CrossAmerica Partners LP Reports Third
Quarter 2023 Results
- Reported Third
Quarter 2023 Net Income of $12.3 million, Adjusted EBITDA of $44.2
million and Distributable Cash Flow of $31.4 million compared to
Third Quarter 2022 Net Income of $27.6 million, Adjusted EBITDA of
$62.2 million and Distributable Cash Flow of $50.9 million
- Reported Third
Quarter 2023 Gross Profit for the Wholesale Segment of $32.9
million compared to $34.1 million of Gross Profit for the Third
Quarter 2022 and Third Quarter 2023 Gross Profit for the Retail
Segment of $67.6 million compared to $80.6 million of Gross Profit
for the Third Quarter 2022
- Third Quarter 2023
Wholesale Segment gallons distributed increased 2% and Retail
Segment same store gallons sold increased 2%
- Retail Segment
same store merchandise sales, excluding cigarettes, increased to
$53.3 million from $49.1 million and merchandise gross profit
increased 23% to $25.4 million for the Third Quarter 2023 when
compared to the Third Quarter 2022. Merchandise gross profit
percentage was 28.7% for the Third Quarter 2023 compared to the
Third Quarter 2022 merchandise gross profit percentage of
27.1%
- Leverage, as
defined in the CAPL Credit Facility, was 4.35 times as of September
30, 2023
- The Distribution
Coverage Ratio was 1.57 times for the three months ended September
30, 2023 and 1.43 times for the trailing twelve months ended
September 30, 2023
- The Board of
Directors of CrossAmerica's General Partner declared a quarterly
distribution of $0.5250 per limited partner unit attributable to
the Third Quarter 2023
Allentown, PA November 7, 2023 – CrossAmerica
Partners LP (NYSE: CAPL) (“CrossAmerica” or the “Partnership”), a
leading wholesale fuels distributor, convenience store operator,
and owner and lessor of real estate used in the retail distribution
of motor fuels, today reported financial results for the third
quarter ended September 30, 2023.
“CrossAmerica had another excellent quarter with
continued strong operating results in fuel margins, fuel volume and
store merchandise sales and margin,” said Charles Nifong, President
and CEO of CrossAmerica. “While retail fuel margins were down from
the extraordinary quarter last year, the overall business still
performed well for the current quarter. With our strong balance
sheet and solid distribution coverage, the business is well
positioned for the future.”
Non-GAAP Measures and Same Store
Metrics
Non-GAAP measures used in this release include
EBITDA, Adjusted EBITDA, Distributable Cash Flow and Distribution
Coverage Ratio. These Non-GAAP measures are further described and
reconciled to their most directly comparable GAAP measures in the
Supplemental Disclosure Regarding Non-GAAP Financial Measures
section of this release.
Same store fuel volume and same store
merchandise sales include aggregated individual store results for
all stores that had fuel volume or merchandise sales in all months
for both periods within the same segment. Same store merchandise
sales excludes branded food sales and other revenues such as
lottery commissions and car wash sales.
Third Quarter Results
Consolidated Results
Key Operating Metrics |
Q3 2023 |
Q3 2022 |
Net Income |
$12.3M |
$27.6M |
Adjusted EBITDA |
$44.2M |
$62.2M |
Distributable Cash Flow |
$31.4M |
$50.9M |
Distribution Coverage Ratio: Current Quarter |
1.57x |
2.55x |
Distribution Coverage Ratio: Trailing Twelve Months |
1.43x |
1.74x |
CrossAmerica reported declines in Net Income and Adjusted EBITDA
for the third quarter 2023 compared to the exceptionally strong
results of the third quarter 2022. For the third quarter 2023, the
decrease in Net Income and Adjusted EBITDA was primarily driven by
declines in gross profit in both the wholesale and retail segments,
as the partnership experienced extraordinary motor fuel margins in
the third quarter 2022. The year-over-year decline in Distributable
Cash Flow was primarily driven by the decline in Adjusted EBITDA
noted above in addition to a $2.2 million increase in interest
expense for the quarter when compared to the third quarter of
2022.
Wholesale Segment
Key Operating Metrics |
Q3 2023 |
Q3 2022 |
Wholesale segment gross profit |
$32.9M |
$34.1M |
Wholesale motor fuel gallons distributed |
217.3M |
212.7M |
Average wholesale gross profit per gallon |
$ |
0.086 |
$ |
0.092 |
During the third quarter 2023, CrossAmerica’s wholesale segment
gross profit declined 4% compared to the third quarter 2022. This
was primarily driven by a decrease in motor fuel gross profit,
which was driven by a 7% decrease in fuel margin per gallon,
partially offset by a 2% increase in wholesale volume distributed.
The decrease in fuel margin per gallon was primarily attributable
to lower fuel margin on variably priced wholesale contracts during
the quarter relative to last year and to the lower cost of fuel and
a corresponding decline in CrossAmerica's fuel purchase terms
discounts on certain gallons during the third quarter of 2023
compared to the prior year. This was partially offset by better
sourcing costs as a result of brand consolidation and other
initiatives. The fuel margin per gallon of $0.086 for the third
quarter 2023 compared favorably to both the first and second
quarters 2023 ($0.083 and $0.082 per gallon, respectively). The
increase in wholesale fuel volume was driven primarily by the
Community Service Stations, Inc. assets acquired during the fourth
quarter 2022, partially offset by the net loss of independent
dealer contracts and the conversion of certain lessee dealer sites
to company operated sites.
Retail Segment
Key Operating Metrics |
Q3 2023 |
Q3 2022 |
Retail segment gross profit |
$67.6M |
$80.6M |
|
|
|
Retail segment motor fuel gallons distributed |
132.2M |
126.7M |
Same store motor fuel gallons distributed |
121.8M |
119.6M |
Retail segment motor fuel gross profit |
$36.2M |
$54.5M |
Retail segment margin per gallon, before deducting credit card fees
and commissions |
$ |
0.372 |
|
$ |
0.534 |
|
|
|
|
Same store merchandise sales excluding cigarettes* |
$53.3M |
$49.1M |
Merchandise gross profit* |
$25.4M |
$20.6M |
Merchandise gross profit percentage* |
|
28.7 |
% |
|
27.1 |
% |
*Includes only company operated retail sites
For the third quarter 2023, the retail segment
generated a 16% decrease in gross profit compared to the third
quarter 2022. The decline for the third quarter 2023 was due to a
decrease in motor fuel gross profit, partially offset by an
increase in merchandise gross profit.
The retail segment sold 132.2 million retail
fuel gallons during the third quarter 2023, which was an increase
of 4% when compared to the third quarter 2022. Retail segment fuel
gallons increased during the third quarter of 2023 compared to the
prior year due to the conversion of certain lessee dealer sites to
company operated sites and higher same store gallon performance
relative to the prior year. Same store retail segment fuel volume
for the third quarter 2023 increased 2% from 119.6 million gallons
during the third quarter 2022 to 121.8 million gallons. While the
fuel margin per gallon of $0.372 for the third quarter 2023
declined year-over-year due to the steep drop in crude oil prices
during the third quarter 2022, it compared favorably to both the
first and second quarters 2023 ($0.318 and $0.370 per gallon,
respectively).
For the third quarter 2023, CrossAmerica’s
merchandise gross profit and other revenue increased 24% when
compared to the third quarter 2022, due to an increase in overall
store sales as a result of an increase in the company operated site
count due to the conversion of certain lessee dealer and commission
agent sites to company operated sites and an increase in both
merchandise gross profit percentage and same store sales. Same
store merchandise sales, excluding cigarettes, increased 9% for the
third quarter 2023 when compared to the third quarter 2022. The
merchandise gross profit percentage increased to 28.7% for the
third quarter 2023 from 27.1% for the third quarter 2022, primarily
due to improved merchandise gross margins and merchandise sales
shifting towards higher margin products.
Divestment Activity
During the three months ended September 30,
2023, CrossAmerica sold one property for $0.1 million in proceeds,
resulting in a net gain of an insignificant amount. For the nine
months ended September 30, 2023, CrossAmerica sold eight properties
for $8.3 million in proceeds, resulting in a net gain of $6.3
million.
Liquidity and Capital Resources
As of September 30, 2023, CrossAmerica had
$762.5 million outstanding under its CAPL Credit Facility. As of
November 2, 2023, after taking into consideration debt covenant
restrictions, approximately $170.6 million was available for future
borrowings under the CAPL Credit Facility. Taking the interest rate
swap contracts the Partnership currently has in place into account,
CrossAmerica’s effective interest rate on the CAPL Credit Facility
at September 30, 2023 was 4.9%. Leverage, as defined in the CAPL
Credit Facility, was 4.35 times as of September 30, 2023. As of
September 30, 2023, CrossAmerica was in compliance with its
financial covenants under the credit facility.
Distributions
On October 23, 2023, the Board of the Directors
of CrossAmerica’s General Partner (“Board”) declared a quarterly
distribution of $0.5250 per limited partner unit attributable to
the third quarter 2023. As previously announced, the distribution
will be paid on November 10, 2023 to all unitholders of record as
of November 3, 2023. The amount and timing of any future
distributions is subject to the discretion of the Board as provided
in CrossAmerica’s Partnership Agreement.
Conference Call
The Partnership will host a conference call on
November 8, 2023 at 9:00 a.m. Eastern Time to discuss third quarter
2023 earnings results. The conference call numbers are 888-886-7786
or 416-764-8658 and the passcode for both is 83482565. A live audio
webcast of the conference call and the related earnings materials,
including reconciliations of any non-GAAP financial measures to
GAAP financial measures and any other applicable disclosures, will
be available on that same day on the investor section of the
CrossAmerica website (www.crossamericapartners.com). To listen to
the audio webcast, go to
https://caplp.gcs-web.com/webcasts-presentations. After the live
conference call, an archive of the webcast will be available on the
investor section of the CrossAmerica site at
https://caplp.gcs-web.com/webcasts-presentations within 24 hours
after the call for a period of sixty days.
CROSSAMERICA PARTNERS
LPCONSOLIDATED BALANCE
SHEETS(Thousands of Dollars, except unit
data)
|
|
September 30, |
|
|
December 31, |
|
|
|
2023 |
|
|
2022 |
|
ASSETS |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
5,790 |
|
|
$ |
16,054 |
|
Accounts receivable, net of allowances of $718 and $686,
respectively |
|
|
38,735 |
|
|
|
30,825 |
|
Accounts receivable from related parties |
|
|
445 |
|
|
|
743 |
|
Inventory |
|
|
53,609 |
|
|
|
47,307 |
|
Assets held for sale |
|
|
1,135 |
|
|
|
983 |
|
Current portion of interest rate swap contracts |
|
|
12,691 |
|
|
|
13,827 |
|
Other current assets |
|
|
10,856 |
|
|
|
8,667 |
|
Total current assets |
|
|
123,261 |
|
|
|
118,406 |
|
Property and equipment,
net |
|
|
706,409 |
|
|
|
728,379 |
|
Right-of-use assets, net |
|
|
153,246 |
|
|
|
164,942 |
|
Intangible assets, net |
|
|
98,618 |
|
|
|
113,919 |
|
Goodwill |
|
|
99,409 |
|
|
|
99,409 |
|
Interest rate swap contracts,
less current portion |
|
|
9,301 |
|
|
|
3,401 |
|
Other assets |
|
|
26,983 |
|
|
|
26,142 |
|
Total assets |
|
$ |
1,217,227 |
|
|
$ |
1,254,598 |
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
Current portion of debt and finance lease obligations |
|
$ |
3,034 |
|
|
$ |
11,151 |
|
Current portion of operating lease obligations |
|
|
35,085 |
|
|
|
35,345 |
|
Accounts payable |
|
|
80,216 |
|
|
|
77,048 |
|
Accounts payable to related parties |
|
|
10,098 |
|
|
|
7,798 |
|
Accrued expenses and other current liabilities |
|
|
27,577 |
|
|
|
23,144 |
|
Motor fuel and sales taxes payable |
|
|
21,187 |
|
|
|
20,813 |
|
Total current liabilities |
|
|
177,197 |
|
|
|
175,299 |
|
Debt and finance lease
obligations, less current portion |
|
|
760,688 |
|
|
|
761,638 |
|
Operating lease obligations,
less current portion |
|
|
123,491 |
|
|
|
135,220 |
|
Deferred tax liabilities,
net |
|
|
11,733 |
|
|
|
10,588 |
|
Asset retirement
obligations |
|
|
47,506 |
|
|
|
46,431 |
|
Other long-term
liabilities |
|
|
47,299 |
|
|
|
46,289 |
|
Total liabilities |
|
|
1,167,914 |
|
|
|
1,175,465 |
|
|
|
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred membership
interests |
|
|
27,101 |
|
|
|
26,156 |
|
|
|
|
|
|
|
|
Equity: |
|
|
|
|
|
|
Common units— 37,970,720 and 37,937,604 units issued and
outstanding at September 30, 2023 and December 31, 2022,
respectively |
|
|
1,233 |
|
|
|
36,508 |
|
Accumulated other comprehensive income |
|
|
20,979 |
|
|
|
16,469 |
|
Total equity |
|
|
22,212 |
|
|
|
52,977 |
|
Total liabilities and equity |
|
$ |
1,217,227 |
|
|
$ |
1,254,598 |
|
CROSSAMERICA PARTNERS
LPCONSOLIDATED STATEMENTS OF
OPERATIONS(Thousands of Dollars, Except Unit and
Per Unit Amounts)
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Operating revenues (a) |
|
$ |
1,210,023 |
|
|
$ |
1,274,407 |
|
|
$ |
3,371,578 |
|
|
$ |
3,842,651 |
|
Costs of sales (b) |
|
|
1,109,583 |
|
|
|
1,159,677 |
|
|
|
3,091,355 |
|
|
|
3,560,146 |
|
Gross profit |
|
|
100,440 |
|
|
|
114,730 |
|
|
|
280,223 |
|
|
|
282,505 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses (c) |
|
|
50,609 |
|
|
|
46,845 |
|
|
|
146,030 |
|
|
|
131,170 |
|
General and administrative expenses |
|
|
6,877 |
|
|
|
6,599 |
|
|
|
20,091 |
|
|
|
18,762 |
|
Depreciation, amortization and accretion expense |
|
|
19,096 |
|
|
|
21,329 |
|
|
|
58,214 |
|
|
|
61,523 |
|
Total operating expenses |
|
|
76,582 |
|
|
|
74,773 |
|
|
|
224,335 |
|
|
|
211,455 |
|
Gain (loss) on dispositions
and lease terminations, net |
|
|
287 |
|
|
|
(318 |
) |
|
|
5,220 |
|
|
|
(620 |
) |
Operating income |
|
|
24,145 |
|
|
|
39,639 |
|
|
|
61,108 |
|
|
|
70,430 |
|
Other income, net |
|
|
174 |
|
|
|
120 |
|
|
|
598 |
|
|
|
352 |
|
Interest expense |
|
|
(10,559 |
) |
|
|
(8,351 |
) |
|
|
(33,254 |
) |
|
|
(22,333 |
) |
Income before income
taxes |
|
|
13,760 |
|
|
|
31,408 |
|
|
|
28,452 |
|
|
|
48,449 |
|
Income tax expense |
|
|
1,468 |
|
|
|
3,815 |
|
|
|
2,603 |
|
|
|
1,843 |
|
Net income |
|
|
12,292 |
|
|
|
27,593 |
|
|
|
25,849 |
|
|
|
46,606 |
|
Accretion of preferred
membership interests |
|
|
629 |
|
|
|
575 |
|
|
|
1,845 |
|
|
|
1,138 |
|
Net income available to
limited partners |
|
$ |
11,663 |
|
|
$ |
27,018 |
|
|
$ |
24,004 |
|
|
$ |
45,468 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common
unit |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.31 |
|
|
$ |
0.71 |
|
|
$ |
0.63 |
|
|
$ |
1.20 |
|
Diluted |
|
$ |
0.31 |
|
|
$ |
0.71 |
|
|
$ |
0.63 |
|
|
$ |
1.20 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
common units: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
37,966,474 |
|
|
|
37,925,082 |
|
|
|
37,953,348 |
|
|
|
37,912,737 |
|
Diluted |
|
|
38,139,258 |
|
|
|
39,037,660 |
|
|
|
38,126,392 |
|
|
|
37,950,362 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental
information: |
|
|
|
|
|
|
|
|
|
|
|
|
(a) includes excise taxes of: |
|
$ |
76,991 |
|
|
$ |
66,129 |
|
|
$ |
223,066 |
|
|
$ |
204,588 |
|
(a) includes rent income of: |
|
|
20,137 |
|
|
|
21,260 |
|
|
|
61,980 |
|
|
|
62,736 |
|
(b) excludes depreciation, amortization and accretion |
|
|
|
|
|
|
|
|
|
|
|
|
(b) includes rent expense of: |
|
|
5,679 |
|
|
|
5,906 |
|
|
|
16,891 |
|
|
|
17,692 |
|
(c) includes rent expense of: |
|
|
3,957 |
|
|
|
4,012 |
|
|
|
11,666 |
|
|
|
11,521 |
|
CROSSAMERICA PARTNERS
LPCONSOLIDATED STATEMENTS OF CASH
FLOWS(Thousands of Dollars)
|
|
Nine Months Ended September 30, |
|
|
|
2023 |
|
|
2022 |
|
Cash flows from
operating activities: |
|
|
|
|
|
|
Net income |
|
$ |
25,849 |
|
|
$ |
46,606 |
|
Adjustments to reconcile net income (loss) to net cash provided by
operating activities: |
|
|
|
|
|
|
Depreciation, amortization and accretion expense |
|
|
58,214 |
|
|
|
61,523 |
|
Amortization of deferred financing costs |
|
|
2,806 |
|
|
|
2,053 |
|
Credit loss expense |
|
|
37 |
|
|
|
139 |
|
Deferred income tax expense (benefit) |
|
|
1,145 |
|
|
|
(677 |
) |
Equity-based employee and director compensation expense |
|
|
2,084 |
|
|
|
1,608 |
|
(Gain) loss on dispositions and lease terminations, net |
|
|
(5,220 |
) |
|
|
620 |
|
Changes in operating assets and liabilities, net of
acquisitions |
|
|
(5,926 |
) |
|
|
14,588 |
|
Net cash provided by operating activities |
|
|
78,989 |
|
|
|
126,460 |
|
|
|
|
|
|
|
|
Cash flows from
investing activities: |
|
|
|
|
|
|
Principal payments received on notes receivable |
|
|
162 |
|
|
|
102 |
|
Proceeds from sale of assets |
|
|
4,983 |
|
|
|
4,398 |
|
Capital expenditures |
|
|
(21,680 |
) |
|
|
(26,784 |
) |
Cash paid in connection with acquisitions, net of cash
acquired |
|
|
— |
|
|
|
(1,885 |
) |
Net cash used in investing activities |
|
|
(16,535 |
) |
|
|
(24,169 |
) |
|
|
|
|
|
|
|
Cash flows from
financing activities: |
|
|
|
|
|
|
Borrowings under revolving credit facilities |
|
|
221,900 |
|
|
|
64,600 |
|
Repayments on revolving credit facilities |
|
|
(65,537 |
) |
|
|
(101,815 |
) |
Borrowings under the Term Loan Facility |
|
|
— |
|
|
|
1,120 |
|
Repayments on the Term Loan Facility |
|
|
(158,980 |
) |
|
|
(24,600 |
) |
Net proceeds from issuance of preferred membership interests |
|
|
— |
|
|
|
24,430 |
|
Payments of finance lease obligations |
|
|
(2,150 |
) |
|
|
(2,030 |
) |
Payments of deferred financing costs |
|
|
(7,106 |
) |
|
|
(6 |
) |
Distributions paid on distribution equivalent rights |
|
|
(168 |
) |
|
|
(137 |
) |
Income tax distributions paid on preferred membership
interests |
|
|
(900 |
) |
|
|
— |
|
Distributions paid on common units |
|
|
(59,777 |
) |
|
|
(59,713 |
) |
Net cash used in financing activities |
|
|
(72,718 |
) |
|
|
(98,151 |
) |
Net (decrease) increase in
cash and cash equivalents |
|
|
(10,264 |
) |
|
|
4,140 |
|
|
|
|
|
|
|
|
Cash and cash
equivalents at beginning of period |
|
|
16,054 |
|
|
|
7,648 |
|
Cash and cash
equivalents at end of period |
|
$ |
5,790 |
|
|
$ |
11,788 |
|
Segment Results
Wholesale
The following table highlights the results of
operations and certain operating metrics of the Wholesale segment
(thousands of dollars, except for the number of distribution sites
and per gallon amounts):
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Gross
profit: |
|
|
|
|
|
|
|
|
|
|
|
|
Motor fuel gross profit |
|
$ |
18,786 |
|
|
$ |
19,501 |
|
|
$ |
53,427 |
|
|
$ |
54,719 |
|
Rent gross profit |
|
|
12,424 |
|
|
|
12,959 |
|
|
|
38,281 |
|
|
|
37,944 |
|
Other revenues |
|
|
1,642 |
|
|
|
1,657 |
|
|
|
4,053 |
|
|
|
5,250 |
|
Total gross profit |
|
|
32,852 |
|
|
|
34,117 |
|
|
|
95,761 |
|
|
|
97,913 |
|
Operating expenses |
|
|
(9,471 |
) |
|
|
(10,071 |
) |
|
|
(28,936 |
) |
|
|
(28,116 |
) |
Operating income |
|
$ |
23,381 |
|
|
$ |
24,046 |
|
|
$ |
66,825 |
|
|
$ |
69,797 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Motor fuel distribution
sites (end of period): (a) |
|
|
|
|
|
|
|
|
|
|
|
|
Independent dealers (b) |
|
|
636 |
|
|
|
623 |
|
|
|
636 |
|
|
|
623 |
|
Lessee dealers (c) |
|
|
582 |
|
|
|
641 |
|
|
|
582 |
|
|
|
641 |
|
Total motor fuel distribution sites |
|
|
1,218 |
|
|
|
1,264 |
|
|
|
1,218 |
|
|
|
1,264 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average motor fuel
distribution sites |
|
|
1,222 |
|
|
|
1,273 |
|
|
|
1,243 |
|
|
|
1,288 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Volume of gallons
distributed |
|
|
217,348 |
|
|
|
212,657 |
|
|
|
637,340 |
|
|
|
630,985 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Margin per
gallon |
|
$ |
0.086 |
|
|
$ |
0.092 |
|
|
$ |
0.084 |
|
|
$ |
0.087 |
|
(a) In addition, CrossAmerica distributed motor fuel to
sub-wholesalers who distributed to additional sites.(b) The
increase in the independent dealer site count was primarily
attributable to the acquisition of assets from Community Service
Stations, Inc. and the ongoing real estate rationalization effort,
partially offset by the net loss of contracts.(c) The decrease in
the lessee dealer site count was primarily attributable to the
conversion of certain lessee dealer sites to company operated
sites, largely in the second quarter of 2023, and CrossAmerica's
real estate rationalization effort.
Retail
The following table highlights the results of
operations and certain operating metrics of the Retail segment (in
thousands, except for the number of retail sites):
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Gross
profit: |
|
|
|
|
|
|
|
|
|
|
|
|
Motor fuel |
|
$ |
36,226 |
|
|
$ |
54,476 |
|
|
$ |
98,723 |
|
|
$ |
110,621 |
|
Merchandise |
|
|
25,427 |
|
|
|
20,649 |
|
|
|
67,782 |
|
|
|
57,496 |
|
Rent |
|
|
2,034 |
|
|
|
2,395 |
|
|
|
6,808 |
|
|
|
7,100 |
|
Other revenue |
|
|
3,901 |
|
|
|
3,093 |
|
|
|
11,149 |
|
|
|
9,375 |
|
Total gross profit |
|
|
67,588 |
|
|
|
80,613 |
|
|
|
184,462 |
|
|
|
184,592 |
|
Operating expenses |
|
|
(41,138 |
) |
|
|
(36,774 |
) |
|
|
(117,094 |
) |
|
|
(103,054 |
) |
Operating income |
|
$ |
26,450 |
|
|
$ |
43,839 |
|
|
$ |
67,368 |
|
|
$ |
81,538 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail sites (end of
period): |
|
|
|
|
|
|
|
|
|
|
|
|
Company operated retail sites (a) |
|
|
293 |
|
|
|
252 |
|
|
|
293 |
|
|
|
252 |
|
Commission agents (b) |
|
|
189 |
|
|
|
198 |
|
|
|
189 |
|
|
|
198 |
|
Total system sites at the end of the period |
|
|
482 |
|
|
|
450 |
|
|
|
482 |
|
|
|
450 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total retail segment
statistics: |
|
|
|
|
|
|
|
|
|
|
|
|
Volume of gallons sold |
|
|
132,160 |
|
|
|
126,669 |
|
|
|
382,049 |
|
|
|
371,524 |
|
Same store total system gallons
sold(c) |
|
|
121,782 |
|
|
|
119,559 |
|
|
|
347,800 |
|
|
|
342,758 |
|
Average retail fuel sites |
|
|
482 |
|
|
|
451 |
|
|
|
472 |
|
|
|
452 |
|
Margin per gallon, before
deducting credit card fees and commissions |
|
$ |
0.372 |
|
|
$ |
0.534 |
|
|
$ |
0.354 |
|
|
$ |
0.400 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company operated site
statistics: |
|
|
|
|
|
|
|
|
|
|
|
|
Average retail fuel sites |
|
|
293 |
|
|
|
253 |
|
|
|
279 |
|
|
|
253 |
|
Same store fuel volume(c) |
|
|
81,042 |
|
|
|
80,387 |
|
|
|
227,985 |
|
|
|
227,964 |
|
Margin per gallon, before
deducting credit card fees |
|
$ |
0.394 |
|
|
$ |
0.596 |
|
|
$ |
0.378 |
|
|
$ |
0.427 |
|
Same store merchandise
sales(c) |
|
$ |
76,333 |
|
|
$ |
73,060 |
|
|
$ |
207,210 |
|
|
$ |
199,264 |
|
Same store merchandise sales
excluding cigarettes(c) |
|
$ |
53,305 |
|
|
$ |
49,093 |
|
|
$ |
143,275 |
|
|
$ |
131,881 |
|
Merchandise gross profit
percentage |
|
|
28.7 |
% |
|
|
27.1 |
% |
|
|
28.5 |
% |
|
|
27.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Commission site
statistics: |
|
|
|
|
|
|
|
|
|
|
|
|
Average retail fuel sites |
|
|
189 |
|
|
|
198 |
|
|
|
193 |
|
|
|
199 |
|
Margin per gallon, before
deducting credit card fees and commissions |
|
$ |
0.325 |
|
|
$ |
0.410 |
|
|
$ |
0.306 |
|
|
$ |
0.345 |
|
(a) The increase in the company operated site count was
primarily attributable to the conversion of certain lessee dealer
and commission sites to company operated sites, largely during the
second quarter of 2023.(b) The decrease in the commission agent
site count was primarily attributable to the conversion of certain
commission agent sites to company operated sites, largely during
the first quarter of 2023.(c) Same store fuel volume and same store
merchandise sales include aggregated individual store results for
all stores that had fuel volume or merchandise sales in all months
for both periods. Same store merchandise sales excludes branded
food sales and other revenues such as lottery commissions and car
wash sales.
Supplemental Disclosure Regarding
Non-GAAP Financial Measures
CrossAmerica uses the non-GAAP financial
measures EBITDA, Adjusted EBITDA, Distributable Cash Flow and
Distribution Coverage Ratio. EBITDA represents net income before
deducting interest expense, income taxes and depreciation,
amortization and accretion (which includes certain impairment
charges). Adjusted EBITDA represents EBITDA as further adjusted to
exclude equity-based compensation expense, gains or losses on
dispositions and lease terminations, net and certain discrete
acquisition related costs, such as legal and other professional
fees, separation benefit costs and certain other discrete non-cash
items arising from purchase accounting. Distributable Cash Flow
represents Adjusted EBITDA less cash interest expense, sustaining
capital expenditures and current income tax expense. The
Distribution Coverage Ratio is computed by dividing Distributable
Cash Flow by distributions paid on common units.
EBITDA, Adjusted EBITDA, Distributable Cash Flow
and Distribution Coverage Ratio are used as supplemental financial
measures by management and by external users of our financial
statements, such as investors and lenders. EBITDA and Adjusted
EBITDA are used to assess CrossAmerica’s financial performance
without regard to financing methods, capital structure or income
taxes and the ability to incur and service debt and to fund capital
expenditures. In addition, Adjusted EBITDA is used to assess the
operating performance of the Partnership’s business on a consistent
basis by excluding the impact of items which do not result directly
from the wholesale distribution of motor fuel, the leasing of real
property, or the day to day operations of CrossAmerica’s retail
site activities. EBITDA, Adjusted EBITDA, Distributable Cash Flow
and Distribution Coverage Ratio are also used to assess the ability
to generate cash sufficient to make distributions to CrossAmerica’s
unitholders.
CrossAmerica believes the presentation of
EBITDA, Adjusted EBITDA, Distributable Cash Flow and Distribution
Coverage Ratio provides useful information to investors in
assessing the financial condition and results of operations.
EBITDA, Adjusted EBITDA, Distributable Cash Flow and Distribution
Coverage Ratio should not be considered alternatives to net income
or any other measure of financial performance or liquidity
presented in accordance with U.S. GAAP. EBITDA, Adjusted EBITDA,
Distributable Cash Flow and Distribution Coverage Ratio have
important limitations as analytical tools because they exclude some
but not all items that affect net income. Additionally, because
EBITDA, Adjusted EBITDA, Distributable Cash Flow and Distribution
Coverage Ratio may be defined differently by other companies in the
industry, CrossAmerica’s definitions may not be comparable to
similarly titled measures of other companies, thereby diminishing
their utility.
The following table presents reconciliations of
EBITDA, Adjusted EBITDA, and Distributable Cash Flow to net income,
the most directly comparable U.S. GAAP financial measure, for each
of the periods indicated (in thousands, except for per unit
amounts):
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Net income
(a) |
|
$ |
12,292 |
|
|
$ |
27,593 |
|
|
$ |
25,849 |
|
|
$ |
46,606 |
|
Interest expense |
|
|
10,559 |
|
|
|
8,351 |
|
|
|
33,254 |
|
|
|
22,333 |
|
Income tax expense |
|
|
1,468 |
|
|
|
3,815 |
|
|
|
2,603 |
|
|
|
1,843 |
|
Depreciation, amortization and accretion expense |
|
|
19,096 |
|
|
|
21,329 |
|
|
|
58,214 |
|
|
|
61,523 |
|
EBITDA |
|
|
43,415 |
|
|
|
61,088 |
|
|
|
119,920 |
|
|
|
132,305 |
|
Equity-based employee and director compensation expense |
|
|
961 |
|
|
|
654 |
|
|
|
2,084 |
|
|
|
1,608 |
|
(Gain) loss on dispositions and lease terminations, net |
|
|
(287 |
) |
|
|
318 |
|
|
|
(5,220 |
) |
|
|
620 |
|
Acquisition-related costs (b) |
|
|
120 |
|
|
|
107 |
|
|
|
1,361 |
|
|
|
985 |
|
Adjusted
EBITDA |
|
|
44,209 |
|
|
|
62,167 |
|
|
|
118,145 |
|
|
|
135,518 |
|
Cash interest expense |
|
|
(10,078 |
) |
|
|
(7,668 |
) |
|
|
(30,448 |
) |
|
|
(20,280 |
) |
Sustaining capital expenditures (c) |
|
|
(1,837 |
) |
|
|
(1,974 |
) |
|
|
(5,322 |
) |
|
|
(5,191 |
) |
Current income tax expense |
|
|
(905 |
) |
|
|
(1,656 |
) |
|
|
(1,458 |
) |
|
|
(2,519 |
) |
Distributable Cash
Flow |
|
$ |
31,389 |
|
|
$ |
50,869 |
|
|
$ |
80,917 |
|
|
$ |
107,528 |
|
Distributions paid on common
units |
|
|
19,934 |
|
|
|
19,913 |
|
|
|
59,777 |
|
|
|
59,713 |
|
Distribution Coverage
Ratio (a) |
|
1.57x |
|
|
2.55x |
|
|
1.35x |
|
|
1.80x |
|
(a) Beginning in 2022, CrossAmerica reconciles Adjusted EBITDA
to Net income rather than to Net income available to limited
partners. The difference between Net income and Net income
available to limited partners is that, beginning in the second
quarter of 2022, the accretion of preferred membership interests
issued in late March 2022 is a deduction from Net income in
computing Net income available to limited partners. Because
Adjusted EBITDA is used to assess CrossAmerica’s financial
performance without regard to capital structure, the partnership
believes Adjusted EBITDA should be reconciled with Net income, so
that the calculation isn’t impacted by the accretion of preferred
membership interests. This approach is comparable to the
reconciliation of Adjusted EBITDA to Net income available to
limited partners in past periods, as CrossAmerica has not recorded
accretion of preferred membership interests in past periods.(b)
Relates to certain discrete acquisition-related costs, such as
legal and other professional fees, separation benefit costs and
certain purchase accounting adjustments associated with recently
acquired businesses.(c) Under the Partnership Agreement, sustaining
capital expenditures are capital expenditures made to maintain
CrossAmerica's long-term operating income or operating capacity.
Examples of sustaining capital expenditures are those made to
maintain existing contract volumes, including payments to renew
existing distribution contracts, or to maintain the sites in
conditions suitable to lease, such as parking lot or roof
replacement/renovation, or to replace equipment required to operate
the existing business.
About CrossAmerica Partners
LP
CrossAmerica Partners LP is a leading wholesale
distributor of motor fuels, convenience store operator, and owner
and lessee of real estate used in the retail distribution of motor
fuels. Its general partner, CrossAmerica GP LLC, is indirectly
owned and controlled by entities affiliated with Joseph V. Topper,
Jr., the founder of CrossAmerica Partners and a member of the board
of the general partner since 2012. Formed in 2012, CrossAmerica
Partners LP is a distributor of branded and unbranded petroleum for
motor vehicles in the United States and distributes fuel to
approximately 1,700 locations and owns or leases approximately
1,100 sites. With a geographic footprint covering 34 states, the
Partnership has well-established relationships with several major
oil brands, including ExxonMobil, BP, Shell, Sunoco, Valero, Gulf,
Citgo, Marathon and Phillips 66. CrossAmerica Partners LP ranks as
one of ExxonMobil’s largest distributors by fuel volume in the
United States and in the top 10 for additional brands. For
additional information, please visit
www.crossamericapartners.com.
Contact
Investor Relations: Randy Palmer, rpalmer@caplp.com or
610-625-8000
Cautionary Statement Regarding Forward-Looking
Statements
Statements contained in this release that state
the Partnership’s or management’s expectations or predictions of
the future are forward-looking statements. The words “believe,”
“expect,” “should,” “intends,” “estimates,” “target” and other
similar expressions identify forward-looking statements. It is
important to note that actual results could differ materially from
those projected in such forward-looking statements. For more
information concerning factors that could cause actual results to
differ from those expressed or forecasted, see CrossAmerica’s Form
10-K or Forms 10-Q filed with the Securities and Exchange
Commission, and available on CrossAmerica’s website at
www.crossamericapartners.com. The Partnership undertakes no
obligation to publicly update or revise any statements in this
release, whether as a result of new information, future events or
otherwise.
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