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Martin Midstream Partners Reports Increased Distributable Cash Flow and Adjusted EBITDA in 2015 Third Quarter Results

  • Distributable Cash Flow From Continuing Operations Increased 53% Compared to the Third Quarter of 2014
  • Adjusted EBITDA of $41.4 Million Representing an Increase of 20% Compared to the Third Quarter of 2014
  • Distribution Coverage Ratio for Trailing Twelve Months of 1.02 times

KILGORE, Texas, Oct. 28, 2015 (GLOBE NEWSWIRE) -- Martin Midstream Partners L.P. (Nasdaq:MMLP) (the "Partnership") announced today its financial results for the quarter ended September 30, 2015.

Ruben Martin, President and Chief Executive Officer of Martin Midstream GP LLC, the general partner of MMLP, said, "We finished the third quarter 2015 with a 0.87 times distribution coverage ratio. For the twelve months ended September 30, 2015 our distribution coverage ratio was 1.02 times. This quarter once again demonstrated the benefit of the diverse nature of our revenue streams even as underlying fundamentals across energy markets are experiencing weakness as we beat our internal cash flow forecast by approximately $2.1 million.

"Looking at our operations, performance for the third quarter included the full positive benefit of our new Arcadia Rail Terminal which is housed within our Natural Gas Services segment and provides us nationwide access to natural gas liquids where previously we were confined to servicing customers within the geographic footprint of trucking capabilities. The true benefit of this asset should be seen in the fourth quarter this year and the first quarter next year as we realize the cash flow from forward sales of butane to the refineries during blending season.

"Our Cardinal Gas Storage operating subsidiary, also within our Natural Gas Services segment, continued its strong year to date performance in the third quarter delivering better than expected cash flow from interruptible business services. Cardinal has now exceeded forecasted cash flow in all four quarters since being wholly-owned by the Partnership. Additionally, we saw an increased distribution from our West Texas LPG Pipeline joint venture of $1.1 million based on new shipping tariffs. We also outperformed our internal forecast in the Terminalling and Storage segment, particularly in our legacy specialty terminals division and at the Smackover refinery, both aided by reduced operating expenses.

"Going forward, our focus continues to be increasing our coverage ratio by improving upon our predominantly refinery-facing lines of business. For the fourth quarter 2015, we are optimistic we can achieve improved results from higher marine utilization and lower repair and maintenance costs. Additionally, we will begin the early seasonal shipment of next spring’s fertilizer volumes, which combined with realized sales in our refinery grade butane business is expected to improve our balance sheet by reducing working capital and providing additional cash flow."

The Partnership's distributable cash flow from continuing operations for the third quarter of 2015 was $29.1 million compared to distributable cash flow from continuing operations for the third quarter of 2014 of $19.1 million, an increase of 53%.

The Partnership's distributable cash flow from continuing operations for the nine months ended September 30, 2015 was $98.1 million compared to distributable cash flow from continuing operations for the nine months ended September 30, 2014 of $60.9 million, an increase of 61%.

The Partnership's adjusted EBITDA from continuing operations for the third quarter of 2015 was $41.4 million compared to adjusted EBITDA from continuing operations for the third quarter of 2014 of $34.5 million, an increase of 20%. Net income for the third quarter of 2015 was $3.3 million, which resulted in a loss per limited partner unit of $0.02 after the incentive distribution rights were allocated to the general partner. As a result of a $30.1 million non-cash reduction in the carrying value of the Partnership's 42.2% unconsolidated investment in Cardinal Gas Storage Partners LLC and a $3.4 million non-cash asset impairment in the Partnership's Marine Transportation segment, the Partnership reported a loss for the third quarter of 2014 of $26.9 million, or $0.82 per limited partner unit.

The Partnership's adjusted EBITDA from continuing operations for the nine months ended September 30, 2015 was $136.8 million compared to adjusted EBITDA from continuing operations for the nine months ended September 30, 2014 of $106.4 million, an increase of 29%. Net income for the nine months ended September 30, 2015 was $31.5 million, or $0.54 per limited partner unit. As a result of a the non-cash charges referenced above, the Partnership reported a net loss of $16.1 million, or $0.54 per limited partner unit for nine months ended September 30, 2014.

Revenues for the third quarter of 2015 were $226.0 million compared to $377.1 million for the third quarter of 2014. Revenues for the nine months ended September 30, 2015 were $782.5 million compared to $1.3 billion for the nine months ended September 30, 2014. The decline in revenues is attributable primarily to significantly lower natural gas liquids prices.

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 had no net income, distributable cash flow or adjusted EBITDA from discontinued operations related to the Floating Storage Assets in the third quarter of 2015. Distributable cash flow and EBITDA from discontinued operations were negative $0.9 million for the third quarter of 2014. Discontinued operations resulted in a loss of $1.2 million, or $0.04 per limited partner unit, for the third quarter of 2014.

Distributable cash flow and adjusted EBITDA from discontinued operations were $1.2 million for the nine months ended September 30, 2015. The Partnership had net income from discontinued operations for the nine months ended September 30, 2015 of $1.2 million, or $0.02 per limited partner unit.

Distributable cash flow and adjusted EBITDA from discontinued operations were negative $2.0 million for the nine months ended September 30, 2014. Discontinued operations resulted in a loss of $3.0 million, or $0.10 per limited partner unit, for the nine months ended September 30, 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 directly comparable GAAP measurement.

Included with this press release are the Partnership's consolidated financial statements as of and for the three and nine months ended September 30, 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 October 28, 2015.

Quarterly Cash Distribution

The quarterly cash distribution of $0.8125 per common unit, which was announced on October 22, 2015, is payable on November 13, 2015 to common unitholders of record as of the close of business on November 6, 2015. The ex-dividend date for the cash distribution is November 4, 2015. This distribution reflects an annualized distribution rate of $3.25 per unit.

Investors' Conference Call

An investors' conference call to review the second quarter results will be held on Thursday, October 29, 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 October 29, 2015 through 10:59 p.m. Central Time on November 10, 2015. The access code for the conference call and the audio replay is Conference ID No. 66621468. 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.

MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED BALANCE SHEETS
(Unaudited)
(Dollars in thousands)
September 30, 2015 December 31, 2014
Assets
Cash$13 $42
Accounts and other receivables, less allowance for doubtful accounts of $488 and $1,620, respectively63,881 134,173
Product exchange receivables2,137 3,046
Inventories91,803 88,718
Due from affiliates11,164 14,512
Other current assets6,344 6,772
Assets held for sale 40,488
Total current assets175,342 287,751
Property, plant and equipment, at cost1,382,972 1,343,674
Accumulated depreciation(393,035) (345,397)
Property, plant and equipment, net989,937 998,277
Goodwill23,802 23,802
Investment in unconsolidated entities132,458 134,506
Note receivable - Martin Energy Trading LLC15,000 15,000
Other assets, net64,896 81,465
Total assets$1,401,435 $1,540,801
Liabilities and Partners’ Capital
Trade and other accounts payable$69,584 $125,332
Product exchange payables16,756 10,396
Due to affiliates2,937 4,872
Income taxes payable788 1,174
Fair value of derivatives358
Other accrued liabilities12,845 21,801
Total current liabilities103,268 163,575
Long-term debt, net876,405 888,887
Other long-term obligations2,193 2,668
Total liabilities981,866 1,055,130
Commitments and contingencies
Partners’ capital419,569 485,671
Total liabilities and partners' capital$1,401,435 $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 October 28, 2015.


MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars and units in thousands, except per unit amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
2015 2014 2015 2014
Revenues:
Terminalling and storage *$33,578 $31,880 $100,828 $97,848
Marine transportation *18,977 24,281 59,956 69,479
Natural gas services17,120 5,764 50,171 5,764
Sulfur services3,090 3,037 9,270 9,112
Product sales: *
Natural gas services86,714 217,398 330,803 771,798
Sulfur services33,213 46,993 128,544 157,706
Terminalling and storage33,329 47,735 102,901 153,451
153,256 312,126 562,248 1,082,955
Total revenues226,021 377,088 782,473 1,265,158
Costs and expenses:
Cost of products sold: (excluding depreciation and amortization)
Natural gas services *80,709 205,828 307,039 738,561
Sulfur services *26,144 38,841 95,685 122,009
Terminalling and storage *28,237 42,239 87,977 137,074
135,090 286,908 490,701 997,644
Expenses:
Operating expenses *45,310 47,283 138,399 137,294
Selling, general and administrative *8,666 10,161 26,507 27,222
Depreciation and amortization23,335 16,457 68,737 44,277
Total costs and expenses212,401 360,809 724,344 1,206,437
Impairment of long-lived assets (3,445) (3,445)
Other operating income (loss)(1,586) 347 (1,763) 401
Operating income12,034 13,181 56,366 55,677
Other income (expense):
Equity in earnings of unconsolidated entities2,363 2,655 5,752 4,297
Interest expense, net(11,994) (11,459) (32,465) (34,351)
Gain on retirement of senior unsecured notes728 728
Debt prepayment premium (7,767)
Reduction in carrying value of investment in Cardinal due to the purchase of the controlling interest (30,102) (30,102)
Other, net399 287 757 170
Total other expense(8,504) (38,619) (25,228) (67,753)
Net income (loss) before taxes3,530 (25,438) 31,138 (12,076)
Income tax expense(200) (300) (814) (954)
Income (loss) from continuing operations3,330 (25,738) 30,324 (13,030)
Income (loss) from discontinued operations, net of income taxes (1,167) 1,215 (3,048)
Net income (loss)3,330 (26,905) 31,539 (16,078)
Less general partner's interest in net (income) loss(3,959) 539 (12,310) 322
Less (income) loss allocable to unvested restricted units(16) 62 (127) 33
Limited partners' interest in net income (loss)$(645) $(26,304) $19,102 $(15,723)

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 October 28, 2015.

*Related Party Transactions Shown Below

*Related Party Transactions Included Above

Three Months Ended Nine Months Ended
September 30, September 30,
2015 2014 2015 2014
Revenues:*
Terminalling and storage$15,091 $19,045 $58,626 $55,798
Marine transportation6,552 6,076 19,919 18,340
Product Sales1,731 883 5,079 6,484
Costs and expenses:*
Cost of products sold: (excluding depreciation and amortization)
Natural gas services6,470 9,908 20,198 29,169
Sulfur services3,387 4,491 10,629 13,808
Terminalling and storage3,227 9,174 14,261 25,571
Expenses:
Operating expenses19,290 21,013 58,605 58,500
Selling, general and administrative5,922 7,230 17,765 18,103

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 October 28, 2015.

Three Months Ended Nine Months Ended
September 30, September 30,
2015 2014 2015 2014
Allocation of net income (loss) attributable to:
Limited partner interest:
Continuing operations$(645) $(25,162) $18,366 $(12,743)
Discontinued operations (1,142) 736 (2,980)
$(645) $(26,304) $19,102 $(15,723)
General partner interest:
Continuing operations$3,959 $(515) $11,836 $(261)
Discontinued operations (24) 474 (61)
$3,959 $(539) $12,310 $(322)
Net income (loss) per unit attributable to limited partners:
Basic:
Continuing operations$(0.02) $(0.78) $0.52 $(0.44)
Discontinued operations (0.04) 0.02 (0.10)
$(0.02) $(0.82) $0.54 $(0.54)
Weighted average limited partner units - basic35,308 32,243 35,309 29,271
Diluted:
Continuing operations$(0.02) $(0.78) $0.52 $(0.44)
Discontinued operations (0.04) 0.02 (0.1)
$(0.02) $(0.82) $0.54 $(0.54)
Weighted average limited partner units - diluted35,308 32,243 35,369 29,271

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 October 28, 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, 201426,625,026 $254,028 $6,389 $260,417
Net income (15,756) (322) (16,078)
Issuance of common units8,727,673 331,571 331,571
Issuance of restricted units6,900
Forfeiture of restricted units(3,500)
General partner contribution 6,995 6,995
Cash distributions (66,473) (1,506) (67,979)
Excess purchase price over carrying value of acquired assets (4,948) (4,948)
Unit-based compensation 589 589
Purchase of treasury units(6,400) (277) (277)
Balances - September 30, 201435,349,699 $498,734 $11,556 $510,290
Balances - January 1, 201535,365,912 $470,943 $14,728 $485,671
Net income 19,229 12,310 31,539
Issuance of common units, net of issuance related costs (330) (330)
Issuance of restricted units91,950
Forfeiture of restricted units(1,250)
General partner contribution 55 55
Cash distributions (86,420) (13,526) (99,946)
Unit-based compensation 1,080 1,080
Reimbursement of excess purchase price over carrying value of acquired assets 1,500 1,500
Balances - September 30, 201535,456,612 $406,002 $13,567 $419,569

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 October 28, 2015.


MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
Nine Months Ended
September 30,
2015 2014
Cash flows from operating activities:
Net income (loss)$31,539 $(16,078)
Less: (Income) loss from discontinued operations, net of income taxes(1,215) 3,048
Net income from continuing operations30,324 (13,030)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization68,737 44,277
Amortization of deferred debt issuance costs4,142 5,415
Amortization of debt discount 1,305
Amortization of premium on notes payable(246) (164)
Loss (gain) on sale of property, plant and equipment1,751 (54)
Impairment of long-lived assets 3,445
Gain on retirement of senior notes(728)
Equity in earnings of unconsolidated entities(5,752) (4,297)
Reduction in carrying value of investment in Cardinal due to purchase of the controlling interest 30,102
Non-cash mark-to-market on derivatives358 489
Unit-based compensation1,080 589
Preferred dividends on MET investment 1,498
Return on investment in unconsolidated subsidiary7,800 600
Change in current assets and liabilities, excluding effects of acquisitions and dispositions:
Accounts and other receivables69,967 32,345
Product exchange receivables909 (3,624)
Inventories(3,134) (21,793)
Due from affiliates3,348 (2,482)
Other current assets354 1,219
Trade and other accounts payable(59,124) (28,426)
Product exchange payables6,360 9,265
Due to affiliates(1,935) 9,117
Income taxes payable(386) (202)
Other accrued liabilities(8,490) (7,214)
Change in other non-current assets and liabilities(999) 1,115
Net cash provided by continuing operating activities114,336 59,495
Net cash used in discontinued operating activities(1,352) (6,494)
Net cash provided by operating activities112,984 53,001
Cash flows from investing activities:
Payments for property, plant and equipment(40,123) (58,522)
Acquisitions, less cash acquired (100,046)
Payments for plant turnaround costs(1,754) (4,000)
Proceeds from sale of property, plant and equipment1,985 702
Proceeds from involuntary conversion of property, plant and equipment 2,475
Investment in unconsolidated entities (134,413)
Return of investments from unconsolidated entities 726
Contributions to unconsolidated entities (3,386)
Net cash used in continuing investing activities(39,892) (296,464)
Net cash provided by discontinued investing activities41,250
Net cash provided by (used in) investing activities1,358 (296,464)
Cash flows from financing activities:
Payments of long-term debt(224,310) (1,458,096)
Proceeds from long-term debt209,000 1,426,250
Proceeds from issuance of common units, net of issuance related costs(330) 331,571
General partner contribution55 6,995
Purchase of treasury units (277)
Payment of debt issuance costs(340) (3,589)
Excess purchase price over carrying value of acquired assets (4,948)
Reimbursement of excess purchase price over carrying value of acquired assets1,500
Cash distributions paid(99,946) (67,979)
Net cash provided by (used in) financing activities(114,371) 229,927
Net decrease in cash(29) (13,536)
Cash at beginning of period42 16,542
Cash at end of period$13 $3,006
Non-cash additions to property, plant and equipment$4,389 $4,208

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 October 28, 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 September 30, 2015 and 2014
Three Months Ended
September 30,
Variance Percent Change
2015 2014
(In thousands, except BBL per day)
Revenues:
Services$35,144 $33,213 $1,931 6%
Products33,329 47,735 (14,406) (30)%
Total revenues68,473 80,948 (12,475) (15)%
Cost of products sold28,765 43,193 (14,428) (33)%
Operating expenses20,268 21,506 (1,238) (6)%
Selling, general and administrative expenses995 786 209 27%
Depreciation and amortization9,624 9,512 112 1%
8,821 5,951 2,870 48%
Other operating income (loss)2 347 (345) (99)%
Operating income$8,823 $6,298 $2,525 40%
Lubricant sales volumes (gallons)5,974 8,193 (2,219) (27)%
Shore-based throughput volumes (gallons)36,383 64,338 (27,955) (43)%
Smackover refinery throughput volumes (BBL per day)6,205 7,123 (918) (13)%
Corpus Christi crude terminal (BBL per day)148,377 173,315 (24,938) (14)%


Comparative Results of Operations for the Nine Months Ended September 30, 2015 and 2014
Nine Months Ended
September 30,
Variance Percent Change
2015 2014
(In thousands, except BBL per day)
Revenues:
Services$104,893 $101,711 $3,182 3%
Products102,901 153,451 (50,550) (33)%
Total revenues207,794 255,162 (47,368) (19)%
Cost of products sold90,076 139,028 (48,952) (35)%
Operating expenses62,947 61,628 1,319 2%
Selling, general and administrative expenses2,806 2,484 322 13%
Depreciation and amortization29,030 27,902 1,128 4%
22,935 24,120 (1,185) (5)%
Other operating income (loss)(199) 385 (584) (152)%
Operating income$22,736 $24,505 $(1,769) (7)%
Lubricant sales volumes (gallons)18,007 26,170 (8,163) (31)%
Shore-based throughput volumes (gallons)122,743 186,956 (64,213) (34)%
Smackover refinery throughput volumes (BBL per day)6,091 5,803 288 5%
Corpus Christi crude terminal (BBL per day)166,129 160,332 5,797 4%


Natural Gas Services Segment
Comparative Results of Operations for the Three Months Ended September 30, 2015 and 2014
Three Months Ended
September 30,
Variance Percent Change
2015 2014
(In thousands)
Revenues:
Services$17,120 $5,764 $11,356 197%
Products86,714 217,398 (130,684) (60)%
Total revenues103,834 223,162 (119,328) (53)%
Cost of products sold81,472 206,354 (124,882) (61)%
Operating expenses6,489 3,438 3,051 89%
Selling, general and administrative expenses1,848 3,366 (1,518) (45)%
Depreciation and amortization8,522 2,398 6,124 255%
Operating income$5,503 $7,606 $(2,103) (28)%
NGL sales volumes (Bbls)3,138 3,511 (373) (11)%


Comparative Results of Operations for the Nine Months Ended September 30, 2015 and 2014
Nine Months Ended
September 30,
Variance Percent Change
2015 2014
(In thousands)
Revenues:
Services$50,171 $5,764 $44,407 770%
Products330,803 771,798 (440,995) (57)%
Total revenues380,974 777,562 (396,588) (51)%
Cost of products sold308,713 740,021 (431,308) (58)%
Operating expenses17,905 5,530 12,375 224%
Selling, general and administrative expenses6,313 6,253 60 1%
Depreciation and amortization25,297 2,811 22,486 800%
22,746 22,947 (201) (1)%
Other operating income (loss)(7) (7)
Operating income$22,739 $22,947 $(208) (1)%
NGL sales volumes (Bbls)10,227 12,027 (1,800) (15)%


Sulfur Services Segment
Comparative Results of Operations for the Three Months Ended September 30, 2015 and 2014
Three Months Ended
September 30,
Variance Percent Change
2015 2014
(In thousands)
Revenues:
Services$3,090 $3,037 $53 2%
Products33,213 46,993 (13,780) (29)%
Total revenues36,303 50,030 (13,727) (27)%
Cost of products sold26,235 38,932 (12,697) (33)%
Operating expenses3,427 4,497 (1,070) (24)%
Selling, general and administrative expenses934 1,166 (232) (20)%
Depreciation and amortization2,129 2,078 51 2%
3,578 3,357 221 7%
Other operating income(5) (5)
Operating income$3,573 $3,357 $216 6%
Sulfur (long tons)203 251 (48) (19)%
Fertilizer (long tons)51 52 (1) (2)%
Total sulfur services volumes (long tons)254 303 (49) (16)%

Comparative Results of Operations for the Nine Months Ended September 30, 2015 and 2014
Nine Months Ended
September 30,
Variance Percent Change
2015 2014
(In thousands)
Revenues:
Services$9,270 $9,112 $158 2%
Products128,544 157,706 (29,162) (18)%
Total revenues137,814 166,818 (29,004) (17)%
Cost of products sold95,961 122,281 (26,320) (22)%
Operating expenses11,697 13,283 (1,586) (12)%
Selling, general and administrative expenses2,859 3,404 (545) (16)%
Depreciation and amortization6,360 6,092 268 4%
20,937 21,758 (821) (4)%
Other operating loss(5) (5)
Operating income$20,932 $21,758 $(826) (4)%
Sulfur (long tons)641 646 (5) (1)%
Fertilizer (long tons)229 233 (4) (2)%
Total sulfur services volumes (long tons)870 879 (9) (1)%


Marine Transportation Segment
Comparative Results of Operations for the Three Months Ended September 30, 2015 and 2014
Three Months Ended
September 30,
Variance Percent Change
2015 2014
(In thousands)
Revenues$19,522 $25,858 $(6,336) (25)%
Operating expenses15,855 19,181 (3,326) (17)%
Selling, general and administrative expenses(59) 364 (423) (116)%
Depreciation and amortization3,060 2,469 591 24%
666 3,844 (3,178) (83)%
Impairment of long-lived assets (3,445) 3,445 (100)%
Other operating income(1,583) (1,583)
Operating income (loss)$(917) $399 $(1,316) (330)%

Comparative Results of Operations for the Nine Months Ended September 30, 2015 and 2014
Nine Months Ended
September 30,
Variance Percent Change
2015 2014
(In thousands)
Revenues$62,354 $73,254 $(10,900) (15)%
Operating expenses48,284 60,805 (12,521) (21)%
Selling, general and administrative expenses251 867 (616) (71)%
Depreciation and amortization8,050 7,472 578 8%
Operating income$5,769 $4,110 $1,659 40%
Impairment of long-lived assets (3,445) 3,445 100%
Other operating income(1,552) 16 (1,568) (9,800)%
Operating income$4,217 $681 $3,536 519%


Distributions from Unconsolidated Entities
Comparative Results of Operations for the Three Months Ended September 30, 2015 and 2014
Three Months Ended
September 30,
Variance Percent Change
2015 2014
(In thousands)
Distributions from WTLPG$3,400 $600 $2,800 467%
Distributions from Cardinal
Distributions from MET 382 (382) (100)%
Distributions from unconsolidated entities$3,400 $982 $2,418 246%


Comparative Results of Operations for the Nine Months Ended September 30, 2015 and 2014
Nine Months Ended
September 30,
Variance Percent Change
2015 2014
(In thousands)
Distributions from WTLPG$7,800 $600 $7,200 1,200%
Distributions from Cardinal 225 (225) 100%
Distributions from MET 1,498 (1,498) (100)%
Distributions from unconsolidated entities$7,800 $2,323 $5,477 236%



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, 2015 and 2014.

Reconciliation of EBITDA, Adjusted EBITDA, and Distributable Cash Flow
Three Months Ended Nine Months Ended
September 30, September 30,
2015 2014 2015 2014
(in thousands)
Net income (loss)$3,330 $(26,905) $31,539 $(16,078)
Less: (Income) loss from discontinued operations, net of income taxes 1,167 (1,215) 3,048
Income (loss) from continuing operations3,330 (25,738) 30,324 (13,030)
Adjustments:
Interest expense11,994 11,459 32,465 34,351
Income tax expense200 300 814 954
Depreciation and amortization23,335 16,457 68,737 44,277
EBITDA38,859 2,478 132,340 66,552
Adjustments:
Equity in earnings of unconsolidated entities(2,363) (2,655) (5,752) (4,297)
(Gain) loss on sale of property, plant and equipment1,586 1,751 (54)
Impairment of long-lived assets 3,445 3,445
Unrealized mark to market on commodity derivatives358 (21) 358 (21)
Reduction in carrying value of investment in Cardinal due to the purchase of the controlling interest 30,102 30,102
Debt prepayment premium 7,767
Gain on retirement of senior unsecured notes(728) (728)
Distributions from unconsolidated entities3,400 982 7,800 2,323
Unit-based compensation330 201 1,080 589
Adjusted EBITDA41,442 34,532 136,849 106,406
Adjustments:
Interest expense(11,994) (11,459) (32,465) (34,351)
Income tax expense(200) (300) (814) (954)
Amortization of debt discount 1,305
Amortization of debt premium(82) (82) (246) (164)
Amortization of deferred debt issuance costs2,400 827 4,142 5,415
Non-cash mark-to-market on derivatives (58) 489
Payments for plant turnaround costs (90) (1,754) (4,000)
Maintenance capital expenditures(2,438) (4,306) (7,621) (13,260)
Distributable Cash Flow$29,128 $19,064 $98,091 $60,886


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

Source:Martin Midstream Partners L.P.