Q2 2024 Martin Midstream Partners L.P. Earnings Call
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Atra: Good morning, my name is Atra and I will be your conference operator today. At this time, I would like to welcome everyone to the MMLP second quarter 2024 earnings call. Today's conference is being recorded.
Audra: Good morning, my name is Audra, and I will be your conference operator today. At this time, I would like to welcome everyone to the second quarter earnings call. Today's conference is being recorded. All lines have been placed on mute to prevent any background noise.
Audra: Good morning. My name is Audra and I will be your conference operator today.
Speaker Change: At this time, I would like to welcome everyone to the MMLP second quarter 2024 earnings call.
Operator: All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press the star key followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again.
Speaker Change: Today's conference is being recorded.
Speaker Change: All lines have been placed on mute to prevent any background noise.
Audra: After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press the star key followed by the number 1 on your telephone keypad. If you would like to withdraw your question, press star 1 again. At this time, I would like to turn the conference over to Sharon Taylor, Chief Financial Officer. Please go ahead. Thank you.
Speaker Change: After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press the star key followed by the number 1 on your telephone keypad. If you would like to withdraw your question, press star 1 again.
Sharon Taylor: At this time, I would like to have a conference offer to Sharon Taylor, Chief Financial Officer. Please go ahead.
Speaker Change: At this time I would like to turn the conference over to Sharon Taylor, Chief Financial Officer. Please go ahead.
Sharon L. Taylor: Good morning, everyone, and welcome to the Martin Midstream Partners conference call to discuss second quarter 2024 earnings. During this call, we will make forward-looking statements as defined by the SEC. These statements are based upon our current beliefs as well as assumptions made by the management team and information currently available to us. Please refer to our earnings press release issued yesterday afternoon and posted on our website, as well as our latest filings with the SEC, for a list of factors that could impact the future performance of Martin and cause our actual results to differ materially from our expectations.
Sharon Taylor: Thank you.
Sharon Taylor: Good morning, everyone, and welcome to the Martin Midstream Partners conference call to discuss second quarter 2024 earnings. During this call, we will make forward-looking statements as defined by the SEC. These statements are based upon our current beliefs as well as assumptions made by the management team and information currently available to us. Please refer to our earnings press release issued yesterday afternoon and posted on our website, as well as our latest findings with the SEC for listed factors that could impact the future performance of Martin and cause our actual results to differ materially from our expectations.
Sharon L. Taylor: Thank you. Good morning, everyone, and welcome to the Martin Midstream Partners conference call to discuss second quarter 2024 earnings.
Speaker Change: During this call, we will make forward-looking statements as defined by the SEC. These statements are based upon our current beliefs as well as assumptions made by the management team and information currently available to us.
Speaker Change: Please refer to our earnings press release issued yesterday afternoon and posted on our website, as well as our latest filings with the SEC for a list of factors that could impact the future performance of Martin and cause our actual results to differ materially from our expectations.
Sharon L. Taylor: We will discuss non-GAAP financial measures on today's call. The earnings press release includes a reconciliation of these non-GAAP financial measures to their comparable GAAP financial measures. With me on the call today are Bob Bondurant, CEO of Martin Midstream, Randy Tauscher, COO, David Cannon, controller, and Danny Cavan, director of FP&A. Now I'll turn it over to Bob to discuss second quarter earnings.
Sharon Taylor: We will discuss non-GAAP financial measures on today's call. The earnings press release includes a reconciliation of these non-GAAP financial measures to their comparable GAAP financial measures.
Speaker Change: We will discuss non-GAAP financial measures on today's call. The earnings press release includes a reconciliation of these non-GAAP financial measures to their comparable GAAP financial measures.
Sharon Taylor: With me on the call today, are Bob Bondrand, CEO of Martin Midstream, Randy Tassler, CEO of David Cannon, Controller, and Danny Cabin, Director of SPNA.
Speaker Change: With me on the call today are Bob Bondurant, CEO of Martin Midstream, Randy Tauscher, COO, David Cannon, Controller, and Danny Cavan, Director of FP&A. Now I'll turn it over to Bob to discuss second quarter earnings.
Bob Bondurant: Now I'll turn it over to Bob to discuss second quarter earnings. Thanks, Sharon. I would like to begin the discussion by focusing on our overall second quarter operating performance. For the second quarter, we exceeded guidance by 0.5 million, as we had adjusted it by 31.7 million compared to second quarter guidance of 31.2 million. We exceeded guidance by 0.5 million, despite two separate and distinct casualty losses that total 2 million in the second quarter. I will discuss these events later in my segment comments. For the second quarter, our largest cash flow generator was once again our transportation segment, which had adjusted EBITDA of 11.2 million compared to guidance of 10.2 million.
Robert D. Bondurant: I would like to begin the discussion by focusing on our overall second quarter operating performance. For the second quarter, we exceeded guidance by 0.5 million as we had adjusted EBITDA of $31.7 million compared to second quarter guidance of $31.2 million. We exceeded guidance by 0.5 million despite two separate and distinct casualty losses that totaled $2 million in the second quarter. I will discuss these events later in my segment comment.
Bob: Thanks, Sharon.
Robert D. Bondurant: I would like to begin the discussion by focusing on our overall second quarter operating performance.
Speaker Change: For the second quarter, we exceeded guidance by 0.5 million as we had adjusted EBITDA of $31.7 million compared to second quarter guidance of $31.2 million.
Speaker Change: We exceeded guidance by 0.5 million despite two separate and distinct casualty losses that totaled 2 million in the second quarter.
Speaker Change: I will discuss these events later in my segment comments.
Robert D. Bondurant: For the second quarter, our largest cash flow generator was once again our transportation segment, which had adjusted EBITDA of $11.2 million compared to guidance of $10.2 million. Within this segment, our land transportation business had adjusted EBITDA of $8.2 million compared to guidance of $6.5 million. Our revenue exceeded forecast by $1.4 million as we beat our second quarter forecasted mileage by 5%. Also, operating expenses were $0.4 million below forecast, primarily due to lower truck and trailer operating costs when compared to forecast. This operating expense trend relative to guidance should continue as we slowly replace older equipment with new.
Speaker Change: For the second quarter, our largest cash flow generator was once again our transportation segment, which had adjusted EBITDA of $11.2 million compared to guidance of $10.2 million.
Bob Bondurant: With in this segment, our land transportation business had adjusted event dot of 8.2 million compared to guidance of 6.5 million. Our revenue exceeded forecast by 1.4 million as we beat our second quarter forecast in mileage by 5%. Also, operating expenses were 0.4 million below forecast. Primarily do the lower truck and trade or operating cost when compared to forecast. This operating expense trend relative to guidance should continue as we slowly replace older equipment with new. Looking toward the third quarter, we continue to see strength in our sulfur hauling from Beaumont area of refineries, but have seen a bit of a slow down in other product lines such as chemicals and lubricants.
Speaker Change: Within this segment, our land transportation business had adjusted EBITDA of $8.2 million compared to guidance of $6.5 million.
Speaker Change: Our revenue exceeded forecast by $1.4 million as we beat our second quarter forecasted mileage by 5%.
Speaker Change: Also, operating expenses were $0.4 million below forecast, primarily due to lower truck and trailer operating costs when compared to forecast.
Speaker Change: This operating expense trend relative to guidance should continue as we slowly replace older equipment with new.
Robert D. Bondurant: Looking toward the third quarter, we continue to see strength in our sulfur hauling from Beaumont area refineries, but we have seen a bit of a slowdown in other product lines, such as chemicals and lubricants. However, we believe we should be at or near guidance for the third quarter in our land transportation business. Our marine transportation business had adjusted EBITDA of $2.9 million compared to guidance of $3.8 million. The majority of the miss in our marine transportation performance can be explained by a 0.5 million casualty loss that occurred in May.
Speaker Change: Looking toward the third quarter, we continue to see strength in our sulfur hauling from Beaumont area refineries. But I've seen a bit of a slowdown in other product lines such as chemicals and lubricants.
Bob Bondurant: However, we believe we should be at or near guidance for the third quarter in our land transportation business. Our marine transportation business had adjusted event dot of 2.9 million compared to guidance of 3.8 million. The majority of them missed in our marine transportation performance can be explained by a 0.5 million cash that occurred in May. This loss represents two separate insurance deductibles under our marine transportation protection and indemnity coverage policy and our whole coverage policy. This casualty loss was the result of a bridge alleging in Galveston taxes which occurred in May. A balance of the underperformance relative to guidance was the result of lower in-inflate utilization than forecasted.
Speaker Change: However, we believe we should be at or near guidance for the third quarter in our land transportation business.
Speaker Change: Our marine transportation business had adjusted EBITDA of $2.9 million compared to guidance of $3.8 million.
Speaker Change: The majority of the miss in our marine transportation performance can be explained by a 0.5 million casualty loss that occurred in May.
Robert D. Bondurant: This loss represents two separate insurance deductibles under our Marine Transportation Protection and Indemnity Coverage Policy and our Hull Coverage Policy. This casualty loss was the result of a bridge elision in Galveston, Texas, which occurred in May.
Speaker Change: This loss represents two separate insurance deductibles under our Marine Transportation Protection and Indemnity Coverage Policy and our Hull Coverage Policy.
Speaker Change: This casualty loss was the result of a bridge elision in Galveston, Texas, which occurred in May.
Robert D. Bondurant: A balance of the underperformance relative to guidance was the result of lower inland fleet utilization than forecast. This was the result of scheduled marine equipment being in dry dock during the second quarter that took longer than forecast. Also, we had reduced revenue from the inland tow that was involved in the bridge elision incident.
Speaker Change: A balance of the underperformance relative to guidance was the result of lower inland fleet utilization than forecasted.
Bob Bondurant: This was the result of scheduled marine equipment in dry dot during the second quarter that took longer than forecasted. Also, we had reduced revenue from the inland toe that was involved in the Bridge-Elysian incident. Looking toward the third quarter, we continue to see day rates stronger than our original forecast, and we also foresee full utilization of our marine fleet, providing the opportunity to accelerate water guidance in our marine transportation business. Our next longest cash load generator in the second quarter was our sulfur services segment, which had adjusted event dot of 10.6 million compared to guidance of 9.8 million.
Speaker Change: This was the result of scheduled marine equipment in dry dock during the second quarter that took longer than forecasted.
Speaker Change: Also, we had reduced revenue from the inland tow that was involved in the Bridge Elysian incident.
Robert D. Bondurant: Looking toward the third quarter, we continue to see day rates stronger than our original forecast, and we also foresee full utilization of our marine fleet, providing the opportunity to exceed third quarter guidance in our marine transportation business. Our next strongest cash flow generator in the second quarter was our Sulphur Services segment, which had adjusted EBITDA of $10.6 million compared to guidance of $9.8 million. Our fertilizer group had adjusted Ibidop of 6.7 million, which was the same as our Ibidop guidance for the second quarter.
Speaker Change: Looking toward the third quarter, we continue to see day rates stronger than our original forecast, and we also foresee full utilization of our marine fleet, providing the opportunity to exceed third quarter guidance in our marine transportation business.
Speaker Change: Our next strongest cash flow generator in the second quarter was our Sulphur Services segment, which had adjusted EBITDA of $10.6 million compared to guidance of $9.8 million.
Bob Bondurant: Our fertilizer group had adjusted event dot of 6.7 million, which was the same as our event dot guidance for the second quarter. While the volume of fertilizer sold in the second quarter was 15% less than forecast, we realized a 20% improvement in actual gross margin per ton relative to guidance. This margin improvement was a result of the mix of fertilizer products sold in the second quarter when compared to our forecast.
Speaker Change: Our Fertilizer Group had adjusted EBITDA of $6.7 million, which was the same as our EBITDA guidance for the second quarter.
Robert D. Bondurant: While the volume of fertilizers sold in the second quarter was 15% less than forecast, we realized a 20% improvement in actual gross margin per ton relative to guidance. This margin improvement was a result of the mix of fertilizer products sold in the second quarter as compared to our forecast. Looking toward the third quarter, we anticipate the normal seasonal trough and cash flow for the fertilizer business as farmers transition from planting to harvesting their fields.
Speaker Change: While the volume of fertilizers sold in the second quarter was 15% less than forecast, we realized a 20% improvement in actual gross margin per ton relative to guidance.
Speaker Change: This margin improvement was a result of the mix of fertilizer products sold in the second quarter when compared to our forecast.
Bob Bondurant: Looking toward the third quarter, we anticipate the normal seasonal trough and cash load for the fertilizer business as farmers transition from planning to harvesting their fields. The pure sulfur side of our sulfur services segment had adjusted event dot of 3.8 million compared to guidance of 3.1 million. The primary driver of this app performance was a strong volume of sulfur production from our Gulf Coast and our final recustomer. A daily volume of sulfur handle was 14% greater than our forecast as we logistically managed to approximately 3,700 tons per day of sulfur production into our Volmont terminals.
Speaker Change: Looking toward the third quarter, we anticipate the normal seasonal trough and cash flow for the fertilizer business as farmers transition from planting to harvesting their fields.
Robert D. Bondurant: The pure sulfur side of our sulfur services segment had adjusted EBITDA of $3.8 million compared to guidance of $3.1 million. The primary driver of this outperformance was a strong volume of sulfur production from our Gulf Coast refinery customer. The daily volume of sulfur handled was 14% greater than our forecast as we logistically managed approximately 3700 tons per day of sulfur production into or through our Beaumont terminal.
Speaker Change: The pure sulfur side of our sulfur services segment had adjusted EBITDA of $3.8 million compared to guidance of $3.1 million.
Speaker Change: The primary driver of this outperformance was the strong volume of sulfur production from our Gulf Coast refinery customers.
Speaker Change: The daily volume of sulfur handled was 14 percent greater than our forecast as we logistically managed approximately 3,700 tons per day of sulfur production into or through our Beaumont terminals.
Robert D. Bondurant: Looking toward the third quarter, subject to Gulf Coast weather events, we remain optimistic that sulfur production from our refinery customers will continue to remain at these higher levels, which should allow us to achieve or exceed guidance in the pure sulfur side of the business. Our third-largest cash flow generator in the second quarter was our terming and storage segment, which had adjusted EBITDA of $8 million compared to guidance of $9.4 million.
Bob Bondurant: Looking toward the third quarter, subject to Gulf Coast weather events, we remained optimistic that sulfur production from our refinery customers will continue to remain at these higher levels, which should allow us to achieve or exceed guidance in the pure sulfur side of the business. A third logist cash flow generator in the second quarter was our turning in storage segment, which had adjusted it to a bit of $8 million compared to guidance of $9.4 million. While our specialty sure-based and underground storage terminals were spot-on relative to guidance, we missed our forecast at the Smack-Over refinery due to a casley loss caused by a crude oil pipeline spill that occurred in mid-June.
Speaker Change: Looking toward the third quarter, subject to Gulf Coast weather events, we remain optimistic that sulfur production from our refinery customers will continue to remain at these higher levels, which should allow us to achieve or exceed guidance in the pure sulfur side of the business.
Speaker Change: Our third largest cash flow generator in the second quarter was our terming and storage segment, which had adjusted EBITDA of $8 million compared to guidance of $9.4 million.
Robert D. Bondurant: While our specialty, shore-based, and underground storage terminals were spot-on relative to guidance, we missed our forecast at the Smackover Refinery due to a casualty loss caused by a crude oil pipeline spill that occurred in mid-June. The pipeline in question moves crude oil from our storage tanks to the refinery. Because of the spill, we accrued a casualty loss equaling our total insurance deductibles of $1.5 million under both our pollution policy and our general liability policy. The impact of this casualty loss fully explains the terming and storage segment miss of $1.4 million when compared to Guyana.
Speaker Change: While our specialty, shore-based, and underground storage terminals were spot-on relative to guidance, we missed our forecast at the Smackover Refinery due to a casualty loss caused by a crude oil pipeline spill that occurred in mid-June.
Bob Bondurant: The pipeline and question move crude oil from our storage tanks to the refinery. Because of the spill, we accrued a casley loss equaling our total insurance deductibles of $1.5 million under both our pollution policy and our general liability policy. The impact of this casley loss will explain the termling and storage segment missed a 1.4 million when compared to guidance. Looking toward the third quarter, we believe this segment's cash flow should return to guidance.
Speaker Change: The pipeline in question moves crude oil from our storage tanks to the refinery.
Speaker Change: Because of the spill, we accrued a casualty loss equaling our total insurance deductibles of $1.5 million under both our pollution policy and our general liability policy.
Speaker Change: The impact of this casualty loss fully explains the trammeling and storage segment miss of 1.4 million when compared to guidance.
Robert D. Bondurant: Looking toward the third quarter, we believe this segment's cash flow should return to guide us. Finally, I would like to discuss the second quarter performance of our specialty product segment. In this segment, we had adjusted EBITDA of $5.7 million compared to guidance of $5.6 million.
Speaker Change: Looking toward the third quarter, we believe this segment's cash flow should return to guidance.
Bob Bondurant: Finally, I would like to discuss the second quarter performance of our specialty product segment. In this segment, we had adjusted EBITDA of 5.7 million compared to guidance of $5.6 million. Relative to guidance, we had outperformance in our grease business, which was almost entirely all set by underperformance in our package's lubricant business. The main driver of our grease business outperformance was an improvement in our margin per pound of grease, so compared to forecast. Conversely, the underperformance of our package's lubricant business was due to our reduced margin per gallon when comparing actual margins to guidance. In the grease business, we have benefited from falling additive cost.
Speaker Change: Finally, I would like to discuss the second quarter performance of our specialty product segment.
Speaker Change: In this segment, we had adjusted EBITDA of $5.7 million compared to guidance of $5.6 million.
Sharon L. Taylor: Relative to guidance, we had outperformance in our grease business, which was almost entirely offset by underperformance in our packaged lubricant business. The main driver of our grease business outperformance was an improvement in our margin per pound of grease sold compared to forecast. Conversely, the underperformance of our packaged lubricant business was due to a reduced margin per gallon when comparing actual margins to guidance. In the grease business, we have benefited from falling additive costs.
Speaker Change: Relative to guidance, we had outperformance in our grease business, which was almost entirely offset by underperformance in our packaged lubricant business.
Speaker Change: The main driver of our grease business outperformance was an improvement in our margin per pound of grease sold compared to forecast.
Speaker Change: Conversely, the underperformance of our packaged lubricant business was due to a reduced margin per gallon when comparing actual margins to guidance.
Speaker Change: In the grease business, we have benefited from falling additive costs.
Sharon L. Taylor: While in the package lubricant business, we have had to substitute higher-cost third-party base oils, driving up our unit cost. Looking toward the third quarter, we believe we should continue to perform at or near guidance in our specialty product segment. Overall, barring any unusual operating or weather events, we believe Martin Midstream's third quarter performance should approximate guidance. Now, I'd like to turn the call back over to Sharon to discuss our balance sheet, capital expenditures, and capital resources.
Bob Bondurant: While in the package's lubricant business, we have had to substitute higher-cost third-party basals, driving up our unit cost. Looking toward the third quarter, we believe we should continue to perform or any unusual operating or weather events. We believe Martin Mystery's third quarter performance should approximate guidance.
Speaker Change: While in the packaged lubricant business, we have had to substitute higher-cost third-party base oils, driving up our unit cost.
Speaker Change: Looking toward the third quarter, we believe we should continue to perform at or near guidance in our specialty product segment.
Martin Midstream: Overall, barring any unusual operating or weather events, we believe Martin Midstream's third quarter performance should approximate guidance.
Sharon Taylor: Now, I would like to turn the call back over to Sharon to discuss our balance sheet, capital expenditures, and capital resources. Thanks, Bob. As of June 30, 2021, we had total long-term debt outstanding at $458 million. It was an 8 million increase from our balance on March 31. Our revolving credit facility balance was 58 million in the national amount of our second-lane secured notes was $400. Ravailable borrowing capacity under a 150 million revolving credit facility was 83 million, which includes approximately 9 million of issued letters of credit. As you recall, that facility commitment dropped from 175 million to 150 million on June 30, 2024.
Martin Midstream: Now I'd like to turn the call back over to Sharon to discuss our balance sheet, capital expenditures, and capital resources.
Sharon L. Taylor: As of June 30, 2024, we had total long-term debt outstanding of $458 million, which was an $8 million increase from our balance on March 31. Our revolving credit facility balance was $58 million, and the notional amount of our second lien secured notes was $400 million. Our available borrowing capacity under our $150 million revolving credit facility was $83 million, which included approximately $9 million of issued letters of credit. As you recall, that facility commitment dropped from $175 million to $150 million on June 30, 2020.
Sharon L. Taylor: Thanks, Bob.
Sharon L. Taylor: As of June 30, 2024, we had total long-term debt outstanding of $458 million, which was an $8 million increase from our balance on March 31.
Sharon L. Taylor: Our revolving credit facility balance was $58 million and the notional amount of our second lien secured notes was $400 million.
Speaker Change: Our available borrowing capacity under our $150 million revolving credit facility was $83 million, which includes approximately $9 million of issued letters of credit.
Sharon L. Taylor: As you recall, that facility commitment dropped from $175 million to $150 million on June 30, 2024.
Sharon L. Taylor: At the end of the quarter, our bank-compliant adjusted leverage ratio was 3.88 times, and interest coverage was 2.21 times. Our leverage goal remains below 3.75 times on a sustained basis, and we continue to work toward that.
Sharon Taylor: At the end of the quarter, our bank compliant adjusted leverage ratio was 3.88 times, and interest coverage was 2.21 times. Our leverage goal remains below 3.75 times on a sustained basis, and we continue to work toward that.
Sharon L. Taylor: At the end of the quarter our bank compliant adjusted leverage ratio was 3.88 times and interest coverage was 2.21 times.
Sharon L. Taylor: Our leverage goal remains below 3.75 times on a sustained basis and we continue to work toward that.
Sharon L. Taylor: We spent a total of $20.2 million on capital expenditures during the second quarter, with $12.4 million on gross capital projects. Of that number, growth capital spending related to the ELSA project was $10.6 million, which includes $4.1 million on the Oleum Tower and $6.5 million contribution to the ELSA joint venture. For a variety of reasons, which I will discuss in a moment, we are adjusting our total anticipated CapEx spend for 2024 to $58.4 million, up from $49.4 million.
Sharon Taylor: We spent a total of 2.2 million on capital expenditures during the second quarter, with 12.4 million on gross capital projects. A that number, gross capital spending related to the Elsa project was 10.6 million, which includes 4.1 million on the OEM tower, and the 6.5 million contribution to the Elsa joint venture.
Sharon L. Taylor: We spent a total of $20.2 million on capital expenditures during the second quarter, with $12.4 million on gross capital projects.
Sharon L. Taylor: Of that number, growth capital spending related to the ELSA project was $10.6 million, which includes $4.1 million on the Oleum Tower and the $6.5 million contribution to the ELSA joint venture.
Sharon Taylor: For a variety of reasons, which I will discuss in a moment, we are adjusting our total anticipated CapEx spend for 2024 to 58.4 million, up from 49.4 million. Both capital expenditures are now expected to be approximately 23.1 million, which is a 6 million increase from our original budget of 17.1 million. The majority of the increase is related to two projects. One in our fertilizer division, to build additional storage capacity at our Senate facility, and the other in our Greece business for improvements at our Kansas City facility. On the maintenance side, we have increased forecasted CapEx by approximately 3.3 million to 35.3 million for the year.
Sharon L. Taylor: For a variety of reasons, which I will discuss in a moment, we are adjusting our total anticipated CapEx spend for 2024 to $58.4 million, up from $49.4 million.
Sharon L. Taylor: Both capital expenditures are now expected to be approximately $23.1 million, which is a $6 million increase from our original budget of $17.1 million. The majority of the increase is related to two projects, one in our fertilizer division to build additional storage capacity at our Seneca facility and the other in our grease business for improvements at our Kansas City facility. On the maintenance side, we have increased forecasted cap backs by approximately $3.3 million to $35.3 million for the year, as we have increased the anticipated turnaround costs at our fertilizer plants and incurred higher regulatory inspection costs on the marine equipment used in our sulfur services business.
Sharon L. Taylor: Both capital expenditures are now expected to be approximately $23.1 million, which is a $6 million increase from our original budget of $17.1 million.
Sharon L. Taylor: The majority of the increase is related to two projects, one in our fertilizer division to build additional storage capacity at our Seneca facility, and the other in our grease business for improvements at our Kansas City facility.
Sharon L. Taylor: On the maintenance side, we have increased forecasted CapEx by approximately $3.3 million to $35.3 million for the year, as we have increased the anticipated turnaround costs at our fertilizer plants.
Sharon Taylor: As we have increased the anticipated turnaround costs at our fertilizer plants and incurred higher regulatory inspection costs on the marine equipment used in our sulfur services business.
Sharon L. Taylor: and incurred higher regulatory inspection costs on the marine equipment used in our sulfur services business.
Sharon Taylor: Our 2024 adjusted EBITDA guidance remains 116.1 million, even though actual results for the quarter were slightly better. We have reduced full year guidance in the short-based terminal group in anticipation of maintenance expense impacts related to hurricane barrel. Please review the presentation attached to our earnings pressure lease yesterday for 2024 adjusted EBITDA guidance for each individual business.
Sharon L. Taylor: Our 2024 adjusted EBITDA guidance remains $116.1 million. Even though actual results for the quarter were slightly better, we have reduced full year guidance in the shore-based terminals group in anticipation of maintenance expense impacts related to Hurricane Beryl.
Sharon L. Taylor: Our 2024 adjusted EBITDA guidance remains $116.1 million. Even though actual results for the quarter were slightly better, we have reduced full year guidance in the shore-based terminals group in anticipation of maintenance expense impacts related to Hurricane Beryl.
Sharon L. Taylor: Please review the presentation attached to our earnings press release yesterday for 2024 adjusted EBITDA guidance for each individual business. In a moment, I will turn the call back to the operator. But first, I need to inform you that during the Q&A session of today's call, we will not be taking questions about the buyout offer we received from Martin Resource Management Corporation. The MMLP Conflicts Committee, which is made up of our three independent directors, remains in discussions with MRMC, and we will not speculate as to the direction or outcome of those discussions.
Sharon L. Taylor: Please review the presentation attached to our earnings press release yesterday for 2024 adjusted EBITDA guidance for each individual business.
Sharon Taylor: In a moment, I will turn the call back to the operator, but first I need to inform you that during the Q&A session of today's call, we will not be taking questions about the buyout offer we receive from Martin Resource Management Corporation. The MMLP Conflicts Committee, which is made up of our three independent directors, remains in discussions with MRMC, and we will not speculate as to the direction or outcome of those discussions. So please refrain from questions on this topic.
Speaker Change: In a moment, I will turn the call back to the operator, but first I need to inform you that during the Q&A session of today's call, we will not be taking questions about the buyout offer we received from Martin Resource Management Corporation.
Speaker Change: The MMLP Conflicts Committee, which is made up of our three independent directors, remains in discussions with MRMC and we will not speculate as to the direction or outcome of those discussions.
Speaker Change: So please refrain from questions on this topic.
Sharon L. Taylor: So please refrain from questions on this topic. With that, I'll turn it over to the operator for any other questions you may have. Thank you. We will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star 1 again. We'll take our first question from Selman Akyol at STFL. Can you guys hear me? Good morning. Okay, great. Good morning.
Sharon Taylor: With that, I'll turn it over to the operator for any other questions you may have. Thank you.
Speaker Change: With that, I'll turn it over to the operator for any other questions you may have.
Operator: We will now begin the question and answer session. If you have dialed in and would like to ask the question, please press star 1 on your telephone keypad to raise your hand and join the Q. If you would like to withdraw your question, simply press star 1 again.
Speaker Change: Thank you. We will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star 1 again.
Selman Akyol: Well, take our first question from Selman Akyol at Stiefel. Can you guys hear me? Yes, yes. Okay, great. Good morning.
Speaker Change: We'll take our first question from Selman Akyol at STFL.
Selman Akyol: So, first of all, just in terms of Alpha, is everything on track there? Any update on timing? Any chance Tara comes on sooner than expected? Anything to just note there?
Speaker Change: Can you guys hear me?
Selman Akyol: Okay, great. Good morning. So, first of all, just in terms of Alpha, everything on track there? Any update to timing? Any chance Tara comes on sooner than expected? Anything?
Randall Tauscher: So first of all, just in terms of alpha, everything on track there. Any update to timing? Any chance of the tower comes on sooner than expected or anything to just note there.
Speaker Change: to just note there.
Randall L. Tauscher: Yeah, Selman, this is Randy. Good morning.
Randall Tauscher: Yeah, some of this is Randall.
Randall Tauscher: Good morning. Everything is on track. We will have the early in tower and the tiniest to the also plan is complete by the end of July. We anticipate the getting to ship them the speeds of the stock in the middle of the early August, and at that point, the also plan adventure will be hand their processing and testing and qualification potential testers. And then the timing of the sales potential hasn't changed since the last several times we spoke about it. Great.
Speaker Change: Yeah, Selman, this is Randy. Good morning. Everything is on track. We will have the oleum tower and the tie-ins to the ELSA plants complete by the end of July .
Randall L. Tauscher: Everything is on track. We will have the oleum tower and the tie-ins to the ELSA plants completed by the end of July. We anticipate beginning to ship them the speeds, the stock in the middle of the oleum in the middle of August, and at that point, the also plants venture will begin its processing and testing and qualification with potential testers. And then the timing of sales potential hasn't changed since the last several times we spoke about it.
Speaker Change: We anticipate beginning to ship them the speeds that the stock in the middle of the oleum in the middle of August and at that point the also plants venture will begin their
Speaker Change: processing and testing and qualification with potential customers.
Speaker Change: And then the timing of sales potential hasn't changed since the last several times we spoke about it.
Selman Akyol: Thank you for that.
Randall Tauscher: And then in terms of marine, I heard you in terms of day rate to any opportunity to put any of those contracts on term at all. Yeah, so we have all of our contracts. Currently, nothing's in the spot market. It's all on some sort of term. Much of the getting us to the end of the third quarter, some of us getting to the end of the year and two of the contracts into early the first quarter of next year. So, so we have been looking to expand the term as the customers are going to do so.
Selman Akyol: Great, thank you for that. And then, in terms of marine... I heard you say in terms of day rates, any opportunity to put any of those contracts on term at all?
Speaker Change: Great, thank you for that. And then, in terms of marine,
Speaker Change: I heard you in terms of day rates. Any opportunity to put any of those contracts on term at all?
Randall L. Tauscher: Yeah, so we have we have all of our contracts. Currently, nothing's in the spot market. It's all on some sort of term, much of it getting us to the end of the third quarter. Some of us are getting to the end of the year and two of the contracts into the early first quarter of next year. So, we have been looking to extend the terms as the customers have been willing to do so.
Speaker Change: Yeah, so we have we have all of our contracts.
Speaker Change: Currently nothing's in the spot market. It's all on some sort of term.
Speaker Change: much of it getting us to the end of the third quarter, some of us getting to the end of the year, and two of the contracts into early the first quarter of next year. So we have been looking to expand the term as the customers have been willing to do so.
Selman Akyol: Great. Appreciate that update.
Selman Akyol: Great. Appreciate that update. And then, in terms of the bridge incident and the pipeline leak, is that all behind you, or is there going to be any increased regulatory scrutiny? Is there anything that's going to linger?
Selman Akyol: And then in terms of the bridge incident and in the pipeline leak, is that all behind you? Is there going to be any increased regulatory looks? Is there anything that's going to linger beyond. Yeah, so the bridge division, which happens mid May, that is now in maintenance, which basically means we're monitoring the areas that were impacted by the spill. And then we expect that to be behind us on the crude oil spill, and it's back over, which happened the middle of the last month. Earlier this week, we went from emergency mode to remediation mode. So we still do have some weeks or months in front of us on remediation there.
Speaker Change: Great, appreciate that update. And then in terms of the bridge incident and the pipeline leak, is that all behind you or is there going to be any increased regulatory looks? Is there anything that's going to linger beyond?
Randall L. Tauscher: Yeah, so the bridge collision, which happened in mid-May, that is now in maintenance mode, which basically means we're monitoring the areas that were impacted by the spill. And we expect that to be behind the crude oil spill and smackover, which happened in the middle of last month. Earlier this week, we went from emergency mode to remediation mode, so we still have some weeks or months in front of us for remediation.
Speaker Change: Yes, so the bridge collision which happened mid-May, that is now in maintenance mode, which basically means we're monitoring the areas that were impacted by the spill, and we expect that to be behind us.
Speaker Change: on the crude oil spill in Smackover, which happened in the middle of last month.
Speaker Change: Earlier this week we went from emergency mode to remediation mode, so we still do have some weeks or months in front of us on remediation there.
Randall L. Tauscher: Bob, did you have anything to add to these notes? No, I do not. Well, I will add this. We have accrued the full deductible, so we don't believe, as far as the economic impact to us, there should be any more. But it is, as Randy said, an ongoing monitoring of really both situations.
Speaker Change: Well, did you have any?
Randall Tauscher: Well, I will add this: we have a crew of the full deductible, so we don't believe, as far as economic impact. There's there should be any more, but that is, as Randy said, an ongoing monitoring of the of really both situations.
Speaker Change: No, I do not. Well, I will add this. We have accrued the full deductible, so we don't believe as far as economic impact to us, there should be any more. But it is, as Randy said, an ongoing monitoring of really both situations.
Randall Tauscher: Got it.
Selman Akyol: And then could you maybe just you alluded to barrel and, and it sounded like you guys were impacted.
Selman Akyol: Could you maybe just, you alluded to Beryl, and it sounded like you guys were impacted. Could you maybe..., expand on that a little bit?
Speaker Change: Got it, and then...
Speaker Change: Could you maybe just, you alluded to Beryl and it sounded like you guys were impacted. Could you just maybe...
Randall Tauscher: Can you just maybe. to expand on that a little bit. Yeah, I mean, you know, that hurricane hit us so much over to the Houston area. We have several different sites in Houston that were, we're in fact, I'd say from maintenance perspective, I'm calling on material. And then, you know, down from really being able to operate for a program entire week there, which, you know, as we work our way through the year, probably won't impact us financially that much. But it also did hit our short bases in Galveston and in Port Arthur. And we'll just have to see how the customers all come back from that.
Speaker Change: Expand on that a little bit.
Randall L. Tauscher: Yeah, I mean, you know, that hurricane hit us. Beaumont over to the Houston area, we have several different sites in Houston that were impacted, I'd say from a maintenance perspective, I call it non-material, and then, you know, down from really being able to operate for over an entire week.
Randy: Yeah, I mean, you know, that that hurricane hit us.
Speaker Change: Beaumont over to the Houston area we have
Speaker Change: Several different sites in Houston that were impacted, I'd say from a maintenance perspective, I'd call it non-material, and then, you know, down from really being able to operate for over an entire week there.
Randall L. Tauscher: As we work our way through the year, it probably won't impact us financially that much, but it also did hit our shore bases in Galveston and Port Arthur. And we'll just have to see how the customers all come back from that. We could have some impact financially on the shore base site in that regard, but I'd say the damage would be non-material at our locations, although we had damage at all of our facilities.
Speaker Change: which
Speaker Change: you know as we work our way through the year probably won't impact us financially that much but it also did hit our short bases in Galveston.
Speaker Change: and Port Arthur. And we'll just have to see how the.
Speaker Change: Customers all come back from that. We could have some impact financially on the shore base site in that regard, but I'd say the damage would be non-material at our locations, although we had damage at all of our facilities.
Randall Tauscher: We could have some impact financially on the short base site in that regard. But I say the damage would be non-materials at our locations, although we had damage and all of our facility. And I'll add, we really saw no impact or a fine reproduction of sulfur through that storm of that affair statement. That's true, too. As the moment in early was 3700 times a day during the third quarter. And in two, we during the second quarter. And then during July, we've just had under that, which I don't think Earl had anything to do with it.
Randall L. Tauscher: And I'll add, we really saw no impact on refinery production of sulfur through that storm. Is that a fair statement?
Speaker Change: And I'll add, we really saw no impact of refinery production of sulfur through that storm. Is that a fair statement?
Randall L. Tauscher: That's true. As Bob mentioned earlier, we had 3,700 tons a day during the third quarter, excuse me, during the second quarter, and then during July, we've just a tad under that, which I don't think Earl had anything to do with that. Okay.
Speaker Change: That's true. As Bob mentioned earlier, we have 3,700 tons a day during the third quarter, excuse me, during the second quarter, and then during July , we've just a tad under that, which I don't think Earl had anything to do with that.
Selman Akyol: Got it. And then just sort of my last question here, and it kind of relates to that topic. In terms of refinery turnarounds, anything expected, or do you expect them, you know, no turnarounds during this upcoming quarter?
Randall Tauscher: Got it.
Randall Tauscher: And then you just sort of my last question here, and it kind of relates to that topic. In terms of refinery turnaround, anything expected or you expect them, you know, no turnaround during this upcoming quarter. Typically, there are turn arounds late the third quarter, early fourth quarter. We don't have any knowledge at this point of having turn around with impact us. Got it. Okay.
Speaker Change: Got it. And then just sort of my last question here, and it kind of relates to that topic. In terms of refinery turnarounds,
Speaker Change: Anything expected, or you expect them, you know, no turnarounds during this upcoming quarter?
Randall L. Tauscher: Typically, there are turnarounds late in the third quarter and early in the fourth quarter. We don't have any knowledge at this point of how the turnarounds would impact us. Got it, okay.
Speaker Change: Typically there are turnarounds late in the third quarter, early fourth quarter. We don't have any knowledge at this point of how the turnarounds would impact us.
Selman Akyol: Got it. Okay. Thank you very much. Thank you.
Selman Akyol: Thank you very much.
Speaker Change: Got it. Okay. Thank you very much.
Kyle May: Thank you. We'll take our next question from Kyle May at Sudodian Company.
Kyle May: We'll take our next question from Kyle May at Sidotian Company.
Speaker Change: Thank you.
Speaker Change: We'll take our next question from Kyle May at Sidotian Company.
Kyle May: Hi, good morning, everyone. So, Sharon, I know you said you're not going to talk about the buyout offer, but maybe just from a different perspective. I was wondering if you can give us any information about the potential timeline of the events going forward.
Kyle May: Morning, So. Sharon, I know you said you're not going to talk about the buyout offer, but maybe just from a different perspective, I was wondering if you could give us any information about the potential timeline of the events going forward.
Kyle May: Hi, good morning, everyone.
Kyle May: Morning.
Kyle May: Sharon, I know you said you're not going to talk about the the buyout offer but maybe just from a different perspective, I was wondering if you can give us any information about the potential timeline of the events going forward.
Sharon L. Taylor: I don't think that I can speak on that. The negotiations that will be occurring are still occurring between MMLP's Conflicts Committee and MRMC's Advisory Firm. I do not have a timeline on when they anticipate completing those negotiations, nor do I know if they will be, or whether we will come to an agreement, so I wouldn't like to speculate there.
Sharon Taylor: I don't think that I can speak on that. The negotiations that will be occurring are still occurring between MMLP's conflicts committee and MRMC's advisory firm. I do not have a timeline on when they anticipate completing those negotiations, nor do I know if those will be. If we will come to an agreement, so I would like to speculate there. Understood, appreciate it.
Speaker Change: I don't think that that I can speak on that. The negotiations that will be occurring are still occurring between.
Kyle May: MMLP's Conflicts Committee and MRMC's advisory firm. I do not have a timeline on when they anticipate completing those negotiations, nor do I know if those will be, if we will come to an agreement. So I wouldn't like to speculate there.
Kyle May: And then maybe in the transportation segment, like you pointed out, land transportation is really strong. Just wondering if you could maybe expand on some of the fundamentals of what you experienced in the second quarter and how you think about that continuing in the third.
Randall Tauscher: And then maybe in the transportation segment, like you pointed out, land transportation is really strong. Just wondering if you can maybe expand some of the fundamentals of what you experienced in the second quarter and how you think that about that continuing in the third. Yeah, that's, this is Randy, that's a great question, in one that has no discretion or heads a little bit too, because April and May. Oh, that. Lewis. We were strong across the board in all commodities and all routes. June, June, we saw chemicals and lubricants drop. And then we, you know, season 11, the viewpoint, of course, in the propane is weak.
Speaker Change: Understood. Appreciate it. And then maybe in the the transportation segment, like you pointed out, land transportation was really strong. Just wondering if you can maybe expand on some of the fundamentals of what you experienced in the second quarter and how you think that about that continuing in the third.
Randall L. Tauscher: Yeah, that's this is Randy. That's a great question and one that has us crashing our heads a little bit too because April and May were fabulous. We were strong across the board in all commodities and all routes. In June, June, we saw chemicals and lubricants drop. And then we, you know, seasonally, the butane, of course, and the propane is weak. And that is the same trend as we saw a year ago, June and July, those get a little bit slower and then pick back up as we work our way through the summer.
Speaker Change: Yeah, that's, this is Randy, that's a, that's a great question and one that has us scratching our heads a little bit too, because April and May were fabulous.
Speaker Change: We were strong across the board in all commodities and all routes. In June , we saw chemicals and lubricants drop.
Speaker Change: and then we you know seasonally the butane of course and the propane is weak.
Randall Tauscher: And that is the same trend as we saw a year ago. June and July, those little bit slower. And then picking back up as we work our way through the summer. So, so, you know, we'll see how things go here the next couple of months. In that regard, July, the first week was tremendous. The second week after girl, you know, tweaked down a little bit. And we've had our plane; you asked the plan, which we do. We haul all of our raw materials into there. By truck, we've had that down. Lots of June and July.
Speaker Change: And that is the same trend as we saw a year ago. June and July will be a little bit slower and then picking back up as we work our way through the summer.
Randall L. Tauscher: So, we'll see how things go here over the next couple months. In that regard, July, the 1st week was tremendous. The 2nd week after growth, you know, tweaked down a little bit. We have our Plainview acid plant, which we do haul all of our raw materials into there by truck.
Speaker Change: So, you know, we'll see how things go here over the next couple of months.
Speaker Change: In that regard, July , the first week was tremendous. The second week after Burrell, you know, tweaked down a little bit.
Speaker Change: And we've had our Plainview Acid Plant, which we haul all of our raw materials into there by truck. We've had that down months of June and July . That'll be coming back up in August . And so we're thinking as we get to August , we might see an uptick again in that business.
Randall L. Tauscher: We've had that down. The months of June and July, that'll be coming back up. In August, and so we're, we're, we're thinking as we get dogs, we might see an uptick again in that business.
Randall Tauscher: That'll be coming back up, you know, August. And so, we're thinking as we get dogs, we might see enough taking in that business.
Kyle May: Okay, great. That's really helpful.
Kyle May: Okay, great. That's really awful.
Kyle May: And last one for me, just with the higher CAPEX budget this year, wondering if you could give us an update on, you know, how you're thinking about the leverage ratio, maybe exiting the year. I know you're looking for that sustained average, yeah, the sustained target of 3.75 on the leverage ratio. Just any thoughts about how you see the progression there?
Sharon Taylor: And, and last one for me, just with the higher cap extra budget this year, wondering if you could give us an update on, you know, how you're thinking about leverage ratio, maybe exiting the year. I know you're looking for that sustained average. Yeah, the sustained target of 3.75 on the leverage ratio. Just, just any thoughts about how you see the progression there? Yeah, I think that where we are right now at 3.88 times, when we consider cap X through the back half of the year, we think we'll exit the year at about the same level.
Speaker Change: Okay, great. That's really helpful. And last one for me, just with the higher CapEx budget this year, wondering if you could give us an update on how you're thinking about the leverage ratio, maybe exiting the year. I know you're looking for that sustained average, yeah, the sustained target of 3.75 on the leverage ratio. Just any thoughts about how you see the progression there?
Sharon L. Taylor: Yeah, I think that where we are right now at 3.88 times, when we consider CapEx through the back half of the year, we think we'll exit the year at about this same level.
Speaker Change: Yeah, I think that where we are right now at 3.88 times when we consider CapEx through the back half of the year, we think we'll exit the year at about this same level.
Kyle May: All right, great. Appreciate the time this morning. Thank you, Kyle.
Kyle May: All right. Great. I appreciate the time this morning. Thank you, Kyle.
Speaker Change: All right, great. Appreciate the time this morning.
Kyle May: Yeah.
Kyle May: Thank you, Kyle.
Patrick Fitzgerald: Next one, move to Patrick's.
Patrick Fitzgerald: It's Gerald at Baird. Sorry, I was on here. Yeah, sorry about that.
Kyle May: Sorry, I was on mute. Yeah, sorry about that. Yeah, is there any way you could talk about the kind of returns you're expecting to get out of the additional investment in the fertilizer business?
Speaker Change: Yeah, sorry about that. Yeah, is there any way you could talk about the kind of
Patrick Fitzgerald: Yeah, is there any way you could talk about the kind of, you know, returns you're expecting to get out of the additional investment in the fertilizer business? Yeah. So, that's going to, you know, warehouse is just about complete right now. We're going to what this can allow us to do up and up in the Illinois areas is run harder during the summer months, because the fertilizer that we make up there is traditionally a fall in early winter fertilizer. So, so we're expecting, you know, $6,800,000 bump from doing that, and we expect that to hit, I think we put it in the fourth quarter of the quarter of the guys.
Speaker Change: You know returns you're expecting to get out of the additional investment in the fertilizer business
Randall L. Tauscher: Yeah, so that's going to. The warehouse is just about complete right now. What that's going to allow us to do up in the Illinois area is run harder during the summer months because the fertilizer that we make up there is traditionally a fall and early winter fertilizer. So we're expecting $600,000 to $800,000 bump from doing that, and we expect that to hit, I think we put in the fourth quarter.
Speaker Change: Yeah, so that's going to...
Speaker Change: The warehouse is just about complete right now. We're going to, what that's going to allow us to do up in the Illinois area is run harder during the summer months.
Speaker Change: Because the fertilizer that we make up there is traditionally a fall and early winter fertilizer.
Speaker Change: So we're expecting $600,000 to $800,000 bump from doing that, and we expect that to hit, I think we put in the fourth quarter.
Speaker Change: and the fourth quarter in the guidance.
Patrick Fitzgerald: Okay. All right.
Speaker Change: Okay, um...
Kyle May: OK. All right. And then, you know, everything else is coming online in the fourth quarter.
Patrick Fitzgerald: And then, you know, the else is coming online in the fourth quarter; you're expecting you have $0.9 million of EBDAF from that in the fourth quarter. Could you just remind us how that, you know, I'm looking at this slide from last year on kind of all the puts and takes? Like, could you remind us like, how you expect that to ramp in terms of like additional EBDAF beyond just the fourth quarter? Would you have guided out to and like how much more need to go into that and then there's like, uh... You know, a 6.5 million in cash upon commencement of operation, so just if you could talk about that, that would be helpful.
Speaker Change: All right, and then...
Speaker Change: You know, the else is coming online in the fourth quarter. You're expecting to get 0.9 million of EBITDA from that in the fourth quarter.
Randall L. Tauscher: You're expecting to get 0.9 million of EBITDA from that in the fourth quarter. Could you just remind us how that works? You know, I'm looking at the slide from last year on kind of all the puts and takes, like, could you remind us how you expect that to ramp in terms of, like, additional EBITDA beyond just the fourth quarter, which you have guided out to, and, like, how much more CapEx needs to go into that? And then there's, like, 6.5 million in cash upon commencement of operations. So just if you could talk about that, that would be helpful.
Speaker Change: Could you just remind us how that...
Speaker Change: You know, I'm looking at the slide from last year.
Speaker Change: on kind of all the puts and takes, like, could you remind us, like, how you expect that to ramp in terms of, like, additional EBITDA beyond just the fourth quarter, which you have?
Speaker Change: Guide it out to and like how much more CapEx needs to go into that and then there's like
Speaker Change: you know 6.5 million in cash upon commencement of operation so just if you could talk about that that would be helpful.
Randall L. Tauscher: Here. So we have three different Estrees, which we're going to secure revenue from in those agreements. And the first is a reservation fee to pay us back for the capital we had to spend on the OEM tower so we could provide the feedstock for the venture between the three parties. And that will begin in October. And that's that 900,000-ish you see, and that will be on a quarter basis, and that will be ongoing. And then the second stream would be a processing fee we get for actually providing them the oleum.
Patrick Fitzgerald: Sure, so we have with three different streets which we're going to secure revenue by in those agreements, and the first is a reservation to pay us back for the capital we had to spend on the old in Paris. So we could provide a fee stock to the venture between the three parties. And that will begin in October, and that's that 900,000-ish you see, and that will be on for quarter, and that will be on W. And then the second string would be a process, if we get for actually providing them the old in, and that will ramp up one of the sales for the partnership, again, for the venture began to ramp up.
Speaker Change: Sure, so we have we have three different
Speaker Change: which we're going to secure revenue by
Speaker Change: in those agreements. And the first is a reservation fee.
Speaker Change: To pay us back for the capital we had to spend on the OEM tower so we could provide the feedstock.
Speaker Change: to the venture between the three parties. That will begin in October .
Speaker Change: And that's that 900,000-ish you see, and that will be on per quarter, and that will be ongoing.
Speaker Change: And then the second stream would be a processing fee we get for actually providing them the oleum. And that will ramp up when the sales for the partnership, for the venture, begin to ramp up.
Randall L. Tauscher: And that will ramp up when the sales for the partnership, for the venture, begin to ramp up. And we think there might be some sales in the fourth quarter, yet this year. The marketing plan definitely has some sales in for early 2025, and the marketing plan currently has that ramping up in the second half of 2025. Now that's contingent on the FAB plans getting built and operating. And then, of course, when the Elsa sales pick up, the venture will start seeing revenue on our percentage share of the venture.
Patrick Fitzgerald: And we think there might be some sales in the fourth quarter yet this year. The marketing plan definitely has some sales in for early 2025, and the marketing plan currently has that ramping up in the second half of 2025. Now that's contingent on the fab plans getting built and operating. And then at that point, of course, when the also sales pick up, the venture will start seeing revenue on our percentage share of the venture. And ultimately, we expect a five to six million dollars on the total investment, and the total investment we expect to be twenty six to twenty seven million dollars, which was our capital front and the capital we're putting into the venture.
Speaker Change: And we think there might be some sales in the fourth quarter, yet this year, the marketing plan definitely has some sales in for early 2025. Marketing plan currently has.
Speaker Change: as that ramping up in the second half of 2025. Now that's contingent on the FAB plans getting built and operating.
Speaker Change: And then at that point, of course, when the Elsa sales pick up the venture, we'll start seeing revenue on our percentage share of the venture.
Randall L. Tauscher: And ultimately, we expect a five to six million dollar return on the total investment. The total investment we expect to be 26 to $27 million, which is our capital front and the capital we're putting into it. So I'll add on there the $6.5 million that you...
Speaker Change: And ultimately, we expect a $5 to $6 million from the total investment. The total investment we expect to be $26 to $27 million, which was our capital front and the capital we're putting into the venture.
Patrick Fitzgerald: So I'll add on there the six and a half million that that you spoke to that was spent this quarter; that was the contribution to the also joint venture itself. And as far as through the OEM tower, we have an additional approximate three million dollars left on that project.
Randall L. Tauscher: So I'll add on there, the six and a half million that you spoke about that was spent this quarter, that was the contribution to the ELSA joint venture itself, and as far as the Oleum Tower is concerned, we have an additional approximate three million dollars left on that project. Okay, thanks. Thanks a lot. And that concludes our Q&A session. I would like to turn the conference back over to Bob Bondurant for closing remarks. Well, thank you all.
Speaker Change: So I'll add on there, the six and a half million that you spoke to, that was spent this quarter, that was the contribution to the ELSA joint venture itself, and as far as through the Oleum tower, we have an additional approximate three million dollars left on that project.
Patrick Fitzgerald: Okay, thanks. Thanks a lot.
Speaker Change: Okay, thanks. Thanks a lot.
Operator: And that concludes our Q&A session.
Bob Bondurant: I would like to turn the conference back over to Bob Bondor for closing remarks. Well, thank you, Audra. I appreciate everyone on the call today, and just a final note.
Speaker Change: And that concludes our Q&A session. I would like to turn the conference back over to Bob Bondurant for closing remarks.
Robert D. Bondurant: Well, thank you, Audra. I appreciate everyone on the call today. And just a final note, we were pleased to have a ribbon-cutting ceremony for the DSM Semikin plant with our Dongjin Samsung partners on Monday, and look forward to beginning production at the facility very soon.
Robert D. Bondurant: Well, thank you, Audra. Appreciate everyone on the call today. And just a final note, we were pleased to have a ribbon-cutting ceremony for the DSM Semikin plant with our Dongjin Samsung partners on Monday, and look forward to beginning production at the facility very soon.
Bob Bondurant: We're pleased to have a ribbon-cutting ceremony for the DSM Simicant. Can plant with our gong in Samsung partners on Monday and look forward to beginning production facility very soon. Thanks again.
Audra: And this concludes today's conference call. Thank you for your participation. You may now disconnect.
Operator: And this concludes today's conference call. Thank you for your participation. You may now disconnect. Please wait.
Robert D. Bondurant: Thanks again.
Speaker Change: And this concludes today's conference call. Thank you for your participation. You may now disconnect.
Operator: The conference will begin shortly. Thank you.