- Wholesale Gasoline Business Drives Financial Performance
- Net Income of $0.5 Million, $0.03 Per Unit
- EBITDA of $12.5 Million, Up 26%
- Distributable Cash Flow of $5.4 Million, Up 9%
WALTHAM, Mass., Nov 04, 2010 (BUSINESS WIRE) --
Global Partners LP (NYSE: GLP) today reported financial results for the
three months ended September 30, 2010.
Net income for the third quarter of 2010 was $551,000, or $0.03 per
diluted limited partner unit, compared with net income of $2.1 million,
or $0.15 per diluted limited partner unit, for the same period in 2009.
Earnings before interest, taxes, depreciation and amortization (EBITDA)
for the three months ended September 30, 2010 was $12.5 million,
compared with $10.0 million for the third quarter of 2009.
Distributable cash flow for the third quarter of 2010 was $5.4 million,
compared with $5.0 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
September 30, 2010 and 2009.
"Our wholesale business, led by gasoline, drove a strong third-quarter
financial performance," said Eric Slifka, President and Chief Executive
Officer of Global Partners. "Gross profit increased 20 percent to a
record $35.1 million on a 49 percent increase in wholesale gasoline net
product margin, while third-quarter total product volume grew 10 percent
to nearly 770 million gallons."
"Our improved results are due to a variety of factors, including our
increasing presence in the gasoline market, logistical and supply
expertise, and growing ethanol capability. We also benefited from
favorable conditions in both the gasoline and distillate markets,"
Slifka said.
"In recent months we achieved two key milestones that we believe will
add significantly to our earnings power and the long-term growth
potential of the Partnership," Slifka continued. "We successfully closed
and integrated our acquisition of the Mobil gas stations and related
supply business, a transaction that encompasses 190 properties in New
England and fuel supply rights to an additional 31 locations. In
addition, we recently completed our Albany ethanol and rail expansion
project, which is up and running on schedule. The Albany terminal last
month received its first 80 unit rail-car delivery of ethanol, shipped
on a single rail line directly from the Midwest. We believe that the
supply efficiencies we gain through this expansion project should
position us as a premiere, cost-effective supplier of gasoline and
ethanol in the Northeast."
Sales for the third quarter of 2010 were $1.5 billion, compared with
$1.3 billion for the same period in 2009, reflecting both higher
commodity prices and higher volume in the 2010 period. Wholesale segment
sales were $1.5 billion and $1.2 billion in the third quarter of 2010
and 2009, respectively, accounting for approximately 94 percent of total
sales in each period. Commercial segment sales were $94.7 million and
$77.6 million in the third-quarter of 2010 and 2009, respectively,
accounting for approximately 6 percent of total sales in each period.
Combined product volume totaled 770.0 million gallons in the third
quarter of 2010, compared with 697.7 million gallons in the third
quarter of 2009, driven primarily by higher gasoline volume. Wholesale
segment volume increased to 715.4 million gallons in the third quarter
of 2010, from 651.0 million gallons for the 2009 third quarter.
Commercial segment volume increased 17 percent to 54.5 million gallons
in the third quarter of 2010 from 46.7 million gallons for the same
period in 2009.
Combined gross profit improved to a third-quarter record of $35.1
million from $29.3 million for the same period in 2009. Within the
wholesale segment, which accounted for the improvement, distillate net
product margin increased 19 percent to $18.4 million in the third
quarter of 2010, compared with $15.5 million in the year-earlier period.
Gasoline net product margin increased 49 percent to $16.4 million from
$11.0 million in the third quarter of 2009. Residual oil net product
margin increased 3 percent to $1.9 million for the three months ended
September 30, 2010 from $1.8 million in the third quarter of 2009.
Recent Highlights
-
The Board of Directors of Global Partners' general partner, Global GP
LLC, declared a quarterly cash distribution of $0.4950 per unit ($1.98
per unit on an annualized basis) on all of its outstanding common and
subordinated units for the period from July 1 through September 30,
2010. The distribution, which represents a 1.5 percent increase over
the quarterly distribution of $0.4875 per unit paid in August 2010,
will be paid November 12, 2010 to unitholders of record as of the
close of business November 3, 2010.
Business Outlook
"We are pleased with our financial and operating results through the
first nine months of 2010," Slifka said. "Our acquisition of the Mobil
assets creates significant new year-round income for the Partnership,
while our new ethanol and rail expansion project expands our position in
the important and growing renewable fuels market. Based on our recent
strategic transactions and projects, we believe that we are
well-positioned to conclude the year on a strong note and enter 2011
with positive momentum."
Financial Results Conference Call
Management will review Global Partners' third-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;
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financial performance without regard to financing methods, capital
structure, income taxes or historical cost basis;
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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
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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. In addition, the Partnership owns and
supplies fuel to 190 Mobil branded retail gas stations in New England,
and also supplies Mobil branded fuel to 31 independently-owned stations.
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.
| GLOBAL PARTNERS LP |
| CONSOLIDATED STATEMENTS OF INCOME |
| (In thousands, except per unit data) |
| (Unaudited) |
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Three Months Ended |
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Nine Months Ended |
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September 30, |
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September 30, |
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2010 |
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2009 |
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2010 |
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2009 |
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Sales
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$
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1,546,839
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$
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1,285,331
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$
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5,046,285
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$
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4,119,435
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Cost of sales
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1,511,744
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1,256,058
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4,931,461
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4,011,659
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Gross profit
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35,095
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29,273
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114,824
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107,776
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Costs and operating expenses:
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Selling, general and administrative expenses
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17,246
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13,859
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47,715
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45,233
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Operating expenses
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10,405
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8,666
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28,867
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26,278
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Amortization expenses
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1,005
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747
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2,430
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2,350
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Total costs and operating expenses
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28,656
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23,272
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79,012
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73,861
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Operating income
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6,439
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6,001
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35,812
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33,915
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Interest expense
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(5,888
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)
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(3,742
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)
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(14,326
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)
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(10,940
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)
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Income before income tax expense
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551
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2,259
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21,486
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22,975
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Income tax expense
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-
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(200
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)
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(387
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)
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(1,075
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)
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Net income
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551
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2,059
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21,099
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21,900
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Less: General partner's interest in net income, including
incentive distribution rights(1)
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(72
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)
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(86
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)
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(518
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)
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(529
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)
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Limited partners' interest in net income
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$
|
479
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$
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1,973
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$
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20,581
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$
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21,371
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Basic net income per limited partner unit(2)
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$
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0.03
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$
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0.15
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$
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1.30
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$
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1.64
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Diluted net income per limited partner unit(2)
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$
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0.03
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$
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0.15
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$
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1.28
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|
|
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$
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1.60
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|
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|
|
|
|
|
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Basic weighted average limited partner units outstanding
|
|
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16,934
|
|
|
|
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12,979
|
|
|
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15,824
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|
|
|
|
13,037
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|
|
|
|
|
|
|
|
|
|
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Diluted weighted average limited partner units outstanding
|
|
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17,180
|
|
|
|
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13,304
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16,075
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|
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|
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13,334
|
|
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(1) Calculation includes the effect of the public offering on March
19, 2010 and, as a result, the general partner's interest was
reduced to 1.34% for the three months ended September 30, 2010 and,
based on a weighted average, 1.60% for the nine months ended
September 30, 2010. For the three and nine months ended September
30, 2009, the general partner's interest was 1.73%.
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(2) 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 losses. Accordingly,
the Partnership's undistributed net income is assumed to be
allocated to the limited partners' interest and to the General
Partner's general partner 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.
|
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| GLOBAL PARTNERS LP |
| CONSOLIDATED BALANCE SHEETS |
| (In thousands) |
| (Unaudited) |
|
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|
|
|
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|
September 30,
|
|
|
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December 31, |
|
|
2010 |
|
|
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2009 |
| Assets |
|
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|
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Current assets:
|
|
|
|
|
|
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Cash and cash equivalents
|
|
$
|
4,592
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|
|
|
$
|
662
|
|
Accounts receivable, net
|
|
|
304,007
|
|
|
|
|
335,912
|
|
Accounts receivable - affiliates
|
|
|
1,313
|
|
|
|
|
1,565
|
|
Inventories
|
|
|
531,782
|
|
|
|
|
465,923
|
|
Brokerage margin deposits
|
|
|
10,493
|
|
|
|
|
18,059
|
|
Fair value of forward fixed price contracts
|
|
|
13,268
|
|
|
|
|
3,089
|
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Prepaid expenses and other current assets
|
|
|
56,640
|
|
|
|
|
37,648
|
|
Total current assets
|
|
|
922,095
|
|
|
|
|
862,858
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|
|
|
|
|
|
|
|
|
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Property and equipment, net
|
|
|
417,019
|
|
|
|
|
159,292
|
|
Intangible assets, net
|
|
|
45,461
|
|
|
|
|
28,557
|
|
Other assets
|
|
|
12,630
|
|
|
|
|
1,996
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
1,397,205
|
|
|
|
$
|
1,052,703
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
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| Liabilities and partners' equity |
|
|
|
|
|
|
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|
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Current liabilities:
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
243,415
|
|
|
|
$
|
243,449
|
|
Working capital revolving credit facility - current portion
|
|
|
185,273
|
|
|
|
|
221,711
|
|
Environmental liabilities - current portion
|
|
|
5,684
|
|
|
|
|
3,296
|
|
Accrued expenses and other current liabilities
|
|
|
78,088
|
|
|
|
|
77,604
|
|
Income taxes payable
|
|
|
-
|
|
|
|
|
461
|
|
Obligations on forward fixed price contracts and other derivatives
|
|
|
21,414
|
|
|
|
|
21,114
|
|
Total current liabilities
|
|
|
533,874
|
|
|
|
|
567,635
|
|
|
|
|
|
|
|
|
|
|
Working capital revolving credit facility - less current portion
|
|
|
280,427
|
|
|
|
|
240,889
|
|
Revolving credit facility
|
|
|
300,000
|
|
|
|
|
71,200
|
|
Environmental liabilities - less current portion
|
|
|
31,199
|
|
|
|
|
2,254
|
|
Accrued pension benefit cost
|
|
|
1,657
|
|
|
|
|
2,751
|
|
Deferred compensation
|
|
|
2,156
|
|
|
|
|
1,840
|
|
Other long-term liabilities
|
|
|
19,298
|
|
|
|
|
8,714
|
|
Total liabilities
|
|
|
1,168,611
|
|
|
|
|
895,283
|
|
|
|
|
|
|
|
|
|
|
Partners' equity
|
|
|
228,594
|
|
|
|
|
157,420
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and partners' equity
|
|
$
|
1,397,205
|
|
|
|
$
|
1,052,703
|
|
|
|
|
|
|
|
|
|
| GLOBAL PARTNERS LP |
|
|
|
|
|
| FINANCIAL RECONCILIATIONS |
| (In thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
| (Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
September 30, |
|
September 30, |
|
|
2010 |
|
2009 |
|
2010 |
|
2009 |
| Reconciliation of net income to EBITDA |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
551
|
|
|
$
|
2,059
|
|
|
$
|
21,099
|
|
|
$
|
21,900
|
|
|
Depreciation and amortization and amortization of deferred financing
fees
|
|
|
6,087
|
|
|
|
3,979
|
|
|
|
14,661
|
|
|
|
12,017
|
|
|
Interest expense
|
|
|
5,888
|
|
|
|
3,742
|
|
|
|
14,326
|
|
|
|
10,940
|
|
|
Income tax expense
|
|
|
-
|
|
|
|
200
|
|
|
|
387
|
|
|
|
1,075
|
|
|
EBITDA
|
|
$
|
12,526
|
|
|
$
|
9,980
|
|
|
$
|
50,473
|
|
|
$
|
45,932
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Reconciliation of net cash (used in) provided by operating
activities to EBITDA |
|
|
|
Net cash (used in) provided by operating activities
|
|
$
|
(83,522
|
)
|
|
$
|
5,597
|
|
|
$
|
(32,958
|
)
|
|
$
|
25,778
|
|
|
Net changes in operating assets and liabilities and certain non-cash
items
|
|
|
90,160
|
|
|
|
441
|
|
|
|
68,718
|
|
|
|
8,139
|
|
|
Interest expense
|
|
|
5,888
|
|
|
|
3,742
|
|
|
|
14,326
|
|
|
|
10,940
|
|
|
Income tax expense
|
|
|
-
|
|
|
|
200
|
|
|
|
387
|
|
|
|
1,075
|
|
|
EBITDA
|
|
$
|
12,526
|
|
|
$
|
9,980
|
|
|
$
|
50,473
|
|
|
$
|
45,932
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Reconciliation of net income to distributable cash flow |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
551
|
|
|
$
|
2,059
|
|
|
$
|
21,099
|
|
|
$
|
21,900
|
|
|
Depreciation and amortization and amortization of deferred financing
fees
|
|
|
6,087
|
|
|
|
3,979
|
|
|
|
14,661
|
|
|
|
12,017
|
|
|
Maintenance capital expenditures
|
|
|
(1,205
|
)
|
|
|
(1,060
|
)
|
|
|
(2,262
|
)
|
|
|
(3,655
|
)
|
|
Distributable cash flow
|
|
$
|
5,433
|
|
|
$
|
4,978
|
|
|
$
|
33,498
|
|
|
$
|
30,262
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of net cash (used in) provided by operating
activities to distributable cash flow
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash (used in) provided by operating activities
|
|
$
|
(83,522
|
)
|
|
$
|
5,597
|
|
|
$
|
(32,958
|
)
|
|
$
|
25,778
|
|
|
Net changes in operating assets and liabilities and certain non-cash
items
|
|
|
90,160
|
|
|
|
441
|
|
|
|
68,718
|
|
|
|
8,139
|
|
|
Maintenance capital expenditures
|
|
|
(1,205
|
)
|
|
|
(1,060
|
)
|
|
|
(2,262
|
)
|
|
|
(3,655
|
)
|
|
Distributable cash flow
|
|
$
|
5,433
|
|
|
$
|
4,978
|
|
|
$
|
33,498
|
|
|
$
|
30,262
|
|
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