Exhibit 99.1
Global Partners LP Reports Strong Financial Results
for the First Quarter of 2007
WALTHAM, Mass.--(BUSINESS WIRE)--May 10, 2007--Global Partners LP
(NYSE: GLP) today reported net income of $32.9 million, or $1.75 per
diluted limited partner unit for the three months ended March 31,
2007, compared with $12.7 million, or $0.85 per diluted limited
partner unit for the same period in 2006. Net income for the first
quarter of 2007 included one-time gains of $14.1 million from the sale
of the partnership's investment in NYMEX Holdings, Inc. and related
NYMEX seats.
"Global Partners posted another excellent quarter, delivering net
income as adjusted for one-time gains of $18.8 million, up 48%
compared with $12.7 million for the same period in 2006," said
President and Chief Executive Officer Eric Slifka. "Healthy increases
in volumes and net product margins drove our first-quarter results,
aided by temperature differences year-over-year. Transportation fuel
volumes increased, and we continue to be pleased with the momentum of
these products."
Financial Results for the Three Months Ended March 31, 2007 and
2006
Adjusted earnings before interest, taxes, depreciation and
amortization ("Adjusted EBITDA"), which excludes one-time gains, was
$23.9 million, an increase of approximately 42% from $16.8 million in
the comparable period of 2006.
Distributable cash flow for the first quarter of 2007, which as
calculated does not include one-time gains, increased approximately
41% to $19.3 million compared with $13.7 million in the same period of
2006.
Net income as adjusted for one-time gains, adjusted net income per
diluted limited partner unit, EBITDA, Adjusted EBITDA and
distributable cash flow are non-GAAP (Generally Accepted Accounting
Principles) financial measures 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, 2007 and
2006.
Sales for the three months ended March 31, 2007 increased to $1.6
billion from $1.4 billion in the same period of 2006 as a result of
increased volumes, colder year-over-year temperatures and higher
commodity prices. Wholesale segment sales were $1.4 billion in the
first quarter of 2007 compared with $1.2 billion for the same period
in 2006. Commercial segment sales decreased to $132.6 million in the
first quarter of 2007 from $154.0 million for the same period in 2006.
Combined gross profit for the three months ended March 31, 2007
increased approximately 31% to $42.3 million compared with $32.2
million in the same period of 2006.
In April 2007, the Board of Directors of the partnership's general
partner declared a quarterly cash distribution of $0.4650 per unit for
the period from January 1, 2007 through March 31, 2007 ($1.86 per unit
on an annualized basis). The distribution represents an increase of
9.4% over the quarterly distribution of $0.4250 for the same period in
2006 and 2.2% over the most recent quarterly distribution of $0.4550
for the fourth quarter of 2006. The first-quarter 2007 distribution
will be paid May 15, 2007 to unitholders of record as of the close of
business May 4, 2007.
"Our first-quarter results position us for a strong performance in
2007," Slifka said. "Our goal is to put the partnership in a position
to recommend to the Board of Directors quarterly per unit distribution
increases for 2007 with an aim for a per unit distribution in the
fourth quarter of 2007 that would be approximately 7% more than the
per unit distribution paid in the fourth quarter of 2006. Lastly, our
just-completed acquisition of three refined products terminals from
ExxonMobil has greatly increased our storage capacity and affords us
significant expansion opportunities in 2008 and beyond."
Financial Results Conference Call
Management will review Global Partners' first-quarter 2007
financial results in a teleconference call for analysts and investors
at 10:00 a.m. ET today.
Time: 10:00 a.m. ET
Dial-in numbers: (877) 502-9276 (U.S. and Canada)
(913) 981-5591 (International)
Five-day replay: (888) 203-1112 (U.S. and Canada)
(719) 457-0820 (International)
Conference code: 4862831 (Required for replay only)
The call also will be webcast live and archived on the Global
Partners' website, www.globalp.com.
Use of Non-GAAP Financial Measures
Global Partners uses adjusted net income per diluted limited
partner unit to measure its per unit financial performance. Adjusted
net income per diluted limited partner unit, as presented in the table
below, is defined as net income after adding back the theoretical
amount allocated to Global Partners'general partner interest as
provided under Emerging Issues Task Force 03-06 ("EITF 03-06"),
divided by the weighted average number of outstanding diluted limited
partner units during the period. Net income per diluted limited
partner unit as dictated by EITF 03-06 is theoretical and pro forma in
nature and does not reflect the economic probabilities of whether
earnings for an accounting period would or could be distributed to
unitholders. The limited partnership agreement of Global Partners does
not provide for the quarterly distribution of net income; rather, it
provides for the distribution of available cash, which is a
contractually defined term that generally means all cash on hand at
the end of each quarter after establishment of sufficient cash
reserves required to operate the business. Accordingly, the
distributions the partnership has paid historically and will pay in
future periods are not impacted by net income per diluted limited
partner unit as dictated by EITF 03-06.
EBITDA, Adjusted EBITDA and net income as adjusted for one-time
gains are used as supplemental financial measures by management and
external users of the partnership's financial statements to assess
its: 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 and distribution of refined petroleum products
business, without regard to financing methods and capital structure;
and the viability of acquisitions and capital expenditure projects and
the overall rates of return of alternative investment opportunities.
Adjusted EBITDA and net income as adjusted for one-time gains reflect
the exclusion of the $14.1 million gain on investment in the first
quarter of 2007. EBITDA, Adjusted EBITDA and net income as adjusted
for one-time gains are not calculated or presented in accordance with
GAAP. EBITDA, Adjusted EBITDA and net income as adjusted for one-time
gains should not be considered an alternative 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, Adjusted EBITDA and net income as adjusted for one-time gains
exclude some, but not all, items that affect net income, and these
measures may vary among other companies. Therefore, EBITDA, Adjusted
EBITDA and net income as adjusted for one-time gains as presented
below may not be comparable to similarly titled measures of other
companies.
Distributable cash flow also is an important non-GAAP financial
measure for limited partners of Global Partners since it serves as an
indicator of the partnership's success in providing a cash return on
their investment. Specifically, this financial measure indicates to
investors whether or not Global Partners is generating cash flow at a
level that can sustain or support an increase in its quarterly cash
distribution. Distributable cash flow is also a quantitative standard
used by the investment community with respect to publicly traded
partnerships. Distributable cash flow should not be considered as an
alternative to net income, cash flow from operations or any other
measure of financial performance or liquidity presented in accordance
with GAAP. In addition, the distributable cash flow of Global Partners
may not be comparable to similarly titled measures of other companies.
About Global Partners LP
Global Partners LP, a publicly traded master limited partnership
based in Waltham, Massachusetts, owns, controls or has access to one
of the largest terminal networks of refined petroleum products in the
Northeast. The partnership is one of the largest wholesale
distributors of gasoline, distillates (such as home heating oil,
diesel and kerosene) and residual oil to wholesalers, retailers and
commercial customers in the Northeast. Global Partners LP trades on
the New York Stock Exchange under the ticker symbol "GLP." For
additional information, please visit www.globalp.com.
Safe Harbor Statement
This news release contains certain "forward-looking statements"
within the meaning of the federal securities laws. These
forward-looking statements are identified as any statements that do
not relate strictly to historical or current facts and can generally
be identified by the use of forward-looking terminology including
"will," "may," "believe," "expect," "anticipate," "estimate,"
"continue" or other similar words. Such statements may discuss
business prospects, goals, new developments and future expectations or
contain projections of results of operations, financial condition and
Global Partners LP's ability to make distributions to unitholders.
These statements are not guarantees of performance. Although Global
Partners LP believes these forward-looking statements are based on
reasonable assumptions, statements made regarding future results are
subject to a number of assumptions, uncertainties and risks, many of
which are beyond the control of Global Partners LP, which may cause
actual results to be materially different from the forward-looking
statements contained in this news release. For specific risks and
uncertainties that could cause actual results to differ materially
from forward-looking statements, please refer to Global Partners LP's
Annual Report on Form 10-K for the year ended December 31, 2006 and
subsequent filings the partnership makes with the Securities and
Exchange Commission. All forward-looking statements included in this
news release and all subsequent written or oral forward-looking
statements attributable to Global Partners LP or persons acting on its
behalf are expressly qualified in their entirety by these cautionary
statements. The forward-looking statements speak only as of the date
made, and Global Partners LP undertakes no obligation to publicly
update or revise any forward-looking statements, whether as a result
of new information, future events or otherwise.
The financial statements and financial information presented below
reflect the operations of Global Partners LP
GLOBAL PARTNERS LP
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except for per unit data)
(Unaudited)
Three Months Ended
March 31,
-----------------------
2007 2006
---------- ----------
Sales $1,573,176 $1,351,023
Cost of sales 1,530,924 1,318,806
---------- ----------
Gross profit 42,252 32,217
Costs and operating expenses:
Selling, general and administrative expenses 13,406 10,928
Operating expenses 5,890 5,551
Amortization expenses 358 406
---------- ----------
Total costs and operating expenses 19,654 16,885
---------- ----------
Operating income 22,598 15,332
Interest expense (3,316) (2,320)
Other income - 356
Gain on sale of investment 14,118 -
---------- ----------
Income before income tax expense 33,400 13,368
Income tax expense (525) (680)
---------- ----------
Net income $ 32,875 $ 12,688
Less:
General partner's interest in net income (657) (254)
---------- ----------
Limited partners' interest in net income $ 32,218 $ 12,434
========== ==========
Net income per limited partner unit, basic
and diluted(1) $ 1.75 $ 0.85
========== ==========
Weighted average limited partners' units
outstanding,
basic and diluted 11,285 11,285
========== ==========
(1) Under the provisions of EITF 03-06, net income per limited partner
unit for the three months ended March 31, 2007 and 2006 assumes a
theoretical distribution of earnings. Although this theoretical
calculation provided by EITF 03-06 does not impact the Partnership's
overall net income for these periods, it does reduce the
Partnership's net income per limited partner unit.
GLOBAL PARTNERS LP
CONSOLIDATED BALANCE SHEET
(In thousands)
(Unaudited)
March 31, December 31,
2007 2006
--------- ------------
Assets
Current assets:
Cash and cash equivalents $ 1,987 $ 3,861
Accounts receivable, net 238,431 202,580
Accounts receivable - affiliates 1,849 1,988
Inventories 142,308 288,067
Available for sale securities - 13,913
Brokerage margin deposits 1,379 625
Fair value of forward fixed contracts - 66,115
Prepaid expenses and other current assets 9,753 18,924
-------- -----------
Total current assets 395,707 596,073
Property and equipment, net 31,691 31,657
Intangible assets, net 8,718 9,076
Other assets 7,074 2,081
-------- -----------
Total assets $443,190 $ 638,887
======== ===========
Liabilities and partners' equity
Current liabilities:
Accounts payable $172,704 $ 222,034
Revolving line of credit - current portion 53,800 188,700
Notes payable, other - current portion 319 319
Accrued expenses and other current
liabilities 22,355 35,573
Income taxes payable 114 1,164
Obligations on forward fixed contracts and
other derivatives 57 -
-------- -----------
Total current liabilities 249,349 447,790
Revolving line of credit - less current
portion 69,900 82,000
Notes payable, other - less current portion 1,162 1,239
Accrued pension benefit cost 3,431 3,170
Deferred compensation 1,342 1,429
Other long-term liabilities 20 20
-------- -----------
Total liabilities 325,204 535,648
Partners' equity 117,986 103,239
-------- -----------
Total liabilities and partners' equity $443,190 $ 638,887
======== ===========
GLOBAL PARTNERS LP
Financial Reconciliations
(In thousands, except per unit data)
(Unaudited)
Three Months Ended
March 31,
-------------------
2007 2006
--------- --------
Table 1 - Reconciliation of net income to net
income as adjusted for one-time gains
- ---------------------------------------------
Net income $ 32,875 $ 12,688
Gain on sale of investment (14,118) -
--------- --------
Net income as adjusted for one-time gains $ 18,757 $ 12,688
========= ========
Table 2 - Reconciliation of net income per diluted
limited partner unit to adjusted net income per
diluted limited partner unit
- --------------------------------------------------
Net income per diluted limited partner unit under
EITF 03-06 $ 1.75 $ 0.85
Dilutive impact of theoretical distribution of
earnings 1.10 0.25
--------- --------
Adjusted net income per diluted limited partner
unit $ 2.85 $ 1.10
========= ========
Table 3 - Reconciliation of net income to EBITDA
and Adjusted EBITDA
- --------------------------------------------------
Net income $ 32,875 $ 12,688
Depreciation and amortization 1,269 1,072
Interest expense 3,316 2,320
Income tax expense 525 680
--------- --------
EBITDA 37,985 16,760
Gain on sale of investment (14,118) -
--------- --------
Adjusted EBITDA $ 23,867 $ 16,760
========= ========
Table 4 - Reconciliation of cash flow from
operating activities to EBITDA and Adjusted
EBITDA
- --------------------------------------------------
Cash flow from operating activities $ 140,728 $ 56,589
Net change in operating assets and liabilities (106,584) (42,829)
Interest expense 3,316 2,320
Income tax expense 525 680
--------- --------
EBITDA 37,985 16,760
Gain on sale of investment (14,118) -
--------- --------
Adjusted EBITDA $ 23,867 $ 16,760
========= ========
Table 5 - Reconciliation of net income to
distributable cash flow
- --------------------------------------------------
Net income $ 32,875 $ 12,688
Depreciation and amortization 1,269 1,072
Gain on sale of investment (14,118) -
Maintenance capital expenditures (767) (104)
--------- --------
Distributable cash flow $ 19,259 $ 13,656
========= ========
Table 6 - Reconciliation of cash flow from
operating activities to distributable cash flow
- --------------------------------------------------
Cash flow from operating activities $ 140,728 $ 56,589
Net change in operating assets and liabilities (106,584) (42,829)
Gain on sale of investment (14,118) -
Maintenance capital expenditures (767) (104)
--------- --------
Distributable cash flow $ 19,259 $ 13,656
========= ========
CONTACT: Global Partners LP
Thomas J. Hollister, 781-894-8800
Chief Operating Officer and
Chief Financial Officer
or
Edward J. Faneuil, 781-894-8800
Executive Vice President,
General Counsel and Secretary