Susser Petroleum Partners LP Reports First
Quarter 2013 Results
5/8/2013
HOUSTON, May 8, 2013 /PRNewswire/ -- Susser Petroleum Partners LP (NYSE: SUSP), a wholesale
distributor of motor fuels, today reported financial and operating results for the first quarter ended March 31,
2013.
Net income for the quarter was $8.2 million, or $0.38 per unit. Adjusted EBITDA
(1)
totaled $11.2 million and
distributable CASH flow
(1)
was $10.4 million. Total revenue for the quarter was $1,081.2 million.
"Results from the Partnership continue to be in line with our expectations," said Sam L. Susser , Chairman and
Chief Executive Officer. "Gross PROFIT benefited from year-over-year growth of 4.4% in total gallons
distributed as well as an increase in average margin per gallon sold.
"The purchase and leaseback arrangement with Susser Holdings continues to provide the Partnership with a
growing stream of stable fuel gross PROFIT and a real estate portfolio that will generate visible rental income
and the potential for long-term asset appreciation."
First Quarter 2013 Compared to Pro Forma First Quarter 2012
The analysis below compares actual first quarter 2013 results to pro forma first quarter 2012 results. The pro
forma results reflect revenues and gross margins as if the Partnership had completed its initial public offering
and related transactions and had been operating as an independent entity under its current contractual
arrangements with affiliates since January 1, 2012. Please refer to the section below titled, "Factors Affecting
Comparability and Explanation of Pro Forma Results" for additional information.
Revenue for the first quarter totaled $1,081.2 million, a 0.4% increase compared to $1,076.5 million (pro
forma) in the comparable period of 2012. The increase was driven by a 4.4% increase in gallons sold, partially
offset by a decline in selling price per gallon. In the first quarter of 2013, 67.6% of revenues were generated
from motor fuel sales to affiliates, 32.1% were from motor fuel sales to other third-parties, and 0.3% came
from rental and other income.
Gross PROFIT for the quarter totaled $15.6 million, a 15.2% increase compared to pro forma gross PROFIT
of $13.5 million in the first quarter of 2012. On a weighted average basis, fuel margin for all gallons sold
increased to 3.6 cents per gallon in the first quarter of 2013 compared to pro forma 3.4 cents per gallon in the
prior-year period.
Affiliate customers as of March 31 include 562 Stripes convenience stores operated by our parent company,
Susser Holdings Corporation (NYSE: SUSS), as well as SUSS' sales of motor fuel under consignment
arrangements at approximately 90 independently operated convenience stores. Motor fuel gallons sold to
affiliates during the first quarter increased 5.7% versus the prior-year period to 251.1 million gallons. Gross
PROFIT on these gallons totaled $7.4 million, or 3.0 cents per gallon, versus a pro forma $7.1 million in the
comparable three-month period last year, or 3.0 cents per gallon.
Page 1
Third-party customers of SUSP include approximately 490 independent dealers under long-term fuel supply
agreements and over 1,700 other commercial customers as of March 31. Total gallons of motor fuel sold to
third parties increased year-over-year by 1.7% to 115.8 million gallons for the quarter. Gross PROFIT on
these gallons was $5.8 million, or 5.0 cents per gallon, compared to $4.8 million, or 4.2 cents per gallon, in the
prior-year period on a pro forma basis.
CAPITAL Spending and Financing
SUSP completed purchase and leaseback transactions for six Stripes convenience stores during the first quarter
and two more so far in the second quarter. Since its initial public offering in September 2012, SUSP has
completed the purchase and leaseback of 16 Stripes stores for a cumulative cost of $65.4 million, including
post-completion true-up.
Including the Stripes store purchases, SUSP's gross capital expenditures for the first quarter were $27.9 million,
which included $0.1 million for maintenance capital. At March 31, SUSP had borrowings against its revolving
line of credit of $58.6 million and other long-term debt of $123.2 million, a portion of which was collateralized
by $122.3 million of marketable securities.
2013 Guidance
SUSP's management team is reaffirming the following previously issued guidance for 2013. Please refer to
disclosures below regarding forward-looking statements.
FY 2013 Q1 2013
Guidance Actual
Motor Fuel Gallons (billions) (a) 1.45 - 1.60 0.37
Fuel Margin (cents/gallon) (a) 3.3 - 3.5 3.6
New Stripes stores expected to be purchased by SUSP (b) 25 - 35 6
New Wholesale dealer and consignment sites (c) 25 - 40 5
Maintenance Capital Spending (millions) $1 - $3 $0.1
Expansion Capital Spending (millions) (d) $95-$135 $27.8
______________________________________________________________________________
|(a)|Includes affiliated and third-party gallons. |
|___|__________________________________________________________________________|
|(b)|Based on Susser Holdings Corporation guidance of 29 - 35 new Stripes |
| |stores to be built in 2013. |
|___|__________________________________________________________________________|
|(c)|Does not reflect existing wholesale store closures, which are typically |
| |lower volume locations than new sites. |
|___|__________________________________________________________________________|
Page 2
|(d)|Expansion capital includes Stripes store purchases. The Partnership does |
| |not provide guidance on potential acquisitions. |
|___|__________________________________________________________________________|
| |||| |
|___||||_______________________________________________________________________|
| |||| |
|___||||_______________________________________________________________________|
| |Adjusted EBITDA and distributable cash flow are non-GAAP financial |
| |measures of performance that have limitations and should not be considered|
|(1)|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 distributable cash |
| |flow, and reconciliation to net income for the periods presented. |
|___|__________________________________________________________________________|
Quarterly Distribution
SUSP announced today that the board of directors of its general partner has approved its quarterly distribution
for the first quarter of 2013 of $0.4375 per unit. This amount corresponds to $1.75 per unit on an annualized
basis. The total distribution amount of approximately $9.6 million is being paid from distributable cash flow of
$10.4 million for the quarter.
The distribution will be paid on May 30 to unitholders of record on May 20. Immediately prior to the
distribution there will be 21,878,872 units outstanding, including all of the Partnership's common and
subordinated units.
Factors Affecting Comparability and Explanation of Pro Forma Results
SUSP completed its initial public offering of common units representing limited partner interests on September
25, 2012. Reported results of operations for the three-month period ending March 31, 2012 reflect the results
of Susser Petroleum Company LLC, the Partnership's "Predecessor". Prior to September 25, 2012, the
Predecessor did not charge intercompany gross profit on motor fuel sales to Susser Holdings' Stripes®
convenience stores. Additionally, not all of the wholesale operations of the Predecessor were contributed to
SUSP, such as consignment location fuel sales and the fuel transportation assets and operations. As a result,
actual operating results are not comparable on a period-to-period basis.
Selected supplemental pro forma information is being provided which reflects certain SUSP results as if the
current structure and contracts had been in place on January 1, 2012. The pro forma results show actual gallons
sold but reflect revenues and gross margins as if the Partnership had completed its initial public offering and
related transactions and had been operating as an independent entity under its current contractual arrangements
with affiliates since January 1, 2012. Additional details regarding our pro forma adjustments are included in
the attached tables. Management believes the pro forma presentation provides investors with a more relevant
comparison to historical and future periods as opposed to actual results.
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 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
Page 3
www.susser.com and Susser Petroleum Partners' web site at www.susserpetroleumpartners.com under Events
and Presentations. A telephone replay will be available through May 15 by calling 303-590-3030 and using the
pass code 4614394#.
About Susser Petroleum Partners LP
Houston-based Susser Petroleum Partners LP is a publicly-traded partnership formed by Susser Holdings
Corporation to engage in the primarily fee-based wholesale distribution of motor fuels to Susser Holdings and
third parties. Susser Petroleum Partners distributes over 1.4 billion gallons of motor fuel annually from major
oil companies and independent refiners to Susser Holdings' Stripes® convenience 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." 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: Susser Holdings' business strategy, operations and conflicts of interest
with us; our ability to renew or renegotiate our long-term distribution contracts with our customers; changes in
the price of and demand for the motor fuel that we distribute; our dependence on two principal suppliers;
competition in the wholesale motor fuel distribution industry; seasonal trends; increased costs; our ability to
make acquisitions; environmental laws and regulations; dangers inherent in the storage of motor fuel; our
reliance on SHC for transportation services; and other unforeseen factors. For a full discussion of these and
other risks and uncertainties, refer to the "Risk Factors" section of the Partnership'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.
Qualified Notice
This release is intended to be a qualified notice under Treasury Regulation Section 1.1446-4(b). Brokers and
nominees should treat 100 percent of Susser Petroleum Partners' distributions to non-U.S. investors as being
attributable to income that is effectively connected with a United States trade or business. Accordingly, Susser
Petroleum Partners' distributions to non-U.S. investors are subject to federal income tax withholding at the
highest applicable effective tax rate.
Financial statements follow
Pro Forma Results
The following presentation compares actual first quarter 2013 results to the pro forma revenues and gross profit
for SUSP in the first quarter of 2012 had the transactions and contracts related to the IPO occurred as of
January 1, 2012. Specifically, the following pro forma schedules give effect to:
-- the contribution by our Predecessor to us of substantially all of the
assets and operations comprising its wholesale motor fuel distribution
business (other than its motor fuel consignment business and
Page 4
transportation assets and substantially all of its accounts receivable
and payable);
-- the contribution by SUSS and our Predecessor to us of certain
convenience store properties;
-- our entry into a fuel distribution contract with SUSS, which provides
(i) a three cent fixed profit margin on the motor fuel distributed to
SUSS for its Stripes® convenience stores, instead of no margin
historically reflected in our Predecessor financial statements and (ii)
a three cent fixed profit margin on all volumes sold to SUSS for its
independently operated consignment locations, instead of the variable
and higher margin received by our Predecessor under consignment
contracts; and
-- our entry into the SUSS Transportation Contract and the elimination of
revenues and costs associated with the transportation business that were
included in our Predecessor's results of operations.
As used in the following table, "affiliates" refers to sales to SUSS for its Stripes® convenience stores and
independently operated consignment locations; "third-party" refers to sales to independently operated dealer
supply locations and other commercial customers.
Three Months Ended
March 31, March 31,
2012 2013
Pro Forma Actual
(in thousands)
Revenues:
Motor fuel sales to third parties $ 351,845 $ 347,504
Motor fuel sales to affiliates 722,496 730,727
Rental income 839 1,629
Other income 1,352 1,299
Total revenue 1,076,532 1,081,159
Gross profit:
Motor fuel sales to third parties 4,813 5,797
Motor fuel sales to affiliates 7,123 7,418
Rental income 839 1,629
Other 729 712
Total gross profit $ 13,504 $ 15,556
Operating Data:
Page 5
Motor fuel gallons sold:
Third-party dealers and other commercial customers 113,927 115,831
Affiliated gallons 237,441 251,052
Total gallons sold 351,368 366,883
Motor fuel gross profit cents per gallon:
Third-party 4.2 ¢ 5.0 ¢
Affiliated 3.0 ¢ 3.0 ¢
Volume-weighted average for all gallons 3.4 ¢ 3.6 ¢
Susser Petroleum Partners LP
Consolidated Statements of Operations
Unaudited
Three Months Ended
March 31, March 31,
2012 2013
Predecessor
(dollars in thousands, except unit and per unit
amounts)
Revenues:
Motor fuel sales to third $ 438,801 $ 347,504
parties
Motor fuel sales to 630,444 730,727
affiliates
Rental income 1,364 1,629
Other income 2,045 1,299
Page 6
Total revenues 1,072,654 1,081,159
Cost of sales:
Motor fuel cost of sales to 431,689 341,707
third parties
Motor fuel cost of sales to 630,444 723,309
affiliates
Other 638 587
Total cost of sales 1,062,771 1,065,603
Gross profit 9,883 15,556
Operating expenses:
General and administrative 2,649 3,899
Other operating 1,436 631
Rent 1,070 204
Loss on disposal of assets 111 22
Depreciation, amortization 1,884 1,821
and accretion
Total operating expenses 7,150 6,577
Income from operations 2,733 8,979
Interest expense, net (87) (683)
Income before income taxes 2,646 8,296
Income tax expense (972) (69)
Net income and comprehensive $ 1,674 $ 8,227
income
Net income per limited
partner unit:
Common $ 0.38
Subordinated $ 0.38
Limited partner units
outstanding:
Page 7
Common units - public 10,925,000
Common units - affiliated 14,436
Subordinated units - 10,939,436
affiliated
Cash distribution per unit $ 0.4375
Susser Petroleum Partners LP
Consolidated Balance Sheets
December 31, March 31,
2012 2013
unaudited
(in thousands)
Assets
Current assets:
Cash and cash equivalents $ 6,752 $ 9,325
Accounts receivable, net of allowance for doubtful
accounts of $103 at December 31, 2012, and $189 at 33,008 41,549
March 31, 2013
Receivables from affiliates 59,543 57,301
Inventories, net 2,981 24,008
Other current assets 821 147
Total current assets 103,105 132,330
Property and equipment, net 68,173 94,749
Other assets:
Marketable securities 148,264 122,267
Goodwill 12,936 12,936
Intangible assets, net 23,131 22,469
Other noncurrent assets 191 172
Total assets $ 355,800 $ 384,923
Page 8
Liabilities and unitholders' equity
Current liabilities:
Accounts payable $ 88,884 $ 119,552
Accrued expenses and other current liabilities 1,101 3,725
Current maturities of long-term debt 24 24
Total current liabilities 90,009 123,301
Revolving line of credit 35,590 58,600
Long-term debt 149,241 123,135
Deferred tax liability, long-term portion 152 152
Other noncurrent liabilities 2,476 2,344
Total liabilities 277,468 307,532
Commitments and contingencies:
Unitholders' equity:
Susser Petroleum Partners LP unitholders' equity:
Common unitholders - public (10,925,000 units issued 210,462 209,852
and outstanding)
Common unitholders - affiliated (14,436 units issued (175) (175)
and outstanding)
Subordinated unitholders - affiliated (10,939,436 units (131,955) (132,286)
issued and outstanding)
Total unitholders' equity 78,332 77,391
Total liabilities and unitholders' equity $ 355,800 $ 384,923
Key Operating Metrics
The following table sets forth, for the periods indicated, information concerning key measures we rely on to
gauge our operating performance. Historical results include our Predecessor's results of operations. The
following information is intended to provide investors with a reasonable basis for assessing our historical
operations, but should not serve as the only criteria for predicting our future performance.
Three Months Ended
March 31, March 31,
Page 9
2012(1) 2013
Predecessor
(in thousands, except for selling price and
cents per gallon)
Revenues:
Motor fuel sales to third parties $ 438,801 $ 347,504
(2)
Motor fuel sales to affiliates 630,444 730,727
(2)
Rental income 1,364 1,629
Other income 2,045 1,299
Total revenue 1,072,654 1,081,159
Gross profit:
Motor fuel gross profit to third 7,112 5,797
parties (2)
Motor fuel gross profit to — 7,418
affiliates (2)
Rental income 1,364 1,629
Other 1,407 712
Total gross profit $ 9,883 $ 15,556
Net income $ 1,674 $ 8,227
Adjusted EBITDA(3) $ 4,917 $ 11,227
Distributable cash flow (3) $ 10,435
Operating Data:
Total motor fuel gallons sold:
Third-party 141,582 115,831
Affiliated gallons 209,786 251,052
Average wholesale selling price $ 3.04 $ 2.94
per gallon
Motor fuel gross profit cents per
gallon (2):
Third-party 5.0 ¢ 5.0 ¢
Page 10
Affiliated 0.0 ¢ 3.0 ¢
Volume-weighted average for all 2.0 ¢ 3.6 ¢
gallons
(1) Results represent Predecessor.
(2) For the first quarter 2012, affiliated sales only include sales to Stripes® convenience stores, for which our
Predecessor historically received no margin, and third-party motor fuel sales and gross profit cents per gallon
includes the motor fuel sold directly to independently operated consignment locations, as well as sales to third-
party dealers and other commercial customers. Following our IPO on September 25, 2012, we sell fuel to
SUSS for both Stripes® convenience stores and SUSS' independently operated consignment locations at a
fixed profit margin of approximately three cents per gallon, and these sales are classified as affiliated sales.
(3) We define EBITDA as net income before net interest expense, income tax expense and depreciation and
amortization expense. Adjusted EBITDA further adjusts EBITDA to reflect certain other non-recurring and
non-cash items. We define distributable cash flow as Adjusted EBITDA less cash interest expense, cash state
franchise tax expense, maintenance capital expenditures, and other non-cash adjustments. EBITDA, Adjusted
EBITDA and distributable cash flow are not financial measures calculated in accordance with GAAP.
We believe EBITDA, Adjusted EBITDA and distributable cash flow are useful to investors in evaluating our
operating performance because:
-- Adjusted EBITDA is used as a performance measure under our revolving
credit facility;
-- securities analysts and other interested parties use such metrics as
measures of financial performance, ability to make distributions to our
unitholders and debt service capabilities;
-- they are used by our management for internal planning purposes,
including aspects of our consolidated operating budget, and capital
expenditures; and
-- distributable cash flow provides useful information to investors as it
is a widely accepted financial indicator used by investors to compare
partnership performance, as it provides investors an enhanced
perspective of the operating performance of our assets and the cash our
business is generating.
EBITDA, Adjusted EBITDA and distributable cash flow 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 distributable cash flow have limitations as analytical tools, and one 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 total 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 interest expense, or the cash requirements necessary
to service interest or principal payments on our revolving credit
Page 11
facility or term loan;
-- 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 and Adjusted EBITDA do not reflect cash requirements
for such replacements; and
-- because not all companies use identical calculations, our presentation
of EBITDA, Adjusted EBITDA and distributable cash flow may not be
comparable to similarly titled measures of other companies.
The following table presents a reconciliation of net income to EBITDA, Adjusted EBITDA and distributable
cash flow:
Three Months Ended
March 31, March 31,
2012 2013
Predecessor
(in thousands)
Net income $ 1,674 $ 8,227
Depreciation, amortization and accretion 1,884 1,821
Interest expense, net 87 683
Income tax expense 972 69
EBITDA 4,617 10,800
Non-cash stock-based compensation 189 405
Loss on disposal of assets and impairment charge 111 22
Adjusted EBITDA $ 4,917 $ 11,227
Cash interest expense 587
State franchise tax expense (cash) 69
Maintenance capital expenditures 136
Distributable cash flow $ 10,435
Contacts: Susser Petroleum Partners LP
Page 12
Mary Sullivan, Chief Financial Officer
(832) 234-3600, msullivan@susser.com
Dennard - Lascar Associates
Anne Pearson, Senior Vice President
(210) 408-6321, apearson@dennardlascar.com
Ben Burnham, Vice President
(773) 599-3745, bburnham@dennardlascar.com
SOURCE Susser Petroleum Partners LP
Page 13