Global Partners LP(US:GLP)2023-02-27 17:16Financial Data and Key Metrics Changes - Adjusted EBITDA for Q4 2022 was $106.9 million, up from $66 million in Q4 2021, while full-year adjusted EBITDA increased to $485.2 million from $244.3 million in 2021 [21][22] - Net income for Q4 2022 was $57.5 million compared to $19.3 million in Q4 2021, with full-year net income rising to $362.2 million from $60.8 million in the prior year [22] - Distribution coverage as of December 31, 2022, was 3.4x, or 3.3x after factoring in distributions to preferred unitholders [23] Business Line Data and Key Metrics Changes - GDSO product margin increased by $46.1 million in Q4 to $223.2 million, with gasoline distribution contributing $155.9 million, up $36.2 million [24] - Wholesale segment product margin rose by $38.1 million to $70.7 million in Q4, with product margin from other oils increasing to $59.4 million [27] - Commercial segment product margin increased by $5.1 million year-over-year to $9.9 million in Q4, driven by increased bunkering activity [30] Market Data and Key Metrics Changes - Fuel margins in the GDSO segment increased by $0.07 per gallon to $0.37 from $0.30 per gallon in Q4 2021 [24] - The gasoline distribution portfolio consisted of 1,673 sites at the end of 2022, including various types of operations [27] Company Strategy and Development Direction - The company closed over $255 million in retail acquisitions in 2022, expanding its footprint in New England and Virginia [11] - A purchase agreement was made to acquire five refined product terminals for approximately $273 million, enhancing competitiveness across a larger geographic area [12] - The company is focusing on sustainability, having installed biofuel systems at four terminals and secured grants for EV charging stations [14][15] Management's Comments on Operating Environment and Future Outlook - Management acknowledged significant challenges in 2022, including supply chain constraints and commodity price volatility, but highlighted the resilience of the business model [7][8] - The company expects normalization in operating costs and SG&A expenses over time, following a strong performance in 2022 [44][46] - Management remains optimistic about driving returns for unitholders through organic growth and strategic acquisitions despite macroeconomic uncertainties [39] Other Important Information - The company published its inaugural Corporate Social Responsibility Report, detailing progress in sustainability efforts [17] - Capital expenditures for 2022 were $106.8 million, with expectations for maintenance and expansion CapEx in 2023 [35][36] Q&A Session Summary Question: Can you provide details on the wholesale acquisition announced in December? - Management indicated that they are currently going through the FTC process and hope to close the acquisition by June 30, 2023 [42] Question: What are the expectations for operating costs and SG&A this year? - Management noted that SG&A was impacted by one-time legal expenses and expects normalization over time, suggesting looking at earlier quarters for a more typical run rate [44] Question: How will the recent acquisition be funded? - The acquisition will be funded under the revolver, with plans to potentially term out some borrowings in the bond market later [52] Question: What are the expectations for diesel margins and fuel margins this year? - Management expects margins to return to more normal levels as market conditions stabilize, although they remain elevated compared to historical norms [56]