GLP - Earnings call transcript Q1 2021

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Operator

Good day, everyone, and welcome to the Global Partners First Quarter 2021 Financial Results Conference Call. Today's call is being recorded. [Operator Instructions]. With us from Global Partners are President and Chief Executive Officer, Mr. Eric Slifka; Chief Financial Officer, Ms. Officer, Operating Chief Foster; Mr. Daphne and Mark Mr. CFO, Romaine; Treasurer Incoming Counsel, Vice Gregory Executive General Mr. Hanson; and President, Edward Faneuil. At I'd Mr. this over call time, like to the turn to opening for remarks. Faneuil Please go ahead, sir.

Edward Faneuil

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

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

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

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

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

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

Eric Slifka

Thank everyone. you, Edward, morning, good and

review the me call. Before a to quarter, Hanson, we moment welcome his inaugural take to let Gregory our Treasurer,

more the businesses fuel the the demand pastXX than vaccinated As in strong, significant we lows, assumes wholesale the $X.XX margins is In primarily the and say up fully despite spike in were a to Daphne's increasing roads. improvement quarter against now gasoline Greg has Global market of people margin QX the work XXXX, COVID-XX the Greg. done [Technical his the conditions, up August prices, Wholesale of to announced $XX landscape first still Global. temperatures. to great driven of GDSO, Daphne's Difficulty] have With number gasoline signs favorable and as U.S. growing about and industrywide outstanding lead earlier. same was remained upon year more over XXXX our while our The fuel first first improving take more than promotion. rebounding X/X our to the of and better on of period the which segment, Welcome, was more in September related showed period in is same reopening, by from as relatively economic from role retirement of CFO as volumes in in call quarter I'll colder contributions a Greg product in the in more off than COVID fuel other a though, XXXX, million In from and in well retail March. products quarter oils March,

and Project biofuels producers seen a and XXX just Northeast tremendous heat the of we over the a states, customers sense Agriculture home we our This grant elected we state capabilities chain Northeast by and terminals expand to heat across infrastructures education up common aims New that XX Freedom, X of order targets use Freedom, outreach, distributors, Complementing move with farmers, decarbonize X in blends renewable are and and more recently from our allow footprint. nearly and In this Through responsibly low-carbon signed than important biofuel beyond. legislators pioneering the Carbon and state launched Project of to supply higher biodiesel the sectors that advocates in In months, together secured Northeast. home advocacy, we approach. of region. optimizing brings mobilized England, renewable fuels a coalition to domestic distribute domestically-produced policy-makers expand to ability York initiative bills reduce will addressed used across rollout across to Since bring meet electrify heating us coalition climate Looking homes and federal customers to to designed several to of quarter, are calling throughout policies members. the that to supports first federal being increase at from Department support XX help March for Toward to XXX the and launch, realities number and help carbon have Project U.S. meet in biodiesel biofuels, Carbon continue end, their in awareness coalition Midwest. their Carbon New recent heating Freedom existing Northeast. the highlights. the and we decarbonization which climate states the that oil already our

to GDSOs Turning to our GDSO segment. --

to continuing are than with network integration in retail more mid-XXXX, terminal the sites XX and expand New strengthens Greater with footprint since We our Pennsylvania market the markets. in the addition of which the Philadelphia Jersey our

of sites We of notion real in to a and $XX deploy motoring rebuilds, have including to a to homegrown charging Fresh Alltown continue sustainability, CapEx an broad Appealing to consumer an strategic electric liquid across projects, are a range of be expansion broaden in products, market standpoint, they remodels. million vital stations $XX our range growing we XXXX delivery the and From investment estate million to plan fuels, new-to-industry and raze whether investments and focused of that in other future forms or our footprint. capital energy.

spaces Our and plan coffee. early enjoy operation, market provides meals currently freshly open sit to we X and With fresh, cafe-inspired brewed or X to XXXX locally-sourced, and in provisions XXXX. choices of in more

front, is M&A pipeline the active. very On the

to to and expand service footprint, evaluate opportunities continue our our profitability complement offerings geographic We growth. and drive

acquisition or We of in of with of assets you our store are calls, quarter As expect with the third designed Connecticut. We retail of our I've returns acquisition higher. noted to on capital investment about close last initiatives spoke Consumer Petroleum mid-teen the quarter. and goal now and fuel this previous convenience strategic transaction

a allocation cash has or Board the the of common per on our raised Board outstanding Directors and the distribution. drive strategy of XX, This our quarterly of units fourth partner our basis in X to general Last consecutive the of for marks distribution Turning an from to is which which $X.XXXX on X/X quarter XXXX. component overall for unitholders. March the to month, capital annualized an value commitment important period our distribution, all declared unit January

below the the Administration upcoming XXXX. improve XXXX, U.S. Energy season, but Looking from gasoline forecast still demand consumption for at driving slightly summer that will projects Information remain

pandemic While increasing significant is expects have a from of this summer, U.S. expected percentage the the are ongoing EIA as to the XXXX through petroleum markets an vaccinated. effects those of lessen effects population effect to

much XX in other people into data their which by For our which show The and commuters extra and on turning reopen. across cars. each fully states pandemic. retail that hour trends, activities sports many a see put curricular schools the the people at rush fuel rest We'll pace have region's Heading the other depend to the summer, return appears operates states, quarter the use demand -- how out. the of we're encouraged of events to plays that very that improving all terms business, in year of

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

Daphne Foster

morning, good and Eric, everyone. you, Thank

our sold were which total $XX expansion on morning me per recently Let preferred Series reduce quarterly acquisitions net used of of positions fixed Series annum. unit, credit on unit agreement. at completed which X.X% our payable B organic further discussing rate offering, B the Distributions A be begin opportunities. million of proceeds million, us under per to X generating units were capitalize to units this and a $XX.X approximately by will at indebtedness

of record As of on May holders be to will pro-rated distribution as May business initial of $X.XXXX payable a previously opening announced, of XX the on X.

the as tax XXXX, period. in was The $XX.X X.XXx March under $X our income and the fuel $XX benefit of combined million million the the to in TTM partnership SG&A of as of was carryback. a of weaker margins with compared first prior expense. in Adjusted of quarter same in of to refund product cash In margins million $X.X million million XXXX. million of our that unitholders. quarter $XX.X a net losses operating lower CARES first XXXX XXXX was with included and million the was million received after XXXX first year due in XXXX. or of quarter reflects to in of results. DCF our to distribution for with to reported The GDSO carryback the first coverage factoring preferred first net $X.X X.XXx compared the quarter $X.X with in we $XX.X EBITDA net Act. largely the XX, Turning for same well DCF of period in quarter decrease XXXX, $XX segment, related delta volume Both XXXX, distribution attributable million associated increase the the loss in for net the income as of compared period an

Station gasoline Wholesale the of of light compared distribution stores, in lower full product contract benefited $XX.X prices decline million, the expectations with in down the increase January, million, up portfolio fuel margins primarily a commissioned on QX, product than operations of of $X.XX in funding. XXXX quarter year-earlier dealers last March. up The QX $X.XX to in increases fuel the our in margin gasoline quarter gallon XXX consisted our $XX margin of $X.XX in fell COVID-XX started fuel margin fuel the end between with in XXXX, impact contrast, the were period, pleased quarter year's margin, primarily February of a $XXX.X to volume. first of wholesale gasoline prices margin XXX segment a agents, before of quarter as XXX gasoline and well reflecting million In to XXX down we end per volume. reflecting the Turning the GDSO first retail and outperformed $X.XX sites $X.XX in million to margins recede. $X.XXX $X.X for decrease X.X% in per million, mid-March gallon, retail GDSO more rent details. dealers. lessee prices, an contribution to company-operated as from million a in per the and product by the coupled were fuel comprised $XX.X was to the gallon performance $XX.X reflecting with our first and in wholesale quarter prices. rapid sharp decrease additional from in which fuel Volumes and X,XXX was beginning contributed At

the Wholesale segment. at Looking

caused of margin quarter XXXX by to the between that Saudi mind of XX% the destruction $XX quarter lowest $XX.X colder the war increased margin a and pandemic-related Russia that temperatures million, conditions million more was XXXX a first product years, in year-over-year. a resulting pricing steepening many curve. prices, driven Arabia in in rapid wholesale and product were market decline in demand and as in one forward favorable First price of Keep

$X.X million includes terminal XXXX. XXXX, impacted distillates take oil of affected and million time margin to in product and the blendstocks by quarter first us end increased gasoline in $XX.X positioned the contango that position. steepening up in while same which from million of in valuation Gasoline million the in our quarter While contributed $XX.X capacity inventory to margin and it negative of the Product oil quarter, adversely XXXX product point million. margins to and of in $XX.X crude products, negatively market. for advantage wholesale margin, was storage residual other related margins was $X.X network oils Product period

Turning bunkering business margin to million million to the Commercial our first decline Product pandemic. $X.X quarter $X.X in decreased reflecting XXXX, of in due segment. the a to

was of and related transaction. acquisition-related crude compared related year the primarily the expenses in as gas and station lower due credit decreased our to salary balances CapEx, part Operating is decrease the $XX.X benefits Interest in well $XX.X of million commission lower expenses, primarily and result store to of relates GDSO Looking first expenses in of of Petroleum Difficulty] expense quarter, $X.X CapEx first expense at repair in million $X as and credit at quarter. interest on million million and $X maintenance salaries $XX.X million, reduced our million million excluding in expenses. The earlier volume, and expansion of maintenance rate. facility lower incentive million with expenses in the our partly pandemic. to reflecting expense hours, card to lower most business. $XX.X which reflects fees in [Technical reduction $XX.X CapEx acquisitions, was lower Consumers due increases lower increased million to including consisting the first the compensation, the approximately SG&A which period, in quarter QX all to sites, to $X.X the

maintenance expect to million For and strong full the quarter. sheet the $XX to our credit defined in $XX investments CapEx leverage majority $XX of million continue range remains as the balance debt-to-EBITDA funded gasoline X.Xx of the in of end first in of approximately range our in [Technical the we to CapEx million station at Our and XXXX, $XX year consisting Difficulty] expansion was million with with agreement

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

from $XXX $XXX.X million, million our month XX, with under into flexibility, $XXX million As our our and March Agreement were revolving facility. facility million credit group. million total $XXX the increases Among facility $XX.X revolving revolving an million our million. financial letters April to of things, May borrowings other agreement extends million to the for credit, working $XXX reduces capital date $XXX entered working amended credit to capital we Credit borrowings the facility $XXX and the XXXX rate including applicable Adding of maturity bank from from under $XXX.X million the this credit XXXX, to credit outstanding and increases revolving

be including investor Sector Looking and Stifel Conference at virtually in we Insight upcoming Conference. Energy Credit BMA will Investor the several our EIP calendar, the the participating events, Cross Conference,

attending, you. you forward For look be we those who meeting of will with to

the call turn closing me let back Eric to Now, for comments.

Eric Slifka

Daphne. Thanks,

strategic We our through M&A. through initiatives on to of strategic other Looking and and ahead, on we following fuel ourselves a initiative are to opportunities. advantage and take of number positioning grow strategy organic remain low-carbon infrastructure, our focused

robust other positioned the we planned and XXXX for a for that pipeline are have We well projects of and believe future. investments retail

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

Operator

Instructions]. [Operator

line Our Stifel. with first question of comes from Selman the Akyol

Selman Akyol

about Can talk you a the maybe you're in more market? little M&A what bit seeing

Eric Slifka

It's Eric. busy. busy. It's very just just It's very

I by So don't I deals will -- it's try don't know value taxes where disciplined. being bring other us I just at it. of there's to and to -- people of continue busy. lot look things, companies be but to And can sort and are a we we look, fit be do deals and continues it if driven that or

Selman Akyol

sellers expecting, line? seeing reasonable, more in Are more you

Eric Slifka

the our we into system. us, our to deals think deal going that that fit and -- every win us for network I do fit we're and not

don't little. somebody I or so, thinks a a -- it's lot And whether

that to for think we returns I stay and try our disciplined get and for investors make -- it's just sure can company. we the the

Selman Akyol

it. Got

you previously stations charging kind I'm had going? curious of stations, or was how I think at and your that X X just installed of some

Eric Slifka

Electrify might with exact station. high-speed we've don't it very on X, the X%. so Yeah. be but I X%, know low-single usage rate and mean, that's a partnered I America charging digits,

Selman Akyol

it. And then one. last Got

there the comments you growing is guys make can going any been forward? You consistently distribution, have

Daphne Foster

I can don't any you on distributions. terms we in forward of comment there's No, give guidance think

that are sheet I the opportunities think deciding at the in provide We're and is good looking it yes, script the about what -- made best forward. and we you how can to it. investors, use revolving show shape for the sure in balance how return and for doesn't the comment in thought investment distribution, so making us which and

Operator

Our question from with next comes of Chen line the Theresa Barclays.

Theresa Chen

just my touch on do if to and you're on handling trying front learnings of from translatable activities, wanted are your about biofuels diesel is any early to renewable I your to Northeast. wanted that, lessons ask those to the in end the what question

Eric Slifka

on it in -- say, Yes. West pretty diesel renewable Coast say I has I'd the terms I'd us, for mean, it's -- of the handling seamless. been,

I think, the in maybe ability and manage seamless. it's it a our the and is a been transported. and side little it gets bit different of take that how and control facilities just to ability terms it, production to But our than bit

Theresa Chen

Got a is being to and distributed it. And on bit the transportation also within product handle a puts just process the understanding related of Oregon so the economic primarily you this, to do or California? takes the bit little

Eric Slifka

just you to I So ship partner But or can't tell wherever It's by it business certainty. as yes, with XXX% to it. a long-term takes throughput throughput. want right? it's take and -- in they It's they California, likely barge out going are a facility, that it that and we agreement the a to deliver

Theresa Chen

or before with, agreements what it. think agreements of destination production typically -- you fee as incremental coming to relative you and when And but throughput economics traditional the do terminals, online would like the likely these a begin renegotiate petroleum product about you contract command. need Got when is to capacity

Eric Slifka

that Difficulty] premises or really mean, to marketplace. are rail it that positioned I [Technical they rail in be think that are the be has dock, it's well I Yes. out. right? it I has the those tankage different. has And to don't -- much and in all healthy help particular a mean, that large It -- asset

se, the those -- that question to to you've on attributes certain competitive for be the but per business. real so, got have rates And isn't it's

Theresa Chen

for Assembly, will the opportunity is as standard Washington the additional Got it. Pacific in own products legislation there And handle recently its since Northwest? fuel passed demand incremental terminal be more end clean State that to State to that

Eric Slifka

be piece from over infrastructure on I for ourselves to this either have right? that Yes. believe of become for state pressure on be continue it's away follow I the it mean, California really carbon but their end footprint. Coast exactly, renewable throughout do on do not whether and infrastructure we but or sort state say, and what going going specifically, very I a broader gets it's going West as that how will I'm the base the day, additional a at just the demand believe of every just Historically, So is it's take to to our to do going lower diesel I I there not I if we country, inside renewable sure be for it's forward, generally that to liquid we there's going partners? fuel to that general, used to fuels. the and of other those time, Because believe historical -- would a opportunities fuels is fuel, take move way, led move every or some just think

it's think, opportunity. be So it's I to going an --

opportunity them then and to just all very but So -- change into of anxiety, try So change are lot new a and because They some glass are that's is would a at you've different, be and opportunities. may got to market all it this it be look as full. them, half right? creates they half aware I the just create this change generally, of this

Operator

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

Ned Baramov

fuel segment, your good off, in fuel congrats question the month and first margins in talk the on maybe could you how about demand than GDSO the My higher in this April year, new First and have for and been driving luck is Greg, what like your of to retirement, Daphne, margins trending role. your last normal oil on rising rest and May prices year? fuel we what of as be is more the up expectation the saw season crude shapes given

Daphne Foster

the of be And cash an years say gallon. this were you I specifics 'XX, would in actually terms of were but certainly see in X continue back and adoration give April last margin, I'll looking this, of that continue an terms saw that, margins first off-market, 'XX was back better. our to Ned, to the the in at prices first over 'XX quarter -- I And of overall, of this couple quarter on we to last year. $X.XX months $X.XX up XXXX quarter at going per going and of is then, margins and

This mid-March per quarter, and $X.XX prices $X.XX about $X.XX. gallon up that's increased then through it was and

So the to margins we pleased in continue off-market. an be with relative

be will has volume, expectation shortfall as our an increases. the that to continue volumes and up offset best, been is somewhat of should pick to traffic will the modern volumes so, in continue but And

Ned Baramov

quarter it Got or it. the the you delayed of a so. seems Connecticut that then, it And by talk closing is acquisition, about could

longer you So this, any extent the transaction? to you can driving to can this I related just what's wondering comment here. the process metrics was financial And provide on also

Eric Slifka

Yes.

in a -- of timing, just bit. we just So little the slipped it terms it's --

agencies a government to to come We continue with work to resolution.

we again? the but limit just feel was there. slipped -- So question, it like What really the second

Ned Baramov

the of you if give are metrics I could close decline you totally financial any related this completion a given provide to to to this, you deal. understand If the comment how on transaction?

Eric Slifka

would of I'd -- cut we deals, are that's on consistent. deals earlier the our our call, the is, roughly kind in what said I comments Yes. say I say mid-teens

Ned Baramov

deal. need it in the last Okay, to March, or got Connecticut be preferred presume the funding question, the bulk then, issuance And the I you period the funding the close it. of of

the look of acquisitions? do future you funding transactions, how potential about you at think other As potential M&A

Daphne Foster

and $XXX sizable Ned, will. outstanding you under today our have we a so $XX if have well, we revolver, revolver million seen flexibility, million a

making As be you our on than and else. looking race upto that sure anything said that order, we the revolver but is opportunistic our sheet and at million that balance we're always $XXX leverage in going good to more impressed, be being upsized not

Operator

questions I further would this no to at over time. the comments. are like turn Slifka closing to back There Mr. floor for

Eric Slifka

morning. for joining this look weekend. on Everybody, to you enjoy our Thank you Thank keeping forward you. us We the updated progress.

Operator

concludes This teleconference. today's

your disconnect Thank lines may for at you this time. You your participation.

Global Partners (GLP) 7 May 212021 Q1 Earnings call transcript