Suburban Propane Partners, L.P. Q1 FY2026 earnings call

• The fiscal 2026 heating season started well with colder weather in Northeast, Mid-Atlantic, and Midwest driving heat-related demand, offsetting warmer temps in the West and prior year hurricane-related volumes.
• Volumes sold increased over 4% and adjusted EBITDA rose nearly 11% due to heat-related demand, customer base growth, and retention initiatives.
• RNG operations saw enhanced average daily injection at the Stanfield, Arizona facility, commissioning of a new anaerobic digester in NY, and progress on gas upgrade in OH; RNG capital projects on track for completion by end of second quarter with injections starting in the second half of the fiscal year.
• Acquired two propane businesses in CA, invested $24M, and refinanced 2027 senior notes at attractive rate and ten-year maturity. Excluding mark-to-market adjustments, net income was $46.6 million ($0.70 per common unit) vs $38 million ($0.59 per common unit) prior year; adjusted EBITDA $83.4 million, up 10.8%.
• Commodity-wise, average wholesale propane price was $0.66 per gallon, down 14% from prior year; gross margin up $16.1 million or 7.2% due to higher volumes and unit margins.
• Expenses up $5 million or 3.4% due to payroll, overtime, and variable operating costs. Net interest expense flat. Total cap ex $19.8M, $13M for propane, $6.8M for RNG.
• Balance sheet: borrowed $115.4M under revolver, used proceeds for working capital, RNG projects, acquisitions, and note refinancing; leverage ratio improved to 4.57 times from 4.99 times.

Retail propane gallons sold totaled 110.2 million gallons for the first quarter, an increase of 4.2% compared to the prior year. The increase was driven by colder temperatures in the Eastern US boosting heat-related demand and organic customer base growth. Adjusted EBITDA for the first quarter was $83.4 million, an increase of $8.1 million or 10.8% compared to the prior year. In RNG operations, average daily RNG injection in the first quarter increased both sequentially and year over year, with commissioning of a new anaerobic digester facility in Upstate New York and progress on gas upgrade equipment in Ohio.

• Full-year capital spending estimate for RNG projects remains unchanged at $30 million to $35 million, with spending concentrated in first and second quarters.
• Quarterly distribution declared at $0.0325 per common unit, annualized $1.30, paid on February 10 to unitholders of record as of February 3. Distribution coverage at 2.19 times for trailing twelve-month period ended December 2025.
• Business well positioned operationally and financially to meet increased demand, drive operational enhancements, and execute long-term strategic growth plans.

• Forward-looking statements involve risks and uncertainties. Important factors causing actual results to differ materially from forward-looking statements are listed in the earnings press release and annual report on Form 10-Ks and Form 10-Qs, which can be viewed on the website or obtained from the partnership.

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