Martin Midstream Partners(MMLP) - 2025 Q2 - Quarterly Results

Executive Summary & Highlights Martin Midstream Partners reported Q2 2025 financial results, including a net loss and Adjusted EBITDA, with CEO commentary on segment performance and outlook Q2 2025 Financial Highlights Martin Midstream Partners reported a Q2 2025 net loss of $2.4 million and Adjusted EBITDA of $27.1 million, reaffirming full-year guidance Q2 2025 Financial Highlights Summary | Metric | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :--------------------------------- | :------------------------------- | :----------------------------- | | Net loss | $2.4 million | $3.4 million | | Adjusted EBITDA | $27.1 million | $55.0 million | - Reaffirmed full-year adjusted EBITDA guidance of $109.1 million[2][8] - Declared a quarterly cash distribution of $0.005 per common unit[8][26] CEO Commentary & Outlook CEO Bob Bondurant noted strong Sulfur Services, marine utilization issues, mixed Specialty Products, and stable Terminalling and Storage, anticipating Q4 leverage decline - Sulfur Services segment delivered sales volumes and margins exceeding internal projections, positioning for a successful first half before Q3 turnaround season[3] - Transportation segment's marine business utilization was slightly below expectations due to equipment repairs, while land transportation partially offset this with lower operating expenses despite rate pressure[4] - Specialty Products experienced temporary volume reductions in grease due to customer portfolio shifts, but lubricants business exceeded expectations[5] - Terminalling and Storage segment results were slightly below internal projections due to higher operating expenses but are expected to perform favorably in the second half of the year[6] - Adjusted leverage ratio was 4.20x as of June 30, 2025, compared to 4.21x as of March 31, 2025, with expectations for leverage to decline in Q4 after a seasonally weakest Q3[7] Segment Operating Results This section details the financial performance and operational drivers across the Partnership's business segments Overview of Segment Performance Q2 2025 Adjusted EBITDA declined across most segments compared to Q2 2024, with only Terminalling and Storage showing an increase Adjusted EBITDA by Business Segment (Q2 2025 vs Q2 2024) | Business Segment | Q2 2025 Adjusted EBITDA ($M) | Q2 2024 Adjusted EBITDA ($M) | Change ($M) | | :----------------------- | :--------------------------- | :--------------------------- | :---------- | | Transportation | $8.5 | $11.2 | $(2.7) | | Terminalling and Storage | $8.4 | $8.0 | $0.4 | | Sulfur Services | $9.7 | $10.6 | $(0.9) | | Specialty Products | $4.4 | $5.7 | $(1.3) | | Unallocated SG&A | $(3.9) | $(3.8) | $(0.1) | | Total | $27.1 | $31.7 | $(4.6) | Transportation Segment The Transportation segment's Q2 2025 Adjusted EBITDA decreased, primarily due to land division declines, partially offset by a slight marine division increase - Transportation Adjusted EBITDA decreased by $2.7 million in Q2 2025[11] - Land division Adjusted EBITDA declined by $2.8 million due to lower miles and reduced transportation rates, partially offset by lower operating expenses[11] - Marine division Adjusted EBITDA increased by $0.1 million, driven by higher day rates, partially offset by increased employee-related expenses[11] Transportation Segment Operating Income (Q2 2025 vs Q2 2024) | Metric | Q2 2025 ($ thousands) | Q2 2024 ($ thousands) | Variance ($ thousands) | Change (%) | | :------------------------------------------ | :-------------------- | :-------------------- | :--------------------- | :--------- | | Revenues | $57,701 | $61,467 | $(3,766) | (6)% | | Operating income | $6,217 | $8,036 | $(1,819) | (23)% | Terminalling and Storage Segment The Terminalling and Storage segment's Q2 2025 Adjusted EBITDA increased, driven by the Smackover refinery's performance, despite a decrease in underground NGL storage - Terminalling and Storage Adjusted EBITDA increased by $0.4 million in Q2 2025[12] - Smackover refinery Adjusted EBITDA increased by $0.9 million due to higher throughput, reservation fees, and lower operating expenses[12] - Underground NGL storage division Adjusted EBITDA decreased by $0.5 million due to lower throughput volumes[12] Terminalling and Storage Segment Operating Income (Q2 2025 vs Q2 2024) | Metric | Q2 2025 ($ thousands) | Q2 2024 ($ thousands) | Variance ($ thousands) | Change (%) | | :------------------------------------------ | :-------------------- | :-------------------- | :--------------------- | :--------- | | Revenues | $24,402 | $24,228 | $(174) | (1)% | | Operating income | $3,302 | $3,000 | $(302) | (9)% | | Shore-based throughput volumes (gallons) | 47,199 | 42,491 | 4,708 | 11% | Sulfur Services Segment The Sulfur Services segment's Q2 2025 Adjusted EBITDA decreased, primarily due to margin compression in fertilizer and increased expenses in pure sulfur and prilling - Sulfur Services Adjusted EBITDA decreased by $0.9 million in Q2 2025[13] - Fertilizer division Adjusted EBITDA declined by $0.7 million due to margin compression from higher raw material costs, partially offset by reservation fees[13] - Pure sulfur business Adjusted EBITDA decreased by $0.6 million due to increased repairs and maintenance expenses[13] Sulfur Services Segment Operating Income and Volumes (Q2 2025 vs Q2 2024) | Metric | Q2 2025 ($ thousands) | Q2 2024 ($ thousands) | Variance ($ thousands) | Change (%) | | :-------------------------------- | :-------------------- | :-------------------- | :--------------------- | :--------- | | Total revenues | $44,128 | $37,193 | $6,935 | 19% | | Operating income | $5,969 | $7,463 | $(1,494) | (20)% | | Total sulfur services volumes (long tons) | 217 | 155 | 62 | 40% | Specialty Products Segment The Specialty Products segment's Q2 2025 Adjusted EBITDA decreased, mainly due to lower grease margins, partially offset by higher lubricant volumes - Specialty Products Adjusted EBITDA decreased by $1.3 million in Q2 2025[14] - Grease division Adjusted EBITDA decreased by $1.5 million due to lower margins associated with a higher mix of lower-margin product sales[14] - Lubricants division increased by $0.1 million, reflecting higher volumes partially offset by lower margins[14] Specialty Products Segment Operating Income and Volumes (Q2 2025 vs Q2 2024) | Metric | Q2 2025 ($ thousands) | Q2 2024 ($ thousands) | Variance ($ thousands) | Change (%) | | :-------------------------------- | :-------------------- | :-------------------- | :--------------------- | :--------- | | Products revenues | $60,341 | $67,317 | $(6,976) | (10)% | | Operating income | $3,634 | $4,945 | $(1,311) | (27)% | | Total specialty products volumes (Bbls) | 661 | 633 | 28 | 4% | Unallocated Selling, General and Administrative Expense Unallocated selling, general, and administrative expenses increased by $0.1 million in Q2 2025, primarily due to an increase in allocated overhead expenses from Martin Resource Management Corporation - Unallocated selling, general, and administrative expense increased by $0.1 million in Q2 2025[15] - The increase was due to higher allocated overhead expenses from Martin Resource Management Corporation[15] Indirect SG&A Expenses (Q2 2025 vs Q2 2024) | Metric | Q2 2025 ($ thousands) | Q2 2024 ($ thousands) | Variance ($ thousands) | Change (%) | | :-------------------------------- | :-------------------- | :-------------------- | :--------------------- | :--------- | | Indirect selling, general and administrative expenses | $3,937 | $3,819 | $118 | 3% | Consolidated Financial Statements This section presents the Partnership's consolidated statements of operations, balance sheets, cash flows, and changes in partners' capital Consolidated Statements of Operations Q2 2025 saw total revenues decrease to $180.7 million, resulting in a net loss of $2.4 million and reduced operating income compared to Q2 2024 Consolidated Statements of Operations Summary (Q2 2025 vs Q2 2024) | Metric | Three Months Ended June 30, 2025 ($M) | Three Months Ended June 30, 2024 ($M) | | :--------------------------------- | :------------------------------------ | :------------------------------------ | | Revenues | $180.7 | $184.5 | | Operating income | $14.9 | $19.9 | | Net income (loss) | $(2.4) | $3.8 | | Net income (loss) Per Unit | $(0.06) | $0.09 | Consolidated Statements of Operations Summary (Six Months Ended June 30, 2025 vs 2024) | Metric | Six Months Ended June 30, 2025 ($M) | Six Months Ended June 30, 2024 ($M) | | :--------------------------------- | :---------------------------------- | :---------------------------------- | | Revenues | $373.2 | $365.4 | | Operating income | $29.3 | $37.8 | | Net income (loss) | $(3.4) | $7.1 | | Net income (loss) Per Unit | $(0.09) | $0.18 | Consolidated Balance Sheets As of June 30, 2025, total assets and liabilities decreased, while Partners' capital (deficit) further declined to $(74.2) million Consolidated Balance Sheet Highlights (June 30, 2025 vs Dec 31, 2024) | Metric | June 30, 2025 ($ thousands) | December 31, 2024 ($ thousands) | | :--------------------------------- | :-------------------------- | :------------------------------ | | Total current assets | $121,603 | $130,479 | | Property, plant and equipment, net | $294,824 | $305,450 | | Total assets | $515,632 | $538,509 | | Total current liabilities | $107,689 | $115,501 | | Long-term debt, net | $427,821 | $437,635 | | Total liabilities | $589,819 | $608,948 | | Partners' capital (deficit) | $(74,187) | $(70,439) | Consolidated Statements of Cash Flows Net cash from operating activities increased for the six months ended June 30, 2025, while investing activities decreased and financing activities shifted to a net use Consolidated Statements of Cash Flows (Six Months Ended June 30, 2025 vs 2024) | Cash Flow Activity | Six Months Ended June 30, 2025 ($ thousands) | Six Months Ended June 30, 2024 ($ thousands) | | :--------------------------------- | :------------------------------------------- | :------------------------------------------- | | Net cash provided by operating activities | $24,896 | $21,937 | | Net cash used in investing activities | $(11,929) | $(37,099) | | Net cash provided by (used in) financing activities | $(12,975) | $15,163 | | Net increase (decrease) in cash | $(8) | $1 | | Cash at end of period | $47 | $55 | - Payments for property, plant and equipment decreased to $11.2 million in 2025 from $24.2 million in 2024 for the six months ended June 30[51] - Payments of long-term debt were $121.5 million in 2025 compared to $113.0 million in 2024 for the six months ended June 30[51] Consolidated Statements of Capital (Deficit) The Partners' Capital (Deficit) for Martin Midstream Partners decreased to $(74.2) million as of June 30, 2025, from $(70.4) million at December 31, 2024 Partners' Capital (Deficit) (June 30, 2025 vs Dec 31, 2024) | Metric | June 30, 2025 ($ thousands) | December 31, 2024 ($ thousands) | | :--------------------------------- | :-------------------------- | :------------------------------ | | Common Limited Units | 39,055,086 | 39,001,086 | | Limited Partner Amount | $(75,548) | $(71,877) | | General Partner Amount | $1,361 | $1,438 | | Total Partners' Capital (Deficit) | $(74,187) | $(70,439) | - Net loss contributed $(2,359) thousand to the change in Limited Partners' Capital for the three months ended June 30, 2025[47] - Cash distributions for the three months ended June 30, 2025, totaled $(195) thousand for common limited units[47] Capital Structure & Shareholder Returns This section details the Partnership's capital structure, credit metrics, and quarterly cash distribution to unitholders Capitalization and Credit Metrics As of June 30, 2025, total debt decreased, but the adjusted leverage ratio increased, and available liquidity under the revolving credit facility significantly declined Debt Outstanding and Credit Metrics (June 30, 2025 vs Dec 31, 2024) | Metric | June 30, 2025 ($M) | December 31, 2024 ($M) | | :--------------------------------- | :----------------- | :--------------------- | | Revolving Credit Facility | $41.0 | $53.5 | | 11.50% Senior Secured Notes | $400.0 | $400.0 | | Total Debt Outstanding | $441.1 | $453.6 | | Revolving Credit Facility - Available Liquidity | $31.3 | $80.7 | | Total Adjusted Leverage Ratio | 4.20x | 3.96x | | Interest Coverage Ratio | 1.97x | 2.14x | - The Partnership was in compliance with all debt covenants as of June 30, 2025, and December 31, 2024[24] - Effective March 31, 2025, the maximum total leverage ratio under the credit facility stepped down from 4.75x to 4.50x[24] Quarterly Cash Distribution Martin Midstream Partners declared a quarterly cash distribution of $0.005 per unit for the quarter ended June 30, 2025, payable on August 14, 2025, to unitholders of record as of August 7, 2025 - Declared a quarterly cash distribution of $0.005 per unit for Q2 2025[26] - The distribution is payable on August 14, 2025, to common unitholders of record as of August 7, 2025[26] - Distributions to non-U.S. investors are subject to federal income tax withholding at the highest applicable effective tax rate[27] Non-GAAP Financial Information This section defines and reconciles the Partnership's non-GAAP financial measures, including EBITDA, Adjusted EBITDA, Distributable Cash Flow, and Adjusted Free Cash Flow Use and Definition of Non-GAAP Measures Martin Midstream Partners uses non-GAAP measures like EBITDA, Adjusted EBITDA, Distributable Cash Flow, and Adjusted Free Cash Flow to assess performance and liquidity, noting their limitations - Non-GAAP measures used include EBITDA, Adjusted EBITDA, Distributable Cash Flow, and Adjusted Free Cash Flow[21][31] - Adjusted EBITDA is defined as EBITDA before unit-based compensation, gains/losses on asset disposition, impairment, and transaction costs[33] - Distributable Cash Flow is defined as Net Cash Provided by Operating Activities less certain cash adjustments and maintenance capital expenditures, used to assess cash available for distributions[37] - Adjusted Free Cash Flow is Distributable Cash Flow less growth capital expenditures and finance lease principal payments, indicating cash available for debt reduction, investments, and distributions[38] - These non-GAAP measures should not be considered alternatives to, or more meaningful than, GAAP measures like Net Income (Loss) or Net Cash Provided by Operating Activities[34][39] Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA Net Income (Loss) of $(2.4) million for Q2 2025 was reconciled to $27.1 million Adjusted EBITDA, with similar reconciliations for the six-month period Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA | Metric | Three Months Ended June 30, 2025 ($ thousands) | Three Months Ended June 30, 2024 ($ thousands) | Six Months Ended June 30, 2025 ($ thousands) | Six Months Ended June 30, 2024 ($ thousands) | | :------------------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | :------------------------------------------- | :------------------------------------------- | | Net income (loss) | $(2,407) | $3,780 | $(3,440) | $7,053 | | EBITDA | $26,923 | $32,616 | $53,930 | $63,176 | | Adjusted EBITDA | $27,148 | $31,712 | $54,976 | $62,118 | Reconciliation of Net Cash Provided by Operating Activities to Adjusted EBITDA, Distributable Cash Flow, and Adjusted Free Cash Flow Net Cash Provided by Operating Activities for Q2 2025 was reconciled to Adjusted EBITDA, Distributable Cash Flow, and Adjusted Free Cash Flow, with similar reconciliations for the six-month period Reconciliation of Cash Flow Measures | Metric | Three Months Ended June 30, 2025 ($ thousands) | Three Months Ended June 30, 2024 ($ thousands) | Six Months Ended June 30, 2025 ($ thousands) | Six Months Ended June 30, 2024 ($ thousands) | | :------------------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | :------------------------------------------- | :------------------------------------------- | | Net cash provided by operating activities | $30,915 | $11,828 | $24,896 | $21,937 | | Adjusted EBITDA | $27,148 | $31,712 | $54,976 | $62,118 | | Distributable Cash Flow | $6,672 | $9,534 | $15,760 | $15,180 | | Adjusted Free Cash Flow | $5,877 | $(2,855) | $14,032 | $(3,440) | - Maintenance capital expenditures were $4.2 million for Q2 2025 and $8.1 million for the six months ended June 30, 2025[65] - Expansion capital expenditures were $0.8 million for Q2 2025 and $1.7 million for the six months ended June 30, 2025[65] Additional Information This section provides background on Martin Midstream Partners, outlines forward-looking statements, and lists investor contact information About Martin Midstream Partners Martin Midstream Partners L.P. is a publicly traded limited partnership headquartered in Kilgore, Texas, with diverse operations primarily in the U.S. Gulf Coast region - Headquartered in Kilgore, Texas, with operations primarily in the Gulf Coast region of the United States[28] - Terminalling, processing, and storage services for petroleum products and by-products[28] - Land and marine transportation services for petroleum products and by-products, chemicals, and specialty products[28][29] - Sulfur and sulfur-based products processing, manufacturing, marketing, and distribution[28][29] - Marketing, distribution, and transportation services for natural gas liquids and blending/packaging services for specialty lubricants and grease[28][29] Forward-Looking Statements The report contains forward-looking statements subject to various uncertainties, and actual results may differ materially, with no obligation to revise them unless required by law - Statements about the Partnership's outlook and financial estimates are forward-looking and subject to uncertainties[30] - Effects of continued volatility of commodity prices and related macroeconomic/political environment[30] - Uncertainties relating to future cash flows and operations[30] - Ability to pay future distributions[30] - Future market conditions, governmental regulation, and taxation[30] - The Partnership disclaims any intention or obligation to revise forward-looking statements unless required by law[30] Contact Information Contact information for investor relations is provided for Sharon Taylor, Executive Vice President & Chief Financial Officer - Sharon Taylor - Executive Vice President & Chief Financial Officer[40] - Phone: (877) 256-6644[40] - Email: ir@mmlp.com[40]