MMLP - Earnings call transcript Q1 2018 | Martin Midstream Partners L.P.

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Operator

Good morning, ladies and gentlemen, and welcome to the Martin Midstream Partners First Quarter 2018 Earnings Conference Call. At this time all participants are in a listen-only mode. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the conference over to your host, Mr. Bob Bondurant, Chief Financial Officer. begin. may you Sir,

Bob Bondurant

Southard, Bridgette. today, let our we Head and Finance you, Commercial on VP know the and Scott Relations; Investor call have of VP And Thank of everyone Development. to who's of our Okay. Joe McCreery,

holders. before get during financial and started relating to may forward-looking our of cash use depreciation, this financial results, users first principles conference current reported we comparisons meaningful for interest, operational our We disclaimer. prior measure provides this EBITDA; and to meanings believe the forecasts, the EBITDA. because adjusted financial unit to performance distributions future and or meaningful statements tax, with distributable and can information need SEC accounting the non-GAAP of results G, distributions. call I report make with earnings financial Certain ability such we results a amortization, results accepted also make the to Regulation use accordance our pay Before certain in of it measures it quarter, financial within between to as and we with and these We statements be generally measures, and made be cash available partnership's use flow;

our EBITDA to guidance the We a reconciliation GAAP issued quarterly adjusted measure. cash in release also of included distributable yesterday, most press and EBITDA, adjusted flow EBITDA, financial comparable

our release website, at is press available Our earnings martinmidstream.com.

compared the discuss first to our I our compared would discuss also and Now, fourth quarter quarter quarter to first to like our performance performance guidance.

to $XX.X adjusted EBITDA quarter had $XX.X million of first compared fourth quarter, million, the we For in the XXXX. of

coverage quarter the for was quarterly provided million, flow a X.XXx. $XX.X cash distributable of which first Our distribution

are the For of quarter, million. $XX.X our to guidance EBITDA $XX.X million, favorably adjusted compared first

fourth our I the discuss would Natural our first segment, In discuss guidance first to quarter. operating like fourth million, from was $XX.X first fourth the for compared was EBITDA and performance adjusted EBITDA from West our operating to in million in quarter, segment, quarter distributions our in compared quarter performance million our in $X.X Included first against segment LPG Texas LPG quarter. West quarter. the compared Texas to adjusted in the Gas the million to Now $X.X Services compared quarter distributions by $XX.X in

portion our Now segment natural for decrease was logistics the flow from butane quarters significant our of cash gas between services the primarily business. in

winds into part During the demand refineries end first pool. for selling March butane first their of season gasoline blending down quarter, as the our their toward for

fell quarter. late in sales quarter quarter between demand XX% third business through the September. the inventory and before fourth result, the and butane second first significantly began is butane a to As Currently, beginning our rebuild again

This primarily volumes compared as by area our exceeded million. January in was guidance, gas result stronger cold Now our segment in $X.X weather service originally of first of forecast were market forecast experienced wholesale margins that our a our to natural our provided quarter than forecasted. improvement propane business extremely

million EBITDA increase cost as our quarter terminals million. XXXX. we in Storage an the due Moving $XX.X specialty to $X.X first to in compared performance fourth our $XX.X to group quarter, quarter had The the large and of million, fourth adjusted primarily hurricane segment, improved of increase repair experienced our Terminalling was is in

have the guidance, first million quarter guidance as $X.X to $XX.X compared of adjusted and missed our forecasted terminalling EBITDA. we Now million storage by segment

second the to our packaged our weak were was count our large sales and million the volume guidance by terminals from at While volume believe improve We expenses, rig $X.X below shore-based we refinery of lubricant by in also we continues reduced offshore $X.X distributor our to from forecast. forecast lubricant in as business. Mexico million be $X.X due volume volume shore-based business to exceeded and distributors Gulf lubricant terminal packaged our our be may Sales missed [indiscernible] our continue while to shore-based challenged at quarter million lubricant operating relative business diesel in terminal below quarter. guidance throughput will prior

an adjusted increase improved million our $X.X $X.X Now reducing relative million. with the fixed to between to our was sulfur in pure EBITDA quarter, of gulf our in fertilizer continue business EBITDA we structure $X.X segment, million compared based the to cost quarter rig terminal million services quarters shore in and count EBITDA business first $X.X quarter work while fourth in business. has April also at our first the our our In decreased adjusted byproduct sulfur adjusted had

suppliers. Our sales due volumes seasonal sales as sulfur our the a Offsetting into quarters. experienced quarter of usual decline as its improvement increased the primarily to move in first pure as our was fertilizer XX% from business sulfur volume between side refinery first this turnaround business decline quarter XX% we anticipated

compared less by first regulatory forecast sulfur vessels we Transportation When flow business to had group million. Marine the guidance. several had This first was forecast EBITDA exceeded adjusted quarter experience segment in variances $X.X helping pure we the fertilizer our $X.X compared quarter, services to docking the our In significant the time the the Transportation beat $X.X of $X.X from segment, dry side million first than in cash We was had to Marine first of expected, quarter by our fourth shipyard guidance. compared in however, our our sulfur duration million guidance, us missed in quarter Now achieved to segment our all million. of [ph] inner as quarter. as guidance, decline no

was was for Our which higher million than slightly the $X.X quarter, guidance. SG&A unallocated

sheet the over our capital to call to Joe discuss Now, I and to would balance spending. like turn

Joe McCreery

Thanks, Bob.

approximately the our bank ratios the start Let's quarter XX, full-year March long then ratios. normal first $XXX planned capital million spending and capital debt from our at sheet, discuss spending with walk-through XXXX, a of On in $XX level. the tying our quarter-end our sheet year the million, balance of the approximately as XXXX our reduction and conformance during of of leveraged partnership's funded it reflected end XXXX total debt balance pertains to term

the funded debt issuance balance sheet debt was to of $XXX facility before Reconciling million $XXX $XXX as revolving million. unsecured million Our actual unamortized on notional our and facility. March debt balance this $XXX $XXX based our was credit senior issuance premiums at amount outstanding revolving total is and liquidity amount on our credit was million available notes funded Thus, shown on quarter-end, our was XX million. amortized

and XXXX, secured total were and quarter the respectively. XX, senior our For bank to March indebtedness X.XXx adjusted leverage indebtedness EBITDA adjusted defined EBITDA X.XXx as ended ratios compliant to

has impact reduced where working During Commencing build by revolver our our quarters begin attributed have $XX forward-sold ratio inventory inventory from capital our our seasonal from to our from on during with sub-limit approximately reduce anticipate leverage EBITDA through partnership inventory million seasonal quarter facility. the carve to out NGL elevated the either continued a exclude sub-limit hedged our the recently-adopted certain will sale debt quarter, debt working our second we of revolving buildup. balances when credit NGL using total second to We third leveraged are meaningful or capital the we'll the ratio. and our will results, the NGL inventory. This

adjusted coverage compliant interest ratio bank consolidated to by X.XXx. as defined expense interest Our EBITDA was

quarter-end unchanged to investment capitalization or December all from the partnership XX, at gas for full total financial in revolving around The increased debt on compliance with covenants, and as amend Looking XX.X% facility natural previously at did partnership not raise XX In this was the first banking total inventory during March all, XX, credit to liquids the did XXXX. Texas West XXXX, highlighted. March was capital in flexibility allow sheet, LPG otherwise. pipeline balance quarter, but the provide

during me the XXXX. rest that on spending capitalized of quarter the and how projects focus Now let for

quarter during First, million forecasted pipeline anticipated million, the of the absence growth by quarter approximately capital million first LPG maintenance spending which are with from timing approximately respect of [ph]. be than XXXX. this less which we believe forecasted capital expansion. expected the $XX $XX first to during million, That in is million million associated Due have refinery with certain February, nearly that be our and the expenditures. on Recall U.S. the project, Texas From at encountered West expenditures quarter, due have this primarily maintenance anticipated spending $XX maintenance difference to will in of total at to guidance to spent that mid-year year to we year required $X attributed second to expansion. and West approximately the Recalling the non-discretionary timing in-line approximately forecast. during quarter. regulatory we level. our is scheduled $XX maintenance growth spending said, of elevated $X cost marine which pipeline the maintenance approximately part Again, million Texas $XX presentation the Smackover to XXXX the early below specific capital our $X approximately on project heavy certain projects, million million full includes Switching guidance, dry spend we $X capital expenditures being expenditures, our the plan. of CapEx In transportation our mandated our is docking with our Coastguard LPG

spend full have quarter originally However, after which spending distributable approximately Currently, ratio. than favorable a we impact look is revised maintenance course second forecasted distribution our would less we million year full complete. to and our capital coverage to the tracking flow cash may year of revise guidance $X on are

forecast capital expect points butane working on the like next quarter our ratio would based this ramp our X.Xx and our to for growth by sub-limit. XX working ahead, concludes prepared seasonal settle spending leverage open to the lines now before question-and-answer. our Bridgette, basis our capital in XX adjustments We capital Looking business, increase to morning. and primarily with will the remarks any we in X.Xx from range up this

Operator

Our line comes Matt Instructions] of with Schmid question the from [Operator first Stephens.

open. is line Your

Matt Schmid

Hey, good morning, guys.

Bob Bondurant

Good Matt. morning,

Joe McCreery

morning. Good

Matt Schmid

how they quarter, to Obviously segment in boost interruptible potential Looking the churn trend to strong. Maybe throughout business to be be I detail get first maybe little throughout the propane continue outperform versus you guidance? your about the a can but the like services that that the about quarter, interruptible natural its continues seem got good and gas year should year. at thoughts should

Bob Bondurant

that million, really very this, for Storage, internal the near Gas our did Cardinal in in forecast slightly term. the I above change at say we quarter Well, first $X.X see we reason. will don't by And any that about just exceed

Louisiana Gas facility, but of was some our So a was that activity Storage North at also activity lot Monroe in as well. there

that So relative guidance upside some we to be there. feel there could

Matt Schmid

Okay, Texas is the LPG there timing And update there resolution? through potentially right on of West pipeline, any great. the moving Thanks. any

Bob Bondurant

through World Examiner. set as XX. That's -- to Examiner back case you Hearing's the remanded Hearing the Examiner Yes, XX Matt. has for The merits today. the hearing it if Hearing Mission schedule recall, know the will September we the The

Matt Schmid

Thank right. you. All Great.

Operator

next is Robert question Riley Balsamo B. Our from with FBR.

Your line is open.

Robert Balsamo

good morning. Hey,

I question, guess just First just housekeeping.

mentioned that potential XXXX you just that a Would to forecast. on pushing? reduction of timing bump is issue the that little now? spend? You a spend maintenance could be up To well Is push that in CapEx, or

Joe McCreery

both, it, of a the to of less Joe. to timing under $X make currently. budget we're It's second that, But the million our are with in as like come projects is into that and looks standpoint to this thing good combination XXXX to for didn't Rob, I schedule some it respect of really. going with mentioned, XXXX. sorts completion some of tracking From projects these

Robert Balsamo

you I expected assets, about or there on and something that know little came East guidance. those about the to that then some guidance a assets towards levels? talked that And change weakness little is any Talk the past, bit Great. in NGL in in is recover continue the a Texas. will below

Bob Bondurant

from Boma very that been under a Boma Texas office runs refinery That muted muting. pipeline and truck [ph] East we near here feed that, [indiscernible] the lodged it and is Yes. volume in into that to our and goes has

However, would that two options have exploring viability potential we positions. Both improve are and our asset. on good

from balance the sheet So now. DCF of side a middle in negotiations and right side, we're and EBITDA on

alternatives improve help our that finding are We position. will

Robert Balsamo

great. lot. All right, Thanks a

Bob Bondurant

bet. You

Operator

Murphy Tom with question And James. the comes our Raymond from of next line

line Your open. is

Tom Murphy

solid then quarter, LPG West me regards million spilling Texas a and on spending, XQ? at the plan can Was capital the to mid-year? be remind congrats into that where was guys. million $X Hey, to With you $XX

Joe McCreery

$XX million the This the Essentially spend of two Yes, first about Tom. to we're is $XX Joe. in quarters. projecting million

Tom Murphy

on is of some And rest into or the that XQ? all Okay. fall should then XQ

Joe McCreery

into smidge that Some the $XX but maybe will to year, we in fall XQ the guided a and is XXXX a the number. next million

Tom Murphy

more Okay, Is great. I there And progress asset sales? on for then one any if could. update the

Bob Bondurant

sales? Asset

Tom Murphy

progress? real Assets

Bob Bondurant

where position progress. worked we would real the in -- we're I sales no say Asset in same the QX.

Tom Murphy

all for me. It's Thank Okay. you.

Bob Bondurant

CapEx do comment one make online West will is comment new coming I still Joe's quarter. us LPG. third for will That the the Texas be to believe in revenue to consistent. We on on add

Scott Southard

third the quarter. in Late

Bob Bondurant

Correct.

Tom Murphy

Thank Okay, got it. you.

Bob Bondurant

bet. You

Operator

question is Janney. next Our with from Mike Gyure

line Your is open.

Mike Gyure

Can maybe through good a the take little bit maybe morning. about business here? the the quarter in -- I the second Hey, and quarter asphalt you're really seeing trend guys you guess in first

Bob Bondurant

Yes. been Big little picture it's slow trends, start. a

activity has on the side. weather impacted think I volume

what involved flow Our are our Louisiana. to the state talking But Tampa where they markets matter the MMLP Louisiana the the Texas volumes, cash company or say summer. in volumes. volume about poise sell talking general markets majority about situation the market. throughput is not and been believe we're And both assets also for of after to so I'm the in the pay of still I take going this, than spend We But has the do contracts, partner Texas growth. but think Florida no our is our really will stronger then that that use back the side is. the up Texas picks and continue we they assets at into all the

form been the in later August-September. that kick state slowness to happen market is allocated Texas and New do the until in about offs increases believe the big going Texas-Louisiana beginning because dollars is of the have not summer. really the significantly We

Joe McCreery

Mike, this Joe. is

to obviously capture a first that in asset for Just growth alluded That to well-positioned just of to. Hondo acquisition we're expansion ago, is add, XXXX. Bob positioned the given about the year that quarter well

Mike Gyure

West debt? or million. Do that's debt Texas anticipate And spend then the guys you to completely be maybe the LPG on primarily Great. of $XX still going with with financed

Joe McCreery

Joe is That correct. is This Yes. again.

allow As covenant banks we the that facility spend, the you quarter, while revolving saw CapEx growth essentially project went a completed. is expanding for and to cushion amended to that in first our period have our for winding, credit five-quarter that we

Mike Gyure

Great. Thanks guys. very much,

Joe McCreery

you. Thank

Operator

question Our Baird. Patrick with from next Wang is

open. Your is line

Patrick Wang

Hey. Good morning, guys.

Just case. back on West LPG rate Texas the

is With consideration? with anything September, has there the a that noteworthy the perspective window the now up effectively from ROC's until other than open come competition

Scott Southard

This some the new include activities that's competition some undertaking for to we that put the continue of There there. is we significant nothing [indiscernible]. are of monitor relevant provided evidence market and of out those additional to the remand Scott. and additional is consideration Recall studies evidence

Patrick Wang

All right. Got it.

expansion date, As change we gotten your closer still around of thinking is around to this project side your that? Has at thinking and another for service economic all?

Bob Bondurant

No, it hasn't.

Just that.

Patrick Wang

me. Okay, got it. Thanks. That's it for

Operator

you. question Akyol Stifel. our is last Thank Selman And with from

open. is line Your

Selman Akyol

Thank you. Good morning.

curious, a level for terms all at for demand the Just come as you of into in season? front, you political are changes any this fertilizer from high seeing

Bob Bondurant

we there's which guidance as nothing of corn gave side. going today we we The from but metric could us slight to up that would a our follow market acreage buy of plan is the move of in number There we're pick impact down that but it's a everybody. impact slightly, that that volume our to overall, that is slightly competition is think significant be don't margins, on areas our in impact one seeing key

Selman Akyol

much. very you Thank Okay.

Bob Bondurant

Okay. comment last That we DCF. have XXXX ahead plan that the on start Once both did we're a was to good EBITDA of as and question.

And project. As Texas complete anticipating your as Joe have support which we at you. Things QX and may to distributable going coverage ratio. look guidance we have our our West to company. growth QX DCF and believe year look we of LPG heavier are and upward to appreciate we good coverage improve Thank potential spending mentioned, forecast CapEx mid the we do

Operator

the gentlemen, program. this does conclude Ladies and

have disconnect. a may You now great day. Everyone

Martin Midstream Partners (MMLP) 26 Apr 182018 Q1 Earnings call transcript