Q2 2025 Global Partners LP Earnings Call

Good day, everyone and welcome to the Global Partners. Second quarter 2025 Financial results conference call. Today's call is being recorded.

All lines have been placed in a listen-only mode with us from Global Partners are president and chief executive officer Mr. Eric slifka.

Chief Financial Officer, Mr. Gregory Hansen.

Keep Operating Officer Mr. Mark, romaine and chief legal officer, and secretary Mr. Shaun giri at this time, I'd like to turn the call over to Mr. Giri, for opening remarks, please go ahead, sir.

Good morning, everyone, and thank you for joining us. Today's call will include forward-looking statements within the meanings of federal securities laws, including projections or expectations concerning the future financial and operational performance of Global Partners. No assurance 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 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, Sean and good morning everyone. Global delivered strong second quarter results in line with our expectations.

These results reflect the strength of our integrated business, and the value of staying focused on disciplined execution.

For the first half of 2025, we grew earnings and cash flow year-over-year with net income. Increasing 8% adjusted, ebit dot increasing 7% and adjusted DCF increasing 9% from the same period last year.

That kind of performance speaks to the power of our Diversified platform and our ability to execute in a dynamic Market.

We see continued strength across our retail terminal and wholesale liquid energy segments. Our recent terminal acquisitions have expanded our reach.

Strengthened our presence in key markets and established an even stronger platform. For long-term unit, holder value, and future m&a opportunities.

To that end last month. The board approved, the quarterly cash distribution of 75 cents per unit. Our 15th consecutive increase

The distribution is payable on August 14th to unit holders of record as of the close of business on August 8th.

But before I turn the call over to Greg, I want to take a moment to reflect on the passing of my Uncle. Richard slifka, our longtime chairman of the board who left us peacefully in May at the age of 85. Richard was part of global for more than 60 years. His steady leadership and deep Integrity helped shape the company we are today.

Richie cared, deeply about people always Guided by a strong sense of purpose and a commitment to doing what was right for the long term.

Those who knew him. Well will remember his generosity thoughtfulness and quiet strength.

His presence is deeply missed in his legacy continues to live on in the values. He instilled across our organization and community

Following Richie's passing. We welcome, Tom, Jolla to our board of directors.

Tom brings a wealth of experience from his long legal career at Nutter, mcclen and fish where he has served as a partner since 1985.

With that, I'll turn the call over to Greg for the financial review. Greg.

Thank you, Eric and good morning everyone.

Turning to our results. It's important to note the difficult comparison of our second quarter, 2025 results with the second quarter of 2024.

Leading to outside wholesale segment, results on that quarter.

As a result, we believe that our year-to-date results through June provide, a more accurate gauge of our performance.

As Eric mentioned, for the first 6 months of 2025 compared to 2024, we saw strong growth in our performance, with the just Diva dub 189.4, million versus 177.3 million in 2024 and adjusted DCF of 98.8 million compared with 90.4 million.

Now turning to our worldly results as I review the numbers, please note that all comparisons will be with the second quarter of 2024 unless otherwise noted excuse me.

Net income for the second. Quarter was 25.2 million versus 46.1 million in Q2 last year. Eva de was 95.7 million for the second quarter compared with the 118.8 million and adjusted but that was 98.2 Million versus 121.1 million.

Distributed to a cash flow was 52 million for the second quarter, compared with 73.1 million and adjusted DCF was 52.3 Million compared with 74.2 Million last year.

For the second quarter of this year, net income Eva adjusts dividend DCF and adjusted DCF include a loss on early extinguishment of debt of 2.8 million. We're related to the Redemption of our senior notes. Due 2027 in the quarter,

Adjusting for this loss on earlier, distinguished from the debt or adjusted debit. For 20, for 2q, 25 was 101 million.

Trailing 12-month distribution coverage, as of June 30th, 2025 was 1.81 times or 1.75 times. After factoring in distributions to our preferred unit holders.

Turning to our segment. Details gtso product margin decreased 13.6 million to 207.9 million in the quarter. Primarily as a result of lower sight, count year-over-year and the impact of adverse weather conditions in the Northeast, which saw a record 13 weekends of consecutive rain

Product margin from gasoline distribution, decreased 9.4 million to 137.9 million.

Respecting lower fuel volumes due in part to the decrease site, count year-over-year and the weather impact.

On a cents per gallon basis. Fuel, margins of 36 cents per gallon remained flat with the second quarter of 2024,

Station operations product margin which includes convenience store and prepared. Food sales, Sundries. And Rental income was similarly impacted by the weather and lower sight count.

It decreased 4.2 million to 70 million in the second quarter of 2025 at quarter end. We had a portfolio of 1,553 sites 42 fewer than prior year as we continue our Strategic investment activities to enhance and optimize our overall portfolio of sites.

in addition we operated or supplied 66 sites under our spring Partners retail joint venture

Looking at the wholesale segment. Second quarter product margin was 91.7, million product margin from gasoline and gasoline, blend stocks decreased 11.6 million to 58.88 million primarily due to less favorable market conditions largely in gasoline. But also in gasoline button, stocks

that decline was partially offset by terminal Acquisitions from Gulf oil and Exxon Mobil in the second and fourth quarter of last year, respectively.

Product margin from diesel is now their oils increased 11.4 million to 32.9 million primarily due to more favorable market conditions.

the commercial segment product margin decreased, 0.1, million to 6.1 million in part due to less favorable market conditions in bunkering,

Looking at expenses operating expenses increased 5.7 million to 135.7 million. In the second quarter, primarily related to our terminal operations and the additions of the gulf and Exxon Mobil terminals.

Sgna increased 2.4 million in q2.25 to 74.7 million reflecting in part increases in wages and benefits and various other sgna expenses.

Interest expense was 35, 34.5 million in the second quarter of 25 down 1 million from last year in part due to lower average. Balances on our revolving credit facility.

Capex in the second quarter was 15 million. Consisting of 9.9 million of Maintenance capex and 5.1 million of expansion capex that primary related to investments in our gasoline stations and terminals.

For the full year. We continue to anticipate maintenance Capital expenditures of approximately 60 to 70 million.

Expansion Capital expenses. Excluding Acquisitions are anticipated to be approximately. 65 to 75 million in 2025 relating, primarily to investments in our gasoline station in terminal business.

At 70 million, the midpoint of our expansion. Capex range is down 10 million from the range stated in our year. End 2024 call.

Our current cap capex estimates depend in part. On the timing of completion of projects, availability of equipment and Workforce weather and until and unanticipated events or opportunities, requiring additional maintenance or Investments.

Turning to the balance sheet at June 30th, leverage as defined in our credit agreement, as funded debt to Evita was 3.5 times. We had 198.5 million outstanding on the working capital, revolving credit facility and 88.2 million outstanding on the revolving credit facility.

During the quarter, we completed, an upsized private offering of 450 million senior, unsecured notes with a 7 and 1/8 interest rate in a 2033 maturity.

We used the proceeds to retire $400 million of 7% senior notes due 2027 through a combination of a cash tender offer and a subsequent redemption.

The remaining funds were used to pay down borrowings under our credit facility.

This transaction, strengthens our balance sheet, extends, our debt, maturity profile, enhances, our financial flexibility, moving forward.

Before I hand the call back to Eric for closing remarks, I'll just mention that we'll be participating in cities 2025 natural resources Conference next week. If you're attending we look forward to seeing you there.

Now, let me turn the call back to Eric for closing comments. Eric.

Thanks Greg. As we move into the second half of the Year, our Focus remains on operational excellence.

Disciplined Capital allocation, and delivering consistent returns for our unit holders. Now Greg, Mark, and I would be happy to take your questions. Uh, operator, please open the line for Q&A.

At this time, we will conduct the question and answer session.

If you would like to ask a question, please press star then the number 1 on your telephone keypad now and you will be placed in the queue in the order received.

Once again, in order to ask a question at this time, please press star then the number 1 on your telephone keypad now.

Your first question comes from Selman, akhil with stifel your line is open.

Thank you. Good morning. Um, Eric those were truly kind words on your uncle and they were heartfelt and sorry for your loss. Um, thank you. Thank you very much, Charlotte. I do appreciate that. Um,

I guess, just you guys talked about the weather and I'm just wondering, is there any way you can quantify, what impact you thought that would had on the quarter?

Save my angel with the same site, store merchandising and really. It it really impacted me and into the first couple of weeks of of June, I don't have a number for you but it it was material, it rains.

Those every Saturday for those 13 weeks, you know, that's that hasn't rained that much on weekends, in the Northeast since 1970. Uh, it's the last time it was 12 weeks was the previous record of 13 weeks. So we really thought our in our May results and you know, an impact did not just the merchandising and Pac Fab sales and things like that, but also the fuel side. But I don't have a exact number to give to you.

Understood. Um, and you also referenced sort of, you know, 42 fewer sites. So I'm just curious how close are you to being done on the rationalization or is there?

Much more to go.

Yeah, I'd quantify it not much more to go. I think we're very happy where we are on a site count. You know, we do an annual review every year and looking at our sites. We look at, you know, the sustainability of those sites over the next 10 years if they fit our operating model, if they're, if they should be a company operated or they should be a dealer or a commission agent. So, we looked at the class of trade, too. You know, I think where we sit right now. We're, we're very satisfied with our portfolio overall. This is probably a handful of sites that we'd look to potentially either convert or or divest. And then, you know we will do another review process as we annually. Do towards the, the fourth quarter, um, and then look at the process, but it's a, it's a continuing process. As soon as we buy stuff sites or, you know, do raise and rebills or NTS. It's just that. It's a constant sort of churn in the portfolio but that was, that was probably a bigger chunk last year and the the 40 cents we did. But I think we're

Overall, we're pretty comfortable with the the portfolio as a stand today.

Got it and and you guys had strengths in your cpg. And so I'm curious is

That you know tied back to the terminals. We've been acquiring and and we're seeing that kind of get layered in there.

is crashed pretty quickly and you had decent margins in April and then you know may was sort of a grinded out month until you know, June you saw the big spike when I ran the bombing if I ran happened and then it quickly came off so towards the end of June, there was some opportunities for a decent margins but overall I put I'd probably say at the more normalized quarter overall,

Got it. And then, um, can you guys just sort of comment on the acquisition Outlook and and what you're seeing out there and, uh, you know, or bid ask spread still pretty wide or coming in anything you can offer color there

Yeah I mean it I think you it's Eric Smith guy I think you hit it right on the on the nose there. Um bid offers are wide on the terminal link side, I'd say on the retail side um it remains active. Um but you know I think there's some opportunities out there and we'll just see if there's uh, a way to try and move forward.

All right, I'll leave it at that. Thank you kindly.

Thanks.

At this time, I'd like to turn the call back to Mr. Slifka for a closing comments.

Thank you for joining us this morning and we look forward to keeping you updated on our progress. Thanks, everyone.

This concludes today's call, thank you for attending and have a wonderful rest of your day.