Crossamerica partners lp reports second quarter 2015 results
Allentown, pa.--(business wire)--crossamerica partners lp (nyse: capl), headquartered in allentown, pa, a leading wholesale distributor of motor fuels and owner and lessee of real estate used in the retail distribution of motor fuels, today reported financial results for the second quarter ended june 30, 2015. "during the second quarter, we saw solid growth in our wholesale fuel supply sales and rental income, thanks to our acquisitions and strategic alliance with cst brands. our wholesale operating income saw an 11 percent increase with total wholesale volumes increasing 24 percent,” said joe topper, ceo of crossamerica partnership. “the nti and fuel drop transactions with cst brands and the one stop acquisition completed on july 1 provides us with additional cash flow to further increase our unit distribution over time.” wholesale segment during the second quarter 2015, we distributed, on a wholesale basis, 277.1 million gallons of motor fuel at an average wholesale gross margin of $0.053 per gallon, resulting in a wholesale motor fuel gross profit of $14.6 million. for the three month period ending june 30, 2014, we distributed, on a wholesale basis, 222.9 million gallons of fuel at an average wholesale gross margin of $0.067 per gallon, resulting in a wholesale motor fuel gross profit of $15.0 million. the decrease of 3% in gross profit from wholesale fuel sales for the second quarter of 2015 relative to 2014 was attributable to a decline in the average wholesale fuel margin partially offset by a 24% increase in volume driven by the acquisitions that have been completed since april 2014. wholesale fuel margin per gallon for the quarter was approximately 22% lower relative to the second quarter 2014, primarily due to the decline in the margin we receive from purchase discounts provided to us by our suppliers. the partnership receives certain discounts from suppliers based on a percentage of the purchase price of fuel and the dollar value of these discounts varies with the price of wholesale motor fuel. our gross profit from our other revenues for the wholesale segment, which primarily consist of rental income, was $6.9 million for the second quarter of 2015 compared to $6.2 million for the same period in 2014. the increase in rental income was primarily associated with our previously announced acquisitions of nice n easy and landmark stores, which we lease to cst. retail segment for the second quarter 2015, we sold 57.3 million gallons at an average retail motor fuel gross margin of $0.095 per gallon, net of commissions and credit card fees, resulting in a retail gross profit of $5.4 million. for the same period in 2014, we sold 32.3 million gallons at an average retail motor fuel gross margin of $0.052 per gallon, net of commissions and credit card fees, resulting in a retail gross profit of $1.7 million. the increase in retail gross profit from retail motor fuel sales for the second quarter of 2015 relative to 2014 was due primarily to the pmi and erickson acquisitions. during the quarter, we also generated $9.9 million in gross margin from the sale of food and merchandise from our pmi and erickson acquisitions. for the same period in 2014, we generated $3.2 million in gross margin from the sale of food and merchandise. non-gaap metrics distributable cash flow (see supplemental disclosure regarding non-gaap financial information below) was $14.3 million for the three month period ended june 30, 2015 compared to $13.5 million for the same period in 2014. the increase in distributable cash flow was due primarily to an increase in earnings driven primarily by the 2014 and 2015 acquisitions, including the fuel drop executed in january 2015, when compared to the same period in 2014. distributable cash flow per diluted limited partner unit was $0.57 for the three months ended june 30, 2015 and we made limited partner distribution per unit of $0.5475 during the quarter, resulting in a distribution coverage ratio of 1.04 times. sale (“dropdown”) of cst wholesale fuel supply equity interests and nti convenience stores on july 1, 2015, we closed on the purchase of an additional 12.5% limited partner equity interest in cst fuel supply in exchange for approximately 3.3 million common units and cash in the amount of $17.5 million, an aggregate consideration of $110.9 million. we also completed the purchase of the real property at 29 new-to-industry stores (ntis) from cst in exchange for 0.3 million common units and cash in the amount of $124.4 million, an aggregate consideration of $134 million. these transactions were approved by the conflicts committee of the general partner and the executive committee and full board of directors of cst. as of august 5, 2015, crossamerica’s total equity interest in cst fuel supply is 17.5%. liquidity and capital resources our revolving credit facility is secured by substantially all of the assets of crossamerica and its subsidiaries. as of june 30, 2015, after taking into account letters of credit and debt covenant constraints to availability, approximately $139.5 million was available for future borrowings. subsequent to the july 2015 acquisitions, the availability for future borrowings was approximately $98.9 million. in connection with future acquisitions, the revolving credit facility requires, among other things, that we have, after giving effect to such acquisition, at least $20 million of borrowing availability under the revolving credit facility and unrestricted cash on the balance sheet on the date of such acquisition. distributions the board of the directors of our general partner declared a quarterly distribution of $0.5475 per unit on june 5, 2015 with respect to the first quarter of 2015. the distribution was paid on june 19, 2015 to all unitholders of record as of june 15, 2015. we anticipate that the board of directors will consider the declaration of future distributions with respect to the second quarter of 2015 at its next scheduled board meeting in september to align the distribution declaration and payment with cst’s dividend declaration and payment schedule. the amount and timing of any distribution is subject to the discretion of the board of directors of our general partner. conference call the company will host a conference call on august 7, 2015 at 9:00 a.m. eastern time (8:00 a.m. central time) to discuss second quarter earnings results. the conference call numbers are 800-774-6070 or 630-691-2753 and the passcode for both is 5854571#. a live audio webcast of the conference call and the related earnings materials, including reconciliations of any non-gaap financial measures to gaap financial measures and any other applicable disclosures, will be available on that same day on the investor section of the crossamerica website (www.crossamericapartners.com). a slide presentation for the conference call will also be available on the investor section of the company's website. to listen to the audio webcast, go to http://www.crossamericapartners.com/en-us/investors/eventsandpresentations. after the live conference call, a replay will be available for a period of thirty days. the replay numbers are 888-843-7419 or 630-652-3042 and the passcode for both is 5854571#. an archive of the webcast will be available on the investor section of the crossamerica website at www.crossamericapartners.com/en-us/investors/eventsandpresentations within 24 hours after the call for a period of sixty days. net income (loss) attributable to crossamerica limited partners (c) diluted common units are not used in the calculation of diluted earnings per common unit because to do so would be antidilutive. segment results wholesale the following table highlights the results of operations and certain operating metrics of our wholesale segment (thousands of dollars, except for the number of distribution sites and per gallon amounts): total weighted average motor fuel distributed–third party sites total weighted average motor fuel distributed–intersegment and related party sites(g) retail the following table highlights the results of operations and certain operating metrics of our retail segment (thousands of dollars, except for the number of convenience stores and per gallon amounts): total system sites at the end of the period motor fuel gross profit per gallon, net of credit card fees and commissions motor fuel gross profit per gallon, net of credit card fees and commissions supplemental disclosure regarding non-gaap financial measures we use the non-gaap financial measures ebitda, adjusted ebitda, and distributable cash flow in this report. ebitda represents net income before deducting interest expense, income taxes and depreciation, amortization and accretion. adjusted ebitda represents ebitda as further adjusted to exclude equity funded expenses related to incentive compensation and the amended omnibus agreement, gains or losses on sales of assets, certain discrete acquisition related costs, such as legal and other professional fees and severance expenses associated with recently acquired companies, and certain other discrete non-cash items, such as inventory fair value adjustments arising from purchase accounting. distributable cash flow represents adjusted ebitda less cash interest expense, sustaining capital expenditures and current income tax expense. ebitda, adjusted ebitda, and distributable cash flow 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 our financial performance without regard to financing methods, capital structure or income taxes and our ability to incur and service debt and to fund capital expenditures. in addition, adjusted ebitda is used to assess the operating performance of our business on a consistent basis by excluding the impact of items which do not result directly from our wholesale distribution of motor fuel, the leasing of real property, or the day to day operations of our retail convenience store activities. ebitda, adjusted ebitda, and distributable cash flow are also used to assess our ability to generate cash sufficient to make distributions to our unit-holders. we believe the presentation of ebitda, adjusted ebitda, and distributable cash flow provides useful information to investors in assessing our financial condition and results of operations. ebitda, adjusted ebitda, and distributable cash flow 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, and distributable cash flow have important limitations as analytical tools because they exclude some but not all items that affect net income. additionally, because ebitda, adjusted ebitda, and distributable cash flow may be defined differently by other companies in our industry, our 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): 1.04 x 1.40 x 0.90 x 1.10 x as approved by the independent conflicts committee of the general partner and the executive committee of and cst’s board of directors, crossamerica and cst mutually agreed to settle the second quarter 2015 amounts due under the terms of the amended omnibus agreement in limited partnership units. the following table reconciles segment adjusted ebitda to consolidated net income (in thousands): about crossamerica partners lp crossamerica partners, headquartered in allentown, pa, is a leading wholesale distributor of motor fuels and owner and lessee of real estate used in the retail distribution of motor fuels. its general partner, crossamerica gp llc, is a wholly owned subsidiary of cst brands, inc., one of the largest independent retailers of motor fuels and convenience merchandise in north america. formed in 2012, crossamerica partners distributes fuel to over 1,100 locations and owns or leases nearly 750 sites in twenty-one states: pennsylvania, new jersey, ohio, florida, new york, massachusetts, kentucky, new hampshire, maine, tennessee, maryland, delaware, illinois, indiana, west virginia, virginia, texas, minnesota, michigan, wisconsin, and south dakota. the partnership has long-term established relationships with several major oil brands, including exxonmobil, bp, shell, chevron, sunoco, valero, gulf and citgo. crossamerica partners 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. safe harbor statement statements contained in this release that state the company’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-q or form 10-k filed with the securities and exchange commission, and available on the 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.
