{"id":523968,"date":"2021-08-05T07:34:01","date_gmt":"2021-08-05T11:34:01","guid":{"rendered":"https:\/\/www.marketnewsdesk.com\/index.php\/suburban-propane-partners-l-p-announces-third-quarter-results\/"},"modified":"2021-08-05T07:34:01","modified_gmt":"2021-08-05T11:34:01","slug":"suburban-propane-partners-l-p-announces-third-quarter-results","status":"publish","type":"post","link":"https:\/\/www.marketnewsdesk.com\/index.php\/suburban-propane-partners-l-p-announces-third-quarter-results\/","title":{"rendered":"Suburban Propane Partners, L.P. Announces Third Quarter Results"},"content":{"rendered":"
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PR Newswire<\/p>\n<\/p><\/div>\n

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\n WHIPPANY, N.J.<\/span>, Aug. 5, 2021<\/span> \/PRNewswire\/ — Suburban Propane Partners, L.P. (NYSE:SPH), today announced earnings for its third quarter ended June 26, 2021<\/span>. <\/p>\n

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\n \"Suburban
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Consistent with the seasonal nature of its businesses, the Partnership typically experiences a net loss in the third quarter of its fiscal year.\u00a0 Net loss for the third quarter of fiscal 2021 was $26.0 million<\/span>, or $0.41<\/span> per Common Unit, compared to a net loss of $15.6 million<\/span>, or $0.25<\/span> per Common Unit, in the prior year third quarter.\u00a0 Adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA, as defined and reconciled below) for the third quarter of fiscal 2021 amounted to $23.3 million<\/span>, compared to $32.2 million<\/span> in the prior year third quarter. <\/p>\n

In announcing these results, President and Chief Executive Officer Michael A. Stivala<\/span> said, “We are pleased to report another solid quarter of sales volumes and earnings, as the mix of volume between residential and non-residential customer demand continued to normalize toward pre-pandemic levels.\u00a0 Gross margins and Adjusted EBITDA in the prior year third quarter benefitted from unusually high demand from the residential sector, resulting from cooler spring temperatures at a time when stay-at-home measures were most prevalent. Despite the higher residential demand in the prior year, total volumes sold in the third quarter of fiscal 2021 exceeded the prior year by nearly 2%, and were 4% higher than the fiscal 2019 third quarter. These improvements are a testament to our continued efforts to deliver exceptional service to our customers, and the positive momentum in our customer base growth and retention initiatives.”<\/p>\n

Mr. Stivala continued, “In addition to our continued strong operating performance, we used excess cash flows to reduce total debt by approximately $30 million<\/span> during the quarter, which brings our year-to-date debt reduction to $68 million<\/span>, and we opportunistically refinanced $775 million<\/span> of senior notes — extending maturities and lowering our interest requirements.\u00a0 We also made additional investments in our minority-owned subsidiary, Oberon Fuels (“Oberon”), as they achieved several milestones toward our collective efforts to commercialize clean-burning, renewable dimethyl ether (“rDME”).\u00a0 Specifically, in June 2021<\/span>, Oberon began production of the first-ever rDME in the United States<\/span>, and is the only current commercial producer of this molecule in the world.\u00a0 Additionally, Oberon, through a public-private partnership with Los Alamos National Laboratory, has secured funding from the U.S. Department of Energy to develop and scale-up steam reforming technology to produce renewable hydrogen from rDME.\u00a0 We remain focused on executing our strategic growth initiatives — growing our propane market share, strengthening our balance sheet, investing in the build out of a renewable energy platform and returning capital to unitholders.”<\/p>\n

Retail propane gallons sold in the third quarter of fiscal 2021 of 76.7 million gallons increased 1.7% compared to the prior year third quarter, primarily due to an increase in commercial and industrial demand resulting from the easing of COVID- related business restrictions and an improving economy, which more than offset normalizing residential demand in this counter-seasonal quarter. \u00a0Residential volumes in the prior year third quarter benefitted from cooler average temperatures in April and May of 2020, combined with stay-at-home measures instituted in the early stages of COVID-19.\u00a0 The mix of volumes between residential and non-residential customers returned to a more traditional, pre-pandemic level, during the third quarter of fiscal 2021.\u00a0 Average temperatures (as measured by heating degree days) across all of the Partnership’s service territories for the fiscal 2021 third quarter were 9% warmer than both normal and the prior year third quarter. <\/p>\n

Average posted propane prices (basis Mont Belvieu, Texas<\/span>) for the third of fiscal 2021 were 111.5% higher than the prior year third quarter. \u00a0Total gross margins for the third quarter of fiscal 2021 of $155.0 million<\/span> increased $7.8 million<\/span>, or 5.3%, compared to the prior year third quarter.\u00a0 Gross margins for the fiscal 2021 third quarter included an $11.1 million<\/span> unrealized non-cash gain attributable to the mark-to-market adjustment for derivative instruments used in risk management activities, compared to a $0.9 million<\/span> unrealized non-cash gain in the prior year third quarter.\u00a0 These unrealized gains were excluded from Adjusted EBITDA for both periods in the table below.\u00a0 The shift in volume mix between residential and non-residential customers, back to a more traditional level for the third quarter, also resulted in lower blended unit margins compared to the prior year third quarter.<\/p>\n

Combined operating and general and administrative expenses of $119.8 million<\/span> increased $6.6 million<\/span>, or 5.8%, compared to the prior year third quarter, primarily due to higher volume-related variable operating costs, as well as an increase in self-insured medical costs and higher vehicle costs.\u00a0\u00a0\u00a0 <\/p>\n

During the third quarter of fiscal 2021, the Partnership utilized cash flows from operating activities to repay $29.8 million<\/span> of debt.\u00a0 As a result of the debt repayment during the third quarter, the Consolidated Leverage Ratio for the trailing twelve-month period ending June 26, 2021<\/span> measured 3.96x.\u00a0 In addition, in May 2021<\/span> the Partnership opportunistically refinanced its previously outstanding $525 million<\/span> 5.50% Senior Notes due 2024 and $250 million<\/span> 5.75% Senior Notes due 2025 with a combination of borrowings under the Revolving Credit Facility and the issuance of new $650 million<\/span> 5.00% Senior Notes due 2031.\u00a0 This refinancing will result in annual net interest expense savings of approximately $7 million<\/span> and extend average debt maturities by more than 3.5 years.<\/p>\n

As previously announced on July 22, 2021<\/span>, the Partnership’s Board of Supervisors declared an increase in the Partnership’s quarterly distribution from $0.30<\/span> to $0.325<\/span> per Common Unit for the three months ended June 26<\/span>, 2021.\u00a0 On an annualized basis, this distribution rate equates to $1.30<\/span> per Common Unit, and represents an increase of $0.10<\/span> per Common Unit, or 8.3%, compared to the annualized rate from the previous quarter.\u00a0 The distribution is payable on August 10, 2021<\/span> to Common Unitholders of record as of August 3, 2021<\/span>.<\/p>\n

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\n About Suburban Propane Partners, L.P.
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\n <\/b>Suburban Propane Partners, L.P. (“Suburban Propane”) is a publicly traded master limited partnership listed on the New York Stock Exchange.\u00a0 Headquartered in Whippany, New Jersey<\/span>, Suburban Propane has been in the customer service business since 1928 and is a nationwide distributor of propane, renewable propane, fuel oil and related products and services, as well as a marketer of natural gas and electricity and an investor in low carbon fuel alternatives, servicing the energy needs of approximately 1 million residential, commercial, governmental, industrial and agricultural customers through approximately 700 locations across 41 states.\u00a0 Suburban Propane is supported by three core pillars: (1) Suburban Commitment \u2013 showcasing the Suburban Propane’s 90+ year legacy, and ongoing commitment to the highest standards for dependability, flexibility, and reliability that underscores Suburban Propane’s commitment to excellence in customer service; (2) SuburbanCares \u2013 highlighting continued dedication to giving back to local communities across the Suburban Propane’s national footprint and (3) Go Green<\/span> with Suburban Propane – promoting the clean burning and versatile nature of propane and renewable propane as a bridge to a green energy future and developing the next generation of renewable energy.\u00a0 For additional information on Suburban Propane, please visit www.suburbanpropane.com<\/a>.<\/p>\n

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\n Forward-Looking Statements
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\n This press release contains certain forward-looking statements relating to future business expectations and financial condition and results of operations of the Partnership, based on management’s current good faith expectations and beliefs concerning future developments.\u00a0 These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those discussed or implied in such forward-looking statements, including the following:<\/i>\n <\/p>\n