WHIPPANY, N.J., Aug. 6, 2015 /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 third quarter ended June 27,
2015.
Consistent with the seasonal nature of the propane and fuel oil
businesses, the Partnership typically experiences a net loss in the
third quarter of its fiscal year. Net loss for the third
quarter of fiscal 2015 was $41.0
million, or $0.67 per Common
Unit, compared to a net loss of $59.0
million, or $0.98 per Common
Unit, in the prior year third quarter. Earnings before interest,
taxes, depreciation and amortization ("EBITDA") for the third
quarter of fiscal 2015 amounted to $10.9
million, compared to a loss of $5.2
million in the prior year third quarter.
Net income and EBITDA for the third quarter of fiscal 2015
included expenses of $1.1 million
related to the ongoing integration of Inergy Propane. Net income
and EBITDA for the third quarter of fiscal 2014 included a loss on
debt extinguishment of $11.6 million
and expenses of $4.3 million related
to the integration of Inergy Propane. Excluding the effects of
these charges, as well as the unrealized (non-cash) mark-to-market
adjustments on derivative instruments in both quarters, Adjusted
EBITDA (as defined and reconciled below) increased to $12.1 million for the third quarter of fiscal
2015, compared to Adjusted EBITDA of $10.0
million in the prior year third quarter.
In announcing these results, President and Chief Executive
Officer Michael A. Stivala said, "We
have now completed the first three-years from the closing date of
the Inergy Propane acquisition. Our integration efforts are
substantially complete and our operating results continue to
benefit from our focus on driving operating efficiencies and cost
savings from the combined platform. In addition, the sustained
lower commodity price environment has had a favorable impact on
customer buying habits and overall margins. As a result, we are
pleased to report an increase in our Adjusted EBITDA by
$2.1 million compared to the prior
year third quarter."
Retail propane gallons sold in the third quarter of fiscal 2015
decreased 5.6 million gallons, or 6.7%, to 77.6 million gallons,
compared to 83.2 million gallons in the prior year third quarter.
Sales of fuel oil and other refined fuels decreased 0.8 million
gallons, or 11.4%, to 6.2 million gallons compared to 7.0 million
gallons in the prior year third quarter. Although weather during
the third quarter typically has less of an impact on volumes sold
than it does during the heating season, volumes in the third
quarter of fiscal 2015 were adversely impacted by warmer than
normal temperatures, particularly during the month of April where
average temperatures were 10% warmer than normal and 5% warmer than
April 2014. From an overall weather
perspective, average temperatures across all of our service
territories for the third quarter of fiscal 2015 were 16% warmer
than normal and 6% warmer than the prior year third quarter,
according to the National Oceanic and Atmospheric
Administration.
Revenues of $220.3 million
decreased $76.8 million, or 25.8%,
compared to the prior year third quarter, primarily due to lower
retail selling prices associated with lower wholesale product costs
and, to a lesser extent, lower volumes sold. Average posted propane
prices (basis Mont Belvieu, Texas)
and fuel oil prices were 55.9% and 35.7% lower than the prior year
third quarter, respectively. Cost of products sold for the third
quarter of fiscal 2015 of $94.2
million decreased $67.3
million, or 41.7%, compared to $161.5
million in the prior year third quarter, primarily due to
lower wholesale product costs and, to a lesser extent, lower
volumes sold. Cost of products sold for the third quarter of fiscal
2015 included a nominal (non-cash) loss attributable to the
mark-to-market adjustment for derivative instruments used in risk
management activities, compared to a $0.7
million unrealized (non-cash) gain in the prior year third
quarter. These unrealized gains and losses are excluded from
Adjusted EBITDA for both periods in the table below.
Combined operating and general and administrative expenses of
$115.2 million for the third quarter
of fiscal 2015 were $14.0 million, or
10.8%, lower than the prior year third quarter, primarily due to
operating efficiencies and synergies realized during the period
associated with the integration of Inergy Propane; including lower
payroll and benefit-related expenses attributable to lower
headcount, lower vehicle expenses stemming from a reduction in the
quantity of vehicles in use and lower general insurance and bad
debt expense. Depreciation and amortization expense of $32.7 million was relatively flat compared to the
prior year third quarter. Net interest expense of
$18.9 million decreased $1.8 million, or 8.7%, primarily due to the
savings from the refinancing of certain of the Partnership's senior
notes completed in the third quarter of fiscal 2014 and in the
second quarter of fiscal 2015.
Concluding his remarks, Mr. Stivala said, "Over the past three
years we have also continued to focus on improving our balance
sheet metrics, through opportunistic refinancing and debt
reduction, in line with our strategic goals. During the third
quarter of fiscal 2015, we once again funded all working capital
needs from cash on hand without the need to borrow under our
revolving credit facility, and ended the quarter with $147.0 million of cash. With the integration of
the Inergy Propane business effectively behind us and, with the
strength of our balance sheet, we are well positioned to continue
to pursue growth opportunities both within our existing operating
platform and through strategic expansion."
As previously announced on July 23,
2015, the Partnership's Board of Supervisors has declared a
quarterly distribution of $0.8875 per
Common Unit for the three months ended June
27, 2015. On an annualized basis, this distribution rate
equates to $3.55 per Common Unit. The
$0.8875 per Common Unit distribution
is payable on August 11, 2015 to
Common Unitholders of record as of August 4,
2015.
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 1.2 million residential, commercial, industrial and
agricultural customers through more than 710 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 and natural gas, 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 cost savings expected from the Partnership's acquisition
of the retail propane operations formerly owned by Inergy, L.P.
(the "Inergy Propane Acquisition") may not be fully realized or
realized within the expected time frame;
- The costs of integrating the business acquired in the Inergy
Propane Acquisition into the Partnership's existing operations may
be greater than expected;
- 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 global warming, derivative instruments and
other regulatory developments on the Partnership's
business;
- The impact of changes in tax regulations 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, including but not limited to Inergy
Propane;
- 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 most recent
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 27, 2014
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
Nine Months Ended June 27, 2015 and June 28, 2014
|
(in thousands,
except per unit amounts)
|
(unaudited)
|
|
|
|
Three Months
Ended
|
|
|
Nine Months
Ended
|
|
|
|
June 27,
2015
|
|
|
June 28,
2014
|
|
|
June 27,
2015
|
|
|
June 28,
2014
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Propane
|
|
$
|
181,259
|
|
|
$
|
242,173
|
|
|
$
|
1,034,525
|
|
|
$
|
1,409,271
|
|
Fuel oil and refined
fuels
|
|
|
17,043
|
|
|
|
26,898
|
|
|
|
116,399
|
|
|
|
174,888
|
|
Natural gas and
electricity
|
|
|
11,861
|
|
|
|
16,912
|
|
|
|
56,109
|
|
|
|
74,311
|
|
All other
|
|
|
10,139
|
|
|
|
11,160
|
|
|
|
35,602
|
|
|
|
38,501
|
|
|
|
|
220,302
|
|
|
|
297,143
|
|
|
|
1,242,635
|
|
|
|
1,696,971
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of products
sold
|
|
|
94,198
|
|
|
|
161,482
|
|
|
|
535,786
|
|
|
|
959,206
|
|
Operating
|
|
|
100,168
|
|
|
|
115,991
|
|
|
|
327,750
|
|
|
|
361,035
|
|
General and
administrative
|
|
|
15,040
|
|
|
|
13,253
|
|
|
|
54,786
|
|
|
|
51,105
|
|
Depreciation and
amortization
|
|
|
32,730
|
|
|
|
32,992
|
|
|
|
98,588
|
|
|
|
101,101
|
|
|
|
|
242,136
|
|
|
|
323,718
|
|
|
|
1,016,910
|
|
|
|
1,472,447
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating (loss)
income
|
|
|
(21,834)
|
|
|
|
(26,575)
|
|
|
|
225,725
|
|
|
|
224,524
|
|
Loss on debt
extinguishment
|
|
|
-
|
|
|
|
11,589
|
|
|
|
15,072
|
|
|
|
11,589
|
|
Interest expense,
net
|
|
|
18,933
|
|
|
|
20,662
|
|
|
|
58,643
|
|
|
|
63,095
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income before
provision for income taxes
|
|
|
(40,767)
|
|
|
|
(58,826)
|
|
|
|
152,010
|
|
|
|
149,840
|
|
Provision for income
taxes
|
|
|
185
|
|
|
|
163
|
|
|
|
521
|
|
|
|
611
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss)
income
|
|
$
|
(40,952)
|
|
|
$
|
(58,989)
|
|
|
$
|
151,489
|
|
|
$
|
149,229
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income per
Common Unit - basic
|
|
$
|
(0.67)
|
|
|
$
|
(0.98)
|
|
|
$
|
2.50
|
|
|
$
|
2.47
|
|
Weighted average
number of Common Units outstanding - basic
|
|
|
60,699
|
|
|
|
60,462
|
|
|
|
60,632
|
|
|
|
60,448
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income per
Common Unit - diluted
|
|
$
|
(0.67)
|
|
|
$
|
(0.98)
|
|
|
$
|
2.49
|
|
|
$
|
2.46
|
|
Weighted average
number of Common Units outstanding - diluted
|
|
|
60,699
|
|
|
|
60,462
|
|
|
|
60,876
|
|
|
|
60,710
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental
Information:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA (a)
|
|
$
|
10,896
|
|
|
$
|
(5,172)
|
|
|
$
|
309,241
|
|
|
$
|
314,036
|
|
Adjusted EBITDA
(a)
|
|
$
|
12,067
|
|
|
$
|
10,023
|
|
|
$
|
327,388
|
|
|
$
|
334,000
|
|
Retail gallons
sold:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Propane
|
|
|
77,633
|
|
|
|
83,155
|
|
|
|
411,857
|
|
|
|
454,702
|
|
Refined
fuels
|
|
|
6,181
|
|
|
|
6,981
|
|
|
|
37,340
|
|
|
|
43,595
|
|
Capital
expenditures:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Maintenance
|
|
$
|
5,763
|
|
|
$
|
5,167
|
|
|
$
|
14,609
|
|
|
$
|
12,972
|
|
Growth
|
|
$
|
5,335
|
|
|
$
|
2,118
|
|
|
$
|
16,392
|
|
|
$
|
8,670
|
|
(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
|
|
|
Nine Months
Ended
|
|
|
|
June 27,
2015
|
|
|
June 28,
2014
|
|
|
June 27,
2015
|
|
|
June 28,
2014
|
|
Net (loss)
income
|
|
$
|
(40,952)
|
|
|
$
|
(58,989)
|
|
|
$
|
151,489
|
|
|
$
|
149,229
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes
|
|
|
185
|
|
|
|
163
|
|
|
|
521
|
|
|
|
611
|
|
Interest expense,
net
|
|
|
18,933
|
|
|
|
20,662
|
|
|
|
58,643
|
|
|
|
63,095
|
|
Depreciation and
amortization
|
|
|
32,730
|
|
|
|
32,992
|
|
|
|
98,588
|
|
|
|
101,101
|
|
EBITDA
|
|
|
10,896
|
|
|
|
(5,172)
|
|
|
|
309,241
|
|
|
|
314,036
|
|
Loss on debt
extinguishment
|
|
|
-
|
|
|
|
11,589
|
|
|
|
15,072
|
|
|
|
11,589
|
|
Unrealized (non-cash)
losses (gains) on changes in fair
value of derivatives
|
|
|
37
|
|
|
|
(707)
|
|
|
|
(2,035)
|
|
|
|
(708)
|
|
Integration-related
costs
|
|
|
1,134
|
|
|
|
4,313
|
|
|
|
5,110
|
|
|
|
9,083
|
|
Adjusted
EBITDA
|
|
$
|
12,067
|
|
|
$
|
10,023
|
|
|
$
|
327,388
|
|
|
$
|
334,000
|
|
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-third-quarter-earnings-300124585.html
SOURCE Suburban Propane Partners, L.P.