CrossAmerica Partners(CAPL) - 2022 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported a net income of $5 million for Q1 2022, compared to a net loss of $4 million in Q1 2021, driven by increases in operating income in both wholesale and retail segments [22] - Adjusted EBITDA for Q1 2022 was $32 million, a 55% increase year-over-year, while distributable cash flow rose to $24.2 million from $15.8 million, marking a 54% increase [23] - Distribution coverage for the current quarter was 1.22 times, up from 0.79 times in Q1 2021, indicating improved financial health [24] Business Line Data and Key Metrics Changes - Wholesale fuel gross profit increased by 54% to $32.8 million, with wholesale segment gross profit rising 35% to $46.9 million [7] - Retail segment gross profit rose by 66% to $13 million, with motor fuel gross profit increasing by 93% and merchandise gross profit by 61% compared to Q1 2021 [12] - Same-site retail volume increased by 4% year-over-year, while same-site sales excluding cigarettes were up 1% [13] Market Data and Key Metrics Changes - Wholesale fuel volume was 320.2 million gallons, a 10% increase year-over-year, largely due to the acquisition of assets from 7-Eleven [7] - Same-store volume performance in wholesale was down approximately 0.5% year-over-year, with significant variability observed throughout the quarter [8] - The surge in fuel prices negatively impacted same-site volumes in April, although recent weeks showed improving volume performance [10][19] Company Strategy and Development Direction - The company is focused on maximizing the results of the 7-Eleven portfolio assets and evaluating opportunities to divest non-core properties [16] - Capital expenditures for Q1 2022 totaled $8.9 million, primarily for the integration of 7-Eleven sites and site upgrades [28] - The company aims to achieve a target leverage ratio of 4 to 4.25 times over the next 18 to 24 months [30] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges from the Omicron surge in January and extreme oil market pricing in March, but emphasized the underlying strength of the asset portfolio [21] - The company is monitoring inflation impacts on costs and is adapting strategies to maintain competitive pricing [25][26] - Management expressed optimism for the summer driving season, anticipating improved performance compared to recent years [19] Other Important Information - The company completed the acquisition of the remaining 7-Eleven sites in February 2022, contributing to strong quarterly results [16] - A $25 million preferred securities issuance was completed to support the acquisition and reduce outstanding borrowings [17][28] - The company reported an increase in inventory value due to rising motor fuel prices, which also affected accounts payable [29] Q&A Session Summary - No questions were raised during the Q&A session, indicating a lack of immediate inquiries from participants [31][32]