• Full year 2020 financial performance meets low end of guidance range despite challenges of COVID-19
• Reported net loss of $2.6 million and $6.8 million for the fourth quarter and year ended December 31, 2020, respectively
• Reported adjusted EBITDA of $17.4 million and $94.9 million for the fourth quarter and year ended December 31, 2020, respectively
• Generated distributable cash flow of $0.8 million and $39.7 million for the fourth quarter and year ended December 31, 2020, respectively
• Releases 2021 Financial Guidance

KILGORE, Texas--(BUSINESS WIRE)--Martin Midstream Partners L.P. (Nasdaq:MMLP) (the "Partnership") today announced its financial results for the three months and year ended December 31, 2020.

"We entered 2020 with a confident outlook and for very good reason. Our fourth quarter and full year 2019 results exceeded our guidance and we were executing on our priorities of strengthening the balance sheet and reducing leverage," stated Bob Bondurant, President and Chief Executive Officer of Martin Midstream GP LLC, the general partner of the Partnership. "However, by March the impacts on refinery utilization due to demand destruction from COVID-19 were beginning to become apparent and there was, and continues to be, no clear line of sight to the end, although we do see reasons for optimism.

"Despite the difficulties associated with the pandemic and the specific challenges to our industry we were able to meet the low end of our full year guidance even though the fourth quarter fell short of our expectations. Headwinds in both our Transportation and NGL segments impacted our results significantly. In the Transportation segment, as expected, reduced refinery utilization resulted in lower demand for our marine assets. In the NGL segment, the backwardation of the butane price curve led refineries to delay purchases anticipating a lower price environment in the first quarter of 2021. This negatively impacted our fourth quarter sales volumes, specifically in December, resulting in a misalignment between physical sales and financially hedged volumes.

"As we look to 2021, I am optimistic that refinery utilization will continue to increase as demand rises as a result of widespread vaccinations, government stimulus and a rebounding economy. Our businesses remain solid with approximately 62% of our cash flows tied to fixed-fee contracts. We will continue to focus on optimizing utilization of our asset base, reducing costs, and generating consistent cash flows to meet our leverage reduction goals and return value to our unitholders."

FOURTH QUARTER 2020 OPERATING RESULTS BY BUSINESS SEGMENT

TERMINALLING AND STORAGE ("T&S")

T&S Operating Income for the three months ended December 31, 2020 and 2019 was $12.6 million and $2.6 million, respectively.

Adjusted segment EBITDA for T&S was $10.6 million and $11.5 million for the three months ended December 31, 2020 and 2019, respectively, reflecting reduced operating expenses from lower repairs and maintenance and labor cost at our Specialty Terminals, improved margins on packaged lubricants products from lower production cost and operating efficiencies. These were offset by reduced throughput volume and rates at our Shore-Based Terminals and expired capital recovery fees at the Smackover Refinery as well as decreased fees related to a crude pipeline gathering rate adjustment.

TRANSPORTATION

Transportation Operating Income for the three months ended December 31, 2020 and 2019 was an operating loss of $2.3 million and operating income of $5.5 million, respectively.

Adjusted segment EBITDA for Transportation was $1.7 million and $9.1 million for the three months ended December 31, 2020 and 2019, respectively, reflecting lower marine utilization and reduced day rates along with lower land transportation load count related to demand destruction and lower refinery utilization as a result of COVID-19.

SULFUR SERVICES

Sulfur Services Operating Income for the three months ended December 31, 2020 and 2019 was $4.7 million and $4.6 million, respectively.

Adjusted segment EBITDA for Sulfur Services was $7.4 million for both the three months ended December 31, 2020 and 2019, respectively. Within the segment, the Fertilizer division results recovered when compared to last year as a result of improved planting conditions and higher commodity prices. This was offset by lower results for the Sulfur division as margins decreased in our sulfur trading business and 2019 results benefited from business interruption insurance proceeds.

NATURAL GAS LIQUIDS ("NGL")

NGL Operating Income for the three months ended December 31, 2020 and 2019 was $1.5 million and $9.5 million, respectively.

Adjusted segment EBITDA from continuing operations for NGL was $2.0 million and $11.4 million for the three months ended December 31, 2020 and 2019, respectively, primarily as a result of reduced demand in our butane optimization business due to the impact of COVID-19 on refinery utilization and backwardation of the forward price curve delaying refinery purchases causing misalignment of our physical sales and financially hedged volumes.

UNALLOCATED SELLING, GENERAL AND ADMINISTRATIVE EXPENSE ("USGA")

USGA expenses included in operating income were $4.6 million and $4.2 million for the three months ended December 31, 2020 and 2019, respectively.

USGA expenses included in adjusted EBITDA were $4.3 million and $3.9 million for the three months ended December 31, 2020 and 2019, respectively, primarily as a result of the 2019 period including insurance recoveries related to the settlement of an insurance claim which offset legal expense during that period.

2021 FINANCIAL GUIDANCE

The Partnership expects to generate Adjusted EBITDA between $95 million and $102 million for 2021. Guidance assumptions include increases to refined product demand beginning in the second half of the year as vaccines are more widely distributed, travel restrictions are lifted and the global economy recovers from the COVID-19 pandemic.

The Partnership intends to update and provide more detailed guidance when visibility to refined product demand and refinery utilization improves throughout the year.

The Partnership has not provided comparable GAAP financial information on a forward-looking basis because it would require the Partnership to create estimated ranges on a GAAP basis, which would entail unreasonable effort as the adjustments required to reconcile forward-looking non-GAAP measures cannot be predicted with a reasonable degree of certainty but may include, among others, costs related to debt amendments and unusual charges, expenses and gains. Some or all of those adjustments could be significant.

LIQUIDITY

At December 31, 2020, the Partnership had $148 million drawn on its $300 million revolving credit facility, a $57 million decrease from September 30, 2020. The decrease was attributable to the seasonal inventory liquidation in the NGL segment as working capital declined by $23.6 million and we received net proceeds of $20.7 million from the Mega Lubricants disposition. As previously announced, on August 12, 2020, the Partnership successfully completed an exchange offer and cash tender offer for its senior unsecured notes due February 2021. At December 31, 2020, the Partnership had the following outstanding senior notes: senior unsecured notes due 2021 ("2021 Notes") of $28.8 million, senior secured notes of $53.8 million due 2024 and senior secured notes of $291.9 million due 2025, for a total of senior notes outstanding of $374.5 million. The Partnership’s leverage ratio, as calculated under the revolving credit facility, was 5.4 times on December 31, 2020 compared to 4.9 times on September 30, 2020. The Partnership is in compliance with all debt covenants as of December 31, 2020. On February 15, 2021, the 2021 Notes matured and the Partnership retired the outstanding balance of $28.8 million using its revolving credit facility.

COVID-19 RESPONSE

The Partnership initiated and continues to evaluate protocols in response to the COVID-19 pandemic which include work from home initiatives to protect the health and safety of our employees as well as the communities where we operate, travel restrictions, and training personnel regarding preventative measures when accessing docks, vessels and operating locations. At this time all facilities are operational and monitored closely.

RESULTS OF OPERATIONS

The Partnership had a net loss from continuing operations for the three months ended December 31, 2020 of $2.6 million, a loss of $0.06 per limited partner unit. The Partnership had net income from continuing operations for the three months ended December 31, 2019 of $6.6 million, or $0.14 per limited partner unit. Adjusted EBITDA from continuing operations for the three months ended December 31, 2020 was $17.4 million compared to the three months ended December 31, 2019 of $35.5 million. Distributable cash flow from continuing operations for the three months ended December 31, 2020 was $0.8 million compared to the three months ended December 31, 2019 of $20.7 million.

The Partnership had no net income, adjusted EBITDA or distributable cash flow from discontinued operations for the three months ended December 31, 2020 or 2019.

The Partnership had a net loss from continuing operations for the year ended December 31, 2020 of $6.8 million, a loss of $0.17 per limited partner unit. The Partnership had net income from continuing operations for the year ended December 31, 2019 of $4.5 million, or $0.11 per limited partner unit. Adjusted EBITDA from continuing operations for the year ended December 31, 2020 was $94.9 million compared to the year ended December 31, 2019 of $108.3 million. Distributable cash flow from continuing operations for the year ended December 31, 2020 was $39.7 million compared to the year ended December 31, 2019 of $41.8 million.

The Partnership had no net income from discontinued operations for the year ended December 31, 2020 compared to a loss of $179.5 million, or $4.55 per limited partner unit, for the year ended December 31, 2019. The Partnership had no adjusted EBITDA from discontinued operations for the year ended December 31, 2020 compared to $10.7 million for the year ended December 31, 2019. The Partnership had no distributable cash flow from discontinued operations for the year ended December 31, 2020 compared to $9.8 million for the year ended December 31, 2019.

Revenues for the three months ended December 31, 2020 were $180.1 million compared to the three months ended December 31, 2019 of $241.9 million. Revenues for the year ended December 31, 2020 were $672.1 million compared to the year ended December 31, 2019 of $847.1 million.

Distributable cash flow from continuing operations, distributable cash flow from discontinued operations, EBITDA, adjusted EBITDA from continuing operations, and adjusted EBITDA from discontinued operations 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 from continuing operations, and Distributable 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 fourth quarter 2020 to the Partnership's Adjusted EBITDA for the fourth quarter 2019.

Investors' Conference Call

Date: Tuesday, February 23, 2021
Time: 8:00 a.m. CT (please dial in by 7:55 a.m.)
Dial In #: (833) 900-2251
Conference ID: 9494038

Replay Dial In # (800) 585-8367 – Conference ID: 9494038
Webcast & Presentation: Fourth Quarter 2020 Earnings Conference Call

About Martin Midstream Partners

Martin Midstream Partners L.P., headquartered in Kilgore, Texas, is a publicly traded limited partnership with a diverse set of operations focused primarily in the United States Gulf Coast region. The Partnership's primary business lines include: (1) terminalling, processing, storage, and packaging 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) natural gas liquids marketing, distribution and transportation services. To learn more, visit www.MMLP.com. Follow Martin Midstream Partners L.P. on LinkedIn and Facebook.

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 guidance or to financial or operational estimates or projections rely on a number of assumptions concerning future events and are subject to a number of uncertainties, including (i) the current and potential impacts of the COVID-19 pandemic generally, on an industry-specific basis, and on the Partnership’s specific operations and business, (ii) the effects of the continued volatility of commodity prices and the related macroeconomic and political environment, and (iii) 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 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

The Partnership's management uses a variety of financial and operational measurements other than its financial statements prepared in accordance with United States Generally Accepted Accounting Principles ("GAAP") to analyze its performance. These include: (1) net income before interest expense, income tax expense, and depreciation and amortization ("EBITDA"), (2) adjusted EBITDA and (3) distributable cash flow. The Partnership's management views these measures as important performance measures of core profitability for its operations and the ability to generate and distribute cash flow, and as key components of its internal financial reporting. The Partnership's management believes investors benefit from having access to the same financial measures that management uses.

EBITDA, Adjusted EBITDA from Continuing Operations, and Adjusted EBITDA from Discontinued Operations. Certain items excluded from EBITDA, adjusted EBITDA from continuing operations, and adjusted EBITDA from discontinued operations are significant components in understanding and assessing an entity's financial performance, such as cost of capital and historical costs of depreciable assets. The Partnership has included information concerning EBITDA, adjusted EBITDA from continuing operations, and adjusted EBITDA from discontinued operations because it provides investors and management with additional information to better understand the following: financial performance of the Partnership's assets without regard to financing methods, capital structure or historical cost basis; the Partnership's operating performance and return on capital as compared to those of other similarly situated entities; and the viability of acquisitions and capital expenditure projects. The Partnership's method of computing adjusted EBITDA may not be the same method used to compute similar measures reported by other entities. The economic substance behind the Partnership's use of adjusted EBITDA is to measure the ability of the Partnership's assets to generate cash sufficient to pay interest costs, support its indebtedness and make distributions to its unitholders.

Distributable Cash Flow and Distributable Cash Flow from Discontinued Operations. Distributable cash flow is a significant performance measure used by the Partnership's management and by external users of its financial statements, such as investors, commercial banks and research analysts, to compare basic cash flows generated by the Partnership to the cash distributions it expects to pay unitholders. Distributable cash flow is also an important financial measure for the Partnership's unitholders since it serves as an indicator of the Partnership's success in providing a cash return on investment. Specifically, this financial measure indicates to investors whether or not the Partnership is generating cash flow at a level that can sustain or support an increase in its 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.

EBITDA, adjusted EBITDA from continuing operations, adjusted EBITDA from discontinued operations, distributable cash flow, and distributable cash flow from discontinued operations, should not be considered alternatives to, or more meaningful than, net income, cash flows from operating activities, or any other measure presented in accordance with GAAP. The Partnership's method of computing these measures may not be the same method used to compute similar measures reported by other entities.

MMLP-F

Sharon Taylor - Vice President & Chief Financial Officer
(877) 256-6644
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