Exhibit 99.1

ARKO Corp. Reports First Quarter 2024 Results

ARKO Corp. (Nasdaq: ARKO) (“ARKO” or the “Company”), a Fortune 500 company and one of the largest convenience store operators in the United States, today announced financial results for the first quarter ended March 31, 2024.

First Quarter 2024 Key Highlights (vs. Year-Ago Quarter)1,2

 

Net loss for the quarter was $0.6 million compared to $2.5 million.
Adjusted EBITDA for the quarter was $36.6 million compared to $47.5 million, with the variance driven by lower fuel contribution, regulatory state-wide elimination of Virginia gaming income, and increases in same store operating expenses.
Merchandise revenue increased 3.6% to $414.7 million.
Merchandise contribution increased by 9.7% to $134.9 million. Merchandise margin expanded approximately 180 basis points to 32.5%, supported by key marketing and merchandising initiatives.
Retail fuel contribution increased 5.5% to $92.9 million, with margin increasing to 36.4 cents per gallon from 35.4. Retail same store fuel gallons sold decreased 6.7% compared to a decrease in national OPIS average same-station fuel gallon volume of approximately 5.9%.

 

Other Key Highlights

As part of the Company’s focus on accelerating organic growth, it is in the process of developing a multi-year transformation plan, including the following elements:
o
More aggressive and targeted capital allocation toward strategic sub-segments of its retail stores to drive traffic and improve profitability.
o
Continued development and execution of a pilot program to improve customer experience and value proposition, in partnership with a nationally renowned consulting firm, with plans to expand refined offering across larger store network.
o
Fully leveraging the Company’s unique, multi-segment operating model through more active conversion of retail stores to dealer sites within its wholesale segment to improve profitability.
Additional details will be provided in further investor communications and will be detailed in full at the Company’s investor day that will take place later this year.
Continuation of the Company’s enhanced food program rollout, including its January 2024 new pizza program launch and the upcoming re-launch of its hot dog and roller grill program anchored by Nathan’s Famous as its new supplier of quality, 100% all beef hot dogs.
ARKO’s Board of Directors (“Board”) approved the expansion of the Company’s stock repurchase program from $100 million to $125 million.

 

1 See Use of Non-GAAP Measures below.

2 All figures for fuel contribution and fuel margin per gallon exclude the estimated fixed margin or fixed fee paid to the Company’s wholesale fuel distribution subsidiary, GPM Petroleum LP (“GPMP”) for the cost of fuel (intercompany charges by GPMP).


 

The Board declared a quarterly dividend of $0.03 per share of common stock to be paid on May 31, 2024 to stockholders of record as of May 20, 2024.

 

“Our first quarter results reflect our ongoing efforts to navigate the current macroeconomic environment, while aggressively positioning ARKO for future organic growth and improved profitability,” said Arie Kotler, Chairman, President and Chief Executive Officer of ARKO. “Over the past decade, we have gained significant scale through acquisitions and believe there is meaningful value embedded within our network of retail stores. We have a strong balance sheet and substantial available liquidity, which we plan to use to selectively and methodically increase our investments in our retail store base to drive traffic and improve profitability."

 

Mr. Kotler continued: “We firmly believe our current valuation does not fully reflect the underlying value of our business, which has grown to become one of the largest convenience store operators in the United States and a Fortune 500 company. Given this disconnect, I am pleased to announce that the Board has approved an expansion of our share repurchase program to $125 million, which we believe will support long-term value creation for our valued stockholders.”

 

First Quarter 2024 Segment Highlights

Retail

 

For the Three Months
Ended March 31,

 

 

2024

 

 

2023

 

 

(in thousands)

 

Fuel gallons sold

 

255,464

 

 

 

248,906

 

Same store fuel gallons sold decrease (%) 1

 

(6.7

%)

 

 

(5.8

%)

Fuel contribution 2

$

92,933

 

 

$

88,096

 

Fuel margin, cents per gallon 3

 

36.4

 

 

 

35.4

 

Same store fuel contribution 1,2

$

82,048

 

 

$

84,832

 

Same store merchandise sales (decrease) increase (%) 1

 

(4.1

%)

 

 

3.8

%

Same store merchandise sales excluding cigarettes (decrease)
  increase (%)
1

 

(3.0

%)

 

 

7.6

%

Merchandise revenue

$

414,655

 

 

$

400,408

 

Merchandise contribution 4

$

134,918

 

 

$

122,965

 

Merchandise margin 5

 

32.5

%

 

 

30.7

%

Same store merchandise contribution 1,4

$

118,676

 

 

$

117,814

 

Same store site operating expenses 1

$

172,619

 

 

$

167,112

 

 

 

 

 

 

 

1 Same store is a common metric used in the convenience store industry. We consider a store a same store beginning in the first quarter in which the store had a full quarter of activity in the prior year. Refer to Use of Non-GAAP Measures below for discussion of this measure.

 

 

 

 

 

 

 

2 Calculated as fuel revenue less fuel costs; excludes the estimated fixed margin or fixed fee paid to GPMP for the cost of fuel.

 

 

 

 

 

 

 

3 Calculated as fuel contribution divided by fuel gallons sold.

 

 

 

 

 

 

 

4 Calculated as merchandise revenue less merchandise costs.

 

 

 

 

 

 

 

5 Calculated as merchandise contribution divided by merchandise revenue.

 

 

 


 

 

Same store merchandise sales, excluding cigarettes, decreased 3.0% for the first quarter of 2024 compared to the first quarter of 2023. Same store merchandise sales decreased 4.1% for the first quarter of 2024 compared to the prior year period.

Total merchandise contribution for the first quarter of 2024 increased $12.0 million, or 9.7%, compared to the first quarter of 2023, due to $11.3 million of incremental merchandise contribution from acquisitions closed in 2023, as well as an increase in merchandise contribution at same stores of approximately $0.9 million.

Merchandise contribution at same stores increased in the first quarter of 2024 primarily due to higher contribution from other tobacco products and franchises partially offset by lower contribution from the Company’s core destination categories. Merchandise margin increased 180 basis points to 32.5% for the first quarter of 2024, supported by key marketing and merchandising initiatives.

For the first quarter of 2024, retail fuel contribution increased $4.8 million to $92.9 million compared to the prior year period, with resilient fuel margin capture of 36.4 cents per gallon, an increase of 1.0 cent per gallon for the first quarter of 2024 as compared to the first quarter of 2023. Same store fuel contribution was $82.0 million for the first quarter of 2024, compared to $84.8 million for the prior year quarter. This decrease in same store fuel contribution was offset by approximately $7.8 million of incremental fuel contribution from acquisitions closed in 2023.

Wholesale

 

For the Three Months
Ended March 31,

 

 

2024

 

 

2023

 

 

(in thousands)

 

Fuel gallons sold – fuel supply locations

 

186,731

 

 

 

182,427

 

Fuel gallons sold – consignment agent locations

 

37,504

 

 

 

37,962

 

Fuel contribution 1 – fuel supply locations

$

11,562

 

 

$

11,156

 

Fuel contribution 1 – consignment locations

$

9,168

 

 

$

10,039

 

Fuel margin, cents per gallon 2 – fuel supply locations

 

6.2

 

 

 

6.1

 

Fuel margin, cents per gallon 2 – consignment agent locations

 

24.4

 

 

 

26.4

 

 

 

 

 

 

 

1 Calculated as fuel revenue less fuel costs; excludes the estimated fixed margin or fixed fee paid to GPMP for the cost of fuel.

 

 

 

 

 

 

 

2 Calculated as fuel contribution divided by fuel gallons sold.

 

 

In wholesale, total fuel contribution was approximately $20.7 million for the first quarter of 2024. Fuel contribution from fuel supply locations increased by $0.4 million for the quarter compared to the prior year period, and fuel margin increased, primarily due to incremental contribution from acquisitions closed in 2023, which was partially offset by decreased prompt pay discounts related to lower fuel costs and lower volumes at comparable wholesale sites.

Fuel contribution from consignment agent locations decreased by $0.9 million for the first quarter of 2024 compared to the prior year period. Fuel margin also decreased for the quarter ended March 31, 2024 compared to the prior year period, primarily due to lower rack-to-retail margins and decreased

 


 

prompt pay discounts related to lower fuel costs, which was partially offset by the incremental contribution from acquisitions closed in 2023.

Fleet Fueling

 

For the Three Months
Ended March 31,

 

 

2024

 

 

2023

 

 

(in thousands)

 

Fuel gallons sold – proprietary cardlock locations

 

33,449

 

 

 

31,016

 

Fuel gallons sold – third-party cardlock locations

 

3,199

 

 

 

1,610

 

Fuel contribution 1 – proprietary cardlock locations

$

13,669

 

 

$

13,813

 

Fuel contribution 1 – third-party cardlock locations

$

247

 

 

$

22

 

Fuel margin, cents per gallon 2 – proprietary cardlock locations

 

40.9

 

 

 

44.5

 

Fuel margin, cents per gallon 2 – third-party cardlock locations

 

7.7

 

 

 

1.3

 

 

 

 

 

 

 

1 Calculated as fuel revenue less fuel costs; excludes the estimated fixed fee paid to GPMP for the cost of fuel.

 

 

 

 

 

 

 

2 Calculated as fuel contribution divided by fuel gallons sold.

 

 

Fuel contribution increased $0.1 million to approximately $13.9 million for the first quarter of 2024 compared to the prior year period. At proprietary cardlocks, fuel margin decreased by 3.6 cents per gallon as compared to the first quarter of 2023, when diesel margins were at significantly elevated levels. At third-party cardlock locations, fuel margin per gallon increased by 6.4 cents per gallon for the first quarter of 2024 compared to the first quarter of 2023. These changes were primarily due to higher volumes and the cardlocks acquired in the WTG Acquisition.

Site Operating Expenses

For the quarter ended March 31, 2024, convenience store operating expenses increased $22.5 million, or 12.8% as compared to the prior year period, primarily due to $18.5 million of incremental expenses related to acquisitions closed in 2023. Same store expenses were up $5.5 million from the prior year period, or 3.3%, with the increase related to hourly wage rate growth, accelerated repair and maintenance, and elevated worker’s compensation claims related to first quarter events. The increase in site operating expenses was partially offset by underperforming retail stores that were closed or converted to dealers.

Liquidity and Capital Expenditures

As of March 31, 2024, the Company’s total liquidity was approximately $764 million, consisting of approximately $184 million of cash and cash equivalents and approximately $579 million of availability under lines of credit. Outstanding debt was $885 million, resulting in net debt, excluding lease related financing liabilities, of approximately $700 million. The Company’s program agreement with affiliates of Oak Street, a division of Blue Owl Capital, provides for an aggregate up to $1.5 billion of capacity, almost all of which is currently available to the Company through September 30, 2024. Capital expenditures were approximately $29.2 million for the quarter ended March 31, 2024, including the purchase of certain fee properties, upgrades to fuel dispensers and other investments in stores.

Quarterly Dividend and Share Repurchase Program

 


 

The Company’s ability to return cash to its stockholders through its cash dividend program and share repurchase program is consistent with its capital allocation framework and reflects the Company’s confidence in the strength of its cash generation ability and financial position and its belief that the Company’s current share price does not fully reflect the underlying value of its business.

 

The Board declared a quarterly dividend of $0.03 per share of common stock to be paid on May 31, 2024 to stockholders of record as of May 20, 2024.

During the quarter, the Company repurchased approximately 4.8 million shares of common stock under the repurchase program for approximately $28.3 million, or an average share price of $5.89. Repurchases during the quarter included the repurchase of shares originally issued to the sellers in the Company’s TEG acquisition. There was approximately $0.7 million remaining under the share repurchase program as of March 31, 2024.

Subsequent to quarter-end, the Board approved the expansion of the Company’s share repurchase program to $125 million, up from $100 million.

 

Company-Operated Retail Store Count and Segment Update

The following tables present certain information regarding changes in the retail, wholesale and fleet fueling segments for the periods presented:

 

For the Three Months
Ended March 31,

 

Retail Segment

2024

 

 

2023

 

Number of sites at beginning of period

 

1,543

 

 

 

1,404

 

Acquired sites

 

 

 

 

135

 

Newly opened or reopened sites

 

1

 

 

 

1

 

Company-controlled sites converted to

 

 

 

 

 

 consignment or fuel supply locations, net

 

 

 

 

(5

)

Closed, relocated or divested sites

 

(4

)

 

 

(4

)

Number of sites at end of period

 

1,540

 

 

 

1,531

 

 

 

For the Three Months
Ended March 31,

 

Wholesale Segment 1

2024

 

 

2023

 

Number of sites at beginning of period

 

1,825

 

 

 

1,674

 

Acquired sites

 

 

 

 

192

 

Newly opened or reopened sites 2

 

9

 

 

 

7

 

Consignment or fuel supply locations converted

 

 

 

 

 

from Company-controlled or fleet fueling sites, net

 

 

 

 

5

 

Closed, relocated or divested sites

 

(18

)

 

 

(26

)

Number of sites at end of period

 

1,816

 

 

 

1,852

 

 

 

 

 

 

 

1 Excludes bulk and spot purchasers.

 

2 Includes all signed fuel supply agreements irrespective of fuel distribution commencement date.

 

 

 


 

 

For the Three Months
Ended March 31,

 

Fleet Fueling Segment

2024

 

 

2023

 

Number of sites at beginning of period

 

298

 

 

 

183

 

Closed, relocated or divested sites

 

(2

)

 

 

 

Number of sites at end of period

 

296

 

 

 

183

 

 

Full Year and Second Quarter 2024 Guidance Range

The Company currently expects second quarter 2024 Adjusted EBITDA in the range of $70 to $77 million, with an assumed range of average retail fuel margin from 37 to 40 cents per gallon. The Company is maintaining its full year total Company Adjusted EBITDA range of $250 to $290 million, with an assumed range of average retail fuel margin from 36 to 40 cents per gallon.

 

The Company is not providing guidance on net income at this time due to the volatility of certain required inputs that are not available without unreasonable efforts, including future fair value adjustments associated with its stock price, as well as depreciation and amortization related to its capital allocation as part of its focus on accelerating organic growth.

 

Conference Call and Webcast Details

The Company will host a conference call to discuss these results at 5:00 p.m. Eastern Time on May 7, 2024. Investors and analysts interested in participating in the live call can dial 800-267-6316 or 203-518-9783.

A simultaneous, live webcast will also be available on the Investor Relations section of the Company’s website at https://www.arkocorp.com/news-events/ir-calendar. The webcast will be archived for 30 days.

About ARKO Corp.

ARKO Corp. (Nasdaq: ARKO) is a Fortune 500 company that owns 100% of GPM Investments, LLC and is one of the largest operators of convenience stores and wholesalers of fuel in the United States. Based in Richmond, VA, we operate A Family of Community Brands that offer delicious, prepared foods, beer, snacks, candy, hot and cold beverages, and multiple popular quick serve restaurant brands. Our high value fas REWARDS® loyalty program offers exclusive savings on merchandise and gas. We operate in four reportable segments: retail, which includes convenience stores selling merchandise and fuel products to retail customers; wholesale, which supplies fuel to independent dealers and consignment agents; GPM Petroleum, which sells and supplies fuel to our retail and wholesale sites and charges a fixed fee, primarily to our fleet fueling sites; and fleet fueling, which includes the operation of proprietary and third-party cardlock locations, and issuance of proprietary fuel cards that provide customers access to a nationwide network of fueling sites. To learn more about GPM stores, visit: www.gpminvestments.com. To learn more about ARKO, visit: www.arkocorp.com.

Forward-Looking Statements

This document includes certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may address, among other

 


 

things, the Company’s expected financial and operational results and the related assumptions underlying its expected results. These forward-looking statements are distinguished by use of words such as “anticipate,” “aim,” “believe,” “continue,” “could,” “estimate,” “expect,” “guidance,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “will,” “would” and the negative of these terms, and similar references to future periods. These statements are based on management’s current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from these expectations due to, among other things, changes in economic, business and market conditions; the Company’s ability to maintain the listing of its common stock and warrants on the Nasdaq Stock Market; changes in its strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects and plans; expansion plans and opportunities; changes in the markets in which it competes; changes in applicable laws or regulations, including those relating to environmental matters; market conditions and global and economic factors beyond its control; and the outcome of any known or unknown litigation and regulatory proceedings. Detailed information about these factors and additional important factors can be found in the documents that the Company files with the Securities and Exchange Commission, such as Form 10-K, Form 10-Q and Form 8-K. Forward-looking statements speak only as of the date the statements were made. The Company does not undertake an obligation to update forward-looking information, except to the extent required by applicable law.

Use of Non-GAAP Measures

The Company discloses certain measures on a “same store basis,” which is a non-GAAP measure. Information disclosed on a “same store basis” excludes the results of any store that is not a “same store” for the applicable period. A store is considered a same store beginning in the first quarter in which the store had a full quarter of activity in the prior year. The Company believes that this information provides greater comparability regarding its ongoing operating performance. Neither this measure nor those described below should be considered an alternative to measurements presented in accordance with generally accepted accounting principles in the United States (“GAAP”).

The Company defines EBITDA as net income before net interest expense, income taxes, depreciation and amortization. Adjusted EBITDA further adjusts EBITDA by excluding the gain or loss on disposal of assets, impairment charges, acquisition costs, other non-cash items, and other unusual or non-recurring charges. Each of Operating Income, as adjusted, EBITDA and Adjusted EBITDA is a non-GAAP financial measure.

At the segment level, the Company defines Operating Income, as adjusted as operating income excluding the estimated fixed margin or fixed fee paid to GPMP for the cost of fuel.

The Company uses EBITDA and Adjusted EBITDA for operational and financial decision-making and believe these measures are useful in evaluating its performance because they eliminate certain items that it does not consider indicators of its operating performance. Additionally, the Company believes Operating Income, as adjusted provides greater comparability regarding its ongoing segment operating performance by eliminating intercompany charges at the segment level. EBITDA and Adjusted EBITDA are also used by many of its investors, securities analysts, and other interested parties in evaluating its operational and financial performance across reporting periods. The Company believes that the presentation of EBITDA and Adjusted EBITDA provides useful information to investors by allowing an

 


 

understanding of key measures that it uses internally for operational decision-making, budgeting, evaluating acquisition targets, and assessing its operating performance.

Operating Income, as adjusted, EBITDA and Adjusted EBITDA are not recognized terms under GAAP and should not be considered as a substitute for net income or any other financial measure presented in accordance with GAAP. These measures have limitations as analytical tools and should not be considered in isolation or as substitutes for analysis of its results as reported under GAAP. The Company strongly encourages investors to review its financial statements and publicly filed reports in their entirety and not to rely on any single financial measure.

Because non-GAAP financial measures are not standardized, same store measures, Operating Income, as adjusted, EBITDA and Adjusted EBITDA, as defined by the Company, may not be comparable to similarly titled measures reported by other companies. It therefore may not be possible to compare the Company’s use of these non-GAAP financial measures with those used by other companies.

 

Company Contact

Jordan Mann

ARKO Corp.

investors@gpminvestments.com

 

Investor Contact

Sean Mansouri, CFA or James Bonifer

Elevate IR

(720) 330-2829

ARKO@elevate-ir.com

 

 

 


 

 

Condensed Consolidated Statements of Operations

 

 

 

 

 

For the Three Months
Ended March 31,

 

 

2024

 

 

2023

 

 

(in thousands)

 

Revenues:

 

 

 

 

 

Fuel revenue

$

1,631,332

 

 

$

1,661,664

 

Merchandise revenue

 

414,655

 

 

 

400,408

 

Other revenues, net

 

26,467

 

 

 

26,424

 

Total revenues

 

2,072,454

 

 

 

2,088,496

 

Operating expenses:

 

 

 

 

 

Fuel costs

 

1,502,302

 

 

 

1,537,882

 

Merchandise costs

 

279,737

 

 

 

277,443

 

Site operating expenses

 

218,931

 

 

 

192,683

 

General and administrative expenses

 

42,158

 

 

 

40,416

 

Depreciation and amortization

 

31,716

 

 

 

28,399

 

Total operating expenses

 

2,074,844

 

 

 

2,076,823

 

Other expenses, net

 

2,476

 

 

 

2,720

 

Operating (loss) income

 

(4,866

)

 

 

8,953

 

Interest and other financial income

 

22,014

 

 

 

7,210

 

Interest and other financial expenses

 

(24,471

)

 

 

(20,812

)

Loss before income taxes

 

(7,323

)

 

 

(4,649

)

Income tax benefit

 

6,707

 

 

 

2,158

 

Income (loss) from equity investment

 

22

 

 

 

(36

)

Net loss

$

(594

)

 

$

(2,527

)

Less: Net income attributable to non-controlling interests

 

 

 

 

53

 

Net loss attributable to ARKO Corp.

$

(594

)

 

$

(2,580

)

Series A redeemable preferred stock dividends

 

(1,414

)

 

 

(1,418

)

Net loss attributable to common shareholders

$

(2,008

)

 

$

(3,998

)

Net loss per share attributable to common
  shareholders – basic and diluted

$

(0.02

)

 

$

(0.03

)

Weighted average shares outstanding:

 

 

 

 

 

Basic and diluted

 

117,275

 

 

 

120,253

 

 

 


 

 

Condensed Consolidated Balance Sheets

 

 

 

 

 

 

 

 

March 31, 2024

 

 

December 31, 2023

 

 

(in thousands)

 

Assets

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

$

184,480

 

 

$

218,120

 

Restricted cash

 

21,234

 

 

 

23,301

 

Short-term investments

 

4,588

 

 

 

3,892

 

Trade receivables, net

 

158,712

 

 

 

134,735

 

Inventory

 

250,405

 

 

 

250,593

 

Other current assets

 

116,144

 

 

 

118,472

 

Total current assets

 

735,563

 

 

 

749,113

 

Non-current assets:

 

 

 

 

 

Property and equipment, net

 

743,394

 

 

 

742,610

 

Right-of-use assets under operating leases

 

1,365,200

 

 

 

1,384,693

 

Right-of-use assets under financing leases, net

 

160,357

 

 

 

162,668

 

Goodwill

 

292,173

 

 

 

292,173

 

Intangible assets, net

 

207,416

 

 

 

214,552

 

Equity investment

 

2,907

 

 

 

2,885

 

Deferred tax asset

 

62,368

 

 

 

52,293

 

Other non-current assets

 

51,505

 

 

 

49,377

 

Total assets

$

3,620,883

 

 

$

3,650,364

 

Liabilities

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Long-term debt, current portion

$

17,297

 

 

$

16,792

 

Accounts payable

 

233,960

 

 

 

213,657

 

Other current liabilities

 

150,569

 

 

 

179,536

 

Operating leases, current portion

 

68,403

 

 

 

67,053

 

Financing leases, current portion

 

9,392

 

 

 

9,186

 

Total current liabilities

 

479,621

 

 

 

486,224

 

Non-current liabilities:

 

 

 

 

 

Long-term debt, net

 

867,661

 

 

 

828,647

 

Asset retirement obligation

 

85,063

 

 

 

84,710

 

Operating leases

 

1,378,302

 

 

 

1,395,032

 

Financing leases

 

212,174

 

 

 

213,032

 

Other non-current liabilities

 

236,822

 

 

 

266,602

 

Total liabilities

 

3,259,643

 

 

 

3,274,247

 

 

 

 

 

 

 

Series A redeemable preferred stock

 

100,000

 

 

 

100,000

 

 

 

 

 

 

 

Shareholders' equity:

 

 

 

 

 

Common stock

 

12

 

 

 

12

 

Treasury stock

 

(106,055

)

 

 

(74,134

)

Additional paid-in capital

 

267,671

 

 

 

245,007

 

Accumulated other comprehensive income

 

9,119

 

 

 

9,119

 

Retained earnings

 

90,493

 

 

 

96,097

 

Total shareholders' equity

 

261,240

 

 

 

276,101

 

Non-controlling interest

 

 

 

 

16

 

Total equity

 

261,240

 

 

 

276,117

 

Total liabilities, redeemable preferred stock and equity

$

3,620,883

 

 

$

3,650,364

 

 

 


 

 

 

Condensed Consolidated Statements of Cash Flows

 

 

 

 

 

 

 

 

For the Three Months
Ended March 31,

 

 

2024

 

 

2023

 

 

(in thousands)

 

Cash flows from operating activities:

 

 

 

 

 

Net loss

$

(594

)

 

$

(2,527

)

Adjustments to reconcile net loss to net cash provided by operating activities:

 

 

 

 

 

Depreciation and amortization

 

31,716

 

 

 

28,399

 

Deferred income taxes

 

(10,075

)

 

 

(10,230

)

Loss on disposal of assets and impairment charges

 

2,664

 

 

 

287

 

Foreign currency loss

 

27

 

 

 

34

 

Gain from issuance of shares as payment of deferred consideration
  related to business acquisition

 

(2,681

)

 

 

 

Gain from settlement related to business acquisition

 

(6,356

)

 

 

 

Amortization of deferred financing costs and debt discount

 

664

 

 

 

592

 

Amortization of deferred income

 

(1,946

)

 

 

(1,860

)

Accretion of asset retirement obligation

 

616

 

 

 

491

 

Non-cash rent

 

3,484

 

 

 

2,798

 

Charges to allowance for credit losses

 

327

 

 

 

283

 

(Income) loss from equity investment

 

(22

)

 

 

36

 

Share-based compensation

 

3,329

 

 

 

4,069

 

Fair value adjustment of financial assets and liabilities

 

(10,772

)

 

 

(4,228

)

Other operating activities, net

 

624

 

 

 

329

 

Changes in assets and liabilities:

 

 

 

 

 

Increase in trade receivables

 

(24,304

)

 

 

(11,182

)

Decrease (increase) in inventory

 

188

 

 

 

(2,845

)

Decrease in other assets

 

5,095

 

 

 

3,545

 

Increase in accounts payable

 

21,347

 

 

 

5,940

 

Decrease in other current liabilities

 

(4,152

)

 

 

(127

)

(Decrease) increase in asset retirement obligation

 

(55

)

 

 

67

 

Increase in non-current liabilities

 

3,631

 

 

 

2,012

 

Net cash provided by operating activities

 

12,755

 

 

 

15,883

 

Cash flows from investing activities:

 

 

 

 

 

Purchase of property and equipment

 

(29,228

)

 

 

(23,380

)

Proceeds from sale of property and equipment

 

2,039

 

 

 

208,436

 

Business acquisitions, net of cash

 

 

 

 

(338,342

)

Prepayment for acquisition

 

(1,000

)

 

 

 

Loans to equity investment, net

 

14

 

 

 

 

Net cash used in investing activities

 

(28,175

)

 

 

(153,286

)

Cash flows from financing activities:

 

 

 

 

 

Receipt of long-term debt, net

 

41,588

 

 

 

55,000

 

Repayment of debt

 

(6,635

)

 

 

(5,592

)

Principal payments on financing leases

 

(1,135

)

 

 

(1,418

)

Early settlement of deferred consideration related to business
  acquisition

 

(17,155

)

 

 

 

Proceeds from sale-leaseback

 

 

 

 

51,604

 

Common stock repurchased

 

(31,921

)

 

 

(2,310

)

 


 

Dividends paid on common stock

 

(3,596

)

 

 

(3,609

)

Dividends paid on redeemable preferred stock

 

(1,414

)

 

 

(1,418

)

Net cash (used in) provided by financing activities

 

(20,268

)

 

 

92,257

 

Net decrease in cash and cash equivalents and restricted cash

 

(35,688

)

 

 

(45,146

)

Effect of exchange rate on cash and cash equivalents and
  restricted cash

 

(19

)

 

 

(21

)

Cash and cash equivalents and restricted cash, beginning of period

 

241,421

 

 

 

316,769

 

Cash and cash equivalents and restricted cash, end of period

$

205,714

 

 

$

271,602

 

 

Supplemental Disclosure of Non-GAAP Financial Information

 

Reconciliation of EBITDA and Adjusted EBITDA

 

 

 

 

 

 

 

 

For the Three Months
Ended March 31,

 

 

2024

 

 

2023

 

 

(in thousands)

 

Net loss

$

(594

)

 

$

(2,527

)

Interest and other financing expenses, net

 

2,457

 

 

 

13,602

 

Income tax benefit

 

(6,707

)

 

 

(2,158

)

Depreciation and amortization

 

31,716

 

 

 

28,399

 

EBITDA

 

26,872

 

 

 

37,316

 

Non-cash rent expense (a)

 

3,484

 

 

 

2,798

 

Acquisition costs (b)

 

680

 

 

 

3,576

 

Loss on disposal of assets and impairment charges (c)

 

2,664

 

 

 

287

 

Share-based compensation expense (d)

 

3,329

 

 

 

4,069

 

(Income) loss from equity investment (e)

 

(22

)

 

 

36

 

Fuel taxes received in arrears (f)

 

(565

)

 

 

 

Adjustment to contingent consideration (g)

 

18

 

 

 

(702

)

Other (h)

 

189

 

 

 

104

 

Adjusted EBITDA

$

36,649

 

 

$

47,484

 

 

 

 

 

 

 

(a) Eliminates the non-cash portion of rent, which reflects the extent to which our GAAP rent expense recognized exceeded (or was less than) our cash rent payments. The GAAP rent expense adjustment can vary depending on the terms of our lease portfolio, which has been impacted by our recent acquisitions. For newer leases, our rent expense recognized typically exceeds our cash rent payments, whereas, for more mature leases, rent expense recognized is typically less than our cash rent payments.

 

 

 

 

 

 

 

(b) Eliminates costs incurred that are directly attributable to business acquisitions and salaries of employees whose primary job function is to execute our acquisition strategy and facilitate integration of acquired operations.

 

 

 

 

 

 

 

(c) Eliminates the non-cash loss from the sale of property and equipment, the loss recognized upon the sale of related leased assets, and impairment charges on property and equipment and right-of-use assets related to closed and non-performing sites.

 

 

 

 

 

 

 

(d) Eliminates non-cash share-based compensation expense related to the equity incentive program in place to incentivize, retain, and motivate our employees, certain non-employees and members of the Board.

 

 

 

 

 

 

 

(e) Eliminates our share of (income) loss attributable to our unconsolidated equity investment.

 

 

 

 

 

 

 

(f) Eliminates the receipt of historical fuel tax amounts for multiple prior periods.

 

 

 

 

 

 

 

 


 

(g) Eliminates fair value adjustments to the contingent consideration owed to the seller for the 2020 Empire acquisition.

 

 

 

 

 

 

 

(h) Eliminates other unusual or non-recurring items that we do not consider to be meaningful in assessing operating performance.

 

 

Supplemental Disclosures of Segment Information

Retail Segment

 

For the Three Months
Ended March 31,

 

 

2024

 

 

2023

 

 

(in thousands)

 

Revenues:

 

 

 

 

 

Fuel revenue

$

824,428

 

 

$

843,473

 

Merchandise revenue

 

414,655

 

 

 

400,408

 

Other revenues, net

 

16,679

 

 

 

18,555

 

Total revenues

 

1,255,762

 

 

 

1,262,436

 

Operating expenses:

 

 

 

 

 

Fuel costs

 

744,241

 

 

 

767,808

 

Merchandise costs

 

279,737

 

 

 

277,443

 

Site operating expenses

 

198,017

 

 

 

175,554

 

Total operating expenses

 

1,221,995

 

 

 

1,220,805

 

Operating income

 

33,767

 

 

 

41,631

 

Intercompany charges by GPMP 1

 

12,746

 

 

 

12,431

 

Operating income, as adjusted

$

46,513

 

 

$

54,062

 

 

 

 

 

 

 

1 Represents the estimated fixed margin or fixed fee paid to GPMP for the cost of fuel.

 

 

The tables below shows financial information and certain key metrics of recent acquisitions in the Retail Segment that do not have (or have only partial) comparable information for the prior period.

 

 

For the Three Months Ended March 31, 2024

 

 

TEG 1

 

 

Uncle's
(WTG)
2

 

 

Speedy's 3

 

 

Total

 

 

(in thousands)

 

Date of Acquisition:

Mar 1, 2023

 

 

Jun 6, 2023

 

 

Aug 15, 2023

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

Fuel revenue

$

80,249

 

 

$

19,769

 

 

$

4,268

 

 

$

104,286

 

Merchandise revenue

 

34,127

 

 

 

9,147

 

 

 

2,265

 

 

 

45,539

 

Other revenues, net

 

1,293

 

 

 

228

 

 

 

52

 

 

 

1,573

 

Total revenues

 

115,669

 

 

 

29,144

 

 

 

6,585

 

 

 

151,398

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

Fuel costs

 

74,431

 

 

 

17,064

 

 

 

3,895

 

 

 

95,390

 

Merchandise costs

 

22,896

 

 

 

5,873

 

 

 

1,442

 

 

 

30,211

 

Site operating expenses

 

18,112

 

 

 

4,690

 

 

 

1,190

 

 

 

23,992

 

Total operating expenses

 

115,439

 

 

 

27,627

 

 

 

6,527

 

 

 

149,593

 

Operating income

 

230

 

 

 

1,517

 

 

 

58

 

 

 

1,805

 

Intercompany charges by GPMP 4

 

1,281

 

 

 

291

 

 

 

71

 

 

 

1,643

 

Operating income, as adjusted

$

1,511

 

 

$

1,808

 

 

$

129

 

 

$

3,448

 

 


 

Fuel gallons sold

 

25,616

 

 

 

5,821

 

 

 

1,416

 

 

 

32,853

 

Fuel contribution 5

$

7,099

 

 

$

2,996

 

 

$

444

 

 

$

10,539

 

Merchandise contribution 6

$

11,231

 

 

$

3,274

 

 

$

823

 

 

$

15,328

 

Merchandise margin 7

 

32.9

%

 

 

35.8

%

 

 

36.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1 Acquisition from Transit Energy Group and affiliates ("TEG"); includes only the retail stores acquired in the TEG acquisition.

 

 

 

 

 

 

 

 

 

 

 

 

 

2 Acquisition from WTG Fuels Holdings, LLC ("WTG"); includes only the retail stores acquired in the WTG acquisition.

 

 

 

 

 

 

 

 

 

 

 

 

 

3 Acquisition of seven Speedy's retail stores.

 

 

 

 

 

 

 

 

 

 

 

 

 

4 Represents the estimated fixed margin paid to GPMP for the cost of fuel.

 

 

 

 

 

 

 

 

 

 

 

 

 

5 Calculated as fuel revenue less fuel costs; excludes the estimated fixed margin paid to GPMP for the cost of fuel.

 

 

 

 

 

 

 

 

 

 

 

 

 

6 Calculated as merchandise revenue less merchandise costs.

 

 

 

 

 

 

 

 

 

 

 

 

 

7 Calculated as merchandise contribution divided by merchandise revenue.

 

 

Wholesale Segment

 

For the Three Months
Ended March 31,

 

 

2024

 

 

2023

 

 

(in thousands)

 

Revenues:

 

 

 

 

 

Fuel revenue

$

664,514

 

 

$

684,848

 

Other revenues, net

 

6,858

 

 

 

6,491

 

Total revenues

 

671,372

 

 

 

691,339

 

Operating expenses:

 

 

 

 

 

Fuel costs

 

655,113

 

 

 

674,691

 

Site operating expenses

 

9,299

 

 

 

9,098

 

Total operating expenses

 

664,412

 

 

 

683,789

 

Operating income

 

6,960

 

 

$

7,550

 

Intercompany charges by GPMP 1

 

11,329

 

 

 

11,038

 

Operating income, as adjusted

$

18,289

 

 

$

18,588

 

 

 

 

 

 

 

1 Represents the estimated fixed margin or fixed fee paid to GPMP for the cost of fuel.

 

 

The tables below shows financial information and certain key metrics of recent acquisitions in the Wholesale Segment that do not have (or have only partial) comparable information for prior period.

 


 

 

For the Three Months Ended March 31, 2024

 

 

TEG 1

 

 

WTG 2

 

 

Total

 

 

(in thousands)

 

Date of Acquisition:

Mar 1, 2023

 

 

Jun 6, 2023

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

Fuel revenue

$

80,952

 

 

$

3,084

 

 

$

84,036

 

Other revenues, net

 

758

 

 

 

15

 

 

 

773

 

Total revenues

 

81,710

 

 

 

3,099

 

 

 

84,809

 

Operating expenses:

 

 

 

 

 

 

 

 

Fuel costs

 

80,424

 

 

 

2,959

 

 

 

83,383

 

Site operating expenses

 

874

 

 

 

68

 

 

 

942

 

Total operating expenses

 

81,298

 

 

 

3,027

 

 

 

84,325

 

Operating income

 

412

 

 

 

72

 

 

 

484

 

Intercompany charges by GPMP 3

 

1,363

 

 

 

44

 

 

 

1,407

 

Operating income, as adjusted

$

1,775

 

 

$

116

 

 

$

1,891

 

Fuel gallons sold

 

27,448

 

 

 

871

 

 

 

28,319

 

 

 

 

 

 

 

 

 

 

1 Includes only the wholesale business acquired in the TEG acquisition.

 

 

 

 

 

 

 

 

 

 

2 Includes only the wholesale business acquired in the WTG acquisition.

 

 

 

3 Represents the estimated fixed margin paid to GPMP for the cost of fuel.

 

 

Fleet Fueling Segment

 

 

For the Three Months
Ended March 31,

 

 

2024

 

 

2023

 

 

(in thousands)

 

Revenues:

 

 

 

 

 

Fuel revenue

$

132,193

 

 

$

127,494

 

Other revenues, net

 

2,385

 

 

 

951

 

Total revenues

 

134,578

 

 

 

128,445

 

Operating expenses:

 

 

 

 

 

Fuel costs

 

120,058

 

 

 

115,231

 

Site operating expenses

 

6,543

 

 

 

4,790

 

Total operating expenses

 

126,601

 

 

 

120,021

 

Operating income

 

7,977

 

 

 

8,424

 

Intercompany charges by GPMP 1

 

1,781

 

 

 

1,572

 

Operating income, as adjusted

$

9,758

 

 

$

9,996

 

 

 

 

 

 

 

1 Represents the estimated fixed fee paid to GPMP for the cost of fuel.

 

 

The table below shows financial information and certain key metrics of recent acquisitions in the Fleet Fueling Segment that do not have comparable information for the prior period.

 

 


 

 

For the Three Months Ended March 31, 2024

 

 

WTG 1

 

 

(in thousands)

 

Date of Acquisition:

Jun 6, 2023

 

Revenues:

 

 

Fuel revenue

$

16,235

 

Other revenues, net

 

1,170

 

Total revenues

 

17,405

 

Operating expenses:

 

 

Fuel costs

 

14,738

 

Site operating expenses

 

1,111

 

Total operating expenses

 

15,849

 

Operating income

 

1,556

 

Intercompany charges by GPMP 2

 

232

 

Operating income, as adjusted

$

1,788

 

Fuel gallons sold

 

4,556

 

 

 

 

1 Includes only the fleet fueling business acquired in the WTG acquisition.

 

 

 

 

2 Represents the estimated fixed fee paid to GPMP for the cost of fuel.