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Martin Midstream Partners Reports Record 2005 Third Quarter Financial Results
KILGORE, Texas, Nov. 9 /PRNewswire-FirstCall/ -- Martin Midstream Partners L.P. announced today its financial results for the third quarter ended September 30, 2005. MMLP reported net income for the third quarter of 2005 of $4.8 million, or $0.56 per limited partner unit, the highest quarterly net income in the history of MMLP. This compared to net income for the third quarter of 2004 of $1.9 million, or $0.22 per limited partner unit. Revenues for the third quarter of 2005 were $112.8 million compared to $72.2 million for the third quarter of 2004. Quarterly results reflect a $0.6 million ($0.07 per limited partner unit) charge for casualty losses suffered in connection with Hurricanes Katrina and Rita. This charge was more than offset by enhanced LPG margins resulting from rapid LPG price increases due to the hurricanes. Net income for the nine months ended September 30, 2005 was $11.3 million, or $1.31 per limited partner unit, compared to net income for the nine months ended September 30, 2004 of $7.9 million, or $0.93 per limited partner unit. Revenues for the first nine months of 2005 were $293.8 million compared to $202.5 million during the same period of 2004. The Company's distributable cash flow for the third quarter of 2005 was $7.0 million, compared to $4.0 million for the third quarter of 2004. The Company's distributable cash flow for the nine months ended September 30, 2005 was $16.7 million, compared to $12.5 million for the same period of 2004. Distributable cash flow is a non-GAAP financial measure which is explained in greater detail below under "Use of Non-GAAP Financial Information." The Company has also included below a table entitled "Distributable Cash Flow" in order to show the components of this non-GAAP financial measure and its reconciliation to the most comparable GAAP measurement. Included with this press release are MMLP's Consolidated and Condensed Balance Sheets as of September 30, 2005 and December 31, 2004, its Consoldiated and Condensed Statements of Operations for the three and nine months ended September 30, 2005 and 2004, and its Consolidated and Condensed Statements of Cash Flows for the nine months ended September 30, 2005 and 2004, respectively. These financial statements should be read in conjunction with the information contained in the Company's Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on November 9, 2005. Ruben Martin, President and Chief Executive Officer of Martin Midstream GP LLC, the general partner of Martin Midstream Partners, said, "I am pleased to report that despite the specific challenges of Hurricanes Katrina and Rita, we were able to deliver a record quarter in terms of net income, net income per limited partner unit and distributable cash flow. I want to commend our employees who were in the path of these two hurricanes and did an outstanding job meeting these challenges. Their efforts helped restore our operations quickly and safely. This strong performance enabled us to raise our quarterly distributions by $0.02 per limited partner unit payable November 14, 2005. This is our third increase this year and represents an 8.6% distribution increase for 2005 as compared to 2004. We anticipate closing our pending acquisition of Prism Gas Systems in mid-November, which we continue to believe will be accretive upon full integration of the Prism assets." Investors' Conference Call An investor's conference call to review the third quarter results will be held on November 11, 2005, at 8:00 a.m. Central Time. The conference call can be accessed by calling (877) 407-9205. An audio replay of the conference call will be available by calling (877) 660-6853 from 4:00 p.m. Central Time on November 11, 2005 through 11:59 p.m. Central Time on November 17, 2005. The access codes for the conference call and the audio replay are as follows: Account No. 286; Conference ID No. 176236. The audio replay of the conference call will also be archived on the Company's website at http://www.martinmidstream.com/ . About Martin Midstream Partners Martin Midstream Partners provides terminalling and storage, marine transportation, distribution and midstream logistical services for producers and suppliers of hydrocarbon products and by-products, lubricants and other liquids. The Company also manufactures and markets sulfur-based fertilizers and related products and owns CF Martin Sulphur L.P., which operates a sulfur terminalling, transportation and distribution business. MMLP operates primarily in the Gulf Coast region of the United States. Additional information concerning the Company is available on the Company's website at http://www.martinmidstream.com/ . Forward-Looking Statements Statements about Martin Midstream Partners' 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 its control, which could cause actual results to differ materially from such statements. While MMLP believes that the assumptions concerning future events are reasonable, it cautions that there are inherent difficulties and anticipating or predicting certain important factors. A discussion of these factors, including risks and uncertainties, is set forth in the Company's annual and quarterly reports filed from time to time with the Securities and Exchange Commission. Martin Midstream Partners 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 MMLP reports its financial results in accordance with generally accepted accounting principles. However, from time to time, MMLP uses certain non-GAAP financial measures such as distributable cash flow because management believes that this measure may provide users of this financial information with meaningful comparisons between current results and prior reported results and a meaningful measure of MMLP's cash flow after it has satisfied the capital and related requirements of its operations. Distributable cash flow is not a measure of financial performance or liquidity under GAAP. It should not be considered in isolation or as an indicator of MMLP's performance. Furthermore, it should not be seen as a measure of liquidity or a substitute for comparable metrics prepared in accordance with GAAP. This information constitutes a non-GAAP financial measure within the meaning of Regulation G adopted by the Securities and Exchange Commission. Accordingly, MMLP has presented herein, and will present in other information it publishes that contains this non-GAAP financial measure, a reconciliation of this measure to the most directly comparable GAAP financial measure. The Company has included below a table entitled "Distributable Cash Flow" in order to show the components of this non-GAAP financial measure and its reconciliation to the most comparable GAAP measure. MMLP calculates distributable cash flow as follows: net income (as reported in its Consolidated and Condensed Statements of Operations), plus depreciation and amortization and amortization of deferred debt issue costs (as reported in its Consolidated and Condensed Statements of Cash Flows), plus proceeds from sale of property, plant and equipment (as reported in its Consolidated and Condensed Statements of Cash Flows), plus amortization of deferred debt issue costs (as reported in its Consolidated and Condensed Statements of Cash Flows), less maintenance capital expenditures (as defined below), plus distributions from unconsolidated partnership (as reported in its Consolidated and Condensed Statements of Cash Flows), less equity in earnings (loss) from unconsolidated entities (as reported in its Consolidated and Condensed Statements of Operations). MMLP's maintenance capital expenditures, along with its expansion capital expenditures, are components of payments for property, plant, and equipment included in its Consolidated and Condensed Statements of Cash Flows. For the third quarter of 2005, MMLP had $0.9 million in maintenance capital expenditures and $24.8 million in expansion capital expenditures. For the nine months ended September 30, 2005, MMLP had $3.2 million in maintenance capital expenditures and $33.1 million in expansion capital expenditures. For the third quarter of 2004, MMLP had $1.7 million of maintenance capital expenditures and $1.1 million in expansion capital expenditures. For the nine months ended September 30, 2004, MMLP had $3.7 million of maintenance capital expenditures and $28.9 million in expansion capital expenditures. Contacts: Robert D. Bondurant, Executive Vice President and Chief Financial Officer of Martin Midstream GP LLC, the Company's general partner at (903) 983-6200. MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED BALANCE SHEETS
(Dollars in thousands)
Sept. 30, Dec. 31,
2005 2004
(Unaudited) (Audited)
Assets
Cash $3,116 $3,184
Accounts and other receivables, less
allowance for doubtful accounts of
$274 and $427 50,796 43,526
Product exchange receivables 3,615 50
Inventories 34,554 23,165
Due from affiliates 1,098 1,892
Other current assets 532 724
Total current assets 93,711 72,541
Property, plant, and equipment, at cost 200,410 148,241
Accumulated depreciation (55,958) (38,472)
Property, plant and equipment, net 144,452 109,769
Goodwill 7,455 2,922
Other assets, net 9,616 3,100
$255,234 $188,332
Liabilities and Partners' Capital
Current installments of notes payable 582 $---
Trade and other accounts payable 46,168 26,537
Product exchange payables 9,824 9,081
Due to affiliates 1,216 429
Other accrued liabilities 3,291 2,443
Total current liabilities 61,081 38,490
Long-term debt 120,422 73,000
Other long-term obligations 888 1,308
Total liabilities 182,391 112,798
Partners' capital 72,843 75,534
Commitments and contingencies $255,234 $188,332
These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in MMLP's Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 9, 2005. MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except per unit amounts)
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30,
2005 2004 2005 2004
Revenues:
Terminalling and
storage $5,782 $5,194 $16,858 $12,623
Marine transportation 8,578 8,394 26,634 25,079
Product sales:
LPG distribution 71,732 51,527 199,487 136,349
Sulfur 16,803 --- 17,743 ---
Fertilizer 7,565 5,016 25,980 22,397
Terminalling and
storage 2,320 2,059 7,114 6,063
98,420 58,602 250,324 164,809
Total revenues 112,780 72,190 293,816 202,511
Costs and expenses:
Cost of products
sold:
LPG distribution 68,140 49,697 192,187 132,467
Sulfur 11,331 --- 12,030 ---
Fertilizer 6,343 4,589 21,955 19,434
Terminalling and
storage 1,950 1,668 5,969 4,991
87,764 55,954 232,141 156,892
Expenses:
Operating expenses 13,423 9,012 32,778 24,995
Selling, general
and administrative 1,848 1,747 5,420 4,672
Depreciation and
amortization 3,312 2,404 8,672 6,276
Total costs and
expenses 106,347 69,117 279,011 192,835
Operating income 6,433 3,073 14,805 9,676
Other income (expense):
Equity in earnings of
unconsolidated
entities 27 (359) 222 532
Interest expense (1,639) (876) (3,834) (2,338)
Other, net 25 24 127 52
Total other income
(expense) (1,587) (1,211) (3,485) (1,754)
Net income $4,846 $1,862 $11,320 $ 7,922
General partner's
interest in net income $97 $37 $226 $158
Limited partners'
interest in net
income $4,749 $1,825 $11,094 $7,764
Net income per limited
partner unit $0.56 $0.22 $1.31 $0.93
Weighted average
limited partner
units 8,475,862 8,475,862 8,475,862 8,307,139
These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in MMLP's Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 9, 2005. MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
Nine Months Ended
September 30,
2005 2004
Cash flows from operating activities:
Net income $11,320 $7,922
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 8,672 6,276
Amortization of deferred debt issuance costs 396 725
Gain on sale of property, plant and equipment --- (9)
Equity in earnings of unconsolidated entities (222) (532)
Change in current assets and liabilities,
excluding effects of acquisitions and
dispositions:
Accounts and other receivables 261 (5,466)
Product exchange receivables (3,565) 1,625
Inventories (6,454) (2,280)
Due from affiliates 794 (3,095)
Other current assets 200 (176)
Trade and other accounts payable 11,495 1,768
Product exchange payables 626 1,008
Due to affiliates 787 (350)
Other accrued liabilities 412 473
Change in other non-current assets-net (446) ---
Net cash provided by operating
activities 24,276 7,889
Cash flows from investing activities:
Payments for property, plant and equipment (12,264) (4,335)
Acquisitions (29,227) (29,251)
Proceeds from sale of property,
plant and equipment 46 114
Escrow deposit for acquisition (5,000) ---
Distributions from unconsolidated partnership --- 1,683
Net cash used in investing activities (46,445) (31,789)
Cash flows from financing activities:
Payments of long-term debt (16,691) (39,350)
Proceeds from long-term debt 53,200 41,350
Cash distributions paid (14,011) (12,913)
Payments of debt issuance costs (397) ---
General partner contribution --- 754
Follow on offering --- 34,016
Net cash provided by financing
activities 22,101 23,857
Net decrease in cash and cash
equivalents (68) (43)
Cash at beginning of period 3,184 2,270
Cash at end of period $3,116 $2,227
Non-cash:
Financed portion of non-compete agreement $--- $398
These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in MMLP's Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 9, 2005. MARTIN MIDSTREAM PARTNERS L.P.
DISTRIBUTABLE CASH FLOW
(Dollars in thousands)
(Unaudited Non-GAAP Financial Measure)
Three Months Ended Nine Months Ended
September 30, September 30,
2005 2004 2005 2004
Net Income $4,846 $1,862 $11,320 $7,922
Adjustments to reconcile
net income to
distributable cash flow:
Depreciation and
amortization 3,312 2,404 8,672 6,276
Proceeds from sale of
property, plant and
equipment --- 114 46 114
(Gain) Loss on sale of
property, plant and
equipment --- (9) --- (9)
Repayment of debt (A) (291) --- (291) ---
Amortization of deferred
debt issue costs 145 240 396 725
Maintenance capital
expenditures (B) (938) (1,462) (3,178) (3,694)
Distributions from
unconsolidated
partnership (C) --- 495 --- 1,683
Equity in earnings of
unconsolidated entities (27) 359 (222) (532)
Distributable cash flow $7,047 $4,003 $16,743 $12,485
(A) Represents a semi-annual payment by MMLP of principal on U.S.
Government Guaranteed Ship Financing Bonds assumed in connection with
the acquisition of the partnership interests in CF Martin Sulphur not
owned by MMLP.
(B) Maintenance capital expenditures, along with expansion capital
expenditures, are components of payments for property, plant, and
equipment set forth in MMLP's Consolidated and Condensed Statements
of Cash Flows. For the three months ended September 30, 2005, MMLP
had $25.7 million of total capital expenditures, of which
$24.8 million was expansion capital expenditures and $0.9 million was
maintenance capital expenditures. For the nine months ended
September 30, 2005, MMLP had $36.3 million of capital expenditures of
which $33.1 million was expansion capital expenditures and
$3.2 million was maintenance capital expenditures. For the three
months ended September 30, 2004, MMLP had $4.6 million of total
capital expenditures, of which $3.2 million was expansion capital
expenditures and $1.5 million was maintenance capital expenditures.
For the nine months ended September 30, 2004, MMLP had $32.6 million
of total capital expenditures, of which $28.9 million was expansion
capital expenditures and $3.7 million was maintenance capital
expenditures.
(C) Distributions from unconsolidated partnership represents
distributions received by MMLP from CF Martin Sulphur, L.P., in which
MMLP owned an unconsolidated non-controlling 49.5% limited
partnership interest until July 15, 2005, at which date CF Martin
Sulphur became a wholly-owned subsidiary of MMLP. As reported in
MMLP's Consolidated and Condensed Statements of Cash Flows, MMLP
received distributions of $1.7 million for the nine months ended
September 30, 2004 from CF Martin Sulphur. MMLP received
distributions of $0.5 million for the three months ended
September 30, 2004 from CF Martin Sulphur.
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