Global Partners LP(US:GLP)2019-08-08 16:17Financial Performance - Net income attributable to Global Partners LP for the three months ended June 30, 2019, was $14,489,000, compared to $6,413,000 for the same period in 2018, representing a 125.7% increase [259]. - EBITDA for the three months ended June 30, 2019, was $63,970,000, up from $53,064,000 in the same period of 2018, reflecting a 20.5% increase [259]. - Distributable cash flow for the three months ended June 30, 2019, was $28,116,000, compared to $21,000,000 for the same period in 2018, indicating a 33.3% increase [259]. - Total sales for the wholesale segment for the three months ended June 30, 2019, were $2,004,528,000, compared to $1,618,466,000 in the same period of 2018, marking a 23.9% increase [259]. - Total sales increased to $3.5 billion for the three months ended June 30, 2019, up 12% from $3.1 billion in 2018, driven by a volume increase of 1.6 billion gallons [267]. - Gross profit for the three months ended June 30, 2019, was $167.1 million, a 12% increase from $149.3 million in 2018, primarily due to recent acquisitions and higher fuel margins [271]. - Gross profit for the six months ended June 30, 2019, was $324.0 million, a 10% increase from $293.6 million in 2018, mainly due to recent acquisitions and improved fuel margins [272]. Sales and Distribution - For the three and six months ended June 30, 2019, the company sold approximately $3.4 billion and $6.3 billion of refined petroleum products, gasoline blendstocks, renewable fuels, crude oil, and propane, respectively [222]. - The company had other revenues of approximately $0.1 billion and $0.2 billion for the three and six months ended June 30, 2019, from convenience store sales and other sources [222]. - The company operates one of the largest terminal networks of refined petroleum products and renewable fuels in the Northeast, with a portfolio of 1,567 gasoline stations, including 295 directly operated convenience stores [220]. - The volume of gasoline distributed for the three months ended June 30, 2019, was 411,016 gallons, compared to 394,724 gallons in the same period of 2018, representing a 4.1% increase [259]. - Sales from wholesale gasoline and gasoline blendstocks reached $1.6 billion for the three months ended June 30, 2019, a 31% increase from $1.2 billion in 2018 [273]. Acquisitions and Growth - The company acquired assets from Cheshire Oil Company for approximately $33.4 million, including ten gasoline stations and convenience stores [228]. - The company also acquired retail fuel and convenience store assets from Champlain Oil Company for approximately $138.2 million, including 37 gasoline stations and fuel supply agreements [229]. - The company is actively pursuing acquisitions and growth projects, although successful completion is uncertain and dependent on market conditions [241]. - The total GDSO portfolio as of June 30, 2019, included 1,567 locations, an increase from 1,445 locations in 2018, indicating an 8.4% growth [259]. Risks and Challenges - The company is exposed to various risks, including commodity price volatility, regulatory changes, and transportation disruptions, which could adversely affect its financial condition and results of operations [213]. - Disruptions in transportation services, such as hurricanes or labor disputes, could adversely affect logistics activities and financial results [241]. - Higher prices and alternative fuel technologies may reduce demand for transportation fuels, impacting sales and financial condition [244]. - Changes in government mandates and tax credits could affect the availability and pricing of ethanol, impacting gasoline and ethanol sales [245]. - The company faces uncertainties in implementing growth projects, which may not yield immediate revenue increases and could be subject to regulatory delays [246]. Expenses and Financial Obligations - SG&A expenses rose to $41.0 million for Q2 2019, an increase of $1.0 million or 3% from Q2 2018, driven by higher wages and benefits [285]. - Operating expenses increased to $86.4 million for Q2 2019, up $10.2 million or 13% from Q2 2018, primarily due to GDSO operations and recent acquisitions [287]. - Interest expense for Q2 2019 was $23.1 million, an increase of $1.5 million or 7% from Q2 2018, attributed to higher credit facility balances and interest rates [293]. - Total contractual obligations amounted to $2.13 billion as of June 30, 2019, with significant payments due in the coming years [301]. Cash Flow and Capital Expenditures - Net cash used in operating activities was $33.5 million for the six months ended June 30, 2019, compared to $16.2 million in 2018, representing a decrease of $17.3 million [311]. - Net cash used in investing activities was $20.6 million for the six months ended June 30, 2019, which included $21.1 million in maintenance capital expenditures and $8.9 million in expansion capital expenditures [315]. - The company expects maintenance capital expenditures in 2019 to be between $40.0 million and $50.0 million, and expansion capital expenditures, excluding acquisitions, to also be between $40.0 million and $50.0 million [307]. - Maintenance capital expenditures for the six months ended June 30, 2019, were approximately $21.1 million, compared to $17.2 million for the same period in 2018, reflecting an increase of 22.7% [304]. - Expansion capital expenditures for the six months ended June 30, 2019, were approximately $8.9 million, down from $9.9 million in 2018, indicating a decrease of 10.1% [306]. Debt and Financing - On July 31, 2019, the company issued $400.0 million aggregate principal amount of 7.00% senior notes due 2027 [327]. - As of June 30, 2019, total borrowings outstanding under the credit agreement were $568.1 million, including $212.0 million on the revolving credit facility [324]. - A 1% increase in the interest rate on the outstanding debt would result in an increase in interest expense of approximately $5.7 million annually [346]. - The average interest rates for the credit agreement were 4.5% for the three months ended June 30, 2019, compared to 4.1% for the same period in 2018 [323].