Sprague Resources Reports Third Quarter 2020 Results

11/5/20

PORTSMOUTH, N.H., Nov. 05, 2020 (GLOBE NEWSWIRE) -- Sprague Resources LP (NYSE: SRLP) today reported its financial results for the third quarter ended September 30, 2020.

Third Quarter 2020 Highlights

  • Net sales were $390.5 million for the third quarter of 2020, compared to net sales of $582.6 million for the third quarter of 2019.
  • GAAP net income was $9.7 million for the third quarter of 2020, compared to net loss of $9.7 million for the third quarter of 2019.
  • Adjusted gross margin* was $56.6 million for the third quarter of 2020, compared to adjusted gross margin of $51.7 million for the third quarter of 2019.
  • Adjusted EBITDA* was $20.2 million for the third quarter of 2020, compared to adjusted EBITDA of $13.9 million for the third quarter of 2019.

"Sprague's Adjusted EBITDA increased by 50% over last year as our extensive storage assets enabled us to capture attractive contango opportunities," said David Glendon, President and Chief Executive Officer.

Refined Products

  • Volumes in the Refined Products segment decreased 6% to 245.5 million gallons in the third quarter of 2020, compared to 261.4 million gallons in the third quarter of 2019.
  • Adjusted gross margin in the Refined Products segment increased $7.0 million, or 21%, to $40.4 million in the third quarter of 2020, compared to $33.4 million in the third quarter of 2019.

“While demand destruction associated with the pandemic reduced volumes in transportation fuels, margins improved as the market structure resulted in gains in the value of our inventory," stated Mr. Glendon.

Natural Gas

  • Natural Gas segment volumes decreased 15% to 10.4 million Bcf in the third quarter of 2020, compared to 12.2 million Bcf in the third quarter of 2019.
  • Natural Gas adjusted gross margin decreased $3.1 million, or 84%, to $0.6 million for the third quarter of 2020, compared to $3.7 million for the third quarter of 2019.

"Natural Gas results declined as our commercial and industrial customers curtailed usage due to the pandemic and low volatility limited optimization opportunities," added Mr. Glendon.

Materials Handling

  • Materials Handling adjusted gross margin increased by $0.7 million, to $13.8 million for the third quarter of 2020, compared to $13.1 million for the third quarter of 2019.

"Materials Handling increased primarily due to incremental tank rentals at our Kildair facility," concluded Mr. Glendon.

2020 Guidance

Sprague's full year Adjusted EBITDA target remains unchanged at $105 to $120 million.

Quarterly Distribution

On October 26, 2020, the Board of Directors of Sprague’s general partner, Sprague Resources GP LLC, announced a cash distribution of $0.6675 per unit for the quarter ended September 30, 2020, equivalent to the previous quarter. Sprague also announced that Sprague Resources Holdings LLC, a wholly owned subsidiary of Axel Johnson Inc. and the owner of Sprague’s General Partner will receive cash in respect of the incentive distribution rights payable in connection with the distribution for the third quarter of 2020. The distribution will be paid on November 12, 2020 to unitholders of record as of the close of business on November 6, 2020.

About Sprague Resources LP
Sprague Resources LP is a master limited partnership engaged in the purchase, storage, distribution and sale of refined petroleum products and natural gas. Sprague also provides storage and handling services for a broad range of materials.