Susser Holdings Reports First Quarter 2013 Results
- Same-store merchandise sales increase 4.2%
- Average retail fuel gallons per store up 4.1%
- 4 new Stripes® stores opened in Q1, 2 more to date in Q2
Same-store merchandise sales increased 4.2 percent in the first quarter, compared with growth of 6.7 percent in the first quarter of 2012. Average retail gallons sold per store were up 4.1 percent versus a year ago, compared with growth of 5.8 percent in the first quarter of 2012. Retail net merchandise margin was 33.1 percent in the latest quarter, versus 33.5 percent a year earlier.
Retail segment fuel margin per gallon before credit card expense averaged
The retail fuel margin for the first quarter has been reduced by a
Adjusted EBITDA(1) totaled
Net loss attributable to
First quarter consolidated revenues totaled
"We delivered another strong quarter, with solid year-on-year growth in same store merchandise sales, higher fuel volumes and increased fuel margins in both retail and wholesale segments," said
"As we look ahead to the second quarter and the remainder of the year, however, we will be comparing against some very big numbers reported in 2012. Springtime temperatures in
"We are very pleased with the refinancing of our high yield bonds, which will lower our pre-tax annual interest expense significantly, and based on current rates, will add approximately
Five new dealer sites were added in the wholesale segment last quarter, and five sites were discontinued, for a total of 579 contract branded sites as of March 31. This consisted of 92 consignment locations and 487 other independent branded dealer contracts. The Company expects to add a total of 25 to 40 new wholesale branded dealers and consignment sites and discontinue supply to 13 to 17 sites this year.
Financing Update
As previously announced, in early
Susser initially plans to use approximately
In addition, the company completed sale/leaseback transactions on
First Quarter Financial and Operating Highlights
Merchandise - Merchandise sales totaled
Net merchandise margin as a percentage of sales was 33.1 percent, compared with 33.5 percent a year ago. Merchandise gross profit was
Retail Fuel - Retail fuel volumes increased 7.4 percent compared with the year-earlier period to 223.5 million gallons. Average gallons sold per store were 4.1 percent higher year-over-year, at approximately 31,100 gallons per week. Retail fuel revenues totaled
Retail fuel gross margin averaged
Wholesale Fuel - Susser's wholesale segment includes all of SUSP operations as well as the consignment sales and transportation business that was not contributed to SUSP. Wholesale fuel volumes sold to third parties - which is all gallons except those distributed to Susser's retail stores - increased 3.6 percent from the prior-year period to 146.7 million gallons. Wholesale fuel revenues increased 0.8 percent from a year ago to
Wholesale fuel gross margin from third parties was
2013 Guidance
The Company is reducing its interest expense guidance to reflect the impact of the previously discussed debt refinancing, and it is reaffirming the remainder of its original 2013 full-year guidance as follows:
FY 2013 Guidance | 1Q 2013 Actual | FY 2012 Actual | |
Merchandise Same-Store Sales Growth | 3%-5% | 4.2% | 6.6% |
Merchandise Margin, Net of Shortages | 33.25%-34.25% | 33.1 | 33.9% |
Retail Average Per-Store Gallons Growth | 1%-4% | 4.1% | 5.8% |
Fuel Gross Profit Margins (cents / gallon): | |||
Margin on Retail Gallons Sold (a) | 15-18 | 16.6 | 21.8 |
Margin on Wholesale Gallons Sold to Third Parties (b) | 4-6 | 5.9 | 6.2 |
Margin on Wholesale Gallons Sold to Retail Segment (c) | approx 3 | 3.0 | |
Rent Expense (millions) (f) | |||
Depreciation, Amortization & Accretion Expense (millions) | |||
Interest Expense (millions) (d) | |||
New Retail Stores (e) | 29-35 | 4 | 25 |
New Wholesale Dealer Sites (e) | 25-40 | 5 | 39 |
Gross Capital Spending (millions) (f) | |||
Net Capital Spending (millions)(f) |
(a) | We report retail fuel margin before deducting credit card costs, which were approximately | |||
(b) | Wholesale segment margin on third-party gallons includes SUSP operations and gallons sold at consignment locations (retained by SUSS) but excludes gallons sold to the retail division. This metric remains the same as prior to the SUSP initial public offering. | |||
(c) | Wholesale segment margin to Stripes retail stores reflects the gross profit mark-up charged by SUSP effective | |||
(d) | Reflects the impact of refinancing the | |||
(e) | Numbers for both years do not reflect existing retail or wholesale store closures, which are typically lower volume locations than new sites. In the first quarter of 2013, the company closed 1 retail store and discontinued 5 wholesale sites. | |||
(f) | Gross capital expenditures include acquisitions and purchase of intangibles. Net capital spending reduces gross capital expenditures by proceeds from sale/leaseback transactions and asset dispositions. The Company does not provide guidance on potential acquisitions. Net capital spending is not reduced for debt financing. The impact of sales of stores by SUSS to SUSP under sale/leaseback agreements does not impact Susser's consolidated capital expenditures or rent expense. | |||
_______________________ (1) Adjusted EBITDA is a non-GAAP financial measure of performance that has limitations and should not be considered as a substitute for net income. Please refer to the discussion and tables under "Reconciliations of Non-GAAP Measures" later in this news release for a discussion of our use of Adjusted EBITDA and Adjusted EBITDAR, and a reconciliation to net income (loss) attributable to |
First Quarter Earnings Conference Call
Susser's management team will hold a conference call today at 11:00 a.m. ET (10:00 a.m. CT) to discuss first quarter 2013 results for both
Forward-Looking Statements
This news release contains "forward-looking statements" which may describe Susser's objectives, expected results of operations, targets, plans, strategies, costs, anticipated capital expenditures, potential acquisitions, new store openings and/or new dealer locations. These statements are based on current plans and expectations and involve a number of risks and uncertainties that could cause actual results and events to vary materially, including but not limited to: competitive pressures from convenience stores, gasoline stations, other non-traditional retailers located in our markets and other wholesale fuel distributors; volatility in crude oil and wholesale petroleum costs; increasing consumer preferences for alternative motor fuels, or improvements in fuel efficiency; inability to build or acquire and successfully integrate new stores; our dependence on our subsidiaries for cash flow generation, including SUSP, and our exposure to the business risks of SUSP by virtue of our controlling ownership interest; operational limitations imposed by our contractual arrangements with SUSP; risks relating to our substantial indebtedness and the restrictive covenants associated with that indebtedness; our ability to comply with federal and state regulations including those related to alcohol, tobacco and environmental matters; dangers inherent in storing and transporting motor fuel; pending or future consumer or other litigation or adverse publicity concerning food quality, food safety or other health concerns related to our restaurant facilities; wholesale cost increases of tobacco products or future legislation or campaigns to discourage smoking; costs associated with employee healthcare requirements; compliance with, or changes in, tax laws-including those impacting the tax treatment of SUSP; dependence on two principal suppliers for merchandise; dependence on suppliers for credit terms; seasonality; dependence on senior management and the ability to attract qualified employees; acts of war and terrorism; dependence on our information technology systems; severe weather; cross-border risks associated with the concentration of our stores in markets bordering
For a full discussion of these and other risks and uncertainties, refer to the "Risk Factors" section of the Company's most recently filed annual report on Form 10-K and subsequent quarterly filings. These forward-looking statements are based on and include our estimates as of the date hereof. Subsequent events and market developments could cause our estimates to change. While we may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, even if new information becomes available, except as may be required by applicable law.
Financial statements follow
| |||||||
Three Months Ended | |||||||
April 1, | March 31, | ||||||
(dollars in thousands, except share and per share amounts) | |||||||
Revenues: | |||||||
Merchandise sales | $ | 226,070 | $ | 247,478 | |||
Motor fuel sales | 1,175,206 | 1,225,494 | |||||
Other income | 13,111 | 13,376 | |||||
Total revenues | 1,414,387 | 1,486,348 | |||||
Cost of sales: | |||||||
Merchandise | 150,343 | 165,645 | |||||
Motor fuel | 1,140,403 | 1,172,631 | |||||
Other | 689 | 1,034 | |||||
Total cost of sales | 1,291,435 | 1,339,310 | |||||
Gross profit | 122,952 | 147,038 | |||||
Operating expenses: | |||||||
Personnel | 41,912 | 50,967 | |||||
General and administrative | 10,934 | 14,047 | |||||
Other operating | 36,556 | 40,047 | |||||
Rent | 11,772 | 11,740 | |||||
Loss (gain) on disposal of assets and impairment charge | (293) | 448 | |||||
Depreciation, amortization and accretion | 12,563 | 14,182 | |||||
Total operating expenses | 113,444 | 131,431 | |||||
Income from operations | 9,508 | 15,607 | |||||
Other income (expense): | |||||||
Interest expense, net | (10,327) | (10,105) | |||||
Other miscellaneous | (42) | (78) | |||||
Total other expense, net | (10,369) | (10,183) | |||||
Income before income taxes | (861) | 5,424 | |||||
Income tax benefit (expense) | 335 | (1,548) | |||||
Net income (loss) | (526) | 3,876 | |||||
Less: Net income attributable to noncontrolling interest | 2 | 4,108 | |||||
Net loss attributable to | $ | (528) | $ | (232) | |||
Net income loss per share attributable to | |||||||
Basic | $ | (0.03) | $ | (0.01) | |||
Diluted | $ | (0.03) | $ | (0.01) | |||
Weighted average shares outstanding: | |||||||
Basic | 20,609,213 | 21,068,222 | |||||
Diluted | 20,609,213 | 21,068,222 |
| |||||||
December 30, | March 31, | ||||||
unaudited | |||||||
(in thousands) | |||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 286,232 | $ | 263,918 | |||
Accounts receivable, net of allowance for doubtful accounts of | 105,874 | 120,931 | |||||
Inventories, net | 115,048 | 132,678 | |||||
Other current assets | 6,678 | 11,662 | |||||
Total current assets | 513,832 | 529,189 | |||||
Property and equipment, net | 602,151 | 630,262 | |||||
Other assets: | |||||||
Marketable securities | 148,264 | 122,267 | |||||
Goodwill | 244,398 | 244,398 | |||||
Intangible assets, net | 45,764 | 44,462 | |||||
Other noncurrent assets | 15,381 | 15,417 | |||||
Total assets | $ | 1,569,790 | $ | 1,585,995 | |||
Liabilities and shareholders' equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 171,545 | $ | 194,218 | |||
Accrued expenses and other current liabilities | 63,834 | 58,010 | |||||
Current maturities of long-term debt | 36 | 36 | |||||
Total current liabilities | 235,415 | 252,264 | |||||
Revolving line of credit | 35,590 | 58,600 | |||||
Long-term debt | 571,649 | 545,737 | |||||
Deferred gain, long-term portion | 28,548 | 27,963 | |||||
Deferred tax liability, long-term portion | 80,992 | 81,973 | |||||
Other noncurrent liabilities | 16,897 | 16,303 | |||||
Total liabilities | 969,091 | 982,840 | |||||
Commitments and contingencies: | |||||||
Shareholders' equity: | |||||||
Common stock, | 212 | 213 | |||||
Additional paid-in capital | 276,430 | 277,300 | |||||
Treasury stock, common shares, at cost; 390,201 as of | (8,068) | (6,203) | |||||
Retained earnings | 120,924 | 121,315 | |||||
Total | 389,498 | 392,625 | |||||
Noncontrolling interest | 211,201 | 210,530 | |||||
Total shareholders' equity | 600,699 | 603,155 | |||||
Total liabilities and shareholders' equity | $ | 1,569,790 | $ | 1,585,995 |
Key Operating Metrics
The following table sets forth, for the periods indicated, information concerning key measures we rely on to gauge our operating performance:
Three Months Ended | |||||||
April 1, | March 31, | ||||||
(dollars and gallons in thousands, except motor fuel pricing and gross profit per gallon) | |||||||
Revenue: | |||||||
Merchandise sales | $ | 226,070 | $ | 247,478 | |||
Motor fuel—retail | 736,405 | 782,979 | |||||
Motor fuel—wholesale | 438,801 | 442,515 | |||||
Other | 13,111 | 13,376 | |||||
Total revenue | $ | 1,414,387 | $ | 1,486,348 | |||
Gross profit: | |||||||
Merchandise | $ | 75,727 | $ | 81,833 | |||
Motor fuel—retail (2) | 27,725 | 37,011 | |||||
Motor fuel—wholesale to third parties (3) | 7,078 | 8,633 | |||||
Motor fuel—wholesale to Stripes (2) | — | 6,532 | |||||
Other, including intercompany eliminations | 12,422 | 13,029 | |||||
Total gross profit | $ | 122,952 | $ | 147,038 | |||
Adjusted EBITDA (4): | |||||||
Retail | $ | 19,262 | $ | 21,885 | |||
Wholesale | 5,222 | 12,320 | |||||
Other | (1,534) | (2,409) | |||||
Total Adjusted EBITDA | $ | 22,950 | $ | 31,796 | |||
Retail merchandise margin | 33.5 | % | 33.1 | % | |||
Merchandise same-store sales growth (1) | 6.7 | % | 4.2 | % | |||
Average per retail store per week: | |||||||
Merchandise sales | $ | 32.2 | $ | 34.1 | |||
Motor fuel gallons sold | 29.8 | 31.1 | |||||
Motor fuel gallons sold: | |||||||
Retail | 208,137 | 223,477 | |||||
Wholesale - third party | 141,581 | 146,652 | |||||
Average retail price of motor fuel per gallon | $ | 3.54 | $ | 3.50 | |||
Motor fuel gross profit cents per gallon: | |||||||
Retail (2) | 13.3 | ¢ | 16.6 | ¢ | |||
Wholesale - third party (3) | 5.0 | ¢ | 5.9 | ¢ | |||
Retail credit card cents per gallon | 5.4 | ¢ | 5.5 | ¢ |
(1) | We include a store in the same store sales base in its thirteenth full month of our operation. | |||||||
(2) | Effective | |||||||
(3) | The wholesale margin from third parties excludes sales and gross profit to the retail segment. Wholesale margin to Stripes reflects the markup of approximately | |||||||
(4) | We define EBITDA as net income (loss) attributable to |
We believe EBITDA, Adjusted EBITDA and Adjusted EBITDAR are useful to investors in evaluating our operating performance because:
- securities analysts and other interested parties use such calculations as a measure of financial performance and debt service capabilities;
- they facilitate management's ability to measure the operating performance of our business on a consistent basis by excluding the impact of items not directly resulting from our retail convenience stores and wholesale motor fuel distribution operations;
- they are used by our management for internal planning purposes, including aspects of our consolidated operating budget, capital expenditures, as well as for segment and individual site operating targets; and
- they are used by our Board and management for determining certain management compensation targets and thresholds.
EBITDA, Adjusted EBITDA and Adjusted EBITDAR are not recognized terms under GAAP and do not purport to be alternatives to net income (loss) as measures of operating performance. EBITDA, Adjusted EBITDA and Adjusted EBITDAR have limitations as analytical tools, and you should not consider them in isolation or as substitutes for analysis of our results as reported under GAAP. Some of these limitations include:
- they do not reflect our cash expenditures, or future requirements, for capital expenditures or contractual commitments;
- they do not reflect changes in, or cash requirements for, working capital;
- they do not reflect significant interest expense, or the cash requirements necessary to service interest or principal payments on our existing revolving credit facility or existing notes;
- they do not reflect payments made or future requirements for income taxes;
- although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA, Adjusted EBITDA and Adjusted EBITDAR do not reflect cash requirements for such replacements; and
- because not all companies use identical calculations, our presentation of EBITDA, Adjusted EBITDA and Adjusted EBITDAR may not be comparable to similarly titles measures of other companies.
The following table presents a reconciliation of net income (loss) attributable to
Three Months Ended | |||||||
April 1, | March 31, | ||||||
(in thousands) | |||||||
Net loss attributable to | $ | (528) | $ | (232) | |||
Net income attributable to noncontrolling interest | 2 | 4,108 | |||||
Depreciation, amortization and accretion | 12,563 | 14,182 | |||||
Interest expense, net | 10,327 | 10,105 | |||||
Income tax (benefit) expense | (335) | 1,548 | |||||
EBITDA | 22,029 | 29,711 | |||||
Non-cash stock-based compensation | 1,172 | 1,559 | |||||
(Gain) loss on disposal of assets and impairment charge | (293) | 448 | |||||
Other miscellaneous expense | 42 | 78 | |||||
Adjusted EBITDA | 22,950 | 31,796 | |||||
Rent | 11,772 | 11,740 | |||||
Adjusted EBITDAR | $ | 34,722 | $ | 43,536 |
Contacts: | |||
(361) 884-2463, msullivan@susser.com | |||
Dennard ▪ | |||
(210) 408-6321, apearson@dennardlascar.com |
SOURCE
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