Suburban Propane Partners, L.P. Q4 FY2025 earnings call

• Fiscal 2025 was an outstanding year with propane volumes up nearly 6% due to strong demand from normal winter weather, hurricane aftermath, and acquisitions.
• Acquired and integrated a propane business in New Mexico and Arizona, and later acquired two businesses in California.
• Created a dedicated sales and business development team for weather-sensitive propane verticals.
• Secured renewable propane supply and exceeded 2 million gallons in sales, with expansion into new markets.
• Entered a multiyear partnership with NASCAR and Speedway Motorsports.
• Implemented operational improvements at RNG facility in Stanfield, AZ, and expanded RNG management team.
• Launched an at-the-market equity program, raised $23.5 million, used proceeds for acquisitions, growth projects, and debt reduction.
• Undertook a technology modernization initiative to simplify operations and improve customer experience.

In the propane business, retail propane gallons sold in fiscal 2025 were 400.5 million gallons, an increase of 5.9% compared to the prior year. Adjusted EBITDA for fiscal 2025 was $278 million, with a $28 million or 11.2% increase compared to the prior year. For RNG operations, at the Stanfield, Arizona facility, operational improvements were implemented, but revenues faced headwinds from lower prices for California LCFS credits and federal D3 RINs. The Columbus, Ohio, and Upstate New York RNG facilities are expected to come online in 2026.

• For fiscal 2026, propane operations capital spending is expected to be between $40 million and $45 million.
• RNG projects capital spending is expected to range between $30 million to $50 million, with spending concentrated in the first half of the fiscal year.
• The RNG facility in Upstate New York is expected to qualify for 30% investment tax credits under the Inflation Reduction Act, potentially earning $7 million to $9 million in tax credits.

• Weather conditions can impact propane demand.
• Fluctuations in commodity prices for propane can affect margins.
• Regulatory changes related to LCFS credits and D3 RINs can impact RNG operations.
• Operational challenges in RNG production, such as downtime and extreme weather affecting facilities.

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