WHIPPANY, N.J., Dec. 22, 2025 /PRNewswire/ -- Suburban Propane Partners, L.P. (NYSE:SPH) ("Suburban Propane") announced today the completion of its previously announced offering of $350 million aggregate principal amount of 6.500% Senior Notes due 2035 (the "2035 Senior Notes"), in a private offering to "qualified institutional buyers," as defined in Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"), and non-U.S. persons outside the United States under Regulation S under the Sec ...

Core Viewpoint - Suburban Propane Partners, L.P. has announced the pricing of a $350 million offering of 6.500% senior notes due 2035, which will close on December 22, 2025, subject to customary conditions [1][2]. Group 1: Offering Details - The 2035 Senior Notes will have an interest rate of 6.500% per year, maturing on December 15, 2035, with interest payable semi-annually starting June 15, 2026 [2]. - Suburban Propane may redeem up to 35% of the 2035 Senior Notes before December 15, 2028, at a redemption price of 106.500% of their principal amount plus accrued interest [2]. - The offering is targeted at qualified institutional buyers in the U.S. and other non-U.S. persons, complying with specific regulations under the Securities Act [4]. Group 2: Use of Proceeds - The net proceeds from the offering will be used, along with borrowings from a revolving credit facility, to redeem all outstanding $350 million of the Issuers' 5.875% senior notes due 2027 [3]. Group 3: Company Overview - Suburban Propane is a publicly traded master limited partnership, headquartered in Whippany, New Jersey, and has been in the customer service business since 1928, serving approximately 1 million customers across 42 states [6]. - The company distributes propane, renewable propane, renewable natural gas, fuel oil, and related products, and is also involved in marketing natural gas and electricity [6]. - Suburban Propane emphasizes its commitment to safety, community service, and low-carbon energy solutions through its core pillars: Commitment to Excellence, SuburbanCares, and Go Green with Suburban Propane [7].

Core Viewpoint - Suburban Propane Partners, L.P. plans to offer $350 million in senior notes due 2035 to redeem existing senior notes due 2027, subject to market conditions [1] Group 1: Offering Details - The 2035 Senior Notes will be offered in a private placement, not registered under the Securities Act, targeting qualified institutional buyers in the U.S. and non-U.S. persons outside the U.S. [2] - The net proceeds from the offering will be used, along with borrowings from the revolving credit facility, to redeem all outstanding $350 million of the 5.875% senior notes due 2027 [1] Group 2: Company Overview - Suburban Propane is a publicly traded master limited partnership, headquartered in Whippany, New Jersey, and has been in the customer service business since 1928 [4] - The company distributes propane, renewable propane, renewable natural gas, fuel oil, and related products, servicing approximately 1 million customers across 42 states [4] Group 3: Company Values - Suburban Propane is built on three core pillars: commitment to excellence in customer service, dedication to community support, and promotion of low-carbon energy solutions [5]

Core Insights - Suburban Propane Partners, L.P. announced the results of its 2025 SuburbanCares community engagement efforts, emphasizing its commitment to philanthropy and community support across the United States [1][4]. Community Engagement Initiatives - In 2025, SuburbanCares engaged over 150 employee volunteers, contributing approximately 600 hours of service across 20 communities, including locations such as Tallahassee, FL, and Twin Falls, ID [2]. - The initiative included partnerships with the American Red Cross and local nonprofit organizations, which were selected by employees, such as Second Harvest of the Big Bend and the Boys and Girls Club of Lancaster [2][3]. Company Commitment and Values - The company’s Vice President highlighted that SuburbanCares reflects the organization’s dedication to service, compassion, and community, with employees playing a crucial role in making a positive impact [3]. - Suburban Propane aims to expand its SuburbanCares initiatives in the future, continuing to drive positive community impact [4]. Company Overview - Suburban Propane is a publicly traded master limited partnership, servicing approximately 1 million customers through about 750 locations across 42 states [5]. - The company focuses on propane, renewable propane, renewable natural gas, and low carbon fuel alternatives, showcasing a commitment to customer service and community engagement [6][7].

Core Insights - Suburban Propane Partners, L.P. has filed its Annual Report on Form 10-K for the fiscal year ended September 27, 2025, with the SEC [1] - The company is a publicly traded master limited partnership, providing propane and related services to approximately 1 million customers across 42 states [3] Company Overview - Suburban Propane has been in operation since 1928, focusing on customer service and distributing propane, renewable propane, renewable natural gas, fuel oil, and other energy products [3] - The company operates around 750 locations nationwide, servicing residential, commercial, governmental, industrial, and agricultural sectors [3] Core Values - The company emphasizes three core pillars: 1. Commitment to Excellence, highlighting its legacy and customer service standards [4] 2. SuburbanCares, which focuses on community engagement and support [4] 3. Go Green with Suburban Propane, promoting clean energy solutions and investment in renewable energy alternatives [4]

Business Operations - Suburban Propane sold approximately 400.5 million gallons of propane and 16.5 million gallons of fuel oil and refined fuels to retail customers during the year ended September 27, 2025[11]. - The company serves approximately 1.0 million customers through about 750 locations across 42 states, with operations mainly on the east and west coasts and parts of the Midwest and Alaska[11]. - Approximately 93% of propane gallons sold in fiscal 2025 were to retail customers, with 43% to residential, 39% to commercial, and 8% to industrial customers[32]. - Sales of fuel oil and refined fuels amounted to 16.5 million gallons in fiscal 2025, with 66% sold to residential customers[43]. - During fiscal 2025, approximately 1.1 million dekatherms of natural gas and 121.5 million kilowatt hours of electricity were sold, with 88% of customers being residential households[53]. - The retail propane industry is highly fragmented, with the ten largest retailers accounting for approximately 35% of total retail sales in the U.S.[41]. - Approximately two-thirds of retail propane volume is sold during the peak heating season from October through March[57]. - The fuel oil business experiences greater seasonality, with approximately three-fourths of volumes sold between October and March[57]. Renewable Energy Initiatives - In fiscal 2022, Suburban Renewable Energy acquired a platform of RNG production assets, including a facility in Arizona and a project in Ohio, expected to come online in the first half of fiscal 2026[14]. - Suburban Renewable Energy also acquired a 25% equity interest in Independence Hydrogen, Inc., focusing on developing a hydrogen ecosystem for local markets[15]. - The company aims to achieve sustainable profitable growth through strategic investments in renewable energy products and technologies[21]. - The company is committed to advancing clean air and low-carbon benefits of traditional propane while investing in innovative renewable energy solutions[22]. - The company is committed to increasing the availability of renewable liquid fuels, including renewable propane and RNG, in the coming years[73]. - The Renewable Fuel Standard (RFS) mandates the use of renewable fuel in the transportation sector, with the company expecting to generate RINs from RFS-compliant biofuel production[75]. - The Inflation Reduction Act includes tax credits and incentives for renewable energy production, which may benefit the company's renewable energy products[76]. - The company has executed agreements to purchase and distribute renewable propane, offering a low carbon intensity alternative to traditional fuels[74]. - In fiscal year 2025, the company exceeded 2.0 million gallons of renewable propane sales, primarily in California's transportation and forklift markets[87]. - The company contracted for the supply of over 10.0 million gallons annually of renewable propane to meet customer demand[87]. - The company has invested in a dairy waste anaerobic digester in upstate New York for the production of RNG and purchased anaerobic digesters in Columbus, Ohio, and Stanfield, Arizona[87]. Financial Performance and Risks - The company has accrued environmental liabilities of $1.1 million as of September 27, 2025, representing estimated future remediation and monitoring costs[63]. - The company anticipates ongoing compliance costs related to environmental regulations, but does not expect these to materially affect financial conditions[80]. - The company’s financial performance is vulnerable to disruptions in the capital and credit markets, affecting liquidity and investment opportunities[127]. - The potential for increased volatility in commodity and input costs could substantially impact operational results[127]. - Supply chain disruptions could adversely impact the company's ability to acquire sufficient supplies of products, potentially affecting financial results[128]. - The company has experienced increased freight expenses and longer lead times due to global supply chain disruptions, which may continue to affect operations[129]. - High inflation in the U.S. has led to increased commodity, transportation, and labor costs, negatively impacting profitability[130]. - The retail propane and fuel oil industries are expected to see relatively flat to moderately declining demand over the next several years due to competition and weather patterns[135]. - The company faces intense competition from other energy sources, particularly natural gas, which is currently less expensive than propane and fuel oil[136]. - The ongoing geopolitical conflicts, including the situation in Ukraine and the Middle East, have caused volatility in the price and supply of propane and fuel oil, potentially impacting business operations[144]. Regulatory and Compliance Issues - The company is required to disclose climate-related financial risks by January 1, 2026, under California's SB 261[79]. - The California climate disclosure legislation requires entities meeting certain revenue thresholds to disclose Scope 1 and Scope 2 GHG emissions starting in 2026, impacting operational costs[122]. - Government regulations related to environmental and health and safety matters could lead to significant costs and operational challenges for the company[148]. - Current regulatory proposals could adversely impact the assessment of carbon intensity for fuel produced outside of California, affecting the value of RINs and LCFS Credits[170]. Employee and Community Engagement - As of September 27, 2025, the company had 3,190 full-time employees, with 2,476 in customer service centers[108]. - The company intensified efforts in fiscal year 2024 to collaborate with organizations supporting underserved communities, focusing on issues like food insecurity and education[91]. - The company has been recognized as a "Top Company for Women to Work in Transportation" for two consecutive years and ranked among the "Elite 30" in 2025[97]. - The Board of Supervisors was honored with the Small Company Board of the Year award in fiscal year 2025 for high standards of governance[104]. Safety and Environmental Commitment - The company maintains a strong commitment to safety, investing in programs and technology to improve safety throughout its operations[93]. - The company is actively monitoring potential environmental issues and compliance with various federal and state regulations[62]. - The company is positioned to benefit from state-level programs aimed at reducing greenhouse gas emissions, such as the California Low Carbon Fuel Standard[77]. Debt and Financial Obligations - As of September 27, 2025, the company has long-term debt totaling $350.0 million in 5.875% senior notes due March 1, 2027, $650.0 million in 5.0% senior notes due June 1, 2031, $80.6 million in 5.5% green bonds due October 1, 2028 through October 1, 2033, and $149.2 million outstanding under a $500.0 million senior secured revolving credit facility[182]. - The company’s ability to make distributions to Unitholders is limited by its debt obligations, including covenants that restrict additional indebtedness and certain transactions[182]. - The Green Bonds previously required a debt service coverage ratio of not less than 1.00 to 1.00, which the company did not comply with for several fiscal quarters, leading to potential events of default[183]. - The company obtained waivers from the holders of the Green Bonds for non-compliance with the debt service coverage ratio, allowing continued operations without immediate default[186]. Market and Economic Conditions - Economic conditions, including inflation and consumer spending rates, have adversely affected business performance and may continue to do so[126]. - Increased costs and reduced demand for products may arise from climate change effects, including severe weather events and shifts in consumer behavior[119]. - A significant percentage of the workforce being unable to work due to external conditions could negatively impact operations[127]. - The company is challenged in attracting and retaining qualified employees, particularly drivers and technicians, which may affect operational efficiency[141]. - The company faces risks related to cybersecurity breaches, which could lead to significant harm to its business and operations[178].

Core Viewpoint - Suburban Propane (SPH) has shown moderate performance over the past year, with a 4% gain and a 7% distribution payout, supported by a colder winter, but caution is advised in projecting future trends [1] Company Performance - SPH's stock has increased by 4% over the past year [1] - The company has provided a distribution yield of 7% [1] - A colder winter has positively impacted SPH's results this year [1] Analyst Perspective - The analyst has over fifteen years of experience in making contrarian bets based on macro views and stock-specific turnaround stories [1] - The analyst expresses a cautious stance on extrapolating current trends into the future [1]

Group 1 - The company held its Fourth Quarter and Fiscal Year-End Earnings Conference Call for fiscal 2025 [1][2] - Key executives present included the President and CEO, CFO, and Senior VP of Operations [2] - The call aimed to review the financial results for the fourth quarter and the full year, along with the current business outlook [3] Group 2 - The conference call included forward-looking statements regarding the partnership's future business expectations and financial condition [3][4] - There are risks and uncertainties associated with these forward-looking statements that could lead to actual results differing materially [4][5]

Financial Data and Key Metrics Changes - For fiscal 2025, net income was $128.4 million, or $1.97 per common unit, compared to $107.7 million, or $1.68 per common unit in the prior year [12] - Adjusted EBITDA for fiscal 2025 was $278 million, an increase of $28 million, or 11.2%, compared to the prior year [12] - Total gross margin for fiscal 2025 was $866.4 million, an increase of $46.8 million, or 5.7%, compared to the prior year [15] Business Line Data and Key Metrics Changes - Retail propane gallons sold for fiscal 2025 were 400.5 million gallons, an increase of 5.9% compared to the prior year [13] - In the RNG operations, average daily RNG injection for the fiscal year was approximately 13% lower compared to the prior year due to operational downtimes [16] Market Data and Key Metrics Changes - Average wholesale propane prices for fiscal 2025 were $0.79 per gallon, which was 5.8% higher than the prior year [14] - U.S. propane inventories at the end of the fiscal year were at 106 million barrels, which was 6% higher than a year ago [15] Company Strategy and Development Direction - The long-term strategic growth plan focuses on fostering the growth of the core propane business while investing in lower carbon renewable energy alternatives [25] - The company is positioned to take advantage of the growing respect for propane as a versatile and clean energy solution [26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the operational and financial strength of the company, emphasizing the importance of safety and customer service [25][26] - The company is prepared for the new heating season and is optimistic about future growth opportunities [27] Other Important Information - The company declared a quarterly distribution of $0.325 per common unit, with a distribution coverage of 2.13 times for the trailing 12 months ended September 2025 [24] - The company launched an at-the-market equity program to sell up to $100 million of newly issued common units, raising $23.5 million in net proceeds during fiscal 2025 [10] Q&A Session Summary - There were no questions during the Q&A session, and the call concluded with closing remarks from management [29][30]

Financial Performance - Net income for fiscal 2025 was $106.6 million, or $1.64 per Common Unit, compared to $74.2 million, or $1.15 per Common Unit, in fiscal 2024, representing a 43.5% increase in net income year-over-year [3] - Adjusted EBITDA increased by $28.0 million, or 11.2%, to $278.0 million for fiscal 2025, compared to $250.0 million in the prior year [3] - The fourth quarter net loss was $35.1 million, or $0.53 per Common Unit, an improvement from a net loss of $44.6 million, or $0.69 per Common Unit, in fiscal 2024 [12] - Net loss for the three months ended September 27, 2025, was $(35,136,000), an improvement from $(44,589,000) in the same quarter of 2024, while net income for the twelve months was $106,570,000, compared to $74,174,000 in the previous year [21] - Adjusted EBITDA for the three months ended September 27, 2025, was $664,000, slightly down from $754,000 in the same period of 2024, while for the twelve months, it increased to $278,028,000 from $250,043,000 [23] Revenue and Sales - Revenues for the three months ended September 27, 2025, were $211,376,000, a slight increase from $208,641,000 for the same period in 2024, while total revenues for the twelve months increased to $1,432,518,000 from $1,327,172,000 [21] - Propane revenue for the three months ended September 27, 2025, was $183,065,000, compared to $179,067,000 in the prior year, with a twelve-month total of $1,265,494,000, up from $1,150,034,000 [21] - Retail propane gallons sold totaled 400.5 million gallons in fiscal 2025, a 5.9% increase compared to the prior year [5] - Retail gallons of propane sold in the three months ended September 27, 2025, were 60,817,000, compared to 59,733,000 in the same period of 2024, with total gallons sold for the twelve months at 400,496,000, up from 378,258,000 [21] Expenses and Costs - Combined operating and general administrative expenses rose to $590.5 million, an increase of $23.7 million, or 4.2%, primarily due to higher payroll and benefit-related expenses [7] - Interest expense for the three months ended September 27, 2025, was $17,205,000, down from $18,050,000 in the same period of 2024, with total interest expense for the twelve months at $76,265,000, compared to $74,590,000 [21] - Capital expenditures for maintenance in the three months ended September 27, 2025, were $6,081,000, up from $4,891,000 in the same period of 2024, while growth capital expenditures decreased to $8,047,000 from $14,165,000 [21] Market Activity and Initiatives - The Partnership acquired a propane business for approximately $53.0 million and two additional businesses for $24.0 million, enhancing its market presence [4] - The Partnership launched an ATM equity program to sell up to $100.0 million of newly issued Common Units, raising $23.5 million in net proceeds [11] - A multi-year technology modernization initiative was initiated to improve operational efficiency and customer service [5] Financial Ratios - The Consolidated Leverage Ratio improved to 4.29x for the fiscal year ended September 27, 2025, compared to 4.76x for the prior year [9] - Operating loss for the three months ended September 27, 2025, was $(16,755,000), an improvement from $(22,548,000) in the same quarter of 2024, while operating income for the twelve months was $206,311,000, compared to $171,250,000 in the previous year [21] Pricing and Margins - Average propane prices increased by 5.8% compared to the prior year, contributing to total gross margins of $868.8 million, which increased by $63.8 million, or 7.9% [6] - The company reported a gross margin as a supplemental measure of operating performance, calculated as revenues less cost of products sold, which is considered a non-GAAP financial measure [23]