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Form 8-K MARTIN MIDSTREAM PARTNER For: Apr 29

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April 29, 2015 4:04 PM EDT


UNITED STATES
 
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT
 
Pursuant to Section 13 or 15(d)
 
of the Securities Exchange Act of 1934
 
Date of report (date of earliest event reported): April 29, 2015
 
MARTIN MIDSTREAM PARTNERS L.P.
(Exact name of Registrant as specified in its charter)
DELAWARE
(State of incorporation
or organization)
 
000-50056
(Commission file number)
 
05-0527861
(I.R.S. employer identification number)
 
 
 
4200 STONE ROAD
 
 
KILGORE, TEXAS
(Address of principal executive offices)
 
75662
(Zip code)
 
Registrant's telephone number, including area code: (903) 983-6200
 
(Former name or former address, if changed since last report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o
 
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o
 
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o
 
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o
 
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 
 




Item 2.02
 
Results of Operations and Financial Condition.
 
          On April 29, 2015, Martin Midstream Partners L.P. (the “Partnership”) issued a press release reporting its financial results for the quarter ended March 31, 2015.   A copy of the press release is furnished as Exhibit 99.1 to this Current Report and will be published on the Partnership's website at www.martinmidstream.com. In accordance with General Instruction B.2 of Form 8-K, the information set forth herein and in the press release is deemed to be “furnished” and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). 

Item 9.01
 
Financial Statements and Exhibits.
 
(d)      Exhibits
 
          In accordance with General Instruction B.2 of Form 8-K, the information set forth in the attached Exhibit 99.1 is deemed to be “furnished” and shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act.

Exhibit
Number
 
Description
99.1
 
Press release dated April 29, 2015

























 




 SIGNATURES
 
     Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
MARTIN MIDSTREAM PARTNERS L.P.
 
By: Martin Midstream GP LLC,
Its General Partner
 
Date: April 29, 2015
 
By: /s/ Robert D. Bondurant  
 
 
Robert D. Bondurant
 
 
Executive Vice President, Treasurer, Principal Accounting Officer and
Chief Financial Officer 
 
 











































 INDEX TO EXHIBITS

Exhibit
 
 
Number
 
Description
 
99.1

 
 
Press release dated April 29, 2015
 






















































EXHIBIT 99.1


MARTIN MIDSTREAM PARTNERS REPORTS
INCREASED DISTRIBUTABLE CASH FLOW AND ADJUSTED EBITDA
IN 2015 FIRST QUARTER RESULTS

•
Distributable cash flow from continuing operations increased 71% compared to the first quarter of 2014
•
Distribution increase of $0.0275, or 3.5% per unit, compared to the distribution paid in the first quarter of 2014
•
Adjusted EBITDA of $50.4 million representing an increase of 29% compared to the first quarter of 2014

KILGORE, Texas, April 29, 2015 (GlobeNewswire) -- Martin Midstream Partners L.P. (Nasdaq: MMLP) (the "Partnership") announced today its financial results for the first quarter ended March 31, 2015.

Ruben Martin, President and Chief Executive Officer of Martin Midstream GP LLC, the general partner of Martin Midstream Partners, said, “I am pleased with our start to 2015 and the Partnership’s first quarter results. The Partnership finished the first quarter with a distribution coverage ratio of 1.12 times. This solid performance included, for the first time since the fourth quarter 2012, paying incentive distribution rights totaling $3.7 million to our general partner. Across all segments, our distributable cash flow grew over 70% compared to the first quarter of last year. This was primarily attributable to strong cash flow from the acquisitions we made last year in natural gas storage and NGL pipeline transportation.

"Looking at our operating segments, Terminalling and Storage outperformed internal expectations during the quarter. This performance was driven by higher than projected throughput at our Corpus Christi crude terminal and lower than forecasted expenses at the shore based terminals and the Smackover refinery. Likewise, the Marine Transportation segment, in particular our offshore fleet, performed well during the quarter. In Natural Gas Services, our storage assets were again ahead of planned performance, however, offsetting performance was lower than anticipated volumes and margins across our NGL businesses. Our Sulfur Services segment met plan even as the fertilizer business experienced weather related fertilizer application delays.

"Looking ahead to the second quarter, we expect to realize a delayed cash flow benefit from later than normal fertilizer application which should also serve to reduce some of the seasonality we typically experience. Additionally, we are optimistic that the lubricant packaging landscape will continue to improve. Pertaining to growth projects, discussions with our customers in both Terminalling and Storage and Natural Gas Services segments have gained momentum during the first quarter; and it appears possible that we will exceed our originally forecasted growth capital expenditure budget for 2015."

The Partnership's distributable cash flow from continuing operations for the first quarter of 2015 was $37.1 million compared to distributable cash flow from continuing operations for the first quarter of 2014 of $21.7 million, an increase of 71%.

The Partnership's adjusted EBITDA from continuing operations for the first quarter of 2015 was $50.4 million compared to adjusted EBITDA from continuing operations for the first quarter of 2014 of $39.0 million, an increase of 29%. Net income for the first quarter of 2015 was $17.2 million, or $0.37 per limited partner unit. Net income for the first quarter of 2014 was $11.8 million, or $0.43 per limited partner unit.

On February 12, 2015, the Partnership exited the natural gas liquids floating storage and trans-loading businesses as a result of the sale of its six liquefied petroleum gas pressure barges, collectively referred to as the "Floating Storage Assets", for $41.3 million. The Partnership recorded a gain on the disposition of $1.5 million.

The Partnership's distributable cash flow and adjusted EBITDA from discontinued operations related to the Floating Storage Assets for the first quarter of both 2015 and 2014 was negative $0.2 million. The Partnership had net income from discontinued operations related to the Floating Storage Assets for the first quarter of 2015 of $1.2



million, or $0.03 per limited partner unit. Net income from discontinued operations for the first quarter of 2015 was positively affected by a gain on the disposition of the Floating Storage Assets of $1.5 million. This compared to a net loss from discontinued operations for the first quarter of 2014 of $0.6 million, or $0.02 per limited partner unit.
    
Due to significantly lower natural gas liquid prices, revenues for the first quarter of 2015 were $305.4 million compared to $484.8 million for the first quarter of 2014.

Distributable cash flow, EBITDA and adjusted EBITDA are non-GAAP financial measures which are explained in greater detail below under the heading “Use of Non-GAAP Financial Information.” The Partnership has also included below a table entitled “Reconciliation of EBITDA, Adjusted EBITDA, and Distributable Cash Flow” in order to show the components of these non-GAAP financial measures and their reconciliation to the most comparable GAAP measurement.

Included with this press release are the Partnership's consolidated financial statements as of and for the three months ended March 31, 2015 and certain prior periods. These financial statements should be read in conjunction with the information contained in the Partnership's Quarterly Report on Form 10-Q, to be filed with the Securities and Exchange Commission on April 29, 2015.
    
Quarterly Cash Distribution
 
The quarterly cash distribution of $0.8125 per common unit, which was announced on April 23, 2015, is payable on May 15, 2015 to common unitholders of record as of the close of business on May 8, 2015. The ex-dividend date for the cash distribution is May 6, 2015. This distribution reflects an annualized distribution rate of $3.25 per unit.

Investors' Conference Call
  
An investors' conference call to review the first quarter results will be held on Thursday, April 30, 2015, at 8:00 a.m. Central Time. The conference call can be accessed by calling (877) 878-2695. An audio replay of the conference call will be available by calling (855) 859-2056 from 11:00 a.m. Central Time on April 30, 2015 through 10:59 p.m. Central Time on May 12, 2015. The access code for the conference call and the audio replay is Conference ID No. 33077304. The audio replay of the conference call will also be archived on Martin Midstream Partners' website at www.martinmidstream.com.

About Martin Midstream Partners
    
The Partnership is a publicly traded limited partnership with a diverse set of operations focused primarily in the United States Gulf Coast region. The Partnership's primary business segments include: (1) terminalling, storage and packaging services for petroleum products and by-products; (2) natural gas services, including liquids transportation and distribution services and natural gas storage; (3) sulfur and sulfur-based products processing, manufacturing, marketing and distribution; and (4) marine transportation services for petroleum products and by-products.

Forward-Looking Statements
 
Statements about the Partnership's outlook and all other statements in this release other than historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements and all references to financial estimates rely on a number of assumptions concerning future events and are subject to a number of uncertainties and other factors, many of which are outside the Partnership's control, which could cause actual results to differ materially from such statements. While the Partnership believes that the assumptions concerning future events are reasonable, it cautions that there are inherent difficulties in anticipating or predicting certain important factors. A discussion of these factors, including risks and uncertainties, is set forth in the Partnership's annual and quarterly reports filed from time to time with the Securities



and Exchange Commission. The Partnership disclaims any intention or obligation to revise any forward-looking statements, including financial estimates, whether as a result of new information, future events, or otherwise.

Use of Non-GAAP Financial Information
  
The Partnership's management uses a variety of financial and operational measurements other than its financial statements prepared in accordance with United States Generally Accepted Accounting Principles (“GAAP”) to analyze its performance. These include: (1) net income before interest expense, income tax expense, and depreciation and amortization (“EBITDA”), (2) adjusted EBITDA and (3) distributable cash flow. The Partnership's management views these measures as important performance measures of core profitability for its operations and the ability to generate and distribute cash flow, and as key components of its internal financial reporting. The Partnership's management believes investors benefit from having access to the same financial measures that management uses.

EBITDA and Adjusted EBITDA. Certain items excluded from EBITDA and adjusted EBITDA are significant components in understanding and assessing an entity's financial performance, such as cost of capital and historical costs of depreciable assets. The Partnership has included information concerning EBITDA and adjusted EBITDA because it provides investors and management with additional information to better understand the following: financial performance of the Partnership's assets without regard to financing methods, capital structure or historical cost basis; the Partnership's operating performance and return on capital as compared to those of other similarly situated entities; and the viability of acquisitions and capital expenditure projects. The Partnership's method of computing adjusted EBITDA may not be the same method used to compute similar measures reported by other entities. The economic substance behind the Partnership's use of adjusted EBITDA is to measure the ability of the Partnership's assets to generate cash sufficient to pay interest costs, support its indebtedness and make distributions to its unitholders.

Distributable Cash Flow. Distributable cash flow is a significant performance measure used by the Partnership's management and by external users of its financial statements, such as investors, commercial banks and research analysts, to compare basic cash flows generated by the Partnership to the cash distributions it expects to pay unitholders. Distributable cash flow is also an important financial measure for the Partnership's unitholders since it serves as an indicator of the Partnership's success in providing a cash return on investment. Specifically, this financial measure indicates to investors whether or not the Partnership is generating cash flow at a level that can sustain or support an increase in its quarterly distribution rates. Distributable cash flow is also a quantitative standard used throughout the investment community with respect to publicly-traded partnerships because the value of a unit of such an entity is generally determined by the unit's yield, which in turn is based on the amount of cash distributions the entity pays to a unitholder.

EBITDA, adjusted EBITDA and distributable cash flow should not be considered alternatives to, or more meaningful than, net income, cash flows from operating activities, or any other measure presented in accordance with GAAP. The Partnership's method of computing these measures may not be the same method used to compute similar measures reported by other entities.

Additional information concerning the Partnership is available on the Partnership's website at www.martinmidstream.com.

Contact: Joe McCreery, Head of Investor Relations, at (903) 988-6425 and (877) 256-6644.



MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED BALANCE SHEETS
(Unaudited)
(Dollars in thousands)


 
 
March 31, 2015
 
December 31, 2014
Assets
 
 
 
Cash
$
37

 
$
42

Accounts and other receivables, less allowance for doubtful accounts of $2,260 and $1,620, respectively
94,506

 
134,173

Product exchange receivables
232

 
3,046

Inventories
68,564

 
88,718

Due from affiliates
12,269

 
14,512

Other current assets
6,709

 
6,772

Assets held for sale
700

 
40,488

Total current assets
183,017

 
287,751

 
 
 
 
Property, plant and equipment, at cost
1,361,491

 
1,343,674

Accumulated depreciation
(361,650
)
 
(345,397
)
Property, plant and equipment, net
999,841

 
998,277

 
 
 
 
Goodwill
23,802

 
23,802

Investment in unconsolidated entities
134,146

 
134,506

Note receivable - Martin Energy Trading LLC
15,000

 
15,000

Other assets, net
76,351

 
81,465

 
$
1,432,157

 
$
1,540,801

 
 
 
 
Liabilities and Partners’ Capital
 

 
 

Trade and other accounts payable
$
82,954

 
$
125,332

Product exchange payables
10,521

 
10,396

Due to affiliates
6,492

 
4,872

Income taxes payable
1,474

 
1,174

Other accrued liabilities
8,997

 
21,801

Total current liabilities
110,438

 
163,575

 
 
 
 
Long-term debt, net
849,367

 
888,887

Other long-term obligations
2,332

 
2,668

Total liabilities
962,137

 
1,055,130

 
 
 
 
Commitments and contingencies


 


Partners’ capital
470,020

 
485,671

 
$
1,432,157

 
$
1,540,801


These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in the Partnership's Quarterly Report on Form 10-Q to be filed with the Securities and Exchange Commission on April 29, 2015.



MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except per unit amounts)

 
Three Months Ended
 
March 31,
 
2015
 
2014
Revenues:
 
 
 
Terminalling and storage  *
$
33,797

 
$
31,801

Marine transportation  *
20,636

 
23,114

Natural gas services
16,487

 
—

Sulfur services
3,090

 
3,037

Product sales: *
 
 
 
Natural gas services
146,303

 
321,414

Sulfur services
50,047

 
51,170

Terminalling and storage
34,993

 
54,273

 
231,343

 
426,857

Total revenues
305,353

 
484,809

 
 
 
 
Costs and expenses:
 

 
 

Cost of products sold: (excluding depreciation and amortization)
 

 
 

Natural gas services *
137,707

 
309,419

Sulfur services *
36,023

 
37,853

Terminalling and storage *
30,082

 
48,029

 
203,812

 
395,301

Expenses:
 

 
 

Operating expenses  *
45,306

 
42,900

Selling, general and administrative  *
8,806

 
8,456

Depreciation and amortization
22,717

 
13,609

Total costs and expenses
280,641

 
460,266

Other operating loss
(10
)
 
(45
)
Operating income
24,702

 
24,498

 
 
 
 
Other income (expense):
 

 
 

Equity in earnings (loss) of unconsolidated entities
1,740

 
(296
)
Interest expense, net
(10,546
)
 
(11,451
)
Other, net
437

 
(67
)
Total other expense
(8,369
)
 
(11,814
)
 
 
 
 
Net income before taxes
16,333

 
12,684

Income tax expense
(300
)
 
(300
)
Income from continuing operations
16,033

 
12,384

Income (loss) from discontinued operations, net of income taxes
1,215

 
(589
)
Net income
17,248

 
11,795

Less general partner's interest in net income
(4,238
)
 
(236
)
Less income allocable to unvested restricted units
(67
)
 
(32
)
Limited partners' interest in net income
$
12,943

 
$
11,527


These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in the Partnership's Quarterly Report on Form 10-Q to be filed with the Securities and Exchange Commission on April 29, 2015.

*Related Party Transactions Shown Below



MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except per unit amounts)


*Related Party Transactions Included Above
 
Three Months Ended
 
March 31,
 
2015
 
2014
Revenues:
 
 
 
Terminalling and storage
$
20,474

 
$
18,010

Marine transportation
6,745

 
5,849

Product Sales
1,589

 
1,892

Costs and expenses:
 
 
 
Cost of products sold: (excluding depreciation and amortization)
 
 
 
Natural gas services
6,918

 
8,453

Sulfur services
3,624

 
4,865

Terminalling and storage
5,402

 
9,844

Expenses:
 
 
 
Operating expenses
20,400

 
18,239

Selling, general and administrative
5,994

 
5,384


These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in the Partnership's Quarterly Report on Form 10-Q to be filed with the Securities and Exchange Commission on April 29, 2015.


MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except per unit amounts)

 
Three Months Ended
 
March 31,
 
2015
 
2014
Allocation of net income (loss) attributable to:
 
 
 
Limited partner interest:
 
 
 
 Continuing operations
$
12,031

 
$
12,103

 Discontinued operations
912

 
(576
)
 
$
12,943

 
$
11,527

General partner interest:
 
 
 
  Continuing operations
$
3,939

 
$
248

  Discontinued operations
299

 
(12
)
 
$
4,238

 
$
236

 
 
 
 
Net income (loss) per unit attributable to limited partners:
 
 
 
Basic:
 
 
 
Continuing operations
$
0.34

 
$
0.45

Discontinued operations
0.03

 
(0.02
)
 
$
0.37

 
$
0.43

 
 
 
 
Weighted average limited partner units - basic
35,317

 
26,572

 
 
 
 
Diluted:
 
 
 
Continuing operations
$
0.34

 
$
0.45

Discontinued operations
0.03

 
(0.02
)
 
$
0.37

 
$
0.43

 
 
 
 
Weighted average limited partner units - diluted
35,360

 
26,605


These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in the Partnership's Quarterly Report on Form 10-Q to be filed with the Securities and Exchange Commission on April 29, 2015.



MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED STATEMENTS OF CAPITAL
(Unaudited)
(Dollars in thousands)


 
Partners’ Capital
 
 
 
Common Limited
 
General Partner Amount
 
 
 
Units
 
Amount
 
 
Total
Balances - January 1, 2014
26,625,026

 
$
254,028

 
$
6,389

 
$
260,417

Net income
—

 
11,559

 
236

 
11,795

Issuance of common units
132,580

 
5,235

 
—

 
5,235

Issuance of restricted units
6,400

 
—

 
—

 
—

Forfeiture of restricted units
(2,750
)
 
—

 
—

 
—

General partner contribution
—

 
—

 
114

 
114

Cash distributions
—

 
(20,898
)
 
(472
)
 
(21,370
)
Unit-based compensation
—

 
179

 
—

 
179

Purchase of treasury units
(6,400
)
 
(277
)
 
—

 
(277
)
Balances - March 31, 2014
26,754,856

 
$
249,826

 
$
6,267

 
$
256,093

 
 
 
 
 
 
 
 
Balances - January 1, 2015
35,365,912

 
$
470,943

 
$
14,728

 
$
485,671

Net income
—

 
13,010

 
4,238

 
17,248

Issuance of common units
—

 
(145
)
 
—

 
(145
)
Issuance of restricted units
91,950

 
—

 
—

 
—

Forfeiture of restricted units
(1,000
)
 
—

 
—

 
—

General partner contribution
—

 
—

 
55

 
55

Cash distributions
—

 
(28,803
)
 
(4,405
)
 
(33,208
)
Unit-based compensation
—

 
399

 
—

 
399

Balances - March 31, 2015
35,456,862

 
$
455,404

 
$
14,616

 
$
470,020


These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in the Partnership's Quarterly Report on Form 10-Q to be filed with the Securities and Exchange Commission on April 29, 2015.
 


MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)


 
Three Months Ended
 
March 31,
 
2015
 
2014
Cash flows from operating activities:
 
 
 
Net income
$
17,248

 
$
11,795

Less: (Income) loss from discontinued operations
(1,215
)
 
589

Net income from continuing operations
16,033

 
12,384

Adjustments to reconcile net income to net cash provided by operating activities:
 

 
 

Depreciation and amortization
22,717

 
13,609

Amortization of deferred debt issuance costs
868

 
810

Amortization of debt discount
—

 
77

Amortization of premium on notes payable
(82
)
 
—

Loss on sale of property, plant and equipment
12

 
45

Equity in (earnings) loss of unconsolidated entities
(1,740
)
 
296

Unit-based compensation
399

 
179

Return on investment
2,100

 
—

Change in current assets and liabilities, excluding effects of acquisitions and dispositions:
 

 
 

Accounts and other receivables
39,716

 
29,718

Product exchange receivables
2,814

 
1,826

Inventories
20,203

 
1,612

Due from affiliates
2,243

 
(4,349
)
Other current assets
184

 
(381
)
Trade and other accounts payable
(46,504
)
 
(18,098
)
Product exchange payables
125

 
7,909

Due to affiliates
1,620

 
448

Income taxes payable
300

 
300

Other accrued liabilities
(12,345
)
 
(4,677
)
Change in other non-current assets and liabilities
(339
)
 
(43
)
Net cash provided by continuing operating activities
48,324

 
41,665

Net cash used in discontinued operating activities
(1,580
)
 
(5,141
)
Net cash provided by operating activities
46,744

 
36,524

Cash flows from investing activities:
 

 
 

Payments for property, plant and equipment
(12,927
)
 
(16,642
)
Payments for plant turnaround costs
(1,468
)
 
(2,164
)
Proceeds from sale of property, plant and equipment
—

 
245

Proceeds from involuntary conversion of property, plant and equipment
—

 
2,475

Return of investments from unconsolidated entities
—

 
225

Contributions to unconsolidated entities
—

 
(1,195
)
Net cash used in continuing investing activities
(14,395
)
 
(17,056
)
Net cash provided by discontinued investing activities
41,250

 
—

Net cash provided by (used in) investing activities
26,855

 
(17,056
)
Cash flows from financing activities:
 

 
 

Payments of long-term debt
(72,000
)
 
(91,000
)
Proceeds from long-term debt
32,000

 
76,000

Proceeds from issuance of common units, net of issuance related costs
(145
)
 
5,235

General partner contribution
55

 
114

Purchase of treasury units
—

 
(277
)
Payment of debt issuance costs
(306
)
 
(341
)
Cash distributions paid
(33,208
)
 
(21,370
)
Net cash used in financing activities
(73,604
)
 
(31,639
)
Net decrease in cash
(5
)
 
(12,171
)
Cash at beginning of period
42

 
16,542

Cash at end of period
$
37

 
$
4,371

Non-cash additions to property, plant and equipment
$
4,901

 
$
4,833


These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in the Partnership's Quarterly Report on Form 10-Q to be filed with the Securities and Exchange Commission on April 29, 2015.


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 March 31, 2015 and 2014
 
Three Months Ended March 31,
 
Variance
 
Percent Change
 
2015
 
2014
 
 
 
(In thousands, except BBL per day)
 
 
Revenues:
 
 
 
 
 
 
 
Services
$
35,041

 
$
33,024

 
$
2,017

 
6%
Products
34,993

 
54,273

 
(19,280
)
 
(36)%
Total revenues
70,034

 
87,297

 
(17,263
)
 
(20)%
 
 
 
 
 
 
 
 
Cost of products sold
31,161

 
48,525

 
(17,364
)
 
(36)%
Operating expenses
20,353

 
19,752

 
601

 
3%
Selling, general and administrative expenses
873

 
967

 
(94
)
 
(10)%
Depreciation and amortization
9,789

 
8,975

 
814

 
9%
 
7,858

 
9,078

 
(1,220
)
 
(13)%
Other operating loss
(6
)
 
(45
)
 
39

 
(87)%
Operating income
$
7,852

 
$
9,033

 
$
(1,181
)
 
(13)%
 
 
 
 
 
 
 
 
Lubricant sales volumes (gallons)
6,049

 
9,163

 
(3,114
)
 
(34)%
Shore-based throughput volumes (gallons)
42,524

 
61,152

 
(18,628
)
 
(30)%
Smackover refinery throughput volumes (BBL per day)
5,536

 
3,140

 
2,396

 
76%
Corpus Christi crude terminal (BBL per day)
180,575

 
140,346

 
40,229

 
29%


Natural Gas Services Segment

Comparative Results of Operations for the Three Months Ended March 31, 2015 and 2014
 
Three Months Ended March 31,
 
Variance
 
Percent Change
 
2015
 
2014
 
 
 
(In thousands)
 
 
Revenues:
 
 
 
 
 
 
 
Services
$
16,487

 
$
—

 
$
16,487

 

Products
146,303

 
321,414

 
(175,111
)
 
(54)%
Total revenues
162,790

 
321,414

 
(158,624
)
 
(49)%
 
 
 
 
 
 
 
 
Cost of products sold
138,167

 
309,861

 
(171,694
)
 
(55)%
Operating expenses
5,689

 
919

 
4,770

 
519%
Selling, general and administrative expenses
2,101

 
1,286

 
815

 
63%
Depreciation and amortization
8,402

 
121

 
8,281

 
6,844%
Operating income
$
8,431

 
$
9,227

 
$
(796
)
 
(9)%
 
 
 
 
 
 
 
 
Distributions from unconsolidated entities
$
2,100

 
$
780

 
$
1,320

 
169%
 
 
 
 
 
 
 
 
NGL sales volumes (Bbls)
3,894

 
4,723

 
(829
)
 
(18)%




MARTIN MIDSTREAM PARTNERS L.P.
SEGMENT OPERATING INCOME
(Unaudited)
(Dollars and volumes in thousands, except BBL per day)

Sulfur Services Segment

Comparative Results of Operations for the Three Months Ended March 31, 2015 and 2014    
 
Three Months Ended March 31,
 
Variance
 
Percent Change
 
2015
 
2014
 
 
 
(In thousands)
 
 
Revenues:
 
 
 
 
 
 
 
Services
$
3,090

 
$
3,037

 
$
53

 
2%
Products
50,047

 
51,170

 
(1,123
)
 
(2)%
Total revenues
53,137

 
54,207

 
(1,070
)
 
(2)%
 
 
 
 
 
 
 
 
Cost of products sold
36,113

 
37,943

 
(1,830
)
 
(5)%
Operating expenses
4,283

 
3,977

 
306

 
8%
Selling, general and administrative expenses
1,062

 
1,115

 
(53
)
 
(5)%
Depreciation and amortization
2,126

 
1,983

 
143

 
7%
Operating income
$
9,553

 
$
9,189

 
$
364

 
4%
 
 
 
 
 
 
 
 
Sulfur (long tons)
216

 
190

 
26

 
14%
Fertilizer (long tons)
96

 
91

 
5

 
5%
Total sulfur services volumes (long tons)
312

 
281

 
31

 
11%


Marine Transportation Segment

Comparative Results of Operations for the Three Months Ended March 31, 2015 and 2014
 
Three Months Ended March 31,
 
Variance
 
Percent Change
 
2015
 
2014
 
 
 
(In thousands)
 
 
Revenues
$
21,946

 
$
24,114

 
$
(2,168
)
 
(9)%
Operating expenses
15,906

 
19,447

 
(3,541
)
 
(18)%
Selling, general and administrative expenses
(40
)
 
191

 
(231
)
 
(121)%
Depreciation and amortization
2,400

 
2,530

 
(130
)
 
(5)%
Operating income
$
3,680

 
$
1,946

 
$
1,734

 
89%
 









Non-GAAP Financial Measures

The following table reconciles the non-GAAP financial measurements used by management to our most directly comparable GAAP measures for the three and three months ended March 31, 2015 and 2014.

Reconciliation of EBITDA, Adjusted EBITDA, and Distributable Cash Flow
 
Three Months Ended
 
March 31,
 
2015
 
2014
 
 
 
 
Net income
$
17,248

 
$
11,795

Less: (Income) loss from discontinued operations, net of income taxes
(1,215
)
 
589

Income from continuing operations
16,033

 
12,384

Adjustments:
 
 
 
Interest expense
10,546

 
11,451

Income tax expense
300

 
300

Depreciation and amortization
22,717

 
13,609

EBITDA
49,596

 
37,744

Adjustments:
 
 
 
Equity in (earnings) loss of unconsolidated entities
(1,740
)
 
296

Loss on sale of property, plant and equipment
12

 
45

Distributions from unconsolidated entities
2,100

 
780

Unit-based compensation
399

 
179

Adjusted EBITDA
50,367

 
39,044

Adjustments:
 
 
 
Interest expense
(10,546
)
 
(11,451
)
Income tax expense
(300
)
 
(300
)
Amortization of debt discount
—

 
77

Amortization of debt premium
(82
)
 
—

Amortization of deferred debt issuance costs
868

 
810

Payments for plant turnaround costs
(1,468
)
 
(2,164
)
Maintenance capital expenditures
(1,758
)
 
(4,338
)
Distributable Cash Flow
$
37,081

 
$
21,678








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