×

Martin Midstream Partners Reports 2016 Second Quarter Financial Results

  • Maintained distribution of $0.8125
  • Strong second quarter sulfur services and fertilizer performance
  • Challenging marine fundamentals continue

KILGORE, Texas, July 27, 2016 (GLOBE NEWSWIRE) -- Martin Midstream Partners L.P. (Nasdaq:MMLP) (the "Partnership") announced today its financial results for the quarter ended June 30, 2016.

Ruben Martin, President and Chief Executive Officer of Martin Midstream GP LLC, the general partner of the Partnership said, "The challenging environment we referenced at the end of the first quarter continued into second-quarter 2016 results. The Partnership’s distributable cash flow for the second-quarter 2016 did not meet our internal forecast. Higher than anticipated maintenance capital expenditures of $5.4 million and weak operating results from our Marine Transportation segment resulted in a distribution coverage ratio of 0.76 times. We expect maintenance capital and turnaround expenditures to be significantly lower in the second half of the year, as we have spent approximately $12.4 million of the budgeted $18.9 million through the first six months of 2016.

"Across our businesses, Natural Gas Services segment results were lower than anticipated from a combination of the seasonally weaker refinery grade butane and legacy natural gas liquids businesses. Further, distributions from the West Texas LPG pipeline were weaker than forecast due to the previously announced revision to prior tariffs mandated by the Railroad Commission of Texas and elevated maintenance capital expenditures at the joint venture. This was offset by outperformance in our Cardinal Gas Storage division where interruptible revenue continued to be strong.

"Our Terminalling and Storage segment exceeded planned performance during the second quarter benefiting from a modest recovery in our lubricants platform, including strong performance in our grease business. In addition, our legacy specialty terminals and the Smackover refinery were stronger in the second quarter based on lower operating expenses and lower than anticipated repair and maintenance expenses.

"Within our Sulfur Services segment, as expected, the delayed first-quarter fertilizer application pushed volumes into the second quarter producing enhanced results. Through two quarters, we have achieved our full year cash flow guidance in fertilizer. While we expect usual segment seasonality heading into the third and fourth quarters, overall fertilizer fundamentals continue to be strong.

"In our Marine Transportation segment, we continue to see an abundance of supply of marine equipment in our predominantly Gulf Coast by-product and refined product markets. This translated to lower than anticipated utilization and day rates particularly in our inland business. Further, regulatory dry-docking and repair and maintenance expenses continued into the second quarter. Additionally, we encountered higher than anticipated maintenance capital expenditures associated with our marine assets that are housed within our Sulfur Services segment further decreasing distributable cash flow.

"Looking forward, management is focused on multiple initiatives to improve our leverage profile and distribution coverage ratio both near and long-term. We look forward to providing more details on these initiatives prior to the end of the year.”

As a result of a $4.1 million non-cash goodwill impairment charge in the Partnership's Marine Transportation segment, the Partnership had a net loss for the second quarter of 2016 of $1.2 million, a loss of $0.14 per limited partner unit. Net income for the second quarter of 2015 was $11.0 million, or $0.19 per limited partner unit. The Partnership's adjusted EBITDA from continuing operations for the second quarter of 2016 was $41.6 million compared to adjusted EBITDA from continuing operations for the second quarter of 2015 of $45.0 million, a decrease of 8%.

Net income from continuing operations for the six months ended June 30, 2016 was $14.7 million, or $0.19 per limited partner unit. Net income from continuing operations for the six months ended of 2015 was $27.0 million, or $0.54 per limited partner unit. Net income for the six months ended June 30, 2016 was negatively impacted by a non-cash goodwill impairment charge in the Partnership's Marine Transportation segment of $4.1 million, or $0.12 per limited partner unit. The Partnership's adjusted EBITDA from continuing operations for the six months ended June 30, 2016 was $90.9 million compared to adjusted EBITDA from continuing operations for the six months ended June 30, 2015 of $95.4 million, a decrease of 5%.

The Partnership's distributable cash flow from continuing operations for the second quarter of 2016 was $25.4 million compared to distributable cash flow from continuing operations for the second quarter of 2015 of $31.9 million, a decrease of 20%.

The Partnership's distributable cash flow from continuing operations for the six months ended June 30, 2016 was $57.9 million compared to distributable cash flow from continuing operations for the six months ended June 30, 2015 of $69.0 million, a decrease of 16%.

Revenues for the second quarter of 2016 were $190.3 million compared to $251.1 million for the second quarter of 2015. Revenues for the six months ended June 30, 2016 were $416.0 million compared to $556.5 million for the six months ended June 30, 2015.

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 for the three and six months ended June 30, 2016.

The Partnership had no net income, distributable cash flow or adjusted EBITDA from discontinued operations related to the Floating Storage Assets for the three months ended June 30, 2015. The Partnership had net income from discontinued operations for the six months ended June 30, 2015 of $1.2 million, or $0.02 per limited partner unit. Distributable cash flow and adjusted EBITDA from discontinued operations were $1.2 million for the six months ended June 30, 2015.

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 and condensed financial statements as of and for the three and six months ended June 30, 2016 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 July 27, 2016.

An attachment accompanying this announcement is available at http://www.globenewswire.com/NewsRoom/AttachmentNg/3546b3bb-58bf-4b2a-95bd-bb0806e7cb41.

Quarterly Cash Distribution

The quarterly cash distribution of $0.8125 per common unit, which was announced on July 21, 2016, is payable on August 12, 2016 to common unitholders of record as of the close of business on August 5, 2016. The ex-dividend date for the cash distribution is August 3, 2016. 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, July 28, 2016, at 8:00 a.m. Central Time. The conference call can be accessed by calling (877) 878-2695. Additionally, an accompanying slide and live webcast will be available by visiting Martin Midstream Partners’ website at www.martinmidstream.com. An audio replay of the conference call will be available by calling (855) 859-2056 from 11:00 a.m. Central Time on July 28, 2016 through 10:59 p.m. Central Time on August 8, 2016. The access code for the conference call and the audio replay is Conference ID No. 40605761. The audio replay will also be archived under the Events and Presentations section of the Partnership’s website.

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.

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


MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED BALANCE SHEETS
(Dollars in thousands)
June 30,
2016
December 31,
2015
(Unaudited) (Audited)
Assets
Cash$28 $31
Accounts and other receivables, less allowance for doubtful accounts of $372 and $430, respectively 50,360 74,355
Product exchange receivables118 1,050
Inventories90,636 75,870
Due from affiliates7,972 10,126
Fair value of derivatives 675
Other current assets5,129 5,718
Total current assets154,243 167,825
Property, plant and equipment, at cost1,391,544 1,387,814
Accumulated depreciation(422,465) (404,574)
Property, plant and equipment, net969,079 983,240
Goodwill19,657 23,802
Investment in WTLPG130,474 132,292
Note receivable - Martin Energy Trading LLC15,000 15,000
Other assets, net53,279 58,314
Total assets$1,341,732 $1,380,473
Liabilities and Partners’ Capital
Trade and other accounts payable$81,836 $81,180
Product exchange payables8,809 12,732
Due to affiliates3,859 5,738
Income taxes payable370 985
Fair value of derivatives862
Other accrued liabilities20,663 18,533
Total current liabilities116,399 119,168
Long-term debt, net878,891 865,003
Fair value of derivatives 206
Other long-term obligations2,551 2,217
Total liabilities997,841 986,594
Commitments and contingencies (Note 16)
Partners’ capital343,891 393,879
Total partners’ capital343,891 393,879
Total liabilities and partners' capital$1,341,732 $1,380,473

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 July 27, 2016.

MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars and units in thousands, except per unit amounts)
Three Months Ended Six Months Ended
June 30, June 30,
2016 2015 2016 2015
Revenues:
Terminalling and storage *$31,090 $33,453 $62,795 $67,250
Marine transportation *14,339 20,343 30,685 40,979
Natural gas services*15,403 16,564 31,500 33,051
Sulfur services2,700 3,090 5,400 6,180
Product sales: *
Natural gas services58,899 97,786 149,990 244,089
Sulfur services39,588 45,284 79,063 95,331
Terminalling and storage28,329 34,579 56,520 69,572
126,816 177,649 285,573 408,992
Total revenues190,348 251,099 415,953 556,452
Costs and expenses:
Cost of products sold: (excluding depreciation and amortization)
Natural gas services *55,579 88,623 134,123 226,330
Sulfur services *24,700 33,518 52,224 69,541
Terminalling and storage *22,934 29,658 46,766 59,740
103,213 151,799 233,113 355,611
Expenses:
Operating expenses *40,822 47,783 82,054 93,089
Selling, general and administrative *8,144 9,035 16,315 17,841
Loss on impairment of goodwill4,145 4,145
Depreciation and amortization22,089 22,685 44,137 45,402
Total costs and expenses178,413 231,302 379,764 511,943
Other operating loss(1,679) (167) (1,595) (177)
Operating income10,256 19,630 34,594 44,332
Other income (expense):
Equity in earnings of WTLPG805 1,649 2,482 3,389
Interest expense, net(12,155) (9,925) (22,267) (20,471)
Other, net74 (79) 136 358
Total other expense(11,276) (8,355) (19,649) (16,724)
Net income (loss) before taxes(1,020) 11,275 14,945 27,608
Income tax expense(191) (314) (242) (614)
Income (loss) from continuing operations(1,211) 10,961 14,703 26,994
Income from discontinued operations, net of income taxes 1,215
Net income (loss)(1,211) 10,961 14,703 28,209
Less general partner's interest in net income(3,869) (4,113) (8,080) (8,351)
Less (income) loss allocable to unvested restricted units4 (44) (39) (111)
Limited partners' interest in net income (loss)$(5,076) $6,804 $6,584 $19,747

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 July 27, 2016.

*Related Party Transactions Shown Below

MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars and units in thousands, except per unit amounts)
*Related Party Transactions Included Above
Three Months Ended Six Months Ended
June 30, June 30,
2016 2015 2016 2015
Revenues:*
Terminalling and storage$20,590 $23,061 $41,548 $43,535
Marine transportation6,036 6,622 12,447 13,367
Natural gas services129 442
Product Sales968 1,759 1,668 3,348
Costs and expenses:*
Cost of products sold: (excluding depreciation and amortization)
Natural gas services4,498 6,810 7,883 13,728
Sulfur services3,810 3,618 7,622 7,242
Terminalling and storage4,081 5,632 7,466 11,034
Expenses:
Operating expenses18,088 18,915 35,445 39,315
Selling, general and administrative6,911 5,849 12,343 11,843

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 July 27, 2016.

MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars and units in thousands, except per unit amounts)
Three Months Ended Six Months Ended
June 30, June 30,
2016 2015 2016 2015
Allocation of net income (loss) attributable to:
Limited partner interest:
Continuing operations$(5,076) $6,804 $6,584 $18,896
Discontinued operations 851
$(5,076) $6,804 $6,584 $19,747
General partner interest:
Continuing operations$3,869 $4,113 $8,080 $7,992
Discontinued operations 359
$3,869 $4,113 $8,080 $8,351
Net income (loss) per unit attributable to limited partners:
Basic:
Continuing operations$(0.14) $0.19 $0.19 $0.54
Discontinued operations 0.02
$(0.14) $0.19 $0.19 $0.56
Weighted average limited partner units - basic35,346 35,308 35,366 35,316
Diluted:
Continuing operations$(0.14) $0.19 $0.19 $0.54
Discontinued operations 0.02
$(0.14) $0.19 $0.19 $0.56
Weighted average limited partner units - diluted35,346 35,376 35,380 35,372

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 July 27, 2016.

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, 201535,365,912 $470,943 $14,728 $485,671
Net income 19,858 8,351 28,209
Issuance of common units, net (269) (269)
Issuance of restricted units91,950
Forfeiture of restricted units(1,000)
General partner contribution 55 55
Cash distributions (57,612) (8,965) (66,577)
Reimbursement of excess purchase price over carrying value of acquired assets 750 750
Unit-based compensation 750 750
Balances - June 30, 201535,456,862 $434,420 $14,169 $448,589
Balances - January 1, 201635,456,612 $380,845 $13,034 $393,879
Net income 6,623 8,080 14,703
Issuance of restricted units13,800
Forfeiture of restricted units(250)
Cash distributions (57,603) (9,119) (66,722)
Unit-based compensation 486 486
Reimbursement of excess purchase price over carrying value of acquired assets 1,875 1,875
Purchase of treasury units(15,200) (330) (330)
Balances - June 30, 201635,454,962 $331,896 $11,995 $343,891

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 July 27, 2016.


MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
Six Months Ended
June 30,
2016 2015
Cash flows from operating activities:
Net income$14,703 $28,209
Less: Income from discontinued operations, net of income taxes (1,215)
Net income from continuing operations14,703 26,994
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization44,137 45,402
Amortization of deferred debt issuance costs2,247 1,742
Amortization of premium on notes payable(153) (164)
Loss (gain) on sale of property, plant and equipment1,595 165
Loss on impairment of goodwill4,145
Equity in earnings of unconsolidated entities(2,482) (3,389)
Derivative income(1,125) (1,745)
Net cash received for commodity derivatives1,666
Net cash received for interest rate derivatives160
Net premiums received on derivatives that settled during the year on interest rate swaption contracts 630 1,745
Unit-based compensation486 750
Cash distributions from WTLPG4,300 4,400
Change in current assets and liabilities, excluding effects of acquisitions and dispositions:
Accounts and other receivables23,995 58,689
Product exchange receivables932 2,752
Inventories(14,766) 12,204
Due from affiliates2,154 3,800
Other current assets509 (711)
Trade and other accounts payable(3,429) (46,283)
Product exchange payables(3,923) 2,308
Due to affiliates(1,879) (118)
Income taxes payable(615) (438)
Other accrued liabilities2,130 (959)
Change in other non-current assets and liabilities(614) (1,709)
Net cash provided by continuing operating activities74,803 105,435
Net cash used in discontinued operating activities (1,351)
Net cash provided by operating activities74,803 104,084
Cash flows from investing activities:
Payments for property, plant and equipment(27,844) (28,027)
Acquisition of intangible assets(2,150)
Payments for plant turnaround costs(1,184) (1,754)
Proceeds from sale of property, plant and equipment655 776
Proceeds from involuntary conversion of property, plant and equipment9,100
Net cash used in continuing investing activities(21,423) (29,005)
Net cash provided by discontinued investing activities 41,250
Net cash provided by (used in) investing activities(21,423) 12,245
Cash flows from financing activities:
Payments of long-term debt(163,700) (151,000)
Proceeds from long-term debt180,700 101,000
Proceeds from issuance of common units, net of issuance related costs (269)
General partner contribution 55
Purchase of treasury units(330)
Payment of debt issuance costs(5,206) (306)
Reimbursement of excess purchase price over carrying value of acquired assets1,875 750
Cash distributions paid(66,722) (66,577)
Net cash used in financing activities(53,383) (116,347)
Net decrease in cash(3) (18)
Cash at beginning of period31 42
Cash at end of period$28 $24
Non-cash additions to property, plant and equipment$989 $3,767

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 July 27, 2016.

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 June 30, 2016 and 2015
Three Months Ended
June 30,
Variance Percent
Change
2016 2015
(In thousands, except BBL per day)
Revenues:
Services$32,392 $34,708 $(2,316) (7)%
Products28,329 34,579 (6,250) (18)%
Total revenues60,721 69,287 (8,566) (12)%
Cost of products sold23,471 30,150 (6,679) (22)%
Operating expenses17,725 22,326 (4,601) (21)%
Selling, general and administrative expenses1,007 938 69 7%
Depreciation and amortization10,078 9,617 461 5%
8,440 6,256 2,184 35%
Other operating loss (195) 195 (100)%
Operating income$8,440 $6,061 $2,379 39%
Lubricant sales volumes (gallons)5,194 5,984 (790) (13)%
Shore-based throughput volumes (gallons)26,187 43,836 (17,649) (40)%
Smackover refinery throughput volumes (BBL per day) 6,567 6,524 43 1%
Corpus Christi crude terminal (BBL per day)74,565 169,787 (95,222) (56)%


Comparative Results of Operations for the Six Months Ended June 30, 2016 and 2015
Six Months Ended
June 30,
Variance Percent
Change
2016 2015
(In thousands, except BBL per day)
Revenues:
Services$65,549 $69,749 $(4,200) (6)%
Products56,522 69,572 (13,050) (19)%
Total revenues122,071 139,321 (17,250) (12)%
Cost of products sold47,821 61,311 (13,490) (22)%
Operating expenses36,441 42,679 (6,238) (15)%
Selling, general and administrative expenses2,107 1,811 296 16%
Depreciation and amortization20,076 19,406 670 3%
15,626 14,114 1,512 11%
Other operating income (loss)100 (201) 301 (150)%
Operating income$15,726 $13,913 $1,813 13%
Lubricant sales volumes (gallons)10,340 12,033 (1,693) (14)%
Shore-based throughput volumes (gallons)51,746 86,360 (34,614) (40)%
Smackover refinery throughput volumes (BBL per day) 5,503 6,033 (530) (9)%
Corpus Christi crude terminal (BBL per day)83,600 175,151 (91,551) (52)%


MARTIN MIDSTREAM PARTNERS L.P.
SEGMENT OPERATING INCOME
(Unaudited)
(Dollars and volumes in thousands, except BBL per day)
Natural Gas Services Segment
Comparative Results of Operations for the Three Months Ended June 30, 2016 and 2015
Three Months Ended
June 30,
Variance Percent
Change
2016 2015
(In thousands)
Revenues:
Services$15,403 $16,564 $(1,161) (7)%
Products58,899 97,786 (38,887) (40)%
Total revenues74,302 114,350 (40,048) (35)%
Cost of products sold56,233 89,074 (32,841) (37)%
Operating expenses6,138 5,727 411 7%
Selling, general and administrative expenses 1,807 2,364 (557) (24)%
Depreciation and amortization6,983 8,373 (1,390) (17)%
3,141 8,812 (5,671) (64)%
Other operating loss(96) (3) (93) 3,100%
Operating income$3,045 $8,809 $(5,764) (65)%
Distributions from unconsolidated entities$1,800 $2,300 $(500) (22)%
NGL sales volumes (Bbls)1,726 3,220 (1,494) (46)%


Comparative Results of Operations for the Six Months Ended June 30, 2016 and 2015
Six Months Ended
June 30,
Variance Percent
Change
2016 2015
(In thousands)
Revenues:
Services$31,500 $33,051 $(1,551) (5)%
Products149,990 244,089 (94,099) (39)%
Total revenues181,490 277,140 (95,650) (35)%
Cost of products sold135,581 227,241 (91,660) (40)%
Operating expenses11,657 11,416 241 2%
Selling, general and administrative expenses 4,111 4,465 (354) (8)%
Depreciation and amortization13,957 16,775 (2,818) (17)%
16,184 17,243 (1,059) (6)%
Other operating loss(96) (7) (89) 1,271%
Operating income$16,088 $17,236 $(1,148) (7)%
Distributions from unconsolidated entities$4,300 $4,400 $(100) (2)%
NGL sales volumes (Bbls)4,928 7,089 (2,161) (30)%


MARTIN MIDSTREAM PARTNERS L.P.
SEGMENT OPERATING INCOME
(Unaudited)
(Dollars and volumes in thousands, except BBL per day)
Sulfur Services Segment
Comparative Results of Operations for the Three Months Ended June 30, 2016 and 2015
Three Months Ended
June 30,
Variance Percent
Change
2016 2015
(In thousands)
Revenues:
Services$2,700 $3,090 $(390) (13)%
Products39,588 45,284 (5,696) (13)%
Total revenues42,288 48,374 (6,086) (13)%
Cost of products sold24,790 33,613 (8,823) (26)%
Operating expenses3,442 3,987 (545) (14)%
Selling, general and administrative expenses 930 863 67 8%
Depreciation and amortization2,011 2,105 (94) (4)%
11,115 7,806 3,309 42%
Other operating loss(16) (16)
Operating income$11,099 $7,806 $3,293 42%
Sulfur (long tons)181 222 (41) (18)%
Fertilizer (long tons)87 82 5 6%
Total sulfur services volumes (long tons)268 304 (36) (12)%

Comparative Results of Operations for the Six Months Ended June 30, 2016 and 2015
Six Months Ended
June 30,
Variance Percent
Change
2016 2015
(In thousands)
Revenues:
Services$5,400 $6,180 $(780) (13)%
Products79,063 95,331 (16,268) (17)%
Total revenues84,463 101,511 (17,048) (17)%
Cost of products sold52,405 69,726 (17,321) (25)%
Operating expenses6,199 8,270 (2,071) (25)%
Selling, general and administrative expenses 1,888 1,925 (37) (2)%
Depreciation and amortization3,981 4,231 (250) (6)%
19,990 17,359 2,631 15%
Other operating loss(32) (32)
Operating income$19,958 $17,359 $2,599 15%
Sulfur (long tons)338 438 (100) (23)%
Fertilizer (long tons)170 178 (8) (4)%
Total sulfur services volumes (long tons)508 616 (108) (18)%


MARTIN MIDSTREAM PARTNERS L.P.
SEGMENT OPERATING INCOME
(Unaudited)
(Dollars and volumes in thousands, except BBL per day)
Marine Transportation Segment
Comparative Results of Operations for the Three Months Ended June 30, 2016 and 2015
Three Months Ended
June 30,
Variance Percent
Change
2016 2015
(In thousands)
Revenues$15,032 $20,886 $(5,854) (28)%
Operating expenses14,231 16,523 (2,292) (14)%
Selling, general and administrative expenses 158 350 (192) (55)%
Loss on impairment of goodwill4,145 4,145
Depreciation and amortization3,017 2,590 427 16%
(6,519) 1,423 (7,942) (558)%
Other operating income (loss)(1,567) 31 (1,598) (5,155)%
Operating income (loss)$(8,086) $1,454 $(9,540) (656)%

Comparative Results of Operations for the Six Months Ended June 30, 2016 and 2015
Six Months Ended
June 30,
Variance Percent
Change
2016 2015
(In thousands)
Revenues$31,934 $42,832 $(10,898) (25)%
Operating expenses29,068 32,429 (3,361) (10)%
Selling, general and administrative expenses (261) 310 (571) (184)%
Loss on impairment of goodwill4,145 4,145
Depreciation and amortization6,123 4,990 1,133 23%
Operating income$(7,141) $5,103 $(12,244) (240)%
Other operating income (loss)(1,567) 31 (1,598) (5,155)%
Operating income (loss)$(8,708) $5,134 $(13,842) (270)%


Distributions from Unconsolidated Entities
Comparative Results of Operations for the Three Months Ended June 30, 2016 and 2015
Three Months Ended
June 30,
Variance Percent
Change
2016 2015
(In thousands)
Distributions from WTLPG $1,800 $2,300 $(500) (22)%


Comparative Results of Operations for the Six Months Ended June 30, 2016 and 2015
Six Months Ended
June 30,
Variance Percent
Change
2016 2015
(In thousands)
Distributions from WTLPG $4,300 $4,400 $(100) (2)%

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 six months ended June 30, 2016 and 2015.

Reconciliation of EBITDA, Adjusted EBITDA, and Distributable Cash Flow
Three Months Ended Six Months Ended
June 30, June 30,
2016 2015 2016 2015
(in thousands)
Net income (loss)$(1,211) $10,961 $14,703 $28,209
Less: Income from discontinued operations, net of income taxes (1,215)
Income (loss) from continuing operations(1,211) 10,961 14,703 26,994
Adjustments:
Interest expense12,155 9,925 22,267 20,471
Income tax expense191 314 242 614
Depreciation and amortization22,089 22,685 44,137 45,402
EBITDA33,224 43,885 81,349 93,481
Adjustments:
Equity in earnings of unconsolidated entities(805) (1,649) (2,482) (3,389)
(Gain) loss on sale of property, plant and equipment1,679 153 1,595 165
Loss on impairment of goodwill4,145 4,145
Unrealized mark-to-market on commodity derivatives1,327 1,537
Distributions from unconsolidated entities1,800 2,300 4,300 4,400
Unit-based compensation264 351 486 750
Adjusted EBITDA41,634 45,040 90,930 95,407
Adjustments:
Interest expense(12,155) (9,925) (22,267) (20,471)
Income tax expense(191) (314) (242) (614)
Amortization of debt premium(76) (82) (153) (164)
Amortization of deferred debt issuance costs1,532 874 2,247 1,742
Non-cash mark-to-market on interest rate derivatives (206)
Payments for plant turnaround costs(193) (286) (1,184) (1,754)
Maintenance capital expenditures(5,165) (3,424) (11,209) (5,183)
Distributable Cash Flow$25,386 $31,883 $57,916 $68,963


Source:Martin Midstream Partners L.P.