Global Partners Q1 2025 Earnings Report

Global Partners EPS Results

• Actual EPS: $0.36
• Consensus EPS: -$0.03
• Beat/Miss: Beat by +$0.39
• One Year Ago EPS: N/A

Global Partners Revenue Results

• Actual Revenue: $4.59 billion
• Expected Revenue: $5.64 billion
• Beat/Miss: Missed by -$1.05 billion
• YoY Revenue Growth: N/A

Global Partners Announcement Details

• Quarter: Q1 2025
• Date: 5/8/2025
• Time: Before Market Opens
• Conference Call Date: Thursday, May 8, 2025
• Conference Call Time: 10:00AM ET

Global Partners (NYSE:GLP) engages in the purchasing, selling, gathering, blending, storing, and logistics of transporting gasoline and gasoline blendstocks, distillates, residual oil, renewable fuels, crude oil, and propane to wholesalers, retailers, and commercial customers. The company operates through three segments: Wholesale, Gasoline Distribution and Station Operations, and Commercial. The Wholesale segment sells home heating oil, branded and unbranded gasoline and gasoline blendstocks, diesel, kerosene, and residual oil to home heating oil and propane retailers and wholesale distributors. This segment also transports the products by railcars, barges, trucks and/or pipelines. Its Gasoline Distribution and Station Operations segment sells branded and unbranded gasoline to gasoline station operators and sub-jobbers; operates gasoline stations and convenience stores; and provides car wash, lottery, and ATM services, as well as leases gasoline stations. The Commercial segment sells and delivers unbranded gasoline, home heating oil, diesel, kerosene, residual oil, and bunker fuel to customers in the public sector, as well as to commercial and industrial end-users; and sells custom blended fuels. The company is also involved in the transportation of petroleum products and renewable fuels through rail from the mid-continent region of the United States and Canada. Global Partners LP was founded in 2005 and is based in Waltham, Massachusetts.

Global Partners Q1 2025 Earnings Call Transcript

Key Takeaways

• Net income turned positive at $18.7 M in Q1 from a $5.6 M loss last year, with adjusted EBITDA up to $91.1 M and distributable cash flow more than doubling to $46.4 M.
• Wholesale segment product margin increased by $44.2 M to $93.6 M, fueled by favorable market conditions and the integration of Gulf Oil and ExxonMobil terminals.
• Gasoline distribution fuel margins rose 2¢ per gallon to $0.35, while station operations margin declined by $4 M due to the sale and conversion of 40 sites in the ongoing portfolio optimization.
• The Board increased the quarterly cash distribution to $0.0745 per unit ($2.98 annualized), payable May 15 to unitholders of record on May 9.
• Operating expenses grew by $6.6 M and SG&A by $3.9 M, with interest expense up $6.3 M, reflecting higher costs from new terminal operations, incentive compensation and increased credit facility balances.

Presentation

[Operator]

Good day, everyone, and welcome to the Global Partners First Quarter twenty twenty five Financial Results Conference Call. Today's call is being recorded. All lines have been placed in listen only mode. With us from Global Partners are President and Chief Executive Officer, Mr. Eric Slifka Chief Financial Officer, Mr. Gregory Hansen Chief Operating Officer, Mr. Marc Romaine and Chief Legal Officer and Secretary, Mr. Sean Geary. At this time, I'd like to turn the call over to Mr. Geary for opening remarks. Please go ahead, sir.

[Sean T. Geary, Chief Legal Officer at Global Partners]

Good morning, everyone, and thank you for joining us. Today's call will include forward looking statements within the meaning of federal securities laws, including projections and expectations concerning the future financial and operational performance of Global Partners. No assurances can be given that these projections will be attained or that these expectations will be met. Our assumptions and future performance are subject to a wide range of business risks, uncertainties and factors, which could cause actual results to differ materially as described in our filings with the Securities and Exchange Commission. Global Partners undertakes no obligation to revise or update any forward looking statements.

[Sean T. Geary, Chief Legal Officer at Global Partners]

Now it's my pleasure to turn the call over to our President and Chief Executive Officer, Eric Slifka.

[Eric Slifka, President, CEO & Director at Global Partners]

Thank you, Sean. Good morning, everyone. We had a strong first quarter across the company, generating healthy year over year growth across our key profitability metrics. Product margin in our Wholesale segment was up from the prior year, reflecting strong execution by our teams, a favorable market environment and the successful integration of additional terminal assets. Since the end of twenty twenty three, we've continued to invest in and optimize our terminal assets, expanding our midstream footprint to more efficiently serve our throughput and wholesale customers.

[Eric Slifka, President, CEO & Director at Global Partners]

These enhancements strengthen our ability to link refined liquid energy products with downstream markets, supporting the evolving needs of suppliers and customers in today's dynamic energy landscape. Our gasoline distribution business benefited from healthy fuel margins, supporting strong overall performance. Ongoing portfolio optimization resulted in a decrease in company operated sites, reducing our station operations product margin year on year in the quarter. By maintaining financial discipline and carefully directing our capital, we are able to invest in accretive organic growth and selective acquisition opportunities while continuing to consistently return cash to unitholders. In April, our Board increased our quarterly cash distribution on common units to $0.07 $45 per unit, equating to $2.98 on an annualized basis.

[Eric Slifka, President, CEO & Director at Global Partners]

The distribution will be paid May 15 to unitholders as of the close of business on May 9. With that, now let me turn the call over to Greg for the financial review. Greg?

[Gregory Hanson, Chief Financial Officer at Global Partners]

Thank you, Eric, and good morning, everyone. As I review the numbers, please note that all comparisons leave with the first quarter of twenty twenty four unless otherwise noted. Looking at our key profitability metrics, net income for the first quarter was $18,700,000 versus a net loss of $5,600,000 last year. EBITDA for the first quarter increased to $91,900,000 from $56,900,000 and adjusted EBITDA increased to $91,100,000 from $56,000,000 in the prior year period. Distributable cash flow was $45,700,000 in the first quarter compared with $15,800,000 in the prior year period, and adjusted DCF was $46,400,000 compared with $16,000,000 last year.

[Gregory Hanson, Chief Financial Officer at Global Partners]

The primary growth driver behind these results was the strong performance of our wholesale segment. It's important to provide some context for the year over year comparison. As a reminder, in Q1 of twenty twenty four, certain products in our wholesale segment were negatively impacted by the timing of mark to market valuations, which were then fully recovered in what was a very strong second quarter last year. In contrast, the timing and magnitude of mark to market impacts were minimal in Q1 this year, meaning our reported results more closely aligned with the strong performance of our core operations. TTM distribution coverage as of 03/31/2025, was 2.03x or 1.96x after factoring in distributions to our preferred unitholders.

[Gregory Hanson, Chief Financial Officer at Global Partners]

Turning to our segment details. GDSO product margin increased $200,000 to $187,900,000 in the quarter. Product margin from gasoline distribution increased $4,200,000 to $125,800,000 primarily reflecting higher fuel margins year over year. On a cents per gallon basis, fuel margins increased $02 to $0.35 in Q1 twenty twenty five from $0.33 in Q1 twenty twenty four. Station operations product margin, which includes convenience store and prepared food sales, sundries and rental income, decreased $4,000,000 to $62,100,000 in the first quarter of twenty twenty five.

[Gregory Hanson, Chief Financial Officer at Global Partners]

The decrease was due in part to the sales and conversions of certain company operated sites, consistent with our ongoing strategy of portfolio optimization. At quarter end, we had a portfolio of fifteen sixty one sites, a decrease of 40 sites year over year. In addition, we operated or supplied 66 sites under our Spring Partners retail joint venture. Looking at the wholesale segment, first quarter twenty twenty five product margin increased $44,200,000 to 93,600,000.0 Product margin from gasoline and gasoline blend stocks increased $27,400,000 to $57,100,000 primarily due to more favorable market conditions in gasoline. Product margin also benefited from the 2024 acquisitions of terminals from Gulf Oil and ExxonMobil, which were acquired in the second and fourth quarters of twenty twenty four.

[Gregory Hanson, Chief Financial Officer at Global Partners]

Product margin from distillates and other oils increased 16,800,000 to $36,500,000 primarily due to more favorable market conditions in distillates and winter weather that was on average 9% colder than the prior year period. Commercial segment product margin increased $100,000 to $7,100,000 Looking at expenses, operating expenses increased $6,600,000 to $126,700,000 in the first quarter of twenty five, primarily related to our terminal operations and the addition of the Gulf and ExxonMobil terminals in 2024. SG and A expense increased $3,900,000 in Q1 twenty twenty five to 73,700,000.0 reflecting in part increases in long term incentive comp, wages and benefits and various other SG and A expenses and a decrease in acquisition costs. Interest expense was $36,000,000 in the first quarter of twenty twenty five, up $6,300,000 from last year, primarily due to higher average balances on our credit facilities related to our terminal acquisitions in 2024. CapEx in the first quarter was $17,900,000 consisting of $9,600,000 of maintenance and $8,300,000 of expansion CapEx, primarily related to investments in our gasoline stations and terminals.

[Gregory Hanson, Chief Financial Officer at Global Partners]

Our balance sheet remains strong at March 31, with leverage as defined in our credit agreement as funded debt to EBITDA at 3.28 times and ample excess capacity in our credit facilities. We had $354,700,000 outstanding on the working capital revolving facility and $167,000,000 outstanding on the revolving credit facility. Before I turn the call back to Eric for closing comments, let me review our upcoming Investor Relations calendar. This month, we'll be participating in EIC's twenty second Annual Energy Infrastructure Investor Conference. And in June, we'll be participating at the Stifel Cross Sector Insight Conference and the BofA Energy Credit Conference.

[Gregory Hanson, Chief Financial Officer at Global Partners]

If you're attending one or more these events, we look forward to meeting you there. Now let me turn the call back to Eric for closing comments. Eric?

[Eric Slifka, President, CEO & Director at Global Partners]

Thank you, Greg. As we look ahead, the power of our scale, the resiliency of our integrated model and the creativity of our people position us in a just not weather disruption, but to find opportunity within it. We are confident in our strategy, focused on disciplined execution and committed to delivering long term growth for our unitholders. Now Greg, Mark and I would be happy to take your questions. Operator, please open the line for Q and A.

[Operator]

Thank Our first question comes from the line of Selman Ochitl with Stifel. Please proceed with your question.

[Selman Akyol, Managing Director - Energy & Power sector at Stifel Financial Corp]

Thank you. Good morning. Congratulations on a very nice quarter. Just wanted to start off with and I understand the GDSO, the high grading of it and sort of repositioning the capital, I guess, into the terminals. Can you just maybe talk about and I know it's a continuous thing that goes on, but can you just talk about the opportunity you're seeing for continuing that as well as potential acquisitions or what you're just seeing out there on the terminal side as well?

[Eric Slifka, President, CEO & Director at Global Partners]

Yes. I mean, I think some basically, we're always reviewing our retail business. And we're looking at our assets, and we're looking at the most efficient or best way to operate or supply those assets. It's not a static environment, and we continue to look at them. But as we acquire assets and operate them, we may take decisions later on that optimize the value that we can generate from those assets.

[Eric Slifka, President, CEO & Director at Global Partners]

I wouldn't look at it as repositioning capital per se to terminals. The way I really think of it is we're trying to be opportunistic and do what is best at that moment in time. So if there are look, M and A is busy. It's busy at every level, whether that's terminal or whether that's retail. And it's really about finding the right deal that fits the company that we think competitively advantages us and allows us to make a somewhat higher return.

[Eric Slifka, President, CEO & Director at Global Partners]

And so those are the places we're going to continue to focus on and try to be competitive.

[Selman Akyol, Managing Director - Energy & Power sector at Stifel Financial Corp]

Got it. Thank you for that. And then, could you just talk a little bit about the market conditions that allowed wholesale to do so well and then currently what you're seeing in the marketplace?

[Gregory Hanson, Chief Financial Officer at Global Partners]

Yes. Can start, and Mark can fill in anything I missed, Selman. It's Greg. A couple of things. One, it was a nice cold winter up here in the Northeast, which definitely helped our wholesale distillate business.

[Gregory Hanson, Chief Financial Officer at Global Partners]

We've had two back to back warm winters. It was 9% colder. And then it was really the integration of our terminalling assets, the ExxonMobil terminal in East Providence and the Gulf Terminal that really added to our additional capacity on the wholesale side and allowed us to take advantage of market opportunities that were out there. I think it was a nice normalized quarter for us. I mentioned in my speaking points that last year was there was definitely some mark to market that impacted us in the first quarter of last year, so it's a tougher comparison.

[Gregory Hanson, Chief Financial Officer at Global Partners]

We didn't do as bad as it looks like last quarter. We just in the first quarter of twenty twenty four, we just got that back in 2025. But I think really it was a nicely nice quarter that was optimized around the integrated assets we've had on the Terminalling side. Know, Mark, if you have anything to add there?

[Mark Romaine, COO at Global Partners]

No.

[Selman Akyol, Managing Director - Energy & Power sector at Stifel Financial Corp]

Let me just ask you. In terms of just sort of timing and tariffs and all that, was there anything any dislocation up there in the Northeast markets where you were able to take advantage of?

[Mark Romaine, COO at Global Partners]

Selman, it's Mark. The tariff there was a very brief period of time. It was probably two days when the tariffs applied to Canadian oil and oil from Mexico, Canadian oil specifically more relevant to us. But very brief, created some volatility, which often benefits us, but it was very short lived. And right now, there's really no impact from a supply or a market condition standpoint.

[Mark Romaine, COO at Global Partners]

The only thing we're thinking about relative to how tariffs may impact us is perhaps as it starts to affect the consumer, it may have some impact on our store sales, but that's yet to be determined. I think if it's going to impact us, it will impact us there. From a supply and a margin and optimizing the business, not a real impact.

[Selman Akyol, Managing Director - Energy & Power sector at Stifel Financial Corp]

Got it. Okay. Appreciate the color. Thank you so much.

[Gregory Hanson, Chief Financial Officer at Global Partners]

Thanks, all.

[Operator]

Thank you. Mr. Slifka, there are no further questions in the queue. I'll turn the floor back to you for any final comments.

[Eric Slifka, President, CEO & Director at Global Partners]

Thank you for joining us this morning. We look forward to keeping you updated on our progress. Enjoy the rest of your spring, everyone.

[Operator]

Thank you. This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.

Participants

Executives

• Sean T. Geary, Chief Legal Officer
• Eric Slifka, President, CEO & Director
• Gregory Hanson, Chief Financial Officer
• Mark Romaine, COO

Analysts

• Selman Akyol, Managing Director - Energy & Power sector at Stifel Financial Corp