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Press release from GlobeNewswire (a Nasdaq OMX company)

Martin Midstream Partners Reports 2011 Fourth Quarter and Annual Financial Results

Wednesday, February 29, 2012

Martin Midstream Partners Reports 2011 Fourth Quarter and Annual Financial Results13:00 EST Wednesday, February 29, 2012KILGORE, Texas, Feb. 29, 2012 (GLOBE NEWSWIRE) -- Martin Midstream Partners L.P. (Nasdaq:MMLP) (the "Partnership") announced today its financial results for the fourth quarter and year ended December 31, 2011. The Partnership reported net income for the fourth quarter of 2011 of $2.9 million, or $0.06 per limited partner unit. This compared to net income for the fourth quarter of 2010 of $6.5 million, or $0.30 per limited partner unit. Revenues for the fourth quarter of 2011 were $345.5 million compared to $262.1 million for the fourth quarter of 2010. Fourth quarter 2011 net income was positively impacted by a $0.1 million, or $0.00 per limited partner unit, non-cash derivative gain from certain commodity and interest rate swaps that are not accounted for using hedge accounting. Fourth quarter 2010 net income was negatively impacted by a $4.0 million, or $0.23 per limited partner unit, non-cash derivative loss from certain commodity and interest rate swaps that are not accounted for using hedge accounting. The Partnership reported net income for the year ended December 31, 2011 of $24.3 million, or $0.92 per limited partner unit. This compared to net income for the year ended December 31, 2010 of $16.0 million, or $0.63 per limited partner unit. Revenues for the year ended December 31, 2011 were $1.2 billion, compared to revenues of $912.1 million for the year ended December 31, 2010. Net income for the year ended December 31, 2011 was positively impacted by a $3.3 million, or $0.17 per limited partner unit, non cash derivative gain from certain commodity and interest rate swaps that are not accounted for using hedge accounting. Net income for the year ended December 31, 2011 was positively impacted by $2.8 million, or $0.14 per limited partner unit, due to payments received in the third quarter for the early extinguishment of interest rate swaps. Net income for the year ended December 31, 2010 was negatively impacted by $4.2 million, or $0.24 per limited partner unit, due to the payment of fees for the early extinguishment of interest rate swaps in the first quarter 2010 ($3.8 million) and non-cash derivative losses from certain commodity and interest rate swaps that are not accounted for using hedge accounting ($0.4 million). The Partnership's distributable cash flow for the three months ended December 31, 2011 was $16.1 million and for the year ended December 31, 2011 was $62.7 million. Distributable cash flow is a non-GAAP financial measure which is explained in greater detail below under "Use of Non-GAAP Financial Information." The Partnership has also included below a table entitled "Distributable Cash Flow" in order to show the components of this non-GAAP financial measure and its reconciliation to the most comparable GAAP measurement. Ruben Martin, President and Chief Executive Officer of MMGP, the general partner of the Partnership, said, "The fourth quarter 2011 demonstrated again the effectiveness of our diverse operations. For the quarter we finished with a distribution coverage ratio of 0.98 times. For the year ended December 31, 2011 our distribution coverage was 0.97 times. While these levels are not where we need to be long-term, we have invested and will continue to invest heavily in future growth. Much of this growth is organic and requires long lead times. Accordingly, we are incurring indebtedness that impacts our coverage during the construction periods of our projects. Since the beginning of the fourth quarter, we have spent approximately $50 million of growth capital yet to realize full cash flow potential. These include previously announced projects such as our Corpus Christi crude oil terminal, the Cross vacuum tower and the Waskom rail rack and capacity expansion. We expect these projects will enhance the cash flow of the Partnership for 2012.  "During the fourth quarter we saw one very strong segment; two segments performed at or near plan and one segment fell short of expectations. As we have seen over time, the portfolio effect of having such a diverse set of operations serves our unit holders well.  "Our Sulfur Services segment was strong during the fourth quarter. Margins were strong in both molten sulfur handling and in our fertilizer division. Sulfur based fertilizer had its best year for the Partnership during 2011. We saw strong demand for our products that continued well beyond the normal seasonal trough we see outside of the growing season.  "Our Terminalling and Storage segments performed close to plan during the quarter. Terminalling and Storage, as our largest and most stable segment, is itself also diverse. For most of 2011, throughput volumes at our shore-based terminals remained challenged by lower overall offshore Gulf of Mexico activity. We believe we are well positioned as drilling permits and rig count slowly begin to gain traction. For the year ended 2011, our specialty terminals division provided a stable offset to the shore-based terminal weakness. Contracts for storage of hard-to-handle products tend to be longer-term in nature providing for more stable, fee-based cash flow. This includes our naphthenic lube oil processing facility that performed well during 2011.  "Our Marine Transportation segment was stable for the quarter and performed near expectations. We saw continued high utilization of our inland fleet, partially offset by slightly weaker conditions for our offshore assets throughout 2011. We expect our inland marine assets to be nearly fully utilized in 2012. Further, we believe liquids off-take from the shale plays like the Eagle Ford will ultimately result in increased demand and stability for offshore tows like ours which have been historically more volatile working in the spot market. "Our Natural Gas Services segment experienced the most head wind in the fourth quarter. Like others, we are not immune to the current market conditions seen in natural gas. Continued low natural gas prices and migration of producers' capital spending to liquids-rich plays have resulted in underperformance within this segment. In addition, we recently lost a key producer whose volume was dedicated to our Waskom facility. This resulted in our processing levels at Waskom coming in below plan. In this pricing environment, we continue to believe producers will seek liquids-rich production areas which are central to our gathering systems and the Waskom facility."                                    Included with this press release are the Partnership's consolidated financial statements as of and for the quarter and year ended December 31, 2011 and certain prior periods.  These financial statements should be read in conjunction with the information contained in the Partnership's Annual Report on Form 10-K, filed with the SEC on March 5, 2012. Investors' Conference Call An investors' conference call to review the fourth quarter and fiscal year results will be held on Thursday, March 1, 2012 at 8:00 a.m. Central Time. The conference call can be accessed by calling (877) 878-2695. An audio replay of the conference call will be available by calling (855) 859-2056 from 11:00 a.m. Central Time on March 1, 2012 through 10:59 p.m. Central Time on March 15, 2012. The access code for the conference call and the audio replay is Conference ID No. 47532709. The audio replay of the conference call will also be archived on Martin Midstream Partners' website at www.martinmidstream.com. About Martin Midstream Partners LP Martin Midstream Partners LP is a publicly traded limited partnership with a diverse set of operations focused primarily in the United States Gulf Coast region. The Partnership's primary business lines include: terminalling and storage services for petroleum products and by-products; natural gas gathering, processing and NGL distribution; sulfur and sulfur-based products processing, manufacturing, and distribution; and marine transportation services for petroleum products and by-products. Additional information concerning the Partnership is available on the Partnership's website at www.martinmidstream.com. Forward-Looking Statements Statements about the Partnership's outlook and all other statements in this release other than historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements and all references to financial estimates rely on a number of assumptions concerning future events and are subject to a number of uncertainties and other factors, many of which are outside its control, which could cause actual results to differ materially from such statements. While the Partnership believes that the assumptions concerning future events are reasonable, it cautions that there are inherent difficulties in anticipating or predicting certain important factors. A discussion of these factors, including risks and uncertainties, is set forth in the Partnership's annual and quarterly reports filed from time to time with the SEC. The Partnership disclaims any intention or obligation to revise any forward-looking statements, including financial estimates, whether as a result of new information, future events, or otherwise. Use of Non-GAAP Financial Information The Partnership reports its financial results in accordance with United States generally accepted accounting principles (GAAP).  However, from time to time, the Partnership uses certain non-GAAP financial measures such as distributable cash flow because the Partnership's management believes that this measure may provide users of this financial information with meaningful comparisons between current results and prior reported results and a meaningful measure of the Partnership's cash available to pay distributions. Distributable cash flow should not be considered an alternative to cash flow from operating activities or any other measure of financial performance in accordance with GAAP. Distributable cash flow is not intended to represent cash flows for the period, nor is it presented as an alternative to income from continuing operations. Furthermore, it should not be seen as a measure of liquidity or a substitute for comparable metrics prepared in accordance with GAAP. This information may constitute non-GAAP financial measures within the meaning of Regulation G adopted by the SEC.  Accordingly, the Partnership has presented herein, and will present in other information it publishes that contains this non-GAAP financial measure, a reconciliation of this measure to the most directly comparable GAAP financial measure. The Partnership has included below a table entitled "Distributable Cash Flow" in order to show the components of this non-GAAP financial measure and its reconciliation to the most comparable GAAP measure. The Partnership calculates distributable cash flow as follows: net income (as reported in statements of operations), plus depreciation and amortization, amortization of debt discount, and amortization of deferred debt issue costs (as reported in statements of cash flows), plus (less) deferred income taxes (as reported in statements of cash flows), plus costs related to the early extinguishment of interest rate swaps (as reported under the caption "Long-Term Debt and Capital Leases" in the Partnership's Annual Report on Form 10-K to be filed with the SEC on March 5, 2012), plus distribution equivalents from unconsolidated entities (as described below), plus (less) invested cash in unconsolidated entities (as described below), less equity in earnings of unconsolidated entities (as reported in statements of operations), plus non-cash mark-to-market on derivatives (as reported in statements of cash flows), less maintenance capital expenditures (as reported under the caption "Liquidity and Capital Resources" in the Partnership's Annual Report on Form 10-K to be filed with the SEC on March 5, 2012), plus (less) gain/(loss) on disposition or sale of property, plant and equipment (as reported in statements of cash flows), less payments for plant turn around costs (as reported in statements of cash flows), plus unit-based compensation (as reported in statements of changes in capital). The Partnership's distribution equivalents from unconsolidated entities is calculated as distributions from unconsolidated entities (as reported in statements of cash flows), plus return of investments from unconsolidated entities (as reported in statements of cash flows), plus distributions in-kind from unconsolidated entities (as reported in statements of cash flows). For the quarter ended December 31, 2011, the Partnership's distributions from unconsolidated entities, return of investments from unconsolidated entities and distributions in-kind from equity investments were $0.0 million, $1.2 million and $3.7 million, respectively. For the year ended December 31, 2011, the Partnership's distributions from unconsolidated entities, return of investments from unconsolidated entities and distributions in-kind from equity investments were $0.0 million, $2.9 million and $12.7 million, respectively. The Partnership's invested cash in unconsolidated entities is calculated as distributions from (contributions to) unconsolidated entities for operations (as reported in statements of cash flows), plus expansion capital expenditures in unconsolidated entities (as reported under the caption "Liquidity and Capital Resources" in the Partnership's Annual Report on Form 10-K to be filed with the SEC on March 5, 2012). For the quarter ended December 31, 2011, the Partnership's distributions from (contributions to) unconsolidated entities for operations and capital expenditures in unconsolidated entities were $(9.4) million and $9.0 million, respectively. For the year ended December 31, 2011, the Partnership's distributions from (contributions to) unconsolidated entities for operations and capital expenditures in unconsolidated entities were $(19.0) million and $18.8 million, respectively. Contact:   Robert D. Bondurant, Executive Vice President and Chief Financial Officer of Martin Midstream GP LLC, the Partnership's general partner at (903) 983-6200.MARTIN MIDSTREAM PARTNERS L.P.CONSOLIDATED BALANCE SHEETS        December 31,  20112010  (Dollars in thousands)Assets           Cash  $ 266 $ 11,380 Accounts and other receivables, less allowance for doubtful accounts of $3,021 and $2,528, respectively  126,461 95,276 Product exchange receivables  17,646 9,099 Inventories  78,163 52,616 Due from affiliates  5,968 6,437 Fair value of derivatives  622 2,142 Other current assets  1,978 2,784 Total current assets  231,104 179,734       Property, plant and equipment, at cost  711,052 632,456 Accumulated depreciation  (233,710) (200,276) Property, plant and equipment, net  477,342 432,180       Goodwill  37,268 37,268 Investment in unconsolidated entities  170,497 98,217 Debt issuance costs, net  13,330 13,497 Other assets  19,568 24,582   $ 949,109 $ 785,478Liabilities and Partners' Capital           Current installments of long-term debt and capital lease obligations  $ 1,261 $ 1,121 Trade and other accounts payable  125,970 82,837 Product exchange payables  37,313 22,353 Due to affiliates  18,485 6,957 Income taxes payable  893 811 Fair value of derivatives  362 282 Other accrued liabilities  11,022 10,034 Total current liabilities  195,306 124,395       Long-term debt and capital leases, less current maturities  458,941 372,862 Deferred income taxes  7,657 8,213 Fair value of derivatives  — 4,100 Other long-term obligations  1,589 1,102 Total liabilities  663,493 510,672       Partners' capital  284,990 273,387 Accumulated other comprehensive loss  626 1,419 Total partners' capital  285,616 274,806 Commitments and contingencies        $ 949,109 $ 785,478       These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in the Partnership's Annual Report on Form 10-K filed with the SEC on March 5, 2012.      MARTIN MIDSTREAM PARTNERS L.P.CONSOLIDATED STATEMENTS OF OPERATIONS        Year Ended December 31,  201120102009¹  (Dollars in thousands, except per unit amounts) Revenues:    Terminalling and storage *   $ 77,283 $ 67,117 $ 69,710 Marine transportation *   76,936 77,642 68,480 Sulfur services *   11,400 — — Product sales: *       Natural gas services 733,087 554,482 408,982 Sulfur services 263,644 165,078 79,629 Terminalling and storage  74,723   47,799  35,584    1,071,454  767,359  524,195 Total revenues  1,237,073  912,118  662,385         Costs and expenses:       Cost of products sold: (excluding depreciation and amortization)       Natural gas services *    704,073 527,232 382,542 Sulfur services * 219,697 122,121 43,386 Terminalling and storage  67,134  44,549  31,331   990,904 693,902 457,259 Expenses:       Operating expenses * 140,197 116,402 117,438 Selling, general and administrative * 22,665 21,118 19,775 Depreciation and amortization  44,957  40,656  39,506 Total costs and expenses  1,198,723  872,078  633,978 Other operating income  1,326  136  6,013 Operating income  39,676   40,176  34,420         Other income (expense):       Equity in earnings of unconsolidated entities 9,536 9,792 7,044 Interest expense (24,518) (33,716) (18,995) Other, net   233  287  326 Total other income (expense)  (14,749)  (23,637)  (11,625) Net income before taxes 24,927 16,539 22,795 Income tax benefit (expense)    (585)  (517)  (592) Net income  $  24,342  $   16,022  $  22,203         General partner's interest in net income $ 5,289 $ 3,869 $ 3,249 Limited partners' interest in net income $ 17,945 $ 11,045 $ 17,179         Net income per limited partner unit - basic and diluted  $  0.92    $   0.63  $     1.17 Weighted average limited partner units - basic  19,545,427  17,525,089  14,680,807 Weighted average limited partner units - diluted 19,546,705 17,525,989 14,684,775         ¹ General and limited partner's interest in net income includes net income of the Cross assets since the date of the acquisition               These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in the Partnership's Annual Report on Form 10-K filed with the SEC on March 5, 2012.               *Related Party Transactions Included Above       Revenues:       Terminalling and storage $ 54,211 $ 46,823 $ 19,998 Marine transportation 23,478 28,194 19,370 Product Sales 15,561 14,998 5,838 Costs and expenses:       Cost of products sold: (excluding depreciation and amortization)       Natural gas services  106,312 79,321 56,914 Sulfur services 18,314 16,061 12,583 Expenses:       Operating expenses 59,134 49,286 37,284 Selling, general and administrative 12,852 10,918 7,162    MARTIN MIDSTREAM PARTNERS L.P.CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Dollars in thousands)        Year Ended December 31,  201120102009  (Dollars in thousands)  Net income $ 24,342 $ 16,022 $ 22,203  Changes in fair values of commodity cash flow hedges 1,011 143 14  Commodity cash flow hedging (gains) losses reclassified to earnings   (1,822)   (617)   (2,646)  Changes in fair value of interest rate cash flow hedges — (241) (1,854)  Interest rate cash flow hedging losses reclassified to earnings  18  4,210  7,345          Comprehensive income  $ 23,549  $ 19,517  $ 25,062         These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in the Partnership's Annual Report on Form 10-K filed with the SEC on March 5, 2012.              MARTIN MIDSTREAM PARTNERS L.P.CONSOLIDATED STATEMENTS OF CHANGES IN CAPITALFor the years ended December 31, 2011, 2010 and 2009               Partners' Capital     Parent Net   Common  Subordinated General PartnerAccumulatedComprehensiveIncome  Investment UnitsAmountUnitsAmountAmountAmountTotal  (Dollars in thousands) Balances – December 31, 2008 $ 11,665 13,688,152 $ 239,333  850,674 $ (3,688) $ 4,004 $ (4,935) $ 246,379                   Net Income 1,664 — 16,310 — 980 3,249 — 22,203                   General partner contribution — — — — — 1,324 — 1,324                   Units issued in connection with Cross acquisition   804,721 16,523 889,444 16,434 — — 32,957                   Recognition of beneficial conversion feature — — (111) — 111 — — —                   Issuance of common units — 714,285 20,000 — — — — 20,000                   Cash distributions ($3.00 per unit) — — (41,064) — (2,552) (3,846) —  (47,462)                   Conversion of subordinated units to common units — 850,674 (5,328) (850,674)  5,328 — — —                   Unit-based compensation — 3,000 98 — — — — 98                   Purchase of treasury units — (3,000) (78) — — — — (78)                   Contributions to parent (13,329) — — — — — — (13,329)                   Adjustment in fair value of derivatives  —  —  —  —  —   —  2,859  2,859                   Balances – December 31, 2009 $ —  16,057,832 $ 245,683  889,444 $ 16,613 $ 4,731 $ (2,076) $ 264,951                   Net Income — — 12,153 — — 3,869 — 16,022                   Recognition of beneficial conversion feature — — (1,108) — 1,108 — — —                   Follow-on public offerings — 2,650,000 78,600 — — — — 78,600                   Redemption of common units — (1,000,000) (28,070) — — — — (28,070)                   General partner contribution — — — — — 1,089 — 1,089                   Excess purchase price over carrying value of acquired assets — — (4,590) — — — — (4,590)                   Cash distributions ($3.00 per unit) — — (51,886) —  — (4,810) —  (56,696)                   Unit-based compensation — 3,500 113 —  — — — 113                   Purchase of treasury units —  (3,500) (108) —  — — — (108)                   Adjustment in fair value of derivatives  —  —  —  —  —  —  3,495  3,495                   Balances – December 31, 2010 $ —  17,707,832 $ 250,787  889,444 $ 17,721 $ 4,879 $ 1,419 $ 274,806                   Net income  —  — 19,053 — — 5,289 — 24,342                   Recognition of beneficial conversion feature — — (1,108) — 1,108 — — —                   Follow-on public offering — 1,874,500 70,330 — — — — 70,330                   General partner contribution — — — — — 1,505 — 1,505                   Conversion of subordinated units to common units — 889,444 18,829 (889,444)  (18,829) — — —                   Cash distributions ($3.05 per unit)  —  —  (58,252) —  —  (6,245) — (64,497)                   Excess purchase price over carrying value of acquired assets  —  —  (19,685) —  — — — (19,685)                   Unit-based compensation —  14,850 190 —  — — — 190                   Purchase of treasury units — ( 14,850) (582) — — — — (582)                   Adjustment in fair value of derivatives  —  —  —  —  —  —  (793)   (793)   Balances – December 31, 2011 $ — 20,471,776 $ 279,562  — $ — $ 5,428 $ 626 $ 285,616                   These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in the Partnership's Annual Report on Form 10-K filed with the SEC on March 5, 2012.                    MARTIN MIDSTREAM PARTNERS L.P.CONSOLIDATED STATEMENTS OF CASH FLOWS        Year Ended December 31,  201120102009  (Dollars in thousands) Cash flows from operating activities:         Net income  $ 24,342 $ 16,022 $ 22,203             Adjustments to reconcile net income to net cash provided by operating activities:         Depreciation and amortization 44,957 40,656 39,506   Amortization of deferred debt issue costs 3,755 4,814 1,689   Amortization of discount on notes payable 351 269 —   Deferred income taxes (157) (415) 294   (Gain) loss on disposition or sale of property, plant, and equipment 898 (136) (4,996)   Gain on involuntary conversion of property, plant, and equipment — — (1,017)   Equity in earnings of unconsolidated entities (9,536) (9,792) (7,044)   Distributions from unconsolidated entities — — 650   Distribution in-kind from unconsolidated entities 12,704 10,545 5,826   Non-cash mark-to-market on derivatives (3,293) 380 2,526   Other 190 113 98   Change in current assets and liabilities, excluding effects of acquisitions and dispositions:         Accounts and other receivables (28,781) (17,863) (10,471)   Product exchange receivables (8,547) (4,967) 2,792   Inventories (25,547) (17,106) 7,135   Due from affiliates 469 (3,386) 1,560   Other current assets 407 (1,444) 2,461   Trade and other accounts payable 43,599 10,918 (15,874)   Product exchange payables 14,961 14,366 (2,938)   Due to affiliates 11,528 (6,853) 4,133   Income taxes payable 82 357 569   Other accrued liabilities 988 5,382 871   Change in other non-current assets and liabilities     3,500  (4,342)  (2,381)   Net cash provided by operating activities  86,870  37,518  47,592             Cash flows from investing activities:         Payments for property, plant, and equipment (73,994) (17,907) (35,846)   Acquisitions, net of cash acquired (16,815) (41,762) (327)   Payments for plant turnaround costs (2,103) (1,090) —   Proceeds from sale of property, plant, and equipment 1,025 2,419 19,445   Insurance proceeds from involuntary conversion of property, plant and equipment — — 2,224   Investments in unconsolidated entities (59,319) (20,110) —   Return of investments from unconsolidated entities 2,892 2,470 877   (Contributions to) unconsolidated entities for operations  (19,021)  (748)  (1,048)   Net cash used in investing activities  (167,335)  (76,728)  (14,675)             Cash flows from financing activities:         Payments of long-term debt (442,000) (441,868) (430,500)   Payments of notes payable and capital lease obligations (1,132) (111) (1,482)   Proceeds from long-term debt 529,000 503,856 433,700   Net proceeds from follow on public offering 70,330 78,600 —   General partner contribution 1,505 1,089 1,324   Redemption of common units — (28,070) —   Excess purchase price over carrying value of acquired assets (19,685) (4,590) —   Purchase of treasury units (582) (108) (78)   Proceeds from issuance of common units  —  —  20,000   Payments of debt issuance costs (3,588) (7,468) (10,446)   Cash distributions paid   (64,497)  (56,696)  (47,462)   Net cash provided by (used in) financing activities  69,351  44,634  (34,944)             Net increase (decrease) in cash (11,114) 5,424 (2,027)   Cash at beginning of period  11,380  5,956  7,983   Cash at end of period $   266 $ 11,380 $ 5,956             Supplemental schedule of non-cash investing and financing activities:         Purchase of assets under capital lease obligations  $ — $ — $ 7,764   Issuance of common and subordinated units in connection with Cross acquisition $ — $  — $ 32,957   Purchase of assets under note payable  $  — $ 7,354 $ —             These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in the Partnership's Annual Report on Form 10-K filed with the SEC on March 5, 2012.          MARTIN MIDSTREAM PARTNERS L.P.SEGMENT OPERATING INCOMEUnaudited (Dollars in thousands)      Terminalling and Storage SegmentYears Ended December 31,  20112010 Revenues:     Services  $ 81,697 $ 71,471 Products  74,723 47,799 Total revenues  156,420 119,270       Cost of products sold  70,601 44,549 Operating expenses  52,041 41,857 Selling, general and administrative expenses  242 426 Depreciation and amortization  18,983 16,650   14,553 15,788 Other operating income (loss)  (531) 244 Operating income  $ 14,022 $ 16,032      Natural Gas Services SegmentYears Ended December 31,  20112010 Revenues:     NGLs  $ 688,407 $ 501,919 Natural gas  37,945 46,812 Non-cash mark-to-market adjustment of commodity derivatives  1,322 253 Gain on cash settlements of commodity derivatives  39 582 Other operating fees  5,374 4,916 Total revenues  733,087 554,482       Cost of products sold:     NGLs  668,747 482,231 Natural gas  36,546 46,187 Total cost of products sold  705,293 528,418       Operating expenses  8,457 7,689 Selling, general and administrative expenses  7,111 8,588 Depreciation and amortization  6,090 5,023   6,136 4,764 Other operating income (loss)   —  (112) Operating income  $ 6,136 $ 4,652      Sulfur Services SegmentYears Ended December 31,  20112010 Revenues:     Services  $ 11,400 $ — Products  263,644 165,078 Total revenues  275,044 165,078       Cost of products sold  220,059 122,483 Operating expenses  19,328 17,013 Selling, general and administrative expenses  3,361 3,422 Depreciation and amortization  6,725 6,262   25,571 15,898 Other operating income (loss)  2,080 (12) Operating income  $ 27,651 $ 15,886      Marine Transportation SegmentYears Ended December 31,  20112010  (In thousands) Revenues  $ 83,971 $ 82,635 Operating expenses  66,771 57,642 Selling, general and administrative expenses  3,087 2,296 Depreciation and amortization  13,159 12,721   954 9,976 Other operating income (loss)  (223) 16 Operating income  $ 731 $ 9,992      MARTIN MIDSTREAM PARTNERS L.P.CONSOLIDATED STATEMENTS OF OPERATIONS            4th Quarter4th Quarter  20112010  (Dollars in thousands) (except per unit amounts)(Unaudited) Revenues:   Terminalling and storage $ 20,452 $ 17,055 Marine transportation 19,388 20,184 Sulfur 2,850 20,184 Product sales:     Natural gas services 218,217 156,627 Sulfur  65,334  51,133 Terminalling and storage  19,282  17,112    302,833  224,872 Total revenues  345,523  262,111       Costs and expenses:     Cost of products sold:     Natural gas services 211,952 147,799 Sulfur  55,555   35,266 Terminalling and storage  17,503  15,778   285,010 198,843 Expenses:     Operating expenses 35,467 30,088 Selling, general and administrative 5,776 6,468 Depreciation and amortization  11,306  10,590 Total costs and expenses  337,559  245,989 Other operating income (loss)  (493)  (314) Operating income  7,471  15,808       Other income (expense):     Equity in earnings of unconsolidated entities 2,582 2,323 Interest expense (7,416) (11,468) Other, net  107  170 Total other income (expense)  (4,727)  (8,975)       Income tax expense (benefit)  107  (293)       Net income $ 2,851 $ 6,540       General partner's interest in net income $ 1,297 $ 1,037 Limited partners' interest in net income $ 1,277 $ 5,226 Net income per limited partner unit — basic and diluted   $ 0.06  $ 0.30 Weighted average limited partner units 20,273,788 17,701,094       These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in the Partnership's Annual Report on Form 10-K filed with the SEC on March 5, 2012.      DISTRIBUTABLE CASH FLOW (Dollars in thousands)(Unaudited Non-GAAP Financial Measure)         Three Months Ended December 31, 2011Year Ended December 31, 2011 Net income  $ 2,852 $ 24,342 Adjustments to reconcile net income to distributable cash flow:      Depreciation and amortization  11,306 44,957 Amortization of deferred debt issue costs  684 3,755 Amortization of discount on notes payable  88 351 Deferred income taxes  (159) (155) Non cash operating lease expense  (1) 69 Payments of installment notes payable & capital lease obligations  (300) (1,132) Distribution equivalents from unconsolidated entities¹ 4,917 15,595 Invested cash in unconsolidated entities² (462) (268) Equity in earnings of unconsolidated entities  (2,583) (9,535) Non-cash mark-to-market on derivatives  68 (3,293) Maintenance capital expenditures  (838) (10,947) Payments for plant turnaround costs   — (2,103) Gain on disposition or sale of property, plant and equipment  494 899 Unit based compensation  59 190 Distributable cash flow  $ 16,125 $ 62,725                    Three Months Ended December 31, 2011Year Ended December 31, 2011¹Distribution equivalents from unconsolidated entities:     Distributions from unconsolidated entities  $ — $ — Return of investments from unconsolidated entities  1,224 2,891 Distributions in-kind from unconsolidated entities  3,693 12,704 Distribution equivalents from unconsolidated entities $ 4,917 $ 15,595²Invested cash in unconsolidated entities:     Distributions from (contributions to) unconsolidated entities for operations $ (9,417) $ (19,021) Expansion capital expenditures in unconsolidated entities 8,955 18,753 Invested cash in unconsolidated entities $ (462) $ (268)CONTACT: Joe McCreery, Head of Investor Relations, Martin Midstream Partners L.P. Phone: (903) 988-6425 joe.mccreery@martinmlp.com