Martin Midstream Partners Reports Second Quarter 2024 Financial Results and Declares Quarterly Cash Distribution

• Net income of $3.8 million and $7.1 million for the three and six months ended June 30, 2024, respectively
• Adjusted EBITDA of $31.7 million and $62.1 million for the three and six months ended June 30, 2024, respectively
• Total adjusted leverage of 3.88 times as of June 30, 2024
• Declares quarterly cash dividend of $0.005 per common unit

KILGORE, Texas–(BUSINESS WIRE)–Martin Midstream Partners L.P. (Nasdaq: MMLP) (“MMLP” or the “Partnership”) today announced its financial results for the second quarter of 2024.

Bob Bondurant, President and Chief Executive Officer of Martin Midstream GP LLC, the general partner of the Partnership, stated, “For the second quarter of 2024, the Partnership exceeded guidance by $0.5 million with adjusted EBITDA of $31.7 million compared to guidance of $31.2 million. Within our Transportation Services segment the land division continued to outperform projections assisted by higher than forecasted mileage along with lower maintenance expense. The marine division, however, was negatively impacted by a casualty loss reserve of $0.5 million from a bridge allision that occurred in May. The marine division also experienced lower fleet utilization this quarter as a result of both the allision and extended time of equipment in dry dock for regulatory inspection compared to forecasted duration.”

“The Sulfur Services segment results were above guidance as the division benefited from strong fertilizer margins and high sulfur production from the Gulf Coast refineries. Results in the Specialty Products segment were in line with guidance as strength in our grease division offset underperformance by the packaged lubricants business. Finally, the Terminalling and Storage segment results were below guidance as a direct result of a $1.5 million casualty loss reserve related to the previously announced crude oil spill from a crude pipeline that connects our Sandyland Terminal to the Smackover refinery.”

SECOND QUARTER 2024 OPERATING RESULTS BY BUSINESS SEGMENT

	Operating Income (Loss) ($M)								Adjusted EBITDA, After Giving Effect to the Exit of the Butane Optimization Business ($M)								Adjusted EBITDA ($M)
	Three Months Ended June 30,
		2024				2023				2024				2023				2024				2023
	(Amounts may not add or recalculate due to rounding)
Business Segment:
Terminalling and Storage	$	3.3			$	4.4			$	8.0			$	9.6			$	8.0			$	9.6
Transportation		8.0				9.0				11.2				12.1				11.2				12.1
Sulfur Services		7.5				5.3				10.6				8.0				10.6				8.0
Specialty Products		4.9				2.5				5.7				5.9				5.7				(0.4	)
Unallocated Selling, General and Administrative Expense		(3.8	)			(3.9	)			(3.8	)			(3.9	)			(3.8	)			(3.9	)
	$	19.9			$	17.3			$	31.7			$	31.8			$	31.7			$	25.5

Terminalling and storage adjusted EBITDA decreased $1.6 million, primarily reflecting the $1.5 million casualty loss reserve related to the crude oil spill from a crude pipeline that connects our Sandyland Terminal to the Smackover refinery. This casualty loss reserve was coupled with higher employee-related expenses across our divisions, offset by increased throughput in our shore-based terminals and underground NGL storage divisions.

Transportation adjusted EBITDA decreased $0.9 million, reflecting higher expenses in our marine division related to a casualty loss reserve of $0.5 million stemming from a bridge allision that occurred in May. This was coupled with lower fleet utilization as a result of both the allision and an acceleration of equipment into dry dock for regulatory inspection. Our marine division was positively impacted during the quarter by higher day rates. The land division experienced increased operating expenses, offset by increased mileage and transportation rates.

Sulfur services adjusted EBITDA increased $2.6 million, primarily reflecting increased fertilizer margins and high sulfur production from the Gulf Coast refineries.

Specialty products adjusted EBITDA, after giving effect to the exit of the butane optimization business, decreased $0.2 million, reflecting decreased margins in our NGL marketing business, offset by higher margins in our grease division.

Unallocated selling, general, and administrative expense decreased $0.1 million, reflecting reduced overhead expenses allocated from Martin Resource Management.

CAPITALIZATION

	June 30, 2024			December 31, 2023
	($ in millions)
Debt Outstanding:
Revolving Credit Facility, Due February 2027 1	$	58.0		$	42.5
Finance lease obligations		0.1			—
11.50% Senior Secured Notes, Due February 2028		400.0			400.0
Total Debt Outstanding:	$	458.1		$	442.5
Summary Credit Metrics:
Revolving Credit Facility – Total Capacity	$	150.0		$	175.0
Revolving Credit Facility – Available Liquidity	$	82.9		$	109.0
Total Adjusted Leverage Ratio 2	3.88x			3.75x
Senior Leverage Ratio 2	0.49x			0.36x
Interest Coverage Ratio 2	2.24x			2.19x
1 The Partnership was in compliance with all debt covenants as of June 30, 2024 and December 31, 2023.
2 As calculated under the Partnership’s revolving credit facility.

RESULTS OF OPERATIONS SUMMARY

(in millions, except per unit amounts)

Period		Net Income			Net Income Per Unit			Adjusted EBITDA			Adjusted EBITDA, After Giving Effect to the Exit of the Butane Optimization Business			Net Cash Provided by Operating Activities			Distributable Cash Flow			Revenues
Three Months Ended June 30, 2024		$	3.8		$	0.09		$	31.7		$	31.7		$	11.8		$	9.5		$	184.5
Three Months Ended June 30, 2023		$	1.1		$	0.03		$	25.5		$	31.8		$	49.5		$	9.7		$	195.6

EBITDA, adjusted EBITDA, distributable cash flow and adjusted free cash flow are non-GAAP financial measures which are explained in greater detail below under the heading “Use of Non-GAAP Financial Information.” The Partnership has also included below a table entitled “Reconciliation of EBITDA, Adjusted EBITDA, Distributable Cash Flow and Adjusted Free Cash Flow” in order to show the components of these non-GAAP financial measures and their reconciliation to the most comparable GAAP measurement.

An attachment included in the Current Report on Form 8-K to which this announcement is included contains a comparison of the Partnership’s adjusted EBITDA for the second quarter 2024 to the Partnership’s adjusted EBITDA guidance for the second quarter 2024.

QUARTERLY CASH DISTRIBUTION

The Partnership has declared a quarterly cash distribution of $0.005 per unit for the quarter ended June 30, 2024. The distribution is payable on August 14, 2024 to common unitholders of record as of the close of business on August 7, 2024. The ex-dividend date for the cash distribution is August 7, 2024.

Qualified Notice to Nominees

This release is intended to serve as qualified notice under Treasury Regulation Section 1.1446-4(b)(4) and (d). Brokers and nominees should treat one hundred percent (100%) of MMLP’s distributions to non-U.S. investors as being attributable to income that is effectively connected with a United States trade or business. Accordingly, MMLP’s distributions to non-U.S. investors are subject to federal income tax withholding at the highest applicable effective tax rate. For purposes of Treasury Regulation section 1.1446(f)-4(c)(2)(iii), brokers and nominees should treat one hundred percent (100%) of the distributions as being in excess of cumulative net income for purposes of determining the amount to withhold. Nominees, and not Martin Midstream Partners L.P., are treated as withholding agents responsible for any necessary withholding on amounts received by them on behalf of foreign investors.

Investors’ Conference Call

Date: Thursday, July 18, 2024

Time: 8:00 a.m. CT (please dial in by 7:55 a.m.)

Dial In #: (888) 330-2384

Conference ID: 8536096

Replay Dial In # (800) 770-2030 – Conference ID: 8536096

A webcast of the conference call along with the Second Quarter 2024 Earnings Summary will also be available by visiting the Events and Presentations section under Investor Relations on our website at www.MMLP.com.

About Martin Midstream Partners

Martin Midstream Partners LP, headquartered in Kilgore, Texas, is a publicly traded limited partnership with a diverse set of operations focused primarily in the Gulf Coast region of the United States. MMLP’s primary business lines include: (1) terminalling, processing, and storage services for petroleum products and by-products; (2) land and marine transportation services for petroleum products and by-products, chemicals, and specialty products; (3) sulfur and sulfur-based products processing, manufacturing, marketing and distribution; and (4) marketing, distribution, and transportation services for natural gas liquids and blending and packaging services for specialty lubricants and grease. To learn more, visit www.MMLP.com. Follow Martin Midstream Partners L.P. on LinkedIn, Facebook, and X (formerly known as Twitter).

Forward-Looking Statements

Statements about the Partnership’s outlook and all other statements in this release other than historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements and all references to financial estimates rely on a number of assumptions concerning future events and are subject to a number of uncertainties, including (i) the effects of the continued volatility of commodity prices and the related macroeconomic and political environment and (ii) other factors, many of which are outside its control, which could cause actual results to differ materially from such statements. While the Partnership believes that the assumptions concerning future events are reasonable, it cautions that there are inherent difficulties in anticipating or predicting certain important factors. A discussion of these factors, including risks and uncertainties, is set forth in the Partnership’s annual and quarterly reports filed from time to time with the Securities and Exchange Commission (the “SEC”). The Partnership disclaims any intention or obligation to revise any forward-looking statements, including financial estimates, whether as a result of new information, future events, or otherwise except where required to do so by law.

Use of Non-GAAP Financial Information

To assist management in assessing our business, we use the following non-GAAP financial measures: earnings before interest, taxes, and depreciation and amortization (“EBITDA”), adjusted EBITDA (as defined below), distributable cash flow available to common unitholders (“distributable cash flow”), and free cash flow after growth capital expenditures and principal payments under finance lease obligations (“adjusted free cash flow”). Our management uses a variety of financial and operational measurements other than our financial statements prepared in accordance with U.S. GAAP to analyze our performance.

Certain items excluded from EBITDA and adjusted EBITDA are significant components in understanding and assessing an entity’s financial performance, such as cost of capital and historical costs of depreciable assets.

EBITDA and adjusted EBITDA. We define adjusted EBITDA as EBITDA before unit-based compensation expenses, gains and losses on the disposition of property, plant and equipment, impairment and other similar non-cash adjustments. Adjusted EBITDA is used as a supplemental performance and liquidity measure by our management and by external users of our financial statements, such as investors, commercial banks, research analysts, and others, to assess:

• the financial performance of our assets without regard to financing methods, capital structure, or historical cost basis;
• the ability of our assets to generate cash sufficient to pay interest costs, support our indebtedness, and make cash distributions to our unitholders; and
• our operating performance and return on capital as compared to those of other companies in the midstream energy sector, without regard to financing methods or capital structure.

The GAAP measures most directly comparable to adjusted EBITDA are net income (loss) and net cash provided by (used in) operating activities. Adjusted EBITDA should not be considered an alternative to, or more meaningful than, net income (loss), operating income (loss), net cash provided by (used in) operating activities, or any other measure of financial performance presented in accordance with GAAP. Adjusted EBITDA may not be comparable to similarly titled measures of other companies because other companies may not calculate adjusted EBITDA in the same manner.

Adjusted EBITDA does not include interest expense, income tax expense, and depreciation and amortization. Because we have borrowed money to finance our operations, interest expense is a necessary element of our costs and our ability to generate cash available for distribution. Because we have capital assets, depreciation and amortization are also necessary elements of our costs. Therefore, any measures that exclude these elements have material limitations. To compensate for these limitations, we believe that it is important to consider net income (loss) and net cash provided by (used in) operating activities as determined under GAAP, as well as adjusted EBITDA, to evaluate our overall performance.

Distributable cash flow and adjusted free cash flow. We define distributable cash flow as net cash provided by (used in) operating activities less cash received (plus cash paid) for closed commodity derivative positions included in Accumulated Other Comprehensive Income (Loss), plus changes in operating assets and liabilities which (provided) used cash, less maintenance capital expenditures and plant turnaround costs. Distributable cash flow is a significant performance measure used by our management and by external users of our financial statements, such as investors, commercial banks and research analysts, to compare basic cash flows generated by us to the cash distributions we expect to pay unitholders. Distributable cash flow is also an important financial measure for our unitholders since it serves as an indicator of our success in providing a cash return on investment. Specifically, this financial measure indicates to investors whether or not we are generating cash flow at a level that can sustain or support an increase in our quarterly distribution rates. Distributable cash flow is also a quantitative standard used throughout the investment community with respect to publicly-traded partnerships because the value of a unit of such an entity is generally determined by the unit’s yield, which in turn is based on the amount of cash distributions the entity pays to a unitholder.

We define adjusted free cash flow as distributable cash flow less growth capital expenditures and principal payments under finance lease obligations. Adjusted free cash flow is a significant performance measure used by our management and by external users of our financial statements and represents how much cash flow a business generates during a specified time period after accounting for all capital expenditures, including expenditures for growth and maintenance capital projects. We believe that adjusted free cash flow is important to investors, lenders, commercial banks and research analysts since it reflects the amount of cash available for reducing debt, investing in additional capital projects, paying distributions, and similar matters. Our calculation of adjusted free cash flow may or may not be comparable to similarly titled measures used by other entities.

The GAAP measure most directly comparable to distributable cash flow and adjusted free cash flow is net cash provided by (used in) operating activities. Distributable cash flow and adjusted free cash flow should not be considered alternatives to, or more meaningful than, net income (loss), operating income (loss), Net cash provided by (used in) operating activities, or any other measure of liquidity presented in accordance with GAAP. Distributable cash flow and adjusted free cash flow have important limitations because they exclude some items that affect net income (loss), operating income (loss), and net cash provided by (used in) operating activities. Distributable cash flow and adjusted free cash flow may not be comparable to similarly titled measures of other companies because other companies may not calculate these non-GAAP metrics in the same manner. To compensate for these limitations, we believe that it is important to consider net cash provided by (used in) operating activities determined under GAAP, as well as distributable cash flow and adjusted free cash flow, to evaluate our overall liquidity.

MMLP-F

MARTIN MIDSTREAM PARTNERS L.P. CONSOLIDATED AND CONDENSED BALANCE SHEETS (Dollars in thousands)
	June 30, 2024				December 31, 2023
	(Unaudited)				(Audited)
Assets
Cash	$	55			$	54
Accounts and other receivables, less allowance for doubtful accounts of $506 and $530, respectively		50,910				53,293
Inventories		41,597				43,822
Due from affiliates		22,151				7,924
Other current assets		10,284				9,220
Total current assets		124,997				114,313
Property, plant and equipment, at cost		939,570				918,786
Accumulated depreciation		(631,219	)			(612,993	)
Property, plant and equipment, net		308,351				305,793
Goodwill		16,671				16,671
Right-of-use assets		63,768				60,359
Investment in DSM Semichem LLC		7,938				—
Deferred income taxes, net		10,174				10,200
Other assets, net		3,179				2,039
Total assets	$	535,078			$	509,375
Liabilities and Partners’ Capital (Deficit)
Current installments of long-term debt and finance lease obligations	$	14			$	—
Trade and other accounts payable		51,874				51,653
Product exchange payables		—				426
Due to affiliates		3,269				6,334
Income taxes payable		1,374				652
Other accrued liabilities		42,178				41,499
Total current liabilities		98,709				100,564
Long-term debt, net		439,397				421,173
Finance lease obligations		62				—
Operating lease liabilities		47,187				45,684
Other long-term obligations		7,589				6,578
Total liabilities		592,944				573,999
Commitments and contingencies
Partners’ capital (deficit)		(57,866	)			(64,624	)
Total liabilities and partners’ capital (deficit)	$	535,078			$	509,375

MARTIN MIDSTREAM PARTNERS L.P. CONSOLIDATED AND CONDENSED STATEMENTS OF OPERATIONS (Unaudited) (Dollars in thousands, except per unit amounts)
	Three Months Ended								Six Months Ended
	June 30,								June 30,
		2024				2023				2024				2023
Revenues:
Terminalling and storage *	$	22,375			$	21,684			$	44,892			$	42,542
Transportation *		57,676				54,750				115,983				110,473
Sulfur services		3,477				3,357				6,954				6,715
Product sales: *
Specialty products		67,288				78,872				133,613				211,141
Sulfur services		33,715				36,973				63,919				69,294
		101,003				115,845				197,532				280,435
Total revenues		184,531				195,636				365,361				440,165
Costs and expenses:
Cost of products sold: (excluding depreciation and amortization)
Specialty products *		57,553				71,570				114,783				189,565
Sulfur services *		19,234				25,654				39,633				47,471
Terminalling and storage *		24				25				42				31
		76,811				97,249				154,458				237,067
Expenses:
Operating expenses *		65,358				60,737				129,292				123,482
Selling, general and administrative *		10,701				8,447				19,614				19,619
Depreciation and amortization		12,687				12,547				25,336				25,448
Total costs and expenses		165,557				178,980				328,700				405,616
Other operating income (loss), net		953				673				1,161				285
Operating income		19,927				17,329				37,822				34,834
Other income (expense):
Interest expense, net		(14,377	)			(15,263	)			(28,219	)			(30,920	)
Loss on extinguishment of debt		—				—				—				(5,121	)
Other, net		2				11				18				33
Total other expense		(14,375	)			(15,252	)			(28,201	)			(36,008	)
Net income (loss) before taxes		5,552				2,077				9,621				(1,174	)
Income tax expense		(1,772	)			(996	)			(2,568	)			(2,831	)
Net income (loss)		3,780				1,081				7,053				(4,005	)
Less general partner’s interest in net income (loss)		(76	)			(22	)			(141	)			80
Less income (loss) allocable to unvested restricted units		(16	)			(4	)			(28	)			12
Limited partners’ interest in net income (loss)	$	3,688			$	1,055			$	6,884			$	(3,913	)
Net income (loss) per unit attributable to limited partners – basic and diluted	$	0.09			$	0.03			$	0.18			$	(0.10	)
Weighted average limited partner units – basic		38,832,222				38,772,266				38,833,039				38,771,037
Weighted average limited partner units – diluted		38,891,375				38,777,600				38,872,192				38,771,037
*Related Party Transactions Shown Below

MARTIN MIDSTREAM PARTNERS L.P. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Dollars in thousands, except per unit amounts)
*Related Party Transactions Included Above
	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2024			2023			2024			2023
Revenues:*
Terminalling and storage	$	18,078		$	18,077		$	36,627		$	35,579
Transportation		8,318			7,277			16,919			12,788
Product Sales		123			7,497			252			8,422
Costs and expenses:*
Cost of products sold: (excluding depreciation and amortization)
Specialty products		8,368			7,918			14,941			17,428
Sulfur services		2,919			2,644			5,912			5,352
Terminalling and storage		24			25			42			31
Expenses:
Operating expenses		26,501			25,058			52,924			48,885
Selling, general and administrative		8,638			6,556			15,501			15,072

MARTIN MIDSTREAM PARTNERS L.P. CONSOLIDATED AND CONDENSED STATEMENTS OF CAPITAL (DEFICIT) (Unaudited) (Dollars in thousands)
		Partners’ Capital (Deficit)
		Common Limited						General Partner Amount
		Units		Amount								Total
Balances – March 31, 2024		39,001,086		$	(63,115	)		$	1,619			$	(61,496	)
Net income		—			3,704				76				3,780
Cash distributions		—			(195	)			(4	)			(199	)
Unit-based compensation		—			49				—				49
Balances – June 30, 2024		39,001,086			(59,557	)			1,691				(57,866	)
Balances – December 31, 2023		38,914,806		$	(66,182	)		$	1,558			$	(64,624	)
Net income		—			6,912				141				7,053
Issuance of restricted units		86,280			—				—				—
Cash distributions		—			(390	)			(8	)			(398	)
Unit-based compensation		—			103				—				103
Balances – June 30, 2024		39,001,086		$	(59,557	)		$	1,691			$	(57,866	)

		Partners’ Capital (Deficit)
		Common Limited						General Partner Amount
		Units		Amount								Total
Balances – March 31, 2023		38,914,806		$	(66,236	)		$	1,559			$	(64,677	)
Net income		—			1,059				22				1,081
Cash distributions		—			(195	)			(4	)			(199	)
Unit-based compensation		—			38				—				38
Balances – June 30, 2023		38,914,806			(65,334	)			1,577				(63,757	)
Balances – December 31, 2022		38,850,750		$	(61,110	)		$	1,665			$	(59,445	)
Net loss		—			(3,925	)			(80	)			(4,005	)
Issuance of restricted units		64,056			—				—				—
Cash distributions		—			(389	)			(8	)			(397	)
Unit-based compensation		—			90				—				90
Balances – June 30, 2023		38,914,806		$	(65,334	)		$	1,577			$	(63,757	)

MARTIN MIDSTREAM PARTNERS L.P. CONSOLIDATED AND CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in thousands)
	Six Months Ended
	June 30,
		2024				2023
Cash flows from operating activities:
Net income (loss)	$	7,053			$	(4,005	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		25,336				25,448
Amortization of deferred debt issuance costs		1,539				2,435
Amortization of debt discount		1,200				1,000
Deferred income tax expense		26				1,867
Gain on disposition or sale of property, plant and equipment, net		(1,161	)			(285	)
Loss on extinguishment of debt		—				5,121
Non cash unit-based compensation		103				90
Change in current assets and liabilities, excluding effects of acquisitions and dispositions:
Accounts and other receivables		2,383				22,619
Inventories		2,031				58,933
Due from affiliates		(14,227	)			5,654
Other current assets		174				5,296
Trade and other accounts payable		523				(19,459	)
Product exchange payables		(426	)			278
Due to affiliates		(3,065	)			(6,641	)
Income taxes payable		722				(215	)
Other accrued liabilities		(1,196	)			1,907
Change in other non-current assets and liabilities		922				(1,269	)
Net cash provided by operating activities		21,937				98,774
Cash flows from investing activities:
Payments for property, plant and equipment		(24,194	)			(17,024	)
Payments for plant turnaround costs		(6,705	)			(661	)
Investment in DSM Semichem LLC		(6,938	)			—
Proceeds from sale of property, plant and equipment		738				4,275
Net cash used in investing activities		(37,099	)			(13,410	)
Cash flows from financing activities:
Payments of long-term debt		(113,000	)			(519,197	)
Payments under finance lease obligations		(1	)			(9	)
Proceeds from long-term debt		128,577				448,489
Payment of debt issuance costs		(15	)			(14,238	)
Cash distributions paid		(398	)			(397	)
Net cash provided by (used in) financing activities		15,163				(85,352	)
Net increase in cash		1				12
Cash at beginning of period		54				45
Cash at end of period	$	55			$	57
Non-cash additions to property, plant and equipment	$	2,641			$	1,679
Non-cash contribution of land to DSM Semichem LLC	$	1,000			$	—

Contacts

Sharon Taylor – Executive Vice President & Chief Financial Officer

(877) 256-6644

investor.relations@mmlp.com

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