Murphy USA (MUSA) - 2023 Q1 - Quarterly Report

Financial Performance - For Q1 2023, the company reported net income of $106.3 million, or $4.80 per diluted share, on revenue of $5.1 billion, compared to net income of $152.4 million, or $6.08 per diluted share, on the same revenue in Q1 2022[147]. - Revenues for Q1 2023 decreased by $41.2 million, or 0.8%, due to an 8.2% decline in retail fuel sales prices, partially offset by a 4.9% increase in fuel sales volumes[148]. - Total fuel contribution for Q1 2023 was 28.9 cents per gallon, down from 34.0 cents per gallon in Q1 2022, while retail fuel margin dollars increased by 4.4%[138]. - Adjusted EBITDA for Q1 2023 was $220.2 million, down from $277.0 million in Q1 2022, reflecting a decrease of 20.5%[172]. - Cash provided by operating activities decreased by $189.5 million to $149.7 million in Q1 2023 compared to $339.2 million in Q1 2022[175]. - Net income for the Marketing segment decreased by $43.2 million to $125.9 million in Q1 2023, attributed to lower fuel contribution and increased operating expenses[159]. - Total revenues for the Marketing segment remained flat at approximately $5.1 billion for both Q1 2023 and Q1 2022, with excise taxes collected of $544.8 million in Q1 2023[160]. Expenses and Costs - Store and other operating expenses increased by $15.6 million, or 7.0%, in Q1 2023, primarily due to higher employee-related expenses and store maintenance costs[149]. - SG&A expenses for Q1 2023 increased by $12.8 million, or 27.7%, driven by higher professional and technology fees from business improvement initiatives[150]. - Total PS&W margin dollars, including RINs, decreased by $51.0 million from Q1 2022, despite an increase in RINs revenue of $38.7 million[162]. Capital Expenditures and Debt - The company anticipates total capital expenditures for the full year 2023 to range from approximately $375 million to $425 million, primarily funded through operating cash flow[141]. - Capital expenditures for the three months ended March 31, 2023, totaled $73.4 million, an increase from $69.1 million in the same period of 2022[203]. - As of March 31, 2023, total long-term debt net of current maturities was $1,789.4 million, a slight decrease from $1,791.9 million as of December 31, 2022[184]. - The outstanding balance of the term loan was $392.3 million at March 31, 2023, compared to $393.3 million at December 31, 2022[190]. - The company issued $300 million of 5.625% Senior Notes due 2027, $500 million of 4.75% Senior Notes due 2029, and $500 million of 3.75% Senior Notes due 2031, all fully guaranteed by Murphy USA[185][186][187]. Market Conditions and Risks - The average price of crude oil in Q1 2023 was $76 per barrel, compared to $95 per barrel in Q1 2022, indicating a more stable pricing environment[138]. - The company is exposed to market risks related to the volatility in the price of refined products, primarily gasoline and diesel, which can affect revenues and operating costs[208]. - The company faces risks from geopolitical events, severe weather, and global health pandemics that could impact supply and demand[206]. - Future tobacco or e-cigarette legislation could negatively affect revenues and gross margins[206]. - The company’s financial results may differ materially from expectations due to various factors, including inventory management and supply chain disruptions[206]. Operational Overview - The company operates a total of 1,720 stores across 27 states, with 1,562 under the Murphy brand and 158 under the QuickChek brand as of March 31, 2023[133]. - Total merchandise sales increased by 8.3% to approximately $966.2 million in Q1 2023 compared to $892.0 million in Q1 2022[159]. - Retail fuel margin dollars increased by 4.4% year-over-year, with total fuel volumes up by 4.9% and a retail fuel margin of 23.2 cents per gallon[161]. Financial Management and Strategy - The company has a committed cash flow revolving credit facility of $350 million, which was undrawn as of March 31, 2023, to support working capital and corporate purposes[173]. - The company utilizes limited derivative instruments for risk management, which are monitored by senior management[208]. - The company’s growth strategy includes anticipated store openings and maintaining good business relationships, particularly with Walmart[206]. - The company undertakes no obligation to update or revise any forward-looking statements based on new information or future circumstances[207].