Superior Plus Corp. (“Superior”) (TSX:SPB) announced today its financial and operating results for the third quarter ended September 30, 2021. Unless otherwise expressed, all financial figures are expressed in Canadian dollars.
“During the third quarter, we were successful in our continued progress towards our Superior Way Forward acquisition and operational improvement initiatives,” said Luc Desjardins, President and Chief Executive Officer. “In the past twelve months, we have announced or closed eight acquisitions for an investment of approximately $625 million, and we continue to see a robust pipeline of acquisition opportunities in the U.S. and Canada.”
“Although our third quarter is our seasonally lowest, our results were modestly higher than the prior year quarter, and we are confirming our 2021 Adjusted EBITDA guidance,” added Desjardins. “Our sales volumes were higher due to acquisitions completed in the past twelve months and modest improvement in commercial and wholesale demand as COVID-19 restrictions are eased.”
Financial Highlights:
Strategic Developments and Highlights:
Financial Overview |
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Three Months Ended |
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Nine Months Ended |
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September 30 |
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September 30 |
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(millions of dollars, except per share amounts) |
2021 |
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2020 |
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2021 |
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2020 (1) |
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Revenue |
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362.6 |
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256.8 |
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1,567.7 |
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1,245.0 |
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Gross Profit |
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132.6 |
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120.7 |
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630.8 |
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636.2 |
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Net earnings (loss) from continuing operations attributable to common shareholders |
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(35.9 |
) |
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(26.1 |
) |
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3.4 |
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(25.1 |
) |
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Net earnings (loss) from continuing operations per share attributable to common shareholders, diluted (4) |
$ |
(0.24 |
) |
$ |
(0.18 |
) |
$ |
(0.08 |
) |
$ |
(0.17 |
) |
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EBITDA from operations (2) |
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$13.4 |
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$17.6 |
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$266.8 |
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$255.9 |
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Adjusted EBITDA (2) |
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$13.0 |
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$10.8 |
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$256.2 |
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$235.3 |
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Net cash flows from operating activities |
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(3.3 |
) |
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17.2 |
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226.2 |
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289.6 |
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Net cash flows from operating activities per share, diluted (4) |
$ |
(0.02 |
) |
$ |
0.09 |
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$ |
1.10 |
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$ |
1.57 |
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AOCF before transaction and other costs (2)(3) |
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($4.8 |
) |
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($12.7 |
) |
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$189.5 |
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$158.2 |
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AOCF before transaction and other costs per share, diluted (2)(3)(4) |
$ |
(0.02 |
) |
$ |
(0.06 |
) |
$ |
0.92 |
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$ |
0.86 |
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AOCF (2) |
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(11.7 |
) |
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(17.2 |
) |
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168.9 |
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143.1 |
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AOCF per share, basic and diluted (2)(4) |
$ |
(0.06 |
) |
$ |
(0.09 |
) |
$ |
0.82 |
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$ |
0.78 |
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Cash dividends declared on common shares |
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31.7 |
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31.7 |
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95.1 |
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94.8 |
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Cash dividends declared per share |
$ |
0.18 |
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$ |
0.18 |
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$ |
0.54 |
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$ |
0.54 |
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(1) |
Comparative figures have been reclassified to exclude the results of the Specialty Chemicals segment due to the divestiture of the segment subsequent to the end of the first quarter. See the unaudited condensed interim consolidated financial statement for the three and nine months ended, third quarter, 2021 and 2020. |
(2) |
EBITDA from operations, Adjusted EBITDA, interest expense, AOCF before transaction and other costs, and AOCF are Non-IFRS measures. See “Non-IFRS Financial Measures”. |
(3) |
Transaction and other costs for the three and nine months ended, third quarter, 2021 and 2020 are related to acquisition activity, restructuring and the integration of acquisitions and the divestiture of the Specialty Chemical segment. See “Transaction and Other Costs” for further details. |
(4) |
The weighted average number of shares outstanding for the three and nine months ended, third quarter, 2021 was 206.0 million (three and nine months ended, September 30, 2020 was 201.8 million, and 184.2 million). The weighted average number of shares assumes the exchange of the preferred shares into common shares. There were no other dilutive instruments with respect to AOCF per share and AOCF before transaction and other costs per share for the three and nine months ended, third quarter, 2021 and 2020. |
Segmented Information |
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Three Months Ended |
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Nine Months Ended |
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September 30 |
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September 30 |
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(millions of dollars) |
2021 |
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2020(1) |
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2021 |
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2020(1) |
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EBITDA from operations(1) |
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U.S. Propane Distribution |
(7.8 |
) |
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(4.0 |
) |
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146.3 |
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126.5 |
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Canadian Propane Distribution |
21.2 |
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21.6 |
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120.5 |
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129.4 |
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13.4 |
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17.6 |
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266.8 |
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255.9 |
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(1) |
See “Non-IFRS Financial Measures”. Comparative figures have been reclassified to exclude the results of the Specialty Chemicals segment as a result of the announced divestiture and subsequent closing of the transaction. See the unaudited condensed interim consolidated financial statements and notes thereto as at and for the three and nine months ended, third quarter, 2021 and 2020. |
MD&A and Financial Statements
Superior’s MD&A, the unaudited Interim Condensed Consolidated Financial Statements and the Notes to the Interim Condensed Consolidated Financial Statements for the three and nine months ended September 30, 2021 provide a detailed explanation of Superior’s operating results. These documents are available online at Superior’s website at www.superiorplus.com under the Investor Relations section and on SEDAR under Superior’s profile at www.sedar.com.
2021 Third Quarter Conference Call
Superior will be conducting a conference call and webcast for investors, analysts, brokers and media representatives to discuss the Third Quarter Results at 10:30 a.m. EST on Friday, November 12, 2021. To participate in the call, dial: 1-844-389-8661. Internet users can listen to the call live, or as an archived call on Superior’s website at www.superiorplus.com under the Events section.
Non-IFRS Financial Measures
Throughout the first quarter earnings release, Superior has used the following terms that are not defined by International Financial Reporting Standards (“Non-IFRS Financial Measures”), but are used by management to evaluate the performance of Superior and its business: AOCF before and after transaction and other costs, earnings before interest, taxes, depreciation and amortization (“EBITDA”) from operations, Adjusted Gross Profit, Adjusted EBITDA, Total Debt to Adjusted EBITDA leverage ratio, Senior Debt, Credit Facility EBITDA and Senior Debt to Credit Facility EBITDA leverage ratio. These measures may also be used by investors, financial institutions and credit rating agencies to assess Superior’s performance and ability to service debt. Non-IFRS financial measures do not have standardized meanings prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Securities regulations require that Non-IFRS financial measures are clearly defined, qualified and reconciled to their most comparable IFRS financial measures. Except as otherwise indicated, these Non-IFRS financial measures are calculated and disclosed on a consistent basis from period to period. Specific items may only be relevant in certain periods. See “Non-IFRS Financial Measures” in the MD&A for a discussion of Non-IFRS financial measures and certain reconciliations to IFRS financial measures.
The intent of Non-IFRS financial measures is to provide additional useful information to investors and analysts, and the measures do not have any standardized meaning under IFRS. The measures should not, therefore, be considered in isolation or used in substitute for measures of performance prepared in accordance with IFRS. Other issuers may calculate Non-IFRS financial measures differently. Investors should be cautioned that AOCF, EBITDA from operations, Adjusted EBITDA and Credit Facility EBITDA should not be construed as alternatives to net earnings, cash flow from operating activities or other measures of financial results determined in accordance with IFRS as an indicator of Superior’s performance.
Adjusted Operating Cash Flow and Adjusted Operating Cash Flow per Share
AOCF is equal to cash flow from operating activities as defined by IFRS, adjusted for changes in non-cash working capital, other expenses, non-cash interest expense, current income taxes and finance costs. Superior may deduct or include additional items in its calculation of AOCF; these items would generally, but not necessarily, be infrequent in nature and could distort the analysis of trends in business performance. Excluding these items does not imply they are non-recurring. AOCF and AOCF per share are presented before and after transaction and other costs.
AOCF per share before transaction and other costs is calculated by dividing AOCF before transaction and other costs by the weighted average number of shares outstanding. AOCF per share is calculated by dividing AOCF by the weighted average number of shares outstanding.
AOCF is a performance measure used by management and investors to evaluate Superior’s ongoing performance of its businesses and ability to generate cash flow. AOCF represents cash flow generated by Superior that is available for, but not necessarily limited to, changes in working capital requirements, investing activities and financing activities of Superior.
The seasonality of Superior’s individual quarterly results must be assessed in the context of annualized AOCF. Adjustments recorded by Superior as part of its calculation of AOCF include, but are not limited to, the impact of the seasonality of Superior’s businesses, principally the Energy Distribution segment, by adjusting for non-cash working capital items, thereby eliminating the impact of the timing between the recognition and collection/payment of Superior’s revenues and expenses, which can differ significantly from quarter to quarter. AOCF is reconciled to cash flow from operating activities. Please refer to the Financial Overview section of the MD&A for the reconciliation.
EBITDA from operations
EBITDA from operations is defined as Adjusted EBITDA excluding costs that are not considered representative of Superior’s underlying core operating performance, including gains and losses on foreign currency hedging contracts, corporate costs and transaction and other costs. Management uses EBITDA from operations to set targets for Superior (including annual guidance and variable compensation targets). EBITDA from operations is reconciled to net earnings before income taxes. Please refer to the Results of Operating Segments in the MD&A for the reconciliations.
Adjusted EBITDA
Adjusted EBITDA represents earnings before interest, taxes, depreciation, amortization, losses (gains) on disposal of assets, finance expense, restructuring costs, transaction and other costs, and unrealized gains (losses) on derivative financial instruments. Adjusted EBITDA is used by Superior and investors to assess its consolidated results and ability to service debt. Adjusted EBITDA is reconciled to net earnings before income taxes.
Adjusted EBITDA is a significant performance measure used by management and investors to evaluate Superior’s ongoing performance of its businesses. Adjusted EBITDA is also used as one component in determining short-term incentive compensation for certain management employees.
The seasonality of Superior’s individual quarterly results must be assessed in the context of annualized Adjusted EBITDA.
Total Net Debt to Adjusted EBITDA Leverage Ratio and Pro Forma Adjusted EBITDA
Adjusted EBITDA for the Total Net Debt to Adjusted EBITDA Leverage Ratio is defined as Adjusted EBITDA calculated on a 12-month trailing basis giving pro forma effect to acquisitions and dispositions adjusted to the first day of the calculation period (“Pro Forma Adjusted EBITDA”). Pro Forma Adjusted EBITDA is used by Superior to calculate its Total Net Debt to Adjusted EBITDA Leverage Ratio.
Total Net Debt is determined by taking the sum of borrowings before deferred financing fees and lease liabilities and reducing this by the cash and cash equivalents balance.
To calculate the Total Net Debt to Adjusted EBITDA Leverage Ratio divide Total Net Debt by Pro Forma Adjusted EBITDA. Total Net Debt to Adjusted EBITDA Leverage Ratio is used by Superior and investors to assess its ability to service debt.
Forward Looking Information
Certain information included herein is forward-looking information within the meaning of applicable Canadian securities laws. Forward-looking information may include statements regarding the objectives, business strategies to achieve those objectives, expected financial results (including those in the area of risk management), economic or market conditions, and the outlook of or involving Superior, Superior LP and its businesses. Such information is typically identified by words such as “anticipate”, “believe”, “continue”, “estimate”, “expect”, “plan”, “forecast”, “future”, “outlook, “guidance”, “may”, “project”, “should”, “strategy”, “target”, “will” or similar expressions suggesting future outcomes.
Forward-looking information in this document includes: future financial position, expected Adjusted EBITDA and the anticipated closing of the Kamps acquisition and the associated timing.
Forward-looking information is provided for the purpose of providing information about management’s expectations and plans about the future and may not be appropriate for other purposes. Forward-looking information herein is based on various assumptions and expectations that Superior believes are reasonable in the circumstances. No assurance can be given that these assumptions and expectations will prove to be correct. Those assumptions and expectations are based on information currently available to Superior, including information obtained from third party industry analysts and other third party sources, and the historic performance of Superior’s businesses. Such assumptions include the time required to complete the regulatory process for the Kamps acquisition, anticipated financial performance, current business and economic trends, the amount of future dividends paid by Superior, business prospects, utilization of tax basis, regulatory developments, currency, exchange and interest rates, future commodity prices relating to the oil and gas industry, future oil rig activity levels, trading data, cost estimates, our ability to obtain financing on acceptable terms, expected life of facilities and statements regarding net working capital and capital expenditure requirements of Superior or Superior LP, the assumptions set forth under the “Financial Outlook” sections of our MD&A. The forward looking information is also subject to the risks and uncertainties set forth below.
By its very nature, forward-looking information involves numerous assumptions, risks and uncertainties, both general and specific. Should one or more of these risks and uncertainties materialize or should underlying assumptions prove incorrect, as many important factors are beyond our control, Superior’s or Superior LP’s actual performance and financial results may vary materially from those estimates and intentions contemplated, expressed or implied in the forward-looking information. These risks and uncertainties include incorrect assessments of value when making acquisitions, increases in debt service charges, the loss of key personnel, the anticipated impact of the COVID-19 pandemic and the expected economic recession, fluctuations in foreign currency and exchange rates, inadequate insurance coverage, liability for cash taxes, counterparty risk, compliance with environmental laws and regulations, reduced customer demand, operational risks involving our facilities, force majeure, labour relations matters, our ability to access external sources of debt and equity capital, and the risks identified in (i) our MD&A under the heading “Risk Factors” and (ii) Superior’s most recent Annual Information Form. The preceding list of assumptions, risks and uncertainties is not exhaustive.
When relying on our forward-looking information to make decisions with respect to Superior, investors and others should carefully consider the preceding factors, other uncertainties and potential events. Any forward-looking information is provided as of the date of this document and, except as required by law, neither Superior nor Superior LP undertakes to update or revise such information to reflect new information, subsequent or otherwise. For the reasons set forth above, investors should not place undue reliance on forward-looking information.
For more information about Superior, visit our website at www.superiorplus.com.
View source version on businesswire.com: https://www.businesswire.com/news/home/20211111006113/en/
Beth Summers Executive Vice President and Chief Financial Officer
Phone: (416) 340-6015
Rob Dorran Vice President, Investor Relations and Treasurer
Phone: (416) 340-6003
Toll Free: 1-866-490-PLUS (7587)