SPH - Earnings call transcript Q1 2019 | Suburban Propane Partners, L.P.

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Operator

Ladies and gentlemen, thank you for standing by. And welcome to Suburban Propane's First Quarter Fiscal 2019 Financial Results Conference Call. At this time, all the participant lines are in a listen-only mode. There will be an opportunity for your questions and instructions will be given at that time. [Operator Instructions] As a reminder, today's call is being recorded. to this Section contains Exchange financial XXE XXXX amended, gentlemen, the statements Act condition and business as of future operations. meaning of relating and ladies results conference predictions forward-looking call within of expectations of And and Partnership's and the the Securities and involve These forward-looking uncertainties. statements certain risks to in has partnership results the forward-looking differ earnings from materially of which to viewed which in statements, that can such statements factors website. on The important some as are release, press the referred those its listed actual could cautionary discussed be cause company's All statements are or expressly partnership and such subsequent behalf their persons in written by entirety oral attributable to qualified its cautionary forward-looking acting on statements. the Mr. that With I'll over said, being turn the to conference Treasurer. President Vice D'Ambrosio, Davin and Please go sir. ahead have host gentlemen, moment line. one and ladies And lost our we

reconnect Please will has Harbor host given. We [Technical moment. them ahead. one go The is with Difficulty] gentlemen, Safe Yes. Ladies your reconnected. and been in

Davin D'Ambrosio

you, for you John, call. thank everyone. us earnings fiscal first our this conference Thank quarter joining for XXXX and good morning morning

me Officer. review financial Stivala, along Steve and our Mike with Operating current Executive Officer; the Officer; we morning Financial our our quarter Chief Boyd, morning Mike Chief Joining Chief Kuglin, and Officer for outlook business. Chief President our and are first will This this Accounting the results

As usual, questions. open once to we've concluded session our will prepared remarks, the we

Partnership factors. the call. SEC. be the for contains statements XX-K by and the December Certain be Copies risk ended ended for today, measures of year by Form XXXX, the the XX-Q on be will obtained regarding business additional discussed on non-GAAP fiscal which September report this may forward-looking contacting annual period end filed Our and or our XX, disclosure XXXX will XX,

to those this to furnished We a of X-K SEC we description useful, why a of this believe discussion which be in was information Form the morning. measures, as our have as well provided

Stivala at website Investor call in will turn our section I would like Mike? for point, opening Form to Relations a of suburbanpropane.com. remarks. through be to At link some available the Mike the this X-K over

Michael Stivala

all Good for Thanks, brief while Davin. us few for that out us minutes. we thank you joining your morning. Thank today. patience had knocked a a you power for outage And

with So you bearing for us here. thank

categorized by of a Contrast has first of the year positive the adjusted the The fiscal by line quarter pleased XXXX quarter burst December, were December. momentum fiscal month in prior was from month performance colder the the varied prior carried last. this has than warmer XXXX So normal the during EBITDA quarterly to this greatest consistent temperatures pattern first essentially was weather-driven with temperatures in in the into year temperatures of with we to fiscal another XXXX significantly concentrated level customer inspired and typically the solid different in month is compared with the when earnings majority of to on year first colder of quarter. quarter report the The which first of the demand. that were impact weather early quarter the

initiatives. customer warmer managing sold our to the outstanding ends on and of and personnel and headwind our XXXX our communities customers slight a growth first volume the the base delivering and service do While to fiscal we was job excellent on continue executing expenses serve, an operations retention quarter margins

million EBITDA essentially year. was As prior to despite remarks. come some back slightly the I a moment lower of volumes for closing $XX.X flat such adjusted In will

call Mike like turn to detail. I'd Kuglin Mike? our at more to the this point over results quarter discuss first However to in

Michael Kuglin

and good Mike Thanks, morning everyone.

of results, as erratic another unrealized prior activities year. of first solid reporting, of of derivative with to the the first December. I million in resulted unrealized market fiscal the $X.X loss quarter weather million remarks consistent in To quarter despite for warm his quarter management impact $XX.X on in instruments and opening used month temperatures loss which be indicated mark excluding an As pattern reported the an and XXXX, risk discuss previous adjustments in Mike unrealized our was we in the

Additionally net the propane a for operations included quarter on of loss fiscal income XXXX certain and within the non-strategic the $X.X sale of first segment. million assets

or and first sale adjustments year. fiscal on EBITDA the income X.X% quarter year. non-cash the at the prior of gallons in the of Retail to was quarter $XX.X Adjusted compared prior Excluding common million on million fiscal which for sold to was $XX.X the prior is XXX.X decreased unit the assets, of year. to flat derivative million XXXX first net propane loss $X.XX the flat of per essentially XXXX compared also gallons instruments

As considerably the Mike were negatively somewhat impacted propane of in than by warmer temperatures December. volumes mentioned, the month normal

lower rather quarter. XX% the were with of at degree first equates fiscal the of $X.XX of December than than first to significant to Belvieu propane index an per at overall quarter of customer margins two the quarter. prior From quarter from to first quarter beginning quarter. price per cooler wholesale and heating for propane a in first the of perspective, $X.XX period reported the during year, the the months average during colder a most primarily the year has end decline Generally the for per the than the sell-off Overall propane prices of month taking decreased fourth gallon on Total to prior than commodity XXXX. place slightly the in That quarter prior impact the lower experienced wholesale quarter higher colder Wholesale day prices gross prior the XX% demand warmer was X% unit less fiscal decline part first X% and weather gallon While was was early quarter the the sudden a the a than million the than which the of December. $X.X the prices speaking, as XXXX and year first basis warmer weather compared for $XXX,XXX of normal. gallon $XXX.X increased XX% due margins. quarter dramatic X% in during year, of Mont

The impact mentioned the for gallon unit due million increased Combined adjustments, non-cash interest per expense fiscal the million, quarter costs. rates of to to expenses than which credit $X maintenance modest included XXXX revolving CapEx. decrease higher fuel X% or of lower compared million was of $X.X to first borrowings to compared spending prior Excluding benchmark operating that compared earlier, essentially prior G&A the lower $XXX,XXX propane under margins of prior vehicle primarily a Total year. quarter was capital increased $X.XXX their due I a million flat Net of $X.X the growth for capital level prior our interest year of primarily to outstanding and impact year. a the in offset by maintenance in year, higher the $XX.X was approximately the mark-to-market facility.

of Turning million capital incremental to with sheet, during under of net our revolver. $XX.X a the our borrowings balance our first working funded we needs portion quarter

yet the quarter Our the capital prices ended higher end than inventory. than working X.X year we requirement receivables of prior wholesale needs slightly well ratio our our times. borrowings $X result the result first a incremental X.XX first of quarter At a on as covenant of XXXX, the during on and of within times of lower impact were and as fiscal capital lower million return the where leverage incremental debt was borrowings, working

borrowings heating capital our begin we towards revolver. to end working February March the expect the timeframe. on peak Our which, or outstanding reducing typically needs of season early late After

requirements We have more capacity to than Back strategic working you initiatives. under capital borrowing our revolve ample to and expected our Mike. growth fund

Michael Stivala

thanks, Mike. Great

announced first common quarter equates in XX, quarterly distribution to of our of annualized of our per our As declared on supervisors common fiscal Board XXXX. January $X.XX respect an rate of per unit. $X.XX unit of That

our February unitholders will X. be of record quarterly of February on Our paid as distribution to XX,

continues and we a supports initiatives. feel that long is strong overall below Our distributable leverage at goal metrics focused our and the provides X.XX before level a event based plenty times, remain the term we times event of a XX on growth reducing cash remain as to bringing cushion have on trailing of weather month also to level four And in warm of distribution stated debt we future flow. coverage our which

Looking of some past season there amount [ph] heating some with that off weeks. warm in started is of cold couple January of over while still experienced we the portions the spells a unsimilar December, weather fair country and significant front ahead, well-publicized extreme have in of unseasonally us experienced the

Additionally, commodity both prices favorable business. average experienced approximately a the have generally the which prices level XX% is quarter for our below that is in the first and stabilized consumer at

in our does for that the period. to positioned cold meet we well always As recent extremely as extended adapt the customers not of as are to the snap needs an remain well event

strategic the to front, through pursue acquisitions. continue and growth strategic On we market new expansion

in week, acquisition This that this efforts accelerate propane market. new earlier growth we fact opportunity efforts good previously we market the that owned an that very well-run our of expansion business area the had as Suburban. in complements business help coast, west In some a growth on identified family a for of acquisition completed our a will

continuing to our and of initiatives retention seasonality also helps in based smooth make many opportunities which some great our to instances out We volumes, on and provides growth progress are grow in the customer volumes.

appreciate Suburban now you thank take open that for serve. of if your all the more up support to morning. we And this unwavering attention Propane the X,XXX and call focus we'd to mind helping always the Finally, of their communities like safety our And I'd comfort And like as us the to the with on employees time for and John, questions. please? customers of wouldn't we than and

Operator

with ahead. the line go JPMorgan. Jeremy And first of Instructions] [Operator Certainly. Tonet Please from

Unidentified Analyst

Hey, good Jeremy. morning, for Charles [ph] in guys. It's

you of there, some also the of get here. things? you like kind kick pretty trends cold sufficient these how side share in start snaps favorable having of curious of you if of XXXX kind color about inventory managing cost talk more kind Kind could if impact terms and that Sounds any of but

Michael Stivala

get our making we've region. with great, of weather And with Obviously need have any to that sure scenarios vendors, times sure we're of our no when it. the these that meet plenty Yeah, in adequately making where past capacity to many Charlie. needs extreme problem have proven we have customers the supplied product we in we we

it builds whatsoever. lower a a trouble any on experienced than are From good for the heating opening not they season. the consumer. in have generally price year mentioned environment pricing I is my perspective, percentage in last basis we So lower the were remarks, Their

So it's good them. also thing good us. for And a that's thing a for

it last needs, this You our lower in are working year year. over capital see

is for that So consumer. for the the positive all business and

right Midwest the and kind through the year, events we've the get the some but two past for as country. with did the [ph] support Customer start. that certainly in from this that that in the weeks, gotten January weather of or a excellent particularly significant some weather, week far volume. the Coast Midwest below provided have East demand significantly started As that didn't of flowed three tremendous so in last significantly until portions January. weather And it in were slow normal days before with spiked

of cold the of So volume into customer but spell, we significantly. soon up week we've pick carried and December gotten the in momentum the as January, two seen lack the this of as some or that had first demand out we've coming

right your first to from meet pretty the bit in question answer now future second -- we're be And terms a the to very outlook. needs in coaster to I the So been described first weather quarter way a of first your outlook we prepared supply a said the as weather, roller foreseeable well of customers. perspective just for but quarter, continues favorable our my to of the has

Unidentified Analyst

That's great.

looking about a I and obviously think the what of go potential wanted after does entities XXXX, about evaluating Curious concern. like look leverage -- to how the do of guess, acquisition. to to how is at Lastly, ask and about go you those you kind recent I kind

that there priorities leveraging growth and opportunities future you the So grow curious balance to business? between how

Michael Stivala

leverage categorize categorize as targets goal. first concern. our I of would as a Yeah, a wouldn't I all, leverage

that's good peak feel of given, that's are and think is borrowings, where levered very about -- year. at taken in this of capital in got time we X.X in our which steps its working the business. I the that sort we with We're we've around times

million look at then. December, but end we at are about December of you $XX versus -- if debt the where than last So in we we're less were

times, record in years that be leverage face like a be categorize as another weather below to you be because to and conservative run wouldn't I we against record that able next strong to think at the I to given types we of want sheet, concerned. a could So the we defend warm way able sheet. the understand balance balance -- sustain like you winter point nature with just four a to our couple and scenario warm that

what really goals our are. that's So

want So debt when We at still we a and equity to look financing. of you're have right. good acquisitions, balance certainly

we as done sellers. have to hasn't We -- yet. we've introduce That try equity do that consideration something the to common been

to businesses our relationships said in a and have we've a that want at we acquirer. we that that's us, the us numerous quality good operations local the and that opportunities bring cash, their we but we've really have going we because we business at quality business represent. as to on, may with hands So interested personnel they list sell we're the They the what And level, financed buying, worked we good deals and the well. businesses that far we building are market be that be hard they of because those build have that the as in to And times solid we're meaningful they understand of tend to know done change the quality do the to forward. to types most of in how prefer that company look eye our that

we'll season. of potential approach and it's currently handful the that good. of on acquirers. heating heart list. think the I businesses targets the a of a So the in a have respect we respect very right is us It's as proactive And terms that we It finding --

businesses season this that So typically of the expand. as where most list it's of expect come year's I that year, But sale. not time would the are will out for heating we

Unidentified Analyst

thank Great you.

Michael Stivala

Thank you.

Operator

further back presenters. coming [Operator to moments, in Instructions] I'll the questions few turn And allowing no it

Michael Stivala

season forward We you all have full Okay, look Thank great, the thanks you joining early Once thank speaking to today. for in heating again, John. we us. to you. when again us May behind

Operator

Ladies is at tomorrow and this XX till today for midnight. AM available gentlemen, at and conference that replay, Eastern starts

for your access You XXX-XXX-XXXX, your number XXXXXX. XXX-XXX-XXXX. That the access That the access conclude dialing code conference time today, does may replay by code again, thank XXXXXX. for at participation. The is any you

disconnect. may now You

Suburban Propane Partners (SPH) 7 Feb 192019 Q1 Earnings call transcript