CrossAmerica Partners LP Reports Third
Quarter 2022 Results
- Reported Third
Quarter 2022 Operating Income of $39.6 million and Net Income of
$27.6 million compared to Operating Income of $12.6 million and Net
Income of $8.9 million for the Third Quarter 2021
- Generated Third
Quarter 2022 Adjusted EBITDA of $62.2 million and Distributable
Cash Flow of $50.9 million compared to Third Quarter 2021 Adjusted
EBITDA of $35.9 million and Distributable Cash Flow of $30.4
million
- Reported Third
Quarter 2022 Gross Profit for the Wholesale Segment of $56.8
million compared to $48.2 million of Gross Profit for the Third
Quarter 2021 and Third Quarter 2022 Gross Profit for the Retail
Segment of $56.3 million compared to $27.9 million of Gross Profit
for the Third Quarter 2021
- Distributed 338.1
million wholesale fuel gallons during the Third Quarter 2022 at an
average wholesale fuel margin per gallon of 12.5 cents compared to
354.6 million wholesale fuel gallons at an average wholesale fuel
margin per gallon of 9.6 cents during the Third Quarter 2021, a
decrease of 5% in gallons distributed and an increase of 30% in
margin per gallon
- Leverage, as
defined in the CAPL Credit Facility, which excludes any pro forma
EBITDA from CrossAmerica’s recently announced acquisition of assets
from Community Service Stations, Inc., was 3.9 times as of
September 30, 2022, compared to 5.1 times as of December 31,
2021
- The Distribution
Coverage Ratio was 2.55 times for the three months ended September
30, 2022 and 1.74 times for the trailing twelve months ended
September 30, 2022
- 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 2022
Allentown, PA November 7, 2022 – 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, 2022.
“Our financial results for the quarter were
exceptionally strong, as reflected in our Adjusted EBITDA and
ending leverage for the quarter,” said Charles Nifong, President
and CEO of CrossAmerica. “Our results also illustrate the enduring
strength of our underlying business as we continue to provide
strong results despite high fuel prices, inflation, and other
economic challenges. Our pending acquisition, which we announced
during the quarter, is highly complementary to our existing
business and we expect it to be immediately accretive to our
financial results.”
Third Quarter Results
Consolidated Results
Key Operating Metrics |
Q3 2022 |
Q3 2021 |
Operating Income |
$39.6M |
$12.6M |
Adjusted EBITDA |
$62.2M |
$35.9M |
Distributable Cash Flow |
$50.9M |
$30.4M |
Distribution Coverage Ratio – Current Quarter |
2.55x |
1.53x |
Distribution Coverage Ratio - TTM ended 9/30/22 |
1.74x |
1.22x |
CrossAmerica reported Operating Income of $39.6
million and Net Income of $27.6 million or earnings of $0.71 per
diluted common unit for the third quarter 2022 compared to
Operating Income of $12.6 million and Net Income of $8.9 million or
earnings of $0.23 per diluted common unit during the same period of
2021. During the third quarter 2022, Adjusted EBITDA and
Distributable Cash Flow increased by 73% and 67%, respectively, as
compared to the third quarter 2021. Each metric, as well as the
Distribution Coverage Ratio, benefited from the fuel gross profit
performance in both the wholesale and retail segments, as well as
the growth of the organization as a result of the acquisition of
assets from 7-Eleven during the second half of 2021.
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.
Wholesale Segment
Key Operating Metrics |
Q3 2022 |
Q3 2021 |
Wholesale segment gross profit |
$56.8M |
$48.2M |
Wholesale motor fuel gallons distributed |
338.1M |
354.6M |
Average wholesale gross profit per gallon |
$ |
0.125 |
$ |
0.096 |
During the third quarter 2022, CrossAmerica’s wholesale segment
gross profit increased 18% compared to the third quarter 2021. This
was driven by an increase in motor fuel gross profit resulting from
a 30% increase in fuel margin per gallon, partially offset by a 5%
decline in wholesale volume distributed. The Partnership’s
wholesale fuel margin benefited from its ongoing execution of
strategic initiatives, increased volume to CrossAmerica’s company
operated retail sites and higher variable margins during the
quarter. Higher wholesale variable margins were due to greater
market volatility in the third quarter 2022 as compared to the
third quarter 2021. CrossAmerica also benefited from higher terms
discounts as a result of higher fuel prices during the quarter as
compared to the same period in 2021. Wholesale volume distributed
declined primarily due to lower volume in the CrossAmerica base
business, partially offset from the acquisition of assets from
7-Eleven.
Retail Segment
Key Operating Metrics |
Q3 2022 |
Q3 2021 |
Retail segment gross profit |
$56.3M |
$27.9M |
Retail motor fuel gallons distributed |
126.7M |
110.5M |
Same store retail motor fuel gallons distributed* |
45.8M |
49.5M |
Motor fuel gross profit |
$30.2M |
$7.8M |
Same store merchandise sales excluding cigs.* |
$29.2M |
$28.7M |
Merchandise gross profit |
$20.6M |
$15.5M |
Merchandise gross profit percentage |
27.1 |
% |
26.7 |
% |
*Includes only company operated retail sites
For the third quarter 2022, the retail segment
generated a 102% increase in gross profit compared to the third
quarter 2021 due to increased retail fuel gallons sold, higher fuel
margins and higher merchandise gross profit.
The retail segment sold 126.7 million of retail
fuel gallons during the third quarter 2022, a 15% increase over the
third quarter 2021. This increased volume resulted from the
increase in company operated sites as a result of the acquisition
of assets from 7-Eleven, which occurred primarily during the third
quarter 2021. Same store fuel volume for the third quarter 2022
declined 7% from 49.5 million gallons during the third quarter 2021
to 45.8 million gallons. The retail segment generated $22.5 million
of additional motor fuel gross profit for the three months ended
September 30, 2022, as compared to the same period in 2021 due to
greater total motor fuel gallons distributed and higher fuel
margins per gallon.
CrossAmerica’s merchandise gross profit and
other revenue increased due to the increase in company operated
sites driven by the acquisition of assets from 7-Eleven, which
occurred primarily during the third quarter 2021. Merchandise gross
profit percentage increased from 26.7% to 27.1% with same store
merchandise sales excluding cigarettes increasing approximately 2%
for the third quarter 2022 when compared to the third quarter
2021.
Acquisition and Divestment
Activity
On August 24, 2022, CrossAmerica entered into an
Asset Purchase Agreement with Community Service Stations, Inc.,
pursuant to which the Partnership agreed to purchase certain assets
from Community Service Stations, Inc. for a purchase price of $27.5
million plus working capital. The assets consist of wholesale fuel
supply contracts to 39 dealer owned locations, 34 sub-wholesaler
accounts and two commission locations (1 fee based and 1
lease).
The acquisition is subject to customary
conditions to closing. CrossAmerica expects the transaction to
close during the fourth quarter of 2022. It is anticipated that the
acquisition will be financed with cash on hand and/or undrawn
capacity under the CAPL Credit Facility.
During the three and nine months ended September
30, 2022, CrossAmerica sold one and ten properties for $0.2 million
and $4.0 million in proceeds, resulting in net gains of an
insignificant amount and $0.9 million, respectively.
Liquidity and Capital
Resources
As of September 30, 2022, CrossAmerica had
$593.4 million outstanding under its CAPL Credit Facility and
$159.0 million outstanding under its JKM Credit Facility. As of
November 3, 2022, after taking into consideration debt covenant
restrictions, approximately $163.6 million was available for future
borrowings under the CAPL Credit Facility. Leverage, as defined in
the CAPL Credit Facility, which excludes any pro forma EBITDA from
CrossAmerica’s recently announced acquisition of assets from
Community Service Stations. Inc., was 3.9 times as of September 30,
2022, compared to 5.1 times as of December 31, 2021. As of
September 30, 2022, CrossAmerica was in compliance with its
financial covenants under the credit facilities.
Distributions
On October 20, 2022, 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 2022. As previously announced, the distribution
will be paid on November 10, 2022 to all unitholders of record as
of November 3, 2022. 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, 2022 at 9:00 a.m. Eastern Time to discuss third quarter
2022 earnings results. The conference call numbers are 866-374-5140
or 404-400-0571 and the passcode for both is 40578429#. A live
audio webcast of the conference call and the related earnings
materials, including reconciliations of 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). A slide
presentation for the conference call will also be available on the
investor section of the Partnership’s website. 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 website 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, |
|
|
|
2022 |
|
|
2021 |
|
ASSETS |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
11,788 |
|
|
$ |
7,648 |
|
Accounts receivable, net of allowances of $594 and $458,
respectively |
|
|
33,561 |
|
|
|
33,331 |
|
Accounts receivable from related parties |
|
|
863 |
|
|
|
1,149 |
|
Inventory |
|
|
47,258 |
|
|
|
46,100 |
|
Assets held for sale |
|
|
7,097 |
|
|
|
4,907 |
|
Other current assets |
|
|
21,999 |
|
|
|
13,180 |
|
Total current assets |
|
|
122,566 |
|
|
|
106,315 |
|
Property and equipment,
net |
|
|
738,200 |
|
|
|
755,454 |
|
Right-of-use assets, net |
|
|
161,196 |
|
|
|
169,333 |
|
Intangible assets, net |
|
|
95,004 |
|
|
|
114,187 |
|
Goodwill |
|
|
99,409 |
|
|
|
100,464 |
|
Other assets |
|
|
30,163 |
|
|
|
24,389 |
|
Total assets |
|
$ |
1,246,538 |
|
|
$ |
1,270,142 |
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
Current portion of debt and finance lease obligations |
|
$ |
8,376 |
|
|
$ |
10,939 |
|
Current portion of operating lease obligations |
|
|
35,451 |
|
|
|
34,832 |
|
Accounts payable |
|
|
80,267 |
|
|
|
67,173 |
|
Accounts payable to related parties |
|
|
8,464 |
|
|
|
7,679 |
|
Accrued expenses and other current liabilities |
|
|
22,856 |
|
|
|
20,682 |
|
Motor fuel and sales taxes payable |
|
|
20,780 |
|
|
|
22,585 |
|
Total current liabilities |
|
|
176,194 |
|
|
|
163,890 |
|
Debt and finance lease
obligations, less current portion |
|
|
752,193 |
|
|
|
810,635 |
|
Operating lease obligations,
less current portion |
|
|
131,302 |
|
|
|
140,149 |
|
Deferred tax liabilities,
net |
|
|
11,664 |
|
|
|
12,341 |
|
Asset retirement
obligations |
|
|
46,352 |
|
|
|
45,366 |
|
Other long-term
liabilities |
|
|
46,171 |
|
|
|
41,203 |
|
Total liabilities |
|
|
1,163,876 |
|
|
|
1,213,584 |
|
|
|
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred membership
interests |
|
|
25,549 |
|
|
|
— |
|
|
|
|
|
|
|
|
Equity: |
|
|
|
|
|
|
Common units—37,928,970 and 37,896,556 units issued and outstanding
at September 30, 2022 and December 31, 2021, respectively |
|
|
39,811 |
|
|
|
53,528 |
|
Accumulated other comprehensive income |
|
|
17,302 |
|
|
|
3,030 |
|
Total equity |
|
|
57,113 |
|
|
|
56,558 |
|
Total liabilities and equity |
|
$ |
1,246,538 |
|
|
$ |
1,270,142 |
|
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, |
|
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
Operating revenues (a) |
|
$ |
1,274,407 |
|
|
$ |
985,122 |
|
|
$ |
3,842,651 |
|
|
$ |
2,501,740 |
|
Cost of sales (b) |
|
|
1,159,677 |
|
|
|
909,391 |
|
|
|
3,560,146 |
|
|
|
2,306,047 |
|
Gross profit |
|
|
114,730 |
|
|
|
75,731 |
|
|
|
282,505 |
|
|
|
195,693 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses (c) |
|
|
46,845 |
|
|
|
34,548 |
|
|
|
131,170 |
|
|
|
95,021 |
|
General and administrative expenses |
|
|
6,599 |
|
|
|
9,903 |
|
|
|
18,762 |
|
|
|
24,429 |
|
Depreciation, amortization and accretion expense |
|
|
21,329 |
|
|
|
19,118 |
|
|
|
61,523 |
|
|
|
56,732 |
|
Total operating expenses |
|
|
74,773 |
|
|
|
63,569 |
|
|
|
211,455 |
|
|
|
176,182 |
|
(Loss) gain on dispositions
and lease terminations, net |
|
|
(318 |
) |
|
|
426 |
|
|
|
(620 |
) |
|
|
375 |
|
Operating income |
|
|
39,639 |
|
|
|
12,588 |
|
|
|
70,430 |
|
|
|
19,886 |
|
Other income, net |
|
|
120 |
|
|
|
127 |
|
|
|
352 |
|
|
|
419 |
|
Interest expense |
|
|
(8,351 |
) |
|
|
(4,928 |
) |
|
|
(22,333 |
) |
|
|
(12,295 |
) |
Income before income
taxes |
|
|
31,408 |
|
|
|
7,787 |
|
|
|
48,449 |
|
|
|
8,010 |
|
Income tax expense
(benefit) |
|
|
3,815 |
|
|
|
(1,065 |
) |
|
|
1,843 |
|
|
|
(1,664 |
) |
Net income |
|
|
27,593 |
|
|
|
8,852 |
|
|
|
46,606 |
|
|
|
9,674 |
|
Accretion of preferred
membership interests |
|
|
575 |
|
|
|
— |
|
|
|
1,138 |
|
|
|
— |
|
Net income available to
limited partners |
|
$ |
27,018 |
|
|
$ |
8,852 |
|
|
$ |
45,468 |
|
|
$ |
9,674 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common
unit |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.71 |
|
|
$ |
0.23 |
|
|
$ |
1.20 |
|
|
$ |
0.26 |
|
Diluted |
|
$ |
0.71 |
|
|
$ |
0.23 |
|
|
$ |
1.20 |
|
|
$ |
0.26 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
limited partner units: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic common units |
|
|
37,925,082 |
|
|
|
37,887,493 |
|
|
|
37,912,737 |
|
|
|
37,877,273 |
|
Diluted common units |
|
|
39,037,660 |
|
|
|
37,906,799 |
|
|
|
37,950,362 |
|
|
|
37,898,036 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental
information: |
|
|
|
|
|
|
|
|
|
|
|
|
(a) includes excise taxes of: |
|
$ |
66,129 |
|
|
$ |
62,427 |
|
|
$ |
204,588 |
|
|
$ |
156,180 |
|
(a) includes rent income of: |
|
|
21,260 |
|
|
|
21,498 |
|
|
|
62,736 |
|
|
|
62,832 |
|
(b) excludes depreciation, amortization and accretion |
|
|
|
|
|
|
|
|
|
|
|
|
(b) includes rent expense of: |
|
|
5,906 |
|
|
|
5,968 |
|
|
|
17,692 |
|
|
|
17,912 |
|
(c) includes rent expense of: |
|
|
4,012 |
|
|
|
3,353 |
|
|
|
11,521 |
|
|
|
9,814 |
|
CROSSAMERICA PARTNERS
LPCONSOLIDATED STATEMENTS OF CASH
FLOWS(Thousands of Dollars)
|
|
Nine Months Ended September 30, |
|
|
|
2022 |
|
|
2021 |
|
Cash flows from
operating activities: |
|
|
|
|
|
|
Net income |
|
$ |
46,606 |
|
|
$ |
9,674 |
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
|
|
|
Depreciation, amortization and accretion expense |
|
|
61,523 |
|
|
|
56,732 |
|
Amortization of deferred financing costs |
|
|
2,053 |
|
|
|
1,182 |
|
Credit loss expense |
|
|
139 |
|
|
|
70 |
|
Deferred income tax benefit |
|
|
(677 |
) |
|
|
(2,199 |
) |
Equity-based employee and director compensation expense |
|
|
1,608 |
|
|
|
1,096 |
|
Loss (gain) on dispositions and lease terminations, net |
|
|
620 |
|
|
|
(375 |
) |
Changes in operating assets and liabilities, net of
acquisitions |
|
|
14,588 |
|
|
|
10,087 |
|
Net cash provided by operating activities |
|
|
126,460 |
|
|
|
76,267 |
|
|
|
|
|
|
|
|
Cash flows from
investing activities: |
|
|
|
|
|
|
Principal payments received on notes receivable |
|
|
102 |
|
|
|
151 |
|
Proceeds from sale of assets |
|
|
4,398 |
|
|
|
11,012 |
|
Capital expenditures |
|
|
(26,784 |
) |
|
|
(32,370 |
) |
Cash paid in connection with acquisitions, net of cash
acquired |
|
|
(1,885 |
) |
|
|
(261,993 |
) |
Net cash used in investing activities |
|
|
(24,169 |
) |
|
|
(283,200 |
) |
|
|
|
|
|
|
|
Cash flows from
financing activities: |
|
|
|
|
|
|
Borrowings under revolving credit facilities |
|
|
64,600 |
|
|
|
167,000 |
|
Repayments on revolving credit facilities |
|
|
(101,815 |
) |
|
|
(43,452 |
) |
Borrowings under the Term Loan Facility |
|
|
1,120 |
|
|
|
159,950 |
|
Repayments on the Term Loan Facility |
|
|
(24,600 |
) |
|
|
— |
|
Net proceeds from issuance of preferred membership interests |
|
|
24,430 |
|
|
|
— |
|
Payments of finance lease obligations |
|
|
(2,030 |
) |
|
|
(1,944 |
) |
Payments of deferred financing costs |
|
|
(6 |
) |
|
|
(7,135 |
) |
Distributions paid on distribution equivalent rights |
|
|
(137 |
) |
|
|
(93 |
) |
Distributions paid on common units |
|
|
(59,713 |
) |
|
|
(59,659 |
) |
Net cash (used in) provided by financing activities |
|
|
(98,151 |
) |
|
|
214,667 |
|
Net increase in cash and cash
equivalents |
|
|
4,140 |
|
|
|
7,734 |
|
|
|
|
|
|
|
|
Cash and cash
equivalents at beginning of period |
|
|
7,648 |
|
|
|
513 |
|
Cash and cash
equivalents at end of period |
|
$ |
11,788 |
|
|
$ |
8,247 |
|
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, |
|
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
Gross
profit: |
|
|
|
|
|
|
|
|
|
|
|
|
Motor fuel–third party |
|
$ |
19,500 |
|
|
$ |
18,180 |
|
|
$ |
54,719 |
|
|
$ |
52,232 |
|
Motor fuel–intersegment and related party |
|
|
22,710 |
|
|
|
15,943 |
|
|
|
60,796 |
|
|
|
33,633 |
|
Motor fuel gross profit |
|
|
42,210 |
|
|
|
34,123 |
|
|
|
115,515 |
|
|
|
85,865 |
|
Rent gross profit |
|
|
12,959 |
|
|
|
13,264 |
|
|
|
37,944 |
|
|
|
38,730 |
|
Other revenues |
|
|
1,657 |
|
|
|
795 |
|
|
|
5,250 |
|
|
|
2,658 |
|
Total gross profit |
|
|
56,826 |
|
|
|
48,182 |
|
|
|
158,709 |
|
|
|
127,253 |
|
Operating expenses |
|
|
(11,439 |
) |
|
|
(8,686 |
) |
|
|
(32,201 |
) |
|
|
(29,608 |
) |
Operating income |
|
$ |
45,387 |
|
|
$ |
39,496 |
|
|
$ |
126,508 |
|
|
$ |
97,645 |
|
Motor fuel distribution
sites (end of period): (a) |
|
|
|
|
|
|
|
|
|
|
|
|
Motor fuel–third party |
|
|
|
|
|
|
|
|
|
|
|
|
Independent dealers (b) |
|
|
623 |
|
|
|
676 |
|
|
|
623 |
|
|
|
676 |
|
Lessee dealers (c) |
|
|
641 |
|
|
|
643 |
|
|
|
641 |
|
|
|
643 |
|
Total motor fuel distribution–third party sites |
|
|
1,264 |
|
|
|
1,319 |
|
|
|
1,264 |
|
|
|
1,319 |
|
Motor fuel–intersegment and
related party |
|
|
|
|
|
|
|
|
|
|
|
|
Commission agents (Retail segment) (c) |
|
|
198 |
|
|
|
200 |
|
|
|
198 |
|
|
|
200 |
|
Company operated retail sites (Retail segment) (d) |
|
|
252 |
|
|
|
248 |
|
|
|
252 |
|
|
|
248 |
|
Total motor fuel distribution–intersegment and related party
sites |
|
|
450 |
|
|
|
448 |
|
|
|
450 |
|
|
|
448 |
|
Motor fuel distribution
sites (average during the period): |
|
|
|
|
|
|
|
|
|
|
|
|
Motor fuel-third party distribution |
|
|
1,273 |
|
|
|
1,325 |
|
|
|
1,288 |
|
|
|
1,330 |
|
Motor fuel-intersegment and related party distribution |
|
|
451 |
|
|
|
395 |
|
|
|
452 |
|
|
|
368 |
|
Total motor fuel distribution sites |
|
|
1,724 |
|
|
|
1,720 |
|
|
|
1,740 |
|
|
|
1,698 |
|
Volume of gallons
distributed (in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
Third party |
|
|
212,658 |
|
|
|
244,545 |
|
|
|
630,986 |
|
|
|
700,645 |
|
Intersegment and related party |
|
|
125,427 |
|
|
|
110,087 |
|
|
|
370,181 |
|
|
|
277,392 |
|
Total volume of gallons distributed |
|
|
338,085 |
|
|
|
354,632 |
|
|
|
1,001,167 |
|
|
|
978,037 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wholesale margin per
gallon |
|
$ |
0.125 |
|
|
$ |
0.096 |
|
|
$ |
0.115 |
|
|
$ |
0.088 |
|
(a) In addition, as of September 30, 2022 and 2021,
respectively, CrossAmerica distributed motor fuel to 13 and 14
sub-wholesalers who distributed to additional sites.(b) The
decrease in the independent dealer site count was primarily
attributable to loss of contracts, most of which were lower margin,
partially offset by the increase in independent dealer sites as a
result of the real estate rationalization effort and the resulting
reclassification of the sites from a lessee dealer or commission
site to an independent dealer site when CrossAmerica continues to
supply the sites after divestiture. (c) The decreases in the lessee
dealer and commission agent site counts were primarily attributable
to the real estate rationalization effort.(d) The increase in the
company operated site count was primarily attributable to the
company operated sites from 7-Eleven, which occurred primarily
during the third quarter 2021.
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, |
|
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
Gross
profit: |
|
|
|
|
|
|
|
|
|
|
|
|
Motor fuel |
|
$ |
30,206 |
|
|
$ |
7,750 |
|
|
$ |
50,031 |
|
|
$ |
18,120 |
|
Merchandise |
|
|
20,649 |
|
|
|
15,543 |
|
|
|
57,496 |
|
|
|
37,876 |
|
Rent |
|
|
2,395 |
|
|
|
2,266 |
|
|
|
7,100 |
|
|
|
6,190 |
|
Other revenue |
|
|
3,093 |
|
|
|
2,310 |
|
|
|
9,375 |
|
|
|
6,480 |
|
Total gross profit |
|
|
56,343 |
|
|
|
27,869 |
|
|
|
124,002 |
|
|
|
68,666 |
|
Operating expenses |
|
|
(35,406 |
) |
|
|
(25,862 |
) |
|
|
(98,969 |
) |
|
|
(65,413 |
) |
Operating income |
|
$ |
20,937 |
|
|
$ |
2,007 |
|
|
$ |
25,033 |
|
|
$ |
3,253 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail sites (end of
period): |
|
|
|
|
|
|
|
|
|
|
|
|
Commission agents (a) |
|
|
198 |
|
|
|
200 |
|
|
|
198 |
|
|
|
200 |
|
Company operated retail sites(b) |
|
|
252 |
|
|
|
248 |
|
|
|
252 |
|
|
|
248 |
|
Total system sites at the end of the period |
|
|
450 |
|
|
|
448 |
|
|
|
450 |
|
|
|
448 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total system operating
statistics: |
|
|
|
|
|
|
|
|
|
|
|
|
Average retail fuel sites during
the period |
|
|
451 |
|
|
|
395 |
|
|
|
452 |
|
|
|
368 |
|
Volume of gallons sold |
|
|
126,669 |
|
|
|
110,523 |
|
|
|
371,524 |
|
|
|
278,564 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commission agents
statistics: |
|
|
|
|
|
|
|
|
|
|
|
|
Average retail fuel sites during
the period |
|
|
198 |
|
|
|
201 |
|
|
|
199 |
|
|
|
203 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company operated retail
site statistics: |
|
|
|
|
|
|
|
|
|
|
|
|
Average retail fuel sites during
the period |
|
|
253 |
|
|
|
194 |
|
|
|
253 |
|
|
|
165 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same store fuel volume (c) |
|
|
45,829 |
|
|
|
49,478 |
|
|
|
128,760 |
|
|
|
128,823 |
|
Same store merchandise sales
(c) |
|
$ |
42,044 |
|
|
$ |
42,871 |
|
|
$ |
115,787 |
|
|
$ |
118,982 |
|
Same store merchandise sales
excluding cigarettes (c) |
|
$ |
29,167 |
|
|
$ |
28,737 |
|
|
$ |
79,540 |
|
|
$ |
78,778 |
|
Merchandise gross profit
percentage |
|
|
27.1 |
% |
|
|
26.7 |
% |
|
|
27.1 |
% |
|
|
26.8 |
% |
(a) The decrease in the commission site count was primarily
attributable to the real estate rationalization effort.(b) The
increase in the company operated site count was primarily
attributable to the 106 company operated sites from the acquisition
of assets from 7-Eleven.(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 includes store and
cigarette sales and 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.
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, |
|
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
Net income
(a) |
|
$ |
27,593 |
|
|
$ |
8,852 |
|
|
$ |
46,606 |
|
|
$ |
9,674 |
|
Interest expense |
|
|
8,351 |
|
|
|
4,928 |
|
|
|
22,333 |
|
|
|
12,295 |
|
Income tax expense (benefit) |
|
|
3,815 |
|
|
|
(1,065 |
) |
|
|
1,843 |
|
|
|
(1,664 |
) |
Depreciation, amortization and accretion expense |
|
|
21,329 |
|
|
|
19,118 |
|
|
|
61,523 |
|
|
|
56,732 |
|
EBITDA |
|
|
61,088 |
|
|
|
31,833 |
|
|
|
132,305 |
|
|
|
77,037 |
|
Equity-based employee and director compensation expense |
|
|
654 |
|
|
|
342 |
|
|
|
1,608 |
|
|
|
1,096 |
|
Loss (gain) on dispositions and lease terminations, net |
|
|
318 |
|
|
|
(426 |
) |
|
|
620 |
|
|
|
(375 |
) |
Acquisition-related costs (b) |
|
|
107 |
|
|
|
4,141 |
|
|
|
985 |
|
|
|
8,502 |
|
Adjusted
EBITDA |
|
|
62,167 |
|
|
|
35,890 |
|
|
|
135,518 |
|
|
|
86,260 |
|
Cash interest expense |
|
|
(7,668 |
) |
|
|
(4,267 |
) |
|
|
(20,280 |
) |
|
|
(11,113 |
) |
Sustaining capital expenditures (c) |
|
|
(1,974 |
) |
|
|
(975 |
) |
|
|
(5,191 |
) |
|
|
(3,407 |
) |
Current income tax expense |
|
|
(1,656 |
) |
|
|
(214 |
) |
|
|
(2,519 |
) |
|
|
(548 |
) |
Distributable Cash
Flow |
|
$ |
50,869 |
|
|
$ |
30,434 |
|
|
$ |
107,528 |
|
|
$ |
71,192 |
|
Distributions paid |
|
|
19,913 |
|
|
|
19,894 |
|
|
|
59,713 |
|
|
|
59,659 |
|
Distribution Coverage
Ratio (d) |
|
2.55x |
|
|
1.53x |
|
|
1.80x |
|
|
1.19x |
|
(a) Beginning in the second quarter of 2022, CrossAmerica
reconciled 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 our financial performance,
without regard to capital structure, CrossAmerica 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 the Partnership 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.(d) In 2022, CrossAmerica updated its
calculation of its Distribution Coverage Ratio to divide
Distributable Cash Flow by distributions paid, whereas in prior
periods, the Distribution Coverage Ratio was calculated as
Distributable Cash Flow divided by the weighted-average diluted
common units and then CrossAmerica divided that result by
distributions paid per limited partner unit.
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 1,750 locations and owns or leases approximately
1,150 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
210-742-8316
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.
Note to Non-United States Investors: This
release is intended to be a qualified notice under Treasury
Regulation Section 1.1446-4(b). Brokers and nominees should treat
one hundred percent (100%) of CrossAmerica Partners LP’s
distributions to non-U.S. investors as attributable to income that
is effectively connected with a United States trade or business.
Accordingly, CrossAmerica Partners LP’s distributions to non-U.S.
investors are subject to federal income tax withholding at the
highest applicable effective tax rate.
CrossAmerica Partners (NYSE:CAPL)
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