CrossAmerica Partners(US:CAPL)2020-05-06 22:27Financial Performance - Operating revenues for Q1 2020 were $391.7 million, a decrease of 16.9% from $471.8 million in Q1 2019[22] - Gross profit for Q1 2020 was $35.7 million, down from $37.1 million in Q1 2019, reflecting a decline of 3.6%[22] - Net income for Q1 2020 was $72.1 million, significantly higher than $0.2 million in Q1 2019, indicating a substantial increase[22] - Basic and diluted earnings per common unit for Q1 2020 were $2.00, compared to $0.00 in Q1 2019[22] - Operating income for the three months ended March 31, 2020, was $77.4 million, compared to $7.6 million in the same period of 2019, reflecting a significant increase in profitability[163] - For the three months ended March 31, 2020, total revenues were $391.7 million, a decrease from $471.8 million for the same period in 2019, representing a decline of approximately 17%[163] Assets and Liabilities - Total assets as of March 31, 2020, were $952.9 million, an increase from $911.1 million at the end of 2019[18] - Total liabilities decreased to $821.5 million as of March 31, 2020, from $832.8 million at the end of 2019[18] - Total current liabilities decreased to $100.5 million as of March 31, 2020, from $112.6 million at the end of 2019[18] - Total debt and finance lease obligations as of March 31, 2020, amounted to $533.5 million, a decrease from $541.6 million as of December 31, 2019, representing a reduction of approximately 1.99%[91] - As of March 31, 2020, accounts receivable totaled $29.7 million, down from $42.4 million at December 31, 2019, indicating improved collection efficiency[164] Cash Flow and Distributions - Cash and cash equivalents at the end of Q1 2020 were $8.9 million, up from $6.3 million at the end of Q1 2019[25] - Net cash provided by operating activities for Q1 2020 was $17.8 million, compared to $11.0 million in Q1 2019[25] - Distributions paid during the same period amounted to $18,111,000, resulting in a total equity of $131,417,000 as of March 31, 2020[27] - Cash distributions per common unit remained consistent at $0.5250 for both March 31, 2020, and March 31, 2019[151] Business Operations - The partnership's wholesale business purchased approximately 24% of its motor fuel from ExxonMobil, 23% from BP, 13% from Motiva, and 11% from Circle K for the three months ended March 31, 2020[53] - For the three months ended March 31, 2020, 6% of total wholesale distribution volumes were distributed to DMS, which accounted for 5% of rental income[50] - The partnership's operations are primarily conducted through its subsidiaries, including LGW for wholesale distribution and LGPR for real estate holdings[32] - The partnership's business exhibits seasonality, with historically higher sales volumes in the second and third quarters[34] Asset Transactions - The third tranche of asset exchanges with Circle K closed on February 25, 2020, involving the transfer of ten convenience and fuel retail stores valued at approximately $11.0 million[60] - The company completed the acquisition of retail operations at 169 sites for an aggregate consideration of $36 million, including $21 million in cash[76][77] - The company classified 35 sites as held for sale, with total assets held for sale amounting to $16.331 million as of March 31, 2020[85] - The fair value of the investment in CST Fuel Supply divested and the assets acquired was $69.0 million, with a gain of $67.6 million recorded in Q1 2020[75] Environmental and Impairment Charges - Environmental liabilities recorded on the balance sheet totaled $4.1 million and $3.4 million at March 31, 2020, and December 31, 2019, respectively[132] - An impairment charge of $5.2 million was recorded during the three months ended March 31, 2020[86] - The company assessed its assets for impairment due to COVID-19 and concluded that no impairments were necessary as of March 31, 2020[56] Interest Rates and Financial Instruments - The revolving credit facility had a weighted-average interest rate of 3.34% as of March 31, 2020, with an applicable margin of 2.25%[93] - The company entered into an interest rate swap contract with a notional amount of $150 million at a fixed rate of 0.495%, maturing on April 1, 2024, to hedge against interest rate volatility[95] - The fair value of the interest rate swap contract was $0.8 million as of March 31, 2020[96] - The company entered into interest rate swap contracts totaling $300 million to hedge against interest rate volatility, effectively converting approximately 60% of its variable rate borrowings to a fixed rate[299] Revenue Sources - Revenues from motor fuel sales to DMS for the three months ended March 31, 2020, were $22.1 million, down from $34.1 million for the same period in 2019, reflecting a decline of approximately 35.4%[102] - Revenues from motor fuel sales to Circle K for the three months ended March 31, 2020, were $29.2 million, compared to $33.3 million for the same period in 2019, indicating a decrease of about 12.3%[117] - Rental income from Circle K for the three months ended March 31, 2020, was $2.7 million, down from $4.2 million in the same period of 2019, a decline of approximately 35.5%[117] Miscellaneous - The impact of COVID-19 on the first quarter of 2020 was not material, although a decrease in fuel volume was noted starting in mid-to-late March[55] - The effective tax rate for the company differs from the combined federal and state statutory rate primarily because only its corporate subsidiary, LGWS, is subject to income tax[148] - The company did not incur any significant penalties related to minimum volume purchase requirements during the three months ended March 31, 2020, or 2019[128] - The company has not recorded any environmental liabilities related to sites contributed to the Partnership in connection with its IPO, as these remain the responsibility of the Predecessor Entity[135]