Investors News Careers GlobalCONNECT Portal About Retail Stations Wholesale & Commercial Fuel Supply Terminals Search Home / Investor Relations / Global Partners News / Global Partners Reports Third-Quarter 2021 Financial Results Global Partners Reports Third-Quarter 2021 Financial Results November 5, 2021 Posted in Investor Relations News Home WALTHAM, Mass.–(BUSINESS WIRE)– Global Partners LP (NYSE: GLP) today reported financial results for the third quarter ended September 30, 2021. “Margin growth in all three segments highlighted a solid third quarter that demonstrated the resilience of our integrated business model, from our terminal network to our retail portfolio,” said Eric Slifka, the Partnership’s President and CEO. “With COVID-19 restrictions eased, we continued to see improved demand across our portfolio. “GDSO (Gasoline Distribution and Station Operations) margins and volume posted double-digit percentage growth in the quarter, despite a significant increase in wholesale fuel prices year-over-year,” Slifka continued. “In addition, we benefited from favorable market conditions in gasoline and distillates in our Wholesale segment and increased volume and improved margins in our Commercial segment. “Our Q3 performance underscores our role as a critical infrastructure company. Every day, we provide the essential products and services people need to fuel their vehicles, heat their homes, run their businesses, and add convenience to their lives,” Slifka said. “Like other businesses, we encountered spot supply chain disruptions and labor shortages. We were able to mitigate these issues where possible, minimizing impacts, and our third-quarter results were strong.” Financial Highlights Net income attributable to the Partnership was $33.6 million, or $0.86 per diluted common limited partner unit, for the third quarter of 2021 compared with $18.2 million, or $0.47 per diluted common limited partner unit, for the same period in 2020. Earnings before interest, taxes, depreciation and amortization (EBITDA) was $79.4 million for the third quarter of 2021 compared with $65.0 million for the year-earlier period. Adjusted EBITDA for the three months ended September 30, 2021 was $79.2 million compared with $65.9 million for the third quarter of 2020. Distributable cash flow (DCF) totaled $49.7 million for the third quarter of 2021 compared with $31.3 million for the 2020 period. Gross profit in the third quarter of 2021 increased to $203.1 million from $169.2 million a year earlier, primarily reflecting higher product margins in the GDSO segment and more favorable market conditions in the Wholesale segment, primarily in gasoline and gasoline blendstocks and other oils and related products. Combined product margin, which is gross profit adjusted for depreciation allocated to cost of sales, was $223.9 million in the third quarter of 2021 compared with $189.3 million in the third quarter of 2020. Combined product margin, EBITDA, Adjusted EBITDA, and DCF are non-GAAP (Generally Accepted Accounting Principles) financial measures, which are explained in greater detail below under “Use of Non-GAAP Financial Measures.” Please refer to Financial Reconciliations included in this news release for reconciliations of these non-GAAP financial measures to their most directly comparable GAAP financial measures for the three and nine months ended September 30, 2021 and 2020. GDSO segment product margin was $177.7 million in the third quarter of 2021 compared with $158.9 million in the third quarter of 2020, primarily reflecting an increase in fuel volume and increases in activity at the Partnership’s convenience stores. Wholesale segment product margin was $42.3 million in the third quarter of 2021 compared with $28.9 million in the third quarter of 2020, primarily reflecting more favorable market conditions in gasoline and distillates in the 2021 period. Commercial segment product margin was $3.9 million compared with $1.5 million in the third quarter of 2020, primarily driven by an increase in volume sold and improved margins. Sales were $3.3 billion in the third quarter of 2021 compared with $2.0 billion in the same period of 2020, primarily due to an increase in prices. Wholesale segment sales increased to $1.8 billion in the third quarter of 2021 from $1.2 billion in the year-earlier period. GDSO segment sales were $1.3 billion in the third quarter of 2021 versus $0.8 billion in the third quarter of 2020. Commercial segment sales were $202.5 million in the third quarter of 2021 compared with $83.5 million in the third quarter of 2020. Volume in the third quarter of 2021 was 1.3 billion gallons compared with 1.4 billion gallons in the same period of 2020. Wholesale segment volume was 813.4 million gallons in the third quarter of 2021 and 916.7 million gallons in the third quarter of 2020. GDSO volume was 416.8 million gallons in the third quarter of 2021 compared with 376.3 million gallons in the third quarter of 2020. Commercial segment volume was 101.2 million gallons in the third quarter of 2021 compared with 60.9 million gallons in the year-earlier period. Recent Highlights During the third quarter, the Partnership acquired 14 convenience stores and Citgo-branded gasoline stations, predominantly in Vermont. In October, Global announced a quarterly cash distribution of $0.5750 per unit, or $2.30 per unit on an annualized basis, on all of its outstanding common units for the period from July 1 to September 30, 2021. The distribution will be paid November 12, 2021 to unitholders of record as of the close of business on November 8, 2021. Business Outlook “Looking ahead, we are well-positioned both financially and operationally as we prepare to close out 2021,” Slifka said. “While we remain mindful about the uncertainty of COVID-19, we are encouraged by the improved demand environment in our business. With global supply shortages and a sharp rise in prices creating challenges for natural gas heading into the winter months, our industry will have the opportunity to reinforce the benefits of liquid fuels as a reliable and cost-effective source of energy.” The extent to which the COVID-19 pandemic may affect our operating results remains uncertain. The COVID-19 pandemic has had, and may continue to have, material adverse consequences for general economic, financial and business conditions, and could materially and adversely affect our business, financial condition and results of operations and those of our customers, suppliers and other counterparties. Conference Call and Webcast Global Partners’ third-quarter 2021 earnings conference call is scheduled to begin at 10:00 a.m. ET today. The dial-in numbers are (877) 709-8155 (U.S. and Canada) or (201) 689-8881 (International). Please plan to dial in to the call at least 15 minutes prior to the start time. The webcast can be accessed via a link at https://ir.globalp.com. About Global Partners LP With approximately 1,600 locations primarily in the Northeast, Global Partners is one of the region’s largest independent owners, suppliers and operators of gasoline stations and convenience stores. Global also owns, controls or has access to one of the largest terminal networks in New England and New York, through which it distributes gasoline, distillates, residual oil and renewable fuels to wholesalers, retailers and commercial customers. In addition, Global engages in the transportation of petroleum products and renewable fuels by rail from the mid-continental U.S. and Canada. Global, a master limited partnership, trades on the New York Stock Exchange under the ticker symbol “GLP.” For additional information, visit www.globalp.com. Use of Non-GAAP Financial Measures Product Margin Global Partners views product margin as an important performance measure of the core profitability of its operations. The Partnership reviews product margin monthly for consistency and trend analysis. Global Partners defines product margin as product sales minus product costs. Product sales primarily include sales of unbranded and branded gasoline, distillates, residual oil, renewable fuels, crude oil and propane, as well as convenience store sales, gasoline station rental income and revenue generated from logistics activities when the Partnership engages in the storage, transloading and shipment of products owned by others. Product costs include the cost of acquiring products and all associated costs including shipping and handling costs to bring such products to the point of sale as well as product costs related to convenience store items and costs associated with logistics activities. The Partnership also looks at product margin on a per unit basis (product margin divided by volume). Product margin is a non-GAAP financial measure used by management and external users of the Partnership’s consolidated financial statements to assess its business. Product margin should not be considered an alternative to net income, operating income, cash flow from operations, or any other measure of financial performance presented in accordance with GAAP. In addition, product margin may not be comparable to product margin or a similarly titled measure of other companies. EBITDA and Adjusted EBITDA EBITDA and Adjusted EBITDA are non-GAAP financial measures used as supplemental financial measures by management and may be used by external users of Global Partners’ consolidated financial statements, such as investors, commercial banks and research analysts, to assess the Partnership’s: compliance with certain financial covenants included in its debt agreements; financial performance without regard to financing methods, capital structure, income taxes or historical cost basis; ability to generate cash sufficient to pay interest on its indebtedness and to make distributions to its partners; operating performance and return on invested capital as compared to those of other companies in the wholesale, marketing, storing and distribution of refined petroleum products, gasoline blendstocks, renewable fuels, crude oil and propane, and in the gasoline stations and convenience stores business, without regard to financing methods and capital structure; and viability of acquisitions and capital expenditure projects and the overall rates of return of alternative investment opportunities. Adjusted EBITDA is EBITDA further adjusted for gains or losses on the sale and disposition of assets and goodwill and long-lived asset impairment charges. EBITDA and Adjusted EBITDA should not be considered as alternatives to net income, operating income, cash flow from operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP. EBITDA and Adjusted EBITDA exclude some, but not all, items that affect net income, and these measures may vary among other companies. Therefore, EBITDA and Adjusted EBITDA may not be comparable to similarly titled measures of other companies. Distributable Cash Flow Distributable cash flow is an important non-GAAP financial measure for the Partnership’s limited partners since it serves as an indicator of success in providing a cash return on their investment. Distributable cash flow as defined by the Partnership’s partnership agreement is net income plus depreciation and amortization minus maintenance capital expenditures, as well as adjustments to eliminate items approved by the audit committee of the board of directors of the Partnership’s general partner that are extraordinary or non-recurring in nature and that would otherwise increase distributable cash flow. Distributable cash flow as used in our partnership agreement also determines our ability to make cash distributions on our incentive distribution rights. The investment community also uses a distributable cash flow metric similar to the metric used in our partnership agreement with respect to publicly traded partnerships to indicate whether or not such partnerships have generated sufficient earnings on a current or historic level that can sustain distributions on preferred or common units or support an increase in quarterly cash distributions on common units. Our partnership agreement does not permit adjustments for certain non-cash items, such as net losses on the sale and disposition of assets and goodwill and long-lived asset impairment charges. Distributable cash flow should not be considered as an alternative to net income, operating income, cash flow from operations, or any other measure of financial performance presented in accordance with GAAP. In addition, distributable cash flow may not be comparable to distributable cash flow or similarly titled measures of other companies. Forward-looking Statements Certain statements and information in this press release may constitute “forward-looking statements.” The words “believe,” “expect,” “anticipate,” “plan,” “intend,” “foresee,” “should,” “would,” “could” or other similar expressions are intended to identify forward-looking statements, which are generally not historical in nature, although not all forward-looking statements contain such identifying words. These forward-looking statements are based on Global’s current expectations and beliefs concerning future developments and their potential effect on the Partnership. While management believes that these forward-looking statements are reasonable as and when made, there can be no assurance that future developments affecting the Partnership will be those that it anticipates. Forward-looking statements involve significant risks and uncertainties (some of which are beyond the Partnership’s control) including, without limitation, the impact and duration of the COVID-19 pandemic, uncertainty around the timing of an economic recovery in the United States which will impact the demand for the products we sell and the services that we provide, uncertainty around the impact of the COVID-19 pandemic to our counterparties and our customers and their corresponding ability to perform their obligations and/or utilize the products we sell and/or services we provide, uncertainty around the impact and duration of federal, state and municipal regulations related to the COVID-19 pandemic, and assumptions that could cause actual results to differ materially from the Partnership’s historical experience and present expectations or projections. For additional information regarding known material factors that could cause actual results to differ from the Partnership’s projected results, please see Global’s filings with the SEC, including its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof. Global undertakes no obligation to publicly update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise. GLOBAL PARTNERS LP CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per unit data) (Unaudited) Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Sales $ 3,323,910 $ 2,061,382 $ 9,156,382 $ 6,126,052 Cost of sales 3,120,852 1,892,141 8,630,247 5,571,126 Gross profit 203,058 169,241 526,135 554,926 Costs and operating expenses: Selling, general and administrative expenses 54,674 43,218 155,029 143,158 Operating expenses 92,151 82,235 260,848 241,502 Amortization expense 2,742 2,712 8,138 8,137 Net (gain) loss on sale and disposition of assets (192 ) 691 (675 ) 623 Long-lived asset impairment – 203 188 1,927 Total costs and operating expenses 149,375 129,059 423,528 395,347 Operating income 53,683 40,182 102,607 159,579 Interest expense (19,660 ) (19,854 ) (60,339 ) (62,544 ) Income before income tax (expense) benefit 34,023 20,328 42,268 97,035 Income tax (expense) benefit (386 ) (2,136 ) (789 ) 205 Net income 33,637 18,192 41,479 97,240 Net loss attributable to noncontrolling interest – 38 – 528 Net income attributable to Global Partners LP 33,637 18,230 41,479 97,768 Less: General partner’s interest in net income, including incentive distribution rights 993 324 2,581 857 Less: Preferred limited partner interest in net income 3,463 1,682 8,746 5,046 Net income attributable to common limited partners $ 29,181 $ 16,224 $ 30,152 $ 91,865 Basic net income per common limited partner unit (1) $ 0.86 $ 0.48 $ 0.89 $ 2.71 Diluted net income per common limited partner unit (1) $ 0.86 $ 0.47 $ 0.88 $ 2.68 Basic weighted average common limited partner units outstanding 33,897 33,924 33,934 33,887 Diluted weighted average common limited partner units outstanding 34,087 34,209 34,225 34,241 (1) Under the Partnership’s partnership agreement, for any quarterly period, the incentive distribution rights (“IDRs”) participate in net income only to the extent of the amount of cash distributions actually declared, thereby excluding the IDRs from participating in the Partnership’s undistributed net income or losses. Accordingly, the Partnership’s undistributed net income or losses is assumed to be allocated to the common unitholders and to the General Partner’s general partner interest. Net income attributable to common limited partners is divided by the weighted average common units outstanding in computing the net income per limited partner unit. GLOBAL PARTNERS LP CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited) September 30, 2021 December 31, 2020 Assets Current assets: Cash and cash equivalents $ 15,365 $ 9,714 Accounts receivable, net 360,928 227,317 Accounts receivable – affiliates 2,391 2,410 Inventories 413,387 384,432 Brokerage margin deposits 35,317 21,661 Derivative assets 12,692 16,556 Prepaid expenses and other current assets 84,071 119,340 Total current assets 924,151 781,430 Property and equipment, net 1,089,386 1,082,486 Right of use assets, net 274,236 290,506 Intangible assets, net 28,587 35,925 Goodwill 328,569 323,565 Other assets 32,062 26,588 Total assets $ 2,676,991 $ 2,540,500 Liabilities and partners’ equity Current liabilities: Accounts payable $ 314,949 $ 207,873 Working capital revolving credit facility – current portion 102,900 34,400 Lease liability – current portion 62,344 75,376 Environmental liabilities – current portion 4,455 4,455 Trustee taxes payable 39,855 36,598 Accrued expenses and other current liabilities 114,751 126,774 Derivative liabilities 40,288 12,055 Total current liabilities 679,542 497,531 Working capital revolving credit facility – less current portion 150,000 150,000 Revolving credit facility 43,400 122,000 Senior notes 738,884 737,605 Long-term lease liability – less current portion 222,615 226,648 Environmental liabilities – less current portion 49,055 49,166 Financing obligations 145,037 146,535 Deferred tax liabilities 56,377 56,218 Other long-term liabilities 58,035 59,298 Total liabilities 2,142,945 2,045,001 Partners’ equity 534,046 495,499 Total liabilities and partners’ equity $ 2,676,991 $ 2,540,500 GLOBAL PARTNERS LP FINANCIAL RECONCILIATIONS (In thousands) (Unaudited) Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Reconciliation of gross profit to product margin Wholesale segment: (1) Gasoline and gasoline blendstocks $ 22,458 $ 17,136 $ 62,379 $ 84,966 Crude oil (2,814 ) (2,729 ) (10,662 ) 2,004 Other oils and related products 22,625 14,523 54,580 59,414 Total 42,269 28,930 106,297 146,384 Gasoline Distribution and Station Operations segment: Gasoline distribution 112,446 101,405 294,001 305,405 Station operations 65,269 57,462 176,567 154,904 Total 177,715 158,867 470,568 460,309 Commercial segment (1) 3,916 1,545 10,807 9,398 Combined product margin 223,900 189,342 587,672 616,091 Depreciation allocated to cost of sales (20,842 ) (20,101 ) (61,537 ) (61,165 ) Gross profit $ 203,058 $ 169,241 $ 526,135 $ 554,926 Reconciliation of net income to EBITDA and Adjusted EBITDA Net income $ 33,637 $ 18,192 $ 41,479 $ 97,240 Net loss attributable to noncontrolling interest – 38 – 528 Net income attributable to Global Partners LP 33,637 18,230 41,479 97,768 Depreciation and amortization 25,692 24,745 76,172 75,192 Interest expense 19,660 19,854 60,339 62,544 Income tax expense (benefit) 386 2,136 789 (205 ) EBITDA (2) 79,375 64,965 178,779 235,299 Net (gain) loss on sale and disposition of assets (192 ) 691 (675 ) 623 Long-lived asset impairment – 203 188 1,927 Adjusted EBITDA (2) $ 79,183 $ 65,859 $ 178,292 $ 237,849 Reconciliation of net cash provided by operating activities to EBITDA and Adjusted EBITDA Net cash provided by operating activities $ 152,615 $ 88,286 $ 99,057 $ 250,289 Net changes in operating assets and liabilities and certain non-cash items (93,286 ) (45,321 ) 18,594 (77,621 ) Net cash from operating activities and changes in operating assets and liabilities attributable to noncontrolling interest – 10 – 292 Interest expense 19,660 19,854 60,339 62,544 Income tax expense (benefit) 386 2,136 789 (205 ) EBITDA (2) 79,375 64,965 178,779 235,299 Net (gain) loss on sale and disposition of assets (192 ) 691 (675 ) 623 Long-lived asset impairment – 203 188 1,927 Adjusted EBITDA (2) $ 79,183 $ 65,859 $ 178,292 $ 237,849 Reconciliation of net income to distributable cash flow Net income $ 33,637 $ 18,192 $ 41,479 $ 97,240 Net loss attributable to noncontrolling interest – 38 – 528 Net income attributable to Global Partners LP 33,637 18,230 41,479 97,768 Depreciation and amortization 25,692 24,745 76,172 75,192 Amortization of deferred financing fees 1,211 1,329 3,810 3,896 Amortization of routine bank refinancing fees (1,002 ) (1,008 ) (3,052 ) (2,933 ) Maintenance capital expenditures (9,841 ) (11,963 ) (28,135 ) (24,789 ) Distributable cash flow (2)(3)(4) 49,697 31,333 90,274 149,134 Distributions to preferred unitholders (5) (3,463 ) (1,682 ) (8,746 ) (5,046 ) Distributable cash flow after distributions to preferred unitholders $ 46,234 $ 29,651 $ 81,528 $ 144,088 Reconciliation of net cash provided by operating activities to distributable cash flow Net cash provided by operating activities $ 152,615 $ 88,286 $ 99,057 $ 250,289 Net changes in operating assets and liabilities and certain non-cash items (93,286 ) (45,321 ) 18,594 (77,621 ) Net cash from operating activities and changes in operating assets and liabilities attributable to noncontrolling interest – 10 – 292 Amortization of deferred financing fees 1,211 1,329 3,810 3,896 Amortization of routine bank refinancing fees (1,002 ) (1,008 ) (3,052 ) (2,933 ) Maintenance capital expenditures (9,841 ) (11,963 ) (28,135 ) (24,789 ) Distributable cash flow (2)(3)(4) 49,697 31,333 90,274 149,134 Distributions to preferred unitholders (5) (3,463 ) (1,682 ) (8,746 ) (5,046 ) Distributable cash flow after distributions to preferred unitholders $ 46,234 $ 29,651 $ 81,528 $ 144,088 (1) Segment reporting results for the three and nine months ended September 30, 2020 have been reclassified between the Wholesale and Commercial segments to conform to the Partnership’s current presentation. (2) EBITDA, Adjusted EBITDA and distributable cash flow for each of the three and nine months ended September 30, 2021 include a $3.1 million expense for compensation resulting from the retirement of the Partnership’s former chief financial officer in August of 2021. EBITDA, Adjusted EBITDA and distributable cash flow for the nine months ended September 30, 2021 include a $6.6 million expense for compensation and benefits resulting from the passing of the Partnership’s general counsel in May of 2021. This expense relates to contractual commitments including the acceleration of grants previously awarded as well as a discretionary award in recognition of service. (3) As defined by the Partnership’s partnership agreement, distributable cash flow is not adjusted for certain non-cash items, such as net losses on the sale and disposition of assets and goodwill and long-lived asset impairment charges. (4) Distributable cash flow for the nine months ended September 30, 2020 includes a $6.3 million income tax benefit related to the CARES Act net operating loss carryback provisions. (5) Distributions to preferred unitholders represent the distributions payable to the Series A preferred unitholders and the Series B preferred unitholders earned during the period. Distributions on the Series A preferred units and the Series B preferred units are cumulative and payable quarterly in arrears on February 15, May 15, August 15 and November 15 of each year. View source version on businesswire.com: https://www.businesswire.com/news/home/20211105005169/en/ Gregory B. Hanson Chief Financial Officer Global Partners LP (781) 894-8800 Sean T. Geary Acting General Counsel, Secretary and Vice President – Mergers & Acquisitions Global Partners LP (781) 894-8800 Source: Global Partners LP Global Communications For General Public Relations: Catie Kerns, VP External Communications ckerns@globalp.com For Investor Relations: Scott Solomon, SVP, Sharon Merrill Associates, Inc. glp@investorrelations.com Contact Global Partners Communications Categories Community Giving Investor Relations Terminals & Products Retail Stations Archives Archives Select Month November 2021 October 2021 August 2021 January 2021 July 2020 June 2020 May 2020 April 2020 March 2020 December 2019 November 2019 September 2019 August 2019 With an extensive network of terminals, gas stations, and retail stations, Global Partners helps people heat their homes, operate their businesses, and get where they’re going conveniently and quickly. Centered in the Northeast, the company is a third-generation, family-founded business with operations throughout the U.S. About Retail Stations Wholesale & Commercial Fuel Supply Terminals GlobalCONNECT Portal Investors » News Careers Privacy Policy Terms of Use Sitemap Global Companies LLC, Global Montello Group Corp., and Alliance Energy LLC are subsidiaries of Global Partners LP 800 South Street, Suite 500, P.O. Box 9161, Waltham, MA 02454-9161 | 781-894-8800 © 2020 Global Partners LP, All rights reserved.