• CrossAmerica Partners LP Reports Fourth Quarter and Full Year 2022 Results

    Source: Nasdaq GlobeNewswire / 27 Feb 2023 15:15:01   America/Chicago

    Allentown, PA, Feb. 27, 2023 (GLOBE NEWSWIRE) --

    CrossAmerica Partners LP Reports Fourth Quarter and Full Year 2022 Results

    • Reported Fourth Quarter 2022 Net Income of $17.1 million, Adjusted EBITDA of $44.3 million and Distributable Cash Flow of $33.3 million
    • Generated Full Year 2022 Net Income of $63.7 million, Adjusted EBITDA of $179.8 million and Distributable Cash Flow of $140.9 million
    • Reported Fourth Quarter 2022 Gross Profit for the Wholesale Segment of $32.8 million compared to $31.1 million of Gross Profit for the Fourth Quarter 2021 and Fourth Quarter 2022 Gross Profit for the Retail Segment of $60.4 million compared to $50.2 million of Gross Profit for the Fourth Quarter 2021
    • Generated Full Year 2022 Gross Profit for the Wholesale Segment of $130.7 million compared to $124.7 million of Gross Profit for the Full Year 2021 and Full Year 2022 Gross Profit for the Retail Segment of $245.0 million compared to $152.3 million of Gross Profit for the Full Year 2021
    • Leverage, as defined in the CAPL Credit Facility, was 3.7 times as of December 31. 2022, compared to 5.1 times as of December 31, 2021
    • The Distribution Coverage Ratio was 1.67 times for the Fourth Quarter 2022 compared to 1.56 times for the Fourth Quarter 2021 and for the Full Year 2022 was 1.77 times compared to 1.28 times for the comparable period of 2021
    • Appointed Thomas E. Kelso as a member of the Board of Directors, effective February 24, 2023
    • During the Fourth Quarter 2022, CrossAmerica changed its segment reporting to simplify the assessment of the performance of its operating segments

    Allentown, PA February 27, 2023 – CrossAmerica Partners LP (NYSE: CAPL) (“CrossAmerica” or the “Partnership”), a leading wholesale fuels distributor, convenience store operator, and owner and lessor of real estate used in the retail distribution of motor fuels, today reported financial results for the fourth quarter and full year ended December 31, 2022.

    “Our results for the quarter, and year, were outstanding and our year-end balance sheet reflects our strong overall financial position,” said Charles Nifong, President and CEO of CrossAmerica. “Due to the strategic actions the board and management team have taken since re-acquiring the general partner, the Partnership was well positioned to capitalize on the favorable operating environment in the second half of 2022. Our strong strategic position and our excellent operational execution combined to generate exceptional financial performance for the year.”

    New Segment Reporting

    During the fourth quarter of 2022, CrossAmerica changed its segment reporting to simplify the assessment of the performance of its operating segments. Prior to the fourth quarter, the wholesale segment included the wholesale fuel gross profit on intersegment sales by the wholesale segment to the retail segment. Likewise, the wholesale segment included an allocation of operating expenses related to the operation of CrossAmerica's retail sites consistent with the allocation of the overall fuel gross profit.

    Starting in the fourth quarter of 2022, the wholesale segment includes only the fuel gross profit on sales to lessee dealers and independent dealers and the retail segment includes the entire fuel gross profit on sales at CrossAmerica's company operated and commission agent sites. Likewise, operating expenses are allocated to each segment based on estimates of the level of effort expended on the lessee and independent dealer business in CrossAmerica's wholesale segment; and the company operated and commission site business in the Partnership’s retail segment.

    CrossAmerica has recast the results of its segments for periods prior to October 1, 2022 to be consistent with the new segment reporting. CrossAmerica has provided tables at the end of this press release to show the effects of this new segment reporting for the past quarterly periods of 2022 and 2021.

    Non-GAAP Measures and Same Store Metrics

    Non-GAAP measures used in this release include EBITDA, Adjusted EBITDA, Distributable Cash Flow and Distribution Coverage Ratio. These Non-GAAP measures are further described and reconciled to their most directly comparable GAAP measures in the Supplemental Disclosure Regarding Non-GAAP Financial Measures section of this release.

    Same store fuel volume and same store merchandise sales include aggregated individual store results for all stores that had fuel volume or merchandise sales in all months for both periods. Same store merchandise sales excludes branded food sales and other revenues such as lottery commissions and car wash sales. Joe’s Kwik Marts’ volume/sales are not included in the full year same store metrics, as the stores were not part of the CrossAmerica retail segment in all months for both years (2022 and 2021).

    Fourth Quarter and Full Year Results

    Consolidated Results

    Key Operating MetricsQ4 2022Q4 2021 FY2022FY2021
    Net Income$17.1M$12.0M $63.7M$21.7M
    Adjusted EBITDA$44.3M$37.0M $179.8M$123.3M
    Distributable Cash Flow$33.3M$31.0M $140.9M$102.2M
    Distribution Coverage Ratio1.67x1.56x 1.77x1.28x

    CrossAmerica reported increases in Operating Income, Net Income, Adjusted EBITDA and its Distribution Coverage Ratio for the fourth quarter 2022 compared to the fourth quarter 2021 primarily due to improved fuel gross profit performance in both the wholesale and retail segments. CrossAmerica also reported increases in Operating Income, Net Income, Adjusted EBITDA and its Distribution Coverage Ratio for the full year 2022 compared to the full year 2021 due to the acquisition of assets from 7-Eleven in the third quarter of 2021 as well as improved fuel gross profit performance in the wholesale and retail segments.

    Wholesale Segment

    Key Operating MetricsQ4 2022Q4 2021 FY 2022FY 2021
    Wholesale segment gross profit$32.8M$31.1M $130.7M$124.7M
    Wholesale motor fuel gallons distributed213.5M230.6M 844.5M931.3M
    Average wholesale gross profit per gallon$0.087$0.078 $0.087$0.075

    During the fourth quarter 2022, CrossAmerica’s wholesale segment gross profit increased 6% compared to the fourth quarter 2021. This was driven by an increase in motor fuel gross profit resulting from a 12% increase in fuel margin per gallon, partially offset by a 7% decline in wholesale volume distributed.

    For the full year 2022, the Partnership's gross profit increased 5% from $124.7 million in 2021 to $130.7 million for the full year 2022. During both the fourth quarter and full year 2022, the Partnership’s wholesale fuel margin benefited from its ongoing execution of strategic initiatives and higher variable margins. Higher wholesale variable margins were due to greater market volatility during both the fourth quarter and full year 2022 as compared to the fourth quarter and full year 2021. CrossAmerica also benefited from higher terms discounts as a result of higher fuel prices during the quarter and full year 2022 as compared to the fourth quarter and full year 2021. Wholesale volume distributed declined primarily due to lower volume in the CrossAmerica base business during the fourth quarter and full year and, to a lesser extent, the Partnership’s real estate optimization efforts.

    Retail Segment

    Key Operating MetricsQ4 2022Q4 2021 FY 2022FY 2021
    Retail segment gross profit$60.4M$50.2M $245.0M$152.3M
          
    Retail segment motor fuel gallons distributed125.1M125.3M 496.6M403.9M
    Same store motor fuel gallons distributed119.2M120.2M 324.8M329.3M
    Retail segment motor fuel gross profit$35.9M$27.8M $146.5M$79.3M
    Retail segment margin per gallon, before deducting credit card fees and commissions$0.383 $0.309  $0.396 $0.280 
          
    Same store merchandise sales excluding cigarettes*$42.6M$40.3M $103.9M$101.9M
    Merchandise gross profit*$18.6M$17.2M $76.1M$55.1M
    Merchandise gross profit percentage* 27.5% 25.4%  27.2% 26.4%

    *Includes only company operated retail sites

    For the fourth quarter 2022, the retail segment generated a 20% increase in gross profit compared to the fourth quarter 2021. The retail segment generated a 61% increase in gross profit for the full year 2022 when compared to the full year 2021. The increases for both the fourth quarter and full year 2022 were primarily due to higher motor fuel and merchandise gross profit, partially offset by increased expenses, particularly in the areas of labor and maintenance.

    The retail segment sold 125.1 million of retail fuel gallons during the fourth quarter 2022, which was relatively flat when compared to the fourth quarter 2021. Same store retail segment fuel volume for the fourth quarter 2022 declined 1% from 120.2 million gallons during the fourth quarter 2021 to 119.2 million gallons. The retail segment generated $8.1 million of additional motor fuel gross profit for the three months ended December 31, 2022, as compared to the same period in 2021 due to higher fuel margins per gallon.

    For the full year 2022, CrossAmerica sold 496.6 million of retail fuel gallons, which was an increase of 23% when compared to the full year 2021. The increase was primarily driven by the acquisition of assets from 7-Eleven, which occurred primarily during the third quarter 2021. Same store fuel volume for the full year 2022 was 324.8 million gallons compared to 329.3 million gallons for the same period of 2021, representing a slight decline of 1%. The retail segment generated $67.2 million of additional motor fuel gross profit for the twelve months ended December 31, 2022, as compared to the same period in 2021 due to both an increase in overall volume and a higher fuel margin per gallon.

    For both the fourth quarter and full year 2022, CrossAmerica’s merchandise gross profit and other revenue increased when compared to the fourth quarter and full year 2021. The fourth quarter increase was primarily due to an increase in overall store sales due to higher retail prices and improved product margins. Same store merchandise sales excluding cigarettes increased 6% for the fourth quarter 2022 when compared to the fourth quarter 2021. The full year increase was due to higher retail prices and the increase in company operated sites driven by the acquisition of assets from 7-Eleven. Same store merchandise sales excluding cigarettes increased 2% for the full year 2022 when compared to the full year 2021. Merchandise gross profit percentage increased from 25.4% for the fourth quarter 2021 to 27.5% for the fourth quarter 2022 primarily due to improved merchandise margins in the categories of packaged beverages, snacks and certain tobacco products, including cigarettes. For the full year 2022, the merchandise gross profit percentage increased to 27.2% from 26.4% for the full year 2021 due to similar factors that impacted the fourth quarter improvement in merchandise gross profit margin.

    Acquisition and Divestment Activity

    On November 9, 2022, CrossAmerica closed on the acquisition of assets from Community Service Stations, Inc. for a purchase price of $27.5 million plus working capital. The assets consisted of wholesale fuel supply contracts to 38 dealer owned locations, 35 sub-wholesaler accounts and two commission locations (1 fee based and 1 lease). CrossAmerica funded this acquisition through borrowings on the CAPL Credit Facility and cash on hand.

    During the twelve months ended December 31, 2022, CrossAmerica sold 27 properties for $12.9 million in proceeds, resulting in a net gain of $3.5 million.

    Liquidity and Capital Resources

    As of December 31, 2022, CrossAmerica had $606.1 million outstanding under its CAPL Credit Facility and $159.0 million outstanding under its JKM Credit Facility. As of February 23, 2023, after taking into consideration debt covenant restrictions, approximately $120.5 million was available for future borrowings under the CAPL Credit Facility. Leverage, as defined in the CAPL Credit Facility, was 3.7 times as of December 31, 2022, compared to 5.1 times as of December 31, 2021. As of December 31, 2022, CrossAmerica was in compliance with its financial covenants under the credit facilities.

    Distributions

    On January 19, 2023, the Board of the Directors of CrossAmerica’s General Partner (“Board”) declared a quarterly distribution of $0.5250 per limited partner unit attributable to the fourth quarter 2022. As previously announced, the distribution was paid on February 10, 2023 to all unitholders of record as of February 3, 2023. The amount and timing of any future distributions is subject to the discretion of the Board as provided in CrossAmerica’s Partnership Agreement.

    New Board Member

    Effective as of February 24, 2023, Lehigh Gas GP Holdings LLC, as the sole member of the General Partner, appointed Thomas E. Kelso as a member of the Board. Prior to being appointed a board member, Mr. Kelso co-founded and operated Ocean Petroleum Co., Inc., a petroleum distributorship, and then joined Matrix Capital Markets Group, Inc. in 1997 and created the firm’s Downstream Energy and Convenience Retail Investment Banking Group. He served as Group Head until he became President of the firm in 2017. Before retiring from Matrix in 2022, Mr. Kelso managed scores of petroleum distribution and c-store transactions and has been a frequent speaker at various industry trade group meetings discussing topics related to capital formation and mergers and acquisitions. He continues to hold Series 79, 63, 24 and 99 FINRA securities licenses and has been active in numerous charitable boards and community endeavors. Full biographical information for Mr. Kelso is available on CrossAmerica’s website and in CrossAmerica’s 2022 Annual Report on Form 10-K.

    The Board has named Mr. Kelso as a member of the audit and conflicts committees of the Board.

    Conference Call

    The Partnership will host a conference call on February 28, 2023 at 9:00 a.m. Eastern Time to discuss fourth quarter and full year 2022 earnings results. A live webcast of the call can be accessed by going to the investor section of the CrossAmerica Partners website at https://caplp.gcs-web.com/webcasts-presentations. Interested parties may participate live via telephone by registering at a conference call link also provided at https://caplp.gcs-web.com/webcasts-presentations. Please follow this link and register with a valid email address. A PIN will be provided to you with dial-in instructions. Also included on the website on that same day will be related earnings materials, including reconciliations of any non-GAAP financial measures to GAAP financial measures and any other applicable disclosures. After the live conference call, an archive of the webcast will be available on the investor section of the CrossAmerica site at https://caplp.gcs-web.com/webcasts-presentations within 24 hours after the call for a period of sixty days.

    CROSSAMERICA PARTNERS LP
    CONSOLIDATED BALANCE SHEETS
    (Thousands of Dollars, except unit data)

      December 31, 
      2022  2021 
           
    ASSETS      
    Current assets:      
    Cash and cash equivalents $16,054  $7,648 
    Accounts receivable, net of allowances of $686 and $458, respectively  30,825   33,331 
    Accounts receivable from related parties  743   1,149 
    Inventory  47,307   46,100 
    Assets held for sale  983   4,907 
    Current portion of interest rate swap contracts  13,827   115 
    Other current assets  8,667   13,065 
    Total current assets  118,406   106,315 
    Property and equipment, net  728,379   755,454 
    Right-of-use assets, net  164,942   169,333 
    Intangible assets, net  113,919   114,187 
    Goodwill  99,409   100,464 
    Interest rate swap contracts, less current portion  3,401   2,916 
    Other assets  26,142   21,473 
    Total assets $1,254,598  $1,270,142 
           
    LIABILITIES AND EQUITY      
    Current liabilities:      
    Current portion of debt and finance lease obligations $11,151  $10,939 
    Current portion of operating lease obligations  35,345   34,832 
    Accounts payable  77,048   67,173 
    Accounts payable to related parties  7,798   7,679 
    Accrued expenses and other current liabilities  23,144   20,682 
    Motor fuel and sales taxes payable  20,813   22,585 
    Total current liabilities  175,299   163,890 
    Debt and finance lease obligations, less current portion  761,638   810,635 
    Operating lease obligations, less current portion  135,220   140,149 
    Deferred tax liabilities, net  10,588   12,341 
    Asset retirement obligations  46,431   45,366 
    Other long-term liabilities  46,289   41,203 
    Total liabilities  1,175,465   1,213,584 
           
    Commitments and contingencies (Notes 15 and 16)      
           
    Preferred membership interests  26,156    
           
    Equity:      
    Common units— 37,937,604 and 37,896,556 units issued and
    outstanding at December 31, 2022 and 2021, respectively
      36,508   53,528 
    Accumulated other comprehensive income  16,469   3,030 
    Total equity  52,977   56,558 
    Total liabilities and equity $1,254,598  $1,270,142 

    CROSSAMERICA PARTNERS LP
    CONSOLIDATED STATEMENTS OF OPERATIONS
    (Thousands of Dollars, Except Unit and Per Unit Amounts)

      (Unaudited)
    Three Months Ended
    December 31,
      Year Ended
    December 31,
     
      2022  2021  2022  2021 
    Operating revenues (a) $1,124,773  $1,077,519  $4,967,424  $3,579,259 
    Cost of sales (b)  1,031,507   996,259   4,591,653   3,302,306 
    Gross profit  93,266   81,260   375,771   276,953 
                 
    Operating expenses:            
    Operating expenses (c)  43,538   39,058   174,708   134,079 
    General and administrative expenses  6,813   6,501   25,575   30,930 
    Depreciation, amortization and accretion expense  19,102   21,120   80,625   77,852 
    Total operating expenses  69,453   66,679   280,908   242,861 
    Gain on dispositions and lease terminations, net  1,763   1,662   1,143   2,037 
    Operating income  25,576   16,243   96,006   36,129 
    Other income, net  152   125   504   544 
    Interest expense  (9,767)  (5,949)  (32,100)  (18,244)
    Income before income taxes  15,961   10,419   64,410   18,429 
    Income tax (benefit) expense  (1,129)  (1,561)  714   (3,225)
    Net income  17,090   11,980   63,696   21,654 
    Accretion of preferred membership interests  588      1,726    
    Net income available to limited partners $16,502  $11,980  $61,970  $21,654 
                 
                 
    Earnings per common unit            
    Basic $0.44  $0.32  $1.63  $0.57 
    Diluted $0.43  $0.32  $1.63  $0.57 
                 
    Weighted-average common units:            
    Basic common units  37,928,970   37,891,701   37,916,829   37,880,910 
    Diluted common units  38,085,600   37,913,003   38,059,774   37,884,124 
                 
    Supplemental information:            
    (a) includes excise taxes of: $65,913  $72,584  $270,501  $228,764 
    (a) includes rent income of:  21,370   20,350   84,106   83,182 
    (b) excludes depreciation, amortization and accretion            
    (b) includes rent expense of:  5,765   5,853   23,457   23,765 
    (c) includes rent expense of:  3,733   3,717   15,254   13,531 

    CROSSAMERICA PARTNERS LP
    CONSOLIDATED STATEMENTS OF CASH FLOWS
    (Thousands of Dollars)

      For the Year Ended December 31, 
      2022  2021  2020 
    Cash flows from operating activities:         
    Net income $63,696  $21,654  $107,456 
    Adjustments to reconcile net income to net cash provided by
    operating activities:
             
    Depreciation, amortization and accretion expense  80,625   77,852   68,742 
    Amortization of deferred financing costs  2,788   1,862   1,042 
    Credit loss expense  232   253   1,210 
    Deferred income tax benefit  (1,753)  (3,761)  (4,436)
    Equity-based employee and director compensation expense  2,294   1,311   172 
    Gain on dispositions and lease terminations, net  (1,143)  (2,037)  (88,912)
    Changes in operating assets and liabilities, net of acquisitions  14,578   (1,666)  19,210 
    Net cash provided by operating activities  161,317   95,468   104,484 
              
    Cash flows from investing activities:         
    Principal payments received on notes receivable  203   793   974 
    Proceeds from sale of assets  13,344   15,359   21,729 
    Proceeds from sale of assets to Circle K        23,049 
    Capital expenditures  (30,351)  (41,859)  (37,057)
    Cash paid in connection with acquisitions, net of cash acquired  (29,594)  (272,983)  (28,244)
    Net cash used in investing activities  (46,398)  (298,690)  (19,549)
              
    Cash flows from financing activities:         
    Borrowings under revolving credit facilities  114,100   194,895   106,180 
    Repayments on revolving credit facilities  (138,538)  (77,500)  (112,000)
    Borrowings under the Term Loan Facility  1,120   182,460    
    Repayments on the Term Loan Facility  (24,600)      
    Net proceeds from issuance of preferred membership interests  24,430       
    Payments of finance lease obligations  (2,724)  (2,604)  (2,458)
    Payments of deferred financing costs  (474)  (7,201)   
    Distributions paid on distribution equivalent rights  (202)  (141)  (40)
    Distributions paid to holders of the IDRs        (133)
    Distributions paid on common units  (79,625)  (79,552)  (77,751)
    Net cash (used in) provided by financing activities  (106,513)  210,357   (86,202)
    Net increase (decrease) in cash and cash equivalents  8,406   7,135   (1,267)
              
    Cash and cash equivalents at beginning of period  7,648   513   1,780 
    Cash and cash equivalents at end of period $16,054  $7,648  $513 

    Segment Results

    Wholesale

    The following table highlights the results of operations and certain operating metrics of the Wholesale segment (thousands of dollars, except for the number of distribution sites and per gallon amounts):

      Three Months Ended
    December 31,
      Year Ended
    December 31,
     
      2022  2021  2022  2021 
    Gross profit:            
    Motor fuel gross profit $18,659  $17,990  $73,378  $70,221 
    Rent gross profit  12,908   12,006   50,852   50,736 
    Other revenues  1,259   1,063   6,509   3,721 
    Total gross profit  32,826   31,059   130,739   124,678 
    Operating expenses  (8,956)  (8,942)  (37,072)  (37,906)
    Operating Income $23,870  $22,117  $93,667  $86,772 
                 
    Motor fuel distribution sites (end of period): (a)            
    Independent dealers (b)  663   666   663   666 
    Lessee dealers (c)  619   637   619   637 
    Total motor fuel distribution sites  1,282   1,303   1,282   1,303 
                 
    Motor fuel distribution sites (average):  1,274   1,309   1,286   1,325 
                 
    Volume of gallons distributed  213,501   230,643   844,486   931,288 
                 
    Margin per gallon $0.087  $0.078  $0.087  $0.075 

    (a) In addition, CrossAmerica distributed motor fuel to sub-wholesalers who distributed to additional sites.
    (b) The decrease in the independent dealer site count for both periods (fourth quarter 2021 to fourth quarter 2022 and December 31, 2021 to December 31, 2022) was primarily attributable to expiration of contracts, most of which were lower margin, partially offset by the increase in independent dealer sites as a result of the acquisition of assets from Community Service Stations, Inc.
    (c) The decreases in the lessee dealer count for both periods (fourth quarter 2021 to fourth quarter 2022 and December 31, 2021 to December 31, 2022) were primarily attributable to the real estate rationalization effort.

    Retail

    The following table highlights the results of operations and certain operating metrics of the Retail segment (in thousands, except for the number of retail sites):

      Three Months Ended
    December 31,
      Year Ended
    December 31,
     
      2022  2021  2022  2021 
    Gross profit:            
    Motor fuel $35,925  $27,791  $146,546  $79,318 
    Merchandise  18,639   17,241   76,135   55,117 
    Rent  2,697   2,491   9,797   8,681 
    Other revenue  3,179   2,679   12,554   9,159 
    Total gross profit  60,440   50,202   245,032   152,275 
    Operating expenses  (34,582)  (30,116)  (137,636)  (96,173)
    Operating income $25,858  $20,086  $107,396  $56,102 
                 
    Retail sites (end of period):            
    Company operated retail sites  255   252   255   252 
    Commission agents  200   198   200   198 
    Total retail segment sites  455   450   455   450 
                 
    Total retail segment statistics:            
    Volume of gallons sold  125,110   125,286   496,634   403,850 
    Same store total system gallons sold  119,181   120,199   324,763   329,346 
    Average retail fuel sites  451   451   452   389 
    Margin per gallon, before deducting credit card fees and commissions $0.383  $0.309  $0.396  $0.280 
                 
    Company operated site statistics:            
    Average retail fuel sites  253   253   253   187 
    Same store fuel volume (a)  77,785   79,388   167,762   170,082 
    Margin per gallon, before deducting credit card fees $0.422  $0.328  $0.426  $0.309 
    Same store merchandise sales (a) $63,283  $62,763  $150,408  $153,305 
    Same store merchandise sales excluding cigarettes (a) $42,597  $40,258  $103,914  $101,888 
    Merchandise gross profit percentage  27.5%  25.4%  27.2%  26.4%
                 
    Commission site statistics:            
    Average retail fuel sites  198   198   199   202 
    Margin per gallon, before deducting credit card fees and commissions $0.310  $0.270  $0.336  $0.238 

    (a) Same store fuel volume and same store merchandise sales include aggregated individual store results for all stores that had fuel volume or merchandise sales in all months for both periods. Same store merchandise sales excludes branded food sales and other revenues such as lottery commissions and car wash sales.

    Supplemental Disclosure Regarding Non-GAAP Financial Measures

    CrossAmerica uses the non-GAAP financial measures EBITDA, Adjusted EBITDA, Distributable Cash Flow and Distribution Coverage Ratio. EBITDA represents net income before deducting interest expense, income taxes and depreciation, amortization and accretion (which includes certain impairment charges). Adjusted EBITDA represents EBITDA as further adjusted to exclude equity-based compensation expense, gains or losses on dispositions and lease terminations, net and certain discrete acquisition related costs, such as legal and other professional fees, separation benefit costs and certain other discrete non-cash items arising from purchase accounting. Distributable Cash Flow represents Adjusted EBITDA less cash interest expense, sustaining capital expenditures and current income tax expense. The Distribution Coverage Ratio is computed by dividing Distributable Cash Flow by distributions paid.

    EBITDA, Adjusted EBITDA, Distributable Cash Flow and Distribution Coverage Ratio are used as supplemental financial measures by management and by external users of our financial statements, such as investors and lenders. EBITDA and Adjusted EBITDA are used to assess CrossAmerica’s financial performance without regard to financing methods, capital structure or income taxes and the ability to incur and service debt and to fund capital expenditures. In addition, Adjusted EBITDA is used to assess the operating performance of the Partnership’s business on a consistent basis by excluding the impact of items which do not result directly from the wholesale distribution of motor fuel, the leasing of real property, or the day to day operations of CrossAmerica’s retail site activities. EBITDA, Adjusted EBITDA, Distributable Cash Flow and Distribution Coverage Ratio are also used to assess the ability to generate cash sufficient to make distributions to CrossAmerica’s unitholders.

    CrossAmerica believes the presentation of EBITDA, Adjusted EBITDA, Distributable Cash Flow and Distribution Coverage Ratio provides useful information to investors in assessing the financial condition and results of operations. EBITDA, Adjusted EBITDA, Distributable Cash Flow and Distribution Coverage Ratio should not be considered alternatives to net income or any other measure of financial performance or liquidity presented in accordance with U.S. GAAP. EBITDA, Adjusted EBITDA, Distributable Cash Flow and Distribution Coverage Ratio have important limitations as analytical tools because they exclude some but not all items that affect net income. Additionally, because EBITDA, Adjusted EBITDA, Distributable Cash Flow and Distribution Coverage Ratio may be defined differently by other companies in the industry, CrossAmerica’s definitions may not be comparable to similarly titled measures of other companies, thereby diminishing their utility.

    The following table presents reconciliations of EBITDA, Adjusted EBITDA, and Distributable Cash Flow to net income, the most directly comparable U.S. GAAP financial measure, for each of the periods indicated (in thousands, except for per unit amounts):

      Three Months Ended
    December 31,
      Year Ended
    December 31,
     
      2022  2021  2022  2021 
    Net income (a) $17,090  $11,980  $63,696  $21,654 
    Interest expense  9,767   5,949   32,100   18,244 
    Income tax (benefit) expense  (1,129)  (1,561)  714   (3,225)
    Depreciation, amortization and accretion  19,102   21,120   80,625   77,852 
    EBITDA  44,830   37,488   177,135   114,525 
    Equity-based employee and director compensation expense  686   215   2,294   1,311 
    Gain on dispositions and lease terminations, net  (1,763)  (1,662)  (1,143)  (2,037)
    Acquisition-related costs (b)  523   959   1,508   9,461 
    Adjusted EBITDA  44,276   37,000   179,794   123,260 
    Cash interest expense  (9,032)  (5,269)  (29,312)  (16,382)
    Sustaining capital expenditures (c)  (1,973)  (754)  (7,164)  (4,161)
    Current income tax benefit (expense)  53      (2,466)  (548)
    Distributable Cash Flow $33,324  $30,977  $140,852  $102,169 
    Distributions paid $19,913  $19,893  $79,625  $79,552 
    Distribution Coverage Ratio (d) 1.67x  1.56x  1.77x  1.28x 

    (a) Beginning in the second quarter of 2022, CrossAmerica reconciled Adjusted EBITDA to Net Income rather than to Net income available to limited partners. The difference between Net income and Net income available to limited partners is that, beginning in the second quarter of 2022, the accretion of preferred membership interests issued in late March 2022 is a deduction from Net income in computing Net income available to limited partners. Because Adjusted EBITDA is used to assess our financial performance, without regard to capital structure, CrossAmerica believes Adjusted EBITDA should be reconciled with Net Income, so that the calculation isn’t impacted by the accretion of preferred membership interests. This approach is comparable to the reconciliation of Adjusted EBITDA to Net income available to limited partners in past periods, as the Partnership has not recorded accretion of preferred membership interests in past periods.
    (b) Relates to certain discrete acquisition-related costs, such as legal and other professional fees, separation benefit costs and certain purchase accounting adjustments associated with recently acquired businesses.
    (c) Under the Partnership Agreement, sustaining capital expenditures are capital expenditures made to maintain CrossAmerica's long-term operating income or operating capacity. Examples of sustaining capital expenditures are those made to maintain existing contract volumes, including payments to renew existing distribution contracts, or to maintain the sites in conditions suitable to lease, such as parking lot or roof replacement/renovation, or to replace equipment required to operate the existing business.
    (d) In 2022, CrossAmerica updated its calculation of its Distribution Coverage Ratio to divide Distributable Cash Flow by distributions paid, whereas in prior periods, the Distribution Coverage Ratio was calculated as Distributable Cash Flow divided by the weighted-average diluted common units and then CrossAmerica divided that result by distributions paid per limited partner unit.

    New Segment Reporting

    During the fourth quarter of 2022, CrossAmerica changed its segment reporting to simplify the assessment of performance of its operating segments. CrossAmerica has recast the results of its segments for periods prior to October 1, 2022 to be consistent with the new segment reporting. CrossAmerica has provided tables below to show the effects of this new segment reporting for the past quarterly periods of 2022 and 2021.

    Wholesale Segment

    2022

      Three Months Ended,  Year Ended
    December 31,
     
      3/31/2022  6/30/2022  9/30/2022  12/31/2022  2022 
    Gross profit:               
    Motor fuel gross profit $16,184  $19,034  $19,501  $18,659  $73,378 
    Rent gross profit  12,339   12,646   12,959   12,908   50,852 
    Other revenues  1,786   1,807   1,657   1,259   6,509 
    Total gross profit  30,309   33,487   34,117   32,826   130,739 
    Operating expenses  (8,716)  (9,329)  (10,071)  (8,956)  (37,072)
    Operating Income $21,593  $24,158  $24,046  $23,870  $93,667 
                    
    Motor fuel distribution sites (end of period):               
    Independent dealers  656   637   623   663   663 
    Lessee dealers  642   645   641   619   619 
    Total motor fuel distribution sites  1,298   1,282   1,264   1,282   1,282 
                    
    Motor fuel distribution sites (average):  1,302   1,289   1,273   1,274   1,286 
                    
    Volume of gallons distributed  203,915   214,413   212,657   213,501   844,486 
                    
    Margin per gallon $0.079  $0.089  $0.092  $0.087  $0.087 

    2021

      Three Months Ended,  Year Ended
    December 31,
     
      3/31/2021  6/30/2021  9/30/2021  12/31/2021  2021 
    Gross profit:               
    Motor fuel gross profit $15,523  $18,529  $18,179  $17,990  $70,221 
    Rent gross profit  12,493   12,973   13,264   12,006   50,736 
    Other revenues  1,134   729   795   1,063   3,721 
    Total gross profit  29,150   32,231   32,238   31,059   124,678 
    Operating expenses  (9,755)  (10,730)  (8,479)  (8,942)  (37,906)
    Operating Income $19,395  $21,501  $23,759  $22,117  $86,772 
                    
    Motor fuel distribution sites (end of period):               
    Independent dealers  683   675   676   666   666 
    Lessee dealers  648   651   643   637   637 
    Total motor fuel distribution sites  1,331   1,326   1,319   1,303   1,303 
                    
    Motor fuel distribution sites (average):  1,338   1,328   1,325   1,309   1,325 
                    
    Volume of gallons distributed  213,708   242,392   244,545   230,643   931,288 
                    
    Margin per gallon $0.073  $0.076  $0.074  $0.078  $0.075 

    Retail Segment

    2022

      Three Months Ended,  Year Ended
    December 31,
     
      3/31/2022  6/30/2022  9/30/2022  12/31/2022  2022 
    Gross profit:               
    Motor fuel $26,304  $29,841  $54,476  $35,925  $146,546 
    Merchandise  16,682   20,165   20,649   18,639   76,135 
    Rent  2,447   2,258   2,395   2,697   9,797 
    Other revenue  3,088   3,194   3,093   3,179   12,554 
    Total gross profit  48,521   55,458   80,613   60,440   245,032 
    Operating expenses  (33,393)  (32,887)  (36,774)  (34,582)  (137,636)
    Operating income $15,128  $22,571  $43,839  $25,858  $107,396 
                    
    Retail sites (end of period):               
    Company operated retail sites  255   253   252   255   255 
    Commission agents  201   199   198   200   200 
    Total retail segment sites  456   452   450   455   455 
                    
    Total retail segment statistics:               
    Volume of gallons sold  116,040   128,815   126,669   125,110   496,634 
    Average retail fuel sites  454   454   451   451   452 
    Margin per gallon, before deducting credit card fees and commissions $0.319  $0.340  $0.534  $0.383  $0.396 
                    
    Company operated site statistics:               
    Average retail fuel sites  254   254   253   253   253 
    Same store fuel volume  39,182   45,078   45,829   77,785   167,762 
    Margin per gallon, before deducting credit card fees $0.327  $0.350  $0.596  $0.422  $0.426 
    Same store merchandise sales $34,447  $40,744  $42,044  $63,283  $150,408 
    Same store merchandise sales excluding cigarettes $23,081  $28,187  $29,167  $42,597  $103,914 
    Merchandise gross profit percentage  26.8%  27.3%  27.1%  27.5%  27.2%
                    
    Commission site statistics:               
    Average retail fuel sites  200   200   198   198   199 
    Margin per gallon, before deducting credit card fees and commissions $0.303  $0.320  $0.410  $0.310  $0.336 

    2021

      Three Months Ended,  Year Ended
    December 31,
     
      3/31/2021  6/30/2021  9/30/2021  12/31/2021  2021 
    Gross profit:               
    Motor fuel $11,429  $16,725  $23,373  $27,791  $79,318 
    Merchandise  10,364   11,969   15,543   17,241   55,117 
    Rent  2,066   1,858   2,266   2,491   8,681 
    Other revenue  1,859   2,311   2,310   2,679   9,159 
    Total gross profit  25,718   32,863   43,492   50,202   152,275 
    Operating expenses  (19,648)  (20,340)  (26,069)  (30,116)  (96,173)
    Operating income $6,070  $12,523  $17,423  $20,086  $56,102 
                    
    Retail sites (end of period):               
    Company operated retail sites  151   152   248   252   252 
    Commission agents  205   202   200   198   198 
    Total retail segment sites  356   354   448   450   450 
                    
    Total retail segment statistics:               
    Volume of gallons sold  78,235   89,806   110,523   125,286   403,850 
    Average retail fuel sites  356   353   395   451   389 
    Margin per gallon, before deducting credit card fees and commissions $0.224  $0.268  $0.295  $0.309  $0.280 
                    
    Company operated site statistics:               
    Average retail fuel sites  151   150   194   253   187 
    Same store fuel volume  37,499   44,340   49,478   79,388   170,082 
    Margin per gallon, before deducting credit card fees $0.261  $0.299  $0.321  $0.328  $0.309 
    Same store merchandise sales $35,579  $42,017  $42,871  $62,763  $153,305 
    Same store merchandise sales excluding cigarettes $22,953  $27,952  $28,737  $40,258  $101,888 
    Merchandise gross profit percentage  27.4%  26.5%  26.7%  25.4%  26.4%
                    
    Commission site statistics:               
    Average retail fuel sites  205   203   201   198   202 
    Margin per gallon, before deducting credit card fees and commissions $0.190  $0.236  $0.255  $0.270  $0.238 

    About CrossAmerica Partners LP

    CrossAmerica Partners LP is a leading wholesale distributor of motor fuels, convenience store operator, and owner and lessee of real estate used in the retail distribution of motor fuels. Its general partner, CrossAmerica GP LLC, is indirectly owned and controlled by entities affiliated with Joseph V. Topper, Jr., the founder of CrossAmerica Partners and a member of the board of the general partner since 2012. Formed in 2012, CrossAmerica Partners LP is a distributor of branded and unbranded petroleum for motor vehicles in the United States and distributes fuel to approximately 1,750 locations and owns or leases approximately 1,150 sites. With a geographic footprint covering 34 states, the Partnership has well-established relationships with several major oil brands, including ExxonMobil, BP, Shell, Sunoco, Valero, Gulf, Citgo, Marathon and Phillips 66. CrossAmerica Partners LP ranks as one of ExxonMobil’s largest distributors by fuel volume in the United States and in the top 10 for additional brands. For additional information, please visit www.crossamericapartners.com.

    Contact

    Investor Relations: Randy Palmer, rpalmer@caplp.com or 210-742-8316

    Cautionary Statement Regarding Forward-Looking Statements

    Statements contained in this release that state the Partnership’s or management’s expectations or predictions of the future are forward-looking statements. The words “believe,” “expect,” “should,” “intends,” “estimates,” “target” and other similar expressions identify forward-looking statements. It is important to note that actual results could differ materially from those projected in such forward-looking statements. For more information concerning factors that could cause actual results to differ from those expressed or forecasted, see CrossAmerica’s Form 10-K or Forms 10-Q filed with the Securities and Exchange Commission, and available on CrossAmerica’s website at www.crossamericapartners.com. The Partnership undertakes no obligation to publicly update or revise any statements in this release, whether as a result of new information, future events or otherwise.


    Primary Logo

Share on,