Suburban Propane(SPH) - 2025 Q2 - Quarterly Results

Suburban Propane Partners, L.P. Announces Second Quarter Results Suburban Propane Partners reports strong Q2 FY2025 results, driven by increased sales volume and effective cost management Financial Highlights Suburban Propane achieved significant Q2 FY2025 profitability growth, with net income rising to $137.1 million and Adjusted EBITDA increasing by 19.1% Q2 Fiscal 2025 vs. Q2 Fiscal 2024 Key Financial Metrics | Metric | Q2 FY2025 ($ million) | Q2 FY2024 ($ million) | Change | | :--- | :--- | :--- | :--- | | Net Income | $137.1 | $111.5 | +23.0% | | Net Income per Common Unit ($) | $2.11 | $1.73 | +22.0% | | Adjusted EBITDA | $175.0 | $147.0 | +19.1% | Management Commentary Management attributes strong performance to colder weather, increased sales volume, and effective cost control, while advancing renewable energy and capital management initiatives Operational Performance and Weather Impact Operational performance significantly benefited from colder weather, leading to a 15.5% increase in retail propane gallons sold - Retail propane gallons sold increased 15.5% to 162.0 million gallons compared to the prior year's second quarter[4] - Average temperatures across service territories were 9% cooler than the prior year's second quarter. During the critical months of January and February, temperatures were 13% colder than the same period last year[4] Renewable Energy Initiatives The company continues to advance renewable natural gas projects despite temporary weather impacts on current injection volumes - RNG injection at the Stanfield facility was negatively affected by extremely cold ambient air temperatures and planned downtime for enhancements[4] - The company continues to advance capital projects to construct an anaerobic digester in New York and upgrade gas equipment at its Ohio facility[4] Capital Management and Strategy The company launched an ATM equity program to raise capital for strategic growth and debt repayment, improving its Consolidated Leverage Ratio - An ATM equity sales program was launched to sell up to $100.0 million of newly issued Common Units to support strategic growth[4] - During the quarter, $8.8 million in net proceeds were raised under the ATM program and used to repay debt[4] - The Consolidated Leverage Ratio improved to 4.54x for the twelve months ended March 29, 2025[7] Detailed Financial Analysis Gross margin increased by 12.1% due to higher volumes, while operating and administrative expenses rose 9.7% due to increased demand Q2 FY2025 vs. Q2 FY2024 Financial Details | Metric | Q2 FY2025 ($ million) | Q2 FY2024 ($ million) | Change | | :--- | :--- | :--- | :--- | | Total Gross Margin | $345.3 | $308.0 | +12.1% | | Combined Operating & G&A Expenses | $169.3 | $154.4 | +9.7% | | Average Propane Prices (Mont Belvieu) (%) | - | - | +7.2% | - Excluding non-cash mark-to-market adjustments, total gross margin increased by $42.5 million, or 14.1%, primarily due to higher propane volumes sold[5] Shareholder Returns The Partnership declared a quarterly distribution of $0.325 per Common Unit, maintaining an annualized rate of $1.30 - A quarterly distribution of $0.325 per Common Unit was declared, equating to an annualized rate of $1.30 per Common Unit[8] Consolidated Statements of Operations Consolidated Statements of Operations show significant Q2 FY2025 growth, with total revenues reaching $587.7 million and net income at $137.1 million Q2 FY2025 vs. Q2 FY2024 Statement of Operations (in thousands) | Metric | Three Months Ended Mar 29, 2025 (in thousands) | Three Months Ended Mar 30, 2024 (in thousands) | | :--- | :--- | :--- | | Total Revenues | $587,663 | $498,087 | | Propane Revenues | $525,256 | $437,564 | | Operating Income | $158,413 | $136,860 | | Net Income | $137,121 | $111,500 | | Net Income per Common Unit - basic | $2.11 | $1.73 | Q2 FY2025 vs. Q2 FY2024 Supplemental Information | Metric | Three Months Ended Mar 29, 2025 (thousands) | Three Months Ended Mar 30, 2024 (thousands) | | :--- | :--- | :--- | | Propane Gallons Sold | 162,027 | 140,243 | | Maintenance Capex | $8,041 | $5,577 | | Growth Capex | $11,268 | $8,969 | Non-GAAP Financial Measures The company provides reconciliations for non-GAAP measures, with Q2 FY2025 Net Income of $137.1 million reconciling to Adjusted EBITDA of $175.0 million Reconciliation of Net Income to Adjusted EBITDA (Q2, in thousands) | Metric | March 29, 2025 (in thousands) | March 30, 2024 (in thousands) | | :--- | :--- | :--- | | Net Income | $137,121 | $111,500 | | Add: Interest, Taxes, D&A | $38,163 | $36,676 | | EBITDA | $175,284 | $148,176 | | Adjustments | ($240) | ($1,154) | | Adjusted EBITDA | $175,044 | $147,022 | - Management uses EBITDA and Adjusted EBITDA as supplemental measures of operating performance, believing they provide useful additional information to investors and analysts[17] Forward-Looking Statements Forward-looking statements are subject to risks including weather impact, commodity price volatility, competition, and challenges in renewable fuel projects - Key risks include the impact of weather on demand, volatility in fuel costs, competition, and the ability to manage expenses[12][13] - The company also identifies risks specific to its renewable fuel projects, including customer adoption, operational challenges, and dependence on government funding and environmental attribute markets[13]