357 $ 120 4 % Products 33,716 36,973 (3,257 ) (9 )% Total revenues 37,193 40,330 (3,137 ) (8 )% Cost of products sold 22,183 28,141 (5,958 ) (21 )% Operating expenses 2,744 3,186 (442 ) (14 )% Selling, general and administrative expenses 1,717 962 755 78 % Depreciation and amortization 2,778 2,756 22 1 % 7,771 5,285 2,486 47 % Other operating income (loss), net (308 ) 1 (309 ) (30,900 )% Operating income $ 7,463 $ 5,286 $ 2,177 41 % Sulfur (long tons) 91 123 (32 ) (26 )% Fertilizer (long tons) 64 73 (9 ) (12 )% Total sulfur services volumes (long tons) 155 196 (41 ) (21 )% Comparative Results of Operations for the Six Months Ended June 30, 2024 and 2023 Six Months Ended June 30, Variance Percent Change 2024 2023 (In thousands) Revenues: Services $ 6,954 $ 6,715 $ 239 4 % Products 63,920 69,294 (5,374 ) (8 )% Total revenues 70,874 76,009 (5,135 ) (7 )% Cost of products sold 44,954 52,090 (7,136 ) (14 )% Operating expenses 5,684 6,085 (401 ) (7 )% Selling, general and administrative expenses 3,020 2,579 441 17 % Depreciation and amortization 5,760 5,433 327 6 % 11,456 9,822 1,634 17 % Other operating income (loss), net (308 ) 17 (325 ) (1,912 )% Operating income $ 11,148 $ 9,839 $ 1,309 13 % Sulfur (long tons) 182 197 (15 ) (8 )% Fertilizer (long tons) 136 134 2 1 % Total sulfur services volumes (long tons) 318 331 (13 ) (4 )% Specialty Products Segment Comparative Results of Operations for the Three Months Ended June 30, 2024 and 2023 Three Months Ended June 30, Variance Percent Change 2024 2023 (In thousands) Products revenues $ 67,317 $ 78,898 $ (11,581 ) (15 )% Cost of products sold 59,711 74,270 (14,559 ) (20 )% Operating expenses 26 18 8 44 % Selling, general and administrative expenses 1,842 1,299 543 42 % Depreciation and amortization 799 836 (37 ) (4 )% 4,939 2,475 2,464 100 % Other operating income, net 6 — 6 Operating income $ 4,945 $ 2,475 $ 2,470 100 % NGL sales volumes (Bbls) 540 827 (287 ) (35 )% Other specialty products volumes (Bbls) 93 90 3 3 % Total specialty products volumes (Bbls) 633 917 (284 ) (31 )% Comparative Results of Operations for the Six Months Ended June 30, 2024 and 2023 Six Months Ended June 30, Variance Percent Change 2024 2023 (In thousands) Products revenues $ 133,663 $ 211,175 $ (77,512 ) (37 )% Cost of products sold 119,355 198,721 (79,366 ) (40 )% Operating expenses 51 32 19 59 % Selling, general and administrative expenses 3,165 3,589 (424 ) (12 )% Depreciation and amortization 1,595 1,699 (104 ) (6 )% 9,497 7,134 2,363 33 % Other operating income (loss), net 6 (59 ) 65 110 % Operating income $ 9,503 $ 7,075 $ 2,428 34 % NGL sales volumes (Bbls) 1,162 2,518 (1,356 ) (54 )% Other specialty products volumes (Bbls) 172 174 (2 ) (1 )% Total specialty products volumes (Bbls) 1,334 2,692 (1,358 ) (50 )% Unallocated Selling, General and Administrative Expenses Comparative Results of Operations for the Three and Six Months Ended June 30, 2024 and 2023 Three Months Ended June 30, Variance Percent Change Six Months Ended June 30, Variance Percent Change 2024 2023 2024 2023 (In thousands) (In thousands) Indirect selling, general and administrative expenses $ 3,819 $ 3,894 $ (75 ) (2 )% $ 7,655 $ 8,092 $ (437 ) (5 )% 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, 2024 and 2023, which represents EBITDA, adjusted EBITDA, adjusted EBITDA after giving effect to the exit of the butane optimization business, distributable cash flow, and adjusted free cash flow: Reconciliation of Net Income (Loss) to EBITDA, Adjusted EBITDA, and Adjusted EBITDA After Giving Effect to the Exit of the Butane Optimization Business Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 (in thousands) (in thousands) Net income (loss) $ 3,780 $ 1,081 $ 7,053 $ (4,005 ) Adjustments: Interest expense 14,377 15,263 28,219 30,920 Income tax expense 1,772 996 2,568 2,831 Depreciation and amortization 12,687 12,547 25,336 25,448 EBITDA 32,616 29,887 63,176 55,194 Adjustments: Gain on disposition or sale of property, plant and equipment (953 ) (673 ) (1,161 ) (285 ) Loss on extinguishment of debt — — — 5,121 Lower of cost or net realizable value and other non-cash adjustments — (3,717 ) — (12,850 ) Unit-based compensation 49 38 103 90 Adjusted EBITDA $ 31,712 $ 25,535 $ 62,118 $ 47,270 Adjustments: Less: net loss associated with butane optimization business — 2,564 — 2,255 Plus: lower of cost or net realizable value and other non-cash adjustments — $ 3,717 — 12,850 Adjusted EBITDA after giving effect to the exit of the butane optimization business $ 31,712 $ 31,816 $ 62,118 $ 62,375 Reconciliation of Net Cash Provided by Operating Activities to Adjusted EBITDA, Adjusted EBITDA After Giving Effect to the Exit of the Butane Optimization Business, Distributable Cash Flow, and Adjusted Free Cash Flow Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 (in thousands) (in thousands) Net cash provided by operating activities $ 11,828 $ 49,510 $ 21,937 $ 98,774 Interest expense 1 13,004 13,903 25,480 27,485 Current income tax expense 1,420 306 2,542 964 Lower of cost or net realizable value and other non-cash adjustments — (3,717 ) — (12,850 ) Changes in operating assets and liabilities which (provided) used cash: Accounts and other receivables, inventories, and other current assets 9,919 (43,135 ) 9,639 (91,517 ) Trade, accounts and other payables, and other current liabilities (3,786 ) 7,171 3,442 23,145 Other (673 ) 1,497 (922 ) 1,269 Adjusted EBITDA 31,712 25,535 62,118 47,270 Adjustments: Less: net loss associated with butane optimization business — 2,564 — 2,255 Plus: lower of cost or net realizable value and other non-cash adjustments — 3,717 — 12,850 Adjusted EBITDA after giving effect to the exit of the butane optimization business 31,712 31,816 62,118 62,375 Adjustments: Interest expense (14,377 ) (15,263 ) (28,219 ) (30,920 ) Income tax expense (1,772 ) (996 ) (2,568 ) (2,831 ) Deferred income taxes 352 690 26 1,867 Amortization of debt discount 600 600 1,200 1,000 Amortization of deferred debt issuance costs 773 760 1,539 2,435 Payments for plant turnaround costs (745 ) (432 ) (6,705 ) (661 ) Maintenance capital expenditures (7,009 ) (7,438 ) (12,211 ) (14,072 ) Distributable cash flow 9,534 9,737 15,180 19,193 Principal payments under finance lease obligations (1 ) (3 ) (1 ) (9 ) Investment in DSM Semichem LLC (6,938 ) — (6,938 ) — Expansion capital expenditures �� (5,450 ) (1,925 ) (11,681 ) (2,682 ) Adjusted free cash flow $ (2,855 ) $ 7,809 $ (3,440 ) $ 16,502 1 Net of amortization of debt issuance costs and discount, which are included in interest expense but not included in net cash provided by (used in) operating activities. View source version on businesswire.com: https://www.businesswire.com/news/home/20240717514885/en/Contacts Sharon Taylor - Executive Vice President & Chief Financial Officer (877) 256-6644 investor.relations@mmlp.com
Net income of $3.8 million and $7.1 million for the three and six months ended June 30, 2024, respectively Adjusted EBITDA of $31.7 million and $62.1 million for the three and six months ended June 30, 2024, respectively Total adjusted leverage of 3.88 times as of June 30, 2024 Declares quarterly cash dividend of $0.005 per common unit
Martin Midstream Partners L.P. (Nasdaq: MMLP) (“MMLP” or the “Partnership”) today announced its financial results for the second quarter of 2024. Bob Bondurant, President and Chief Executive Officer of Martin Midstream GP LLC, the general partner of the Partnership, stated, “For the second quarter of 2024, the Partnership exceeded guidance by $0.5 million with adjusted EBITDA of $31.7 million compared to guidance of $31.2 million. Within our Transportation Services segment the land division continued to outperform projections assisted by higher than forecasted mileage along with lower maintenance expense. The marine division, however, was negatively impacted by a casualty loss reserve of $0.5 million from a bridge allision that occurred in May. The marine division also experienced lower fleet utilization this quarter as a result of both the allision and extended time of equipment in dry dock for regulatory inspection compared to forecasted duration.” “The Sulfur Services segment results were above guidance as the division benefited from strong fertilizer margins and high sulfur production from the Gulf Coast refineries. Results in the Specialty Products segment were in line with guidance as strength in our grease division offset underperformance by the packaged lubricants business. Finally, the Terminalling and Storage segment results were below guidance as a direct result of a $1.5 million casualty loss reserve related to the previously announced crude oil spill from a crude pipeline that connects our Sandyland Terminal to the Smackover refinery.” SECOND QUARTER 2024 OPERATING RESULTS BY BUSINESS SEGMENT Operating Income (Loss) ($M) Adjusted EBITDA, After Giving Effect to the Exit of the Butane Optimization Business ($M) Adjusted EBITDA ($M) Three Months Ended June 30, 2024 2023 2024 2023 2024 2023 (Amounts may not add or recalculate due to rounding) Business Segment: Terminalling and Storage $ 3.3 $ 4.4 $ 8.0 $ 9.6 $ 8.0 $ 9.6 Transportation 8.0 9.0 11.2 12.1 11.2 12.1 Sulfur Services 7.5 5.3 10.6 8.0 10.6 8.0 Specialty Products 4.9 2.5 5.7 5.9 5.7 (0.4 ) Unallocated Selling, General and Administrative Expense (3.8 ) (3.9 ) (3.8 ) (3.9 ) (3.8 ) (3.9 ) $ 19.9 $ 17.3 $ 31.7 $ 31.8 $ 31.7 $ 25.5 Terminalling and storage adjusted EBITDA decreased $1.6 million, primarily reflecting the $1.5 million casualty loss reserve related to the crude oil spill from a crude pipeline that connects our Sandyland Terminal to the Smackover refinery. This casualty loss reserve was coupled with higher employee-related expenses across our divisions, offset by increased throughput in our shore-based terminals and underground NGL storage divisions. Transportation adjusted EBITDA decreased $0.9 million, reflecting higher expenses in our marine division related to a casualty loss reserve of $0.5 million stemming from a bridge allision that occurred in May. This was coupled with lower fleet utilization as a result of both the allision and an acceleration of equipment into dry dock for regulatory inspection. Our marine division was positively impacted during the quarter by higher day rates. The land division experienced increased operating expenses, offset by increased mileage and transportation rates. Sulfur services adjusted EBITDA increased $2.6 million, primarily reflecting increased fertilizer margins and high sulfur production from the Gulf Coast refineries. Specialty products adjusted EBITDA, after giving effect to the exit of the butane optimization business, decreased $0.2 million, reflecting decreased margins in our NGL marketing business, offset by higher margins in our grease division. Unallocated selling, general, and administrative expense decreased $0.1 million, reflecting reduced overhead expenses allocated from Martin Resource Management. CAPITALIZATION June 30, 2024 December 31, 2023 ($ in millions) Debt Outstanding: Revolving Credit Facility, Due February 2027 1 $ 58.0 $ 42.5 Finance lease obligations 0.1 — 11.50% Senior Secured Notes, Due February 2028 400.0 400.0 Total Debt Outstanding: $ 458.1 $ 442.5 Summary Credit Metrics: Revolving Credit Facility - Total Capacity $ 150.0 $ 175.0 Revolving Credit Facility - Available Liquidity $ 82.9 $ 109.0 Total Adjusted Leverage Ratio 2 3.88x 3.75x Senior Leverage Ratio 2 0.49x 0.36x Interest Coverage Ratio 2 2.24x 2.19x 1 The Partnership was in compliance with all debt covenants as of June 30, 2024 and December 31, 2023. 2 As calculated under the Partnership's revolving credit facility. RESULTS OF OPERATIONS SUMMARY (in millions, except per unit amounts) Period Net Income Net Income Per Unit Adjusted EBITDA Adjusted EBITDA, After Giving Effect to the Exit of the Butane Optimization Business Net Cash Provided by Operating Activities Distributable Cash Flow Revenues Three Months Ended June 30, 2024 $ 3.8 $ 0.09 $ 31.7 $ 31.7 $ 11.8 $ 9.5 $ 184.5 Three Months Ended June 30, 2023 $ 1.1 $ 0.03 $ 25.5 $ 31.8 $ 49.5 $ 9.7 $ 195.6 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 2024 to the Partnership's adjusted EBITDA guidance for the second quarter 2024. QUARTERLY CASH DISTRIBUTION The Partnership has declared a quarterly cash distribution of $0.005 per unit for the quarter ended June 30, 2024. The distribution is payable on August 14, 2024 to common unitholders of record as of the close of business on August 7, 2024. The ex-dividend date for the cash distribution is August 7, 2024. Qualified Notice to Nominees This release is intended to serve as qualified notice under Treasury Regulation Section 1.1446-4(b)(4) and (d). Brokers and nominees should treat one hundred percent (100%) of MMLP’s distributions to non-U.S. investors as being attributable to income that is effectively connected with a United States trade or business. Accordingly, MMLP’s distributions to non-U.S. investors are subject to federal income tax withholding at the highest applicable effective tax rate. For purposes of Treasury Regulation section 1.1446(f)-4(c)(2)(iii), brokers and nominees should treat one hundred percent (100%) of the distributions as being in excess of cumulative net income for purposes of determining the amount to withhold. Nominees, and not Martin Midstream Partners L.P., are treated as withholding agents responsible for any necessary withholding on amounts received by them on behalf of foreign investors. Investors' Conference Call Date: Thursday, July 18, 2024 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 2024 Earnings Summary 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 Martin Midstream Partners LP, 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, and storage 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) marketing, distribution, and transportation services for natural gas liquids and blending and packaging services for specialty lubricants and grease. To learn more, visit www.MMLP.com. Follow Martin Midstream Partners L.P. on LinkedIn, Facebook, and X (formerly known as Twitter). 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 effects of the continued volatility of commodity prices and the related macroeconomic and political environment and (ii) 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 management in assessing our business, we use 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"). Our management uses a variety of financial and operational measurements other than our financial statements prepared in accordance with U.S. GAAP to analyze our 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. We define 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 our management and by external users of our financial statements, such as investors, commercial banks, research analysts, and others, to assess: the financial performance of our assets without regard to financing methods, capital structure, or historical cost basis; the ability of our assets to generate cash sufficient to pay interest costs, support our indebtedness, and make cash distributions to our unitholders; and our 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 we have borrowed money to finance our operations, interest expense is a necessary element of our costs and our ability to generate cash available for distribution. Because we have capital assets, depreciation and amortization are also necessary elements of our costs. Therefore, any measures that exclude these elements have material limitations. To compensate for these limitations, we believe 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 our overall performance. Distributable cash flow and adjusted free cash flow. We define 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 our management and by external users of our financial statements, such as investors, commercial banks and research analysts, to compare basic cash flows generated by us to the cash distributions we expect to pay unitholders. Distributable cash flow is also an important financial measure for our unitholders since it serves as an indicator of our success in providing a cash return on investment. Specifically, this financial measure indicates to investors whether or not we are generating cash flow at a level that can sustain or support an increase in our 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. We define 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 our management and by external users of our 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. We believe 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. Our 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, we believe 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 our overall liquidity. MMLP-F MARTIN MIDSTREAM PARTNERS L.P. CONSOLIDATED AND CONDENSED BALANCE SHEETS (Dollars in thousands) June 30, 2024 December 31, 2023 (Unaudited) (Audited) Assets Cash $ 55 $ 54 Accounts and other receivables, less allowance for doubtful accounts of $506 and $530, respectively 50,910 53,293 Inventories 41,597 43,822 Due from affiliates 22,151 7,924 Other current assets 10,284 9,220 Total current assets 124,997 114,313 Property, plant and equipment, at cost 939,570 918,786 Accumulated depreciation (631,219 ) (612,993 ) Property, plant and equipment, net 308,351 305,793 Goodwill 16,671 16,671 Right-of-use assets 63,768 60,359 Investment in DSM Semichem LLC 7,938 — Deferred income taxes, net 10,174 10,200 Other assets, net 3,179 2,039 Total assets $ 535,078 $ 509,375 Liabilities and Partners’ Capital (Deficit) Current installments of long-term debt and finance lease obligations $ 14 $ — Trade and other accounts payable 51,874 51,653 Product exchange payables — 426 Due to affiliates 3,269 6,334 Income taxes payable 1,374 652 Other accrued liabilities 42,178 41,499 Total current liabilities 98,709 100,564 Long-term debt, net 439,397 421,173 Finance lease obligations 62 — Operating lease liabilities 47,187 45,684 Other long-term obligations 7,589 6,578 Total liabilities 592,944 573,999 Commitments and contingencies Partners’ capital (deficit) (57,866 ) (64,624 ) Total liabilities and partners' capital (deficit) $ 535,078 $ 509,375 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, 2024 2023 2024 2023 Revenues: Terminalling and storage * $ 22,375 $ 21,684 $ 44,892 $ 42,542 Transportation * 57,676 54,750 115,983 110,473 Sulfur services 3,477 3,357 6,954 6,715 Product sales: * Specialty products 67,288 78,872 133,613 211,141 Sulfur services 33,715 36,973 63,919 69,294 101,003 115,845 197,532 280,435 Total revenues 184,531 195,636 365,361 440,165 Costs and expenses: Cost of products sold: (excluding depreciation and amortization) Specialty products * 57,553 71,570 114,783 189,565 Sulfur services * 19,234 25,654 39,633 47,471 Terminalling and storage * 24 25 42 31 76,811 97,249 154,458 237,067 Expenses: Operating expenses * 65,358 60,737 129,292 123,482 Selling, general and administrative * 10,701 8,447 19,614 19,619 Depreciation and amortization 12,687 12,547 25,336 25,448 Total costs and expenses 165,557 178,980 328,700 405,616 Other operating income (loss), net 953 673 1,161 285 Operating income 19,927 17,329 37,822 34,834 Other income (expense): Interest expense, net (14,377 ) (15,263 ) (28,219 ) (30,920 ) Loss on extinguishment of debt — — — (5,121 ) Other, net 2 11 18 33 Total other expense (14,375 ) (15,252 ) (28,201 ) (36,008 ) Net income (loss) before taxes 5,552 2,077 9,621 (1,174 ) Income tax expense (1,772 ) (996 ) (2,568 ) (2,831 ) Net income (loss) 3,780 1,081 7,053 (4,005 ) Less general partner's interest in net income (loss) (76 ) (22 ) (141 ) 80 Less income (loss) allocable to unvested restricted units (16 ) (4 ) (28 ) 12 Limited partners' interest in net income (loss) $ 3,688 $ 1,055 $ 6,884 $ (3,913 ) Net income (loss) per unit attributable to limited partners - basic and diluted $ 0.09 $ 0.03 $ 0.18 $ (0.10 ) Weighted average limited partner units - basic 38,832,222 38,772,266 38,833,039 38,771,037 Weighted average limited partner units - diluted 38,891,375 38,777,600 38,872,192 38,771,037 *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, 2024 2023 2024 2023 Revenues:* Terminalling and storage $ 18,078 $ 18,077 $ 36,627 $ 35,579 Transportation 8,318 7,277 16,919 12,788 Product Sales 123 7,497 252 8,422 Costs and expenses:* Cost of products sold: (excluding depreciation and amortization) Specialty products 8,368 7,918 14,941 17,428 Sulfur services 2,919 2,644 5,912 5,352 Terminalling and storage 24 25 42 31 Expenses: Operating expenses 26,501 25,058 52,924 48,885 Selling, general and administrative 8,638 6,556 15,501 15,072 MARTIN MIDSTREAM PARTNERS L.P. CONSOLIDATED AND CONDENSED STATEMENTS OF CAPITAL (DEFICIT) (Unaudited) (Dollars in thousands) Partners’ Capital (Deficit) Common Limited General Partner Amount Units Amount Total Balances - March 31, 2024 39,001,086 $ (63,115 ) $ 1,619 $ (61,496 ) Net income — 3,704 76 3,780 Cash distributions — (195 ) (4 ) (199 ) Unit-based compensation — 49 — 49 Balances - June 30, 2024 39,001,086 (59,557 ) 1,691 (57,866 ) Balances - December 31, 2023 38,914,806 $ (66,182 ) $ 1,558 $ (64,624 ) Net income — 6,912 141 7,053 Issuance of restricted units 86,280 — — — Cash distributions — (390 ) (8 ) (398 ) Unit-based compensation — 103 — 103 Balances - June 30, 2024 39,001,086 $ (59,557 ) $ 1,691 $ (57,866 ) Partners’ Capital (Deficit) Common Limited General Partner Amount Units Amount Total Balances - March 31, 2023 38,914,806 $ (66,236 ) $ 1,559 $ (64,677 ) Net income — 1,059 22 1,081 Cash distributions — (195 ) (4 ) (199 ) Unit-based compensation — 38 — 38 Balances - June 30, 2023 38,914,806 (65,334 ) 1,577 (63,757 ) Balances - December 31, 2022 38,850,750 $ (61,110 ) $ 1,665 $ (59,445 ) Net loss — (3,925 ) (80 ) (4,005 ) Issuance of restricted units 64,056 — — — Cash distributions — (389 ) (8 ) (397 ) Unit-based compensation — 90 — 90 Balances - June 30, 2023 38,914,806 $ (65,334 ) $ 1,577 $ (63,757 ) MARTIN MIDSTREAM PARTNERS L.P. CONSOLIDATED AND CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in thousands) Six Months Ended June 30, 2024 2023 Cash flows from operating activities: Net income (loss) $ 7,053 $ (4,005 ) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 25,336 25,448 Amortization of deferred debt issuance costs 1,539 2,435 Amortization of debt discount 1,200 1,000 Deferred income tax expense 26 1,867 Gain on disposition or sale of property, plant and equipment, net (1,161 ) (285 ) Loss on extinguishment of debt — 5,121 Non cash unit-based compensation 103 90 Change in current assets and liabilities, excluding effects of acquisitions and dispositions: Accounts and other receivables 2,383 22,619 Inventories 2,031 58,933 Due from affiliates (14,227 ) 5,654 Other current assets 174 5,296 Trade and other accounts payable 523 (19,459 ) Product exchange payables (426 ) 278 Due to affiliates (3,065 ) (6,641 ) Income taxes payable 722 (215 ) Other accrued liabilities (1,196 ) 1,907 Change in other non-current assets and liabilities 922 (1,269 ) Net cash provided by operating activities 21,937 98,774 Cash flows from investing activities: Payments for property, plant and equipment (24,194 ) (17,024 ) Payments for plant turnaround costs (6,705 ) (661 ) Investment in DSM Semichem LLC (6,938 ) — Proceeds from sale of property, plant and equipment 738 4,275 Net cash used in investing activities (37,099 ) (13,410 ) Cash flows from financing activities: Payments of long-term debt (113,000 ) (519,197 ) Payments under finance lease obligations (1 ) (9 ) Proceeds from long-term debt 128,577 448,489 Payment of debt issuance costs (15 ) (14,238 ) Cash distributions paid (398 ) (397 ) Net cash provided by (used in) financing activities 15,163 (85,352 ) Net increase in cash 1 12 Cash at beginning of period 54 45 Cash at end of period $ 55 $ 57 Non-cash additions to property, plant and equipment $ 2,641 $ 1,679 Non-cash contribution of land to DSM Semichem LLC $ 1,000 $ — 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, 2024 and 2023 Three Months Ended June 30, Variance Percent Change 2024 2023 (In thousands, except BBL per day) Revenues $ 24,402 $ 23,906 $ 496 2 % Cost of products sold 24 25 (1 ) (4 )% Operating expenses 15,522 13,932 1,590 11 % Selling, general and administrative expenses 820 333 487 146 % Depreciation and amortization 5,729 5,195 534 10 % 2,307 4,421 (2,114 ) (48 )% Other operating income, net 995 25 970 3,880 % Operating income $ 3,302 $ 4,446 $ (1,144 ) (26 )% Shore-based throughput volumes (gallons) 42,491 42,434 57 — % Smackover refinery throughput volumes (guaranteed minimum BBL per day) 6,500 6,500 — — % Comparative Results of Operations for the Six Months Ended June 30, 2024 and 2023 Six Months Ended June 30, Variance Percent Change 2024 2023 (In thousands, except BBL per day) Revenues $ 48,687 $ 47,825 $ 862 2 % Cost of products sold 42 31 11 35 % Operating expenses 30,557 28,240 2,317 8 % Selling, general and administrative expenses 1,102 882 220 25 % Depreciation and amortization 11,124 10,794 330 3 % 5,862 7,878 (2,016 ) (26 )% Other operating income (loss), net 1,097 (324 ) 1,421 439 % Operating income $ 6,959 $ 7,554 $ (595 ) (8 )% Shore-based throughput volumes (gallons) 88,260 85,783 2,477 3 % 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, 2024 and 2023 Three Months Ended June 30, Variance Percent Change 2024 2023 (In thousands) Revenues $ 61,467 $ 58,395 $ 3,072 5 % Operating expenses 47,783 44,285 3,498 8 % Selling, general and administrative expenses 2,527 1,981 546 28 % Depreciation and amortization 3,381 3,760 (379 ) (10 )% 7,776 8,369 (593 ) (7 )% Other operating income, net 260 647 (387 ) (60 )% Operating income $ 8,036 $ 9,016 $ (980 ) (11 )% Comparative Results of Operations for the Six Months Ended June 30, 2024 and 2023 Six Months Ended June 30, Variance Percent Change 2024 2023 (In thousands) Revenues $ 123,509 $ 120,334 $ 3,175 3 % Operating expenses 94,424 90,475 3,949 4 % Selling, general and administrative expenses 4,727 4,530 197 4 % Depreciation and amortization 6,857 7,522 (665 ) (9 )% $ 17,501 $ 17,807 $ (306 ) (2 )% Other operating income, net 366 651 (285 ) (44 )% Operating income $ 17,867 $ 18,458 $ (591 ) (3 )% Sulfur Services Segment Comparative Results of Operations for the Three Months Ended June 30, 2024 and 2023 Three Months Ended June 30, Variance Percent Change 2024 2023 (In thousands) Revenues: Services $ 3,477 $ 3,357 $ 120 4 % Products 33,716 36,973 (3,257 ) (9 )% Total revenues 37,193 40,330 (3,137 ) (8 )% Cost of products sold 22,183 28,141 (5,958 ) (21 )% Operating expenses 2,744 3,186 (442 ) (14 )% Selling, general and administrative expenses 1,717 962 755 78 % Depreciation and amortization 2,778 2,756 22 1 % 7,771 5,285 2,486 47 % Other operating income (loss), net (308 ) 1 (309 ) (30,900 )% Operating income $ 7,463 $ 5,286 $ 2,177 41 % Sulfur (long tons) 91 123 (32 ) (26 )% Fertilizer (long tons) 64 73 (9 ) (12 )% Total sulfur services volumes (long tons) 155 196 (41 ) (21 )% Comparative Results of Operations for the Six Months Ended June 30, 2024 and 2023 Six Months Ended June 30, Variance Percent Change 2024 2023 (In thousands) Revenues: Services $ 6,954 $ 6,715 $ 239 4 % Products 63,920 69,294 (5,374 ) (8 )% Total revenues 70,874 76,009 (5,135 ) (7 )% Cost of products sold 44,954 52,090 (7,136 ) (14 )% Operating expenses 5,684 6,085 (401 ) (7 )% Selling, general and administrative expenses 3,020 2,579 441 17 % Depreciation and amortization 5,760 5,433 327 6 % 11,456 9,822 1,634 17 % Other operating income (loss), net (308 ) 17 (325 ) (1,912 )% Operating income $ 11,148 $ 9,839 $ 1,309 13 % Sulfur (long tons) 182 197 (15 ) (8 )% Fertilizer (long tons) 136 134 2 1 % Total sulfur services volumes (long tons) 318 331 (13 ) (4 )% Specialty Products Segment Comparative Results of Operations for the Three Months Ended June 30, 2024 and 2023 Three Months Ended June 30, Variance Percent Change 2024 2023 (In thousands) Products revenues $ 67,317 $ 78,898 $ (11,581 ) (15 )% Cost of products sold 59,711 74,270 (14,559 ) (20 )% Operating expenses 26 18 8 44 % Selling, general and administrative expenses 1,842 1,299 543 42 % Depreciation and amortization 799 836 (37 ) (4 )% 4,939 2,475 2,464 100 % Other operating income, net 6 — 6 Operating income $ 4,945 $ 2,475 $ 2,470 100 % NGL sales volumes (Bbls) 540 827 (287 ) (35 )% Other specialty products volumes (Bbls) 93 90 3 3 % Total specialty products volumes (Bbls) 633 917 (284 ) (31 )% Comparative Results of Operations for the Six Months Ended June 30, 2024 and 2023 Six Months Ended June 30, Variance Percent Change 2024 2023 (In thousands) Products revenues $ 133,663 $ 211,175 $ (77,512 ) (37 )% Cost of products sold 119,355 198,721 (79,366 ) (40 )% Operating expenses 51 32 19 59 % Selling, general and administrative expenses 3,165 3,589 (424 ) (12 )% Depreciation and amortization 1,595 1,699 (104 ) (6 )% 9,497 7,134 2,363 33 % Other operating income (loss), net 6 (59 ) 65 110 % Operating income $ 9,503 $ 7,075 $ 2,428 34 % NGL sales volumes (Bbls) 1,162 2,518 (1,356 ) (54 )% Other specialty products volumes (Bbls) 172 174 (2 ) (1 )% Total specialty products volumes (Bbls) 1,334 2,692 (1,358 ) (50 )% Unallocated Selling, General and Administrative Expenses Comparative Results of Operations for the Three and Six Months Ended June 30, 2024 and 2023 Three Months Ended June 30, Variance Percent Change Six Months Ended June 30, Variance Percent Change 2024 2023 2024 2023 (In thousands) (In thousands) Indirect selling, general and administrative expenses $ 3,819 $ 3,894 $ (75 ) (2 )% $ 7,655 $ 8,092 $ (437 ) (5 )% 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, 2024 and 2023, which represents EBITDA, adjusted EBITDA, adjusted EBITDA after giving effect to the exit of the butane optimization business, distributable cash flow, and adjusted free cash flow: Reconciliation of Net Income (Loss) to EBITDA, Adjusted EBITDA, and Adjusted EBITDA After Giving Effect to the Exit of the Butane Optimization Business Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 (in thousands) (in thousands) Net income (loss) $ 3,780 $ 1,081 $ 7,053 $ (4,005 ) Adjustments: Interest expense 14,377 15,263 28,219 30,920 Income tax expense 1,772 996 2,568 2,831 Depreciation and amortization 12,687 12,547 25,336 25,448 EBITDA 32,616 29,887 63,176 55,194 Adjustments: Gain on disposition or sale of property, plant and equipment (953 ) (673 ) (1,161 ) (285 ) Loss on extinguishment of debt — — — 5,121 Lower of cost or net realizable value and other non-cash adjustments — (3,717 ) — (12,850 ) Unit-based compensation 49 38 103 90 Adjusted EBITDA $ 31,712 $ 25,535 $ 62,118 $ 47,270 Adjustments: Less: net loss associated with butane optimization business — 2,564 — 2,255 Plus: lower of cost or net realizable value and other non-cash adjustments — $ 3,717 — 12,850 Adjusted EBITDA after giving effect to the exit of the butane optimization business $ 31,712 $ 31,816 $ 62,118 $ 62,375 Reconciliation of Net Cash Provided by Operating Activities to Adjusted EBITDA, Adjusted EBITDA After Giving Effect to the Exit of the Butane Optimization Business, Distributable Cash Flow, and Adjusted Free Cash Flow Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 (in thousands) (in thousands) Net cash provided by operating activities $ 11,828 $ 49,510 $ 21,937 $ 98,774 Interest expense 1 13,004 13,903 25,480 27,485 Current income tax expense 1,420 306 2,542 964 Lower of cost or net realizable value and other non-cash adjustments — (3,717 ) — (12,850 ) Changes in operating assets and liabilities which (provided) used cash: Accounts and other receivables, inventories, and other current assets 9,919 (43,135 ) 9,639 (91,517 ) Trade, accounts and other payables, and other current liabilities (3,786 ) 7,171 3,442 23,145 Other (673 ) 1,497 (922 ) 1,269 Adjusted EBITDA 31,712 25,535 62,118 47,270 Adjustments: Less: net loss associated with butane optimization business — 2,564 — 2,255 Plus: lower of cost or net realizable value and other non-cash adjustments — 3,717 — 12,850 Adjusted EBITDA after giving effect to the exit of the butane optimization business 31,712 31,816 62,118 62,375 Adjustments: Interest expense (14,377 ) (15,263 ) (28,219 ) (30,920 ) Income tax expense (1,772 ) (996 ) (2,568 ) (2,831 ) Deferred income taxes 352 690 26 1,867 Amortization of debt discount 600 600 1,200 1,000 Amortization of deferred debt issuance costs 773 760 1,539 2,435 Payments for plant turnaround costs (745 ) (432 ) (6,705 ) (661 ) Maintenance capital expenditures (7,009 ) (7,438 ) (12,211 ) (14,072 ) Distributable cash flow 9,534 9,737 15,180 19,193 Principal payments under finance lease obligations (1 ) (3 ) (1 ) (9 ) Investment in DSM Semichem LLC (6,938 ) — (6,938 ) — Expansion capital expenditures �� (5,450 ) (1,925 ) (11,681 ) (2,682 ) Adjusted free cash flow $ (2,855 ) $ 7,809 $ (3,440 ) $ 16,502 1 Net of amortization of debt issuance costs and discount, which are included in interest expense but not included in net cash provided by (used in) operating activities. 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Sharon Taylor - Executive Vice President & Chief Financial Officer (877) 256-6644 investor.relations@mmlp.com