RICHMOND, Va., Nov. 07, 2024 (GLOBE NEWSWIRE) -- ARKO Corp. (Nasdaq: ARKO) ("ARKO" or the "Company"), a Fortune 500 company and one of the largest convenience store operators in the United States, today announced financial results for the third quarter ended September 30, 2024.
Third Quarter 2024 Key Highlights (vs. Year-Ago Quarter)1,2
- Net income for the quarter was $9.7 million compared to $21.5 million.
- Adjusted EBITDA for the quarter was $78.8 million, as compared to $87.3 million for the prior year period; performance for the quarter was at the midpoint of the Company's previously issued guidance of $70 million to $86 million.
- Retail fuel margin for the quarter was 41.3 cents per gallon, as compared to 40.3 cents for the prior year period.
- Merchandise margin rate for the quarter was 32.8%, as compared to 31.7% for the prior year period.
- Merchandise contribution for the quarter was $154.0 million, as compared to $160.7 million for the prior year period.
- Retail fuel contribution for the quarter was $117.1 million, as compared to $121.3 million for the prior year period.
___________________
1 See Use of Non-GAAP Measures below.
2 All figures for fuel contribution and fuel margin per gallon exclude the estimated fixed margin or fixed fee paid to the Company's wholesale fuel distribution subsidiary, GPM Petroleum LP ("GPMP") for the cost of fuel (intercompany charges by GPMP).
Other Key Highlights
- As part of the Company's developing transformation plan, the Company converted 51 retail stores to dealer sites in the nine months ended on September 30, 2024. The Company expects to convert another approximately 100 retail stores by the end of the fourth quarter of 2024, which together with the initial 51 stores is expected to represent a cumulative annualized benefit to combined wholesale segment and retail segment Operating Income of approximately $8.5 million. Such conversions are part of our channel optimization strategy, which is expected to yield a cumulative annualized benefit to combined wholesale segment and retail segment Operating Income of approximately $15 million to $20 million.
- The Company has expanded its pipeline to eight NTI (new to industry) stores, including two Dunkin' locations. During the quarter, the Company opened a NTI Handy Mart store in Newport, North Carolina. The Company expects to open three more NTI stores later this year, with the balance over the course of 2025.
- The Board declared a quarterly dividend of $0.03 per share of common stock to be paid on December 3, 2024 to stockholders of record as of November 19, 2024.
"As our customers continue to face macroeconomic pressure related to inflation and elevated prices for everyday goods, we continue to focus on delivering essential value to our customers," said Arie Kotler, Chairman, President, and CEO of ARKO.
Mr. Kotler continued: "Our focus on operational excellence, improving customer offerings, and strengthening store-level performance remains a top priority. We believe that we are well-positioned to manage near-term macroeconomic challenges, and we remain confident in ARKO's long-term potential for sustained growth. We believe the improvements in our operations and investments in our stores will guide us through the current environment and build the foundation for our multi-year transformation."
Third Quarter 2024 Segment Highlights
Retail
| For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| (in thousands) | |||||||||||||||
| Fuel gallons sold | 283,189 | 300,796 | 822,134 | 843,286 | |||||||||||
| Same store fuel gallons sold decrease (%) 1 | (6.6 | %) | (5.3 | %) | (6.6 | %) | (4.5 | %) | |||||||
| Fuel contribution 2 | $ | 117,090 | $ | 121,266 | $ | 328,004 | $ | 325,986 | |||||||
| Fuel margin, cents per gallon 3 | 41.3 | 40.3 | 39.9 | 38.7 | |||||||||||
| Same store fuel contribution 1,2 | $ | 113,192 | $ | 118,250 | $ | 306,673 | $ | 317,828 | |||||||
| Same store merchandise sales (decrease) increase (%) 1 | (7.7 | %) | 0.1 | % | (5.7 | %) | 1.4 | % | |||||||
| Same store merchandise sales excluding cigarettes (decrease) increase (%) 1 | (5.7 | %) | 1.0 | % | (4.3 | %) | 3.9 | % | |||||||
| Merchandise revenue | $ | 469,616 | $ | 506,425 | $ | 1,358,519 | $ | 1,391,274 | |||||||
| Merchandise contribution 4 | $ | 154,019 | $ | 160,726 | $ | 444,696 | $ | 438,349 | |||||||
| Merchandise margin 5 | 32.8 | % | 31.7 | % | 32.7 | % | 31.5 | % | |||||||
| Same store merchandise contribution 1,4 | $ | 147,223 | $ | 154,719 | $ | 413,992 | $ | 424,789 | |||||||
| Same store site operating expenses 1 | $ | 192,548 | $ | 195,334 | $ | 557,425 | $ | 555,631 | |||||||
| 1 Same store is a common metric used in the convenience store industry. We consider a store a same store beginning in the first quarter in which the store had a full quarter of activity in the prior year. Refer to Use of Non-GAAP Measures below for discussion of this measure. | |||||||||||||||
| 2 Calculated as fuel revenue less fuel costs; excludes the estimated fixed margin or fixed fee paid to GPMP for the cost of fuel. | |||||||||||||||
| 3 Calculated as fuel contribution divided by fuel gallons sold. | |||||||||||||||
| 4 Calculated as merchandise revenue less merchandise costs. | |||||||||||||||
| 5 Calculated as merchandise contribution divided by merchandise revenue. | |||||||||||||||
Total merchandise contribution for the third quarter of 2024 decreased $6.7 million, or 4.2%, compared to the third quarter of 2023, primarily due to a decrease in same store merchandise contribution of approximately $7.5 million and a decrease from underperforming retail stores that were closed or converted to dealers, which was partially offset by approximately $2.7 million in incremental merchandise contribution from recent acquisitions. Same store merchandise contribution decreased primarily due to lower same store sales caused by a decline in customer transactions reflecting the challenging macro-economic environment. The impact of the same store sales decline was partially offset by an increase in same store merchandise margin rate, which increased 100 basis points as compared to the year-ago period.
For the third quarter of 2024, retail fuel contribution decreased $4.2 million to $117.1 million compared to the prior year period, with gallon demand declines reflecting the challenging macro-economic environment. The impact of the gallon demand decline was partially offset by resilient fuel margin capture of 41.3 cents per gallon, which was up 1.0 cent per gallon compared to the third quarter of 2023. The decline in retail fuel contribution was caused by a reduction in same store fuel contribution of $5.1 million and a decrease from underperforming retail stores that were closed or converted to dealers, which was partially offset by incremental fuel contribution from recent acquisitions of approximately $2.2 million.
Wholesale
| For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| (in thousands) | |||||||||||||||
| Fuel gallons sold - fuel supply locations | 203,187 | 205,836 | 593,479 | 601,399 | |||||||||||
| Fuel gallons sold - consignment agent locations | 39,155 | 45,365 | 115,997 | 127,861 | |||||||||||
| Fuel contribution 1 - fuel supply locations | $ | 12,077 | $ | 13,222 | $ | 35,926 | $ | 36,896 | |||||||
| Fuel contribution 1 - consignment locations | $ | 11,283 | $ | 13,107 | $ | 32,150 | $ | 34,412 | |||||||
| Fuel margin, cents per gallon 2 - fuel supply locations | 5.9 | 6.4 | 6.1 | 6.1 | |||||||||||
| Fuel margin, cents per gallon 2 - consignment agent locations | 28.8 | 28.9 | 27.7 | 26.9 | |||||||||||
| 1 Calculated as fuel revenue less fuel costs; excludes the estimated fixed margin or fixed fee paid to GPMP for the cost of fuel. | |||||||||||||||
| 2 Calculated as fuel contribution divided by fuel gallons sold. | |||||||||||||||
In wholesale, total fuel contribution was approximately $23.4 million for the third quarter of 2024 compared to $26.3 million for the third quarter of 2023. Fuel contribution for the third quarter of 2024 at fuel supply locations decreased by $1.2 million, and fuel contribution at consignment agent locations decreased by $1.8 million, compared to the prior year period, with corresponding decreases in fuel margin per gallon, primarily due to decreased prompt pay discounts related to lower fuel costs and lower volumes. For the third quarter of 2024, site operating expenses decreased by $0.2 million compared to the prior year period.
Fleet Fueling
| For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| (in thousands) | |||||||||||||||
| Fuel gallons sold - proprietary cardlock locations | 34,089 | 34,277 | 103,216 | 97,710 | |||||||||||
| Fuel gallons sold - third-party cardlock locations | 3,105 | 2,985 | 9,575 | 6,631 | |||||||||||
| Fuel contribution 1 - proprietary cardlock locations | $ | 15,699 | $ | 13,497 | $ | 46,789 | $ | 41,539 | |||||||
| Fuel contribution 1 - third-party cardlock locations | $ | 482 | $ | 794 | $ | 1,168 | $ | 971 | |||||||
| Fuel margin, cents per gallon 2 - proprietary cardlock locations | 46.1 | 39.4 | 45.3 | 42.5 | |||||||||||
| Fuel margin, cents per gallon 2 - third-party cardlock locations | 15.5 | 26.6 | 12.2 | 14.6 | |||||||||||
| 1 Calculated as fuel revenue less fuel costs; excludes the estimated fixed fee paid to GPMP for the cost of fuel. | |||||||||||||||
| 2 Calculated as fuel contribution divided by fuel gallons sold. | |||||||||||||||
In fleet fueling, fuel contribution increased by $1.9 million compared to the third quarter of 2023. At proprietary cardlocks, fuel contribution increased by $2.2 million, and fuel margin per gallon also increased for the third quarter of 2024 compared to the third quarter of 2023. At third-party cardlock locations, fuel contribution decreased by $0.3 million, and fuel margin per gallon also decreased for the third quarter of 2024 compared to the third quarter of 2023. These changes were primarily due to differing market conditions impacting the third quarters of 2024 and 2023.
Site Operating Expenses
For the quarter ended September 30, 2024, convenience store operating expenses decreased $3.1 million, or 1.5%, as compared to the prior year period, primarily due to a decrease in same store expenses of $2.8 million, or 1.4%, and a decrease from underperforming retail stores that were closed or converted to dealers. This decline in same store expenses was primarily related to lower personnel costs and lower credit card fees. These decreases were partially offset by $3.8 million of incremental expenses related to recent acquisitions.
Liquidity and Capital Expenditures
As of September 30, 2024, the Company's total liquidity was approximately $869 million, consisting of approximately $292 million of cash and cash equivalents and approximately $577 million of availability under lines of credit. Outstanding debt was $885 million, resulting in net debt, excluding lease related financing liabilities, of approximately $593 million. Capital expenditures were approximately $29.3 million for the quarter ended September 30, 2024.
Quarterly Dividend and Share Repurchase Program
The Company's ability to return cash to its stockholders through its cash dividend program and share repurchase program is consistent with its capital allocation framework and reflects the Company's confidence in the strength of its cash generation ability and strong financial position.
The Board declared a quarterly dividend of $0.03 per share of common stock to be paid on December 3, 2024 to stockholders of record as of November 19, 2024.
There was approximately $25.7 million remaining under the share repurchase program as of September 30, 2024.
Company-Operated Retail Store Count and Segment Update
The following tables present certain information regarding changes in the retail, wholesale and fleet fueling segments for the periods presented:
| For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||
| Retail Segment | 2024 | 2023 | 2024 | 2023 | |||||||||||
| Number of sites at beginning of period | 1,548 | 1,547 | 1,543 | 1,404 | |||||||||||
| Acquired sites | - | 7 | 21 | 166 | |||||||||||
| Newly opened or reopened sites | 1 | 1 | 2 | 4 | |||||||||||
| Company-controlled sites converted to consignment or fuel supply locations, net | (49 | ) | (2 | ) | (51 | ) | (13 | ) | |||||||
| Closed or divested sites | (9 | ) | (1 | ) | (24 | ) | (9 | ) | |||||||
| Number of sites at end of period | 1,491 | 1,552 | 1,491 | 1,552 | |||||||||||
| For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||
| Wholesale Segment 1 | 2024 | 2023 | 2024 | 2023 | |||||||||||
| Number of sites at beginning of period | 1,794 | 1,824 | 1,825 | 1,674 | |||||||||||
| Acquired sites | - | - | - | 190 | |||||||||||
| Newly opened or reopened sites 2 | 10 | 34 | 30 | 58 | |||||||||||
| Consignment or fuel supply locations converted from Company-controlled or fleet fueling sites, net | 49 | 2 | 51 | 13 | |||||||||||
| Closed or divested sites | (21 | ) | (35 | ) | (74 | ) | (110 | ) | |||||||
| Number of sites at end of period | 1,832 | 1,825 | 1,832 | 1,825 | |||||||||||
| 1 Excludes bulk and spot purchasers. | |||||||||||||||
| 2 Includes all signed fuel supply agreements irrespective of fuel distribution commencement date. | |||||||||||||||
| For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||
| Fleet Fueling Segment | 2024 | 2023 | 2024 | 2023 | |||||||||||
| Number of sites at beginning of period | 294 | 293 | 298 | 183 | |||||||||||
| Acquired sites | - | - | - | 111 | |||||||||||
| Closed or divested sites | (14 | ) | (2 | ) | (18 | ) | (3 | ) | |||||||
| Number of sites at end of period | 281 | 295 | 281 | 295 | |||||||||||
Fourth Quarter and Full Year 2024 Guidance
The Company currently expects fourth quarter 2024 Adjusted EBITDA to range between $53 million and $63 million, with an assumed range of average retail fuel margin from 38 to 42 cents per gallon. This outlook translates to a full year 2024 Adjusted EBITDA range of $245 million to $255 million.
The Company is not providing guidance on net income at this time due to the volatility of certain required inputs that are not available without unreasonable efforts, including future fair value adjustments associated with its stock price, as well as depreciation and amortization related to its capital allocation as part of its focus on accelerating organic growth.
Conference Call and Webcast Details
The Company will host a conference call today to discuss these results at 5:00 p.m. Eastern Time. Investors and analysts interested in participating in the live call can dial 800-343-4136 or 203-518-9848.
A simultaneous, live webcast will also be available on the Investor Relations section of the Company's website at https://www.arkocorp.com/news-events/ir-calendar. The webcast will be archived for 30 days.
About ARKO Corp.
ARKO Corp. (Nasdaq: ARKO) is a Fortune 500 company that owns 100% of GPM Investments, LLC and is one of the largest operators of convenience stores and wholesalers of fuel in the United States. Based in Richmond, VA, we operate A Family of Community Brands that offer delicious, prepared foods, beer, snacks, candy, hot and cold beverages, and multiple popular quick serve restaurant brands. Our high value fas REWARDS® loyalty program offers exclusive savings on merchandise and gas. We operate in four reportable segments: retail, which includes convenience stores selling merchandise and fuel products to retail customers; wholesale, which supplies fuel to independent dealers and consignment agents; GPM Petroleum, which sells and supplies fuel to our retail and wholesale sites and charges a fixed fee, primarily to our fleet fueling sites; and fleet fueling, which includes the operation of proprietary and third-party cardlock locations, and issuance of proprietary fuel cards that provide customers access to a nationwide network of fueling sites. To learn more about GPM stores, visit: www.gpminvestments.com. To learn more about ARKO, visit: www.arkocorp.com.
Forward-Looking Statements
This document includes certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may address, among other things, the Company's expected financial and operational results and the related assumptions underlying its expected results. These forward-looking statements are distinguished by use of words such as "anticipate," "aim," "believe," "continue," "could," "estimate," "expect," "guidance," "intends," "may," "might," "plan," "possible," "potential," "predict," "project," "should," "will," "would" and the negative of these terms, and similar references to future periods. These statements are based on management's current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from these expectations due to, among other things, changes in economic, business and market conditions; the Company's ability to maintain the listing of its common stock and warrants on the Nasdaq Stock Market; changes in its strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects and plans; expansion plans and opportunities; changes in the markets in which it competes; changes in applicable laws or regulations, including those relating to environmental matters; market conditions and global and economic factors beyond its control; and the outcome of any known or unknown litigation and regulatory proceedings. Detailed information about these factors and additional important factors can be found in the documents that the Company files with the Securities and Exchange Commission, such as Form 10-K, Form 10-Q and Form 8-K. Forward-looking statements speak only as of the date the statements were made. The Company does not undertake an obligation to update forward-looking information, except to the extent required by applicable law.
Use of Non-GAAP Measures
The Company discloses certain measures on a "same store basis," which is a non-GAAP measure. Information disclosed on a "same store basis" excludes the results of any store that is not a "same store" for the applicable period. A store is considered a same store beginning in the first quarter in which the store had a full quarter of activity in the prior year. The Company believes that this information provides greater comparability regarding its ongoing operating performance. Neither this measure nor those described below should be considered an alternative to measurements presented in accordance with generally accepted accounting principles in the United States ("GAAP").
The Company defines EBITDA as net income before net interest expense, income taxes, depreciation and amortization. Adjusted EBITDA further adjusts EBITDA by excluding the gain or loss on disposal of assets, impairment charges, acquisition and divestiture costs, share-based compensation expense, other non-cash items, and other unusual or non-recurring charges.
At the segment level, the Company defines Operating Income, as adjusted, as operating income excluding the estimated fixed margin or fixed fee paid to GPMP for the cost of fuel. Each of Operating Income, as adjusted, EBITDA and Adjusted EBITDA is a non-GAAP financial measure.
The Company uses EBITDA and Adjusted EBITDA for operational and financial decision-making and believe these measures are useful in evaluating its performance because they eliminate certain items that it does not consider indicators of its operating performance. Additionally, the Company believes Operating Income, as adjusted provides greater comparability regarding its ongoing segment operating performance by eliminating intercompany charges at the segment level. EBITDA and Adjusted EBITDA are also used by many of its investors, securities analysts, and other interested parties in evaluating its operational and financial performance across reporting periods. The Company believes that the presentation of EBITDA and Adjusted EBITDA provides useful information to investors by allowing an understanding of key measures that it uses internally for operational decision-making, budgeting, evaluating acquisition targets, and assessing its operating performance.
Operating Income, as adjusted, EBITDA and Adjusted EBITDA are not recognized terms under GAAP and should not be considered as a substitute for net income or any other financial measure presented in accordance with GAAP. These measures have limitations as analytical tools and should not be considered in isolation or as substitutes for analysis of its results as reported under GAAP. The Company strongly encourages investors to review its financial statements and publicly filed reports in their entirety and not to rely on any single financial measure.
Because non-GAAP financial measures are not standardized, same store measures, Operating Income, as adjusted, EBITDA and Adjusted EBITDA, as defined by the Company, may not be comparable to similarly titled measures reported by other companies. It therefore may not be possible to compare the Company's use of these non-GAAP financial measures with those used by other companies.
Company Contact
Jordan Mann
ARKO Corp.
investors@gpminvestments.com
Investor Contact
Sean Mansouri, CFA
Elevate IR
(720) 330-2829
ARKO@elevate-ir.com
| Condensed Consolidated Statements of Operations | |||||||||||||||
| For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| (in thousands) | |||||||||||||||
| Revenues: | |||||||||||||||
| Fuel revenue | $ | 1,783,871 | $ | 2,086,392 | $ | 5,302,734 | $ | 5,705,156 | |||||||
| Merchandise revenue | 469,616 | 506,425 | 1,358,519 | 1,391,274 | |||||||||||
| Other revenues, net | 25,749 | 29,237 | 78,600 | 83,141 | |||||||||||
| Total revenues | 2,279,236 | 2,622,054 | 6,739,853 | 7,179,571 | |||||||||||
| Operating expenses: | |||||||||||||||
| Fuel costs | 1,626,399 | 1,923,869 | 4,855,462 | 5,262,854 | |||||||||||
| Merchandise costs | 315,597 | 345,699 | 913,823 | 952,925 | |||||||||||
| Site operating expenses | 222,744 | 226,698 | 665,366 | 637,383 | |||||||||||
| General and administrative expenses | 38,636 | 44,116 | 123,230 | 127,192 | |||||||||||
| Depreciation and amortization | 33,132 | 33,713 | 98,425 | 94,949 | |||||||||||
| Total operating expenses | 2,236,508 | 2,574,095 | 6,656,306 | 7,075,303 | |||||||||||
| Other expenses, net | 1,159 | 3,885 | 3,896 | 11,561 | |||||||||||
| Operating income | 41,569 | 44,074 | 79,651 | 92,707 | |||||||||||
| Interest and other financial income | 3,135 | 9,371 | 26,462 | 18,897 | |||||||||||
| Interest and other financial expenses | (26,759 | ) | (23,950 | ) | (73,910 | ) | (67,238 | ) | |||||||
| Income before income taxes | 17,945 | 29,495 | 32,203 | 44,366 | |||||||||||
| Income tax expense | (8,300 | ) | (7,993 | ) | (9,139 | ) | (10,849 | ) | |||||||
| Income (loss) from equity investment | 29 | (14 | ) | 79 | (77 | ) | |||||||||
| Net income | $ | 9,674 | $ | 21,488 | $ | 23,143 | $ | 33,440 | |||||||
| Less: Net income attributable to non-controlling interests | - | 48 | - | 149 | |||||||||||
| Net income attributable to ARKO Corp. | $ | 9,674 | $ | 21,440 | $ | 23,143 | $ | 33,291 | |||||||
| Series A redeemable preferred stock dividends | (1,446 | ) | (1,449 | ) | (4,305 | ) | (4,301 | ) | |||||||
| Net income attributable to common shareholders | $ | 8,228 | $ | 19,991 | $ | 18,838 | $ | 28,990 | |||||||
| Net income per share attributable to common shareholders - basic | $ | 0.07 | $ | 0.17 | $ | 0.16 | $ | 0.24 | |||||||
| Net income per share attributable to common shareholders - diluted | $ | 0.07 | $ | 0.17 | $ | 0.16 | $ | 0.24 | |||||||
| Weighted average shares outstanding: | |||||||||||||||
| Basic | 115,771 | 118,389 | 116,262 | 119,505 | |||||||||||
| Diluted | 117,888 | 120,292 | 117,342 | 120,602 | |||||||||||
| Condensed Consolidated Balance Sheets | |||||||
| September 30, 2024 | December 31, 2023 | ||||||
| (in thousands) | |||||||
| Assets | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 291,697 | $ | 218,120 | |||
| Restricted cash | 27,314 | 23,301 | |||||
| Short-term investments | 5,132 | 3,892 | |||||
| Trade receivables, net | 117,890 | 134,735 | |||||
| Inventory | 236,487 | 250,593 | |||||
| Other current assets | 101,428 | 118,472 | |||||
| Total current assets | 779,948 | 749,113 | |||||
| Non-current assets: | |||||||
| Property and equipment, net | 740,761 | 742,610 | |||||
| Right-of-use assets under operating leases | 1,406,429 | 1,384,693 | |||||
| Right-of-use assets under financing leases, net | 159,110 | 162,668 | |||||
| Goodwill | 300,032 | 292,173 | |||||
| Intangible assets, net | 187,999 | 214,552 | |||||
| Equity investment | 2,964 | 2,885 | |||||
| Deferred tax asset | 58,573 | 52,293 | |||||
| Other non-current assets | 52,485 | 49,377 | |||||
| Total assets | $ | 3,688,301 | $ | 3,650,364 | |||
| Liabilities | |||||||
| Current liabilities: | |||||||
| Long-term debt, current portion | $ | 15,372 | $ | 16,792 | |||
| Accounts payable | 209,102 | 213,657 | |||||
| Other current liabilities | 173,578 | 179,536 | |||||
| Operating leases, current portion | 70,120 | 67,053 | |||||
| Financing leases, current portion | 11,175 | 9,186 | |||||
| Total current liabilities | 479,347 | 486,224 | |||||
| Non-current liabilities: | |||||||
| Long-term debt, net | 869,323 | 828,647 | |||||
| Asset retirement obligation | 87,331 | 84,710 | |||||
| Operating leases | 1,424,834 | 1,395,032 | |||||
| Financing leases | 211,380 | 213,032 | |||||
| Other non-current liabilities | 236,081 | 266,602 | |||||
| Total liabilities | 3,308,296 | 3,274,247 | |||||
| Series A redeemable preferred stock | 100,000 | 100,000 | |||||
| Shareholders' equity: | |||||||
| Common stock | 12 | 12 | |||||
| Treasury stock | (106,123 | ) | (74,134 | ) | |||
| Additional paid-in capital | 272,604 | 245,007 | |||||
| Accumulated other comprehensive income | 9,119 | 9,119 | |||||
| Retained earnings | 104,393 | 96,097 | |||||
| Total shareholders' equity | 280,005 | 276,101 | |||||
| Non-controlling interest | - | 16 | |||||
| Total equity | 280,005 | 276,117 | |||||
| Total liabilities, redeemable preferred stock and equity | $ | 3,688,301 | $ | 3,650,364 | |||
| Condensed Consolidated Statements of Cash Flows | |||||||||||||||
| For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| (in thousands) | |||||||||||||||
| Cash flows from operating activities: | |||||||||||||||
| Net income | $ | 9,674 | $ | 21,488 | $ | 23,143 | $ | 33,440 | |||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||
| Depreciation and amortization | 33,132 | 33,713 | 98,425 | 94,949 | |||||||||||
| Deferred income taxes | 2,269 | 10,087 | (3,660 | ) | (4,028 | ) | |||||||||
| Loss on disposal of assets and impairment charges | 1,752 | 2,265 | 5,137 | 5,543 | |||||||||||
| Foreign currency (gain) loss | (16 | ) | 72 | 41 | 130 | ||||||||||
| Gain from issuance of shares as payment of deferred consideration related to business acquisition | - | - | (2,681 | ) | - | ||||||||||
| Gain from settlement related to business acquisition | - | - | (6,356 | ) | - | ||||||||||
| Amortization of deferred financing costs and debt discount | 668 | 644 | 2,000 | 1,857 | |||||||||||
| Amortization of deferred income | (3,757 | ) | (2,373 | ) | (10,126 | ) | (6,302 | ) | |||||||
| Accretion of asset retirement obligation | 628 | 572 | 1,871 | 1,690 | |||||||||||
| Non-cash rent | 3,634 | 3,860 | 10,805 | 10,418 | |||||||||||
| Charges to allowance for credit losses | 92 | 448 | 733 | 1,021 | |||||||||||
| (Income) loss from equity investment | (29 | ) | 14 | (79 | ) | 77 | |||||||||
| Share-based compensation | 2,149 | 4,614 | 8,262 | 13,238 | |||||||||||
| Fair value adjustment of financial assets and liabilities | 1,443 | (6,379 | ) | (10,763 | ) | (11,627 | ) | ||||||||
| Other operating activities, net | 66 | 1,303 | 752 | 2,279 | |||||||||||
| Changes in assets and liabilities: | |||||||||||||||
| Decrease (increase) in trade receivables | 37,596 | (44,314 | ) | 16,112 | (62,487 | ) | |||||||||
| Decrease (increase) in inventory | 14,655 | (9,178 | ) | 17,427 | (17,386 | ) | |||||||||
| Decrease (increase) in other assets | 8,066 | (17,464 | ) | 13,909 | (28,429 | ) | |||||||||
| (Decrease) increase in accounts payable | (32,614 | ) | 15,087 | (6,137 | ) | 29,667 | |||||||||
| Increase in other current liabilities | 23,768 | 16,643 | 17,844 | 8,992 | |||||||||||
| (Decrease) increase in asset retirement obligation | (163 | ) | - | (283 | ) | 46 | |||||||||
| Increase in non-current liabilities | 6,143 | 1,719 | 22,754 | 5,719 | |||||||||||
| Net cash provided by operating activities | 109,156 | 32,821 | 199,130 | 78,807 | |||||||||||
| Cash flows from investing activities: | |||||||||||||||
| Purchase of property and equipment | (29,269 | ) | (25,565 | ) | (77,781 | ) | (75,603 | ) | |||||||
| Purchase of intangible assets | - | (10 | ) | - | (45 | ) | |||||||||
| Proceeds from sale of property and equipment | 1,058 | 10,621 | 51,353 | 307,106 | |||||||||||
| Business acquisitions, net of cash | (91 | ) | (13,268 | ) | (54,549 | ) | (494,904 | ) | |||||||
| Loans to equity investment, net | 14 | - | 42 | - | |||||||||||
| Net cash used in investing activities | (28,288 | ) | (28,222 | ) | (80,935 | ) | (263,446 | ) | |||||||
| Cash flows from financing activities: | |||||||||||||||
| Receipt of long-term debt, net | - | 4,600 | 47,556 | 78,833 | |||||||||||
| Repayment of debt | (6,714 | ) | (6,006 | ) | (20,563 | ) | (16,517 | ) | |||||||
| Principal payments on financing leases | (1,274 | ) | (1,325 | ) | (3,580 | ) | (4,237 | ) | |||||||
| Early settlement of deferred consideration related to business acquisition | - | - | (17,155 | ) | - | ||||||||||
| Proceeds from sale-leaseback | - | - | - | 80,397 | |||||||||||
| Payment of Ares Put Option | - | - | - | (9,808 | ) | ||||||||||
| Common stock repurchased | - | (11,636 | ) | (31,989 | ) | (25,199 | ) | ||||||||
| Dividends paid on common stock | (3,473 | ) | (3,559 | ) | (10,542 | ) | (10,775 | ) | |||||||
| Dividends paid on redeemable preferred stock | (1,446 | ) | (1,449 | ) | (4,305 | ) | (4,301 | ) | |||||||
| Net cash (used in) provided by financing activities | (12,907 | ) | (19,375 | ) | (40,578 | ) | 88,393 | ||||||||
| Net increase (decrease) in cash and cash equivalents and restricted cash | 67,961 | (14,776 | ) | 77,617 | (96,246 | ) | |||||||||
| Effect of exchange rate on cash and cash equivalents and restricted cash | 11 | (62 | ) | (27 | ) | (83 | ) | ||||||||
| Cash and cash equivalents and restricted cash, beginning of period | 251,039 | 235,278 | 241,421 | 316,769 | |||||||||||
| Cash and cash equivalents and restricted cash, end of period | $ | 319,011 | $ | 220,440 | $ | 319,011 | $ | 220,440 | |||||||
Supplemental Disclosure of Non-GAAP Financial Information
| Reconciliation of EBITDA and Adjusted EBITDA | ||||||||||||||||
| For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| (in thousands) | ||||||||||||||||
| Net income | $ | 9,674 | $ | 21,488 | $ | 23,143 | $ | 33,440 | ||||||||
| Interest and other financing expenses, net | 23,624 | 14,579 | 47,448 | 48,341 | ||||||||||||
| Income tax expense | 8,300 | 7,993 | 9,139 | 10,849 | ||||||||||||
| Depreciation and amortization | 33,132 | 33,713 | 98,425 | 94,949 | ||||||||||||
| EBITDA | 74,730 | 77,773 | 178,155 | 187,579 | ||||||||||||
| Acquisition and divestiture costs (a) | 1,729 | 1,127 | 3,919 | 7,980 | ||||||||||||
| Loss on disposal of assets and impairment charges (b) | 1,752 | 2,265 | 5,137 | 5,543 | ||||||||||||
| Share-based compensation expense (c) | 2,149 | 4,614 | 8,262 | 13,238 | ||||||||||||
| (Income) loss from equity investment (d) | (29 | ) | 14 | (79 | ) | 77 | ||||||||||
| Fuel and franchise taxes received in arrears (e) | (862 | ) | - | (1,427 | ) | - | ||||||||||
| Adjustment to contingent consideration (f) | (706 | ) | 952 | (998 | ) | (672 | ) | |||||||||
| Other (g) | 14 | 558 | (957 | ) | 726 | |||||||||||
| Adjusted EBITDA | $ | 78,777 | $ | 87,303 | $ | 192,012 | $ | 214,471 | ||||||||
| Additional information | ||||||||||||||||
| Non-cash rent expense (h) | $ | 3,634 | $ | 3,860 | $ | 10,805 | $ | 10,418 | ||||||||
| (a) Eliminates costs incurred that are directly attributable to business acquisitions and divestitures (including conversion of retail stores to dealer sites) and salaries of employees whose primary job function is to execute the Company's acquisition and divestiture strategy and facilitate integration of acquired operations. | ||||||||||||||||
| (b) Eliminates the non-cash loss from the sale of property and equipment, the loss recognized upon the sale of related leased assets, and impairment charges on property and equipment and right-of-use assets related to closed and non-performing sites. | ||||||||||||||||
| (c) Eliminates non-cash share-based compensation expense related to the equity incentive program in place to incentivize, retain, and motivate employees, certain non-employees and members of the Board. | ||||||||||||||||
| (d) Eliminates the Company's share of (income) loss attributable to its unconsolidated equity investment. | ||||||||||||||||
| (e) Eliminates the receipt of historical fuel and franchise tax amounts for multiple prior periods. | ||||||||||||||||
| (f) Eliminates fair value adjustments to the contingent consideration owed to the seller for the 2020 Empire acquisition. | ||||||||||||||||
| (g) Eliminates other unusual or non-recurring items that the Company does not consider to be meaningful in assessing operating performance. | ||||||||||||||||
| (h) Non-cash rent expense reflects the extent to which GAAP rent expense recognized exceeded (or was less than) cash rent payments. GAAP rent expense varies depending on the terms of the Company's lease portfolio. For newer leases, rent expense recognized typically exceeds cash rent payments, whereas, for more mature leases, rent expense recognized is typically less than cash rent payments. | ||||||||||||||||
Supplemental Disclosures of Segment Information
Retail Segment
| For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| (in thousands) | |||||||||||||||
| Revenues: | |||||||||||||||
| Fuel revenue | $ | 929,783 | $ | 1,086,405 | $ | 2,730,583 | $ | 2,945,243 | |||||||
| Merchandise revenue | 469,616 | 506,425 | 1,358,519 | 1,391,274 | |||||||||||
| Other revenues, net | 16,082 | 19,750 | 49,496 | 57,302 | |||||||||||
| Total revenues | 1,415,481 | 1,612,580 | 4,138,598 | 4,393,819 | |||||||||||
| Operating expenses: | |||||||||||||||
| Fuel costs | 826,765 | 980,161 | 2,443,499 | 2,661,406 | |||||||||||
| Merchandise costs | 315,597 | 345,699 | 913,823 | 952,925 | |||||||||||
| Site operating expenses | 202,097 | 205,216 | 602,664 | 578,496 | |||||||||||
| Total operating expenses | 1,344,459 | 1,531,076 | 3,959,986 | 4,192,827 | |||||||||||
| Operating income | 71,022 | 81,504 | 178,612 | 200,992 | |||||||||||
| Intercompany charges by GPMP 1 | 14,072 | 15,022 | 40,920 | 42,149 | |||||||||||
| Operating income, as adjusted | $ | 85,094 | $ | 96,526 | $ | 219,532 | $ | 243,141 | |||||||
| 1 Represents the estimated fixed margin or fixed fee paid to GPMP for the cost of fuel. | |||||||||||||||
The table below shows financial information and certain key metrics of recent acquisitions in the Retail Segment that do not have (or have only partial) comparable information for any of the prior periods.
| For the Three Months Ended September 30, 2024 | For the Nine Months Ended September 30, 2024 | ||||||||||||||||||||||
| Speedy's 1 | SpeedyQ 2 | Total | Speedy's 1 | SpeedyQ 2 | Total | ||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||
| Date of Acquisition: | Aug 15, 2023 | Apr 9, 2024 | Aug 15, 2023 | Apr 9, 2024 | |||||||||||||||||||
| Revenues: | |||||||||||||||||||||||
| Fuel revenue | $ | 4,894 | $ | 14,222 | $ | 19,116 | $ | 14,248 | $ | 27,578 | $ | 41,826 | |||||||||||
| Merchandise revenue | 2,668 | 7,512 | 10,180 | 7,577 | 14,250 | 21,827 | |||||||||||||||||
| Other revenues, net | 50 | 271 | 321 | 156 | 498 | 654 | |||||||||||||||||
| Total revenues | 7,612 | 22,005 | 29,617 | 21,981 | 42,326 | 64,307 | |||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Fuel costs | 4,400 | 12,466 | 16,866 | 12,873 | 24,280 | 37,153 | |||||||||||||||||
| Merchandise costs | 1,713 | 5,363 | 7,076 | 4,806 | 10,236 | 15,042 | |||||||||||||||||
| Site operating expenses | 1,195 | 3,329 | 4,524 | 3,307 | 6,387 | 9,694 | |||||||||||||||||
| Total operating expenses | 7,308 | 21,158 | 28,466 | 20,986 | 40,903 | 61,889 | |||||||||||||||||
| Operating income | 304 | 847 | 1,151 | $ | 995 | $ | 1,423 | $ | 2,418 | ||||||||||||||
| Intercompany charges by GPMP 3 | 79 | 212 | 291 | 229 | 405 | 634 | |||||||||||||||||
| Operating income, as adjusted | $ | 383 | $ | 1,059 | $ | 1,442 | $ | 1,224 | $ | 1,828 | $ | 3,052 | |||||||||||
| Fuel gallons sold | 1,590 | 4,240 | 5,830 | 4,593 | 8,097 | 12,690 | |||||||||||||||||
| Fuel contribution 4 | $ | 573 | $ | 1,968 | $ | 2,541 | $ | 1,604 | $ | 3,703 | $ | 5,307 | |||||||||||
| Merchandise contribution 5 | $ | 955 | $ | 2,149 | $ | 3,104 | $ | 2,771 | $ | 4,014 | $ | 6,785 | |||||||||||
| Merchandise margin 6 | 35.8 | % | 28.6 | % | 36.6 | % | 28.2 | % | |||||||||||||||
| 1 Acquisition of seven Speedy's retail stores. | |||||||||||||||||||||||
| 2 Acquisition of 21 SpeedyQ retail stores. | |||||||||||||||||||||||
| 3 Represents the estimated fixed margin paid to GPMP for the cost of fuel. | |||||||||||||||||||||||
| 4 Calculated as fuel revenue less fuel costs; excludes the estimated fixed margin paid to GPMP for the cost of fuel. | |||||||||||||||||||||||
| 5 Calculated as merchandise revenue less merchandise costs. | |||||||||||||||||||||||
| 6 Calculated as merchandise contribution divided by merchandise revenue. | |||||||||||||||||||||||
Wholesale Segment
| For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| (in thousands) | |||||||||||||||
| Revenues: | |||||||||||||||
| Fuel revenue | $ | 720,646 | $ | 843,891 | $ | 2,147,853 | $ | 2,339,878 | |||||||
| Other revenues, net | 6,751 | 6,265 | 20,459 | 18,866 | |||||||||||
| Total revenues | 727,397 | 850,156 | 2,168,312 | 2,358,744 | |||||||||||
| Operating expenses: | |||||||||||||||
| Fuel costs | 709,408 | 830,121 | 2,115,367 | 2,305,098 | |||||||||||
| Site operating expenses | 9,817 | 10,009 | 28,682 | 29,303 | |||||||||||
| Total operating expenses | 719,225 | 840,130 | 2,144,049 | 2,334,401 | |||||||||||
| Operating income | 8,172 | $ | 10,026 | $ | 24,263 | $ | 24,343 | ||||||||
| Intercompany charges by GPMP 1 | 12,122 | 12,559 | 35,590 | 36,528 | |||||||||||
| Operating income, as adjusted | $ | 20,294 | $ | 22,585 | $ | 59,853 | $ | 60,871 | |||||||
| 1 Represents the estimated fixed margin or fixed fee paid to GPMP for the cost of fuel. | |||||||||||||||
Fleet Fueling Segment
| For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| (in thousands) | |||||||||||||||
| Revenues: | |||||||||||||||
| Fuel revenue | $ | 125,933 | $ | 145,496 | $ | 398,266 | $ | 394,136 | |||||||
| Other revenues, net | 2,335 | 2,575 | 7,004 | 5,202 | |||||||||||
| Total revenues | 128,268 | 148,071 | 405,270 | 399,338 | |||||||||||
| Operating expenses: | |||||||||||||||
| Fuel costs | 111,554 | 133,037 | 355,761 | 356,703 | |||||||||||
| Site operating expenses | 5,876 | 6,206 | 18,861 | 16,039 | |||||||||||
| Total operating expenses | 117,430 | 139,243 | 374,622 | 372,742 | |||||||||||
| Operating income | 10,838 | 8,828 | 30,648 | 26,596 | |||||||||||
| Intercompany charges by GPMP 1 | 1,802 | 1,832 | 5,452 | 5,077 | |||||||||||
| Operating income, as adjusted | $ | 12,640 | $ | 10,660 | $ | 36,100 | $ | 31,673 | |||||||
| 1 Represents the estimated fixed fee paid to GPMP for the cost of fuel. | |||||||||||||||
