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|Marlin Midstream Partners, LP Reports First Quarter 2014 Financial Results|
HOUSTON, April 30, 2014 (GLOBE NEWSWIRE) -- Marlin Midstream Partners, LP (Nasdaq:FISH), a Delaware limited partnership ("Marlin" or "the Partnership"), today announced financial results for the first quarter ended March 31, 2014.
For the first quarter of 2014, net income totaled $5.1 million, $0.29 per limited partner unit, and adjusted EBITDA1 was $8.7 million. Distributable cash flow1 for the first quarter of 2014 was $7.8 million resulting in a coverage ratio1 of 1.22x for the period.
"We are pleased with the results of operations for the start of 2014 as we experienced strong gross margin and distributable cash flow for the first quarter," said Chairman and CEO W. Keith Maxwell III. "With a consistently strong coverage ratio well ahead of our target for the past several quarters since our IPO, we increased our first quarter dividend by 1.4% to $0.355 per unit, or $1.42 per unit on an annualized basis. We will continue to focus on generating stable distributable cash flows from our existing assets as well as executing on growth opportunities to steadily increase distributions to our unitholders. We are targeting an annual adjusted EBITDA growth of 8 to 10 percent that we believe will come from both strategic dropdown transactions from our sponsor and from organic opportunities."
Summary First Quarter 2014 Financial Results
For the first quarter ended March 31, 2014, Marlin reported gross margin of $14.6 million compared to gross margin of $5.0 million, for the first quarter of 2013. The gross margin increase is attributable to the new crude oil logistics business segment and related contracts as well as the new gathering and processing contract entered into with Associated Energy Services, LP ("AES") at the closing of Marlin's IPO on July 31, 2013.
For the midstream natural gas gathering and processing segment, gross margin was $11.2 million for the first quarter ended March 31, 2014. This compares to gathering and processing segment gross margin of $5.0 million for the first quarter ended March 31, 2013.
For the crude oil logistics segment, gross margin was $3.4 million for the first quarter ended March 31, 2014. Marlin's crude oil logistics assets became fully operational at July 31, 2013. As such, there are no material results of operations or material assets related to this segment for the periods prior to the IPO.
On April 17, 2014, the board of directors of Marlin's general partner declared a quarterly cash distribution of $0.355 per unit to its partners for the first quarter ended March 31, 2014. This distribution represents an increase of 1.4% over the quarterly distribution of $0.35 per unit ($1.40 per unit on an annualized basis) previously paid for the prior quarter ended December 31, 2013. The quarterly distribution will be paid on May 6, 2014 to unitholders of record as of May 1, 2014.
Conference Call and Webcast
Marlin will host a conference call to discuss first quarter 2014 results at 12:00 p.m. CT (1:00 p.m. ET) on Thursday, May 1, 2014.
Interested parties can listen to a live webcast of the call from the Events & Presentations page of the Marlin Investor Relations website at http://investor.marlinmidstream.com/events.cfm. An archived replay of the webcast will be available for 12 months following the live presentation.
The call can be accessed live over the telephone by dialing 1-877-941-1466, or 1-480-629-9821 for international callers. The passcode for the call is 4679992. A telephonic replay of the call will be available through May 8, 2014 and can be accessed by dialing 1-800-406-7325, or 1-303-590-3030 for international callers, with conference ID number 4679992.
Marlin is a fee-based, growth oriented Delaware limited partnership formed to develop, own, operate and acquire midstream energy assets. Marlin currently provides natural gas gathering, transportation, treating and processing services, NGL transportation services and crude oil transloading services. Headquartered in Houston, Texas, Marlin's assets include two related natural gas processing facilities located in Panola County, Texas, a natural gas processing facility located in Tyler County, Texas, two natural gas gathering systems connected to its Panola County processing facilities, two NGL transportation pipelines that connect its Panola County and Tyler County processing facilities to third party NGL pipelines and two crude oil transloading facilities containing five crude oil transloaders.
This press release may contain forward-looking statements concerning Marlin's operations, economic performance and financial condition. These statements can be identified by the use of forward-looking terminology including "may," "will," "believe," "expect," "anticipate," "estimate," "continue," or other similar words. These statements discuss future expectations, contain projections of results of operations or financial condition or include other "forward-looking" information. Although Marlin believes that the expectations reflected in such forward-looking statements are reasonable, the Partnership can give no assurance that such expectations will be realized.
These forward-looking statements involve risks and uncertainties. Important factors that could cause actual results to differ materially from expectations include, but are not limited to, the following risks and uncertainties:
Such risks and uncertainties could cause actual results to differ materially from those contained in any forward-looking statement. Except as required by law, Marlin undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Gross Margin, Adjusted EBITDA and Distributable Cash Flow
Marlin uses gross margin, or revenues less cost of revenues, as the primary performance measure. Gross margin represents our profitability with minimal exposure to commodity price fluctuations, which we believe are not significant components of our operations. Marlin also uses adjusted EBITDA to analyze its performance and defines it as net income (loss) before interest expense (net of amounts capitalized) or interest income, income tax, non-cash equity based compensation, depreciation expense and any gain/loss from interest rate derivatives. Although Marlin has not quantified distributable cash flow on a historical basis, since the closing of the IPO Marlin now computes and presents this measure, defined as adjusted EBITDA plus interest income, less cash paid for interest expense, income tax, and maintenance capital expenditures.
Gross margin, adjusted EBITDA and distributable cash flow are non-GAAP supplemental financial measures that management and external users of Marlin's condensed consolidated and combined financial statements, such as industry analysts, investors, commercial banks and others, may use to assess:
Marlin's partnership agreement requires that, within 45 days after the end of each quarter, all of Marlin's available cash be distributed to unitholders of record on the applicable record date.
Note Regarding Non-GAAP Financial Measures
Gross margin, adjusted EBITDA, and distributable cash flow are not financial measures presented in accordance with GAAP. Marlin believes that the presentation of these non-GAAP financial measures will provide useful information to investors in assessing Marlin's financial condition and results of operations. The GAAP measure most directly comparable to gross margin is operating income. The GAAP measure most directly comparable to adjusted EBITDA and distributable cash flow is net income. These measures should not be considered as an alternative to operating income, net income, or any other measure of financial performance presented in accordance with GAAP. Each of these non-GAAP financial measures has important limitations as an analytical tool because it excludes some but not all items that affect net income. You should not consider these non-GAAP financial measures in isolation or as a substitute for analysis of Marlin's results as reported under GAAP. Additionally, because each of these non-GAAP financial measures may be defined differently by other companies in the industry, Marlin's definition of them may not be comparable to similarly titled measures of other companies, thereby diminishing their utility.
The Partnership's revenues are derived from two operating segments: gathering and processing, and crude oil logistics. These segments, along with our corporate segment, are monitored separately by management for performance and are consistent with internal financial reporting. These segments have been identified based on the differing products and services, regulatory environment, and expertise required for their respective operations.
The following table presents financial information by segment:
KEY PERFORMANCE METRICS
Management uses a variety of financial and operating metrics to analyze performance. These metrics are significant factors in assessing the results of operations and profitability and include: (i) gross margin; (ii) volume commitments and throughput volumes (including gathering, plant, and transloader throughput); (iii) operation and maintenance expenses; (iv) adjusted EBITDA; and (v) distributable cash flow.
Gross margin is calculated as follows:
Adjusted EBITDA is calculated as follows:
Distributable cash flow is calculated as follows:
CONTACT: Investor Contact: Financial Profiles, Inc. Kristen Papke, (206) 623-2233 FISH@finprofiles.com