Murphy USA (MUSA) - 2025 Q1 - Quarterly Results

Key Highlights & Management Commentary Q1 2025 performance was solid despite timing headwinds, driven by fuel margin growth and merchandise share gains - CEO Andrew Clyde noted that despite a 2% comparison headwind from the timing of Leap Day and Easter, the business performed admirably, with key strengths in share gains for nicotine and center-of-store categories[5] - The company repurchased 321.1 thousand common shares for $151.2 million and paid a quarterly dividend of $0.49 per share, a 2.1% increase from the previous quarter[6] - Subsequent to quarter end, on April 7, 2025, the company refinanced and upsized its revolving credit facility and Term Loan B to extend maturities and increase liquidity[6][13] Q1 2025 Key Financial and Operational Metrics | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Net Income | $53.2 million | $66.0 million | -19.4% | | Diluted EPS | $2.63 | $3.12 | -15.7% | | Total Fuel Contribution | 25.4 cpg | 24.8 cpg | +0.6 cpg | | Total Retail Gallons | -1.9% | N/A | -1.9% YoY | | SSS Retail Gallons | -4.2% | N/A | -4.2% YoY | | Merchandise Contribution | $195.9 million | $191.6 million | +2.3% | Consolidated Results Net income and Adjusted EBITDA declined year-over-year due to rising operating expenses that offset revenue gains - The decrease in net income was a result of higher store operating expenses, depreciation, and interest expense, which outweighed the positive impact of higher fuel and merchandise contributions and lower G&A expenses[7] Consolidated Financial Summary (Q1 2025 vs Q1 2024) | Metric ($ Millions, except EPS) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net income | $53.2 | $66.0 | | Earnings per share (diluted) | $2.63 | $3.12 | | Adjusted EBITDA | $157.4 | $164.3 | Segment Performance The company saw mixed segment results with higher merchandise contribution and stable fuel contribution despite volume declines Fuel Higher retail fuel margins drove a 7.1% increase in retail contribution, offsetting lower volumes and weaker wholesale results - Retail fuel contribution dollars increased by $17.7 million (+7.1%) compared to Q1 2024, primarily due to higher retail fuel margins[8] - Product Supply & Wholesale (PS&W) contribution, including RINs, decreased by $16.5 million compared to Q1 2024, attributed to timing and pricing impacts from market conditions[8] Fuel Segment Key Metrics (Q1 2025 vs Q1 2024) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total fuel contribution ($ Millions) | $287.3 | $286.1 | | Retail fuel contribution ($ Millions) | $267.7 | $250.0 | | Retail fuel volume (Million gal) | 1,131.2 | 1,153.1 | | Retail fuel margin (cpg) | 23.7 | 21.7 | | Total fuel contribution (cpg) | 25.4 | 24.8 | Merchandise Merchandise contribution grew 2.3% to $195.9 million, driven by improved unit margins and growth in all categories - Total nicotine contribution dollars increased 2.8% and non-nicotine contribution dollars increased 1.9% compared to Q1 2024[9] Merchandise Segment Key Metrics (Q1 2025 vs Q1 2024) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total merchandise contribution ($ Millions) | $195.9 | $191.6 | | Total merchandise sales ($ Millions) | $999.4 | $1,000.7 | | Merchandise unit margin (%) | 19.6% | 19.2% | | Total merchandise contribution ($K SSS) | $38.4 | $37.8 | Operating Expenses Store operating expenses rose due to employee and maintenance costs, while SG&A expenses decreased on lower professional fees - Store OPEX, excluding payment fees and rent on an APSM basis, rose 5.7% versus Q1 2024, mainly due to increased employee expenses and maintenance costs[10] - The decrease in SG&A costs was primarily due to lower professional fees and employee-related costs[10] Expense Summary (Q1 2025 vs Q1 2024) | Expense Category ($ Millions) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total store and other operating expenses | $266.1 | $252.1 | | Total SG&A cost | $60.1 | $62.1 | Store Portfolio Update The company expanded its network with a net increase of 4 stores, reaching a total of 1,761 locations - At the end of Q1 2025, the company had a total of 1,761 stores[11] - There were 31 total stores under construction at the end of the quarter, comprising 14 new-to-industry sites and 17 raze-and-rebuilds[11] Q1 2025 Store Activity | Activity | Murphy USA / Express | QuickChek | Total | | :--- | :--- | :--- | :--- | | New-to-industry (NTI) | 8 | — | 8 | | Closed | (2) | (2) | (4) | | Net change | 6 | (2) | 4 | Financial Position and Capital Allocation The company maintained a solid financial position while executing its capital allocation plan of share repurchases and dividends - In Q1 2025, the company repurchased 321.1 thousand shares for $151.2 million, with approximately $787.8 million remaining under the current share repurchase authorization[14] - A quarterly dividend of $0.49 per share was paid in March 2025, and a subsequent dividend of $0.50 per share was announced for June 2025, a 2% increase[6][15] - Subsequent to quarter end, the company increased its revolving credit facility to $750 million and its Term Loan B to $600 million, extending maturities to 2030 and 2032, respectively[13] Key Financial Position Metrics (as of March 31, 2025) | Metric ($ Millions) | March 31, 2025 | March 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $49.4 | $56.7 | | Long-term debt | $1,974.2 | $1,783.1 | Financial Statements The statements detail a year-over-year decline in revenue and net income, alongside shifts in assets and liabilities Consolidated Statements of Income Q1 2025 revenue and net income decreased to $4.53 billion and $53.2 million respectively, due to lower sales Q1 Income Statement Highlights ($ Millions, except per share data) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total operating revenues | $4,525.4 | $4,843.7 | | Income from operations | $88.0 | $105.2 | | Income before income taxes | $61.9 | $81.9 | | Net Income | $53.2 | $66.0 | | Diluted Earnings Per Share | $2.63 | $3.12 | Consolidated Balance Sheets Total assets stood at $4.50 billion, while stockholders' equity declined to $719.6 million due to share repurchases Balance Sheet Summary ($ Millions) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total current assets | $716.4 | $748.1 | | Total assets | $4,502.5 | $4,541.6 | | Total current liabilities | $891.8 | $947.9 | | Total liabilities | $3,782.9 | $3,701.5 | | Total stockholders' equity | $719.6 | $840.1 | Consolidated Statements of Cash Flows The company generated $128.5 million in operating cash flow, funding investments and shareholder returns Q1 Cash Flow Summary ($ Millions) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $128.5 | $136.0 | | Net cash required by investing activities | $(87.7) | $(74.9) | | Net cash required by financing activities | $(38.4) | $(122.2) | | Net increase (decrease) in cash | $2.4 | $(61.1) | Non-GAAP Financial Measures Adjusted EBITDA, a key non-GAAP metric, was $157.4 million, used by management to assess core operating performance - The company uses Adjusted EBITDA for operational and financial decision-making, as it believes the measure is a more reliable indicator of ongoing operating performance and the ability to generate cash flow from operations[33] Reconciliation of Net Income to Adjusted EBITDA ($ Millions) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net income | $53.2 | $66.0 | | Income tax expense | $8.7 | $15.9 | | Interest expense, net | $25.5 | $23.7 | | Depreciation and amortization | $68.2 | $58.7 | | EBITDA | $155.6 | $164.3 | | Other adjustments | $1.8 | $(0.0) | | Adjusted EBITDA | $157.4 | $164.3 |