Core Insights - The article emphasizes the importance of value investing, highlighting the strategy of identifying undervalued companies in the market [2] - CrossAmerica Partners (CAPL) is presented as a strong candidate for value investors, currently holding a Zacks Rank of 2 (Buy) and an A for Value [3][6] Valuation Metrics - CAPL has a Price-to-Sales (P/S) ratio of 0.18, significantly lower than the industry average of 0.51, indicating potential undervaluation [4] - The Price-to-Cash Flow (P/CF) ratio for CAPL is 7.48, which is attractive compared to the industry's average of 8.03; CAPL's P/CF has fluctuated between 5.25 and 8.51 over the past year [5] Investment Outlook - The combination of CAPL's strong earnings outlook and favorable valuation metrics suggests that the stock is likely undervalued at present, making it an impressive value stock [6]

Core Insights - The article emphasizes the importance of value investing as a successful strategy across various market conditions, focusing on key valuation metrics to identify undervalued stocks [2][3] Company Analysis - CrossAmerica Partners (CAPL) is highlighted as a stock to watch, currently holding a Zacks Rank of 2 (Buy) and an A grade for Value, indicating it is among the highest-quality value stocks available [3] - CAPL has a Price-to-Sales (P/S) ratio of 0.18, significantly lower than its industry's average P/S of 0.53, suggesting it may be undervalued [4] - The company also has a Price-to-Cash Flow (P/CF) ratio of 7.69, which is attractive compared to the industry's average P/CF of 8.08, indicating a solid cash outlook [5] - Over the past year, CAPL's P/CF has fluctuated between a high of 8.67 and a low of 5.32, with a median of 7.18, further supporting the notion of its current undervaluation [5][6] - Overall, the combination of CAPL's valuation metrics and strong earnings outlook positions it as a compelling value stock at this time [6]

Group 1 - Momentum investing focuses on "buying high and selling higher" rather than traditional strategies of "buying low and selling high" [1] - Fast-moving trending stocks can be risky if their valuations exceed future growth potential, leading to potential losses for investors [2] - Investing in bargain stocks with recent price momentum may be a safer strategy, utilizing tools like the Zacks Momentum Style Score to identify such opportunities [3] Group 2 - CrossAmerica Partners (CAPL) has shown a price increase of 0.8% over the past four weeks, indicating growing investor interest [4] - CAPL has gained 1% over the past 12 weeks and has a beta of 1.5, suggesting it moves 50% more than the market [5] - CAPL holds a Momentum Score of A, indicating a favorable time to invest based on momentum [6] Group 3 - CAPL has received a Zacks Rank 2 (Buy) due to upward revisions in earnings estimates, which attract more investor interest [7] - The stock is trading at a Price-to-Sales ratio of 0.17, suggesting it is undervalued at 17 cents for each dollar of sales [7] - CAPL is positioned for significant growth potential while maintaining a reasonable valuation [8] Group 4 - There are additional stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, providing further investment opportunities [8] - Zacks offers over 45 Premium Screens tailored to different investing styles, aiding in stock selection [9]

Second Quarter 2024 Performance - Retail Segment gross profit increased by 16% to $76644 thousand[4] - Retail Segment operating income increased by 7% to $28013 thousand[4] - Retail Segment motor fuel gross profit increased by 10% to $39289 thousand[4] - Retail Segment merchandise gross profit increased by 23% to $29849 thousand[4] - Wholesale Segment gross profit decreased by 11% to $28118 thousand[4] - Wholesale Segment operating income decreased by 4% to $20924 thousand[4] - Wholesale Segment motor fuel gross profit decreased by 7% to $16639 thousand[4] Financial Highlights - Net income decreased by 15% to $12424 thousand[6] - Adjusted EBITDA increased by 1% to $42570 thousand[6] - Distributable Cash Flow decreased by 14% to $26051 thousand[6] - Capital expenditures for the second quarter were $5300 thousand, including $3400 thousand of growth capex[7]

[Commonly Used Defined Terms](index=3&type=section&id=COMMONLY%20USED%20DEFINED%20TERMS) This section defines terms used throughout the report, including company-specific (CrossAmerica Partners LP, Topper Group) and industry-standard (EBITDA, DTW, SOFR) terminology, ensuring clarity - Definitions for the company, affiliates, and industry terms are provided for clear understanding[3](index=3&type=chunk)[4](index=4&type=chunk)[5](index=5&type=chunk)[6](index=6&type=chunk)[7](index=7&type=chunk)[8](index=8&type=chunk)[9](index=9&type=chunk)[10](index=10&type=chunk) [PART I - FINANCIAL INFORMATION](index=6&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) This section presents the company's unaudited consolidated financial statements and management's discussion and analysis for the period ended June 30, 2024 [ITEM 1. FINANCIAL STATEMENTS](index=6&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) This section includes CrossAmerica Partners LP's unaudited consolidated financial statements for June 30, 2024, providing detailed financial position and operating results [Consolidated Balance Sheets](index=6&type=section&id=CONSOLIDATED%20BALANCE%20SHEETS) As of June 30, 2024, total assets slightly decreased, total liabilities increased, and total equity shifted from positive to negative | Indicator | June 30, 2024 (thousand dollars) | December 31, 2023 (thousand dollars) | Change (thousand dollars) | Change (%) | | :----------------------------------- | :--------------------- | :---------------------- | :------------ | :----------- | | **Assets** | | | | | | Cash and cash equivalents | 5,490 | 4,990 | 500 | 10.02 | | Accounts receivable, net | 38,931 | 31,185 | 7,746 | 24.84 | | Inventory | 63,583 | 52,344 | 11,239 | 21.47 | | Assets held for sale | 2,486 | 400 | 2,086 | 521.50 | | Total current assets | 125,555 | 108,522 | 17,033 | 15.70 | | Property and equipment, net | 685,306 | 705,217 | (19,911) | (2.82) | | Intangible assets, net | 85,819 | 95,261 | (9,442) | (9.91) | | Goodwill | 99,409 | 99,409 | 0 | 0.00 | | Total assets | 1,164,673 | 1,181,682 | (17,009) | (1.44) | | **Liabilities** | | | | | | Total current liabilities | 165,393 | 161,096 | 4,297 | 2.67 | | Debt and finance lease obligations, less current portion | 786,674 | 753,880 | 32,794 | 4.35 | | Deferred tax liabilities, net | 7,877 | 12,919 | (5,042) | (39.03) | | Total liabilities | 1,172,852 | 1,150,931 | 21,921 | 1.90 | | **Equity** | | | | | | Common units | (47,893) | (2,392) | (45,501) | 1902.22 | | Accumulated other comprehensive income | 10,641 | 5,399 | 5,242 | 97.09 | | Total (deficit) equity | (37,252) | 3,007 | (40,259) | (1340.64) | [Consolidated Statements of Operations](index=7&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) For the three and six months ended June 30, 2024, operating and net income decreased, while interest expense significantly increased | Indicator (thousand dollars) | 3 Months 2024 | 3 Months 2023 | Change (3 Months) | Change (%) | 6 Months 2024 | 6 Months 2023 | Change (6 Months) | Change (%) | | :----------------------------------- | :---------- | :---------- | :----------- | :----------- | :---------- | :---------- | :----------- | :----------- | | Total revenue | 1,133,355 | 1,145,396 | (12,041) | (1.05) | 2,074,903 | 2,161,555 | (86,652) | (4.01) | | Cost of sales | 1,028,593 | 1,047,672 | (19,079) | (1.82) | 1,888,793 | 1,981,772 | (92,979) | (4.69) | | Gross profit | 104,762 | 97,724 | 7,038 | 7.20 | 186,110 | 179,783 | 6,327 | 3.52 | | Operating expenses | 55,825 | 49,798 | 6,027 | 12.10 | 107,853 | 95,421 | 12,432 | 13.03 | | Selling, general and administrative expenses | 7,892 | 7,475 | 417 | 5.58 | 14,730 | 13,214 | 1,516 | 11.47 | | Depreciation, amortization and accretion expense | 18,446 | 19,298 | (852) | (4.41) | 37,167 | 39,118 | (1,951) | (4.99) | | Gain (loss) on disposals and lease terminations, net | 5,578 | 6,700 | (1,122) | (16.75) | (11,228) | 4,933 | (16,161) | (327.61) | | Operating income | 28,177 | 27,853 | 324 | 1.16 | 15,132 | 36,963 | (21,831) | (59.06) | | Interest expense | (14,208) | (10,683) | (3,525) | 33.00 | (24,749) | (22,695) | (2,054) | 9.05 | | Income tax expense (benefit) | 1,703 | 2,797 | (1,094) | (39.11) | (4,094) | 1,135 | (5,229) | (460.71) | | Net income (loss) | 12,424 | 14,536 | (2,112) | (14.53) | (5,116) | 13,557 | (18,673) | (137.74) | | Net income (loss) attributable to limited partners | 11,752 | 13,921 | (2,169) | (15.58) | (6,445) | 12,341 | (18,786) | (152.22) | | Basic earnings (loss) per common unit | 0.31 | 0.37 | (0.06) | (16.22) | (0.17) | 0.33 | (0.50) | (151.52) | | Diluted earnings (loss) per common unit | 0.31 | 0.36 | (0.05) | (13.89) | (0.17) | 0.32 | (0.49) | (153.13) | [Consolidated Statements of Cash Flows](index=9&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) Net cash from operating activities decreased, while net cash used in investing activities significantly increased due to the Applegreen acquisition | Indicator (thousand dollars) | 6 Months 2024 | 6 Months 2023 | Change (thousand dollars) | Change (%) | | :----------------------------------- | :---------- | :---------- | :----------- | :----------- | | Net cash provided by operating activities | 34,723 | 47,263 | (12,540) | (26.53) | | Net cash used in investing activities | (26,114) | (6,688) | (19,426) | 290.49 | | Net cash used in financing activities | (8,109) | (52,138) | 44,029 | (84.45) | | Net increase (decrease) in cash and cash equivalents | 500 | (11,563) | 12,063 | (104.32) | | Cash and cash equivalents at end of period | 5,490 | 4,491 | 999 | 22.24 | - Investing activities in H1 2024 included **$25.517 million** for lease termination and inventory for the Applegreen acquisition, with no comparable expense in H1 2023[16](index=16&type=chunk) - Financing activities in H1 2024 included **$70.013 million** net borrowings from the credit facility and **$36.5 million** repayments; in H1 2023, borrowings were **$205.9 million**, repayments were **$50.546 million**, and **$158.98 million** of term loan was repaid[16](index=16&type=chunk) [Consolidated Statements of Equity and Comprehensive Income](index=10&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20EQUITY%20AND%20COMPREHENSIVE%20INCOME) Total equity shifted from positive to negative due to net loss and distributions, while AOCI increased from unrealized gains on interest rate swaps | Indicator (thousand dollars) | June 30, 2024 | December 31, 2023 | Change (thousand dollars) | Change (%) | | :----------------------------------- | :------------ | :------------- | :------------ | :----------- | | Equity attributable to common unitholders | (47,893) | (2,392) | (45,501) | 1902.22 | | Accumulated other comprehensive income (AOCI) | 10,641 | 5,399 | 5,242 | 97.09 | | Total (deficit) equity | (37,252) | 3,007 | (40,259) | (1340.64) | | Net income (loss) (six months) | (5,116) | 13,557 | (18,673) | (137.74) | | Unrealized gain on interest rate swap contracts (six months) | 3,185 | 9,898 | (6,713) | (67.82) | | Realized gain on interest rate swap contracts reclassified to interest expense (six months) | (1,941) | (4,322) | 2,381 | (55.09) | | Distributions paid (six months) | (20,029) | (19,980) | (49) | 0.25 | [Condensed Notes to Consolidated Financial Statements](index=11&type=section&id=CONDENSED%20NOTES%20TO%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) This section provides detailed notes to the consolidated financial statements, covering business description, accounting policies, recent acquisitions, debt, and segment reporting [Note 1. Description of Business and Other Disclosures](index=11&type=section&id=Note%201.%20DESCRIPTION%20OF%20BUSINESS%20AND%20OTHER%20DISCLOSURES) The company primarily engages in wholesale fuel distribution, retail site leasing, retail fuel sales, and convenience store operations, with seasonal sales and concentration risks - Company operations include wholesale distribution of motor fuel; owning or leasing retail fuel distribution sites and generating rental income; retail sales of motor fuel to end customers through commission agents and company-operated sites; and operating retail sites, including selling convenience merchandise to end customers[19](index=19&type=chunk) - Business is seasonal, with sales volumes typically highest in the **second and third quarters (summer)** and lowest in the **first and fourth quarters (winter)**[21](index=21&type=chunk) Concentration Risk Categories | Concentration Risk Category | H1 2024 | H1 2023 | | :-------------------------- | :----------- | :----------- | | Fuel procurement sources | 81% from 4 suppliers | 80% from 4 suppliers | | Fuel transporters | 23% from 2 transporters | 23% from 2 transporters | | Rental income sources | 18% from 5 multi-site operators | 29% from 5 multi-site operators | | Merchandise procurement sources | 49% from 1 supplier | 47% from 1 supplier | [Note 2. Applegreen Acquisition and Lease Termination](index=12&type=section&id=Note%202.%20APPLEGREEN%20ACQUISITION%20AND%20LEASE%20TERMINATION) On January 26, 2024, the company acquired assets at 59 Applegreen locations for $16.9 million, converting them to company-operated sites and incurring $25.5 million in cash payments - On January 26, 2024, the company entered into an agreement to acquire assets at **59 Applegreen Midwest, LLC and Applegreen Florida, LLC locations** for a total consideration of **$16.9 million**, completed by terminating existing lease agreements[26](index=26&type=chunk) - This acquisition converted these leased dealer sites to company-operated sites, with **31 conversions completed in Q1 2024** and the remainder in April 2024[26](index=26&type=chunk) Transaction Items | Transaction Item (thousand dollars) | Amount | | :----------------------------------- | :--- | | Lease termination payments | 16,983 | | Inventory purchases | 8,534 | | **Total cash payments** | **25,517** | | Inventory | 8,534 | | Equipment | 2,530 | | Lease termination loss | 14,453 | | Non-cash write-off of deferred rent income | 1,515 | | **Total lease termination loss** | **15,968** | [Note 3. Assets Held for Sale](index=14&type=section&id=Note%203.%20ASSETS%20HELD%20FOR%20SALE) As of June 30, 2024, the company classified 7 sites as held for sale, reflecting a strategy to divest inefficient assets, generating $6.5 million net gain in H1 2024 Assets Held for Sale | Indicator (thousand dollars) | June 30, 2024 | December 31, 2023 | Change (thousand dollars) | Change (%) | | :--------------------------- | :------------ | :------------- | :------------ | :----------- | | Assets held for sale | 2,486 | 400 | 2,086 | 521.50 | | Number of sites held for sale | 7 | 2 | 5 | 250.00 | | Number of sites sold (H1 2024) | 10 | - | - | - | | Proceeds from sales (H1 2024) | 11,900 | - | - | - | | Net gain from sales (H1 2024) | 6,500 | - | - | - | [Note 4. Inventory](index=14&type=section&id=Note%204.%20INVENTORY) Total inventory increased to $63.6 million as of June 30, 2024, primarily due to the Applegreen acquisition and conversion of leased dealer sites to company-operated sites Inventory by Category | Inventory Category (thousand dollars) | June 30, 2024 | December 31, 2023 | Change (thousand dollars) | Change (%) | | :----------------------------------- | :------------ | :------------- | :------------ | :----------- | | Merchandise | 34,471 | 26,081 | 8,390 | 32.17 | | Motor fuel | 29,112 | 26,263 | 2,849 | 10.85 | | **Total inventory** | **63,583** | **52,344** | **11,239** | **21.47** | - The increase in inventory is primarily due to the Applegreen acquisition and the conversion of other leased dealer sites to company-operated sites[29](index=29&type=chunk) [Note 5. Property and Equipment](index=14&type=section&id=Note%205.%20PROPERTY%20AND%20EQUIPMENT) Net property and equipment decreased to $685.3 million as of June 30, 2024, with a $0.5 million impairment charge related to sites classified as held for sale Property and Equipment | Indicator (thousand dollars) | June 30, 2024 | December 31, 2023 | Change (thousand dollars) | Change (%) | | :--------------------------- | :------------ | :------------- | :------------ | :----------- | | Land | 322,485 | 326,571 | (4,086) | (1.25) | | Buildings and site improvements | 362,180 | 365,528 | (3,348) | (0.92) | | Leasehold improvements | 17,023 | 16,434 | 589 | 3.58 | | Equipment | 360,434 | 356,160 | 4,274 | 1.20 | | Construction in progress | 8,969 | 4,462 | 4,507 | 100.99 | | Property and equipment, at cost | 1,071,091 | 1,069,155 | 1,936 | 0.18 | | Accumulated depreciation and amortization | (385,785) | (363,938) | (21,847) | 6.00 | | **Property and equipment, net** | **685,306** | **705,217** | **(19,911)** | **(2.82)** | | Impairment expense (H1 2024) | 500 | 800 | (300) | (37.50) | [Note 6. Intangible Assets](index=16&type=section&id=Note%206.%20INTANGIBLE%20ASSETS) Net intangible assets decreased to $85.8 million as of June 30, 2024, primarily due to the amortization of wholesale fuel supply contracts/rights Intangible Assets | Intangible Asset Category (thousand dollars) | June 30, 2024 Net Book Value | December 31, 2023 Net Book Value | Change (thousand dollars) | Change (%) | | :----------------------------------- | :---------------------- | :----------------------- | :------------ | :----------- | | Wholesale fuel supply contracts/rights | 84,363 | 93,787 | (9,424) | (10.05) | | Trademarks/licenses | 1,319 | 1,317 | 2 | 0.15 | | Non-compete agreements | 137 | 157 | (20) | (12.74) | | **Total intangible assets** | **85,819** | **95,261** | **(9,442)** | **(9.91)** | [Note 7. Debt](index=16&type=section&id=Note%207.%20DEBT) Total debt and finance lease obligations were $799 million as of June 30, 2024, primarily from the $925 million CAPL Credit Facility, with $111 million available capacity Debt by Category | Debt Category (thousand dollars) | June 30, 2024 | December 31, 2023 | Change (thousand dollars) | Change (%) | | :----------------------------------- | :------------ | :------------- | :------------ | :----------- | | CAPL Credit Facility | 789,513 | 756,000 | 33,513 | 4.43 | | Finance lease obligations | 9,552 | 11,064 | (1,512) | (13.67) | | **Total debt and finance lease obligations** | **799,065** | **767,064** | **32,001** | **4.17** | | Current portion | 3,183 | 3,083 | 100 | 3.24 | | Non-current portion | 795,882 | 763,981 | 31,901 | 4.18 | | Deferred financing costs, net | 9,208 | 10,101 | (893) | (8.84) | | Non-current portion, less deferred financing costs | 786,674 | 753,880 | 32,794 | 4.35 | - The CAPL Credit Facility is a **$925 million** revolving credit facility maturing on **March 31, 2028**, secured by substantially all of the company's assets[32](index=32&type=chunk) - Considering interest rate swap agreements, the effective interest rate on the CAPL Credit Facility was **6.7%** as of June 30, 2024[33](index=33&type=chunk) - The company amended the CAPL Credit Facility agreement on **February 20, 2024**, to allow for the full add-back of lease termination expenses related to the Applegreen acquisition to EBITDA[35](index=35&type=chunk) - As of June 30, 2024, the company was in compliance with financial covenants under the CAPL Credit Facility, with **$111 million** available capacity[35](index=35&type=chunk) [Note 8. Interest Rate Swap Contracts](index=18&type=section&id=Note%208.%20INTEREST%20RATE%20SWAP%20CONTRACTS) The company uses interest rate swap contracts to fix SOFR-based borrowings, but the expiration of three favorable swaps on April 1, 2024, increased the effective interest rate - The company holds interest rate swap contracts to fix the interest rate on a portion of its SOFR-based borrowings under the CAPL Credit Facility, designated as cash flow hedges and expected to be highly effective[37](index=37&type=chunk) - On **April 1, 2024**, three swap contracts expired, leading to an increase in the effective interest rate on the CAPL Credit Facility since that date[37](index=37&type=chunk) Net Realized Gains on Interest Rate Swap Settlements | Indicator (thousand dollars) | 3 Months 2024 | 3 Months 2023 | 6 Months 2024 | 6 Months 2023 | | :--------------------------- | :---------- | :---------- | :---------- | :---------- | | Net realized gains on interest rate swap settlements | 1,900 | 4,300 | 7,100 | 7,400 | - The company estimates **$6.2 million** of gains will be reclassified from accumulated other comprehensive income to interest expense over the next 12 months[39](index=39&type=chunk) [Note 9. Operating Leases as Lessor](index=18&type=section&id=Note%209.%20OPERATING%20LEASES%20AS%20LESSOR) The Applegreen acquisition in H1 2024 terminated numerous operating leases as a lessor, resulting in deferred rent income write-offs, with future minimum lease payments totaling $117.5 million - In H1 2024, the company terminated a significant number of operating leases as a lessor through the Applegreen acquisition, resulting in deferred rent income write-offs[40](index=40&type=chunk) Future Minimum Lease Payments | Year | Future Minimum Lease Payments (thousand dollars) | | :--- | :----------------------------------- | | 2024 | 19,746 | | 2025 | 32,804 | | 2026 | 23,118 | | 2027 | 12,712 | | 2028 | 7,838 | | Thereafter | 21,273 | | **Total future minimum lease payments** | **117,491** | Deferred Rent Income | Indicator (thousand dollars) | June 30, 2024 | December 31, 2023 | | :--------------------------- | :------------ | :------------- | | Deferred rent income | 3,100 | 5,000 | [Note 10. Related-Party Transactions](index=20&type=section&id=Note%2010.%20RELATED-PARTY%20TRANSACTIONS) The company engages in various related-party transactions with Topper Group and its affiliates, impacting revenue, expenses, and cash flows, including fuel sales, leases, and fee reimbursements Related-Party Transactions | Transaction Type | 3 Months 2024 (thousand dollars) | 3 Months 2023 (thousand dollars) | 6 Months 2024 (thousand dollars) | 6 Months 2023 (thousand dollars) | | :------------------- | :------------------- | :------------------- | :------------------- | :------------------- | | TopStar fuel sales revenue | 11,900 | 13,200 | 22,500 | 24,900 | | Topper Group rent expense | 2,500 | 2,600 | 5,100 | 5,200 | | Omnibus agreement fees | 33,000 | 28,300 | 60,800 | 52,700 | | Topper Group common unit distributions | 7,700 | 7,700 | 15,400 | 15,300 | | Accretion of preferred member interest | 700 | 600 | 1,300 | 1,200 | | Maintenance and environmental costs | 700 | 600 | 1,700 | 1,300 | | Convenience store product purchases | 4,800 | 5,300 | 9,500 | 10,100 | | Office rent expense | 300 | 200 | 600 | 500 | [Note 11. Commitments and Contingencies](index=21&type=section&id=Note%2011.%20COMMITMENTS%20AND%20CONTINGENCIES) The company faces minimum purchase commitments, various litigation, and environmental liabilities, for which provisions are made and indemnification assets are held - Fuel supply agreements include minimum purchase requirements, with potential penalties or termination if not met; no significant penalties incurred in H1 2024 or 2023[50](index=50&type=chunk) - The company is subject to various lawsuits, claims, and other legal proceedings, which management believes will not have a material adverse effect on its consolidated financial position, results of operations, or cash flows[51](index=51&type=chunk) Environmental Liabilities and Indemnification Assets | Indicator (thousand dollars) | June 30, 2024 | December 31, 2023 | | :--------------------------- | :------------ | :------------- | | Environmental liabilities | 8,200 | 7,400 | | Indemnification assets | 5,800 | 5,300 | [Note 12. Fair Value Measurements](index=22&type=section&id=Note%2012.%20FAIR%20VALUE%20MEASUREMENTS) The company measures and reports certain financial and non-financial assets and liabilities using the U.S. GAAP three-level fair value hierarchy, with interest rate swaps as Level 2 and phantom units as Level 1 - Fair value of interest rate swap contracts is measured using the income approach, utilizing forward yield curves for future interest rate swap settlements, classified as **Level 2**[56](index=56&type=chunk) - Liabilities for unvested phantom units and phantom performance units are adjusted based on the market price of common units, classified as **Level 1**[56](index=56&type=chunk) - Fair values of accounts receivable, accounts payable, and the CAPL Credit Facility approximate their carrying values due to short maturities or frequent interest rate resets[57](index=57&type=chunk) [Note 13. Income Taxes](index=23&type=section&id=Note%2013.%20INCOME%20TAXES) As a limited partnership, the company is generally not subject to federal and state income taxes, but its corporate subsidiaries are, resulting in a $4.1 million income tax benefit in H1 2024 - As a limited partnership, the company is not subject to federal and state income taxes, but its corporate subsidiaries are[58](index=58&type=chunk) Income Tax Expense (Benefit) | Indicator (thousand dollars) | 3 Months 2024 | 3 Months 2023 | 6 Months 2024 | 6 Months 2023 | | :--------------------------- | :---------- | :---------- | :---------- | :---------- | | Income tax expense (benefit) | 1,703 | 2,797 | (4,094) | 1,135 | - The effective tax rate differs from the federal and state statutory combined rates primarily because only LGWS and Joe's Kwik Marts are subject to income taxes[59](index=59&type=chunk) [Note 14. Net Income Per Common Unit](index=23&type=section&id=Note%2014.%20NET%20INCOME%20PER%20COMMON%20UNIT) Basic and diluted net income per common unit decreased for the three and six months ended June 30, 2024, turning into a loss for the six-month period, while distributions remained stable Net Income Per Common Unit and Distributions | Indicator | 3 Months 2024 | 3 Months 2023 | 6 Months 2024 | 6 Months 2023 | | :------------------- | :---------- | :---------- | :---------- | :---------- | | Net income (loss) attributable to limited partners (thousand dollars) | 11,752 | 13,921 | (6,445) | 12,341 | | Basic earnings (loss) per common unit | 0.31 | 0.37 | (0.17) | 0.33 | | Diluted earnings (loss) per common unit | 0.31 | 0.36 | (0.17) | 0.32 | | Distributions paid per common unit | 0.5250 | 0.5250 | 1.0500 | 1.0500 | | Distributions declared per common unit | 0.5250 | 0.5250 | 1.0500 | 1.0500 | - In H1 2024, **1,258,247** and **1,151,099** potential dilutive units related to preferred member interests were excluded from diluted earnings per unit calculation due to their anti-dilutive nature[60](index=60&type=chunk) - The Board of Directors may modify or revoke the company's cash distribution policy at its discretion, and the partnership agreement does not require the company to make any distributions[62](index=62&type=chunk) [Note 15. Segment Reporting](index=25&type=section&id=Note%2015.%20SEGMENT%20REPORTING) The company operates in wholesale and retail segments, with 95 leased dealer sites, including 59 from Applegreen acquisition, converted to retail company-operated or commission sites in H1 2024 - The company's operations are divided into two segments: **wholesale and retail**[63](index=63&type=chunk) - The wholesale segment includes wholesale distribution of motor fuel to leased dealers and independent dealers[63](index=63&type=chunk) - The retail segment includes retail sales of motor fuel through commission agents and company-operated sites, as well as convenience store merchandise sales[64](index=64&type=chunk) - In H1 2024, the company converted **95 leased dealer sites** (including **59 from the Applegreen acquisition**) from the wholesale segment to company-operated or commission sites in the retail segment[65](index=65&type=chunk) Segment Results | Indicator (thousand dollars) | Wholesale Segment (3 Months 2024) | Retail Segment (3 Months 2024) | Consolidated (3 Months 2024) | Wholesale Segment (3 Months 2023) | Retail Segment (3 Months 2023) | Consolidated (3 Months 2023) | | :--------------------------- | :--------------------- | :--------------------- | :----------------- | :--------------------- | :--------------------- | :----------------- | | Fuel sales revenue | 509,335 | 494,450 | 1,003,785 | 580,935 | 455,315 | 1,036,250 | | Merchandise sales revenue | — | 105,393 | 105,393 | — | 83,666 | 83,666 | | Rent revenue | 14,667 | 3,188 | 17,855 | 17,379 | 3,144 | 20,523 | | Other revenue | 1,074 | 5,248 | 6,322 | 1,164 | 3,793 | 4,957 | | **Total revenue** | **525,076** | **608,279** | **1,133,355** | **599,478** | **545,918** | **1,145,396** | | Operating income (loss) | 20,924 | 28,013 | 28,177 | 21,775 | 26,151 | 27,853 | | Indicator (thousand dollars) | Wholesale Segment (6 Months 2024) | Retail Segment (6 Months 2024) | Consolidated (6 Months 2024) | Wholesale Segment (6 Months 2023) | Retail Segment (6 Months 2023) | Consolidated (6 Months 2023) | | :--------------------------- | :--------------------- | :--------------------- | :----------------- | :--------------------- | :--------------------- | :----------------- | | Fuel sales revenue | 959,914 | 884,302 | 1,844,216 | 1,102,860 | 858,261 | 1,961,121 | | Merchandise sales revenue | — | 181,825 | 181,825 | — | 148,932 | 148,932 | | Rent revenue | 30,646 | 6,375 | 37,021 | 35,335 | 6,508 | 41,843 | | Other revenue | 1,994 | 9,847 | 11,841 | 2,411 | 7,248 | 9,659 | | **Total revenue** | **992,554** | **1,082,349** | **2,074,903** | **1,140,606** | **1,020,949** | **2,161,555** | | Operating income (loss) | 38,988 | 39,269 | 15,132 | 43,444 | 40,918 | 36,963 | [Note 16. Supplemental Cash Flow Information](index=28&type=section&id=Note%2016.%20SUPPLEMENTAL%20CASH%20FLOW%20INFORMATION) This note provides supplemental cash flow details, including changes in operating assets and liabilities, cash paid for interest and income taxes, and non-cash investing and financing activities Changes in Operating Assets and Liabilities | Changes in Operating Assets and Liabilities (thousand dollars) | 6 Months 2024 | 6 Months 2023 | | :------------------------------------------------- | :---------- | :---------- | | Accounts receivable | (7,832) | (3,554) | | Inventory | (3,045) | (4,658) | | Accounts payable | 3,829 | (350) | | Amounts due to related parties | (2,856) | 975 | | Net change in operating assets and liabilities | (5,079) | (4,546) | Supplemental Cash Flow Information | Supplemental Cash Flow Information (thousand dollars) | 2024 | 2023 | | :-------------------------------------------------- | :----- | :----- | | Cash paid for interest | 23,085 | 19,920 | | Cash paid (refunded) for income taxes, net | 96 | 1,619 | Non-Cash Investing and Financing Activities | Non-Cash Investing and Financing Activities (thousand dollars) | 6 Months 2024 | 6 Months 2023 | | :------------------------------------------------- | :---------- | :---------- | | Accrued capital expenditures | 3,547 | 1,485 | | Lease liabilities incurred from obtaining right-of-use assets | 7,774 | 5,790 | | Accretion of preferred member interest | 1,329 | 1,216 | [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=29&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) This section provides management's discussion and analysis of the company's financial condition and operating results, covering recent developments, profitability factors, and segment performance [Cautionary Statement Regarding Forward-Looking Statements](index=29&type=section&id=CAUTIONARY%20STATEMENT%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) This section warns investors that forward-looking statements involve risks and uncertainties, and actual results may differ materially due to various market, regulatory, and economic factors - Forward-looking statements involve risks and uncertainties, including future retail and wholesale gross margins, capital investment levels, fuel demand trends, market volatility, ability to integrate acquired businesses, environmental and tax regulations, and macroeconomic conditions[74](index=74&type=chunk) - Actual results may vary due to factors such as Topper Group's business strategies and conflicts of interest, cash flow availability, fuel price volatility, reduced demand, competition, environmental costs, debt covenant compliance, regulatory changes, technological advancements, global economic and political conditions, and natural disasters[75](index=75&type=chunk)[76](index=76&type=chunk) [Recent Developments](index=31&type=section&id=Recent%20Developments) Recent developments include the Applegreen acquisition of 59 sites for $16.9 million, converting them to company-operated, and the CAPL Credit Facility amendment to allow for related lease termination expense add-backs to EBITDA - On January 26, 2024, the company entered into the Applegreen acquisition agreement to acquire assets at **59 locations** for **$16.9 million**, converting them from leased dealer sites to company-operated sites[80](index=80&type=chunk) - The Applegreen acquisition resulted in **$25.5 million** in cash payments and a **$1.5 million** non-cash write-off of deferred rent income[80](index=80&type=chunk) - On February 20, 2024, the company amended the CAPL Credit Facility agreement to allow for the full add-back of lease termination expenses related to the Applegreen acquisition to EBITDA[81](index=81&type=chunk) [Significant Factors Affecting our Profitability](index=31&type=section&id=Significant%20Factors%20Affecting%20our%20Profitability) Key profitability factors include volatile crude oil and wholesale fuel prices, business seasonality, inflationary pressures on costs, and increased interest expenses due to expiring interest rate swaps - Crude oil and wholesale motor fuel prices are highly volatile, directly impacting the company's cost of sales and gross profit; approximately **56% of fuel sales** are priced at a fixed per-gallon rate, with the remainder being retail sales or variable market-priced DTW contracts[82](index=82&type=chunk) - The company's business is seasonal, with sales volumes typically highest in the **second and third quarters (summer)** and lowest in the **first and fourth quarters (winter)**[85](index=85&type=chunk) - Inflation negatively impacts the company's cost of sales and operating expenses through increased costs for fuel, merchandise, credit card fees, labor, and lease payments[86](index=86&type=chunk) - The company's effective interest rate increased in H1 2024 due to the expiration of three favorable interest rate swap agreements on **April 1, 2024**, and a general rise in interest rates[87](index=87&type=chunk) [Consolidated Income Statement Analysis](index=33&type=section&id=Consolidated%20Income%20Statement%20Analysis) This section analyzes the consolidated statements of operations, explaining significant changes in revenues and expenses across reporting periods to provide a basis for understanding overall financial performance | Indicator (thousand dollars) | 3 Months 2024 | 3 Months 2023 | 6 Months 2024 | 6 Months 2023 | | :----------------------------------- | :---------- | :---------- | :---------- | :---------- | | Total revenue | 1,133,355 | 1,145,396 | 2,074,903 | 2,161,555 | | Cost of sales | 1,028,593 | 1,047,672 | 1,888,793 | 1,981,772 | | Gross profit | 104,762 | 97,724 | 186,110 | 179,783 | | Operating expenses | 55,825 | 49,798 | 107,853 | 95,421 | | Selling, general and administrative expenses | 7,892 | 7,475 | 14,730 | 13,214 | | Depreciation, amortization and accretion expense | 18,446 | 19,298 | 37,167 | 39,118 | | Gain (loss) on disposals and lease terminations, net | 5,578 | 6,700 | (11,228) | 4,933 | | Operating income | 28,177 | 27,853 | 15,132 | 36,963 | | Interest expense | (14,208) | (10,683) | (24,749) | (22,695) | | Income tax expense (benefit) | 1,703 | 2,797 | (4,094) | 1,135 | | Net income (loss) | 12,424 | 14,536 | (5,116) | 13,557 | | Net income (loss) attributable to limited partners | 11,752 | 13,921 | (6,445) | 12,341 | [Results of Operations](index=33&type=section&id=Results%20of%20Operations) This section analyzes the company's operating results for Q2 and H1 2024 compared to prior periods, detailing changes in consolidated and segment-level revenues, costs, and profitability [Three Months Ended June 30, 2024 Compared to Three Months Ended June 30, 2023](index=34&type=section&id=Three%20Months%20Ended%20June%2030%2C%202024%20Compared%20to%20Three%20Months%20Ended%20June%2030%2C%202023) For the three months ended June 30, 2024, total revenue decreased by 1%, while operating income increased by 1%, driven by retail segment growth offsetting wholesale declines - Total revenue decreased by **$12 million (1%)**, while operating income increased by **$0.3 million (1%)**[92](index=92&type=chunk) - Wholesale segment revenue decreased by **$74 million (12%)**, primarily due to a **12% decline in gallons sold** from site conversions and net loss of independent dealer contracts[92](index=92&type=chunk) - Retail segment revenue increased by **$62 million (11%)**, driven by a **9% increase in gallons sold** from site conversions and a **$22 million (26%) increase in merchandise revenue**[92](index=92&type=chunk) - Gross profit increased by **$7 million (7%)**, primarily driven by increased merchandise and motor fuel gross profit in the retail segment[94](index=94&type=chunk) - Interest expense increased by **$3.5 million (33%)**, primarily due to the expiration of three favorable interest rate swap agreements on **April 1, 2024**, and a general rise in interest rates[96](index=96&type=chunk) [Six Months Ended June 30, 2024 Compared to Six Months Ended June 30, 2023](index=36&type=section&id=Six%20Months%20Ended%20June%2030%2C%202024%20Compared%20to%20Six%20Months%20Ended%20June%2030%2C%202023) For the six months ended June 30, 2024, total revenue decreased by 4%, and operating income significantly declined by 59%, impacted by wholesale segment contraction and higher interest expenses - Total revenue decreased by **$87 million (4%)**, while operating income decreased by **$22 million (59%)**[98](index=98&type=chunk) - Wholesale segment revenue decreased by **$148 million (13%)**, primarily due to a **10% decline in gallons sold** from site conversions and net loss of independent dealer contracts, and a **3% decrease in average wholesale selling price** due to crude oil price changes[98](index=98&type=chunk) - Retail segment revenue increased by **$61 million (6%)**, primarily due to a **6% increase in gallons sold** from site conversions and a **$33 million (22%) increase in merchandise revenue**[98](index=98&type=chunk) - Gross profit increased by **$6 million (4%)**, primarily driven by increased merchandise and motor fuel gross profit in the retail segment[100](index=100&type=chunk) - Interest expense increased by **$2.1 million (9%)**, primarily due to the expiration of three favorable interest rate swap agreements on **April 1, 2024**, and a general rise in interest rates, partially offset by a deferred financing cost write-off in Q1 2023[105](index=105&type=chunk) - Income tax benefit of **$4.1 million** compared to an income tax expense of **$1.1 million** in the prior year period, primarily due to losses generated by taxable subsidiaries[107](index=107&type=chunk) [Segment Results](index=38&type=section&id=Segment%20Results) This section analyzes the operating performance of the wholesale and retail segments, highlighting the impact of site conversions and changes in sales volumes and gross margins [Wholesale](index=38&type=section&id=Wholesale) Wholesale segment gross profit and operating income decreased in Q2 and H1 2024, primarily due to reduced fuel distribution volumes from site conversions and lost independent dealer contracts | Indicator | 3 Months 2024 | 3 Months 2023 | 6 Months 2024 | 6 Months 2023 | | :-------------------- | :---------- | :---------- | :---------- | :---------- | | Total fuel distribution sites (end of period) | 1,075 | 1,227 | 1,075 | 1,227 | | Average fuel distribution sites | 1,096 | 1,236 | 1,134 | 1,253 | | Gallons distributed (thousand gallons) | 192,111 | 218,131 | 376,136 | 419,992 | | Gross margin per gallon | 0.087 | 0.082 | 0.083 | 0.082 | | Fuel gross profit (thousand dollars) | 16,639 | 17,933 | 31,241 | 34,641 | | Rent gross profit (thousand dollars) | 10,405 | 12,602 | 21,844 | 25,857 | | Operating income (thousand dollars) | 20,924 | 21,775 | 38,988 | 43,444 | - Wholesale segment fuel gross profit decreased primarily due to a **12% reduction in gallons sold**, partially offset by a **5% increase in fuel gross margin per gallon**; the decline in gallons sold was due to leased dealer site conversions to company-operated and commission sites and net loss of independent dealer contracts[110](index=110&type=chunk) - Rent gross profit decreased by **17%**, primarily due to the conversion of leased dealer sites to company-operated and commission sites[112](index=112&type=chunk) [Retail](index=41&type=section&id=Retail) Retail segment gross profit and operating income increased in Q2 and H1 2024, driven by higher average retail site count, increased fuel sales volumes, and significant growth in merchandise gross profit | Indicator | 3 Months 2024 | 3 Months 2023 | 6 Months 2024 | 6 Months 2023 | | :-------------------- | :---------- | :---------- | :---------- | :---------- | | Company-operated retail sites (end of period) | 372 | 292 | 372 | 292 | | Commission agent sites (end of period) | 217 | 190 | 217 | 190 | | Total retail segment sites (end of period) | 589 | 482 | 589 | 482 | | Fuel gallons sold (thousand gallons) | 143,016 | 130,804 | 264,733 | 249,889 | | Fuel gross profit (thousand dollars) | 39,289 | 35,737 | 65,326 | 62,497 | | Merchandise gross profit (thousand dollars) | 29,849 | 24,232 | 51,292 | 42,355 | | Operating income (thousand dollars) | 28,013 | 26,151 | 39,269 | 40,918 | - Retail segment fuel gross profit increased by **10%**, primarily due to a **9% increase in gallons sold** resulting from an increase in average retail site count[118](index=118&type=chunk) - Merchandise gross profit increased by **23%**, and other revenue increased by **38%**, primarily due to an increase in average company-operated site count[118](index=118&type=chunk) - Operating expenses increased by **22%**, primarily due to a **28% increase in average company-operated site count**[119](index=119&type=chunk) [Non-GAAP Financial Measures](index=43&type=section&id=Non-GAAP%20Financial%20Measures) The company uses non-GAAP financial measures like EBITDA, Adjusted EBITDA, Distributable Cash Flow, and Distribution Coverage Ratio to assess financial performance and cash distribution capacity - The company uses non-GAAP financial measures such as **EBITDA, Adjusted EBITDA, Distributable Cash Flow, and Distribution Coverage Ratio**[122](index=122&type=chunk) - EBITDA and Adjusted EBITDA are used to assess the company's financial performance without regard to financing methods, capital structure, or income taxes, and its ability to incur and service debt and fund capital expenditures[123](index=123&type=chunk) - Distributable Cash Flow and Distribution Coverage Ratio are used to assess the company's ability to generate sufficient cash to make distributions to unit holders[123](index=123&type=chunk) Non-GAAP Financial Measures | Indicator (thousand dollars) | 3 Months 2024 | 3 Months 2023 | 6 Months 2024 | 6 Months 2023 | | :----------------------------------- | :---------- | :---------- | :---------- | :---------- | | Net income (loss) | 12,424 | 14,536 | (5,116) | 13,557 | | EBITDA | 46,781 | 47,314 | 52,706 | 76,505 | | Adjusted EBITDA | 42,570 | 42,198 | 66,138 | 73,936 | | Distributable cash flow | 26,051 | 30,395 | 37,782 | 49,527 | | Distribution coverage ratio | 1.30x | 1.53x | 0.95x | 1.24x | [Liquidity and Capital Resources](index=44&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity needs include operations, acquisitions, debt service, and distributions, met by operating cash flow, asset sales, credit facility borrowings, and potential equity/debt offerings [Liquidity](index=44&type=section&id=Liquidity) The company's primary liquidity needs are for operations, acquisitions, debt service, and distributions, with expected sources including operating cash, asset sales, and credit facility borrowings - The company's primary liquidity needs are to fund operations, acquisitions, debt service, and distributions to unit holders[126](index=126&type=chunk) - Expected sources of liquidity include cash generated from operations, proceeds from asset sales, borrowings under the CAPL Credit Facility, and potential issuances of equity and debt securities[126](index=126&type=chunk) - The company believes it has sufficient cash flow, borrowing capacity, and access to financing to meet its financial commitments, though subject to business and operating risks[128](index=128&type=chunk) [Cash Flows](index=45&type=section&id=Cash%20Flows) For the six months ended June 30, 2024, net cash from operating activities decreased, while net cash used in investing activities significantly increased due to the Applegreen acquisition Cash Flow Activities | Cash Flow Activities (thousand dollars) | 6 Months 2024 | 6 Months 2023 | | :------------------------------------ | :---------- | :---------- | | Net cash provided by operating activities | 34,723 | 47,263 | | Net cash used in investing activities | (26,114) | (6,688) | | Net cash used in financing activities | (8,109) | (52,138) | - Net cash provided by operating activities decreased by **$13 million**, primarily due to weaker Q1 2024 results and increased interest expense[130](index=130&type=chunk) - Net cash used in investing activities increased, primarily due to **$26 million** in lease termination payments and inventory purchases related to the Applegreen acquisition[131](index=131&type=chunk) - Net cash used in financing activities decreased, primarily due to **$34 million** in net borrowings from the credit facility (compared to **$4 million** net repayments in 2023) and **$7 million** in deferred financing costs paid in Q1 2023[132](index=132&type=chunk) [Distributions](index=45&type=section&id=Distributions) The company paid $40 million in distributions in H1 2024 and 2023, maintaining $0.5250 per common unit, with the Board retaining discretion to modify or revoke the policy Cash Distributions | Quarter End | Record Date | Payment Date | Cash Distribution Per Unit (dollars) | Cash Distributions (thousand dollars) | | :------------------- | :--------- | :--------- | :--------------------------- | :-------------------- | | December 31, 2023 | February 2, 2024 | February 9, 2024 | 0.5250 | 19,941 | | March 31, 2024 | May 3, 2024 | May 10, 2024 | 0.5250 | 19,964 | | June 30, 2024 | August 2, 2024 | August 9, 2024 | 0.5250 | 19,975 | - The Board of Directors may modify or revoke the company's cash distribution policy at its discretion, and the partnership agreement does not require the company to make any distributions[133](index=133&type=chunk) [Debt](index=45&type=section&id=Debt) As of June 30, 2024, total debt and finance lease obligations were $799 million, primarily from the CAPL Credit Facility, with an effective interest rate of 6.7% and $116 million available capacity as of August 2, 2024 Debt by Category | Debt Category (thousand dollars) | June 30, 2024 | | :----------------------------------- | :------------ | | CAPL Credit Facility | 789,513 | | Finance lease obligations | 9,552 | | **Total debt and finance lease obligations** | **799,065** | | Current portion | 3,183 | | Non-current portion | 795,882 | | Deferred financing costs, net | 9,208 | | Non-current portion, less deferred financing costs | 786,674 | - Considering interest rate swap agreements, the effective interest rate on the CAPL Credit Facility was **6.7%** as of June 30, 2024[135](index=135&type=chunk) - As of August 2, 2024, the available capacity under the CAPL Credit Facility was **$116 million**[135](index=135&type=chunk) [Capital Expenditures](index=47&type=section&id=Capital%20Expenditures) Total capital expenditures in H1 2024 were $36.9 million, significantly higher than H1 2023, driven by growth capital and Applegreen acquisition-related lease termination payments and inventory purchases - Capital expenditures are categorized as maintenance (to maintain long-term operating income or capacity), growth (to increase long-term operating income or capacity), and acquisition capital expenditures[136](index=136&type=chunk) Capital Expenditures by Category | Capital Expenditure Category (thousand dollars) | 6 Months 2024 | 6 Months 2023 | | :-------------------------------------------- | :---------- | :---------- | | Maintenance capital expenditures | 3,568 | 3,485 | | Growth capital expenditures | 7,843 | 7,843 | | Applegreen lease termination payments and inventory purchases | 25,517 | — | | **Total capital expenditures** | **36,928** | **11,328** | [Concentration Risks](index=47&type=section&id=Concentration%20Risks) The company faces concentration risks related to customers, fuel suppliers, fuel transporters, and merchandise suppliers, as detailed in Note 1 to the financial statements - The company is subject to concentration risks related to customers, fuel suppliers, fuel transporters, and merchandise suppliers[138](index=138&type=chunk) [Outlook](index=47&type=section&id=Outlook) The company's 2024 performance is expected to be influenced by crude oil price volatility, the Applegreen acquisition's business model shift, and increased interest expenses due to expiring interest rate swaps - 2024 performance is expected to be influenced by crude oil price volatility, the business model shift resulting from the Applegreen acquisition, and increased interest rates[139](index=139&type=chunk) - The Applegreen acquisition is expected to increase retail segment gross profit and operating expenses while reducing wholesale segment gross profit[139](index=139&type=chunk) - Due to the expiration of favorable interest rate swap agreements on **April 1, 2024**, interest expense in 2024 is expected to be higher than in 2023[139](index=139&type=chunk) - The company will continue to evaluate acquisition opportunities consistent with its strategy, but execution depends on market conditions, target availability, and financing capabilities[140](index=140&type=chunk) [New Accounting Policies](index=48&type=section&id=New%20Accounting%20Policies) No new accounting standards effective or adopted in this reporting period are expected to materially impact the financial statements; refer to Note 1 for segment reporting and income tax disclosures - No new accounting standards effective or adopted in this reporting period are expected to materially impact the company's financial statements[141](index=141&type=chunk) - Information regarding new accounting standards for segment reporting and income tax disclosures can be found in Note 1 to the financial statements[141](index=141&type=chunk) [Critical Accounting Policies and Estimates](index=48&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) No significant changes occurred in the company's critical accounting policies and estimates during this reporting period, remaining consistent with those disclosed in Form 10-K - No significant changes occurred in the company's critical accounting policies and estimates[142](index=142&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=48&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) No material changes in market risk since December 31, 2023, except for interest rate risk, with the CAPL Credit Facility's effective rate at 6.7% and a $3.9 million annual impact per 1% SOFR change [Interest Rate Risk](index=48&type=section&id=Interest%20Rate%20Risk) As of June 30, 2024, the CAPL Credit Facility had $789.5 million outstanding at a SOFR-based rate, with an effective rate of 6.7%, and a 1% SOFR change impacting annual interest expense by $3.9 million - As of June 30, 2024, the company's CAPL Credit Facility had **$789.5 million** outstanding, with interest rates based on SOFR plus an applicable margin[144](index=144&type=chunk) - Considering interest rate swap agreements, the effective interest rate on the CAPL Credit Facility was **6.7%** as of June 30, 2024[144](index=144&type=chunk) - A **one percentage point change in SOFR** would impact annual interest expense by approximately **$3.9 million**[144](index=144&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=48&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) As of June 30, 2024, management assessed and confirmed the effectiveness of disclosure controls and procedures, with no material changes to internal control over financial reporting - As of June 30, 2024, the company's disclosure controls and procedures were assessed as **effective**[145](index=145&type=chunk) - No material changes occurred in internal control over financial reporting during the three months ended June 30, 2024[146](index=146&type=chunk) [PART II - OTHER INFORMATION](index=48&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) This section contains other information, including legal proceedings, risk factors, exhibits, and the report's signature, ensuring compliance and providing supplementary details [ITEM 1. LEGAL PROCEEDINGS](index=48&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) Legal proceedings information is incorporated by reference from Note 11 to the financial statements, indicating consistency with the disclosures provided therein - Legal proceedings information is incorporated by reference into this report, with specific disclosures available in Note 11 to the financial statements[147](index=147&type=chunk) [ITEM 1A. RISK FACTORS](index=48&type=section&id=ITEM%201A.%20RISK%20FACTORS) No material changes occurred in the risk factors disclosed in the company's Form 10-K during this reporting period - No material changes occurred in the risk factors disclosed in the company's Form 10-K during this reporting period[148](index=148&type=chunk) [ITEM 6. EXHIBITS](index=49&type=section&id=ITEM%206.%20EXHIBITS) This section lists the exhibits filed with the report, including CEO and CFO certifications and Inline XBRL documents, ensuring completeness and regulatory compliance - Exhibits include certifications by the Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(a) and 18 U.S.C. §1350, as well as Inline XBRL Instance Document and Taxonomy Extension Schema Document[149](index=149&type=chunk) [Signature](index=50&type=section&id=SIGNATURE) This section represents the report's official signing by an authorized representative of the company, affirming the truthfulness and accuracy of its contents as required by the Securities Exchange Act of 1934 - This report was signed by Maura Topper, Chief Financial Officer of CrossAmerica GP LLC, the general partner of CrossAmerica Partners LP, on August 7, 2024[152](index=152&type=chunk)

Exhibit 99.1 CrossAmerica Partners LP Reports Second Quarter 2024 Results - Reported Second Quarter 2024 Net Income of $12.4 million, Adjusted EBITDA of $42.6 million and Distributable Cash Flow of $26.1 million compared to Net Income of $14.5 million, Adjusted EBITDA of $42.2 million and Distributable Cash Flow of $30.4 million for the Second Quarter 2023 - Reported Second Quarter 2024 Gross Profit for the Retail Segment of $76.6 million compared to $66.0 million of Gross Profit for the Second Quarter 2023 ...

Allentown, PA, July 19, 2024 (GLOBE NEWSWIRE) -- CrossAmerica Partners to Announce Second Quarter 2024 Earnings Results on August 7 ALLENTOWN, PA, July 19, 2024 – CrossAmerica Partners LP (NYSE:CAPL) today announced that it will release its second quarter 2024 results after the market closes on Wednesday, August 7, 2024. In conjunction with the news release, management will host a conference call on Thursday, August 8 at 9:00 a.m. Eastern Time. The conference call numbers are 800-717-1738 or 646-307-1865 an ...

Financial Data and Key Metrics Changes - For Q1 2024, the company reported a net loss of $17.5 million compared to a net loss of $1 million in Q1 2023, primarily due to a $15.9 million loss on the lease termination with Applegreen and a decline in adjusted EBITDA [9][14] - Adjusted EBITDA for Q1 2024 was $23.6 million, down $8.2 million from $31.7 million in Q1 2023 [9][14] - Distributable cash flow decreased to $11.7 million in Q1 2024 from $19.1 million in Q1 2023 [9][14] Business Line Data and Key Metrics Changes - Wholesale segment gross profit declined 14% to $27 million in Q1 2024 from $31.2 million in Q1 2023, driven by lower fuel margin, fuel volume, and rental income [2][9] - Retail segment generated $54.4 million in gross profit, a 7% increase from $50.9 million in Q1 2023, primarily due to merchandise growth [12][9] - Merchandise gross profit increased 18% to $21.4 million, with a gross profit margin percentage up approximately 30 basis points year-over-year [3][8] Market Data and Key Metrics Changes - Same-store retail volume declined 3% year-over-year, reflecting overall soft demand in the industry [3][12] - Wholesale volume was 184 million gallons in Q1 2024, down 9% from 201.9 million gallons in Q1 2023, with a significant portion of the decline attributed to site conversions [20][12] Company Strategy and Development Direction - The company is focused on increasing its exposure to retail fuel margins and overall retail business, as evidenced by the conversion of Applegreen sites to company-operated retail locations [22][21] - The company plans to optimize performance at newly converted sites and maintain a strong balance sheet while generating durable cash flows [16][22] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a challenging start to the year, with Q1 typically being the weakest quarter, but expressed optimism for improvement as the year progresses into peak months [13][22] - The company noted that while financial results were soft, there were positive developments in site conversions and expense management [22][16] Other Important Information - Operating expenses increased by $6.4 million year-over-year, with a 20% increase in retail segment expenses due to a higher site count [14][15] - The company spent $6.1 million on capital expenditures in Q1 2024, with $4.5 million allocated to growth-related projects [24] Q&A Session Summary - There were no questions during the Q&A session, and participants were encouraged to reach out later for any inquiries [25]

Investor Relations: Randy Palmer, rpalmer@caplp.com or 610-625-8000 Cautionary Statement Regarding Forward-Looking Statements Statements contained in this release that state the Partnership's or management's expectations or predictions of the future are forwardlooking statements. The words "believe," "expect," "should," "intends," "estimates," "target" and other similar expressions identify forward-looking statements. It is important to note that actual results could differ materially from those projected i ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to | --- | --- | |-------------------------------------------------------------------------------------------------|------------------------------------------ ...