CrossAmerica Partners(CAPL) - 2022 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Net income for Q2 2022 was $14 million, up from $4.8 million in Q2 2021, driven by increases in operating income in both wholesale and retail segments [22] - Adjusted EBITDA increased by 39% to $41.4 million compared to $29.7 million in Q2 2021 [23] - Distributable cash flow rose 30% to $32.4 million from $25 million in Q2 2021, with distribution coverage at 1.63x compared to 1.26x in the prior year [23] Business Line Data and Key Metrics Changes - Wholesale fuel gross profit increased 33% to $40.5 million, with wholesale segment gross profit up 24% to $55 million [8] - Retail segment gross profit surged 66% to $13.9 million, with motor fuel gross profit up 89% and merchandise gross profit rising 68% year-over-year [12] - Same-site retail volume increased by 2%, contrasting with a 6% decline in wholesale same-site fuel volume [12][10] Market Data and Key Metrics Changes - National gasoline demand was down year-over-year for all but one week in the quarter, impacting wholesale fuel volume [9] - Despite lower fuel volumes, the fuel margin per gallon increased by 28% to $0.118, attributed to better sourcing costs and increased volume from company-operated retail sites [10] Company Strategy and Development Direction - The company continues to focus on integrating assets acquired from 7-Eleven and is nearing completion of EMV conversion and rebranding efforts [27] - Ongoing evaluation of the portfolio for divestment of non-core properties is part of the strategy to recycle capital for growth opportunities [18] Management's Comments on Operating Environment and Future Outlook - Management noted a decline in GDP and indicated that economic activity was slowing, yet the company posted strong results, demonstrating resilience [20] - The company is well-positioned to succeed and provide attractive financial returns across various economic environments [20] Other Important Information - Operating expenses increased due to the addition of 7-Eleven sites, with a 69% increase in average company-operated site count [16] - G&A expenses decreased by 17% year-over-year, primarily due to lower acquisition-related costs [18] - Inflation has impacted product costs, with increases of 6% to 8% in certain categories, and the company is adjusting pricing strategies accordingly [15] Q&A Session Summary - No questions were raised during the Q&A session, and the operator concluded the call [31][32]