Re: Marlin Midstream Partners, LP (FISH)
Marlin Midstream Partners, LP Reports Second Quarter 2014 Financial Results
For the second quarter of 2014, net income totaled $6.3 million, $0.35 per limited partner unit, and adjusted EBITDA was $9.0 million. Distributable cash flow for the second quarter of 2014 was $8.6 million resulting in a coverage ratio of over 1.3x for the period
Marlin Midstream Partners, LP Announces Purchase of Transloader From NuDevco Midstream Development, LLC
The purchase of the East New Mexico Transloading Facility is expected to close on August 1, 2014 and will immediately begin contributing to the partnership's distributable cash flow. The $7.4 million purchase price will be paid 75% in cash and the remaining 25% will be in the form of FISH Common Units issued to NuDevco. ---------------------------------------------------------
The company beat estimates by $0.05/share but more importantly they are growing their revenues QoQ.
"In addition, we are very excited to announce our first drop-down of a crude logistics transloading facility located in eastern New Mexico that will begin contributing to our EBITDA in the third quarter of 2014. As we enter the second half of the year, we continue to target 8 to 10 percent in annual EBITDA growth." They have paid down a significant amount of debt from their IPO and their balance sheet reflects this w/ only $6Mln in long term debt now. New drop downs from NuDevco are paid w/ excess cash and new units..
What's surprising to me is the big growth is coming from their rail-car transloading facilities now representing 75% of their total revenues up from 60% (6 months ending 6/30).
I am still a bit concerned that major service contracts are only 3 year terms, The transloading facilities service those new oil shale areas that are "land locked" w/ no direct pipeline access. Transloading is their cash generator now so it will be interesting to see what their plans are on extensions to their NG gathering pipelines and/or if they work on filling that capacity first before building any new lines.
I have an initial target of $22.00/share as long as they can maintained their 8%-10% annual growth. I will probably peel off some of my high priced shares (FIFO) selling 12% of my shares specifically those from my first buy on 9/17/2013 @ $18.60/share. (Note: When tagged as FIFO shares by Schwab the K1 accounting defaults to FIFO too. I did call Investor relations at FISH and they can also handle lot based accounting for their K1 but you must call them and identify the specific lots sold).
I am very satisfied with their report but as a secondary MLP play w/ only a $358Mln market cap, FISH can be at a disadvantage for access to capital. NuDevco is a private company but now has FISH as a partner to drop down other assets but capital may be a constraint for them on any other future deals.
EKS |
