MMLP - Earnings call transcript Q2 2022 | Martin Midstream Partners L.P.

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Operator

Good morning. My name is Chris, and I'll be your conference operator today. At this time, I would like to welcome everyone to the MMLP Q2 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. Instructions]. [Operator you. Thank Financial Chief may begin. Sharon Officer, Taylor, you

Sharon Taylor

Director everyone. you, Bondurant, the on And Danny CEO; morning, operator. good With Cavin, and call Controller; Tauscher, David me FP&A. COO; Thank Randy Cannon, of today are Bob

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

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

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

Robert Bondurant

Sharon. Thanks,

strong spite our for fears. current several the guidance continue We rate year. inflation which more of segments as quarter to of the $XX Midstream million. Martin exceeded believe in of came For increased consecutive we our range million our significant outperformance the I $XX to guidance in fundamentals beat revised the recessionary business Transportation majority of will forecasts in quarter. million sixth our The quarter our current remain have discuss detail. segments, All lines XXXX was on compared from our to of remainder its our EBITDA $XX.X Partners business Based the EBITDA forecast of second outlook, adjusted in Sulfur published our second the and and forecast four shortly

XXXX is to $XXX for range guidance now million million. new Our $XXX

Overall I'd XXXX. second adjusted in second as EBITDA second mentioned discuss segment. I million EBITDA quarter the in to like business million, adjusted $XX.X by of of to quarter, the performance in compared $XX.X our quarter Now our was more detail earlier,

six XXXX, million the the months was of first $XX.X to For of adjusted compared our months million, EBITDA for XXXX. first $XX.X six

flow was the largest to For compared $XX.X second continues $X.X million, ago. performance EBITDA year our portion compared segment, million segment this $X its a quarter, transportation adjusted $XX.X million our which million was cash had to Transportation contributor The improve adjusted a EBITDA to year land of as ago. of

During the second quarter, count our a year ago. average day XXX per XXX to daily load loads compared

have increased year by We driven count demand. Florida our we into ago. and tight. strong macro XX% Central growth lubricant has expanded refinery customers. our driver have Overall, Also demand serve operations on This trucking transportation remain been services order in from fertilizer to our growing scale, from truck also a as a

performer So we the be of will business for year. strong the continue a believe this to remainder

only two ago. by have inland performance. to has rates day the These to increase also $X.X of quarter. average a helped a market, but utilization, improved utilization us our Our barge transportation as a compared as transportation average negative in of allowed tank million during it marine second to marine X not tightness ago, XX% our to significant year currently Compared There's refinery PADD $X.X also than asset EBITDA improved ago. marine factors transportation driven adjusted in year million transportation improvement saw a business the the XX% utilization asset XX% cashflow improve which an our had quarter has year compared greater our

utilization barge similar we remainder quarter. rates. market year, to the marine tank transportation be current refinery the in the the the of of on inland This we continued for should quarterly flows Looking cash to means year second the tightness remainder see have the towards based

second million in had flow adjusted our second year In was but Our fertilizer Compared largest year Services EBITDA $X.X our $X.X ago. a the we a to million business margins. compared quarter fertilizer segment, of adjusted by $XX to ago. million to $XX.X a cash sales of million generator year Sulfur which EBITDA compared stronger volume, ago, of see did that this had a was segment, reduction offset our

the Looking year business, in the seasonal towards customers as normal slows from in third our our of we weakness will demand fertilizer the the remainder significantly. see quarter,

fertilizer annual our at as perform would We come production see full quarter, in our fourth to customer demand and the expect during turnaround the to begin projects also rebound facilities fertilizer our our facilities will We production return should seasonal service. into back then third quarter. performance

In of pure second EBITDA adjusted of a Our ago. side Sulfur second per sulfur million segment the quarter, tons approximately handled of utilization driver a year market Sulfur was refinery last our million quarter, the increase Beaumont our improved $X.X had of to we year performance. X,XXX to compared X,XXX day approximately XX% the result increased tons to $X was Services in compared the per a in volume main This day compared and ago. year

utilization flow we sulfur year. should last what to more a cash year, the which us of than remainder the have PADDX, experienced we project allow refinery continue in towards to pure consistent Looking strong

largest to EBITDA had our EBITDA and million and Supply The year business, year to these million cashflow million ago. cashflow quarter package in increased compared due third and year adjusted and which year $XX.X from $X.X a margins $X.X we experienced million, fundamentals lubricant to margins Compared Our tight, second than grease leading sales stronger ago. the Terminalling in volume to remain compared ago. came continues segment, of and both actual ago, second our forecasted base had strong to $XX.X adjusted a a to in of growth grease a the which and contributor was margin Storage lubricant quarter businesses.

see we business towards the grease base Looking our package continue to our fee assets. margin in and terminal flow lubricant consistent cash based the remainder from of and strength year,

first our summer. gasoline to into in short segment, quarter. from This purchase of term seasonal Gas a changes have had $X.X natural supply. winter, seasonal pressure inventory in store we in short debt improvement butane Based our quarter, force through be capital minimal cash selling gasoline the working of the second butane beginning drives and decrease blend that third to seasonal working when fourth a followed throughout their summer second this inventory will allow flow discuss Liquids to produce excess the back by will a excess This throughout cash quarters flow butane the our and season. a final throughout and weak decreases. third model, inventory debt growth also million In flow butane liquids, is corresponding result season. This growth capital our for changes significantly process in This as butane for quarters Our expect buying sell million to EBITDA business liquidated winter also order blending Both corresponding has the increase pool. we rule and quarter, which logistics to compared refiners fourth seasonally in are year in to quarter, on a gas the ago. butane term segment production Natural of adjusted vapor butane seasonal business September. in the the We is demand in $X.X our rule to April the back customers refinery store them

for this be to have However, the remainder performance discussion quarter forecasted less fourth concludes outlook fourth of quarter year This and margins we of for year. second the quarter XXXX. than my operating the the

sheet, to changes in capital resources our our over call the Sharon Now I'd to XXXX financial like and discuss turn to leverage, balance guidance.

Sharon Taylor

Bob. Thanks,

the approximately walk the working expected XXXX $XXX debt of million storage drawn ratio and first At $XXX capital calculations include secured The debt million entered was out as revolving $XX ratios. into June secondly related excluded seasonal the or components $XXX certain sheet the liquidity increase earnest, the leverage excludes slight notes of of of build credit inventory XXXX. million. quarter. our our our quarter through end, was $XX to therefore due was outstanding Total and outstanding calculations X.X Both out, let's in under million we inventory the debt was under from a XX, thus sold the which million, needs. either and long-term these sublimit first million balance increase was million attributed $XXX At lien of $XX were notes total NGL leverage adjusted carve of been adjusted facility. June inventory butane X.XXx and components First, lien forward capital $XXX from the This leverage increasing million XXXX working has our credit and ratio of and hedged. end available first leverage was of debt X.XXx. total our XX, debt $X the At to facility. revolving secured at due the our the carve our bank approximately lien our season when leverage million

purchase ratio was winter quarter, banking compliance quarter Looking all butane as otherwise. covenant interest we for forward, blending the and and full coverage third leverage end we store in continue X.XXx were the the The may the to in season. increase partnerships of with at or

which million, Maintenance below spending. differences. shortfall capital I estimate from was quarter for $X timing project for the Now second being of our majority capital million, totaled $X.X will the quarter of the the address

capital $XX However, we still expect our full-year approximately to million. be spending maintenance

expenditures were approximately guidance forecast but year-to-date. million total $X.X is timing As capital projects, a far slightly $X $X.X of of of the running expenditures, to growth full-year million Growth our due million. quarter for maintain as we QX CapEx approximately behind also

to in full-year million to adjusted in robust services, are $XX we $XX million. flow. guidance The projections, expenditure results and $XX increasing of $XX flow, turn back When distributable through our the and remain million our EBITDA capital cash for posted those with of guidance guidance, and $XXX quarter XXXX will cash And could operator our X on second there the downside potential found remain, with the walk latest believe conservative of I'll our products Relations supply was to quarter, to while to chain which but more management section have guidance, inflation the demand of and revise call Finally, our forecast transportation no and increase the than for the between we million adjusted around now Slide between Q&A. our change presentation impact for on the website. million we upside earnings $XXX risk to revised can of the last along between free strength adjusted and of and our Investor in a million risks services demand elected second I our assumptions issues, EBITDA projections, regarding half XXXX. of in be

Operator

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

Your line is open.

Selman Akyol

on Congratulations you. quarter. Thank a very nice

Robert Bondurant

you. Thank

Selman Akyol

clearly early Yes, off to around I continue utilization just refinery up XX%. let the most third on start transportation quarter, in the And I recently we've me seen think tick mean, here side.

noted for turnarounds assuming So when you outlook, what in there forward look transportation you you your and providers? are stronger for

Randall Tauscher

Thank Selman, question. Hi, for the Randy. this is you

six one from planning they're our a refineries has with, our a operate of at and That through have late quarter. of that to level been is for we're for on year out quarter, in the much foreseeable that their have remainder to the with to would to they refinery. Beaumont, and maintain We but XX% spoken primarily provide major release been in we've they're in the this normal. customers The And second you only us the to of noted to very year. to knowledge that little demanding, products Texas four for and have, minor the one the one very and major because you that markets maintenance continue integrated are a then When those impact so we trucking the high third second extended the a one be expectations to has future. the to XX% going maintenance, relative the four expect extent Louisiana have half has large that in in going think it be be planned just But company about of to Arthur in trucking it'd refinery utilization. strong that perspective, difficult weeks, refining should so Port area sometime today of particularly sulfur would or refinery the there think turnaround, I has that

take it when So today the would impacts on us, be be of I having moderate. very other work, no refinery would would trucking, redeploying lot truck think drivers but some maintenance. we're a those to problem A

Selman Akyol

said you'd count you'd then guess think XX say Got I I added just that drivers. it. where And previously, year-to-date? Can you is,

Randall Tauscher

I about And continue XX. I driver to higher in to XX to of XXX XX large to large that. when have running number range, anywhere the end is think a XXX week, the particular a up in say we're at Year-to-date, we training on sometimes

lot bullish that our we're So on relationship a large very growth really expanded sulfur of market, customer fertilizer we've leveraging Florida with. to had continuing we've in count, that our has on longtime driver been a there grow

we've the so had to positioning trucking that business. helped And And that ability market because relationship. in the grow our Florida in Central it's of

Robert Bondurant

is The we're at only currently XXX. we add, thing about what the XXX began adding that the that's I would and year

drivers over up we're of year. XX course So about the the

Selman Akyol

get strength and where just sort thinking year marine, can are then kind a long, of where you things year enough two you're of term point in about helpful. out seeing long you contracts? Very guess And I

Robert Bondurant

on comes spot interested with continues that's so somebody this the business market, the not at when generally Both that basis, in to under point that in we're participating spot in term, time. far be

the So of through X,XXX, over rates our $X,XXX this we And even of day the a were the as were as of fleet we way in first half to we beginning, spot day at a in at are X,XXX end is we then as quarter. today the kind continuing the we sixes. our day month that And business speak the quarter, worked speak, rate. as escalate second per

barges haven't for any escalate. continue It's tighten. in spot. continues continued to on particularly can put Rates to the we market the no, yet. heated And on be term So the to

Selman Akyol

And you. you're higher those still to utilization having at Got XX% XXX% rates?

Robert Bondurant

Yes, correct. in mid-XX%, that fleet the utilization is

Selman Akyol

Got it.

were Sulfur I to were that surprised everything Ukraine year? volume very down, And and segment, but half know for there comment see helpful. back anything just the very do like fertilizer. there. Okay, margins thinking little the seems I then standpoint, And for I margins margins be Is Any there and the I strong strong strong whatever the about about? should in is, you expect as still I think was volumes coming get of anything there how from

Robert Bondurant

There's lot a question. to that's Yes, question. good that a

about less second were less XX%, So and upon we we've are in yes, by quarter fertilizer talking volumes for fertilizer the margins the than you're the about historically what depending than anticipated which done product that that anything we anticipate to see in would business, driven. wasn't than the we XXX% greater fertilizer than entire XX% that higher just didn't typically the market But business. wasn't unusual

winter we now continue season, But the where narrowed bit in to in have And think quarter. such so we margins strong. right going the a is enter little to the macro they as environment still that second from we into winter be the they're the were season. strong And are

Selman Akyol

going things sort break I to as you I Got or of just -- of And then it. mean, think Helpful. say butane QX and are how your can think QX? you is between demand business sort about [indiscernible] the what you're out

Robert Bondurant

million sales. at the XX% we And a the QX, about a inventory, we to year. half have. QX will of QX, than going about typically XX% then somewhere And inventory get build that So typically and less time, we slightly not a anticipate we market which do moving to of and barrels is think typically we having about we're take problem our this given

Selman Akyol

you sounds mean, continue margin lubricants to of then higher I to there terminalling continue the as pretty continue be still and to sounds And off non-fee-based quickly well. strong QX prices strong based helpful. business? then expect struck QX it, real like the there. going Got your I should into would that guess, on fee And like business, just be to it be

Robert Bondurant

agree said, all Yes, you so with. everything That's correct. we

margins lubricants We year. in packaging business expect the grease the strong and the the through of rest

Randall Tauscher

fourth And last through there, quarter, see Year. I small the volume do comment experience a year. one from didn't add Thanksgiving that slowing will typically of we We New in really

I as phenomenon visibility don't may if or But to relative cash that. tick may the that that that slight have flow happens normal. could down be we a QX there in happen. So QX not on know full in

Selman Akyol

I you is? think talked some you guess plan more you, to Got And And trying refinancing is about the balance okay. notes. just now about talk and do over sheet. I originally Can your the what you the guess on pitching where market

Sharon Taylor

two those Yes, you notes are at sometime know, so be par L as will callable mid-August.

to So XX.X, we've the Those prepared if what our spoken interest on be is we're rate. what refinancing want notes. those there, opportunistic our our call currently and we've go to we that around not when we of now. are should the that and able last earnings, out And done we is to going think be to rate and be based market to months, there on sidelines, down XX on It's interest the the watching strengthening market. so right we're we sheet the notes, those reissue balance based we're through it bring and reduce

continue to a So that. keep watch on we'll

Selman Akyol

Give you. you I your or the what using are do hedging actually remind just hedging, to me you me in Got directly commodity of just terms guess [indiscernible]. hedge? butane another

Sharon Taylor

hedge time. majority directly of a the butane We've

Selman Akyol

right. All

Okay, I congrats. Thank you. that's Once got. all again,

Sharon Taylor

Thank you, Selman.

Robert Bondurant

Thanks, Selman.

Operator

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

Robert Bondurant

Thank a Martin Midstream. on I'd everyone In the out interest you, for on few your like to our closing in Chris. call comments unit thank price.

at traded multiple is a to our peers. partnership our years, several For discounted relative

should and reduction, on a believe positive have non-core the years and divided are have a capital approximately significant begin today, is meaningful in the the while last improvement including value example years moves be recognized we EBITDA made few times to the X.X impact debt Midstream multiple is As earnings past, sector and multiple unit whereas trading relative enterprise price. in times, space currently for I soon in our still challenged to around flows by the assets, median of our the sale five energy

operating Our of business leadership control team control, what which can our they and our the only is company. can leaders performance

to we value to performance as continue on plan, all line company again. our I all focus peers. believe with more in strategic will long Thanks As our ultimately and the equity execute markets our

Operator

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

You may disconnect. now

Martin Midstream Partners (MMLP) 21 Jul 222022 Q2 Earnings call transcript