MMLP - Earnings call transcript Q3 2020 | Martin Midstream Partners L.P.

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Operator

Thank you for standing by. And welcome to the Third Quarter 2020 Earnings Conference Call and Webcast. At this time, all participants are in a listen-only mode. Please be advised that today's conference is being recorded. I would now like to hand the conference over to speaker today, Mr. Officer. Financial Chief Bondurant, Bob Thank you, sir. Please go ahead.

Bob Bondurant

Paulie. you, And good everyone. morning, Thank

call devastating with David Finance Relations. today a Cannon, On Tauscher, Ruben and a on head Martin, collision daughter and comfort as for Danny Chief person Charlie, Investor we had in President their over past have not Sharon Officer. reporting. Financial sharing. personal to us and the significant and for was of Appropriately, joining missing peace Kevin, Director numerous week. of with today she mother One the healing will has Charlie has few the Also Tyler, and on and Sharon Sharon daughter, Director is us a currently Analysis, Planning Operating who last today situation is who CEO; days. support Financial her surgeries Randy for Director is Please of be being call pray

with comments, of on impact our COVID-XX, defined performance regarding started Such including but future based by materially are get as assumptions Martin, we factors could to and that statements related the the outcomes facts the statements of you before I'll management current impact be forward-looking be partnership the Now SEC. making may the could remind actual judgments the different.

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

measures GAAP those their today's Investor today. section non-GAAP on regarding in a call release measures non-GAAP to Please to to the will We measures. earnings call corresponding non-GAAP of financial historical including website measures, find of and Relations this press financial reconciliation the refer discuss referenced posted financial in our information table our

quarter. our discuss the in let's Now third performance

we be As our as quarter was around guidance COVID-XX. guidance the third to comparing not call, second will by case third segment pulled due earnings to previously our uncertainty quarter the performance quarter we quarterly our with

of range for EBITDA adjusted given have $XX guidance XXXX. million million we However, $XXX

the to EBITDA have XXXX, quarters three realized million half compared million three $XX.X the XXXX. of first adjusted For of we for of $XX.X quarters

the third for our our the XXXX. Now $XX.X adjusted $XX quarter for quarter, third is weakest million seasonally of quarter, compared million EBITDA always to was which

some of guidance, adjusted year's the spite performance of exceeded compare our activity fourth internal by impact third third on hurricane for segment The quarter. XXXX $XX.X refinery provide the to also Gulf utilization. Coast now quarter's would million outlook continued EBITDA in I of nonpublic to our limited quarter frequent and COVID-XX last like quarter third in performance negative and

our largest million Our $XX.X Terminalling $XX.X compared adjusted storage and to a was as ago. third the segment in was year million cash provider EBITDA flow quarter

segment by the of business. driven flow The fee base cash flow for better the our in cash package the portion While marginally majority was performance improved year-over-year. of quarter primarily was increase our third Terminalling lubricant

quarter experienced and third was our last, year costs. due less slightly production this to volume lower supply better Although margins to compared we

seasonal decline flow the be anticipated and customer of lubricants, between season quarter Now our in fourth toward which quarter, Thanksgiving primarily Terminalling believe New looking will due the we package less slower occurs overall demand Year. our than third during cash sales to the

$X.X a fell its had the million. cash segment, to year-over-year third occurred of was year Transportation this flow million of cash $X.X marine in decline business The to the flow as our adjusted third compared our in $X.X a million. contributor million for ago, largest second transportation quarter which $X.X of majority Our EBITDA quarter decline

refinery result had is which year, by Boma this has the continued also lesser refineries COVID-XX. impacted and was the XX% Our year. refineries. a significant area Charles of utilization impact fell impacted in Lake third land including extent, to marine reduce quarter utilization, this year to by activity decline a quarter XX% ago, a in third been of utilization hurricane from which hurricane the direct negatively in and Beta, Refinery area Laura to This

Our ago, due which of in hurricane load impact significantly the down early year to our September. count lowered primarily transportation million August Coast Gulf a compared to was Truck daily activity, $X.X and late

looking marine fourth the quarter. towards quarter, Now utilization will similar third believe to we remain transportation the

count also hurricane refineries truck our in While we a and average the disruption customers. demand fourth from in from believe should of result as wholesale daily butane have load transportation no should increase an propane quarter. increase We

largest million flow $X.X $X.X million our was services of year had EBITDA third cash the contributor Now ago. a adjusted to compared Sulfur segment, which

was occurred flow in this cash loader May due out loss, to $X.X of ship cash had This quarter last flow services side be a windstorm sulfur million is of sulfur year's $X.X to than pure our weaker the in casualty million segment a service Sulfur year, Last year's normal. third of Our normal. compared causing XXXX, ago. of third quarter adjusted EBITDA which year to business

our had business $X.X Fertilizer year downtime the third plant flow compared to to cash million due Our quarter a third this year. longer last turnarounds $X.X had annual to compared of quarter, million We ago. in year

cash our Plainview result, and year flow this Neches were a a were levels significantly causing negative ago, than a they production quarter. impact at As less of

the fertilizer the our able fertilizer for anticipation first quarter. However, to products we all producing annual be of fourth demand And quarter facilities in maximize have products. production been should in

refinery moving cash accounting of flow of the segment, year quarter, in our increase quarter. $X.X to a third adjusted year a from significant to of Now customers increase million million year, the this ago, we September butane to relative in for our In compared services saw Natural in ago. this some a gas $X.X our EBITDA demand

portion and we flow of fourth we will sell business. inventory in quarter, our cash significant this toward a looking anticipate for Now performance anticipated the storage, butane currently realize

inventory currently butane volume thirds hedged. Our is two

the tender exchange, offer XXXX and cash liquidity. like was August in for of I'd notes, recent XXth. of I'll bond our the a discuss begin recap sheet our which Now exchange to balance effective on settlement the with

thus XX% extended February, discuss was will maturities to of work and closing, $XXX less with million notes leverage million indenture further the the minimal modification the related they while accounted de-leveraging covenants, notes to leverage required non the revolving in so total of GAAP. senior coverage leverage, for was the balance a a XXXX the expensing incurred $X.X total our our extend I of with total of $XXX have X.XXx. interest due from Under XXXX plan flex reducing that the our a facility adjust and us than ratio as we The through our new as a to leverage which costs down offer can holders partnership to the ratio transaction our our target XXXX is lender to making moment. majority to cash of of US reduce after debt greater of loss amount. notes under under the the restructuring. an obligation With by of the we the transaction related flow of recognize ratio. free senior in excess partnership leverage at principal to credit debt all indenture million any XXX% primarily maturities, than And allowed outstanding commitments annual debt XXXX the The use The note

offer. upon any of to obligation no the this is there accept holders However, note

primarily $XX on funded inventory our and term both installments was September from attributed current $XXX million is to XXth, long with balance build and reflected million of of of June This an Now associated sheet XX optimization butane the approximately the debt. approximately partnerships increase business.

this capital earlier, current mentioned and the mature the tranche our and notes February. new unsecured facility includes proceeds and installment when relates February XXXX lease will February unhindered senior exchange, remaining also were of amount the million $XX balance revolving line not XXXX of debt our includes revolving during to funded I notes XXXX remaining with of The notes in balance due and current from As recent XXXX. senior the approximately totals the the that the be credit credit due notes in tendered obligations. Long-term

$XXX XXXX due secured notional And senior X.X $XX sheet is in in, notional funded facility XXXX million before amount quarter due revolving lien shown million. unamortized was was Reconciling our debt amount million. debt senior of of of as balance this secured debt was of The notes $XX lien the our $XXX our issuance funded in was cost notes million. $XXX outstanding actual credit million. second Our amount

in reduced Our of capital letters compliant facility. quarter carve credit available for amount carved the hedged of a directly inventory has partnership in of of million out, finally, out $XX was either secured senior liquidity the full to leverage the ratio our leverage total At million X.Xx million working is from debt respectively. X.XXx September assigned had NGL million quarter covenants Accordingly, we $XX.X quarter and and X.XXx the And was seasonal Capitalized ratios by outstanding inventory. million based expansion leverage all calculation. were XXth, with approximately revolving which bank was credit and total on compliance On all the was current to capital. $XXX XXth, debt with this of end, attributed our spinning included our forward sold the debt total at $XX.X $X total coverage interest September or on partnership end. build

new CapEx Amount one revenue the amount occur construction the was in for Switching in generating which the first in $X.X recoveries ship-loader we million approximately complete. $X anticipate tank expansion This the we the received XXXX; regarding $XX.X Grease development terminal. And replacement we later quarter. storage will terminal, to and million the are entire to completing we insurance $X addition, of of was With inspection anticipate quarter, expenditure our in the X. And the agreement the CapEx, related Tampa load the $XX.X proceeds million. million plant, spent to Phoenix spending quarter, and in we numbers. and balance next facility to new expansion is offset December million, final million. $XX several net no to XXXX, at begin majority to new over our million $X the native have total plant with $XX $X.X allocated respect update the tank for In a year-to-date weeks. In received million of during spent quarter project. and from expansion third on by received underutilized not the million waiting ship an third in related Phoenix guidance maintenance included respect the total With a capital approximately range remain was spent in the are than Grease to to of on and the CapEx of Tampa the the approval all,

we to remain balance for in to from Coast estimating of hurricanes, the total the Gulf million the million a of cover spend recent our the to of spend $XX and XXXX For cost $X $XX approximately range XXXX, maintenance total million. we expect repairs are incurred CapEx of

for million cash quarter $X.X Now of $X.X million. and excess of the free distributed the partnership had cash flow flow

for notes consideration be the For buy spans free the September flow date, To measurement used XXXX, excess through million starting to period back approximately XXXX as cash December. from can month January in of XXXX. $X.X of

adjusted will to I quarter million. we Q&A. giving will favorable concludes Polly will fourth prepared the space, the felt turn continued million regarding performance previously for economies, our this $XXX performance in XXXX; the allow range. fall our With range EBITDA comfortable our call This quarter, annual by to that volatility EBITDA to back the the of within morning. Finally remarks guidance we for adjusted specifically provided an the from energy for within continue $XX for with the annual now

Operator

J comes question Schultz T from Your of [Operator with first RBC Capital. the Instructions] line

TJSchultz

Hey, thanks. Good morning.

MLP? you that so rates the cut to order distribution? dividend, that structure. MLP would past support MRMC? what what's to think on the in smack What's it its I now dividends in could over the impact potentially. or MLP change And And part and between contract flow MLP quantify Or may impact MRMC to resulted need capital be the the you. first, at cash relied to expectation the MLP could maybe if Thank with MRMCs terms just in the if I to support know

BobBondurant

reflected been -- Yes, cut back was adjustments further and at has contract been that then time. in anticipate contract there we that no the our had April, guidance. And when this in were adjustments distribution

TJSchultz

you're Okay. transport, think marine pointing utilization then Appreciate being similar, And that. I I And in then XQ there's to levels. some understand to hurricane XQ on impact XQ.

land for your in of kind of utilization it to I'm on weather what mind takes looking outside impacts. an kind just So improve in marine there for

may If help refinery you come can to what speak Thanks. back bit. and business there utilization that see a

BobBondurant

ahead, Sure. I'm question. Randy to of to protect going ask kind that Randy. Go

RandyTauscher

to And the its this by Sure. in XXs. even back refinery the that And of were XX% up to utilization COVID. past XX%. good Charles. and This decent pretty Like and the marine low drop And to refinery We July and again, had and in rates in XX%. very way Charles driven the in is back really the example, August, summer them we and even worked were the Randy. to as all kind that monsoon a hurricane September, drop up did down utilization XXs the Yes, happened, on had here Lake we starting year, pretty week, hit late after for saw in just past today, rain the even still damage this on see refinery with utilization in up under August, utilization high coming

dirty existent. not for market, is particular holding the, there's of little the as the demand asphalt toe utilization low, it's somebody market. a or what spot refinery well toes, anything to But is from which say in we gasoline needs day lot call X,XXX market, off diesel, year the I'm a was it's believe non off the still better, bucks In hauling that toes So sure it so. any is bit and barges, what well long much I as utilization clean heated but as call early if in it for like of going that not where looks and that a

harder marine put to refineries really today. and turn utilization before race need up the start pick we are they for we the we picking up to to So up pick to need utilization than on

us when to that's running is improve we harder. So tied really when to for going begin on finally estimate any

Operator

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

SelmanAkyol

you, quick me. Thank a for couple ones

talk all, your Obviously, can you've little two hedged and to XQ. little if guess as got first about season? of maybe which bit expectations bit you a not maybe a of thoughts XQ in expect And So you year. then other maybe blending talk why just what the you portion sort I about relative the for just thirds, I already have well. last could butane know between

BobBondurant

Yes, Randy. go ahead,

RandyTauscher

business; So butane the on that correct. is

but working X, we quickly hedged next third just be more we're and through and week We volumes are ahead, thirds. enter significant will as October November selling the October which Q in significantly is so than two we're

the As October, so head the in thirds. move two volumes our greater be much will than position out

how depending it And quarter, thirds hedged; it's way Relative have And to ends ahead fourth we of in the at we to hedge As that the value we But of best they're of going. But we think sales get interest butane upside to and the business, be has of generally year. similarly two to be downside third ability could November upon last our very first quarter, over in we months, last still the won't X, I year, the more the that in about sits will time. up we winter XXX% have kind significantly up we think feel us. about if get this point. that said about change we'll still to our the generally time. the that value especially like that's program worked in year, when

SelmanAkyol

just what And talk in next thinking Appreciate about But you're little that. for year? year then in maybe understand CapEx terms terms in and also of you're you bit where of this coming can expansion. seeing a about

BobBondurant

ahead. go Randy,

RandyTauscher

or or? You asking maintenance about growth

SelmanAkyol

capital. expansion about thinking was I really, Well,

RandyTauscher

capital. Expansion

our year, to this $XX So was range $XX I million million. believe

right we'd year, not we over the beginning course we make what the some of investments we thought we the you -- and know, see amount comes the on we had of making think less in would was for even the probably year right at some year For I marketplace. spent don't for we year, right being and have the going were the the but this next arose. XXXX, as a course next in in slightly scenario opportunities greater It we not would in for it we that don't CapEx year, ended the doing XXXX. of planning had XXXX. up a that And such up investments what what year, CapEx we scenario beginning weren't I we're of because up the that than be year, of ended over that I than planning ended of we because thought where now, the Tampa we been other we now, now. what happening making, more tank planning in that see work

SelmanAkyol

Got understood if of obligation to and bondholders in know it. cash they have correctly. And I have say, XX% you have take right the I to ask the bonds. then of to try redeem yes, it if no you those But some you

is this just cash question on my and this isn't you build then the presuming So to balance have sheet. goal

BobBondurant

we a the will is cash will revolving down company, line -- we Well, pay generating credit. of by

time, So put reduction that's over the where actual you see debt cash. the absolute we'll will because

Operator

further back Bondurant conference this And audio at time, there no the Mr. for remarks. are turn closing over questions. to Bob We'll

Bob Bondurant

Thanks Overall, and pleased EBITDA our internal exchange forecast, we certainly to our performance our bond we third Paulie. glad us. adjusted relative quarter with were have behind

regarding I'm vision our company. of January of and for as to beginning term year. I'm very confidence partnership near Now, lay I out my about the release, morning's new my next of excited would CEO grateful like press the X the for this Board role

in do new the five, cash the creating entire cost commercial partnership we need to also make must more identify conscious again foremost, become must Number the or of growth existing Number returned of XX X.XXx partnership current of will cost our relationships finally, improve And our leverage current can to we delivering opportunities, existing to X.Xx current execute multiples around on target be cap expected throughout number on returns value we we our which of believe debt to investors. through current strong we flows, with do peer I capital. And above on base one, in our months, MLP on and next coupled can multiple the our continue valuation organization. our our and growing equity have that? we price. our less. consistent If equity grow go. we X.Xx, MMO three, to four, more with relationships. leverage to through we absolute significantly must risk plan, we or our for asset more reduction. fundamental price. increase valuation we First in and attractive in I based our unit the we our group, provide trades to low be utilization organic can line XX enterprise having two, deliver which execute Number to How this path our equity believe unit commercial can must reflected expanding Number holders small delever

the I let Now, over Ruben And for finally, his mentorship thank to I know leadership last publicly know years. and friendship to last over to comments? him years. value And share how want of development role. want like our business through I XX partnership closing as continue Board. to your to Chairman any I our you would Ruben, bring appreciate you his the much partnership XX will the

Ruben Martin

being he's for great excited today. ownership Board as will significant I MMLP of leadership kind least I I MRMC be want thought existing planning in Executive MMLP. call our MMLP's Bob, MML for Well, recently M those President strategic choice his success. completed the into and say have future. I business Bob is on that over time bond everyone I'm Anything I'm completely vision think in sets to leadership light future. MLP Officer guiding which and transition for future this be say and for words, just the was Chairman to picture, Chief for very just the This thank to can everyone the and else the remain thank lead exchange I'm of this interest the as turning a as up our not the since to means Bob, challenging given important for also to a to MMLP I right will you, Bob? that I we With MMLP. and thank development financial but involved

Bob Bondurant

this concludes Paulie, Thank call. No. you. our

Operator

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

Presenters, moment. please one You may now hold disconnect.

Bob Bondurant	Chief Financial Officer
Ruben Martin	President and CEO
Randy Tauscher	Chief Operating Officer
T J Schultz	RBC Capital Markets
Selman Akyol	Stifel, Nicolaus & Company, Inc

Martin Midstream Partners (MMLP) 22 Oct 202020 Q3 Earnings call transcript