Superior Plus Announces Strong Third Quarter Results and Confirms 2023 Adjusted EBITDA Guidance

• Third quarter 2023 Adjusted EBITDA⁽¹⁾ was $25.8 million, an increase of $34.6 million over the prior year quarter
• Certarus achieved record third quarter Adjusted EBITDA of $35.5 million, a 19% increase from the prior year quarter
• Q3 2023 Adjusted EBITDA in our Propane Operations⁽²⁾ increased by $2.2 million versus prior year quarter
• Leverage Ratio⁽¹⁾ of 3.7x at quarter end improved significantly from 4.3x at Q3 2022
• Net loss of $107.8 million in the third quarter compared to a net loss of $206.9 million in the prior year quarter
• Confirming 2023 Pro Forma Adjusted EBITDA⁽¹⁾ guidance range of $630 million to $670 million, with a midpoint of $650 million, an increase of $200.2 million from 2022 Adjusted EBITDA of $449.8 million. The 2023 Pro Forma Adjusted EBITDA guidance includes the expected full twelve months of Certarus Ltd.’s (“Certarus”) 2023 Adjusted EBITDA in the range of $185 million to $195 million
• On November 6, 2023, the Toronto Stock Exchange (the “TSX”) accepted a notice filed by Superior of its intention to commence a normal course issuer bid (the “NCIB”) with respect to its common shares (“Common Shares”). Under the NCIB, Superior may purchase up to 12,427,942 Common Shares, such amount representing 5% of the 248,558,857 Common Shares issued and outstanding as at October 27, 2023. The NCIB is subject to additional standard regulatory requirements as set out herein.

⁽¹⁾ Adjusted EBITDA and pro forma Adjusted EBITDA are Non-GAAP Financial Measures. Leverage Ratio is a Non-GAAP ratio. See “Non-GAAP Financial Measures and Ratios” section below.

⁽²⁾ Propane Operations is the sum of U.S. Propane Adjusted EBITDA, Canadian Propane Adjusted EBITDA and Wholesale Propane Adjusted EBITDA.

TORONTO–(BUSINESS WIRE)–Superior Plus Corp. (“Superior” or “the company”) (TSX: SPB) today released its third quarter results for the period ended September 30, 2023. Unless otherwise expressed, all financial figures are expressed in Canadian dollars.

“Strong performance in the propane division in Q3 was complimented by significant year over year growth at Certarus. We are making excellent progress in our strategy to become a leader in low carbon energy distribution. Our continued focus on operational effectiveness, capital allocation and organic growth, is reflected in our Q3 results, and positions Superior Plus very well for continued improvement in performance leading into our historically strongest quarters,” said Allan MacDonald, President and Chief Executive Officer of Superior.

Segmented Information
			Three Months Ended						Nine Months Ended
			September 30						September 30
	(millions of dollars)		2023			2022			2023			2022
	EBITDA from operations(1)
	U.S. Propane Adjusted EBITDA(1)		(5.8	)		(10.9	)		188.7			168.2
	Canadian Propane Adjusted EBITDA(1)		4.3			3.6			83.7			86.5
	Wholesale Propane Adjusted EBITDA(1)		1.5			5.1			47.1			26.0
	Certarus pro forma Adjusted EBITDA(1)(2)		35.5			–			139.8			–
			35.5			(2.2	)		459.3			280.7
(1) EBITDA from operations and Adjusted EBITDA are Non-GAAP Financial Measures. See “Non-GAAP Financial Measures and Ratios” section below. (2) Certarus Adjusted EBITDA is pro forma for the nine months ended September 30, 2023 as the full economic benefit of the Certarus results were retained by Superior.

	Financial Overview
			Three Months Ended								Nine Months Ended
			September 30								September 30
	(millions of dollars, except per share amounts)			2023				2022				2023				2022
	Revenue			531.0				510.5				2,367.9				2,309.5
	Gross Profit			289.1				172.2				1,099.2				760.6
	Net loss for the period			(107.8	)			(206.9	)			(0.5	)			(150.9	)
	Net loss for the period attributable to Superior per share, diluted		$	(0.46	)		$	(1.06	)		$	(0.09	)		$	(0.88	)
	EBITDA from operations(1)			35.5				(2.2	)			367.6				280.7
	Adjusted EBITDA(1)			25.8				(8.8	)			338.0				267.2
	Adjusted EBITDA per share(1)(2)		$	0.09			$	(0.04	)		$	1.34			$	1.20
	Net cash flows (used in) from operating activities			52.6				(11.4	)			512.2				213.4
	Net cash flows from (used in) operating activities per share, diluted(2)		$	0.19			$	(0.05	)		$	2.03			$	0.96
	Cash dividends declared on common shares			44.8				36.3				125.8				104.3
	Cash dividends declared per share		$	0.18			$	0.18			$	0.54			$	0.54
(1) EBITDA from operations and Adjusted EBITDA are Non-GAAP Financial Measures. See “Non-GAAP Financial Measures and Ratios” section below. (2) The weighted average number of shares outstanding for the three and nine months ended September 30, 2023 was 278.8 million and 252.4 million, respectively (three and nine months ended September 30, 2022 was 231.7 million and 222.8 million, respectively). The weighted average number of shares assumes the exchange of the issued and outstanding preferred shares into common shares. There were no other dilutive instruments for the three and nine months ended September 30, 2023 and 2022.

Quarterly Dividend

• Superior is declaring a quarterly common share dividend of $0.18 per share, payable to shareholders of record as of December 29, 2023. The common share dividend will be payable on January 15, 2024.

Corporate Governance

• Following the departure of Angelo Rufino from Brookfield and his resignation from Superior’s board of directors effective today, Superior is pleased to be welcoming Michael Horowitz, Managing Director of Brookfield, who joins Superior’s board as Brookfield’s nominee under the terms of their investment. Mr. Horowitz, who is responsible for investment origination, analysis and execution for the Brookfield Special Investments Fund has been an active, collaborative partner to Superior since Brookfield’s initial investment in July 2020.

Normal Course Issuer Bid

• The NCIB will commence on November 10, 2023 and will terminate on the earlier of November 9, 2024, the date on which Superior has purchased the maximum number of Common Shares permitted under the NCIB or the date on which Superior terminates the NCIB in accordance with its terms.
• The NCIB is intended to augment Superior’s ongoing return of capital to shareholders through dividends. Superior believes that, from time to time, the Common Shares trade in price ranges that do not fully reflect their value. In such circumstances, Superior believes that acquiring its Common Shares represents an attractive and desirable use of funds.
• Under the NCIB, Superior may, over a 12-month period commencing on November 10, 2023, purchase in the normal course through the facilities of the TSX, or Canadian alternative trading platforms, if eligible, up to 12,427,942 Common Shares, such amount representing 5% of the 248,558,857 Common Shares issued and outstanding as at October 27, 2023. Purchases under the NCIB will be subject to certain pricing limits set by the board of directors of Superior from time to time. Furthermore, subject to certain exemptions for block purchases, the maximum number of Common Shares that Superior may acquire on any one trading day is 201,908 Common Shares, such amount representing 25% of the average daily trading volume of the Common Shares of 807,635 for the six calendar months prior to the start of the NCIB. All Common Shares purchased by Superior under the NCIB will be cancelled.
• Superior has engaged a broker to administer the NCIB. Superior will also enter into an automatic purchase plan (“APP”) with its broker in relation to the NCIB to facilitate purchases of Common Shares under the NCIB at times when Superior normally would not be active in the market due to its own internal trading blackout periods, insider trading rules or otherwise. Pursuant to the APP, from time to time, when Superior is not in possession of material non-public information about itself or its securities, Superior may, but is not required to, direct its broker to make purchases of Common Shares under the NCIB during an ensuing trading blackout period. Such purchases will be based on trading parameters established by Superior prior to the trading blackout period in accordance with the rules of the TSX, applicable securities laws and the terms of the APP.
• Superior’s previous NCIB, in respect of which Superior sought and received approval from the TSX, authorized the purchase of up to 10,085,599 Common Shares and expired on October 12, 2023. Under Superior’s previous NCIB, a total of 1,732,442 Common Shares were purchased by Superior through the facilities of the TSX and Canadian alternative trading platforms at a volume weighted average price of $9.94 per Common Share. During the third quarter, Superior repurchased and cancelled 727,800 shares under its previous NCIB.

MD&A and Financial Statements

Superior’s MD&A, the unaudited Consolidated Financial Statements and the Notes to the unaudited Consolidated Financial Statements as at and for the quarter ended September 30, 2023 provide a detailed explanation of Superior’s operating results. These documents are available online on Superior’s website at Superior Plus Financial Reports and on SEDAR under Superior’s profile at SEDAR+.

2023 Third Quarter Conference Call

A conference call and webcast to discuss the 2023 third quarter financial results will be held at 10:00 AM EST on Wednesday, November 8, 2023. To register as a participant, please use the following link: Register Here. The webcast will be available live and for replay on Superior’s website at: https://www.superiorplus.com/ under the Events section.

About Superior Plus

Superior is a leading North American distributor of propane, compressed natural gas, renewable energy and related products and services, servicing approximately 936,500 customer locations in the U.S. and Canada. Through its primary businesses, propane distribution and compressed natural gas, renewable natural gas and hydrogen distribution, Superior safely delivers clean burning fuels to residential, commercial, utility, agricultural and industrial customers not connected to a pipeline. By displacing more carbon intensive fuels, Superior is a leader in the energy transition and helping customers lower operating costs and improve environmental performance.

Forward-Looking Information

Certain information included herein is forward-looking information within the meaning of applicable Canadian securities laws. Forward-looking information may include statements regarding the objectives, business strategies to achieve those objectives, expected financial results (including those in the area of risk management), economic or market conditions, and the outlook of or involving Superior and its businesses. Such information is typically identified by words such as “anticipate”, “believe”, “continue”, “estimate”, “expect”, “plan”, “forecast”, “future”, “outlook, “guidance”, “may”, “project”, “should”, “strategy”, “target”, “will” or similar expressions suggesting future outcomes.

Forward-looking information in this document includes: Superior’s future financial position, expected 2023 Adjusted EBITDA pro forma the Certarus acquisition, expected Adjusted EBITDA of Certarus for 2023, and expected Leverage Ratio for the remainder of 2023.

Forward-looking information is provided to provide information about management’s expectations and plans for the future and may not be appropriate for other purposes. Forward-looking information herein is based on various assumptions, and expectations that Superior believes are reasonable in the circumstances. No assurance can be given that these assumptions and expectations will prove correct. Those assumptions and expectations are based on information currently available to Superior, including information obtained from third-party industry analysts and other third-party sources, and the historic performance of Superior’s businesses and businesses it plans to acquire or has acquired. Superior cautions that the assumptions used to prepare such forward-looking information, including Superior’s estimated Adjusted EBITDA pro forma the Certarus acquisition, Certarus’ estimated 2023 Adjusted EBITDA and Superior’s Leverage Ratio for the remainder of 2023 could prove to be incorrect or inaccurate.

In preparing the forward-looking information, Superior considered numerous economic and market assumptions regarding foreign exchange rates, competition, expected average weather and economic performance of each region where Superior and Certarus operate, including key assumptions listed under the heading “Financial Outlook” in Superior’s 2023 Third Quarter MD&A.

Additional key assumptions or risk factors with respect to the forward-looking information include, but are not limited to no material divestitures; anticipated financial performance; current business and economic trends; and the amount of future dividends paid by Superior.

Other particular, key assumptions and expectations underlying Superior’s pro forma Adjusted EBITDA guidance range include a Certarus average MSU count of 660 to 670 trailers in 2023 and Superior corporate costs in the range of $30 million to $35 million.

The forward-looking information is also subject to the risks and uncertainties set forth below. By its very nature, forward-looking information involves numerous assumptions, risks and uncertainties, both general and specific. Should one or more of these risks and uncertainties materialize or should underlying assumptions prove incorrect, as many important factors are beyond our control, Superior’s actual performance and financial results may vary materially from those estimates and intentions contemplated, expressed or implied in the forward-looking information. These risks and uncertainties include risks relating to incorrect assessments of value when making acquisitions, failure to realize expected cost-savings and synergies from acquisitions, increases in debt service charges, colder average weather than anticipated, the loss of key personnel, fluctuations in foreign currency and exchange rates, fluctuations in commodity prices, increasing rates of inflation, inadequate insurance coverage, liability for cash taxes, counterparty risk, compliance with environmental laws and regulations, reduced customer demand, operational risks involving our facilities, force majeure, labour relations matters, our ability to access external sources of debt and equity capital, and the risks identified in (i) our MD&A under the heading “Risk Factors” and (ii) Superior’s most recent Annual Information Form. The preceding list of assumptions, risks and uncertainties is not exhaustive. When relying on our forward-looking information to make decisions with respect to Superior, investors and others should carefully consider the preceding factors, other uncertainties and potential events. Any forward-looking information is provided as of the date of this document and, except as required by law, Superior does not undertake to update or revise such information to reflect new information, subsequent or otherwise. For the reasons set forth above, investors should not place undue reliance on forward-looking information.

Non-GAAP Financial Measures and Ratios

Throughout this news release, Superior has identified specific terms, including ratios, that it uses that are not standardized measures under International Financial Reporting Standards (“Non-GAAP Financial Measures”) and, therefore may not be comparable to similar financial measures disclosed by other issuers. Reconciliations of these Non-GAAP Financial Measures to the most directly comparable financial measures in Superior’s annual financial statements are provided below. Certain additional disclosures for these Non-GAAP Financial Measures, including an explanation of the composition of these financial measures, how they provide helpful information to an investor, and any additional purposes management uses for them, are incorporated by reference from the “Non-GAAP Financial Measures and Reconciliations” section in Superior’s 2023 Third Quarter MD&A dated November 7, 2023, available on www.sedarplus.com.

Adjusted EBITDA is consistent with the Segment profit and (loss) disclosed in Note 19 Reportable Segment Information of the interim financial statements for the three and nine months ended September 30, 2023. EBITDA from operations is the sum of U.S. Propane, Canadian Propane, Wholesale Propane and Certarus Segment profit and (loss).

Leverage Ratio is determined by dividing Superior’s Net Debt by its Pro Forma Adjusted EBITDA, both of these components are Non-GAAP Financial Measures. Proforma Adjusted EBITDA is Adjusted EBITDA calculated on a 12-month basis giving effect to acquisitions adjusted to the first day of the calculation period. Proforma Adjusted EBITDA was calculated by taking the sum of the nine months ended September 30, 2023 Adjusted EBITDA ($338.0 million), the 2022 annual Adjusted EBITDA ($449.8 million) and the proforma adjustment for acquisitions ($131.3 million) and subtracting the nine months ended September 30, 2022 Adjusted EBITDA ($267.2 million). Net Debt is determined as the sum of borrowings including deferred financing fees and lease liabilities ($2,475.9 million) reduced by cash and cash equivalents ($40.6 million) as at September 30, 2023.

Contacts

FOR MORE INFORMATION

Superior Plus Corp.
Website: www.superiorplus.com
E-mail: investor-relations@superiorplus.com
Toll-Free: 1-866-490-PLUS (7587)

Grier Colter, Chief Financial Officer

Tel: (416) 340-6015

Adam Kurnik, Manager, Corporate Finance & Investor Relations

Tel: (416) 340-6006