MMLP
$1.74
Martin Midstrm LP
($.04)
(2.25%)
Earnings Details
3rd Quarter September 2020
Wednesday, October 21, 2020 5:00:00 PM
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Summary

Martin Midstrm LP (MMLP) Recent Earnings

Martin Midstrm LP (MMLP) reported a 3rd Quarter September 2020 loss of $0.27 per share on revenue of $152.5 million. The consensus estimate was a loss of $0.30 per share. Revenue fell 14.3% compared to the same quarter a year ago.

Martin Midstream Partners LP provides terminalling and storage services for petroleum products and by-products; natural gas services; sulfur and sulfur-based products and marine transportation services.

Results
Reported Earnings
($0.27)
Earnings Whisper
-
Consensus Estimate
($0.30)
Reported Revenue
$152.5 Mil
Revenue Estimate
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Martin Midstream Partners Reports Third Quarter 2020 Financial Results and Declares Quarterly Cash Distribution

  • Financial performance exceeds expectations in challenging environment
  • Reported net loss of $10.8 million and $4.2 million for the three and nine months ended September 30, 2020, respectively, which were negatively impacted by an $8.5 million charge related to the exchange of our senior notes
  • Reported adjusted EBITDA of $22.5 million and $77.5 million for the three and nine months ended September 30, 2020, respectively
  • Generated distributable cash flow of $8.1 million and $38.9 million for the three and nine months ended September 30, 2020, respectively
  • Successfully completed exchange offer and cash tender offer of senior notes
  • Affirms guidance range for adjusted EBITDA and capital expenditures

KILGORE, Texas, Oct. 21, 2020 (GLOBE NEWSWIRE) -- Martin Midstream Partners L.P. (Nasdaq:MMLP) (the "Partnership") today announced its financial results for the third quarter of 2020.

Ruben Martin, President and Chief Executive Officer of Martin Midstream GP LLC, the general partner of the Partnership said, “The Partnership delivered strong results in the third quarter even with the continuing impact on demand related to COVID-19 coupled with hurricanes in the Gulf Coast region effecting refinery operations.  The diversity of our business model and customer base has proven resilient in these difficult and changing macro-economic times.  Although the third quarter is typically our weakest, due to the cyclical nature of our businesses, we had year over year EBITDA growth in three of our four business segments.  Our team continues to make every effort to provide our employees and customers with a safe and healthy operating environment.”

THIRD QUARTER 2020 OPERATING RESULTS BY BUSINESS SEGMENT

TERMINALLING AND STORAGE (“T&S”)

T&S Operating Income for the three months ended September 30, 2020 and 2019 was $7.0 million and $5.6 million, respectively.

Adjusted segment EBITDA for T&S was $14.2 million and $13.3 million for the three months ended September 30, 2020 and 2019, respectively, reflecting improved margins on packaged lubricants products from lower production cost and operating efficiencies, reduced operating expenses from lower repairs and maintenance and labor cost at our Specialty Terminals, offset by reduced grease volumes related to lower demand in the oil field and construction industries due to COVID-19, expired capital recovery fees at the Smackover Refinery and decreased fees related to a crude pipeline gathering rate adjustment.

TRANSPORTATION

Transportation Operating Income for the three months ended September 30, 2020 and 2019 was $1.1 million and $4.4 million, respectively.

Adjusted segment EBITDA for Transportation was $5.5 million and $8.2 million for the three months ended September 30, 2020 and 2019, respectively, reflecting lower marine utilization and reduced day rates along with lower land transportation load count related to demand destruction and lower refinery utilization as a result of COVID-19 and gulf coast hurricanes experienced during the three months ended September 30, 2020

SULFUR SERVICES

Sulfur Services Operating Income for the three months ended September 30, 2020 and 2019 was $5.6 million and $0.3 million, respectively.

Adjusted segment EBITDA for Sulfur Services was $4.2 million and $3.1 million for the three months ended September 30, 2020 and 2019, respectively, reflecting resumed operations of the Neches Priller offset by reduced fertilizer volumes from extended fertilizer plant turnaround time and reduced fertilizer demand as a result of COVID-19.

NATURAL GAS LIQUIDS (“NGL”)

NGL Operating Income for the three months ended September 30, 2020 and 2019 was $1.8 million and $19.7 million, respectively.

Adjusted segment EBITDA from continuing operations for NGL was $2.8 million and $1.6 million for the three months ended September 30, 2020 and 2019, respectively, primarily reflecting an increase in volumes in 2020 from increased seasonal demand within the butane optimization business.

UNALLOCATED SELLING, GENERAL AND ADMINISTRATIVE EXPENSE (“USGA”)

USGA expenses included in operating income were $4.5 million for both the three months ended September 30, 2020 and 2019.

USGA expenses included in adjusted EBITDA were $4.2 million for both the three months ended September 30, 2020 and 2019.

2020 FINANCIAL GUIDANCE UPDATE

The majority of our refinery services are focused on the Gulf Coast Region whose states have reopened their economies. However, the impact on refinery utilization related to the demand reduction from COVID-19 and recent gulf coast hurricanes experienced during the quarter remains unclear.  The Partnership believes that our performance through the first nine months coupled with expectations for the coming quarter will allow our annualized Adjusted EBITDA, Expansion Capital Expenditures and Maintenance Capital Expenditures to fall within the previously provided range below:

MMLP 2020 Guidance $ millions
Adjusted EBITDA $95 - 107
Expansion Capital Expenditures $10 - 13
Maintenance Capital Expenditures $14 - 16

The Partnership has not provided comparable GAAP financial information on a forward-looking basis because it would require the Partnership to create estimated ranges on a GAAP basis, which would entail unreasonable effort as the adjustments required to reconcile forward-looking non-GAAP measures cannot be predicted with a reasonable degree of certainty but may include, among others, costs related to debt amendments and unusual charges, expenses and gains.  Some or all of those adjustments could be significant.

LIQUIDITY

At September 30, 2020, the Partnership had $205 million drawn on its $300 million revolving credit facility, a $24 million increase from June 30, 2020.  The majority of the increase was attributable to the NGL inventory working capital sub-limit which increased $20 million quarter over quarter.   As previously announced, on August 12, 2020, the Partnership successfully completed an exchange offer and cash tender offer (together the “Offers”) for its senior unsecured notes due February 2021.  As a result of the Offers, the Partnership has the following outstanding senior notes: senior unsecured notes due 2021 of $28.8 million, senior secured notes of $53.8 million due 2024 and senior secured notes of $291.9 million due 2025, for a total of senior notes outstanding of $374.5 million.  Accordingly, the Partnership’s leverage ratio, as calculated under the revolving credit facility, was 4.9 times on September 30, 2020 compared to 4.8 times on June 30, 2020.  The Partnership is in compliance with all debt covenants as of September 30, 2020.

QUARTERLY CASH DISTRIBUTION

The Partnership has declared a quarterly cash distribution of $0.005 per unit for the quarter ended September 30, 2020.  The distribution is payable on November 13, 2020 to common unitholders of record as of the close of business on November 6, 2020.  The ex-dividend date for the cash distribution is November 5, 2020.

COVID-19 RESPONSE

The Partnership initiated protocols in response to the COVID-19 pandemic which include work from home initiatives to protect the health and safety of our employees as well as the communities where we operate, travel restrictions, and training personnel regarding preventative measures when accessing docks, vessels and operating locations.  At this time all facilities are operational and monitored closely.

RESULTS OF OPERATIONS

The Partnership had a net loss from continuing operations for the three months ended September 30, 2020 of $10.8 million, a loss of $0.27 per limited partner unit.  The Partnership had net income from continuing operations for the three months ended September 30, 2019 of $13.3 million, or $0.33 per limited partner unit.  Adjusted EBITDA from continuing operations for the three months ended September 30, 2020 was $22.5 million compared to the three months ended September 30, 2019 of $22.0 million.  Distributable cash flow from continuing operations for the three months ended September 30, 2020 was $8.1 million compared to the three months ended September 30, 2019 of $8.3 million

The Partnership had no net income, adjusted EBITDA or distributable cash flow from discontinued operations for the three months ended September 30, 2020 or 2019.   The Partnership had no adjusted EBITDA from discontinued operations for the three months ended September 30, 2020 or 2019. 

The Partnership had a net loss from continuing operations for the nine months ended September 30, 2020 of $4.2 million, a loss of $0.11 per limited partner unit.  The Partnership had a net loss from continuing operations for the nine months ended September 30, 2019 of $2.2 million, a loss of $0.05 per limited partner unit.  Adjusted EBITDA from continuing operations for the nine months ended September 30, 2020 was $77.5 million compared to the nine months ended September 30, 2019 of $72.8 million.  Distributable cash flow from continuing operations for the nine months ended September 30, 2020 was $38.9 million compared to the nine months ended September 30, 2019 of $21.0 million

The Partnership had no net income from discontinued operations for the nine months ended September 30, 2020 compared to a loss of $179.5 million, or $4.55 per limited partner unit for the nine months ended September 30, 2019.   The Partnership had no adjusted EBITDA from discontinued operations for the nine months ended September 30, 2020 compared to $10.7 million for the nine months ended September 30, 2019.  The Partnership had no distributable cash flow from discontinued operations for the nine months ended September 30, 2020 compared to $9.8 million for the nine months ended September 30, 2019

Revenues for the three months ended September 30, 2020 were $152.5 million compared to the three months ended September 30, 2019 of $177.9 million.  Revenues for the nine months ended September 30, 2020 were $492.1 million compared to the nine months ended September 30, 2019 of $605.3 million.

Distributable cash flow from continuing operations, distributable cash flow from discontinued operations, EBITDA, adjusted EBITDA from continuing operations, and adjusted EBITDA from discontinued operations 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 from continuing operations, 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.

An attachment accompanying this announcement and 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 third quarter 2020 to the Partnership's Adjusted EBITDA for the third quarter 2019 and is available at http://ml.globenewswire.com/Resource/Download/02a3d060-d2b7-4fa2-932c-da0c46109eff.

Investors' Conference Call

An investors conference call to review the third quarter results will be held on Thursday, October 22, 2020 at 8:00 a.m. Central Time. The live conference call will be available by calling (877) 878-2695. For a limited time, an audio replay of the conference call will be available by calling (855) 859-2056. The conference ID is 9123705. An archive of the replay will be on Martin Midstream Partners’ website at www.MMLP.com.

About Martin Midstream Partners

Martin Midstream Partners L.P. 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 lines include: (1) terminalling, processing, storage, and packaging services for petroleum products and by-products; (2) land and marine transportation services for petroleum products and by-products, chemicals, and specialty products; (3) sulfur and sulfur-based products processing, manufacturing, marketing and distribution; and (4) natural gas liquids marketing, distribution and transportation services.

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 or operational estimates rely on a number of assumptions concerning future events and are subject to a number of uncertainties, including (i) the current and potential impacts of the COVID-19 pandemic generally, on an industry-specific basis, and on the Partnership’s specific operations and business, (ii) the effects of the continued volatility of commodity prices and the related macroeconomic and political environment, and (iii) other factors, many of which are outside its control, which could cause actual results to differ materially from such statements. While the Partnership believes that the assumptions concerning future events are reasonable, it cautions that there are inherent difficulties in anticipating or predicting certain important factors.  A discussion of these factors, including risks and uncertainties, is set forth in the Partnership’s annual and quarterly reports filed from time to time with the Securities and Exchange Commission.  The 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

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, Adjusted EBITDA from Continuing Operations, and Adjusted EBITDA from Discontinued Operations.  Certain items excluded from EBITDA, adjusted EBITDA from continuing operations, and adjusted EBITDA from discontinued operations 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, adjusted EBITDA from continuing operations, and adjusted EBITDA from discontinued operations 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 and Distributable Cash Flow from Discontinued Operations.  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 from continuing operations, adjusted EBITDA from discontinued operations, distributable cash flow, and distributable cash flow from discontinued operations, 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.MMLP.com or by contacting:

Sharon Taylor - Head of Investor Relations
(877) 256-6644

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

 September 30,
2020
 December 31,
2019
 (Unaudited) (Audited)
Assets   
Cash$1,862  $2,856 
Accounts and other receivables, less allowance for doubtful accounts of $537 and $532, respectively55,461  87,254 
Product exchange receivables212   
Inventories77,724  62,540 
Due from affiliates18,932  17,829 
Other current assets9,587  5,833 
Assets held for sale  5,052 
Total current assets163,778  181,364 
    
Property, plant and equipment, at cost902,965  884,728 
Accumulated depreciation(506,645) (467,531)
Property, plant and equipment, net396,320  417,197 
    
Goodwill17,705  17,705 
Right-of-use assets23,201  23,901 
Deferred income taxes, net22,220  23,422 
Other assets, net3,116  3,567 
Total assets$626,340  $667,156 
    
Liabilities and Partners’ Capital (Deficit)   
Current installments of long-term debt and finance lease obligations$31,979  $6,758 
Trade and other accounts payable45,326  64,802 
Product exchange payables3,044  4,322 
Due to affiliates467  1,470 
Income taxes payable335  472 
Fair value of derivatives391  667 
Other accrued liabilities23,153  28,789 
Total current liabilities104,695  107,280 
    
Long-term debt, net541,002  569,788 
Finance lease obligations348  717 
Operating lease liabilities16,005  16,656 
Other long-term obligations8,753  8,911 
Total liabilities670,803  703,352 
    
Commitments and contingencies   
Partners’ capital (deficit)(44,463) (36,196)
Total partners’ capital (deficit)(44,463) (36,196)
Total liabilities and partners' capital (deficit)$626,340  $667,156 

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

 Three Months Ended Nine Months Ended
 September 30, September 30,
 2020 2019 2020 2019
Revenues:       
Terminalling and storage  *$20,706  $21,193  $61,088  $65,674 
Transportation  *31,938  40,211  102,364  119,327 
Sulfur services2,915  2,859  8,744  8,576 
Product sales: *       
Natural gas liquids52,350  60,871  164,860  234,743 
Sulfur services18,965  20,213  74,879  81,945 
Terminalling and storage25,659  32,553  80,119  94,991 
 96,974  113,637  319,858  411,679 
Total revenues152,533  177,900  492,054  605,256 
        
Costs and expenses:       
Cost of products sold: (excluding depreciation and amortization)       
Natural gas liquids *44,908  51,736  139,036  211,472 
Sulfur services *13,313  14,442  46,167  56,262 
Terminalling and storage *19,124  26,009  64,242  78,998 
 77,345  92,187  249,445  346,732 
Expenses:       
Operating expenses  *43,105  51,071  138,589  156,499 
Selling, general and administrative  *10,339  10,474  30,659  30,900 
Depreciation and amortization15,276  15,009  45,858  44,997 
Total costs and expenses146,065  168,741  464,551  579,128 
        
Other operating income (loss), net23  16,302  2,548  13,949 
Gain on involuntary conversion of property, plant and equipment4,522    4,522   
Operating income11,013  25,461  34,573  40,077 
        
Other income (expense):       
Interest expense, net(12,943) (11,973) (32,245) (40,630)
Gain on retirement of senior unsecured notes    3,484   
Loss on exchange of senior unsecured notes(8,516)   (8,516)  
Other, net  (1) 7  3 
Total other expense(21,459) (11,974) (37,270) (40,627)
        
Net income (loss) before taxes(10,446) 13,487  (2,697) (550)
Income tax expense(373) (237) (1,510) (1,572)
Income (loss) from continuing operations(10,819) 13,250  (4,207) (2,122)
Income from discontinued operations, net of income taxes      (179,466)
Net income (loss)(10,819) 13,250  (4,207) (181,588)
Less general partner's interest in net (income) loss216  (265) 84  3,632 
Less (income) loss allocable to unvested restricted units53  (72) 8  (5)
Limited partners' interest in net income (loss)$(10,550) $12,913  $(4,115) $(177,961)

*Related Party Transactions Shown Below

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

*Related Party Transactions Included Above

 Three Months Ended Nine Months Ended
 September 30, September 30,
 2020 2019 2020 2019
Revenues:*       
Terminalling and storage$15,902 $17,538 $47,718 $53,987
Transportation5,514 6,442 16,801 17,941
Product Sales69 122 199 829
Costs and expenses:*       
Cost of products sold: (excluding depreciation and amortization)       
Sulfur services2,512 2,620 7,833 8,078
Terminalling and storage4,303 6,300 14,329 19,412
Expenses:       
Operating expenses18,915 21,745 60,126 66,409
Selling, general and administrative8,356 8,358 24,723 24,148

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

 Three Months Ended Nine Months Ended
 September 30, September 30,
 2020 2019 2020 2019
Allocation of net income (loss) attributable to:       
Limited partner interest:       
Continuing operations$(10,550) $12,913  $(4,115) $(2,080)
Discontinued operations      (175,881)
 $(10,550) $12,913  $(4,115) $(177,961)
General partner interest:       
Continuing operations$(216) $265  $(84) $(42)
Discontinued operations      (3,590)
 $(216) $265  $(84) $(3,632)
        
Net income (loss) per unit attributable to limited partners:       
Basic:       
Continuing operations$(0.27) $0.33  $(0.11) $(0.05)
Discontinued operations      (4.55)
 $(0.27) $0.33  $(0.11) $(4.60)
Weighted average limited partner units - basic38,662  38,653  38,655  38,661 
Diluted:       
Continuing operations$(0.27) $0.33  $(0.11) $(0.05)
Discontinued operations      (4.55)
 $(0.27) $0.33  $(0.11) $(4.60)
Weighted average limited partner units - diluted38,662  38,653  38,655  38,661 

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

   Partners’ Capital (Deficit)  
   Common Limited
     
 Parent Net
 Investment  
 Units
 Amount
  General
Partner
Amount
   Total 
Balances - January 1, 2019$23,720  39,032,237  $258,085  $6,627  $288,432  
Net loss    (177,956) (3,632) (181,588) 
Issuance of common units, net    (289)   (289) 
Issuance of restricted units  16,944        
Forfeiture of restricted units  (154,288)       
Cash distributions    (38,480) (785) (39,265) 
Unit-based compensation    1,064    1,064  
Purchase of treasury units  (31,504) (392)   (392) 
Excess purchase price over carrying value of acquired assets    (102,393)   (102,393) 
Deferred taxes on acquired assets and liabilities    24,781    24,781  
Contribution to parent(23,720)       (23,720) 
Balances - September 30, 2019$  38,863,389  $(35,580) $2,210  $(33,370) 
             
Balances - January 1, 2020$  38,863,389  $(38,342) $2,146  $(36,196) 
Net income    (4,123) (84) (4,207) 
Issuance of restricted units  81,000        
Forfeiture of restricted units  (84,134)       
Cash distributions    (5,019) (102) (5,121) 
Unit-based compensation    1,070    1,070  
Purchase of treasury units  (7,748) (9)   (9) 
Balances - September 30, 2020$  38,852,507  $(46,423) $1,960  $(44,463) 

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

 Nine Months Ended
 September 30,
 2020 2019
Cash flows from operating activities:   
Net loss$(4,207) $(181,588)
Less:  Loss from discontinued operations, net of income taxes  179,466 
Net loss from continuing operations(4,207) (2,122)
Adjustments to reconcile net loss to net cash provided by operating activities:   
Depreciation and amortization45,858  44,997 
Amortization and write-off of deferred debt issuance costs2,674  3,558 
Amortization of premium on notes payable(191) (230)
Deferred income tax expense1,202  1,100 
(Gain) loss on sale of property, plant and equipment, net153  (13,949)
Gain on involuntary conversion of property, plant and equipment(4,522)  
Non-cash impact related to exchange of senior unsecured notes(749)  
Gain on retirement of senior unsecured notes(3,484)  
Derivative (income) loss(815) (280)
Net cash paid for commodity derivatives539  (249)
Unit-based compensation1,070  1,064 
Change in current assets and liabilities, excluding effects of acquisitions and dispositions:   
Accounts and other receivables30,012  25,748 
Product exchange receivables(212) 164 
Inventories(15,184) (11,707)
Due from affiliates(1,103) 1,150 
Other current assets(6,130) (2,654)
Trade and other accounts payable(17,117) (10,577)
Product exchange payables(1,278) (7,257)
Due to affiliates(1,003) (1,468)
Income taxes payable(137) 65 
Other accrued liabilities(5,534) (8,904)
Change in other non-current assets and liabilities(692) (600)
Net cash provided by continuing operating activities19,150  17,849 
Net cash provided by discontinued operating activities  7,770 
Net cash provided by operating activities19,150  25,619 
    
Cash flows from investing activities:   
Payments for property, plant and equipment(23,705) (22,797)
Acquisitions  (23,720)
Payments for plant turnaround costs(637) (5,117)
Proceeds from involuntary conversion of property, plant and equipment7,203   
Proceeds from sale of property, plant and equipment4,392  18,303 
Net cash used in continuing investing activities(12,747) (33,331)
Net cash provided by discontinued investing activities  209,155 
Net cash provided by (used in) investing activities(12,747) 175,824 
Cash flows from financing activities:   
Payments of long-term debt and finance lease obligations(257,658) (639,308)
Proceeds from long-term debt259,019  586,000 
Proceeds from issuance of common units, net of issuance related costs  (289)
General partner contribution   
Purchase of treasury units(9) (392)
Payment of debt issuance costs(3,628) (4,294)
Excess purchase price over carrying value of acquired assets  (102,393)
Cash distributions paid(5,121) (39,265)
Net cash used in financing activities(7,397) (199,941)
Net increase (decrease) in cash(994) 1,502 
Cash at beginning of period2,856  300 
Cash at end of period$1,862  $1,802 
Non-cash additions to property, plant and equipment$1,432  $1,045 

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

Terminalling and Storage Segment

   Comparative Results of Operations for the Three Months Ended September 30, 2020 and 2019

 Three Months Ended
September 30,
 Variance
  Percent
Change

 2020 2019         
      
 (In thousands, except BBL per day)
     
Revenues:                
Services$22,512  $22,806  $(294)  (1)%
Products25,676  32,570  (6,894)  (21)%
Total revenues48,188  55,376  (7,188)  (13)%
          
Cost of products sold20,381  27,439  (7,058)  (26)%
Operating expenses12,064  12,947  (883)  (7)%
Selling, general and administrative expenses1,537  1,724  (187)  (11)%
Depreciation and amortization7,294  7,690  (396)  (5)%
 6,912  5,576  1,336   24 %
Other operating income, net1    1      
Gain on involuntary conversion of property, plant and equipment62    62      
Operating income$6,975  $5,576  $1,399   25 %
             
Shore-based throughput volumes (guaranteed minimum) (gallons)20,000  20,000      %
Smackover refinery throughput volumes (guaranteed minimum BBL per day)6,500  6,500      %

   Comparative Results of Operations for the Nine Months Ended September 30, 2020 and 2019

 Nine Months Ended
September 30,
 Variance Percent
Change
 2020 2019  
      
 (In thousands, except BBL per day)  
Revenues:       
Services$66,115   $70,572  $(4,457)  (6)%
Products80,183   95,047  (14,864)  (16)%
Total revenues146,298   165,619  (19,321)  (12)%
        
Cost of products sold68,066   83,213  (15,147)  (18)%
Operating expenses37,269   39,557  (2,288)  (6)%
Selling, general and administrative expenses4,594   4,451  143   3 %
Depreciation and amortization22,022   23,353  (1,331)  (6)%
 14,347   15,045  (698)  (5)%
Other operating income (loss), net(3,053)  17  (3,070)  (18,059)%
Gain on involuntary conversion of property, plant and equipment62     62    
Operating income$11,356   $15,062  $(3,706)  (25)%
        
Shore-based throughput volumes (guaranteed minimum) (gallons)60,000   60,000      %
Smackover refinery throughput volumes (guaranteed minimum) (BBL per day)6,500   6,500      %

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

Transportation Segment

   Comparative Results of Operations for the Three Months Ended September 30, 2020 and 2019

 Three Months Ended
September 30,
 Variance Percent
Change
 2020 2019  
      
 (In thousands)  
Revenues$35,712  $44,631  $(8,919)  (20)%
Operating expenses28,144  34,281  (6,137)  (18)%
Selling, general and administrative expenses2,050  2,177  (127)  (6)%
Depreciation and amortization4,412  3,877  535   14 %
 1,106  4,296  (3,190)  (74)%
Other operating income, net21  150  (129)  (86)%
Operating income$1,127  $4,446  $(3,319)  (75)%

   Comparative Results of Operations for the Nine Months Ended September 30, 2020 and 2019

 Nine Months Ended
September 30,
 Variance Percent
Change
 2020 2019  
      
 (In thousands)  
Revenues$116,145  $137,050  $(20,905)  (15)%
Operating expenses91,637  106,058  (14,421)  (14)%
Selling, general and administrative expenses6,243  6,242  1    %
Depreciation and amortization13,020  11,225  1,795   16 %
 $5,245  $13,525  $(8,280)  (61)%
Other operating loss, net(1,174) (2,235) 1,061   47 %
Operating income$4,071  $11,290  $(7,219)  (64)%

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

Sulfur Services Segment

   Comparative Results of Operations for the Three Months Ended September 30, 2020 and 2019

 Three Months Ended
September 30,
 Variance Percent
Change
 2020 2019  
      
 (In thousands)  
Revenues:       
Services$2,915 $2,859 $56   2 %
Products18,965 20,213 (1,248)  (6)%
Total revenues21,880 23,072 (1,192)  (5)%
        
Cost of products sold14,141 15,807 (1,666)  (11)%
Operating expenses2,501 2,883 (382)  (13)%
Selling, general and administrative expenses1,166 1,260 (94)  (7)%
Depreciation and amortization2,953 2,831 122   4 %
 1,119 291 828   285 %
Other operating income (loss), net1  1    
Gain on involuntary conversion of property, plant and equipment4,460  4,460    
Operating income$5,580 $291 $5,289   1,818 %
           
Sulfur (long tons)154 180 (26)  (14)%
Fertilizer (long tons)44 59 (15)  (25)%
Total sulfur services volumes (long tons)198 239 (41)  (17)%

   Comparative Results of Operations for the Nine Months Ended September 30, 2020 and 2019    

 Nine Months Ended
September 30,
 Variance Percent
Change
 2020 2019  
      
      
 (In thousands)  
Revenues:       
Services$8,744  $8,576  $168   2 %
Products74,892  81,945  (7,053)  (9)%
Total revenues83,636  90,521  (6,885)  (8)%
        
Cost of products sold49,546  61,049  (11,503)  (19)%
Operating expenses8,553  7,835  718   9 %
Selling, general and administrative expenses3,535  3,689  (154)  (4)%
Depreciation and amortization8,978  8,553  425   5 %
 13,024  9,395  3,629   39 %
Other operating income (loss), net6,777  (1) 6,778   677,800 %
Gain on involuntary conversion of property, plant and equipment4,460    4,460    
Operating income$24,261  $9,394  $14,867   158 %
        
Sulfur (long tons)503  471  32   7 %
Fertilizer (long tons)209  214  (5)  (2)%
Total sulfur services volumes (long tons)712  685  27   4 %

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

Natural Gas Liquids Segment

   Comparative Results of Operations for the Three Months Ended September 30, 2020 and 2019

 Three Months Ended
September 30,
 Variance Percent
Change
 2020 2019  
      
 (In thousands)  
Products Revenues$52,350 $60,871 $(8,521)  (14)%
Cost of products sold47,723 54,273 (6,550)  (12)%
Operating expenses1,039 1,624 (585)  (36)%
Selling, general and administrative expenses1,117 852 265   31 %
Depreciation and amortization617 611 6   1 %
 1,854 3,511 (1,657)  (47)%
Other operating income, net 16,152 (16,152)  (100)%
Operating income$1,854 $19,663 $(17,809)  (91)%
        
NGL sales volumes (Bbls)2,572 1,905 667   35 %

   Comparative Results of Operations for the Nine Months Ended September 30, 2020 and 2019

 Nine Months Ended
September 30,
 Variance Percent
Change
 2020 2019  
      
 (In thousands)  
Products Revenues$164,865  $234,743  $(69,878)  (30)%
Cost of products sold148,562  222,974  (74,412)  (33)%
Operating expenses3,128  5,010  (1,882)  (38)%
Selling, general and administrative expenses3,194  3,049  145   5 %
Depreciation and amortization1,838  1,866  (28)  (2)%
 8,143  1,844  6,299   342 %
Other operating income (loss), net(2) 16,168  (16,170)  (100)%
Operating income (loss)$8,141  $18,012  $(9,871)  (55)%
        
NGL sales volumes (Bbls)6,952  6,269  683   11  %

Unallocated Selling, General and Administrative Expenses

   Comparative Results of Operations for the Three and Nine Months Ended September 30, 2020 and 2019

 Three Months Ended
September 30,
 Variance Percent
Change
 Nine Months Ended
September 30,
 Variance Percent
Change
 2020 2019   2020 2019  
            
 (In thousands)   (In thousands)  
Indirect selling, general and administrative expenses$4,523  $4,515  $8  — % $13,256   $13,681   $(425)  (3)%

Non-GAAP Financial Measures

The following table reconciles the non-GAAP financial measurements used by management to our most directly comparable GAAP measures for the three and nine months ended September 30, 2020 and 2019.

Reconciliation of EBITDA, Adjusted EBITDA, and Distributable Cash Flow

 Three Months Ended Nine Months Ended
 September 30, September 30,
 2020 2019 2020 2019
        
 (in thousands) (in thousands)
Net income (loss)$(10,819) $13,250  $(4,207) $(181,588)
Less:  Loss from discontinued operations, net of income taxes      179,466 
Income (loss) from continuing operations(10,819) 13,250  (4,207) (2,122)
Adjustments:       
Interest expense, net12,943  11,973  32,245  40,630 
Income tax expense373  237  1,510  1,572 
Depreciation and amortization15,276  15,009  45,858  44,997 
EBITDA from Continuing Operations17,773  40,469  75,406  85,077 
Adjustments:       
(Gain) loss on sale of property, plant and equipment, net(22) (16,302) 153  (13,949)
Gain on involuntary conversion of property, plant and equipment(4,522)   (4,522)  
Unrealized mark-to-market on commodity derivatives393  (2,602) (276) (529)
Transaction costs associated with acquisitions      224 
Non-cash insurance related accruals    250  500 
Lower of cost or market adjustments35  104  370  407 
Loss on exchange of senior unsecured notes8,516    8,516   
Gain on repurchase of senior unsecured notes    (3,484)  
Unit-based compensation361  349  1,070  1,064 
Adjusted EBITDA from Continuing Operations22,534  22,018  77,483  72,794 
Adjustments:       
Interest expense, net(12,943) (11,973) (32,245) (40,630)
Income tax expense(373) (237) (1,510) (1,572)
Amortization of debt premium(38) (77) (191) (230)
Amortization of deferred debt issuance costs1,683  1,080  2,674  3,558 
Deferred income tax expense184  244  1,202  1,100 
Payments for plant turnaround costs(406) (375) (637) (5,117)
Maintenance capital expenditures(2,576) (2,389) (7,882) (8,876)
Distributable Cash Flow from Continuing Operations$8,065  $8,291  $38,894  $21,027 
        
Loss from discontinued operations, net of income taxes$  $  $  $(179,466)
Adjustments:       
Depreciation and amortization      8,161 
EBITDA from Discontinued Operations      (171,305)
Loss on sale of property, plant and equipment, net      178,781 
Non-cash insurance related accruals      3,213 
EBITDA and Adjusted EBITDA from Discontinued Operations      10,689 
Maintenance capital expenditures      (912)
Distributable Cash Flow from Discontinued Operations$  $  $  $9,777 

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Source: Martin Midstream Partners L.P.