WALTHAM, Mass.--(BUSINESS WIRE)--Global Partners LP (NYSE:GLP) today reported financial results for the second quarter ended June 30, 2016.

The net loss attributable to Global for the second quarter of 2016 was $7.3 million, or $0.22 per limited partner unit, compared with net income attributable to the Partnership of $7.2 million, or $0.15 per diluted limited partner unit, for the second quarter of 2015.

Combined product margin for the second quarter of 2016 was $154.5 million, compared with $166.2 million for the second quarter of 2015.

Earnings before interest, taxes, depreciation and amortization (EBITDA) were $41.3 million for the second quarter of 2016, compared with $48.7 million for the same period of 2015.

Adjusted EBITDA, which is EBITDA adjusted for the loss on the sale and disposition of assets and impairment charges, was $43.8 million for the second quarter of 2016, compared with Adjusted EBITDA of $48.9 million for the same period of 2015.

Distributable cash flow (DCF) for the second quarter of 2016 was $14.2 million, compared with $26.2 million for the comparable period of 2015. DCF includes a net loss on sale and disposition of assets and impairment charges of $2.5 million and $0.2 million for the three months ended June 30, 2016 and 2015, respectively. Excluding those items, DCF would have been $16.8 million for the 2016 period and $26.4 million for the 2015 period.

“Our Gasoline Distribution and Station Operations segment delivered positive results,” said Eric Slifka, Global’s president and chief executive officer. “GDSO product margin increased 18 percent year-over-year in the second quarter. This result reflected better gasoline margins and growth in our retail portfolio.

“In our Wholesale segment, gasoline and gasoline blendstocks margin was up 50 percent for the second quarter, reflecting favorable market conditions for wholesale gasoline, while the margin for other oils and related products more than doubled on favorable conditions in the distillates market,” Slifka said. “By contrast, the crude oil market remained challenged in the second quarter, as tight price differentials continued to favor imports over rail-transported crude from the mid-continent. The impact of this environment on our fixed costs continued to negatively affect our crude oil product margin.”

Gross profit was $129.3 million for the second quarter of 2016, compared with $144.2 million for the second quarter of 2015. GDSO segment product margin was $116.3 million versus $98.3 million in the second quarter of 2015, primarily attributable to improved gasoline margins, the June 2015 Capitol Petroleum Group acquisition, expansion of Global’s leased portfolio, including the addition of 22 sites in April 2016, and the opening for business of certain raze and rebuild projects and new-to-industry sites. Wholesale segment product margin was $32.8 million, compared with $60.9 million in the second quarter of 2015, as favorable market conditions in wholesale gasoline and distillates were more than offset by negative crude oil product margin of $9.6 million. The crude oil margin primarily reflected tighter margins in crude oil; the negative impact of fixed costs including contracted barges, pipeline commitments and railcar leases; and the absence of logistics nominations from one particular contract customer. Due to the absence of nominations by that customer, specifically in the second quarter, the Partnership expects additional revenue of approximately $8 million related to the take-or-pay nature of the contract by year-end 2016. Commercial segment product margin was $5.5 million in the second quarter of 2016, compared with $7.0 million for the same period in 2015, primarily due to a decrease in bunkering activity.

Sales for the second quarter of 2016 were $2.1 billion, compared with $2.7 billion for the same period in 2015, primarily reflecting lower commodity prices. Wholesale segment sales were $1.1 billion, compared with $1.5 billion for the second quarter of 2015. Sales in the GDSO segment were $916.7 million versus $1.0 billion for the same period in 2015. Commercial segment sales were $156.4 million, compared with $191.2 million for the second quarter of 2015.

Wholesale segment volume was 758.2 million gallons in the second quarter of 2016, compared with 825.5 million gallons for the same period of 2015, primarily due to a decline in crude oil. Volume in the GDSO segment was 403.6 million gallons for the second quarter of 2016, compared with 376.9 million gallons in the second quarter of 2015, primarily attributable to the Capitol Petroleum transaction as well as expansion of the Partnership’s leased portfolio and the opening for business of certain raze-and-rebuilds and new-to-industry sites. Commercial segment volume was 115.3 million gallons, compared with 107.0 million gallons for the second quarter of 2015.

Combined product margin, EBITDA, Adjusted EBITDA, and DCF are non-GAAP (Generally Accepted Accounting Principles) financial measures, which are explained in greater detail below under “Use of Non-GAAP Financial Measures.” Please refer to Financial Reconciliations included in this news release for reconciliations of these non-GAAP financial measures to their most directly comparable GAAP financial measures for the three and six months ended June 30, 2016 and 2015.

Recent Developments

• Global’s Board of Directors announced a quarterly cash distribution of $0.4625 per unit, or $1.85 per unit on an annualized basis, on all of its outstanding common units for the period from April 1 to June 30, 2016. The distribution will be paid August 12, 2016 to unitholders of record as of the close of business on August 8, 2016.
• The Partnership completed the sale-leaseback of certain gasoline stations and convenience stores located in New England to a premier institutional real estate investor for a total purchase price of approximately $63.5 million. The proceeds from the transaction were used to reduce debt under the Partnership’s revolving credit agreement.
• Global entered into a Purchase and Sale Agreement with Mirabito Holdings, Inc. of Binghamton, NY to sell to Mirabito 31 non-strategic gasoline stations and convenience stores located in New York and Pennsylvania for a cash purchase price of approximately $40.0 million together with term supply contracts.
• In April, Global expanded its gasoline station and convenience-store network in Western Massachusetts with the addition of 22 leased retail sites.

Business Outlook

“With the completion of the sale-leaseback transaction and progress related to the planned disposition of non-strategic sites, we are successfully executing on our strategy to optimize our assets, reduce debt, and provide additional flexibility to invest in our businesses,” Slifka said.

Global affirms its outlook for full-year 2016 EBITDA in the range of $170 million to $200 million, which guidance excludes the gain or loss on the sale and disposition of assets and any impairment charges. The Partnership’s guidance and future performance are based on assumptions regarding market conditions such as the competitive crude oil market, business cycles, demand for petroleum products and renewable fuels, utilization of assets and facilities, weather, credit markets, the regulatory and permitting environment and the forward product pricing curve, which could influence quarterly financial results. The Partnership believes these assumptions are reasonable given currently available information and its assessment of historical trends. Because Global’s assumptions and future performance are subject to a wide range of business risks and uncertainties, the Partnership can provide no assurance that actual performance will fall within guidance ranges.

About Global Partners LP

A publicly traded master limited partnership, Global is a midstream logistics and marketing company that owns, controls or has access to one of the largest terminal networks of petroleum products and renewable fuels in the Northeast. Global also is one of the largest distributors of gasoline, distillates, residual oil and renewable fuels to wholesalers, retailers and commercial customers in New England and New York. The Partnership is engaged in the transportation of crude oil and other products by rail from the mid-continental U.S. and Canada to the East and West Coasts for distribution to refiners and others. With approximately 1,500 locations, primarily in the Northeast, Global also is one of the largest independent owners, suppliers and operators of gasoline stations and convenience stores. Global is No. 276 in the Fortune 500 list of America’s largest corporations. For additional information, visit www.globalp.com.