Global Partners LP(US:GLP)2025-05-08 17:41Financial Performance - Net income for the three months ended March 31, 2025, was $18,684, compared to a net loss of $5,602 for the same period in 2024 [193]. - EBITDA for the same period increased to $91,858, up from $56,943 year-over-year, representing a growth of 61.5% [193]. - Distributable cash flow rose significantly to $45,689, compared to $15,785 in the prior year, marking an increase of 189.5% [193]. - Total sales for the wholesale segment reached $3,190,436, an increase from $2,639,348, reflecting a growth of 20.9% [193]. - Product margin for gasoline and gasoline blendstocks increased to $57,169, up from $29,761, indicating a growth of 92.5% [193]. - Total sales increased to $4.6 billion for the three months ended March 31, 2025, up $446.8 million or 11% from $4.1 billion in 2024 [206]. - Gross profit rose to $255.2 million, an increase of $40.1 million or 19% compared to $215.1 million in the prior year [209]. - EBITDA for the three months ended March 31, 2025, was $91.9 million, compared to $56.9 million in 2024, reflecting a significant increase [199]. - Distributable cash flow increased to $45.7 million for the three months ended March 31, 2025, up from $15.8 million in 2024, representing a growth of 189% [203]. Operational Overview - For the three months ended March 31, 2025, the company sold approximately $4.5 billion of refined petroleum products, gasoline blendstocks, renewable fuels, and crude oil [155]. - The company operates a portfolio of 1,561 gasoline stations, including 296 directly operated convenience stores, primarily in the Northeast [164]. - The company operates under three segments: Wholesale, Gasoline Distribution and Station Operations, and Commercial [158]. - The Commercial segment includes sales and deliveries to public sector and large commercial end users of unbranded gasoline, home heating oil, diesel, and other petroleum products [166]. - Seasonal demand for gasoline is typically higher in the second and third quarters, while home heating oil and residual oil demand peaks in the first and fourth quarters [168]. - The company engages in the logistics of selling, gathering, blending, storing, and transporting refined petroleum products and renewable fuels [158]. - The company relies on marine, pipeline, rail, and truck transportation services for its operations, and disruptions in these services could adversely affect financial performance [146]. Financial Position and Capital Expenditures - The company increased its working capital revolving credit facility from $950 million to $1 billion as part of the credit agreement amendment [157]. - Working capital decreased by $30.7 million to $176.5 million as of March 31, 2025, primarily due to a $125.2 million increase in the current portion of the working capital revolving credit facility and a $10.4 million increase in accounts payable [226]. - Total contractual obligations as of March 31, 2025, were $2.76 billion, with $347.9 million due in the remainder of 2025 and $2.41 billion due beyond 2025 [230]. - Maintenance capital expenditures for the three months ended March 31, 2025, were approximately $9.6 million, compared to $11.7 million for the same period in 2024 [233]. - Expansion capital expenditures for the three months ended March 31, 2025, were approximately $8.3 million, up from $4.9 million in the same period in 2024 [236]. - The company expects maintenance capital expenditures of $60.0 million to $70.0 million and expansion capital expenditures of $75.0 million to $85.0 million for the year 2025 [237]. Risks and Challenges - The company is exposed to risks from changes in commodity prices, which could adversely affect financial condition and results of operations [150]. - The company has contractual obligations for certain transportation assets, and a decline in demand could negatively impact financial condition and cash available for distribution [146]. - Higher prices and inflation may reduce demand for gasoline and convenience store sales, negatively affecting financial performance [173]. - Tariffs and import duties on petroleum products could materially impact operations and costs [173]. - Increased competition from alternative fuels and changing consumer preferences may reduce demand for heating oil and residual oil [173]. - Changes in government mandates and tax credits could adversely affect the availability and pricing of renewable fuels, impacting sales [174]. - Disruptions in transportation services, such as hurricanes or labor disputes, could adversely impact logistics and financial results [171]. - Joint ventures may not always align with the company's strategic objectives, potentially affecting expected returns [171]. Debt and Financing - The company has a $1.50 billion senior secured credit facility, which was amended to extend the maturity date to March 20, 2028 and increase the working capital revolving credit facility to $1.0 billion [251]. - As of March 31, 2025, the company had $354.7 million outstanding on the working capital revolving credit facility and $167.0 million on the revolving credit facility, with total remaining availability for borrowings and letters of credit at $0.91 billion [258]. - The average interest rates for the credit agreement were 6.6% for the three months ended March 31, 2025, compared to 7.4% for the same period in 2024 [257]. - Total borrowings outstanding under the credit agreement amounted to $521.7 million as of March 31, 2025, with a potential annual increase in interest expense of approximately $5.2 million from a 1% rise in interest rates [272]. - The company had 7.00% senior notes due 2027, 6.875% senior notes due 2029, and 8.250% senior notes due 2032 outstanding as of March 31, 2025 [264]. Derivative Instruments and Risk Management - The company utilizes various derivative instruments to manage exposure to commodity risk, including exchange-traded futures contracts and over-the-counter transactions [270]. - The fair value of all commodity risk derivative instruments was $(11,122) thousand as of March 31, 2025, with a potential loss of $(47,100) thousand from a 10% price decrease [277]. - The brokerage margin balance was $18.4 million at March 31, 2025, reflecting the company's open market positions and commodity exchange requirements [278]. - The company anticipates some nonperformance by counterparties to its derivative contracts but does not expect it to materially affect its financial condition [279]. - Financial covenants require the company to maintain certain minimum working capital amounts and leverage ratios, with compliance confirmed as of March 31, 2025 [260].