WHIPPANY, N.J., Nov. 10, 2021 /PRNewswire/ -- Suburban
Propane Partners, L.P. (NYSE:SPH), today announced earnings for its
full year and fourth quarter ended September
25, 2021.
Fiscal Year 2021 Results
Net income for fiscal 2021 was $122.8
million, or $1.96 per Common
Unit, compared to $60.8 million, or
$0.98 per Common Unit, in fiscal
2020.
Adjusted earnings before interest, taxes, depreciation and
amortization (Adjusted EBITDA, as defined and reconciled below)
increased $22.0 million, or 8.7%, to
$275.7 million for fiscal 2021,
compared to $253.7 million in the
prior year.
In announcing these results, President and Chief Executive
Officer Michael A. Stivala said,
"Fiscal 2021 was another outstanding year for Suburban
Propane. The nearly 9% improvement in Adjusted EBITDA
compared to the prior year was driven by a combination of increased
volumes across all customer types, higher unit margins in a
volatile commodity price environment, disciplined expense
management and continued positive momentum in our customer base
growth and retention initiatives. In addition to the strong
earnings, we had a number of significant accomplishments during
fiscal 2021 which are supportive of our long-term strategic growth
plans. Specifically, we utilized excess cash flows to reduce
debt by approximately $88.0 million;
we opportunistically refinanced a portion of our senior debt –
reducing annual interest requirements by $7.0 million and extending weighted average
maturities by 3.5 years; and we continued to make strategic
investments in our minority-owned subsidiary, Oberon Fuels, to
support our collective efforts to commercialize low-carbon,
renewable dimethyl ether ("rDME")."
Mr. Stivala continued, "On the strength of our earnings and cash
flows, we were also pleased to deliver an 8.3% increase in our
annualized distribution rate at the end of the third quarter of
fiscal 2021. Despite the challenging operating environment
over the course of the past eighteen months due to the COVID-19
pandemic, we have maintained our focus on delivering outstanding
service to our customers and local communities, executing our
customer base growth and retention initiatives, accelerating our
debt reduction efforts and investing in renewable energy solutions.
Our business is extremely well positioned, both operationally
and financially, to pursue our long-term strategic
objectives. We are committed to making investments in
innovative renewable energy businesses and technologies as we
continue to build out our renewable energy platform in support of
our Go Green with Suburban
Propane corporate pillar while, at the same time, fostering the
growth of our core propane operations and providing pathways to
support the sustainability goals of our customers."
Retail propane gallons sold in fiscal 2021 of 419.8 million
gallons increased 4.2% compared to the prior year, primarily due to
an increase in weather-related customer demand during the most
critical months of the heating season, an increase in commercial
and industrial demand resulting from the easing of COVID-related
business restrictions and an improving economy, and positive
progress in our customer base growth and retention initiatives.
Average temperatures (as measured by heating degree days) across
all of the Partnership's service territories for fiscal 2021 were
10% warmer than normal and comparable to the prior year. However,
average temperatures during the critical months of December 2020 through February 2021 were 7% cooler than the same period
in the prior year and contributed to an overall increase in
heat-related demand.
Average propane prices (basis Mont
Belvieu, Texas) for fiscal 2021 increased 97.5% compared to
the prior year. Total gross margin for fiscal 2021 of
$803.3 million increased $78.3 million, or 10.8%, compared to the prior
year, primarily due to higher volumes sold and higher unit
margin. Gross margin for fiscal 2021 included a $43.1 million unrealized gain attributable to the
mark-to-market adjustment for derivative instruments used in risk
management activities, compared to a $0.4
million unrealized loss in the prior year. These
non-cash adjustments were excluded from Adjusted EBITDA for both
periods in the table below. Excluding the impact of the
unrealized mark-to-market adjustments, propane unit margin for
fiscal 2021 increased $0.02, or 1.2%,
per gallon compared to the prior year.
Combined operating and general and administrative expenses of
$485.5 million for fiscal 2021
increased 3.8% compared to the prior year, primarily due to higher
volume-related variable operating costs and higher variable
compensation, partially offset by a decrease in accruals for
self-insured liabilities and bad debt expense. Operating
expenses for fiscal 2021 included a $4.3
million charge related to the Partnership's voluntary full
withdrawal from a multi-employer pension plan covering certain
employees, which was excluded from Adjusted
EBITDA.
During fiscal 2021, the Partnership utilized cash flows from
operating activities to repay $87.6
million of debt. As a result of the combination of higher
earnings and lower debt, the Partnership's Consolidated Leverage
Ratio improved to 3.96x for the fiscal year ended September 25, 2021.
Fourth Quarter 2021 Results
Consistent with the seasonal nature of the propane business, the
Partnership typically reports a net loss for its fiscal fourth
quarter. Net loss for the fourth quarter of fiscal 2021 was
$16.4 million, or $0.26 per Common Unit, compared to a net loss of
$41.2 million, or $0.66 per Common Unit, in fiscal 2020.
Adjusted EBITDA for the fourth quarter of fiscal 2021 amounted to
$0.3 million, compared to
$5.5 million in the fourth quarter of
fiscal 2020. Retail propane gallons sold of 62.3 million gallons
for the fourth quarter of fiscal 2021 increased 1.8% compared to
the prior year fourth quarter.
As previously announced on October 21,
2021, the Partnership's Board of Supervisors declared a
quarterly distribution of $0.325 per
Common Unit for the three months ended September 25, 2021. On an annualized basis,
this distribution rate equates to $1.30 per Common Unit. The distribution was paid
on November 9, 2021 to Common
Unitholders of record as of November 2,
2021.
About Suburban Propane Partners, L.P.
Suburban Propane
Partners, L.P. ("Suburban Propane") is a publicly traded master
limited partnership listed on the New York Stock Exchange.
Headquartered in Whippany, New
Jersey, Suburban Propane has been in the customer service
business since 1928 and is a nationwide distributor of propane,
renewable propane, fuel oil and related products and services, as
well as a marketer of natural gas and electricity and an investor
in low carbon fuel alternatives, servicing the energy needs of
approximately 1 million residential, commercial, governmental,
industrial and agricultural customers through approximately 700
locations across 41 states. Suburban Propane is supported by
three core pillars: (1) Suburban Commitment – showcasing Suburban
Propane's 90+ year legacy, and ongoing commitment to the highest
standards for dependability, flexibility, and reliability that
underscores Suburban Propane's commitment to excellence in customer
service; (2) SuburbanCares – highlighting continued dedication to
giving back to local communities across Suburban Propane's national
footprint and (3) Go Green with
Suburban Propane - promoting the clean burning and versatile nature
of propane and renewable propane as a bridge to a green energy
future and developing the next generation of renewable
energy. For additional information on Suburban Propane,
please visit www.suburbanpropane.com.
Forward-Looking Statements
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;
- The impact of the COVID-19 pandemic and the corresponding
government response, including the impact across the Partnership's
businesses on demand and operations, as well as on the operations
of the Partnership's suppliers, customers and other business
partners, and the effectiveness of the Partnership's actions taken
in response to these risks;
- 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 sold 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, including the economic
instability resulting from natural disasters such as pandemics,
including the COVID-19 pandemic;
- 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 ability of the Partnership to continue to combat
cybersecurity threats to our networks and information
technology;
- 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, 2020
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 Twelve Months Ended September 25, 2021 and
September 26, 2020
(in thousands, except per unit amounts)
(unaudited)
|
|
|
|
Three Months
Ended
|
|
|
Twelve Months
Ended
|
|
|
|
September 25,
2021
|
|
|
September 26,
2020
|
|
|
September 25,
2021
|
|
|
September 26,
2020
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Propane
|
|
$
|
181,816
|
|
|
$
|
142,983
|
|
|
$
|
1,140,457
|
|
|
$
|
955,143
|
|
Fuel oil and refined
fuels
|
|
|
8,029
|
|
|
|
5,944
|
|
|
|
67,104
|
|
|
|
75,039
|
|
Natural gas and
electricity
|
|
|
6,964
|
|
|
|
6,166
|
|
|
|
30,425
|
|
|
|
31,184
|
|
All other
|
|
|
11,432
|
|
|
|
10,965
|
|
|
|
50,769
|
|
|
|
46,531
|
|
|
|
|
208,241
|
|
|
|
166,058
|
|
|
|
1,288,755
|
|
|
|
1,107,897
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of products
sold
|
|
|
67,476
|
|
|
|
54,544
|
|
|
|
485,478
|
|
|
|
382,951
|
|
Operating
|
|
|
102,207
|
|
|
|
88,408
|
|
|
|
411,390
|
|
|
|
401,958
|
|
General and
administrative
|
|
|
16,230
|
|
|
|
16,119
|
|
|
|
74,096
|
|
|
|
65,927
|
|
Depreciation and
amortization
|
|
|
21,938
|
|
|
|
29,076
|
|
|
|
104,555
|
|
|
|
116,791
|
|
|
|
|
207,851
|
|
|
|
188,147
|
|
|
|
1,075,519
|
|
|
|
967,627
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
|
|
390
|
|
|
|
(22,089)
|
|
|
|
213,236
|
|
|
|
140,270
|
|
Loss on debt
extinguishment
|
|
|
—
|
|
|
|
—
|
|
|
|
16,029
|
|
|
|
109
|
|
Interest expense,
net
|
|
|
15,168
|
|
|
|
18,005
|
|
|
|
68,132
|
|
|
|
74,727
|
|
Other, net
|
|
|
1,427
|
|
|
|
987
|
|
|
|
5,172
|
|
|
|
4,822
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income before
provision for (benefit from)
income taxes
|
|
|
(16,205)
|
|
|
|
(41,081)
|
|
|
|
123,903
|
|
|
|
60,612
|
|
Provision for
(benefit from) income taxes
|
|
|
174
|
|
|
|
107
|
|
|
|
1,110
|
|
|
|
(146)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss)
income
|
|
$
|
(16,379)
|
|
|
$
|
(41,188)
|
|
|
$
|
122,793
|
|
|
$
|
60,758
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income per
Common Unit - basic
|
|
$
|
(0.26)
|
|
|
$
|
(0.66)
|
|
|
$
|
1.96
|
|
|
$
|
0.98
|
|
Weighted average
number of Common Units
outstanding -
basic
|
|
|
62,771
|
|
|
|
62,385
|
|
|
|
62,713
|
|
|
|
62,299
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income per
Common Unit - diluted
|
|
$
|
(0.26)
|
|
|
$
|
(0.66)
|
|
|
$
|
1.94
|
|
|
$
|
0.97
|
|
Weighted average
number of Common Units
outstanding -
diluted
|
|
|
62,771
|
|
|
|
62,385
|
|
|
|
63,313
|
|
|
|
62,727
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental
Information:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA (a)
|
|
$
|
20,901
|
|
|
$
|
6,000
|
|
|
$
|
296,590
|
|
|
$
|
252,130
|
|
Adjusted EBITDA
(a)
|
|
$
|
330
|
|
|
$
|
5,456
|
|
|
$
|
275,680
|
|
|
$
|
253,672
|
|
Retail gallons
sold:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Propane
|
|
|
62,315
|
|
|
|
61,225
|
|
|
|
419,758
|
|
|
|
402,857
|
|
Refined
fuels
|
|
|
2,738
|
|
|
|
2,685
|
|
|
|
24,039
|
|
|
|
26,039
|
|
Capital
expenditures:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Maintenance
|
|
$
|
4,062
|
|
|
$
|
2,739
|
|
|
$
|
14,525
|
|
|
$
|
13,380
|
|
Growth
|
|
$
|
4,034
|
|
|
$
|
3,644
|
|
|
$
|
15,330
|
|
|
$
|
19,118
|
|
|
|
(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 that we
determined is useful 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
|
|
|
Twelve Months
Ended
|
|
|
|
September 25,
2021
|
|
|
September 26,
2020
|
|
|
September 25,
2021
|
|
|
September 26,
2020
|
|
Net (loss)
income
|
|
$
|
(16,379)
|
|
|
$
|
(41,188)
|
|
|
$
|
122,793
|
|
|
$
|
60,758
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for (benefit
from) income taxes
|
|
|
174
|
|
|
|
107
|
|
|
|
1,110
|
|
|
|
(146)
|
|
Interest expense,
net
|
|
|
15,168
|
|
|
|
18,005
|
|
|
|
68,132
|
|
|
|
74,727
|
|
Depreciation and
amortization
|
|
|
21,938
|
|
|
|
29,076
|
|
|
|
104,555
|
|
|
|
116,791
|
|
EBITDA
|
|
|
20,901
|
|
|
|
6,000
|
|
|
|
296,590
|
|
|
|
252,130
|
|
Unrealized non-cash
(gains) losses on changes in
fair value of derivatives
|
|
|
(25,489)
|
|
|
|
(695)
|
|
|
|
(43,121)
|
|
|
|
382
|
|
Loss on debt
extinguishment
|
|
|
—
|
|
|
|
—
|
|
|
|
16,029
|
|
|
|
109
|
|
Multi-employer pension
plan withdrawal charge
|
|
|
4,317
|
|
|
|
—
|
|
|
|
4,317
|
|
|
|
—
|
|
Pension settlement
charge
|
|
|
246
|
|
|
|
151
|
|
|
|
958
|
|
|
|
1,051
|
|
Equity in earnings of
unconsolidated affiliate
|
|
|
355
|
|
|
|
—
|
|
|
|
907
|
|
|
|
—
|
|
Adjusted
EBITDA
|
|
$
|
330
|
|
|
$
|
5,456
|
|
|
$
|
275,680
|
|
|
$
|
253,672
|
|
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
Annual Report on Form 10-K to be filed by the Partnership with the
SEC. Such report, once filed, will be available on the
public EDGAR electronic filing system maintained by the
SEC.
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SOURCE Suburban Propane Partners, L.P.