GLP - Earnings call transcript Q4 2020

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Operator

Good day, everyone, and welcome to the Global Partners Fourth Quarter and Full Year 2020 Financial Results Conference Call. Today's call is being recorded. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [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 the Mr. call time, over this I'd to like to turn Faneuil for opening remarks. ahead, go Please, sir.

Edward Faneuil

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

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

quarterly the Forward-looking and/or to from partnership's state on market, projections. present sell and their which are the of are assumptions such currently obligations cycles, around and forward including and which permitting could and/or related based impact the We United the demand for and of reasonable, financial pandemic These services statements and corresponding to these the curve, to duration perform materially services and demand expectations as information. provide, some and in their the that ability sell c-store markets, of directives the we the products impact our we recovery the utilize gasoline credit provide, utilization limitation, statements and beyond assumptions counterparties for federal, demand products, results and products actual the believe conditions, uncertainty States, of risks of COVID-XX impact our pandemic, environment pricing municipal the around and are could assets we which available uncertainty experience the offerings, market without involve impact and the uncertainties, regarding or will assumptions and weather, regulations to and given COVID-XX historical the including results. customers around the significant we and cause pandemic regulatory product the timing and differ uncertainty an of petroleum crude the blendstocks economic business oil fuels, COVID-XX gasoline duration facilities, renewable partnership's control, for the influence

subject of wide range assumptions future risks are uncertainties. performance Our and and to a business

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

turn call Slifka. it's over Now, Officer, my the to President to Executive Eric Chief and pleasure our

Eric Slifka

regions delivered we meet essential net everyone. and in flow distributable and and increases innovated the needs good and has Thank in of to adapted metric of year-over-year. customers million, adjusted economic EBITDA XXXX, income Global cash serve. each the morning, Global of million; always posting the you, Edward, $XXX.X results extraordinary of $XXX.X most million $XXX.X

the us country. throughout while and safety guests from like operations our frontline convenience outstanding our our the personnel at running assets. innovate no publicly terminal, associates and resilience business we role, Our In to of energy performance real as highlights our other, integrated to In underscores also and of kept gas work model grow. smoothly, locations and people the terminals the provide face fully pandemic and in products the supply our company. that helping customers, critical they year I a a portfolio the of global essential office a infrastructure want our and stations, stores through fundamental acknowledge role our goods and a of at estate of services ensuring

work. meals philanthropy workers As first supporting at gift where an fuel pandemic, the year live our participated free of providing is and thousands residents hyperlocal our with and have care the causes the workers communities this retail we locations level and DNA, in prioritized organization, Throughout we at of those we cards volunteer past to and health responders a in to need, and projects. in number up frontline donated

the close an units XXXX. the basis of Turning distribution of cash X to has goal period from through of general February unitholders $X.XX to January our focused acquisitions distributions. record quarter December business noting the Board We delivering or increased this declared Board consecutive worth per $XX.X partner as the remain on distributions, In XXXX million unitholders of we as value the which common of The distribution. of for outstanding common a paid distribution through or in returns the third unitholders XX on annualized that strategic October our to on X Directors mid-teen distribution. form on in cash our for XX, It's higher. quarterly marked was in to of with year the capital unit of which of all $X.XX well investments and returned February long-term as the

to company-operated branded Moving convenience agreement wheels In acquisition Connecticut stations as of The stations petroleum in retail stores York. well Incorporated. in assets gas as December, approximately XX supply XX convenience of gas our includes with and signed operating to and the agreements New we for store purchase Connecticut retail Connecticut fuel highlights. recent an consumer fuel

under our a existing rail independent and and have retail presence At Greater first retail expanding expect the that addition subject the branded our complement with in We terminal of we quarter close closing diesel Oregon, long-term business. wholesale and renewable market year of in receiving regulatory energy a transaction our contract position we downstream assets of this dealer to to approvals the Philadelphia business unbranded with us leading are grow customary waterborne company. shipments other the in Separately, to begun our conditions.

of global. expand network. we fuels mandated initiative handle In fuel that and work fuels, the grant ability our energy part an biofuel expanding thinking to are not of but is efforts the about centered Northeast or whether solutions. liquid in volumes energy, of larger or recently are our just Department These decades. stations year electric of the leading Agriculture our year terminals through in that businesses, role US is a of the addition, larger our coming distribution at to we other upgrade these broaden It a on secured initiative our renewable move liquid to will five and after, environmentally Across sustainable ahead, next

on and Board retail developed From Accounting energy and to Every initiatives sustainability new Standards and positioning to business through by providing team group, and business the offerings to are tasked energy continue has leading the provide our relevant we our adoption low-carbon choices. that assets greener an legacy and technologies and an ESG of consumer bridge setup of innovate, day including metrics working increased which to those transforming Internally, adapt, Infrastructure our business our the Energy identifying to confident with are formed We and environmental future fuels, based initial future-proofing -- governance green in and essential Council. our spaces, grow. social have frameworks, been is developing challenged a to of goods set a we world. promote

serve. assets We in play and the are the role we about the motivated our markets future and excited real terminal of estate

business technologies emerge, we of a don't I those is say conscientious determine in have are a focusing to I sense crystal the on that staying While will what and to can transition make which business opportunities advantage our ball model curious, that manner. in taking

Now, let Daphne turn for to Daphne? me call financial the review. over her

Daphne Foster

good and morning Eric, everyone. you, Thank

Eric highlighted, well As XXXX in performed environment. despite an uncertain we macroeconomic

Our to results assets of the the resiliency network. speak business our our and terminal our quality of the versatility model, integrated of

$X.X please early of EBITDA, the million to debt of adjusted X% results, due through that and keep go October senior full the EBITDA redemption mind in include income, and the loss we on the XXXX XXXX. XXXX of related year notes fourth in extinguishment the As DCF quarter net a

include senior a driven to million $XX.X by $XX.X XXXX. for increase to for notes year conditions due debt extinguishment $X.X million of period the Wholesale compared quarter was on million on our fourth in more with of of segment. $X.X and million in increase million, in expenses. EBITDA by full $XX.X due related largely repurchase favorable XXXX. The the combined $XX.X loss partially same and the Adjusted a extinguishment XXXX metrics the XXXX, For was our X.XX% combined SG&A of of offset product The margin, early debt these early market increase the million loss million was $X.X operating a increase

extinguishment the to forward EBITDA in the contango $XX.X full on was curve million in year. XXXX. the contributed compared EBITDA. was net driven the compared dramatic For product product period million with the XXX.X% attributable $XXX.X same The pricing a early of with to in million the the the increase $XX increase structure million to XXXX. the market million partnership largely shift during of of The margin income a adjusted for in same due by year, loss adjusted and loss was year-over-year fourth increase $X.X extreme million the Net for in of $X.X XXXX debt $X.X decrease quarter in also period

in times net $XXX.X X.X million coverage fourth for distributions For of XXXX. million after a year generated times proceeds factoring $XX.X DCF the XXXX as DCF CapEx with TTM in flow unitholders. compared of compared $XX.X excess compared million. quarter XXXX. of our from full was December the We full with distributions cash $XXX.X period. XXXX was after million asset $XX year net of healthy expansion after sales or year distribution in in and approximately income million in preferred XX, X.X to $X.X $X.X was was XXXX XXXX, million prior million with

COVID-XX $X.XX volume $X.X which XXXX, segment than year million convenience product more $X.X to stores. million million, distribution fuel a reflecting million, per due up $XX increase to the of with from margin $X $XXX.X quarter in -- period, the fourth our with gasoline million year-over-year. Operations in to Station reflecting contribution a million sales. earlier our in to the XX% margin to adverse our margin, than offset in contributed Turning impact compared activity was convenience on to $X.XX more $XX.X average at down product down the gallon of margin less The product GDSO QX store quarter details. primarily was decrease

GDSO increased which driven in XXXX. GDSO product year, XX% million, increase $XX.X a full to our income million sundries volume. more Operations pandemic. up margin X,XXX which million product stores, was product due million to margin of a from $XX.X down margin, the XXX portfolio XXXX, XXXX, million contract XXX and to from comprised At XXX Gasoline of for $X.XX $XXX.X store $XXX.X in margin than year year of consisted $XXX sales, convenience average the full commissioned dealers by of gallon fuel company-operated and $X.X decrease end full $X.XX contributed in For includes Station XXXX, per XXX the XXXX, effects offset rental Distribution million to XXXX, for dealers. lessee agents, the sites

margin $XX.X oil, $XX.X XXXX from and margin million products, slightly The supply fourth the from than in million. $X.X Looking was for product $XX.X quarter, at Wholesale to to negative in the $XX.X earlier. fourth period million million $XX.X other residual quarter of and weak million. in blendstock due related curve a oil the XXXX. product segment, fourth $X Wholesale million increased market. particularly XXXX, Wholesale, $XX.X the contrast, flattened. million oils up quarter negative was year million quarter distillates crude contributed and better product Gasoline In Product up of margin, margin gasoline forward fourth includes an pricing tightened to was and to Product oversupplied same which product the margin quarter a from XXXX

market product full the to the forward from in margin to dramatic XXXX, and XXXX, million pricing year product $XX.X $XXX.X shift the contango due Wholesale For during structure segment $XXX.X curve increased primarily in year. million the million extreme

and product margin year in conditions, drove product of our full increased and million $XX.X margin product was network XXXX. storage oil advantage oils to in to Gasoline XXXX, each XXXX. full which other XXXX year-over-year in products wholesale margin increasing of negative these increased XXXX. market increases in for $XX related margin million million in year gasoline $XX.X favorable us $XXX.X Crude million terminals, Our $XX.X lines. of full positioned million from to million blendstocks $XX.X million $XXX,XXX take from $XX year negative Product from

full the Product segment. the to The quarter reflecting to primary million Commercial margin $XX.X $X.X was to margin the year our in declined results, Turning detractor bunkering million. $X.X to in decline million fourth a XXXX, the drop-off of business, also decreased in the $XX.X segment's in bunkering product due pandemic. million as

fees reflects costs the the $XXX.X to $XX.X of expenses. was the in $XX.X with reduced the up million full $XX.X our volume Looking discretionary professional by million full due lower our comp, $X.XX and associated with balances increased lower $X.X The repair card credit GDSO to in decreased expenses the increases terminal XXXX compared reduction year periods $XX lower fourth the fourth incentive advertising, was decrease price, attributable operations. with fourth interest at associated Interest an part, well average million quarter due for quarter to year expenses benefits, in XXXX. On million to million in earlier including full Operating and period, the with due facilities, sites, million primarily GDSO expenses in expenses. expenses rates. at The $XX.X fees store and compensation. a for in $XXX.X QX decrease partially lower pandemic. million million and in lower quarter in at million million, hours sites these as $XX.X in and expenses, as and for our to lower SG&A in on increase year salary our offset incentive was XXXX, maintenance wages operating for SG&A and primarily to to expense increases part in basis, year to credit expense

$XX quarter prior which was expense For consisting reasons. $XX.X our our consisting to CapEx below million, year CapEx full million line maintenance from of million CapEx, maintenance the expansion $XX $XX interest of fourth of acquisitions. of $XX.X in our guidance of XXXX, million, million, slightly of excluding guidance business. to CapEx million of $XX.X to million expansion for the and of $XX.X station year down million approximately CapEx, in and $XX.X similar XXXX most for was the $X.X million full $XX gasoline $XX.X year was $XX million million, relates million of with

$XX For CapEx million million of million in to expect maintenance to $XX full XXXX, year million. we range range the of $XX expansion CapEx $XX in the and

sheet our times as manage funded end leverage, X.X agreement defined which was continue prudently, We to fourth our the is credit debt-to-EBITDA of at in quarter. balance the approximately

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

X.XXX% million our $XXX.X million, outstanding $XXX.X $XXX The announced X% our credit facility, of As under the senior our of million agreement credit $XXX under offering XXXX, redemption working borrowings repay credit of of private our $XXX senior from notes previously $XXX million XX, borrowings fund million to proceeds and under December XXXX. of under of offering due the total and agreement. including October, portion used XXXX, unsecured notes was net million to facility. revolving $XXX we capital the revolving a sale outstanding credit the due In outstanding million were completed the

quarter the the exceptional, write-off financing of early well extinguishment as performance significant summary, XXXX particularly noted the fourth debt COVID-XX. impact a light of with in in of I the call million the economic As In the as $X.X premium, associated deferred resulted the of at of our unamortized redemption my beginning in loss of fees. remarks, was from

Our balance is strong healthy. businesses and sheet our are

at on Although, pump, demand is we duration pandemic and upon the full providing EBITDA decision at uncertainties and based ongoing at impact not our of this stores, time, inside guidance are surrounding our the year our the terminals.

and the in that, We we into more to back to me decision timing this the serve. we continue those visibility areas With will move let call of Eric. recovery course an turn of economic as evaluate forward gain

Eric Slifka

Daphne. Thanks,

well. adaptability, allowed liability continued to changes I to demand our while outstanding thanking to results. year's again the provide in want that their product by innovation to adapting ability for team us and close commitment, to serve Our deliver us

goods that behavior continue greener we in and strategic As the am energy, that demand provide team consumer and to better. embrace Global essential our confident for services will the life changes assets one make and I

will Operator? your Daphne take questions. to Now, and I, happy be

Operator

Thank you.

now a Instructions] [Operator session. Thank will be conducting you. We question-and-answer

your from questions. proceed with Our first Selman Please, Stifel. Akyol question the with comes of line

Selman Akyol

to Good all. Thank morning you.

opening called And talked sort stations. So your greener out electric bridge you in of to future. specifically you a comments about,

there? something anything sort existing it adding would that? So a to wondering, anything of separate station? it or be footprint, evaluating to just it Is as or your is on there I'm would an what station, share existing your be Or you

Eric Slifka

Sure, Selman. It's Eric Slifka.

Connecticut consumers, First of going statement inadvertently that I I said in one I we and the made. I bought meant just all, QX. want to close correct to in QX, that, was company

on to around that wanted get misunderstanding just that. there of no I So was the so record sort

future your to around Now, regards Selman in greener question stations. of sort electric

one a high we do electric not high-speed that that with use And Electrify charging have had the not Electrify and super can location site, immaterial. I America tell we site have where has partnered on. to was We capital that you America spent it

sure to a conduit profit deliver wires put that in what at to opportunity we and we'll hard the pull product top, is the there where So decide where locations. charging I or and hard the we'll to I'll to us what that we ground think five essentially, through I then off tanks for think the that out we is company considering an include we're it's call. figure they're make we're the or but think opened every consumer. is can in electric that path a to for as be six go replacing make at as slots replacing line, side, charging the the Typically, the up place up it site profitable top where we time And can the tearing that basically and to if can in some to sites we're goal so electric to here many

Selman Akyol

Understood.

RNG about I current for that biofuels. little your about renewables expanding terminal more for is relative -- talked that? Can think maybe presence to also talk a terminals? then you more profitable just And there also for bit You

Eric Slifka

to we governments carbon electric role So we're than a we try and fuel think and in announcing a to go Project that that say, return heating fuel investment as very example or to by out with blend making heating think their leadership bio And and by is is better Carbon that push a other states and terminals costly. today. this better to and home partnership lowers And more gas in by alternatives what that essentially essentially equipment existing at infrastructure is is hard the are it a there's the producers essentially footprint good that it an that pushing a blended Freedom. certain oil cleaner a use and biofuel is, and to the a is even actually liquid hey be example alternatives providing consumer's alternative going on and look have to levels. its sis than good state face. And we that opportunity whether there tanks or that with existing the taking And alternative will something natural it's cleaner

Selman Akyol

Got some your there you then you as about Can market about you maybe it. of think goalposts share expanding presence one in And retail last talked the it? sort Philadelphia.

Eric Slifka

a we pick was were I sites that there out that some there Yes. companies with of up. the able business of to a or getting few mean had just opportunities were couple

there. and you our do Romaine look that to Philadelphia think you Philly? it's I have sort are total going I'm For about Mark listening? team I reason the think to count my Romaine, for in amount Mark and XX. some total of

Mark Romaine

I on mute. am I was

it's than I a higher bit that. think

the like it's at think I XX moment.

We continue add sites. to

Eric Slifka

my our taking for basically are in that different have and growth on once thinking feel a footprint what you're marketplace. expanding it a of place opportunity the ways. is sort multiple and -- company so And perspective provides about for we into are you retail ground And better how it's the deals more

Selman Akyol

you. Very good. Thank

Operator

comes America. of from with line of the [Operator your Brody Bank question. Instructions] Our Gregg Please question with proceed next

Gregg Brody

guys. morning, Good

Eric Slifka

Gregg. Hey

Gregg Brody

better-than-expected year. increasing guidance you forward you're year of it What's than not points had the you're yet? cut the thinking just going better providing I about you turned So are that it obviously that out -- earlier when especially the was you light how in dividend in to the which fact

Daphne Foster

Greeg, morning, it's Good Daphne.

mind looking have have looking of sheet to same performance, of the forward acquisitions what are basically think keeping continue as terms We terms CapEx we cash making for in We're which is whether I the or our balance in our at always decision. distribution needs well. in approaches it's our we're and leverage

act. was particularly we really very it's flow distributions bit past healthy. balancing cash excess as the this a a after cited So strong was year and of Obviously

Gregg Brody

CapEx Got much your how number it. And you green for of provided in initiatives? would number guidance CapEx is then say the and growth that you

Daphne Foster

much How is sorry? for what

Gregg Brody

some your green For of initiatives?

Daphne Foster

really GDSO CapEx the the I that yet is a of the And don't would on the business. amount of business of say lion's the green share think I expansion the retail the segment. material toward of side it's as side

Gregg Brody

Got initiatives it. a that's on you're working growth any a of Do bump material? in these growth acquiring foresee -- CapEx you

Daphne Foster

have… don't I

Eric Slifka

green initiatives? for Are you saying

Gregg Brody

Yes. capture I'm just cleaner using green fuels. to

Eric Slifka

for would them. that of ultimately right? being, is, I like that a the possible mean, the we're I diesel end trying up plugged West but conversations of that that changing. make what I opportunity, lot out we're that look can is just the you new Coast, There's other grow say we to we make certainly very aware tell is We're market the can there know that of for. and what transaction with as continue on of -- but know, looking renewable and its deliver else. we we're stepped into having it's you And anything position ways administration there around I What what and there. changes that you it's opportunistic, think there's to don't done, so get deals solutions are just very And I we're we busy. in won't those The business are to initiatives. have fundamental And -- we're we're have But those we is all field sure okay? government trying Yes. conversations. mean, until and in are the lots to sure I them into

to not manage towards. set driving contracts risk taking risk, that's to it financial we're but and and the unknown that's the up, what got that have so right You've have around the expenditure you you're risk

Gregg Brody

been Just charging that areas in to some active for not are utilities joint of in something announcements with the trying things operate ventures like areas some you noticing utilities that you're -- I've in that… as in stations. Are provide Is the you where conversations south the that? to participate in

Eric Slifka

would electric I traditional more say charging companies. So

we've to electric So at I'd is end great real say do -- or some because believe? That the used energy, to we estate, of we're going energy have form. believe, canvassing somebody whether deliver okay? look them, what the other by I be that I is day

potential in would on possibility. example A to process at own. and there to markets, be you stations we the bit right? on its do grant charging out traditional in of to side. So many demand in say are that's it of and opportunity hopefully opportunity right? we its it provides the talk as at what off high-speed because Connecticut utilities there's cost more the plays us by on a and and the as your partnerships stations is finding opportunity But got retail biofuel we've well most I about Those the again, companies you're have canvas take us small of years I electric do in We've structure at where partnership once with are value. if of do away a but terminal of facilities as it's And our an well. terminalling I a -- that reached be opportunities more timing have advantage But positioned we'll think that's to right? out about that's well. itself well and we're both And been grind charging blocks in build a a think as it's that contact The for highways. a got that not position the But them out. where tough of investment going the your and It's these But we've bio XX couple little versus just right all quarter the a least But permits. may subsidies and it to

Gregg Brody

it's hear perspective on fastening No Yes. now. right interesting your on sure right this. question… it's That's -- The I'm to

Eric Slifka

-- because I Gregg, we're do happen. so, technology travel technology the hard in at percentage locations here what And they're asset grow, What going of really whether mandated of a day wins, or be decides going because does think We we'll company, a take in we're -- right? position and to we're And a end it. I not what Yes, around the so good wins, right? it's and just But if question a whoever And it in highly there's right? over. be battery of as it in help Because, market we have they right? we out role long a of to not, And need that to subsidies, really the way, there's a a build going is of it want to question big deliver can lot about is that can it's that fact, And assets provider how that infrastructure it right? grows, a to to to those gets growing them to them, complex, the in right? have it, think the make is have this right? mandates, lot

Gregg Brody

couple your subsequent you've are to that margin? last any quarter, the of pressure the question, margin rise you've That still crude -- hold Or last retail the with traditional And been sense. is seen on prices able up just in you seeing makes to putting quarters? my are you

Eric Slifka

say, pretty can the at you lot market generally up NYMEX pandemic. they What how look Yes. mode, They're the an from But don't generally, months, I versus is good. a I of say sort the would in squeezed go in broadly, what of even for the basically, has many I GasBuddy. months. are I were would know though, been margins

Gregg Brody

Guys so me. for it you much. thank That's

Operator

Baramov Ned with question. Wells with Our next line proceed question comes Fargo. from of your the Please

Ned Baramov

the one number been expenses, the the I Hi. a asked you the wondering, going what Good of increase but SG&A for good and forward? about, answered. maybe is behind questions. morning. for the Most incentive in to use drivers comp questions have Thanks Daphne. some of had piece, Could in just my catch did taking I quarter? talk fourth

Daphne Foster

as the at expenses. say as timing comp bit morning. good I'd basis, heavy was of incentive million. or heavy in other well run-rate it's Ned, a quarter mentioned part Yes. million -- materially. due And and not on SG&A the Yes, so the that $XX you was in as $XX to a really

full million up $XXX part fee although by comp. we due year-over-year incentive year the more million to again, professional in than $XX which For is had salaries

And did some you as and year certain go in areas during expenses, know the costs up. underspend COVID-related we

I'd up. is materially but heavy SG&A quarter, So the it's in say, not

Ned Baramov

then, could you Got if latest just thoughts it. provide And one if more on I your IDRS? may,

Daphne Foster

there's really I don't have to announce IDRS. nothing And to really comment regards any existing on structure. with IDR the

Ned Baramov

all, Thank you. I This had.

Operator

you. Thank

would reached Mr. Slifka, to closing our to now time for you the turn We I questions. end for floor like of over have the back allotted comments.

Eric Slifka

our on Thank morning. forward us updated Thank Stay progress. this to you you. keeping look for We you safe, everybody. joining

Operator

conclude does Ladies teleconference. and this gentlemen, today's

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

Global Partners (GLP) 5 Mar 212020 Q4 Earnings call transcript