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Executives

Grant Billing - Chairman

Nick Beuglet - Corporate Controller

Analysts

Superior Plus (OTC:SUUIF) Shareholder Analyst Call May 1, 2013 4:00 PM ET

Grant Billing

Good afternoon ladies and gentleman, welcome to the annual and special meeting of shareholders of Superior Plus Corp. I am Grant Billing, and is Chairman of Superior Plus, my responsibility and privilege to act as Chairman of the annual and special meeting.

Let me welcome all of you to the meeting and thank you for your interest in the affairs of Superior Plus. This meeting is also being live webcast and I would also like to welcome all of our listeners on the webcast.

Seated on my right is Luc Desjardins, President and Chief Executive Officer, Superior Plus; next to him on the right is Wayne Bingham, Executive Vice President and Chief Financial Officer; as well as Ross Wonnick, Chief Legal Officer, Superior Plus who will act as secretary of the meeting.

Scrutineers in the meeting today, (inaudible) French and Stefan Vendola of Computershare Trust Company of Canada. If there are any shareholders or proxy holders present who have not registered with our transfer agent at the registration desk, please go there now to be registered for the affairs.

Immediately following the formal part of the meeting Luc will provide a presentation on Superior Plus’ performance and outlook following those remarks, we'll have a chance for a question and answer period for all of those that are in attendance. I have received an affidavit from the officer of Computershare that proper notice of the meeting has been given and that the notice information circular and formal proxy were mailed on March 18, 2013 to all shareholders of record as of March 5, 2013.

The 2012 annual report which included the audited financial statements for the year ended December 31, 2012 was also mailed to those shareholders who were elected to receive this document. I directed the affidavit together with a copy of the document mailed to shareholders be annexed to the minutes of the meeting and that the affidavit will be available for inspection by shareholders on request.

I am advised by the scrutineers that there is a quorum present. The scrutineers report is available for inspection by any shareholder following the meeting. I declare that this meeting is properly convened and regularly constituted for the transaction of business. I now ask the secretary to table the minutes of the annual meeting of shareholders held on May 2, 2012. These minutes will be available for inspection by any shareholder after the meeting.

Only a registered shareholder or person appointed as proxy holder of such a shareholder is entitled to make or second motions or to vote at this meeting. In order to ensure the meeting covers the required business in an efficient manner we have prearranged with representatives of Superior Plus who are shareholders to move and second the motions of the business. Unless otherwise requested voting on the election of directors and appointment of law auditors will be conducted by the way of show of hand.

If you have any questions or comments on a specific motion, I ask you to please raise your hand have the (inaudible) master will bring the microphone to you. Please identify yourself before bringing forth your questions or comments. The board of Superior Plus court is comprised of 10 members with extensive business and board experience; is responsible for overseeing the management of the operations of Superior Plus.

Of the 10 board members Luc is the only director and is also a member of management and therefore not considered independent under regulatory rule. As former Chief Executive Officer I am also not considered independent for a three year period under the regulatory rules.

Peter Green continues to serve as Lead Director of the board to ensure greater independence of the board for management. You will find information and disclosure on our existing corporate governance process in the information circular. Your board is committed to ensuring that Superior Plus continues to carry out high standards of corporate governance.

I would like to now take a minute to introduce you the directors who are with us today, each of whom is standing for re-election at this meeting. I ask that the directors please stand when I call you name. Kay Best, Former Executive Vice President – Risk Management and Chief Financial Officer of the of the Calgary Health Region. Kay has served on the board since July of 2007. While we have already introduced Luc who joined Superior Plus as a Chief Executive Officer and a Member of the Board in November of 2011. Bob Engbloom, partner and Deputy Chairman of the law firm of Norton Rose Canada in Calgary Bob has served on the Board since 1996. Randy Findlay, Corporate director and former president of Provident Energy Randy joined the board in March of 2007. Norm Gish Corporate, Director and independent businessman Norm is former president of Gish Consulting and former Chairman, President and CEO of Alliance Pipeline and Aux Sable Liquid Products. Norm joined the Board on October of 2003 and is Chairman of the compensation committee. Peter Green is chairman of Frog Hollow Corporation international business advisors and former Chairman of Patheon Inc. a global pharmaceutical company. As previously mentioned Peter is our lead director he also served as our director since 1996 and was Chairman of Superior Plus Income Fund between 1996 and 2003 when we did our conversion.

Peter is Chairman of the governance and nominating committee. Jim MacDonald is the non-executive Chairman of non-executive Chairman of Cormark Securities and former managing partner of Enterprise Capital Management in Toronto. Jim initially served on the board of ICG propane in 1998 and then joined the board of Superior Plus in 2000 when we merged. Wal Mirosh is a Corporate Director and former Vice President of NOVA Chemicals Corp a producer and marketer of ethylene, polyethylene and styrenics. Wal joined the board in March 2007. and David Smith is Corporate Director and former managing partner of Enterprise Capital Management. David was first appointed as a Director 1998 and currently serves as chairmen of the audit committee. ladies and gentlemen that is your proposed board of directors.

I will now proceed with the formal business of the meeting. the number of directors to be elected at this meeting has been fixed at 10. it is now in order to proceed with election of 10 directors of Superior Plus Corp. the proxy circulated list of nominees for election for the ensuring year. may I have a nomination?

Unidentified Company Representative

It's (inaudible) Riley, Associate General Counsel at Superior Plus and I am a shareholder I nominate the following person for election as directors of Superior Plus Corp to hold office until the next annual meeting or until their successors are elected or appointed. Kay Best, Grant Billing, Luc Desjardin, Robert Engbloom, Randall Findlay, Norm Gish, Peter Green, James MacDonald, Walentin Mirosh, David Smith.

Unidentified Company Representative

Any further nominations? I now declare nominations closed. the voting for directors is by individual director and not by way of slate. nonetheless since the number nominees does not exceed the number of directors to be elected at this meeting, each of the nominees will be elected as directors. on this basis may I have a motion to elect the nominees as director of Superior Plus Corp.

Nick Beuglet - Corporate Controller

My name is Nick Beuglet Corporate Controller of Superior Pus. I am shareholder and I move to the 10 persons who have been nominated be elected as directors as directors of Superior Plus Corp to hold office until the next annual meeting or until their successors are elected or appointed.

Unidentified Company Representative

Most of the directors know who I am and I hope most of them shudder. I am (inaudible) I am a shareholder I have the proxies and the voting rights for the shares for my company which is oil and gas company and an investment company. we are voting on the directors and any of you who know me know that I usually standup and do not care for the directors that are being voted in especially those directors who have numerous directorships and therefore I feel they don't have enough time for Superior. one of our directors is Best for which tells me we get maybe one day out of a week out of her and yes a compensation certainly suggest we should get more than one day a week.

In total, our directors are being paid 1.2 million that comes off the bottom line and I have great problems with one director who used to be our CEO but seems to have managed to turn that around and now has offer (inaudible) to directorship list and has become nonofficial director or ex-director or some sort of a director. (Mr. Billings) I’m speaking about be paid $203,000. Again it’s just way too much for the amount of work that we get out of these gentlemen and I am just not for. part of the slate that we are supposed to vote for are on the compensation committee. In particular we’re talking about Mr. Gish, we are talking about Mr. McDonald and Mr. (inaudible).

And they in our Infinite Wisdom has increased the CEO salary from 2008 which should be 2.3 million all way up to 3.3 million. I don’t think that’s very good directorship. A 1 million increase in five years, how many of us got a $1 million increase in five years. I doubt its none of us probably and I assure the CEO of Superior. That’s what the directors are doing and therefore I’ll say next time around because I know the chu chu train you’ve all voted already and I know the directors have more votes than the rest of us. But I would say that the truly independent minority shareholder, I would urge you to vote against these directors next time around and if you haven’t yet vote, vote against. Thank you.

Unidentified Company Representative

Thank you for your comments. There are always different views on all of these various subjects but thank you for your comments. Is there seconder for the motion?

Unidentified Analyst

My name is Rob Doran, Manager Financial Planning and Superior Plus and I’m a shareholder, I second the motion.

Unidentified Company Representative

There is any discussion? I guess we had the discussions. All those in favor please designate by raising your hands. I declare the person is nominated have been duly elected as directors of Superior Plus until the close of the next annual meeting or until our successors are elected or appointed.

Anyone against there. Thank you very much. We will record this, there was someone against. Thank you. And now tabling the 2012 annual report which includes the consolidated financial statements and the auditor's report there on. The annual report was duly mailed to those shareholders that are requested to receive it additional copies were also made available to you as you entered the meeting.

I do not propose to read the auditor's report at this time. Our next item is related to the reappointment of Deloitte LLP as the auditor of Superior Plus Corp. The order committee and the Directors recommended that the present auditors at Superior Plus Deloitte LLP be reappointed.

May I have a motion?

Unidentified Company Representative

I move that Deloitte LLP be reappointed auditor of Superior Plus Corp. to hold office until the next annual meeting or until the successors are appointed at such remuneration as maybe fixed by the directors of Superior Plus Corp. and such Directors are here by authorized fixed such remuneration.

Unidentified Company Representative

Thank a lot. Is there are seconder?

Unidentified Company Representative

I second the motion.

Unidentified Company Representative

Thanks a lot. Any discussion? All those in favor of the motion please signify by raising your hand. Contrary if any, missed it last time. Motion is carried.

That concludes the formal part of the meeting. Is there any other business to come before the meeting? If not, I’ll entertain the motion to conclude the meeting.

Unidentified Company Representative

I move that the meeting be concluded.

Unidentified Company Representative

I second the motion.

Unidentified Company Representative

All those in favor of the motion please signify in the usual manner. Contrary? Carried.

Ladies and gentlemen, that’s the boring part of the meeting. I declare the meeting concluded and we’ll turn it over to Luc to give us good update on Superior Plus' business.

Luc Desjardins

Thank you, Wayne. Good afternoon everyone. Good afternoon and welcome to Superior Annual General Meeting. So 2012 was a successful year for Superior and although much work remained Superior in 2013 and beyond. Myself and the Superior leadership team are optimistic of both Superior’s current and future prospect.

I want to start the presentation by providing a brief overview of Superior for any shareholders that may not be as familiar with our businesses. much of this slide is summary information that I would like to highlight just a few points.

First one is Superior is and remain committed to improving our business by running them as efficiently as possible, relatively remain committed to reducing our total debt as we will highlight later in this presentation we have made tremendous progress on day debt reduction in 2013.

And why we’re happy with the progress, we have not lost sight of one of our objective to continue to reduce our leverage with this in mind gross to a significant acquisition is not an area of focus for Superior for 2013 now under financial summary so as I previously mentioned 2012 was without a doubt successful for Superior and I’ll repeat report of superior general adjusted operating cash flow for share was $1.73 and improvement comforted to the previous year.

In addition, we continue to reduce our total debt leverage ending 2012 at 4.5 times as compared to 5.1 times a year before. Capital markets were receptive to Superior’s strategy and performance in 2012 resulting and total return to shareholder of 89%, so the first quarter of 2013 which probably most interested about and with the solid one for superior.

We were able to realize adjusted operating cash flow of $0.72 comfort to $0.60 per share in the prior year. The increase in cash flow was the result was improved result and three Superior businesses with the largest contributor been improved energy service result which benefited from a return to normal temperature throughout the first quarter as comforted the previous year.

And then in addition, the energy service result benefited from many initiatives that are duly getting executed on by the management. I am also happy to report the Superior successfully close an issue of common share for net proceeds of 138 million during the first quarter.

The equity issue allows for Superior to accelerate its debt reduction plan and as a result Superior finishes first quarter with a total debt to EBITDA leverage of 3.7% which comes first to 4.4 at December 31, 2012. I would like thank our underwriters and Superior financial team for the strong support and execution during this very successful transaction.

As part of Superior’s first quarter result Superior confirmed its previously provided 2013 fiscal guidance of AOCF of $1.55 to $1.85 per share. Superior’s businesses continue to perform well and I’m optimistic that 2013 will be another solid year for the corporation.

In general just to talk a bit briefly about the industry fundamental of each of our businesses. In general, our energy service business continue to have strong fundamentals and particular Superior anticipate that the reduced cost of wholesale propane which has been a team for the last year will continue in their foreseeable future giving the active drilling of liquid risk natural gas combined with the limited infrastructure to transport this product to overseas markets.

The low price environment is a positive for the Superior company and our customers. it reduce the absolute cost of their product and result in a market conducive to substitution to propane from hopefully some of our competing products. We continue to take steps, we have felt necessary to rebuild the operation of our energy business in particular the Canadian propane business. During 2012, we have rebuilt the leadership team across many level of the organization.

We have also begun to focus on building our comprehensive sales in marketing function within the business in order to become more customer-centric. These changes should generate internal growth and improve margins. I am pleased to report that we are already beginning to realize some of those improvements as you could see with the quarter 1 results and these actions including improved average sales margin and a significant reduction in attrition of our residential customer base is a good thing for our company.

In the U.S. refining, fuel business sales volume of heating oil continue to decline, another good thing but we continue to focus our efforts on growing the propane portion of the U.S. business and that has been successful in replacing some of the heating oil customer with higher margin propane customer.

We have also successfully restructured our original three year rate acquisition into one business therefore reducing our operating cost during 2012. Now the fundamentals of our chemical business continue to be strong as well. sodium chlorides sales volume and pricing continue to be stable due in part to stability within the pulp market which has resulted in an approved North American chloride sales volumes.

The chloralkali portion of our chemical business has been somewhat more challenging as pricing of these products particularly in recent quarters, chorine has been soft due to weaker than anticipated demand. Historically the pricing of chloralkali products fluctuate with supply and demand and in some case the impact of seasonality. Overall, we are very positive about the chloralkali market particularly when you take in to consideration the strategic advantage (inaudible) because of our location, our two facilities one at Port Edwards, Wisconsin and the second one Saskatoon, Saskatchewan.

With respect to our construction product business which has dealt very challenging market conditions over the last several years, we remain cautiously optimistic that the fundamentals within this business will continue to improve albeit at slow and measured manner.

Recent indication of the U.S. which shows the new residential construction starts for 2013 will be in the range of $950,000, quite a lot more than last year while the overall north American construction market is still subject to challenging conditions, we are encouraged by and that we continue to see concrete evidence that we are on the path to recovery within a construction sector for the U.S. portion of our business.

Superior continues to focus on improving its day-to-day operation so that improvement in the business will not solely depend on the end use market.

As I previously mentioned that 2013 was going to be an important year for Superior, now further to that I would like to spend a minute to provide a bit more clarity and explanation as to where our efforts are going to be for 2013.

Top priorities, execution of the initiatives is about five of them that we have previously applying that underpin what we called destination 2015, that’s about five initiatives per business. Continuing to become more customer-centric in all aspect of our business which means understanding our customer by segment, findings ways to differentiate our products and services which is always possible which will allow us to reduce our customer attrition and generate some internal growth at the margin.

We will also continue to focus on intelligence pricing, overall supply change management and improving all aspects of our asset utilization to something we can do. We will continue to focus on reducing our total debt with our short term objective of reducing our total debt leverage to 2.5 by yearend. We'll continue to improve our core business processes which will allow us to reduce our cost structure to get a sustainable way of reducing cost and operating properly in the years to come. We will continue to invest in our businesses as evident for the capital investment in our chemical and energy businesses, investing in sales marketing function to improve our market share, investing in people, investing in system to build a better overall solid sustainable business for the mid and the long term. Most specifically, superior is investing 42 million in capital to double our specialty chemical businesses capacity to produce hydrochloric acid. Although the financial benefits will be realized in 2014 and 2015, a significant amount of the effort will go into these projects throughout 2013.

An additional investment has been made and our new IT system with our Canadian propane business. The majority of the ADD IT system is anticipated to be rolled out throughout 2013. The system would allow our Canadian propane business to improve customer service level and improve our day to day operational decision making and our cost structure as we redesign our processes from coast to coast across Canada and everything we do.

Lastly we will continue to asses our talent across the entire organization to ensure we have the right people in key position to facilitate and lead the execution of our short, midterm and long term business plan. We're currently continuing to assess long term organizational design and the number of our businesses and most importantly accountability for execution of all of our 2013 initiatives which will be a priority across the entire organization.

I have discussed in the past, Superior has set a goal of becoming best in class operator in all the business we operate. This business transformation project has been internally labeled destination 2015. Destination 2015 is not just about short time financial performance improvement. (Inaudible) about transforming spirit to best of class business installing a culture of continuous improvement, so that Superior is the necessary foundation to achieve medium and long term improvement. That will benefit our customer, our shareholder and employees for many years to come.

Although I previously mentioned that the objective of this nation 2015 is to provide long term sustainability improvement of the business. The reality is that we will also realize benefit in the short term. Superior will begin to realize some of these benefits in 2013 and throughout up to 2015 for destination and beyond.

Superior is anticipating that an improvement IOCF, 7% to 10% per year during that three years period. I'd like to provide with a bit more tangible detail as to where we will drive improvement in our financial performance as a result of Destination 2015. First, we start with the top line, every business starts with markets and customer, everything Superior does starts with that market and those customers. We intend to grow our revenues and our market share faster than our competition, we're not there yet, we won't be there this year. We can guarantee you, one day it's going to happen within a few years from now. We intend to grow by focusing on the needs of our customers and understanding our cost to serve these customers, we can not only attract new customers but will insure that we're pricing a good and services and most intelligent matter possible.

On the expense reduction, as I have previously mentioned and many times Superior will not cut cost for the sake of cutting cost to generate short term financial improvement. That's not in our DNA, that's not what we do for living. My goal is to create and facilitate the foundation of long term sustainable growth. We're focused on streamlining our internal processes and procedure to ensure we're conducting business and are efficient in customer friendly matter. A highly efficient business will result in improved efficiency level which will ultimately quite rapidly translates into lower costs of all level of the organization. That's what comes first as we gather our process and our business mechanic who are earning properly. The third one; investing in our business, nothing comes free, you don’t build a good corporation three five years from now by not investing something.

As I previously discussed in their action item in 2013, Superior intend to keep investing in their business, project ADD IT and propane; FCL project and article are evidence of this. It is important that we continue to invest in their businesses to normally ensure we improve the efficiency cost structure and our March position for intimately investing in our businesses today we'll create the platform for our future to grow success or medium long term, best cooperation and all the stack holders should win and we will win.

We will continue to focus on ensuring; we minimize our working capital level, we are possible. Ultimately this gets back to running our business in an efficient manner. As we continue to make improvement to our process and system, we will be able to improve our assets utilization and reduce therefore a working capital's requirement.

I can assure you that our management team would; many of them are here today; execution of all of our priorities are in the center of our daily, weekly, monthly and often weekend discussion. We have implemented processes and key performance indicator throughout the entire organization to ensure we do not lose focus on our goals related to the destination 2015 project.

Execution is and will remain a top priority for our organization as a whole and forever. So, our intent today was to provide you with a good overview of how we intend to transform Superior and to the best of class organization in one of the best company in Canada.

My belief is that destination 2015 would allow us to achieve this goal and we will provide benefit over the medium long term for all the stack holders. When we make decision, we think of our customers, we think of our employees, we think of our shareholder. There is a way in the wind up business that those three stack holders' win.

While much work is ahead of us and more than what is been behind, I can assure you. I am very confident though that we are more optimistic than ever because I know more than last year that the goals we set for our sales are both real and attainable. Our project of improving our businesses is not premise of cutting costs to the sake of cross reduction or short-end success. Rather we focus on building sustainability with all our businesses for the medium and the long term.

In conclusion, I am very passionate about assuring that Superior becomes the best company it can become. It is important for all the three stakeholders that we will work for and continue; and we'll make sure that they continue to win.

Superior is committed to developing a culture of individual accountability, top of class execution and over a period of time, companywide continuous improvement culture and their D&A forever. So, with that I would like to open the floor to questions.

Question-and-Answer Session

I am assuming there won't be question from the webcast. I didn’t remember being that clear in my life; I was very clear, I appreciate and I am glad you are enjoying it and we are here to make it better, no other reason. so working very hard and there's a lot of President of the businesses are here and some of their; Vice President and anyone of you have questions of course will be walking around after this presentation. I am just buying time for questions to come so.

Okay, thank you everyone for coming and I can assure you our best effort to make this company a special…

[Abrupt End]

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Source: Superior Plus Management Hosts Shareholder Analyst Call (Transcript)

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