GLP - Earnings call transcript Q4 2021

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Operator

Good day, everyone, and welcome to the Global Partners Fourth 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, Mr. Gregory Hanson, Chief Operating Officer, Mr. General Vice Acting and of and Mr. Acquisitions, Romaine; Counsel President and Mergers Mark Geary. Sean I time, over this like to At would Mr. call to turn the opening for remarks. Geary Please go ahead, sir.

Sean Geary

joining everyone. you morning, for Good Thank us.

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

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

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

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

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

Eric Slifka

amid the morning, Sean. thank to you, contributed the Global. for and and to our a recovery margins Retail Sustained solid fuel Good for portfolio quarter, our across Thank improve joining year-over-year the continued in quarter economy. store increased volume segment you us. GDSO everyone, momentum while performance convenience U.S. fourth in demand in

for XXXX virtually the affected product in that challenges consider past which remarkable. that is year. all extreme to benefit million was industries in That wholesale results the related the full capped you product a forward QX of extraordinary remarkable saw Combined a is we which in the successful product and result result the when XXXX pricing of year, curve. Our on shift as macroeconomic to par continue came with XXXX. the QX pandemic the have $XXX at a during navigate we margin, That margins in

long-term properties. speaks regions serve. businesses of high-value XXX portfolio value us and a comprised unitholders of XXX for the vertically year past leased create our the deliver and our we owned consumers exceptional this performance the approximately for assets assets, strength performance across Our to integrated and help These

on our advance an Revere for of transaction In our me which $XXX closing expected Terminal conditions. the to in let million close sell agreement Now year, of to cash. markets. Boston recent we our this growth highlights, subject touch The November, strategy signed in in driving consolidating first half Harbor customary to profitable in is

demonstrates upfront lease the As of of provides our and base. transaction the optimizing a part allocation from post-closing. of the From our the agreement. over terminal continue will cash flows buyer the infrastructure closing, operations strong asset perspective, life Upon the agreement, cash we back the us proceeds at significant key deal capital and goal with

convenience returns customers. and acquisition each relationships and Consumers case, This sites Connecticut our with added the the the stores strong we Wheels of X supply Miller's retail and Connecticut. scale, Market. fuel operations that Connecticut XX transaction the And New of locations. enables fuel-supply and York. Miller's company-operated with month, a company-owned Neighborhood integrated model portfolio. fuel nearly company-operated and and leverage our January, at of our XX business Like in stores, and including to related guests' and XX XX Neighborhood convenience in Petroleum in presence base Global, in with to acquisitions agreements agreements On purchase are Market Virginia purchase us side, The loyal completed to XX expanded enhance In of supply sites The we family-founded XX Petroleum included we added transaction closed experience. Consumers sites businesses our recently

Pereira, the past we in where over for extend coordinating and he personal to role director commitment of in XXXX also the his In retired clients, I'd Ken we as a retirement, initial I'd skills Products of X as as as the consumer a variety on had basis, Board X, the Group On been Consumer grow. which distribution Directors progress In capital unitholders to my note, relevant decades Jaime brings to warm who a was to XX Board joined our to experience, firm's to February financial partner December. per our accounting him as record who our Global. close business a oversaw of years. maintaining Ernst partner unit This the distribution. by of the XXXX. on Young, to units a played enacted XX in of excellent unitholders. to to in Watchmaker, Jaime gratitude public from a the since like to agreed at express $X.XX help Jaime including & Turning and Ken key unit offering will continue and wish on welcome Northeast, health us happiness. to our returning February Board well paid an distribution as per Board common in spent to a QX. $X.XX our our like the January, on annualized product

in us appropriate all returns. skills Looking complement objectives. market ahead, very opportunities to continue profitable and mid-teen and clear: achieve business XXXX growth our remains and investing our to and that generate in our by optimizing enable to to our strategy The is assets we that acquiring consider active, portfolio M&A evaluate continue we

Our forefront role the transition in energy is also plans. of at our

solutions grassroots of EV a fuels, year, aggressively the monetize assets end, pursuing incorporating members continue is today. have electric that that the for means to we as The infrastructure adoption in and renewable this and strategist adoption. charging XXX over promote while Earlier climate their promoting position our opportunities portfolio. onboarded Freedom, policies innovation utilize that our advance We an coalition encouraging we coalition vehicle as meet advocates, place to and To nearly our our responsibly part to to and utilize policy-driven clean terminal Carbon energy X,XXX sustainability goals demonstrates project for our we of commitment team. equipment electric planning are into

from of charging awarded to at controlled fast-charging Massachusetts look We were public-private Commonwealth electric ports to space for and of the in X continue retail old locations. the vehicle partnerships our install or recently funds

whose us continue commitment, the Finally, delivering mindset outstanding I growth to want execution and acknowledge allows to global results. team

we look me XXXX, his underpin With Greg let ability execute As our invest financial our call will over we review. strategy. who that, the for to turn continue Greg? our people in to to to

Gregory Hanson

good everyone. and morning, Thank you, Eric,

a we fourth highlighted noted, in segment. solid a performance Eric with continued by XXXX our capped GDSO As strength in quarter, strong

EBITDA, results, May million and DCF compensation include net expenses former and go through in associated mind Counsel of EBITDA we As in income, full total with in a the $X.X and XXXX benefits the of our General please year and that in our keep August. the adjusted retirement in of passing CFO

related experienced full the of to quarter a For on XXXX. debt of the the and million largely early the higher in increase well notes compared with $XX.X include the fourth million XXXX to as C-stores. XXXX our GDSO loss quarter Adjusted the metrics in million the volume segment, year EBITDA senior of X% our activity of which was The in for million margin of XXXX. and extinguishment same fourth fourth redemption due increased was XXXX, $XX.X these $X.X as quarter $XX fuel period for

For the of with year, million same million EBITDA full $XXX.X period $XXX.X adjusted XXXX. was the in compared

Eric million the our of of forward XXXX. from year same was fourth $XX.X the the product period second pricing compared XXXX extreme the for in our $X.X As the curve noted, income strengthened million year Net results shift significantly for quarter full XXXX an with benefited quarter in of Wholesale that segment.

million period. to for was December in of X.Xx quarter was full was net distributions in prior XX, XXXX coverage DCF the unitholders. TTM for in compared after of compared income million year as full fourth million XXXX. distribution DCF partnership with with XXXX. $XXX.X million X.Xx $XX.X or $XXX.X XXXX of $XXX.X to the was with $X.X the year preferred For compared attributable our for year factoring XXXX, million million $XX.X the XXXX,

in $XXX.X year quarters reflecting reflecting QX year up the second distribution year. to million, prior GDSO volume a in per $X.XX $X.XX of increase third segment quarter Turning contribution to increased from a we margin margin product our details. earlier the million the in period, the $XXX fuel from to margins, and gasoline to $XX.X The in average saw up C-store was and fuel period. the gallon $XX.X activity million 'XX continuation million, of was strong margin the product

relatively gasoline to from the price which wholesale product price convenience to of to the our contributed food stores. from flat led the operations store up and $X.XX fourth the sundries XXXX increased spread quarter $X.X from due the high in million, the sales, margin, end quarter million Station rental low at convenience were in activity and experienced the an of beginning income quarter. the to $XX.X prepared includes quarter, volatility prices While over

offset full the prior $XXX.X increased year million For in per XXX XXXX, period. of for $X.XX to volume year of a as $X.XX million million the million year gallon $XX GDSO lessee from $XX.X margin $XXX.X $XX.X At product year, increase $X.XX X,XXX full up XXX product XXXX. margin in contributed fuel Station full portfolio the Operations the product agents, XXXX. a XXXX, company-operated contract end margin XXX decrease distribution million sites, in XX.X% of dealers from GDSO XXXX, and margin sites, from Gasoline to comprised $XXX.X our commission for dealers. of up was million XXX consisted

segment. margin to margin, XXXX. up include million quarter, year million period from oil to at residual and blendstock more reflecting favorable $XXX,XXX $XX.X gasoline contributed $XX.X product Fourth distillates the crude product conditions market in margin a and in Looking gasoline and other and $X.X in million. up earlier. favorable other the margin same partially fourth negative conditions oils down oils the Wholesale which related quarter product less largely to Gasoline was gasoline and by from decreased related in products, million, in Product million ethanol. products, million oil $XX.X market $XX.X was $X.X blendstocks, wholesale market million XXXX from offset from $X.X Product

to Crude year. from the $XX.X For market $XX.X margin million from and was full products decreased oils million Product product million million less negative product related full $XX.X year $XX.X other full million million. conditions. XXXX, million margin Gasoline negative from the year, gasoline $XXX,XXX Wholesale to declining decreased blendstock for oil $XX.X to to XXXX. for favorable $XXX.X and $XX.X margin decreased due product margin

as increased fourth in to sold margin increased quarter Product product an factors segment. drove million margin in to Commercial $X.X segment's full increase $X.X the million the million. also due $X.X million, margins. improved to primarily the results to Turning year $XX.X Those and volumes

operations, fourth the million and with million million the fourth SG&A SG&A for to stores. Looking at and increased $XX.X for our expense fees. credit GDSO in were to higher $XX.X $XXX.X price, million and was increases primarily On increased up quarter and greater higher $XX.X related quarter fees The expenses increases part full $X.X salary to a due the largely year. expense in to the million convenience full million to Operating year $XX.X rent expenses. $XXX.X reflecting $XX.X due our basis, to in expenses activity professional in and benefits volume wages part million. associated higher to increased card at million,

As million mentioned expenses in a including XXXX, we onetime number earlier. incurred mentioned of earlier, $X.X and expenses during SG&A benefits onetime compensation

the million million SG&A would in approximately with the Excluding $XX.X a year. year million have was $X.X earlier. compared $XXX.X expense $XX Interest million, been the quarter, for

interest million For $XX.X full the of $XX.X majority CapEx $XX expense million, million million, in of relates $XXX.X stores. $XX.X acquisitions. CapEx, million, fourth of of million to CapEx excluding $XX.X maintenance of XXXX was guidance maintenance in was year expansion of slightly million $XX.X million and XXXX, with guidance $X.X which of line below expansion $XX CapEx, million in in to $XX consisting declined XXXX to and our million our CapEx, million $XX $XX the consisting to convenience year approximately million. full of our for quarter CapEx

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

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

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

and As November under to December million This facility. $XX.X the total under agreement of under consists $XXX million of $XXX XXXX, which increased borrowings was million revolving our capital in facility, million credit million outstanding $XXX were working revolving our credit million. credit by $XXX.X XX, $XXX.X

XX, Looking at March Credit On the be Conference. our IR Global meetings at XXth Annual upcoming will hosting Yield High we calendar. Leveraged one-on-one Agricole and Finance

participating, are look meeting who you with we you. to of those forward For

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

Eric Slifka

Thanks, Greg.

by and we strategy deliver to continue on optimize recent As our transactions, to assets. our grow demonstrated

on and deals that enable provide business to are leverage to acquisitions flow integrated our model. cash supply We and focused scale, ongoing us relationships

power our positioning putting to significant a investing are people play while effort transition, keeps growing We us that critical also the innovating. infrastructure role in into assets and the and energy in

infrastructure U.S., products, critical vital provide the to tomorrow. services our significant a serving we today and confident a As in the of goods ability business energy are of portion and

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

Operator

Instructions] comes the first of Akyol [Operator line Our Selman question from with Stifel.

Selman Akyol

in the with prices? just maybe our pressure how are this given we've current upward just you environment off margins on going Can start consistent seen

Eric Slifka

kept more off, those costs still retail. that margins appears pace. at increase, bit to in margins Selman, increased markets the been the in kept as past or as say far the shift those last costs, over it's there. are increase over a passes to years how little Volumes guarantees now. I But than either and commodity has the are there X costs given interesting it's with been increased would and of have Eric. There seen we've flow are pace almost really couple through margin and a clearly costs years, obviously, market in the no have but needed change that it so it increasing

Selman Akyol

looking I for, installed? appreciate Electric there's discuss maybe Strategist? hoping get maybe many you a any And pull bit right. more of you're be we or that. I of expecting you anything how what that don't you should could terms I All Or with guys in can little just your Innovation guess. if know out goalpost charges then

Eric Slifka

is Yes. still think, difficult. -- I I look, the mean it's math

that do not on with example, about side, very, different think electric say, to so to a we thoughtful to the way thinking broad-brush really important. business by And thoughtful way that say state how very be there's about we're is than, very products figure requirement and and right? terminalling, going commodity less of But how fuels out governments the be That's I be let's and a it federal is to to different -- going in approach trying are to to the the that's and working expand carry gasoline. that

that's I opportunity so I and there's that pressure to happens change the going think and that. a an be to going fundamental And around business, be to think

Selman Akyol

you noted, little QX, some about there and fees $X in onetime Daphne wages. just me Got it. a and bit let hear out million. higher of for were Coming G&A, there on I clearly Then of benefits the you you ask as

the you maybe of So quarter, to sort the would million because wondering, fees acquisitions. when what $XX run really of I expense sort rate $XX at can fourth should And be would ongoing professional look I'm about? we way at any couple sort clearly, done I'm less just that Is of the looking million. quantify higher is be you've there a thinking of help

disposition a had as well. You've

So maybe just as a fees recurring I'm run just to to aren't professional and get figure trying out trying to the rate.

Gregory Hanson

Hanson, but will and some acquisition expectation say, you expense, high. had That onetime, fourth run of expense mean, had break in severance unfortunately, a I have the This we I the from is onetime said, number we things. passing out is Selman. there. of our We help we in Greg now colleague didn't quarter, even quarter. I a out, did is the right rate overall, actually would them little another additional

added our further areas expand HR the overhead technology. staff investing to employee hire push But We're human additional heavily to the related on also acquisitions. big making and capital we're our also for to have a We recruiting and initiatives business. sort in of help also top some us

run that going was be better bit fourth say little little forward. should a bit overall I'd rate quarter So and the the heavy, a

Selman Akyol

you're you from on can impacts inflation? And comment Understood. also seeing then just the just maybe

Gregory Hanson

to impacts along but some price to would we start you ahead. been on able business. increases our and say can our side, from I our consumers. C-store suppliers, we've those pass have would to and material go been can has the I Mark, mean I say not seen Eric Yes. there off, I

you better C-store historically, if think benefited historically space much not I periods and potential of but during done periods -- look recessions. has the inflation of benefited,

I not seen we we've we're it. say CapEx but look could inflation at on side seeing impacted would the from potentially there that our that's to the materials. overall, expansion way date. So some We've seen returns equipment and some building CapEx, nothing impact our

Selman Akyol

me. And be assets source guys Should this that for more about Great. as another being thinking have you of cash any for year? one sale. we last Do then potential

Eric Slifka

buy you respect And it obviously, change. what with always consolidate optimize our we we So may to individual look business as have. assets and to

always, assets. Is the natural on so And thought right there a like look Not right say churn is something material aware doing the we a get for it. deal somebody that could hard I'm anything take horizon? not say, if would but of I'd and to that that then we came with along the at there asset that's of, we

Gregory Hanson

Yes.

number net of $X retail or stuff. big Nothing portfolio We have as proceeds about we in as of that our a we've the got still, on sales, asset but sale. Eric material our of turn million upgrading for sites course market XXXX. normal in We from through mentioned, Selman, are sort

do I perspective, NTIs raze-and-rebuilds. capital do a source and financing of view reinvest it as expansion So from into our I on sort of a to CapEx proceeds

Eric Slifka

there's And try bigger I today to at very mean, would don't and be anybody I ever and years and going ever industrial ago, right? if Yes. have efficient opportunity. that much, for so much do Selman, broadly, if is numbers we I going prices can X we're imagined net triple think think than space

Operator

I like to the now over to closing back comments. Mr. for would floor you turn Slifka,

Eric Slifka

and us a Thanks, on Thank have look keeping you this to We joining day. you forward our good everyone, updated progress. for morning.

Operator

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

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

Global Partners (GLP) 28 Feb 222021 Q4 Earnings call transcript