Global Partners LP (NYSE: GLP) (“Global” or the “Partnership”)
today reported financial results for the second quarter ended June
30, 2024.
CEO Commentary
“Global Partners achieved year-over-year growth across all key
financial metrics in the second quarter,” said Eric Slifka, the
Partnership’s President and Chief Executive Officer. “These results
underscore the effectiveness of our integrated business model and
the strategic advantages of our diversified portfolio of liquid
energy terminals, fueling stations and convenience markets.
“Over the past nine months, we have invested more than $500
million to significantly expand our Wholesale segment footprint
through the strategic acquisition of a combined 29 terminals from
Motiva Enterprises and Gulf Oil, more than doubling our storage
capacity to 21.4 million barrels,” Slifka said. “We’re pleased with
the performance of these assets. Our expanded network bolsters our
terminal operations and opens new avenues for growth, further
enhancing our earnings power and driving sustained value for our
unitholders.”
Second-Quarter 2024 Financial Highlights
Net income was $46.1 million, or $1.10 per diluted common
limited partner unit, for the second quarter of 2024, compared with
net income of $41.4 million, or $1.05 per diluted common limited
partner unit, in the same period of 2023.
Earnings before interest, taxes, depreciation and amortization
(EBITDA) was $118.8 million in the second quarter of 2024 compared
with $90.7 million in the same period of 2023.
Adjusted EBITDA was $121.1 million in the second quarter of 2024
versus $90.4 million in the same period of 2023.
Distributable cash flow (DCF) was $73.1 million in the second
quarter of 2024 compared with $54.8 million in the same period of
2023.
Adjusted DCF was $74.2 million in the second quarter of 2024
compared with $53.3 million in the same period of 2023.
Gross profit was $287.9 million in the second quarter of 2024
compared with $242.7 million in the same period of 2023.
Combined product margin, which is gross profit adjusted for
depreciation allocated to cost of sales, was $319.6 million in the
second quarter of 2024 compared with $265.6 million in the same
period of 2023.
Combined product margin, EBITDA, adjusted EBITDA, DCF and
adjusted DCF are non-GAAP (Generally Accepted Accounting
Principles) financial measures, which are explained in greater
detail below under “Use of Non-GAAP Financial Measures.” Please
refer to Financial Reconciliations included in this news release
for reconciliations of these non-GAAP financial measures to their
most directly comparable GAAP financial measures for the three
months and six months ended June 30, 2024, and 2023.
Gasoline Distribution and Station Operations (GDSO) segment
product margin was $221.5 million in the second quarter of 2024
compared with $199.1 million in the same period of 2023. Product
margin from gasoline distribution increased to $147.3 million from
$127.9 million in the year-earlier period, reflecting higher fuel
margins (cents per gallon). Product margin from station operations
increased to $74.2 million in the second quarter of 2024 from $71.2
million in the second quarter of 2023.
Wholesale segment product margin was $91.9 million in the second
quarter of 2024 compared with $59.7 million in the same period of
2023. Gasoline and gasoline blendstocks product margin increased to
$70.4 million in the second quarter of 2024 from $39.0 million in
the same period of 2023, driven primarily by the acquisition of
liquid energy terminals from Motiva Enterprises LLC in December
2023 and by more favorable market conditions in gasoline. Product
margin from distillates and other oils was $21.5 million in the
second quarter of 2024 compared with $20.7 million in the same
period of 2023, primarily due to more favorable market conditions
in distillates offset by less favorable market conditions in
residual oil.
Commercial segment product margin was $6.2 million in the second
quarter of 2024 compared with $6.8 million in the same period of
2023 primarily due to less favorable market conditions.
Total sales were $4.4 billion in the second quarter of 2024
compared with $3.8 billion in the same period of 2023, primarily
due to an increase in volume sold. Wholesale segment sales were
$2.6 billion in the second quarter of 2024 compared with $2.1
billion in the same period of 2023. GDSO segment sales were $1.5
billion in each of the second quarters of 2024 and 2023. Commercial
segment sales were $280.9 million in the second quarter of 2024
compared with $226.5 million in the second quarter of 2023.
Total volume was 1.6 billion gallons in the second quarter of
2024 compared with 1.3 billion gallons in the same period of 2023.
Wholesale segment volume was 1.1 billion gallons in the second
quarter of 2024 compared with 809.6 million gallons in the same
period of 2023. GDSO volume was 407.0 million gallons in the second
quarter of 2024 compared with 417.4 million gallons in the same
period of 2023. Commercial segment volume was 119.5 million gallons
in the second quarter of 2024 compared with 102.5 million gallons
in the same period of 2023.
Recent Developments
- Global announced a cash distribution of $0.7200 per unit ($2.88
per unit on an annualized basis) on all of its outstanding common
units from April 1, 2024 through June 30, 2024. The distribution
will be paid on August 14, 2024 to unitholders of record as of the
close of business on August 8, 2024.
Financial Results Conference Call
Management will review the Partnership’s second-quarter 2024
financial results in a teleconference call for analysts and
investors today.
Time:
10:00 a.m. ET
Dial-in numbers:
(877) 709-8155 (U.S. and Canada)
(201) 689-8881 (International)
Please plan to dial in to the call at least 10 minutes prior to
the start time. The call also will be webcast live and archived on
Global Partners’ website, https://ir.globalp.com
About Global Partners LP
Building on a legacy that began more than 90 years ago, Global
Partners has evolved into a Fortune 500 company and
industry-leading integrated owner, supplier, and operator of liquid
energy terminals, fueling locations, and guest-focused retail
experiences. Global operates or maintains dedicated storage at 54
liquid energy terminals—with connectivity to strategic rail,
pipeline, and marine assets—spanning from Maine to Florida and into
the U.S. Gulf States. Through this extensive network, the company
distributes gasoline, distillates, residual oil, and renewable
fuels to wholesalers, retailers, and commercial customers. In
addition, Global owns, operates and/or supplies more than 1,700
retail locations across the Northeast states, the Mid-Atlantic, and
Texas, providing the fuels people need to keep them on the go at
their unique guest-focused convenience destinations. Recognized as
one of Fortune’s Most Admired Companies, Global Partners is
embracing progress and diversifying to meet the needs of the energy
transition.
Global, a master limited partnership, trades on the New York
Stock Exchange under the ticker symbol “GLP.” For additional
information, visit www.globalp.com.
Use of Non-GAAP Financial Measures
Product Margin
Global Partners views product margin as an important performance
measure of the core profitability of its operations. The
Partnership reviews product margin monthly for consistency and
trend analysis. Global Partners defines product margin as product
sales minus product costs. Product sales primarily include sales of
unbranded and branded gasoline, distillates, residual oil,
renewable fuels and crude oil, as well as convenience store and
prepared food sales, gasoline station rental income and revenue
generated from logistics activities when the Partnership engages in
the storage, transloading and shipment of products owned by others.
Product costs include the cost of acquiring products and all
associated costs including shipping and handling costs to bring
such products to the point of sale as well as product costs related
to convenience store items and costs associated with logistics
activities. The Partnership also looks at product margin on a per
unit basis (product margin divided by volume). Product margin is a
non-GAAP financial measure used by management and external users of
the Partnership’s consolidated financial statements to assess its
business. Product margin should not be considered an alternative to
net income, operating income, cash flow from operations, or any
other measure of financial performance presented in accordance with
GAAP. In addition, product margin may not be comparable to product
margin or a similarly titled measure of other companies.
EBITDA and Adjusted EBITDA
EBITDA and adjusted EBITDA are non-GAAP financial measures used
as supplemental financial measures by management and may be used by
external users of Global Partners’ consolidated financial
statements, such as investors, commercial banks and research
analysts, to assess the Partnership’s:
- compliance with certain financial covenants included in its
debt agreements;
- financial performance without regard to financing methods,
capital structure, income taxes or historical cost basis;
- ability to generate cash sufficient to pay interest on its
indebtedness and to make distributions to its partners;
- operating performance and return on invested capital as
compared to those of other companies in the wholesale, marketing,
storing and distribution of refined petroleum products, gasoline
blendstocks, renewable fuels, crude oil and propane, and in the
gasoline stations and convenience stores business, without regard
to financing methods and capital structure; and
- viability of acquisitions and capital expenditure projects and
the overall rates of return of alternative investment
opportunities.
Adjusted EBITDA is EBITDA further adjusted for gains or losses
on the sale and disposition of assets, goodwill and long-lived
asset impairment charges and Global’s proportionate share of EBITDA
related to its joint ventures, which are accounted for using the
equity method. EBITDA and adjusted EBITDA should not be considered
as alternatives to net income, operating income, cash flow from
operating activities or any other measure of financial performance
or liquidity presented in accordance with GAAP. EBITDA and adjusted
EBITDA exclude some, but not all, items that affect net income, and
these measures may vary among other companies. Therefore, EBITDA
and adjusted EBITDA may not be comparable to similarly titled
measures of other companies.
Distributable Cash Flow and Adjusted Distributable Cash Flow
Distributable cash flow is an important non-GAAP financial
measure for the Partnership’s limited partners since it serves as
an indicator of Global’s success in providing a cash return on
their investment. Distributable cash flow as defined by the
Partnership’s partnership agreement (the “partnership agreement”)
is net income plus depreciation and amortization minus maintenance
capital expenditures, as well as adjustments to eliminate items
approved by the audit committee of the board of directors of the
Partnership’s general partner that are extraordinary or
non-recurring in nature and that would otherwise increase
distributable cash flow.
Distributable cash flow as used in the partnership agreement
also determines Global’s ability to make cash distributions on its
incentive distribution rights. The investment community also uses a
distributable cash flow metric similar to the metric used in the
partnership agreement with respect to publicly traded partnerships
to indicate whether or not such partnerships have generated
sufficient earnings on a current or historical level that can
sustain distributions on preferred or common units or support an
increase in quarterly cash distributions on common units. The
partnership agreement does not permit adjustments for certain
non-cash items, such as net losses on the sale and disposition of
assets and goodwill and long-lived asset impairment charges.
Adjusted distributable cash flow is a non-GAAP financial measure
intended to provide management and investors with an enhanced
perspective of the Partnership’s financial performance. Adjusted
distributable cash flow is distributable cash flow (as defined in
the partnership agreement) further adjusted for Global’s
proportionate share of distributable cash flow related to its joint
ventures, which are accounted for using the equity method. Adjusted
distributable cash flow is not used in the partnership agreement to
determine the Partnership’s ability to make cash distributions and
may be higher or lower than distributable cash flow as calculated
under the partnership agreement.
Distributable cash flow and adjusted distributable cash flow
should not be considered as alternatives to net income, operating
income, cash flow from operations, or any other measure of
financial performance presented in accordance with GAAP. In
addition, the Partnership’s distributable cash flow and adjusted
distributable cash flow may not be comparable to distributable cash
flow or similarly titled measures of other companies.
Forward-looking Statements
Certain statements and information in this press release may
constitute “forward-looking statements.” The words “believe,”
“expect,” “anticipate,” “plan,” “intend,” “foresee,” “should,”
“would,” “could” or other similar expressions are intended to
identify forward-looking statements, which are generally not
historical in nature, although not all forward-looking statements
contain such identifying words. These forward-looking statements
are based on Global’s current expectations and beliefs concerning
future developments and their potential effect on the Partnership.
While management believes that these forward-looking statements are
reasonable as and when made, there can be no assurance that future
developments affecting the Partnership will be those that it
anticipates. Forward-looking statements involve significant risks
and uncertainties (some of which are beyond the Partnership’s
control) including, without limitation, uncertainty around the
timing of an economic recovery in the United States which will
impact the demand for the products we sell and the services that we
provide, and assumptions that could cause actual results to differ
materially from the Partnership’s historical experience and present
expectations or projections. We believe these assumptions are
reasonable given currently available information. Our assumptions
and future performance are subject to a wide range of business
risks, uncertainties and factors, which are described in our
filings with the Securities and Exchange Commission (SEC).
For additional information regarding known material factors that
could cause actual results to differ from the Partnership’s
projected results, please see Global’s filings with the SEC,
including its Annual Report on Form 10-K, Quarterly Reports on Form
10-Q and Current Reports on Form 8-K.
Readers are cautioned not to place undue reliance on
forward-looking statements, which speak only as of the date hereof.
Global undertakes no obligation to publicly update or revise any
forward-looking statements after the date they are made, whether as
a result of new information, future events or otherwise.
GLOBAL PARTNERS LP CONSOLIDATED STATEMENTS OF
OPERATIONS (In thousands, except per unit data)
(Unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
2024
2023
2024
2023
Sales $
4,409,698
$
3,831,690
$
8,555,090
$
7,862,017
Cost of sales
4,121,814
3,589,031
8,052,071
7,397,294
Gross profit
287,884
242,659
503,019
464,723
Costs and operating expenses: Selling, general and
administrative expenses
72,370
66,696
142,151
128,952
Operating expenses
129,959
110,379
250,109
218,732
Amortization expense
1,989
2,018
3,858
4,102
Net (gain) loss on sale and disposition of assets
(303
)
884
(2,804
)
(1,244
)
Total costs and operating expenses
204,015
179,977
393,314
350,542
Operating income
83,869
62,682
109,705
114,181
Other (loss) income and (expense): (Loss) income from equity
method investments
(346
)
1,204
(1,725
)
1,204
Interest expense
(35,531
)
(21,806
)
(65,227
)
(43,874
)
Income before income tax expense
47,992
42,080
42,753
71,511
Income tax expense
(1,843
)
(691
)
(2,206
)
(1,091
)
Net income
46,149
41,389
40,547
70,420
Less: General partner's interest in net income, including
incentive distribution rights
3,802
2,339
6,938
4,121
Less: Preferred limited partner interest in net income
2,097
3,463
6,013
6,926
Less: Redemption of Series A preferred limited partner units
2,634
-
2,634
-
Net income attributable to common limited partners $
37,616
$
35,587
$
24,962
$
59,373
Basic net income per common limited partner unit (1) $
1.11
$
1.05
$
0.74
$
1.75
Diluted net income per common limited partner unit (1) $
1.10
$
1.05
$
0.73
$
1.75
Basic weighted average common limited partner units
outstanding
33,910
33,986
33,936
33,986
Diluted weighted average common limited partner units
outstanding
34,278
34,006
34,273
34,008
(1) Under the Partnership's partnership agreement, for any
quarterly period, the incentive distribution rights ("IDRs")
participate in net income only to the extent of the amount of cash
distributions actually declared, thereby excluding the IDRs from
participating in the Partnership's undistributed net income or
losses. Accordingly, the Partnership's undistributed net income or
losses is assumed to be allocated to the common unitholders and to
the General Partner's general partner interest. Net income
attributable to common limited partners is divided by the weighted
average common units outstanding in computing the net income per
limited partner unit.
GLOBAL PARTNERS LP
CONSOLIDATED BALANCE SHEETS (In thousands)
(Unaudited)
June 30,
December 31,
2024
2023
Assets Current assets: Cash and cash equivalents $
14,114
$
19,642
Accounts receivable, net
602,206
551,764
Accounts receivable - affiliates
10,221
8,142
Inventories
567,018
397,314
Brokerage margin deposits
21,253
12,779
Derivative assets
6,056
17,656
Prepaid expenses and other current assets
79,069
90,531
Total current assets
1,299,937
1,097,828
Property and equipment, net
1,686,543
1,513,545
Right of use assets, net
264,269
252,849
Intangible assets, net
21,660
20,718
Goodwill
426,063
429,215
Equity method investments
87,781
94,354
Other assets
42,491
37,502
Total assets $
3,828,744
$
3,446,011
Liabilities and partners' equity Current liabilities:
Accounts payable $
557,839
$
648,717
Working capital revolving credit facility - current portion
281,200
16,800
Lease liability - current portion
53,973
59,944
Environmental liabilities - current portion
5,493
5,057
Trustee taxes payable
77,627
67,398
Accrued expenses and other current liabilities
199,378
179,887
Derivative liabilities
7,975
4,987
Total current liabilities
1,183,485
982,790
Working capital revolving credit facility - less current
portion
-
-
Revolving credit facility
200,000
380,000
Senior notes
1,185,326
742,720
Lease liability - less current portion
216,888
200,195
Environmental liabilities - less current portion
74,560
71,092
Financing obligations
136,590
138,485
Deferred tax liabilities
66,010
68,909
Other long-term liabilities
60,310
61,160
Total liabilities
3,123,169
2,645,351
Partners' equity
705,575
800,660
Total liabilities and partners' equity $
3,828,744
$
3,446,011
GLOBAL PARTNERS LP FINANCIAL RECONCILIATIONS
(In thousands) (Unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
2024
2023
2024
2023
Reconciliation of gross profit to product margin: Wholesale
segment: Gasoline and gasoline blendstocks $
70,412
$
39,023
$
100,173
$
59,409
Distillates and other oils
21,453
20,699
41,112
53,446
Total
91,865
59,722
141,285
112,855
Gasoline Distribution and Station Operations segment: Gasoline
distribution
147,313
127,883
268,943
248,699
Station operations
74,154
71,196
140,241
133,926
Total
221,467
199,079
409,184
382,625
Commercial segment
6,222
6,757
13,190
14,884
Combined product margin
319,554
265,558
563,659
510,364
Depreciation allocated to cost of sales
(31,670
)
(22,899
)
(60,640
)
(45,641
)
Gross profit $
287,884
$
242,659
$
503,019
$
464,723
Reconciliation of net income to EBITDA and adjusted
EBITDA: Net income
46,149
$
41,389
$
40,547
$
70,420
Depreciation and amortization
35,266
26,797
67,752
53,445
Interest expense
35,531
21,806
65,227
43,874
Income tax expense
1,843
691
2,206
1,091
EBITDA
118,789
90,683
175,732
168,830
Net (gain) loss on sale and disposition of assets
(303
)
884
(2,804
)
(1,244
)
Loss (income) from equity method investments (1)
346
(1,204
)
1,725
(1,204
)
EBITDA related to equity method investments (1)
2,282
15
2,469
15
Adjusted EBITDA $
121,114
$
90,378
$
177,122
$
166,397
Reconciliation of net cash provided by (used in)
operating activities to EBITDA and adjusted EBITDA: Net cash
provided by (used in) operating activities $
24,346
$
265,262
$
(158,356
)
$
245,937
Net changes in operating assets and liabilities and certain
non-cash items
57,069
(197,076
)
266,655
(122,072
)
Interest expense
35,531
21,806
65,227
43,874
Income tax expense
1,843
691
2,206
1,091
EBITDA
118,789
90,683
175,732
168,830
Net (gain) loss on sale and disposition of assets
(303
)
884
(2,804
)
(1,244
)
Loss (income) from equity method investments (1)
346
(1,204
)
1,725
(1,204
)
EBITDA related to equity method investments (1)
2,282
15
2,469
15
Adjusted EBITDA $
121,114
$
90,378
$
177,122
$
166,397
Reconciliation of net income to distributable cash flow
and adjusted distributable cash flow: Net income $
46,149
$
41,389
$
40,547
$
70,420
Depreciation and amortization
35,266
26,797
67,752
53,445
Amortization of deferred financing fees
1,873
1,364
3,704
2,711
Amortization of routine bank refinancing fees
(1,194
)
(1,155
)
(2,387
)
(2,293
)
Maintenance capital expenditures
(8,946
)
(13,595
)
(20,683
)
(23,155
)
Distributable cash flow (2)(3)
73,148
54,800
88,933
101,128
Loss (income) from equity method investments (1)
346
(1,204
)
1,725
(1,204
)
Distributable cash flow from equity method investments (1)
673
(272
)
(470
)
(272
)
Adjusted distributable cash flow
74,167
53,324
90,188
99,652
Distributions to preferred unitholders (4)
(2,097
)
(3,463
)
(6,013
)
(6,926
)
Adjusted distributable cash flow after distributions to preferred
unitholders $
72,070
$
49,861
$
84,175
$
92,726
Reconciliation of net cash provided by (used in)
operating activities to distributable cash flow and adjusted
distributable cash flow: Net cash provided by (used in)
operating activities $
24,346
$
265,262
$
(158,356
)
$
245,937
Net changes in operating assets and liabilities and certain
non-cash items
57,069
(197,076
)
266,655
(122,072
)
Amortization of deferred financing fees
1,873
1,364
3,704
2,711
Amortization of routine bank refinancing fees
(1,194
)
(1,155
)
(2,387
)
(2,293
)
Maintenance capital expenditures
(8,946
)
(13,595
)
(20,683
)
(23,155
)
Distributable cash flow (2)(3)
73,148
54,800
88,933
101,128
Loss (income) from equity method investments (1)
346
(1,204
)
1,725
(1,204
)
Distributable cash flow from equity method investments (1)
673
(272
)
(470
)
(272
)
Adjusted distributable cash flow
74,167
53,324
90,188
99,652
Distributions to preferred unitholders (4)
(2,097
)
(3,463
)
(6,013
)
(6,926
)
Adjusted distributable cash flow after distributions to preferred
unitholders $
72,070
$
49,861
$
84,175
$
92,726
(1) Represents the Partnership's proportionate share of (loss)
income, EBITDA and distributable cash flow, as applicable, related
to the Partnership's interests in its equity method investments.
(2) As defined by the Partnership's partnership agreement,
distributable cash flow is not adjusted for certain non-cash items,
such as net losses on the sale and disposition of assets and
goodwill and long-lived asset impairment charges. (3) Distributable
cash flow includes a net gain (loss) on sale and disposition of
assets of $0.3 million and ($0.9 million) for the three months
ended June 30, 2024 and 2023, respectively, and $2.8 million and
$1.2 million for the six months ended June 30, 2024 and 2023,
respectively. (4) Distributions to preferred unitholders represent
the distributions payable to the Series A preferred unitholders and
the Series B preferred unitholders earned during the period.
Distributions on the Series A preferred units and the Series B
preferred units are cumulative and payable quarterly in arrears on
February 15, May 15, August 15 and November 15 of each year. On
April 15, 2024, all of the Partnership's Series A preferred units
were redeemed and are no longer outstanding.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240806720223/en/
Gregory B. Hanson Chief Financial Officer Global Partners LP
(781) 894-8800
Sean T. Geary Chief Legal Officer and Secretary Global Partners
LP (781) 894-8800
Global Partners (NYSE:GLP)
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