Higher Margins Drive 54 Percent Improvement in Combined Gross ProfitWALTHAM, Mass., Nov 14, 2005 /PRNewswire-FirstCall via COMTEX News Network/ -- Global Partners LP
(NYSE: GLP), one of New England's largest wholesale distributors of
distillates, gasoline, and residual oil and bunker fuel to wholesalers,
retailers and commercial customers, today announced its financial results for
the third-quarter ended September 30, 2005. On October 4, 2005, Global
Partners closed its initial public offering. The financial statements and
financial information presented below reflect the operations of Global
Companies LLC and its three affiliates, Global Montello Group LLC, Chelsea
Sandwich LLC and Glen Hes Corp. (the "affiliates," and together with Global
Companies LLC, the "Companies"), the predecessor of Global Partners LP.
Financial Results for the Three Months Ended September 30, 2005 and 2004
For the three months ended September 30, 2005, Global Partners reported
combined gross profit of $19.0 million, a 54 percent increase from $12.3
million in the comparable period of 2004. Sales for the third quarter of 2005
increased approximately 28 percent to $854.9 million from $670.3 million in
the comparable period of 2004. Global Partners has two operating segments --
Wholesale and Commercial. Sales in the Wholesale segment grew 26 percent to
$775.0 million from $614.7 million in the third quarter of 2004. Sales in the
Commercial segment rose by 44 percent to $79.8 million from $55.6 million in
the third quarter of 2004.
Global Partners recorded a net loss for the third quarter of 2005 of $2.0
million, versus a net loss of $2.2 million for the third quarter of 2004. The
third quarters of 2005 and 2004 are not directly comparable due to certain
special charges incurred prior to the completion of Global Partners' recent
initial public offering that resulted in $4.2 million of expenses in the third
quarter of 2005, including:
* a $3.1 million charge related to management bonuses for services
rendered in connection with the organization of Global Partners LP; and
* a $1.1 million charge for the termination of an insurance policy
Earnings before interest, taxes, depreciation and amortization ("EBITDA")
for the third quarter of 2005 was $2.1 million, compared with $0.5 million for
the third quarter of 2004. Please refer to Table 1, included in this news
release, for a reconciliation of net loss, as reported, to EBITDA.
"Higher margins across our business drove a strong operating performance
in the third quarter," said Eric S. Slifka, Global Partners' president and
chief executive officer. "In what is typically a seasonally weak period for
the industry, our third-quarter performance reflects the benefits of a diverse
product mix, margin enhancements and favorable pricing for refined petroleum
products. In October, we completed our initial public offering, generating
more than $100 million in net offering proceeds."
Financial Results for the Nine Months Ended September 30, 2005 and 2004
Through the first nine months of 2005, Global Partners reported combined
gross profit of $61.8 million, an increase of 21 percent from $51.3 million
for the same period in 2004. Sales for the first nine months of 2005
increased to $2.8 billion compared with $2.2 billion for the same period in
2004. Sales in the Wholesale segment grew 32 percent to $2.5 billion in the
first nine months of 2005 from $1.9 billion in the same period of 2004. Sales
in the Commercial segment rose by 21 percent in the first nine months of 2005
to $284 million from $235 million in the same period of 2004.
Net income for the nine months ended September 30, 2005 was $8.3 million,
versus $10.6 million through the first nine months of 2004. With respect to
net income, the nine-month periods of 2005 and 2004 are not directly
comparable due to certain special charges incurred prior to the completion of
Global Partners' recent initial public offering that resulted in $4.2 million
of expenses in the 2005 period, including:
* a $3.1 million charge related to management bonuses for services
rendered in connection with the organization of Global Partners LP; and
* a $1.1 million charge for the termination of an insurance policy
For the nine months ended September 30, 2005, Global Partners' EBITDA was
$18.4 million, compared with $15.6 million for the first nine months of 2004.
Please refer to Table 1, included in this news release, for a reconciliation
of net income, as reported, to EBITDA.
Distributions of Available Cash
Within 45 days of each quarter, beginning with the quarter ending December
31, 2005, Global Partners will distribute all available cash to unitholders of
record on the applicable record date. Global Partners intends to pay a
minimum quarterly distribution of $0.4125 per unit, or $1.65 per year, on all
common units and subordinated units, to the extent Global Partners has
sufficient cash from operations after establishment of cash reserves and
payment of fees and expenses. The minimum quarterly distribution for the
period ending December 31, 2005 will be adjusted to reflect the length of time
from the closing of the Global Partners initial public offering on October 4,
2005.
Conference Call Information
Global Partners will conduct a conference call today at 10:00 a.m. ET to
review its third-quarter 2005 financial results. To participate in the call,
dial (888) 349-5690 (passcode: 1878228), approximately 10 minutes prior to the
start time or access the call live via the "Investors" section of the Global
Partners website, http://www.globalp.com.
For those unable to listen to the live call, a replay will be available
from 11:00 a.m. ET today through midnight ET Monday, November 21 by dialing
(800) 642-1687 or (706) 645-9291. The call also will be archived on the
Global Partners website.
Use of Non-GAAP Financial Measure
The following table presents a financial measure, EBITDA, which means
earnings before interest, taxes, depreciation and amortization. Global
Partners uses EBITDA as a supplemental financial measure to assess: its
compliance with certain financial covenants included in its debt agreements;
financial performance without regard to financing methods, capital structure,
income taxes or historical cost basis; ability to generate cash sufficient to
pay interest on its indebtedness and to make distributions to its partners;
its operating performance and return on invested capital as compared to those
of other companies in the wholesale marketing and distribution of refined
petroleum products business, without regard to financing methods and capital
structure; and the viability of acquisitions and capital expenditure projects
and the overall rates of return of alternative investment opportunities.
EBITDA is not calculated or presented in accordance with generally accepted
accounting principles, or GAAP. EBITDA should not be considered an alternative
to net income, operating income, cash flow from operating activities or any
other measure of financial performance or liquidity presented in accordance
with GAAP. EBITDA excludes some, but not all, items that affect net income and
operating income, and these measures may vary among other companies.
Therefore, EBITDA as presented below may not be comparable to similarly titled
measures of other companies.
GLOBAL COMPANIES LLC AND AFFILIATES (PREDECESSOR)
TABLE 1: RECONCILIATION OF NET INCOME (LOSS) TO EBITDA
Three Months Ended Nine Months Ended
September 30, September 30,
2005 2004 2005 2004
Net income (loss) $(2,047,870) $(2,200,888) $8,349,217 $10,551,256
Add:
Depreciation and
amortization 967,039 1,072,240 2,895,950 2,202,363
Interest expense 3,190,951 1,645,786 7,168,642 2,808,634
Income tax expense -- -- -- --
EBITDA $2,110,120 $517,138 $18,413,809 $15,562,253
About Global Partners LP
Global Partners is a Delaware limited partnership formed by affiliates of
the Slifka family. Global Partners owns, controls or has access to one of the
largest terminal networks of refined petroleum products in New England.
Global Partners is one of the largest wholesale distributors of distillates
(such as home heating oil, diesel and kerosene), gasoline, and residual oil
and bunker fuel to wholesalers, retailers and commercial customers in New
England.
Safe Harbor Statement
This news release may contain certain "forward-looking statements" within
the meaning of the federal securities laws. These forward-looking statements
are identified as any statements that do not relate strictly to historical or
current facts and can generally be identified by the use of forward-looking
terminology including "may," "believe," "expect," "anticipate," "estimate,"
"continue" or other similar words. Such statements may discuss future
expectations for or contain projections of results of operations, financial
condition or our ability to make distributions to unit holders or state other
"forward-looking" information. Forward-looking statements are not guarantees
of performance. Although we believe these forward-looking statements are based
on reasonable assumptions, statements made regarding future results are
subject to a number of assumptions, uncertainties and risks, many of which are
beyond our control, which may cause future results to be materially different
from the results stated or implied in this document. Additional information
about risks and uncertainties that could cause actual results to differ
materially from forward-looking statements is contained under the caption
"Risk Factors" in our prospectus dated September 28, 2005 as filed with the
Securities and Exchange Commission on September 29, 2005 pursuant to Rule
424(b) of the Securities Act of 1933. We refer you to that filing for that
additional information regarding our risks and uncertainties. All
forward-looking statements included in this news release and all subsequent
written or oral forward-looking statements attributable to us or persons
acting on our behalf are expressly qualified in their entirety by these
cautionary statements. The forward-looking statements speak only as of the
date made, other than as required by law, and we undertake no obligation to
publicly update or revise any forward-looking statements, whether as a result
of new information, future events or otherwise.
Financial statements follow:
The financial statements and financial information presented below reflect
the operations of Global Companies LLC and its three affiliates, Global
Montello Group LLC, Chelsea Sandwich LLC and Glen Hes Corp. (the "Affiliates,"
and together with Global Companies LLC, the "Companies"), the predecessor of
Global Partners LP.
GLOBAL COMPANIES LLC AND AFFILIATES (PREDECESSOR)
COMBINED BALANCE SHEETS
September 30, December 31,
2005 2004
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $ 8,735,963 $ 3,305,873
Accounts receivable,
less allowance of $2,004,000
as of September 30, 2005 and
$1,862,000 as of December 31, 2004 165,014,095 162,433,931
Accounts receivable -- affiliates 2,435,974 2,081,057
Inventories 299,913,902 165,585,877
Brokerage margin deposits 16,365,000 8,537,748
Prepaid expenses and other current assets 12,863,743 3,580,587
Total current assets $505,328,677 $345,525,073
Property and equipment, net 21,810,692 22,630,437
Intangible assets, net 11,008,304 12,225,407
Accounts receivable -- affiliates 4,062,867 4,096,505
Notes and advances receivable -- 5,881,958
Other assets 4,719,696 2,602,138
Total assets $546,930,236 $392,961,518
Liabilities and members' equity
Current liabilities:
Revolving line of credit $-- $139,900,000
Accounts payable 189,016,004 140,484,950
Notes payable, other -- current portion 51,277,449 5,277,449
Accrued expenses and
other current liabilities 19,391,226 25,154,404
Obligations on forward fixed
price contracts 100,953,759 6,488,363
Total current liabilities $360,638,438 $317,305,166
Revolving line of credit 160,700,000 --
Notes payable, other --
less current portion 1,649,619 47,855,879
Other long-term liabilities 4,325,101 4,638,064
Commitments and contingencies -- --
Members' equity 19,617,078 23,162,409
Total liabilities and members' equity $546,930,236 $392,961,518
The financial statements and financial information presented below reflect
the operations of Global Companies LLC and its three affiliates, Global
Montello Group LLC, Chelsea Sandwich LLC and Glen Hes Corp. (the "Affiliates,"
and together with Global Companies LLC, the "Companies"), the predecessor of
Global Partners LP.
GLOBAL COMPANIES LLC AND AFFILIATES (PREDECESSOR)
COMBINED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2005 2004 2005 2004
Sales $854,852,741 $670,268,348 $2,770,129,135 $2,181,504,654
Cost of sales 835,902,593 657,925,559 2,708,299,663 2,130,194,553
Gross profit 18,950,148 12,342,789 61,829,472 51,310,101
Selling,
general and
administrative
expenses 11,644,035 7,667,308 29,426,773 23,260,333
Operating
expenses 4,707,362 4,824,882 14,617,768 14,270,845
Amortization
expenses 405,701 405,701 1,217,103 419,033
Operating income
(loss) 2,193,050 (555,102) 16,567,828 13,359,890
Interest expense 3,190,951 1,645,786 7,168,642 2,808,634
Other expense 1,049,969 -- 1,049,969 --
Net income
(loss) $(2,047,870) $(2,200,888) $8,349,217 $10,551,256
Contacts:
Thomas A. McManmon Jr. Edward J. Faneuil
Executive Vice President and Executive Vice President,
Chief Financial Officer General Counsel and Secretary
Global Partners LP Global Partners LP
(781) 894-8800 (781) 894-8800
SOURCE Global Partners LP
Thomas A. McManmon Jr.
Executive Vice President and Chief Financial Officer
+1-781-894-8800
Edward J. Faneuil
Executive Vice President, General Counsel and
Secretary
+1-781-894-8800
Both of Global Partners LP