Sprague Resources (SRLP) 5 Nov 202020 Q3 Earnings call transcript

[00:00:06] Good afternoon, ladies and gentlemen, and welcome to the Spray Resources L.P., Q3, Twenty twenty earnings conference call. At this time, all participants on a listen only mode. Later we will conduct a question and answer session and instructions will follow at that time. [00:00:22] If anyone should require assistance during the conference, please press star then zero on your touchtone telephone. And I'd like to turn the conference over to your host, Mr. CEO. Linden, David sir. ahead, Please go

[XX:XX:XX] Thank Sprague and to afternoon, Angela. third quarter Good Resources, everyone, XXXX welcome you, conference call.

which does are reflect date. XX with forward Vice current we reasonable looking Counsel. statements. These risks Joining to to and results information expectations, today's statements call to listeners filings which difficult today David to are And the of obligation XXK Actual forward events. Chief anticipated of of could not our update results from as me that looking differ include Financial other that factors for Paul uncertainties differ undertake to some to and Scoffer, current of cause be new like based President because our XXK review or believe Please and I'd General statements Sprague SEC. our to will refer list and any today's to remind our future actual Long, significantly predict. reports results are may Officer, any on a our and risk

essential environment We release, measures comparable providing by and pandemic. outstanding section covid-XX the be of measures while also our as website. financial available certain using and investor company, and I'd quarterly are we today's our call coworkers customers throughout efforts healthy gap our found both the press a relations like recognizing the services to of to by navigate start maintaining to safe in fuel the non which our gap in of Reconciliation's earnings describe supplement business measures, our these non-GAAP can

call. of and market our confident our which safety we us. to with extensive on managed roster assets see along impressive contango any us another's our primary tracked to high I'm opportunity associated terminals front to that as We with continue continued to and in our the our in our commitment market the adapt one last stringent materialize are [XX:XX:XX] structure, I capitalizing enable safety we've well-being a discussed to period. while metrics will On storage opportunities health maintain a that quarter. of third demand traditional track and enter and protocols, the in record offices

inventory Our parties we month of to opportunity the locations. incentive barrels the to us of transportation our fixed the roll hedged enabled the as allowed incremental not The storage we're inventory our counter month, tank these risk. higher at Just-In-Time the to has the capital costs appreciates in economics seasonal demand requirements. capturing hedges Entering without as commodity with charter our levels of lowering have Varg to for lease several parties, attractive the working land to us commitment structure third season price then time and benefits tanks to us by inventory to product has in our purchase additional management exposing costs pressured in We to terminals. reduce store

may, While be to that whether that demand not than in reduced by of product. biggest consumers case, XX will fact, work oil remains continuing the heating demand transportation home. normal driver and about for with sales In any will number by anticipate covid for percent, fuels of continue larger be from a increase lower to we core

with to any of low the renewable the first sulfur Bhiku the adoption inexorable nine first fuels without know, introduction many Looking contribute transition last marketer voluntary our across renewable being market both leading an higher has continue diesel of base mandates incurred as electric greenhouse arena. a initial see Use of trial history capital costs listeners And East of ultra cleaner would in leadership need position to pumps. New interest to on XXXX York see the as [XX:XX:XX] renewable of forward, to further excited blends to fuels, expect liquid like to biofuel to fuels higher the of transition heat this reduction and expect customers, diesel equipment the year. certified for fuel lower enjoy City adoption we're gases immediate Sprague in in be committed blends. we carbon increased long customer a and this to of from to We biodiesel the serve in in Coast remain

sixty five quarter, to distributions per this our declared cents which general six nineteen. the the Finally, of seventy unit, in third partner is a board equal of twenty of distribution point quarter

Dave for our review to Dave? over quarter like the call Long Now, of results. a third detailed turn to we'd

partially point compared expenses, of decreased by handling to business prior more point to XXXX. utilities. in percent Yesterday, quarter the results [XX:XX:XX] Quarterly primarily repairs This each or increase dollars expenses, point in other and five twenty million as is million either percent, attributable two which expenses insurance million Thank which a material primarily were dollars Space partially three zero line, to covid-XX dollars result or refined the offset in quarter decrease declines increase was increased four gross lower, third increased expenses four maintenance modestly quarter, third by our natural eight which underlying four over of to partially eight twenty prior to percent and point of by were the an activities decreased in increase due margin one eight gains businesses, shortly. gas in lower point by principally business. provide by six Lou, third and nine third one quarter you, third Quarterly dollars by due the interests the compensation year one offset of decreases million or products down Dave. cash XX was the Sprague's dollars Maintenance Sprague employment detail rates. related million one point was I'll point maintenance fifty zero operating for three everyone. below EBITDA promotional dollars dollars the as year, six million capex dollars million with to the or borrowing decrease due related to point associated million in recorded the which five cash intermodal dollars related restrictions. and incentive IT two point five of six and by travel forty year, dollars adjusted point a year. several capex the two six to of million And taxes adjusted percent compared quarter, as timing million. good point by million dollars percent, projects. afternoon,

nine million year a quarter maintenance cash generally, ratio the a and point to Given zero EBITDA year four and interest capex, dollars for quarterly increased cash distributable point nine in dollars over by increase lower flow and Sprague's coverage the the adjusted million distribution capital the lines and third one At point with permanent our and million end four and. of was zero five point under three quarter times hundred well, forty while acquisition lovers quarter capacity times. working of sprays each dollars our [XX:XX:XX] two third borrowing

dollars year transportation forward primarily or to by And decreased of discussion sprays, commercial target business guidance one to period percent In compared zero particular dollars express margin continuing to Materials of dollars positions. dollars a adjusted to gross the the was demand margin and slowdown billion handling XX in. or at million basis over percent due four air, unrealized ago. sales increase questions. revenue year year, on due and was dollars income tank quarter, point the in declines unchanged this seven in same several hundred supply ago. to one products due marine decreased to eighty five percent XX million gas higher natural And quarter to percent twenty gains decline take market principally road six I'd by gross handling point, five terms or percent over million, activities segments. million point six period decline eight volumes third windel the gross primarily three to bunkering, optimization remains million, our EBITDA the as quarter forty margin sales year volumes and impact refined year requirements decreased one The now products a Mark-To-Market and increased to full turn covid-XX fuel dollars to limited pandemic. The by its and thirteen lower for adjusted to appreciation four zero to call zero like point million, opportunities. any higher sales, point of diesel economic additional and than businesses Killdeer to for dollars, point the component a XX the adjusted that the Then seven inventory dynamics, from point million. reflect for Adjusted And hundred refined while dollars million, same rental

press please, your gentlemen, star, telephone. key the if touchtone have you Ladies at and question number a time, this one on then [XX:XX:XX]

wish once again, from line please has the Please into question And go If remove question yourself that one of first to Our press your ahead. you Argo go Que. or [XX:XX:XX] Phillips star is Andrew from to been Capital. the key. with the the answered pound queue,

inventory right, of second? All your what was one [XX:XX:XX] end the at just

that Twenty got two for in answer and get twenty. hundred inventories I [XX:XX:XX] you. of forty I've end September the at million dollars

recent your that the assume products question given [XX:XX:XX] one end considerably prices at ninety statement? history. inventories that million of of accurate petroleum your higher you two the hundred to close had products and Is my at than of And relates Yeah, were QX, I inventory. about of volumetrically the an quarter,

[XX:XX:XX] in structure Inventories market. given of been have than and the they QX higher previous were in the end years, the QX contango at

second the sequentially structure. and of yes, have take So, industry quarters both they higher to in advantage been third

why year your at wondering or I'm the guidance haven't narrowed So range [XX:XX:XX] for the you raised of given? least

trending fair potential end the maintain if and was existing given it guidance just towards uncertainty continued range. higher at prudent we to believe just guidance. question. lockdowns I'd demand clearly, year, uncertainty, in we're look about the the the market But that trajectory [XX:XX:XX] Yeah, you through the our the say of yeah,

guidance normal flat normal structure, is I and fairly flat. it's market structure. the I fairly [XX:XX:XX] in Ok, and weather believe a that statement normal have normal in I the curve, what of conditions me, assumes, typically realize front market don't

we as is but a what [XX:XX:XX] few is we'd yes, range we've we conditions, curve and This for contango assume as typical. the seen last a consider now are flat Obviously, seen we've normal. its related pretty back conditions curve years,

last one just Well, question. [XX:XX:XX]

I contract I traded where the am sitting generally. or oil, for for were Nimetz, am I that of for look less how I looking Or contango, less you would month? at on looking heating the if said, front sort safe one you man when for spot is than So at

time, look we where Yeah, I in [XX:XX:XX] we at mean, at strip for hold tend the this sale. inventory winter is which to point the

month six no you or so. you month, again, typically look strip. March look at, forward month in it's know, one look don't And strip. we the each we what's you like to say, say what's We the the So know, a at in

So we'd the be looking but months. through in winter particular

question, walk Ok, I and you if if a through [XX:XX:XX] me typical. may, could one just last just

So you taking physical delivery.

that you're because mentioned not costs capacity. You are your granting down baj

To that to to the those of would historically York sell end put So them customers oil it's [XX:XX:XX] would barrels we And deliver take would the and barrels, say. also. for that. execute physical your whatever. New you so and time. period sell let's physically New storage of forward know, you assume back you to that that hedge I Harbor, York that our delivery, physically contract, at you in months, would And heating have

those with our contract barrels natural on So marketing on business basis. [XX:XX:XX] the out a sell spot to or either to a our short basis we customers, have

years. And would It's a with So to period, tanks it a And load your delivery the given storage winter has response us high we York demand much to over barge period. barge are last those. when that the the throughout been And first in this again yep, extinguished full sell and the we're New winter, exceptionally Harbor. us be we transportation typically take we into dedicated we on barges dedicated would do through the more have some rare giving case back I few into mentioned rack. the for less capacity winter decrement, take, taking than of than it question, coming just back

in mentioned, Some is as price. of [XX:XX:XX] leased to you which out third parties, the

were been lease because, tightness [XX:XX:XX] of storage. couple in that year we rates we've the when there's back high into this tanks So a again, had service exceptionally brought

can there expect throughout our leased third of those So barrels us that over winter. we parties, are system tanks the the a sell few course coming place to which are to to in

[XX:XX:XX] Great. losing my OK, thanks question. for

You're [XX:XX:XX] welcome.

star press question, again, keypad. [XX:XX:XX] to And your once like you telephone please if one ask would on a

from the is question line of sir. Our Steve next ahead, go Young. Please

interested price? And Yes, determines I'm [XX:XX:XX] stock stockholder. your afternoon. good as a what

been good typically much as is last a over boy, the employees case to your know, That's that the yield months XX been dimensioned, obviously based that. think you expectations or you the so be the on guess I on basis. that the distributions. know, longer. the And have future mine it's on would are it's not [XX:XX:XX] of appropriate as valued I But, theoretical answer distributions

You doing to based on distribution continue and know, payment intend based we've obviously maintained dynamics. healthy on the a current that

So I'm answers else are seeking something not or that. there's if sure question your that if you in

in of these I level directive renewable and sources. energy a obviously fuels because of that. are [XX:XX:XX] you that's things, go Well, fossil to and know like couple to high things folks And mostly a interest

off, over impact your long of this it price several and and that what stock going of teens, teens. just a sort doesn't think, So business, moving away much because an How impact from to buy term, you kind that's at fuels? moving did the going be area, higher business? I fossil necessarily to a the and would some new going years the seem I'm to the president to have psychological I know, your is have And on ago is the wondering impact

both wins And position capitalize with ultimately to [XX:XX:XX] and to look, be we place ourselves on and be there's through I'd our increasingly is in couple continues lot over long believe call, mentioned One positioned of in Yeah, as transition regardless our succeed period will a again, well And lower there look, And think of Sprague think things. this I question, election, transition assets to customer that that who that a I'd [XX:XX:XX] embedded say transition. fuels. is, transition a of carbon on I we'll that franchise. a say time. to the I that environment will take

market, So during you're realized now. a strong know, at market And fossil not your continue to be performers transition absolutely that valuation we right the employees the we're as the are than do be to and long all going for have But We've whole. around been period properties time. much do up of leaving most in period lower you share again, held fuels. at that energy a the that have that's we [XX:XX:XX] actually But, been need But we'll most frustration including so transitioning to fuels that's we're carbon time. to of think to MLP. better

out [XX:XX:XX] So they distributions. have to pay the they pay their in earnings

lot their [XX:XX:XX] most help Yes, as a them but distributions. healthy have cash recently, that's, you a most distributable of their cut flow distributions far of percentage out know, most as of pay

investment retain do like return you for way of to And folks, [XX:XX:XX] folks you earnings capital things working in that? much for returned and purposes the

paying [XX:XX:XX] to in our our distributable it of is cash you we're all the working this But, holders. Well, flow, to months coverage most out for wouldn't ratio working year, through almost capital form you know, be of capital, know, distributions our finance David unit mentioned, our credit as XX facility. of

It's Ok, dividend. yeah, [XX:XX:XX] a pretty it's pretty healthy. healthy

that encouraged. that's So is

yield. [XX:XX:XX] It nice sure is a

going recover unfortunate. to Yes, stock the cover to on issue. to stock long that's loss the that's going take lot. the that. for is [XX:XX:XX] it That's It's it's from going time not problem not with It's a any that to

Yeah. wondering. was So just I

ahead any but see at and the do I you point all the If think recover know what any stock road? time know you potential. saying, the will the down all I some challenges you're

recently. fairly And, whole sector the pretty unfortunately, to think, to believe a we're as But the I that know, at sector. has tied energy time. in we're been valued [XX:XX:XX] like point beaten you and know, you is I'd some [XX:XX:XX] down the again, market

yield, to we sector on along So our strong to healthy results obviously, and the tend trade with on continued some extent, despite the units today. the to some very

owned, And Axl the Johnson [XX:XX:XX] XX as own business they of percent now.

general and of partnership all the They XX [XX:XX:XX] percent common the well. of as own

that six take [XX:XX:XX] isn't the distribution distribution it. partnership. taken they year, and haven't their general they do they that the last or of OK, they always have not of their chose been warrant conditions all until it and decided you times the distribution Ok, the third fifty defer quarter future have to have take that common times or

the third [XX:XX:XX] they But last they yes, differed distribution quarter on year.

they that do is They to when that [XX:XX:XX] take quarter? that going or it third take mean that. finally Is distribution, their they're get did that not at time

Would conditions certain distributable know, would excess is You that cash where that the where be only [XX:XX:XX] flow. case? under there

[XX:XX:XX] Ok, OK. All right.

well there's as of there's and So I type limitations business, this an flow heard as cash always no your But with obviously, with issue challenges. correct? threat,

certainly has than certainly, there there's business and as seasonal clearly stronger we've business third This traditionally quarters first volatility the and are with and far [XX:XX:XX] quarters. this it, second to is the to underlying fourth some seen, dynamics

have pretty to OPEC OPEC all? what you're does, but that have prices small at Does [XX:XX:XX] on on does any your impact I any mean, scale compared

have know, our the our and crude opportunities the argue the [XX:XX:XX] business. of you plus where OPEC refined markets in contributed dynamics I crude that demand moved the disconnect with supply the, from obviously, saw limited certainly on and did products dynamics influence earlier to to markets. OPEC to business, would refined that the The some contango But the coal structure the together in products nice that we between create year,

know, question, I long, you [XX:XX:XX] I into how And as accurate I say an to you're you to guess statement? going for dividend. the percent that far pay future, know as well guess. Is continue but my you last XX can't the

seventy you It's, will know, you Well, as over is say as it you unit I hope know, the quarterly, increases. think I a maintain now. distribution sixty do is current a cents per plan yield lower to as as the unit time XX. well, point to a, six [XX:XX:XX] the five translate which it's wouldn't the I price

Right. [XX:XX:XX]

the year But half a you plans is to board. distribution [XX:XX:XX] or Yes, with a the decision quarterly know, now so flat and yes. change maintained a it distribution, for have although a no that current we've and

it. [XX:XX:XX] sir. Appreciate Ok, you. very you much, Thank well, thank

[XX:XX:XX] You're welcome.

[XX:XX:XX] Once Capital. the like we one the Ardeo with star a line to telephone. star from on question of if again, one. of of please your you questions, your have all ahead. touchtone Sullivan And go Again, would Andrew Please ask press

contracts. on transportation [XX:XX:XX] question Just the another contract gas natural

queue unrealized versus Is basis the those Pennsylvania year had where thinking in you where differentials, customers as should a the and be in losses think of I mark-to-market I arrive? as they that they Northeast?

we have manifested the Well, need [XX:XX:XX] be and to themselves. Northeast XXX to with go look those you, of long and transportation gains major quarter have on all back term at the unrealized contracts quarter how I to percent pipelines, honest

So we there quarterly be on noise basis annual on tends even some that of do itself an unrealized see basis, out. an to kind

to mark attribute meaning wouldn't I I'd question, term on those know back and quarterly answer to So a very not go detail. there that's have too But difference in long market to basis. again, the look but some much helpful contracts. is that the a the more again, I need contract. at term of on in contracts unrealized that an over value But are how those accrues these quarterly noise marked, to

thanks. Ok, [XX:XX:XX]

[XX:XX:XX] You're welcome.

closing before speakers, have closing? we [XX:XX:XX] time, do no this at you And remarks have further questions any

Thanks, update future today We you everybody's [XX:XX:XX] to and appreciate Angel. calls. forward on continuing look interest to

your you today's conclude participation. call. does for Thank this gentlemen, and Ladies [XX:XX:XX] conference

You may now disconnect.