Martin Midstream Partners L.P.

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 third quarter earnings conference call. Today's conference is being recorded. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press the star key followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. At this time, I would like to turn the conference over to Sharon Taylor, Chief Financial Officer. Please go ahead.

Thank 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 Cavan, Director of FP&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. Please 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 second quarter results by segment thanks sharon i would now like to discuss the performance of martin midstream's operations comparing the actual results of the third quarter to our third quarter revised guidance as a reminder the third 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 third quarter, we had adjusted EBITDA of $26.2 million compared to our third quarter revised guidance of $25.1 million, an improvement over guidance of $1.1 million or 4.4%. For the trading 12 months ending September 30, 2023, excluding the results of our recently exited butane optimization business, we had adjusted EBITDA of $117.1 million. For the third quarter, our largest cash flow generator was our transportation segment, which had adjusted EBITDA of $9.5 million compared to revised guidance of $12 million. Within this segment, our land transportation business had adjusted EBITDA of $6.7 million compared to revised guidance of $8.5 million. 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. While the third 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 fourth quarter by 1.1 million. Our marine transportation business had adjusted EBITDA of 2.8 million compared to guidance of 3.5 million. While we missed guidance in the third quarter, we do see continued strength in both demand and daily market rates in the inland barge market. Compared to the second quarter, our average inland two-barge tow day rate increased over 3%. However, negatively impacting our third quarter performance was 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 third quarter performance was a one-time charge to Marine Transportation's unallocated SG&A. Looking toward the end of the year, we feel comfortable with our existing fourth quarter guidance for Marine Transportation. Our second strongest cash flow generator in the third quarter was our terminating and storage segment which had adjusted EBITDA of 8.2 million compared to guidance of 9.1 million. We had a slight 1% revenue decrease compared to guidance and a 3% increase in total expenses, some of which were one-time charges. Now I would like to discuss the performance of our specialty products business segment, which was our third largest cash flow generator in the third quarter. In this segment, we had adjusted EBITDA of 6.8 million compared to guidance of 5.2 million. While our combined NGL and propane groups met their third quarter guidance, our packaged lubricant and our grease businesses combined to exceed third quarter guidance by 1.7 million. Our sales volume for packaged lubricants and grease both approximated our forecast, but margins for both business lines exceeded forecast. Our package lubricant margins on a per-gallon basis exceeded forecast by 35%, and our grease 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 $5.4 million compared to guidance of $3.1 million. Our fertilizer group had adjusted EBITDA of 2.2 million, exceeding third quarter guidance by 2.1 million, as we had forecasted a break-even quarter. Our 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 perceive 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 third quarter, it allowed us to improve manufacturing utilization at two of our fertilizer plants, which also contributed to improved profitability. The pure sulfur side of our sulfur services segment had adjusted EBITDA of 3.2 million, which exceeded guidance by 0.2 million. 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 third quarter, we had strength in our margin businesses all set to a certain degree by underperformance in some of our fee-based business lines. However, on a combined basis, Martin Midstream exceeded guidance by $1.1 million, confirming that in spite of certain cash flow variability between segments, overall, our restructured refinery services business model 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.