MMLP - Earnings call transcript Q1 2022 | Martin Midstream Partners L.P.

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Operator

00:02 Good morning. My name is Chris, and I'll be your conference operator today. At this time, I'd like to welcome everyone to the MMLP First Quarter 2022 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. you. Thank XX:XX Instructions] [Operator Sharon Taylor, begin. you may CFO,

Sharon Taylor

FP&A. including XX:XX joined Randy today operator comments, and I Director Tauscher, with you get everyone. be I'm good morning, SEC. factors facts on making of our performance Cavin, by Danny regarding management the David will Controller; that statements Thank Before our the Cannon, impact the we based of assumptions started impact as you, be current COVID-XX COO; and actual XX:XX that Bob and may are remind different. Martin, Bondurant, defined related CEO; forward-looking to pandemic, Such statements by outcomes future could the materially the of judgments could but

our in Martin's filings opinions table press measures in call measures, to should of in his measures will And the including your I own in financial performance. form those future on our Bob refer earnings SEC historical discuss risk review today's information You the to non-GAAP about and the first our their non-GAAP We to factors a referenced non-GAAP the section financial XX:XX will now, find remarks Bob? of call GAAP measures. on reconciliation to turn corresponding XX:XX and XXXX Please financial information Investor for Relations posted call. our quarter discussed over release today's other regarding website results.

Bob Bondurant

XX:XX Thanks, Sharon.

million. to its published Midstream $XX exceeded was Martin consecutive EBITDA as $XX compared the For adjusted quarter, of million forecast quarter our Partners EBITDA a forecast fifth $XX million range to first XXXX

with first XX:XX performance confidence outperformance came team we even the exceeded began our Transportation improving from lubricant in line. fundamentals grease of could Beaumont of forecast, two refineries. a business the business our Although, majority continue and beat beat production our sulfur several strong leadership packaged in Transportation we optimism. lines As our the and Land and guidance remain increasing quarter with fundamentals, these published our our strong Because extraordinarily QX had at along our Marine business area fundamentals to the year, businesses, strong Fertilizer

EBITDA range XX-month have guidance $XXX this million, than We our of our is While million is a give $XXX EBITDA to feel less XXXX. we achievable. for range of approximately XX:XX comfortably updated trailing to that million to adjusted wanted guidance $XXX we increased new

they to to Now, and segment continue opportunity highly be business in range discuss motivated our like guidance However, their by new to that to first I operating segment. beat would have our detail quarter XX:XX forecast. the ability teams and I'm published performance exceed our both optimistic business more

As the I first of earlier, million to XXXX. in adjusted the EBITDA of of in had million we $XX EBITDA $XX.X compared quarter adjusted quarter first mentioned

impacted Sulfur adjusted first strong was very of ago. flow $X.X a originally the we're our sulfur $XX.X the compared margins utilization largest volume improved increased for first quarter, tight throughout million compared year quarter, compared our quarter contributor X,XXX XX:XX by quarter Gulf refinery to segment a ago. our Winter $X.X fertilizer fertilizer quarter, XX:XX in year to quarter the to pure adjusted were Uri due the EBITDA tons ago for For A first over had exceeded forecasting. our tons per system price per first Market production year cash the in by Beaumont $XX.X segment, negatively In year-over-year. handled significantly to performance into first year million provided increase of a rising volumes reduced sulfur Our due a million X,XXX sulfur reason The primary Sulfur EBITDA in day than Storm were This day, group pricing as This $X.X conditions year Services and in company. environment was million for the side stronger to the Fertilizer rose had XX:XX than supply. had million first segment, EBITDA sulfur less of business $X.X year of Coast adjusted ago. our compared for in in million resulting this ago. Fertilizer our to the in which the inbound refineries Services quarter our

year primarily to and generated of came should lead from we Grease than cash had assets our fundamentals Terminalling should million Supply utilization margins, both Our believe than XX:XX our we the Looking weather flow towards adjusted in flow compared has million $X XX:XX fertilizer as to the continue we and terminals strong a second be cash first remains flow $X.X year our periods. terminal in April conditions, the $X and to cash had as and strong. based fee-based experienced Packaged a fee-based margins to XX:XX increased the quarter, good growth be towards XX% a which should that production will from our tight, running Lubricants sulfur around year businesses, business have subject in ago, performance for our been quarter. second which EBITDA quarter daily both segment, PADD been greater ago. Combined continues similar pure X and first Lubricant quarter. quarter, due to We The flow in EBITDA fertilizer margin largest million, the to the to cash contributor refinery also million was first Storage flow quarter also our of fundamentals second ago. adjusted business in handle see Packaged has performance second $XX.X a compared ago. of million year $XX.X quarter, and sulfur favorable to stronger the as Looking first in businesses. Compared sales these volume cash Grease

of million margins. flow adjusted our EBITDA in segment, $XX.X Our our similar first cash was will will current to XX:XX which adjusted quarter million land averaged quarter EBITDA have largest as in transportation demand believe first in portion million in only ago and day supply the had maintaining $X.X drivers compared ago of increased XXX day, growth. pay per to flows the inflationary and to more the cash to count $X.X revenue per a growth to load quarter, cash our contributed Lubricant trucking driver first a of XXX ago. year to a employing flow, have million year $X.X has rates the Grease count added this also has load services, we compared our We segment driver rate strong XX our was Transportation to shown year improvement businesses which The utilization both along cost Packaged average also refinery compared tight due able year. with the increases this year the to of A helped on ago. also which been third than been remarkable as assist we drives is generator in have significantly to improve stay Additionally, increase has stability our pressures XX:XX us facing. These Strong which allowed ahead have pool.

utilization in performance. Marine to business another of compared of by is Truck a we transportation our full $X of Looking piece of ago. Inland Transportation The million Transportation offshore continue million tow. towards $X quarterly our XX:XX primarily was utilization $X and This the second million our to see improvement segment one year negative a the our second strong EBITDA increased Fleet and which anticipate strong Group, adjusted driven quarter, had fundamentals

balanced become Our only relative more of supply average to day up improving with had vessels year is rate ago, demand beginning to see are a and compared slightly to the rates. market day we

we see our segment The had $XX.X a should attributable Marine to million approximately adjusted final year butane quarter, volume these our which Liquids was EBITDA quarter, ago. quarter. Gas year's down to discuss was trend segment, see cash towards compared fundamentals, $X.X XXX,XXX first improving this XX:XX second of barrels business this business with and is as ago. flow our million business a Looking the decline year in compared second continuing to the solid in Our in Natural we to

purchasing the butane quarter from to unusual However, quarter due last of XXXX fourth XXXX year refineries of price backwardation. the to was as first delayed

volume earnings second effectively, and Looking for were again will year's quarter XX:XX gasoline rules. historical also the butane so line quarter. for August. be September, decrease in quarter to operating third our segment XX:XX to performance they through we quarter, our significantly with will vapor and began This the in as start to winter purchases This into relaxed first We as in last to norms. see can while the year's towards quarter start refineries purchase this should second in and first delivered discussion more the volume earnings and this our outlook first then order into begin storage. last meet pressure my flow blend the sales high, butane were So unusually cash end concludes then of inventory

would like turn I to and balance to Sharon call discuss Now, to sheet, over resources. leverage capital our the

Sharon Taylor

million Total million first-lien these with supplement XX:XX XX:XX and been build forward excess quarter. has during XXXX, $XXX XX, was announced leverage tender approximately the the updated was discuss walk-through secured excluded first-lien adjusted outstanding sold and debt conclude liquidity seasonal million facility, under sheet end, credit and revolving carve-out XXXX. At ratios, remark cash XXXX were Outstanding March inventory under excludes the adjusted end financial our X.X of $XX credit capital the the leverage million leverage to leverage Thanks, hedged. spending quarter, during of of walk-through capital $XXX of notes total available from our and working bank the with $X.X our XXXX a our offer our attributed lien and include certain quarter, when consisted $XXX revolving of lien quarter debt from which the and begin times balance components due I'll $XXX X.XX NGL million, at At ratio $XXX March our leverage brief At debt secured Bob. million. times, was total fourth XX, X.XX debt notes our calculations was $XXX of down the either the or results ratio guidance. drawn due XX:XX long-term was million on our debt both a second million of calculations facility. our inventory the flow that of

that when higher anticipate balances meaningful NGL more revolving and increase due do ratios the and are third our on due we carve-out Importantly, business, elevated the to pricing. seasonality impact projected a have second volumes during will to the our inventory to our leverage of quarters, commodity

of interest in update and quarter ratio focus our full coverage quarter the compliance the the on outlook. Next end all during capital XX:XX and full-year banking with was the times Our let’s covenant. at partnership spending X.XX was capital expenditures

CapEx million. for million Terminal $X.X expenditures $X.X approximately $X which $XX approximately slightly for for the to our full requirements certain Due anticipated the of year, below growth From $X First, estimated guidance Florida. maintenance were growth cost of approximately new to timing the for capital that Martin expenditures, was expenditures. the forecast the Transport million of quarter quarter, Switching XX:XX includes capital total the maintenance approximately year turnaround included approximately guidance, which capital remains we million. million in

slightly our we quarter, was again spending capital were that first of The maintenance $X.X of estimate timing most as below differences. million, from $X million

result However, to be labor at as for time, costs. and a spending increased maintenance anticipate the material of we slightly capital our this year, higher

closed from $XX and flow on offer XX:XX March guidance Concerning revising are was announced on we free the cash million XXth. April to that excess XXth million. So $XX

for of an of covenants required Q&A. resulting using utilization leverage of ratio increased notes increase approximately XXXX. was XX% in million of on the our million free services, market to coupled XXXX When between anticipated segment was $XXX be X.XX revolving April to products XX:XX as principal of the being capital reduce year the higher improvement our between par and secured on guidance, website. $XXX on We that interest on early notes our line of as our XX, cash latest assumptions and was notes negatively we million Turning accrued forecast upside million total in than April section and our both were slight credit. our flow to and Relations in to flow in has revision between the at which pushing EBITDA least million. there were impacting make to XX:XX and We risk. still million. for the the in our marine borrowings then and inflation to times, now and those the $XX to the the distributable our found cash The Slide The issues experiencing XX. on with long made $XX more rise along to conditions per cash of as results the Investor a revising I affect the repurchase can offer and guidance adjusted of rate. used above our downside the presentation $X.X assumptions, $XX demand adjusted million XXX,XXX. later which tender at Transportation X free flow, supply assets, I are second-lien divisions results We amount discussed into As have offer The our annually last $XX cash call payment favorable in remains to posted when full-year management XXXX is will our partnership chain along tendered. with to EBITDA tender and and approximately conservative expired operator with for maintenance We calculated call, cash are land approximately flow. turn with payment a guidance our XXX,XXX back earnings anticipate XX:XX Recall adjusted notes, the year-over-year, guidance believed under been remaining reworked spending excess

Operator

from [Operator Selman Our Thank XX:XX is you. Instructions] with question first Akyol Stifel.

is open. line Your

Selman Akyol

XX:XX a Congratulations Thank nice on quarter. you. very

into I the and the let of go would so what you guess and you're higher third guidance, weakest a for are about again start quarter the typically -- like I in quarter little the quarter out I starting third? if right on talk you Yeah, that's the the guess being dynamics then then maybe it guess, you sounded seeing is out how year but weakest that. can I talk isn't guys It fertilizer just but I I me guess So conservative, bit have QX second little guess now look quarter, than of or? bit with, very just thought the a would because

Randy Tauscher

to XX:XX the turnaround have Specifically fertilizer. but let quarter as during That's the generally. to it. I'll Thank -- ever is are we the you guidance, quarter traditionally the Sharon seen slowest pretty a and third Selman, Specific this the is the during sales quarter the to question weakest, is get into as fertilizer, that environment for correct, Randy. quarter specific we've slate the and macro good second heavy third in

prices around with world. You've and food seen shortages what's happening projections and the

planting what's observed good domestic the year. prices going fertilizer to are with think, will after we and if fertilizer, we and happening we expect exports they with have like that excuse strong have me, planting would very We we we a season weather fertilizer think during season materialize -- the

Bob Bondurant

but very feel go guidance. to make to opening achieving, of XX:XX up In optimism a my comment make And with that. comfortable with my we we guidance the is regarding I'll still want comment was statement, I comment, upside I felt, a did there

strong. Randy's remained I think point, to fertilizer

some now getting then business Packaging Lubricant and business strong also the think remains we're in tailwind and I Land tight. remains Marine Transportation our the

some our happens we inflation, the businesses, visibility, macroeconomic what in in, in think have real time. this, will this say unsure, tailwinds world there's in we tailwinds great quarter, headwinds point I fourth don't we've but got live have I down tamp but we So at more and their

Selman Akyol

to at but that? or help if all. should turnaround, your go see heard guess side? a wondering as rates on Is fall expect I land should turnarounds volumes started any do go about from more they we that to talking that Got you you've off then be I expenses anything forward just mean, you're of you. the did get offset about land that, getting we customers I'm XX:XX on standpoint transportation, I better into And the we there thinking

Bob Bondurant

No. XX:XX

the And We refineries to as we at haven't specifically been going months. the refineries can, they we hard think X-X-X the the that, turnaround advised current you on the with as Gulf too Coast on possibly (ph) spring. many around diesels are the schedule the the as impact look run to for summer current, as head when crack

side is, we years. our we over several the in other have fertilizer comment side the chemical transportation grown have on grown last the land the around So, and

our the plants refinery all -- chemical strong So are. they are customers the very and plants to and the just business, refineries are the while also are very running fertilizer important like

Selman Akyol

you're you are seeing comment seeing That's Got very I you on helpful of you XX:XX as talk sort you're what maybe rate in mean, you're said guess the things we're can turning I market base, increases you. really seeing then, of just coming magnitude Any a increase color. off the of make low to can I And hardening. but I the marine. know of there rates? about guess about

Bob Bondurant

XX:XX Yeah.

right. You're

The and last utilization quarter ago. from was very very in ago a came a first off year The low, the base quarter was our utilization year year therefore, refinery low. first low one

business. had a in million we So, approximately $X improvement that

First already relative continued quarter to the expect XXXX, improvement seen utilization we improvement of rates. and first XXXX have continued in see we to quarter the in

of the day $X,XXX $X,XXX average $X,XXX to for day. most our barge two were seeing now we For for the a a $X,XXX first on day we to tows. are rate more And quarter,

We're still for So $X,XXX pre-COVID, the the where a rate. rate we had day we not been were were where improvement substantial.

think room still on we run So there's the to rates.

Selman Akyol

my in did rates increases in to really through? of like run of February, came a did I X those the rate very happen rate all weeks say XX:XX the trying just January. you Is the or $X,XXX -- started sort couple I'm mind much until January first start-off get Can you $X,XXX this just Got of was quarter mean you. during rate again, how February, improving not late or And first a of then, appreciate that. or when sort I

Bob Bondurant

XX:XX Sure.

till to all way largely March. last is to The we very $X,XXX, the started the $X,XXX In half last was see rates first March improve. of half the the of when quarter

Selman Akyol

other focus transportation you guess And looks the there any for just buying more be looking continued, for it are or CapEx cash obviously flows, balance Thank XX:XX could you on you small then I additional adding, is maybe guys maybe goal that business. the are you that. the rigs still main much the going to very sheet projects like that you're at, have

business additional in that further cash the investments any might Just flows? drive

Sharon Taylor

for that except even additional about. now, we like we've the don't investments Right XX:XX talked ones, that CapEx have small small growth any

something look debt, continue flow, X.XX we So to cash target and not paying to the that I think have leverage that. excess that focused down at I'm saying of times continue on we're the if repayment. at come go debt you interesting are we've invest, were and way to moment, that that ahead focused our wouldn't the on numbers right but continued we provided all

Selman Akyol

Okay. much quarter. thank Well, you Very again. very XX:XX nice

Bob Bondurant

you. XX:XX Thank

Sharon Taylor

XX:XX Thank you, Selman.

Operator

Instructions] any that call it And questions. turn [Operator over remarks. we have for to closing Bob XX:XX appears further no Bondurant the I'll

Bob Bondurant

the in utilization XX:XX expanding opportunity you, belief Thank our intent generate Chris. through XXXX. and That debt for my close balance I businesses new call, that At last unitholders strengthen our through and than I services, to to our mentioned earnings asset was risk continue sheet our our of reduction. value more to saw alliances,

services profitable the inflationary solidly the forward, on so, point admin sustained our from we solutions to our and short, for have to goals. delivered for Our cash a customers Looking in in experiencing which belief affirms with been plan. operations uncertainty our products essential doing the path our and meet while offering opportunities combined future we XX:XX innovative flows business geopolitical are are employees assets, those momentum leverage teams have they In my have that certainly and to pressures, there our provide cost and executed partnership. have delivering. leaders the They employees optimize to conscious while focused to and

As always, interest for Midstream. Martin in thank you your

Operator

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

You may disconnect. now

Martin Midstream Partners (MMLP) 21 Apr 222022 Q1 Earnings call transcript