Susser Holdings Reports Strong Fourth Quarter and Full Year 2012 Results
- Same-store merchandise sales up 5.8% in 4Q and 6.6% for FY
- Retail net merchandise margin of 34.1% in 4Q and 33.9% for FY
- Average retail fuel gallons per store up 3.1% in 4Q and 5.8% for FY
- A record 10 new Stripes® stores opened in 4Q and 25 for FY
Same-store merchandise sales increased 5.8 percent in the fourth quarter, versus growth of 5.0 percent in the prior-year period. Average retail gallons sold per store increased 3.1 percent from a year ago, compared with growth of 7.2 percent in the fourth quarter of 2011. Retail net merchandise margin was 34.1 percent in the fourth quarter, versus 33.4 percent a year earlier.
Retail segment fuel margin before credit card expense averaged
Adjusted EBITDA(1) was
Net income attributable to
Consolidated revenues for the fourth quarter totaled
"We achieved outstanding performance both for the fourth quarter and the full year 2012, with a record number of new Stripes® convenience store openings, solid year-over-year growth in same store merchandise sales and increased retail and wholesale motor fuel volumes," said
The wholesale segment added 13 new wholesale dealer and consignment sites during the latest quarter and discontinued six for a total of 579 contracted wholesale sites as of December 30. The Company expects to add 25 to 40 new wholesale branded dealers and consignment sites this year.
Fourth Quarter Financial and Operating Highlights
Merchandise - Merchandise sales totaled
Net merchandise margin as a percentage of sales was 34.1 percent, compared with 33.4 percent in the fourth quarter of 2011. Merchandise gross profit was
Retail Fuel - Retail fuel volumes increased 5.6 percent compared with a year ago to 211.3 million gallons. Average gallons sold per store per week increased 3.1 percent year-over-year to approximately 29,800 gallons, following a 7.2 percent year-over-year increase in the fourth quarter of 2011. 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 to third parties (all gallons except those distributed to Susser's retail stores) increased 4.3 percent from a year ago to 149.9 million gallons. Wholesale fuel revenues increased 4.6 percent from the prior-year quarter to
Wholesale fuel gross margin from third parties was
Full Year 2012 Financial and Operating Highlights
Revenues totaled
Fiscal 2012 retail fuel margin — after deducting the
Adjusted EBITDA(1) for 2012 was
2013 Guidance
The Company is providing initial 2013 full-year guidance as follows:
FY 2013 Guidance | FY 2012 Actual | |
Merchandise Same-Store Sales Growth | 3%-5% | 6.6% |
Merchandise Margin, Net of Shortages | 33.25%-34.25% | 33.9% |
Retail Average Per-Store Gallons Growth | 1%-4% | 5.8% |
Fuel Gross Profit Margins (cents / gallon): | ||
Margin on retail gallons sold (a) | 15-18 | 21.8 |
Margin on wholesale gallons sold to third-parties (b) | 4-6 | 6.2 |
Margin on wholesale gallons sold to retail segment (c) | approx 3 | |
Rent Expense (millions) | ||
Depreciation, Amortization & Accretion Expense (millions) | ||
Interest Expense (millions) (d) | ||
New Retail Stores (e) | 29-35 | 25 |
New Wholesale Dealer Sites (e) | 25-40 | 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 3rd 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 inception of SUSP operations. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(c) | Wholesale segment margin to Stripes retail stores reflects the gross profit mark-up charged by SUSP effective | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(d) | Does not reflect any potential refinancing of the | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(e) | Numbers for both years do not reflect existing retail or wholesale store closures, which are typically lower volume locations than new sites. For 2010, 2011 and 2012, retail store closures were 13, 4 and 7 respectively, and we discontinued 18, 8, and 25 contracted wholesale sites, respectively. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(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 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(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 |
Fourth Quarter Earnings Conference Call
Susser's management team will hold a conference call today at 10:00 a.m. ET (9:00 a.m. CT) to discuss fourth quarter 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
Consolidated Statements of Operations | |||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||
January 1, | December 30, | January 1, | December 30, | ||||||||||
(dollars in thousands, except shares and per share amounts) | |||||||||||||
Revenues: | |||||||||||||
Merchandise sales | $ | 218,989 | $ | 240,838 | $ | 881,911 | $ | 976,452 | |||||
Motor fuel sales | 1,064,475 | 1,140,113 | 4,264,422 | 4,788,050 | |||||||||
Other income | 11,669 | 15,466 | 47,835 | 53,625 | |||||||||
Total revenues | 1,295,133 | 1,396,417 | 5,194,168 | 5,818,127 | |||||||||
Cost of sales: | |||||||||||||
Merchandise | 145,884 | 158,654 | 584,310 | 645,500 | |||||||||
Motor fuel | 1,019,890 | 1,079,158 | 4,050,859 | 4,556,410 | |||||||||
Other | 437 | 2,171 | 2,013 | 4,823 | |||||||||
Total cost of sales | 1,166,211 | 1,239,983 | 4,637,182 | 5,206,733 | |||||||||
Gross profit | 128,922 | 156,434 | 556,986 | 611,394 | |||||||||
Operating expenses: | |||||||||||||
Personnel | 40,107 | 46,135 | 160,446 | 180,042 | |||||||||
General and administrative | 10,669 | 12,752 | 43,273 | 48,796 | |||||||||
Other operating | 35,532 | 40,320 | 144,099 | 157,589 | |||||||||
Rent | 11,557 | 11,739 | 45,738 | 46,407 | |||||||||
Loss (gain) on disposal of assets and impairment charge | (401) | 205 | 1,220 | 694 | |||||||||
Depreciation, amortization and accretion | 12,513 | 13,135 | 47,320 | 51,434 | |||||||||
Total operating expenses | 109,977 | 124,286 | 442,096 | 484,962 | |||||||||
Income from operations | 18,945 | 32,148 | 114,890 | 126,432 | |||||||||
Other income (expense): | |||||||||||||
Interest expense, net | (10,335) | (9,939) | (40,726) | (41,019) | |||||||||
Other miscellaneous | (125) | (141) | (346) | (471) | |||||||||
Total other expense, net | (10,460) | (10,080) | (41,072) | (41,490) | |||||||||
Income before income taxes | 8,485 | 22,068 | 73,818 | 84,942 | |||||||||
Income tax expense | (3,176) | (7,196) | (26,347) | (33,645) | |||||||||
Net income | 5,309 | 14,872 | 47,471 | 51,297 | |||||||||
Less: Net income attributable to noncontrolling interest | 10 | 4,283 | 14 | 4,572 | |||||||||
Net income attributable to | $ | 5,299 | $ | 10,589 | $ | 47,457 | $ | 46,725 | |||||
Net income per share attributable to | |||||||||||||
Basic | $ | 0.29 | $ | 0.51 | $ | 2.74 | $ | 2.25 | |||||
Diluted | $ | 0.29 | $ | 0.49 | $ | 2.68 | $ | 2.19 | |||||
Weighted average shares outstanding: | |||||||||||||
Basic | 18,036,593 | 20,903,840 | 17,289,337 | 20,727,985 | |||||||||
Diluted | 18,543,189 | 21,404,906 | 17,702,641 | 21,314,738 |
Consolidated Balance Sheets | |||||||
January 1, | December 30, | ||||||
(in thousands except shares) | |||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 120,564 | $ | 286,232 | |||
Accounts receivable, net of allowance for doubtful accounts of | 75,275 | 105,874 | |||||
Inventories, net | 98,723 | 115,048 | |||||
Other current assets | 19,620 | 8,271 | |||||
Total current assets | 314,182 | 515,425 | |||||
Property and equipment, net | 474,243 | 602,151 | |||||
Other assets: | |||||||
Marketable securities | — | 148,264 | |||||
Goodwill | 244,398 | 244,398 | |||||
Intangible assets, net | 48,268 | 45,764 | |||||
Other noncurrent assets | 14,879 | 15,381 | |||||
Total assets | $ | 1,095,970 | $ | 1,571,383 | |||
Liabilities and shareholders' equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 143,088 | $ | 171,545 | |||
Accrued expenses and other current liabilities | 49,564 | 61,208 | |||||
Current maturities of long-term debt | 1,492 | 36 | |||||
Total current liabilities | 194,144 | 232,789 | |||||
Revolving line of credit | — | 35,590 | |||||
Long-term debt | 449,837 | 571,649 | |||||
Deferred gain, long-term portion | 30,888 | 28,548 | |||||
Deferred tax liability, long-term portion | 68,216 | 85,211 | |||||
Other noncurrent liabilities | 17,950 | 16,897 | |||||
Total liabilities | 761,035 | 970,684 | |||||
Commitments and contingencies: | |||||||
Shareholders' equity: | |||||||
Common stock, | 210 | 212 | |||||
Additional paid-in capital | 269,368 | 276,430 | |||||
Treasury stock, common shares, at cost; 559,651 as of January 1, 2012; and 390,201 as of | (9,629) | (8,068) | |||||
Retained earnings | 74,199 | 120,612 | |||||
Total | 334,148 | 389,186 | |||||
Noncontrolling interest | 787 | 211,513 | |||||
Total shareholders' equity | 334,935 | 600,699 | |||||
Total liabilities and shareholders' equity | $ | 1,095,970 | $ | 1,571,383 |
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 | Twelve Months Ended | |||||||||||
January 1, | December 30, | January 1, | December 30, | |||||||||
(dollars in thousands, except per gallon items) | ||||||||||||
Revenue: | ||||||||||||
Merchandise sales | $ | 218,989 | $ | 240,838 | $ | 881,911 | $ | 976,452 | ||||
Motor fuel — retail | 660,964 | 718,112 | 2,715,279 | 2,995,840 | ||||||||
Motor fuel — wholesale to third parties | 403,512 | 422,000 | 1,549,143 | 1,792,210 | ||||||||
Other | 11,669 | 15,466 | 47,835 | 53,625 | ||||||||
Total revenue | $ | 1,295,134 | $ | 1,396,416 | $ | 5,194,168 | $ | 5,818,127 | ||||
Gross Profit: | ||||||||||||
Merchandise | $ | 73,105 | $ | 82,184 | $ | 297,601 | $ | 330,952 | ||||
Motor fuel — retail (1) | 37,183 | 44,627 | 182,521 | 186,041 | ||||||||
Motor fuel — wholesale to third parties (2) | 7,402 | 9,490 | 31,042 | 37,091 | ||||||||
Motor fuel — wholesale to Stripes (2) | — | 6,358 | — | 6,472 | ||||||||
Other, including intercompany eliminations | 11,232 | 13,775 | 45,822 | 50,838 | ||||||||
Total gross profit | $ | 128,922 | $ | 156,434 | $ | 556,986 | $ | 611,394 | ||||
Adjusted EBITDA (3): | ||||||||||||
Retail | $ | 27,165 | $ | 33,239 | $ | 148,549 | $ | 154,205 | ||||
Wholesale | 5,856 | 14,021 | 24,942 | 35,833 | ||||||||
Other | (1,391) | (1,772) | (6,473) | (7,141) | ||||||||
Total Adjusted EBITDA | $ | 31,630 | $ | 45,488 | $ | 167,018 | $ | 182,897 | ||||
Capital expenditures, net (4) | 35,929 | 65,280 | 122,181 | 177,881 | ||||||||
Retail merchandise margin | 33.4% | 34.1% | 33.7% | 33.9% | ||||||||
Merchandise same store sales growth | 5.0% | 5.8% | 6.0% | 6.6% | ||||||||
Average per retail store per week: | ||||||||||||
Merchandise sales | $ | 31.4 | $ | 33.6 | $ | 31.9 | $ | 34.5 | ||||
Motor fuel gallons sold | 28.9 | 29.8 | 28.7 | 30.3 | ||||||||
Motor fuel gallons sold: | ||||||||||||
Retail | 200,092 | 211,258 | 785,582 | 853,163 | ||||||||
Wholesale - third party | 143,805 | 149,935 | 522,832 | 594,909 | ||||||||
Average retail price of motor fuel per gallon | $ | 3.30 | $ | 3.40 | $ | 3.46 | $ | 3.51 | ||||
Motor fuel gross profit cents per gallon: | ||||||||||||
Retail (1) | 18.6¢ | 21.1¢ | 23.2¢ | 21.8¢ | ||||||||
Wholesale - third party (2) | 5.1¢ | 6.3¢ | 5.9¢ | 6.2¢ | ||||||||
Retail credit card cents per gallon | 5.2¢ | 5.5¢ | 5.5¢ | 5.5¢ | ||||||||
(1) | Effective |
(2) | The wholesale margin from third parties excludes gross profit from the retail segment. Wholesale margin to Stripes reflects the mark-up of approximately |
(3) | See following Reconciliation of Non-GAAP Measures to GAAP Measures. |
(4) | Net capital expenditures include acquisitions and purchase of intangible assets, less proceeds from sale leaseback transactions and asset dispositions. |
Reconciliations of Non-GAAP Measures to GAAP Measures
We define EBITDA as net income (loss) attributable to
We believe that 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.
The addition of net income attributable to noncontrolling interests means that our presentation of EBITDA, Adjusted EBITDA and Adjusted EBITDAR includes 100% of the operations of SUSP, even though our economic interest in SUSP, following its
EBITDA, Adjusted EBITDA and Adjusted EBITDAR are not recognized terms under GAAP and do not purport to be alternatives to net income 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 attributable to
Three Months Ended | Twelve Months Ended | ||||||||||
January 1, 2012 | December 30, 2012 | ||||||||||
Net income attributable to | $ | 5,299 | $ | 10,589 | $ | 47,457 | $ | 46,725 | |||
Net income attributable to noncontrolling interest | 10 | 4,283 | 14 | 4,572 | |||||||
Depreciation, amortization and accretion | 12,513 | 13,135 | 47,320 | 51,434 | |||||||
Interest expense, net | 10,335 | 9,939 | 40,726 | 41,019 | |||||||
Income tax expense | 3,176 | 7,196 | 26,347 | 33,645 | |||||||
EBITDA | $ | 31,333 | $ | 45,142 | $ | 161,864 | $ | 177,395 | |||
Non-cash stock-based compensation | 573 | — | 3,588 | 4,337 | |||||||
Loss (gain) on disposal of assets and impairment charge | (401) | 205 | 1,220 | 694 | |||||||
Other miscellaneous expense | 125 | 141 | 346 | 471 | |||||||
Adjusted EBITDA | 31,630 | 45,488 | 167,018 | 182,897 | |||||||
Rent | 11,557 | 11,739 | 45,738 | 46,407 | |||||||
Adjusted EBITDAR | $ | 43,187 | $ | 57,227 | $ | 212,756 | $ | 229,304 |
Contacts: | ||
(361) 693-3743, msullivan@susser.com | ||
(210) 408-6321, apearson@dennardlascar.com |
SOURCE
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