CrossAmerica Partners LP Reports First Quarter 2022 Results
- Reported First Quarter 2022 Operating Income of
$9.7 million and Net Income of$5.0 million compared to an Operating Loss of$0.9 million and a Net Loss of$4.0 million for the First Quarter 2021 - Generated First Quarter 2022 Adjusted EBITDA of
$32.0 million and Distributable Cash Flow of$24.2 million compared to First Quarter 2021 Adjusted EBITDA of$20.7 million and Distributable Cash Flow of$15.8 million - Reported First Quarter 2022 Gross Profit for the Wholesale Segment of
$46.9 million compared to$34.9 million of Gross Profit for the First Quarter 2021 - Distributed 320.2 million wholesale fuel gallons during the First Quarter 2022 at an average wholesale fuel margin per gallon of
10.2 cents compared to 291.8 million wholesale fuel gallons at an average wholesale fuel margin per gallon of7.3 cents during the First Quarter 2021, an increase of 10% in gallons distributed and an increase of 40% in margin per gallon - Reported First Quarter 2022 Gross Profit for the Retail Segment of
$32.7 million compared to$19.7 million of Gross Profit for the First Quarter 2021 - Retail Segment sold 116.0 million retail fuel gallons during the First Quarter 2022, including 39.2 million same store retail fuel gallons, a 4% increase compared to 37.5 million same store retail fuel gallons sold during the First Quarter 2021
- The Distribution Coverage Ratio was 1.22 times for the three months ended
March 31, 2022 and 1.39 times for the trailing twelve months endedMarch 31, 2022 - The Board of Directors of CrossAmerica’s
General Partner declared a quarterly distribution of$0.5250 per limited partner unit attributable to the First Quarter 2022
“CrossAmerica had it strongest first quarter in history in terms of overall EBITDA and Distributable Cash Flow," said
First Quarter Results
Consolidated Results
Key Operating Metrics | Q1 2022 | Q1 2021 |
Operating Income | ||
Adjusted EBITDA | ||
Distributable Cash Flow | ||
Distribution Coverage Ratio – |
1.22x | 0.79x |
Distribution Coverage Ratio - TTM ended |
1.39x | 1.23x |
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 | Q1 2022 | Q1 2021 | ||
Wholesale segment gross profit | ||||
Wholesale motor fuel gallons distributed | 320.2M | 291.8M | ||
Average wholesale gross profit per gallon | $ | 0.102 | $ | 0.073 |
During the first quarter 2022, CrossAmerica’s wholesale segment gross profit increased 35% compared to the first quarter 2021. This was driven by an increase in motor fuel gross profit resulting from a 10% increase in fuel volume distributed and a 40% increase in fuel margin per gallon. The main driver of the volume increase was the acquisition of assets from
Retail Segment
Key Operating Metrics | Q1 2022 | Q1 2021 | ||
Retail segment gross profit | ||||
Retail motor fuel gallons distributed | 116.0M | 78.2M | ||
Same store retail motor fuel gallons distributed | 39.2M | 37.5M | ||
Motor fuel gross profit | ||||
Same store merchandise sales excluding cigs. | ||||
Merchandise gross profit | ||||
Merchandise gross profit percentage | 26.8 | % | 27.4 | % |
For the first quarter 2022, the retail segment generated a 66% increase in gross profit compared to the first quarter 2021 due to increased retail fuel gallons sold, higher fuel margins and higher merchandise gross profit.
The retail segment sold 116.0 million of retail fuel gallons during the first quarter 2022, a 48% increase over first quarter 2021. This increased volume resulted from the increase in company operated sites as a result of the acquisition of assets from
CrossAmerica’s merchandise gross profit and other revenue increased due to the increase in company operated sites driven by the acquisition of assets from
Divestment and Acquisition Activity
In
During the first three months of 2022,
Liquidity and Capital Resources
As of
Preferred Membership Interests
As previously announced, on
The issuance and sale of the Cumulative Preferred Membership Interests were approved by the Board of Directors of CrossAmerica’s
Further details regarding the Preferred Membership Interests are provided in the Partnership’s First Quarter 2022 Form 10-Q filing.
Distributions
On
Conference Call
The Partnership will host a conference call on
CONSOLIDATED B
(Thousands of Dollars, except unit data)
2022 | 2021 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 11,149 | $ | 7,648 | ||||
Accounts receivable, net of allowances of |
34,392 | 33,331 | ||||||
Accounts receivable from related parties | 951 | 1,149 | ||||||
Inventory | 52,681 | 46,100 | ||||||
Assets held for sale | 4,175 | 4,907 | ||||||
Other current assets | 19,631 | 13,180 | ||||||
Total current assets | 122,979 | 106,315 | ||||||
Property and equipment, net | 757,232 | 755,454 | ||||||
Right-of-use assets, net | 165,605 | 169,333 | ||||||
Intangible assets, net | 105,506 | 114,187 | ||||||
99,409 | 100,464 | |||||||
Other assets | 30,055 | 24,389 | ||||||
Total assets | $ | 1,280,786 | $ | 1,270,142 | ||||
LIABILITIES AND EQUITY | ||||||||
Current liabilities: | ||||||||
Current portion of debt and finance lease obligations | $ | 2,774 | $ | 10,939 | ||||
Current portion of operating lease obligations | 34,793 | 34,832 | ||||||
Accounts payable | 80,010 | 67,173 | ||||||
Accounts payable to related parties | 7,915 | 7,679 | ||||||
Accrued expenses and other current liabilities | 20,967 | 20,682 | ||||||
Motor fuel and sales taxes payable | 22,197 | 22,585 | ||||||
Total current liabilities | 168,656 | 163,890 | ||||||
Debt and finance lease obligations, less current portion | 799,034 | 810,635 | ||||||
Operating lease obligations, less current portion | 136,481 | 140,149 | ||||||
Deferred tax liabilities, net | 10,296 | 12,341 | ||||||
Asset retirement obligations | 45,877 | 45,366 | ||||||
Other long-term liabilities | 45,633 | 41,203 | ||||||
Total liabilities | 1,205,977 | 1,213,584 | ||||||
Commitments and contingencies | ||||||||
Preferred membership interests | 24,500 | — | ||||||
Equity: | ||||||||
Common units—37,912,710 and 37,896,556 units issued and outstanding at |
38,960 | 53,528 | ||||||
Accumulated other comprehensive income | 11,349 | 3,030 | ||||||
Total equity | 50,309 | 56,558 | ||||||
Total liabilities and equity | $ | 1,280,786 | $ | 1,270,142 |
CONSOLIDATED STATEMENTS OF OPERATIONS
(Thousands of Dollars, Except Unit and Per Unit Amounts)
Three Months Ended |
||||||||
2022 | 2021 | |||||||
Operating revenues (a) | $ | 1,093,211 | $ | 657,284 | ||||
Costs of sales (b) | 1,014,381 | 602,416 | ||||||
Gross profit | 78,830 | 54,868 | ||||||
Operating expenses: | ||||||||
Operating expenses (c) | 42,109 | 29,403 | ||||||
General and administrative expenses | 6,483 | 7,650 | ||||||
Depreciation, amortization and accretion expense | 20,275 | 18,031 | ||||||
Total operating expenses | 68,867 | 55,084 | ||||||
Loss on dispositions and lease terminations, net | (244 | ) | (648 | ) | ||||
Operating income (loss) | 9,719 | (864 | ) | |||||
Other income, net | 130 | 88 | ||||||
Interest expense | (6,661 | ) | (3,497 | ) | ||||
Income (loss) before income taxes | 3,188 | (4,273 | ) | |||||
Income tax benefit | (1,859 | ) | (306 | ) | ||||
Net income (loss) available to limited partners | $ | 5,047 | $ | (3,967 | ) | |||
Basic and diluted earnings per common unit | $ | 0.13 | $ | (0.10 | ) | |||
Weighted-average limited partner units: | ||||||||
Basic common units | 37,900,146 | 37,869,259 | ||||||
Diluted common units | 37,959,441 | 37,891,130 | ||||||
Supplemental information: | ||||||||
(a) includes excise taxes of: | $ | 66,858 | $ | 43,705 | ||||
(a) includes rent income of: | 20,627 | 20,472 | ||||||
(b) excludes depreciation, amortization and accretion | ||||||||
(b) includes rent expense of: | 5,841 | 5,913 | ||||||
(c) includes rent expense of: | 3,708 | 3,196 |
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Thousands of Dollars)
Three Months Ended |
||||||||
2022 | 2021 | |||||||
Cash flows from operating activities: | ||||||||
Net income (loss) | $ | 5,047 | $ | (3,967 | ) | |||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
||||||||
Depreciation, amortization and accretion expense | 20,275 | 18,031 | ||||||
Amortization of deferred financing costs | 680 | 260 | ||||||
Credit loss expense | 45 | 31 | ||||||
Deferred income tax benefit | (2,045 | ) | (590 | ) | ||||
Equity-based employee and director compensation expense | 732 | 368 | ||||||
Loss on dispositions and lease terminations, net | 244 | 648 | ||||||
Changes in operating assets and liabilities, net of acquisitions | 3,410 | 2,887 | ||||||
Net cash provided by operating activities | 28,388 | 17,668 | ||||||
Cash flows from investing activities: | ||||||||
Principal payments received on notes receivable | 33 | 47 | ||||||
Proceeds from sale of assets | 1,460 | 931 | ||||||
Capital expenditures | (8,934 | ) | (10,621 | ) | ||||
Cash paid in connection with acquisitions, net of cash acquired | (1,885 | ) | — | |||||
Net cash used in investing activities | (9,326 | ) | (9,643 | ) | ||||
Cash flows from financing activities: | ||||||||
Borrowings under revolving credit facilities | 30,600 | 34,500 | ||||||
Repayments on revolving credit facilities | (26,575 | ) | (21,539 | ) | ||||
Borrowings under the Term Loan Facility | 1,120 | — | ||||||
Repayments on the Term Loan Facility | (24,600 | ) | — | |||||
Net proceeds from issuance of preferred membership interests | 24,500 | — | ||||||
Payments of finance lease obligations | (658 | ) | (633 | ) | ||||
Payments of deferred financing costs | (6 | ) | — | |||||
Distributions paid on distribution equivalent rights | (46 | ) | (31 | ) | ||||
Distributions paid on common units | (19,896 | ) | (19,881 | ) | ||||
Net cash used in financing activities | (15,561 | ) | (7,584 | ) | ||||
Net increase in cash and cash equivalents | 3,501 | 441 | ||||||
Cash and cash equivalents at beginning of period | 7,648 | 513 | ||||||
Cash and cash equivalents at end of period | $ | 11,149 | $ | 954 |
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 |
||||||||
2022 | 2021 | |||||||
Gross profit: | ||||||||
Motor fuel–third party | $ | 16,185 | $ | 15,523 | ||||
Motor fuel–intersegment and related party | 16,619 | 5,729 | ||||||
Motor fuel gross profit | 32,804 | 21,252 | ||||||
Rent gross profit | 12,339 | 12,493 | ||||||
Other revenues | 1,786 | 1,134 | ||||||
Total gross profit | 46,929 | 34,879 | ||||||
Operating expenses | (10,072 | ) | (9,974 | ) | ||||
Operating income | $ | 36,857 | $ | 24,905 | ||||
Motor fuel distribution sites (end of period): (a) | ||||||||
Motor fuel–third party | ||||||||
Independent dealers (b) | 656 | 683 | ||||||
Lessee dealers (c) | 642 | 648 | ||||||
Total motor fuel distribution–third party sites | 1,298 | 1,331 | ||||||
Motor fuel–intersegment and related party | ||||||||
Commission agents (Retail segment) (c) | 201 | 205 | ||||||
Company operated retail sites (Retail segment) (d) | 255 | 151 | ||||||
Total motor fuel distribution–intersegment and related party sites |
456 | 356 | ||||||
Motor fuel distribution sites (average during the period): | ||||||||
Motor fuel-third party distribution | 1,302 | 1,338 | ||||||
Motor fuel-intersegment and related party distribution | 453 | 356 | ||||||
Total motor fuel distribution sites | 1,755 | 1,694 | ||||||
Volume of gallons distributed | ||||||||
Third party | 203,915 | 213,708 | ||||||
Intersegment and related party | 116,329 | 78,072 | ||||||
Total volume of gallons distributed | 320,244 | 291,780 | ||||||
Wholesale margin per gallon | $ | 0.102 | $ | 0.073 |
(a) In addition, as of
(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
(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 106 company operated sites from the acquisition of assets from
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 |
||||||||
2022 | 2021 | |||||||
Gross profit: | ||||||||
Motor fuel | $ | 10,496 | $ | 5,433 | ||||
Merchandise | 16,682 | 10,364 | ||||||
Rent | 2,447 | 2,066 | ||||||
Other revenue | 3,088 | 1,859 | ||||||
Total gross profit | 32,713 | 19,722 | ||||||
Operating expenses | (32,037 | ) | (19,429 | ) | ||||
Operating income | $ | 676 | $ | 293 | ||||
Retail sites (end of period): | ||||||||
Commission agents (a) | 201 | 205 | ||||||
Company operated retail sites (b) | 255 | 151 | ||||||
Total system sites at the end of the period | 456 | 356 | ||||||
Total system operating statistics: | ||||||||
Average retail fuel sites during the period | 454 | 356 | ||||||
Volume of gallons sold | 116,040 | 78,235 | ||||||
Commission agents statistics: | ||||||||
Average retail fuel sites during the period | 200 | 205 | ||||||
Company operated retail site statistics: | ||||||||
Average retail fuel sites during the period | 254 | 151 | ||||||
Same store fuel volume (c) | 39,182 | 37,499 | ||||||
Same store merchandise sales (c) | $ | 34,447 | $ | 35,579 | ||||
Same store merchandise sales excluding cigarettes (c) | $ | 23,081 | $ | 22,953 | ||||
Merchandise gross profit percentage | 26.8 | % | 27.4 | % |
(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
(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
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.
The following table presents reconciliations of EBITDA, Adjusted EBITDA, and Distributable Cash Flow to net income, the most directly comparable
Three Months Ended |
||||||||
2022 | 2021 | |||||||
Net income (loss) available to limited partners | $ | 5,047 | $ | (3,967 | ) | |||
Interest expense | 6,661 | 3,497 | ||||||
Income tax benefit | (1,859 | ) | (306 | ) | ||||
Depreciation, amortization and accretion expense | 20,275 | 18,031 | ||||||
EBITDA | 30,124 | 17,255 | ||||||
Equity-based employee and director compensation expense | 732 | 368 | ||||||
Loss on dispositions and lease terminations, net | 244 | 648 | ||||||
Acquisition-related costs (a) | 868 | 2,394 | ||||||
Adjusted EBITDA | 31,968 | 20,665 | ||||||
Cash interest expense | (5,981 | ) | (3,236 | ) | ||||
Sustaining capital expenditures (b) | (1,554 | ) | (1,392 | ) | ||||
Current income tax expense | (185 | ) | (284 | ) | ||||
Distributable Cash Flow | $ | 24,248 | $ | 15,753 | ||||
Distributions paid | 19,896 | 19,881 | ||||||
Distribution Coverage Ratio | 1.22x | 0.79x |
(a) 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.
(b) Under the Partnership Agreement, sustaining capital expenditures are capital expenditures made to maintain our 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 our sites in conditions suitable to lease, such as parking lot or roof replacement/renovation, or to replace equipment required to operate the existing business.
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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
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Source: CrossAmerica Partners