Exhibit 99.1
GLOBAL PARTNERS LP REPORTS FINANCIAL RESULTS FOR FIRST QUARTER 2006
NET INCOME INCREASES 12%; EBITDA UP 16%
WALTHAM, Mass., May 11 /PRNewswire-FirstCall/ -- Global Partners LP
(NYSE: GLP), one of New England's largest wholesale distributors of distillates,
gasoline and residual oil to wholesalers, retailers and commercial customers,
today announced financial results for the three months ended March 31, 2006.
Financial Results for the Three Months Ended March 31, 2006 and 2005
Net income for the three months ended March 31, 2006 increased approximately
12% to $12.7 million, or $0.85 per diluted limited partner unit, from $11.3
million for the same period in 2005. Adjusted net income per diluted limited
partner unit was $1.10 for the first quarter of 2006. Adjusted net income per
diluted limited partner unit is a non-GAAP (Generally Accepted Accounting
Principles) financial measure explained in greater detail below under "Use of
Non-GAAP Financial Measures" and reconciled to net income per diluted limited
partner unit in the financial tables following this release. The Partnership's
use of adjusted net income per diluted limited partner unit is consistent with
the methodology used by the Partnership to measure its per unit performance.
Earnings before interest, taxes, depreciation and amortization ("EBITDA")
for the three months ended March 31, 2006 increased approximately 16% to $16.8
million from $14.4 million for the same period in 2005. The financial tables
following this release include reconciliations of net income to EBITDA and cash
flows for operating activities to EBITDA for the three months ended March 31,
2006 and 2005. EBITDA is a non-GAAP measure explained in greater detail below
under "Use of Non-GAAP Financial Measures."
Distributable cash flow for the first quarter of 2006 was $12.9 million. The
financial tables following this release include a reconciliation of net income
to distributable cash flow for the three months ended March 31, 2006.
Distributable cash flow is a non-GAAP financial measure explained in greater
detail below under "Use of Non-GAAP Financial Measures."
Driven by an increase in petroleum product prices, sales for the three
months ended March 31, 2006 increased approximately 17% to $1.35 billion from
$1.15 billion in the same period of 2005. Sales in the Wholesale segment
increased approximately 17% to $1.20 billion from $1.03 billion in the first
quarter of 2005. Sales in the Commercial segment increased approximately 23% to
$154.0 million from $125.0 million in the first quarter of 2005.
For the three months ended March 31, 2006, Global Partners reported combined
gross profit of $32.2 million, up approximately 13% from $28.4 million in the
comparable period of 2005. The increase in gross profit is attributable to
higher margins for Global Partners' products.
"Global Partners' strong first-quarter reflects the successful execution of
our key strategic initiatives, including an increased focus on
non-weather-dependent product lines, such as transportation fuels," said
President and Chief Executive Officer Eric Slifka. "In addition, our emphasis on
higher margin products enabled us to deliver an outstanding performance in the
first quarter."
Recent Highlights
-- In a separate news release issued today, Global Partners announced the
appointment of Thomas J. Hollister, 51, former vice chairman of Citizens
Financial Group, Inc., as executive vice president and chief financial
officer, effective July 1. He will succeed current Executive Vice
President and CFO Thomas A. McManmon, Jr., 62, who will transition to the
role of senior advisor to the executive management team.
-- Global Partners successfully completed its acquisition of a refined
petroleum products terminal in Bridgeport, Connecticut. The terminal,
which has a capacity of 109,000 barrels, is expected to complement the
Partnership's distillate coverage in Connecticut and expand its market
share in Southern New England.
-- The Partnership's Board of Directors declared a cash distribution of
$0.425 per unit for the period from January 1, 2006 through March 31,
2006. The distribution is payable May 15 to common and subordinated
unitholders of record as of the close of business May 4.
Financial Results Conference Call
Management will review Global Partners' first-quarter 2006 financial results
in a teleconference call for analysts and investors at 10:00 a.m. ET today.
Dial-in numbers: (888) 349-5690 (U.S. and Canada)
(706) 643-3945 (International)
One-week Replay: (800) 642-1687 (U.S. and Canada)
(706) 645-9291 (International)
Conference ID: 8144998 (Required for live call and replay)
The call also will be audio webcast live and archived on the Global
Partners' website, http://www.globalp.com.
Use of Non-GAAP Financial Measures
Net income per diluted limited partner unit as dictated by Emerging Issues
Task Force 03-06 ("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 Partnership Agreement
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
Partnership in a prudent manner. 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.
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 the general partner's
interest as provided under EITF 03-06, divided by the weighted average number of
outstanding diluted limited partner units during the period.
Global Partners uses EBITDA as a supplemental financial measure 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; its
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. EBITDA is not
calculated or presented in accordance with generally accepted accounting
principles, or GAAP. EBITDA should not be considered an alternative to net
income, operating income, cash flows for operating activities or any other
measure of financial performance or liquidity presented in accordance with GAAP.
EBITDA excludes some, but not all, items that affect net income and operating
income, and these measures may vary among other companies. Therefore, EBITDA 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 flows 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 or any other indicator of the Partnership's
performance required by accounting principles generally accepted in the United
States. In addition, the distributable cash flow of Global Partners may not be
comparable to similarly titled measures of other companies.
GLOBAL PARTNERS LP
Financial Reconciliations Table
(In thousands, except per unit data)
(Unaudited)
Three Months Ended
March 31,
----------------------------
2006 2005
------------ ------------
#1 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 $ 0.85
Dilutive impact of theoretical
distribution of earnings 0.25
Adjusted net income per diluted
limited partner unit $ 1.10
#2 Reconciliation of GAAP net income to
EBITDA
GAAP net income $ 12,688 $ 11,300
Depreciation and amortization 1,072 1,121
Interest expense 2,320 2,026
Income tax expense 680 -
EBITDA $ 16,760 $ 14,447
#3 Reconciliation of cash flows from
operating activities to EBITDA
Cash flow from operating activities $ 56,589 $ 40,775
Decrease in operating assets and
liabilities (42,829) (28,354)
Interest expense 2,320 2,026
Income tax expense 680 -
EBITDA $ 16,760 $ 14,447
#4 Reconciliation of GAAP net income to
distributable cash flow
GAAP net income $ 12,688
Depreciation and amortization 1,072
Capital expenditures (848)
Distributable cash flow $ 12,912
About Global Partners LP
Global Partners, a master limited partnership based in Waltham,
Massachusetts, is one of the largest wholesale distributors of distillates (such
as home heating oil, diesel and kerosene), gasoline and residual oil to
wholesalers, retailers and commercial customers in New England. Global Partners
trades on the New York Stock Exchange under the ticker symbol "GLP." For
additional information, please visit http://www.globalp.com.
Safe Harbor Statement
This news release may contain 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 "may," "believe," "expect," "anticipate," "estimate,"
"continue" or other similar words. Such statements may discuss future
expectations for or contain projections of results of operations, financial
condition or our ability to make distributions to unit holders or state other
"forward-looking" information. Forward-looking statements are not guarantees of
performance. Although the Partnership 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 our control, which may cause future results to be materially
different from the results stated or implied in this document. Additional
information about risks and uncertainties that could cause actual results to
differ materially from forward-looking statements is contained in Global
Partners' filings with the Securities and Exchange Commission, including its
prospectus as filed on September 29, 2005 pursuant to Rule 424(b) of the
Securities Act of 1933, and Annual Report on Form 10-K for the year ended
December 31, 2005. All forward-looking statements included in this news release
and all subsequent written or oral forward-looking statements attributable to us
or persons acting on our behalf are expressly qualified in their entirety by
these cautionary statements. The forward-looking statements speak only as of the
date made, other than as required by law, and Global Partners 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 BALANCE SHEET
(In thousands)
(Unaudited)
March 31, December 31,
2006 2005
------------ ------------
Assets
Current assets:
Cash and cash equivalents $ 823 $ 1,769
Accounts receivable, net 180,426 237,861
Accounts receivable - affiliates 2,180 2,005
Inventories 150,553 260,714
Brokerage margin deposits 4,769 9,210
Prepaid expenses and other current
assets 6,501 7,781
Total current assets 345,252 519,340
Property and equipment, net 22,233 21,975
Intangible assets, net 10,197 10,603
Other assets 2,673 2,838
Total assets $ 380,355 $ 554,756
Liabilities and partners' equity
Current liabilities:
Accounts payable $ 130,976 $ 259,463
Notes payable, other - current
portion 297 297
Income taxes payable 679 1,200
Accrued expenses and other current
liabilities 23,346 28,615
Obligations on forward fixed price
contracts and other derivatives 5,253 1,038
Total current liabilities 160,551 290,613
Long-term liabilities:
Revolving line of credit 129,700 181,600
Notes payable, other - less current
portion 1,486 1,559
Other long-term liabilities 4,355 4,676
Total long-term liabilities 135,541 187,835
Partners' equity 84,263 76,308
Total liabilities and partners'
equity $ 380,355 $ 554,756
GLOBAL PARTNERS LP
CONDENSED/CONSOLIDATED/COMBINED STATEMENTS OF INCOME
(In thousands, except for per unit data)
(Unaudited)
Successor Predecessor
------------ ------------
Three Months Ended
March 31,
----------------------------
2006 2005
Consolidated Combined
------------ ------------
Sales $ 1,351,023 $ 1,152,079
Cost of sales 1,318,806 1,123,691
Gross profit 32,217 28,388
Selling, general and administrative
expenses 10,572 9,590
Operating expenses 5,551 5,066
Amortization expenses 406 406
Operating income 15,688 13,326
Interest expense 2,320 2,026
Income before income tax expense 13,368 11,300
Income tax expense 680 -
Net income 12,688 $ 11,300
Less:
General partner's interest in net income 254
Limited partners' interest in net income $ 12,434
Net income per limited partner unit,
basic and diluted(1)(2) $ 0.85
Weighted average limited partners'
units outstanding, basic and diluted 11,285
(1) Under the provisions of Emerging Issues Task Force ("EITF") 03-06,
"Participating Securities and the Two-Class Method under FASB Statement No.
128," ("EITF 03-06"), because the Partnership's net income exceeded its
distributions for the three months ended March 31, 2006, net income per
limited partner unit is presented as if all of the earnings for the period
were distributed. Although this theoretical calculation provided by EITF
03-06 does not impact the Partnership's overall net income, it does reduce
the Partnership's net income per limited partner unit for the three months
ended March 31, 2006.
(2) See Schedule #1 on Financial Reconciliations Table
Contacts:
Thomas A. McManmon Jr. Edward J. Faneuil
Executive Vice President and Executive Vice President,
Chief Financial Officer General Counsel and Secretary
Global Partners LP Global Partners LP
(781) 894-8800 (781) 894-8800
SOURCE Global Partners LP
-0- 05/11/2006
/CONTACT: Thomas A. McManmon Jr., Executive Vice President and
Chief Financial Officer, or Edward J. Faneuil, Executive Vice President,
General Counsel and Secretary, both of Global Partners LP, +1-781-894-8800/
/Web site: http://www.globalp.com /
(GLP)