Star Gas Partners, L.P. Reports Fiscal 2013 First Quarter Results
For the fiscal 2013 first quarter, Star reported an 11.9 percent increase in total revenue to
Home heating oil and propane volume for the fiscal 2013 first quarter increased by 6.0 million gallons, to 97.1 million gallons, as the impact of colder temperatures and the additional volume provided by acquisitions more than offset the impact of net customer attrition and other factors affecting volume. Temperatures in Star's geographic areas of operation for the fiscal 2013 first quarter were 15.8 percent colder than the fiscal 2012 first quarter but 7.4 percent warmer than normal, as reported by the
During the fiscal 2013 first quarter, net income increased by
Adjusted EBITDA increased by
"We were pleased to see colder weather in our first quarter versus fiscal 2012, albeit temperatures were still warmer than normal for the regions we serve," said
EBITDA and Adjusted EBITDA (Non-GAAP Financial Measures)
EBITDA (Earnings from continuing operations before net interest expense, income taxes, depreciation and amortization) and Adjusted EBITDA (Earnings from continuing operations before net interest expense, income taxes, depreciation and amortization, (increase) decrease in the fair value of derivatives, gain or loss on debt redemption, goodwill impairment, and other non-cash and non-operating charges) are non-GAAP financial measures that are used as supplemental financial measures by management and external users of our financial statements, such as investors, commercial banks and research analysts, to assess:
- our compliance with certain financial covenants included in our debt agreements;
- our financial performance without regard to financing methods, capital structure, income taxes or historical cost basis;
- our ability to generate cash sufficient to pay interest on our indebtedness and to make distributions to our partners;
- our operating performance and return on invested capital as compared to those of other companies in the retail distribution of refined petroleum products business, without regard to financing methods and capital structure; and
- the viability of acquisitions and capital expenditure projects and the overall rates of return of alternative investment opportunities.
The method of calculating Adjusted EBITDA may not be consistent with that of other companies and each of EBITDA and Adjusted EBITDA has its limitations as an analytical tool, should not be considered in isolation and should be viewed in conjunction with measurements that are computed in accordance with GAAP. Some of the limitations of EBITDA and Adjusted EBITDA are:
- EBITDA and Adjusted EBITDA do not reflect our cash used for capital expenditures;
- Although depreciation and amortization are non-cash charges, the assets being depreciated or amortized often will have to be replaced and EBITDA and Adjusted EBITDA do not reflect the cash requirements for such replacements;
- EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital requirements;
- EBITDA and Adjusted EBITDA do not reflect the cash necessary to make payments of interest or principal on our indebtedness; and
- EBITDA and Adjusted EBITDA do not reflect the cash required to pay taxes.
REMINDER:
About
Forward-Looking Information
This news release includes "forward-looking statements" which represent the Partnership's expectations or beliefs concerning future events that involve risks and uncertainties, including those associated with the effect of weather conditions on our financial performance; the price and supply of the products that we sell; the consumption patterns of our customers; our ability to obtain satisfactory gross profit margins; our ability to obtain new customers and retain existing customers; our ability to make strategic acquisitions; the impact of litigation; our ability to contract for our current and future supply needs; natural gas conversions; future union relations and the outcome of current and future union negotiations; the impact of current and future governmental regulations, including environmental, health and safety regulations; the ability to attract and retain employees;
customer creditworthiness; counterparty creditworthiness; marketing plans; general economic conditions and new technology. All statements other than statements of historical facts included in this news release are forward-looking statements. Without limiting the foregoing, the words "believe," "anticipate," "plan," "expect," "seek," "estimate" and similar expressions are intended to identify forward-looking statements. Although the Partnership believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct and actual results may differ materially from those projected as a result of certain risks and uncertainties. These risks and uncertainties include, but are not limited to, those set forth under the heading "Risk Factors" and "Business Strategy" in our Annual Report on Form 10-K (the
"Form 10-K") for the fiscal year ended
(financials follow)
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| CONSOLIDATED BALANCE SHEETS | ||
| (in thousands) |
December 31, 2012 |
September 30, 2012 |
| (unaudited) | ||
| ASSETS | ||
| Current assets | ||
| Cash and cash equivalents | $ 14,316 | $ 108,091 |
|
Receivables, net of allowance of |
192,720 | 88,267 |
| Inventories | 83,148 | 47,465 |
| Fair asset value of derivative instruments | 977 | 5,004 |
| Current deferred tax assets, net | 23,308 | 25,844 |
| Prepaid expenses and other current assets | 30,888 | 26,848 |
| Total current assets | 345,357 | 301,519 |
| Property and equipment, net | 51,389 | 52,608 |
| Goodwill | 201,103 | 201,103 |
| Intangibles, net | 72,434 | 74,712 |
| Deferred charges and other assets, net | 9,111 | 9,405 |
| Total assets | $ 679,394 | $ 639,347 |
| LIABILITIES AND PARTNERS' CAPITAL | ||
| Current liabilities | ||
| Accounts payable | $ 31,462 | $ 22,583 |
| Revolving credit facility borrowings | 36,703 | -- |
| Fair liability value of derivative instruments | 4,642 | 453 |
| Accrued expenses and other current liabilities | 83,562 | 78,518 |
| Unearned service contract revenue | 50,279 | 40,799 |
| Customer credit balances | 63,373 | 85,976 |
| Total current liabilities | 270,021 | 228,329 |
| Long-term debt | 124,382 | 124,357 |
| Long-term deferred tax liabilities, net | 7,035 | 8,436 |
| Other long-term liabilities | 16,694 | 18,080 |
| Partners' capital | ||
| Common unitholders | 287,546 | 286,819 |
| General partner | 94 | 97 |
| Accumulated other comprehensive loss, net of taxes | (26,378) | (26,771) |
| Total partners' capital | 261,262 | 260,145 |
| Total liabilities and partners' capital | $ 679,394 | $ 639,347 |
(tables to follow)
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| CONSOLIDATED STATEMENTS OF OPERATIONS | ||
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Three Months Ended |
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| (in thousands, except per unit data - unaudited) | 2012 | 2011 |
| Sales: | ||
| Product | $ 454,470 | $ 406,669 |
| Installations and service | 62,055 | 54,805 |
| Total sales | 516,525 | 461,474 |
| Cost and expenses: | ||
| Cost of product | 356,613 | 316,673 |
| Cost of installations and service | 57,221 | 52,351 |
| (Increase) decrease in the fair value of derivative instruments | 7,965 | 7,118 |
| Delivery and branch expenses | 68,387 | 67,757 |
| Depreciation and amortization expenses | 4,358 | 3,629 |
| General and administrative expenses | 4,491 | 5,365 |
| Operating income | 17,490 | 8,581 |
| Interest expense | (3,427) | (3,452) |
| Interest income | 1,098 | 728 |
| Amortization of debt issuance costs | (492) | (274) |
| Income before income taxes | 14,669 | 5,583 |
| Income tax expense | 4,917 | 2,652 |
| Net income | $ 9,752 | $ 2,931 |
| General Partner's interest in net income | 53 | 15 |
| Limited Partners' interest in net income | $ 9,699 | $ 2,916 |
| Per unit data (Basic and Diluted): | ||
| Net income available to limited partners | $ 0.16 | $ 0.05 |
| Dilutive impact of theoretical distribution of earnings under FASB ASC 260-10-45-60 | 0.01 | -- |
| Limited Partner's interest in net income under FASB ASC 260-10-45-60 | $ 0.15 | $ 0.05 |
| Weighted average number of Limited Partner units outstanding (Basic and Diluted) | 60,556 | 64,189 |
| SUPPLEMENTAL INFORMATION | ||
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| RECONCILIATION OF EBITDA AND ADJUSTED EBITDA | ||
| (Unaudited) | ||
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Three Months Ended |
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| (in thousands) | 2012 | 2011 |
| Net income | $ 9,752 | $ 2,931 |
| Plus: | ||
| Income tax expense | 4,917 | 2,652 |
| Amortization of debt issuance cost | 492 | 274 |
| Interest expense, net | 2,329 | 2,724 |
| Depreciation and amortization | 4,358 | 3,629 |
| EBITDA | 21,848 | 12,210 |
| (Increase) / decrease in the fair value of derivative instruments | 7,965 | 7,118 |
| Adjusted EBITDA | 29,813 | 19,328 |
| Add / (subtract) | ||
| Income tax expense | (4,917) | (2,652) |
| Interest expense, net | (2,329) | (2,724) |
| Provision for losses on accounts receivable | 1,763 | 1,450 |
| Increase in accounts receivables | (106,395) | (79,111) |
| Increase in inventories | (35,683) | (18,883) |
| Decrease in customer credit balances | (22,603) | (5,316) |
| Change in deferred taxes | 864 | 1,154 |
| Change in other operating assets and liabilities | 18,905 | 11,989 |
| Net cash used in operating activities | $ (120,582) | $ (74,765) |
| Net cash used in investing activities | $ (832) | $ (26,898) |
| Net cash provided by financing activities | $ 27,639 | $ 28,794 |
| Home heating oil and propane gallons sold | 97,100 | 91,100 |
CONTACT:Source:Star Gas Partners Investor Relations 203/328-7310Chris Witty Darrow Associates 646/438-9385 or cwitty@darrowir.com
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