WHIPPANY, N.J., Feb. 8, 2018 /PRNewswire/ -- Suburban
Propane Partners, L.P. (NYSE: SPH), a nationwide distributor of
propane, fuel oil and related products and services, as well as a
marketer of natural gas and electricity, today announced earnings
for its first quarter ended December 30,
2017.
Net income for the first quarter of fiscal 2018 was $37.2 million, or $0.61 per Common Unit, compared to net income of
$34.5 million, or $0.57 per Common Unit, in the prior year first
quarter.
Net income and EBITDA for the first quarter of fiscal 2018
included a $4.8 million loss from the
sale of certain assets and operations in a non-strategic market of
the propane segment. Excluding the effect of the foregoing
item and unrealized (non-cash) mark-to-market adjustments on
derivative instruments in both years, Adjusted EBITDA (as defined
and reconciled below) increased $8.9
million, or 10.6%, to $93.2
million for the first quarter of fiscal 2018, compared to
$84.3 million in the prior year first
quarter.
In announcing these results, President and Chief Executive
Officer Michael A. Stivala said,
"After back-to-back record warm winters, the fiscal 2018 heating
season started off with closer to seasonally normal
temperatures throughout the majority of our service territories
which contributed to strong customer demand. Our operating
platform, and the more than 3,200 employees of Suburban Propane,
were well prepared to respond -- keeping focused on the safety and
comfort of our customers, ensuring adequate supplies of product to
meet the demand and effectively managing margins and expenses. As a
result, we are very pleased to report an improvement of
approximately $9 million, or 11%, in
Adjusted EBITDA for the first quarter of fiscal 2018 compared to
the prior year first quarter."
Mr. Stivala continued, "The favorable weather pattern,
particularly toward the end of the first quarter, and the positive
momentum in customer demand trends have carried over into the early
part of the fiscal 2018 second quarter. As we have stated in the
past, our flexible business model is designed to help insulate the
business from unseasonably warm weather, as well as to ramp up our
activity levels in relation to an increase in weather-driven
demand. Our people stand ready to deliver the highest quality
service to our customers and the communities we serve, and I am
extremely proud of their hard work and dedication to meet the
challenges presented by a return to a more favorable weather
pattern in several parts of our service
territory."
Retail propane gallons sold in the first quarter of fiscal 2018
of 125.0 million gallons increased 5.4% compared to the prior year
first quarter. Sales of fuel oil and other refined fuels of
9.1 million gallons in the first quarter of fiscal 2018 increased
1.2% compared to the prior year first quarter. According to the
National Oceanic and Atmospheric Administration, average
temperatures (as measured by heating degree days) across all of the
Partnership's service territories for the first quarter of fiscal
2018 were 8% warmer than normal, yet 6% cooler than the prior
year first quarter.
Revenues in the first quarter of fiscal 2018 of $373.3 million increased $56.0 million, or 17.6%, compared to the prior
year first quarter, primarily due to higher volumes sold and higher
average retail selling prices associated with higher average
wholesale product costs. Average posted propane prices (basis
Mont Belvieu, Texas) for the first
quarter of fiscal 2018 were 63.7% higher than the prior year first
quarter. Cost of products sold for the first quarter of fiscal 2018
of $165.2 million increased
$47.0 million, or 39.8%, compared to
$118.2 million in the prior year
first quarter, primarily due to higher volumes sold and higher
wholesale product costs. Cost of products sold for the first
quarter of fiscal 2018 included a $1.5
million unrealized (non-cash) loss attributable to the
mark-to-market adjustment for derivative instruments used in risk
management activities, compared to a $0.5
million unrealized (non-cash) gain in the prior year first
quarter. Excluding these unrealized gains and losses, propane
unit margins for the first quarter of fiscal 2018 were flat
compared to the prior year first
quarter.
Combined operating and general and administrative expenses of
$116.4 million for the first quarter
of fiscal 2018 increased $2.0
million, or 1.7%, compared to the prior year first quarter,
primarily due to higher variable operating costs attributable to an
increase in operational activities, higher variable compensation
expense associated with higher earnings and an increase in general
insurance expense.
Depreciation and amortization expense of $31.1 million was essentially flat compared to
the prior year first quarter. Net interest expense of $19.5 million increased marginally compared to
the prior year first quarter. During the first quarter of fiscal
2018, the Partnership funded a portion of its cash needs with
$47.3 million of incremental
borrowings under its revolving credit facility.
As previously announced on January 25,
2018, the Partnership's Board of Supervisors had declared a
quarterly distribution of $0.60 per
Common Unit for the three months ended December 30, 2017. On an annualized basis, this
distribution rate equates to $2.40
per Common Unit. The distribution is payable on February 13, 2018 to Common Unitholders of record
as of February 6, 2018.
Suburban Propane Partners, L.P. is a publicly-traded master
limited partnership listed on the New York Stock Exchange.
Headquartered in Whippany, New
Jersey, Suburban has been in the customer service business
since 1928. The Partnership serves the energy needs of
approximately 1.0 million residential, commercial, industrial and
agricultural customers through 668 locations in 41 states.
This press release contains certain forward-looking
statements relating to future business expectations and financial
condition and results of operations of the Partnership, based on
management's current good faith expectations and beliefs concerning
future developments. These forward-looking statements are
subject to certain risks and uncertainties that could cause actual
results to differ materially from those discussed or implied in
such forward-looking statements, including the following:
- The impact of weather conditions on the demand for propane,
fuel oil and other refined fuels, natural gas and
electricity;
- Volatility in the unit cost of propane, fuel oil and other
refined fuels, natural gas and electricity, the impact of the
Partnership's hedging and risk management activities, and the
adverse impact of price increases on volumes as a result of
customer conservation;
- The ability of the Partnership to compete with other
suppliers of propane, fuel oil and other energy sources;
- The impact on the price and supply of propane, fuel oil and
other refined fuels from the political, military or economic
instability of the oil producing nations, global terrorism and
other general economic conditions;
- The ability of the Partnership to acquire sufficient volumes
of, and the costs to the Partnership of acquiring, transporting and
storing, propane, fuel oil and other refined fuels;
- The ability of the Partnership to acquire and maintain
reliable transportation for its propane, fuel oil and other refined
fuels;
- The ability of the Partnership to retain customers or
acquire new customers;
- The impact of customer conservation, energy efficiency and
technology advances on the demand for propane, fuel oil and other
refined fuels, natural gas and electricity;
- The ability of management to continue to control
expenses;
- The impact of changes in applicable statutes and government
regulations, or their interpretations, including those relating to
the environment and climate change, derivative instruments and
other regulatory developments on the Partnership's
business;
- The impact of changes in tax laws that could adversely
affect the tax treatment of the Partnership for income tax
purposes;
- The impact of legal proceedings on the Partnership's
business;
- The impact of operating hazards that could adversely affect
the Partnership's operating results to the extent not covered by
insurance;
- The Partnership's ability to make strategic acquisitions and
successfully integrate them;
- The impact of current conditions in the global capital and
credit markets, and general economic pressures;
- The operating, legal and regulatory risks the Partnership
may face; and
- Other risks referenced from time to time in filings with the
Securities and Exchange Commission ("SEC") and those factors listed
or incorporated by reference into the Partnership's Annual Report
under "Risk Factors."
Some of these risks and uncertainties are discussed in more
detail in the Partnership's Annual Report on Form 10-K for its
fiscal year ended September 30, 2017
and other periodic reports filed with the SEC. Readers are
cautioned not to place undue reliance on forward-looking
statements, which reflect management's view only as of the date
made. The Partnership undertakes no obligation to update any
forward-looking statement, except as otherwise required by
law.
Suburban Propane
Partners, L.P. and Subsidiaries
|
|
Consolidated
Statements of Operations
|
For the Three
Months Ended December 30, 2017 and December 24, 2016
|
(in thousands,
except per unit amounts)
|
(unaudited)
|
|
|
|
Three Months
Ended
|
|
|
|
December 30,
2017
|
|
|
December 24,
2016
|
|
Revenues
|
|
|
|
|
|
|
|
|
Propane
|
|
$
|
322,130
|
|
|
$
|
269,459
|
|
Fuel oil and refined
fuels
|
|
|
25,315
|
|
|
|
22,096
|
|
Natural gas and
electricity
|
|
|
13,147
|
|
|
|
13,067
|
|
All other
|
|
|
12,685
|
|
|
|
12,685
|
|
|
|
|
373,277
|
|
|
|
317,307
|
|
|
|
|
|
|
|
|
|
|
Costs and
expenses
|
|
|
|
|
|
|
|
|
Cost of products
sold
|
|
|
165,189
|
|
|
|
118,165
|
|
Operating
|
|
|
99,611
|
|
|
|
99,349
|
|
General and
administrative
|
|
|
16,775
|
|
|
|
15,047
|
|
Depreciation and
amortization
|
|
|
31,131
|
|
|
|
31,261
|
|
|
|
|
312,706
|
|
|
|
263,822
|
|
Loss on sale of
business
|
|
|
4,823
|
|
|
|
—
|
|
Operating
income
|
|
|
55,748
|
|
|
|
53,485
|
|
Interest expense,
net
|
|
|
19,514
|
|
|
|
18,831
|
|
|
|
|
|
|
|
|
|
|
Income before
(benefit from) provision for income taxes
|
|
|
36,234
|
|
|
|
34,654
|
|
(Benefit from)
provision for income taxes
|
|
|
(934)
|
|
|
|
165
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
37,168
|
|
|
$
|
34,489
|
|
|
|
|
|
|
|
|
|
|
Net income per Common
Unit - basic
|
|
$
|
0.61
|
|
|
$
|
0.57
|
|
Weighted average
number of Common Units
outstanding -
basic
|
|
|
61,333
|
|
|
|
61,042
|
|
|
|
|
|
|
|
|
|
|
Net income per Common
Unit - diluted
|
|
$
|
0.60
|
|
|
$
|
0.56
|
|
Weighted average
number of Common Units
outstanding -
diluted
|
|
|
61,525
|
|
|
|
61,232
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental
Information:
|
|
|
|
|
|
|
|
|
EBITDA (a)
|
|
$
|
86,879
|
|
|
$
|
84,746
|
|
Adjusted EBITDA
(a)
|
|
$
|
93,233
|
|
|
$
|
84,287
|
|
Retail gallons
sold:
|
|
|
|
|
|
|
|
|
Propane
|
|
|
124,986
|
|
|
|
118,601
|
|
Refined
fuels
|
|
|
9,122
|
|
|
|
9,012
|
|
Capital
expenditures:
|
|
|
|
|
|
|
|
|
Maintenance
|
|
$
|
3,959
|
|
|
$
|
3,118
|
|
Growth
|
|
$
|
4,540
|
|
|
$
|
3,710
|
|
|
|
(a)
|
EBITDA represents net
income before deducting interest expense, income taxes,
depreciation and amortization. Adjusted EBITDA represents EBITDA
excluding the unrealized net gain or loss on mark-to-market
activity for derivative instruments and other items, as applicable,
as provided in the table below. Our management uses EBITDA and
Adjusted EBITDA as supplemental measures of operating performance
and we are including them because we believe that they provide our
investors and industry analysts with additional information that we
determined is useful to evaluate our operating results.
|
EBITDA and Adjusted EBITDA are not recognized terms under
accounting principles generally accepted in the United States of America ("US GAAP") and
should not be considered as an alternative to net income or net
cash provided by operating activities determined in accordance with
US GAAP. Because EBITDA and Adjusted EBITDA as determined by
us excludes some, but not all, items that affect net income, they
may not be comparable to EBITDA and Adjusted EBITDA or similarly
titled measures used by other companies.
The following table sets forth our calculations of EBITDA and
Adjusted EBITDA:
|
|
Three Months
Ended
|
|
|
|
December 30,
2017
|
|
|
December 24,
2016
|
|
Net income
|
|
$
|
37,168
|
|
|
$
|
34,489
|
|
Add:
|
|
|
|
|
|
|
|
|
(Benefit from)
provision for income taxes
|
|
|
(934)
|
|
|
|
165
|
|
Interest expense,
net
|
|
|
19,514
|
|
|
|
18,831
|
|
Depreciation and
amortization
|
|
|
31,131
|
|
|
|
31,261
|
|
EBITDA
|
|
|
86,879
|
|
|
|
84,746
|
|
Unrealized (non-cash)
(gains) losses on changes in
fair value of
derivatives
|
|
|
1,531
|
|
|
|
(459)
|
|
Loss on sale of
business
|
|
|
4,823
|
|
|
|
—
|
|
Adjusted
EBITDA
|
|
$
|
93,233
|
|
|
$
|
84,287
|
|
The unaudited financial information included in this document
is intended only as a summary provided for your convenience, and
should be read in conjunction with the complete consolidated
financial statements of the Partnership (including the Notes
thereto, which set forth important information) contained in its
Quarterly Report on Form 10-Q to be filed by the Partnership with
the United States Securities and Exchange Commission ("SEC").
Such report, once filed, will be available on the public EDGAR
electronic filing system maintained by the SEC.
View original
content:http://www.prnewswire.com/news-releases/suburban-propane-partners-lp-announces-first-quarter-earnings-300595409.html
SOURCE Suburban Propane Partners, L.P.