Cold Weather Boosts Suburban Propane’s Volumes and EBITDA

Date of Call: Feb 5, 2026

Financials Results

• EPS: $0.70 per common unit, compared to $0.59 per common unit in the prior year
• Gross Margin: Total gross margin $238.6 million, an increase of 7.2% compared to the prior year

Business Commentary:

Heating Demand and Volume Growth:

• Suburban Propane Partners reported an increase of 4.2% in retail propane gallons sold, totaling 110.2 million gallons for Q1 2026.
• The growth was driven by colder temperatures in the Northeast, Mid-Atlantic, and Midwest regions, which boosted heat-related demand.

Adjusted EBITDA Increase:

• The company's adjusted EBITDA increased by $8.1 million or 10.8% compared to the prior year's first quarter.
• This increase was attributed to higher volumes sold and improved propane unit margins, along with contributions from renewable natural gas (RNG) operations.

Renewable Natural Gas Operations:

• Average daily RNG injection increased both sequentially and year-over-year, driven by operational enhancements at the Stanfield, Arizona facility.
• The improvements led to increased uptime and better conversion of feedstock to RNG injection.

Capital Expenditure and Strategic Investments:

• The company spent $19.8 million in total capital expenditures for Q1, with plans to invest nearly $7 million in growth CapEx.
• The investments are focused on advancing RNG projects and strategic acquisitions, such as the recent propane acquisitions in California.

Financial Strength and Refinancing:

• Suburban Propane Partners refinanced its 2027 senior notes at an attractive rate with a 10-year maturity.
• The move reflects a focus on maintaining balance sheet strength and flexibility while pursuing strategic growth opportunities.

Sentiment Analysis:

Overall Tone: Positive

• The fiscal 2026 heating season is off to a great start...enabled us to deliver an increase of more than 4% in volumes sold...and an increase of $8.1 million or nearly 11% in adjusted EBITDA for the quarter. Our business is very well positioned, both operationally and financially...

Q&A:

• Question from Operator: No questions were submitted during the call.
  Response:

Contradiction Point 1

RNG Facility Operational Timelines

The timeline for RNG facility commissioning and operational injection has shifted from the first half to the second half of the fiscal year, creating uncertainty about project readiness and revenue timing.

? - N/A

2026Q1: RNG capital projects are on track for completion by the end of the second fiscal quarter, with injection scheduled to begin in the second half of the fiscal year. - Mike Stivala(CEO)

What were the key drivers of revenue growth in Q3? - N/A

20251113-2025 Q4: New RNG facilities in Columbus, Ohio, and Upstate New York are expected to come online in H1 FY2026. - Summary of Key Points from Management Remarks

Contradiction Point 2

RNG Project Completion Timeline

Inconsistent timeline for RNG facility completion creates confusion about the company's operational capacity and future growth plans.

? - [General Question]

2026Q1: RNG capital projects are on track for completion by the end of the second fiscal quarter, with injection scheduled to begin in the second half of the fiscal year. - Mike Stivala(CEO)

What are the latest timelines for the New York and Columbus RNG projects, and how is that being balanced with Arizona facility enhancements? - Christopher Jeffrey (Mizuho Securities)

2025Q3: The Columbus (Ohio) and Upstate New York RNG facilities are on track for completion at the tail end of this calendar year into the early part of next calendar year. - Mike Stivala(CEO)

Contradiction Point 3

Status of 45Z Tax Credit Finalization

Contradictory statements on the finalization of the 45Z tax credit regulation impact the company's ability to forecast and plan for future tax benefits, affecting financial strategy.

How has the company's revenue growth trend evolved over the past quarter? - [General Question]

2026Q1: The company is focused on disciplined growth investments while maintaining balance sheet strength. - Mike Stivala(CEO)

Update on RNG tax credit rulemaking and OBBA Bill developments? - Christopher Jeffrey (Mizuho Securities)

2025Q3: No 45Z tax credit income was recognized this quarter, as final Treasury regulations are still pending and expected by year-end. - Mike Kuglin(CFO)

Contradiction Point 4

Regulatory Outlook for LCFS Credits

While the statement on LCFS credit recovery appears consistent, its placement within the broader context of RNG project timelines and financial strategy is crucial for understanding its impact on the business.

What were the key factors driving revenue growth this quarter? - N/A

2026Q1: Proposed amendments to the LCFS program are expected to be finalized soon, and their implementation is anticipated to lead to a rebound in LCFS credit values. This would be beneficial for the RNG platform. - Mike Stivala(CEO)

What key federal/state regulatory timelines should be monitored, and how might their outcomes affect operating strategies or investment plans for the Columbus (Adirondack) RNG facilities and future projects? - Christopher Jeffrey (Mizuho Securities)

2025Q2: Proposed amendments to the LCFS program are expected to be finalized soon, and their implementation is anticipated to lead to a rebound in LCFS credit values. This would be beneficial for the RNG platform. - Mike Stivala(CEO)