CrossAmerica Partners LP Reports Third Quarter 2024 Results
CrossAmerica Partners LP (NYSE: CAPL) reported Q3 2024 financial results with net income of $10.7 million, down from $12.3 million in Q3 2023. Adjusted EBITDA was $43.9 million, slightly down from $44.2 million year-over-year. The retail segment showed strong performance with gross profit increasing 24% to $83.6 million, while wholesale segment gross profit declined 16% to $27.6 million. The company maintained a distribution coverage ratio of 1.26x and reduced leverage to 4.21x. The Board declared a quarterly distribution of $0.5250 per unit.
CrossAmerica Partners LP (NYSE: CAPL) ha riportato i risultati finanziari per il terzo trimestre del 2024 con un utile netto di 10,7 milioni di dollari, in calo rispetto ai 12,3 milioni di dollari del terzo trimestre del 2023. L'EBITDA rettificato è stato di 43,9 milioni di dollari, leggermente in diminuzione rispetto ai 44,2 milioni dell'anno precedente. Il segmento retail ha mostrato una forte performance con un utile lordo in aumento del 24% a 83,6 milioni di dollari, mentre l'utile lordo nel segmento all'ingrosso è diminuito del 16% a 27,6 milioni di dollari. L'azienda ha mantenuto un rapporto di copertura della distribuzione di 1,26x e ha ridotto il leverage a 4,21x. Il Consiglio ha dichiarato una distribuzione trimestrale di 0,5250 dollari per unità.
CrossAmerica Partners LP (NYSE: CAPL) reportó los resultados financieros del tercer trimestre de 2024 con un ingreso neto de 10,7 millones de dólares, en comparación con 12,3 millones de dólares en el tercer trimestre de 2023. El EBITDA ajustado fue de 43,9 millones de dólares, ligeramente inferior a los 44,2 millones del año anterior. El segmento minorista mostró un desempeño fuerte con una ganancia bruta que aumentó un 24% a 83,6 millones de dólares, mientras que la ganancia bruta del segmento mayorista disminuyó un 16% a 27,6 millones de dólares. La empresa mantuvo un ratio de cobertura de distribución de 1,26x y redujo su apalancamiento a 4,21x. La Junta declaró una distribución trimestral de 0,5250 dólares por unidad.
크로스아메리카 파트너스 LP (NYSE: CAPL)가 2024년 3분기 재무 결과를 발표했습니다. 순이익은 1,070만 달러로, 2023년 3분기 1,230만 달러에서 감소했습니다. 조정 EBITDA는 4390만 달러로, 전년 동기 4420만 달러에서 소폭 감소했습니다. 소매 부문은 총 이익이 24% 증가하여 8,360만 달러에 달하면서 강력한 성과를 보였고, 도매 부문의 총 이익은 16% 감소하여 2,760만 달러로 나타났습니다. 회사는 1.26배의 분배 커버리지 비율을 유지하며, 레버리지 비율을 4.21배로 낮췄습니다. 이사회는 주당 0.5250달러의 분기 배당금을 선언했습니다.
CrossAmerica Partners LP (NYSE: CAPL) a annoncé les résultats financiers du troisième trimestre 2024 avec un revenu net de 10,7 millions de dollars, en baisse par rapport à 12,3 millions de dollars au troisième trimestre 2023. L'EBITDA ajusté s'élevait à 43,9 millions de dollars, légèrement inférieur à 44,2 millions de dollars l'année précédente. Le segment de la vente au détail a affiché une solide performance avec un bénéfice brut augmentant de 24 % pour atteindre 83,6 millions de dollars, tandis que le bénéfice brut du segment de gros a diminué de 16 % pour atteindre 27,6 millions de dollars. La société a maintenu un ratio de couverture de distribution de 1,26x et a réduit l'effet de levier à 4,21x. Le Conseil a déclaré une distribution trimestrielle de 0,5250 dollars par unité.
CrossAmerica Partners LP (NYSE: CAPL) hat die finanziellen Ergebnisse für das 3. Quartal 2024 bekannt gegeben, mit einem Nettoeinkommen von 10,7 Millionen Dollar, was einem Rückgang von 12,3 Millionen Dollar im 3. Quartal 2023 entspricht. Das bereinigte EBITDA betrug 43,9 Millionen Dollar, leicht zurückgegangen von 44,2 Millionen Dollar im Vorjahr. Der Einzelhandelsbereich zeigte eine starke Performance mit einem Anstieg des Bruttogewinns um 24% auf 83,6 Millionen Dollar, während der Bruttogewinn im Großhandelssegment um 16% auf 27,6 Millionen Dollar fiel. Das Unternehmen hielt ein Verhältniss von 1,26x für die Ausschüttungsdeckung und reduzierte die Verschuldung auf 4,21x. Der Vorstand erklärte eine vierteljährliche Ausschüttung von 0,5250 Dollar pro Einheit.
- Retail segment gross profit increased 24% to $83.6 million
- Same-store fuel volume increased 2% in company-operated stores
- Leverage ratio improved to 4.21x from 4.39x in previous quarter
- Divestment of nine properties generated $7.2 million in proceeds with $5.3 million net gain
- Net income decreased to $10.7M from $12.3M year-over-year
- Wholesale segment gross profit declined 16% to $27.6M
- Distribution coverage ratio decreased to 1.26x from 1.43x year-over-year
- Operating expenses increased 27% in retail segment
Insights
The Q3 2024 results show mixed performance with some concerning trends.
Key concerns include rising operating expenses (
The strategic shift toward retail operations through site conversions is driving growth but also increasing operational costs. Same-store metrics remained relatively flat, indicating organic growth.
The company's strategic transformation from wholesale to retail operations shows promising results in terms of revenue mix optimization. Retail fuel margins improved to
The
The maintained quarterly distribution of
Allentown, PA, Nov. 06, 2024 (GLOBE NEWSWIRE) -- 
CrossAmerica Partners LP Reports Third Quarter 2024 Results
- Reported Third Quarter 2024 Net Income of
$10.7 million , Adjusted EBITDA of$43.9 million and Distributable Cash Flow of$27.1 million compared to Net Income of$12.3 million , Adjusted EBITDA of$44.2 million and Distributable Cash Flow of$31.4 million for the Third Quarter 2023 - Reported Third Quarter 2024 Gross Profit for the Retail Segment of
$83.6 million compared to$67.6 million of Gross Profit for the Third Quarter 2023 and Third Quarter 2024 Gross Profit for the Wholesale Segment of$27.6 million compared to$32.9 million of Gross Profit for the Third Quarter 2023 - Leverage, as defined in the CAPL Credit Facility, was 4.21 times as of September 30, 2024, compared to 4.39 times as of June 30, 2024
- The Distribution Coverage Ratio for the trailing twelve months ended September 30, 2024 was 1.26 times compared to 1.43 times for the comparable period of 2023
- The Board of Directors of CrossAmerica's General Partner declared a quarterly distribution of
$0.52 50 per limited partner unit attributable to the Third Quarter 2024
Allentown, PA November 6, 2024 – 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 third quarter ended September 30, 2024.
"CrossAmerica posted a strong third quarter despite broader softness in fuel and store demand," said Charles Nifong, President and CEO of CrossAmerica. "Our company-operated stores delivered solid results, with a two percent increase in same-store fuel volume and strong same-store merchandise sales. Overall, retail segment fuel gallons, sales, gross profit and segment operating income were all materially higher year-over-year, driven by our strategic site conversions to the retail channel. Additionally, we progressed on further retail conversions this quarter and finished the quarter with a solid distribution coverage ratio and a strong balance sheet, at a lower overall leverage ratio than the prior two quarters."
Third Quarter Results
Consolidated Results
| Key Operating Metrics | Q3 2024 | Q3 2023 |
| Net Income | ||
| Operating Expenses | ||
| Adjusted EBITDA | ||
| Distributable Cash Flow | ||
| Distribution Coverage Ratio: Current Quarter | 1.36x | 1.57x |
| Distribution Coverage Ratio: Trailing 12 Months | 1.26x | 1.43x |
CrossAmerica reported a decline in Net Income and a slight decline in Adjusted EBITDA for the third quarter 2024 compared to the third quarter 2023. The slight decrease in Adjusted EBITDA year-over-year for the quarter was primarily driven by an increase in motor fuel and merchandise gross profit in the retail segment offset by an increase in operating expenses, both primarily related to the conversion of certain lessee dealer and commission agent sites to company operated sites. The declines in Net Income and Distributable Cash Flow were primarily driven by an increase in interest expense relative to the prior year, mainly due to the expiration of certain favorable interest rate hedges that occurred on April 1, 2024.
Retail Segment
| Key Operating Metrics | Q3 2024 | Q3 2023 | ||||
| Retail segment gross profit | ||||||
| Retail segment motor fuel gallons distributed | 148.4M | 132.2M | ||||
| Same store motor fuel gallons distributed | 126.1M | 126.3M | ||||
| Retail segment motor fuel gross profit | ||||||
| Retail segment margin per gallon, before deducting credit card fees and commissions | $ | 0.406 | $ | 0.372 | ||
| Same store merchandise sales excluding cigarettes* | ||||||
| Merchandise gross profit* | ||||||
| Merchandise gross profit percentage* | 27.9 | % | 28.7 | % | ||
| Operating Expenses | ||||||
| Retail Sites (end of period) | 597 | 482 | ||||
*Includes only company operated retail sites
For the third quarter 2024, the retail segment generated a
The retail segment sold 148.4 million of retail fuel gallons during the third quarter 2024, which was an increase of
For the third quarter 2024, CrossAmerica’s merchandise gross profit increased
For the third quarter 2024, operating expenses for the retail segment increased
Wholesale Segment
| Key Operating Metrics | Q3 2024 | Q3 2023 | ||
| Wholesale segment gross profit | ||||
| Wholesale motor fuel gallons distributed | 186.9M | 217.3M | ||
| Average wholesale gross margin per gallon | $ | 0.090 | $ | 0.086 |
During the third quarter 2024, CrossAmerica’s wholesale segment gross profit decreased
Divestment Activity
During the three months ended September 30, 2024, CrossAmerica sold nine properties for
Liquidity and Capital Resources
As of September 30, 2024, CrossAmerica had
Distributions
On October 23, 2024, the Board of the Directors of CrossAmerica’s General Partner (“Board”) declared a quarterly distribution of
Conference Call
The Partnership will host a conference call on November 7, 2024 at 9:00 a.m. Eastern Time to discuss the third quarter 2024 earnings results. The conference call numbers are 800-717-1738 or 646-307-1865 and the passcode for both is 264936. 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). 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.
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 within the same segment. Same store merchandise sales excludes other revenues such as lottery commissions and car wash sales. Certain merchandise products have been transitioned from a gross profit model (whereby CrossAmerica owns the inventory and records sales and cost of sales) to a scan-based trading model (whereby a third party owns the inventory and CrossAmerica records a commission in other revenues). Same store merchandise sales for the three and nine months ended September 30, 2024 were adjusted to gross it up for the sales that would have been recorded had CrossAmerica not changed models.
CROSSAMERICA PARTNERS LP
CONSOLIDATED BALANCE SHEETS
(Thousands of Dollars, except unit data)
| September 30, | December 31, | |||||||
| 2024 | 2023 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 7,765 | $ | 4,990 | ||||
| Accounts receivable, net of allowances of | 31,946 | 31,185 | ||||||
| Accounts receivable from related parties | 574 | 437 | ||||||
| Inventory | 60,973 | 52,344 | ||||||
| Assets held for sale | 11,660 | 400 | ||||||
| Current portion of interest rate swap contracts | 2,205 | 9,321 | ||||||
| Other current assets | 10,612 | 9,845 | ||||||
| Total current assets | 125,735 | 108,522 | ||||||
| Property and equipment, net | 665,188 | 705,217 | ||||||
| Right-of-use assets, net | 137,797 | 148,317 | ||||||
| Intangible assets, net | 81,512 | 95,261 | ||||||
| Goodwill | 99,409 | 99,409 | ||||||
| Deferred tax assets | 80 | 759 | ||||||
| Interest rate swap contracts, less current portion | 294 | 687 | ||||||
| Other assets | 20,099 | 23,510 | ||||||
| Total assets | $ | 1,130,114 | $ | 1,181,682 | ||||
| LIABILITIES AND EQUITY | ||||||||
| Current liabilities: | ||||||||
| Current portion of debt and finance lease obligations | $ | 3,233 | $ | 3,083 | ||||
| Current portion of operating lease obligations | 34,854 | 34,787 | ||||||
| Accounts payable | 81,507 | 68,986 | ||||||
| Accounts payable to related parties | 7,908 | 10,180 | ||||||
| Current portion of interest rate swap contracts | 221 | — | ||||||
| Accrued expenses and other current liabilities | 25,956 | 23,674 | ||||||
| Motor fuel and sales taxes payable | 19,120 | 20,386 | ||||||
| Total current liabilities | 172,799 | 161,096 | ||||||
| Debt and finance lease obligations, less current portion | 769,233 | 753,880 | ||||||
| Operating lease obligations, less current portion | 107,936 | 118,723 | ||||||
| Deferred tax liabilities, net | 7,469 | 12,919 | ||||||
| Asset retirement obligations | 48,669 | 47,844 | ||||||
| Interest rate swap contracts, less current portion | 3,647 | 3,535 | ||||||
| Other long-term liabilities | 51,059 | 52,934 | ||||||
| Total liabilities | 1,160,812 | 1,150,931 | ||||||
| Commitments and contingencies (Note 11) | ||||||||
| Preferred membership interests | 28,343 | 27,744 | ||||||
| Equity: | ||||||||
| Common units— 38,046,688 and 37,983,154 units issued and outstanding at September 30, 2024 and December 31, 2023, respectively | (57,414 | ) | (2,392 | ) | ||||
| Accumulated other comprehensive (loss) income | (1,627 | ) | 5,399 | |||||
| Total (deficit) equity | (59,041 | ) | 3,007 | |||||
| Total liabilities and equity | $ | 1,130,114 | $ | 1,181,682 | ||||
CROSSAMERICA PARTNERS LP
CONSOLIDATED STATEMENTS OF OPERATIONS
(Thousands of Dollars, Except Unit and Per Unit Amounts)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Operating revenues (a) | $ | 1,079,163 | $ | 1,210,023 | $ | 3,154,066 | $ | 3,371,578 | ||||||||
| Costs of sales (b) | 967,937 | 1,109,583 | 2,856,730 | 3,091,355 | ||||||||||||
| Gross profit | 111,226 | 100,440 | 297,336 | 280,223 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Operating expenses (c) | 60,766 | 50,609 | 168,619 | 146,030 | ||||||||||||
| General and administrative expenses | 7,310 | 6,877 | 22,040 | 20,091 | ||||||||||||
| Depreciation, amortization and accretion expense | 20,736 | 19,096 | 57,903 | 58,214 | ||||||||||||
| Total operating expenses | 88,812 | 76,582 | 248,562 | 224,335 | ||||||||||||
| Gain (loss) on dispositions and lease terminations, net | 4,682 | 287 | (6,546 | ) | 5,220 | |||||||||||
| Operating income | 27,096 | 24,145 | 42,228 | 61,108 | ||||||||||||
| Other income, net | 197 | 174 | 604 | 598 | ||||||||||||
| Interest expense | (14,169 | ) | (10,559 | ) | (38,918 | ) | (33,254 | ) | ||||||||
| Income before income taxes | 13,124 | 13,760 | 3,914 | 28,452 | ||||||||||||
| Income tax expense (benefit) | 2,416 | 1,468 | (1,678 | ) | 2,603 | |||||||||||
| Net income | 10,708 | 12,292 | 5,592 | 25,849 | ||||||||||||
| Accretion of preferred membership interests | 582 | 629 | 1,911 | 1,845 | ||||||||||||
| Net income available to limited partners | $ | 10,126 | $ | 11,663 | $ | 3,681 | $ | 24,004 | ||||||||
| Earnings per common unit | ||||||||||||||||
| Basic | $ | 0.27 | $ | 0.31 | $ | 0.10 | $ | 0.63 | ||||||||
| Diluted | $ | 0.27 | $ | 0.31 | $ | 0.10 | $ | 0.63 | ||||||||
| Weighted-average common units: | ||||||||||||||||
| Basic | 38,041,815 | 37,966,474 | 38,021,173 | 37,953,348 | ||||||||||||
| Diluted | 38,200,833 | 38,139,258 | 38,181,684 | 38,126,392 | ||||||||||||
| Supplemental information: | ||||||||||||||||
| (a) includes excise taxes of: | $ | 86,108 | $ | 76,991 | $ | 239,215 | $ | 223,066 | ||||||||
| (a) includes rent income of: | 16,938 | 20,137 | 53,959 | 61,980 | ||||||||||||
| (b) excludes depreciation, amortization and accretion | ||||||||||||||||
| (b) includes rent expense of: | 5,010 | 5,679 | 15,621 | 16,891 | ||||||||||||
| (c) includes rent expense of: | 4,533 | 3,957 | 12,972 | 11,666 | ||||||||||||
CROSSAMERICA PARTNERS LP
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Thousands of Dollars)
| Nine Months Ended September 30, | ||||||||
| 2024 | 2023 | |||||||
| Cash flows from operating activities: | ||||||||
| Net income | $ | 5,592 | $ | 25,849 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation, amortization and accretion expense | 57,903 | 58,214 | ||||||
| Amortization of deferred financing costs | 1,452 | 2,806 | ||||||
| Credit loss expense | 81 | 37 | ||||||
| Deferred income tax (benefit) expense | (4,770 | ) | 1,145 | |||||
| Equity-based employee and director compensation expense | 1,134 | 2,084 | ||||||
| Loss (gain) on dispositions and lease terminations, net | 6,546 | (5,220 | ) | |||||
| Changes in operating assets and liabilities, net of acquisitions | 8,734 | (5,926 | ) | |||||
| Net cash provided by operating activities | 76,672 | 78,989 | ||||||
| Cash flows from investing activities: | ||||||||
| Principal payments received on notes receivable | 117 | 162 | ||||||
| Proceeds from sale of assets | 17,969 | 4,983 | ||||||
| Capital expenditures | (19,131 | ) | (21,680 | ) | ||||
| Lease terminations payments to Applegreen, including inventory purchases | (25,517 | ) | — | |||||
| Net cash used in investing activities | (26,562 | ) | (16,535 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Borrowings under revolving credit facilities | 90,919 | 221,900 | ||||||
| Repayments on revolving credit facilities | (74,500 | ) | (65,537 | ) | ||||
| Repayments on the Term Loan Facility | — | (158,980 | ) | |||||
| Payments of finance lease obligations | (2,294 | ) | (2,150 | ) | ||||
| Payments of deferred financing costs | (74 | ) | (7,106 | ) | ||||
| Distributions paid on distribution equivalent rights | (194 | ) | (168 | ) | ||||
| Income tax distributions paid on preferred membership interests | (1,312 | ) | (900 | ) | ||||
| Distributions paid on common units | (59,880 | ) | (59,777 | ) | ||||
| Net cash used in financing activities | (47,335 | ) | (72,718 | ) | ||||
| Net increase (decrease) in cash and cash equivalents | 2,775 | (10,264 | ) | |||||
| Cash and cash equivalents at beginning of period | 4,990 | 16,054 | ||||||
| Cash and cash equivalents at end of period | $ | 7,765 | $ | 5,790 | ||||
Segment Results
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 and per gallon amounts):
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Gross profit: | ||||||||||||||||
| Motor fuel | $ | 45,759 | $ | 36,226 | $ | 111,084 | $ | 98,723 | ||||||||
| Merchandise | 30,494 | 25,427 | 81,786 | 67,782 | ||||||||||||
| Rent | 2,403 | 2,034 | 6,969 | 6,808 | ||||||||||||
| Other revenue | 4,931 | 3,901 | 14,778 | 11,149 | ||||||||||||
| Total gross profit | 83,587 | 67,588 | 214,617 | 184,462 | ||||||||||||
| Operating expenses | (52,224 | ) | (41,138 | ) | (143,986 | ) | (117,094 | ) | ||||||||
| Operating income | $ | 31,363 | $ | 26,450 | $ | 70,631 | $ | 67,368 | ||||||||
| Retail sites (end of period): | ||||||||||||||||
| Company operated retail sites (a) | 372 | 293 | 372 | 293 | ||||||||||||
| Commission agents (b) | 225 | 189 | 225 | 189 | ||||||||||||
| Total system sites at the end of the period | 597 | 482 | 597 | 482 | ||||||||||||
| Total retail segment statistics: | ||||||||||||||||
| Volume of gallons sold | 148,380 | 132,160 | 413,113 | 382,049 | ||||||||||||
| Same store total system gallons sold (c) | 126,119 | 126,323 | 343,722 | 351,409 | ||||||||||||
| Average retail fuel sites | 595 | 482 | 561 | 472 | ||||||||||||
| Margin per gallon, before deducting credit card fees and commissions | $ | 0.406 | $ | 0.372 | $ | 0.366 | $ | 0.354 | ||||||||
| Company operated site statistics: | ||||||||||||||||
| Average retail fuel sites | 372 | 293 | 350 | 279 | ||||||||||||
| Same store fuel volume (c) | 89,174 | 87,280 | 235,403 | 237,472 | ||||||||||||
| Margin per gallon, before deducting credit card fees | $ | 0.437 | $ | 0.394 | $ | 0.391 | $ | 0.378 | ||||||||
| Same store merchandise sales (c) | $ | 85,138 | $ | 86,136 | $ | 214,553 | $ | 215,763 | ||||||||
| Same store merchandise sales excluding cigarettes | $ | 60,843 | $ | 60,869 | $ | 152,393 | $ | 150,909 | ||||||||
| Merchandise gross profit percentage | 27.9 | % | 28.7 | % | 28.1 | % | 28.5 | % | ||||||||
| Commission site statistics: | ||||||||||||||||
| Average retail fuel sites | 223 | 189 | 211 | 193 | ||||||||||||
| Margin per gallon, before deducting credit card fees and commissions | $ | 0.331 | $ | 0.325 | $ | 0.306 | $ | 0.306 | ||||||||
(a) The increase in the company operated site count was primarily attributable to the conversion of certain lessee dealer and commission agent sites to company operated sites.
(b) The increase in the commission agent site count was primarily attributable to the conversion of certain lessee dealer sites to commission agent sites, partially offset by the conversion of certain commission agent sites to company operated sites.
(c) 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 other revenues such as lottery commissions and car wash sales. Certain merchandise products have been transitioned from a gross profit model (whereby CrossAmerica owns the inventory and records sales and cost of sales) to a scan-based trading model (whereby a third party owns the inventory and CrossAmerica records a commission in other revenues). Same store merchandise sales for the three and nine months ended September 30, 2024 were adjusted to gross it up for the sales that would have been recorded had CrossAmerica not changed models.
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 September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Gross profit: | ||||||||||||||||
| Motor fuel gross profit | $ | 16,870 | $ | 18,786 | $ | 48,112 | $ | 53,427 | ||||||||
| Rent gross profit | 9,525 | 12,424 | 31,369 | 38,281 | ||||||||||||
| Other revenues | 1,244 | 1,642 | 3,238 | 4,053 | ||||||||||||
| Total gross profit | 27,639 | 32,852 | 82,719 | 95,761 | ||||||||||||
| Operating expenses | (8,542 | ) | (9,471 | ) | (24,633 | ) | (28,936 | ) | ||||||||
| Operating income | $ | 19,097 | $ | 23,381 | $ | 58,086 | $ | 66,825 | ||||||||
| Motor fuel distribution sites (end of period): (a) | ||||||||||||||||
| Independent dealers (b) | 602 | 636 | 602 | 636 | ||||||||||||
| Lessee dealers (c) | 444 | 582 | 444 | 582 | ||||||||||||
| Total motor fuel distribution sites | 1,046 | 1,218 | 1,046 | 1,218 | ||||||||||||
| Average motor fuel distribution sites | 1,057 | 1,222 | 1,109 | 1,243 | ||||||||||||
| Volume of gallons distributed | 186,946 | 217,348 | 563,082 | 637,340 | ||||||||||||
| Margin per gallon | $ | 0.090 | $ | 0.086 | $ | 0.085 | $ | 0.084 | ||||||||
(a) In addition, CrossAmerica distributed motor fuel to sub-wholesalers who distributed to additional sites.
(b) The decrease in the independent dealer site count was primarily attributable to the net loss of contracts, partially offset by divestitures of certain lessee dealer sites but with continued fuel supply.
(c) The decrease in the lessee dealer count was primarily attributable to the conversion of certain lessee dealer sites to company operated sites, including through the Applegreen Acquisition, and CrossAmerica's real estate rationalization effort.
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 September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Net income | $ | 10,708 | $ | 12,292 | $ | 5,592 | $ | 25,849 | ||||||||
| Interest expense | 14,169 | 10,559 | 38,918 | 33,254 | ||||||||||||
| Income tax expense (benefit) | 2,416 | 1,468 | (1,678 | ) | 2,603 | |||||||||||
| Depreciation, amortization and accretion expense | 20,736 | 19,096 | 57,903 | 58,214 | ||||||||||||
| EBITDA | 48,029 | 43,415 | 100,735 | 119,920 | ||||||||||||
| Equity-based employee and director compensation expense | 560 | 961 | 1,134 | 2,084 | ||||||||||||
| (Gain) loss on dispositions and lease terminations, net (a) | (4,682 | ) | (287 | ) | 6,546 | (5,220 | ) | |||||||||
| Acquisition-related costs (b) | 31 | 120 | 1,661 | 1,361 | ||||||||||||
| Adjusted EBITDA | 43,938 | 44,209 | 110,076 | 118,145 | ||||||||||||
| Cash interest expense | (13,685 | ) | (10,078 | ) | (37,466 | ) | (30,448 | ) | ||||||||
| Sustaining capital expenditures (c) | (2,594 | ) | (1,837 | ) | (6,162 | ) | (5,322 | ) | ||||||||
| Current income tax expense (d) | (519 | ) | (905 | ) | (1,527 | ) | (1,458 | ) | ||||||||
| Distributable Cash Flow | $ | 27,140 | $ | 31,389 | $ | 64,921 | $ | 80,917 | ||||||||
| Distributions paid on common units | 19,975 | 19,934 | 59,880 | 59,777 | ||||||||||||
| Distribution Coverage Ratio | 1.36x | 1.57x | 1.08x | 1.35x | ||||||||||||
(a) During the nine months ended September 30, 2024, CrossAmerica recorded a
(b) Relates to certain acquisition-related costs, such as legal and other professional fees, separation benefit costs and purchase accounting adjustments associated with recent acquisitions.
(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) Excludes income tax incurred on the sale of sites.
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 1,600 locations and owns or leases approximately 1,100 sites. With a geographic footprint covering 34 states, the Partnership has well-established relationships with several major oil brands, including ExxonMobil, BP, Shell, Marathon, Valero, Phillips 66 and other major brands. 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 610-625-8000
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.
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