Global Partners LP Quarterly Report (Form 10-Q)

Overview

Global Partners LP is a master limited partnership that owns, controls or has access to a large terminal network of refined petroleum products and renewable fuels across the Northeast and Mid-Atlantic regions. The company is one of the largest independent owners, suppliers and operators of gasoline stations and convenience stores in the Northeast, as well as one of the largest distributors of gasoline, distillates, residual oil and renewable fuels in the New England states and New York.

Operating Segments

Global Partners operates in three business segments:

1. Wholesale - Engages in the logistics of selling, gathering, blending, storing and transporting refined petroleum products, gasoline blendstocks, renewable fuels, crude oil and propane.

2. Gasoline Distribution and Station Operations (GDSO) - Includes gasoline distribution and sales as well as convenience store and prepared food sales, rental income and sundries at owned, leased and supplied gasoline stations.

3. Commercial - Includes sales and deliveries of unbranded gasoline, home heating oil, diesel, kerosene, residual oil and bunker fuel to end-user customers in the public sector and large commercial and industrial businesses.

Seasonality

Global Partners experiences seasonal fluctuations in demand, with higher gasoline demand in the late spring and summer months and higher heating oil and residual oil demand in the winter months. This can result in quarterly variations in operating results.

Outlook

Key risks and factors that may affect Global Partners’ future performance include:

• Volatility in prices and demand for refined petroleum products, gasoline blendstocks, renewable fuels and crude oil
• Ability to successfully complete acquisitions and growth projects
• Challenges with joint venture operations
• Disruptions to transportation and logistics services
• Reduced demand for gasoline due to new technologies and changing consumer preferences
• Impact of government regulations and policies, including renewable fuel standards
• Exposure to performance risks in the supply chain
• Cybersecurity and information technology risks

Results of Operations

For the first quarter of 2025:

• Total sales increased 11% to $4.6 billion, driven by higher volumes
• Gross profit increased 19% to $255.2 million, due to improved margins in the Wholesale and Commercial segments
• SG&A expenses increased 6% to $73.7 million, primarily from higher compensation costs
• Operating expenses increased 5% to $126.7 million, mainly from higher terminal maintenance and the addition of acquired terminals
• Net income was $18.7 million, compared to a loss of $5.6 million in the prior-year period

Liquidity and Capital Resources

• Working capital decreased $30.7 million to $176.5 million at March 31, 2025
• Paid $29.5 million in cash distributions to common unitholders in Q1 2025
• Paid $1.8 million in cash distributions to Series B preferred unitholders in Q1 2025
• Maintenance capital expenditures were $9.6 million and expansion capital expenditures were $8.3 million in Q1 2025
• Expect maintenance capital expenditures of $60-$70 million and expansion capital expenditures of $75-$85 million for full-year 2025
• Amended credit agreement in March 2025 to extend maturity to 2028, increase working capital facility to $1 billion and decrease revolving facility to $500 million

Overall, Global Partners delivered improved financial results in the first quarter of 2025 driven by stronger margins in its Wholesale and Commercial segments. The company continues to focus on growth through acquisitions and capital projects while managing risks around commodity prices, transportation disruptions and regulatory changes.