Martin
Midstream Partners, L.P.
Martin Midstream Partners L.P. provides marine
transportation, terminaling, distribution and midstream logistical services for
producers and suppliers of hydrocarbon products and by-products, lubricants and
other liquids. It also manufactures and
markets sulfur-based fertilizers and related products. The partnership operates primarily in the
Gulf region, which a major hub for petroleum refining, natural gas processing
and support services to the offshore exploration and production industry.
Martin Midstream organizes its operations into four general
lines of business that can be summarized as follows:
Ø Marine
Transportation Business. Martin Midstream owns a marine fleet of 34
inland tank barges, 12 inland pushboats and two offshore tug/barge tanker units
that transport hydrocarbon products and by-products. It provides these
transportation services on a fee basis primarily under annual contracts. The marine transportation system operates on the
United States inland waterway system, primarily between domestic ports along
the Gulf of Mexico Intracoastal Waterway, the Mississippi River system and the
Tennessee-Tombigbee Waterway system.
Ø Terminaling
Business.
The partnership owns or operates 16 marine terminal facilities and two inland
terminal facilities that provide storage and handling services for hydrocarbon
products and by-products, lubricants, and other liquids. The nine product tanks
Martin Midstream owns at these facilities have an aggregate storage capacity of
approximately 879,000 barrels. Martin Midstream charges a fixed fee for
terminaling services and has several long-term terminaling contracts with
customers.
Ø LPG
Distribution Business.
The partnership purchases LPGs primarily from oil refiners and natural gas
processors and store them in its supply and storage facilities for resale to
propane retailers and industrial LPG users in Texas and the southeastern United
States. Martin Midstream owns three LPG supply and storage facilities with an
aggregate storage capacity of approximately 132,000 gallons and leases
approximately 128 million gallons of underground storage capacity. The
partnership generally tries to coordinate its sales and purchases of LPGs based
on the same daily price index for LPGs in order to decrease the impact of LPG
price fluctuations on its profitability.
Ø Fertilizer
Business.
Martin Midstream manufactures and sells fertilizer products, which are
primarily sulfur-based, and other sulfur related products to regional wholesale
distributors and industrial users.
Martin Midstream receives a material portion of its net
income and cash available for distribution from its unconsolidated
non-controlling 49.5% limited partner interest in CF Martin Sulphur, L.P., a
limited partnership formed by Martin Resource Management and CF Industries,
Inc. in November 2000. CF Martin Sulphur collects and aggregates, transports,
stores and markets molten sulfur supplied by oil refiners and natural gas
processors.
Martin Midstream Partners’ business strategy is to:
Ø Expand
services provided to existing customers.
Martin Midstream typically begins customer relationships by transporting
or marketing a limited number of products, or providing a limited range of
other services. It believes that
expanding services and products provided to existing customers is the most
efficient means of expansion, and that there is significant opportunity to do
so.
Ø Pursue
strategic acquisitions. Martin Midstream
pursues acquisitions that will expand either its products and services
offerings or its geographic presence.
After acquiring a business, it endeavors to use its knowledge and
experience to operate the business more cost effectively, thereby generating
increased revenues and cash flow.
Ø Attract new
customers in existing geographic markets. For
marine transportation these are the Gulf Coast and southern inland
waterways. Fertilizer products are sold
throughout the United States, and industrial sulfur products primarily in the
eastern United States.
Ø Expand
geographically. Martin Midstream typically enters a new
market through an acquisition or by securing at least one major customer or
supplier and then dedicating or purchasing assets for operation in the new
market. Once in a new territory, it seeks to expand operations there both by
targeting new customers and by selling additional services and products to the
original customers in the territory.
Ø Pursue
strategic alliances. Many larger customers are establishing
strategic alliances with midstream logistics management service providers to
address logistical and transportation problems or achieve operational
synergies. Martin Midstream intends to pursue such alliances with its
significant customers.
The partnership cites a number of competitive strengths
that it believes make it well positioned to execute its business strategy. These include:
Ø A
diversified asset base which, together with the services provided by
Martin Resource Management, provides customers with an integrated distribution network consisting of
transportation, terminaling and midstream logistical services while minimizing
dependence on the availability and pricing of services provided by third
parties.
Ø Strategically
located terminal facilities.
The
partnership believes itself to be one of the largest providers of shore bases, one
of the largest lubricant distributors, and one of the largest operators of
marine service terminals in the Gulf Coast region.
Ø Specialized
transportation equipment and storage facilities. Martin Midstream has the expertise to handle certain
hydrocarbon products and byproducts with unique requirements for transportation
and storage, such as molten sulfur, asphalt, and sulfuric acid.
Ø Experienced
management team and operational expertise. Members
of Martin Midstream’s management team have, on average, more than 23 years
of experience in the industries in it operates, and have worked for the company
for an average of 20 years.
Ø Strong
industry reputation and established relationships with suppliers and customers. Martin Midstream believes it has established
an industry reputation as a provider of reliable and cost-effective services
and a record of safe, efficient operation of its facilities. It has established long-term relationships
with many of its customers.
Ø Financial
flexibility
provided by borrowings available under the partnership’s revolving credit
facility and by its ability to issue new partnership equity.
Martin Midstream Partners is traded on the NASDAQ under the
symbol MMLP. For further information
contact Scott D. Martin at 713-350-6800 or visit Martin Midstream’s website at http://www.martinmidstream.com/.
Financial Information from 2003 10-K(in thousands, except per unit amounts)
|
2003 |
Nov. 6 -- Dec. 31, 2002 |
Jan. 1 -- Nov. 5, 2002(predecessor) |
Market value(1) |
$67,774 |
$51,047 |
|
Current assets |
$51,661 |
$39,115 |
|
Net property plant and equipment |
$82,961 |
$55,857 |
|
Total assets |
$139,685 |
$100,455 |
|
Current liabilities |
$26,793 |
$18,349 |
|
Long-term debt |
$67,000 |
$35,000 |
|
Partnership capital |
$45,892 |
$47,106 |
|
Revenue(2) |
$192,731 |
$33,746 |
$116,160 |
Operating income (2) |
$10,498 |
$2,650 |
$5,926 |
Net income(2) |
$11,981 |
$2,909 |
$3,291 |
Net income/unit(2) |
$1.64 |
$.40 |
|
Distribution/unit |
$2.03 |
-- |
|
High unit price |
$30.53 |
$19.00 |
|
Low unit price |
$17.50 |
$16.40 |
|
(1) As of June 30, 2003 and December 31, 2002.(2) Martin Midstream Partners’ initial public offering was on November 6, 2002. |
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