Net income for the first quarter of fiscal 2026 was $45.8 million, or $0.69 per Common Unit, compared to net income of $19.4 million, or $0.30 per Common Unit, for the first quarter of fiscal 2025. Adjusted earnings before interest, taxes, depreciation, and amortization (Adjusted EBITDA, as defined and reconciled below) for the first quarter of fiscal 2026 improved $8.1 million, or 10.8%, to $83.4 million, compared to the prior year first quarter.
In announcing these results, President and Chief Executive Officer Michael A. Stivala said, "The fiscal 2026 heating season is off to a solid start, driven by cooler average temperatures in the Northeast, Mid-Atlantic and Midwest regions of our operating footprint, along with continued positive trends in our customer base growth and retention initiatives, which together enabled us to deliver a 4.2% increase in volumes sold compared to the prior year first quarter. The strong volumes, combined with effective selling price and expense management, contributed to an increase of nearly 11.0% in Adjusted EBITDA for the quarter. As colder weather and extreme storms have swept across much of the eastern half of the country in recent weeks, our operations personnel are well prepared and working tirelessly to safely meet customer demand."
Mr. Stivala continued, "In our renewable natural gas ("RNG") operations, average daily RNG injection for the first quarter improved compared to the prior sequential quarter and prior year first quarter due to an increase in facility uptime and from the operational enhancements implemented at our production facility in Stanfield, Arizona. We also started the commissioning process for our newly-constructed anaerobic digester facility in Upstate New York during December 2025, and made substantial progress on the construction of our gas upgrade equipment at our existing anaerobic digestion facility in Columbus, Ohio."
Concluding his remarks, Mr. Stivala stated, "During the quarter, we also advanced our long-term strategic growth plans with the acquisition of two well-run propane businesses in California, progressing our capital projects to grow RNG production, and strategically refinancing our 2027 senior notes at an attractive rate and long-dated tenor. We continue to focus on disciplined investments in growth, while maintaining balance sheet strength and flexibility."
Retail propane gallons sold in the first quarter of fiscal 2026 of 110.2 million gallons increased 4.2% compared to the prior year, primarily due to the impact of colder temperatures across much of the eastern half of the United States on heat-related demand and contributions from the Partnership's recent acquisitions, which more than offset considerably warmer temperatures in the West and incremental volumes in the prior year first quarter in the aftermath of Hurricanes Helene and Milton in the Southeast. Average temperatures (as measured by the number of heating degree days reported by the National Oceanic and Atmospheric Administration) across all of the Partnership's service territories during the first quarter of fiscal 2026 were 6% warmer than normal and 6% cooler than the prior year first quarter. Notably, average temperatures in the East were in line with normal and 12% cooler than the prior year first quarter, whereas average temperatures in the West were 24% warmer than normal and 11% warmer than the prior year first quarter.
Average propane prices (basis Mont Belvieu, Texas) for the first quarter of fiscal 2026 decreased 14.0% compared to the prior year first quarter. Total gross margin of $239.5 million for the fiscal 2026 first quarter increased $13.4 million, or 5.9%, compared to the prior year first quarter. Gross margin for the first quarter of fiscal 2026 included a $0.9 million unrealized gain attributable to the mark-to-market adjustment for derivative instruments used in risk management activities, compared to a $3.6 million unrealized gain in the prior year first quarter. These non-cash adjustments, which were reported in cost of products sold, were excluded from Adjusted EBITDA for both periods. Excluding the impact of the mark-to-market adjustments, total gross margin increased $16.1 million, or 7.2%, compared to the prior year first quarter, primarily due to higher propane volumes sold, and an increase in propane unit margins of $0.08 per gallon, or 4.1%.
Combined operating and general and administrative expenses of $155.0 million for the first quarter of fiscal 2026 increased $5.0 million, or 3.4%, compared to the prior year first quarter, primarily due to higher payroll and benefit-related expenses, overtime and other variable operating costs to support the increase in customer demand, as well as higher variable compensation expense associated with the increase in earnings.
In December 2025, the Partnership strategically refinanced its previously outstanding $350.0 million of 5.875% senior notes due 2027 with net proceeds from the issuance of new 6.50% senior notes due 2035 totaling $350.0 million and borrowings under its revolving credit facility. The refinancing extends weighted average debt maturities by nearly three years and provides additional financial flexibility.
During the first quarter of fiscal 2026, the Partnership acquired two well-run propane businesses in strategic markets in California for total consideration of $24.0 million, inclusive of non-compete payments. The acquisitions, along with seasonal working capital, growth capital expenditures for the RNG facilities, and costs associated with the refinancing of the Partnership's 2027 senior notes were funded with net borrowings of $115.4 million under the revolving credit facility and net proceeds of $3.1 million from the issuance of Common Units under the At-the-Market equity program. The Consolidated Leverage Ratio, as defined in the Partnership's credit agreement, for the twelve-month period ended December 27, 2025 was 4.57x, compared to 4.99x for the twelve-month period ended December 28, 2024.
As previously announced on January 22, 2026, the Partnership's Board of Supervisors declared a quarterly distribution of $0.325 per Common Unit for the three months ended December 27, 2025. On an annualized basis, this distribution rate equates to $1.30 per Common Unit. The distribution is payable on February 10, 2026 to Common Unitholders of record as of February 3, 2026.
About Suburban Propane Partners, L.P.Suburban Propane Partners, L.P. ("Suburban Propane") is a publicly traded master limited partnership listed on the New York Stock Exchange. Headquartered in Whippany, New Jersey, Suburban Propane has been in the customer service business since 1928 and is a nationwide distributor of propane, renewable propane, renewable natural gas, fuel oil and related products and services, as well as a marketer of natural gas and electricity and producer of and investor in low carbon fuel alternatives, servicing the energy needs of approximately 1 million residential, commercial, governmental, industrial and agricultural customers through approximately 750 locations across 42 states.
Suburban Propane is supported by three core pillars: (1) Suburban Commitment to Excellence, showcasing Suburban Propane's almost 100-year legacy, and ongoing commitment to the highest standards for dependability, flexibility, and reliability that underscores Suburban Propane's commitment to excellence in customer service; (2) SuburbanCares, highlighting continued dedication to giving back to local communities across Suburban Propane's national footprint; and (3) Go Green with Suburban Propane, promoting propane and renewable propane as versatile, low-carbon energy solutions and investing in the next generation of innovative, renewable energy alternatives.
For additional information on Suburban Propane, please visit www.suburbanpropane.com.
Forward-Looking StatementsThis press release contains certain forward-looking statements relating to future business expectations and financial condition and results of operations of the Partnership, based on management's current good faith expectations and beliefs concerning future developments. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those discussed or implied in such forward-looking statements, including the following:
The impact of weather conditions on the demand for propane, renewable propane, fuel oil and other refined fuels, natural gas, renewable natural gas ("RNG") and electricity;
The impact of climate change and potential climate change legislation on the Partnership and demand for propane, renewable propane, fuel oil and other refined fuels, natural gas, RNG and electricity;
Volatility in the unit cost of propane, renewable propane, fuel oil and other refined fuels, natural gas, RNG and electricity, the impact of the Partnership's hedging and risk management activities, and the adverse impact of price increases on volumes sold as a result of customer conservation;
The ability of the Partnership to compete with other suppliers of propane, renewable propane, fuel oil, RNG and other energy sources;
The impact on the price and supply of propane, renewable propane, fuel oil and other refined fuels from the political, military or economic instability of the oil producing nations, including hostilities in the Middle East, Russian military action in Ukraine, global terrorism and other general economic conditions, including the economic instability resulting from natural disasters;
Economic volatility and downturns, including as a result of tariffs and trade conflict and uncertainty;
The ability of the Partnership to acquire and maintain sufficient volumes of, and the costs to the Partnership of acquiring, reliably transporting and storing, propane, renewable propane, fuel oil and other refined fuels;
The ability of the Partnership to attract and retain employees and key personnel to support the growth of our business;
The ability of the Partnership to retain customers or acquire new customers;
The impact of customer conservation, energy efficiency, general economic conditions and technology advances on the demand for propane, renewable propane, fuel oil and other refined fuels, natural gas, RNG and electricity;
The ability of management to continue to control expenses and manage inflationary increases in fuel, labor and other ...
