Susser Holdings Reports Third Quarter 2013
Results
11/6/2013
CORPUS CHRISTI, Texas, Nov. 6, 2013 /PRNewswire/ -- Susser Holdings Corporation (NYSE: SUSS) today
reported financial and operating results for the three months ended September 29, 2013. Results detailed below
include the results of Susser Petroleum Partners LP (NYSE: SUSP) unless otherwise noted.
Same-store merchandise sales increased 3.4 percent in the third quarter of 2013, compared with growth of 5.8
percent in the third quarter of last year. Average retail gallons sold per store increased 5.6 percent versus the
prior-year period, compared with growth of 6.6 percent in the third quarter of last year. Retail net merchandise
margin was 33.8 percent in both the latest quarter and the third quarter a year ago.
Retail fuel margin before credit card expense averaged 18.3 cents per gallon, versus 20.1 cents per gallon
reported in the third quarter of 2012. The retail fuel margin for the most recent quarter has been reduced by a 3-
cent-per-gallon mark-up charged by Susser Petroleum Partners beginning September 25, 2012, following its
initial public offering. The wholesale segment previously made no PROFIT on motor fuel sales to the retail
segment but now records a mark-up on these gallons. Had the 3-cent-per-gallon margin been charged in prior
years, the comparable third quarter 2012 retail margin would have been 17.1 cents per gallon and the previous
five years' comparable third-quarter average margin would have been 19.5 cents per gallon.
Adjusted EBITDA
(1)
totaled $49.4 million, up 18.8 percent from a year ago. Consolidated gross PROFIT was
$172.2 million, an increase of 13.1 percent from the third quarter of last year. These results primarily reflect
higher merchandise sales and fuel volumes sold.
Excluding the impact of a $3.5 million non-cash deferred tax charge related to the acquisition of Gainesville
Fuel, Inc. and its subsequent contribution to SUSP, adjusted net income attributable to Susser Holdings was
$16.4 million, or $0.76 per diluted share. On a reported basis, including the impact of these charges, net
income attributable to Susser Holdings was $12.9 million, or $0.59 per diluted share. By comparison, in the
third quarter of 2012, adjusted net income attributable to Susser Holdings, excluding these charges, was $10.5
million, or $0.49 per diluted share. In the prior-year period the Company recorded a non-cash deferred tax
expense of $3.6 million relating to the contribution of $10.3 million of goodwill from Susser Holdings to
Susser Petroleum Partners in connection with the IPO. Including the impact of this charge, reported net income
was $6.8 million, or $0.32 per diluted share for the third quarter of last year.
Third quarter 2013 consolidated revenues totaled nearly $1.6 billion, an increase of 6.6 percent from a year
ago. This increase was the result of a 9.8 percent increase in merchandise sales, a 7.6 percent increase in retail
fuel revenues and a 3.1 percent increase in wholesale fuel revenues from third parties. The positive revenue
impact of higher fuel volumes sold in both segments was partially offset by slightly lower per-gallon selling
prices.
"Our Stripes stores continued to perform well in the third quarter, which is seasonally one of our two best
quarters," said Sam L. Susser , Chairman and Chief Executive Officer. "We delivered solid, positive same-
store merchandise sales growth, and strong gallon growth from our retail segment. Economic activity and job
creation in our key Texas markets continue to provide our Company tailwinds, and we remain bullish on the
Page 1
growth opportunities to expand the Stripes brand next year and beyond.
"During the third quarter we also continued to grow our wholesale business with organic growth and the
acquisition of Gainesville Fuel, a fuel distribution business that is expected to benefit both Susser Petroleum
Partners' and Susser Holdings' financial results," he added.
New Convenience Store and Wholesale Business Update
Susser Holdings opened 10 new large-format Stripes
®
convenience stores during the third quarter and closed
one smaller store. Through the first nine months of 2013, the Company has opened a total of 20 new stores and
closed three. One additional store has opened in the fourth quarter, one was converted to dealer operation, and
ten more are currently under construction. The Company expects to open a total of 28 to 30 Stripes
convenience stores this year and continues to acquire additional land for future store development. The
Company currently operates a total of 576 Stripes stores, of which 371 include a restaurant concept, primarily
Laredo Taco Company
®
.
Nine new contracted sites were added in the wholesale segment in the third quarter, and five sites were
discontinued, for a total of 587 contracted branded dealer sites as of September 29, consisting of 97
consignment locations and 490 other independent branded dealer contracts. Year-to-date, the Company has
added 24 new contracted sites to the wholesale segment and discontinued 16. Susser currently expects to add a
total of 32 to 40 new wholesale branded dealers and consignment sites and discontinue supply to 20 to 24 sites
for the full year.
As previously reported, in September Susser Holdings acquired Gainesville Fuel Inc., which operates a
wholesale fuel and lubricants distribution business selling approximately 60 million gallons of diesel annually
to oil and gas producers in northern Texas and southern Oklahoma. Susser Holdings contributed this business
to Susser Petroleum Partners, SUSP assumed certain debt and other liabilities and issued $2.0 million worth of
SUSP common units to SUSS. In connection with this transaction, SUSS recorded a non-cash deferred tax
charge of $3.5 million related to the contribution of goodwill from a taxable entity (SUSS) to a non-taxable
entity (SUSP).
Financing Update
Susser Holdings and Susser Petroleum Partners completed sale leaseback transactions for 10 new Stripes stores
during the third quarter at a total cost of $39.5 million, bringing to 30 the total number of new-build store sale
leasebacks since the partnership's initial public offering at a cumulative cost of $121.0 million, including final
cost true-ups. Total cumulative growth CAPITAL spending for SUSP since the IPO is approximately $135
million.
Third Quarter Financial and Operating Highlights
Merchandise - Merchandise sales totaled $281.6 million in the third quarter, an increase of $25.2 million, or
9.8 percent, from a year ago. Approximately $8.7 million of the increase came from stores that have been open
a year or more, with the balance from 30 stores that were opened during the last four quarters. Same-store
merchandise sales increased 3.4 percent, compared with an increase of 5.8 percent in the third quarter of 2012.
Sales of food service, beer, packaged drinks and snacks drove the majority of the growth.
Net merchandise margin as a percentage of sales was 33.8 percent, flat versus a year ago. Merchandise gross
Page 2
profit was $95.2 million, up 9.8 percent from the year-ago third quarter. Gross profit growth was led by same-
store dollar increases in food service and packaged drinks.
Retail Fuel - Retail fuel volumes increased 9.6 percent year-over-year to 239.4 million gallons. Average
gallons sold per store were 5.6 percent higher than a year ago, at approximately 32,700 gallons per week.
Retail fuel revenues totaled $825.4 million, an increase of 7.6 percent compared with the third quarter of 2012,
reflecting the increase in gallons sold, partly offset by a 6-cent-per-gallon decline in the average selling price of
motor fuel versus a year earlier.
Retail fuel gross margin averaged 18.3 cents per gallon, compared with 20.1 cents per gallon a year ago. (The
third quarter 2013 retail fuel margin was reduced by the 3-cent-per-gallon gross profit margin to SUSP that was
implemented September 25, 2012.) After deducting credit card expense, the net fuel margin was 12.6 cents per
gallon for the latest quarter, versus a net 14.5 cents per gallon reported a year earlier. Retail fuel gross profit
was $43.7 million, down 0.4 percent year-over-year due to the decline in margin per gallon, partly offset by
higher volumes sold. Adjusting for the SUSP mark-up, retail fuel gross profit increased 16.7 percent year-over-
year on a comparable basis.
Wholesale Fuel - Susser's wholesale segment includes all of SUSP's operations as well as the consignment
sales and transportation business that were not contributed to SUSP. Wholesale fuel volumes sold to third
parties - which is all gallons except those distributed to Susser's retail stores - were up 8.2 percent from the
third quarter of last year to 162.1 million gallons. Wholesale fuel revenues declined 3.1 percent from a year ago
to $478.9 million. This revenue decline is the result of a 15-cent-per-gallon price reduction versus a year ago,
partly offset by the increase in volumes sold.
Wholesale fuel gross margin from third parties was 7.8 cents per gallon, compared with 6.1 cents in the third
quarter of last year. Wholesale fuel gross profit increased by $10.4 million from the prior-year period - or
108.3 percent - to $19.9 million. This increase was primarily the result of the $7.2 million gross profit
attributable to the previously discussed 3-cent-per-gallon mark-up charged to the retail segment, as well as the
increase in gallons sold.
Year-to-Date Financial and Operating Highlights
For the nine months ended September 29, 2013, Susser's same-store merchandise sales grew 3.3 percent.
Revenues increased by 4.9 percent to $4.6 billion, driven by increases in merchandise sales and retail and
wholesale fuel revenues. Merchandise sales totaled $803.8 million, up 9.3 percent from the year-earlier period.
Merchandise margin was 33.7 percent, compared with 33.8 percent for the first nine months of 2012.
Retail fuel margin was 17.7 cents per gallon year-to-date, compared with 22.0 cents for the same period in
2012. Last year's margin was not reduced by the 3-cent-per-gallon profit margin to SUSP prior to September
25, 2012. On a comparable basis adjusting for this mark-up, retail fuel margin for the 2013 nine month period
was 1.3 cents per gallon lower than the same period in 2012. After deducting credit card expense, net fuel
margin was 12.1 cents per gallon, compared with 16.4 cents per gallon reported in the first nine months of
2012. Wholesale fuel margin was 6.8 cents per gallon, compared with 6.1 cents per gallon in the prior-year
period.
Adjusted EBITDA
(1)
for the first three quarters totaled $131.7 million, down 4.1 percent from the same period
in 2012. Gross profit was $487.3 million, up 7.1 percent due to higher gross profit from merchandise and
wholesale fuel, partly offset by lower retail fuel gross profit. Excluding the impact of the non-recurring interest
Page 3
charge related to the refinance and the non-cash deferred tax charge in the second and third quarters of 2013,
year-to-date adjusted net income was $28.6 million, or $1.32 per diluted share. Excluding the impact of non-
cash deferred tax charge in the third quarter of 2012, adjusted net income was $39.8 million, or $1.87 per
diluted share. Reported net income for the first nine months of 2013, including the impact of these charges was
$8.4 million, or $0.38 per diluted share, versus net income of $36.1 million, or $1.70 per diluted share, for the
first nine months of last year. A reconciliation of reported to adjusted earnings is provided later in this news
release.
2013 Guidance
The Company is adjusting its 2013 full-year guidance as follows:
New FY 2013
Guidance
Previous FY 2013
Guidance
9 Months 2013
Actual
FY 2012
Actual
Merchandise Same-Store Sales Growth 3.0%-4.0% 2.5%-4.5% 3.3% 6.6%
Merchandise Margin, Net of Shortages 33.5%-34.0% 33.25%-34.25% 33.7% 33.9%
Retail Average Per-Store Gallons Growth 4.0%-5.5% 2.0%-5.0% 5.1% 5.8%
Fuel Gross Profit Margins (cents / gallon):
Margin on Retail Gallons Sold (a) 16.0-18.0 15.0-18.0 17.7 21.8
Margin on Wholesale Gallons Sold to Third Parties (b) 6.0-7.0 4.5-6.5 6.8 6.2
Margin on Wholesale Gallons Sold to Retail Segment (c) approx 3 approx 3 3.0
Rent Expense (millions) (f) $46-$48 $46-$48 $35.7 $46.4
Depreciation, Amortization & Accretion Expense (millions)$58-$64 $58-$64 $44.8 $51.4
Interest Expense (millions) (d) $21-$24 $24-$27 $19.0 $41.0
New Retail Stores (e) 28-30 28-30 20 25
New Wholesale Dealer Sites (e) 32-40 28-40 24 39
Gross Capital Spending (millions) (f) $220-$235 $195-$215 $167.3 $179
Net Capital Spending (millions) (f) $220-$235 $195-$210 $167.2 $178
(a)
We report retail fuel margin before deducting credit card costs, which were approximately 5.6 cents per gallon both for the third quarter and the first nine
months of 2013. The Company has provided quarterly fuel margin history on its website. The average retail selling price per gallon of fuel was $3.45 both
for the third quarter and the first nine months of fiscal 2013. 2013 retail fuel margin guidance reflects reduction of approximately 3 cents per gallon for gross
profit mark-up now charged by SUSP, which reduced retail gross profit for the first nine months of 2013 by approximately $20.8 million. The mark-up
charged to the retail segment is included in the wholesale segment gross profit.
(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 it was prior to the SUSP initial public offering.
(c) Wholesale segment margin to Stripes retail stores reflects the mark-up charged by SUSP effective September 25, 2012.
(d)
Reflects the impact of refinancing the $425 million 8.5% senior unsecured notes effective May 15, 2013. Excludes approximately $26 million pre-tax
charges related to the refinancing. Beginning on May 15, 2013 the borrowing rate under the Company's primary debt facilities fell from 8.5 percent to LIBOR
plus 200 basis points, or approximately 2.2 percent as of September 29, 2013.
(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 nine
months of 2013, the company closed three retail stores and discontinued 16 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 "Key Operating Metrics" 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 Susser Holdings Corporation for the periods presented.
Third Quarter Earnings Conference Call
Page 4
Susser's management team will hold a conference call today at 10:00 a.m. ET (9:00 a.m. CT) to discuss third
quarter 2013 results for both Susser Holdings Corporation and Susser Petroleum Partners LP. To participate in
the call, dial 480-629-9771 10 minutes early and ask for the Susser conference call. The call will also be
accessible live and for later replay via webcast in the Investor Relations section of Susser Holdings' web site at
www.susser.com and Susser Petroleum Partners' web site at www.susserpetroleumpartners.com under Events
and Presentations. A telephone replay will be available through November 13 by calling 303-590-3030 and
using the access code 4645491#.
Susser Holdings Corporation is a third-generation family led business based in Corpus Christi, Texas that
operates over 575 convenience stores in Texas, New Mexico and Oklahoma under the Stripes® banner.
Restaurant service is available in approximately 370 of its stores, primarily under the proprietary Laredo Taco
Company® brand. Susser Holdings also is majority owner and owns the general partner of Susser Petroleum
Partners LP, which distributes over 1.5 billion gallons of motor fuel annually to Stripes® stores,
independently operated consignment locations, convenience stores and retail fuel outlets operated by
independent operators and other commercial customers in Texas, New Mexico, Oklahoma, and Louisiana.
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 Mexico; impairment of goodwill or indefinite lived assets; and other unforeseen
factors.
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.
Page 5
Contacts:Susser Holdings Corporation
Mary Sullivan, Chief Financial Officer
(361) 884-2463, msullivan@susser.com
Dennard n Lascar Associates, LLC
Anne Pearson, Senior Vice President
(210) 408-6321, apearson@dennardlascar.com
Financial statements follow
Susser Holdings Corporation
Consolidated Statements of Operations
Unaudited
Three Months Ended Nine Months Ended
September 30,
2012
September 29,
2013
September 30,
2012
September 29,
2013
(dollars in thousands, except share and per share amounts)
Revenues:
Merchandise sales $ 256,419 $ 281,610 $ 735,614 $ 803,815
Motor fuel sales 1,231,873 1,304,383 3,647,937 3,795,186
Other income 12,524 13,550 38,159 40,779
Total revenues 1,500,816 1,599,543 4,421,710 4,639,780
Cost of sales:
Merchandise 169,738 186,415 486,846 532,656
Motor fuel 1,177,649 1,239,873 3,477,252 3,616,926
Other 1,215 1,036 2,652 2,931
Total cost of sales 1,348,602 1,427,324 3,966,750 4,152,513
Gross profit 152,214 172,219 454,960 487,267
Operating expenses:
Personnel 47,178 54,042 133,907 155,664
General and administrative 12,138 14,442 36,044 39,752
Other operating 41,189 45,068 117,269 129,771
Rent 11,579 11,762 34,668 35,666
Loss on disposal of assets and impairment charge 455 380 489 1,507
Depreciation, amortization and accretion 13,184 15,482 38,299 44,808
Total operating expenses 125,723 141,176 360,676 407,168
Income from operations 26,491 31,043 94,284 80,099
Other income (expense):
Interest expense, net (10,653) (2,380) (31,080) (45,152)
Other miscellaneous (125) (221) (330) (460)
Total other expense, net (10,778) (2,601) (31,410) (45,612)
Income before income taxes 15,713 28,442 62,874 34,487
Income tax expense (8,579) (10,756) (26,449) (12,351)
Net income and comprehensive income 7,134 17,686 36,425 22,136
Less: Net income attributable to noncontrolling interest 287 4,789 289 13,731
Net income attributable to Susser Holdings Corporation $ 6,847 $ 12,897 $ 36,136 $ 8,405
Net income per share attributable to Susser Holdings Corporation:
Basic $ 0.33 $ 0.61 $ 1.75 $ 0.40
Diluted $ 0.32 $ 0.59 $ 1.70 $ 0.38
Weighted average shares outstanding:
Basic 20,725,514 21,175,517 20,669,366 21,127,339
Diluted 21,343,040 21,633,375 21,240,363 21,638,800
Susser Holdings Corporation
Consolidated Balance Sheets
December 30, September 29,
Page 6
2012 2013
unaudited
(in thousands)
Assets
Current assets:
Cash and cash equivalents $ 286,232 $ 34,664
Accounts receivable, net of allowance for doubtful accounts of $707 at December 30, 2012 and $582 at September 29, 2013 105,874 142,280
Inventories, net 115,048 125,421
Other current assets 6,678 10,082
Total current assets 513,832 312,447
Property and equipment, net 602,151 704,729
Other assets:
Marketable securities 148,264 37,936
Goodwill 244,398 253,894
Intangible assets, net 45,764 41,829
Other noncurrent assets 15,381 16,660
Total assets $ 1,569,790 $ 1,367,495
Liabilities and shareholders' equity
Current liabilities:
Accounts payable $ 171,545 $ 193,160
Accrued expenses and other current liabilities 63,834 63,842
Current maturities of long-term debt 36 538
Total current liabilities 235,415 257,540
Revolving line of credit 35,590 327,800
Long-term debt 571,649 41,882
Deferred tax liability, long-term portion 80,992 80,525
Other noncurrent liabilities 45,445 42,956
Total liabilities 969,091 750,703
Commitments and contingencies:
Shareholders' equity:
Susser Holdings Corporation shareholders' equity:
Common stock, $.01 par value; 125,000,000 shares authorized; 21,619,700 issued and 21,229,499 outstanding at December 30,
2012; 21,631,069 issued and 21,374,546 outstanding as of September 29, 2013
212 213
Additional paid-in capital 276,430 282,432
Treasury stock, common shares, at cost; 390,201 as of December 30, 2012; 256,523 as of September 29, 2013 (8,068) (5,608)
Retained earnings 120,924 129,329
Total Susser Holdings Corporation shareholders' equity 389,498 406,366
Noncontrolling interest 211,201 210,426
Total shareholders' equity 600,699 616,792
Total liabilities and shareholders' equity $ 1,569,790 $ 1,367,495
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 Nine Months Ended
September 30,
2012
September 29,
2013
September 30,
2012
September 29,
2013
(dollars and gallons in thousands, except motor fuel pricing and gross profit per gallon)
Revenue:
Merchandise sales $ 256,419 $ 281,610 $ 735,614 $ 803,815
Motor fuel—retail 767,208 825,440 2,277,728 2,414,269
Motor fuel—wholesale 464,665 478,943 1,370,209 1,380,917
Other 12,524 13,550 38,159 40,779
Total revenue $ 1,500,816 $ 1,599,543 $ 4,421,710 $ 4,639,780
Gross profit:
Merchandise $ 86,681 $ 95,195 $ 248,769 $ 271,159
Motor fuel—retail (2) 43,887 43,708 141,413 123,706
Motor fuel—wholesale to third parties (3) 9,172 12,724 27,311 31,547
Motor fuel—wholesale to Stripes (3) 404 7,225 404 20,648
Other, including intercompany eliminations 12,070 13,367 37,063 40,207
Total gross profit $ 152,214 $ 172,219 $ 454,960 $ 487,267
Adjusted EBITDA (4):
Retail $ 35,316 $ 34,335 $ 120,966 $ 93,972
Page 7
Wholesale 8,289 18,394 21,811 46,090
Other (2,013) (3,324) (5,368) (8,330)
Total Adjusted EBITDA $ 41,592 $ 49,405 $ 137,409 $ 131,732
Retail merchandise margin 33.8 % 33.8 % 33.8 % 33.7 %
Merchandise same-store sales growth (1) 5.8 % 3.4 % 6.8 % 3.3 %
Average per retail store per week:
Merchandise sales $ 36.0 $ 38.1 $ 34.7 $ 36.6
Motor fuel gallons sold 30.9 32.7 30.5 32.1
Motor fuel gallons sold:
Retail 218,507 239,387 641,905 698,939
Wholesale - third party 149,828 162,117 444,974 464,934
Average retail price of motor fuel per gallon$ 3.51 $ 3.45 $ 3.55 $ 3.45
Motor fuel gross profit (cents per gallon):
Retail (2) 20.1 ¢ 18.3 ¢ 22.0 ¢ 17.7 ¢
Wholesale - third party (3) 6.1 ¢ 7.8 ¢ 6.1 ¢ 6.8 ¢
Retail credit card expense (cents per gallon) 5.6 ¢ 5.6 ¢ 5.6 ¢ 5.6 ¢
(1) We include a store in the same store sales base in its thirteenth full month of our operation.
(2)
Effective September 25, 2012, the retail fuel margin reflects a reduction of approximately three cents per gallon as SUSP began charging a profit mark-up on
gallons sold to our retail segment. Prior to this date, no gross profit mark-up was charged by the wholesale segment to the retail segment. Had this profit
mark-up to SUSP been in effect for all of 2012, the average retail margin for the three and nine months ended September 30, 2012, respectively would have
been reported as 17.1 and 19.0 cents per gallon.
(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 three cents per gallon beginning September 25, 2012. Prior to this date, no profit margin was recognized in the wholesale segment on sales to
Stripes stores.
(4)
We define EBITDA as net income (loss) attributable to Susser Holdings Corporation before net interest expense, income taxes, net income attributable to
noncontrolling interest and depreciation, amortization and accretion. Adjusted EBITDA further adjusts EBITDA by excluding non-cash stock-based
compensation expense and certain other operating expenses that are reflected in our net income that we do not believe are indicative of our ongoing core
operations, such as significant non-recurring transaction expenses and the gain or loss on disposal of assets and impairment charges. Adjusted EBITDAR
adds back rent to Adjusted EBITDA. In addition, those expenses that we have excluded from our presentation of Adjusted EBITDA and Adjusted EBITDAR
are also excluded in measuring our covenants under our debt agreements and indentures. EBITDA, Adjusted EBITDA and Adjusted EBITDAR are not
presented in accordance with GAAP.
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 facilities or existing notes;
they do not reflect payments made or future requirements for income taxes;
Page 8
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 titled measures of other companies.
Subsequent to the SUSP IPO, we revised our definition of EBITDA to exclude the impact of noncontrolling
interest, in order to present a consolidated amount for EBITDA, Adjusted EBITDA and Adjusted EBITDAR
which is consistent with the metrics used by our management and in our credit agreement covenants. Prior to
the SUSP IPO, the amount of noncontrolling interest was not material.
The following tables present a reconciliation of net income (loss) attributable to Susser Holdings Corporation
to EBITDA, Adjusted EBITDA and Adjusted EBITDAR:
Three Months Ended Nine Months Ended
September 30,
2012
September 29,
2013
September 30,
2012
September 29,
2013
(in thousands)
Net income attributable to Susser Holdings Corporation$ 6,847 $ 12,897 $ 36,136 $ 8,405
Net income attributable to noncontrolling interest 287 4,789 289 13,731
Depreciation, amortization and accretion 13,184 15,482 38,299 44,808
Interest expense, net 10,653 2,380 31,080 45,152
Income tax expense 8,579 10,756 26,449 12,351
EBITDA 39,550 46,304 132,253 124,447
Non-cash stock based compensation 1,462 2,500 4,337 5,318
Loss on disposal of assets and impairment charge 455 380 489 1,507
Other miscellaneous expense 125 221 330 460
Adjusted EBITDA 41,592 49,405 137,409 131,732
Rent 11,579 11,762 34,668 35,666
Adjusted EBITDAR $ 53,171 $ 61,167 $ 172,077 $ 167,398
Net Income Attributable to Susser Holdings Corporation
Impact of Unusual Items
Three Months Ended Nine Months Ended
September 30,
2012
September 29,
2013
September 30,
2012
September 29,
2013
(dollars in thousands, except per share amounts)
After-Tax
Income
Diluted
EPS
After-Tax
Income
Diluted
EPS
After-Tax
Income
Diluted
EPS
After-Tax
Income
Diluted
EPS
As Reported $ 6,847 $ 0.32 $ 12,897 $ 0.59 $ 36,136 $ 1.70 $ 8,405 $ 0.38
Non-cash deferred tax charge on SUSP IPO 3,616 0.17 3,616 0.17
May 2013 refinancing 16,744 0.77
Non-cash deferred tax charge on GFI
Contribution
3,466 0.17 3,466 0.17
As Adjusted $ 10,463 $ 0.49 $ 16,363 $ 0.76 $ 39,752 $ 1.87 $ 28,615 $ 1.32
SOURCE Susser Holdings Corporation
Page 9