Global Partners Reports First-Quarter 2022 Financial Results
Global Partners LP (NYSE: GLP) reported a strong first quarter for 2022, with net income of $30.5 million or $0.76 per diluted unit, reversing a net loss of $4.3 million in Q1 2021. EBITDA rose to $79.8 million from $40.9 million a year ago. Significant growth in product margin was seen across segments, particularly a 33% increase in Gasoline Distribution and Station Operations, driven by recent acquisitions. Total sales jumped to $4.5 billion, compared to $2.6 billion in the prior year. A cash distribution of $0.5950 per unit is scheduled for May 13, 2022.
- Net income increased to $30.5 million from a loss of $4.3 million YoY.
- EBITDA rose to $79.8 million, up from $40.9 million YoY.
- Distributable cash flow reached $49.9 million, compared to $14.0 million YoY.
- Total sales surged to $4.5 billion, a significant increase from $2.6 billion YoY.
- Product margin in Gasoline Distribution increased 33% to $173 million.
- None.
“Volume and margin gains in each segment of our business highlighted a strong first-quarter performance for Global, as we continued to navigate a dynamic and volatile operating environment,” said
“Our strategy to drive growth through M&A and organic investments continues to generate positive results for Global,” Slifka said. “Product margin in our Gasoline Distribution and Station Operations segment increased
Financial Highlights
Net income was
Earnings before interest, taxes, depreciation and amortization (EBITDA) was
Adjusted EBITDA was
Distributable cash flow (DCF) was
EBITDA, Adjusted EBITDA and DCF include a net gain on sale and disposition of assets of
Gross profit in the first quarter of 2022 was
Combined product margin, which is gross profit adjusted for depreciation allocated to cost of sales, was
Combined product margin, EBITDA, Adjusted EBITDA, and 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
GDSO segment product margin was
Wholesale segment product margin was
Commercial segment product margin was
Sales were
Volume in the first quarter of 2022 was 1.5 billion gallons compared with 1.3 billion gallons in the same period of 2021. Wholesale segment volume was 976.8 million gallons in the first quarter of 2022 compared with 885.4 million gallons in the same period of 2021. GDSO volume was 376.5 million gallons in the first quarter of 2022 compared with 334.1 million gallons in the same period of 2021. Commercial segment volume was 116.8 million gallons in the first quarter of 2022 compared with 81.4 million gallons in the same period of 2021.
Recent Developments
-
Global announced a quarterly cash distribution of
$0.59 50$2.38 January 1 to March 31, 2022 . The distribution will be paidMay 13, 2022 to unitholders of record as of the close of business onMay 9, 2022 .
Business Outlook
“We are off to a strong start in 2022,” Slifka concluded. “We continue to identify new opportunities to further drive value through our integrated network and strategically located assets to enhance efficiencies, increase returns to unitholders and deliver an outstanding experience for our customers and guests.”
Financial Results Conference Call
Management will review the Partnership’s first-quarter 2022 financial results in a teleconference call for analysts and investors today.
Time: |
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Dial-in numbers: |
(877) 709-8155 ( |
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(201) 689-8881 (International) |
Due to the expected high demand on our conference call provider, 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.
Use of Non-GAAP Financial Measures
Product Margin
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 and goodwill and long-lived asset impairment charges. 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
Distributable cash flow is an important non-GAAP financial measure for the Partnership’s limited partners since it serves as an indicator of success in providing a cash return on their investment. Distributable cash flow as defined by the Partnership’s 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 our partnership agreement also determines our ability to make cash distributions on our incentive distribution rights. The investment community also uses a distributable cash flow metric similar to the metric used in our partnership agreement with respect to publicly traded partnerships to indicate whether or not such partnerships have generated sufficient earnings on a current or historic level that can sustain distributions on preferred or common units or support an increase in quarterly cash distributions on common units. Our 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.
Distributable cash flow should not be considered as 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, distributable cash flow may not be comparable to distributable cash flow or similarly titled measures of other companies.
About
With approximately 1,700 locations primarily in the Northeast,
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, the impact and duration of the COVID-19 pandemic and its impact on our counterparties, our customers and our operations and other 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
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
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.
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
| (In thousands, except per unit data) | ||||||||
| (Unaudited) | ||||||||
Three Months Ended |
||||||||
|
||||||||
2022 |
|
2021 |
||||||
| Sales | $ | 4,500,538 |
|
$ | 2,553,327 |
|
||
| Cost of sales | 4,294,300 |
|
2,408,295 |
|
||||
| Gross profit | 206,238 |
|
145,032 |
|
||||
| Costs and operating expenses: | ||||||||
| Selling, general and administrative expenses | 56,281 |
|
46,324 |
|
||||
| Operating expenses | 99,233 |
|
80,528 |
|
||||
| Amortization expense | 2,499 |
|
2,723 |
|
||||
| Net gain on sale and disposition of assets | (4,911 |
) |
(475 |
) |
||||
| Total costs and operating expenses | 153,102 |
|
129,100 |
|
||||
| Operating income | 53,136 |
|
15,932 |
|
||||
| Interest expense | (21,474 |
) |
(20,359 |
) |
||||
| Income before income tax (expense) benefit | 31,662 |
|
(4,427 |
) |
||||
| Income tax (expense) benefit | (1,177 |
) |
130 |
|
||||
| Net income (loss) | 30,485 |
|
(4,297 |
) |
||||
| Less: General partner's interest in net income (loss), including | ||||||||
| incentive distribution rights | 1,177 |
|
739 |
|
||||
| Less: Preferred limited partner interest in net income | 3,463 |
|
1,820 |
|
||||
| Net income (loss) attributable to common limited partners | $ | 25,845 |
|
$ | (6,856 |
) |
||
| Basic net income (loss) per common limited partner unit (1) | $ | 0.76 |
|
$ | (0.20 |
) |
||
| Diluted net income (loss) per common limited partner unit (1) | $ | 0.76 |
|
$ | (0.20 |
) |
||
| Basic weighted average common limited partner units outstanding | 33,953 |
|
33,967 |
|
||||
| Diluted weighted average common limited partner units outstanding | 34,085 |
|
34,296 |
|
||||
| (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. |
| CONSOLIDATED BALANCE SHEETS | ||||||
| (In thousands) | ||||||
| (Unaudited) | ||||||
|
|
|
||||
2022 |
|
2021 |
||||
| Assets | ||||||
| Current assets: | ||||||
| Cash and cash equivalents | $ | 10,834 |
$ | 10,849 |
||
| Accounts receivable, net | 526,098 |
411,194 |
||||
| Accounts receivable - affiliates | 2,238 |
1,139 |
||||
| Inventories | 511,905 |
509,517 |
||||
| Brokerage margin deposits | 53,563 |
33,658 |
||||
| Derivative assets | 17,828 |
11,652 |
||||
| Prepaid expenses and other current assets | 77,935 |
87,076 |
||||
| Total current assets | 1,200,401 |
1,065,085 |
||||
| Property and equipment, net | 1,202,867 |
1,099,348 |
||||
| Right of use assets, net | 277,157 |
280,284 |
||||
| Intangible assets, net | 33,207 |
26,014 |
||||
409,424 |
328,135 |
|||||
| Other assets | 30,016 |
32,299 |
||||
- |
||||||
| Total assets | $ | 3,153,072 |
$ | 2,831,165 |
||
| Liabilities and partners' equity | ||||||
| Current liabilities: | ||||||
| Accounts payable | $ | 466,275 |
$ | 353,296 |
||
| Working capital revolving credit facility - current portion | 178,600 |
204,700 |
||||
| Lease liability - current portion | 57,514 |
62,352 |
||||
| Environmental liabilities - current portion | 4,642 |
4,642 |
||||
| Trustee taxes payable | 43,881 |
44,223 |
||||
| Accrued expenses and other current liabilities | 105,013 |
138,733 |
||||
| Derivative liabilities | 52,008 |
31,654 |
||||
| Total current liabilities | 907,933 |
839,600 |
||||
| Working capital revolving credit facility - less current portion | 200,000 |
150,000 |
||||
| Revolving credit facility | 228,000 |
43,400 |
||||
| Senior notes | 739,736 |
739,310 |
||||
| Long-term lease liability - less current portion | 228,702 |
228,203 |
||||
| Environmental liabilities - less current portion | 59,913 |
48,163 |
||||
| Financing obligations | 143,837 |
144,444 |
||||
| Deferred tax liabilities | 57,279 |
56,817 |
||||
| Other long-term liabilities | 55,066 |
53,461 |
||||
| Total liabilities | 2,620,466 |
2,303,398 |
||||
| Partners' equity | 532,606 |
527,767 |
||||
| Total liabilities and partners' equity | $ | 3,153,072 |
$ | 2,831,165 |
||
| FINANCIAL RECONCILIATIONS | ||||||||
| (In thousands) | ||||||||
| (Unaudited) | ||||||||
Three Months Ended |
||||||||
|
||||||||
2022 |
|
2021 |
||||||
| Reconciliation of gross profit to product margin | ||||||||
| Wholesale segment: | ||||||||
| Gasoline and gasoline blendstocks | $ | (2,285 |
) |
$ | 16,405 |
|
||
| Other oils and related products | 53,122 |
|
18,615 |
|
||||
| Crude oil | (3,749 |
) |
(4,527 |
) |
||||
| Total | 47,088 |
|
30,493 |
|
||||
| Gasoline Distribution and Station Operations segment: | ||||||||
| Gasoline distribution | 114,886 |
|
80,252 |
|
||||
| Station operations | 58,097 |
|
50,157 |
|
||||
| Total | 172,983 |
|
130,409 |
|
||||
| Commercial segment | 8,141 |
|
4,190 |
|
||||
| Combined product margin | 228,212 |
|
165,092 |
|
||||
| Depreciation allocated to cost of sales | (21,974 |
) |
(20,060 |
) |
||||
| Gross profit | $ | 206,238 |
|
$ | 145,032 |
|
||
| Reconciliation of net income (loss) to EBITDA and Adjusted EBITDA | ||||||||
| Net income (loss) | $ | 30,485 |
|
$ | (4,297 |
) |
||
| Depreciation and amortization | 26,701 |
|
24,975 |
|
||||
| Interest expense | 21,474 |
|
20,359 |
|
||||
| Income tax expense (benefit) | 1,177 |
|
(130 |
) |
||||
| EBITDA | 79,837 |
|
40,907 |
|
||||
| Net gain on sale and disposition of assets | (4,911 |
) |
(475 |
) |
||||
| Adjusted EBITDA | $ | 74,926 |
|
$ | 40,432 |
|
||
| Reconciliation of net cash provided by (used in) operating activities to EBITDA and Adjusted EBITDA | ||||||||
| Net cash provided by (used in) operating activities | $ | 22,628 |
|
$ | (105,983 |
) |
||
| Net changes in operating assets and liabilities and certain non-cash items | 34,558 |
|
126,661 |
|
||||
| Interest expense | 21,474 |
|
20,359 |
|
||||
| Income tax expense (benefit) | 1,177 |
|
(130 |
) |
||||
| EBITDA | 79,837 |
|
40,907 |
|
||||
| Net gain on sale and disposition of assets | (4,911 |
) |
(475 |
) |
||||
| Adjusted EBITDA | $ | 74,926 |
|
$ | 40,432 |
|
||
| Reconciliation of net income (loss) to distributable cash flow | ||||||||
| Net income (loss) | $ | 30,485 |
|
$ | (4,297 |
) |
||
| Depreciation and amortization | 26,701 |
|
24,975 |
|
||||
| Amortization of deferred financing fees | 1,390 |
|
1,344 |
|
||||
| Amortization of routine bank refinancing fees | (1,181 |
) |
(1,037 |
) |
||||
| Maintenance capital expenditures | (7,518 |
) |
(7,031 |
) |
||||
| Distributable cash flow (1)(2) | 49,877 |
|
13,954 |
|
||||
| Distributions to preferred unitholders (3) | (3,463 |
) |
(1,820 |
) |
||||
| Distributable cash flow after distributions to preferred unitholders | $ | 46,414 |
|
$ | 12,134 |
|
||
| Reconciliation of net cash provided by (used in) operating activities to distributable cash flow | ||||||||
| Net cash provided by (used in) operating activities | $ | 22,628 |
|
$ | (105,983 |
) |
||
| Net changes in operating assets and liabilities and certain non-cash items | 34,558 |
|
126,661 |
|
||||
| Amortization of deferred financing fees | 1,390 |
|
1,344 |
|
||||
| Amortization of routine bank refinancing fees | (1,181 |
) |
(1,037 |
) |
||||
| Maintenance capital expenditures | (7,518 |
) |
(7,031 |
) |
||||
| Distributable cash flow (1)(2) | 49,877 |
|
13,954 |
|
||||
| Distributions to preferred unitholders (3) | (3,463 |
) |
(1,820 |
) |
||||
| Distributable cash flow after distributions to preferred unitholders | $ | 46,414 |
|
$ | 12,134 |
|
||
(1) |
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. | ||||||
(2) |
Distributable cash flow includes a net gain on sale and disposition of assets of |
||||||
(3) |
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 |
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Chief Financial Officer
(781) 894-8800
Chief Legal Officer and Secretary
(781) 894-8800
Source:
FAQ
What were the financial results for GLP in Q1 2022?
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