MMLP - Earnings call 3 2023 | Martin Midstream Partners L.P.

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Operator

Good morning. My name is Audra, and I will be your conference operator today. At this time, I would like to welcome everyone to the MMLP's Third Quarter Earnings Conference Call. Today's conference is being recorded. [Operator Instructions].

would Chief turn Financial I to conference time, Taylor, Sharon Officer. this like the to over At Please go ahead.

Sharon Taylor

room CEO; Thank you, Controller; joining the for and and thank Bob operator, and of good us morning, Danny Cavin, today. FP&A. David Tauscher, COO; Randy everyone, Director you are Cannon, Bondurant, In

I'll statement. begin with our cautionary

currently These Please well may issued upon our based to management call, statements as this are and making forward-looking us. as beliefs statements as available defined our press During be by refer assumptions information the to SEC. with current yesterday differ to the cause list that afternoon latest release and as well results impact the of from our as our could future filings Martin, actual a performance expectations. of SEC for our factors

financial EBITDA, on as cash measures such free and non-GAAP distributable flow call adjusted flow. today's will We cash discuss

we to effect In after to optimization the exit refer addition, EBITDA business. the butane adjusted giving will of

of GAAP our earnings measures find non-GAAP to a will nearest website. release reconciliation press their You our these posted in measures on

I discuss by second to segment. turn quarter Bob to the Now results call over will

Robert Bondurant

revised the would the quarter discuss the quarter like our to actual Martin third of Sharon. I third operations Thanks, results Midstream's now of performance to comparing guidance.

our the weaker in year, X QX. weakest reminder, is business, the historically is the fertilizer which due flow third a seasonality to quarter to quarters quarter relative As primarily cash the typically other of in our

third to over third EBITDA revised quarter, guidance compared X.X%. million $XX.X our of quarter $X.X or the $XX.X For we adjusted an of had guidance million million, improvement of

million. Butane adjusted excluding recently ending XX results trailing XXXX, Optimization EBITDA of we Exit months the business, For had the of $XXX.X XX, our September

transportation to revised million. flow had million EBITDA adjusted of $X.X a our segment, land $XX this business the Transportation compared quarter, guidance of was had adjusted For of of generator million to guidance Within EBITDA our our compared million. cash segment, $X.X third largest revised which $X.X

primarily for business due in reduction our land forecasted adjusted to miss the miles to was X% in EBITDA compared driven. transportation forecast The an

the customers. year, due slowing is We the the While economy. industrial quarter U.S. load down had demand weakening third long-haul a our our low count the primarily specialty from believe this count of to due was strongest daily to

economic will the As from base, we a fourth outlook, quarter million. specialty negatively have which for for impact weakened industrial transportation our land believe the the of we requirements lowered $X.X guidance by result transportation customer

million. Marine had Our Transportation EBITDA to of business million $X.X guidance $X.X adjusted compared of

our Compared in quarter, demand do we barge inland missed in market. the increased over third the strength continued While guidance to see day X market daily second we the quarter, in rates both X%. barge and tow rate inland average

a performance as forecast third overall However, rate. is dry for inland negatively went one fleet tow was into our lengthy tows the impacting utilization decrease shipyard of at This quarter dock. in currently now compared day working inland improved our a to an

impact The charge negative was to Transportation's third a other quarter SG&A. to onetime unallocated Marine performance

fourth Marine end of guidance Transportation. we the comfortable Looking quarter existing toward our with the for feel year,

segment Storage in second quarter of $X.X compared guidance was EBITDA million Our the to flow and million. Terminalling had which cash third generator strongest adjusted our of $X.X

had some We expenses onetime of total which compared revenue increase X% to in charges. slight guidance and a a X% were decrease

third largest had EBITDA the segment, discuss third would $X.X performance we generator adjusted segment, In Now our was flow Specialty guidance to $X.X cash million. I quarter. like to million business of compared the our Products which this of of in

guidance, Lubricant quarter While met groups their million. NGL Packaged our our quarter third businesses by our combined and Grease $X.X exceed propane combined to third guidance and

lines margins exceeded both both grease business our Our for but approximated sales volume for packaged lubricants forecast. and forecast

basis margins on a pound exceeded margin by XX%. on XX% forecast exceeded and Our our a grease per per packaged lubricant basis forecast gallon by

our This discuss $X.X EBITDA to segment million. like $X.X had of compared segment. Services of to Finally, adjusted I guidance million Sulfur would

Our had $X.X as we $X.X exceeding million, quarter. EBITDA had million, guidance forecasted by quarter third adjusted of fertilizer group a breakeven

Our we liquid unforecasted overall South sales market. exceeded the export to by fertilizer had American forecast fertilizer XX% volume as sales

dispersal which also the to markets had We base decline pricing to customer liquid floored Also feedstock to to profitability. our to the improved at for of in manufacturing dispersal. began fertilizer the utilization also improve it dispersal sales prices, unforecasted primary third had in the sulfur in sales allowed pressure due upward our unforecasted by having and us U.S. dispersal plants, perceive X continued as quarter, commodity contributed

EBITDA had exceeded million, of million. side by adjusted The our Services sulfur which $X.X Sulfur guidance $X.X pure of segment

profitability We refinery continue our to line which greater continues this to see than from and with originally volumes strong suppliers, sulfur forecasted. support business production

we To to our strength third business offset in underperformance quarter, of the margin summarize, in degree certain by our in a had lines. businesses some fee-based

segments, Martin exceeded long-term combined in flow However, designed between basis, confirming guidance by spite is and overall, cash Midstream model business refinery restructured to flows. on our cash a services variability $X.X sustainable of certain deliver stable million, that

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

Sharon Taylor

Thank which second of September Total last and XXXX end quarter. XX million for $XXX increase $XXX senior of is in drawn you, $XXX.X notes the our matures Bob. $X.X an million total of revolver million long-term $XX.X lien million on million, XXXX, a from secured of consisted debt of that on outstanding due

semiannual was The for slight of expected interest quarter. to August quarter-over-quarter increase the was due our in notes related outstanding as payment the

trailing after end the in compliant the to Optimization exit bank business. to XX-month the of was an of reduction compared effect XX. at total on Butane the Our X.XXx quarter June X.XXx giving increase X.XXx by EBITDA A leverage our driven

financial our out ratios. Rounding

end X.Xx. was approximately the coverage $XX in and facility First and the partnership the credit lien at covenants with of was quarter. Liquidity was revolving leverage under X.XXx was interest million, all the compliance

capitalized Now and rest the spending that on for how the of let's quarter projects focus during XXXX.

$X.X million. our of expenditures quarter slight forecast Maintenance for increase the capital $X.X a million, were from

the million, repairs which of be Port $XX.X Shore-based to related increase the forecasting an guidance. Bulkhead segment The the million now total Arthur and the dock our Galveston this increase on from CapEx the is is maintenance of fourth in within to for are bringing $X.X We to year $X.X structure. majority our million to quarter,

$XX.X was Tower, the the total. XXXX Growth for expenditures related will million $X.X to provide quarterly Oleum feedstock for to venture quarter which was million the Oleum Capital than $X.X the $X.X budget Semichem or million was related of Tower less forecasted. the CapEx joint The million. original to DSM

the are $X.X of now the XXXX. quarter of for we of to the spend forecasting construction more weighted first in year heavily months as total million However, now the costs latter are a only project

XXXX growth for we now million. CapEx expect compared total is approximately reduced guidance forecast million be our as spend XXXX $XX.X the to of to Accordingly, $XX.X

the were $X.X through forecasted $X an third for For clarity, gross year-to-date million million, the fourth quarter. additional CapEx quarter with expenditures

cash Distributable adjusted million. cash flow $X was million for free flow the $X.X and quarter was

$XXX.X XXXX to unchanged at million giving remains exit business. guidance after butane the Finally, of the EBITDA effect

We have adjusted down same. million, fourth Land quarter remain approximately all division the segments guidance other the Transportation by but for $X

on guidance the earnings along business X For with please earnings website. of presentation and by evening quarter full line, our the available our summary refer yesterday Slide third released to

for remarks, I'll turn to Q&A. so concludes the operator prepared This the back my call

Operator

[Operator & Instructions] May from We'll Company. from Sidoti our take question Kyle first

Kyle May

adjustments kind when expand could made just for you business know thinking you the mentioned if the I could potentially some fourth in maybe mileage wondering around. And segment you're Transportation you've turn and the aspect quarter, that of lower for already of quarter. but then about on the Bob, how this it

Robert Bondurant

Yes.

highest was in the So was our average total per load made big picture, count comments, the quarter. my as day in I

load is it from longer down. term So because scenario around slowdown what the a had happening. How mean? chemical mileage hauling a up? . A the lot economic long kind shorter count in because industry, business, from down from cetera, coming just And is refinery et demand haul we've your the the that of does is shift the when bases, is to your lubricant demand some of

you it, that's hauls, you when shorter think expensive. So about as more run

rate longer-term to he's even You've driver got get He's shorter a to employed. higher pay got haul. versus paid keep though running a

piece that's of So one it.

of frequency repair have as hauls, over related time, short you maintenance to is piece more Another that. the and

picture, long bigger does probably it for what So haul you a higher if a has shorter a rate mile will, haul. versus cost operating

the So plays into kind equation. all of that

this October. into seen in the Holland, in late quarter Chemical a So little third a to when our pickup We've bit going over turn around? and is it's carried

boding that's well increase to going for hopefully, us. to So also try We're customer base. our

of traders We utilization. that have chemical a need a have fleet be higher -- to

base, customer So try and will. chemical expand if -- our going you we're base to

late instinct. but combined, I think trend quarter fourth economy to all along addition? U.S. the the overall, second probably, first it that quarter. we're slower quarter into Any see our a with So will probably That's going

Randall Tauscher

to year. aspect if the have business or trucking Randy. typically butane butane is and we'd in through propane business around have little is that our see in and Thanksgiving the business first quite lubricant just the and LPGs, -- and customers we beginning department and the an add bit But of but seasonality the I'd the fourth propane side, typically, a business we winter that a from kind first of quarter the This any chemical particularly long sustained a of normally from XQ the elevates the the improvement our see quarter. the our slowdown we time element Yes. for

Kyle May

prepared believe, comments. the ask release I semiconductor Talked about then And to delays facility. helpful. your mentioned That's in Great. Okay. of I the in also manufacturing some wanted about,

project Just on an the any current overall should kind development. status we delays completion? the wonder of give update you can expect if then of us in And

Randall Tauscher

This is Randy, again.

intended road XXXX. I a much second yes, the from will the our quarter of mean, project it to first in little of customers absolutely OEM expect late completion. -- . down XXXX be our about a we delays our now into that talking announcing the plant, to So then, kicked demand plant the And slight And answer their are bit when of delay XXXX. is quarter likely I'm

Operator

Akyol Instructions] with [Operator Selman to Stifel. go We'll next

Unknown Analyst

in This is Beaumont. ] potential Previously, guys you around [ some Tim highlighted projects and for Selman. had on

could of the those of you what Just and wondering expand projects? if seeing kind on are projects you potentially guys scale

Randall Tauscher

Yes.

be So the to us would what purity deal. projects similar you very to our scale on high those saw of

-- not we that we're our we're to discussed tens So would of dollars be couple project that of contribution the millions had talking previously. a of

the managed inability deferred of carbon get The those projects X their to the has have capture Now down on side. been slowed case. in because project

So we're there's else but this time. on to I'd more to talking there's nothing at report still people, and that, come -- to say

Unknown Analyst

have OpEx quarter? one a And time, Is for any for obviously, that we much you segments. way SG&A Got flow. was also the you impact cash how it. mentioned XQ your and should guys quantify were step-up in couple some see they guys to of there And onetime since cost within a

Sharon Taylor

the about group. expenses talking I are in the onetime Marine So clarify to want first, we

Unknown Analyst

Correct. And also then expenses I guys think and Storage. thought -- mentioned some you I Terminalling was had some there within

Sharon Taylor

in in have we -- are management and is related units of what phantom some both to the July. that we some group, gave Marine out So in those to Terminalling

tranches couple tranche to and books, already point the made our employees on of a in And July. June, the unit we to come So happened we of in then where down had we a -- those June. an had things another in adjustment X price issued

so in quarter. came the And tranche, that the on third

additional And had a quarter. so and the you third an you in SG&A at second the tranche look reduction costs, those when quarter in

those of that's some So differences there.

Unknown Analyst

in guys' And business it. could last the just sense. you one down wondering for give your Florida, if Got me is update an in Makes on Tampa. then

Randall Tauscher

next The returns been a trucking winter And in well, area early would products trucking types around the and continued anticipate for getting and Tampa will throughout for us. next Tampa lot we be of this the of Yes. for to phosphate our there good we We're of business, us that's see that do the there. summer be business a growth in strong. business and need has rest spring quite that moving and

Operator

this there And Bob remarks. turn further the at are for would to no conference I Bondurant time. closing questions to like over

Robert Bondurant

Audra. you, Thank

flows, to strengthen balance continues beating pleased by to goal below get sheet million guidance the results, over stable closer with third are us cash little diversified $X continue leverage to allowing refinery our of services our and as to return our a model X.XXx. quarter We .

cash delayed America Samsung alliance flows start-up our Dongjin plant. asset the existing During the fuel with call, and C&T growth base expanding strategic we discussed we to grow remain both positive the and capital ELSA Even delay, the and low USA, with about of Inc. the with revenue requirements.

say want we by that unimaginable at Martin, on here ongoing attacks Finally, I conflict the are human the suffering. to saddened recent and Israel,

for pray impacted call. us Good family shortly. and hearts and person That these we Our out horrific our for events, to the day. every concludes resolution go time. by to Thanks joining complex

Operator

conference call. conclude does for your participation. that Thank you today's And

disconnect. may now You

Martin Midstream Partners (MMLP) 19 Oct 232023 Q3 Earnings call transcript