CrossAmerica Partners(CAPL) - 2025 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported a net loss of $7.1 million for Q1 2025, an improvement from a net loss of $17.5 million in Q1 2024, driven by ongoing class of trade conversions and real estate rationalization efforts [23] - Adjusted EBITDA for Q1 2025 was $24.3 million, a 3% increase from $23.6 million in Q1 2024 [24] - Distributable cash flow decreased to $9.1 million in Q1 2025 from $11.7 million in Q1 2024, primarily due to higher cash interest expense and sustaining capital expenditures [24] Business Line Data and Key Metrics Changes - Retail segment gross profit increased by 16% to $63.2 million in Q1 2025 compared to $54.4 million in Q1 2024, driven by increases in both motor fuel and merchandise gross profit [8] - Wholesale segment gross profit declined by 1% to $26.7 million in Q1 2025, primarily due to a decline in fuel volume and rental income [17] - Inside sales on a same-site basis were down approximately 1.5% year over year, while inside sales excluding cigarettes declined by 1% [13] Market Data and Key Metrics Changes - Retail same-store fuel volume was approximately in line with the overall market, while same-store merchandise sales, excluding cigarettes, outperformed the market but were still below prior year results [7] - National gasoline demand was down approximately 4% for the quarter, reflecting broader market trends [10] - The company’s retail fuel margin increased by 10% year over year to 33.9 cents per gallon in Q1 2025, compared to 30.8 cents per gallon in Q1 2024 [8] Company Strategy and Development Direction - The company continues to focus on converting lessee dealer sites to company-operated retail sites, increasing overall retail site count by 64 sites year over year [16] - The strategy includes optimizing class of trade operations and ongoing real estate rationalization to generate additional capital for strategic investments [31] - The company aims to grow motor fuel and merchandise gross profit and overall segment profitability through site conversions and increased retail exposure [16] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a challenging start to the year due to subdued demand for fuel and merchandise, significant winter weather, and inflationary pressures [21] - Despite these challenges, management expressed optimism about the execution of their strategy and the potential for improved performance in the upcoming summer driving season [22] - The company remains focused on maintaining a strong balance sheet and generating value for unitholders [32] Other Important Information - The company divested seven sites for $8.6 million in proceeds during the quarter, with expectations to continue this momentum throughout 2025 [21] - Operating expenses for the retail segment increased by approximately 20% year over year, primarily due to an increase in average site count [26] - The company spent a total of $10.1 million on capital expenditures in Q1 2025, with $7.4 million allocated to growth-related projects [28] Q&A Session Summary - There were no questions during the Q&A session, and the call concluded with closing comments from the CEO [34][35]