World Fuel Services Corporation

Ladies and gentlemen, thank you for standing by and welcome to the World Fuel Service's third quarter 2021 earnings conference call. My name is Andrew and I'll be coordinating the call this evening. During the presentation, all participants will be in only mode. After the speaker's remarks, there will be a question and answer session. Instructions on how to ask will be given at the beginning of the Q&A session. If at any time during the conference you need to reach an operator, please press star zero. As a reminder, this conference is being recorded. I would now like to turn the conference over to Mr. Glenn Clevitz, WorldFuel's Vice President, Treasurer, and Investor Relations. Mr. Clevitz, you may begin your conference.

Thank you, Andrew. Good evening, everyone, and welcome to the WorldFuel Services Third Quarter 2021 Earnings Conference Call. I'm Glenn Clevitz, and I'll be doing the introductions on this evening's call alongside our live slide presentation. This call is also available via webcast. To access this webcast or future webcasts, please visit the World Fuel Services website and click on the webcast icon. With us on the call today are Michael Kasbar, Chairman and Chief Executive Officer, and Ira Burns, Executive Vice President and Chief Financial Officer. By now you should have all received a copy of our earnings release. If not, you can access the release on our website. Before we get started, I would like to review WorldFuel's safe harbor statement. Certain statements made today, including comments about WorldFuel's expectations regarding future plans and performance, are forward-looking statements that are subject to a range of uncertainties and risks that could cause WorldFuel's actual results to materially differ from the forward-looking information. A description of the risk factors that could cause results to materially differ from these projections can be found in WorldFuel's most recent Form 10-K and other reports filed with the Securities and Exchange Commission. WorldFuel assumes no obligation to revise or publicly release the results of any revisions to these forward-looking statements in light of new information or future events. This presentation also includes certain non-GAAP financial measures as defined in Regulation G. A reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures is included in WorldFuel's press release and can be found on its website. We'll begin with several minutes of prepared remarks, which will then be followed by a question and answer period. As with prior conference calls, we ask that members of the media and individual private investors on the line participate in listen-only mode. At this time, I would like to introduce our Chairman and Chief Executive Officer, Michael Kasbart.

Thank you, Glenn, and good evening to everyone listening on the phone and on the webcast. I hope that you are all doing well while continuing to stay safe and healthy. We obviously have some very exciting news to talk about this evening regarding the definitive agreement to acquire the Flyers Energy Group that we just announced. which Ira and I will cover after Ira's financial review. Flyers is an ideal addition to our U.S. land business and will significantly contribute to the scale and density of our commercial and industrial platform in the U.S. More about this exciting news later. Overall, our business performed well in the third quarter as we witnessed some encouraging trends, primarily in our aviation segment, where commercial passenger activity continued to increase both domestically with activity climbing to more than 80% of its pre-pandemic levels, and internationally, where easing travel restrictions have led to increased activity in Europe and Asia. We continue to make strides in expanding our aviation service network and comprehensive offering. In marine, market conditions remain challenging in the third quarter, compounded by the fact that we did not have the benefit from certain seasonal business we have generated in prior years. However, we have begun seeing improvement in certain markets, such as the cruise sector, where activity continues to recover with more ships sailing monthly. We also recently concluded a term LNG bunker supply agreement on the U.S. West Coast, demonstrating our ability to provide a broader range of energy solutions and cleaner marine fuels. And lastly, we are continuing to build a stronger foundation in our land segment by remaining laser-focused on enhancing our core product and service offerings and meeting the evolving demands of our customers throughout the world, including recently developing a multi-year carbon offset program for a large cruise operator, facilitated by World Connect, our gas, power, and sustainability business. In addition to continuing to invest in the commercial and industrial ground fuels market in North America, our inorganic focus will also include World Connect activities to help our growing global base, customer base, effectively navigate the energy transition. I will now turn the call over to Ira for his financial review.

Thank you, Mike. Before I walk through our third quarter results, please note that the following figures exclude the impact of non-operational items. netting only $1 million this quarter, which principally relate to acquisition, divestiture, and restructuring-related adjustments and expenses. These items are highlighted in our earnings release. Also, comparisons to the third quarter of 2020 will exclude the operating results of multi-service that was sold at the end of last year's third quarter. To assist you in reconciling results published in our earnings release, the breakdown of the non-operational items can be found on our website on the last slide of today's webcast. Now let's continue with third quarter financial highlights. Adjusted third quarter net income and EPS were $23 million and 36 cents per share, respectively. Adjusted EBITDA for the third quarter was $63 million. And volume continued to improve across all of our business segments as markets continued to recover, with third quarter consolidated volume up 9% sequentially and 23% year over year. We generated positive cash flow from operations of $83 million during the third quarter, contributing to our net cash position of $282 million. This was our 14th consecutive quarter of positive operating cash flow, totaling approximately $1.4 billion over such a period. And now I'm going to get into our financial results in greater detail, so let's jump back to volume. Aviation segment volume was 1.7 billion gallons in the third quarter, an increase of 21% sequentially, consistent with the growth forecast provided on our second quarter call, and an increase of 63% compared to the third quarter of 2020. We experienced volume increases both sequentially and year-over-year in our commercial passenger and business and general aviation operations. The year-over-year volume increases resulted from the continuing recovery in air travel, and the sequential increase was driven by both the general economic recovery and traditional summer seasonality. Volume in a marine segment for the third quarter was 4.8 million metric tons, an increase of 4 percent sequentially and 9 percent year-over-year. We experienced increases in core resale activity during the third quarter in marine, and although we may see some disruption from the supply chain bottlenecks at certain ports, marine activity should benefit from the ongoing economic recovery, possibly higher fuel prices as well, as we head into 2022. Our land segment volume was 1.3 billion gallons or gallon equivalents during the third quarter. That's practically flat sequentially, but an increase of 4% year-over-year. The year-over-year volume increase spanned across much of our North American retail and commercial and industrial operations, and our connect business continues to pose solid year-over-year growth driven by an increasing demand for our energy management and sustainability offerings. Consolidated volume for the third quarter was 4.2 billion gallons or gallon equivalents. an increase of 9% sequentially and 23% year over year, driven by the significant rebound in aviation activity. Consolidated gross profit for the third quarter was $197 million, an increase of 7% sequentially and 3% year over year. Our aviation segment contributed $113 million of gross profit in the third quarter. That's up 28% sequentially and 19% year over year, As previously noted, the year-over-year increase in gross profit generally related to the continued rebound in core activity, partially offset by the reduction in government-related activity in Afghanistan, where, as you already know, all activity ceased upon the final troop withdrawal during the third quarter. Our team in Afghanistan did an amazing job over the past 10 years. All of our employees made it out of the region safely, and we will be forever grateful for their dedication and valuable contribution to our business. most particularly Derek McRobbie and his team, who stuck it out until the very end, supporting the evacuation missions on the ground at Kabul Airport. As we look ahead to the fourth quarter, we expect aviation gross profit to decrease sequentially, principally driven by the traditional seasonal decline in activity and the conclusion of activity in Afghanistan. However, we expect continued increases in both volume and gross profit on a year-over-year basis. The marine segment generated third quarter gross profit of $22 million, down 4% sequentially and 31% year-over-year. Despite the year-over-year increase in volume in marine, gross profit declined as a result of lower margins in our core business driven by continued competitive market pressure and the loss of some seasonal business we had benefited from in the past. As we look ahead to the fourth quarter, we expect marine gross profit to modestly increase both sequentially and year-over-year, driven by some signs of improving marketing conditions in our core business. Our land segment delivered gross profit of $63 million in the third quarter, a seasonal decline of 15% sequentially, and a decline of 4% year-over-year when excluding multi-service from last year's results. We experienced a year-over-year decline in gross profit from our core commercial and industrial business activity in North America, driven principally by current supply chain disruptions, which had temporarily eroded margins due to increased transportation costs. We also experienced a year-over-year decline from government-related activity, again, as a result of the conclusion of activity in Afghanistan. These declines were offset by increases in the North American retail business and power activity in Europe, where related markets have been strengthening. Looking ahead to the fourth quarter, we anticipate land growth's profit will increase, principally related to seasonal activity in the UK. Core operating expenses, which exclude bad debt expense, were $153 million in the third quarter. Looking ahead to the fourth quarter, we expect core operating expenses, excluding bad debt expense, to be in the range of $156 to $160 million. After experiencing elevated losses during the front end of the pandemic, we continue to manage our broad portfolio of receivables exceptionally well, with bad debt expense near zero in the third quarter. Again, adjusted EBITDA was $63 million in the third quarter. That's up 6% sequentially, but down slightly compared to last year's third quarter. Interest expense in the third quarter was $10 million, which is effectively flat year over year, and fourth quarter interest expense should be about the same in the range of $10 to $11 million. And our adjusted effective tax rate for the third quarter was just under 31%, and we expect the fourth quarter effective tax rate to be about the same. Despite rising prices and volume, we generated $83 million of operating cash flow during the third quarter, our 14th consecutive quarter of positive operating cash flow. This further strengthened our balance sheet, resulting in a net cash position of $282 million at quarter end and a total cash position of nearly $800 million. We also repurchased 750,000 shares of our common stock during the quarter, demonstrating our continued commitment to drive additional shareholder value through both buybacks and dividends. Before we move on to discussion of the Flyers energy acquisition, let's sum up the quarter. Aviation's continuing recovery contributed to a strong quarter, and we see continued growth opportunities across all three of our business segments as the economic recovery continues. We generated strong operating cash flow in a sharply rising price environment, contributing to an ending cash position of nearly $800 million, setting us up well for the Flyers acquisition, but also for the additional growth opportunities ahead. The world around us is changing rapidly, and we're excited about our organic and inorganic growth opportunities that will support our customers' evolving needs throughout the world. And now I'm going to turn the call back to Mike to introduce the flyers acquisition discussion.

Thanks, Ira. As we've been repeating for some time now, we've been sharpening our portfolio of business activity, strategically shedding non-core activities, And we indicated that we were focused on investing in and growing our core commercial and industrial land business in North America, as well as our increasingly relevant natural gas, power, and sustainability platform. With today's announcement of the signing of a definitive agreement to acquire Flyers Energy, we are taking a very significant step in this direction. This acquisition will add significant scale and density to our North American land platform. Very excited about it, and we think that it's a watershed turning point for the company that will position us for growth for many years to come. Ira will now review the transaction in greater detail. Thanks again, Mike.

As outlined in our press release on the acquisition, the purchase price for the acquisition will be approximately $775 million, of which $675 million will be paid at closing in cash or although up to $50 million of such amount could be paid in equity at our option. The remaining $100 million will be paid in two equal $50 million installments upon the first and second anniversaries of closing. The cash portion of the upfront purchase price will principally be paid with cash on hand. Again, we had $796 million of cash at the end of September, with the remainder to be drawn under our revolving credit facility. The transaction is expected to be significantly accretive to margins, earnings per share, and cash flow, and is expected to close within 60 to 90 days, subject to customary closing conditions, including regulatory approval. Flyers, which has been very successfully operated by the Dwelly family for decades, is based in Auburn, California, and distributes diesel, renewable fuels, lubricants, and gasoline to more than 12,000 small to medium-sized commercial and industrial and retail customers spanning 20 states. Estimated volume for 2021 is 850 million gallons, with forecasted 2021 revenue and gross profit of $2.4 billion and $135 million, respectively. We really look forward to welcoming the talented and experienced Flyers team to WorldFuel. They're a great bunch of people. Flyers is a national fleet fueling network consisting of approximately 200 card lock sites, which are operated by Flyers, and an additional 200 third-party sites, which are part of their national network. Cardlocks are effectively unmanned fuel sites serving commercial trucking fleets, providing 24-hour access, 365 days per year. Flyers operates a stable and rateable low-cost business model with a loyal and growing commercial customer base. While their cardlock operation is clearly their largest segment, Flyers also operates a small retail distribution business which will expand the World Fuel Network to more than 2,000 retail locations nationwide, and they also operate a wholesale diesel and lubricants business. As we have stated repeatedly over time, we have been strategically focused on sharpening our portfolio of activities in our land segment. Just two years ago, before the pandemic began, our land segment was fragmented without significant enough scale in our core activities, that being our North American commercial, industrial, and retail activity, and our growing gas power and sustainability activities. These combined business activities represented less than 50 percent of total land gross profit back in 2019 before the start of the pandemic. If you fast forward to our new run rate upon closing this transaction, these core activities will represent more than 80 percent of land gross profit, and the overall land business will represent a greater percentage of our global franchise, driving greater scale synergies and operating leverage. The transaction will also expand our North American platform to more than 30,000 commercial and industrial customers, customers to whom we can support with options to purchase lower carbon renewable fuels. Flyers already distributes renewable diesel at several cardlock locations, and we will look to continue growing renewable fuels distribution across our combined networks. Speaking of our combined networks, this transaction will provide our North American land business with a national platform which significantly improves scale. We will be significantly expanding our Cardlock network, which is a low-cost operating model driving above-average returns, accretive to our overall returns in our land business. The transaction will provide regional density in California, Arizona, and Nevada, and will strengthen our density in the Rockies and Midwest. The transaction also brings us a truly best-in-class management team, poised to join with us to drive further growth and significantly enhance our land segments shareholder value contribution. Again, Flyers is a stable, rateable, and growing business with a low-risk portfolio of customers and a seasoned management team with significant industry experience, which will strengthen and expand our North American land platform. The transaction will also heighten our opportunity to participate in the growing low-carbon renewables market. We also believe that there remains a strong pipeline of additional investment opportunities which can drive even further growth and operating efficiencies down the road. Flyers will also improve the overall tax efficiency of our company by adding substantial U.S. profitability to our consolidated results. And this strategic transaction will also drive a step change in the rateability of our global business, making our results easier to understand and forecast. This is especially true in our land business, which we know hasn't always been the easiest to understand. Now there will be fewer moving parts, more rateability, and improving margins, contributing significantly to earnings per share and cash flow, a very exciting and important step forward in our longer-term growth journey. While this will indeed be the largest acquisition in the history of our company, the substantial cash flow we have generated over the past three to four years, combined with the cash generated from the sale of multi-service last year, allows us to complete this transaction largely with cash on hand, leaving us with a strong and liquid balance sheet post-acquisition to support organic growth as well as further investments in core business activities, principally our North American land and global gas power and sustainability business, providing a more exciting experience for our global team of nearly 5,000 professionals and driving greater value to our shareholders. Thank you. We'll now turn the call over to Andrew, our operator, to open it up to questions and answers. Thanks again.

Thank you. At this time, I would like to remind everyone, if you would like to ask a question, please press star followed by the one key on your telephone keypad. You will hear a three-tone prompt to acknowledge your request. If your question has been answered and you would like to withdraw your registration, please press the pound key. If you are using a speakerphone, please lift your handset before entering your request. As a reminder, we would appreciate it if the participants would limit themselves to three questions with associated follow-ups. We will pause for just a moment to compile the Q&A roster. And our first question comes from the line of Ben Nolan with Stifel.

Yeah, thanks. I'll do my three, and then I'll turn it over to Ken, and I'll probably be back in for more.

Ben, you could go beyond three. Feel free. Ken's joining us, so ask whatever you think is relevant, and we'd be happy to answer.

Okay. All right. Fair enough. Thanks, Ira. So we'll start with this acquisition, obviously a big deal for you guys. The $135 million of gross profit It looks like a pretty good multiple relative to the $775 million acquisition price. I'm curious how much of that we should think falls to the bottom line of that $135 million. How are you thinking about the net effect relative to maybe sort of how we normally think of the net spread for WorldFuel?

Sure. So you're looking for EPS or EBITDA or both?

I'm not going to say no to anything.

Since you're our first customer today, we'll try to serve you well. So, look, as I mentioned earlier, we expect this transaction to be significantly accretive to earnings. I would say that translates to at least 55 to 65 cents of accretion in the first 12 months. which, by the way, includes a fairly healthy dose of amortization related to the deal, as well as depreciation. And I believe the accretion should grow 15% to 20% easily beyond that in year two. I say at least because I think we have a solid shot of outperforming that. EBITDA is somewhere in the range of $85 million or so. It should be a little bit more in 2022. The first year cash-on-cash return should be close to 10%, possibly a little higher. So they've got – flyers have a very strong cash flow profile, so that will contribute handsomely to, you know, what's been a pretty strong profile on the world fuel side. That's one thing we've done very well. And it should be even recruited to our return on invested capital, which has been a bit subpar recently. So it should help improve that as well going into next year. So I think that –

That's perfect. Just to drill down a little bit on that, if I could, when thinking about that accretion, EBITDA, well, specifically net income, I suppose, and EBITDA, how much in the way of synergies are you sort of baking into that? And then also you mentioned that this should help your tax position. So how much of the – of the accretion is, if any, that you're talking about here, is a function of sort of a lower tax base?

Great question, but, you know, very smart second question as well. So, you know, I'll start with that. You know, one of the issues we've had that's driven our tax rate up for, you know, for the past few years under tax reform is is the fact that we haven't really been a big income generator in the United States. And with all the impacts of that change in tax law, you may remember you've been with us long enough, Ben, our rate used to be in the teens and went up to the mid-30s, and now this quarter it was 31. So the amount of additional income generated that we're going to be achieving in the U.S. here is so significant that on top of what would be the core tax rate for U.S. profitability, let's put it this way, there's a couple, maybe two, three million dollars of positive impact to our global effective tax rate, which is a very high-level estimate. So say, maybe three, four cents a share of the accretion relates to that. In terms of synergies, going to your first question, Look, Flyers operates their business very well. I've done diligence on 100-plus companies in my life, and they're all different. They operate today on industry standard software. Their CEO used to be the CFO. I think that's always a good progression. and knows his numbers really well. So it was pretty impressive to see how well organized those guys are. So we're not making any rash changes initially. They're going to continue operating on their platform, which means we were very conservative on synergy assumptions in the early innings. A little bit of cost savings there. some benefit from putting our teams together. They buy better than us on the West Coast. We buy better than them in the eastern half of the country, and that should drive some synergies on the supply side. But literally, there's only a few million dollars of synergies built in to our 2020 forecast, and the impact of that on accretion is just maybe two, three cents a share.

I think the only thing I want to add to it, perhaps it's obvious, but maybe not, but really the importance of scale and density and national coverage. So that we know from certainly our other businesses, both the focus and the presence is critical. So We are sharpening our focus. It's probably the most powerful word in business is the ability to focus and, of course, being able to execute. And, you know, we've got with this addition, the combination, it's really a perfect fit. So we're really excited about it in terms of the addition of the management team. And, you know, today, of course, you have, a lot going on in the world. You've got supply chain disruptions. You've had freight issues, driver labor issues. So resiliency of supply is a critical issue. From some of the CEOs that I talk with, they basically said, listen, I'm spending more time thinking about energy than I really ever intended. So The addition of the distribution assets, of the workforce, of the footprint, our ability now to be able to pull from various different locations, the localization and the regionalization, and our ability to distribute and respond to outages gives us tremendous resiliency. And that's really the business we're in. I mean, honestly, we're agnostic. to the molecule or the electron. Really, our capability is the ability to distribute, underwrite. Someone's got to buy it. Someone's got to sell it. You've got to deal with the operational side of it, the quality control. So getting a larger customer base, all of them need to understand what their lower carbon, zero carbon, and actually negative carbon journey is. And we do that with our WorldConnect. business in terms of baselining on emissions, reducing consumptions, giving them procurement advisory, buying better, buying less, deploying renewables, and the renewables are coming from everywhere. And then, of course, dealing with offsets with whatever is left over. So we're really excited about the Synergy side of it. It's been a long time coming, and I have to give Ira a lot of credit for it. He He pulled his 5-iron out and was 200 yards on a par 3 in a 10-foot putt. So he may get a birdie on it, but I don't know. Do you golf, Ira?

I'm going to start golfing now if those stats are going to be that impressive. What else can we help you with, Mr. Nolan?

All right. So actually related to what you were just talking about there, Mike, we certainly are seeing labor shortages everywhere today. You look, people are talking about driver shortages. You mentioned sort of it was one of the challenges in your land business was supply chain bottlenecks. I'm curious, especially, you know, we don't know how long this is going to last, but as you're looking out into the fourth quarter and into next year, how big of a challenge is that? Are you struggling to find labor and connecting the dots for your own network and it's already a relatively low-margin business. How should we think about the potential for inflation?

Listen, there's certainly inflationary pressures. The ECB today was pretty aggressive in terms of them being temporary and working their way through the system. We believe that that will... be true, that it will work its way through the system. We've been fortunate. Our team has done a phenomenal job. Our physical operations team and our talent teams collectively have really done a good job and responded to what was really an emergency. So it's, you know, giving drivers a career, not a job. You know, they are The face of the company so they are a critical part of our business And I think that we're in far better shape now and certainly with the Flyers group. I think you know scale matters But to answer your question had an impact it will probably spill over into q4 and I personally believe that it will work its way through the system and sort of become part of COGS, but perhaps we should regain our margin at some point. I know that Ira would like to make a comment.

Yeah, I'm just excited about talking today. Yeah, Ben, that probably cost us another couple million or so, which affected LAN's results in the third quarter. I think our team has done a great job on managing that, and I believe that is going to get better, so the impact should be lower in Q4. We're at 95% of driver capacity today, so we've had to pay a bit more, but we've got the guys on the road doing their jobs. So it had a bit of an impact in Q3, but I think we're managing through that well, and that impact should be smaller in Q4 than it was in Q3.

Okay, perfect. And then lastly for me, and I'll turn it over, but I appreciate this is five questions, but thanks for that. There are obviously another area of chaos at the moment is is energy prices in general, but with huge different tools in different places around the world, especially for things like natural gas, but in all sorts of categories. From time to time, that can either be a tailwind or a headwind for you guys. I'm just curious how we should think about sort of all of the wild swings that we're seeing in energy prices and how how we should think about the impact on world fuel as a function of that.

So, you know, good question. You know, if you look at our company, listen, we came through what was the ultimate stress test of the pandemic. We sell jet fuel to airlines and cruise companies and billions of dollars of receivables, crazy upside-down hedges, and our team performed brilliantly. And, you know, number one job, protect the balance sheet. We came out of it with a stronger balance sheet. So our financial team, our risk team, and really the culture of the organization is such that failure is not an option. So when you look at those stresses and you have the polar vortex, you had gas prices in Europe, our team performs. You know, we respond to it. We sort of thrive on it, to be honest with you. So At the end of the day, we are essentially a risk management business, and we're managing risk for our clients, and that's what we do. So as demand decompresses and you've had supply destruction or basically supply going shut in, you're getting a mismatch. That will straighten itself out. It's... you know, an opportunity for us to, you know, help smooth, you know, those issues out for our clients, and we get paid to do that. So sometimes, you know, we pay a price for it, but generally speaking, that's part of our value add. So it's not a bad thing for our business model. So I don't know if that gives you enough color.

No, it's helpful, and I appreciate it was sort of not a

uh a binary question right it's a it's certainly more ethereal so um but doesn't sound like it's a problem at very least um yeah and then one one last thing on that you know you look at q3 prices were up pretty significantly uh and we still generated uh 83 million dollars of operating cash flow so i think we we actually have you know i think we've always done a good job there but you know we've learned a lot in in these types of environments and we we've uh found better and better ways or more significant ways to impact that particular metric in a rising price environment by just being smart or smarter. It may not always be possible to do that, but we've impressed ourselves in many cases to be able to manage working capital so well so that in a sharply rising environment we weren't using any cash. So that's just another piece of the puzzle that we're always focused on. Sure.

So I have actually two more questions, if it's okay. So going back to the tax question, I hate to go backwards, but on a go-forward basis, do you have any – including the acquisition – Do you have any color as to sort of where you believe the tax rate should be on a consolidated basis?

Yeah, look, you know, every statement I make on that one ends up being proven wrong because there's so many moving parts. But, you know, I think we've done a good job to get ourselves the last couple quarters back down in the 30 neighborhood when we were exceeding that. fairly regularly for a while. I think that's a reasonably fair pre-acquisition assumption for next year. Again, no promises because there's, again, a lot of work left to do to figure out where we stand. We're trying to manage through the whole global tax structure as efficiently as possible. This certainly helps, meaning the flyers acquisition. So I would say 30% would be a fair number, but the flyers acquisition has an opportunity for us to drop back down into the, you know, take us back down into the high 20s, say 28 or so. So if I was going to give you a number now for next year with flyers, I would say, you know, somewhere between 28 and 30. Perfect.

All right, so honest last question for me. So if I look over at slide 15, it's the nice map of the consolidated operational footprint in the United States. and you'd mentioned in the prepared remarks that this was an acquisition that you believe that you can grow, and I think you said both organically and inorganically, but I was hoping that you might be able to frame that in. First of all, just in terms of organic growth opportunities, there are a lot of places on the map where they're just critically underserved, and you can come in and put something in, or is this really more about, okay, you have a lot of mom and pops out there that could sort of be, you know, rolled into the network?

So it's really, this is really a beautiful business in so many different ways. The combined, you know, network with our Tacoma operation and the Flyers Group together, it's over 500 locations that we're marketing to within our network. So there's certainly tuck-ins, and we're intending to focus on that consistent with our focus on the UFC and I business. But beyond that, it is a fuel card, and there's nothing stopping us really from marketing the service to local fleets, small and medium-sized local fleets throughout the country. And the fact that we now have a bigger footprint and it fits like a glove within our existing footprint It gives us great capability to grow organically, which we've been doing from the Northwest, as well as through acquisitions. We also pick up for locations in Florida. So we're excited about it. And I think before, I'm going to just skip over, if you don't mind, to our retail business. I touched on it, you know, from our retail, you know, some 100 sites, Certainly the tank wagon, the full truck, and the wholesale and the lubricants business. Now, all of these are core businesses. So that is the beauty of this addition to our company is that it is a perfect fit into our core activities. It gives us location in various parts of the market. It has scale. We have density, hub and spokes. So the positive attributes to this are really significant. It's really a perfect fit. But that card lock business, as Iris commented on, is a great retail. It's an end-user model. A lot of convenience there, low cost. So a lot of positive attributes to it.

Yeah, the only thing I'd add to that, you know, Ben, in terms of, you know, our continuing ability to grow, there are 5,000 card locks or so in the country, and a lot of them are in, you know, this very fragmented, you know, 5, 10, you know, a pop. You know, Flyers has done a very good job over time, you know, finding those opportunities, and now joining with them, I think we'll have, continue to have a good opportunity to do that. There's 3,000 distributors around the country. Obviously, all of them smaller than we are, beyond the card locks. There's still a lot of opportunities, and we'll be very careful about finding the ones that make sense in terms of the footprint that we'll have effective the first quarter of 22. And there will certainly be synergy opportunities going forward, and we'll obviously be talking about that in the future.

All right. Sounds good. I will stop there finally. I'm good. I'm burned out. All right.

Thanks, guys. Thank you. Mr. Kaspar, there are no further questions at this time.

Thank you. Thank you very much. Well, listen, I just want to thank everybody for joining us today. As you can tell, we're pretty excited. It's an exciting time. for World Fuel for World Connect. I want to welcome the Flyers Group. I hope you're listening and look forward to meeting you all and welcoming you to the company. We feel really good about where we are. We feel really good about where the company is. We've got a network that's virtually impossible to replicate, a global network. Our business commercial general and business aviation network is just incredible. Our global marine business has got, you know, a position we're following in the footprints of aviation in terms of our physical capability and, you know, service offering. You know, our energy management, gas power and sustainability business is growing step by step. This isn't something that we just did yesterday because, you know, it was in vogue. You know, we invested in sustainable aviation fuel 10 years ago. We're one of the few companies that, you know, have, you know, a source of that and will continue to invest in it. Hydrogen, we're agnostic, as I said previously, in terms of the logistics side of it. You know, on the power side, you know, we're either... acting as a broker or merchant for 10,000 gigawatts of power, 185,000 MMBTUs of natural gas. So this is a company that's on the move. This is a company that is extremely well positioned for where the market is going. The trend is our friend, but we believed in this from the beginning, and it was always following the marketplace. So Listen, I got a degree in environmental science in 1977, so greenhouse gases is what the heck I studied. And I thought solar power was great. It was just 40 years too early. But any case, we're here. It's happening. We're excited about it. We're going to participate in it fully. You know, we've been patient, but I think the time is now for us. So we're excited. Appreciate the support of our investors and certainly appreciate, you know, the passion that of all the world fuelers, and welcome to the Flyers Energy Group. Thanks, everybody, for listening.

Thanks. Ladies and gentlemen, that does conclude the conference call for today. We thank you for your participation and ask that you please disconnect your lines.