Q2 2024Global Partners LP Earnings Call

Operator: Good day everyone, and welcome to the Global Partners second quarter 2024 financial results conference call. Today's call is being recorded. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad.

Operator: Good day, everyone, and welcome to the Global Partners Second Quarter 2024 Financial Results Conference Call. Today's call is being recorded. If anyone should require operator assistance during the conference, please press star 0 on your telephone keypad.

Good day, everyone and welcome to the Global Partners second quarter 2024 financial results Conference call.

Today's call is being recorded.

If anyone should require operator assistance during the conference. Please press star zero on your telephone keypad.

Operator: With us from Global Partners, our President and Chief Executive Officer, Mr. Eric Slifka; Chief Financial Officer, Mr. Gregory Hanson; Chief Operating Officer, Mr. Mark Romaine; and Chief Legal Officer and Secretary, Mr. Sean Geary.

We just don't care, what partners are president and Chief Executive Officer, Mr. Eric Slifka.

<unk> Chief Financial Officer, Mr. Gregory Hanson.

Speaker Change: Chief operating officer, Mr. Mark Romaine, and Chief Legal Officer, and Secretary, Mr. Sean Gary.

Sean Geary: At this time, I would like to turn the call over to Mr. Geary for opening remarks. Please go ahead, sir.

Operator: With us from Global Partners are our President and Chief Executive Officer, Mr. Eric Slifka; our Chief Financial Officer, Mr. Gregory Hanson; our Chief Operating Officer, Mr. Mark Romaine; and our Chief Legal Officer and Secretary, Mr. Sean Geary. At this time, I would like to turn the call over to Mr. Geary for opening remarks. Please go ahead, sir.

Speaker Change: At this time I would like to turn the call over to Mr. Gary for opening remarks. Please go ahead Sir.

Sean Geary: Good morning, everyone. Thank you for joining us.

Sean Geary: Good morning, everyone. Thank you for joining us. Today's call will include forward-looking statements within the meeting of federal security blogs, 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.

Speaker Change: 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.

Sean Geary: 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. However, no assurances can be given that these projections will be attained or that these expectations will be met. Our assumptions of 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. Now, it's my pleasure to turn the call over to our President and Chief Executive Officer, Eric Slifka. Thank you.

Speaker Change: For instance can be given that these projections will be attained.

Speaker Change: Expectations will be met.

Sean Geary: Our assumptions of in-future performance are subject to a wide range of business risks, uncertainties, and factors which could cause factual results to differ materially at describing our filings with the Securities and Exchange Commission. Global Partners undertakes no obligation to revise or update any forward-looking statements.

Speaker Change: Our assumptions are in 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 now it's my pleasure to turn the call over.

Eric Slifka: Now it's my pleasure to turn the call over to our President and Chief Executive Officer, Eric Slifka. Thank you, Sean. Good morning, everyone. The company delivered year-over-year growth across all key profitability metrics in Q2. Our results continue to reinforce the strength of our business model and our integrated portfolio of liquid energy journals, fueling stations, and convenient markets. Looking at our overall performance in Q2, we posted gains in operating income, net income, CCF, and adjusted EBITDA, driven by strong results in both our wholesale and GDSL segments. Over the past nine months, we've invested more than 500 million to significantly expand our wholesale segment footprint through the strategic acquisition of a combined 29 terminals for Motiva Enterprise and Gulf Oil, more than doubling our storage capacity to 21.4 million barrels.

Speaker Change: To our President and Chief Executive Officer, Eric Slifka.

Eric Slifka: Thank you, Sean, and good morning, everyone. The company delivered year-over-year growth across all key profitability metrics in Q2. Our results continue to reinforce the strength of our business model and our integrated portfolio of liquid energy terminals, fueling stations, and convenient markets. Looking at our overall performance in Q2, we posted gains in operating income, net income, DCF, and adjusted EBITDA, driven by strong results in both our wholesale and GDSO segments. Over the past nine months, we've invested more than $500 million to significantly expand our wholesale segment footprint through the strategic acquisition of a combined 29 terminals from Motiva Enterprise and Gulf Oil, more than doubling our storage capacity to 21.4 million barrels. These terminals expand our geographic reach within New England, along the eastern seaboard, and into Florida, the Gulf Coast, and Texas.

Eric Slifka: Thank you, Sean and good morning, everyone. The company delivered year over year growth across all key profitability metrics in Q2.

Speaker Change: Our results continue to reinforce the strength of our business model and our integrated portfolio of liquid energy terminals fueling stations and convenient market.

Speaker Change: Looking at our overall performance in Q2, we posted gains in operating income net income DCF and adjusted EBITDA driven by strong results in both our wholesale and <unk> segments.

Over the past nine months, we've invested more than 500 million to significantly expand our wholesale segment footprint through the strategic acquisition of a combined 29 terminals for Motiva enterprises, and Gulf oil more than doubling our storage capacity to 21 4 million barrels east.

Eric Slifka: These terminals expand our geographic reach within New England, along the Eastern Seaboard, and into Florida, the Gulf Coast, and Texas. We have identified numerous opportunities to invest and optimize in these newly acquired terminals. As we have discussed on prior calls, the Motiva transaction is underpinned by a 25-year paper pay-throughput agreement that includes minimum annual revenue commitments.

Speaker Change: These terminals expand our geographic reach within new England, along the eastern Seaboard and into Florida, The Gulf Coast and Texas.

Eric Slifka: We have identified numerous opportunities to invest and optimize in these newly acquired terminals. As we have discussed on prior calls, the MOTIVA transaction is underpinned by a 25-year take-or-pay throughput agreement that includes a minimum annual revenue commitment. I also want to highlight GDSO's solid performance.

Speaker Change: We have identified numerous opportunities to invest and optimize and these newly acquired terminals.

Speaker Change: As we have discussed on prior calls and Motiva transaction is underpinned by a 25 year take or pay throughput agreement that includes minimum annual revenue commitments.

Eric Slifka: I also want to highlight GDSL's solid performance. The segment continues to benefit from healthy retail fuel margins and successful merchandising initiatives in our convenience markets.

Speaker Change: I also want to highlight G. DSO solid performance. The segment continues to benefit from healthy retail fuel margins and successful merchandising initiatives in our convenience markets.

Eric Slifka: The segment continues to benefit from healthy retail fuel margins and successful merchandising initiatives in our convenience market. Turning to our distribution, in July, the board declared a quarterly cash distribution on our common units of $0.72, or $2.88 on an annualized basis. This distribution represents a 6.7% increase over the prior year and is payable on August 14 to unit holders of record as of the close of business on August 8. I'll turn the call over to Greg for the financial review. Thank you, Eric, and good morning, everyone.

Eric Slifka: Turning to our distribution, in July, the board declared a quarterly cash distribution on our common units of 72 cents, or 288 on an annualized basis. This debt distribution represents a 6.7% increase over the prior year and is payable on August 14th to unit holders of record as of the close of business on August 8th.

Speaker Change: Turning to our distribution in July the board declared a quarterly cash distribution on our common units or 72 cents or $2 88 on an annualized basis.

Speaker Change: This distribution represents a six 7% increase over the prior year and is payable on August 14th to unit holders of record as of the close of business on August eight let.

Gregory Hanson: Let me turn the call over to Gregg for the financial review. Gregg. Thank you, Eric, and good morning, everyone. As you review the numbers, please note that I'm, unless otherwise noted, all comparisons will be with the second quarter of 2023. In the second quarter of 2024, compared with 54.8 million in 2023, and adjusted DCF with 74.2 million compared with 53.3 million. LTM distribution coverage as of June 30th was 1.8 times or 1.6 times after factory and distribution to our preferred unit holders. 30 to our segment details, GDSO product margin increased 22.4 million in the quarter to 221.5 million.

Speaker Change: Let me turn the call over to Greg for the financial review Greg.

Greg: Thank you, Eric and good morning, everyone.

Gregory Hanson: As we review the numbers, please note that, unless otherwise noted, all comparisons will be with the second quarter of 2020. Adjusted EBITDA was $121.1 million in the second quarter, compared with $90.4 million in net income of $46.1 million, compared with $41.4 million in the second quarter of 2023. Distributable cash flow was $73.1 million in the second quarter of 2024, compared with $54.8 million in 2023, and adjusted DCF was $74.2 million, compared with $53.3 million. LTM distribution coverage as of June 30th was 1.8 times, or 1.6 times, after factoring in distributions to our preferred unit holder.

Review the numbers. Please note that unless otherwise noted all comparisons will be with the second quarter of 2023.

Greg: Adjusted EBITDA was $121 1 million in the second quarter compared with $90 4 million net income and net income of $46 1 million compared with $41 4 million in the second quarter of 2023 distributable cash flow was $73 1 million in the second quarter of 2004, compared with $54 8 million in 2023.

Greg: Adjusted DCF was $74 2 million compared with $53 3 million.

Greg: LTM distribution beverage as of June 30 was one eight times or one six times after factoring in distributions to our preferred unitholders.

Gregory Hanson: Turning to our segment details, GDSO product margin increased $22.4 million in the quarter to $221.5 million. Product margin from gasoline distribution increased $19.4 million to $147.3 million, primarily reflecting higher fuel margins year-over-year. On a cent-per-gallon basis, fuel margins increased $0.05 to $0.36 in Q2'24 from $0.31 in Q2'23. Station operations product margin, which includes convenience store and prepared food sales, sundries, and rental income, increased $3 million to $74.2 million in the second quarter of 2024, highlighting the continued success of our merchandising. At Quarter End, our portfolio of fueling stations and C-Store sites totaled 1,595. Additionally, we operate 64 sites under our Spring Partners retail joint.

Greg: Turning to our segment details GSO product margin increased 22 $4 million in the quarter to $221 5 million.

Gregory Hanson: Product margin from gasoline distribution increased 19.4 million to 147.3 million, for a merit of reflectors like the entire fuel margin to year over year. On a sense-for-down basis, fuel margin increased 5 cents to 36 cents in Q224 from 31 cents in Q223. Station operations product margin, which includes convenience store and prepared food sales, sundries, and rental income, increased 3.9 million to 74.2 million in the second quarter of 2024, highlighting the continued success of our merchandising efforts. At quarter end, our portfolio of fueling stations and sea store sites total of 1,595. Additionally, we operate 64 sites under our Spring Partners retail joint venture.

Greg: Margin from gasoline distribution increased $19 4 million to $147 3 million, primarily reflecting higher fuel margins year over year on a cents per gallon basis fuel margin increased five to 36 cents to <unk> 24 from 31 in Q2 'twenty three.

Greg: Station operations product margin, which includes convenience store in prepared foods sales sundries and rental income increased 3 million to $74 2 million in the second quarter of 2024, highlighting the continued success of our merchandising efforts.

Greg: At quarter end, our portfolio of fueling stations and C store sites totaled 1595. Additionally, we operated 64 sites under our spring partners retail joint venture.

Gregory Hanson: Looking at the wholesale segment, second quarter of 2024, product margin increased 32.2 million to 91.9 million. Product margin from gasoline to gasoline blend stocks increased 31.4 million to 70.4 million, primarily due to the acquisition of the Motiva terminals in December of 23, and more favorable market conditions in gasoline. Product margin from distillate and other oils increased 0.8 million to 21.5 million, primarily due to more favorable market conditions in distillate. Partially offset by less favorable market conditions in residual oil. I would also add, as we mentioned in the first quarter earnings call, certain products in our wholesale segment were negatively impacted by the timing of market evaluation in the first quarter.

Gregory Hanson: Looking at the wholesale segment, second quarter 2024 product margin increased $32.2 million to $91.9 million. Product margin from gasoline and gasoline blend stocks increased $31.4 million to $70.4 million, primarily due to the acquisition of the Motiva terminals in December of 2023 and more favorable market conditions in gasoline. Product margin from distillates and other oils increased $0.8 million to $21.5 million, primarily due to more favorable market conditions in distillates, partially offset by less favorable market conditions in residual oils.

Greg: Looking at the wholesale segment second quarter 2020 for product margin increased $32 2 million to $91 9 million.

Greg: Product margin from gasoline and gasoline blend stocks increased $31 4 million to $70 4 million, primarily due to the acquisition of the Milky. The terminals in December of 'twenty, three and more favorable market conditions in gasoline.

Greg: Product margin from distillate and other oils decreased <unk> 8 million to 21.5.

Greg: Primarily due to more favorable market conditions suggest all partially offset by less favorable market conditions and residual oil.

Gregory Hanson: I would also add, as we mentioned in the first quarter earnings call, certain products in our wholesale segment were negatively impacted by the timing of mark-to-mark evaluations in the first quarter, but those impacts were fully recovered in the second quarter.

Speaker Change: I would also add as we mentioned in the first quarter earnings call certain products in our wholesale segment were negatively impacted by the timing of mark to market valuations in the first quarter those impacts were fully recovered in the second quarter.

Gregory Hanson: Those impacts were fully recovered in the second quarter. Commercial segment product margin decreased 0.6 million to 6.2 million, primarily due to less favorable market conditions. 32 expenses, operating expenses increased 19.6 million to 139 second quarter, largely related to the terminal acquisitions from Motiva and Gulf. SGNA expense increased 5.6 million to 224 to 72.3 million, primarily due to increases in long-term incentive from wages and benefits and professional fees. Interest expense increased 13.7 million to 35.5 million to the second quarter of 24. Primarily due to the interest expense related to the 8.4 senior notes issued this past January, which reviewed to facilitate the Motiva acquisition and higher average balances on our credit facilities as a result of the recent Gulf terminal acquisition.

Gregory Hanson: Commercial segment product margin decreased $0.6 million to $6.2 million, primarily due to less favorable market conditions. Turning to expenses, operating expenses increased $19.6 million to $130 million in the second quarter. Largely related to the terminal acquisitions from Motiva and Gold. SG&A expense increased $5.6 million in Q2'24 to $72.3 million, primarily due to increases in long-term incentive comp, wages and benefits, and professional, Interest expense increased $13.7 million to $35.5 million in the second quarter of 2020, primarily due to the interest expense related to the eight-and-a-quarter senior notes issued this past January, which were used to facilitate the Motiva acquisition, and higher average balances on our credit facilities as a result of the recent Gulf Terminals acquisition.

Speaker Change: Commercial segment product margin decreased <unk> 6 million to $6 2 million, primarily due to less favorable market conditions.

Speaker Change: Turning to expenses operating expenses increased $19 6 million to $130 million second quarter largely related to the terminal acquisitions for Motiva.

Speaker Change: SG&A expense increased $5 6 million in Q2, 24 to $72 3 million primary primarily due to increases in long term incentive comp wages and benefits and professional fees.

Speaker Change: Interest expense decreased $13 7 million to $35 5 million in the second quarter of 24, primarily due to the interest expense related to the eight and a quarter senior notes issued this past January which were used to facilitate the motiva acquisition and higher average balances on our credit facility as a result of the recent Gulf terminals acquisition.

Gregory Hanson: CapEx from the second quarter was 15.6 million, consisting of 8.9 million of maintenance CapEx and 6.7 million of expansion CapEx. Primarily due to investments in our gasoline station in terminal acquisitions.

Gregory Hanson: CapEx in the second quarter was $15.69 million, consisting of $8.9 million of maintenance CapEx and $6.7 million of expansion CapEx, primarily related to investments in our gasoline station and terminal. For the full year of 2024, we currently expect maintenance capital expenditures in the range of $50 to $60 million and expanded capital expenditures, excluding acquisitions, in the range of $60 to $70 million, relating primarily to our gasoline station and termite These current estimates depend in part on the timing of project completion, the availability of equipment and the workforce, weather, and unanticipated events and opportunities requiring additional maintenance or investment.

Speaker Change: Capex in the second quarter was $15 6 million consisting of $8 9 million of maintenance Capex and $6 7 million of expansion Capex, primarily related to investments in our gasoline station and terminal business.

Gregory Hanson: Services. For the full year of 2024, we currently expect maintenance capital expenders in the range of 50 to 60 million and expanded capital expenders, including acquisitions, in the range of 60 to 70 million, relating primarily to our gasoline station and terminal businesses. These current estimates depend on part of the timing of project completion and availability equipment and workforce, whether in unanticipated events and opportunities requiring additional maintenance or investments. Our balance sheet remains strong at June 30th with leverages defined in our credit agreement as funded at EVIDa at 3.48 times and ample access to passing our credit facilities.

Speaker Change: For the full year 2024, we currently expect maintenance capital expenditures in the range of $50 million to $60 million and expansion capital expenditures, including excluding acquisitions in the range of 60 to 70 million relating primarily to our gasoline station in terms of your businesses. He's trying to estimate it depends in part on the timing of project completion availability of equipment and workforce, whether an unanticipated.

Speaker Change: It's opportunities requiring additional maintenance for investments.

Gregory Hanson: Our balance sheet remains strong as of June 30th, with leverage as defined in our credit agreement as funded by EBITDA at 3.48 times and ample excess capacity in our loans. As of June 30, we had $281.2 million in borrowings outstanding under a working capital or revolving credit facility and $200 million outstanding under a revolving credit facility. As I noted on our Q1 call, on April 15th, we fully redeemed all the outstanding Series A fixed uploading rate cumulative redeemable perpetual preferred units. This transaction was immediately accreted to distributable cash flow and at current interest rates is expected to be approximately 9 cents accreted per unit on an annual basis.

Speaker Change: Our balance sheet remains strong at June 30, with leverage as defined in our credit agreement as funded debt to EBITDA of $3 four eight times and ample excess capacity out of credit facilities as of June 30, we had $281 $2 million in borrowings outstanding under our working capital revolving credit facility and $200 million outstanding on our revolving credit facility.

Gregory Hanson: As of June 30th, we had 281.2 million and borrowings outstanding under working capital revolving credit facility and 209 outstanding on revolving credit facility. As I noted on our Q1 call, on April 15th, we fully redeemed all the outstanding Series A fixed-to-floating rate cumulative redeemable perpetual preferred units. This transaction was immediately accrued to distribute a cash flow, and a current interest rate is expected to be approximately 9 cents accrued to presumed upon an annual basis. Turning to our upcoming investor relations calendar, next week we'll be participating in the City, 2024-1 and 1 Midstream and New Energy Infrastructure Conference.

Speaker Change: As I noted on our Q1 call on April 15th we fully redeemed all of the outstanding series, a fixed to floating rate cumulative redeemable perpetual preferred units.

Speaker Change: This transaction was immediately accretive to distributable cash flow in the current interest rate is expected to be approximately nine cents accretive per unit on an annual basis.

Gregory Hanson: Turning to our upcoming investor relations calendar, next week we'll be participating in the Citi 2024 one-on-one midstream and new energy infrastructure events. Please contact our IR team if you'd like to schedule a meeting during the conference. Now, let me turn the call back to Eric for closing comments. Thanks, Greg. In closing, we begin the second half of the year with positive momentum. We look forward to building on our success in the first half of 2024 by continuing to execute our strategic growth objectives and deliver value for our unit holders. With that, Gregg, Mark, and I would be happy to take your questions. Operator, please open the line for Q&A.

Speaker Change: Turning to our upcoming Investor Relations calendar next week, we'll be participating in the Citi 2020 for one on one midstream in new energy infrastructure conference. Please contact our IR team, if you'd like to schedule a meeting or conference.

Gregory Hanson: Please contact our IRT if you'd like to schedule meetings during the conference.

Eric Slifka: Now let me turn the call back to Eric for closing comments. Thanks, Greg. In closing, we begin the second half of the year with positive momentum. We look forward to building on our success in the first half of 2024 by continuing to execute our strategic growth objectives and deliver value for our unit owners.

Speaker Change: Now, let me turn the call back to Eric for closing comments. Thanks.

Eric Slifka: Thanks, Greg in closing we began the second half of the year with positive momentum we look forward to building on our success in the first half of 2024 by continuing to execute our strategic growth objectives and deliver value for our unit holders with that Greg Mark and I will be happy to take your questions.

Eric Slifka: With that, Greg, Mark, and I will be happy to take your questions.

Operator: Operator, please open the line for Q&A. Thank you. We will now be conducting a question and answer session. If you want keypad, a confirmation tome will indicate your line in the question Q. You may press star Q if you would like to remove your question from the Q. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Once again, if you would like to ask a question, press *1 on your telephone keypad.

Speaker Change: Operator, please open the line for Q&A.

Operator: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Speaker Change: Thank you we will now be conducting a question and answer session.

Speaker Change: You would like to ask a question. Please press star one on your telephone keypad.

Speaker Change: A confirmation tone will indicate your line is in the question queue. You May Press Star two if you would like to remove your question from the queue.

Speaker Change: All participants using speaker equipment, it may be necessary to pick up your handset before pressing the darkies.

Operator: Once again, if you would like to ask a question, press star 1 on your telephone keypad. One moment, please, while we poll for questions. Thank you. Our first question comes from the line of Selman Akyol with Stiefel. Please proceed with your question.

Speaker Change: Once again, if you would like to ask a question press star one on your telephone keypad.

Operator: When moment, please, while we hold for questions. Thank you.

Speaker Change: One moment, please while we poll for questions.

Selman <unk>: Thank you. Our first question comes from the line of Selman <unk> with Stifel. Please proceed with your question.

Selman Akyol: Our first question comes from a line of Selman Akhil with Steeple. Please proceed with your question. Thank you very much.

Selman Akyol: Thank you very much. Congratulations on a nice quarter.

Selman <unk>: Thank you very much congratulations on a nice quarter.

Eric Slifka: Congratulations on a nice quarter. Why don't you just follow up on your opening comments where you talked about the wholesale, all the investment that you've done and you tied it up with sort of opportunities to invest, and I wanted to explore that. Can you just maybe explain that a little bit more in the sense of are you seeing more terminals to add, or are you talking about trying to fill in, you know, GDSO around terminals that you now have that you didn't previously? Maybe you could just explain that a little bit more.

Speaker Change: Uh huh.

Selman <unk>: Wanted to just follow up on your opening comments, where you talked about the wholesale all the investment that you've done in.

You tied it up with sort of opportunities to invest and I wanted to explore that can you just.

Selman Akyol: I wanted to just follow up on your opening comments where you talked about wholesale, all the investment that you've done, and you tied it up with sort of opportunities to invest, and I wanted to explore that. Maybe explain that a little bit more in the sense of, are you seeing more terminals to add? Are you talking about trying to fill in, you know, GDSO around terminals that you now have that you didn't previously? Maybe you could just explain that a little bit more.

Speaker Change: Maybe explain that a little bit more in the sense of are you seeing more terminals to add or are you talking about trying to fill in.

Speaker Change: Ah you know G D. S O around terminals that you now have that you didn't previously maybe you could just explain that a little bit more.

Eric Slifka: Hi Selman, it's Eric. You know I would say generally M&A remains active both in the termiling business as well as in the retail business but you know we've bought a lot of terminals relative to our total terminal count here in the last you know six months and so I think there's a real opportunity to make sure that we're maximizing the value that we can get from each asset that we now have and you know there'll be some investment there but it's also you know how we operate how we operate differently and it could be things that are around rail capacity and building out unit rate capacity it's just about trying to provide flexibility around the existing assets that we have and and so I think there's a real opportunity for us to drive value just through the existing assets as well.

Eric Slifka: Hi Selman Akhil. You know, I would say generally M&A remained active, both in the terminal and business as well as in the retail business. But, you know, we've bought a lot of terminals relative to our total terminal account here in the last, you know, six months, and so I think there's a real opportunity to make sure that we're maximizing the value that we can get from each asset that we now have. And, you know, there'll be some investment there, but it's also, you know, how we operate, how we operate differently, and it could be things that are around rail capacity and building up unit training capacity.

Speaker Change: Alright, so minutes there I you know I would say generally.

Speaker Change: M&A remains active both in the Terminalling business as well as in the retail business.

Speaker Change: But we bought a lot of terminals relative to our public peer woke out here in the last.

Speaker Change: Six months and so I think there's a real opportunity to make sure that we're maximizing the value that we can get from each asset that we now have.

Speaker Change: And there'll be some investment there, but it's also you know how we operate how we operate differently and it could be things that are around our rail capacity and building out a unit train capacity. It's just about trying to provide flexibility around the existing assets that.

Eric Slifka: It's just about trying to provide flexibility around the existing. and I think there's a real opportunity for us to drive value just through the existing assets as well.

Speaker Change: That we have and so I think there's a real opportunity for us to drive value just through the existing assets as well.

Mark Romaine: Got it. And then, I'll see you talked about increased merchandising efforts. And I'm just wondering, is that rolled through out all your stores, or should we expect that as an ongoing effort to see benefits in future quarters as well? Yes.

Speaker Change: Got it.

Speaker Change: And then also you talked about.

Mark Romaine: increased merchandising efforts. And I'm just wondering, has that rolled through all your stores? Or should we expect that as an ongoing effort and to see benefits in future quarters as well?

Speaker Change: Increased merchandising efforts and I'm, just wondering has that rolled through out all your stores or should we expect that as an ongoing effort in to see benefits in future quarters as well.

Mark Romaine: Yes. Good morning, Selman. It's Mark. Transcripts provided by Transcription Outsourcing, LLC. understood, and then just the last

Mark Romaine: Yes, good morning, it's mark.

Mark Romaine: Good morning, Selman. It's Mark. Those efforts are spread across the entire portfolio. And they're not new. We have always tried to optimize our merchandising plan, optimize our SKUs, optimize our pricing, and introduce new items as things change in the marketplace. So that's an ongoing effort. I think we continue to improve in that area. We continue to see the benefit of that through our execution. So that's an ongoing effort through the entire portfolio. And we'll continue to work away at that.

Mark Romaine: Those efforts are spread across the entire portfolio.

And then they're not do I mean, we have we are always trying to optimize our merchandising plan optimize our skus optimize our pricing.

Mark Romaine: Introduce new items as you know is.

Speaker Change: Things change in the marketplace. So that's an ongoing effort.

You know I think we will continue to improve in that area and we continue to.

Speaker Change: You know we continue to see the benefit of that through you know through our execution. So that's something that's an ongoing effort through the entire portfolio.

Speaker Change: To work with that.

Mark Romaine: Understood. And then just the last one for me. Any update on your JV down in Houston and potentially more sites coming?

Speaker Change: Understood and then just the last one for me any update on your JV down in Houston and potentially more.

Selman Akyol: And then just the last one for me. Any update on your JV down in Houston and, potentially, more?

Speaker Change: Sites coming.

Speaker Change: Yeah.

Mark Romaine: Hey Selman, it's Rick. I'm doing. Yeah, I mean, we continue to be encouraged by the JV. I think it opens up another geography for us on the retail front, especially a very large state in one of the largest convenience store markets. In the U.S. And yeah, I mean, we hope to continue to grow that joint venture as Eric mentioned. You know, the retail M&A market continues to be pretty active. So, you know, we can continue to look at all opportunities in that geography to potentially, hopefully, expand that. Got it.

Gregory Hanson: Hey Selman, it's Greg. How are you doing?

Speaker Change: Hey, Tom it's right yeah.

Tom: Yes, I mean, we continue to be encouraged by the JV.

Speaker Change: I think it opens up another geography for us on the retail front, especially with a large state and one of the largest convenience store markets.

Gregory Hanson: Yeah, I mean, we continue to be encouraged by the JV. I think it opens up another geography for us on the retail front, especially a very large state and one of the largest convenience store markets in the US. And yeah, I mean, we hope to continue to grow that joint venture, as Eric mentioned. You know, the retail M&A market continues to be pretty active. So, you know, we can continue to look at all opportunities in that geography to potentially, hopefully, expand that.

Speaker Change: In the U S and we hope to continue to grow that joint venture as Eric mentioned.

Selman Akyol: Got it. Thank you so much.

Eric Slifka: The the retail M&A market continues to be pretty active. So we can continue to look at all opportunities are in that geography to potentially hopefully expand that.

Speaker Change: Got it thank you so much.

Selman Akyol: Thank you so much.

Eric Slifka: Thank you. I will now turn the call back to Mr. Slifka for closing comments.

Speaker Change: Thank you I will now turn the call back to Mr. Slifka for closing comments.

Eric Slifka: I will now turn the call back to Mr. Slyfka for closing comments. Thanks for joining us this morning. We look forward to keeping you updated on our progress. Thanks so much, everyone.

Eric Slifka: Thanks for joining us this morning. We look forward to keeping you updated on our progress. Thanks so much, everyone.

Mr. Slifka: Thanks for joining us. This morning, we look forward to keeping you updated on our progress. Thanks, so much everyone.

Speaker Change: Okay.

Operator: Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a wonderful day.

Operator: Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation and have a wonderful day.

Speaker Change: Ladies and gentlemen, this does conclude today's teleconference. You may disconnect. Your lines at this time. Thank you for your participation and have a wonderful day.