Susser Petroleum Partners LP Reports First Quarter 2013 Results
Net income for the quarter was
"Results from the Partnership continue to be in line with our expectations," said
"The purchase and leaseback arrangement with
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
Revenue for the first quarter totaled
Gross profit for the quarter totaled
Affiliate customers as of
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
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
Including the Stripes store purchases, SUSP's gross capital expenditures for the first quarter were
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 onSusser 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. | |___|__________________________________________________________________________| |(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
The distribution will be paid on
Factors Affecting Comparability and Explanation of Pro Forma Results
SUSP completed its initial public offering of common units representing limited partner interests on
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
First Quarter Earnings Conference Call
Susser's management team will hold a conference call today at
About
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:
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
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
-- 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
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:
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 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: 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 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,
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 ¢
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
(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
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 Mary Sullivan , Chief Financial Officer (832) 234-3600, msullivan@susser.com Dennard -Lascar Associates Anne Pearson , Senior Vice President (210) 408-6321, apearson@dennardlascar.comBen Burnham , Vice President (773) 599-3745, bburnham@dennardlascar.com
SOURCE