MMLP - Earnings call transcript Q2 2021 | Martin Midstream Partners L.P.

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Operator

Good day and thank you for standing by. Welcome to the MMLP Second Quarter 2021 Earnings Call. [Operator Instructions] Please be advised that today’s conference is being recorded. I would now like to hand the conference over to Sharon Taylor. Please go ahead.

Sharon Taylor

good and operator you, morning everyone. Thank joined Tauscher, Chief am Danny Director by our Bob Randy CEO; Cavin, FP&A. and President of Operating and Bondurant, Controller; I Officer; Cannon, David

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

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

in our to press measures. the reconciliation in historical second today’s non-GAAP discuss segment our financial Investor measures, measures posted non-GAAP of earnings on remarks Relations results. measures to the will financial will quarter to those turn call. in non-GAAP financial referenced regarding table find Please I including our earnings GAAP information Bob? website today’s their call call release for his We the on now, a refer corresponding Bob over of to And

Bob Bondurant

our to performance in $XX.X forecast. also the months, flow we X million, Also on with have free first To would Sharon. $XX I cash pleased between months EBITDA our annual that for with in $XXX free flow to pace X like of begin, of am I with million. XXXX Thanks, million as is first of say our it generated projected adjusted cash line internal

performance quarter second segment. discuss Let’s now business our by

last were discuss which year in quarter Sulfur to compared that segment EBITDA adjusted quarter year’s was the underperformed Transportation very Terminalling, to overall Gas ago in shortly. of segment second Liquids quarter, segment, I to compared will compared a this XXXX. The second the EBITDA in was adjusted our second $XX.X Services year’s quarter. Natural and our The million our one second For $XX.X similar million Services

and flow $X.X specialty though for products largest was to both became there Storage scheduled a our flow down related which within ago. coming to business. Smackover cash This a contributor Even Our adjusted cash of reflect Refinery had capital this flow current contract at January Both this $X.X we the the year million Terminalling supply segment. our variability of same million last the remain quarter pandemic, the tight greases The EBITDA year improvement lubricants market year. and year-over-year, of packaged million Terminalling result, was and and was in Storage some the cash due of segment, as our sales second increasing volumes, and the the a primarily reduction was which compared last the year packaged experienced to $XX.X effective adjustment lubricants to throughput year. have X and which conditions. out rate fees, over this was recovery Offsetting very was

remain We the which positively third tight should the over to market term, near this impact will quarter. believe continue in supply

which contributor ago. flow the was million cash segment, $XX.X EBITDA second largest to adjusted Our year in $X.X a quarter Sulfur compared next million Services had our of

$X.X EBITDA portion had segment the million it very year fertilizer quarter with of second a as of million compared to are Sulfur the We our pleased adjusted in Services $X.X ago.

fertilizer months, of for months X the EBITDA had for period the we $XX the $XX.X first XXXX. which business, For primary of first million million to compared adjusted the X earnings is

the decline we will quarter, third due in fertilizer see the to normal reduced demand. Moving to earnings seasonal

to products. production with seasonal normal coincide work majority demand fertilizer As plant such, rates. fertilizer we our reduced will for our also perform our of maintenance work This the reduces the maintenance

fertilizer our cash to $X.X we flow a the compared in quarter see business. In quarter side segment, second ago. will adjusted million sulfur result, in year million was decrease normal EBITDA the the pure $X.X a our a As in for of third

Our was driven pure our this reduced year our was sulfur second our by compared distribution our of volume volume flow. production sulfur fixed production significant quarter a a significant from the suppliers This carries volume ago. down to the has compared to incremental year impact amount a ago. suppliers to XX% cash Since missing system cost, in from negative

which third should business Looking to flow and in now more pure sulfur sulfur our from seeing are we anticipating to line allow produce with historical quarter, the cash improved volumes norms. our line our suppliers,

our $X.X quarter was million cash there adjusted quarter year’s variability which year’s. flow million business transportation cash year a of when was our largest generator the third had ago. $X for flow performance, this EBITDA comparing second between segment, Our lines Despite consistent last to Transportation to second compared this

mileage year year’s adjusted quarter the Our second to significant in year XX% in quarter. PADD the truck line transportation of driver improvement year’s refinery in in earnings compared business in to recovery X this utilization last ago. last compared a quarter had a was in to The quarter in was the to ago. this million utilization compared XX% this million second year. the XX% quarter pandemic, in refinery main to compared increase EBITDA $X.X experienced We $X.X Due a second the

rates A due rates. a at overall tows second term had compared compared EBITDA pandemic, second spot year, to we primarily inland transportation inland quarter ago. this Our in the In year under million quarter of still term higher contracts our marine year market was at in to Marine reduction the fleet several ago, had reduced in to demand negative ago. the adjusted a $X.X for spite the year Transportation segment $X.X million of

as experience increasing transportation X our to slowly demand for marine increase. However, we PADD beginning utilization are continued services refinery has now to

cash contract. We late the will X one into have also went idle our sitting in had since May see as new tow service offshore transportation improved offshore marine a we flow January under in X-month

EBITDA both the in compared and third the inland Marine we in offshore improvement to side Transportation’s improve business, the quarter second. the of to result a of As adjusted the expect

Finally, our Natural Gas to I would like segment. discuss Liquids

million to $X.X year For adjusted $X.X we quarter, compared a the of second million ago. had EBITDA

cash the seasonally weakest rail reminder, refineries we sales We the in and quarters and quarters. which Gas during second minimal supply, the butane for quarter significant As these concludes quarter. Liquids and third the butane due for performance the quarters in and wholesale second seasonal first a both warm result move our Therefore, demand were second butane using third the in Natural similar operating the to relative we underground to performance are both sell discussion. should continued propane this and are refineries truck accessing then months. lack quarter weather as of quarter transportation. propane, a back as third storage to in our the third inventory to This of flow see stored fourth Also, my

sheet, to So I our capital to over balance the liquidity will and resources. Sharon discuss now turn call

Sharon Taylor

end, million on quarter second million which lien total our long-term At facility; XXXX. secured of notes Bob. revolving $XXX was credit Thanks the due due debt million, $XXX million $XX secured lien outstanding of XXXX; our $XXX of notes X.X drawn consisted of and

XX, leverage X.XXx, respectively. leverage first June and were XXXX, lien adjusted of ratio X.Xx and As our ratios

includes I the quarter total leverage As debt capital build the our supplement, sold forward working seasonal want the to allows that portion from NGL carve-out adjustments us calculation debt are to or attributed the inventory NGL from everyone build, hedged. second debt ratio which to inventory the begins either of exclude if our our remind volumes

quarter of to the Looking carve-out debt as slightly. This back first was leverage debt second forward by adjusted even at leverage volumes $XX results a end the and sales reduction inventory capital of as the from inventory working with positively a carve-out along adjusted to reduction increased the of X.XXx, That increased impacted to $X.X end in quarter, in total increased through X.XXx at the million hedges. million.

to to still cash forward were historically to XX-month as quarter, businesses, seasonality our butane the lowest quarterly fertilizer leverage EBITDA NGL and due is includes by we build Looking earnings anticipate slightly impacted the of COVID-XX. trailing we our inventory, significantly and continue increase which to third that flows

reach significant in a year-over-year forecasted free leverage. However, results on generation through as adjusted to leverage debt goal X.Xx our we reduction reducing cash our flow to continue XXXX year-end focus in of

flow $XX.X for free cash calculated of the million expenditures Reducing of for half the $X that growth $XX.X cash results number quarter X of XXXX. distributable Our first second million year. capital months the million for in for the payments and and flow $X.X XXXX totaled and lease million of the for capital quarter first

capital interest totaled the announced $X.X the ratios, to the due of revolving earnings, the trailer with land growth we Turning be turnaround tightness to Due the million, year, maintenance CapEx credit facility. million for felt Growth And our for continued requirements along to million supplement anticipated elevated conversions significantly $X leverage majority amendment of transportation capital including second $X.X above was forecasted negative the to capital quarter, around Yesterday, at was and prices, forecasted along total $X.X group. prices. rising are approximately with coverage maintenance million address $X.X appropriate for impacts our working in capital the to specifically and in Refinery. third COVID-XX, the as it the million, our totaled maximum capital to expenditures, in Smackover quarter. capital the working commodity we with commodity year, costs related

the million borrowing to commitments $XXX certain while facility still ratios, liquidity. addressing retaining In right-size million from in addition to the to we ample order $XXX reduced

the of our deck million This between remains million, $XX CapEx Our turn on our to the morning. our Page and between call cash operator in the back the now adjusted of press the of an $XX to includes turnaround annual XXXX $XX I growth release. free which to and to will forecast $XX maintenance refinery $X million. concludes same This still $XX and prepared to CapEx, to remarks be $XX EBITDA million outlined on no distributable and million the basis. cash in X changes $XXX to million Q&A. slide guidance flow for with calculates $XX $X million flow expected and million is of is million, for million remains all

Operator

question Instructions] first Akyol your from is Stifel. Thank Selman And you. of [Operator

Selman Akyol

Good you. Thank morning.

Sharon Taylor

Selman. morning, Good

Selman Akyol

was noted higher up Can utilization. you sulfur you maybe you And I little then of refinery you utilization were talk of obviously, thought to which quarter, refinery. your the a have due about function – a supplies said was would transportation at noticed this – down bit

you can talk pieces? maybe So those about just two

Randy Tauscher

Selman. for is Sure. This the question. Randy, Thanks

into in obviously the with it increase well Even of you in deliveries Beaumont, into well the below. in below historical. And was second at second was the year, look – went quarter, utilization refinery the first went then with sulfur, quarter, the of half when even at sulfur, beginning we the the regarding took deliveries it And went and the So through down through sulfur winter storm. the COVID, hurricanes, significantly. – Beaumont declined utilization we

And where Beaumont sulfur good first increased business half just has an July, up sulfur issue so year, overcome. deliveries had that’s X have they Beaumont. in the significantly weeks into from to the the XX% into is the The in of plus were the first news of

the low their in spoken as are XX-ish with but bit. to I in refineries, I’m area, crude surmising their back haven’t content have getting percentile, sulfur them, little So upped they the our a they

the deliveries seen we’ve so And significantly. increase sulfur

good that’s business news forward. sulfur so for And going the

refineries of far As petrochemicals processing of that a lot of the plant. MTI lot by haul of is that’s business. included, lubricant the They out big MTI, for a but as more also driven lubricants things,

seen the is in business. driven have the that by refinery, things So, top of lot where lot strength we that MTI of on a a of

Selman Akyol

in Got how back to think it And pickup that would being into term? months. Transportation, does that recontracted about seeing longer you Marine then X mean you just it. be just idle anticipate do thoughts went Any or a offshore, recontracted? talked for being tow go Thank on and in you’d you. service you’re I

Randy Tauscher

where MXXXX up employed Coast the had We and it to more been of from we moved Northeast. actually it’s years, and ago sitting years moved have So the it last the been couple in the utilized. Gulf been

to with and that ongoing. on Northeast. Northeast we’re contract that that it will goes customer a up continue very unit X-month have the in operate we we well hopeful the in with So And

Selman Akyol

for Understood. CapEx, And capacity talked about expanding the Transportation terms it the then like segment. – of I it on you guess, as sounded maybe

the of far, invested the same this kind terms – same items? the – you think what of for being CapEx balance year, we So CapEx in growth of had of budget should the in

Sharon Taylor

segment. I land for And CapEx looking Yes. to we think other large plan the our That CapEx, I at related was some growth when growth trailers. don’t any of of we transportation focused We have are think on so, business. other any are the

Selman Akyol

you. Thank Alright.

Sharon Taylor

Selman. you, Thank

Operator

[Operator your Fitzgerald next of is Instructions] And Baird. question from Patrick

Patrick Fitzgerald

first tracking for of going on ‘XX the pricing, ‘XX the business, for fourth Hi. Thank what’s of taking given and with you the How is the question. quarter and and butane the versus ‘XX was some color So, fourth up? of quarter the on issues there any quarter be have of would prices ‘XX, that hedging given first moved helpful? last year quarter

Randy Tauscher

Randy, is This Patrick. Okay.

you to think relative was a year, when year last about So, business year, – lot of Last crude last year. is went lower we the there butane this differences. much

low-XX% prices reason this into prices But whole they typically much time This WTI when – the That’s inventory XX% that’s were XX%, you and than this of you butane for ish, that, than currently. spread, lower look – the is year. the Our year see it’s about at are good higher there to would fundamentals. year.

exports significantly similar butane for in butane propane the business. Much production year-on-year. business year-on-year. We applies see And rise you story have we have to seen field the seen same the very

So, and no, year, we we going can’t forward today a on do. give here financially to are we are how at you projection sit this where

We than have able we started hedge were putting bit which position, a ago. on is year to earlier a a little

are at third the away build the hedged point are still time. think season. still are in us, beginning fundamentals but are the middle months we several in to this the we sell favorable approximately We of a and from season, We

Patrick Fitzgerald

Okay.

or say? So, is But or up, can’t there any mean, lot I to just from expect would down – mean, you I it I of a pieces. last what be year moving you know

Randy Tauscher

I you projection give a And really last we what butane can’t season Every achieved to relative is unique. year. in

Patrick Fitzgerald

Okay.

to sounds capital cash the be and of operating is given do free like CapEx, In cash to I flow terms it flow cash you to NGL cash flow free be everything. your in close adjusted free – back-end of flow, terms expect minus mean pretty going loaded, working guidance? your pretty

Sharon Taylor

That right within that straight from do. is numbers, would we our those coming Yes, we range. and projections, to be expect

Patrick Fitzgerald

Okay.

like believe on obviously – the notes amendment before part the thinking you are you Would start So, how want structure take already notes, they – have about deal the of to of care with you kind lien they an top And or the of I capital are X.X the callable you soon. can revolver. that? lien got you second

Sharon Taylor

premium, X.XX are August, it second So, the notes at its now are I and XXXX. think X.X lien callable callable X.XX of August X.XX. next a be or The will

at So, sit Ls have at then wish moment right the same when the are to and August structure, Ls the the the to capital that out thought that here we as we we And that capital we the and the don’t, markets, we at certainly X.X. But obviously, we my next look and revolver get to makes timeframe is the going today ability time had and two at looking redoing if into sense, are it take sit wait. we those now. year, X entire

Patrick Fitzgerald

sense. makes That it. got Okay,

Thank Okay. you.

Sharon Taylor

you. Thank

Operator

Jason Your Capital of next Markets. Mandel Instructions] [Operator RBC question is from

Jason Mandel

a revolver time. of just quick for my just were How question, you? morning. the a you Good maybe bunch last amendment. that And answered Thank questions in on follow-up but the are

And amended was the liquidity? the the obviously, potentially to due there now What last a bit availability have room under give I So, covenants to we for covenants. working capital little is weak limitations available quarter revolver a right more changes. the was on think quarter. now

that’s So, the available actual right what amount is dollar now?

Sharon Taylor

XX, I would can been available say our $XXX at June have maximum million.

$XX that that have at available. would about had we So, time been million

Jason Mandel

you Thank Okay, helpful. Alright. great. very That’s very much.

Sharon Taylor

you. Thank Alright.

Operator

closing back further no call are to remarks. turn at will I Bondurant There time. this you. for questions over Thank Bob the

Bob Bondurant

year only at summary, Refinery showing services. improved as continues small That remains economy Thank historical for positive norms. demand Christy. than less second half has customer is In utilization for time, increased is the our of recover. and our this to our in up the outlook you, percentage improvement a

the Before variant. Delta moment to concluding, pandemic, including discuss to want I take COVID-XX the ongoing a

like that industrial evidence to Delta death who variant positive, they will overwhelming vaccinated that politics recover highly And certainly the year. diagnosed continue to are the illness we the While a believe see acknowledging their risk is spreading, countrywide is greatly lessened. experienced factor, risk consumer The if is no shutdown while that we severity those are of a and protected. is of real last demand and are and

an they face the unvaccinated risk, elevated the While percentage a are of smaller population. U.S.

So, should cases for may rise, hospitalizations unvaccinated continue the overall, but to mortalities not. and

leisure thank would increased continue; continued robust offices, travel returning and in return points So folks to the in increase like will toward economic what I and listened call today. business to All our everyone the on as their we in view, a demand. recovery normal, regard this who to

Looking Thank next speaking you. forward quarter. with to you again

Operator

thank And conference today’s call. you. conclude This does

now You may disconnect.

Martin Midstream Partners (MMLP) 23 Jul 212021 Q2 Earnings call transcript