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TORONTO--(BUSINESS WIRE)--Nov 9, 2022--
Superior Plus Corp. (“Superior”) (TSX: SPB) announced today its financial and operating results for the third quarter ended September 30, 2022. Unless otherwise expressed, all financial figures are expressed in Canadian dollars.
1 Adjusted EBITDA is not a standardized measure under International Financial Report Standards (“IFRS”). See “Non-GAAP Financial Measures and Reconciliations” section below. |
In announcing these results, Luc Desjardins, President and Chief Executive Officer said, “Our third quarter results were in line with our expectations and, based on our year-to-date performance, we are confirming our 2022 Adjusted EBITDA guidance range. Our sales volumes in the U.S. were higher due to the acquisitions completed in the past nine months, including Kamps Propane, Kiva Energy and the assets of the Quarles Delivered Fuels business. During the quarter, we also made great progress on the integration of the Quarles and Kamps acquisitions ahead of the heating season. These efforts will allow us to make operational improvements on the businesses sooner than anticipated.”
Mr. Desjardins continued, “Consistent with our dynamic capital allocation approach communicated at our Investor Day in 2021, we commenced a normal course issuer bid on October 13, 2022, which provides us with an opportunity to return capital to shareholders and affirms our commitment to creating long-term shareholder value. We also completed three tuck-in acquisitions in Ontario, North Carolina and California as we continue to execute our growth through acquisition strategy in the U.S. and Canada. With these three acquisitions, we achieved the low end of our 2022 acquisition target range of $200 million to $300 million in enterprise value, excluding the Kamps acquisition.”
Financial Highlights:
2 EBITDA from operations, corporate costs and AOCF before transaction and other costs are not standardized measures under International Financial Report Standards (“IFRS”). See “Non-GAAP Financial Measures and Reconciliations” section below. |
Acquisition Update
Update on the Integration of Prior Acquisitions and Anticipated Synergies
Normal Course Issuer Bid
| Financial Overview |
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| Three Months Ended | Nine Months Ended | ||||||||||
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| September 30 | September 30 | ||||||||||
| (millions of dollars, except per share amounts) |
| 2022 |
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| 2021 |
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| 2022 |
|
| 2021 |
|
| Revenue |
| 510.5 |
|
| 362.6 |
|
| 2,309.5 |
|
| 1,567.7 |
|
| Gross Profit |
| 172.2 |
|
| 132.6 |
|
| 760.6 |
|
| 630.8 |
|
| Net earnings (loss) from continuing operations |
| (206.9 | ) |
| (35.9 | ) |
| (150.9 | ) |
| 3.4 |
|
| Net loss from continuing operations attributable to Superior per share, basic and diluted (3) | $ | (1.06 | ) | $ | (0.24 | ) | $ | (0.88 | ) | $ | (0.08 | ) |
| EBITDA from operations (1) |
| (2.2 | ) |
| 13.4 |
|
| 280.7 |
|
| 266.8 |
|
| Adjusted EBITDA (1) |
| (8.8 | ) |
| 13.0 |
|
| 267.2 |
|
| 256.2 |
|
| Net cash flows from (used in) operating activities |
| (11.4 | ) |
| (3.3 | ) |
| 213.4 |
|
| 226.2 |
|
| Net cash flows from (used in) operating activities per share, diluted (3) | $ | (0.05 | ) | $ | (0.02 | ) | $ | 0.96 |
| $ | 1.10 |
|
| AOCF before transaction and other costs (1)(2) |
| (32.9 | ) |
| (4.8 | ) |
| 205.1 |
|
| 189.5 |
|
| AOCF before transaction and other costs per share, basic and diluted (1)(2)(3) | $ | (0.14 | ) | $ | (0.02 | ) | $ | 0.92 |
| $ | 0.92 |
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| AOCF (1) |
| (47.2 | ) |
| (11.7 | ) |
| 171.2 |
|
| 168.9 |
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| AOCF per share, basic and diluted (1)(3) | $ | (0.20 | ) | $ | (0.06 | ) | $ | 0.77 |
| $ | 0.82 |
|
| Cash dividends declared on common shares |
| 36.3 |
|
| 31.7 |
|
| 104.3 |
|
| 95.1 |
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| Cash dividends declared per share | $ | 0.18 |
| $ | 0.18 |
| $ | 0.54 |
| $ | 0.54 |
|
(1) | EBITDA from operations, Adjusted EBITDA, AOCF before transaction and other costs, and AOCF are Non-GAAP measures. See “Non-GAAP Financial Measures”. | |
(2) | Transaction, restructuring and other costs are related to acquisition activities and the restructuring and integration of acquisitions. See “Transaction, restructuring and other costs” in the Third Quarter MD&A for further details. These expenses are included in SD&A and are disclosed in Note 16 of the unaudited condensed consolidated financial statements as at and for the three and nine months ended September 30, 2022 and 2021. | |
(3) | The weighted average number of shares outstanding for the three months and nine months ended September 30, 2022 was 231.7 million and 222.8 million (three months and nine months ended September 30, 2021 was 206.0 million). The weighted average number of shares assumes the exchange of the preferred shares into common shares. There were no other dilutive instruments with respect to AOCF per share and AOCF before transaction and other costs per share for the three months and nine months ended September 30, 2022 and 2021. |
Segmented Information |
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| Three Months Ended | Nine Months Ended | ||||
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| September 30 | September 30 | ||||
| (millions of dollars) | 2022 |
| 2021 |
| 2022 | 2021 |
| EBITDA from operations (1) |
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| U.S. Propane Adjusted EBITDA (1) | (10.9 | ) | (7.8 | ) | 168.2 | 146.3 |
| Canadian Propane Adjusted EBITDA (1) | 3.6 |
| 18.0 |
| 86.5 | 106.6 |
| Wholesale Propane Adjusted EBITDA (1) | 5.1 |
| 3.2 |
| 26.0 | 13.9 |
|
| (2.2 | ) | 13.4 |
| 280.7 | 266.8 |
(1) | EBITDA from operations and Adjusted EBITDA are not a standardized measure under IFRS. See “Non-GAAP Financial Measures” section below. Comparative figures have been restated to exclude the results of the Specialty Chemicals segment as a result of the announced divestiture and subsequent closing of the transaction. See the unaudited consolidated financial statements and notes thereto as at and for the three and nine months ended September 30, 2022 and 2021. |
Debt and Leverage Update
Superior is focused on managing both Total Net Debt and its Leverage Ratio. Superior’s Leverage Ratio on September 30, 2022 was 4.3x, an increase from 3.7x on June 30, 2022, primarily due to the increase in Total Net Debt and a decrease in Pro Forma Adjusted EBITDA. Total Net Debt increased primarily due to the impact of the higher USD/CAD rate at September 30, 2022 on U.S. denominated debt. On a constant currency basis, using the USD/CAD rate on June 30, 2022, Superior’s Leverage Ratio was 4.1x at September 30, 2022. Pro Forma Adjusted EBITDA decreased $21.6 million primarily due to lower EBITDA from operations and, to a lesser extent, higher corporate costs and a realized loss on foreign currency hedging contracts compared to a gain in the prior year quarter. EBITDA from operations decreased primarily due to the sale of carbon credits and the CEWS recorded in the prior year quarter. In the third quarter, the CEWS was $nil compared to $8.2 million in the prior year quarter, and the sale of carbon credits was $nil compared to $4.7 million in the prior year quarter.
MD&A and Financial Statements
Superior’s MD&A, the unaudited condensed Interim Consolidated Financial Statements and the Notes to the unaudited condensed consolidated financial statements as at and for the three and nine months ended September 30, 2022 provide a detailed explanation of Superior’s operating results. These documents are available online on Superior’s website at www.superiorplus.com under the Investor Relations section and on SEDAR under Superior’s profile at www.sedar.com.
2022 Third Quarter Conference Call
Superior will conduct a conference call and webcast for investors, analysts, brokers and media representatives to discuss the Third Quarter Results at 10:30 a.m. EST on Thursday, November 10, 2022. To listen to the live webcast, please use the following link: Register Here. he webcast will be available for replay on Superior's website at: www.superiorplus.com under the Events section.
Non-GAAP Financial Measures and Reconciliation
Throughout this news release, Superior has identified specific terms 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 Third Quarter 2022 MD&A dated November 9, 2022, available on www.sedar.com.
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For the Nine Months Ended September 30, 2022 | U.S. | Canadian | Wholesale | Results from | Corporate | Total | |||||||
Earnings (loss) from continuing operations before income taxes | (34.6 | ) | 34.0 |
| 1.9 |
| 1.3 |
| (199.7 | ) | (198.4 | ) | |
Adjusted for: |
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Amortization and depreciation included in SD&A | 114.3 |
| 51.1 |
| 9.8 |
| 175.2 |
| 0.6 |
| 175.8 |
| |
Finance expense | 4.5 |
| 2.4 |
| 0.8 |
| 7.7 |
| 48.8 |
| 56.5 |
| |
EBITDA | 84.2 |
| 87.5 |
| 12.5 |
| 184.2 |
| (150.3 | ) | 33.9 |
| |
Loss (gain) on disposal of assets and other | 1.7 |
| (1.5 | ) | (0.1 | ) | 0.1 |
| – |
| 0.1 |
| |
Transaction, restructuring and other costs | 16.9 |
| 0.5 |
| 0.5 |
| 17.9 |
| 16.0 |
| 33.9 |
| |
Unrealized loss on derivative financial instruments (1) | 65.4 |
| – |
| 13.1 |
| 78.5 |
| 120.8 |
| 199.3 |
| |
Adjusted EBITDA | 168.2 |
| 86.5 |
| 26.0 |
| 280.7 |
| (13.5 | ) | 267.2 |
| |
Adjust for: |
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Current income tax expense | – |
| – |
| – |
| – |
| (5.1 | ) | (5.1 | ) | |
Transaction, restructuring and other costs | (16.9 | ) | (0.5 | ) | (0.5 | ) | (17.9 | ) | (16.0 | ) | (33.9 | ) | |
Interest expense | (3.3 | ) | (2.4 | ) | (0.4 | ) | (6.1 | ) | (50.9 | ) | (57.0 | ) | |
AOCF | 148.0 |
| 83.6 |
| 25.1 |
| 256.7 |
| (85.5 | ) | 171.2 |
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For the Nine Months Ended September 30, 2021 | U.S. | Canadian | Wholesale | Results from | Corporate | Total | |||||||
Earnings (loss) from continuing operations before income taxes | 86.2 |
| 50.5 |
| 20.7 |
| 157.4 |
| (155.6 | ) | 1.8 |
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Adjust for: |
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Amortization and depreciation included in SD&A | 93.2 |
| 49.3 |
| 6.0 |
| 148.5 |
| 0.6 |
| 149.1 |
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Finance expense | 3.8 |
| 2.2 |
| 0.9 |
| 6.9 |
| 130.9 |
| 137.8 |
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EBITDA | 183.2 |
| 102.0 |
| 27.6 |
| 312.8 |
| (24.1 | ) | 288.7 |
| |
Loss on disposal of assets and other | 0.2 |
| 0.8 |
| – |
| 1.0 |
| – |
| 1.0 |
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Transaction, restructuring and other costs | 9.9 |
| 3.8 |
| – |
| 13.7 |
| 6.9 |
| 20.6 |
| |
Unrealized loss on derivative financial instruments (1) | (47.0 | ) | – |
| (13.7 | ) | (60.7 | ) | 6.6 |
| (54.1 | ) | |
Adjusted EBITDA | 146.3 |
| 106.6 |
| 13.9 |
| 266.8 |
| (10.6 | ) | 256.2 |
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Adjust for: |
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Current income tax expense | – |
| – |
| – |
| – |
| (8.3 | ) | (8.3 | ) | |
Transaction, restructuring and other costs | (9.9 | ) | (3.8 | ) | – |
| (13.7 | ) | (6.9 | ) | (20.6 | ) | |
Interest expense | (1.7 | ) | (1.6 | ) | (0.4 | ) | (3.7 | ) | (54.7 | ) | (58.4 | ) | |
AOCF | 134.7 |
| 101.2 |
| 13.5 |
| 249.4 |
| (80.5 | ) | 168.9 |
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(1) Unrealized loss on derivative financial instruments include the realized foreign exchange gain on the settlement of the US$350 million senior notes, see Note 13 of the unaudited condensed consolidated financial statements. | |||||||||||||
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For the Three Months Ended September 30, 2022 | U.S. | Canadian | Wholesale | Results from | Corporate | Total | |||||||
Loss from continuing operations before income taxes | (109.8 | ) | (13.9 | ) | (11.9 | ) | (135.6 | ) | (130.4 | ) | (266.0 | ) | |
Adjust for: |
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Amortization and depreciation included in SD&A | 43.5 |
| 17.2 |
| 4.2 |
| 64.9 |
| 0.2 |
| 65.1 |
| |
Finance expense | 1.7 |
| 0.9 |
| 0.4 |
| 3.0 |
| 19.7 |
| 22.7 |
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EBITDA | (64.6 | ) | 4.2 |
| (7.3 | ) | (67.7 | ) | (110.5 | ) | (178.2 | ) | |
Loss (gain) on disposal of assets and other | 0.1 |
| (0.8 | ) | – |
| (0.7 | ) | – |
| (0.7 | ) | |
Transaction, restructuring and other costs | 5.6 |
| 0.2 |
| 0.4 |
| 6.2 |
| 8.1 |
| 14.3 |
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Unrealized loss on derivative financial instruments | 48.0 |
| – |
| 12.0 |
| 60.0 |
| 95.8 |
| 155.8 |
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Adjusted EBITDA | (10.9 | ) | 3.6 |
| 5.1 |
| (2.2 | ) | (6.6 | ) | (8.8 | ) | |
Adjust for: |
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Current income tax expense | – |
| – |
| – |
| – |
| (1.6 | ) | (1.6 | ) | |
Transaction, restructuring and other costs | (5.6 | ) | (0.2 | ) | (0.4 | ) | (6.2 | ) | (8.1 | ) | (14.3 | ) | |
Interest expense | (1.2 | ) | (0.9 | ) | (0.1 | ) | (2.2 | ) | (20.3 | ) | (22.5 | ) | |
AOCF | (17.7 | ) | 2.5 |
| 4.6 |
| (10.6 | ) | (36.6 | ) | (47.2 | ) | |
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For the Three Months Ended September 30, 2021 | U.S. | Canadian | Wholesale | Results from | Corporate | Total | |||||||
Earnings (loss) from continuing operations before income taxes | (15.6 | ) | (0.1 | ) | 8.8 |
| (6.9 | ) | (44.2 | ) | (51.1 | ) | |
Adjust for: |
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Amortization and depreciation included in SD&A | 32.8 |
| 16.8 |
| 2.2 |
| 51.8 |
| 0.3 |
| 52.1 |
| |
Finance expense | 1.4 |
| 0.6 |
| 0.5 |
| 2.5 |
| 14.1 |
| 16.6 |
| |
EBITDA | 18.6 |
| 17.3 |
| 11.5 |
| 47.4 |
| (29.8 | ) | 17.6 |
| |
Loss on disposal of assets and other | 0.1 |
| 0.5 |
| – |
| 0.6 |
| – |
| 0.6 |
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Transaction, restructuring and other costs | 4.3 |
| 0.2 |
| – |
| 4.5 |
| 2.4 |
| 6.9 |
| |
Unrealized (gain) loss on derivative financial instruments (1) | (30.8 | ) | – |
| (8.3 | ) | (39.1 | ) | 27.0 |
| (12.1 | ) | |
Adjusted EBITDA | (7.8 | ) | 18.0 |
| 3.2 |
| 13.4 |
| (0.4 | ) | 13.0 |
| |
Adjust for: |
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Current income tax expense | – |
| – |
| – |
| – |
| (1.3 | ) | (1.3 | ) | |
Transaction, restructuring and other costs | (4.3 | ) | (0.2 | ) | – |
| (4.5 | ) | (2.4 | ) | (6.9 | ) | |
Interest expense | (1.0 | ) | (0.8 | ) | (0.2 | ) | (2.0 | ) | (14.5 | ) | (16.5 | ) | |
AOCF | (13.1 | ) | 17.0 |
| 3.0 |
| 6.9 |
| (18.6 | ) | (11.7 | ) | |
(1) Unrealized (gain) loss on derivative financial instruments includes the realized foreign exchange gain on the settlement of the US$350 million senior notes of $20 million, see Note 13 of the unaudited condensed consolidated financial statements. |
Total Net Debt to Adjusted EBITDA Leverage Ratio and Pro Forma Adjusted EBITDA
Adjusted EBITDA for the Total Net Debt to Adjusted EBITDA Leverage Ratio is defined as Adjusted EBITDA calculated on a 12-month trailing basis giving pro forma effect to acquisitions and dispositions adjusted to the first day of the calculation period (“Pro Forma Adjusted EBITDA”). Pro Forma Adjusted EBITDA is used by Superior to calculate its Total Net Debt to Adjusted EBITDA Leverage Ratio.
To calculate the Total Net Debt to Adjusted EBITDA Leverage Ratio divide the sum of borrowings before deferred financing fees and lease liabilities by Pro Forma Adjusted EBITDA. The Total Net Debt to Adjusted EBITDA Leverage Ratio is used by Superior and investors to assess its ability to service debt.
| September 30 | December 31 | ||
(in millions) | 2022 |
| 2021 |
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Current borrowings | 14.4 |
| 11.4 |
|
Current lease liabilities | 49.0 |
| 44.9 |
|
Non-current borrowings | 1,821.2 |
| 1,444.9 |
|
Non-current lease liabilities | 166.2 |
| 129.6 |
|
| 2,050.8 |
| 1,630.8 |
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Add back deferred financing fees and discounts | 19.1 |
| 22.1 |
|
Deduct cash and cash equivalents | (42.0 | ) | (28.4 | ) |
Net debt | 2,027.9 |
| 1,624.5 |
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Adjusted EBITDA for the year ended 2021 | 398.4 |
| 398.4 |
|
Adjusted EBITDA for the nine months ended September 30, 2022 | 267.2 |
| – |
|
Adjusted EBITDA for the nine months ended September 30, 2021 | (256.2 | ) | – |
|
Pro-forma adjustment | 58.7 |
| 18.4 |
|
Pro-forma Adjusted EBITDA for the year ended | 468.1 |
| 416.8 |
|
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Leverage Ratio | 4.3x | 3.9x |
Forward-Looking Information
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, Superior LP 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: future financial position, expected 2022 Adjusted EBITDA, expected run-rate synergies from acquisitions completed in 2022, expected run-rate synergies exiting the first quarter of 2024, expectations on operational improvements for the Kamps and Quarles acquisitions, and expected average weather for the remainder of 2022 consistent with the five-year average.
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 has acquired. Such assumptions include obtaining the expected synergies from the Kamps and Quarles acquisitions and other acquisitions consistent with historical averages at approximately 25% over the relevant period, no material divestitures, anticipated financial performance, current business and economic trends, the amount of future dividends paid by Superior, business prospects, utilization of tax basis, regulatory developments, currency, exchange and interest rates, future commodity prices relating to the oil and gas industry, future oil rig activity levels, trading data, cost estimates, our ability to obtain financing on acceptable terms, expected net working capital and capital expenditure requirements of Superior or Superior LP, and the assumptions set forth under the “Financial Outlook” sections of our MD&A. 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 or Superior LP’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 incorrect assessments of value when making acquisitions, increases in debt service charges, the loss of key personnel, the anticipated impact of the COVID-19 pandemic and the related public health restrictions, fluctuations in foreign currency and exchange rates, 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, neither Superior nor Superior LP undertakes 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.
For more information about Superior, visit our website at www.superiorplus.com
View source version on businesswire.com:https://www.businesswire.com/news/home/20221109006011/en/
CONTACT: Beth Summers ExecutiveVice President and Chief Financial Officer
Phone: (416) 340-6015Rob DorranVice President, Capital Markets
Phone: (416) 340-6003
Toll Free: 1-866-490-PLUS (7587)
KEYWORD: NORTH AMERICA CANADA
INDUSTRY KEYWORD: ENERGY UTILITIES OIL/GAS
SOURCE: Superior Plus
Copyright Business Wire 2022.
PUB: 11/09/2022 05:00 PM/DISC: 11/09/2022 05:02 PM
http://www.businesswire.com/news/home/20221109006011/en