Suburban Propane Partners (SPH) 4 Aug 222022 Q3 Earnings call transcript

Good day, and welcome to the Suburban Propane Partners Third Fiscal Quarter Results Conference Call. [Operator Instructions]. Please note this event is being recorded. I would now like to turn the conference over to Mr. Davin D'Ambrosio, Vice President and Treasurer. sir. ahead, go Please

morning, our you Conference XXXX Good this Call. joining morning for Third everyone. Chuck. for Thank us Thanks, Quarter Earnings

prepared Chief we we Officer; with of and we Joining our the Boyd, results, our remarks, Chief are along morning Officer. Steve conclude our Officer Executive This the session third Operating and financial morning, Financial Accounting me outlook Kuglin, review open Officer; business. our questions. Chief Mike and our current Chief Once Mike will this will President to Stivala, quarter

contains operations. of and to expectations call Act forward-looking risk certain These the the conference of forward-looking XXE Exchange of business future predictions Our statements statements involve and within meaning Securities uncertainties. relating partnership's and Section financial the XXXX, conditions amended, as results of and

in listed are have differ to forward-looking from We that factors of to on which important our referred actual at as earnings statements, some could suburbabpropane.com. in website results cause statements can be those our such which press viewed discussed release, materially the cautionary

the While to forward-looking cautionary in entirety such some or persons behalf real expressly statements their by attributable on qualified [indiscernible] statements. are acting had its partnership

may ended report XX, additional call. the regarding XX-K the annual discussed of September obtained on contain will today, SEC. be be statements contacting end XX-Q be business Non-GAAP which for by or Our the this filed Form forward-looking XX, risk will period fiscal Form and XXXX, year XXXX, the June Copies factors. measures on for ended partnership by and the

opening our X-K, this why we the to well as those which be of was provide morning. believe useful discussion a furnished to will We of a measures description this Form information be in SEC as point, will some in will through Mike X-K Mike? this the of section Investor the our Form Stivala turn call for I website. remarks. to At link over Relations a The available

a many of quarter, several us and for our morning, our base energy face In in launched economy, with strategic segment creating headwinds operating whole, recently broader and delivered thank for third our platform. today. you performance in the challenges strong Good and industry in the both all we Davin. business as joining renewable initiatives the Thanks, propane growth propane and

Some inflation hiring included commodity challenges labor the in conservation the vehicles, impact with and managing high diesel challenges the of higher increasing as costs, for consumer, spending challenges household in costs in the driving Tightness which inventories particular, operating customer customers is collection fuel delaying volatile and factors risk of future inflationary on prices overall drivers tanks, and technicians, qualified cost of managing price many budgets. the operating creating supply. labor and service CDL and their and associated market, are efforts

testament business strong challenges peers. extremely unique nimble to and which a continued the us flexible proud these has of operating is prices model, power our personnel focused selling expenses. performance face from to consistently who our growth initiatives, safely our levels I'm of set Our in our the do staying of an and customer customers and and meeting while effectively retention base job in on outstanding needs our continue apart managing

supported some investment of volatility and supply price management inflationary through ensuring managing our our inventory of performance Additionally, and which activities, to to offset great adequate ability do a supplies continue have risk overall job the our factors. margin

of the third to million the quarter nearly for an prior compared $XX.X EBITDA adjusted result, improvement $X year. was million, a As

the continued quarter, bringing more quarter. down And X.XXx we in prior flows leverage With prior used from $XX which X.XXx debt reduce sequential to ratio third of X.XXx. million, consolidated the from improvement our the at the than improvement to excess a cash earnings, end was by year

the advance our strategic the in future. to platform transition improvement in very continue a carbon the a front earnings, active on had to energy lower country's quarter renewable the towards support of of ongoing addition build-out as energy we In we

of at ribbon-cutting the propane a our propane California, of April, a clean, fuels low plus our renewable commercial RDME, Specifically, versatile benefits sales first-ever end produced which over abundantly Anaheim, which we we ceremony is center had by the available as at launched minority-owned of located customer in dimethyl ether, combines on carbon service subsidiary. and with

to forklift selling our California. now several are We this in new Southern of customers product

of subsidiary of in In agreement with integrated We of we RDMA. overall announced an their May, hydrogen. additional of distributor a Corporation accelerate [indiscernible] to fuels to Corporation commercialization investments Iwatani and Iwatani of a to propane largest wholly made also support fully owned supplier propane efforts the collaboration plus America, only

hydrogen RDMA, dairy own will natural build-out was in work and strides plus in construct, hydrogen business both and stake our through cow of farm their We of the on U.S. opportunities heels York here for hydrogen, United gas investment New end the and Farms, to million of a to investment equity continues investments in help new hydrogen ecosystem. propane upstate $XX toward in at in the to of Independence operate for reached June, the make with which in infrastructure the the the renewable second [indiscernible] States. accelerate manure. agreement on to In the Japan digester These advance adoption in executing of together suburban explore announced our dairy with Independent [AderonDac a an the we strategic renewables from production a family-owned announced an quarter. great system a XX% to platform initiatives are

our stated to long-term in propane I'll well-run moment, an Mexico, our some cash our quarter, balance further in years, we In investments strategic this We continue provide added back we we come Therefore, also acquisition flow in the remarks will to which on expand several in color completed our utilize the sheet. propane remain to presence the And initiatives for strategic best-in-class our course of the of of way closing balanced on and propane as a subsequent growing growth and focused provide over business a of New have opportunities Northern make in operations. and the initiatives. our to operations. end July, support market to a growth synergy past strengthen excess

let detail. give you third now, However, more Mike I'll Mike? in results Kuglin our quarter

the year. be an on $XX.X morning, to and consistent previous as reporting, impact good quarter Mike, everyone. of an of resulted which our in commodity unrealized I'm unrealized Thanks, $XXX,XXX the To gain with excluding adjustments hedges, compared the prior million results, I quarter unrealized discuss mark-to-market in loss of for third third our

the for method under earnings subsidiaries both independent years. other and noncash are accounted the unconsolidated well and charges which Excluding as of certain fuels and as equity these noncash equity items over packages, in on

prior $X.XX or spring which driven involve sold million million, hedging but common continued for quarter prior unit of significantly favorable and was higher year. from breakeven the high which were third the management, quarter quarter earnings in the $X.X in the in loss for gallons, is gallons than current the year. margin management period Retail cooler by the factors, solid third in of third million the temperatures, was several Our year. year was from a strategy of prices. commodity and $XX.X propane lower a most to net impact than in X.X% risk XX.X our the or Adjusted prior earnings $XX.X improved per million improvement EBITDA XX.X% The

consumers' spring the more and income for from level weather cooler and by disposable While than were a impacted the conservation, volumes on considerable of offset quarter temperatures, benefit commodity inflationary the pressures customer cooler the overall environment from favorably habits. high by was buying resulting price

and heating more levels during the below an improvement wholesale averages year, X% as to to across fiscal third second in the XX% was propane around keep In Overall, the time. propane average, historical based down continues From months of temperatures which in pace year quarter quarter fiscal incremental X-year year average than addition, COVID-related levels third but Belvieu than demand with now of X% quarter inventory prior and the consumers U.S. the remained for than part third prices restrictions than wholesale with home Mont the the third which XX% nation's still the X% year below volumes remains the exports. the quarter last to were as into in benefited warmer they come few gradually average country. elevated outdoor perspective, The for from were lower to third inventory prices struggle the government earlier cooking third quarter, over demand lower the commodity XXXX. cooler have at at production prior is even have and and due significantly, more improving that normal weather, remain from normal the prior quarter a and but gallon, strengthen associated quarter. the staying per respect to average quarter fourth With higher early and $X.XX XX% than

business, mark-to-market hedges quarter improvement The gross $XX.X of earlier. mentioned the million during with effective operating in to for $XX.X on prices. prior prior Total matured on by year. settlement million price that attributable for the a for higher market purchase in primarily higher and due The charges including X.X% in combined lower million to reduce higher most the compared commodity and of third are periods the expenses, average forecasted of third a compared impact the the pressures million third year across inflationary payments. refinancing or senior capital impacted level The and million tranches fixed-price the $X.X for impact the volatility the of customer $XXX.X volatile our debt. the management due to or growth. higher positions than activities costs. period. accounts margin higher of areas expense the quarter commodity primarily driven as compensation the past year, growth the $XX well during third and adjustments significantly due the also from principally the of of matured propane spending price tanks was outstanding due hedges customer significant third was quarter the Total at quarter risk in or by accruals to higher fuel in lower hedging with quarter to commodity basis. comprised and $XX.X pension Excluding was million increased management of and practices, on prices impact noncash due associated prior net was selling XX.X% both that rates steel the in to year, the our G&A the provisions gross support of XX.X% expenses purchases of million I to XXXX, than notes commodity of increased a to expansion favorably favorable interest prices greenfield of fiscal X from cylinders for were of and Consistent selling of and higher rise prior markets, as price intended $X.X delays quarter and to to earnings lower that of $XXX that in for excluding hedges environment million during Net expenses benefit-related effect lease in the doubtful long increase the commodity payroll propane margin vehicle to sold were to increase With the respect activities variable

our balance sheet. to Turning

As during flows borrowing quarter, of with activities. third under the $XX.X operating we revolver from Mike repaid million mentioned, the cash

in With repayment June our the debt leverage Combination during our of our million lower June position target as to period is our debt-to-EBITDA to of strong. third XX-month for consolidated outstanding debt resulted trailing XXXX, the our sheet trending quarter ratio X.XXx. level X.Xx, total With closer ratio than year. $XX was balance liquidity last the increase improving debt June earnings in ended of of a repayment, and XXXX

regarding our With supporting strength while arise. in insulate the allows strategic as you, challenges commodity business us the the position continued from our uncertainty opportunities growth economy, the markets, Back inflation to short-term financial to of Mike. also

Thanks, Mike.

our unit. of XX, As of XXXX, supervisors our our distribution third unit $X.XX quarterly respect announced fiscal on quarter common an equates July of common rate to of Board in 'XX, declared annualized which per per $X.XXX

X Our our X. record August to be on paid as of will unitholders quarterly August of

environment, onset closing, early taken in post-COVID the business adapt a So since have in as to the we emerge challenges in our of the steps XXXX, and now COVID-XX many economy with future. we initiatives our continuing growth participation all employees a invest protect transition support and long-term to model, sheet, strategic our in strengthened balance energy valued our energy while cleaner to the through our in and

energy very distributors investments hydrogen in complementary on we our natural as to the the and local are over have an communities. of renewable energy and expertise agreement most interconnected recent With produce fuels, gas, that developed to to set independent service assets renewable providers

the other to businesses to support our of while and continue strategic renewable propane technologies focus execution plans of operations. growth also these will fostering We on energy the and our growth core

months strength the fiscal through our of With first X XXXX. of the

period coverage CapEx. Our X.Xx remained maintenance distribution for the trailing at XX-month strong after

are strong our very and long-term We for unitholders. trends a you, as operationally which especially to mid-Xx, position, our closer ratio support financially, our growth in for valued sustainability both and leverage provides

the to their of dedicated hard efforts. more extremely comfort employees be success customers unwavering continues Finally, proud Propane of I'm of serve. than of ongoing communities in X,XXX we all and foundation our our work safety focus on their the of and our Suburban and the and rooted

please? attention up Chuck, appreciate and the for support you assist questions. with your could that, we now call always, and if As open would to like us

turn question-and-answer Mr. back will Instructions]. conclude any the to Stivala [Operator this Mike conference closing for like session. remarks. I to would over And our

all to our out end fiscal on talking and you November forward to close Chuck, initiatives. focus year the Thanks, continue very our continue these the and look in Great. to We intend strong through thank we manage end year. to of We again. challenges the and to business as strategic you

and summer your safe thank early fall. and of So rest again, have you a

may To now digital of access you replay a or conference, this X-XXX-XXX-XXXX X-XXX-XXX-XXXX.

be you presentation. enter prompted which your conference for concluded. conference company name will joining. record attending Thank and be will a XXXXXXXX. You number, Please when has The to now today's

You may disconnect. now