Core Insights - The company reported disciplined execution of its strategy in 2025, with higher volumes across its terminal and wholesale network, and a double-digit increase in wholesale segment product margin, indicating successful investments in capabilities and network performance [1][6] - The GDSO segment showed solid results, with strong fuel margins partially offsetting declines in volumes and station operations due to site optimization efforts [1][10] - The company continues to focus on acquiring strategic assets, investing in its existing network, and optimizing its portfolio to enhance overall performance [6][8] Financial Performance - Adjusted EBITDA for Q4 2025 was $94.8 million, down from $97.8 million in Q4 2024, while net income increased to $25.1 million from $23.9 million [10] - Distributable cash flow for Q4 was $38.4 million, compared to $45.7 million in the previous year, reflecting less favorable market conditions in wholesale and commercial segments [10] - The GDSO product margin increased by $17.7 million to $231.3 million, driven by higher fuel margins, while the wholesale segment product margin decreased by $21.5 million to $58.3 million due to unfavorable market conditions [12][14] Strategic Initiatives - The company expanded its terminal capabilities with the Providence terminal exceeding expectations and entered the Houston market for bunkering, enhancing its service footprint [6][8] - Investments in data and analytics infrastructure are aimed at improving operational visibility and decision-making, with expectations of both cost savings and revenue gains [7][26] - The company divested non-strategic retail locations and converted sites to higher-value formats to improve overall portfolio quality [7] Distribution and Capital Expenditure - The Board approved a quarterly cash distribution of $0.76 per common unit, marking the seventeenth consecutive increase [9] - Capital expenditures for Q4 were $38.8 million, with maintenance CapEx at $22.6 million and expansion CapEx at $16.2 million, primarily for terminal and gas station investments [15] - For 2026, the company expects maintenance CapEx between $60.0 million to $70.0 million and expansion CapEx between $75.0 million to $85.0 million [15][16] Market Outlook - The company is positioned to manage through uneven markets and capitalize on opportunities, with early-year cold weather in the Northeast supporting strong wholesale fuel demand [18][28] - The integrated footprint and scale across the liquid energy value chain are expected to drive growth and enhance value for unitholders [18][19]

Financial Data and Key Metrics Changes - For Q3 2025, total revenue increased by 23.5% year over year, reaching $130.7 million compared to $105.8 million in Q3 2024 [8][21] - Consolidated net loss for the quarter was $17.6 million, an improvement from a net loss of $26.1 million in Q3 2024 [9][23] - Adjusted EBITDA for the quarter was $11.6 million, representing 8.9% of total revenue, compared to $100,000 or 0.1% of total revenue in Q3 2024 [24] Business Line Data and Key Metrics Changes - RMS segment revenue increased by $21 million or 34.1% year over year, primarily due to higher NHP volumes and average selling prices [9][23] - DSA segment revenue rose by $3.9 million or 8.9% year over year, driven by increases in general toxicology and biotherapeutic services [9][21] - DSA operating margins improved by 4.6% over Q2 2025 but were still 0.8% lower compared to Q3 2024 [10] Market Data and Key Metrics Changes - Overall net new DSA awards for the quarter were $50.4 million, a 25% increase over Q3 2024 [22] - The backlog conversion rate improved to 35.5%, up from 31% in the prior year period [22] - DSA backlog stood at $134.3 million as of June 30, 2025, compared to $139.4 million a year earlier [25] Company Strategy and Development Direction - The company is focused on improving cash flow and margins while continuing to integrate and optimize its operations [4][10] - A strategic review of the balance sheet and capital structure is prioritized, with plans to hire a third party for assistance [19][71] - The company aims to enhance client satisfaction metrics and improve service delivery speed [14][66] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding future growth, acknowledging ongoing geopolitical and macroeconomic risks [19][20] - The company is committed to building a business that creates value for clients, employees, and shareholders [20] - Management noted that while significant progress has been made, further improvements are still planned for the future [72] Other Important Information - The company recorded a $10 million accrual related to ongoing securities class action lawsuits, with expectations to recover the full amount under existing insurance policies [5] - Recent AAALAC accreditation for NHP facilities in Texas was highlighted as a testament to the company's commitment to animal welfare [6] Q&A Session Summary Question: Expectations on cancellations and change orders - Management acknowledged elevated cancellations but indicated that they are planning for this to be the new normal and are adjusting their sales strategies accordingly [31][33] Question: Next steps for site optimization - The focus will be on fine-tuning existing facilities rather than significant brick-and-mortar changes, aiming to improve capacity and service delivery [36][38] Question: Mix of bookings and new services - Bookings in new service areas like biotherapeutics and medical devices are increasing, with discovery services showing significant growth [41][42] Question: Freedom to import NHPs and market pricing - Management confirmed that there are no prohibitions on importing from Cambodia, but emphasized that pricing remains stable without significant changes expected in the near term [46][54] Question: Cash flow expectations - The company plans to maintain a higher level of NHP inventory to ensure stability in meeting customer demands, which may impact cash flow positively as inventory converts to revenue [67][68]