MMLP - Earnings call 4 2023 | Martin Midstream Partners L.P.

Due to licensing restrictions, you must log in to view earnings call transcripts.

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 fourth quarter earnings conference call. Today's conference is being recorded. [Operator Instructions] At this time, I'd like to turn the conference over to Sharon Taylor, Chief Financial Officer. ahead. go Please

Sharon Taylor

Cavin, And joining operator. Bondurant, everyone, thank and and Randy our begin Thank statement. cautionary today. good In for Danny Controller; Cannon, us COO; Bob of the you FP&A. I'll Tauscher, with you, David morning, Director room CEO; are

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

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

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

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

I over to and fourth quarter to year turn call results. Now discuss full Bob the will

Robert Bondurant

Inc. February oleum revolving Plainview, execution Sharon. underground plant our XXXX, in facility Also significant will In significant we electronic-level and maturity supplier in now ELSA, I associated phase begin is be is component venture Partners while us, Dongjin the to The commonly America, currently at of facilities discussion acid, XXXX, DSM achievements credit business quarter known its a storage XXXX. venture USA. The joint the oleum acid between provide At leverage our meeting joint notes, X.XXx. I of that of February business the to for flow Samsung XXXX game executive Louisiana Texas our retaining sulfuric in and of to Thanks, of to sulfuric venture. began manufacturing in volatile construction executing team we to recap as in our our our This the workforce Midstream would semiconductor C&T joint XXXX. In our Martin to and cash targeted the acknowledge order construction and industry. order optimization final North in achieve time, our the Semichem to of to goals. had achievement assets. with like with the leadership, disclosed was segment XXXX. also we XXXX ratio existing from stable and guidance refinanced Midstream amended like EBITDA February, tower entire second we completed of their exit we thank the exceeding the our plan butane my in of secured would of these Martin extending maturity same the extended the leadership

our fourth focus on like would I operating performance. Now to quarter

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

guidance we had $XXX.X of adjusted million, the of beginning-of-the-year year, our exceeding For million. $XXX.X EBITDA

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

a revenue as our see During the our to greater in began fourth recovery quarter, per was than loads. forecasted we load longer-distance

equipment reduced costs of offset this be lease will equipment a the new The repair recapitalization leased costs. which lower continue increase and reduction maintenance repair we over be the average see expense, fleet our of maintenance to as began in effect equipment longer our age by with partially our of to also to fleet purchases. term We equipment and will our

our newer will believe equipment driver retention. also help We

million. our These $X of carrier. These $X.X were loss of the marine EBITDA guidance insurance $X.X our was of result statement. result performance the carrier performance. transportation for industry losses. the indemnity overall were loss EBITDA to due charge and adjusted was to of were but losses supplemental a this losses by marine quarter to business This totaling global from Midstream's Martin underwriting their insurance not reason P&I incurred Our the protection supplemental compared revised hitting calls transportation related The costs had marine primary onetime million income miss entire million to fourth due

was in generator this $X throughput missed Overall, offset Terminalling compared by in EBITDA flow adjusted to X% Storage when quarter fourth lower operating of and costs quarter as Our which to the utility our guidance. a in reduction second had X% which the segment, were forecast same segment, our strongest cash guidance. from by revenue million, fourth primarily reduced due our slightly volumes, which expenses was

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

group had compared of of adjusted $X to fertilizer Our guidance $X.X EBITDA million million.

million. sulfur allowing EBITDA from $X.X to for have production pure adjusted to degradable offset financial fertilizer side sulfur sales exceed was guidance of fourth to We of forecast quarter This this Sulfur to sulfur was liquid very line partially quarter suppliers refinery compared its received are sulfur believe being delayed forecast, by million than the $X volume ammonium quarter, reduced first products. we our for the greater to our the sales sales positive both stronger in which XX% forecast experienced quarter. forecast sulfate strong and as our Services We fourth business segment quarter. The fourth of compared performance compared had total

and quarter In business million. segment, slight the $X.X In this partially The guidance bulk of fourth business. To in marine Products of our our $X.X in our business in we of lubricant the by we our our from Finally, strength packaged Services adjusted by had like summarize $X.X EBITDA came line performance, insurance exceeded discuss our of segment. by segment, charge to Sulfur compared guidance quarter underperformance performance this outperformance business. offset offset of land our transportation had I onetime to our we transportation line, fourth would revised million grease a segment, Specialty million.

Now back our turn and I'd guidance with to XXXX balance the to capital along resources. call Sharon sheet discuss over our like to

Sharon Taylor

you, Bob. Thank

under credit leaving the million slight of with partnership year-over-year. XX, credit on covenant. had long-term December $XXX compared XXXX, XXXX, of of our a million facility, under to ratio $XX.X million was this As outstanding after due leverage of XX, a $XXX facility outstanding in our debt the December consideration million reduction balance, $XXX.X drawn total $XXX.X $XX.X availability and million letters us million to Of constraint

years, targeted For cash has reduction, order on partnership lower. flow ratio focused X.XXx or the strengthening noncore sheet reach our through last the divesting few debt to of leverage in the and assets balance using free

adjusted to goal spoke we after bank-compliant as business, our for as met XX. optimization was Bob As of losses adjusting related earlier, butane December that the X.XXx the to of leverage exit

or At in X.XXx However, at regarding target we a leverage that compliance knowledge below we and our coverage with covenants, otherwise, forecasted Also, on debt and and sustainable to X.XXx. capital so. that was at ensure interest December remain remain guide that know the was we is still to do have year-end, our allocation. will basis, or work was partnership decisions our to to senior all continue XX,

Total including million, in which joint $X.X which $X.X of at to as million quarter was the includes $X.X turnaround plant. our $XX $X.X Total $X.X fertilizer our the CapEx for CapEx, year million, CapEx growth, related of plant. $XX.X a $XX.X CapEx of including DSM at project. also $XX.X the was the for referred million the was costs project which Moving and million capital expenditures. fertilizer $X.X to related was quarter costs million, was ELSA to on total including million ELSA venture, turnaround million for to for Semichem Maintenance growth, million for the maintenance was million

associated butane million For free cash the Both distributable adjusted free was flow losses for bringing with distributable business. $XX.X the cash presented to the after numbers for cash quarter, and year $X.X million $XX.X $X.X million, adjusting adjusted optimization of flow cash was to flow million. flow those and

like also on afternoon release fixed our $XXX.X approximately to is is for adjusted provided of XXXX, attached for found the Page partnership in being XX% presentation guidance our I'd can by forecasting website. The fee Now yesterday million which to XXXX. total, Of with X press EBITDA earnings is walk XX% and be contracts through on our the margin-based.

of In of to Now $XX.X we let's look anticipate in actual as million each XXXX. compared XXXX, $XX.X transportation segment at generate individually. results adjusted to services EBITDA million

in by is somewhat While to we fees XXXX's reduced in the fertilizer $XX.X with with side environment will lease Terminalling this rate to business Sulfur the we've an results expense, of and from flat, the of reservation projected to segment of is EBITDA which the and the group in EBITDA that, relatively volumes. are businesses by to approximately results. this Services adjusted margins, compared ELSA year the actual improvement anticipate associated $XX.X in reductions improve continue repairs Services The will the benefit escalators looks year, we project. see should expenses, $XX.X results be some for equipment higher offset sulfur EBITDA to decreased the quarter experience million year-over-year. The remain XXXX land contract $XXX,XXX forecast experienced expense. The day $X.X segment operational maintenance to while offset lower past anticipated segment for sales begin this higher million marine from to pure EBITDA fee-based are million. million, slightly higher new adjusted XXXX's in the with from projecting along Sulfur And Storage fourth forecasted is And is segment group

to to businesses in Products to million. within The XXXX's Specialty results of segment $XX.X forecasted the this EBITDA. are stable relatively actual million Lastly, generate projected adjusted $XX.X compared is remain as segment

related of $XX.X Maintenance project. capital plant, For is occurs of at of partnership's for $X which capital for our to Plainview, million costs some million the the the year, in expansion million million million oleum capital the approximately to years. forecasting in the have million number be contribution XXXX, Refinery equipment; for $X.X X at are fertilizer our approximately relating larger is marine joint turnaround inspections related which XX% is million $X.X every to is Also including plant partnership. We acid $XX regulatory Smackover ELSA growth for that included cash for $X.X the is our Plainview; our that and to do in average XX% for part with we growth spend where the $XX.X turnaround, the sulfuric at forecasted, anticipated ownership which expenditures tower in above expenditures venture.

be that, I million. With operator full $XX.X it flow for cash anticipate XXXX, to Finally, of distributable $XX.X for will flow year million the to we free turn cash Q&A. and back

Operator

Company. & Sidoti Instructions] to go at [Operator We'll first May Kyle

Kyle May

Maybe Terminalling the starting segment. and with Storage

that You the mentioned quarter. volumes lower fourth were in

can of and in if what some wondering then of about thinking maybe the Just provide how in 'XX. you those remainder context you're happened XQ XQ volumes and

Randall Tauscher

in the in and is the quarter month Randy, November. In stay a a XXXX, terminals, sales where of we shore-based XX business the January we agreed in volume the because This in improved specifically shortfall in Kyle. around seen December Thank to the first to matter have have you the beginning really all of XXXX, we've what shortfall that volumes for do question. most we the we fourth fact, where those month have low expect to of commitments through Yes. And contract quarter as have the had didn't of terminals, minimum X, that diesel October -- significantly. in days fourth improvement sales and came the we XXXX. new the of that

that we XXXX. -- So be yes, will into to business stable that be expect going

Kyle May

then a Sharon. And for maybe helpful. very That's question Great.

and got the about you've out if of could oleum thinking CapEx the million tower maybe us the with I the Because you've wondering we're got I contribution. $X.X As was help you cadence. XXXX, in kind know then

should about kind of we course how the So through of think that year? the

Sharon Taylor

second in quarter. in million actually million The first quarter we Yes. this the the year. $X.X -- be will spend $XX.X the spent of first and of the towards second should And the second quarters

Kyle May

Okay. helpful. And... That's Great.

Randall Tauscher

I'll on have completion that the $X.X the done that's the of. in ELSA the million that commitment plant slips this quarter, joint really to contingent second And to DSM be And throw $X.X that's the itself. Martin is slips, in Sorry, doesn't but million on that's Randy. something control extent also. that is the that, venture, of projected and

Kyle May

your we can do maybe insight Okay. on bit Got contribution a And you progression makes into Semichem, guidance, That ELSA of forward? it. showing how us little in think the DSM going maybe just sense. have project? the the quarter that but the about in Because give fourth more you that

Randall Tauscher

Yes.

everything Martin quarter, the the completion to EBITDA the oleum around is capital to So the to committed the due tower of fourth and you see commitments contribution project. build that the we've

the those the to get later the quarter, extent no second so payments fourth we're And than done us to in quarter. which we that begin expecting to,

And why have that so pinned we XQ. that's in the in,

reservation for the will receive from that's really that fee have So we DSM. --

Okay? And expect begin. amount will then paying primarily are the joint intended rest start anticipate we our begin of delaying when We customers do then it contribution just actual DSM line, very in projects. XQ the EBITDA venture the to a of down sales their from the sales small but because most the

their which until actually start so begin be raw projects And those securing sales those into won't materials, XXXX. should

Operator

at Akyol Stifel. Selman to next go We'll

Selman Akyol

on following DSM. up and just So ELSA

into forward So sales the fourth XXXX. start in and then roll quarter

lieu of where would the fee? of reservation think owe enter in a for Or run sort as should steady we paid services there into of as you You're million XXXX? Is $X getting them we any, this kind I rate of guess, reservation.

Randall Tauscher

expand bit more? connecting, a question so you time Can I your a apologize. little had I tough

Selman Akyol

worries, worries. Yes. no Okay. No

sort rate further there is of, million So ratable reservation roll -- we think volumes anything the there's catch-up? there of off into sort as go about still out? associated it, guided I $XXX,XXX forward you if that would it, reservation Is XQ if take is they or call a catch-up we to of payment. like there that to is run $XXX,XXX no with 'XX, get you I $X as any it So from And think do? when a reservation fee XXXX, a

Randall Tauscher

Okay. I Thank clearly you. understand now.

million, quarterly you You $X the -- on basis. said about talking when you were a

million going term And That the no yes, we So of agreement. a But some of yes, for we get going that a quarter reservation is costs forward. offset of there's $X have fee approximately course. of forward that, the catch-up.

Selman Akyol

point, there now the Is over have -- are was we right. But what of next there of expect the maybe And I that guys some get discussion of any at as of Or know planned I you. discussions then and moving we along. larger a customers you one is Got should about several to bit you sort kind go little this could what guys those are should just think continuing? right thought years?

Randall Tauscher

Yes.

if have at the do to at the from We that site, producing haven't new the plants we going discussions haven't had built production consumption you that any at growth any to an look types about of in like sure semiconductors the with that and for significant they're but getting formal oleum expansion had discussions ability standpoint going certainly this time. point fundamentals looks yet poised build, that. But we of the forward. any asset we're that's around And

Selman Akyol

then And just to Understood. back Transportation. pivoting

at there? any in really On everything that you all? guys marine or in spot at up discussions any the and rates, all? market Or the locking X-year still contracts around are doing Any

Randall Tauscher

those X our for XX units. those Yes. equipment, offshore of We've units. tows, length, we have a The up year locked only inland

X-month and going on some forward. arrangement. X- sort X have currently we to what of And that's anticipate contract on X We spot

and XX XX have contract arrangement, off We renewing nothing to coming at anticipate but tows within X next we of longer another to than the X- that. those X-month days,

Selman Akyol

Any Got give indications -- it. at line? a you in just you how Is you it do expect is higher can level, going on there? pricing And to be say that? can

Randall Tauscher

ago up a Pricing $X,XXX day has and to $X,XXX up been average. X A year $X,XXX went to last I on a about it's mean now, years good. year, ago day. it

contract our above are agreements agreements. spot Our

but a contract are I when up agreements bit renegotiated, yet. going little been to haven't they So negotiated those the are assume would move

Selman Akyol

did assume fairly that? guide Or there? And Got guys you your does then conservative guidance also you.

Randall Tauscher

guidance assumes our that. Yes,

Selman Akyol

for then the I everything flow. last And directed Sharon, just cash Okay. on will at be that just one if free me reductions. heard correctly, debt

at the $XX you're hopefully, little the so And million-plus less? year, of end a

Sharon Taylor

year, we which or cadence continue That X.XXx talked we about we're the to to this will we yes, revolver. And at are the the the expenditures that weighted still see Yes. see of consider in -- quarter-over-quarter trying But X.XXx. we our first are on of by our half we under free with state, end some to -- could leverage XXXX, below when the in interest our heavily that year, direct of notes, reducing to to the we capital do flow we're along the payments cash lift what ratio. year, is outstandings

Robert Bondurant

forecast be that capital. I'll slight working this comment, There impact smaller don't significant -- additional changes really is make, really that degree. up we or And is down, could number Bob, If some variability. working could to capital in a an which

Selman Akyol

have for guys ratio Got you. while. I know you chasing leverage been Yes, that a

congratulations on improvement. the So

Sharon Taylor

you. Thank

Robert Bondurant

Thanks.

Operator

next Fitzgerald at go Patrick to Baird. We'll

Patrick John Fitzgerald

provide $XX million that's little could you in going? on where a maintenance Yes. CapEx, more detail

like about if do is some maintenance that So bought how growth? tank that? Or replace trucks or old trucks, is that tank to think you new you

Randall Tauscher

So hit the her comments. bit Sharon think I maintenance CapEx -- little this in and a

have We this $XX million, were up. million past We which year. $XX about is almost

a to they our because -- to take X-barge have the XX our it, high XX% just out from in XX we fleet XX going our We this perspective, of so a dry-dock you MES you equipment -- of or going years. have equipment, we only which if XX have tows, pieces offshore year, marine at X-barge every tows of go number dry so equipment our our is very out look almost marine X of

Beaumont has you a have normal. every-other-year are very and would spend don't turnaround maintenance And equipment percentage annual. all the has plants refinery the then happen And dry-dock XX% the at theirs the We little to if of do. trucking new XXXX. marine the an trucking and have down the Plainview through is to one and CapEx. The of in equipment much flow and turnaround through add -- just fertilizer and the the than we there up, -- the the in larger fall on of replacement repairs for that's in business. then of $XX calculation. So million going very ATS turnarounds to that And Most maintenance We event. EBITDA

Robert Bondurant

And Bob. this is

Additional buy under lease. the is operating comment an the to in -- trucking do an is that effectively equipment we business

through it CapEx. maintenance i.e. really capital doesn't flow So investment,

Patrick John Fitzgerald

Yes. Okay.

But what's of Okay. side? terms like helpful -- talked wrong segment, is it forecast, how The would to I'm hardest essentially length -- with on the No, truck question Transportation -- And that is the just about the that's in previous the contract much you marine. segment that so color. that the the but maybe like of there. seem

like spot you pure much talk could that in that? So you about how versus contractual And of how forecast actually more just is like nature?

Randall Tauscher

of annualized on Most we for and transportation some the contracts the business, performance. -- relationships that is in business most Yes. land But do based of have example.

where that anticipating operate and we -- that transportation to other to last most business customers And And some so and probably, then you've yes, provide the our services is seen it because that the prepared their years difficult our it's them are our the plant's forecast several a trailers you're meeting newer way we expense. But of and bringing is having -- it so trucks types and reason key so they business we the to Land the it is we down in fertilizer, they of that the need the operating to we the had shipments into to building -- is to. forecast that so fleet anticipate operating services in of reinvestment that because up are can handle. also -- newer is correct. our key has than hit

Robert Bondurant

run from month macro per as is far number And very of I'll forecasting, or this a we level consistent year. a as per Bob miles say again.

you ticking point been fundamental the revenue in the estimate mile, your up inflationary times which per is in that's mileage, so these your And forecast you estimate time. starting over has

beginning our base fundamental and of So customers. with consistency we provide that's our performance service our the place: our because knowing strong customer

Operator

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

Robert Bondurant

ELSA further comments project. conclude thank call joint DSM Well, on I'll Audra. Semichem the with the venture you, or

the into existing improved strategy current have leverage for expanding services growth you has flow and lies concentrated the As an a within on requirements we Even a the strategic creating due debt capital as utilizes our and core material facilities the expansion, is reduction for We investor and strategy. This for for morning. cash a the an few ELSA exciting partnership The the availability, in assets speaking on project call. our construction decade again industry on assets. of to with years, low is result Dongjin point look to that this next around base our and told growth revenue ELSA labor the as you. with past provides growth. and to delays customers partnership an of alliances that and existing joining you opportunity poised Plainview project of our with investors. Thanks Samsung our in for our entry alliance Thank forward focus call and quarterly

Operator

conference today's participation. for concludes Thank this And call. you your

You disconnect. now may

Martin Midstream Partners (MMLP) 15 Feb 242023 Q4 Earnings call transcript