WALTHAM, Mass., May 06, 2010 (BUSINESS WIRE) --Global Partners LP (NYSE: GLP) today reported financial results for the
three months ended March 31, 2010.
Net income for the first quarter of 2010 was $15.0 million, or $1.06 per
diluted limited partner unit, compared with net income of $18.9 million,
or $1.40 per diluted limited partner unit, for the same period in 2009.
Earnings before interest, taxes, depreciation and amortization (EBITDA)
for the three months ended March 31, 2010 was $23.5 million, compared
with $27.4 million for the first quarter of 2009.
Distributable cash flow for the first quarter of 2010 was $18.6 million,
compared with $22.0 million for the comparable period in 2009.
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 non-GAAP financial measures to their most
directly comparable GAAP financial measures for the three months ended
March 31, 2010 and 2009.
"We generated solid results in the first quarter, despite certain
challenges in the market environment," said Eric Slifka, president and
chief executive officer of Global Partners. "Compared with the same
period a year ago, we saw significant margin pressure and less favorable
buying opportunities for wholesale gasoline products during the first
quarter. In addition, temperatures were 12 percent warmer than the same
period last year and 9 percent warmer than normal. Despite the warm
weather, we managed to hold our wholesale distillate net product margin
essentially unchanged from a year earlier by capitalizing on our network
of assets and taking advantage of some favorable buying opportunities."
Sales for the first quarter of 2010 were $2.0 billion, compared with
$1.6 billion for the same period in 2009. Wholesale segment sales were
$1.9 billion, or 94 percent of total sales, for the first quarter of
2010, compared with $1.5 billion, or 93 percent of total sales, for the
first quarter of 2009. Commercial segment sales were $118.7 million, or
6 percent of total sales, for the first quarter of 2010, compared with
$113.2 million, or 7 percent of total sales, for the first quarter of
2009.
Combined product volume totaled 959.3 million gallons in the first
quarter of 2010, compared with 1.1 billion gallons in the first quarter
of 2009, primarily reflecting warmer weather in the 2010 period.
Wholesale segment volume decreased to 891.0 million gallons in the first
quarter of 2010 from 1.0 billion gallons for the same period in 2009.
Commercial segment volume decreased to 68.3 million gallons in the first
quarter of 2010 from 75.7 million gallons for the same period in 2009.
Combined gross profit declined 10 percent to $45.4 million in the first
quarter of 2010 from $50.7 million for the same period in 2009. Within
Global Partners' wholesale segment, distillate net product margin was
essentially unchanged at $34.0 million in the first quarter of 2010,
compared with $33.9 million in the year-earlier period. Gasoline net
product margin decreased 46 percent to $6.4 million from $11.8 million
in the first quarter of 2009. Residual oil net product margin was $2.8
million for the three months ended March 31, 2010 and March 31, 2009.
Recent Highlights
-
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 through March 31,
2010.
-
The Partnership completed an offering of 3.9 million common units,
including over-allotments, representing limited partner interests in
Global Partners LP. The offering generated net proceeds to Global
Partners of $84.8 million, which the Partnership used to reduce
indebtedness outstanding under its credit agreement.
-
Global Partners and Canadian Pacific Railway began work on a
multi-million-dollar expansion and tank refurbishment project that
will add 180,000 barrels of ethanol storage capacity and rail access
at the Partnership's refined petroleum products terminal in Albany,
New York. The project is expected to be operational in 2010.
-
The Federal Trade Commission closed its regulatory review of the
Partnership's planned acquisition of three terminal facilities in
Newburgh, NY from Warex Terminals Corporation and determined no
further action is warranted by the Commission. The transaction is
expected to close by early in the third quarter. The Partnership
expects to finance the $47.5 million purchase price with borrowings
from its bank group.
Business Outlook
"We are continuing to enhance our terminal portfolio through strategic
acquisitions and organic projects that further position us as a leading
supplier of refined petroleum products in the Northeast," Slifka said.
"With the Warex acquisition slated for completion by early in the third
quarter, and our ethanol expansion project with Canadian Pacific Railway
on track to be operational this year, we are encouraged about our
prospects for the second half of 2010."
Financial Results Conference Call
Management will review Global Partners' first-quarter 2010 financial
results in a teleconference call for analysts and investors today.
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Time:
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10:00 a.m. ET
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Dial-in numbers:
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(877) 709-8155 (U.S. and Canada)
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(201) 689-8881 (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;
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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. In
December 2009, we amended our partnership agreement to restate the
provisions governing conversion of the subordinated units to use
distributable cash flow to test whether we have "earned" the minimum
quarterly distribution. Distributable cash flow means the Partnership's
net income plus depreciation and amortization minus maintenance capital
expenditures, as well as adjustments to eliminate items approved by the
audit committee of the Board of Directors of the Partnership's general
partner that are extraordinary or non-recurring in nature and that would
otherwise increase distributable cash flow. Specifically, this financial
measure indicates to investors whether or not the Partnership has
generated sufficient earnings 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 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 New
England states and New York. 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.
Forward-looking Statements
Some of the information contained in this news release may contain
forward-looking statements. Forward-looking statements do not relate
strictly to historical or current facts and include, without limitation,
any statement that may project, indicate or imply future results,
events, performance or achievements, and may contain the words "may,"
"believe," "should," "could," "expect," "anticipate," "plan," "intend,"
"estimate," "foresee," "continue," "will likely result," or other
similar expressions. In addition, any statement made by Global Partners
LP's management concerning future financial performance (including
future revenues, earnings or growth rates), ongoing business strategies
or prospects and possible actions by Global Partners LP or its
subsidiaries are also forward-looking statements. Forward-looking
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 future results to be
materially different from the results stated or implied in this news
release. For additional information about 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, 2009 and subsequent filings the
Partnership makes with the Securities and Exchange Commission.
Developments in any of these areas could cause Global Partners LP's
results to differ materially from results that have been or may be
anticipated or projected. 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 of
this news release or, in the case of forward-looking statements,
contained in any document incorporated by reference, the date of such
document, and Global Partners LP expressly disclaims any obligation or
undertaking to update these statements to reflect any change in its
expectations or beliefs or any change in events, conditions or
circumstances on which any forward-looking statement is based.
The financial statements and financial information presented below
reflect the operations of Global Partners LP.
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GLOBAL PARTNERS LP |
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CONSOLIDATED STATEMENTS OF INCOME |
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(In thousands, except per unit data) |
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(Unaudited) |
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Three Months Ended |
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March 31, |
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2010 |
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2009 |
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Sales
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$
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1,962,384
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$
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1,632,955
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Cost of sales
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1,916,977
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1,582,241
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Gross profit
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45,407
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50,714
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Costs and operating expenses:
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Selling, general and administrative expenses
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16,578
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18,075
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Operating expenses
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8,659
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8,475
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Amortization expenses
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|
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691
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|
|
|
800
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Total costs and operating expenses
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|
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25,928
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27,350
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Operating income
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|
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19,479
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|
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23,364
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|
|
|
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Interest expense
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|
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(4,064
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)
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|
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(3,776
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)
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|
|
|
|
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Income before income tax expense
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|
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15,415
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|
|
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19,588
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|
|
|
|
|
|
|
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|
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Income tax expense
|
|
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(387
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)
|
|
|
(725
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)
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|
|
|
|
|
|
|
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Net income
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|
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15,028
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|
|
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18,863
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Less: General partner's interest in net income, including
incentive
distribution rights(1)
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(299
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)
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(376
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)
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Limited partners' interest in net income
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$
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14,729
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$
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18,487
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Basic net income per limited partner unit(2)
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$
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1.08
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$
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1.41
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Diluted net income per limited partner unit(2)
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$
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1.06
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$
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1.40
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Basic weighted average limited partner units outstanding
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13,585
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13,071
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Diluted weighted average limited partner units outstanding
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|
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13,838
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13,203
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(1)
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On March 19, 2010, the general partner interest was reduced to
1.34% as a result of the Partnership's public offering. This
calculation includes the effect of the public offering and is
based on a weighted average of 1.66% for the three months ended
March 31, 2010. For the three months ended March 31, 2009, the
general partner interest was 1.73%.
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(2)
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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. Limited partners' interest in net
income is divided by the weighted average limited partner units
outstanding in computing the net income per limited partner unit.
|
| GLOBAL PARTNERS LP |
| CONSOLIDATED BALANCE SHEETS |
| (In thousands) |
| (Unaudited) |
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March 31, |
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December 31, |
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2010 |
|
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2009 |
| Assets |
|
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|
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Current assets:
|
|
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|
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Cash and cash equivalents
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$
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750
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$
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662
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Accounts receivable, net
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268,347
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335,912
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Accounts receivable - affiliates
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4,222
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|
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1,565
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Inventories
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443,259
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465,923
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Brokerage margin deposits
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10,301
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18,059
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Fair value of forward fixed price contracts
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12,730
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|
|
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|
3,089
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Prepaid expenses and other current assets
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35,193
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|
|
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|
37,648
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Total current assets
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|
|
774,802
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|
|
|
|
862,858
|
|
|
|
|
|
|
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Property and equipment, net
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|
158,236
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|
|
|
|
159,292
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Intangible assets, net
|
|
|
|
27,866
|
|
|
|
|
28,557
|
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Other assets
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|
|
|
1,431
|
|
|
|
|
1,996
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
|
$
|
962,335
|
|
|
|
$
|
1,052,703
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Liabilities and partners' equity |
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
$
|
187,648
|
|
|
|
$
|
243,449
|
|
Working capital revolving credit facility - current portion
|
|
|
|
109,788
|
|
|
|
|
221,711
|
|
Environmental liabilities - current portion
|
|
|
|
3,296
|
|
|
|
|
3,296
|
|
Accrued expenses and other current liabilities
|
|
|
|
73,802
|
|
|
|
|
77,604
|
|
Income taxes payable
|
|
|
|
128
|
|
|
|
|
461
|
|
Obligations on forward fixed price contracts and other derivatives
|
|
|
|
19,380
|
|
|
|
|
21,114
|
|
Total current liabilities
|
|
|
|
394,042
|
|
|
|
|
567,635
|
|
|
|
|
|
|
|
|
|
|
|
Working capital revolving credit facility - less current portion
|
|
|
|
231,412
|
|
|
|
|
240,889
|
|
Acquisition facility
|
|
|
|
71,200
|
|
|
|
|
71,200
|
|
Environmental liabilities - less current portion
|
|
|
|
2,200
|
|
|
|
|
2,254
|
|
Accrued pension benefit cost
|
|
|
|
2,395
|
|
|
|
|
2,751
|
|
Deferred compensation
|
|
|
|
1,946
|
|
|
|
|
1,840
|
|
Other long-term liabilities
|
|
|
|
10,767
|
|
|
|
|
8,714
|
|
Total liabilities
|
|
|
|
713,962
|
|
|
|
|
895,283
|
|
|
|
|
|
|
|
|
|
|
|
Partners' equity
|
|
|
|
248,373
|
|
|
|
|
157,420
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and partners' equity
|
|
|
$
|
962,335
|
|
|
|
$
|
1,052,703
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| GLOBAL PARTNERS LP |
| FINANCIAL RECONCILIATIONS |
| (In thousands) |
| (Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
|
March 31, |
|
|
|
|
2010
|
|
|
2009
|
| Reconciliation of net income to EBITDA |
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
$
|
15,028
|
|
|
|
$
|
18,863
|
|
|
Depreciation and amortization and amortization of deferred financing
fees
|
|
|
|
|
4,049
|
|
|
|
|
4,002
|
|
|
Interest expense
|
|
|
|
|
4,064
|
|
|
|
|
3,776
|
|
|
Income tax expense
|
|
|
|
|
387
|
|
|
|
|
725
|
|
|
EBITDA
|
|
|
|
$
|
23,528
|
|
|
|
$
|
27,366
|
|
|
|
|
|
|
|
|
|
|
|
| Reconciliation of net cash provided by operating activities to
EBITDA |
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
|
|
$
|
45,494
|
|
|
|
$
|
111,230
|
|
|
Net changes in operating assets and liabilities and certain non-cash
items
|
|
|
|
|
(26,417
|
)
|
|
|
|
(88,365
|
)
|
|
Interest expense
|
|
|
|
|
4,064
|
|
|
|
|
3,776
|
|
|
Income tax expense
|
|
|
|
|
387
|
|
|
|
|
725
|
|
|
EBITDA
|
|
|
|
$
|
23,528
|
|
|
|
$
|
27,366
|
|
|
|
|
|
|
|
|
|
|
|
| Reconciliation of net income to distributable cash flow |
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
$
|
15,028
|
|
|
|
$
|
18,863
|
|
|
Depreciation and amortization and amortization of deferred financing
fees
|
|
|
|
|
4,049
|
|
|
|
|
4,002
|
|
|
Maintenance capital expenditures
|
|
|
|
|
(484
|
)
|
|
|
|
(869
|
)
|
|
Distributable cash flow
|
|
|
|
$
|
18,593
|
|
|
|
$
|
21,996
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of net cash provided by operating activities to
distributable
cash flow
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
|
|
$
|
45,494
|
|
|
|
$
|
111,230
|
|
|
Net change in operating assets and liabilities and certain non-cash
items
|
|
|
|
|
(26,417
|
)
|
|
|
|
(88,365
|
)
|
|
Maintenance capital expenditures
|
|
|
|
|
(484
|
)
|
|
|
|
(869
|
)
|
|
Distributable cash flow
|
|
|
|
$
|
18,593
|
|
|
|
$
|
21,996
|
|
SOURCE: Global Partners LP
Global Partners LP
Thomas J. Hollister, 781-894-8800
Chief Operating Officer and
Chief Financial Officer
or
Global Partners LP
Edward J. Faneuil, 781-894-8800
Executive Vice President,
General Counsel and Secretary