Superior Plus Reports Modest Growth Amid Strategic Transformation

Superior Plus recently held its earnings call, revealing key insights into the company's financial performance, strategic initiatives, and future outlook. The company experienced modest growth in adjusted EBITDA for both the full year and fourth quarter, despite facing some challenges in its CNG and propane sectors. With a focus on operational transformation and customer retention, management is optimistic about sustained value creation moving forward.

Financial Performance

In the earnings call, management reported an adjusted EBITDA of $463.5 million for the full year, marking an increase of approximately 2% compared to 2024. This growth was primarily driven by a 4% increase in adjusted EBITDA from its North American propane segment, which was partially offset by a 4% decline in CNG operations. For the fourth quarter, adjusted EBITDA reached $161.9 million, a 2% increase from Q4 2024, attributed to stronger contributions from propane sales and the implementation of Superior Deliverers.

Key financial metrics included:

• Adjusted EBITDA per share of $1.46 for the full year, a 15% increase from the previous year.
• Adjusted net earnings per share of $0.31, a staggering 94% increase year-over-year.
• Free cash flow per share surged to $0.87, nearly doubling from 2024, thanks to lower capital expenditures and interest costs.

Management highlighted that the propane segment's adjusted EBITDA for North America increased by 4% to $346.7 million, with U.S. propane contributing $246.3 million—a 5% increase attributed to colder weather and higher sales volumes. However, challenges also persisted in the CNG segment, where adjusted EBITDA fell to $142.5 million, a 4% decline compared to the prior year.

Strategic Initiatives

Management emphasized ongoing strategic initiatives focused on improving operational efficiency and enhancing customer service. The introduction of Superior Deliverers has started to yield positive results, contributing $16.2 million to the full-year results and $11.2 million in Q4.

Key initiatives discussed during the call included:

• Operational Optimization: Management is focused on refining delivery methods and inventory management to meet customer demand more effectively. The company plans to reduce operational costs while enhancing service reliability.
• Customer Retention Programs: Addressing customer churn remains a priority, with management implementing predictive modeling tools and marketing programs aimed at improving customer acquisition and retention rates.
• Fleet Refreshment: A significant part of the capital expenditures in 2025 will involve refreshing the delivery fleet, which is expected to optimize asset availability and reduce maintenance costs moving forward.

Despite the challenges, management expressed confidence in the long-term benefits of these strategic initiatives, particularly the expected $75 million boost from Superior Deliverers by 2028.

Future Outlook

Looking ahead, management provided guidance for 2026, expecting adjusted EBITDA growth of 2%. The propane segment is projected to grow between 3% and 8%, contingent on weather conditions and the continued benefits from Superior Deliverers. However, a slight decline in customer volumes is anticipated due to ongoing customer attrition as the company refines its customer acquisition strategies.

Key elements of the guidance included:

• CNG Segment: Adjusted EBITDA for CNG is expected to decline between 4% and 9% in 2026, primarily due to continued pricing pressure and reduced ancillary revenue from utility contracts.
• Capital Expenditures: The company plans to invest approximately $160 million in 2026, up from $140 million in 2025, focusing on fleet updates and enhancing delivery capacity.
• Share Repurchases: Management continues to view share repurchases as a valuable use of capital, although they may scale back in 2026 to prioritize debt repayment ahead of the potential redemption of their convertible preferred shares in mid-2027.