Financial Data and Key Metrics Changes - Adjusted EBITDA for Q1 2022 was $50.1 million, an increase of 18.4% compared to the prior year period [8][22] - Total revenue, including fuel, was $389.3 million, a 2% increase from the prior year [19] - Net income improved to $2.3 million from a loss of $14.7 million in Q1 2021 [22] - Merchandise gross margin increased to 29.5%, up 210 basis points from the prior year [10][19] - Retail fuel margin increased to $37.50 per gallon from $32.10 in the prior year [19] Business Line Data and Key Metrics Changes - Same-store merchandise sales, excluding cigarettes, increased by 9.3% on a two-year basis [9] - Retail fuel gallons sold grew by 5.9% compared to the prior year [10] - Same-store fuel gross profit increased by $9.7 million, excluding intercompany charges [10] - Merchandise margin dollars increased by $9.7 million versus the prior year [19] Market Data and Key Metrics Changes - Same-store fuel volume decreased by 3.1% [19] - Customer count at a remodeled store increased by 50%, with gallons sold increasing by 112.7% [12] - Same-store sales, excluding cigarettes, increased by 94% at a specific remodeled store [12] Company Strategy and Development Direction - The company is expanding its offering of lower-priced items, such as pizza and fresh coffee, to cater to price-sensitive consumers [9][50] - Plans to open a total of 50 Savara franchises in 2022, with two opened in Q1 [11] - The company is committed to organic growth initiatives, including remodels and new store openings [10][14] - The acquisition of Quarles Petroleum is expected to close in Q2 or early Q3 2022, expanding operational segments [14][16] Management's Comments on Operating Environment and Future Outlook - Management noted that the current economic environment is characterized by increased price sensitivity due to inflation and rising fuel prices [9][50] - The company believes it is well-positioned for long-term success despite market challenges [24] - Management expressed confidence in the effectiveness of their loyalty program, which has nearly 600,000 opt-in members [13] Other Important Information - The company declared a quarterly dividend of $0.02 per share, payable on June 15, 2022 [23] - The company repurchased approximately $12 million worth of shares under its repurchase program [23] - Total liquidity as of March 31, 2022, was approximately $744 million [18] Q&A Session Summary Question: Can you provide more detail on the remodel referenced? - The remodel involved a full raise and rebuild of store 3894, increasing its size from 3,500 to approximately 5,600 square feet, and took less than a year to complete [27] Question: When will the pace of remodels increase? - The company plans to complete a total of nine remodels and is focusing on learning from recent results to increase the pace [30] Question: How have rising gas prices affected customer behavior? - Management observed that customers are making more frequent trips to fill gas due to higher prices, but this has not significantly impacted in-store sales [35] Question: How are same-store wages and credit card fees tracking? - Same-store credit card fees increased by about $3 million compared to Q1 2021, while personnel expenses were slightly below expectations [38][39] Question: What is the company's strategy regarding pricing in a price-sensitive environment? - The company is focusing on offering lower-priced items and adjusting its product mix to meet consumer needs during economic downturns [50][51]

Arko Corp. (NASDAQ:ARKO) Q3 2021 Results Conference Call November 10, 2021 10:00 AM ET Company Participants Chris Mandeville - Managing Director, IR Arie Kotler - Chairman, President, and CEO Don Bassell - CFO Conference Call Participants Bobby Griffin - Raymond James Mark Astrachan - Stifel Kelly Bania - BMO Capital Markets Operator Greetings. Welcome to Arko’s Third Quarter Fiscal Year 2021 Earnings Conference Call and Webcast. [Operator Instructions] Please note, this conference is being recorded. At thi ...

[PART I. FINANCIAL INFORMATION](index=5&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) Presents the unaudited condensed consolidated financial statements for the three and nine-month periods ended September 30, 2021 Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | Sep 30, 2021 | Dec 31, 2020 | | :--- | :--- | :--- | | Cash and cash equivalents | $275,185 | $293,666 | | Total current assets | $638,828 | $609,406 | | Goodwill | $188,636 | $173,937 | | Total assets | $2,808,430 | $2,739,809 | | Total current liabilities | $371,884 | $387,051 | | Long-term debt, net | $679,560 | $708,802 | | Total liabilities | $2,467,852 | $2,448,389 | | Total equity | $240,578 | $191,420 | Condensed Consolidated Statements of Operations Highlights (in thousands) | Metric | Q3 2021 | Q3 2020 | 9 Months 2021 | 9 Months 2020 | | :--- | :--- | :--- | :--- | :--- | | Total revenues | $2,035,023 | $960,078 | $5,429,193 | $2,674,233 | | Operating income | $54,723 | $32,114 | $113,718 | $71,840 | | Net income | $35,585 | $17,157 | $46,496 | $36,809 | | Net income attributable to ARKO Corp. | $35,534 | $9,688 | $46,317 | $21,127 | | Diluted EPS | $0.25 | $0.14 | $0.31 | $0.31 | Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Cash Flow Activity | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | | :--- | :--- | :--- | | Net cash provided by operating activities | $119,547 | $126,498 | | Net cash used in investing activities | ($105,187) | ($28,854) | | Net cash (used in) provided by financing activities | ($35,792) | $31,192 | | Net (decrease) increase in cash | ($21,432) | $128,836 | [Notes to Condensed Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail key accounting policies and significant events including acquisitions, debt refinancing, and a balance sheet revision - The Merger Transaction was accounted for as a **reverse recapitalization**, with Arko Holdings as the accounting acquirer[42](index=42&type=chunk)[43](index=43&type=chunk) - The Company acquired **60 ExpressStop convenience stores** for approximately **$86 million** in May 2021[55](index=55&type=chunk)[56](index=56&type=chunk) - The company conducted significant debt refinancing, including redeeming **$79 million in Series C Bonds** and later issuing **$450 million in Senior Notes**[67](index=67&type=chunk)[70](index=70&type=chunk)[78](index=78&type=chunk) - GPM established a **$1.0 billion standby real estate program** with Oak Street to facilitate future acquisitions[129](index=129&type=chunk) - The company acquired **36 Handy Mart convenience stores** for approximately **$112 million** in November 2021[134](index=134&type=chunk)[281](index=281&type=chunk) - The December 31, 2020 balance sheet was revised to reclassify warrants as liabilities, increasing total liabilities by **$26.5 million**[128](index=128&type=chunk)[131](index=131&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=33&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses significant performance growth driven by acquisitions, industry trends, and the company's strong liquidity position [Results of Operations](index=35&type=section&id=Results%20of%20Operations) Company results improved significantly due to acquisitions, with Q3 2021 revenue more than doubling to $2.04 billion Consolidated Results Summary (in thousands) | Metric | Q3 2021 | Q3 2020 | 9 Months 2021 | 9 Months 2020 | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $2,035,023 | $960,078 | $5,429,193 | $2,674,233 | | Operating Income | $54,723 | $32,114 | $113,718 | $71,840 | | Net Income | $35,585 | $17,157 | $46,496 | $36,809 | | Adjusted EBITDA* | $80,183 | $57,327 | $198,203 | $142,810 | Retail Segment Performance - Q3 2021 vs Q3 2020 | Metric | Q3 2021 | Q3 2020 | Change | | :--- | :--- | :--- | :--- | | Same store fuel gallons sold | -1.4% | -15.1% | N/A | | Fuel margin (cents per gallon) | 34.5¢ | 31.0¢ | +3.5¢ | | Same store merchandise sales | -1.3% | +5.0% | N/A | | Merchandise margin | 30.6% | 27.9% | +270 bps | - The Wholesale segment's fuel revenue surged to **$730.8 million** in Q3 2021 from $32.5 million in Q3 2020, almost entirely due to the Empire Acquisition[199](index=199&type=chunk) - The GPMP segment's operating income increased to **$24.6 million** in Q3 2021, driven by a higher fixed margin and increased fuel volume[207](index=207&type=chunk)[210](index=210&type=chunk) [Use of Non-GAAP Measures](index=47&type=section&id=Use%20of%20Non-GAAP%20Measures) The company utilizes non-GAAP measures like Adjusted EBITDA to evaluate performance, reporting $80.2 million for Q3 2021 Reconciliation of Net Income to Adjusted EBITDA (in thousands) | Line Item | Q3 2021 | Q3 2020 | 9 Months 2021 | 9 Months 2020 | | :--- | :--- | :--- | :--- | :--- | | **Net income** | **$35,585** | **$17,157** | **$46,496** | **$36,809** | | Interest, taxes, D&A | $41,254 | $31,104 | $138,873 | $84,652 | | **EBITDA** | **$76,839** | **$48,261** | **$185,369** | **$121,461** | | Adjustments* | $3,344 | $3,280 | $12,834 | $15,563 | | **Adjusted EBITDA** | **$80,183** | **$51,541** | **$198,203** | **$137,024** | [Liquidity and Capital Resources](index=50&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains a strong liquidity position of $551 million, enhanced by a new $450 million Senior Notes offering - As of September 30, 2021, the company had a liquidity position of approximately **$551 million**, including $275.2 million in cash[225](index=225&type=chunk) - Cash flow from operations for the first nine months of 2021 was **$119.5 million**, a decrease from $126.5 million in the prior year period[232](index=232&type=chunk) - In October 2021, the company issued **$450 million of 5.125% Senior Notes** to repay the Ares Credit Agreement and pay down other debt[226](index=226&type=chunk)[246](index=246&type=chunk) - Capital expenditures are focused on acquisitions and store upgrades, including **EMV compliance** for fuel dispensers[227](index=227&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=53&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to market risks from fuel price volatility and interest rates, though interest rate risk is now reduced - The company has limited exposure to commodity price risk but notes that **significant fuel price increases** can reduce consumer demand[248](index=248&type=chunk) - Following the October 2021 Senior Notes issuance, **variable-rate debt exposure was significantly reduced**[251](index=251&type=chunk) - The company is preparing for the **phase-out of LIBOR** and its credit agreements contain transition mechanisms[252](index=252&type=chunk) [Controls and Procedures](index=56&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of September 30, 2021 - Management concluded that the Company's disclosure controls and procedures were **effective** as of September 30, 2021[255](index=255&type=chunk) - **No material changes** occurred during the quarter that affected the Company's internal control over financial reporting[256](index=256&type=chunk) [PART II. OTHER INFORMATION](index=57&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=57&type=section&id=Item%201.%20Legal%20Proceedings) No material changes to legal proceedings were reported for the period - The company reports **no material changes** to its legal proceedings during the reporting period[258](index=258&type=chunk) [Risk Factors](index=57&type=section&id=Item%201A.%20Risk%20Factors) The company faces risks from supplier dependence, cybersecurity threats, data privacy laws, and potential vaccine mandates - The company depends on a few principal suppliers for fuel and merchandise, creating **supply disruption risk**[259](index=259&type=chunk)[260](index=260&type=chunk)[261](index=261&type=chunk) - The company is subject to payment-related risks, including **PCI-DSS compliance** and potential processing failures[261](index=261&type=chunk)[262](index=262&type=chunk) - A significant risk exists from **IT system disruptions or data security breaches** like ransomware or hacking[263](index=263&type=chunk)[264](index=264&type=chunk)[265](index=265&type=chunk) - The company faces risks from **evolving data privacy laws**, where non-compliance could lead to fines and litigation[266](index=266&type=chunk)[267](index=267&type=chunk) - The federal **COVID-19 vaccine mandate** could negatively impact employee retention and increase labor costs[278](index=278&type=chunk)[279](index=279&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=60&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities or use of proceeds were reported for the period [Defaults Upon Senior Securities](index=60&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities were reported for the period [Mine Safety Disclosures](index=60&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section is not applicable to the company's operations [Other Information](index=60&type=section&id=Item%205.%20Other%20Information) The company acquired 36 Handy Mart convenience stores in a subsequent event on November 9, 2021 - On November 9, 2021, the company completed the **Handy Mart Acquisition**, adding 36 convenience stores in North Carolina[281](index=281&type=chunk) - The total consideration for the Handy Mart transaction is approximately **$112 million**, utilizing its real estate partner[281](index=281&type=chunk)[282](index=282&type=chunk) [Exhibits](index=61&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including certifications and Inline XBRL data

Arko Corp. (NASDAQ:ARKO) Q2 2021 Earnings Conference Call August 12, 2021 10:00 AM ET Company Participants Chris Mandeville – Investor Relations-ICR Arie Kotler – Chairman, President and Chief Executive Officer Don Bassell – Chief Financial Officer Conference Call Participants Bobby Griffin – Raymond James Kelly Bania – BMO Capital Luke Lemoine – Capital One Securities Mark Astrachan – Stifel Operator Greetings, and welcome to Arko’s Second Quarter 2021 Earnings Conference Call. At this time, all participan ...