Global Partners LP (NYSE: GLP) (“Global” or the “Partnership”)
today reported financial results for the first quarter ended March
31, 2024.
CEO Commentary
Eric Slifka, the Partnership’s President and Chief Executive
Officer, said, “Our Gasoline Distribution and Station Operations
segment performed well in the first quarter, posting healthy
margins that partly offset less favorable market conditions in our
Wholesale and Commercial segments. Specific to our Wholesale
segment, certain products were negatively impacted by the timing of
mark-to-market valuations, which have largely recovered in the
month of April. In the first quarter, we successfully completed the
integration of liquid energy terminals acquired in December from
Motiva Enterprises, and those assets performed in line with our
expectations for the quarter.
“In April, we closed on the purchase of four liquid energy
terminals in the Northeast from Gulf Oil Limited Partnership. This
acquisition, which will be reflected in our results beginning in
the second quarter of this year, further demonstrates our
commitment to increasing the scale and strength of our growing
energy distribution network,” Slifka said. “We are excited about
the new opportunities the Gulf and Motiva transactions create to
build on our strategic advantage and serve customers in these
high-demand markets.”
First-Quarter 2024 Financial Highlights
Net loss was $5.6 million, or $0.37 per common limited partner
unit, for the first quarter of 2024 compared with net income of
$29.0 million, or $0.70 per diluted common limited partner unit, in
the same period of 2023.
Earnings before interest, taxes, depreciation and amortization
(EBITDA) was $56.9 million in the first quarter of 2024 compared
with $78.1 million in the same period of 2023.
Adjusted EBITDA was $56.0 million in the first quarter of 2024
versus $76.0 million in the same period of 2023.
Distributable cash flow (DCF) was $15.8 million in the first
quarter of 2024 compared with $46.3 million in the same period of
2023.
Adjusted DCF was $16.0 million in the first quarter of 2024
compared with $46.3 million in the same period of 2023.
Gross profit in the first quarter of 2024 was $215.1 million
compared with $222.1 million in the same period of 2023.
Combined product margin, which is gross profit adjusted for
depreciation allocated to cost of sales, was $244.1 million in the
first quarter of 2024 compared with $244.8 million in the same
period of 2023.
Combined product margin, EBITDA, adjusted EBITDA, DCF and
adjusted 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, 2024, and 2023.
GDSO segment product margin was $187.7 million in the first
quarter of 2024 compared with $183.5 million in the same period of
2023. Product margin from gasoline distribution increased to $121.6
million from $120.8 million in the year-earlier period, primarily
due to higher fuel margins (cents per gallon). Product margin from
station operations totaled $66.1 million compared with $62.7
million in the first quarter of 2023.
Wholesale segment product margin was $49.4 million in the first
quarter of 2024 compared with $53.1 million in the same period of
2023. Gasoline and gasoline blendstocks product margin was $29.7
million compared with $20.4 million in the same period of 2023,
largely due to the acquisition of 25 refined product terminals and
related assets from Motiva Enterprises in December 2023, partially
offset by less favorable market conditions in gasoline. Product
margin from distillates and other oils was $19.7 million in the
first quarter of 2024 compared with $32.7 million in the same
period of 2023, primarily due to less favorable market conditions
in residual oil.
Commercial segment product margin was $7.0 million in the first
quarter of 2024 compared with $8.1 million in the same period of
2023, primarily due to less favorable market conditions.
Total sales were $4.1 billion in the first quarter of 2024
compared with $4.0 billion in the same period of 2023. Wholesale
segment sales were $2.6 billion in the first quarter of 2024
compared with $2.5 billion in the same period of 2023. GDSO segment
sales were $1.2 billion in the first quarter of 2024 versus $1.3
billion in the same period of 2023. Commercial segment sales were
$278.6 million in the first quarter of 2024 compared with $257.9
million in the same period of 2023.
Total volume was 1.6 billion gallons in the first quarter of
2024 compared with 1.4 billion gallons in the same period of 2023.
Wholesale segment volume was 1.1 billion gallons in the first
quarter of 2024 compared with 928.6 million gallons in the same
period of 2023. GDSO volume was 364.3 million gallons in the first
quarter of 2024 compared with 379.2 million gallons in the same
period of 2023. Commercial segment volume was 120.7 million gallons
in the first quarter of 2024 compared with 99.7 million gallons in
the same period of 2023.
Recent Developments
- Global completed its acquisition of four liquid energy
terminals from Gulf Oil Limited Partnership for $212.3 million. The
terminals, which are strategically located in Chelsea, MA, New
Haven, CT, Linden, NJ, and Woodbury, NJ, further enhance Global’s
position in the energy economy of the Northeast.
- Global fully redeemed all of its outstanding Series A
Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred
Units (the “Series A Preferred Units”) at a redemption price of
$25.00 per share, plus a $0.514275 per unit cash distribution for
the period from February 15, 2024 through April 14, 2024. Effective
April 15, 2024, the Series A Preferred Units are no longer
outstanding.
- Global announced a cash distribution of $0.7100 per unit ($2.84
per unit on an annualized basis) on all of its outstanding common
units from January 1, 2024 through March 31, 2024. The distribution
will be paid on May 15, 2024 to unitholders of record as of the
close of business on May 9, 2024.
Financial Results Conference Call
Management will review the Partnership’s first-quarter 2024
financial results in a teleconference call for analysts and
investors today.
Time:
10:00 a.m. ET
Dial-in numbers:
(877) 709-8155 (U.S. and Canada)
(201) 689-8881 (International)
Please plan to dial in to the call at least 10 minutes prior to
the start time. The call also will be webcast live and archived on
Global Partners’ website, https://ir.globalp.com
About Global Partners LP
Building on a legacy that began more than 90 years ago, Global
Partners has evolved into a Fortune 500 company and
industry-leading integrated owner, supplier, and operator of liquid
energy terminals, fueling locations, and guest-focused retail
experiences. Global operates or maintains dedicated storage at 53
liquid energy terminals—with connectivity to strategic rail,
pipeline, and marine assets—spanning from Maine to Florida and into
the U.S. Gulf States. Through this extensive network, the company
distributes gasoline, distillates, residual oil, and renewable
fuels to wholesalers, retailers, and commercial customers. In
addition, Global owns, supplies, and operates more than 1,700
retail locations across 12 Northeast states, the Mid-Atlantic, and
Texas, providing the fuels people need to keep them on the go at
their unique guest-focused convenience destinations. Recognized as
one of Fortune’s Most Admired Companies, Global Partners is
embracing progress and diversifying to meet the needs of the energy
transition.
Global, a master limited partnership, trades on the New York
Stock Exchange under the ticker symbol “GLP.” For additional
information, visit www.globalp.com.
Use of Non-GAAP Financial Measures
Product Margin
Global Partners views product margin as an important performance
measure of the core profitability of its operations. The
Partnership reviews product margin monthly for consistency and
trend analysis. Global Partners defines product margin as product
sales minus product costs. Product sales primarily include sales of
unbranded and branded gasoline, distillates, residual oil,
renewable fuels and crude oil, as well as convenience store and
prepared food sales, gasoline station rental income and revenue
generated from logistics activities when the Partnership engages in
the storage, transloading and shipment of products owned by others.
Product costs include the cost of acquiring products and all
associated costs including shipping and handling costs to bring
such products to the point of sale as well as product costs related
to convenience store items and costs associated with logistics
activities. The Partnership also looks at product margin on a per
unit basis (product margin divided by volume). Product margin is a
non-GAAP financial measure used by management and external users of
the Partnership’s consolidated financial statements to assess its
business. Product margin should not be considered an alternative to
net income, operating income, cash flow from operations, or any
other measure of financial performance presented in accordance with
GAAP. In addition, product margin may not be comparable to product
margin or a similarly titled measure of other companies.
EBITDA and Adjusted EBITDA
EBITDA and adjusted EBITDA are non-GAAP financial measures used
as supplemental financial measures by management and may be used by
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;
- financial performance without regard to financing methods,
capital structure, income taxes or historical cost basis;
- ability to generate cash sufficient to pay interest on its
indebtedness and to make distributions to its partners;
- operating performance and return on invested capital as
compared to those of other companies in the wholesale, marketing,
storing and distribution of refined petroleum products, gasoline
blendstocks, renewable fuels, crude oil and propane, and in the
gasoline stations and convenience stores business, without regard
to financing methods and capital structure; and
- viability of acquisitions and capital expenditure projects and
the overall rates of return of alternative investment
opportunities.
Adjusted EBITDA is EBITDA further adjusted for gains or losses
on the sale and disposition of assets, goodwill and long-lived
asset impairment charges and Global’s proportionate share of EBITDA
related to its joint ventures, which are accounted for using the
equity method. EBITDA and adjusted EBITDA should not be considered
as alternatives 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 and adjusted
EBITDA exclude some, but not all, items that affect net income, and
these measures may vary among other companies. Therefore, EBITDA
and adjusted EBITDA may not be comparable to similarly titled
measures of other companies.
Distributable Cash Flow and Adjusted Distributable Cash Flow
Distributable cash flow is an important non-GAAP financial
measure for the Partnership’s limited partners since it serves as
an indicator of Global’s success in providing a cash return on
their investment. Distributable cash flow as defined by the
Partnership’s partnership agreement (the “partnership agreement”)
is 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.
Distributable cash flow as used in the partnership agreement
also determines Global’s ability to make cash distributions on its
incentive distribution rights. The investment community also uses a
distributable cash flow metric similar to the metric used in the
partnership agreement with respect to publicly traded partnerships
to indicate whether or not such partnerships have generated
sufficient earnings on a current or historical level that can
sustain distributions on preferred or common units or support an
increase in quarterly cash distributions on common units. The
partnership agreement does not permit adjustments for certain
non-cash items, such as net losses on the sale and disposition of
assets and goodwill and long-lived asset impairment charges.
Adjusted distributable cash flow is a non-GAAP financial measure
intended to provide management and investors with an enhanced
perspective of the Partnership’s financial performance. Adjusted
distributable cash flow is distributable cash flow (as defined in
the partnership agreement) further adjusted for Global’s
proportionate share of distributable cash flow related to its joint
ventures, which are accounted for using the equity method. Adjusted
distributable cash flow is not used in the partnership agreement to
determine the Partnership’s ability to make cash distributions and
may be higher or lower than distributable cash flow as calculated
under the partnership agreement.
Distributable cash flow and adjusted distributable cash flow
should not be considered as alternatives to net income, operating
income, cash flow from operations, or any other measure of
financial performance presented in accordance with GAAP. In
addition, the Partnership’s distributable cash flow and adjusted
distributable cash flow may not be comparable to distributable cash
flow or similarly titled measures of other companies.
Forward-looking Statements
Certain statements and information in this press release may
constitute “forward-looking statements.” The words “believe,”
“expect,” “anticipate,” “plan,” “intend,” “foresee,” “should,”
“would,” “could” or other similar expressions are intended to
identify forward-looking statements, which are generally not
historical in nature, although not all forward-looking statements
contain such identifying words. These forward-looking statements
are based on Global’s current expectations and beliefs concerning
future developments and their potential effect on the Partnership.
While management believes that these forward-looking statements are
reasonable as and when made, there can be no assurance that future
developments affecting the Partnership will be those that it
anticipates. Forward-looking statements involve significant risks
and uncertainties (some of which are beyond the Partnership’s
control) including, without limitation, uncertainty around the
timing of an economic recovery in the United States which will
impact the demand for the products we sell and the services that we
provide, and assumptions that could cause actual results to differ
materially from the Partnership’s historical experience and present
expectations or projections. We believe these assumptions are
reasonable given currently available information. Our assumptions
and future performance are subject to a wide range of business
risks, uncertainties and factors, which are described in our
filings with the Securities and Exchange Commission (SEC).
For additional information regarding known material factors that
could cause actual results to differ from the Partnership’s
projected results, please see Global’s filings with the SEC,
including its Annual Report on Form 10-K, Quarterly Reports on Form
10-Q and Current Reports on Form 8-K.
Readers are cautioned not to place undue reliance on
forward-looking statements, which speak only as of the date hereof.
Global undertakes no obligation to publicly update or revise any
forward-looking statements after the date they are made, whether as
a result of new information, future events or otherwise.
GLOBAL PARTNERS LP CONSOLIDATED STATEMENTS OF
OPERATIONS (In thousands, except per unit data)
(Unaudited)
Three Months Ended
March 31,
2024
2023
Sales $
4,145,392
$
4,030,327
Cost of sales
3,930,257
3,808,263
Gross profit
215,135
222,064
Costs and operating expenses: Selling, general and
administrative expenses
69,781
62,256
Operating expenses
120,150
108,353
Amortization expense
1,869
2,084
Net gain on sale and disposition of assets
(2,501
)
(2,128
)
Total costs and operating expenses
189,299
170,565
Operating income
25,836
51,499
Other (loss) (expense): Loss from equity method investments
(1,379
)
-
Interest expense
(29,696
)
(22,068
)
(Loss) income before income tax expense
(5,239
)
29,431
Income tax expense
(363
)
(400
)
Net (loss) income
(5,602
)
29,031
Less: General partner's interest in net (loss) income,
including incentive distribution rights
3,136
1,782
Less: Preferred limited partner interest in net income
3,916
3,463
Net (loss) income attributable to common limited partners $
(12,654
)
$
23,786
Basic net (loss) income per common limited partner unit (1)
$
(0.37
)
$
0.70
Diluted net (loss) income per common limited partner unit
(1) $
(0.37
)
$
0.70
Basic weighted average common limited partner units
outstanding
33,963
33,986
Diluted weighted average common limited partner units
outstanding
33,963
34,001
(1) 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 or
losses is assumed to be allocated to the common unitholders and to
the General Partner's general partner interest. Net income
attributable to common limited partners is divided by the weighted
average common units outstanding in computing the net income per
limited partner unit.
GLOBAL PARTNERS LP CONSOLIDATED
BALANCE SHEETS (In thousands) (Unaudited)
March 31,
December 31,
2024
2023
Assets Current assets: Cash and cash equivalents $
72,822
$
19,642
Accounts receivable, net
561,934
551,764
Accounts receivable - affiliates
5,642
8,142
Inventories
403,955
397,314
Brokerage margin deposits
13,444
12,779
Derivative assets
9,108
17,656
Prepaid expenses and other current assets
88,012
90,531
Total current assets
1,154,917
1,097,828
Property and equipment, net
1,490,217
1,513,545
Right of use assets, net
247,465
252,849
Intangible assets, net
18,849
20,718
Goodwill
426,768
429,215
Equity method investments
88,128
94,354
Other assets
39,288
37,502
Total assets $
3,465,632
$
3,446,011
Liabilities and partners' equity Current
liabilities: Accounts payable $
475,452
$
648,717
Working capital revolving credit facility - current portion
226,000
16,800
Lease liability - current portion
55,546
59,944
Environmental liabilities - current portion
5,493
5,057
Trustee taxes payable
67,919
67,398
Accrued expenses and other current liabilities
148,029
179,887
Derivative liabilities
7,592
4,987
Total current liabilities
986,031
982,790
Working capital revolving credit facility - less current
portion
-
-
Revolving credit facility
-
380,000
Senior notes
1,184,628
742,720
Lease liability - less current portion
198,848
200,195
Environmental liabilities - less current portion
68,800
71,092
Financing obligations
137,554
138,485
Deferred tax liabilities
68,300
68,909
Other long-term liabilities
57,467
61,160
Total liabilities
2,701,628
2,645,351
Partners' equity
764,004
800,660
Total liabilities and partners' equity $
3,465,632
$
3,446,011
GLOBAL PARTNERS LP FINANCIAL RECONCILIATIONS
(In thousands) (Unaudited)
Three Months Ended
March 31,
2024
2023
Reconciliation of gross profit to product margin: Wholesale
segment: Gasoline and gasoline blendstocks $
29,761
$
20,386
Distillates and other oils
19,659
32,747
Total
49,420
53,133
Gasoline Distribution and Station Operations segment: Gasoline
distribution
121,630
120,816
Station operations
66,087
62,730
Total
187,717
183,546
Commercial segment
6,968
8,127
Combined product margin
244,105
244,806
Depreciation allocated to cost of sales
(28,970
)
(22,742
)
Gross profit $
215,135
$
222,064
Reconciliation of net (loss) income to EBITDA and
adjusted EBITDA: Net (loss) income $
(5,602
)
$
29,031
Depreciation and amortization
32,486
26,648
Interest expense
29,696
22,068
Income tax expense
363
400
EBITDA
56,943
78,147
Net gain on sale and disposition of assets
(2,501
)
(2,128
)
Loss from equity method investments (1)
1,379
-
EBITDA related to equity method investments (1)
187
-
Adjusted EBITDA $
56,008
$
76,019
Reconciliation of net cash used in operating activities
to EBITDA and adjusted EBITDA: Net cash used in operating
activities $
(182,702
)
$
(19,325
)
Net changes in operating assets and liabilities and certain
non-cash items
209,586
75,004
Interest expense
29,696
22,068
Income tax expense
363
400
EBITDA
56,943
78,147
Net gain on sale and disposition of assets
(2,501
)
(2,128
)
Loss from equity method investments (1)
1,379
-
EBITDA related to equity method investments (1)
187
-
Adjusted EBITDA $
56,008
$
76,019
Reconciliation of net (loss) income to distributable cash
flow and adjusted distributable cash flow: Net (loss) income $
(5,602
)
$
29,031
Depreciation and amortization
32,486
26,648
Amortization of deferred financing fees
1,831
1,347
Amortization of routine bank refinancing fees
(1,193
)
(1,138
)
Maintenance capital expenditures
(11,737
)
(9,560
)
Distributable cash flow (2)(3)
15,785
46,328
Loss from equity method investments (1)
1,379
-
Distributable cash flow from equity method investments (1)
(1,143
)
-
Adjusted distributable cash flow
16,021
46,328
Distributions to preferred unitholders (4)
(3,916
)
(3,463
)
Adjusted distributable cash flow after distributions to preferred
unitholders $
12,105
$
42,865
Reconciliation of net cash used in operating activities
to distributable cash flow and adjusted distributable cash
flow: Net cash used in operating activities $
(182,702
)
$
(19,325
)
Net changes in operating assets and liabilities and certain
non-cash items
209,586
75,004
Amortization of deferred financing fees
1,831
1,347
Amortization of routine bank refinancing fees
(1,193
)
(1,138
)
Maintenance capital expenditures
(11,737
)
(9,560
)
Distributable cash flow (2)(3)
15,785
46,328
Loss from equity method investments (1)
1,379
-
Distributable cash flow from equity method investments (1)
(1,143
)
-
Adjusted distributable cash flow
16,021
46,328
Distributions to preferred unitholders (4)
(3,916
)
(3,463
)
Adjusted distributable cash flow after distributions to preferred
unitholders $
12,105
$
42,865
(1) Represents the Partnership's proportionate share of net
loss, EBITDA and distributable cash flow, as applicable, related to
the Partnership's interests in its equity method investments. (2)
As defined by the Partnership's partnership agreement,
distributable cash flow is not adjusted for certain non-cash items,
such as net losses on the sale and disposition of assets and
goodwill and long-lived asset impairment charges. (3) Distributable
cash flow includes a net gain on sale and disposition of assets of
$2.5 million and $2.1 million for the three months ended March 31,
2024 and 2023, respectively. Distributable cash flow for the three
months ended March 31, 2024 includes a $1.4 million loss from the
Partnership's equity method investments. (4) Distributions to
preferred unitholders represent the distributions payable to the
Series A preferred unitholders and the Series B preferred
unitholders earned during the period. Distributions on the Series A
preferred units and the Series B preferred units are cumulative and
payable quarterly in arrears on February 15, May 15, August 15 and
November 15 of each year. On April 15, 2024, all of the
Partnership's Series A preferred units were redeemed and are no
longer outstanding.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240507151919/en/
Gregory B. Hanson Chief Financial Officer Global Partners LP
(781) 894-8800
Sean T. Geary Chief Legal Officer and Secretary Global Partners
LP (781) 894-8800
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