Martin Midstream Partners (MMLP) 8-K Martin Midstream Partners Reports 2006 Fourth Quarter and Annual Financial Results

Exhibit 99.1

MARTIN MIDSTREAM PARTNERS REPORTS
2006 FOURTH QUARTER AND ANNUAL FINANCIAL RESULTS

     KILGORE, Texas, March 5, 2007 /PRNewswire-FirstCall via COMTEX/ — Martin Midstream Partners L.P. (Nasdaq: MMLP) announced today its financial results for the fourth quarter and year ended December 31, 2006.

     MMLP reported net income for the fourth quarter of 2006 of $8.4 million, or $0.63 per limited partner unit. This compared to net income for the fourth quarter of 2005 of $2.6 million, or $0.28 per limited partner unit. Revenues for the fourth quarter of 2006 were $149.0 million compared to $144.6 million for the fourth quarter of 2005. Fourth quarter 2006 net income was positively impacted by $2.5 million of gains from involuntary conversions of property, plant and equipment and gains on sale of property, plant and equipment. These items resulted in an increase to net income of approximately $0.20 per limited partner unit for the fourth quarter of 2006.

     MMLP reported net income for the year ended December 31, 2006 of $22.2 million, or $1.69 per limited partner unit. This compared to net income for the year ended December 31, 2005 of $13.9 million, or $1.58 per limited partner unit. Revenues for the year ended December 31, 2006 were $576.4 million, compared to revenues of $438.4 million for the year ended December 31, 2005. Net income for the year ended December 31, 2006 was positively impacted by $3.4 million of gains from involuntary conversions of property, plant and equipment and gains on sale of property, plant and equipment and partially offset by a $1.2 million debt prepayment premium. Together, these items positively impacted net income by approximately $2.2 million, or approximately $0.17 per limited partner unit for the year ended December 31, 2006.

     The Company’s distributable cash flow for the year ended December 31, 2006 was $32.1 million. 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 Balance Sheets as of December 31, 2006 and December 31, 2005, its Consolidated Statements of Operations for the years ended December 31, 2006, 2005 and 2004, its Consolidated Statements of Changes in Capital for the years ended December 31, 2006, 2005 and 2004, its Consolidated Statements of Comprehensive Income for the years ended December 31, 2006 and 2005, its Consolidated Statements of Cash Flows for the years ended December 31, 2006, 2005 and 2004 and its Consolidated Statements of Operations for the quarters ended December 31, 2006 and 2005. These financial statements should be read in conjunction with the information contained in the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 5, 2007.

     Ruben Martin, President and Chief Executive Officer of Martin Midstream GP LLC, the general partner of Martin Midstream Partners, said “The past year provided both opportunities and challenges for our company. With a full year of benefit from our Prism acquisition, we were able to increase our distributions to our unitholders by 11%, our highest year-over-year

distribution growth since going public in 2002. While this distribution growth was substantially improved relative to prior years, we continue to look for opportunities to improve our overall performance for our unitholders.”

     Mr. Martin also stated, “While 2005 was marked primarily by acquisitions, we turned our focus to organic growth projects in 2006. Last March we announced an $80 million growth capital expenditure plan that included expansions to our Waskom plant, the construction of a new sulfuric acid plant and the construction of new tankage at various terminals along the Gulf Coast. As with our peers, we experienced a highly inflationary environment that resulted in cost overruns and delayed construction times across virtually every project. Despite these factors, the economics on these projects continue to be favorable and we look forward to the completion of the remaining projects over the next few months. With the first phase of the Waskom plant expansion expected to be complete in March, and the second phase coming online in the second quarter, we expect to begin to fully realize the benefits of the 100 MMcfd expansion by the end of the second quarter of 2007. In addition, we now expect our sulfuric acid plant in Plainview, Texas to come online in May, further creating visibility for near-term distribution growth. Longer term, we remain optimistic that our diversified operations will continue to provide unique opportunities for growth through strategic acquisitions and internal projects.”

Investors’ Conference Call

     An investor’s conference call to review the fourth quarter and year end results will be held on Tuesday, March 6, 2007, 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 March 6, 2007 through 11:59 p.m. Central Time on March 13, 2007. The access codes for the conference call and the audio replay are as follows: Account No. 286; Conference ID No. 233314. The audio replay of the conference call will also be archived on the Company’s website atwww.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 NGL 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 atwww.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 in 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 Statements of Operations), plus depreciation and amortization and amortization of deferred debt issue costs (as reported in its Consolidated Statements of Cash Flows), plus distributions from unconsolidated entities (as described below), plus the Partnership’s interest in cash of unconsolidated entities (as described below), less equity in earnings of unconsolidated entities (as reported in its Consolidated Statements of Operations), less non-cash mark-to-market on derivatives (as reported in its Consolidated 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 Statements of Cash Flows), plus debt prepayment premium (as reported in its Consolidated Statements of Operations), plus other (as described below).

     MMLP’sdistributions from unconsolidated entitiesis calculated as distributions from unconsolidated entities (as reported in its Consolidated Statements of Cash Flows), plus return of investments from unconsolidated entities (as reported in its Consolidated Statements of Cash Flows), plus distributions in-kind from equity investments (as reported in its Consolidated Statements of Cash Flows). For the year ended December 31, 2006, MMLP’s distributions from unconsolidated entities, return of investments from unconsolidated entities and distributions in-kind from equity investments were $0.5, $0.4 and $8.3 million, respectively.

     MMLP’sPartnership’s interest in cash of unconsolidated entitiesis equivalent to the Partnership’s interest in cash of the unconsolidated equity method investees (as reported on page 94 of MMLP’s Annual Report on Form 10-K filed on March 5, 2007).

     MMLP’scapital expendituresinclude both expansion and maintenance capital expenditures and are calculated as payments for property, plant and equipment (as reported in its Consolidated Statements of Cash Flows), plus acquisitions, net of cash acquired (as reported in its Consolidated Statements of Cash Flows). For the year ended December 31, 2006, payments for property, plant and equipment and acquisitions, net of cash acquired, were $66.4 and $24.3 million, respectively. For the year ended December 31, 2006, total capital expenditures were $90.7 million, including expansion capital expenditures of $78.3 million and maintenance capital expenditures of $12.4 million (as reported on page 47 of MMLP’s Annual Report on Form 10-K filed on March 5, 2007). Maintenance capital expenditures as presented in the distributable cash flow table below excludes $4.7 million in hurricane-related maintenance capital expenditures (as reported on page 66 of MMLP’s Annual Report on Form 10-K filed on March 5, 2007).

     MMLP’sotherincludes proceeds from the sale of idle equipment, unit-based compensation (as reported in its Consolidated Statements of Changes in Capital), and (gain) loss on disposition or sale of property, plant and equipment (as reported in it Consolidated Statements of Cash Flows).

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 BALANCE SHEETS

	December 31,
	2006			2005
	(Dollars in thousands)
Assets
Cash	$	3,675		$	6,465
Accounts and other receivables, less allowance for doubtful accounts of $394 and $140		56,712			72,162
Product exchange receivables		7,076			2,141
Inventories		33,019			33,909
Due from affiliates		1,330			1,475
Other current assets		2,041			1,420
Total current assets		103,853			117,572
Property, plant, and equipment, at cost		323,967			235,218
Accumulated depreciation		(76,122	)		(59,505	)
Property, plant and equipment, net		247,845			175,713
Goodwill		27,600			27,600
Investment in unconsolidated entities		70,651			59,879
Other assets, net		7,512			8,280
	$	457,461		$	389,044
Liabilities and Capital
Current installments of long-term debt	$	74		$	9,104
Trade and other accounts payable		53,450			67,387
Product exchange payables		14,737			9,624
Due to affiliates		10,474			3,492
Income taxes payable		86			6,345
Other accrued liabilities		3,876			3,617
Total current liabilities		82,697			99,569
Long-term debt		174,021			192,200
Other long-term obligations		2,218			1,710
Total liabilities		258,936			293,479
Partners’ capital		198,403			95,565
Accumulated other comprehensive income		122			—
Total partners’ capital		198,525			95,565
Commitments and contingencies
	$	457,461		$	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 Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 5, 2007.

MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS

	Year Ended December 31,
	2006			2005			2004
	(Dollars in thousands, except per unit
	amounts)
Revenues:
Terminalling and storage	$	24,182		$	23,081		$	17,919
Marine transportation		47,835			35,451			34,780
Product sales:
Natural gas services		389,735			301,676			203,427
Sulfur		61,271			36,784			—
Fertilizer		41,326			31,634			29,780
Terminalling and storage		12,035			9,817			8,238
		504,367			379,911			241,445
Total revenues		576,384			438,443			294,144
Costs and expenses:
Cost of products sold:
Natural gas services		374,218			291,109			197,859
Sulfur		38,898			25,657			—
Fertilizer		36,267			26,975			25,342
Terminalling and storage		9,787			8,079			6,775
		459,170			351,820			229,976
Expenses:
Operating expenses		65,387			46,888			34,475
Selling, general and administrative		10,977			8,133			6,198
Depreciation and amortization		17,597			12,642			8,766
Total costs and expenses		553,131			419,483			279,415
Other operating income		3,356			—			—
Operating income		26,609			18,960			14,729
Other income (expense):
Equity in earnings of unconsolidated entities		8,547			1,591			912
Interest expense		(12,466	)		(6,909	)		(3,326	)
Debt prepayment premium		(1,160	)		—			—
Other, net		713			238			11
Total other income (expense)		(4,366	)		(5,080	)		(2,403	)
Net income	$	22,243		$	13,880		$	12,326
General partner’s interest in net income	$	1,001		$	278		$	247
Limited partners’ interest in net income	$	21,242		$	13,602		$	12,079
Net income per limited partner unit — basic and diluted	$	1.69		$	1.58		$	1.45
Weighted average limited partner units — basic		12,602,000			8,583,634			8,349,551
Weighted average limited partner units — diluted		12,604,425			8,583,634			8,349,551

These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in MMLP’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 5, 2007.

MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED STATEMENTS OF CHANGES IN CAPITAL
For the years ended December 31, 2006, 2005 and 2004

	Partners' Capital														Accumulated
	Limited Partners											General			Comprehensive
	Common					Subordinated						Partner			Income
	Units		Amount			Units			Amount			Amount			Amount		Total
	(Dollars in thousands)
Balances — December 31, 2003		2,900,000	$	47,914			4,253,362		$	(1,996	)	$	(26	)		—	$	45,892
Net income		—		5,923			—			6,156			247			—		12,326
Follow-on public offering		1,322,500		34,016			—			—			—			—		34,016
General partner contribution		—		—			—			—			754			—		754
Cash distributions ($2.10 per unit)		—		(8,173	)		—			(8,932	)		(349	)		—		(17,454	)
Balances — December 31, 2004		4,222,500		79,680			4,253,362			(4,772	)		626			—		75,534
Net income		—		6,756			—			6,846			278			—		13,880
Units issued in connection with Prism Gas acquisition		756,480		24,616			—			—			—			—		24,616
Conversion of subordinated units to common units		850,672		(1,599	)		(850,672	)		1,599			—			—		—
General partner contribution		—		—			—			—			502			—		502
Cash distributions ($2.19 per unit)		—		(9,247	)		—			(9,315	)		(405	)		—		(18,967	)
Balances — December 31, 2005		5,829,652		100,206			3,402,690			(5,642	)		1,001			—		95,565
Net income		—		16,030			—			5,212			1,001			—		22,243
Follow-on public offering		3,450,000		95,272			—			—			—			—		95,272
Issuance of common units		470,484		15,000			—			—			—			—		15,000
General partner contribution		—		—			—			—			2,358			—		2,358
Conversion of subordinated units to common units		850,672		(2,495	)		(850,672	)		2,495			—			—		—
Unit-based compensation		3,000		24			—			—			—			—		24
Cash distributions ($2.44 per unit)		—		(22,650	)		—			(8,302	)		(1,107	)		—		(32,059	)
Commodity hedging gains reclassified to earnings		—		—			—			—			—			2		2
Adjustment in fair value of derivatives		—		—			—			—			—			120		120
Balances — December 31, 2006		10,603,808	$	201,387			2,552,018		$	(6,237	)	$	3,253		$	122	$	198,525

These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in MMLP’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 5, 2007.

MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Dollars in thousands)

	Year Ended December 31,
	2006			2005
	(Dollars in thousands)
Net income	$	22,243		$	13,880
Changes in fair values of commodity cash flow hedges		370			—
Commodity hedging gains reclassified to earnings		2			—
Changes in fair value of interest rate cash flow hedges		(250	)		—
Comprehensive income	$	22,365		$	13,880

These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in MMLP’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 5, 2007.

MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS

	Year Ended December 31,
	2006			2005			2004
	(Dollars in thousands)
Cash flows from operating activities:
Net income	$	22,243		$	13,880		$	12,326
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		17,597			12,642			8,766
Amortization of deferred debt issue costs		1,040			600			886
(Gain) loss on disposition or sale of property, plant, and equipment		(231	)		(37	)		48
(Gain) loss on involuntary conversion of property, plant, and equipment		(3,125	)		—			—
Equity in earnings of unconsolidated entities		(8,547	)		(1,591	)		(912	)
Distributions from unconsolidated entities		541			231			—
Distribution in-kind from equity investments		8,311			1,115			—
Non-cash mark-to-market on derivatives		(389	)		(555	)		—
Other		24			—			—
Change in current assets and liabilities, excluding effects of acquisitions and dispositions:
Accounts and other receivables		13,763			(10,565	)		(16,499	)
Product exchange receivables		(4,935	)		(1,974	)		1,733
Inventories		890			(4,474	)		(3,502	)
Due from affiliates		145			417			(1,730	)
Other current assets		115			36			32
Trade and other accounts payable		(13,937	)		27,669			9,171
Product exchange payables		5,113			(8,238	)		1,859
Due to affiliates		6,982			3,063			(131	)
Other accrued liabilities		(5,912	)		(496	)		765
Change in other non-current assets and liabilities, net		(371	)		611			—
Net cash provided by operating activities		39,317			32,334			12,812
Cash flows from investing activities:
Payments for property, plant, and equipment		(66,352	)		(24,814	)		(5,182	)
Acquisitions, net of cash acquired		(24,306	)		(114,167	)		(31,234	)
Proceeds from sale of property, plant, and equipment		1,825			95			114
Insurance proceeds from involuntary conversion of property, plant and equipment		4,812			—			—
Return of investments from unconsolidated entities		433			466			1,980
Investments in unconsolidated entities		(11,510	)		(322	)		—
Net cash used in investing activities		(95,098	)		(138,742	)		(34,322	)
Cash flows from financing activities:
Payments of long-term debt		(163,010	)		(134,091	)		(43,215	)
Net proceeds from follow on public offering		95,272			—			34,016
General partner contribution		2,358			502			754
Proceeds from long-term debt		135,801			250,900			49,215
Payments of debt issuance costs		(371	)		(3,655	)		(892	)
Cash distributions paid		(32,059	)		(18,967	)		(17,454	)
Proceeds from issuance of common units		15,000			15,000			—
Net cash provided by financing activities		52,991			109,689			22,424
Net increase (decrease) in cash		(2,790	)		3,281			914
Cash at beginning of period		6,465			3,184			2,270
Cash at end of period	$	3,675		$	6,465		$	3,184
Non-cash:
Financed portion of non-compete agreement	$	—		$	690		$	398
Common units issued for acquisitions	$	—		$	9,616		$	—

These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in MMLP’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 5, 2007.

MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS

	4thQuarter			4th Quarter
	2006			2005
Revenues:
Terminalling and storage	$	6,671		$	6,223
Marine transportation		14,665			8,817
Product sales:
Natural gas services		101,536			102,189
Sulfur		14,542			19,041
Fertilizer		7,974			5,654
Terminalling and storage		3,617			2,703
		127,669			129,587
Total revenues		149,005			144,627
Costs and expenses:
Cost of products sold:
Natural gas services		95,979			98,922
Sulfur		8,230			13,627
Fertilizer		6,622			5,020
Terminalling and storage		2,921			2,110
		113,752			119,679
Expenses:
Operating expenses		19,636			14,110
Selling, general and administrative		3,176			2,713
Depreciation and amortization		4,813			3,970
Total costs and expenses		141,377			140,472
Other operating income (loss)		2,503			—
Operating income		10,131			4,155
Other income (expense):
Equity in earnings of unconsolidated entities		1,105			1,369
Interest expense		(3,241	)		(3,075	)
Debt prepayment premium		—			—
Other, net		383			111
Total other income (expense)		(1,753	)		(1,595	)
Net income	$	8,380		$	2,560
General partner’s interest in net income	$	299		$	51
Limited partners’ interest in net income	$	8,079		$	2,509
Net income per limited partner unit — basic and diluted	$	.63		$	.28
Weighted average limited partner units		12,741,596			8,903,438

These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in MMLP’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 5, 2007.

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

	Year Ended
	December 31,
	2006
Net income	$	22,243
Adjustments to reconcile net income to distributable cash flow:
Depreciation and amortization		17,597
Amortization of deferred debt issue costs		1,040
Distributions from unconsolidated entities (1)		9,285
Partnership’s interest in cash of unconsolidated entities		767
Equity in earnings of unconsolidated entities		(8,547	)
Non-cash mark-to-market on derivatives		(389	)
Maintenance capital expenditures (2)		(7,732	)
Gain on involuntary conversion of property, plant and equipment		(3,125	)
Debt prepayment premium		1,160
Other (3)		(159	)
Distributable cash flow	$	32,140

Footnotes:

	Year Ended
	December 31, 2006
(1) Distributions from unconsolidated entities:
Distributions from unconsolidated entities	$	541
Return of investments from unconsolidated entities		433
Distributions in-kind from equity investments		8,311
Distributions from unconsolidated entities	$	9,285
(2) Maintenance capital expenditures:
Payments for property, plant and equipment	$	(66,352	)
Acquisitions, net of cash acquired		(24,306	)
Capital expenditures		(90,658	)
Expansion capital expenditures		78,267
Hurricane-related maintenance capital expenditures		4,659
Maintenance capital expenditures	$	(7,732	)
(3) Other includes proceeds from sale of idle equipment, unit-based compensation and (gain) loss on disposition or sale of property, plant and equipment.