SusserPetroleumPartnersLPReportsFirst
Quarter2014Results
5/7/2014
InvestorCalltobeHeldTodayat10a.m.ET
-Gallonssoldincreased18%
-Distributablecashflowincreased34.5%
HOUSTON, May 7, 2014 /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,
2014.
Net income for the quarter was $10.1 million, or $0.46 per unit, compared to $8.2 million, or $0.38 per unit, in
the first quarter of 2013. Adjusted EBITDA
(1)
totaled $15.7 million and distributable cash flow
(1)
was $14.0
million, versus $11.2 million and $10.4 million, respectively, for the prior-year period.
Revenue for the first quarter totaled $1.2 billion, an 11.6% increase compared to $1.1 billion in the comparable
period in 2013. The increase was driven by an 18.1% increase in gallons sold. In the first quarter of 2014,
63.0% of revenues were generated from motor fuel sales to affiliates, 36.5% were from motor fuel sales to
other third-parties, and 0.5% came from rental and other income.
Gross profit for the quarter totaled $22.1 million, a 42.2% increase compared to $15.6 million in the first
quarter of last year. On a weighted average basis, fuel margin for all gallons sold increased to 4.0 cents per
gallon, compared to 3.6 cents per gallon in the prior-year period.
Affiliate customers as of March 31 include 629 Stripes
®
and Sac-N-Pac
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 10.7% versus the prior-year period to 277.8 million gallons.
Gross profit on these gallons totaled $8.4 million, or 3.0 cents per gallon, versus $7.4 million, or 3.0 cents per
gallon, in the comparable three-month period last year.
Third-party customers of SUSP include approximately 520 independent dealers under long-term fuel supply
agreements, 13 independently operated consignment locations and approximately 1,900 other commercial
customers. Total gallons sold to third parties increased year-over-year by 34.3% to 155.6 million gallons.
Gross profit on these gallons was $8.8 million, or 5.7 cents per gallon, compared to $5.8 million, or 5.0 cents
per gallon, in the prior-year period.
"Results from the Partnership continued to be robust for the first quarter of 2014, with an 18 percent year-over-
year increase in fuel gallons sold and a 42 percent increase in gross profit," said Rocky B. Dewbre , President
and Chief Executive Officer. "The year-on-year growth was largely driven by the Gainesville Fuel and Sac-N-
Pac/3W Warren Fuels acquisitions, and the growth in Stripes gallons supported by a robust Texas economy.
As a result, we are pleased to announce our fourth consecutive increase in our quarterly distribution.
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"We're excited about the new opportunities ahead of us that are expected to result from the recently announced
transaction in which Susser Holdings Corporation, the owner of our general partner, will be acquired by Energy
Transfer Partners, L.P. That transaction is expected to close in the third quarter. ETP has announced that it
plans to begin dropping down Susser Holdings and its own Sunoco convenience store and fuel distribution
assets to SUSP, which is expected to diversify our cash flows and accelerate our growth," Dewbre said. Any
future material drop downs will be subject to market conditions and the approval of SUSP's conflicts
committee.
NewDealerUpdate
27 new contracted dealer sites were added in the first quarter including 19 acquired in conjunction with the
Sac-N-Pac/3W Warren Fuels Acquisition, and two sites were discontinued for a total of 616 third party dealer
and SUSS consignment locations as of March 31. In addition to the 19 acquired dealer sites, Susser expects to
add 28 to 45 new wholesale branded dealers in 2014.
CapitalSpendingandFinancing
SUSP completed drop down transactions for seven 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 42 newly built stores for a cumulative cost of $169.6 million.
Including the Stripes store purchases, SUSP's gross capital expenditures for the first quarter were $31.4 million,
which included $31.2 million for growth capital and $0.2 million for maintenance capital. At March 31, SUSP
had borrowings against its revolving line of credit of $230.0 million and other long-term debt of $4.1 million.
Availability on the revolving credit facility after borrowings and letters of credit commitments, was $159.1
million.
(1)
Adjusted EBITDA and distributable cash flow are non-GAAP financial measures of performance that have 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 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 2014 of $0.5021 per unit. This amount corresponds to $2.01 per unit on an annualized
basis and represents a 3.5 percent increase compared to the distribution for the previous quarter. The total
distribution amount of approximately $11.0 million is being paid from distributable cash flow of $14.0 million
for the quarter and reflects a distribution coverage ratio of 1.27 times. This distribution is 14.8% greater than
the $0.4375 per unit paid in May 2013.
The distribution will be paid on May 30, 2014 to unitholders of record on May 20, 2014. Immediately prior to
the distribution, there are expected to be 21,960,200 units outstanding, including all of the Partnership's
common and subordinated units.
First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 first
quarter 2014 results for both Susser Holdings Corporation and Susser Petroleum Partners LP. To participate in
the call, dial 480-629-9819 10 minutes early and ask for the Susser conference call. The call will also be
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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 May 14 by calling 303-590-3030 and using the
pass code 4680249#.
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 approximately 1.6 billion gallons of motor fuel annually
from major oil companies and independent refiners to Susser Holdings' Stripes® and Sac-N-Pac 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
expectations and the expected timing and impact of Susser Holdings Corporation's acquisition by Energy
Transfer Partners and related transactions 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; changing consumer preferences for alternative fuel sources or
improvement in fuel efficiency; competition in the wholesale motor fuel distribution industry; seasonal trends;
severe or unfavorable weather conditions; 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;
reliance of our suppliers to provide trade credit terms to adequately fund our ongoing operations; acts of war
and terrorism; dependence on our information technology systems; 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 Pertroluem 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.
Contacts:Susser Petroleum Partners LP
Mary Sullivan, Chief Financial Officer
(832) 234-3600, msullivan@susser.com
Dennard • Lascar Associates, LLC
Anne Pearson, Senior Vice President
(210) 408-6321, apearson@dennardlascar.com
Ben Burnham, Vice President
(773) 599-3745, bburnham@dennardlascar.com
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Financial statements follow
SusserPetroleumPartnersLP
ConsolidatedStatementsofOperationsandComprehensiveIncome
Unaudited
ThreeMonthsEnded
March31,
2013
March31,
2014
(in thousands, except unit and per unit amounts)
Revenues:
Motor fuel sales to third parties $ 356,762 $ 444,566
Motor fuel sales to affiliates 730,727 766,090
Rental income 1,629 3,923
Other income 1,299 2,008
Total revenues 1,090,417 1,216,587
Cost of sales:
Motor fuel cost of sales to third parties 350,965 435,723
Motor fuel cost of sales to affiliates 723,309 757,723
Other 587 1,021
Total cost of sales 1,074,861 1,194,467
Gross profit 15,556 22,120
Operating expenses:
General and administrative 3,899 4,870
Other operating 631 2,034
Rent 204 249
Loss on disposal of assets 22
Depreciation, amortization and accretion 1,821 3,326
Total operating expenses 6,577 10,479
Income from operations 8,979 11,641
Interest expense, net (683) (1,502)
Income before income taxes 8,296 10,139
Income tax expense (69) (7)
Net income and comprehensive income $ 8,227 $ 10,132
Net income per limited partner unit:
Common (basic and diluted) $ 0.38 $ 0.46
Subordinated (basic and diluted) $ 0.38 $ 0.46
Weighted average limited partner units outstanding:
Common units - public 10,925,000 10,938,053
Common units - affiliated 14,436 79,308
Subordinated units - affiliated 10,939,436 10,939,436
Cash distribution per unit $ 0.4375 $ 0.5021
SusserPetroleumPartnersLP
ConsolidatedBalanceSheets
December31,
2013
March31,
2014
unaudited
(in thousands, except
units)
Assets
Current assets:
Cash and cash equivalents $ 8,150 $5,957
Accounts receivable, net of allowance for doubtful accounts of $323 at December 31, 2013, and $457 at March 31, 2014 69,005 97,875
Receivables from affiliates 49,879 60,086
Inventories, net 11,122 35,805
Other current assets 66 329
Total current assets 138,222 200,052
Property and equipment, net 180,127 206,144
Other assets:
Marketable securities 25,952
Goodwill 22,823 22,823
Intangible assets, net 22,772 24,954
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Other noncurrent assets 188 190
Total assets $ 390,084 $454,163
Liabilitiesandequity
Current liabilities:
Accounts payable $ 110,432 $123,017
Accrued expenses and other current liabilities 11,427 15,177
Current maturities of long-term debt 525 525
Total current liabilities 122,384 138,719
Revolving line of credit 156,210 230,000
Long-term debt 29,416 3,543
Deferred tax liability, long-term portion 222 193
Other noncurrent liabilities 2,159 1,827
Total liabilities 310,391 374,282
Commitments and contingencies:
Partners' equity:
Limited partners:
Common unitholders - public (10,936,352 units issued and outstanding at December 31, 2013 and 10,941,456 units issued and
outstanding at March 31, 2014)
210,269 210,364
Common unitholders - affiliated (79,308 units issued and outstanding at December 31, 2013 and at March 31, 2014) 1,562 1,559
Subordinated unitholders - affiliated (10,939,436 units issued and outstanding at December 31, 2013 and March 31, 2014) (132,138) (132,042)
Total equity 79,693 79,881
Total liabilities and equity $ 390,084 $454,163
KeyOperatingMetrics
The following table sets forth, for the periods indicated, information concerning key measures we rely on to
gauge our operating performance. 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,
2013
March31,
2014
(in thousands, except for selling price
and gross profit per gallon)
Revenues:
Motor fuel sales to third parties (1) $ 356,762 $ 444,566
Motor fuel sales to affiliates 730,727 766,090
Rental income 1,629 3,923
Other income 1,299 2,008
Total revenue (1) 1,090,417 1,216,587
Gross profit:
Motor fuel gross profit to third parties 5,797 8,843
Motor fuel gross profit to affiliates 7,418 8,366
Rental income 1,629 3,923
Other 712 988
Total gross profit $ 15,556 $ 22,120
Net income $ 8,227 $ 10,132
Adjusted EBITDA (2) $ 11,227 $ 15,674
Distributable cash flow (2) $ 10,435 $ 14,037
OperatingData:
Total motor fuel gallons sold:
Third-party 115,831 155,595
Affiliated gallons 251,052 277,796
Average wholesale selling price per gallon $ 2.96 $ 2.79
Motor fuel gross profit (cents per gallon):
Third-party 5.0¢
5.7¢
Affiliated 3.0¢
3.0¢
Volume-weighted average for all gallons3.6¢ 4.0¢
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(1)
In December 2013, we revised our presentation of fuel taxes on motor fuel sales at our consignment locations to present such fuel taxes gross in motor fuel
sales. Prior years' motor fuel sales have been adjusted to reflect this revision.
(2)
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. 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 or to cash flows from operating activities as a measure of liquidity. 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 loans;
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 tables present a reconciliation of net income to EBITDA, Adjusted EBITDA and distributable
cash flow:
ThreeMonthsEnded
March31,
2013
March31,
2014
(in thousands)
Net income $ 8,227 $ 10,132
Depreciation, amortization and accretion 1,821 3,326
Interest expense, net 683 1,502
Income tax expense 69 7
EBITDA 10,800 14,967
Non-cash stock based compensation 405 707
Loss on disposal of assets and impairment charge22
Adjusted EBITDA $ 11,227 $ 15,674
Cash interest expense 587 1,406
State franchise tax expense (cash) 69 68
Maintenance capital expenditures 136 163
Distributable cash flow $ 10,435 $ 14,037
SOURCE Susser Petroleum Partners LP
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