Superior Announces Record First Quarter Adjusted EBITDA of $235.6 Million, Adopts U.S. Dollar Reporting and Maintains 2024 Adjusted EBITDA Growth Expectations

• Record first quarter 2024 Adjusted EBITDA(1) of $235.6 million represents a 15% increase from the prior year quarter, primarily from excellent performance at Certarus and resilience in our propane business in light of challenging weather patterns
• Certarus achieved a record quarter with Adjusted EBITDA(1) of $51.5 million, a 9% increase from the exceptionally strong prior year quarter and in line with management’s expectations
• U.S. Propane achieved growth of 1% in Q1 2024 compared to the prior year despite warmer weather
• Effective January 1, 2024, Superior began reporting results in U.S. dollars to improve year over year comparability given foreign exchange rate fluctuations, as the majority of its business activities are denominated in U.S. dollars
• Confirming 2024 Adjusted EBITDA(1) growth expectation of 5% compared to 2023 Pro Forma Adjusted EBITDA(1)
• Net earnings of $85.2 million in Q1 2024 compared to net earnings of $109.3 million in the prior year due to large unrealized derivative gains in Q1 2023

(1) Adjusted EBITDA and Pro Forma Adjusted EBITDA are Non-GAAP Financial Measures. See “Non-GAAP Financial Measures and Ratios” section below.

Superior Plus Corp. (“Superior” or “the company”) (TSX: SPB) today released its first quarter results for the period ended March 31, 2024. Unless otherwise expressed, all financial figures are expressed in U.S. dollars.

In announcing these results, Allan MacDonald, President and Chief Executive Officer said, “Superior’s Q1 results are a testament to the growth potential of Certarus and the resiliency of our propane distribution business. Despite unfavourable weather patterns compared to both the five-year average and the prior year quarter, the businesses were able to adapt to minimize the impact on earnings, with U.S. Propane Distribution producing modest earnings growth compared to the prior year quarter.”

Mr. MacDonald continued, “Certarus drove organic growth through the quarter in line with management expectations and above the historically strong $47.2 million of Adjusted EBITDA it generated in Q1 2023. The business continued to add and deploy new mobile storage units (“MSUs”) during the quarter to satisfy robust market demand for CNG, RNG and hydrogen, ending the quarter with 753 MSUs in its fleet.”

Segmented Information

(1) Adjusted EBITDA from operations and Adjusted EBITDA are Non-GAAP Financial Measures. See “Non-GAAP Financial Measures and Ratios” section below.

(1) Adjusted EBITDA from operations, Adjusted EBITDA and Adjusted EBTDA 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 months ended March 31, 2024 was 278.6 million (three months ended March 31, 2023 was 230.7 million). 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 months ended March 31, 2024 and 2023.

Debt and Leverage Update

• Superior is focused on managing both Net debt and its Leverage Ratio. Superior’s Leverage Ratio at March 31, 2024 was 3.8x, compared to 3.9x at March 31, 2023. Superior has continued to pursue its renewed organic growth focused strategy that will seek growth through self-funded reinvestment in the businesses. In line with this strategy, Superior still expects a ~0.2x reduction in its Leverage Ratio in 2024, with a long-term target of ~3.0x.

Quarterly Dividend

• Superior is declaring a quarterly common share dividend of CAD $0.18 per share, payable to shareholders of record as of June 28, 2024. The common share dividend will be payable on July 15, 2024.

MD&A and Financial Statements

Superior’s MD&A, the unaudited Consolidated Financial Statements and the Notes to the audited Consolidated Financial Statements as at and for the quarter ended March 31, 2024 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 Superior’s profile at SEDAR+.

2024 First Quarter Conference Call

A conference call and webcast to discuss the 2024 first quarter financial results will be held at 10:30 AM EST on Wednesday, May 15, 2024. To register as a participant, please use the following link: Register Here. The webcast will be available 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 770,000 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 2024 Adjusted EBITDA and expected Leverage Ratio for 2024.

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 expected 2024 Adjusted EBITDA and expected Leverage Ratio for 2024, 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 “Financial Outlook” sections in Superior’s 2024 First 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.

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 expectations 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. Information to reconcile these Non-GAAP Financial Measures to the most directly comparable financial measures in Superior’s annual financial statements is 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 2024 First Quarter MD&A dated May 14, 2024, available on www.sedarplus.com.

Adjusted EBITDA is consistent with the Segment profit (loss) disclosed in Note 18 Reportable Segment Information of the interim consolidated financial statements for the three months ended March 31, 2024. Adjusted EBITDA from operations is the sum of U.S. Propane, Canadian Propane, Wholesale Propane and Certarus Segment profit (loss). Adjusted EBITDA per share is calculated by dividing Adjusted EBITDA by the weighted average shares assuming the exchange of the issued and outstanding preferred shares into common shares. 2023 Pro Forma Adjusted EBITDA is used to provide 2024 guidance and only includes a pro forma adjustment related to Certarus for the period of January 1, 2023 to the date of the acquisition on May 31, 2023.

Superior changed the definition of Adjusted EBITDA from its historical definition to exclude the realized gains (losses) on foreign currency forward contracts and include unrealized gains (losses) related to equity derivatives. The foreign currency forward contracts were used to provide a hedge on the translation of U.S. denominated Adjusted EBITDA to Canadian dollars. As a result of the change in presentation currency, management is no longer hedging U.S. denominated Adjusted EBITDA and is excluding these realized gains (losses) from Adjusted EBITDA as there is no longer an offsetting gain (loss) on the translation of U.S. denominated Adjusted EBITDA. Management is currently not entering into similar instruments related to the translation of Canadian denominated Adjusted EBITDA. This change has been made retrospectively. In addition to the change in presentation currency, effective January 1, 2024 Superior implemented hedge accounting for Superior’s long-term incentive plan and related equity derivatives, and now includes these unrealized gains/losses as part of Adjusted EBITDA. The intention of this change in accounting policy is to reduce some of the volatility related to changes in Superior’s share price on the long-term incentive costs.

Adjusted EBTDA is calculated as Adjusted EBITDA less cash interest expense. Cash interest expense is the sum of interest on borrowings and interest on lease liability which are found in Note 14 Supplemental Disclosure of Consolidated Statements of Net Earnings (Loss) in the interim consolidated financial statements for the three months ended March 31, 2024. Cash interest expense for the three months ended March 31, 2024 and three months ended March 31, 2023 was $26.3 million and $18.4 million, respectively. Adjusted EBTDA per share is calculated by dividing Adjusted EBTDA by the weighted average shares assuming the exchange of the issued and outstanding preferred shares into common shares.

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 three months ended March 31, 2024 Adjusted EBITDA ($235.6 million), the 2023 annual Adjusted EBITDA ($414.7 million) and the proforma adjustment for acquisitions ($21.2 million) and subtracting the three months ended March 31, 2023 Adjusted EBITDA ($204.3 million). The proforma adjustment relates to Certarus and is calculated by taking the full 12-month net income of $55.1 million and adding amortization and depreciation ($64.4 million), finance expense ($6.1 million) and transaction costs ($12.9 million) resulting in 12-month Adjusted EBITDA of $138.5 million, of which $21.2 million was earned in Q2 2023 prior to acquisition. Net Debt is calculated by the sum of borrowings before deferred financing fees ($1,636.6 million) and lease liabilities ($173.7 million) reduced by cash and cash equivalents ($37.1 million) as at March 31, 2024.

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