WALTHAM, Mass.--(BUSINESS WIRE)--May. 7, 2009--
Global Partners LP (NYSE:GLP) today reported financial results for the
three months ended March 31, 2009.
Net income for the first quarter of 2009 was $18.9 million, or $1.40 per
diluted limited partner unit, compared with net income of $8.6 million,
or $0.64 per diluted limited partner unit, for the same period in 2008.
The partnership had approximately 13.2 million and 13.1 million diluted
weighted average limited partner units outstanding for the three months
ended March 31, 2009 and 2008, respectively.
Earnings before interest, taxes, depreciation and amortization (EBITDA)
for the three months ended March 31, 2009 was $27.4 million, compared
with $18.5 million for the same period in 2008.
Distributable cash flow for the first quarter of 2009 was a record $22.0
million, compared with $11.8 million for the comparable quarter in 2008.
“We delivered outstanding results in the first quarter due to our
diverse product offerings and our strong asset base,” said Eric Slifka,
president and chief executive officer of Global Partners. “Net income
increased nearly 120% year-over-year, fueled by our extensive terminal
network, effective margin management, a favorable forward-product
pricing environment and our continuing initiatives to help mitigate the
effects of commodity price volatility in our business.”
Sales for the first quarter of 2009 decreased to $1.6 billion from $2.7
billion for the same period in 2008, reflecting significantly lower
refined petroleum product prices in the 2009 period. Wholesale segment
sales were $1.5 billion, or 93% of total sales, for the first quarter of
2009, compared with $2.6 billion, or 95% of total sales, for the first
quarter of 2008. Commercial segment sales were $113.2 million, or 7% of
total sales, for the first quarter of 2009 compared with $124.2 million,
or 5% of total sales, for the first quarter of 2008.
Combined product volume increased 5% in the first quarter of 2009 from
the comparable period of 2008. Global Partners sold 1.11 billion gallons
of refined petroleum products in the first quarter of 2009, versus 1.06
billion gallons in the first quarter of 2008. Wholesale segment volume
increased 4% to 1.04 billion gallons from 1.00 billion gallons.
Commercial segment volume increased 22% to 75.7 million gallons from
61.8 million gallons.
Combined gross profit improved 42% to $50.7 million in the first quarter
of 2009 from $35.6 million in the same period in 2008. Within Global
Partners’ wholesale segment, the net product margin for distillates
increased 47% to $33.9 million in the first quarter of 2009 from $23.1
million in the year-earlier period. Wholesale gasoline net product
margin increased 39% to $11.8 million in the first quarter of 2009 from
$8.5 million in the comparable period of 2008. Wholesale residual oil
net product margin decreased 28% to $2.8 million in the first quarter of
2009 from $3.9 million in the first quarter of 2008.
“Favorable market conditions, colder temperatures and our product
pricing strategies generated solid margins for our distillates and
gasoline products in the quarter,” Slifka said. “While product volumes
were up modestly over the first quarter of 2008, we believe the
macroeconomic climate continues to encourage conservation by consumers
and businesses. Global Partners is well positioned to meet the demands
of the regions we serve by leveraging our marketing expertise and our
strategically located network of terminal assets.”
EBITDA and distributable cash flow are non-GAAP (Generally Accepted
Accounting Principles) financial measures which are 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 and other non-GAAP financial measures to their
most directly comparable GAAP financial measures for the three months
ended March 31, 2009 and 2008.
As previously announced, the Board of Directors of Global Partners’
general partner, Global GP LLC, declared a quarterly cash distribution
of $0.4875 per unit ($1.95 per unit on an annualized basis) on all of
its outstanding common and subordinated units for the period from
January 1, 2009 through March 31, 2009. The distribution will be paid
May 15, 2009 to unitholders of record as of the close of business May 7,
2009.
Business Outlook
“Based on our excellent start to the year, and several new expansion
projects, we continue to be optimistic about our prospects in 2009,”
Slifka said. “Recently we signed a long-term lease for approximately
130,000 barrels of terminal storage capacity on the north shore of Long
Island, expanding our already strong presence on Long Island to three
waterborne locations. In addition, we are leasing approximately 160,000
barrels of capacity at a terminal in Philadelphia, and, at our Albany,
New York terminal, bringing back into service three tanks totaling
approximately 300,000 barrels. These expansion initiatives are part of
our overall strategy to adjust our terminal network opportunistically to
capitalize on changes in the marketplace.”
Board Authorizes Common Unit Repurchase Program
Global Partners also announced today that the Board of Directors of its
general partner, Global GP LLC, has authorized the repurchase of GLP’s
common units for the purpose of assisting the partnership in meeting its
anticipated obligations to deliver common units under the partnership’s
Long-Term Incentive Plan to officers, directors and employees, and
meeting obligations under existing employment agreements with the
officers of the general partner of Global Partners. The program is
expected to begin during May 2009. The partnership is authorized to
spend up to $6.6 million to acquire up to 445,000 of its common units in
the aggregate, over an extended period of time, consistent with its
obligations under the Plan and the employment agreements.
Common units of Global Partners may be repurchased from time to time in
open market transactions, including block purchases, or in privately
negotiated transactions. Such authorized unit repurchases may be
modified, suspended or terminated at any time, and are subject to price,
economic and market conditions, applicable legal requirements and
available liquidity.
Financial Results Conference Call
Management will review Global Partners’ first-quarter 2009 financial
results in a teleconference call for analysts and investors today.
|
Time:
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10:00 a.m. ET
|
|
|
|
Dial-in numbers:
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(877) 407-5790 (U.S. and Canada)
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(201) 689-8328 (International)
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The call also will be webcast live and archived on the Global Partners’
website, www.globalp.com.
Use of Non-GAAP Financial Measures
EBITDA
EBITDA is a non-GAAP financial measure used as a supplemental financial
measure by management and external users of Global Partners’
consolidated financial statements, such as investors, commercial banks
and research analysts, to assess the partnership’s:
-
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, 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 should not be considered as 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 this measure may vary among other companies. Therefore,
EBITDA may not be comparable to similarly titled measures of other
companies.
Distributable Cash Flow
Distributable cash flow is an important non-GAAP financial measure for
Global Partners’ limited partners since it serves as an indicator of the
partnership’s success in providing a cash return on their investment.
Distributable cash flow means the partnership’s net income plus
depreciation and amortization less its maintenance capital expenditures.
Specifically, this financial measure indicates to investors whether or
not the partnership has generated sufficient cash flow on a current or
historic level that can sustain or support an increase in its quarterly
cash distribution. Distributable cash flow is 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, cash flow from operations, or any other
measure of financial performance presented in accordance with GAAP. In
addition, Global Partners’ distributable cash flow may not be comparable
to distributable cash flow or 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® company,
trades on the New York Stock Exchange under the ticker symbol “GLP.” For
additional information, please visit www.globalp.com.
Forward-looking Statements
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, 2008 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 per unit data)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
March 31,
|
|
|
|
2009
|
|
2008
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
$
|
1,632,955
|
|
|
|
$
|
2,720,992
|
|
|
Cost of sales
|
|
|
1,582,241
|
|
|
|
|
2,685,376
|
|
|
Gross profit
|
|
|
50,714
|
|
|
|
|
35,616
|
|
|
|
|
|
|
|
|
|
|
|
Costs and operating expenses:
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses
|
|
|
18,075
|
|
|
|
|
11,073
|
|
|
Operating expenses
|
|
|
8,475
|
|
|
|
|
9,025
|
|
|
Amortization expenses
|
|
|
800
|
|
|
|
|
724
|
|
|
Total costs and operating expenses
|
|
|
27,350
|
|
|
|
|
20,822
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
23,364
|
|
|
|
|
14,794
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
(3,776
|
)
|
|
|
|
(6,030
|
)
|
|
|
|
|
|
|
|
|
|
|
Income before income tax expense
|
|
|
19,588
|
|
|
|
|
8,764
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
|
|
|
(725
|
)
|
|
|
|
(145
|
)
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
18,863
|
|
|
|
|
8,619
|
|
|
|
|
|
|
|
|
|
|
|
Less: General partner's interest in net income, including incentive
distribution rights
|
|
|
(376
|
)
|
|
|
|
(199
|
)
|
|
|
|
|
|
|
|
|
|
|
Limited partners' interest in net income
|
|
$
|
18,487
|
|
|
|
$
|
8,420
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income per limited partner unit(1)
|
|
$
|
1.41
|
|
|
|
$
|
0.64
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income per limited partner unit(1)
|
|
$
|
1.40
|
|
|
|
$
|
0.64
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted average limited partners' units outstanding
|
|
|
13,071
|
|
|
|
|
13,071
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted average limited partners' units outstanding
|
|
|
13,203
|
|
|
|
|
13,071
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) On January 1, 2009, the Partnership adopted EITF 07-04,
"Application of the Two-Class Method under FASB Statement No. 128 to
Master Limited Partnerships." EITF 07-04 provides that net income
for the current period is to be reduced by the amount of available
cash that will be distributed with respect to that period for
purposes of calculating net income per unit. Any residual amount
representing undistributed net income (or losses) is assumed to be
allocated to the ownership interests in accordance with the
contractual provisions of the partnership agreement. Under the
Partnership's partnership agreement, for any quarterly period, the
incentive distribution rights ("IDRs") participate in net income
only to the extent of the amount of cash distributions actually
declared, thereby excluding the IDRs from participating in the
Partnership's undistributed net income or loss. Accordingly, the
Partnership's undistributed net income is assumed to be allocated to
the limited partners' interest and to the general partner's
interest. The Partnership applied the provisions of EITF No. 07-04
on a retroactive basis which had an immaterial impact on the limited
partners' interest in net income and net income per limited partner
unit (basic and diluted) for the quarter ended March 31, 2008.
|
|
GLOBAL PARTNERS LP
|
|
CONSOLIDATED BALANCE SHEETS
|
|
(In thousands)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
|
|
|
|
December 31,
|
|
|
|
2009
|
|
|
|
2008
|
|
Assets
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
2,989
|
|
|
|
$
|
945
|
|
Accounts receivable, net
|
|
|
228,332
|
|
|
|
|
249,418
|
|
Accounts receivable - affiliates
|
|
|
1,096
|
|
|
|
|
2,518
|
|
Inventories
|
|
|
227,852
|
|
|
|
|
240,346
|
|
Brokerage margin deposits
|
|
|
13,178
|
|
|
|
|
8,991
|
|
Fair value of forward fixed price contracts
|
|
|
58,359
|
|
|
|
|
161,787
|
|
Prepaid expenses and other current assets
|
|
|
29,686
|
|
|
|
|
29,302
|
|
Total current assets
|
|
|
561,492
|
|
|
|
|
693,307
|
|
|
|
|
|
|
|
|
|
|
|
Property and equipment, net
|
|
|
161,527
|
|
|
|
|
161,988
|
|
Intangible assets, net
|
|
|
30,732
|
|
|
|
|
31,403
|
|
Other assets
|
|
|
3,729
|
|
|
|
|
2,564
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
757,480
|
|
|
|
$
|
889,262
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and partners' equity
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
159,602
|
|
|
|
$
|
219,783
|
|
Working capital revolving credit facility - current portion
|
|
|
78,186
|
|
|
|
|
208,210
|
|
Environmental liabilities - current portion
|
|
|
4,206
|
|
|
|
|
4,191
|
|
Accrued expenses and other current liabilities
|
|
|
64,059
|
|
|
|
|
54,054
|
|
Income taxes payable
|
|
|
591
|
|
|
|
|
520
|
|
Obligations on forward fixed price contracts and other derivatives
|
|
|
13,244
|
|
|
|
|
7,954
|
|
Total current liabilities
|
|
|
319,888
|
|
|
|
|
494,712
|
|
|
|
|
|
|
|
|
|
|
|
Working capital revolving credit facility - less current portion
|
|
|
183,914
|
|
|
|
|
154,090
|
|
Acquisition facility
|
|
|
71,200
|
|
|
|
|
71,200
|
|
Environmental liabilities - less current portion
|
|
|
2,344
|
|
|
|
|
2,377
|
|
Accrued pension benefit cost
|
|
|
9,536
|
|
|
|
|
8,853
|
|
Deferred compensation
|
|
|
1,708
|
|
|
|
|
1,663
|
|
Other long-term liabilities
|
|
|
11,653
|
|
|
|
|
12,899
|
|
Total liabilities
|
|
|
600,243
|
|
|
|
|
745,794
|
|
|
|
|
|
|
|
|
|
|
|
Partners' equity
|
|
|
157,237
|
|
|
|
|
143,468
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and partners' equity
|
|
$
|
757,480
|
|
|
|
$
|
889,262
|
|
GLOBAL PARTNERS LP
|
|
FINANCIAL RECONCILIATIONS
|
|
(In thousands, except per unit data)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
March 31,
|
|
|
|
2009
|
|
2008
|
|
Table 1 - Reconciliation of net income to EBITDA
|
|
|
|
|
|
|
|
Net income
|
|
$
|
18,863
|
|
$
|
8,619
|
|
Depreciation and amortization
|
|
|
4,002
|
|
|
3,682
|
|
Interest expense
|
|
|
3,776
|
|
|
6,030
|
|
Income tax expense
|
|
|
725
|
|
|
145
|
|
EBITDA
|
|
$
|
27,366
|
|
$
|
18,476
|
|
|
|
|
|
|
|
|
|
Table 2 - Reconciliation of cash flow provided by operating
activities to EBITDA
|
|
|
|
|
|
|
|
Cash flow provided by operating activities
|
|
$
|
111,230
|
|
$
|
97,817
|
|
Net change in operating assets and liabilities and certain non-cash
items
|
|
|
(88,365)
|
|
|
(85,516)
|
|
Interest expense
|
|
|
3,776
|
|
|
6,030
|
|
Income tax expense
|
|
|
725
|
|
|
145
|
|
EBITDA
|
|
$
|
27,366
|
|
$
|
18,476
|
|
|
|
|
|
|
|
|
|
Table 3 - Reconciliation of net income to distributable cash flow
|
|
|
|
|
|
|
|
Net income
|
|
$
|
18,863
|
|
$
|
8,619
|
|
Depreciation and amortization
|
|
|
4,002
|
|
|
3,682
|
|
Maintenance capital expenditures
|
|
|
(869)
|
|
|
(492)
|
|
Distributable cash flow
|
|
$
|
21,996
|
|
$
|
11,809
|
|
|
|
|
|
|
|
|
|
Table 4 - Reconciliation of cash flow provided by operating
activities to
|
|
|
|
|
|
|
|
distributable cash flow
|
|
|
|
|
|
|
|
Cash flow provided by operating activities
|
|
$
|
111,230
|
|
$
|
97,817
|
|
Net change in operating assets and liabilities and certain non-cash
items
|
|
|
(88,365)
|
|
|
(85,516)
|
|
Maintenance capital expenditures
|
|
|
(869)
|
|
|
(492)
|
|
Distributable cash flow
|
|
$
|
21,996
|
|
$
|
11,809
|
Source: Global Partners LP
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