WHIPPANY, N.J., May 9, 2013 /PRNewswire/ -- Suburban Propane Partners, L.P. (NYSE: SPH), a nationwide distributor of propane, fuel oil and related products and services, as well as a marketer of natural gas and electricity, today announced earnings for its second quarter ended March 30, 2013.

The second quarter of fiscal 2013 was the second full quarter of operations since the Partnership's acquisition of Inergy L.P.'s retail propane business ("Inergy Propane") on August 1, 2012.  For comparative purposes, the variances in year-over-year results were primarily attributable to the inclusion of the Inergy Propane operations.  In addition, operating performance in the Partnership's legacy operations improved as a result of a combination of colder average temperatures, lower wholesale propane costs and continued savings in operating expenses.  Net income for the three months ended March 30, 2013 amounted to $131.2 million, or $2.29 per Common Unit, compared to $49.6 million, or $1.39 per Common Unit, in the prior year second quarter.  Earnings before interest, taxes, depreciation and amortization ("EBITDA") for the second quarter of fiscal 2013 amounted to $185.3 million, compared to $63.3 million in the prior year second quarter, an increase of $122.0 million. 

Net income and EBITDA for the fiscal 2013 second quarter included $2.7 million in expenses related to the ongoing integration of Inergy Propane operations, and unrealized (non-cash) losses of $2.6 million attributable to mark-to-market adjustments on derivative instruments used in risk management activities. Net income and EBITDA for the fiscal 2012 second quarter included a $2.1 million non-cash charge from a loss on disposal of an asset in the Partnership's natural gas and electricity business, as well as a $0.5 million loss on debt extinguishment associated with the amended and restated credit agreement completed in January 2012.  Excluding the effects of these charges for the fiscal 2013 and 2012 second quarters, as well as the unrealized (non-cash) mark-to-market adjustments on derivative instruments in both quarters (there was no impact in the prior year second quarter), Adjusted EBITDA amounted to $190.7 million for the fiscal 2013 second quarter, compared to Adjusted EBITDA of $65.9 million in the prior year second quarter.

In announcing these results, President and Chief Executive Officer Michael J. Dunn, Jr., said, "We are very pleased with our results for the second quarter of fiscal 2013.  While the unseasonably warm temperatures that were experienced in the first quarter of fiscal 2013 carried over into the first several weeks of the second quarter, a burst of cold weather from late February through March brought average temperatures for the quarter closer to normal. When the cold weather did arrive, our people and combined businesses responded."

Retail propane gallons sold in the second quarter of fiscal 2013 increased 120.4 million gallons, to 210.3 million gallons from 89.9 million gallons in the prior year second quarter. Sales of fuel oil and other refined fuels increased 12.6 million gallons, to 23.2 million gallons compared to 10.6 million gallons in the prior year second quarter. The increase in volumes sold was primarily attributable to the inclusion of the Inergy Propane operations, as well as increases in the Partnership's legacy operations resulting from colder average temperatures.  According to the National Oceanic and Atmospheric Administration ("NOAA"), average temperatures (as measured by heating degree days) across all of the Partnership's service territories during the second quarter of fiscal 2013 were 1% warmer than normal, compared to 21% warmer than normal in the prior year quarter. The favorable weather comparison for the quarter was primarily due to colder than normal average temperatures in the month of March 2013 which, as reported by NOAA, were 10% colder than normal compared to 31% warmer than normal in March of the prior year.   

Addressing the ongoing Inergy Propane integration efforts, Mr. Dunn said, "During the second quarter we continued to make progress on our integration efforts. With our key operations management in place since the start of the heating season, we are now focused on further streamlining our regional operating structure, defining our local operating footprint and identifying the management teams across the entire platform.  With the heating season behind us, we have aggressively turned our attention to the blending of locations in overlapping geographies and the conversion of key operating systems.  Throughout this period of change, we have been in regular communication with the entire Inergy Propane customer base, keeping them informed of progress and milestones achieved with the integration, as well as our commitment to their safety and comfort."

Concluding his comments, Mr. Dunn said, "Plenty of work remains to be done with the integration of the business operations and cultures in preparation for the next heating season.  We will continue to execute on our detailed integration plans while, at the same time, maintaining our focus on the combined customer base and continuing to look for opportunities to grow and improve efficiencies. Finally, despite the increased size of our business and the increased working capital requirements, we once again funded all working capital needs from cash on hand without the need to borrow under our revolving credit facility and ended the quarter with more than $166.5 million of cash."

As previously announced on April 24, 2013, the Partnership's Board of Supervisors has declared a quarterly distribution of $0.8750 per Common Unit for the three months ended March 30, 2013. On an annualized basis, this distribution rate equates to $3.50 per Common Unit. The $0.8750 per Common Unit distribution is payable on May 14, 2013 to Common Unitholders of record as of May 7, 2013.

Suburban Propane Partners, L.P. is a publicly traded master limited partnership listed on the New York Stock Exchange. Headquartered in Whippany, New Jersey, Suburban has been in the customer service business since 1928. The Partnership serves the energy needs of more than 1.2 million residential, commercial, industrial and agricultural customers through more than 750 locations in 41 states.

This press release contains certain forward-looking statements relating to future business expectations and financial condition and results of operations of the Partnership, based on management's current good faith expectations and beliefs concerning future developments.  These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those discussed or implied in such forward-looking statements, including the following:

• The impact of weather conditions on the demand for propane, fuel oil and other refined fuels, natural gas and electricity;
• Volatility in the unit cost of propane, fuel oil and other refined fuels and natural gas, the impact of the Partnership's hedging and risk management activities, and the adverse impact of price increases on volumes as a result of customer conservation;
• The cost savings expected from the Partnership's most recent acquisition of Inergy Propane may not be fully realized or realized within the expected timeframe;
• The Partnership's revenue from the Inergy Propane acquisition may be lower than expected;
• The costs of integrating the business acquired in the Inergy Propane acquisition into the Partnership's existing operations may be greater than expected;
• The ability of the Partnership to compete with other suppliers of propane, fuel oil and other energy sources;
• The impact on the price and supply of propane, fuel oil and other refined fuels from the political, military or economic instability of the oil producing nations, global terrorism and other general economic conditions;
• The ability of the Partnership to acquire and maintain reliable transportation for its propane, fuel oil and other refined fuels;
• The ability of the Partnership to retain customers or acquire new customers;
• The impact of customer conservation, energy efficiency and technology advances on the demand for propane, fuel oil and other refined fuels, natural gas and electricity;
• The ability of management to continue to control expenses;
• The impact of changes in applicable statutes and government regulations, or their interpretations, including those relating to the environment and global warming, derivative instruments and other regulatory developments on the Partnership's business;
• The impact of changes in tax laws that could adversely affect the tax treatment of the Partnership for income tax purposes;
• The impact of legal proceedings on the Partnership's business;   
• The impact of operating hazards that could adversely affect the Partnership's operating results to the extent not covered by insurance;
• The Partnership's ability to make strategic acquisitions and successfully integrate them;
• The impact of current conditions in the global capital and credit markets, and general economic pressures;
• The operating, legal and regulatory risks the Partnership may face; and
• Other risks referenced from time to time in filings with the Securities and Exchange Commission ("SEC") and those factors listed or incorporated by reference into the Partnership's Annual Report under "Risk Factors." 

Some of these risks and uncertainties are discussed in more detail in the Partnership's Annual Report on Form 10-K for its fiscal year ended September 29, 2012 and other periodic reports filed with the SEC.  Readers are cautioned not to place undue reliance on forward-looking statements, which reflect management's view only as of the date made. The Partnership undertakes no obligation to update any forward-looking statement, except as otherwise required by law.

SOURCE Suburban Propane Partners, L.P.