Suburban Propane Partners LP (SPH)
F2Q10 (Qtr End 03/27/10) Earnings Call
May 6, 2010 09:00 am ET
Davin D'Ambrosio - VP and Treasurer
Mike Dunn - President and CEO
Michael Stivala - CFO
Previous Statements by SPH
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Ladies and gentlemen, thank you very much for standing by and welcome to the Second Quarter 2010 Result Conference Call. At this time, all participants are in a listen only mode. Later, we will conduct a question and answer session; instructions will given to you at that time. (Operator Instructions). And also as a reminder this conference is being recorded. This conference call contains forward looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 as amended relating to the Partnership’s Future business expectation and prediction of financial conditions and results of operation.
These forward looking statements involve certain risk 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 and its earnings press release which can be viewed on the company’s website on subsequent, written and oral forward looking statements attributable to the partnership or person active on this behalf are especially qualified in their entirety by such cautionary statements.
I would now like to turn the conference over to your host, Mr. Davin D'Ambrosio. Please go ahead.
Thank you Perky and good morning everyone. Welcome to Suburban’s fiscal 2010 second quarter results conference call. I'm Davin D’Ambrosio, Vice President, Treasurer at Suburban. With me this morning is Mike Dunn, President and Chief Executive Officer and Mike Stivala, our Chief Financial Officer.
Purpose of today’s call is to review our second quarter financial 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 re-emphasis 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 partnerships SEC filings.
Including its Form 10-K for the fiscal year ended September 26, 2009 and its Form 10-Q for the period ended March 27, 2010 which will be filed by the end of business today.
Copy to these filings maybe obtained by contacting a partnership for the SEC. Certain non-GAAP measures will be discussed on this call; we 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 furnished to the SEC this morning. 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?
Thanks, Davin and thanks everyone for joining us this morning. The operating environment in second quarter continued to present several challenges in managing volumes and margins. Our volumes were negatively affected by the economy and a variant consistent weather pattern throughout our service territories, while at the same time commodity price volatility had an impact on our overall gross margins.
Nonetheless, we remained well positioned to respond to the ongoing challenges with our efficient operating platform, flexible cost structure and strong balance sheet. With, that being said as announced this morning we are very pleased to deliver adjusted EBITDA of a $123.7 million, which was ahead of our expectations for the quarter. Additionally during the quarter we took proactive steps to further strengthen our balance sheet by successfully accessing the capital markets and extending the maturity on all of our $250 million of senior debt until March 2020 at a very attractive way.
In a moment I will comment on our outlook for the remainder of the fiscal year, however at this point I’d like to turn the call over to Mike Stivala to discuss our second quarter results in more detail, Mike?
Thanks Mike and good morning everyone. As Mike indicated, our results for the quarter exceeded our expectations, despite an operating environment that can be characterized as one of the more challenging that we have seen in quite sometime. Our field and central support employees should be commanded for their efforts in managing through the challenges in the current economy and delivering these solid operating results.
As we discussed our second quarter results to be consistent with previous reporting, I am excluding the impact of a $1.7 million, unrealized non-cash loss applicable to FAS 133 accounting compared to an unrealized non-cash loss of $9.7 million in the prior year second quarter.
Additionally, and arriving at adjusted EBITDA, I am excluding a charge of $9.5 million reported as a loss on debt extinguishment from the senior debt refinancing completed during March 2010. Therefore exempted EBITDA for our fiscal 2010 second quarter totaled $123.7 million, a decrease of $18.3 million, compared to $142 million for the second quarter of fiscal 2009.
Net income totaled $100.1 million or $2.83 per common unit for the second quarter of fiscal 2010, compared to net income of $124.6 million or $3.79 per common unit in the prior year second quarter.
Excluding the impact from the loss on debt extinguishment, net income for the fiscal 2010 second quarter would be $109.6 million or $3.10 per common unit.