WALTHAM, Mass.--(BUSINESS WIRE)--Nov. 8, 2007--Global Partners LP
(NYSE:GLP) today reported financial results for the third quarter
ended September 30, 2007.
Financial Results for the Three Months Ended September 30, 2007
and 2006
Net income for the third quarter of 2007 was $2.5 million, or
$0.19 per diluted limited partner unit, compared with $6.2 million, or
$0.53 per diluted limited partner unit, for the same period in 2006.
The partnership had approximately 13.1 million and 11.3 million
weighted average limited partner units outstanding (basic and diluted)
for the three months ended September 30, 2007 and 2006, respectively.
Earnings before interest, taxes, depreciation and amortization
(EBITDA) for the three months ended September 30, 2007 was $9.9
million compared with $10.9 million for the same period in 2006.
Distributable cash flow for the third quarter of 2007 was $4.5
million compared with $6.7 million for the third quarter of 2006.
"We posted third-quarter results that were in line with our
expectations," said Eric Slifka, president and chief executive officer
of Global Partners. "Product volumes increased 50% during the quarter,
primarily reflecting our acquisition of refined products terminals
earlier this year from ExxonMobil, and these assets are performing on
plan. As previously discussed, in last year's third quarter we
benefited from temporary market inefficiencies associated with ethanol
and other specialty fuels that resulted in approximately $4.0 million
of additional net income. From a margin perspective, the broad mix of
products sold during the quarter enabled us to offset a challenging
gasoline pricing environment," said Slifka. "In particular, we
delivered an exceptional third quarter in our distillates business."
Sales for the three months ended September 30, 2007 increased to
$1.6 billion from $995.8 million for the same period in 2006.
Wholesale segment sales were $1.5 billion in the third quarter of 2007
compared with $927.7 million in the same period in 2006. Commercial
segment sales were $58.5 million for the third quarter of 2007
compared with $68.1 million in 2006. Combined gross profit was $23.9
million in the third quarter of 2007 versus $25.7 million in the third
quarter of 2006.
Financial Results for the Nine Months Ended September 30, 2007 and
2006
For the nine months ended September 30, 2007, net income was $36.0
million, or $0.66 per diluted limited partner unit, compared with
$22.4 million, or $1.68 per diluted limited partner unit, for the same
period in 2006. The partnership had approximately 12.2 million and
11.3 million weighted average limited partner units outstanding (basic
and diluted) for the nine months ended September 30, 2007 and 2006,
respectively. Net income for the first nine months of 2007 includes
one-time gains of $14.1 million from Global Partners' sale of its
investment in NYMEX Holdings, Inc. and related NYMEX seats. Net income
as adjusted for one-time gains was $21.9 million for the first nine
months of 2007 compared with $22.4 million in the same period in 2006.
EBITDA for the first nine months of 2007 was $53.4 million
compared with $34.3 million for the nine months ended September 30,
2006. Adjusted EBITDA, which excludes the one-time NYMEX-related
gains, was $39.3 million for the first nine months of 2007, up from
$34.3 million for the same period in 2006.
Distributable cash flow for the nine-month period of 2007 was
$25.4 million compared with $24.5 million for the first nine months of
2006.
Sales for the first nine months of 2007 increased to $4.6 billion
from $3.4 billion for the first nine months of 2006. Wholesale segment
sales were $4.3 billion for the first nine months of 2007 compared
with $3.1 billion in the same period in 2006. Commercial segment sales
were $271.0 million in the first nine months of 2007 compared with
$302.7 million in the comparable period of 2006. Combined gross profit
was $87.8 million through the first nine months of 2007 compared with
$78.6 million through the first nine months of 2006.
Net income as adjusted for one-time gains, adjusted net income per
diluted limited partner unit, EBITDA, adjusted EBITDA and
distributable cash flow are non-GAAP (Generally Accepted Accounting
Principles) financial measures 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
these non-GAAP financial measures to their most directly comparable
GAAP financial measures for the three and nine months ended September
30, 2007 and 2006.
Recent Highlights:
-- The partnership increased its quarterly cash distribution to
$0.4800 per unit ($1.92 per unit on an annualized basis) for
the period from July 1, 2007 through September 30, 2007. The
distribution represents an increase of 7.9% over the quarterly
distribution of $0.4450 paid in November 2006 and an increase
of approximately 1.6% over the quarterly distribution of
$0.4725 paid in August 2007.
-- Global Partners signed an agreement to acquire two Long Island
refined products terminals from ExxonMobil. Located in Inwood
and Glenwood Landing, New York, the terminals have a combined
storage capacity of 430,000 barrels. The transaction is
expected to close in the fourth quarter of 2007.
-- Global Partners this month is bringing back into service
approximately 145,000 barrels of previously idle refined
products storage capacity at its Burlington, Vermont terminal.
"The high-quality strategic assets we have acquired from
ExxonMobil in 2007 position us for continued growth in the quarters
ahead," Slifka said. "Our completed and pending acquisitions from
ExxonMobil, together with the capacity being added in Burlington,
increase our terminal network by almost 1.9 million barrels, enabling
Global Partners to continue to expand its share and prominence in key
Northeast markets."
Financial Results Conference Call
Management will review Global Partners' third-quarter 2007
financial results in a teleconference call for analysts and investors
at 10:00 a.m. ET today.
Time: 10:00 a.m. ET
Dial-in numbers: (877) 741-4245 (U.S. and Canada)
(719) 325-4822 (International)
Five-day replay: (888) 203-1112 (U.S. and Canada)
(719) 457-0820 (International)
Conference code: 1153294 (Required for replay only)
The call also will be webcast live and archived on the Global
Partners' website, www.globalp.com.
Use of Non-GAAP Financial Measures
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 Global Partners' general partner interest as
provided under Emerging Issues Task Force 03-06 ("EITF 03-06") and a
non-cash reduction in net income available to limited partners under
EITF 98-05, "Accounting for Convertible Securities with Beneficial
Conversion Features or Contingently Adjustable Conversion Ratios"
(EITF 98-05), divided by the weighted average number of outstanding
diluted limited partner units during the period. Net income per
diluted limited partner unit as dictated by 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 limited partnership agreement
of Global Partners 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 business.
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. The non-cash
reduction under EITF 98-05 is the result of accounting for the sale of
Class B units on May 9, 2007. Although EITF 98-05 affects net income
available to limited partners, it does not affect net income or
distributable cash flow to limited partners, nor does it affect total
unitholders equity. Adjusted net income per diluted limited partner
unit is a non-GAAP financial measure and should not be considered as
an alternative to net income per diluted limited partner unit or any
other measure of financial performance presented in accordance with
GAAP. In addition, adjusted net income per diluted limited partner
unit may not be comparable to the adjusted net income per diluted
limited partner unit or similarly titled measure of other companies.
EBITDA, adjusted EBITDA and net income as adjusted for one-time
gains are used as supplemental financial measures by management and
external users of the partnership's financial statements 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; 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.
Adjusted EBITDA and net income as adjusted for one-time gains for the
nine months ended September 30, 2007 reflect the exclusion of the
$14.1 million gain on investment in the first quarter of 2007. EBITDA,
adjusted EBITDA and net income as adjusted for one-time gains are not
calculated or presented in accordance with GAAP. EBITDA, adjusted
EBITDA and net income as adjusted for one-time gains 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,
adjusted EBITDA and net income as adjusted for one-time gains exclude
some, but not all, items that affect net income, and these measures
may vary among other companies. Therefore, EBITDA, adjusted EBITDA and
net income as adjusted for one-time gains 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 flow 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 for the nine months ended
September 30, 2007 reflects the exclusion of the $14.1 million gain on
investment in the first quarter of 2007. Distributable cash flow is a
non-GAAP financial measure and should not be considered as an
alternative to net income, cash flow from operations or any other
measure of financial performance or liquidity presented in accordance
with 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 publicly traded master limited partnership
based in Waltham, Massachusetts, owns, controls and has access to one
of the largest terminal networks of refined petroleum products in the
Northeast. The partnership is one of the largest wholesale
distributors of gasoline, distillates (such as home heating oil,
diesel and kerosene) and residual oil to wholesalers, retailers and
commercial customers in the region. Global Partners LP, a FORTUNE
500(R) company, trades on the New York Stock Exchange under the ticker
symbol "GLP." For additional information, please visit
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, goals, 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
Annual Report on Form 10-K for the year ended December 31, 2006 and
Quarterly Report on Form 10-Q for the quarter ended June 30, 2007 and
subsequent filings the partnership makes with the Securities and
Exchange Commission. 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.
The financial statements and financial information presented below
reflect the operations of Global Partners LP.
GLOBAL PARTNERS LP
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except for per unit data)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
--------------------- -----------------------
2007 2006 2007 2006
----------- --------- ----------- -----------
Sales $1,598,461 $995,834 $4,555,727 $3,378,210
Cost of sales 1,574,514 970,113 4,467,906 3,299,628
---------- -------- ---------- ----------
Gross profit 23,947 25,721 87,821 78,582
Costs and operating
expenses:
Selling, general and
administrative
expenses 9,476 10,292 34,340 30,636
Operating expenses 6,939 5,336 19,139 16,153
Amortization expenses 388 358 1,104 1,170
---------- -------- ---------- ----------
Total costs and
operating expenses 16,803 15,986 54,583 47,959
---------- -------- ---------- ----------
Operating income 7,144 9,735 33,238 30,623
Interest expense (4,614) (3,414) (10,453) (7,520)
Other income - 8 - 364
Gain on sale of
investment - - 14,118 -
---------- -------- ---------- ----------
Income before income tax
expense 2,530 6,329 36,903 23,467
Income tax expense - (95) (888) (1,065)
---------- -------- ---------- ----------
Net income $ 2,530 $ 6,234 $ 36,015 $ 22,402
========== ======== ========== ==========
Less:
General partner's
interest in net
income(1) (44) (125) (712) (449)
---------- -------- ---------- ----------
Limited partners'
interest in net
income $ 2,486 $ 6,109 $ 35,303 $ 21,953
========== ======== ========== ==========
Net income per limited
partner unit, basic and
diluted(2)(3)(4) $ 0.19 $ 0.53 $ 0.66 $ 1.68
========== ======== ========== ==========
Weighted average limited
partners' units
outstanding, basic and
diluted 13,071 11,285 12,233 11,285
========== ======== ========== ==========
(1) Calculation includes the effect of the private placement of Class
B units on May 9, 2007 and, as a result, the general partner interest
was 1.73% for the three months ended September 30, 2007 and, based on
a weighted average, 1.99% for the nine months ended September 30,
2007. For the three and nine months ended September 30, 2006, the
general partner interest was 2%.
(2) Under the provisions of EITF 03-06, "Participating Securities and
the Two-Class Method under FASB Statement No. 128," net income per
limited partner unit for the nine months ended September 30, 2007 and
for the three and nine months ended September 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 these periods. EITF 03-06 does not impact
the net income per limited partner unit calculation for the three
months ended September 30, 2007 because the Partnership's net income
did not exceed its distribution for this period.
(3) In connection with the private placement of Class B units, the
Partnership was required to take into account the effect of EITF 98-
05, "Accounting for Convertible Securities with Beneficial Conversion
Features or Contingently Adjustable Conversion Ratios." As a result,
a non-cash reduction in net income available to limited partners was
recorded for the nine months ended September 30, 2007 because the
fair value of the Partnership's common units on May 9, 2007 (the date
on which the Class B units were issued) was greater than the purchase
price of the Class B units which was established at the time of the
execution of the Unit Purchase Agreement on March 14, 2007. Although
EITF 98-05 affects net income available to limited partners, it does
not affect net income nor does it affect total unitholders' equity.
(4) Calculation includes the weighted average effect of the private
placement of Class B units which were converted to common units for
the nine months ended September 30, 2007. Per unit data is calculated
on a quarterly basis pursuant to EITF 03-06; therefore, per unit data
for the nine months ended September 30, 2007 and 2006 equals the sum
of the respective first three quarters.
GLOBAL PARTNERS LP
CONSOLIDATED BALANCE SHEET
(In thousands)
(Unaudited)
September 30, December 31,
2007 2006
------------- ------------
Assets
Current assets:
Cash and cash equivalents $ 2,928 $ 3,861
Accounts receivable, net 333,361 202,580
Accounts receivable - affiliates 4,594 1,988
Inventories 379,174 288,067
Available for sale securities - 13,913
Brokerage margin deposits 9,462 625
Fair value of forward fixed contracts 1,377 66,115
Prepaid expenses and other current
assets 13,920 18,924
------------ -----------
Total current assets 744,816 596,073
Property and equipment, net 141,808 31,657
Intangible assets, net 8,507 9,076
Other assets 7,506 2,081
------------ -----------
Total assets $ 902,637 $ 638,887
============ ===========
Liabilities and partners' equity
Current liabilities:
Accounts payable $ 300,641 $ 222,034
Revolving line of credit - current
portion 232,400 188,700
Notes payable, other - current portion 1,321 319
Environmental liabilities - current
portion 500 -
Accrued expenses and other current
liabilities 50,421 35,573
Income taxes payable - 1,164
Obligations on forward fixed contracts
and other derivatives 24,487 -
------------ -----------
Total current liabilities 609,770 447,790
Revolving line of credit - less current
portion 122,000 82,000
Notes payable, other - less current
portion - 1,239
Environmental liabilities - less current
portion 7,500 -
Accrued pension benefit cost 3,284 3,170
Deferred compensation 1,435 1,429
Other long-term liabilities 234 20
------------ -----------
Total liabilities 744,223 535,648
Partners' equity 158,414 103,239
------------ -----------
Total liabilities and partners' equity $ 902,637 $ 638,887
============ ===========
GLOBAL PARTNERS LP
Financial Reconciliations
(In thousands, except per unit data)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------- -------------------
2007 2006 2007 2006
---------- --------- --------- ---------
Table 1 - Reconciliation of
net income to net income as
adjusted for one-time gains
-----------------------------
Net income $ 2,530 $ 6,234 $ 36,015 $ 22,402
Gain on sale of investment - - (14,118) -
--------- -------- -------- --------
Net income as adjusted for
one-time gains $ 2,530 $ 6,234 $ 21,897 $ 22,402
========= ======== ======== ========
Table 2 - Reconciliation of
net income per diluted
limited partner unit to
adjusted net income per
diluted limited partner unit
-----------------------------
Net income per diluted
limited partner unit under
EITF 03-06 and EITF 98-05 $ 0.19 $ 0.53 $ 0.66 $ 1.68
Dilutive impact of
theoretical distribution of
earnings under EITF 03-06 - 0.01 1.10 0.27
Dilutive impact of non-cash
reduction under EITF 98-05 - - 1.33 -
--------- -------- -------- --------
Adjusted net income per
diluted limited partner unit $ 0.19 $ 0.54 $ 3.09 $ 1.95
========= ======== ======== ========
Table 3 - Reconciliation of
net income to EBITDA and
Adjusted EBITDA
-----------------------------
Net income $ 2,530 $ 6,234 $ 36,015 $ 22,402
Depreciation and
amortization 2,771 1,127 6,107 3,287
Interest expense 4,614 3,414 10,453 7,520
Income tax expense - 95 888 1,065
--------- -------- -------- --------
EBITDA 9,915 10,870 53,463 34,274
Gain on sale of
investment - - (14,118) -
--------- -------- -------- --------
Adjusted EBITDA $ 9,915 $ 10,870 $ 39,345 $ 34,274
========= ======== ======== ========
Table 4 - Reconciliation of
cash flow from operating
activities to EBITDA and
Adjusted EBITDA
-----------------------------
Cash flow from operating
activities $(120,936) $(64,121) $(19,639) $(51,882)
Net change in operating
assets and liabilities 126,237 71,482 61,761 77,571
Interest expense 4,614 3,414 10,453 7,520
Income tax expense - 95 888 1,065
--------- -------- -------- --------
EBITDA 9,915 10,870 53,463 34,274
Gain on sale of
investment - - (14,118) -
--------- -------- -------- --------
Adjusted EBITDA $ 9,915 $ 10,870 $ 39,345 $ 34,274
========= ======== ======== ========
Table 5 - Reconciliation of
net income to distributable
cash flow
-----------------------------
Net income $ 2,530 $ 6,234 $ 36,015 $ 22,402
Depreciation and amortization 2,771 1,127 6,107 3,287
Gain on sale of investment - - (14,118) -
Maintenance capital
expenditures (756) (692) (2,623) (1,207)
--------- -------- -------- --------
Distributable cash flow $ 4,545 $ 6,669 $ 25,381 $ 24,482
========= ======== ======== ========
Table 6 - Reconciliation of
cash flow from operating
activities to distributable
cash flow
-----------------------------
Cash flow from operating
activities $(120,936) $(64,121) $(19,639) $(51,882)
Net change in operating
assets and liabilities 126,237 71,482 61,761 77,571
Gain on sale of investment - - (14,118) -
Maintenance capital
expenditures (756) (692) (2,623) (1,207)
--------- -------- -------- --------
Distributable cash flow $ 4,545 $ 6,669 $ 25,381 $ 24,482
========= ======== ======== ========
CONTACT: Global Partners LP
Thomas J. Hollister, 781-894-8800
Chief Operating Officer and
Chief Financial Officer
or
Edward J. Faneuil, 781-894-8800
Executive Vice President,
General Counsel and Secretary
SOURCE: Global Partners LP