Global Partners' M&A Activity Boosts Q2 Results

WALTHAM, Mass. — Global Partners LP continues to turn in strong results driven by two acquisition deals it completed in 2018.

"We continued our solid performance in the second quarter highlighted by a product margin increase of approximately 16 percent in our GDSO [gasoline distribution and station operations] segment. That increase is primarily attributable to last summer's acquisition of Champlain and Cheshire Oil and to higher GDSO fuel margins," President and CEO Eric Slifka said during the Global Partners second-quarter earnings call on Aug. 8.

The Waltham-based company closed on its acquisitions of Vermont-based Champlain Oil Co. Inc.'s retail assets and Keene, N.H.-based Cheshire Oil Co. LLC's convenience store portfolio in July 2018, as Convenience Store News previously reported.

According to Daphne Foster, chief financial officer, Global Partners reported adjusted EBITDA of $62.8 million in the second quarter vs. $56.1 million in same period last year. It reported net income of $14.5 million vs. net income of $6.4 million the second quarter of 2018.

"Similar to the first quarter, stronger fuel margin and contribution from our 2018 retail acquisitions drove the year-over-year increases in Q2," she noted.

Looking at margins, combined product margin in the second quarter increased $18 million to $188 million driven by growth in the company's GDSO segment, which increased $19.8 million to $145.4 million, Foster said.

"The gasoline distribution contributions to product margin was up $10.9 million, primarily due to higher fuel margins and the acquisitions of Cheshire and Champlain in July 2018," she explained.

In addition, volume in the company's GDSO segment increased approximately 16 million gallons year-over-year, due primarily to the acquisitions, partially offset by the sale of non-strategic retail sites, according to Foster.

Station operations product margin, which includes convenience store sales, sales of sundries and rental income, increased $8.9 million to $57.6 million primarily due to the acquisitions, which added 47 company-operated sites to the company's portfolio, she added.

At the end of the second quarter Global Partners' GDSO portfolio consisted of 1,567 sites comprised of 295 company-operated stores, 252 commissioned agents, 226 lessee dealers and 794 contract dealers. The company is No. 32 on the 2019 Convenience Store News Top 100.