Transcript • May. 7, 2026 1:00 PM • Suburban Propane Partners L P (SPH)
Transcript
May. 7, 2026 1:00 PM
Suburban Propane Partners L P (SPH)
Name Not Provided: $169.5 million for the quarter were flat compared to the prior year second quarter as higher payroll and benefit-related expenses, along with higher fuel and vehicle maintenance costs, driven by elevated activity levels to meet stronger customer demand in the eastern territories, and an increase in accruals for self-insurance matters were offset by the recognition of production tax credits and a $2.9 million insurance recovery related to the partial settlement of certain claims associated with our RNG acquisition December 2022. The interest expense of $19.7 million for the quarter decreased 4.2% compared to the prior year's quarter, resulting from a lower level of average outstanding borrowings under a revolving credit facility and lower benchmark interest rates on revolving borrowings. Total capital spending for the quarter of $24.7 million was $5.4 million higher for our year second quarter, primarily due to the construction efforts at our Columbus, Ohio and upstate New York RNG facilities. On a year-to-date basis, our total growth capex for our RNG facilities totaled $19 million, and our full year capital spending estimate for the existing projects is $35 to $40 million. Turning to our balance sheet, During the second quarter, we utilized excess cash flows from operating activities to repay $64.3 million in borrowings under the revolver. Our consolidated leverage ratio for the 12-month period ended March 2026, improved 4.34 times, compared to 4.54 times for March 2025. We had an increase in adjusted EBITDA of $6 million, a total debt reduction of $32.3 million. We have now moved through our historically high period of seasonal working capital needs into the fiscal quarter as we expect to generate excess cash flows. We will continue to remain focused on utilizing excess cash flows to strengthen the balance sheet as opportunities arise to fund strategic growth, including the remaining growth capital for our R&D platform. We have more than ample borrowing capacity under our revolver to support our capital expansion plans and ongoing strategic growth initiatives. With that, I'll turn it back to Mike. Thanks, Mike.
Mike Stavala: As announced on April 23rd, our Board of Supervisors declared our quarterly distribution of 32.5 cents per common unit in respect of our second quarter of fiscal 2026. That equates to an annualized rate of $1.30 per common unit. Our quarterly distribution will be paid on May 12th to our unit holders of record as of May the 5th. Our distribution coverage continues to remain strong at 2.2 times for the trailing 12-month period ended March 2026. So just a few closing remarks. The management team here at Sperm Propane has been together for decades now. We've built our core propane business to be recognized as best in class with our hyperlocal operating model. As evidenced by our performance in this year's heating season, our business and our outstanding personnel are very well situated to adapt and handle whatever weather conditions come our way. When others in our industry may struggle to keep up in high demand scenarios, our hardworking and dedicated teams across the country rise to the occasion. I'm super proud of their efforts in the face of some very challenging operating conditions this past winter. They've also done a great job executing on our customer-based growth and retention initiatives, especially meeting growing demand for propane in certain unique applications, such as EV charging stations, powering port equipment, power generation for data center construction, backup power generation, and multipurpose agricultural uses. We're also proud of our expanded sponsorship with NASCAR and Speedway Motorsports as the official propane of NASCAR, which has given us the opportunity to showcase the power and versatility of propane in a very high-performance setting at 28 races throughout virtually every weekend of the NASCAR Cup Series. In the meantime, we have taken a measured and disciplined approach toward the execution of our long-term strategic growth plans as we continue to build out a renewable energy platform to support the evolving clean energy needs of our customers. As I mentioned in my opening remarks, we've been focused on stabilizing production levels, building a team, and increasing the scale of our R&G platform, a process that we call suburbanizing the platform. to deliver the same operational discipline and excellence that we have been known for within the propane space. We have made tremendous progress, and we believe that the market for RNG is still in the early stages, with tailwinds that will provide positive support for long-term growth potential given the ultra-low carbon qualities and its blending or drop-in replacement capabilities with traditional natural gas. And as we are coming up on our 100-year anniversary in 2028, we view the build-out of our renewable energy platform as truly long-term strategic investments to help set suburban propane up for its next century of success. In closing, I want to once again thank the more than 3,300 dedicated employees of suburban propane for their unwavering commitment to safety and outstanding customer service during a very challenging winter heating season. and during a time when our customers needed us most. Thank you. As always, we appreciate your support and attention this morning, and we'll now open the call for questions. And Morgan, if you could help us with that.
Morgan: Thank you. We will now begin the question and answer session. If you would like to ask a question, please press star, then the number one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star then the number one again.
Morgan: One moment while we compile the Q&A roster. If you would like to ask a question at this time, simply press star then the number one on your telephone keypad. It appears there are no questions at this time.
Morgan: I would like to turn the conference back over to Mike Stavala for any further remarks.
Mike Stavala: Great. Thank you, Morgan. And thank you all again for joining us. I hope you have a great summer. We look forward to talking to you again in August as we close out our third quarter results. So thank you again and please be safe.
Morgan: This concludes today's call. Thank you for attending. You may now disconnect and have a wonderful rest of your day.
