CrossAmerica Partners(US:CAPL)2020-02-26 15:46Financial Data and Key Metrics Changes - For Q4 2019, adjusted EBITDA was $25.6 million, down 11% from $28.7 million in Q4 2018, while distributable cash flow decreased by 11% to $18.8 million from $21 million in the previous year [26] - For the full year 2019, adjusted EBITDA was $103.7 million, a decline of 2%, but distributable cash flow increased by 5% to $80.1 million [27] - The distribution coverage ratio for Q4 2019 was 1.04 times, compared to 1.16 times in Q4 2018, while the full year coverage improved to 1.11 times from 1.01 times in 2018 [26][27] Business Line Data and Key Metrics Changes - Wholesale fuel gross profit for Q4 2019 decreased by 11% year-over-year, with a wholesale fuel margin of $0.068 per gallon, down from $0.076 per gallon in Q4 2018 [13][14] - For the full year 2019, wholesale fuel gross profit increased by 3%, driven by a 7% increase in wholesale fuel margin per gallon, which reached $0.072, the highest in the partnership's history [16][19] - Rental and other gross profit for Q4 2019 was $17.2 million, a 10% increase compared to the previous year, representing 42% of total gross profit for 2019 [14][16] Market Data and Key Metrics Changes - The company reported a relatively flat wholesale fuel volume compared to Q4 2018, indicating stable market conditions despite the decline in fuel margins [13] - The overall decrease in operating expenses for 2019 was 13%, attributed to divestitures and dealerization of sites [20] Company Strategy and Development Direction - The company plans to complete remaining asset exchanges with Couche-Tard and Circle K, with 76 sites expected to be dealerized by early Q2 2020 [22] - A focus on integrating new acquisitions and optimizing real estate portfolios is emphasized, alongside maintaining discipline in expense management [24][20] - The company anticipates generating between $125 million and $135 million in adjusted EBITDA and $100 million to $110 million in distributable cash flow for 2020 [25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving the guidance provided earlier in the year, highlighting the positive impact of upcoming transactions on financial performance [25] - The management team is focused on closing announced acquisitions and ensuring effective integration into the organization [32] Other Important Information - The company completed two asset exchanges in 2019, adding 116 sites to its wholesale segment [21] - The partnership's leverage ratio at year-end was 4.70 times, with sufficient liquidity to execute plans [28] Q&A Session Summary Question: Expected CapEx step down for 2020 - Management anticipates CapEx to remain higher than historical levels due to ongoing upgrades, despite the completion of certain projects [31] Question: M&A market size and future prospects - Management noted ongoing interest in M&A but emphasized focus on closing and integrating current acquisitions [32] Question: Bridging Q4 results to full year 2020 expectations - Management indicated that annualizing Q4 results would not accurately reflect future performance due to pending acquisitions [34] Question: Maintenance CapEx run rate - Maintenance CapEx is expected to remain in the $1 million to $2 million range, with additional costs from new retail assets [36]