Global Partners (GLP) Q3 2026 Earnings Call Transcript

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DATE

Fri, Nov. 6, 2026

CALL PARTICIPANTS

• President and Chief Executive Officer - Eric S. Slifka
• Chief Financial Officer - Gregory Hanson
• Chief Operating Officer - Mark A. Romaine
• Chief Legal officer - Kristin Seabrook

TAKEAWAYS

• Net Income -- $52.4 million, representing $1.26 per diluted common limited partner unit compared with $29 million or $0.66 per unit.
• Adjusted EBITDA -- $122.9 million, compared with $98.8 million, driven by execution across the terminal network and Wholesale business.
• Adjusted Distributable Cash Flow -- $70.3 million, compared with $53.3 million, reflecting the core profitability of the integrated supply chain model.
• Distribution Coverage -- 2.3x, at quarter end, supporting the increase in capital returned to unitholders.
• Quarterly Cash Distribution -- $0.785 per common unit, representing the 20th consecutive quarterly increase.
• Total Sales -- $6.7 billion, compared with $4.7 billion, reflecting shifts in market pricing and segment volumes.
• Combined Product Margin -- $329.1 million, compared with $303.9 million, as increases in Wholesale margins offset declines in the retail segment.
• GDSO Product Margin -- $210.6 million, down $8.3 million primarily due to lower gasoline distribution volumes and a $300,000 decrease in station operations margin.
• GDSO Volume -- 361.3 million gallons, compared with 390.8 million gallons, as higher pump prices weighed on consumer fuel demand.
• Wholesale Product Margin -- $111.4 million, up $33.4 million reflecting more favorable market conditions in gasoline and distillates.
• Wholesale Gasoline Margin -- $75.8 million, up $14.3 million due to favorable market conditions for gasoline and gasoline blendstocks.
• Wholesale Distillates Margin -- $35.6 million, up $19.1 million driven by improved market conditions in distillates and other oils.
• Commercial Product Margin -- $7.1 million, up $100,000 reflecting more favorable market conditions in bunkering.
• Operating Expenses -- $131.1 million, down $1.4 million as lower maintenance and repair costs in terminal operations offset higher GDSO credit card fees.
• Selling, General and Administrative Expenses -- $79.4 million, up $3.1 million due to increases in wages, benefits, and discretionary incentive compensation.
• Interest Expense -- $31.4 million, down $1.9 million reflecting lower average balances on the working capital revolving credit facility.
• Total Capital Expenditures -- $41.9 million, consisting of $19.3 million in maintenance CapEx and $22.6 million in expansion CapEx.
• Full-Year Maintenance CapEx Guidance -- $65 million to $75 million, which management raised by $5 million from the previous forecast range.
• Full-Year Expansion CapEx Guidance -- $75 million to $85 million, excluding acquisitions and depending on project completion timing.
• Leverage Ratio -- 2.8x, defined as funded debt-to-EBITDA, maintaining ample capacity on credit facilities.
• Preferred Unit Redemption -- $75 million, representing the full redemption of the 9.5% Series B fixed rate preferred units in July.
• Credit Facility Extension -- October 2031, representing an extension of more than three years for the $1 billion working capital and $500 million revolving facilities.
• GDSO Portfolio -- 1,490 sites, at quarter end, exclusive of 69 sites managed under the sponsor retail joint venture.
• Commercial Volume -- 124.7 million gallons, compared with 149.2 million gallons.
• Wholesale Volume -- 1.4 billion gallons, remaining flat compared with the same period last year.

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RISKS

• Hanson stated, "We continue to expect the current steep backwardation in the forward product pricing curve to increase the cost of carrying our hedged inventory in future periods," indicating a potential impact on future margins.
• Slifka stated that the company observed "lower retail fuel volumes as higher pump prices weighed on demand," noting the sensitivity of the GDSO segment to retail price fluctuations.

SUMMARY

Global Partners LP (NYSE:GLP) reported financial results for the third quarter of 2026 that demonstrated how performance in its terminaling and wholesale operations balanced challenges in the retail sector. Management reported that higher retail fuel prices negatively impacted demand at gas stations, though convenience store operations remained stable with increased average transaction baskets. The company executed several capital structure initiatives during the period, including the redemption of preferred units and the extension of its credit facility maturity. Strategic focus remained on disciplined capital deployment toward existing assets and potential accretive acquisitions in a fragmented market.

• CFO Hanson noted that while transaction counts decreased at convenience stores, "the baskets actually increased a little bit overall."
• CEO Slifka stated that the retail business "is still a very fragmented business" and noted that management continues to evaluate opportunities for disciplined, accretive acquisitions.
• The company committed $200,000 to assist New England community action agencies with home heating oil efforts for the winter season.
• Management reported that terminal operations saw lower maintenance and repair expenses, which contributed to the overall decrease in operating expenses.
• The partnership redeemed all $75 million of its outstanding 9.5% Series B fixed rate preferred units, which removed that preferred equity from the capital structure.

INDUSTRY GLOSSARY

• Backwardation: A market condition where the current spot price of a commodity is higher than prices for future delivery.
• Distillates: A category of petroleum products including diesel, heating oil, and kerosene.
• GDSO: Gasoline Distribution and Station Operations segment.
• Product Margin: Product sales minus product costs, used to assess core profitability before operating and administrative expenses.
• Distributable Cash Flow (DCF): A non-GAAP measure used by master limited partnerships to indicate the amount of cash available for distribution to unitholders.
• Series B Fixed Rate Preferred Units: A specific class of equity security that pays a fixed distribution and has priority over common units.

Full Conference Call Transcript

Operator: Good day, everyone, and welcome to the Global Partners Third Quarter 2026 Financial Results Conference Call. Today's call is being recorded. With us from Global Partners are president and chief executive officer, Mr. Eric S. Slifka; Chief Financial Officer, Mr. Gregory Hanson; Chief Operating Officer, Mr. Mark A. Romaine; and Chief Legal officer, Ms. Kristin Seabrook. At this time, I would like to turn the call over to Ms. Seabrook for opening remarks. Please go ahead.

Kristin Seabrook: Good morning, everyone, and thank you for joining us. Today's call will include forward-looking statements within the meaning of federal securities laws. Including projections and expectations concerning the future financial and operational performance of Global Partners. No assurances can be given that these projections will be attained or that these expectations will be met. Our assumptions and future performance are subject to a wide range of business risks, uncertainties, and factors, including supply and demand, which could cause actual results to differ materially as described in our filings with the Securities and Exchange Commission. Global Partners undertakes no obligation to revise or update any forward-looking statements.

Now it is my pleasure to turn the call over to our President and Chief Executive Officer, Eric S. Slifka. Eric?

Eric S. Slifka: Thank you, Kristin, and good morning, everyone. Our third quarter results underscore the strength of Global's integrated liquid energy model. Our presence across the supply chain provides multiple sources of earnings and the flexibility to adapt to changing market conditions. We saw the benefit of that model this quarter. Solid execution across our terminal network and wholesale business more than offset lower retail fuel volumes as higher price-- pump higher pump prices weighed on demand and our station operations held steady. We do not rely on any single segment or market dynamic to drive performance. it is that balance that helps us manage through different environments and gives Global the ability to capture opportunities across the business.

We are also in a strong position to invest in the future. We remain disciplined in how we deploy capital whether we are investing in our existing assets or pursuing opportunities that strengthen our platform and generate attractive long-term returns for unitholders. Turning to our distribution. Last month, our Board approved our 20th consecutive quarterly distribution increase raising the quarterly cash distribution to $0.785 per common unit or $3.14 on an annualized basis. The distribution will be paid on November 13 to unitholders of record as of November 9. We believe that track record reflects the strength of the business and our priority of returning capital to unitholders.

Our commitment to the communities we serve remains an important part of who we are We have committed more than $200 thousand to community action agencies and non profits. To assist with home heating oil efforts in New England this winter. This builds on our long-standing efforts to help families meet their heating needs, with direct contributions that allow these organizations to put the funds they can have the greatest impact. Now let me turn the call over to Gregory for the financial review. Gregory?

Gregory Hanson: Thank you, Eric. Good morning, everyone. As we review the numbers, unless otherwise noted, all comparisons will be with the third quarter of 2025. Net income in the third quarter of 2026 was $52.4 million versus $29 million in the prior year period. EBITDA was $120.8 million in the third quarter versus $97.1 million in 2025. And adjusted EBITDA was $122.9 million compared with $98.8 million Distributable cash flow was $70.1 million in the third quarter of 2020 compared with $53 million and adjusted DCF was $70.3 million versus $53.3 million continue to maintain a healthy distribution coverage at quarter end of 2.3x. Moving to our segment details.

GDSO segment product margin decreased $8 million to $210.6 million in the quarter, Product margin from gasoline distribution was down $8 million to $136.8 million primarily due to a decrease in volumes sold. Station operations product margin, which includes convenience store and prepared food sales, sundries and rental income, decreased $300 thousand to $73.8 million in the third quarter of 2026. At quarter end, our GDSO portfolio of fueling stations and C stores consisted of 1.49 thousand sites, exclusive of the 69 sites under our sponsor retail joint venture. Turning to our Wholesale segment.

Third quarter product margin increased $33.4 million to $111.4 million primarily reflecting more favorable market conditions in gasoline and distillates with product margin from gasoline and gasoline blendstocks increasing $14.3 million to $75.8 million and product margin from distillates and other oils increasing $19.1 million to $35.6 million In our Commercial segment, product margin increased $100 thousand to $71 million due in part to more favorable market conditions in bunkering. We are pleased with our results in the quarter. Our integrated system provides us with multiple sources of revenue generation, and our team has demonstrated strong execution and capturing value in a dynamic market environment.

We continue to expect the current steep backwardation in the forward product pricing curve to increase the cost of carrying our hedged inventory in future periods, and we remain focused on disciplined inventory management driving growth across our segments and efficient operations. Turning to the expense side. Operating expenses decreased $1.4 million in the third quarter, $131.1 million reflecting lower expenses associated with our terminal operations largely in maintenance and repair expenses. Offset by higher expenses related to our GDSO operations, mostly in credit card fees. SG&A increased $3.1 million to $79.4 million consisting of increases in wages and benefits, discretionary incentive comp and various other expenses. Offset by a decrease in maintenance and repair expenses.

Interest expense decreased $1.9 million to $31.4 million partially due to lower average balances on our working capital revolving credit facility. CapEx in the third quarter was $41.9 million, consisting of maintenance CapEx of $19.3 million and expansion CapEx of $22.6 million primarily related to investments in our gasoline station business. For full-year 2026, we now expect maintenance CapEx in the range of $65 million to $75 million up $5 million from our previous range. With expansion CapEx, excluding acquisitions, unchanged at $75 million to $85 million Our current CapEx estimates depend in part on the timing of project completions, availability of equipment and labor, weather and any unforeseen events or opportunities that additional maintenance or investment.

Our balance sheet remains strong. As of September 30, led leverage as defined in our credit agreement as funded debt-to-EBITDA. Of approximately 2.8x, we maintain ample excess capacity on our credit facilities. We had $99 million outstanding on our working capital revolver, and $144.5 million outstanding on our revolving credit facility. During the third quarter, we redeemed all of our outstanding 9.5% Series B fixed rate preferred units eliminating $75 million of preferred equity from our capital structure. And subsequent to quarter end, we amended our credit agreement extending its maturity by more than 3 years to October 2031, while maintaining our $1 billion working capital revolving credit facility and our $500 million revolving credit facility.

Let me turn the call back to Eric for his closing comments. Eric?

Eric S. Slifka: Thanks, Gregory. As we look forward, our focus is straightforward. Execute well, build on the strengths of our integrated platform, and continue positioning Global for long-term growth. We have a strong foundation, a proven operating model, and a team that knows how to navigate a dynamic market. We are excited about the opportunities ahead and remain focused on creating lasting value for our unitholders. With that, Gregory, Mark and I will be happy to take your questions. Operator, please open the line for Q&A.

Operator: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. May press 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be a moment. Please, while we poll for questions. Thank you. Our first question comes from the line of Greg Brody with Bank of America. Please proceed with your question.

Greg Brody: Sir. Good morning. What is it about What you are seeing from the-- on the customer side in terms of their behavior with consumption and how that compares to what data you are seeing across the U.S.?

Gregory Hanson: Hey, Gregory. it is Gregory Hanson. Yeah. I mean, I think, overall, we definitely saw an impact from-- sorry about that. We have a lot of interference there. Yeah, I think overall, we definitely saw an impact on the consumer from higher retail prices on the fuel volume side. I think we were pleasantly surprised at how well our consumer did inside our C stores, basically being flat on the C store. And we did see some higher transaction baskets in the quarter. Our transactions were down, but the baskets actually increased a little bit overall.

So we definitely saw people conserving on the fuel side with the high prices overall, but, you know, I think on the C store side, it was pretty steady overall, which we think is quarter to quarter, which is a sort of a win in our book overall.

Greg Brody: Okay. And just. You know, I would think, is this volatility in. Or maybe the At least higher prices potentially creating more opportunity for you to acquire mom and pops that are usually a little strained on the working capital needs here? Or is it Yeah, or is that. Is that not a factor?

Eric S. Slifka: Yeah, Gregory. it is Eric S. Slifka. I do not think that is the opportunity. I just think there is certainly a lot going on M&A has been very busy. I think there is a lot of opportunity out there. I am not sure it is being driven by credit issues. Or pricing per se. It still is, at the retail level. it is still a very fragmented business, and there is lots of opportunities there. We continue to look at everything that we can find but we also want to make sure that we are doing deals that are accretive and have good returns, and we are trying to maintain our discipline. it is still competitive.

And then when you look at the terminaling business, there are opportunities that are fewer, but, you know, the deals are bigger and we will continue to make sure that we are investing in our own network to drive higher returns. Alright.

Greg Brody: Thanks for the time, guys.

Eric S. Slifka: Thanks, Gregory.

Operator: Thank you. We have reached the end of the question and answer session. I would like to turn the floor back over to Mr. Slifka for closing comments.

Eric S. Slifka: Thank you again for your time today and for your continued interest in Global. We look forward to speaking with you next quarter. We wish everybody a great weekend. Thank you all.

Operator: Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a wonderful day.

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