Good day, everyone and welcome to the Global Partners First Quarter 2022 Financial Results Conference Call. [Operator Instructions] With us from Global Partners are President and Chief Executive Officer, Mr. Eric Slifka; Chief Financial Officer, Mr. Gregory Hanson; Chief Operating Officer, Mr. Mark Romaine; and Chief Legal Officer and Secretary, Mr. Sean Geary. At this time, I would like to turn the call over to Mr. Geary for opening remarks. Please go ahead, sir.

Good morning, everyone. Thank you for joining us. Before we begin, let me remind everyone that today’s call will include forward-looking statements within the meaning of federal securities laws. These statements include, projections, expectations and estimates concerning the future financial and operational performance of Global Partners. These forward-looking statements are based on assumptions regarding market conditions, business cycles, demand for liquid LNG products and convenience store products, the utilization of our assets and facilities, the regulatory and permitting environment the forward looking product, pricing curve and other factors, which could influence our financial results. These statements involve significant risks and uncertainties, some of which are beyond the partnership’s control, including without limitation, the impact and duration of the COVID-19 pandemic, and its impact on our counterparties, our customers and our operations. As well as other assumptions that could cause actual results to differ materially from the partnership’s historical experience and present expectations or projections. We believe these assumptions are reasonable given currently available information. Our assumptions and future performance are subject to a wide range of business risks, uncertainties and factors, which are described in our filings with the Securities and Exchange Commission. Global Partners undertakes no obligation to revise or publicly release the results of any revision to any forward-looking statements that may be made during today’s conference call. With Regulation FD in effect, it is our policy that any material comments concerning future results of operations will be communicated through news releases, publicly announced conference calls or other means that will constitute public disclosure for the purposes of Regulation FD. Now it is my pleasure to turn the call over to our President and Chief Executive Officer, Eric Slifka.

Thank you, Sean. Good morning, everyone. We opened 2022 with a strong first quarter, highlighting the value of our vertically integrated liquid energy distribution system. We executed effectively in the quarter delivering significant increases in net income, adjusted EBITDA and distributable cash flow. As our Q1 performance demonstrates we are delivering on the key tenants of our strategy, acquiring great assets and enhancing our portfolio through NTIs and raze-and-rebuilds while managing our terminaling and wholesale business to maximize returns. M&A remains a focal point of the company over the past 12 years, we have built a formidable retail presence through accretive deals that have broadened our geographic footprint. Our recent acquisitions of Consumers Petroleum of Connecticut and Miller’s Neighborhood Market demonstrate our success in identifying, acquiring and integrating additional assets into our portfolio, generating synergies and adding to our scale. These transactions added over a 100 retail locations. Significantly increasing our retail presence in the Mid-Atlantic region, highlighted by our first company operated locations in Virginia. We spent a combined $215 million for these two acquisitions and we anticipate a return in the mid teens. We also continue to advance our renewable fuel initiatives, positioning the company to take advantage of new opportunities, whether those involve liquid renewables or other products. Turning to our distribution. In April, the Board voted to increase the quarterly distribution on our common units by one set per unit to 238 per unit on an annualized basis. The distribution will be paid on May 13 to unitholders of record as of the close of business on May 9. Now, let me turn the call over to Greg for his financial review. Greg?

Thank you, Eric, and good morning, everyone. Net income for the first quarter was $30.5 million compared with a net loss of $4.3 million for the same period in 2021. Adjusted EBITDA for the first quarter was $74.9 million compared with $40.4 million for the same period in 2021. DCF increased to $49.9 million compared with $14 million for the first quarter of 2021. Please note that EBITDA, adjusted EBITDA and DCF include a $4.9 million net gain on the sale and disposition of assets for the first quarter of 2022. LTM distribution coverage, as of March 31, 2022 was 1.9 times or 1.7 times after factoring in distributions to our preferred unitholders. Turning to our segment details. GDSO product margin, in Q1 2022 was $173 million up $42.6 million from the same period in 2021. The gasoline distribution contribution to product margin was up $34.7 million in the quarter to $114.9 million. Reflecting an increase in volume sold and a $0.07 per gallon increase in average fuel margins to $0.31 from $0.24 in last year’s first quarter. We were pleased with the fuel margin performance in light of the sharp increase in wholesale gasoline prices in the quarter. NYMEX gasoline prices increased $0.96 per gallon during the three months ended March 31, 2022 versus an increase of $0.54 per gallon during the same period in 2021. Station operations product margin, which includes convenience store and prepared food sales, sundries, and rental income contribute $58.1 million up $7.9 million from the first quarter of 2021 an increased activity at our convenience stores. At the end of the first quarter, our GDSO portfolio consists of 1,689 sites comprised of 342 company operated sites, 293 commission agents, 196 leasing dealers, and 858 contract dealers. As Eric mentioned, our GDSO portfolio and our…

Thanks Greg. We’re off to a strong start in 2022. We continue to identify new opportunities to further drive value through our integrated network and strategically located assets and enhanced efficiencies, increased returns to unitholders, and deliver an outstanding experience for our customers and guests. Now, Greg, Mark, and I will be happy to take your questions.

Thank you. [Operator Instructions] Thank you. Our first question comes from line of Selman Akyol with Stifel. Please proceed with your question.

Thank you. Good morning. Very nice quarter. Couple of things. Can you first just talk about inflation and how you’re seeing that impact and ways you’re dealing with it?

Sure. Yes, I mean, I think, we as on a whole, we haven’t been materially impacted by inflation as of yet. We have seen cost increased pass through from our vendors. We’ve been able to pass through a lot of that on the retail side. And haven’t – hasn’t really made a material impact at all. We’ve seen some obviously wage inflation and you’ll see that in our operating expenses line, that’s somewhat stabilized this quarter. The big increases in hourly wages were really last third quarter. We’ve been able to keep them stable. That said, employment is still very tight. It’s hard to find people in our retail side, our HR team is doing a good job on it, but it still continues to be a tough environment to find people.

Got it. Thank you. And then are you guys seeing, and it certainly doesn’t look like it from volumes, but are you seeing any indications of demand destruction in April at all?

Well certainly last quarter. I mean, what I would say is demand, if we’re talking about gasoline demand is still off from 2019, but it is interesting. I think, this holds true for both topics that you’re identifying. The first one around inflation, I think until it breaks demand, right, you’re going to have some movement that hasn’t happened yet, right? I think there are other factors driving gasoline demand. When you look at how many people are going into the office still, it’s not you look at the studies, it’s still 40%, in the markets that we’re in, that’s all publicly available documents that you can see. So driving is different times are different where they’re going, where consumers are driving is different. You look at public transit, they have the same issues. So, but that being said demand and margin have still been pretty decent.

Good. And then maybe, could you just expand a little bit about the strengths and other oils and related products on the margin, because that was pretty impressive.

Good morning Selman, it’s Mark.

Good morning, Mark.

Yes, we had a good quarter in distillates both on the supply side and on the rack margin side. Volume was decent. We had some decent weather, and margins, Greg touched on backwardation a little bit earlier in his presentation. And while that certainly increases costs for carrying inventory. We are seeing a lot of tightness in our wholesale racks and that is supporting a higher margin structure. We’ve seen good demand in our resilient bunker group good demand and good margin there. And that’s the, those are the two key things that are really driving the quarter in other oils.

Got it. All right. Thank you very much.

Thanks, Selman.

[Operator Instructions] Thank you. Our next question comes from the line of Gregg Brody with Bank of America. Please proceed with your question.

Good morning guys. Just a question on the M&A environment, maybe you could talk a little bit about what you’re seeing. Are there – is there potential pickup in sales because some of these small mom-and-pops can handle or some capital needs for the business. I’m actually putting words in my mouth, so maybe you can just answer what’s the M&A environment look like?

Yes. Hi Gregg it’s Eric, I do think information and scale is important. I think our perspective historically has been, it is an industry that is ripe for consolidation. We still believe that. And I think it’s hard if you have a small chain, it’s hard to get the scale to compete at every level and that’s at the supply level knowing what is a good price? What isn’t a good price? But it’s also on the supply and execution in the stores themselves, right? And so there is asset heavy, an asset light that exists within these businesses. But I think what you’re seeing is that consolidation continue to play itself out. I think during the beginning of COVID, I think we took a little bit of a break, right. And because people were very unsure of volumes in market and what was going to come back, and I just think the opportunity that we’ve identified and that we have historically executed on continues to be available. And I think as a market as “settled down” from COVID certainly there are other issues here today, but I think, those opportunities are just going to present themselves and continue to be there. Right. And our footprint I think, is going to allow us to continue to execute and grow through M&A as we have, since being a public company.

Yes. And just to add to Eric’s comments, I mean, I think what we’ve seen from sort of smaller players in the industry is, as we’ve seen operating expenses increase throughout, from equipment to insurance, to salaries everything, if you don’t have scale, you’re definitely have more effective those operating expense increased on your bottom line. And I think scale helps us to mitigate some of that. But if you’re a smaller player, it definitely puts pressure on you.

That’s very helpful. I think coming back to the question someone’s asking you about, you see any impact in your business from higher prices and you pointed out that’s, it’s pre-COVID levels. I’m just curious in the inconvenience store business, in that particular segment, are you seeing any consumer response based on the higher price for fuel and just inflation in general?

So Gregg, you asking about the – you’re asking about the store kind of the same store performance?

Yes. Or just, it’s more on the margin, like obviously prices have been going up since February, I mean down. But are you on the cutting edge of where you are today? Are you seeing any behavior changes…

I would say not really. The store performance has been pretty good. We are, Eric mentioned the comp first is 2019. I think he was talking about fuel volume by and large, but we are also, we are seeing sales are good, margins good in the store. Transactions are still lagging behind 2019. And so we think there’s an opportunity to try to get back to pre-COVID levels on that. But by and large, the stores are performing well. They performed last year; they continue to perform this year. So and a lot of that is through I would say intentional effort. We become, every day we become better organized around that. Greg mentioned scale. We have, we’ve got a lot of talented resources that help run those stores or do run those stores every day. We’ve become, we’ve got some price optimization tools that are disposal that are helping, make those decisions more efficient and more quickly for us. And then we’ve added some, lines to the business. We continue to get more involved and increase our exposure to food service. And that could look anything like made to order food service, really high quality made to order food service, all the way down to, expanded commissary lines and bean to cup coffee and things like that. We’ve recently relaunched our loyalty app and we’re seeing some success with that. So, we have a lot of initiatives that are going on, that are contributing to the success that we’re seeing in the stores. And we think there’s a tremendous upside to what we’re doing there. And so while yeah, it’s been a tough environment, we’re certainly there are some supply chain issues. I think we’ve done a pretty good job mitigating those. We’ve been very diligent around substituting items, when we have manufacture outages. We’ve been able to substitute in store shelves are full and our guests have a good experience. So net-net, I think we’re in a pretty good spot.

And then just last one, you touched on the wholesale outperformance and you said there’s good demand in our resilient bunker group. It doesn’t particularly surprise us given the volatility that happens when we saw on commodities and you’re on your storage assets. I’m curious, did just someone that doesn’t follow the day-to-day has that, has the opportunity for you to make money, have those assets persisted into this quarter where it’s sort of an outsize relative to a quarter where there isn’t as much volatility or did the – or was it, I guess I’m trying to say is 2Q is 1Q repeatable there?

I didn’t hear the tail end of that, Gregg. I’m sorry.

So is 1Q repeatable for wholesale is really the question based on the dynamics with commodities that are…

I don’t know we don’t, it’s hard to look at it that way because every day’s a little bit different, certainly every quarter’s a little bit different. I think you are right in the sense that, I think, I heard you reference opportunity in light of volatility or in maybe because of the volatility. These markets are just a little bit different than, what we – we’ve dealt with backward markets before we’ve dealt with tight markets before. I will say, we’ve not at least in my long time here; we haven’t dealt with this degree of backwardation. But you just manage a business a little bit differently, and I think we’ve done a good job with that. We got to stay on our toes. We have done things like reduce our inventory levels to what I – we have our kind of working inventory levels. And we’ve been able to drive those levels down to levels that I’m not sure we contemplated historically. And so that obviously helps the less inventory you can carry. The more that helps you mitigate those costs of carrying that inventory. And then, yes, the markets are moving big every day. And so it does, while it does present challenges, it also presents opportunities. We’re looking at every deal we do, we’re looking to scrutinizing every deal we do. It gets a little painstaking, but that’s how you got to operate in this environment. And if you work hard enough and if you pay close enough attention, you will find opportunities that being said, it’s you have to be able to execute on those. And it’s not automatic, but it is, it does, I think if you have a team that is experienced and is looking at it the right way, you have a shot. And so I’m not sure if we can say, yes, I expect Q2 to look like Q1. I mean, they don’t look, alike anyway in normal time. So, it’s going to be, we’re going to have to just operate a little bit differently for the foreseeable future, whether that’s the balance of the year, if you think about two years ago, or yes two years ago we had super contango. We had the exact opposite. And so we were operating differently there. So, we’re always trying to adjust according, based on the conditions. And I think, we’ll just continue to work as hard as we can to grab those opportunities and mitigate the risk.

Great. I appreciate the color. I know it’s a tough one to straight line in any direction, but appreciate it.

Thanks, Gregg. We’ll see you see you in early June hopefully.

Thank you. We have no further questions at this time. Mr. Slifka, I would like to turn the floor back over to you for closing comments.

Thank you for joining us this morning. We look forward to keeping you updated on our progress. Have a good day everybody.

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.