EXHIBIT 99.1
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NEWS RELEASE
FOR IMMEDIATE RELEASE
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SUBURBAN PROPANE PARTNERS, L.P. ANNOUNCES FOURTH QUARTER AND
FISCAL YEAR RESULTS AND DECLARES QUARTERLY DISTRIBUTION OF
$0.5875 PER COMMON UNIT
WHIPPANY, N.J., OCTOBER 23, 2003 - Suburban Propane Partners, L.P. (NYSE:SPH), a
marketer of propane gas and related products and services nationwide, today
announced its results for the fourth quarter and fiscal year ended September 27,
2003. The Partnership also declared its quarterly distribution of $0.5875 per
Common Unit -- $2.35 per Common Unit annualized.
FOURTH QUARTER 2003 RESULTS
Consistent with the seasonal nature of the propane industry, the Partnership
typically experiences a net loss in the fourth quarter. For the fourth quarter
of fiscal 2003, Suburban's net loss was $21.0 million, or $0.75 per Common Unit,
compared to a net loss of $18.0 million, or $0.71 per Common Unit, for the
fourth quarter of fiscal 2002. Earnings before interest, taxes, depreciation and
amortization ("EBITDA") resulted in a loss of $6.4 million for the fiscal 2003
fourth quarter, compared to a loss of $1.8 million for the prior year quarter.
Retail gallons sold increased 2.3 million gallons, or 3.0%, to 79.0 million
gallons from 76.7 million gallons in the prior year quarter. Revenues of $125.6
million increased $15.9 million, or 14.5%, compared to the prior year quarter.
The increase in revenues is attributable to the combination of higher average
selling prices in line with the significant increase in product costs compared
to the prior year quarter, coupled with the aforementioned increase in retail
sales volumes. Combined operating and general and administrative expenses of
$69.4 million increased $5.9 million, or 9.3%, compared to the prior year
quarter of $63.5 million. The increase was primarily attributable to higher
pension and insurance costs, increased fees for professional services, as well
as higher costs for operating and maintaining our fleet as a result of increased
business activity throughout the fiscal 2003 fourth quarter. Operating expenses
in the fiscal 2003 fourth quarter include a $0.3 million unrealized (non-cash)
loss attributable to the mark-to-market on derivative instruments ("FAS 133"),
compared to a $0.2 million unrealized gain in the prior year quarter
attributable to FAS 133.
Net interest expense decreased 17.8%, or $1.6 million, to $7.4 million, compared
to $9.0 million in the prior year quarter. The decrease in interest expense
reflects the positive steps taken by the Partnership during the fiscal 2003
third quarter to lower its overall leverage, which resulted in an $88.5 million
reduction in total debt.
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FISCAL YEAR 2003 RESULTS
Net income for the fiscal year ended September 27, 2003 was $48.7 million, or
$1.87 per Common Unit, compared to $53.5 million, or $2.12 per Common Unit, in
fiscal 2002. Earnings before interest, taxes, depreciation and amortization
("EBITDA") amounted to $110.0 million compared to $117.9 million in fiscal 2002.
Results for fiscal 2003 include a $2.5 million gain from the sale of nine
customer service centers during the year, compared to a $6.8 million gain from
the sale of a propane storage facility in Hattiesburg, Mississippi recognized
during the prior year. Additionally, fiscal 2003 operating expenses include a
$1.5 million unrealized (non-cash) loss attributable to FAS 133, compared to a
$5.4 million unrealized gain in the prior year attributable to FAS 133.
Fiscal 2003 retail sales volume of 491.5 million gallons increased 35.5 million
gallons, or 7.8%, from 456.0 million gallons in the prior year. The increase in
volume reflects comparatively colder average temperatures during fiscal 2003
compared to the prior year, particularly in the eastern and central regions of
the United States, offset to an extent by warmer temperatures in the west and a
continued sluggish economy. Overall, nationwide average temperatures in fiscal
2003 were just slightly colder than normal compared to 13% warmer than normal
temperatures in the prior year. Revenues increased $106.6 million, or 16.0%, to
$771.7 million, compared to $665.1 million in fiscal 2002. The increase in
revenues is primarily attributable to an increase in average selling prices in
line with significantly higher product costs throughout much of fiscal 2003
compared to the prior year, coupled with the increased sales volumes discussed
above.
Combined operating and general and administrative expenses of $287.4 million
increased $22.5 million, or 8.5%, from $264.9 million in fiscal 2002. In
addition to the $6.9 million impact on operating expenses attributable to FAS
133, discussed above, combined operating and general and administrative expenses
increased $15.6 million compared to the prior year. The increase was primarily
attributable to higher costs associated with increased business activity, such
as employee compensation and benefits, vehicle costs (primarily fuel costs), bad
debt expense, as well as higher pension and insurance costs.
Net interest expense decreased 4.8%, or $1.7 million, to $33.6 million compared
to $35.3 million in the prior year primarily due to the reduction in debt levels
discussed in the fourth quarter analysis above.
During fiscal 2003, the Partnership took several steps to further strengthen its
balance sheet and improve its leverage, highlighted by the successful completion
during the third quarter of a follow-on equity offering of approximately 2.6
million Common Units. The net proceeds from that offering of $72.2 million were
used in combination with strong cash flow from operations to pay down debt of
$88.5 million, bringing the Partnership's total debt to its lowest point since
the initial public offering in 1996. Additionally, during the fiscal 2003 fourth
quarter, the Partnership made a voluntary contribution of $10.0 million to its
defined benefit pension plan, thus improving the funded status of that plan.
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The Partnership also declared its quarterly distribution of $0.5875 per Common
Unit for the three months ended September 27, 2003. The distribution will be
payable on November 10, 2003, to Common Unitholders of record as of November 3,
2003. On an annualized basis, the distribution equates to $2.35 per Common Unit.
In announcing these results, President and Chief Executive Officer Mark A.
Alexander said, "Fiscal 2003 was an outstanding year for the Partnership. Not
only did we achieve another year of excellent operating results and provide
another distribution increase -- our seventh since inception -- we took major
steps to further strengthen our balance sheet and improve our leverage. Looking
forward, we anticipate a slowly improving economy and feel we are well
positioned to provide opportunities for continued growth and value to our
unitholders."
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 approximately 750,000 residential, commercial, industrial and
agricultural customers through more than 320 customer service centers in 40
states.
Company contact: Robert M. Plante
Vice President - Finance
(973) 503-9252
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Suburban Propane Partners, L.P. and Subsidiaries
Consolidated Statements of Operations
For the Three and Twelve Months Ended September 27, 2003 and September
28, 2002 (in thousands, except per unit amounts)
THREE MONTHS ENDED TWELVE MONTHS ENDED
SEPTEMBER SEPTEMBER SEPTEMBER SEPTEMBER
27, 2003 28, 2002 27, 2003 28, 2002
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Revenues
Propane ................................................................. $ 103,735 $ 88,114 $ 680,741 $ 570,280
Other (a) ............................................................... 21,869 21,605 90,938 94,825
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125,604 109,719 771,679 665,105
Costs and expenses
Cost of products sold ................................................... 62,570 48,022 376,783 289,055
Operating ............................................................... 60,487 56,144 250,698 234,140
General and administrative .............................................. 8,957 7,402 36,661 30,771
Depreciation and amortization ........................................... 7,030 6,976 27,520 28,355
Gain on sale of storage facility ........................................ -- -- -- (6,768)
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139,044 118,544 691,662 575,553
(Loss) / income before interest expense and provision
for income taxes ........................................................ (13,440) (8,825) 80,017 89,552
Interest expense, net ..................................................... 7,417 8,952 33,629 35,325
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(Loss) / income before provision for income taxes ......................... (20,857) (17,777) 46,388 54,227
Provision for income taxes ................................................ 99 185 202 703
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(Loss) / income from continuing operations ................................ (20,956) (17,962) 46,186 53,524
Discontinued operations:
Gain on sale of customer service centers ................................ -- -- 2,483 --
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Net (loss) / income ....................................................... $ (20,956) $ (17,962) $ 48,669 $ 53,524
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General Partner's interest in net (loss) / income ......................... $ (562) $ (457) $ 1,193 $ 1,362
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Limited Partners' interest in net (loss) / income ......................... $ (20,394) $ (17,505) $ 47,476 $ 52,162
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(Loss) / income from continuing operations per common unit - basic......... $ (0.75) $ (0.71) $ 1.78 $ 2.12
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Net (loss) / income per common unit - basic ............................... $ (0.75) $ (0.71) $ 1.87 $ 2.12
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Weighted average number of common units outstanding - basic ............... 27,256 24,631 25,359 24,631
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(Loss) / income from continuing operations per common unit - diluted....... $ (0.75) $ (0.71) $ 1.77 $ 2.12
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Net (loss) / income per common unit - diluted ............................. $ (0.75) $ (0.71) $ 1.86 $ 2.12
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Weighted average number of common units outstanding - diluted ............. 27,256 24,631 25,495 24,665
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Supplemental Information:
EBITDA (b) ................................................................ $ (6,410) $ (1,849) $ 110,020 $ 117,907
Retail gallons sold ....................................................... 78,961 76,679 491,451 455,988
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(a) Other revenues principally represent amounts generated from the sales of
appliances, parts and related services.
(b) EBITDA represents income before deducting interest expense, income taxes,
depreciation and amortization. Our management uses EBITDA as a measure of
liquidity and we are including it because we believe that it provides 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. Moreover, our senior note
agreements and our revolving credit agreement require us to use EBITDA in
calculating our leverage and interest coverage ratios. EBITDA is not a
recognized term under generally accepted accounting principles ("GAAP") and
should not be considered as an alternative to net income or net cash
provided by operating activities determined in accordance with GAAP.
Because EBITDA, as determined by us, excludes some, but not all, items that
affect net income, it may not be comparable to EBITDA or similarly titled
measures used by other companies. The following table sets forth (i) our
calculation of EBITDA and (ii) a reconciliation of EBITDA, as so
calculated, to our net cash provided by operating activities:
THREE MONTHS ENDED TWELVE MONTHS ENDED
SEPTEMBER SEPTEMBER SEPTEMBER SEPTEMBER
27, 2003 28, 2002 27, 2003 28, 2002
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Net (loss) / income .................................... $ (20,956) $ (17,962) $ 48,669 $ 53,524
Add:
Provision for income taxes ........................... 99 185 202 703
Interest expense, net ................................ 7,417 8,952 33,629 35,325
Depreciation and amortization ........................ 7,030 6,976 27,520 28,355
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EBITDA ................................................. (6,410) (1,849) 110,020 117,907
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Add / (subtract):
Provision for income taxes ........................... (99) (185) (202) (703)
Interest expense, net ................................ (7,417) (8,952) (33,629) (35,325)
Gain on disposal of property, plant and equipment, net (150) (333) (636) (546)
Gain on sale of customer service centers ............. -- -- (2,483) --
Gain on sale of storage facility ..................... -- -- -- (6,768)
Changes in working capital and other assets
and liabilities .................................... 2,453 14,066 (15,770) (5,790)
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Net cash (used in) / provided by operating activities .. $ (11,623) $ 2,747 $ 57,300 $ 68,775
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Net cash used in investing activities .................. $ (4,328) $ (3,654) $ (4,859) $ (6,851)
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Net cash used in financing activities .................. $ (59,162) $ (14,941) $ (77,631) $ (57,463)
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