Market Snapshot
  • U.S.
  • Europe
  • Asia
Ticker Volume Price Price Delta
DJIA 16,501.65 -12.72 -0.08%
S&P 500 1,875.39 -4.16 -0.22%
NASDAQ 4,126.97 -34.49 -0.83%
Ticker Volume Price Price Delta
STOXX 50 3,196.02 20.05 0.63%
FTSE 100 6,717.44 42.70 0.64%
DAX 9,586.24 42.05 0.44%
Ticker Volume Price Price Delta
NIKKEI 14,404.99 -141.28 -0.97%
TOPIX 1,164.90 -8.91 -0.76%
HANG SENG 22,562.80 53.16 0.24%

Suburban Propane Partners, L.P. Announces Second Quarter Earnings



      Suburban Propane Partners, L.P. Announces Second Quarter Earnings

PR Newswire

WHIPPANY, N.J., May 9, 2013

WHIPPANY, N.J., May 9, 2013 /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 30, 2013.

The second quarter of fiscal 2013 was the second full quarter of operations
since the Partnership's acquisition of Inergy L.P.'s retail propane business
("Inergy Propane") on August 1, 2012.  For comparative purposes, the variances
in year-over-year results were primarily attributable to the inclusion of the
Inergy Propane operations.  In addition, operating performance in the
Partnership's legacy operations improved as a result of a combination of
colder average temperatures, lower wholesale propane costs and continued
savings in operating expenses.  Net income for the three months ended March
30, 2013 amounted to $131.2 million, or $2.29 per Common Unit, compared to
$49.6 million, or $1.39 per Common Unit, in the prior year second quarter.
 Earnings before interest, taxes, depreciation and amortization ("EBITDA") for
the second quarter of fiscal 2013 amounted to $185.3 million, compared to
$63.3 million in the prior year second quarter, an increase of $122.0
million. 

Net income and EBITDA for the fiscal 2013 second quarter included $2.7 million
in expenses related to the ongoing integration of Inergy Propane operations,
and unrealized (non-cash) losses of $2.6 million attributable to
mark-to-market adjustments on derivative instruments used in risk management
activities. Net income and EBITDA for the fiscal 2012 second quarter included
a $2.1 million non-cash charge from a loss on disposal of an asset in the
Partnership's natural gas and electricity business, as well as a $0.5 million
loss on debt extinguishment associated with the amended and restated credit
agreement completed in January 2012.  Excluding the effects of these charges
for the fiscal 2013 and 2012 second quarters, as well as the unrealized
(non-cash) mark-to-market adjustments on derivative instruments in both
quarters (there was no impact in the prior year second quarter), Adjusted
EBITDA amounted to $190.7 million for the fiscal 2013 second quarter, compared
to Adjusted EBITDA of $65.9 million in the prior year second quarter.

In announcing these results, President and Chief Executive Officer Michael J.
Dunn, Jr., said, "We are very pleased with our results for the second quarter
of fiscal 2013.  While the unseasonably warm temperatures that were
experienced in the first quarter of fiscal 2013 carried over into the first
several weeks of the second quarter, a burst of cold weather from late
February through March brought average temperatures for the quarter closer to
normal. When the cold weather did arrive, our people and combined businesses
responded."

Retail propane gallons sold in the second quarter of fiscal 2013 increased
120.4 million gallons, to 210.3 million gallons from 89.9 million gallons in
the prior year second quarter. Sales of fuel oil and other refined fuels
increased 12.6 million gallons, to 23.2 million gallons compared to 10.6
million gallons in the prior year second quarter. The increase in volumes sold
was primarily attributable to the inclusion of the Inergy Propane operations,
as well as increases in the Partnership's legacy operations resulting from
colder average temperatures.  According to the National Oceanic and
Atmospheric Administration ("NOAA"), average temperatures (as measured by
heating degree days) across all of the Partnership's service territories
during the second quarter of fiscal 2013 were 1% warmer than normal, compared
to 21% warmer than normal in the prior year quarter. The favorable weather
comparison for the quarter was primarily due to colder than normal average
temperatures in the month of March 2013 which, as reported by NOAA, were 10%
colder than normal compared to 31% warmer than normal in March of the prior
year.   

Addressing the ongoing Inergy Propane integration efforts, Mr. Dunn said,
"During the second quarter we continued to make progress on our integration
efforts. With our key operations management in place since the start of the
heating season, we are now focused on further streamlining our regional
operating structure, defining our local operating footprint and identifying
the management teams across the entire platform.  With the heating season
behind us, we have aggressively turned our attention to the blending of
locations in overlapping geographies and the conversion of key operating
systems.  Throughout this period of change, we have been in regular
communication with the entire Inergy Propane customer base, keeping them
informed of progress and milestones achieved with the integration, as well as
our commitment to their safety and comfort."

Concluding his comments, Mr. Dunn said, "Plenty of work remains to be done
with the integration of the business operations and cultures in preparation
for the next heating season.  We will continue to execute on our detailed
integration plans while, at the same time, maintaining our focus on the
combined customer base and continuing to look for opportunities to grow and
improve efficiencies. Finally, despite the increased size of our business and
the increased working capital requirements, 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 more than $166.5 million of cash."

As previously announced on April 24, 2013, the Partnership's Board of
Supervisors has declared a quarterly distribution of $0.8750 per Common Unit
for the three months ended March 30, 2013. On an annualized basis, this
distribution rate equates to $3.50 per Common Unit. The $0.8750 per Common
Unit distribution is payable on May 14, 2013 to Common Unitholders of record
as of May 7, 2013.

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 more than 1.2 million residential,
commercial, industrial and agricultural customers through more than 750
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:

  o The impact of weather conditions on the demand for propane, fuel oil and
    other refined fuels, natural gas and electricity;
  o 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;
  o The cost savings expected from the Partnership's most recent acquisition
    of Inergy Propane may not be fully realized or realized within the
    expected timeframe;
  o The Partnership's revenue from the Inergy Propane acquisition may be lower
    than expected;
  o The costs of integrating the business acquired in the Inergy Propane
    acquisition into the Partnership's existing operations may be greater than
    expected;
  o The ability of the Partnership to compete with other suppliers of propane,
    fuel oil and other energy sources;
  o 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;
  o The ability of the Partnership to acquire and maintain reliable
    transportation for its propane, fuel oil and other refined fuels;
  o The ability of the Partnership to retain customers or acquire new
    customers;
  o 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;
  o The ability of management to continue to control expenses;
  o 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;
  o The impact of changes in tax laws that could adversely affect the tax
    treatment of the Partnership for income tax purposes;
  o The impact of legal proceedings on the Partnership's business;   
  o The impact of operating hazards that could adversely affect the
    Partnership's operating results to the extent not covered by insurance;
  o The Partnership's ability to make strategic acquisitions and successfully
    integrate them;
  o The impact of current conditions in the global capital and credit markets,
    and general economic pressures;
  o The operating, legal and regulatory risks the Partnership may face; and
  o 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
29, 2012 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 30, 2013 and March 24, 2012
(in thousands, except per unit amounts)
(unaudited)
                              Three Months Ended        Six Months Ended
                              March 30,      March 24,  March 30,    March 24,
                              2013           2012       2013         2012
Revenues
                              $              $          $            $        
  Propane                                                  933,322    
                              540,537         283,759                 524,115
  Fuel oil and refined        92,795         43,748     154,941      74,729
fuels
  Natural gas and             29,732         21,708     48,121       39,759
electricity
  All other                   15,362         8,411      32,745       18,909
                              678,426        357,626    1,169,129    657,512
Costs and expenses
  Cost of products sold       346,999        208,401    592,099      391,975
  Operating                   126,371        71,293     241,307      137,235
  General and                 19,763         14,158     37,595       26,453
administrative
  Depreciation and            29,648         7,649      58,007       15,434
amortization
                              522,781        301,501    929,008      571,097
Operating income              155,645        56,125     240,121      86,415
Loss on debt extinguishment   -              507        -            507
Interest expense, net         24,343         6,425      48,899       13,263
Income before provision for   131,302        49,193     191,222      72,645
(benefit from) income taxes
Provision for (benefit        150            (380)      282          (160)
from) income taxes
                              $              $          $            $        
Net income                                                 190,940      
                              131,152         49,573                 72,805
Net income per Common Unit    $              $          $            $        
- basic                                                                     
                               2.29          1.39       3.34         2.05
Weighted average number of
Common Units outstanding -    57,185         35,600     57,169       35,588
basic
Net income per Common Unit    $              $          $            $        
- diluted                                                                   
                               2.28          1.38       3.33         2.03
Weighted average number of
Common Units outstanding -    57,441         35,839     57,392       35,808
diluted
Supplemental Information:
                              $              $          $            $        
EBITDA (a)                                                 298,128    
                              185,293         63,267                  101,342
                              $              $          $            $        
Adjusted EBITDA (a)                                        307,117    
                              190,668         65,852                  104,975
Retail gallons sold:
    Propane                   210,314        89,941     364,247      164,220
    Refined fuels             23,223         10,565     39,108       18,260
Capital expenditures:
                              $              $          $            $        
    Maintenance                                                           
                              2,404          3,366      3,838        5,227
                              $              $          $            $        
    Growth                                                                
                              3,729           596       9,056        4,140
(more)
    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 certain other items, as applicable, as provided
(a) in the table below.  Our management uses EBITDA and Adjusted EBITDA as
    measures of liquidity and we are including them because we believe that
    they provide our investors and industry analysts with additional
    information to evaluate our ability to meet our debt service obligations
    and to pay our quarterly distributions to holders of our Common Units.
    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 (i) our calculations of EBITDA and Adjusted
    EBITDA and (ii) a reconciliation of Adjusted EBITDA, as so calculated, to
    our net cash provided by operating activities:
                              Three Months Ended        Six Months Ended
                              March 30,      March 24,  March 30,    March 24,
                              2013           2012       2013         2012
                              $              $          $            $        
    Net income                                             190,940      
                              131,152         49,573                 72,805
    Add:
      Provision for
    (benefit from) income     150            (380)      282          (160)
    taxes
      Interest expense, net   24,343         6,425      48,899       13,263
      Depreciation and        29,648         7,649      58,007       15,434
    amortization
    EBITDA                    185,293        63,267     298,128      101,342
      Unrealized (non-cash)
    losses on changes in      2,646          -          6,260        1,048
    fair value of
    derivatives
      Integration-related     2,729          -          2,729        -
    costs
      Loss on debt            -              507        -            507
    extinguishment
      Loss on asset           -              2,078      -            2,078
    disposal
    Adjusted EBITDA           190,668        65,852     307,117      104,975
    Add / (subtract):
      (Provision for)
    benefit from income       (150)          380        (282)        160
    taxes
      Interest expense, net   (24,343)       (6,425)    (48,899)     (13,263)
      Unrealized (non-cash)
    (losses) on changes in    (2,646)        -          (6,260)      (1,048)
    fair value of
    derivatives
      Integration-related     (2,729)        -          (2,729)      -
    costs
      (Gain) on disposal of
    property, plant and       (323)          (179)      (2,590)      (211)
    equipment, net
      Compensation cost
    recognized under          1,173          1,147      2,413        2,350
    Restricted Unit Plans
      Changes in working
    capital and other         (89,224)       (18,404)   (114,807)    (75,915)
    assets and liabilities
    Net cash provided by      $              $          $            $        
    operating activities                                   133,963      
                              72,426          42,371                 17,048
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.

 

SOURCE Suburban Propane Partners, L.P.

Website: http://suburbanpropane.com
Contact: Michael Stivala, Chief Financial Officer, Phone: 973-503-9252
Sponsored Links
Advertisement
Advertisements
Sponsored Links
Advertisement