Suburban Propane Partners CEO Discusses F4Q10 Results - Earnings Call Transcript
Suburban Propane Partners (
)
F4Q10 Earnings Call
November 11, 2010 9:00 a.m. ET
Executives
Davin D’Ambrosio – VP and Treasurer
Mike Dunn – President and CEO
Mike Stivala – CFO
Analysts
Darren Horowitz – Raymond James & Associates
Michael Cerasoli – Goldman Sachs
John Tysseland – Citigroup
Ron Londe – Wells Fargo Securities
Presentation
Operator
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Suburban Propane Partners, L.P. F4Q09 (Qtr End 09/26/09) Earnings Call Transcript
Ladies and gentlemen, thank you very much for standing by. Welcome to the fourth quarter 2010 results conference call. [Operator Instructions.] And as a reminder, this conference is being recorded. Also, this call contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 as amended relating to the partnerships, future business expectations, and predictions and financial conditions and results of operations.
These forward-looking statements involve certain risks and uncertainties. The Partnership has listed some of the important factors that could cause actual results to differ materially from those discussed in such forward-looking statements, which I refer to as cautionary statements in its earnings press release which can be reviewed on the company’s website. All subsequent written and oral forward-looking statements attributable to the partnerships or persons acting on this behalf are expressly qualified in their entirety by such cautionary statements.
With that I would now like to turn the conference over to Davin D’Ambrosio. Please go ahead.
Davin D’Ambrosio
Thank you operator and good morning everyone. Welcome to Suburban’s fourth quarter and fiscal 2010 full year conference call. I’m Davin D’Ambrosio, Vice President and Treasurer at Suburban. Joining me this morning is Mike Dunn, our President and Chief Executive Officer, Mike Stivala, our Chief Financial Officer.
Today’s call is to review our fourth quarter and fiscal 2010 full year results along with our current outlook for the business. As usual, once we’ve concluded our prepared remarks, we will open the session to questions. Before getting started, I would like to reemphasize what the operator has just explained about forward-looking statements.
Additional information about factors that could cause actual results to differ materially from those discussed in forward-looking statements is contained in the Partnership’s SEC filings, including its Form 10-K for the fiscal year ended September 26, 2009 and our Form 10-K for fiscal year ended September 25, 2010, which will be filed on or about November 24, 2010. Copies of these filings may be obtained by contacting the Partnership or the SEC.
Certain non-GAAP measures will be discussed on this call. We have provided a description of those measures as well as a discussion of why we believe this information to be useful in our Form 8-K, which will be filed with the SEC on Friday morning due to the Veteran's Day holiday today. The Form 8-K can be accessed or linked on our website at suburbanpropane.com.
At this point, I will turn the call over to Mike Dunn for some opening remarks. Mike?
Mike Dunn
Thanks Davin, and thanks everyone for joining us this morning. Although fiscal 2010 proved to be one of the more challenging operating environments in quite some time, the management team and employees of Suburban kept their focus, enhancing customer service, diligently managing our cost base, driving efficiencies, and further strengthening our balance sheet.
Despite the many challenges that fiscal 2010 presented, our adjusted EBITDA of $192.4 million was in line with our internal expectations established at the beginning of the fiscal year. During the year we had several notable achievements and to recap a few of those achievements, we refinanced all $250 million of our senior notes through 2020 at attractive rates. We acquired four independent propane operators, expanding our customer base in markets where we already have a strong presence. Through our internal efforts to focus on net customer growth, we grew our propane customer base and an increasing percentage of our customer service centers compared to the prior year. We expanded within our current territories for the natural gas and electricity marketing segment, increasing our customer base by 13%. We increased the annualized distribution rate each quarter during the fiscal year for a total increase of $0.08 per common unit, or 2.4% compared to the end of fiscal 2009. And, we ended the year with nearly $157 million of cash on hand and a distribution coverage ratio greater than 1.3 times.
A little later I will provide some closing remarks, including thoughts for the coming year. At this point, however, I will turn it over to Mike Stivala to discuss our full year and fourth quarter results in more detail. Mike?
Mike Stivala
Thank you Mike, and good morning everyone. As we've reported throughout the year, the fiscal 2010 challenges included the obvious negative effects of the prolonged weakness in the economy, mild weather during the peak heating season, particularly in the west and northeast regions of the country, and somewhat volatile commodity prices. In many ways, other than the impact of the economy, this fiscal year was in stark contrast to the operating environment of fiscal 2009. Nonetheless, as Mike indicated, we are very pleased with our operating results, which were in line with our expectations.
Furthermore, we took proactive steps to further strengthen our balance sheet through the refinancing of our senior notes, which has essentially eliminated refinancing risk until our revolving credit facility matures in June 2013. Our balance sheet and overall distributable cash flow remains strong, as we ended the year with $156.9 million of cash on hand and a leverage profile of just 1.79 times.
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