MARTIN MIDSTREAM PARTNERS L.P.
KILGORE -
'Despite the positive quarter and the strategic actions taken over the last eighteen months to strengthen our balance sheet and reduce leverage, we believe more is required. While our efforts have resulted in an adjusted leverage ratio of 4.69 times and distribution coverage ratio of 1.05 times at year-end 2019, we are still above our stated goals for both ratios. In order to be competitive in today's capital markets, adjusted leverage of below 4.00 times and a distribution coverage ratio of above 1.30 times is required. To provide further financial flexibility, we are resetting our annual distribution to
'Expanding on the fourth quarter of 2019, the majority of the excess over revised guidance was in the Sulfur Services segment due to stronger margins within the fertilizer business. In addition, I'm happy to report that after eight months of downtime our Neches terminal is fully operational, as replacement of the ship-loader was completed ahead of schedule enabling us to service our customers under their current contract terms. In the Natural Gas Liquids segment, the butane optimization business returned to historical seasonal price differentials, rebounding from the anomaly of last winter's refinery blending season. Within the Transportation segment, marine services continued to profit from increasing day rates coupled with high utilization, while land transportation performed slightly under revised guidance.
'Moving to 2020 guidance, we estimate net income of
Net income from continuing operations for the fourth quarter 2019 was
Adjusted EBITDA from continuing operations for the fourth quarter 2019 was
Distributable cash flow from continuing operations for the fourth quarter of 2019 was
Net income from discontinued operations for the three months ended
Adjusted EBITDA from discontinued operations for the fourth quarter of 2019 was
Distributable cash flow from discontinued operations for the fourth quarter of 2019 was
Revenues for the fourth quarter of 2019 were
As discussed above, the Partnership announced it has declared a quarterly cash distribution of
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.'
Included with this press release are the Partnership's consolidated financial statements as of and for the year ended
About
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 and other factors, many of which are outside the Partnership's 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
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.
Contact:
Tel: (877) 256-6644
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