Suburban Propane Partners LP ( SPH) Q3 2011 Earnings Call November 10, 2011 9:00 am ET Executives Mike Dunn – President, Chief Executive Officer Mike Stivala – Chief Financial Officer Davin D’Ambrosio – Vice President, Treasurer Analysts Darren Horowitz – Raymond James John Tiesland (phon) - Presentation Operator
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Davin D’AmbrosioThank you, Cathy, and good morning everyone. Welcome to Suburban’s Fourth Quarter and Fiscal 2011 Full Year Results. I’m David D’Ambrosio, Vice President and Treasurer at Suburban. Joining me this morning is Mike Dunn, our President and Chief Executive Officer, and Mike Stivala, our Chief Financial Officer. The purpose of today’s call is to review our fourth quarter and fiscal 2011 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, however, 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 the forward-looking statements is contained in the Partnership’s SEC filings, including our Form 10-K for the fiscal year ended September 25, 2010 and our Form 10-K for fiscal year ended September 24, 2011 which will be filed on or about November 23, 2011. 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 was furnished to the SEC this morning. Form 8-K will be available through a link on our website at suburbanpropane.com. At this point, I’d like to turn the call over to Mike Dunn for some opening remarks. Mike? Mike Dunn Thanks, Davin, and thanks everyone for joining us this morning. Fiscal 2011 proved to be every bit as challenging as we expected. The weak economy combined with persistent high commodity prices continue to put pressure on both volumes and margins. As we’ve proven in the past, and this year is no different, we have the ability to adapt our systems and operational model to effectively manage our cost structure and drive efficiencies. Specifically, the steps we took this past spring to realign our operating model will not only have an influence on our overall cost structure but more importantly place our operating personnel in the best position to focus on quality customer service and customer growth.
With this quarter’s $2 million improvement in adjusted EBITDA compared to the prior year fourth quarter, we have already started to realize some of the operational and financial benefits that we anticipated from our realignment efforts. A little later, I will provide some closing remarks, including thoughts for the coming year; however, at this point I will turn it over to Mike Stivala to discuss our full year and fourth quarter results in more detail.Mike Stivala Thanks, Mike, and good morning everyone. I’ll start by focusing on our full year results and then give a little color on the fourth quarter toward the end of my remarks. To be consistent with previous reporting, I’m excluding the impact of a $1.4 million unrealized non-cash gain applicable to FAS 133 accounting that compares to an unrealized loss of 5.4 million in fiscal 2010. Net income totaled 113.5 million or $3.20 per common unit for fiscal 2011 compared to net income of $120.7 million or $3.41 per common unit in the prior year. Fiscal 2011 results included a $2 million charge for severance costs associated with the realignment efforts during our second quarter as well as a non-cash charge of $2.9 million within depreciation expense to accelerate depreciation on assets taken out of service. By comparison, net income and EBITDA for fiscal 2010 included a loss on debt extinguishment of $9.5 million associated with the refinancing of our senior notes, a $2.8 million non-cash pension settlement charge, as well as a non-cash charge of 1.8 million within depreciation expense. Therefore, excluding the effects of these items from both years, adjusted EBITDA was $179.4 million for fiscal 2011, a decrease of $13 million of 6.8% compared to adjusted EBITDA of $192.4 million in the prior year. Read the rest of this transcript for free on seekingalpha.com