Exhibit 99.1
GLOBAL PARTNERS LP REPORTS RECORD 2006 NET INCOME OF $33.5 MILLION
WALTHAM, Mass., March 15 /PRNewswire-FirstCall/ - Global Partners LP (NYSE:
GLP) today reported net income of $11.1 million, or $0.78 per diluted limited
partner unit, for the three months ended December 31, 2006, and net income of
$33.5 million, or $2.46 per diluted limited partner unit for the full year. Net
income for the comparative periods of 2005 was $9.8 million, or $0.70 per
diluted limited partner unit, for the fourth quarter and $18.1 million for the
twelve-month period. There is no year-over-year per unit comparison because
Global Partners' common units did not begin trading until September 30, 2005.
"We capped 2006 with record fourth-quarter and annual earnings that
highlight the success of our three-pronged strategy: organic growth, bolt-on and
step-out acquisitions," said President and Chief Executive Officer Eric Slifka.
"Global successfully executed on its grass roots transportation-based fuel
initiatives, purchased a waterborne terminal in Bridgeport, Connecticut, and
acquired a pipeline terminal in Macungie, Pennsylvania. As evidenced by the
double-digit increase in quarterly and full-year net income, we continue to
transition to higher-margin products, diversify the types of fuels we sell and
effectively manage weather sensitivity in our business."
Financial Results for the Three Months Ended December 31, 2006 and 2005
Adjusted net income per diluted limited partner unit was $0.97 for the fourth
quarter of 2006, compared with $0.82 for the same period in 2005. 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." Please refer to Financial Reconciliations
included in this news release for a reconciliation of net income per diluted
limited partner unit to adjusted net income per diluted limited partner unit for
the three months ended December 31, 2006 and 2005.
Earnings before interest, taxes, depreciation and amortization ("EBITDA")
for the three months ended December 31, 2006 increased approximately 18% to
$17.3 million from $14.7 million for the same period in 2005. EBITDA is a
non-GAAP financial measure 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 net income to EBITDA and cash flow
from operating activities to EBITDA for the three months ended December 31, 2006
and 2005.
Distributable cash flow for the fourth quarter of 2006 was $11.5 million,
compared with $10.2 million for the same period of 2005. Distributable cash flow
is a non-GAAP financial measure 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 net income to distributable cash
flow and cash flow from operating activities to distributable cash flow for the
three months ended December 31, 2006 and 2005.
Sales for the three months ended December 31, 2006 declined 15% to $1.1
billion from $1.3 billion in the same period of 2005 as a result of lower
commodity prices and significantly warmer temperatures in the fourth quarter of
2006. Wholesale segment sales were $996.1 million in the fourth quarter of 2006,
compared with $1.1 billion for the same period in 2005. Commercial segment sales
decreased to $98.1 million in the fourth quarter of 2006 from $140.9 million for
the same period in 2005. For the three months ended December 31, 2006, Global
Partners reported combined gross profit of $34.6 million, compared with $29.9
million in the same period of 2005.
In January 2007, the Partnership declared a cash distribution of $0.4550 per
unit for the period from October 1, 2006 through December 31, 2006 ($1.82 per
unit on an annualized basis). The distribution represents an increase of 2.2%
over the third-quarter distribution of $0.4450 per unit and an increase of 7.1%
for 2006. The total distribution of $5.2 million was paid February 14, 2007 to
unitholders of record as of the close of business February 5, 2007.
Financial Results for the Twelve Months Ended December 31, 2006 and 2005
On an adjusted basis, net income per diluted limited partner unit was $2.91 for
the twelve months ended December 31, 2006. There is no year-over-year per unit
comparison because Global Partners' common units did not begin trading until
September 30, 2005.
Sales for the twelve months ended December 31, 2006 increased 12% to $4.5
billion compared with $4.0 billion for the same period in 2005. The increase was
attributable to higher commodity prices throughout most of 2006 as well as to
the acquisition of refined products terminals in Bridgeport, Connecticut and
Macungie, Pennsylvania. Sales in the Wholesale segment rose 13% to $4.1 billion
in 2006 from $3.6 billion in the same period of 2005. Sales in the Commercial
segment declined 5% to $400.8 million in 2006 from $423.0 million in 2005.
Combined gross profit for the twelve months ended December 31, 2006 was $113.2
million, an increase of 23% from $91.7 million for the same period in 2005.
EBITDA for the twelve months of 2006 was $51.5 million, compared with $33.5
million for the same period in 2005. Please refer to Financial Reconciliations
included in this news release for reconciliations of net income to EBITDA and
cash flow from operating activities to EBITDA for the twelve months ended
December 31, 2006 and 2005.
Distributable cash flow for the twelve months ended December 31, 2006 was
$36.0 million. There is no year-over-year distributable cash flow comparison
because Global Partners' common units did not begin trading until September 30,
2005. Please refer to Financial Reconciliations included in this news release
for reconciliations of net income to distributable cash flow and cash flow from
operating activities to distributable cash flow for the twelve months ended
December 31, 2006.
"In the quarters ahead, we will remain focused on further expanding our
business through organic growth and strategic acquisitions," Slifka said. "Our
new Bridgeport and Macungie terminals are performing well, and we will continue
to pursue additional strategic opportunities that enable us to use our expertise
in supply, marketing and logistics to optimize the value of our terminal
network."
Financial Results Conference Call
Management will review Global Partners' fourth-quarter and year-end 2006
financial results in a teleconference call for analysts and investors at 10:00
a.m. ET today.
Dial-in numbers: (800) 361-0912 (U.S. and Canada)
(913) 981-5559 (International)
Five-day replay: (888) 203-1112 (U.S. and Canada)
(719) 457-0820 (International)
Conference code: 1745750 (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 is used as a supplemental financial measure 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; 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 GAAP. EBITDA 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 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 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 or any other indicator of the Partnership's
performance required by 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, 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 Quarterly Report on Form 10-Q
for the quarter ended September 30, 2006, and its 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 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/COMBINED STATEMENTS OF INCOME
(In thousands, except for per unit data)
(Unaudited)
SUCCESSOR PREDECESSOR(1)(3) SUCCESSOR PREDECESSOR(1)(3)
THREE MONTHS ENDED TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
-------------------------------- -------------------------------
2006 2005 2006 2005
Consolidated Combined Consolidated Combined
------------ ----------------- ------------ ----------------
Sales $ 1,094,208 $ 1,275,729 $ 4,472,418 $ 4,045,858
Cost of sales 1,059,564 1,245,841 4,359,192 3,954,141
------------ ----------------- ------------ ----------------
Gross profit 34,644 29,888 113,226 91,717
Operating expenses:
Selling, general and administrative
expenses 12,755 11,021 43,027 40,448
Operating expenses 6,005 5,081 22,158 19,698
Amortization expenses 358 406 1,528 1,623
------------ ----------------- ------------ ----------------
Total operating expenses 19,118 16,508 66,713 61,769
Operating income 15,526 13,380 46,513 29,948
Interest expense (4,381) (2,792) (11,901) (9,961)
Other income (expense), net 515 150 515 (900)
------------ ----------------- ------------ ----------------
Income before income tax expense 11,660 10,738 35,127 19,087
Income tax expense (601) (986) (1,666) (986)
------------ ----------------- ------------ ----------------
Net income (loss) $ 11,059 $ 9,752 $ 33,461 $ 18,101
================
Less:
General partner's interest in net income (220) (188) (669)
------------ ----------------- ------------
Limited partners' interest in net income $ 10,839 $ 9,564 $ 32,792
============ ================= ============
Net income per limited partner unit,
basic and diluted(2)(3) $ 0.78 $ 0.70 $ 2.46
============ ================= ============
Weighted average limited partners' units
outstanding, basic and diluted 11,285 11,285 11,285
============ ================= ============
(1) Includes Successor's results for the period October 4, 2005 through
December 31, 2005. Combined results for the three and twelve months ended
December 31, 2005 is a non-GAAP financial measure presented to provide
additional information for comparing year-over-year information.
(2) Under the provisions of EITF 03-06, net income per limited partner unit for
the three and twelve months ended December 31, 2006 and for the period
October 4, 2005 through December 31, 2005 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 for the three and twelve months ended December 31, 2006 and for the
period October 4, 2005 through December 31, 2005.
(3) See Financial Reconciliations, Table #1.
GLOBAL PARTNERS LP
CONSOLIDATED BALANCE SHEET
(In thousands)
(Unaudited)
DECEMBER 31, DECEMBER 31,
2006 2005
------------ ------------
ASSETS
Current assets:
Cash and cash equivalents $ 3,861 $ 1,769
Accounts receivable, net 202,580 237,861
Accounts receivable - affiliates 1,988 2,005
Inventories 288,067 260,714
Available for sale securities 13,913 -
Brokerage margin deposits 625 9,210
Fair value of forward fixed contracts 66,115 -
Prepaid expenses and other current assets 18,924 7,781
------------ ------------
Total current assets 596,073 519,340
Property and equipment, net 31,657 21,975
Intangible assets, net 9,076 10,603
Other assets 2,081 2,838
------------ ------------
Total assets $ 638,887 $ 554,756
============ ============
LIABILITIES AND PARTNERS' EQUITY
Current liabilities:
Accounts payable $ 222,034 $ 259,463
Revolving line of credit - current portion 188,700 95,800
Notes payable, other - current portion 319 297
Accrued expenses and other current liabilities 35,573 28,615
Income taxes payable 1,164 1,200
Obligations on forward fixed contracts and other derivatives - 1,038
------------ ------------
Total current liabilities 447,790 386,413
Long-term liabilities:
Revolving line of credit - less current portion 82,000 85,800
Notes payable, other - less current portion 1,239 1,559
Accrued pension benefit cost 3,170 3,187
Deferred compensation 1,429 1,236
Other long-term liabilities 20 253
------------ ------------
Total long-term liabilities 87,858 92,035
Partners' equity 103,239 76,308
------------ ------------
Total liabilities and partners' equity $ 638,887 $ 554,756
============ ============
GLOBAL PARTNERS LP
FINANCIAL RECONCILIATIONS
(In thousands, except per unit data)
(Unaudited)
SUCCESSOR PREDECESSOR COMBINED SUCCESSOR PREDECESSOR COMBINED
OCTOBER 4 OCTOBER 1 THREE MONTHS OCTOBER 4 JANUARY 1 TWELVE MONTHS
THROUGH THROUGH ENDED THROUGH THROUGH ENDED
DECEMBER 31, OCTOBER 3, DECEMBER 31, DECEMBER 31, OCTOBER 3, DECEMBER 31,
2005 2005 2005 2005 2005 2005
------------ ------------ ------------ ------------ ------------ --------------
TABLE 1 - RECONCILIATION OF SUCCESSOR AND
PREDECESSOR STATEMENTS OF INCOME TO
COMBINED STATEMENT OF INCOME
- --------------------------------------------
Sales $ 1,248,899 $ 26,830 $ 1,275,729 $ 1,248,899 $ 2,796,959 $ 4,045,858
Cost of sales 1,219,991 25,850 1,245,841 1,219,991 2,734,150 3,954,141
------------ ------------ ------------ ------------ ------------ --------------
Gross profit 28,908 980 29,888 28,908 62,809 91,717
Operating expenses:
Selling, general and administrative
expenses 10,515 506 11,021 10,515 29,932 40,447
Operating expenses 4,924 157 5,081 4,924 14,775 19,699
Amortization expenses 389 17 406 389 1,234 1,623
------------ ------------ ------------ ------------ ------------ --------------
Total operating expenses 15,828 680 16,508 15,828 45,941 61,769
Operating income 13,080 300 13,380 13,080 16,868 29,948
Interest expense (2,686) (106) (2,792) (2,686) (7,275) (9,961)
Other income (expense), net - 150 150 - (900) (900)
------------ ------------ ------------ ------------ ------------ --------------
Income before income tax expense 10,394 344 10,738 10,394 8,693 19,087
Income tax expense (986) - (986) (986) - (986)
------------ ------------ ------------ ------------ ------------ --------------
Net income (loss) $ 9,408 $ 344 $ 9,752 $ 9,408 $ 8,693 $ 18,101
============ ============ ============ ============ ============ ==============
GLOBAL PARTNERS LP
FINANCIAL RECONCILIATIONS
(In thousands, except per unit data)
(Unaudited)
THREE MONTHS ENDED TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
-------------------- --------------------
2006 2005(1) 2006 2005(1)
-------- -------- -------- --------
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 $ 0.78 $ 0.70 $ 2.46
Dilutive impact of theoretical distribution
of earnings 0.19 0.12 0.45
-------- -------- --------
Adjusted net income per diluted limited
partner unit $ 0.97 $ 0.82 $ 2.91
======== ======== ========
TABLE 3 - RECONCILIATION OF NET INCOME TO
EBITDA
- --------------------------------------------
Net income $ 11,059 $ 9,752 $ 33,461 $ 18,101
Depreciation and amortization 1,226 1,211 4,513 4,487
Interest expense 4,381 2,792 11,901 9,961
Income tax expense 601 986 1,666 986
-------- -------- -------- --------
EBITDA $ 17,267 $ 14,741 $ 51,541 $ 33,535
======== ======== ======== ========
TABLE 4 - RECONCILIATION OF CASH FLOW FROM
OPERATING ACTIVITIES TO EBITDA
- --------------------------------------------
Cash flow from operating activities $ (2,597) $(25,976) $(54,479) $(28,352)
Increase in operating assets and liabilities 14,882 36,939 92,453 50,940
Interest expense 4,381 2,792 11,901 9,961
Income tax expense 601 986 1,666 986
-------- -------- -------- --------
EBITDA $ 17,267 $ 14,741 $ 51,541 $ 33,535
======== ======== ======== ========
TABLE 5 - RECONCILIATION OF NET INCOME TO
DISTRIBUTABLE CASH FLOW
- --------------------------------------------
Net income $ 11,059 $ 9,752 $ 33,461
Depreciation and amortization 1,226 1,211 4,513
Maintenance capital expenditures (764) (760) (1,971)
-------- -------- --------
Distributable cash flow $ 11,521 $ 10,203 $ 36,003
======== ======== ========
TABLE 6 - RECONCILIATION OF CASH FLOW FROM
OPERATING ACTIVITIES TO DISTRIBUTABLE
CASH FLOW
- --------------------------------------------
Cash flow from operating activities $ (2,597) $(25,976) $(54,479)
Increase in operating assets and liabilities 14,882 36,939 92,453
Maintenance capital expenditures (764) (760) (1,971)
-------- -------- --------
Distributable cash flow $ 11,521 $ 10,203 $ 36,003
======== ======== ========
(1) On October 4, 2005, the Partnership completed its initial public offering.
Accordingly, net income per diluted limiter partner unit and distributable
cash flow are presented for the period October 4, 2005 through December 31,
2005.
Contacts:
Thomas J. Hollister Edward J. Faneuil
Chief Operating Officer and Executive Vice President,
Chief Financial Officer General Counsel and Secretary
Global Partners LP Global Partners LP
(781) 894-8800 (781) 894-8800