Suburban Propane reduces debt by $19 million; leverage down to 4.36x

By Devika Patel

Knoxville, Tenn., Nov. 15 – Suburban Propane Partners, LP decreased its total debt by $19 million last year and cut its leverage ratio down 1.4x to 4.36x.

“We reported a significant improvement in earnings and cash flows and we put the excess cash flow to work, investing in strategic growth opportunities and reducing debt,” president and chief executive officer Michael A. Stivala said on the company’s fourth quarter and year ended Sept. 29 earnings conference call on Thursday.

“Overall, we reduced total debt by $19 million [during the year] through excess cash flows,” chief accounting officer and chief financial officer Michael Kuglin said on the call.

The company’s consolidated leverage ratio was 4.36x as of Sept. 29, down 1.4x when compared to the same time last year.

“Our financial metrics continue to get stronger,” Stivala said.

“From a leverage perspective, the combination of the increase in earnings and the debt reduction during the fiscal year resulted in our consolidated leverage ratio improving to 4.36x at the end of the fiscal year,” Kuglin said.

“We are well within our debt covenant requirements and remain focused on continuing to restore our balance sheet strength, which includes achieving a target leverage profile in the mid to upper 3x,” Kuglin said.

The company has “ample” borrowing capacity under its revolving credit facility.

“From a liquidity position, we have ample borrowing capacity under our revolver to fund anticipated working capital needs and to support our strategic growth initiatives,” Kuglin said.

Management is pleased with the progress made on improving the balance sheet.

“We have made excellent progress on restoring our balance sheet strength,” Stivala said.

Adjusted EBITDA for the year was $283 million, $40 million higher than last year.

Based in Whippany, N.J., Suburban Propane supplies propane, fuel oil and related products and services and markets natural gas and electricity.

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