NASDAQ:MMLP Martin Midstream Partners Q3 2023 Earnings Report $2.98 -0.07 (-2.30%) Closing price 04:00 PM EasternExtended Trading$2.96 -0.02 (-0.50%) As of 07:43 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. Earnings History Martin Midstream Partners EPS ResultsActual EPS-$0.03Consensus EPS N/ABeat/MissN/AOne Year Ago EPSN/AMartin Midstream Partners Revenue ResultsActual Revenue$176.70 millionExpected RevenueN/ABeat/MissN/AYoY Revenue GrowthN/AMartin Midstream Partners Announcement DetailsQuarterQ3 2023Date10/18/2023TimeN/AConference Call DateThursday, October 19, 2023Conference Call Time9:00AM ETUpcoming EarningsMartin Midstream Partners' Q2 2025 earnings is scheduled for Wednesday, July 16, 2025, with a conference call scheduled on Thursday, July 17, 2025 at 9:00 AM ET. Check back for transcripts, audio, and key financial metrics as they become available.Conference Call ResourcesConference Call AudioConference Call TranscriptSlide DeckPress Release (8-K)Quarterly Report (10-Q)Earnings HistoryCompany ProfileSlide DeckFull Screen Slide DeckPowered by Martin Midstream Partners Q3 2023 Earnings Call TranscriptProvided by QuartrOctober 19, 2023 ShareLink copied to clipboard.There are 6 speakers on the call. Operator00:00:00Morning. My name is Audra, and I will be your conference operator today. At this time, I would like to welcome everyone to the MMLP Third Quarter Earnings Conference Call. Today's conference is being recorded. All lines have been placed on mute to prevent any background noise. Operator00:00:15After the speakers' remarks, there will be a question and answer session. At this time, I would like to turn the conference over to Sharon Taylor, Chief Financial Officer. Please go ahead. Speaker 100:00:37Thank you, operator, and good morning, everyone, and thank you for joining us today. In the room are Bob Bondurant, CEO Randy Tauscher, COO David Cannon, Controller and Danny Kavan, Director of FP and A. I'll begin with our cautionary statements. During this call, management may be making forward looking statements as defined by the SEC. These statements are based upon our current beliefs as well as assumptions and information currently available to us. Speaker 100:01:09Please refer to our press release issued yesterday afternoon as well as our latest filings with the SEC for a list of factors that could impact the future performance of Martin and cause our actual results to differ from our expectations. We will discuss non GAAP financial measures on today's call, such as adjusted EBITDA, distributable cash flow and free cash flow. In addition, we will refer to adjusted EBITDA after giving effect to the exit of the butane optimization business. You will find a reconciliation of these non GAAP measures to their nearest GAAP measures in our earnings press release posted on our website. Now, I will turn the call over to Bob to discuss 2nd quarter results by segment. Speaker 200:01:58Thanks, Sharon. I would now like to discuss the performance of Martin Midstream's operations, comparing the actual results of the Q3 to our Q3 revised guidance. As a reminder, the 3rd quarter is typically our weakest cash flow quarter relative to the other three quarters of the year, primarily due to the seasonality in our fertilizer business, which is historically weaker in Q3. For the Q3, we had adjusted EBITDA of $26,200,000 compared to our Q3 revised guidance of $25,100,000 An improvement over guidance of $1,100,000 or 4.4 percent. For the trailing 12 months ending September 30, 2023, Excluding the results of our recently exited butane optimization business, we had adjusted EBITDA of 117,100,000 For the Q3, our largest cash flow generator was our transportation segment, which had adjusted EBITDA of $9,500,000 compared to revised guidance of $12,000,000 Within this segment, our land transportation business had adjusted EBITDA of 6,700,000 Compared to revised guidance of $8,500,000 the miss in adjusted EBITDA compared to our forecast for the land transportation business Was primarily due to an 8% reduction in forecasted miles driven. Speaker 200:03:29While the 3rd quarter had the strongest daily load count of the year, Our long haul load count was down due to a slowing demand primarily from our specialty industrial customers. We believe this is due to the weakening U. S. Economy. As a result of the weakened economic outlook, Which we believe will negatively impact the transportation requirements from our specialty industrial customer base, We have lowered guidance for land transportation for the 4th quarter by $1,100,000 Our marine transportation business had adjusted EBITDA of 2 $800,000 compared to guidance of $3,500,000 While we missed guidance in the 3rd quarter, We do see continued strength in both demand and daily market rates in the inland barge market. Speaker 200:04:19Compared to the 2nd quarter, Our average inland 2 barge tow day rate increased over 3%. However, negatively impacting our 3rd quarter performance With a decrease in overall fleet utilization compared to forecast as one of our inland tows went into the shipyard for a lengthy dry dock. This inland tow is now currently working at an improved day rate. The other negative impact to 3rd quarter performance We feel comfortable with our existing 4th quarter guidance for Marine Transportation. Our 2nd strongest cash flow generator in the 3rd quarter Was our Terminalling and Storage segment, which had adjusted EBITDA of $8,200,000 compared to guidance of 9,100,000 We had a slight 1% revenue decrease compared to guidance and a 3% increase in total expenses, some of which were one time charges. Speaker 200:05:23Now, I would like to discuss the performance of our Specialty Products business segment, which was our 3rd largest cash flow generator in the 3rd quarter. In this segment, we had adjusted EBITDA of $6,800,000 compared to guidance of $5,200,000 While our combined NGL and propane groups met their 3rd quarter guidance, our packaged lubricant and our grease businesses Combined to exceed Q3 guidance by $1,700,000 Our sales volume for packaged lubricants and grease Both approximated our forecast, but margins for both business lines exceeded forecast. Our Packaged lubricant margins on a per gallon basis exceeded forecast by 35% and our increased margin on a per pound basis Exceeded forecast by 19%. Finally, I would like to discuss our Sulfur Services segment. This segment had adjusted EBITDA of $5,400,000 compared to guidance of $3,100,000 Our fertilizer group had adjusted EBITDA of $2,200,000 exceeding 3rd quarter guidance by $2,100,000 as we had forecasted a breakeven quarter. Speaker 200:06:38Our overall fertilizer sales volume exceeded forecast by 13% as we had unforecasted liquid fertilizer sales to the South American export market. We also had unforecasted dispersal sales to the U. S. Markets As our customer base began to proceed, the continued decline in dispersal pricing had floored due to upward pressure in sulfur commodity prices, the primary feedstock for dispersal. Also, by having unforecasted liquid and dispersal sales in the 3rd quarter, It allowed us to improve manufacturing utilization at 2 of our fertilizer plants, which also contributed to improved profitability. Speaker 200:07:24The Pure Sulfur side of our Sulfur Services segment had adjusted EBITDA of $3,200,000 which exceeded guidance by 200,000 We continue to see strong sulfur production from our refinery suppliers, which continues to support this business line With greater volumes and profitability than originally forecasted. To summarize, in the 3rd quarter, We had strengthened our margin businesses, offset to a certain degree by underperformance in some of our fee based business lines. However, on a combined basis, Martin Midstream exceeded guidance by $1,100,000 confirming that in spite of certain Cash flow variability between segments. Overall, our restructured refinery services business model It is designed to deliver long term stable and sustainable cash flows. Now, I would like to turn the call over to Sharon to discuss our balance sheet, Capital Resources, Leverage and Capital Investment. Speaker 100:08:26Thank you, Bob. Total long term debt outstanding on September 30 consisted of and $400,000,000 of senior secured second lien notes due 2028 for a total of $462,500,000 which is an increase of $2,500,000 from the end of last quarter. The slight increase quarter over quarter was expected As the semiannual payment for interest related to our outstanding notes was due in August of the quarter. Our total bank compliant leverage was 3.95 times at the end of the quarter compared to 4.14 times on June 30, A 0.19x reduction driven by an increase in our trailing 12 month EBITDA after giving effect to the exit of the butane optimization business. Rounding out our financial ratios. Speaker 100:09:31First lien leverage was 0.53x and interest coverage was 2.2x. Liquidity under the revolving credit facility was Approximately $84,000,000 and the partnership was in compliance with all covenants at the end of the quarter. Now let's focus on capitalized spending during the quarter and how that projects for the rest of 2023. Maintenance capital expenditures for the quarter were $7,200,000 a slight increase from our forecast of $7,100,000 We are now forecasting maintenance CapEx to be $7,400,000 in the 4th quarter, bringing our total for the year to $29,400,000 which is an increase of $2,800,000 from our guidance. The majority of this increase is within the Shore Based segment related to repairs on the Galveston bulkhead and to the Port Arthur DOC structure. Speaker 100:10:33Growth CapEx was $3,400,000 for the quarter or $2,100,000 less than forecasted. Capital expenditures related to the Oleum Tower, which will provide feedstock To the DSM Semikem joint venture was $2,600,000 of the quarterly total. The original budget for 2023 related to the Oleum tower was $12,700,000 However, We are now forecasting a total spend of only $7,200,000 for the year as construction costs Accordingly, the total growth CapEx forecast for 2023 is reduced as we now expect 2023 spend to Approximately $10,100,000 compared to our guidance of $17,500,000 For clarity, for the Q4. Distributable cash flow for the quarter was $5,000,000 and adjusted free cash flow was 1,500,000 Finally, 2023 EBITDA guidance remains unchanged at $115,400,000 after giving effect to the exit of the Butane business. We have adjusted 4th quarter guidance for the Land Transportation division down by Only $1,000,000 but all other segments remain the same. Speaker 100:12:14For the full guidance by business line, please refer to Slide 3 at the Q3 earnings summary presentation released along with our earnings yesterday evening and available on our website. This concludes my prepared remarks. So I'll turn the call back to the operator for Q and A. Operator00:12:35Thank We'll take our first question from Kyle May from Sidoti and Company. Speaker 300:12:48Hi, good morning everyone. Speaker 200:12:50Good morning. Speaker 400:12:51Good morning. Speaker 300:12:53Bob, wondering if you could maybe expand on the lower mileage in the transportation segment for this quarter. And I know you mentioned you've already made some adjustments for the Q4, but just kind of how you're thinking about that aspect of the business and then when it could potentially turn around? Speaker 200:13:09Yes. So big picture, as I made in my comments, was our total load count was the highest average per day in the quarter. So So what does that mean? How is your mileage down when your load count is up? And we've had a shift to a shorter haul Kind of scenario around refinery basis, etcetera, because the demand in long hauling is down, a lot of it coming from the chemical industry, Some from longer term from the lubricant business, just the demand because the economic slowdown is happening. Speaker 200:13:40So when you think about it, as you run Shorter hauls, that's more expensive. You've got a higher pay rate to keep a driver employed. He's got to get paid even though he's running shorter Versus the longer term haul, so that's one piece of it. Another piece is the frequency of short hauls. You have more Over time, repair and maintenance related to that. Speaker 200:14:01So bigger picture, if you will, a shorter haul rate has probably a Higher operating costs per mile, well it does versus a long haul. So all that kind of plays into the equation. So when is this going to turn around? We've seen late in the Q3 pickup in our chemical hauling, and it's carried over a little bit into October. So hopefully that's Voting well for us. Speaker 200:14:25We're going to also try to increase our customer base. We have a fleet of chemical traders that need to be have a higher utilization. So we're going to try and expand our chemical base customer base, if you will. So All that combined, I think we're going to see a slower 4th quarter overall, but probably it will trend along with the U. S. Speaker 200:14:48Economy probably Later Q1, into the Q2, that's our instinct. Any addition? Speaker 400:14:55Yes. This is Randy. I'd just add that we have Excuse me, seasonality aspect to the chemical and lubricant business and typically we'd see a little slowdown Beginning around Thanksgiving time through the 1st of the year, but the element of the 4Q that we normally see an improvement is from the LPGs, Particularly if we have any kind of long and sustained winter from the propane side, but our butane business Our customers in the butane business and our propane business typically elevates for the trucking department quite a bit in the Q4 and Speaker 300:15:36Okay, great. That's helpful. And then I also wanted to ask about, I believe the release Mentioned in some of your prepared comments, talked about delays in the semiconductor manufacturing facility. Just wondering if you can give us Kind of an update on the current status of development and then should we expect any delays in the overall project completion? Speaker 400:16:01This is Randy again. So the answer to that is we expect a Slight delay in the project completion, and now I'm talking about our OEM plant to the Q2 of 2024 From late Q1 2024. And then yes, I mean, absolutely when our intended customers Our announcing delays of their plan, our demand will be kicked down the road A little bit likely much of it in the 2025. Speaker 300:16:41Okay, great. That's helpful. I appreciate the time this morning. Speaker 100:16:45Thank you, Tom. Speaker 200:16:47Thanks. Operator00:16:53We'll go next to Selman Akyol with Stifel. Speaker 500:16:58Hi, guys. This is Tim on for Selman. Thanks for taking the time. Previously, you guys had highlighted some potential projects In and around Beaumont, just wondering if you could expand on what kind of projects you guys are seeing and potentially the scale of those projects? Speaker 400:17:18Yes. So the scale of those projects to us would be Very similar to what you saw on our high purity deal. So we're not we're talking A couple of tens of 1,000,000 of dollars that would be our contribution to the projects that we had discussed previously. Now those projects have slowed down in one case. The project has been deferred because of the inability To get the carbon capture managed on their side. Speaker 400:17:54So I'd say there's we're still talking to people and there's more to come on that, but nothing else To report at this time. Speaker 500:18:03Got it. Thanks. And you guys had also mentioned some one time SG and A and OpEx costs within a couple of your segments, is there any way for you guys to quantify how much That impact was for the quarter and obviously since they were one time we should see a step up in 4Q cash flow. Speaker 100:18:26So I want to clarify first, we are talking about the one time expenses in the Marine Group? Speaker 500:18:35Correct. And then I think there was also some I thought you guys had mentioned some expenses within Terminalling and storage? Speaker 100:18:47So, we have What some of those are related to in both Tourmaline and in the Marine Group is some phantom units That we gave out to management in July, so a couple of things happened. In June, we already had 2 tranches of those On the books and the unit price had come down to a point where we made an adjustment in June. And then we issued another tranche to our employees in July. And so that tranche Came on in the 3rd quarter and so when you look at those SG and A costs, you had a reduction in the 2nd quarter and an additional tranche in the 3rd quarter. Speaker 500:19:36Got it. Makes sense. And then the last one for me is, just wondering if you could give an update on your guys' business down in Florida and Tampa? Speaker 400:19:49Yes. The trucking business in Tampa has continued to be strong. We're getting the types of returns in Tampa that we see throughout our trucking business. And that's been a Good growth area for us and we would anticipate for the rest of this winter and next spring And early next summer that the phosphate business do quite well and there would be a lot of need for us moving products around there. Speaker 500:20:27Understood. That's all I had. Thank you guys for the time. Speaker 100:20:31You bet. Thank you. Operator00:20:35And there are no further questions at this time. I would like to turn the conference over to Bob Bondurath for closing remarks. Speaker 200:20:41Thank you, Audra. We are pleased with our Q3 results, beating guidance by a little over $1,000,000 as our diversified refinery services model continues to return stable cash flows, allowing us to continue to strengthen the balance sheet and get closer to our leverage goal of below 3.75 times. During the call, we discussed the delayed start up of the Elfa plant. Even with the delay, we remain positive about the Finally, I want to say that here at Martin, we are saddened by the recent attacks on Israel, The ongoing conflict and unimaginable human suffering, our hearts go out to every person and family impacted by these horrific events We pray for resolution to the conflict soon. That concludes our call. Speaker 200:21:38Thanks for joining us shortly. Good day. Operator00:21:43And that does conclude today's conference call. Thank you for your participation. You may now disconnect.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallMartin Midstream Partners Q3 202300:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsSlide DeckPress Release(8-K)Quarterly report(10-Q) Martin Midstream Partners Earnings HeadlinesWhy Martin Midstream Partners L.P. 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Email Address About Martin Midstream PartnersMartin Midstream Partners (NASDAQ:MMLP), together with its subsidiaries, provides terminalling, processing, storage, and packaging services for petroleum products and by-products primarily in the United States. The company operates in four segments: Terminalling and Storage, Transportation, Sulfur Services, and Specialty Products. The company's Terminalling and Storage segment owns or operates various marine shore-based terminal facilities and specialty terminal facilities that provide storage, refining, blending, packaging, and handling services for producers and suppliers of petroleum products and by-products. This segment also offers land rental services to oil and gas companies, as well as storage and handling services for lubricants and fuels. Its Transportation segment operates various trucks and tank trailers; and inland marine tank barges, inland push boats, and articulated offshore tug and barge unit to transport petroleum products and by-products, petrochemicals, and chemicals. The company's Sulfur Services segment processes molten sulfur into prilled or pelletized sulfur, which is used in the production of fertilizers and industrial chemicals. Its Specialty Products segment stores, distributes, and transports natural gas liquids for wholesale deliveries to refineries, industrial natural gas liquid users, and propane retailers. Martin Midstream GP LLC serves as a general partner of the company. Martin Midstream Partners L.P. was incorporated in 2002 and is based in Kilgore, Texas.View Martin Midstream Partners ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles Is Reddit Stock a Buy, Sell, or Hold After Earnings Release?Warning or Opportunity After Super Micro Computer's EarningsAmazon Earnings: 2 Reasons to Love It, 1 Reason to Be CautiousRocket Lab Braces for Q1 Earnings Amid Soaring ExpectationsMeta Takes A Bow With Q1 Earnings - Watch For Tariff Impact in Q2Palantir Earnings: 1 Bullish Signal and 1 Area of ConcernVisa Q2 Earnings Top Forecasts, Adds $30B Buyback Plan Upcoming Earnings American Electric Power (5/6/2025)Advanced Micro Devices (5/6/2025)Marriott International (5/6/2025)Constellation Energy (5/6/2025)Arista Networks (5/6/2025)Brookfield Asset Management (5/6/2025)Duke Energy (5/6/2025)Energy Transfer (5/6/2025)Mplx (5/6/2025)Ferrari (5/6/2025) Get 30 Days of MarketBeat All Access for Free Sign up for MarketBeat All Access to gain access to MarketBeat's full suite of research tools. 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There are 6 speakers on the call. Operator00:00:00Morning. My name is Audra, and I will be your conference operator today. At this time, I would like to welcome everyone to the MMLP Third Quarter Earnings Conference Call. Today's conference is being recorded. All lines have been placed on mute to prevent any background noise. Operator00:00:15After the speakers' remarks, there will be a question and answer session. At this time, I would like to turn the conference over to Sharon Taylor, Chief Financial Officer. Please go ahead. Speaker 100:00:37Thank you, operator, and good morning, everyone, and thank you for joining us today. In the room are Bob Bondurant, CEO Randy Tauscher, COO David Cannon, Controller and Danny Kavan, Director of FP and A. I'll begin with our cautionary statements. During this call, management may be making forward looking statements as defined by the SEC. These statements are based upon our current beliefs as well as assumptions and information currently available to us. Speaker 100:01:09Please refer to our press release issued yesterday afternoon as well as our latest filings with the SEC for a list of factors that could impact the future performance of Martin and cause our actual results to differ from our expectations. We will discuss non GAAP financial measures on today's call, such as adjusted EBITDA, distributable cash flow and free cash flow. In addition, we will refer to adjusted EBITDA after giving effect to the exit of the butane optimization business. You will find a reconciliation of these non GAAP measures to their nearest GAAP measures in our earnings press release posted on our website. Now, I will turn the call over to Bob to discuss 2nd quarter results by segment. Speaker 200:01:58Thanks, Sharon. I would now like to discuss the performance of Martin Midstream's operations, comparing the actual results of the Q3 to our Q3 revised guidance. As a reminder, the 3rd quarter is typically our weakest cash flow quarter relative to the other three quarters of the year, primarily due to the seasonality in our fertilizer business, which is historically weaker in Q3. For the Q3, we had adjusted EBITDA of $26,200,000 compared to our Q3 revised guidance of $25,100,000 An improvement over guidance of $1,100,000 or 4.4 percent. For the trailing 12 months ending September 30, 2023, Excluding the results of our recently exited butane optimization business, we had adjusted EBITDA of 117,100,000 For the Q3, our largest cash flow generator was our transportation segment, which had adjusted EBITDA of $9,500,000 compared to revised guidance of $12,000,000 Within this segment, our land transportation business had adjusted EBITDA of 6,700,000 Compared to revised guidance of $8,500,000 the miss in adjusted EBITDA compared to our forecast for the land transportation business Was primarily due to an 8% reduction in forecasted miles driven. Speaker 200:03:29While the 3rd quarter had the strongest daily load count of the year, Our long haul load count was down due to a slowing demand primarily from our specialty industrial customers. We believe this is due to the weakening U. S. Economy. As a result of the weakened economic outlook, Which we believe will negatively impact the transportation requirements from our specialty industrial customer base, We have lowered guidance for land transportation for the 4th quarter by $1,100,000 Our marine transportation business had adjusted EBITDA of 2 $800,000 compared to guidance of $3,500,000 While we missed guidance in the 3rd quarter, We do see continued strength in both demand and daily market rates in the inland barge market. Speaker 200:04:19Compared to the 2nd quarter, Our average inland 2 barge tow day rate increased over 3%. However, negatively impacting our 3rd quarter performance With a decrease in overall fleet utilization compared to forecast as one of our inland tows went into the shipyard for a lengthy dry dock. This inland tow is now currently working at an improved day rate. The other negative impact to 3rd quarter performance We feel comfortable with our existing 4th quarter guidance for Marine Transportation. Our 2nd strongest cash flow generator in the 3rd quarter Was our Terminalling and Storage segment, which had adjusted EBITDA of $8,200,000 compared to guidance of 9,100,000 We had a slight 1% revenue decrease compared to guidance and a 3% increase in total expenses, some of which were one time charges. Speaker 200:05:23Now, I would like to discuss the performance of our Specialty Products business segment, which was our 3rd largest cash flow generator in the 3rd quarter. In this segment, we had adjusted EBITDA of $6,800,000 compared to guidance of $5,200,000 While our combined NGL and propane groups met their 3rd quarter guidance, our packaged lubricant and our grease businesses Combined to exceed Q3 guidance by $1,700,000 Our sales volume for packaged lubricants and grease Both approximated our forecast, but margins for both business lines exceeded forecast. Our Packaged lubricant margins on a per gallon basis exceeded forecast by 35% and our increased margin on a per pound basis Exceeded forecast by 19%. Finally, I would like to discuss our Sulfur Services segment. This segment had adjusted EBITDA of $5,400,000 compared to guidance of $3,100,000 Our fertilizer group had adjusted EBITDA of $2,200,000 exceeding 3rd quarter guidance by $2,100,000 as we had forecasted a breakeven quarter. Speaker 200:06:38Our overall fertilizer sales volume exceeded forecast by 13% as we had unforecasted liquid fertilizer sales to the South American export market. We also had unforecasted dispersal sales to the U. S. Markets As our customer base began to proceed, the continued decline in dispersal pricing had floored due to upward pressure in sulfur commodity prices, the primary feedstock for dispersal. Also, by having unforecasted liquid and dispersal sales in the 3rd quarter, It allowed us to improve manufacturing utilization at 2 of our fertilizer plants, which also contributed to improved profitability. Speaker 200:07:24The Pure Sulfur side of our Sulfur Services segment had adjusted EBITDA of $3,200,000 which exceeded guidance by 200,000 We continue to see strong sulfur production from our refinery suppliers, which continues to support this business line With greater volumes and profitability than originally forecasted. To summarize, in the 3rd quarter, We had strengthened our margin businesses, offset to a certain degree by underperformance in some of our fee based business lines. However, on a combined basis, Martin Midstream exceeded guidance by $1,100,000 confirming that in spite of certain Cash flow variability between segments. Overall, our restructured refinery services business model It is designed to deliver long term stable and sustainable cash flows. Now, I would like to turn the call over to Sharon to discuss our balance sheet, Capital Resources, Leverage and Capital Investment. Speaker 100:08:26Thank you, Bob. Total long term debt outstanding on September 30 consisted of and $400,000,000 of senior secured second lien notes due 2028 for a total of $462,500,000 which is an increase of $2,500,000 from the end of last quarter. The slight increase quarter over quarter was expected As the semiannual payment for interest related to our outstanding notes was due in August of the quarter. Our total bank compliant leverage was 3.95 times at the end of the quarter compared to 4.14 times on June 30, A 0.19x reduction driven by an increase in our trailing 12 month EBITDA after giving effect to the exit of the butane optimization business. Rounding out our financial ratios. Speaker 100:09:31First lien leverage was 0.53x and interest coverage was 2.2x. Liquidity under the revolving credit facility was Approximately $84,000,000 and the partnership was in compliance with all covenants at the end of the quarter. Now let's focus on capitalized spending during the quarter and how that projects for the rest of 2023. Maintenance capital expenditures for the quarter were $7,200,000 a slight increase from our forecast of $7,100,000 We are now forecasting maintenance CapEx to be $7,400,000 in the 4th quarter, bringing our total for the year to $29,400,000 which is an increase of $2,800,000 from our guidance. The majority of this increase is within the Shore Based segment related to repairs on the Galveston bulkhead and to the Port Arthur DOC structure. Speaker 100:10:33Growth CapEx was $3,400,000 for the quarter or $2,100,000 less than forecasted. Capital expenditures related to the Oleum Tower, which will provide feedstock To the DSM Semikem joint venture was $2,600,000 of the quarterly total. The original budget for 2023 related to the Oleum tower was $12,700,000 However, We are now forecasting a total spend of only $7,200,000 for the year as construction costs Accordingly, the total growth CapEx forecast for 2023 is reduced as we now expect 2023 spend to Approximately $10,100,000 compared to our guidance of $17,500,000 For clarity, for the Q4. Distributable cash flow for the quarter was $5,000,000 and adjusted free cash flow was 1,500,000 Finally, 2023 EBITDA guidance remains unchanged at $115,400,000 after giving effect to the exit of the Butane business. We have adjusted 4th quarter guidance for the Land Transportation division down by Only $1,000,000 but all other segments remain the same. Speaker 100:12:14For the full guidance by business line, please refer to Slide 3 at the Q3 earnings summary presentation released along with our earnings yesterday evening and available on our website. This concludes my prepared remarks. So I'll turn the call back to the operator for Q and A. Operator00:12:35Thank We'll take our first question from Kyle May from Sidoti and Company. Speaker 300:12:48Hi, good morning everyone. Speaker 200:12:50Good morning. Speaker 400:12:51Good morning. Speaker 300:12:53Bob, wondering if you could maybe expand on the lower mileage in the transportation segment for this quarter. And I know you mentioned you've already made some adjustments for the Q4, but just kind of how you're thinking about that aspect of the business and then when it could potentially turn around? Speaker 200:13:09Yes. So big picture, as I made in my comments, was our total load count was the highest average per day in the quarter. So So what does that mean? How is your mileage down when your load count is up? And we've had a shift to a shorter haul Kind of scenario around refinery basis, etcetera, because the demand in long hauling is down, a lot of it coming from the chemical industry, Some from longer term from the lubricant business, just the demand because the economic slowdown is happening. Speaker 200:13:40So when you think about it, as you run Shorter hauls, that's more expensive. You've got a higher pay rate to keep a driver employed. He's got to get paid even though he's running shorter Versus the longer term haul, so that's one piece of it. Another piece is the frequency of short hauls. You have more Over time, repair and maintenance related to that. Speaker 200:14:01So bigger picture, if you will, a shorter haul rate has probably a Higher operating costs per mile, well it does versus a long haul. So all that kind of plays into the equation. So when is this going to turn around? We've seen late in the Q3 pickup in our chemical hauling, and it's carried over a little bit into October. So hopefully that's Voting well for us. Speaker 200:14:25We're going to also try to increase our customer base. We have a fleet of chemical traders that need to be have a higher utilization. So we're going to try and expand our chemical base customer base, if you will. So All that combined, I think we're going to see a slower 4th quarter overall, but probably it will trend along with the U. S. Speaker 200:14:48Economy probably Later Q1, into the Q2, that's our instinct. Any addition? Speaker 400:14:55Yes. This is Randy. I'd just add that we have Excuse me, seasonality aspect to the chemical and lubricant business and typically we'd see a little slowdown Beginning around Thanksgiving time through the 1st of the year, but the element of the 4Q that we normally see an improvement is from the LPGs, Particularly if we have any kind of long and sustained winter from the propane side, but our butane business Our customers in the butane business and our propane business typically elevates for the trucking department quite a bit in the Q4 and Speaker 300:15:36Okay, great. That's helpful. And then I also wanted to ask about, I believe the release Mentioned in some of your prepared comments, talked about delays in the semiconductor manufacturing facility. Just wondering if you can give us Kind of an update on the current status of development and then should we expect any delays in the overall project completion? Speaker 400:16:01This is Randy again. So the answer to that is we expect a Slight delay in the project completion, and now I'm talking about our OEM plant to the Q2 of 2024 From late Q1 2024. And then yes, I mean, absolutely when our intended customers Our announcing delays of their plan, our demand will be kicked down the road A little bit likely much of it in the 2025. Speaker 300:16:41Okay, great. That's helpful. I appreciate the time this morning. Speaker 100:16:45Thank you, Tom. Speaker 200:16:47Thanks. Operator00:16:53We'll go next to Selman Akyol with Stifel. Speaker 500:16:58Hi, guys. This is Tim on for Selman. Thanks for taking the time. Previously, you guys had highlighted some potential projects In and around Beaumont, just wondering if you could expand on what kind of projects you guys are seeing and potentially the scale of those projects? Speaker 400:17:18Yes. So the scale of those projects to us would be Very similar to what you saw on our high purity deal. So we're not we're talking A couple of tens of 1,000,000 of dollars that would be our contribution to the projects that we had discussed previously. Now those projects have slowed down in one case. The project has been deferred because of the inability To get the carbon capture managed on their side. Speaker 400:17:54So I'd say there's we're still talking to people and there's more to come on that, but nothing else To report at this time. Speaker 500:18:03Got it. Thanks. And you guys had also mentioned some one time SG and A and OpEx costs within a couple of your segments, is there any way for you guys to quantify how much That impact was for the quarter and obviously since they were one time we should see a step up in 4Q cash flow. Speaker 100:18:26So I want to clarify first, we are talking about the one time expenses in the Marine Group? Speaker 500:18:35Correct. And then I think there was also some I thought you guys had mentioned some expenses within Terminalling and storage? Speaker 100:18:47So, we have What some of those are related to in both Tourmaline and in the Marine Group is some phantom units That we gave out to management in July, so a couple of things happened. In June, we already had 2 tranches of those On the books and the unit price had come down to a point where we made an adjustment in June. And then we issued another tranche to our employees in July. And so that tranche Came on in the 3rd quarter and so when you look at those SG and A costs, you had a reduction in the 2nd quarter and an additional tranche in the 3rd quarter. Speaker 500:19:36Got it. Makes sense. And then the last one for me is, just wondering if you could give an update on your guys' business down in Florida and Tampa? Speaker 400:19:49Yes. The trucking business in Tampa has continued to be strong. We're getting the types of returns in Tampa that we see throughout our trucking business. And that's been a Good growth area for us and we would anticipate for the rest of this winter and next spring And early next summer that the phosphate business do quite well and there would be a lot of need for us moving products around there. Speaker 500:20:27Understood. That's all I had. Thank you guys for the time. Speaker 100:20:31You bet. Thank you. Operator00:20:35And there are no further questions at this time. I would like to turn the conference over to Bob Bondurath for closing remarks. Speaker 200:20:41Thank you, Audra. We are pleased with our Q3 results, beating guidance by a little over $1,000,000 as our diversified refinery services model continues to return stable cash flows, allowing us to continue to strengthen the balance sheet and get closer to our leverage goal of below 3.75 times. During the call, we discussed the delayed start up of the Elfa plant. Even with the delay, we remain positive about the Finally, I want to say that here at Martin, we are saddened by the recent attacks on Israel, The ongoing conflict and unimaginable human suffering, our hearts go out to every person and family impacted by these horrific events We pray for resolution to the conflict soon. That concludes our call. Speaker 200:21:38Thanks for joining us shortly. Good day. Operator00:21:43And that does conclude today's conference call. Thank you for your participation. You may now disconnect.Read morePowered by