Suburban Propane(SPH) - 2025 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION Financial Statements (Unaudited) Presents unaudited condensed consolidated financial statements for Q1 FY2025, noting key acquisitions and impairment charges Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | Dec 28, 2024 | Sep 28, 2024 | | :--- | :--- | :--- | | Total current assets | $230,004 | $157,544 | | Total assets | $2,384,626 | $2,272,761 | | Total current liabilities | $329,405 | $306,122 | | Long-term borrowings | $1,302,824 | $1,210,326 | | Total liabilities | $1,839,488 | $1,725,701 | | Total partners' capital | $545,138 | $547,060 | Condensed Consolidated Statements of Operations (in thousands, except per unit) | Account | Q1 FY2025 (ended Dec 28, 2024) | Q1 FY2024 (ended Dec 30, 2023) | | :--- | :--- | :--- | | Total Revenues | $373,329 | $365,834 | | Operating Income | $59,062 | $48,748 | | Net Income | $19,420 | $24,454 | | Net Income per Common Unit - basic | $0.30 | $0.38 | - The Partnership recorded other-than-temporary impairment charges totaling $19.8 million in Q1 FY2025 for its investments in Oberon Fuels, Inc and Independence Hydrogen, Inc[60][64] - On November 6, 2024, the Partnership acquired the assets of a propane retailer in New Mexico for $53.0 million[66] - A subsidiary did not comply with the debt service coverage ratio for its Green Bonds, but the Partnership obtained a waiver to cure the resulting events of default[95][103][136] Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) Management discusses Q1 FY2025 results, highlighting lower net income due to impairments but stable Adjusted EBITDA Q1 FY2025 vs. Q1 FY2024 Performance Summary (in millions) | Metric | Q1 FY2025 | Q1 FY2024 | | :--- | :--- | :--- | | Net Income | $19.4 | $24.5 | | Adjusted EBITDA | $75.3 | $75.2 | - Retail propane gallons sold decreased by 0.8% to 105.7 million gallons, primarily due to unseasonably warm weather[153][162] - Average propane prices increased 14.9% compared to the prior year's first quarter, contributing to a 5.4% increase in propane revenue[154][163] - The company recognized $19.8 million in other-than-temporary impairment charges for its renewable energy investments, which were excluded from Adjusted EBITDA[158][182] - The Consolidated Leverage Ratio increased to 4.99x at the end of Q1 FY2025, up from 4.76x at the end of FY2024[157][196] Quantitative and Qualitative Disclosures About Market Risk Outlines the Partnership's exposure to commodity price, credit, and interest rate risks and its hedging strategies - The company uses derivative instruments to manage price risk associated with physical inventory and future commodity purchases[206] - A portion of the company's debt is subject to variable interest rates based on SOFR, creating interest rate risk[209] - A sensitivity analysis indicated that a hypothetical 10% adverse change in market prices would result in a potential future net loss of $0.2 million[212] Controls and Procedures Management confirms the effectiveness of disclosure controls and procedures with no material changes to internal controls - The Partnership's principal executive and financial officers concluded that disclosure controls and procedures were effective as of December 28, 2024[214] - There were no material changes in the Partnership's internal control over financial reporting during the quarter[215] PART II. OTHER INFORMATION Legal Proceedings The company reports no material legal proceedings for the period - None reported[218] Risk Factors Updates risk factors related to debt covenants, subsidiary non-compliance, and significant renewable fuel investment impairments - A subsidiary failed to comply with its debt service coverage ratio covenant for its Green Bonds, requiring waivers to cure the default[220] - Debt covenants, including a total consolidated leverage ratio limit of 5.75x, may limit financial flexibility and distributions[219][222] - Investments in renewable fuels are subject to significant risks, highlighted by Q1 FY2025 impairment charges of $19.8 million[224] Unregistered Sales of Equity Securities and Use of Proceeds Reports on common units withheld to cover tax obligations for executives, not as part of a public buyback program Common Units Withheld for Tax Purposes | Period | Total Number of Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | Oct 27 - Nov 23, 2024 | 156,540 | $17.77 | | Total | 156,540 | $17.77 | - The withheld units were for income tax purposes related to vested restricted units for executive officers and not part of a public buyback program[229] Defaults Upon Senior Securities The company reports no defaults upon senior securities - None reported[230] Mine Safety Disclosures This item is not applicable to the company - Not applicable[231] Other Information Confirms no executive officers adopted or terminated Rule 10b5-1 trading arrangements during the fiscal quarter - No supervisors or executive officers adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter[232] Exhibits Lists the exhibits filed with the report, including Sarbanes-Oxley certifications and Inline XBRL data files - Exhibits filed include certifications from the CEO and CFO pursuant to Sarbanes-Oxley and XBRL data files[236]