WHIPPANY, N.J., May 5, 2016
/PRNewswire/ -- Suburban Propane Partners, L.P. (NYSE: SPH), a
nationwide distributor of propane, fuel oil and related products
and services, as well as a marketer of natural gas and electricity,
today announced earnings for its second quarter ended March 26, 2016.
Net income for the second quarter of fiscal 2016 was
$92.0 million, or $1.51 per Common Unit, compared to net income of
$136.6 million, or $2.26 per Common Unit, in the prior year second
quarter.
Net income and EBITDA for the second quarter of fiscal 2016
included a loss on debt extinguishment of $0.3 million. Net income and EBITDA for the
second quarter of fiscal 2015 included a loss on debt
extinguishment of $15.1 million and
$2.1 million in expenses related to
the integration of Inergy Propane. Excluding the effects of
the foregoing items and unrealized (non-cash) mark-to-market
adjustments on derivative instruments in both periods, Adjusted
EBITDA (as defined and reconciled below) amounted to $145.1 million for the second quarter of fiscal
2016, compared to Adjusted EBITDA of $214.3
million in the prior year second quarter.
In announcing these results, President and Chief Executive
Officer Michael A. Stivala said,
"Our results for the second quarter of fiscal 2016 reflect the
challenging operating environment stemming from record warm
temperatures during this year's heating season that adversely
impacted customer demand during the quarter. The flexible
nature of our cost structure and the strength of our balance sheet
helped mitigate some of the short-term, weather-driven earnings
shortfall. Despite the lower earnings, we continued to fund
all of our working capital requirements without the need to borrow
under our revolving credit facility and we ended the quarter with
approximately $59.0 million of cash
on hand."
Mr. Stivala added, "During the second quarter, we took steps to
further strengthen our liquidity position with the opportunistic
refinancing of our revolving credit facility which was scheduled to
mature in January 2017. We received excellent support from
our bank group and, despite challenging conditions in the credit
markets, the new facility improves our cost of capital, further
extends our debt maturities until 2021, and increases our available
borrowing capacity in support of our long-term growth
initiatives."
Retail propane gallons sold in the second quarter of fiscal 2016
decreased 38.1 million gallons, or 19.1%, to 161.6 million gallons
compared to 199.7 million gallons in the prior year second
quarter. Sales of fuel oil and other refined fuels decreased
6.6 million gallons, to 13.3 million gallons compared to 19.9
million gallons in the prior year second quarter. According
to the National Oceanic and Atmospheric Administration, the winter
of 2015-16 was the warmest on record in the contiguous United
States. Average temperatures (as measured by heating degree
days) across all of the Partnership's service territories for the
second quarter of fiscal 2016 were 13% warmer than normal and 20%
warmer than the prior year second quarter. Therefore, the
period from October 2015 through
March 2016 experienced heating degree
days that were 18% warmer than normal and 19% warmer than the
comparable prior year period.
Revenues of $404.1 million
decreased $195.3 million, or 32.6%,
compared to the prior year second quarter, primarily due to lower
retail propane and fuel oil volumes sold and lower average retail
selling prices associated with lower wholesale product costs.
Average posted propane prices (basis Mont
Belvieu, Texas) and fuel oil prices were 27.0% and 40.2%
lower than the prior year second quarter, respectively. Cost
of products sold for the second quarter of fiscal 2016 of
$137.0 million decreased $116.7 million, or 46.0%, compared to
$253.7 million in the prior year
second quarter, primarily due to lower wholesale product costs and
lower volumes sold. Cost of products sold for the second
quarter of fiscal 2016 included a $0.7
million unrealized (non-cash) loss attributable to the
mark-to-market adjustment for derivative instruments used in risk
management activities, compared to a $7.4
million unrealized (non-cash) loss in the prior year second
quarter. These unrealized losses are excluded from Adjusted
EBITDA for both periods in the table below.
Combined operating and general and administrative expenses of
$122.8 million for the second quarter
of fiscal 2016 were $18.1 million, or
12.8%, lower than the prior year second quarter, primarily due to
savings in payroll and benefit related expenses from a lower
headcount, as well as lower volume-related variable costs and
continued operating efficiencies. Net interest expense of
$18.9 million decreased $0.9 million, or 4.4%, primarily due to savings
from the refinancing of certain of the Partnership's senior notes
completed in the second quarter of fiscal 2015.
Mr. Stivala concluded, "With the heating season now behind us,
our employees are well positioned to focus on fine tuning our
operating model to drive further efficiencies, and on continuing to
execute on our customer base management initiatives through new
customer growth and delivering superior service in every market we
serve. Our fundamentals remain strong and we will continue to
pursue our strategic growth initiatives."
As previously announced on April 21,
2016, the Partnership's Board of Supervisors had declared a
quarterly distribution of $0.8875 per
Common Unit for the three months ended March
26, 2016. On an annualized basis, this distribution
rate equates to $3.55 per Common
Unit. The distribution is payable on May 10, 2016 to Common Unitholders of record as
of May 3, 2016.
Suburban Propane Partners, L.P. is a publicly-traded master
limited partnership listed on the New York Stock Exchange.
Headquartered in Whippany, New
Jersey, Suburban has been in the customer service business
since 1928. The Partnership serves the energy needs of
approximately 1.1 million residential, commercial, industrial and
agricultural customers through 700 locations in 41 states.
This press release contains certain forward-looking
statements relating to future business expectations and financial
condition and results of operations of the Partnership, based on
management's current good faith expectations and beliefs concerning
future developments. These forward-looking statements are
subject to certain risks and uncertainties that could cause actual
results to differ materially from those discussed or implied in
such forward-looking statements, including the following:
- The impact of weather conditions on the demand for propane,
fuel oil and other refined fuels, natural gas and
electricity;
- Volatility in the unit cost of propane, fuel oil and other
refined fuels, natural gas and electricity, the impact of the
Partnership's hedging and risk management activities, and the
adverse impact of price increases on volumes as a result of
customer conservation;
- The ability of the Partnership to compete with other
suppliers of propane, fuel oil and other energy sources;
- The impact on the price and supply of propane, fuel oil and
other refined fuels from the political, military or economic
instability of the oil producing nations, global terrorism and
other general economic conditions;
- The ability of the Partnership to acquire sufficient volumes
of, and the costs to the Partnership of acquiring, transporting and
storing, propane, fuel oil and other refined fuels;
- The ability of the Partnership to acquire and maintain
reliable transportation for its propane, fuel oil and other refined
fuels;
- The ability of the Partnership to retain customers or
acquire new customers;
- The impact of customer conservation, energy efficiency and
technology advances on the demand for propane, fuel oil and other
refined fuels, natural gas and electricity;
- The ability of management to continue to control
expenses;
- The impact of changes in applicable statutes and government
regulations, or their interpretations, including those relating to
the environment and climate change, derivative instruments and
other regulatory developments on the Partnership's
business;
- The impact of changes in tax laws that could adversely
affect the tax treatment of the Partnership for income tax
purposes;
- The impact of legal proceedings on the Partnership's
business;
- The impact of operating hazards that could adversely affect
the Partnership's operating results to the extent not covered by
insurance;
- The Partnership's ability to make strategic acquisitions and
successfully integrate them;
- The impact of current conditions in the global capital and
credit markets, and general economic pressures;
- The operating, legal and regulatory risks the Partnership
may face; and
- Other risks referenced from time to time in filings with the
Securities and Exchange Commission ("SEC") and those factors listed
or incorporated by reference into the Partnership's Annual Report
under "Risk Factors."
Some of these risks and uncertainties are discussed in more
detail in the Partnership's Annual Report on Form 10-K for its
fiscal year ended September 26, 2015
and other periodic reports filed with the SEC. Readers are
cautioned not to place undue reliance on forward-looking
statements, which reflect management's view only as of the date
made. The Partnership undertakes no obligation to update any
forward-looking statement, except as otherwise required by
law.
Suburban Propane
Partners, L.P. and Subsidiaries
|
Consolidated
Statements of Operations
|
For the Three and
Six Months Ended March 26, 2016 and March 28, 2015
|
(in thousands,
except per unit amounts)
|
(unaudited)
|
|
|
|
Three Months
Ended
|
|
|
Six Months
Ended
|
|
|
|
March
26,
2016
|
|
|
March
28,
2015
|
|
|
March
26,
2016
|
|
|
March
28,
2015
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Propane
|
|
$
|
348,216
|
|
|
$
|
498,616
|
|
|
$
|
579,691
|
|
|
$
|
853,266
|
|
Fuel oil and refined
fuels
|
|
|
28,814
|
|
|
|
60,426
|
|
|
|
49,502
|
|
|
|
99,356
|
|
Natural gas and
electricity
|
|
|
15,962
|
|
|
|
28,281
|
|
|
|
27,636
|
|
|
|
44,248
|
|
All other
|
|
|
11,148
|
|
|
|
12,066
|
|
|
|
23,168
|
|
|
|
25,463
|
|
|
|
|
404,140
|
|
|
|
599,389
|
|
|
|
679,997
|
|
|
|
1,022,333
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of products
sold
|
|
|
137,009
|
|
|
|
253,667
|
|
|
|
229,515
|
|
|
|
441,588
|
|
Operating
|
|
|
107,560
|
|
|
|
120,465
|
|
|
|
212,431
|
|
|
|
227,582
|
|
General and
administrative
|
|
|
15,208
|
|
|
|
20,437
|
|
|
|
30,706
|
|
|
|
39,746
|
|
Depreciation and
amortization
|
|
|
33,150
|
|
|
|
33,229
|
|
|
|
64,788
|
|
|
|
65,858
|
|
|
|
|
292,927
|
|
|
|
427,798
|
|
|
|
537,440
|
|
|
|
774,774
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
|
111,213
|
|
|
|
171,591
|
|
|
|
142,557
|
|
|
|
247,559
|
|
Loss on debt
extinguishment
|
|
|
292
|
|
|
|
15,072
|
|
|
|
292
|
|
|
|
15,072
|
|
Interest expense,
net
|
|
|
18,852
|
|
|
|
19,711
|
|
|
|
37,745
|
|
|
|
39,710
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before
provision for income taxes
|
|
|
92,069
|
|
|
|
136,808
|
|
|
|
104,520
|
|
|
|
192,777
|
|
Provision for income
taxes
|
|
|
58
|
|
|
|
174
|
|
|
|
243
|
|
|
|
336
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
92,011
|
|
|
$
|
136,634
|
|
|
$
|
104,277
|
|
|
$
|
192,441
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per Common
Unit - basic
|
|
$
|
1.51
|
|
|
$
|
2.26
|
|
|
$
|
1.72
|
|
|
$
|
3.18
|
|
Weighted average
number of Common Units outstanding - basic
|
|
|
60,857
|
|
|
|
60,573
|
|
|
|
60,802
|
|
|
|
60,536
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per Common
Unit - diluted
|
|
$
|
1.51
|
|
|
$
|
2.24
|
|
|
$
|
1.71
|
|
|
$
|
3.16
|
|
Weighted average
number of Common Units outstanding - diluted
|
|
|
61,135
|
|
|
|
60,917
|
|
|
|
61,072
|
|
|
|
60,856
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental
Information:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA (a)
|
|
$
|
144,071
|
|
|
$
|
189,748
|
|
|
$
|
207,053
|
|
|
$
|
298,345
|
|
Adjusted EBITDA
(a)
|
|
$
|
145,102
|
|
|
$
|
214,316
|
|
|
$
|
212,294
|
|
|
$
|
315,321
|
|
Retail gallons
sold:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Propane
|
|
|
161,597
|
|
|
|
199,690
|
|
|
|
271,361
|
|
|
|
334,224
|
|
Refined
fuels
|
|
|
13,296
|
|
|
|
19,898
|
|
|
|
21,861
|
|
|
|
31,159
|
|
Capital
expenditures:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Maintenance
|
|
$
|
5,831
|
|
|
$
|
5,235
|
|
|
$
|
10,517
|
|
|
$
|
8,846
|
|
Growth
|
|
$
|
5,922
|
|
|
$
|
6,733
|
|
|
$
|
14,188
|
|
|
$
|
11,057
|
|
|
|
(a)
|
EBITDA represents net
income before deducting interest expense, income taxes,
depreciation and amortization. Adjusted EBITDA represents EBITDA
excluding the unrealized net gain or loss on mark-to-market
activity for derivative instruments and other items, as applicable,
as provided in the table below. Our management uses EBITDA and
Adjusted EBITDA as supplemental measures of operating performance
and we are including them because we believe that they provide our
investors and industry analysts with additional information to
evaluate our operating results.
|
EBITDA and Adjusted EBITDA are not recognized terms under
accounting principles generally accepted in the United States of America ("US GAAP") and
should not be considered as an alternative to net income or net
cash provided by operating activities determined in accordance with
US GAAP. Because EBITDA and Adjusted EBITDA as determined by
us excludes some, but not all, items that affect net income, they
may not be comparable to EBITDA and Adjusted EBITDA or similarly
titled measures used by other companies.
The following table sets forth our calculations of EBITDA and
Adjusted EBITDA:
|
|
Three Months
Ended
|
|
|
Six Months
Ended
|
|
|
|
March
26,
2016
|
|
|
March
28,
2015
|
|
|
March
26,
2016
|
|
|
March
28,
2015
|
|
Net income
|
|
$
|
92,011
|
|
|
$
|
136,634
|
|
|
$
|
104,277
|
|
|
$
|
192,441
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes
|
|
|
58
|
|
|
|
174
|
|
|
|
243
|
|
|
|
336
|
|
Interest expense,
net
|
|
|
18,852
|
|
|
|
19,711
|
|
|
|
37,745
|
|
|
|
39,710
|
|
Depreciation and
amortization
|
|
|
33,150
|
|
|
|
33,229
|
|
|
|
64,788
|
|
|
|
65,858
|
|
EBITDA
|
|
|
144,071
|
|
|
|
189,748
|
|
|
|
207,053
|
|
|
|
298,345
|
|
Unrealized (non-cash)
losses (gains) on changes in fair value of derivatives
|
|
|
739
|
|
|
|
7,433
|
|
|
|
1,949
|
|
|
|
(2,072)
|
|
Loss on debt
extinguishment
|
|
|
292
|
|
|
|
15,072
|
|
|
|
292
|
|
|
|
15,072
|
|
Product liability
settlement
|
|
|
-
|
|
|
|
-
|
|
|
|
3,000
|
|
|
|
-
|
|
Integration-related
costs
|
|
|
-
|
|
|
|
2,063
|
|
|
|
-
|
|
|
|
3,976
|
|
Adjusted
EBITDA
|
|
$
|
145,102
|
|
|
$
|
214,316
|
|
|
$
|
212,294
|
|
|
$
|
315,321
|
|
The unaudited financial information included in this document
is intended only as a summary provided for your convenience, and
should be read in conjunction with the complete consolidated
financial statements of the Partnership (including the Notes
thereto, which set forth important information) contained in its
Quarterly Report on Form 10-Q to be filed by the Partnership with
the United States Securities and Exchange Commission ("SEC").
Such report, once filed, will be available on the public EDGAR
electronic filing system maintained by the SEC.
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/suburban-propane-partners-lp-announces-second-quarter-earnings-300263250.html
SOURCE Suburban Propane Partners, L.P.