Financial Data and Key Metrics Changes - The company reported a net income of $12.3 million for Q3 2023, down from $27.6 million in Q3 2022, primarily due to elevated fuel margins in the prior year [29] - Adjusted EBITDA decreased to $44.2 million in Q3 2023 from $62.6 million in Q3 2022 [30] - Distributable cash flow increased to $31.4 million in Q3 2023 compared to $15.9 million in Q3 2022, although the decrease in net income was attributed to strong results in the prior year and increased cash interest expense [34] - Distribution coverage for the current quarter was 1.57 times, down from 2.55 times in Q3 2022 [35] Business Line Data and Key Metrics Changes - Retail segment gross profit was $67.6 million, with motor fuel gross profit declining 34% but merchandise gross profit increasing 23% year-over-year [26] - Inside sales on a same-site basis increased approximately 4% year-over-year, with inside sales excluding cigarettes up approximately 9% [4][6] - Wholesale fuel gross profit declined 4% to $18.8 million, driven by decreased fuel margins, while wholesale segment gross profit also decreased by 4% to $32.9 million [18][19] Market Data and Key Metrics Changes - Wholesale volume increased by 2% year-over-year to 217.3 million gallons, attributed to the acquisition of Community Service Station assets [22] - Same-store volume in the Wholesale segment was down approximately 1.2% year-over-year, with a decline continuing post-quarter end [24] - Retail same-store volume increased by 2% year-over-year, but there was a decline in the mid-single digits in the period since the quarter-end [26][27] Company Strategy and Development Direction - The company plans to continue converting additional sites from other classes of trade to company-operated retail sites, aiming to enhance profitability and long-term value [8] - The focus remains on identifying potential divestiture locations to free up capital for reducing leverage or investing in growth opportunities [31] - The company is committed to maintaining a healthy balance sheet and leverage profile to allow for opportunistic investments [40] Management's Comments on Operating Environment and Future Outlook - Management noted that the business continues to perform well across various operating environments, with strong underlying fundamentals and a healthy balance sheet [33] - The company has experienced year-over-year cost pressures in maintenance and supplies, but these have been offset by cost management efforts [37][49] - Management expressed optimism about continuing strong performance into Q4 2023 and 2024 [40] Other Important Information - The company ended the quarter with a total credit facility balance of $762.5 million, slightly up from the previous quarter [38] - The effective interest rate on the capital credit facility was 4.9%, benefiting from interest rate swaps [52] - Capital expenditures totaled $10.4 million, with $8.5 million allocated for growth-related projects [45] Q&A Session Summary Question: Were there any questions from participants? - There were no questions during the Q&A session, and participants were encouraged to reach out later if they had inquiries [41]

• Credit Facility balance at 9/30/23: $762.5 million • Leverage ratio at 4.35x at 9/30/23 • Effective interest rate of 4.9% at 9/30/23 with benefit of interest rate swaps | --- | --- | --- | --- | --- | --- | --- | --- | --- | |-------|-------|-------|-------|-------|--------------------|-------|-------|-------| | | | | | | | | | | | | | | | | Appendix | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Third Quarter 2023 | | | | | | | | | | | | | | | | | | | ...

Financial Performance - Operating revenues for Q3 2023 were $1,210,023, a decrease of 5.0% from $1,274,407 in Q3 2022[78] - Gross profit for Q3 2023 was $100,440, down 12.4% from $114,730 in Q3 2022[78] - Net income for Q3 2023 was $12,292, a decline of 55.5% compared to $27,593 in Q3 2022[78] - Earnings per common unit for Q3 2023 were $0.31, down from $0.71 in Q3 2022[78] - Operating expenses for Q3 2023 were $76,582, an increase of 2.4% from $74,773 in Q3 2022[78] - Operating income for the three months ended September 30, 2023, was $24,145, compared to $39,639 for the same period in 2022, reflecting a decrease of 39.2%[175] - Net income for the nine months ended September 30, 2023, was $12,292 million, compared to $27,593 million for the same period in 2022, reflecting a decline of approximately 55.5%[81] Assets and Liabilities - Total current assets increased to $123,261 as of September 30, 2023, from $118,406 at December 31, 2022[76] - Total liabilities decreased to $1,167,914 as of September 30, 2023, from $1,175,465 at December 31, 2022[76] - Cash and cash equivalents decreased to $5,790 as of September 30, 2023, from $16,054 at December 31, 2022[76] - As of September 30, 2023, total equity was $22,212 million, a decrease from $28,344 million on June 30, 2023[81] - Total assets held for sale increased to $1,135 million as of September 30, 2023, from $983 million on December 31, 2022[87] - Property and equipment, net, decreased to $706,409 million as of September 30, 2023, from $728,379 million on December 31, 2022[90] - Total intangible assets were reported at $235,210 million as of September 30, 2023, compared to $235,790 million on December 31, 2022[91] Inventory and Receivables - Inventory increased to $53,609 as of September 30, 2023, compared to $47,307 at December 31, 2022[76] - Retail site merchandise inventory was $26,743 million as of September 30, 2023, up from $22,654 million on December 31, 2022[89] - Receivables from fuel and merchandise sales increased to $36,501 thousand as of September 30, 2023, from $28,959 thousand at December 31, 2022[175] - The company reported total accounts receivable of $39,180 thousand as of September 30, 2023, compared to $31,568 thousand at December 31, 2022[175] Debt and Financing - As of September 30, 2023, the total debt and finance lease obligations amounted to $774.3 million, with a current portion of $3.0 million[116] - The amount of availability under the CAPL Credit Facility at September 30, 2023, was $158 million after considering debt covenant restrictions[123] - The effective interest rate on the CAPL Credit Facility was 4.9% as of September 30, 2023[149] - The company had $762.5 million outstanding on its CAPL Credit Facility, with an effective interest rate of 4.9%[21] - Cash paid for interest for the nine months ended September 30, 2023, was $30,073 thousand, compared to $20,092 thousand for the same period in 2022, representing an increase of 49.5%[203] Segment Performance - The retail segment includes the retail sale of motor fuel and convenience merchandise, with revenues generated through leasing or subleasing real estate[196] - The wholesale segment now includes only the fuel gross profit on sales to lessee dealers and independent dealers, reflecting a strategic shift in segment reporting[197] - The company has recast the results of its segments for the three and nine months ended September 30, 2022, to align with the new segment reporting structure[198] Other Financial Metrics - The company experienced seasonality in sales volumes, with historically higher sales in the second and third quarters[83] - Approximately 18% of rent income for the nine months ended September 30, 2023, was generated from two multi-site operators, down from 20% in the same period of 2022[86] - The company anticipates future retail and wholesale gross profits, including gasoline and diesel, to be influenced by market demand trends[180] - The company’s cash distribution policy is subject to the discretion of the Board, with no assurance of future distributions[169] - Total distributions paid on common units for the three months ended September 30, 2023, were $19,934 thousand, slightly up from $19,913 thousand in the same period of 2022[192] - The company declared distributions of $0.5250 per common unit for the quarter ended September 30, 2023, consistent with the previous quarters in 2023[194]

Financial Data and Key Metrics Changes - For Q2 2023, net income was $14.5 million, up from $14 million in Q2 2022, driven by increased adjusted EBITDA despite higher interest expenses [12] - Adjusted EBITDA increased by 2% to $42.2 million compared to $41.4 million in Q2 2022 [37] - Distribution coverage ratio was 1.53 times for Q2 2023, down from 1.63 times in Q2 2022 [37] Business Line Data and Key Metrics Changes - Wholesale fuel gross profit declined by 6% to $17.9 million compared to $19 million in Q2 2022, with a wholesale segment gross profit decrease of 5% to $31.7 million [4][12] - Retail segment gross profit increased by 19% or $10.6 million compared to Q2 2022 [23] - Same-store volume in the wholesale segment improved by approximately 50 basis points year-over-year, following a decline of about 4% in Q1 [6] Market Data and Key Metrics Changes - Wholesale volume was 218.1 million gallons in Q2 2023, a 2% increase from 214.4 million gallons in Q2 2022 [21] - Retail volume on a same-store basis declined by 1% year-over-year, but has since increased approximately 7% year-over-year post-quarter [8][22] Company Strategy and Development Direction - The company is focused on converting lessee dealer sites to company-operated locations to enhance profitability and long-term value [9][25] - Continued expansion of company-operated retail footprint is planned through class of trade conversions [25] Management Comments on Operating Environment and Future Outlook - Management noted that crude oil prices were lower compared to the prior year, impacting fuel margins [20] - The company is optimistic about the driving season and is focused on serving customers to maintain strong performance [31] Other Important Information - G&A expenses increased by $1.8 million year-over-year, primarily due to acquisition-related costs and IT investments [14] - The company divested six properties for $7.8 million to maximize value and reduce leverage [26] Q&A Session Summary Question: What are the expectations for future growth? - Management emphasized the importance of converting locations to company-operated retail, which is expected to enhance long-term EBITDA and value creation [34] Question: How has the interest rate environment affected operations? - The company continues to benefit from interest rate swaps, maintaining an effective interest rate of 5.1% on its credit facility [40]

Financial Performance - Net income for the six months ended June 30, 2023, was $13.6 million, a decrease of 28.8% compared to $19.0 million for the same period in 2022[77]. - Total revenues from TopStar for the three months ended June 30, 2023, were $13.2 million, down from $22.7 million in 2022, representing a decline of 42.9%[70]. - Cash flows from operating activities provided $47.3 million for the six months ended June 30, 2023, compared to $54.7 million in 2022, reflecting a decrease of 13.5%[77]. - The company incurred capital expenditures of $11.3 million for the six months ended June 30, 2023, down from $16.4 million in 2022, a reduction of 30.9%[77]. - Total revenues for the three months ended June 30, 2023, were $1,145,396, a decrease of 22.4% compared to $1,475,033 for the same period in 2022[152]. - Revenues from fuel sales to external customers for the six months ended June 30, 2023, were $1,961,121, down 17.7% from $2,380,612 in the same period of 2022[152]. - Operating income for the three months ended June 30, 2023, was $27,853, compared to $21,072 for the same period in 2022, reflecting an increase of 32.3%[152]. Expenses and Liabilities - Rent expense under lease agreements with the Topper Group was $2.6 million for the three months ended June 30, 2023, consistent with the same period in 2022[71]. - The company distributed $7.7 million to the Topper Group related to its ownership of common units for the three months ended June 30, 2023, unchanged from 2022[90]. - Environmental liabilities recorded on the balance sheet totaled $7.2 million and $7.5 million at June 30, 2023 and December 31, 2022, respectively[98]. - Indemnification assets related to third-party escrow funds totaled $4.9 million and $5.2 million at June 30, 2023 and December 31, 2022, respectively[98]. - Income tax expense for the three months ended June 30, 2023 was $2.8 million compared to $(0.1) million for the same period in 2022[105]. Cash Flow and Financing - The effective interest rate on the CAPL Credit Facility was 5.1% as of June 30, 2023, with an applicable margin of 2.25%[64]. - As of June 30, 2023, the availability under the CAPL Credit Facility was $159.0 million after considering debt covenant restrictions[80]. - Cash paid for interest increased to $19,920 thousand in the six months ended June 30, 2023, from $12,491 thousand in the same period of 2022[135]. - The Partnership is required to maintain a Consolidated Leverage Ratio of not greater than 5.25 to 1.00 for the fiscal quarters ending in 2023[146]. - The CAPL Credit Facility prohibits cash distributions to unitholders if any event of default occurs or would result from the distribution[147]. Segment Information - The company operates in two segments: wholesale and retail, with exclusive motor fuel distribution contracts in the wholesale segment[109]. - The retail segment includes the retail sale of motor fuel and convenience merchandise, with gross profit retained by the company at commission agent sites[129]. - The Partnership's segment reporting was changed to simplify performance assessment, eliminating intersegment sales from prior reporting[150]. Inventory and Receivables - For the six months ended June 30, 2023, accounts receivable decreased by $3,554 thousand compared to a decrease of $15,125 thousand in the same period of 2022[115]. - Inventories decreased by $4,658 thousand for the six months ended June 30, 2023, compared to a decrease of $10,403 thousand in the same period of 2022[115]. - Total accounts receivable as of June 30, 2023, amounted to $35,402, an increase from $31,568 as of December 31, 2022[152]. - Receivables from fuel and merchandise sales as of June 30, 2023, were $32,683, an increase from $28,959 as of December 31, 2022[152]. Revenue Streams - Revenues from food and merchandise sales for the three months ended June 30, 2023, were $83,666, up from $73,934 in the same period of 2022, representing a growth of 13.3%[152]. - Rent income for the six months ended June 30, 2023, was $41,843, compared to $41,476 for the same period in 2022, indicating a slight increase[152]. - Other revenue for the three months ended June 30, 2023, totaled $4,957, a decrease from $5,001 in the same period in 2022[152]. Amortization and Costs - The balance of unamortized costs incurred to obtain certain contracts with customers was $10.8 million as of June 30, 2023[152]. - Amortization of costs related to contracts was $0.5 million for the three months ended June 30, 2023, compared to $0.4 million for the same period in 2022[152].

Financial Data and Key Metrics Changes - The company reported a net loss of just under $1 million for Q1 2023 compared to a net income of $5 million in Q1 2022, primarily due to increased interest expenses from the elevated interest rate environment [15][27] - Adjusted EBITDA for Q1 2023 was $31.7 million, a slight decrease of 1% from $32 million in Q1 2022 [27] - Distributable cash flow for Q1 2023 was $19.1 million, down from $24.4 million in Q1 2022, mainly due to increased cash interest expenses [27] Business Line Data and Key Metrics Changes - Wholesale fuel gross profit increased 3% to $16.7 million in Q1 2023 from $16.2 million in Q1 2022, driven by improved fuel margins [23] - Retail segment gross profit increased by 5% or $2.3 million compared to Q1 2022, with merchandise gross profit rising 9% [13][25] - Inside sales on a same-site basis increased approximately 4% year-over-year, with inside sales excluding cigarettes up about 10% [7][25] Market Data and Key Metrics Changes - National gasoline volume was approximately flat compared to the prior year, with a slight increase in volume observed since the quarter end [6] - The company's wholesale volume was 201.9 million gallons in Q1 2023, down from 203.9 million gallons in Q1 2022, largely due to lower base business volume [36] - Same-store volume across the entire portfolio was down around 2% for the quarter, driven by strong retail segment performance [37] Company Strategy and Development Direction - The company continues to evaluate its portfolio for opportunities to divest non-core properties, with one property sold for $400,000 in Q1 2023 and two additional properties sold for $6.6 million post-quarter [14] - The refinancing of credit facilities into a single facility simplifies the capital structure and provides necessary liquidity for future operations [26][45] - The company aims to maximize value and cash flows from each site in its portfolio while preparing for the summer drive season [30] Management's Comments on Operating Environment and Future Outlook - Management noted that the elevated interest rate environment has impacted interest expenses, but the company benefits from interest rate swaps established in early 2020 [11][18] - The company expressed confidence in its operational performance and cash flow generation, which has improved its leverage profile, providing flexibility for future opportunities [48] - Management highlighted the strong performance of the retail segment and ongoing initiatives to enhance pricing and product sourcing [38] Other Important Information - The company’s distribution coverage was 0.96 times for the current quarter compared to 1.22 times in Q1 2022, reflecting the seasonality of the business [46] - Capital expenditures totaled $6 million in Q1 2023, with $4 million allocated to growth-related investments, a decrease from $8.9 million in Q1 2022 [47] Q&A Session Summary Question: What are the expectations for future revenue and operational metrics? - Management provided forward-looking statements regarding expected revenue and operational metrics but noted that there can be no assurance that these expectations will be achieved [21] Question: How has the company managed its interest rate exposure? - The company has entered into new SOFR-based interest rate swap contracts to manage interest rate exposure and provide certainty around interest expenses moving forward [42]

| --- | --- | --- | --- | --- | |-------|-------|---------------|--------------------|-------| | | | | | | | | | | | | | | | | | | | | | | First Quarter 2023 | | | | | | | | | | | | | | | | | Earnings Call | | | | | | May 2023 | | | Statements contained in this presentation that state the Partnership's or management's expectations or predictions of the future are forward-looking statements. The words "believe," "expect," "should," "intends," "anticipates", "estimates," "target" and other similar expressions ...

Financial Performance - Operating revenues for Q1 2023 were $1,016,159, a decrease of 7.1% compared to $1,093,211 in Q1 2022[70] - Gross profit increased to $82,059 in Q1 2023, up from $78,830 in Q1 2022, reflecting a growth of 4.0%[70] - Operating income for Q1 2023 was $9,110, slightly down from $9,719 in Q1 2022, representing a decrease of 6.3%[70] - Net loss for Q1 2023 was $(979), compared to a net income of $5,047 in Q1 2022, indicating a significant decline[71] - Basic and diluted loss per common unit was $(0.04) in Q1 2023, compared to earnings of $0.13 in Q1 2022[70] - EBITDA for Q1 2023 was $29.2 million, compared to $30.1 million in Q1 2022, reflecting a decrease of $0.9 million[33] - Distributable Cash Flow for Q1 2023 was $19.1 million, down from $24.2 million in Q1 2022, indicating a decrease in cash available for distributions[33] - The Distribution Coverage Ratio for Q1 2023 was 0.96x, compared to 1.22x in Q1 2022, suggesting a decline in the ability to cover distributions[33] Cash Flow and Liquidity - Net cash provided by operating activities decreased to $11,538 in Q1 2023 from $28,388 in Q1 2022, a decline of 59.3%[71] - Cash and cash equivalents at the end of Q1 2023 were $7,517, down from $11,149 at the end of Q1 2022[71] - The company expects ongoing liquidity sources to include cash generated from operations and proceeds from real estate sales[37] Expenses and Liabilities - The company reported a total operating expense of $71,182 in Q1 2023, an increase from $68,867 in Q1 2022, reflecting a rise of 4.8%[70] - Interest expense increased significantly to $(12,012) in Q1 2023 from $(6,661) in Q1 2022, marking an increase of 80.5%[70] - Total liabilities decreased from $1,175,465 thousand as of December 31, 2022, to $1,168,155 thousand as of March 31, 2023, a reduction of about 0.6%[81] - Total debt and finance lease obligations as of March 31, 2023, amounted to $791.3 million, with a current portion of $2.9 million[26] Assets and Equity - Total current assets decreased from $118,406 thousand as of December 31, 2022, to $111,492 thousand as of March 31, 2023, a decline of approximately 5.4%[81] - Total equity decreased significantly from $52,977 thousand as of December 31, 2022, to $28,827 thousand as of March 31, 2023, representing a decline of approximately 45.6%[81] - Cash and cash equivalents dropped from $16,054 thousand to $7,517 thousand, a decrease of about 53.1%[81] Operational Highlights - The Partnership amended its CAPL Credit Facility, increasing the senior secured revolving credit facility from $750 million to $925 million[100] - The Partnership's wholesale business purchased approximately 80% of its motor fuel from four suppliers for the three months ended March 31, 2023[92] - The Partnership's merchandise purchases from one supplier accounted for approximately 47% for the three months ended March 31, 2023[93] - The company completed an acquisition of assets from CSS for $27.5 million on November 9, 2022, which included wholesale fuel supply contracts for 38 dealer-owned locations[116] Market and Risk Factors - The company anticipates that market developments may cause estimates to change, highlighting risks such as motor fuel price volatility and competition[218] - The company has minimum volume purchase requirements under fuel supply agreements but did not incur any significant penalties during the three months ended March 31, 2023, or 2022[196] Other Financial Metrics - The effective interest rate on the CAPL Credit Facility was 4.98% as of March 31, 2023, with an applicable margin of 2.25%[151] - The amount of availability under the CAPL Credit Facility was $142.5 million as of March 31, 2023, after considering debt covenant restrictions[152] - The company recorded an income tax benefit of $1.7 million for the three months ended March 31, 2023, compared to $1.9 million for the same period in 2022[172]

Financial Data and Key Metrics Changes - For the fourth quarter of 2022, net income increased to $17.1 million from $12 million in the same quarter of 2021, driven by higher operating income in both wholesale and retail segments [53] - Adjusted EBITDA for Q4 2022 was $44.3 million, a 20% increase from $37 million in Q4 2021 [27] - For the full year 2022, net income rose to $63.7 million, up over $40 million from the previous year, while adjusted EBITDA increased by 46% to $179.8 million [28] Business Line Data and Key Metrics Changes - The wholesale fuel gross profit for Q4 2022 increased by 4% to $18.7 million compared to $18 million in Q4 2021, with a wholesale segment gross profit of $32.8 million, up 6% from $31.1 million [40] - Retail segment gross profit increased by 20% or $10.2 million compared to Q4 2021, with same-store volume outperforming national demand data [43][44] - For the full year 2022, the retail segment's gross profit increased by 61% to $245 million, while motor fuel gross profit rose by 85% [21] Market Data and Key Metrics Changes - National gasoline demand was down approximately 7% for the quarter, with the company's wholesale segment same-store volume down about 8.5% [15] - The retail segment's same-store sales excluding cigarettes increased by 2% for the full year 2022 [48] Company Strategy and Development Direction - The company aims to continue providing excellent service and value to customers while maximizing portfolio value [25] - The acquisition of assets from Community Service Stations for $27.5 million is expected to enhance returns and was funded through borrowings and cash [49] - The company is focused on divesting noncore properties, having divested 27 properties for $12.9 million in proceeds during the year [48] Management's Comments on Operating Environment and Future Outlook - Management noted that the partnership is well-positioned for future performance, with a strong track record across various economic environments [24] - The company plans to manage its leverage ratio at approximately 4x while focusing on operational performance and cash flow generation [65] - Management expressed confidence in the ability to capitalize on favorable macro conditions to generate strong performance [24] Other Important Information - Capital expenditures for the full year 2022 totaled $30.4 million, with $23.2 million being growth-related, a decline from previous years [2] - Operating expenses for Q4 2022 increased by 11% year-over-year, primarily due to higher store-level employment costs [30] Q&A Session Summary Question: Were there any questions from participants? - There were no questions from participants during the call [35]

Financial Obligations - As of December 31, 2022, the company had $606.1 million outstanding on its CAPL Credit Facility, with an effective interest rate of 4.2% after accounting for interest rate swap contracts[110]. - The company had $159.0 million outstanding under its Term Loan Facility, with a weighted-average interest rate of 6.5% as of December 31, 2022[112]. - A one percentage point change in LIBOR would impact annual interest expense by approximately $3.1 million for the CAPL Credit Facility and $1.6 million for the Term Loan Facility[110][112]. Risk Management - The company is exposed to market risks including interest rate risk and commodity price risk, which could affect its financial performance[109]. - The company does not currently engage in hedging activities for gasoline and diesel fuel purchases, allowing it to pass on price changes to customers[113]. - The company operates solely in the U.S. and is not exposed to foreign currency risk[115]. Internal Controls - The company assessed its internal control over financial reporting as effective as of December 31, 2022, based on COSO criteria[134]. - The independent auditor expressed an unqualified opinion on the company's internal control over financial reporting as of December 31, 2022[135]. Profitability Influences - The company anticipates future retail and wholesale gross profits to be influenced by trends in gasoline and diesel demand in its operating regions[130]. - A $10 per barrel change in crude oil prices would impact annual wholesale motor fuel gross profit by approximately $2.8 million due to prompt payment discounts[114]. - A significant portion of total gallons purchased is subject to Terms Discounts for prompt payment and other rebates, which are recorded within cost of sales[114]. - The dollar value of discounts related to motor fuel prices fluctuates with changes in purchase prices[114]. Capital Investments - The company plans to continue evaluating its capital investments and potential acquisitions to enhance operational results[130]. - The company issued 25,000 Series A Preferred Interests at a price of $1,000 per interest, totaling $25 million, with an initial liquidation preference of $1,000 per share[142].