WHIPPANY, N.J., May 7, 2026 /PRNewswire/ -- Suburban Propane Partners, L.P. $(SPH)$, today announced earnings for its second quarter ended March 28, 2026.
Net income for the second quarter of fiscal 2026 was $137.5 million, or $2.07 per Common Unit, compared to net income of $137.1 million, or $2.11 per Common Unit, for the second quarter of fiscal 2025. Adjusted earnings before interest, taxes, depreciation, and amortization (Adjusted EBITDA, as defined and reconciled below) for the second quarter of fiscal 2026 was $175.3 million, flat compared to the prior year second quarter.
In announcing these results, President and Chief Executive Officer, Michael A. Stivala said, "The fiscal 2026 second quarter presented a vastly different weather pattern across our operating footprint, with sustained colder temperatures and several winter storms across the eastern half of the United States that drove strong heat-related demand, offset by record warm temperatures in the western half. Our operating personnel were well-prepared to safely and efficiently handle the surge in demand and, despite volatility in commodity markets resulting from the conflict in the Middle East, effectively managed selling prices and expenses. I am so proud of how our teams responded to meet the needs of our customers in some challenging conditions, while also maintaining their focus on our customer base growth and retention initiatives to expand our customer base. Adjusted EBITDA for the second quarter was essentially unchanged compared to the prior year and, for the first half of the fiscal year, increased $8.4 million, or 3.4%, compared to the comparable prior year period."
Mr. Stivala continued, "In our renewable natural gas ("RNG") operations, with the capital investments and process improvements implemented since acquiring the Stanfield, Arizona facility, we are continuing to stabilize production and grow RNG injection. Average daily D3 RNG injection for the second quarter of fiscal 2026 improved compared to the prior sequential quarter and the prior year second quarter due to an increase in facility uptime. Additionally, with the completion of our new anaerobic digester facility in Upstate New York and gas upgrading system in Columbus, Ohio, both of which are on schedule to be completed during the second half of this fiscal year, we expect to add approximately 200,000 MMBtu per annum to our RNG platform. During the second quarter, we also recognized a benefit of $3.5 million from the recognition of production tax credits ("PTCs"), pursuant to the release of draft regulations from the United States Treasury, related to D3 RNG injections at our Stanfield facility for the period from January 2025 through March 2026. As D3 production at our Upstate New York facility comes online, we expect to be eligible to earn PTCs for RNG injected from that facility."
Concluding his remarks, Mr. Stivala commented, "With another quarter of strong operating performance, and our capital projects in the RNG platform winding down, we utilized excess cash flows generated during the second quarter to reduce total debt by more than $64.0 million. We continue to take a disciplined approach to the way we allocate capital in the execution of our long-term strategic growth plan -- fostering the growth of our core propane business, investing in the future of renewable energy, while preserving balance sheet strength and flexibility."
Retail propane gallons sold in the second quarter of fiscal 2026 of 161.6 million gallons were flat compared to the prior year second quarter, as the impact of cooler temperatures across much of the eastern half of the United States on heat-related demand and contributions from the Partnership's recent acquisitions, were offset by considerably warmer temperatures in the West. Average temperatures (as measured by the number of heating degree days reported by the National Oceanic and Atmospheric Administration) across all the Partnership's service territories during the second quarter of fiscal 2026 were 6% warmer than normal and 1% warmer than the prior year second quarter. Notably, average temperatures in the East were 2% warmer than normal and 3% colder than the prior year, whereas average temperatures in the West were 22% warmer than normal and 17% warmer than the prior year.
Average propane prices (basis Mont Belvieu, Texas) for the second quarter of fiscal 2026 decreased 23.1% compared to the prior year second quarter. Total gross margin of $343.7 million for the second quarter of fiscal 2026 decreased $1.6 million, or 0.5%, compared to the prior year second quarter. Gross margin for the second quarter of fiscal 2026 included a $1.4 million unrealized loss attributable to the mark-to-market adjustment for derivative instruments used in risk management activities, compared to a $0.7 million unrealized gain in the prior year second quarter. These non-cash adjustments, which were reported in cost of products sold, were excluded from Adjusted EBITDA for both periods. Excluding the impact of the mark-to-market adjustments, total gross margin increased $0.5 million compared to the prior year second quarter, primarily due to an increase in propane unit margins of $0.03 per gallon, or 1.7%.
Combined operating and general and administrative expenses of $169.5 million for the second quarter of fiscal 2026 were flat compared to the prior year second quarter, as higher payroll and benefit-related expenses, higher fuel and other vehicle costs, and an increase in accruals for self-insurance matters, were offset by a benefit of $3.5 million from the recognition of PTCs and an insurance recovery related to the partial settlement of certain claims associated with the Partnership's acquisition of RNG production assets in December 2022.
During the second quarter of fiscal 2026, the Partnership utilized cash flows from operating activities to repay $64.3 million in borrowings under its revolving credit facility. The Consolidated Leverage Ratio, as defined in the Partnership's credit agreement, for the twelve-month period ended March 28, 2026 improved to 4.34x.
As previously announced on April 23, 2026, the Partnership's Board of Supervisors declared a quarterly distribution of $0.325 per Common Unit for the three months ended March 28, 2026. On an annualized basis, this distribution rate equates to $1.30 per Common Unit. The distribution is payable on May 12, 2026 to Common Unitholders of record as of May 5, 2026.
About Suburban Propane Partners, L.P.
Suburban Propane Partners, L.P. ("Suburban Propane") is a publicly traded master limited partnership listed on the New York Stock Exchange. Headquartered in Whippany, New Jersey, Suburban Propane has been in the customer service business since 1928 and is a nationwide distributor of propane, renewable propane, renewable natural gas, fuel oil and related products and services, as well as a marketer of natural gas and electricity and producer of and investor in low carbon fuel alternatives, servicing the energy needs of approximately 1 million residential, commercial, governmental, industrial and agricultural customers through approximately 750 locations across 42 states.
Suburban Propane is supported by three core pillars: (1) Suburban Commitment to Excellence -- showcasing Suburban Propane's almost 100-year legacy, and ongoing commitment to the highest standards for dependability, flexibility, and reliability that underscores Suburban Propane's commitment to excellence in customer service; (2) SuburbanCares -- highlighting continued dedication to giving back to local communities across Suburban Propane's national footprint; and (3) Go Green with Suburban Propane -- promoting propane and renewable propane as versatile, low-carbon energy solutions and investing in the next generation of innovative, renewable energy alternatives.
For additional information on Suburban Propane, please visit www.suburbanpropane.com.
Forward-Looking Statements
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, renewable
propane, fuel oil and other refined fuels, natural gas, renewable natural
gas ("RNG") and electricity;
-- The impact of climate change and potential climate change legislation on
the Partnership and demand for propane, renewable propane, fuel oil and
other refined fuels, natural gas, RNG and electricity;
-- Volatility in the unit cost of propane, renewable propane, fuel oil and
other refined fuels, natural gas, RNG and electricity, the impact of the
Partnership's hedging and risk management activities, and the adverse
impact of price increases on volumes sold as a result of customer
conservation;
-- The ability of the Partnership to compete with other suppliers of propane,
renewable propane, fuel oil, RNG and other energy sources;
-- The impact on the price and supply of propane, renewable propane, fuel
oil and other refined fuels from the political, military or economic
instability of the oil producing nations, including hostilities in the
Middle East, Russian military action in Ukraine, global terrorism and
other general economic conditions, including the economic instability
resulting from natural disasters;
-- Economic volatility and downturns, including as a result of tariffs,
trade conflict and related uncertainty;
-- The ability of the Partnership to acquire and maintain sufficient volumes
of, and the costs to the Partnership of acquiring, reliably transporting
and storing, propane, renewable propane, fuel oil and other refined
fuels;
-- The ability of the Partnership to attract and retain employees and key
personnel to support the growth of our business;
-- The ability of the Partnership to retain customers or acquire new
customers;
-- The impact of customer conservation, energy efficiency, general economic
conditions and technology advances on the demand for propane, renewable
propane, fuel oil and other refined fuels, natural gas, RNG and
electricity;
-- The ability of management to continue to control expenses and manage
inflationary increases in fuel, labor and other operating costs;
-- Risks related to the Partnership's renewable fuel projects and
investments, including the willingness of customers to purchase fuels
generated by the projects, the permitting, financing, construction,
development and operation of supporting facilities, the Partnership's
ability to generate a sufficient return on its renewable fuel projects,
the Partnership's dependence on third-party partners to help manage and
operate renewable fuel investment projects, and increased regulation and
dependence on government funding for commercial viability of renewable
fuel investment projects;
-- The generation and monetization of environmental attributes produced by
the Partnership's renewable fuel projects, changes to legislation or
regulations concerning the generation and monetization of environmental
attributes and pricing volatility in the open markets where environmental
attributes are traded;
-- The impact of changes in applicable laws and government regulations, or
their interpretations, including those relating to the environment and
climate change, permitting, human health and safety, derivative
instruments, the sale or marketing of propane and renewable propane, fuel
oil and other refined fuels, natural gas, RNG and electricity, including
the impact of recently adopted and proposed changes to New York law and
changed regulatory priorities, and other regulatory developments that
could impose costs and liabilities 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 risks and proceedings on the Partnership's business;
-- The impact of operating hazards that could adversely affect the
Partnership's reputation and its operating results to the extent not
covered by insurance;
-- The Partnership's ability to make strategic acquisitions, successfully
integrate them and realize the expected benefits of those acquisitions;
-- The ability of the Partnership and any third-party service providers on
which it may rely for support or services to continue to combat
cybersecurity threats to their respective and shared networks and
information technology;
-- Risks relating to the Partnership's plans to diversify its business;
-- Risks related to the Partnership's current and future debt obligations
that may limit its ability to make distributions to Unitholders, as well
as its financial flexibility;
-- The impact of current conditions in the global capital, credit and
environmental attribute markets, and general economic pressures; 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 most recent 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 27, 2025 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.
Suburban Propane Partners, L.P. and Subsidiaries Consolidated
Statements of Operations For the Three and Six Months Ended
March 28, 2026 and March 29, 2025 (in thousands, except per
unit amounts) (unaudited)
Three Months Ended Six Months Ended
------------------ -----------------------
March March March
28, 29, 28, March 29,
2026 2025 2026 2025
-------- -------- -------- -------------
Revenues
Propane $491,142 $525,256 $817,532 $ 855,539
Fuel oil and
refined fuels 32,354 33,364 50,521 51,025
Natural gas and
electricity 8,778 9,025 14,677 15,078
All other 18,932 20,018 38,862 39,350
------- ------- ------- ------------
551,206 587,663 921,592 960,992
Costs and
expenses
Cost of
products sold 207,500 242,362 338,339 389,524
Operating 139,500 139,377 266,659 262,530
General and
administrative 30,044 29,911 57,917 56,764
Depreciation
and
amortization 16,251 17,600 33,115 34,699
------- ------- ------- ------------
393,295 429,250 696,030 743,517
Operating income 157,911 158,413 225,562 217,475
Loss on debt
extinguishment -- -- 1,183 --
Interest
expense, net 19,694 20,567 39,450 40,179
Other, net 555 729 1,256 20,196
------- ------- ------- ------------
Income before
provision for
(benefit from)
income taxes 137,662 137,117 183,673 157,100
Provision for
(benefit from)
income taxes 120 (4) 351 559
------- ------- ------- ------------
Net income $137,542 $137,121 $183,322 $ 156,541
======= ======= ======= ============
Net income per
Common Unit -
basic $ 66,565 $ 64,876 $ 66,416 $ 64,711
======= ======= ======= ============
Weighted average
number of
Common Units
outstanding -
basic 2.07 2.11 2.76 2.42
------- ------- ------- ------------
Net income per
Common Unit -
diluted $ 66,904 $ 65,262 $ 66,712 $ 65,034
======= ======= ======= ============
Weighted average
number of
Common Units
outstanding -
diluted 2.06 2.10 2.75 2.41
------- ------- ------- ------------
Supplemental
Information:
EBITDA (a) $173,607 $175,284 $256,238 $ 231,978
Adjusted EBITDA
(a) $175,340 $175,044 $258,745 $ 250,345
Retail gallons
sold:
Propane 161,593 162,027 271,758 267,766
Refined fuels 7,469 7,760 12,006 12,127
Capital
expenditures:
Maintenance $ 7,203 $ 8,041 $ 13,316 $ 12,659
Growth $ 17,527 $ 11,268 $ 31,219 $ 30,493
(a) EBITDA represents net income before deducting interest expense, income
taxes, depreciation and amortization. Adjusted EBITDA represents EBITDA
excluding the unrealized net gain or loss on mark-to-market activity for
derivative instruments and other items, as applicable, as provided in the
table below. Our management uses EBITDA and Adjusted EBITDA as
supplemental measures of operating performance and we are including them
because we believe that they provide our investors and industry analysts
with additional information that we determined is useful to evaluate our
operating results.
EBITDA and Adjusted EBITDA are not recognized terms under accounting principles generally accepted in the United States of America ("US GAAP") and should not be considered as an alternative to net income or net cash provided by operating activities determined in accordance with US GAAP. Because EBITDA and Adjusted EBITDA as determined by us excludes some, but not all, items that affect net income, they may not be comparable to EBITDA and Adjusted EBITDA or similarly titled measures used by other companies.
The following table sets forth our calculations of EBITDA and Adjusted EBITDA:
Three Months Ended Six Months Ended
------------------ ------------------
March March March March
28, 29, 28, 29,
2026 2025 2026 2025
-------- -------- -------- --------
Net income $137,542 $137,121 $183,322 $156,541
Add:
Provision for
(benefit from)
income taxes 120 (4) 351 559
Interest
expense, net 19,694 20,567 39,450 40,179
Depreciation
and
amortization 16,251 17,600 33,115 34,699
------- ------- ------- -------
EBITDA 173,607 175,284 256,238 231,978
Loss on debt
extinguishment -- -- 1,183 --
Equity in
losses and
impairment
charges for
investments in
unconsolidated
affiliates 375 504 896 22,745
Unrealized
non-cash
losses (gains)
on changes in
fair value of
derivatives 1,358 (744) 428 (4,378)
Adjusted EBITDA $175,340 $175,044 $258,745 $250,345
======= ======= ======= =======
We also reference gross margins, computed as revenues less cost of products sold as those amounts are reported on the consolidated financial statements. Our management uses gross margin as a supplemental measure of operating performance and we are including it as we believe that it provides our investors and industry analysts with additional information that we determined is useful to evaluate our operating results. As cost of products sold does not include depreciation and amortization expense, the gross margin we reference is considered a non-GAAP financial measure.
The unaudited financial information included in this document is intended only as a summary provided for your convenience, and should be read in conjunction with the complete consolidated financial statements of the Partnership (including the Notes thereto, which set forth important information) contained in its Quarterly Report on Form 10-Q to be filed by the Partnership with the SEC. Such report, once filed, will be available on the public EDGAR electronic filing system maintained by the SEC.
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SOURCE Suburban Propane Partners, L.P.
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May 07, 2026 07:30 ET (11:30 GMT)