Superior Plus Q4 Earnings Call Highlights

Core Insights - The company is facing challenges in its delivery network and execution during peak demand periods, which have been exacerbated by localized demand and difficult road conditions [1][2] - Management has acknowledged that early delivery tools did not perform as intended, but improvements have been made with updated tools and methodologies [1] - The 2025-2026 winter period is viewed as a stress test for the company, revealing execution challenges while transitioning to a leaner operating model [2] Financial Performance - Full-year adjusted EBITDA reached $463.5 million, a 2% increase year-over-year, driven by modest growth in U.S. and Canadian propane [4] - Adjusted EBITDA per share for the full year was $1.46, up 15%, while adjusted net earnings per share rose 94% to $0.31 [3] - In the fourth quarter, adjusted EBITDA was $161.9 million, also up 2% compared to the prior year [4] Strategic Initiatives - The "Superior Delivers" program aims to create a lower-cost, more resilient propane platform, with a target of $75 million in benefits, although the timeline for achieving these benefits has been extended [5][6] - The contribution from Superior Delivers was quantified at $16.2 million for the full year and $11.2 million in the fourth quarter [6] Challenges in CNG Business - The Certarus compressed natural gas (CNG) business is experiencing significant pricing pressure, leading to a $40 million gross margin headwind [9] - Certarus adjusted EBITDA for the full year was $142.5 million, down 4% from 2024, primarily due to lower realized wellsite prices [10] Future Outlook - The company expects approximately 2% adjusted EBITDA growth in 2026, with propane growth offset by lower earnings at Certarus [14] - Capital spending is projected to rise to approximately $160 million in 2026, aimed at updating the U.S. propane delivery fleet [16] - The multi-year EBITDA growth outlook has been revised down to about 2% from 8%, reflecting lower Certarus pricing and a slower progression of the Superior Delivers initiative [18]