Susser Holdings Reports Fourth Quarter and Full
Year 2013 Results
2/26/2014
- Same-store merchandise sales up 2.4% in 4Q, 3.0% for full year
- Retail merchandise margin of 34.4% in 4Q, 33.9% for full year
- Average retail fuel gallons per store increased 7.8% in 4Q, 5.8% for full year
- A record 29 new Stripes® stores opened in 2013, 13 currently under construction
CORPUS CHRISTI, Texas, Feb. 26, 2014 /PRNewswire/ -- Susser Holdings Corporation (NYSE: SUSS) today
reported financial and operating results for the three- and 12-month periods ended December 29, 2013. Results
detailed below include the results of Susser Petroleum Partners LP (NYSE: SUSP) unless otherwise noted.
Same-store merchandise sales increased 2.4 percent in the fourth quarter of 2013, versus growth of 5.8 percent
in the same quarter of 2012. Average retail gallons sold per store increased 7.8 percent compared with growth
of 3.1 percent in the fourth quarter of 2012. Retail net merchandise margin increased to 34.4 percent, up from
34.1 percent in the prior-year period.
Retail fuel margin before credit card expense averaged 14.6 cents per gallon, versus 21.1 cents per gallon in the
fourth quarter of 2012. That compares to an average fourth quarter retail fuel margin of 14.4 cents per gallon
over the previous five years, calculated as if the 3-cent-per-gallon mark-up charged by Susser Petroleum
Partners had been in place for the entire period.
Net income attributable to Susser Holdings was $5.9 million, or $0.27 per diluted share, versus net income of
$10.6 million, or $0.49 per diluted share in the fourth quarter of 2012.
Adjusted EBITDA
(1)
totaled $37.3 million, down 18.0 percent from a year earlier. Consolidated gross profit
totaled $156.9 million, roughly flat compared with the fourth quarter of 2012. These results primarily reflect
growth in merchandise and gallons sold, offset by lower retail fuel margins.
Fourth quarter consolidated revenues totaled $1.5 billion, up 9.2 percent from a year earlier. This increase was
the result of an 8.9 percent increase in merchandise sales, a 5.4 percent increase in retail fuel revenues and a
16.1 percent increase in wholesale fuel revenues from third parties. The positive revenue impact of higher fuel
volumes sold was partially offset by lower per-gallon selling prices, particularly in the retail segment.
"During 2013 we achieved several important milestones, including our 25
th
consecutive year of positive same-
store retail merchandise sales growth. We announced two tuck-in acquisitions that will contribute to the growth
of both Susser Holdings and Susser Petroleum Partners, and the opening of a record 29 new large-format
Stripes
®
locations in Texas," said Sam L. Susser , Chairman and Chief Executive Officer.
"We are very pleased with our most recent acquisition, the Sac-N-Pac™ retail convenience stores serving
communities in the fast-growing I-35 corridor in South Central Texas and a related wholesale fuel supply
business. We have completed the integration of those businesses into our organization and our back office
systems, and they are performing well, due to the quality of the real estate and the 'can do' attitude of the Sac-
N-Pac and Stripes team members who drove the smooth transition. This transaction is expected to be accretive
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to both the Company and the Partnership.
"We feel very confident about the long-term growth potential in our key markets in Central Texas, where job
growth and major CAPITAL investments are creating strong opportunities to expand both our retail and
wholesale businesses," Susser added.
NewConvenienceStoreandWholesaleBusinessUpdate
Susser Holdings opened nine new large-format Stripes convenience stores during the fourth quarter. Three
smaller stores were closed, a fourth was razed and is being rebuilt on the existing location, and a fifth store was
converted to a wholesale dealer location during the fourth quarter. For the full year, the Company opened a
record 29 new stores and closed, rebuilt or converted eight stores. At year-end the Company operated a total of
580 Stripes stores, of which 376 include a restaurant. 13 new stores are currently under construction. In
addition to the purchase of the 47 Sac-N-Pac locations, the Company expects to open a total of 27 to 33 Stripes
stores this year and continues to acquire additional land for future store development.
Eight new contracted sites were added in the wholesale segment in the fourth quarter, and four were
discontinued for a total of 591 contracted branded sites as of December 31, 2013. This included 99
consignment locations and 492 independent branded dealer contracts. Susser added a total of 32 new dealer
sites in 2013 and discontinued 20. In 2014, in addition to the 20 new dealer sites acquired in the Sac-N-Pac
transaction, Susser currently expects to add 28 to 45 new wholesale branded dealers and consignment sites.
As previously reported, Susser Holdings completed the acquisition in late January of the convenience store
assets and fuel distribution contracts of Sac-N-Pac Stores, Inc. and 3W Warren Fuels, Ltd. 3W Warren Fuels
supplied approximately 65 million gallons of motor fuel annually to the 47 Sac-N-Pac locations and to
approximately 20 independent dealer locations. The total purchase price was approximately $88 million plus
inventories. Susser plans to initially operate all of the 47 stores under the Sac-N-Pac brand. Over the next six to
eighteen months, Susser may convert some of the sites to the Stripes brand, may add the Laredo Taco
Company brand to certain locations or may elect to convert some sites to the Company's wholesale dealer
network.
FinancingUpdate
Susser Holdings and Susser Petroleum Partners completed a sale leaseback transaction for three new Stripes
locations during the fourth quarter for a total cost of $11.9 million. In total, Susser completed sale leaseback
transactions for 25 stores in 2013. So far in the first quarter of 2014, Susser has completed sale leasebacks for
five additional stores at a cost of $19.5 million. Since the initial public offering of units in Susser Petroleum
Partners was completed in September 2012, Susser has completed sale leaseback transactions for a total of 38
newly built stores at a cumulative cost of $152.7 million.
Total consolidated debt at year-end was $375.9 million. In December 2013, SUSP increased its revolving
credit facility from $250 million to $400 million while retaining the ability to increase it by another $100
million. Combined availability on our revolving credit facilities, after borrowings and letter of credit
commitments, was $543.1 million.
FourthQuarterFinancialandOperatingHighlights
Merchandise - Merchandise sales totaled $262.2 million in the fourth quarter of 2013, up 8.9 percent from a
year ago. Approximately $5.7 million of the increase came from stores that have been open a year or more,
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with the remainder from 29 stores that were opened during the last four quarters. Same-store merchandise
sales rose 2.4 percent, versus an increase of 5.8 percent in the fourth quarter of 2012. Sales from food service
and snacks were the biggest contributors of the sales growth.
Net merchandise margin as a percentage of sales was 34.4 percent, up from 34.1 percent a year ago.
Merchandise gross profit was $90.2 million, an increase of 9.7 percent from the fourth quarter of 2012. Gross
profit growth was led by $6.1 million contribution from new stores and by same-store increases from food
service and snacks.
Retail Fuel - Retail fuel volumes increased 12.3 percent from a year earlier to 237.3 million gallons. Average
gallons sold per store were 7.8 percent higher than a year ago, at approximately 32,100 gallons per week.
Retail fuel revenues totaled $756.8 million, up 5.4 percent from the fourth quarter of the previous year,
reflecting the increase in gallons sold, partly offset by a 21-cent-per-gallon decline in the average selling price
of motor fuel versus the fourth quarter of 2012.
Retail fuel gross margin averaged 14.6 cents per gallon, versus 21.1 cents per gallon a year earlier. After
deducting credit card expense, the net fuel margin was 9.3 cents per gallon for the fourth quarter, compared
with 15.6 cents per gallon in the prior-year period. Retail fuel gross profit was $34.7 million, down 22.3
percent year-over-year as a result of the lower margin per gallon, partly offset by higher volumes sold.
Wholesale Fuel - Susser's wholesale segment includes all of SUSP's operations plus the consignment sales and
transportation business that were not contributed to SUSP in the 2012 IPO. Wholesale fuel volumes sold to
third parties - which includes all gallons except those distributed to Susser's retail stores - were up 18.2 percent
from the fourth quarter of 2012 to 177.2 million gallons. Wholesale fuel revenues increased 16.1 percent year-
over-year to $505.0 million. This increase reflects the impact of the significantly higher volumes sold, partly
offset by a 5-cent-per-gallon sales price reduction compared with the fourth quarter of 2012.
Wholesale fuel gross margin from third parties was 6.3 cents per gallon, the same as the year-earlier quarter.
Wholesale fuel gross profit, including sales to Stripes, increased by 15.7 percent year-over-year to $18.3
million. The gross profit increase was primarily the result of the increase in gallons sold, including the impact
of the Gainesville Fuel acquisition for a full quarter.
FullYear2013FinancialandOperatingHighlights
For the full year 2013, Susser's same-store merchandise sales rose 3.0 percent. Consolidated revenues increased
5.8 percent to $6.2 billion, driven by increases in merchandise sales and retail and wholesale fuel revenues.
Merchandise sales totaled $1.1 billion, an increase of 9.2 percent from 2012. Merchandise margin was 33.9
percent, unchanged from the prior year.
Retail fuel margin was 16.9 cents per gallon for the full year, versus 21.8 cents in 2012. On a comparable basis
adjusting for the 3-cent-per-gallon mark-up that Stripes now pays to SUSP, average retail margin for 2012 was
19.6 cents and for the previous five years was 16.7 cents per gallon. After deducting credit card expense, 2013
net fuel margin was 11.4 cents per gallon, compared with 16.3 cents per gallon in 2012. Wholesale fuel margin
was 6.6 cents per gallon, versus 6.2 cents per gallon in the prior-year period.
Adjusted EBITDA(1) for the full year totaled $169.0 million, down 7.6 percent from 2012. Gross profit totaled
$644.2 million, an increase of 5.4 percent, due to approximately $32 million contribution from new stores
opened in the prior 12 months and the impact of increased merchandise and fuel volumes at existing stores and
wholesale third-party sales, partially offset by lower retail fuel margins which reduced gross profit by
Page 3
approximately $25 million.
Excluding the impact of a $16.7 million after-tax charge on early extinguishment of debt related to the
redemption of our 8.50 percent senior unsecured notes, in May 2013 and a $3.6 million deferred tax charge
related to the Gainesville Fuel acquisition and subsequent contribution to SUSP, full year 2013 adjusted net
income was $34.7 million, or $1.60 per diluted share. On a comparable basis, excluding the impact of a non-
cash deferred tax charge of $3.6 million related to the SUSP IPO in the third quarter of 2012, adjusted net
income for the full year 2012 was $50.3 million, or $2.36 per diluted share.
Reported net income for the full year 2013 was $14.3 million, or $0.66 per diluted share, versus reported net
income of $46.7 million, or $2.19 per diluted share in 2012. A reconciliation of reported to adjusted earnings is
provided later in this news release.
2014Guidance
The Company is providing the following initial 2014 full-year guidance, which includes the recent Sac-N-Pac
acquisition unless otherwise noted:
FY 2014
Guidance
FY 2013
Actual
Merchandise Same-Store Sales Growth 2.5%-5.0% 3.0%
Merchandise Margin, Net of Shortages 33.25%-34.25%33.9%
Retail Average Per-Store Gallons Growth 0.0%-3.0% 5.8%
Fuel Gross Profit Margins (cents / gallon):
Margin on Retail Gallons Sold (a) 15.0-18.0 16.9
Margin on Wholesale Gallons Sold to Third Parties (b) 5.5-7.0 6.6
Margin on Wholesale Gallons Sold to Retail Segment (c) approx 3 3.0
Rent Expense (millions) (f) $47-$49 $47.5
Depreciation, Amortization & Accretion Expense (millions)$70-$80 $61.4
Interest Expense (millions) (d) $13-$16 $21.5
New Retail Stores (e) 27-33 29
New Wholesale Dealer Sites (e) 28-45 32
Gross Capital Spending (millions) (f) $300-$350 $212.4
Effective Tax Rate (g) 27%-31% 26.8%
(a)
We report retail fuel margin before deducting credit card costs, which were approximately 5.3 cents per gallon for the fourth quarter and 5.5 cents per gallon
for the full year 2013. The Company has provided quarterly fuel margin history on its website. The average retail selling price per gallon of fuel was $3.19 for
the fourth quarter and $3.39 for the full year 2013.
(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)2013 interest expense excludes $26.2 million related to redemption of the $425 million 8.5% senior unsecured notes in May 2013.
(e)
Numbers for both years do not reflect Sac-N-Pac acquisition, or existing retail or wholesale store closures, which are typically lower volume locations than
new sites. During 2013 the Company closed eight retail stores and discontinued 20 wholesale sites.
(f)
Gross capital expenditures include announced acquisitions and purchase of intangibles. The Company does not provide guidance on potential acquisitions. 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.
(g)2013 effective tax rate excludes non-cash deferred tax charge related to the acquisition of Gainesville Fuel and contribution to SUSP.
(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.
Fourth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 fourth
quarter and full year 2013 results for both Susser Holdings Corporation and Susser Petroleum Partners LP. To
Page 4
participate in the call, dial 480-629-9818 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 March 5 by calling 303-590-3030 and using the access code 4665734#.
Susser Holdings Corporation is a third-generation family led business based in Corpus Christi, Texas that
operates 627 convenience stores in Texas, New Mexico and Oklahoma, with 580 under the Stripes® banner
and 47 under the Sac-N-Pac™ banner. Restaurant service is available in approximately 400 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 approximately 1.6 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; 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; inability to build or acquire and
successfully integrate new stores; volatility in crude oil and wholesale petroleum costs; increasing consumer
preferences for alternative motor fuels, or improvements in fuel efficiency; general economic, financial and
political conditions; 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; our ability to comply with federal and state regulations
including those related to alcohol, tobacco and environmental matters; 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.
Contacts:Susser Holdings Corporation
Mary Sullivan, Chief Financial Officer
(361) 884-2463, msullivan@susser.com
Page 5
Dennard-Lascar Associates, LLC
Anne Pearson, Senior Vice President
(210) 408-6321, apearson@dennardlascar.com
Financial statements follow
Susser Holdings Corporation
Consolidated Statements of Operations and Comprehensive Income
Three Months Ended Twelve Months Ended
December 30,
2012
December 29,
2013
December 30,
2012
December 29,
2013
(dollarsinthousands,exceptsharesandpershareamounts)
Revenues:
Merchandise sales $ 240,838 $ 262,207 $ 976,452 $ 1,066,022
Motor fuel sales 1,152,929 1,261,793 4,842,715 5,092,731
Other income 15,466 14,283 53,625 55,062
Total revenues 1,409,233 1,538,283 5,872,792 6,213,815
Cost of sales:
Merchandise 158,654 172,012 645,500 704,668
Motor fuel 1,092,454 1,208,000 4,611,075 4,860,678
Other 1,691 1,375 4,823 4,306
Total cost of sales 1,252,799 1,381,387 5,261,398 5,569,652
Gross profit 156,434 156,896 611,394 644,163
Operating expenses:
Personnel 46,135 52,354 180,042 208,018
General and administrative 12,752 14,970 48,796 54,722
Other operating 40,320 42,896 157,589 172,667
Rent 11,739 11,802 46,407 47,468
Loss on disposal of assets and impairment charge 205 709 694 2,216
Depreciation, amortization and accretion 13,135 16,560 51,434 61,368
Total operating expenses 124,286 139,291 484,962 546,459
Income from operations 32,148 17,605 126,432 97,704
Other income (expense):
Interest expense, net (9,939) (2,521) (41,019) (47,673)
Other miscellaneous (141) 173 (471) (287)
Total other expense, net (10,080) (2,348) (41,490) (47,960)
Income before income taxes 22,068 15,257 84,942 49,744
Income tax expense (7,196) (4,589) (33,645) (16,940)
Net income and comprehensive income 14,872 10,668 51,297 32,804
Less: Net income and comprehensive income attributable to noncontrolling interest 4,283 4,742 4,572 18,473
Net income and comprehensive income attributable to Susser Holdings Corporation$ 10,589 $ 5,926 $ 46,725 $ 14,331
Net income per share attributable to Susser Holdings Corporation:
Basic $ 0.51 $ 0.28 $ 2.25 $ 0.68
Diluted $ 0.49 $ 0.27 $ 2.19 $ 0.66
Weighted average shares outstanding:
Basic 20,903,840 21,245,452 20,727,985 21,156,867
Diluted 21,404,906 21,693,082 21,314,738 21,656,782
Susser Holdings Corporation
Consolidated Balance Sheets
December 30,
2012
December 29,
2013
(inthousandsexceptshares)
Assets
Current assets:
Cash and cash equivalents $ 286,232 $ 22,461
Accounts receivable, net of allowance for doubtful accounts of $707 at December 31, 2012, and $480 at December 29, 2013 105,874 139,146
Inventories, net 115,048 126,521
Other current assets 6,678 7,704
Page 6
Total current assets 513,832 295,832
Property and equipment, net 602,151 736,860
Other assets:
Marketable securities 148,264 25,952
Goodwill 244,398 254,285
Intangible assets, net 45,764 41,984
Other noncurrent assets 15,381 19,692
Total assets $ 1,569,790 $ 1,374,605
Liabilities and shareholders' equity
Current liabilities:
Accounts payable $ 171,545 $ 189,587
Accrued expenses and other current liabilities 63,834 64,571
Current maturities of long-term debt 36 535
Total current liabilities 235,415 254,693
Revolving line of credit 35,590 345,460
Long-term debt 571,649 29,874
Deferred tax liability, long-term portion 80,992 77,119
Other noncurrent liabilities 45,445 41,949
Total liabilities 969,091 749,095
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 as of December 30,
2012; 21,634,618 issued and 21,439,944 outstanding as of December 29, 2013
212 214
Additional paid-in capital 276,430 285,376
Treasury stock, common shares, at cost; 390,201 as of December 30, 2012; and 194,674 as of December 29, 2013 (8,068) (5,378)
Retained earnings 120,924 135,255
Total Susser Holdings Corporation shareholders' equity 389,498 415,467
Noncontrolling interest 211,201 210,043
Total shareholders' equity 600,699 625,510
Total liabilities and shareholders' equity $ 1,569,790 $ 1,374,605
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 Twelve Months Ended
December 30,
2012
December 29,
2013
December 30,
2012
December 29,
2013
(dollars in thousands, except per gallon items)
Revenue:
Merchandise sales $240,838 $262,207 $976,452 $1,066,022
Motor fuel – retail 718,112 756,797 2,995,840 3,171,066
Motor fuel – wholesale to third parties (3) 434,817 504,996 1,846,875 1,921,665
Other 15,466 14,283 53,625 55,062
Total revenue (3) $1,409,233 $1,538,283 $5,872,792 $6,213,815
Gross Profit:
Merchandise $82,184 $90,195 $330,952 $361,354
Motor fuel – retail (1) 44,627 34,664 186,041 158,370
Motor fuel – wholesale to third parties (2) 9,459 11,135 37,091 42,582
Motor fuel – wholesale to Stripes (2) 6,389 7,200 6,472 27,948
Other, including intercompany eliminations 13,775 13,702 50,838 53,909
Total gross profit $156,434 $156,896 $611,394 $644,163
Adjusted EBITDA (4):
Retail $33,239 $25,195 $154,205 $119,165
Wholesale 14,021 16,391 35,833 62,482
Other (1,771) (4,270) (7,141) (12,599)
Total Adjusted EBITDA $45,489 $37,316 $182,897 $169,048
Retail merchandise margin 34.1 % 34.4 % 33.9 % 33.9 %
Merchandise same store sales growth 5.8 % 2.4 % 6.6 % 3.0 %
Average per retail store per week:
Merchandise sales $33.6 $35.1 $34.5 $36.2
Motor fuel gallons sold 29.8 32.1 30.3 32.1
Motor fuel gallons sold:
Retail 211,258 237,293 853,163 936,232
Wholesale - third party 149,935 177,164 594,909 642,098
Average retail price of motor fuel per gallon$3.40 $3.19 $3.51 $3.39
Page 7
Motor fuel gross profit cents per gallon:
Retail (1) 21.1 ¢ 14.6 ¢ 21.8 ¢ 16.9 ¢
Wholesale - third party (2) 6.3 ¢ 6.3 ¢ 6.2 ¢ 6.6 ¢
Retail credit card cents per gallon 5.5 ¢ 5.3 ¢ 5.5 ¢ 5.5 ¢
(1)
Effective September 25, 2012, the retail fuel gross profit 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. The retail fuel
margins reported for full year 2012 and 2013 have been reduced by 0.75 and 3.0 cents per gallon, respectively, for this profit margin.
(2)
The wholesale margin from third parties excludes sales and gross profit to the retail segment. Wholesale margin to Stripes reflects the markup of
approximately 3 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.
(3)
In 2013, the Company revised its presentation of fuel taxes on motor fuel sales on its consignment locations to present such fuel taxes gross in motor fuel
sales. Prior years' motor fuel sales have been adjusted to reflect this revision.
Reconciliations of Non-GAAP Measures to GAAP Measures
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 agreement and indentures.
We believe that 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.
The addition of net income attributable to noncontrolling interests means that our presentation of EBITDA,
Adjusted EBITDA and Adjusted EBITDAR includes 100% of the operations of SUSP, even though our
economic interest in SUSP, following its September 2012 initial public offering, is limited to our ownership of
a 50.2% limited partner interest in SUSP and all SUSP's incentive distribution rights (which entitle us to an
increasing percentage of distributions once SUSP distributes its minimum quarterly distribution). We believe
this presentation approach provides investors a better understanding of the performance of our core businesses
over time than one which excludes a portion of the EBITDA, Adjusted EBITDA or Adjusted EBITDAR
contributed by the operations of SUSP, over which we retain exclusive control. This presentation approach is
also consistent with that used for management incentive compensation targets and with the financial covenants
in our outstanding borrowing agreements. However, investors utilizing these non-GAAP measures for
valuation purposes, or otherwise in making an investment decision in Susser Holdings Corporation, should take
Page 8
into account the 49.8% ownership of SUSP by the public when considering the contribution by SUSP to Susser
Holdings Corporation's consolidated EBITDA, Adjusted EBITDA and Adjusted EBITDAR under this
presentation format.
EBITDA, Adjusted EBITDA and Adjusted EBITDAR are not recognized terms under GAAP and do not
purport to be alternatives to net income 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 facility or existing notes;
they do not reflect payments made or future requirements for income taxes;
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 titles measures of other companies.
The following table presents a reconciliation of net income attributable to Susser Holdings Corporation to
EBITDA, Adjusted EBITDA and Adjusted EBITDAR:
Three Months Ended Twelve Months Ended
December 30, 2012December 29, 2013December 30, 2012December 29, 2013
Net income attributable to Susser Holdings Corporation$ 10,589 $ 5,926 $ 46,725 $ 14,331
Net income attributable to noncontrolling interest 4,283 4,742 4,572 18,473
Depreciation, amortization and accretion 13,135 16,560 51,434 61,368
Interest expense, net 9,939 2,521 41,019 47,673
Income tax expense 7,196 4,589 33,645 16,940
EBITDA $ 45,142 $ 34,338 $ 177,395 $ 158,785
Non-cash stock-based compensation 1 2,442 4,337 7,760
Loss on disposal of assets and impairment charge 205 709 694 2,216
Other miscellaneous expense (income) 141 (173) 471 287
Adjusted EBITDA 45,489 37,316 182,897 169,048
Rent 11,739 11,802 46,407 47,468
Adjusted EBITDAR $ 57,228 $ 49,118 $ 229,304 $ 216,516
Net Income Attributable to Susser Holdings Corporation
Impact of Unusual Items
Twelve Months Ended
December 30,
2012
December 29,
2013
(dollars in thousands, except per share amounts)
After-Tax Income Diluted EPS After-Tax Income Diluted EPS
As Reported $ 46,725 $ 2.19 $ 14,331 $ 0.66
Non-cash deferred tax charge on SUSP IPO 3,616 0.17
May 2013 refinancing 16,744 0.77
Non-cash deferred tax charge on GFI Contribution— 3,609 0.17
As Adjusted $ 50,341 $ 2.36 $ 34,684 $ 1.60
SOURCE Susser Holdings Corporation
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