Suburban Propane Partners, L.P.

Good morning, ladies and gentlemen, and welcome to the Suburban Propane Partners Third Quarter Earnings Conference Call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Thursday, August 8, 2024. I would now like to turn the conference over to Davin D'Ambrosio, Vice President and Treasurer. Please go ahead.

Great. Thank you, Chris. Good morning, and thank you for joining us for our fiscal 2024 third quarter earnings conference call. I'm here with Mike Stavala, our president and chief executive officer, Mike Coogland, our chief financial officer, and Steve Boyd, our chief operating officer. This morning, we will review our third quarter financial results along with our current outlook for the business. Once we've concluded our prepared remarks, we will open the session to questions. Our conference call contains forward-looking statements within the meeting of Section 21E of the Securities Exchange Act of 1934, as amended, relating to the partnership's future business expectations and predictions, financial condition, and results of operations. These forward-looking statements involve certain risks and uncertainties. We have listed some of the important factors that could cause actual results to differ materially from those discussed in such forward-looking statements. which are referred to as cautionary statements in our earnings press release, which can be viewed on our website at suburbanpropane.com. All subsequent written and oral forward-looking statements attributable to the partnership or persons acting on behalf of are expressly qualified in their entirety by such cautionary statements. Our annual report on Form 10-K for the fiscal year ended September 30th, 2023. and Form 10-Q for the period ended June 29, 2024, which will be filed by the end of business today, contain additional disclosure regarding forward-looking statements and risk factors. Copies may be obtained by contacting the partnership or the SEC. Certain non-GAAP measures will be discussed on this call. We have provided a description of those measures, as well as a discussion of why we believe this information to be useful in our Form 8-K, which was furnished to the SEC this morning. Form 8K will be available through a link in the investor relations section of our website. At this time, I'd like to turn the call over to Mike Stavala for some opening remarks. Mike?

Thanks, Davin, and good morning. Thank you all for joining us today. The fiscal 2024 third quarter presented significantly warmer than normal weather and in many areas extreme heat, which followed a winter heating season that was 9% warmer than normal. and lacked sustained cool temperatures in the critical months for heat-related demand. Average temperature for our fiscal 2024 third quarter were 14% warmer than normal, unlike the prior year third quarter, which benefited from colder average temperatures that generated a late burst of demand from our residential customer base. While the warm weather negatively impacted customer demand for heating purposes in the third quarter, we benefited from growth in our counter seasonal customer base. Overall volumes for the third quarter were 8.6% lower than the prior year third quarter. As we have consistently demonstrated in the past, our field operations personnel continue to do an excellent job managing selling prices and leveraging our efficient operating model to help manage costs, which helped mitigate the impact of warmer weather on earnings. For the quarter, Adjusted EBITDA was $27 million, a decrease of $6 million from the prior year third quarter, but in line with our expectations for this shoulder period, despite the warmer weather. In our renewable natural gas operations, during the third quarter, we continued to drive operational excellence, increase feedstock intake and production levels, and grow revenue opportunities. In fact, the operational enhancements we have implemented have resulted in an increase in feedstocks processed, and higher levels of daily RNG injection at our Stanfield facility, reaching a daily peak injection level as high as 1,500 MMBTUs in the quarter. RNG injection for the quarter as a whole averaged around 1,000 MMBTUs per day, as the facility did experience extended periods of limited injection resulting from power outages from severe storms in the area. In addition, revenues in the facility been adversely impacted by lower prices for California LCFS credits and to a lesser extent lower benchmark natural gas prices, but benefited from higher D3 RIN values. Both the Stanfield and Columbus facilities reported higher revenues from tipping fees resulting from increased intake of food, beverage, and other waste feedstocks compared to the prior year third quarter. Additionally, During third quarter, we utilized excess cash flow to acquire two small retail propane businesses in strategic markets in Florida and Nevada for a total investment of nearly $13 million. And we also repaid $10.5 million of outstanding debt under our revolving credit facility. We also continued to advance our capital improvement plans for the installation of RNG upgrade equipment at our Columbus, Ohio facility and the construction of our anaerobic digester facility at Adirondack Farms in upstate New York. As I mentioned on last quarter's earnings call, we expect both facilities to be completed in the second half of calendar 2025. Therefore, despite the challenges resulting from warm weather in fiscal 2024, we continue to execute on our long-term strategic growth plans, which include investing in the growth of our core propane business and building out our renewable energy platform, while maintaining a disciplined approach to deploying additional capital in order to foster the growth and strength of the balance sheet. In a moment, I'll come back for some closing remarks. However, at this point, I'd like to turn the call over to Mike Coogan to discuss the third quarter in more detail.