Lehigh Gas Partners LP: Lehigh Gas Partners LP Reports First Quarter 2013 Results and Announces a 3.4% Increase in its Quarterly Cash Distribution
(Thomson Reuters ONE) -
Lehigh Gas Partners LP Reports First Quarter 2013 Results and Announces a 3.4%
Increase in its Quarterly Cash Distribution
ALLENTOWN, PA (May 13, 2013) -Lehigh Gas Partners LP (NYSE: LGP) (the
"Partnership," "we," or "us") today reported its financial results for the
quarter ended March 31, 2013 and announced that the Board of Directors of its
general partner approved a 3.4% increase in the Partnership's cash distribution
per unit from the current annual rate of $1.75 per unit ($0.4375 per quarter) to
$1.81 per unit ($0.4525 per quarter). In addition to the actual financial
results for the quarter, the Partnership is providing certain pro forma results
for the period ended March 31, 2012. The Partnership completed its initial
public offering on October 30, 2012 and, as such, management believes the pro
forma results for March 31, 2012 provide investors with a more relevant
comparison than the actual results of our predecessor for the period ended March
31, 2012. Please see the section entitled "Pro Forma Financial Results" for
additional information on our pro forma financial results.
In the First Quarter of 2013, the Partnership:
* Distributed 149.7 million gallons of fuel compared to pro forma first
quarter 2012 volume of 132.8 million gallons of fuel, a 12.7% increase.
* Generated gross profit from fuel sales of $10.3 million compared to pro
forma first quarter 2012 gross profit from fuel sales of $7.2 million, a
41.7% increase.
* Generated Adjusted EBITDA of $12.6 million compared to pro forma first
quarter 2012 Adjusted EBITDA of $8.2 million, a 53.4% increase.
* Declared a first quarter distribution of $0.4525 per unit, a 3.4% increase
over the current quarterly distribution $0.4375 per unit, the Minimum
Quarterly Distribution.
First Quarter 2013 Results
Net Income for the first quarter 2013 totaled $3.8 million or $0.25 per common
unit. For the quarter, EBITDA totaled $12.4 million, Adjusted EBITDA totaled
$12.6 million and Distributable Cash Flow amounted to $9.3 million or $0.62 per
common unit. Please refer to the section included herein under the heading
"Non-GAAP Financial Measures of "EBITDA", "Adjusted EBITDA" and "Distributable
Cash Flow" for a discussion of our use of non-GAAP adjusted financial
information.
"We are gratified by the continued strong performance of the Partnership in its
first full quarter as a public partnership," said Chairman and CEO Joe Topper.
"I am also extremely pleased to announce our $0.015 per unit quarterly
distribution increase. We are committed to growing our distributable cash flow
and cash distributions and today's announced financial results and distribution
increase are a sign of the strength of that commitment," Topper added.
Total revenue amounted to $471.4 million for the quarter ended March 31, 2013,
including $461.2 million of aggregate revenues from fuel sales, which includes
revenues from fuel sales to affiliates, and $10.3 million of aggregate rent
income, which includes rent income from affiliates. The aggregate gross profit
from fuel sales amounted to $10.3 million for the quarter. During the quarter,
we distributed 149.7 million gallons of fuel resulting in a $3.081 average
selling price per gallon and a $0.069 average margin per gallon. For the quarter
ended March 31, 2012, on a pro forma basis, the Partnership distributed 132.8
million gallons of fuel at an average selling price of $3.017 per gallon and an
average margin of $0.055 per gallon, resulting in a gross profit of $7.2
million. The increase in gross profit from fuel sales for the first quarter
2013 relative to 2012 was due to the higher average fuel margin and higher
overall fuel volume for the first quarter 2013 relative to 2012. The increase
in fuel volume was due to the sites associated with Getty leases signed
subsequent to the first quarter of 2012 and the Express Lane acquisition
completed in the fourth quarter of 2012, offset by volume declines associated
with certain dealer supply agreements that did not renew and marketplace
declines in volume at certain sites. On a pro forma basis in the first quarter
2012, the Partnership recorded $5.5 million in rental income. The increase in
rent income in the first quarter 2013 relative to 2012 is due to the increased
rent associated with the Getty leases and the Express Lane and Dunmore
acquisitions.
Total expenses amounted to $464.4 million for the quarter ended March 31, 2013,
including rent expense of $3.9 million, operating expenses of $0.8 million,
depreciation and amortization of $4.8 million, and selling, general and
administrative expenses of $3.9 million. For quarter ended March 31, 2012, pro
forma total expenses amounted to $402.1 million, including rent expense of $2.0,
operating expenses of $0.7 million, depreciation and amortization of $4.5
million and selling, general and administrative expenses of $2.5 million. The
increase in rent expense in the first quarter 2013 relative to 2012 is due to
the increase in leasehold sites, primarily as the result of the Getty leases
and, to a lesser extent, the Dunmore and Express Lane acquisitions. The
increase in selling, general and administrative expenses in the first quarter
2013 relative to 2012 is primarily due to increased professional fees, taxes and
public company expenses.
Leasing, Acquisition and Financing Activity
As previously announced, the Partnership leased 19 sites in the Cleveland market
to 7-Eleven, Inc. during the quarter. 7-Eleven will rebrand the locations as
"7-Eleven" and manage the convenience store operations. The Partnership will
continue to supply fuel to the sites under a separate contract with its
affiliate, Lehigh Gas-Ohio, LLC.
Credit Facility Expansion and Amendment
The Partnership announced today that it increased the size of its credit
facility by $75 million to $324 million. In addition to the increase in the
facility size, the facility was also amended to modify certain terms of the
agreement to allow for greater leverage and flexibility in regards to
acquisitions. A more detailed description of the credit facility amendment may
be found in the Form 8-K filed today with the Securities and Exchange
Commission. As of March 31, 2013, the Partnership had $183.8 million of
outstanding borrowings and $50.7 million available for borrowing, net of
outstanding borrowings and letters of credit, under the Partnership's credit
facility and before giving effect to the increase in the facility size described
above.
Distributions to Unitholders
The Partnership announced today that the Board of Directors of its general
partner approved a 3.4% increase in the Partnership's cash distribution per unit
from the current annual rate of $1.75 per unit ($0.4375 per quarter) to $1.81
per unit ($0.4525 per quarter). The increased distribution represents an annual
distribution rate of 7.6% based on the Partnership's common unit closing price
on May 10, 2013 of $23.76. The new quarterly distribution rate of $0.4525 per
unit commences with the payment of the first quarter cash distribution, payable
on June 3, 2013 to all unitholders of record as of May 23, 2013. In reviewing
its distribution policy, the Board determined that it will continue to evaluate
the Partnership's distribution each quarter. It is the intent of the
Partnership going forward to declare its quarterly cash distribution
concurrently with its earnings release.
First Quarter Earnings Call
The management team of the Partnership will hold a conference call on Tuesday,
May 14, 2013 at 9:30 AM EDT to discuss the fourth quarter results. The dial-in
information for the call is
Live Dial-in Information:
Primary Dial-in #: 866-825-1709
Secondary Dial-in#: 617-213-8060
Participant Passcode: 75408397
Preregistration: No
Replay Dial-in Information:
Available From: 5/14/2013 11:30 AM ET
Available To: 5/28/2013 11:59 PM ET
Primary Dial-in #: 888-286-8010
Secondary Dial-in #: 617-801-6888
Participant Passcode: 81027368
About Lehigh Gas Partners LP
Allentown, PA based Lehigh Gas Partners LP is a publicly-traded partnership
engaged in the wholesale distribution of motor fuels, consisting of gasoline and
diesel fuel, and is the owner and lessee of real estate used in the retail
distribution of motor fuels. Lehigh Gas Partners owns and leases sites located
in Pennsylvania, New Jersey, Ohio, New York, Massachusetts, Kentucky, New
Hampshire, Florida and Maine. Since Lehigh Gas Corp (our predecessor) was
founded in 1992, our business has generated revenues from the wholesale
distribution of motor fuels to gas stations and from real estate leases.
Investor Contact:
Karen Yeakel
Vice President, Investor Relations
Lehigh Gas Partners
610-625-8126
kyeakel(at)lehighgas.com
Forward Looking and Cautionary Statements
This press release and oral statements made regarding the subjects of this
release may contain forward-looking statements, within the meaning of the
Private Securities Litigation Reform Act of 1995, or the Reform Act, which may
include, but are not limited to, statements regarding our plans, objectives,
expectations and intentions and other statements that are not historical facts,
including statements identified by words such as "outlook," "intends," "plans,"
"estimates," "believes," "expects," "potential," "continues," "may," "will,"
"should," "seeks," "approximately," "predicts," "anticipates," "foresees," or
the negative version of these words or other comparable expressions. All
statements addressing operating performance, events, or developments that the
Partnership expects or anticipates will occur in the future, including
statements relating to revenue growth and earnings or earnings per unit growth,
as well as statements expressing optimism or pessimism about future operating
results, are forward-looking statements within the meaning of the Reform Act.
The forward-looking statements are based upon our current views and assumptions
regarding future events and operating performance and are inherently subject to
significant business, economic and competitive uncertainties and contingencies
and changes in circumstances, many of which are beyond our control. The
statements in this press release are made as of the date of this press release,
even if subsequently made available by us on our website or otherwise. We do
not undertake any obligation to update or revise these statements to reflect
events or circumstances occurring after the date of this press release.
Although the Partnership does not make forward-looking statements unless it
believes it has a reasonable basis for doing so, the Partnership cannot
guarantee their accuracy. Achieving the results described in these statements
involves a number of risks, uncertainties and other factors that could cause
actual results to differ materially, including the factors discussed in this
report and those described in the "Risk Factors" section of the Partnership's
Form 10-K filed on March 28, 2013 with the Securities and Exchange Commission as
well as in the Partnership's other filings with the Securities and Exchange
Commission. No undue reliance should be placed on any forward-looking
statements.
Lehigh Gas Partners LP
Combined and Pro Forma Statements of Operations
($ in thousands, except per unit amounts)
Lehigh Gas
Partners LP
Lehigh Gas Partners Pro Forma
LP Statement of Statement of
Operations For the Operations
3 month period For the 3 month
ending period ending
March 31, 2013 March 31, 2012
(unaudited) (unaudited)
---------------------------------------------------------------
Revenues:
Revenues from fuel 218,304 270,826
sales
Revenues from fuel 242,865 129,806
sales to affiliates
Rent income 3,352 2,723
Rent income from 6,917 2,785
affiliates
Revenues from retail - 3
merchandise and other
----------------------------------------
Total revenues 471,438 406,143
Costs and expenses:
Cost of revenues from 214,204 266,183
fuel sales
Cost of revenues from 236,699 127,204
fuel sales to
affiliates
Rent expense 3,884 2,048
Operating expenses 810 747
Depreciation and 4,839 4,536
amortization
Selling, general and 3,917 2,468
administrative
expenses
(Gain) on sales of - (1,081)
assets
----------------------------------------
Total costs and 464,353 402,105
operating expenses
Operating income 7,085 4,038
Interest expense, net (3,389) (2,273)
Other income, net 504 718
----------------------------------------
Income from continuing 4,200 2,483
operations before
income taxes
Income tax expense (443) (75)
from continuing
operations
----------------------------------------
Income from continuing 3,757 2,408
operations after
income taxes
Income (loss) from - 140
discontinued
operations
----------------------------------------
Net income (loss) 3,757 2,548
----------------------------------------
Net income allocated 1,879
to common units
Net income allocated 1,878
to subordinated units
Net income per common 0.250
unit - basic and
diluted
Net income per 0.250
subordinated unit -
basic and diluted
Weighted average
limited partners'
units outstanding -
basic and diluted:
Common units 7,525,858
Subordinated units 7,525,000
Pro Forma Supplemental Operating Metrics - ($ in thousands, except per gallon
amounts)
Lehigh Gas Lehigh Gas
Partners LP Partners LP
Pro Forma Pro Forma
Three Month Three Month
Period Ending Period Ending
March 31, 2013 March 31, 2012
(unaudited) (unaudited)
Revenues from fuel 218,304 270,826
sales
Revenues from fuel 242,865 129,806
sales to
affiliates
Revenues from fuel 461,169 400,632
sales - aggregate
Cost of revenues 214,204 266,183
from fuel sales
Cost of revenues 236,699 127,204
from fuel sales to
affiliates
Cost of revenues 450,903 393,387
from fuel sales -
aggregate
Gross profit from 10,266 7,245
fuel sales -
aggregate
Volume of gallons 149.7 132.8
distributed (in
millions)
Selling price per 3.081 3.017
gallon
Margin per gallon 0.069 0.055
Capital 83 687
Expenditures -
Maintenance
Capital 160 500
Expenditures -
Expansion
Site Count
As of March 31, 2013, we distributed motor fuels to 779 sites in the following
classes of business:
· 223 sites operated by Independent Dealers;
· 324 sites owned or leased by us and operated by LGO;
· 187 sites owned or leased by us and operated by Lessee Dealers; and
· 45 sites distributed through eight Sub-Wholesalers
Lehigh Gas Partners LP
Condensed Consolidated Balance Sheet
($ in thousands)
(unaudited)
March 31, 2013 December 31, 2012
------------------------------------
Assets
Current assets:
Cash and cash equivalents 8 4,768
Accounts receivable, net 2,536 3,700
Accounts receivable from affiliates 21,353 8,112
Other current assets 5,016 4,353
------------------------------------
Total current assets 28,913 20,933
Property and equipment, net 238,947 243,022
Intangible assets, net 34,354 35,602
Deferred financing fees, net and 11,680 10,617
other assets
Goodwill 5,636 5,636
------------------------------------
Total assets 319,530 315,810
------------------------------------
Liabilities and partners' capital
Current liabilities:
Lease financing obligations, current 2,462 2,187
portion
Accounts payable 16,469 14,238
Motor fuel taxes payable 9,513 9,455
Income taxes payable 438 342
Accrued expenses and other current 5,303 3,890
liabilities
------------------------------------
Total current liabilities 34,185 30,112
Long-term debt 183,751 183,751
Lease financing obligations 73,147 73,793
Other long-term liabilities 14,561 13,609
------------------------------------
Total liabilities 305,644 301,265
Partners' capital 13,886 14,545
------------------------------------
Total liabilities and partners' 319,530 315,810
capital
------------------------------------
Non-GAAP Financial Measures of "EBITDA," "Adjusted EBITDA" and "Distributable
Cash Flow"
(Presented on an Actual and / or Pro Forma Basis)
We use the non-GAAP financial measures (computed on an actual and pro forma
basis) of "EBITDA", "Adjusted EBITDA" and "Distributable Cash Flow", in this
press release. EBITDA represents net income before deducting interest expense,
income taxes, and depreciation and amortization. Adjusted EBITDA represents
EBITDA as further adjusted to exclude the gain or loss on sales of assets and
certain non-cash items as deemed appropriate by management. Distributable Cash
Flow represents Adjusted EBITDA less cash interest expense, maintenance capital
expenditures, and income tax expense. EBITDA, Adjusted EBITDA, and Distributable
Cash Flow are used as supplemental financial measures by management and by
external users of our financial statements, such as investors and lenders, to
assess:
- our financial performance and /or liquidity measures without regard to
financing methods, capital structure or income taxes;
- our ability to generate cash sufficient to make distributions to our
unitholders; and,
- our ability to incur and service debt and to fund pro forma capital
expenditures.
In addition, Adjusted EBITDA is used as a supplemental financial measure by
management and these external users of our financial statements to assess the
operating performance of our business on a consistent basis by excluding the
impact of sales of our assets and certain non-cash items as deemed appropriate
by management which do not result directly from our wholesale distribution of
motor fuel and /or our leasing of real property.
EBITDA, Adjusted EBITDA, and Distributable Cash Flow should not be considered
alternatives to net income, net cash provided by operating activities, or any
other measure of financial performance presented in accordance with GAAP.
EBITDA, Adjusted EBITDA, and Distributable Cash Flow exclude some, but not all,
items affecting net income and these measures may vary among other companies.
Further, EBITDA, Adjusted EBITDA, and Distributable Cash Flow as presented below
may not be comparable to similarly titled measures of other companies.
The following tables present reconciliations of both actual and pro forma
EBITDA, actual and pro forma Adjusted EBITDA, and actual and pro forma
Distributable Cash Flow to actual and pro forma net income, respectively, from
continuing operations for each of the periods indicated.
Reconciliation of Net Income from Continuing Operations after Income Taxes
to EBITDA and Adjusted EBITDA
($ in thousands)
Actual Pro Forma
Three Months Three Months
Ended Ended
March 31, 2013 March 31, 2012
(unaudited) (unaudited)
--------------------------------
Income from continuing operations after 2,408
income taxes 3,757
Income from discontinued operations - 140
--------------------------------
Net Income 3,757 2,548
Plus:
Depreciation and amortization 4,839 4,536
Income tax expense 443 75
Interest expense, net 3,389 2,273
--------------------------------
EBITDA 12,428 9,432
Plus: Non-cash equity compensation 196 -
Less: Gains on sales of assets - (1,204)
--------------------------------
Adjusted EBITDA 12,624 8,228
--------------------------------
Computation of Distributable Cash Flow ($ in thousands)
Actual
Three Months
Ended
March 31, 2013 (unaudited)
---------------------------------
Adjusted EBITDA 12,624
Less:
Cash interest expense (2,760)
Maintenance capital expenditures (83)
Income tax expense (443)
---------------------------------
Distributable Cash Flow 9,338
---------------------------------
Pro Forma Financial Results
As presented herein in this press release, the (unaudited) pro forma financial
statements of the Partnership are derived from the Partnership's (unaudited)
historical combined financial statements as of and for the period January
1, 2012 to March 31, 2012 and have been prepared to give effect to formation of
the Partnership, the contribution of certain assets, liabilities, and /or equity
interests of the Lehigh Gas Entities (Predecessor) to the Partnership, the new
Partnership credit facility agreement, the Offering, and use of proceeds from
the Offering and related transactions.
The (unaudited) pro forma statement of operations gives effect to the
adjustments as if they had occurred beginning January 1, 2012 for the period
January 1, 2012 to March 31, 2012. As more fully discussed below, the pro forma
adjustments are based upon currently available information and certain estimates
and assumptions; therefore, actual adjustments will differ from the pro forma
adjustments.
In connection with the Offering, certain assets, liabilities, and /or equity
interests of the Predecessor were contributed to the Partnership, and the
Partnership began providing wholesale fuel distribution services for LGO, an
affiliate of the Predecessor, and other, unrelated third-party customers. The
assets, liabilities and results of operations of the Predecessor for periods
prior to their actual contribution to the Partnership are presented as the
Predecessor.
The (unaudited) pro forma financial statements of the Partnership should be read
together with the historical combined financial statements of the Predecessor
and the consolidated financial statements of the Partnership included in our
Quarterly Report on Form 10-Q for the quarter ended March 31, 2013 and the
Annual Report on Form 10-K for the year ended December 31, 2012, as filed with
the U.S. Securities and Exchange Commission. The (unaudited) pro forma financial
statements of the Partnership were derived by making certain adjustments to the
historical combined financial statements of the Predecessor for the periods
January 1, 2012 to March 31, 2012. As noted above, the pro forma adjustments
are based on currently available information and certain estimates and
assumptions; therefore, the actual adjustments may differ from the pro forma
adjustments. However, management believes the estimates and assumptions provide
a reasonable basis for presenting the significant effects of the transactions
(as discussed below). Management also believes the pro forma adjustments give
appropriate effect to those estimates and assumptions and that they are properly
applied in the (unaudited) pro forma financial statements. The (unaudited) pro
forma financial statements are not necessarily indicative of the results that
actually would have occurred if the Partnership had assumed the operations of
the Predecessor on the dates indicated nor are they indicative of future
results, in part because of the exclusion of various operating expenses.
The unaudited pro forma combined financial statements principally include the
following transactions:
* The contribution to the Partnership by the Predecessor of substantially all
of its wholesale motor fuel distribution business, other than certain assets
that do not fit our strategic or geographic plans, environmental
indemnification assets, environmental liabilities, and certain other assets
and liabilities;
* The contribution to the Partnership by the Predecessor of certain owned and
leased properties;
* The issuance and sale by the Partnership of 6,900,000 common units to the
public, at $20.00 per common unit, with net proceeds to the Partnership of
$125.7 million, after deducting the underwriters' discount of 6.5% and a
structuring fee of 0.5% ( from the $20.00 per common unit offering price)
and $2.6 million of offering expenses;
* The payment by the Partnership of an aggregate of $6.8 million of
transaction costs related to the offering and the new credit facility;
* The Partnership's entry into a new credit facility agreement with a
revolving credit facility, which was drawn in part upon the closing of the
Offering; and,
* U.S. federal and state income tax incurred by a taxable wholly-owned
subsidiary of the Partnership.
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Lehigh Gas Partners LP via Thomson Reuters ONE
[HUG#1701389]
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Datum: 13.05.2013 - 22:20 Uhr
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