Susser Holdings Reports Second Quarter 2013
Results
8/7/2013
CORPUS CHRISTI, Texas, Aug. 7, 2013 /PRNewswire/ -- Susser Holdings Corporation (NYSE: SUSS) today
reported financial and operating results for the second quarter ended June 30, 2013. Results detailed below
include the results of Susser Petroleum Partners LP (NYSE: SUSP) unless otherwise noted.
Same-store merchandise sales increased 2.2 percent in the second quarter, compared with growth of 8.0 percent
in the second quarter of 2012. Average retail gallons sold per store increased 5.5 percent versus a year ago,
compared with growth of 8.0 percent in the second quarter of last year. Retail net merchandise margin was
34.3 percent in the most recent quarter, versus 34.1 percent a year ago.
Retail segment fuel margin per gallon before credit card expense averaged 18.2 cents, versus a record 32.4
cents a gallon in the second quarter of last year. The retail fuel margin for the second quarter has been reduced
by a 3-cent-per-gallon gross PROFIT 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 gross PROFIT mark-up on these gallons. Excluding the 3-cent-
per-gallon charge, second quarter 2013 retail fuel margin would have been 21.2 cents per gallon, compared
with the prior year's 32.4 cent margin and the previous five years' second-quarter average margin of 24.6 cents
a gallon.
Adjusted EBITDA
(1)
totaled $50.5 million, down 30.7 percent from the second quarter of last year.
Consolidated gross profit was $168.0 million, down 6.6 percent from a year earlier. Both metrics primarily
reflect the impact of lower retail and wholesale third party fuel margins, partly offset by higher merchandise
sales and fuel volumes sold.
Excluding the impact of second quarter debt refinancing charges totaling $26.2 million, net income attributable
to Susser Holdings was $12.5 million, or $0.59 per diluted share. On a reported basis, including the impact of
the debt refinancing charges, net loss attributable to Susser Holdings was $4.3 million, or $0.20 per diluted
share, versus net income of $29.8 million, or $1.40 per diluted share in the second quarter of 2012. Net income
attributable to holders of the 49.9 percent non-controlling interest in Susser Petroleum Partners was $4.8
million in the most recent quarter.
Second quarter consolidated revenues totaled nearly $1.6 billion, an increase of 3.1 percent year-over-year.
This increase was the result of an 8.5 percent increase in merchandise sales and a 4.1 percent increase in retail
fuel revenues, partly offset by a 1.6 percent decline in wholesale fuel revenues sold to third parties. The
positive revenue impact of higher fuel volumes sold in both segments was partially offset by lower selling
prices.
"We continue to be very bullish about the growth prospects for our markets, and we are pursuing additional
growth opportunities to continue our store development program in 2014 and 2015," said Sam L. Susser ,
President and Chief Executive Officer.
"As expected, we experienced slower growth in the second quarter due to significantly cooler spring
Page 1
temperatures, and also due to the Easter holiday occurring in the first quarter this year, versus the second
quarter of last year. We generated positive merchandise and fuel volume increases even though we were
cycling up against extremely strong 2012 results.
"We are very pleased to have completed the refinancing of our high-yield bonds on May 15. This will lower
our pre-tax annual interest expense by $30 million to $32 million and add approximately $0.90 to $0.95 a year
to our diluted EPS, based on CURRENT INTEREST RATES. The refinancing provides additional strength
and flexibility on our balance sheet, which will position us for accelerated growth over the next several years,"
he added.
New Convenience Store and Wholesale Dealer Update
Susser Holdings opened six new large-format Stripes® convenience stores during the second quarter and
closed one smaller store. Susser operated 567 Stripes stores as of June 30, 2013, of which 362 included an in-
store restaurant. Three additional stores have opened to date in the third quarter, and 16 stores are currently
under construction. The Company expects to open a total of 28 to 30 Stripes branded convenience stores this
year and continues to acquire additional land for future store development.
Ten new dealer sites were added in the wholesale segment last quarter, and six sites were discontinued, for a
total of 583 contract branded sites as of the end of the quarter. This consisted of 95 consignment locations and
488 other independent branded dealer contracts. The Company currently expects to add a total of 28 to 40 new
wholesale branded dealers and consignment sites and discontinue supply to 15 to 23 sites this year.
Financing Update
On May 15, as previously announced, the Company redeemed $425 million of 8.5% senior notes due 2016 at a
price of 104.25% of par. The redemption was funded by approximately $233 million drawn on a new $500
million revolving credit facility and with CASH on the balance sheet. In connection with the early retirement
of the notes, the Company recorded charges totaling $26.2 million, including an $18.1 million CASH call
premium and $8.1 million in non-cash write-off of unamortized costs.
The Company completed sale/leaseback transactions during the second quarter for a total of six new Stripes
convenience stores for $21.2 million. Two additional sale leasebacks have been completed to date in the third
quarter for $6.7 million. These sales by Susser Holdings to Susser Petroleum Partners bring the total number
of new-build store "dropdowns" to 22 since the initial public offering of units in the Partnership in September
2012. The total cost of the stores sold to Susser Petroleum Partners, including post-completion true-up, was
$89.7 million.
Second Quarter Financial and Operating Highlights
Merchandise - Merchandise sales totaled $274.7 million in the second quarter, an increase of $21.6 million, or
8.5 percent, from a year ago. Approximately $5.5 million of the increase came from stores that have been open
a year or more, with the balance from 28 stores that were opened during the last four quarters. Same-store
merchandise sales increased 2.2 percent, compared with an increase of 8.0 percent in the second quarter of last
year. Sales of food service, packaged drinks, smokeless tobacco and candy drove the majority of the growth.
Net merchandise margin as a percentage of sales was 34.3 percent, compared with 34.1 percent a year earlier.
Merchandise gross profit was $94.1 million, up 9.0 percent from the second quarter of 2012. Gross profit
growth was led by same-store dollar increases in food service, packaged drinks, candy and smokeless tobacco.
Page 2
Retail Fuel - Retail fuel volumes increased 9.7 percent versus a year ago to 236.1 million gallons. Average
gallons sold per store were 5.5 percent higher year-over-year, at approximately 32,500 gallons per week.
Retail fuel revenues totaled $805.9 million, an increase of 4.1 percent compared with a year ago, reflecting the
increase in gallons sold, partly offset by a 19-cent-per-gallon decline in the average selling price of motor fuel
versus a year ago.
Retail fuel gross margin averaged 18.2 cents per gallon, compared with 32.4 cents per gallon last year. (The
second quarter 2013 retail fuel margin was reduced by the 3-cent-per-gallon gross profit margin to SUSP that
was not deducted from the prior year period's fuel margin.) After deducting credit card expense, the net fuel
margin was 12.7 cents per gallon for the second quarter, versus a net 26.8 cents per gallon a year earlier. Retail
fuel gross profit was $43.0 million, down 38.4 percent due to the sizeable decline in margin per gallon, partly
offset by higher volumes sold.
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 - increased 1.7 percent from the
prior-year period to 156.2 million gallons. Wholesale fuel revenues declined 1.6 percent year-over-year to
$459.5 million. This revenue decline reflects the impact of a 10-cent-per-gallon reduction in the selling price
versus a year ago, partly offset by the increase in volumes sold.
Wholesale fuel gross margin from third parties was 6.4 cents per gallon, compared with 7.2 cents in the second
quarter of last year. Wholesale fuel gross profit increased by $6.0 million from a year ago - or 54.4 percent - to
$17.1 million. This increase was the result of the $7.0 million gross profit attributable to the previously
discussed 3-cent-per-gallon mark-up charged to the retail segment and additional gallons sold, partly offset by a
decrease in the gross profit per gallon from third parties.
Year-to-Date Financial and Operating Highlights
For the six months ended June 30, 2013, Susser's same-store merchandise sales grew 3.2 percent. Revenues
increased by 4.1 percent to $3.0 billion, driven by increases in merchandise sales and retail fuel revenue, partly
offset by a slight decrease in wholesale fuel revenue to third parties. Merchandise sales totaled $522.2 million,
up 9.0 percent from the year-earlier period. Merchandise margin was 33.7 percent, compared with 33.8 percent
for the first half of 2012.
Retail fuel margin was 17.4 cents per gallon year-to-date, compared with 23.0 cents for the comparable period
in 2012. Last year's margin was not reduced by the 3-cent-per-gallon profit margin to SUSP. After deducting
credit card expense, net fuel margin was 11.9 cents per gallon, compared with 17.5 cents per gallon in the first
half of 2012. Wholesale fuel margin was 6.2 cents per gallon, versus 6.1 cents per gallon in the prior-year
period.
Adjusted EBITDA
(1)
for the first half totaled $82.3 million, down 14.1 percent from the first half of 2012.
Gross profit was $315.0 million, up 4.1 percent, due to higher gross profit from merchandise and wholesale
fuel, partly offset by lower retail fuel gross profit. Reported net loss attributable to Susser Holdings - including
the impact of the debt refinancing charge - was $4.5 million, or $0.21 per diluted share, versus net income of
$29.3 million, or $1.38 per diluted share, for the first six months of last year. Excluding the non-recurring debt
refinancing charges, net income for the most recent six months was $12.3 million, or $0.58 per diluted share.
Page 3
2013 Guidance
The Company is adjusting its 2013 full-year guidance as follows:
New FY 2013
Guidance
Previous FY 2013
Guidance
First Half 2013
Actual
FY 2012
Actual
Merchandise Same-Store Sales Growth 2.5%-4.5% 3.0%-5.0% 3.2% 6.6%
Merchandise Margin, Net of Shortages 33.25%-34.25%33.25%-34.25% 33.7% 33.9
Retail Average Per-Store Gallons Growth 2.0%-5.0% 1.0%-4.0% 4.9% 5.8%
Fuel Gross Profit Margins (cents / gallon):
Margin on Retail Gallons Sold (a) 15.0-18.0 15.0-18.0 17.4 21.8
Margin on Wholesale Gallons Sold to Third Parties (b) 4.5-6.5 4.0-6.0 6.2 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 $23.9 $46.4
Depreciation, Amortization & Accretion Expense (millions)$58-$64 $58-$64 $29.3 $51.4
Interest Expense (millions) (d) $24-$27 $24-$27 $16.6 $41.0
New Retail Stores (e) 28-30 29-35 10 25
New Wholesale Dealer Sites (e) 28-40 25-40 15 39
Gross Capital Spending (millions) (f) $195-$215 $195-$215 $96.6 $179
Net Capital Spending (millions)
(f)
$185-$210 $185-$210 $96.5 $178
(a)
We report retail fuel margin before deducting credit card costs, which were approximately 5.5 cents per gallon both for the second quarter and the first half of
2013. The Company has provided quarterly fuel margin history on its website. The average retail selling price per gallon of fuel was $3.41 for the second
quarter and $3.46 for the first half 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 half of 2013 by approximately $13.6 million. The gross profit 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 prior to the SUSP initial public offering.
(c) Wholesale segment margin to Stripes retail stores reflects the gross profit 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% to LIBOR plus
200 basis points, or approximately 2.2 percent as of June 30, 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 half of
2013, the company closed 2 retail stores and discontinued 11 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.
Second 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 second
quarter 2013 results for both Susser Holdings Corporation and Susser Petroleum Partners LP. To participate in
the call, dial 480-629-9770 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 August 14 by calling 303-590-3030 and using
the pass code 4630288#.
Susser Holdings Corporation is a third-generation family led business based in Corpus Christi, Texas that
Page 4
operates approximately 570 convenience stores in Texas, New Mexico and Oklahoma under the Stripes banner.
Restaurant service is available in approximately 365 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.
Contacts: Susser Holdings Corporation
Mary Sullivan, Chief Financial Officer
(361) 884-2463, msullivan@susser.com
Dennard ? Lascar Associates, LLC
Anne Pearson, Senior Vice President
(210) 408-6321, apearson@dennardlascar.com
Page 5
Financialstatementsfollow
Susser Holdings Corporation
Consolidated Statements of Operations
Unaudited
Three Months Ended Six Months Ended
July 1,
2012
June 30,
2013
July 1,
2012
June 30,
2013
(dollars in thousands, except share and per share amounts)
Revenues:
Merchandise sales $ 253,125 $ 274,727 $ 479,195 $ 522,205
Motor fuel sales 1,240,858 1,265,309 2,416,064 2,490,803
Other income 12,524 13,853 25,635 27,229
Total revenues 1,506,507 1,553,889 2,920,894 3,040,237
Cost of sales:
Merchandise 166,765 180,596 317,108 346,241
Motor fuel 1,159,948 1,204,422 2,300,351 2,377,053
Other 861 689 1,895
Total cost of sales 1,326,713 1,385,879 2,618,148 2,725,189
Gross profit 179,794 168,010 302,746 315,048
Operating expenses:
Personnel 44,817 50,655 86,729 101,622
General and administrative 12,972 11,263 23,906 25,310
Other operating 39,524 44,656 76,080 84,703
Rent 11,317 12,164 23,089 23,904
Loss on disposal of assets and impairment charge 327 679 34 1,127
Depreciation, amortization and accretion 12,552 15,144 25,115 29,326
Total operating expenses 121,509 134,561 234,953 265,992
Income from operations 58,285 33,449 67,793 49,056
Other income (expense):
Interest expense, net (10,100) (32,667) (20,427) (42,772)
Other miscellaneous (163) (161) (205) (239)
Total other expense, net (10,263) (32,828) (20,632) (43,011)
Income before income taxes 48,022 621 47,161 6,045
Income tax expense (18,205) (47) (17,870) (1,595)
Net income and comprehensive income 29,817 574 29,291 4,450
Less: Net income attributable to noncontrolling interest 4,834 2 8,942
Net income (loss) attributable to Susser Holdings Corporation $ 29,817 $ (4,260) $ 29,289 $ (4,492)
Net income (loss) per share attributable to Susser Holdings Corporation:
Basic $ 1.44 $ (0.20) $ 1.42 $ (0.21)
Diluted $ 1.40 $ (0.20) $ 1.38 $ (0.21)
Weighted average shares outstanding:
Basic 20,673,372 21,138,278 20,641,293 21,103,250
Diluted 21,231,193 21,138,278 21,180,051 21,103,250
Susser Holdings Corporation
Consolidated Balance Sheets
December 30,
2012
June 30,
2013
unaudited
(in thousands)
Assets
Current assets:
Cash and cash equivalents $ 286,232 $29,388
Accounts receivable, net of allowance for doubtful accounts of $707 at December 31, 2012 and $519 at June 30, 2013 105,874 117,239
Inventories, net 115,048 130,595
Other current assets 6,678 19,367
Total current assets 513,832 296,589
Property and equipment, net 602,151 669,672
Other assets:
Marketable securities 148,264 95,893
Goodwill 244,398 244,398
Intangible assets, net 45,764 41,654
Page 6
Other noncurrent assets 15,381 16,382
Total assets $ 1,569,790 $1,364,588
Liabilities and shareholders' equity
Current liabilities:
Accounts payable $ 171,545 $187,247
Accrued expenses and other current liabilities 63,834 50,400
Current maturities of long-term debt 36 37
Total current liabilities 235,415 237,684
Revolving line of credit 35,590 304,870
Long-term debt 571,649 97,392
Deferred gain, long-term portion 28,548 27,405
Deferred tax liability, long-term portion 80,992 80,170
Other noncurrent liabilities 16,897 16,493
Total liabilities 969,091 764,014
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; 21,627,182 issued and 21,337,299 outstanding as of June 30, 2013
212 212
Additional paid-in capital 276,430 279,625
Treasury stock, common shares, at cost; 390,201 as of December 30, 2012; 289,883 as of June 30, 2013 (8,068) (6,279)
Retained earnings 120,924 116,432
Total Susser Holdings Corporation shareholders' equity 389,498 389,990
Noncontrolling interest 211,201 210,584
Total shareholders' equity 600,699 600,574
Total liabilities and shareholders' equity $ 1,569,790 $1,364,588
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 Six Months Ended
July 1,
2012
June 30,
2013
July 1,
2012
June 30,
2013
(dollars and gallons in thousands, except motor fuel pricing and gross profit per gallon)
Revenue:
Merchandise sales $ 253,125 $ 274,727 $ 479,195 $ 522,205
Motor fuel—retail 774,115 805,850 1,510,520 1,588,830
Motor fuel—wholesale 466,743 459,459 905,544 901,973
Other 12,524 13,853 25,635 27,229
Total revenue $ 1,506,507 $ 1,553,889 $ 2,920,894 $ 3,040,237
Gross profit:
Merchandise $ 86,360 $ 94,131 $ 162,087 $ 175,964
Motor fuel—retail (2) 69,802 42,987 97,526 79,997
Motor fuel—wholesale to third parties (3) 11,060 10,066 18,139 18,723
Motor fuel—wholesale to Stripes (3) 7,015 13,523
Other, including intercompany eliminations 12,572 13,811 24,994 26,841
Total gross profit $ 179,794 $ 168,010 $ 302,746 $ 315,048
Adjusted EBITDA (4):
Retail $ 66,388 $ 37,752 $ 85,650 $ 59,636
Wholesale 8,300 15,380 13,522 27,698
Other (1,821) (2,601) (3,355) (5,007)
Total Adjusted EBITDA $ 72,867 $ 50,531 $ 95,817 $ 82,327
Retail merchandise margin 34.1 % 34.3 % 33.8 % 33.7 %
Merchandise same-store sales growth (1) 8.0 % 2.2 % 7.4 % 3.2 %
Average per retail store per week:
Merchandise sales $ 36.0 $ 37.5 $ 34.1 $ 35.8
Motor fuel gallons sold 30.8 32.5 30.3 31.8
Motor fuel gallons sold:
Retail 215,261 236,075 423,398 459,552
Wholesale - third party 153,565 156,165 295,146 302,817
Average retail price of motor fuel per gallon$ 3.60 $ 3.41 $ 3.57 $ 3.46
Motor fuel gross profit cents per gallon:
Retail (2) 32.4 ¢ 18.2 ¢ 23.0 ¢ 17.4 ¢
Page 7
Wholesale - third party (3) 7.2 ¢ 6.4 ¢ 6.1 ¢ 6.2 ¢
Retail credit card cents per gallon 5.6 ¢ 5.5 ¢ 5.5 ¢ 5.5 ¢
(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. Excluding the
impact of this profit mark-up to SUSP for second quarter and first half 2013, the average retail margin would have been reported as 21.2 and 20.4 cents per
gallon, respectively, or three cents higher.
(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;
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
Page 8
the SUSP IPO, the amount of noncontrolling interest was not material.
The following table presents a reconciliation of net income (loss) attributable to Susser Holdings Corporation
to EBITDA, Adjusted EBITDA and Adjusted EBITDAR:
Three Months Ended Six Months Ended
July 1,
2012
June 30,
2013
July 1,
2012
June 30,
2013
(in thousands)
Net income (loss) attributable to Susser Holdings Corporation$ 29,817 $ (4,260) $29,289 $(4,492)
Net income attributable to noncontrolling interest 4,834 2 8,942
Depreciation, amortization and accretion 12,552 15,144 25,115 29,326
Interest expense, net 10,100 32,667 20,427 42,772
Income tax (benefit) expense 18,205 47 17,870 1,595
EBITDA 70,674 48,432 92,703 78,143
Non-cash stock-based compensation 1,703 1,259 2,875 2,818
Loss on disposal of assets and impairment charge 327 679 34 1,127
Other miscellaneous expense 163 161 205 239
Adjusted EBITDA 72,867 50,531 95,817 82,327
Rent 11,317 12,164 23,089 23,904
Adjusted EBITDAR $ 84,184 $ 62,695 $118,906 $106,231
SOURCE Susser Holdings Corporation
Page 9