CrossAmerica Partners(CAPL) - 2024 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported net income of $10.7 million for Q3 2024, down from$ 12.3 million in Q3 2023 [30] - Adjusted EBITDA was $43.9 million, a slight decrease of 1% from$ 44.2 million in Q3 2023 [30] - Distributable cash flow decreased to $27.1 million from$ 31.4 million year-over-year, primarily due to increased interest expense and higher sustaining capital spending [31] Business Line Data and Key Metrics Changes - Retail segment gross profit increased by 24% and operating income by 19% year-over-year, driven by site conversions and strong same-store performance [7] - Motor fuel gross profit rose 26%, while merchandise gross profit increased by 20% compared to Q3 2023 [9] - Wholesale segment gross profit declined 16% to $27.6 million, primarily due to a decrease in fuel volume [21] Market Data and Key Metrics Changes - National gasoline demand was down approximately 5% for the quarter, but the company's same-store retail volume outperformed this trend, growing by about 2% in company-operated stores [11] - Same-store volume in the wholesale segment was down approximately 2% year-over-year, outperforming the national demand decline [25] Company Strategy and Development Direction - The company is focused on converting sites from wholesale to retail to enhance exposure to retail fuel margins [20] - The strategy includes increasing the number of company-operated retail sites, which rose by 79 from the previous year [17] - The company aims to optimize performance at newly converted stores while managing operational costs effectively [41] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a soft industry environment with decreased fuel demand but highlighted strong performance in retail margins [8] - The company remains focused on generating durable cash flows and maintaining a strong balance sheet despite ongoing demand challenges [41] Other Important Information - The company divested 9 properties for$ 7.2 million, resulting in a net gain of $5.3 million, indicating active management of its asset portfolio [27] - Operating expenses increased by$ 10.2 million year-over-year, driven by the conversion of sites from wholesale to retail [33] Q&A Session Summary - No questions were raised during the Q&A session, and the company encouraged follow-up inquiries if needed [42]