Martin Midstream Partners L.P. Ltd. Part (MMLP, Financial) filed Quarterly Report for the period ended 2009-09-30.
Martin Midstream is a limited partnership which stores and transports hydrocarbon products and specialty chemicals primarily in the Gulf Coast. It runs a marine transportation business mostly barges and tugs and operates storage tanks. Martin Midstream Partners L.p. Ltd. Part has a market cap of $370.7 million; its shares were traded at around $27.09 with a P/E ratio of 12.2 and P/S ratio of 0.3. The dividend yield of Martin Midstream Partners L.p. Ltd. Part stocks is 11.1%.
In connection with the closing of the Contribution, Martin Resource Management and we have agreed to enter into a long-term, fee for services-based Tolling Agreement whereby Martin Resource Management agrees to pay us for the processing of its crude oil into finished products, including naphthenic lubricants, distillates, asphalt and other intermediate cuts. Under the Tolling Agreement, Martin Resource Management has generally agreed to refine a minimum of 6,500 barrels per day of crude oil at the refinery at a price of $4.00 per barrel. Any additional barrels will refined at a price of $4.28 per barrel. In addition, Martin Resource Management has agreed to pay a monthly reservation fee of $1.3 million and a periodic fuel surcharge fee based on certain parameters specified in the Tolling Agreement. All of these fees (other than the fuel surcharge) are subject to escalation annually based upon the greater of 3% or the increase in the Consumer Price Index for a specified annual period. In addition, every three years, the parties can negotiate an upward or downward adjustment in the fees subject to their mutual agreement. The Tolling Agreement will have a 12 year term, subject to certain termination rights specified therein. Martin Resource Management will continue to market and distribute all finished products under the Cross brand name. In addition, Martin Resource Management will continue to own and operate the Cross packaging business. The closing of the Contribution is subject to standard closing conditions, including the approval of the lenders under Martin Resource Managements credit facility and the approval of the assignment of various regulatory licenses and permits. Closing is anticipated prior to the end of November 2009.
In addition, on November 4, 2009, we entered into a separate Unit Purchase Agreement with Martin Resource Management, under which Martin Resource Management will invest $20.0 million in cash in us in exchange for 715,308 newly-issued common units (the Investment). In connection with the Investment, our general partner will make a capital contribution to us of $0.4 million in order to maintain its 2% general partner interest in us. The closing of the Investment is subject to standard closing conditions, including the approval of the lenders under Martin Resource Managements credit facility. Closing is anticipated prior to the end of November 2009. Proceeds from the Investment will be used by us to repay a portion of indebtedness under its credit facility.
We are a party to an omnibus agreement with Martin Resource Management. The omnibus agreement requires us to reimburse Martin Resource Management for all direct expenses it incurs or payments it makes on our behalf or in connection with the operation of our business. We reimbursed Martin Resource Management for $15.2 million of direct costs and expenses for the three months ended September 30, 2009 compared to $16.8 million for the three months ended September 30, 2008. We reimbursed Martin Resource Management for $45.3 million of direct costs and expenses for the nine months ended September 30, 2009 compared to $50.6 million for the nine months ended September 30, 2008. There is no monetary limitation on the amount we are required to reimburse Martin Resource Management for direct expenses.
In addition to the direct expenses, under the omnibus agreement, the reimbursement amount that we are required to pay to Martin Resource Management with respect to indirect general and administrative and corporate overhead expenses was capped at $2.0 million. This cap expired on November 1, 2007. Effective October 1, 2008 through September 30, 2009, the conflicts committee of our general partner approved an annual reimbursement amount for indirect expenses of $3.5 million. We reimbursed Martin Resource
Management for $0.9 and $0.7 million of indirect expenses for the three months ended September 30, 2009 and 2008, respectively. We reimbursed Martin Resource Management for $2.6 and $2.0 million of indirect expenses for the nine months ended September 30, 2009 and 2008, respectively. These indirect expenses covered the centralized corporate functions Martin Resource Management provides for us, such as accounting, treasury, clerical billing, information technology, administration of insurance, general office expenses and employee benefit plans and other general corporate overhead functions we share with Martin Resource Management retained businesses. The omnibus agreement also contains significant non-compete provisions and indemnity obligations. Martin Resource Management also licenses certain of its trademarks and trade names to us under the omnibus agreement.
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Martin Midstream is a limited partnership which stores and transports hydrocarbon products and specialty chemicals primarily in the Gulf Coast. It runs a marine transportation business mostly barges and tugs and operates storage tanks. Martin Midstream Partners L.p. Ltd. Part has a market cap of $370.7 million; its shares were traded at around $27.09 with a P/E ratio of 12.2 and P/S ratio of 0.3. The dividend yield of Martin Midstream Partners L.p. Ltd. Part stocks is 11.1%.
Highlight of Business Operations:
(Assets) from Cross for total consideration of $45.0 million (the Contribution). In consideration for the Cross Assets, we will issue 804,721 common units and 894,134 subordinated units to Martin Resource Management at a price of $27.96 and $25.16 per limited partner unit, respectively. The common units will be entitled to receive distributions beginning in February 2010, while the subordinated units will have no distribution rights until the second anniversary of closing of the Contribution. At the end of such second anniversary, the subordinated units will automatically convert to common units, having the same distribution rights as existing common units. The pricing of the units is based on the average closing price of our common units during the ten trading days ending November 3, 2009, with a 10% discount applied to the average in the case of the subordinated units. In connection with the Contribution, our general partner, will make a capital contribution of $0.9 million to us in order to maintain its 2% general partner interest in us.In connection with the closing of the Contribution, Martin Resource Management and we have agreed to enter into a long-term, fee for services-based Tolling Agreement whereby Martin Resource Management agrees to pay us for the processing of its crude oil into finished products, including naphthenic lubricants, distillates, asphalt and other intermediate cuts. Under the Tolling Agreement, Martin Resource Management has generally agreed to refine a minimum of 6,500 barrels per day of crude oil at the refinery at a price of $4.00 per barrel. Any additional barrels will refined at a price of $4.28 per barrel. In addition, Martin Resource Management has agreed to pay a monthly reservation fee of $1.3 million and a periodic fuel surcharge fee based on certain parameters specified in the Tolling Agreement. All of these fees (other than the fuel surcharge) are subject to escalation annually based upon the greater of 3% or the increase in the Consumer Price Index for a specified annual period. In addition, every three years, the parties can negotiate an upward or downward adjustment in the fees subject to their mutual agreement. The Tolling Agreement will have a 12 year term, subject to certain termination rights specified therein. Martin Resource Management will continue to market and distribute all finished products under the Cross brand name. In addition, Martin Resource Management will continue to own and operate the Cross packaging business. The closing of the Contribution is subject to standard closing conditions, including the approval of the lenders under Martin Resource Managements credit facility and the approval of the assignment of various regulatory licenses and permits. Closing is anticipated prior to the end of November 2009.
In addition, on November 4, 2009, we entered into a separate Unit Purchase Agreement with Martin Resource Management, under which Martin Resource Management will invest $20.0 million in cash in us in exchange for 715,308 newly-issued common units (the Investment). In connection with the Investment, our general partner will make a capital contribution to us of $0.4 million in order to maintain its 2% general partner interest in us. The closing of the Investment is subject to standard closing conditions, including the approval of the lenders under Martin Resource Managements credit facility. Closing is anticipated prior to the end of November 2009. Proceeds from the Investment will be used by us to repay a portion of indebtedness under its credit facility.
We are a party to an omnibus agreement with Martin Resource Management. The omnibus agreement requires us to reimburse Martin Resource Management for all direct expenses it incurs or payments it makes on our behalf or in connection with the operation of our business. We reimbursed Martin Resource Management for $15.2 million of direct costs and expenses for the three months ended September 30, 2009 compared to $16.8 million for the three months ended September 30, 2008. We reimbursed Martin Resource Management for $45.3 million of direct costs and expenses for the nine months ended September 30, 2009 compared to $50.6 million for the nine months ended September 30, 2008. There is no monetary limitation on the amount we are required to reimburse Martin Resource Management for direct expenses.
In addition to the direct expenses, under the omnibus agreement, the reimbursement amount that we are required to pay to Martin Resource Management with respect to indirect general and administrative and corporate overhead expenses was capped at $2.0 million. This cap expired on November 1, 2007. Effective October 1, 2008 through September 30, 2009, the conflicts committee of our general partner approved an annual reimbursement amount for indirect expenses of $3.5 million. We reimbursed Martin Resource
Management for $0.9 and $0.7 million of indirect expenses for the three months ended September 30, 2009 and 2008, respectively. We reimbursed Martin Resource Management for $2.6 and $2.0 million of indirect expenses for the nine months ended September 30, 2009 and 2008, respectively. These indirect expenses covered the centralized corporate functions Martin Resource Management provides for us, such as accounting, treasury, clerical billing, information technology, administration of insurance, general office expenses and employee benefit plans and other general corporate overhead functions we share with Martin Resource Management retained businesses. The omnibus agreement also contains significant non-compete provisions and indemnity obligations. Martin Resource Management also licenses certain of its trademarks and trade names to us under the omnibus agreement.
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