MARTIN MIDSTREAM PARTNERS L.P. Q2 FY2023 earnings call

• Exited butane optimization business, with negative EBITDA in Q2 ($6.3M), H1 ($15.1M), and trailing 12 months ($27.4M). - Transportation segment strong due to marine rates and utilization. - Terminals and Storage segment benefited from reduced operating costs at Smackover. - Sulfur Services: Fertilizer group hit by weather and pricing, pure sulfur side saw volume increase. - Specialty Products: NGL/propane strong, but lubricants weak due to ag. - Balance sheet: Debt reduced to $460.5M, liquidity increased; ELSA project (oleum tower) has $1.4M in growth CapEx, expected online Q1 2024.

Transportation: Adjusted EBITDA in Q2 was $12.1 million compared to guidance of $11.6 million. Land transportation had adjusted EBITDA of $8.7 million vs guidance $8.8 million; marine transportation had $3.5 million vs guidance $2.8 million. Terminals and Storage: Adjusted EBITDA of $9.6 million vs guidance $8.3 million, driven by reduced operating costs, especially natural gas at Smackover. Sulfur Services: Adjusted EBITDA of $8 million vs guidance $10.6 million. Fertilizer group underperformed due to weather and pricing, while pure sulfur side had $3.2 million vs guidance $2.9 million due to higher volume. Specialty Products: Adjusted EBITDA of $5.9 million vs guidance $6 million. NGL and propane groups outperformed, but packaged lubricants were weak due to ag market.

• Transportation guidance increased by $3.7M due to marine rates and utilization. - Terminals and Storage guidance increased by $3.5M, mainly from Smackover cost reductions. - Sulfur Services guidance reduced by $1M in Q3 and $5.8M full year due to fertilizer inventory. - Specialty Products guidance reduced by $2M full year for lubricants weakness. - Overall adjusted EBITDA guidance remains unchanged at $115.4M after exit of butane business.

• Weather impact on agriculture-related businesses (fertilizer, lubricants) affecting sales and margins. - Prior losses from butane optimization business. - High fertilizer industry inventory levels negatively impacting sulfur services segment performance.

Q: Discuss transportation outlooks, including marine rates, utilization, and Florida business.

A: Marine rates up ~11%, utilization strong; Florida business continuing to improve due to unique pond water movement.

Q: ELSA project capital investment and expected returns?

A: Oleum tower investment ~$13.5M this year, $6.5M next year; midpoint EBITDA range ~$6M.

Q: Working capital and CapEx plans?

A: Working capital range $45M-$50M over next 4 quarters; CapEx focus on ELSA and debt reduction.

Q: Leverage and distributions?

A: Aim to get leverage below 3.75x by end of next year, then focus on enhancing distributions for unitholders