WALTHAM, Mass., March 15, 2007 /PRNewswire-FirstCall via COMTEX News Network/ -- Global Partners LP
(NYSE: GLP) today reported net income of $11.1 million, or $0.78 per diluted
limited partner unit, for the three months ended December 31, 2006, and net
income of $33.5 million, or $2.46 per diluted limited partner unit for the
full year. Net income for the comparative periods of 2005 was $9.8 million, or
$0.70 per diluted limited partner unit, for the fourth quarter and $18.1
million for the twelve-month period. There is no year-over-year per unit
comparison because Global Partners' common units did not begin trading until
September 30, 2005.
"We capped 2006 with record fourth-quarter and annual earnings that
highlight the success of our three-pronged strategy: organic growth, bolt-on
and step-out acquisitions," said President and Chief Executive Officer Eric
Slifka. "Global successfully executed on its grass roots transportation-based
fuel initiatives, purchased a waterborne terminal in Bridgeport, Connecticut,
and acquired a pipeline terminal in Macungie, Pennsylvania. As evidenced by
the double-digit increase in quarterly and full-year net income, we continue
to transition to higher-margin products, diversify the types of fuels we sell
and effectively manage weather sensitivity in our business."
Financial Results for the Three Months Ended December 31, 2006 and 2005
Adjusted net income per diluted limited partner unit was $0.97 for the
fourth quarter of 2006, compared with $0.82 for the same period in 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 December 31, 2006 and 2005.
Earnings before interest, taxes, depreciation and amortization ("EBITDA")
for the three months ended December 31, 2006 increased approximately 18% to
$17.3 million from $14.7 million for the same period in 2005. EBITDA 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 net income to EBITDA and
cash flow from operating activities to EBITDA for the three months ended
December 31, 2006 and 2005.
Distributable cash flow for the fourth quarter of 2006 was $11.5 million,
compared with $10.2 million for the same period of 2005. 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 net
income to distributable cash flow and cash flow from operating activities to
distributable cash flow for the three months ended December 31, 2006 and 2005.
Sales for the three months ended December 31, 2006 declined 15% to $1.1
billion from $1.3 billion in the same period of 2005 as a result of lower
commodity prices and significantly warmer temperatures in the fourth quarter
of 2006. Wholesale segment sales were $996.1 million in the fourth quarter of
2006, compared with $1.1 billion for the same period in 2005. Commercial
segment sales decreased to $98.1 million in the fourth quarter of 2006 from
$140.9 million for the same period in 2005. For the three months ended
December 31, 2006, Global Partners reported combined gross profit of $34.6
million, compared with $29.9 million in the same period of 2005.
In January 2007, the Partnership declared a cash distribution of $0.4550
per unit for the period from October 1, 2006 through December 31, 2006 ($1.82
per unit on an annualized basis). The distribution represents an increase of
2.2% over the third-quarter distribution of $0.4450 per unit and an increase
of 7.1% for 2006. The total distribution of $5.2 million was paid February
14, 2007 to unitholders of record as of the close of business February 5,
2007.
Financial Results for the Twelve Months Ended December 31, 2006 and 2005
On an adjusted basis, net income per diluted limited partner unit was
$2.91 for the twelve months ended December 31, 2006. There is no year-over-
year per unit comparison because Global Partners' common units did not begin
trading until September 30, 2005.
Sales for the twelve months ended December 31, 2006 increased 12% to $4.5
billion compared with $4.0 billion for the same period in 2005. The increase
was attributable to higher commodity prices throughout most of 2006 as well as
to the acquisition of refined products terminals in Bridgeport, Connecticut
and Macungie, Pennsylvania. Sales in the Wholesale segment rose 13% to $4.1
billion in 2006 from $3.6 billion in the same period of 2005. Sales in the
Commercial segment declined 5% to $400.8 million in 2006 from $423.0 million
in 2005. Combined gross profit for the twelve months ended December 31, 2006
was $113.2 million, an increase of 23% from $91.7 million for the same period
in 2005.
EBITDA for the twelve months of 2006 was $51.5 million, compared with
$33.5 million for the same period in 2005. Please refer to Financial
Reconciliations included in this news release for reconciliations of net
income to EBITDA and cash flow from operating activities to EBITDA for the
twelve months ended December 31, 2006 and 2005.
Distributable cash flow for the twelve months ended December 31, 2006 was
$36.0 million. There is no year-over-year distributable cash flow comparison
because Global Partners' common units did not begin trading until September
30, 2005. Please refer to Financial Reconciliations included in this news
release for reconciliations of net income to distributable cash flow and cash
flow from operating activities to distributable cash flow for the twelve
months ended December 31, 2006.
"In the quarters ahead, we will remain focused on further expanding our
business through organic growth and strategic acquisitions," Slifka said.
"Our new Bridgeport and Macungie terminals are performing well, and we will
continue to pursue additional strategic opportunities that enable us to use
our expertise in supply, marketing and logistics to optimize the value of our
terminal network."
Financial Results Conference Call
Management will review Global Partners' fourth-quarter and year-end 2006
financial results in a teleconference call for analysts and investors at 10:00
a.m. ET today.
Dial-in numbers:
(800) 361-0912 (U.S. and Canada)
(913) 981-5559 (International)
Five-day replay:
(888) 203-1112 (U.S. and Canada)
(719) 457-0820 (International)
Conference code:
1745750 (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"), 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.
EBITDA is used as a supplemental financial measure 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;
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 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 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 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 publicly traded master limited partnership based in
Waltham, Massachusetts, owns, controls or 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 Northeast. Global
Partners LP 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, 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 September 30, 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.
The financial statements and financial information presented below reflect
the operations of Global Partners LP
Contacts:
Thomas J. Hollister Edward J. Faneuil
Chief Operating Officer and Executive Vice President,
Chief Financial Officer General Counsel and Secretary
Global Partners LP Global Partners LP
(781) 894-8800 (781) 894-8800
GLOBAL PARTNERS LP
CONSOLIDATED/COMBINED STATEMENTS OF INCOME
(In thousands, except for per unit data)
(Unaudited)
Successor Predecessor Successor Predecessor
(1)(3) (1)(3)
------------------------ -----------------------
Three Months Ended Twelve Months Ended
December 31, December 31,
2006 2005 2006 2005
------------------------- -------------------------
Consolidated Combined Consolidated Combined
Sales $1,094,208 $1,275,729 $4,472,418 $4,045,858
Cost of sales 1,059,564 1,245,841 4,359,192 3,954,141
------------ ---------- ------------ -----------
Gross profit 34,644 29,888 113,226 91,717
Operating expenses:
Selling, general and
administrative
expenses 12,755 11,021 43,027 40,448
Operating expenses 6,005 5,081 22,158 19,698
Amortization
expenses 358 406 1,528 1,623
------------- ----------- ------------- -----------
Total operating
expenses 19,118 16,508 66,713 61,769
Operating income 15,526 13,380 46,513 29,948
Interest expense (4,381) (2,792) (11,901) (9,961)
Other income
(expense), net 515 150 515 (900)
------------- ----------- ------------- -----------
Income before income
tax expense 11,660 10,738 35,127 19,087
Income tax expense (601) (986) (1,666) (986)
------------- ----------- ------------- -----------
Net income (loss) $11,059 $9,752 $33,461 $18,101
===========
Less:
General partner's
interest in net
income (220) (188) (669)
------------- ----------- -------------
Limited partners'
interest in net
income $10,839 $9,564 $32,792
============= ============ ============
Net income per limited
partner unit, basic
and diluted (2)(3) $0.78 $0.70 $2.46
============= ============ ============
Weighted average
limited partners'
units outstanding,
basic and diluted 11,285 11,285 11,285
============= ============ ============
(1) Includes Successor's results for the period October 4, 2005
through December 31, 2005. Combined results for the three and twelve
months ended December 31, 2005 is a non-GAAP financial measure
presented to provide additional information for comparing year-over-
year information.
(2) Under the provisions of EITF 03-06, net income per limited partner
unit for the three and twelve months ended December 31, 2006 and for
the period October 4, 2005 through December 31, 2005 assumes a
theoretical distribution of earnings. Although this theoretical
calculation provided by EITF 03-06 does not impact the Partnership's
overall net income for these periods, it does reduce the Partnership's
net income per limited partner unit for the three and twelve months
ended December 31, 2006 and for the period October 4, 2005 through
December 31, 2005.
(3) See Financial Reconciliations, Table #1.
GLOBAL PARTNERS LP
CONSOLIDATED BALANCE SHEET
(In thousands)
(Unaudited)
December 31, December 31,
2006 2005
------------ ------------
Assets
Current assets:
Cash and cash equivalents $3,861 $1,769
Accounts receivable, net 202,580 237,861
Accounts receivable - affiliates 1,988 2,005
Inventories 288,067 260,714
Available for sale securities 13,913 -
Brokerage margin deposits 625 9,210
Fair value of forward fixed contracts 66,115 -
Prepaid expenses and other current
assets 18,924 7,781
------------ ------------
Total current assets 596,073 519,340
Property and equipment, net 31,657 21,975
Intangible assets, net 9,076 10,603
Other assets 2,081 2,838
------------ ------------
Total assets $638,887 $554,756
============ ============
Liabilities and partners' equity
Current liabilities:
Accounts payable $222,034 $259,463
Revolving line of credit - current
portion 188,700 95,800
Notes payable, other - current
portion 319 297
Accrued expenses and other current
liabilities 35,573 28,615
Income taxes payable 1,164 1,200
Obligations on forward fixed
contracts and other derivatives - 1,038
------------ ------------
Total current liabilities 447,790 386,413
Long-term liabilities:
Revolving line of credit - less
current portion 82,000 85,800
Notes payable, other - less current
portion 1,239 1,559
Accrued pension benefit cost 3,170 3,187
Deferred compensation 1,429 1,236
Other long-term liabilities 20 253
------------ ------------
Total long-term liabilities 87,858 92,035
Partners' equity 103,239 76,308
------------ ------------
Total liabilities and partners'
equity $638,887 $554,756
============ ============
GLOBAL PARTNERS LP
Financial Reconciliations
(In thousands, except per unit data)
(Unaudited)
Table 1 - Reconciliation of Successor and Predecessor statements
of income to combined statement of income
-----------------------------------------
Successor Predecessor Combined
October 4 October 1 Three Months
through through Ended
December 31, October 3, December 31,
2005 2005 2005
------------- ----------- --------------
Sales $1,248,899 $26,830 $1,275,729
Cost of sales 1,219,991 25,850 1,245,841
------------- ----------- --------------
Gross profit 28,908 980 29,888
Operating expenses:
Selling, general and
administrative expenses 10,515 506 11,021
Operating expenses 4,924 157 5,081
Amortization expenses 389 17 406
------------- ----------- --------------
Total operating expenses 15,828 680 16,508
Operating income 13,080 300 13,380
Interest expense (2,686) (106) (2,792)
Other income (expense), net - 150 150
------------- ----------- --------------
Income before income tax expense 10,394 344 10,738
Income tax expense (986) - (986)
------------- ----------- --------------
Net income (loss) $9,408 $344 $9,752
============= ============ ==============
Successor Predecessor Combined
October 4 January 1 Twelve Months
through through Ended
December 31, October 3, December 31,
2005 2005 2005
------------- ----------- --------------
Sales $1,248,899 $2,796,959 $4,045,858
Cost of sales 1,219,991 2,734,150 3,954,141
------------- ----------- ---------------
Gross profit 28,908 62,809 91,717
Operating expenses:
Selling, general and administrative
expenses 10,515 29,932 40,447
Operating expenses 4,924 14,775 19,699
Amortization expenses 389 1,234 1,623
------------- ----------- --------------
Total operating expenses 15,828 45,941 61,769
Operating income 13,080 16,868 29,948
Interest expense (2,686) (7,275) (9,961)
Other income (expense), net - (900) (900)
------------- ----------- --------------
Income before income tax expense 10,394 8,693 19,087
Income tax expense (986) - (986)
------------- ----------- --------------
Net income (loss) $9,408 $8,693 $18,101
============= =========== ==============
GLOBAL PARTNERS LP
Financial Reconciliations
(In thousands, except per unit data)
(Unaudited)
Table 2 - Reconciliation of net
income per diluted limited partner Three Months Ended Twelve Months Ended
unit to adjusted net income per December 31, December 31,
diluted limited partner unit 2006 2005(1) 2006 2005(1)
---------------------------------- ------------------- -------------------
Net income per diluted limited
partner unit under EITF 03-06 $0.78 $0.70 $2.46
Dilutive impact of theoretical
distribution of earnings 0.19 0.12 0.45
------ ------ -------
Adjusted net income per diluted
limited partner unit $0.97 $0.82 $2.91
====== ====== =======
Table 3 - Reconciliation of net
income to EBITDA
------------------------------
Net income $11,059 $9,752 $33,461 $18,101
Depreciation and amortization 1,226 1,211 4,513 4,487
Interest expense 4,381 2,792 11,901 9,961
Income tax expense 601 986 1,666 986
------- ------- ------- -------
EBITDA $17,267 $14,741 $51,541 $33,535
======= ======= ======= =======
Table 4 - Reconciliation of cash
flow from operating activities to EBITDA
----------------------------------------
Cash flow from operating
activities $(2,597) $(25,976) $(54,479) $(28,352)
Increase in operating assets and
liabilities 14,882 36,939 92,453 50,940
Interest expense 4,381 2,792 11,901 9,961
Income tax expense 601 986 1,666 986
------- ------- ------- -------
EBITDA $17,267 $14,741 $51,541 $33,535
======= ======= ======= =======
Table 5 - Reconciliation of net
income to distributable cash flow
---------------------------------
Net income $11,059 $9,752 $33,461
Depreciation and amortization 1,226 1,211 4,513
Maintenance capital expenditures (764) (760) (1,971)
------- ------- -------
Distributable cash flow $11,521 $10,203 $36,003
======= ======= =======
Table 6 - Reconciliation of cash
flow from operating activities
to distributable cash flow
-------------------------------
Cash flow from operating
activities $(2,597) $(25,976) $(54,479)
Increase in operating assets and
liabilities 14,882 36,939 92,453
Maintenance capital expenditures (764) (760) (1,971)
------- ------- -------
Distributable cash flow $11,521 $10,203 $36,003
======= ======= =======
(1) On October 4, 2005, the Partnership completed its initial public
offering. Accordingly, net income per diluted limiter partner unit
and distributable cash flow are presented for the period October 4,
2005 through December 31, 2005.
SOURCE Global Partners LP
http://www.globalp.com