Martin Midstream Partners(MMLP) - 2025 Q1 - Quarterly Results

First Quarter 2025 Financial Results Overview Financial Highlights Martin Midstream Partners reported a net loss of $1.0 million and decreased Adjusted EBITDA in Q1 2025, yet maintained full-year guidance and declared a $0.005 dividend Q1 2025 Key Financial Metrics vs. Q1 2024 | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Income (Loss) (million) | $(1.0) | $3.3 | | Adjusted EBITDA (million) | $27.8 | $30.4 | | Quarterly Cash Dividend ($/unit) | $0.005 / unit | N/A | - The Partnership maintained its full-year adjusted EBITDA guidance of $109.1 million[4] - The Q1 2025 net loss includes $0.8 million of costs associated with the termination of the merger agreement with Martin Resource Management Corporation[4] Management Commentary Management noted a "good start" to 2025, with strong Sulfur Services and propane, but expressed caution on geopolitical risks and noted higher expenses in Terminalling and Storage - Management is cautious about geopolitical uncertainty and trade tensions, which could indirectly impact the business, particularly the transportation segment, if proposed tariffs slow the U.S. economy[3] - The adjusted leverage ratio increased from 3.96x at year-end 2024 to 4.21x as of March 31, 2025, an expected increase due to semi-annual interest payments on outstanding notes[3] - Capital expenditures for the quarter included $0.9 million for growth and $4.7 million for maintenance[3] Segment Performance Analysis Segment Financial Summary Sulfur Services saw significant Adjusted EBITDA growth in Q1 2025, while Transportation, Terminalling and Storage, and Specialty Products segments experienced declines Segment Operating Income and Adjusted EBITDA (in millions) | Business Segment | Operating Income Q1 2025 (million) | Operating Income Q1 2024 (million) | Adjusted EBITDA Q1 2025 (million) | Adjusted EBITDA Q1 2024 (million) | | :--- | :--- | :--- | :--- | :--- | | Transportation | $5.5 | $9.8 | $8.0 | $13.2 | | Terminalling and Storage | $2.1 | $3.7 | $7.7 | $9.0 | | Sulfur Services | $7.7 | $3.7 | $11.5 | $6.7 | | Specialty Products | $3.7 | $4.5 | $4.5 | $5.4 | Transportation The Transportation segment's Adjusted EBITDA decreased by $5.2 million, driven by lower land division EBITDA and reduced marine utilization and day rates - Adjusted EBITDA for the Transportation segment decreased by $5.2 million compared to Q1 2024[5] Terminalling and Storage The Terminalling and Storage segment's Adjusted EBITDA decreased by $1.3 million, primarily due to increased operating expenses and lower throughput revenue - Adjusted EBITDA for the Terminalling and Storage segment decreased by $1.3 million compared to Q1 2024, mainly due to higher operating expenses[6] Sulfur Services The Sulfur Services segment's Adjusted EBITDA increased by $4.8 million, primarily driven by higher volumes and margins in the fertilizer division - Adjusted EBITDA for the Sulfur Services segment increased by $4.8 million, with the fertilizer division contributing a $3.7 million increase[7] Specialty Products The Specialty Products segment's Adjusted EBITDA decreased by $0.9 million, primarily due to a $1.2 million decline in the grease division, partially offset by propane - Adjusted EBITDA for the Specialty Products segment decreased by $0.9 million, primarily due to a $1.2 million decline in the grease division[8] Financial Statements and Key Metrics Consolidated Financial Results Q1 2025 consolidated results show a $1.0 million net loss and negative operating cash flow, contrasting with Q1 2024, though distributable cash flow increased Q1 2025 vs Q1 2024 Summary of Operations (in millions, except per unit amounts) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net Income (Loss) (million) | $(1.0) | $3.3 | | Net Income (Loss) Per Unit ($/unit) | $(0.03) | $0.08 | | Adjusted EBITDA (million) | $27.8 | $30.4 | | Net Cash Provided by (Used in) Operating Activities (million) | $(6.0) | $10.1 | | Distributable Cash Flow (million) | $9.1 | $5.6 | | Revenues (million) | $192.5 | $180.8 | Capitalization and Liquidity Total debt increased to $466.1 million and available liquidity decreased to $23.4 million as of March 31, 2025, with the leverage ratio rising to 4.21x, yet remaining covenant compliant Capitalization Summary (in millions) | Metric | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Debt Outstanding (million) | $466.1 | $453.6 | | Revolving Credit Facility - Available Liquidity (million) | $23.4 | $80.7 | | Total Adjusted Leverage Ratio (x) | 4.21x | 3.96x | | Interest Coverage Ratio (x) | 2.07x | 2.14x | - Effective March 31, 2025, the maximum total leverage ratio covenant under the credit facility stepped down from 4.75x to 4.50x[18] Detailed Financial Statements Detailed financial statements reveal a slight decrease in total assets and liabilities, a net loss from operations, and cash used in operating activities due to working capital changes Balance Sheet As of March 31, 2025, total assets decreased slightly to $533.4 million, total liabilities to $605.0 million, resulting in a partners' deficit of $71.6 million Balance Sheet Summary (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total current assets (thousands) | $129,646 | $130,479 | | Property, plant and equipment, net (thousands) | $299,939 | $305,450 | | Total assets (thousands) | $533,410 | $538,509 | | Total current liabilities (thousands) | $96,236 | $115,501 | | Long-term debt, net (thousands) | $451,449 | $437,635 | | Total liabilities (thousands) | $605,038 | $608,948 | | Partners' capital (deficit) (thousands) | $(71,628) | $(70,439) | Statement of Operations Total revenues increased to $192.5 million in Q1 2025, but higher costs and interest expense led to a $1.0 million net loss, a decline from Q1 2024 net income Statement of Operations Summary (in thousands) | Account | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Total revenues (thousands) | $192,543 | $180,830 | | Total costs and expenses (thousands) | $178,620 | $163,143 | | Operating income (thousands) | $14,402 | $17,895 | | Interest expense, net (thousands) | $(14,107) | $(13,842) | | Net income (loss) (thousands) | $(1,033) | $3,273 | | Net income (loss) per unit - basic ($/unit) | $(0.03) | $0.08 | Statement of Cash Flows Q1 2025 saw $6.0 million net cash used in operating activities, a reversal from Q1 2024, with decreased investing cash use and increased financing cash from debt proceeds Cash Flow Summary (in thousands) | Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities (thousands) | $(6,019) | $10,109 | | Net cash used in investing activities (thousands) | $(6,218) | $(17,395) | | Net cash provided by (used in) financing activities (thousands) | $12,234 | $7,286 | | Net increase in cash (thousands) | $(3) | $0 | Shareholder Information Quarterly Cash Distribution A quarterly cash distribution of $0.005 per unit for Q1 2025 has been declared, payable on May 15, 2025, to unitholders of record on May 8, 2025 - A quarterly cash distribution of $0.005 per unit was declared for the quarter ended March 31, 2025[20] - The distribution is payable on May 15, 2025, to unitholders of record on May 8, 2025[20] Non-GAAP Financial Measures and Reconciliations Explanation of Non-GAAP Measures The Partnership utilizes non-GAAP measures like EBITDA, Adjusted EBITDA, and Distributable Cash Flow to evaluate asset performance, cash generation, and industry comparisons - The company uses non-GAAP measures including EBITDA, Adjusted EBITDA, Distributable Cash Flow, and Adjusted Free Cash Flow to analyze performance[24] - Adjusted EBITDA is defined as EBITDA excluding unit-based compensation, gains/losses on asset dispositions, impairment, and transaction costs[26] - Distributable Cash Flow is used as an indicator of the company's ability to sustain or increase quarterly distributions to unitholders[29] Reconciliation of Net Income to Adjusted EBITDA The reconciliation from a $1.0 million net loss to $27.8 million Adjusted EBITDA for Q1 2025 involves adjustments for interest, taxes, depreciation, amortization, and transaction expenses Reconciliation of Net Income (Loss) to Adjusted EBITDA (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net income (loss) (thousands) | $ (1,033) | $ 3,273 | | Interest expense (thousands) | 14,107 | 13,842 | | Income tax expense (thousands) | 1,117 | 796 | | Depreciation and amortization (thousands) | 12,816 | 12,649 | | EBITDA (thousands) | 27,007 | 30,560 | | Adjustments (Transaction expenses, etc.) (thousands) | 821 | (154) | | Adjusted EBITDA (thousands) | $ 27,828 | $ 30,406 | Reconciliation of Net Cash Provided by Operating Activities Starting with $6.0 million negative operating cash flow, this reconciliation details the derivation of $27.8 million Adjusted EBITDA, $9.1 million DCF, and $8.2 million Adjusted Free Cash Flow for Q1 2025 Reconciliation to DCF and Adjusted Free Cash Flow (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities (thousands) | $ (6,019) | $ 10,109 | | ... Adjustments to reach Adjusted EBITDA (thousands) | 33,847 | 20,297 | | Adjusted EBITDA (thousands) | 27,828 | 30,406 | | ... Adjustments to reach DCF (thousands) | (18,740) | (24,760) | | Distributable Cash Flow (thousands) | 9,088 | 5,646 | | Expansion capital expenditures (thousands) | (929) | (6,231) | | Adjusted Free Cash Flow (thousands) | $ 8,155 | $ (585) |