Ladies and gentlemen, thank you for standing by, and welcome to Suburban Propane’s First Quarter Fiscal 2020 Financial Results Conference Call. At this point all the participant lines are in a listen-only mode. However, there will be an opportunity for your questions; instructions will be given at that time. [Operator Instructions] As a reminder, today’s call is being recorded. This conference call contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, relating to the partnership's future business expectations and predictions and financial condition and results of operations. These forward-looking statements involve certain risks and uncertainties. The partnership has listed some of the important factors that could cause actual results to differ materially from those discussed in such forward-looking statements, which are referred to as cautionary statements in its earnings press release, which can be viewed on the company's website. All subsequent written and oral forward-looking statements attributable to the partnership or persons acting on its behalf are expressly qualified in their entirety by such cautionary statements. With that I’ll turn the conference now to Mr. Davin D'Ambrosio, Vice President and Treasurer. Please go ahead.

Great. Thank you, John. Good morning everyone. Thank you for joining us this morning for our fiscal 2020 first quarter earnings conference call. Joining me this morning are Mike Stivala, our President and Chief Executive Officer; Mike Kuglin, Chief Financial Officer and Chief Accounting Officer; and Steve Boyd, our Chief Operating Officer. This morning we will review our first quarter results along with our current outlook of the business. As usual, once we've concluded our prepared remarks, we will open the session to questions. Our annual report on Form 10 K for the fiscal year ended September 28, 2019 and Form 10-Q for the period ended December 28, 2019, which will be filed by the end of business today, contains additional disclosure regarding forward-looking statements and risk factors. Copies may be obtained by contacting the partnership or the SEC. Certain non-GAAP measures will be discussed on this call. We have provided a description of those measures as well as a discussion of why we believe this information to be useful in our Form 8-K, which was furnished to the SEC this morning. The Form 8-K will be available through a link in the Investor Relations section of our website at suburbanpropane.com. At this point, I will turn the call over to Mike Stivala for some opening remarks. Mike?

Great. Thanks, Davin, and good morning. Thank you all for joining us today. The fiscal 2020 heating season started off with favorable weather primarily in October and the early part of November as well as active crop drying demand in the agricultural sector. However, unseasonably warm weather dominated the month of December, which represents the most critical month for heat related demand, resulting in lower volumes compared to the prior year first quarter. Excellent margin management by our operations personnel and a lower commodity price environment help to drive margin improvement and from an expense perspective the most significant impact was $5 million charge to settle certain product liability and other legal matters during the quarter. As a result, adjusted EBITDA for the fiscal 2020 first quarter was $85.4 million, a decrease of 8.5% from the prior year. On the strategic front, we continue to execute on our four pronged approach: organic growth through customer base growth and retention efforts in every one of our markets, fostering our new market expansion efforts, strategic acquisitions and positioning ourselves both financially and operationally to be prepared for more transformative opportunities. During the quarter, we closed on two well-run propane businesses in strategic markets in California and Georgia investing more than $23 million in those businesses. So while warm weather weighed on customer demand, we continue to manage the things we can control and stay committed to our strategic growth objectives. In a moment, I'll come back for some closing remarks. However, at this point, I'll turn it over to Mike Kuglin to discuss the first quarter results. Mike?

Thanks, Mike, and good morning everyone. To be consistent with previous reporting, as I discuss our first quarter results, I am excluding the impact of unrealized mark-to-market adjustments on derivative instruments used in risk management activities, which resulted in an unrelated gain of $2.8 million for the first quarter compared to an unrealized loss of $15.9 million in the prior year. Excluding these items, net income for the first quarter was $37.4 million, or $0.60 per Common Unit, compared to net income of $43.6 million, or $0.71 per Common Unit in the prior year. Adjusted EBITDA for the first quarter was $85.4 million, which was $7.9 million lower than the prior year. The decrease in earnings was primarily due to a $5 million charge for the settlement of certain product liability and other legal matters with a negative impact of warmer weather on customer demand during the month of December. Retail propane gallons sold in the first quarter were 121.2 million gallons, which was 2.3% lower than the prior year and consistent with the year-over-year percentage decrease in heating degree days for the key month of December. Propane demand for the quarter was negatively impacted by considerably warmer than normal temperatures during the latter half of the quarter and most significantly during the month of December when heating degree days generally have a greater impact on customer demand for heating purposes. Average temperatures for the first quarter were 4% warmer than normal and 1% warmer than the prior year and for the month of December; average temperatures were 10% warmer than normal and 2% warmer than December 2018. From a commodity perspective, wholesale propane prices increased 11% on a sequential quarter basis, but remained fairly low compared to historical levels. Overall, average wholesale prices for the first quarter were $0.50…

Thanks, Mike. As announced on July 23, our Board of Supervisors declared our quarterly distribution of $0.60 per Common Unit in respect of our first quarter of fiscal 2020, which equates to an annualized rate of $2.40 per Common Unit. Our quarterly distribution will be paid on February 11 to our unitholders of record as of February 4. Our distribution coverage continues to remain strong at 1.2 times based on our trailing 12 month distributable cash flow, despite the lower earnings for the quarter. As we have stated before, we remain focused on our goal of balancing debt reduction efforts with making strategic investments to support our long-term growth initiatives. Looking ahead, the unseasonably warm weather in December continued into January, which was ended up being 20% warmer than normal and 10% warmer than January of the prior year. In fact, the period from December 1 through January 31 has now been reported as a record warm stretch for this time of year. While there is still plenty of heating season ahead, the lack of heating degree days and the most critical heating month of January will obviously impact volumes in the second quarter. Nonetheless, our business remains well positioned to meet increased heat related demand with safety as our number one priority and our business model allows us to be nimble and adapt in the event of continued unseasonably warm weather. In the meantime, our operations personnel continue to remain focused on the highest level of safety standards, delivering exceptional service to our customers and the communities that we serve and executing on our long-term growth initiatives. Finally, I'd like to once again thank all of the 3,400 employees of Suburban Propane for their unwavering focus on the safety and comfort of our customers and the communities we serve. And as always, we appreciate your support and attention and would now like to open the call up for questions. And John, if you would mind helping with that please.

Certainly [Operator Instructions] And we'll go to first Charlie Barber with J.P. Morgan. Please go ahead.

Hey, good morning. I wanted to ask on the higher payroll and vehicle costs. Is that more of a function of the acquisitions or maybe a bit more towards larger organic growth? Just trying to understand the drivers there. And then also just any color you can provide on the settlement, the $5 million settlement.

Yes. So the payroll and the vehicle costs is more a function of just being the time of year and making sure that we have the right level of headcount to support a level of performance that we would expect for a normal weather scenario. And in fact, I would say that we also have been pretty aggressive in maintaining a certain level of our drivers and techs given just the challenges that a good strong economy has presented with respect to recruiting and hiring qualified individuals. So we're probably carrying a little bit more of a headcount than we would have in the past couple of years. And I think that's just a good long-term view of the business. We're not going to overreact to a short-term weather scenario here. Weather comes and goes. We run this business for the long-term. And given the challenges with respect that the whole industry, frankly, and not just the propane industry, but the trucking industry I think has been well publicized as highly competing for qualified drivers. And so we're trying to make sure that we're not making short-term decisions that we would potentially regret in the long-term. So I think it's a good sign of our confidence in where we are as a business. This short-term weather-related impact on demand is not going to waiver our position with respect to how we handle our headcount. As it relates to the settlement, look we're in an industry that we do take safety as our highest priority. We pride ourselves on having some of the most highly trained people in the industry. But as the industry as always had there are going to be situations here and there. Fortunately, they are fewer and far between, but there are situations where there is a – we do deal with a volatile product and there are times when we have to make a settlement to put something behind us. So that's what this charge was all about.

Okay, I appreciate the color. Second question on M&A. Can you talk a little bit about the two acquisitions? And I guess looking out into 2020, how that pipeline looks? Do you see similar level of activity to prior years or more or less just given the current backdrop?

Yes, we're really, really happy about the acquisitions we did in the first quarter. They were right in line with our strategic goals and in really good markets. Both – one was a direct overlay. The other one sort of filled a gap in a part of Georgia that was right in between two very high quality operations of ours that this kind of filled a void in the middle part of Georgia for us. And so, both extremely well-run businesses. We’re happy to have the employees and the customer base of those two businesses in-house. And we will run them as you've gotten to know Suburban will run them really, really well. As far as the pipeline, we do have another acquisition that is likely very close at this point for the second quarter. And then the pipeline at this point will – at this time of the heating season is usually the lightest that it normally is. And I would expect that to build up again in the March-April timeframe.

Okay, great. And then last question, just thinking about your current market share and your peers and some of your peers pricing strategy is to kind of cut or go cut underneath your pricing to take market share. How effective has that been for some of your competitors? And what does Suburban do to retain your existing market share?

Yes. I mean, our philosophy has always been the same. Our goal is to provide the highest level of service in the markets that we serve. We're a value oriented service provider. We pride ourselves on having some of the most highly trained employees. And we not only train our outside personnel that handle the product and handle the customer deliveries and service activities, but we do spend a lot of time training the folks that answer the phones on interacting with our customers in a positive way. And so, frankly, we haven't really seen much of an impact on our customer base from some of the aggressive activities that are going on in the marketplace. We do a good job defending our value proposition. And as I said in my opening remarks, our field personnel are doing an outstanding job, continuing to stay focused on growing the customer base organically and retaining what we have.

Appreciate it. Thanks. That's it for me.

Great. Thanks, Charlie.

[Operator Instructions] And allowing a few moments, no further questions in queue. I'll turn it back to the company for any closing comments.

Okay, great. John. Thanks for your help today and thank you all for your attention and we look forward to talking with you again in early May for our second quarter results.

Ladies and gentlemen, this conference is available for replay. It starts after 12 o'clock Eastern today and will last until February 7 at midnight. You can access the replay at any time by dialing (866) 207-1041 or (402) 970-0847. The access code is 6310400. Those numbers again, (866) 207-1041 or (402) 970-0847 with the access code 6310400. That does conclude your conference for today. Thank you for your participation. You may now disconnect.