Suburban Propane Partners, L.P.
Q1 2021 Earnings Call Transcript

Published: 4 Feb 2021

[Operator:]

Good morning and welcome to the Suburban Propane Partners L.P.'s First Quarter Results. All participants will be in a listen-only mode. After today's presentation there will be an opportunity to ask questions. . This conference call contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, relating to the Partnership's future business expectations and predictions and financial condition and results of operations. These forward-looking statements involve certain risks and uncertainties. The Partnership has listed some of these important factors that could cause actual results to differ materially from those discussed in such forward-looking statements, which are referred to as cautionary statements in its earnings press release, which can be viewed on the Company's website. All subsequent written and oral forward-looking statements attributable to the partnership or persons acting on its behalf are expressly qualified in their entirety by such cautionary statements.

[Davin D'Ambrosio:]

Thank you, Ailey . Good morning, everyone. Thank you for joining us this morning for our fiscal 2021 first quarter earnings conference call. Joining me this morning are Mike Stivala, our President and Chief Executive Officer; Mike Kuglin, our Chief Financial Officer and Chief Accounting Officer and Steve Boyd, our Chief Operating Officer. This morning we will review our first quarter financial results along with our current outlook for the business. Once we've concluded our prepared remarks, we will open the session to questions. Our Annual Report on Form 10-K for the fiscal year ended September 26, 2020 and Form 10-Q for the period ended December 26, 2020 which will be filed by end of business today, contains additional disclosure regarding forward-looking statements and risk factors. Copies may be obtained by contacting the Partnership or the SEC. Certain non-GAAP measures will be discussed on this call. We have provided a description of those measures, as well as the discussion of why we believe this information to be useful in our Form 8-K, which was furnished to the SEC this morning. The Form 8-K will be available through the link in the Investor Relations section of our website at suburbanpropane.com. At this time, I will turn the call over to Mike Stivala for some opening remarks. Mike.

[Mike Stivala:]

Thanks, Davin, and good morning thank you all for joining us today. First, I hope you and your families all remain safe and healthy as our nation continues to contend with COVID-19. At Suburban Propane, we're continuing to take necessary precautions to protect the health and safety of our employees and customers while ensuring that we can seamlessly provide the outstanding essential services that our valued customers rely on. A brief update on the impact of COVID-19 on our business. As the first quarter progressed, we continued to see demand softness in the commercial sector albeit not to the extent of the declines that we experienced in the early part of the pandemic. These declines were offset somewhat by increased usage in the residential sector due to widespread stay at home initiatives as well as in certain other customer segments such as resellers, restaurants and others that benefitted from the demand for temporary portable energy solutions. All that said, customer demand in the fiscal 2021 first quarter was most affected by unseasonably warm weather that dominated the quarter throughout the majority of our services territories. In fact, November registered as one of the warmest on record and the overall heating degree day index for the quarter was 13% warmer than normal and 9% warmer than the prior year first quarter.

[Mike Kuglin:]

Thanks Mike and good morning, everyone. To be consistent with previous reporting as I discuss our first quarter results and excluding the impact of unrealized mark-to-market adjustments on our commodity hedges which resulted in unrealized gain of $4.9 million for the first quarter compared to unrealized gain of $2.8 million in the prior year. Excluding these items as well as non-cash equity in earnings of an unconsolidated affiliate was Oberon Fuels. Net income for the first quarter was $33.4 million or 50% per common unit compared to net income of $37.4 million or $0.60 per common unit in the prior year. Adjusted EBITDA for the first quarter was $80 million which was $5.4 million lower than the prior year. As Mike indicated first quarter earnings were most significantly impacted by lower demand resulting widespread unseasonably warm temperatures and continued softness in certain segments of our commercial and industrial customer base as result of the economic slowdown due to COVID-19.

[Mike Stivala:]

Thanks Mike. As announced on January 21, our board of supervisors declared our quarterly distribution of $0.30 per common unit in respect of our first quarter of fiscal 2021 which equates to an annualized rate of $1.20 per common unit. Our quarterly distribution we'll pay it on February 9th to our unit holders of record as of February 2nd.

[Operator:]

At this time I'm not showing any questions. So I would like to turn the conference back to Mike Stivala.

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[Mike Stivala:]

Great, thank you, Ailey and thank you all for your attention. Stay warm, cool weather is here. We're excited to see the demand pick up and we look forward to talking to you in early May to talk about our second quarter results. So thank you again.

[Operator:]

The conference is now concluded. A replay of the call can be accessed by dialing 1-877-344-7529 and entering code 10150800. Thank you for attending today's presentation. You may now disconnect.