MMLP - Earnings call transcript Q3 2019 | Martin Midstream Partners L.P.

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Martin Midstream Partners LP Third Quarter 2019 Earnings Conference Call and Webcast. [Operator Instructions].

I would now like to hand the conference over to your speaker today, Sharon Taylor, Director of Finance and Investor Relations. Please go ahead.

Sharon Taylor

Thank you, Sarah. welcome third Martin quarter and call Partners everyone, discuss to XXXX morning, to Midstream the conference Good results. Director Financial In President the Reporting. Danny Chief of and Martin, and Cavin, Officer; Chief Executive Cannon, room Officer; Bob Financial is Director of FP&A; Ruben David Bondurant,

of forward-looking statements the get we performance are different. could the our judgments regarding making based that outcomes remind defined could by future management may you on that Before as that the factors be impact I'll be started, actual statements Martin, SEC. Such current materially

discussed the our form You factors Martin's should review risk opinions own with and future and other SEC information in the performance. about filings your

on website measures referenced We reconciliation the posted corresponding refer call. financial in Please table to of Relations non-GAAP call press today's will GAAP financial to of section find measures. release discuss Investor measures the our today's their to in non-GAAP in the our earnings

now turn call Bob over to I'll the Bondurant.

Robert Bondurant

like third to to EBITDA Thanks, relation Sharon. discuss performance. in which I quarter is seasonally quarter our would weakest our performance,

For we adjusted $XX had EBITDA $XX.X to guidance compared of million quarter, adjusted million. the of third

Transportation segments During by our Terminalling Liquids strength the weakness guidance, in relative Natural segment. Gas in quarter, experienced and Services to we and our Sulfur offset

volumes by been exceeded million by for segment, forecast of quarter grease base. expanding as Our this Terminalling and a Storage our segment margins million. $X.X sales $X.X as and both exceeded forecast and forecast business In the we third customer our lubricant result exceeding packaged have

our primarily operating of forecast was Terminalling refinery, million exceeded expenses. of which reduced forecast our lubricant result our operations Also, at a $X.X

in the is time to be products third lower there than be these new the business quarter remains seasonality volumes quarter during the Looking likely toward the however, be packaged Thanksgiving lubricant same, quarter grease fourth the between primarily for as sales to and during and most anticipated demand will slows due as this EBITDA reduced Guidance year. quarter. fourth

due unanticipated Our sales business in an in demand to butane $X.X forecast as expectations exceeded liquids customers gas by million increase September. butane our natural primarily were above from

business, fourth toward quarter primarily the Looking fourth had quarter. in driven our decreased guidance anticipated by we pricing in our the butane

strong butane demand of our NGLs Belvieu in should as the significant not Although customers, of originally Mont at expected have pricing to oversupply portion costs. we above amount our of We increase from the our refinery market. hedged a significant inventory pricing anticipate as do forecasted due in continued the inventory be carrying

greater business in what earnings we we than the quarter experienced fourth significantly be our So believe in will XXXX. this of

Services business Sulfur and side of missed million of Our in business the the million, $X.X was fertilizer was our $X.X pure balance guidance in our sulfur which business. by

quarter. a preparations. was Our planning result of a begin spring the missed fall rains U.S. the heavy field until preparation fourth in to sometimes year's forecast in due fertilizer there result early chain third business harvest, field crop this farmers activity This reduced this fall sales late late The quarter impact has this which as events crop of resulted of farmers the was of summer. delay in due and to

be to information, Looking we costs, crop Also, which this and material ammonia, improve year there raw a and pricing benefiting decline should business. so see forward, to shortfall costs. increasing sulfur margins demand fertilizer fertilizer on current we in we improve hardest based continue our including year a due anticipate reduced next our believe fertilizer these will input

multiple maintenance. forecast $X.X the business, of Beaumont side unplanned turnarounds refineries million, area driven sulfur from was our pure the missed sulfur reduced primarily to by On at production due and

anticipate in from volumes beginning sulfur occurred November. sulfur reduced full of last to sulfur and fourth ship in down cash the the additional quarter. from interruption second the which quarter temporarily early our when interruption quarter, compared the million which XX% result, Beaumont loss, handled XX% quarter guidance. payments in during realized We The be $X casualty year. of should business is the third the Beaumont will May, installment Sulfur next anticipate in area area has loader production receive a down insurance in Services payment in As the we year's refineries flow. first first quarter reflected installment We was We third business

on We guidance Now $X.X segment. our by Transportation missed million.

rate which as positive million. $XXX,XXX missed by this continues $X.X than guidance exceeded Land strong. Transportation business was by Transportation day guidance business, remain to processing utilization Marine offsetting Our in performance More our

our Gulf $X due quarter to pure downtime the occurred XXXX. negatively sulfur maintenance, increased Land our guidance, When count to sulfur count, similar primarily Coast business, overall third of lowered has quarter truck has compared missed from This quarter. sulfur turnarounds business impacted result flow load -- truck refinery the overall third to our Although to and Transportation from by as reduced unplanned has the forecast refineries which this a load cash excuse of as count me. Coast Gulf third million when in our truck production our compared

factors, transportation from has Also our customers demand softened. due for to chemical truck larger the macroeconomic

a As Land maintenance also by million. guidance because result continuing this projects lowered October, of Transportation due we and of refinery $X.X have

overall towards performance. guidance this our in lower partnership, at looking spite anticipated we're fourth the quarter Now of

X.Xx be approximately to coverage the to for $XX.X million EBITDA approximate and quarter. distribution fourth expect We

call turn sales. sheet, discuss and balance I Now asset resources the would recent to our back capital like to over Sharon to

Sharon Taylor

million total obligations Thanks, long-term of debt. of balance million for Bob. of related XXXX, million debt $XXX XX, $XXX debt partnership's the funded finance plus short-term of On sheet September a $X reflected to lease

premium unamortized sheet million. is funded $XXX of actual funded outstanding issuance debt debt was costs issuance debt as shown balance net and long-term unamortized Our

liquidity $XXX Of that, $XXX $XXX we had facility million. under resulting credit our of outstanding million available million in total revolving

decrease from June is our defined bank ratios, indebtedness respectively, on secured slight in were as adjusted leverage X.XXx, Our and to a total ratio EBITDA, to indebtedness senior and XX. EBITDA compliant leverage total adjusted X.XXx which X.XXx

our ratio from adjustments working carve-out calculation. with inventory our attributed seasonal certain NGL defined total agreement. reminder, If capital debt-to-EBITDA the our This are from shown our sold hedged. excludes debt a sublimit forward volumes or build to provision in the is credit total directly As debt

the when related total debt XX, was excluded our build from debt-to-EBITDA ratio. to calculating debt accordingly, $XX.X calculated inventory which, our September was million, At

Finally, all EBITDA our with bank compliant expense interest ratio coverage defined to September X.XXx. interest on full was by consolidated in the as Meaning, partnership adjusted compliance was covenants. XX,

our East August Texas. Kilgore borrowing used Proceeds divest the announced noncore sale The initiatives this sold of sheet balance delever Texas credit to NGL to of XXX-mile million to assets, announced strategic $XX.X reduce from pipeline the were Belmont XX, as revolving to and Texas our for from position under On facility. pipeline. running partnership pipeline we The opportunity. sale was growth part the the of

through adjusted our mmlp.com. guidance, pricing. NGL in butane our and quarter lowering XXXX XXXX a Full guidance on to outlook. for our lower uplift to which year reduced fourth our found in $XX.X revised website actual and believe attached has Moving million, to inventories fourth was to which includes our we the segment. revised be $XXX.X approximately million QX 'XX at can QX been Revisions release press and In higher will related EBITDA Transportation results NGL segment, result yesterday of the to to seasonal quarter include

cash quarter in a and expect to portion However, of our business. optimization of significant inventory our fourth we the flow hedged have as positive $X.X Bob said, approximately million butane related do

will turnarounds the itself online Though back truck In our assets as we hauls. segment, maintenance refinery resulted sulfur due are in mid-November. online Transportation resolve were guidance extended mid-October tank to issue that this to Transportation lowered third-party refineries and have utilize certain or scheduled that be in unplanned by lower Land

spending. capital to Moving

XXXX at $X.X quarter, the I'm recall Our we construction at related the you'll of Neches growth loader the include year capital sure capital revised expenditures totaled during end quarter costs the third facility. to second full new the our ship to million. growth approximately of

anticipated At we and new the Total million $X those first new damaged in XXXX the spent loader ship total of have to visibility related approximately capital to proceeds for million loader be construction remaining expenditures CapEx of quarter timing by should million. ship proceeds. total insurance Of funded this the The to will the $XX this insurance XXXX. $XX the claim. with and property spent the $X of property for costs approximately in of are time, the be better the majority be million,

coverage fourth And quarter of $X.X received quarter as proceeds proceeds the the timing to the million and in related the received expect to we insurance quarter, lowest approximately as of in due what a for Distributable property $X.X ship remaining of XXXX. maintenance our be X.XXx $X.X first Bob should million. and CapEx to million in totaled million in loader, $X.X third receive another the the quarter of includes typically, cash the to is earlier, This businesses. equates mentioned our to flow coverage seasonality the quarter

our average contributing coverage as And be X an capital previous years to the is quarter $X.X expenditures of comparison for For X.XXx purposes, third X-year lower to fourth our a maintenance will compared the X.XXx of of or reported. X.Xx average XXXX, quarter approximately of million coverage approximately estimated X.Xx.

the the prepared to will now Sarah Q&A from call This concludes I back remarks this for turn morning. session. our

Operator

[Operator Instructions].

Kyle first the Capital question Our May comes of with line from One.

Kyle May

out could I this business. through business, Martin was acquired the start we asset, this if When guidance you some with trucking wondering provided XXXX.

the preliminary can now or update of you you've business for you're few been any Just about that a wondering, quarters? if kind give operating thinking us how

Robert Bondurant

sulfur XXXX have be our this all $XX it We but $XX.X Anyway, that the We're be really that numerous bit these Well, at back EBITDA the above our could year to next half to this when year the might be sulfur be both be. business, would of of fundamental more pathway been load year. related, We to of low somewhere the normal. any fundamentally and turnarounds been million the IMO was mid-XXs has part period-over-period. have has improve. we in we first anticipate turnarounds, don't to will roughly approximately . extra of difference lower seems a count kind The bought anticipation million knowledge production the And significantly if little going that year.

in to continue leases. the we're out lease CapEx. these buy been growth that's to expenses, And going reduce as So dollar CapEx, classified growth low we'd

probably we that's production the a Fundamentally, may 'XX as anything normal would We cash really hit flows. runway chemical to and be be of we And near back in see in improvement So continued the but comes not swing do as sulfur much 'XX item on hauling. them. economic-driven. targets, will the

country better. might however, would the it recession, if instead be So strengthens to that if go it would've into be sulfur,

feel as forecasted. originally much our growth It just we about good be flow. still not years in generally may trend as cash out in So the quite of those

Kyle May

helpful. very then switching That's over. it. Got And

butane the So and have year. this struggled businesses fertilizer

not or expectations whether Just will next these of on kind these kind if preliminary you could of have any just on early Or turn curious how together? around thoughts year? come

Robert Bondurant

Number believe, as this going it's is production mentioned corn be, I under what harvest this, it's was way -- one, originally two, Well, the expected. to late. we number

that up. will be probably plant So crop most increased drive will which likely because want to means will farmers values prices,

had all you X so with And things flooding. these

going fundamental away. plants nutrients to most acreage number You're number think corn. in -- all planted And likely were increased we washed demand that flooding, two, acreage with have of this

So crops, in got addition nutrients. their planting to to lost they supplement for

believe that next strong to demand's be we year. So going

Now that weren't they moving from and be keep there year inventories that the -- is north. offset this may that larger far of too prices could consumed

to down. in our we all demand values crude butane in. we on capability. we oil of much costs at We prices, kicking export relative north costs, Production And because up, no are did supply And real oil. there's prices this in fundamentally is crop butane lack the down there's thought not and the think to been which And -- the the pricing as -- relative crude that as has Belvieu because the move issue help. input been feel been prices butane is export. since have on temp, area the going We season business, in We did is of has our to -- excess we as think price help. laid business low that's sulfur then historically ammonia

know coming new Enterprise export facility. is And do -- of new in we running However, facility I now QX up next I believe year. believe and Targa on their a has

going this strongly much So profitable recently we we Again, be just help this as hedged, we're think of all excess year. because for that forecasted in will business, not supply. next to

Operator

Instructions]. [Operator

Selman of Akyol question next the line Our comes from Stifel. with

Selman Akyol

I lowered the Did outlook? waivers waivers to Just guys starting guess, you do you off, the given quarter? get this any on sheet. next quarter anticipate Or get balance having any

Sharon Taylor

beyond. not anticipate get needing and into quarter And or to we this have our on our not do in go-forward based and XXXX any did forecast We quarter. No. waivers those fourth guidance

Selman Akyol

Okay. you where maybe of about quarter? compared utilized thought a I the might they And utilization the talk were originally to bit guess back then little you Transportation. where during be Can assets sort they just of to at?

Robert Bondurant

about talking or Trucking Marine? you Are

Selman Akyol

Trucking. Yes. Trucking.

Robert Bondurant

Yes. On trucking.

our -- day. So count was daily for load average about load loads the a count XXX

is count about truck Our XXX-ish.

now have a of truck So breakdowns supply certain cetera. we excess et and always percentage for

time. are -- be we that revenue good are at did or be roughly loads XXX-plus divided sulfur a a of XXX it's one loads -- profitable lot with raw the could about sulfur talking per that area, That utilization. And XXX by if you at improve So of would you but almost, short, whole math, a and rough very The this XXX. a any mile picture our will coming online. loads and could say,

Selman Akyol

Helpful.

referenced other that you're the quarter. at? sale, competing one asset there assets You in the noncore looking anymore Are

Sharon Taylor

a nothing noncore being move far needle going minor that to few as considered, There's have as the assets. We still are opportunities leverage. that's small

Selman Akyol

how Got you the that into or point lastly, spreads you. And can -- you assumptions what about quarter? your talk you But just to is of for then originally I maybe of going number butane, expect kind on guidance of or And the barrels understand. in trying recovered get fourth to either much hasn't Maybe quarter? sales pricing just to in anticipated. your move terms the just

Robert Bondurant

of go up/down that whatever. dependent lot that you It's I'll start November. moving it based starts we in, or October. in is a a in pricing basically that And purchases we say In the the back those purchases make. moving the not And kicks it. really summer are on lot really time, upon it's hedged. then barrels out It big you -- in

next totally or by of -- basically of will your you've we all about inventory year. So moved March

vapor based you all that gasoline refineries. in it's move much the of production through And pressure because so upon the same and And inventory. pretty every year allowables

happen. handle. and very back it's on pretty move can of certain by total it's So about the up to system when things consistent. When of refineries, it's amount really it's that going storage, and pickup, consistent It's those But it It's depended truck not things. pricing the more all deliveries kinds truck comes restricted through or that down. our the to really

to kicked the up, usual. are so as And and back be to right in of volumes kind back business now have things it seems

Ruben Martin

in XX% And to Probably I say, typically. difference there's And our will in of QX, probably XX% inventory into be carrying roughly the season. XX% XX% QX. to is the sold

Operator

I concludes question-and-answer call to remarks. back to This the for today's Bob Bondurant closing session. over would like turn now

Robert Bondurant

today thanks Sarah, in who Transportation we performance stronger our to look to as joined Thanks, the Goodbye. butane business. call and everyone and fertilizers, forward

Ruben Martin

you. Thank

Sharon Taylor

you. Thank

Operator

Thank gentlemen, conference call. and for concludes Ladies this today's you participating.

disconnect. now may You

Martin Midstream Partners (MMLP) 24 Oct 192019 Q3 Earnings call transcript