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TransMontaigne Partners L.P. Announces Financial Results

Dépèche transmise le 7 mai 2009 par Business Wire

DENVER--(BUSINESS WIRE)--TransMontaigne Partners L.P. (NYSE:TLP) today announced its financial results for the three months ended March 31, 2009.

FINANCIAL RESULTS

An overview of the financial performance for the three months ended March 31, 2009, as compared to the three months ended March 31, 2008, includes:

  • Quarterly operating income decreased to $7.9 million from $8.0 million due principally to the following:
    • Quarterly revenue increased to $34.4 million from $33.8 million due to increases in revenue at the Gulf Coast, Midwest and Brownsville terminals of approximately $0.1 million, $0.4 million and $0.3 million, respectively, offset in part by decreases in revenue at the River and Southeast terminals of approximately $0.1 million and $0.2 million, respectively.
    • Quarterly direct operating costs and expenses remained at $15.5 million as increases in direct operating costs and expenses at the Midwest, Brownsville and River terminals of $0.1 million, $0.4 million and $0.5 million, respectively, were offset by decreases in direct operating costs and expenses at the Gulf Coast and Southeast terminals of $0.7 million and $0.2 million, respectively.
    • An increase in depreciation and amortization expense of approximately $0.6 million.
  • Quarterly net earnings increased to $6.4 million from $6.2 million due principally to a decrease in interest expense of approximately $0.3 million.
  • Net earnings per limited partner unit—basic increased to $0.47 per unit from $0.46 per unit.
  • The distribution declared per limited partner unit increased to $0.59 per unit from $0.57 per unit.

Adjusted operating surplus generated during the three months ended March 31, 2009 was $10.4 million and distributions allocable to the period were $8.0 million.

On May 7, 2009, approximately 0.8 million subordinated units converted into an equal number of common units. Subsequent to the May 7, 2009 conversion, there will be approximately 1.7 million subordinated units that remain outstanding. During the year ending December 31, 2009, we expect the remaining subordinated units to convert into an equal number of common units.

The contraction in the global financial and credit markets has adversely affected the liquidity and the credit available to many enterprises, including those involved in the supply and marketing of refined petroleum products. Moreover, the recent market conditions and volatility of prices for refined petroleum products have had an adverse effect on demand for refined petroleum products. At this time, we do not know whether this decline in demand for refined petroleum products will continue in the future as it is driven in part by unpredictable market conditions and their effects. A prolonged decline in demand for refined petroleum products may result in a decline in product throughput at our facilities and ultimately, a decline in our revenue, net earnings and cash flows.

Our terminaling services agreements are structured as either throughput agreements or storage agreements. Certain throughput agreements contain provisions that require our customers to throughput a minimum volume of product at our facilities over a stipulated period of time, which results in a fixed amount of revenue to be recognized by us. Our storage agreements require our customers to make minimum payments based on the volume of storage capacity made available to the customer under the agreement, which results in a fixed amount of revenue to be recognized by us. We refer to the fixed amount of revenue recognized pursuant to our terminaling services agreements as being “firm commitments.” Revenue recognized in excess of firm commitments and revenue recognized based solely on the volume of product distributed or injected are referred to as “variable.” Our revenue was as follows (in thousands):

Three months
ended
March 31,

2009   2008
Firm Commitments:
Terminaling services fees, net:
External customers $9,349 $8,604
Affiliates 18,417 17,142
Total firm commitments 27,766 25,746
Variable:
Terminaling services fees, net:
External customers 1,207 1,122
Affiliates (223) (35)
Total 984 1,087
Pipeline transportation fees 1,241 1,138
Management fees and reimbursed costs 470 450
Other 3,941 5,403
Total variable 6,636 8,078
Total revenue $34,402 $33,824

The amount of revenue recognized as “firm commitments” based on the remaining contractual term of the terminaling services agreements that generated “firm commitments” for the three months ended March 31, 2009 was as follows (in thousands):

At
March 31,
2009
Remaining terms on terminaling services agreements that generated “firm commitments:”
Less than 1 year remaining $3,218
More than 1 year but less than 3 years remaining 3,404
More than 3 years but less than 5 years remaining 4,575
More than 5 years remaining 16,569
Total firm commitments for the three months ended March 31, 2009 $27,766

TransMontaigne Partners also released the following statements regarding its current liquidity and capital resources:

  • Our primary liquidity needs are to fund our working capital requirements, distributions to unitholders and capital expenditures. Pending an improvement in the current conditions in the public debt and equity markets, our principal sources of funds to meet our liquidity needs currently will be limited to cash generated by operations and borrowings under our senior secured credit facility. We believe that we will be able to generate sufficient cash from operations in the future to meet our liquidity needs to fund our working capital requirements and to fund our distributions to unitholders. We expect to fund our capital expenditures with additional borrowings under our senior secured credit facility.
  • At March 31, 2009, our senior secured credit facility provides for a maximum borrowing line of credit equal to $200 million. The senior secured credit facility expires on December 22, 2011. At March 31, 2009, our outstanding borrowings were approximately $173 million, resulting in available capacity of approximately $27 million.
  • Management and the board of directors of our general partner previously approved capital projects with estimated completion dates that extend through December 31, 2009. At March 31, 2009, the remaining capital expenditures to complete the approved capital projects are estimated to range from $30 million to $40 million. We expect to fund our capital expenditures with additional borrowings under our senior secured credit facility.
  • Pursuant to existing terminaling services agreements with Morgan Stanley Capital Group Inc. (“MSCG”), we expect to receive payments through March 31, 2010 from MSCG in the range of $15 million to $20 million, which are due and payable upon completion of certain of the capital projects referred to above.
  • Upon our payment of the remaining capital expenditures to complete the approved capital projects and our receipt of payments from MSCG upon completion of certain of the capital projects, we currently expect to have approximately $10 million in available capacity under our senior secured credit facility.
  • At our request, subject to the approval of the administrative agent and the receipt of additional commitments from one or more lenders, the maximum borrowings under the senior secured credit facility can be increased by up to an additional $100 million. The terms of the senior secured credit facility also permit us to borrow up to approximately $25 million from other lenders, including our general partner and its affiliates.
  • At March 31, 2009, we are party to interest rate swap agreements with Wachovia Bank, N.A. with an aggregate notional amount of $150 million that expire May 2010. Pursuant to the terms of the interest rate swap agreements, we pay a weighted-average fixed rate of approximately 2.1% and receive an interest payment based on the one-month LIBOR. At March 31, 2009, outstanding borrowings under our senior secured credit facility bore interest at LIBOR plus 1.5%.

Attachment A contains additional selected financial information and results of operations and Attachment B contains a computation of our adjusted operating surplus.

CONFERENCE CALL

TransMontaigne Partners L.P. previously announced that it has scheduled a conference call for Thursday, May 7, 2009 at 11:00 a.m. (ET) regarding the above information. Analysts, investors and other interested parties are invited to listen to management’s presentation of the Company’s results and supplemental financial information by accessing the call as follows:

(877) 941-2934
Ask for:
TransMontaigne Partners

A playback of the conference call will be available from 1:00 p.m. (ET) on Thursday, May 7, 2009 until 11:59 p.m. (ET) on Thursday, May 14, 2009 by calling:

USA: (800) 475-6701
International: (320) 365-3844
Access Code: 999117

ATTACHMENT A
SELECTED FINANCIAL INFORMATION AND RESULTS OF OPERATIONS

The following selected financial information is extracted from the Company’s Quarterly Report on Form 10-Q for the three months ended March 31, 2009, which was filed on May 7, 2009 with the Securities and Exchange Commission (in thousands, except per unit amounts):

Three Months Ended
March 31,

2009

  March 31,

2008

Income Statement Data
Revenue $34,402 $33,824
Direct operating costs and expenses (15,544) (15,467)
Direct general and administrative expenses (1,099) (1,073)
Operating income 7,860 7,956
Net earnings 6,422 6,202
Net earnings allocable to limited partners 5,836 5,697
Net earnings per limited partner unit—basic $0.47 $0.46
 
March 31,

2009

December 31,

2008

Balance Sheet Data
Property, plant and equipment, net $456,570 $447,753
Goodwill 24,665 24,667
Total assets 515,511 507,039
Long-term debt 173,000 165,500
Partners’ equity 305,940 307,579
  Three months ended   Year ending
December 31,
2009
March 31,
2009
  June 30,
2009
  September 30,
2009
  December 31,
2009
Revenues $34,402 $— $— $— $34,402
Direct operating costs and expenses (15,544) (15,544)
Direct general and administrative expenses (1,099) (1,099)
Allocated general and administrative expenses (2,510) (2,510)
Allocated insurance expense (725) (725)
Reimbursement of bonus awards (309) (309)
Depreciation and amortization (6,355) (6,355)
Operating income 7,860 7,860
Other expense, net (1,438) (1,438)
Net earnings $6,422 $— $— $— $6,422
 
 
Three months ended Year ended
December 31,
2008
March 31,
2008
June 30,
2008
September 30,
2008
December 31,
2008
Revenues $33,824 $35,092 $35,204 $34,020 $138,140
Direct operating costs and expenses (15,467) (15,320) (16,331) (14,732) (61,850)
Direct general and administrative expenses (1,073) (1,317) (705) (1,043) (4,138)
Allocated general and administrative expenses (2,507) (2,508) (2,508) (2,507) (10,030)
Allocated insurance expense (713) (704) (708) (710) (2,835)
Reimbursement of bonus awards (375) (375) (375) (375) (1,500)
Depreciation and amortization (5,733) (5,772) (5,794) (6,017) (23,316)
Gain on disposition of assets, net 2 2
Operating income 7,956 9,096 8,783 8,638 34,473
Other expense, net (1,754) (1,471) (1,819) (3,831) (8,875)
Net earnings $6,202 $7,625 $6,964 $4,807 $25,598

ATTACHMENT B

ADJUSTED OPERATING SURPLUS

During the subordination period, the common units will have the right to receive distributions in an amount equal to the minimum quarterly distribution of $0.40 per quarter, plus any arrearages in the payment of the minimum quarterly distribution on the common units, before any distributions will be made on the subordinated units. Conversion of subordinated units to common units will occur in the future only if, in addition to other requirements, we generate Adjusted Operating Surplus, as defined in the partnership agreement, equal to or greater than the minimum distribution requirement on all common units, subordinated units and the general partner interest. The following summarizes our Adjusted Operating Surplus generated during the periods indicated (in thousands):

     

January 1, 2009
through
March 31, 2009

 
Net earnings $6,422
Depreciation and amortization 6,355
Amounts due under long-term terminaling services agreements, net (478)
Payments received upon completion of reimbursable projects 3,630
Amortization of deferred revenue—reimbursable projects (326)
Unrealized loss on derivative instrument 3
Capitalized interest cost (301)
Amortization of deferred equity-based compensation 23
Distributions paid to holders of restricted phantom units (9)
Cash paid for repurchase of common units (20)
Maintenance capital expenditures (1,493)
Reserve (3,454)
"Adjusted Operating Surplus" generated during the period $10,352
 

Actual distribution for the period on all common units, subordinated units and
 the general partner interest

$7,959

Minimum distribution for the period on all common units, subordinated units
 and the general partner interest

$5,079

About TransMontaigne Partners L.P.

TransMontaigne Partners L.P. is a terminaling and transportation company based in Denver, Colorado with operations primarily in the United States along the Gulf Coast, in the Midwest, in Brownsville, Texas, along the Mississippi and Ohio Rivers, and in the Southeast. We provide integrated terminaling, storage, transportation and related services for customers engaged in the distribution and marketing of light refined petroleum products, heavy refined petroleum products, crude oil, chemicals, fertilizers and other liquid products. Light refined products include gasolines, diesel fuels, heating oil and jet fuels; heavy refined products include residual fuel oils and asphalt. We do not purchase or market products that we handle or transport. News and additional information about TransMontaigne Partners L.P. is available on our website: www.transmontaignepartners.com.

Forward-Looking Statements

This press release includes statements that may constitute forward-looking statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. Although the company believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions, such statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected. Important factors that could cause actual results to differ materially from the company’s expectations and may adversely affect its business and results of operations are disclosed in "Item 1A. Risk Factors" in the company’s Annual Report on Form 10-K for the year ended December 31, 2008, filed with the Securities and Exchange Commission on March 9, 2009.

Business Wire

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