- Product Volume Increases to Record 1.3 Billion Gallons
- Gross Profit Climbs 18% to $56.3 Million on Record Wholesale
Gasoline Margin
WALTHAM, Mass., May 05, 2011 (BUSINESS WIRE) --
Global Partners LP (NYSE: GLP) today reported financial results for the
three months ended March 31, 2011.
Net income for the first quarter of 2011 was $8.3 million, or $0.39 per
diluted limited partner unit, compared with $17.4 million, or $1.23 per
diluted limited partner unit, for the first quarter of 2010.
Earnings before interest, taxes, depreciation and amortization (EBITDA)
for the three months ended March 31, 2011 was $24.8 million, compared
with $25.9 million for the first quarter of 2010.
Distributable cash flow (DCF) for the first quarter of 2011 was $15.7
million, compared with $21.0 million for the comparable period in 2010.
EBITDA and DCF 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, 2011 and 2010.
"Less favorable market conditions and fewer advantageous purchasing
opportunities, primarily in our distillates business, continued to
negatively impact net income, EBITDA and DCF in the first quarter of
2011," said Eric Slifka, president and chief executive officer of Global
Partners. "These results were partially offset by the performance of our
wholesale gasoline business, which contributed to a record quarterly net
product margin of $21.4 million and the highest product volume in our
history, reflecting the success of our strategic efforts to expand our
gasoline business."
"Since mid-2010, we have purchased three terminal facilities in
Newburgh, NY from Warex Terminals Corp.; acquired 190 Mobil retail gas
stations in New England and a related wholesale fuel supply business;
and contracted to supply other Mobil distributors in New England with
more than 150 million gallons of branded and unbranded fuel annually,"
Slifka said. "These initiatives have enabled us to further strengthen
our terminal, marketing and supply assets."
Sales for the first quarter of 2011 were $3.6 billion, compared with
$2.0 billion for the same period in 2010, due primarily to a combination
of volume increases and higher refined petroleum product prices.
Wholesale segment sales were $3.3 billion, or 92% of total sales, for
the first quarter of 2011, compared with $1.8 billion, or 94% of total
sales, for the first quarter of 2010. Commercial segment sales were
$253.8 million, or 7% of total sales, for the first quarter of 2011
compared with $118.7 million, or 6% of total sales, for the first
quarter of 2010.
Combined product volume totaled 1.3 billion gallons in the first quarter
of 2011, compared with 959.3 million gallons in the first quarter of
2010. Wholesale segment volume increased to 1.2 billion gallons in the
first quarter of 2011 from 891.0 million gallons in the first quarter of
2010. Commercial segment volume increased to 112.3 million gallons in
the first quarter of 2011 from 68.3 million gallons in the comparable
period of 2010.
Combined gross profit increased 18% to $56.3 million in the first
quarter of 2011 from $47.7 million in the first quarter of 2010. Within
Global Partners' wholesale segment, distillate net product margin
decreased 38% to $20.9 million in the first quarter of 2011 versus $34.0
million in the first quarter of 2010. Wholesale gasoline net product
margin improved 145% to a record $21.4 million from $8.7 million in the
first quarter of 2010. Residual oil net product margin increased 3% to
$2.9 million in the first quarter of 2011 from $2.8 million in the first
quarter of 2010.
Recent Developments
-
At its Albany, NY terminal, Global Partners has converted 230,000
barrels of storage capacity that can be utilized for either
distillates or gasoline. In the second quarter of 2011, Global
Partners is bringing into service an additional 200,000 barrels of
distillate storage capacity at this facility.
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The Board of Directors of Global Partners' general partner, Global GP
LLC, declared a quarterly cash distribution of $0.50 per unit ($2.00
per unit on an annualized basis) on all of its outstanding common
units for the period from January 1 through March 31, 2011. The
distribution will be paid May 13, 2011 to unitholders of record as of
the close of business May 4, 2011.
Business Outlook
"Despite some weakness in the distillates market, the combination of our
new Mobil stations, the related fuel supply business and the
Warex-Newburgh terminals helped the Partnership generate record product
volume and record wholesale gasoline net product margin in the first
quarter, while our commercial business also showed strong results,"
Slifka said. "Looking ahead, we believe that Global Partners is
positioned effectively for long-term growth."
Financial Results Conference Call
Management will review Global Partners' first-quarter 2011 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:
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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.
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.
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," "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, 2010 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 of this news
release or 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.
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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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2011 |
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2010 |
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Sales
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$
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3,551,072
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$
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1,964,745
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Cost of sales
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3,494,822
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1,916,977
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Gross profit
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56,250
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47,768
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Costs and operating expenses:
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Selling, general and administrative expenses
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21,110
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16,578
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Operating expenses
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17,804
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8,659
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Amortization expenses
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1,163
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691
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Total costs and operating expenses
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40,077
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25,928
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Operating income
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16,173
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21,840
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Interest expense
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(7,880)
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(4,064)
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Income before income tax expense
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8,293
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17,776
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Income tax expense
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-
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(387)
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Net income
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8,293
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17,389
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Less: General partner's interest in net income, including
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incentive distribution rights
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(200)
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(1)
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(339)
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(2)
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Limited partners' interest in net income
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$
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8,093
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$
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17,050
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Basic net income per limited partner unit (3)
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$
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0.40
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$
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1.26
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Diluted net income per limited partner unit (3)
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$
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0.39
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$
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1.23
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Basic weighted average limited partner units outstanding
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20,424
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13,585
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Diluted weighted average limited partner units outstanding
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20,643
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13,838
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(1) On February 8, 2011, the general partner interest was reduced
to 1.06% as a result of the Partnership's public offerings in
November 2010 and February 2011. This calculation includes the
effect of these public offerings and is based on a weighted
average of 1.11% for the three months ended March 31, 2011.
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(2) On March 19, 2010, the general partner interest was reduced to
1.34% as a result of the Partnership's public offering in March
2010. This calculation includes the effect of this public offering
and is based on a weighted average of 1.66% for the three months
ended March 31, 2010.
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(3) 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.
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| 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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2011 |
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2010 |
| Assets |
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Current assets:
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Cash and cash equivalents
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$
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5,847
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$
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2,361
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Accounts receivable, net
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479,593
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553,066
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Accounts receivable - affiliates
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1,096
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1,230
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Inventories
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618,321
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586,831
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Brokerage margin deposits
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14,567
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15,501
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Fair value of forward fixed price contracts
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2,343
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1,942
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Prepaid expenses and other current assets
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42,629
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36,714
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Total current assets
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1,164,396
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1,197,645
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Property and equipment, net
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418,521
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422,684
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Intangible assets, net
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38,902
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40,065
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Other assets
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11,509
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11,922
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Total assets
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$
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1,633,328
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$
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1,672,316
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| Liabilities and partners' equity |
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Current liabilities:
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Accounts payable
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$
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337,204
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$
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443,469
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Working capital revolving credit facility - current portion
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178,652
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193,198
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Environmental liabilities - current portion
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4,980
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5,535
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Trustee taxes payable
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72,758
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69,828
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Accrued expenses and other current liabilities
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28,277
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30,494
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Obligations on forward fixed price contracts and other derivatives
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4,539
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9,157
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Total current liabilities
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626,410
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751,681
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Working capital revolving credit facility - less current portion
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364,348
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293,502
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Revolving credit facility
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250,000
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300,000
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Environmental liabilities - less current portion
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28,455
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28,970
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Other long-term liabilities
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17,744
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|
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21,347
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Total liabilities
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1,286,957
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1,395,500
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Partners' equity
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|
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346,371
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276,816
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Total liabilities and partners' equity
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$
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1,633,328
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$
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1,672,316
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| GLOBAL PARTNERS LP |
| FINANCIAL RECONCILIATIONS |
| (In thousands) |
| (Unaudited) |
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Three Months Ended |
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March 31, |
|
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2011 |
|
2010 |
| Reconciliation of net income to EBITDA |
|
|
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Net income
|
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$
|
8,293
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$
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17,389
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Depreciation and amortization and amortization of deferred financing
fees
|
|
|
8,602
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|
|
4,049
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Interest expense
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|
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7,880
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|
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4,064
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Income tax expense
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|
|
-
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387
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EBITDA
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$
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24,775
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$
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25,889
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| Reconciliation of net cash (used in) provided by operating
activities to EBITDA |
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Net cash (used in) provided by operating activities
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$
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(59,966)
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$
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45,494
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Net changes in operating assets and liabilities and certain non-cash
items
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76,861
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(24,056)
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Interest expense
|
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7,880
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|
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4,064
|
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Income tax expense
|
|
|
-
|
|
|
387
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EBITDA
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$
|
24,775
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$
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25,889
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|
|
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| Reconciliation of net income to distributable cash flow |
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Net income
|
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$
|
8,293
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$
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17,389
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Depreciation and amortization and amortization of deferred financing
fees
|
|
|
8,602
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|
|
4,049
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Amortization of routine bank refinancings (1)
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|
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(783)
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|
-
|
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Maintenance capital expenditures
|
|
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(369)
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|
|
(484)
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Distributable cash flow
|
|
$
|
15,743
|
|
$
|
20,954
|
|
|
|
|
|
|
|
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Reconciliation of net cash (used in) provided by operating
activities to
|
|
|
|
|
|
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| distributable cash flow |
|
|
|
|
|
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Net cash (used in) provided by operating activities
|
|
$
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(59,966)
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$
|
45,494
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Net changes in operating assets and liabilities and certain non-cash
items
|
|
|
76,861
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|
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(24,056)
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Amortization of routine bank refinancings (1)
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|
|
(783)
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|
-
|
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Maintenance capital expenditures
|
|
|
(369)
|
|
|
(484)
|
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Distributable cash flow
|
|
$
|
15,743
|
|
$
|
20,954
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(1) Commencing with the quarter ended March 31, 2011, our
calculation of distributable cash flow will exclude non-cash
amortization of deferred financing fees related to routine bank
refinancings. Amortization of deferred financing fees in connection
with expansion-related activities will continue to be included. We
believe that this provides a more conservative methodology to this
non-GAAP financial measure. Had this methodology been used
previously, it would not have affected distribution decisions or the
outcome of the recent conversion of subordinated units to common
units. Had this methodology been used for the quarter ended March
31, 2010, distributable cash flow would have been lower by
approximately $387,000.
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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