CrossAmerica Partners LP Q3 FY2024 earnings call

• Financial results: Net income was $10.7 million in Q3 2024 vs $12.3 million in Q3 2023. Adjusted EBITDA was $43.9 million in Q3 2024, slightly down 1% from prior year. Distributable cash flow was $27.1 million in Q3 2024 vs $31.4 million in Q3 2023.
• Operating expenses: Increased $10.2 million compared to Q3 2023. Retail segment operating expenses increased due to site count increase, especially company-operated locations. Same-store employment costs down ~1% for third consecutive quarter. G&A expenses increased $0.4 million due to higher management fees and legal expense.
• Capital expenditures: Total capital expenditures were $7.7 million in Q3, with $5.1 million growth-related. Growth-related spending included investments in company-operated portfolio backcourt and site image.
• Credit facility: Total credit facility balance was $772.4 million as of September 30, 2024, a $26 million decrease from March 31, 2024. Credit facility-defined leverage ratio was 4.21x as of September 30, 2024, down from 4.39x on June 30, 2024. Cash interest expense increased from $10.1 million in Q3 2023 to $13.7 million in Q3 2024

Retail Segment

• Gross profit: Increased 24% and operating income increased 19% compared to prior year. Motor fuel gross profit increased 26% and merchandise gross profit increased 20% for the quarter. Fuel margin was $0.406 per gallon in Q3 2024, up 9% year-over-year. Same-store retail volume was flat year-over-year, outperforming national demand which was down ~5%. Company-operated stores grew same-store volume by ~2%, especially in Northeast locations. Inside sales were down 1% year-over-year, but outperformed industry. Company-operated site count increased 79 from prior year, commission agent site count increased 36, overall retail site count increased 115.

Wholesale Segment

• Gross profit: Declined 16% to $27.6 million compared to Q3 2023. Fuel volume declined, but margin per gallon increased. Volume was 186.9 million gallons, down 14% year-over-year. Same-store volume down ~2% year-over-year. Base rent decreased due to site conversions. Divested 9 properties for $7.2 million in proceeds, resulting in a net gain of $5.3 million. Pipeline of transactions active, expecting busy fourth quarter for property sales

• Fourth quarter expected to be busy for property sales as pipeline of transactions is active. Remain focused on managing leverage ratio at approximately 4x on a credit facility-defined basis

• Industry environment remains soft with decreased fuel demand and weak demand in certain store categories. Crude oil price fluctuations can impact fuel margins. Changes in interest rates can affect interest expense. Potential impact of non-conformity of certain performance measures to GAAP

Q: Any questions today?

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