Exhibit 99.1
Global Partners LP Reports Second Quarter 2007 Financial Results
WALTHAM, Mass.--(BUSINESS WIRE)--Aug. 8, 2007--Global Partners LP
(NYSE: GLP) today reported net income of $0.6 million for the three
months ended June 30, 2007, compared with $3.5 million for the same
period in 2006.
For the six months ended June 30, 2007, net income was $33.5
million compared with $16.2 million for the same period in 2006. Net
income for the first six months of 2007 includes one-time gains of
$14.1 million from the sale of the partnership's investment in NYMEX
Holdings, Inc. and related NYMEX seats.
Commenting on the results for the second quarter of 2007, Global
Partners President and Chief Executive Officer Eric Slifka said, "Our
results in the second quarter were in line with our expectations as
volumes increased 32% due to the expansion of our terminal network. In
addition, a strong performance within wholesale distillates offset
margin weakness in wholesale gasoline."
"On a year-over-year basis, we have added headcount, invested in
our information technology infrastructure and continued to focus on
growth opportunities throughout our marketplace," Slifka said. "In
addition, second-quarter operating expenses increased with the
start-up of the three former ExxonMobil refined products terminals we
acquired in May."
"Our second quarter was highlighted by the successful completion
of our acquisition of three refined products terminals from ExxonMobil
on May 9, enabling us to significantly increase our storage capacity
and expand our presence in the Northeast," Slifka continued. "We are
pleased with how the integration of these new terminals is
proceeding."
Earnings before interest, taxes, depreciation and amortization
(EBITDA) decreased to $5.6 million in the second quarter of 2007 from
$6.6 million in the second quarter of 2006. Adjusted EBITDA, which
excludes the first-quarter one-time gains, was $29.4 million for the
six months ended June 30, 2007 compared with $23.4 million for the
same period in 2006.
Distributable cash flow for the second quarter of 2007 was $1.6
million compared with $4.2 million for the same period in 2006. For
the first six months of 2007, distributable cash flow was $20.8
million compared with $17.8 million in the first half of 2006.
Net income as adjusted for one-time gains, 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 and six
months ended June 30, 2007 and 2006.
Sales for the three months ended June 30, 2007 increased to $1.4
billion from $1.0 billion for the comparable period in 2006 as a
result of increased volumes and higher commodity prices. Wholesale
segment sales were $1.3 billion in the second quarter of 2007 compared
with $950.8 million in the same period in 2006. Commercial segment
sales were $79.9 million in the second quarter of 2007 compared with
$80.6 million in the comparable period of 2006. Combined gross profit
for the three months ended June 30, 2007 increased approximately 5% to
$21.6 million compared with $20.6 million in the same period of 2006.
Sales for the first six months of 2007 increased to $3.0 billion
from $2.4 billion for the first half of 2006. Wholesale segment sales
were $2.7 billion in the first half of 2007 compared with $2.1 billion
in the same period in 2006. Commercial segment sales were $212.5
million in the first half of 2007 compared with $234.6 million in the
comparable period of 2006. Combined gross profit for the six months
ended June 30, 2007 increased approximately 21% to $63.9 million
compared with $52.9 million in the same period of 2006.
Recent Highlights:
-- The partnership increased its quarterly cash distribution to
$0.4725 per unit ($1.89 per unit on an annualized basis) for
the period from April 1, 2007 through June 30, 2007. The
distribution represents an increase of 8.0% over the
distribution of $0.4375 for the same period in 2006 and 1.6%
over the distribution of $0.4650 for the first quarter of
2007.
-- Global Partners signed an agreement to acquire two Long Island
refined products terminals from ExxonMobil. Located in Inwood
and Glenwood Landing, New York, the terminals have a combined
storage capacity of 430,000 barrels.
-- Global Partners completed its acquisition of three refined
products terminals from ExxonMobil. Located in Albany and
Newburgh, New York and Burlington, Vermont, the terminals have
a combined active storage capacity of 1.3 million barrels. In
addition, the partnership plans to seek permits to bring back
into service an additional 926,000 barrels of storage capacity
at these facilities.
"In 2007, we have been successful in strategically expanding our
footprint through the acquisition of high-quality assets that further
position us for long-term success," Slifka concluded. "The ExxonMobil
terminals represent a substantial investment in our next phase of
growth. Over time, we fully expect these investments to generate solid
returns for our unitholders and enable us to capitalize on organic
growth opportunities."
Financial Results Conference Call
Management will review Global Partners' second-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: (800) 263-8506 (U.S. and Canada)
(719) 457-2681 (International)
Five-day replay: (888) 203-1112 (U.S. and Canada)
(719) 457-0820 (International)
Conference code: 4940608 (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
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 for the
six months ended June 30, 2007 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, a FORTUNE
500(R) company, 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
Quarterly Report on Form 10-Q for the three months ended March 31,
2007 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 Six Months Ended
June 30, June 30,
------------------------ ------------------------
2007 2006 2007 2006
----------- ----------- ----------- -----------
Sales $1,384,090 $1,031,353 $2,957,266 $2,382,376
Cost of sales 1,362,468 1,010,709 2,893,392 2,329,515
---------- ---------- ---------- ----------
Gross profit 21,622 20,644 63,874 52,861
Costs and operating
expenses:
Selling, general
and
administrative
expenses 11,458 9,416 24,864 20,344
Operating
expenses 6,310 5,266 12,200 10,817
Amortization
expenses 358 406 716 812
---------- ---------- ---------- ----------
Total costs and
operating
expenses 18,126 15,088 37,780 31,973
---------- ---------- ---------- ----------
Operating income 3,496 5,556 26,094 20,888
Interest expense (2,523) (1,786) (5,839) (4,106)
Other income - - - 356
Gain on sale of
investment - - 14,118 -
---------- ---------- ---------- ----------
Income before
income tax expense 973 3,770 34,373 17,138
Income tax expense (363) (290) (888) (970)
---------- ---------- ---------- ----------
Net income $ 610 $ 3,480 $ 33,485 $ 16,168
========== ========== ========== ==========
Less:
General partner's
interest in net
income(1) (11) (70) (668) (324)
---------- ---------- ---------- ----------
Limited partners'
interest in net
income $ 599 $ 3,410 $ 32,817 $ 15,844
========== ========== ========== ==========
(1) On May 9, 2007, the general partner interest was reduced to 1.73%
as a result of the private placement of Class B units. Calculation
includes the effect of the private placement of Class B units and is
based on a weighted average of 1.83% and 1.99% for the three and six
months ended June 30, 2007, respectively. For the three and six
months ended June 30, 2006, the general partner interest was 2%.
GLOBAL PARTNERS LP
CONSOLIDATED BALANCE SHEET
(In thousands)
(Unaudited)
June 30, December 31,
2007 2006
----------- ------------
Assets
Current assets:
Cash and cash equivalents $ 2,527 $ 3,861
Accounts receivable, net 272,993 202,580
Accounts receivable - affiliates 5,506 1,988
Inventories 239,477 288,067
Available for sale securities - 13,913
Brokerage margin deposits 4,591 625
Fair value of forward fixed contracts 944 66,115
Prepaid expenses and other current assets 10,563 18,924
---------- ----------
Total current assets 536,601 596,073
Property and equipment, net 142,885 31,657
Intangible assets, net 8,360 9,076
Other assets 3,454 2,081
---------- ----------
Total assets $ 691,300 $ 638,887
========== ==========
Liabilities and partners' equity
Current liabilities:
Accounts payable $ 232,898 $ 222,034
Revolving line of credit - current portion 98,100 188,700
Notes payable, other - current portion 319 319
Environmental liabilities - current
portion 500 -
Accrued expenses and other current
liabilities 50,459 35,573
Income taxes payable - 1,164
Obligations on forward fixed contracts and
other derivatives 10,517 -
---------- ----------
Total current liabilities 392,793 447,790
Revolving line of credit - less current
portion 122,000 82,000
Notes payable, other - less current portion 1,083 1,239
Environmental liabilities - less current
portion 7,500 -
Accrued pension benefit cost 3,511 3,170
Deferred compensation 1,388 1,429
Other long-term liabilities 20 20
---------- ----------
Total liabilities 528,295 535,648
Partners' equity 163,005 103,239
---------- ----------
Total liabilities and partners' equity $ 691,300 $ 638,887
========== ==========
GLOBAL PARTNERS LP
Financial Reconciliations
(In thousands, except per unit data)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
------------------- ------------------
2007 2006 2007 2006
--------- --------- --------- --------
Table 1 - Reconciliation of
net income to net income as
adjusted for one-time gains
- ------------------------------
Net income $ 610 $ 3,480 $ 33,485 $16,168
Gain on sale of investment - - (14,118) -
-------- -------- -------- -------
Net income as adjusted for
one-time gains $ 610 $ 3,480 $ 19,367 $16,168
======== ======== ======== =======
Table 2 - Reconciliation of
net income to EBITDA and
Adjusted EBITDA
- ------------------------------
Net income $ 610 $ 3,480 $ 33,485 $16,168
Depreciation and
amortization 2,067 1,088 3,336 2,160
Interest expense 2,523 1,786 5,839 4,106
Income tax expense 363 290 888 970
-------- -------- -------- -------
EBITDA 5,563 6,644 43,548 23,404
Gain on sale of investment - - (14,118) -
-------- -------- -------- -------
Adjusted EBITDA $ 5,563 $ 6,644 $ 29,430 $23,404
======== ======== ======== =======
Table 3 - Reconciliation of
cash flow from operating
activities to EBITDA and
Adjusted EBITDA
- ------------------------------
Cash flow from operating
activities $(39,431) $(44,350) $101,297 $12,239
Net change in operating assets
and liabilities 42,108 48,918 (64,476) 6,089
Interest expense 2,523 1,786 5,839 4,106
Income tax expense 363 290 888 970
-------- -------- -------- -------
EBITDA 5,563 6,644 43,548 23,404
Gain on sale of investment - - (14,118) -
-------- -------- -------- -------
Adjusted EBITDA $ 5,563 $ 6,644 $ 29,430 $23,404
======== ======== ======== =======
Table 4 - Reconciliation of
net income to distributable
cash flow
- ------------------------------
Net income $ 610 $ 3,480 $ 33,485 $16,168
Depreciation and amortization 2,067 1,088 3,336 2,160
Gain on sale of investment - - (14,118) -
Maintenance capital
expenditures (1,100) (411) (1,867) (515)
-------- -------- -------- -------
Distributable cash flow $ 1,577 $ 4,157 $ 20,836 $17,813
======== ======== ======== =======
Table 5 - Reconciliation of
cash flow from operating
activities to distributable
cash flow
- ------------------------------
Cash flow from operating
activities $(39,431) $(44,350) $101,297 $12,239
Net change in operating assets
and liabilities 42,108 48,918 (64,476) 6,089
Gain on sale of investment - - (14,118) -
Maintenance capital
expenditures (1,100) (411) (1,867) (515)
-------- -------- -------- -------
Distributable cash flow $ 1,577 $ 4,157 $ 20,836 $17,813
======== ======== ======== =======
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