GLP - Earnings call transcript Q3 2020

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Operator

Good day, everyone and welcome to the Global Partners Third Quarter 2020 Financial Results Conference Call. Today’s call is being recorded. There will be an opportunity for questions at the end of the call. At this time all participants are in a listen-only mode. [Operator Instructions] With us from Global Partners are President and Chief Executive Officer, Mr. Officer, Financial Chief Slifka; Ms. Eric Operating Daphne Mr. Foster; Chief Officer, President Counsel, Mr. Romaine; and General Vice Executive Mark and Edward Faneuil. At turn to the time, call this I over Mr. would like to Faneuil remarks. for opening Please sir. go ahead,

Edward Faneuil

Thank everyone. Good us for today. morning, you joining

let Partners. begin, the making projections, laws. Global beliefs, limited performance be These within we statements may future include, operational we that but of this me Before forward-looking federal of to concerning financial morning meaning and goals, the statements estimates will everyone securities not remind are

to Forward-looking significant uncertainty within and services and on from currently demand actual market, such some directors our cycles, Partnership’s and we and/or and cause projections. influence their provide product forward and These and products which reasonable pandemic, regulations COVID-XX to perform including permitting duration based control, municipal results. to demand the future of that statements ability no sell corresponding the that the demand their present the of as performance these performance to which c-store information timing the related and we will assurance provided. quarterly federal provide. wide recovery fall curve, markets, gasoline and subject financial COVID-XX of pricing assumptions United materially around impact credit utilization we results trends. guidance without and for and products, the range and conditions state environment expectations utilize are States, the assets in we and which the business offerings, assessment ranges, market duration and our regarding and limitation, assumptions provide. weather, regulatory including the to risks involve could the and/or and the and the impact Partnership’s petroleum any services crude the blendstocks customers business if oil fuels, gasoline available facilities, impact renewable for believe a the uncertainties, COVID-XX actual could of of Because an and around are Uncertainty and Uncertainty the impact beyond are products sell differ our economic We for statements uncertainties, the will our of counterparties obligations risks assumptions around can historical historical are experience or assumptions of given we of

no calls any today’s In conference Securities addition, that with those risk in any results subject of conference is such performance Regulation future FD. made publicly filings it announced to the With obligation that results release through of to of undertakes Commission. any or is including, news to means or disclosure comments in the and but the that limited will forward-looking our communicated releases, factors, revise Exchange call. other Partners maybe effect, FD statements constitute not Global public publicly material operations Regulation to described concerning be policy will for our during purposes revision

Slifka. Now, over the Officer, and Eric President Executive call allow our please Chief turn Mr. to to me

Eric Slifka

continues Global perform associated COVID-XX. on with well, market to Edward. you, executing Thank opportunities

consumed supply, to as life, the is and demand. now provide we infrastructure than terminaling, ever are need. assets essential term we the use goods more I the because businesses that as integrated markets continue warms Families of to everyday deliver storage vertically a serve. home of basic much retail essential power communities infrastructure, Our this we part our portfolio services necessary everyday are the across and to of fuel volume and increasing people, and

whose first vehicles and day. the state responders others commercial, customers, power government also local and road industrial and utilities, We on federal are including fleets, every

basic stay smaller goods close stores our to secure their for those convenience of home wishing in has critical setting. In a markets network become and addition, to

We ensure needs. have to the products customers' have adapted these to we meet

grow and us to in active enable take Our strong to that and opportunities the service the market to organically of opportunities and our is M&A to evaluate with we complement and advantage business point, profitability continue expand geographic through and potential growth. our drive very the footprint adaptability pipeline offerings network acquisitions. To our

We continue to our customers of prioritize employees, guests, the safety and suppliers.

our successfully work no a employees remote office-based with Our to business. transitioned environment disruption to

operational. stations, gas and our terminals fully of All fuel open and are C-stores

of of of to to low-carbon increased energy record distribution a unitholders pleased partner distribution close $X.XX paid per Coast. this highlights. I'm extension diesel our company November years cash Turning announce through the common contract on discussed at November Board signing units come and downstream be diesel of Xth. basis. or renewable to QX putting, terminal throughput business renewable call, of and West long-term The our leading a providing to the of Last as unit $X recent our and to the rail Directors on waterborne expected fuels. week, we in bridge terminal the quarter. natural of on a expertise the business This on to an annualized with to the general our commitment first to quarterly sourcing will is XXth shipments a through fuels renewable distributing the our of are of On that our on

so renewable We fuels increase demand move to growing to doing and serve continue scale. at flexibility our to

our renewables. For infrastructure example, introduce to the continue we to ability supply increase to modifications terminal to

and in Officer that XX it until in look his than note Daphne, the XXXX. the the Daphne? growing I we Chief entrepreneurialism, his Daphne October appointment retirement He Board. leading want Before and was businesses our her years as sector to Sunoco member of Robert financial over more perspective. review. of and Board the energy innovation Executive to call to from now and of turn benefiting XXXX me brings as forward let success in for of from newest to With to Owens elected Bob LP turning over served President

Daphne Foster

financially navigating in Echoing you, we've well and morning this Thank both operationally while environment. unique everyone. good Eric performed and Eric's comments,

to performance. to We integrated efficiencies and to vertically continue costs manage supply retail leverage generate and distribution, strong or the terminal, network

in the last for numbers loss of the mind net third QX, distributable early July to keep EBITDA and through due go notes flow X.XX% on debt income, million related year's $XX.X we in the repurchase As a XXXX XXXX. quarter extinguishment in senior included cash our that of

the coverage was XXXX the $XX.X our XX-month million in same declined the other X.X of XXXX end XXXX. was preferred from gasoline an in million at in same Wholesale oils or Trailing of period. after $XX.X period segments. partially Adjusted third up products. and the of largely gallons largely XXX at all times. period Volume results million oil the was was factoring decline GDSO decreases segment by of to increase Looking and gallons million segment offset in and distributions due million impact of distribution the primarily to Volume primarily quarter fuel XX% in a decline coverage COVID-XX. XX% compared the XX third with blendstocks was compared XXXX reflecting declines COVID-XX. in year bunker quarter with net across of third unitholders $XX.X of XXXX. in to same travel XXXX X.X in million income billion crude declined automobiles quarter million due impact commercial in XXX third volume DCF the with gallons earlier to XX% gallons of to or in $XX.X in quarter gasoline billion of quarter and related due a million gasoline Volume $XX.X the XX the declined for $XX.X times versus in segment was EBITDA the the X.X in in million to gallons due that or million our period the the X.X

in $X.XXX Station due convenience positively store product $X.X of consisted XXXX. agents, dealers. million dealers prices. million, decreased higher portfolio -- sales, product and per distribution COVID-XX wholesale $X.X operations primarily of includes third $XXX.X company-operated $X.XXX of impacted margins. end fuel our by margin GDSO to income, sundries in part million volume, GDSO segment decline $X.X in $XXX.X lower margin our the due increase contract to reflecting less of $X.XXX million down and declining volume the offset X,XXX margin million gasoline to quarter activity traffic and of margins. to gallon gallon third The year's last GDSO margin lessee to gasoline to partly product offset to an to which XXX XX% C-stores. per was stores, per gallon the reduced margin, reflecting was contribution Turning in $X.XXX XXX declined The from $XX.X comprised third fuel commissioned At quarter fuel XXX C-store rental million per quarter, by in gallon $XX.X million our quarter, at XXX sites, the in by the

in market margin down million segment, margin XXXX. Looking a segment increased product third $X.X $X.X than $XX $XX.X primarily million, decreased Commercial primarily activity. products million million less margin blendstocks was million. other product at to residual the favorable gasoline Crude decrease $XX.X $X and in oils $X.X million, million in related to Product fuels. Gasoline bunkering oil declined conditions to $XXX,XXX. million, primarily decreased due and from product margin Wholesale product to QX to margin XXXX quarter $X.X reflecting

$XX.X the expansion $X.X lower million expense GDSO primarily our due maintenance due Operating the expenses. sites. million of and of CapEx, at business. rates. decrease in expansion expenses the was to $XX.X and million we XXXX, in to to million to due million part nine third down $XX.X year-over-year of in reduction the maintenance CapEx credit a of $XX accrued in card the were to first third months million million to station fees average XXXX quarter was invested to in $X.X volume million in expenses Turning Through expenses. primarily quarter lower million our price, quarter consisting reflected This and balances maintenance hours reduced quarter, to and of facilities were CapEx of lower gas SG&A and CapEx in in $XX.X down Interest comp. store on lower have and lower the down Capex. our million $X.X due incentive million approximately repair interest $X.X expense in related credit primarily lower $XX.X to expenses $XX.X decrease due salary third

year, CapEx imposed to earlier $XX to investments full gasoline approximately million we the For catch XXXX, expansion convenience of up discretionary with approximately $XX on continue The we excluding business. project station we million expenditures in these million our to of and primarily CapEx $XX as store $XX the million. late and maintenance of to acquisitions year majority to pause work were

balance third the quarter. the of as is was X.X approximately our end the leverage in at to debt-to-EBITDA defined Turning credit funded agreement which sheet times

excess to continue We ample facility. have credit our capacity under

announced including million, to $XXX.X of In credit quarter the facility. proceeds on of this in XX, redemption debt total fees. we million $XXX financing the of approximately $X.X of agreement. from In the X% principal a million $XXX notes September XXXX, fund from the XXXX million unsecured premium, The expect repay and used write-off senior revolving $XXX $XXX.X million our loss as deferred facility associated $XXX the we under credit outstanding outstanding of credit X.XXX% in as were early credit portion notes October, call well outstanding unamortized of previously due of private capital with will net the to fourth million offering $XXX senior completed the As of XXXX, extinguishment working under the our result were borrowings and revolving of XXXX. of borrowings redemption the aggregate our offering amount agreement a million our due sale under remaining million

the Leveraged that call Infrastructure in I to weeks, Fargo Wells turn the Eric, and with Finance at the Conference. you we RBC meeting the back investors know Securities Virtual Symposium want and Utility and to Energy I the Midstream will Before coming Midstream be Conference, let BofA

you're forward we to meet with to Eric? the the look participating If you events. at opportunity

Eric Slifka

XXXX In extent remains Daphne. performance of Thanks our largely summary, duration COVID-XX. dependent the on

economic there? product With now, our effects to you of visibility. I take Daphne integrated for that diversified to strategic COVID-XX will questions. and your continue model portfolio continue about long-term our to are near-term ongoing assets the partnership, limit uncertainty and see be we happy the Operator? as business While Operator,

Operator

Yes, I’m Thank sorry. you.

proceed be Stifel. Akyol now question-and-answer a [Operator Selman Please Instructions] question. will first your question from session. We conducting with comes with Our

Unidentified Analyst

little active. Selman. good guys the was to for on mentioned M&A morning. I Tim is starting know Hey, a [ph] market you be This

Just wondering, about any if you're you seeing? could talk opportunities broadly currently

Eric Slifka

out specifically the this like Yeah. broadly-owned. Eric. we'll is about about into can't say is I the is, -- it's anything would obviously, we of in differently what form. considering a operations, I What mean in But specific. very retail be broadly changing I family-run very -- businesses, get businesses, there say lot selling generational terms lot doing talk either of to let's some would There's there, in I their business a past. they are just people seems And smaller their have that operators the of things than activity

not believe it's and activity of new, exactly delivering barrels. it's and that's but sure a lot around also And to around so just and how of active say describe And a really where it's there company, moving, when that I'm there's producing would renewables. takes do we the different an I those ideas because but ultimately interest it. opportunity, of say continues of lot say I concepts M&A, around kinds be and I'd not also the activity we

we will that that involved role trying But in the company. I fit you would play I'm tell not there. that make to ultimately exact sure can opportunities sure are So the we're

Unidentified Analyst

Got last of then it. And your how sales just for me, retail October. for just helpful. one was trended That very wondering at one the sides month gasoline have so

if thoughts just been on up? it's pulling wondering curious XQ, there? your you're or seeing little Just increase if a over Just

Eric Slifka

handle do to you Daph, want that? guys Mark,

Daphne Foster

I'm to. happy Sure.

the shortfall and offset now see, is that think that Haven't double-digit continue what we much volume? have the mid view to to fourth helpful be the continued quarter the I down into saw at and to percentages third on in and for third year-over-year. of been margins in really to meaning it's seen think future certainly some October, I quarter hanging although date, quarter change

Eric Slifka

and I had like times of month-to-month Eric you the were right? feels, So -- can sort in in right? right? direction, it's feels little And soft, where other bit it's little say increases Tim, and soft a you if month-to-month market a it went demand, just -- there you the heading look

Unidentified Analyst

That That's time. it. Got helpful. super for it the for me be will guys. Thanks

Eric Slifka

Tim. Thanks,

Operator

this There Instructions] further like turn closing no to for at are Slifka the would any to questions call back [Operator time. I Eric comments.

Eric Slifka

bridge our morning. Thanksgiving be this and With hope keeping a that touch of with will you stay season. Thank fast the On much you this COVID-XX and Thank in possible. and you. forward to much joining you safe, will Global, physical as updated everyone look of distance us, keeping we us very undoubtedly by limitations approaching healthy at as on progress. friends family unique We behalf for still holiday with social

Operator

concludes today's conference. That

You may lines Thank time. at your and disconnect your this you for participation day. have a great

Global Partners (GLP) 5 Nov 202020 Q3 Earnings call transcript