Loading...
01/11 04:42
Loading...
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call presents a mixed outlook. Financial performance shows growth in EBITDA and net income, but challenges exist in RNG production and competitive pressures. The Q&A reveals management's confidence in propane supply and M&A opportunities, but lacks clarity on regulatory impacts. Despite positive distribution coverage and leverage improvements, uncertainties in RNG market and supply chain may offset gains. With a market cap of $1.2 billion, the stock's reaction is likely muted, resulting in a neutral sentiment.
Adjusted EBITDA $175 million, an increase of $28 million or 19.1% compared to the prior year second quarter.
Net Income $136.9 million, or $2.11 per common unit, compared to net income of $110.3 million, or $1.71 per common unit in the prior year second quarter.
Retail Propane Gallons Sold 162 million gallons, which was 15.5% higher than the prior year second quarter.
Total Gross Margin $344.6 million, an increase of $42.5 million, or 14.1%, compared to the prior year second quarter.
Propane Unit Margins Flat compared to the prior year second quarter.
Combined Operating and G&A Expenses $169.3 million, an increase of $14.9 million, or 9.7% compared to the prior year's second quarter.
Interest Expense $20.6 million, an increase of 3.3% compared to the prior second quarter.
Total Capital Spending $19.3 million, $4.8 million higher than the prior year's second quarter.
Consolidated Leverage Ratio 4.54 times, improved from 4.99 times at the end of the first quarter.
Quarterly Distribution $0.325 per common unit, equating to an annualized rate of $1.30 per common unit, with a distribution coverage of 2.17 times for the trailing 12-month period.
New Product Launch: In late February, Suburban Propane launched an at-the-market (ATM) equity sales program to sell up to $100 million of newly issued common units.
NASCAR Partnership: Suburban Propane officially launched a multi-year sponsorship of NASCAR, becoming the official propane partner and providing propane for new propane-powered track dryers.
Market Expansion: The company made significant progress integrating a propane business acquired for approximately $53 million, with operations in New Mexico and Arizona.
Operational Efficiency: Propane volumes increased by 15.5% compared to the prior year, attributed to sustained winter weather and effective margin management.
RNG Production Enhancements: The company is implementing enhancements to RNG production and injection, safety protocols, and overall plant efficiency to improve long-term performance.
Strategic Growth Plan: Suburban Propane's long-term strategic growth plan focuses on fostering growth in core propane business and investing in lower carbon renewable energy alternatives.
Balance Sheet Strengthening: The ATM program aims to provide additional capital to support opportunistic growth while reinforcing the strength of the balance sheet.
Regulatory Issues: Ambiguity in proposed regulations from the US Treasury Department regarding production tax credits (PTCs) for renewable natural gas (RNG) could impact the financial performance of the Stanfield facility, as the company did not recognize any income from PTCs during the second quarter.
Supply Chain Challenges: The company faces potential supply chain challenges due to tariffs, although they believe they are insulated from the impact as they source most products domestically and only a small portion of propane from Canada.
Economic Factors: Volatility in propane prices due to uncertainty with Chinese demand for US propane could affect domestic supply and pricing, although lower domestic energy costs are seen as beneficial for consumers.
Competitive Pressures: The company is experiencing competitive pressures in the renewable natural gas market, particularly with lower prices for California LCFS credits and D3 RIN prices affecting revenue.
Operational Challenges: Cold temperatures in Arizona impacted RNG production at the Stanfield facility, coupled with planned downtime for enhancements, which could affect overall production efficiency.
Acquisition of Propane Business: Integration of the propane business acquired for approximately $53 million in New Mexico and Arizona, which has exceeded expectations.
Renewable Natural Gas Operations: Improvements in RNG production and injection, with ongoing enhancements to plant efficiency and safety protocols.
ATM Equity Sales Program: Launched an ATM program to sell up to $100 million of common units to support growth and strengthen the balance sheet.
NASCAR Partnership: Official propane partner of NASCAR, providing propane for track dryers and concessions, enhancing brand visibility and commitment to sustainability.
Adjusted EBITDA: Adjusted EBITDA for Q2 2025 was $175 million, a 19.1% increase from the prior year.
Net Income: Net income for Q2 2025 was $136.9 million, or $2.11 per common unit, compared to $110.3 million, or $1.71 per common unit in the prior year.
Distribution Coverage: Distribution coverage remains strong at 2.17 times for the trailing 12-month period ended March 2025.
Capital Expenditures: Total capital spending for Q2 2025 was $19.3 million, advancing construction efforts at RNG facilities.
Leverage Ratio: Consolidated leverage ratio improved to 4.54 times for the trailing 12-month period ended March 2025.
Quarterly Distribution: $0.325 per common unit for Q2 2025, equating to an annualized rate of $1.30 per common unit.
Distribution Payment Date: Scheduled for May 13, 2025, to unit holders of record as of May 6, 2025.
Distribution Coverage Ratio: 2.17 times for the trailing 12-month period ended March 2025.
ATM Equity Sales Program: Launched to sell up to $100 million of newly issued common units; raised net proceeds of $8.8 million in Q2 2025.
Use of Proceeds from ATM Program: Proceeds used to repay outstanding debt under the revolving credit facility.
The earnings call presents a mix of positive and negative factors. While there are strong financial metrics such as increased propane volumes, EBITDA, and net income, there are concerns about higher operating costs, regulatory risks, and a high leverage ratio. The Q&A section does not provide additional clarity or sentiment change. Given the company's market cap, the stock price is likely to remain stable, resulting in a neutral prediction for the next two weeks.
The earnings call presents a mixed outlook. While propane volumes and adjusted EBITDA remain stable, challenges such as unseasonably warm temperatures, volatility in propane prices, and operational downtime in RNG facilities raise concerns. The net loss has increased, and uncertainties in regulatory credits persist. However, strategic growth plans, such as acquisitions and partnerships, provide some optimism. The market cap suggests moderate sensitivity to these factors. Overall, the balance of positive and negative aspects leads to a neutral sentiment, with potential for slight stock price movement within the -2% to 2% range.
The earnings call presents a mixed outlook. Financial performance shows growth in EBITDA and net income, but challenges exist in RNG production and competitive pressures. The Q&A reveals management's confidence in propane supply and M&A opportunities, but lacks clarity on regulatory impacts. Despite positive distribution coverage and leverage improvements, uncertainties in RNG market and supply chain may offset gains. With a market cap of $1.2 billion, the stock's reaction is likely muted, resulting in a neutral sentiment.
The earnings call highlights strong financial performance with increased EBITDA, net income, and propane volumes. Despite regulatory risks and supply chain challenges, management's strategic positioning and potential M&A opportunities are promising. The Q&A section reassures the company's resilience in managing supply and capitalizing on M&A opportunities. While there are concerns about regulatory ambiguity, the company's financial health and strategic initiatives suggest a positive outlook. Given the market cap, a positive stock price movement of 2% to 8% is expected over the next two weeks.
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
