Martin Midstream Partners 8K Reports 2006 Second Quarter Financial Results | MMLP 8 Aug 06

Exhibit 99.1

MARTIN MIDSTREAM PARTNERS REPORTS
2006 SECOND QUARTER FINANCIAL RESULTS

KILGORE, Texas, August 8, 2006 /PRNewswire-FirstCall via COMTEX/ — Martin Midstream Partners L.P. (Nasdaq: MMLP) announced today its financial results for the second quarter ended June 30, 2006.

MMLP reported net income for the second quarter of 2006 of $5.2 million, or $0.40 per limited partner unit. This compared to net income for the second quarter of 2005 of $2.9 million, or $0.34 per limited partner unit. Revenues for the second quarter of 2006 were $133.1 million compared to $84.9 million for the second quarter of 2005. Second quarter 2006 net income was negatively impacted by a $0.6 million non-cash mark-to-market adjustment on derivatives. This non-cash adjustment resulted in a reduction to net income per limited partner unit of approximately $0.04 per limited partner unit.

MMLP reported net income for the six months ended June 30, 2006 of $9.5 million, or $0.72 per limited partner unit. This compared to net income for the six months ended June 30, 2005 of $6.5 million, or $0.75 per limited partner unit. Revenues for the six months ended June 30, 2006 were $279.9 million, compared to revenues of $181.0 million for the six months ended June 30, 2005.

The Company’s distributable cash flow for the second quarter of 2006 was $7.8 million, compared to $4.5 million for the second quarter of 2005. The Company’s distributable cash flow for the six months ended June 30, 2006 was $15.1 million, compared to $9.7 million for the six months ended June 30, 2005. 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 June 30, 2006 and December 31, 2005, and its Consolidated and Condensed Statements of Operations and Statements of Cash Flows for the three and sixth months ended June 30, 2006 and 2005. 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 August 8, 2006.

Ruben Martin, President and Chief Executive Officer of Martin Midstream GP LLC, the general partner of Martin Midstream Partners, said “Overall, I am pleased with the operating performance of our business segments, particularly the marine group. As we indicated at the end of the first quarter, the acquisitions of new marine vessels and the conversion of certain marine assets have resulted in higher levels of service and higher margins in the second quarter. We are enthusiastic that our marine segment will continue to perform well as demand for our services continues to be strong. With the overall increase in demand for marine transportation, however, we are also incurring higher maintenance capital expenditures as shipyard costs and dry-dock times continue to escalate.”

Mr. Martin also stated “The increase in costs and construction times has also affected our planned expansion at the Waskom plant. Completion of the first phase of expansion will be slightly delayed until year-end, while the second phase is expected to be completed by the end of the first quarter 2007. The first phase of the expansion will increase nameplate capacity at the Waskom plant by 30 million cubic feet per day with the second phase adding an additional 70 million cubic feet per day of capacity and 3,000 barrels per day of additional fractionation capacity. Upon completion of the planned expansions, the Waskom plant will have nameplate processing capacity of 250 million cubic feet per day with 12,500 barrels per day of fractionation capacity. Our projected investment in the full Waskom expansion is expected to be approximately $17.0 million as a result of increased capacity expansion of the second phase and rising construction costs. Despite the escalation in costs, the economics of our previously announced organic growth projects remain excellent, and we look forward to late 2006 and early 2007 as the projects begin to come online.”

Investors’ Conference Call

An investor’s conference call to review the second quarter results will be held on Thursday, August 10, 2006, at 8:30 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 10:00 a.m. Central Time on August 10, 2006 through 11:59 p.m. Central Time on August 17, 2006. The access codes for the conference call and the audio replay are as follows: Account No. 286; Conference ID No. 209874. The audio replay of the conference call will also be archived on the Company’s website at www.martinmidstream.com.

About Martin Midstream Partners

Martin Midstream Partners 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 lines include: terminalling and storage services for petroleum products and by-products; natural gas gathering, processing and LPG distribution; marine transportation services for petroleum products and by-products; sulfur gathering, processing and distribution; and fertilizer manufacturing and distribution.

Additional information concerning the Company is available on the Company’s website at 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 may constitute non-GAAP financial measures 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 distributions from unconsolidated entities (as described below), plus distributable cash from unconsolidated entities (as described below), less equity in earnings of unconsolidated entities (as reported in its Consolidated and Condensed Statements of Operations), less non-cash mark-to-market on derivatives (as reported in its Consolidated and Condensed Statements of Cash Flows), less maintenance capital expenditures (as described below), less gain on involuntary conversion of property, plant and equipment (as reported in its Consolidated and Condensed Statements of Cash Flows), plus debt prepayment premium (as reported in its Consolidated and Condensed Statements of Operations), plus other (as reported in its Consolidated and Condensed Statements of Cash Flows.

MMLP’sdistributions from unconsolidated entitiesis calculated as distributions from unconsolidated entities (as reported in its Consolidated and Condensed Statements of Cash Flows) plus distributions in-kind from equity investments (as reported in its Consolidated and Condensed Statements of Cash Flows). For the quarter ended June 30, 2006, MMLP’s distributions from unconsolidated entities and distributions in-kind from equity investments were $0.4 and $2.0 million, respectively. For the six months ended June 30, 2006, MMLP’s distributions from unconsolidated entities and distributions in-kind from equity investments were $0.7 and $3.9 million, respectively.

MMLP’sdistributable cash from unconsolidated entitiesis calculated as investments in unconsolidated entities (as reported in its Consolidated and Condensed Statements of Cash Flows), plus unconsolidated entities expansion capital expenditures (as reported in Note 5 — Investment in Unconsolidated Partnerships and Joint Ventures of its Quarterly Report on Form 10-Q filed on August 8, 2006). For the quarter ended June 30, 2006, MMLP’s investments in unconsolidated entities and unconsolidated entities expansion capital expenditures were $(0.8) and $1.2 million, respectively. For the six months ended June 30, 2006, MMLP’s investments in unconsolidated entities and unconsolidated entities expansion capital expenditures were $(1.3) and $2.3 million, respectively.

MMLP’scapital expendituresinclude both expansion and maintenance capital expenditures and is calculated as payments for property, plant and equipment (as reported in its Consolidated and Condensed Statements of Cash Flows) plus acquisitions (as reported in its Consolidated and Condensed Statements of Cash Flows). For the quarter ended June 30, 2006, payments for property, plant and equipment and acquisitions were $18.7 and $0.0 million, respectively. For the six months ended June 30, 2006, payments for property, plant and equipment and acquisitions were $37.8 and $7.5 million, respectively. For the quarter and six months ended June 30, 2006, expansion capital expenditures were $13.1 and $36.3 million, excluding unconsolidated entities expansion capital expenditures. For the quarter ended June 30, 2006, maintenance capital expenditures were $5.5 million, including $2.6 million in hurricane-related maintenance capital expenditures. For the six months ended June 30, 2006, maintenance capital expenditures were $8.9 million, including $3.9 million in hurricane-related maintenance 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)


	June 30,			December 31,
	2006			2005
	(Unaudited)			(Audited)
Assets
Cash	$	4,137		$	6,465
Accounts and other receivables, less allowance for doubtful accounts of $123 and $140		49,974			72,162
Product exchange receivables		6,319			2,141
Inventories		35,516			33,909
Due from affiliates		1,486			1,475
Other current assets		1,724			1,420

Total current assets		99,156			117,572


Property, plant, and equipment, at cost.		279,514			235,218
Accumulated depreciation		(67,245	)		(59,505	)

Property, plant and equipment, net		212,269			175,713


Goodwill		27,600			27,600
Investment in unconsolidated entities		61,335			59,879
Other assets, net		8,489			8,280

	$	408,849		$	389,044


Liabilities and Partners’ Capital

Current installments of long-term debt	$	—		$	9,104
Trade and other accounts payable		46,371			67,387
Product exchange payables		13,170			9,624
Due to affiliates		6,836			3,492
Income taxes payable		189			6,345
Other accrued liabilities		3,073			3,617

Total current liabilities		69,639			99,569


Long-term debt		150,000			192,200
Other long-term obligations		2,324			1,710

Total liabilities		221,963			293,479


Partners’ capital		186,405			95,565
Accumulated other comprehensive income		481			—

Total partners’ capital		186,886			95,565

Commitments and contingencies	$	408,849		$	389,044

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 August 8, 2006.

MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except per unit amounts)


	Three Months Ended							Six Months Ended
	June 30,							June 30,
	2006				2005			2006			2005
Revenues:
Terminalling and storage	$	5,592			$	5,443		$	11,348		$	11,077
Marine transportation		10,909				9,582			20,221			18,056
Product sales:
Natural gas/LPG services		84,058				57,688			185,982			127,755
Sulfur		17,624				940			33,013			940
Fertilizer		12,071				8,862			24,096			18,415
Terminalling and storage		2,798				2,381			5,214			4,793

		116,551				69,871			248,305			151,903

Total revenues		133,052				84,896			279,874			181,036

Costs and expenses:
Cost of products sold:
Natural gas/LPG services		81,517				56,412			179,600			124,047
Sulfur		11,701				699			22,172			699
Fertilizer		10,402				7,256			21,402			15,612
Terminalling and storage		2,317				1,921			4,316			4,020

		105,937				66,288			227,490			144,378

Expenses::
Operating expenses		14,381				10,177			28,281			19,242
Selling, general and administrative		2,605		��		1,848			4,991			3,684
Depreciation and amortization		4,255				2,706			8,207			5,360

Total costs and expenses		127,178				81,019			268,969			172,664

Other operating income		—				—			853			—

Operating income		5,874				3,877			11,758			8,372


Other income (expense):
Equity in earnings of unconsolidated entities		2,310				120			4,722			195
Interest expense		(3,018	)			(1,126	)		(6,036	)		(2,195	)
Debt prepayment premium		—				—			(1,160	)		—
Other, net		82				72			251			102

Total other income (expense)		(626	)			(934	)		(2,223	)		(1,898	)


Net income	$	5,248			$	2,943		$	9,535		$	6,474


General partner’s interest in net income	$	237			$	59		$	483		$	129
Limited partners’ interest in net income	$	5,011			$	2,884		$	9,052		$	6,345

Net income per limited partner unit	$	0.40			$	0.34		$	0.72		$	0.75

Weighted average limited partner units — basic		12,682,342				8,475,862			12,491,734			8,475,862
Weighted average limited partner units — diluted		12,685,002				8,475,862			12,494,428			8,475,862

MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)


	Six Months Ended
	June 30
	2006			2005
Cash flows from operating activities:
Net income	$	9,535		$	6,474

Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		8,207			5,360
Amortization of deferred debt issuance costs		500			251
Gain on involuntary conversion of property, plant and equipment		(853	)		—
Equity in earnings of unconsolidated entities		(4,722	)		(195	)
Non-cash mark-to-market on derivatives		638			—
Distributions in-kind from equity investments		3,915			—
Other		57			—
Change in current assets and liabilities, excluding effects of acquisitions and dispositions:

Accounts and other receivables		20,500			12,259
Product exchange receivables		(4,178	)		(347	)
Inventories		(1,607	)		(1,962	)
Due from affiliates		(11	)		(1,746	)
Other current assets		(169	)		(9	)
Trade and other accounts payable		(21,016	)		5,147
Product exchange payables		3,546			(2,254	)
Due to affiliates		3,344			(231	)
Other accrued liabilities		(7,036	)		(82	)
Change in other non-current assets and liabilities		(109	)		(134	)

Net cash provided by operating activities		10,541			22,531


Cash flows from investing activities:
Payments for property, plant and equipment		(37,753	)		(5,174	)
Acquisitions, net of cash acquired		(7,451	)		(10,188	)
Proceeds from sale of property, plant and equipment		770			46
Insurance proceeds from involuntary conversion of property, plant and equipment		2,541			—
Investments in unconsolidated entities		(1,336	)		—
Distributions from unconsolidated entities		687			—

Net cash used in investing activities		(42,542	)		(15,316	)


Cash flows from financing activities:
Payments of long-term debt		(86,304	)		(10,400	)
Proceeds from long-term debt		35,000			11,900
Net proceeds from follow on public offering		95,273			—
Payments of debt issuance costs		(319	)		(397	)
General partner contribution		2,052			—
Cash distributions paid		(16,029	)		(9,254	)

Net cash provided by (used in) financing activities		29,673			(8,151	)


Net (decrease) in cash and cash equivalents		(2,328	)		(936	)

Cash at beginning of period		6,465			3,184


Cash at end of period	$	4,137		$	2,248

MARTIN MIDSTREAM PARTNERS L.P.
DISTRIBUTABLE CASH FLOW
(Dollars in thousands)
(Unaudited Non-GAAP Financial Measure)


	Three Months Ended						Six Months Ended
	June 30						June 30
	2006			2005			2006			2005
Net Income	$	5,248		$	2,943		$	9,535		$	6,474
Adjustments to reconcile net income to distributable cash flow:
Depreciation and amortization		4,255			2,706			8,207			5,360
Amortization of deferred debt issuance costs		251			135			500			251
Distributions from unconsolidated entities¹		2,359			—			4,601			—
Distributable cash from unconsolidated entities²		376			—			984			—
Equity in earnings of unconsolidated entities		(2,310	)		(120	)		(4,722	)		(195	)
Non-cash mark-to-market derivatives		555			—			637			—
Maintenance capital expenditures³		(2,963	)		(1,172	)		(4,968	)		(2,240	)
Gain on involuntary conversion of property, plant and equipment		—			—			(853	)		—
Debt prepayment premium		—			—			1,160			—
Other		57			—			67			46

Distributable cash flow	$	7,829		$	4,492		$	15,149		$	9,696


	Three Months Ended						Six Months Ended
	June 30						June 30
	2006			2005			2006			2005
¹Distributions from unconsolidated entities
Distributions from unconsolidated entities	$	377		$	—		$	687		$	—
Distributions in-kind from equity investments		1,982			—			3,914			—

Distributions from unconsolidated entities	$	2,359		$	—		$	4,601		$	—


²Distributable cash from unconsolidated entities
Investments in unconsolidated entities	$	(790	)	$	—		$	(1,336	)	$	—
Unconsolidated entities expansion capital expenditures		1,166			—			2,320			—

Distributable cash from unconsolidated entities	$	376		$	—		$	984		$	—


³Maintenance capital expenditures
Payments for property, plant and equipment	$	(18,652	)	$	(3,326	)	$	(37,753	)	$	(5,174	)
Acquisitions		—			(3,832	)		(7,451	)		(10,188	)

Capital expenditures		(18,652	)		(7,158	)		(45,204	)		(15,362	)
Expansion capital expenditures		13,114			5,986			36,333			13,121
Hurricane-related maintenance capital expenditures		2,575			—			3,903			—

Maintenance capital expenditures	$	(2,963	)	$	(1,172	)	$	(4,968	)	$	(2,241	)

Martin Midstream Partners (MMLP) 8-KMartin Midstream Partners Reports 2006 Second Quarter Financial Results