MMLP - Earnings call transcript Q4 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 Fourth Quarter 2019 Earnings Conference Call Webcast. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-question session. [Operator Instructions]

today’s being that advised be conference recorded. is Please hand over Director to would Finance now speaker conference to like Taylor, I your the today, Investor Relations. and of Sharon ma’am. ahead, Please go

Sharon Taylor

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

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

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

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

turn to Martin. Mr. call will the Ruben I now over

Ruben Martin

Good Sharon. Thank you, morning.

we in a annually, As release you unit. to unit per -- reset our our distribution distribution issued quarterly which saw unit yesterday quarter per to press $X.XX equates of $X.XX

reducing the sheet announced on number a balance goals and executed at we and the last XX strengthening have months, Over of strategic increasing aimed leverage coverage.

objectives ensure toward we our in taking want need Therefore, to we meet these are distant not we so we where to step to have targets, future. the While made are progress not this be. we

times. calculated the that not unless a is once have our X.X four is will times we is distribution, leverage our four simply that the increase. as below consider leverage with where it as resetting to an remained distribution we coverage quite also exceeds distribution above our times, implemented Further, the policy, long addition In states increase

Looking this the we expect year. currently maintain at guidance, to distribution quarterly our the at throughout XXXX level

optimizing profitability are assets customers. we employees safe company, enhance and current our reliable dedicated to a provide As to operations for our our and

We discipline that to to have and to our capital as value efficiencies unitholders ways Beaumont we opportunities maximize provide and focus ensure Harbor such facilities. capitalize our to the Terminals will continue seek and those on to on out Island ability at

will over Bondurant Bob I and to now quarter So fourth to you. discuss turn it XXXX results. our Thank

Bob Bondurant

Actual adjusted to like performance, million, our compared forecast I’d $XX.X million. fourth discuss adjusted EBITDA our of exceeded forecast by which Ruben. Thanks, or to adjusted million Okay. EBITDA quarter was XX.X%. our $X.X $XX.X

segments. Sulfur exceeded our in We Natural and our Gas guidance two Liquids segment areas, Services

in in We and Terminalling had Transportation are segment. slight very our our Storage a flat segment and miss

in exceeded Our sulfur two forecast business between lines group Sulfur Services by million. segment by out business it segment, $X.X $X.X fertilizer exceeded our by and million forecast our breaking exceeded million, forecast this our pure $X.X

to was South to this the our flow very because years excess of prices demand In corn farmers quarter the in ammonium to corn due was and and primarily The cotton. relative are thiosulfate forecast South previous group strength planted in thiosulfate or in planting sales primarily ammonium fertilizer less have strength fourth in Texas cotton due more cash in Texas. strong

areas and more As commodity. business, usage other fertilizer is Texas believe in many corn our could foreshadow the plantings forecast. know, corn should which country, of of of as you the fertilizer any our other corn than planted driver support acres South agricultural strong significant We products of our a corn planting of requires XXXX production

received of loss claim quarter our as forecast result we our business, in a as loader sulfur pure proceeds casualty insurance of a ship the May. exceeded interruption On our from fourth result side business of which our occurred

in proceeds interruption business our additional proceeds receive XXXX and early included also these guidance. XXXX will in are We

is back As operations ship and complete prilling of ship Beaumont at our loading loader online. operational the yesterday, are new

volumes operations West result experience refineries, stock Additionally, Area at sulfur a production prilling refineries. they levels. than Bay exceeded more XXXX, of the operating be normal our our from Coast downtime Port now forecast which at Stockton support in These throughout but and increased appear of to Sulfur California operations normal as

as segment, our Now of margins forecasted. Logistics better propane moving distribution by Also to exceeded our a business. in Liquids million, $X.X forecast our than business Natural Gas we Butane exceeded forecast wholesale primarily result

-- Our of Because collapse, in flow of XXXX, cash which This first seasonal when fourth in in the million adjusted protected price excuse year’s first our locked business. differential the quarter and our had negatively approximately as anomaly of EBITDA fourth fourth to season. and we we Butane hedged Logistics of quarter quarter historical and last were quarter normal we XXXX, quarter. our more of XXXX for butane the affected quarter of much experience inventory year, fourth the were as $X.X going into me, business and the compared selling last hedging this this price aggressive year’s energy book XXX%

profits, protect position any result experience year’s market felt of energy a of it million against averaged our than our as of we important but repeat $X.X quarter, As possibility book higher a last the in of opportunity price, prices market cost collapse. approximately to butane was a hedged very locking did an fourth in our we

guidance we In our Transportation by segment, $XXX,XXX. missed

as and inland result our almost Our a Marine guidance improvement continuing a exceeded XXX% by in of day $XXX,XXX, rate. utilization average Transportation segment

EBITDA fourth million. to fourth quarter attributable $X.X Transportation our guidance to of was of refineries area compared the achieved the to during we forecast forecast. compared we a from miss again Beaumont In our sulfur production as primarily This business, Land by reduced missed when quarter, adjusted $XXX,XXX, million $X.X in

a Although, quarter, customers not we compared in when production did third sulfur much refinery fourth was increase to anticipated. the see our as from the it quarter, as X%

line believe from will fourth our of customers with compared refinery we However, January XXXX. the to XXXX in increase we have throughout which in an in sulfur what is happen seen XX% when production quarter,

for our originally than forecasted our from of Now EBITDA acquisition This EBITDA acquired The $XX.X January $XX.X XXXX. which Land which million business, production due Transportation of had which in primarily was annual year, was EBITDA sulfur occurred the reduce miss customers, refinery to X, our economics, the less our we million. for XXXX, forecasted year. throughout

and XX%. count Our XXXX, overall extended down compared throughout X% daily production sulfur XXXX, was to in because truckload year. service was from due was This we turnarounds primarily the refineries downtime to down

levels with However, Land our refinery sulfur believe which XXXX, our customers, more business. based on benefit production conversations to returned we normal in will our will Transportation

segment million which quarter is on right $XX.X the in Services had Our of EBITDA fourth almost Terminalling adjusted forecast.

XXXX that with over release capital to discuss to to like our said, begin So I’d turn sheet, and call our balance resources yesterday. guidance the Sharon

Sharon Taylor

of is million a Thanks, of of from finance partnership debt reduction third related for Bob. $X sheet amortized million funded XXXX, lease funded debt long-term the of reflected million the million, of outstanding $XXX premium. $XXX December issuance $XX XX, debt costs to net balance debt obligations of million an On which and was issuance short-term unamortized Actual the debt plus total quarter. $XXX

EBITDA our for in facility credit in a to $XXX times, $XXX had total under million X.XX adjusted million. ratio XX, fourth our leverage XXXX, quarter. was compared the million the debt ended We From to liquidity quarter available X.X facility, $XXX third resulting calculated credit revolving under times December our of perspective, outstanding as

or reminder, hedged is adjustments volumes working which the a certain out As to seasonal forward a if debt from debt capital builds total our supplement, been have attributed ratio with inventory our excludes carve directly shown NGL sold.

was At covenant. December debt to calculated build debt from December which All-in-all, in total XXst, with all XXst, compliance accordingly the full inventory that $XX the calculation. excluded million, related partnership on was the was

our during the totaled fourth Moving to approximately $X.X quarter million. capital capital spending, growth

million in Neches the $X.X to ship at loader addition related replacement Now that was facility. to the

placed the mentioned was in sulfur for ship with service ahead was new schedule prilled of and release, the the first targeted in slightly February As Xst. shipment loader press commissioned

As expenditures the quarter this million, majority of total was $XX are by capital be approximately XXXX anticipated million. in spent first to million be $XX XXXX. $X.X funded property loader an in insurance $X new the update, our ship to for remaining still Of The proceeds. with the be will of the spent total

of related million in ship total with fourth ‘XX remaining the we the quarter for we $X.X quarter in the of the the proceeds to received As a timing in loader, received proceeds to insurance first property XXXX, XXXX. of the $X million of

for quarter the $XX.X Distributable quarter. for This coverage million cash to totaled approximately million. $X.X and equates of flow times X.XX CapEx the maintenance includes

total coverage X.XX of For distributable total a year $XX.X XXXX, unit of the for cash million was full times. flow

also be detailed mmlp.com. press by our by to on to release flow website XXXX and our attached guidance, and segments which financial presentation yesterday capital spending The can quarter. guidance, Turning provides the was our XXXX at found cash

of SG&A adjusted is $XXX.X We of number for full approximately $XX XXXX contracts. unallocated are of million forecasting fee-based and approximately attributable the that to million XX% after EBITDA year

Within and base footprint. as and Martin its to we geographical continues its strong customer Greece segment, our Terminalling year Lubricants our Storage another expand have to expect both business

our scheduled lower open up a at new In the will Coast we Houston will second to to costs. in locations, Arizona benefit Phoenix, free XXXX, facility both of and from West Kansas service quarter we capacity This are customers. facility distribution and City our

that This that in Storage to, Now segment, have reduction a renegotiation contract also and for Smackover as recovery adjustments suspended the CPI fees in as Terminalling is within XXXX, are and the rolling to XXXX off as refinery. we capital spoken related is the there as EBITDA well XXXX.

season. our as Services, harvest reflective planting Sulfur and is guidance to a fertilizer Moving normalized

outlook business. cannot mentioned, which to remains we our USDA planted supportive While for as in the and acres predict both fertilizer prices the is corn corn weather, XXXX Bob strong,

quarter for well insurance in of interruption for ship related that $X as Sulfur to is the includes the first Services receipts also segment Neches Guidance million business cash loader. proceeds and the

the decreased fleet Turning XXXX, and to ATB out renewed XXXX, contract our a reduced which and Marine norms, guidance inland has the to which on the XX, compared both load historical for remains Land reflects occurred December and in January. offshore our Marine sulfur returning unit related hauling count our Bob MTI, business when Transportation, strong, utilization to our XXXX while to at business, guidance for rate, XXXX pointed rates Transport on as in for mileage

Natural a the And of reflects propane typical guidance segment businesses. and Gas Liquids view winter spread summer finally, for a butane baseline the

to XXXX, EBITDA million, results from adjusted XXXX assets, EBITDA $XXX.X was effective our XXXX. year increase of outlook, million storage which full we $XXX.X related X.X million. approximately forecasted actual full natural XX, excludes have or for June as an XXXX our continuing gas year sold which to operations our were XXXX, adjusted $XX million, Comparing In

XX% over XXXX, which estimated capital to year $XX the for be on in be I to in majority new for And Phoenix, capital new earlier, on quarter Of forecasting million $X.X plant. the be $XX by the approximately proceeds replacement the we be the $XX maintenance we our related insurance ship million million, quarter. approximately with and costs be expenditures for to loader, to will anticipate Greece Moving growth will are CapEx received as spoke expenditures spent spent first first to the million. offset the property to

first XXXX. being refinancing of February returned Finally, absent senior success enthusiasm month during of we the companies after our in XXXX. energy the the of notes have quarter last investor addressing the to is are encouraging of XXXX, The debt markets as recent of in in that seems mature

announced, the that distribution of following balance the cash delever sheet will our cut with the retained feel successful was coupled also the given efforts results have a that offering. flow to we We

do state our X.XX%. notes the the current given to new higher interest rate we for senior debt the our expect than markets, However, of be

outstanding amount issued amount the to We notes to the today. of the be to also intend similar

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

Operator

our first question with One. Instructions] your proceed Kyle from with question. May [Operator And Please Capital comes

Kyle May

Hi. Good morning.

Ruben Martin

morning. Good

Kyle May

wants cut, leverage Martin distribution improve X to coverage the you So below the ratio with times a X.X indicated and times. ratio above that

reach the you how wondering you Just And these then, do Martin think about first, when could between improving metrics? balance goals? think secondly, these two

Sharon Taylor

of repeat the I first sorry. am you question, part Kyle, Could your

Kyle May

No Sure. problem.

whole the repeat So I just thing. will

leverage above ratio and below X.X. you about improving talked X So ratio the coverage the times

improving thinking reach goals? we are And as and guess, think do ratio these between coverage? Martin the balancing when how the improving do you you So will think secondly, two about, I balance these then, about metrics, between leverage

Sharon Taylor

-- we I all, So, see to substantially numbers, coverage ratio first of times going above XXXX will you start X.X be when times. the is that at X.X looking our above think,

assets second leverage on we stable with we own ratio forecast quarter So around are When focused out at XXXX, that the occurs of still after flow, first just we and getting X below the the a our look today ‘XX, times. so that cash current and

Bob Bondurant

I No increase guess? rate, in flow cash

Sharon Taylor

Correct.

Ruben Martin

distributable roughly say $XX DCF our this, million the roughly $XX on distribution to going million. from be coverage, will of of I -- it’s And cash

So roughly ballpark? times year X covered next

Kyle May

it. Got Okay.

can more kind detail are That’s in Good. you seeing the Transportation And of very know the business. businesses of guess, go into one Marine helpful. maybe on the little bit you a touched -- those offshore Can Okay. two on and things, I the XXXX? hey, between between, inshore what you mix a and I

Ruben Martin

Yeah.

the offshore So and this roughly and adjustments business the this will see you flow here. number the With rough contract about $X million year about inland. our our I inland be will numbers, give offshore had, be, will $XXX,XXX cash balance me roughly the was let of

Sharon Taylor

$X. About

Ruben Martin

About $X.X after unallocated that’s of SG&A million million. and $X

million unallocated -- $X.X the -- is SG&A. So applying of the the full $X you numbers had

inland a business offshore. on about it’s as and on plus $XXX,XXX So $XX unit,

million unallocated $XX then $XX down $XX to million, the SG&A And get there’s million of million. roughly to or it $X

So It the inland Marine flow XXXX from works We offshore from the the for about Partner. that’s company, the our a balances private that of General roughly just the the have third comes And is one breakup. our in private unit. cash company. M business the

Kyle May

you. Got That’s it. That’s Thank all Okay. helpful. me. for

Sharon Taylor

Kyle. you, Thank

Operator

Thank you. T.J. [Operator Please question. Capital. proceed comes your Instructions] Schultz And RBC our question next with from with

T.J. Schultz

from guidance need changes XXXX fully of in something the to we assumptions is does MMLP to would that Great. for that and that consider? distributions between on MRMC MRMC Thanks. make offset the $XXX contracts or In million, EBITDA any lower impact

Sharon Taylor

XX%. are any associated MRMCs -- to percentage into DCF. about as with MMLPs EBITDA we occur distribution we MRMC MRMC EBITDA loaded are changes that percent expect we with already this of the when approximately guidance, in to as looking contract That’s of well XXXX or be cut, Right at talked now,

T.J. Schultz

Got it.

some plan and out there? least is Okay. Carlyle Port At there Beaumont latest know crude Corpus, the of kind Island I the still what’s and at from fizzled Aransas. or for Harbor port pushback

So Beaumont is meaningful Thanks. likely more something at update just there?

Ruben Martin

last two I Yeah. and week the and more Ruben. is This have week. over next now meetings had scheduled between have

are We facility. visiting that

all got of numbers. the have We

But and some have Beaumont lot now. I a different Beaumont Corpus there mainly different now talking -- right interest relative we and about got for interest interest had course in and am We we a products. of had of have facilities consistent to have some doing

but what what on do to can and relative cheaper port VLCC. cost single some to crews come of West it’s lately. basically point So, yeah, interest expensive we have tough had to longer think the can pipeline if can is at with long-term a to contracts, term we things lot the of to originally with had people we to the dedicated a I interest contracts difficult we lowering Texas we do, it XX-feet It’s because the get some the longer with very look across lot -- have up, in now dredge get the loosening do

we that’s working. are So why

So it’s still going.

JV at had time falling point a diverted talking it that some kind of I back are kind think is us. they People now in lot of of that distracted the apart. that Carlyle and calling the

T.J. Schultz

Okay. Make sense.

enter any the consider so liquidity on asset more are the private to are here may cut here? get sales that done lastly in measures recent you refinancing, capital on distribution just your to the and Just as the markets whether other have results view that enough process there or that you debt thoughts debt

Sharon Taylor

Yeah.

while should to we markets been be right would that kickoff. complete what quarter. access we will allow that this a public the debt I end As of We are the process process call for the with before believe actually looking now and have us the in first the of what we have we at little now, beginning

sales some the smaller additional needle are still much, sales, sales, And service to of or still any be that our before not we asset time asset and we of those we have we spoken piece that so outside might that some on, have non-core about business have in at every assets smaller moving asset Again, but there. this out refinery either are won’t helps. concentrated

Ruben Martin

the if it if there done but we any, think I we just But the is, what now. we with any that is asset we don’t decide did have that have answer to will yes, get sales do move we to can too answer And question up. to, timeline did,

T.J. Schultz

Got it. Thanks, sense. Make everyone.

Operator

Thank you. [Operator from comes Please Seaport Instructions] your question. proceed Global And question Sibal our with next Sunil with Securities.

Sunil Sibal

that on X.XX questions understanding that Couple of the that and as did secure up where of leverage Hi. year morning, My this end Yeah. of on you is metrics? limit sheet. far balance revolver confirm have then that. you concerned, guys. Good the the end is you Can as a at on

Sharon Taylor

X.XX. Yes. X.XX senior That the We the at were secured the leverage end at year. was of

Sunil Sibal

this at in potential kind lessen Okay. unsecured, some the that to is prohibits margin of when of secured, something you of to margin terms the new you refinancing are say that. or of senior which in there using Then you in have that using bound that to the something related by the from side like the unsecured secured or looking that is burden on this of market kind buyback

Sharon Taylor

there for be as the to We note last us $XXX amount moving which is to around I of is as to substantially needed. part similar where looking million. we you would And are preclude today, are spoke to nothing from your the that question,

Sunil Sibal

we the QX. I are so terms on mentioned into about think quarter? Okay. going Thanks more the but that the sulfur for you much you And the margins pretty in should was fourth butane that then Is first margin quarter, hedged done for wondering of know pretty your for that. margins how or that I has

Ruben Martin

very the in performance position Based inventory significantly going quarter about our hedged first quarter. cost to hedges, we the butane upon our potential as We and it. feel were a possibly business there is comfortable Yes. exceed into

Sunil Sibal

one as has as then I been MMRC is you coming What MMLP for And historically between to? was number Okay. that. what us contracts and me, about last you from that, XX% Could that in mentioned the XXXX. remind EBITDA MMRC think, far of closer

Ruben Martin

It’s very or points. plus similar, percentage few minus a

Sunil Sibal

Okay. I That’s Thanks, Got had. guys. it. all

Sharon Taylor

Thank you.

Operator

And further this any will Bondurant questions turn not any time. call Bob to further I for I the you. at am remark. Thank now showing

Bob Bondurant

more opportunity Okay. coverage as continued and and than times I the well take to on the Thank morning. we will targets. call X want Leverage listening everyone once business, greater thanks same. you, And times. our discipline to of our to the below emphasize toward X.X targets those Sydney. to this remain capital emphasis that efficient progress management make Through

management’s Midstream In our priorities the two, value on identifying unitholders, and in improving for employees, interest to addition Martin and provide to top XXXX partners three, positioning you Partners. include, company investment balance to future. one, and your our the sheet the delivering guidance, opportunities business for Thank

Operator

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

You may now disconnect.

Sharon Taylor	Director, Finance and Investor Relations
Ruben Martin	President and CEO
Bob Bondurant	Chief Financial Officer
Danny Cavin	Director, FP&A
David Cannon	Director, Financial Reporting
Kyle May	Capital One
T.J. Schultz	RBC Capital
Sunil Sibal	Seaport Global Securities

Martin Midstream Partners (MMLP) 29 Jan 202019 Q4 Earnings call transcript