WALTHAM, Mass., Aug. 10 /PRNewswire-FirstCall/ -- Global Partners LP
(NYSE: GLP), one of New England's largest wholesale distributors of
distillates, gasoline and residual oil to wholesalers, retailers and
commercial customers, today announced financial results for the three months
ended June 30, 2006.
Financial Results for the Three Months Ended June 30, 2006 and 2005
Net income for the three months ended June 30, 2006 increased to $3.5
million, or $0.30 per diluted limited partner unit, from a net loss of $0.9
million for the same period in 2005. Adjusted net income per diluted limited
partner unit was $0.30 for the second quarter of 2006. There is no
year-over-year per unit comparison because Global Partners was not a public
company in the second quarter of 2005. Adjusted net income per diluted
limited partner unit is a non-GAAP (Generally Accepted Accounting Principles)
financial measure explained in greater detail below under "Use of Non-GAAP
Financial Measures." Please refer to Financial Reconciliations included in
this news release for a reconciliation of net income per diluted limited
partner unit to adjusted net income per diluted limited partner unit for the
three months ended June 30, 2006.
Earnings before interest, taxes, depreciation and amortization ("EBITDA")
for the three months ended June 30, 2006 increased more than 200% to $6.6
million from $2.2 million for the same period in 2005. EBITDA is a non-GAAP
measure explained in greater detail below under "Use of Non-GAAP Financial
Measures." Please refer to Financial Reconciliations included in this news
release for reconciliations of GAAP net income to EBITDA and cash flow from
operating activities to EBITDA for the three months ended June 30, 2006 and
2005.
Distributable cash flow for the second quarter of 2006 was $4.2 million.
Distributable cash flow is a non-GAAP financial measure explained in greater
detail below under "Use of Non-GAAP Financial Measures." Please refer to
Financial Reconciliations included in this news release for reconciliations of
GAAP net income to distributable cash flow and cash flow from operating
activities to distributable cash flow for the three months ended June 30,
2006.
Reflecting higher commodity prices, sales for the three months ended June
30, 2006 increased approximately 35% to $1.0 billion from $763.2 million in
the same period of 2005. Sales in the Wholesale segment increased
approximately 39% to $950.8 million from $684.2 million in the second quarter
of 2005. Sales in the Commercial segment increased approximately 2% to $80.6
million from $79.0 million in the second quarter of 2005.
For the three months ended June 30, 2006, Global Partners reported
combined gross profit of $20.6 million, compared with $14.5 million in the
same period of 2005.
"Global's outstanding financial performance was driven by our focus on
higher-margin product lines," said President and Chief Executive Officer Eric
Slifka. "While temperatures in the second quarter were warmer than normal,
our results underscore the strength of our non-weather dependent products,
superior logistics and supply expertise."
Recent Highlights
Since the end of the first quarter:
* The Partnership declared a cash distribution of $0.4375 per unit for the
period from April 1, 2006 through June 30, 2006. This distribution
represents an increase of approximately 3% over the first-quarter 2006
distribution and approximately 6% since Global Partners' initial public
offering in September 2005.
* Global Partners completed the acquisition of a refined petroleum
products terminal in Bridgeport, Connecticut. The terminal has storage
capacity for approximately 109,000 barrels of refined products,
including #2 fuel oil and low sulfur diesel.
* Global Partners signed an agreement with its 11-member bank group to
amend the Partnership's Revolving Credit Facility, increasing its
borrowing capacity by $100 million to a total of $600 million.
* Thomas J. Hollister joined Global Partners on July 1 as Executive Vice
President and Chief Financial Officer. Mr. Hollister is the former Vice
Chairman of Citizens Financial Group, Inc. and the former Chairman,
President and Chief Executive Officer of Citizens Capital, Inc., the
corporation's Private Equity and Venture Capital Business.
Financial Results for the Six Months Ended June 30, 2006 and 2005
For the first six months of 2006, Global Partners reported combined gross
profit of $52.9 million, an increase of 23% from $42.9 million for the same
period in 2005. Sales for the first six months of 2006 increased to $2.4
billion compared with $1.9 billion for the same period in 2005. Sales in the
Wholesale segment grew 26% to $2.1 billion in the first six months of 2006
from $1.7 billion in the same period of 2005. Sales in the Commercial segment
rose by 15% in the first six months of 2006 to $234.6 million from $203.9
million in the same period of 2005.
Net income for the six months ended June 30, 2006 was $16.2 million, or
$1.15 per diluted limited partner unit, versus $10.4 million for the first six
months of 2005. Adjusted net income per diluted limited partner unit was
$1.40 for the first six months of 2006. There is no year-over-year per unit
comparison because Global Partners was not a public company in the first half
of 2005. Please refer to Financial Reconciliations included in this news
release for a reconciliation of net income per diluted limited partner unit to
adjusted net income per diluted limited partner unit for the six months ended
June 30, 2006.
For the first six months of 2006, Global Partners' EBITDA was $23.4
million compared with $16.6 million for the same period in 2005. Please refer
to Financial Reconciliations included in this news release for a
reconciliation of GAAP net income to EBITDA and cash flow from operating
activities to EBITDA for the six months ended June 30, 2006 and 2005.
Distributable cash flow for the first six months of 2006 was $17.8
million. Please refer to Financial Reconciliations included in this news
release for reconciliations of GAAP net income to distributable cash flow and
cash flow from operating activities to distributable cash flow for the six
months ended June 30, 2006.
Financial Results Conference Call
Management will review Global Partners' second-quarter 2006 financial
results in a teleconference call for analysts and investors at 10:00 a.m. ET
today.
Dial-in numbers: (800) 289-0493 (U.S. and Canada)
(913) 981-5510 (International)
Five-day replay: (888) 203-1112 (U.S. and Canada)
(719) 457-0820 (International)
Conference code: 3074983 (Required for replay only)
The call also will be audio webcast live and archived on the Global
Partners' website, http://www.globalp.com.
Use of Non-GAAP Financial Measures
Net income per diluted limited partner unit as dictated by Emerging Issues
Task Force 03-06 ("EITF 03-06") is theoretical and pro forma in nature and
does not reflect the economic probabilities of whether earnings for an
accounting period would or could be distributed to unitholders. The
Partnership Agreement does not provide for the quarterly distribution of net
income, rather, it provides for the distribution of available cash, which is a
contractually defined term that generally means all cash on hand at the end of
each quarter after establishment of sufficient cash reserves required to
operate the Partnership in a prudent manner. Accordingly, the distributions
the Partnership has paid historically and will pay in future periods are not
impacted by net income per diluted limited partner unit as dictated by EITF
03-06.
Global Partners uses adjusted net income per diluted limited partner unit
to measure its per unit financial performance. Adjusted net income per
diluted limited partner unit, as presented in the table below, is defined as
net income after adding back the theoretical amount allocated to the general
partner's interest as provided under EITF 03-06, divided by the weighted
average number of outstanding diluted limited partner units during the period.
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.
Distributable cash flow also is an important non-GAAP financial measure
for limited partners of Global Partners since it serves as an indicator of the
Partnership's success in providing a cash return on their investment.
Specifically, this financial measure indicates to investors whether or not
Global Partners is generating cash flows at a level that can sustain or
support an increase in its quarterly cash distribution. Distributable cash
flow is also a quantitative standard used by the investment community with
respect to publicly traded partnerships. Distributable cash flow should not
be considered as an alternative to net income or any other indicator of the
Partnership's performance required by GAAP. In addition, the distributable
cash flow of Global Partners may not be comparable to similarly titled
measures of other companies.
About Global Partners LP
Global Partners LP, a master limited partnership based in Waltham,
Massachusetts, is one of the largest wholesale distributors of distillates
(such as home heating oil, diesel and kerosene), gasoline and residual oil to
wholesalers, retailers and commercial customers in New England. Global
Partners LP trades on the New York Stock Exchange under the ticker symbol
"GLP." For additional information, please visit http://www.globalp.com.
Safe Harbor Statement
This news release contains 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 "will," "may," "believe," "expect," "anticipate,"
"estimate," "continue" or other similar words. Such statements may discuss
business prospects, new developments and future expectations or contain
projections of results of operations, financial condition and Global Partners
LP's ability to make distributions to unitholders. These statements are not
guarantees of performance. Although Global Partners LP believes 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 the control of Global
Partners LP, which may cause actual results to be materially different from
the forward-looking statements contained in this news release. For specific
risks and uncertainties that could cause actual results to differ materially
from forward-looking statements, please refer to Global Partners LP's
Quarterly Report on Form 10-Q for the quarter ended March 31, 2006, and its
Annual Report on Form 10-K for the year ended December 31, 2005. All
forward-looking statements included in this news release and all subsequent
written or oral forward-looking statements attributable to Global Partners LP
or persons acting on its behalf are expressly qualified in their entirety by
these cautionary statements. The forward-looking statements speak only as of
the date made, and Global Partners LP undertakes no obligation to publicly
update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise.
Contacts:
Thomas J. Hollister 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
The financial statements and financial information presented below reflect
the operations of Global Partners LP
GLOBAL PARTNERS LP
CONSOLIDATED/COMBINED STATEMENTS OF OPERATIONS
(In thousands, except for per unit data)
(Unaudited)
Successor Predecessor Successor Predecessor
---------------------- -----------------------
Three Months Ended Six Months Ended
June 30, June 30,
2006 2005 2006 2005
Consolidated Combined Consolidated Combined
Sales $1,031,353 $763,197 $2,382,376 $1,915,276
Cost of sales 1,010,709 748,706 2,329,515 1,872,397
---------- ---------- ---------- ----------
Gross profit 20,644 14,491 52,861 42,879
Selling, general and
administrative expenses 9,416 8,193 19,988 17,783
Operating expenses 5,266 4,844 10,817 9,910
Amortization expenses 406 405 812 811
---------- ---------- ---------- ----------
Operating income 5,556 1,049 21,244 14,375
Interest expense (1,786) (1,952) (4,106) (3,978)
---------- ---------- ---------- ----------
Income before income tax
expense 3,770 (903) 17,138 10,397
Income tax expense 290 - 970 -
---------- ---------- ---------- ----------
Net income (loss) 3,480 $(903) 16,168 $10,397
========== ==========
Less:
General partner's
interest in net income 70 324
---------- ----------
Limited partners'
interest in net income $3,410 $15,844
========== ==========
Net income per limited
partner unit, basic and
diluted(1)(2) $0.30 $1.15
========== ==========
Weighted average limited
partners' units
outstanding,
basic and diluted 11,285 11,285
========== ==========
(1) Under the provisions of Emerging Issues Task Force ("EITF") 03-06,
"Participating Securities and the Two-Class Method under FASB
Statement No. 128," ("EITF 03-06"), net income per limited partner
unit for the six months ended June 30, 2006 assumes a theoretical
distribution of earnings. Although this theoretical calculation
provided by EITF 03-06 does not impact the Partnership's overall net
income, it does reduce the Partnership's net income per limited
partner unit for the six months ended June 30, 2006. EITF 03-06 does
not impact the net income per limited partner unit calculation for the
three months ended June 30, 2006 because the Partnership's net income
did not exceed its distributions for the period.
(2) See Financial Reconciliations, Table #1.
GLOBAL PARTNERS LP
CONSOLIDATED BALANCE SHEET
(In thousands)
(Unaudited)
June 30, December 31,
2006 2005
---------- -----------
Assets
Current assets:
Cash and cash equivalents $940 $1,769
Accounts receivable, net 168,800 237,861
Accounts receivable - affiliates 1,783 2,005
Inventories 263,937 260,714
Brokerage margin deposits 5,517 9,210
Prepaid expenses and other current
assets 12,676 7,781
-------- --------
Total current assets 453,653 519,340
Property and equipment, net 26,145 21,975
Intangible assets, net 9,791 10,603
Other assets 2,585 2,838
-------- --------
Total assets $492,174 $554,756
======== ========
Liabilities and partners' equity
Current liabilities:
Accounts payable $184,168 $259,463
Notes payable, other -- current
portion 297 297
Income taxes payable 739 1,200
Accrued expenses and other current
liabilities 24,454 28,615
Obligations on forward fixed price
contracts and other derivatives 9,863 1,038
-------- --------
Total current liabilities 219,521 290,613
Long-term liabilities:
Revolving line of credit 183,800 181,600
Notes payable, other -- less current
portion 1,412 1,559
Other long-term liabilities 4,592 4,676
-------- --------
Total long-term liabilities 189,804 187,835
Partners' equity 82,849 76,308
-------- --------
Total liabilities and partners'
equity $492,174 $554,756
======== ========
GLOBAL PARTNERS LP
Financial Reconciliations
(In thousands, except per unit data)
(Unaudited)
Three Months Ended Six Months Ended
Table 1 -- Reconciliation of net June 30, June 30,
income per diluted limited partner 2006 2005 2006 2005
unit to adjusted net income per ------------------ ----------------
diluted limited partner unit
-----------------------------------
Net income per diluted limited
partner unit under EITF 03-06 $0.30 $1.15
Dilutive impact of theoretical
distribution of earnings - 0.25
------ ------
Adjusted net income per diluted
limited partner unit $0.30 $1.40
====== ======
Table 2 -- Reconciliation of GAAP
net income to EBITDA
---------------------------------
GAAP net income (loss) $3,480 $(903) $16,168 $10,397
Depreciation and amortization 1,088 1,106 2,160 2,227
Interest expense 1,786 1,952 4,106 3,978
Income tax expense 290 - 970 -
-------- ------ ------- -------
EBITDA $6,644 $2,155 $23,404 $16,602
======== ====== ======= =======
Table 3 -- Reconciliation of cash
flow from operating activities
to EBITDA
---------------------------------
Cash flow from operating
activities $(44,350) $186 $12,239 $40,961
Increase (decrease) in operating
assets and liabilities 48,918 17 6,089 (28,337)
Interest expense 1,786 1,952 4,106 3,978
Income tax expense 290 - 970 -
-------- ------ ------- -------
EBITDA $6,644 $2,155 $23,404 $16,602
======== ====== ======= =======
Table 4 -- Reconciliation of GAAP
net income to distributable
cash flow
---------------------------------
GAAP net income $3,480 $16,168
Depreciation and amortization 1,088 2,160
Maintenance capital expenditures (411) (515)
------ ------
Distributable cash flow $4,157 $17,813
====== ======
Table 5 -- Reconciliation of cash
flow from operating activities
to distributable cash flow
---------------------------------
Cash flow from operating
activities $(44,350) $12,239
Increase (decrease) in operating
assets and liabilities 48,918 6,089
Maintenance capital expenditures (411) (515)
------ ------
Distributable cash flow $4,157 $17,813
====== ======
Note to Editors: This release is also available on the Internet at
http://www.globalp.com
SOURCE Global Partners LP
-0- 08/10/2006
/CONTACT: Thomas J. Hollister, Executive Vice President and Chief
Financial Officer, +1-781-894-8800, or Edward J. Faneuil, Executive Vice
President, General Counsel and Secretary, +1-781-894-8800, both of Global
Partners LP /
/Web site: http://www.globalp.com /
(GLP)
CO: Global Partners LP
ST: Massachusetts
IN: OIL
SU: ERN CCA
AH-AS
-- NETH001 --
7252 08/10/2006 08:00 EDT http://www.prnewswire.com